St. Helena City Council
May 28, 2024

City of St. Helena
Regular City Council Meeting
Tuesday, May 28, 2024 @ 6:00 PM
Vintage Hall Board Room - Second Floor
465 Main Street, St. Helena

PLEASE NOTE: Any person who wishes to speak regarding an item on the agenda or make a comment under the "Oral Communication" portion of the agenda may do so, but please observe the time limit of four minutes. The Mayor may reduce the four minute time limit for all speakers in circumstances where a large number of citizens intend to make public comment.

Public comment for meetings will be accepted via email to [email protected]. All public comments must be received three hours prior to the meeting. All other public comments received after the deadline will be attached to the item the next business day or soon thereafter. Public comments will not be read out loud but will be publicly available and attached to the on-line agenda.

The schedule of upcoming meetings and published meeting agendas can be found on the City of St. Helena website at https://sthelena.civicweb.net/portal/.

Page

1. CALL TO ORDER

2. ROLL CALL
Mayor: Paul Dohring, Vice Mayor Eric Hall:, City Council Members: Anna Chouteau, Patrick Kenealy, Billy Summers

3. PLEDGE OF ALLEGIANCE

4. ADOPTION OF THE AGENDA

5. JOINT CITY COUNCIL AND FINANCING AUTHORITY NEW BUSINESS:

The St. Helena City Council will now convene the meeting as a joint meeting of the City Council and Financing Authority.

Estimated start time: 6:05 p.m.

5.1. City Council Resolution approving: (1) installment sale financing to provide financing of water system improvements, and (2) financing documents and related official actions.

St. Helena Financing Authority Resolution approving: (1) installment sale financing to provide financing of water system improvements, and (2) financing documents and related official actions.

CEQA Determination: Not a CEQA project
Prepared By: Mandy Kellogg, Administrative Services Director Recommendation:

Staff recommends approval of the attached resolution.
9 - 225

Staff Report - Pdf
Public Comment.Water Audit California

6. The joint St. Helena City Council and Financing Authority will now convene the meeting as a regular City Council meeting.

7. APPROVAL OF THE MINUTES
Estimated start time: 6:20 p.m.

7.1. Consideration and proposed approval of Regular Meeting Minutes of May 14, 2024.

Regular City Council minutes - 14 May 2024
227 - 236

8. PUBLIC FORUM:

Members of the public are entitled to speak on matters of municipal concern not on the agenda during Public Forum. Each person’s comments shall be limited to 4 minutes. Each person is entitled to speak on any non-agendized item only once at any meeting. Brief questions by Council Members for clarifications may be posed and answered, and Council Members may make requests that items be placed on future agendas, but in accordance with state law, no substantive discussion or action may take place unless and until the matter properly appears on the agenda.

Estimated start time: 6:25 p.m.

9. REPORTS BY STAFF AND CITY COUNCIL, FUTURE AGENDA ITEMS, AND AB 1234 REPORTS:

Reports by staff and/or Council Members on items of general interest. Brief questions for clarification may be posed and answered, and Council Members may request that items be placed on a future agenda. Except under certain circumstances, the Brown Act prohibits any other discussion or action by the City Council.

Estimated start time: 6:35 p.m.

9.1. Update on Pedestrian Improvements for Intersection of Kearney Street and Madrona Avenue per Active Transportation & Sustainability Committee engagement on 5/22/24.

CEQA Determination: Categorically Exempt, Section 15323 Prepared By: Joseph Leach, Public Works Director and City Engineer Staff Report - Pdf
Presentation
237 - 245

10. PRESENTATIONS AND PUBLIC RECOGNITIONS
Estimated start time: 6:45 p.m.

10.1. Proclamation recognizing May as National Mental Health Awareness Month
Proclamation
247

10.2. Proclamation recognizing Gun Violence Awareness Day and Month Proclamation
249 - 250

10.3. Proclamation recognizing LGBTQ + Pride Month
Proclamation
251

11. STAFF BRIEFING

12. CONSENT ITEMS
Members of the Council or the public (present at the meeting) may ask that any items be considered individually for purposes of considering alternative action, for extended discussion, or for public comment. Unless that is done, one motion may be used to adopt all recommended actions. (Roll Call Vote) Estimated start time: 6:55 p.m.

12.1. Review of the 2023 St. Helena Annual Housing Element Progress Report (APR).

CEQA Determination: Not a CEQA project
Prepared By: Aaron Hecock, Senior Planner
Recommendation:

It is recommended that the City Council review, consider, and file this report recognizing that staff submitted the information to HCD and OPR in keeping with the April 1, 2024 mandate.

Staff Report - Pdf
Public Comment.Water Audit California
253 - 295

12.2. Consideration and adoption of a resolution authorizing Amendment #1 to Professional Services Agreement (PSA) FY2021-049 with Housing Element consultant Mintier Harnish related to City Council direction to explore alternative sites, units or other options for replacing Housing Element Opportunity Site #10 for an additional $25,000 for a total contract amount not to exceed $253,024.

CEQA Determination: Exempt
Prepared By: Aaron Hecock, Senior Planner
Recommendation:

Staff recommends that the City Council adopt the attached resolution.

Staff Report - Pdf
297 - 319

12.3. Authorization to pay invoices from Aaction Rent for a cost not-toexceed $70,323 for emergency pump rentals at the Wastewater Treatment Plant for high flow events due to extended rain season.

CEQA Determination: Not a CEQA project
Prepared By: Lesley Milton, Assistant Director of Public Works - Operations
Recommendation:

Authorization to issue payment for pump rentals needed for inflow & influent (I&I) and Sanitary Sewer overflow (SSO) mitigation.

Staff Report - Pdf
321 - 330

12.4. Approval of a resolution authorizing the purchase of two 8-inch trailer 331 - 351

mounted pumps for a total cost of $237,935.80 from Holland Pump to assist with prevention of sanitary sewer overflows and other potential flooding events.

CEQA Determination: Not a CEQA project
Prepared By: Lesley Milton, Assistant Director of Public Works - Operations
Recommendation:

Approve the attached resolution authorizing the purchase.

Staff Report - Pdf

12.5. Authorize the purchase of capital equipment for a US Jetter 4018-300 Trailer Mounted High Pressure Jetting Unit from WECO Industries LLC for a total cost not-to-exceed $72,831.00
CEQA Determination: Not a CEQA project
Prepared By: Lesley Milton, Assistant Director of Public Works - Operations
Recommendation:

Authorize the purchase of the equipment.

Staff Report - Pdf
353 - 359

12.6. Approve a resolution: (1) establishing Capital Improvement Project W24-11 Bell Canyon Dam DSOD Analysis/Improvements with a budget of $860,000; (2) allocating $860,000 from the 2024 Water Bonds Issuance; (3) authorizing the City Manager to enter into a Professional Services Agreement (PSA) with Haley Aldrich Inc for engineering and project management services to provide a high-quality geotechnical exploration of Bell Canyon Dam for a not-to-exceed total of $781,900; and (4) authorize the Public Works Director to approve amendments to the Agreement to increase the not-to-exceed amount by up to 10% of the original PSA amount.

CEQA Determination: Categorically Exempt, Section 15323 Prepared By: Lesley Milton, Assistant Director of Public Works - Operations
Recommendation:

Approve the attached Resolution.

Staff Report - Pdf
Public Comment.Water Audit California
Public Comment.Mike Hackett
361 - 393

12.7. Consideration and Proposed Approval of a Contract to Godbe Research for a Community Survey in an amount not-to-exceed $32,375 CEQA Determination: Exempt
Prepared By: Andrew Bradley, Program Manager
Recommendation:

Approve the attached resolution.

Staff Report - Consideration of Resolution for Godbe Research 2024 Community Survey - Pdf
395 - 432

12.8. Consideration and adoption of a Resolution: (1) Awarding the R24-79 433 - 437

Pavement Restoration Project to Argonaut Constructors in the amount of $2,197,939.77; (2) Authorizing the City Manager to execute the Construction Contract with Argonaut Constructors; (3) Requesting a budget increase for project R24-79 of $1,315,233.75; (4) Authorizing budget transfer from Measure T fund balance; (5) Authorizing the Director of Public Works to approve Change Orders not to exceed 10% of the contract amount; and (6) Determining the project to be exempt from the requirements of the California Environmental Quality Act (CEQA).

CEQA Determination: Class I Categorical Exemption under Section 15301 of CEQA
Prepared By: Mario Traverso, Project Manager
Recommendation:

Approve the Resolution
Staff Report - Pdf

12.9. Approving request to the Metropolitan Transportation Commission for the allocation of the fiscal year FY-2024 Transportation Development Act Article 3 Pedestrian / Bicycle project funding.

CEQA Determination: Not a CEQA project
Prepared By: Jose Calderon, Engineering Technician II
Recommendation:

Approve the Resolution.

Staff Report - Pdf
Resolution
Attachment A - Findings
Attachment C - Location Map
Attachment B - Application
439 - 460

12.10. Consideration and proposed approval of a resolution authorizing a ceremonial flag recognizing LGBTQ+ Pride Month during the month of June 2024.

CEQA Determination: Exempt
Prepared By: Andrew Bradley, Program Manager
Recommendation:

Approve a resolution authorizing the Progress Pride flag to be flown on the City's ceremonial flag pole during the month of June 2024.

Staff Report - Pride Month 2024 - Pdf
461 - 462

12.11. April 2024 Review and Forecasting of City Water Supply Availability.

CEQA Determination: Not a CEQA project
Prepared By: Ian Dale, Environmental Services Tech
Recommendation:

Receive and file.

Staff Report - Pdf
Public Comment.Water Audit California
463 - 477

13. PUBLIC HEARINGS

None.

14. OLD BUSINESS
Estimated start time: 7:10 p.m.

14.1. Consideration and proposed approval of a resolution directing staff to prepare a report to the City Council pursuant to California Elections Code Section 9212 analyzing the impacts and effects of the Noble House proposal titled, "St. Helena Agritourism Initiative." CEQA Determination: Not a CEQA project
Prepared By: April Mitts, Assistant City Manager
Recommendation:

Direct City staff to prepare a report on the proposed initiative analyzing the impacts enumerated in Elections Code Section 9212 and return to Council with the report at the June 25 Council meeting.

Staff Report - Pdf
Presentation
Public Comment.Mark Wolfe
479 - 537

15. NEW BUSINESS
Estimated start time: 7:30 p.m.

15.1. Consider and Adopt a Resolution Identifying Sidewalk Segments for which Maintenance is the Responsibility of the City of St. Helena.

CEQA Determination: Exempt
Prepared By: Eric Janzen, Assistant Public Works Director Recommendation:

Approve the attached resolution.

Staff Report - Pdf
Presentation
539 - 547

15.2. Presentation of analysis for the updated Cost Allocation Plan to allocate personnel costs to various funds as appropriate including Water and Wastewater funds.

CEQA Determination: Not a CEQA project
Prepared By: Yosselyn Valencia, Finance Manager
Recommendation:

Staff recommends approval of the attached resolution.

Staff Report - Pdf
549 - 646

15.3. Fiscal Year (FY) 2023-24 and 2024-25 Mid-Cycle Budget Report and Consideration of a Resolution Approving Mid-Cycle Budget Adjustments for FY 2024-25.

Estimated start time: 8:05 p.m.
647 - 697

CEQA Determination: Not a CEQA project
Prepared By: Mandy Kellogg, Administrative Services Director Recommendation:

Staff recommends approval of the attached resolution.

Staff Report - Pdf

16. CITY COUNCIL REPORTS:

Estimated start time: 8:35 p.m.

16.1. A. Association of Bay Area Governments (ABAG) - Executive Board B. Association of Bay Area Governments (ABAG) - General Assembly C. Napa Valley Tourism Corporation (Umbrella for Napa County) D. League of California Cities – North Bay Division
E. Napa County City Selection Committee
F. Napa County Flood Control and Water Conservation District G. Youth Opportunities Commission
H. Napa County Local Agency Formation Commission (LAFCO) I. Napa Valley Transportation Authority (NVTA)
J. Napa County Watershed Information Center & Conservancy (WICC) K. Upper Valley Waste Management Agency
L. Napa County Groundwater Sustainability Plan Advisory Committee M. Napa County Regional Climate Action Committee
N. Council Ad Hoc and Standing Committee Reports

17. ADJOURNMENT
The next Regular City Council meeting is scheduled for June 11, 2024 at 6:00 p.m.

This agenda was posted at City Hall, 1088 College Avenue, and at Vintage Hall, 465 Main Street, St. Helena, California on May 23, 2024.

Cindy Tzafopoulos, City Clerk
In Compliance with the Americans with Disabilities Act, if you need special assistance to participate in this meeting, please call the City Clerk’s Office (707) 967-2792. Notification 72 hours prior to the meeting as required by

Section 202 of the Americans with Disabilities Act will enable the City to make reasonable arrangements to ensure accessibility to this meeting.

CHALLENGING DECISIONS OF CITY ENTITIES
The time limit within which to commence any lawsuit or legal challenge to any quasi-adjudicative decision made by the City of St. Helena is governed by Section 1094.6 of the Code of Civil Procedure, unless a shorter limitation period is specified by any other provision, including without limitation Government Code section 65009 applicable to many land use and zoning decisions, Government Code section 66499.37 applicable to the Subdivision Map Act, and Public Resources Code section 21167 applicable to the California Environmental Quality Act (CEQA). Under Section 1094.6, any lawsuit or legal challenge to any quasi-adjudicative decision made by the City must be filed no later than the 90th day following the date on which such decision becomes final. Any lawsuit or legal challenge, which is not filed within that 90-day period, will be barred. Government Code section 65009 and 66499.37, and Public Resources Code section 21167, impose shorter limitations periods and requirements, including timely service in addition to filing.

If a person wishes to challenge the above actions in court, they may be limited to raising only those issues they or someone else raised at the meeting described in this notice, or in written correspondence delivered to the City of St. Helena, at or prior to the meeting. In addition, judicial challenge may be limited or barred where the interested party has not sought and exhausted all available administrative remedies.

SUPPLEMENTAL MATERIAL RECEIVED AFTER THE POSTING OF THE AGENDA
Any supplemental writings or documents distributed to a majority of the City Council regarding any item on this Agenda, after the posting of the Agenda, will be available for public review in the City Clerk’s Office located at 1088 College Avenue, St. Helena, California, during normal business hours and by appointment. In addition, such writings or documents will be made available on the City’s web site at https://sthelena.civicweb.net and will be available for public review at the respective meeting.

Agenda Report to the City Council
Agenda Section: NEW BUSINESS
Department: Finance
DATE: May 28, 2024
FROM: Mandy Kellogg, Administrative Services Director
SUBJECT: City Council Resolution approving: (1) installment sale financing to provide financing of water system
improvements, and (2) financing documents and related
official actions.

St. Helena Financing Authority Resolution approving: (1) installment sale financing to provide financing of water system improvements, and (2) financing documents and
related official actions.

RECOMMENDED
ACTION:

Staff recommends approval of the attached resolution.

PREVIOUS COUNCIL
ACTION:

April 9, 2024 - Authorizing hiring of professionals for a Water Bond financing transaction related to funding for Water Capital Improvement Projects.

STATEMENT OF THE
PURPOSE:

The purpose is to approve installment sale financing in an amount not-to-exceed $12,000,000 for Capital
Improvement Projects related to the water system and
authorize the execution of the financing documents.

FINANCIAL IMPACT: The total Financial Impact is $21,382,022, which will be recorded as debt service in the Water Enterprise Fund 561 and will be paid over a 30-year period with future water rate revenues. Fiscal Year 2024-25 debt service payment is estimated at $352,147. The estimated amortization
schedule is available in Exhibit 7.

BACKGROUND:

The City owns and operates a system for the supply, treatment and distribution of water within the service area of the City (the “Water System”). At the June 27, 2023 meeting, the City Council approved Resolution No. 2023-80 approving the Water and Wastewater Rate Study (the “Rate Study”). The Rate Study included a financial plan which proposed the issuance of bonds in three different series over time to fund the majority of the Water System capital improvements. The use of debt allows for lower rate increases over the long-term by financing significant capital reinvestment and repaying over a long-time horizon.

The first series of bonds is anticipated to fund $10.5 million in Water System capital improvements including, but not limited to, the Bell Canyon Intake tower Replacement, Agenda Item #5.1.

Kearney and Andrea Water Main Replacement and the SMART meters project. The estimated amount of bonds to be issued, including all costs associated with the financing, is $10,265,000 with a not-to-exceed amount of $12,000,000.

At the April 9, 2024 meeting, the City Council approved Resolution No. 2024-046 affirming the City’s desire to finance improvements to the Water System and authorized City staff to move forward with hiring professionals needed to facilitate the financing.

City staff and the team of professionals have been working on the various required documents and bringing the item tonight for review and approval.

DISCUSSION:

The proposed financing will be designated the St. Helena Financing Authority, 2024 Water Revenue Bonds (the “2024 Bonds”). The estimated amount of bonds to be issued, including all costs associated with the financing, is $10,265,000 with a not-toexceed amount of $12,000,000. The Authority was established to assist the City with bond financing and the City Council also sits as the governing board of the Authority.

The 2024 Bonds will be secured by the net revenues of the Water System, on a parity with the following existing obligations of the Water System:
 2019 Loan: On March 14, 2019, the City entered into a Loan Agreement (the “2019 Loan”) with JPMorgan Chase Bank, N.A. to refinance obligations of the Water System incurred in 2006. The initial amount of the 2019 Loan was $5,821,000, has a current balance of $3,809,700 and matures on October 1, 2031.
 2012 Bonds: On June 21, 2012, the City, along with other participants, issued the California Statewide Communities Development Authority, Water and Wastewater Revenue Bonds, Series 2012B (the “2012 Bonds”). The City’s share was $7,155,000, split between both the Water System ($5,599,565) and wastewater system ($1,555,435). The Water System’s remaining share is $3,251,738 and the bonds mature on October 1, 2032.

The 2024 Bonds will be on parity with both the outstanding 2019 Loan and Water System portion of the 2012 Bonds, which means they have an equal right to the net revenues of the Water System (i.e., gross revenues less operations and maintenance costs). The proposed amortization is 30 years solving around the existing obligations with the ultimate target of level debt service on a combined basis.

The team working on the 2024 Bonds consists of Jones Hall as both Bond Counsel and Disclosure Counsel, Oppenheimer & Co. Inc. as Underwriter, Del Rio Advisors, LLC as Municipal Advisor and U.S. Bank Trust Company, National Association as Trustee, collectively (the “Financing Team”).

Agenda Item #5.1.

The Financing Team has applied for a rating from S&P Global Ratings and also applied for bond insurance and surety for the reserve fund with the two active bond insurers.

Staff and the financing team are expected to meet with S&P during the week of May 27th to answer detailed questions about the Water System credit and the City’s economics. The rating is expected to be released during the week of June 10th.

Depending on the S&P rating category, the City may be able to forego funding a reserve fund. However, if the cost of insurance and a surety policy for the reserve fund are beneficial, the Financing Team will recommend pursuing insurance and a surety with one of the two active bond insurers either Assured Guaranty or Build America Mutual.

Should the City Council and Authority Board approve the action tonight, the sale is scheduled for July 10th and the bonds are expected to close and proceeds will be delivered on July 24th.

Documents for Review and Approval
(1) Indenture of Trust (Exhibit 3): An agreement between the Authority and U.S.

Bank Trust Company, National Association (“U.S. Bank”) as Trustee. This document governs all the terms and conditions of the 2024 Bonds including the role of U.S. Bank as Trustee, the principal payments along with the interest rates on the individual maturities, the redemption provisions of the 2024 Bonds, establishes the funds and accounts for the 2024 Bonds, establishes the City obligations for continuing disclosure reporting, arbitrage rebate and annual CDIAC reporting, and remedies for bondholders in an event of default.
(2) Installment Sale Agreement (Exhibit 4): An agreement between the Authority (seller) and the City (purchaser) whereby the City will purchase from the Authority the Water System improvements to be funded with the proceeds of the 2024 Bonds. In exchange, the City agrees to make installment payments to the Authority. The installment payments are equal to the debt service on the 2024 Bonds. (3) Official Statement (Exhibit 5): The Official Statement is the primary document used by the Underwriter to market the 2024 Bonds to investors. The official statement describes the 2024 Bonds in detail and all the information used by investors to make an informed purchase decision. The official statement in the preliminary form presented is deemed final pursuant to Rule 15c-2-12 under the Securities Exchange Act of 1934.

The Resolution permits staff to make updates as needed for a final version, which will primarily be to reflect actual interest rates when they are finally determined, and the final version will be made publicly available. The Continuing Disclosure Certificate, included as an attachment to the Official Statement, describes covenants of the City to provide required ongoing disclosure to investors in the form of an annual report due by the end of March each year and posted to the electronic platform known as the Electronic Municipal Market Access system (“EMMA”). In addition, the City covenants, when they occur, to provide notices of certain events as listed therein. (4) Bond Purchase Agreement (Exhibit 6): An agreement among the City, the Authority and the Underwriter, pursuant to which the Underwriter agrees to purchase Agenda Item #5.1.

the 2024 Bonds from the Authority, on the terms and conditions set forth therein. It provides certain conditions for closing that must be met prior to the closing/funding of the 2024 Bonds and will be executed on the date of pricing.

Estimated Costs of Issuance
The table below shows the estimated budget of the proposed costs of issuance for the 2024 Bonds:

Role Company Total
Bond Counsel Jones Hall $60,000.00
Bond Counsel Expenses
(NTE) Jones Hall 1,500.00
Disclosure Counsel Jones Hall 40,000.00
Municipal Advisor Del Rio Advisors, LLC 52,500.00
Municipal Advisor Expenses
(NTE) Del Rio Advisors, LLC 750.00
Rating Fee S&P 17,500.00
Trustee (Acceptance Fee) U.S. Bank 1,000.00
Trustee (Annual Fee) U.S. Bank 3,000.00
Trustee (Counsel Fee) U.S. Bank 3,000.00
Printing of Official Statement TBD 3,000.00
Rounding
Adjustment/Miscellaneous Misc. 9,019.76
Total Estimated Costs $191,269.76
In addition, Oppenheimer & Co. Inc., the Underwriter, will also be compensated through a proposed underwriter’s discount as their compensation for underwriting (purchasing) the 2024 Bonds. This amount will not exceed 1.00% of the principal amount of the 2024 Bonds or approximately $102,650 (currently estimated at $92,385 or 0.90% of the estimated principal amount of the 2024 Bonds).

