EXHIBIT E
SELECTED FAA RULES AND REGULATIONS
LICENSE PROVISIONS REQUIRED BY THE FEDERAL
AVIATION ADMINISTRATION
1. The Lessee, for himself/herself, his/her heirs, personal representatives, successors in interest, and assigns, as part of the consideration hereof, does hereby covenant and agree “as a covenant running with the land” that in the event facilities are constructed, maintained, or otherwise operated on the property described in this Lease for a purpose for which a Federal Aviation Administration activity, facility, or program is extended or for another purpose involving the provision of similar services or benefits, the Lessee shall maintain and operate such facilities and services in compliance with all requirements imposed by the Non-discrimination Acts and Regulations in the Pertinent List of Non-Discrimination Authorities set forth in Provision 19 hereof (as such may be amended), such that no person on the grounds of race, color, or national origin, will be excluded from participation in, denied benefits of , or otherwise subjected to discrimination in the use of said facilities.
2. The Lessee, for himself/herself, his/her heirs, personal representative, successors in interest, and assigns, as part of the consideration hereof, does hereby covenant and agree “as a covenant running with the land” that: (1) no person on the grounds of race, color or national origin shall be excluded from participation in, denied the benefits of, or be otherwise subjected to discrimination in the use of said facilities, (2) that in the construction of any improvements on, over, or under such land and the furnishing of services thereon, no person on the grounds of race, color, or national origin shall be excluded from participation in, denied the benefits of, or otherwise be subject to discrimination, (3) that the Lessee shall use the premises in compliance with all other requirements imposed by or pursuant to the Non-Discrimination Acts and Regulations in the Pertinent List of Non-Discrimination Authorities set forth in Provision 19 hereof (as such may be amended).
3. In the event of breach of any of the above nondiscrimination covenants, Authority shall have the right to terminate the Lease, and to reenter and repossess said land and the facilities thereon, and hold the same as if said Lease had never been made or issued. This provision does not become effective until the procedures of 49 CFR Part 21 are allowed and completed including expiration of appeal rights.
4. Lessee shall furnish its accommodations and/or services on a fair, equal and not unjustly discriminatory basis to all users thereof and it shall charge fair, reasonable and not unjustly discriminatory prices for each unit or service: PROVIDED THAT the Lessee may be allowed to make reasonable and nondiscriminatory discounts, rebates or other similar type of price reductions to volume purchasers.
5. Non-compliance with Provision 4 above shall constitute a material breach hereof and in the event of such non-compliance, Authority shall have the right to terminate the Lease Agreement, and the estate hereby created without liability therefor, or at the election of the Authority or the United States either or both said Governments shall have the right to judicially enforce provisions.
6. Lessee agrees that it shall insert the above five provisions in any lease/sublease agreement, by which said Lessee grants a right or privilege to any person, firm or corporation to render accommodations and/or services to the public on the premises herein leased.
7. Lessee will comply with pertinent statutes, Executive Orders and such rules as are promulgated to assure that no person shall, on the grounds of race, creed, color, national origin, sex, age, or handicap be excluded from participating in any activity conducted with or benefiting from Federal assistance. If the Lessee transfers its obligation to another, the transferee is obligated in the same manner as the Lessee. This provision obligates the Lessee for the period during which the property is owned, used, or possessed by the Lessee and the airport remains obligated to the Federal Aviation Administration. This provision is in addition to that required by Title VI of the Civil Rights Act of 1964.
8. Nothing in the above Provisions 6 or 7 shall be construed as granting permission or consent for the Lessee to sublease or transfer the premises leased herein.
9. The Lessee assures that it will undertake an affirmative action program as required by 14 CFR Part 152, Subpart E, to insure that no person shall on the grounds of race, creed, color, national origin, or sex be excluded from participating in any employment activities covered in 14 CFR, Part 152, Subpart E. The Lessee assures that no person shall be excluded on these grounds from participating in or receiving the services or benefits of any program or activity covered by this subpart. The Lessee assures that it will require that its covered sub-organizations provide assurance to the Authority, that they similarly will undertake affirmative action programs and that they will require assurances from their sub-organizations, as required by 14 CFR Part 152, Subpart E, to the same effect.
10. The Authority reserves the right to further develop or improve the landing area of the airport as it sees fit, regardless of the desires or view of the Lessee and without interference or hindrance.
11 The Authority reserves the right, but shall not be obligated to the Lessee to maintain and keep in repair the landing area of the airport and all publicly owned facilities of the airport, together with the right to direct and control all activities of the Lessee in this regard.
12. This Lease shall be subordinate to the provisions and requirements of any existing or future agreement between the Authority and the United States, relative to the development, operation and maintenance of the airport.
13. There is hereby reserved to the Authority, its successors and assigns, for the use and benefit of the public, a right of flight for the passage of aircraft in the airspace above the surface of the premises herein leased. This public right of flight shall include the right to cause in said airspace any noise inherent in the operation of any aircraft used for navigation or flight through the said airspace or landing at, taking off from or operation on this airport.
14. Lessee agrees to comply with the notification and review requirements covered in Part 77 of the Federal Aviation Regulations in the event future construction of building is planned for the Leased Premises, or in the event of any planned modification or alteration of any present or future building or structure situated on the Leased Premises.
15. Lessee, by accepting this Lease expressly agrees for itself, its successors and assigns that it will not erect nor permit the erection of any structure or object nor permit the growth of any tree on the land leased hereunder which would violate the obstruction height limitations as set forth in Federal Air Regulation (FAR), Part 77. In the event the aforesaid covenants are breached, the Authority reserves the right to enter upon the land leased hereunder and to remove the offending obstruction, all of which shall be at the expense of the Lessee.
16. The Lessee, by accepting this Lease, agrees for itself, its successors and assigns that it will not make use of the Leased Premises, in any manner which might interfere with the landing and taking off of aircraft from this airport or otherwise constitute a hazard. In the event the aforesaid covenant is breached, the Authority reserves the right to enter upon the premises hereby leased and causes the abatement of such interference at the expense of the Lessee.
17. It is understood that nothing herein contained shall be construed to grant or authorize the granting of an exclusive right within the meaning of Section 308a of the Federal Aviation Act of 1958, as amended.
18. This Lease and all the provision hereof shall be subject to whatever right the United States Government now has or in the future may have or acquire, affecting the control, operation, regulation and taking over of said airport or the exclusive or non-exclusive use of the airport by the United States during time of war or national emergency.
19. The following constitutes the Pertinent List of Non-Discrimination Authorities, which are incorporated herein by this reference as if set forth in full:
• Title VI of the Civil Rights Act of 1964 (42 U.S.C. § 2000d et seq., 78 stat. 252), (prohibits discrimination on the basis of race, color, national origin); and 49 CFR part 21; • The Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, (42 U.S.C. § 4601), (prohibits unfair treatment of persons displaced or whose property has been acquired because of Federal or Federal-aid programs and projects); • Section 504 of the Rehabilitation Act of 1973, (29 U.S.C. § 794 et seq.), as amended, (prohibits discrimination on the basis of disability); and 49 CFR part 27; • The Age Discrimination Act of 1975, as amended, (42 U.S.C. § 6101 et seq.), (prohibits discrimination on the basis of age);
• Airport and Airway Improvement Act of 1982, (49 USC § 471, Section 47123), as amended, (prohibits discrimination based on race, creed, color, national origin, or sex);
• The Civil Rights Restoration Act of 1987, (PL 100-209), (Broadened the scope, coverage and applicability of Title VI of the Civil Rights Act of 1964, The Age Discrimination Act of 1975 and Section 504 of the Rehabilitation Act of 1973, by expanding the definition of the terms “programs or activities” to include all of the programs or activities of the Federal-aid recipients, sub-recipients and contractors, whether such programs or activities are Federally funded or not); • Titles II and III of the Americans with Disabilities Act, which prohibit discrimination on the basis of disability in the operation of public entities, public and private transportation systems, places of public accommodation, and certain testing entities (42 U.S.C. §§ 12131 – 12189) as implemented by Department of Transportation regulations at 49 CFR parts 37 and 38;
• The Federal Aviation Administration’s Non-discrimination statute (49 U.S.C. § 47123) (prohibits discrimination on the basis of race, color, national origin, and sex); • Executive Order 12898, Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations, which ensures discrimination against minority populations by discouraging programs, policies, and activities with disproportionately high and adverse human health or environmental effects on minority and low-income populations;
• Executive Order 13166, Improving Access to Services for Persons with Limited English Proficiency, and resulting agency guidance, national origin discrimination includes discrimination because of limited English proficiency (LEP). To ensure compliance with Title VI, you must take reasonable steps to ensure that LEP persons have meaningful access to your programs (70 Fed. Reg. at 74087 to 74100); • Title IX of the Education Amendments of 1972, as amended, which prohibits you from discriminating because of sex in education programs or activities (20 U.S.C. 1681 et seq).
Item Number: 11
City Council / Board of Directors
Written Communications
Meeting of: October 6, 2026
Submitted By:
Robert Clemmer, Fire Chief
Subject:
Agreement for Public-Based Ambulance Services with Consolidated Fire Agencies Recommendation:
Staff recommends that the Honorable City Council:
(1) Approve the Agreement for Public-Based Ambulance Services between Consolidated Fire Agencies and the City of Victorville, on behalf of the Victorville Fire Department, authorizing the Department to provide surge, reserve, or backup ambulance transport services when requested or activated by Consolidated Fire Agencies and when City personnel and resources are available; and (2) Authorize the City Manager, or his designee, to execute the agreement and all related documents.
Fiscal Impact:
The transition to the new ambulance service model through Consolidated Fire Agencies (CONFIRE) took effect on October 1, 2026. Because the number and duration of future activations cannot be predicted, related revenues and expenditures were not included in the Fiscal Year 2026-2027 (FY27) adopted budget. Staff will monitor activity and return with an appropriate budget amendment based on actual revenues received during FY27 during the City Council meeting scheduled in July 2027. This approach is taken so it can accurately capture all revenues received and can help us budget appropriately moving forward. An account code will be created to clearly track all transport services reimbursements. The agreement provides quarterly reimbursement for authorized Cityowned ambulance deployments as follows:
Service Reimbursement
Authorized Unit-Hour Cost for City-Owned
Ambulance Apparatus and Equipment $181.73 per unit hour Service Reimbursement
Medical Restock and Supplies for City-Owned
Ambulance Transports $40.43 per completed transport
The rates are reviewed annually under CONFIRE Administrative Committee Policy 3.016 and may be updated by Administrative Committee resolution.
Strategic Plan Goal:
This agreement supports Strategic Plan Goal B, Public Safety, Strategy 6 - Expand Emergency Medical Services response capabilities. It provides a mechanism for the Victorville Fire Department (VFD) to expand ambulance transport capacity when primary system resources are unavailable or regional demand exceeds available resources, while maintaining the City’s ability to protect local emergency response coverage.
Background:
San Bernardino County (SBC) conducted a Request for Proposal (RFP) No. ICEMA23- ICEMA-4811 for Advanced Life Support (ALS) and Basic Life Support (BLS) ground ambulance services, interfacility transport, and critical care transport within designated exclusive operating areas. On December 5, 2023, CONFIRE was selected through that process, and entered into SBC Contract No. 23-1282 (Attachment B) to provide and coordinate ambulance services which began on October 1, 2026.
The proposed agreement establishes the terms under which the VFD may participate in the regional ambulance delivery system. Victorville would not assume a continuous frontline ambulance commitment. Instead, the Department may provide authorized surge, reserve, or backup ambulance resources on a temporary, episodic, or as-needed basis when requested or activated by CONFIRE and when City personnel and equipment are available.
Discussion:
The agreement authorizes one fully equipped surge ambulance and one fully equipped reserve or backup ambulance. No front-line deployment is assigned to Victorville. Each activation remains subject to Fire Department resource availability, allowing the Department to evaluate City coverage, staffing, apparatus status, anticipated duration, and other operational demands before accepting a request.
A City resource may be deployed and reimbursed only when it is identified in the agency deployment schedule or current CONFIRE deployment plan, or when CONFIRE expressly requests or authorizes the resource. CONFIRE may adjust posting location, schedule, hours, apparatus assignment, or operational role, but any change that materially increases the City’s minimum commitment, changes compensation, or reallocates responsibility requires a written amendment.
For City-owned ambulance deployments, CONFIRE will reimburse the City at the authorized unit-hour rate and provide the medical supply restock payment for each completed transport. Quarterly payments will be prepared from Computer Aided Dispatch (CAD) data reflecting in-service hours and completed transports. The standardized reimbursement rate is cost-based but is not guaranteed to equal Victorville’s actual incremental personnel, overtime, backfill, fleet, administrative, or compliance costs.
The agreement remains in effect for the term of SBC Contract No. 23-1282 unless terminated in accordance with its provisions. A City-requested termination requires a meet-and-confer process and a termination date no earlier than 180 days after the City’s initial notice. The agreement also requires specified insurance or approved selfinsurance, record retention and audit cooperation, HIPAA compliance, and indemnification of CONFIRE for claims arising from City performance, except where prohibited by law or attributable to CONFIRE negligence or willful misconduct.
A meet-and-confer process was conducted on September 10, 2026 with both represented bargaining groups of the VFD regarding implementation of the proposed ambulance services arrangement. An agreement was reached with each bargaining group to evaluate organizational impact and review on or about June 1, 2027. The proposed agreement gives the City of Victorville a defined, reimbursable means of supporting regional ambulance capacity without committing a permanent front-line unit. It preserves local operational discretion, supports the regional transition to the new ambulance service model, and advances the City’s public-safety goals.
Therefore, staff recommends that the Honorable City Council approve the Agreement for Public-Based Ambulance Services between CONFIRE and the City of Victorville and Authorize the City Manager, or his designee, to execute the agreement and all related documents.
Staff is available to answer any questions you may have.
Prepared By:
Andrew Roach, Deputy Chief of Operations
Attachments: A. Proposed Agreement for Public-Based Ambulance Services with
CONFIRE
B. San Bernardino County Contract No. 23-1282 and Applicable Amendments
Attachment B
San Bernardino County
Contract No. 23-1282 and
Applicable Amendments
Item Number: 12
City Council / Board of Directors
Written Communications
Meeting of: October 6, 2026
Submitted By:
Asdghik Keyvanian, Director of Finance / City Treasurer
Subject:
Redemption of the Outstanding Baldy Mesa Water District Parity Certificates of Participation (Water System Improvement Project), Series 2006 Recommendation:
That the Honorable Board of Directors adopt Resolution No. VWD 26-015, approving the full early redemption of the outstanding Baldy Mesa Water District Parity Certificates of Participation (Water System Improvement Project), Series 2006, and authorizing the General Manager, or their designee, to execute the required instruction letter to the Trustee and take all other necessary actions to effectuate the full early redemption.
Fiscal Impact:
The total fiscal impact of the proposed early redemption is estimated at $6,400,604.44, consisting of $6,305,000 for the outstanding principal balance and estimated accrued interest through the redemption date of $95,604.44. The outstanding principal balance will be funded from the Baldy Mesa Bonds & Notes Payable Account 4110202-26200.
Accrued interest through the redemption date will be funded from the Baldy Mesa Debt Service Interest Account 4110202-54120.
Strategic Plan Goal:
This item aligns with Goal A. Financial Sustainability - foster fiscal health through disciplined long-term planning, cost control, increased revenues, and cost recovery. The proposed early redemption will reduce the Victorville Water District’s outstanding debt and eliminate future interest costs, while allowing future revenues previously dedicated to debt service to be redirected toward water system improvements and other projects within the District.
Background:
On August 15, 2007, the former Victor Valley Water District (VVWD) and Baldy Mesa Water District (BMWD) were consolidated to create what is now the Victorville Water District (the District). This consolidation established the District as a subsidiary of the City of Victorville, pursuant to Resolution No. 2977 issued by the Local Agency Formation Commission (LAFCO) for the County of San Bernardino. All liabilities, including the debt obligations of the former Victor Valley Water District and Baldy Mesa Water District, were assumed by the District and the City effective July 1, 2007.
Prior to the consolidation, on March 1, 2006, the BMWD issued $13,070,000 in Parity Certificates of Participation (the Certificates) to finance water system improvements within the BMWD service area. The Certificates have stated interest rates ranging from 3.20% to 5.00% and an original final maturity of August 1, 2036. Annual debt service is a special limited obligation of the District, payable from and secured by a pledge of a lien on the District’s net revenues. Principal and interest payments are due each August 1st, and interest-only payments are due each February 1st.
On April 27, 2026, the District Board held a workshop to review preliminary Rate Study findings. As part of that discussion, the Board reviewed a proposed five-year water rate schedule that included the repayment of the remaining debt associated with the Baldy Mesa Water District’s 2006 Certificates of Participation. Repayment of the remaining Certificates would eliminate the associated debt service and allow revenues previously dedicated to debt service to be redirected to water system improvements and other District needs. The 2026 Water Rate Study and associated water rate and fee changes were subsequently adopted by the Board on July 21, 2026.
Discussion:
As of August 1, 2026, the outstanding principal amount of the Certificates is $6,305,000.
The District has sufficient available funds to fully redeem the outstanding Certificates prior to their stated maturity. Early redemption will eliminate the District’s remaining debt service obligation and associated future interest payments, resulting in an estimated $1,745,995.56 in interest cost savings. It will also allow future revenues that would otherwise be dedicated to debt service to be used for water system improvements and other projects within the District, providing greater flexibility to address infrastructure needs and other priorities.
Pursuant to the Trust Agreement, the Certificates may be optionally prepaid in full prior to their stated maturity, without a redemption premium or penalty, on any date at a prepayment price equal to the outstanding principal amount plus accrued interest through the redemption date. The District is proposing to fully redeem the remaining $6,305,000 in outstanding Certificates prior to their stated maturity. For a full early redemption, the Trustee has advised that they require an instruction letter with at least 45 days’ advance notice to process the redemption and provide the required notice to Certificate holders, which must be provided no more than 60 days and no less than 30 days prior to the redemption date. Sufficient funds must also be deposited with the Trustee prior to distribution of the redemption notice.
If approved, staff anticipates providing the required written instruction letter to the Trustee on October 7, 2026, with the earliest anticipated redemption date of Monday, November 23, 2026. The instruction letter will specify the redemption date, redemption amount, and Certificates to be redeemed. The final redemption amount will consist of the outstanding principal plus accrued interest through the redemption date.
After the instruction letter is submitted, the Trustee will provide staff with the final redemption amount. Staff will then arrange for the required funds to be submitted to the Trustee by wire transfer to complete the redemption on the specified redemption date.
Staff recommends that the Board of Directors adopt Resolution No. VWD 26-015, approving the full early redemption of the outstanding $6,305,000 principal amount of the Baldy Mesa Water District Parity Certificates of Participation (Water System Improvement Project), Series 2006, and authorizing the General Manager, or their designee, to execute the required instruction letter to the Trustee and take all other necessary actions to effectuate the full early redemption.
Staff remains available for any questions the District Board may have.
Prepared By:
Alex M. Garcia, Finance Analyst
Attachments: A. Resolution No. VWD 26-015
B. Instruction Letter
C. Trust Agreement
Attachment A
Resolution No. VWD 26-015
RESOLUTION NO. VWD 26-015
A RESOLUTION OF THE BOARD OF DIRECTORS OF THE
VICTORVILLE WATER DISTRICT, APPROVING THE FULL
EARLY REDEMPTION OF THE OUTSTANDING BALDY
MESA WATER DISTRICT PARITY CERTIFICATES OF
PARTICIPATION (WATER SYSTEM IMPROVEMENT
PROJECT), SERIES 2006
WHEREAS, on March 1, 2006, the Baldy Mesa Water District issued $13,070,000 in Parity Certificates of Participation (the “Certificates”) to finance water system improvements within the Baldy Mesa Water District service area; and WHEREAS, on August 15, 2007, the former Victor Valley Water District and Baldy Mesa Water District were consolidated to create what is now the Victorville Water District (the “District”), and all liabilities, including the debt obligations of the former Victor Valley Water District and Baldy Mesa Water District, were assumed by the District and the City effective July 1, 2007; and
WHEREAS, pursuant to the Trust Agreement, the Certificates may be optionally prepaid in full prior to their stated maturity, without a redemption premium or penalty, at a prepayment price equal to the outstanding principal amount plus accrued interest through the redemption date; and
WHEREAS, as of August 1, 2026, the outstanding principal amount of the Certificates is $6,305,000; and
WHEREAS, the District desires to fully redeem the outstanding Certificates prior to their stated maturity in the principal amount of $6,305,000, together with accrued interest through the redemption date; and
WHEREAS, the General Manager, or their designee, requires authorization to execute the required instruction letter to the Trustee and to take all other necessary actions to effectuate the full redemption.
NOW, THEREFORE, THE BOARD OF DIRECTORS OF THE VICTORVILLE
WATER DISTRICT DOES HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS:
Section 1. The Board of Directors hereby approves the full early redemption of the outstanding Baldy Mesa Water District Parity Certificates of Participation (Water System Improvement Project), Series 2006, in the outstanding principal amount of $6,305,000, together with accrued interest through the redemption date, in accordance with the applicable Trust Agreement.
Section 2. The General Manager, or their designee, is hereby authorized to execute the required instruction letter to the Trustee directing the full early redemption of the outstanding Certificates and specifying the applicable redemption date, redemption amount, and Certificates to be redeemed.
Section 3. The General Manager, or their designee, is hereby authorized to take all other necessary actions and execute all documents necessary or appropriate to effectuate the full early redemption of the outstanding Certificates, including arranging for the transfer of the required funds to the Trustee.
Section 4. The City Clerk shall certify as to the adoption of this Resolution.
Section 5. This Resolution shall take effect immediately upon its adoption.
Attachment B
Instruction Letter
760.955.5000
FAX 760.269.0013
[email protected]
http://victorvilleca.gov
14343 Civic Drive
P.O. Box 5001
Victorville, California 92393-5001
CITY OF
VICTORVILLE
October 7, 2026
BNY Corporate Trust Team
333 S. Hope St
Los Angeles, CA 90071
RE: Redemption of the Baldy Mesa Water District Parity Certificates of Participation – Water System Improvement Project
Dear BNY Corporate Trust Team:
The City of Victorville, on behalf of the Victorville Water District, hereby provides formal notice and instruction to proceed with the full optional redemption of the outstanding Baldy Mesa Water District Parity Certificates of Participation (Water System Improvement Project) on November 23, 2026, subject to the requirements of the applicable Indenture and related financing documents.
The City/District intends to redeem the Certificates in full, including all outstanding principle and accrued interest through the Redemption Date, and any other amounts required under the governing documents.
Redemption Information:
• Issue: Baldy Mesa Water District Parity Certificates of Participation – Water System Improvement Project
• Redemption Date: November 23, 2026
• Outstanding Principal: $6,305,000.00
• Currently Estimated Accrued Interest/Other Amounts: $95,604.44 • Currently Estimated Total Redemption Amount: $6,400,604.44 • CUSIP Numbers: 058454BZ1 and 058454CC1
Please note that the total redemption amount is currently an estimate. We understand that the final amount will be calculated and confirmed by the Trustee/Paying Agent and will include interest accrued through the Redemption Date and any other amounts required under the applicable financing documents.
Please confirm receipt of this instruction and provide the City/District with:
1. The final redemption amount;
2. The date by which redemption funds must be received;
3. Wiring instructions and any required funding procedures;
4. Confirmation of the required notice period and the process for providing notice to the registered holders and DTC, if applicable; and
5. Any additional documentation, authorizations, or actions required from the City/District to complete the redemption on November 23, 2026.
The City/District intends to proceed with the full redemption and would appreciate your assistance in coordinating all necessary steps to ensure the redemption is completed on the requested date.
Please let us know if you require any additional information from the City/District.
Regards,
Jenele Davidson
Deputy City Manager
Attachment C
Trust Agreement
•
•
•
TRUST AGREEMENT
by and among
UI\ION BANK OF CALIFORNIA, N.A.
as Trustee
and
BALDY MESA WATER DISTRICT PUBLIC FACIUTIES CORPORATION
as Corporation
And
BALDY MESA WATER DISTRICT
as Purchaser
Dated as of March 1, 2006
Relating to
S 13,070,000
PARITY CERTlFICATES OF PARTICIPATION
(WATER SYSTEM IMPROVEMENT PROJECT)
SERIES 2006
•
•
•
TABLE OF CONTENTS
Section
ARTICLE I.
Page
DEFINITIONS; RULES OF CONSTRUCTION; CONTENTS OF
CERTIFICATES AND OPINIONS; RECITALS .. ......................................... I Section 1.0 I.
Section l.02.
Section l .03.
Section 1.04.
Definitions .................................................................................... ........ l Rules of Construction .......................................................................... 8 Content of Statements and Opinions .................................................... 8 Recitals ................................................................................................. 9 ARTICLE II. CERTIFICATES; TERMS AND PROVISIONS ............................................ 9 Section 2.01.
Section 2.02.
Section 2.03.
Section 2.04.
Section 2.05.
Section 2.06.
Section 2.07.
Section 2.08.
Section 2.09.
Section 2. I 0.
Section 2.11.
Section 2.12 .
Section 2.13.
Section 2.14.
Section 1.15.
Preparation of Certificates .... ............................................................... 9 Denominations; Medium and Place of Payment; Dating ..................... 9 Payment of Principal and Interest with Respect to Certificates ......... 10 Fom1 of Certificates ........................................................................... 11 Execution ............................... .......................................................... , . 11 Transfer of Certificates ...................................................................... 11 Exchange of Certificates .................................................................. .. 11 Certificate Registration Books ..................................................... ...... l 1 Temporary Certificates ...................................................................... 12 Certificates Mutilated, Lost, Destroyed or Stolen ............................. 12 Book-Entry System; Limited Obligation ........................................... 13 Representation Letter ........... ..... ........................................................ 14 Transfers Outside Book-Entry System .................... .. .......... .............. 14 Payments and Notices to the Nominee ............... ............. .................. 15 Initial Depository and Nominee .............. ........................................... 15 ARTICLE Ill. DELIVERY OF CERTIFICATES; COST OF ISSUANCE FUND; CONSTRCCTION FUND ............................................................................. 15 Section 3.0 I.
Section 3.02.
Section 3.03.
Section 3.04.
Section 3.05.
Delivery of Certificates .................................................... .................. 15 Application of Proceeds of Certificates and Other Moneys .......... .... 15 Validity of Ce11ificates ....................................................................... 15 Cost of Issuance Fund ............................................................. ........... 15 Construction Fund ... ............................................................... ......... ... 16 ARTICLE l\1. PREPAYMENT OF CERTlFlC A TES ... ..................... ................. ................. l 6 Section 4.01 .
Section 4.02.
Section 4.03.
Section 4.04.
Section 4.05.
Tenns of Prepayments ....................................................................... 16 Selection of Certificates for Prepayment ........................................... 18 Notice of Prepayment ........................ .... ............... ............................. 18 Partial Prepayment of Certificate ....... .... ............................................ 18 Effect of Prepayment .......... .................... ................................ .......... . 19 ARTICLE V. INSTALLMENT PAYMENTS ............. ............ .. ..... ....... .............................. 19 Section 5.01.
Section 5.02 .
Section 5.03.
Pledge and Deposit of Installment Payments .......................... .... ....... 19 Installment Payment Fund .. .............................................................. 19 Investment of Moneys ........................................................................ 20 •
•
Section 5. 04.
Section 5.05 .
Reserve Fund ..................................................................................... 21 Pledge of Moneys in Funds ................................................................ 22 ARTICLE Vf. COVENANTS ............................................................................................... 22 Section 6. 0 I.
Section 6.02.
Section 6.03.
Section 6.04.
Section 6.05.
Section 6.06.
Section 6.07.
Section 6.08.
Section 6.09.
Section 6.10.
Section 6.11.
Corporation and Purchaser to Comply with Installment
Purchase Agreement .......................................................................... 22 Purchaser Budgets .............................................................................. 22 Tax Covenants ................................................................................... 23 Accounting Records and Repo1ts ....................................................... 23 Compliance with Trust Agreement.. .................................................. 23 Observance of Laws and Regulations .. .............................................. 2 3 Compliance with Contracts ............................................................ .... 23 Prosecution and Defense of Suits ...................................................... 23 Recordation and Filing .................................................................... ... 24 Eminent Domain .. ............................................................ .................. 24 Further Assurances ............................................................................. 24 ARTICLE VII. DEFAULT Al\TI LIMlT ATlON OF LIABILITY ........................................ 25 Section 7.01.
Section 7.02.
Section 7.03.
Section 7.04.
Section 7.05.
Section 7 .06.
Section 7.07.
Section 7.08.
Section 7.09.
Section 7.10.
Section 7.11 .
Section 7. l 2.
Section 7 .13.
