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HomeMy WebLinkAbout12-10-2014 Administration Committee Agenda Orange County Sanitation District SANITATION msrRicr Wednesday, December 10, 2014 Regular Meeting of the \ 5:30 P.M. Administration Committee I Administration Building Board Room 10844 Ellis Avenue Fountain Valley, CA (714) 593-7130 AGENDA PLEDGE OF ALLEGIANCE: DECLARATION OF QUORUM: PUBLIC COMMENTS: If you wish to speak, please complete a Speaker's Form and give it to the Clerk of the Board. Speakers are requested to limit comments to three minutes. REPORTS: The Committee Chair and the General Manager may present verbal reports on miscellaneous matters of general interest to the Committee Members. These reports are for information only and require no action by the Committee. REPORT OF DIRECTOR OF FINANCE AND ADMINISTRATIVE SERVICES: Municipal Information Systems Association of California (MISAC) Excellence Award CONSENT CALENDAR: 1. Approve Minutes of the November 12, 2014, Administration Committee Meeting. 2. Recommend to the Board of Directors to: A. Authorize an additional one-year renewal period to Service agreements with Project Partners, Inc. and Psomas for Enterprise Information Management On-Call Staffing, Specification No. S-2011-5056D, for a total amount not to exceed $211,000 for the renewal period; and B. Approve a contingency of$21,100 (10%). 12/10/14 Administration Committee Agenda Page 1 of 3. Recommend to the Board of Directors to: Authorize purchases of telecommunications services using the County of Orange cooperative agreement #N1000008297/MA-017-1001150 with TWTelecom/ Leve13, for one year commencing November 14, 2014 through November 13, 2015, for a total amount not to exceed $240,000 in accordance with Ordinance OCSD44, Section 2.03(B) Cooperative Purchases. 4. Recommend to the Board of Directors to: Authorize purchases of information technology computer, peripheral equipment and services using the U.S. General Services Agreement (GSA) IT Schedule 70 commencing December 22, 2014 through December 31, 2019, for a total amount not to exceed $500,000, in accordance with Ordinance OCSD44, Section 2.03(B) Cooperative Purchases. 5. Recommend to the Board of Directors to: Authorize purchases of information technology consulting services using the City of Richland, Washington cooperative agreement#13-068 with ShareSquared Inc. Commencing January 5, 2015 through June 30, 2016, for a total amount not to exceed $300,000, in accordance with Ordinance OCSD-44, Section 2.03(B) Cooperative Purchases. 6. Recommend to the Board of Directors to: A. Adopt Resolution No. OCSD14-XX entitled, "A Resolution of the Board of Directors of the Orange County Sanitation District authorizing the execution and delivery by the District of an Installment Purchase Agreement, a Trust Agreement, an Escrow Agreement and a Continuing Disclosure Agreement in connection with the execution and delivery of Orange County Sanitation District Wastewater Refunding Revenue Obligations, Series 2015A, authorizing the execution and delivery of such Revenue Obligations evidencing principal in an aggregate amount of not to exceed $150,000,000, approving a Notice of Intention to Sell, authorizing the distribution of an Official Notice Inviting Bids and an Official Statement in connection with the offering and sale of such Revenue Obligations and authorizing the execution of necessary documents and related actions;" and, B. That the Orange County Sanitation District Financing Corporation approve the documents supporting and authorizing the Revenue Obligations in an aggregate amount not to exceed $150,000,000. 12/10/14 Adminisfation Commiftee Agenda Page 2 of 4 7. Recommend to the Board of Directors to: Adopt Resolution No. OCSD 14-XX, entitled "A Resolution of the Board of Directors of the Orange County Sanitation District, Authorizing the Orange County Sanitation District's Treasurer to Invest and/or Reinvest District's Funds; Adopting District's Investment Policy Statement and Performance Benchmarks for calendar year 2015; and Repealing Resolution No. OCSD 14-10". NON-CONSENT CALENDAR: None. INFORMATION ITEMS: 8. Geographic Information Systems at OCSD OTHER BUSINESS AND COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY: ADJOURNMENT: The next Administration Committee meeting is scheduled for Wednesday, February 11, 2015 at 5:30 p.m. 1210A4 Administration Committee Agenda Page 3 of 4 Accommodations for the Disabled: Meeting Rooms are wheelchair accessible. If you require any special disability related accommodations, please contact the Orange County Sanitation District Clerk of the Board's office at (714) 593-7130 at least 72 hours prior to the scheduled meeting. Requests must specify the nature of the disability and the type of accommodation requested. Agenda Posting: In accordance with the requirements of California Government Code Section 54954.2,this agenda has been posted outside the main gate of the Sanitation District's Administration Building located at 10844 Ellis Avenue, Fountain Valley, California, not less than 72 hours prior to the meeting date and time above. All public records relating to each agenda item, including any public records distributed less than 72 hours prior to the meeting to all,or a majority of the Board of Directors,are available for public inspection in the office of the Clerk of the Board. NOTICE TO DIRECTORS: To place items on the agenda for the Committee Meeting, items must be submitted to the Clerk of the Board 14 days before the meeting. Made E.Ayala Clerk of the Board (714)593-7130 mavalalglocsd.com For any questions on the agenda,Committee members may contact staff at: General Manager James Herberg (714)593-7300 iherberofgocsd.com Assistant General Manager Bob Ghirelli (714)593-7400 rohirelli0ocsd.com Director of Finance and Lorenzo Tyner (714)593-7550 Itvnerfrpocsd.com Administrative Services Director of Human Resources Jeff Reed (714)593-7144 ireeddocsd.com 12/10/14 Administration Committee Agenda Page 4 of 4 ITEM NO. 1 MINUTES OF THE REGULAR MEETING OF THE ADMINISTRATION COMMITTEE Orange County Sanitation District Wednesday, November 12, 2014, at 5:30 P.M. A regular meeting of the Administration Committee of the Orange County Sanitation District was held on November 12, 2014, at 5:30 p.m., in the Sanitation District's Administration Building. Board Chair, Tom Beamish, thanked Brad Reese for his years of service to the Sanitation District. In light of Director Reese's upcoming departure from the District, Chair Beamish has appointed Director John Withers as the new Administration Committee Chair, and Director Keith Curry as the new Administration Committee Vice- Chair. Committee Chair Withers assumed his new position as Committee Chair. Director Gene Hernandez led the Flag Salute. A quorum was declared present, as follows: COMMITTEE MEMBERS PRESENT: STAFF PRESENT: John Withers, Chair Jim Herberg, General Manager David Benavides Bob Ghirelli, Assistant General Manager Joe Carchio Lorenzo Tyner, Director of Finance Tyler Diep & Administrative Services James Ferryman Jeff Reed, Director of Human Resources Gene Hernandez Rob Thompson, Director of Engineering Peter Kim Ed Torres, Director of Operations and Prakash Narain Maintenance Janet Nguyen Maria Ayala, Clerk of the Board Brad Reese Mike White Teresa Smith Jennifer Cabral Tom Beamish, Board Chair Rich Castillon John Nielsen, Board Vice-Chair Norbert Gaia Al Garcia COMMITTEE MEMBERS ABSENT: Rich Spencer Steven Choi Keith Curry, Vice-Chair OTHERS PRESENT: Omar Sandoval, General Counsel Jeff Altshuler, McGladrey LLP Noah Daniels, McGladrey LLP Ed Soong, Public Resources Advisory Group Heather Stratman, Townsend Public Affairs 11112J2014 Administration Committee Minutes Page 1 of 7 PUBLIC COMMENTS: None. REPORT OF COMMITTEE CHAIR: Committee Chair Withers did not provide a report. REPORT OF GENERAL MANAGER: General Manager, Jim Herberg, announced that Rob Thompson, Director of Engineering, will be providing a quick update on a recent spill that occurred in Newport Beach. REPORT OF DIRECTOR OF FINANCE AND ADMINISTRATIVE SERVICES: Director of Finance and Administrative Services, Lorenzo Tyner, did not provide a report. CONSENT CALENDAR: 1. MOVED, SECONDED, AND DULY CARRIED to: Approve Minutes of the October 8, 2014 Administration Committee Meeting. AYES: Beamish, Benavides, Carchio, Diep, Ferryman, Hernandez, Kim, Narain, Nielsen, Reese, and Withers NOES: None ABSTENTIONS: None ABSENT: Choi, Curry, Nguyen, and T. Smith 2. MOVED, SECONDED, AND DULY CARRIED to: Recommend to the Board of Directors to: Authorize purchases of information technology computer and peripheral equipment using the U.S. Communities cooperative agreement #4400001195 with Insight Public Sector or agreement#4400001197 with UNICOM Government through the contract expiration date, April 30, 2016 for a total amount not to exceed $700,000, in accordance with Ordinance OCSD-44, Section 2.03(B): Cooperative Purchases. 11112J2014 Administration Committee Minutes Page 2 of 7 AYES: Beamish, Benavides, Carchio, Diep, Ferryman, Hernandez, Kim, Narain, Nielsen, Reese, and Withers NOES: None ABSTENTIONS: None ABSENT: Choi, Curry, Nguyen, and T. Smith 3. MOVED, SECONDED, AND DULY CARRIED to: Recommend to the Board of Directors to: Authorize purchases of information technology Cisco networking equipment using the Western States Contracting Alliance (WSCA) cooperative agreement #AR233 (14-19), Addendum for CA#7-14-70-04, through the expiration date May 31, 2019 for a total amount not to exceed $250,000, in accordance with Ordinance OCSD-44, Section 2.03(B): Cooperative Purchases. AYES: Beamish, Benavides, Carchio, Diep, Ferryman, Hernandez, Kim, Narain, Nielsen, Reese, and Withers NOES: None ABSTENTIONS: None ABSENT: Choi, Curry, Nguyen, and T. Smith 4. MOVED, SECONDED, AND DULY CARRIED to: Recommend to the Board of Directors to: Receive and file Orange County Sanitation District First Quarter Financial Report for the period ended September 30, 2014. AYES: Beamish, Benavides, Carchio, Diep, Ferryman, Hernandez, Kim, Narain, Nielsen, Reese, and Withers NOES: None ABSTENTIONS: None ABSENT: Choi, Curry, Nguyen, and T. Smith 11/12/2014 Administration Committee Minutes Page 3 of 7 5. MOVED, SECONDED, AND DULY CARRIED to: Recommend to the Board of Directors to: Receive and file District purchases made under the General Manager's authority for the period of July 1, 2014—September 30, 2014. AYES: Beamish, Benavides, Carchio, Diep, Ferryman, Hernandez, Kim, Narain, Nielsen, Reese, and Withers NOES: None ABSTENTIONS: None ABSENT: Choi, Curry, Nguyen, and T. Smith NON-CONSENT CALENDAR: Chair Withers announced that Agenda Item #7 would be addressed first. Mr. Tyner announced that this agenda item deals with the refunding of some of the District's existing debt. 7. MOVED, SECONDED, AND DULY CARRIED to: Recommend to the Board of Directors to: Authorize the General Manager to issue new fixed rate Certificates of Participation (COP), to be referred to as Wastewater Refunding Revenue Obligations, Series 2015A, in an amount sufficient to refund up to $152,990,000 of COP Series 2007B. AYES: Beamish, Benavides, Carchio, Diep, Ferryman, Hernandez, Kim, Narain, Nguyen, Nielsen, Reese, T. Smith and Withers NOES: None ABSTENTIONS: None ABSENT: Choi, Curry, Nguyen, and T. Smith 11/12/2014 Administration Committee Minutes Page 4 of 7 Mr. Tyner announced that Agenda Item #6 deals with the District's annual financial report. Mr. Mike White, Controller, will be providing a staff presentation, and a brief report by the auditors will follow. Mr. White gave an informational PowerPoint presentation on the District's Comprehensive Annual Financial Report that included information on the different financial measurements such as: the change in net position, change in cash and investments, and change in cost. Director T Smith arrived at 5:35 p.m. Director Nguyen arrived at 5:53 p.m. Jeff Altshuler, auditor from McGladrey LLP, provided a summary of the firm's audit findings. He made reference to the report included in the agenda package, attachment #1, Report to the Administration Committee dated October 30, 2014. Director Smith had questions regarding areas identified for risk of potential fraud. Mr. Tyner and Mr. Altshuler addressed the questions, responding that there are both internal District procedures to identify the risk for fraud; and also the audit procedures conducted by the firm that could also identify risk of fraud. Director Kim had questions regarding the OPEB funding and when the District might pay this off completely. Mr. White responded by explaining about the different elements involved with paying off this obligation. 6. MOVED, SECONDED, AND DULY CARRIED to: Recommend to the Board of Directors to: Receive and file the Sanitation District's Comprehensive Annual Financial Report for the year ended June 30, 2014, prepared by staff and audited by McGladrey, Certified Public Accountants, along with the following reports prepared by McGladrey: A. Report to the Administration Committee; and B. Report on Internal Controls; and C. Independent Accountants' Report on Agreed-Upon Procedures Applied to Appropriations Limit Worksheets. AYES: Beamish, Benavides, Carchio, Diep, Ferryman, Hernandez, Kim, Narain, Nguyen, Nielsen, Reese, T. Smith and Withers NOES: None ABSTENTIONS: None 1111212014 Administration Committee Minutes Page 5 of 7 ABSENT: Choi and Curry INFORMATION ITEMS: 8. Annual Strategic Plan Update and General Managers Work Plan Overview General Manager Herberg provided an informative PowerPoint presentation on the District's Five-Year (FY 2014-19) Strategic Plan. Mr. Herberg explained: the process of the formulation and adoption of the strategic plan; District's vision and mission statements; and gave a status report on each of the eight goals identified in the District's Strategic Plan. Mr. Herberg also provided a review of his annual General Managers work plan, and the various action plans in place and progress of these 15 items. Tyler Diep departed the meeting at 6:27 p.m. 9. Legislative Affairs Program Assistant General Manager, Dr. Bob Ghirelli, introduced this report as part of a series of information presentations being provided to the committees. Dr. Ghirelli explained that the District's legislative affairs program is supported by Townsend Public Affairs in Sacramento, and Eric Sapirstein in Washington DC. He also explained the different elements of the legislative program that include: lobbyists identifying key legislation that either supports or hinders the efforts of the District; District sponsored legislation; and, federal and state funding opportunities. The District also adopts an annual legislative platform that outlines the District's legislative agenda and goals for the year. Dr. Ghirelli also provided information on the different agencies that the District works closely with. Dr. Ghirelli introduced Heather Stratman, from Townsend Public Affairs, who spoke about the District's legislative program successes during 2014 that included information on the District's impact by: SB 946, SB 1390, AS 371, etc. Ms. Stratman also provided brief information on what some of the District's efforts might be moving forward in 2015 with regards to the Water Bond, future funding, timelines, outreach and communication efforts. OTHER BUSINESS AND COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY: Director Nguyen shared concerns over the recent Governors visit, while campaigning for the Water Bond, and the actions that followed that event wherein comments regarding her candidacy were made. Director Nguyen asked that rules be implemented so that this type of action and/or treatment does not happen in the future on public 11/12/2014 Administration Committee Minutes Page 6 of 7 property. Ms. Stratman did explain that the Water District would be seeking full reimbursement for all costs associated with that event to ensure that no public funding was spent. Mr. Omar Sandoval, General Counsel, also explained how it is usually advised that these types of events not be held on District premises. Director Benavides departed the meeting at 6:52 p.m. Mr. Thompson, Director of Engineering, briefly reported on the recent sewage spill in Newport Beach on November 1" of about 3,000 to 5,000 gallons. Mr. Thompson explained the different factors that caused the spill and the District's action plan to immediately address the spill and plans moving forward with current repair and construction. ADJOURNMENT: Committee Chair Withers declared the meeting adjourned at 6:55 p.m., to the next regularly scheduled meeting of December 10, 2014 at 5:30 p.m. Submitted by: Maria E. Ayala Clerk of the Board 11112J2014 Administration Committee Minutes Page 7 of 7 ADMINISTRATION COMMITTEE Neeing Dare TOBA.Of Dir. tz/JD/ta tz/v/ta AGENDA REPORT Item Number Item Number z Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Lorenzo Tyner, Director, Finance and Administrative Services SUBJECT: RENEW ON-CALL SERVICE AGREEMENTS GENERAL MANAGER'S RECOMMENDATION A. Authorize an additional one-year renewal period to Service agreements with Project Partners, Inc. and Psomas for Enterprise Information Management On- Call Staffing, Specification No. S-2011-50513D, for a total amount not to exceed $211,000 for the renewal period; and B. Approve a contingency of$21,100 (10%). SUMMARY Enterprise Information Management (EIM), a business unit in OCSD's Information Technology Division, is responsible for facility records management and enterprise data quality and systems. The EIM group also provides Computer Assisted Drawing (CAD), Geographic Information System (GIS), and Engineering Library support at various stages throughout a project's lifecycle. As a result of cyclical workloads, outside on-call staffing support is required. PRIOR COMMITTEE/BOARD ACTIONS December 2011 — Establish an on-call service agreement with Project Partners, Inc. and Psomas with two one-year renewals. ADDITIONAL INFORMATION The original bid specification allows for up to three one-year renewals. There was a typographical error in the original minute order that only addressed the first two years. This action corrects this error and exercises the third one-year renewal. CEQA N/A Page 1 of 2 BUDGET / PURCHASING ORDINANCE COMPLIANCE This request complies with authority levels of the Sanitation District's Purchasing Ordinance. The items purchased through the process are budgeted in SP-15, Geographic Information System. ATTACHMENT The following attachment(s) may be viewed on-line at the OCSD website (www.ocsd.com) with the complete agenda package: Draft amendments Page 2 of 2 Return to Mende Report AMENDMENTNO. 1 To Service Agreement Enterprise Information Management(EIM) On-Call Staffing S-2011-505BD THIS AMENDMENT TO THE AGREEMENT is made and entered into, to be effective January 1, 2015, by and between ORANGE COUNTY SANITATION DISTRICT hereinafter referred to as "OCSD" with main offices located at 10844 Ellis Avenue, Fountain Valley, California 92708-7018 and PROJECT PARTNERS, INC. with a principal business at 23195 La Cadena Drive, Suite 101, Laguna Hills, CA 92653 (hereinafter referred to as " Service Provider") collectively referred to as the "Parties". WHEREAS, OCSD and Service Provider executed, delivered and entered into the Agreement between OCSD and Service Provider, the effective date of which is January 5, 2012 ('the Agreement"); and WHEREAS, the Parties wish to amend the Agreement to make certain modifications which shall be called Amendment No. 1 ("Amendment'); and WHEREAS, on December 17, 2014, the Board of Directors of OCSD, by minute order, authorized execution of this Amendment between OCSD and Service Provider; and WHEREAS, the Parties to the Agreement desire that this Amendment be incorporated into the Agreement and become a part thereof from the beginning; and WHEREAS, the Parties desire that the Agreement as modified by this Amendment shall constitute the sole and entire Agreement among the Parties; NOW, THEREFORE, in consideration of these premises and the mutual covenants contained herein, the Parties agree to amend the Agreement to renew for one additional one-year period commencing January 1, 2015 and continuing through December 31, 2015. Except as expressly amended above, the Agreement will remain unchanged and in full force and effect. IN WITNESS WHEREOF, intending to be legally bound, the Parties hereto have caused this Amendment No. 1 to be signed by the duly authorized representatives as of the day and year last signed below. ORANGE COUNTY SANITATION DISTRICT PROJECT PARTNERS, INC. By: Contracts/Purchasing Manager Date Date Name: Chairman, Board of Directors Date Title: Clerk of the Board Date 12/3/14 Return to Mende Report AMENDMENTNO. 1 To Service Agreement Enterprise Information Management(EIM) On-Call Staffing S-2011-505BD THIS AMENDMENT TO THE AGREEMENT is made and entered into, to be effective January 1, 2015, by and between ORANGE COUNTY SANITATION DISTRICT hereinafter referred to as "OCSD" with main offices located at 10844 Ellis Avenue, Fountain Valley, California 92708-7018 and PSOMAS with a principal business at 3 Hutton Centre Drive, Suite 200, Santa Ana, CA 92707 (hereinafter referred to as " Service Provider") collectively referred to as the "Parties". WHEREAS, OCSD and Service Provider executed, delivered and entered into the Agreement between OCSD and Service Provider, the effective date of which is January 5, 2012 ('the Agreement"); and WHEREAS, the Parties wish to amend the Agreement to make certain modifications which shall be called Amendment No. 1 ("Amendment'); and WHEREAS, on December 17, 2014, the Board of Directors of OCSD, by minute order, authorized execution of this Amendment between OCSD and Service Provider; and WHEREAS, the Parties to the Agreement desire that this Amendment be incorporated into the Agreement and become a part thereof from the beginning; and WHEREAS, the Parties desire that the Agreement as modified by this Amendment shall constitute the sole and entire Agreement among the Parties; NOW, THEREFORE, in consideration of these premises and the mutual covenants contained herein, the Parties agree to amend the Agreement to renew for one additional one-year period commencing January 1, 2015 and continuing through December 31, 2015. Except as expressly amended above, the Agreement will remain unchanged and in full force and effect. IN WITNESS WHEREOF, intending to be legally bound, the Parties hereto have caused this Amendment No. 1 to be signed by the duly authorized representatives as of the day and year last signed below. ORANGE COUNTY SANITATION DISTRICT PSOMAS By: Contracts/Purchasing Manager Date Date Name: Chairman, Board of Directors Date Title: Clerk of the Board Date 12/3/14 ADMINISTRATION COMMITTEE Neeing Dare TOBA.Of Dir. JVJO114 12/17/14 AGENDA REPORT Item Number Item Number 3 Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Lorenzo Tyner, Director, Finance and Administrative Services SUBJECT: COOPERATIVE PROCUREMENT WITH THE COUNTY OF ORANGE GENERAL MANAGER'S RECOMMENDATION Authorize purchases of telecommunications services using the County of Orange cooperative agreement #N1000008297/MA-01 7-1 001 1 50 with TWTelecom/Level3, for one year commencing November 14, 2014 through November 13, 2015, for a total amount not to exceed $240,000 in accordance with Ordinance OCSD44, Section 2.03(B) Cooperative Purchases. SUMMARY In order to establish and maintain telecommunications and internet services, the Orange County Sanitation District's (OCSD) Information Technology division has needs to maintain existing services and add services to existing pumping facilities. Such requirements have been forecasted based upon current and projected project demands. OCSD desires to select the cooperative agreement #N1000008297/MA-017-1001150 as established by the County of Orange as the lead agency, naming TWTelecom/Level3 as the primary provider telecommunication services based on contract pricing, breadth of service offerings, availability and technical expertise. PRIOR COMMITTEE/BOARD ACTIONS N/A ADDITIONAL INFORMATION The County of Orange initiated an agreement for telecommunications services with Time Wamer Telecom Holdings Inc. in November of 2006. The agreement was amended and approved by the County of Orange Board of Supervisors in November of 2014 to extend the agreement through November 13, 2015. OCSD has been using this cooperative agreement since April, 2009. Page 1 of 2 CEQA N/A BUDGET / PURCHASING ORDINANCE COMPLIANCE This request complies with authority levels of the Sanitation District's Purchasing Ordinance. The items purchased through the process are budgeted in the yearly Joint Operating Budget. ATTACHMENT The following attachment(s) may be viewed on-line at the OCSD website (www.ocsd.coml with the complete agenda package and attachments: Cooperative Agreement between County of Orange and TWTelecom/Level3 Page 2 of 2 Attachment A County oforange Contract N IODOOO8297I MA-01740011150 .i tw telecom holdings inc. AMENDMENT NO.I TO CONTRACT NUMBER N1000008297 AS MA-017-10011150 FOR WIDE AREA NETWORK TRANSPORT SERVICES FOR ORANGE COUNTY t This Amendment Number Eleven(hereinafter"Amendment")is made and entered into by the County of Orange,a political subdivision of the State of California,(hereinafter referred to as"County")and tw telecom holdings inc„with its principal place of business at 10475 Park Meadows Drive,Littleton,CO$0124, (hereinafter referred to as"Contractor"),which may be referred individually as"Party"or collectively as "Parties". WHEREAS,County and Contractor executed Contract N 1000008297 for wide area network transport services for a three-year term commencing November 13,2006,hemiirafter"Contract';and WHEREAS,the Parties issued Amendment Number One to amend Attachment A of the Contract;and WHEREAS,the Parties issued Amendment Number Two to renew the Contract as number MA-017- I00I I150 for an additional year effective November 14,2009 through and including November 13,2010,and amend Attachment B to reflect amended pricing; WHEREAS,the Parties issued Amendment Three to extend the Contract for an additional year effective November 14,2010 through and including November 13,2011,amend Attachment B to reflect amended pricing,and change vendor name from Time Warner Telecom Holdings,Inc.to TW Time Warner Holdings, Inc.; WHEREAS,the Parties issued Amendment Four to extend the Contract for an additional year effective November 14,2011 through and including November 13,2012,reduce the contract amount by 10%for the period effective July 1,2011 through and including November 13,2012;and change vendor name to tw telecom holdings inc.; WHEREAS,the Parties issued Amendment Five to increase internal band width in the amount of $32,305.00 effective September I,2011 through November 13,2012; WHEREAS,the Parties issued Amendment Six to upgrade the data circuit between Solano Disaster Recovery Site and the County Wide Area Network in the amount of$71,957.20 effective November 1,2011 through November 13,2012; WHEREAS,the Parties issued Amendment Seven to extend the Contract for an additional year effcetive November 14,2012 through and including November 13,2013; W l IEREAS,the Parties issued Amendment Eight to increase internet band width From 300mbps to 350mbps in the amount of$11,748.00 effective December 19,2012 through November 13,2013; WI IEREAS,the Parties issued Amendment Nine to extend the Conti-act for an additional year effective November 14,2013 through and including November 13,2014,and removed the Contract's"Termination Liability"language; Page I of I Attachment A County ofOmngc Contract N100000g2971 MA-017-10011150 nv lelocam holdings ine WHEREAS,the Parties issued Amendment Ten to provide a"Burstable Line"option for the intemet services provided under the Contract; WHEREAS,the Parties desire to issue Amendment Eleven to remove the Internet Services provided under the Contract,and to extend the Contract for an additional year effective November 14,2014 through and including November 13,2015; NOW,THEREFORE, in consideration of the mutual obligations set forth herein,the Parties agree as follows: 1. The term of contract NI000008297,now MA-017-10011150, is extended for a period of one year, thereby amending the Contract period effective November 14,2014 through and including November 13,2015,unless otherwise terminated by County. 2. The total Contract Amount for the period November 14,2014 through November 13,2015 shall not exceed$392,001.00. 3. Attachment A Scope of Wark for Wide Area Network Tmnsport Services is amended to remove the Internet Services from the Scope of Work,and a revised true and accurate copy of the amended Attachment A Scope of Work is attached hereto. 