Fiscal Impact
The following table shows the latest "good-faith estimate" as provided by the Underwriter for the 2024 Bonds, assuming current market conditions as of May 6, 2024:

Good-Faith Estimates
Principal Amount $10,265,000
Project Fund/Proceeds $10,500,000
Fixed Costs of Issuance $191,270
Underwriter's Discount $92,385
Bond Insurance/Surety Premiums $108,677
Agenda Item #5.1.

Total "Finance Charge" $392,332
Total Interest $11,117,022
Total Debt Service $21,382,022
"All-In" TIC 4.823651%
Final Maturity October 1, 2054 (FY 55)
In accordance with Government Code Section 5852.1, the foregoing information has been obtained and disclosed to the City Council and the Authority Board prior to the issuance of the 2024 Bonds. This information is based on good-faith estimates provided by the Underwriter and is subject to change.

ENVIRONMENTAL REVIEW: None.

GOAL:

Goal 1: Strengthen Financial Sustainability
Goal 2: Improve Infrastructure & Further Environmental Sustainability Goal 3: Pursue Water Security & Sustainable Management of Water Resources Goal 8: Implement Capital Improvement Plans (CIP) Projects Miscellaneous/Other DOCUMENTS ATTACHMENTS:

City Resolution Authorizing Bond Issuance
St Helena Financing Authority Resolution Authorizing Bond Issuance Exhibit 3 - Indenture of Trust
Exhibit 4 - Installment Sale Agreement
Exhibit 5 - Official Statement
Exhibit 6 - Bond Purchase Agreement
Exhibit 7 - 2024 Water Bond Presentation for May 28 2024 Agenda Item #5.1.

CITY OF ST. HELENA
RESOLUTION NO. 2024-____
Resolution Approving: (1) installment sale financing to provide financing of water system improvements, and (2) financing documents and related official actions

RECITALS
A. WHEREAS, the City of St. Helena (the “City”) owns and operates a system for the supply, treatment and distribution of water within the service area of the City (the “Water System”); and
B. WHEREAS, the City desires to finance various improvements to the Water System (the “Project”); and;
C. WHEREAS, the City of St. Helena (the “City”) and the California Statewide Communities Development Authority have entered into a Joint Exercise of Powers Agreement, dated as of December 14, 2021, establishing the St.

Helena Financing Authority (the “Authority”) for the purpose, among others, of having the Authority issue its bonds to finance the acquisition, construction and improvement of public capital improvements; and D. WHEREAS, for the purpose of raising funds necessary to finance the Project, the Authority proposes to issue revenue bonds under the provisions of Article 4 (commencing with Section 6584) of Chapter 5 of Division 7 of Title 1 of the Government Code of the State of California (the “Act”), designated as the St. Helena Financing Authority 2024 Water Revenue Bonds (the “Bonds”); and
E. WHEREAS, pursuant to an Installment Sale Agreement between the City and the Authority (the “Installment Sale Agreement”), the City will purchase the Project from the Authority, and the Authority will use the installment payments paid by the City pursuant to the Installment Sale Agreement to pay debt service on the Bonds; and
F. WHEREAS, there has been prepared a Preliminary Official Statement containing information to be used in connection with the sale of the Bonds; and
G. WHEREAS, pursuant to Government Code Section 5852.1, certain information relating to the proposed financing is set forth in the staff report Agenda Item #5.1.

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accompanying this Resolution, and such information is hereby disclosed and made public; and
H. WHEREAS, the City Council approves all of said transactions in furtherance of the public purposes of the City, and the City Council wishes at this time to authorize all proceedings and documents relating to the interim financing of the Project as described herein

RESOLUTION
The City Council of the City of St. Helena hereby resolves as follows:

Section 1. Approval of Financing Proposal. The City Council hereby approves the issuance of the Bonds by the Authority under the Act for the purpose of providing funds to finance the acquisition, construction and installation of the Project. The aggregate principal amount of the Bonds shall not exceed $12,000,000.

Section 2. Approval of Installment Sale Agreement. The City Council hereby approves the Installment Sale Agreement between the Authority and the City, under which the Authority agrees to provide financing for the Project and to sell the completed Project to the City in consideration of the payment by the City of semiannual installment payments which are sufficient to provide revenues with which to pay principal of and interest on the Bonds when due. The Installment Sale Agreement is hereby approved in substantially the form on file with the City Clerk together with any changes therein or additions thereto deemed advisable by the City Manager, Assistant City Manager or the Administrative Services Director (each, an “Authorized Officer”), and the execution thereof by an Authorized Officer shall be conclusive evidence of the approval of any such changes or additions. An Authorized Officer is hereby authorized and directed for and in the name and on behalf of the City to execute, and the City Clerk is hereby authorized and directed to attest to, if necessary, the final form of the Installment Sale Agreement.

Section 3. Sale of Bonds by the Authority. The City Council hereby approves the negotiated sale of the Bonds by the Authority to Oppenheimer & Co. Inc., as underwriter (the “Underwriter”). The Bonds shall be sold to the Underwriter under the Bond Purchase Agreement among the Authority, the City and the Underwriter, which is hereby approved in substantially the form on file with the City Clerk, together with any changes therein or additions thereto deemed advisable by an Authorized Officer, and the execution thereof by an Authorized Officer shall be conclusive evidence of the approval of any such changes or additions. An Authorized Officer is hereby authorized and directed for and in the name and on behalf of the City to accept an offer from the Underwriter to purchase the Bonds from the Authority and to execute the final form of the Bond Purchase Agreement in the name of the City.

Agenda Item #5.1.

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Section 4. Official Statement. The City Council hereby approves and deems final within the meaning of Rule 15c2-12 of the Securities Exchange Act of 1934, a preliminary Official Statement for the Bonds in the form on file with the City Clerk. An Authorized Officer is authorized, at the request of the Underwriter, to execute an appropriate certificate affirming the City Council’s determination that said preliminary Official Statement has been deemed final within the meaning of said Rule. The City Council approves the distribution of the preliminary Official Statement by the Underwriter to prospective investors, in substantially the form on file with the City Clerk, together with any changes therein or additions thereto deemed advisable by an Authorized Officer. An Authorized Officer is authorized and directed to approve any changes in or additions to a final form of an Official Statement for the Bonds, and the execution thereof by an Authorized Officer will be conclusive evidence of approval of any such changes and additions. The City Council authorizes the distribution of the final Official Statement by the Underwriter, which will include final pricing information related to the Bonds.

Section 5. Official Actions. Each Authorized Officer, any assistant or deputy thereof, the City Clerk, and the City Attorney are each authorized and directed in the name and on behalf of the City to make any and all assignments, certificates, requisitions, agreements, notices, consents, instruments of conveyance, warrants and other documents, including but not limited to a Continuing Disclosure Certificate in substantially the form attached to the Official Statement which is approved under Section 4, which they or any of them might deem necessary or appropriate in order to consummate any of the transactions contemplated by the agreements and documents approved under this Resolution. Whenever in this Resolution any officer of the City is authorized to execute or countersign any document or take any action, such execution, countersigning or action may be taken on behalf of any person serving in such role in an interim capacity or by any officer or person designated by such officer to act on his or her behalf.

Section 6. Effective Date. This Resolution shall take effect immediately upon its passage and adoption.
* * * * * * * * * *
Approved at a Regular Meeting of the St. Helena City Council on ____________, 2024, by the following vote:

Mayor Dohring: ______________
Vice Mayor Hall: ______________
Councilmember Chouteau: ______________
Councilmember Summers: ______________
Councilmember Kenealy: ______________
Agenda Item #5.1.

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APPROVED:
___________________
Paul Dohring, Mayor
ATTEST:
________________________
Cindy Tzafopoulos, City Clerk
Agenda Item #5.1.

ST. HELENA FINANCING AUTHORITY
RESOLUTION NO. 2021-____
Resolution Approving: (1) installment sale financing to provide financing of water system improvements, and (2) financing documents and related official actions

RECITALS
A. WHEREAS, the City of St. Helena (the “City”) and the California Statewide Communities Development Authority have entered into a Joint Exercise of Powers Agreement, dated as of December 14, 2021, establishing the St. Helena Financing Authority (the “Authority”) for the purpose, among others, of having the Authority issue its bonds to finance the acquisition, construction and improvement of public capital improvements; and
B. WHEREAS, for the purpose of raising funds necessary to finance certain improvements to the City’s water system (the “Project”), the Authority proposes to issue revenue bonds under the provisions of Article 4 (commencing with Section 6584) of Chapter 5 of Division 7 of Title 1 of the Government Code of the State of California (the “Act”), designated as the St. Helena Financing Authority 2024 Water Revenue Bonds (the “Bonds”); and
D. WHEREAS, pursuant to an Installment Sale Agreement between the City and the Authority (the “Installment Sale Agreement”), the City will purchase the Project from the Authority, and the Authority will use the installment payments made by the City to the Authority pursuant to the Installment Sale Agreement to pay debt service on the Bonds; and
E. WHEREAS, there has been prepared a Preliminary Official Statement containing information to be used in connection with the sale of the Bonds; and I. WHEREAS, pursuant to Government Code Section 5852.1, certain information relating to the proposed financing is set forth in the staff report accompanying this Resolution, and such information is hereby disclosed and made public; and J. WHEREAS, the governing board (the “Board”) of the Authority has duly considered such transactions and wishes at this time to approve the financing documents related to the Bonds and certain related actions.

Agenda Item #5.1.

2 RESOLUTION
The Board of Directors of the St. Helena Financing Authority hereby resolves as follows:

Section 1. Issuance of Bonds. The Board hereby authorizes the issuance of the Bonds under the Act for the purpose of providing funds to finance the acquisition, construction and installation of the Project. The aggregate principal amount of the Bonds shall not exceed $12,000,000.

Section 2. Approval of Related Financing Agreements. The Board hereby approves each of the following agreements relating to the issuance and sale of the Bonds, in substantially the respective forms on file with the Secretary, together with any changes therein or additions thereto deemed advisable by the Executive Director or the Treasurer (each, an “Authorized Officer”), and the execution thereof by an Authorized Officer shall be conclusive evidence of the approval of any such changes or additions.

An Authorized Officer is hereby authorized and directed for and in the name and on behalf of the Authority to execute, and the Secretary is hereby authorized and directed to attest to, if necessary, the final form of each of the following agreements:
• Indenture of Trust, between the Authority and U.S. Bank Trust Company, National Association, as trustee, setting forth the terms and provisions relating to the Bonds.
• Installment Sale Agreement, between the Authority and the City, under which the Authority agrees to provide financing for the Project and to sell the completed Project to the City in consideration of the payment by the City of semiannual installment payments which are sufficient to provide revenues with which to pay principal of, and interest on, the Bonds when due.

Section 3. Sale of Bonds. The Board hereby approves the sale of the Bonds by negotiation with Oppenheimer & Co. Inc., as underwriter (the “Underwriter”). The Bonds shall be sold to the Underwriter under the Bond Purchase Agreement among the Authority, the City and the Underwriter, which is hereby approved in substantially the form on file with the Secretary, together with any changes therein or additions thereto deemed advisable by an Authorized Officer, and the execution thereof by an Authorized Officer shall be conclusive evidence of the approval of any such changes or additions; provided, that the Underwriter’s discount shall not exceed 1.00%, and the true interest cost of the Bonds shall not exceed 5.50%. An Authorized Officer is hereby authorized and directed for and in the name and on behalf of the Authority to accept an offer from the Underwriter to purchase the Bonds from the Authority and to execute the final form of the Bond Purchase Agreement in the name of the Authority.

Section 4. Official Statement. The Board hereby approves and deems final within the meaning of Rule 15c2-12 of the Securities Exchange Act of 1934, a preliminary Official Statement for the Bonds in the form on file with the Secretary. An Agenda Item #5.1.

3 Authorized Officer is authorized, at the request of the Underwriter, to execute an appropriate certificate affirming the Authority’s determination that said preliminary Official Statement has been deemed final within the meaning of said Rule. The Board approves the distribution of the preliminary Official Statement by the Underwriter to prospective investors, in substantially the form on file with the Secretary together with any changes therein or additions thereto deemed advisable by an Authorized Officer.

An Authorized Officer is authorized and directed to approve any changes in or additions to a final form of an Official Statement for the Bonds, and the execution thereof by an Authorized Officer will be conclusive evidence of approval of any such changes and additions. The Board authorizes the distribution of the final Official Statement by the Underwriter, which will include final pricing information related to the Bonds.

Section 5. Official Actions. The Chair, Executive Director, Treasurer, Secretary and all other officers of the Authority are each authorized and directed in the name and on behalf of the Authority to make any and all assignments, certificates, requisitions, agreements, notices, consents, instruments of conveyance, warrants and other documents, which they or any of them might deem necessary or appropriate in order to consummate any of the transactions contemplated by the agreements and documents approved under this Resolution. Whenever in this Resolution any officer of the Authority is authorized to execute or countersign any document or take any action, such execution, countersigning or action may be taken on behalf of any person serving in such role in an interim capacity or by any officer or person designated by such officer to act on his or her behalf.

Section 6. Effective Date. This Resolution shall take effect immediately upon its passage and adoption.
* * * * * * * * * *
Approved at a Regular Meeting of the St. Helena Financing Authority Board of Directors on ____________, 2024, by the following vote:

President Dohring Ellsworth: ______________
Vice Mayor: Hall ______________
Boardmember Chouteau: ______________
Boardmember Summers: ______________
Boardmember Kenealy: ______________
APPROVED:
___________________
Paul Dohring, President
ATTEST:
___________________
Cindy Tzafopoulos, Secretary
Agenda Item #5.1.

INDENTURE OF TRUST
Dated as of July 1, 2024
between the
ST. HELENA FINANCING AUTHORITY
and
U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION,
as Trustee
Authorizing the Issuance of
$____________
St. Helena Financing Authority
2024 Water Revenue Bonds
EXHIBIT 3
Jones Hall Draft of May 14, 2024
Agenda Item #5.1.

-iTABLE OF CONTENTS

ARTICLE I
DEFINITIONS; RULES OF CONSTRUCTION
SECTION 1.01. Definitions ............................................................................................................. 3 SECTION 1.02. Authorization ...................................................................................................... 12 SECTION 1.03. Interpretation ...................................................................................................... 12

ARTICLE II
THE SERIES 2024 BONDS
SECTION 2.01. Authorization of Series 2024 Bonds ................................................................... 13 SECTION 2.02. Terms of the Series 2024 Bonds ........................................................................ 13 SECTION 2.03. Form and Execution of Series 2024 Bonds ........................................................ 14 SECTION 2.04. Transfer and Exchange of Bonds ....................................................................... 15 SECTION 2.05. Book-Entry System ............................................................................................. 15 SECTION 2.06. Bond Registration Books .................................................................................... 17 SECTION 2.07. Bonds Mutilated, Lost, Destroyed or Stolen ....................................................... 17

ARTICLE III
ISSUANCE OF SERIES 2024 BONDS; APPLICATION OF PROCEEDS
SECTION 3.01. Issuance of the Series 2024 Bonds .................................................................... 18 SECTION 3.02. Application of Proceeds of Sale of the Series 2024 Bonds ................................ 18 SECTION 3.03. Establishment and Application of Costs of Issuance Fund ................................. 18 SECTION 3.04. Project Fund ....................................................................................................... 18 SECTION 3.05. Validity of Series 2024 Bonds............................................................................. 19 SECTION 3.06. Additional Bonds................................................................................................. 19

ARTICLE IV

REDEMPTION OF BONDS
SECTION 4.01. Terms of Redemption ......................................................................................... 21 SECTION 4.02. Selection of Bonds for Redemption .................................................................... 22 SECTION 4.03. Notice of Redemption ......................................................................................... 22 SECTION 4.04. Execution of New Bonds Upon Partial Redemption of Bonds ............................ 23 SECTION 4.05. Effect of Redemption .......................................................................................... 23

ARTICLE V
REVENUES; FUNDS AND ACCOUNTS; PAYMENT OF

PRINCIPAL AND INTEREST
SECTION 5.01. Security for the Bonds; Bond Fund..................................................................... 24 SECTION 5.02. Allocation of Revenues ....................................................................................... 24 SECTION 5.03. Application of Interest Account ........................................................................... 25 SECTION 5.04. Application of Principal Account ......................................................................... 25 SECTION 5.05. Application of Redemption Fund ........................................................................ 25 SECTION 5.06. Investments ........................................................................................................ 25 SECTION 5.07. Valuation and Disposition of Investments ........................................................... 26 Agenda Item #5.1.

-iiARTICLE VI

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

ARTICLE VII

EVENTS OF DEFAULT AND REMEDIES
SECTION 7.01. Events of Default ................................................................................................ 31 SECTION 7.02. Acceleration; Other Remedies. ........................................................................... 31 SECTION 7.03. Application of Revenues and Other Funds After Default .................................... 32 SECTION 7.04. Trustee to Represent Bond Owners ................................................................... 32 SECTION 7.05. Limitation on Bond Owners’ Right to Sue ........................................................... 33 SECTION 7.06. Absolute Obligation of Agency ........................................................................... 33 SECTION 7.07. Termination of Proceedings................................................................................ 33 SECTION 7.08. Remedies Not Exclusive ..................................................................................... 33 SECTION 7.09. No Waiver of Default .......................................................................................... 34

ARTICLE VIII

THE TRUSTEE
SECTION 8.01. Appointment of Trustee ...................................................................................... 35 SECTION 8.02. Acceptance of Trusts; Removal and Resignation of Trustee .............................. 35 SECTION 8.03. Merger or Consolidation ..................................................................................... 36 SECTION 8.04. Liability of Trustee .............................................................................................. 36 SECTION 8.05. Right to Rely on Documents ............................................................................... 38 SECTION 8.06. Preservation and Inspection of Documents ........................................................ 39 SECTION 8.07. Compensation and Indemnification .................................................................... 39

ARTICLE IX

MODIFICATION OR AMENDMENT HEREOF
SECTION 9.01. Amendments Permitted ...................................................................................... 40 SECTION 9.02. Effect of Supplemental Indenture ....................................................................... 41 SECTION 9.03. Endorsement of Bonds; Preparation of New Bonds ........................................... 41 SECTION 9.04. Amendment of Particular Bonds ......................................................................... 41

ARTICLE X

DEFEASANCE
SECTION 10.01. Discharge of Indenture ..................................................................................... 42 SECTION 10.02. Unclaimed Funds.............................................................................................. 42

ARTICLE XI

MISCELLANEOUS
SECTION 11.01. Liability of Authority Limited to Revenues. ........................................................ 43 SECTION 11.02. Limitation of Rights to Parties and Bond Owners ............................................. 43 Agenda Item #5.1.

-iiiSECTION 11.03. Funds and Accounts ......................................................................................... 43 SECTION 11.04. Waiver of Notice; Requirement of Mailed Notice .............................................. 43 SECTION 11.05. Destruction of Bonds ........................................................................................ 43 SECTION 11.06. Severability of Invalid Provisions ...................................................................... 43 SECTION 11.07. Notices ............................................................................................................. 44 SECTION 11.08. Evidence of Rights of Bond Owners ................................................................. 44 SECTION 11.09. Disqualified Bonds ............................................................................................ 44 SECTION 11.10. Money Held for Particular Bonds ...................................................................... 45 SECTION 11.11. Waiver of Personal Liability .............................................................................. 45 SECTION 11.12. Successor Is Deemed Included in All References to Predecessor .................. 45 SECTION 11.13. Execution in Several Counterparts ................................................................... 45 SECTION 11.14. Payment on Non-Business Day ........................................................................ 45 SECTION 11.15. Governing Law ................................................................................................. 45 APPENDIX A FORM OF 2024 BOND

APPENDIX B FORM OF PROJECT FUND REQUISITION

APPENDIX C FORM OF COST OF ISSUANCE REQUISITION
[APPENDIX D RESERVE FUND INSURANCE PROVISIONS] [To come – if applicable] [APPENDIX E BOND INSURANCE PROVISIONS] [To come – if applicable] Agenda Item #5.1.

INDENTURE OF TRUST
This INDENTURE OF TRUST (this “Indenture”), dated as of July 1, 2024, is between the ST. HELENA FINANCING AUTHORITY, a joint exercise of powers authority organized and existing under the laws of the State of California (the “Authority”), and U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, a national banking association organized and existing under the laws of the United States of America, with a corporate trust office in San Francisco, California, being qualified to accept and administer the trusts hereby created (the “Trustee”).

BACKGROUND:

1. The City of St. Helena (the “City”) presently owns and operates a system for the supply, treatment and distribution of water within the service area of the City (as further defined herein, the “Water System”), and the City desires to finance various improvements to the Water System as described in Appendix B to the hereinafter defined Installment Sale Agreement (the “2024 Water Project”).

2. The Authority has been organized for the purpose of assisting the City in its public purposes, and to that end the Authority is authorized to assist the City in financing the costs of acquisition, construction and installation of the 2024 Water Project.

3. The Authority, at this time, is entering into the Installment Sale Agreement dated as of July 1, 2024 (the Installment Sale Agreement”) with the City in order to finance the 2024 Water Project.

4. For the purpose of obtaining funds to finance the 2024 Water Project, the Authority has authorized the issuance of its St. Helena Financing Authority 2024 Water Revenue Bonds (the “2024 Bonds”), in the aggregate principal amount of $____________ under this Indenture and under the provisions of Article 4 of Chapter 5, Division 7, Title 1 of the Government Code of the State of California, commencing with Section 6584 of said Code (the “Bond Law”).

5. The debt service on the 2024 Bonds will be payable from Installment Payments made under the Installment Sale Agreement.

6. Repayment of the Installment Payments by the City shall be secured by a pledge of the Net Revenues of the Water System, on a parity with the pledge in favor of the holders of Parity Debt (as defined herein).

7. In order to provide for the authentication and delivery of the Bonds (including the 2024 Bonds), to establish and declare the terms and conditions upon which the Bonds (including the 2024 Bonds) are to be issued and to secure the payment of the principal thereof, premium (if any) and interest thereon, the Authority has authorized the execution and delivery of this Indenture.

8. The Authority has found and determines, and hereby affirms, that all acts and proceedings required by law necessary to make the Bonds (including the 2024 Bonds), when executed by the Authority, authenticated and delivered by the Trustee and duly issued, the valid, binding and legal special obligations of the Authority, and to constitute this Indenture a valid and binding agreement for the uses and purposes herein set forth in accordance with its terms, have Agenda Item #5.1.