Notice of Non-Payment ..................................................................... 25 Action on Default or Termination ...................................................... 25 Other Remedies of the Trustee ........................ .......................... .. ...... 25 Non-Waiver .............................. .......................................................... 26 Remedies Not Exclusive .................................................................... 26 No Obligation by the Purchaser to Owners ....................................... 26 Trustee Appointed Agent for Certificate-owners; Direction of Proceedings ..................................................................................... ... 26 Power of Trustee to Control Proceedings .......................................... 26 Limitation on Certificate Owners' Right to Sue ................................ 27 No Obligation with Respect to Performance by Trustee ................... 27 No Liability to Owners for Payment ................................. ................. 27 No Responsibility for Sufficiency ..................................................... 27 Indemnification of Trustee ................................................................. 27 ARTICLE VIII. THE TRUSTEE .................. ................................ ...................... ..................... 28 Section 8.01.
Section 8.02.
Section 8.03 .
Section 8.04.
Section 8.05.
Section 8.06.
Employment of Trustee ........... .. ......................................................... 28 Acceptance of Employment .. ............................ .................. ........ ....... 28 Trustee, Duties, Removal and Resignation ......... ............................ ... 28 Merger or Consolidation of Trustee ...... ............................................. 29 Compensation of the Trustee ............................................................. 29 Protection of the Trustee ................ .................................................... 30 ARTICLE IX. AMENDMENT OF TRUST AGREEMENT ............................... ................. 32 Section 9.01.
Section 9.02.
Section 9.03 .
Section 9.04.
Amendments Permitted ...................................................................... 32 Endorsement or Replacement of Certificates After Amendment or Supplement ..................... ............................................................... 33 Amendment of Particular Ce11ificates .. .......................................... ... 33 Notice to Rating Agencies ......... ... .................................. ...... .......... ... 33 II
•
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ARTICLE X. DEFEASANCE .............................................................................................. 33 Section 10.01 .
Section 10.02.
Section 10.03.
Discharge of Trust Agreement.. ......................................................... 33 Deposit of Money or Securities with Trustee .................................... 34 Unclaimed Moneys ............................................................................ 34 ARTICLE XI. BOND INSURANCE .................................................................................... 35 Section 11.01.
Section l 1.02.
Section 11.03.
Section 11 .04.
Section 11.05.
Section 11.06.
Section 11.07.
Section 11 .08.
Section 11.09.
Amendments Requiring Consent of Bond Insurer ............................. 35 Approval of Any Reorganization ....................................................... 35 Provisions Relating to Remedies Upon an Event of Default.. ........... 35 Notice to Bond Insurer ....................................................................... 35 Defeasance Provisions ....................................................................... 36 Payment Procedure ............................................................................ 37 Trustee-Related Provisions .. ............................................................. . 38 Bond Insurer as Third Party Beneficiary ........................................... 38 Parties Interested Herein .................................................................... 38 ARTICLE XII. MISCELLANEOUS ........................................................................ ............. . 39 Section 12.01.
Section 12.02.
Section 12.03.
Section 12.04.
Section 12.05.
Section 12.06.
Section 12.07 .
Section 12.08.
Section 12.09.
Section 12. l 0.
Section 12. 1 l.
Section 12.12.
Section 12.13.
Section 12.14.
Benefits of Trust Agreement Limited to Parties ................................ 39 Successor Deemed Included in all References to Predecessor .......... 39 Execution of Documents by Owners ................................. ................ 39 Disqualified Certificates ............................................................. ....... 39 Waiver of Personal Liability .......... ............................ ........................ 40 Acquisition of Certificates by Purchaser; Destruction of Certificates ..... ............................... .. ................... ................................ 40 Headings ............................... ..................... ... ....................... .............. 40 Funds and Accounts .............. ........................ ... .................................. 40 Partial Invalidity ............................ ................................... .................. 40 California Law ..................................................... .............................. 41 Effect of Bond fnsurance Policy on Owners ..................... ................. 41 Notices to Bond Insurer .......................... ..... ...................................... 41 Notices ................................................................................. .............. 41 Execution in Counterparts ..................... ..................................... ... ..... 41 EXHIBIT A -- FORM OF CERTIFICATE OF PARTICIPATION ...... .................................... A-l EXHIBIT B -- FORM OF CONSTRUCTION FUND REQUISITION .................................... B- 1 111
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TRUST AGREEMENT
THIS TRUST AGREEMENT, made and entered into as of March 1, 2006 (the ··Agrccmcnf"l. by and among UNION BANK OF CALIFORNIA, N.A., as trustee (the ··Trustee··). a national banking association authorized to exercise trust powers, duly organized and existing under the laws of the United States of America, the BALDY MESA WATER DISTRICT PUBLIC FACILITIES CORPORATION, a California nonprofit public benefit corporation duly organized and existing under the laws of the State of California (the ··Corporation") and the BALDY MESA WATER DISTRICT, a county water district duly organized and existing under and pursuant to the laws of the State of California (the "Purchaser" and the '•District"):
WITNESS ETH:
In consideration of the mutual covenants herein contained and for other valuable consideration, the parties hereto do hereby agree as follows:
ARTICLE I.
DEFl~ITIONS; RULES OF CONSTRUCTION; CONTENTS
OF CERTIFICATES AND OPINIONS; RECITALS
Section 1.01. Definitions. Unless the context otherwise requires, the terms defined in this section shall for all purposes hereof and of any amendment hereof or supplement hereto and of any report or other document mentioned herein or therein have the meanings defined herein. the following definitions to be equally applicable to both the singular and plural forms of any of the tem1s defined herein. All capitalized tenns used herein and not defined herein shall have the meanings ascribed thereto in the Installment Purchase Agreement.
Agreement. The term ·'Agreemenf" means this Trust Agreement, as originally executed or as it may from time to time be amended as provided for herein.
Assignment Agreement. The term ''Assignment Agreement" means that certain Assignment Agreement, dated as of March I, 2006 by and between the Corporation and the Trustee, as originally executed or as it may from time to time be amended or supplemented in accordance \vith its tcm1s.
,Bond Insurance Policy. The term "Bond Insurance Policy" means the municipal bond new issue insurance policy issued by the Bond Insurer that guarantees payment of principal of and interest with respect to the Certificates.
Bond Insurer. The tem1 "Bond Insurer'" means Ambac Assurance Corporation.
Business Day. The term "Business Day" means a day other than: a Saturday or Sunday or a day on which (i) banks located in the State of California, or in any state in which the •
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principal corporate trust office of the Trustee is located are required or authorized to remain closed, and (ii) on which The New York Stock Exchange is closed . fertificatc Year. The term ·•certificate Year" means the period beginning on the date of initial execution and delivery of the Certificates and ending on August l, 2006 and each successive one-year or shorter period thereafter, beginning August 2 until there are no Outstanding Ccrti ficates.
Certificates. The term "Certificates" means the certificates of participation executed and delivered by the Trustee pursuant to this Agreement.
Code. The term "Code" means the Internal Revenue Code of 1986. as amended. and the regulations issued thereunder.
Corporate Trust Office. The term "Corporate Trust Office'' means the corporate trust office of the Trustee at 120 South San Pedro Street, Fourth Floor, Los Angeles, Cali fomia 90012.
Cost of Issuance Fund. The term ''Cost of Issuance Fund" means the fund by that name established in Section 3.04 hereof.
Delivery Date. The term "Delivery Date" means, with respect to the Certificates, the date on which such Certificates were executed and delivered to the original purchaser thereof.
Depository or OTC. The term "Depository'' or "OTC' means The Depository Trust Company, New York, New York, a limited purpose trust company organized under the laws of the State of New York in its capacity as securities depository for the Certificates.
Fair Market Value means the price at which a willing buyer would purchase the investment from a willing sel ]er 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 l 273 of the Tax Code) and, otherwise, the tem1 •'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 the value of which is detem1ined in accordance with applicable regulations under the Tax Code, (ii) the investment is an agreement with specifically negotiated withdrawal or reinvestment provisions and a specifically negotiated interest rate (for example, a guaranteed investment contract, a forward supply contract or other investment agreement) the value of which is detem1ined in accordance with applicable regulations under the Tax Code, (iii) the investment is a United Slates Treasury Security-State and Local Government Series that is acquired in accordance with applicahle regulations of the United States Bureau of Public Debt, or (iv) the investment is the Local Agency Investment Fund of the State of California, but only if at all times during which the investment is held its yield is reasonably expected to be equal to or greater than the yield on a reasonably comparable direct obligation of the United States.
Hazardous Substances. The term "Hazardous Substances" means any substance. waste pollutant or contaminant now or hereafter included in such (or any similar) term under any 45(,84X98 I 2
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federal, state or local law, statutes, code or ordinance or regulation now existing or hereafter enacted or amended .
lnfom1ation Services. The term '·Information Services" means Financial Information, Inc. ·s '"Daily Called Bond Service,'' 30 Montgomery Street, 10th Floor, Jersey City, New Jersey 07302, Attention: Fitch ''Called Bond Department,'' 5250 Center Drive. Suite 150, Charlotte. NC 28217; S&P ··Called Bond Record," 65 Broadway, 16th Floor, New York, New York 10004; and, in accordance with then current guidelines of the Securities and Exchange Commission, such other addresses and/or such other services providing information with respect to called bonds as the Purchaser may designate in a Written Request of the purchaser delivered to the Trnstec.
Installment Payment Date. The term ··rnstallment Payment Date" means the fifteenth day of each January and July or if such day is not a Business Day, the preceding Business Day.
Installment Payment Fund. The term "lnstalJment Payment Fund'' means the fund by that name established in Section 5.02 hereof.
Installment Payments. The term '·Installment Payments" means the Installment Payments payable by the Purchaser pursuant to the Installment Purchase Agreement and in the amounts and at the times set forth in the Installment Purchase Agreement.
Installment Purchase Agreement. The tem1 "Installment Purchase Agreement" means the Installment Purchase Agreement, dated as of March 1, 2006 by and between the Purchaser and the Corporation, as originally executed or as it may from time to time be amended in accordance with its lenns.
I 998 Installment Purchase A§,rrcement. The term "1998 Installment Purchase Agreement" means the Installment Purchase Agreement. dated as of May L 1998, by and between the Baldy Mesa Water District, as Purchaser and the Baldy Mesa Water District Public Facilities Corporation, as Seller, as originally executed or as it may from time to time be amended in accordance with its terms.
2003 Installment Purchase Agreement. The term "'2003 Installment Purchase Agreement" means the Installment Sale Agreement. dated as of November 26, 2003, by and between the Baldy Mesa Water District, as Purchaser and LaSalle Bank National Association, as Seller, as originally executed or as it may from time to time be amended in accordance with its terms.
Interest Payment Date. The term ''Interest Payment Date" means February 1 and August I of each year, commencing August I, 2006.
J_,etter of Representations. The tem1 "Letter of Representations'' means the letter of the Purchaser and the Trustee, if required, delivered to and accepted by the Depository on or prior to delivery of the Certificates as book-entry certificates setting forth the basis on which the Depository serves as depository for such book-entry certificates, as originally executed or as it may be supplemented or revised or replaced by a letter from the Purchaser and the Trustee d~livered to and accepted by the Depository.
3 Nominee. The tenn "Nominee'' means the nominee of the Depository, which may be the • Depository, as dctennined from time to t1me pursuant to Section 2.11 hereof.
Outstanding. The term "Outstanding," when used as of any particular time with reference to Certificates, means (subject to the provisions of Section 12.04) all Certificates theretofore or thereupon executed and delivered by the Trustee except:
(a)
(b)
10.01; and
Certificates canceled by the Trustee or delivered to the Trustee for cancellation; Certificates paid or deemed to have been paid within the meaning of Section (c) Certificates in lieu of or in substitution for which other Cert1ficates shall have been executed and delivered by the Trustee pursuant to Section 2.10.
Owner. Unless the context clearly indicates otherwise. the term ''Owner" or ''Certificate Ov.-ner'' or ··owner of Certificates" or any similar term, when used with respect to the Certificates, means any person who shall be the registered owner of any Outstanding Certificate as shown on the registration books maintained by the Trustee pursuant to Section 2.08.
Participants. The term ''Participants" means those broker-dealers, banks and other financial 1nstitutions from time to time for which the Depository holds book-entry certificates as securities depository.
Permitted Investments means any of the following that at the time of investment are legal investments under the laws of the State for the moneys proposed to be invested therein:
A. The Insurer will allow the following obligations to be used as Permitted Investments for all purposes, including defcasance mvestments in refunding escrow accounts. (I) Cash (insured at all times by the Federal Deposit Insurance Corporation), (2) Obligations of, or obligations guaranteed as to principal and interest by, the U.S. or any agency or instrumentality thereof, when such obligations are backed by the full faith and credit of the l.J .S. including:
• U.S. treasury obligations
• All direct or fully guaranteed obligat10ns
• Farmers Home Administration
• General Services Administration
• Guaranteed Title XI financing
• Government National Mortgage Association (GNMA)
• State and Local Government Series
Any security used for dcfcasance must provide for the timely payment of principal and interest and cannot be callable or prcpayable prior to maturity or earlier redemption of the rated debt (excluding securities tha1 do not have a fixed par value and/or whose tenns do not promise a fixed dollar amount at maturity or call date).
4 B.
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The Insurer will allow the following Obligations to be used as Permitted Investments for all purposes other than dcfeasancc investments in refunding escrow accounts . ( 1) Obligations of any of the following federal agencies which obligations represent the full faith and credit of the United States of America, including:
-Export-Import Bank
-Rural Economic Community Development Administration
-U.S. Maritime Administration
-Small Business Administration
-U.S. Department of Housing & Urban Development (PIIAs) -Federal Housing Administration
-Federal Financing Bank
(2) Direct obligations of any of the following federal agencies which obligations arc not fully (l)
guaranteed by the full faith and credit of the United States of America:
-Senior debt obligations issued by the Federal National Mortgage Association (FNMA) or Federal Home Loan Mortgage Corporation (FHLMC). -Obligations of the Resolution Funding Corporation (REFCORP) -Senior debt obligations of the Federal Home Loan Bank System -Semor debt obligations of other Government Sponsored Agencies approved by the Insurer
U.S. dollar denominated deposit accounts, federal funds and bankers' acceptances with domestic commercial banks which have a rating on their short term certificates of deposit on the date of purcha~e of "P-1 '' by Moody's and "A-I'' or ''A-I+" by S&P and maturing not more than 360 calendar days after the date of purchase. (Ratings on holding companies are not considered as the rating of the bank); (--l) Commercial paper which is rated at the time of purchase in the single highest classification, "'P- I,. by Moody's and "A-1 +'' by S&P and which matures not more than 270 calendar days after the date of purchase;
(5) Investments in a money market fund rated "AAAm" or "AAAm-G" or better by S&P including such funds for which the Trustee or an affiliate provides investment advice or other services;
(6) Pre-refunded Municipal Obligations defined as follows: any bonds or other obligations of any state of the United States of America or of any agency, instrumentality or local governmental unit of any such state which are not callable at the option of the obligor prior to maturity or as to which irrevocable instructions have been given by the obligor to call on the date specified in the notice; and
(A) which are rated, based on an irrevocable escrmv account or fund (the "escrow"), in the highest rating category of Moody's or S&P or any successors thereto; or (B) (1) which are fully secured as to principal and interest and redemption premium, if any, by an escrow consisting only of cash or obligations described in paragraph A(2) above, which cscrmv may be applied only to the payment of such principal of and interest and redemption premium, if any, on such bonds or other obligations on the maturity date or dates thereof or the specified redemption date or dates pursuant to 5 •
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(7)
( I 0)
such irrevocable instructions, as appropriate, and (ii) which escrow is sufficient, as verified by a nationally recognized independent certified public accountant, to pay principal of and interest and redemption premium, if any, on the bonds or other obligations described in this paragraph on the maturity date or dates specified in the irrevocable instructions referred to above, as appropriate; Pre-refunded Municipal Obligations meeting the requirements of subsection (B) hereof may be used as Permitted Investments for annual appropriation lease transactions.
Municipal Obligations rated ·'Aaa/AAA" or general obligations of States with a rating of "A2/A" or higher by both Moody's and S&P.
Investment Agreements approved in writing by the insurer (supported by appropriate opinions of counsel):
The Local Agency Investment Fund ("LAIF') of the State of California, created pursuant to Section 16429. I of the California Government Code; and other fonns of investments (including repurchase agreements) approved in writing by the insurer.
C. The value of the above investments shall be determined as follows:
a)
h)
c)
For the purpose of determining the amount in any fund, all Permitted Investments credited to such fund shall be valued at fair market value. The Trustee shall determine the fair market value based on accepted industry standards and from accepted industry providers. Accepted industry providers shall include but are not limited to pricing services provided by Financial Times Interactive Data Corporation, Merrill Lynch, Citigroup Global Markets Inc., Bear Steams, or Lehman Brothers.
As to certificates of deposit and bankers' acceptances: the face amount thereof, plus. accrued interest thereon; and
As to any investment not specified above: the value thereof established by prior a6>Teement among the Issuer_ the Trustee. and the Insurer.
Prepayment Price. The term ·'Prepayment Price" means, with respect to any Certificate (or portion thereof), the principal amount with respect to such Certificate (or portion thereof) plus the applicable premium, if any, payable upon prepayment thereof pursuant to the provisions of such C'erti ficate and this Agreement.
j>rojc~!- The term "Project" means the Water System.
()uali lied Surety Bond means an irrevocable standby or direct-pay letter of credit or surety bond issued by a commercial bank or insurance company and deposited with the Trustee pursuant to Section 5.04 pro\·ided that all of the following requirements are met: (i) the longterm credit rating of such bank or insurance company at the time of delivery of such letter of credit or surety bond is rated in one of the two highest rating categories by Moody's and S&P; (ii) such letter of credit or surety bond has a tem1 of at least twelve (12) months; (iii) such letter o C credit or surety bond has a stated amount at least equal to the portion of the Reserve Requirement with respect to which funds arc proposed to be released pursuant to Section 5.04; and (iv) the Trustee is authorized pursuant to the tenns of such letter of credit or surety bond to 6 •
draw thereunder an amount equal to any deficiencies that may exist from time to time in the amounts available to repay the principal of and interest on the Certificates .
Record Date. The tenn ''Record Date" means. with respect to any Interest Payment Date for the Certi !icatcs, the first ( t st) day of the calendar month preceding such Interest Payment Date, whether or not such day is a Business Day.
Reserve Fund. The term ''Reserve Fund" means the fund by that name established in Section 5.04 hereof.
Reserve Requirement. The tenn "Reserve Requirement'' or ''Series 2006 Reserve Fund Requirement'" means, as of any date of calculation, the least of (i) ten percent ( 10%) of the proceeds (within the meaning of Section 148 of the Code) of the Certificates; (ii) 125% of average Installment Payments for that and all subsequent Certificate Years; or (iii) maximum aggregate installment Payments for that or any subsequent Certificate Year.
S&P. The tem1 '"S&P'' means Standard & Poor's, a division of McGraw-Hill, Inc., a corporation organized and existing under the laws of the State of New York, its successors and their assigns, or, if such corporation shall be dissolved or liquidated or shall no longer perfonn the functions of a securities rating agency, any other nationally recognized securities rating agency designated by the Purchaser.
Securities Depositories The term ''Securities Depositories" means The Depository Trust Company, 55 Water Street, 50th Floor, New York, New York 10041-0099, Attention: Call Notification Department, Fax (212) 855-7232; and, in accordance with then current guidelines of the Securities and Exchange Commission, such other addresses and/or such other securities depositories as the Purchaser may designate in a Written Request of the Purchaser delivered to the Trustee.
Special Counsel. The term ''Special Counsel'' means (a) Fulbright & Jaworski L.L.P., or (b) any other attorney or firm of attorneys appointed by or acceptable to the Purchaser of nationally recognized standing in matters pertaining to the tax-exempt nature of interest on bonds issued by states and their political subdivisions duly admitted to the practice of law before the highest court of any state of the United States of America or the District of Columbia.
Stat~. The term ''State'' means the State of California.
Statement of the Coa,oration or Purchaser. The term "Statement of the Corporation or Purchaser" means a statement signed by or on behalf of (a) the Corporation by its President or a Vice President or (b) the Purchaser by the General Manager, President or Vice President of the Board of Directors or by any person who is specifically authorized by resolution of the Purchaser (a certified copy of which has been delivered to the Trustee) to sign or execute such a document on its behalf. ff and to the extent required by the provisions of Section 1.03, each Statement of the Corporation or Purchaser shall include the statements provided for in Section 1.03.
Trustee. The term ''Trustee'" means Union Bank of California, N.A., a national banking association, duly organized and existing under and by virtue of the laws of the United States of 7 •
America having a corporate tmst office in Los Angeles, California, or its successor as Trustee hereunder .
Water Fund. The tenn ;.Water Fund'' means the existing fund by that name established and held by the District with respect to the Water System.
Water System. The term ''Water System'' shall have the meaning given such term in the Im.tallment Purchase Agreement.
Written Consent of the Corporation or Purchaser, Written Order of the Corporation or Purchaser, Written Request of the Corporation or Purchaser, Written Requisition of the Corporation or Purchaser. The terms ';Written Consent of the Corporation or Purchaser," "Written Order of the Corporation or Purchaser,'' "Written Request of the Corporation or Purchaser." and "Written Requisition of the Corporation or Purchaser" mean, respectively. a written consent, order, request or requisition signed by or on behalf of (a) the Corporation by its President or a Vice President or (b) the Purchaser by the General Manager, President or Vice President of the Board of Directors or by any person who is specifically authorized by resolution of the Purchaser (a certified copy of which has been delivered to the Trustee) to sign or execute such a document on its behalf.
Section 1.02. Rules of Construction. Words of any gender shall be deemed and construed to include all genders, and words importing persons shall include corporations and associations, including public bodies, as well as natural persons. Unless the context otherwise indicates, words importing the singular number shall include the plural number and vice versa.
Section 1.03. Content of Statements and Opinions. Every statement or opinion with respect to compliance with a condition or covenant provided for in this Agreement, including each Statement of the Corporation, shall include (a) a statement that the person or persons making or giving such statement or opinion have read such covenant or condition and the definitions herein relating thereto; (b) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such statement or opinion arc based; ( c) a statement that, in the opinion of the signers. they have made or caused to be made such examination or investigation as is necessary to enable them to express an informed opinion as to whether or not such covenant or condition has been complied with; and ( d) a statement as to whether, in the opinion of the signers, such condition or covenant has been complied with.
Any such statement or opinion made or given by an officer of the Corporation may be based, insofar as it relates to legal or accounting matters, upon a statement or opinion of or representations by counsel or accountants, unless such officer knows, or in the exercise of reasonable care should have known, that the statement or opinion or representations with respect to the matters upon which his statement or opinion may be based, as aforesaid, are erroneous.
Any such statement or opinion made or given by counsel or accountants may be based, insofar as it relates to factual matters, upon infomiation with respect to which is in the possession of the Corporation, or upon the statement or opinion of or representations by an officer or officers of the Corporation, unless such counsel, accountant or consultant knows, or in the exercise of 8 •
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reasonable care should have known, that the statement or opinion or representations with respect to the matters upon which his opinion may be based as aforesaid are erroneous .
Section 1.04. Recitalt
(a) Installment Purchase Agreement. The Corporation and the District have entered into the Installment Purchase Agreement whereby the Corporation has ab>reed to sell to the Purchaser the Project, and the Purchaser has agreed to purchase the Project from the Corporation. (b) Installment Payments. Under the Installment Purchase Agreement, the Purchaser is obligated to pay to the Corporation or its assigns Installment Payments for the purchase of the Project.
( c) Assignment Agreement. The Corporation has assigned and transferred all of its rights, title and interest in the Installment Purchase Agreement ( other than its rights to indemni ft cation pursuant to Section 10.14 thereof) to the Trustee, pursuant to the Assignment Agreement; in consequence, the Trustee shall pursuant to this Trust Agreement execute and deliver the Certificates, each evidencing an undivided ownership interest in the Installment Purchase Agreement, including in the Installment Payments to be made thereunder, in the aggregate face amount equal to the aggregate of Principal Components of Series 2006 Installment Payments, and to apply the proceeds of sale of such interests to the payment by the Trustee, as assignee of the Corporation, of the purchase price of the Water System. ( d) Conditions Precedent Satisfied. The Purchaser and the Corporation hereby certify that all acts, conditions and things required by law to exist, happen and be performed precedent to and in connection with the execution and entering into of this Ab>reement have happened and have been perfonned in regular and due time, fom1 and manner as required by law, and the parties hereto are now duly empowered to execute and enter into this Agreement.
ARTICLE II.
CERTIFICATES; TER1\1S AND PROVISIONS
Section 2.01. Preparation of Certificates. The Trustee is hereby authorized, upon Written Order of the Corporation, to execute certificates of participation, to be designated --Parity Certificates of Participation (Water System Improvement Project) Series 2006'' in an aggregate principal amount of Thirteen Million Seventy Thousand Dollars ($13,070,000) evidencing undivided ownership interests in the Installment Purchase Agreement, including in the Installment Payments to be paid by the Purchaser thereunder.
Section 2.02. Denominations; Medium and Place of Payment; Dating. The Certificates shall he delivered in the fonn of fully registered Certificates in the denomination of $5,000 each or any integral multiple thereof; provided that no Certificate shall have principal represented thereby maturing in more than one year. The Certificates sha\1 be payable in lawful money of the United States of America.
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The payments of principal and Prepayment Price with respect to all Certificates shall be made upon presentation and surrender thereof at the Corporate Trust Office of the Trustee .
Payments of interest with respect to Certificates shall be payable by check of the Trustee mailed by first class mail on the Interest Payment Date of such Certificates to the respective Certificate Owners of record thereof as of the close of business on the Record Date at the addresses shown on the books required to be kept pursuant to Section 2.08, or, upon the request of an Owner of at least $1,000,000 in aggregate principal amount of Certificates, by wire transfer in immediately available funds to an account in the United States designated by such Owner in writing to the Trnstcc prior to the Record Date, except in each case, that, if and to the extent that there shall be a default in the payment of the interest due on such Interest Payment Date, and such defaulted interest is subsequently received by the Trustee, such defaulted interest shall be paid to the Owners in whose names any such Certificates are registered at the close of business on a special record date as determined by the Tmstce.
The Certificates shall be dated the Delivery Date. Interest with respect to Certificates shall be accrued from the Interest Payment Date preceding their date of execution, unless such date shall be after a Record Date and on or before the succeeding lnterest Payment Date, in which case interest shall be accrued from such Interest Payment Date, or unless such date shall be on or before the first Record Date, in which case interest shall be accrued from the Delivery Date, provided, however, that if, as shown by the records of the Trustee, interest represented by the Certificates shall be in default, Certificates executed in exchange for Certificates surrendered for transfer or exchange shall represent interest from the last date to which interest has been paid in full or duly provided for with respect to the Certificates, or, if no interest has been paid or duly provided for with respect to the Certificates, from the Delivery Date.
Section 2 .03. Payment of Principal and Interest with Respect to Certificates. (a) Payments of principal and interest with respect to the Certificates shall be made on August in the years and in the amounts and with an interest component as provided in subsection (b) below at the rates (based on a 360-day year of twelve (12) thirty-day months), as follows:
Maturity Date
(August I) Principal Amount Interest Rate
2007 $230,000 3.20%
2008 240,000 3.30
2009 245,000 3.40
2010 255,000 3.45
2011 265,000 3.50
2012 270,000 3.55
2016 1,205,000 4.50
201 7 335,000 3.90
2018 350,000 4.00
2019 365,000 4.00
2020 380,000 4.05
2021 395,000 4. 10
2026 2,230,000 4.35
2029 1,590,000 4.50
2036 4,715,000 5.00
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• Principal or Prepayment Price due with respect to the Certificates at maturity or •
prepayment thereof shall, to the extent of the aggregate principal amount stated upon the Certificates, represent the sum of those portions of the Installment Payments designated as principal coming due on the Installment Payment Dates immediately preceding August I in each year.
(h) Interest with respect to the Certi fie ates shall be payable on each Interest Payment Date to and including the date of maturity or prior prepayment. Said interest shall represent the sum of those portions of the Installment Payments designated as interest coming due on the Installment Payment Dates, at the rates set forth in subsection (a) above.
Section 2.04. Form of Certificates. The Certificates and the fonn of assignment to appear thereon shall be in substantially the fonn set forth in Exhibit A hereto with necessary or appropriate variations, omissions and insertions as pennitted or required by this Agreement.
Section 2.05. Execution. The Certificates shall be executed by and in the name of the Trustee, as Trustee under this Agreement, by the manual signature of an authorized officer or signatory of the Trustee.
Section 2.06. Transfer of Certificates. Any Certificate may, in accordance with its terms, be transferred, upon the books required to be kept pursuant to the provisions of Section
2.08, by the person in whose name it is registered, in person or by such person's duly authorized attorney, upon surrender of such Certificate for cancellation at the Corporate Trust Office of the Trustee, accompanied by delivery of a duly executed written instrument of transfer in a fonn acceptable to the Trustee.
Whenever any Certificate or Certificates shall be surrendered for transfer, the Trustee shall execute and deliver a new Certificate or Certificates of the same maturity for a like aggregate principal amount and interest rate. The Trustee may require the payment by any Certificate Owner requesting any such transfer of any tax or other governmental charge required to be paid with respect to such transfer. Following any transfer of Certificates the Trustee shall cancel and destroy the Certificates it has received.
