Document:

Bond Purchase Agreement

 Exhibit 10.4 

EXECUTION VERSION 

$50,000,000 

CALIFORNIA POLLUTION CONTROL FINANCING AUTHORITY 

REVENUE BONDS 

(SAN JOSE WATER COMPANY PROJECT) 

SERIES 2010A 

BOND PURCHASE CONTRACT 

June 9, 2010 
 The
Honorable Bill Lockyer 
 Treasurer of the State of California 

915 Capitol Mall, Room 261 
 Sacramento,
California 95814 
 California Pollution Control Financing Authority 

915 Capitol Mall, Room 457 
 Sacramento,
California 95814 
 Ladies and Gentlemen: 

The undersigned, Goldman, Sachs & Co., as underwriter (the “Underwriter”), hereby offers to enter into
this Bond Purchase Contract, including the appendices hereto (the “Purchase Contract”) with you, the Honorable Bill Lockyer, Treasurer of the State of California (the “State Treasurer”), the California Pollution Control Financing
Authority (the “Authority”) and San Jose Water Company (the “Borrower”), for the purchase by the Underwriter and the issuance and sale by the Authority of the Bonds specified below. This offer is made subject to acceptance by the
State Treasurer, the Authority and the Borrower prior to 11:59 p.m., California time, on the date hereof, and upon such acceptance this Purchase Contract shall be in full force and effect in accordance with its terms and shall be binding upon the
State Treasurer, the Authority, the Underwriter and the Borrower. Any capitalized term used herein and not otherwise defined shall have the meaning given such term as set forth in the Indenture hereinafter defined. 

1. Purchase and Sale. Upon the terms and conditions and upon the basis of the representations set forth herein,
the Underwriter hereby agrees to purchase, and the Authority hereby agrees to deliver to the Underwriter, all (but not less than all) of the $50,000,000 aggregate principal amount of California Pollution Control Financing Authority Revenue Bonds
(San Jose Water Company Project), Series 2010A (the “Bonds”) to be dated as of the date of delivery thereof, to bear interest at the rate of 5.10% per annum, to mature on June 1, 2040, and otherwise as more fully described in the
Indenture hereinafter defined. The purchase price for the Bonds shall be $50,000,000, representing the aggregate principal amount of the Bonds. Simultaneously with the delivery of the Bonds, a fee in the aggregate amount of $312,500 will be paid to
the Underwriter by the Borrower in connection with the Underwriter’s offering and sale of the Bonds to the public. 

 2. The Bonds. The Bonds will be issued under the provisions of the
California Pollution Control Financing Authority Act, commencing with Section 44500 of the California Health and Safety Code, as now in effect and as it may from time to time hereafter be amended or supplemented (the “Act”). The Bonds
shall be substantially in the form and subject to redemption as described in, and shall be issued and secured under and pursuant to the provisions of, an Indenture, dated as of June 1, 2010 (the “Indenture”), by and between the
Authority and Wells Fargo Bank, National Association, as trustee (the “Trustee”). The Bonds are secured by payments made by the Borrower to the Authority pursuant to a Loan Agreement, dated as of June 1, 2010 (the “Loan
Agreement”), by and between the Authority and the Borrower. The proceeds of sale of the Bonds will be loaned to the Borrower to and applied to (a) finance the Project (as such term is defined in the Indenture), and (b) pay certain
costs associated with the issuance of the Bonds. 
 3. Official Statement. The Authority and the Borrower
hereby ratify, confirm and approve of the use and distribution by the Underwriter prior to the date hereof of the Preliminary Official Statement relating to the Bonds (including the cover page and all appendices thereto), dated May 27, 2010,
together with any supplements thereto (the “Preliminary Official Statement”). The Authority and the Borrower shall deliver or cause to be delivered to the Underwriter a reasonable number of copies of the final Official Statement, dated the
date hereof, relating to the Bonds, together with any amendments and supplements thereto (the “Official Statement”), executed on behalf of the Authority by its Executive Director, with the approval thereof by the Borrower. The Underwriter
agrees to: (a) provide the Authority with final pricing information on the Bonds on a timely basis; (b) disseminate copies of the Official Statement including any supplements prepared by the Authority and the Borrower, and (c) take
any and all other actions necessary to comply with applicable Securities and Exchange Commission rules and Municipal Securities Rulemaking Board rules governing the offering, sale and delivery of the Bonds to ultimate purchasers. 

4. Representations, Warranties and Agreements of the Authority. The Authority, subject to the limitations provided
herein, warrants, represents to and agrees with the Underwriter with respect to the Bonds that: 
 (a) The
Authority is a public instrumentality and political subdivision of the State of California authorized under the Act to issue the Bonds and to exercise all rights and powers permitted under the Act; 

(b) The Authority has complied with the provisions of the Act and all other applicable laws, rules and regulations
necessary, and has the requisite power and authority, to (i) execute and deliver this Purchase Contract, the Indenture and the Loan Agreement (collectively, the “Legal Documents”), (ii) issue and deliver the Bonds as provided in
this Purchase Contract, and (iii) consummate the transactions on its part contemplated by, and perform its obligations under the Legal Documents; 

(c) By the adoption of its delegation resolution, dated May 26, 2010, and its final resolution, dated May 26,
2010 (collectively, the “Authorizing Resolution”), the Authority has duly authorized the distribution of the Preliminary Official Statement and the Official Statement, and approved the execution and delivery of, and the due performance by
the Authority of the obligations on its part contained in the Legal Documents and the Bonds and the consummation by the Authority of the transactions contemplated thereby and hereby; 

 

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 (d) When executed and delivered on the Closing Date (as hereinafter defined)
in accordance with the provisions of this Purchase Contract and assuming the due authorization, execution, and delivery by the other respective parties thereto, the Legal Documents and the Bonds will constitute valid and binding obligations of the
Authority enforceable against the Authority in accordance with their respective terms, except as their enforceability may be limited by reasons of bankruptcy, insolvency, reorganization or other laws generally affecting creditors’ remedies; the
application of equitable principles regardless of whether equitable remedies are sought; by provisions of California law governing claims against public agencies; and by matters of public policy; 

(e) To the best knowledge of the Authority, the execution and delivery by the Authority of the Legal Documents and the
Bonds and compliance with the terms thereof will not conflict with, or constitute a violation, breach of, or default under, any loan agreement, indenture, bond, note, resolution or any other agreement or instrument to which the Authority is a party
or by which it is bound, or any law or any rule, regulation, order or decree of any court or governmental agency or body having jurisdiction over the Authority or any of its activities or properties, or result in the creation or imposition of any
prohibited lien, charge or encumbrance of any nature whatsoever upon any of the property or assets of the Authority, which conflict, violation, breach, default, lien, charge or encumbrance would materially and adversely affect the transactions
contemplated hereby or which, in any way, would materially and adversely affect the validity of the Bonds or any of the Legal Documents; provided, however, that no representation is made regarding compliance with any federal or state securities or
“blue sky” laws; 
 (f) There is no action, suit, or proceeding at law or in equity before or by any
court, or any inquiry or investigation before or by any governmental agency, public board, or body, with respect to which service of process on the Authority has been completed or, to the best knowledge of the Authority, without independent
investigation, threatened against the Authority: (i) seeking to prohibit, restrain, or enjoin the execution and delivery of the Bonds by the Authority or the collection of revenues pledged or to be pledged to pay the principal of and interest
on the Bonds; (ii) contesting or seeking to affect the validity or enforceability of the Bonds or the Legal Documents; or (iii) contesting the power of the Authority to enter into, adopt, or perform its obligations under any of the
foregoing documents, wherein an unfavorable decision, ruling, or finding would materially and adversely affect the transactions contemplated hereby, or which would materially and adversely affect the validity of the Bonds or the Legal Documents;

 (g) No consent, approval, authorization, or other action by any governmental or regulatory authority having
jurisdiction over the Authority that has not been obtained is or will be required for the execution and delivery of the Bonds or the consummation by the Authority of the other transactions on its part contemplated by this Purchase Contract, except
as such may be required for the state securities or “blue sky” laws, for final filings or notice to the California Debt Limit Allocation Committee or the California Debt and Investment Advisory Commission, and for filings to be made to the
Internal Revenue Service on Form 8038; 
  

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 (h) To the best knowledge of the Authority, without independent
investigation, (i) the Authority is not in breach of or in default under (A) any applicable law or administrative regulation of the State of California or the United States or any applicable judgment or decree, or (B) any loan
agreement, indenture, bond, note, resolution, agreement, or other instrument to which the Authority is a party or is otherwise subject; and (ii) no event has occurred and is continuing which, with the passage of time or the giving of notice or
both, would constitute an event of default under any such instrument, which breach or default would materially and adversely affect the transactions contemplated hereby and by the Official Statement or which, in any way would materially and
adversely affect the validity of the Bonds or the Legal Documents; provided that no representation is made regarding compliance with any federal or state securities or “blue sky” laws; 

(i) As of the date hereof, the statements and information contained in the Official Statement under the captions
“THE AUTHORITY” and “ABSENCE OF MATERIAL LITIGATION,” (solely as it relates to the Authority) do not contain any untrue statement of a material fact or omit to state a material fact which is necessary to make the statements
therein, in the light of the circumstances under which they were made, not misleading; and 
 (j) The Authority
agrees to cooperate with the Underwriter and its counsel in endeavoring to qualify the Bonds for offering and sale under the securities or blue sky laws of such jurisdictions of the United States as the Underwriter may request; provided, however,
that the Authority will not be required to execute a consent to service of process or to qualify as a foreign corporation in connection with any such qualification in any jurisdiction in which it is not now so subject. 

Any certificate signed by any officer of the Authority and delivered to the Underwriter shall be deemed a representation
and warranty of the Authority to the Underwriter as to the statements made therein. 
 The execution and
delivery of this Purchase Contract by the Authority shall constitute a representation by the Authority to the Underwriter that the representations and warranties contained in this Section 4 are true as of the date hereof; provided, however,
that the Authority makes no representations or warranties as to the Borrower or any party to the agreements or instruments described herein other than the Authority and does not represent or warrant in any respect as to any of the statements,
information (financial or otherwise), action taken or to be taken, representations or certifications furnished, or to be made and furnished, by the Borrower or any parties to the agreements or instruments described herein other than the Authority in
connection with the execution and delivery of the Bonds or any such statements or information (financial or otherwise) contained in the Official Statement or the Legal Documents. Additionally, as to matters of law other than federal tax law the
Authority is relying on the advice of counsel to the Authority; and as to matters of federal tax law the Authority is relying on the advice of Bond Counsel (as hereinafter defined). 

No member of the governing body of the Authority, or any officer or employee of the Authority, shall be individually
liable for the breach of any representation, warranty, or agreement contained herein. 
  

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 5. Representations, Warranties and Agreements of Borrower. In order
to induce the State Treasurer, the Authority and the Underwriter to enter into the Purchase Contract, the Borrower hereby represents, warrants, covenants and agrees with each of such parties, as follows: 

(a) The Borrower is a corporation duly organized and in good standing under the laws of the State of California, and has
full power and authority to enter into this Purchase Contract, the Loan Agreement and the Continuing Disclosure Agreement, dated as of June 1, 2010 (the “Continuing Disclosure Agreement”), by and between the Trustee and the Borrower,
(collectively, the “Borrower Documents”) and to approve the Indenture, the Preliminary Official Statement, and the Official Statement, and to carry out and consummate all transactions contemplated by the Borrower Documents, the Indenture
and the Official Statement and by proper action has duly authorized the execution and delivery of the Borrower Documents and the approval of the Indenture, the Preliminary Official Statement and the Official Statement; 

(b) Each officer of the Borrower executing the Borrower Documents and approving the Indenture and the Official Statement
is duly and properly authorized to approve, execute, and deliver the same on behalf of the Borrower; 
 (c) All
information provided by the Borrower and all representations made by the Borrower in its application to the Authority are true and correct as of the date hereof. 