4. Atmclunent B Cost/Compensation for Contractor Services is amended to remove the Internet Services fi one the Cost/Compensation,and a revised five and accurate copy of the amended Attachment B Cost/Compensation is attached hereto. Except as otherwise expressly set forth herein,all terms and conditions contained in the Contract and its amendments are incorporated by this reference as if fully set forth herein and shall remain in force and effect as amended herein. (Amendment Signatures an Following Pugo) Page 2 of 9 Attachment A CeuntyafOrange C mract N1000008297/MA- in,telecom holdings ine 0 01]-100111J0 In WITNESS WHEREOF,the patties hereto have executed this Amendment on the dates shown opposite their respective signatures below: Iry tolecam holdings inch �t1 /�///1�/f/� DATE: 9 �7 SIGNATURE: -U / V v� PRINT NAME: 14 tf TITLE: Ly DATE: 3 I I SIGNATURE*: IlBN�� PRINT NAME:Jonathan Dhillon TITLE:Assistant Secretary *If the contracting party is a corporation,the document must be signed by Me corporate offices.The fist signature must be either the Chairmen of the Board,President or any Vice President,The second signature must be the secretary,an aaslsmat secretary,the Chief Financial Officer or my as bm"t aenawars.in theahernadve,a single corporate sigoatore is acceptable when accompanied by a corporate document demonstrating the legal authority of the signature to bind the company. COUNTY OF ORANGE A political Subdivision of the State of California SIGNATURE: PRINT NAME; TITLE: P TI.Abbot��D:ep-uty Fn 1 Approved by Board of Supervisors on: Page 3 of 9 Attachment A County ofOmnge Commot NIDOOD08297 IMA-017-10011150 tw telecom holdings Inc. ATTACHMENT A SCOPE OF WORK FOR WIDE AREA NETWORKTRANSPORT SERVICES A. SERVICE LEVELS Contractor shall provide transport services with highavailability and minimum downtime.Service Level Agreements (SLAs)are a critical component of any transport service to assure that negotiated services levels are contractually adhered to by tie Convector.The County requires a minimum of 99,99%up time on all proposed circuits.The Contractor will ensure that available bandwidth or throughput will not drop below 90%of declared circuit capacity at any time on any proposed circuit.The Contractor will further produce reports to the County showing bandwidth utilization and availability of throughput on an hourly,daily,weekly,monthly,and yearly basis.These reports will be available on-line mid allow for on-demand bandwidth reporting by County staff at any time.Scheduled impact to transport services needs to be documented and sent to designated County contacts five(5)working days in advance. The County roust be notified within 30 minutes of any outages thmugh a pre-defined County escalation plan.All SLAs will be actively enforced by the County. Fee reductions Specified in Attachment B may result from Contractor's failure to notify County of planned and unplanned service interruptions,reduction in available circuit capacity,delays in repair or any other disruption of service without regard to the county's actual monetary loss from such disruptions. B. SECURITY The County Enterprise Network requires that Contractor provides detailed documentation outlining security policestprocedmes,"Best Practices",and technologies that are implemented in the proposed WAN Transport Service offering to increase security and mitigate risk. C. NEMORKAND TRANSPORT MONITORING Contractor shall provide a method for on-line monitoring by the County of all proposed circuits.The Contractor should be able to provide reports on real-time and historical bandwidth utilization.All reports will include the ability to show detail on an hourly,daily,weekly,monthly and yearly basis.Additionally,the Contractor may provide a portal or secure web access for the County to monitor circuit up-time and outages.A secure Internet-accessible website is preferred for County access to Contractor transport statistics and information. D. TRANSITION,TESTING AND ACCEPTANCE All services must be in place no later than January 15,2007.The County,will require the Data Center(1400 S.Grand Ave.)and 301 The City Drive South,Orange,be operational by December 15,2006,to insure smooth integration with existing County infrastructure.These dates may be change upon mutual agreement of the Parties.No payments to the Contractor shell be made until the Comity has determined that a successful testing of each circuit and Integration with County network is operational.Contractor will provide a comprehensive testing and acceptance plan Page 4 of 9 Attachment A County oforange Correa NI WD008297/MA-017-10011150 by Telecom holdings inc for each site and each circuit type.Ate minimum the County expects these testing and acceptance criteria to include pre-acceptance uptime periods and through put validation methodologies. E. ADDMONAL CONTRACTOR REODUIEMENTS 1.Contnactorshall provide full,24 hours by 7 days a week,support including telephone support(i.e.help desk)and maintenance of communication links,if applicable. . 2.Contractor will coordinate ordain&shipping and delivery of equipment and materials to any installation site,in the event such materials are required. 1 3.Contractor will provide any necessary equipment to initiate new services at a given location. 4.County shall receive at minimum a one-year warranty on all new pate and equipment. F. COUNTY TELECOMMUNICATIONS PROCEDURES All telecommunication and data services projects in County facilities fall under the direct authority of the office of the County information Officer,Deputy CEO for County Executive Offlce/Infonnation Technology(CEO/IT).No work is to be performed at any County owned or occupied facility without direct authorization from County Project Manager.Additionally,no consultation or engineering of any sort will occur directly between the Contractor and any other County agency regarding any County facility without the involvement,coordination and pre-approval of County Project Manager.The County uses a Telephone Services Request(TSR)for all services requested from Contractor. The TSR will indicate the installation address and the billing address,which may or may not be the same.No work is to be performed at any County owned or occupied facility without a signed TSR from the County Project Manager. Additionally,no consultatlon or engineering ofany sort will occur'directly bebveen file Contractor and any agency regarding any County facility without the involvement,coordination,and written approval frogr County Project Manager.Failure to comply with these instructions can lead to termination of the Contract.Additionally,ift he Contractor installs any transport Circuits without a signed TSR from the County Project Manager at any County facility,said performance will be deemed outside the scope of this Contract and die service shall not be compensated. If Contractor is unsure of a course of action or whether to undertake any service including but not limited to installation,repair,delefion,or termination of any transport circuit,prior to providing any service Contractor's Project Manager shall notify,in writing,the County Project Manager For consultation and written approval or denial of the work.All services are to be coordinated using the outlined methods,and through the County designated Project Manager only.The County Project Manager may provide a minimum of thirty(30)days notice for all mgrtests to terminate or delete any transport ciinuil.The only acceptable method to proceed with work is an authorized TSR.As part of this Contract,direct technical contact procedures and access shall be established fa-241ourn day week operational response by the Contractor.The Telephone Service Request(TSR)process is as follows: •The County Project Manager is responsible for processing and tracking the TSR and will be the single point of contact for any service. •The County Project Manager will notify the Contractor of a pending TSR. •The Contractor will pick up the TSR from the County Project Manager and arrive at the site on the due date to perform the work.The TSR can be faxed or e-mailed to the Contractor upon request. •The Contractor will cover all the work to be done with the designated County contact and be prepared to answer any questions. • Upon arrive[at Vie County location,the Contractor will be escorted to the work location and will porfe n all the necessary work In a professional and workman like manner and notify the contact when work is completed. •The Contractor will explain all the work that was done and have the County departme tlagency contact sign off on the TSR as completed. Page 5 of 9 Attachment A County of Orange Counsel N1000008297/MA-017-10011150 ov telecom holdings inc. •The Contractor will return the signed TSR and all ancillary documentation associated with the TSR to the County Project Manager. •The Contractor shall submit an invoice to County indicating labor and material used and referencing a TSR and Contract number.The invoice will include a copy of the TSR with the signature of the County contact that accepted the work performed.The Contractor will invoice the County within 60 days of the accepted completion of the project. Conimefto shall submit a list of all employees who will be directly performing tasks associated with this Contract to the County Project Manager.Contractor employees may be subject to a background check performed by the County's Sheriff Department and Probation Department,if required to obtain access at certain locations.Cost for my background check will be the responsibility of the Contractor.If changes occur to this list an updated list will be submitted,in writing,by the Contractor,to the County Project Manager.At no time will unauthorized Contractor employees perform any task associated with this Contract If this occurs the Contractor will be notified that they have not complied with the terms of this Contract and the Conti act may be terminated. Page 6 of 9 Attachment A i County oromgc Cowniv N 1000008297/MA-017-10011150 nv telecom holdings ine. ATTACHMENT B COST/COMPENSATION FOR CONTRACTOR SERVICES 1. COMPENSATION r This is a fixed fee Contract between the County and Contractor for services provided in Attachment A, Scope of Work in accordance with the pricing specified below. 2. SERVICE PURCHASE Contractor shall supply the following service for the period November 14,2014 through and including November 13,2015,except as noted below: Circuit Type Circuit ID From To Address Total Label Address Qty Moutlrl Fiber-14 IGigE 46/KFFN/101417/TWCS 1400S. 301 The City Dr. 1 $3,71520 Grand Ave South Fiber-6 I GigE 46/KFrN/101420/TWCS 14005. 1275 Berkeley 1 $3,715.20 Grand Ave Ave. Fiber-9 IGigE 46/KFFN/101422/TWCS 14005. 840 N. Eckhoff 1 $3,715.20 Grand Ave Fiber-2 IGigE 46/KFFN/1014321fWCS Grand Ave Broadway 77"land S. load 1 $3,715.20 N. Fiber-3 1 GigE 46/KFFN/101431/TWCS 1400 S. 1001 S.Grand 1 $3,715.20 Grand Ave Ave. Fiber-4 I GigE 46/KFFN/101429/-rWCS rand S. 4601 Jamboree Grand $3,715.20 Grand Ave Rd. Fiber-7 I GigE 46/KFFN/101427/TWCS I4005. I $3,715.20 Grand S Oraan wonaswo od 4fi/VLJGS/104319lI'WCS land S. Fiber-5 100mg-B 46/KFFN/104320/TWCS Grand Ave Solano DR Site 1 $5,725.60 64/KFFN/103146fiVCS Taxea: $934.75 Total Marrthly Coat: $32,666.75 Ad •Additional County location may 6e added and/or deleted to this schedule during the teen of the Conhaa. The Contract may be amended,as set forth in paragraph C,to add circuit locations. Fee reduction for Contractor's failure to notify County of planned and unplanned service interruptions reduction in available circuit capacity,delays in repairs or any other disruption of service,that result in an individual circuit not meetbrg the 99.99%uptime for any sequential 0rhty(30)day period: Page 7 of 9 Attachment A County 00range Contrecr NIMMOS297/MA-0174001I t50 In,telecom holdings Inc. Per Service Outage Percentage Credit Less than t minute(99.00%availability) No in I minute up to 4 hours 5%of the MRC 4 hours up to 8 hours i M.of the MRC 8 hours up to 12 hours 15%of the MRC 12 hours up to 16 hours 200/6 of the MRC 16 hours up to 24 hours 35%of the MRC 24 hours or greater 50%of the MRC 3. PAYMENT TERMS [tidal Set-up, invoices for initial set-up are to be submitted in aneers,unless otherwise directed in this Contract,upon the satisfactory completion and acceptance of testing of the entire system. If service does not meet acceptance specifications herein,Contractor assumes all costs and may not seek reimbursement from County. Monthly Service:Invoices for monthly service are payable monthly, in arrears,unless otherwise directed in this Contract.Payment for monthly services,as specified in Attachment B,shall begin upon the date of acceptance of Ole system. Contractor shall reference Contract number on invoice.Payment will be net 30 days after receipt of an invoice In a format acceptable to the County of Orange and verified and approved by the agency/department and subject to routine processing requirements.The responsibility for providing an acceptable invoice rests with the Contractor. Incomplete or incorrect invoices are not acceptable and will be returned to the Contractor for correction. Billing shall cover services and/or goods not previously invoiced.The Contractor shall reimburse the County of Orange for any monies paid to the Contractor for goods or service not provided or when goods or services do not meet the Contract requirements. Payments made by the County shall not preclude the right of rile County from thereafter disputing any items or services involved or bit led underthis Contract and shall not be construed as acceptance of any part of the goods or services. 4. PAYMENT/LWOICING/INSTRUCTIONS:The Contractor will provide an invoice on Contractor's letterhead for services rendered.Each invoice will have a number and will include the following information: 1, Contractor's name and address 2. Contractor's remittance address(if different from l above) 3, Name of County agency department(if county agency is actual cuticular name) 4. County Contract number(to be added as part of the billing address) 5, Service dete(s) 6. Circuit Label 7, Service description Page 8 of 9 Attachment A County ofOrarge Cannot N1000008297IMA-017-10011150 nv futon holdings lac. B. Total Invoices mid support documentation are to be forwarded to: County of Orange 1501 E.Saint Andrew Place,Suite 200 Santa Ana,CA 92705 Attu:Accounts Payable Page 9 of 9 Attachment B C iaayofOrana" Price hr kkaom h"Mie�ga rcm Asraement Na NIcaD003397 A M,NDMENT NO.10 TO CONTRACT NUMBER NID00008297 AS MA-017-10011150 FOR WIDE AREA NETWORK TRANSPORT SERVICES FOR ORANGECOUNTY This Amendment Number Ten(hereinafter"Amendment)is made and entered into by Lire County of Orange,a political subdivision ofthe State of California,(hereinafter r'efened to as"County")and tw telecom holdings inc„with its principal place of business at 10475 Park Meadows Drive,Littleton,CID 80124, (hereinafter referred to as"Contractor"),which may be r'efened individually as"Party"or collectively as Parties". WHEREAS,County and Contractor executed Contract N1000008297 for wide area network transport services for a three-year term commencing November 13,2006,hereinafter"Contract';and WHEREAS,the Parties issued Amendment Number One to amend Attachment A of the Contract;and WHEREAS,the Parties issued Amendmorrt Number Two to rrnow the Contract as number MA-017- 10011150 for an additional year effective November 14,2009 through and including November 13,M 10,and amend Attachment B to reflect amended pricing; WHEREAS,Ore Parties issued Amendment Ttnee to extend the Contractfnr an additional yea-elective November 14,2010 through and including November 13,2011,amend Attachment B to reflect amended pricing,and change vendor name from Time Warner Telecom Holdings,Inc.to TW Time Warner Holdings, Luc; WHEREAS,the Parties issued Amendment Four to extend the Contract fur an additional year effective November 14,2011 through and including November 13,2012,reduce the contract amount by 10%for the period effectve July 1,2011 through and including November 13,2012;and change vendor name to tw telecom holdings inc.; WHEREAS,the Parties issued Amendment Five to increase internet bard width in the amount of $32,305.00 effective September 1,2011 through Novanher 13,2012; WHEREAS,the Parties issued Amendment Six to upgrade the data circuit between Solana Disaster Recovery Site and the County Wide Area Network in the amount of$71,957.20 effectiveNovember 1,2011 through November 13,2012; WHEREAS,the Parties issued Amendment Severn to extend the Contract for an additional year effective November 14,2012 through and including November 13,2013; WHEREAS,the Parties issued Amendment Sight to increase internet band width fl'om 300mbps to 350mbps in the amount of$11,748.00 effective December 19,2012 through November 13,2013; WHEREAS,One Parties issued AmendmentNine to extend die Contract for an additional year effective November 14,2013 through and including November 13,2014,and removed the Contract's"Termination Liability"language; Page 1 of 80 Attachment B Counryo£Orenge Rim Agrocmcot No.14100000e291 tm telecom holdings ins W111-REAS,the Parties desire to issue Amendment Ton to provide a"Borstable Line"option for the internet services provided under the Contract; NOW,TBF..REFORB,in consideration of the mutual obligations set forth heroin,the Parties agree as follows: 1. The corn et Contract Internet Bandwith Access shall be modified from a"Dedicated"350 mbps line to a`Bmstahle"Line Option,expandable from the Dedicated 350 mbps tip to a maximum of 1000 mbps,expanding the hrtomatBandwith Access provided raider the Contract. 2. The total Contract Amount for the period November 14,2013 through November 13,2014,shall increase in an amount not to exceed$42,000,for an amended Total Contact Not to Exceed Limit of $464,400.00,to cover the expenses provided by this"Burstable"Une Option. 3. Attachment B Cost/Compcnsation for Contractor Services is amended in its entirety to include the "Burstable"Line Option,and attached hereto. Except as otherwise expressly set forth herein,all terms and conditions contained in the Contact and its amendments are incorporated by this referencc as if filly set Faith herein and shall remain in force and effect as amended herein. (Amendment Signatures on Following Page) i 2 Page 2 of 80 Attachment B County of Orange Pike Agreement No.N1000008297 uv lelmom holdings Imo. In WITNESS WHEREOF,the parties hereto have executed this Amendment on the dates shown opposite their respective signatures Wow: thy telecom holdines MO; �IA/ DATE: l • I c? � �Li SIGNATURE:� � �. PRINT NAME: tt ' r'' f e? •iCY_�LF(1, TITLE: if`Y I (:I'✓' DATE: �0 SIGNATURE*:jL (v( Yvu,� PRTNTNAME: P Irk WN 0-h�rv— TITLE: IZvP- Pctu- fiti. *If the contracting party is a corporation,the document must be signed by two corporate officers.The first signature must be either the Chairman of the Board,President or any Vice President.The second signature must be the secretary;an assistant secretary,the Chief Financial Officer or any assistant treasurers.In the alternative, a single corporate signature is acceptable when accompanied by a corporate document demonstrating the legal authority of the signature to bind the company. COUNTY OF ORANGE A political Subdivision of the State of California SIGNAI URE:'�—r_> PRINT NAME: V�C� TITLE: �tI �V art�b 3 Page 3 of 80 Attachment B Counry oforivir Price Agne cntTo.Ntaaa0 S297 W telecom holdings ine. ATTACHMENT13 COSTICOMPENSATION FOR CONTRACTOR SERVICES I. COMPENSATION Tllis is a fixed The Contract between the County and Contractor for services provided in Attachment A, Scope of Work in accordance with the pricing specified below. 2. SERVICE PURCIIASE Contractor shall supply the fallowing service forthe period November 14,2013 through and including November 13,2014,except as noted below: Circuit Type From Address To Address Qty Toml Montidy Label Fiber- 1 GigE 1400 S.Grand Ave 301 The City Dr.South 1 $31715.20 14 Fiber-6 1 Gi E 1400 S. Grand Ave 1275 Berkeley Ave. 1 $3,71520 Fiber-9 1 qjigE 1400 S.Grand Ave 840 N.Eckhoff 1 $3 715.20 Fiber-2 1 GigB 1400 S.Grand Ave 1770 N.Broadway i $3 715.20 Fiber-3 l GigF 1400 S.Grand Ave 1001 S.Grand Ave. 1 $3 715.20 Fiber4 1 Gi"E 1400 S.Grand Ave 4601 Jamboree Rd, i $3 715.20 Fiba-7 I GigE 1400 S.Grand Ave 1535 B.Oran ewood 1 $3 71S20 Fiber-5 100r -E 1400 S.Grand Ave Selene DR Site 1 $5 725.60 l 1 Internet 1400 S.Grand Ave Burstable Gigabit Internet 1 $3,221.60 Bandwidl Circuit Access 350mg to I000mg** 350111 ps (Monthl Char e Internet Traas rt (MontWY Char e) 1 $400.00 r Add/Mova Change Fee (One-Time Charge) 1 $250.00 j Not Included in JI Total MoMh1 CostBelmr Total Monthly Cost $35,353.60 Notes: *Additional County location may be added and/or deleted to this schedule during the term of the Contract. The Contract may be amended,as set forth in paragraph C,to add circuit locations. *+Burstable Gigabit Internet circuit. Burstable from 350mg to 1000mg. The County Burstable rate will be$92 per mg for all'Bursting"ova 350mg(351mgto 1000mg) TWT sand sample at the 95%percentile. Example,with 100 samples,the 95th percentile would be the 950t higbesl sample.lit a 30-day month there are 8,640 samples,die 95th percentile would correspond with the 8,208ds highest sample(8,208= 0.95* 8,640). Using this Calcutation;The County shall effectively get 36 hours of"Bursting"at no cost each month. 4 Page 4 of 80 Attachment B cou t"f Orange Net Alimernent No.N1000009297 lv,telecom holdings ina Pee reduction for Contractor's failure to notify County of planned and unplanned service interruptions r'erhretion in avaiiabte circuit capacity,delays in repair or any other disruption ofservice,that result in an individual circuit not meeting the 99.99%optima for any sequential thirty(30)day period: Per Service Out -Per-tentage Credit Lessthan l rninute99.00%availabili No credit l minute up to 4houts 5%of the MRC 4 hours up to 8 hours I0%ofthe MRC 8 hours up to 12 hours 15%of the MRC 12 hours up to 16 hours 20°%ofthe MRC 16 boom up to 24 hours 35%of the MRC 24hnmsor eater 50%of the MRC 3. PAYMENT TERMS Ind tin)Set-up: Invoices for initial set-up are to be admitted in arrears,unless otherwise directed in this Contract,upon the satisfactory completion and acceptance of testing of the emirs system.If service does not meet acceptance specifications herein,Contractor assumes all costs and may not seek reimbursement from County. Monthly Service:invoices for moodily service are payable monthly,in arrears,unless otherwise directed in this Contract.Payment for monthly services,as specified in Attachment B,shaa begin upon the data of acceptance of the system. Contractor shall reference Contract number on invoice.Payment will be net 30 days after receipt of an invoion in a format acceptable to the County of Orange and verified and approved by the agency/department and subject to routine processing requirements.The responsibility for providing an acceptable invoice rests with the Contractor.Incomplete or incorrect invoices are not acceptable and will be returned to the Contractor for corinotioti. Billing shall cover services andfor goods not previously invoiced.The Contractor shall reimburse the County of Orange for any monies paid to the Contractor for goods or service not provided m when goods or services do not meet the Contract requirements. Payments made by the County shall not preclude the right of the County from thereafter disputing any items or services involved or billed order this Contract and shall not be construed as acceptance of any pan ofthe goods or services. 4. PAYMEN'TlINVOIChNG/INSTROCTIONS:The Contractor will provide an invoice on Contractor's letterhead for services rendered.Bach invoice will have a number and will include the following information: 1. Contractor's name add address 2. Contractor's remittance address (if different from l above) 3. Name of County agency department(if county agency is actual customer name) 4. County Contract number(to be added as part of the billing addross) 5. Service date(s) 5 Page 5 of 80 Attachment B Coaatp ofornnge Ildco Agreement No.N la0000297 nr telecom holdings inc. 6. Circuit Label 7. Service d=iptioa S. Total Invoices and support documentation a e to be forwarded to: County 0f Orange 1501 E.Saint Andrew Place,Suite 200 Santa Ana,CA 92705 Attn:Accounts Payable 6 Page 6 of 80 Attachment 6 Service Modification Order form ��Yelecom. Thn80niba0rdnkwIe dlNobyMWucom lmld111ga lnubyanf lM1ro ikwhgl wmedsubsiSanes NalalewdfiNb de NeseM.s bdno cRNmd M1ereund lwM:4rdy'wiT )nM coum 010 (YuN.—'h aM Is cUzc:rve up.e h.,b11F by CusWmer and TWTC.Me v/ill Rnnnin2spvreigs tar In pw(WmOrM of leeubYdadns lNvr lM14 ,..i OW, !,,arm and Fpemte N 1clwvm.aNW.Iad111k5.II IMR k A enngid bat -IM1k Sn .Onkr W the plkr ngm¢m¢M(s)Wgm eeMceO being INI wNnnned.ON Seas.Ordar shs0 pm.g over no pWNinNMI and ar 'Nubh toxin. MonNIVPecurrin9 Charge lMPG1: AAYIAJ 1 Nan-fle.mdlp CM1arOalNBC1: SE:9.00 ClalaawrbN the inWx'uel tigmngb¢Ievecpm.�:Ill:al slwM1 irnlWdldhas Uro aWtvlityro bintl Luslomer•a tFis L^rvke Okm. lw kkeOm tml ngs CoN OmKM synNwe: gnamra: PININnme: Will ReaVI Print Name: HL GY`B TNL' VPlcu 'Rtle:xpGPa! 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Versiona.],n'.16359¢ b'/IelewmNnMaiN Pryel all Page 7 of 80 Attachment B Coarty oPOnagc Pd..Agres.,eat No.NJ D00000297 twtelecom holdings mu AMENDMENT NO.9 TO CONTRACT NUMBER N1000008297 AS MA-017-10011150 FOR WIDE AREA NETWORK TRANSPORT SERVICES FOR ORANGECOUNTY This Amendment Number brine(hereinafter°Amendment')is made and entered into by the Cmmty of Orange,apolitical subdivision of the State of California,(hereinafter referred to as"Comity°) and tw taleeom holdings inc.,whit its principal place of business at 10475 Park Meadows Drive, - Littleton,CO 80124,Qimsinafterreferred to es"Contractor"),which may be refaced individually as 'Tarty"or collectively as"Parties". WHSRSAS,County and Contractor executed ContractNI000008297 for wide area network transport services for a throe-year term commeneingNovenber 13,2006,horchisfur"Contract';and WHEREAS,the Parties issued Amendment Number One to amend Attachment A of the Contract; and WHEREAS,the Parties issued Ameadmemblumber Two to ranew the Connactes number MA- 017-10011150 for an additional your effective November 14,2009 through and inoludingNovamber 13, 2010,and amendAttachmern B to reflect amended pricing; WHEREAS,the Parties issued Amendment Three to extend the Contract for an additional year effective November 14,20I0 through and including November 13,2011,amend Attachment B to reflect amended pricing,aid change vendor name from Time Warner Telecom Holdings,Inc.to TW Time Warner Holdings,Inc.; WHEREAS,the Parties issued Amendment Four to extend the Contract for an additional yew effective November 14,2011 through and including November 13,2012,reduce the contract amount by !0%far the paled effective July 1,2011 thamigb and including November 13,2012;and change vendor name to tic telecom holdings htc.; WHEREAS,the Parties issued Amendment Five to increase internet band width in the amount of $32,305,00 offeetive September 1,2011 through November 13,2012; WBEMS,the Parties issued Amendment Six to upgrade the data circuit between Solano Disaster Recovery Site and the CDunty Wide AreeNetworkin the amount of$71,957.20 effective November 1,2011 through November 13,2012; WHEREAS,the Parties issued Amendment Seven to extend the Contract for an additional year effective November 14,2012 through and includingNovember 13,2013; WHEREAS,the Parties issued Amendment Bight to increase intemet bandwidth from 300mbps to 350mbps in the amount of$11,748.00 effective December 19,2012 through November'13,2013; WHEREAS,the Parties desire to i§sue Amendment Nine to extend the Contract for an additional year effective November 14,2013 through and including November 13,2014,and remove the Contract's "Termination Liability"language; I Page 8 of 80 Attachment 6 Countyaforangc Price AgreementNe.N1DDDDDs297 by iclecera holdings lae . NOW,TFIEREE0RE,inconsideration of the mutual obligations set fords lu ehn,the Parties agree es follows: 1. The term of contmctN1000008297,now MA-017-10011150,is extended for a palod of one year,thereby amendingthe Contrectpedod effective November 14,2013 though and including November 13,2014,unless otherwise terminated by County. 2. The total Contact Amount for the period November 14,2013 through November 13,2014 shall not exceed$422,400.00. 3. Contract's Article,General Terms and Conditions,K.Termination is replaced in its entirety with the following: "K.Termination:In addition to any other remedies or rights it may have by law,County has the right to terminate this Contract without penalty for cause.County shall afford Contractor written notice of its intent to terminate for cause and ten calendar days or such shorter time that may be specified in this Contract witliin which to aura the breads. County has the right to terminate This contract after-30 days'written notice without cause, unless otherwise specified. Cause shall be defined as any breaeh of coatrair,my misrepresentation or fraud on the part of the Contractor. Exercise by County of its right to terminate the Contact shill relieve County of all further obligation,except,County must pay for services until such disconnection actually occurs. Termination by Contractor.(a)Contractor may terminate this Contract w any service orderhemuade•or suspendseNices,with 30 days prior writen notice,upon:(i)Comity's failure to pay any amounts as provided herein;(ii)County's breach of any provision of this Contract or any law,mle or regulation governing the services;(III)any insolvency, banlaaptcy,assignment for the benefit of creditors,appointment of trustee in receiver or similar eventwith respeetto County;or(iv)any governmental probibition or required alteration ofthe services. Conhractor shall afooid Countywrhten notice ofthe breech and ten calendar days or such shorter time that may be spodn"od In this Contmc within which to cure the breach. (b)Cortracmr may terminate or suspend services without notice if:(i) necessay to protect Contmctoes network;Corrtraetorhos reasonable evidence of Cormy's fraudulent or illegal use of services;or(ii)required by legal or regulatory authority. Any termination shall not relieve County of any liability incurred priorw such termination,infer payment of unaffected services.All terms and conditions of the Conti-act shall continue to apply to any services notso terminated,regardless ofthe termination of this Contract Ifthe service provided under any service order hereunder Ines been terminated by Contractor in accordance with this section,and County wants to restoe such service terminated due to County breach,County must first pay all pest due charges,a nonreauring oharge and mooimatlona obarge. All requests for disconnection will beprocessedby Contractor in30 days o'kss. County must pay for services until such disconnection actually oama." 4. Attachment B Cost dompencation for Contractor Services is amended in Its enthety and attached hereto. 2 Page 9 of 80 Attachment B Coupty.foni. a Price Agr.mtNo.NIOOOW&M nvtelecom holdings Inc. Except as otherwise expressly set forth herein,all terms and conditions contained in the Contract and its amendments are incorporated by this reference as if fully set forth herein and shall remain in force and effect as amended herein. In WITNESS WHEREOF,the patties hereto have executed this Amendment on the dates shown opposite their respective signatures below: by telecom holdinas inc*: DATE: SIGNATURE: 116A4/Tw6 PR1141'NAME: 7fimc. U0.UI5 TITLE: SV —y�¢Xa�l^(,ntengol DATE: 4� fl� SIGNATURE*: M&L ! PRINT NAMjjE: CTII VKn_ i�l'� TITLE: Fit' " ECG d ll tr *If the contracting party is a corporation,the document must be signed by two corporate officers.The fust signature must be either the Chairman of the Board,President or any Vice President.The second signature must be the secretary,an assistant secretaty,the Chief Financial Officer or any assistant hrasurars.In the altemetive,a single corporate signature is acceptable when accompanied by a oorporatc document demonstrating the legal authority of the signature to hired the company. COUNTY OF ORANGE A political Subdivision of the Stato of California SIGNATURE------�'> ` '[E'• ll S i3 FRINTNAME: TVEaL I- KeJ.11=1�1 TITLE: DM My y 1�' 1ReAAaa2r A 6-(= ST- APPROVED AS TO FORM County Counsel Sohn H.Abbott,Deputy 3 Page 10 of 80 Attachment B County of Umnge Price Agreement No.NIOODO08297 W telecom holdings ina Except as otherwise expressly set forth herein,all terms and conditions contained in the Contract and its amendments are incorporated by this reference as if fully set forth herein and shall remain in force and effect as amended herein. In WITNESS WHEREOF,the parties hereto have executed this Amendment on the dates shown opposite their respective signatures below: tw telecom huidluo hri&: DATE: SIGNATURE: PRDITNAME: TITLE: DATE: SIGNATURE*: PRINT NAME: TITLE: *If the contracting party is a corporation,the document must be signed by two corporate officers.The first signature must be either the Chairman of the Board,President or any Vice President.The second signature must be the secretary,an assistant secretary,the Chief Financial Officer or any assistant treasurers.In the alternative,a single corporate signature is acceptable when accompanied by a corporate document demonstrating the legal authority of the signature to bind the company. COUNTY OF ORANGE A political Subdivision of the State of California SIGNATURE: PRINT NAME: TITLE: APPROVED AS TO FORM County Counsel (.