Section 2.07. Exchange of Certificates. Certificates may be exchanged upon surrender thereof at the Corporate Trust Office of the Trustee, for a like aggregate principal amount of Certificates of other authorized denominations of the same maturity and interest rate. The Trustee may require the payment by the Owner requesting such exchange of any tax or other governmental charge required to be paid with respect to such exchange. Following any exchange of Certificates the Trustee shall cancel and destroy the Certificates it has received.
The Trustee shall not be required to register the exchange or transfer pursuant to Section
2.06 hereof. of any Certificate (a) within 15 days preceding selection of Certificates for prepayment or (b) selected for prepayment.
Section 2.08. Certificate Registration Books. The Trustee shall keep or cause to be kept, at its Corporate Trust Office, sufficient books for the registration and transfer of the Certificates, 11 •
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which shall upon reasonable prior notice and at all reasonable times be open to inspection by the Corporation or the Purchaser; 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 said books, Certificates as hcrcinbefore provided.
The person in whose name any Ce1tificate shall be registered shall be deemed the Owner thereof for all purposes hereof, and all payments with respect to such Certificate shall be made only to or upon the order in writing of such registered Owner, which payments shall be valid and effectual to satisfy and discharge liability upon such Certificate to the extent of the sum or sums so paid.
Section 2.09. Temporary Certificates. The Certificates may be initially delivered in temporary form exchangeable for definitive Certificates when ready for delivery. The temporary Certificates may be printed, lithographed or typewritten, shall be of such denominations as may be detem1incd by the Trustee, shall be in registered form and may contain such reference to any of the provisions of this Agreement as may be appropriate. Every temporary Certificate shall be executed by the Trustee upon the same conditions and in substantially the same manner as the definitive Certificates. If temporary Certificates are initially delivered, the Purchaser shall furnish definitive Certificates without delay, and thereupon the temporary Certificates may be sunendcred, for cancellation, in exchange therefor at the Corporate Trust Office of the Trustee, and the Trustee shall deliver in exchange for such temporary Certificates an equal aggregate principal amount of definitive Certificates of the same maturity or maturities. Until so cxchang<.:d, the temporary Certificates shall be entitled to the same benefits under this Agreement as definitive Certificates executed and delivered hereunder.
Section 2.10. Certificates Mutilated, Lost, Destroyed or Stolen. If any Certificate shall become mutilated, the Trustee shall execute and deliver a new Certificate of like tenor, maturity and principal amount in exchange and substitution for the Certificate so mutilated, but only upon surrender to the Trustee at its Corporate Trust Office, of the Certificate so mutilated. Every mutilated Certificate so surrendered to the Trustee shall be canceled by it and destroyed.
If any Certificate shall be lost, destroyed or stolen, evidence of such loss, destruction or theft may be submitted to the Trustee, and, if such evidence is satisfactory to the Trustee and indemnity satisfactory to the Trustee shall be given indemnifying the Trustee, the Corporation and the Purchaser, the Trustee, at the expense of the Certificate Owner, shall execute and deliver a nev,· Certificate of like tenor, maturity and principal amount, and numbered as the Trustee shall dctem1ine, in lieu of and in substitution for the Certificate so lost, destroyed or stolen. The Trustee may require reasonable payment for preparing each nev,,: Cenificate executed under this Section and of the expenses that may be incurred by the Trustee under this Section. Any Certificate executed under the provisions of this Section in lieu of any Certificate alleged to be lost, destroyed or stolen shall be equally and propo1tionately entitled to the benefits of this Agreement with all other Certificates secured by this Agreement. The Trustee shall not be required to treat both the original Certificate and any replacement Certificate as being Outstanding for the purpose of determining the principal amount of Certificates that may be executed hereunder or for the purpose of determining any percentage of Certificates Outstanding hereunder, but both the original and replacement Certificate shall be treated as one and the same .
Notwithstanding any other provision of this Section, in lieu of delivering a new Certificate for a 12 •
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Certificate that has been mutilated, lost, destroyed or stolen and that has matured or been selected for prepayment, the Trustee may make payment of such Certificate upon receipt of indemnity satisfactory to the Trustee.
Section 2.11. Book-Entry System; Limited Obligation. The Certificates shall be initially executed and delivered in the fonn of a separate single folly registered Certificate (which may be typewritten) for each of the maturities of the Certificates. Upon initial execution and delivery, th<: ownership of each such global Certificate shall be registered in the Certificate register in the name of the Nominee as nominee of the Depository. Except as provided in Section 2.13 hereof, all of the Outstanding Certificates shall be registered in the Certificate Register kept by the Trustee in the name of the Nominee and the Certificates may be transferred, in whole but not in part, only to the Depository, to a successor Depository or to another nominee of the Depository or of a successor Depository. Each global Certificate shall bear a legend substantially to the following effect: "UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY (AS DEFINED IN THE TRUST AGREEMENT)
TO THE TRUSTEE FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT,
AND ANY CERTIFICATE EXECUTED AND DELIVERED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY), ANY TRANSFER, PLEDGE,
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.''
With respect to Certificates registered in the Certificate register in the name of the Nominee. the Purchaser and the Trustee shall have no responsibility or obligation to any Depository Participant or to any person on behalf of which such a Depository Participant holds a beneficial interest in the Certificates. Without limiting the immediately preceding sentence, the Purchaser and the Trustee shall have no responsibility or obligation with respect to (a) the accuracy of the records of the Depository, the Nominee or any Depository Participant with respect to any beneficial ownership interest in the Certificates, (b) the delivery to any Depository Participant, beneficial owner or any other person, other than the Depository, of any notice with respect to the Certificates, including any prepayment notice, (c) the selection by the Depository and the Depository Participants of the beneficial interests in the Certificates to be prepaid in part, or ( d) the payment to any Depository Participant, beneficial owner or any other person, other than the Depository, of any amount with respect to the Certificates. The Purchaser and the Trustee may treat and consider the person in whose name each Certificate is registered in the Certificate register as the holder and absolute Owner of such Certificate for the purpose of pi.!ymcnts with respect to the Certificate, for the purpose of giving prepayment notices with respect to the Certificate and other notices with respect to the Certificate, and for all other purposes whatsoever, including. without limitation, registering transfers with respect to the Certificate.
The Trustee shall make payments in respect of the Certificates only to or upon the order of the respective Certificate Owners, as shown in the Certificate register kept by the Trustee, or their respective attorneys duly authorized in writing, and all such payments shall be valid 13 •
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hereunder with respect to the payment of principal, premium, if any, and interest with respect to the Certificates to the extent of the sum or sums so paid. No person other than a Certificate Owner, as shown in the Certificate register, shall receive a Certificate evidencing the obligation to make payments of principal, premium, if any, and interest with respect to such Certificate pursuant to this Agreement. Upon delivery by the Depository to the Trustee and the Purchaser of written notice to the effect that the Depository has determined to substitute a new nominee in place of the l\'ominee, and subject to the provisions herein with respect to Record Dates, the word Nominee in this Agreement shall refer to such new nominee of the Depository.
Section 2.12. Representation Letter. In order to qualify the Certificates for the Depository's book-entry system, the Authorized Representative is hereby authorized to execute, countersign and deliver on behalf of the Purchaser to such Depository a letter from the Purchaser representing such matters as shall be necessary to so qualify the Certificates (the "Representation Letter"). Thi: execution and delivery of the Representation Letter shall not in any way limit the provisions of Section 2.11 hereof or in any other way impose upon the Purchaser or the District any obligation whatsoever with respect to persons having beneficial interests in the Certificates other than the Owners, as shown in the Certificate Register kept by the Trustee. ln the written acceptance by the Trustee of the Representation Letter, the Trustee shall agree, and hereby agrees, to take all actions necessary for all representations of the Trustee in the Representation Letter with respect to the Trustee to at all times be complied with. In addition to the execution and delivery of the Representation Letter, the Purchaser Representative and all other officers of the Purchaser, and their respective deputies and designees, each is hereby authorized to take any other actions, not inconsistent with this Agreement, to qualify the Certificates for the Depository's book-entry program .
Section 2.13. Transfers Outside Book-Entry System. If at any time the Depository notifies the Purchaser that it is unwilling or unable to continue as Depository with respect to the Ccrti ficatcs or if at any time the Depository shall no longer be registered or in good standing under the Securities Exchange Act of 1934 or other applicable statute or regulation and a successor Depository is not appointed by the Purchaser within 90 days after the Purchaser receives notice or becomes aware of such condition, as the case may be, Section 2.11 hereof shall no longer be applicable and the Trustee shall execute and deliver certificates representing the Certificates as provided below. In addition, the Purchaser may determine at any time that the Ccrti ficates shall no longer be represented by global certificates and that the provisions of Section 2.11 hereof shall no longer apply to the Certificates. In any such event the Trustee shall execute and deliver certificates representing the Certificates as provided below. Certificates executed and delivered in exchange for global certificates pursuant to this Section 2.13 shall be registered in such names and delivered in such Authorized Denominations as the Depository, pursuant to instructions from the Depository Participants or otherwise, shall instruct the Purchaser and the Trustee. The Trustee shall deliver such certificates representing the C crti ficates to the persons in whose names such Certi fie ates are so registered.
If the Purchaser determines to replace the Depository with another qualified securities depository, the Purchaser shall prepare or cause to be prepared a new fully-registered global certificate for each of the maturities of the Certificates, registered in the name of such successor or substitute securities depository or its nominee, or make such other arrangements as are 14 acceptable to the Purchaser, the Trustee and such securities depository and not inconsistent with • the terms of this Agreement.
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Section 2.14. Payments and Notices to the Nominee. Notwithstanding any other provision of this Agreement to the contrary, so long as any Certificate is registered in the name of the Nominee, all payments with respect to such Certificate and all notices with respect to such Certificate shall be made and given, respectively, as provided in the Representation Letter or as otherwise instructed by the Depository.
Section 2.15. Initial Depository and Nominee. The initial Depository under this Agreement shall be DTC. The initial Nominee shall be Cede & Co., as nominee of OTC.
ARTICLE Ill.
DELIVERY OF CERTIFICATES; COST OF ISSUANCE FUND;
CONSTRUCTION FUND
Section 3.01. Delivery of Certificates. The Trustee is hereby authorized to execute and deliver Certificates in an aggregate principal amount of $13,070,000, upon the Written Order of the Corporation.
Section 3.02. Application of Proceeds of Certificates and Other Moneys. The proceeds received from the sale of the Certificates shall be applied by the Trustee to the purchase of the Project from the Purchaser. The Purchaser hereby directs that such payment be applied in the following manner: (a) deposit in the Cost of Issuance Fund $143,979.72; (b) deposit in the Construction Fund $ I 2,000,000; and (c) deposit in the Reserve Fund $816,500.00 (the initial Reserve Requirement).
Section 3.03. Validity of Certificates. The validity of the authorization and delivery of the Certificates is not dependent on and shall not be affected in any way by any proceedings taken by the Purchaser or the Trustee with respect to or in connection with the Installment Purchase Agreement. The recital contained in the Certificates that all acts, conditions and things required by the Constitution and statutes of the State of California and this Agreement to exist, to have happened and to have been performed precedent to and in the delivery thereof do exist, have happened and have been performed in due time, fonn and manner as required by law shall be deemed to be a statement to the Corporation and not of the Trustee and shall be conclusive evidence of their validity and of compliance with the provisions of law in their delivery.
Section 3.04. Cost of Issuance Fund. There is hereby established with the Trustee the Cost of Issuance Fund, which the Trustee shall establish and maintain and hold in trust separate and apart from other funds held by it. The moneys ,n the Cost of Issuance Fund shall be used and withdrawn by the Trustee to pay any Cost of Issuance upon submission of Written Requisitions of the Purchaser stating the person to whom payment is to be made, the amount to be paid, the purpose for which the obligation was incurred, that such payment is a proper charge against said fund and that payment for such charge has not previously been made. Upon ninety days afler the delivery of the Certificates, or upon the earlier Written Request of the Purchaser, all amounts remaining in the Cost of Issuance Fund shall be transferred by the Trustee to the 15 •
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Installment Payment Fund for application in accordance with Section 5.02. Upon such transfer, the Cost of Issuance Fund shall be closed.
Section 3.05. Construction Fund. There is hereby established with the Trustee the Construction Fund, which the Trustee shall establish and maintain and hold in trust separate and apart from other funds held by it. The moneys in the Construction Fund shall be used and withdrawn by the Trustee to pay capital improvements to the Water System upon receipt by the Trustee of a Written Request of the Purchaser in the form of Exhibit B hereto certifying with respect to each disbursement: ( i) the requisition number; (ii) the name and address of the person, lim1 or corporation to whom payment will be made; (iii) the amount to be disbursed; (iv) that each obligation mentioned in the requisition is a proper charge against the Construction Fund and has not previously been disbursed by the Trustee from amounts in the Construction Fund; and (v) in reasonable detail the nature of the obligation; and shall be accompanied by a bill or statement of account (if any) for each obligation. Upon completion of the Project, as indicated by a Written Request of the Purchaser, all amounts remaining in the Construction Fund shall be transferred by the Trustee to the Installment Payment Fund for application in accordance with Section 5.02. Upon such transfer, or after all proceeds in the Construction Fund have been depleted, the Construction Fund shall be closed.
ARTICLE IV.
PREPAYMENT OF CERTIFICATES
Section 4.01. Terms of Prepayments.
(a) The Certificates maturing on or after August 1, 2017 are subject to optional prepayment prior to maturity upon notice to the Trustee on August 1, 2016, or any date thereafter, from any source of available funds, as a whole or in part, at a price of par together with interest accrued thereon to the date of prepayment, without premium. (b) The Certificates shall be subject to prepayment prior to their respective stated maturities, as a \\'hole on any date or in part on any Interest Payment Date, in the order of stated maturity as directed by the Purchaser in a Written Request of the Purchaser provided to the Trustee at least 60 days prior to the prepayment date, or (in the event the Purchaser has not directed the order of stated maturity, in inverse order of stated maturity), and by lot within each stated maturity in integral multiples of $5,000, from prepaid Installment Payments made by the Purchaser from Net Proceeds, upon the terms and conditions of, and as provided for in, Section
6.10 of this Agreement, and Sec lions 6.8 and 6.14 of the Installment Purchase Agreement (provided that such prepayment shall occur on the next Interest Payment Date subsequent to such transfer with respect to which timely notice of prepayment can be provided as required hereunder) at a Prepayment Price equal to the principal amount thereof plus accrued interest thereon to the date fixed for prepayment, without premium. ( c) The Certificates maturing on August 1, 2016, are to be called for mandatory sinking fund prepayment prior to such maturity dates in part, by lot, at 100% of the principal • amount thereof plus accrued interest to the prepayment date, as follows:
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Mandatory Prepayment Dates
(August 1)
2013
2014
2015
20 l 6 (maturity)
Principal Amount
$280,000
295,000
310,000
320,000
( d) The Certificates maturing on August 1, 2026 are to be called for mandatory sinking fund prepayment prior to such maturity dates in part, by lot, at 100% of the principal amount thereof plus accrued interest to the prepayment date, as follows:
Mandatory Prepayment Dates
(August I)
2022
2023
2024
2025
2026 (maturity)
Principal Amount
$410.000
425.000
445,000
465.000
485,000
(c) The Certificates maturing on August 1, 2029 are to be called for mandatory sinking fund prepayment prior to such maturity dates in part, by lot, at 100% of the principal amount thereof plus accrued interest to the prepayment date, as follows:
Mandatory Prepayment Dates
(August 1)
2027
2028
2029 (maturity)
Principal Amount
$505,000
530,000
555,000
( f) The Certificates maturing on August l, 2036 arc to be called for mandatory sinking fund prepayment prior to such maturity dates in part, by lot, at I 00% of the principal amount thereof plus accrued interest to the prepayment date, as follows:
4568489~ ·'
Mandatory Prepayment Dates
(August l)
2030
2031
2032
2033
2034
2035
2036 (maturity)
17 Principal Amount
$580,000
605,000
640,000
670,000
705,000
740,000
775,000
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In the event of a partial prepayment of Certificates pursuant to Section 4.01(a) or 4.0l(b) above, the foregoing annual mandatory prepayments shall be reduced in equal percentages, as nearly as practicable, provided that the reductions shall be made in multiples of $5,000. The Purchaser shall provide the Trustee with the amended mandatory prepayment schedule calculated as set forth above.
Section 4.02. Selection of Certificates for Prepayment. Whenever less than all of the Certificates arc called for prepayment, the Trustee shall select the Certificates or portions thereof to be prepaid from the Outstanding Certificates in accordance with Section 4.01 hereof. The Trustee shall promptly notify the Purchaser in writing of the numbers of the Certificates or portions thereof so selected for prepayment.
Section 4.03. Notice of Prepayment. Notice of prepayment shall be mailed, first class postage prepaid, to the respective Owners of any Certificates designated for prepayment at their addresses appearing on the Certificate registration books and to the Information Services and by registered or certified or overnight mail to the Securities Depositories at least thirty days but not more than sixty days prior to the prepayment date.
Each notice of prepayment shall state the date of notice, the prepayment date, the place or places of prepayment and the prepayment price, shall designate the maturities, CUSIP numbers, if any, and, if less than all of any such maturity is to be prepaid, the serial numbers of the Certificates of such maturity to be prepaid by giving the individual number of each Certificate or by stating that all Certificates between two stated numbers, both inclusive, have been called for prepayment and, in the case of Certificates to be prepaid in part only, the respective portions of the principal amount thereof to be prepaid. Each such notice shall also state that on said date there will become due and payable on each of said Certificates the Prepayment Price thereof or of said specified portion of the principal represented thereby in the case of a Certificate to be prepaid in part only, together with interest accrued with respect thereto to the prepayment date, and that (provided that moneys for prcpa)ment have been deposited with the Trustee) from and after such prepayment date interest with respect thereto shall cease to accrue, and shall require that such Certificate be then surrendered to the Trustee. Any failure to receive such notice or any defect in the notice or the mailing shall not affect the validity of the prepayment of any Certi ficatc.
Notice of prepayment of Certificates shall be given by the Trustee.
Notice of the prepayment of Certificates, other than mandatory sinking fund prepayment and excepting any notice that refers to Certificates that are the subject of a refunding, shall be circulated only if sufficient funds have been deposited with the Trustee to pay the Prepayment Price of the Certificates to be prepaid.
Section 4.04. Partial Prepayment of Certificate. Upon sun-ender of any Certificate prepaid in part only, the Trnstec shall execute and deliver to the Owner thereof, at the expense of the Purchaser, a new Certificate or Certificates of authorized denominations equal in aggregate principal amount to the unprepaid portion of the Certificate surrendered and of the same interest rate and maturity .
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Section 4.05. Effect or Prepayment. When notice of prepayment has been duly given as aforesaid. and moneys for payment of the Prepayment Price of, together with interest accrued to the prepayment date with respect to, the Certificates (or portions thereof) so called for prepayment are held by the Trustee, the Certificates (or portions thereof) so called for prepayment shall, on the prepayment date designated in such notice, become cancelable upon payment of the Prepayment Price specified in such notice and interest accrued thereon to the prepayment date; and from and after the date so designated the right of the Certificates so called for prepayment to payments of interest shall cease to accrue, said Certificates ( or portions thereof) shall cease to be entitled to any benefit or security under this Agreement, and the Owners of said Certificates shall have no rights in respect thereof except to receive payment of said Prepayment Price and accrued interest.
Each Certificate with respect to which a prepayment has been made pursuant to the provisions of this Article shall he canceled upon surrender thereof and destroyed by the Trustee.
ARTICLE V.
INSTALLMENT PAYMENTS
Section 5.01. Pledge and Deposit of Installment Payments. The Installment Payments are hereby irrevocably pledged to, and shall be used for, the timely payments with respect to the Certificates, and the Installment Payments shall not be used for any other purpose while any of the Certificates remains Outstanding. This pledge shall constitute a first and exclusive lien on the Installment Payments in accordance with the te1ms hereof.
Pursuant to the tem1s of the Assignment Agreement, all Installment Payments to which the Corporation may at any time have been entitled (including income or profit from investments pursuant to Section 5.03) are to be made directly to the Trustee; if any such Installment Payment is received by the Corporation at any time, it shall be deposited by the Corporation with the Trustee within one Business Day after the receipt thereof. The Trustee shall deposit all Installment Payments as and when received in the Installment Payment Fund. All moneys at any time deposited in the Installment Payment Fund shall be held by the Trustee in trust for the benefit of the Owners from time to time of the Certificates, but shall nevertheless be disbursed, allocated and applied solely for the uses and purposes herein set forth. The Assignment Agreement creates an absolute assignment and transfer of the rights of the Corporation as set forth therein and does not merely create a security interest in such rights.
Section 5.02. Installment Payment Fund. There is hereby established with the Trustee the Installment Payment Fund, which the Trustee shall establish and maintain and hold in trust separate and apart from other funds held by it. The Trustee shall pay from the Installment Payment Fund, the interest and principal payments with respect to Installments that become payable on each Interest Payment Date, and the Prepayment Price of Installments that become payable as provided in Section 4.01 hereof.
All earnings derived from the investment of funds on deposit in the Installment Payment • Fund shall be retained therein. At least 10 days before each Interest Payment Date or, if such 19 •
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day is not a Business Day, on the next preceding Business Day, the Trustee shall transfer all earnings from the Reserve Fund not used to meet the Reserve Requirement and for which the Trustee has not received an instruction pursuant to Section 5 .06(b) hereof to the Installment Payment Fund.
Amounts deposited into the Installment Payment Fund shall be held as a credit against the obligation of the Purchaser with respect to its payment of the immediately succeeding installment Payment; at least 10 days before an Interest Payment Date or, if such day is not a Business Day, on the next preceding Business Day, the Trustee shall notify the Purchaser in writing of the amount necessary to be deposited in the Installment Payment Fund to pay the Installment Payment coming due on the next Interest Payment Date.
Section 5.03. Investment of Moneys. Any moneys in the Installment Payment Fund, the Cost of Issuance Fund, the Construction Fund and the Reserve Fund shall be invested by the Trustee, upon the Written Request of the Purchaser at least two (2) Business Days before the inYestment date, in Permitted Investments that will mature on or before the dates when such moneys are scheduled to be needed for payment from such fund; provided, however, that any Pennitted Investments purchased with moneys in the Reserve Fund will mature in five years or less frorn the date of purchase. Securities acquired as an investment of moneys in a fund shall be credited to such fund.
In the absence of written investment direction from the Purchaser, the Trustee shall invest moneys held by it solely in Permitted Investments specified in clause B(5) of the definition thereof.
Subject to the further provisions of Section 6.03 hereof, the Trustee may sell or present for prepayment any obligations so purchased at the \vritten direction of the Purchaser whenever it shall be necessary in order to provide moneys to meet any payments and the Trustee shall not be liable or responsible for any loss resulting from such investment. The Trustee or any of its affiliates may act as principal or agent in the acquisition or disposition of any investment. The Trustee may commingle moneys held in any of the funds or accounts established pursuant to this Agreement into a separate fund or funds for investment purposes only; provided, however, that all funds or accounts held by the Trustee hereunder shall be accounted for separately notwithstanding such commingling. Permitted lnvestm<!nts that are registrable securities shall be registered in the name of the Trustee.
The Purchaser acknowledges that to the extent regulations of the Comptroller of the Currency or other applicable regulatory entity grant the Purchaser the right to receive brokerage confim1ations of security transactions as they occur, the Purchaser specifically waives receipt of such confinnations to the extent permitted by law. The Trustee will furnish the Purchaser periodic cash transaction statements which include detail for all investment transactions made by the Trustee hereunder.
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 20 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 dealing as principal for its own account. •
Such investments (except investment agreements) shall be valued by the Trustee on or before each February I and August 1, at the Fair Market Value thereof, exclusive of accrued interest. Deficiencies in the amount on deposit in the Reserve Fund resulting from a decline in market value shall be restored no later than the succeeding valuation date.
In making any valuations of securities 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.
Section 5.04. Reserve Fund. There is hereby established with the Trustee the Reserve Fund, which the Trustee shall establish and maintain and hold in trust separate and apart from other funds held by it. The Trustee shall deposit in the Reserve Fund, the amounts required to be deposited therein pursuant to the Installment Purchase Agreement and this Agreement and shall apply moneys in the RcserYe Fund in accordance with this Section 5.04.
If one day prior to any Interest Payment Date, or if such date is not a Business Day, then the preceding Business Day, the money in the Installment Payment Fund is insufficient to make the payments required by this Trust Agreement with respect to Certificates on such Interest Payment Date, the Trustee shall give the Purchaser notice of such shortfall and shall transfer from the Reserve Fund to the lnstalJment Payment Fund the amount of such insufficiency.
In the event that the Trustee has transferred money from the Reserve Fund to the Installment Payment Fund in accordance with this Section 5.04, upon receipt of the moneys from the Purchaser to increase the balance in the Reserve Fund to the Reserve Fund Requirement, the Trustee shall deposit such money in the Reserve Fund. Any deficiency in the Reserve Fund due to a draw thereon shall be replenished by the Purchaser within one year of such deficiency in tv. elve equal monthly installments.
All moneys in the Reserve Fund shall be used and withdrawn by the Trustee solely for the purpose of paying principal and interest with respect to the Certificates or, to the extent that the value of the Reserve Fund exceeds the Reserve Fund Requirement, monies in an amount equal to such excess shall be transferred from the Reserve Fund to the Installment Payment Fund. All amounts on deposit in the Reserve Fund on the date no Certificates remain outstanding shall be transferred to the Purchaser.
The Purchaser may fund all or a portion of the Reserve Requirement with one or more Qualified Surety Bonds. Upon deposit of any Qualified Surety Bond with the Trustee, the Trustee, upon the Written Order of the Purchaser, shall pay to the Purchaser from amounts in the Reserve Fund an amount equal to the principal of the Qualified Surety Bond. The Purchaser undertakes to apply all such amounts to capital expenditures and, pending such application, to hold such amounts in a segregated account and if invested into Investment Property (within the meaning of section 148( a} of the Code) then invested to produce a yield not in excess of the yield 011 the Installment Purchase Agreement.
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In any case where the Reserve Fund is funded with a combination of cash and a Qualified Surety Bond, the Trustee shall deplete all cash balances before drawing on the Qualified Surety Bond. With regard to replenishment, any available moneys provided by the Purchaser shall be used first to reinstate the Qualified Surety Bond and second, to replenish the cash in the Reserve Fund. In the event the Qualified Surety Bond is drawn upon, the Purchaser shall make payment of interest on amounts advanced under the Qualified Surety Bond after making any Installment Payments to the Installment Purchase Agreement.
In the event the Qualified Surety Bond will lapse or expire, the Trustee shall draw upon such Qualified Surety Bond prior lo its lapsing or expiring, make deposits from available moneys provided by the Purchaser to the Reserve Fund to increase the amount on deposit therein to the Reserve Rcqllirement or substitute such Qualified Surety Bond with a Qualified Surety Bond furnished to it by the Purchaser that satisfies the requirements of this section.
Section 5.05. Pledge of Moneys in Funds. All amounts on deposit in the Installment Payment Fund and the Reserve Fund arc hereby irrevocably pledged by the Purchaser to the Owners of the Certificates as provided herein. This pledge shall constitute a first and exclusive lien on the Installment Payment Fund and the Reserve Fund for the benefit of the Owners of the Certificates in accordance with the tem1s hereof and of the Installment Purchase Agreement.
ARTICLE VI.
COVENANTS
Section 6.01 . Corporation and Purchaser to Comply with Installment Purchase Agreement. Each of the Corporation and Purchaser covenants and agrees with the Owners of the Certificates to perfonn all obligations and duties imposed on it under the Installment Purchase Agreement and, together with any assignee thereof, to enforce such Installment Purchase Agreement against the other party thereto in accordance with its terms.
The Corporation and the Purchaser each will in all respects promptly and faithfully keep, perform and comply with all the terms, provisions, covenants, conditions and agreements of the Installment Purchase Agreement to be kept, performed and complied with by it.
The Corporation and the Purchaser each agrees not to do or permit anything to be done, or omit or refrain from doing an11hing, in any case where any such act done or permitted to be done, or any such omission of or refraining from action, would or might be a ground for cancellation or termination of the Jnstallmcnt Purchase Agreement.
Section 6.02. Purchaser Budgets. On or prior to the ninetieth day of each Fiscal Year, the Purchaser shall certify to the Trustee that the amounts budgeted for payment of Installment Payments are fully adequate for the payment of all Installment Payments due under the Installment Purchase Agreement for such Fiscal Year as well as payments to the Reserve Fund pursuant to Section 5 .04 hereof. If the amounts so budgeted are not adequate for the payment of Installment Payments due under the Installment Purchase Agreement, the Purchaser will take such action as may be necessary to cause such annual budget to be amended, corrected or augmented so as to include therein the amounts required to be raised by the Purchaser in the then 22 •
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ensuing Fiscal Year for the payment of Installment Payments due under the Installment Purchase Agreement and will notify the Trustee of the proceedings then taken or proposed to be taken by the: Purchaser.