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been done and taken, and the execution and delivery of this Indenture have been in all respects duly authorized.

AGREEMENT:

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

Agenda Item #5.1.

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ARTICLE I
DEFINITIONS; RULES OF CONSTRUCTION
SECTION 1.01. Definitions. Unless the context clearly otherwise requires or unless otherwise defined herein, the capitalized terms set forth in this Indenture shall have the meanings assigned to them in this Section 1.01.
“Additional Bonds” means all bonds ranking on a parity with the 2024 Bonds originally issued hereunder, issued in accordance with Section 3.06. “Additional Payments” means the amounts payable by the City under Section 4.7 of the Installment Sale Agreement.
“Agreement” shall mean that certain Joint Exercise of Powers Agreement, dated as of December 14, 2021, by and between the City and the California Statewide Communities Development Authority, creating the Authority, together with any amendments thereof and supplements thereto.
“Authority” means the St. Helena Financing Authority, a joint exercise of powers authority duly organized and existing under the laws of the State of California and the Agreement. “Authorized Investments” means any of the following, but only to the extent that the same are acquired at Fair Market Value, which at the time of investment are legal investments under the laws of the State of California for the moneys proposed to be invested therein:
(a) Federal Securities;
(b) (i) obligations of any of the following federal agencies which obligations represent full faith and credit of the United States of America, including: Export-Import Bank, Farm Credit System Financial Assistance Corporation, Rural Economic Community Development Administration (formerly Farmers Home Administration), General Services Administration, U.S.

Maritime Administration, Small Business Administration, Government National Mortgage Association, U.S. Department of Housing & Urban Development, Federal Housing Administration and Federal Financing Bank. and (ii) direct obligations for any of the following federal agencies which obligations are not fully guaranteed by the full faith and credit of the United States of America: senior debt obligations rated “Aaa” by Moody’s and “AAA” by S&P issued by Fannie Mae or Federal Home Loan Mortgage Corporation (FHLMC); obligations of the Resolution Funding Corporation (REFCORP); senior debt obligations of the Federal Home Loan Bank System; and senior debt obligations of other Government Sponsored Agencies; (c) U.S. dollar denominated deposit accounts federal funds and banker’s acceptances with domestic commercial banks, which may include the Trustee, its parent holding company, if any, and their affiliates, which have a rating on their short term certificates of deposit on the date of purchase of “P-1” by Moody’s and “A-1” or “A-1+” by S&P or are collateralized by Federal Securities and maturing no more than 360 days after the date of purchase, provided that ratings on holding companies are not considered as the rating of the bank; (d) commercial paper which is rated at the time of purchase in the single highest classification, “P-1” by Moody’s or “A-1+” by S&P, and which matures not more than 270 calendar days after the date of purchase;
Agenda Item #5.1.

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(e) money market funds registered under the Federal Investment Company Act of 1940, whose shares are registered under the Federal Securities Act of 1933, and having a rating by S&P of at least AAAm-G, AAAm or AAm, which funds may include funds for which the Trustee, its affiliates, parent or subsidiaries provide investment advisory or other management services; (f) pre-refunded municipal obligations defined as follows: any bonds or other obligations of any state of the United States of America or of any agency, instrumentality or local governmental unit of any such state which are not callable at the option of the obligor prior to maturity or as to which irrevocable instructions have been given by the obligor to call on the date specified in the notice; and (i) which are rated, based upon an irrevocable escrow account or fund, in the highest rating category of Moody’s and S&P or any successors thereto; or (ii)(A) subject to the approval of S&P, which are fully secured as to principal and interest and prepayment premium, if any, by an escrow consisting only of Federal Securities, which escrow may be applied only to the payment of such principal of and interest and prepayment premium, if any, on such bonds or other obligations on the maturity date or dates thereof or the specified prepayment date or dates pursuant to such irrevocable instructions, as appropriate, and (B) which escrow is sufficient, as verified by a nationally recognized independent certified public accountant, to pay principal of and interest and prepayment premium, if any, on the bonds or other obligations described in this paragraph on the maturity date or dates thereof or on the prepayment date or dates specified in the irrevocable instructions referred to above, as appropriate; (g) obligations the interest on which is excludable from gross income pursuant to Section 103 of the Tax Code and which are either (a) rated A or better by S&P, or (b) fully secured as to the payment of principal and interest by Authorized Investments described in clauses (a) or (b);
(h) obligations issued by any corporation organized and operating within the United States of America having assets in excess of $500,000,000, which obligations are rated A or better by S&P;
(i) bonds or notes issued by any state or municipality which are rated A or better by S&P;
(j) any investment agreement with, or guaranteed by, a financial institution the longterm unsecured obligations or the claims paying ability of which are rated A or better by S&P at the time of initial investment, by the terms of which all amounts invested thereunder are required to be withdrawn and paid to the Trustee in the event either of such ratings at any time falls below A;
(k) shares in a California common law trust established pursuant to Title 1, Division 7, Chapter 5 of the California Government Code which invests exclusively in investments permitted by Section 53635 of Title 5, Division 2, Chapter 4 of the Government Code of the State of California, provided the Trustee has access to, and control over withdrawals from and deposits to, such trust; and
(l) the Local Agency Investment Fund of the State of California, created pursuant to Section 16429.1 of the California Government Code, to the extent the Trustee is authorized to register such investment in its name.

Agenda Item #5.1.

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“Authorized Official” means: (a) with respect to the Authority, its Executive Director, Treasurer or any other person designated as an Authorized Official of the Authority by a Written Certificate of the Authority signed by its Executive Director or Treasurer and filed with the City and the Trustee; and (b) with respect to the City, its City Manager, Assistant City Manager, Administrative Services Director, or any other person designated as an Authorized Official of the City by a Written Certificate of the City signed by its City Manager or Administrative Services Director and filed with the Authority and the Trustee.
“Bond Counsel” means (a) Jones Hall, A Professional Law Corporation, or (b) any other attorney or firm of attorneys appointed by or acceptable to the Authority of nationally-recognized experience in the issuance of obligations the interest on which is excludable from gross income for federal income tax purposes under the Tax Code.
“Bond Fund” means the fund by that name established and held by the Trustee under Section 5.01.
“Bond Law” means the provisions of Article 4 of Chapter 5, Division 7, Title 1 of the Government Code of the State of California, commencing with Section 6584 of said Code, as in effect on the Closing Date or as thereafter amended in accordance with its terms. “Bond Registration Books” means the records maintained by the Trustee under Section

2.06 for the registration and transfer of ownership of the Bonds. “Bond Year” means the twelve-month period beginning on October 2 in each year and ending on October 1 in the following year except that (i) the first Bond Year with respect to the 2024 Bonds shall begin on the Closing Date, and (ii) the last Bond Year with respect to the 2024 Bonds may end on a redemption date prior to maturity of the 2024 Bonds or the final maturity date of the 2024 Bonds.
“Bonds” means the Outstanding 2024 Bonds and any Outstanding Additional Bonds. “Business Day” means any day other than a Saturday, Sunday or a day on which the Trustee is authorized by law to remain closed.
“City” means the City of St. Helena, a municipal corporation duly organized and existing under the laws of the State of California.
“Closing Date” means, with respect to the 2024 Bonds, the date of delivery of the Bonds to the Original Purchaser of the 2024 Bonds.
“Continuing Disclosure Certificate” means, with respect to each series of Bonds, that certain Continuing Disclosure Certificate executed by the City and dated the date of original execution and delivery of such Bonds, as originally executed and as it may be amended from time to time in accordance with the terms thereof.
“Costs of Issuance” means all expenses incurred in connection with the authorization, issuance, sale and delivery of any Bonds, including but not limited to compensation, fees and expenses of the City, Authority and the Trustee and their respective counsel, compensation to any financial consultants and underwriters, legal fees and expenses, municipal bond insurance or surety bond premiums, filing and recording costs, rating agency fees, costs of preparation and reproduction of documents and costs of printing.

Agenda Item #5.1.

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“Costs of Issuance Fund” means the fund by that name established and held by the Trustee under Section 3.03.
“Debt Service” means, during any period of computation, the amount obtained for such period by totaling the following amounts:
(a) The principal amount of all Outstanding Serial Bonds payable by their terms in such period;
(b) The principal amount of all Outstanding Term Bonds scheduled to be paid or redeemed by operation of mandatory Sinking Fund Installments in such period; and (c) The interest which would be due during such period on the aggregate principal amount of Bonds which would be Outstanding in such period if the Bonds are paid or redeemed as scheduled.

For purposes of this definition, all Variable Rate Bonds shall be deemed to bear interest as follows:
(i) Except as provided in (iii) below, Variable Rate Bonds the interest on which is excluded from gross income for purposes of federal income taxation, shall be assumed to bear interest at 100% of the most recently published Bond Buyer “Revenue Bond Index” (or comparable index if no longer published); and
(ii) Except as provided in (iii) below, Variable Rate Bonds the interest on which is not excluded from gross income for purposes of federal income taxation, shall be assumed to bear interest at the interest rate on direct U.S. Treasury obligations with comparable maturities, plus 50 basis points; and
(iii) Variable Rate Bonds for which an interest rate swap agreement is in place providing for a synthetic fixed interest rate to maturity or for a specific term, the interest rate on such Variable Rate Bonds shall be assumed to be the synthetic fixed interest rate specified in such interest rate swap agreement for such term. “Defeasance Obligations” means the Federal Securities listed in clause (a) of the definition thereof.
“Depository” means (a) initially, DTC, and (b) any other Securities Depositories acting as Depository under Section 2.05.
“Depository System Participant” means any participant in the Depository’s book-entry system.
“DTC” means The Depository Trust Company, and its successors and assigns. “Event of Default” means any of the events specified in Section 7.01. “Excess Investment Earnings” means an amount required to be rebated to the United States of America under Section 148(f) of the Tax Code due to investment of gross proceeds of the Bonds at a yield in excess of the yield on the Bonds.

Agenda Item #5.1.

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“Federal Securities” means, with respect to the Bonds: (a) any direct general obligations of the United States of America (including obligations issued or held in book entry form on the books of the Department of the Treasury of the United States of America), for which the full faith and credit of the United States of America are pledged; or (b) obligations of any agency, department or instrumentality of the United States of America, the timely payment of principal and interest on which are directly or indirectly secured or guaranteed by the full faith and credit of the United States of America; specifically:

U.S. treasury Obligations,
all direct or fully guaranteed obligations,
Farmers Home Administration,
General Services Administration,
Guaranteed Title IX financing,
Government National Mortgage Association (GNMA), and
State and Local Government Series.
“Fiscal Year” means any twelve-month period extending from July 1 in one calendar year to June 30 of the succeeding calendar year, both dates inclusive, or any other twelve-month period selected and designated by the Authority as its official fiscal year period. “Gross Revenues” means, for each Fiscal Year, all gross income and revenue received or receivable by the City from the ownership or operation of the Water System, determined in accordance with generally accepted accounting principles, including all rates, fees, and charges (including connection fees and charges) as received by the City for the services of the Water System, and all other income and revenue howsoever derived by the City from the ownership or operation of the Water System or arising from the Water System, including all income from the deposit or investment of any money in the Water Fund or any rate stabilization fund of the City or held on the City’s behalf, and any refundable deposits made to establish credit, and advances or contributions in aid of construction.
“Indenture” means this Indenture of Trust, as originally executed or as it may from time to time be supplemented, modified or amended by any Supplemental Indenture under the provisions hereof.
“Independent Certified Public Accountant” means any certified public accountant or firm of such accountants appointed and paid by the City, and who, or each of whom- (a) is in fact independent and not under domination of the City; (b) does not have any substantial identity of interest, direct or indirect, with the City; and
(c) is not and no member of which is connected with the City as an officer or employee of the City, but who may be regularly retained to make annual or other audits of the books of or reports to the City.
“Independent Consultant” means any financial or engineering consultant (including without limitation any Independent Certified Public Accountant) with an established reputation in the field of municipal finance or firm of such consultants appointed and paid by the City, and who, or each of whomAgenda Item #5.1.

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(a) is in fact independent and not under domination of the City; (b) does not have any substantial identity of interest, direct or indirect, with the City; and
(c) is not and no member of which is connected with the City as an officer or employee of the City, but who may be regularly retained to make annual or other audits of the books of or reports to the City.
“Information Services” means in accordance with then-current guidelines of the Securities and Exchange Commission, the Electronic Municipal Market Access System (referred to as “EMMA”), a facility of the Municipal Securities Rulemaking Board (at http://emma.msrb.org), or such service or services as the Authority may designate in a certificate delivered to the Trustee. “Installment Payment Date” means, with respect to any Interest Payment Date, the 3rd Business Day immediately preceding such Interest Payment Date. “Installment Payments” means all payments required to be paid by the City on any date under Section 4.4 of the Installment Sale Agreement, including any amounts payable upon delinquent installments and including any prepayment thereof under Section 7.2 or 7.3 of the Installment Sale Agreement, but does not include Additional Payments. “Installment Sale Agreement” means the Installment Sale Agreement dated as of July 1, 2024, between the City and the Authority, together with any duly authorized and executed amendments thereto.
“Interest Account” means the account by that name established and held by the Trustee in the Bond Fund under Section 5.02.
“Interest Payment Dates” means each April 1 and October 1, commencing October 1, 2024, so long as any Bonds remain unpaid, provided that Variable Rate Bonds shall have such Interest Payment Dates as are specified in the Supplemental Indenture pursuant to which such Variable Rate Bonds are issued.

“Maximum Annual Debt Service” means, as of the date of calculation, the maximum amount of Debt Service for the current or any future Fiscal Year. “Moody’s” means Moody’s Investors Service, a corporation duly organized and existing under and by virtue of the laws of the State of Delaware, and its successors or assigns, except that if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, then the term “Moody’s” shall be deemed to refer to any other nationally recognized securities rating agency selected by the Authority or the City. “Net Revenues” means, for any Fiscal Year or other period of computation, Gross Revenues for such period, less the Operations and Maintenance Costs attributable to such period. “Nominee” means (a) initially, Cede & Co. as nominee of DTC, and (b) any other nominee of the Depository designated under Section 2.04(a).

Agenda Item #5.1.

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“Operations and Maintenance Costs” means the reasonable and necessary costs paid or incurred by the City for maintaining and operating the Water System, determined in accordance with generally accepted accounting principles, including all reasonable expenses of management and repair and all other expenses necessary to maintain and preserve the Water System in good repair and working order, and including all reasonable and necessary administrative costs of the City that are charged directly or apportioned to the operation of the Water System, such as salaries and wages of employees, overhead, taxes (if any), the cost of permits, licenses, and charges to operate the Water System and insurance premiums; but excluding, in all cases depreciation, replacement, and obsolescence charges or reserves therefor, amortization of intangibles and other non-cash charges (for example, OPEB and pension accruals). “Original Purchaser” means, in the case of the 2024 Bonds, ______________. “Outstanding”, when used as of any particular time with reference to Bonds, means, subject to the last paragraph of Section 10.01 of the Indenture, all Bonds theretofore, or thereupon being, authenticated and delivered by the Trustee under this Indenture except: (a) Bonds theretofore canceled by the Trustee or surrendered to the Trustee for cancellation; (b) Bonds with respect to which all liability of the Authority shall have been discharged in accordance with Section

10.02, including Bonds (or portions thereof) described in Section 11.09; and (c) Bonds for the transfer or exchange of or in lieu of or in substitution for which other Bonds shall have been authenticated and delivered by the Trustee under this Indenture. “Overdue Rate” means the highest rate of interest on any of the Outstanding Bonds. “Owner”, whenever used herein with respect to a Bond, means the person in whose name the ownership of such Bond is registered on the Bond Registration Books. “Parity Debt” means (a) the 2012 Installment Purchase Agreement and (b) the 2019 Loan Agreement, and (c) any other bonds, notes, leases, installment sale agreements or other obligations of the City payable from and secured by a pledge of and lien upon any of the Net Revenues on a parity with the Installment Payments.
“Parity Debt Instrument” means (a) the 2012 Installment Purchase Agreement, (b) the 2019 Loan Agreement, and (c) and any other resolution, trust indenture, installment sale agreement or similar instrument adopted, entered into or executed and delivered by the City, under which Parity Debt is issued or incurred.
“Principal Account” means the account by that name established and held by the Trustee in the Bond Fund under Section 5.02.
“Principal Corporate Trust Office” means such corporate trust office of the Trustee as may be designated from time to time by written notice from the Trustee to the City. Except that with respect to presentation of Bonds for payment or for registration of transfer and exchange such term shall mean the corporate trust office of U.S. Bank Trust Company, National Association, in St. Paul, Minnesota or such other office or agency of the Trustee at which at any particular time, its corporate trust agency or operations shall be conducted. “Project Costs” means, with respect to the 2024 Water Project, all costs of the acquisition, construction and installation thereof which are paid from moneys on deposit in the Project Fund, including but not limited to:

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(a) all costs required to be paid to any person under the terms of any agreement for or relating to the acquisition, construction and installation of the 2024 Water Project;
(b) obligations incurred for labor and materials in connection with the acquisition, construction and installation of the 2024 Water Project; (c) the cost of performance or other bonds and any and all types of insurance that may be necessary or appropriate to have in effect in connection with the acquisition, construction and installation of the 2024 Water Project; (d) all costs of engineering and architectural services, including the actual out-of-pocket costs for test borings, surveys, estimates, plans and specifications and preliminary investigations therefor, development fees, sales commissions, and for supervising construction, as well as for the performance of all other duties required by or consequent to the proper acquisition, construction and installation of the 2024 Water Project;
(e) any sums required to reimburse the City for advances made for any of the above items or for any other costs incurred and for work done which are properly chargeable to the acquisition, construction and installation of the 2024 Water Project;
(f) all financing costs incurred in connection with the acquisition, construction and installation of the 2024 Water Project; and (g) the interest components of the Installment Payments allocable to the 2024 Water Project, which come due during the period of acquisition, construction and installation of the 2024 Water Project. “Project Fund” means the fund by that name established and held by the Trustee under Section 3.04.
“Rate Stabilization Fund” means the fund by that name established and held by the City under Section 5.12 of the Installment Sale Agreement.
“Record Date” means, with respect to any Interest Payment Date, the 15th calendar day of the month preceding such Interest Payment Date, whether or not such day is a Business Day. “Redemption Fund” means the fund by that name established and held by the Trustee under Section 5.05.
“Revenues” means: (a) all amounts received by the Authority or the Trustee pursuant or with respect to the Installment Sale Agreement, including, without limiting the generality of the foregoing, all of the Installment Payments (including both timely and delinquent payments, any late charges, and whether paid from any source, but excluding any Additional Payments), prepayments, insurance proceeds, condemnation proceeds, and (b) all interest, profits or other income derived from the investment of amounts in any fund or account established pursuant to this Indenture.

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“Securities Depositories” means DTC; and, in accordance with then current guidelines of the Securities and Exchange Commission, such other addresses and/or such other securities depositories as the Authority designates in written notice filed with the Trustee. “Serial Bonds” means all Bonds other than Term Bonds.
“S&P” means S&P Global Ratings, a division of Standard & Poor’s Financial Services LLC, and its successors or assigns, except that if such entity shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, then the term “S&P” shall be deemed to refer to any other nationally recognized securities rating agency selected by the City. “Supplemental Indenture” means any indenture hereafter duly authorized and entered into between the Authority and the Trustee, supplementing, modifying or amending this Indenture; but only if and to the extent that such Supplemental Indenture is specifically authorized hereunder. “Tax Code” means the Internal Revenue Code of 1986 as in effect on the Closing Date or (except as otherwise referenced herein) as it may be amended to apply to obligations issued on the Closing Date, together with applicable proposed, temporary and final regulations promulgated, and applicable official public guidance published, under said Code. “Term” means, when used with respect to the Installment Sale Agreement, the time during which the Installment Sale Agreement is in effect, as provided in Section 4.2 thereof. “Term Bonds” means the 2024 Bonds maturing October 1, 20___ and October 1, 20___, and any Additional Bonds identified as such in the applicable Supplemental Indenture. “Trustee” means U.S. Bank Trust Company, National Association, a national banking association organized and existing under the laws of the United States of America, or its successor or successors, as Trustee hereunder as provided in Article VIII. “2012 Installment Purchase Agreement” means the Installment Sale Agreement, dated June 1, 2012, between the City and the California Statewide Communities Development Authority, together with any amendments thereof and supplements thereto. “2019 Loan Agreement” means the Loan Agreement, dated March 14, 2019, between the City and JPMorgan Chase Bank, N.A., together with any amendments thereof and supplements thereto.
“2024 Bonds” means the St. Helena Financing Authority 2024 Water Revenue Bonds in the original principal amount of $____________.
“2024 Water Project” means the facilities, improvements and other property described more fully in Appendix B attached to the Installment Sale Agreement, as that Appendix may be amended from time to time in accordance with the Installment Sale Agreement. “Variable Rate Bonds” means bonds that bear interest at a rate which may change from time to time.
“Water Fund” means the fund or funds established and held by the City into which Gross Revenues are deposited in accordance with Section 4.5 of the Installment Sale Agreement.

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“Water System” means the entire system of the City for the treatment, production, storage and distribution of potable water and recycled water within the service area of the City, including but not limited to all facilities, properties, lands, rights, entitlements and other property useful in connection therewith, together with all extensions thereof and improvements thereto at any time acquired, constructed or installed by the City and determined to be part of the Water System by the City.
“Written Certificate,” “Written Request” and “Written Requisition” of the Authority or the City mean, respectively, a written certificate, request or requisition signed in the name of the Authority or the City by its Authorized Official. Any such instrument and supporting opinions or representations, if any, may, but need not, be combined in a single instrument with any other instrument, opinion or representation, and the two or more so combined shall be read and construed as a single instrument.

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

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

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ARTICLE II
THE 2024 BONDS
SECTION 2.01. Authorization of 2024 Bonds. The Authority has reviewed all proceedings heretofore taken and has found, as a result of such review, and hereby finds and determines that all things, conditions and acts required by law to exist, happen or be performed precedent to and in connection with the issuance of the 2024 Bonds do exist, have happened and have been performed in due time, form and manner as required by law, and the Authority is now duly empowered, under each and every requirement of law, to issue the 2024 Bonds in the manner and form provided in this Indenture.

