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Home My WebLink AboutResolution 1994 - 0006RESOLUTION NO.94-6 A JOINT RESOLUTION OF THE BOARD OF DIRECTORS OF COUNTY SANITATION DISTRICT NO.1 OF ORANGE COUNTY,CALIFORNIA,COUNTY SANITATION DISTRICT NO.2 OF ORANGE COUNTY,CALIFORNIA,COUNTY SANITATION DISTRICT NO.3 OF ORANGE COUNTY,CALIFORNIA,COUNTY SANITATION DISTRICT NO.5 OF ORANGE COUNTY,CALIFORNIA,COUNTY SANITATION DISTRICT NO.6 OF ORANGE COUNTY,CALIFORNIA,COUNTY SANITATION DISTRICT NO.7 OF ORANGE COUNTY,CALIFORNIA,COUNTY SANITATION DISTRICT NO.11 OF ORANGE COUNTY,CALIFORNIA, COUNTY SANITATION DISTRICT NO.13 OF ORANGE COUNTY, CALIFORNIA,AND COUNTY SANITATION DISTRICT NO.14 OF ORANGE COUNTY,CALIFORNIA AUTHORIZING THE ISSUANCE OF COUNTY SANITATION DISTRICTS NOS.1,2,3,5,6,7,11,13 AND 14 OF ORANGE COUNTY,CALIFORNIA TAXABLE COMMERCIAL PAPER NOTES AND PROVIDING THE TERMS AND CONDITIONS FOR THE ISSUANCE OF SAID COMMERCIAL PAPER NOTES Adopted January 12,1994 LA 1-62574.8 TABLE OF CONTENTS ARTICLE I DEFINITIONS Page Section 2.01. Section 2.02. Section 2.03. Section 2.04. Section 2.05. Section 2.06. Section 2.07. Section 2.08. Section 2.09. Definitions 2 Construction of Terms Utilized in this Resolution Content of Certificates and Opinions ARTICLE II GENERAL TERMS OF COMMERCIAL PAPER NOTES Authorization of Commercial Paper Notes Terms of Commercial Paper Notes Form of Commercial Paper Notes Execution and Authentication Commercial Paper Notes Mutilated, Lost,Destroyed or Stolen Negotiability Cancellation Fiscal and Other Agents The Depository Trust Company ARTICLE III Section 3.01. Section 3.02. Section 3.03. Section 3.04. Section 3.05. Section 3.06. Section 3.07. Section 3.08. Section 3.09. ISSUANCE AND SALE OF COMMERCIAL PAPER NOTES; SECURITY FOR COMMERCIAL PAPER NOTES 18 19 20 20 21 21 22 22 22 Section 4.01. Section 4.02. Section 4.03. Limitation on Issuance Maintenance of Standby Withdrawal Agreement Punctual Payment 22 23 Section 1.01. Section 1.02. Section 1.03. 13 13 14 14 15 15 16 16 16 16 17 Issuance and Sale of Commercial Paper Notes Proceeds of Sale of Commercial Paper Notes Payment Fund Proceeds Fund Paying Agent Fund Pledge;Payments Additional Security Additional Obligations Several and Limited Joint Obligations ARTICLE IV COVENANTS OF THE DISTRICTS 22 LAI-62574.8 1 Page Section 4.04.Acknowledgment of Revenue Covenants 23. Section 4.05.Opinion of Bond Counsel 23 ARTICLE V EVENTS OF DEFAULT AND REMEDIES OF NOTEOWNERS Section 5.01.Events of Default 23 Section 5.02.Suits at Law or in Equity and Mandamus 24 Section 5.03.Remedies Not Exclusive 24 Section 5.04.Commercial Paper Notes Not Subject to Acceleration 25 ARTICLE VI THE PAYING AGENT Section 6.01.Duties,Immunities and Liabilities of Paying Agent 25 Section 6.02.Merger or Consolidation 26 Section 6.03.Right of Paying Agent to Rely Upon Documents 26 Section 6.04.Preservation and Inspection of Documents 27 ARTICLE VII APPROVAL OF DOCUNENTS;GENERAL AUTHORIZATION Section 7.01.Approval of Standby Withdrawal Agreement 27 Section 7.02.Approval of Paying Agent Agreement 27 Section 7.03.Approval of Dealer Agreement 28 Section 7.04.Approval of Initial Offering Memorandum 28 Section 7.05.General Authorization;Further Action 28 ARTICLE VIII MISCELLANEOUS Section 8.01.Amendments or Modifications Without Consent of Owners 28 Section 8.02.Resolution to Constitute Contract; Equal Security 29 Section 8.03.Severability of Invalid Provisions 30 Section 8.04.Defeasance 30 Section 8.05.Liability of Districts Limited to Net Enterprise Revenues 30 Section 8.06.Successor Is Deemed Included in All 30 LAI-62574.8 ii Page Section 8.07.District No.1 Appointed as Districts’ Representative 31 Section 8.08.No Personal Liability of District Officials;Limited Liability of Districts to Owners 31 Section 8.09.Waiver of Notice 31 Section 8.10.Funds and Accounts 31 Section 8.11.Article and Section Headings and References 31 Section 8.12.Limitation of Benefits with Respect to Resolution 31 Section 8.13.Governing Law 32 Section 8.14.Effective Date of Resolution 33 Exhibit A -Form of Commercial Paper Note Exhibit B -Form of Standby Withdrawal Agreement Exhibit C -Form of Paying Agent Agreement Exhibit D -Form of Dealer Agreement Exhibit E -Form of Instructions to the Paying Agent Exhibit F -Form of Initial Offering Memorandum LAI-62574.8 lii Resolution No.94-6 JOINT RESOLUTION OF THE BOARD OF DIRECTORS OF COUNTY SANITATION DISTRICT NO.1 OF ORANGE COUNTY,CALIFORNIA, COUNTY SANITATION DISTRICT NO.2 OF ORANGE COUNTY, CALIFORNIA,COUNTY SANITATION DISTRICT NO.3 OF ORANGE COUNTY,CALIFORNIA,COUNTY SANITATION DISTRICT NO.5 OF ORANGE COUNTY,CALIFORNIA,COUNTY SANITATION DISTRICT NO. 6 OF ORANGE COUNTY,CALIFORNIA,COUNTY SANITATION DISTRICT NO.7 OF ORANGE COUNTY,CALIFORNIA,COUNTY SANITATION DISTRICT NO.11 OF ORANGE COUNTY,CALIFORNIA, COUNTY SANITATION DISTRICT NO.13 OF ORANGE COUNTY, CALIFORNIA,AND COUNTY SANITATION DISTRICT NO.14 OF ORANGE COUNTY,CALIFORNIA AUTHORIZING THE ISSUANCE OF COUNTY SANITATION DISTRICT NOS.1,2,3,5,6,7,11,13 AND 14 TAXABLE COMMERCIAL PAPER NOTES AND PROVIDING THE TERMS AND CONDITIONS FOR THE ISSUANCE OF SAID COMMERCIAL PAPER NOTES WHEREAS,each of the Districts (as hereinafter defined) has determined that it is in its best interest to participate jointly in short-term financings for working capital and other purposes; WHEREAS,each of the Districts has determined that it is in its best interests to borrow through the issuance of Commercial Paper Notes (as hereinafter defined)in a principal amount not to exceed at any one time $50,000,000; WHEREAS,each of the Districts has determined that in order to reduce interest costs and to provide for liquidity support for the Commercial Paper Notes it is necessary and desirable to enter into a Standby Withdrawal Agreement with the Treasurer-Tax Collector of the County of.Orange,as Fund Manager of the Orange County Investment Pool;and WHEREAS,Lehman Brothers has submitted an offer to act as the dealer for the Commercial Paper Notes and has submitted a form of Dealer Agreement to be executed in accordance with Section 7.03 hereof; NOW THEREFORE,County Sanitation District No.1 of Orange County,California,County Sanitation District No.2 of Orange County,California,County Sanitation District No.3 of Orange County,California,County Sanitation District No.5 of Orange County,California,County Sanitation District No.6 of Orange County,California,County Sanitation District No.7 of Orange County,California,County Sanitation District No.11 of Orange County,California,County Sanitation District No.13 of Orange County,California and County Sanitation District No.14 of Orange County,California do jointly hereby RESOLVE,DETERMINE AND ORDER as follows: LA 1-62574.8 ARTICLE I DEFINITIONS Section 1.01.Definitions Unless the context otherwise requires,the terms defined in this Section shall,for all purposes of this Resolution and of any Supplemental Resolution and of any certificate,opinion or other document herein mentioned,have the meanings herein specified,to be equally applicable to both the singular and plural forms of any of the terms herein defined.Unless otherwise defined in this Resolution,all terms used herein shall have the meanings assigned to such terms in the Law. “Acquisition Agreements”shall mean the 1986 Agreement for Acquisition and Construction,the 1990 Agreement for Acquisition and Construction,the 1991 Agreement for Acquisition and Construction,the 1992 Agreement for Acquisition and Construction,the 1992 Amendatory Agreement for Acquisition and Construction and the 1993 Amendatory Agreement for Acquisition and Construction. “Authorized Representative”shall mean the General Manager of the Districts or such other officer or employee of the Districts designated by the General Manager to act as an Authorized Representative. “Bond”shall mean,with respect to each District,any revenue bond,revenue note,warrant or other evidence of indebtedness (i)hereafter issued,incurred or delivered by such District for the financing or refinancing of extensions of, additions to,repairs and replacements to,renewals of,and improvements of the Enterprise of such District,payable out of Net Enterprise Revenues of such Enterprise,the payments under which rank on a parity with the Installment Payments and the final payments under which are due more than one year following the date of initial delivery thereof,and (ii)heretofore issued, incurred or delivered by such District for the financing of extensions of,additions to,repairs and replacements to, renewals of,and improvements of the Enterprise of such District. “Bond”shall not include any Obligation or any bond,note, warrant or other evidence of indebtedness to the extent payable from and secured by ad valorem property taxes which may be levied without limitation as to rate or amount. “Bond Counsel”shall mean Orrick,Herrington & Sutcliffe or any other nationally recognized firm of attorneys specializing in the field of municipal finance law,selected by the Districts. “Business Day”shall mean any day other than (i)a Saturday,Sunday or a day on which banking institutions in the state of California or the State of New York are authorized or obligated by law or executive order to be closed,(ii)a day on LAI-62574.8 2 which the New York Stock Exchange is authorized or obligated by law or executive order to be closed and (iii)a day upon which the office of the Liquidity Provider is authorized or obligated by law or executive order to be closed. “Certificate of the Districts”shall mean a written certificate signed by an Authorized Representative on behalf of the Districts in accordance with Section 1.03 hereof. “Closed Senior Obligations”shall mean,with respect to each District,(i)its 1986 Installment Payment (if any)and (ii)its 1991 Installment Payment (if any) “Commercial Paper Note”shall mean a note authorized by the provisions of this Resolution,having the terms and characteristics specified in Article II hereof and in the form described in Exhibit A attached hereto. “Dealer”shall mean Lehman Brothers or any nationally recognized successor commercial paper dealer under the Dealer Agreement. “Dealer Agreement”shall mean the Dealer Agreement to be entered into in accordance with Section 7.03 hereof, substantially in the form of Exhibit D attached hereto,as it may be amended,supplemented or otherwise modified from time to time, or any dealer agreement with a substitute or successor dealer. “District No.1”shall mean County Sanitation District No.1 of Orange County,California. “District No.2”shall mean County Sanitation District No.2 of Orange County,California. “District No.3”shall mean County Sanitation District No.3 of Orange County,California. “District No.5”shall mean County Sanitation District No.5 of Orange County,California. “District No.6”shall mean County Sanitation District No.6 of Orange County,California. “District No.7”shall mean County Sanitation District No.7 of Orange County,California. “District No.11”shall mean County Sanitation District No.11 of Orange County,California. “District No.13”shall mean County Sanitation District No.13 of Orange County,California. “District No.14”shall mean County Sanitation District No.14 of Orange County,California. LA1-62574.8 3 “District”shall mean any one of the Districts. “Districts”shall mean,collectively,District No.1, District No.2,District No.3,District No.5,District No.6, District No.7,District No.11,District No.13 and District No. 14. “Enterprise”shall mean,with respect to each District, the entire sanitary sewerage enterprise of such District, including its ownership interest pursuant to the Joint Agreement, and further including all real and personal property,or any interest therein,constituting a part thereof and all additions and improvements thereto whether now existing or hereafter acquired,constructed or installed. “Event of Default”shall mean any occurrence or event specified in Section 5.01 hereof. “Fees and Expenses”shall mean all amounts owed by the Districts to the Liquidity Provider,the Paying Agent and the Dealer for fees and expenses incurred under this Resolution and the fees and expenses of other Persons performing services under this Resolution or any Supplemental Resolution. “Fiscal Year”shall