�5� r°' 2r• r3 3 Page 11 of 80 Attachment B Ceuniyof0mrgo PriceAgmementNo.NIOOOOGB297 0v telecom holdivgs Inc. Approved by Hoard of Supervisors on: 1� 4 Page 12 of 80 Attachment B County to., Price Agmemen tlo.N1000008297 uvtele.rr haldings inc. ATTAC=-NT B COST/COMPENSATION FOR CONTRACTOR SERVICES 1. COMPENSATION This is a fixed fee Contract between the County and Contractor for services provided in Attachment A,Scope of Work in accordance with the pricing specified below. 2. SERVICEPURCHASE Contractor shall supply the following service for the period November 14,20I3 through and , including November 13,2014,except as noted below: Circuit Type Flom Address To Address Qty I Total Monthly Label Fiber- 1 GOP 1400 S.Grand Ave 301 The City Dr.South 1 $3,715.20 14 Fiber-6 1 GgE 1400 S.Grand Ave 1275 Bo1•kel Ave. 1 $3,715.20 Fiber-9 I 1 GeB 11400 S.Grand Ave 840 N.Eckhoff 1 $3,71520 Fiban2 1 GgB 140D S.Upend Ave 1770 N.Broadway 1 $3,715.20 Fibcr-3 1 GgR 1400 S.Good Ave 1001 S.Grand Ave. 1 $3,715.20 Fibsr-4 1 GgE 1400 S.Grand Ave 4601 Jamboree Rd. 1 1 $3 71S.20 Fiber-7 1 GgE 1400 S.Grand Ave 1535 E.Orangewood 1 1 $3,715.20 Fibe 5 100m -E 1400 S.Grand Ave I Selene DR Site 1 $5 725.60 Fixed/Timed 1400 S.Grand Ave Q3igabitInternet circuit> 1 $3,069,00 EIS w/Gig 300mg Port Internet Increase In Bandwith from 1 S400.00 Bandwith 300mbps to 350mhps Access 350mb s Total Monthly Cost 1 $35,200.00 Note:*Additional County location may be added and/or deleted to this schedhleduring the term of the Contract The Contract may be amended,as set forth in paragraph C,to add circuit locations. Fee reduction for Contractor's failure to notify County ofplamud and unplanned service interruptions reduction in available circuit capacity,delays in repair ar any other disruption of service,that result in an individual circuit act meeting the 99.99%uptime for any sequential thirty(30)day period: Per Service Outa a I Percentage Credit Less than l minute 9.00%availabi' No credit l minute up to 4 hats 1 5%of the MRC 4 homes up to8how 10%ofthe MRC 8 homsa to 12 hours 15%of the MRC 12 hours up to 16 hours 20%of the MRC 16 hours up to 24 hours 35*A oftha MRC 24 hours or greater 50%ofthe MRC 5 Page 13 of 80 Attachment B (]eaaly of Orsage Price AgeemewWc.N1000008297 tw telxom holdings ire. 3. PAYMENT TERMS Initial Set-up:Invoices for initial set-up mreto be submitted in arrears,unless otherwise directed in this Contract,upon the satufactoty completion mid acceptance of testing of the entire system.If service does not meet acceptance specifications herein,Contractor assumes all costs and may not seek reimbursement from County. Monthly Service:invoices for monthly service are payable monthly,in arrears,unless otherwise directed in this Contract.Payment for monthly services,as specified in Attachment S,shall begin upon the date of acceptance of the system. Contractor shall reference Contract number on invoice.Payment will be net 30 days after receipt of an invoice in a format acceptable to the County of Orange and verified mid approved by the agency/department and subject to routine processing requhaments.The responsibility for providing an acceptable invoice rests with the Contractor.incomplete or incorrect invoices are not acceptable and will be returned to the Contractor for correction. ]filling shall cover services and/or goods not previously invoiced.Tire Contractor shall reimburse the County of Orange for my monies paid to the Contractor for goods or service not provided or when goods or services do not meet the Contract requirements. Payments made by the County shall not preclude the right of the County from thereafter disputing any items or services involved or billed under this Contract and shall not be construed as acceptance of any part ofthe goods or services. 4. PAYMENTINVOICINGMSTRUCTIONS:The Contractor will provide an invoice on Contractor's letterhead for services rendered.Each invoice will have a mimber and will include the following information 1. Contractor's name and address 2. Contractor's remittance address(if different from 1 above) 3. Name of County agency department(if county agency is actual anstomw name) 4. County Conhnetnumber(to be added as pact of the billing address) 5. Seavica date(s) 6. Circuit Label 7. Service description 8. TOW Invoices and support documentation woto be forwarded to: County of Orange 1501 E.Saint Andrew Place,Suite 200 Santa Ana,CA 92705 Attn:AcoomrtsPayable 6 Page 14 of 80 Attachment B Service,'Modification Order Form;,:? Jtelecorr>_ Thhaervlce Call enamel Into by Wteleeom bolding.Nabyem N l hathey vvvadauloodlada eMcee to]ere cercad to nnida bee s Nebel.added hereunbor(mllsellved, I U9 and Counwof Omnpe S.M. Is etten shut up.tOM telecommunication el b0Nby Owttion end TwlC.TwtC vAl Od taree.goS 4m rOasedrce per earemalaunder NY Sella Order,vmlCr oum ell.ladle bee Islemmmuni atlone(Bfiltivs.Ulhera i.a...drard.1 a 1aplicMca Ortlarantl Me pnwagleemanl(a)hf the seMoa belly mvNlm wrenawm,tltla SeMce Crdx shell prevail ovr Neploraprevmenl and sty epplbblelarlR, Mont Resealed Charge(MRC): 506,2ab.00 Mo.Meurring Cherie(NRC): I. Customer and the Indlviduai hill MROW represent Nat such Indbldual has the adMav to bind Customer to this SeMce Order. by Lelemm hate a o. Coatemvr. Coushof0vnge Sl9naturc: Slgne(ure: Print Name: PrInLNeme:X TIUv: Title:% \N6 AE81.�T Date: I OI/LN o/R D.C.X l 5 Sala Person: Ronaldi Renewal Form Except as amended in Obe SeMce Could,all exhloug terms and condglon;Call to the mnaweu SmOol rsmaln In 0a0 farce and effect, The Renew al Tom"I commence On the data thet this SaNice Order Is Implemented by TWTC. Any services Nat are peel of the Original Service Order for the services 1191W below,but are net themselves Bated,are also renewed for he same Renewal Term,and for Nair oe l itt a usage rates. Di nnWWlce: IfCusbannals deconneding Services for any reason,It must deliver notice it either byfacslm0e to 303403-9836 or by small to 'CusbmerCere®b4lelecom.com'.No0ca by f leslmle cremes Y deemed given when deMered. AutomedI.Renewal Upon MplCaH nofihe Tad,of Md.Service Chose,the Term for services will nutomatlaaly renew for succassive monlhlo-momh tines unless eitherpany n000es the otberinwtltln9 Oil PC)Mil poll the expliallon Ofthe than commit tonn fir it wishes to temJnale bee servire. S.M.Addressll I 1006ovtle Wend Avenue;sane AM.Da92Taa Renewal Term 12 Morons Sol Renceal ONyNO technical changes rates remeln Me dome.entrance Site 140o S Grand Avenue Sane Arse. .Order Notee - aware,.. -" :'Clrould l0 lfao lira le I She, USRMRC Teei WINGRenewed IrrlemN Transport 45MFFNn014501NYGS 1 53,098.00 S .Ml Intemel Gand, Ift ..3mms 1 4'JKFFNN01450RVECS 1 1 $ 00.00 1 5400.00 Sub-Total 33,458.00 Oul Addmes Y.2 840 EC MOFF,ORANGE CA hot Rees Tarm 12114oldhs rat Renewal Con".Weirdest d mi Isla remain Me same.Z Lecalon Is 1400 S Grand Awn,Same Ana,00,9270A Pddly usual _OrEeallotSe_: PMat1400S Grand Avenue;same Mato FodnshoOl Nslool leato Nama' choultiDoftoplici Cut, 1 untt MRC Total MRC Renews NMNeIMJ-EAM 48rKFFNl101422]IWCS 1 Sol53,Tt620 Submoei I Solid 0 "Saralee AEdresslea 1275 BERKELEY FULLERTON CA 92531 Renewal Tonn'i. 121Loatia -Seel Renewed!OnlyNo technical chanem fall tamale bee same.Z LoeSan Ia 140J 8 Grand A.,,Sane Ara.CA MO5.Pricing incomes C) Notes°,.Fee at 1400 S.Grand Avarua;Santa Arse N Pod gsed Or this lecher, der BaMddwmer _ Clmug IS fitapplicable) cad Unllmoc Total MRC laddedgend, NatW IAN-eye 4wKFFNNm420![WCS 1 89]15.29 I 6AT16.20 ) SubdWal $3,716120 Verson 41 rev.930-12 mialwem-OmddenY 111 F,Z Page 15 of 88 t Attachment 6 6ervic.Addrroa W InO OROADWAY.SANTAANA CA8320S `Renewal Term 12mmVIS Slip.Ranenal Gnly-No IeGNmI Hanpe[rates Rmeln Natame ZW.Hank1,1008 Grand Avenue,Santa An.,CA MOM.R. ,Inelutles Drder NOka . PoRatl40DS.GMMRVSIWS;enlSAnat0 PORbladsrthlckaUen eaMceHalne Clmuit 10oa Ilceble ON I MRC newad Not.1AN-Eple 961KFFNli01492lRNC9 1 1 0,71520 $3.71S.20 `.:Sub•Total'c";`' 33,715.20 Stands.Ad3rasi a 1001 GRAND,SANTAAA CA WOS Ranewal Term 12 Monba Snlyle Renewal Only-No twM1Nml changes lades remain M came.Z toplknk 14008 Orand Avanue;SmihAna,G0210S.PtlWD ad.dx Order Nate. PMat14ODS.GWdAmde:SanbAnatD Portllsletl fu lhk lOcallon. S.rvle'Nema Clrou1t10 Ifs ilbehlel- MY Unit MRC 1 To151MRC Renern Nat]"W1-all 49MFFW101431NSW 1 53.]15.20 $3710,20 ..:Sub-Totai-:' 53,T15.� SeMCe Addrasc96 16390RANGEWOOD,ANAHEIMG0280.5 Renews Tour 12 Mortis S ple Renewal Onryio kchnlnal cnangm mla remaln She aeme.21¢alkn Is 1400 S Cmnd Avawe;Santa Ana,CA SVCS,Plftg Includes Order Nob. PoNat14008.GrandAvenue;Sans Ana to Pedllsletl ftrblckafieR Name CIMURIO 0z Ikabl. O " U.It MRO Toi.iN=flbn wed Native lAN-ElL 4WKFFNI1m4WfflNC8 I 1 I 58.1MM it 6371520 - ,Sub-Total 33,]tfi,Zl SwW.Add..W 4mi JAMBOKM NEVNPORT WEACH S26SO :„Rumwd Term 12Montha elmpie Renewal OnlyNo L2hniW Wngesnba bmein w.ema 2 Lac.tionln l4W S Gib Avenue,BznL=Ana,GS905.Pntl�pbtlWec Ordx N.ba Pmt91140DS.GaB11tl AV611119;GBnIOAa to Part tl.IBdfx W.ba00n. eeMaNema oncuml) Ue ullceble Qatar U.ItARSO - To ti MRC" news Native LAN-FJIe 4SdSI'M10142anI i I 43,716.20 03]1fi20 Sub-Total Suvlce Aadreea#0 301 THE CITY,ORANGE CA 92MB Renews Term. 12Mmlhe ... Simile Ranaw.i Only-No ieehnled.hengea natatimam 0S..me.z l safionk 140DS Greed Avow.;SSnb An0.G92205.Pddng btludea Odder r N.W. Pdat140OS.GrSsd Av.nue;SanaAalo PMOeIedbrlblalosalbon. SeMe.Namo CIrcUIt ID Ifs IkeblaCISI Unk MRE - :ToleI MRC Renewed Native LW-Ells 4WKFFW10141]TNCS 1 S ]15.20 53Tie20 Sus-Tool 50,]ii20 Gmka AMP..N 12 mi.CenierFiva Suds An.,Ca Win RerlewalTarm 12 Months -, 8lmpla Renews Only-Includes Portz,Typal],and 9NIAN,Cud E111AN's,brlea0on. 1201vk Canler Plxa;SxitaAnaxs MST....Stray Ordx Nota. FegOeId.CAS4IS3 �3er41Ce Name cirnAtlplfa ilabb Unit MRC -TOhi MRC n.wad lalA M3.ona1E]OSra 46A/LXIU104319nWCS 1 1 S5.405.00 $103,00 NaWe IAN-Enlemriae Swilthed Senb Ana G 491KFFNN043201IWC3 1 51240.a Si U Native tAN-Ea@ dwa StNltl�ed-Fassd G BgA4FPNIto3148lfWCS i u,aa.a 52a0RO St TdHI - SS.]2S.S0 Wnbn4d rer.430.8 twtelo:om-CorAdMtlal PtP208- CFL Page 16 of 80 Attachment B 0momyof Orange PdceAgnement No.NIO0a008297 h,tmovortholdinas,inc AMENDMENT NO,S TO CONTRACT NUMBER N1000008297 AS MA-017-IODI IISO FOR WIDE AREA NETWORI{TRANSPORT SERVICES FOR ORANGE COUNTY This Amendment Number Eight (hereinafter "Amendment") is made and uttered hito upon execution of all necessary signatures by and between the County of Orange,a political subdivision of the State of California, (hereinafter rofared to as"County)and tw telecom holdings inc.,with Its principal Place of business at 10475 Pads Meadows Dive, Littleton, CO 80124, (hereirmflor referred to as "ConOncmr'),which may be referred individually as"Party"or collectively as"Parties", WfiBRBAS, County and Contractor executed Contract N1000008297 for wide area network transport services fur a Ocoee-yeartoral commencing November 13,2006,heeinnfter"Contract".-end WHEREAS,the Parties issued Amendment Number One to amend Attachment A of the Contract, and WHEREAS, the Parties issued Amendment Numbe Two In renew the Contract as number MA- 017-10011150 for an additional year affective November 14, 2009 through and including November 13, 2010,and amend Attachment B to reflect amended pricing; WHEREAS, the Parties issued Amendment Three to extend the Contract for an additional year effective November 14,2010 through and including November 13,2011,emend Attachment B to reflrwt marinaded pricing, and change vendor name from Time Warner Telecom Holdings, Inc. to TW Time Wamer Holdings,Lao.; WHEREAS, the Parties issued Amendment Four to extend the Canned for an additional year effective November 14,2011 through and including November 13, 2012,reduce the contract amount by 10%for the period affective July 1,2011 through and including November 13,2012,aid change vendor nine to tw telecom holdings Inc.; WHEREAS,the Parties issued Amendment Five to increase Intenret band width in the amount of $32,.305.00 effective September 1,2011 Ouangh November 13,2012; WHEREAS,the Pities issuedAmeudnent Six to upgrade the data circuit between Sulamo Disaslo Recovery Site and the County Wide Area Network in the amount of$71,957,20 effective November 1, 2011 through November 13,2012; WHEREAS, the Parties issued Amendment Seven to extend the Contract for an additional year effective November 14,2012 through and including November 13,2013; WHEREAS, the Parties desire to issue Amendment Bight to inee se internal bandwidth in the amount of$11,748.00 for the period mulingNovember 13,2013, NOW,THEREFOR$in consideration of the mutual obligations set forth herein,the Parties agree as fallows; I Page 17 of 80 Attachment B Cbontyuf oreagc Pdce Aareo c.t No.N3a00nDW7 Iwklemmholdiago,lac 1, hmrease interact bandwidth from 300mbps to 350mbps and inaease Contract Amount by $11,749.00 forihe period andingNovember 13,2013. 2. A true and eonectcopy of Attachment B CostfCompenssNoa for Contractor Services is attached. Except as Otherwise expressly set£mill herein,all tams and conditions contained in Ore Conhact and its amendments are incorporated by this rcf6mmse as if fully set forth herein and simll remain in fill forme and effect as amended herein. 2 Page 18 of 80 Attachment 6 County ofl7mnge PrIm Agn ement No.NIC00008297 f w telecom holdlags,Ina In WITNESS VAMEOP, the pmties hereto have executed this Aineasdmont on the datee shown opposite their respective signatures below: Tw teleom haldines Inc.-: DATE: 12 I SIGNATUM ttl"�"y�� PEMTNAME: L ' N TITLE: r .T1\ DATE:I2- Ig Y- SIGNA'I'URE4: y/ PaiNTNAME: / Tt'17,x: t/�'&ta�/lam 1e,,k a 44,4 aA elf the caatmating party is a corporation,the document nest be signed by two atyorme office¢ The fiat aignalum must be abhor the Chohmm ef(he Ennrd,Presldent or any Vice PreddwL Th<xcontl signature must be the seuelvy,an assistant +eaxtary,the l'adefl•7moalai O�evvmy assistont trcnsmeis. fit theoltermtive,a single corpoMesigvnmre is neceptnble when aaompnnied by a cvp.te document demmotmting IhelcmI authority eftha slgnatum to bind tic company. COUNTY OF ORANGE A polidoel Subdi7•ision of the,^atyeofCahfoania 'SIGNATURE: lm "'`'r{, T17LE: 'URCHAkrual DATE: 2 3 Page 19 of 80 Attachment B County or Omnge Prke Aa,mme°o No.NI69000g297 talelee mnoldings,ine A'ITACIIMENT 0 COSVCGWENSATIONFOR CONTRACTORMY1CFS 1. COMPENSATION This Is a fixed fee Connect between dre County and Contractor for sa'viaas provided in Attechment A,Scope of Work fit accordance with the pricing specified below. 2. 8MICE PURCHASE Contractor shall supply die following service for the period ending November 13,2013, less 10% discount,except as noted below: ChTalt Type From Address To Address Q(y Total Label Monthly Fibre- 1 GiSS 1400 S.(]read Ave 301 The City Dr.South 1 $4,128.00 14 Fiber4i I G1 E 1400 S.Grand Ave 1275 Bedcelo Ava. 1 $4,128.00 Fiber-9 IGi1l 1400 S.Grand Ave 840 N.Eckhoff 1 $4,128.00 Fiber-2 I Gitall 1400 S.Grand Ave 1770 N.Broadway 1 $4128.00 Fiber-3 I ORE 1400 S.Grand Ave 1001 S.Grand Avc. 1 $4128.00 FLbaA I Gla 1400 S.Grand Ave 4601 Jemboreelld. 1 $4 128.00 Fiber-7 I GIgE 1400 S.Grand Ave 1535 E.Orangewood 1 $4128.00 Fiber-5 100mg-E 14D0 S.Grand Ave Soinnc DR Site 1 $5,725.60 (10%included in cost) Non-Recurring Charge of ±,480 3250.00 for Fib r5 FixedlTiered 1400 S.Gland Ave <Gigabit Internet cirouitV .00Ely w/Gig 350mbps(from 300nig) iuciudedPort oast) subtotal $42,I01.60 Less: 10'A discount $2,899.60 Total Monthly Cost $39,212.00 Now: 'Additional County location may,be added and/or deleted to this schedale during the tern of the Connect. The Contract may be amended, as set forth in paragraph C.to add oirctrit locations. Fee reduction for Contractor's failure to notify County of planned and unplanned sa'vtoe interruptions reduction fit available circuit capacity,delays in repair or any other disrupdonofservice, that result In an individual circuit not meeting the 99.99% aptime for any sequential thirty(30 day period: 4 Page 20 of 80 Attachment B County of0mege Price An,eement No.N10eDDD8291 hvlelowm hel0inga,inc e• a•vlce Onta c Pernnta ¢Credit less than 1 sarab 9.00%availabW No credit 1 minute up to 4 hours 5%of the Mc 4 botur up to a hours 10%of the MRC 8 hours up to 12 hours 15%ofthe MRC 12 boors Up to 16hours 20%of the MRC 16 hours ep to 24 hoots 35%of We MRC 24 hours or greater 50%of the MRC 3. PAYAMTTCfdMB Initial5et-un: hrvoice$for initial.set-up are to be subinitted in anaars,miless otherwise directed in this Contract, upon the satisfactory completion and acceptance of testing of ilea entire system. If service does not meet acceptance specifications heroin, Contractor assumes all costs and may not seek reimbursement from County. Monthly Service-. Tnvoices for monthly service are payable monthly, in arturs, mdess otherwise directed in this Contract Payment fir monthly services, as specified in Attachment B,shalt begin upon the date of acceptance of the system. Contractor shall roference Contract number an invoice. Payment will be net 30 days after receipt of an invoice is a format acceptable to the County of Orange and verified and approved by the agency/department and subject to routine processing requireumuts. The responsibility for providing r sit acceptable invoice rests wilt tire Connector. incomplete or iueonnot invoices are not acceptable and will be returned to the Contractor far correction. Billing shall cover services and/tor goods not previously invoiced. The Contractor shall whnbnse the County of Orange for any mordes paid to flue Contractor for goods or service not provided or when goods or services do not asset the Contract requireanonts. Paymeats made by the County shall not preclude the right of due County from(Installer disputing any items or services involved or billed under this Contract and shall not be construed as acceptance of any part of the goods or services. 4. PAYAUNT/IIWOIC)NOAKSTRUMONS:The Contactor will provide an invoice on Contractor's letterhead for services rendered. Each invoice will have a number and will include the following information: 1. Connectors name and address 2, Contractor's remittance address(if different from 1 above) 3. Name of County agency department(if caunty agency is actual customer'lame) 4. Conuly,Crannect nauabw(to be added as part of the billing address) 5. Service datc(s) 6. Circuit Label 7. Service description 8. Total Invoices and support documentation are to be forwarded to: County of Orange 1501 E.Saint Andrew Place,Suite 200 Santa Are,CA 92705 Attn:Accounts Payable 5 Page 21 of 80 Attachment 6 Service Modlficathfn Order Fori n Otelecolrn_ mbsenk.Graermanbmd eftel Immanbuldoll h IsI nimv NWndl .ad..l,dIdI mat we taffordlosson4d.lneaenmoa wine and I cnunl er Dran road,,t and is ailncllw upon eveetaon both by Cuslomerand MG.MG all amYnandoat For me pedeImellm nl la cubs 'a'sman tans S.W.Groan wts aw'i ancepemu no tdeeommunka0a+x IeAHm.If mere Is amnlllcl brad IMe Sallee OAm oMerpoora9renmemlol Im Nn[ndt bergart Ned orondadd,Ilis Servl[a GMwxtall PW oarine Wblag:earde-adanye111IseIff- met neamrinB Cherge III j]740 0 NomFemrting Ghmga B4nCp ".OB ' Colama and Ille ImpVtluY Year,belnrvn aRnl NY man IntlMdual has Her nulllMp b MM Cuxbmw to'his S'I Cana. tw teleoam Mlldngs llnI Cuslamm: Cuunl I draw F,s, p Stearns. (,�/J�"'1 � Sartanurc:x "`L A 41., P't- PYnlNamo: WIGan Pmdedskwn id Nems: 1 T �� Till e: VP)Gm ;IIUe:X taoln: i i / mb:X y set.Porto.: noodle M01: Chan a Form IOGuabmarosed. smominaw sYy eXala lh9[pe[N[veMcedtlsleebeWw.Efapl nxmndfedby NE%nl¢Mcdblbn.Ne WnwtldeavbMbelowremslnslnlull tw wtl aGecl.'"pd®onY ewWrm In Ihre wl Ih o:IgM of mnlmcl wlll ho robtmlmua la Inlll pl,0ke SeMeoe." � A[counl Numbs: 6m9514 j ILSk: IJON6iBP00 FxpMm: I '1� c6rua[tTme: vnlm A INntrol Seance Umr Foam 4vl8mFl ; ov.WGral Ca:aneltalnesa^`: tt1i5 0 end oml Rat ea sled SxNCB moeflwlbn SMOF Is knIr emel6andwhSb Access uPyaEu Iran loom en auser b men.by SOmE Iv 111 bandwldlh o1350mb.Part Is GIBE and no changes b Pan.I This upgrade is service alleclln"d tad OUet4ma;In advance to aehadub upgrade of Warren be idh.EXISTING CIRCUIT to:461 KFFN/101450/ I T WCS.Lonallon is On Net.CUrreN billing for 300mb and GigE Pon Is$IIJd0 man.now telMg for 550mb and GIBE Pan Is$7,4B0.00 Mflfl, Sentddrad4$t 19BOScaaGmlbAverur,$anmArti CA 92]OS s30rdanaraw..: I upradn t IhId ,eln Is service ddtb IIconlanuslarer In W. ka ace 11.a Connalka OnsirlEWrolandyasbmerinstivenceb ON Nol�7- EaSTBmdalsservl o:461iKFIFNI mola0laatalS. mete see Nei. Cat Ullin Uar300s and upgmdo to.412.00M EXISTING CIRCUIT IG.4 GiaS P /10145000 00 M.Lastbn seen Npl.Gwrenf Nlling War 300mb and GIBE PoM1IS$6.41200 Mflfl, '. now blgnB for 35Dmb end GlgE Panic¢]f BODD Mflfl. 9eNke Neme Y b 0 "UMI LARD TWI eO UnIINPC F. Total NNC Flemal naMVAtlNPccsss Y V.t=m ST.460A0 .oil :c.o0 NlsmatTmrc {g e f SO.m 30.00 I WIN b.SATotals 146GW b.00 .a..an.IS M.'a 4r[Wwm-C[a110emW Nod dl Page 22 of 80 Attachment 6 Coin'aformegc Price Agreement No.NICONDS297 tw telttom hddinga ina AAMNDMENT NO.7 TO CONTRACTNOMEER N100000S297 AS MA-017-10611150 FOR WIDE AREA NETWORI{TRANSPORT SERVICES FOR ORANGE COUNTY This Amumdment Number Savors (hereinafter "Amendmeaf) Is made and entered into by the County of Orange,a political subdivision of the State of California,@mefnafler referred to as"County') and tw tolecorn holdings Inc., with its principal place of business at 10475 Park Meadows Drfvo, Littletou, CO 80124, (berohrafter referred to oa "Contractor'), which may be referred individually as "Party"or collectively as`Parties". WHEREAS, County and Contractor executed Contact N1000008297 for wide area network transport services for a thr a ycar term commencing November 13,2006,berefi after"Contract";and WHEREAS,the Parties issued Amendment Number One to amend Attachment A of the Contract; and WHEREAS, the Parties issued Amendment Number Two to renew the Contract as number MA- 017-10011150 far an additional yenr effective November 14,2009 through and including November 13, 2010,and amend Attachment B to reflect amended pricing; WHEREAS, the Parties issued Amendment Three to extend the Contract for an additional year effective November 14,2010 through and including November 13,2011, amend Attachment D to reflect amended pricing, and change vendor name Own Time Wanner Telecom Holdings, Inc. to TW Time Warner Holdings,hrc.; WHEREAS, One Parties issued Amendment Pour to extend the Contract for an additional year effective November 14, 2011 through and including November 13, 2012,reduce tiro contract amount by 10%for the period effective July 1, 2011 through and including November 13,2012;and change vendor name to 4Y telecom holdings Inc,; WHEREAS,the Parties issued-Amendment Five to Increase intomet band width in 0ne amount of $32,305.00 effective September 1,2011 OuroughNovember 13,2012; WHEREAS,the Patties Issued Amendment Sixto upgrade the data circuit between Solaro Disaster Recovery SIte and the County Wide Area Network in the amount of$71,957.20 effective Nove nbet• 1, 2011 through November 13,2012; WHEREAS,the Parties desire to issue Amendment Seven to extend the Contract for an additional you effective Novomber 14,2012 through and including November 13,2013. NOW,THEREFORE, In consideration of One mutual obligations set forth hemlu,the Parties agree as follows: 1. The term of contract N1000008297,now MA-017-10011150, is code aded for a period of one your, thereby amending the Contract period effeotivo November 14, 2012 tlunugh mad iuchudiagNovember•13,2013,unless otherwise terminated by County. 1 Page 23 of 80 Attachment B County doraage Price Afire mnallo.NL00000M7 nv tnkcemheldkgs lec. 2. The total CentractAmomrt for the period November 14,2012 through November 13,2013 shall not exceed$457,728.00. 3. A true and correct copy of Attaclunent A Cost/Compensation for Contractor Services is attached. Pxoept as otherwise expressly set forth herein,all terms and conditions contained in the Conhaot and its amendments are incorporated by this refoence as if fully sot fordr herein mid shalt remain in fill force and effect as amended havein. 2 Page 24 of 80 Attachment B Countyofomnge pdceAgreeme nNe.NIODOODS297 ur lalecmn holdings inc. In WITNESS WHBRBOP, the parties hereto have executed this s Amendmani on the dates shown opposite their respective signattues below: tw telecom rholdines inc.*, DATE:J 0 — 41'1,Z SIGNA'MM:�..yt^•rl t/fTUlm PRINTNAME: ! rid .d ad,' < TfrL& SI/P� K >!.. 4G./pm n/� .. / efe„wrc / DATE: /0,Aha SIGNATUREa: IA24 PRINTNAMR: DuA l" <4ry- : bk ,.)4, TrfLE: r vn 'Ifthc crntnmting pxny ix x corpamtien,the dowment mast he algned by nvo wrpomm oflicas. T'hc Rrn ni6tmtum mun be Olmr the tgrainnun of the Board,P idnn or any Vice Pmsident. The second signetnco must be dm xmretxq,a ..ismnt Rnmtap•,dte Chief Financial Offmev ar mry axsisWnl teasnem. In Ilm eilcrnnlivq rt single corpemic sigvoMe is ncce➢table sehw nmompmlcd by ncorperate dontmmtdcmonslmdogilulegW nuthorlty ofihe signotum W hiad the conspany. COUNTY OR ORANGE A political Subdivisiiopo��n of thee''State s of C,aalifo nia SIGNATURE: V'I ��W "IM et t/ ) PRINTNAMI1 r,XCG CrIppa4ie �/•pli �p� TITI.H: I W� ap'vltA,� DFt 'r {O ROVE FORM Illtfy CA nS John H.A butt,Deputy Approved by Botud ofSupetvisom on: �Z- 3 Page 25 of 80 Attachment 6 Calatyafoyinge PflwAgmemear No.M1000OOS297 rw telecom hehliags inc, ATTACHMENT B COSTICOMPTiNSATIONFOR CONTRACTORSERVICFS 1. COMPENSATION This is a fixed fee Cmntnet between the County and Contractor for services provided in Attachment A,Scope of Work in accordance with tke pricing specified below, 2. SERVICEPURCHASE Contractor shall supply the folluwhng service for the period Noveaba' 14, 2012 dnough and inchrdungNovembor 13.2013,less 1094.diseonmt,except as noted below: Circuit Type Fivin Address To Address Qty Total Lobel Monthl Fiber- 1 GigE 1400 S.Grand Ave 301 Thu City Dr.South 1 $4,128.00 Flb%6 I GUE 1400 S.Grand Ave 1275 Bes-keley Ave. 1 $4 128,00 Fier-9 I Glgli 1400 S.Grand Ave 840 N.Eckboff 1 $4 129.00 Fiberv2 I GIRB 1400 S.Gmnd Ave 1770H.Bivadway 1 $4128.00 Fiber-3 I Gl E 1400 S.Grand Ave 1001 S.Gmnd Ave. 1 $4128.00 Fiber-4 I Gl B 1400 S.Grand Avis 4601 Jamboree Rd. 1 $4,128.00 Fiber-7 1 Gi B 1400 S.Grand Ave 1535 B.Oran ewood 1 $4128.00 Fiber-5 100mg-E 14008,Grand Ave SolanoDRSits 1 $5,725.60 (10%included in cost Non-Recirning Charge of I $3 250.00 fur Fiber 5 11kodfriomd 114110S.GrandAve, <Gigebit latemid ob•a4t> 1 $6,412.00 PIS w/Gig 300mg (10%included Port 10 cost) Subtotal $41,033.60 Less: 10%discount $2,889.60 Total Monthly Cost $38,144.00 Note: *Additional County location may be added and/or,deleted to this schedule during dse twin of the Contract. Tba Contract nnsy be amended, as set forth in paragraph C,to add oirenit locations. Fee reduction for Contractor's failure to notify County of planned and unplanned service intmrupdons reduction in available oimuit enpnoily,delays in repair or any other disruption of vervice, that insult in an individual chervil not meeting One 99.99e/o uptime for any sequential thirty(30 day Wind: d Page 26 of 80 Attachment B Countyoforsnae PdoaAerannatNo.NI000008297 ar tde.om hddln'Inc. Per Service Octane Pencentag.credit Less than l minute 99.00'%availability) No credit I minuteu le4hova 5%of1he MRC 4 how.up to 8 hours 10%oftlwh9tC 8 hours up ml2hours 15%o tIm MRC 12hovi a up to Means 20%ofthe MRC 16 tics.up to 24 hours 35%oftho MRC 24 hours or greater 50%ofth.MRC 3. PAYMBNTTL'RMS Initial Set-up: Invoices for initial set-up are to be submitted in arrears,unless otherwise directed in this Contract, open Clio satisfactory completion and acceptance of testing of the entire system. If service does not meat acceptance specifications herein, Contractor assumes all costs and may not seen reimbm'scntetrtt}ore County. Monthly Service: Invoices for monthly service are payable monthly, in arroars, unless otherwise directed in (his Contract, Payment for monthly services, as specified in Attachment B, shall begin upon the data of acceptance ofthe system. Contractor shall reference Contract number on invoice. Payment will be net 30 days after receipt of mr invoice in a format acceptable to the County of Orange and verified and approved by the agency/depvtment and subject to routine processing imin temeuts. The responsibility for providing an acceptable invoice rests with the Cmnractor. Incomplete or incorrect invoices are not acceptable and will be roamed to the Contractor for correction. Billing shall cover sorvices mid/or goods not previously invoked, The Contractor shot]reimburse the County of Orange for any manias paid to the Contractor far goods or service not provided or when goods or services do riot meet the Contuct requirements. Payments made by the County shall not preclude,the right of the County from thereafter disputing any flans or services involved or billed under this Contract and shall not be consbued as acceptance of any part ofthe goods or sorvices. 4. PAYMENT/INVOICING(INSTRUCTIONS:The Contractor will provide an invoice an Contractor's lottedu id for services rendered. Such invoice will have a number and will Include the following Infomtellar: 1. Counselor's name and address 2. Contfictm's iemithineb address(ifdifferont from l shove) 3. Name of County agency dopm Intent(ifcounty agarcy is actual customer unto) 4, Comity Contract number(to be added as part of die hitting address) 5. Service date(s) 6. Circuit Label 7. Service description S. Total Invoices and support documentation are to be forwarded to: County of orange 1501 E.Saint Andrew Place,Suite 200 Santa Ana,CA 92705 5 Page 27 of 80 Attachment 8 Ceuntyofolvage Pi,c Agmeine0Ne.NIGa00a8297 he W..ho7d ngsiuc. Atin:Accounts Payable I G Page 28 of 80 Attachment B County dom"ge F,ice Agreement No.NIIMlJ0aR297 tw telecom Wldlogs.Is- AMEND1v1.ENT NO.6 TO COMRACT NUMBER N1000008297 AS MA-017.10011156 FOR wmE AREA Nmvon1 TRANSPORT SERVICPS FOR ORANGECOVNTY This Amendment Number Six(hereinafter"Amcndroent")is made and entered into by the County of Orange,apolitical subdivision of the Stem of California,(hereinafter referred to as"County') and tar n4ecpm)loldings;nc.,with its Inincipai place of business at 10475 Park Meadows Drive, 1;it"n,CO 80124,(hueina0urrufeued tC as"Conunctor"),which may berehncd inxlivira,ally e5 "Petty"or collectively as'Pan)es". WHEREAS,Comity and Conomctor executed Contract N1000008297fm•wide area network tmuspmtservim for:a three-year term commencing.Novemher 13,2006,hereivafier"Contract";and WHEREAS,the Parties issued Amendment Number One to amend Attachment of the CCntmGt; WEMAS,the Parties issuedAmendmant Number Two to mew the Contract as number MA- 017-10 01 11 5 0 for has additional year effective November 14,20W through end including November 13, 2010,and amead.AttschmuntB m reflect wamded pricing; W-IMMA.c,the Parties issued Amewbat at Three to extend the Contract for an additional year effecGveNovembax 14,20)0 through and including November 13,7,011,amad Attruhment B to reflect amanded pricing,and change vardor name from Time Warner Telecom Holdings,Inc.toTW Time wamer73o1du�gs,luc.; WHEMAS,the Parties issued Ameadmanat Four to extend tine Contract for an additional year effective November 14,2011 0nougltand including November 13,2012,reduce the contact amount by 10 a fa the period effective July J.2021 through ad hncluding November 13,2012;and change vendor name to tw telecom holdings lac; WEEREAS,the Parties issued AmendmentFive.to inmate imernetbondwidth in flu:amount of $32,305.00 eflactim September 1,2011 tfaoughNovmnber 13,2012, WH MEAS,the Pities des m to issue Amendment Six to upgrade the data circuit between Sulanobisaster Recovery Site and the Couary Wide Area Network in the amount of$71,957.20 effective November 1,2011 through November 13,20M NOW,THEREFORE,in conelderidlon of the mutual obligations set forth herein,the Parties agreo as follows: 1. Effective November 1,2011,Coadmotorsha0 providea 100mg P data cimult between the Comity Wide Area Nrnvmk and the Solano Disaster Recovery She. 2. The total Commas Amomttforthepedod November 1,2011 duoughblovember 13,2o12is Increased by$71,957.20. 