(d) The Indenture, the Preliminary Official Statement, and the Official Statement have been duly approved by the
Borrower; this Purchase Contract has been duly authorized, executed, and delivered by the Borrower; the Loan Agreement and the Continuing Disclosure Agreement, have each been duly authorized and, at the Closing, will have been duly executed and
delivered by the Borrower; and (i) the Loan Agreement, when assigned to the Trustee pursuant to the Indenture, will, to the extent of such assignment, constitute the valid and binding agreement of the Borrower with the Trustee enforceable
against the Borrower in accordance with its terms for the benefit of the Owners of the Bonds, and (ii) the Borrower Documents, to the extent that any rights of the Authority and obligations of the Borrower thereunder are not so assigned to the
Trustee, will constitute the valid and binding agreements of the Borrower enforceable against the Borrower in accordance with their respective terms; except as enforcement of each of the above-named documents may be limited by bankruptcy,
insolvency, moratorium, and other laws affecting the enforcement of creditors’ remedies and by the application of equitable principles, regardless of whether equitable remedies are sought, or matters of public policy; 

(e) Except as disclosed in the Official Statement, the Borrower is not in breach of or default under (i) any
applicable law or administrative regulation of the State of California or the United States or any applicable judgment or decree or (ii) any loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the Borrower
is a party or is otherwise subject, and no event has occurred and is continuing which, with the passage of time or the giving of notice or both, would constitute an event of default under any such instrument, which breach or default or event of
default could materially adversely affect the ability of the Borrower to repay the loan of the proceeds of the Bonds and perform its obligations under the Borrower Documents; 

 

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 (f) The execution and delivery of this Purchase Contract; the approval of
the Indenture, the Preliminary Official Statement, and the Official Statement; the execution and delivery of the Loan Agreement and the Continuing Disclosure Agreement at the Closing; the consummation of the transactions contemplated by, and the
fulfillment of or compliance with the terms and conditions of, the Borrower Documents will not conflict with or constitute a violation, breach of, or default (with due notice or the passage of time or both) under the Articles of Incorporation of the
Borrower, its Bylaws, or any applicable law or administrative rule or regulation, or any applicable court or administrative decree or order, or any indenture, mortgage, deed of trust, loan agreement, lease, contract or other agreement or instrument
to which the Borrower is a party or by which it or its properties are otherwise subject or bound, or result in the creation or imposition of any prohibited lien, charge or encumbrance of any nature whatsoever upon any of the property or assets of
the Borrower, which conflict, violation, breach, default, lien, charge or encumbrance might have consequences that would materially and adversely affect the consummation of the transactions contemplated by the Borrower Documents or the financial
condition, assets, properties or operations of the Borrower; 
 (g) No consent or approval of any trustee or
holder of any indebtedness of the Borrower, and no consent, permission, authorization, order or license of, or filing or registration with, any governmental authority (except in connection with “blue sky” laws) is necessary in connection
with (i) the execution and delivery of this Purchase Contract; (ii) the execution and delivery of the Loan Agreement and the Continuing Disclosure Agreement at the Closing; (iii) the approval of the Indenture and the Official
Statement; or (iv) the consummation of any transaction contemplated in the Borrower Documents, except as have been obtained or made and as are in full force and effect (or, in case of the Loan Agreement or the Continuing Disclosure Agreement,
will be obtained or made and will be in full force and effect at the Closing); 
 (h) Except as disclosed in the
Official Statement, there is no action, suit, proceeding, inquiry, or investigation before or by any court or federal, state, municipal or other government authority pending or, to the knowledge of the Borrower, 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, could have a material and adverse effect upon the consummation of the transactions contemplated by the performance of
or the validity of this Purchase Contract, the Loan Agreement, the Official Statement or the Continuing Disclosure Agreement, or the financial condition, assets, properties or operations of the Borrower; 

(i) The proceeds of the Bonds will be used in connection with the financing of a “project” as defined in the
Act, and as of the date hereof, the Borrower together with its affiliates is a “small business,” as defined in Section 8020 of Title 4 of the California Code of Regulations, and the Borrower together with its Participating Affiliates
is a “participating party” under the Act. 
 (j) The Borrower has all necessary power and authority to
conduct the business now being conducted by it and as contemplated by the Borrower Documents and the Official Statement to approve the Indenture, the Preliminary Official Statement, and the Official Statement; 

 

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 (k) The Borrower has obtained, or will obtain as soon as reasonably
practicable, the necessary governmental agency approvals, all variances from applicable zoning ordinances and all building permits and easements or licenses required for the completion and equipping of the Project, and such governmental agency
approvals, variances, permits, easements, and licenses constitute all approvals required to complete the Project, except as provided in the Official Statement. The Project is not subject to change by any administrative or judicial body so as to
materially affect such completion; 
 (l) The Borrower has not incurred any material liability, direct or
contingent, nor has there been any material adverse change in the financial position, results of operations or condition, financial or otherwise, of the Borrower from that shown in the Official Statement which has not heretofore been described in
writing to the Authority, the State Treasurer and the Underwriter, whether or not arising from transactions in the ordinary course of business; 

(m) As of the date hereof, the Official Statement (including any financial and statistical data contained in the Official
Statement) as amended or supplemented pursuant to this Purchase Contract, if applicable, does not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not misleading; provided that no representation is made as to the statements and information concerning the book-entry only system and contained under the captions, “THE
AUTHORITY,” “ABSENCE OF MATERIAL LITIGATION (solely as it relates to the Authority), “UNDERWRITING,” and “TAX MATTERS”; 

(n) The balance sheets of the Borrower as of December 31, 2009 and 2008 and the related statements of income and
cash flows for each of the three years in the period ended December 31, 2009, included in Appendix A to the Official Statement, present fairly the financial position of the Borrower as of December 31, 2009 and 2008, and the results of
operations and cash flows for each of the three years in the period ended December 31, 2009, and are in conformity with generally accepted accounting principles applied on a consistent basis, as required by generally accepted accounting
principles; 
 (o) The Borrower agrees to indemnify and hold harmless each of the State Treasurer, the Authority
and the Underwriter, and each person, if any, who controls (as such term is defined in Section 15 of the Securities Act of 1933, as amended) any of them and the trustees, officers, members, agents and employees of the Authority, the State
Treasurer and the Underwriter (collectively, the “Indemnitees”) against any and all losses, claims, damages, liabilities and expenses arising out of any statement or information in the Preliminary Official Statement (other than the
information contained under the captions “THE AUTHORITY,” and “ABSENCE OF MATERIAL LITIGATION” (solely as it relates to the Authority) and, in the case of the Underwriter, other than the information contained under the caption
“UNDERWRITING”) or in the Official Statement (other than the information contained under the captions “THE AUTHORITY,” and “ABSENCE OF MATERIAL LITIGATION” (solely as it relates to the Authority) and, in the case of the
Underwriter, other than the information contained under the caption “UNDERWRITING”) that is or is alleged to be untrue or incorrect in any material respect or the omission or alleged omission therefrom of any statement or information that
should be stated therein or that is necessary to make the statements therein not 
  

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misleading in any material respect or from the failure or alleged failure to register any security under the Securities Act of 1933, as amended, or to qualify any indenture under the Trust
Indenture Act of 1939, as amended, in connection with the public offering and sale of the Bonds. In case any claim shall be made or action brought against any Indemnitee based upon the Official Statement for which indemnity may be sought against the
Borrower, as provided above, such Indemnitee shall promptly notify the Borrower in writing setting forth the particulars of such claim or action and the Borrower shall assume the defense thereof, including the retaining of counsel reasonably
acceptable to such Indemnitee and the payment of all expenses. Any Indemnitee shall have the right at any time to retain separate counsel in any such action and to participate in the defense thereof but shall bear the fees and expenses of such
counsel unless (i) the Borrower shall have specifically authorized the retaining of such counsel, (ii) the Borrower has failed to assume the defense and employ counsel reasonably acceptable to the Indemnitee, (iii) the Attorney
General of the State of California assumes the defense of the Authority, or (iv) the parties to such suit include such Indemnitee, and the Borrower and such Indemnitee have been advised by such counsel that one or more legal defenses may be
available to it which may not be available to the Borrower or that representation of such Indemnitee and the Borrower by the same counsel would be inappropriate under applicable standards of professional conduct due to actual or potential differing
interests between them (in which case the Borrower shall not have the right to assume the defense of such action on behalf of such Indemnitee, but the Borrower shall not be liable for the fees and expenses of more than one counsel for such
Indemnitee) or the State Treasurer or any Indemnitee of the Authority or the State Treasurer; 
 (p) In order to
provide for just and equitable contribution in circumstances in which the indemnification provided for in Section 5(o) hereof is applicable but for any reason is held to be unavailable from the Borrower, the Borrower and the Underwriter shall
contribute to the aggregate losses, claims, damages and liabilities (including any investigation, legal, and other expenses incurred in connection with, and any amount paid in settlement of, any action, suit or proceeding or any claims asserted, to
which the Borrower and the Underwriter may be subject, but after deducting any contribution received by the Borrower from persons who control the Borrower within the meaning of the Securities Act of 1933, as amended, or from the authorized
representative of the Borrower who signed the Official Statement, who may also be liable for contribution) in such proportion that the Underwriter is responsible for that portion represented by the percentage that the underwriting fee set forth in
the Official Statement bears to the public offering price appearing thereon and the Borrower is responsible for the balance; provided, however, that no person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act of 1933, as amended) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this Section 5(p), each person, if any, who controls the Underwriter within the
meaning of the Securities Act of 1933, as amended, shall have the same rights to contribution as the Underwriter and each person, if any, who controls the Borrower within the meaning of the Securities Act of 1933, as amended, and the authorized
representative of the Borrower who shall have signed the Official Statement shall have the same rights to contribution as the Borrower. Any party entitled to contribution will, promptly after receipt of notice of commencement of any action, suit or
proceeding against such party in respect of which a claim for contribution may be made against another party or parties under this Section 5(p), notify such party or parties from whom contribution may be sought, but the omission to so notify
such party from whom contribution may be sought shall not relieve the party or parties from whom contribution may be sought from any other obligation it or they may have hereunder or otherwise than under this Section 5(p). No party shall be
liable for contribution with respect to any action or claim settled without its consent; 
  

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 (q) The Borrower confirms that the Preliminary Official Statement is
“final” (except as permitted under Rule 15c2-12 under the Securities Exchange Act of 1934 (the “Rule”)) and the Official Statement is “complete” as of its date within the meaning of the Rule. The use of the Official
Statement by the Underwriter is authorized by the Borrower; and 
 (r) The representations, warranties,
agreements and indemnities herein shall survive the Closing Date under the Purchase Contract and any investigation made by or on behalf of any Indemnitee of any matters described in or related to the transactions contemplated by this Purchase
Contract, the Official Statement, the Loan Agreement, the Indenture and the Continuing Disclosure Agreement. 

6. Closing. At 8:00 a.m., California time, on June 16, 2010, or at such other time or on such earlier or
later date as the Authority, the Borrower and the Underwriter mutually agree upon (the “Closing Date”), the Authority will deliver or cause to be delivered to the Underwriter, who shall deliver or cause to be delivered to The Depository
Trust Company in New York, New York (“DTC”) (or such other locations as may be designated by the Underwriter and approved by the Authority), the Bonds in book-entry form, duly executed and authenticated, and will deliver to the Underwriter
at the Law Offices of Leslie M. Lava, 207 Second Street, Suite A, Sausalito, California 94965 (or such other location as may be designated by the Underwriter and approved by the Authority), the other documents herein mentioned. The Underwriter will
pay the purchase price of the Bonds as set forth in Section 1 hereof by wire transfer to the order of the Trustee for the account of the Authority and will accept delivery of the Bonds as set forth below. This payment for and delivery of the
Bonds, together with the delivery of the documents, is herein called the “Closing” or the “Closing Date.” CUSIP identification numbers shall be printed on the Bonds; however, neither the failure to print CUSIP numbers on any Bond
nor any error with respect thereto shall constitute cause for a failure or refusal by the Underwriter to accept delivery of and pay for the Bonds on the Closing in accordance with the terms of this Purchase Contract. The Bonds shall be made
available to the Underwriter not less than one business day before the Closing for purposes of inspection. 

The Bonds shall be registered in the name of Cede & Co., as nominee of DTC and shall be in the form of a single
fully registered Bond for each maturity of the Bonds. The Authority acknowledges that the services of DTC will be used initially by the Underwriter in order to permit the issuance of the Bonds in book-entry form, and agrees to cooperate with the
Underwriter in employing such services. 
 7. Underwriter’s Conditions to Closing. The Underwriter
has entered into this Purchase Contract in reliance upon the representations and agreements of the Authority and the Borrower herein, the performance by the Authority and the Borrower of their respective obligations hereunder, both as of the date
hereof and as of the Closing Date, the opinions of counsel to the Authority and the Borrower. The Underwriter’s obligations under this Purchase Contract are and shall be subject to the following further conditions: 

(a) At the time of Closing, this Purchase Contract, the Indenture, the Loan Agreement and the Continuing Disclosure
Agreement shall each be in full force and effect as valid and binding agreements between or among the various parties thereto and said documents and the Official Statement shall not have been amended, modified or supplemented except as may have been
agreed to in writing by the Underwriter and there shall be in full force and effect such resolutions as, in the opinion of Leslie M. Lava, Esq. (“Bond Counsel”), shall be necessary in connection with the transactions contemplated hereby;

  

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 (b) The Bonds shall have been duly authorized, executed and authenticated in
accordance with the provisions of the Indenture; 
 (c) Between the date hereof and the Closing Date, the market
price or marketability, at the initial offering price set forth in the Official Statement, of the Bonds shall not have been materially adversely affected, in the reasonable judgment of the Underwriter (evidenced by a written notice to the Authority
and the Borrower, terminating the obligation of the Underwriter to accept delivery of and pay for the Bonds), after consultation with the Borrower, the Authority and the State Treasurer, by reason of any of the following: 

(1) Legislation shall have been enacted by the Congress of the United States or the Legislature of the
State of California or favorably reported thereto for passage by any committee to which such legislation has been referred for consideration or be pending before any such committee or shall have been recommended to the Congress of the United States
for passage by the President of the United States or recommended to the Legislature of the State of California for passage by the Governor of the State of California, or a decision shall have been rendered by a court of the United States, including
the Tax Court of the United States, or of the State of California, or a ruling or an official release shall have been made or a regulation shall have been proposed or made by the Treasury Department of the United States or the Internal Revenue
Service or other federal or State of California authority having jurisdiction over tax matters, with respect to federal or State of California taxation upon revenues or other income of the Authority or the Borrower or upon interest on obligations of
the general character of the Bonds, or other action or events shall have transpired that would, in the reasonable judgment of the Underwriter, have the purpose or effect, directly or indirectly, of changing the federal or State of California tax
consequences of any of the transactions contemplated in connection herewith and that in the reasonable judgment of the Underwriter, affects materially and adversely (i) the market price or marketability of the Bonds or (ii) the ability of
the Underwriter to enforce contracts for the sale of the Bonds; 
 (2) Legislation enacted or
introduced in the Congress or recommended for passage by the President of the United States, or a decision rendered by a court established under Article III of the Constitution of the United States or by the Tax Court of the United States, or an
order, ruling, regulation (final, temporary or proposed) or official statement issued or made by or on behalf of the Securities and Exchange Commission, or any other governmental agency having jurisdiction of the subject matter, to the effect that
obligations of the general character of the Bonds, or the Bonds, including any or all underlying arrangements, are not exempt from registration under the Securities Act of 1933, as amended, or that the Indenture is not exempt from qualification

  