Section 6.03. Tax Covenants. Under Section 6.5 of the lnstallment Purchase Agreement, the Corporation has undertaken certain covenants with respect to the exclusion of the Interest Component of Series 2006 Installment Payments from the gross income of the owner thereof for federal income tax purposes. Said provision also restricts assignment of the Installment Purchase Agreement by the Corporation unless the assignee, other than the Trustee, shall have assumed and undertaken the obligations of the Corporation under said Section 6.5.
Section 6.04. Accounting Records and Reports. The Trustee shall keep or cause to be kept proper books of record and account in which complete and correct entries shall be made of all transactions made by it relating to the receipts, disbursements, allocation and application of the Installment Payments, and such books shall be available for inspection by the Purchaser and by any Owner of Certificates, or his agent or representative, at reasonable hours and under reasonable conditions. Each month, so long as the Certificates are Outstanding, the Trustee shall furnish to the Purchaser a statement covering receipts, disbursements, allocation and application of amounts on deposit in the funds and accounts created hereunder held by it.
Section 6.05. Compliance with Trust Agreement. The Trustee will execute the Certificates upon Written Order of the Corporation as provided in Section 3.01 hereof. The Purchaser will not suffer or permit any default by it to occur under this Agreement, but will faithfully observe and perform all the covenants, conditions and requirements hereof.
Section 6.06. Observance of Laws and Regulations. To the extent necessary to assure its performance hereunder, the Corporation and the Purchaser wil1 each well and truly keep, observe and perform all valid and lawful obligations or regulations now or hereafter imposed on it by contract, or prescribed by any law of the United States of America, or of the State, or by any officer, board or commission having jurisdiction or control, as a condition of the continued enjoyment of any and every right, privilege or franchise now owned or hereafter acquired by the Corporation or the Purchaser respectively, including its right to exist and carry on its business, to the end that such contracts, rights and franchises shall be maintained and preserved, and shall not become abandoned, forfeited or in any manner impaired.
Section 6.07. Compliance with Contracts. The Purchaser shall comply with the terms, covenants and provisions, express or implied, of all contracts for the use of the Project by the Purchaser, and all other contracts and agreements affecting or involving the Project to the extent that the Purchaser is a party thereto.
Section 6.08. Prosecution and Defense of Suits. The Purchaser shall promptly, upon request of the Trustee or any Certificate Owner, from time to time take such action as may be necessary or proper to remedy or cure any defect in or cloud upon the title to the Water System or any part thereof, whether no,v existing or hereafter developing, shall prosecute all such suits, actions and other proceedings as may be appropriate for such purpose and, to the extenl permitted by law. shall indemnify and save the Trustee, the Corporation and every Certificate 23 Owner hannless from all loss, cost, damage and expense, including attorneys fees, that they or • any of them may incur by reason of any such defect, cloud, suit, action or proceeding. •
The Purchaser shall defend against every suit, action or proceeding at any time brought against the Trustee, the Corporation or any Certificate Owner upon any claim arising out of the receipt, application or disbursement of any of the Installment Payments or involving the rights of the Trustee, the Corporation or any Certificate Owner under this Agreement; provided that the Trustee. the Corporation or any Certificate Owner at such party's election may appear in and defend any such suit, action or proceeding. To the extent permitted by law, the Purchaser shall indemnify and hold harmless the Trustee, the Corporation and the Certificate Owners against any and all liability claimed or asserted by any person, arising out of such receipt, application or disbursement, and shall indemnify and hold harmless the Certificate Owners against any attorneys fees or other expenses that any of them may incur in connection with any litigation to which any of them may become a party by reason of ownership of Certificates. The Purchaser shall promptly reimburse the Corporation or any Certificate Owner in the full amount of any attorneys fees or other expenses that it or such Owner may incur in litigation or otherwise in order to enforce such party's rights under this Agreement or the Certificates, provided that such litigation shall be concluded favorably to such party's contentions therein.
Section 6.09. Recordation and Filing. The Purchaser, or the Trustee, at the written direction of the Purchaser, shall record, register, file, renew, refile and re-record all such documents, including financing statements, as may be required by law in order to maintain a security interest in this Agreement and the Assignment Agreement, all in such manner, at such times and in such places as may be required by, and to the extent permitted by, law in order fully to preserve, protect and perfect the security of the Certi ficatc Owners and the rights and security interests of the Trustee. The Purchaser shall do whatever else may be necessary or be reasonably required in order to perfect and continue the lien of this Agreement and the Assignment Agreement.
Section 6.10. Eminent Domain. If all or any part of the Project shall be taken by eminent domain proceedings (or sold to a government threatening to exercise the power of eminent domain), the proceeds therefrom shall be applied in the manner specified in Section 6.14 Clfthe Installment Purchase Agreement.
Section 6.11 . Further Assurances. Whenever and so often as may be necessary, the Corporation and the Purchaser will promptly execute and deliver or cause to be executed and delivered all such other and further instruments, documents or assurances, and promptly do or cause to be done all such other and further things, as may be necessary or reasonably required in order to further and more fully vest in the Trustee and the Certificate Owners all rights, interest, powers, benefits, privileges and advantages conferred or intended to be conferred upon them by this Agreement.
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ARTICLE VII .
DEFAULT AND LIMITATION OF LIABILITY
Section 7.01. Notice of Non-Payment. In the event of delinquency in the payment of any Installment Payments due by the Purchaser pursuant to the InstaJlment Purchase Agreement, the Trustee shall give written notice, to the Purchaser, the Bond Insurer and the Corporation, of the delinquency and the amount of the delinquency no later than one {l) Business Day following the date upon which such delinquent lnstallment Payment was due.
Section 7.02. Action on Default or Tem1ination. Upon the occurrence of an Event of Default (as that tem1 is defined in the Installment Purchase Agreement), which event shall constitute a default hereunder, and in each and every such case during the continuance of such Event of Default, the Trustee, but only with the prior written consent of the Bond Insurer so long as the Bond Insurance Policy is in full force and effect and the Bond Insurer has not failed to comply with its payment obligations under the Bond Insurance Policy, at the written direction of the Owners of not less than a majority in aggregate principal amount of Certificates at the time Outstanding shall be entitled, upon notice in writing to the Purchaser, to accelerate the unpaid Installment Payments under the Installment Purchase Agreement and to exercise the remedies provided to the Corporation in the Installment Purchase Agreement.
Upon declaration of the entire principal amount of the unpaid Installment Payments and the accmcd interest thereon to be due and payable immediately and provided such declaration is not rcsctnded or annulled, all in accordance with Section 8.1 of the Installment Purchase Agreement, the Trustee may apply all moneys received as Installment Payments and all moneys held in any fund or account hereunder to the payment of the entire principal amount of the Ccrti ficates and the accrued interest with respect thereto, with interest on the overdue Certificates at the rate or rates of interest applicab1e to the Certificates if paid in accordance with their terms.
In detem1ining whether a defau It in the payment of the Installment Payments has occurred or whether a payment of principal of or interest with respect to the Certificates has been made under the Trust Agreement, no effect shall be given to payments made under the Bond Insurance Policy.
Section 7.03. Other Remedies of the Trustee. The Trustee shall have the right -- (a) by mandamus or other action or proceeding or suit at law or in equity to enforce its rights against the Purchaser or any director, officer or employee thereof, and to compel the Purchaser or any such director, officer or employee to pcrfom1 or carry out its or his duties under law and the agreements and covenants required to be performed by it or him contained herein; (b) by suit in equity to enjoin any acts or things that are unlawful or violate the rights of the Trustee; or
(c) by smt 111 equity upon the happening of any default hereunder to require the Purchaser and its directors, officers and employees to account as the trustee of an express trust. 25 •
Section 7 .04. Non-Waiver. A waiver of any default or breach of duty or contract by the Trustee shall not affect any subsequent default or breach of duty or contract or impair any duty or contract. No delay or omission by the Trustee to exercise any right or remedy accruing upon any default or breach of duty or contract shall impair any such right or remedy or shall be construed to be a waiver of any such default or breach of duty or contract or an acquiescence therein, and every right or remedy conferred upon the Trustee by law or by this article may be enforced and exercised from time to time and as often as shall be deemed expedient by the Trustee.
If any action, proceeding or suit to enforce any right or to exercise any remedy is discontinued, abandoned or determined adversely to the Trustee, the Trustee, the Purchaser and the- Certi ficatc Owners shall be restored to their fom1er positions, rights and remedies as if such action, proceeding or suit had not been brought or taken.
Section 7.05. Remedies Not Exclusive. No remedy herein conferred upon or reserved to the Trustee or the Certificate Owners is intended to be exclusive of any other remedy, and each such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing in law or in equity or by statute or otherwise and may be exercised without exhausting and without regard to any other remedy conferred by any law.
Section 7.06. No Obligation by the Purchaser to Owners. Except for the payment of Installment Payments when due in accordance with the Installment Purchase Agreement and the pcrfonnancc of the other covenants and agreements of the Purchaser contained in said Installment Purchase Agreement and herein, the Purchaser shall have no obligation or liability to the Owners of the Certificates with respect to this Agreement or the execution, delivery or transfer of the Certificates, or the disbursement of Installment Payments to the Owners by the Trustee; provided however that nothing contained in this Section shall affect the rights, duties or obligations of the Trustee expressly set forth herein.
Section 7.07. Trustee Appointed Agent for Certificate-owners; Direction of Proceedings. The Trustee is hereby appointed the agent and attorney of the Owners of all Certificates outstanding hereunder for the purpose of filing any claims relating to the Certificates. For such purposes, the Bond Insurer shall be deemed to be the sole holder of the Certificates so long as it has not failed to comply with its payment obligations under the Bond lnsuranci.: Policy. The Owners of a majority in aggregate principal amount of the Certificates Outstanding hereunder shall, upon tender to the Trustee of reasonable indemnity against the costs, expenses and liabilities to be incurred in compliance with such direction, have the right to direct the method and place of conducting all remedial proceedings by the Trustee, provided such direction shall be in accordance with law and the provisions of this Trust Agreement and that the Trustee shall have the right to decline to follow any such direction that in the opinion of the Trustee would be unjustly prejudicial to Certificate owners not parties to such a direction.
Section 7.08. Power of Trustee to Control Proceedings. In the event that the Trustee, upon the happening of an Event of Default, shall have taken any action. by judicial proceedings or othenvisc, pursuant to its duties hereunder, whether upon its own discretion or upon the request of the Owners of a majority in aggregate principal amount of the Certificates then outstanding pursuant to Section 7.07 hereof, it shall have full power, in the exercise of its 26 •
discretion for the best interests of the Owners of the Certificates, with respect to the continuance, discontinuance, withdrawal, compromise, settlement or other disposal of such action; provided, however, that the Trustee shall not, unless there no longer continues an Event of Default hereunder, discontinue, withdraw, compromise or settle, or otherwise dispose of, any litigation pending at law or in equity, if at the time there has been filed with it a written request signed by the Owners of at least a majority in principal amount of the Certificates Outstanding hereunder opposing such discontinuance, withdrawal, compromise, settlement or other disposal of such litigation.
Section 7.09. Limitation on Certificate Owners' Right to Sue. No Owner of any Certificate executed and delivered hereunder shall have the right to institute any suit, action or proceeding at law or in equity, for any remedy under or upon this Agreement, unless (a) such Owner shall have previously given to the Trustee written notice of the occurrence of an Event of Default hereunder; (b) the Owners of at least a majority in aggregate principal amount of all the Certificates then Outstanding shall have made written request upon the Trustee to exercise the powers hereinhefore granted or to institute such action, suit or proceeding in its own name; (c) said Owners shall have tendered to the Trustee reasonable indemnity against the costs, expenses and liabilities to be incurred in compliance with such request; and (d) the Trustee shall have refused or omitted to comply with such request for a period of sixty (60) days after such written request shall have been received by, and said tender of indemnity shall have been made to, the Trustee.
Section 7.10. No Obligation with Respect to Performance by Trustee. Neither the Purchaser nor the Corporation shall have any obligation or liability to any of the other parties hereto or to the Owners of the Certificates with respect to the performance by the Trustee of any duty imposed upon it under this Agreement.
Section 7 .11. No Liability to Owners for Payment. The Corporation shall not have any obligation or liability to the Owners of the Certificates with respect to the payment of the Installment Payments by the Purchaser when due, or with respect to the performance by the Purchaser of any other covenant made by it in the Installment Purchase Agreement or herein.
Except as proYided in this Agreement, the Trustee shall not have any obligation or liability to the Owners of the Certificates with respect to the payment of the Installment Payments by the Purchaser when due, or with respect to the perfonnance by the Purchaser of any other covenant made by it in the Installment Purchase Agreement or herein.
Section 7.12. No Responsibility for Sufficiency. The Trustee shall not be responsible for the sufficiency of this Trust Agreement, the Installment Purchase Agreement, or of the assignment made to it by the Assignment Agreement of rights to receive Installment Payments pursuant to the Installment Purchase Agreement, or the value of or title to the Project. The Trustee shal I not be responsible or liable for any loss suffered in connection with any investment of funds made by it under the tem1s of and in accordance with this Agreement.
Section 7.13. Indemnification of Trustee. To the extent permitted by law, the Purchaser shall indemnify the Trustee and hold it harmless against any loss, liability, expenses or advances, including but not limited to fees and expenses of counsel and other experts, incurred or made without negligence or willful misconduct on the part of the Trustee, (i) arising out of or in 27 •
connection with the acceptance or administration of this trust or in the exercise and perfonnance of any of the powers and duties hereunder or under the Installment Purchase Agreement by the Trustee, (ii) relating to or arising out of the Project, or the conditions, occupancy, use, possession, conduct or management of, or work done in or about, or from the planning, design, acquisition, installation or construction of the Project or any part thereof, (iii) arising out of or relating to any untrue statement or alleged untrue statement of any material fact or omission or alleged omission to state a material fact necessary to make the statements made, in light of the circumstances under which they were made, not misleading in any official statement or other offering circular utilized in connection with the sale of the Certificates, or (iv) the use, presence, storage, disposal or release of any Hazardous Substances on or about the Project, including the costs and expenses of defending itself against any claim of liability arising under this Agreement.
Such indemnity shall survive payment of the Certificates or resignation or removal of the Trustee.
ARTICLE VIJI.
THE TRUSTEE
Section 8.01. Employment of Trustee. ln consideration of the recitals hereinabove set forth and for other valuable consideration, the Purchaser hereby agrees to employ the Trustee to receive, hold, invest and disburse the moneys received pursuant to the Installment Purchase Agreement for credit to the various funds and accounts established by this Agreement; to execute, deliver and transfer the Certificates; and to apply and disburse the Installment Payments received from the Purchaser to the Owners of Certificates; and to perform certain other functions: all as herein provided and subject to the terms and conditions of this Agreement.
Section 8.02. Acceptance of Employment. In consideration of the compensation herein provided for, the Trustee accepts the employment above referred to subject to the terms and conditions of this Agreement.
Section 8.03. Trustee, Duties, Removal and Resignation. By executing and delivering this Agreement, the Trustee accepts the duties and obligations of the Trustee provided in this Agreement, but only upon the tem1s and conditions set forth in this Agreement. (a) In case an Event of Default has occmTed and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Agreement, and use the same degree of care and skill in their exercise, as a prudent man would exercise or use under the circumstances in the conduct of his own affairs.
(b) The Trustee shall not be liable for any error of judgment made in good faith by a responsible officer of the Trnstec, unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts.
( c) The Trustee shat I not be liable with respe.ct to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Owners of a majority in principal amount of the Certificates relating to the time, method and place of conducting any proceeding 28 for any remedy available to the Trustee, or exercising any trust or power conferred upon the • Trustee under this Agreement.
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( d) The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Agreement at the request or direction of any of the Owners pursuant to this Agreement, unless such Owners shall have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities that might be incurred by it in compliance with such request or direction.
The Purchaser, or, if the Purchaser is in default under the Installment Purchase Agreement, the Owners of a majority in aggregate principal amount of all Certificates Outstanding, may by written request to the Trustee, remove the Trustee and any successor thereto, and may appoint a successor Trustee, but any such successor shall be a bank or trust company doing business and having a corporate trust office in California, that has ( or the parent holding company of which has) a combined capital (exclusive of borrowed capital) and surplus of at least seventy-five million dollars ($75,000,000) and subject to supervision or examination by federal or state authorities. If such bank or trust company publishes a report of condition at least annually, pursuant to law or to the requirements of any supervising or examining authority above referred to, then for the purposes of this Section the combined capital and surplus of such bank or trust company shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published.
The Trustee may at any time resign by giving written notice to the Purchaser and by giving to the Certificate Owners notice of such resignation by mail at the addresses shown on the registration books maintained by the Trnstee. Upon receiving such notice of resignation, the Purchaser shall promptly appoint a successor Trustee by an instrument in writing; provided, however, that in the event that the Purchaser does not appoint a successor Trustee within thirty (30) days following receipt of such notice of resignation, the resigning Trustee may at the expense of the Purchaser petition the appropriate court having jurisdiction to appoint a successor Trustee. Any resignation or removal of the Trustee and appointment of a successor Trustee shall become effective upon acceptance of appointment by the successor Trustee.
Section 8.04. Merger or Consolidation of Trustee. Any corporation into which the Trustee may be merged or with which it may be consolidated, or any corporation resulting from any merger or consolidation to which the Trustee shall be a party, or any corporation succeeding to all or substantially all of the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder without the execution or filing of any paper or any further act on the part of any of the parties hereto, anything herein to the contrary notwithstanding, provided that such successor trnstee shall be eligible under the provisions of Section 8.03.
Section 8.05. Compensation of the Trustee. The Purchaser shall from time to time, subject to any agreement in effect with the Trustee, pay to the Trustee reasonable compensation for its services and shall reimburse the Trustee for all its advances and expenditures, including but not limited to, advances to and fees and expenses of independent appraisers, accountants, consultants, counsel, agents and attorneys-at-law or other experts employed by it in the exercise and perfom1ance of its powers and duties hereunder. Such compensation and reimbursement shall be paid by the Purchaser; provided, however, that the Trustee shall not otherwise have any 29 •
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claims, except in accordance with Section 7.13 hereof, or lien for payment of compensation for its services against any other moneys held by it in the funds or accounts established hereunder hut may take whatever legal actions are lawfully available to it directly against the Purchaser.
The agreement contained in this Section shall survive the payment of the Certificates, the discharge of this Agreement and the appointment of a successor trustee.
Section 8.06. Protection of the Trustee. The Trustee shall be protected and shall incur no liability in acting. refraining from acting or proceeding in good faith upon any resolution, notice, telegram, request, consent, waiver, certificate, statement, affidavit, voucher, bond, requisition or other paper or document that it shall in good faith believe to be genuine and to have been adopted, executed or delivered by the proper party or pursuant to any of the provisions of this Agreement, and the Trustee shall be under no duty to make any investigation or inquiry as to any statements contained or matters referred to in any such instrument, but may accept and rely upon the same as conclusive evidence of the truth and accuracy of such statements. The Trustee may consult with counsel, who may be counsel to the Corporation or the Purchaser, with regard to legal questions, and the opinion of such counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith in accordance therewith.
Whenever in the administration of this Agreement, the Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking, omitting or suffering any action hereunder, the Trustee may (unless other evidence in respect thereof be herein specifically prescribed) rely on a certificate of the Corporation or the Purchaser and such certificate shall be full warranty to the Trustee for any action taken or suffered under the provisions of this Agreement upon the faith thereof. but in its discretion the Trustee may (but shall have no duty), in lieu thereof, accept other evidence of such matter or may require such additional evidence as to it may seem reasonable.
The Trustee may buy, sell, own, hold and deal in any of the Certificates provided pursuant to this Agreement, and may join in any action that any Owner may be entitled to take with like effect as if the Trustee were not a party to this Agreement. The Trustee, either as principal or agent, may also engage in or be interested in any financial or other transaction with the Purchaser or the Corporation, and may act as depositary, trustee, or agent for any committee or body of Owners of Certificates or of obligations of the Corporation or the Purchaser as freely as if it were not Trustee hereunder.
The Trustee may execute any of the trusts or powers hereof and perform the duties required of it hereunder either directly or by or through attorneys, agents, or receivers, and the Trustee shall not be responsible for the negligence or misconduct of any such attorney, agent or receiver selected by it with reasonable care. The Trustee shall not be answerable for the exercise of any discretion or power under this Agreement or for anything whatever in connection with the funds and accounts established hereunder, except only for its own willful misconduct or negligence.
The recitals, statements and representations by the Purchaser or the Corporation contained in this Abrreement or in the Certificates shall be taken and construed as made by and 456X4898 .1 30
on the part of the Purchaser or Corporation and not by the Trustee and the Trustee does not • assume, and shall not have, any responsibility or obligations for the correctness of any thereof.
Except during the continuance of an Event of Default the Trustee undertakes to pcrfom1 such duties, and only such duties as are specifically set forth in this Agreement and no implied duties or obligations shall be read into this Agreement against the Trustee. ~o provision in this Agreement shall require the Trustee to risk or expend its own funds or othenvisc incur any financial liability in the performance of any of its duties hereunder or in the exercise of its rights or powers.
In accepting the trust hereby created, the Trustee acts solely as Trustee for the Owners and not in its individual capacity and all persons, including without limitation the Owners and the Purchaser or the Corporation having any claim against the Trustee arising from this Agreement shall look only to the funds and accounts held by the Trustee hereunder for payment except as otherwise provided herein. Under no circumstances shall the Trustee be liable in its individual capacity for the obligations evidenced by the Certificates.
The Trustee makes no representation or warranty express or implied as to the title, value, design, compliance with specifications or legal requirements, quality, durability, operation, condition, merchantability or fitness for any particular purpose or fitness for the use contemplated hy the Purchaser or the Corporation of the Project. In no event shall the Trustee be liable for incidental, indirect, special or consequential dan1ages in connection with or arising from the Installment Purchase Agreement or this Agreement for the existence, furnishing or use of the Project.
The Trustee shall not be deemed to have knowledge of any Event of Default hereunder or under the Installment Purchase Agreement unless and until it shall have actual knowledge thereof or have received notice thereof at its corporate trust office at the address set forth in Section 12.13 hereof.
The Trustee shall not be accountable for the use or application by the Purchaser, or the Corporation or any other party of any funds that the Trustee has released in accordance with the terms of this Agreement.
The Trustee shall have no responsibility with respect to any information, statement, or recital in any official statement, offering memorandum or any other disclosure material prepared or distributed with respect to the Certificates.
The Trustee is authorized and directed to execute m its capacity as Trustee the Assignment Agreement.
The immunities extended to the Trustee also extend to its directors, officers, employees and agents.
The Trustee shall not be liable for any action taken or not taken by it in accordance with the direction of the Owners of a majority (or other percentage provided for herein) in aggregate 31 principal amount of Certificates outstanding relating to the exercise of any right, power or • remedy available to the Trustee.
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ARTICLE IX.
AMENDMENT OF TRUST AGREEMENT
Section 9.01. Amendments Pennittcd. (a) This Agreement and the rights and ob ligations of the Corporation, the Purchaser, the Owners of the Certificates and of the Trustee may be modified or amended at any time with the prior written consent of the Bond Insurer so long as the Bond Insurance Policy is in full force and effect by an amendment hereto, which shall become binding when the written consents of the Owners of a majority in aggregate principal amount of the Certificates then Outstanding, exclusive of Certificates disqualified as provided in Section 12.04 hereof, shall have been filed with the Trustee, provided, however, that no such modification or amendment shall ( 1) extend the stated maturities of the Certificates, or reduce the rate of interest represented thereby, or extend the time of payment of interest, or reduce the amount of principal represented thereby, or reduce any premium payable on the prepayment thereof, without the consent of the Owner of each Certificate so affected, or (2) reduce the aforesaid percentage of Owners of Certificates whose consent is required for the execution of any amendment or modification of this Agreement, or (3) modify any of the rights or obligations of the Trustee or the Corporation without its respective written consent thereto. (b) This Agreement and the rights and obligations of the Corporation, the Purchaser and of the Owners of the Certificates may also be modified or amended at any time by an amendment hereto, which shall become binding upon adoption, without the consent of the Ow·ners of any Certificates. but only to the extent permitted by law and only for any one or more of the following purposes:
( l) to add to the covenants and agreements of the Corporation or the Purchaser contained in this Agreement other covenants and agreements thereafter to be observed or to surrender any right or power herein reserved to or conferred upon the Corporation or the Purchaser, but only if such addition or surrender does not adversely affect the interests of the Owners of the Certificates; (2) to cure, correct or supplement any ambiguous or defective provision contained in this Agreement or in regard to questions arising under this Agreement, as the Corporation or the Purchaser may deem necessary or desirable, but only if such cure, correction or supplementation does not adversely affect the interests of the Owners of the Ccrti ficates; and
(3) to make such other amendments or modifications as may be in the best interests of the Owners of the Certificates.
No amendment without consent of the Owners may modify any of the rights or oh ligations of the Trustee without its written consent thereto. 32 •
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Section 9.02. Endorsement or Replacement of Certificates After Amendment or Supplement. After the effecti\'e date of any action taken as hereinabove provided, the Trustee may determine that the Certificates may bear a notation by endorsement in form approved by the Trustee as to such action, and in that case upon demand of the Trustee to the Owner of any Outstanding Certificate and presentation of such Owner's Certificate for such purpose at the principal corporate trust office of the Trustee a suitable notation as to such action shall be made on such Certificate. If the Trustee shall so detem1ine, new Certificates so modified as in the opinion of the Trustee shall be necessary to confonn to such action shall be prepared, and in that case upon demand of the Trustee to the Owner of any Outstanding Certificates such new Certificates shall be exchanged at the principal corporate trust office of the Trustee without cost to each Owner for Certificates then Outstanding upon surrender of such Outstanding Certificates.
Section 9.03. Amendment of Particular Certificates. The provisions of this article shall not prevent any Owner from accepting any amendments to the particular Certificates held by him, provided that due notation thereof is made on such Certificates.
In connection with any amendment of this Agreement, the Trustee may conclusively rely on an opinion of counsel that the requirements of this Article IX have been met.
Section 9.04. Notice to Rating Agencies. Any rating agency rating the Certificates shall receive notice of each amendment to the Trust Agreement and a copy thereof at least 15 days in advance of its execution. The Bond lnsurer shall be provided with a full transcript of all proceedings relating to any amendment or supplement hereto .
ARTICLE X.
DEFEASANCE
Section 10.01. Dischar~e of Trust Agreement. When the obligations of the Purchaser under the Installment Purchase Agreement shall cease pursuant to Article IX of the Installment Purchase Agreement (except for the right of the Trustee and the obligation of the Purchaser to have the money and Permitted Investments mentioned therein applied to the payment of Installment Payments as therein set forth and the obligation to apply moneys on deposit in the Rebate Fund as provided in Section 5.06), then and in that case the obligations created by this Agreement shall thereupon cease, tem1inate and become void, and after provision for payment of amounts due the Trustee hereunder, the Trustee shall turn over to the Purchaser, as an O\'crpayment of Installment Payments, any surplus in the Installment Payment Fund and all balances remaining in any other funds or accounts (other than moneys and Permitted Investments held for the payment of the Certificates at maturity or on prepayment, which moneys and Permitted Investments shall continue to be held by the Trustee in trust for the benefit of the Owners and shall be applied by the Trustee to the payment, when due, of the principal and interest and premium, if any, represented by the Certificates), and (unless otherwise provided herein) alter such payment this Agreement shall become void. lf moneys or securities issued by the United States of America described in clause (2) and (3) of the definition of Pennitted Investments or securities described in clause (8) of the 33 •
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definition of Pem1itted Investments are deposited with and held by the Trustee as hercinabove provided. the Trustee shall within thirty (30) days after such moneys or Permitted Investments shall have been deposited with it, mail a notice, first class postage prepaid, to the Owners at the addresses listed on the registration books kept by the Trustee pursuant to Section 2.08, setting forth (a) the date fixed for prepayment of the Certificates, (b) a description of the moneys or securities described in clause (a) of the definition of Pennittcd Investments so held by it, and (c) that this Agreement has been released in accordance with the provisions of this Section.
J\ot\vithstanding anything herein to the contrary, in the event that the principal and/or interest due on the Certificates shall be paid by the Bond Insurer pursuant to the Bond Insurance Policy, the Certificates shall remain Outstanding for all purposes, not be defeased or otherwise satisfied and not be considered paid by the Corporation, and the assignment and pledge of the Trust Estate and all covenants, agreements and other obligations of the Corporation to the registered owners shall continue to exist and shall run to the benefit of the Bond Insurer, and the Bond Insurer shall be subrogatcd to the rights of such registered owners.