1 Page 29 of 80 Attachment B Camay of Orange Price Agreement No.N1000008297 nv telecom holdings,lw 3. Atme and contact copy of Attachment13 Cosr/Compensetlon for CommemrServices is attached. Bacept as otherwise expressly sec forth bar'ein,all terms and condilions contained indla Contract and its amendments are incorporated by this reference as if fully satfortb herein aid shall remain in full force and eMetas amended hereiu. 2 Page 30 of 80 Attachment B County of Omnge price Aprennenl No.NIMOOOR297 sm telecom holdings,inc IN WTITIDSS WMR80F,the pasties hereto heve executed this Ambbdment on the dates shown opposite their respeotive signatures below: tw telecom haldines inn.*: DATE: p4-16-2ait SIGNATUILB: pA PRINPNAMH 1 U yna QyiS �j TITLE: A55//S�f/7,{KIyJ'1' SGOYI: /'1 _ DATE: l �-G �I S.IGMTURE: FRBdTNAM 7 (A (1f� TME 1 alfdte eonuncdvgpazty isarnipromuoa Ihcdvwment mpstbeagnTi se=ad signamoma b Iha = Ligaalvraswathe uNm ne(hh Cnicfvttheawsd ftr-ar ni essay Viaepmsided. Tim zemndiw.awclao b thexve�..is usisinnl seen•wry,the GdctF>mn�d OFGar-army assistant tressure¢ in INc eliorndive,asiogiecmpamh sigaauve is aaegable when xxampadsdbY a eonomle docmuen[ticmovoatle;We Legal arthv:ity vtihcaigodwe m biad Newmpwy. COUNTY OF ORANOC ApEllitiMIsubalvision of the State of Cadornla , TME: DATE: 41 a Approved as toform Office of the Coanry Counsel ` (/ Orange Cowry.California DATE:07 -26� I BY. Deputy County Counsel Approved by Board of Supervisors on: 3 Page 31 of 80 Attachment B County ororunp Price AgreemenrNo.N10000DEP97 tw tekcom holdings,inc ATTACBMENTB COSTMOM'ENSATION FOR CONTRACTOR SERVICES 1. COMPENSATION This is a fixed fee Contract between the County and Contractor for s mices provided in Attachment A,Scope of Work ha Accordance with tbepdcing srecified below. 2. INITIAL SERVICE PURCHASE Contractor shall supply the£oUewing sorv)ce for the period November 14,7010 through and including November 13,20121 less 30%far the pnrlod MY 1,2011 through And including November 13,2012,except As noted helow: a-cuit Type Prom Address To Address Qty Tote) Label I I Monthly Fiber- IrigE 14MS,GrwdAve I 30IThe GStyDr.Sou41 1 $4,128.00 14 Fiber-6 1 Gi 14IXI S.Cxsnd Ave 1275 Bake Ave. f 54.128.00 Fiber-9 1 Gia 1400S-Grand Ave I840N.Pckhoff 1 $4,128.00 Fibar2 1 GigS 1400 S.Grand Ave 1 177D N.Broad we 1 $4,128.00 Pibev3 I CiRE 1400 S.Grand Ave 1001 S.G and Ave. 1 $4128.00 Ffl=4 1 QW 1400 S.Orand Ave 46017ambome Rd. 1 $ 128.00 Fiber-7 1 MgB I400 S.Grsnd Ave 1535 E.Orangewood 1 $4,128.00 Fiber•5 100mg•P 1400 S.Orand Ave Solano DRSire(effeciive 1 $5,725.60 1111/11 01rovgh L0112 (10%included in coat Nan-Recurring Chergeor 1 $3,250.00 for Fiber S MedtTiamd t400 S.Grand Ave cGigabit Internet circuib $4,750.00 HISw/Gig (increasedhom 100rngto ($6,4MOD Port 300mgeffective9/112011 monthly cost through 1111312012) offec6ve 9/1/11 through MY20M 10%included in coati Total 1 $33,646.00 ($35,308.00 etfee0ve 9/l/I1 through 11113/2012) ($41.033.60 effective I1/1/11 through 111IM2012) 4 Page 32 of 80 Attachment 6 County of Orange Price Agreement No.N1000DO9297 rwrelecom holdings,!no .Mote; *Additivaal Cuuuty Location may be added and/or deleted to Gs schedule during the term of the Contract. The Contract may be atnanded,as set fordl in paragraph C,to add circuit locations Fee reduction for Contractor's failmn to notify County of planned and unplanned service interruptions, reducfon in evaiinble circuit capacity,delays in repair or any odiar disruption of service, that result in on individual circuit not meeting the 99.99%uptime for any sequential thirty(30)day period, s Page 33 of 80 Attachment B County of0+angc Price Agreemeot No.N1000008297 nM le!eeenl holdings,in: Per Service OWRE Percentage Creft Less than I minute(99.00%aVaRabi ity) No credit i minute up to 4hours 5%Of the MRC 4hours u2 to 8hours 10%of tho MRC 8 hours up to 12 hours 15%of the MRC 12 hours u to 16 bours 20%of the MRC 16 houiav to 24 boms 35%of the MRC 24 hours or greater 50%of die WC 6 Page 34 of 80 Attachment B County oFOrnnge Price Agnsse entX0.N100000g297 tw telecom holdings,inc 3. PAYMENT TERMS Initial Set-in: Invoices for initial set-up are to be submitted in ancan,unless otherwise directed in this Contract, upon the satisfactory compledon and aeceprencc of testing of the entire System If service does not meet acceptance specifications herein,Contractor assumes all costs and may not seek reimbursement from County. Moot v Service: Invoices for monthly service are payable monthly, in aaeus,unless otherwise directed in this Contract Payment for monthly services, as specified in Attachment B, shall begin upon the date of acceptance of tine Systern. Contractor sball mfetcuce Connaa numltrr ou invoice. Payment will its net 30 days aflerteceipt of an invoioe in a format acceptable to the County of Orange and verified and approved by the agency/departrrwnt and subject to tontine Processing mquimments. The responsibility for providing an acceptable invoice tests with the Contractor. Incomplete or incorrect invoices am not acceptable and will be returned to the Contratmv furcotmetion. Billing shall cover service and/or goods netpre dously invoiced. The Contractor shall reimburse the County of Orango for any manes paid to the Coamoor for goods or service not provided or whets goods a services do not meet the Coutmctrcquiremants Payments made by the County shall notprecludo the right of the County from thereafor disputing my items of services involved or biflud under this Contract and shall not be constmed as acceptance of my pact of the goods or services. 4. PAYM[EN TINV07CING INSTRUCTIONS: The Contractor will provide m invoice an Contractor's letterbeed for services rendered. Bach invoice will have a number-and will include the 11DUO ing infotmation: 1. Cno actor's name and address 2. Contrracau's remittance address(if dif etentfrom 1 above) 3. Name of County agency department(if county agency is actual customer name) A. Qyunty Contract number(to be added as put of the billing address) 5. Setvim dawn) 6. CimuitlaW 7. Service description 8 Total Invoices and support documentation am to be forwarded to: County of Orange 150113 Saint Andrew Place,Suite 200 $oamAm,CA 92705 Attn: Amount Payable 7 -- Page 35 of 80 Attachment B Jtelecom. Extended NLAN Service Order Form Customer Information Select Order Adtvtty Status of Contract TINTO Standard Terms and Comment On Flk Castled; 1111deas TWTC Master SeNAx Agreement Attached Customer Name County of OmMie ACCome Number 2BM14 Samuel Address 12 CINC Center Plena B311nit Addre55 County M Charge;1501 E$Writ AMmW PL M 200 City,County.State,Zip Saints Ana CA 91 City.County.State,Zip SamaAna,CAS2705 Extended NLAN Service Information (1) Product Name F Sarin ENLAN (2) Typed SerWce F Paldt ftldm FJJLAN (1) Product Name Enterprise SNLAN (2) Bandwidth Type (3) Configuration PomPro-Print (4) VLARTag Semite Unrmged Tagged Servlo.(UTS) (5) #d Owens =1 am Pon =10eMPat =10OPed (s) COS S.mlee Package F Basle Pricing end Charge Summer Tote)Monthly Raurdng Chage(MRC) $ 5,125'60 Total Non-Recurring Charge(NRC) $ 3,250D0 Contract Term(W) 12 MmMs LGHN6fi6UU9. Pessntage of interstate Usega(PM) JOB Number Addifiw .le,as may be oeaeaedl If Cie..,soma.coley he Inetaeloo orn Wring he MUM"Whice,me comae Wd.aW d+:mMmlydemamdw palm. Remarks TERM:The term of title Service Order shall be co-terminus with Customers WAN Services and shag terminate an November 14,2012. ENUN Shol hom IXanee County le scene Court,net.Center.10ome mrvMidth.and DUKE Pries,M bet SUN-O Uca)Hanson VAIN MNLLMMO Flow pH mother M oost Slmen thes,.00 ane Come,otIXHlOe won as requtrM to UTENO OMARK AT Sol.DATA CENTER AND PROVIDE RACK SPACE for TW Wis..a acme alb.TM WlapeW DMARK N Omltge county sae.12 OMc. SlmtlHtl edoet Wlndwrs:NTC maypeRo,m muene natlwM maintenmce aeMean 12:01 AM ens 6:00 AM keel Ilene,M1hnsay INVupM1 SMtlay.T1TG meyaKantl OrsahWub tldYlon al w xiMonit a n naeacary. Customer siprotes and aceper this ahemN MNEoh,Wet EcwdW NIANrnealmal Ethirme Sent.O:der,Mlkre a+Mbchpmwessha asecosad'hiNTC SImOie Tomeers Cwarwor the Msmer Senea Agreement mtened tom Main page And he V"NTV Smdu ONM. DestrM Insblbllm Ode Nreazholde:b m%ecrb'RVTC inlemel pmmsbning inlercals,xilicM1 dttspedfi[IosvMn type,guan111Y.ktPliw oM avaeNll'M- P:wA bning Inlemlbpi s alley rereipl G slgnM H v mtl MY dherMui:M d=manlWIM,Ton MM eceanlperSonv'nplv.MeaNm Ouesale toeuNmmerupon reeelplotylmpiire!Nkrmallon. Cue10moa VMetlaee IM1Hthe In: uWae ling Sits OMemQ omens CehNthae hII Md Pomp1e16 dJlh0lip'bbNd NSIOmH, twtaledom holding.ta. Customer. County oof orange Signature: x Stimulate: Name: WMun lersteddem. Name: Paula Kielich Title: VPJGM Title: iTComraoU Man er oats: x Data: Salesperson: Ronald Mills Venbn 5.5 ReWSM 52411 N/mbmm-Geddimhl Pape 1.15 Page 36 of 80 Attachment B Extended NLAN Service Order Form &elecom_ ' `F ENliN'M atro,.L•o Ea'S Mn.Eo4.m auron sNecl ° Selx�CllYl _ PM InwWn NUMa Lxallen et lxgbn iR LMSYM 0] Laee6an 66 NeMPM SIeW. OrtNvl nllNef NMwk6Nluef NnNa'k Slai�vf MIVMwT 0 Yml YW IIXMeee eT INv'IewT et PizPwl6he PeR] ISb Pul] 1L8 StlW Pal Sbef StlMpS 6h6! . 1W ME 1W NE SaN46viMtlBO Sgatl3wtlMlOff P OL9nv 12CiAc[ erfl®RaMli6104 61S WTmna@ SfW SxMAIDD Cau FeHtlE Sduw C.Lw gpU,Zip CYbnfa671M dem MP oematlgmlFV OE WOE 0 Nmnn W Lw nll v M 61M COMeG Slum w lb SI.w Hum1 61N%ane No. 11 1 BS4SBBt Hvum IX/s�v M.-ft. m BN-9 MaWie vfPc¢v Catla 714w4 Hu CmYM60 0 N lID T11R15 T01600 CBidl IM iW]c FqW meN LuaumerPrtmttv tt aqH M-0RRmn fAE _ -- _ . .'SGAO 5 .. .Cl,. -�.:�6Mm 5 2.{' �i$4':' OP MPC S SeMw19 nnxlRll MRO i _ 5W.00 $ aervAUIdJINPO S,aL ' — ibOO.W 5 ^•1..�1>60.W S i. 'S x MPc SO.W 5 1TR.W i i - PNRC ID.00 50.W i S .. . - _... c ume =s soleac r:-?- sdaib seMn PMIm.Yk rNUM45f tacNan f6 txeWnPo l.a[gIw AT 1sm11wW Nehak BlMlu N. SM.1 W.h TN NaNwk9NMif Nedmk 6Wuvf Id.R et InuRvwi InlufvaT of IMeTmnT i P.S.PMitra 56m Pal8bf SekcI PoP 64nt BNetl PVl Strnf BaV.iPM6Yet PM6mvMi5n a SWdPadMtlIM BlWlevdr6®M 8Wd8mMNN9 Selatl OenlMOIM AaIM6roe Cvu SNb.LP MBIwNA1NFY fiu+m Neme S M SU tle Mono No. Hvm ofAueu MelbtlsMAavu NpMftt C5nnl0 TVG mm Guvlanm Pw offf enl eaxemFo6r cPe s:rnwie.wAldln'MRc<'. - 2MRG f S $ S - 3NRL Need More Socallom4 .M-ARKS Y,,'i's�a" '.. s.::.': rtS t .;. ENWi9ervke Nan ga8e Camtyfv6eWp Camry OeleCWu.tOniL MMK3v W ObE PaurthMM1 We-OpgmINeMMIrWNMNIMSNOFemiMfiuebmale0ue5161nwn H!!Y iA1tl enn Tw ro egen3 omen a riiuw immi edelmt m yda q Pmlwmr. r C a.romer } �� wua lain f vae uw.,deMl RVINewm-CaPoWlel P4e1al Page 37 of 80 Attachment B Extended NLAN Service Order Form 4i)telecom. ENLAN Metro Locatlon Information Cit,Name oLIIMn. I CelJentl I I SO.a ± I I 5e1aaci117 Pon Lrcztion NumGr bwllPn 61 L.Mlpn SY L.wtlen W I I L..a.rt G1 N.rkAilw OnNal OIIN.I NeM.A Saluz? .Yelvrork Slatu¢? Ineri. Optical PoK.I IMMaze Tvve? InlerbceT pe± PM S'va Pen11Gb Pon21Gb so.firl Size± Select Pm Sm] BaMwitlN YOO Mb lb]Mb SekclBMtlwAlh? 6AecIBaMwi$h? Phyfral MUress 12 C'mc C.nler PlazaR :6H 675 W Tmas Street 3u"ww Wv.Cwn s.nla An..IXa -a County.' Fairfieltl.sket,Cpunl Sat&LP Ltell. 94533 weteiti.94533 D.mardHiri MPOE WIDE aupt irp Namu Cbu'ntyaOranp. Die.c.., Sit.coulee lSt..lbi, te,Nua se.ph.-N.. f n14t W44e91 1 914)W+9%I Naurs prAmsss lsa -`i m bam M.11mI A.ws. C.".a St..Nwnv Cwtact5mw 14. NPNNXY, 71ME45 T%1298 Cline,to n4Tc Epfgmenl Typo of H -OfifiwE a C FmE PORT WC, m v S 6EO.a4 ISSISm S itServlwlBarbwltlih k6lC 4 mB� t fiSB.fiD 5 S Bantlwltllh NNC i Y.SW.W E LT66Gfl E S Typ.2MiC Tw2NRC W.W S..." It S - C :b e, I li ] it CV? I Sdmct ] Selectw,? Pp[lmaS.n NumCX bwll.n K LeuNen 06 Lbwtl.n M Li—elun kB Nt.statue NMwM6Wus? W..K Status? Ne..ik Smlue] Nelx'.m Slams? lmerlece Im.m:<rvPe± Ire.0.T .? "I.e.- Tece] mtana=er a Pen 6Ve a'alecl2pn Si¢P SNecl Ppn bizz] Selen Port Size? Selzer Porl biu] P.n Selar: B.Mwehh bveW S.bclBMtlxVClh] Soled BantlmNh? S.BCI 9aMwgN? SantlwtllM P swl A6tlreas _ Lw Wd1n.21P at Flr St.im,ft. Na 52e C.nlaa Se M.N.. Heinz WAtwis MaNWz el Mceas rwwroa k CvcuitlD nvTO E.uiv.et a.mmw Pmrrcsa Eopibmem wmx.n6axh.mcPE POm MNC E - b b - t S.Mc.lewtlwltlth AalC t b 4 E BMtlwIMh NXC i E - S S T R MfiC S IS S t pe2NgC t IS b Need More Locations r REMARKS @dAN SaMca ham Onnpa County f.3pMrp Cwrily Oala CeNm.lOMbhutivAtllh,aptl ei4E PMbtl bvlh s4esOPYwI NpM.Nvnllr MullldMia F3v Poreufi.mer ezpuest 6bven Wzenp ena4al SNe.CwNY.lara�pe Eba rapuirtltoEXIEND DtdAIiKRT$cknn DATACEMEP MVa PeONBE PACK SPACE br]Wt.lemm al zamea%e.TN wMMantl OMASKaI Drnn4.wunty a%411 C1ve TWTC cu.l.m.r v Iwial mhl.l Versipn 5.5 RevisW 62411 WMeer,-Coill ial 111,2 05 Page 38 of 80 Attachment B Extended Native LAN(ENLAN) �Jtelecom_ ENLAN Virtual Port Location Information POn Lodeendsuzmer O.CLMne I MCmd, OWadl MAC Atldr Selcu Ne.010 MAC AWr Select RW . M4CMEr BandNdlh 100 Mhm 100 Mhea 8d.d B.d.61h, SNetIBMtlWAtM COL.Wn 1 Mason:IMM,CA 1970 Bane—,Cduand CA Pl,ApAudnoee TM.;l,i.,CA 19708,oadwa;Oahland CA OkyCojnty 7M..;GnnosCsu.ly 1970 Bala SlAv.LP CNibmle 92610 Calibmia9<612 oemar@1mlFlr ended OPce Cemral OB. ClaziRaAoneleihed 802.1P Suoan Name I Cenud Ofe. Central Oft. Slra Corned Tedl on Ddy T,V on Oun, site Phone Me, W94,2L300 19251953-00W Hours d A.. NHR 29Hn MI ID E mml ENIAN Bendxlah MRC $ 746.00 $ ? .00 $ ENtAN BUHu1Mh N.9C 50.00 0.00 $ 8 M.L. O.&MACAddr S.W.1011? MACAdtlr SokeI NW 010 MAC MYr SeleclNVl Cny? MAC Atldr 6Yed Neq Cl µACAdtlr Bentivndtli eM Sekd Baneedon? Baled BaMxiolh? SeW.H lundd a Bend BeNutidN? CO--hors it Phydod More. Cry.Ccun ad.LP OmnardRMN 0eev0.lion Medloe SWAP Swan,Ndne skoConlad Site Phone Na H.edA.o.. Ckcuh to TNTC E4ul monl ENLANBentivdem MFlC S S S $ FMAN Banseeft NRC is $ S $ Pal LoeetlonBMAC Mdr a.,.tie.ale MAC Aedr 3ele914WO11 MACAddr U.NMCMy? MAOmd, Seectt Neil Cily? I WC Mar BndnAm sneeal SN610ardAme SNeq Bbldmdlh? seen BAvs Axh? Select Banowrmh? w iuxa P Ardms 00,Caun Sem.On D®nany";Flr Clssziflunf—Mttha 90211' Buren Nama 911eC od Sae Phone No. Havrsol Ac.w amuitlD TNTC Pqu mare ENtAN BendwiMMRC s s a s FNLAN BeMWAm NRC E B $ it Remarks ENLAN Service from Ore a County to SOlm County Dena Comer.100rt BanAyidh,exi GgE Pone al Celh ones-Optical Hannef wm Mulll-Moe.Feer per customer request Steven Huang email of 8I10.County of Oneonta will be acquiretl to EXTEND DMARK AT Conn.DATA CENTER AND PPOADE RACK SPAOE for h Wood.at same Me will eland DMARK at O.MQO county age,12 Wis. MTC Cumem , InoW Mltlei ' X vewso 5.5 Fel SW mtelecom-Confioenlid Pal.ads Page 39 of 80 Attachment B ,O)v telecotn {Switched N.LAN Service :Addendum GanN TBImD:CY310maecMm'BiMAed PnB dArPP6lp el pl Ns9pe[IY3BmI6 wJ mMM1Nns M1zeM rNatiry loTWTCS AnmM NBXvaLM'6aMsv. Cu61pnW a'sB�mps IBTVITCESIaMmtl TBrm6aM Cmtlili3n W 1ABMUIMSmia PottBmegeNBABtl AareloaMlmxpozlN by Ws relereas. Suvlm:11u8rvikAep NLW(6NIFN(emWxlsBxniaMM ENPma[xeruicv Yuxlm4rporalw Ev¢sxiklrry IxMdo-ryinb YvprWi¢.I WAUPFNPused ENvnat svNMa F Va TVf TC naMAM.Mz u a CPalarycn avava W I ell Bw6 mUtlple CLncmm b acres a slpr W,mars W urisM metro ENemel InhxWclme WaiyM1 ElFamMpaM1s 11e1M unlqus to Baml.Wix�dPal ryslBm&dM Itt IWtliOre.RSSNV.N9aMfe wHlxapl wOmryVdA i1)Td990! IMw d va Tcgerc abs,c tl(H V 10s)eN6ken LMu 9oYm[Wr.XL M loabaccRrd amass Tan9 TVM na nhN Trace MlyEy aIAee CtleuN6mfimeOxaz,IdM Cb rW ernashcamBNleBA BnN VNANAT..arfora. a CVne9unllBm lire pnmaryiWTCtlyloymenllmMvn Nlasirq mElMmelEw'2T In MTCSCanuN u(LmwM NlMme:sw#Avs Ircxlotlel aanaNc uwmerbolian.Tn COEWme1 axilcM1eMlha sntlnsEBplgo-lm Nn Cuabmarpramnwaze irvmeonnoaotl Wry Mni-GpaNl anWBr IO GIABbM1 OM1BmBI®rd¢.N ame NSLL'Iws,Qemma wNnerparlsmry0e oXwaOham VmxpcnryONET�bnW1 Nu'rymaN.TFna ortesppilArq BmntlpM azaeYrlEtl BwrWEG.NETinhxMWmbNaTWT000 ENe sxihM1xbere NsylNgeBnned WNB tvq[FM 9hemetruAroNM1A BNW loxtimE. MalnLnvnm MTC mwpnell Pf/TC 618AN epulpmaNremdsty han XmTWTC NeNmR Oparafion CenlW(NP:y XCuslBmveReneMv[EEm'cd ex.IM1e CuslwaamuddlNalACh GrePrvusN Ylldpa,Cdwatloard tlesvbP NPsavb iuua.hoElemlEenEf[atim,VouElesFaWnp,mN mwltYcn sashicpmca a,sa'said.0 NGC persanrW.Navledatl wes,wMnlnuermdu8en mrylredvnNa NOCcvilax5n9 Ne GyOpsraBmu hr mSPbmPantlloraispWrAWaIxANclart TWTC.s,aamulftfi1V: JZETCWIImplYa mai.,1ENamvl aarnl asmeM IMrsearyl d anElad Or nan (Ty EqulpmWtleggetl MEukYPia"I al Cu[.dbytte IsclVeaO an0mmdAa]WiWTLUAessdAalwisa slmMperaArnmmdwW NP G¢Icmer aMkr zzl tl epvlpmeN Is tlPPI ryP!vtl BwreB By IYs CmIBmB:. Cudan"RMODS11,1110": (xi Cunomvls rnpmibb IsrpaAypv nPumnnx4ortmW In r.IvcAlo IOWP NA apWpmsnL 12)Oses.is rB arand.forprWft primvry p..rerXre$NUN ea,ra.m. N e rtivl[e IssYe resYlla bom U's9amer MI maBfiry NB MpersiN Iltin a el rmp Ngve.G[slcmc w11 wminue to bB OIYetl ro:Xw uM ro mC N eBEilian MII PaYa^YaPPT NactagnaaxuleE w:NeeNwresdWm. ae marks emnXwganaAe . rq G �nrndgaeem EX1EX OIAWXAiatlwMaBOaIER IJInPP%'IaEPACKSFACEIrTM1'Ya mYvvnvYe.TA'Ircl memttMeKazOraryswntlula,lttnt TWTC Cmbmer T y� end I've x d� LT— VmunSa Pen'fep6341a mPVleumLc.YiNMW Be9tav16 Page 40 of 80 Attachment B �JKelecom VLAN Tag Serulce Order Form VLAN Tag Order Information cuNomel Name Colwatom a QUntaggnd SeNlae NMatrawo ACCGant NUmb& 26e314 Qlntllvidual Toggne S.ry (in Assettated SeAilco Orda Number QE Unllmitesi Tagged S.nion(UT51 CSNumber CIIcuf 1p Told Number of Tam I Told MRC of Taps Told NRC of Toga amll Tow Numbw olrls 745 -WMRC*fNmTns SO- ToWNRCONew Ta, O aNh2 TOWNumhxol Chomxl Taps OO TOW MAC d Due, aTaps O Tsw MCd0bweeo Tips O amts Tvwlewsbvd Rr Tns OO Tml MRCOIRwa4Teu TWNACAR.WTm Tag Number antl Activity Information (For Individual Toggod Service use only) Tag Number AdlvRy WC NRC I Tag Number ACRyRy MRC NRC a8 25 s sa e 9 5 m fi 91 T 92 8 31 11 9z 0 11 12 9 13 2e 1¢ Is p us 1] 2 10 9 19 4 as as 21 pp 21 8 2¢ In 25 In Remarks WY S—f"hu.Usumlw*b&am Canymamna.lWmbbmtlwldh surd 01AEPo N al en son-CpVw Hum(Nilh MWtl MMe p rpvmeaurr Wrusu —,e;wlWP�1e Ouu,W Cra�05wlll hOrtgWM la FXtENndAAPKAT SAao nATA CFNTERANC PgONDE RACK 9PACElaIN Ideam al0mailln l W wllleneM OMIAI:YOMnpeAwny01W,12 q'Ac Nsmnaappmra an0 aveRs Wi W.tITp 5vakfi Cmv,wNd WIN InmmmaR0Wea6mtla9tlTlVTCSantlaNTumsaw[atliwm or We M¢Nn Savlm Aplwmer(rererm wffiaveand We NaWe W1/FNntlet kllNi0.aJMal EWene5sWm0Nv.Tm V1AX TaA 5aM[<miY M Buppv[aNNYyv2NnMMp Prokte'S[e g.CeP,VR,SM1]&pen0ly w tlletrensmrtmMSMyy usM to tltluvtlM FNvetalr1 /NaNe lMl/61vWa1 tN.Nl2alhnal fNnref Swlm.0am1 LubAatlur Bate IarxN amvlz whfttt blW(C Inlemtl pmArIo111M InW Vilz wNN ate5pMA0b PYMR typGquantlty kmWn Inf isWo.Xy. lumer pNedl,s dedfla,wivitol or9prsV Us Oa enyo ftyu?s d�mealaedaelpert wtmmd peam MlpMvy¢ilmn tlu¢Oab bwdanerupSlrCvpt o(iA rtquW InlamaAM GlaomvetlmOwlM9es MM WGInEIuMrwd01Uh9 Us Okn m CUMnBfs doll'has NB mE mhpkhaWlMN b bin0 Neanv. M(N¢mm1MWrmlW. .....Me C..WoroMupa 90nbee: a 91Armhae: a&549 Named lwl: William FredNideen N-.A( meol: Paula K1.110 TM: VPIGM Tina: ITConl—n Mxna er U. OBte: x Saw,aOmn: Ronaltl Witt Vv®n55 RaNW&2411 rw WeOmm-Cad00Md Ppo505 Page 41 of 80 Attachment B CoumyufOrauge Price Agreement No.N1000006297 tw telecom holdings,his AMENDME NT wo.5 TO CONTRACT NIJI"ER NIOOW98297 AS MA417-10011150 FOR WIDE AREA NETWORK TRANSPORT SERVICES I'OR ORANGE COUNTY This Amendment Number Five(hereinafter"Amendment')is trade and entered into by the County ofOrmige,a political mnbdivisiar of the Stem ofCelifinnia,(heminafter mfnrrcd(a as,"County") and tw telecom holdings Inc.,with its principal place of business at 10475 Park Meadows Drive, Littleton,CO 00124,(hereinafter referred to as"Contractor"),which may be referred individually as "Party"or collectively as'Tarties". WHEREAS,County and Contractor.asserted CoatraotN100000112,47 for wide area mdwmdc tmnsporkservices for a three year term ca erearmingNovember 13,2006,hereinafter"Contmot";and WHEREAS,the Parties issued Amendment Number One to amend Attachment of the Contract, WHEREAS,the Parties issued Amendment Num4w,Two to renew the Coutrect m number MA- 017-10011150 for an additional year effective November 14,2009 through and Including November 13, 2010,and amend AtteohnuwtB to reflect amended pricing; WHEREAS,the Parties issued Amendment Tines to extend the Contract for an additional year effective November 14,2010 through and including November 13,2011,emend Attachment B to refloat emended pricing,and change vendor mine from Time Wamer Telecom Holdings,Inc,to TW Time Warner Holdings,Inc.; WHEREAS,the Parties issued Amendment Four to mond the Contract for an additional year• ef5arliveNovember 14,2011 through and including November 13,2012,reduce the contract amount by 10%fa the period effective July 1,2011 through and including November 13,2012;mid change vendor name to,tw telecom holdings inc.; WHBRRAS,the Pieties desire to Jews Amendment Five to increase intem et bandwidth in the amount of$32,305,00 effective September 1,2011 through November 13,2012. NOW,THEREFORE,in consideration of the mutual obligations set forth heminy the Parties agree as follows; 1. Effective September 1,2011 through November 13,2012,increase internet bandwith from 200mg to 300mg. 2. The total Contract Amount for the period September I,2011 through November 13,2012 is increased by$32,305.OD. 3. A true and ccrrea copy ofAttschmentB CosNCanpensadon for Contractor Services is attaobed, 1 Page 42 of 80 Attachment 6 County sfOutage Prim Agreement Na.N1000009297 tw telecom holding;Inc 4. Excopt as otherwise expressly set forth heroin,all terms mid emhditions contained in the Contrast as amended shall remain iafull force and affect as amended herein. 2 Page 43 of 80 Attachment B County ofOmuge Price AgreemeatNo.N1000008297 by telecrom holdings,ine IN WITNESS WHEREOF,the parties berate have executed this Amendment on the dates shown opposite their respective signatures below: to,(elecrnn holdinee Inc.*: DATE: SIGNATGRE: IAY—&pny PRWTNAME: TinDev(s en nr ce Pe8 e0t p (l TITLE: DepotyGeasral Counsel DATE: 1 5 SIGNATURE: ✓'� PRINT NAME: W, TITLE: V 'Ifthe conbecdng perryls a eerpom6on,Ilia doconteareast iiesigned by two aorpomm atawrs.Tnefirst sigmone at be ellbwthocheirmnofthe Saord.President,wm Vim President. The uaondslgnemromvu bethesecretery,mmsinont whan ery,tineanied by a cant roadoorsoysenexan Ueamrws le fheenornafli esinstaewo bind the orepeny. eproh7e when ecmmpmded by n eorporetcdauneatdenmatladng the legal tWhoray oPilreslgnetam m bind the wmpsny. COUNTY OF ORANGE Apolitical subdivision of the State of California SIGNATURRn:, t/A) d LAIC. TITLE; DATE: 3 Page 44 of 80 Attachment B Covavorcrenga Pricer AgxranentNa.NICOODDR297 tw telecom holdings,Inc ATTACHMENT B COST/COMPENSATION FOR CONTRACTOR SERVICES 1. COMPENSATION This is a fixed fee Contract between the Comity and Coutmetar for services provided in Attachment A,Scope of Waic in accordance with Ore pricing specified below. 2. INWALSMVICEPURCH42D Contractor shall arpphy the following servicefor Ore period November 14,2010 through and includingNovanbe•13,2012,less 10%for the period July 1,2011 through and including November 13,2012,except as noted below: Circuit Type From Address To Address Qty Totes Label Man Fiber, 1 GigE 1400 S.Grand Ave 301 The City Dr.South 1 $4,128.00 14 Fiber-6 1 Gi II 11400 S.Grand Ave 127513erkcic Ave. 1 $4,128.00 Fiber9 1 GleE 11400 S.Grand Ave 140 N.Eokhoff 1 $4128.00 Fiber-2 I GbJ3 11400 S.Orand Ave 1770 N.Broadway 1 $4128,00 F16er,3 1 OWE 1400 S.Orand Ave 1001 S.Grand Ave. 1 $4128.00 Fiber-4 1 GbE 1 1400 S.Grand Ave 46011amboreeRd. 1 $4128.00 Fibeh7 1400S.GrandAve 1535 E.Oren ewoad 1 $4,128.00 Maed 1400 S.Grand Ave <Gigabit Internet cimaiU $4,750.00 EIS w/GIB (iilcesse� a�.�,0,Ojyg ( �42,1lg Pat 300?p8 atTgctime-QQ2011 niP cost Ortough7'I i3l4012) a oi.).y0 l: s0k�ln`ded id;coat Total 1 $33,646.00 I$Y19�2014 Note: *Additional County location may be added and/or deleted to this schedule during the term of the Contract. The Contract may be attended,asset forth in paragraph C,to add circuit locations Fee reduction for Contractor's failure to notify Coady of planned and unplanned service Interruptions, reduction in available circuit capacity,delays In repairerany other dismptian o£sawuce,that result in an Individual Owed act meeting the 99.99%uptim,for any sequential thidy(30)day period: 4 Page 45 of 80 Attachment B county of Omnge price Agreement No.N70000082V tw tekwmholdinp,Inc Per Setvira Out me Pet•cenfn a Credit Laos than 1 atiuute 9,00%wailabili Na credit I Minuft UP to 4 hares 5%of the MRC 4 hours up to 8 hours 10°k oftM MRC 8 bollis up to 12 horu•s 15%of the MRC 12 hotas up k hours 20%ofiho MRC lb houmvp a,24 hour 35%of the MRC 24 hours or greater 50%offhe MRC 5 Page 46 of 80 Attachment B County of Orange Price AgreementNo.NIDOOOD9297 wiWemm holdings,ins 3. PAYMENT TERMS Initial Set-up: Invoices for initial set-up are to be submitted in exercise,unless otherwise directed in this Contract, upon the satisfactory completion and acceptance of testing of the eirthe system. If service does n etmeet accepimrce specifications homi%Contractor assumes all costs and may not seek reimbursementfronr County. Monthly Setvice• Invoices for monthly sravica are payable monthly, in arrears, unless otherwise directed In this Contract Payment fro•mouOdy services, as specified In Attachment B,shall begin upon the date ofucceptsnce o£fhe system. Contractor simli mfereneo Ceutract ntanbec on]nvoim. Payment will be not 30 days after receipt of an invoices in a format acceptable to the County of Orange and veri lle d and approved by the agency/department and subject to routine processing requirements. Tlm responsibility for pri iding on acceptable invoice tests with Ore Contractor. Incomplete or incon•ect invoices ere not acceptable and will be returned to the Contractor for correction. Billing shall cover service andlor goods not previously invoiced. The Contractor shall reimburse the County of Orange for any movies paid to the Contractor for goods or service not provided or when goads or services do not meet the Contract requirements. Paymeds made by the County shall not prectude,the right ofilie,County fine thereafter disputing any items or services involved or billed under this Contact and shell not be construed as acceptance of any part of the goods or sordoes. 4. PAYMENTIINVOICING INSTRUCTIONS: The Contractor will provide on invoice on Contractor's letterhead for services tendered. Each invoice will have a number and will include the following information: 1. Contractor's name and address 2. Contractor's remittance address(ifdiffereatfrom l above) 3. Name of County agency department(if county agency is actual customermmnc) 4. County Contract number(to he added as pert of tlrc billing address) 5. Service dam(s) 6. Circuit Label 7. Service description 8. Total Invoices and support documentation are to be forwarded to: County of Orange 1501 E.Saint Andrew Piece,Suite 200 Santa Ana,CA 92705 Attu: Account Payable 6 Page 47 of 80 Attachment 6 Servlce ModNlcatloq_OrdBt Form `Jteleconn. TN+BeMwaGrbeAemd NbgMbleRmhONlnpalro.gaM Ib mmMeuarWmletpWvemM'eamprmNOWwnku MIrObMubxueuMe(�boN'eb'PrYTC�uW GmrcR1aMY faubmerA cx Naremre wwsww0fnerx WQNbmerenalVYfC.TPrtCwa lmPNnmganeNlsbrNetwNam:emeMMeuhe�ewmtlrmle SeNwOmN.nNcxomeMep;e4tlmmlearrvnunWtloPsweWn.XRu:e bAwnad Ortreanah BMa WaueMNepiereammenl(sl MllasNkaB pNpmpeBptlerronexNd,tlp.9eMeswaaretaupnwYamalepMep:.eme:vudagepphagomdtl. �^ 1 WnNYPxuMnp OM1UR.(nRCp ftptR NanflewMnpaM;pe PaW)% �_+�_� ta:emmerem pmadYNUY PNMabalmx tep'ssenlULLPmb ba WAU ee wawaam bhbCuwemwm NNBeeelw O:Oer, alpnemP: 81y:Yu:e:z Gar."-eta PNNNems: FMtlo m PAIINam: PaN YYe: PMY Tbb: OenmeebN oNe: Nnux .mil !t sole.Pneme Rmtle GUW —� / Chan aFaAP OwNnvypee.We matlYeelaueMYeXsb W tgAimuwFse AeoaMLvr.6x»plasmo9AoalURtlg6aNUAWAuOon.al WntleIXdNCRdMIYNIm:e1NNM Im[a e:NNb1^M6mnN ee:rbe.h;usxflnmM1#Nwnvmxw0awmrminausmwlal,mmaemme•• AacomRNdmoO BY91a too X: WONNHW. �eab: Ne Co Tm: IvbW aMmntaBM1WOtMrPo;ln F) MUOkirelUorded 8y(nY:ea: nnUblee ae:mm e.ameaerutw Ateallwwpn avm:vlo.a:em s.Mwmnw;omcaa:ewaPn.xeue.vwwawt.�.tbe.nu.aarwn4o'+e.oewitantwrmmmsowarbeo-vwup+wh'mlwrw:vt a.,wcwamm.oa.wweemlmwwetmqumww.ta.Bn.ri.wm;xn.,wumN ouaneNrµvxaLreauro ra:YUeR:y,Agpy enwvwmatmxbnw+eaeemaNmuproma+euoxmarmm�muwexwxm�v YwaasetYmwawmm.Nanacu;aReurecaY� aenlwaeereeaW - teW awlxweeArmee•awaana CSUemh 01YM - orarAam u . oNmNRwR Cueemwibeetln4a3eMGO0NN WamJeINp GNEppn.Np faS,arA4MWiwMxlPhTthOYOrkb UPpmee amuMpaRpmvOa mbb 3LQnp Noatlxralwpuap{rpro0h:squmlpnert6 IlbeamlpleaxiTeenia.AAiRWIMIbo1M1rC6 �9avlu Nemm - - UMNRCI TNNYRR UNINPG" TWINPC Wemel OenexlM Me/Aaa 10pM 1 tl1X2o G12fe aaep.f0 fuaW eiA�A Y lteSD By 4bneble Pale(qr Ylmvp ® aubwrnNeNW(pe:NlMek NA vn;ae.am.oalb rbaew..w,Yemw rye.Nr Page 48 of 80 Attachment 6 County of Orange Price Agreement No.N1000008297 tw telecom holdings,Inc AMENDMENT NO.4 TO CONTRACT NUMBER N1000008297 AS MA-017-10011150 -FOR WIDE AREA NETWORK TRANSPORT SERVICES FOR ORANGE COUNTY This Amendment Number Four(hereinafter"Amendment")is made and entered into by the County of Orange,a political subdivision of the State of California,(hereinafter referred to as"County') and tw telecom holdings Inc.,with its principal place of business at 10475 Park Meadows Dave, Lildemn,CO 80124,(bereinefterreferred toas"Contraetor'%which maybereferredindividually as 'Pent}°'or w1kxdve(y ss"Pardee'. WHEREAS,County and Contractor assumed ConractN 1000008297 for wide trust network transport services for a three-year term commencing November 13,2006,hereinafter"Cont=V';and WHEREAS,the Pardee issued Amendment Number One to amend Attachment A of the Contract WHEREAS,the Patties issued Amendment Number Two to renew the Contract as numberMA- 017.10011150 for an additional year effective November 14,2009 through and including November 13, 2010,and amend Attachment B to reflect amended pricing; WHEREAS,the Parties issued Amendment Three to extend the Contract for an additional year affective November 14,2010 through and including November 13,2011,amend Attachment to reflect amended pricing and change vendor name fmm'rime Warner Telecom Holdings,Inc,toTW Time Warner Holdings,Inc.; WHEREAS,the Parties desire to Issue Amendment Four to extend the Contract for an additional year effective November 14,2011 through and including November 13,2012,reduce the contract amount by 10%for the period effective July 1,2011 through and including November 13,2012;god change vendor name to tw telecom holdings inc.; NOW,THEREFORE,in consideration ofthe mutual obligations stet forth herein,the Parties agree as follows; 1. The term of the Contract N1009008297,now MA-017-10011150,is extended for a period of one year,thereby amending the Contract period effective November 14,2011 through and Including Novernber 13,2012,unisss otherwise terminated by County. 2, The total Contract Amount for the period July 1,2011 through and including November 13, 2011 will be reduced by I(Ate for an annual not to exceed amount of g388,6l l.30. 