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under the Trust Indenture Act of 1939, as amended, or suspending the use of the Official Statement or any amendment or supplement thereto or any proceeding for that purpose shall have been
initiated or threatened in any such court or by any such authority; 
 (3) The outbreak or
escalation of hostilities involving the United States, or the declaration by the United States of a national emergency or war, or the occurrence of any other national emergency or calamity relating to the effective operation of the government of or
the financial community in the United States beyond that in effect at the date hereof; 
 (4) The
declaration of a general banking moratorium by federal, New York or California authorities, or the general suspension of trading on any national securities exchange or any material disruption in securities settlement services; 

(5) The imposition by the New York Stock Exchange or other national securities exchange, or any
governmental authority, of any material restrictions not now in force with respect to the Bonds or obligations of the general character of the Bonds or securities generally, or the material increase of any such restrictions now in force, including
those relating to the extension of credit by, or the charge to the net capital requirements of, underwriters; 

(6) An order, decree or injunction of any court of competent jurisdiction, or order, ruling, regulation or
official statement by the Securities and Exchange Commission, or any other governmental agency having jurisdiction of the subject matter, issued or made to the effect that the issuance, offering or sale of obligations of the general character of the
Bonds, or the issuance, offering or sale of the Bonds, including any or all underlying obligations, as contemplated hereby or by the Official Statement, is or would be in violation of the federal securities laws as amended and then in effect;

 (7) The withdrawal or downgrading of the rating of the Bonds to less than “A” by
Standard and Poor’s or notice by Standard and Poor’s that it has such rating under review with negative implications; or 

(8) Any event occurring, or information becoming known which, in the reasonable judgment of the
Underwriter, makes untrue in any material respect any statement or information contained in the Official Statement, or has the effect that the Official Statement contains any untrue statement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; 

(d) At or prior to the Closing, the Underwriter shall receive the following documents with respect to the Bonds, in each
case satisfactory in form and substance to the Underwriter and Underwriter’s Counsel (as hereinafter defined): 

(1) Certified copies of the Authorizing Resolution and any other resolutions adopted by the Authority
which relate to the Bonds; 
  

 11 

 (2) The Indenture, the Loan Agreement and the Continuing
Disclosure Agreement, each duly executed and delivered by the respective parties thereto, together with such amendments, modification or supplements as may have been agreed to in writing by the Underwriter; 

(3) Copies of the Official Statement, executed by the Executive Director of the Authority or an authorized
representative thereof, with the approval thereof executed on behalf of the Borrower by an authorized representative thereof; 

(4) The unqualified approving opinion of Bond Counsel, dated the Closing Date and addressed to the
Authority, in substantially the form attached as Appendix B to the Official Statement, together with a reliance letter addressed to the Underwriter; 

(5) The supplemental opinion of Bond Counsel, dated the Closing Date and addressed to the Authority and
the Underwriter, in substantially the form attached hereto as Exhibit A; 
 (6) The unqualified
approving opinion of Special Tax Counsel, dated the Closing Date and addressed to the Authority, the Underwriter and Bond Counsel, in substantially the form attached as Appendix C to the Official Statement; 

(7) The supplemental opinion of Special Tax Counsel, dated the Closing Date and addressed to the Authority
and the Underwriter, in substantially the form attached hereto as Exhibit B; 
 (8) The opinion
of the Attorney General of the State of California, counsel to the Authority (“Authority Counsel”), addressed to the Authority, dated the Closing Date, in substantially the form attached hereto as Exhibit C; 

(9) Certificate of the Authority, dated the Closing Date, in substantially the form attached hereto as
Exhibit D; 
 (10) Copies of the Articles of Incorporation of the Borrower and a good standing
certificate of recent date, each certified by the Secretary of State; a good standing certificate of recent date for the Borrower certified by the Franchise Tax Board of the State and certified copies of the Borrower’s bylaws and resolutions or
unanimous written consents of the Board of Directors of the Borrower authorizing the execution and delivery of the Loan Agreement, the Continuing Disclosure Agreement and this Purchase Contract, approving the Indenture and the Official Statement
(and distribution thereof) and authorizing the distribution of the Preliminary Official Statement; 

(11) A certificate of an authorized representative of the Borrower acceptable to the Underwriter and the
Authority, dated the Closing Date, to the effect that: 
 (A) No litigation is pending or, to the
knowledge of such officer, threatened (i) to restrain or enjoin the issuance or delivery of any of the 
  

 12 

 
Bonds or the payments to be made by the Borrower under the Indenture or the Loan Agreement, (ii) in any way contesting or affecting the authority for the issuance or delivery of the Bonds or
the validity of the Bonds, the Indenture, the Loan Agreement, the Official Statement, the Continuing Disclosure Agreement or this Purchase Contract, or the resolutions of the Borrower relating to the financing of the Project and the Bonds, or
(iii) in any way contesting the corporate existence or powers of the Borrower; 
 (B) No
event has occurred since the date of the Official Statement which either makes untrue or incorrect in any material respect as of the Closing Date any statement or information contained in the Official Statement or is not reflected in the Official
Statement but should be reflected therein in order to make the statements and information contained therein not misleading in any material respect; provided that no representation is made as to the statements and information concerning the
book-entry only system and contained under the captions, “THE AUTHORITY,” “ABSENCE OF MATERIAL LITIGATION” (solely as it relates to the Authority), “UNDERWRITING,” and “TAX MATTERS”; 

(C) There has been no material adverse change in the business, properties or financial condition of the
Borrower from that shown in the Official Statement; and 
 (D) The representations and warranties
of the Borrower contained in this Purchase Contract are true and correct in all material respects as of the Closing Date as if made on and as of the Closing Date; 

(12) The opinion of counsel to the Borrower (“Borrower’s Counsel”), addressed to the
Authority, the Trustee and the Underwriter, dated the Closing Date, in substantially the form attached hereto as Exhibit E; 

(13) An opinion of counsel to the Trustee addressed to the Authority and the Underwriter, dated the
Closing Date, to the effect that: 
 (A) The Trustee is a national banking association with trust
powers and being qualified to accept and administer funds, duly created and lawfully existing under the laws of the United States of America and having the authority to exercise trust powers in the State of California; 

(B) The Trustee has duly authorized by all necessary corporate action the execution, delivery, and
performance of the Indenture; 
 (C) The Trustee has full power and corporate authority to accept
the duties and obligations imposed on it by the Indenture and to authenticate the Bonds and the full legal power and authority to own its properties and to carry on its business; 

 

 13 

 (D) Upon execution and delivery of the Indenture, by a duly
authorized officer of the Trustee, the Indenture will constitute the valid and binding agreement of the Trustee, enforceable against it in accordance with its terms, except as enforcement thereof may be limited by bankruptcy, insolvency, moratorium,
and other laws affecting the enforcement of creditors’ remedies generally and to the application of equitable principles, regardless of whether equitable remedies are sought; and 

(E) No authorization, consent or other order of any State of California or federal government authority or
agency having jurisdiction in the matter is required to be obtained by the Trustee for the valid authorization, execution, delivery and performance by the Trustee of the Indenture; 

(14) A certificate of the Trustee, dated the Closing Date, to the effect that: 

(A) The Trustee is the Trustee under the Indenture, relative to the issuance and delivery of the Bonds;

 (B) The Trustee is duly organized, validly existing, in good standing under the laws of the
United States of America, and has the authority to exercise trust powers in the State of California, and is empowered, authorized, and duly qualified to serve as trustee and registrar pursuant to the Indenture and the other documents relating to the
issuance of the Bonds; 
 (C) The Indenture and the Continuing Disclosure Agreement have been
duly executed, acknowledged, and delivered on behalf of the Trustee by an authorized officer; 

(D) The Bonds have been duly authenticated and delivered by the Trustee, acting as registrar pursuant to
the Indenture; 
 (E) The Trustee has received executed counterparts of the Indenture, the Loan
Agreement, the Tax Certificate and the Continuing Disclosure Agreement; and 
 (F) There is no
action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, governmental agency, public board or body, pending or to the best of the Trustee’s knowledge, threatened against the Trustee affecting the
existence of the Trustee or the titles of its officers to their respective offices or seeking to prohibit, restrain or enjoin the authentication of the Bonds by the Trustee, or contesting the powers of the Trustee or its authority to perform its
obligations under the Indenture, the Continuing Disclosure Agreement or the Bonds. 
 (15) An
agreed upon procedures letter from KPMG to the Underwriter in form and substance satisfactory to the Underwriter; 
  

 14 

 (16) An opinion of counsel to the Underwriter, addressed to
the Underwriter, dated the Closing Date, in form and substance satisfactory to the Underwriter; 

(17) The Tax Certificate and Agreement executed by the Authority and the Borrower in form and substance
acceptable to Bond Counsel and the Underwriter; 
 (18) An executed copy of the DTC Blanket
Letter of Representations; 
 (19) Evidence from Standard and Poor’s that the Bonds have
been rated “A”; 
 (20) Evidence of required filings with the California Debt and
Investment Advisory Commission and any other applicable governmental filings; 
 (21) The
engineering report of BECON Corporation in form and substance satisfactory to the Underwriter, Bond Counsel and Special Tax Counsel; and 

(22) Such additional legal opinions, certificates, proceedings, instruments and other documents as Bond
Counsel and Counsel to the Authority may reasonably request to evidence compliance by the Authority and the Borrower with legal requirements, the truth and accuracy, as of the time of Closing, of the representations contained herein and in the
Official Statement and the due performance or satisfaction by the Authority and the Borrower, at or prior to such time, of all agreements then to be performed and all conditions then to be satisfied. 

(e) All matters relating to this Purchase Contract, the Bonds and the offering and sale thereof, the Indenture, the Loan
Agreement and the consummation of the transactions contemplated by this Purchase Contract shall have been approved or waived by the Underwriter. 

8. Authority’s Conditions to Closing. The Authority’s obligations hereunder with respect to the Bonds
shall be subject to the following conditions: 
 (a) The performance by the Borrower of its obligations, to be
performed hereunder at or prior to the Closing; and 
 (b) No order, decree, injunction, ruling or regulation of
any court, regulatory agency, public board or body shall have been issued, nor shall any legislation have been enacted, with the purpose or effect, directly or indirectly, of prohibiting the offering, sale or issuance of the Bonds as contemplated
hereby or by the Official Statement. 
 (c) At or before the Closing, the Authority shall have received:

 (i) Executed counterparts of the Legal Documents; 

(ii) Duly executed originals or conformed copies, as may be determined by the Authority, of the letters,
documents, certificates and opinions referred to in Section 7(d) hereof and such other certificates, opinions and documents reasonably required by the Authority; and 
  

 15 

 (iii) Evidence of payment or provision for payment of the
fees of the State Treasurer as agent for sale, and the California Debt Limit Allocation Committee. 

In addition, not later than 10 days after the Closing, the Underwriter shall submit to the Authority the
report(s) required by Section 1899.532 of Article 4 of Subchapter 4 of Chapter 4 of Division 2 of Title 2 of the California Code of Regulations, in substantially the form attached hereto as Exhibit F. 

9. Supplements to Official Statement. Before the “End of Underwriting Period,” which will be deemed the
Closing Date unless notified otherwise by the underwriter prior to closing and in no event longer than 25 days after the Closing Date, (a) the Authority will not adopt any amendment of or supplement to the Official Statement to which the
Underwriter shall object in writing or which shall be disapproved by Underwriter’s counsel and (b) if any event relating to or affecting the Authority or the Borrower shall occur as a result of which it is necessary, in the opinion of
Underwriter’s counsel, after consultation with the Authority, to amend, or supplement the Official Statement in order to make the Official Statement not misleading in the light of the circumstances existing at the time it is delivered to the
initial purchasers of the Bonds, the Authority and the Borrower will forthwith prepare and furnish to the Underwriter a reasonable number of copies of an amendment of or supplement to the Official Statement (in form and substance satisfactory to
Underwriter’s counsel, and at the expense of the Borrower) which will amend or supplement the Official Statement so that it will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances existing at the time the Official Statement is delivered to the initial purchasers of the Bonds, not misleading. For the purposes of this section, the Authority and the Borrower will each furnish
such information with respect to themselves as the Underwriter may from time to time request. 
 10.
Expenses. (a) The Underwriter shall be under no obligation to pay, and the Borrower, pursuant to this Purchase Contract, shall pay all expenses and costs incident to the performance by the Authority of its obligations in connection with
the authorization, issuance and delivery of the Bonds to the Underwriter. The Borrower shall pay all costs of issuance associated with the Bonds including the costs of preparing the Preliminary Official Statement and the Official Statement (and any
amendment or supplement prepared pursuant to this Purchase Contract); and the fees and expenses of Bond Counsel, Authority Counsel, Borrower’s Counsel and Underwriter’s Counsel, any or all of which may be paid out of Bond proceeds;
provided however that the Borrower’s obligations hereunder will not be limited by the availability of Bond proceeds. 

(b) The Borrower shall pay all expenses reasonably incurred by the Underwriter in connection with the offering and
distribution of the Bonds, including but not limited to: (i) all advertising expenses in connection with the offering of the Bonds; (ii) all reasonable out-of-pocket disbursements and expenses incurred by the Underwriter in connection with
the offering and distribution of the Bonds; (iii) the fees payable to the California Debt and Investment Advisory Committee; and (iv) the costs of ordering CUSIP numbers and qualifying the Bonds with DTC. 

 

 16 

 11. Notices. Any notice or other communication to be given under this
Purchase Contract: 
 (a) To the State Treasurer may be given by delivering the same in writing to the Treasurer
of the State of California, 915 Capitol Mall, Room 261, Sacramento, California 95814; 
 (b) To the Authority
may be given by delivering the same in writing to the California Pollution Control Financing Authority, 915 Capitol Mall, Room 457, Sacramento, California 95814, Attention: Executive Director; 

(c) To the Underwriter may be given by delivering the same in writing to Goldman, Sachs & Co., 200 West St.,
33rd Floor, New York, New York 10282, Attention: R. Thornton Lurie, Managing Director; and 
 (d) To the
Borrower may be given by delivering the same in writing to San Jose Water Company, 110 West Taylor Street, San Jose, California 95110, Attention: Executive Vice President - Finance. 