mean the period beginning on July 1 of each year and ending on the next succeeding June 30,or any other twelve-month period hereafter selected and designated as the official fiscal year period of the Districts. “General Manager”shall mean the General Manager of the Districts. “Generally Accepted Accounting Principles”shall mean the uniform accounting and reporting procedures set forth in publications of the American Institute of Certified Public Accountants or its successor and the National Council on Governmental Accounting or its successor,or by any other generally accepted authority on such procedures,and includes,as applicable,the standards set forth by the Financial Accounting Standards Board or its successor. “Gross Enterprise Revenues”shall mean,with respect to each District,all gross income and revenue received or receivable by such District from the ownership or operation of its Enterprise,determined in accordance with generally accepted accounting principles,including all rates and charges received by such District for the services of its Enterprise,such District’s share,if any,of ad valorem property taxes levied by the County of Orange and investment income (to the extent generally available to pay costs with respect to its Enterprise) of the District and all other money howsoever derived by such District from the ownership or operation of its Enterprise or arising from its Enterprise,but excluding (i)grants to the extent not generally available to pay costs with respect to its LAI-62574.8 4 Enterprise,(ii)ad valorem property taxes to the extent required by law to be used to pay principal and premium,if any,of or interest on indebtedness of the District and (iii)refundable deposits made to establish credit and advances or contributions in aid of construction and line extension fees received or receivable by the District. “Installment Payments”shall mean,with respect to.each District,the installment payments to be made by the Districts under the 1993 Amendatory Agreement for Acquisition and Construction,including additional payments thereunder. “Investment Securities”shall mean any of the following,except to the extent not permitted by the laws of the State of California as an investment for the moneys to be invested therein at the time of investment: (i)(a)(1)direct general obligations of the United States of America,(2)obligations the payment of the principal of and interest on which are unconditionally guaranteed as to the full and timely payment by the United States of America,or (3)any fund or other pooling arrangement whose assets consist exclusively of the obligations listed in clause (1)or (2)of this clause (i)(a)and which is rated at least “P-i.”by Moody’s; provided that,such obligations shall not include unit investment trusts or mutual fund obligations;(b)advance refunded tax-exempt obligations secured by the obligations specified in clause (i)(a)which tax-exempt obligations are rated “Aaa”by Moody’s and “AAA”by Standard &Poor’s as a result of such obligations being secured by said obligations;(c)bonds,debentures or notes issued by any of the following federal agencies:Federal Farm Credit Bank or Federal National Mortgage Association;provided that such bonds,debentures or notes shall be the senior obligations of such agencies (including participation certificates);and (d)bonds,debentures or notes issued by any Federal agency hereafter created by an act of Congress,the payment of the principal of and interest on which are unconditionally guaranteed by the United States of America as to the full and timely payment;provided,that,such obligations shall not include unit investment trusts or mutual fund obligations; (ii)Bonds,debentures,notes,participation certificates or other evidences of indebtedness issued,or the principal of and interest on which are unconditionally guaranteed,by the Federal Intermediate Credit Bank,the Federal Home Loan Bank System,the Government National Mortgage Association or any other agency or instrumentality of or corporation wholly owned by the United States of America when such obligations are backed by the full faith and credit of the United States for the full and timely payment of principal and interest; LAI-62574.8 5 (iii)Obligations of any state of the United States or any political subdivision thereof,which at the time of investment are rated “Aa3”or higher by Moody’s and “AA-”or higher by Standard &Poor’s;or which are rated by Moody’s “VMIGl”or better and by Standard &Poor’s “A-l+”or better with respect to commercial paper,or “VMIGl”and “SP-l”, respectively,with respect to municipal notes; (iv)Bank time deposits evidenced by certificates of deposit,deposit accounts,and bankers’acceptances,issued by any bank,trust company or national banking association insured by the Federal Deposit Insurance Corporation (including the Paying Agent);provided that (a)such bank, trust company,or national banking association be rated ‘tAa3”or better by Moody’s and h!AA~u or better by Standard & Poor’s;and,(b)the aggregate of such bank time deposits and bankers’acceptances issued by any bank,trust company or banking association does not exceed at any one time ten percent (l0~)of the aggregate of the capital stock,surplus and undivided profits of such bank,trust company or banking association and that such capital stock,surplus and undivided profits shall not be less than Fifteen Million Dollars ($15,000,000); (v)Repurchase agreements with any bank,trust company or national banking association insured by the Federal Deposit Insurance Corporation (including the Paying Agent) or with any government bond dealer recognized as a primary dealer by the Federal Reserve Bank of New York,which agreements are fully and continuously secured by a valid and perfected first priority security interest in obligations described in paragraph (i)or (ii)of this definition, provided that either such bank,trust company or national banking association is rated “Aa3”or better by Moody’s and “AA-”or better by Standard &Poor’s; (vi)Repurchase agreements with maturities of not more than one (1)year entered into with financial institutions such as banks or trust companies organized under state law or national banks or banking associations (including the Paying Agent),insurance companies,or government bond dealers reporting to,trading with,and recognized as a primary dealer by,the Federal Reserve Bank of New York and a member of the Security Investors Protection Corporation or with a dealer or parent holding company that is rated or whose long-term debt obligations are rated in one of the two highest rating categories (without regard to any rating refinement or gradation by numerical modifier or otherwise) by Moody’s and Standard &Poor’s,provided such repurchase agreements are in writing,secured by obligations described in paragraphs (i)and (ii)of this definition having a fair market value,exclusive of accrued interest,at least equal to the amount invested in the repurchase agreements and in which the Paying Agent has a perfected first lien in,and LA1-62574.8 6 retains possession of,such obligations free from all third party claims; (vii)Investment agreements with any corporation, including banking or financial institutions,the corporate debt of which is rated,at the time of investment,“Aa3”or better by Moody’s and “AA-”or better by Standard &Poor’s; (viii)Guaranteed investment contracts or similar funding agreements issued by insurance companies,which agreements are fully and continuously secured by a valid and perfected priority security interest in obligations described in paragraph (i)or (ii)of this definition,provided that either the long term corporate debt of such insurance company,at the time of investment,is rated “Aa3”or better by Moody’s and “Ak-”or better by Standard &Poor’s,or that the following conditions are met:(a)•the market value of the collateral is maintained at levels acceptable to Moody’s and Standard &Poor’s,(b)the Paying Agent or a third party acting solely as agent for the Paying Agent has possession of the collateral,(c)the Paying Agent has a perfected first priority security interest ln the collateral,(d)the collateral is free and clear of third-party liens,and (e) failure to maintain the requisite collateral level will require the Paying Agent to liquidate collateral; (ix)Corporate commercial paper rated “P1”or better by Moody’s and “A-i+”or better by Standard &Poor’s at the time of investment; (x)Taxable government money market portfolios restricted to obligations the payment of principal and interest with respect to which is guaranteed by,the United States of america or repurchase agreements secured by such obligations,and which are rated “AAA-M”or “AAA-M/G”by Standard &Poor’s and “P-i”by Moody’s; (xi)Deposits with the Local Agency Investment Fund of the State of California,as may otherwise be permitted by law; (xii)Shares in the Franklin Adjustable U.S.Government Securities Fund or any other similar fund having at least $1,000,000,000 in assets and invested solely in securities directly guaranteed by the U.S.government or its agencies and rated “AAA-m”by Standard &Poor’s or comparable ratings by Moody’s;and (xiii)Deposits with the Orange County Investment Pool. “Joint Agreement”shall mean the Agreement,effective as of July 1,1985,as amended,pursuant to which the Districts currently maintain a centralized and joint administrative organization. LA1-62574.8 7 “Junior Obligations”shall mean,with respect to each District,(i)its 1990 Installment Payments and payments due under its 1990 Reimbursement Agreement,if any,(ii)its 1992 Installment Payments and payments under the 1992 Liquidity Facility and (iii)any other obligation,bond,note,warrant or other evidence of indebtedness,payable out of Net Enterprise Revenues,the payments under which are designated as Junior Obligations. “Law”shall mean Section 4700 ~~q.of the Health and Safety Code of the State of California as now in effect and as it may from time to time hereafter be amended or supplemented. “Liquidity Provider”shall mean the Treasurer-Tax Collector of the County of Orange,as Fund Manager of the Orange County Investment Pool. “Maintenance and Operation Costs of the Enterprise” shall mean,with respect to each District,the costs paid or incurred by such District for maintaining and operating its Enterprise,determined in accordance with Generally Accepted Accounting Principles,including all expenses necessary to maintain and preserve the Enterprise in good repair and working order,and including all administrative costs of such District that are charged directly or apportioned to the operation of the Enterprise,such as salaries and wages of employees,overhead, taxes (if any)and insurance premiums,and including all other reasonable and necessary costs of such District or charges required to be paid by it to comply with the terms of the Acquisition Agreements;but excluding in all cases (i) depreciation,replacement and obsolescence charges or reserves therefor,(ii)amortization of intangibles,(iii)capital costs of the sewer facilities owned or operated by the District,(iv) payments due and payable under any contract,instrument or other agreement for the purchase,acquisition or lease of facilities, properties,structures or equipment for sewer facilities to be owned or operated by or on behalf of the District,payable out of Gross Enterprise Revenues prior to the Installment Payments and the final payment under which is due more than one year following the effective date thereof,and (v)payments to any fund of such District (other than amounts properly charged for administrative costs in accordance with this definition). “Moody’s”shall mean Moody’s Investors Service,a corporation duly organized and existing under and by virtue of the laws of the State of Delaware,and its successors and assigns,except that if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency,then the term “Moody’s”shall be deemed to refer to any other nationally recognized securities rating agency selected by the Districts. LAI-62574.8 8 “Net Enterprise Revenues”shall mean,with respect to each District,the Gross Enterprise Revenues less the Maintenance and Operation Costs of its Enterprise. “1986 Agreement