3. The total Contract Amount for the period November 14,2011 through November 13,2012 shall will be reduced by 10%fur a not exceed amount of$363,376,80. 4. A true and correct copy of Attachment B Cost/Compensation for Contractor Services is attached. 1 Page 49 of 80 Attachment E County ofOmnge Price Agreement Na NIOODDD8297 M teleram holdings,too Except as otherwise expressly set forth herein,all terms and conditions contained in the Contract and its amendments are incorporated by this reference as if fully sat forth heroin and shall remain in full force and effect as emended herein. z Page 50 of 80 Attachment B County of Orange Price Agreement Na.N1000009297 tw telecom holdings,Inc IN WITNESS WHEREOF,the parties hereto have executed this Amendment an the dotes shown opposite their respective signatures below: tw telecoons holdings ine.r: —� DATE: �I I U I l o I SIGNATURE: iJ97M 7r r ('VI.C� PRINT NAME:: nu�NA A 0 H re v- TITLE: v P - &I I.; E.L.— DATE: SIGNATURE: 1M4 1d* PRINTNAME: 646t Ds'yts TITLE: As5;s'fttq' Secretary i �tfthcemnmoing pmry Is a eorpomuan,lhedocumatmuabesigied by two wryomtl oRrors. The fimtsignnmro muss be olNm Ne Chairmen oCthc Board,Pmaidrt,or any Vlec PruMdml. 7bnsec Wslgtmtum=Abct eu retery,mmslant when acc m anted b a Corp ruic do,to eny dvoocnt w ng thes. In the elterslive,asingle roto bind thc-m Iesewpmbie when accompanied byn wrpemie document demonnmsingtbe kgel eu0odry ofW:signslurt to bind Nernmpmy. COUNTY OF ORANGE A political guhdl on of the Stat�e�of Ce�llf�or4a SIGNATURE: 'LF+GI� TITLE: A __ DATE: Approved by Hoard of Supervisors on: Ap ved as O of th n -e 1 Deputy 3 Page 51 of 80 Attachment 6 County of Orange Pd.Agnsment Nc.NI o00008297 tw telecom holdings,inc ATTACHMENT B COST/COAVENSATION FOR CONTRACTOR SERVICES 1. COMPENSATION This is a fixed fee Contract between the County and Contractor for services provided in Attachment A,Scope of Work in accordance with the pricing specified below. 2. I MMI,SERVICE PURCHASE Contractor shall supply the following service for the period November 14,2010 through and including November 13,2012,leas 10%for the period July 1,2011 through and including November 13,2012t Circuit Type Fevm Address To Address Illy Total Label Monthly Fiber-14 1 Gi 1400 S.Grand Ave 301 The City Dr.South 1 $4128.00 Fiber-6 1 of 1400 S.Grand Ave 1275 Berkel Ave. 1 $4129.00 Fiber-9 1 Gi E 1400 S.Grand Ave 840 N.Eckhoff 1 $4129.00 Fiber-2 1 Gi 1400 S.Grand Ave 1770N.Broadway l $4 129.00 Fiber-3 1 Gi 1400 S.Grand Ave 1001 S.Grand Ave. I $4129.00 Fiber4 1 Gi 1400 S.Grand Ave 4601 3amborue Rd. 1 $4.128.00 Fiben7 I Gi E 1400 S.Gmnd Ave 1535 E.Orangewood I $4 129.00 FizedrTiercd 1400 S.Omnd Ave Kiigabit httemet oirouit> $4,750.00 HIS w/Oig Port Total I 533 646.00 Note: $Additional County location may be added andlor deleted to this schedule during the tern of the Contract. The Contract may be amended,as set forth in paragraph C,to add circuit locations Fee reduction for Contractor's failure to notify County of planned and unplanned service interruptions, reduction in available cimuit capacity,delays in repairor any other disruption of service,that result in an individual oimuit not meeting the 99.99%optima for any sequential thirty(30)day period: PerService0wattle Percents eCredit Less than l minute 99.00%availability) No credit 1 minute up to 4 hours 5W.of the MRC 4 boom up to 8 hours 10%ofthe MRC 8 boom u to 12 hours 151/.ofthe MRC 12 hours up to 16 hours 20%of the MRC 16 hours up to24hours 35%o£the MRC 24 hours or granter 50%of the MRC 4 Page 52 of 80 Attachment B County oforange Price Agreement No.N100000S297 tw telecom holdings,im 3. PAYMENT TERMS Initial Setup: Invoiess for initial set-up are to be submitted In arrears,unless otherwise directed in this Contract upon the satisfactory completion and acceptance of testing of the entire system. If service does not meat acceptance specifications herein,Contractor assumes all costs and may not seek reimbursement from County, Monthly Service: Invoices for monthly service are payable monthly, in arrears,unless otherwise directed in this Contract. Payment fir monthly servces,as specified in Attachment B,shell begin upon the date of acceptance of the system. Contractor shall reference Contract number on invoice. Payment will be net 30 days after receipt of an invoice in a format acceptable to the County of Orange and verged and approved by the agencyldepmtment and subject to motion processing requirements. The responsibility for providing an acceptable invoice rests with the Contractor. Incomplete or incorrect invoices are not acceptable and will be returned to the Contractor for correction. Billing shall cover service andlor goods not previously invoiced. The Contractor shalt reimburse the County of Orange for any monies paid to the Contractor for goods or service not provided or when goods or services do not meet the Contract requirements. Payments made by the County shall not preclude the right of the County from thereafter disputing any items or services involved or billed under this Contract and shall not be consnued as aecepmnce of any part of the goods or services. 4. PAYMENT/INVOICING INSTRUCTIONS: The Contractor will provide an invoice on Contractor's letterhead for services rendered. Each invoice will have a number andwill include,the following information: 1. Contractor's name and address 2. Conh=Wr's remittance address(if WIlmantfrom l above) 3. Noun of County agency department(if county agency is actual customer name) 4. County Contract number(to be added es part of the billing address) 5. Servicedate(a) 6. Circuit Label 7. Swim description S. Total Invoices and support documentation art,to be forwarded to: County of Orange 1501 E.Saint Andrew Place,Suite 200 Santa Ana,CA 92705 Attn: Account Payable 5 Page 53 of 80 Attachment B �R4 R o Voluntary Contract Cost Reduction PCOgralu PARTICIPATING AGREEMENT THIS Agreement(hemimftw"Participating Amendme4P)is made end entered into uponexeeution ofall necessary signatures,between the County ofOranee.a poluicst subdivision of the Scale of California(hereinafter"County")and tw telecom holdings lee,with a Place of business 07 Maven,Uvinct CA 92618.2707(homimttor"Canh t e),with County and Contmceirsometimes individually retuned toes"Party",orcollectivelyrefared to as"Pentes". WHEREAS,the County of Orange has impleenentad the Pohmmo,Contract Corr RohundeaProganr to redues contract casts by tan percent duringfscat yemr2011.2012 to exchange for one additional contract year,and WHEREAS,County and Conbactorentered into Comma gN100008297,now know as MA-017-10D11150,for Wide Area Network Transport Services,commemingonNovember 14,2006 and expiring enNovember 13,2011 (herouafter referred to as"Camrarn");and WHEREAS,the Contractor has voluntarily agreed to participate in the County's PoGrmary Cons od Cost - Reduction Program;and WHEREAS, the Orange County Board of Supervisors lots approved the Pofunrmy Contract Can Reduction Program and authorized the County Purchasing Agent to execute departmenml Participating Agreements and contract eximmiums within the wtabliched limits, NOW THEREFORE,in consideration of the mutual obligations set forth herein,both County and Contractor agree as follows: 1. Voluntary Contract Coss Reduction Program — Term: The term of this Participating Agreement stall commemw upon exaction of all necessary signatures and be in till foss and effect commencing on July 1,2011 through and Including November 13,2012. 2. Voluntary Contract Cost Reduction Program—Invoicing Procedures: During the term of this Participating Agreement(July 1,2011 through November 13,2012),the vendor has reduced their cart by 10%as agreed upon in Amendment Four to Conirad N1000001297,now known as MA-017-10011150. 3. Voluntary Contract Cost Reduction Program—No Compete Contract Rxsemton:participating vendme will be granted a 12 month extension beyond she original term of their contract under the following conditions:U)0m County agency/department has an ongoing need to purchase the produces, & services and market catalysts is favorable to support the extension; and (ii) iM 12 month mmwal/extemim period is approved by the agmeyidepartment;and(M)the agency/department has the approved fiscal appropriations during the tear of the extemion and if such appropriations am net approved by the County Board of Supervisors,the connect will be terminated without penalty to the County;and IN)the vendor's port performance and quality of produchis ovices has remained at the levels required by the origlml coutrech 4. ALL TERMS AND CONDITIONS OF THE ORIGINAL CONTRACT ahtoo0ooa1F7,rww lonnm as M0,017- 1aa111SD AND SUBSEQUENT AMENDMENTS BETWEEN COUNTY AND CONTRACTOR, TO THE EXTENT THEY ARE NOT MODIFIED HEREIN, ARE INCORPORATED BY THIS REFERENCE AS IF FULLY SET FORTH HEREIN AND SHALL REMAIN IN FULL FORCE. CEO/IT Page 1 oft- Page 54 of 80 Attachment 6 SIGNATURES The parties hereto have executed this Participating Agreement on the dates shown opposite their respective signatures Below. tw tollee�com holdings Inc. lTir,6, fill 90hv1tV— R2FtWle-( VILe &Stra(nf- Pqu,6t Print amc� ul.r [/(�� TRIO Signature Date v• /TWI - S-��F-� Tna boils &s�slntO- Sect e rzti a/ Ptft ame Title ekw 5. 13 - 11 Signature Date *If the Contractor As a corporetbn,signatures of two specific corporate officers are required as forth"set forth. The first corporate officer signature most be one of the following:l)the Chairman of the Board;2)the Presidenh 3) any Vice President.The second corporate officer signature must he one of the following:1)Secretary;2)Asshteot Secretary;3)Chief Financial Officer,4)Ambient Treasurer. In the alternative,a single corporate signature is acceptable when accompanied by a corporate resolution demanstmting the lcgal authority ofthe signature to bind the company. XRR4tlttkftRf}RFR1ttfRfiR4dRhblt#fb M1RMHRMM14RRtt0M14RM1YIMYM1bYM1fFFRRNYRRRtR44M1IRRRF County of Orange,a po8fical subdivision of the State of California ��a pW� �of2.QJ_ /__O _//_ ..�s. County PurohesMg ABentfDepuy 'gnalm¢ --_�-.-Data kkkMftkklkkkiklklRMk#tkktkkMt RkkR#RRXRIkMRRk#4RMRk44kkM#kM1MkXMMRRkY}4b4kiRk#R444dtkM# CEOAT Pase2off/ Page 55 of 80 Attachment B Coualyof Orange Price AgceemeasNo.1470i1dd09297 TNUccomHoldings,trc. AMENDMENT NO.3 TO CONTRACT NOMRER NI MM8297 AS MA-017-18031150 FOR WIDE AREA NBTWORKTRANSPORT SERVICES FOR ORANGE COUNTY This Amendment Number Three(hereinafter"Amendment"}is made and entered into by the County of Ormge,apolitical subdivision of the Score ofCelifomia,(herebaterreferred m as"Count;") . andTW Telecom Roldingglnc.,witbim principal piece of business at 10415 park Meadows Drive, Lif lrton,CO 80124,(h=inafw ref=W to as'rmmdm"),which may benteaW iAdividuauy es "Party"or collectively as'Tenies". WHEREAS County and Contactor ueoured Contract NI000003297 for wide once network tnmportservices for a due year term commencing November IS,2006,hereinafter"Contraee';and WHEZW,ft Parties burned Amendment Number One to amend Attachment A of the Contact; WIMPAS,the parties ismed Amendment Number Two In renew the Contract as number MA- 017.10011150 for M additional year effective November 14,2009,through and IncludingNovembn 13, 2010,and amend Attachment to reflect amended pricing; WinMkS,the County deshes to issue Amendment Those m exceed the Contact for an additional year of tiveNovember 14,2010 through and including November 13.2011. amend AttaohmentB to reflect amendedpcicing,and change vendor name from Time WamerTelecomEoldmgs, Inc,to TW Time Warner Holdings,Em; NOW,TIMEFOPE,in consideration of the mutual obligations act fonh berms,the parties agree as follows; 1. The term of the Centeno N1000008297,now MA-017-10011150,ise nsaeedforapatina of one ym,thereby contending the Contract period effective November 14,2010 tbrougb and Including November 13,2011,orders otherwise terminated by County. _ 2, The total Contract Amount for ths period November 14,2010 throughNovenrnber.13,2011 shall not exceed$403,752.OD. 3. Ame and connect copy ofAtmebareatB Cosr/Compensabon fee ConhecmrServices is anached, 4. Except as otherwise axpresdy act forth hernia,all terms and conditions contained in the Original Contract and its amendmentalmodification at incorporated by this reference as if fu[ly W forth herein and shell remain in full fora and effects amendedhemin,All obligations of the patties that would have been terminated on Novamben13,2010 are hereby extended to November 13,2011. i Page 56 of 80 Attachment B Coomyof TW Hot PriaAgteemwt No.Ntd00069291 1t7eramAokIDgs,In. INWITNESS WHEMP,lheput!"hereto dove executed this Amendment on the dates shown opposite theitmspective signaturcebelow: TWTar.Gn— Opp H0r�1N�5. 111C*,SIGNAT DATE: 7 �I URE: /P/y� g�1"/GClti-: PRINT NAME: f,1 IA JITILB �'!a?'t7"— )6I : )Wf- Pal�(A4-It/r DATE: gb��ADda SIONATURE: PRINT NAMe: �T1inlyndut n y'ly TfTfF.: QAlf/JLtN,917 •IfrM1e smwrtiagpam/u amryoreum,etstlmrVrat,ms[bcugmdbYProcmpomk offxus. thefira dgaaNmmuzbc <idxdu:Qtelcm®efs5e 8omd Pnsi".eator mry Vitt Ppddsor. 13cacmnd,tlenmmzmuubctbetevemry,masstaam wb�Ne(Slef6 mmciel OtRca�mNyt tla oi�thsuurt+z to�eimmenvs.e®etc eoTem¢elpimueLxro�uble mPe^'� Y mRamu H eeatw onryo[ffiesi�mrobmd Ne mmpenY COUNTTOPORANG$ A po➢tical subdl ' aofthe State of CaQ for da SIGNATURfi. '� •4 TPILE: DATE: f / Approved as to foam Office of the County Counsel Orange Cormty,California DATE: BY; ii !%! r✓ Deputy County Coanset ' Approved by Boadof Supervisors on: 2 Page 57 of 80 Attachment E County,oforenga Pdre Agreemret No,NI 000009297 TW Teleoom Eold'mgs,Snc. ATTACHMENT B COST/COMPENSATION BOR CONTRACTOR SERVICES I. COMPENSATION This is a fixed fee Contract between the County and Conrnetar for services provided in Attachment A,Scope of Work in axordance with thepricingspeciflM below. 2. INITTAL SERVICE PURCHASE Coonuoutrshatl st"lythefollowiog service for thepedod November 14,2010 through and includingNovomb r I3,2011: Clrmlt Type Fvm Address To Address Qty Total Label I ?&Rthw FIM-14 1 Gi 14D0 3.CaendA: 301 The Ci br.South 1 $4128.00 F1er-6 lGi I400 S.OrmrdAve 1275 Bedrele Ma 1 $4,128.OD Fff 1Gi 1400 S.Gland Ave 840N.Pckhoff 1 $4,123.00 F'ha-2 1 99B 14DO S.Grand Ave 1770 N.Bmadwa I $4,128.00 fTi6er•3 1 Gigs 1001 S.Gmod Ave. 1 128.00 Fha-4 I GigP 46011ambo Rd. 1 $4.128.00 Fber-7 1 Gi 14(10 S.GrmtdAve 153 S.Orangewood 1 912 000 FiraVPiend 1400S.GraedAve GGigdllftlnL•CpU CQLIa171 $4050.00 PIS wlGig Port Total 1 $33,646.00 Nola: -Additional County location my be added s adfor deleted to this srhedule during the tam of the Contract. The Contraamay be amended,as set forth in paragraph C,m add circuit locations Fee reduction for Connaaor's failure to notify County of planned and unplanned service interruptions, reduction in ava8able cueait rapacity,delays in repah Many other dismpdon of service,th"MU11 in an individual c'aouitnot meeting the 99.99%uptimefor any sequential thirty(30)day period: parSsvmvaoutage Pervantage Credit lsss than 1 mimde(99.00%availab0i No credit l ronuteu m4 ra 596of the MRC 4 bom up to Shunts 10%ofthewc 8 hunts up ml2 hours 15%cftheMRC 12 hours UP to 16horus 20%of theblRC 16 how up to 24 bows 35%of thoAM 24 hours or greater 50%offtMRC 3 Page 58 of 80 Attachment B Cowy ofor nge Price Agseme+u No NIDD0009297 TW Talmo,Holdings.Inc. 3. PAYMENT TERMS I initial Set-vo: Lrvoices for initial set-up as to be MbmiWA in arrmca,unless otherwise directed in this Contrac4 upon the satisfactory completion and acceptance of Matto of the entice system. If tervicedoes not mat acceptance specifications herein.Contractor assumes all costs and may out seek reimbursement from County. Monthly Service: Invoices for monthly service ate payable numbly. in seems, unless odenvia directed in this Contract. Payment for monthly services,as specified in Attachment B, shall begin upon the date of acceptance of the system. Cmtmetor shall reference Conned number on invoice. Psymentwill be tot 30 days after receipt of an invoice in a former acceptable to the Comity of 0rm9e and verified and approved by the ageoWdepattroent end subject to routine processing tequiremenrs. The responsibility for providing an acceptable invoice rests with the Connector. Incomplete or income[iMiea ate not acceptable and will be¢paned to the Coatmotorfor correetien. Billing shall cover service amMor goods not previously invoiced The Contractor shall mimburus the County of Orange for any monies paid to the Contractor for goods or service not provided or when goods or services do nd meet the Contracttequtremenm. Payments made by the County shag not preclude the right of the County from thereafter disputing MY items or services involved or billed under this Conned and shall not be construed as acceptance of any partof thegoods a services. 4. PAYMENTANVOICEdG INSTRUCTIONS: The Contractor will provide an invoice em Contractor's Iemartmad for services tendered. Each invoice will bane a number and will include the fogowmgiaformeton: 1. Coudador'e name and address 2. Contractor's remittance address(if different from 1 above) 3. Name of County agency depmunent(ifcounty agency is actual customermwne) 4. County Contract number(to be added as pert ofthebilling address) S. Service dae(s) 6. CSmuit7-abel 7. Service description a. Total Invoices and support documeunation are to be forwarded to: County of Orange 1501 E.SaintAndrew Place,Shin 200 Santa Ana.CA 92705 Am: AccountNyable 4 Page 59 of 80 Attachment R Renewal Service Order Form(RSOF) &`a1ecom_ nee Rerewal SeMm Ortbr is Wesel ino by M hNenm holdings Inc.by Withstand)llzwMll,owned nJlfimna pONJBtM aeMces.1,ortlwetl w:.".,lu9vatrvery TVTC-)sent (Nanty al 0nce, CcesonnuI,and Is eflWe.span second,MM By Co...,eM TYTC.TWTC MO Won higgerchbe or 1M Iwrlon—W of i6 subsl®ades Wor this Agreement. wlicb own eM apereto ties scemmmunl¢Oons lazlllllm 6 ^ n c�dy cnoRetn,alrg n n.....e �a...n a... n EyyOpeaemaerNetrlmWSPdnwrd59NtrnIW '11Cp1101'd(n@RR91XYM long Class ry oraosdab barvnewd 6emzaznmauir'n lJl kr[oaM'eHeet:�a�, ..._. _ . p Wsurld mOrnenlorlM zemiss listed Ulm but an MllMmwNez lhlW.are chi iaMWatlIs,one nme RtirNWel Tom eM on Net"'M ossaye Maa. Gran Total for SarvkeS RoroMd: 328.No.00 Sorel...Kamen: Uselse, 81: 14008.GaaMAveroa.Santa Pr;CaMomlg92]O6-Almka(t Cbeek®1 MonNyneeurtlnp LryYgm IMRG) RmwWYhrm L af6mNw chnish0 a Ilwbb flemwY rUnN Remwel aYl 12Monoc 1 Natlw IAN-EMe <fiIKFFW101416TVIC6 H.128.00 S0.1P0.W 12 MdnIM 1 NNsa UN-flbo `%MFFW101<2IcVCB 56.128.00 56,128Ap 12 Me". 1 Nd,.UN-EMe <SMFFW10141DIRVCf 54.125.00 54,13P20 12 Months 1 Nesve IAN-EIilc 46MFFW101<P4TV1 f1.1M- 84.fPB.W 12 Months i Na11ve UN-E0a 46MFFW101428nVICS 50.1o_ 51.1}8.W 12MonW NaWe UN-EIBe 4IOURVI014SSIFWCS S0.13BA0 $d,120.00 Verges 1 NaWeLPN-EMB 96MFFWIM<2bNlC9 K.f211.00 84.138AD vwavamnma.aaanmaa suo-rgm asB.eef.ag Swim MCwk3: Mundsolsbmm t➢n0ono-Sbciffoo LYvaN®'e Meninhostuning CMNIes IMRQ g1214�sIAN-Eftc m d18aMm CIwIIO a Imble Renewal UnN 1 NaWeIAN-Elik 4NKFFWI014I7TGS Co1 14 WsUN-EP10 4P11ffiW10142YfVIC6 f0001 NaWeUN-Elpe 4FMFFW1082MWC8 Moo 1 NaYvs IAN-Floe 45MFFWf01H'21fWC3 moo 1 4VKF I0i421TVCS 010 I I NaMse UN-EIAB 4HKFFW10142gGWC5 SOAO F1.00 Nceseffifwry "nooMW S cb`[W! SA00 Sonfi NNnn F3: I Manny Round, GhWh RARE) RemWYTord 0 e16eMoa ClrcW 10 a SmWe RpnewY rued Ratuwel 041 12 MmIM 1 NalivelAN-E s 4,,`V=1014tdch S no nos 1ti MmUc 1 NeMe UN.So 4po"48Yn"l no no t2 Mm0e 1 Native LAN-E41e 4YSM1)CV/f0142NfHrC6 S0.W 50.00 12 MdnNs 1 WMa IAN-E%e 48MY.XIIMAIITVC6 Moo no 12= 1 Note.IMN EMe 48N"*148]IIWCB moo mp0 12MOMM 1 Native IAN-Ella 4flNl]YJ1014S1TVC5 Who no 12MOMr¢ 1 Native IAN-into WYIY_"JIo14] cs I $.so I ness PbueatltlaWzaa:neeeea gob-Total 50.110 Additional Nortee: Versbnt]Rsn,4.I1a Mneewm-mrnmed "go'Yf Page 60 of 80 Attachment 6 Ce.,M CbrgebrerrexAg @Ilo NUJJ CimW6(I Ds I!Yml abmc nor UrM n1A Term.108 RFAI -B�.Prkuq=u9milp Cpb Per OlmurwkeNnYlNee A .z Lrmelm5b101mLA.C...,Kmam Nmrder f2.1:.Rrr we.b—dal.ofsgr tmmlNl Baran ,.NOTa.]rU C.rgoc aM NO..,krmrgos. Billirq PemItl6151mple gene'rvel CBanpe ONLY, Vorelon 1S Rw,4lE me W.-Cuereedw hl2rt. Page 61 of 80 Attachment 6 Olaepnnen Nplica IICusNma�baiecvmeRy$NVIRahr&M mason.e r� Ml Over wUWbT4TC.I&11. auimib to 109 aW-asa9orty omLlm 'CYslome�Cal!$M101BMm.Cnlf.Nollu Eg M.W.p�B:nail lF WamatlgiwnwNnEallverM. A^M.01c RRanawal IIIAfaWpS�at�190F,•pp�eml o eaMCOEWJI"ampmM�lylenvHprsucesaheA2-maON relms(m.uvlM1amive5plstlln lFaSleMnE l4rmses6das�Itl�I��iRMBjvNersmlMiNaR>•mYfeslNalMfln WnYlq Nltly�9p OxYs'pnarWYM16lRiRQO^dUW lM1ancwBn118im W111 WIshBe 1p plmu'rep 4lslemerantl IFe MtlWtlualslpnly below rcpruentspel eucF Ntllvltluvl FvslM1aaWllollryla Oln!Cuslomor Io1Na G®oonienl. IwmleCom FaWMga 1M. CYslomar:Cou<n/Njlgol G�mpo Slpnolum: CIg^eWre:xU}'H��R,J•,414'eW Prinl Nema: MM—FrvEel . PnM Neme:k ((T�LL 'IW�aWV�/l �GI f�.GI Mle: VP/GU "w:v �Ly_ GaW �GB, 1 J Selea PeMan: Pon FUUs Venbn IA Pw.4e1-03 M Wxm�CapboNsl Pay]Wa Page 62 of 80 Attachment 6 Renewal Service Order Form(RSOF) �Jtelecom_ orsaemml Sondra Order Is anbmtl Inm b,M lei ewmXeldlnesI-,by am Iborgh lowMOv^wnnlmGsldmrbn Vml amrallied IopmtlGe eas seMeee bairy oadelad lereader Woods*T Cl ardl counryonma" ("Omaboar),eM Is aXe]Ne upon exoadon boar by C.IonenN MTG.T OMI ar .rdrmlN.lot too pe do.of ire wb5ltlkdec Wor A,ramoM, .W.ft am am Mo.Me leboar imWkN0.4MUUee bad, reo-�md.NkP.anaaaLSer.•nm• en= lavM.lbapdm e2..,I and arty e'Noreve od" 6mpbsemerdaoimOisHerewL Se:vk¢ONerFormrtll esiaUq hm¢2M wiMitlm>,NatlpM Ure:mmvetlSenSastevlal6i¢4!L(wca.atl.eNacl.—� MFIR159w3Uem.'e'pf orripne Servi:aado,laa.Navarre fakd Mlaw,bN ere M Ilnmeer lipled,aro also mrnwed for Ue more armorer Tom,and for orantl Total Nor Sorvicea Rammed: 14.750A0 8ammill Fonowo,l: Servko AddroaaYl: I00a6 GraMAveiwc,Sanla My C4 @FU6Npb MOMMy Realrol'CNrpnpm Nmee9l Team of SeMce C.A 10 Wimallarribill R—al deal Reareaselffivera 12 ManNu 1 ademalAmess �rWI01atslr ".75040 U..a Nwe eadswbee so nenad IWbTeW Sa.TsooO Malifloned Notes: uMyNO.anpe Is remwi ,INermi.ICS Rk11SS1002 Pod,aoo.ranadamerm 1peep.all..led Wrtenl drW110.CJSlgaarP2apnl NumMrY2E6de4. Tmm Mll belor1yur112 Mantlss 1from dale of 90reWra.Ms FenewL mgdres NO TetlmIW ClapesaM NO raNmIX MargaN.&MM Femds l Simp:a oaed Coarrare ONLY. VertMld Rev.a�YM1p9 bare mm-Cw4lamlal Papal ore Page 63 of 80 Attachment 6 Uisbmnneci Nalim G Cmtamer Is doowmemrq 9aMmo term,roawn,It m Pat doIIwn m[be to nyTOaMor by Iasmile to 303 003 9Mwby amyl to -OmdamvCerad Nmlwaammm'.NI by txslmily on wn all to deemed Omn wlan mAP,Imd. LdS�°mnSL°,fl u4we1 mIdI sseft JIg$gyTl.(KnefY�synll.eulattrmiN tamw.l firermamh.I.:mv for aaollamya alawam GaSlaMae TagpO,N,N.6.Wrdltlwnl mpplunkzaeXherpaM m�fimllNalhwlnwnGn01KM(9111CaYa p11wa0Pb oXplreGan of W InenWnent lanninat itwlei:ss to lem5ole IbBIBIOi u. Cmbearm nee Me InIIIIal0nln0 helow mare.-hold itshlbeleldmi home NeaulMtlrylo blod(t.m.b IMe dreeemont. Iw I....hotel.,Ine Cmlotnm:CeuMV.f,Cannot. slenalure: sbmWm:: ^pGk�°,''"�I$id �/ i ' l' � Print Name: WIIIWmemed.loksan W1nt Neme:x �p�`��wwL, ls�..Ta�t�� fN Me! Vice Pm.1derlI(ImeralMar,os lle:z (!.p&tAeA-a IN. *' Dote: z 0.1mz N%PhD Saba Pants: Roulti Mlllm me.nt9 F\c.a.314a yWamm-Gnu M. Pppax Page 64 of 80 Attachment 6 County of Orange Nee Agreement No.N1000009297 hw telecom holdings inc. AMENDMENTNO.2 TO CONTRACT NUMBER N1000008297 AS MA-017-10011150 FOR WIDE AREA NETWORK TRANSPORT SERVICES FOR ORANGE COUNTY This Amendment Number Two(hereinafter"Amendment")is madeand entered into bythe County of Orange,a political subdivision of the State of Califomia,(hereinafter refencd m es`County'D and tw telecom holdings inc.(formerly Time Warner Tolman Holdings,Inc.),with its principal place of business at 7 Mason,Irvine,CA 92618.2707,(hereinafter referred to as"Contracto2j,which may be referred individually as"Party"or collectively as"Parties'. WHEREAS,Countyand Contractor emcuted Contract N 1000008297 for wide area network transport services for a threryear term commencing November 13,2006,hereinafter"Contrecf';and WHEREAS,the Parties issued Amendment Number One to emend Attachment A of the Connect; WHEREAS,the County desires to iswe Amendment Number Two to renew the Contract as number MA-017.10011150 for an additional year effective November 14,2009 through and including November 13,2010,and amend Attachment B to reflect amended pricing; NOW,THEREFORE,in consideration of the mums]obligations set forth herein,the Parties agree as follows; I. The teen of the Contract N1000008297,now MA-017-10011150,is renewed for apcdod of one yeer,thereby amending the Contract period effective November 14,2009 through and including November 13,2010,unless otherwise terminated by County. 2. The total Contract Amount for the period November 14,2009 through November 13,2010 shall not exceed$418,800A8. 3. A true and correct copy of Attachment B Cost/Compensation For Conitaotor Services is attached. 4. Except as otherwise expressly,set forth herein,all temm and conditions contained in the Original Contract and its amendments/madificmion we incorporated by this reference as if fully set forth herein and shall remain in full force and effect as amended berein. All obligations of the parties that would have been terminated on November13,2009 ere hereby extended to November 13,2010. This renewal period of November 14,2009 through and including November 13,201 D maybe referred toss Contract MA-017-10011150 for County purposes. 1 Page 65 of 80 Attachment B County of Orange Price Agreement No.NIOg0009297 tw telecom holdings inc. IN WITNESS WNEREOP,the parties hereto have executed this Amendment on the dates shown opposite their respective signatures below: few Wert.holdings lac.": DATE: I�-1,}'LJ-�r� SIGNATURE: PRTNTNAW: (nr M flAyfrr TITLE; P,VP- Alrl DATE:IC_ 20 '2001 SIGNATURE: PRINT NAME: 1",'n�a/[(0 �&0"d TITLE: �M.fNRA/fV X � •Iltbeawuacdng parry is a cupantiory the doeaenentmun basiamd bynvo coryorue otecers. The flrnaigne[urc mmtbe either the Chalrow ofine Barad.PresideM.or am/Vke I'MMUa The secmd sigoamm muubethc seantnry,nn msisrem secretary.the Chief Fnewiel ORrer,wanYmsistmt treazoren. In the aaemmive,a single corporeteslgnamm is aooepable whrn acaompanicd by a wipomte document demomhati ng the Iegal emh odty of rh a si gnaNrc to bind thn wmpeny. COUNTY OF ORANGE A political subdt�'((yyr���s+}}ion of the State of California SIGNATUREY 061. J A J " I J e Tnia DATE: Approved as to form Office of the County Counsel / Orange Coun Cnlifomm DATE Deputy Cou C ad 2 Page 66 of 80 Attachment B County ofOmnge Price Agreement No.N1000009297 tw telecom holdings inc. Approved by Board of Supervisors on: ATTACHMENTS COSUCOMPENSATION FOR CONTRACTOR SERVICES 1. COMPENSATION This is a fixed fee Contract between the County and Contractor for services provided in Attachment A,Scope of Work in accordance with the pricing specified below. 2. INITIAL SERVICE PDRCRASE Contractor shall supply the following service for the period November 14,2009 through and including November 13,2010; Circuit kF'j7'xedTiercd From Address To Address Qty Total Label Montbl Fiber.14 L400 S.Grand Ave 301 T nsCi Dr.South 1 $4,285.72 Fiber-6 1400 S.Grand Ave 1275 BerkeleyAve. I 54,285.72 Fiber-9 140D S.Grand Ave 840 N.Eckhoff 1 $4,285.72 Fiber-2 1400 S.Grand Ave 1770N.BroadwayI S455.72 Fiber-3 1403 S.Grand Ave 1001 S.Grand Ave. 1 $4 95.72 33m-4 1400 S.Grand Ave 46017ambores Rd. I $4295,72 Fiber-7 1400 S.Grand Ave 1535 B.Orangewood I 54285.72 nd 1400 S.Grand Ave <Gigabitlnternetoi=iP 4.900.00 ig Port Total I 1 34,900.04 Note: -Additional County location may be added endlor deleted to this schedule during the term of the Contract. The Contract may be amended,as act forth in paragraph C,to add circuit locations Fee reduction for Contractor's failure to notify County of planned and unplanned service interruptions, reduction in available circuit capacity,delays in repair or any other disrupfns of service,that result in an individual circuit not meeting the 99.99%uptime for any sequential thirty(30)day period: Per Service Outage Percentage Credit Less than I minute 9.00%availabli No credit 1 minute up m 4 hours 594.of the MRC 4 boom up to 8 hours 10%of the MRC 8 boom up roll hours 15°%of the MRC 12 items up ml6 hours 20%ofthe MRC 16hcursu te,24hours 35°%ofthe MRC 24 hours or greater 50%of the MRC 3 Page 67 of 80 Attachment B County oR)rengc Price AgreementNo.N1000009297 tw telecom holdings ire. 3. PAYMENT TERMS Initial Set.uo; Invoices for initial set-up we to be submitted in arrests,unless otherwise directed in this Contract, upon the satisfactory completion and acceptance of testing of the entire system. If service does not meet acceptance specifications herein,Contractorassumes all costs and may not seek reimbursemrntfrom County. Monthly Service: Invoices for monthly service are payable monthly, in arrears, unless otherwise directed in this Contract. Payment for monthly services, se specified in Attachment B, shall begin upon the dare ofaccepmnce of the system. Connector shell reference Contract number on invoice. Payment will be net 30 days after receipt of an invoice in a format acceptable to the County of Orange and verified and approved by the agency/department and subjcot to routine processing requirements. The responsibility for providing an acceptable Invoice rests with the Contractor. Incomplete or incorrect invoices an not acceptable and will be returned to the Contractor for correction. Billing shall cave,service and/or goads not previously invoiced. The Contractor shall reimburse the County of Orange for any monies,paid to the Contractor for goods or service not Provided or when goods or services do not meet the Contract requirements. Payments made by the County shall net preclude the right of the County from thereafter disputing any items or services involved or billed under this Contract and shell not be construed as acceptance of any pan of the goads or services. 4. PAYMENTANVOICING INSTRUCTIONS: The Contractor will provide an invoice on Contractor's letterhead for services rendered. Each invoice will have a number and will include the fallowing information: 1. Contractor's name and address 2. Contractor's remittance address(if different from l above) 3. Name of County agency department(Ifeounty agency is actual cusmmer name) 4. County Contract number(to be added as pan of the billing address) 5. Service dates) 6. Circuit label 7. Service desctiption a. Total Invoices and support documentation are to be forwarded to: CoumyofOrange 1501 E.Saint Andrew Place,Suite 200 Santa Ana,CA 82705 Attu: Account Payable 4 Page 68 of 80 Attachment R Renewal Service Order Form (RSOF) &elecom. TN.R...,6aMW Cher1aen19rW 1.Woe, I..MIdIngame by.mmuitykawNIT ansayNbsidnedos slide.cershod mpmiae the mnsold g oMolM Mmunear bditMivaly'lYJlC7 ard COwryaf oran0e PCustro.j,ends helletlbe Nan asuNon bath by Groaner aMIWTC.WIT win remdla hasg2lCle for IN pef..I Is subsidiaries orals,has 0pmemem, whkh awn eM speahe W ToNeu sank etisre Ianotlea.If Isere In a forest between INs Roiewal S.M.Oder W Vre Piet aptten aloe)he Ids O"ose Wire • newe0.tbk assess!Service O dmahLl p:avail worlds prior airannesseMarry spininess IaiN. Escape as ameMtl In his Reamval Semen Oder Fsrm,all aFlslirylmu6 aMcoMlAmriNues y To IN rernwetl SeMa s hensele N111.aMeflKt Any fervors Oat ase total ft orgenal Serveca Oder far Yw 58NIss IIned bevq hat ON.1 reaNd,ef ftled,are as,mrened tariffs aame Renewal Tenn,and lo, the,Mitre!M1WCso,use nos. Grand Total for Services Renewed: 6]0.000.Od Sorvlces Renewed: BeMO Addrasea: 1400S.GraMAvonuc WOMlyN .'eha MRC) Muwtl Lnn Two o1 Mo. OI.A 10 IS nonflarri flenewel(year ontl RemWM Useen 12 my. I Na4velM'-E61e SSMFFW101418rIWGS 90.295.72 54,205.12 12M ass, 1 Na1rvr LW-File 4NKFFW101421RWC6 6c.2&472 f usi 12 Mcn0e I Was,L -a. AWKWWTOI. (M1YCS M.20.5.I2 9<.20i.R 12 Wathy I Neale UN-EN. 4WWK 101QNVsVCS $4,205.72 Kill! 12 Mmtlz I' Nds.LAN-as, 461KFFWI014MRWGS $42B5.]2 54205.i2 12 MdtlN I N.W.0 ma 461YFFW101LT1IMrC5 &. .H, 54.2II 12MONhs I Nanue UN-Etna Assa FW10142 cfy SKITS.]