Document:

Indenture -  Wells Fargo Bank, National Association

 Exhibit 4.1 

EXECUTION COPY 
  

 
 CALIFORNIA POLLUTION CONTROL

 FINANCING AUTHORITY 

and 
 WELLS FARGO
BANK, NATIONAL ASSOCIATION, 
 TRUSTEE 

INDENTURE 
 Dated
as of June 1, 2010 
 RELATING TO 

$50,000,000 

CALIFORNIA POLLUTION CONTROL FINANCING AUTHORITY 

REVENUE BONDS 

(SAN JOSE WATER COMPANY PROJECT) 

SERIES 2010A 
  

 

 TABLE OF CONTENTS 

 

					
	 	  	 	  	Page
	ARTICLE I DEFINITIONS; CONTENT OF CERTIFICATES AND OPINIONS	  	2
			
	SECTION 1.01.	  	Definitions.	  	2
			
	SECTION 1.02.	  	Content of Certificates and Opinions.	  	19
			
	SECTION 1.03.	  	Interpretation.	  	20
		
	ARTICLE II THE BONDS	  	20
			
	SECTION 2.01.	  	Authorization of Bonds.	  	20
			
	SECTION 2.02.	  	Form of the Bonds.	  	20
			
	SECTION 2.03.	  	Interest Rates.	  	20
			
	SECTION 2.04.	  	Execution of Bonds.	  	21
			
	SECTION 2.05.	  	Transfer of Bonds.	  	21
			
	SECTION 2.06.	  	Exchange of Bonds.	  	22
			
	SECTION 2.07.	  	Bond Register.	  	22
			
	SECTION 2.08.	  	Temporary Bonds.	  	22
			
	SECTION 2.09.	  	Bonds Mutilated, Lost, Destroyed or Stolen.	  	22
			
	SECTION 2.10.	  	Book-Entry Only System.	  	23
		
	ARTICLE III ISSUANCE OF BONDS; APPLICATION OF PROCEEDS	  	25
			
	SECTION 3.01.	  	Issuance of the Bonds.	  	25
			
	SECTION 3.02.	  	Application of Proceeds of Bonds and Other Moneys.	  	25
			
	SECTION 3.03.	  	Project Fund.	  	25
			
	SECTION 3.04.	  	Costs of Issuance Fund.	  	27
			
	SECTION 3.05.	  	Validity of Bonds.	  	27
		
	ARTICLE IV REDEMPTION OF BONDS	  	28
			
	SECTION 4.01.	  	Terms of Redemption of Bonds.	  	28
			
	SECTION 4.02.	  	Selection of Bonds for Redemption.	  	28

  

 -I- 

 TABLE OF CONTENTS 

(continued) 
  

					
	 	  	 	  	Page
	SECTION 4.03.	  	Notice of Redemption.	  	28
			
	SECTION 4.04.	  	Partial Redemption of Bonds.	  	29
			
	SECTION 4.05.	  	Effect of Redemption.	  	29
		
	ARTICLE V REVENUES; FUNDS AND ACCOUNTS; PAYMENT OF PRINCIPAL AND INTEREST	  	30
			
	SECTION 5.01.	  	Pledge and Assignment; Revenue Fund.	  	30
			
	SECTION 5.02.	  	Allocation of Revenues.	  	30
			
	SECTION 5.03.	  	Priority of Moneys in Revenue Fund.	  	31
			
	SECTION 5.04.	  	Investment of Moneys.	  	31
			
	SECTION 5.05.	  	Rebate Fund.	  	33
		
	ARTICLE VI PARTICULAR COVENANTS	  	34
			
	SECTION 6.01.	  	Punctual Payment.	  	34
			
	SECTION 6.02.	  	Extension of Payment of Bonds.	  	34
			
	SECTION 6.03.	  	Against Encumbrances.	  	34
			
	SECTION 6.04.	  	Power to Issue Bonds and Make Pledge and Assignment.	  	34
			
	SECTION 6.05.	  	Accounting Records and Reports.	  	35
			
	SECTION 6.06.	  	Arbitrage Covenants.	  	35
			
	SECTION 6.07.	  	Other Covenants.	  	36
			
	SECTION 6.08.	  	Waiver of Laws.	  	36
			
	SECTION 6.09.	  	Further Assurances.	  	36
			
	SECTION 6.10.	  	Continuing Disclosure.	  	36
		
	ARTICLE VII EVENTS OF DEFAULT AND REMEDIES OF BONDHOLDERS	  	37
			
	SECTION 7.01.	  	Events of Default; Acceleration; Waiver of Default.	  	37
			
	SECTION 7.02.	  	Institution of Legal Proceedings by Trustee.	  	38
			
	SECTION 7.03.	  	Application of Revenues and Other Funds After Default.	  	38

  

 -II- 

 TABLE OF CONTENTS 

(continued) 
  

					
	 	  	 	  	Page
	SECTION 7.04.	  	Trustee to Represent Bondholders.	  	39
			
	SECTION 7.05.	  	Bondholders’ Direction of Proceedings.	  	40
			
	SECTION 7.06.	  	Limitation on Bondholders’ Right to Sue.	  	40
			
	SECTION 7.07.	  	Absolute Obligation of Authority.	  	40
			
	SECTION 7.08.	  	Termination of Proceedings.	  	41
			
	SECTION 7.09.	  	Remedies Not Exclusive.	  	41
			
	SECTION 7.10.	  	No Waiver of Default.	  	41
		
	ARTICLE VIII THE TRUSTEE, THE PAYING AGENT AND THE BOND REGISTRAR	  	41
			
	SECTION 8.01.	  	Duties, Immunities and Liabilities of Trustee.	  	41
			
	SECTION 8.02.	  	Merger or Consolidation.	  	44
			
	SECTION 8.03.	  	Liability of Trustee.	  	44
			
	SECTION 8.04.	  	Right of Trustee to Rely on Documents.	  	46
			
	SECTION 8.05.	  	Preservation and Inspection of Documents.	  	46
			
	SECTION 8.06.	  	Compensation and Indemnification.	  	46
			
	SECTION 8.07.	  	Paying Agent.	  	47
			
	SECTION 8.08.	  	Notices to the Authority.	  	47
			
	SECTION 8.09.	  	Notices to Rating Agency.	  	47
			
	SECTION 8.10.	  	Appointment and Duties of Bond Registrar.	  	48
			
	SECTION 8.11.	  	Eligibility of Bond Registrar.	  	48
			
	SECTION 8.12.	  	Bond Registrar’s Performance of Duties.	  	48
			
	SECTION 8.13.	  	Replacement of Bond Registrar.	  	48
		
	ARTICLE IX MODIFICATION OR AMENDMENT OF THE INDENTURE	  	49
			
	SECTION 9.01.	  	Amendments Permitted.	  	49
			
	SECTION 9.02.	  	Effect of Supplemental Indenture.	  	50

  

 -III- 

 TABLE OF CONTENTS 

(continued) 
  

					
	 	  	 	  	Page
	SECTION 9.03.	  	Endorsement of Bonds; Preparation of New Bonds.	  	50
			
	SECTION 9.04.	  	Amendment of Particular Bonds.	  	51
		
	ARTICLE X DEFEASANCE	  	51
			
	SECTION 10.01.	  	Discharge of Indenture.	  	51
			
	SECTION 10.02.	  	Discharge of Liability on Bonds.	  	51
			
	SECTION 10.03.	  	Deposit of Money or Securities With Trustee.	  	52
			
	SECTION 10.04.	  	Payment of Bonds After Discharge of Indenture Obligation.	  	52
		
	ARTICLE XI MISCELLANEOUS	  	53
			
	SECTION 11.01.	  	Liability of Authority Limited to Revenues.	  	53
			
	SECTION 11.02.	  	Successor Is Deemed Included in All References to Predecessor.	  	53
			
	SECTION 11.03.	  	Limitation of Rights to Parties and Bondholders.	  	53
			
	SECTION 11.04.	  	Waiver of Notice.	  	54
			
	SECTION 11.05.	  	Destruction of Bonds.	  	54
			
	SECTION 11.06.	  	Severability of Invalid Provisions.	  	54
			
	SECTION 11.07.	  	Governing Law; Venue.	  	54
			
	SECTION 11.08.	  	Notices.	  	54
			
	SECTION 11.09.	  	Evidence of Rights of Bondholders.	  	55
			
	SECTION 11.10.	  	Disqualified Bonds.	  	56
			
	SECTION 11.11.	  	Money Held for Particular Bonds.	  	56
			
	SECTION 11.12.	  	Funds and Accounts; Business Day.	  	56
			
	SECTION 11.13.	  	Waiver of Personal Liability.	  	57
			
	SECTION 11.14.	  	Opinion of Bond Counsel.	  	57
			
	SECTION 11.15.	  	Complete Agreement.	  	57
			
	SECTION 11.16.	  	Execution in Several Counterparts.	  	57

  

 -IV- 

 TABLE OF CONTENTS 

(continued) 
  

					
	 	  	 	  	Page
	 EXHIBIT A
	  	 FORM OF BOND
	  	A-1
	 EXHIBIT B
	  	 FORM OF TRUSTEE AUDIT LETTER
	  	B-1
	 EXHIBIT C
	  	 FORM OF PROJECT FUND REQUISITION
	  	C-1
	 EXHIBIT D
	  	 FORM OF COSTS OF ISSUANCE FUND REQUISITION
	  	D-1

  

 -V- 

 THIS INDENTURE, made and entered into as of June 1, 2010, by and
between the CALIFORNIA POLLUTION CONTROL FINANCING AUTHORITY, a public instrumentality and political subdivision of the State of California (the “Authority”), and WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association
organized and existing under and by virtue of the laws of the United States of America, having a Corporate Trust Office in San Francisco, California, and being qualified to accept and administer the trusts hereby created (the “Trustee”);

 W I T N E S S E T H: 

WHEREAS, the Authority is a public instrumentality and political subdivision of the State of California, created by the
California Pollution Control Financing Authority Act (Chapter 1 (commencing with Section 44500) of Division 27 of the California Health and Safety Code), as supplemented and amended (the “Act”), and authorized to finance the
acquisition, construction, renovation, installation, improvement and equipping of water facilities constituting a “project” within the meaning of the Act, including those that will prevent the pollution of drinking water or improve the
quality of water or ensure the safe handling, recycling or disposal of materials that might otherwise be improperly disposed of; and 

WHEREAS, San Jose Water Company, a California corporation (the “Borrower”), has duly caused an application to
be filed with the Authority for financial assistance to finance the acquisition, construction, renovation, installation, improvement and equipping of certain water facilities that will prevent the pollution of drinking water or improve the quality
of water or ensure the safe handling, recycling or disposal of materials that might otherwise be improperly disposed of, in the Cities of Cupertino, San Jose, Santa Clara, Campbell, Monte Sereno, Saratoga and Los Gatos and contiguous areas in the
County of Santa Clara, California, as more particularly described in Exhibit A to the Loan Agreement (as defined herein) (the “Project”); and 

WHEREAS, the Authority, after due review of the Borrower’s application and deliberation, has adopted a resolution
approving the issuance of bonds to finance the Project for the Borrower; and 
 WHEREAS, the Authority has
authorized the issuance of its Revenue Bonds (San Jose Water Company Project) Series 2010A (the “Bonds”) pursuant to this Indenture to finance the Project; and 

WHEREAS, the Authority has authorized the execution and delivery of this Indenture to provide for the authentication and
delivery of the Bonds, to establish and declare the terms and conditions upon which the Bonds are to be issued and secured and to secure the payment of the principal thereof, premium, if any and interest thereon; and 

WHEREAS, the Authority is financing the cost of acquisition, construction, renovation, installation, improvement and
equipping of the Project by loaning the proceeds derived from the sale of the Bonds to the Borrower pursuant to the Loan Agreement, which requires the Borrower to make loan payments sufficient to pay the principal of, premium, if any, and interest
on, the Bonds and related expenses; and 
  

 1 

 WHEREAS, it has been determined that the estimated amount necessary to
finance the cost of the Project requires the issuance, sale and delivery of the Bonds in the aggregate amount of $50,000,000 as hereinafter provided; and 

WHEREAS, all acts and proceedings required by law necessary to make the Bonds, when executed by the Authority,
authenticated and delivered by the Trustee and duly issued, the valid, binding and legal limited obligations of the Authority, and to constitute this Indenture a valid and binding agreement for the uses and purposes herein set forth in accordance
with its terms, have been done and taken, and the execution and delivery of this Indenture have been in all respects duly authorized; and 

WHEREAS, Bonds issued under this Indenture will be secured by a pledge and assignment of certain rights under the Loan
Agreement; 
 NOW, THEREFORE, THIS INDENTURE WITNESSETH, that in order to secure the payment of the principal
of, premium, if any, and the interest on, all Bonds at any time issued and outstanding under this Indenture, according to their tenor, and to secure the performance and observance of all the covenants and conditions therein and herein set forth, and
to declare the terms and conditions upon and subject to which the Bonds are to be issued and received, and in consideration of the premises and of the mutual covenants herein contained and of the purchase and acceptance of the Bonds by the Holders
(as defined herein) thereof, and for other valuable consideration, the receipt whereof is hereby acknowledged, the Authority does hereby covenant and agree with the Trustee, for the equal and proportionate benefit of the respective Holders from time
to time of the Bonds, as follows: 
 ARTICLE I 

DEFINITIONS; CONTENT OF CERTIFICATES AND OPINIONS 

SECTION 1.01. Definitions. Unless the context otherwise requires, the terms defined in this Article shall,
for all purposes of this Indenture and of any indenture supplemental hereto and of any certificate, opinion or other document herein mentioned, have the meanings herein specified, to be equally applicable to both the singular and plural forms of any
of the terms herein defined. Unless otherwise defined in this Indenture, all terms used herein shall have the meanings assigned to such terms in the Act. 

Accountant 

“Accountant” means any firm of nationally-recognized independent certified public accountants selected by the
Borrower. 
 Act 

“Act” means the California Pollution Control Financing Authority Act (Chapter 1 (commencing with
Section 44500) of Division 27 of the California Health and Safety Code), as now in effect and as it may from time to time hereafter be amended or supplemented. 

 

 2 

 Additional Funded Debt 

“Additional Funded Debt” means of the Borrower means as of the date of any determination thereof, the greater of
(i) the amount, if any, by which the aggregate amount of all unsecured Current Debt of the Borrower then outstanding to the Corporation or its subsidiaries exceeds 15% of Consolidated Net Worth, or (ii) the amount, if any, by which the
aggregate amount of all unsecured Current Debt of the Borrower then outstanding under a bank credit facility or to the Corporation or its subsidiaries exceeds 30% of Consolidated Net Worth. 

Additional Payments 

“Additional Payments” means the payments required to be made by the Borrower pursuant to Sections 4.2(b),
(c) and (d) of the Agreement (including any interest required to be paid by the Borrower on such payments pursuant to Section 4.2(e) of the Agreement) and Sections 6.2(c), 6.3, 8.2 and 8.3 of the Agreement. 

Administrative Fees and Expenses 

“Administrative Fees and Expenses” means the reasonable and necessary expenses incurred by the Authority
pursuant to the Loan Agreement or this Indenture and the compensation and expenses paid to or incurred by the Trustee, the Bond Registrar and/or any Paying Agent under the Loan Agreement or this Indenture, which include but are not limited to
printing of Bonds, accomplishing transfers or new registration of Bonds, or other charges and other disbursements including those of their respective officers, directors, members, attorneys, agents and employees incurred in and about the
administration and execution of the Loan Agreement and this Indenture. 
 Agreement or Loan Agreement 

“Agreement” or “Loan Agreement” means that certain loan agreement by and between the Authority and the
Borrower, dated as of June 1, 2010, as originally executed and as it may from time to time be supplemented, modified or amended in accordance with the terms thereof and of this Indenture. 

Approving Opinion 

“Approving Opinion” means an opinion of Bond Counsel (addressed and delivered to the Authority and the Trustee)
that an action being taken (i) is authorized by the Act and this Indenture and complies with the terms of the Agreement, if applicable, and (ii) will not, in and of itself, adversely affect the Tax-exempt status of the Bonds. 

Authority 

“Authority” means the California Pollution Control Financing Authority created pursuant to, and as defined in,
the Act. 
 Authorized Denomination 

“Authorized Denomination” means $5,000 or any integral multiple thereof. 

 

 3 

 Authorized Representative 

“Authorized Representative” means with respect to the Borrower, each individual at the time designated to act on
behalf of the Borrower by a written certificate signed by the Borrower, furnished to the Trustee and the Authority and containing the specimen signature of each such individual. With respect to the Authority, “Authorized Representative”
shall mean any of the Executive Director of the Authority and any individual or individuals at the time designated to act on behalf of the Authority by a written certificate signed by the Executive Director of the Authority, furnished to the Trustee
and the Borrower and containing the specimen signature of each such individual. 
 Beneficial Owners 

“Beneficial Owners” means those individuals, partnerships, corporations or other entities for whom the Direct
Participants have caused DTC to hold Book-Entry Bonds. 
 Bond Counsel 

“Bond Counsel” means any attorney at law or firm of attorneys of nationally recognized standing in matters
pertaining to the federal tax exemption of interest on bonds issued by states and political subdivisions, duly admitted to practice law before the highest court of any state of the United States of America, and acceptable to the Authority, but shall
not include counsel for the Borrower. 
 Bondholder 

See “Holder.” 

Bond Registrar or Registrar 

“Bond Registrar” or “Registrar” means the entity or entities performing the duties of the bond
registrar pursuant to Section 2.08 hereof. 
 Bonds or Bond 

“Bonds” or “Bond” means all revenue bonds of the Authority authorized by and at any time Outstanding
pursuant hereto and executed, issued and delivered in accordance with Section 2.02 hereof. 
 Book-Entry Bonds 

“Book-Entry Bonds” means the Bonds registered in the name of the nominee of DTC, or any successor securities
depository for such Bonds, as the registered owner thereof pursuant to the terms and provisions of Section 2.11 hereof. 
  

 4 

 Borrower 

“Borrower” means San Jose Water Company, a corporation organized and existing under the laws of the State of
California, or any entity which is the surviving, resulting or transferee entity in any merger, consolidation or transfer of assets permitted under Section 5.2 of the Agreement and also means, unless the context otherwise requires, an assignee
of the Agreement as permitted by Section 5.2 of the Agreement, but does not mean any affiliate of the Borrower. 
 Borrower Account 

 “Borrower Account” means all of the accounts by that name established pursuant to Section 3.04
hereof. 
 Business Day 

“Business Day” means any day other than (i) a Saturday, Sunday or legal holiday in the State of California,
(ii) a day on which commercial banks in New York, New York or the city or cities in which the Corporate Trust Office of the Trustee is located are authorized or required by law to close, or (iii) a day on which the New York Stock Exchange
is closed. 
 Capitalized Leases 

“Capitalized Leases” means any lease the obligation for Rentals with respect to which is required to be
capitalized on a balance sheet of the lessee in accordance with generally accepted accounting principles. 
 Capitalized Rentals

 “Capitalized Rentals” of any Person means as of the date of any determination thereof the amount at
which the aggregate Rentals due and to become due under all Capitalized Leases under which such Person is a lessee would be reflected as a liability on a consolidated balance sheet of such Person in accordance with generally accepted accounting
principles. 
 Certificate, Statement, Request, Requisition or Order of the Authority or the Borrower 

“Certificate,” “Statement,” “Request,” “Requisition” or “Order” of the
Authority or the Borrower mean, respectively, a written certificate, statement, request, requisition or order signed in the name of the Authority by its Chairman, Executive Director or such other individual as may be designated and authorized to
sign for the Authority, or in the name of the Borrower by an Authorized Representative of the Borrower. Any such instrument and supporting opinions or representations, if any, may, but need not, be combined in a single instrument with any other
instrument, opinion or representation, and the two or more so combined shall be read and construed as a single instrument. If and to the extent required by Section 1.02 hereof, each such instrument shall include the statements provided for in
Section 1.02 hereof. 
 Code 

“Code” means the Internal Revenue Code of 1986, as amended from time to time. 

Completion Date 

“Completion Date” means the date of completion of the Project as that date shall be certified as provided in
Section 3.3 of the Agreement. 
  

 5 

 Consolidated Funded Debt 

“Consolidated Funded Debt” means all Funded Debt of the Borrower and its Restricted Subsidiaries, determined on
a consolidated basis eliminating intercompany items. 
 Consolidated Net Income 

“Consolidated Net Income” means for any period means the gross revenues of the Borrower and its Restricted
Subsidiaries for such period less all expenses and other proper charges (including taxes on income), determined on a consolidated basis after eliminating earnings or losses attributable to outstanding Minority Interests, but excluding in any event:

 (a) any gains or losses on the sale or other disposition of Investments or fixed or capital assets, and any
taxes on such excluded gains and any tax deductions or credits on account of any such excluded losses; 
 (b)
the proceeds of any life insurance policy; 
 (c) net earnings and losses of any Restricted Subsidiary accrued
prior to the date it became a Restricted Subsidiary; 
 (d) net earnings and losses of any corporation (other
than a Restricted Subsidiary), substantially all the assets of which have been acquired in any manner by the Borrower or any Restricted Subsidiary, realized by such corporation prior to the date of such acquisition; 

(e) net earnings and losses of any corporation (other than a Restricted Subsidiary) with which the Borrower or a
Restricted Subsidiary shall have consolidated or which shall have merged into or with the Borrower or a Restricted Subsidiary prior to the date of such consolidation or merger; 

(f) net earnings of any business entity (other than a Restricted Subsidiary) in which the Borrower or any Restricted
Subsidiary has an ownership interest unless such net earnings shall have actually been received by the Borrower or such Restricted Subsidiary in the form of cash distributions; 

(g) any portion of the net earnings of any Restricted Subsidiary which for any reason is unavailable for payment of
dividends to the Borrower or any other Restricted Subsidiary; 
 (h) earnings resulting from any reappraisal,
revaluation or write-up of assets; 
 (i) any deferred or other credit representing any excess of the equity in
any Subsidiary at the date of acquisition thereof over the amount invested in such Subsidiary; 
 (j) any gain
arising from the acquisition of any Securities of the Borrower or any Restricted Subsidiary; and 
  

 6 

 (k) any reversal of any contingency reserve, except to the extent that
provision for such contingency reserve shall have been made from income arising during such period. 
 Consolidated Net Income Available for
Interest Charges 
 “Consolidated Net Income Available for Interest Charges” for any period means:
(1) Consolidated net Income, plus (2) the sum of (i) State, federal or local taxes measured by income and excess profits taxes paid or accrued by the Borrower and its Restricted Subsidiaries on account of such Consolidated Net Income
during said period plus (ii) all Interest Charges of the Borrower and its Restricted Subsidiaries for said period (but only to the extent deducted in computing Consolidated Net Income for said period). 

Consolidated Net Worth 

“Consolidated Net Worth” means as of any date the aggregate amount of the capital stock accounts (less treasury
stock), retained earnings and surplus of the Borrower and its Restricted Subsidiaries after deducting Minority Interests to the extent included in the capital stock accounts of the Borrower, all as determined on a consolidated basis for the Borrower
and its Restricted Subsidiaries. 
 Corporate Trust Office 

“Corporate Trust Office” means with respect to the Trustee, the office of the Trustee at which at any particular
time its corporate trust business shall be principally administered, which office at the date hereof is located in San Francisco, California; provided, however, that with respect to presentation of Bonds for payment or for registration of transfer
and exchange such term shall mean the office or agency of the Trustee at which, at any particular time, its corporate trust agency business shall be conducted. 

Corporation 

“Corporation” means SJW Corp., a California corporation which is the parent company of the Borrower, and any
person who succeeds to all or substantially all of the assets and business of SJW Corp. 
 Costs of Issuance 

“Costs of Issuance” means all items of expense directly or indirectly payable by or reimbursable to the
Authority or the Borrower and related to the authorization, issuance, sale and delivery of the Bonds, including but not limited to costs of preparation and reproduction of documents, printing expenses, filing and recording fees, initial fees and
charges of the Trustee, underwriting fees, legal fees and charges, fees and disbursements of consultants and professionals, rating agency fees, fees and charges for preparation, execution and safekeeping of the Bonds and any other cost, charge or
fee incurred in connection with the original issuance of the Bonds which constitutes a “cost of issuance” within the meaning of Section 147(g) of the Code. 
  

 7 

 Costs of Issuance Fund 

“Costs of Issuance Fund” means the fund by that name established pursuant to Section 3.04 hereof.

 Costs of the Project 

“Costs of the Project” means the sum of the items, or any such item, authorized to be paid from the Project Fund
pursuant to the provisions of Section 3.2 of the Agreement, but shall not include any Costs of Issuance. 
 Current Debt 

“Current Debt” of any Person means (i) all Indebtedness of such Person for borrowed money payable on demand
or in less than one year and (ii) all Guaranties by such Person of Current Debt of others; provided that in the determination of Current Debt of the Borrower or any Restricted Subsidiary, there shall be excluded any Indebtedness for Ordinary
Course Deposits. 
 Date of Delivery 

“Date of Delivery” means June 16, 2010, the date of initial issuance and delivery of the Bonds. 

Default Rate 

“Default Rate” means seven percent (7.0%) per annum or, if seven percent (7.0%) is greater than the
rate then permitted by law, at the maximum rate so permitted. 
 Determination of Taxability 

“Determination of Taxability” means the occurrence or existence of any of the conditions or events more fully
described in Section 7.3(b) of the Loan Agreement. 
 Direct Participants 

“Direct Participants” means those broker-dealers, banks and other financial institutions from time to time for
which DTC holds the Bonds as securities depository. 
 DTC 

“DTC” means The Depository Trust Company, New York, New York, a limited purpose trust company organized under
the New York Banking Law, or any successor securities depository for the Bonds. 
 Environmental Regulations 

“Environmental Regulations” means any federal, state or local law, statute, code, ordinance, regulation,
requirement or rule relating to dangerous, toxic or hazardous pollutants, Hazardous Substances, chemical waste, materials or substances. 
  

 8 

 Event of Default 

“Event of Default” means any of the events specified in Section 7.01 hereof. 

Fiscal Year 

“Fiscal Year” means the period beginning on January 1 of each year and ending on the next succeeding
December 31, or any other twelve-month, or fifty-two week, period hereafter selected and designated as the official fiscal year period of the Borrower. 

Fitch 

“Fitch” means Fitch, Inc. a corporation organized and existing under the laws of the State of Delaware, doing
business as Fitch Ratings, its successors and their assigns, or, if such entity shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, “Fitch” shall be deemed to refer to any other
nationally recognized securities rating agency (other than S&P or Moody’s) designated by the Authority, with the approval of the Borrower, by notice to the Trustee. 

Funded Debt 

“Funded Debt” of any Person means (i) all Indebtedness of such Person for borrowed money or which has been
incurred in connection with the acquisition of assets in each case having a final maturity of one or more than one year from the date of origin thereof (or which is renewable or extendible at the option of the obligor for a period or periods more
than one year from the date of origin), including all payments in respect thereof that are required to be made within one year from the date of any determination of Funded Debt, whether or not the obligation to make such payments shall constitute a
current liability of the obligor under generally accepted accounting principles, (ii) all Capitalized Rentals of such Person, (iii) all Guaranties by such Person of Funded Debt of others and (iv) for purposes of calculating compliance
with Section 5.2(a)(iii)(C)(x) of the Loan Agreement and the definitions contained therein, Funded Debt of the Borrower shall include all Additional Funded Debt of the Borrower; provided that in the determination of Funded Debt of the Borrower
or any Restricted Subsidiary, there shall be excluded any Indebtedness for Ordinary Course Deposits. 
 Governmental Obligation

 “Governmental Obligation” means a bond, note or other evidence of indebtedness issued by the State
or any agency or political subdivision of the State, which is described by Sections 103 and 141-150 of the Code. 
 Guaranties

 “Guaranties” by any Person means all obligations (other than endorsements in the ordinary course of
business of negotiable instruments for deposit or collection) of such Person guaranteeing, or in effect guaranteeing, any Indebtedness, dividend or other obligation of any other Person (the “primary obligor”) in any manner, whether
directly or indirectly, including, without limitation, all obligations incurred through an agreement, contingent or otherwise, by such Person: (i) to purchase such Indebtedness or obligation or any property or assets constituting security

  

 9 

 
therefore, (ii) to advance or supply funds (x) for the purchase or payment of such Indebtedness or obligation, (y) to maintain working capital or other balance sheet condition or
otherwise to advance or make available funds for the purchase or payment of such Indebtedness or obligation, (iii) to lease property or to purchase Securities or other property or services primarily for the purpose of assuring the owner of such
Indebtedness or obligation of the ability of the primary obligor to make payment of the Indebtedness or obligation, or (iv) otherwise to assure the owner of the Indebtedness or obligation of the primary obligor against loss in respect thereof.
For the purpose of all computations made, a Guaranty in respect of any Indebtedness for borrowed money which has been guaranteed, and a Guaranty in respect of any other obligation or liability or any dividend shall be deemed to be Indebtedness equal
to the maximum aggregate amount of such obligations, liability or dividend. 
 Guarantor 

“Guarantor” means any Person that has guaranteed the obligations of the Borrower under the Agreement.

 Hazardous Substances 

“Hazardous Substances” means (a) any oil, flammable substance, explosives, radioactive materials, hazardous
wastes or substances, toxic wastes or substances or any other wastes, materials or pollutants which (i) pose a hazard to the Project or to persons on or about the Project or (ii) cause the Project to be in violation of any Environmental
Regulation; (b) asbestos in any form which is or could become friable, urea formaldehyde foam insulation, transformers or other equipment which contain dielectric fluid containing levels of polychlorinated biphenyls, or radon gas; (c) any
chemical, material or substance defined as or included in the definition of “waste,” “hazardous substances,” “hazardous wastes,” “hazardous materials,” “extremely hazardous waste,” “restricted
hazardous waste,” or “toxic substances” or words of similar import under any Environmental Regulation including, but not limited to, the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”), 42 USC
§§ 9601 et seq.; the Resource Conservation and Recovery Act (“RCRA”), 42 USC §§ 6901 et seq.; the Hazardous Materials Transportation Act, 49 USC §§ 1801 et seq.; the Federal Water Pollution Control Act, 33 USC
§§ 1251 et seq.; the California Hazardous Waste Control Law (“HWCL”), Cal. Health & Safety Code §§ 25100 et seq.; the Hazardous Substance Account Act (“HSAA”), Cal. Health & Safely Code
§§ 25300 et seq.; the Underground Storage of Hazardous Substances Act, Cal. Health & Safety Code §§ 25280 et seq.; the Porter-Cologne Water Quality Control Act (the “Porter-Cologne Act”), Cal. Water Code
§§ 13000 et seq., the Safe Drinking Water and Toxic Enforcement Act of 1986 (Proposition 65); and Title 22 of the California Code of Regulations, Division 4, Chapter 30; (d) any other chemical, material or substance, exposure to which
is prohibited, limited or regulated by any governmental authority or agency or may or could pose a hazard to the health and safety of the occupants of the Project or the owners and/or occupants of property adjacent to or surrounding the Project, or
any other person coming upon the Project or adjacent property; or (e) any other chemical, materials or substance which may or could pose a hazard to the environment. 

Holder or Bondholder or Owner 

“Holder” or “Bondholder,” or “Owner,” whenever used herein with respect to a Bond, means the
Person in whose name such Bond is registered. 
  