Section 10.02. Deposit of Money or Securities with Trustee. Whenever in this Agreement or the Installment Purchase Agreement it is provided or permitted that there be deposited with or held in trust by the Trustee money or securities in the necessary amount to pay or prepay any Certificates, the money or securities to be so deposited or held may include money or securities held by the Trustee in the funds and accounts established pursuant to this Agreement and shall be only cash. direct non-callable obligations of the United States of America and securities fully and unconditionally guaranteed as to the timely payment of principal and interest by the llnited States of America, to which direct obligation or guarantee the full faith and credit of the ljnited States of America has been pledged or securities described in clause (8) of the definition of Permitted Investments. In the event of an advance refunding, the Purchaser shall cause to be delivered a verification report or a report of an independent nationally recognized certified public accountant.
Section 10.03. Unclaimed Moneys. Anything contained herein to the contrary notwithstanding, any moneys held by the Trustee in trust for the payment and discharge of the interest or principal or Prepayment Price represented by any of the Certificates that remain unclaimed for two (2) years after the later of (a) the date when such interest or principal or Prepayment Price shall have become payable, or (b) the date of deposit of such moneys if deposited with the Trustee after the date when the interest or principal or Prepayment Price represented by such Certificates shall have become payable, shall be repaid by the Trustee to the Purchaser as its absolute property free from trust, and the Trustee shall thereupon be released and discharged with respect thereto and the Owners shall look only to the Purchaser for the payment of the interest and principal or Prepayment Price represented by such Certificates; provided, however. that before being required to make any such payment to the Purchaser, the Trustee shall, at the expense of the Purchaser, first mail a notice to the Owners of the Certificates so payable that such moneys remain unclaimed and that after a date named in such notice, which date shall not be less than thirty (30) days after the date of the mailing of such notice, the balance of such moneys then unclaimed will be returned to the Purchaser. 34 •
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ARTICLE XI.
BONDINSURAI\CE
Section 11.01. Amendments Requiring Consent of Bond Insurer. Any provision of this Tmst Agreement expressly recognizing or granting rights in or to the Bond Insurer may not be amended in any manner which adversely affects the rights of the Bond Insurer hereunder without the prior written consent of the Bond Insurer. The Bond Insurer reserves the right to charge the Purchaser a fee for any consent or amendment to this Trust Agreement while the Bond Insurance Policy is outstanding.
Unless otherwise provided in this Article XL the Bond Insurer's consent shall be required in addition to consent of the registered owners of the Certificates, when required, for the following purposes: (i) execution and delivery of any Supplemental Trust Agreement that would adversely affect the rights of the Bond Insurer; (ii) removal of the Trustee and selection and appointment of any successor trustee; and (iii) initiation or approval of any action not described in (i) or (ii) above which requires consent of the registered owners of the Certificates.
Notwithstanding any other provision of this Trust Agreement, the Bond Insurer shall have the right, in lieu of registered owners of the Certificates, to consent on behalf of such owners to any Supplemental Trust Agreement that requires the consent of registered owners of Certificates.
Section 11.02. Approval of Any Reorganization. Any reorganization or liquidation plan with respect to the Purchaser must be acceptable to the Bond Insurer. In the event of any reorganization or liquidation, the Bond Insurer shall have the right to vote on behalf of all registered owners who hold the Certificates absent a default by the Bond Insurer under the Bond Insurance Policy.
Section 11.03. Provisions Relating to Remedies Upon an Event of Default.
Notwithstanding any other provisions of this Trust Agreement, upon the occurrence and continuance of an Event of Default, the Bond Insurer shall have the right, so long as it is not in default under the Bond Insurance Policy, to control and direct the enforcement of all rights and remedies granted to the registered owners of Certificates or the Trustee for the benefit of the registered owners under this Trust Agreement.
Section 11.04. Notice to Bond Jnsurer.
(a) While the Bond Insurance Policy is in effect, the Purchaser or the Trustee (as to (B) and (C)), as appropriate, shall furnish to the Bond Insurer (to the attention of the Surveillance Department, unless otherwise indicated):
(A) as soon as they are available, a copy of any financial statement, audit and/or annual report of the Purchaser;
(B) such additional information as the Bond Insurer may reasonably request; (C) a copy of any notice to be given to the registered owners of the Certificates, including, without limitation, notice of any redemption or defeasance of the Certificates, 35 •
and any certificate rendered pursuant to this Trust Agreement relating to the security for the Certificates; and
(D) to the extent that the Purchaser has entered into a continuing disclosure agreement with respect to the Certificates, the Bond Insurer shall be included as party to be notified of a material signi ti cant event required to be given thereunder. (b) The Purchaser or the Trnstee, as appropriate, shall notify the Bond Insurer (to the attention of the General Counsel Office) of any failure of the Purchaser to provide relevant notices, ccrti ficates, etc.
(c) Notwithstanding any other provision of this Trust Agreement, the Trustee or the Purchaser, as appropriate, shall immediately notify the Bond Insurer (to the attention of the General Counsel Office) if at any time there are insufficient moneys to make any payments of principal and/or interest on the Certificates as required and immediately upon the occurrence of any Event of Default hereunder.
(d) The Purchaser will pem1it the Bernd Insurer to discuss the affairs, finances and accounts of the Purchaser or any infom1ation the Bond Insurer may reasonably request regarding the security for the Certificates with appropriate officers of the Purchaser. The Trustee or the Purchaser, as appropriate, will pennit the Bond Insurer to have access to and to make copies of all books and records relating to the Certificates at any reasonable time. (c) The Bond [nsurer shall have the right to direct an accounting with respect to the Certificates at the Purchaser's expense. and the Purchaser·s failure to comply with such direction within thirty (30) days after receipt of written notice of the direction from the Bond Insurer shall be deemed a default hereunder; provided, however, that if compliance cannot occur within such period, then such period will be extended so long as compliance is begun within such period and diligently pursued, but only if such extension \vould not materially adversely affect the interests of any registered owner of the Certificates.
Section 11.05. Defeasance Provisions. Notwithstanding any other provision of this Trust Agreement, in the event that the principal and/or interest due with respect to the Certificates is paid by the Bond insurer pursuant to the Bond [nsurance Policy, the Certificates shall remain Outstanding for all purposes, not be dcfeased or otherwise satisfied and not be considered paid by the Purchaser, and all covenants, agreements and other obligations of the Purchaser under the Trust Agreement to the registered owners of the Certificates shall continue to exist and shall run to the benefit of the Bond Insurer, and the Bond Insurer shall be subrogated to the rights of such registered owners of the Certificates. To evidence such subrogation (i) in the case of subrogation as to claims for past due interest, the Trustee shall note the Bond Insurer's rights as subrogee on the registration books of the Purchaser maintained by the Trustee upon receipt from the Bond Insurer of proof of the payment of interest thereon to the registered owners of the Certificates, and (ii) in the case of subrogation as to claims for past due principal, the Trustee shall note the Bond Insurer's rights as subrogee on the registration books of the Purchaser maintained by the Trustee upon surrender of the Certificates by the registered owners thereof together with proof of the payment of principal thereof.
36 Section 11.06. Payment Procedure. As long as the Bond Insurance Policy shall be in full • force and effec:t, the Purchaser and the Trustee agree to comply with the following provisions:
(a) At least one ( ! ) day prior to all interest payment dates the Trustee will detennine whether there will be sufficient funds in the applicable funds and accounts to pay the principal of or interest on the Certificates on such interest payment date. [f the Trustee detennines that there wi 11 be insufficient funds in such funds or accounts, the Trustee shall so notify the Bond Insurer.
Such notice shall specify the amount of the anticipated deficiency. the Certificates to which such deficiency is applicable and whether such Certificates will be deficient as to principal or interest, or both. If the Trustee has not so noti lied the Bond Insurer at least one ( 1) day prior to an interest payment date, the Bond Insurer will make payments of principal or interest due with respect to the Certificates on or before the first day next following the date on which the Bond Insurer shall have received notice of nonpayment from the Trustee. (h) The Trustee shall, after giving notice to the Bond Insurer provided in (a) above, make available to the Bond Insurer and. at the Bond insurer's direction, to The Bank of New York, in New York, New York, as insurance trustee for the Bond Insurer or any successor insurance trustee (the ''Insurance Trustee .. ), the registration books of the Purchaser maintained by the Trustee and all records relating to the funds and accounts maintained under the Trust Agreement.
(c) The Trustee shall provide the Bond Insurer and the Insurance Trustee with a list of registered <)wners of Certificates entitled to receive principal or interest payments from the Bond Insurer under the terms of the Bond Insurance Policy, and shall make arrangements with the Insurance Trustee (i) to mail checks or drafts to the registered owners of the Certificates entitled to receive full or partial interest payments from the Bond Insurer and (ii) to pay principal with respect tc) the Certificates surrendered to the Insurance Trustee by the registered owners of the Certificates entitled to receive full or partial principal payments from the Bond Insurer. (d) The Trustee shall, at the time it provides notice to the Bond Insurer pursuant to (a) above, notify tegistered owners of the Certificates entitled to receive the payment of principal or interest thereon from the Bond Insurer (i} as to the fact of such entitlement, (ii) that the Bond Insurer will remit to them all or a part of the interest payments next coming due upon proof of the entitlement of the registered owners of the Certificates to interest payments and delivery to the Insurance Trustee, in fonn satisfactory to the Insurance Trustee, of an appropriate assignment of the right to payment of the registered owners of the Certificates, (iii) that should they be entitled to receive full payment of principal from the Bond Insurer, they must surrender their Certificates (along with an appropriate instrument of assignment in fom1 satisfactory to the Insurance Trustee to permit ownership of such Certificates to be registered in the name of the Bond Insurer) for payment to the Insurance Trustee, and not the Trustee, and (iv) that should they be entitled to receive partial payment of principal from the Bond Insurer, they must surrender their Certificates for payment thereon first to the Trustee who shall note on such Certificates the portion of the principal paid by the Trustee, and then, along with an appropriate instrument of assignment in form satisfactory to the Insurance Trustee, to the Insurance Trustee, which \vill then pay the unpaid portion of principal.
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(e) In the event that the Trustee has notice that any payment of principal of or interest with respect to a Certificate which has become due for payment and which is made to a registered owner of Certificates by or on behalf of the Purchaser has been deemed a preferential transfer and theretofore recovered from its registered owner pursuant to the United States Bankruptcy Code by a trustee in bankruptcy in accordance with the final, nonappealable order of a court having competent jurisdiction, the Trustee shall, at the time the Bond Insurer is notified pursuant to (a) above, notify all registered owners of the Certificates that in the event that any registered owner's payment is so recovered, such registered owner will be entitled to payment from the Bond Insurer to the extent of such recovery if sufficient funds are not otherwise available, and the Trustee shall furnish to the Bond Insurer its records evidencing the payments of principal of and interest on Certificates which have been made by the Trustee and subsequently recovered from registered owners of Certificates and the dates on which such payments were made.
Section 11.07. Trustee-Related Provisions. The Trustee may be removed at any time, at the request of the Bond Insurer, for any breach of the trust set forth in the Trust Agreement. The Trustee shall provide to the Bond Insurer prior written notice of any Trustee resignation. l\otv,1ithstanding any other provision of this Trust Agreement, in determining whether the rights of the registered owners of the Certificates \vill be adversely affected by any action taken pursuant to the terms and provisions of the Trust Agreement, the Trustee shall consider the effect on the registered owners of the Certificates as if there were no Bond Insurance Policy.
Notwithstanding any other provision of this Trust Agreement, no removal, resignation or termination of the Tmstee shall take effect until a successor, acceptable to the Bond Insurer, shall be appointed.
Section 11.08. Bond Insurer as Third Party Beneficiary. To the extent that the Trust Agreement confers upon or gives or grants to the Bond Insurer any right, remedy or claim under or by reason of the Trust Abrrecment, the Bond Insurer is hereby explicitly recognized as being a third-party beneficiary hereunder and may enforce any such right, remedy or claim conferred, given or granted under the Trust Agreement. Notwithstanding any other provision of the Trust Agreement, the Bond Insurer shall be entitled to the rights, remedies and claims set forth in the Trust Agreement so long as it is not in default under the Bond Insurance Policy.
Section l 1.09. Parties Interested Herein. Nothing in this Trust Agreement expressed or implied is intended or shall be construed to confer upon, or to give or grant to, any person or entity, other than the Purchaser, the Trustee, the Corporation, the Bond Insurer, and the registered owners of the Certificates, any right, remedy or claim under or by reason of the Trust Agreement or any covenant, condition or stipulation in the Trust Agreement, and any covenant, condition or stipulation hereoC all covenants, stipulations, promises and agreements in this Trust Agreement contained by and on behalf of the Purchaser shall be for the sole and exclusive benefit of the Purchaser, the Trustee, the Corporation, the Bond Insurer, and the registered owners of the Certificates, as applicable.
451,84K98 J 38
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ARTICLE XII .
MISCELLANEOUS
Section 12.01. Benefits of Trust Agreement Limited to Parties. Nothing contained herein, expressed or implied, is intended to give to any person other than the Purchaser, the Tmstee, the Corporation, the Bond Insurer and the Owners any claim, remedy or right under or pursuant hereto, and any agreement, condition, covenant or tem1 required herein to be observed or perfonncd by or on behalf of the Purchaser shall be for the sole and exclusive benefit of the Trnstee, the Corporation, the Bond Insurer and the Owners.
Section 12.02. Successor Deemed Included in all References to Predecessor. Whenever the Purchaser, the Corporation or the Trustee or any officer thereof is named or referred to herein, such reference shall be deemed to include the successor to the powers, duties and functions that are presently vested in the Purchaser, the Corporation or the Trustee or such officer, and all agreements, conditions, covenants and terms required hereby to be observed or performed by or on behalf of the Purchaser, the Corporation or the Trustee or any officer thereof shall bind and inure to the benefit of the respective successors thereof whether so expressed or not.
Section 12.03. Execution of Documents by Owners. Any declaration, request or other instrument that is pennitted or required herein to be executed by Owners may be in one or more instruments of similar tenor and may be executed by Owners in person or by their attorneys appointed in writing. The fact and date of the execution by any Owner or such person's attorney of any declaration, request or other instrument or of any writing appointing such attorney may be proved by the certificate of any notary public or other officer authorized to take acknowledgments of deeds to be recorded in the state or territory in which he purports to act that the person signing such declaration, request or other instrument or writing 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, or by such other proof as the Trnstee may accept that it deems sufficient.
The ownership of any Certificates and the amount, payment date, number and date of owning the same may be proved by the books required to be kept by the Trustee pursuant to the provisions of Section 2.08.
Any declaration, request or other instrument in writing of the Owner of any Certificate shall bind all future Owners of such Certificate with respect to anything done or suffered to be done by the Purchaser or the Trustee in good faith and in accordance therewith.
Section 12.04. Disgualitie<l Certificates. Unless all Certificates are then so owned or held, Certificates known to the Trustee to be owned or held by or for the account of the Corporation or the Purchaser shall not be deemed Outstanding for the purpose of any consent or other action or any calculation of Outstanding Certificates provided for in this Agreement, and shall not be entitled to consent to or take any other action provided for in this Agreement. For the purpose hereof no bank organized under the laws of the State and no national banking 39 association doing business in said State, or elsewhere, shall be deemed to be an agency of the • Corporation or of the Purchaser.
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The Trustee may adopt appropriate regulations to require each Owner of Certificates, before his consent provided for in this Agreement shall be deemed effective, to reveal if the Certificates as to which such consent is given arc disqualified as provided in this Section.
Section 12.05. Waiver of Personal Liability. No director, officer or employee of the Purchaser or the Corporation shall be individually or personally liable for the payment of the interest or principal or the prepayment premiums, if any, represented by the Certificates, but nothing contained herein shall relieve any director, officer or employee of the Purchaser or Corporation from the performance of any official duty provided by any applicable provisions of law or by the Installment Purchase Agreement or hereby.
Section 12.06. Acquisition of Certificates by Purchaser; Destruction of Certificates. All Certificates acquired by the Purchaser, whether by purchase or gift or otherwise shall be surrendered to the Trustee for cancellation. Whenever in this Agreement provision is made for the cancellation by the Trustee of any Certificates, the Trustee shall destroy such Certificates and deliver a certificate of such destruction to the Purchaser.
Section 12.07. Headings. Headings preceding the text of the several Articles and Sections hereof, and the table of contents, are solely for convenience of reference and shall not constitute a part of this Agreement or affect its meaning, construction or effect.
All references herein to "Articles." "Sections"' and other subdivisions arc to the corresponding Articles. Sections or subdivisions of this Agreement: and the words "herein,'' ''hereof." "hereunder"' and other words of similar import refer to this Agreement as a whole and not to any particular Article, Section or subdivision hereof Section 12.08. Funds and Accounts. Any fund required by this Agreement 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 shall at all times be maintained in accordance with sound industry practices and with due regard for the protection of the security of the Certificates and the rights of every Owner thereof Section 12.09. Partial Invalidity. If any one or more of the agreements, conditions, covenants or terms required herein to be observed or performed by or on the part of the Purchaser, the Corporation or the Trustee shall be contrary to law, then such agreement or agreements, such condition or conditions, such covenant or covenants or such term or tem1s shall he null and Yoid and shall be deemed separable from the remaining agreements, conditions, covenants and tem1s hereof and shall in no way affect the validity hereof or of the Certificates, and the Owners shall retain all the benefit, protection and security afforded to them under any applicable provisions of law. The Purchaser, the Corporation and the Trustee hereby declare that they would have executed the Trust Agreement, and each and every other article, section, paragraph, subdivision, sentence, clause and phrase hereof and would have authorized the 40 •
execution and delivery of the Certificates pursuant hereto irrespective of the fact that any one or more articles, sections, paragraphs, subdivisions, sentences, clauses or phrases hereof or the application thereof to any person or circumstances may be held to be unconstitutional, unenforceable or invalid.
Section 12.10. California Law. THIS AGREEMENT SHALL BE CONSTRUED AND GOVERNED IN ACCORDANCE WITH THE LAWS OF THE ST A TE.
Section 12.11. Effect of Bond Insurance Policy on Owners. Notwithstanding any other provision hereof, in detennining whether the rights of the Certificate Owners will be adversely affected by any action taken pursuant to the tem1s and provisions hereof, the Trustee shall consider the effect on the Certificate Owners as if there were no Bond Insurance Policy.
Section 12.12. Notices to Bond Insurer. The Trustee shall provide the Bond Insurer with notice of the prepayment, other than mandatory sinking fund prepayment, of any of the Certificates, including the principal amount, maturities and CUSIP numbers thereof; and such additional information as the Bond Insurer may reasonably request from time to time.
Section 12.13. Notices. All written notices to be given under this Agreement shall be given by mail to the party entitled thereto at its address set forth below, or at such address as the party tnay provide to the other parties in writing from time to time.
If to the Purchaser:
If to the Corporation:
If to the Trustee:
If to the Bond Insurer:
Baldy Mesa Water District
I 03 t 3 Duncan Road
Victorville, CA 92392
Attention: General Manager
Baldy Mesa Water District Public Facilities Corporation 103 13 Duncan Road
Victorville, CA 92392
Attention: President
Union Bank of California, N.A.
120 S. San Pedro Street, 4th Floor
Los Angeles, CA 90012
Attention: Corporate Trust Department
Ambac Assurance Corporation
One State Street Plaza
New York, New York 10004
Attention: Surveillance Department
Section 12.14. Execution in Counterparts. This Agreement may be executed in several counterparts. each of which shall be deemed an original, and all of which shall constitute but one and the same instrument.
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IN WITNESS WHEREOF. the parties hereto have executed this Trust Agreement by their officers thereunto duly authorized as of the day and year first written above.
UNION BA>l"K OF CALIFORNIA, N.A., as
Trustee
By:_____._.1_:>-'- . ,. _ _...__,:-·/~---------
Authorized Signatory
BALDY MESA WATER DISTRICT PUBLIC
FACILITIES CORPORATfON, as Corporation
/
By: __ --"'- :}~.....:c:.......::•---· _ _ ...,._.1/_· _ _ _____ _ President
BALDY MESA WATER DJSTRICT, as Purchaser
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Exhibit A
[FORM OF CERTIFICATE OF PARTICIPATION]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY (AS DEFINED IN THE TRUST
AGREEMENT) TO THE TRUSTEE FOR REGISTRATION OF TRANSFER,
EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE EXECUTED AND
DELIVERED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH
OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTIIER\VISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
INTEREST
RATE
PARITY CERTIFICATE OF PARTICIPATION
(Water System Improvement Project)
Series 2006
Evidencing the Direct, Undivided Fractional
Interest of the Owner Hereof in
Installment Payments to be Made by
BALDY MESA WATER DlSTRICT, CALIFORNIA
As the Purchase Price for Certain Property
Pursuant to an Installment Purchase Agreement With the
Baldy Mesa Water District Public Facilities Corporation
CERTIFJCATE
PAYMENT
DATE
August 1, _ _
DATED
DATE
REGISTERED OWNER: CEDE & CO.
PRINCIPAL AMOUNT:
CUSIP
DOLLARS
THIS IS TO CERTIFY that the Registered Owner (specified above) of this Parity Catificate of Participation (herein called the '·Certificate") is the owner of an undivided interest in the right to receive certain Installment Payments (as that term is defined in the Trust Agreement hereinafter mentioned) (the ''Installment Payments'') under that certain Installment A-1
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Purchase Agreement dated as of March I, 2006 (the "Installment Purchase Agreement'') by and between Baldy Mesa Water District Public Facilities Corporation (the "Corporation'') and the Baldy Mesa Water District (the "Purchaser"), the Installment Payments to be made thereunder having been assigned to Union Bank of California, N.A., as trustee (the ''Trustee"), having a corporate trnst office in Los Angeles, California. The Trustee has executed and delivered $13,070,000 aggregate principal amount of Certificates.
The Registered Owner of this Certificate is entitled to receive, subject to the tenns of the Installment Purchase Agreement and the Trust Agreement, on the Certificate Payment Date (specified above) the Principal Amount (specified above) representing a portion of the Installment Payments designated as principal coming due on the Certificate Payment Date, and to receive an interest component on such principal component at the interest rate per annum spcci fied above, from the Interest Pa1mcnt Date ( as hereinafter defined) preceding the date of execution hereof by the Trustee, unless such date of execution is after a Record Date (as hereinafter defined) and on or before the succeeding Interest Payment Date, in which case interest shall be payable from such Interest Payment Date, or unless such date of execution is on or before the first Record Date, in which case interest shall be payable from the Delivery Date, provided. however, that if, as shown by the records of the Trustee, interest represented by this Certificate shall be in default, Certificates executed in exchange for this Certificate surrendered for transfer or exchange shall represent interest from the last date to whjch interest has been paid in full or duly provided for with respect to this Certificate, or, if no interest has been paid or duly provided for with respect to this Certificate, from the Delivery Date. Interest with respect to this Certificate shall be paid on February I and August 1 of each year, commencing August I, 2006 (each, an "'Interest Payment Date''), to and including the Certificate Payment Date set forth above or the date of prior prepayment hereof. The principal and prepayment price with respect hereto arc payable in lawful money or the United States of America upon presentation and surrender at the Corporate Trust Office (as defined in the Trust Agreement) of the Trustee. Interest with respect hereto is payable by check of the Trustee mailed by first class mail on each Interest Payment Date to the Registered Owner hereof as of the close of business on the fifteenth day of the calendar month preceding such 1nterest Payment Date, whether or not such day is a business day (the "Record Date") at the address shown on the registration books maintained by the Trustee or, upon the request of an owner of at least $1,000,000 in aggregate principal amount of Cc:rtificates, by wire transfer in immediately available funds to an account in the United States designated by such owner in writing to the Trustee prior to the Record Date except in each case, that, if and to the extent that there shall be a default in the payment of the interest due on such Interest Payment Date, such defaulted interest shall be paid to the owner in whose name this Certificate is registered at the close of business on a special record date as determined by the Trustee.
REFERENCE IS MADE TO THE FURTHER PROVJSIONS OF THIS CERTIFICATE
SET FORTH ON THE REVERSE SIDE, WHICH SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH HERE.
The Purchaser has certified that all acts, conditions and things required by the Constitution and statutes of the State of California and the Trust Agreement to exist, to have happened and to have been performed precedent to and in the delivery of this Certificate, do exist have happened and have been performed in due time, form and manner as required by law. •
This Certificate has been executed by the Trustee pursuant to the tenns of a Trust Agreement, dated as of March 1, 2006, by and among the Trustee, the Corporation and the Purchaser (the "Trust Agreement"). Copies of the Trust Agreement and the Installment Purchase Agreement are on file at the Corporate Trust Office of the Trustee, and reference is made to the Tmst Agreement and the Installment Purchase Agreement and any and all amendments thereto for a description of the pledges and covenants securing the Certificates, the nature, extent and manner of enforcement of such pledges, the rights and remedies of the registered owners of the Certificates with respect thereto and the other terms and conditions upon which the Certificates are delivered thereunder.
The certificates arc payable from Installment Payments and other moneys on deposit in the funds and accounts created under the Trust Agreement. All Net Revenues and all amounts on deposit in the Water Fund (as such terms are defined in the Installment Purchase Agreement) arc irrevocably pledged to the payment of the Installment Payments and the Net Revenues shall not be used for any other purpose while any of the Installment Payments remain unpaid; provided that out of Net Revenues there may be apportioned such sums for such purposes as arc expressly pcm1itted in the Installment Purchase Agreement. Such pledge constitutes a lien on Net Revenues and, subject to application of Net Revenues and all amounts on deposit in the Water Fund as permitted in the Installment Purchase Agreement, the Water Fund and other funds and amounts created under the Installment Purchase Agreement for the payment of the Installment Payments and all Parity Obligations (as such term is defined in the Installment Purchase Agreement) in accordance with the terms of the Installment Purchase Agreement and the Trust Agreement. The obligation of the Purchaser to make Installment Payments is a special obligation of the Purchaser payable solely from such Net Revenues (as such term is defined in the Installment Purchase Agreement), the Water Fund and other funds described in the Installment Purchase Agreement and in the Trust Agreement and docs not constitute a debt of the Purchaser or of the State of California or of any political subdivision thereof in contravention of any constitutional or statutory debt limitation or restriction.
The Purchaser has covenanted not to issue evidences of indebtedness or incur other obligations that are payable from and secured by a pledge of and lien on Net Revenues senior to the pledge of and lien on Net Revenues of the Installment Payments. The Purchaser may at any time execute or issue any Parity Obligations, the payments of which, as the case may be, are on a parity v,ith the Installment Payments and which are secured by a pledge of or lien on the Net Revenues in accordance with the Installment Purchase Agreement.
The Certificates are authorized to be executed and delivered in the form of full y registered Ce,tificates in the denomination of $5,000 each or any integral multiple thereof; provided that no Certificate shall have principal represented thereby becoming payable in more than om: year. Subject to the limitations and conditions and upon payment of the taxes or charges. if any, as provided in the Trust Agreement, Certificates may be exchanged for a like aggregate principal amount of Certificates of the same Certificate Payment Date and interest rate of other authorized denominations at the Corporate Trust Office of the Trustee.
This Certificate is transferable by the Registered Owner hereof, in person or by such person's duly authorized attorney, at said office of the Trustee, but only in the manner, subject to the limitations and upon payment of the taxes or charges provided in the Trust Agreement, and A-3
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upon surrender of this Certificate for cancellation, accompanied by delivery of a duly executed written instrument of transfer in a form acceptable to the Trustee. Upon such transfer a new Certificate or Certificates, of the same Certificate Payment Date, and of authorized denomination or denominations, for a like aggregate principal amount and interest rate will be delivered to the transferee in exchange therefor. The Trustee may treat the Registered Owner hereof as the absolute owner hereof for all purposes, and the Trustee shall not be affected by any notice to the contrary.
The Trustee shall not be required to register the transfer or exchange of any Certificate (i) within 15 days preceding selection of Certificates for prepayment or (ii) selected for prepayment.
The Certificates maturing on or after August 1, 2017 are subject to optional prepayment prior to maturity upon notice to the Trustee on August 1, 2016, or any date thereafter, from any source of available funds, as a whole or in part, at a price of par together with interest accrued thereon to the date of Prepayment, without premium.
The Certificates shall be subject to prepayment prior to their respective stated maturities, as a whole on any date or in part on any Interest Payment Date, in the order of maturity as directed by the Purchaser in a written request provided to the Trustee at least 60 days prior to the prepayment date, or in the event the Purchaser has not directed the order of maturity, in inverse order of maturity, and by lot within each maturity in integral multiples of $5,000, from prepaid Installment Payments made by the Purchaser from net proceeds of insurance or condemnation awards upon the terms and conditions of, and as provided for, in the Trust Agreement and the Installment Purchase Agreement (provided that such prepayment shall occur on the next Interest Payment Date subsequent to such transfer with respect to which timely notice of prepayment can be provided) at a prepayment price equal to the principal amount thereof plus accrued interest thereon to the date fixed for prepa1ment, ,vithout premium.
The Certificates maturing on August 1, 2016, August 1, 2026, August I, 2029 and August 1, 203<1, respectively, are to be called for mandatory sinking fund prepayment prior to such maturity dates in part, by lot, at 100% of the principal amount thereof plus accrued interest to the prepayment date, as set forth in the Trust Agreement.