. S4205,12 Rew atla—ImnanMvtl BubTONI f30.M0.b seNtf,"a am. MUN01eLualamarlaulWc-2lLruYw EYWIINY I.snWyaaomMOChequlMPC) aenowr T.— ON a 1HO I Ocable Panawal(fassonll Perewtl es 12Mfnr:a lloerv,1PN-En. Native lAN-Este WKFFW10141Trt1YC6 W.00 SOLO 12 Mnntns ease,UN-Eire 4SWFW101a221RVC6 0.00 AO I;:IMnlna NPoMe UN-RWm 46MFFW101426RYlCS Visa soym 121MrtNe aa anUN-Ese 46IflFFW1014TTlIWCS 50.00 food 12 M,11. N.Wa IAN-Ells 46MFFW101a3IiTWCS Son) SO.O1) 12 MasheNil -MIN 4SNWNrI0IQ7TTlC6 Mae WAO 12 Msnlla 46IIffFW1014221tWC5 Was WAp WAD WAD o-lseamsemaesazueod ad TMN fO.W SeMm Mdruap: ]Mauon;IMm.Le 02018.14VRCmW O111n Moe Clrcu1110'a ItonNlyRwhosICINIINMPC) Psrewvl Txm 0 atfaMu VnNITIOPHeoptibi Ranawan WO Renewal asl t2 MOMrs 1' N.W.LAN-Ste ISM1M1)f/J101420TVC5 SHAD W.00 12 ManIFs 1 Ni IAN-ate 46NI-XiQW142STVGS 0.00 $NW 12 MOrN 1 Wtv.IAN-St. 23 UOU10"OsTYCS W.CO W.W 12 Abnllrs 1 Native LW-Esa 4W=ID1414IWC6 "do WOO 121Aonihs 1 Native IAN-Efts rSNWJ1D143]lfWG6 WA0 SS.sa 12 MsnW 1 NaEva UN-Es. 46MIW10143.VIVICS W.00 WAO t2 Man0¢ I NMwIAN-aeb aSNL floh4t6'IWCS SO.oO WO0 PYaze Miun4asazneMM SY'TOIee So.W Additlonel Notes: Verson fARM.91,1T ov W Mh,-COYdyofa1 Page I N3 Page 69 of 80 Attachment 6 Ce of Onn9ele reroxfig E%e NUN Cim[IS(IO'e IISIM tl a(Ior12 MOMM1 TOM,ICB RMVRMIS-]WCWW.P4dIpaSS-MI9ds Cacl PerGrcWlwNtlr ilt,lb A VSZ LMUans br C Im Cusbmof AIS,Itl N=WlM3MIk Ren 1fI-I Ilh3!2fd9 b 1111MO0.T R—A requbee NO TttM1NWClgrgvartl NOneISMI% Si.BIIIIrq RemrtlS!Rei—M CMNII:ONLY. VeuMotd Rrv.R¢1M txrtlxom dnl�lY Pµ 212 Page 70 of 80 Attachment 6 019connect Notice II Cu ..,In4i...efipSerclrnloleny reewq 11.dnftwr mfice.T Coilnw W 1a20nho W e0]-6o]N6e9 of ty emYl to 'GuslpmerGa:e�tMalewm.wm'.Wife W mcmmXe of enwn b deemed given wean deuwxed. AlNcmetic Renewal Upon a ign.U.W Vn T.of INs fl newzl5 F,IM To-Iar-M—wID 12monl,Wmo le1.1 ellw-.e1ened In the Clnp'sd Tsma eM C"ifmne IlappllvWel dnb55 eilhel peM wtlllea IM oft,nwll jo,in1,(301 days pllm In Me e¢4atlon of fine Ilan Gun ue non tW0 wiahee lo Iounno o IM M.. Conte—ond lM lndliMuel alpnlnB bot..,e-M lMl..MI.&Wdual has the oulhMly to tlnd MO.—to W.A,--nl. lw I.Ioc—holdi,o 1— CYHomen Cot MpV/�,al".1,� y/ /J�� G SlBnallve: Sl0latlln:x r../�40 'w..✓L?t:16pi/�C.:.Gf Pdnl Home: WIIIIael"folekkLn MnINaM.x N.U� S e4LCA Tiff.: wy Cu TBN:k k&(45 /Ln"w Bala: Delon. Selea parmn: Ren MlN Verson 13 Rev.4 if A ne waoom.PoMd.nW Pape3el0 Page 71 of 80 Attachment R Renewal Service Order Form (RSOF) OtelecorT THs Removal$emce Orion is en@red No by lw hisi holdings I—b/aMlMarpb ikwMlly roman p1avIMIM mcec buy mdeul hsmugm iWlxMely'IWIC'l and county of onrlgo CG,odo.seband is0asotlre uponeeassaao WNby CWbaMr andN .TWTCWlh remaln respolEffinbIOr&s pMshoo.allla s oddlaniy.rdar Win AgreemaN, .Woo am ond opowe pe sh—oun inica4ons 1.:Isgex It here is a moist beNrean IN.Felmrnl Service Ordw eM IM pMr aereamang[I tar IM samoss Mang strewed lNZPenexel SeldroOMerslall pereY overlM prior ngraomanlandorty appllcadolorill. Ercepl ac ameMoi In pv[flanaud SeINea Oker Fonn,ell ozlollrglema ant mMitlare relatlry blhamnewad 8arukes remainin IJl torus artn oXecL AnysaMreslhat are pan alfts i,bad good.Odi Ila mM—I51ed Mass.bN are not IhamselvesgNM,are also remwe0lar IM same Renewal Tism,and in, .I,ah,i Ii ar uavge maa. Grand Total tar galviwa RPnawetl: U.M.00 aenipn Renewed: saMm addreaa11 14W S.(bIerAAagrur,Sable An ,CafhMa,9P05-A Location ClrcuX 10'o MonWy R.MnBChelgef"FIC) Perpwel Temr id Serving Clooutt lC Uffe tlaebla Ronshill(M UMI RamWal olel 12 MOMls 1 INYMIAEC®a dbNFFW10145NIWC5 Khoo.. s4,NA00 Pbeve and—hmar naHW CYbTMU AddlSpul Nolas: COmay MOlanaBklasMry lNerlcet lC8 R1[Ing mhsao,>WCW9M.PrICly as x o reoacla ramval plitllq.prsl®ner 0®uIt Wghes#280S14.Seasonal tom 11/131A09b 1Yl131010,TNs Renevmi r6aulres NO Technical Chayss and NO network chayes.III RPmMsI Peruwal CINW ONLY. YartlwlBPe/.a21-09 Oulala sh-donldeMPl Pan els Page 72 of 80 Attachment 6 If Ota ne'ss Mormoct,it Meatier rmssq imwldeIvorml bn lines Uc(IMe103d9IBorbyOmXro GsManCere�Nsebom.W.NMI ebya�NIe oremallls tooted vorw deiewrN.Autdmmle Renewal Upon eoprosn M No Teom N Hos Peneerel SOF.IKTem for seniws MI a4oma4all,renus braucueslve NmonN Note(or as attire al&oll in be SbrderU To.aN C tress...It...Kmbl,toles,Os e,IN,roLYe[Ihs star In wrili,ihl,(ID)do s Prior In IM1e¢FpIraWO a,tot1tolosta a.INS 11.1ohu01MMmPo Ile.—rrI Cus,.oned In.IMIMbel e10nIN below represent at eudl MdM..l has to eu brolly to bind ILslemw to law Apramms. Fn Mawr,..Ml...Inc. Cusmmnn CMr,rf Oren, vp��//ry�y♦��0{� Slant..: Sipwlun:a PrIM Nbat! WIII4m FredMeWon Print Name:[ /, ''{rL��Ly--lrr__ (�}i}��G�l�f rfl�q Tull: w/GM TSbC[ ('. I..T'€PIlAa3 h%A±wd�4dar Dole: Debt. III s'i Sales Gerson: Ron"its vo Jon I]Ilev.calm tw.—n-cenra.neal F bo2ol. Page 73 of 80 Attachment B County of Orange Price Agreement No.NIOO0008297 Time Warner Telecom Holdings,Inc. AMENDMENT NO.1 TO PRICE AGREEMENT NO.N100000S297 FOR WIDE AREA NETWORK TRANSPORT SERVICES FOR ORANGE COUNTY This Amendment Number One(hereinafter"Amendment") is made and entered into this 1st day of May 2007, by and between the County of Orange,hereinafter"County"and Time Warner Telecom Holdings,Inc.,hereinafter"Contractor," which are sometimes individually referred to as"Party,"or collectively referred to as"Parties" WHEREAS, County and Contractor executed Contract NIBO0008297 for wide area network transport services for a three-year term commencing November 13,2006,hereinafter"Contract";and WHEREAS,the Parties desire to amend the Attachment A of the Contract; NOW THEREFORE,it is mutually agreed as follows: 1. Attachment A of the original Contract is replaced in its entirety with Exhibit A which is attached hereto and incorporated by this reference: 2. All other provisions of the original Contract remain unchanged and in full force and effect. 3. All other provisions of the original Agreement, a copy of which is attached hereto as Exhibit B and incorporated by this reference,and any previous amendments,to the extent they are not inconsistent with this Amendment, remain unchanged and in full force and effect. Page 1 of 7 folder 547018 Page 74 of 80 Attachment B County of Orange Price Agreement No.N1000008297 Time Warner Telecom Holdings,Inc. IN WITNESS WHEREOF, the Parties hereto have executed this Amendment on the dates shown opposite their respective signatures below. TIME WARNER TELECOM HOLDINGS,INC.*: DATE: Signature �6A Print Name: t k^ If Apr a-s Title: k2c "A V"E C R I s .9-4 DATE: Signature:'Ala W Q Print Name: I1IV�lm VAp Vic, „��� /y�"��y ��[; ,�,,,/Yy���. Title, SO, i 71N�4 yyr�gC�l/A�A.0 * If the contracting party is a corporation, (2) two signatures are required as further set forth in thistthis paragraph. The first signature shall be: (a) the Chairman of the Board; b) the President; or c) any Vice President. The second signature shall be a)the Secretary;or 2)any Assistant Secretary;or 3)the Chief Financial Officer, or d)any Assistant .?.r.....r................................................................................... County of Orange A political Subdivision of the State of California By;t�lrw Qbs� — Title: �QJL gtjIvxSn� , Dater r� Page 2 of 7 folder547018 Page 75 of 80 Attachment B County of Orange Price Agreement No. N1000008297 Time Warner Telecom Holdings,Inc. Exhibit A ATTAC MENT A SCOPE OF WORK WIDE AREA NETWORK TRANSPORT SERVICES A. SERVICE LEVELS Contractor shall provide transport services with high-availability and minimum downtime. Service Level Agreements (SLAB) are a critical component of any transport service to assure that negotiated services levels are contractually adhered to by the Contractor. The County requires a minimum of 99.99% up time on all proposed circuits. The Contractor will ensure that available bandwidth or throughput will not drop below 90%of declared circuit capacity at any time on any proposed circuit The Contractor will further produce reports to the County showing bandwidth utilization and availability of throughput on an hourly, daily, weekly, monthly, and yearly basis. These reports will be available on-line and allow for on-demand bandwidth reporting by County staff at any time. Scheduled impact to transport services needs to be documented and sent to designated County contacts five(5)working days in advance. The County must be notified within 30 minutes of any outages through a pre-defined County escalation plan. All SLAB will be actively enforced by the County. Fee reductions specified in Attachment B may result from Contractor's failure to notify County of planned and unplanned service interruptions, reduction in available circuit capacity,delays in repair or any other disruption of service without regard to the County's actual monetary loss from such disruptions. B. INTERNET SERVICES 1. Network Availability Contractor shall be available to County at least 99.99%of the time in a calendar month("Network Availability") or County will receive service outage credits per the table below. A service outage causing Network non- availability is defined as the inability to transmit and receive data due to a failure in Contractor's equipment or network("Service Outage"). Credits are based upon a percentage of the monthly recurring charge("MRC'j for the non-performing Internet Service as follows: Per Service Outage Percentage Credit Up to 5 minutes(99.99%availability) No Credit 5 minutes up to 4 hours 5%of the MRC 4 hours up to 8 hours 10%of the MRC 8 hours up to 12 hours 15%of the MRC 12 hours up to 16 hours 20%of the MRC 16 hours up to 24 hours 35%of the MRC 24 hours or greater 50%of the MRC 2. Network Latency Contractor's Internet Services will have an average round-trip transmission of 50 milliseconds ("ms") or less between Contractor Internet points of presence ("POPs") in the forty-eight contiguous United States and an average round-trip transmission of 75 milliseconds or less between Contractor's Intemet POPS located in Hawaii and the mainland United States("Latency"). If Contractor fails to meet the applicable Latency standard,credits Page 3 of 7 folder547018 Page 76 of 80 Attachment B County of Orange Price Agreement No.N1000008297 Time Warner Telecom Holdings,Inc. will be calculated per the table below. Credits are based upon a percentage of the MRC for the non-performing Internet Service as follows: 48 Contiguous US. Hawaii Credits 0,00 to 50.00 ms 0.00 to 75.00 ms No Credit 50.01 to 60.00 ms 75.01 to 85.00 ms 590 of the MRC 60.01 to 65.00 ms 85.01 to 90.00 ms 10%of the MRC 65.01 to 70.00 ms 90.0110 95.00 ms 15%of the MRC 70.01 to 75.00 ms 95.01 to 100,00 ms 20%of the MRC 75.01 to 80.00 ms 100.01 to 105.00 its 35%of the MRC 80.01 ms or greater 105.01 ms or greater 50%of the MRC 3. Packet Delivery Contractor's Internet Services will have packet delivery of 99.5% or greater. Packet Delivery is determined by averaging sample measurements taken during the most recent full calendar month between Contractor Internet POPS.If Contractor fails to meet the applicable Packet Delivery objective,credits will be calculated per the table below. Credits are based upon a percentage of the MRC for the non-performing Internet Service as follows: Packet Delivery Credits 99.595or greater No Credit 99%to 99.4% 5%of the MRC 98%to 98.9% 10%of the MRC 97%to 97.9% 15%of the MRC 96%to 96.9% 20%of the MRC 95%to 95.9% 35%of the MRC Less than 95% 50%of the MRC 4. One-time Installation For Internet Services provisioned completely on Contractors Network, Contractor will complete installation within 12 business days from the date the Service Order is received by Contractor's Provisioning Network Operations Center ("PNOC"). For Off-net Services(provisioned through another provider), Contractor will complete installation within 12 business days from the date the Service Order is received by the PNOC,plus the underlying provider's actual installation interval.If Contractor fails to meet the installation interval,it will provide County with a 50%credit off the installation fee set forth in the applicable Service Order. 5. General Terms County shall report problems with its Services by contacting Contractor's Customer & Network Reliability Center("CNRC")at 1-800-829-D420. Contractor will open a trouble ticket and provide a trouble ticket number for tracking purposes. For the purpose of determining the applicable credit, a Service Outage begins upon monitoring systems report of a"down"circuit and ends when the Service is restored. The resources,equipment and methodology used to measure service level metrics are determined by Contractor in its sole discretion. Service Outages and failures to meet the performance objectives herein do not include outages and failures caused by the County's equipment, acts or omissions of County or its end users, failure of elements of the Internet outside of Contractor's control or outages occurring during scheduled or emergency maintenance. Standard maintenance windows are based on the time cone of a city's location and are available at: http://info.twtelecom.mdinfo.pbp?id=1. County shall be notified in advance of any planned or emergency outages. Notification shall be a minimum of 10 business days for planned outages and 3 days for emergency outages. The duration of a Service Outage does not include any time during which Contractor is denied access to Page 4 of 7 folder 547018 Page 77 of 80 Attachment B County of Orange Price Agreement No.NIODD008297 Time Warner Telecom Holdings, Inc. the premises necessary to restore the Service. County has the right to exercise any one of the SLA credits at any time during the month and can exercise multiple credits during any month. C. SECURITY The County Enterprise Network requires that Contractor provides detailed documentation outlining security polices/procedures,`Best Practices",and technologies that are implemented in the proposed WAN Transport Service offering to increase security and mitigate risk. D. NETWORK AND TRANSPORT MONITORING Contractor shall provide a method for on-line monitoring by the County of all proposed circuits. The Contractor should be able to provide reports on real-time and historical bandwidth utilization.All reports will include the ability to show detail on an hourly, daily, weekly, monthly and yearly basis. Additionally, the Contractor may provide a portal or secure web access for the County to monitor circuit up-time and outages.A secure Intemet-accessible web site is preferred for County access to Contractor transport statistics and information. E. TRANSITION,TESTING AND ACCEPTANCE All services must be in place no later than January 15,2007, The County will require the Data Center(1400 S.Grand Ave.) and 301 The City Drive South, Orange, be operational by December 15, 2006, to insure smooth integration with existing County infrastructure. These dates may be change upon mutual agreement of the Patties. No payments to the Contractor shall be made until the County has determined that a successful testing of each circuit and integration with County network is operational. Contractor will provide a comprehensive testing and acceptance plan for each site and each circuit type. At a minimum the County expects these testing and acceptance criteria to include pre-acceptance uptime periods and throughput validation methodologies. F. ADDITIONAL CONTRACTOR REODUtEMENTS 1. Contractor shall provide full,24 hours by 7 days a week,support including telephone support(i.e.help desk)and maintenance of communication links,if applicable. 2. Contractor will coordinate ordering,shipping and delivery of equipment and materials to any installation site, in the event such materials are required. 3. Contractor will provide any necessary equipment to initiate new services at a given location. 4. County shall receive at minimum a one-year warranty on all new parts and equipment. G. COUNTY TELECOMMUNICATIONS PROCEDURES All telecommunication and data services projects in County facilities fall under the direct authority of the office of the County Information Officer, Deputy CEO for County Executive OfftceAnformation Technology (CE01M. No work is to be performed at any County owned or occupied facility without direct authorization from County Project Manager.Additionally,no consultation or engineering of any sort will occur directly between the Contractor and any other County agency regarding any County facility without the involvement,coordination and pre-approval of County Project Manager. Page 5 of 7 folder 547018 Page 78 of 80 Attachment B County of Orange Pnce Agreement No.NI000008297 Time Warner Telecom Holdings,Inc. The County uses a Telephone Services Request (TSR) for all services requested from Contractor. The TSR will indicate the installation address and the billing address,which may or may not be the same. No work is to be performed at any County owned or occupied facility without a signed TSR from the County Project Manager.Additionally,no consultation or engineering of any sort will occur directly between the Contractor and any agency regarding any County facility without the involvement, coordination, and written approval from County Project Manager. Failure to comply with these instructions can lead to termination of the Contract. Additionally, if the Contractor installs any transport circuits without a signed TSR from the County Project Manager at any County facility,said performance will be deemed outside the scope of this Contract and the service shall not be compensated. If Contractor is unsure of a course of action or whether to undertake any service including but not limited to installation, repair, deletion, or termination of any transport circuit, prior to providing any service Contractor's Project Manager shall notify, in writing,the County Project Manager for consultation and written approval or denial of the work. All services are to be coordinated using the outlined methods, and through the County designated Project Manager only. The County Project Manager may provide a minimum of thirty(30)days notice for all requests to terminate or delete any transport circuit. The only acceptable method to proceed with work is an authorized TSR. As part of this Contract, direct technical contact procedures and access shall be established for 24 hour/7 day week operational response by the Contractor. The Telephone Service Request(TSR)process is as follows: • The County Project Manager is responsible for processing and tracking the TSR and will be the single point of contact for any service. • The County Project Manager will notify the Contractor of a pending TSR. • The Contractor will pick up the TSR from the County Project Manager and arrive at the job site on the due date to perform the work. The TSR can be faxed or e-mailed to the Contractor upon request. • The Contractor will cover all the work to be done with the designated County contact and be prepared to answer any questions. • Upon arrival at the County location,the Contractor will be escorted to the work location and will perform all the necessary work in a professional and workman like manner and notify the contact when work is completed. • The Contractor will explain all the work that was done and have the County departmentlagency contact signoff on the TSR as completed. • The Contractor will return the signed TSR and all ancillary documentation associated with the TSR to the County Project Manager. • The Contractor shall submit an invoice to County indicating labor and material used and referencing a TSR and Contract number.The invoice will include a copy of the TSR with the signature of the County contact that accepted the work performed. The Contractor will invoice the County within 60 days of the accepted completion of the project. Contractor shall submit a list of all employees who will be directly performing tasks associated with this Contract to the County Project Manager.Contractor employees may be subject to a background check performed by the County's Sheriff Department and Probation Department, if required to obtain access at certain locations. Cost for any background check will be the responsibility of the Contractor. If changes occur to this list an updated list will be submitted, in writing, by the Contractor, to the County Project Manager. At no Lime will unauthorized Contractor employees perform any task associated with this Contract.If this occurs the Contractor will be notified that they have not complied with the terms of this Contract and the Contract may be terminated. Page 6 of 7 folder 547018 Page 79 of 80 Attachment B County of Orange Price Agreement No. N1000008297 Time Warner Telecom Holdings,Inc. Exhibit H Original Contract N1000008297 (This page intentionally left blank) Page 7 of 7 folder 547018 Page 80 of 80 Attachment C Agreement for Wide Area Network Transport Services Between The County of Orange And Time Warner Telecom Moldings, Inc. Page 1 of 27 Attachment C Table of Contents Recitals..................................................................................................................................................4 ARTICLES...................................................._........_........................._....._.._..._..._...._..._....PACE General Terms and Conditions A.Governing Law and Venue...............................................................................................................4 B.Entire Contract..................................................................................................................................4 C.Amendments.....................................................................................................................................4 D.Taxes.................................................................................................................................................4 E.Delivery.................................................................................................................................. F.Acceptance/Payment.........................................................................................................................5 G.Wamamy...........................................................................................................................................5 H.Patent/Copyright Material/Propriety Infringement...........................................................................5 I.Assignment or Subcontracting..........................................................................................................5 I.Non-Discrimination...........................................................................................................................5 K.Termination......................................................................................................................................5 L.Consent to Breach not Waiver..........................................................................................................6 M.Remedies Not Exclusive..................................................................................................................6 N.Independent Contractor................................_..................................................................................6 O.Performance......................................................................................................................................7 P.Indemnification/Insurance.................................................................................................................6 Q.Bills and Liens..................................................................................................................................9 R. Changes.............................................................................................................................................9 S.Change of Ownership........................................................................................................................9 T.Force Majeure...................................................................................................................................9 U.Confidentiality .................................................................................................................................9 V.Compliance with Laws ....................................................................................................................9 W.Freight..............................................................................................................................................9 X.Pricing...............................................................................................................................................10 Y.Waiver of luny Trial ........................................................................................................................10 Z.Terms and Conditions ......................................................................................................................10 A.A.Headings........................................................................................._.............................................10 BB.Sevembility....................................................................................................................................10 CC.Calendar Day..................................................................................................................................10 DD.Attorney Fees ................................................................................................................................10 EE.Interpretation..................................................................................................................................10 FF.Authority.........................................................................................................................................10 Additional Terms and Conditions 1. Scope of Contract...........................................................................................................................10 2. Term of Contract—.........................................................................................................................11 3. Fiscal Appropriations.....................................................................................................................11 4. Precedence.....................................................................................................................................it 5. Compensation................................................................................................................................11 6. Project Manager—County/Contractor...........................................................................................11 TContractor Personnel..............................................._...................................................................II 8. ReporlsMIeetings...........................................................................................................................12 9. Contractor's Records.....................................................................................................................12 10. Conflict of Interest—Contractor. ..................................................................................................12 11. Ownership of Documents..............................................................................................................12 12. Data-Title to...................................................................................................................................12 2 File FolEa547016 Page 2 of 27 Attachment C 13. Breach of Contract..................................................................................................................I......12 14. Contract Disputes...........................................................................................................................13 15. Stop Work......................................................................................................................................13 16. Termination—Orderly.........................................................._.......................................................13 17. Notices.........................................................................................................................................14 18. Incorporation..................................................................................................................................14 19. Usage......................._....................................................................................................................14 20. Auditslfnspections..........................................................................................................................14 21. Conditions Affecting Work............................................................................................................IS 22. Contractor's Expense.....................................................................................................................15 23. Gratuities............................................................................................................._