The Authority hereby authorizes the issuance of the 2024 Bonds in the aggregate principal amount of $____________ under the Bond Law for the purposes of providing funds to enable the City to finance the 2024 Water Project. The Bonds are authorized and issued under, and are subject to the terms of, this Indenture and the Bond Law. The Bonds are designated the “St.

Helena Financing Authority 2024 Water Revenue Bonds.”
SECTION 2.02. Terms of the 2024 Bonds.
(a) Payment Provisions. The 2024 Bonds shall be issued in fully registered form without coupons in denominations of $5,000 or any integral multiple thereof. The 2024 Bonds shall mature on October 1 in each of the years and in the amounts, and bear interest (calculated on the basis of a 360-day year of twelve 30-day months) at the rates, as follows:

Maturity Principal Interest
(October 1) Amount Rate

Interest on the 2024 Bonds is payable from the Interest Payment Date next preceding the date of authentication thereof unless:

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(a) a 2024 Bond is authenticated on or before an Interest Payment Date and after the close of business on the preceding Record Date, in which event it will bear interest from such Interest Payment Date,
(b) a 2024 Bond is authenticated on or before the first Record Date, in which event interest thereon will be payable from the Closing Date, or (c) interest on any 2024 Bond is in default as of the date of authentication thereof, in which event interest thereon will be payable from the date to which interest has been paid in full, payable on each Interest Payment Date.

Interest is payable on each Interest Payment Date to the persons in whose names the ownership of the 2024 Bonds is registered on the Bond Registration Books at the close of business on the immediately preceding Record Date, except as provided below. Interest on any 2024 Bond which is not punctually paid or duly provided for on any Interest Payment Date is payable to the person in whose name the ownership of such 2024 Bond is registered on the Bond Registration Books at the close of business on a special record date for the payment of such defaulted interest to be fixed by the Trustee, notice of which is given to such Owner by first-class mail not less than 10 days prior to such special record date.

The Trustee will pay interest on the 2024 Bonds by check of the Trustee mailed by first class mail, postage prepaid, on each Interest Payment Date to the Owners of the 2024 Bonds at their respective addresses shown on the Bond Registration Books as of the close of business on the preceding Record Date. At the written request of the Owner of 2024 Bonds in an aggregate principal amount of at least $1,000,000, which written request is on file with the Trustee as of any Record Date, the Trustee will pay interest on such 2024 Bonds on each succeeding Interest Payment Date by wire transfer in immediately available funds to such account of a financial institution within the United States of America as specified in such written request, which written request will remain in effect until rescinded in writing by the Owner. The Trustee will pay principal of the 2024 Bonds in lawful money of the United States of America by check of the Trustee upon presentation and surrender thereof at the Principal Corporate Trust Office of the Trustee.

SECTION 2.03. Form and Execution of 2024 Bonds. The 2024 Bonds, the form of Trustee’s certificate of authentication, and the form of assignment to appear thereon, are set forth in Appendix A attached hereto and by this reference incorporated herein, with necessary or appropriate variations, omissions and insertions, as permitted or required by this Indenture.

The Chair, the Executive Director or the Treasurer of the Authority shall execute, and the Secretary of the Authority shall attest, each 2024 Bond. Either or both of such signatures may be made manually or may be affixed by facsimile thereof. If any officer whose signature appears on any 2024 Bond ceases to be such officer before the Closing Date, such signature will nevertheless be as effective as if the officer had remained in office until the Closing Date. Any 2024 Bond may be signed and attested on behalf of the Authority by such persons as at the actual date of the execution of such 2024 Bond are the proper officers of the Authority, duly authorized to execute debt instruments on behalf of the Authority, although on the date of such 2024 Bond any such person was not an officer of the Authority.

Only those 2024 Bonds bearing a certificate of authentication in the form set forth in Appendix A, manually executed and dated by the Trustee, are valid or obligatory for any purpose or entitled to the benefits of this Indenture, and such certificate of the Trustee is conclusive Agenda Item #5.1.

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evidence that such Bonds have been duly authenticated and delivered hereunder and are entitled to the benefits of this Indenture.

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

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

With respect to Bonds the ownership of which shall be registered in the name of the Nominee, the Authority and the Trustee has no responsibility or obligation to any Depository System Participant or to any person on behalf of which the Nominee holds an interest in the Bonds. Without limiting the generality of the immediately preceding sentence, the Authority and the Trustee has no responsibility or obligation with respect to (i) the accuracy of the records of the Depository, the Nominee or any Depository System Participant with respect to any ownership interest in the Bonds, (ii) the delivery to any Depository System Participant or any other person, other than a Bond Owner as shown in the Bond Registration Books, of any notice with respect to the Bonds, including any notice of redemption, (iii) the selection by the Depository of the beneficial interests in the Bonds to be redeemed if the Authority elects to redeem the Bonds in part, (iv) the payment to any Depository System Participant or any other person, other than a Bond Owner as shown in the Bond Registration Books, of any amount with respect to principal, premium, if any, or interest on the Bonds or (v) any consent given or other action taken by the Depository as Owner of the Bonds. The Authority and the Trustee may treat and consider the person in whose name Agenda Item #5.1.

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

If the Authority determines that it is in the best interests of the beneficial owners of the Bonds that they be able to obtain certificated Bonds, the Authority may notify the Depository System Participants of the availability of such certificated Bonds through the Depository. In such event, the Trustee will authenticate, transfer and exchange Bonds as required by the Depository and others in appropriate amounts; and whenever the Depository requests, the Trustee and the Authority shall cooperate with the Depository in taking appropriate action (y) to make available one or more separate certificates evidencing the Bonds to any Depository System Participant having Bonds credited to its account with the Depository, or (z) to arrange for another Securities Depository to maintain custody of a single certificate evidencing such Bonds, all at the Authority’s expense.

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(d) Payments to the Nominee. Notwithstanding any other provision of this Indenture to the contrary, so long as any Bond is registered in the name of the Nominee, all payments with respect to principal of and interest and premium, if any, on such Bond and all notices with respect to such Bond shall be made and given, respectively, as provided in the letter described in subsection (b) of this Section or as otherwise instructed by the Depository.

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

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

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

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ARTICLE III
ISSUANCE OF 2024 BONDS; APPLICATION OF PROCEEDS
SECTION 3.01. Issuance of the 2024 Bonds. At any time after the execution of this Indenture, the Authority may execute and the Trustee shall authenticate and, upon the Written Request of the Authority, deliver the 2024 Bonds to the Original Purchaser.

SECTION 3.02. Application of Proceeds of Sale of the 2024 Bonds. Upon the receipt of payment for the 2024 Bonds on the Closing Date, the Trustee shall receive the net proceeds of sale thereof, being $___________ (constituting the par amount of the 2024 Bonds, plus original issue premium in the amount of $__________, [less amounts transferred directly to the insurer for payment of the reserve policy and bond insurance premiums] and less an Original Purchaser’s discount of $___________), which the Trustee shall apply as follows:
(a) The Trustee shall deposit the amount of $__________ in the Costs of Issuance Fund.
(b) The Trustee shall deposit the amount of $___________, constituting the remainder of such proceeds, in the Project Fund.

The Trustee may establish and maintain a temporary account or fund to facilitate and record such deposits.

SECTION 3.03. Establishment and Application of Costs of Issuance Fund. The Trustee shall establish, maintain and hold in trust a separate fund designated as the “Costs of Issuance Fund” into which the Trustee shall deposit a portion of the proceeds of sale of the 2024 Bonds under Section 3.02(a). The Trustee shall disburse amounts in the Costs of Issuance Fund from time to time to pay the Costs of Issuance upon submission of a Written Requisition of the Authority, substantially in the form attached hereto as Appendix C, stating the person to whom payment is to be made, the amount to be paid, the purpose for which the obligation was incurred and that such payment is a proper charge against said fund. The Trustee may conclusively rely on such Written Requisitions and shall be fully protected in relying thereon. On September 15, 2024, or upon the earlier Written Request of the Authority, the Trustee shall transfer all amounts remaining in the Costs of Issuance Fund to the Project Fund, and shall thereupon close the Costs of Issuance Fund.

SECTION 3.04. Project Fund. The Trustee will establish and maintain a separate fund to be known as the “Project Fund” into which the Trustee shall deposit a portion of the proceeds of sale of the 2024 Bonds under Section 3.02(b). Except as otherwise provided herein, moneys in the Project Fund will be used solely for the payment of the Project Costs. The Trustee will disburse moneys in the Project Fund from time to time to pay Project Costs (or to reimburse the City for payment of Project Costs) in accordance with Written Requisitions, substantially in the form attached hereto as Appendix B, filed by the City with the Trustee. Each such Written Requisition must state, with respect to each payment to be made thereby, (i) the name and address of the person to whom payment is to be made, (ii) the amount and purpose of the payment and (iii) that each payment constitutes a Project Cost not previously paid from proceeds of the Bonds. Each Written Requisition must be accompanied by an invoice or statement evidencing each payment to be made thereunder. The Trustee has no responsibility for payments made in accordance with this Section. The City shall maintain accurate records showing all disbursements from the Project Fund.

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Upon the receipt by the Trustee of a Written Certificate of the City under Section 3.6 of the Installment Sale Agreement, stating that the 2024 Water Project has been completed, the Trustee shall withdraw from the Project Fund and deposit in the Interest Account all amounts remaining on deposit in the Project Fund, other than amounts estimated by the City (as identified in such Written Certificate) to be required to pay future Project Costs. Upon the filing with the Trustee of a Written Certificate of the City stating that no further amounts are intended to be requisitioned from the Project Fund, the Trustee shall thereupon close the Project Fund and transfer all remaining amounts therein to the Interest Account for payment of interest on the 2024 Bonds.

SECTION 3.05. Validity of 2024 Bonds. The recital contained in the 2024 Bonds that the same are issued under the Constitution and laws of the State of California shall be conclusive evidence of their validity and of compliance with the provisions of law in their issuance.

SECTION 3.06. Additional Bonds.
(A) In addition to the 2024 Bonds authorized to be issued under this Indenture, the Authority, may, by Supplemental Indenture, issue one or more series of Additional Bonds secured by Revenues on a parity with the 2024 Bonds, and may issue and deliver such Additional Bonds in such principal amount as shall be determined by the Authority, but only upon compliance by the Authority with the provisions of this Section, including the following specific conditions which are hereby made conditions precedent to the issuance of such Additional Bonds:
(a) The parties to this Indenture shall have executed a Supplemental Indenture which sets forth the terms and provisions of such Additional Bonds, including the establishment of such funds and accounts, which may be separate and apart from the funds and accounts established hereunder for the 2024 Bonds, as shall be necessary or appropriate;
(b) The scheduled principal and interest payable with respect to such Additional Bonds shall be payable only on Interest Payment Dates applicable to the 2024 Bonds, provide that the Interest Payment Dates with respect to Variable Rate Bonds shall be as provided in the applicable Supplemental Indenture; (c) The Installment Sale Agreement shall have been supplemented or amended, if necessary, to (i) increase or adjust the Installment Payments due and payable on each Installment Payment Date to an amount sufficient to pay the principal, premium (if any) and interest payable with respect to all Outstanding Bonds, including all Additional Bonds as and when, if any, the same mature or become due and payable (except to the extent such principal, premium and interest may be payable out of moneys then on deposit with the Trustee in accordance with this Indenture), (ii) if appropriate, identify the additions, betterments, extensions, improvements or replacements to the Water System, or such other real or personal property, to be financed, acquired or constructed or otherwise made subject to the Installment Sale Agreement, by the preparation, execution and delivery of such Additional Bonds, and (iii) make such other revisions to the Installment Sale Agreement as are necessitated by the issuance of such Additional Bonds (provided, however, that such other revisions shall not prejudice the rights of the Owners of Outstanding Bonds as granted them under the terms of this Indenture);
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(d) There shall have been delivered to the Trustee a counterpart of the amendments required by subsection (c) hereof; and
(e) The Trustee shall have received a Written Certificate of the Authority that the requirements of Section 5.8 of the Installment Sale Agreement have been satisfied.
(B) Upon delivery to the Trustee of the foregoing instruments, the Trustee shall authenticate Additional Bonds representing the aggregate principal amount specified in such Supplemental Indenture, and such Additional Bonds shall be equally and ratably secured with all Bonds, including any Additional Bonds, theretofore prepared, executed and delivered, all without preference, priority or distinction (other than with respect to maturity, payment, prepayment or sinking fund payment (if any)) of any one Bond, including Additional Bonds, over any other; provided, however, that no provision of this Indenture shall require the City to consent to or otherwise permit the preparation, execution and delivery of Additional Bonds, it being understood and agreed that any such consent or other action of the City to permit the preparation, execution and delivery of Additional Bonds, or lack thereof, shall be in the sole discretion of the City. (C) Whenever the Authority shall have determined to issue Additional Bonds pursuant to this Section 3.06, the Authority shall adopt a Supplemental Indenture determining that the issuance of such Additional Bonds is necessary for the purposes specified herein, specifying the principal amount of such Additional Bonds and prescribing the terms and conditions of such Additional Bonds and the funds to be established for the security and payment thereof. Before such Additional Bonds shall be issued and delivered, the Authority shall file with the Trustee a Written Certificate of the Authority certifying that the requirements set forth in Section 3.06 have been either met or provided for, together with a copy of the amendment to the Installment Sale Agreement required hereby. Additional Bonds may or may not be secured by a debt service reserve fund.
(D) Nothing contained in this Section 3.06 shall restrict the ability of the City to issue Parity Debt pursuant to the Installment Sale Agreement that do not secure Additional Bonds issued pursuant to this Section 3.06 or other Parity Debt in accordance with the terms and conditions thereof.

Agenda Item #5.1.

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ARTICLE IV

REDEMPTION OF BONDS
SECTION 4.01. Terms of Redemption.
(a) Optional Redemption from any Source of Available Funds. The 2024 Bonds maturing on or before October 1, 20___, are not subject to optional redemption prior to their respective stated maturity dates. The 2024 Bonds maturing on or after October 1, 20___, are subject to redemption in whole, or in part at the Written Request of the Authority among maturities on such basis as the Authority may designate and by lot within a maturity, at the option of the Authority, on any date on or after October 1, 20___, from any available source of funds, at a redemption price equal to the principal amount of the 2024 Bonds to be redeemed, plus accrued interest to the date of redemption, without premium.

The Authority must give the Trustee written notice of its intention to redeem Bonds under this subsection (a), and the manner of selecting such Bonds for redemption from among the maturities thereof, at least 45 days prior to the redemption date, to allow sufficient time to enable the Trustee to give notice of such redemption in accordance with Section 4.03. (b) Redemption From Proceeds of Insurance, Sale and Condemnation. The Bonds, including the 2024 Bonds, are subject to mandatory redemption, on any date, in whole, or in part on a pro rata basis among maturities, from the net proceeds of insurance, sale or condemnation credited towards the prepayment of the Installment Payments by the City under Section 7.3 of the Installment Sale Agreement. The Bonds, including the 2024 Bonds, are subject to redemption under this subsection at a redemption price equal to the principal amount represented thereby to be prepaid, without premium, together with accrued interest represented thereby to the redemption date.
(c) Mandatory Sinking Fund Redemption Relating to the 2024 Bonds. The Term Bonds shall also be subject to redemption, by lot, on October 1 in each of the years as set forth in the following table, from deposits made for such purpose pursuant to Section 5.02(b), at a redemption price equal to the principal amount thereof to be redeemed together with accrued interest thereon to the redemption date, without premium, or in lieu thereof may be purchased pursuant to the succeeding paragraph of this subsection (c), in the aggregate respective principal amounts and on the respective dates as set forth in the following table; provided, however, that if some but not all of the Term Bonds have been redeemed pursuant to subsections (a) or (b) above, the total amount of all future payments pursuant to this subsection (c) with respect to such Term Bonds shall be reduced by the aggregate principal amount of such Term Bonds so redeemed, to be allocated among such payments in integral multiples of $5,000 as determined by the Authority (written notice of which determination shall be given by the Authority to the Trustee).

Agenda Item #5.1.

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2024 Term Bonds Maturing October 1, 20___
Sinking Fund
Redemption Date
(October 1)
Principal
Amount To Be
Redeemed

2024 Term Bonds Maturing October 1, 20___
Sinking Fund
Redemption Date
(October 1)
Principal
Amount To Be
Redeemed

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

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

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

Agenda Item #5.1.

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

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

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

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

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

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

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

Agenda Item #5.1.

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

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

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

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

Agenda Item #5.1.

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

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

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

SECTION 5.05. Application of Redemption Fund. The Trustee shall establish and maintain the Redemption Fund, into which the Trustee shall deposit a portion of the Revenues received representing optional prepayments of the Installment Payments under Section 7.2 of the Installment Sale Agreement or mandatory prepayments of the Installment Payments under Section 7.3 of the Installment Sale Agreement, in accordance with a Written Request of the Authority. Amounts on deposit in the Redemption Fund shall be used and withdrawn by the Trustee solely for the purpose of paying the principal and premium (if any) of the Bonds to be redeemed under Sections 4.01(a) or (b); provided, however, that at any time prior to the selection of Bonds for redemption, the Trustee may apply such amounts to the purchase of Bonds at public or private sale, when and at such prices (including brokerage and other charges, but excluding accrued interest, which is payable from the Interest Account) as shall be directed under a Written Request of the Authority, except that the purchase price (exclusive of accrued interest) may not exceed the redemption price then applicable to the Bonds. All Bonds purchased under the provisions of this Section shall be canceled by the Trustee upon surrender thereof and destroyed in accordance with the retention policy of the Trustee then in effect. The Trustee shall be entitled to conclusively rely on any Written Request of the Authority received under this Section, and shall be fully protected in relying thereon.

SECTION 5.06. Investments. All moneys in any of the funds or accounts established with the Trustee under this Indenture shall be invested by the Trustee solely in Authorized Investments. Such investments shall be directed by the Authority under a Written Request of the Authority filed with the Trustee at least 2 Business Days in advance of the making of such investments. In the absence of any such directions from the Authority, the Trustee shall invest any such moneys in Authorized Investments described in clause (e) of the definition thereof.

Authorized Investments purchased as an investment of moneys in any fund shall be deemed to be part of such fund or account. To the extent Authorized Investments are registrable, such Authorized Investments must be registered in the name of the Trustee.

All interest or gain derived from the investment of amounts in any of the funds or accounts established hereunder shall be deposited in the Bond Fund, provided that interest earnings on amounts on deposit in the Project Fund shall be retained therein unless the Authority otherwise directs in writing. For purposes of acquiring any investments hereunder, the Trustee may Agenda Item #5.1.

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commingle funds held by it hereunder. The Trustee or any of its affiliates may act as principal or agent in the acquisition or disposition of any investment and may impose its customary charges therefor. The Trustee shall incur no liability for losses arising from any investments made under this Section.

The Trustee may make any investments hereunder through its own bond or investment department or trust investment department, or those of its parent or any affiliate. The Trustee or any of its affiliates may act as sponsor, advisor or manager in connection with any investments made by the Trustee hereunder. The Trustee is hereby authorized, in making or disposing of any investment permitted by this Section, to deal with itself (in its individual capacity) or with any one or more of its affiliates, whether it or such affiliate is acting as an agent of the Trustee or for any third person or is dealing as a principal for its own account.

The Authority acknowledges that to the extent regulations of the Comptroller of the Currency or other applicable regulatory entity grant the Authority the right to receive brokerage confirmations of security transactions as they occur, the Authority will not receive such confirmations to the extent permitted by law. The Trustee will furnish the Authority periodic cash transaction statements which include detail for all investment transactions made by the Trustee hereunder.

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

SECTION 5.07. Valuation and Disposition of Investments. (a) Except as otherwise provided in subsection (b) of this Section, the Authority covenants that all investments of amounts deposited in any fund or account created by or under this Indenture, or otherwise containing gross proceeds of the Bonds (within the meaning of Section 148 of the Tax Code) shall be acquired, disposed of and valued at the Fair Market Value thereof as such term is defined in subsection (d) below. The Trustee shall have no duty in connection with the determination of Fair Market Value other than to follow the investment directions of the Authority in any Written Request of the Authority. (b) Except as provided in the preceding subsection (a), for the purpose of determining the amount in any fund or account established hereunder, the value of Authorized Investments credited to such fund shall be valued by the Trustee at least annually on or before October 1. The Trustee may sell or present for redemption, any Authorized Investment so purchased by the Trustee whenever it shall be necessary in order to provide moneys to meet any required payment, transfer, withdrawal or disbursement from the fund to which such Authorized Investment is credited, and the Trustee shall not be liable or responsible for any loss resulting from any such Authorized Investment.
(d) For purposes of this Section, the term “Fair Market Value” means the price at which a willing buyer would purchase the investment from a willing seller in a bona fide, arm’s length transaction (determined as of the date the contract to purchase or sell the investment becomes binding) if the investment is traded on an established securities market (within the meaning of Section 1273 of the Tax Code) and, otherwise, the term “Fair Market Value” means the acquisition price in a bona fide arm’s length transaction (as referenced above) if (i) the investment is a certificate of deposit that is acquired in accordance with applicable regulations under the Tax Code, (ii) the investment is an agreement with specifically negotiated withdrawal or reinvestment provisions and a specifically negotiated interest rate (for example, a guaranteed investment Agenda Item #5.1.

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contract, a forward supply contract or other investment agreement) that is acquired in accordance with applicable regulations under the Tax Code, or (iii) the investment is a United States Treasury Security -- State and Local Government Series which is acquired in accordance with applicable regulations of the United States Bureau of Public Debt. (e) To the extent of any valuations made by the Trustee hereunder, the Trustee may utilize and rely upon computerized securities pricing services that may be available to it, including those available through its regular accounting system.

Agenda Item #5.1.

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ARTICLE VI

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

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

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

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

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

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

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

Agenda Item #5.1.