As provided in the Trust Agreement, notice of prepayment hereof shall be mailed, first class postage prepaid, at least thirty days but not more than sixty days prior to the prepayment date, to the Registered Owner of this Certificate. If this Certificate is called for prepayment and payment is duly provided therefor as specified in the Trust Agreement, interest represented hereby shall cease to accrue from and after the date fixed for prepayment. Any failure to receive such notice or defect in the notice or the mailing will not affect the validity of the prepayment of this Certificate.
To the extent and in the manner permitted by the terms of the Trust Agreement, the Trust Agreement and the rights and obligations of the Corporation, the Purchaser, the registered owners of the Certificates and of the Trustee may be modified or amended at any time with the pri~H \,\Titten consent of Financial Guaranty Insurance Corporation (the ''Bond Insurer") so long as the Bond Insurance Policy (as defined in the Trust Agreement) is in full force and effect with A-4
the written consents of the registered owners of a rnajotity in aggregate principal amount of the • Certi ficatcs then outstanding, provided, however, that no such modification or amendment shall (I) extend the stated maturities of the Certificates, or reduce the rate of interest represented thereby, or extend the time of payment of interest, or reduce the amount of principal represented thereby, or reduce any premium payable on the prepayment therco[ without the consent of the registered owner of each Certificate so affected,
(2) reduce the percentage of registered owners of Certificates whose consent is required for the execution of any amendment or modification of the Trust Agreement, or
(3) modify any of the rights or obligations of the Trustee or the Corporation v,.-ithout its respective written consent thereto.
To the extent and in the manner permitted by the terms of the Trust Agreement, the Trust Agreement and the rights and obligations of the Corporation, the Purchaser and of the registered o\vners of the Certificates may also be modified or amended at any time without the consent or the registered owners of any Certificates, but only to the extent permitted by law and only for any one or more of the following purposes---
( I) to add to the covenants and agreements of the Corporation or the Purchaser contained in this Agreement other covenants and agreements thereafter to be observed or to surrender any right or power herein reserved to or conferred upon the Corporation or the Purchaser, but only if such addition or surrender does not adversely affect the interests of the Owners of the Certificates; (2) to cure, correct or supplement any ambiguous or defective prov1s1on contained in this Agreement or in regard to questions arising under this Agreement, as the Corporation or the Purchaser may deem necessary or desirable, but only if such cure, correction or supplementation does not adversely affect the interests of the Owners of the Certificates; and
(3) to make such other amendments or modifications as may be in the best interests of the Owners of the Certificates.
No amendment without registered owner consent may modify any of the rights or obligations of the Trustee without its written consent thereto.
The Installment Purchase Agreement may be amended in accordance with the provisions thereof.
The Trust Agreement contains provisions permitting the Purchaser to make provision for the payment of the interest, principal and premium, if any, evidenced and represented by the Certificates so that such Certificates shall no longer be deemed to be outstanding under the terms of the Trnst Agreement.
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The Trustee has no obligation or liability to the Certificate owners for the payment of interest, principal or prepayment premium, if any, with respect to the Certificates out of the Trustee's own funds; the Trustee's sole obligations are those described in the Trust Agreement.
The recitals of facts in the Trust Agreement shall be taken as statements of the Purchaser and the Corporation and the Trustee docs not have any responsibility for the accuracy thereof.
The Trustee has executed this Certificate solely in its capacity as Trustee under the Trust Agreement.
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STATEMENT OF INSURANCE
Financial Guaranty Insurance Policy No. 25079BE (the "Policy") with respect to payments due for principal of and interest on this Certificate has been issued by Ambac Assurance Corporation (''Ambac Assurance''). The Policy has been delivered to The Bank of New York. New York, New York, as the Insurance Trustee under said Policy and will be held by such Insurance Trustee or any successor insurance trustee. The Policy is on file and available for inspection at the principal office of the Insurance Trustee and a copy thereof may be secured from Ambac Assurance or the Insurance Trustee. All payments required to be made under the Policy shall be made in accordance with the provisions thereof. The owner of this Certificate acknowledges and consents to the subrogation rights of Ambac Assurance as more fully set forth in the Policy.
lN WlTNESS WHEREOF, this Certificate has been executed by the manual signature of an authorized officer oft he Trustee, all as of the date set forth below.
Execution date: March , 2006
uNJON BANK OF CALIFORNIA, N.A., as Trustee
Authorized Officer
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[FORM OF ASSIGNMENT]
For \'alue received the undersigned do(es) hereby sell, assign and transfer unto ____ _________ the within-mentioned Certificate and hereby irrevocably constitutc(s) and appoint(s) _________ attorney, to transfer the same on the Certificate register 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) to this Assignment must
correspond with the name(s) as written on the
face of the within Certificate in every
particular, without alteration or enlargement or
any change whatsoever
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Exhibit B
FORM OF CONSTRUCTION FUND REQUISITION
Date: Requisition No. ______ _
Payment shall be made to:
Name:
Fim1/Corporation/Company:
Address:
Listed below in reasonable detail is a description of [ materials purchased and/or services rendered] in connection with certain capital improvements to the Baldy Mesa Water District (the "District") water system. The undersigned hereby certifies that (i) he/she is an authorized representative of the District, (ii) that each obligation mentioned herein is a proper charge against the Construction Fund under that certain Trust Agreement dated as of March 1, 2006 by and between Union Bank of California, N.A., as trustee and the District, as Purchaser, and (iii) this has not previously been disbursed by the Trustee from amounts in the Construction Fund.
Detail:
-------------------------
Charee:
$
$
$
s
S ______ _
S ______ _
Total $
Attached hereto is a bill or statement of account (if any) for each obligation.
By:
B-1
Baldy Mesa Water District
Authorized Representative
Item Number: 13
City Council / Board of Directors
Written Communications
Meeting of: October 06, 2026
Submitted By:
James Murawski, Airport Director
Subject:
Purchase of a 2028 Peterbilt Model 537 Water Truck
Recommendation:
That the Southern California Logistics Airport Authority (“SCLAA”) Board of Directors approve the purchase of a 2028 Peterbilt Model 537 Water Truck in the amount of $212,845.92.
Fiscal Impact:
This action will result in the expenditure of budgeted capital equipment funds from Airport Capital Equipment Fund 4500125-55045-95173 in the amount not to exceed $212,845.92. The budget for this equipment is as follows:
Account Description Current Budget
4500125-55045-95173 Water Truck $213,440
Strategic Plan Goal:
Goal E - Invest in Infrastructure. This equipment will allow Airport staff to efficiently maintain dust control throughout the Airport and at various job sites.
Background:
The Southern California Logistics Airport (“SCLA”) consists of over 2,000 acres of airfield areas and off-airport properties. The airfield area consists of two commercial-length runways, nine taxiways, numerous buildings, aircraft parking lots, drainage channels, and vast open and occupied areas slated for future development. The SCLA requires consistent maintenance to manage dust and soil compaction when undertaking various maintenance projects. The vast acreage of the SCLA and the corresponding maintenance needed to operate the airport require staff to frequently perform dust control by spraying water on dirt roads and grading sites throughout the airport. Additionally, moisture application is essential for proper soil compaction during trench backfilling and erosion control work across the facility.
To manage dust control and soil compaction, staff utilized a 1991 Ford L8000 water truck (“1991 Water Truck”). The 1991 Water Truck was in service for over 30 years before being disposed of in August 2023, as its age severely impacted its effectiveness.
The 1991 water truck had numerous issues that warranted replacement of the equipment.
The transmission failed on this vehicle and had become cost prohibitive to repair.
Furthermore, the 1991 water truck was out of compliance with ever-increasing California emissions standards, resulting in its relegation to low use status, minimizing its utility and making it fiscally irresponsible to maintain.
Staff proposes purchasing a new 2028 Peterbilt Model 537 Water Truck to replace the disposed 1991 Ford L8000 water truck.
Discussion:
The proposed purchase of a new 2028 Peterbilt Model 537 Water Truck (“2028 Water Truck”) will provide Airport staff with reliable, compliant equipment to support its maintenance activities. The 2028 Water Truck has modern operational advantages that directly address the reliability issues, high maintenance costs, and frequent downtime associated with operating the old 1991 Water Truck. The chassis is equipped with an integrated Klein K-200 water tank assembly, featuring a 2,000-gallon capacity. Staff anticipate cost savings derived from reduced maintenance costs and productivity gains.
The 2028 Water Truck will allow Airport staff to work efficiently and effectively.
To facilitate the procurement of this much-needed equipment, the purchase of the 2028 Water Truck is proposed through Rush Truck Centers in Fontana (“Rush”), a dealer for Peterbilt, and a participant in a cooperative agreement program called Sourcewell.
Sourcewell is a public agency that offers a multitude of cooperatively contracted specialized products and equipment to government entities. Per Municipal Code §2.28.120 “Purchases of supplies and equipment through cooperative purchasing arrangements” allows for the procurement of equipment directly from vendors engaged in an approved cooperative agreement program without further solicitation. The Sourcewell Cooperative Agreement has been reviewed and approved by the City of Victorville Purchasing Manager. It fulfills the competitive bidding requirements, thus providing significant savings, and offers contract purchasing solutions from Peterbilt, to enable buying agencies to work smarter and more efficiently, while streamlining the required purchasing process.
The Rush quote includes the cost of the 2028 Peterbilt Truck including the water tank, applicable sales tax, and delivery charges. Therefore, staff requests the Southern California Logistics Airport Authority Board of Directors approve the purchase of a 2028 Peterbilt Model 537 Water Truck in the total amount of $212,845.92, from Rush Truck Centers in Fontana.
Staff remains available for any questions or comments you may have.
Prepared By:
Jose Gutierrez, Airport Business Technician
Samuel Evans, Airport Business Analyst
Attachments: A. Rush Truck Center Proposal
B. Sourcewell – Contract # 032824-PMC
C. Municipal Code 2.28.120
D. Equipment Visual Representation
ATTACHMENT A
RUSH TRUCK CENTER
PROPOSAL
ATTACHMENT B
SOURCEWELL –
CONTRACT #032824-PMC
ATTACHMENT C
MUNICIPAL
CODE 2.28.120
2.28.120 Purchases of supplies and equipment through cooperative purchasing arrangements.
(a) Provided that city council approval is obtained for purchases in excess of one hundred twenty-five thousand dollars, the city manager may purchase supplies and equipment without complying with the quotation or bidding requirements of this chapter, if such purchases are based on an agreement or cooperative purchasing program entered into by any local, state or federal governmental agency, regardless of whether the city is named party to the agreement or an actual participant in such a program, provided it satisfies the criteria below:
(1) Any local, state, or governmental agency program, if the underlying purchase was made using quotation or bid procedures at least as restrictive as the city's; or (2) The California Multiple Award Schedules (CMAS), the California Communities Purchasing Program, the Western States Contracting Alliance (WSCA), the County of Los Angeles, the U.S. Communities Government Purchasing Alliance, California State Contracts administered by the Department of General Services (DGS) or other purchasing programs deemed by the city manager to be in conformance with the city's quotation or bid procedures to permit reasonable competition. (b) Whenever cooperative purchasing is used, the supplies and equipment purchased must be the same and be offered at the same price as the supplies and equipment subject to the agreement or program, except that (1) up to ten percent variation is allowed for customizing the order or for desirable city options, and (2) in addition, a cost of living adjustment (using the Riverside-San Bernardino-Ontario Counties Consumer Price Index—Urban, All Items) can be added for up to three years.
(Ord. No. 2381, § 2, 9-18-18; Ord. No. 2429, § 9, 5-17-22)
ATTACHMENT D
EQUIPMENT VISUAL
REPRESENTATION
Item Number: 14
City Council / Board of Directors
Written Communications
Meeting of: October 6, 2026
Submitted By:
Tony Camargo, Deputy City Manager
Subject:
Consultant/Professional Services Provider Agreement with Goodwill Industries of Southern California for Workforce Development and Employment Readiness Services Funded by the Community Cleanup and Employment Pathway Grant Recommendation:
That the Honorable City Council:
(1) Approve a Consultant/Professional Services Provider Agreement with Goodwill Industries of Southern California for Workforce Development and Employment Readiness Services;
(2) Authorize the City Manager or his designee to execute the associated agreement with Goodwill Industries of Southern California in an amount not to exceed $130,750; and
(3) Authorize the City Manager to make any non-substantive changes as deemed necessary by the City Attorney.
Fiscal Impact:
The proposed agreement will use the $130,750 already allocated to contract services within the $300,000 Community Cleanup and Employment Pathway (CCEP) grant accepted and appropriated by the City Council on May 19, 2026 (Attachments B & C).
This action requests no additional appropriation.
Account code Description Amount
2707501E-43110-20596
(Revenue)
CCEP grant revenue
(previously approved total)
$300,000.00
2707501E-52300-20596
(Expenditure)
Contract services allocation
for Goodwill agreement
$130,750.00
Strategic Plan Goal:
This item aligns with Goal D of the Strategic Plan; specifically, Strategies 1, 3, and 4, which state that, in order to achieve the goal of reducing homelessness, the City should expand on the existing homelessness outreach network to effectively engage the homeless community in services; evaluate the effectiveness of coordination of homelessness services; and complete construction and open the Wellness Center campus including low-barrier emergency shelter, recuperative care facility, medical clinic, and wraparound supportive services.
Background:
Grant Acceptance
On May 19, 2026, the City Council adopted Resolution No. 26-047 accepting a $300,000 CCEP grant from the California Department of Transportation (Caltrans) for the Old Town Beautification and Workforce Empowerment Initiative (Attachment B). The Council also adopted Resolution No. 26-048 amending the Fiscal Year 2025–2026 budget to accept the CCEP funds (Attachment C). The initiative combines cleanup and beautification work with employment pathways for Wellness Center clients facing barriers to employment. Of the grant award, $130,750 was allocated for contracted workforce development services; the remaining funds support supplies and City staff costs.
Workforce Development Funding
The original grant application identified the Wellness Center operator, Symba Center, to provide the workforce development component. This component includes job readiness, résumé development, interview preparation, workplace expectations, soft skills, training and hands-on experience associated with environmental cleanup activities. Following implementation discussions from June through August 2026, Symba Center notified the City on August 25, 2026, that it would not perform this component because of concerns about administering stipends, wages and other payments to participating clients. The services therefore require another qualified provider. Caltrans has approved the substitution of Goodwill Industries of Southern California (Goodwill) for this portion of the approved project.
Discussion:
Workforce Development Program
The agreement with Goodwill will provide workforce development and employment readiness services for up to 15 Wellness Center participants. Goodwill has experience serving people who face barriers to employment and has provided similar workforce development services for the City in prior years. Its services will help participants build job readiness skills, gain work experience and pursue longer-term employment. The City will administer the agreement and monitor services and invoices against the approved grant budget.
Procurement Process
The City Manager approved staff’s September 17, 2026, memorandum, requesting authorization to proceed directly with Goodwill under Victorville Municipal Code Section
2.28.280(c), titled “Contracts – Informal process.” Under the informal professional services process, departments generally contact at least three qualified firms, but that provision allows the City Manager to authorize a specific service contract. The memorandum documents why Goodwill was selected including the workforce component was part of the approved project, Symba Center withdrew from that component, Caltrans permits a qualified replacement, Goodwill has relevant experience, and the grant has a fixed performance period. All reimbursable project activities must be completed by July 30, 2027. The City Manager’s approval addressed the provider selection; this Council action authorizes execution of the agreement.
The proposed agreement with Goodwill uses the existing $130,750 contract services allocation. The Caltrans grant agreement does not identify Symba Center as the required provider, so the provider change will not require an amendment to the previously executed agreement.
Therefore, staff recommends that the Honorable City Council approve a Consultant/Professional Services Provider Agreement with Goodwill for Workforce Development and Employment Readiness Services, authorize the City Manager or his designee to execute the associated agreement with Goodwill in an amount not to exceed $130,750 and authorize the City Manager to make any non-substantive changes as deemed necessary by the City Attorney.
Staff remains available for any questions you may have.
Prepared By:
Mica Schuler, Economic Development Administrator
Attachments: A. Agreement with Goodwill Industries of Southern California B. Resolution No. 26-047, Acceptance of CCEP Grant
C. Resolution No. 26-048, Budget Amendment
D. 09.17.26 Memo to the City Manager - CCEP Workforce Partner Procurement
Attachment A
Agreement with Goodwill
Industries of Southern
California
1 Consultant/Professional Serv. Agmt/Goodwill Industries/Old Town Beaut Workforce Dev/Project CFC27-048
CONSULTANT/PROFESSIONAL SERVICES AGREEMENT
BETWEEN
THE CITY OF VICTORVILLE
AND
GOODWILL INDUSTRIES OF SOUTHERN CALIFORNIA
FOR
OLD TOWN BEAUTIFICATION WORKFORCE DEVELOPMENT INITIATIVE
CALTRANS COMMUNITY CLEANUP & EMPLOYMENT PATHWAYS (CCEP) GRANT CITY PROJECT NO. CFC27-048
THIS CONSULTANT/PROFESSIONAL SERVICES AGREEMENT (hereinafter “Agreement”), dated September 23, 2026, for reference purposes only, is made and entered into by and between THE CITY OF VICTORVILLE, a California municipal corporation and charter city, hereinafter the “City”, and GOODWILL INDUSTRIES OF SOUTHERN CALIFORNIA, a California nonprofit corporation, hereinafter “Consultant.” City and Consultant are sometimes hereinafter referred to individually as a “Party” and collectively as the “Parties.”
RECITALS
WHEREAS, on May 19, 2026, the City Council of the City of Victorville (“City Council”) adopted Resolution No. 26-047 and approved acceptance of the California Department of Transportation (“CALTRANS”) Community Cleanup and Employment Pathways ("CCEP") Grant in the amount of $300,000.00 to support workforce development, employment readiness, and community beautification activities for individuals experiencing homelessness or housing instability; and
WHEREAS, Pursuant to Resolution No. 26-047, the City Manager executed CALTRANS’ Restricted Grant Agreement No. 08-CCEP-05 (hereinafter the “RGA”); and WHEREAS, pursuant to the City’s application, the City dedicated $130,750.00 of said CCEP Grant to create workforce development and employment pathway opportunities specifically for Victorville Wellness Center participants, with the goal of increasing self-sufficiency, income stability, and successful transitions to permanent housing (collectively hereinafter the “Services”, which are more fully described in the Scope of Services attached hereto as Exhibit A); and WHEREAS, although not originally designated in the City’s CCEP Grant application to provide the Services specified herein, Consultant is experienced and well-known for providing workforce development services. Given the short period in which the Services are to be performed and the grant funds expended, CALTRANS recently approved the City’s use of Consultant in lieu of Symba Center, which due to reasons beyond the City’s control, was unable to perform as specified in the application; and
WHEREAS, Consultant desires to furnish the Services and represents and warrants that it is fully qualified to perform the Services required by this Agreement by virtue of its experience and the training, education, and expertise of its principals and its employees; and WHEREAS, Consultant has been advised that the services to be provided under this Agreement are funded in whole or in part with financial assistance pursuant to the RGA and agrees to comply with all applicable rules and regulations to which City is bound by the terms of 2 Consultant/Professional Serv. Agmt/Goodwill Industries/Old Town Beaut Workforce Dev/Project CFC27-048 said RGA which is attached to this Agreement as Exhibit D, and further detailed in Section 12 and referenced in other provisions of this Agreement; and WHEREAS, in light of the facts set forth above, the City desires to retain Consultant to provide, on an independent contractor basis, professional services to the City for the Old Town Beautification Workforce Development Initiative, City Project No. CFC27-048 (hereinafter the “Project”).
NOW THEREFORE, IN CONSIDERATION OF THE COVENANTS, CONDITIONS AND
PROMISES CONTAINED HEREIN AND FOR SUCH OTHER GOOD AND VALUABLE
CONSIDERATION, RECEIPT OF WHICH IS HEREBY ACKNOWLEDGED, THE PARTIES HERETO AGREE AS FOLLOWS:
Section 1. RECITALS
The foregoing Recitals constitute the factual basis upon which City and Consultant have entered into this Agreement. City and Consultant acknowledge the accuracy of the Recitals, and therefore incorporate them into this Agreement, including any definitions set forth therein.
Section 2. RENDITION AND SCOPE OF SERVICES
Consultant agrees to render the Services to the City for the Project in accordance with the terms and conditions of this Agreement and the RGA. The scope of Consultant’s Services shall consist of the Services set forth in Exhibit A.
Section 3. COMPENSATION; BUDGET
a. Consultant agrees to perform all the Services described in Section 2 of this Agreement for a total sum not to exceed ONE HUNDRED THIRTY THOUSAND SEVEN HUNDRED FIFTY AND 00/100 DOLLARS ($130,750.00). No expense reimbursements, including, but not limited to, reimbursements for travel, parking, lodging, and/or meals shall be paid to Consultant unless such expense reimbursements: (i) are specifically provided for and described by nature and type in the budget attached hereto as Exhibit B; (ii) appear on Consultant’s monthly invoices to City; (iii) are supported by appropriate receipts, proof of payment, and other such documentation as the City and the provisions of RGA require; and (iv) are directly related to the Services to be performed under this Agreement. Travel and per diem reimbursements and third-party contract reimbursements to Consultant or its subrecipients, contractors, or subcontractors, will be allowable as Project costs only after those costs have been incurred and paid for by Consultant, its subrecipients, contractors, and subcontractors. In addition, any and all reimbursements shall be made in accordance with any City policy governing the same. b. The City shall pay Consultant as set out in Exhibit B; provided, however, that nothing in said Exhibit B shall be deemed or construed to modify, expand, override, or supersede the terms, conditions, or provisions contained in this Agreement, including, without limitation, those specified in Sections 5, 12, or in the RGA. The provisions of Exhibit B notwithstanding, in order to receive payments, Consultant shall be required to submit to the City detailed monthly invoices which include, as applicable, a description of all services/tasks performed; the number of hours expended on each service/task; the name of the person performing the service/task; and expense reimbursement information, if any, as required by Section 3.a, above. Provided that invoices are sufficiently detailed and correct, expenses are allowable under the RGA, and 3 Consultant/Professional Serv. Agmt/Goodwill Industries/Old Town Beaut Workforce Dev/Project CFC27-048 Services have been satisfactorily rendered, Consultant’s invoices shall be paid by the City approximately thirty (30) working days following receipt. c. Cost Principles. Consultant agrees to comply with Title 2, Code of Federal Regulations (CFR), Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (“2 CFR Part 200”).
(1) Consultant agrees, and will assure that its contractors, sub-recipients, in-kind contributors, and subcontractors will be obligated to agree, that (a) Contract Cost Principles and Procedures, 48 CFR, Federal Acquisition Regulations System, Chapter 1, Part 31, et seq., shall be used to determine the allowability of individual Project cost items; and (b) all parties shall comply with Federal administrative procedures in accordance with 2 CFR Part 200. Every sub-recipient receiving Project funds as a sub-recipient, contractor, or subcontractor under this Agreement shall comply with Federal administrative procedures in accordance with 2 CFR Part 200 to the extent applicable. (2) Prior to Consultant seeking reimbursement of indirect costs, Consultant must have identified estimated indirect cost rate in Attachment II to the RGA, prepare and submit annually to CALTRANS for review and approval an indirect cost rate proposal and a central service cost allocation plan (if any) in accordance with 2 CFR Part 200 and Chapter 5 of the Local Assistance Procedures Manual which may be accessed at:
https://dot.ca.gov/-/media/dot-media/programs/localassistance/documents/lapm/ch05.pdf. Indirect costs are not a part of this grant allocation.
(3) Consultant agrees and shall require that all its agreements with subconsultants and subrecipients contain provisions requiring adherence to this Subsection c in its entirety.
Section 4. CONFLICTING PROVISIONS; INTERPRETATION
a. The terms, conditions, and provisions contained in the body of this Agreement, together with those contained in any exhibits or appendices prepared or supplied by the City (whether attached to this Agreement or incorporated solely by reference) shall, in the event of any conflict or ambiguity, control and take precedence over any terms, conditions, or provisions contained in any document prepared or submitted by Consultant (whether attached to this Agreement as an exhibit or incorporated solely by reference), including without limitation, any proposal, scope of services or work, or cost or fee schedule. b. This Agreement is in all respects intended by each Party hereto to be deemed and construed to have been jointly prepared by the Parties, and the Parties hereby expressly agree that any uncertainty or ambiguity existing herein shall not be interpreted against either of them.
Except as limited by this Section 4 or other express provisions of this Agreement, all the applicable rules of interpretation of contract shall govern.
Section 5. PREVAILING WAGE AND RELATED LABOR PROVISIONS Consultant is aware of and acknowledges the requirements of California Labor Code Sections 1720 through 1861, and those set forth in Title 8 of the California Code of Regulations, Section 16000 et seq. (collectively hereinafter the “Prevailing Wage Law”), which require the 4 Consultant/Professional Serv. Agmt/Goodwill Industries/Old Town Beaut Workforce Dev/Project CFC27-048 payment of prevailing wage rates and compliance with other labor-related requirements for certain "public works" and "maintenance" projects including, but not limited to, the design and preconstruction phases of a covered public works project (such as land surveying and materials testing), as well as postconstruction phases (such as inspection services). If the Services being provided under this Agreement, either in whole or in part, constitute “public works” or “maintenance”, as the Prevailing Wage Law defines those terms, Consultant and its subcontractors (if any), shall comply with all applicable provisions of the Prevailing Wage Law, including without limitation, the provisions of Exhibit C attached hereto. Consultant shall defend, indemnify, and hold the City, its elected officials, officers, employees, and agents free and harmless from any claims, liabilities, costs, penalties, or interest arising out of any failure or alleged failure by Consultant to comply with the Prevailing Wage Law.
Section 6. TERM
Unless earlier terminated in accordance with the provisions of Section 21, the term of this Agreement shall be for a period of not more than Nine (9) Months, commencing on October 1, 2026 (the “Effective Date”) and expiring on June 30, 2027 (the “Initial Term”). This Agreement shall automatically terminate and end upon the expiration of the Initial Term unless: (a) option periods are provided for in this Section and are exercised by the City; or (b) the term of this Agreement is extended by written agreement of the Parties prior to the expiration of the Initial Term. Consultant shall complete the Services within the term of this Agreement and shall meet any other established schedules and deadlines. Consultant shall not receive reimbursement or payment for Services rendered after June 30, 2027.
Section 7. INDEPENDENT CONTRACTOR STATUS
a. It is understood and agreed that Consultant (including Consultant’s employees/personnel) is an independent contractor and that no relationship of employeremployee exists between the Parties hereto for any purpose whatsoever. Neither Consultant nor any of Consultant's officers, employees, or agents shall obtain rights to retirement, health care, or any other benefits which may otherwise accrue to City's employees, and Consultant expressly waives any claim Consultant may have to any such rights. Consultant understands and agrees that this Agreement does not create a partnership, joint venture, association, or employeremployee relationship between the Parties. b. The employees and/or personnel performing the Services under this Agreement on behalf of Consultant shall at all times be under Consultant’s exclusive direction and control.
Consultant shall pay all wages, salaries, and other amounts due to its employees and/or personnel in connection with the performance of the Services and shall be responsible for all reports and obligations respecting them, including but not limited to, social security, income tax withholding, unemployment compensation, workers’ compensation, and other similar matters.
City shall have no voice in the selection, discharge, supervision, or control of Consultant’s employees/personnel, or in fixing their number, compensation, or hours of service. c. Nothing in this Agreement shall be interpreted to preclude Consultant from working for other persons or agencies during the term of this Agreement, provided that such work does not create a conflict of interest. Nor shall this Agreement be interpreted to imply that the Parties must maintain any contractual relationship with each other on a continuing basis after termination of this Agreement. Except as may be specifically provided elsewhere in this Agreement, the City does not require that Consultant use City facilities, equipment or support services, or work in City 5 Consultant/Professional Serv. Agmt/Goodwill Industries/Old Town Beaut Workforce Dev/Project CFC27-048 locations. The Consultant further acknowledges that the Services to be provided under this Agreement are outside of the usual course of the City's business operations and that Consultant is customarily engaged in an independent trade, profession, or business which provides services similar to those it will provide to City hereunder.
d. Any provision of this Agreement that may appear to give the City a right to direct Consultant concerning the details of performing its obligations and/or duties under this Agreement, or to exercise any control over such performance, shall mean only that Consultant shall follow the direction of the City concerning the results of the performance.
Section 8. NOT AGENT OF THE CITY
Nothing contained in this Agreement shall be deemed, construed, or represented by the City or Consultant or by any third person to create the relationship of principal and agent.
Consultant shall have no authority, express or implied, to act on behalf of the City in any capacity whatsoever as an agent, nor shall Consultant have any authority, express or implied, to bind the City to any obligation whatsoever.