 10 

 Indebtedness 

“Indebtedness” of any Person means and includes all obligations of such Person which in accordance with
generally accepted accounting principles shall be classified upon a balance sheet of such Person as liabilities of such Person, and in any event shall include all (i) obligations of such Person for borrower money or which has been incurred in
connection with the acquisition of property or assets, (ii) obligations secured by any Lien upon property or assets owned by such Person, even though such Person has not assumed or become liable for the payment of such obligations,
(iii) obligations created or arising under any conditional sale or other title retention agreement with respect to property acquired by such Person, notwithstanding the fact that the rights and remedies of the seller, lender or lessor under
such agreement in the event of default are limited to repossession or sale of property, (iv) Capitalized Rentals and (v) Guaranties of obligations of others of the character referred to in this definition. For the purpose of computing the
“Indebtedness” of any Person, there shall be excluded any particular Indebtedness to the extent that, upon or prior to the maturity thereof, there shall have been deposited with the proper depository in trust the necessary funds (or
evidences of such Indebtedness, if permitted by the instrument creating such Indebtedness) for the payment, redemption or satisfaction of such Indebtedness; and thereafter such funds and evidences of Indebtedness so deposited shall not be included
in any computation of the liabilities of such Person. 
 Indenture 

“Indenture” means this Indenture, as originally executed or as it may from time to time be supplemented,
modified or amended by any Supplemental Indenture. 
 Information Services 

“Information Services” means Financial Information, Inc.’s “Daily Called Bond Service,” 30
Montgomery Street, 10th Floor, Jersey City, New Jersey 07302, Attention: Editor; Kenny Information Services “Called Bond Service,” 65 Broadway, 16th Floor, New York, New York 10006; Moody’s “Mergent/FIS, Inc.,” 5250 77
Center Drive, Suite 150, Charlotte, North Carolina 28217, Attention: Called Bonds Department; the Municipal Securities Rulemaking Board c/o Electronic Municipal Market Access at www.emma.msrb.org; and Standard and Poor’s “Called Bond
Record,” 55 Water Street, New York, NY 10041; or, in accordance with then current guidelines of the Securities and Exchange Commission, such other services providing information with respect to called bonds, or no such services, as the
Authority may indicate in a Certificate of the Authority delivered to the Trustee. 
 Interest Account 

“Interest Account” means the account by that name in the Revenue Fund established pursuant to Section 5.02
hereof. 
 Interest Charges 

“Interest Charges” of any Person with respect to any Indebtedness thereof for any period means all interest
charges (including amortization of debt discount or amounts imputed as interest of any Indebtedness in accordance with sound accounting practice) paid, payable or 

 

 11 

 
accruing in respect of such Indebtedness for such period; provided that if the interest charges on such Indebtedness are to be determined for any period commencing after the date of computation,
then in the case of any Indebtedness evidenced by an obligation bearing interest at a variable rate or at different fixed rates, or any obligation on which interest does not begin to accrue at the date of computation of Interest Charges, or any
obligation on which interest does not become payable until a specified date more than one year after the date of computation, the interest charges attributable to such obligation shall be calculated on the basis of the greater of (i) the rate
payable on such obligation on the date of computation and (ii) the average interest rate payable on all Funded Debt of such Person during the three-month period immediately preceding the date of computation. 

Interest Payment Date 

“Interest Payment Date” means June 1 and December 1 of each year, commencing December 1, 2010.

 Interest Period 

“Interest Period” means the period from and including any Interest Payment Date to and including the day
immediately preceding the next following Interest Payment Date, except that the first Interest Period shall be the period from and including the date of the first authentication and delivery of the Bonds to and including the day immediately
preceding the first Interest Payment Date relating to such Bonds. 
 Investment Securities 

“Investment Securities” means any of the following securities (other than those issued by the Authority, the
Borrower or any Guarantor): 
 (i) Investments in direct obligations of the United States of America or any
agency or instrumentality of the United States of America, the payment or guarantee of which constitutes a full faith and credit obligation of the United States of America; 

(ii) Investments in certificates of deposit maturing within one year from the date of acquisition thereof, issued by a
bank or trust company organized under the laws of the United States or any state thereof, having capital, surplus and undivided profits aggregating at least $200,000,000 and whose long-term certificates of deposit are, at the time of acquisition
thereof, rated “A” or better by S&P or “A2” or better by Moody’s; 
 (iii)
Investments in commercial paper maturing in 270 days or less from the date of issuance which, at the time of acquisition by the Borrower, is accorded the highest rating by S&P or Moody’s or is issued by a corporation organized under the
laws of the United States or any state thereof with outstanding corporate debt obligations which are rated “AA” or better by S&P, or “Aa2” or better by Moody’s; and 

(iv) Investments in (i) money market funds, (ii) mutual funds invested primarily in corporate debt obligations
which are rated “AA” or better by S&P or “Aa2” or better by Moody’s, or preferred stock of any such Person; provided that in no event shall (x) any such corporate debt obligations held outside a mutual fund be in
the form of adjustable or variable rate securities and (y) more than 5% of the assets of any such mutual fund be in the form of adjustable or variable rate securities. 

 

 12 

 Investments 

“Investments” means all investments, in cash or by delivery of property made, directly or indirectly in any
Person, whether by acquisition of shares of capital stock, indebtedness or other obligations or Securities or by loan, advance capital contribution or otherwise; provided, however, that “Investments” shall not mean or include routine
investments in property to be used or consumed in the ordinary course of business. 
 Lien 

“Lien” means any interest in property securing an obligation owed to, or a claim by, a Person other than the
owner of the property, whether such interest is based on the common law, statute or contract, and including but not limited to the security interest lien arising from a mortgage, encumbrance, pledge, conditional sale or trust receipt or a lease,
consignment or bailment for security purposes, but, excluding in the case of the Borrower or any Restricted Subsidiary, rights, reserved to or vested in any municipality or public authority as an incident of any franchise, grant, license or permit
of the Borrower or any Restricted Subsidiary, as the case may be, whether by the terms of any franchise, grant, license or permit or provision of law or otherwise. The term “Lien” shall include reservations, exceptions, encroachments,
easements, rights-of-way, covenants, conditions, restrictions, leases and other title exceptions and encumbrances (including, with respect to stock, stockholder agreements, voting trust agreements, buyback agreements and all similar arrangements)
affecting property. For the purposes of this definition, the Borrower or a Restricted Subsidiary shall be deemed to be the owner of any property which it has acquired or holds subject to a conditional sale agreement, Capitalized Lease or other
arrangement pursuant to which title to the property has been retained by or vested in some other Person for security purposes and such retention or vesting shall constitute a Lien. 

Loan Default Event 

“Loan Default Event” means any one or more of the events specified in Section 7.1 of the Agreement.

 Loan Repayments 

“Loan Repayments” means the payments so designated and required to be made by the Borrower pursuant to
Section 4.2 of the Agreement. 
 Minority Interests 

“Minority Interests” means any shares of stock of any class of a Restricted Subsidiary (other than
directors’ qualifying shares as required by law) that are not owned by the Borrower and/or one or more of its Restricted Subsidiaries. Minority Interests shall be valued by valuing Minority Interests constituting preferred stock at the
voluntary or involuntary liquidating value of such preferred stock, whichever is greater, and by valuing Minority Interest constituting common stock at the book value of capital and surplus applicable thereto adjusted, if necessary, to reflect any
changes from the book value of such common stock required by the foregoing method of valuing Minority Interests in preferred stock. 
  

 13 

 Moody’s 

“Moody’s” means Moody’s Investors Service, Inc., a corporation organized and existing under the laws
of the State of Delaware, its successors and their assigns, or, if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, “Moody’s” shall be deemed to refer to any
other nationally recognized securities rating agency (other than S&P or Fitch) designated by the Authority, with the approval of the Borrower, by notice to the Trustee. 

Opinion of Counsel 

“Opinion of Counsel” means a written opinion (addressed and delivered to the Authority and the Trustee) of
counsel (who may be counsel for the Authority) selected by the Authority. If and to the extent required by the provisions of Section 1.02 hereof, each Opinion of Counsel shall include the statements provided for in Section 1.02 hereof.

 Ordinary Course Deposits 

“Ordinary Course Deposits” means in the case of the Borrower or any Restricted Subsidiary any deposits or
advances received by the Borrower or such Restricted Subsidiary, as the case may be (whether shown on the Borrower’s balance sheet as advances for construction, contributions in aid of construction, or otherwise), in the ordinary course of its
business from customers, consumers, property developers or other Persons if, in each case, such deposits or advances were made in accordance with customary practices of the utility industry in existence at such time or pursuant to regulatory
authority. 
 Outstanding 

“Outstanding,” when used as of any particular time with reference to Bonds, means (subject to the provisions of
Section 11.10 hereof) all Bonds theretofore, or thereupon being, authenticated and delivered by the Trustee under this Indenture except (1) Bonds theretofore canceled by the Trustee or surrendered to the Trustee for cancellation;
(2) Bonds with respect to which liability of the Authority shall have been discharged in accordance with Section 10.02 hereof, including Bonds (or portions of Bonds) referred to in Section 11.10 hereof; and (3) Bonds for the
transfer or exchange of or in lieu of or in substitution for which other Bonds shall have been authenticated and delivered by the Trustee pursuant to this Indenture. 

Owner 

See “Holder.” 
  

 14 

 Participating Affiliate 

“Participating Affiliate” means, with respect to the Borrower, each Person (i) that directly or indirectly,
through one or more intermediaries or other Persons, controls, or is controlled by, or is under common control with, the Borrower, and (ii) that is itself, or with its affiliates described in clause (i), a “participating party” within
the meaning of the Act. For purposes of this definition, a “Person” who is an individual includes the spouse, children or parents of such Person (collectively, “relatives”), and includes any trust of which such Person or his or
her relatives is the trustee or a beneficiary. For the purpose of this definition, the “control” of a Person shall mean the possession, directly or indirectly, of the power to direct or cause the direction of its management or policies,
whether through the ownership of a majority of voting securities or membership interests, as trustee, by contract or otherwise. 
 Paying
Agent 
 “Paying Agent” means the Paying Agent described in Section 8.07 hereof. 

Person 

“Person” means an individual, corporation, firm, association, limited liability company, partnership, trust, or
other legal entity or group of entities, including a governmental entity or any agency or political subdivision thereof. 
 Principal
Account 
 “Principal Account” means the account by that name in the Revenue Fund established
pursuant to Section 5.02. 
 Principal Payment Date 

“Principal Payment Date” means June 1, 2040. 

Proceeds Account 

“Proceeds Account” means all of the accounts by that name established pursuant to Section 3.04 hereof.

 Pro Forma Interest Charges 

“Pro Forma Interest Charges” means, as of the date of any determination thereof, the sum of Interest Charges
with respect to all Funded Debt of the Borrower and its Restricted Subsidiaries (other than Funded Debt to be retired concurrently with the issuance of the Funded Debt then to be issued) for the twelve full consecutive calendar months immediately
following such date of determination, determined on a pro forma basis, including, Interest Charges on all Funded Debt then to be issued; provided, that if Funded Debt of the Borrower includes Additional Funded Debt of the Borrower, the
Interest Charges for such Additional Funded Debt shall be based upon the rate then payable under the bank credit facility; provided further that if the unsecured debt of the Borrower to the Corporation or its subsidiaries exceeds the Borrower’s
unsecured debt under the bank credit facility at the time of reference, the Interest Charges shall be based upon the rate then payable on such unsecured debt to the Corporation or its subsidiaries. 

 

 15 

 Project 

“Project” means the project described in Exhibit A to the Agreement, and as it may be amended pursuant to the
terms of the Agreement. 
 Project Fund 

“Project Fund” means the fund by that name established pursuant to Section 3.03 hereof. 

Rating Agency 

“Rating Agency” means Moody’s, if Moody’s is then rating the Bonds, S&P, if S&P is then rating
the Bonds and/or Fitch, if Fitch is then rating the Bonds, or such other nationally-recognized rating agency then rating the Bonds. 
 Rebate
Fund 
 “Rebate Fund” means the fund by that name created pursuant to Section 5.05 hereof.

 Rebate Instructions 

“Rebate Instructions” means those calculations and directions required to be delivered to the Trustee and, if
requested, the Authority by the Borrower under the Tax Certificate. 
 Rebate Requirement 

“Rebate Requirement” means the Rebate Requirement defined in the Tax Certificate. 

Record Date 

“Record Date” means the day, whether or not a Business Day, which is the fifteenth day of the month prior to an
Interest Payment Date. 
 Redemption Account 

“Redemption Account” means the account by that name established in the Revenue Fund pursuant to
Section 5.02 hereof. 
 Rentals 

“Rentals” means mean and include, as of the date of any determination thereof, all fixed payments (including as
such all payments which the lessee is obligated to make to the lessor on termination of the lease or surrender of the property) payable by the Borrower or a Restricted Subsidiary, as lessee or sublessee under a lease of real or personal property,
but shall be exclusive of any amounts required to be paid by the Borrower or a Restricted Subsidiary (whether or not designated as rents or additional rents) on account of maintenance, repairs, insurance, taxes and similar charges. Fixed rents under
any so-called “percentage leases” shall be computed solely on the basis of the minimum rents, if any, required to be paid by the lessee regardless of sales volume or gross revenues. 

 

 16 

 Restricted Subsidiary 

“Restricted Subsidiary” means any Subsidiary (i) which is organized under the laws of the United States or
any state thereof; (ii) which conducts substantially all of its business and has substantially all of its assets within the United States; and (iii) of which more than 80% (by number of votes) of the Voting Stock is beneficially owned by
the Borrower and/or one or more Restricted Subsidiaries. 
 Retained Rights 

“Retained Rights” means the right of the Authority to receive certain payments, if any, with respect to fees,
expenses and indemnification under the Loan Agreement, or to enforce its rights under Sections 3.1, 4.2(b), 4.2(c), 4.2(d), 6.2(c), 6.3, 8.2 and 8.3 of the Loan Agreement and the rights expressly granted to the Authority under the Loan Agreement to
indemnification, inspection, consent and receipt of certificates, notices and opinions. 
 Revenue Fund 

“Revenue Fund” means the fund by that name established pursuant to Section 5.01. 

Revenues 

“Revenues” means all amounts received by the Authority or the Trustee for the account of the Authority pursuant
or with respect to the Agreement, including, without limiting the generality of the foregoing, Loan Repayments (including both timely and delinquent payments, any late charges, and paid from whatever source), prepayments, insurance proceeds,
condemnation proceeds, and all interest, profits or other income derived from the investment of amounts in any fund or account established pursuant to this Indenture (except as provided below), but not including Additional Payments, including
without limitation any Administrative Fees and Expenses, or any moneys paid for deposit into the Rebate Fund or the Borrower Account of the Costs of Issuance Fund and investment earnings on any moneys held in such account(s) or Fund. 

S&P 

“S&P” means Standard & Poor’s Ratings Group, a division of The McGraw-Hill Companies, Inc.,
its successors and their assigns, and, if such entity shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, “S&P” shall be deemed to refer to any other nationally recognized securities
rating agency (other than Moody’s or Fitch) designated by the Authority, with the approval of the Borrower, by notice to the Trustee. 
  

 17 

 Securities Depositories 

“Securities Depositories” means the following registered securities depositories: The Depository Trust Company,
55 Water Street, New York, New York 10041-0099 (for notices of redemption – Attn: Call Notification Department, Redemption Notice Enclosed, Fax-(212) 855-7232, 7233, 7234 or 7235; for notices of tender – Attn: Put Bonds Unit, Put Notice
Enclosed, Fax-(212) 855-5235); or, in accordance with then-current guidelines of the Securities and Exchange Commission, such other securities depositories, or no such depositories, as the Authority may indicate in a Certificate of the Authority
delivered to the Trustee. 
 Security 

“Security” shall have the same meaning as in Section 2(l) of the Securities Act of 1933, as amended.

 State 

“State” means the State of California. 

Subsidiary 

“Subsidiary” means a subsidiary of the Borrower. The term “subsidiary” means, as to any particular
parent corporation, any corporation of which more than 50% (by number of votes) of the Voting Stock shall be beneficially owned, directly or indirectly, by such parent corporation. 

Supplemental Indenture 

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

Surplus Account 

“Surplus Account” means the account established within the Revenue Fund pursuant to Section 3.03 hereof.

 Tax Certificate 

“Tax Certificate” means the Tax Certificate and Agreement of the Borrower and the Authority dated the Date of
Delivery. 
 Tax-exempt 

“Tax-exempt” means, with respect to interest on any obligations of a state or local government, including the
Bonds, that such interest is excluded from gross income for federal income tax purposes (other than in the case of a Holder of any Bonds who is a substantial user of any component of the Project or a related person within the meaning of
Section 147(a) of the Code) whether or not such interest is includable as an item of tax preference or otherwise includable directly or indirectly for purposes of calculating tax liabilities, including any alternative minimum tax or
environmental tax, under the Code. 
  

 18 

 Total Capitalization 

“Total Capitalization” means as of any date the sum of (i) Consolidated Net Worth plus
(ii) Consolidated Funded Debt. 
 Trustee 

“Trustee” means Wells Fargo Bank, National Association, a national banking association organized and existing
under and by virtue of the laws of the United States of America, having Corporate Trust Offices in San Francisco, California, or its successor as Trustee hereunder as provided in Section 8.01. 

Voting Stock 

“Voting Stock” means Securities of any class or classes, the holders of which are ordinarily, in the absence of
contingencies, entitled to elect a majority of the corporate directors (or Persons performing similar functions). 

SECTION 1.02. Content of Certificates and Opinions. Every certificate or opinion provided for in this
Indenture with respect to compliance with any provision hereof shall include (1) a statement that the Person making or giving such certificate or opinion has read such provision and the definitions herein relating thereto; (2) a brief
statement as to the nature and scope of the examination or investigation upon which the certificate or opinion is based; (3) a statement that, in the opinion of such Person, such Person has made or caused to be made such examination or
investigation as is necessary to enable such Person to express an informed opinion with respect to the subject matter referred to in the instrument to which such Person’s signature is affixed; (4) a statement of the assumptions upon which
such certificate or opinion is based, and that such assumptions are reasonable; and (5) a statement as to whether, in the opinion of such Person, such provision has been complied with. 

Any such certificate or opinion made or given by an officer of the Authority or an officer or Authorized Representative
of the Borrower may be based, insofar as it relates to legal, accounting or business matters of either of them, upon a certificate or opinion of or representation by counsel, an Accountant or a management consultant, unless such officer or
Authorized Representative knows, or in the exercise of reasonable care should have known, that the certificate, opinion or representation with respect to the matters upon which such certificate, opinion or representation may be based, as aforesaid,
is erroneous. Any such certificate, opinion or representation made or given by counsel, an Accountant or a management consultant may be based, insofar as it relates to factual matters (with respect to which information is in the possession of the
Authority or the Borrower, as the case may be) upon a certificate or opinion of or representation by an officer of the Authority or an officer or Authorized Representative of the Borrower, unless such counsel, Accountant or management consultant
knows, or in the exercise of reasonable care should have known, that the certificate or opinion or representation with respect to the matters upon which such Person’s certificate or opinion may be based, as aforesaid, is erroneous. The same
officer of the Authority or officer or Authorized Representative of the Borrower, or the same counsel or Accountant or management consultant, as the case may be, need not certify to all of the matters required to be certified under any provision of
this Indenture, but different officers, Authorized Representatives, counsel, Accountants or management consultants may certify to different matters, respectively. 

 

 19 

 SECTION 1.03. Interpretation. (a) Unless the context
otherwise indicates, words expressed in the singular shall include the plural and vice versa and the use of the neuter, masculine, or feminine gender is for convenience only and shall be deemed to mean and include the neuter, masculine or feminine
gender, as appropriate. 
 (b) Headings of articles and sections herein and the table of contents hereof are
solely for convenience of reference, do not constitute a part hereof and shall not affect the meaning, construction or effect hereof. 

(c) All references herein to “Articles,” “Sections” and other subdivisions are to the corresponding
Articles, Sections or subdivisions of this Indenture; the words “herein,” “hereof,” “hereby,” “hereunder” and other words of similar import refer to this Indenture as a whole and not to any particular Article,
Section or subdivision hereof. 
 ARTICLE II 

THE BONDS 

SECTION 2.01. Authorization of Bonds. The Bonds shall be issued hereunder in order to obtain moneys to carry
out the purposes of the Act for the benefit of the Authority and the Borrower. The Bonds are designated as “California Pollution Control Financing Authority Revenue Bonds (San Jose Water Company Project), Series 2010A”. This Indenture
constitutes a continuing agreement with the Holders from time to time of the Bonds to secure the full payment of the principal (or redemption price) of, premium if any, and interest on all such Bonds subject to the covenants, provisions and
conditions herein contained. 
 SECTION 2.02. Form of the Bonds. The Bonds shall be issued in the
form of fully registered bonds and in the principal amount of $50,000,000, to be dated the Date of Delivery. The Bonds shall mature (subject to prior redemption at the prices and dates and upon the terms and conditions hereinafter set forth) on the
Principal Payment Date and shall bear interest at the rate of 5.10% per annum. 
 The Bonds shall be
issuable in Authorized Denominations. The Bonds shall be issued in substantially the form set forth in Exhibit A of this Indenture with such variations, insertions or omissions as are appropriate and not inconsistent therewith and shall conform
generally to the rules and regulations of any governmental authority or usage or requirement of law with respect thereto. The Bonds shall be numbered and lettered from one upward preceded by the letters “R-” prefixed to the number and may
bear such additional letters, numbers, legends or designations as the Bond Registrar determines are desirable. 

SECTION 2.03. Interest Rates. (A) The Bonds shall bear interest from and including the date of first
authentication and delivery thereof until payment of the principal or redemption price thereof shall have been made or provided for in accordance with the provisions hereof, whether at maturity, upon redemption or otherwise. Interest on the
Bonds with respect to the immediately preceding Interest Period shall be paid as provided below, provided that if any Interest Payment Date is not a Business Day, such interest shall be mailed or wired pursuant to this Section 2.03 on the next
succeeding Business Day, with the same effect as if made on the day such payment was due. Interest on the Bonds shall be computed upon the basis of a 360-day year, consisting of twelve 30-day months. 

 

 20 

 Subject to Section 2.10, payment of the interest on any Bond shall be
made to the Person appearing on the bond registration books of the Bond Registrar as the Bondholder thereof on the Record Date, such interest to be paid by the Paying Agent to such Bondholder (i) by check mailed by first class mail on the
Interest Payment Date, to such Bondholder’s address as it appears on the registration books or at such other address as has been furnished to the Bond Registrar as provided below, in writing by such Bondholder not later than the Record Date, or
(ii) upon written request at least three Business Days prior to the applicable Record Date of the Bondholder of Bonds aggregating not less than $1,000,000 in principal amount of such Bonds, by wire transfer in immediately available funds at an
account maintained in the United States at such wire address as such Bondholder shall specify in its written notice (any such written request shall remain in effect until rescinded in writing by such Bondholder); 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 rate shall be the Default Rate, and such defaulted interest shall be paid to the Bondholder in whose name any such
Bonds are registered at the close of business on the fifth Business Day next preceding the date of payment of such defaulted interest. Both the principal of and premium, if any, on the Bonds shall be payable upon surrender thereof in lawful money of
the United States of America at the Corporate Trust Office of the Trustee. 
 SECTION 2.04. Execution of
Bonds. The Bonds shall be executed in the name and on behalf of the Authority with the manual or facsimile signature of its Chairman, under the seal of the Authority. Such seal may be in the form of a facsimile of the Authority’s seal and
may be reproduced, imprinted or impressed on the Bonds. The Bonds shall then be delivered to the Trustee for authentication by it, as directed by the Authority. In case the officer who shall have signed any of the Bonds shall cease to be such
officer of the Authority before the Bonds so signed shall have been authenticated or delivered by the Trustee or issued by the Authority, such Bonds may nevertheless be authenticated, delivered and issued and, upon such authentication, delivery and
issue, shall be as binding upon the Authority as though the officer who signed the same had continued to be such officer of the Authority, and also any Bonds may be signed on behalf of the Authority by such individual as at the actual date of
execution of such Bonds shall be the proper officer of the Authority although at the nominal date of such Bonds any such individual shall not have been such officer of the Authority. 

Only such of the Bonds as shall bear thereon a certificate of authentication substantially in the form set forth in
Exhibit A, with the manual signature of the Trustee as authenticating agent, shall be valid or obligatory for any purpose or entitled to the benefits of this Indenture, and such certificate of the Trustee shall be conclusive evidence that the Bonds
so authenticated have been duly executed, authenticated and delivered hereunder and are entitled to the benefits of this Indenture. 

SECTION 2.05. Transfer of Bonds. Any Bond may, in accordance with its terms, be transferred, upon the books
required to be kept pursuant to the provisions of Section 2.07 hereof, by the Person in whose name it is registered, in person or by its duly authorized attorney, upon surrender of such registered Bond for cancellation, accompanied by delivery
of a written instrument of transfer, duly executed in a form acceptable to the Trustee. Transfer of a Bond shall not be permitted by the Trustee during the period Bonds are selected for redemption or after the Record Date prior to the next
succeeding Interest Payment Date. 
  

 21 

 Whenever any Bond or Bonds shall be surrendered for transfer, the Authority
shall execute and the Trustee shall authenticate and deliver a new Bond or Bonds for a like aggregate principal amount in Authorized Denominations. The Trustee shall require the Bondholder requesting such transfer to pay any tax or other
governmental charge required to be paid with respect to such transfer. The cost of printing Bonds and any services rendered or expenses incurred by the Trustee in connection with any such transfer shall be paid by the Borrower. 

SECTION 2.06. Exchange of Bonds. Bonds may be exchanged at the Corporate Trust Office of the Trustee for a
like aggregate principal amount of Bonds of other Authorized Denominations. The Trustee shall require the Bondholder requesting such exchange to pay any tax or other governmental charge required to be paid with respect to such exchange. The cost of
printing Bonds and any services rendered or expenses incurred by the Authority or the Trustee in connection with any such exchange shall be paid by the Borrower. 

SECTION 2.07. Bond Register. The Trustee will keep or cause to be kept at its Corporate Trust Office
sufficient books for the registration and transfer of the Bonds, which shall at all times be open to inspection during regular business hours by the Authority upon reasonable notice; and, upon presentation for such purpose, the Trustee shall, under
such reasonable regulations as it may prescribe, register or transfer or cause to be registered or transferred, on such books, Bonds as hereinbefore provided. 

SECTION 2.08. Temporary Bonds. The Bonds may be issued in temporary form exchangeable for definitive Bonds
when ready for delivery. Any temporary Bond may be printed, lithographed or typewritten, shall be in an Authorized Denomination, shall be in fully registered form without coupons and may contain such reference to any of the provisions of this
Indenture as may be appropriate. Every temporary Bond shall be executed by the Authority and be authenticated by the Trustee upon the same conditions and in substantially the same manner as the definitive Bonds. If the Authority issues temporary
Bonds it will execute and deliver definitive Bonds as promptly thereafter as practicable, and thereupon the temporary Bonds may be surrendered, for cancellation, in exchange therefor at the Corporate Trust Office of the Trustee and the Trustee shall
authenticate and deliver in exchange for such temporary Bonds an equal aggregate principal amount of definitive Bonds in Authorized Denominations. Until so exchanged, the temporary Bonds shall be entitled to the same benefits under this Indenture as
definitive Bonds authenticated and delivered hereunder. 
 SECTION 2.09. Bonds Mutilated, Lost,
Destroyed or Stolen. If any Bond shall become mutilated, the Authority, at the expense of the Holder of said Bond, shall execute, and the Trustee shall thereupon authenticate and deliver, a new Bond of like tenor in exchange and substitution for
the Bond so mutilated, but only upon surrender to the Trustee of the Bond so mutilated. Every mutilated Bond so surrendered to the Trustee shall be canceled by it and upon request delivered to the Authority. If any Bond shall be lost, destroyed or
stolen, evidence of such loss, destruction or theft may be submitted to the Authority and the Trustee and, if such evidence be satisfactory to both and indemnity satisfactory to them shall be given, the Authority, at the expense of the Holder, shall
execute, and the Trustee shall thereupon authenticate and deliver, a new Bond 
  

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of like tenor in lieu of and in substitution for the Bond so lost, destroyed or stolen (or if any such Bond shall have matured, instead of issuing a substitute Bond, the Trustee may pay the same
without surrender thereof upon receipt of indemnity satisfactory to the Trustee). The Authority may require payment by the Holder of a sum not exceeding the actual cost of preparing each new Bond issued under this Section and of the expenses which
may be incurred by the Authority and the Trustee in the premises. If, after the delivery of such new Bond, a bona fide purchaser of the original Bond in lieu of which such new Bond was issued presents for payment or registration such original Bond,
the Trustee shall be entitled to recover such new Bond from the person to whom it was delivered or any person taking therefrom, except a bona fide purchaser, and shall be entitled to recover upon the security or indemnity provided therefor to the
extent of any loss, damage, cost or expense incurred by the Trustee or the Authority in connection therewith. Any Bond issued under the provisions of this Section in lieu of any Bond alleged to be lost, destroyed or stolen shall constitute an
original additional contractual obligation on the part of the Authority whether or not the Bond so alleged to be lost, destroyed or stolen be at any time enforceable by anyone, and shall be entitled to the benefits of this Indenture with all other
Bonds secured by this Indenture. 
 SECTION 2.10. Book-Entry Only System. (A) Except as
otherwise provided in subsections (B) and (C) of this Section 2.10, the Bonds initially authenticated and delivered hereunder shall be registered in the name of Cede & Co., as nominee of DTC, or such other nominee as DTC
shall request. Payments of interest on, principal of and any premium on the Bonds shall be made to the account of Cede & Co. on each payment date for principal or interest on the Bonds at the address indicated for Cede & Co. in the
registration books maintained by the Bond Registrar by transfer of immediately available funds. DTC has represented to the Authority that it will maintain a book-entry system in recording ownership interests of the Direct Participants and the
ownership interests of Beneficial Owners will be recorded through book entries on the records of the Direct Participants. 

(B) The Bonds shall be initially issued in the form of a separate single authenticated fully registered Bond in the
amount of each separate stated maturity. With respect to Bonds so registered in the name of Cede & Co., the Authority and the Trustee shall have no responsibility or obligation to any Direct Participant or to any Beneficial Owner of such
Bonds. Without limiting the immediately preceding sentence, the Authority and the Trustee shall have no responsibility or obligation with respect to (i) the accuracy of the records of DTC, Cede & Co. or any Direct Participant with
respect to any beneficial ownership interest in the Bonds, (ii) the delivery to any Direct Participant, Beneficial Owner or other Person, other than DTC, of any notice with respect to the Bonds, including any notice of redemption,
(iii) the payment to any Direct Participant, Beneficial Owner or other Person, other than DTC, of any amount with respect to the principal, redemption price of, or interest on, the Bonds or (iv) any consent given or other action taken by
DTC as Holder of the Bonds. The Authority and the Trustee treat DTC as, and deem DTC to be, the absolute Holder of each Bond for all purposes whatsoever including (but not limited to) (i) payment of the principal, redemption price of, and
interest on, each such Bond, (ii) giving notices of conversion or redemption and other matters with respect to such Bonds and (iii) registering transfers with respect to such Bonds. The Trustee shall pay the principal, redemption price
(including premium, if any) of, and interest on, all Bonds only to or upon the order of DTC, and all such payments shall be valid and effective to fully satisfy and discharge the Authority’s obligations with respect to such principal,
redemption price, and interest, to the extent of the sum or sums so paid. No Person other than DTC shall receive a Bond evidencing the obligation of the Authority to make payments of principal, redemption price of, and interest on, the Bonds
pursuant to this 
  

 23 

 
Indenture. Upon delivery by DTC to the Trustee of written notice to the effect that DTC has determined to substitute a new nominee in place of Cede & Co., and subject to the transfer
provisions hereof, the word “Cede & Co.” in this Indenture shall refer to such new nominee of DTC. 

(C)(1) DTC may determine to discontinue providing its services with respect to the Bonds at any time by
giving reasonable written notice to the Authority and the Trustee and discharging its responsibilities with respect thereto under applicable law. 

(2) The Authority, in its sole discretion and without the consent of any other Person, may terminate, upon
provision of notice to the Trustee and the Borrower, the services of DTC with respect to the Bonds if the Authority determines that the continuation of the system of book-entry only transfers through DTC (or a successor securities depository) is not
in the best interests of the Beneficial Owners of the Bonds or is burdensome to the Authority. 

(3) The Authority shall terminate the services of DTC with respect to the Bonds upon receipt by the
Authority, the Trustee and the Borrower of written notice from DTC to the effect that DTC has received written notice from Direct Participants having interests, as shown in the records of DTC, in an aggregate principal amount of not less than 50% of
the aggregate principal amount of the then Outstanding Bonds to the effect, that: (i) DTC is unable to discharge its responsibilities with respect to such Bonds, or (ii) a continuation of the requirement that all of the Outstanding Bonds
be registered in the registration books kept by the Trustee in the name of Cede & Co., as nominee of DTC, is not in the best interest of the Beneficial Owners of such Bonds. 