for Acquisition and Construction”shall mean the Agreement for Acquisition and Construction of Joint Facilities,dated as of August 1,1986,by and among County Sanitation District No.1 of Orange County,California,County Sanitation District No.2 of Orange County,California and County Sanitation District No.3 of Orange County,California,as amended or supplemented from time to time. “1986 Installment Payments”shall have the meaning ascribed to the term “Installment Payments”in the 1986 Agreement for Acquisition and Construction. “1990 Agreement for Acquisition and Construction”shall mean the Agreement for Acquisition and Construction,dated as of November 1,1990,by and among the Districts,as amended or supplemented from time to time. “1990 Installment Payments”shall have the meaning ascribed to the term “Installment Payments”in the 1990 Agreement for Acquisition and Construction. “1990 Reimbursement Agreement”shall have the meaning ascribed to the term “Reimbursement Agreements”in the 1990 Trust Agreement. “1990 Trust Agreement”shall mean the Trust Agreement, dated as of November 1,1990,among Texas Commerce Bank National Association,as trustee,and the Districts,as amended or supplemented from time to time. “1991 Agreement for Acquisition and Construction”shall mean the Agreement for Acquisition and Construction,dated as of May 1,1991,by and among the Districts as amended by the 1992 Arnendatory Agreement for Acquisition and Construction and by the Acquisition Agreement,as amended or supplemented from time to time. “1991 Installment Payments”shall have the meaning as ascribed to the term “Installment Payments”in the 1991 Agreement for Acquisition and Construction. “1992 Agreement for Acquisition and Construction”shall mean the Agreement f or Acquisition and Construction,dated as of July 1,1992,by and among County Sanitation District No.1 of Orange County,California,County Sanitation District No.2 of Orange County,California,County Sanitation District No.3 of Orange County,California,County Sanitation District No.6 of Orange County,California,County Sanitation District No.7 of Orange County,California and County Sanitation District No.11 LA1-62574.8 9 “Outstanding”shall mean,with respect to the Commercial Paper Notes,all Commercial Paper Notes which have been authenticated and delivered under this Resolution,except: (a)Commercial Paper Notes cancelled or delivered to the Paying Agent for cancellation and,in all cases,with the intent to extinguish the debt represented thereby; (b)Commercial Paper Notes deemed to be paid in accordance with Section 8.04 hereof; (c)Commercial Paper Notes in lieu of which other Commercial Paper Notes have been authenticated under Section 2.05 hereof; (d)Commercial Paper Notes that have become due and for the payment of which sufficient moneys,including interest accrued to the due date,are held in trust by the Districts; (e)Commercial Paper Notes which,under the terms of this Resolution or any Supplemental Resolution pursuant to which they were issued,are deemed to be no longer Outstanding;and (f)for purposes of any consent or other action to be taken by the holders of a specified percentage of Commercial Paper Notes under this Resolution,Commercial Paper Notes held by or for the account of the Districts or by any person controlling,controlled by or under common control with the Districts,unless such Commercial Paper Notes are pledged to secure a debt to an unrelated party,in which case such Commercial Paper Notes shall,for purposes of consents and other holder action,be deemed to be Outstanding and owned by the party to which such Commercial Paper Notes are pledged. “Owner”means the registered owner of a Commercial Paper Note. “Paying Agent”shall mean Bankers Trust Company,a New York banking corporation or any Person acting as its agent or its successor in interest acting under the Paying Agent Agreement. “Paying Agent Accounts”shall mean the accounts within the Paying Agent Fund established pursuant to Section 3.06 hereof. “Paying Agent Agreement”shall mean the Commercial Paper Issuing and Paying Agent Agreement to be entered into in accordance with Section 7.02 hereof,substantially in the form of Exhibit C attached hereto,as it may be amended,supplemented or otherwise modified from time to time,or any paying agent agreement with a substitute or successor paying agent. LA1-62574.8 11 “Paying Agent Fund”shall mean the fund established pursuant to Section 3.05 hereof. “Payment Accounts”shall mean the accounts within the Payment Fund established pursuant to Section 3.05 hereof. “Payment Fund”shall mean the fund described in Section 3.03 hereof. “Person”shall mean an individual,corporation,firm, association,partnership,trust,or other legal entity or group of entities including a governmental entity or any agency or political subdivision thereof. “Prior Lien Obligations”shall mean,with respect to each District,its Senior Obligations and its Junior Obligations, and any obligations of such District payable prior to or on a parity with any of the foregoing. “Proceeds Accounts”shall mean the accounts within the Proceeds Fund established pursuant to Section 3.04 hereof. “Proceeds Fund”shall mean the fund established pursuant to Section 3.04 hereof. “Proportionate Share”shall mean,with respect to each District during any Fiscal Year,the percentage of liability for repayment of the Commercial Paper Notes set forth with respect to such District by joint resolution of the Districts as soon as practicable prior to such Fiscal Year,which percentage shall be determined by (i)reference to such District’s sewage flow in proportion to the other Districts,for the immediately preceding Fiscal Year and (ii)the procedures set forth in the Joint Agreement. “Rating Category”shall mean (1)with respect to any long-term rating category,all ratings designated by a particular letter or combination of letters,without regard to any numerical modifier,plus or minus sign or other modifier and (ii)with respect to any short-term or commercial paper rating category, all ratings designated by a particular letter or combination of letters and taking into account any numerical modifier,but not any plus or minus sign or other modifier. “Resolution”shall mean this Resolution No.94-6 of the Districts,adopted on January 12,1994,as it may hereafter be amended,supplemented or otherwise modified. “Secretary”shall mean the Secretary of the Districts. “Senior Obligations”shall mean,with respect to each District,all of its Closed Senior Obligations,Bonds and Obligations.’ LA1-62574.8 12 “Standard &Poor’s”shall mean Standard &Poor’s Ratings Group,a division of McGraw Hill,a corporation duly organized and existing under and by virtue of the laws of the State of New York,and its successors and assigns,except that if such division shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency,then the term “Standard &Poor’s”shall be deemed to refer to any other nationally recognized securities rating agency selected by the Districts. “Standby Withdrawal Agreement”shall mean the Standby Withdrawal Agreement to be entered into with the Liquidity Provider in accordance with Section 7.01 hereof,in substantially the form of Exhibit B hereto,as it may be amended,supplemented or otherwise modified from time to time. “Supplemental Resolution”shall mean any resolution adopted in accordance with the terms hereof amending or supplementing this Resolution or another Supplemental Resolution. “Withdrawal”shall mean a withdrawal of funds made and subject to the provisions set forth in the Standby Withdrawal Agreement. Section 1.02.Construction of Terms Utilized in this Resolution If appropriate in the context of this Resolution, words of the singular number shall be considered to include the plural,words of the plural number shall be considered to include the singular,and words of the masculine,feminine or neuter gender shall be considered to include the other genders. Section 1.03.Content of Certificates and Opinions Every certificate or opinion provided for in this Resolution with respect to compliance with any provision hereof shall include (1) a statement that the Person making or giying such certificate or opinion has read such provision and the definitions herein relating thereto:(2)a brief statement as to the nature and scope of the examination or investigation upon which the certificate or opinion is based;(3)a statement (a)that,in the opinion of such Person,he or she has made or caused to be made such examination or investigation as is necessary to enable him or her to express an informed opinion with respect to the subject matter or (b)that he or she had made or caused to be made his or her examination or investigation with respect to the subject matter in accordance with specified professional standards:and (4)a statement as to whether,in the opinion of such Person, such provision has been complied with. Any such certificate or opinion made or given by an officer or employee of the Districts may be based,insofar as it relates to legal or accounting matters,upon a certificate or opinion of or representation by counsel,an accountant or an independent consultant,unless such officer or employee knows,or in the exercise of reasonable care should have known,that the LAI-62574.8 13 certificate,opinion or representation with respect to the matters upon which such certificate or statement may be based,as aforesaid,is erroneous.Any such certificate or opinion made or given by counsel,an accountant or an independent consultant may be based,insofar as it relates to factual matters (with respect to which information is in the possession of the Districts)upon a certificate or opinion of or representation by an officer or employee of the Districts,unless such counsel,accountant or independent consultant knows,or in the exercise of reasonable care should have known,that the certificate or opinion or representation with respect to the matters upon which such Person’s certificate or opinion or representation may be based, as aforesaid,is erroneous.The same officer or employee of the Districts,or the same counsel or accountant or independent consultant,•as the case may be,need not certify to all of the matters required to be certified under any provision of this Resolution,but different officers,employees,counsel, accountants or independent consultants may certify to different matters,respectively. ARTICLE II GENERAL TERMS OF COMMERCIAL PAPER NOTES Section 2.01.Authorization of Con~tercia1 Paper Notes At any time after the adoption of this Resolution,the Districts may execute and the Paying Agent may authenticate and,at the request of the Districts,deliver Commercial Paper Notes in an aggregate principal amount not to exceed FIFTY MILLION DOLLARS ($50,000,000)at any time Outstanding f or the purpose of financing construction costs,Maintenance and Operation Costs of the Enterprise and other working capital requirements of the Districts and refunding Commercial Paper Notes issued pursuant to the provisions hereof.The authorizations hereof are all in accordance with and subject to the terms,conditions and limitations contained herein and in the Standby Withdrawal Agreement. Section 2.02.Terms of Commercial Paper Notes Subject to Section 3.0].of this Resolution,Commercial Paper Notes to be designated “County Sanitation District Nos.1,2,3, 5,6,7,11,13 and 14 of Orange County,California Taxable Commercial Paper Notes”may be issued and sold and delivered from time to time in such principal amounts as determined by an Authorized Representative in minimum denominations of $100,000 and integral multiples of $1,000 in excess thereof,numbered as the Paying Agent shall determine and maturing and becoming due and payable on such dates as an Authorized Representative shall determine at the time of sale;provided,however,that no Commercial Paper Note shall (i)mature on a day that is not a Business Day or (ii)have a term in excess of three hundred sixty-five (365)days. LAI-62574.8 14 Subject to applicable terms,limitations and procedures contained herein,Commercial Paper Notes herein authorized shall be dated as of their date of issuance,bear no interest and be sold at such discount to bear aneffective interest rate per