Section 9. PRINCIPAL REPRESENTATIVES OF THE PARTIES
a. ________________, ___________________ or his/her designee, is designated as the principal representative of Consultant for purposes of communicating with the City on any matter associated with the performance of the Services set forth in this Agreement. b. William Lamas, Homelessness Solutions Manager or his/her designee (hereinafter “City’s Project Manager”) shall be the principal representative of the City for purposes of communicating with Consultant on any matter associated with the performance of the Services set forth in this Agreement, and such other functions and duties as are specified elsewhere in this Agreement.
c. Either Party may designate another individual as its principal representative by giving written notice of such designation to the other Party in the manner set forth in this Agreement.
Section 10. LICENSES AND PERMITS
Consultant warrants and represents that it, its employees, and its subcontractors or subconsultants have obtained and will maintain at all times during the Initial Term of this Agreement and during any Option Period(s) or other extensions of the term hereof, all business licenses, professional licenses or certifications, regulatory approvals, or permits necessary for performance of the Services, including without limitation, a City of Victorville business license.
Section 11. STANDARD OF CARE; FAMILIARITY WITH SERVICES a. Consultant agrees to and shall perform all Services required by this Agreement in a professional and competent manner, in accordance with the degree of skill and diligence which is normally employed by reputable professionals performing similar services under similar conditions in the same or similar locality. Consultant represents and maintains that it is skilled in the professional calling necessary to perform the Services and warrants that all its employees 6 Consultant/Professional Serv. Agmt/Goodwill Industries/Old Town Beaut Workforce Dev/Project CFC27-048 and subcontractors/subconsultants shall have sufficient skill and experience to perform the Services assigned to them. By executing this Agreement, Consultant warrants that it:
(1) Has thoroughly investigated and considered the Services to be performed; (2) Has investigated the issues regarding the scope of services to be provided; (3) Has carefully considered how the Services and any related work should be performed; and
(4) Fully understands the facilities, difficulties, and restrictions associated with performance of the Services required by this Agreement. b. Should Consultant discover any latent or unknown conditions materially differing from those inherent in the Services or as represented by the City, Consultant shall immediately inform the City of such fact and shall not provide any Services, except at Consultant's risk, until written instructions are received from City’s Project Manager. c. Without additional compensation to Consultant and at no cost to City, Consultant shall correct or revise all errors, mistakes, or deficiencies in its work product, studies, reports, designs, drawings, specifications, or other Services.
Section 12. GRANT FUNDING AND ADDITIONAL FEDERAL REQUIREMENTS a. CCEP RGA. This Agreement is funded in whole or in part with assistance from CALTRANS as described in the RGA attached hereto as Exhibit D. Consultant and its subcontractors and/or subconsultants (if any) agree to and shall comply with all requirements, laws, and/or rules and regulations specified in or applicable to the RGA in Exhibit D in the performance of this Agreement. Notwithstanding anything to the contrary herein, all applicable financial assistance program document(s) and/or grant agreement rules, requirements, statutes, and regulations specified in Exhibit D shall be deemed to control in the event of a conflict with other provisions of this Agreement. Failure to comply with the applicable provisions of RGA shall constitute grounds for the City to terminate this Agreement. In the event Consultant enters into any subcontracts for the performance of Services hereunder, Consultant shall include and enforce all terms required in Exhibit D in each subcontract.
b. Debarment and Suspension. Consultant certifies that neither it nor its principals or subconsultants/subcontractors is presently debarred, suspended, proposed for debarment, declared ineligible, or voluntarily excluded from participation in this transaction by any federal department or agency. (See the following United States General Services Administration's System for Award Management website https://www.sam.gov). c. Procurement of Recovered Materials. Consultant shall comply with section 6002 of the Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act of 1976 as amended, 42 U.S.C. 6962. The requirements of Section 6002 include procuring only items designated in the guidelines of the Environmental Protection Agency (EPA) at 40 CFR part 247 that contain the highest percentage of recovered materials practicable, consistent with maintaining a satisfactory level of competition, where the purchase price of the item exceeds $10,000 or the value of the quantity acquired during the preceding fiscal year exceeded $10,000; procuring solid waste management services in a manner that maximizes energy and resource 7 Consultant/Professional Serv. Agmt/Goodwill Industries/Old Town Beaut Workforce Dev/Project CFC27-048 recovery; and establishing an affirmative procurement program for procurement of recovered materials identified in the EPA guidelines.
d. Domestic Preference for Procurements. Consultant should, to the greatest extent practicable, and consistent with law, provide a preference for the purchase, acquisition, or use of goods, products, or materials produced in the United States. This includes, but is not limited to iron, aluminum, steel, cement, and other manufactured products. For purposes of this clause:
Produced in the United States means, for iron and steel products, that all manufacturing processes, from the initial melting stage through the application of coatings, occurred in the United States. Manufactured products mean items and construction materials composed in whole or in part of non-ferrous metals such as aluminum; plastics and polymer-based products such as polyvinyl chloride pipe; aggregates such as concrete; glass, including optical fiber; and lumber. e. Prohibition on Certain Telecommunications and Video Surveillance Equipment or Services. Federal loan or grant funds must not be obligated or expended to procure or obtain, extend or renew a contract to procure or obtain, or enter into a contract (or extend or renew a contract) to procure or obtain equipment, services, or systems that use covered telecommunications equipment or services as a substantial or essential component of any system, or as critical technology as part of any system, as further specified in 2 CFR §200.216, which is fully incorporated herein by this reference. Consultant agrees to comply with this regulation in the performance of this Agreement.
Section 13. CONFLICT OF INTEREST
a. The City covenants that no governing body member, officer, agent, or employee of the City engaged in the selection, award, or administration of this Agreement shall have any prohibited conflict of interest, whether real or apparent, in this Agreement or the proceeds thereof.
No officer or employee of the City shall have any financial or other interest in this Agreement that would violate Government Code Section 1090 et seq. (“Section 1090”); Government Code Section 81000 et seq. (the “Political Reform Act”), including the regulations promulgated by the Fair Political Practices Commission (“FPPC”) at 2 Cal. Code Regs. Section 18104 et seq. (“FPPC Regulations”); or 2 CFR Section 200.318(c).
b. Consultant warrants and represents that it has no known relationships with third parties, City Council members, or officers/employees of the City which would: (1) present a conflict of interest pursuant to Section 1090, the Political Reform Act, the FPPC regulations, or any other applicable conflict of interest law; or (2) prevent Consultant from faithfully performing the Services required by this Agreement. Consultant further specifically warrants and represents that it has not employed any official or employee of the City in the twelve months immediately preceding the earlier of (1) the Effective Date of this Agreement or (2) the date it submitted its proposal to the City, and agrees not to employ any official or employee of the City during the Initial Term of this Agreement or during any Option Period(s) or other extensions of the term hereof. c. Consultant covenants that it does not have any interest, nor shall it acquire any interest, directly or indirectly, which would conflict in any manner with the performance of Consultant’s Services under this Agreement, or which would constitute a violation of any state or federal conflict-of-interest law, including, without limitation, the laws and regulations set forth in subdivision a of this Section 13. Consultant further covenants that in the performance of such Services, no officer, employee, or agent of Consultant having such interest shall be employed by 8 Consultant/Professional Serv. Agmt/Goodwill Industries/Old Town Beaut Workforce Dev/Project CFC27-048 it. Acquisition or maintenance of a conflicting interest by Consultant may result in termination of this Agreement by the City.
d. If Consultant meets the definition of a “consultant” as set forth in Section 18700.3 of the FPPC Regulations, Consultant shall disclose its financial interests as required by the City’s Conflict of Interest Code, the FPPC Regulations, and the Political Reform Act, as such may be amended from time to time, by completing and filing a FPPC Form 700 - Statement of Economic Interests with the City Clerk’s office pursuant to written instructions provided by the City Clerk.
Section 14. COMPLIANCE WITH LAWS
a. General. Consultant shall keep itself informed of and in compliance with all applicable federal, state, or local laws (including the Victorville Municipal Code “VMC”), to the extent such laws control or otherwise govern the performance of the Services under this Agreement. Consultant’s compliance with applicable laws shall include, without limitation, all applicable Cal/OSHA requirements; any rule, regulation, or bylaw governing the conduct or performance of Consultant or its employees, officers, or board members; and the Americans with Disabilities Act (ADA) of 1990, as amended, which prohibits discrimination on the basis of disability, as well as all applicable regulations and guidelines issued pursuant to the ADA (42 USC Section 12101 et seq.). In particular, Consultant shall perform the Services required hereunder in accordance with all applicable federal, state, and local laws and codes, including those specified in the RGA attached hereto as Exhibit D.
b. Equal Employment Opportunity; Nondiscrimination. Consultant represents that it is an equal opportunity employer and agrees to comply with applicable state and federal laws and regulations governing equal employment opportunity and non-discrimination. Consultant shall comply with the following provisions and agrees to include them in all contracts and subcontracts it enters into for the provision of Services under this Agreement:
(1) During the performance of this Agreement, Consultant, its contractors, its subrecipients, and its subcontractors shall not deny the contract's benefits to any person on the basis of race, religious creed, color, national origin, ancestry, physical disability, mental disability, medical condition, genetic information, marital status, sex, gender, gender identity, gender expression, age, sexual orientation, or military and veteran status, nor shall they discriminate unlawfully against any employee or applicant for employment because of race, religious creed, color, national origin, ancestry, physical disability, mental disability, medical condition, genetic information, marital status, sex, gender, gender identity, gender expression, age, sexual orientation, or military and veteran status.
Consultant shall ensure that the evaluation and treatment of employees and applicants for employment are free of such discrimination.
(2) Consultant shall comply with the provisions of the Fair Employment and Housing Act (Gov. Code Sections 12900 et seq.), the regulations promulgated thereunder (California Code of Regulations, Title 2, Sections 11000 et seq.), the provisions of Article
9.5, Chapter 1, Part 1, Division 3, Title 2 of the Government Code (Gov. Code Sections 11135-11139.5), and the regulations or standards adopted by CALTRANS to implement such article.
(3) Consultant shall permit access by representatives of the Department of Fair Employment and Housing and CALTRANS upon reasonable notice at any time during the 9 Consultant/Professional Serv. Agmt/Goodwill Industries/Old Town Beaut Workforce Dev/Project CFC27-048 normal business hours, but in no case less than 24 hours' notice, to such of its books, records, accounts, and all other sources of information and its facilities as said Department or CALTRANS shall require to ascertain compliance with this clause. (4) Consultant and its contractors, its sub-recipients, and its subcontractors shall give written notice of their obligations under this clause to labor organizations with which they have a collective bargaining or other agreement.
c. Verification of Employment Eligibility. By executing this Agreement, Consultant verifies that it fully complies with all requirements and restrictions of state and federal law respecting the employment of undocumented aliens, including, but not limited to, the Immigration Reform and Control Act of 1986 (8 USC Sections 1101-1525) as such may be amended from time to time, and shall require any subcontractors or subconsultants to also comply. d. Drug-Free Workplace. Consultant and all its subcontractors (if any) shall comply with the requirements of the Drug-Free Workplace Act of 1990 (Government Code Section 8350 et seq.) in the manner set forth in the provisions of the RGA in Exhibit D. e. Executive Order N-6-22 Russia Sanctions. On March 4, 2022, Governor Gavin Newsom issued Executive Order N-6-22 (the EO) regarding Economic Sanctions against Russia and Russian entities and individuals. "Economic Sanctions" refers to sanctions imposed by the U.S. government in response to Russia's actions in Ukraine (https://ofac.treasury.gov/sanctionsprograms-and-country-information/ukraine-russia-related-sanctions). The EO, located at https://www.gov.ca.gov/wp-content/uploads/2022/03/3.4.22-Russia-Ukraine-ExecutiveOrder.pdf, directs state agencies and their contractors (including by agreement or receipt of a grant) to terminate contracts with, and to refrain from entering any new contracts with, individuals or entities that are determined to be a target of Economic Sanctions. Accordingly, should it be determined that Contractor is a target of Economic Sanctions or is conducting prohibited transactions with sanctioned individuals or entities, that shall be grounds for termination of this Agreement.
Section 15. INSURANCE REQUIREMENTS
a. Consultant shall procure and maintain at its sole expense during the Initial Term of this Agreement and during any Option Period(s) or other extensions of the term hereof, insurance against claims for injuries to persons or damages to property which may arise from or in connection with the performance of the Services hereunder and the results of such performance by the Consultant, its officers, agents, representatives, employees, or subcontractors. These insurance requirements are the minimum requirements for this Agreement: the City in no way warrants that the minimum limits contained herein are sufficient to protect the Consultant from liabilities that might arise out of the performance of the Services under this Agreement by the Consultant, its officers, agents, representatives, employees, or subcontractors. Consultant is free to purchase additional insurance as it deems appropriate. Consultant acknowledges and agrees that the insurance requirements specified herein do not reduce the liability Consultant has assumed in the indemnification/hold harmless section of this Agreement. b. Required minimum coverages, endorsements, and other insurance requirements with which Consultant must comply are attached hereto as Appendix 1. Consultant’s failure to maintain the minimum required insurance shall constitute a default and material breach of this Agreement.
10 Consultant/Professional Serv. Agmt/Goodwill Industries/Old Town Beaut Workforce Dev/Project CFC27-048 Section 16. REPORTS
Upon request by the City’s Project Manager and as otherwise required by this Agreement, including but not limited to the provisions of Exhibit A, Consultant shall prepare and submit reports to the City concerning Consultant's performance of the Services required by this Agreement.
Section 17. BOOKS AND RECORDS; AUDIT
a. Consultant its contractors, subcontractors, and subconsultants shall comply with 2 CFR Part 200 and shall keep such books and records as shall be necessary to perform the Services required by this Agreement and enable the City’s Project Manager to evaluate the performance of such Services.
b. Consultant shall retain, protect, and maintain in an accessible location all books and records, including without limitation, financial books and records relating to charges for services or expenditures and disbursements charged to the City under this Agreement, regardless of the medium in which they are kept, for a minimum of four (4) years from the date final payment is made to Consultant hereunder, or for any longer period required by law. All such records shall be made available to the City Manager or his/her designee for inspection, audit, the making of transcripts, and/or copying at any time during regular business hours, upon reasonable notice but in no case less than 24 hours' advance notice.
c. All financial books and records shall be maintained in accordance with generally accepted accounting principles (GAAP) and Consultant shall establish and maintain an accounting system and records that properly accumulate and segregate incurred Project costs and matching funds by line. The accounting system of Consultant, its subconsultants and subcontractors shall likewise conform GAAP, enable the determination of incurred costs at interim points of completion, and provide support for reimbursement payment vouchers or invoices. d. Pursuant to Government Code Section 8546.7, this Agreement shall be subject to the examination and audit of the State Auditor for a period of three (3) years after the final payment is made under this Agreement, as well as to representatives of CALTRANS and auditors representing the federal government. The granting agencies, or such entities or agencies they may designate, shall have the same audit and inspection rights as the City, or such audit, inspection and related rights as set forth in Section III, Paragraph 21 of the RGA in Exhibit D.
The provisions of this Section 17 shall survive the expiration or termination of this Agreement.
Section 18. CONFIDENTIALITY; OWNERSHIP OF MATERIALS AND DOCUMENTS a. Any and all documents and information obtained from the City or prepared by Consultant for the City shall be kept strictly confidential unless otherwise provided by applicable law. All City data, documents and information shall be returned to the City upon termination of the Agreement.
b. Any drawings, specifications, reports, records, documents, or other materials prepared by Consultant in the performance of services under this Agreement shall not be released publicly without the prior written approval of City’s Project Manager or as required by applicable law.
11 Consultant/Professional Serv. Agmt/Goodwill Industries/Old Town Beaut Workforce Dev/Project CFC27-048 c. Consultant shall not disclose to any other entity or person any information regarding the activities of the City, except with the prior written approval of City’s Project Manager or as required by applicable law.
d. All original documents, reports, designs, drawings, specifications, maps, electronic data, computer files and all other materials prepared by Consultant in the course of performing the Services pursuant to this Agreement, whether completed or in progress, are the property of the City and shall be surrendered to the City upon the completion of Consultant’s Services or when requested by City’s Project Manager. Consultant shall have no claim for further engagement or additional compensation as a result of the exercise by City of its full rights of ownership of the documents and materials hereunder. Such materials may be used, reused, or otherwise disposed of by the City without the permission of Consultant. e. Consultant, its subcontractors, and Subrecipients in providing service under this Agreement shall conform to the provisions of Section III, Paragraphs 31-33 of the RGA and affirmatively agree to avoid designing or developing any items that infringe one (1) or more patents or other intellectual property rights of any third party. If Consultant, its subcontractors, and Subrecipients become aware of any such possible infringement in the course of performing any work under this Agreement, Consultant, its subcontractors, and/or Subrecipients shall immediately notify the City in writing, and City will then immediately notify CALTRANS in writing. f. Consultant’s covenants under this Section 18 shall survive the expiration or other termination of this Agreement.
Section 19. PUBLIC RECORDS ACT
Consultant acknowledges that the City is a public agency subject to the California Public Records Act, Cal. Gov. Code § 7920.000 et seq., (the “CPRA”). As such, this Agreement and all records related to its formation, Consultant’s performance of Services, and City's payment are public records subject to disclosure upon request, unless a specific exemption in the CPRA applies. If Consultant’s proprietary information is contained in documents or information submitted to City in other forms of media, and Consultant claims that such information falls within one or more CPRA exemptions, Consultant must clearly mark such information “Confidential and Proprietary,” identify the specific lines containing the information, and specify the CPRA section(s) supporting its claim of exemption. In the event of a request for such information, the City will make best efforts to provide notice to Consultant prior to such disclosure. If Consultant contends that any documents are exempt from the CPRA and wishes to prevent disclosure, Consultant must obtain a protective order, injunctive relief, or other appropriate remedy from a court of law in San Bernardino County before the City is required to respond to the CPRA request. If Consultant fails to obtain such remedy within the time the City is required to respond to the CPRA request, City may disclose the requested information without any liability to Consultant. Consultant further agrees that it shall defend, indemnify, and hold the City harmless against any claim, action or litigation (including but not limited to all judgments, costs, and attorney’s fees) that may result from denial by City of a CPRA request for information arising from any representation, or any action (or inaction), by the Consultant.
12 Consultant/Professional Serv. Agmt/Goodwill Industries/Old Town Beaut Workforce Dev/Project CFC27-048 Section 20. NOTICES
a. Any notice to be provided pursuant to this Agreement shall be in writing, and all such notices shall be delivered by personal service or by deposit in the United States mail, certified or registered, return receipt requested, with postage prepaid, and addressed to the Parties as follows:
To City: To Consultant
CITY OF VICTORVILLE
14343 Civic Drive
Victorville, CA 92392
Attn: Mica Schuler
Economic Development Administrator
GOODWILL INDUSTRIES OF SOUTHERN
CALIFORNIA
ADDRESS
ADDRESS
Attn: ________________________
Title: ________________________
Notices, payments, and other documents shall be deemed delivered upon receipt by personal service or as of the second (2nd) day after deposit in the United States mail. b. Either Party may change its address by giving notice in writing to the other Party in the manner set forth above.
Section 21. TERMINATION OR SUSPENSION
a. Termination Without Cause. At any time and without cause, either Party may terminate this Agreement by giving thirty (30) days' written notice to the other Party. In the event of such termination without cause, City shall only be liable for payment under the payment provisions of this Agreement for Services rendered or supplies actually furnished prior to the date the termination becomes effective, and Consultant shall deliver to City any work product, whether complete or incomplete.
b. Termination For Cause (Default). In the event of Consultant’s substantial failure to meet its obligations under this Agreement, City may elect to give Consultant ten (10) days' written notice and an opportunity to cure. If the Consultant has not cured the defects in its performance as specified in the City’s written notice within said ten (10) days, the City may terminate this Agreement for cause. In the event of such termination, the City shall only be liable for payment under the payment provisions of this Agreement for satisfactory Services rendered or supplies actually furnished prior to the date termination becomes effective, and Consultant shall deliver to City any work product, whether complete or incomplete.
c. Suspension. City may, at any time, temporarily suspend Consultant’s performance, in whole or in part, by giving a written notice of suspension to Consultant. If City gives such notice, Consultant shall immediately suspend its activities under this Agreement as specified in the notice.
d. Rights and Remedies. The rights and remedies of the City provided in this Section shall not be exclusive and are in addition to any other rights and remedies provided by law, in equity, or under this Agreement.
13 Consultant/Professional Serv. Agmt/Goodwill Industries/Old Town Beaut Workforce Dev/Project CFC27-048 e. No Waiver. Any failure or delay by the City in asserting any of its rights or remedies as to termination for cause shall not operate as a waiver of any defects in Consultant’s performance or of any rights or remedies the City may have with respect to such defects.
Section 22. MODIFICATIONS AND AMENDMENTS; EXTRA SERVICES a. This Agreement may be modified or amended only by a written instrument signed by both Parties.
b. During the Initial Term of this Agreement, or during any Option Period(s) or other extensions of the term hereof, the City may request that the Consultant perform Extra Services.
As used herein, "Extra Services" means any services which are determined by the City to be necessary for the proper completion of the Services described herein but which the Parties did not reasonably anticipate would be necessary at the execution of this Agreement. A written instrument signed by both Parties shall be required to authorize performance of and payment for Extra Services.
Section 23. INDEMNIFICATION
a. Non-Design Professional Indemnification. To the fullest extent permitted by law, Consultant shall immediately defend, indemnify, and hold harmless the City, its elected and appointed officials, officers, employees, representatives, and agents (collectively the “City Indemnitees”), from and against any and all liability, damage, actions, suits, proceedings, claims, demands, losses, expenses, and costs (including reasonable legal fees and costs of litigation), for any personal injuries, deaths, or property damage, including property owned by the City (collectively “Claims”) arising out of or in connection with Consultant’s performance of the Services described in this Agreement or its failure to comply with any of its obligations contained in this Agreement, except such Claims caused by the sole negligence or willful misconduct of the City Indemnitees.
b. Design Professional Indemnification. To the extent that the Services provided under this Agreement are those of a “Design Professional,” as that term is defined in Section 2782.8 of the California Civil Code, which section is incorporated into this Agreement by this reference, Consultant's duty to indemnify, hold harmless, and defend the City Indemnitees shall be limited to the extent that any Claims arise out of, pertain to, or relate to the negligence, recklessness, or willful misconduct of the Consultant, its officers, agents, employees or subconsultants in the performance of the Services described in this Agreement. In no event shall the costs of defense charged to Consultant exceed the Consultant’s proportionate percentage of fault, except as otherwise set forth in said Civil Code section 2782.8. Nothing in this Subsection b shall be construed to require Consultant to provide indemnification for Claims caused by the active negligence or willful misconduct of the City Indemnitees. c. The City does not and shall not waive any rights that it may have against Consultant under this Section 23, because of the acceptance by or deposit with the City of any insurance policy or certificate required pursuant to this Agreement. The hold harmless, defense, and indemnification provisions of this Section 23 shall apply regardless of whether said insurance policies are determined to be applicable to any Claims described herein. d. The City’s acceptance of Consultant’s Services shall not operate as a waiver of the City’s rights under this Section 23. The obligation to indemnify, hold harmless, and defend as 14 Consultant/Professional Serv. Agmt/Goodwill Industries/Old Town Beaut Workforce Dev/Project CFC27-048 set forth in this Section 23, is binding on the successors, assigns, or heirs of Consultant and shall survive the expiration or any termination of this Agreement. e. If Consultant subcontracts any portion of the Services to be performed under this Agreement, Consultant shall obtain executed indemnity agreements with provisions identical to those set forth in this Section 23 from each subcontractor/subconsultant. If Consultant fails to do so, it shall be fully responsible to indemnify the City as set forth herein. Failure of the City to monitor Consultant’s compliance with these provisions shall not constitute a waiver thereof.
Section 24. GENERAL PROVISIONS
a. Entire Agreement. This Agreement, including all exhibits, appendices, or other attachments, represents the entire and integrated agreement between the Parties with respect to the subject matter hereof and supersedes all prior and contemporaneous communications, negotiations, understandings, promises, and agreements, either oral or written. Neither Consultant nor City has made any promises or representations, other than those contained in this Agreement. No agreement, statement, or promise with respect to the subject matter of this Agreement, which is not contained in this Agreement, or in a valid written modification or amendment to this Agreement, shall be valid or binding on either Party. b. Nonliability of City Officers and Employees. No officer, official, or employee of the City shall be personally liable to the Consultant, or any successor in interest, in the event of any default or breach by the City or for any amount, which may become due to the Consultant or to its successor, or for any breach of any obligation of the terms of this Agreement. c. Time of the Essence. Time is of the essence in the performance of this Agreement. d. Review by Attorneys. Each Party hereto has had its attorney(s) review this Agreement and all related documents. Each Party hereto has consulted with its attorney(s) and has negotiated the terms of this Agreement based on such consultation. e. Waiver. The waiver by City or Consultant of any breach of any term, covenant, or condition herein contained shall not be deemed to be a waiver of any other term, covenant, or condition or of any subsequent breach of the same or any other term, covenant, or condition herein contained. No term, covenant, or condition of this Agreement shall be deemed to have been waived by City or Consultant unless in writing signed by one authorized to bind the party to be charged with the waiver. Failure of either Party to enforce any provision of this Agreement shall not constitute a waiver of the right to compel enforcement of such provision or any of the remaining provisions of this Agreement.
f. Assignment. Neither this Agreement, nor the rights and duties of the Parties hereunder, shall be assigned by either Party without the prior written consent of the other Party. g. Captions and Headings. The captions and headings contained in this Agreement are provided for identification purposes only and shall not be interpreted to limit or define the content of the provisions described under the respective caption or heading. h. Successors, Heirs, and Assigns. Except as otherwise expressly provided herein, this Agreement shall be binding upon the successors, endorsees, assigns, heirs, and personal 15 Consultant/Professional Serv. Agmt/Goodwill Industries/Old Town Beaut Workforce Dev/Project CFC27-048 representatives of each of the Parties to this Agreement and, likewise, shall inure to the benefit of the successors, endorsees, assigns, heirs, and personal representatives of each of the Parties. i. Gender. In this Agreement, unless the context clearly requires otherwise, the masculine, feminine, and neuter genders and the singular and the plural shall include one another. j. Severability. If any one or more of the sentences, clauses, paragraphs, or sections contained herein is declared invalid, void, or unenforceable by a court of competent jurisdiction, the same shall be deemed severable from the remainder of this Agreement and shall not affect, impair, or invalidate any of the remaining sentences, clauses, paragraphs, or sections contained herein.
k. Governing Law. The validity of this Agreement and any of its terms or provisions, as well as the rights and duties of the Parties under this Agreement, shall be construed pursuant to and in accordance with California law.
l. Unauthorized Use of City Name. Consultant acknowledges the provisions of VMC Chapter 1.06 and agrees not to use the City of Victorville’s name, logo, seal, or other identifying marks in any marketing materials, magazine, trade paper, newspaper, television or radio production, or other similar medium, without the prior written consent of the City. Consultant shall not state, imply, or in any way represent to any third party that City has endorsed or approved Consultant or any of its services or products; nor shall Consultant present City-owned facilities, programs, or materials as its own or use any City-created content without the City’s prior written consent. The City reserves the right to withhold consent to any use requested hereunder in the City's sole and absolute discretion.
m. Cumulative Remedies. Except with respect to rights and remedies expressly declared to be exclusive in this Agreement, the rights and remedies of the Parties are cumulative and the exercise by either Party of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default of any other default by the other Party.
n. Venue. All proceedings involving disputes over the terms, provisions, covenants, or conditions contained in this Agreement and all proceedings involving any enforcement action related to this Agreement shall be initiated and conducted in the applicable court or forum in San Bernardino County, California.
o. Attorneys’ Fees. In the event any action, suit, or proceeding is brought for the enforcement of, or the declaration of any right or obligation pursuant to this Agreement, or as a result of any alleged breach of any provision of this Agreement, the prevailing Party in such suit or proceeding shall be entitled to recover its costs and expenses, including reasonable attorneys’ fees, from the losing Party, and any judgment or decree rendered in such a proceeding shall include an award thereof.
p. No Third-Party Beneficiaries. The City and Consultant are the only Parties to this Agreement and are the only Parties entitled to enforce its terms. Except as expressly set forth in this Agreement, nothing herein gives, is intended to give, or shall be construed to give or provide, any right or benefit, whether directly or indirectly or otherwise, to third persons. 16 Consultant/Professional Serv. Agmt/Goodwill Industries/Old Town Beaut Workforce Dev/Project CFC27-048 q. False Claims Acts. Consultant warrants and represents that neither Consultant nor any person who is an officer of, in a managing position with, or has an ownership interest in Consultant has been determined by a court or tribunal of competent jurisdiction to have violated the Federal or California False Claims Acts, 31 U.S.C. Section 3789 et seq., and Cal. Gov. Code Section 12650 et seq., respectively.
Section 25. EFFECTIVENESS OF AGREEMENT
This Agreement shall not be binding upon the City until signed by the authorized representative(s) of Consultant, approved as to form by the City Attorney, approved by the City’s Risk Manager, and executed by authorized City personnel or the Mayor.