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SECTION 6.07. Tax Covenants.
(a) Private Business Use Limitation. The Authority shall assure that the proceeds of the 2024 Bonds are not used in a manner which would cause the 2024 Bonds to satisfy the private business tests of Section 141(b) of the Tax Code or the private loan financing test of Section 141(c) of the Tax Code.
(b) Federal Guarantee Prohibition. The Authority may not take any action or permit or suffer any action to be taken if the result of the same would be to cause the 2024 Bonds to be “federally guaranteed” within the meaning of Section 149(b) of the Tax Code. (c) No Arbitrage. The Authority may not take, or permit or suffer to be taken by the Trustee or otherwise, any action with respect to the proceeds of the 2024 Bonds or of any other obligations which, if such action had been reasonably expected to have been taken, or had been deliberately and intentionally taken, on the Closing Date, would have caused the 2024 Bonds to be “arbitrage bonds” within the meaning of Section 148(a) of the Tax Code. (d) Maintenance of Tax Exemption. The Authority shall take all actions necessary to assure the exclusion of interest on the 2024 Bonds from the gross income of the Owners of the 2024 Bonds to the same extent as such interest is permitted to be excluded from gross income under the Tax Code as in effect on the Closing Date.
(e) Rebate of Excess Investment Earnings to United States. The Authority shall calculate or cause to be calculated all amounts of excess investment earnings with respect to the 2024 Bonds which are required to be rebated to the United States of America under Section 148(f) of the Tax Code, at the times and in the manner required under the Tax Code. The Authority shall pay when due an amount equal to excess investment earnings to the United States of America in such amounts, at such times and in such manner as may be required under the Tax Code, such payments to be made from any source of legally available funds of the Authority. The Authority shall keep or cause to be kept, and retain or cause to be retained for a period of 6 years following the retirement of the 2024 Bonds, records of the determinations made under this subsection (e).

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

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

SECTION 6.10. Further Assurances. The Authority will make, execute and deliver any and all such further indentures, instruments and assurances as may be reasonably necessary or proper to carry out the intention or to facilitate the performance of this Indenture and for the better Agenda Item #5.1.

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assuring and confirming unto the Owners of the Bonds of the rights and benefits provided in this Indenture.

Agenda Item #5.1.

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ARTICLE VII

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

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

The foregoing provision, however, is subject to the condition that if, at any time after the principal of the Bonds shall have been so declared due and payable, the Authority shall pay to or shall deposit with the Trustee a sum sufficient to pay all principal of the Bonds maturing prior to such declaration and all matured installments of interest (if any) upon all the Bonds, and any and all other defaults known to the Trustee (other than in the payment of principal of and interest on the Bonds due and payable solely by reason of such declaration) shall have been made good or cured to the satisfaction of the Trustee, or provision deemed by the Trustee to be adequate shall have been made therefor, then, and in every such case, the Trustee, on behalf of the Owners of all of the Bonds, shall rescind and annul such declaration and its consequences; but no such rescission and annulment shall extend to or shall affect any subsequent default, or shall impair or exhaust any right or power consequent thereon; provided, however, that no such rescission and Agenda Item #5.1.

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

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

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

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

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

Agenda Item #5.1.

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

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

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

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

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

Agenda Item #5.1.

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

Agenda Item #5.1.

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ARTICLE VIII

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

SECTION 8.02. Acceptance of Trusts; Removal and Resignation of Trustee. The Trustee hereby accepts the express trusts imposed upon it by this Indenture, and agrees to perform said trusts, but only upon and subject to the following express terms and conditions:
(a) The Trustee shall, prior to an Event of Default, and after the curing or waiver of all Events of Default which may have occurred, perform such duties and only such duties as are expressly and specifically set forth in this Indenture and no implied duties or covenants shall be read into this Indenture against the Trustee.
(b) The Authority may remove the Trustee at any time, unless an Event of Default has occurred and is then continuing, and shall remove the Trustee (a) if at any time requested to do so by the Owners of a majority in aggregate principal amount of the Bonds then Outstanding (or their attorneys duly authorized in writing) or (b) if at any time the Trustee ceases to be eligible in accordance with Section 8.02, or becomes incapable of acting, or is adjudged a bankrupt or insolvent, or a receiver of the Trustee or its property is appointed, or any public officer takes control or charge of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation. (c) The Trustee may at any time resign by giving written notice of such resignation to the Authority and the City, and by giving the Bond Owners notice of such resignation by mail at the addresses shown on the Bond Registration Books. (d) Any removal or resignation of the Trustee and appointment of a successor Trustee shall become effective upon acceptance of appointment by the successor Trustee. If no successor Trustee has been appointed and accepted appointment within 45 days of giving notice of removal or notice of resignation as aforesaid, the Authority, upon its own direction or the direction of the resigning Trustee may petition any court of competent jurisdiction for the appointment of a successor Trustee, and such court may thereupon, after such notice (if any) as it may deem proper, appoint such successor Trustee. Any successor Trustee appointed under this Indenture, must signify its acceptance of such appointment by executing and delivering to the Authority and to its predecessor Trustee a written acceptance thereof, and after payment by the Authority of all unpaid fees and expenses of the predecessor Trustee, and thereupon such successor Trustee, without any further act, deed or conveyance, shall become vested with all the moneys, estates, properties, rights, powers, trusts, duties and obligations of such predecessor Trustee, with like effect as if originally named Trustee herein. At the Written Request of the Authority or the request of the successor Trustee, such predecessor Trustee shall pay over, transfer, assign and deliver to the successor Agenda Item #5.1.

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

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

SECTION 8.04. Liability of Trustee.
(a) The recitals of facts herein and in the Bonds contained shall be taken as statements of the Authority, and the Trustee shall not assume responsibility for the correctness of the same, or make any representations as to the validity or sufficiency of this Indenture, the Bonds or the Installment Sale Agreement, nor shall the Trustee incur any responsibility in respect thereof, other than as expressly stated herein in connection with the respective duties or obligations of Trustee herein or in the Bonds assigned to or imposed upon it. The Trustee shall, however, be responsible for its representations contained in its certificate of authentication on the Bonds. The Trustee shall not be liable in connection with the performance of its duties hereunder, except for its own negligence. The Trustee may become the Owner of Bonds with the same rights it would have if it were not Trustee, and, to the extent permitted by law, may act as depository for Agenda Item #5.1.

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

Agenda Item #5.1.

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(i) Whether or not therein expressly so provided, every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee is subject to the provisions of Section 8.02(a), this Section 8.04 and Section 8.05, and shall be applicable to the assignment of any rights to the Trustee hereunder. (j) The Trustee is not accountable to anyone for the subsequent use or application of any moneys which are released or withdrawn in accordance with the provisions hereof. (k) The Trustee makes no representation or warranty, expressed or implied as to the title, value, design, compliance with specifications or legal requirements, quality, durability, operation, condition, merchantability or fitness for any particular purpose for the use contemplated by the Authority or the City of the 2024 Water Project. In no event shall the Trustee be liable for incidental, indirect, special or consequential damages in connection with or arising from the Installment Sale Agreement or this Indenture for the existence, furnishing or use of the 2024 Water Project.
(l) The Trustee has no responsibility with respect to any information, statement, or recital in any official statement, offering memorandum or any other disclosure material prepared or distributed with respect to the Bonds.
(m) The Trustee shall not be considered in breach of or in default in its obligations hereunder or progress in respect thereto in the event of delay in the performance of such obligations due to unforeseeable causes beyond its control and without its fault or negligence, including, but not limited to, Acts of God or of the public enemy or terrorists, acts of a government, acts of the other party, fires, floods, epidemics, quarantine restrictions, strikes, freight embargoes, earthquakes, explosion, mob violence, riot, inability to procure or general sabotage or rationing of labor, equipment, facilities, sources or energy, material or supplies in the open market, litigation or arbitration involving a party or others relating to zoning or other governmental action or inaction pertaining to the project, malicious mischief, condemnation, and unusually severe weather or delays of suppliers or subcontractors due to such causes or any similar event and/or occurrences beyond the control of the Trustee.
(n) The Trustee agrees to accept and act upon facsimile transmission of written instructions and/or directions pursuant to this Indenture of Trust, provided, however, that: (a) subsequent to such facsimile transmission of written instructions and/or directions the Trustee shall forthwith receive the originally executed instructions and/or directions, (b) such originally executed instructions and/or directions shall be signed by a person as may be designated and authorized to sign for the party signing such instructions and/or directions, and (c) the Trustee shall have received a current incumbency certificate containing the specimen signature of such designated person.

SECTION 8.05. Right to Rely on Documents. The Trustee shall be protected and shall incur no liability in acting or refraining from acting in reliance upon any notice, resolution, request, consent, order, certificate, report, opinion, bonds, requisition, facsimile transmission, electronic mail or other paper or document believed by them to be genuine and to have been signed or presented by the proper party or parties. The Trustee is under no duty to make any investigation or inquiry as to any statements contained or matter referred to in any paper or document but may accept and conclusively rely upon the same as conclusive evidence of the truth and accuracy of any such statement or matter and shall be fully protected in relying thereon. The Trustee may consult with counsel, who may be counsel of or to the Authority, with regard to legal questions, Agenda Item #5.1.

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

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

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

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

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

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

Agenda Item #5.1.

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ARTICLE IX

MODIFICATION OR AMENDMENT HEREOF
SECTION 9.01. Amendments Permitted.
(a) Amendments With Bond Owner Consent. This Indenture and the rights and obligations of the Authority and of the Owners of the Bonds and of the Trustee may be modified or amended from time to time and at any time by Supplemental Indenture, which the Authority and the Trustee may enter into when the written consents of the Owners of a majority in aggregate principal amount of all Bonds then Outstanding are filed with the Trustee. No such modification or amendment may (i) extend the fixed maturity of any Bonds, or reduce the amount of principal thereof or extend the time of payment, or change the method of computing the rate of interest thereon, or extend the time of payment of interest thereon, without the consent of the Owner of each Bond so affected, or (ii) reduce the aforesaid percentage of Bonds the consent of the Owners of which is required to effect any such modification or amendment, or permit the creation of any lien on the Revenues and other assets pledged under this Indenture prior to or on a parity with the lien created by this Indenture except as permitted herein, or deprive the Owners of the Bonds of the lien created by this Indenture on such Revenues and other assets (except as expressly provided in this Indenture), without the consent of the Owners of all of the Bonds then Outstanding. It is not necessary for the consent of the Bond Owners to approve the particular form of any Supplemental Indenture, but it is sufficient if such consent approves the substance thereof.
(b) Amendments Without Owner Consent. This Indenture and the rights and obligations of the Authority, of the Trustee and the Owners of the Bonds may also be modified or amended from time to time and at any time by a Supplemental Indenture, which the Authority and the Trustee may enter into without the consent of any Bond Owners if the Trustee has been furnished an opinion of counsel that the provisions of such Supplemental Indenture shall not materially adversely affect the interests of the Owners of the Bonds, including, without limitation, for any one or more of the following purposes:
(i) to add to the covenants and agreements of the Authority in this Indenture contained, other covenants and agreements thereafter to be observed, to pledge or assign additional security for the Bonds (or any portion thereof), or to surrender any right or power herein reserved to or conferred upon the Authority; (ii) to cure any ambiguity, inconsistency or omission, or to cure or correct any defective provision, contained in this Indenture, or in regard to matters or questions arising under this Indenture, as the Authority deems necessary or desirable, provided that such modification or amendment does not materially adversely affect the interests of the Bond Owners;
(iii) to modify, amend or supplement this Indenture in such manner as to permit the qualification hereof under the Trust Indenture Act of 1939, as amended, or any similar federal statute hereafter in effect, and to add such other terms, conditions and provisions as may be permitted by said act or similar federal statute;
Agenda Item #5.1.

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

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

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

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

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

Agenda Item #5.1.

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ARTICLE X

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

Any funds thereafter held by the Trustee, which are not required for said purposes, shall be paid over to the Authority or the City.

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

Agenda Item #5.1.

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ARTICLE XI

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

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

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

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

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

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

Agenda Item #5.1.

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

SECTION 11.07. Notices. All notices or communications to be given under this Indenture shall be given by first class mail or personal delivery to the party entitled thereto at its address set forth below, or at such address as the party may provide to the other party in writing from time to time. Notice shall be effective either (a) upon transmission by facsimile transmission or other form of telecommunication, confirmed by telephone, (b) 48 hours after deposit in the United States mail, postage prepaid, or (c) in the case of personal delivery to any person, upon actual receipt.

The Authority, the City or the Trustee may, by written notice to the other parties, from time to time modify the address or number to which communications are to be given hereunder.

If to the City City of St. Helena
or the Authority: 1088 College Avenue
St. Helena, CA 94574
Attention: Administrative Services Director

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

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

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

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

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

SECTION 11.09. Disqualified Bonds. In determining whether the Owners of the requisite aggregate principal amount of Bonds have concurred in any demand, request, direction, consent or waiver under this Indenture, Bonds which are known by the Trustee to be owned or held by or for the account of the Authority or the City, or by any other obligor on the Bonds, or by any person Agenda Item #5.1.

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

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

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

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

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

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

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

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

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

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

Agenda Item #5.1.

[Signature Page to Indenture of Trust dated as of July 1, 2024] IN WITNESS WHEREOF, the ST. HELENA FINANCING AUTHORITY has caused this Indenture to be signed in its name by its Treasurer and attested to by its Secretary, and U.S.

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

ST. HELENA FINANCING AUTHORITY
By:

Mandy Kellogg
Treasurer
ATTEST:

By:

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

Authorized Officer
Agenda Item #5.1.

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APPENDIX A

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

UNITED STATES OF AMERICA

STATE OF CALIFORNIA

COUNTY OF ALAMEDA
ST. HELENA FINANCING AUTHORITY
2024 WATER REVENUE BONDS
INTEREST RATE: MATURITY DATE: ORIGINAL ISSUE DATE: CUSIP:
______% October 1, ____ July ___, 2024 ________
REGISTERED OWNER: CEDE & CO.

PRINCIPAL AMOUNT: *** ***
The ST. HELENA FINANCING AUTHORITY, a joint exercise of powers authority duly organized and existing under the laws of the State of California (the “Authority”), for value received, hereby promises to pay to the Registered Owner specified above or registered assigns (the “Registered Owner”), on the Maturity Date specified above (subject to any right of prior redemption hereinafter provided for), the Principal Amount specified above, in lawful money of the United States of America, and to pay interest thereon in like lawful money from the Interest Payment Date (as hereinafter defined) next preceding the date of authentication of this Bond unless (i) this Bond is authenticated on or before an Interest Payment Date and after the close of business on the 15th day of the month preceding such interest payment date, in which event it shall bear interest from such Interest Payment Date, or (ii) this Bond is authenticated on or before September 15, 2024, in which event it shall bear interest from the Original Issue Date specified above; provided, however, that if at the time of authentication of this Bond, interest is in default on this Bond, this Bond shall bear interest from the Interest Payment Date to which interest has previously been paid or made available for payment on this Bond, at the Interest Rate per annum specified above, payable semiannually on April 1 and October 1 in each year, commencing October 1, 2024 (the “Interest Payment Dates”), calculated on the basis of a 360-day year composed of twelve 30-day months.

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

Interest hereon is payable by check of the Trustee mailed to the Registered Owner hereof at the Registered Owner’s address as it appears on the registration books of the Trustee as of the close Agenda Item #5.1.

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of business on the fifteenth day of the month preceding each Interest Payment Date (a “Record Date”), or, upon written request filed with the Trustee as of such Record Date by a registered owner of at least $1,000,000 in aggregate principal amount of Bonds, by wire transfer in immediately available funds to an account in the United States designated by such registered owner in such written request.

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

This Bond is one of a duly authorized issue of bonds of the Authority designated as the “St. Helena Financing Authority 2024 Water Revenue Bonds” (the “Bonds”), in an aggregate principal amount of $____________, all of like tenor and date (except for such variation, if any, as may be required to designate varying numbers, maturities, interest rates or redemption provisions) and all issued pursuant to the provisions of Articles 4 of Chapter 5, Division 7, Title 1 of the California Government Code, commencing with Section 6584 of said Code, and under an Indenture of Trust dated as of July 1, 2024 (the “Indenture”), between the Authority and the Trustee, and a resolution of the Authority adopted on ____________, 2024, authorizing the issuance of the Bonds. Reference is hereby made to the Indenture (copies of which are on file at the office of the Authority) and all supplements thereto for a description of the terms on which the Bonds are issued, the provisions with regard to the nature and extent of the Revenues, and the rights thereunder of the owners of the Bonds and the rights, duties and immunities of the Trustee and the rights and obligations of the Authority thereunder, to all of the provisions of which the Registered Owner of this Bond, by acceptance hereof, assents and agrees.

The Bonds have been issued by the Authority to finance certain improvement to the City’s Water System. This Bond and the interest and premium, if any, hereon are special obligations of the Authority, payable from the Revenues, and secured by a charge and lien on the Revenues as defined in the Indenture, consisting principally of installment payments made by the City under an Installment Sale Agreement, dated as of July 1, 2024, between the Authority and the City (the “Installment Sale Agreement”), which installment payments are secured by the Net Revenues of the Water System. As and to the extent set forth in the Indenture, all of the Revenues are exclusively and irrevocably pledged in accordance with the terms hereof and the provisions of the Indenture, to the payment of the principal of and interest and premium (if any) on the Bonds and any Additional Bonds, which may be issued only in accordance with the terms of the Indenture.

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

The Bonds maturing on or before October 1, 20___, are not subject to optional redemption prior to their respective stated maturity dates. The Bonds maturing on or after October 1, 20___, are subject to redemption in whole, or in part at the Written Request of the Authority among maturities on such basis as the Authority may designate and by lot within a maturity, at the option of the Authority, on any Interest Payment Date on or after October 1, 20___, from any available source of funds, at a redemption price equal the principal amount of the Bonds to be redeemed, plus accrued interest to the date of redemption, without premium.

Agenda Item #5.1.

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The Bonds are also subject to redemption as a whole, or in part by lot, on any date, to the extent of any net proceeds of hazard or title insurance with respect to the Water System or any portion thereof which are not used to repair or replace the Water System pursuant to the Installment Sale Agreement, or to the extent of any net proceeds arising from the disposition of the Water System or any portion thereof in eminent domain proceedings which the City elects to be used for such purpose pursuant to the Installment Sale Agreement, at a redemption price equal to the principal amount thereof plus interest accrued thereon to the date fixed for redemption, without premium.

The Bonds maturing October 1, 20___ and October 1, 20___ (the “Term Bonds”) shall also be subject to redemption in whole, or in part by lot, on October 1 in each of the years as set forth in the following table, from deposits made for such purpose pursuant to the Indenture, at a redemption price equal to the principal amount thereof to be redeemed together with accrued interest thereon to the redemption date, without premium, or in lieu thereof shall be purchased pursuant to the Indenture, in the aggregate respective principal amounts and on the respective dates as set forth in the following table; provided, however, that if some but not all of the Term Bonds have been redeemed pursuant to the optional or mandatory redemption provisions described above, the total amount of all future payments with respect to such Term Bonds shall be reduced by the aggregate principal amount of such Term Bonds so redeemed, to be allocated among such payments on a pro rata basis in integral multiples of $5,000 as determined by the Authority (written notice of which determination shall be given by the Authority to the Trustee). 2024 Term Bonds Maturing October 1, 20___
Sinking Fund
Redemption Date
(October 1)
Principal
Amount To Be
Redeemed

2024 Term Bonds Maturing October 1, 20___
Sinking Fund
Redemption Date
(October 1)
Principal
Amount To Be
Redeemed

As provided in the Indenture, notice of redemption will be mailed by the Trustee by first class mail not less than 20 nor more than 60 days prior to the redemption date to the respective owners of any Bonds designated for redemption at their addresses appearing on the registration books of the Trustee, but neither failure to receive such notice nor any defect in the notice so Agenda Item #5.1.

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mailed shall affect the sufficiency of the proceedings for redemption or the cessation of accrual of interest thereon from and after the date fixed for redemption.

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

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

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

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

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

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

Agenda Item #5.1.

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

ST. HELENA FINANCING AUTHORITY
By:

Susan Hsieh
Treasurer
ATTEST:

By:

Jocelyn Kwong
Secretary

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

Dated:

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

Authorized Signatory

Agenda Item #5.1.

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

Dated:

Signature Guaranteed:

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

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

Agenda Item #5.1.

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APPENDIX B

FORM OF PROJECT FUND REQUISITION
WRITTEN REQUISITION NO.: _______
U.S. Bank Trust Company, National Association
One California Street, Suite 1000
San Francisco, California 94111
Attention: Global Corporate Trust
Re: $____________ St. Helena Financing Authority
2024 Water Revenue Bonds
Ladies and Gentlemen:

In accordance with the terms of that certain Indenture, dated as of ______ 1, 2024 (the “Indenture”), by and between you and the St. Helena Financing Authority, you are hereby authorized and requested to make immediate disbursement of funds held by you in the Project Fund for Project Costs (as defined in the Indenture) pursuant to Section 3.04 of the Indenture.

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

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

CITY OF ST. HELENA
By:

Authorized Official
Agenda Item #5.1.

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SCHEDULE A

PROJECT FUND DISBURSEMENTS
Payee Name and Address Description of Costs Amount

Agenda Item #5.1.

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APPENDIX C

FORM OF COST OF ISSUANCE REQUISITION
[Bond Caption]
REQUISITION NO. __ OF THE AUTHORITY FOR

DISBURSEMENT FROM THE COSTS OF ISSUANCE FUND
The undersigned hereby states and certifies that:
(i) I am the duly appointed, qualified and acting _________ of the St. Helena Financing Authority, a joint exercise of powers authority, duly organized and existing under and by virtue of the laws of the State of California (the “Authority”), and as such, I am familiar with the facts herein certified and am authorized to certify the same; (ii) I am an “Authorized Official” of the Authority, as such term is defined in that certain Indenture of Trust, dated as of ______ 1, 2024 (the “Indenture”), by and between the Authority and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”); (iii) pursuant to Section 3.03 of the Indenture, the Trustee is hereby requested to disburse this date, from the Costs of Issuance Fund established under the Indenture, upon receipt of an invoice from each of the payees designated on Exhibit A attached hereto and by this reference incorporated herein, the amount set forth in such invoice but no more than the amount set forth opposite each such payee, in payment of Costs of Issuance described on said Exhibit A, and all such payments shall be made by check or wire transfer in accordance with payment instructions contained in Exhibit A or the invoice submitted in accordance therewith and the Trustee shall have no duty or obligation to authenticate such payment instructions or the authorization thereof;
(iv) each obligation identified on the attached Exhibit A has been properly incurred, is a proper charge against the Costs of Issuance Fund and has not been the basis of any previous disbursement; and
(v) attached hereto is an invoice or other evidence supporting the amounts due as identified on Exhibit A.

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

Dated: _______, 2024 ST. HELENA FINANCING AUTHORITY
By:
________
______________________

Agenda Item #5.1.