annum computed on the basis of a 360-day year of twelve 30-day months as may be approved by an Authorized Representative or bear interest at such rate per annum computed on the basis of actual days elapsed and on a 365-day year as may be approved by an Authorized Representative with notice to the Paying Agent,and may be sold in such manner at public or private sale,all as an Authorized Representative shall approve at the time of the sale thereof.Interest payments,if any,will be in the amount of interest accrued from and including the date of issuance of such Commercial Paper Notes to but excluding their maturity date. Interest or original issue discount with respect to the Commercial Paper Notes is not purported to be excluded from groâs income for federal income tax purposes. Subject to and qualified by the provisions of Section 2.09 of this Resolution,the Commercial Paper Notes shall be issued in registered form.Both principal of and interest on the Commercial Paper Notes shall be payable in lawful money of the United States of America in same day funds,without exchange or collection charges to the Owner of the Commercial Paper Note;, the principal thereon and interest thereof to be payable upon presentation and surrender of the Commercial Paper Note at the corporate trust office of the Paying Agent. The Districts and the Paying Agent may treat the registered owner as the absolute owner of any Commercial Paper Note for the purpose of receiving payment thereof and for all purposes,and the Districts and the Paying Agent shall not be affected by any notice or knowledge to the contrary. Section 2.03.Form of Commercial Paper Notes The Commercial Paper Notes and the Certificate of Authentication to appear on each of the Commercial Paper Notes shall be substantially in the form set forth in Exhibit A attached hereto with such appropriate insertions,omissions,substitutions and other variations as are permitted or required by this Resolution and may have such letters,numbers or other marks of identification (including identifying numbers and letters of the Committee on Uniform Securities Identification Procedures of the American Liquidity Providers Association)and such legends and endorsements thereon as may,consistently herewith,be approved by an Authorized Representative. The Commercial Paper Notes shall be printed, lithographed or engraved or produced in any other similar manner, or typewritten,all as determined and approved by an Authorized Representative. Section 2.04.Execution and Authentication The Commercial Paper Notes shall be executed on behalf of the LAI-62574.8 15 Districts by the General Manager and the Secretary under its seal reproduced or impressed thereon.The signature of said officers on the Commercial Paper Notes may be manual or facsimile. Commercial Paper Notes bearing the manual or facsimile signatures of individuals who are or were the proper officers of the Districts on the date of execution thereof shall be deemed to be duly executed on behalf of the Districts,notwithstanding that such individuals or either of them shall cease to hold such offices at the time of the initial sale and delivery or any subsequent sale,exchange and transfer of Commercial Paper Notes authorized to be issued hereunder. No Commercial Paper Note shall be entitled to any right or benefit under this Resolution,or be valid or obligatory for purposes of this Resolution unless there appears on such Commercial Paper Note a certificate of authentication substantially in the form provided in Exhibit A attached hereto, executed by the Paying Agent by manual signature,and such certificate upon any Commercial Paper Note shall be conclusive evidence that such Commercial Paper Note has been duly certified and delivered. Section 2.05.Commercial Paper Notes Mutilated,Lost, Destroyed or Stolen If any Commercial Paper Note shall become mutilated,the Districts,at the expense of the Owner of said Commercial Paper Note,shall execute and deliver a new Commercial Paper Note of like tenor in exchange and in substitution for the Commercial Paper Note so mutilated,but only upon surrender to the Districts or the Paying Agent of the Commercial Paper Note so mutilated.If any Commercial Paper Note be lost,destroyed or stolen,evidence of such loss,destruction or theft may be submitted to the Districts and the Paying Agent and,if such evidence be satisfactory to the Districts and the Paying Agent and indemnity satisfactory to the Districts and the Paying Agent shall be given,then at the expense of the Owner the Districts shall execute and deliver and the Paying Agent shall authenticate a new Commercial Paper Note of like tenor in lieu of and in substitution for the Commercial Paper Note so lost,destroyed or stolen.Neither the Districts nor the Paying Agent shall treat both the original Commercial Paper Note and any substitute Commercial Paper Note as being Outstanding for the purpose of determining the principal amount of Commercial Paper Notes which may be issued and Outstanding hereunder;both the original and the substitute Commercial Paper Note shall be treated as one and the same. Section 2.06.Negotiability The obligations issued hereunder shall be,and shall have all of the qualities and incidents of,a negotiable instrument under the laws of the State of California,and each successive Owner,in accepting any of such obligations,shall be conclusively deemed to have agreed that such obligations have all of the qualities and incidents of a negotiable instrument under the laws of the State of California. LAI-62574.8 16 Section 2.07.Cancellation All Commercial Paper Notes which at maturity are surrendered to the Paying Agent for the collection of the principal and interest thereof shall,upon payment,be cancelled and destroyed by the Paying Agent,and the Paying Agent forthwith shall transmit to the Districts a certificate identifying such Commercial Paper Notes and stating that such Commercial Paper Notes have been duly cancelled and destroyed. Section 2.08.Fiscal and Other Agents In furtherance of the purposes of this Resolution,the Districts may from time to time appoint and provide for the payment of such additional fiscal,paying or other agents or trustees as it may deem necessary or appropriate in connection with the Commercial Paper Notes.The Paying Agent shall not be responsible for the actions or omissions of any such fiscal,paying or other agents or trustees. Section 2.09.The Depository Trust Company This Section shall become operative only when The Depository Trust Company determines to accept the Commercial Paper Notes.Prior to that time,Commercial Paper Notes shall be registered as provided in Section 2.02. (A)The Commercial Paper Notes shall be initially issued and registered in the name of “Cede &Co.,”as nominee of The Depository Trust Company,New York,New York (hereinafter, Cede &Co.and The Depository Trust Company are referred to collectively as “The Depository Trust Company”).An Authorized Representative is hereby authorized and directed to negotiate with The Depository Trust Company a Letter of Representations (the “Letter of Representations”)and is authorized to execute and deliver such Letter of Representations in a form acceptable to it.Registered ownership of the Commercial Paper Notes,or any portion thereof,may not thereafter be transferred except as set forth in Section 2.09(B). (B)The Commercial Paper Notes shall be initially issued and registered as provided in Section 2.09(A).Registered ownership of such Commercial Paper Notes,or any portions thereof,may not thereafter be transferred except: (i)to any successor of The Depository Trust Company,or its nominee,or of any substitute depository designated pursuant to clause (ii)of this subsection (B) (“Substitute Depository”);provided that any successor of The Depository Trust Company or Substitute Depository shall be qualified under any applicable laws to provide the service proposed to be provided by it; (ii)to any Substitute Depository not objected to by an Authorized Representative,upon (1)the resignation of The Depository Trust Company or its successor (or any Substitute Depository or its successor)from its functions as depository,or LAI-62574.8 17 (2)a determination by an Authorized Representative to substitute another depository for The Depository Trust Company (or its successor)because The Depository Trust Company (or its successor)is no longer able to carry out its functions as depository;provided that any such Substitute Depository so selected shall be qualified under any applicable laws to provide the services proposed to be provided by it;or (iii)to any person as provided below,upon (1)the resignation of The Depository Trust Company or its successor (or any Substitute Depository or its successor)from its functions as depository,or (2)a determination by an Authorized Representative to discontinue using a depository. (C)In the case of any transfer pursuant to clause Ci) or clause (ii)of Section 2.09(B),upon receipt of all Outstanding Commercial Paper Notes by the Paying Agent,together with a written request of an Authorized Representative to the Paying Agent designating the Substitute Depository,a single new Commercial Paper Note for each maturity of Commercial Paper Notes then Outstanding,which the Districts shall prepare or cause to be prepared,shall be executed and delivered,registered in the name of such successor or such Substitute Depository,or its nominee,as the case may be,all as specified in such written request of an Authorized Representative.In the case of any transfer pursuant to clause (iii)of Section 2.09(B),upon receipt of all outstanding Commercial Paper Notes by the Paying Agent,together with a written request of an Authorized Representative to the Paying Agent,new Commercial Paper Notes, which the Districts shall prepare or cause to be prepared,shall be executed and delivered in such denominations and registered as provided in Section 2.02,provided that the Paying Agent shall deliver such new Commercial Paper Notes as soon as practicable after the date of receipt of such written request from an Authorized Representative. CD)Notwithstanding any other provision of this Resolution and so long as all outstanding Certificates are registered in the name of Cede &Co.as nominee of The Depository Trust Company or its registered assigns,the Districts and the Paying Agent shall cooperate with The Depository Trust Company, as sole registered Owner,and its registered assigns in effecting payment of the principal of and interest on the Certificates by arranging for payment in such manner that funds for such payments are properly identified and are made available on the date they are due all in accordance with the Letter of Representations,the provisions of which the Paying Agent may rely upon to implement the foregoing procedures notwithstanding any inconsistent provisions herein. LAI-62574.8 18 ARTICLE III ISSUANCE AND SALE OF COl’Q(ERCIAL PAPER NOTES; SECURITY FOR CO~ERCIAL PAPER NOTES Section 3.01.Issuance and Sale of Conmtercial Pager Notes At any time after the adoption of this Resolution,the Districts may execute and the Paying Agent shall authenticate and deliver Commercial Paper Notes in accordance with telephonic, facsimile,computer or written instructions of an Authorized Representative delivered to the Paying Agent in the manner specified below.To the extent such instructions are not written,they shall be confirmed in writing by an Authorized Representative within twenty-four (24)hours.Said instructions shall be in the form attached hereto as Exhibit E and shall specify such principal amounts,dates of issue,series designation,maturities,rates of interest,if any,and other terms and conditions which are hereby authorized and permitted to be fixed by an Authorized Representative at the time of sale of the Commercial Paper Notes.Such instructions shall include the purchase price of the Commercial Paper Notes,and a request that the Paying Agent authenticate such Commercial Paper Notes by counter signature of its authorized officer or employee and deliver them upon receipt of payment in accordance with the custom then prevailing in the New York financial market in regard to such Commercial Paper Notes.The