Section 26. REPRESENTATIONS OF EXECUTING PARTIES AND PERSONS Each of the Parties to this Agreement hereby represents that all necessary and appropriate actions of their governing bodies have been taken to make this Agreement a binding obligation of each of the Parties hereto. The persons executing this Agreement further warrant that they are duly authorized to execute this Agreement on behalf of and bind the Parties each purport to represent.
Section 27. COUNTERPARTS; ELECTRONIC SIGNATURES
This Agreement may be executed in multiple counterparts, each of which shall be an original and all of which together shall constitute one agreement. Counterparts delivered and/or signatures executed by City-approved electronic or digital means shall have the same force and effect as the use of a manual signature. Both Parties desire this Agreement to be electronically signed in accordance with applicable federal and California law. Either Party may revoke its agreement to use electronic signatures at any time by giving notice to the other Party pursuant to this Agreement. The City reserves the right to reject any signature that cannot be positively verified by the City as an authentic electronic signature.
Section 28. INCORPORATION OF EXHIBITS AND APPENDICES
The following attached exhibits and appendices are incorporated and made part of this Agreement, subject to the terms and provisions herein contained:
Exhibit A Scope of Services
Exhibit B Project Grant Budget
Exhibit C Prevailing Wage And Related Labor Requirements Exhibit D RGA Grant Funding Requirements
Appendix 1 Insurance Requirements
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17 Consultant/Professional Serv. Agmt/Goodwill Industries/Old Town Beaut Workforce Dev/Project CFC27-048 IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed as of the dates written beneath their signatures below.
CITY OF VICTORVILLE GOODWILL INDUSTRIES OF SOUTHERN
CALIFORNIA
By: By:
Name: Keith C. Metzler Name:
Title: City Manager Title:
Date: Date:
ATTEST
___________________________________
Jennifer Thompson, City Clerk
APPROVED AS TO FORM
___________________________________
Andre de Bortnowsky, City Attorney
RISK MANAGEMENT
___________________________________
Sandra Bostick, Risk Manager
P:\APPS\WPDATA\VVCA\0001-41-NAVIGATION WELLNESS CENTER\CCEP DOT GRANT -OLD TOWN BEAUT PROJECT 2026\GOODWILL INDUSTRIES\001.3-CPSA GOODWILL CCEP GRANT DRAFT CLEAN VER 09.23.26.DOCX 19 Consultant/Professional Serv. Agmt/Goodwill Industries/Old Town Beaut Workforce Dev/Project CFC27-048
EXHIBIT A
SCOPE OF SERVICES
See Attachment
CPSA – Exhibit A 1 Goodwill Industries / Project No. CFC27-048
EXHIBIT A
Community Cleanup and Employment Pathway (CCEP) Grant - City of Victorville Old Town Beautification and Workforce Empowerment Initiative - Scope of Work Approved Grant Expenditure and Performance Period:
October 1, 2026 - June 30, 2027
Scope of Work Narrative
Consultant shall implement a Workforce Development Program designed to provide individuals experiencing homelessness or housing instability who are residents/clients of the Victorville Wellness Center (“Participants”) with workforce readiness training, paid work experience, environmental education, and pathways to long-term employment.
Consultant shall utilize $52,000 in staffing and program administration funding to provide workforce development instruction, participant mentoring, case management, supervision, reporting, and coordination. In addition, $78,750 shall be utilized to provide paid work experience opportunities for up to fifteen (15) Participants at a rate of $17.50 per hour for up to 300 hours per Participant.
The program shall begin with structured workforce readiness training focused on resume development, employment applications, interview preparation, mock interviews, workplace expectations, timekeeping, task management, and employment systems navigation. Participants shall then receive environmental education and soft-skills development training focused on litter reduction, sustainability, public engagement, communication skills, teamwork, and workplace professionalism.
Upon successful completion of the training phase, Participants shall engage in paid work experience activities at the Victorville Wellness Center, including environmental cleanliness projects, beautification efforts, litter abatement, and other work-based learning opportunities. Participants may subsequently engage in community cleanup projects, Adopt-a-Street activities, and City-sponsored cleanup events.
Consultant shall provide ongoing mentorship, coaching, performance monitoring, and employment pathway development throughout the program. The City’s Homelessness Solutions Team shall administer the grant and the project, and Consultant will provide program implementation direct mentoring and supervision. Participants shall be connected to employment opportunities, apprenticeship programs, vocational training, or other workforce development resources upon completion of the program.
The overall goal of the program is to create sustainable employment pathways that increase economic mobility, reduce barriers to employment, improve community conditions, and support participants in transitioning from homelessness and poverty CPSA – Exhibit A 2 Goodwill Industries / Project No. CFC27-048 toward long-term self-sufficiency. At least forty percent (40%) of Participants shall transition into employment, vocational training, apprenticeships, or other sustained workforce development opportunities within six (6) months of program completion.
Program Phases Overview
Phase Activity Description Deliverables
Phase 1A
Workforce
Readiness
Training
Resume development, job
applications, interview preparation,
mock interviews, workplace
expectations, timekeeping, task
management, and employment
readiness training.
Employment
Development Plan for
each participant;
workforce readiness
curriculum completed.
Phase 1B
Environment
al Education
& Soft Skills
Environmental stewardship, litter
reduction, sustainability education,
public engagement, communication
skills, teamwork, and workplace
professionalism.
Environmental
stewardship training
completed; participant
assessments
documented.
Phase 2
Wellness
Center Work
Experience
Paid work experience at the
Wellness Center involving
beautification, litter abatement,
facility support, environmental
projects, and work-based learning
activities.
Participant work hours
documented; supervisor
evaluations completed.
Phase 3
Community
Cleanup &
Adopt-aStreet
Participation in community cleanup
projects and potential
implementation of an Adopt-aStreet initiative.
Cleanup activities
completed and
documented.
Phase 4A
Citywide
Cleanup
Initiatives
Coordination and participation in
October 2026 and April 2027 City
Cleanup Days.
Participant involvement
documented;
community impact
reported.
CPSA – Exhibit A 3 Goodwill Industries / Project No. CFC27-048 Phase Activity Description Deliverables
Phase 4B
Outreach &
Community
Stewardship
Outreach to individuals
experiencing homelessness,
environmental awareness activities,
and resource connection efforts in
downtown and encampment areas.
Outreach contacts and
referrals documented.
Roles and Responsibilities
Responsible Party Duties
City Homelessness
Solutions Division
Program oversight, contract management, participant
referrals, performance monitoring, and outcome tracking.
Consultant
Staff/Mentors
Direct participant supervision, mentoring, worksite
coaching, attendance tracking, and Participant support.
City Environmental
Services (if needed) Environmental education
Participants
Complete training, participate in work experience activities, attend scheduled events, and engage in employment
pathway planning.
Performance Measures
Outcome Measure Target
Participants Enrolled 15
Participants Completing Workforce Readiness Training 100% Participants Receiving Paid Work Experience 15
Individual Employment Plans Developed 100%
Community Cleanup Projects Supported Minimum 4
City Cleanup Days Supported 2
CPSA – Exhibit A 4 Goodwill Industries / Project No. CFC27-048 Outcome Measure Target
Participants Connected to Employment or Vocational Training 50% Participants Transitioning to Employment, Apprenticeships, Vocational Programs, or Advanced Workforce Training within 6 Months 40% Minimum Participant Work Hours Completed Up to 4,500
Total Hours
Environmental Stewardship Training Completion Rate 100% P:\APPS\WPDATA\VVCA\0001-41-NAVIGATION WELLNESS CENTER\CCEP DOT GRANT -OLD TOWN BEAUT PROJECT 2026\GOODWILL INDUSTRIES\002.1-EXHIBIT A CCEP GRANT GOODWILL SCOPE OF WORK DRAFT CLEAN 09.23.26.DOCX 20 Consultant/Professional Serv. Agmt/Goodwill Industries/Old Town Beaut Workforce Dev/Project CFC27-048
EXHIBIT B
PROJECT GRANT BUDGET
See Attachment
CPSA – Exhibit B 1 Goodwill Industries / Project No. CFC27-048
EXHIBIT B
Community Cleanup and Employment Pathway (CCEP) Grant - City of Victorville Old Town Beautification and Workforce Empowerment Initiative Budget
Budget
Category
Description Amount
Program
StaƯing
Workforce development instruction, participant mentoring, supervision, case management, reporting, and program
coordination
$52,000.00
Participant
Wages
Up to 15 participants at $17.50 per hour for up to 300 hours each
$78,750.00
Total CCEP
Funding
$130,750.00
Budget Narrative
Funding shall support implementation of a Workforce Development and Environmental Stewardship Program providing workforce readiness training, environmental education, paid work experience, community beautification activities, cleanup projects, City Cleanup Day participation, and employment pathway development for individuals experiencing homelessness or housing instability. Funding includes staƯing costs and participant wages necessary to achieve program objectives.
P:\APPS\WPDATA\VVCA\0001-41-NAVIGATION WELLNESS CENTER\CCEP DOT GRANT -OLD TOWN BEAUT PROJECT 2026\GOODWILL INDUSTRIES\003.1-EXHIBIT B CCEP WORKFOCE BUDGET GOODWILL DRAFT CLEAN 09.23.26.DOCX 21 Consultant/Professional Serv. Agmt/Goodwill Industries/Old Town Beaut Workforce Dev/Project CFC27-048
EXHIBIT C
PREVAILING WAGE REQUIREMENTS
See Attachment
CPSA – Exhibit C 1 Goodwill Industries / Project No. CFC27-048
EXHIBIT C
PREVAILING WAGE AND RELATED LABOR REQUIREMENTS
a. Compliance with State Prevailing Wage Law. Pursuant to California Labor Code Section 1773, the City has obtained from the Director of the Department of Industrial Relations (“DIR”) the general prevailing rate of per diem wages and the general prevailing wage rate for holiday and overtime work applicable for each craft, classification, or type of worker in San Bernardino County, California, where this Agreement is to be performed. Copies of these prevailing rates of per diem wages are on file at the City of Victorville Finance Department/Purchasing Division and shall be made available for review to any interested party on request. Copies of these prevailing rate of per diem wages are also available from the State of California via the internet at http://www.dir.ca.gov/DLSR/PWD. Consultant and its subcontractors/subconsultants shall pay not less than said specified prevailing rate of per diem wages to all workers employed by them in the performance of the services and work required by this Agreement, Consultant shall be solely responsible for using the correct and current prevailing wage rates and performing accordingly.
An error on the part of any awarding body does not relieve the Consultant from the responsibility for payment of the correct prevailing wage, or compliance with the maintenance and inspection of payroll records, posting of prevailing wage rates at the work/job site, employment of apprentices, and other requirements of Labor Code Section 1720 et seq.; Labor Code Section 1810 et seq.; California Code of Regulations, Title 8, Section 16000 et seq.; and all other applicable State labor laws.
b. Designation as Consultant Not Determinative. For purposes of this Agreement, Consultant and its subcontractors or subconsultants shall be subject to and shall comply with all provisions of the Labor Code applicable to contractors and subcontractors when they are engaged in the performance of any services or work under this Agreement, despite being designated as a Consultant or a subconsultant.
c. Conflict. It is further expressly agreed by and between the Parties hereto that should there be any conflict between the terms of this Exhibit C and the provisions of Consultant’s submitted scope of services, scope of work, bid proposal, cost proposal, and/or fee schedule (whether attached to this Agreement as Exhibit A or Exhibit B), the terms of this Exhibit C shall control, and nothing in this exhibit or the Agreement shall be considered as an acceptance of the terms of Consultant’s submitted scope of services, scope of work, bid, proposal, cost proposal, and/or fee schedule which conflict with the requirements of this Exhibit C. d. Payroll Records. Consultant and its subcontractors/subconsultants must comply with the provisions of Labor Code sections 1776 and 1812 and all implementing regulations, including without limitation, those set forth in Title 8 of the California Code of Regulations, Section 16000 et seq. (hereinafter the “Regulations”), which are fully incorporated by this reference, including requirements for electronic submission of payroll records to the DIR. (1) Consultant and Subcontractor/Subconsultant Obligations. Consultant and each subcontractor or subconsultant must keep accurate payroll records, showing the name, address, social security number, work classification, straight time and overtime hours worked each day and week, and the actual per diem wages paid to each journeyman, apprentice, worker, or other employee employed in connection with this Agreement. Each CPSA – Exhibit C 2 Goodwill Industries / Project No. CFC27-048 payroll record must contain or be verified by a written declaration that it is made under penalty of perjury, stating both of the following:
(a) The information contained in the payroll record is true and correct; and (b) Consultant or subcontractor/subconsultant has complied with the requirements of Labor Code Sections 1771, 1811, and 1815 for any services or work performed by its employees on the Project.
(2) Certified Record. A certified copy of an employee’s payroll record must be made available for inspection or furnished to the employee or his or her authorized representative on request, to the City, to the Division of Labor Standards Enforcement, to the Division of Apprenticeship Standards of the DIR, and as further required by the Labor Code.
(3) Enforcement. Upon notice of noncompliance with Labor Code Section 1776, Consultant or subcontractor/subconsultant has ten days in which to comply with the requirements of this section. If Consultant or subcontractor fails to do so within the tenday period, Consultant or subcontractor/subconsultant will forfeit a penalty of $100.00 per day, or portion a day, for each worker for whom compliance is required, until strict compliance is achieved. Upon request by the Division of Apprenticeship Standards, or the Division of Labor Standards Enforcement, these penalties will be withheld from payments then due to Consultant.
(4) Payment of Invoices. Copies of the certified payrolls, proof of payroll submissions, and appropriate lien releases are required with each invoice to the City. Payment of the invoice may be delayed when payroll-related documents and/or lien releases are not included with the invoice.
e. Apprentices. Consultant is responsible for compliance with the requirements governing employment and payment of apprentices, as set forth in Labor Code section 1777.5, which is fully incorporated by reference.
f. Notices. Pursuant to Labor Code section 1771.4, Consultant is required to post all Job Site notices, including prevailing wage rates and other notices, as required by regulation. g. Other Labor Requirements. Consultant has the responsibility for and shall comply with all other applicable requirements of Labor Code Section 1720 et seq., Labor Code Section 1810 et seq., the Regulations, and all other applicable State labor laws. Consultant further acknowledges and agrees that it will be independently responsible for reviewing the applicable laws and regulations and effectuating compliance with those laws. Consultant shall require the same of all its subcontractors/subconsultants.
h. Statutory Penalties. The statutory penalties for failure to pay prevailing wage or to comply with State wage and hours laws will be enforced as follows:
(1) Pursuant to Labor Code section 1775, the Consultant and any subcontractor/subconsultant under it shall forfeit as a penalty to the City not more than Two Hundred Dollars ($200.00), for each calendar day, or portion thereof, for each worker paid less than the prevailing wage rate as determined by the Director of the DIR for such work or craft in which such worker is employed for any public work done under this CPSA – Exhibit C 3 Goodwill Industries / Project No. CFC27-048 Agreement by it or by any subcontractor/subconsultant under it. The difference between such prevailing wage rate and the amount paid to each worker for each calendar day or portion thereof, for which each worker was paid less than the prevailing wage rate, shall be paid to each worker by the Consultant.
(2) Pursuant to Labor Code Section 1813, Consultant or its subcontractors/subconsultants shall, as a penalty to the City, forfeit twenty-five dollars ($25) for each worker employed in the execution of this Agreement by the respective Consultant or subcontractor/subconsultant for each calendar day during which the worker is required or permitted to work more than 8 hours in any one calendar day and 40 hours in any one calendar week, except as specified in Labor Code Section 1815. In accordance with the provisions of Labor Code Section 1810 et seq., eight (8) hours is the legal working day.
i. DIR Monitoring. Pursuant to Labor Code Section 1771.4, this Agreement is subject to compliance monitoring and enforcement by the DIR.
j. DIR Registration. Pursuant to Labor Code Sections 1725.5 and 1771.1, Consultant and its subcontractors/subconsultants must be registered with the DIR prior to the execution of a contract to perform public works. By entering into this Agreement, Consultant represents that it is aware of the registration requirement and is currently registered with the DIR.
Consultant shall maintain a current registration for the duration of this Agreement. Consultant shall further include the requirements of Labor Code Sections 1725.5 and 1771.1 in any subcontract and ensure that all subcontractors/subconsultants are registered at the time this Agreement is entered into and maintain registration for the duration thereof.
P:\APPS\WPDATA\VVCA\0001-41-NAVIGATION WELLNESS CENTER\CCEP DOT GRANT -OLD TOWN BEAUT PROJECT 2026\GOODWILL INDUSTRIES\004.1-EXHIBIT C PWL GOODWILL CLEAN 09.23.26.DOCX 22 Consultant/Professional Serv. Agmt/Goodwill Industries/Old Town Beaut Workforce Dev/Project CFC27-048
EXHIBIT D
GRANT FUNDING REQUIREMENTS
CALTRANS/CITY RESTRICTED GRANT
AGREEMENT NO. 08-CCEP-05
“RGA”
See Attachment
City of Victorville
Agreement Number 08-CCEP-05
AMS ADV ID:0826000100
Project Number: CCEP-5380(045)
Clean California Local Grant Program (State)
Restricted Grant Agreement
This Restricted Grant Agreement (RGA), between the State of California acting by and through its Department of Transportation, referred to herein as CAL TRANS, and the CITY OF VICTORVILLE, hereinafter referred to as AGENCY, will commence on April 15, 2026, or upon approval by CAL TRANS, whichever occurs later. This RGA is of no effect unless approved by CAL TRANS.
AGENCY shall not receive payment for work performed prior to approval of this RGA and before receipt of Notice to Proceed from CAL TRANS. This RGA shall expire on November 30, 2027.
Recitals
1. Under this RGA, CAL TRANS intends to convey State restricted grant funds to AGENCY, pursuant to Budget Act Line Item 2660-130-0001, who will implement the project pursuant to the attached Approved Grant Application and Amendment(s) to Grant Application, Attachment Ill under the terms, covenants, and conditions of this RGA.
2. CAL TRANS and AGENCY intend that only funds that are authorized as restricted grants will be subject to this RGA, and that no funds that should be the subject of a Joint Powers Agreement, lnteragency Agreement, or other non-grant agreement shall be subject to this RGA.
3. WHEREAS, the Clean CA Program, through its Clean CA Local Grants Program, is authorized under California Streets and Highways Code Section 91.41 to provide funding and resources to support local projects that advance the program's goals and objectives;
4. WHEREAS, California Streets and Highways Code Section 91.41 provides the legislative authority for the Clean CA Program to advance the following intent and objectives:
a. Reduce Waste and Beautify Public Spaces: The primary goal of the program is to allocate grants to local and regional public agencies, transit agencies, and tribal governments to reduce waste and debris within public rights-of-way, tribal lands, parks, pathways, transit centers, and other public spaces. The program aims to enhance, rehabilitate, restore, or install measures to beautify and improve these public spaces. b. Improve Public Health and Community Placemaking: The program seeks to enhance public health, cultural connection, and community placemaking by improving public spaces for walking and recreation. By investing in the improvement of these spaces, it aims to create a positive and welcoming environment for the community. c. Promote Equity for Underserved Communities: The program places a strong emphasis on advancing equity for underserved communities.
d. Support Sustainable Practices: The program encourages the implementation of sustainable practices in the beautification and enhancement of public spaces. This includes greening efforts, such as providing shade and reducing the urban heat island effect, as well as using native, low-water plants.
e. Engage Local Communities: The program promotes community engagement by requiring project proposals to reflect community priorities. It encourages the involvement of local communities in the development and selection of projects to ensure they meet the needs and preferences of the affected population.
f. Prohibit Displacement of Persons Experiencing Homelessness: The program prohibits
464 West 4
th Street
San Bernardino, California 92401
9. Period of Performance
City of Victorville
Agreement Number 08-CCEP-05
AMS ADV ID:0826000100
Project Number: CCEP-5380(045)
a. Reimbursable work under this RGA shall begin no earlier than on April 15, 2026, following the written approval of CAL TRANS and AGENCY's receipt of the Notice to Proceed letter of this RGA by CAL TRANS. All reimbursable work shall terminate no later than July 30, 2027.
Project closeout and final invoicing to CAL TRANS must be submitted no later than November 30, 2027. Work incurred after July 30, 2027, will not be reimbursed. Payment shall be forfeit for any and all invoicing submitted to CAL TRANS after November 30, 2027. Notwithstanding the foregoing, Caltrans will reimburse for actual close out costs incurred by AGENCY through November 30, 2027 (which, in total, shall not exceed 5% of the grant award). b. If requested by the CAL TRANS District Partnership Liaison, AGENCY will attend a kickoff meeting with CAL TRANS to be scheduled within one (1) week from receipt of Notice to Proceed sent by CAL TRANS.
10. Changes in Terms/Amendments
This Agreement may only be amended or modified by mutual written agreement of the parties.
11. Cost Limitation
a. The maximum total amount granted and reimbursable to AGENCY pursuant to this RGA by CAL TRANS shall not exceed $300,000.00
b. It is agreed and understood that the Clean CA funds are limited to the amount granted.
CAL TRANS will only reimburse the cost of services actually incurred in accordance with the provisions of this RGA and as authorized by the CAL TRANS District Partnership Liaison at or below that fund limitation established herein.
12. Termination
a. CAL TRANS reserves the right to terminate this RGA upon written notice to AGENCY at least 30 days in advance of the effective date of such termination in the event CAL TRANS determines (at its sole discretion) that AGENCY failed to proceed with PROJECT Work in accordance with the terms of this RGA. In the event of termination for convenience, CAL TRANS will reimburse AGENCY for all allowable, authorized, and non-cancelled costs up to the date of termination.
AGENCY shall return any unused advance amounts which cannot be supported by eligible expenditure documentation.
b. This RGA may be terminated by either party for any reason by giving written notice to the other party at least 30 days in advance of the effective date of such termination. In the event of termination for convenience, CAL TRANS will reimburse AGENCY for all costs that are expressly allowable, pre-authorized in writing, and non-cancellable, up to the date of termination. c. AGENCY has 60 days after the Termination Date to submit accurate invoices to CALTRANS to make final allowable payments for Project costs in accordance with the terms of this RGA.
Failure to submit invoices within this period of time shall result in a waiver by AGENCY of its right to reimbursement of expended costs. Costs that are reimbursed and later determined to be ineligible for reimbursement shall be returned by AGENCY to CAL TRANS.
13. Budget Contingency Clause
a. It is mutually agreed that if the US Congress or the State Legislature fail to appropriate or
WHEREAS, the City will partner with the Wellness Center Supportive Services Operator, to provide workforce training and employment opportunities for unhoused and Wellness Center clients while carrying out project activities; and WHEREAS, the grant agreement is anticipated to be effective April 1, 2026, and remain in effect through November 1, 2027, with all eligible costs required to be incurred by June 30, 2027, and invoices for reimbursement required to be submitted at least quarterly; and
WHEREAS, the total grant award of $300,000 requires a $25,000 match that will be satisfied through a combination of in-kind contributions, including bed-night costs at the Wellness Center for the 15 program participants, as well as administrative support provided by the City's Homelessness Solutions staff.
WHEREAS, the City Council finds that all materials that constitute the record of proceeding upon which its decision is based shall be located with the City of Victorville Clerk, located at 14343 Civic Drive, Victorville, California; and WHEREAS, after hearing all information presented, the City Council hereby accepts the CCEP grant in the amount of $300,000.00 and approves the expenditure of funds pursuant to the CCEP Budget Summary, which is attached to this Resolution as Exhibit A.
WHEREAS, acceptance of the grant and execution of the associated agreements will enable the City to implement a comprehensive, community-driven approach to reducing blight, enhancing public spaces, and expanding workforce opportunities.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF VICTORVILLE DOES HEREBY FIND, RESOLVE, DETERMINE AND ORDER AS FOLLOWS:
Section 1. Recitals.
The foregoing Recitals are true and correct and are incorporated herein by this reference.
Section 2. Contract Agreement
The City Council hereby authorizes the execution of the agreement between the City and the California Department of Transportation, included herein as Exhibit B, to accept and use the funding to support the City's Old Town Beautification and Workforce Empowerment Initiative focusing on litter abatement and public space beautification efforts on locally owned public right-of-way in Victorville's Old Town area, while creating workforce development opportunities for individuals facing barriers to employment at the Wellness Center.
Appendix 1
Consultant/Professional Serv. Agmt/Goodwill Industries/Old Town Beaut Workforce Dev/Project CFC27-048
Appendix 1
MINIMUM SCOPE AND LIMITS OF INSURANCE
Consultant/Professional Services Provider Agreement
1. Coverage shall be at least as broad as:
a. Commercial General Liability (CGL): Insurance Services Office Form CG 00 01 covering CGL on an “occurrence” basis, including products and completed operations, property damage, bodily injury, and personal & advertising injury with limits no less than One Million Dollars ($1,000,000) per occurrence. If a general aggregate limit applies, either the general aggregate limit shall apply separately to this project/location (ISO CG 25 03 or 25 04) or the general aggregate limit shall be twice the required occurrence limit. b. Automobile Liability: ISO Form Number CA 00 01 covering any auto (Code 1), or if Consultant has no owned autos, hired (Code 8), and non-owned autos (Code 9), with a Combined Single Limit no less than One Million Dollars ($1,000,000) per accident for bodily injury and property damage.
c. Workers’ Compensation Insurance: As required by the State of California, with Statutory Limits, and Employer’s Liability Insurance with limit of no less than One Million Dollars ($1,000,000) per accident for bodily injury or disease. The Workers’ Compensation policy shall be endorsed with a waiver of subrogation in favor of the City for all work performed by the Consultant its employees, agents and subcontractors. (1) If Consultant has no employees, it may certify or warrant to the City that it does not currently have any employees or individuals who are defined as “employees” under the Labor Code and the requirement for Workers’ Compensation coverage may be waived by the Risk Manager. Coverage waivers are not available as specified in California Business and Professions Code Section 7125.
d. Professional Liability (Errors & Omissions) Insurance: As appropriate to Consultant’s Profession, with limits of no less than One Million Dollars ($1,000,000) per occurrence or claim, Two Million Dollars ($2,000,000) aggregate.
e. If Consultant maintains broader coverage and/or higher limits than the minimums shown above, the City requires and shall be entitled to the broader coverage and/or the higher limits maintained by the Consultant. Any available insurance proceeds in excess of the specified minimum limits of insurance and coverage shall be available to the City. f. All Insurance is to be placed with good and responsible insurers which are licensed or authorized to transact insurance business in the state of California with an AM Best’s rating of not less than A:VII, unless otherwise acceptable to the City.
Appendix 1
Consultant/Professional Serv. Agmt/Goodwill Industries/Old Town Beaut Workforce Dev/Project CFC27-048
2. The insurance policies are to contain, or be endorsed to contain, the following provisions:
a. The City, its officers, officials, employees, agents, and volunteers are to be covered as additional insureds on the CGL policy and on the Pollution Liability policy (if Pollution Liability coverage is listed above) with respect to liability arising out of work or operations performed by or on behalf of the Consultant, including materials, parts, or equipment furnished in connection with such work or operations. Coverage can be provided in the form of an endorsement to the Consultant’s insurance (at least as broad as ISO Form CG 20 10 11 85 or if not available, through the addition of both CG 20 10, CG 20 26, CG 20 33, or CG 20 38; and CG 20 37 if a later edition is used). b. For any claims related to this Agreement, the Consultant’s insurance coverage shall be primary and non-contributory and at least as broad as ISO CG 20 01 12 19 as respects the City, its officers, officials, employees, agents, and volunteers. Any insurance or self-insurance maintained by the City, its officers, officials, employees, agents, or volunteers shall be excess of the Consultant’s insurance and shall not contribute with it.
This requirement shall also apply to any excess or umbrella liability policies. c. Consultant hereby grants to the City a waiver of any right to subrogation which any insurer of said Consultant may acquire against the City by virtue of the payment of any loss under such insurance. Consultant agrees to obtain any endorsement that may be necessary to affect this waiver of subrogation, but this provision applies regardless of whether or not an endorsement has been issued.
d. Each insurance policy required above shall provide that coverage shall not be canceled, except with notice to the City.
e. The Consultant may use Umbrella or Excess Policies to provide the liability limits as required in this Agreement. The policies shall be provided on a true “following form” coverage basis, with coverage at least as broad as provided on the underlying CGL insurance.
f. Self-insured retentions must be declared to and approved by the City. The City may require the Consultant to purchase coverage with a lower retention or provide proof of ability to pay losses and related expenses within the retention. The policy language shall provide that the self-insured retention may be satisfied by either the named insured or City.
g. If any of the required policies provide claims-made coverage:
(1) The Retroactive Date must be shown and must be before the date of the Agreement or the beginning of contract work.
(2) Insurance must be maintained and evidence of insurance must be provided for at least five (5) years after completion of the contract of work. (3) If coverage is canceled or non-renewed, and not replaced with another claimsmade policy form with a Retroactive Date prior to the Agreement effective date, the Consultant must purchase “extended reporting” coverage for a minimum of five (5) years after completion of work.
Appendix 1