(D) Upon the termination of the services of DTC with respect to the Bonds pursuant to subsection (C)(3)(ii) hereof, or
upon the discontinuance or termination of the services of DTC with respect to the Bonds pursuant to subsection (C)(1), (C)(2) or subsection (C)(3)(i) hereof after which no substitute Securities Depository willing to undertake the functions of DTC
hereunder can be found or which, in the opinion of the Authority, is willing and able to undertake such functions upon reasonable and customary terms, the Bonds shall no longer be restricted to being registered in the registration books kept by the
Trustee in the name of Cede & Co. as nominee of DTC. In such event, the Authority shall issue and the Trustee shall transfer and exchange Bond certificates as requested by DTC or Direct Participants of like principal amount and maturity, in
Authorized Denominations to the identifiable Beneficial Owners in replacement of such Beneficial Owners’ beneficial interests in the Bonds. 

(E) Notwithstanding any other provision of this Indenture to the contrary, so long as any Bond is registered in the name
of Cede & Co., as nominee of DTC, all payments with respect to the principal, redemption price of, and interest on, such Bond and all notices with respect to such Bond shall be made and given, respectively, to DTC as provided in the letter
of representations of the Authority addressed to DTC with respect to the Bonds (the “DTC Letter of Representations”). 

(F) In connection with any notice or other communication to be provided to Bondholders pursuant to this Indenture by the
Authority or the Trustee with respect to any consent or other action to be taken by Bondholders, the Authority or the Trustee, as the case may be, shall establish a record date for such consent or other action and give DTC notice of such record date
not less than 15 calendar days in advance of such record date to the extent possible. 
  

 24 

 (G) Notwithstanding any provision herein to the contrary, the Authority and
the Trustee may agree to allow DTC, or its nominee, Cede & Co., to make a notation on any Bond redeemed in part to reflect, for informational purposes only, the principal amount and date of any such redemption. 

ARTICLE III 

ISSUANCE OF BONDS; APPLICATION OF PROCEEDS 

SECTION 3.01. Issuance of the Bonds. At any time after the execution and delivery of this Indenture or from
time to time thereafter, upon the execution of the Bonds by the Authority and delivery thereof to the Trustee, as hereinabove provided, and without any further action on the part of the Authority, the Trustee shall authenticate upon Request of the
Authority, and deliver the Bonds in an aggregate principal amount not exceeding $50,000,000. 

SECTION 3.02. Application of Proceeds of Bonds and Other Moneys. The proceeds received by the Authority from
the sale of the Bonds shall be deposited with the Trustee, who shall forthwith: 
 (i) deposit $1,000,000.00 of
such proceeds into the Proceeds Account of the Costs of Issuance Fund, which fund and account the Trustee shall establish and maintain as further provided in Section 3.04 hereof; and 

(ii) deposit the balance of such proceeds ($49,000,000.00) into the Project Fund, which fund the Trustee shall establish
and maintain as further provided in Section 3.03 hereof. 
 The Trustee shall also deposit $0 received from the Borrower in
the Borrower Account of the Costs of Issuance Fund. 
 SECTION 3.03. Project Fund. The Trustee shall
establish the San Jose Water Company Project Fund (the “Project Fund”) for which proceeds of the Bonds will be applied to the payment of the Costs of the Project. The moneys in the Project Fund shall be held by the Trustee in trust and
applied to the payment of the Costs of the Project, in the manner set forth below. 
 Before each payment is
made from the Project Fund (including any account established therein) by the Trustee, there shall be filed with the Trustee a sequentially numbered Requisition of the Borrower conforming with the requirements of this Section and Section 3.2 of
the Agreement, and in the form attached hereto as Exhibit C, stating with respect to each payment to be made: 

(1) the requisition number; 

(2) the name and address of the Person to whom payment is due; 

(3) the purpose for which such payment is to be made; 

 

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 (4) the amount to be paid; 

(5) that each obligation mentioned therein has been properly incurred and is a proper charge against the
Project Fund; 
 (6) that none of the items for which payment is requested has been previously
reimbursed from the Project Fund; 
 (7) that each item for which payment is requested is or was
necessary in connection with the acquisition, construction, renovation, installation, improvement, equipping or financing of the Project; 

(8) that at least 96% of the amount requisitioned, together with all amounts requisitioned to date, have
in the aggregate been used to pay for or to reimburse the Borrower for expenditures properly allocable to Costs of the Project pursuant to the Tax Certificate (excluding Costs of Issuance); and 

(9) that an invoice evidencing each item for payment is attached thereto, including invoices for costs
previously paid and for which reimbursement is being requested. 
 Each such Requisition of the Borrower shall
be sufficient evidence of the facts stated therein and the Trustee shall have no duty to confirm the accuracy of such facts. Upon receipt of each such Requisition of the Borrower, signed by an Authorized Representative of the Borrower and
accompanied by an invoice for each item for payment, the Trustee shall thereupon disburse moneys in the Project Fund to pay the amount set forth therein as directed by the terms thereof. The Authority may at any time request copies of accounting
records from the Trustee reflecting investment and disbursement of funds in the accounts under its control. 

Prior to the Completion Date, if Borrower delivers a Request to the Trustee (i) describing a component of the
Project that is no longer necessary for inclusion within the Project and the reasons therefore (which Request has been consented to, or deemed consented to by the Authority in accordance with Section 3.2(d) of the Agreement), and
(ii) requesting the Trustee to apply a proportionate amount of moneys in the Project Fund which correspond to such portion of the Project to redeem Bonds in Authorized Denominations, to the maximum degree permissible, and at the earliest
possible dates at which the Bonds can be redeemed pursuant to Section 4.01 of this Indenture; then the Trustee shall transfer such amount from the Project Fund into a separate account within the Revenue Fund, which the Trustee shall establish
and hold in trust, and which shall be entitled the “Surplus Account.” The moneys in the Surplus Account shall be used and applied (subject to Section 5.03) in accordance with such Request (unless some other application of such moneys
permitted by the Indenture and the Loan Agreement is requested by the Borrower and would not, in the opinion of Bond Counsel, cause interest on the Bonds to become no longer Tax-exempt). 

Upon the receipt by the Trustee of a certificate conforming with the requirements of Section 3.3 of the Agreement,
and after payment of costs payable from the Project Fund or provision having been made for payment of such costs not yet due by retaining such costs in the Project Fund or otherwise as directed in such certificate, the Trustee shall transfer any

  

 26 

 
remaining balance in the Project Fund into either any previously established Surplus Account or into a separate account within the Revenue Fund, which the Trustee shall establish and hold in
trust, and which shall be entitled the “Surplus Account.” The moneys in the Surplus Account shall be used and applied (subject to Section 5.03) at the written direction of the Borrower (unless some other application of such moneys
permitted by the Indenture and the Loan Agreement is requested by the Borrower and would not, in the opinion of Bond Counsel, cause interest on the Bonds to become no longer Tax-exempt) to redeem Bonds in Authorized Denominations, to the maximum
degree permissible, and at the earliest possible dates at which the Bonds can be redeemed pursuant to Section 4.01 of this Indenture. 

Notwithstanding Section 5.05 hereof, the moneys in the Surplus Account shall be invested at the written instruction
of the Borrower at a yield no higher than the yield on the Outstanding Bonds (unless in the opinion of Bond Counsel, addressed and delivered to the Authority and the Trustee, investment at a higher yield would not cause interest on the Bonds to
become no longer Tax-exempt), and all such investment income shall be deposited in the Surplus Account and expended or reinvested as provided above. 

In the event of redemption of all of the Bonds pursuant to Section 4.01 hereof or an Event of Default which causes
acceleration of the Bonds, any moneys then remaining in the Project Fund shall be transferred to the Surplus Account within the Revenue Fund, and all moneys in the Revenue Fund shall be used to redeem Bonds or pay Bonds upon such acceleration.

 SECTION 3.04. Costs of Issuance Fund. The Trustee shall establish the Costs of Issuance Fund (the
“Costs of Issuance Fund”). The Trustee shall also create separate accounts in the Costs of Issuance Fund designated the “Proceeds Account” and the “Borrower Account”. The moneys in each account of the Costs of Issuance
Fund shall be held by the Trustee in trust and applied to the payment of Costs of Issuance for the Bonds, upon a sequentially numbered Requisition of the Borrower filed with the Trustee, in the form attached hereto as Exhibit D, together with
invoices as required by Section 3.2(c) of the Agreement, signed by an Authorized Representative of the Borrower. All payments from the Costs of Issuance Fund shall be reflected in the Trustee’s regular accounting statements. Any amounts
remaining in the Proceeds Account of the Costs of Issuance Fund six months following the Date of Delivery of the Bonds shall be transferred to the Project Fund and any amounts remaining in the Borrower Account of the Costs of Issuance Fund six
months following the Date of Delivery of the Bonds shall be transferred to the Borrower. Upon such transfers, the Trustee shall close the Costs of Issuance Fund. 

SECTION 3.05. Validity of Bonds. The validity of the authorization and issuance of the Bonds is not dependent on
and shall not be affected in any way by any proceedings taken by the Authority or the Trustee with respect to or in connection with the Agreement. The recital contained in the Bonds that the same are issued pursuant to the Act and the Constitution
and laws of the State shall be conclusive evidence of their validity and of compliance with the provisions of law in their issuance. 
  

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 ARTICLE IV 

REDEMPTION OF BONDS 

SECTION 4.01. Terms of Redemption of Bonds. The Bonds are subject to redemption if and to the extent the
Borrower is entitled to make and makes, or is required to make, a prepayment pursuant to Articles IV or VIII of the Agreement. All such prepayments shall be deposited in the Redemption Account. The Bonds shall not be called for optional redemption,
and the Trustee shall not give notice of any such redemption, unless the Borrower has so directed in writing to the Trustee with a copy to the Authority, as provided in the Loan Agreement. 

(1) Sinking Fund Redemption. The Bonds shall not be subject to mandatory sinking fund redemptions.

 (2) Mandatory Redemption Upon Invalidity. In the event of a prepayment pursuant to
Section 7.3(a) of the Agreement as a result of invalidity, Bonds Outstanding on the date of the occurrence of the invalidity shall be redeemed in whole at any time within 30 days thereafter, at a redemption price of 100% of the principal amount
thereof, without premium, plus accrued interest to the date of redemption. No redemption of Bonds shall be made pursuant to any of the other provisions of this Section 4.01 following invalidity. 

(3) Mandatory Redemption of Bonds Upon a Determination of Taxability. In the event of a prepayment
pursuant to Section 7.3(b) of the Agreement as a result of a Determination of Taxability, Bonds Outstanding on the date of the occurrence of the Determination of Taxability shall be redeemed, in whole or in part, at any time within 30 days
thereafter, at a redemption price of 100% of the principal amount thereof, without premium, plus accrued interest to the date of redemption. No redemption of Bonds shall be made pursuant to any of the other provisions of this Section 4.01
following a Determination of Taxability. 
 (4) Optional Redemption. The Bonds shall also
be subject to redemption, in whole or in part, on any date on or after June 1, 2020 at a redemption price equal to 100% of the principal amount thereof, without premium, plus accrued interest to the date of redemption, if any. 

SECTION 4.02. Selection of Bonds for Redemption. Whenever provision is made in this Indenture for the
redemption of less than all of the Bonds, the Trustee shall select the Bonds to be redeemed from all Bonds or such given portion thereof not previously called for redemption by lot in any manner which the Trustee in its sole discretion shall deem
appropriate. 
 SECTION 4.03. Notice of Redemption. Notice of redemption shall be mailed by first
class mail not less than 30 days or more than 60 days before such redemption date, to the respective Holders of any Bonds designated for redemption at their addresses on the registration books maintained by the Bond Registrar. Each notice of
redemption shall state the redemption date, the place or places of redemption, if less than all of the Bonds are to be redeemed, the distinctive number(s) of the Bonds to be redeemed, and in the case of Bonds to be redeemed in part only, the
respective portions of the principal amount thereof to be redeemed. Each such notice shall also state that on said date there will become due and payable on each of said Bonds the 

 

 28 

 
principal thereof or of said specified portion of the principal thereof in the case of a Bond to be redeemed in part only, and that from and after such redemption date interest thereon shall
cease to accrue, and shall require that such Bonds be then surrendered, and, with regard to optional redemption pursuant to Section 4.01(4), in the event that funds required to pay the redemption price are not on deposit under the Indenture at
the time the notice of redemption is sent, a statement to the effect that the redemption is conditioned upon the receipt of the appropriate funds required to pay the redemption price by the Trustee on or prior to the redemption date. Neither failure
to receive such notice nor any defect therein shall affect the sufficiency of such redemption. With respect to any notice of optional redemption of Bonds, such notice may be conditional upon the fulfillment of any conditions set out within such
notice. In the event that such notice of redemption contains conditions which are not met, the redemption shall not be made, and the Trustee shall give notice, no less than two Business Days before the redemption was to be made, in the manner in
which the notice of redemption was given, that the redemption will not be made. 
 (B) Notice of redemption of
such Bonds shall be given by the Trustee, at the expense of the Borrower, for and on behalf of the Authority. 

(C) At the same time that it sends notice of redemption to Owners of such Bonds, the Trustee shall also send a copy of
the notice by first class mail, by telecopy or by overnight delivery to the Authority, the Securities Depositories and an Information Service. Failure to provide notice to the Authority, the Securities Depositories or an Information Service shall
not affect the validity of proceedings for the redemption of such Bonds. 
 SECTION 4.04. Partial
Redemption of Bonds. Upon surrender of any Bond redeemed in part only, the Authority shall execute and the Trustee shall authenticate and deliver to the Owner thereof, at the expense of the Borrower, a new Bond or Bonds of Authorized
Denominations and of like maturity equal in aggregate principal amount to the unredeemed portion of the Bond surrendered. 

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

All Bonds redeemed pursuant to the provisions of this Article shall be canceled and disposed of in a manner that is
deemed appropriate by the Trustee in accordance with its retention policy then in effect. 
  

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 ARTICLE V 

REVENUES; FUNDS AND ACCOUNTS; 

PAYMENT OF PRINCIPAL AND INTEREST 

SECTION 5.01. Pledge and Assignment; Revenue Fund. (A) Subject only to the provisions of this Indenture
permitting the application thereof for the purposes and on the terms and conditions set forth herein, all of the Revenues and any other amounts (including proceeds of the sale of Bonds) held in any fund or account established pursuant to this
Indenture (except the Rebate Fund and the Borrower Account of the Costs of Issuance Fund) are hereby pledged to secure the full payment of the principal of, premium, if any, and interest on the Bonds in accordance with their terms and the provisions
of this Indenture. Said pledge shall constitute a lien on and security interest in such assets and shall attach, be perfected and be valid and binding from and after delivery by the Trustee of the Bonds, without any physical delivery thereof or
further act. 
 (B) The Authority hereby transfers in trust, and assigns to the Trustee, for the benefit of the
Holders from time to time of the Bonds, all of the Revenues and other assets pledged in subsection (A) of this Section and all of the right, title and interest of the Authority in the Loan Agreement (except for the Retained Rights). Such
assignment to the Trustee is solely in its capacity as Trustee under this Indenture, subject to the protections, immunities and limitations from liability afforded the Trustee hereunder. The Trustee shall be entitled to and shall collect and receive
all of the Revenues, and any Revenues collected or received by the Authority shall be deemed to be held, and to have been collected or received, by the Authority as the agent of the Trustee and, subject to the provisions of this Indenture, shall
forthwith be paid by the Authority to the Trustee. Notwithstanding anything to the contrary in this Indenture, the Authority shall have no obligation to and instead the Trustee may, without further direction from the Authority, take any and all
steps, actions and proceedings, to enforce any or all rights of the Authority (other than the Retained Rights) under this Indenture or the Loan Agreement, including, without limitation, the rights to enforce the remedies upon the occurrence and
continuation of an Event of Default and the obligations of the Borrower under the Loan Agreement. 
 (C) All
Revenues (except investment earnings (which shall be deposited as provided in Section 5.04)) shall be promptly deposited by the Trustee upon receipt thereof in a special fund designated as the Revenue Fund which the Trustee shall establish,
maintain and hold in trust; except as otherwise provided in Section 5.02 hereof, all moneys received by the Trustee and required to be deposited in the Redemption Account, if any, shall be promptly deposited in the Redemption Account, which the
Trustee shall establish, maintain and hold in trust as provided in Section 5.02 hereof. All Revenues deposited with the Trustee shall be held, disbursed, allocated and applied by the Trustee only as provided in this Indenture. 

(D) On the third Business Day of each June, any amount held by the Trustee in the Revenue Fund on the due date for a Loan
Repayment under the Loan Agreement shall be credited against the installment due on the next Loan Repayment date to the extent available for such purpose under the terms of this Indenture. 

SECTION 5.02. Allocation of Revenues. On or before any date on which interest or principal (whether at
maturity, or by redemption or acceleration) is due, the Trustee shall transfer funds from the Revenue Fund and deposit into the following respective accounts (each of which the Trustee is hereby directed and agrees to establish and maintain within
the Revenue Fund), 
  

 30 

 
the following amounts, in the following order of priority, the requirements of each such account (including the making up of any deficiencies in any such account resulting from lack of Revenues
sufficient to make any earlier required deposit) at the time of deposit to be satisfied before any transfer is made to any account subsequent in priority; 

First: to the Interest Account, the aggregate amount of interest becoming due and payable on the next succeeding
Interest Payment Date or date of redemption of all Bonds then Outstanding, until the balance in said account is equal to said aggregate amount of interest. 

Second: to the Redemption Account, the aggregate amount of principal and premium next coming due by acceleration
or by redemption permitted or required under Article IV hereof, or any portion thereof paid by the Borrower. 

Third: to the Principal Account, the amount paid by the Borrower and designated as or attributable to principal
on the Bonds in the most recent Loan Repayment equal to the aggregate amount of principal due on the Principal Payment Date pursuant to Section 2.02 hereof. 

SECTION 5.03. Priority of Moneys in Revenue Fund. Funds for the payment of the principal or redemption price
(including premium, if any) of and interest on the Bonds shall be derived from the following sources in the order of priority indicated below from each of the accounts in the Revenue Fund; provided however, that amounts in the respective accounts in
the Revenue Fund shall be used to pay when due (whether upon redemption, acceleration, interest payment date, maturity or otherwise) the principal or redemption price (including premium, if any) of and interest on the Bonds held by Holders other
than the Borrower prior to the payment of the principal and interest on the Bonds held by the Borrower: 

(i) moneys paid into the Interest Account, if any, representing accrued interest received at the initial
sale of the Bonds and proceeds from the investment thereof which shall be applied to the payment of interest on such Bonds; and 

(ii) moneys paid into the Revenue Fund and deposited in the Revenue Fund and proceeds from the investment
thereof. 
 SECTION 5.04. Investment of Moneys. All moneys in any of the funds or accounts
established pursuant to this Indenture shall be invested by the Trustee, as directed in writing by the Borrower or its agent, solely in Investment Securities. Notwithstanding any other provision herein, in the absence of written investment
instructions directing the Trustee by noon of the second Business Day preceding the day when investments are to be made, the Trustee is directed to invest available funds in Investment Securities described in paragraph iv of the definition thereof.
The Trustee shall not be liable for any losses resulting from any investments made pursuant to the preceding two sentences. 

Investment Securities may be purchased at such prices as the Trustee may in its discretion determine or as may be
directed by the Borrower or its agent. All Investment Securities shall be acquired subject to the limitations set forth in Section 6.05 hereof, the limitations as to maturities hereinafter in this Section set forth and such additional
limitations or requirements consistent with the foregoing as may be established by Request of the Borrower. 
  

 31 

 Moneys in all funds and accounts shall be invested in Investment Securities
maturing not later than the date on which such moneys will be required for the purposes specified in this Indenture. Notwithstanding anything else in this Section 5.04, any moneys in the Interest Account, the Principal Account or the Redemption
Account held for the payment of particular Bonds shall be invested at the written direction of the Borrower in direct obligations of the United States or bonds or other obligations guaranteed by the United States government or for which the full
faith and credit of the United States is pledged for the full and timely payment of principal and interest thereof (or money market funds or mutual funds consisting solely of such investments which are rated Moody’s “Aaa” or
equivalent), rated in the highest rating category applicable to such investments which mature not later than the date on which it is estimated that such moneys will be required to pay such Bonds. 

All interest, profits and other income received or losses incurred from the investment of moneys in any fund established
pursuant to this Indenture shall be deposited or booked in the fund or account which gave rise to the investment earnings or losses. Notwithstanding anything to the contrary contained in this paragraph, an amount of interest received with respect to
any Investment Security equal to the amount of accrued interest, if any, paid as part of the purchase price of such Investment Security shall be credited to the fund from which such accrued interest was paid. To the extent that any Investment
Securities are registrable, such Securities shall be registered in the name of the Trustee or its nominee. 

For the purpose of determining the amount in any fund, all Investment Securities credited to such fund shall be valued
at the lesser of cost or par value plus, prior to the first payment of interest following purchase, the amount of accrued interest, if any, paid as a part of the purchase price. 

Subject to Section 6.06 hereof, investments in any and all funds and accounts held by the Trustee hereunder (other
than moneys held in the Borrower Account of the Costs of Issuance Fund or moneys held for the payment of particular Bonds (including moneys held for non-presented Bonds or held under Section 10.03 hereof)) may be commingled for purposes of
making, holding and disposing of investments, notwithstanding provisions herein for transfer to or holding in particular funds and accounts, the amounts received or held by the Trustee hereunder, provided that the Trustee shall at all times account
for such investments strictly in accordance with the funds and accounts to which they are credited and otherwise as provided in this Indenture. Subject to Section 6.05 hereof, any moneys invested in accordance with this Section may be invested
in a pooled investment account consisting solely of funds held by the Trustee as a fiduciary. The Authority (and the Borrower by its execution of the Loan Agreement) acknowledges that to the extent regulations of the Comptroller of the Currency or
other applicable regulatory entity grant the Authority or the Borrower the right to receive brokerage confirmations of security transactions as they occur, the Authority and the Borrower specifically waive receipt of such confirmations to the extent
permitted by law. The Trustee will furnish the Authority and the Borrower periodic cash transaction statements which include detail for all investment transactions made by the Trustee hereunder. The Trustee may act as principal or agent in the
making or disposing of any investment. The Trustee may sell or present for redemption any Investment Securities whenever it shall be necessary to provide moneys to meet any required payment, transfer, withdrawal or disbursement from the fund to
which such Investment Security is credited, and the Trustee shall not be liable or responsible for any loss resulting from such investment. 
  

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 SECTION 5.05. Rebate Fund. (a) The Trustee shall establish
and maintain a fund separate from any other fund established and maintained hereunder designated as the “Rebate Fund” (the “Rebate Fund”). Within the Rebate Fund, the Trustee shall maintain such other accounts as it is instructed
by the Borrower as shall be necessary in order to comply with the terms and requirements of the Tax Certificate. Subject to the transfer provisions provided in paragraph (e) below, all money at any time deposited in the Rebate Fund shall be
held by the Trustee in trust, to the extent required to satisfy the Rebate Requirement (as defined in the Tax Certificate), for payment to the federal government of the United States of America, and no other Person shall have any rights in or claim
to such money. All amounts deposited into or on deposit in the Rebate Fund shall be governed by this Section 5.05, by Section 6.06 hereof and by the Tax Certificate (which is incorporated herein by reference). The Trustee shall be deemed
conclusively to have complied with such provisions if it follows the directions of the Borrower including supplying all necessary information in the manner provided in the Tax Certificate, shall not be required to take any actions thereunder, in the
absence of written directions by the Borrower, and shall have no liability or responsibility to enforce compliance by the Borrower or the Authority with the terms of the Tax Certificate. 

(b) Upon the Borrower’s written direction, an amount shall be deposited to the Rebate Fund by the Trustee from
deposits by the Borrower, or from available investment earnings on amounts (other than moneys held in the Borrower Account of the Costs of Issuance Fund or moneys held for the payment of particular Bonds (including moneys held for non-presented
Bonds or held under Section 10.03 hereof)) held in the Revenue Fund, if and to the extent required, so that the balance of the amount on deposit thereto shall be equal to the Rebate Requirement. Computations of the Rebate Requirement shall be
furnished by or on behalf of the Borrower in accordance with the Tax Certificate. The Trustee may rely conclusively upon the Borrower’s determinations, calculations and certifications required by this Section 5.05(b). The Trustee shall
have no responsibility to make any independent calculations or determinations or to review the Borrower’s calculations hereunder. 

(c) The Trustee shall have no obligation to rebate any amounts required to be rebated pursuant to this Section 5.05
other than from moneys held in the funds and accounts created under this Indenture (other than moneys held in the Borrower Account of the Costs of Issuance Fund or moneys held for the payment of particular Bonds (including moneys held for
non-presented Bonds or held under Section 10.03)) or from other moneys provided to it by or on behalf of the Borrower. 

(d) The Trustee shall invest all amounts held in the Rebate Fund in Investment Securities as instructed in writing by
the Borrower, and the Borrower shall be responsible for such Rebate Instructions complying with the Tax Certificate. Money shall not be transferred from the Rebate Fund except as provided in paragraph (e) below. 

(e) Upon receipt of the Borrower’s written directions, the Trustee shall remit part or all of the balances in the
Rebate Fund to the United States, as so directed. In addition, if the Borrower so directs, the Trustee will deposit moneys into or transfer moneys out of the Rebate Fund from or into such accounts or funds (other than moneys held in the Borrower

  

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Account of the Costs of Issuance Fund or moneys held for the payment of particular Bonds (including moneys held for non-presented Bonds or held under Section 10.03 hereof)) as directed by
the Borrower’s written directions. Any funds remaining in the Rebate Fund after redemption and payment of all of the Bonds and payment and satisfaction of any Rebate Requirement, or provision made therefor shall be withdrawn and remitted to the
Borrower upon the Borrower’s written request. The Trustee shall be deemed conclusively to have complied with the rebate requirements if it follows the written directions of the Borrower, and shall, absent its negligence or willful misconduct,
have no independent responsibility to, or liability resulting from its failure to, enforce compliance by the Borrower with these rebate requirements 

(f) Notwithstanding any other provision of this Indenture, including in particular Article X hereof, the obligation to
remit the Rebate Requirements to the United States and to comply with all other requirements of this Section 5.05 hereof, Section 6.06 hereof and the Tax Certificate shall survive the defeasance or payment in full of such Bonds.

 ARTICLE VI 

PARTICULAR COVENANTS 

SECTION 6.01. Punctual Payment. The Authority shall punctually pay or cause to be paid the principal,
premium, if any, and interest to become due in respect of all the Bonds, in strict conformity with the terms of the Bonds and of this Indenture, according to the true intent and meaning thereof, but only out of Revenues and other assets pledged for
such payment as provided in this Indenture. When and as paid in full, all Bonds shall be delivered to the Trustee, shall forthwith be canceled and destroyed, and a certificate of such destruction shall thereafter be delivered to the Authority.

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

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

SECTION 6.04. Power to Issue Bonds and Make Pledge and Assignment. The Authority is duly authorized pursuant
to law to issue the Bonds and to enter into this Indenture and to pledge and assign the Revenues and other assets purported to be pledged and assigned, 

 

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respectively, under this Indenture in the manner and to the extent provided in this Indenture. The Bonds and the provisions of this Indenture are and will be the legal, valid and binding limited
obligations of the Authority in accordance with their terms, and the Authority and Trustee shall at all times, to the extent permitted by law, defend, preserve and protect said pledge and assignment of Revenues and other assets and all the rights of
the Bondholders under this Indenture against all claims and demands of all Persons whomsoever, subject to the limitations set forth in Article VIII relating to the Trustee. 

SECTION 6.05. 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 receipt, investment, disbursement, allocation and application of the Revenues and the proceeds of the Bonds. Such records shall
specify the account or fund to which each investment (or portion thereof) held by the Trustee is to be allocated and shall set forth, in the case of each Investment Security, (a) its purchase price, (b) identifying information, including
par amount, coupon rate, and payment dates, (c) the amount received at maturity or its sale price, as the case may be, (d) the amounts and dates of any payments made with respect thereto, and (e) such documentation as is required to
be retained by the Trustee as evidence to establish that any requirements set forth in the Tax Certificate or with respect to establishing market price, to the extent provided to it. Such records shall be open to inspection by the Authority and any
Holder at any reasonable time during regular business hours on reasonable notice. 
 SECTION 6.06.
Arbitrage Covenants. (a) The Authority and the Borrower covenant and agree that neither will take any action, or fail to take any action, if such action or failure to take such action would adversely affect the exclusion from gross
income of the interest payable on the Bonds under Section 103 of the Code. Without limiting the generality of the foregoing, the Authority and the Borrower each covenants and agrees that it will each comply with the requirements of the Tax
Certificate. 
 (b) The Trustee agrees to comply with all written Rebate Instructions of the Borrower given
pursuant to the Tax Certificate; provided, however, that the Borrower shall be responsible for such Rebate Instructions complying with the Tax Certificate. 

The Trustee conclusively shall be deemed to have complied with the provisions of this Section 6.06(b) if it follows
the Rebate Instructions and directions of the Borrower and shall not be required to take any action under this Section 6.06(b) in the absence of such directions from the Borrower. The Trustee shall not be liable for any consequences resulting
from its failure to act if no Rebate Instructions from the Borrower (or in the absence of Borrower Rebate Instructions, instructions from the Authority) are delivered to it. 

(c) Notwithstanding any provision of this Section, if the Borrower shall provide to the Trustee and the Authority an
opinion of Bond Counsel that any action required under Section 5.05 or this Section 6.06 is no longer required, or that some further action is required to maintain the Tax-exempt status of interest on the Bonds, the Trustee and the
Authority may rely conclusively on such opinion in complying with the requirements of this Section, and the covenants contained herein shall be deemed to be modified to that extent. 

 

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 SECTION 6.07. Other Covenants. (a) The Trustee shall
promptly collect all amounts due from the Borrower pursuant to the Agreement, shall perform all duties imposed upon it pursuant to the Agreement and shall diligently enforce, and take all steps, actions and proceedings reasonably necessary for the
enforcement of all of the rights of the Authority (except the Retained Rights) and all of the obligations of the Borrower pursuant to the Agreement. 

(b) The Authority shall not amend, modify or terminate any of the terms of the Agreement, or consent to any such
amendment, modification or termination, without the prior written consent of the Trustee. The Trustee shall give such written consent only if (1) in the Opinion of Counsel, such amendment, modification or termination will not materially
adversely affect the interests of the Bondholders or result in any material impairment of the security hereby given for the payment of the Bonds, or (2) the Trustee first obtains the written consent of either the Holders of all or a majority,
as applicable, in principal amount of the Bonds then Outstanding to such amendment, modification or termination, pursuant to Section 9.01(A) hereof. The Trustee and the Authority shall be entitled to rely upon an Opinion of Counsel with respect
to the effect of any amendments hereto or to the Agreement. The Trustee may in its discretion but shall not be obligated to give its written consent if such amendment, modification or termination affects the Trustee’s own rights, duties or
immunities. 
 SECTION 6.08. Waiver of Laws. The Authority shall not at any time insist upon or
plead in any manner whatsoever, or claim or take the benefit or advantage of, any stay or extension law now or at any time hereafter in force that may affect the covenants and agreements contained in this Indenture or in the Bonds, and all benefit
or advantage of any such law or laws is hereby expressly waived by the Authority to the extent permitted by law. 

SECTION 6.09. Further Assurances. The Authority will make, execute and deliver any and all such further
indentures, instruments and assurances as may be reasonably necessary or proper to carry out the intention or to facilitate the performance of this Indenture and for the better assuring and confirming unto the Holders of the Bonds of the rights and
benefits provided in this Indenture. 
 SECTION 6.10. Continuing Disclosure. Pursuant to
Section 5.11 of the Loan Agreement, the Borrower has undertaken all responsibility for compliance with the continuing disclosure requirements promulgated under S.E.C. Rule 15c2-12, as it may from time to time hereafter be amended or
supplemented, and the Authority shall have no liability to the Holders of the Bonds or any other Person with respect to such disclosure matters. Notwithstanding any other provision of this Indenture, failure of the Borrower to comply with the
requirements of S.E.C. Rule 15c2-12, as it may from time to time hereafter be amended or supplemented, shall not be considered an Event of Default; however, the Trustee at the written request of the Holders of at least 25% aggregate principal amount
of Outstanding Bonds, shall, but only to the extent indemnified to its satisfaction from and against any cost, liability or expense of any kind whatsoever related thereto, including, without limitation, reasonable fees and expenses of its attorneys
and advisors and additional fees and expenses of the Trustee, or at the written request of any Bondholder or beneficial owner of any Bonds may take such actions as may be necessary and appropriate, including seeking mandate or specific performance
by court order, to cause the Borrower to comply with its obligations under Section 5.11 of the Loan Agreement. 
  