rules of the New York Clearinghouse shall apply thereto.Such instructions shall also contain provisions representing that all action on the part of the Districts necessary for the valid issuance of the Commercial Paper Notes then to be issued has been taken,that all provisions of California law necessary for the valid issuance of such Commercial Paper Notes with provision for interest exemption from California personal income taxation have been complied with,and that such Commercial Paper Notes in the possession of the Owners thereof will be valid and enforceable obligations of the Districts according to their terms,subject to the exercise of judicial discretion in accordance with general principles of equity and bankruptcy,insolvency,reorganization,moratorium and other similar laws affecting creditors’rights heretofore or hereafter enacted and that the stated interest on the Commercial Paper Notes is exempt from California personal income tax.Such instructions shall also certify that: (i)no Event of Default under Section 5.01 hereof has occurred and is continuing as of the date of such certificate; (ii)each of the Districts has full power and authority to perform its duties and obligations with respect to the Commercial Paper Notes and the Standby Withdrawal Agreement; LAI-62574.8 19 (iii)each of the Districts is in compliance with the covenants set forth in Article IV hereof as of the date of such instructions;and (iv)the amount of principal and interest with respect to the Commercial Paper Notes to be Outstanding does not exceed the amount then available under the Standby Withdrawal Agreement. Section 3.02.Proceeds of Sale of Commercial Paper Notes The proceeds of the sale of any Commercial Paper Notes (net of all expenses and costs of sale and issuance)shall be applied by the Paying Agent in the following priority for the following purposes: (i)proceeds necessary for the payment of maturing Outstanding Commercial Paper Notes shall be deposited in amounts equal to each District’s Proportionate Share in the appropriate accounts of the Paying Agent Fund as instructed by the Districts,and expended theref or; (ii)proceeds not deposited in the Paying Agent Fund as provided in subparagraph (i)above shall be transferred to the Districts and deposited by the Districts in amounts• equal to each Districts’Proportionate Share in the appropriate accounts of the Proceeds Fund as instructed by the Districts,and used and applied in accordance with the provisions of Section 3.04 hereof. Section 3.03.Payment Fund The Districts shall jointly establish,maintain and hold in trust a separate fund hereby designated as the “County Sanitation District Nos.1,2, 3,5,6,7,11,13 and 14 Taxable Commercial Paper Note Payment Fund”(the “Payment Fund”),with separate accounts for each District therein (each,a “Payment Account”).Each District shall cause its Net Enterprise Revenues,after payment in full of all amounts then owing by such District on Prior Lien Obligations,to be deposited into its respective Payment Account in accordance with the terms of this Resolution.Each District shall transfer moneys on deposit in its respective Payment Account to the Paying Agent Fund as needed for the Paying Agent to pay such District’s Proportionate Share of the principal of and interest on Commercial Paper Notes at the maturity dates thereof.~mounts remaining in a District’s Payment Account not then necessary for the purposes thereof may be expended by such District for any lawful purpose.Pending the expenditure of moneys in the Payment Accounts for authorized purposes,moneys deposited therein may be commingled and invested in Investment Securities.Any income received from such investments shall be deposited,as received,into the applicable Payment Account. Section 3.04.Proceeds Fund The Districts shall jointly establish,maintain and hold in trust a separate fund hereby designated as the “County Sanitation District Nos.1,2, LAI-62574.8 20 3,5,6,7,11,13 and 14 Taxable Commercial Paper Note Proceeds Fund”(the “Proceeds Fund”),with separate accounts for each District therein (each,a “Proceeds Account”).Moneys deposited in the Proceeds Accounts shall remain therein until from time to time expended to pay construction costs,Maintenance and Operation Costs of the Enterprise and other working capital costs of the related Districts,and pending such expenditure,moneys therein may be commingled and invested at the direction of an Authorized Representative in Investment Securities.Any income received from such investments shall be deposited,as received, into the applicable Proceeds Account. Any amounts remaining in any District’s Proceeds Account and not necessary for the payment of any construction or working capital costs of such District (as determined by an Authorized Representative)shall be deposited by such District into such District’s Paying Agent Account and used for the payment of (i)such District’s Proportionate Share of Commercial Paper Notes as may be selected by an Authorized Representative, (ii)the replenishment of any Withdrawals with respect to such District or (iii)the payment of such District’s Proportionate Share of Fees and Expenses.In the event no Commercial Paper Notes are Outstanding and there are no Fees and Expenses which remain unpaid,any remaining amounts in a Proceeds Account may be expended by such District for any lawful purpose. Section 3.05.Paying Agent Fund The Paying Agent shall establish,maintain and hold in trust a separate fund known as the “Paying Agent Fund,”with separate Paying Agent Accounts for each District therein (each,a “Paying Agent Account”). There shall be deposited into each District’s Paying Agent Account all Withdrawals of such District,amounts transferred by such District from such District’s Payment Account and all amounts directed to be deposited into such District’s Paying Agent Account pursuant to Section 3.02 or 3.04 hereof.Amounts on deposit in the Paying Agent Fund shall be applied by the Paying Agent to pay the principal of and interest,if any,on the Commercial Paper Notes when due and any Fees and Expenses when due. Section 3.06.Pledge;Payments The Commercial Paper Notes are special limited obligations of the Districts payable from and secured solely by the funds pledged therefor pursuant to this Resolution.Each District hereby agrees to cause its Net Enterprise Revenues,after payment in full of all amounts then owing by such District on Prior Lien Obligations,to be deposited into its Payment Account and to make payments from its Payment Account to its Paying Agent Account at such times and in such amounts as are necessary to provide for the full payment when due of the principal of and interest,if any,on such District’s Proportionate Share of the Commercial Paper Notes and of Fees and Expenses. LAI-62574.8 21 The Commercial Paper Notes issued in accordance with the terms of this Resolution shall be secured by a lien on and a pledge of Net Enterprise Revenues,and each District,severally and not jointly except to the extent set forth in the Standby Withdrawal Agreement,by execution of this Resolution does hereby pledge and assign and grant a lien and charge on,and security interest in its Net Enterprise Revenues to secure its Proportionate Share of the payment of the Commercial Paper Notes, such pledge,assignment,lien and security interest in its Net Enterprise Revenues to rank junior and subordinate in all respects to the pledge,assignment,lien and security interest in its Net Enterprise Revenues granted with respect to the Prior Lien Obligations. To provide security for the payment of the principal of and interest on the Commercial Paper Notes as the same shall become due and payable,there is hereby granted a lien on and pledge of,subject only to the provisions of this Resolution permitting the application thereof for the purposes and on the terms and conditions set forth herein,(i)the proceeds from the sale of other Commercial Paper Notes issued pursuant to this Resolution for such purpose,(ii)Withdrawals,(iii)amounts held in the Payment Fund until the amounts deposited therein are used for authorized purposes,(iv)amounts held in the Paying Agent Fund until the amounts deposited therein are used for authorized purposes,(v)Net Enterprise Revenues,on a basis junior and subordinate in all respects to the lien and pledge of Net Enterprise Revenues securing the payment of the Prior Lien Obligations,and (vi)amounts held in the Proceeds Fund that are not necessary for the payment of construction or working capital costs of the Districts.It is hereby resolved and declared that the principal of and interest on the Commercial Paper Notes shall be and are hereby equally and ratably secured by and payable from a lien on and pledge of the sources hereinabove identified in clauses (i),(ii)(iii)(iv),(v)and (vi),subject only to the exceptions noted therein. Section 3.07.Additional Security The Net Enterprise Revenues secure all Commercial Paper Notes issued in accordance with the terms of this Resolution on an equal and ratable basis. Any of the Districts may,however,in its discretion,provide. additional security,an additional source of payment or credit enhancement for specified Commercial Paper Notes with no obligation to provide such additional security,source of payment or credit enhancement to other Commercial Paper Notes. Section 3.08.Additional Obligations Nothing in this Resolution shall prohibit the Districts from issuing additional obligations payable from and secured by a pledge and lien on Net Enterprise Revenues on a basis senior to or on a parity with the Commercial Paper Notes. Section 3.09.Several and Limited Joint Obligations The obligations of the Districts hereunder are several and not LA1-62574.8 22 joint,except to the extent set forth in the Standby Withdrawal Agreement.Each District is obligated hereunder only to the extent of its Proportionate Share of the principal of and interest on the Commercial Paper Notes and is not obligated with respect to the Proportionate Share of the principal of and interest on the Commercial Paper Notes of any other District, except to the extent set forth in the Standby Withdrawal Agreement. ARTICLE IV COVENANTS OF THE DISTRICTS• Section 4.01.Limitation on Issuance Each of the Districts covenants and agrees that there will not be issued and Outstanding at any time more than Fifty Million Dollars ($50,000,000)in aggregate principal amount of Commercial Paper Notes. Section 4.02.Maintenance of Standby Withdrawa]. Agreement Each of the Districts covenants and agrees that at all times,unless no Commercial Paper Notes remain Outstanding, it will maintain jointly with the other Districts the Standby Withdrawal Agreement to permit Withdrawals in amounts such that, assuming that all then Outstanding Commercial Paper Notes were to become due and payable immediately,the amount available f or Withdrawal would be sufficient at that time to pay principal of and interest on all Commercial Paper Notes.No Commercial Paper Note shall be issued which if,after giving effect to the issuance thereof and,if applicable,the immediate application of the proceeds thereof to retire other Commercial Paper Notes secured by the Standby Withdrawal Agreement,the aggregate principal amount of all Commercial Paper Notes supported by the Standby Withdrawal Agreement would exceed the amount available for Withdrawal under the Standby Withdrawal Agreement.In furtherance of the foregoing covenant,each of the Districts agrees that it will not issue any Commercial Paper Notes or make any borrowing which will result in a violation of such covenant and will not amend the Standby Withdrawal Agreement in a manner which will cause a violation of such covenant. Section 4.03.Punctual Payment Each of the Districts will punctually pay or cause to be paid the principal of and interest on the Commercial Paper Notes (but only from the sources pledged herein),in conformity with the Commercial Paper Notes, this Resolution and the Standby Withdrawal Agreement. Section 4.04.Acknowledqment of Revenue Covenants Each of the Districts hereby acknowledges that the revenue covenants contained in the Acquisition Agreements provide for the District to fix,prescribe