.........................15 24. Authorization Warranty.................................................................................................................15 25. News/Information Release.............................................................................................................15 26. County of Orange Child Support Enforcement Requirements ......................................................15 27. Errors and Omissions.....................................................................................................................16 ContractSignature Page....................................................................................................................17 Attachments A. Scope of Work...............................................................................................................................18 B. Cost/Compeasation for Contractor Services..................................................................................21 C. Staffing Plan..................................................................................................................................23 Exhibits I. Blank County of Orange Child Support Enforcement Certification Requirements Form.............24 3 File Potder54re1x Page 3 of 27 Attachment C AGREEMENT BETWEEN COUNTY OF ORANGE AND TIME WARNER TELECOM HOLDINGS,INC., FOR WIDE AREA NETWORK TRANSPORT SERVICES This Agreement, hereinafter referred to as "Contract", is made and entered into as of the date fully executed by and between the County of Orange, a political subdivision of the State of California,hereinafter referred to as"County", and Time Warner Telecom Holdings, Inc., with a place of business at 7 Mason Irvine, CA, hereinafter referred to as "Contractor",which are sometimes individually referred to as"Party",or collectively referred to as"Parties". RECITALS WHEREAS, County desires to enter into a Contract with Contractor to provide wide area network transport services("WAN");and WHEREAS, Contractor is willing to provide the services specified in the Scope of Work, attached hereto and hereinafter referred to as Attachment A,in accordance with the following Terms and Conditions; NOW,THEREFORE,the Parties mutually agree as follows: ARTICLES General Terms and Conditions A. Governing Law and Venue: This Contract has been negotiated and executed in the state of California and shall be governed by and construed under the laws of the state of California. In the event of any legal action to enforce or interpret this Contract, the sole and exclusive venue shall be a court of competent jurisdiction located in Orange County. California, and the Parties hereto agree to and do hereby submit to the jurisdiction of such court, notwithstanding Code of Civil Procedure section 394. Furthermore,the Parties specifically agree to waive any and all rights to request that an action be transferred for trial to another County. B. Entire Contract: This Contract, including its Attachments and Exhibit which have been incorporated, when accepted by the Contractor either in writing or by the shipment of any article or other commencement of performance hereunder, contains the entice Contract between the Parties with respect to the matters herein and there are no restrictions, promises, warranties or undertakings other than those set forth herein or referred to herein. No exceptions, altemadves, substitutes or revisions are valid or binding on County unless authorized by County in writing. Electronic acceptance of any additional terms, conditions or supplemental Contracts by any County employee or agent, including but not limited to installers of software, shall not be valid or binding on County unless accepted in writing by the County's Purchasing Agent or his designee,hereinafter"Purchasing Agent", C. Amendments: No alteration or variation of the terms of this Contract shall be valid unless made in writing and signed by the Parties; no oral understanding or agreement not incorporated herein shall be binding on either of the Parties; and no exceptions, alternatives, substitutes or revisions are valid or binding on County unless authorized by County in writing. D. Taxes: Unless otherwise provided herein or by law,price quoted does not include California state sales or use tax. E. Delivery: Time of delivery of goods or services is of the essence in this Contract. County reserves tie right to refuse any goods or services and to cancel all or any part of the goods not conforming to applicable specifications,drawings, samples or description,or services that do not conform to the prescribed statement of work. Acceptance of any part of the order for goods shall not bind County to accept future shipments,nor deprive it of the right to return goods already accepted,at Contractor's expense. Over shipments and under shipments of goods shall be only as agreed to in writing File Folder$47018 4 Page 4 of 27 Attachment C by County. Delivery shall not be deemed to be complete until all goods,or services,have actually been received and accepted in writing by County. F. AcceptancelPsyment: Unless otherwise agreed to in writing by County, 1)acceptance shall not be deemed complete unless in writing and initial testing of transport circuit has been completed as set forth in Attachment A,Transition, Testing and Acceptance,and 2) payment shall be made in arrears after satisfactory acceptance by the County and in accordance with Attachment B,Cost/Compensation. G. Warranty: Contractor expressly warrants that the goods/services covered by this Contract are 1) free of liens or encumbrances, 2) merchantable and good for the ordinary purposes for which they are used, and 3) fit for the particular purpose for which they are intended. Acceptance of this order shall constitute an agreement upon Contractor's part to indemnify,defend and hold County and its indernm ees as identified in paragraph'?"below, and as more fully described in paragraph"P", harmless from liability, loss, damage and expense, including reasonable counsel fees, incurred or sustained by County by reason of the failure of the goods/services to conform to such warranties, faulty work performance, negligent or unlawful acts, and non-compliance with any applicable state or federal codes, ordinances, orders, or statutes, including the Occupational Safety and Health Act (OSHA) and the California Industrial Safety Act. Such remedies shall be in addition to any other remedies provided by law. H. Patent/Copyright MateriaLdProprietary Infringement: Unless otherwise expressly provided in this Contract, Contractor shall be solely responsible for clearing the right to use any patented or copyrighted materials in the performance of this Contract. Contractor warrants that any software as modified through services provided hereunder will not infringe upon or violate any patent, proprietary right, or trade secret right of any third patty. Contractor agrees that, in accordance with the more specific requirement contained in paragraph"P"below, it shall indemnify, defend and hold County and County hidemnitees harmless from any and all such claims and be responsible for payment of all costs, damages, penalties and expenses related to or arising from such claim(s), including, but not limited to,auomey's fees,costs and expenses. I. Assignment or Sub-contracting: The terms,covenants,and conditions contained herein shall apply to and bind the heirs, successors, executors, administrators and assigns of the Parties. Furthermore,neither the performance of this Contract nor any portion thereof may be assigned or sub-contracted by Contractor without the express written consent of County. Any attempt by Contractor to assign or sub-contract the performance or any portion thereof of this Contract without the express written consent of County shall be invalid and shall constitute a breach of this Contract. I. Non-Discrimination: In the performance of this Contract, Contractor agrees that it will comply with the requirements of Section 1735 of the California Labor Code and not engage nor permit any subcontractors to engage in discrimination in employment of persons because of the race,religious creed,color,national origin,ancestry,physical disability,mental disability, medical condition,marital status,or sex of such persons. Contractor acknowledges that a violation of this provision shall subject Contractor to all the penalties imposed for a violation of anti-discrimination law or regulation including but not limited to Section 1720 et se�(r.of the California Labor Code. K. Termination: In addition to any other remedies or rights it may have by law and those set forth in the Contract, County has the right to terminate this Contract without penalty immediately with cause or after 30 days'written notice without cause, unless otherwise specified. In the event County terminates this Contract or any of the Services specified in Attachment B, Number 2 ("Initial Service Purchase") without cause, County shall pay to Contractor Termination Liability equal to 100% of the applicable monthly recurring charge for the terminated services for the remaining term of the Contract, County may terminate individual Services without terminating the Contract in its entirety. County shall not be responsible for Termination Liability associated with the termination of individual services that are part of the Initial Service Purchase provided that the following conditions are met:(a)within 30 days of the termination of such service, County orders new Services from Contractor at a service address specified in Attachment B for a term not less than the unexpired term of the terminated Services; (b) the new Services do not require Contractor to incur capital expenditures; and(c)the new Services have monthly rectnring charges equal to or File Folder547018 $ Page 5 of 27 Attachment C greater than the monthly recurring charges for the terminated Services;or,(d),in lieu of(a),(b)and(c)above, within 30 days of the termination of such Services, (i) County orders new Services from Contractor at any location, (ii) County pays for any capital or build out expenses incurred in providing the new Services as a one time fee or incorporated in the applicable monthly recurring charge, and (iii) the new Services have monthly recurring charges pess any portion of the monthly recurring charge associated with capital or build out expenses),equal to or greater than the monthly recurring charges for the terminated Services. Termination Liability for future services ordered at locations other than those referenced in Attachment B,Number 2,Initial Service Purchase,shall be determined by the parties at the time such services are ordered and shall be reflected in an amendment to this Agreement as referenced in Paragraph C above. Cause shall be defined as any breach of Contract, any misrepresentation or fraud on the part of the Contractor. Exercise by County of its right to terminate the Contract shall relieve County of all further obligations except as provided herein. Termination by Contractor: (a) Contractor may terminate this Contract or any service order hereunder or suspend services, with 30 days prior written notice, upon: (i) County's failure to pay any amounts as provided herein; (H) County's breach of any provision of this Contract or any law, rule or regulation governing the services; (iii) any insolvency,bankruptcy assignment for the benefit of creditors,appointment of trustee or receiver or similar event with respect to County; or(iv)any governmental prohibition or required alteration of the services. Contractor shaft afford County written notice of the breach and ten calendar days or such shorter time that may be specified in this Contract within which to cure the breach. (b)Contractor may terminate or suspend services without notice if: (i)necessary to protect Contractors network;Contractor has reasonable evidence of County's fraudulent or illegal use of services;or (ii)required by legal or regulatory authority. Any termination shall not relieve County of any liability incurred prior to such termination,or for payment of unaffected services. All terms and conditions of the Contract shall continue to apply to any services not so terminated, regardless of the rermination of this Contract. If the service provided under any service order hereunder has been terminated by Contractor in accordance with this section,and County wants to restore such service terminated due to County breach, County must first pay all past due charges, a non-recurring charge and reconnections charge. All requests for disconnection will be processed by Contractor in 30 days or less. County must pay for services until such disconnection actually occurs, unless County has exercised its right to terminate for cause as set forth in this Section. L. Consent to Breach Not Waiver: No term or provision of this Contractor shall be deemed waived and no breach excused, unless such waiver or consent shall be in writing and signed by the Party claimed to have waived or consented. Any consent by any Party to, or waiver of, a breach by the other, whether express or implied, shall not constitute consent to,waiver of,or excuse for any other different or subsequent breach. M. Remedies Not Exclusive: The remedies for breach set forth in this Contract are cumulative as to one another and as to any other provided by law, rather than exclusive;and the expression of certain remedies in this Contract does not preclude resort by either Party to any other remedies provided by law. N. Independent Contractor: Contractor shall be considered an independent Contractor and neither Contractor, its employees nor anyone working under Contractor shall be considered an agent or an employee of County. Neither Contractor its employees nor anyone working under Contractor, shall qualify for workers' compensation or other fringe benefits of any kind through County. O. Performance: Contractor shall perform all work under this Contract, taking necessary steps and precautions to perform the work to County's satisfaction. Contractor shall be responsible for the professional quality, technical assurance, timely completion and coordination of all documentation and other goods/services furnished by the Contractor under this Contract. Contractor shall perform all work diligently,carefully, and in a good and workman- like manner; shall ftm ish all labor, supervision, machinery, equipment, materials, and supplies necessary therefore; shall at its sole expense obtain and maintain all permits and licenses required by public authorities,including those of County required in its governmental capacity, in connection with performance of the work; and, if permitted to subcontract,shall be fully responsible for all work performed by subcontractors. File Folder 547018 6 Page 6 of 27 Attachment C P. IndemruficatiordInsurance: INDEMNIFICATION PROVISIONS Contractor agrees to indemnify,defend with counsel approved in writing by County,and hold County, its elected and appointed officials, officers, employees, agents and those special districts and agencies which Coun[y's Board of Supervisors acts as the governing Board("County Indemnitem")harmless from any claims, demands or liability for personal injury or property damage, arising from or related to the services,products or other perfomtance provided by Contractor pursuant to this Contract. Contractor is not liable for any indirect, incidental, consequential, special or punitive damages (including without limitation, lost profits or revenue) arising out of or related to the provision of services hereunder, including any claims made by or through third parties. Contractor's liability to County may not exceed one month's calculation of monthly charges for the applicable services. Contractor has no liability whatsoever for the content of information passing through its network If judgment is entered against Contractor and County by a court of competent jurisdiction because of the concurrent active negligence of County or County Indemnitees, Contractor and County agree that liability will be apportioned as determined by the court. Neither Party shall request a jury apportionment. INSURANCE PROVISIONS Prior to the provision of services under this Contract, the Contractor agrees to purchase all required insurance at Contractor's expense and to deposit with the County Certificates of hvsurance, including all endorsements required herein, necessary to satisfy the County that the insurance provisions of this Contract have been complied with and to keep such insurance coverage and the certificates therefore on deposit with the County during the entire term of this Contract. In addition, all subcontractors performing work on behalf of Contractor pursuant to this Contract shall obtain insurance subject to the same terms and conditions as set forth herein for Contracmr. All insurance policies required by this Contract shall declare any deductible or self-insured retention (SIR) in an amount in excess of$25,000($5,000 for automobile liability Contractor shall be responsible for reimbursement of any deductible to the insurer. Any self-insured retentions(Slits)or deductibles shall be clearly stated on the Certificate of Insurance. If the Contractor fails to maintain insurance acceptable to the County for the full term of this Contract, the County may terminate this Contract. Oualified Insurer The policy or policies of insurance must be issued by an insurer licensed to do business in the state of California (California Admitted Cattier). Minimum insurance company ratings m detemtined by the most current edition of the Best's Rev Ratme Gulde/Prooerty-Casualtv/United States or ambest.com shall be A-(Secure Best's Rating)and VM(Financial Size Category). If the carrier is a non-admitted carrier in the state of California, CEO/Office of Risk Management retains the right to approve or reject cagier after a review of the company's performance and financial ratings. The policy or policies of insurance maintained by the Contractor shall provide the minimum limits and coverage as set forth below: Coveraee Minimum Limits Commercial General Liability with broad form $1,000,000 combined single property damage and contractual liability limit per occurrence $2.000,000 aggregate File Folder 547018 7 Page 7 of 27 Attachment C Automobile liability including coverage $1,000,000 combined single for owned,non-owned and hired vehicles limit per occurrence Workers'Compensation Statutory Employers'Liability Insurance $1,000,000 per occurrence All liability insurance,except Professional Liability, required by this Contract shall be at least$1,000,000 combined single limit per occurrence. Professional Liability may also be provided on a "claims made" basis. The minimum aggregate limit for the Commercial General Liability policy shall be$2,000,000. The County of Orange shall be added as an additional insured on all insurance policies required by this Contract with respect to work done by the Contractor under the terms of this Contract (except Workers' Compensation/Employers' Liability). An additional insured endorsement evidencing that the County of Orange is an additional insured shall accompany the Certificate of Insurance. All insurance policies required by this Contract shall be primary insurance, and any insurance maintained by the County of Orange shall be excess and non-contributing with insuramm provided by these policies. An endorsement evidencing that the Contractor's insurance is primary and non-contributing shall specifically accompany the Certificate of Insurance for the Commercial General Liability. All insurance policies required by this Contract shall give the County of Orange 30 days notice in the event of cancellation. This shall be evidenced by an endorsement separate from the Certificate of Insurance. In addition, the cancellation clause must include language as follows,which edits the pre-printed ACORD certificate: SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, THE ISSUING COMPANY WILL MAIL 30 DAYS WRITTEN NOTICE TO THE CERTIFICATE HOLDER NAMED TO THE LEFT. All insurance policies required by this Contract shall waive all rights of subrogation against the County of Orange and members of the Board of Supervisors,its elected and appointed officials,officers,agents and employees when acting within the scope of their appointment or employment. If Contractor's Professional Liability policy is a"claim made"policy,Contractor shall agree to maintain professional liability coverage for two years following completion of Contract The Commercial General Liability policy shall contain a severability of interests clause. The Contractor is aware of the provisions of Section 3700 of the California Labor Code which requires every employer to be insured against liability for Workers' Compensation or be self-insured in accordance with provisions of that code. The Contractor will comply with such provisions and shall furnish the County satisfactory evidence that the Contractor has secured, for the period of this Contract, statutory Workers' Compensation insurance and Employers'Liability insurance with minimum limits of$1,000,000 per occurrence. Insurance certificates should be forwarded to the agency/department address listed on the solicitation. If the Contractor fails to provide the insurance certificates and endorsements within seven days of notification by CEO/Purchasing or the agency/department purchasing division,award may be made to the next qualified Offeror. County expressly retains the right to require Contractor to increase or decrease insurance of any of the above insurance types throughout the term of this Contract. Any increase or decrease in insurance will be as deemed by County of Orange Risk Manager as appropriate to adequately protect County. File Folder 547018 $ Page 8 of 27 Attachment C County shall notify Contractor in writing of changes in the insurance requirements. if Contractor does not deposit copies of acceptable certificates of insurance and endorsements with County incorporating such changes within thirty days of receipt of such notice, this Contract may be in breach without further notice to Contractor, and County shall be entitled to all legal remedies. The procuring of such required policy or policies of insurance shall not be consorted to limit Contractor's liability hereunder nor to fulfill the indemnification provisions and requirements of this Contract. The County of Orange Certificate of Insurance and the Special Endorsement for the County of Orange can be utilized to verify compliance with the above-mentioned insurance requirements in place of commercial insurance certificates and endorsements Q. Bills and Liens: Contractor shall pay promptly all indebtedness for labor, materials and equipment used in performance of the work. Contractor shall not permit any lien or charge to attach to the work or the premises,but if any does so attach, Contractor shall promptly procure its release and, in accordance with the requirements of paragraph "P" above, indemnify, defend, and hold County harmless and be responsible for payment of all costs, damages,penalties and expenses related to or arising from or related thereto. R. Changes: Contractor shall make no changes in the work or perform any additional work without the County's specific written approval. S. Change of Ownership: Contractor agrees that if there is a change or transfer in ownership of Contractor's business prior to completion of this Contract,the new owners shall be required under terms of sale or other transfer to assume Contractor's duties and obligations contained in this Contract and complete them an the satisfaction of County. T. Force Majeure: Contractor shall not be assessed with liquidated damages or unsatisfactory performance penalties during any delay beyond the time named for the performance of this Contract caused by any act of God,war, civil disorder, employment strike or other cause beyond its reasonable control,provided Contractor gives written notice of the cause of the delay to County within 36 (thirty-six)hours of the start of the delay and Contractor avails himself of any available remedies. U. Confidentiality: Contractor agrees to maintain the confidentiality of all County and County-related records and information pursuant to all statutory laws relating to privacy and confidentiality that currently exist or exist at any time during the term of this Contract. All such records and information shall be considered coiTidential and kept confidential by Contractor and Contractor's staff,agents and employees. V. Compliance with Laws: Contractor represents and warrants that services to be provided under this Contract shall fully comply, at Contractor's expense, with all standards, laws, statutes, restrictions, ordinances, requirements, and regulations (collectively "laws'), including, but not limited to those issued by County in its governmental capacity and all other laws applicable to the services at the time services are provided to and accepted by County.Contractor acknowledges that County is relying on Contractor to ensure such compliance, and pursuant to the requirements of paragraph "P" above, Contractor agrees that it shall defend, indemnify and hold County and County Indemnitees harmless from all liability,damages,costs and expenses arising from or related to a violation of such laws. W. Freight(F.O.B.Destination): Contractor assumes full responsibility for all transportation,transportation scheduling, packing,handling, insurance,and other services associated with delivery of all products deemed necessary under this Contract. X. Pricing: The Contract price shall include full compensation for providing all required goods in accordance with required specifications, or services as specified herein or when applicable, in the Scope of Work attached to this Contract,and no additional compensation will be allowed therefore, unless otherwise provided for in this Contract. File Folder 547018 9 Page 9 of 27 Attachment C Y. Waiver of Jury Trial: Each Parry acknowledges that it is aware of and has had the opportunity to seek advice of counsel of its choice with respect to its rights to trial by jury, and each Party,for itself and its successors,creditors, and assigns, does hereby expressly and knowingly waive and release all such rights to trial by jury in any action, proceeding or counterclaim brought by any Party hereto against the other (and/or against its officers, directors, employees, agents,or subsidiary or affiliated entities)on or with regard to any matters whatsoever arising out of or in any way connected with this Contract and/or any other claim of injury or damage, Z. Terms and Conditions: Contractor acknowledges that it has read and agrees to all terns and conditions included in this Contract. AA. Headings: The various headings and numbers herein, the grouping of provisions of this Contract into separate clauses and paragraphs, and the organization hereof are for the purpose of convenience only and shall not limit or otherwise affect the meaning hereof. BE. Severability: If any term, covenant, condition or provision of this Contract is held by a court of competent jurisdiction to be invalid, void or unenforceable,the remainder of the provisions hereof shall remain in full force and effect and shall in no way be affected,impaired or invalidated thereby. CC. Calendar Days: Any reference to the word "day" or "days" herein shall mean calendar day or calendar days, respectively,unless otherwise expressly provided. DD. Attorneys Fees: In any action or proceeding to enforce or interpret any provision of this Contract, or where any provision hereof is validly asserted as a defense,each party shall bear its own atmmey's fees,costs and expenses. EE. Interpretation: This Contract has been negotiated at arm's length and between persons sophisticated and knowledgeable in the matters dealt with in this Contract. In addition,each Party has been represented by experienced and knowledgeable independent legal counsel of their own choosing,or has knowingly declined to seek such counsel despite being encouraged and given the opportunity to do so. Each Party further acknowledges that they have not been influenced to any extent whatsoever in executing this Contract by any other Party hereto or by any person representing them, or both. Accordingly, any rule of law (including California Civil Code Section 1654) or legal decision that would require interpretation of any ambiguities in this Contract against the Party that has drafted it is not applicable and is waived. The provisions of this Contract shall be interpreted in a reasonable manner to affect the purpose of the Parties and this Contract. FF. Authority: The Parties to this Contract represent and warrant that this Contract has been duly authorized and executed and constitutes the legally binding obligation of their respective organization or entity, enforceable in accordance with its terms. Additional Terms and Conditions 1. Scope of Contract: This Contract specifies the contractual terms and conditions by which the County will procure and receive good(services from Contractor as set forth in Attachment A. This Contract supersedes the Time Warner Telecom Standard Terms and Conditions submitted in response to RFPS 14Z0000005. County of Orange tray submit service orders to Contractor to purchase telecommunication and related services under this Agreement("Service Orders'). The Service Orders describe the telecommunication and related services that are available for purchase C`Services'7. When fully executed by both Parties,the Service Orders and this Contract form the final written agreement between the Parties ("Agreemenf'). However,should a conflict arise between the contents of this Contract and the contents of a specific Service Order or the Service Orders collectively,the Tema and Conditions of this Contract shall prevail. Ale Folder 547018 10 Page 10 of 27 Attachment C 2. Term of Contract: The initial tern of this Contract is for three(3)years effective on the date execution is completed by both Parties,continuing for three(3)years from that date,unless terminated by County. Contract may be renewed for up to two (2) additional one-year, consecutive terms, upon mutual agreement of the Patties. Each renewal of this Contract may require approval by the County Board of Supervisors. County is not required to provide a reason, or rationale in the event it elects not to renew the Contract. 3. Fiscal Appropriations: This Contract is subject to and contingent upon applicable budgetary appropriations being approved by the County of Orange Board of Supervisors for each year during the term of this Contract. If such appropriations are not forthcoming, the Contract will be terminated without penalty. Contractor acknowledges that funding or portions of funding for this Contract may also be contingent upon the receipt of funds from, and/or appropriation of funds by, the state of California to County. If such funding and/or appropriations are not forthcoming, or are otherwise limited, County may immediately terminate or modify this Contract without penalty, 4. Precedence: The Contract documents consist of this Contract including its Attachments and Blank Exhibit. In the event of a conflict between the Contract documents,the order of precedence shall be the 1)the General Terms of this Contract,2)the Additional Terns of the Contract and 3)the Attachments and Exhibit. 5. Compensation: The Contractor agrees to accept the specified compensation as set forth in Attachment B as full remuneration for performing all services and famishing all staffing and materials required, for any reasonably unforeseen difficulties which may arise or be encountered in the execution of the services until acceptance, for risks connected with the services, and for performance by the Contractor of all its duties and obligations hereunder. 