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 ARTICLE VII 

EVENTS OF DEFAULT AND REMEDIES OF BONDHOLDERS 

SECTION 7.01. Events of Default; Acceleration; Waiver of Default. Each of the following events which has
occurred and is continuing shall constitute an “Event of Default” hereunder: 
 (a)
default in the due and punctual payment of the principal of, or premium (if any) on, any Bond when and as the same shall become due and payable, whether at maturity as therein expressed, by proceedings for redemption, by declaration or otherwise;

 (b) default in the due and punctual payment of any installment of interest on any Bond, when
and as the same shall become due and payable; 
 (c) failure by the Authority to perform or
observe any other of the covenants, agreements or conditions on its part in this Indenture or in the Bonds contained, and the continuation of such failure for a period of 60 days after written notice thereof, specifying such default and requiring
the same to be remedied, shall have been given to the Authority and the Borrower by the Trustee, or to the Authority, the Borrower and the Trustee by the Holders of not less than a majority in aggregate principal amount of the Bonds at the time
Outstanding; or 
 (d) the occurrence and continuance of a Loan Default Event described in
Section 6.1 of the Agreement. 
 No default specified in (c) above shall constitute an Event of
Default unless the Authority and the Borrower shall have failed to correct such default within the applicable period; provided, however, that if the default shall be such that it cannot be corrected within such period, it shall not constitute
an Event of Default if corrective action is instituted by the Authority or the Borrower within the applicable period and diligently pursued. With regard to any alleged default concerning which notice is given to the Borrower under the provisions of
this Section, the Borrower shall have full authority to perform any covenant or obligation the non-performance of which is alleged in said notice to constitute a default with full power to do any and all things and acts to the same extent that the
Authority could do and perform any such things and acts. 
 During the continuance of an Event of Default
described in (a), (b), (c) or (d) above, unless the principal of all the Bonds shall have already become due and payable, the Trustee may, and upon the written request of the Holders of not less than a majority in aggregate principal
amount of the Bonds at the time Outstanding, the Trustee shall, promptly upon such occurrence, by notice in writing to the Authority and the Borrower, declare the principal of all the Bonds then Outstanding, and the interest accrued thereon, to be
due and payable immediately, and upon any such declaration the same shall become and shall be immediately due and payable, anything in this Indenture or in the Bonds contained to the contrary notwithstanding. Interest on the Bonds shall cease to
accrue as of the date of declaration of acceleration. The Trustee shall promptly notify the Bondholders of the date of declaration of acceleration and the cessation of accrual of interest on the Bonds in the same manner as for a notice of
redemption. 
  

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 The preceding paragraph, however, is subject to the condition that if, at
any time after the principal of the Bonds shall have been so declared due and payable, and before any judgment or decree for the payment of the moneys due shall have been obtained or entered as hereinafter provided, there shall have been deposited
with the Trustee a sum sufficient to pay all the principal of the Bonds matured prior to such declaration and all matured installments of interest (if any) upon all the Bonds, with interest on such overdue installments of principal as provided in
the Agreement, and the reasonable fees and expenses of the Trustee, including reasonable fees and expenses of its attorneys, and any and all other defaults known to the Trustee (other than in the payment of principal of and interest on the Bonds due
and payable solely by reason of such declaration) shall have been made good or cured to the satisfaction of the Trustee or provision deemed by the Trustee to be adequate shall have been made therefor, then, and in every such case, the Holders of at
least a majority in aggregate principal amount of the Bonds then Outstanding, by written notice to the Authority and to the Trustee, may, on behalf of the Holders of all the Bonds, rescind and annul such declaration and its consequences and waive
such default; but no such rescission and annulment shall extend to or shall affect any subsequent default, or shall impair or exhaust any right or power consequent thereon. 

SECTION 7.02. Institution of Legal Proceedings by Trustee. Subject to Section 7.01 hereof, if one or
more of the Events of Default shall happen and be continuing, the Trustee in its discretion may, and upon the written request of the Holders of not less than a majority in principal amount of the Bonds then Outstanding and upon being indemnified to
its satisfaction therefor pursuant to Section 8.03(G) hereof shall, proceed to protect or enforce its rights or the rights of the Holders of Bonds under the Act or under this Indenture or the Agreement by a suit in equity or action at law,
either for the specific performance of any covenant or agreement contained herein or therein, or in aid of the execution of any power herein or therein granted, or by mandamus or other appropriate proceeding for the enforcement of any other legal or
equitable remedy as the Trustee shall deem most effectual in support of any of its rights or duties hereunder. 

SECTION 7.03. Application of Revenues and Other Funds After Default. If an Event of Default shall occur and
be continuing, all Revenues and any other funds then held or thereafter received by the Trustee under any of the provisions of this Indenture (subject to Sections 3.04 (relative to the Borrower Account of the Costs of Issuance Fund), 5.05, 6.06 and
11.11 hereof) shall be promptly applied by the Trustee as follows and in the following order: 

(1) To the payment of reasonable fees and expenses of the Trustee (including reasonable fees and
disbursements of its counsel) incurred in and about the performance of its powers and duties under this Indenture (provided, however, that no moneys in the Revenue Fund may be used to pay such expenses); 

(2) To the payment of the principal of and interest then due on the Bonds (upon presentation of the Bonds
to be paid, and stamping thereon of the payment if only partially paid, or surrender thereof if fully paid) subject to the provisions of this Indenture (including Section 6.02 hereof), as follows: 

(i) Unless the principal of all of the Bonds shall have become or have been declared due and payable,

  

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 First: To the payment to the Persons entitled
thereto of all installments of interest then due in the order of the maturity of such installments, and, if the amount available shall not be sufficient to pay in full any installment or installments maturing on the same date, then to the payment
thereof ratably, according to the amounts due thereon, to the Persons entitled thereto, without any discrimination or preference; and 

Second: To the payment to the Persons entitled thereto of the unpaid principal of any Bonds which
shall have become due, whether at maturity or by call for redemption, with interest on the overdue principal at the Default Rate borne by the respective Bonds, and, if the amount available shall not be sufficient to pay in full all the Bonds,
together with such interest, then to the payment thereof ratably, according to the amounts of principal due on such date to the Persons entitled thereto, without any discrimination or preference. 

(ii) If the principal of all of the Bonds shall have become or have been declared due and payable, to the
payment of the principal and interest then due and unpaid upon the Bonds, with interest on the overdue principal at the rate borne by the Bonds, and, if the amount available shall not be sufficient to pay in full the whole amount so due and unpaid,
then to the payment thereof ratably, without preference or priority of principal over interest, or of interest over principal, or of any installment of interest over any other installment of interest, or of any Bond over any other Bond, according to
the amounts due respectively for principal and interest, to the Persons entitled thereto without any discrimination or preference; 

provided, however, that in no event shall moneys set aside to pay principal or interest on any particular Bonds (including moneys held
for non-presented Bonds or held under Section 10.03 hereof) be used to pay any of the items listed in clause (1) of this Section until all amounts have been paid under clause (2) of this Section. 

SECTION 7.04. Trustee to Represent Bondholders. The Trustee is hereby irrevocably appointed (and the
successive respective Holders of the Bonds, by taking and holding the same, shall be conclusively deemed to have so appointed the Trustee) as trustee and true and lawful attorney-in-fact of the Holders of the Bonds for the purpose of exercising and
prosecuting on their behalf such rights and remedies as may be available to such Holders under the provisions of the Bonds, this Indenture, the Agreement, the Act and applicable provisions of any other law. Subject to Section 7.01 hereof, upon
the occurrence and continuance of an Event of Default or other occasion giving rise to a right in the Trustee to represent the Bondholders, the Trustee in its discretion may, and upon the written request of the Holders of not less than a majority in
aggregate principal amount of the Bonds then Outstanding, and upon being indemnified to its satisfaction therefor, shall, proceed to protect or enforce its rights or the rights of such Holders by such appropriate action, suit, mandamus or other
proceedings as it shall deem most effectual to protect and enforce any such right, at law or in equity, either for the specific performance of any covenant or agreement contained herein, or in aid of the execution of any power herein granted, or for
the enforcement of any other appropriate legal or equitable right or remedy vested in the Trustee or in such Holders under this Indenture, the Agreement, the Act or any other law; and upon instituting

  

 39 

 
such proceeding, the Trustee shall be entitled, as a matter of right, to the appointment of a receiver of the Revenues and other assets pledged under this Indenture, pending such proceedings. All
rights of action under this Indenture or the Bonds or otherwise may be prosecuted and enforced by the Trustee without the possession of any of the Bonds or the production thereof in any proceeding relating thereto, and any such suit, action or
proceeding instituted by the Trustee shall be brought in the name of the Trustee for the benefit and protection of all the Holders of such Bonds, subject to the provisions of this Indenture (including Section 6.02 hereof). 

SECTION 7.05. Bondholders’ Direction of Proceedings. Anything in this Indenture to the contrary
notwithstanding, but subject to Section 8.03(G), the Holders of not less than a majority in aggregate principal amount of the Bonds then Outstanding shall have the right, by an instrument or concurrent instruments in writing executed and
delivered to the Trustee, to direct the method of conducting all remedial proceedings taken by the Trustee hereunder, provided that such direction shall not be otherwise than in accordance with law and the provisions of this Indenture, and that the
Trustee shall have the right to decline to follow any such direction which in the opinion of the Trustee would be unjustly prejudicial to Bondholders not parties to such direction or for which it has not been provided adequate indemnity. 

SECTION 7.06. Limitation on Bondholders’ Right to Sue. Subject to Section 7.01 hereof, no Holder of
any Bond shall have the right to institute any suit, action or proceeding at law or in equity, for the protection or enforcement of any right or remedy under this Indenture, the Agreement, the Act or any other applicable law with respect to such
Bond, unless (1) such Holder shall have given to the Trustee written notice of the occurrence of an Event of Default; (2) the Holders of not less than a majority in aggregate principal amount of the Bonds then Outstanding shall have made
written request upon the Trustee to exercise the powers hereinbefore granted or to institute such suit, action or proceeding in its own name; (3) subject to Section 8.03(G) hereof, such Holder or said Holders shall have tendered to the
Trustee reasonable indemnity against the costs, expenses and liabilities to be incurred in compliance with such request; and (4) the Trustee shall have refused or omitted to comply with such request for a period of 60 days after such written
request shall have been received by, and said tender of indemnity shall have been made to, the Trustee. 
 Such
notification, request, tender of indemnity and refusal or omission are hereby declared, in every case, to be conditions precedent to the exercise by any Holder of Bonds of any remedy hereunder or under law; it being understood and intended that no
one or more Holders of Bonds shall have any right in any manner whatever by such Holders’ action to affect, disturb or prejudice the security of this Indenture or the rights of any other Holders of Bonds, or to enforce any right under this
Indenture, the Agreement, the Act or other applicable law with respect to the Bonds, except in the manner herein provided, and that all proceedings at law or in equity to enforce any such right shall be instituted, had and maintained in the manner
herein provided and for the benefit and protection of all Holders of the Outstanding Bonds, subject to the provisions of this Indenture (including Section 6.02 hereof). 

SECTION 7.07. Absolute Obligation of Authority. Nothing in Section 7.06 or in any other provision of
this Indenture, or in the Bonds, contained shall affect or impair the obligation of the Authority, which is absolute and unconditional, to pay the principal of and interest on the Bonds to the respective Holders of the Bonds at their respective
dates of maturity, or upon call for redemption, as herein provided, but only out of the Revenues and other assets herein pledged therefor, or affect or impair the right of such Holders, which is also absolute and unconditional, to enforce such
payment by virtue of the contract embodied in the Bonds. 
  

 40 

 SECTION 7.08. Termination of Proceedings. In case any
proceedings taken by the Trustee or any one or more Bondholders on account of any Event of Default shall have been discontinued or abandoned for any reason or shall have been determined adversely to the Trustee or the Bondholders, then in every such
case the Authority, the Trustee and the Bondholders, subject to any determination in such proceedings, shall be restored to their former positions and rights hereunder, severally and respectively, and all rights, remedies, powers and duties of the
Authority, the Trustee and the Bondholders shall continue as though no such proceedings had been taken. 

SECTION 7.09. Remedies Not Exclusive. No remedy herein conferred upon or reserved to the Trustee or the
Holders of the Bonds is intended to be exclusive of any other remedy or remedies, and each and every such remedy, to the extent permitted by law, shall be cumulative and in addition to any other remedy given hereunder or now or hereafter existing at
law or in equity or otherwise. 
 SECTION 7.10. No Waiver of Default. No delay or omission of the
Trustee or of any Holder of the Bonds to exercise any right or power arising upon the occurrence of any default shall impair any such right or power or shall be construed to be a waiver of any such default or an acquiescence therein; and every power
and remedy given by this Indenture to the Trustee or to the Holders of the Bonds may be exercised from time to time and as often as may be deemed expedient. 

ARTICLE VIII 

THE TRUSTEE, THE PAYING AGENT AND THE BOND REGISTRAR 

SECTION 8.01. Duties, Immunities and Liabilities of Trustee. (A) The Trustee and the Registrar shall,
prior to an Event of Default, and after the curing of all Events of Default which may have occurred, perform such duties and only such duties as are specifically set forth in this Indenture. The Trustee shall, during the existence of any Event of
Default (which has not been cured or waived), exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in their exercise, as prudent persons would exercise or use under the circumstances in the
conduct of their own affairs. Notwithstanding any other provision of this Indenture, the Trustee shall perform all duties required of it hereunder. 

No provision of this Indenture shall be construed to relieve the Trustee or the Registrar from liability for its own
negligent action or its own negligent failure to act, except that: 
 (a) Prior to such an Event
of Default hereunder and after the curing of all Events of Default which may have occurred, 

(1) the duties and obligations of the Trustee and the Registrar, as the case may be, shall be determined
solely by the express provisions of this Indenture, the Trustee and Registrar, as the case may be, shall not be liable except for the performance of such duties and obligations as are specifically set forth in this Indenture, and no implied
covenants or obligations shall be read into this Indenture against the Trustee and the Registrar, as the case may be; and 
  

 41 

 (2) in the absence of bad faith on the part of the Trustee
or the Registrar, as the case may be, the Trustee or Registrar, as the case may be, may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon any certificate or opinion furnished to the
Trustee or the Registrar, as the case may be, conforming to the requirements of this Indenture; but in the case of any such certificate or opinion which by any provision hereof is specifically required to be furnished to the Trustee or the
Registrar, as the case may be, the Trustee or Registrar, as the case may be, shall be under a duty to examine the same to determine whether or not it conforms to the requirements of this Indenture; and 

(b) At all times, regardless of whether or not any Event of Default shall exist, 

(1) the Trustee and the Registrar shall not be liable for any error of judgment made in good faith by a
responsible officer, director or employee of the Trustee or the Registrar unless it shall be proved that the Trustee or the Registrar, as the case may be, was negligent in ascertaining the pertinent facts; 

(2) neither the Trustee nor the Registrar shall be liable with respect to any action taken or omitted to
be taken by it in good faith in accordance with the direction of the Holders of not less than a majority, or such larger percentage as may be required hereunder, in aggregate principal amount of the Bonds at the time outstanding relating to the
time, method and place of conducting any proceeding for any remedy available to the Trustee or Registrar, or exercising any trust or power conferred upon the Trustee or the Registrar under this Indenture. 

None of the provisions contained in this Indenture shall require the Trustee or Registrar to expend or risk their own
funds or otherwise incur individual financial liability in the performance of any of their duties or in the exercise of any of their rights or powers other than to notify the Authority that they intend to take no particular action or to notify the
Bondholders that they will take no action, if adequate indemnity against such risk or liability is not assured to them. All indemnifications and releases from liability granted herein to the Trustee shall extend to the directors, officers, employees
and agents of the Trustee. 
 (B) The Authority may remove the Trustee at any time upon its own decision or upon
Request of the Borrower, and shall remove the Trustee if at any time requested to do so by an instrument or concurrent instruments in writing signed by the Holders of not less than a majority in aggregate principal amount of the Bonds then
Outstanding (or their attorneys duly authorized in writing) or if at any time the Trustee shall cease to be eligible in accordance with subsection (E) of this Section, or shall become incapable of acting, or shall be adjudged bankrupt or
insolvent, or a receiver of the Trustee or its property shall be appointed, or any public officer shall take control or charge of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, in each case
by giving written notice of such removal to the Trustee, and thereupon shall appoint a successor Trustee by an instrument in writing. 
  

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 (C) The Trustee may at any time resign by giving written notice of such
resignation to the Authority and by giving the Bondholders notice of such resignation by mail at the addresses shown on the registration books maintained by the Trustee. Upon receiving such notice of resignation, the Authority shall promptly appoint
a successor Trustee by an instrument in writing. The Trustee shall not be relieved of its duties until such successor Trustee has accepted appointment. 

(D) Any removal or resignation of the Trustee pursuant to (B) or (C) above and appointment of a successor
Trustee shall become effective upon acceptance of appointment by the successor Trustee. If no successor Trustee shall have been appointed and have accepted appointment within 45 days of giving notice of removal or notice of resignation as aforesaid,
the resigning Trustee or any Bondholder (on behalf of itself and all other Bondholders) may petition any court of competent jurisdiction for the appointment of a successor Trustee, and such court may thereupon, after such notice (if any) as it may
deem proper, appoint such successor Trustee. Any successor Trustee appointed under this Indenture shall signify its acceptance of such appointment by executing and delivering to the Authority and to its predecessor Trustee a written acceptance
thereof, and thereupon such successor Trustee, without any further act, deed or conveyance, shall become vested with all the moneys, estates, properties, rights, powers, trusts, duties and obligations of such predecessor Trustee, with like effect as
if originally named Trustee herein; but, nevertheless at the Request of the Authority or the request of the successor Trustee, such predecessor Trustee shall execute and deliver any and all instruments of conveyance or further assurance and do such
other things as may reasonably be required for more fully and certainly vesting in and confirming to such successor Trustee all the right, title and interest of such predecessor Trustee in and to any property held by it under this Indenture and
shall pay over, transfer, assign and deliver to the successor Trustee any money or other property subject to the trusts and conditions herein set forth. Upon request of the successor Trustee, the Authority shall execute and deliver any and all
instruments as may be reasonably required for more fully and certainly vesting in and confirming to such successor Trustee all such moneys, estates, properties, rights, powers, trusts, duties and obligations. Upon acceptance of appointment by a
successor Trustee as provided in this subsection, the Authority shall mail a notice of the succession of such Trustee to the trusts hereunder to each Rating Agency which is then rating the Bonds, to the Bondholders at the addresses shown on the
registration books maintained by the Trustee. If the Authority fails to mail such notice within 15 days after acceptance of appointment by the successor Trustee, the successor Trustee shall cause such notice to be mailed at the expense of the
Authority. 
 (E) Any Trustee appointed under the provisions of this Section in succession to the Trustee shall
be a trust company, association, corporation or bank having the powers of a trust company which either (i) has a combined capital and surplus of at least fifty million dollars ($50,000,000), and is subject to supervision or examination by
federal or state authority or (ii) is a wholly-owned subsidiary of a bank, association, trust company, corporation or bank holding company meeting, on an aggregate basis, the tests set out in clause (i). If such bank, association, bank holding
company, corporation or trust company publishes a report of condition at least annually, pursuant to law or to the requirements of any supervising or examining authority above referred to, then for the purpose of this subsection the combined capital
and surplus of such bank, association, bank holding company, corporation 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. In case at any time the Trustee shall
cease to be eligible in accordance with the provisions of this subsection (E), the Trustee shall resign immediately in the manner and with the effect specified in this Section. 

 

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 (F) The Trustee is not responsible for effecting, maintaining or renewing
any policies of insurance of the Borrower or for any representations regarding the sufficiency of any policy of insurance of the Borrower and shall not be responsible for monitoring or reviewing any policy of insurance of the Borrower or be
obligated to file claims or proofs of loss in the case of insurance or to pay taxes or assessments. 
 (G) The
Trustee is not responsible for filing financing or continuation statements. 
 (H) Subject to the provisions of
Sections 5.05 and 10.03 hereof, all moneys received by the Trustee shall, until used or applied as herein provided, be held in trust for the purposes for which they were received, but need not be segregated from other funds except to the extent
required by law or by this Indenture. The Trustee shall be under no liability for interest on any moneys received by it hereunder except such as it may agree with the Authority to pay thereon. Any interest allowed on any such moneys shall be
deposited in the fund or account to which such moneys are credited. Any moneys held by the Trustee may be deposited by it in its banking department and invested as provided herein. 

(I) The Trustee agrees to accept and act upon written instructions or directions pursuant to this Indenture sent by
unsecured e-mail, facsimile transmission or other similar unsecured electronic methods. If the Borrower elects to give the Trustee e-mail or facsimile instructions (or instructions by a similar electronic method) and the Trustee in its discretion
elects to act upon such instructions, the Trustee’s understanding of such instructions shall be deemed controlling. Absent the Trustee’s negligence or willful misconduct, the Trustee shall not be liable for any losses, costs or expenses
arising directly or indirectly from the Trustee’s reliance upon and compliance with such instructions notwithstanding such instructions conflict or are inconsistent with a subsequent written instruction. Absent the Trustee’s negligence or
willful misconduct, the Borrower agrees to assume all risks arising out of the use of such electronic methods by any person to submit written instructions and directions to the Trustee, including without limitation the risk of the Trustee acting on
unauthorized instructions, and the risk of interception and misuse by third parties. 
 SECTION 8.02.
Merger or Consolidation. Any company into which the Trustee may be merged or converted or with which it may be consolidated or any company resulting from any merger, conversion or consolidation to which it shall be a party or any company to
which the Trustee may sell or transfer all or substantially all of its corporate trust business, provided such company shall be eligible under subsection (E) of Section 8.01 shall be the successor to such Trustee without the execution or
filing of any paper or any further act, anything herein to the contrary notwithstanding. 
 SECTION 8.03.
Liability of Trustee. (A) The recitals of facts herein and in the Bonds contained shall be taken as statements of the Authority, and the Trustee shall assume no responsibility for the correctness of the same, or make any representations
as to the validity or sufficiency of this Indenture or of the Bonds. In addition, the Trustee shall assume no responsibility with respect to this Indenture or the Bonds other than in connection with the duties or obligations

  

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assigned to or imposed upon the Trustee herein or in the Bonds. The Trustee shall, however, be responsible for its representations contained in its certificate of authentication on the Bonds. The
Trustee shall not be liable in connection with the performance of its duties hereunder, except for its own negligence or willful misconduct. The Trustee may become the Holder of Bonds with the same rights it would have if it were not Trustee and, to
the extent permitted by law, may act as depositary for and permit any of its officers or directors to act as a member of, or in any other capacity with respect to, any committee formed to protect the rights of Bondholders, whether or not such
committee shall represent the Holders of a majority in principal amount of the Bonds then Outstanding. 
 The
Trustee may execute any of the trusts or powers set forth herein and perform the duties required of it hereunder by or through attorneys, agents, or receivers and shall be entitled to the advice of counsel concerning all matters of trusts and its
duties herein. 
 (B) The Trustee shall not be liable for any error of judgment made in good faith by a
responsible officer, director or employee unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts. 

(C) The Trustee shall not be liable with respect to any action or inaction taken or omitted to be taken by it in good
faith in accordance with the direction of the Holders of not less than a majority in aggregate principal amount of the Bonds at the time Outstanding relating to the time, method and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the Trustee under this Indenture. 
 (D) The Trustee
shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request, order or direction of any of the Bondholders pursuant to the provisions of this Indenture unless such Bondholders shall have offered
to the Trustee reasonable security or indemnity against the costs, expenses and liabilities which may be incurred therein or thereby. 

(E) The Trustee shall not be liable for any action or inaction taken by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon it by this Indenture. 
 (F) The Trustee
shall not be deemed to have knowledge of any default or Event of Default hereunder unless and until it shall have actual knowledge thereof, or shall have received written notice thereof, at its Corporate Trust Office. Except as otherwise expressly
provided herein, the Trustee shall not be bound to ascertain or inquire as to the performance or observance of any of the terms, conditions, covenants or agreements herein or of any of the documents executed in connection with the Bonds, or as to
the existence of a default or Event of Default thereunder. The Trustee shall not be responsible for the validity or effectiveness of any collateral given to or held by it. 

(G) No provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties hereunder, or in the exercise of its rights or powers, other than to notify the Authority that it intends to take no particular action or to notify the Bondholders that it will take no
action, if repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it. The 
  

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Trustee shall, however, in any case, pay from funds held by it hereunder and available for such purpose, principal of and premium, if any, or interest on the Bonds as it becomes due and
accelerate the Bonds as required by the Indenture, notwithstanding anything to the contrary herein. 
 (H) The
Trustee shall have no responsibility, opinion or liability with respect to any information statement or recital found in any Official Statement or other disclosure material, prepared or distributed with respect to the issuance of the Bonds, except
for information provided by the Trustee. 
 SECTION 8.04. Right of Trustee to Rely on Documents. The
Trustee shall be protected, absent its own negligence or willful misconduct, in acting upon any notice, resolution, request, consent, order, certificate, report, opinion, bond or other paper or document believed by it to be genuine and to have been
signed or presented by the proper party or parties. The Trustee may consult with counsel, who may be counsel of or to the Authority or the Borrower, with regard to legal questions, and the opinion of such counsel shall be full and complete
authorization and protection in respect of any action taken or suffered by it hereunder in good faith and in accordance therewith. 

The Trustee shall not be bound to recognize any Person as the Holder of a Bond unless and until such Bond is submitted
for inspection, if required, and its title thereto is satisfactorily established, if disputed. 
 Whenever in
the administration of the trusts imposed upon it by this Indenture the Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering any action hereunder, such matter (unless other evidence in
respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a Certificate of the Authority, and such Certificate shall be full warrant to the Trustee for any action taken or suffered in good faith
under the provisions of this Indenture in reliance upon such Certificate, but in its discretion the Trustee may, in lieu thereof, accept other evidence of such matter or may require such additional evidence as it may deem reasonable. 

SECTION 8.05. Preservation and Inspection of Documents. All documents received by the Trustee under the
provisions of this Indenture shall be retained in its possession and shall be subject at all reasonable times to the inspection of the Authority and any Bondholder, and their agents and representatives duly authorized in writing, at reasonable hours
and under reasonable conditions. 
 SECTION 8.06. Compensation and Indemnification. The Authority
shall pay to the Trustee, the Paying Agent and the Registrar (solely from Additional Payments) from time to time reasonable compensation for all services rendered under this Indenture, and also all reasonable expenses, charges, legal and consulting
fees and other disbursements and those of its attorneys, agents and employees, incurred in and about the performance of its powers and duties under this Indenture, and the Trustee shall have a lien therefor on any and all funds (except the Rebate
Fund and the moneys held for particular Bonds (including non-presented Bonds) and moneys held pursuant to Section 10.03) at any time held by it under this Indenture which lien shall be prior and superior to the lien of the Holders of the Bonds.
The Authority further covenants and agrees, to the extent authorized by law, and solely from Additional Payments to indemnify and save the Trustee, the Paying Agent and the Registrar, harmless against any losses, expenses and liabilities which they

  

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may incur arising out of or in the exercise and performance of its powers and duties hereunder, including the costs and expenses of defending against any claim of liability, but excluding
liabilities which are due to the negligence or willful default of the indemnified party. The obligations of the Authority under this Section shall survive resignation or removal of the Trustee, the Paying Agent and the Registrar under this Indenture
and payment of the Bonds and discharge of this Indenture. 
 SECTION 8.07. Paying Agent. The
Authority, with the written approval of the Trustee, may appoint and at all times have a Paying Agent in such cities as the Authority deems desirable, for the payment of the principal of, and the interest (and premium, if any) on, the Bonds. It
shall be the duty of the Trustee to make such credit arrangements with such Paying Agent as may be necessary to assure, to the extent of the moneys held by the Trustee for such payment, the prompt payment of the principal of, and interest (and
premium, if any) on, the Bonds presented at either place of payment. The Trustee will not be responsible for the failure of any party to make funds available to the Trustee or Paying Agent. The Trustee is the initial Paying Agent. If the Paying
Agent is any entity other than the Trustee, (i) the Paying Agent may not hold any such funds and (ii) the Paying Agent shall be subject to the same standards and qualifications applicable to the Trustee as set forth in this Indenture.

 SECTION 8.08. Notices to the Authority. The Trustee shall provide the Authority with the
following: 
 (a) On or before June 15 of each year, commencing June 15, 2011, during which any of
the Bonds are Outstanding, or upon any significant change that occurs which would adversely impact the Trustee’s ability to perform its duties under the Indenture, a written disclosure of any such change, or if applicable, of any conflicts that
the Trustee may have as a result of other business dealings between the Trustee and the Borrower. The Trustee may rely on a Certificate of the Borrower delivered pursuant to Section 5.9(d) of the Agreement to the extent of the information
required in such certificate for purposes of this subparagraph (a). If there are not such instances of a significant change, or of a conflict existing, then a statement to that effect shall be provided on such date; 

(b) If there is a failure to pay any amount of principal of, or premium, if any, or interest on any Bond when due; or if
there is a failure of the Borrower to provide any notice, certification or report specified in Section 5.9 of the Agreement; or if there is an occurrence of any other Event of Default hereunder, of which the Trustee has knowledge, the Trustee
shall provide written notice to the Authority within five Business Days of such failure or receipt of notice of the occurrence of such Event of Default and such notice from the Trustee shall include a statement setting forth the steps the Trustee is
taking to remedy such failure or Event of Default, as applicable; and 
 (c) As of June 30 and
December 31 of each year, a Trustee Audit Letter, in the form of Exhibit B attached hereto, which shall be received no later than December 15 or June 15 next following each such June 30 or December 31, as the case may be.

 SECTION 8.09. Notices to Rating Agency. The Trustee shall provide any Rating Agency with written
notice upon the occurrence of: (i) the discharge of liability on the Bonds pursuant to Section 10.02 hereof; (ii) the resignation or removal of the Trustee; (iii) acceptance of appointment as successor Trustee hereunder;
(iv) the redemption of all Bonds; (v) a material change in the Indenture or the Loan Agreement; and (vi) when the Bonds are no longer Outstanding. The Trustee shall also notify any Rating Agency of any changes to any of the documents
to which the Trustee is a party, upon its receipt of notification of any such changes. 
  

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 SECTION 8.10. Appointment and Duties of Bond Registrar. The
Authority hereby designates the Trustee as initial Bond Registrar. The Bond Registrar shall not be entitled to any compensation from the Authority or the Trustee but, rather, shall only be entitled to compensation from the Borrower. 

SECTION 8.11. Eligibility of Bond Registrar. A Bond Registrar appointed pursuant to this Indenture shall be a
corporation or association organized and doing business under the laws of the United States or any state or the District of Columbia, subject to supervision or examination by federal or state authority and shall either (i) have a combined
capital and surplus of at least $50,000,000 and be subject to supervision or examination by federal or state authority, or (ii) be a wholly-owned subsidiary of a bank, association, trust company or bank holding company meeting, on an aggregate
basis, the tests set out in clause (i). If such bank, association, corporation or trust company publishes a report of condition at least annually, pursuant to law or to the requirements of any supervising or examining authority above referred to,
then for the purpose of this subsection the combined capital and surplus of such bank, association 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 Bond
Registrar or the bank, association, trust company or bank holding company of which the Bond Registrar is a wholly-owned subsidiary shall have a rating of at least Moody’s “Baa3/P-3” or Fitch “BBB-/F3” or an equivalent rating
from another Rating Agency, or be approved by the Rating Agency. 
 SECTION 8.12. Bond Registrar’s
Performance of Duties. The Bond Registrar shall perform the duties provided for in this Indenture and in exercising such duties shall be subject to the same standards and entitled to the same rights and immunities applicable to the Trustee as
set forth in this Indenture and shall not be liable for any action or omission to act except for negligence or willful misconduct. 