All notices or communications hereunder by any party shall be given and served upon each other party. The approval of the
Underwriter when required hereunder or the determination of satisfaction as to any document referred to herein shall be in writing signed by the Underwriter and delivered to the party requesting such approval or determination of satisfaction.

 12. Parties In Interest; Survivability of Representations, Warranties and Agreements. This Purchase
Contract shall be binding upon and inure solely to the benefit of each of the State Treasurer, the Authority, the Underwriter, and the Borrower and, to the extent set forth herein, persons controlling any of such parties, and their respective
trustees, officers, members, employees, agents and personal representatives, successors and assigns, and no other person or firm shall acquire or have any right under or by virtue of this Purchase Contract. All representations, warranties and
agreements of the Authority, the Underwriter, and the Borrower in this Purchase Contract shall remain operative and in full force and effect regardless of any investigation made by or on behalf of the Underwriter and shall survive the delivery of
and payment for the Bonds. 
 13. Representations, Warranties and Agreements of Underwriter. The
Underwriter represents and warrants to and agrees with the Authority and the State Treasurer that it is authorized to take any action under this Purchase Contract required to be taken by it and that this Purchase Contract is a binding contract of
the Underwriter enforceable against the Underwriter in accordance with its terms. The Underwriter also represents that all information in the Official Statement under the heading “UNDERWRITING” was as of its date and is as of the date
hereof true, accurate and correct. 
  

 17 

 14. Execution in Counterparts. This Purchase Contract may be executed
by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument. 

15. Governing Law. This Purchase Contract shall be governed exclusively by and construed in accordance with the
applicable laws of the State applicable to contracts made and performed in the State. This Purchase Contract shall be enforceable in the State and any action arising out of this Purchase Contract shall be filed with and maintained in Sacramento
County Superior Court, Sacramento County, California, unless the Authority waives this requirement in writing. 
 [Signature
Page of Bond Purchase Contract Follows] 
  

 18 

 The parties agree that the terms and conditions of this Purchase Contract
supersede those of all previous agreements between the parties with respect to the subject matter hereof, and that this Purchase Contract contains the entire agreement between the parties hereto with respect to such subject matter. 

 

	
	 Very truly yours,

	
	 /s/    Goldman, Sachs & Co.

	GOLDMAN, SACHS & CO.

  

			
	 Accepted:

	
	TREASURER OF THE STATE OF CALIFORNIA
		
	 By:
	 	 /s/    Julie Giordano

		 	 Deputy Treasurer

For California State Treasurer Bill Lockyer

	
	CALIFORNIA POLLUTION CONTROL FINANCING AUTHORITY
		
	 By:
	 	 /s/    Michael Paparian

		 	 Executive Director

	
	 Agreed to and accepted by:

	
	SAN JOSE WATER COMPANY
		
	 By:
	 	 /s/    Angela Yip

		 	 Authorized Officer

Signature Page to Bond Purchase Contract 

 EXHIBIT A 

FORM OF SUPPLEMENTAL OPINION OF BOND COUNSEL 

[Closing Date] 
 California
Pollution Control 
   Financing Authority 

915 Capitol Mall, Room 457 
 Sacramento,
California 95814 
 Goldman, Sachs & Co., 

  as the underwriter 

200 West Street,
31st Floor 

New York, New York 10282 
  

			
	 Re:
	  	 $50,000,000

		  	 California Pollution Control Financing Authority

		  	 Revenue Bonds

		  	 (San Jose Water Company Project)

		  	 Series
2010A                                        
            

	 (Supplemental Opinion)

Ladies and Gentlemen: 

This letter is addressed to you pursuant to Section 7(d)(5) of the Bond Purchase Contract, dated June 9, 2010
(the “Purchase Contract”), among Goldman, Sachs & Co. (the “Underwriter”), the Treasurer of the State of California (the “Treasurer”) and the California Pollution Control Financing Authority (the
“Authority”), and approved by San Jose Water Company (the “Borrower”), providing for the purchase of $50,000,000 principal amount of California Pollution Control Financing Authority Revenue Bonds (San Jose Water Company Project)
Series 2010A (the “Bonds”). The Bonds are being issued pursuant to an Indenture, dated as of June 1, 2010 (collectively, the “Indenture”), between the Authority and Wells Fargo Bank, National Association, as trustee.
Capitalized terms not otherwise defined herein shall have the respective meanings ascribed thereto in the Indenture or, if not defined in the Indenture, in the Purchase Contract. 

I have delivered my final legal opinion as bond counsel concerning the validity of the Bonds and certain other matters,
dated the date hereof and addressed to the Authority. The Underwriter may rely on such opinion as though the same were addressed to the Underwriter. 

In connection with my role as bond counsel, I have reviewed the Purchase Contract, the Indenture, the Loan Agreement, the
Tax Certificate, opinions of counsel to the Authority, the Trustee and the Borrower, the opinion of special tax counsel to the Authority, certificates of the Authority, the Trustee, the Borrower and others, and such other documents, opinions and
matters to the extent I deemed necessary to render the opinions set forth herein. 
  

 A-1 

 The opinions or conclusions expressed herein are based on an analysis of
existing laws, regulations, rulings and court decisions and cover certain matters not directly addressed by such authorities. Such opinions may be affected by actions taken or omitted or events occurring after the date hereof. I have not undertaken
to determine, or to inform any person, whether any such actions or events are taken or omitted or do occur, or whether any other matters come to my attention, after the date hereof, and I have no obligation to update this opinion. I have assumed the
genuineness of all documents and signatures presented to me (whether as originals or as copies) and the due and legal execution and delivery by, and validity against, any parties other than the Authority. I have not undertaken to verify
independently, and have assumed, the accuracy of the factual matters represented, warranted or certified in the documents, and of the legal conclusions contained in the opinions, referred to in the third paragraph hereof. I have further assumed
compliance with all covenants and agreements contained in such documents. In addition, I call attention to the fact that the rights and obligations under the Bonds, the Indenture, the Loan Agreement, the Tax Certificate and the Purchase Contract are
subject to bankruptcy, insolvency, reorganization, arrangement, fraudulent conveyance, moratorium and other laws relating to or affecting creditors’ rights, to the application of equitable principles, to the exercise of judicial discretion in
appropriate cases and to the limitations on legal remedies against governmental entities in the State of California. I express no opinion with respect to any indemnification, contribution, choice of law, choice of forum or waiver provisions
contained therein. Finally, I have undertaken no responsibility for the accuracy, completeness or fairness of the Official Statement or other offering material relating to the Bonds and, except as provided in paragraph 3 below, express no opinion
with respect thereto. 
 Based on and subject to the foregoing, and in reliance thereon and on the assumptions
and limitations set forth in my final legal opinion, as of the date hereof, I am of the following opinions or conclusions: 

1. The Bonds are not subject to the registration requirements of the Securities Act of 1933, as amended, and the
Indenture is exempt from qualification pursuant to the Trust Indenture Act of 1939, as amended. 
 2. The
Purchase Contract has been duly authorized, executed and delivered by the Authority and (assuming due authorization, execution and delivery by and validity against the Underwriter) is a valid and binding agreement of the Authority. 

3. The statements contained in the Official Statement, dated June 9, 2010 with respect to the Bonds (the
“Official Statement”), under the captions “The Bonds” (except for the section entitled “DTC and the Book-Entry Only System”), “Security and Sources of Payment for the Bonds”, “The Loan Agreement”,
“The Indenture” and “Tax Matters”, insofar as such statements expressly summarize certain provisions of the Bonds, the Indenture and the Loan Agreement and my opinion concerning certain federal tax matters relating to the Bonds,
are accurate in all material respects. 
 This letter is furnished by me as bond counsel. No attorney-client
relationship has existed or exists between my firm and the Underwriter in connection with the Bonds or by virtue of this letter, and I have no obligation to update this letter. This letter is delivered to the Underwriter and the

  

 A-2 

 
Authority as underwriter and issuer, respectively, of the Bonds, is solely for your benefit as such underwriter and issuer, respectively, and is not to be used, circulated, quoted or otherwise
referred to or relied upon for any other purpose or by any other person, except that reference may be made to it in the Purchase Contract or in any list of closing documents pertaining to the offering of the Bonds covered by the Official Statement.
This letter is not intended to, and may not, be relied upon by owners of Bonds. 
 Very truly yours, 

 

 A-3 

 EXHIBIT B 

FORM OF SUPPLEMENTAL OPINION OF SPECIAL TAX COUNSEL 

[Closing Date] 
  

	
	 California Pollution Control

	     Financing Authority

	 915 Capitol Mall, Room 457

	 Sacramento, California 95814

  

			
	 Re:
	 	 $50,000,000 California Pollution Control Financing Authority Revenue Bonds

		 	 (San Jose Water Company) Series 2010A

Ladies and Gentlemen: 

We acted as Special Tax Counsel in connection with the issuance by the California Pollution Control Financing Authority
(the “Authority”) of $50,000,000 aggregate principal amount of its Revenue Bonds (San Jose Water Company) Series 2010A (the “Bonds”). The Bonds are being issued on the date hereof pursuant to an Indenture dated as of June 1,
2010 between the Authority and Wells Fargo Bank, National Association, as Trustee. The Authority will loan the proceeds of the Bonds to San Jose Water Company (the “Borrower”), a California corporation, pursuant to a Loan Agreement, dated
as of June 1, 2010 (the “Loan Agreement”), between the Authority and the Borrower, for the purpose of financing certain capital costs of the construction, acquisition, and installation of (i) improvements to the structures and
facilities that are integral to the supply of water throughout the water supply system owned by the Borrower (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 main, and (iii) the acquisition of equipment for the Water System, including hydrants, meters and related
installation, facility retirements and customer information system; and other capital projects functionally related and subordinate to such facilities; 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 in contiguous areas in the County of Santa Clara, California. 

In our capacity as Special Tax Counsel we have delivered an opinion (the “Special Tax Counsel Opinion”) dated
the date hereof to the Authority and other named parties with respect to the exclusion of interest on the Bonds from gross income for Federal income tax purposes. 

In our capacity as Special Tax Counsel we have examined such documents, records of the Authority and other instruments as
we deemed necessary to enable us to express the opinions set forth below, including executed counterparts of the Indenture, the Loan Agreement, the Tax Certificate and Agreement and the other documents listed in the closing memorandum in respect of
the Bonds. 
  

 B-1 

 Based on and subject to the foregoing, and in reliance thereon and on the
assumptions and limitations set forth in our opinion, as of the date hereof, it is our opinion that the statements contained in the Official Statement, dated June 9, 2010 with respect to “Tax Matters,” insofar as such statements
expressly summarize certain provisions of the Bonds, the Indenture and the Loan Agreement and our Special Tax Counsel Opinion concerning certain federal tax matters relating to the Bonds, are accurate in all material respects. 

Very truly yours, 
  

 B-2 

 EXHIBIT C 

FORM OF OPINION OF COUNSEL TO THE AUTHORITY 

[Closing Date] 
 California
Pollution Control Financing Authority 
 Sacramento, California 
  

			
	 RE:
	 	 $50,000,000 California Pollution Control Financing Authority Revenue Bonds

		 	 (San Jose Water Company Project) Series 2010A

Ladies and Gentlemen: 
 This
opinion is delivered to you in connection with the issuance by the California Pollution Control Financing Authority (the “Authority”) of its Revenue Bonds (San Jose Water Company Project) Series 2010A in the aggregate principal amount of
$50,000,000 (the “Bonds”). This opinion is delivered to you pursuant to Section 7(d)(8) of a Bond Purchase Contract, dated June 9, 2010 (the “Purchase Contract”), among the Treasurer of the State of California, the
Authority, and Goldman, Sachs & Co. (the “Underwriter”), and approved by San Jose Water Company (the “Borrower”). 

The Bonds are being issued pursuant to the provisions of the California Pollution Control Financing Authority Act, Division 27 of the
Health and Safety Code (commencing with section 44500) (the “Act”). The Bonds are being issued pursuant to an Indenture, dated as of June 1, 2010 (the “Indenture”), by and between the Authority and Wells Fargo Bank, National
Association, as trustee (the “Trustee”). 
 The proceeds of the Bonds are being loaned by the Authority to the
Borrower pursuant to a Loan Agreement, dated as of June 1, 2010 (the “Loan Agreement”), between the Authority and the Borrower. Capitalized terms used herein and not otherwise defined shall have the meanings given such terms in the
Indenture. 
 The Authority’s only sources of payment for the principal of, premium, if any, or interest on the Bonds are
Revenues from payments by the Borrower and from certain other limited sources provided for and described in the Indenture. The Authority is not obligated to pay the principal of, premium, if any, or interest on the Bonds except from such Revenues
and other limited sources provided for and described in the Indenture. Neither the faith and credit nor the taxing power of the State of California or any 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 has no taxing power with which to provide for payment of the principal of, premium, if any, or interest on the Bonds, nor does it have the power to commit the faith and credit or the taxing
power of the State of California or any subdivision thereof, or any local agency, to payment of the principal of, premium, if any, or interest on the Bonds. 
  