and collect charges for the services and facilities of its Enterprise so that,in each Fiscal Year, Net Enterprise Revenues,together with any other legally LAI-62574.8 23 available moneys designated for payment theref or,will at least equal a certain sum calculated in accordance with the Acquisition Agreements,which sum includes the principal of and interest on the Commercial Paper Notes payable in such Fiscal Year.Each of the Districts hereby agrees that for purposes of complying with such revenue covenants,it will estimate the principal and interest payable with respect to any Commercial Paper Note reasonably and in good faith,with reference to the current and historical interest rates borne by the Commercial Paper Notes. Section 4.05.Opinion of Bond Counsel The Districts shall cause the legal opinion of Bond Counsel as to the validity of the Commercial Paper Notes and as to the exemption of interest on the Commercial Paper Notes from California personal income taxation to be printed on or attached to each Commercial Paper Note. ARTICLE V EVENTS OF DEFAULT AND R~DIES OF NOTEOWNERS Section 5.01.Events of Default The occurrence of one or more of the following events shall constitute an Event of Default under this Resolution: (a)if default shall be made in the due and punctual payment by any District of its Proportionate Share of principal of or interest on any Commercial Paper Note when and as the same shall become due and payable; • (b)if there shall occur the dissolution (without a successor being named to assume the rights and obligations)or liquidation of any District or the filing by any District of a voluntary petition in bankruptcy,or adjudication of any District as a bankrupt,or assignment by any District for the benefit of its creditors,or the entry by any District into an agreement of composition with its creditors,or the approval by a court of competent jurisdiction with its creditors,or the approval by a court of competent jurisdiction of a petition applicable to any District in any proceeding for its reorganization instituted under the provisions of the federal Bankruptcy Code,as amended, or under any similar act in any jurisdiction which may now be in effect or hereafter enacted;or (c)if an order or decree shall be entered,with the consent or acquiescence of any District,appointing a receiver or receivers of any District,or of the revenues therefrom,or if such order or decree,having been entered without the consent or acquiescence of any District shall not be vacated or discharged or stayed within ninety (90)days after the entry thereof. Section 5.02.Suits at Law or in EQuity and Mandamus If one or more Events of Default shall occur and be continuing, LAI-62574.8 S 24 then and in every such case the Owner of any Commercial Paper Note at the time Outstanding shall be entitled to proceed to protect and enforce such Owner’s rights by such appropriate judicial proceeding as such Owner shall deem most effectual to protect and enforce any such right,either by suit in equity or by action at law,whether for the specific performance of any covenant or agreement contained in this Resolution,or in aid of the exercise of any power granted in this Resolution,or to enforce any other legal or equitable right vested in the Owners of Commercial Paper Notes by this Resolution,the Commercial Paper Notes or applicable law.The provisions of this Resolution shall be a contract with each and every Owner of Commercial Paper Notes and the duties of the Districts shall be enforceable by any Owner by mandamus or other appropriate suit,action or proceeding in any court of competent jurisdiction. Section 5.03.Remedies Not Exclusive No remedy herein conferred upon or reserved to the Owners of Commercial Paper Notes is intended to be exclusive of any other remedy,and every such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing, at law or in equity or by statute or otherwise,and may be exercised at any time or from time to time,and as often as may be necessary,by the Owner of any one or more of the Commercial Paper Notes. Section 5.04.Conm~ercial Paper Notes Not Sublect to Acceleration The Commercial Paper Notes are not subject to acceleration and,upon the occurrence of an Event of Default, none of the Paying Agent,the Liquidity Provider,any Owner or any other person may accelerate the maturity of any of the Commercial Paper Notes. ARTICLE VI THE PAYING AGENT Section 6.01.Duties,Immunities and Liabilities of Paying Agent (A)Each of the Districts hereby appoints Bankers Trust Company as Paying Agent.The Paying Agent shall perform such duties and only such duties as are specifically set forth in the Paying Agent Agreement and exercise such of the rights and powers vested in it by the Paying Agent Agreement,and use the same degree of care and skill in their exercise,as a prudent person would exercise or use under the circumstances in the conduct of such person’s own affairs. (B)The Districts may remove the Paying Agent at any time unless an Event of Default shall have occurred and then be continuing,and shall remove the Paying Agent if at any time the Paying Agent shall cease to be eligible in accordance with LAI-62574.8 25 subsection (E)of this Section 6.01,or shall become incapable of acting,or shall be adjudged a bankrupt or insolvent,or a receiver of the Paying Agent or its property shall be appointed, or any public officer shall take control or charge of the Paying Agent or of its property or affairs for the purpose of rehabilitation,conservation or liquidation,in each case by giving written notice of such removal to the Paying Agent,and thereupon shall appoint a successor Paying Agent by an instrument in writing. (C)Subject to the provisions of subsection 6.01(D) below,the Paying Agent may at any time tender its resignation by giving written notice of such resignation to the Districts.Upon receiving such notice of resignation,the Districts shall promptly appoint a successor Paying Agent by an instrument in writing. (D)The Paying Agent shall not be relieved of its duties hereunder until its successor Paying Agent has accepted its appointment and assumed the duties of Paying Agent hereunder. Any removal or resignation of the Paying Agent and appointment of a successor Paying Agent shall become effective upon acceptance of appointment by the successor Paying Agent,without any notice to the Owners of the Commercial Paper Notes.Any successor Paying Agent appointed under this Resolution shall signify its acceptance of such appointment by executing and delivering to the Districts and to its predecessor Paying Agent a written acceptance thereof,and thereupon such successor Paying Agent, without any further act,deed or conveyance,shall become vested with all duties and obligations of such predecessor Paying Agent, with like effect as if originally named Paying.Agent herein;but, nevertheless at the request of the successor Paying Agent,such predecessor Paying Agent shall execute and deliver any and all instruments of conveyance or further assurance and do such other things as may reasonably be required for more fully and certainly vesting in and confirming to such successor Paying Agent all the powers of such predecessor Paying Agent and shall pay over, transfer,assign and deliver to the successor Paying Agent any money or other property subject to the conditions herein set forth.Upon request of the successor Paying Agent,the Districts shall execute and deliver any and all instruments as may be reasonably required for more fully and certainly vesting in and confirming to such successor Paying Agent all such moneys, properties,rights,powers,duties and obligations. (E)The Paying Agent and any successor Paying Agent shall be a trust company or bank having the powers of a trust company having its principal corporate trust office in New York, New York,having a combined capital and surplus of at least fifty million dollars ($50,000,000),and subject to supervision or examination by federal or state authority.If such bank or trust company publishes a report of condition at least annually, pursuant to law or to the requirements of any supervising or examining authority above referred to,•then for the purpose of LA1-62574.8 26 this subsection the combined capital and surplus of such bank or trust company shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published.In case at any time the Paying Agent shall cease to be eligible in accordance with the provisions of this subsection 6.01(E),the Paying Agent shall resign immediately in the manner and with the effect specified in this Section. Section 6.02.Merger or Consolidation Any company into which the Paying Agent may be merged or converted or with which it may be consolidated or any company resulting from any merger,conversion or consolidation to which it shall be a party or any company to which the Paying Agent may sell or transfer all or substantially all of its corporate trust business,provided such company shall be eligible under subsection (E)of Section 6.01 and the Districts shall have received written notice of any such merger,conversion or consolidation,shall be the successor to such Paying Agent without the execution or filing of any paper or any further act,anything herein to the contrary notwithstanding. Section 6.03.Right of Paying Agent to Rely Upon Documents The Paying Agent shall be protected in acting upon any notice,resolution,request,consent,order,certificate, report,opinion,bond or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties.The Paying Agent may consult with counsel,who may be counsel of or to the Districts,with regard to legal questions,and the opinion of such counsel shall be full and complete authorization and protection in respect of any action taken or suffered by it hereunder in good faith and in accordance therewith. The Paying Agent shall not be bound to recognize any person as the Owner of a Commercial Paper Note unless and until such Commercial Paper Note is submitted for inspection,if required,and his or her title thereto is satisfactorily established,if disputed. Whenever in the administration of the duties imposed upon it by this Resolution the Paying Agent shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering any action hereunder,such matter (unless other evidence in respect thereof be herein specifically prescribed)may be deemed to be conclusively proved and established by a Certificate of the Districts,and such Certificate shall be full warrant to the Paying Agent for any action taken or suffered in good faith under ‘the provisions of this Resolution in reliance upon such Certificate,but in its discretion the Paying Agent may,in lieu thereof,accept and rely upon other evidence of such matter or may require such additional evidence as to it may deem reasonable. LA1-62574.8 27 Section 6.04.Preservation and Inspection of Documents The Paying Agent shall at all times keep,or cause to be kept,proper books of record and account prepared in accordance with trust accounting standards,in which complete and accurate entries shall be made of all transactions relating to the receipt,investment,disbursement,allocation and application of the proceeds of the Commercial Paper Notes other than proceeds paid to the Districts as set forth in Section 3.02(u)hereof. Such books of record and account shall be available for inspection by the Districts and any Owner,or his agent or representative duly authorized in writing,at reasonable hours, and under reasonable circumstances. ARTICLE VII APPROVAL OF DOCUMENTS;GENERAL AUThORIZATION Section 7.01.Approval of Standby Withdrawal Agreement The Standby Withdrawal Agreement in substantially the form attached hereto as Exhibit B is hereby approved,and an Authorized Representative is hereby authorized,empowered and directed to execute and deliver the Standby Withdrawal Agreement with such changes therein as such officer shall deem appropriate and in the best interests of the Districts,as conclusively evidenced by his execution thereof. Section 7.02.Approval of Paying Agent Agreement The Paying Agent Agreement in substantially the form attached hereto as Exhibit C is hereby approved,and an Authorized Representative is hereby authorized,empowered and