SECTION 8.13. Replacement of Bond Registrar. The Bond Registrar may resign by notifying the Authority, the
Trustee and the Bondholders in writing at least 30 days before the effective date of such resignation. The Authority may remove the Bond Registrar at any time upon its own decision or upon Request of the Borrower or the Trustee, and shall remove the
Bond Registrar if at any time requested to do so by an instrument or concurrent instruments in writing signed by the Holders of not less than a majority in aggregate principal amount of the Bonds then Outstanding (or their attorneys duly authorized
in writing) or if at any time the Bond Registrar shall cease to be eligible in accordance with Section 8.17, or shall become incapable of acting, or shall be adjudged bankrupt or insolvent, or a receiver of the Bond Registrar or its property
shall be appointed, or any public officer shall take control or charge of the Bond Registrar or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, in each case by giving written notice of such removal to the
Bond Registrar and the Borrower and thereupon shall appoint, with the consent of the Borrower, a successor Bond Registrar by an instrument in writing. No resignation or removal shall be effective until the successor has delivered an acceptance of
its appointment to the Trustee and the predecessor Bond Registrar. 
  

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 In the event of the resignation or removal of the Bond Registrar, such Bond
Registrar shall pay over, assign and deliver any moneys held by it as Bond Registrar to its successor, or if there is no successor, to the Trustee. In the event that for any reason there shall be a vacancy in the office of the Bond Registrar, the
Trustee shall act as such Bond Registrar to the extent it has operational capacity to perform such tasks. 
 ARTICLE IX 

 MODIFICATION OR AMENDMENT OF THE INDENTURE 

SECTION 9.01. Amendments Permitted. (A) This Indenture and the rights and obligations of the Authority
and of the Holders of the Bonds and of the Trustee may be modified or amended from time to time and at any time by an indenture or indentures supplemental hereto, which the Authority and the Trustee may enter into when the written consent of the
Holders of not less than a majority in aggregate principal amount of all Bonds then Outstanding, shall have been filed with the Trustee. No such modification or amendment shall (1) extend the fixed maturity of any Bond, or reduce the amount of
principal thereof, or extend the time of payment, or change the method of computing the rate of interest thereon, or extend the time of payment of interest thereon, without the consent of the Holder of each Bond so affected, or (2) reduce the
aforesaid percentage of Bonds the consent of the Holders of which is required to effect any such modification or amendment, or permit the creation of any lien on the Revenues and other assets pledged under this Indenture prior to or on a parity with
the lien created by this Indenture, or deprive the Holders of the Bonds of the lien created by this Indenture on such Revenues and other assets (except as expressly provided in this Indenture), without the consent of the Holders of all of the Bonds
then Outstanding. It shall not be necessary for the consent of the Bondholders to approve the particular form of any Supplemental Indenture, but it shall be sufficient if such consent shall approve the substance thereof. Promptly after the execution
by the Authority and the Trustee of any Supplemental Indenture pursuant to this subsection (A), the Trustee shall mail a notice, setting forth in general terms the substance of such Supplemental Indenture, to each Rating Agency then rating the Bonds
and the Holders of the Bonds at the address shown on the registration books of the Trustee. Any failure to give such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such Supplemental Indenture.

 (B) This Indenture and the rights and obligations of the Authority, of the Trustee and of the Holders of the
Bonds may also be modified or amended from time to time and at any time by an indenture or indentures supplemental hereto, which the Authority and the Trustee may enter into without the consent of any Bondholders, but only to the extent permitted by
law and after receipt of an Opinion of Counsel that the provisions of such Supplemental Indenture shall not materially adversely affect the interests of the Holders of the Bonds, including, without limitation, for any one or more of the following
purposes: 
 (1) to add to the covenants and agreements of the Authority in this Indenture
contained other covenants and agreements thereafter to be observed, to pledge or assign additional security for the Bonds (or any portion thereof), or to surrender any right or power herein reserved to or conferred upon the Authority; 

(2) to make such provisions for the purpose of curing any ambiguity, inconsistency or omission, or of
curing or correcting any defective provision, contained in this Indenture, or in regard to matters or questions arising under this Indenture, as the Authority may deem necessary or desirable and not inconsistent with this Indenture; 

 

 49 

 (3) to modify, amend or supplement this Indenture in such
manner as to permit the qualification hereof under the Trust Indenture Act of 1939, as amended, or any similar federal statute hereafter in effect, and to add such other terms, conditions and provisions as may be permitted by said act or similar
federal statute; or 
 (4) to modify, amend or supplement this Indenture in such a manner to
permit the Authority, the Trustee, the Borrower or any other responsible party to comply with the requirements of S.E.C. Rule 15c2-12, as it may from time to time be amended or supplemented, with respect to the Bonds. 

The Trustee shall give notice of any such modification or amendment to each Rating Agency then rating the Bonds. 

(C) The Trustee may in its discretion, but shall not be obligated to, enter into any such Supplemental Indenture
authorized by subsections (A) or (B) of this Section which materially adversely affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise. 

SECTION 9.02. Effect of Supplemental Indenture. Upon the execution of any Supplemental Indenture pursuant to
this Article, this Indenture shall be deemed to be modified and amended in accordance therewith, and the respective rights, duties and obligations under this Indenture of the Authority, the Trustee and all Holders of Bonds Outstanding shall
thereafter be determined, exercised and enforced hereunder subject in all respects to such modification and amendment, and all the terms and conditions of any such Supplemental Indenture shall be deemed to be part of the terms and conditions of this
Indenture for any and all purposes. 
 Any such Supplemental Indenture shall comply with the terms of this
Article IX, and the Trustee and the Authority may conclusively rely on an Opinion of Counsel that the Supplemental Indenture complies with the provisions therein. 

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

 

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 SECTION 9.04. Amendment of Particular Bonds. The provisions of
this Article shall not prevent any Bondholder from accepting any amendment as to the particular Bonds held by him or her, provided that due notation thereof is made on such Bonds. 

ARTICLE X 

DEFEASANCE 

SECTION 10.01. Discharge of Indenture. Bonds may be paid by the Authority in any of the following ways,
provided that the Authority also pays or causes to be paid any other sums payable hereunder by the Authority and related to the Bonds: 

(a) by paying or causing to be paid the principal of, interest and premium, if any, on the Bonds
Outstanding, as and when the same become due and payable; 
 (b) by depositing with the Trustee,
in trust, at or before maturity, money or securities in the necessary amount (as provided in Section 10.03) to pay or redeem all Bonds then Outstanding; or 

(c) by delivering to the Trustee, for cancellation by it, the Bonds then Outstanding. 

If the Authority shall also pay or cause to be paid all other sums payable hereunder by the Authority, then and in that
case, at the election of the Authority (evidenced by a Certificate of the Authority, filed with the Trustee, signifying the intention of the Authority to discharge all such indebtedness and this Indenture), and notwithstanding that any Bonds shall
not have been surrendered for payment, this Indenture and the pledge of Revenues and other assets made under this Indenture and all covenants, agreements and other obligations of the Authority under this Indenture shall cease, terminate, become void
and be completely discharged and satisfied except only as provided in Section 10.02 hereof. In such event, upon Request of the Authority, the Trustee shall cause an accounting for such period or periods as may be requested by the Authority to
be prepared and filed with the Authority and shall execute and deliver to the Authority all such instruments as may be necessary or desirable to evidence such discharge and satisfaction, and the Trustee shall pay over, transfer, assign or deliver
all moneys or securities or other property held by it pursuant to this Indenture (other than the Rebate Fund) which are not required for the payment or redemption of Bonds not theretofore surrendered for such payment or redemption and any amounts
owed to the Trustee hereunder to the Borrower, provided, however, that the Borrower may not receive any moneys held for the payment of particular Bonds (including moneys held for non-presented Bonds). All moneys or securities held by the Trustee in
the Borrower Account of the Costs of Issuance Fund shall be transferred to the Borrower. 
 SECTION 10.02.
Discharge of Liability on Bonds. Upon the deposit with the Trustee, in trust, at or before maturity, of money or securities in the necessary amount (as provided in Section 10.03 hereof) to pay or redeem any Outstanding Bond (whether upon
or prior to its maturity or the redemption date of such Bond), provided that, if such Bond is to be redeemed prior to maturity, notice of such redemption shall have been given as in Article IV provided or provision satisfactory to the Trustee shall
have been made for the giving of such notice, then all liability of the Authority in respect of such Bond shall cease, terminate and be completely discharged, except only that the Holder thereof shall thereafter be entitled to payment of the
principal of, premium, if any, 
  

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and interest on such Bond by the Authority, and the Authority shall remain liable for such payment, but only out of such money or securities deposited with the Trustee as aforesaid for their
payment and such money or securities shall be pledged to such payment; provided further, however, that the provisions of Section 10.04 hereof shall apply in all events. 

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

SECTION 10.03. Deposit of Money or Securities With Trustee. Whenever in this Indenture it is provided or
permitted that there be deposited with or held in trust by the Trustee money or securities in the necessary amount to pay or redeem any Bonds, the money or securities to be deposited or held may include money or securities held by the Trustee in the
funds and accounts established pursuant to this Indenture (exclusive of the Rebate Fund and the Borrower Account of the Costs of Issuance Fund) and shall be: 

(a) Moneys in an equal amount to the principal amount of such Bonds, and all unpaid interest thereon to
maturity except that, in the case of Bonds which are to be redeemed prior to maturity and in respect of which notice of such redemption shall have been given as in Article IV provided or provision satisfactory to the Trustee shall have been made for
the giving of such notice, the amount to be deposited or held shall be the principal amount or redemption price of such Bonds and all unpaid interest thereon to the redemption date; or 

(b) Investment Securities of the type described in clause (i) (including funds described in clause
(iv)(i) rated Fitch/S&P “AAA” or equivalent which consist solely of securities described in clause (i)) of the definition of Investment Securities which are nonredeemable and noncallable, the principal of and interest on which when due
and without reinvestment will provide money sufficient to pay the principal of, premium, if any, all unpaid interest to maturity, or to the redemption date, on the Bonds to be paid or redeemed, as such principal and interest become due, with
maturities no longer than as may be necessary to make the required payment on the Bonds provided that, in the case of Bonds which are to be redeemed prior to the maturity thereof, notice of such redemption shall have been given as in Article IV
provided or provision satisfactory to the Trustee shall have been made for the giving of such notice; 
 provided, in each case,
that the Trustee shall have been irrevocably instructed (by the terms of this Indenture or by Request of the Authority) to apply such money or Investment Securities to the payment of such principal, premium, if any, and interest with respect to such
Bonds and provided further that each Rating Agency then rating such Bonds, the Authority and the Trustee shall have received a report of an Accountant that the moneys or Investment Securities on deposit are sufficient to pay the principal, premium,
if any, and interest on the Bonds to maturity or the redemption date. 
 SECTION 10.04. Payment of Bonds
After Discharge of Indenture Obligation. Notwithstanding any provisions of this Indenture, any moneys deposited with the Trustee in trust for the payment of the principal of, or interest or premium on, any Bonds remaining unclaimed after

  

 52 

 
the principal of any Bond has become due and payable (whether at maturity or upon call for redemption or by declaration as provided in this Indenture), shall be disposed of as provided by law and
the Holders of such Bonds shall thereafter be entitled to look only to the transferee of such moneys (presently the State Controller) for payment thereof, and all liability of the Trustee with respect to such moneys shall thereupon cease.

 ARTICLE XI 

MISCELLANEOUS 

SECTION 11.01. Liability of Authority Limited to Revenues. Notwithstanding anything in this Indenture or in
the Bonds contained, the Authority shall not be required to advance any moneys derived from any source other than the Revenues and other assets pledged under this Indenture for any of the purposes in this Indenture mentioned, whether for the payment
of the principal of or interest on the Bonds or for any other purpose of this Indenture. Nevertheless, the Authority may, but shall not be required to, advance for any of the purposes hereof any funds of the Authority which may be made available to
it for such purposes. NEITHER THE FULL FAITH AND CREDIT NOR THE TAXING POWER OF THE STATE OF CALIFORNIA OR ANY POLITICAL SUBDIVISION THEREOF OR ANY LOCAL AGENCY IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF, PREMIUM, IF ANY, OR INTEREST ON THE
BONDS. The Authority shall not be liable for any costs, expenses, losses, damages, claims or actions, of any conceivable kind on any conceivable theory, under or by reason of or in connection with the Loan Agreement, the Bonds or this Indenture,
except only to the extent amounts are received for the payment thereof from the Borrower under the Loan Agreement; provided the Borrower shall not be required to pay the fees and expenses of the Authority’s counsel incurred in connection with
the issuance of the Bonds. 
 SECTION 11.02. Successor Is Deemed Included in All References to
Predecessor. Whenever in this Indenture either the Authority or the Trustee is named or referred to, such reference shall be deemed to include the successors or assigns thereof, and all the covenants and agreements in this Indenture contained by
or on behalf of the Authority or the Trustee shall bind and inure to the benefit of the respective successors and assigns thereof whether so expressed or not. All the covenants, stipulations, promises and agreements in this Indenture contained, by
or on behalf of the Authority, shall bind and inure to the benefit of its successors and assigns, whether so expressed or not. If any of the powers or duties of the Authority shall hereafter be transferred by any law of the State of California, and
if such transfer shall relate to any matter or thing permitted or required to be done under this Indenture by the Authority, then the body or official of the State of California who shall succeed to such powers or duties shall act and be obligated
in the place and stead of the Authority as in this Indenture provided. 
 SECTION 11.03. Limitation of
Rights to Parties and Bondholders. Nothing in this Indenture or in the Bonds expressed or implied is intended or shall be construed to give to any Person other than the Authority, the Trustee, the Borrower and the Holders of the Bonds, any legal
or equitable right, remedy or claim under or in respect of this Indenture or any covenant, condition or provision therein or herein contained; and all such covenants, conditions and provisions are and shall be held to be for the sole and exclusive
benefit of the Authority, the Trustee, the Borrower and the Holders of the Bonds. 
  

 53 

 SECTION 11.04. Waiver of Notice. Whenever in this Indenture the
giving of notice by mail or otherwise is required, the giving of such notice may be waived in writing by the Person entitled to receive such notice and in any such case the giving or receipt of such notice shall not be a condition precedent to the
validity of any action taken in reliance upon such waiver. 
 SECTION 11.05. Destruction of Bonds.
The Trustee shall cancel all securities surrendered for registration, transfer, exchange, payment or cancellation and shall dispose of such canceled securities in a manner deemed appropriate by the Trustee in accordance with its retention policy
then in effect. 
 SECTION 11.06. Severability of Invalid Provisions. If any one or more of the
provisions contained in this Indenture or in the Bonds shall for any reason be held to be invalid, illegal or unenforceable in any respect, then such provision or provisions shall be deemed severable from the remaining provisions contained in this
Indenture and such invalidity, illegality or unenforceability shall not affect any other provision of this Indenture, and this Indenture shall be construed as if such invalid or illegal or unenforceable provision had never been contained herein. The
Authority hereby declares that it would have entered into this Indenture and each and every other Section, paragraph, sentence, clause or phrase hereof and authorized the issuance of the Bonds pursuant thereto irrespective of the fact that any one
or more Sections, paragraphs, sentences, clauses or phrases of this Indenture may be held illegal, invalid or unenforceable. 

SECTION 11.07. Governing Law; Venue. This Indenture shall be construed in accordance with and governed by the
Constitution and laws of the State applicable to contracts made and performed in the State. This Indenture shall be enforceable in the State, and any action arising out of this Indenture shall be filed and maintained in the Sacramento County
Superior Court, Sacramento, California, unless the Authority waives this requirement in writing. 

SECTION 11.08. Notices. Notices shall be delivered to each Bondholder by first-class mail, postage prepaid,
at the address set forth for such Bondholder on the registration books of the Trustee. Any notice to or demand upon the Trustee may be served or presented, and such demand may be made, at the Corporate Trust Office of the Trustee, which at the date
of adoption of this Indenture is located at the following address: 
 Wells Fargo Bank, National Association

 333 Market Street,
18th Floor 

MAC A0119-181 

San Francisco, CA 94105 

Attn: Corporate Trust Department 

Fax Number: (415) 371-3400 
  

 54 

 or at such other address as may have been filed in writing by the Trustee with the
Authority. Any notice to or demand upon the Authority, the Borrower or the Rating Agency shall be deemed to have been sufficiently given or served for all purposes by being delivered or sent by telex or facsimile or by being deposited, postage
prepaid, in a post office letter box, addressed, as the case may be, as follows: 
 To the Authority: 

California Pollution Control Financing Authority 

915 Capitol Mall, Room 457 

Sacramento, CA 95814 

Attn: Executive Director 

Fax Number: (916) 657-4821 

To the Borrower: 

San Jose Water Company 

110 West Taylor Street 

San Jose, CA 95110 

Attn: Executive Vice President-Finance 

Fax Number: (408) 279-7934 

To the Rating Agency: 

Standard and Poor’s Ratings Services 

55 Water Street,
38th Floor 

New York, NY 10041 

Fax Number: (212) 438-2154 

or such other addresses as may have been filed in writing with the Trustee. 

SECTION 11.09. Evidence of Rights of Bondholders. (a) Any request, consent or other instrument required
or permitted by this Indenture to be signed and executed by Bondholders may be in any number of concurrent instruments of substantially similar tenor and shall be signed or executed by such Bondholders in person or by an agent or agents duly
appointed in writing. Proof of the execution of any such request, consent or other instrument or of a writing appointing any such agent, or of the holding by any Person of Bonds transferable by delivery, shall be sufficient for any purpose of this
Indenture and shall be conclusive in favor of the Trustee and of the Authority if made in the manner provided in this Section. 

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

(c) The ownership of registered Bonds shall be proved by the bond registration books held by the Trustee. The Trustee
and the Authority may conclusively assume that such ownership continues until written notice to the contrary is served upon the Trustee. The fact and the date of execution of any request, consent or other instrument and the amount and distinguishing
numbers of Bonds held by the Person so executing such request, consent or other instrument may also be proved in any other manner which the Trustee may deem sufficient. The Trustee may nevertheless, in its discretion, require further proof in cases
where it may deem further proof desirable. 
  

 55 

 Any request, consent, or other instrument or writing of the Holder of any
Bond shall bind every future Holder of the same Bond and the Holder of every Bond issued in exchange therefor or in lieu thereof, in respect of anything done or suffered to be done by the Trustee or the Authority in accordance therewith or reliance
thereon. 
 SECTION 11.10. Disqualified Bonds. In determining whether the Holders of the requisite
aggregate principal amount of Bonds have concurred in any demand, request, direction, consent or waiver under this Indenture, Bonds which are owned or held by or for the account of the Authority or the Borrower, or by any other obligor on the Bonds,
or by any Person directly or indirectly controlling or controlled by, or under direct or indirect common control with, the Authority or the Borrower or any other obligor on the Bonds, shall be disregarded and deemed not to be Outstanding for the
purpose of any such determination unless all Bonds are so held; provided that, for the purpose of determining whether the Trustee shall be protected in relying on any such demand, request, direction, consent or waiver, only Bonds which the Trustee
knows to be so owned shall be disregarded. The Trustee shall not be deemed to have knowledge that any Bond is disqualified unless the Authority or the Borrower is the Holder or the Trustee has received written notification of a Bond so owned or
disqualified. Bonds so owned which have been pledged in good faith may be regarded as Outstanding for the purposes of this Section if the pledgee shall establish to the satisfaction of the Trustee the pledgee’s right to vote such Bonds and that
the pledgee is not a Person directly or indirectly controlling or controlled by, or under direct or indirect common control with, the Authority or the Borrower or any other obligor on the Bonds. Upon the written request of the Trustee, the Authority
and the Borrower shall each certify to the Trustee those Bonds disqualified pursuant to this Section and the Trustee may conclusively rely on such Certificates. Notwithstanding the foregoing, with respect to the Certificate of the Authority, the
Authority shall be required to specify only those Bonds that are owned or held by or for the account of the Authority or any Person directly or indirectly controlling or controlled by, or under direct or indirect common control with, the Authority,
if any, of which the officer signing the Certificate on behalf of the Authority has actual knowledge. In case of a dispute as to such right, any decision by the Trustee taken upon the advice of counsel shall be full protection to the Trustee.

 SECTION 11.11. Money Held for Particular Bonds. The money held by the Trustee for the payment of
the interest, principal or premium due on any date with respect to particular Bonds (or portions of Bonds in the case of registered Bonds redeemed in part only) shall, on and after such date and pending such payment, be set aside on its books and
held by it uninvested in trust for the Holders of the Bonds entitled thereto, subject, however, to the provisions of Section 10.04 hereof. 

SECTION 11.12. Funds and Accounts; Business Day. 

(a) Any fund or account required by this Indenture to be established and maintained by the Trustee may be established and
maintained in the accounting records of the Trustee, either as a fund or an account, and may, for the purposes of such records, any audits thereof and any reports or statements with respect thereto, be treated either as a fund or as an account; but
all such records with respect to all such funds and accounts shall at all times be maintained in accordance with corporate trust industry standards and with due regard for the 

 

 56 

 
requirements of Section 6.05 hereof and for the protection of the security of the Bonds and the rights of every Holder thereof. The Trustee may establish and maintain for as long as
necessary one or more temporary funds or accounts under this Indenture in order to carry out the purposes set forth therein. 

(b) Any payment or transfer which otherwise would become due on any day which is not a Business Day shall become due or
shall be made on the next Business Day, with the same effect as if it had been made on the due date. 

SECTION 11.13. Waiver of Personal Liability. No member, officer, agent or employee of the Authority, and no
officer, official agent or employee of the State of California or any department, board or agency of the foregoing shall be individually or personally liable for the payment of the principal of or premium or interest on the Bonds or be subject to
any personal liability or accountability by reason of the issuance thereof; but nothing herein contained shall relieve any such member, officer, agent or employee from the performance of any official duty provided by law or by this Indenture.

 SECTION 11.14. Opinion of Bond Counsel. Whenever in this Indenture or in the Loan Agreement it is
required that prior to the taking of any action (including but not limited to any modifications of arbitrage covenants contained in Sections 5.05 and 6.06 hereof) an opinion of Bond Counsel is required to be delivered to the effect that such action
will not, in and of itself, adversely affect the Tax-exempt status of the Bonds, and such opinion is not given by Leslie M. Lava, Esq., the Authority or the Borrower shall not be entitled to rely on or refer to the original final bond opinion
delivered by Leslie M. Lava, Esq. on the Delivery Date in connection with the remarketing of the Bonds or in any other context without the consent of Leslie M. Lava, Esq. It is suggested that such successor Bond Counsel also render an opinion that
interest on the Bonds is Tax-exempt and will remain so after the action in question. 
 SECTION 11.15.
Complete Agreement. The parties agree that the terms and conditions of this Indenture supersede those of all previous agreements between the parties relative to the Bonds, and that this Indenture, together with the documents referred to in
this Indenture, contains the entire agreement between the parties hereto relative to the Bonds. 

SECTION 11.16. Execution in Several Counterparts. This Indenture may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to be an original; and all such counterparts, or as many of them as the Authority and the Trustee shall preserve undestroyed, shall together constitute but one and the same
instrument. 
 [REST OF PAGE INTENTIONALLY LEFT BLANK] 

 

 57 

 IN WITNESS WHEREOF, the CALIFORNIA POLLUTION CONTROL FINANCING AUTHORITY has
caused this Indenture to be signed in its name and its facsimile seal to be hereunto affixed and attested by its authorized officers, and WELLS FARGO BANK, NATIONAL ASSOCIATION, in token of its acceptance of the trusts created hereunder, has caused
this Indenture to be signed in its corporate name by one of the officers thereunto duly authorized all as of the day and year first above written. 
  

							
		 		 	 CALIFORNIA POLLUTION CONTROL FINANCING AUTHORITY

				
		 		 	By	 	Bill Lockyer, Chairman
				
		 		 	By:	 	 /s/    Bill
Lockyer        

		 		 		 	Deputy Treasurer
				
		 		 	By:	 	 /s/    Michael
Paparian        

		 		 		 	Executive Director
				
	[Seal]	 		 		 	
			
		 		 	 WELLS FARGO BANK, NATIONAL ASSOCIATION,
as Trustee

				
		 		 	By:	 	 /s/    Karen
Mitani        

		 		 		 	Authorized Officer

  

 S-1 

 EXHIBIT A 

FORM OF BOND 

UNITED STATES OF AMERICA 

STATE OF CALIFORNIA 
  

			
	No. RA-1	 	$50,000,000

 CALIFORNIA
POLLUTION CONTROL 
 FINANCING AUTHORITY 

REVENUE BONDS 

(SAN JOSE WATER COMPANY PROJECT) 

SERIES 2010A 

NEITHER THE FULL FAITH AND CREDIT NOR THE TAXING POWER OF THE STATE OF CALIFORNIA OR ANY POLITICAL SUBDIVISION THEREOF OR ANY LOCAL
AGENCY IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF, PREMIUM, IF ANY, OR INTEREST ON THIS BOND. 
  

							
	 MATURITY DATE
	 	 DATED
	 	 INTEREST RATE
	 	 CUSIP

	 June 1, 2040
	 	Date of Delivery	 	5.10%	 	13053CAB8

  

			
	 Registered Owner:
	    	 CEDE & CO.

		
	 Principal Amount:
	    	 FIFTY MILLION DOLLARS

The California Pollution Control Financing Authority, a public instrumentality and political subdivision of the State of
California (the “Authority”), for value received, hereby promises to pay (but only out of Revenues as hereinafter provided) to the registered owner identified above or registered assigns, on the maturity date set forth above, the principal
sum set forth above and to pay (but only out of Revenues as hereinafter provided) interest on the balance of said principal amount from time to time remaining unpaid from and including the date hereof until payment of said principal amount has been
made or duly provided for, at the interest rate set forth above and on the dates determined as described herein and in the Indenture (as hereinafter defined), and to pay (but only out of Revenues as hereinafter provided) interest on overdue
principal and, to the extent permitted by law, on overdue interest at the rate borne by this Bond on the date on which such principal or interest became due and payable, except as the provisions hereinafter set forth with respect to redemption prior
to maturity or purchase may become applicable hereto. The principal of and premium, if any, on this Bond are payable at final maturity, acceleration or redemption in lawful money of the United States of America upon surrender hereof at the Corporate
Trust Office of Wells Fargo Bank, National Association, as Trustee, or its successor in trust (the “Trustee”). Interest payments on this Bond shall be made on each Interest Payment Date (as defined below)

  

 A-1 

 
commencing December 1, 2010, to the Person appearing on the bond registration books of the Trustee, as bond registrar (the “Bond Registrar”), as the Bondholder thereof on the
Record Date, which is the date as of the close of business on the fifteenth day of the calendar month preceding any Interest Payment Date (the “Record Date”), and shall be paid (i) by check mailed on the Interest Payment Date to such
Bondholder’s address as it appears on the registration books or at such other address as has been furnished to the Trustee as provided below, in writing by such Bondholder not later than the Record Date or (ii) upon written request, at
least three Business Days prior to the applicable Record Date of the Bondholder of Bonds aggregating not less than $1,000,000 in principal amount, by wire transfer in immediately available funds at an account maintained in the United States at such
wire address as such Bondholder shall specify in its written notice; 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 Bondholder in whose name any such Bonds are registered at the close of business on the fifth Business Day next preceding the date of payment of such defaulted interest. 

This Bond is a duly authorized issue of bonds of the Authority designated as “California Pollution Control Financing
Authority Revenue Bonds (San Jose Water Company Project) Series 2010A” (the “Bonds”), limited in aggregate principal amount as set forth above, issued pursuant to the provisions of Division 27 of the California Health and Safety Code
as amended and supplemented (the “Act”) and issued under and secured by the Indenture (as hereinafter defined). The Bonds are limited obligations of the Authority and, as and to the extent set forth in the Indenture, are payable solely
from, and secured by a pledge of and lien on, the Revenues. Proceeds from the sale of the Bonds will be loaned by the Authority to San Jose Water Company, a California corporation (the “Borrower”), under the terms of a Loan Agreement,
dated as of June 1, 2010 (the “Agreement”), between the Authority and the Borrower. The Bonds are all issued under and secured by and entitled to the benefits of an Indenture, dated as of June 1, 2010 (the “Indenture”),
between the Authority and the Trustee; all receipts of the Trustee credited under the provisions of the Indenture against such payments; and from any other moneys held by the Trustee under the Indenture for such purpose (all of the foregoing, the
“Revenues”), and there shall be no other recourse against the Authority or any property now or hereafter owned by it. 

Reference is hereby made to the Indenture and all indentures supplemental thereto for a description of the rights
thereunder of the registered Bondholders of the Bonds, of the nature and extent of the security, of the rights, duties and immunities of the Trustee and of the rights and obligations of the Authority thereunder, to all of the provisions of which
Indenture and of the Agreement the Holder of this Bond, by acceptance hereof, assents and agrees. 
 All terms
not herein defined shall have the meanings ascribed to them in the Indenture. 
 The Bonds are issuable as fully
registered bonds without coupons in Authorized Denominations of $5,000 or any integral multiple thereof. Subject to the limitations and upon payment of the charges, if any, provided in the Indenture, Bonds may be exchanged at the Corporate Trust
Office of the Trustee, for a like aggregate principal amount of Bonds of other Authorized Denominations of like maturity. 
  

 A-2 

 This Bond is transferable by the Bondholder hereof, in person, or by its
attorney duly authorized in writing, but only in the manner, subject to the limitations and upon payment of the charges provided in the Indenture, and upon surrender and cancellation of this Bond. Upon such transfer a new fully registered Bond or
Bonds, in an Authorized Denomination or Denominations, for the same aggregate principal amount, and of like maturity, will be issued to the transferee in exchange therefor. The Authority and the Trustee may treat the Bondholder hereof as the
absolute Bondholder hereof for all purposes, and the Authority and the Trustee shall not be affected by any notice to the contrary. 

Interest on the Bonds 

Interest on the Bonds shall be paid at the rate set forth above on each June 1 and December 1, commencing
December 1, 2010 (each, an “Interest Payment Date”); provided that if any Interest Payment Date is not a Business Day, such interest (and any principal due) shall be mailed or wired as provided above on the next succeeding Business
Day with the same effect as if made on the day such payment was due. Interest on the Bonds shall be computed upon the basis of a 360-day year, consisting of twelve 30-day months. The Bonds shall bear interest from and including the Date of Delivery
(as defined in the Indenture) until payment of the principal or redemption price thereof has been made or provided for, whether at maturity, upon redemption or otherwise. 

“Business Day” means any day other than (i) a Saturday, Sunday or legal holiday in the State of
California, (ii) a day on which commercial banks in New York, New York or the city or cities in which the Corporate Trust Office of the Trustee are located are authorized or required by law to close, or (iii) a day on which the New York
Stock Exchange is closed. 
 Optional Redemption of Bonds 

The Bonds shall also be subject to redemption, in whole or in part, on any date on or after June 1, 2020 at a
redemption price equal to 100% of the principal amount thereof, without premium, plus accrued interest to the date of redemption, if any. 

Mandatory Sinking Fund Redemption 

The Bonds are not subject to mandatory sinking fund redemptions. 

Mandatory Redemption Upon Invalidity 

In the event of a prepayment pursuant to Section 7.3(a) of the Agreement as a result of invalidity, the Bonds
Outstanding on the date of the occurrence of the invalidity shall be redeemed in whole at any time within 30 days thereafter, at a redemption price of 100% of the principal amount thereof, without premium, plus accrued interest to the date of
redemption. No redemption of the Bonds shall be made pursuant to any of the other redemption provisions of the Indenture following invalidity. 

Mandatory Redemption Upon a Determination of Taxability 

In the event of a prepayment pursuant to Section 7.3(b) of the Agreement as a result of a Determination of
Taxability, the Bonds Outstanding on the date of the occurrence of the Determination of Taxability shall be redeemed, in whole or in part, at any time within 30 days thereafter, at a redemption price of 100% of the principal amount thereof, without
premium, plus accrued interest to the date of redemption. No redemption of the Bonds shall be made pursuant to any of the other provisions of the Indenture following a Determination of Taxability. 

 

 A-3 

 The Holder of this Bond shall have no right to institute any suit, action or
proceeding at law or in equity, for any remedy under or upon the Indenture, except as provided in the Indenture. 