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EXHIBIT A

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

Total:

Amount of Original Deposit:

Amount Remaining after Initial
Disbursements:

* Not to exceed amount; payment to be made only upon submission of an invoice.

Agenda Item #5.1.

Jones Hall Draft of May 14, 2024

INSTALLMENT SALE AGREEMENT
Dated as of July 1, 2024
between the
ST. HELENA FINANCING AUTHORITY,
as Seller
and the
CITY OF ST. HELENA,
as Purchaser
Relating to
$___________
St. Helena Financing Authority
2024 Water Revenue Bonds
EXHIBIT 4
Agenda Item #5.1.

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Page

ARTICLE I
DEFINITIONS ; RULES OF INTERPRETATION
SECTION 1.1. Definitions ............................................................................................................ 2 SECTION 1.2. Interpretation ........................................................................................................ 2

ARTICLE II

REPRESENTATIONS, COVENANTS AND WARRANTIES
SECTION 2.1. Representations, Covenants and Warranties of the City ..................................... 2 SECTION 2.2. Representations, Covenants and Warranties of Authority ................................... 3

ARTICLE III
ISSUANCE OF SERIES 2024 BONDS; CONSTRUCTION OF
2024 WATER PROJECT
SECTION 3.1. The 2024 Bonds. .................................................................................................. 5 SECTION 3.2. Deposit and Application of Funds. ....................................................................... 5 SECTION 3.3. Acquisition and Construction of the 2024 Water Project ...................................... 5 SECTION 3.4. Appointment of City as Agent .............................................................................. 5 SECTION 3.5. Plans and Specifications ...................................................................................... 6 SECTION 3.6. Certificate of Completion ...................................................................................... 6

ARTICLE IV

SALE OF PROJECT

INSTALLMENT PAYMENTS
SECTION 4.1. Sale of 2024 Water Project .................................................................................. 6 SECTION 4.2. Term ..................................................................................................................... 6 SECTION 4.3. Title ...................................................................................................................... 6 SECTION 4.4. Installment Payments ........................................................................................... 6 SECTION 4.5. Pledge and Application of Net Revenues ............................................................ 7 SECTION 4.6. Special Obligation of the City; Obligations Absolute ............................................ 8 SECTION 4.7. Additional Payments ............................................................................................ 9

ARTICLE V

COVENANTS OF THE CITY
SECTION 5.1. Disclaimer of Warranties; Maintenance, Utilities and Taxes. ............................... 9 SECTION 5.2. Release and Indemnification Covenants ........................................................... 10 SECTION 5.3. Sale or Eminent Domain of Water System ........................................................ 10 SECTION 5.4. Insurance ........................................................................................................... 10 SECTION 5.5. Records and Accounts ....................................................................................... 11 SECTION 5.6. Rates and Charges ............................................................................................ 11 SECTION 5.7. Superior and Subordinate Obligations ............................................................... 12 SECTION 5.8. Issuance of Parity Debt ...................................................................................... 12 SECTION 5.9. Operation of Water System in Efficient and Economical Manner ...................... 13 SECTION 5.10. Assignment and Amendment. .......................................................................... 13 SECTION 5.11. Continuing Disclosure. ..................................................................................... 14 SECTION 5.12. Rate Stabilization Fund. .................................................................................... 14 Agenda Item #5.1.

-iiARTICLE VI

EVENTS OF DEFAULT
SECTION 6.1. Events of Default Defined .................................................................................. 15 SECTION 6.2. Remedies on Default ......................................................................................... 15 SECTION 6.3. No Remedy Exclusive ........................................................................................ 16 SECTION 6.4. Agreement to Pay Attorneys’ Fees and Expenses ............................................ 16 SECTION 6.5. No Additional Waiver Implied by One Waiver .................................................... 16 SECTION 6.6. Trustee and Bond Owners to Exercise Rights ................................................... 16

ARTICLE VII

PREPAYMENT OF INSTALLMENT PAYMENTS
SECTION 7.1. Security Deposit ................................................................................................. 17 SECTION 7.2. Optional Prepayment Relating to the 2024 Bonds. ............................................ 17 SECTION 7.3. Mandatory Prepayment From Proceeds of Insurance, Sale or Condemnation ............................................................................................... 17 SECTION 7.4. Credit for Amounts on Deposit ........................................................................... 18

ARTICLE VIII

MISCELLANEOUS
SECTION 8.1. Further Assurances ............................................................................................ 19 SECTION 8.2. Notices ............................................................................................................... 19 SECTION 8.3. Governing Law ................................................................................................... 19 SECTION 8.4. Binding Effect ..................................................................................................... 19 SECTION 8.5. Severability of Invalid Provisions ....................................................................... 19 SECTION 8.6. Article and Section Headings and References .................................................. 19 SECTION 8.7. Payment on Non-Business Days ....................................................................... 20 SECTION 8.8. Execution of Counterparts ................................................................................. 20 SECTION 8.9. Waiver of Personal Liability ................................................................................ 20 SECTION 8.10. Trustee as Third Party Beneficiary ................................................................... 20 APPENDIX A Schedule of Installment Payments
APPENDIX B Description of 2024 Water Project
Agenda Item #5.1.

INSTALLMENT SALE AGREEMENT
This INSTALLMENT SALE AGREEMENT (this “Agreement”), dated as of July 1, 2024, is between the ST. HELENA FINANCING AUTHORITY, a joint exercise of powers authority duly organized and existing under the laws of the State of California (the “Authority”), as seller, and the CITY OF ST. HELENA, a municipal corporation duly organized and existing under the laws of the State of California (the “City”), as purchaser.

BACKGROUND:

1. The City presently owns, owns and operates a system for the supply, treatment and distribution of water within the service area of the City (the “Water System”), and the City desires to finance various improvements to the Water System as described in Appendix B hereto (the “2024 Water Project”).

2. The Authority has been organized for the purpose of assisting the City in its public purposes, and to that end the Authority is authorized to assist the City in financing the costs of acquisition, construction and installation of the 2024 Water Project.

3. In order to provide funds to finance the acquisition, construction and installation of the 2024 Water Project, the Authority has proposed to sell the 2024 Water Project to the City on an installment basis, and the City has proposed to purchase the 2024 Water Project from the Authority as provided in this Agreement.

4. The Authority will provide the necessary funds for the acquisition, construction and installation of the 2024 Water Project by issuing its St. Helena Financing Authority 2024 Water Revenue Bonds (the “2024 Bonds”), in the aggregate principal amount of $___________ under an Indenture of Trust dated as of July 1, 2024, by and between the Authority and U.S. Bank Trust Company, National Association, as trustee (the “Indenture”), and under the provisions of Article 4 of Chapter 5, Division 7, Title 1 of the Government Code of the State of California, commencing with Section 6584 of said Code (the “Bond Law”).

5. The debt service on the 2024 Bonds will be payable from Installment Payments made under this Agreement.

6. Repayment of the Installment Payments by the City shall be secured by a pledge of the Net Revenues of the Water System, on a parity with the pledge in favor of the holders of Parity Debt (as defined herein).

7. The Authority and the City have both duly authorized the execution and delivery of this Agreement.

AGREEMENT:

In consideration of the foregoing and the material covenants hereinafter contained, the City and the Authority formally covenant, agree and bind themselves as follows:

Agenda Item #5.1.

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ARTICLE I
DEFINITIONS; RULES OF INTERPRETATION
SECTION 1.1. Definitions. Unless the context clearly otherwise requires or unless otherwise defined herein, the capitalized terms in this Agreement have the respective meanings given them in Article I of the Indenture.

SECTION 1.2. Interpretation.
(a) Unless the context otherwise indicates, words expressed in the singular include the plural and vice versa and the use of the neuter, masculine, or feminine gender is for convenience only and 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 do not affect the meaning, construction or effect hereof.
(c) All references herein to “Articles,” “Sections” and other subdivisions are to the corresponding Articles, Sections or subdivisions of this Agreement; the words “herein,” “hereof,” “hereby,” “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular Article, Section or subdivision hereof.

ARTICLE II

REPRESENTATIONS, COVENANTS AND WARRANTIES
SECTION 2.1. Representations, Covenants and Warranties of the City. The City represents, covenants and warrants to the Authority and the Trustee as follows:
(a) Due Organization and Existence. The City is a municipal corporation duly organized and validly existing under the laws of the State of California, has full legal right, power and authority under said laws to enter into this Agreement and to carry out and consummate all transactions contemplated hereby and thereby, and by proper action the City Council has duly authorized the execution and delivery of this Agreement.
(b) Due Execution. The officers of the City executing this Agreement are fully authorized to execute the same.
(c) Valid, Binding and Enforceable Obligations. This Agreement has been duly authorized, executed and delivered by the City and constitutes the legal, valid and binding agreement of the City enforceable against the City in accordance with its terms; except as the enforceability thereof may be subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors’ rights heretofore or hereafter enacted and except as such enforceability may be subject to the exercise of judicial discretion in accordance with principles of equity.

Agenda Item #5.1.

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(d) No Conflicts. The execution and delivery of this Agreement, the consummation of the transactions herein contemplated and the fulfillment of or compliance with the terms and conditions hereof, do not and will not conflict with or constitute a violation or breach of or default (with due notice or the passage of time or both) under any applicable law or administrative rule or regulation, or any applicable court or administrative decree or order, or any indenture, mortgage, deed of trust, lease, contract or other agreement or instrument to which the City is a party or by which it or its properties are otherwise subject or bound, or result in the creation or imposition of any prohibited lien, charge or encumbrance of any nature whatsoever upon any of the property or assets of the City, which conflict, violation, breach, default, lien, charge or encumbrance would have consequences that would materially adversely affect the consummation of the transactions contemplated by this Agreement or the financial condition, assets, properties or operations of the City, including but not limited to the performance of the City’s obligations under this Agreement.
(e) Consents and Approvals. No consent or approval of any trustee or holder of any indebtedness of the City or of the voters of the City, and no consent, permission, authorization, order or license of, or filing or registration with, any governmental authority is necessary in connection with the execution and delivery of this Indenture, or the consummation of any transaction herein contemplated, except as have been obtained or made and as are in full force and effect. (f) No Litigation. There is no action, suit, proceeding, inquiry or investigation before or by any court or federal, state, municipal or other governmental authority pending or, to the knowledge of the City after reasonable investigation, threatened against or affecting the City or the assets, properties or operations of the City which, if determined adversely to the City or its interests, would have a material and adverse effect upon the consummation of the transactions contemplated by or the validity of this Indenture, or upon the financial condition, assets, properties or operations of the City, and the City is not in default with respect to any order or decree of any court or any order, regulation or demand of any federal, state, municipal or other governmental authority, which default might have consequences that would materially adversely affect the consummation of the transactions contemplated by this Indenture, or the financial conditions, assets, properties or operations of the City, including but not limited to the payment and performance of the City’s obligations under this Indenture. (g) Encumbrances. There are no easements, encumbrances or interests with respect to the Water System or the 2024 Water Project that prohibit or materially impair the execution, delivery and performance of this Installment Sale Agreement or the acquisition or use of the 2024 Water Project or the use of the Water System.

SECTION 2.2. Representations, Covenants and Warranties of Authority. The Authority represents, covenants and warrants to the City and the Trustee as follows:
(a) Due Organization and Existence. The Authority is a joint exercise of powers authority organized and existing under the laws of the State of California, and has power to enter into this Agreement and the Indenture and to perform the duties and obligations imposed on it hereunder and thereunder. The Board of the Agenda Item #5.1.

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Authority has duly authorized the execution and delivery of this Agreement and the Indenture.
(b) Due Execution. The representatives of the Authority executing this Agreement and the Indenture are fully authorized to execute the same. (c) Valid, Binding and Enforceable Obligations. This Agreement and the Indenture have been duly authorized, executed and delivered by the Authority and constitute the legal, valid and binding agreements of the Authority, enforceable against the Authority in accordance with their respective terms; except as the enforceability thereof may be subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors’ rights heretofore or hereafter enacted and except as such enforceability may be subject to the exercise of judicial discretion in accordance with principles of equity.
(d) No Conflicts. The execution and delivery hereof and of the Indenture, the consummation of the transactions herein and therein contemplated and the fulfillment of or compliance with the terms and conditions hereof and thereof, do not and will not conflict with or constitute a violation or breach of or default (with due notice or the passage of time or both) under any applicable law or administrative rule or regulation, or any applicable court or administrative decree or order, or any indenture, mortgage, deed of trust, lease, contract or other agreement or instrument to which the Authority is a party or by which it or its properties are otherwise subject or bound, or result in the creation or imposition of any prohibited lien, charge or encumbrance of any nature whatsoever upon any of the property or assets of the Authority, which conflict, violation, breach, default, lien, charge or encumbrance would have consequences that would materially adversely affect the consummation of the transactions contemplated hereby and by the Indenture or the financial condition, assets, properties or operations of the Authority, including but not limited to the performance of the Authority’s obligations under this Agreement and the Indenture.
(e) Consents and Approvals. No consent or approval of any trustee or holder of any indebtedness of the Authority, and no consent, permission, authorization, order or license of, or filing or registration with, any governmental authority is necessary in connection with the execution and delivery hereof or of the Indenture, or the consummation of any transaction herein or therein contemplated, except as have been obtained or made and as are in full force and effect.
(f) No Litigation. There is no action, suit, proceeding, inquiry or investigation before or by any court or federal, state, municipal or other governmental authority pending or, to the knowledge of the Authority after reasonable investigation, threatened against or affecting the Authority or the assets, properties or operations of the Authority which, if determined adversely to the Authority or its interests, would have a material and adverse effect upon the consummation of the transactions contemplated by or the validity of this Agreement or the Indenture, or upon the financial condition, assets, properties or operations of the Authority, and the Authority is not in default with respect to any order or decree of any court or any order, regulation or demand of any federal, state, municipal or other governmental authority, which default might have Agenda Item #5.1.

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consequences that would materially adversely affect the consummation of the transactions contemplated by this Agreement or the Indenture or the financial conditions, assets, properties or operations of the Authority, including but not limited to the performance of the Authority’s obligations hereunder and under the Indenture.
(g) Encumbrances. To the best knowledge of the Authority, there are no easements, encumbrances or interests with respect to the Water System or the 2024 Water Project that prohibit or materially impair the execution, delivery and performance of this Installment Sale Agreement or the acquisition or use of the 2024 Water Project or the use of the Water System.

ARTICLE III
ISSUANCE OF 2024 BONDS;
CONSTRUCTION OF 2024 WATER PROJECT
SECTION 3.1. The 2024 Bonds. The Authority shall cause the 2024 Bonds to be issued under the Indenture in the aggregate principal amount of $___________. The Trustee shall deposit the proceeds of sale of the 2024 Bonds received by it on the Closing Date in accordance with the Indenture. The City hereby approves the Indenture, the assignment thereunder to the Trustee of certain rights of the Authority, and the issuance of the 2024 Bonds.

SECTION 3.2. Deposit and Application of Funds. The proceeds received by the Trustee from the sale of the Bonds to the Original Purchaser shall be deposited in the respective funds and accounts, and in the respective amounts, as set forth in Section 3.02 of the Indenture.

SECTION 3.3. Acquisition and Construction of the 2024 Water Project. The Authority hereby agrees with due diligence to supervise and provide for, or cause to be supervised and provided for, the acquisition, construction and installation of the 2024 Water Project in accordance with the plans and specifications, purchase orders, construction contracts and other documents relating thereto and approved by the City under all applicable requirements of law. All contracts for, and all work relating to, the acquisition, construction and installation of the 2024 Water Project are subject to all applicable provisions of law relating to the acquisition and construction of public works by the City. The Authority expects that the 2024 Water Project will be completed on or before July 2027. The failure of the Authority to complete the 2024 Water Project by that date does not constitute an Event of Default hereunder or grounds for termination hereof, nor does any such failure result in the diminution, abatement or extinguishment of the obligations of the City hereunder to pay the Installment Payments when due hereunder.

SECTION 3.4. Appointment of City as Agent. The Authority hereby appoints the City as its agent to carry out all phases of the acquisition, construction and installation of the 2024 Water Project under and in accordance with the provisions hereof. The City hereby accepts such appointment and assumes all rights, liabilities, duties and responsibilities of the Authority regarding the acquisition, construction and installation of the 2024 Water Project. As agent of the Authority hereunder, the City shall enter into, administer and enforce all purchase orders or other contracts relating to the 2024 Water Project. Payment of Project Costs shall be made by the City from amounts held by the Trustee in the Project Fund in accordance with the provisions of this Agreement and the provisions of the Indenture.

Agenda Item #5.1.

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SECTION 3.5. Plans and Specifications. The City has the right to specify the exact scope, nature and identification of the 2024 Water Project and the respective components thereof.

Before any payment is made for the 2024 Water Project or any component thereof from amounts on deposit in the Project Fund, the City must prepare detailed plans and specifications relating thereto. The City may from time to time amend any such plans and specifications, and thereby change or modify the description of the 2024 Water Project or any component thereof.

SECTION 3.6. Certificate of Completion. Upon the completion of the 2024 Water Project, but in any event not later than 30 days following such completion, an Authorized Representative of the City shall execute and deliver to the Authority and the Trustee a Written Certificate of the City which (a) states that the construction of the 2024 Water Project has been substantially completed, (b) identifies the total Project Costs thereof, and (c) identifies the amounts, if any, to be reserved in the Project Fund for payment of future Project Costs.

ARTICLE IV
SALE OF PROJECTS;

INSTALLMENT PAYMENTS
SECTION 4.1. Sale of 2024 Water Project. The Authority hereby sells, bargains and conveys the 2024 Water Project to the City, and the City hereby purchases the 2024 Water Project from the Authority, upon the terms and conditions set forth in this Agreement.

SECTION 4.2. Term. The Term of this Agreement commences on the Closing Date, and ends on October 1, 20___, or such later or earlier date on which the Bonds cease to be Outstanding under and within the meaning of the Indenture.

SECTION 4.3. Title. Title to the 2024 Water Project, and each component thereof, shall be deemed conveyed by the Authority to and vested in the City upon the completion of the acquisition, construction and installation thereof. The Authority and the City will execute, deliver and cause to be recorded any and all documents reasonably required by the City to consummate the transfer of title to the Water System and the 2024 Water Project.

SECTION 4.4. Installment Payments.
(a) Obligation to Pay. The City hereby agrees to pay to the Authority, as the purchase price of the 2024 Water Project hereunder, the aggregate principal amount of $___________ together with interest (calculated on the basis of a 360-day year of twelve 30-day months) on the unpaid principal balance thereof, payable in semiannual installment payments in the respective amounts and on the respective Installment Payment Dates specified in Appendix A hereto.

The City shall deposit the Installment Payment coming due and payable on any Interest Payment Date with the Trustee, as assignee of the Authority under the Indenture, on the related Installment Payment Date (as set forth in Exhibit A hereto) in an amount which, together with amounts then held by the Trustee in the Bond Fund, is equal to the full amount of such Installment Payment. The Installment Payments are secured by and payable solely from the sources specified in Section 4.5.

Agenda Item #5.1.

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(b) Effect of Prepayment. If the City prepays all remaining Installment Payments in full under Section 7.2 or Section 7.3, or under the relevant provisions of any Supplemental Agreement, the City’s obligations under this Agreement shall thereupon cease and terminate, including but not limited to the City’s obligation to pay Installment Payments therefor under this Section 4.4; provided, however, that the City’s obligations to compensate and indemnify the Trustee under Sections 4.7 and 5.2 will survive such prepayment. If the City prepays the Installment Payments in part but not in whole under Section 7.2 or Section 7.3, or under the relevant provisions of any Supplemental Agreement, the principal component of each succeeding Installment Payment will be reduced as provided in such Sections or in such Supplemental Agreement, and the interest component of each remaining Installment Payment will be reduced by the aggregate corresponding amount of interest which would otherwise be payable with respect to the Bonds thereby redeemed under the applicable provisions of the Indenture. (c) Rate on Overdue Payments. If the City fails to make any of the payments required in this Section 4.4 and Section 4.7, the payment in default will continue as an obligation of the City until fully paid, and the City agrees to pay the same with interest thereon, from the date of default to the date of payment, at the Overdue Rate.
(d) Assignment. The City understands and agrees that certain rights of the Authority, including but not limited to the right of the Authority to receive payment of the Installment Payments, have been assigned by the Authority to the Trustee in trust under the Indenture, for the benefit of the Owners of the Bonds, and the City hereby consents to such assignment. The Authority hereby directs the City, and the City hereby agrees, to pay to the Trustee at its Principal Corporate Trust Office, all payments payable by the City under this Section 4.4 and all amounts payable by the City under Article VII.

SECTION 4.5. Pledge and Application of Net Revenues.
(a) Pledge of Net Revenues. All of the Net Revenues and all moneys on deposit in the Water Fund and the funds and accounts established and held by the Trustee under the Indenture (other than the Project Fund and Cost of Issuance Fund) are hereby irrevocably pledged, charged and assigned to the punctual payment of the Installment Payments. Such pledge, charge and assignment constitute a lien on the Net Revenues and such other moneys for the payment of the Installment Payments in accordance with the terms hereof, on a parity with the pledge and lien which secures any Parity Debt.
(b) Deposit of Net Revenues Into Water Fund; Transfers to Make Payments. The City will establish and hold in trust the Water Fund, for the purposes and uses set forth herein. The City shall deposit all of the Gross Revenues in the Water Fund immediately upon receipt. The City shall apply amounts in the Water Fund as set forth in this Agreement and any Parity Debt Instruments. Amounts on deposit in the Water Fund shall be applied by the City to pay when due the following amounts in the following order of priority:
(i) all Operations and Maintenance Costs (including amounts reasonably required to be set aside in contingency reserves for Operations and Maintenance Costs) as such Operations and Maintenance Costs become due and payable;
(ii) to the Trustee (or other recipient set forth in a Parity Debt Instrument) the amount needed to pay the Installment Payments and principal of, and interest on, any Parity Debt;
Agenda Item #5.1.

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(iii) to the Trustee (or other recipient set forth in a Parity Debt Instrument) the amount of any deficiency in any reserve fund established for any Bonds or Parity Debt, the notice of which deficiency has been given to the City in accordance with the Indenture and the related Parity Debt Instruments, on a pro rata basis; and
(iv) as long as all of the foregoing payments, allocations and transfers are made at the times and in the manner set forth above, any moneys remaining in the Water Fund may at any time be treated as surplus and applied for any lawful purpose.
(c) No Preference or Priority. Payment of the Installment Payments and the principal of and interest on any Parity Debt shall be made without preference or priority among the Installment Payments and such Parity Debt. If the amount of Net Revenues on deposit in the Water Fund is at any time insufficient to enable the City to pay when due the Installment Payments and the principal of and interest on any Parity Debt, such payments shall be made on a pro rata basis.