 C-1 

 As to questions of fact material to this opinion, we have relied upon representations
contained in the Indenture, the Loan Agreement and the Purchase Contract (“Authority Documents”) and in certain certificates, documents, records, statements, and opinions furnished by, or on behalf of, the Authority and the Borrower,
without undertaking to verify such facts by independent investigation. We have reviewed the Authority Documents, certificates of the Authority and others, certain parts of the Official Statement, as defined below, under the headings, “THE
AUTHORITY” and “ABSENCE OF MATERIAL LITIGATION” (solely as it relates to the Authority), and such other documents, opinions and matters to the extent deemed necessary to render the opinions set forth herein. In addition, we have
assumed compliance with the covenants and agreements contained in the Authority Documents. 
 The opinions expressed herein are
based on an analysis of existing laws, regulations, rulings and court decisions and cover certain matters not directly addressed by such authorities. Such opinions may be affected by actions taken or omitted or events occurring after the date
hereof. We have not undertaken to determine, or to inform any person, whether any such actions are taken or omitted or events do occur or any other matters come to our attention after the date hereof, and we disclaim any obligation to update this
opinion. We have assumed the genuineness of all documents and signatures presented to us (whether as originals or as copies) and the due and legal execution and delivery thereof by, and validity against, any parties other than the Authority. We have
not undertaken to verify independently, and have assumed, the accuracy of the factual matters represented, warranted or certified in the documents, and of the legal conclusions contained in the opinions, referred to in the preceding fifth paragraph
hereof. 
 We express no opinion as to whether interest on the Bonds is excluded from gross income for federal income tax
purposes or exempt from State of California personal income taxes or as to any other tax consequences related to the ownership or disposition of, or the accrual or receipt of interest on, the Bonds. We express no opinion regarding the Tax
Certificate (including as it may be referenced in any Authority Document). We take no responsibility for the accuracy, completeness or fairness of the Official Statement, as defined below, or other offering material relating to the Bonds and express
no opinion with respect thereto, except as expressly set forth in numbered paragraph 2 below. 
 Based upon and subject to the foregoing, and in
reliance thereon, as of the date hereof, we are of the opinion that: 
 1. The Authority is a public
instrumentality duly organized and validly existing under the Constitution and laws of the State of California. 

2. The official statement dated             , 2010
relating to the Bonds (the “Official Statement”) has been duly authorized, executed and delivered by the Authority, and the information contained in the Official Statement under the headings “THE AUTHORITY” and “ABSENCE OF
MATERIAL LITIGATION” (solely as it relates to the Authority) is correct and does not omit any statement which, in our opinion, should be included or referred to therein. 

 

 C-2 

 3. “Resolution of the California Pollution Control Financing Authority
Delegating Certain Powers Related to Bond Financings to the Executive Director and the Deputy Executive Director” and Final Resolution No. 501 of the Authority, each adopted on May 26, 2010, approving and authorizing the execution and
delivery of the Authority Documents, and the Bonds and the Official Statement, were duly adopted at a meeting of the governing body of the Authority which was called and held pursuant to law and with all public notice required by law and at which a
quorum was present and acting throughout. 
 4. There is no action, suit or proceeding pending (with service of
process against the Authority having been accomplished) before any court, governmental agency, public board or body, or to our knowledge threatened, against the Authority to restrain or enjoin the issuance or delivery of the Bonds, the collection of
Revenues pledged under the Indenture, the assignment of the Loan Agreement under the Indenture or the loaning of the proceeds of the Bonds to the Borrower under the Loan Agreement, or contesting any authority for the issuance of the Bonds, the
validity of the Bonds, or the Authority Documents, or contesting the existence or powers of the Authority with respect to the issuance of the Bonds or the security therefore wherein an unfavorable decision, ruling or finding would have a material
adverse effect on the transactions contemplated by the Authority Documents or the validity of the Bonds (it being understood that we have made no docket search of state or federal courts nor any other similar inquiry regarding such matters).

 5. The execution and delivery of the Bonds and the Authority Documents by the Authority and the
Authority’s compliance with the provisions thereof under the circumstances contemplated thereby do not and will not conflict with or constitute on the part of the Authority a breach of or default under any agreement or other instrument known to
us to which the Authority is a party or by which it is bound, or under any existing law, regulation, court order or consent decree to which the Authority is subject, which conflict, breach or default would have a material adverse effect on the
validity of the Bonds or the Authority Documents; provided that no representation is made regarding compliance with any federal or state securities or “blue sky” laws. 

6. The Authority Documents have been duly authorized, executed, and delivered by the Authority and, assuming due
authorization, execution and delivery by the other parties thereto, are valid and binding obligations of the Authority enforceable in accordance with their respective terms, subject to the laws relating to bankruptcy, insolvency, reorganization,
arrangement, fraudulent conveyance, moratorium and other laws related to or affecting creditors’ remedies generally and to the application of equitable principles as the court having jurisdiction may impose, regardless of whether such
enforceability is considered in a proceeding in equity or law, to the exercise of judicial discretion in appropriate cases and to the limitations on legal remedies against governmental entities in the State of California. We express no opinion with
respect to any indemnification, contribution, penalty, choice of law, choice of forum, choice of venue, severability, or waiver provisions contained in the Authority Documents. 

7. The representations of the Authority set forth in Section 4 of the Purchase Contract are, as to all matters of
law, true and accurate in all material respects at and as of the date hereof as though made on this date; and such representations are, as to all other matters, to our knowledge, true and accurate in all material respects at and as of the date
hereof as though made on this date. 
  

 C-3 

 We are furnishing this letter to you as your counsel. It is being delivered to you as issuer
of the Bonds, is solely for your benefit as such issuer, and is not to be used, circulated, quoted or otherwise referred to or relied upon for any other purpose or by any other person. This letter is not intended to, and may not, be relied upon by
owners of the Bonds or by any other party to whom it is not specifically addressed. 
 Sincerely, 

 

 C-4 

 EXHIBIT D 

FORM OF CERTIFICATE OF AUTHORITY 

Closing Certificate 

The undersigned BETTINA C. REDWAY, a Deputy Treasurer of the State of California, and MICHAEL PAPARIAN, Executive Director
of the California Pollution Control Financing Authority (the “Authority”), a public instrumentality of the State of California, hereby certify to the following in connection with the issuance by the Authority on this date of the
$50,000,000 California Pollution Control Financing Authority Revenue Bonds (San Jose Water Company Project) Series 2010A (the “Bonds”) and the loan of the proceeds therefrom to San Jose Water Company (the “Borrower”); however, as
to all matters of law, the Authority is relying on the advice of the Attorney General of the State of California, counsel to the Authority. 

1. Michael Paparian is now, and at all times since at least the date shown opposite his name on the last page of this
Certificate has been, the duly appointed and qualified officer of the Authority, holding the office of the Authority set forth below opposite his name. Bettina C. Redway is now, and at all times since at least the date shown opposite her name on the
last page of this Certificate has been, a duly appointed and qualified deputy of the Treasurer of the State of California. Each of the undersigned by his or her signature confirms that the signature of the other undersigned is his or her genuine
signature and that the signature of Julie Giordano set forth below is her genuine signature. 
 2. Bill Lockyer,
Treasurer of the State of California and Chairman of the Authority, was duly authorized by the Authority to execute the Bonds, and pursuant to such authority each of the Bonds has been executed by his facsimile signature, which signature on the each
of the specimen Bonds attached hereto as Exhibit A the undersigned Deputy Treasurer hereby confirms is genuine. 

3. The seal printed upon the specimen Bonds attached hereto and impressed upon this Certificate below is the legally
adopted and official seal of the Authority and such seal has been imprinted upon the Bonds. The specimen Bond attached hereto is identical in all respects with the Bonds this day delivered to the Trustee, on behalf of The Depository Trust Company,
on behalf of Goldman, Sachs & Co., as the underwriter of the Bonds, and the Bonds are substantially in the form prescribed by the Indenture (as hereinafter defined). 

4. The following individuals are now, and at all times since at least May 26, 2010 have been, the duly appointed and
qualified officers and members of the Authority and the persons holding the offices set forth opposite their respective names and all action that has to be taken for such persons to qualify for such offices, including without limitation any and all
filings, have been taken. 
  

 D-1 

					
	 Name
	  	 Authority

Position
	  	 Office

			
	 Bill Lockyer
	  	 Chairman
	  	 Treasurer of the State of California

			
	 John Chiang
	  	 Member
	  	 Controller of the State of California

			
	 Ana J. Mantosantos
	  	 Member
	  	 Director of Finance of the State of California

The following members of the Authority who, as of May 26, 2010, were state officials did, in accordance with
Section 7.9 of the Government Code and Section 44515 of the Health and Safety Code of the State of California, duly designate the following persons to act for and represent said respective officials at the meeting of the Authority at which
the Final Resolution (as hereinafter defined) was adopted: 
  

					
	 Name
	  	 Authority

Position
	  	 Representative

			
	 Bill Lockyer
	  	 Chairman
	  	 Bettina C. Redway

			
	 John Chiang
	  	 Member
	  	 Ruth Holton-Hodson

			
	 Ana J. Mantosantos
	  	 Member
	  	 Cynthia Bryant

Bettina C. Redway, as Deputy Treasurer of the State of California, is authorized to act on behalf of the State Treasurer
of the State of California as the Chairman of the Authority, including without limitation, the authority to execute and deliver the Authority Documents (as hereinafter defined). 

5. The undersigned Executive Director certifies that: 

(a) the resolution attached hereto as Exhibit B is a full, true and correct copy of Initial Resolution No. 10-04 (the
“Initial Resolution”), which was duly adopted at a regular meeting of the Authority held on March 24, 2010, of which meeting all of the members of the Authority had due notice and at which meeting a quorum was present and voting
throughout; 
 (b) the resolution attached hereto as Exhibit C is a full, true and correct copy of the
resolution of the Authority entitled “Resolution of the California Pollution Control Financing Authority Delegating Certain Powers and Authorizing Certain Actions Related to Bond Financings (the “Delegation Resolution”), which was
duly adopted at regular meeting of the Authority held on May 26, 2010, of which meeting all of the members of the Authority had due notice and at which meeting a quorum was present and voting throughout; 

 

 D-2 

 (c) the resolution attached hereto as Exhibit D is a full, true, complete
and correct copy of Resolution No. 501, which was duly adopted at a regular meeting of the Authority held on May 26, 2010 (the “Final Resolution” and, together with the Delegation Resolution, collectively referred to herein as
the “Resolutions”), of which meeting all of the members of the Authority had due notice and at which meeting a quorum was present and voting throughout; 

(d) the Resolutions have not been amended, modified or rescinded in any manner except as set forth therein since the
respective dates of their adoption and the same are now in full force and effect; and 
 (e) the minutes
attached hereto as Exhibit E are true, complete and correct copies of minutes of the meeting of the Authority held on May 26, 2010 at which the Final Resolution was adopted, as such minutes appear of record in the minute book of the Authority.

 6. Pursuant to the Resolutions, Bill Lockyer, as Treasurer of the State of California, the Chairman of the
Authority, or any of his Deputies, and Michael Paparian, Executive Director of the Authority, have been authorized to execute and deliver, on behalf of the Authority, the following documents except as otherwise set forth below; pursuant to such
authority they have executed and delivered said documents or said documents have been executed and delivered on their behalf; and, assuming due authorization, execution and delivery by the other parties thereto, documents (a)-(f) below
(collectively the “Authority Documents”) are in full force and effect: 
 (a) Indenture, dated as of
June 1, 2010 (the “Indenture”), by and between the Authority and Wells Fargo Bank, National Association, as trustee (the “Trustee”); 

(b) Loan Agreement, dated as of June 1, 2010 (the “Loan Agreement”), by and between the Authority and the
Borrower; 
 (c) Tax Certificate and Agreement, dated June 16, 2010, by and between the Authority and the
Borrower; 
 (d) Bond Purchase Contract, dated June 9, 2010 (the “Purchase Contract”), by and
among the Authority, the Treasurer of the State of California and the Underwriter, as approved by the Borrower (Michael Paparian, Executive Director, is the only signatory on behalf of the Authority); 

(e) Blanket Issuer Letter of Representations to The Depository Trust Company; 

(f) Official Statement for the Bonds, dated June 9, 2010 (Michael Paparian, Executive Director, is the only
signatory on behalf of the Authority); and 
 (g) Internal Revenue Service Form 8038. 

 

 D-3 

 7. Bill Lockyer, as Treasurer of the State of California and as agent for
sale of the Bonds, has been authorized to execute and deliver the Purchase Contract as said agent for sale; pursuant to such authority, Julie Giordano, a duly appointed and qualified deputy of the Treasurer of the State of California, who is
authorized to act on behalf of the Treasurer of the State of California, as agent for sale of the Bonds, executed and delivered the Purchase Contract. 

8. The Bonds have been duly authorized, executed and delivered by the Authority and imprinted with the official seal of
the Authority, and, assuming due authentication and delivery of the Bonds by the Trustee, are in full force and effect. 

9. To the best knowledge of the undersigned after reasonable investigation, the Authority has fulfilled or performed each
of its obligations contained in the Authority Documents required to be fulfilled or performed by it as of the date hereof. 

10. The representations and warranties made by the Authority in the Indenture, the Loan Agreement and the Purchase
Contract are true and correct in all material respects as of the date hereof, with the same effect as if made on, and with respect to the facts as of, the date hereof. 

[REST OF PAGE INTENTIONALLY LEFT BLANK] 
  

 D-4 

 Dated and sealed as of the 16th day of June, 2010. 

(Seal) 
  

							
	 Name
	 	 Appointment Date
	 	 Office
	 	 Signature

				
	 Bettina C. Redway
	 	1/8/07	 	 Deputy Treasurer
	 	  

				
	 Michael Paparian
	 	1/23/07	 	 Executive

Director
	 	  

Julie Giordano hereby confirms that she is now, and at all times since at least the date shown opposite her name set
forth below, has been, a duly appointed and qualified deputy of the Treasurer of the State of California and that the signature set forth below is her genuine signature. 

 

							
	 Name
	 	 Appointment Date
	 	 Office
	 	 Signature

				
	 Julie Giordano
	 	11/30/09	 	 Deputy Treasurer
	 	  

 

 D-5 

 EXHIBIT E 

FORM OF OPINION OF COUNSEL TO THE BORROWER 

[Closing Date] 
 California
Pollution Control Financing Authority 
 [Address] 

Wells Fargo Bank, National Association 

[Address] 
 Goldman, Sachs & Co.