No recourse shall be had for the payment of the principal of, premium, if any, or interest on any of the Bonds or for any
claim based thereon or upon any obligation, covenant or agreement in the Indenture contained, against any past, present or future member, director, officer, employee or agent of the Authority, or through the Authority, or any successor to the
Authority, under any rule of law or equity, statute or constitution or by the enforcement of any assessment or penalty or otherwise, and all such liability of any such member, director, officer, employee or agent as such is hereby expressly waived
and released as a condition of and in consideration for the execution of the Indenture and the issuance of any of the Bonds. 

The Indenture contains provisions permitting the Authority and the Holders of not less than a majority in aggregate
principal amount of Bonds then Outstanding, to execute supplemental indentures, or add any provisions to, or change in any manner, or eliminate any of the provisions of, the Indenture; provided, however, that no such supplemental indenture,
alteration or modification shall (1) extend the fixed maturity of any Bond, or reduce the amount of principal thereof, or extend the time of payment, or change the method of computing the rate of interest thereon, or extend the time of payment
of interest thereon, without the consent of the Holder of each Bond so affected, or (2) reduce the aforesaid percentage of Bonds the consent of the Holders of which is required to effect any such modification or amendment, or permit the
creation of any lien on the Revenues and other assets pledged under the Indenture prior to or on a parity with the lien created by the Indenture, or deprive the Holders of the Bonds of the lien created by the Indenture on such Revenues and other
assets (except as expressly provided in the Indenture), without the consent of the Holders of all of the Bonds then Outstanding. Under certain circumstances described in the Indenture, the Trustee and the Authority may enter into a Supplemental
Indenture without consent of Holders. 
 The Indenture prescribes the manner in which it may be discharged and
after which the Bonds shall no longer be secured by or entitled to the benefits of the Indenture, except for the purposes of payment of the principal of and premium, if any, and interest on the Bonds as the same become due and payable, including a
provision that under certain circumstances the Bonds shall be deemed to be paid if certain securities, as defined in the Indenture, maturing as to principal and interest in such amounts and at such times as to insure the availability of sufficient
moneys to pay the principal of, premium, if any, and interest on such Bonds and all necessary and proper fees, compensation and expenses of the Trustee shall have been deposited with the Trustee. 

No member or officer of the Authority, nor any individual executing this Bond, shall in any event be subject to any
personal liability or accountability by reason of the issuance of the Bonds. 
  

 A-4 

 It is hereby certified that all of the conditions, things and acts required
to exist, to have happened and to have been performed precedent to and in the issuance of this Bond do exist, have happened and have been performed in due time, form and manner as required by the Constitution and statutes of the State of California.

 This Bond shall not be entitled to any benefit under the Indenture, or become valid or obligatory for any
purpose, until the certificate of authentication hereon endorsed shall have been manually signed by the Trustee. 
 [REST OF PAGE
INTENTIONALLY LEFT BLANK] 
  

 A-5 

 IN WITNESS WHEREOF, California Pollution Control Financing Authority has
caused this Bond to be executed in its name and on its behalf by the facsimile signature of its Chairman and its seal to be affixed hereto, all as of the above date. 
  

							
	[SEAL]	 		 	CALIFORNIA POLLUTION CONTROL FINANCING AUTHORITY
				
		 		 	By	 	  

		 		 		 	Chairman

 [FORM OF
TRUSTEE’S CERTIFICATE OF AUTHENTICATION] 
 Dated:
                    . 

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

 

			
	WELLS FARGO BANK, NATIONAL ASSOCIATION, as Trustee
		
	 By
	 	  

		 	Authorized Signature

Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York
corporation (“DTC”), to Issuer or its agent for registration of transfer, exchange, or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), 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. 
  

 A-6 

 [FORM OF ASSIGNMENT] 

For value received the undersigned do(es) hereby sell, assign and transfer unto
                                
                                         
            [name, address and tax i.d. number of transferee] the within-mentioned Registered Bond and do(es) hereby irrevocably constitute and appoint
                                        
                                         
    attorney, to transfer the same on the books of the Trustee with full power of substitution in the premises. 

Dated:             ,
         
  

			
	Note:	  	The signature(s) to this Assignment must correspond with the name(s) as written on the face of the within Registered Bond in every particular, without alteration or enlargement
or any change whatsoever.
		
	Note:	  	Signature(s) must be guaranteed by a guarantor institution participating in the Securities Transfer Agents Medallion Program or in such other guarantee program acceptable to the
Trustee.

  

 A-7 

 EXHIBIT B 

TRUSTEE AUDIT LETTER (Trustee Completes) 

[Name of Trust Officer] 
 Wells Fargo Bank,
National Association 
 333 Market Street,
18th Floor 

MAC A0119-181 
 San Francisco, CA 94105

 Attn: Corporate Trust Department 

Attn: 
  

							
	 1.
	  	Description of Bond Issue	  	 Principal

Amount

Issued
	  	 Bonds Outstanding as of

June 30 ,          or

December 30,         ,

as applicable

  

	2.	 The above information              agrees
             does not agree with our records. Please identify differences and documentation of details. 

 

	3.	 During the past six months, did the Borrower or Guarantor, if any, make all required payments to the Trustee at the proper time and in the manner
required by the Indenture? 

 Yes
              No              

 

	4.	 If the Borrower or Guarantor, if any, failed to make required payments, please attach copies of any correspondence between the Trustee and the
Borrower or Guarantor, if any, discussing the failure and any steps to correct such failure. 

  

	5.	 Has the Trustee received a copy of the latest annual financial statements of the Borrower or Guarantor, if any, within 120 days of the close of the
applicable fiscal year? 

 Yes
              No                Not Required
               Not Applicable              

 

	6.	 If required under the terms of the Indenture, has the Trustee received a certificate of an officer of the Borrower or Guarantor, if any, signed
within 120 days of the close of the fiscal year, stating whether there exists any default under the Loan Agreement, and if a default exists, what the default is, what steps have been or will be taken to correct the default?

 Yes
              No                 Not Required
             
  

 B-1 

	7.	 If a letter of credit or other credit enhancement supports this bond issue, will such letter of credit or other credit enhancement continue in full
force during the next 12 months? 

 Yes
               No                Not Applicable
             
  

	8.	 Has the Trustee received a copy of the Borrower’s annual rebate calculations prepared by or on behalf of the Borrower? Yes
               No                Not Applicable
             

 If no, and
the Trustee has any actual knowledge of why it did not receive such calculations, please explain on a separate page. 

Yes                No
               Not Applicable              

 

	9.	 Has the Trustee received a Final Project Completion Certificate from the Borrower? 

Yes                No
               Not Applicable              

 

	10.	 Has a Certificate of the Borrower been received stating that its Financial Statements have been completed? 

Yes                No
               Not Applicable              

 

	11.	 Has Borrower provided Project Fund Requisitions with accompanying invoices (if required), approved by the Borrower, to the Trustee?

 Yes             
  No                Not Applicable              

 

	12.	 Has Borrower provided Cost of Issuance Fund Requisitions with accompanying invoices (if required), approved by the Borrower to the Trustee?

 Yes             
  No                Not Applicable              

 

	13.	 Has the Trustee been notified by the Borrower of any conflicts that the Trustee may have as a result of other business dealings between the Trustee
and the Borrower and, if so, has the Trustee sent a letter to the Authority informing them about this matter? 

Yes                No
               Not Applicable              

 

	
	If you answered “No” to any of the above, please explain on a separate
paper.

  

 B-2 

									
	 By
	 	  
	 		  	 Date
	  	  

		 	 Authorized Signature
	 		  		  	
					
	 Title
	 	  
	 		  	 Phone No.
	  	  

 

 B-3 

 EXHIBIT C 

FORM OF PROJECT FUND REQUISITION 

REQUISITION FOR MONEY FROM THE PROJECT FUND 
  

			
	 To:
	  	 Wells Fargo Bank, National Association, as trustee

		  	 333 Market Street, 18th
 Floor

		  	 MAC A0119-181

		  	 San Francisco, CA 94105

		  	 Attn: Corporate Trust Department

		
	 Re:
	  	 California Pollution Control Financing Authority

Revenue Bonds

(San Jose Water Company Project)

		  	 Series 2010A (the “Bonds”)

		  	 Requisition No.     Project Fund

The undersigned, on behalf of San Jose Water Company (the “Borrower”), hereby requests payment, from the
Project Fund identified above for the Project identified above, the total amount shown below to the order of the payee or payees named below, as payment or reimbursement for costs incurred or expenditures made in connection with such Project. The
payee(s), the purpose and the amount of the disbursement requested are as follows and as stated in the attached invoice(s) (no payment to be made without an accompanying invoice): 

 

					
	 Payee
	    	 Purpose
	    	 Amount

	[name and address]	    		    	
		    		    	 Total $

The undersigned hereby certifies as follows: 

1. Of the payment requested, $         constitute costs that (A) were
preliminary expenditures (architectural, engineering, surveying, soil testing, costs of issuing the Bonds and similar costs paid with respect to the Project in an aggregate amount not exceeding 20% of the aggregate principal amount of the Bonds, but
do not include land acquisition, site preparation or similar costs incident to the commencement of construction) or (B) (i) were paid or incurred by the Borrower on or after 60 days prior to March 24, 2010 and were not placed in
service prior to December 16, 2008, (ii) have been used to finance the acquisition, construction, rehabilitation, renovation or improvement of land and buildings and the acquisition and installation of machinery and equipment constituting
a qualified water project, as defined in Section 142(a) of the Internal Revenue Code of 1986 (the “Code”) and Section 1.103-8(h) of the Treasury Regulations thereunder, 

 

 C-1 

 2 
  

 
all of which property other than land is of a character subject to the allowance for depreciation under Section 167 of the Code, and (iii) are chargeable to the capital account of the
Project or would be so chargeable either with a proper election by the Borrower or but for proper election by the Borrower to deduct such costs, within the meaning of Treasury Regulation 1.103-8(a)(1); and if any such payment is to be made to a
“related person” of the Borrower within the meaning of Section 147(a) of the Code, such payment represents only the actual out-of-pocket costs incurred by such related person in connection with the Project and does not include any
intercompany profits or payments for early completion. All of such costs are for items that are denominated “Good Costs”. 

2. Of the payment herein requested, $            
constitute costs not described in paragraph 1 and accordingly are denominated “Bad Costs.” The sum of all Bad Costs paid to date from proceeds of the Bonds, together with the amount of Bad Costs herein requisitioned, including all Bond
proceeds spent for costs of issuing such Bonds, does not exceed $            , which is 4% of the Bond proceeds and the earnings from investing and reinvesting such earnings, unless
this requisition is accompanied with an opinion of Bond Counsel allowing a greater amount of Bond proceeds to be spent for Bad Costs. 

3. Each obligation mentioned herein is described in Section 3.2 of the Loan Agreement relating to the Project, has
been properly incurred and is a proper charge against the Project Fund, and each item for which payment is requested is or was necessary in connection with the acquisition, construction, renovation, installation, improvement or equipping of the
Project. None of the items for which payment is requested has been reimbursed previously from the Project Fund, and none of the payments herein requested will result in a breach of the representations and agreements in Section 2.3 of the Loan
Agreement relating to the Project. At least 96% of the amount requisitioned, together with all amounts requisitioned to date, have in the aggregate been used to pay for or to reimburse the Borrower for expenditures properly allocable to Costs of the
Project. An invoice representing each item for payment as required by Section 3.2(c) of the Loan Agreement is attached hereto. 
  

 C-2 

 3 
  

 Terms which are used in this Requisition and not otherwise defined are used
as defined in the Indenture (as defined in the Tax Certificate). 
 Dated:
                     
  

			
	 SAN JOSE WATER COMPANY

		
	 By
	 	  

		 	 Authorized Representative

  

 C-3 

 EXHIBIT D 

FORM OF COSTS OF ISSUANCE FUND REQUISITION 

REQUISITION FOR MONEY FROM THE COSTS OF ISSUANCE FUND 
  

			
	 To:
	  	 Wells Fargo Bank, National Association, as trustee

		  	 333 Market Street, 18th
 Floor

		  	 MAC A0119-181

		  	 San Francisco, CA 94105

		  	 Attn: Corporate Trust Department

		
	 Re:
	  	 California Pollution Control Financing Authority

Revenue Bonds

(San Jose Water Company Project)

		  	 Series 2010A (the “Bonds”)

Requisition No.
                Account: Costs of Issuance Fund –              Account 

The undersigned, on behalf of San Jose Water Company (the “Borrower”), hereby requests payment, from the
Account of the Costs of Issuance Fund identified above, the total amount shown below to the order of the payee or payees named below, as payment or reimbursement for costs incurred or expenditures made in connection with the issuance of the Bonds.
The payee(s), the purpose and the amount of the disbursement requested are as follows and as stated in the attached invoice(s) (no payment to be made without an accompanying invoice): 

 

					
	 Payee
	    	 Purpose
	    	 Amount

	[name and address]	    		    	
		    		    	 Total $

The undersigned hereby certifies as follows: 

Each obligation mentioned herein is described in Section 3.2 of the Loan Agreement relating to the Project, has been
properly incurred and is a proper charge against the Costs of Issuance Fund, and each item for which payment is requested is or was necessary in connection with the issuance of the Bonds. None of the items for which payment is requested has been
reimbursed previously from the Costs of Issuance Fund, and none of the payments herein requested will result in a breach of the representations and agreements in Section 2.3 of the Loan Agreement relating to the Project. Invoices evidencing
each obligation mentioned herein are attached hereto. 
  

 D-1 

 Dated:
                     
  

			
	 SAN JOSE WATER COMPANY

		
	 By
	 	  

		 	 Authorized Representative

Attachment: Invoices for each listed obligation 
  

 D-2Loan Agreement - California Pollution Control Financing Authority

 Exhibit 10.3 

Execution Version 
  

 
 LOAN AGREEMENT 

between 

CALIFORNIA POLLUTION CONTROL FINANCING AUTHORITY 

and 
 SAN JOSE
WATER COMPANY 
 Dated as of June 1, 2010 

relating to 

$50,000,000 

California Pollution Control Financing Authority 

Revenue Bonds 

(San Jose Water Company Project) 

Series 2010A 
  

 

 TABLE OF CONTENTS 

 

			
	 	  	Page
	 ARTICLE I DEFINITIONS
	  	2
		
	 SECTION 1.1. Definition Of Terms
	  	2
	 SECTION 1.2. Number And Gender
	  	2
	 SECTION 1.3. Articles, Sections, Etc.
	  	2
		
	 ARTICLE II REPRESENTATIONS
	  	2
		
	 SECTION 2.1. Findings Of The Authority
	  	2
	 SECTION 2.2. Representations Of The Authority
	  	3
	 SECTION 2.3. Representations and Warranties Of The Borrower
	  	3
		
	 ARTICLE III CONSTRUCTION OF THE PROJECT; ISSUANCE OF THE BONDS
	  	5
		
	 SECTION 3.1. Agreement To Construct The Project; Modifications of the Project
	  	5
	 SECTION 3.2. Disbursements From The Project Fund; Disbursements From The Costs Of Issuance Fund
	  	6
	 SECTION 3.3. Establishment Of Completion Date; Obligation Of Borrower To Complete
	  	8
	 SECTION 3.4. Investment Of Moneys In Fund
	  	8
		
	 ARTICLE IV LOANS OF PROCEEDS; REPAYMENT PROVISIONS
	  	8
		
	 SECTION 4.1. Loan Of Bond Proceeds; Issuance Of Bonds
	  	8
	 SECTION 4.2. Repayment And Payment Of Other Amounts Payable
	  	9
	 SECTION 4.3. Unconditional Obligation
	  	10
	 SECTION 4.4. Assignment Of Authority’s Rights
	  	11
	 SECTION 4.5. Amounts Remaining In Funds
	  	11
		
	 ARTICLE V SPECIAL COVENANTS AND AGREEMENTS
	  	11
		
	 SECTION 5.1. Right Of Access To The Project
	  	11
	 SECTION 5.2. The Borrower’s Maintenance Of Its Existence; Assignments; Permitted Transfers Of The Project
	  	11
	 SECTION 5.3. Records And Financial Statements Of Borrower
	  	15
	 SECTION 5.4. Insurance
	  	15
	 SECTION 5.5. Maintenance And Repair; Taxes; Utility And Other Charges
	  	15
	 SECTION 5.6. Qualification In California
	  	16
	 SECTION 5.7. General Tax Covenants
	  	16
	 SECTION 5.8. Special Arbitrage Certifications; Rebate
	  	16

			
	 SECTION 5.9. Notice And Certificates To Trustee
	  	16
	 SECTION 5.10. Financing And Continuation Statements
	  	17
	 SECTION 5.11. Continuing Disclosure
	  	17
	 SECTION 5.12. Changes to the Project
	  	17
		
	 ARTICLE VI LOAN DEFAULT EVENTS AND REMEDIES
	  	18
		
	 SECTION 6.1. Loan Default Events
	  	18
	 SECTION 6.2. Remedies On Default
	  	19
	 SECTION 6.3. Agreement To Pay Attorneys’ Fees And Expenses
	  	20
	 SECTION 6.4. No Remedy Exclusive
	  	20
	 SECTION 6.5. No Additional Waiver Implied By One Waiver
	  	20
		
	 ARTICLE VII PREPAYMENT
	  	20
		
	 SECTION 7.1. Redemption Of Bonds With Prepayment Moneys
	  	20
	 SECTION 7.2. Option To Prepay Installments
	  	21
	 SECTION 7.3. Mandatory Prepayment
	  	21
	 SECTION 7.4. Amount Of Prepayment
	  	21
	 SECTION 7.5. Notice Of Prepayment
	  	22
		
	 ARTICLE VIII NON-LIABILITY OF AUTHORITY; EXPENSES; INDEMNIFICATION
	  	22
		
	 SECTION 8.1. Non-Liability Of Authority
	  	22
	 SECTION 8.2. Expenses
	  	22
	 SECTION 8.3. Indemnification
	  	23
		
	 ARTICLE IX MISCELLANEOUS
	  	24
		
	 SECTION 9.1. Notices
	  	24
	 SECTION 9.2. Severability
	  	24
	 SECTION 9.3. Execution Of Counterparts
	  	24
	 SECTION 9.4. Amendments, Changes And Modifications
	  	25
	 SECTION 9.5. Governing Law; Venue
	  	25
	 SECTION 9.6. Authorized Representative
	  	25
	 SECTION 9.7. Term Of The Agreement
	  	25
	 SECTION 9.8. Binding Effect
	  	25
	 SECTION 9.9. Survival Of Fee Obligation
	  	25
	 SECTION 9.10. Liability of Authority Limited to Revenues
	  	25
	 SECTION 9.11. Waiver of Personal Liability
	  	26
	 SECTION 9.12. Opinion of Bond Counsel
	  	26

  

 ii 

			
	 SECTION 9.13. Complete Agreement
	  	26
		
	 EXHIBIT A DESCRIPTION OF THE PROJECT
	  	A-1
	 EXHIBIT B LEASES RELATING TO THE PROJECT
	  	B-1
	 EXHIBIT C FINAL PROJECT COMPLETION CERTIFICATE
	  	C-1
	 EXHIBIT D FORM OF ANNUAL BORROWER CERTIFICATE
	  	D-1

  

 iii 

 LOAN AGREEMENT 

THIS LOAN AGREEMENT, dated as of June 1, 2010 (this “Agreement”) between CALIFORNIA POLLUTION CONTROL
FINANCING AUTHORITY, a public instrumentality and political subdivision of the State of California (the “Authority”), and SAN JOSE WATER COMPANY, a California corporation (the “Borrower”). 

W I T N E S S E T H: 

WHEREAS, the Authority is a public instrumentality and political subdivision of the State of California, created by the
California Pollution Control Financing Authority Act (constituting Division 27 of the Health and Safety Code of the State of California as now in effect and as it may from time to time hereafter be amended or supplemented) (the “Act”) and
authorized to finance the acquisition, construction, renovation, installation, improvement and equipping of water facilities constituting a “project” within the meaning of the Act, including those that will prevent the pollution of
drinking water or improve the quality of water or ensure the safe handling, recycling or disposal of materials that might otherwise be improperly disposed of; and 

WHEREAS, the Authority is further authorized to issue its bonds for the purpose of paying all or any part of the costs of
a project, and for any other authorized purpose; to acquire and hold property, including funds, project agreements and other obligations of any kind, and pledge, encumber or assign the same, or the revenues therefrom or any portion of such revenues,
or other rights, whether then owned or possessed, or thereafter acquired, for the benefit of the owners, and as security or additional security for any bonds or the performance of obligations under an indenture; to provide for the advance of bond
proceeds and other funds pursuant to project agreements as necessary to pay or reimburse for project costs; and to enter into loan agreements; and 

WHEREAS, the Borrower, has duly caused an application to be filed with the Authority for financial assistance to finance
the acquisition, construction, renovation, installation, improvement and equipping of certain water facilities that will prevent the pollution of drinking water or improve the quality of water or ensure the safe handling, recycling or disposal of
materials that might otherwise be improperly disposed of in the Cities of Cupertino, San Jose, Santa Clara, Campbell, Monte Sereno, Saratoga and Los Gatos and contiguous areas in the County of Santa Clara, California, as more particularly described
in Exhibit A hereto (the “Project”), which facilities qualify as a “project” under the Act; and 

WHEREAS, the Authority after due investigation and deliberation has adopted its resolutions approving said application
and authorizing the making of a loan to the Borrower for the financing of the acquisition, construction, renovation, installation, improvement and equipping of the Project at such locations during the term of the Bonds (described below); and

 WHEREAS, the Authority proposes to issue its California Pollution Control Financing Authority Revenue Bonds
(San Jose Water Company Project) Series 2010A (the “Bonds”), in the aggregate principal amount of $50,000,000, to finance a portion of the cost of the acquisition, construction, renovation, installation, improvement and equipping of the
Project upon the terms and conditions set forth herein; and 

 WHEREAS, the Authority will enter into an Indenture, dated as of
June 1, 2010 (the “Indenture”), with Wells Fargo Bank, National Association, as trustee (the “Trustee”), pursuant to which the Bonds will be issued; 

NOW, THEREFORE, for and in consideration of the premises and the material covenants hereinafter contained, the parties
hereto hereby formally covenant, agree and bind themselves as follows: 
 ARTICLE I 

DEFINITIONS 

SECTION 1.1. Definition Of Terms. Unless the context otherwise requires, the terms used in this Loan Agreement
shall have the meanings specified in Section 1.01 of the Indenture, as originally executed or as it may from time to time be supplemented or amended as provided therein. 

SECTION 1.2. Number And Gender. The singular form of any word used herein, including the terms defined in
Section 1.01 of the Indenture, shall include the plural, and vice versa. The use herein of a word of any gender shall include all genders. 

SECTION 1.3. Articles, Sections, Etc. Unless otherwise specified, references to Articles, Sections and other
subdivisions of this Loan Agreement are to the designated Articles, Sections and other subdivisions of this Loan Agreement as amended from time to time. The words “hereof,” “herein,” “hereby,” “hereunder” and
words of similar import refer to this Loan Agreement as a whole. The headings or titles of the several articles and sections, and the table of contents appended to copies hereof, shall be solely for convenience of reference and shall not affect the
meaning, construction or effect of the provisions hereof. 
 ARTICLE II 

REPRESENTATIONS 

SECTION 2.1. Findings of the Authority. The Authority makes the following findings: 

(a) On March 24, 2010, the Authority gave its preliminary approval for the financing of the Project. On
April 22, 2010, a public hearing with respect to the Bonds and the Project was held in accordance with the provisions of the Code. On May 26, 2010, the Authority adopted its resolution approving financing of the Project. 

(b)(i) The Borrower is a “participating party” as such term is defined in the Act; (ii) the Project
is a “project” as such term is defined in the Act; (iii) the loan to be made hereunder with the proceeds of the Bonds will promote the purposes of the Act by providing funds to finance the acquisition, construction, renovation,
installation, improvement and equipping of the Project; (iv) said loan is in the public interest, serves the public purposes and meets the requirements of the Act; and (v) the portion of such loan allocable to the Costs of the Project does
not exceed the total cost thereof as determined by the Borrower and approved by the Authority. 
  

 2 

 (c) No member of the Authority, or any officer or employee of the Authority
who participated in the making of this Loan Agreement, is financially interested (within the meaning of Government Code Section 1090) in the Borrower or in this Loan Agreement or the Indenture. 

SECTION 2.2. Representations of the Authority. The Authority makes the following representations as the basis for
its undertakings herein contained: 
 (a) The Authority is a public instrumentality and political subdivision of
the State of California. Under the provisions of the Act, the Authority has the power to enter into the transactions contemplated by this Loan Agreement and the Indenture and to carry out its obligations hereunder. By proper action, the Authority
has duly authorized the execution and delivery of this Loan Agreement and the Indenture and the performance of its obligations thereunder. 

(b) The representations of the Authority in the Tax Certificate are true and correct as of the date hereof (subject to
the qualifications set forth, and in reliance upon the sources of information described, in the Tax Certificate). 

(c) The Authority will issue the Bonds under, and the Bonds will be secured by, the Indenture, pursuant to which the
Authority’s interest in this Loan Agreement (except certain rights of the Authority to payment for fees and expenses and its rights to indemnification, inspection, enforcement; and consent and receipt of notices, certificates and opinions) will
be pledged to the Trustee as security for payment of the principal of, premium, if any, and interest on the Bonds, as provided in the Indenture. 

(d) The Authority has not pledged and will not pledge its interest in this Loan Agreement for any purpose other than as
provided in the Indenture. 
 (e) The Authority is not in default under any of the provisions of the laws of the
State of California, which default would affect its existence or its powers referred to in subsection (a) of this Section 2.2. 

SECTION 2.3. Representations and Warranties of the Borrower. The Borrower makes the following representations and
warranties as the basis for its undertakings herein contained: 
 (a) The Borrower is a corporation duly
organized and existing under the laws of the State of California, is in good standing in the State of California, has duly authorized, by proper action, the execution and delivery of this Loan Agreement and all other documents contemplated hereby to
be executed by the Borrower and has the power to enter into and consummate the transactions contemplated by this Loan Agreement and all other documents contemplated hereby to be executed by the Borrower. This Loan Agreement has been duly authorized,
executed and delivered by the Borrower. This Loan Agreement, when assigned to the Trustee pursuant to the Indenture, will constitute the legal, valid and binding agreement of 

 

 3 

 
the Borrower enforceable against the Borrower by the Trustee in accordance with its terms for the benefit of the Holders of the Bonds, and any rights of the Authority and obligations of the
Borrower not so assigned to the Trustee constitute the legal, valid, and binding agreement of the Borrower enforceable against the Borrower by the Authority in accordance with its terms; except in each case as enforcement may be limited by
bankruptcy, insolvency or other laws affecting the enforcement of creditors’ rights generally, by the application of equitable principles regardless of whether enforcement is sought in a proceeding at law or in equity and by public policy.

 (b) Neither the execution and delivery of this Loan Agreement, the consummation of the transactions
contemplated hereby, nor the fulfillment of or compliance with the terms and conditions hereof, conflicts with or results in a breach of any of the terms, conditions or provisions of the Borrower’s Articles of Incorporation or Bylaws or of any
material actions or of any material agreement or instrument to which the Borrower is now a party or by which it is bound, or constitutes a default (with due notice or the passage of time or both) under any of the foregoing. 

(c) No consent or approval of any trustee or holder of any indebtedness of the Borrower or any guarantor of indebtedness
of or other provider of credit or liquidity of the Borrower, and no consent, permission, authorization, order or license of, or filing or registration with, any governmental authority (except (i) with respect to any state securities or
“blue sky” laws or (ii) for the construction, use or operation of the Project which are expected by the Borrower to be obtained prior to the construction, use or operation of the Project) is necessary in connection with the execution
and delivery of this Loan Agreement or the consummation of any transaction herein contemplated, or the fulfillment of or compliance with the terms and conditions hereof, except as have been obtained or made and as are in full force and effect.

 (d) There is no action, suit, proceeding, inquiry or investigation, before or by any court or federal, state,
municipal or other governmental authority, pending, or to the knowledge of the Borrower, after reasonable investigation, threatened, against or affecting the Borrower or the assets, properties or operations of the Borrower which, if determined
adversely to the Borrower or its interests, would have a material adverse effect upon the consummation of the transactions contemplated by, or the validity of, this Loan Agreement, and the Borrower, to the best of its knowledge after reasonable
inquiry, is not in default (and no event has occurred and is continuing which with the giving of notice or the passage of time or both could constitute a default) with respect to any order or decree of any court or any order, regulation or demand of
any federal, state, municipal or other governmental authority, which default might have consequences that would materially and adversely affect the consummation of the transactions contemplated by this Loan Agreement. The Borrower enjoys the
peaceful and undisturbed possession of all of the premises upon which it is operating the Project, subject only to such rights of way, easements or other interests as do no materially and adversely affect the Borrower’s operation and use
thereof. 
 (e) The Costs of the Project are as set forth in the Tax Certificate dated the Date of Delivery and
have been determined in accordance with standard engineering/construction and accounting principles. All the information and representations in the Tax Certificate are true and correct as of the date thereof. 

 

 4 

 (f) Upon completion, the Project will consist of various equipment and
facilities described in Exhibit A. 
 (g) The Borrower has and will have title to or the right to use the
property comprising the Project sufficient to carry out the purposes of this Loan Agreement. 
 (h) All
certificates, approvals, permits and authorizations of applicable local governmental agencies, the State of California and the federal government which are necessary prior to the commencement of the construction, use or operation of the Project
either have been obtained and continue in force or are expected by the Borrower to be obtained prior to the construction, use or operation of the Project. 

(i) No event has occurred and no condition exists which would constitute an Event of Default (as defined in the
Indenture) or which, with the passage of time or with the giving of notice or both would become such an Event of Default. 

(j) To the best of the knowledge of the Borrower, no member, officer, or other official of the Authority has any
financial, ownership or managerial interest in the Borrower, any affiliate of the Borrower, this Loan Agreement or the Indenture or in the transactions contemplated by this Loan Agreement or the Indenture. 

(k) The Borrower and all Persons anticipated by the Borrower to be an owner or operator of the Project or a portion
thereof are engaged in operations within California that require financing pursuant to this Loan Agreement and the Act to aid and assist in the control, remediation or elimination of pollution of the environment of the State of California.

 (l) The Project constitutes a “project” and the Borrower is a “participating party,” as
such terms are defined in the Act. 
 (m) The Borrower is a “Small Business” as classified pursuant to
Title 13 Code of Federal Regulations, Part 121 (1994 edition) or (together with its affiliates) employs no more than 500 employees. 

(n) No disbursement to be paid or reimbursed from proceeds of the Bonds shall have been previously paid or reimbursed
from the proceeds of any other Governmental Obligation, whether issued by the Authority or any other party. 
 ARTICLE III

 CONSTRUCTION OF THE PROJECT; ISSUANCE OF THE BONDS 

SECTION 3.1. Agreement To Construct the Project; Modifications of the Project. 

(a) The Borrower agrees that it will acquire, construct, renovate, improve, install and equip, or complete the
acquisition, construction, renovation, improvement, installation and equipping of, the Project, and will acquire, construct, renovate, improve, install and equip all other facilities and real and personal property deemed necessary for the operation
of the Project, in accordance with the description of the Project prepared by the Borrower and approved by the Authority, including any and all supplements, amendments and additions or deletions thereto or

  

 5 

 
therefrom. The Borrower further agrees to proceed with due diligence to complete the Project within three years from the Date of Delivery. Except as otherwise permitted pursuant to this
Section 3.1 or Section 5.2(a)(iv), the Borrower also agrees that it will own the Project during the term of this Loan Agreement or, if shorter, the useful life of any component of the Project. The Borrower also agrees that it will operate
the Project (except such portion that is transferred to a Person other than a Participating Affiliate in accordance with Section 5.2) during the term of this Loan Agreement or, if shorter, the useful life of any component of the Project.