SECTION 4.6. Special Obligation of the City; Obligations Absolute. The City’s obligation to pay the Installment Payments and any other amounts coming due and payable hereunder is a special obligation of the City limited solely to the Net Revenues. Under no circumstances is the City required to advance moneys derived from any source of income other than the Net Revenues and other sources specifically identified herein for the payment of the Installment Payments and such other amounts. No other funds or property of the City are liable for the payment of the Installment Payments and any other amounts coming due and payable hereunder.

The obligations of the City to pay the Installment Payments from the Net Revenues and to perform and observe the other agreements contained herein are absolute and unconditional and are not subject to any defense or any right of set-off, counterclaim or recoupment arising out of any breach by the Authority or the Trustee of any obligation to the City or otherwise with respect to the Water System, whether hereunder or otherwise, or out of indebtedness or liability at any time owing to the City by the Authority or the Trustee. Until all of the Installment Payments, all of the Additional Payments and all other amounts coming due and payable hereunder are fully paid or prepaid, the City (a) will not suspend or discontinue payment of any Installment Payments, Additional Payments or such other amounts, (b) will perform and observe all other agreements contained in this Agreement, and (c) will not terminate this Agreement for any cause, including, without limiting the generality of the foregoing, the occurrence of any acts or circumstances that may constitute failure of consideration, eviction or constructive eviction, destruction of or damage to the Water System, failure to complete the acquisition and construction of the 2024 Water Project by the estimated completion date thereof, sale of the Water System, the taking by eminent domain of title to or temporary use of any component of the Water System, commercial frustration of purpose, any change in the tax law or other laws of the United States of America or the State of California or any political subdivision of either thereof, or any failure of the Authority or the Trustee to perform and observe any agreement, whether express or implied, or any duty, liability or obligation arising out of or connected with the Indenture or this Agreement.

The foregoing provisions of this Section 4.6 do not release the Authority from the performance of any of the agreements on its part contained herein or in the Indenture, and if the Authority fails to perform any such agreements, the City may institute such action against the Agenda Item #5.1.

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Authority as the City deems necessary to compel performance, so long as such action does not abrogate the obligations of the City contained in the preceding paragraph. The City may, however, at its cost and expense and in its name or in the name of the Authority, prosecute or defend any action or proceeding or take any other action involving third persons which the City deems reasonably necessary in order to secure or protect the City’s rights hereunder, and in such event the Authority shall cooperate fully with the City and shall take such action necessary to effect the substitution of the City for the Authority in such action or proceeding as the City may request.

SECTION 4.7. Additional Payments. In addition to the Installment Payments, the City shall pay when due the following amounts to the following parties:
(a) to the Authority, all costs and expenses incurred by the Authority to comply with the provisions of this Agreement and the Indenture; (b) to the Trustee upon request therefor, all of its fees, costs and expenses payable as a result of the performance of and compliance with its duties hereunder or under the Indenture or any related documents; (c) to the Authority and the Trustee, all amounts required to indemnify the Authority and the Trustee under Section 5.2 hereof and Section 8.07 of the Indenture; and
(d) all costs and expenses of auditors, engineers and accountants for professional services relating to the Water System or the Bonds.

The Additional Payments shall be payable from, but shall not be secured by a pledge or lien upon, the Net Revenues. The rights of the Trustee and the Authority under this Section 4.7, and the obligations of the City under this Section 4.7, shall survive the termination of this Agreement.

ARTICLE V

COVENANTS OF THE CITY
SECTION 5.1. Disclaimer of Warranties; Maintenance, Utilities and Taxes. (a) The Trustee makes no warranty or representation, either express or implied, as to the value, design, condition, merchantability or fitness for any particular purpose or fitness for the use contemplated by the City of the Project or any component thereof, or any other representation or warranty with respect to any of the Project or any component thereof. In no event is the Authority liable for incidental, indirect, special or consequential damages, in connection with or arising out of this Agreement or the Indenture for the existence, furnishing, functioning or use of the Project.
(b) Throughout the Term of this Agreement, all improvement, repair and maintenance of the Water System shall be the responsibility of the City, and the City shall pay for or otherwise arrange for the payment of all utility services supplied to the Water System, which may include, without limitation, janitor service, security, power, gas, telephone, light, heating, Water and all other Agenda Item #5.1.

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utility services, and shall pay for or otherwise arrange for the payment of the cost of the repair and replacement of the Water System resulting from ordinary wear and tear.

The City shall also pay or cause to be paid all taxes and assessments of any type or nature, if any, charged to the Authority or the City affecting the Water System or the respective interests or estates therein; provided, however, that with respect to special assessments or other governmental charges that may lawfully be paid in installments over a period of years, the City shall be obligated to pay only such installments as are required to be paid during the Term of this Agreement as and when the same become due.

SECTION 5.2. Release and Indemnification Covenants. The City agrees to indemnify the Authority and the Trustee and their respective officers, agents, successors and assigns, against all claims, losses and damages, including legal fees and expenses, arising out of (a) the use, maintenance, condition or management of, or from any work or thing done on or about the Water System by the City, (b) any breach or default on the part of the City in the performance of any of its obligations under this Agreement or the Indenture, (c) any act or omission of the City or of any of its agents, contractors, servants, employees or licensees with respect to the Water System, and (d) any act or omission of any lessee of the City with respect to the Water System.

No indemnification is made under this Section 5.2 or elsewhere in this Agreement for willful misconduct or negligence under this Agreement by the Authority, or the Trustee, or their respective officers, agents, employees, successors or assigns. The provisions of this Section 5.2 shall survive the expiration of the Term of this Agreement.

SECTION 5.3. Sale or Eminent Domain of Water System.
(a) The City will not sell, lease or otherwise dispose of the Water System or any part thereof essential to the proper operation of the Water System or to the maintenance of the Net Revenues except as herein expressly permitted. The City will not enter into any lease or agreement which impairs the operation of the Water System or any part thereof necessary to secure adequate Net Revenues for the payment of the interest on and principal or redemption price, if any, on the Bonds, or which would otherwise impair the rights of the holders of the Bonds with respect to the Net Revenues or the operation of the Water System. Any real or personal property which has become non-operative or which is not needed for the efficient and proper operation of the Water System, or any material or equipment which has worn out, may be sold at not less than the market value thereof without the consent of the holders of the Bonds if such sale will not reduce Net Revenues and if all of the Net Proceeds of such sale are deposited in the Water Fund.
(b) If all or any part of the Water System shall be taken by eminent domain proceedings, the Net Proceeds realized by the City therefrom shall be applied by the City (a) to the cost of acquiring or constructing or financing Improvements to the Water System, or (b) to redeem Bonds or any Parity Debt in accordance with the Indenture or the applicable Parity Debt Instruments.

SECTION 5.4. Insurance. The City covenants that it shall at all times maintain such insurance on the Water System as is customarily maintained with respect to works and properties of like character against accident to, loss of or damage to such works or properties.

Any such insurance shall be in the form of policies or contracts for insurance with insurers of good standing and shall be payable to the City, or may be in the form of self-insurance by the Agenda Item #5.1.

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City. The City shall establish such fund or funds or reserves as it determines, in its sole judgment, are necessary to provide for its share of any such self-insurance.

All amounts collected from insurance against accident to or destruction of any portion of the Water System shall be used to repair or rebuild such damaged or destroyed portion of the Water System, and to the extent not so applied, shall be applied to redeem Bonds or any Parity Debt in accordance with the Indenture or the applicable Parity Debt Instruments.

SECTION 5.5. Records and Accounts. The City covenants that it shall keep proper books of record and accounts of the Water System, separate from all other records and accounts, in which complete and correct entries shall be made of all transactions relating to the Water System. Said books shall, upon reasonable request, be subject to the inspection of the Owners of not less than 10% of the Outstanding Bonds or their representatives authorized in writing.

The City covenants that it will cause the books and accounts of the Water System to be audited annually by an Independent Certified Public Accountant and will make available for inspection by the Bond Owners, upon reasonable request, a copy of the report of such Independent Certified Public Accountant.

The City covenants that it will cause to be prepared annually, not more than 180 days after the close of each Fiscal Year, as a part of its regular annual financial report, a summary statement showing the amount of Gross Revenues and the amount of all other funds collected which are required to be pledged or otherwise made available as security for payment of principal of and interest on the Bonds, the disbursements from the Gross Revenues and other funds in reasonable detail. The City shall furnish a copy of the statement to the Trustee, and upon written request, to any Bond Owner.

SECTION 5.6. Rates and Charges.
(a) The City shall fix, prescribe, revise and collect rates and charges for the Water System during each Fiscal Year which are at least sufficient, after making allowances for contingencies and error in the estimates, to produce Gross Revenues which will be sufficient to pay the following amounts:
(i) all Operations and Maintenance Costs of the Water System estimated by the City to become due and payable in such Fiscal Year; (ii) the Installment Payments and debt service on any Parity Debt; (iii) all other payments required for compliance with this Agreement, the Indenture and the Parity Debt Instruments; and
(iv) all payments required to meet any other obligations of the City that are charges, liens, encumbrances upon or payable from the Gross Revenues of the Water System or the Net Revenues of the Water System.
(b) In addition, the City shall fix, prescribe, revise and collect charges for the Water System during each Fiscal Year which are sufficient to yield Net Revenues at least equal to 120% of the amounts payable under the preceding clause (a)(ii) in such Fiscal Year. For purposes of this paragraph, the amount of Net Revenues for a Fiscal Year will be computed on the basis that any transfers into the Water Fund in such Fiscal Year from the Rate Stabilization Fund are Agenda Item #5.1.

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included in the calculation of Net Revenues (except to the extent of amounts transferred into the Rate Stabilization Fund from Gross Revenues received by the City in such Fiscal Year, so as to avoid double-counting), as provided in this Agreement.

SECTION 5.7. Superior and Subordinate Obligations. The City may not issue or incur any additional bonds or other obligations during the Term of this Agreement having any priority in payment of principal or interest out of the Net Revenues over the Installment Payments. Nothing herein is intended or shall be construed to limit or affect the ability of the City to issue, enter into or incur (a) Parity Debt under Section 5.8, or (b) obligations which are either unsecured or which are secured by an interest in the Net Revenues which is junior and subordinate to the pledge of and lien upon the Net Revenues established hereunder.

SECTION 5.8. Issuance of Parity Debt. In addition to the Installment Payments, the City may, by a Parity Debt Instrument, issue or incur other loans, advances or indebtedness payable from Net Revenues to be derived from the Water System, to provide financing for the Water System, in such principal amount as shall be determined by the City. The City may issue or incur any such Parity Debt subject to the following specific conditions that are hereby made conditions precedent to the issuance and delivery of such Parity Debt:
(a) The City shall be in compliance with all covenants set forth in this Agreement and in the Indenture.
(b) The Net Revenues of the Water System, calculated on generally accepted accounting principles, as shown by the books of the City for the latest Fiscal Year or any more recent 12-month period selected by the City ending not more than 60 days prior to the adoption of the Parity Debt Instrument pursuant to which such Parity Debt are issued, as shown by the books of the City, plus, at the option of the City, any or all of the items hereinafter in this paragraph designated (i) and (ii), shall at least equal 120% of Maximum Annual Debt Service, with Maximum Annual Debt Service calculated on all bonds and other obligations to be outstanding immediately subsequent to the issuance of such Parity Debt which have a lien on Net Revenues of the Water System. The items any or all of which may be added to such Net Revenues for the purpose of issuing or incurring Parity Debt hereunder are the following:
(i) An allowance for Net Revenues from any additions to or improvements or extensions of the Water System to be made with the proceeds of such Parity Debt, and also for Net Revenues from any such additions, improvements or extensions which have been made from moneys from any source but in any case which, during all or any part of such Fiscal Year or such 12-month period, were not in service, all in an amount equal to 90% of the estimated additional average annual Net Revenues to be derived from such additions, improvements and extensions for the first 36-month period in which each addition, improvement or extension is respectively to be in operation, all as shown in the written report of an Independent Consultant engaged by the City; and (ii) An allowance for revenues projected to arise from any increase in the water rates and charges which has been approved by the City Council prior to the incurring of such additional indebtedness but which, during all or any part of such Fiscal Year or such 12-month period, was not in effect, in an amount equal to the amount by which the Net Revenues would have been increased if such increase in water rates and charges had been in effect during the whole of such Agenda Item #5.1.

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Fiscal Year or such 12-month period, all as shown in the written report of an Independent Consultant engaged by the City. For the avoidance of doubt, a charge shall be considered to have been approved by the City Council and may be considered in the calculation of the allowance described in the previous sentence if the water rate and charge is part of a multi-year rate increase that has been approved by the City Council, even if the specific water rate and charge will not take effect until a subsequent Fiscal Year.
(c) The Parity Debt Instrument providing for the issuance of such Parity Debt under this Section 5.8 shall:
(i) Provide that the proceeds of such Parity Debt shall be applied to the acquisition, construction, improvement, financing or refinancing of additional facilities, improvements or extensions of existing facilities within the Water System, or otherwise for facilities, improvements or property which the City determines are of benefit to the Water System, or for the purpose of refunding any Parity Debt in whole or in part, including all costs (including costs of issuing such Parity Debt and including capitalized interest on such Parity Debt during any period which the City deems necessary or advisable) relating thereto;
(ii) specify the date on which interest on such Parity Debt will be payable; and
(iii) specify the date on which principal on such Parity Debt will be payable.
(d) Notwithstanding the foregoing, Parity Debt proposed to be issued for the purpose of refunding any Parity Debt may be issued without compliance with subsection (b) and (c)(i), so long as such refunding results in lower Debt Service in each Fiscal Year after such refunding and the final maturity (or termination) date of the refunding Parity Debt is no later than the final maturity (or termination) date of the refunded Parity Debt.

For clarity, Parity Debt may or may not be secured by a debt service reserve fund.

SECTION 5.9. Maintenance and Operation of Water System in Efficient and Economical Manner. The City covenants and agrees to maintain and operate the Water System in an efficient and economical manner and to operate, maintain and preserve the Water System in good repair and working order.

SECTION 5.10. Assignment and Amendment. The Authority and the City may at any time amend or modify any of the provisions of this Agreement, but only: (a) with the prior written consents of the Owners of a majority in aggregate principal amount of the Outstanding Bonds; or (b) without the consent of the Trustee or any of the Bond Owners, but only if such amendment or modification is for any one or more of the following purposes:
(i) to add to the covenants and agreements of the City contained in this Agreement, other covenants and agreements thereafter to be observed, or to limit or surrender any rights or power herein reserved to or conferred upon the City; (ii) to make such provisions for the purpose of curing any ambiguity, or of curing, correcting or supplementing any defective provision contained herein, to conform to the original intention of the City and the Authority; Agenda Item #5.1.

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(iii) to modify, amend or supplement this Agreement in such manner as to assure that the interest on the Bonds remains excluded from gross income under the Tax Code (provided that this provision shall not apply to bonds the interest on which is intended to be included in gross income for purposes of federal income taxation);
(iv) in any other respect whatsoever as the Authority and the City deem necessary or desirable, if in the opinion of Bond Counsel such modifications or amendments do not materially adversely affect the interests of the Owners of the Bonds; and
(v) to provide for the issuance of Parity Debt pursuant to Section 5.8 hereof, including the addition of any provisions required with respect to Parity Debt relating to Variable Rate Bonds, and to Swap Agreements.

No such modification or amendment may extend or have the effect of extending any Installment Payment Date or reducing any Installment Payment or any premium payable upon the prepayment thereof, without the express consent of the Owners of the affected Bonds, or modify any of the rights or obligations of the Trustee without its written assent thereto.

SECTION 5.11. Continuing Disclosure. The City hereby covenants and agrees to comply with and carry out all of the provisions of each Continuing Disclosure Certificate, as originally executed as of the date of issuance and delivery of the Bonds, and as it may be amended from time to time in accordance with its terms. Notwithstanding any other provision of this Agreement, failure by the City to comply with the Continuing Disclosure Certificate shall not constitute a default hereunder or under the Indenture of Trust; provided, however, that any Participating Underwriter or any Owner or beneficial owner of the Bonds may take such action as may be necessary and appropriate to compel performance by the City of its obligations under this Section, including seeking mandamus or specific performance by court order. All capitalized terms used but not defined in this Section shall have the meanings given in the Continuing Disclosure Certificate.

SECTION 5.12. Rate Stabilization Fund. The City has previously established a rate stabilization fund for the Water System (the “Rate Stabilization Fund”). From time to time the City may deposit amounts in the Rate Stabilization Fund, from any source of legally available funds, including but not limited to Net Revenues that are released from the pledge and lien which secures the Installment Payments and any Parity Debt, as the City may determine.

The City may, but is not required to, withdraw from any amounts on deposit in a Rate Stabilization Fund and deposit such amounts in the Water Fund within 210 days following the end of any Fiscal Year. Amounts so transferred from a Rate Stabilization Fund to the Water Fund shall constitute Gross Revenues for the applicable Fiscal Year (except to the extent of amounts transferred into the Rate Stabilization Fund from Gross Revenues received by the City in such Fiscal Year, so as to avoid double-counting), and shall be applied for the purposes of the Water Fund. Amounts on deposit in a Rate Stabilization Fund shall not be pledged to or otherwise secure the Installment Payments or any Parity Debt. The City has the right at any time to withdraw any or all amounts on deposit in a Rate Stabilization Fund and apply such amounts for any lawful purposes of the City.

Agenda Item #5.1.

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ARTICLE VI

EVENTS OF DEFAULT
SECTION 6.1. Events of Default Defined. The following events constitute Events of Default hereunder:
(a) Failure by the City to pay any Installment Payment when due and payable hereunder.
(b) Failure by the City to pay any Additional Payment when due and payable hereunder, and the continuation of such failure for a period of 30 days. (c) Failure by the City to observe and perform any covenant, condition or agreement on its part to be observed or performed, other than as referred to in the preceding clauses (a) or (b), for a period of 60 days after written notice specifying such failure and requesting that it be remedied has been given to the City by the Authority or the Trustee; provided, however, that if the City notifies the Authority and the Trustee that in its reasonable opinion the failure stated in the notice can be corrected, but not within such 60-day period, such failure will not constitute an event of default hereunder if the City commences to cure such failure within such 60 day period and thereafter diligently and in good faith cures the failure in a reasonable period of time.
(d) The filing by the City of a voluntary petition in bankruptcy, or failure by the City promptly to lift any execution, garnishment or attachment, or adjudication of the City as a bankrupt, or assignment by the City for the benefit of creditors, or the entry by the City into an agreement of composition with creditors, or the approval by a court of competent jurisdiction of a petition applicable to the City in any proceedings instituted under the provisions of the Federal Bankruptcy Code, as amended, or under any similar acts which may hereafter be enacted. (e) The occurrence of any event defined to be an event of default under any Parity Debt Instruments.

SECTION 6.2. Remedies on Default. If an Event of Default occurs and is continuing, the Trustee as assignee of the Authority has the right, at its option and without any further demand or notice, to take any one or more of the following actions:
(a) Declare all principal components of the unpaid Installment Payments, together with accrued interest thereon at the Overdue Rate from the immediately preceding Interest Payment Date on which payment was made, to be immediately due and payable, whereupon the same shall immediately become due and payable.

Notwithstanding the foregoing provisions of this subsection (a), the Trustee shall rescind and annul such declaration and its consequences if, before any judgment or decree for the payment of the moneys due has been obtained or entered, (i) the City deposits with the Trustee a sum sufficient to pay all principal components of the Installment Payments coming due prior to such declaration and all matured interest components (if any) of the Installment Payments, with interest Agenda Item #5.1.

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on such overdue principal and interest components calculated at the Overdue Rate, and (ii) the City pays the reasonable expenses of the Trustee (including any fees and expenses of its attorneys), and (iii) any and all other defaults known to the Trustee (other than in the payment of the principal and interest components of the Installment Payments due and payable solely by reason of such declaration) have been made good. No such rescission and annulment will extend to or shall affect any subsequent default, or impair or exhaust any right or power consequent thereon.
(b) Take whatever action at law or in equity may appear necessary or desirable to collect the Installment Payments then due or thereafter to become due during the Term of this Agreement, or enforce performance and observance of any obligation, agreement or covenant of the City under this Agreement. (c) As a matter of right, in connection with the filing of a suit or other commencement of judicial proceedings to enforce the rights of the Trustee and the Bond Owners hereunder, cause the appointment of a receiver or receivers of the Gross Revenues and other amounts pledged hereunder, with such powers as the court making such appointment may confer.

SECTION 6.3. No Remedy Exclusive. No remedy herein conferred upon or reserved to the Authority is intended to be exclusive. Every such remedy is cumulative and in addition to every other remedy given under this Agreement or now or hereafter existing at law or in equity.

No delay or omission to exercise any right or power accruing upon any default impairs any such right or power or operates as a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient. In order to entitle the Authority to exercise any remedy reserved to it in this Article VI, it is not necessary to give any notice, other than such notice as may be required in this Article VI or by law.

SECTION 6.4. Agreement to Pay Attorneys’ Fees and Expenses. If either party to this Agreement defaults under any of the provisions hereof and the nondefaulting party, the Trustee or the Owner of any Bonds employs attorneys or incurs other expenses for the collection of moneys or the enforcement or performance or observance of any obligation or agreement on the part of the defaulting party herein contained, the defaulting party agrees that it will on demand therefor pay to the nondefaulting party, the Trustee or such Owner, as the case may be, the reasonable fees of such attorneys and such other expenses so incurred. The provisions of this Section 6.4 survive the expiration of the Term of this Agreement.

SECTION 6.5. No Additional Waiver Implied by One Waiver. If any agreement contained in this Agreement is breached by either party and thereafter waived by the other party, such waiver is limited to the particular breach so waived and does not waive any other breach hereunder.

SECTION 6.6. Trustee and Bond Owners to Exercise Rights. Such rights and remedies as are given to the Authority under this Article VI have been assigned by the Authority to the Trustee under the Indenture, to which assignment the City hereby consents. Such rights and remedies shall be exercised by the Trustee and the Owners of the Bonds as provided in the Indenture.

Agenda Item #5.1.