 [Address] 
  

					
	 Re:
	 	 $50,000,000
	 	
		 	 California Pollution Control Financing Authority
	 	
		 	 Revenue Bonds
	 	
		 	 (San Jose Water Company Project)
	 	
		 	 Series
2010A                                        
            
	 	
		 	 (Opinion of [Special] Counsel to Borrower)
	 	

 Ladies and Gentlemen: 

This opinion letter is addressed to you pursuant to Section 7(d)(12) of the Bond Purchase Contract, dated
June 9, 2010 (the “Purchase Contract”), among Goldman, Sachs & Co. (the “Underwriter”), the Treasurer of the State of California (the “Treasurer”) and the California Pollution Control Financing Authority
(the “Authority”), and approved by San Jose Water Company (the “Borrower”), providing for the purchase of $50,000,000 principal amount of California Pollution Control Financing Authority Revenue Bonds (San Jose Water Company
Project) Series 2010A (the “Bonds”). The Bonds are being issued pursuant to an Indenture, dated as of June 1, 2010 (the “Indenture”), between the Authority and Wells Fargo Bank, National Association, as trustee. Capitalized
terms not otherwise defined herein shall have the respective meanings ascribed thereto in the Indenture or, if not defined in the Indenture, in the Purchase Contract. We have acted as [special] counsel to the Borrower in connection with the Bond
Purchase Contract and the Loan Agreement, dated as of June 1, 2010 (the “Loan Agreement”), between the Authority and the Borrower. 

In connection with this opinion letter, we have examined originals, or copies certified or otherwise identified to our
satisfaction, of the articles of incorporation, as amended (the “Articles of Incorporation”), and bylaws, as amended (the “Bylaws”), of the Borrower and such other documents and records, and other instruments as we have deemed
appropriate for purposes of the 
  

 E-1 

 
opinions set forth herein, including the following documents (the documents referred to in clauses (a) through (d) below are referred to herein as the “Bond Documents”):

  

	 	(a)	 the Purchase Contract; 

  

	 	(b)	 the Indenture; 

  

	 	(c)	 the Loan Agreement; 

  

	 	(d)	 the Continuing Disclosure Agreement; and 

  

	 	(e)	 the Official Statement. 

We have assumed the genuineness of all signatures (other than those of the Borrower), the legal capacity of natural persons, the
authenticity of the documents submitted to us as originals, the conformity to the original documents of all documents submitted to us as certified, facsimile or photostatic copies, and the authenticity of the originals of all documents submitted to
us as copies. We have also assumed that the Bond Documents constitute valid and binding obligations of each party thereto other than the Borrower. 

As to any facts that are material to the opinions hereinafter expressed that we did not independently establish or verify, we have relied
without investigation upon the representations of the Borrower contained in the Bond Documents and upon certificates of officers of the Borrower. 

In rendering the opinions set forth herein, whenever a statement or opinion set forth therein is qualified by “to
our knowledge,” “known to us” or by words of similar import, it is intended to indicate that, during the course of our representation of the Borrower in the subject transaction, no information has come to the attention of those
lawyers in our firm who have rendered legal services in connection with such transaction that gives us actual knowledge of the inaccuracy of such statement or opinion. We have not undertaken any independent investigation to determine the accuracy of
facts material to any such statement or opinion, and no inference as to such statement or opinion should be drawn from the fact of our representation of the Borrower. 

We have relied upon a certificate of the [Executive Vice President of Finance] of the Borrower dated the date
hereof, certifying that the items listed in such certificate are (i) all of the indentures, loan or credit agreements, leases, guarantees, mortgages, security agreements, bonds, notes, other agreements or instruments (the “Other Borrower
Agreements”), and (ii) all of the judicial or administrative orders, writs, judgments, awards, injunctions and decrees (the “Borrower Orders”), which as to any matter in (i) or (ii) affect or purport to affect the
Borrower’s right to borrow money or perform its obligations under the Loan Agreement. 
 Based upon and
subject to the foregoing, and to the limitations and qualifications described below, we are of the opinion that: 
  

	 	1.	 The Borrower is a corporation duly incorporated, validly existing and in good standing under the laws of the State of California, with the corporate
power and authority to own its properties and to conduct its current business as contemplated by the Official Statement. 

  

 E-2 

	 	2.	 The Borrower together with its affiliates is a “small business” as defined in Section 8020 of Title 4 of the California Code of
Regulations. 

  

	 	3.	 The Project as described in Exhibit A of the Loan Agreement is a “project” and the Borrower together with its Participating
Affiliates is a “participating party” under California Pollution Control Financing Authority Act, commencing with Section 44500 of the California Health and Safety Code, as now in effect. 

 

	 	4.	 The Loan Agreement, the Continuing Disclosure Agreement and the Purchase Contract have been duly authorized, executed and delivered by the Borrower
and each is a valid and binding obligation of the Borrower enforceable against the Borrower in accordance with its terms. 

  

	 	5.	 No authorization, approval, consent or license of any regulatory body or authority of the United States or the State of California not already
obtained is required for the authorization, execution, delivery and performance of the Loan Agreement, the Continuing Disclosure Agreement or the Purchase Contract. 

 

	 	6.	 The execution and delivery of the Loan Agreement, the Continuing Disclosure Agreement, the Official Statement and the Purchase Contract, and the
performance by the Borrower of the Loan Agreement, the Continuing Disclosure Agreement and the Purchase Contract by the Borrower, will not result in (i) a violation of the Articles of Incorporation or Bylaws, (ii) a breach or a default
under any Other Borrower Agreement, (iii) a violation of any Borrower Order, or (iv) a violation of any law, rule or regulation of any administrative or governmental body having jurisdiction over the Borrower or its property.

  

	 	7.	 Except as disclosed in the Official Statement, (i) to our knowledge, there are no pending or threatened lawsuits or other proceedings against
the Borrower (1) which seek to restrain or enjoin the issuance or delivery of the Bonds, or the collection of the payments to be made pursuant to the Indenture or the Loan Agreement, (2) in any way contest or affect the authority for the
issuance and delivery of the bonds or the validity of the Purchase Contract, the Bonds, the Indenture, the Loan Agreement, the Continuing Disclosure Agreement, the Official Statement or the resolutions of the Borrower relating to the financing of
the Project and the Bonds, (3) contest the corporate existence or powers of the Borrower; or (4) contest or affect the powers of the Borrower to enter into or perform its obligations or consummate the transactions contemplated under any of
the foregoing; and (ii) to our knowledge, the Borrower is not in default with respect to any 

 

 E-3 

	 	 
order or decree of any court or any order, regulation or demand of any federal, state, municipal or other governmental authority, which default would materially and adversely affect the
consummation of the transactions contemplated by the Purchase Contract, the Bonds, the Indenture, the Loan Agreement, the Continuing Disclosure Agreement or the financial condition, assets, properties or operations of the Borrower.

 The opinions expressed above are subject to the following limitations, exceptions,
qualifications and assumptions: 
 A. The opinions expressed herein are subject to bankruptcy, insolvency,
fraudulent transfer and other similar laws affecting the rights and remedies of creditors generally and general principles of equity, including concepts of materiality, reasonableness, good faith and fair dealing. 

B. Provisions of the Bond Documents relating to indemnification or exculpation may be limited by public policy or by
law. 
 C. The opinions expressed in this opinion letter are limited to the laws of the State of California and
the federal laws of the United States of America, and we express no opinion with respect to the laws of any other state or jurisdiction. 

D. For purposes of our opinions in paragraphs 1 hereof as to the due incorporation, valid existence and good standing of
the Borrower, we have relied solely upon good standing or similar certificates issued by the appropriate authorities in the subject jurisdictions. 

E. Certain waivers by the Borrower in the Bond Documents may relate to matters that cannot, as a matter of law, be
effectively waived. 
 F. The enforceability of the Bond Documents, may be limited by the unenforceability
under certain circumstances of provisions imposing penalties, forfeitures, late payment charges or an increase in interest rate upon delinquency in payment or an occurrence of default. 

G. For purposes of the opinion in paragraph 6(ii), where any Other Borrower Agreement states that it is governed by laws
of a state other than the laws of California, we have not made any investigation of the laws of such other state but have merely assumed that they would be interpreted in accordance with their plain meaning. We have not reviewed the covenants in the
Other Borrower Agreements that contain financial ratios and other similar financial restrictions, and no opinion is provided with respect thereto. 

H. For purposes of the opinion in paragraph 6(v), we have considered only such laws and regulations that in our
experience are typically applicable to a transaction of the nature contemplated by the Bond Documents. 
 I. We
express no opinion as to the enforceability of any provision of the Bond Documents permitting modification thereof only by means of an agreement in writing signed by the parties thereto. 

 

 E-4 

 The purpose of our professional engagement was not to establish or confirm
factual matters set forth in the Official Statement, and we have not undertaken any obligation to verify independently any of the factual matters set forth in the Official Statement. Moreover, many of the determinations required to be made in the
preparation of Official Statement involve matters of a non-legal nature. In addition, we note that we have not advised the Borrower with regard to California public utilities matters. 

Subject to the foregoing, we confirm to you that, on the basis of the information we gained in the course of performing
the services referred to above, nothing came to our attention that caused us to believe that the disclosures in in Official Statement (except information concerning DTC and the book-entry only system and disclosures contained under the captions
“THE AUTHORITY”, “ABSENCE OF MATERIAL LITIGATION” (solely as it relates to the Authority), “UNDERWRITING” and “TAX MATTERS”) as of the date of the Official Statement and as of the date hereof contained or
contains any untrue statement of a material fact or omitted or omits to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not
misleading; provided, however, that (a) we do not assume any responsibility for the accuracy, completeness or fairness of the statements contained in the Official Statement, and (b) we do not express any belief with respect to the
financial statements, schedules, notes, other financial and accounting data and statistical data derived therefrom, and information about internal control over financial reporting, contained in the Official Statement. 

This opinion letter is effective only as of the date hereof. We do not assume responsibility for updating this opinion
letter as of any date subsequent to its date, and we assume no responsibility for advising you of any changes with respect to any matters described in this opinion letter that may occur subsequent to the date of this opinion letter or from the
discovery, subsequent to the date of this opinion letter, of information not previously known to us pertaining to the events occurring prior to such date. 

This opinion letter is furnished by us solely for the benefit of the Authority, the Underwriter and the Trustee, and this
opinion letter may not be relied upon by such parties for any other purpose or by any other person or entity for any purpose whatsoever; however, Leslie M. Lava, Esq., Bond Counsel to the Authority, may rely on paragraph 4 hereof. This opinion
letter is not to be quoted in whole or in part or otherwise referred to or used or furnished to any other person, except as may be required by any governmental authority or pursuant to legal process, without our express written consent, except that
reference may be made to this opinion letter in the closing memorandum relating to the Bonds and this opinion letter may be included in the related closing transcripts. 

Very truly yours, 
  

 E-5 

 EXHIBIT F 

UNDERWRITER’S REPORT TO THE AUTHORITY 

STATE OF CALIFORNIA 

CALIFORNIA POLLUTION CONTROL FINANCING AUTHORITY 

TARGET BUSINESS ENTERPRISE 

PARTICIPATION IN PROFESSIONAL BOND SERVICES REPORT 

NEGOTIATED SALE 

(Completed by the Senior Manager) 

Issuer: CALIFORNIA POLLUTION CONTROL FINANCING AUTHORITY 

Issue Description: 
  

					
	 Amount:
	 	 Sale Date:
	 	 Closing Date:

			
	 Senior Manager:
	 		 	
			
	 Contact Person:
	 		 	

  

									
	 1. SUMMARY OF GROSS SPREAD:
	  		  		  	
	     (Paid from Other Sources)
	  		  		  	
	 	  	 	  	 Per

        $1,000      
  
	  	 Gross

        Amount      
  
	  	 % of Total

            Issue  
          

		  	 Management Fee
	  		  		  	
		  	 Takedown
	  		  		  	
		  	 Risk
	  		  		  	
		  	 Expenses
	  		  		  	
		  		  	 	  	 	  	 
		  	Total Spread	  		  		  	
		  		  	 	  	 	  	 
				
	2. MANAGEMENT
FEE                                Total:	  		  		  	
	 	  	 	  	 DVBE*

Firm?

        Yes/No      
  
	  	 Management

        Fee       
 
	  	 % of

        Total      
  

					
		  	 Senior Manager:
	  		  		  	
					
		  	 Co-Senior Manager:
	  		  		  	
					
		  	 Co-Managers:
	  		  		  	

  

	*	DVBE means Disabled Veteran Business Enterprises as defined in Military and Veterans Code Section 999. 

 

 F-1 

 California Pollution Control Financing Authority 

DVBE Bond Report 
 Page 2 

3. TAKEDOWN 
  

			
	 a. Gross Takedown
	  	
	      Less: Indentified Concessions
	  	
		  	 
	      Net Takedown
	  	
		  	 
		  	
		
	 b. Takedown by Senior Manager / Co-Managers / Syndicate member / Selling group member (including income derived from
designated and group sales):
	  	

  

									
	 Firm
	  	DVBE
Firm?
Yes/No	  	 	  	Takedown
Excluding
Identified
Concessions	  	% of
Total

  

											
	2.
RISK                                         
                                   Total:	  		  		  		  	

  

									
	 	  	DVBE
Firm?
Yes/No	  	 	  	
                      
      

	  	 
	 Senior Manager:
	  		  		  		  	
					
	 Co-Senior Manager:
	  		  		  		  	
					
	 Co-Managers:
	  		  		  		  	

  

 F-2 

 California Pollution Control Financing Authority 

DVBE Bond Report 
 Page 3 

5. EXPENSES: 
  

																	
	 a.
	 	 Summary of Expenses:
	  		  		  		  		  		  		  	
									
	 	 	 	  	Paid From
Bond
Proceeds	  	Percent
of Issue	  	 	  	Paid From
Other
Sources	  	 	  	Percent
of Issue	  	 
		 	 Underwriter’s expenses
	  		  		  		  		  		  		  	
		 	 Other Costs of issuance
	  		  		  		  		  		  		  	
		 		  	 	  		  	 	  		  	 	  	
		 	 Total Expenses:
	  		  		  		  		  		  		  	
		 		  	 	  		  	 	  		  	 	  	
									
	 b.
	 	 Breakdown of Expenses:
	  		  		  		  		  		  		  	
						
	 	 	 	  	 	  	 	  	 	  	Paid from:
	 	 	 	  	Firm	  	 	  	DVBE
Firm?
Yes/No	  	 	  	 	  	Bond
Proceeds	  	Other
Sources
	 Underwriter’s Expenses:
	  		  		  		  		  		  		  	
		 	 CDIAC Fees
	  		  		  		  		  		  		  	
		 	 BECON
	  		  		  		  		  		  		  	
		 	 Day Loan
	  		  		  		  		  		  		  	
		 	 State Municipal Advisory
	  		  		  		  		  		  		  	
		 	 BMA Fee
	  		  		  		  		  		  		  	
		 	 CUSIP Costs
	  		  		  		  		  		  		  	
		 	 DTC
	  		  		  		  		  		  		  	
		 	 Travel
	  		  		  		  		  		  		  	
		 	 Other
	  		  		  		  		  		  		  	
		 		  		  		  		  		  		  	 
		 	Total Underwriter’s Expenses	  		  		  		  		  		  		  	
		 		  		  		  		  		  		  	 

  

	*	Indicates underwriter’s expenses that were paid from bond proceeds but not included in the gross spread. 