 (b) In the event that the Borrower desires to alter or change the Project described in Exhibit A
hereto, the Borrower must first obtain the consent of the Authority (which consent shall not be unreasonably withheld) to such changes. If the Authority consents to the proposed amendment or supplement, it will instruct the Trustee in writing to
consent to, such amendment or supplement to Exhibit A as shall be required to reflect such alteration or change to the Project upon receipt of: 

(i) a Certificate of the Borrower describing in detail the proposed changes and stating that they will not have the
effect of disqualifying the Project as facilities that may be financed pursuant to the Act; 
 (ii) a copy of
the form of amended or supplemented Exhibit A hereto approved by the Authority; and 
 (iii) an Approving
Opinion with respect to such proposed changes. 
 SECTION 3.2. Disbursements From The Project Fund;
Disbursements From The Costs Of Issuance Fund. 
 (a) The Borrower will authorize and direct the Trustee,
upon compliance with Section 3.03 of the Indenture, to disburse the moneys in the Project Fund to or on behalf of the Borrower only for the following purposes (and not for Costs of Issuance), subject to the provisions of Section 3.3
hereof: 
 (i) Payment to the Borrower of such amounts, if any, as shall be necessary to reimburse the Borrower
in full for all advances and payments made by it, at any time prior to or after the delivery of the Bonds, in connection with (A) the preparation of plans and specifications for the Project (including any preliminary study or planning of the
Project or any aspect thereof) and (B) subject to any limitation imposed by subsection (vi) hereof, the acquisition, construction, renovation, improvement, installation and equipping of the Project. 

(ii) If the Project includes the construction or rehabilitation of a building, payment for labor, services, materials and
supplies used by or furnished to the Borrower to improve the site and to acquire, construct, renovate, improve, install and equip the Project, as provided in the plans, specifications and work orders therefor; payment of the costs of acquiring,
equipping, constructing, and installing utility services or other related facilities; payment of the costs of acquiring all real and personal property deemed necessary to construct the Project; insurance during the construction period; and payment
of the miscellaneous expenses incidental to any of the foregoing items. 
  

 6 

 (iii) Payment of the fees, if any, of architects, engineers, legal counsel
and supervisors expended in connection with the acquisition, construction, renovation, improvement, installation and equipping of the Project. 

(iv) If the Project includes the construction of a building, payment of taxes including property taxes, assessments and
other charges, if any, that may become payable during the construction period with respect to the Project, or reimbursement thereof, if paid by the Borrower. 

(v) Payment of expenses incurred in seeking to enforce any remedy against any contractor or subcontractor in respect of
any default under a contract relating to the acquisition, construction, renovation, improvement, installation or equipping of the Project. 

(vi) Payment of any other Costs of the Project permitted by the Tax Certificate and the Act (including, without
limitation, interest accruing on the Bonds during the construction period of the Project and reimbursement to the Borrower of costs of financing the Costs of the Project, but not including any Costs of Issuance). 

All moneys remaining in the Project Fund after the Completion Date and after payment or provision for payment of all
other items provided for in the preceding subsections (i) to (vi), inclusive, of this Section, shall be used in accordance with Section 3.03 of the Indenture. 

Each of the payments referred to in this Section 3.2(a) shall be made upon receipt by the Trustee of a written
requisition in the form prescribed by Section 3.03 of the Indenture, signed by an Authorized Representative of the Borrower. 

(b) The Borrower will authorize and direct the Trustee, upon compliance with Section 3.04 of the Indenture, to
disburse the moneys in the Costs of Issuance Fund to or on behalf of the Borrower only for Costs of Issuance. Each of the payments referred to in this Section 3.2(b) shall be made upon receipt by the Trustee of a written requisition in the form
prescribed by Section 3.04 of the Indenture, signed by an Authorized Representative of the Borrower. 
 (c)
The Borrower acknowledges that it shall not submit any requisitions to the Trustee for the payment of Costs of the Project from the Project Fund or any account therein, or for the payment of Costs of Issuance from the Costs of Issuance Fund or any
account therein, unless it attaches to such requisition invoices evidencing each item requested for payment therein. In any instance where the requisition is for payment to the Borrower for reimbursement of costs previously paid, the Borrower shall
attach the original invoices and other documentation to describe the original expenditures which were paid. If the Project consists of elements, which are only partially financed by the Bonds, the invoice/description must specifically identify the
costs eligible for the tax-exempt financings to be paid from the Bonds. 
 (d) Prior to the Completion Date, the
Borrower may deliver a Request to the Authority to consent to the removal of a component of the Project that is no longer necessary for inclusion within the Project and the reasons therefore. If the Authority does not act within 30 days after
such Request is received, such consent shall be deemed to be given, after which the Borrower shall instruct the Trustee to apply a proportionate amount of moneys in the Project Fund as provided in Section 3.03 of the Indenture. 

 

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 SECTION 3.3. Establishment Of Completion Date; Obligation Of Borrower To
Complete. Upon the final disbursement from the Project Fund, an Authorized Representative of the Borrower, on behalf of the Borrower, shall evidence the Completion Date by providing a Final Project Completion Certificate, substantially in the
form attached hereto as Exhibit C, to the Trustee and the Authority. 
 At the time such certificate is
delivered to the Trustee, moneys remaining in the Project Fund (other than moneys relating to provisional payments permitted by Section 3.2), including any earnings resulting from the investment of such moneys, shall be used as provided in
Section 3.03 of the Indenture. 
 In the event the moneys in the Project Fund available for payment of the
Costs of the Project should be insufficient to pay the costs thereof in full, the Borrower agrees to pay directly, or to deposit in the Project Fund moneys sufficient to pay, any costs of completing the Project in excess of the moneys available for
such purpose in such Project Fund. The Authority makes no express or implied warranty that the moneys deposited in the Project Fund and available for payment of the Costs of the Project, under the provisions of this Loan Agreement, will be
sufficient to pay all the amounts which may be incurred for such Costs of the Project. The Borrower agrees that if, after exhaustion of the moneys in the Project Fund, the Borrower should pay, or deposit moneys in the Project Fund for the payment
of, any portion of the Costs of the Project pursuant to the provisions of this Section, it shall not be entitled to any reimbursement therefor from the Authority, the Trustee or the Holders of any of the Bonds, nor shall it be entitled to any
diminution of the amounts payable under Section 4.2 hereof. 
 SECTION 3.4. Investment Of Moneys In
Fund. Any moneys in any fund or account held by the Trustee shall, at the written request of an Authorized Representative of the Borrower, be invested or reinvested by the Trustee as provided in the Indenture. Such investments shall be held by
the Trustee and shall be deemed at all times a part of the fund or account from which such investments were made, and the interest accruing thereon, and any profit or loss realized therefrom, shall be credited or charged to such fund or account.

 ARTICLE IV 

LOANS OF PROCEEDS; REPAYMENT PROVISIONS 

SECTION 4.1. Loan Of Bond Proceeds; Issuance Of Bonds. The Authority covenants and agrees, upon the terms and
conditions in this Loan Agreement, to make a loan to the Borrower of the proceeds of the Bonds (conditioned on the receipt thereof by the Authority) for the purpose of financing the Costs of the Project and the Costs of Issuance. The Authority
further covenants and agrees that it shall take all actions within its authority to keep this Loan Agreement in effect in accordance with its terms. Pursuant to said covenants and agreements, the Authority will issue the Bonds upon the terms and
conditions contained in this Loan Agreement and the Indenture and will cause the Bond proceeds to be applied as provided in Article III of the Indenture. 
  

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 SECTION 4.2. Repayment And Payment Of Other Amounts Payable.

 (a) On or before each Bond Payment Date (as hereinafter defined), until the principal of, premium, if any, and
interest on, the Bonds shall have been fully paid or provision for such payment shall have been made as provided in the Indenture, the Borrower covenants and agrees to pay to the Trustee as a repayment on the loan made to the Borrower from Bond
proceeds pursuant to Section 4.1 hereof, a sum equal to the amount payable on the next Bond Payment Date as principal of and premium, if any, and interest on, the Bonds as provided in the Indenture (“Loan Repayments”). Such Loan
Repayments shall be made in federal funds or other funds immediately available at the Corporate Trust Office of the Trustee. The term “Bond Payment Date” as used in this Section shall mean any date upon which any amounts payable with
respect to the Bonds shall become due, whether upon redemption (including without limitation sinking fund redemption), acceleration, maturity or otherwise. 

Each Loan Repayment shall at all times be sufficient to pay the total amount of interest and principal (whether at
maturity or upon redemption or acceleration) and premium, if any, becoming due and payable on the Bonds on each Bond Payment Date; provided that once per year, on the third Business Day following the Bond Payment Date of each June, any amount held
by the Trustee in the Revenue Fund on the due date for a Loan Repayment hereunder shall be credited against the installment due on the next Bond Payment Date to the extent available for such purpose under the terms of the Indenture; and provided
further that if at any time the amounts held by the Trustee in the Revenue Fund are sufficient to pay all of the principal of and interest and premium, if any, on, the Bonds as such payments become due, the Borrower shall be relieved of any
obligation to make any further payments under the provisions of this Section. Notwithstanding the foregoing, if on any date the amount held by the Trustee in the Revenue Fund is insufficient to make any required payments of principal of (whether at
maturity or upon redemption (including without limitation sinking fund redemption) or acceleration) and interest and premium, if any, on, the Bonds as such payments become due, the Borrower shall forthwith pay such deficiency as a Loan Repayment
hereunder. 
 (b) The Borrower also agrees to pay (i) the acceptance fee and the annual fee of the Trustee
for its ordinary services rendered as trustee and their ordinary expenses incurred under the Indenture, as and when the same become due, (ii) the reasonable fees, charges and expenses (including reasonable legal fees and expenses) of the
Trustee, as bond registrar and paying agent, the reasonable fees of any other paying agent on the Bonds as provided in the Indenture, as and when the same become due, (iii) the reasonable fees, charges and expenses of the Trustee for the
necessary extraordinary services rendered by it and extraordinary expenses (including, but not limited to reasonable attorneys’ fees and expenses) incurred by it under the Indenture, as and when the same become due, (iv) the cost of
printing any Bonds required to be furnished by the Authority at the expense of the Authority, (v) the cost of printing and typesetting any preliminary official statement, official statement or other offering circular utilized in connection with
the sale or remarketing of any Bonds and any amendment or supplement thereto, (vi) the Authority’s Administrative Fee (as described in the Tax Certificate), either at the date of delivery or from time to time thereafter, and (vii) any
amounts required to be deposited in the Rebate Fund to comply with the provisions of Section 5.10 hereof and Section 6.06 of the Indenture and the payment of any rebate analyst. The Trustee’s compensation shall not be limited by any
provision of law regarding the compensation of a Trustee of an express trust. 
  

 9 

 (c) The Borrower also agrees to pay, (i) as soon as practicable after
receipt of request for payment thereof, all expenses required to be paid by the Borrower under the terms of the Bond Purchase Contract relating to the sale of the Bonds, executed by the Treasurer of the State, the Authority, Goldman,
Sachs & Co., as underwriter of the Bonds, and the Borrower (the “Bond Purchase Contract”); and (ii) all reasonable expenses of the Authority related to the Project which are not otherwise required to be paid by the Borrower
under the terms of this Loan Agreement; including, but not limited to, all Costs of Issuance, provided that the Authority shall have obtained the prior written approval of an Authorized Representative of the Borrower for any expenditures other than
those provided for herein or in the Bond Purchase Contract. 
 (d) The Borrower also agrees to pay fees and
expenses of independent certified public accountants necessary for the preparation of annual or other audits, reports or summaries thereof required by the Indenture or by the Authority, including a report of an independent certified public
accountant with respect to any fund established under the Indenture; and reasonable expenses of the Authority pursuant to Sections 44525 and 44548 of the California Health and Safety Code, and any agency of the State of California or any other
counsel selected by the Authority to act on its behalf in connection with the Bonds. 
 (e) In the event the
Borrower should fail to make any of the payments required by Subsections (a) through (d) of this Section, such payments shall continue as obligations of the Borrower until such amounts shall have been fully paid. The Borrower agrees to pay
such amounts, together with interest thereon, following a delinquency of 30 days until such amount and all interest thereon have been paid in full. Interest thereon shall be at the Default Rate. Interest on overdue payments required under subsection
(a) above shall be applied as provided in Sections 2.03, 5.02 and 5.03 of the Indenture. 
 SECTION 4.3.
Unconditional Obligation. The obligations of the Borrower to make the payments required by Section 4.2 hereof and to perform and observe the other agreements on its part contained herein shall be absolute and unconditional, irrespective
of any defense or any rights of set-off, recoupment or counterclaim it might otherwise have against the Authority, and during the term of this Loan Agreement, the Borrower shall pay all payments required to be made on account of the loan (which
payments shall be net of any other obligations of the Borrower) as prescribed in Section 4.2 and all other payments required hereunder, free of any deductions and without abatement, diminution or set-off. Until such time as the principal of,
premium, if any, sinking fund installments, if any, and interest on, the Bonds shall have been fully paid, or provision for the payment thereof shall have been made as required by the Indenture, the Borrower (i) will not suspend or discontinue
any payments provided for in Section 4.2 hereof; (ii) will perform and observe all of its other covenants contained in this Loan Agreement; and (iii) except as provided in Article VII hereof, will not terminate this Loan Agreement for
any cause, including, without limitation, the occurrence of any act or circumstances that may constitute failure of consideration, destruction of or damage to all or a portion of those facilities or equipment comprising the Project, commercial
frustration of purpose, any change in the tax or other laws of the United States of America or of the State of California or any political subdivision of either of these, or any failure of the Authority or the

  

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Trustee to perform and observe any covenant, whether express or implied, or any duty, liability or obligation arising out of or connected with this Loan Agreement or the Indenture, except to the
extent permitted by this Loan Agreement. 
 SECTION 4.4. Assignment Of Authority’s Rights. As
security for the payment of the Bonds, the Authority will assign to the Trustee the Authority’s rights under this Loan Agreement, including the right to receive payments hereunder (except the Retained Rights), and the Authority hereby directs
the Borrower to make the payments required hereunder (except such payments for expenses and indemnification) directly to the Trustee. The Borrower hereby assents to such assignment and agrees to make payments directly to the Trustee without defense
or set-off by reason of any dispute between the Borrower and the Authority or the Trustee. 
 SECTION 4.5.
Amounts Remaining In Funds. It is agreed by the parties hereto that after payment in full of (i) the Bonds, or after provision for such payment shall have been made as provided in the Indenture, (ii) the fees, charges and expenses
of the Trustee and paying agents in accordance with the Indenture, and (iii) all other amounts required to be paid under this Loan Agreement and the Indenture, any amounts remaining in any fund held by the Trustee under the Indenture (excepting
the Rebate Fund) shall be paid as provided in Section 10.01 of the Indenture. 
 ARTICLE V 

SPECIAL COVENANTS AND AGREEMENTS 

SECTION 5.1. Right Of Access To The Project. The Borrower agrees that during the term of this Loan Agreement, the
Authority, the Trustee and the duly authorized agents of any of them shall have the right at all reasonable times during normal business hours to enter upon the site of the Project to examine and inspect the Project; provided, however, that
reasonable notice shall be given to the Borrower prior to such examination or inspection. The rights of access hereby reserved to the Authority and the Trustee may be exercised only after such agent shall have executed release of liability and
secrecy agreements if requested by the Borrower in the form then currently used by the Borrower, and nothing contained in this Section or in any other provision of this Loan Agreement shall be construed to entitle the Authority or the Trustee to any
information or inspection involving the confidential trade or proprietary knowledge, expertise or know-how of the Borrower. 

SECTION 5.2. The Borrower’s Maintenance Of Its Existence; Assignments; Permitted Transfers Of The Project.

 (a) To the extent permitted by law, the Borrower covenants and agrees that during the term of this Loan
Agreement it shall: 
 (i) maintain its existence as a corporation, 

(ii) continue to maintain its status in good standing as either a California corporation or a foreign
corporation qualified to do business in the State of California, 
  

 11 

 (iii) not dissolve, sell or otherwise dispose of all or
substantially all of its assets, combine or consolidate with or merge into another entity, or permit one or more other entities to consolidate with or merge into it so that the Borrower is not the resulting or surviving entity, except if:

 (A)(1) such resulting or surviving entity or transferee, as the case may be, is a
Participating Affiliate or (2) five years shall have elapsed since the issuance of the Bonds; 

(B) such resulting or surviving entity or transferee, as the case may be, has executed and delivered to
the Authority and the Trustee an Assignment and Assumption Agreement which provides: (I) certifications and evidence that such resulting or surviving entity or transferee qualifies to do business in the State of California and is in good legal
standing, (II) an agreement by the surviving or resulting entity to pay and perform all of the obligations of the Borrower hereunder and under the Tax Certificate, and (III) representations by the surviving or resulting entity identical to the
representations set forth in Section 2.3 hereof; 
 (C) either
(x) after giving effect to such transaction, such resulting or surviving entity or transferee, as the case may be, would be permitted to incur at least $1.00 of additional Funded Debt such that after giving effect to the issuance thereof and to
the application of the proceeds thereof: (I) Consolidated Funded Debt shall not exceed
66 2/3% of Total Capitalization; and (II)
Consolidated Net Income Available for Interest Charges for any period of 12 consecutive calendar months within the 15 consecutive calendar months immediately preceding the issuance of such Funded Debt shall be equal to or exceed 175% of Pro Forma
Interest Charges; or (y) the credit rating on the Bonds, as determined by any Rating Agency then rating the Bonds, shall be no lower than the rating level of the Bonds immediately prior to the effective date of such dissolution, sale,
disposition, combination, merger or consolidation; and 
 (D) the Authority shall have
received an Approving Opinion with respect to such dissolution, sale, disposition, combination, merger or consolidation and an Opinion of Counsel to the effect that the surviving, resulting, or transferee Person is a “participating party”
as defined in the Act. 
 (iv) not sell, transfer, lease or otherwise dispose of, or permit
the sale, transfer, lease or disposal of, the Project or portion of the Project other than equipment that has reached the end of its useful life, except in accordance with any of the following subsections: 

(A) The Borrower may sell, transfer, lease or otherwise dispose of any portion of the Project to a
Participating Affiliate if the purchaser, transferee, lessee, operator or other recipient, as the case may be, has covenanted in a written instrument for the benefit of the Authority and the Borrower to comply with the instructions of the Borrower
issued for the purpose of assuring that the Project be operated in conformance with this Loan Agreement, the Act, the Tax Certificate and federal tax law; provided that nothing in the foregoing shall diminish the Borrower’s

  

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obligation to cause the Project to be operated in conformance with this Loan Agreement, the Act, the Tax Certificate and federal tax law, including without limitation, the operation of the sold,
transferred, disposed or leased portion of the Project. Any lease pursuant to the foregoing shall not permit sublease or assignment by the lessee unless such sublease or assignment would otherwise satisfy the requirements of this subsection.

 (B) The Borrower may sell, transfer or otherwise dispose of any portion of the Project that
constitutes equipment if (1) such sale, transfer or disposition is to or with a Participating Affiliate or (2) such equipment is replaced by the Borrower with equipment of equal or greater value and utility that is used in the same manner
and for the same purposes as the equipment so sold, transferred or otherwise disposed of, has a useful life at least equal to the remaining useful life of the equipment so sold, transferred or otherwise disposed of and is in the same location as the
equipment so sold, transferred or disposed of, to the extent identified in Exhibit A hereto and the Authority shall have received an Approving Opinion with respect to such replacement. 

(C) The Borrower may sell, transfer, lease or otherwise dispose of any portion of the Project to a Person
other than a Participating Affiliate, if, 
 (1) the purchaser, transferee, lessee, operator or
other recipient, as the case may be, has covenanted in a written instrument for the benefit of the Authority and the Borrower to comply with the instructions of the Borrower issued for the purpose of assuring that the Project be completed and
operated in conformance with this Loan Agreement, the Act, the Tax Certificate and federal tax law; provided that nothing in the foregoing shall diminish the Borrower’s obligation to cause the Project to be completed and operated in conformance
with this Loan Agreement, the Act, the Tax Certificate and federal tax law; 
 (2) the credit
rating on the Bonds, as determined by any Rating Agency then rating the Bonds, shall be no lower than the rating level of the Bonds immediately prior to the effective date of such sale, transfer, lease or disposition; and 

(3) the Authority shall have received (i) a certificate of good standing of the purchaser,
transferee, lessee or operator, as the case may be, from the California Secretary of State and Franchise Tax Board, (ii) a copy of the document evidencing such sale, transfer, lease or disposition, (iii) an Approving Opinion with respect
to such sale, transfer, lease or disposition, and (iv) an Opinion of Counsel to the effect that the surviving, resulting, or transferee Person is a “participating party” as defined in the Act. 

(b) Within 10 days after the consummation of the merger or other transaction described in Section 5.2(a)(iii) or
(a)(iv), the Borrower shall provide the Authority and the Trustee with (i) counterpart copies of the documents constituting the transaction, (ii) if required to be delivered hereunder, the items set forth in Section 5.2(a)(iii) or
(a)(iv), as the case may be, and (iii) a certificate of the Borrower stating that the such transaction complies with the provisions of Section 5.2(a)(iii) or (a)(iv), as the case may be. The Borrower shall give the Authority at least 30
days’ written notice prior to the effective date of any merger or other 
  

 13 

 
transaction described above, together with drafts of the documents of assumption and such other instruments (other than good standing certificates) as would be required to be delivered in
connection therewith. The Borrower agrees to provide such other information as the Authority may reasonably request in order to assure compliance with this Section 5.2(a). 

(c) Notwithstanding any other provisions of Section 5.2(a), the Borrower need not comply with any of the provisions
of Section 5.2(a) if, at the time of such merger, combination, sale or transfer of assets, dissolution or reorganization, the Bonds will be defeased as provided in Article X of the Indenture or in the case of a sale of less than all of the
assets acquired or constructed with proceeds of the Bonds, the Bonds will be defeased or retired in an amount proportional to the percentage of the original cost of such assets to the original net proceeds of the Bonds. The Borrower shall provide to
the Authority a certificate of the Borrower setting forth the calculations evidencing that the amount of Bonds defeased or retired is proportional to the percentage of the original cost of such assets to the original net proceeds of the Bonds.

 (d) The rights and obligations of the Borrower under this Loan Agreement may be assigned by the Borrower to
any Person in whole or in part, subject, however, to each of the following conditions: 
 (i) No assignment
other than pursuant to paragraph (a) of this Section shall relieve the Borrower from primary liability for any of its obligations hereunder, and in the event of any assignment not pursuant to paragraph (a) of this Section the Borrower
shall continue to remain primarily liable for the payments specified in Section 4.2 hereof and for performance and observance of the other agreements herein provided to be performed and observed by it. 

(ii) Any assignment from the Borrower under this subsection (d) shall retain for the Borrower such rights and
interests as will permit it to perform its obligations under this Loan Agreement, if applicable, and any assignee from the Borrower shall assume in writing the obligations of the Borrower hereunder to the extent of the interest assigned. 

(iii) The Borrower shall give the Authority 30 days’ prior written notice of any assignment under this subsection
(d), and shall, within 30 days after delivery thereof, furnish or cause to be furnished to the Authority and the Trustee a true and complete copy of each such assignment together with an instrument of assumption and an Opinion of Counsel
satisfactory to the Authority that the provisions of this Section 5.2(d) have been complied with. 

Notwithstanding the foregoing, the Borrower may assign (without the consent of the Authority) its entire interest in this
Loan Agreement without recourse and have no further liability for any obligations under this Loan Agreement if the consent of the Bondholders has been obtained directly or constructively pursuant to the terms of this Loan Agreement or the Indenture,
and the conditions of the foregoing subsection (d)(iii) are satisfied. 
 (e) The Borrower may undertake any
transaction not meeting the requirements of Section 5.2(a) or 5.2(d) if consented to in writing by the Authority. The Borrower must request any such written consents prior to undertaking any such transaction and provide to the Authority such
information, reports and documents relating to the transaction as 
  

 14 

 
the Authority may reasonably request. The Authority may respond to such request of the Borrower at any time within 45 days of such request. If the Authority has not responded to such request
within the 45-day period, the Authority will be deemed to have consented to such transaction. 
 (f) If a
merger, consolidation, sale or other transfer is effected as provided in this Section, all provisions of this Section shall continue in full force and effect and no further merger, consolidation, sale or transfer shall be effected except in
accordance with the provisions of this Section. 
 SECTION 5.3. Records And Financial Statements Of
Borrower. 
 (a) The Borrower covenants and agrees at all times to keep, or cause to be kept, proper books of
record and account, prepared in accordance with generally accepted accounting principles, in which complete and accurate entries shall be made of all transactions of or in relation to the business, properties and operations of the Borrower. Such
books of record and account shall be available for inspection by the Authority, the Trustee and the duly authorized agents of any of them at reasonable hours, under reasonable circumstances and after reasonable prior notice to the Borrower.

 (b) The Borrower further covenants and agrees, within 120 days after the end of each Fiscal Year, to furnish
to the Authority and the Trustee a Certificate of the Borrower stating that its financial statements have been completed and that no event which constitutes a Loan Default Event or which with the giving of notice or the passage of time or both would
constitute a Loan Default Event has occurred and is continuing as of the end of such Fiscal Year, or specifying the nature of such event and the actions taken and proposed to be taken by the Borrower to cure such default. 

SECTION 5.4. Insurance. The Borrower agrees to insure the Project or cause the Project to be insured during the
term of this Loan Agreement for such amounts and for such occurrences and subject to such deductibles and self-retentions, as are customary for similar facilities within the State of California, by means of policies issued by reputable insurance
companies qualified to do business in the State of California or through self-insurance. The Borrower agrees to deliver, upon request, to the Authority and the Trustee memorandum copies of the insurance policies or certificates of insurance covering
the Project, and the certification by an insurance consultant that the insurance on the Project meets the above requirements. 

SECTION 5.5. Maintenance And Repair; Taxes; Utility And Other Charges. The Borrower agrees to maintain the
Project, or cause the Project to be maintained, during the term of this Loan Agreement (i) in as reasonably safe condition as its operations shall permit, (ii) in good repair and in good operating condition, ordinary wear and tear
excepted, making from time to time all necessary repairs thereto and renewals and replacements thereof and (iii) in a manner consistent with State law, including, without limitation, the Act and all environmental laws. 

The Borrower agrees to pay or cause to be paid during the term of this Loan Agreement all taxes, governmental charges of
any kind lawfully assessed or levied upon the Project or any part thereof, including any taxes levied against any portion of the Project which, if 

 

 15 

 
not paid, will become a charge on the receipts from the Project prior to or on a parity with the charge thereon and the pledge or assignment thereof to be created therefrom or under this Loan
Agreement, all utility and other charges incurred in the operation, maintenance, use, occupancy and upkeep of any portion of the Project and all assessments and charges lawfully made by any governmental body for public improvements that may be
secured by a lien on the Project, provided that with respect to special assessments or other governmental charges that may lawfully be paid in installments over a period of years, the Borrower shall be obligated to pay only such installments as are
required to be paid during the term of this Loan Agreement. The Borrower may, at the Borrower’s expense and in the Borrower’s name, in good faith, contest any such taxes, assessments and other charges and, in the event of any such contest,
may permit the taxes, assessments or other charges so contested to remain unpaid during that period of such contest and any appeal therefrom unless by such nonpayment the Project or any part thereof will be subject to loss or forfeiture. 

The Borrower agrees to maintain all certificates, approvals, permits and authorizations described in Section 2.3(h)
necessary for the construction, as applicable, use or operation of the Project. 
 SECTION 5.6. Qualification
In California. The Borrower agrees that throughout the term of this Loan Agreement it, or any successor or assignee as permitted by 5.2, will be qualified to do business in the State of California. 

SECTION 5.7. General Tax Covenants. It is the intention of the parties hereto that interest on the Bonds shall be
and remain Tax-exempt, and to that end the Borrower and the Authority covenant to comply with all of their respective requirements in the Tax Certificate, in this Section and in Section 5.8 which are for the benefit of the Trustee and each and
every Holder of the Bonds. The Borrower’s obligations in the Tax Certificate are incorporated herein as if fully set forth herein. 

SECTION 5.8. Special Arbitrage Certifications; Rebate. The Borrower acknowledges that it has read Sections 5.05
and 6.06 of the Indenture and that it will comply with the requirements of those sections as if they were set forth in full in this Loan Agreement. The Borrower shall calculate, or cause to be calculated, its rebate liability at such times as are
required by Section 148(f) of the Code and any temporary, proposed or final Regulations as may be applicable to the Bonds from time to time. The Borrower shall provide to the Trustee and the Authority a copy of each calculation of rebate
liability prepared by or on behalf of the Borrower. 
 SECTION 5.9. Notice And Certificates To Trustee.
(1) The Borrower hereby agrees to provide the Authority and the Trustee with the following: 
 (a) On or
before June 15 and December 15 of each year during which any of the Bonds are Outstanding, commencing December 15, 2010, a Certificate of the Borrower that: (i) all payments required under this Loan Agreement have been made and
(ii) any applicable third party credit support will continue in full force during the succeeding twelve months, or explaining why not; 
  

 16 

 (b) Within 120 days of the end of its fiscal year, a Certificate of the
Borrower that it has complied with the requirements to make reports and provide financial statements pursuant to Section 5.3(b); 

(c) Promptly upon knowledge of an Event of Default, notice of such Event of Default, such notice to include a description
of the nature of such event and what steps are being taken to remedy such Event of Default; and 
 (d) On or
before December 15 of each year during which any of the Bonds are Outstanding, (i) a written disclosure of any significant change known to the Borrower which would adversely impact the Trustee’s ability to perform its duties under the
Indenture, or of any conflicts which may result because of other business dealings between the Trustee and the Borrower, and (ii) a representation of the Borrower that all certificates, approvals, permits and authorizations described in
Section 2.3(h) that are necessary for the construction, as applicable, use or operation of the Project continue in full force and effect, provided that with respect to any such certificate, approval, permit or authorization that must issue
without discretion on the part of the issuer thereof, the Borrower need only disclose the absence of such certificate, approval, permit or authorization and the Borrower’s plan to acquire it. 

(2) The Borrower agrees to provide the Authority and the Trustee the certificate set forth in Exhibit D hereto on
each June 15 commencing June 15, 2011. 
 SECTION 5.10. Financing And Continuation Statements.
The Borrower hereby agrees to file all financing and continuation statements required to be filed, if any, relating to the Bonds and their security and provide copies of such filings to the Trustee. In addition, the Borrower, on demand, will execute
and deliver one or more financing statements, chattel mortgages or other instruments, to evidence more effectively the security interest of Trustee and the Bondholders in the property subject to the lien of the Indenture. 

SECTION 5.11. Continuing Disclosure. The Borrower hereby covenants and agrees to comply with the continuing
disclosure requirements promulgated under S.E.C. Rule 15c2-12, as it may from time to time hereafter be amended or supplemented. Notwithstanding any other provision of this Loan Agreement, failure of the Borrower to comply with the requirements of
S.E.C. Rule 15c2-12, as it may from time to time hereafter be amended or supplemented, shall not be considered a Loan Default Event; however, the Trustee at the written request of the Holders of at least 25% aggregate principal amount of Outstanding
Bonds, shall, but only to the extent indemnified to its satisfaction from and against any cost, liability or expense of any kind whatsoever related thereto, including, without limitation, fees and expenses of its attorneys and advisors and
additional fees and expenses of the Trustee, or any Bondholder or beneficial owner of the Bonds may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the Borrower to
comply with its obligations pursuant to this Section 5.11. The Borrower acknowledges and agrees that the Authority shall have no liability with respect to these obligations. 

SECTION 5.12. Changes to the Project. The Borrower shall not make any changes to the Project or to the operation
thereof which would affect the qualification of the Project under the Act or impair the exemption from federal income taxation of the interest on the Bonds. 
  