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ARTICLE VII

PREPAYMENT OF INSTALLMENT PAYMENTS
SECTION 7.1. Security Deposit. Notwithstanding any other provision hereof, the City may on any date secure the payment of Installment Payments, in whole or in part, by irrevocably depositing with the Trustee an amount of cash which, together with other available amounts, is either:
(a) sufficient to pay all such Installment Payments, including the principal and interest components thereof, when due under Section 4.4(a), or (b) invested in whole or in part in non-callable Defeasance Obligations in such amount as will, in the opinion of an Independent Certified Public Accountant (which opinion is addressed and delivered to the Trustee), together with interest to accrue thereon and together with any cash which is so deposited, be fully sufficient to pay all such Installment Payments when due under Section

4.4(a) or when due on any optional prepayment date under Section 7.2, as the City instructs at the time of said deposit.

If the City makes a security deposit under this Section for the payment of all remaining Installment Payments, all obligations of the City hereunder, and the pledge of Net Revenues and all other security provided by this Agreement for said obligations, will thereupon cease and terminate, excepting only the obligation of the City to make, or cause to be made, all Installment Payments from the security deposit. The security deposit will be deemed to be and will constitute a special fund for the payment of the Installment Payments in accordance with the provisions hereof.

SECTION 7.2. Optional Prepayment Relating to the 2024 Bonds. The City may exercise its option to prepay the principal components of the Installment Payments relating to the 2024 Bonds in whole or in part on any date on or after October 1, 20___. The City may exercise such option by payment of a prepayment price equal to the sum of (a) the aggregate principal components of the Installment Payments relating to the 2024 Bonds to be prepaid, (b) the interest component of the Installment Payment relating to the 2024 Bonds required to be paid on or accrued to such date, and (c) the premium (if any) then required to be paid upon the corresponding redemption of the 2024 Bonds under Section 4.01(a) of the Indenture. The Trustee shall deposit the prepayment price in the Redemption Fund to be applied to the redemption of 2024 Bonds under Section 4.01(a) of the Indenture. If the City prepays the Installment Payments in part but not in whole, the principal components will be prepaid among such maturities and in such integral multiples of $5,000 as the City designates in written notice to the Trustee.

SECTION 7.3. Mandatory Prepayment From Proceeds of Insurance, Sale or Condemnation. The City shall prepay the Installment Payments on any date, in whole, or in part among maturities on a pro rata basis in any integral multiple of $5,000, from and to the extent of any proceeds of insurance, sale or condemnation awards with respect to the Water System theretofore paid to the Trustee for such purpose under Sections 5.3 or 5.4. The City and the Authority hereby agree that such proceeds, to the extent remaining after payment of any delinquent Installment Payments, will be deposited in the Redemption Fund and credited towards the City’s obligations under this Section 7.3.

Agenda Item #5.1.

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SECTION 7.4. Credit for Amounts on Deposit. If the City prepays the Installment Payments in full under this Article VII, such that the Indenture is discharged by its terms as a result of the prepayment, and upon payment in full of all Additional Payments and other amounts then due and payable hereunder, all available amounts then on deposit in the funds and accounts established under the Indenture shall be credited towards the amounts then required to be so prepaid.

Agenda Item #5.1.

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ARTICLE VIII

MISCELLANEOUS
SECTION 8.1. Further Assurances. The City agrees that it will execute and deliver any and all such further agreements, instruments, financing statements or other assurances as may be reasonably necessary or requested by the Authority or the Trustee to carry out the intention or to facilitate the performance of this Agreement, including, without limitation, to perfect and continue the security interests herein intended to be created.

SECTION 8.2. Notices. Any notice, request, complaint, demand or other communication under this Agreement must be given by first class mail or personal delivery to the party entitled thereto at its address set forth below, or by telecopier or other form of telecommunication, at its number set forth below. Notice is effective either (a) upon transmission by fax or other form of telecommunication, (b) upon actual receipt after deposit in the United States of America mail, postage prepaid, or (c) in the case of personal delivery to any person, upon actual receipt. The Authority, the City and the Trustee may, by written notice to the other parties, from time to time modify the address or number to which communications are to be given hereunder.

If to the City City of St. Helena
or the Authority: 1088 College Avenue
St. Helena, CA 94574
Attention: Administrative Services Director

If to the Trustee: U.S. Bank Trust Company, National Association One California Street, Suite 1000
San Francisco, CA 94111
Attention: Global Corporate Trust
SECTION 8.3. Governing Law. This Agreement will be construed in accordance with and governed by the laws of the State of California.

SECTION 8.4. Binding Effect. This Agreement inures to the benefit of and is binding upon the Authority and the City and their respective successors and assigns, subject, however, to the limitations contained herein.

SECTION 8.5. Severability of Invalid Provisions. If any one or more of the provisions contained in this Agreement are for any reason held to be invalid, illegal or unenforceable in any respect, then such provision or provisions will be deemed severable from the remaining provisions contained in this Agreement and such invalidity, illegality or unenforceability will not affect any other provision of this Agreement, and this Agreement shall be construed as if such invalid or illegal or unenforceable provision had never been contained herein. The Authority and the City each hereby declares that it would have entered into this Agreement and each and every other Section, paragraph, sentence, clause or phrase hereof irrespective of the fact that any one or more Sections, paragraphs, sentences, clauses or phrases of this Agreement may be held illegal, invalid or unenforceable.

SECTION 8.6. Article and Section Headings and References. The headings or titles of the several Articles and Sections hereof, and any table of contents appended to copies hereof, are solely for convenience of reference and do not affect the meaning, construction or effect of this Agreement. All references herein to “Articles,” “Sections” and other subdivisions are to the Agenda Item #5.1.

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corresponding Articles, Sections or subdivisions of this Agreement; the words “herein,” “hereof,” “hereby,” “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular Article, Section or subdivision hereof; and words of the masculine gender mean and include words of the feminine and neuter genders.

SECTION 8.7. Payment on Non-Business Days. Whenever any payment is required to be made hereunder on a day that is not a Business Day, such payment shall be made on the immediately preceding Business Day.

SECTION 8.8. Execution of Counterparts. This Agreement may be executed in any number of counterparts, each of which will for all purposes be deemed to be an original and all of which together constitute but one and the same instrument.

SECTION 8.9. Waiver of Personal Liability. No member of the City Council, officer, agent or employee of the City has any individual or personal liability for the payment of Installment Payments or Additional Payments or be subject to any personal liability or accountability by reason of this Agreement; but nothing herein contained relieves any such member of the City Council, officer, agent or employee from the performance of any official duty provided by law or by this Agreement.

SECTION 8.10. Trustee as Third Party Beneficiary. The Trustee is hereby made a third party beneficiary hereof and is entitled to the benefits of this Agreement with the same force and effect as if the Trustee was a party hereto.

Agenda Item #5.1.

[Signature Page to Installment Sale Agreement dated as of _______ 1, 2024] IN WITNESS WHEREOF, the Authority and the City have caused this Agreement to be executed in their respective names by their duly authorized officers, all as of the date first above written.

ST. HELENA FINANCING AUTHORITY, as Seller
By:

Mandy Kellogg
Treasurer
CITY OF ST. HELENA, as Purchaser
By:

Mandy Kellogg
Administrative Services Director
Agenda Item #5.1.

A-1

APPENDIX A

SCHEDULE OF INSTALLMENT PAYMENTS
Interest
Payment Date(1)
Principal
Component
Interest
Component
Total
Payment

Agenda Item #5.1.

A-2
Interest
Payment Date(1)
Principal
Component
Interest
Component
Total
Payment

TOTALS
_________________
(1) Installment Payment Dates are the third (3rd) Business Day immediately preceding each Interest Payment Date shown in the table.

Agenda Item #5.1.

B-1

APPENDIX B
DESCRIPTION OF 2024 WATER PROJECT
The 2024 Water Project will consist of the following improvements, and any other improvements to the Water System approved by the City Council:
 Water Main Replacement
 Water Tank
 Condition Assessment
 Design and Construction with Napa intertie pump station  Risk and resilience assessment
 Cybersecurity implementation
 Smart Water Meters
Agenda Item #5.1.

Jones Hall Draft of May 14, 2024
PRELIMINARY OFFICIAL STATEMENT DATED JUNE ____, 2024
NEW ISSUE – FULL BOOK-ENTRY S&P RATING (Insured): “___” S&P RATING (Underlying): “___”
See “RATINGS” herein.

In the opinion of Jones Hall, A Professional Law Corporation, San Francisco, California, Bond Counsel, subject, however to certain qualifications described herein, under existing law, the interest on the 2024 Bonds is excluded from gross income for federal income tax purposes and such interest is not an item of tax preference for purposes of the federal alternative minimum tax. Interest on the 2024 Bonds may be subject to the corporate alternative minimum tax. In the further opinion of Bond Counsel, interest on the 2024 Bonds is exempt from California personal income taxes. See “TAX MATTERS.”
$_________*
ST. HELENA FINANCING AUTHORITY
2024 WATER REVENUE BONDS
Dated: Date of Delivery Due: April 1, as shown on inside cover Authority for Issuance. The bonds captioned above (the “2024 Bonds”) are being issued by the St. Helena Financing Authority (the “Authority”) under a resolution adopted by the governing body of the Authority, the provisions of Article 4 of Chapter 5, Division 7, Title 1 of the Government Code of the State of California (the “Bond Law”), and an Indenture of Trust dated as of July 1, 2024 (the “Indenture”), by and between the Authority and U.S.

Bank Trust Company, National Association, as trustee. See “THE 2024 BONDS – Authority for Issuance.” Use of Proceeds. The 2024 Bonds are being issued to provide funds to (i) assist the City of St. Helena (the “City”) with financing certain improvements to the City’s water system (as further defined herein, the “Water System”), and (ii) pay the costs of issuing the 2024 Bonds. See “FINANCING PLAN.”
Security for the 2024 Bonds. The 2024 Bonds are special obligations of the Authority, payable from the “Revenues” pledged under the Indenture, which consist primarily of installment payments (the “Installment Payments”) payable by the City to the Authority under an Installment Sale Agreement, dated as of July 1, 2024 (the “Installment Sale Agreement”) pursuant to which the City is purchasing the Water System improvements being financed.

Repayment of the Installment Payments is secured by a pledge of the “Net Revenues” of the Water System. See “SECURITY FOR THE 2024 BONDS.” Parity Debt. There are currently outstanding obligations payable from the Net Revenues of the Water System, as described herein. Additional series of bonds or other debt may be issued in the future that are payable from Net Revenues on a parity with the Installment Payments, subject to the conditions contained in the Installment Sale Agreement. See “SECURITY FOR THE 2024 BONDS – Parity Debt.” Bond Terms; Book-Entry Only. The 2024 Bonds will bear interest at the rates shown on the inside cover, payable semiannually on April 1 and October 1 of each year, commencing on October 1, 2024, and will be issued in fully registered form without coupons in the denomination of $5,000 or any integral multiple of $5,000. The 2024 Bonds will be issued in book-entry only form, initially registered in the name of Cede & Co., as nominee of The Depository Trust Company (“DTC”). Purchasers of the 2024 Bonds will not receive certificates representing their interests in the 2024 Bonds.

Payments of the principal of, premium, if any, and interest on the 2024 Bonds will be made to DTC, which is obligated in turn to remit such principal, premium, if any, and interest to its DTC Participants for subsequent disbursement to the beneficial owners of the 2024 Bonds. See “THE 2024 BONDS – General Bond Terms.”
Redemption. The 2024 Bonds are subject to redemption prior to maturity. See “THE 2024 BONDS – Redemption.” Bond Insurance and Reserve Fund Insurance. [To come]
THE 2024 BONDS ARE LIMITED OBLIGATIONS OF THE AUTHORITY PAYABLE SOLELY FROM AND SECURED BY THE REVENUES, WHICH CONSIST PRIMARILY OF THE INSTALLMENT PAYMENTS. NEITHER THE FULL FAITH AND CREDIT NOR THE TAXING POWER OF THE CITY IS PLEDGED TO THE PAYMENT OF THE INSTALLMENT PAYMENTS. THE 2024 BONDS ARE NOT SECURED BY A LEGAL OR

EQUITABLE PLEDGE OF, OR CHARGE, OR LIEN, OR ENCUMBRANCE UPON, ANY OF THE PROPERTY OF THE AUTHORITY OR ANY OF ITS INCOME OR RECEIPTS, EXCEPT THE REVENUES AS DESCRIBED HEREIN.

MATURITY SCHEDULE
(see inside cover)
THIS COVER PAGE CONTAINS CERTAIN INFORMATION FOR QUICK REFERENCE ONLY. IT IS NOT A SUMMARY OF THIS ISSUE OF BONDS. INVESTORS MUST READ THE ENTIRE OFFICIAL STATEMENT TO OBTAIN INFORMATION ESSENTIAL TO THE MAKING OF AN INFORMED INVESTMENT DECISION WITH RESPECT TO THE PURCHASE OF THE 2024 BONDS. INVESTMENT IN THE BONDS INVOLVES RISKS THAT MAY NOT BE APPROPRIATE FOR SOME INVESTORS. SEE “BOND OWNERS’ RISKS.” The 2024 Bonds are offered when, as and if issued and accepted by the Underwriter, subject to approval as to their legality by Jones Hall, A Professional Law Corporation, San Francisco, California, Bond Counsel. Certain legal matters will also be passed upon for the City by Jones Hall, A Professional Law Corporation, as Disclosure Counsel, and by the City Attorney. Certain legal matters will be passed upon for the Underwriter by its counsel, Kutak Rock LLP, Irvine, California. It is anticipated that the 2024 Bonds, in book-entry only form, will be available through the facilities of DTC on or about July _____, 2024.
[Oppenheimer Logo]
The date of this Official Statement is: __________, 2024. __________________
* Preliminary; subject to change.

This Preliminary Official Statement and the information contained herein are subject to completion or amendment. Under no circumstances shall this Preliminary Official Statement constitute an offer to sell or a solicitation of an offer to buy nor shall there be any sale of these securities in any jurisdiction in which such offer solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.

EXHIBIT 5
Agenda Item #5.1.

MATURITY SCHEDULE
$__________ Serial Bonds
(Base CUSIP†: _________)
Maturity Principal Interest
(October 1) Amount Rate Yield Price CUSIP†

$__________ _____% Term Bond Due October 1, 20___; Yield ____%; Price: ____% CUSIP†: _________

† CUSIP is a Registered Trademark of The American Bankers Association. FactSet Research Systems Inc. operates The CUSIP Service Bureau for the ABA. These data are not intended to create a database and do not serve in any way as a substitute for the CUSIP services. Neither the Authority, the City nor the Underwriter is responsible for the selection or correctness of the CUSIP numbers set forth above.

Agenda Item #5.1.

ST. HELENA FINANCING AUTHORITY
(Napa County, California)

GOVERNING BOARD OF THE AUTHORITY

AND CITY COUNCIL OF THE CITY
Paul Dohring, Chair/Mayor
Eric Hall, Vice-Chair/Vice-Mayor
Anna Chouteau, Boardmember/Councilmember
Billy Summers, Boardmember/Councilmember
Patrick Kenealy, Boardmember/Councilmember

AUTHORITY/CITY OFFICIALS
Anil Comelo, City Manager
April Mitts, Assistant City Manager
Mandy Kellogg, Administrative Services Director
Cindy Tzafopoulos, City Clerk
Ethan Walsh of Best, Best & Krieger LLP, City Attorney

SPECIAL SERVICES
Municipal Advisor
Del Rio Advisors, LLC
Modesto, California
Bond Counsel and Disclosure Counsel
Jones Hall, A Professional Law Corporation
San Francisco, California
Trustee
U.S. Bank Trust Company, National Association
San Francisco, California
Agenda Item #5.1.

GENERAL INFORMATION ABOUT THIS OFFICIAL STATEMENT
No Offering May Be Made Except by this Official Statement. No dealer, broker, salesperson or other person has been authorized to give any information or to make any representations with respect to the 2024 Bonds other than as contained in this Official Statement, and if given or made, such other information or representation must not be relied upon as having been authorized.

No Unlawful Offers or Solicitations. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy in any state in which such offer or solicitation is not authorized or in which the person making such offer or solicitation is not qualified to do so or to any person to whom it is unlawful to make such offer or solicitation.

Effective Date. This Official Statement speaks only as of its date, and the information and expressions of opinion contained in this Official Statement are subject to change without notice. Neither the delivery of this Official Statement nor any sale of the 2024 Bonds will, under any circumstances, create any implication that there has been no change in the affairs of the Authority, the City or the Water System since the date of this Official Statement.

Use of this Official Statement. This Official Statement is submitted in connection with the sale of the 2024 Bonds referred to herein and may not be reproduced or used, in whole or in part, for any other purpose. This Official Statement is not a contract with the purchasers of the 2024 Bonds.

Preparation of this Official Statement. The information contained in this Official Statement has been obtained from sources that are believed to be reliable, but this information is not guaranteed as to accuracy or completeness.

The Underwriter has provided the following sentence for inclusion in this Official Statement: The Underwriter has reviewed the information in this Official Statement in accordance with, and as part of, its responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriter does not guarantee the accuracy or completeness of such information.

Document References and Summaries. All references to and summaries of the Indenture or other documents contained in this Official Statement are subject to the provisions of those documents and do not purport to be complete statements of those documents.

Stabilization of and Changes to Offering Prices. The Underwriter may over allot or take other steps that stabilize or maintain the market price of the 2024 Bonds at a level above that which might otherwise prevail in the open market.

If commenced, the Underwriter may discontinue such market stabilization at any time. The Underwriter may offer and sell the 2024 Bonds to certain dealers, dealer banks and banks acting as agent at prices lower than the public offering prices stated on the cover page of this Official Statement, and those public offering prices may be changed from time to time by the Underwriter.

Bonds are Exempt from Securities Laws Registration. The issuance and sale of the 2024 Bonds have not been registered under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, in reliance upon exemptions for the issuance and sale of municipal securities provided under Section 3(a)(2) of the Securities Act of 1933 and Section 3(a)(12) of the Securities Exchange Act of 1934.

Estimates and Projections. Certain statements included or incorporated by reference in this Official Statement constitute “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995, Section 21E of the United States Securities Exchange Act of 1934, as amended, and Section 27A of the United States Securities Act of 1933, as amended. Such statements are generally identifiable by the terminology used such as “plan,” “expect,” “estimate,” “budget” or other similar words.

THE ACHIEVEMENT OF CERTAIN RESULTS OR OTHER EXPECTATIONS CONTAINED IN SUCH FORWARDLOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS

WHICH MAY CAUSE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS DESCRIBED TO BE

MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. THE CITY DOES NOT PLAN TO ISSUE ANY

UPDATES OR REVISIONS TO THOSE FORWARD-LOOKING STATEMENTS IF OR WHEN ITS EXPECTATIONS, OR EVENTS, CONDITIONS OR CIRCUMSTANCES ON WHICH SUCH STATEMENTS ARE BASED OCCUR.

Internet Site. The City maintains an internet site; however, none of the information contained on that internet site is incorporated by reference in this Official Statement.

Agenda Item #5.1.

[REGIONAL LOCATION MAP]
Agenda Item #5.1.

i

TABLE OF CONTENTS
Page
INTRODUCTION ................................................ 1 FINANCING PLAN ............................................. 4 The Project ..................................................... 4 Sources and Uses of Funds ........................... 4 THE 2024 BONDS ............................................. 5 Authority for Issuance .................................... 5 General Bond Terms ...................................... 5 Redemption* ................................................... 6 Registration, Transfer and Exchange............. 8
SECURITY FOR THE 2024 BONDS ................. 2
General; Limited Obligation ............................ 2 Installment Payments; Pledge of Net
Revenues ................................................... 2 Receipt and Use of Gross Revenues under
Installment Sale Agreement ....................... 3
Receipt and Use of Revenues under
Indenture .................................................... 4 Reserve Fund ................................................. 5 Rate Stabilization Fund .................................. 5 Rate Covenants .............................................. 5 Parity Debt ...................................................... 6 No Senior Debt ............................................... 8 Casualty Insurance and Eminent Domain
Proceeds .................................................... 8 THE AUTHORITY AND THE CITY .................... 9
The Authority .................................................. 9 The City .......................................................... 9 City Pension Plans and OPEB ....................... 9
THE WATER SYSTEM .................................... 12 Overview ...................................................... 12 Sources of Water Supply ............................. 12 Service Area and Customers ....................... 13
Billing and Collections .................................. 13 Permits and Regulatory Compliance ........... 13
Water Supplies ............................................. 14 Customer Accounts ...................................... 14 Top Ten Customers ..................................... 15 Water Rates and Charges ........................... 15
Capital Improvement Program ..................... 17
Historical and Projected Debt Service
Coverage ................................................. 18 BOND OWNERS’ RISKS ................................. 21 Revenues; Rate Covenant ........................... 21
Operations and Maintenance Costs; ThirdParty Sources of Water Supply ............... 21 Limitations on Remedies Available to Bond
Owners ..................................................... 21 Seismic and other Natural Disasters ........... 22
Loss of Tax-Exemption ................................ 23 Proposition 218 ............................................ 23 Environmental Regulation ............................ 24 Cybersecurity ............................................... 25 Secondary Market for Bonds ....................... 25
Future Parity Debt ........................................ 25 TAX MATTERS ................................................ 25 CERTAIN LEGAL MATTERS .......................... 27
NO MATERIAL LITIGATION ........................... 27
RATING ........................................................... 28 CONTINUING DISCLOSURE .......................... 28
UNDERWRITING ............................................. 28 MUNICIPAL ADVISOR .................................... 28 EXECUTION .................................................... 29 APPENDIX A: SUMMARY OF CERTAIN PROVISIONS OF THE PRINCIPAL LEGAL DOCUMENTS APPENDIX B: AUDITED FINANCIAL STATEMENTS OF THE CITY
FOR THE FISCAL YEAR ENDED JUNE 30, 2023
APPENDIX C: FORM OF CONTINUING DISCLOSURE CERTIFICATE
APPENDIX D: GENERAL INFORMATION ABOUT THE CITY OF ST. HELENA AND THE COUNTY OF NAPA APPENDIX E: FORM OF OPINION OF BOND COUNSEL
APPENDIX F: DTC AND THE BOOK-ENTRY ONLY SYSTEM
[APPENDIX G: SPECIMEN MUNICIPAL BOND INSURANCE POLICY]
Agenda Item #5.1.