 

 F-3 

 California Pollution Control Financing Authority 

DVBE Bond Report 
 Page 4 

5. EXPENSES (continued): 
  

															
	 	  	 	  	 	  	 	  	                           
             Paid from:
	 	  	 	  	 	  	DVBE
Firm?	  	Bond	  	 	  	 	  	Other
	 Costs of Issuance:
	  	 Firm
	  	 Yes/No
	  	 Proceeds
	  	 	  	 	  	Sources
		  	 Issuer’s Counsel
	  		  		  	
		  	 Bond Counsel
	  		  		  	
		  	 Tax Counsel
	  		  		  	
		  	 Underwriter’s Counsel
	  		  		  	
		  	 Trustee/Tender Agent
	  		  		  	
		  	 Trustee’s Counsel
	  		  		  	
		  	 Rating Agency
	  		  		  	
		  	 Accountant
	  		  		  	
		  	 Underwriter’s Fee
	  		  		  	
		  	 Borrower’s counsel
	  		  		  	
		  	 Borrower’s Co-Counsel
	  		  		  	
				 	
		  	 Official Statement Printing
	  		  		  	
		  	 STO Agent for Sale
	  	 State Treasurer
	  		  		  	
		  	CDLAC Fees (net of initial application fee)	  	 CDLAC
	  		  		  	
		  		  		  		  	 	  		  		  	 
		  	     Subtotal Financing Costs
	  		  		  	
		  		  		  		  	 	  		  		  	 
				 	
		  	 First Year’s LOC Fee
	  		  		  	
		  	 LOC Issuance Fee
	  		  		  	
		  	 Bank Counsel
	  		  		  	
		  	 Appraisal, Environmental
	  		  		  	
		  	 Miscellaneous
	  		  		  	
		  		  		  		  	 	  		  		  	
		  	     Subtotal Bank Costs
	  		  		  	
		  		  		  		  	 	  		  	 	  	 
		  	 Total Costs of Issuance (Per the Indenture & Tax Agreement)
	  		  	 	  	
		  		  		  		  		  		  	 	  	

																	
			
	 6. GRAND TOTAL (ALL COSTS)
  
	  		  	
		  	 (i)
	  	CPCFA subsidy item;
total subsidy =	  		  	
of the Bond Size
	  	

  

											
	 7. For Variable Rate Issues, Indicate:
	  	
		  	 a.
	  		  	Annual Remarketing Agent Fee	  	 of Outstanding Principal

		  	 b.
	  		  	Index or Method of
Calculation:	  	
				
	 Prepared by:
	  		  		  	 Date:

  

 F-4Medium-Term Notes Linked to a Global Equity Basket

 Exhibit 4.1 

[Face of Note] 

Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation
(“DTC”), to the Company 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 requested by an authorized representative
of DTC (and any payment is made to Cede & Co. or 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. 
  

			
	CUSIP NO. 94986RAF8	 	FACE AMOUNT: $                    
	REGISTERED NO.     	 	

 WELLS FARGO & COMPANY 

MEDIUM-TERM NOTE, SERIES K 

Due Nine Months or More From Date of Issue 

Notes Linked to a Global Equity Basket 

due August 7, 2013 

WELLS FARGO & COMPANY, a corporation duly organized and existing under the laws of the State of Delaware (hereinafter called the
“Company,” which term includes any successor corporation under the Indenture hereinafter referred to), for value received, hereby promises to pay to CEDE & Co., or registered assigns, an amount equal to the Redemption
Amount (as defined below), in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts, on the Stated Maturity Date. The “Initial Stated Maturity Date”
shall be August 7, 2013. If no Market Disruption Event (as defined below) occurs or is continuing with respect to a Basket Component (as defined below) on the scheduled Calculation Day (as defined below), the Initial Stated Maturity Date will
be the “Stated Maturity Date.” If a Market Disruption Event occurs or is continuing with respect to a Basket Component on the scheduled Calculation Day, the “Stated Maturity Date” shall be the later of
(i) three Business Days (as defined below) after the postponed Calculation Day with respect to such Basket Component (or, if the Calculation Day is postponed with respect to more than one Basket Component, three Business Days after the latest
postponed Calculation Day) and (ii) the Initial Stated Maturity Date. This Security shall not bear any interest. 
 Any
payments on this Security at Maturity will be made against presentation of this Security at the office or agency of the Company maintained for that purpose in the City of Minneapolis, Minnesota and at any other office or agency maintained by the
Company for such purpose. 
 “Face Amount” shall mean, when used with respect to this Security, the amount set
forth on the face of this Security as its “Face Amount.” 

 Determination of Redemption Amount 

The “Redemption Amount” of this Security will equal: 

 

	 	•	 	 If the Ending Level is greater than the Starting Level, the lesser of: 

 

	 	(i)	the Face Amount plus: 

  

																	
		 	[	 	  
 Face Amount x

 
	 	[	  	  

Ending Level – Starting Level

Starting Level
	 	 ]
	 	  
 x Participation Rate

 
	 	]	 	  
 ; and

 

  

	 	(ii)	the Capped Value; 

  

	 	•	 	 If the Ending Level is less than or equal to the Starting Level, but greater than or equal to the Threshold Level: the Face Amount; or

  

	 	•	 	 If the Ending Level is less than the Threshold Level: the Face Amount minus: 

 

											
		 	[	 	  
 Face Amount x

 
	  	  

Threshold Level – Ending Level

Starting Level
	 	 ]
	  	

 “Basket” shall mean a basket comprised of the following Basket Components, with the
return of each Basket Component having the weighting noted parenthetically: S&P 500 Index (45%); MSCI EAFE Index (20%); MSCI Emerging Markets Index (20%); and Russell 2000 Index (15%). 

“Basket Component” shall mean each of the S&P 500 Index, MSCI EAFE Index, MSCI Emerging Markets Index and Russell
2000 Index. 
 The “Pricing Date” shall mean July 30, 2010. 

The “Starting Level” is 100. 

The “Ending Level” will be calculated based on the weighted returns of the Basket Components and will be equal to the
product of (i) 100 and (ii) an amount equal to 1 plus the sum of: (A) 45% of the Component Return of the S&P 500 Index; (B) 20% of the Component Return of the MSCI EAFE Index; (C) 20% of the Component Return of the MSCI
Emerging Markets Index; and (D) 15% of the Component Return of the Russell 2000 Index. 
 The “Component
Return” of a Basket Component will be equal to: 
 Final Component Level – Initial Component Level

 Initial Component Level 
  

 2 

 where, 
  

	 	•	 	 the “Initial Component Level” is the Closing Level of such Basket Component on the Pricing Date; and 

 

	 	•	 	 the “Final Component Level” will be the Closing Level of such Basket Component on the Calculation Day. 

The “Closing Level” of a Basket Component on any Trading Day means the Closing Level of such Basket Component as reported
by the Index Sponsor of such Basket Component on such Trading Day. 
 The Initial Component Levels of the Basket Components are
as follows: S&P 500 Index (1101.60); MSCI EAFE Index (1474.91); MSCI Emerging Markets Index (991.41); and Russell 2000 Index (650.89). 

The “Capped Value” is 136% of the Face Amount of this Security. 

The “Threshold Level” will be equal to 85% of the Starting Level. 

The “Participation Rate” is 125%. 

“Index Sponsor” shall mean Standard & Poor’s, a division of the McGraw Hill Companies, Inc., MSCI Inc. or
Frank Russell Company, doing business as Russell Investment Group, as applicable. 
 “Business Day” shall mean
a day, other than a Saturday or Sunday, that is neither a legal holiday nor a day on which banking institutions are authorized or required by law or regulation to close in New York, New York or Minneapolis, Minnesota. 

A “Trading Day” with respect to a Basket Component means a day, as determined by the Calculation Agent, on which
(i) the Relevant Exchanges (as defined below) with respect to the securities underlying the Basket Component are open for trading for their regular trading sessions and (ii) the exchanges on which futures or options contracts related to
such Basket Component or successor thereto, if applicable, are traded, are open for trading for their respective regular trading sessions. 

The “Calculation Day” shall be July 31, 2013 or, if such day is not a Trading Day, the next succeeding Trading Day.
The Calculation Day is subject to postponement due to the occurrence of a Market Disruption Event. If a Market Disruption Event occurs or is continuing with respect to a Basket Component on the Calculation Day, such Calculation Day for such Basket
Component will be postponed to the first succeeding Trading Day on which a Market Disruption Event for such Basket Component has not occurred and is not continuing. If such first succeeding Trading Day has not occurred as of the eighth scheduled
Trading Day after the scheduled Calculation Day for such Basket Component, that eighth scheduled Trading Day shall be deemed the Calculation Day. If the Calculation Day has been postponed eight scheduled

  

 3 

 
Trading Days after the scheduled Calculation Day for such Basket Component and such eighth scheduled Trading Day is not a Trading Day, or if a Market Disruption Event occurs or is continuing with
respect to the Basket Component on such eighth scheduled Trading Day, the Calculation Agent will determine the Closing Level of such Basket Component on such eighth scheduled Trading Day in accordance with the formula for and method of calculating
the Closing Level of such Basket Component last in effect prior to commencement of the Market Disruption Event, using the closing price (or, with respect to any of the relevant securities, if such date is not a Trading Day or a Market Disruption
Event has occurred, its good faith estimate of the closing price that would have prevailed for such securities) on such date of each security most recently included in such Basket Component. Notwithstanding a postponement of a Calculation Day for a
particular Basket Component due to a Market Disruption Event with respect to such Basket Component, the originally scheduled Calculation Day will remain the Calculation Day for any Basket Component not affected by a Market Disruption Event. See
“—Market Disruption Events.” As used herein, “closing price” means, with respect to any security on any date, the last reported sales price regular way on such date or, in case no such reported sale takes place on
such date, the average of the reported closing bid and asked prices regular way on such date, in either case on the primary organized exchange or trading system on which such security is then listed or admitted to trading. 

“Calculation Agent Agreement” shall mean the Calculation Agent Agreement dated as of August 6, 2010 between the
Company and the Calculation Agent, as amended from time to time. 
 “Calculation Agent” shall mean the Person
that has entered into the Calculation Agent Agreement with the Company providing for, among other things, the determination of the Ending Level and the Redemption Amount, which term shall, unless the context otherwise requires, include its
successors under such Calculation Agent Agreement. The initial Calculation Agent shall be Wells Fargo Securities, LLC. Pursuant to the Calculation Agent Agreement, the Company may appoint a different Calculation Agent from time to time after the
initial issuance of this Security without the consent of the Holder of this Security and without notifying the Holder of this Security. 

Discontinuance Of A Basket Component; Alteration Of Method Of Calculation 

If an Index Sponsor discontinues publication of a Basket Component, and such Index Sponsor or another entity publishes a successor or
substitute equity index that the Calculation Agent determines, in its sole discretion, to be comparable to such Basket Component (a “Successor Equity Index“), then, upon the Calculation Agent’s notification of that
determination to the Trustee and the Company, the Calculation Agent will substitute the Successor Equity Index as calculated by the relevant Index Sponsor or any other entity and calculate the Ending Level as described above. Upon any selection by
the Calculation Agent of a Successor Equity Index, the Company will cause notice to be given to the Holder of this Security. 

In the event that an Index Sponsor discontinues publication of a Basket Component and the Calculation Agent does not select a Successor
Equity Index, the Calculation Agent will compute a substitute level for such Basket Component in accordance with the procedures last used to calculate such Basket Component before any discontinuance. If a Successor Equity Index

  

 4 

 
is selected or the Calculation Agent calculates a level as a substitute for a Basket Component, the Successor Equity Index or level will be used as a substitute for such Basket Component for all
purposes, including the purpose of determining whether a Market Disruption Event exists. 
 If at any time an Index Sponsor
makes a material change in the formula for or the method of calculating a Basket Component, or in any other way materially modifies such Basket Component so that such Basket Component does not, in the opinion of the Calculation Agent, fairly
represent the level of such Basket Component had those changes or modifications not been made, then, from and after that time, the Calculation Agent will, at the close of business in New York, New York, on the date that the Closing Level of such
Basket Component is to be calculated, make any adjustments as, in the good faith judgment of the Calculation Agent, may be necessary in order to arrive at a value of an equity index comparable to such Basket Component as if those changes or
modifications had not been made, and calculate the level of such Basket Component with reference to such equity index, as so adjusted. Accordingly, if the method of calculating a Basket Component is modified so that the level of such Basket
Component is a fraction or a multiple of what it would have been if it had not been modified, then the Calculation Agent will adjust such Basket Component in order to arrive at a level of such Basket Component as if it had not been modified.