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 ARTICLE VI 

LOAN DEFAULT EVENTS AND REMEDIES 

SECTION 6.1. Loan Default Events. Any one of the following which occurs and continues shall constitute a Loan
Default Event: 
 (a) failure of the Borrower to make any payment required by Section 4.2(a) hereof when
due; or 
 (b) failure of the Borrower to observe and perform any covenant, condition or agreement on its part
required to be observed or performed by this Loan Agreement other than as provided in (a), which continues for a period of 30 days after written notice delivered to the Borrower, which notice shall specify such failure and request that it be
remedied, given to the Borrower by the Authority or the Trustee, unless the Authority and the Trustee shall agree in writing to an extension of such time; provided, however, that if the failure stated in the notice cannot be corrected within such
period, the Authority and the Trustee will not unreasonably withhold their consent to an extension of such time if corrective action is instituted within such period and diligently pursued until the default is corrected; or 

(c) existence of an Event of Default under and as defined in Section 7.01(a), (b) or (c) of the Indenture;
or 
 (d) any representation or warranty of the Borrower set forth in Section 2.3 of this Loan Agreement at
the time made or deemed made is false in any material respect. 
 The provisions of subsection (b) of this
Section are subject to the limitation that the Borrower shall not be deemed in default if and so long as the Borrower is unable to carry out its agreements hereunder by reason of strikes, lockouts or other industrial disturbances; acts of public
enemies; orders of any kind of the government of the United States or of the State of California or any of their departments, agencies, or officials, or any civil or military authority; insurrections, riots, epidemics, landslides; lightning;
earthquake; fire; hurricanes; storms; floods; washouts; droughts; arrests; restraint of government and people; civil disturbances; wars; acts of terrorism; explosions; breakage or accident to machinery, transmission pipes or canals; partial or
entire failure of utilities; or any other cause or event not reasonably within the control of the Borrower; it being agreed that the settlement of strikes, lockouts and other industrial disturbances shall be entirely within the discretion of the
Borrower, and the Borrower shall not be required to make settlement of strikes, lockouts and other industrial disturbances by acceding to the demands of the opposing party or parties when such course is, in the judgment of the Borrower, unfavorable
to the Borrower. This limitation shall not apply to any default under subsections (a), (c) or (d) of this Section. 
  

 18 

 SECTION 6.2. Remedies On Default. Subject to Section 6.1 hereof,
whenever any Loan Default Event shall have occurred and shall be continuing, 
 (a) The Trustee, by written
notice to the Authority and the Borrower, shall declare the unpaid balance of the loan payable under Section 4.2(a) of this Loan Agreement to be due and payable immediately, provided that concurrently with or prior to such notice the unpaid
principal amount of the Bonds shall have been declared to be due and payable under the Indenture. Upon any such declaration such amount shall become and shall be immediately due and payable as determined in accordance with Section 7.01 of the
Indenture. 
 (b) The Trustee may have access to and may inspect, examine and make copies of the books and
records and any and all accounts, data and federal income tax and other tax returns of the Borrower; provided that the Trustee shall be obligated to protect the confidentiality of such information, except to the extent prohibited by State and
federal law, and to prevent its disclosure to the public, except the Authority. 
 (c) The Authority or the
Trustee may take whatever other action at law or in equity as may be necessary or desirable to collect the payments and other amounts then due and thereafter to become due or to enforce performance and observance of any obligation, agreement or
covenant of the Borrower under this Loan Agreement, provided, however, that acceleration of the unpaid balance of the loan payments is not a remedy available to the Authority. 

In case the Trustee or the Authority shall have proceeded to enforce its rights under this Loan Agreement and such
proceedings shall have been discontinued or abandoned for any reason or shall have been determined adversely to the Trustee or the Authority, then, and in every such case, the Borrower, the Trustee and the Authority shall be restored respectively to
their several positions and rights hereunder, and all rights, remedies and powers of the Borrower, the Trustee and the Authority shall continue as though no such action had been taken. 

The Borrower covenants that, in case a Loan Default Event shall occur with respect to the payment of any Loan Repayment
payable under Section 4.2(a) hereof, then, upon demand of the Trustee, the Borrower will pay to the Trustee the whole amount that then shall have become due and payable under said Section, with interest on the amount then overdue at the Default
Rate. The Default Rate shall be in effect following a delinquency of 30 days and shall remain in effect until such overdue amount has been paid. 

In case the Borrower shall fail forthwith to pay such amounts upon such demand, the Trustee shall be entitled and
empowered to institute any action or proceeding at law or in equity for the collection of the sums so due and unpaid, and may prosecute any such action or proceeding to judgment or final decree, and may enforce any such judgment or final decree
against the Borrower and collect in the manner provided by law the moneys adjudged or decreed to be payable. 

In case proceedings shall be pending for the bankruptcy or for the reorganization of the Borrower under the federal
bankruptcy laws or any other applicable law, or in case a receiver or trustee shall have been appointed for the property of the Borrower or in the case of any other similar judicial proceedings relative to the Borrower, or the creditors or property
of the Borrower, then the Trustee shall be entitled and empowered, by intervention in such proceedings or otherwise, to file and prove a claim or claims for the whole amount owing and unpaid pursuant to this Loan Agreement and, in case of any
judicial proceedings, to file such proofs of 
  

 19 

 
claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee allowed in such judicial proceedings relative to the Borrower, its creditors or its
property, and to collect and receive any moneys or other property payable or deliverable on any such claims, and to distribute such amounts as provided in the Indenture after the deduction of its reasonable charges and expenses to the extent
permitted by the Indenture. Any receiver, assignee or trustee in bankruptcy or reorganization is hereby authorized to make such payments to the Trustee, and to pay to the Trustee any amount due it for reasonable compensation and expenses, including
reasonable expenses and fees of counsel incurred by it up to the date of such distribution. 
 SECTION 6.3.
Agreement To Pay Attorneys’ Fees And Expenses. In the event the Borrower should default under any of the provisions of this Loan Agreement and the Authority or the Trustee should employ attorneys or incur other expenses for the
collection of the payments due under this Loan Agreement or the enforcement of performance or observance of any obligation or agreement on the part of the Borrower herein contained (other than litigation of disputes between the Authority and the
Borrower), the Borrower agrees to pay and indemnify the Authority or the Trustee for the reasonable fees of such attorneys and such other reasonable expenses so incurred by the Authority or the Trustee. 

SECTION 6.4. No Remedy Exclusive. No remedy herein conferred upon or reserved to the Authority or the Trustee is
intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Loan Agreement or now or hereafter existing at law or in equity or
by statute. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often
as may be deemed expedient. In order to entitle the Authority or the Trustee to exercise any remedy reserved to it in this Article, it shall not be necessary to give any notice, other than such notice as may be herein expressly required. The Trustee
and the Holders of the Bonds shall be considered third party beneficiaries for the purposes of enforcing the rights of the Authority and their own respective rights. 

SECTION 6.5. No Additional Waiver Implied By One Waiver. In the event any agreement or covenant contained in this
Loan Agreement should be breached by the Borrower and thereafter waived by the Authority or the Trustee, such waiver shall be limited to the particular breach so waived and shall not be deemed to waive any other breach hereunder. 

ARTICLE VII 

PREPAYMENT 

SECTION 7.1. Redemption Of Bonds With Prepayment Moneys. By virtue of the assignment of the rights of the
Authority under this Loan Agreement to the Trustee as is provided in Section 4.4 hereof, the Borrower agrees to and shall pay directly to the Trustee any amount permitted or required to be paid by it under this Article VIII. The Trustee shall
use the moneys so paid to it by the Borrower to redeem the Bonds on the date set for such redemption pursuant to Section 7.5 hereof. The Authority shall call Bonds for redemption as required by Article IV of the Indenture or as requested by the
Borrower pursuant to the Indenture or this Loan Agreement. 
  

 20 

 SECTION 7.2. Option To Prepay Installments. The Borrower shall have
the option to prepay in whole or in part the Loan Repayments required by Section 4.2(a) hereof by paying to the Trustee, for deposit in the Revenue Fund, the amount set forth in Section 7.4 hereof and to cause all or any part of the Bonds
to be redeemed at the time and at the price set forth in Section 4.01(4) of the Indenture. 
 SECTION 7.3.
Mandatory Prepayment. The Borrower shall have and hereby accepts the obligation to prepay in whole the Loan Repayments required by Section 4.2(a) of this Loan Agreement, together with interest accrued, but unpaid, thereon, to be used to
redeem all or a part of the Outstanding Bonds under any of the following circumstances: 
 (a) if and when as a
result of any changes in the Constitution of the United States of America or the California Constitution or as a result of any legislative, judicial or administrative action, this Loan Agreement shall have become void or unenforceable or impossible
of performance in accordance with the intention and purposes of the parties hereto, or shall have been declared unlawful; 

(b) if, due to the untruth or inaccuracy of any representation or warranty made by the Borrower in this Loan Agreement or
in connection with the offer and sale of the Bonds, or the breach of any covenant or warranty of the Borrower contained in this Loan Agreement or in the Tax Certificate, interest on the Bonds, or any of them, is determined not to be Tax-exempt to
the Holders thereof (other than a Holder who is a “substantial user” of the Project or a “related person” within the meaning of Section 147(a) of the Code) by either (i) an opinion of Bond Counsel addressed to the
Authority and the Trustee to the effect that interest on the Bonds, or any of them, is not, or, unless all or part of the Bonds are redeemed pursuant to Section 4.01(3) of the Indenture would not be, Tax-exempt, (ii) a final
administrative determination of the Internal Revenue Service or (iii) a judicial decision of a court of competent jurisdiction in a proceeding of which the Borrower received notice and was afforded an opportunity to participate in to the full
extent permitted by law. A determination or decision will be considered final for this purpose when all periods for administrative and judicial review have expired; or 

(c) if mandatory redemption is required by Section 4.01(2) or 4.01(3) of the Indenture. 

The amount payable by the Borrower in the event of a prepayment required by this Section shall be determined as set forth in
Section 7.4 and shall be deposited in the Revenue Fund. 
 SECTION 7.4. Amount Of Prepayment. In the
case of a prepayment of the entire amount due hereunder pursuant to Section 7.2 or 7.3 hereof, the amount to be paid shall be a sum sufficient, together with other funds and the yield on any securities deposited with the Trustee and available
for such purpose, to pay (1) the principal of all Bonds Outstanding on the redemption date specified in the notice of redemption, plus interest accrued and to accrue to the payment or redemption date of the Bonds, plus premium, if any, pursuant
to the Indenture, (2) all reasonable and necessary fees and expenses of the Authority, the Trustee and any paying agent accrued and to accrue through final payment of the Bonds and (3) all other liabilities of the Borrower accrued and to
accrue under this Loan Agreement. 
  

 21 

 In the case of partial prepayment of the Loan Repayments pursuant to
Section 7.2 or 7.3 hereof, the amount payable shall be a sum sufficient, together with other funds deposited with the Trustee and available for such purpose, to pay the principal amount of and premium, if any, and accrued interest on the Bonds
to be redeemed, as provided in the Indenture, and to pay expenses of redemption of such Bonds. All partial prepayments of the Loan Repayments shall be applied in inverse order of the due dates thereof. 

SECTION 7.5. Notice Of Prepayment. To exercise an option granted in or to perform an obligation required by this
Article VII, the Borrower shall give written notice, at least 15 days prior to the last day by which the Trustee is permitted to give notice of redemption pursuant to Section 4.03 of the Indenture, to the Authority and the Trustee specifying
the amount to be prepaid and the date upon which any prepayment will be made. If the Borrower fails to give such notice of a prepayment in connection with a mandatory redemption under this Loan Agreement, such notice may be given by the Authority,
by the Trustee or by any Holder or Holders of 10% or more in aggregate principal amount of the Bonds Outstanding. The Authority and the Trustee, at the request of the Borrower or any such Bondholders, shall forthwith take all steps necessary under
the applicable provisions of the Indenture (except that the Authority shall not be required to make payment of any money required for such redemption) to effect redemption of all or part of the then Outstanding Bonds, as the case may be, on the
earliest practicable date thereafter on which such redemption may be made under applicable provisions of the Indenture. 

ARTICLE VIII 

NON-LIABILITY OF AUTHORITY; EXPENSES; INDEMNIFICATION 

SECTION 8.1. Non-Liability Of Authority. The Authority shall not be obligated to pay the principal of, or premium,
if any, or interest on the Bonds, except from Revenues. The Borrower hereby acknowledges that the Authority’s sole source of moneys to repay the Bonds will be provided by the payments made by the Borrower pursuant to this Loan Agreement,
together with other Revenues, including investment income on certain funds and accounts held by the Trustee under the Indenture, and hereby agrees that if the payments to be made hereunder shall ever prove insufficient to pay all principal of, and
premium, if any, and interest on the Bonds as the same shall become due (whether by maturity, redemption, acceleration or otherwise), then upon notice from the Trustee, the Borrower shall pay such amounts as are required from time to time to prevent
any deficiency or default in the payment of such principal, premium or interest, including, but not limited to, any deficiency caused by acts, omissions, nonfeasance or malfeasance on the part of the Trustee, the Borrower, the Authority or any third
party. 
 SECTION 8.2. Expenses. The Borrower covenants and agrees to pay and to indemnify the Authority
and the Trustee against all costs and charges, including reasonable fees and disbursements of attorneys, accountants, consultants and other experts, incurred in good faith in connection with this Loan Agreement, the Bonds or the Indenture.

  

 22 

 SECTION 8.3. Indemnification. The Borrower releases the Authority and
the Trustee from, and covenants and agrees that neither the Authority nor the Trustee shall be liable for, and covenants and agrees, to the extent permitted by law, to indemnify and hold harmless the Authority and the Trustee and their members,
officers, employees and agents from and against, any and all losses, claims, damages, liabilities or expenses (including, without limitation, reasonable attorneys’ fees, litigation and court costs, amounts paid in settlement and amounts paid to
discharge judgments), of every conceivable kind, character and nature whatsoever (including, without limitation, federal and state securities laws) arising out of, resulting from or in any way connected with (1) the Project, or the conditions,
occupancy, use, possession, conduct or management of, or work done in or about the Project or the other facilities of the Borrower or its affiliates, or from the planning, design, acquisition, construction, rehabilitation, renovation, improvement,
installation or equipping of the Project or any part thereof; (2) the issuance, sale or resale of any Bonds or any certifications or representations made in connection therewith, the execution and delivery of this Loan Agreement, the Indenture
or the Tax Certificate or any amendment thereto and the carrying out of any of the transactions contemplated by the Bonds, the Indenture and this Loan Agreement; (3) the Trustee’s acceptance or administration of the trusts under the
Indenture, or the exercise or performance of any of its powers or duties under the Indenture or this Loan Agreement; (4) any untrue statement or alleged untrue statement of any material fact or omission or alleged omission to state a material
fact required to be stated or 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 by the Authority or any underwriter or
placement agent in connection with the sale of any Bonds or in any disclosure made by Borrower to comply with the requirements of S.E.C. Rule 15c2-12; (5) any violation of any Environmental Regulations or the release of any Hazardous Substance
from, on or near the Project or any other facilities of the Borrower or its affiliates; (6) the defeasance and/or redemption, in whole or in part, of the Bonds; or (7) any declaration of taxability of interest on the Bonds, or allegations
that interest on the Bonds is taxable or any regulatory audit or inquiry regarding whether interest in the Bonds is taxable; provided that with respect to indemnification of the Authority and its members, officers, employees and agents, such
indemnity shall not be required for damages that result from the gross negligence or willful misconduct on the part of the party seeking such indemnity and with respect to any other indemnified party, such indemnity shall not be required for damages
that result from the negligence or willful misconduct on the part of the party seeking such indemnity. The Borrower further covenants and agrees, to the extent permitted by law, to pay or to reimburse the Authority and the Trustee and their members,
officers, employees and agents for any and all costs, reasonable attorneys fees and expenses, liabilities or other expenses incurred in connection with investigating, defending against or otherwise in connection with any such losses, claims,
damages, liabilities, expenses or actions, except to the extent that the same arise out of the gross negligence or willful misconduct of the Authority and its members, officers, employees and agents claiming such payment or reimbursement or out of
the negligence or willful misconduct of the Trustee and its members, officers, employees and agents claiming such payment or reimbursement. The provisions of this Section and Section 4.2(b) shall survive any resignation or removal of the
Trustee, the retirement of the Bonds and the termination of this Loan Agreement. 
  

 23 

 ARTICLE IX 

MISCELLANEOUS 

SECTION 9.1. Notices. All notices, certificates or other communications shall be deemed sufficiently given on the
second day following the day on which the same have been mailed by certified mail, postage prepaid, addressed to the Authority, the Borrower or the Trustee, as the case may be, as follows, and such communications shall also be deemed sufficiently
given to the Trustee if sent by facsimile with confirmed receipt: 
  

			
	 To the Authority:
	  	 California Pollution Control

		  	 Financing Authority

		  	 915 Capitol Mall, Room 457

		  	 Sacramento, CA 95814

		  	 Attn: Executive Director

		  	 Fax Number: (916) 657-4821

		
	 To the Borrower:
	  	 San Jose Water Company

110 West Taylor Street

San Jose, CA 95110

Attn: Executive Vice President-Finance

Fax Number: (408) 279-7934

		
	 To the Trustee:
	  	 Wells Fargo Bank, National Association

333 Market Street, 18th Floor

MAC A0119-181

San Francisco, CA 94105

Attn: Corporate Trust Department

Fax Number: (415) 371-3400

Any notice given to the Borrower as provided above shall be deemed to have been given to any affiliate of the Borrower affected by such
notice. 
 A duplicate copy of each notice, certificate or other communication given hereunder by either the
Authority or the Borrower to the other shall also be given to the Trustee. The Authority, the Borrower and the Trustee may, by notice given hereunder, designate any different addresses to which subsequent notices, certificates or other
communications shall be sent. 
 SECTION 9.2. Severability. If any provision of this Loan Agreement shall
be held or deemed to be, or shall in fact be, illegal, inoperative or unenforceable, the same shall not affect any other provision or provisions herein contained or render the same invalid, inoperative, or unenforceable to any extent whatever.

 SECTION 9.3. Execution Of Counterparts. This Loan Agreement may be simultaneously executed in several
counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument; provided, however, that for purposes of perfecting a security interest in this Loan Agreement by the Trustee under Article 9 of the
California Uniform Commercial Code, only the counterpart delivered, pledged, and assigned to the Trustee shall be deemed the original. 
  

 24 

 SECTION 9.4. Amendments, Changes And Modifications. Except as
otherwise provided in this Loan Agreement or the Indenture, subsequent to the initial issuance of Bonds and prior to their payment in full, or provision for such payment having been made as provided in the Indenture, this Loan Agreement may not be
effectively amended, changed, modified, altered or terminated without the written consent of the Trustee, given in accordance with Section 6.07(b) of the Indenture. 

SECTION 9.5. Governing Law; Venue. This Loan Agreement shall be construed in accordance with and governed by the
Constitution and laws of the State applicable to contracts made and performed in the State. This Loan Agreement shall be enforceable in the State, and any action arising out of this Loan Agreement shall be filed and maintained in the Sacramento
County Superior Court, Sacramento, California, unless the Authority waives this requirement. 
 SECTION 9.6.
Authorized Representative. Whenever under the provisions of this Loan Agreement the approval of the Borrower is required or the Borrower is required to take some action at the request of the Authority, such approval or such request shall be
given on behalf of the Borrower by an Authorized Representative, and the Authority and the Trustee shall be authorized to act on any such approval or request and neither party hereto shall have any complaint against the other or against the Trustee
as a result of any such action taken. 
 SECTION 9.7. Term Of The Agreement. This Loan Agreement shall be
in full force and effect from the date hereof and shall continue in effect as long as any of the Bonds is Outstanding or the Trustee holds any moneys under the Indenture, whichever is later. All representations and certifications by the Borrower as
to all matters affecting the Tax-exempt status of the Bonds shall survive the termination of this Loan Agreement. 

SECTION 9.8. Binding Effect. This Loan Agreement shall inure to the benefit of and shall be binding upon the
Authority, the Borrower and their respective successors and assigns; subject, however, to the limitations contained in Section 5.2 hereof. 

SECTION 9.9. Survival Of Fee Obligation. The right of the Authority and the Trustee to receive any fees or be
reimbursed for any expenses incurred pursuant to this Loan Agreement, and the right of the Authority and the Trustee to be protected from any liability as provided in this Loan Agreement, shall survive the retirement of the Bonds and the termination
of this Loan Agreement. 
 SECTION 9.10. Liability of Authority Limited to Revenues. Notwithstanding
anything in this Loan Agreement or in the Bonds contained, the Authority shall not be required to advance any moneys derived from any source other than the Revenues and other assets pledged under the Indenture for any of the purposes in the
Indenture mentioned, whether for the payment of the principal of or interest on the Bonds or for any other purpose of the Indenture. Nevertheless, the Authority may, but shall not be required to, advance for any of the purposes hereof any funds of
the Authority which may be made available to it for such purposes. NEITHER THE FULL FAITH AND CREDIT NOR THE TAXING POWER OF THE STATE 

 

 25 

 
OF CALIFORNIA OR ANY POLITICAL SUBDIVISION THEREOF OR ANY LOCAL AGENCY IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF, PREMIUM, IF ANY, OR INTEREST ON THE BONDS. The Authority shall not be liable
for any costs, expenses, losses, damages, claims or actions, of any conceivable kind on any conceivable theory, under or by reason of or in connection with this Loan Agreement, the Bonds or the Indenture, except only to the extent amounts are
received for the payment thereof from the Borrower under this Loan Agreement; provided the Borrower shall not be required to pay the fees and expenses of the Authority’s counsel incurred in connection with the issuance of the Bonds. 

The Borrower hereby acknowledges that the Authority’s sole source of moneys to repay the Bonds will be provided by
the payments made by the Borrower to the Trustee pursuant to this Loan Agreement, together with investment income on certain funds and accounts held by the Trustee under the Indenture, and hereby agrees that if the payments to be made hereunder
shall ever prove insufficient to pay all principal (or redemption price) and interest on the Bonds as the same shall become due (whether by maturity, redemption, acceleration or otherwise), then upon notice from the Trustee, the Borrower shall pay
such amounts as are required from time to time to prevent any deficiency or default in the payment of such principal (or redemption price) or interest, including, but not limited to, any deficiency caused by acts, omissions, nonfeasance or
malfeasance on the part of the Trustee, the Borrower, the Authority or any third party, subject to any right of reimbursement from the Trustee, the Authority or any such third party, as the case may be, therefor. 

SECTION 9.11. Waiver of Personal Liability. No member, officer, agent or employee of the Authority or any
director, officer, agent or employee of the Borrower shall be individually or personally liable for the payment of any principal (or redemption price) or interest on the Bonds or any sum hereunder or under the Indenture be subject to any personal
liability or accountability by reason of the execution and delivery of this Loan Agreement; but nothing herein contained shall relieve any such member, director, officer, agent or employee from the performance of any official duty provided by law or
by this Loan Agreement. 
 SECTION 9.12. Opinion of Bond Counsel. The Borrower acknowledges and agrees to
comply with Section 11.14 of the Indenture. 
 SECTION 9.13. Complete Agreement. The parties agree
that the terms and conditions of this Loan Agreement supersede those of all previous agreements between the parties relative to the Bonds, and that this Loan Agreement, together with the documents referred to in this Loan Agreement, contains the
entire agreement relative to the Bonds between the parties hereto. 
 [REST OF PAGE INTENTIONALLY LEFT BLANK] 

 

 26 

 IN WITNESS WHEREOF, the California Pollution Control Financing Authority has
caused this Loan Agreement to be executed in its name and its seal to be hereunto affixed by its duly authorized officers, and the Borrower has caused this Loan Agreement to be executed in its name all as of the date first above written. 

 

							
		 		 	 CALIFORNIA POLLUTION CONTROL FINANCING     AUTHORITY

By Bill Lockyer, Chairman

				
		 		 	 By:
	 	 /s/    Bill Lockyer

		 		 		 	Deputy Treasurer
				
	 [SEAL]
	 		 		 	
				
		 		 	 By:
	 	 /s/    Michael Paparian

		 		 		 	Executive Director
			
		 		 	 SAN JOSE WATER COMPANY

				
		 		 	 By:
	 	 /s/    Angela Yip

		 		 		 	Authorized Representative

  

 S-1 

 EXHIBIT A 

DESCRIPTION OF THE PROJECT 

To the extent they will prevent the pollution of drinking water or improve the quality of water or ensure the safe
handling, recycling or disposal of materials that might otherwise be improperly disposed of, the Project will be comprised of (i) improvements to the structures and facilities that are integral to the supply of water throughout the water supply
system (the “Water System”), including the replacement of wells, storage tanks, reservoir, motor control center, pump motors, water treatment equipment and pump stations, (ii) improvements to the distribution system, including
replacement of existing distribution mains, and (iii) the acquisition of equipment for the Water System, including hydrants, meters and related installation, facility retirements and customer information system; all located in one or more of
the following areas: the Borrower’s certificated service area in portions of the Cities of San Jose, Santa Clara, Cupertino, Campbell, Saratoga, Monte Sereno and Los Gatos and contiguous areas in the County of Santa Clara, California.

  

 A-1 

 EXHIBIT B 

LEASES RELATING TO THE PROJECT 

None. 
  

 B-1 

 EXHIBIT C 

FINAL PROJECT COMPLETION CERTIFICATE 
  

					
	 To:
	  	 Wells Fargo Bank, National

      Association

333 Market Street, 18th Floor
 MAC
A0119-181
 San Francisco, CA 94105

Attn: Corporate Trust Department
	    	 California Pollution Control Financing

      Authority

915 Capitol Mall, Room 457
 Sacramento, CA 95814

 Attn: Executive Director

  

	RE:	  Final Project Completion Certification 

This Final Project Completion Certificate is being provided to you pursuant to the requirements of the Loan Agreement
between the Authority and the Borrower (as defined below) with respect to the Bonds (as defined below), whereon upon the final disbursement from the Project Fund relating to the below-referenced bonds, the Borrower shall have an Authorized
Representative of the Borrower, on behalf of the Borrower, evidence the Completion Date of the project by providing a certificate to the Trustee and the Authority stating the Costs of the Project to the date of this Final Project Completion
Certificate and the components of the Project as described in Exhibit A of the Loan Agreement (see attached). Such information is provided below. 

BOND INFORMATION 

Borrower Name (the “Borrower”): San Jose Water Company 

Project Name(s): Please list. 

Bond Name and Series: California Pollution Control Financing Authority Revenue Bonds (San Jose Water Company Project) Series 2010A (the
“Bonds”) 
 Bond Closing Date: June 16, 2010 

Bond Amount Issued: $50,000,000 

PROJECT INFORMATION 
  

			
	 Project Address:
	  	 (From Exhibit A of the Loan Agreement)

	 Project Commencement Date:
	  	
	 Project Completion Deadline:
	  	 (Contemplated per the Tax Agreement Section [            ]

	 Completion Date:
	  	 (Actual)

  

 C-1 

											
		 	BREAKDOWN OF EXPENDITURES OF BOND PROCEEDS	  	BREAKDOWN OF EXPENDITURE OF NON-BOND PROCEEDS	 	
	 Project Cost by Item
	 	 	 	 Amount
	  	 	 	 Amount
	 	 
	 (From the Tax Certificate and Agreement)
	 		 		  		 		 	
						
	 TOTAL:
	 		 	$	  		 	$	 	
		 		 	 	  		 	 	 	 
	 Amount of Bond Proceeds remaining in the Project Fund
	 		  	$	 		 	
		 		 		  	 	 		 	

 To the date hereof, the acquisition, construction, renovation, rehabilitation,
improvement, installation and equipping been conducted substantially in accordance with the plans, specifications and work orders therefor, and all labor, services, materials and supplies used in the acquisition, construction, renovation,
rehabilitation, improvement, installation and equipping have been paid or provided for. To the date hereof, all other facilities necessary in connection with the Project have been acquired, constructed, renovated, rehabilitated, improved, installed
and equipped in accordance with the plans and specifications and work orders therefor and all costs and expenses incurred in connection therewith have been paid or provided for. 

The Borrower certifies that all proceeds of the Bonds were spent on the Project and/or on costs of issuance of the Bonds.
The Project as described in Exhibit A included certain initial specifications, but contemplated variances of certain terms within specified parameters. Any such variances to the date hereof are described below: 

PROJECT VARIANCES (If Any): 
  

 
  

 
  

 
  

 
  

 
  

 
 This certificate is given
without prejudice to any rights of the Borrower against third parties for any claims or for the payment of any amount not then due and payable which obligation has been incurred at the date of this certificate or which may subsequently be incurred.

 I represent and warrant that I have full authority to execute this Final Project Completion Certificate on
behalf of the Borrower. I certify that the foregoing certification is true and correct. 
  

 C-2 

	
	 SAN JOSE WATER COMPANY

	
	  

	 Borrower’s Authorized Representative(s)

	
	 Attachments [Photos of completed project(s)]

  

 C-3 

 EXHIBIT D 

FORM OF ANNUAL BORROWER CERTIFICATE 

Wells Fargo Bank, National Association 

333 Market Street, 18th Floor 

MAC A0119-181 

San Francisco, CA 94105 

Attn: Corporate Trust Department 

California Pollution Control Financing Authority 

915 Capitol Mall, Room 457 

Sacramento, CA 95814 

Attn: Executive Director 
  

				
	 Description of Bond Issue
	  	Principal Amount Issued
	 California Pollution Control Financing Authority
	  	$	50,000,000
	 Revenue Bonds

(San Jose Water Company Project) Series 2010A
	  		

 Borrower – San Jose Water Company 

The following lists of items are required per the Loan Agreement for the above-referenced financing. Please signify compliance and send
this notice to the above-referenced participants. 
 1. Per section 5.8 of the Loan Agreement, Borrower is required to calculate
rebate liability. Section 5.8 reads, in part, as follows: 
 “...The Borrower shall calculate, or cause to be
calculated, its rebate liability at such times as are required by Section 148(f) of the Code and any temporary, proposed or final Regulations as may be applicable to the Bonds from time to time. The Borrower shall provide to the Trustee a copy
of each calculation of rebate liability prepared by or on behalf of the Borrower, which documentation shall be made available to the Authority upon request.” 

Borrower  ̈ has complied  ̈ has not
complied  ̈ is not yet required to comply  ̈ is no longer required to comply with this requirement. 

2. Per section 5.9(a) of the Loan Agreement, the Borrower is required to send a Certificate of the Borrower to the Authority and the
Trustee. Section 5.9(a) reads, in part, as follows: 
 “...On or before June 15 and December 15 of each
year any of the Bonds are Outstanding, commencing December 15, 2010, a Certificate of the Borrower that: (i) all payments required under this Loan Agreement have been made and (ii) any applicable third party credit support will
continue in full force during the succeeding twelve months, or explaining why not;” 
 Borrower  ̈
 has  ̈ has not complied with this requirement. 
  

 D-1 

 3. Per section 5.3(b) of the Loan Agreement, Borrower agrees to keep financial statements,
provide notice to the Authority and the Trustee certification they are complete and that no event which constitutes a loan default has occurred. Section 5.3(b) reads, in part, as follows: 

“...The Borrower further covenants and agrees, within 120 days after the end of each Fiscal Year, to furnish to the Authority and
the Trustee a Certificate of the Borrower stating that its financial statements have been completed and that no event which constitutes a Loan Default Event or which with the giving of notice or the passage of time or both would constitute a Loan
Default Event has occurred and is continuing as of the end of such Fiscal Year, or specifying the nature of such event and the actions taken and proposed to be taken by the Borrower to cure such default.” 

Borrower  ̈ has  ̈ has not complied with this requirement.

 4. Per section 5.9(d) of the Loan Agreement, the Borrower is required to send a Certificate of the Borrower to the Authority
and the Trustee. Section 5.9(d) reads, in part, as follows: 
 “...On or before December 15 of each year
during which any of the Bonds are Outstanding, (i) a written disclosure of any significant change known to the Borrower which would adversely impact the Trustee’s ability to perform its duties under the Indenture, or of any conflicts which
may result because of other business dealings between the Trustee and the Borrower, and (iii) a representation of the Borrower that all certificates, approvals, permits and authorizations described in the Section 2.3(h) that are necessary
for the construction, as applicable, use or operation of the Project continue in full force and effect, provided that with respect to any such certificate, approval, permit or authorization that must issue without discretion on the part of the
issuer thereof, the Borrower need only disclose the absence of such certificate, approval, permit or authorization and the Borrower’s plan to acquire it.” 

Borrower  ̈ has  ̈ has not complied with this requirement.

  

			
	If you answered “has not” to any of the above, please explain on a separate paper.	 	

 I represent and warrant that I have full authority to execute this certificate on behalf of the
Borrower. I certify that the foregoing certificate for the above-referenced financing is true and correct. 
  

									
	 By
	 	  
	 		 	 Date
	 	  

		 	 Authorized Borrower Representative
	 		 		 	
					
	 Title
	 	  
	 		 	 Phone No.
	 	  

 

 D-2

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