directed to execute and deliver the Paying Agent Agreement with such changes therein as such officer shall deem appropriate and in the best interests of the Districts,as conclusively evidenced by his execution thereof. Section 7.03.Approval of Dealer Agreement An Authorized Representative is hereby authorized and directed to negotiate with the Dealer the interest rate or rates on,or interest costs of,the Commercial Paper Notes,and the commission rate to be paid to the Dealer which shall not exceed a quarterly fee of .lO~per annum of the average daily principal amount of the Commercial Paper Notes purchased by the Dealer or for which the Dealer has arranged the sale during such quarterly period. Subject to the foregoing,the Dealer Agreement in substantially the form attached hereto as Exhibit D is hereby approved,and an Authorized Representative is hereby authorized,empowered and directed to execute and deliver the Dealer Agreement with such changes therein as such officer shall deem appropriate and in the best interests of the Districts,as conclusively evidenced by his execution thereof. Section 7.04.Approval of Initial Offering Memorandum The offering memorandum to be used in the marketing of the first LAI-62574.8 28 series of Commercial Paper Notes to potential investors,•in substantially the form attached hereto as Exhibit F,is hereby approved.The General Manager and all other officers of the Districts are hereby authorized and directed to assist the Dealer in preparing the final form of the offering memorandum,and to update and prepare additional offering memoranda for future issues of Commercial Paper Notes. Section 7.05.General Authorization;Further Action All actions heretofore taken by the officers and agents of the Districts with respect to the issuance and sale of the Commercial Paper Notes are hereby approved,confirmed and ratified.The Chairman,the General Manager and the other officers of the Districts be and each of them is hereby authorized,empowered and directed to execute such other documents in addition to those enumerated herein and take such other actions as they deem necessary or advisable in order to carry out and perform the purposes of this Resolution. ARTICLE VIII MISCELLANEOUS Section 8.01.amendments or Modifications Without Consent of Owners This Resolution and the rights and obligations of the Districts and of the Owners may be modified or amended at any time by a Supplemental Resolution,without notice to or the consent of any Owners,but only to the extent permitted by law and,subject to the rights of the Owners,only for any one or more of the following purposes: (i)to add to the covenants and agreements of the Districts contained in this Resolution other covenants and agreements thereafter to be observed,or to surrender any right or power herein reserved to or conferred upon the Districts;or (ii)to cure any ambiguity,or to cure or correct any defective provision contained in thiS Resolution,upon receipt by the Districts of an approving opinion of Bond Counsel selected by the Districts that the same is needed for such purpose,and will more clearly express the intent of this Resolution;or (iii)to supplement the security for the Commercial Paper Notes,replace or provide additional credit or liquidity facilities supporting payment of the Commercial Paper Notes,change the form of the Commercial Paper Notes or make such other changes in the provisions hereof as the Districts may deem necessary or desirable and which shall not materially adversely affect the interests of the Owners; LAI-62574.8 29 provided,however,that nothing herein contained shall permit or be construed to permit the amendment of the terms and conditions of this Resolution or of the Commercial Paper Notes so as to: (1)make any change in the maturity of any of the Outstanding Commercial Paper Notes; (2)reduce the rate of interest borne by any of the Outstanding Commercial Paper Notes; (3)reduce the amount of the principal payable on any of the Outstanding Commercial Paper Notes; (4)modify the terms of payment of principal of or interest on the Outstanding Commercial Paper Notes,or impose any conditions with respect to such payment; (5)affect the rights of the Owners of less than all of the Outstanding Commercial Paper Notes;or (6)reduce or restrict the pledge made pursuant to Section 3.06 hereof for payment of the Commercial Paper Notes. Section 8.02.Resolution to Constitute Contract;Equal Security In consideration of the acceptance of the Commercial Paper Notes,the issuance of which is authorized hereunder,by the Owners thereof,this Resolution shall be deemed to be and shall constitute a contract between and among the Districts and the Owners from time to time of the Commercial Paper Notes,and the pledge made in this Resolution by the Districts and the covenants and agreements set forth in this Resolution to be performed by the Districts shall be for the equal and proportionate benefit,security and protection of all Owners of the Commercial Paper Notes,without preference,priority or distinction as to security or otherwise of any of the Commercial Paper Notes authorized hereunder over any of the others by reason of time of issuance,sale or maturity thereof or otherwise for any cause whatsoever,except as expressly provided in or permitted by this Resolution. • Section 8.03.Severability of Invalid Provisions If any one or more of the covenants,agreements or provisions contained herein shall be held contrary to any express provisions of law or contrary to the policy of express law,though not expressly prohibited,or against public policy,or shall for any reason whatsoever be held invalid,then such covenants, agreements or provisions shall be null and void and shall be deemed separable from the remaining covenants,agreements or provisions and shall in no way affect the validity of any of the other provisions hereof or of the Commercial Paper Notes issued hereunder. LA1-62574.8 30 Section 8.04.Defeasance If,when all or any portion of the Commercial Paper Notes shall have become due and payable in accordance with their terms or otherwise as provided in this Resolution,the entire principal and interest so due and payable upon said Commercial Paper Notes shall be paid,or if at or prior to the date said Commercial Paper Notes have become due and payable,sufficient moneys or noncallable direct obligations of, or noncallable obligations guaranteed by,the United States of America,the principal of and interest on which will provide sufficient moneys for such payment,shall be held in trust by the Districts and provision shall also be made for paying all other sums payable hereunder by the Districts with respect to said Commercial Paper Notes,including all Fees and Expenses the pledge herein created with respect to said Commercial Paper Notes shall thereupon cease,terminate and become discharged and said Commercial Paper Notes shall no longer be deemed Outstanding f or purposes of this Resolution and all the provisions of this Resolution,including all covenants,agreements,liens and pledges made herein,shall be deemed duly discharged,satisfied and released. Section 8.05.Liability of Districts Limited to Net Enterprise Revenues Notwithstanding anything contained in this Resolution or in the Commercial Paper Notes,the Districts may, but shall not be required to,advance any moneys derived from any source other than Net Enterprise Revenues and other assets pledged hereunder for any of the purposes mentioned in this Resolution (including amounts withdrawn pursuant to the Standby Withdrawal Agreement),whether for the payment of the principal of or interest on the Commercial Paper Notes or for any other purpose of this Resolution. Section 8.06.Successor Is Deemed Included in All References to Predecessor Whenever in this Resolution either the Districts or the Paying Agent is named or referred to,such reference shall be deemed to include the successors or assigns thereof,and all the covenants and agreements in this Resolution contained by or on behalf of the Districts or the Paying Agent shall bind and inure to the benefit of the respective successors and assigns thereof whether so expressed or not. Section 8.07.District No.1 Appointed as Districts’ Representative Each of the Districts hereby appoints District No.1 to act as its representative for all matters relating to this Resolution and the Paying Agent Agreement. Section 8.08.No Personal Liability of District Officials;Limited Liability of Districts to Owners No covenant or agreement contained in the Commercial Paper Notes or in this Resolution shall be deemed to be the covenant or agreement of any present or future official,officer,agent or employee of the Districts in his individual capacity,and neither the members of the Districts nor any person executing the Commercial Paper Notes shall be liable personally on the Commercial Paper Notes or be LAI-62574.8 31 subject to any personal liability or accountability by reason of the issuance thereof. Section 8.09.Waiver of Notice Whenever in this Resolution the giving of notice by mail or otherwise is required, the giving of such notice may be waived in writing by the person entitled to receive such notice and in any such case the giving or receipt of such notice shall not be a condition precedent to the validity of any action taken in reliance upon such waiver. Section 8.10.Funds and Accounts Any fund or account required by this Resolution to be established and maintained by the Districts may be established and maintained in the accounting records of the Districts,either as a fund or an account,and may,for the purposes of such records,any audits thereof and any reports or statements with respect thereto,be treated either as a fund or as an account. Section 8.11.Article and Section Headings and References The headings or titles of the several Articles and Sections hereof,and any table of contents appended to copies hereof,shall be solely for convenience of reference and shall not affect the meaning,construction or effect of this Resolution. All references herein to “Articles,”“Sections”and other subdivisions are to the corresponding Articles,Sections or subdivisions of this Resolution;the words “herein,”“hereof,” “hereby,”“hereunder”and other words of similar import refer to this Resolution as a whole and not to any particular Article, Section or subdivision hereof. Section 8.12.Limitation of Benefits with Respect to Resolution With the exception of the rights or benefits expressly conferred herein,nothing expressed or contained ‘herein or implied from the provisions of this Resolution or the Commercial Paper Notes is intended or should be construed to confer upon or give to any person other than the Districts,the Owners of the Commercial Paper Notes,the Paying Agent,the Dealer and the Liquidity Provider,any legal or equitable right, remedy or claim under or by reason of or in respect to this Resolution or any covenant,condition,stipulation,promise, agreement or provision contained herein.This Resolution and all of the covenants,conditions,stipulations,promises,agreements and provisions hereof are intended to be and shall be for and inure to the sole and exclusive benefit of the Districts,the Owners of the Commercial Paper Notes,the Paying Agent,the Dealer and the Liquidity Provider as herein and therein provided. Section 8.13.Governing Law This Resolution shall be construed and enforced in accordance with the laws of the State of California. LA1-62574.8 32 Section 8.