 Market Disruption Events 

A “Market Disruption Event“ means, with respect to a Basket Component, any of the following events as determined by the
Calculation Agent in its sole discretion: 
  

	 	(A)	A material suspension or material limitation of trading in the securities which then comprise 20% or more of the level of such Basket Component or any Successor Equity
Index has been imposed by the Relevant Exchanges on which those securities are traded, at any time during the one-hour period preceding the Close of Trading on such day, whether by reason of movements in price exceeding limits permitted by those
Relevant Exchanges or otherwise. 

  

	 	(B)	A material suspension or material limitation of trading has occurred on that day, in each case during the one-hour period preceding the Close of Trading in options or
futures contracts related to such Basket Component or any Successor Equity Index, on the primary exchange or quotation system on which those options or futures contracts are traded, whether by reason of movements in price exceeding levels permitted
by the exchange, the quotation system or otherwise. 

  

	 	(C)	Any event, other than an early closure, that materially disrupts or impairs the ability of market participants in general to effect transactions in, or obtain market
values for, the securities that then comprise 20% or more of the level of such Basket Component or any Successor Equity Index, at any time during the one-hour period that ends at the Close of Trading on that day. 

 

	 	(D)	 Any event, other than an early closure, that materially disrupts or impairs the ability of market participants in general to effect transactions in, or
obtain market values for, the futures or options contracts relating to such Basket Component or 

  

 5 

	 	 
any Successor Equity Index on the primary exchange or quotation system on which those futures or options contracts are traded, at any time during the one-hour period that ends at the Close of
Trading on that day. 

  

	 	(E)	The closure of the Relevant Exchanges on which the securities that then comprise 20% or more of the level of such Basket Component or any Successor Equity Index are
traded or the primary exchange or quotation system on which futures or options contracts relating to such Basket Component or any Successor Equity Index are traded prior to its scheduled Close of Trading unless the earlier closing time is announced
by the Relevant Exchanges, the primary exchange or the quotation system, as applicable, at least one hour prior to the earlier of (1) the actual closing time for the regular trading session on the Relevant Exchanges, the primary exchange or the
quotation system, as applicable, and (2) the submission deadline for orders to be entered into the relevant exchanges, the primary exchange or the quotation system, as applicable, for execution at the Close of Trading on that day.

 For purposes of determining whether a Market Disruption Event has occurred: 

 

	 	(1)	the relevant percentage contribution of a security to the level of a Basket Component or any Successor Equity Index will be based on a comparison of (x) the
portion of the level of the Basket Component attributable to that security and (y) the overall level of such Basket Component or Successor Equity Index, in each case immediately before the occurrence of the Market Disruption Event;

  

	 	(2)	“Close of Trading“ means in respect of any Relevant Exchange, primary exchange or quotation system, the scheduled weekday closing time on a day on
which such Relevant Exchange, primary exchange or quotation system is scheduled to be open for trading for its respective regular trading session, without regard to after hours or any other trading outside the regular trading session hours; and

  

	 	(3)	“Relevant Exchange“ for any security (or any combination thereof then underlying a Basket Component or any Successor Equity Index) means the primary
exchange or quotation system on which such security is traded, as determined by the Calculation Agent. 

 Calculation Agent

 The Calculation Agent will determine the Redemption Amount and the Ending Level. In addition, the Calculation Agent
will (i) determine if adjustments are required to the Closing Level of a Basket Component under the circumstances described in this Security, (ii) if publication of a Basket Component is discontinued, select a Successor Equity Index or, if
no Successor Equity Index is available, determine the Closing Level of such Basket Component under the circumstances described in this Security, and (iii) determine whether a Market Disruption Event has occurred. 

 

 6 

 The Company covenants that, so long as this Security is Outstanding, there shall at all
times be a Calculation Agent (which shall be a broker-dealer, bank or other financial institution) with respect to this Security. 

All determinations made by the Calculation Agent with respect to this Security will be at the sole discretion of the Calculation Agent
and, in the absence of manifest error, will be conclusive for all purposes and binding on the Company and the Holder of this Security. All percentages and other amounts resulting from any calculation with respect to this Security will be rounded at
the Calculation Agent’s discretion. 
 Tax Considerations 

The Company agrees, and by acceptance of a beneficial ownership interest in this Security each Holder of this Security will be deemed to
have agreed (in the absence of a statutory, regulatory, administrative or judicial ruling to the contrary), for United States federal income tax purposes to characterize and treat this Security as a pre-paid derivative contract in respect of the
Basket. 
 Redemption and Repayment 

This Security is not subject to redemption at the option of the Company or repayment at the option of the Holder hereof prior to
August 7, 2013. This Security is not entitled to any sinking fund. 
 Acceleration 

If an Event of Default, as defined in the Indenture, with respect to this Security shall occur and be continuing, the Redemption Amount
(calculated as set forth in the next sentence) of this Security may be declared due and payable in the manner and with the effect provided in the Indenture. The amount payable to the Holder hereof upon any acceleration permitted under the Indenture
will be equal to the Redemption Amount hereof calculated as provided herein as though the date of acceleration was the Calculation Day; provided, however, if such date is not a Trading Day or if a Market Disruption Event has occurred or is
continuing on that day, the Calculation Day will be postponed as provided herein. 
  

 
 Reference is
hereby made to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place. 

Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof by manual signature or
its duly authorized agent under the Indenture referred to on the reverse hereof by manual signature, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose. 

[The remainder of this page has been left intentionally blank] 

 

 7 

 IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed under its
corporate seal. 
  

											
	DATED:	 	  
	 		 		 		 	
		 		 		 	WELLS FARGO & COMPANY
					
		 		 		 	By:	 	  

		 		 		 		 	  

		 		 		 		 	Its:	 	  

						
	[SEAL]	 		 		 		 		 	
					
		 		 		 	Attest:	 	  

		 		 		 		 	  

		 		 		 		 	Its:	 	  

 

			
	 TRUSTEE’S CERTIFICATE OF AUTHENTICATION

This is one of the Securities of the series designated therein described in the within-mentioned Indenture.

 

	CITIBANK, N.A.,
		 	as Trustee
		
	By:	 	  

		 	Authorized Signature
	
	OR
	
	 WELLS FARGO BANK, N.A.,
as Authenticating Agent for the Trustee

		
	By:	 	  

		 	Authorized Signature

  

 8 

 [Reverse of Note] 

WELLS FARGO & COMPANY 

MEDIUM-TERM NOTE, SERIES K 

Due Nine Months or More From Date of Issue 

Notes Linked to a Global Equity Basket 

due August 7, 2013 

This Security is one of a duly authorized issue of securities of the Company (herein called the “Securities”), issued
and to be issued in one or more series under an indenture dated as of July 21, 1999, as amended or supplemented from time to time (herein called the “Indenture”), between the Company and Citibank, N.A., as Trustee (herein
called the “Trustee,” which term includes any successor trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of
rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the Securities, and of the terms upon which the Securities are, and are to be, authenticated and delivered. This Security is one of the series of the Securities
designated as Medium-Term Notes, Series K, of the Company, which series is limited to an aggregate principal amount or face amount, as applicable, of $25,000,000,000 or the equivalent thereof in one or more foreign or composite currencies. The
amount payable on the Securities of this series may be determined by reference to the performance of one or more equity-, commodity- or currency-based indices, exchange traded funds, securities, commodities, currencies, statistical measures of
economic or financial performance, or a basket comprised of two or more of the foregoing, or any other market measure or may bear interest at a fixed rate or a floating rate. The Securities of this series may mature at different times, be redeemable
at different times or not at all, be repayable at the option of the Holder at different times or not at all and be denominated in different currencies. 

Article Sixteen of the Indenture shall not apply to this Security. 

The Securities are issuable only in registered form without coupons and will be either (a) book-entry securities represented by one
or more Global Securities recorded in the book-entry system maintained by the Depositary or (b) certificated securities issued to and registered in the names of, the beneficial owners or their nominees. 

The Company agrees, to the extent permitted by law, not to voluntarily claim the benefits of any laws concerning usurious rates of
interest against a Holder of this Security. 
 Modification and Waivers 

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Holders of the Securities of each series to be affected under the Indenture at any time by the Company and the Trustee with the consent of the Holders of a majority in principal amount of the
Securities at the 
  

 9 

 
time Outstanding of all series to be affected, acting together as a class. The Indenture also contains provisions permitting the Holders of a majority in principal amount of the Securities of all
series at the time Outstanding affected by certain provisions of the Indenture, acting together as a class, on behalf of the Holders of all Securities of such series, to waive compliance by the Company with those provisions of the Indenture. Certain
past defaults under the Indenture and their consequences may be waived under the Indenture by the Holders of a majority in principal amount of the Securities of each series at the time Outstanding, on behalf of the Holders of all Securities of such
series. Solely for the purpose of determining whether any consent, waiver, notice or other action or Act to be taken or given by the Holders of Securities pursuant to the Indenture has been given or taken by the Holders of Outstanding Securities in
the requisite aggregate principal amount, the principal amount of this Security will be deemed to be equal to the amount set forth on the face hereof as the “Face Amount” hereof. Any such consent or waiver by the Holder of this Security
shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or
waiver is made upon this Security. 
 Defeasance 

Section 403 and Article Fifteen of the Indenture and the provisions of clause (ii) of Section 401(1)(B) of the Indenture,
relating to defeasance at any time of (a) the entire indebtedness on this Security and (b) certain restrictive covenants and certain Events of Default, upon compliance by the Company with certain conditions set forth therein, shall not
apply to this Security. The remaining provisions of Section 401 of the Indenture shall apply to this Security. 
 Authorized
Denominations 
 This Security is issuable only in registered form without coupons in denominations of $1,000 or any
amount in excess thereof which is an integral multiple of $1,000. 
 Registration of Transfer 

Upon due presentment for registration of transfer of this Security at the office or agency of the Company in the City of Minneapolis,
Minnesota, a new Security or Securities of this series, with the same terms as this Security, in authorized denominations for an equal aggregate Face Amount will be issued to the transferee in exchange herefor, as provided in the Indenture and
subject to the limitations provided therein and to the limitations described below, without charge except for any tax or other governmental charge imposed in connection therewith. 

This Security is exchangeable for definitive Securities in registered form only if (x) the Depositary notifies the Company that it
is unwilling or unable to continue as Depositary for this Security or if at any time the Depositary ceases to be a clearing agency registered under the Securities Exchange Act of 1934, as amended, and a successor depositary is not appointed within
90 days after the Company receives such notice or becomes aware of such ineligibility, (y) the Company in its sole discretion determines that this Security shall be exchangeable for definitive Securities in registered form and notifies the
Trustee thereof or (z) an Event of Default with respect to the Securities represented hereby has occurred and is continuing. If this Security is exchangeable pursuant to the preceding sentence, it shall be exchangeable for definitive Securities
in registered form, having the same date of issuance, Stated Maturity Date and other terms and of authorized denominations aggregating a like amount. 
  

 10 

 This Security may not be transferred except as a whole by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another nominee of the Depositary or by the Depositary or any such nominee to a successor of the Depositary or a nominee of such successor. Except as provided above, owners of
beneficial interests in this Global Security will not be entitled to receive physical delivery of Securities in definitive form and will not be considered the Holders hereof for any purpose under the Indenture. 

Prior to due presentment of this Security for registration of transfer, the Company, the Trustee and any agent of the Company or the
Trustee may treat the Person in whose name this Security is registered as the owner hereof for all purposes, whether or not this Security be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the
contrary. 
 Obligation of the Company Absolute 

No reference herein to the Indenture and no provision of this Security or the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the Redemption Amount at the times, place and rate, and in the coin or currency, herein prescribed, except as otherwise provided in this Security. 

No Personal Recourse 

No recourse shall be had for the payment of the Redemption Amount, or for any claim based hereon, or otherwise in respect hereof, or based
on or in respect of the Indenture or any indenture supplemental thereto, against any incorporator, stockholder, officer or director, as such, past, present or future, of the Company or any successor corporation, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise, all such liability being, by the acceptance hereof and as part of the consideration for the issuance hereof, expressly waived and released.

 Defined Terms 

All terms used in this Security which are defined in the Indenture shall have the meanings assigned to them in the Indenture unless
otherwise defined in this Security. 
 Governing Law 

This Security shall be governed by and construed in accordance with the law of the State of New York, without regard to principles of
conflicts of laws. 
  

 11 

 ABBREVIATIONS 

The following abbreviations, when used in the inscription on the face of this instrument, shall be construed as though they were written
out in full according to applicable laws or regulations: 
  

					
	TEN COM	 	—	 	as tenants in common
			
	TEN ENT	 	—	 	as tenants by the entireties
			
	JT TEN	 	—	 	as joint tenants with right of survivorship and not as tenants in common

  

											
	UNIF GIFT MIN ACT	 	—	 	  
	 	Custodian	 	  
	 	
		 		 	(Cust)	 		 	(Minor)	 	

  

	
	Under Uniform Gifts to Minors Act
	
	  
	(State)

 Additional
abbreviations may also be used though not in the above list. 
 FOR VALUE RECEIVED, the undersigned hereby sell(s) and
transfer(s) unto 
  

	
	 Please Insert Social Security or

Other Identifying Number of Assignee

	
	  

  

	
	  

	
	  

	
	  

(PLEASE PRINT OR TYPE NAME AND
ADDRESS INCLUDING POSTAL ZIP CODE OF ASSIGNEE) 
  

 12 

 the within Security of WELLS FARGO & COMPANY and does hereby irrevocably constitute and appoint
                     attorney to transfer the said Security on the books of the Company, with full power of substitution in the premises.

  

									
	Dated:	 		 	  
	 		 	
					
		 		 		 		 	  

					
		 		 		 		 	  

NOTICE: The signature to this assignment must correspond with the name as written upon the face of the within instrument in every particular, without
alteration or enlargement or any change whatever. 
  

 13

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