~.4.Effective Date of Resolution This Resolution shall take effect upon its adoption by the Districts. PASSED AND ADOPTED at a regular meeting of the Districts held January 12,1994,by the following vote: COUNTY SANITATION DISTRICT NO.1 OF ORANGE COUNTY,CALIFORNIA AYES: _______________ NOES: _______________ ABSENT: _____________ Chairman ATTEST: Secretary COUNTY SANITATION DISTRICT NO.2 OF ORANGE COUNTY,CALIFORNIA AYES: _______________ NOES: _______________ ABSENT: _____________ Chairman ATTEST: Secretary LAI-62574.8 33 COUNTY SANITATION DISTRICT NO.3 OF ORANGE COUNTY,CALIFORNIA AYES: _______________ NOES: _______________ ABSENT: ______________ Chairman ATTEST: Secretary COUNTY SANITATION DISTRICT NO.5 OF ORANGE COUNTY,CALIFORNIA AYES: _______________ NOES: _______________ ABSENT: ____________ Chairman ATTEST: Secretary LAI-62574.8 34 COUNTY SANITATION DISTRICT NO.6 OF ORANGE COUNTY,CALIFORNIA AYES: _______________ NOES: _______________ ABSENT: ______________ Chairman ATTEST: Secretary COUNTY SANITATION DISTRICT NO.7 OF ORANGE COUNTY,CALIFORNIA AYES: _______________ NOES: ________________ ABSENT: ____________ Chairman ATTEST: Secretary LA1-62574.8 35 COUNTY SANITATION DISTRICT NO.11 OF ORANGE COUNTY,CALIFORNIA AYES: _____________ NOES: ________________ ABSENT: ____________ Chairman ATTEST: Secretary COUNTY SANITATION DISTRICT NO.13 OF ORANGE COUNTY,CALIFORNIA AYES: _______________ NOES: _____________ ABSENT: _____________ Chairman ATTEST: Secretary LAI-62574.8 36 COUNTY SANITATION DISTRICT NO.14 OF ORANGE COUNTY,CALIFORNIA AYES: _______________ NOES: _______________ ABSENT: ____________ Chairman ATTEST: Secretary APPROVED AS TO FORN AND LEGALITY: GENERAL COUNSEL THOMAS L.WOODRUFF LAI-62574.8 37 EXHIBIT A COUNTY SANITATION DISTRICT NOS.1,2,3, 5,6,7,11,13 AND 14 OF ORANGE COUNTY,CALIFORNIA CO~ERCIAL PAPER NOTE No.:Date of Issue: _______ Principal Amount: ______ Maturity Date: ______ Interest to Maturity: _______ Number of Days: _______ Due at Maturity: _______ Interest Rate (%): _______ County Sanitation District No.1 of Orange County, California,County Sanitation District No.2 of Orange County, California,County Sanitation District No.3 of Orange County, California,County Sanitation District No.5 of Orange County, California,County Sanitation District No.6 of Orange County, California,County Sanitation District No.7 of Orange County, California,County Sanitation District No.11 of Orange County, California,County Sanitation District No.13 of Orange County, California and County Sanitation District No.14 of Orange County,California,each constituting a “county sanitation district duly organized and existing under the laws of the State of California (singularly,a “District,”collectively,the “Districts”),FOR VALUE RECEIVED,each hereby promises to pay, solely from the sources hereinafter identified and hereinafter stated,to the order of the bearer of this Commercial Paper Note on the maturity date specified above,the principal sum specified above and interest,if any,on said principal amount at said maturity date,from the above specified note date to said maturity date at the per annum interest rate shown above (computed on the basis of the actual days elapsed and a 365-day year]a 360-day year based on twelve 30-day months]);both principal and interest on this Commercial Paper Note being payable in lawful money of the United States of America at the corporate trust office the Paying Agent executing the “Certificate of Authentication”endorsed hereon and appearing below,or its successor at the corporate trust office of such successor.No interest will accrue on the principal amount hereof after said maturity date. This Commercial Paper Note is one of an issue of commercial paper notes of the Districts (the “Commercial Paper Notes”)which has been duly authorized and issued in accordance with the provisions of Resolution No.94-6 of the Districts, adopted on January 12,1994 (the “Resolution”),adopted for the purpose of financing construction costs,Maintenance and Operation Costs of the Enterprise (as’defined in the Resolution) and other working capital requirements of the Districts and to refund the Commercial Paper Notes issued pursuant to the provisions of the Resolution.. This Commercial Paper Note is payable from and equally secured by a lien on and pledge of (i)the proceeds from the sale LAI-62574.8 A—1 of other Commercial Paper Notes issued for such purpose, (ii)Withdrawals made under and pursuant to the Standby Withdrawal Agreement among the Districts and the Treasurer-Tax Collector of the County of Orange,as Fund Manager of the Orange County Investment Pool (the “Liquidity Provider”),pursuant to which the Liquidity Provider has agreed to permit withdrawals by the Districts under the terms and conditions .~set forth therein, (iii)amounts in certain funds established pursuant to the Resolution and (iv)Net Enterprise Revenues,on a basis junior and subordinate in all respects to the pledge of Net Enterprise Revenues securing payment of the Prior Lien Obligations (as such capitalized terms are defined in the Resolution). This Commercial Paper Note is payable solely from the sources hereinabove identified securing the payment thereof and the Commercial Paper Notes do not constitute a legal or equitable pledge,charge,lien or encumbrance upon any other property of the Districts.The holder hereof shall never have the right to demand payment of this obligation from any sources or properties of the Districts except as identified above. Neither the faith and the credit nor the taxing power of the State of California,the County of Orange or any other public agency,other than the Districts to the extent of the Net Enterprise Revenues and other amounts described in the Resolution,is pledged to the payment of principal of,or interest on,this Commercial Paper Note. It is hereby certified and recited that all acts, conditions and things required by law and the Resolution to exist,to have happened and to have been performed precedent to and in conjunction with the issuance of this Commercial Paper Note,do exist,have happened and have been performed in regular and in due time,form and manner as required by law and that the issuance of this Commercial Paper Note,~ogether with all other Commercial Paper Notes Outstanding,is not in excess of the principal amount of Commercial Paper Notes permitted to be issued under the Resolution. This Commercial Paper Note has all the qualities and incidents of a negotiable instrument under the laws of the State of California. This Commercial Paper Note shall not be entitled to any benefit under the Resolution or be valid or become obligatory for any purpose until this Commercial Paper Note shall have been authenticated by the execution by the Paying Agent of the Certificate of Authentication hereon. LAI-62574.8 A—2 IN WITNESS WHEREOF,each District has authorized and caused this Commercial Paper Note to be executed on its behalf by the manual or facsimile signature of its General Manager and its Secretary and its official seal to be pressed or a facsimile thereof to be printed hereon. COUNTY SANITATION DISTRICT NO.1 OF ORANGE COUNTY,CALIFORNIA COUNTY SANITATION DISTRICT NO.2 OF ORANGE COUNTY,CALIFORNIA COUNTY SANITATION DISTRICT NO..3 OF ORANGE COUNTY,CALIFORNIA COUNTY SANITATION DISTRICT NO.5 OF ORANGE COUNTY,CALIFORNIA COUNTY SANITATION DISTRICT NO.6 OF ORANGE COUNTY,CALIFORNIA COUNTY SANITATION DISTRICT NO.7 OF ORANGE COUNTY,CALIFORNIA COUNTY SANITATION DISTRICT NO.11 OF ORANGE COUNTY,CALIFORNIA COUNTY SANITATION DISTRICT NO.13 OF ORANGE COUNTY,CALIFORNIA COUNTY SANITATION DISTRICT NO.14 OF ORANGE COUNTY,CALIFORNIA By_______________________ General Manager By________________________ Secretary (SEAL) LAI-62574.S A—3 PAYING AGENT’S CERTIFICATE OF AUTHENTICATION This Commercial Paper Note is one of the Commercial Paper Notes delivered pursuant to the within mentioned Resolution. as Paying Agent By_________________________ Authorized Signatory LA1-62574.8 A—4 EXHIBIT B FORM OF STANDBY WITHDRAWAL AGREEMENT LAI-62574.8 B —1 EXHIBIT C FORM OF PAYING AGENT AGRERMENT LAI-62574.8 C 1 EXHIBIT I) FORM OF DEALER AGREEMENT LAI-62574.8 D—1 EXHIBIT E FORM OF INSTRUCTIONS TO THE PAYING AGENT date] Paying Agent] address] Re:Instructions to the Paying Agent to Authenticate and Deliver County Sanitation District Nos.1,2, 3,5,6,7,11,13 and 14 of Orange County, California Commercial Paper Notes Ladies and Gentlemen: Reference is hereby made to Resolution No.94-6 of the undersigned,adopted on January 12,1994 (the “Resolution”). Pursuant to Section 3.01 of the Resolution,you are hereby instructed to deliver County Sanitation District Nos.1,2,3,5, 6,7,11,13 and 14 of Orange County,California Commercial Paper Notes (the “Commercial Paper Notes”)under the terms set forth below: Number: ______________ Principal Amount:$____________ Date of Issue: _____________ Maturity: _____________ Rate of Interest: _____ Purchase Price:$_____________ Other terms and conditions: _________________________ You are hereby instructed to authenticate the Commercial Paper Notes by counter signature of your authorized officer or employee and deliver the Commercial Paper Notes upon receipt of payment in accordance with the custom currently prevailing in the New York financial market in regard to the Commercial Paper Notes.The rules of the New York Clearinghouse shall apply thereto. The undersigned each hereby represents that all action on its part necessary for the valid issuance of the Commercial Paper Notes has been taken,that all provisions of California law necessary for the valid issuance of the Commercial Paper Notes with provision for interest exemption from California personal income taxation have been complied with,and that the Commercial Paper Notes in the possession of the registered owners thereof will be the valid and enforceable obligations of the undersigned according to their terms,subject to the exercise of judicial discretion in accordance with general principles of equity and bankruptcy,insolvency,reorganization,moratorium and other LA1-62574.8 E—1 similar laws affecting creditors’rights heretofore or hereafter enacted and that the stated interest on the Commercial Paper Notes is exempt from California personal income tax. Each of the undersigned hereby certifies that: (i)no Event of Default under Section 5.01 of the Resolution has occurred and is continuing as of the date hereof; (ii)it has full power and authority to perform its duties and obligations with respect to the Commercial Paper Notes and the Standby Withdrawal Agreement (as defined in the Resolution); (iii)it is in compliance with the covenants set forth in Article IV of the Resolution as of the date hereof; and LAI-62574.8 E-2 (iv)the amount of principal and interest with respect to the Commercial Paper Notes to be Outstanding does not exceed the amount currently available under the Standby Withdrawal Agreement. Very truly yours, COUNTY SANITATION DISTRICT NO.1 OF ORANGE COUNTY,CALIFORNIA COUNTY SANITATION DISTRICT NO.2 OF ORANGE COUNTY,CALIFORNIA COUNTY SANITATION DISTRICT NO.3 OF ORANGE COUNTY,CALIFORNIA COUNTY SANITATION DISTRICT NO.5 OF ORANGE COUNTY,CALIFORNIA COUNTY SANITATION DISTRICT NO.6 OF ORANGE COUNTY,CALIFORNIA COUNTY SANITATION DISTRICT NO.7 OF ORANGE COUNTY,CALIFORNIA COUNTY SANITATION DISTRICT NO.11 OF ORANGE COUNTY,CALIFORNIA COUNTY SANITATION DISTRICT NO.13 OF ORANGE COUNTY,CALIFORNIA COUNTY SANITATION DISTRICT NO.14 OF ORANGE COUNTY,CALIFORNIA By____________________________ Authorized Representative cc:Dealer] LA1-62574.8 E —3 EXHIBIT F FORM OF INITIAL OFFERING M~(ORANDUM LA1-62574.8 F—]. STATE OF CALIFORNIA) )SS. COUNTY OF ORANGE ) I,PENNY KYLE,Assistant Secretary of the Boards of Directors of County Sanitation Districts Nos.1,2,3,5,6,7, 11,13 and 14 of Orange County,California,do hereby certify that the foregoing Resolution No.94-6 was passed and adopted at a regular meeting of said Boards on the 12th day of January, 1994,by the following vote,to wit: AYES:Fred Barrera,George Brown,Buck Catlin, John Collins,John C.Cox,Jr.,Jan Debay, Barry Denes,Burnie Dunlap,Norman Eckenrode, James Ferryman,James Flora,Don R.Griffin, John M.Gullixson,Barry Hammond,Evelyn Hart, Victor Leipzig,Wally Linn,William D.Mahoney, Ted Moreno,Linda Moulton—Patterson,Carrey J. Nelson,Richard Partin,Irv Pickler,Leslie Pontious,Charles E.Puckett,Miguel Pulido, Margie Rice,Thomas R.Saltarelli,Phil Sansone, Sheldon Singer,Roger Stanton,Peer A.Swan, Charles E.Sylvia,James Wahner,Daniel T.Welch, Grace Winchell,George L.Zlaket NOES:None ABSENT:Thomas E.Lutz,Robert Richardson,Sal Sapien IN WITNESS WHEREOF,I have hereunto set my hand and affixed the official seal of County Sanitation District No.1 on behalf of itself and Districts Nos.2,3,5,6,7,11,13 and 14 of Orange County,California,this 12th day of January,1994. Penny Kyle,ss ant Secretary Boards of D ec rs;County Sanitation DistriàtsNos.1,2,3., 5,6,7,11,13 and 14 of Orange County,California