6. County and Contractor Project Manager: The County shalt appoint a Project Manager to act as liaison between the County and the Contractor during the term of this Contract. The County's Project Manager shall notify Contractor of any transport circuits to be added or terminated. Contractor shall not add, delete, install, remove or terminate any individual or group of transport circuit(s) without a TSR submitted by the County's Project Manager. Contractor shall not be compensated for any transport circuit, service, termination,deletion or monthly charges, fees or rates for any transport circuit which has not been requested in writing by the County Project Manager. Contractor shall appoint a Project Manager to direct the Contractor's efforts in fulfilling Contractor's obligations under this Contract. Contractor's Project Manager shall be subject to approval by the County and shall not be changed without the written consent of the County's Project Manager. The County's Project Manager shall have the right to require the removal and replacement of the Contractor's Project Manager from providing services to the County under this Contract. The County's Project Manager shall notify the Contractor in writing of such action. The Contractor shall accomplish the removal within 14 calendar days after written notice by the County's Project Manager.The County is not required to provide any reason,rationale or factual information in the event it elects to request the removal of Contractor's Project Manager from providing services to the County under this Contract. 7. Contractor Personnel: In addition to the rights set forth in paragraph 6, the County's Project Manager shall have the right to require the removal and replacement of any of Contracroes personnel from providing services to the County under this Contract. The County's Project Manager shall notify the Contractor's Project Manager in writing of such action. The Contractor shall accomplish the removal of the specified personnel within one (1) calendar days after written notice by the County's Project Manager. The County is not required to provide any reason, rationale or factual information in the event it elects to request the removal of any of Contractor's personnel from providing services to the County under this Contract. File Folder 54i018 11 Page 11 of 27 Attachment C 8. Reports/Meetings: The Contractor shall develop reports and any other relevant documents necessary to complete die services and requirements as or forth in this Contract. The County's Project Manager and the Contractor's Project Manager will meet on reasonable notice to discuss the Contractor's performance and progress under this Contract. If requested, the Contractor's Project Manager and other project personnel shall attend all meetings. The Contractor shall provide such information that is requested by the County for the purpose of monitoring progress under this Contract. 9. Contractor's Records: The Contractor shall keep true and accurate accounts, records, books and data which shall correctly reflect the business transacted by the Contractor in accordance with generally accepted accounting principles. These records shall be stored in Orange County for a period of four years after final payment is received from the County. Storage of records in another county will require written approval from the County of Orange assigned buyer. 10. Conflict of Interest — (Contractor): Contractor shall exercise reasonable care and diligence to prevent any actions or conditions that result in a conflict with the but interests of the County. This obligation shall apply to the Contractor; the Contractor's employees, agents, relatives, sub-tier Contractors, and third parties associated with accomplishing work and services hereunder. Contractor's efforts shall include, but not be limited to establishing precautions to prevent its employees or agents from making, receiving, providing or offering gifts, entertainment,payments,loans or other considerations which could be deemed to appear to influence individuals to act contrary to the best interest of the County. 11. Ownership of Documents: The County has permanent ownership of all directly connected and derivative materials produced under this Contract by the Contractor. All documents, reports and other incidental or derivative work or materials furnished hereunder shall become and remains the sole property of the County and may be used by the County as it may require without additional mst to the County. None of the documents, reports and other incidental or derivative work or furnished materials shall be used by the Contractor without the express written consent of the County. 12. Data—Title to: All materials,documents,data or information obtained from the County data files or any County medium furnished to the Contractor in the performance of this Contract will at all times remain the property of the County. Such data or information may not be used or copied for direct or indirect use by the Contractor after completion or termination of this Contract without the express written consent of the County. All materials, documents,data or information,including copies,must be retuned to the County at the end of this Contract. 13. Btuch of Contract: The failure of the Contractor to comply with any of the provisions,covenants or conditions of this Contract shall be a material breach of this Contract, In such event the County may, and in addition to any other remedies available at law, in equity,or otherwise specified in this Contract: 1. Afford the Contractor written notice of the breach and ten calendar days or such shorter time that may be specified in this Contract within which to cure the breach;and 2. Discontinue payment to the Contactor for and during the period in which the Contractor is in breach;and 3. Offset against any monies billed by the Contractor but yet unpaid by the County those monies disallowed pursuant to the above;and 4. County may terminate the Contract immediately without penalty. 14. Contract Disputes: A. The Parties shall deal in good faith and attempt to resolve potential disputes informally. If the dispute concerning a question of fact arising under the terms of this Contract is not disposed of in a reasonable period File Folder547n18 12 Page 12 of 27 Attachment C of time by the Contractor's Project Manager and the county's Project Manager,such matter shall be brought to the attention of the County Purchasing Agent by way of the following process: 1. The Contractor shall submit ro the agency/department assigned buyer a written demand for a final decision regarding the disposition of any dispute between the parties arising under, related to, or involving this Contract, unless the County, on its own initiative, has already rendered such a final decision. 2. The Contractor's written demand shall be fully supported by factual information,and if such demand involves a cost adjustment to the Contract, the Contractor shall include with the demand a written statement signed by a senior official indicating that the demand is made in good faith, that the supporting data are accurate and complete, and that the amount requested accurately reflects the Contract adjustment for which the Contractor believes the County is liable. B. Pending the final resolution of any dispute arising under,related to,or involving this Contract,the Contractor agrees to diligently proceed with the performance of this Contract, including the delivery of goods and/or provision of services. The Contractor's failure to diligently proceed shall be considered a material breach of this Contract. C. If County disputes any charges billed hereunder, County must submit a documented claim regarding the disputed amount within 120 days of knowing or having should have known that the charges billed are incorrect. All claims regarding disputed charges not submitted to Contractor within such time are deemed waived. Any final decision of the County shall be expressly identified as such,shall be in writing, and shall be signed by the County Purchasing Agent or his designee. If the County fails to render a decision within 90 days after receipt of the Contractor's demand, it shall be deemed a final decision adverse to the Contractor's contentions. 15, Stop Work: The County may,at any time,by written stop work order to the Contractor,require the Contractor to stop all or any part of the work called for by this Contract for a period of 90 working days after the stop work order is delivered to the Contractor and for any further period to which the Patties may agree. The stop work order shall be specifically identified as such and shall indicate it is issued under this clause. Upon receipt of the step work order,the Contractor shall immediately comply with its terms and take all reasonable steps to minimize the incurrence of costs allocable to the work covered by the stop work order during the period of work stoppage. Within a period of 90 working days after a stop work order is delivered to the Contractor or within any extension of that period to which the Parties shall have agreed,the County shall either 1. Cancel the stop work order;or 2. Terminate the Contract in whole or in part in writing as soon as feasible. County is not required to provide thirty (30) days notice of the termination of the Contract to Contractor if a stop work has been issued by County. 16. Orderly Termination: Upon termination or other expiration of this Contract,each Party shall promptly return to the other Parry all papers,materials,and other properties of the other held by each for purposes of execution of the Contract. In addition, each Party will assist the other Party in orderly termination of this Contract and the transfer of all aspects, tangible and intangible, as may be necessary for the orderly, non-dismptive business continuation of each Party. 17. Notices: Any and all notices permitted or required to be given hereunder shall be deemed duly given (1) upon actual delivery,if delivery is by hand;or(2)upon delivery by the United States mail if delivery is by postage paid File Folder 5i7018 13 Page 13 of 27 Attachment C registered or certified return receipt requested mail. Each such notice shall be sent to the respective Party at the address indicated below or to any other address as the respective Parties may designate from time to time. For Contractor. Name: Time Warner Telecom Holdines,Inc. Address: 7 Mason City,State,Zip Code: Irvine.CA 92618 Attn: Manuel Lopez Title: Account Manager Phone: (949) 672-0319 For County: County of Orange CEOQTIFtmmce&Contracts 1501 E.St.Andrew Place,2e'Floor Santa Ana,CA 92705 Attn: Diana Banzet Deputy Pmcbasing Agent 714-567-7506 714-567-5195 Fax 18. Incorporation: This Contract, its Attachments A through C, and blank form Exhibit I are attached hereto and incorporated by reference and trade a part of this Contract. 19. Usage: No guarantee is given by the County to the Contractor regarding usage of this Contract. Usage figures,if provided, are approximate, based upon the last usage. The Contractor agrees to supply services and/or commodities requested,as needed by the County of Orange, at prices listed in the Contract,regardless of quantity requested. 20. Audits(Inspections: Contractor agrees to permit the County's Auditor-Controller or the County's authorized representative(including auditors from a private auditing firm hired by the County)access during normal working hours to all books,accounts,records,reports,files,financial records,supporting documentation,including payroll and accounts payable/receivable records,and other papers or property of Contractor for the purpose of auditing or inspecting any aspect of performance under this Contract. The inspection andfor audit will be confined to those matters connected with the performance of the Contract including, but not limited to, the costs of administering the Contract. The County will provide reasonable notice of such an audit a inspection. The County reserves the right to audit and verify the Contractor's records before payment is made. Contractor agrees to maintain such records for possible audit for a minimum of four years after final payment, unless a longer period of records retention is stipulated under this Contract or by law. Contractor agrees to allow interviews of any employees or others who might reasonably have information related to such records. Further, Contractor agrees to include a similar right to the County to audit records and interview staff of any subcontractor related to performance of this Contract. Should the Contractor cease to exist as a legal entity,the Contractor's records pertaining to this Contract shall be forwarded to the surviving entity in a merger or acquisition or,in the event of liquidation,to the County's Project Manager. 21. Conditions Affecting Work: The Contractor shall be responsible for taking all steps reasonably necessary to ascertain the nature and location of the work to be performed under this Contract and to know the general File Folder 547018 14 Page 14 of 27 Attachment C conditions which can affect the work or the cost thereof. Any failure by the Contractor to do so will not relieve Contractor from responsibility for successfully performing the work without additional cost to the County. The County assumes no responsibility for any understanding or representations concerning the nature, location(s) or general conditions made by any of its officers or agents prior to the execution of this Contract, unless such understanding or representations by the County are expressly stated in the Contract. 22. Contractor's Expense: The Contractor will be responsible for all costs related to photo copying, telephone communications, fax communications, and parking while on County sites during the performance of work and services under this Contract uNess otherwise specified. The County will not provide free parking for any service in the County Civic Center. 23. Gratuities: The Contractor warrants that no gratuities, in the form of entertainment, gifts or otherwise, were offered or given by the Contractor or any agent or representative of the Contractor to any officer or employee of the County with a view toward securing the Contract or securing favorable treatment with respect to any determinations concerning the performance of the Contract. For breach or violation of this warranty,the County shall have the right to terminate the Contract,either in whole or in part,and any loss or damage sustained by the County in procuring on the open market any goods or services which the Contractor agreed to supply shall be home and paid for by the Contractor. The rights and remedies of the County provided in the clause shall not be exclusive and are in addition to any other rights and remedies provided by taw or under the Contract. 24. Authorization Warranty: The Contractor represents and warrants that the person executing this Contract on behalf of and for the Contractor is an authorized agent who has actual authority to bind the Contractor to each and every term, condition and obligation of this Contract and that all requirements of the Contractor have been fulfilled to provide such actual authority. 25. News/Information Release: The Contractor agrees that it will not issue any news releases in connection with either the award of this Contract or any subsequent amendment of or effort under this Contract without first obtaining review and written approval of said news releases from the County through the County's Project Manager. 26. County of Orange Child Support Enforcement Requirements Blank Form (Exhibit 1) In order to comply with the child support enforcement requirements of the County of Orange, within ten days of notification of selection of award of Contract but prior to official award of Contract,the selected Contractor agrees to furnish to the Deputy Purchasing Agent: A. In the case of an individual Contractor, his/her name, date of birth, Social Security number, and residence address; B. In the case of a Contractor doing business in a form other than as an individual,the name,date of birth, Social Security number, and residence address of each individual who owns an interest of 10 percent or more in the contracting entity; C. A certification that the Contractor has fully complied with all applicable federal and state reporting requirements regarding its employees;and D. A certification that the Contractor has fully complied with all lawfully served Wage and Earnings Assignment Orders and Notices of Assignment and will continue to so comply. The required certification is listed in Exhibit I. A blank Exhibit I is attacbed hereto. Failure of the Contractor to timely submit the data and/or certifications required may result in the Contract being awarded to another Contractor. In the event a Contract has been issued,failure of the Contractor to comply with all federal, state, and local reporting requirements for child support enforcement or to comply with all lawfully FBe Foider547018 15 Page 15 of 27 Attachment C served Wage and Earnings Assignment Orders and Notices of Assignment shall constitute a material breach of the Contract. Failure to cure such breach within 60 calendar days of notice from the County shall constitute grounds for termination of the Contract. 27. Errors and Omissions: All reports, files and other documents prepared and submitted by Contractor shall be complete and shall be carefully checked by the professionals) identified by Contractor as project manager and key personnel attached hereto, prior to submission to the County. Contractor agrees that County review is discretionary and Contractor shall not assurne that the County will discover errors and/or omissions. If the County discovers any errors or omissions prior to approving Contractor's reports, files and other written documents,the reports, files or documents will be returned to Contractor for correction. Should the County or others discover errors or omissions in the reports,files or other written documents submitted by Contractor after County approval thereof, County approval of Contractor's reports, files or documents shall not be used as a defense by Contractor in any action between the County and Contractor, and the reports,files or docu cents will be returned to Contractor for correction. File FOlder547018 16 Page 16 of 27 Attachment C Signature Page The Parties hereto have executed this Contract on the dates shown opposite their respective signatures below TIME WARNER TELECOM HOLDINGS,INC.*: DATE: j D r 2��t7(p Signature: &+ // t g)tv2..fGli— Print Name: CT rtu rh Uohf-eP/' Title: &RI-0val f('e5tz(en+- $y tr wt�t DATE: l o ��.? 86 Signature:_ OF/✓rl IOw"rp Print NarneA f h� 1 2 i Title: C T t_� .1F„6p,94.64v"OL— ftde v1<E f .-S''I b si -r • If the contracting party is a corporation, (2)two signatures are required as further set forth in this paragraph. The first signature shall be: (a) the Chairman of the Board; b) the President; or c) any Vice President. The second signature shall be a)the Secretary;or 2)any Assistant Secretary;or 3)the Chief Financial Officer; or d) any Assistant Treasurer. ........................................................................................... COUNTY OF ORANGE A political subdivision of the State of California By Date It f t 4 L(p Approved by Board of Supervisors on: (]lo Approved as to form,County Counsel County of Orange,California By: � Date: 2.t.-P - d File Folder 547018 17 Page 17 of 27 Attachment C ATTAcHmENT A SCOPE OR WORK WR)E AREA NETWORK TRANSPORT SERVICES A. SERVICE LEVELS Contractor shall provide transport services with high-availability and minimum downtime. Service Level Agreements (SLAB) are a critical component of any transport service to assure that negotiated services levels ate contractually adhered to by the Contractor. The County requires a minimum of 99.99% up time on all proposed circuits. The Contractor will ensure that available bandwidth or throughput will not drop below 90%of declared circuit capacity at any time on any proposed circuit. The Contractor will further produce reports to the County showing bandwidth utilization and availability of throughput on an hourly,daily,weekly, monthly,and yearly basis. These reports will be available on-line and allow for on-demand bandwidth reporting by County staff at any time. Scheduled impact to transport services needs to be documented and sent to designated County contacts five(5) working days in advance. The County must be notified within 30 minutes of any outages through a pre-defined County escalation plan. All SLAB will be actively enforced by the County. Fee reductions specified in Attachment B may result from Contractor's failure to notify County of planned and unplanned service interruptions, reduction in available circuit capacity,delays in repair or any other disruption of service without regard to the County's actual monetary loss from such disruptions. B. SECURITY The County Enterprise Network requires that Contractor provides detailed documentation outlining security polices/procedures,'Best Practices",and technologies that are implemented in the proposed WAN Transport Service offering to increase security and mitigate risk C. NETWORK AND TRANSPORT MONITORING Contractor shall provide a method for on-line monitoring by the County of all proposed circuits. The Contractor should be able to provide reports on real-time and historical bandwidth utilization.All reports will include the ability to show detail on an hourly, daily, weekly, monthly and yearly basis. Additionally, the Contractor may provide a portal or secure web access for the County to monitor circuit up-time and outages.A secure Internet-accessible web she is preferred for County access to Contractor transport statistics and information. D. TRANSITION.TESTING AND ACCEPTANCE All services must be in place no later than January 15,2007, The County will require the Data Center(1400 S.Grand Ave.)and 301 The City Drive South,Orange,be operational by December 15,2006,to insure smooth integration with existing County infrastructure. These dates may be change upon mutual agreement of the Parties. No payments to the Contractor shall be made until the County has determined that a successful testing of each circuit and integration with County network is operational. Contractor will provide a comprehensive testing and acceptance plan for each site and each circuit type. At a minimum the County expects these testing and acceptance criteria to include pre-acceptance uptine periods and throughput validation methodologies. E. ADDITIONAL CONTRACTOR REQUIREMENTS 1. Contractor shall provide full,24 hours by 7 days a week,support including telephone support(i.e.help desk)and maintenance of communication links,if applicable. 2. Contractor will coordinate ordering, shipping and delivery of equipment and materials to any installation site, in the event such materials are required. 18 File U&r54'1018 Page 18 of 27 Attachment C 3. Contractor will provide any necessary equipment to initiate new services at a given location. 4. County shall receive at minimum a one-year warranty on all new parts and equipment. F. COUNTY TELECOMMUNICATIONS PROCEDURES All telecommunication and data services projects in County facilities fall under the direct authority of the office of the County Information Officer, Deputy CEO for County Executive Officeftnformation Technology(CEO/1T). No work is to be performed at any County owned or occupied facility without direct authorization from County Project Manager.Additionally,no consultation or engineering of any sort will occur directly between the Contractor and any other County agency regarding any County facility without the involvement,coordination and pre-approval of County Project Manager. The County uses a Telephone Services Request (TSR) for all services requested from Contractor. The TSR will indicate the installation address and the billing address,which may or may not be the same. No work is to be performed at any County owned or occupied facility without a signed TSR from the County Project Manager.Additionally,no consultation or engineering of any son will occur directly between the Contractor and any agency regarding any County facility without the involvement, coordination, and written approval from County Project Manager. Failure to comply with these instructions can lead to termination of the Contract. Additionally, if the Contractor installs any transport circuits without a signed TSR from the County Project Manager at any County facility, said performance will be deemed outside the scope of this Contract and the service shall not be compensated. If Contractor is unsure of a course of action or whether to undertake any service including but not limited to installation,repair, deletion,or termination of any transport circuit,prior to providing any service Contractor's Project Manager shall notify, in writing, the County Project Manager for consultation and written approval or denial of the work. All services are to be coordinated using the outlined methods, and through the County designated Project Manager only. The County Project Manager my provide a minimum of thirty(30)days notice for all requests to terminate or delete any transport circuit. The only acceptable method to proceed with work is an authorized TSR. As part of this Contract, direct technical contact procedures and access shall be established for 24 hour/7 day week operational response by the Contractor. The Telephone Service Request(TSR)process is as follows: • The County Project Manager is responsible for processing and tracking the TSR and will be the single point of contact for any service. • The County Project Manager will notify the Contractor of a pending TSR. • The Contractor will pick up the TSR from the County Project Manager and arrive at the job site on the due date to perform the work The TSR can be faxed or e-mailed to the Contractor upon request. • The Contractor will cover all the work to be done with the designated County contact and be prepared to answer any questions. • Upon arrival at the County location,the Contractor will be escorted to the work location and will perform all the necessary work in a professional and workman like manner and notify the contact when work is completed. • The Contractor will explain all the work that was done and have the County depar[mentlagency contact signoff on the TSR as completed. • The Contractor will term the signed TSR and all ancillary documentation associated with the TSR to the County Project Manager. • The Contractor shall submit an invoice to County indicating labor and material used and referencing a TSR and Contract number.The invoice will include a copy of the TSR with the signature of the County contact that accepted the work performed. The Contractor will invoice the County within 60 days of the accepted completion of the project. File Folder 547018 19 Page 19 of 27 Attachment C Contractor shall submit a list of all employees who will be directly performing tasks associated with this Contract to the County Project Manager.Contractor employees may be subject to a background check performed by the County's Sheriff Department and Probation Department, if required to obtain access at certain locations. Cost for any background check will be the responsibility of the Contractor. l:changes occur to this list an updated list will be submitted, in writing, by the Contractor, to the County Project Manager. At no time will unauthorized Contractor employees perform any task associated with this Contract.If this occurs the Contractor will be notified that they have not complied with the terms of this Contract and the Contract may be terminated. File Folder547018 20 Page 20 of 27 Attachment C ATTACHMENTS COST/COMPENSATION FOR CONTRACTOR SERVICES 1. COMPENSATION This is a fixed fee Contract between the County and Contractor for services provided in Attachment A, Scope of Work in accordance with the pricing specified below. 2. INITIAL SERVICE PURCHASE Contractor shall supply the following service: Circuit Type From Address To Address Qty Total Total Label Setup Monthly Fiber-14 1 Gi E 1400 S.Grand Ave 301 The City Dr.South 1 $2,000 $SOW Fiber-6 I 1 Gi E 1400 S.Grand Ave 1275 Berkley Ave 1 $2,000 MOW Fiber-9 1 1 Gi E 1400 S.Grand Ave 840 Eckhoff 1 $2,000 $5,000 Fiber-2- I 1 Gi E 1400 S.Grand Ave 1770 N.Broadway 1 $2000 $5,000 Fiber-3 1 Gi E 1400 S.Grand Ave 1001 S.Grand Ave 1 $2,000 $5,000 Fiber-4 1 Gi E 1400 S.Grand Ave 4601 Jamboree Rd 1 $2,000 $5,000 Fiber-7 1 Gi E 1400 S.Grand Ave 1535 E.Orangewood 1 $2,000 $5,000 Fixed/Tiered 1400 S.Grand Ave $0 $5,000 EIS w/Gig <Gigabit Internet circuit> Port Total 1 $14,000 $40000 Note: *Additional County locations may be added and/or deleted to this schedule during the term of the Contract. The Contract may be amended,as set forth in paragraph C,to add circuit locations. Fee reduction for Contractor's failure to notify County of planned and unplanned service interruptions, reduction in available circuit capacity,delays in repair or any other disruption of service,that result in an individual circuit not meeting the 99.99%updme for any sequential thirty(30)day period: Per Service Outage Percentage Credit Less than 1 minute(9999%availability) No credit 1 minute up to 4 hours 5%of the MRC 4 hours up to 8 hours 10% of the MRC 8 hours up to 12 hours 15% of the MRC 12 hours up to 16 hours 20%of the MRC 16 hours up to 24 bours 35%of the MRC 24 hours or greater 50%of the MRC 3. PAYMENT TERMS Initial Set-up: Invoices for initial set-up are to be submitted in arrears, unless otherwise directed in this Contract, upon the satisfactory completion and acceptance of testing of the entire system. If service does not meet acceptance specifications herein,Contractor assumes all costs and may not seek reimbursement from County. Morality Service: Invoices for monthly services are payable monthly, in arrears, unless otherwise directed in this Contract. Payment for monthly services,as specified in Attachment B,shall begin upon the date of acceptance of the system 21 Filefbldv549018 Page 21 of 27 Attachment C Contractor shall reference Contract number on invoice. Payment will be net 30 days after receipt of an invoice in a format acceptable to the County of Orange and verified and approved by the agency/department and subject to routine processing requirements. The responsibility for providing an acceptable invoice rests with the Contractor. Incomplete or incorrect invoices are not acceptable and will be returned to the Contractor for correction. Billing shall cover services and/or goods not previously invoiced. The Contractor shall reimburse the County of Orange for any monies paid to the Contractor for goods or services not provided or when goods or services do not meet the Contract requirements. Payments made by the County shall not preclude the right of the County from thereafter disputing any items or services involved or billed under this Contract and shall not be construed as acceptance of any part of the goods or services. 4. PAYMENTANVOICING INSTRUCTIONS:The Contractor will provide an invoice on Contractor's letterhead for services rendered.Each invoice will have a number and will include the following information: 1. Contractor's name and address 2. Contractor's remittance address(if different from 1 above) 3. Name of County agency department(if county agency is actual customer name) 4. County Contract number(to be added as part of the billing address) S. Service clarets) 6. Circuit Label 7. Service description S. Total Invoices and support documentation are to be forwarded to: County of Orange—CEOIIT 1501 E.Saint Andrew Place,Suite 200 Santa Ana,CA 92705 Attn:Accounts Payable Cowry of Orange Sxuw m RF 14MDOODOX 22 AttachmenrH Page 22 of 27 Attachment C ATCACHMENT C STATFING PLAN 1. Prirnary Staff to perfornn contract duties Name 02ssirlcatic,D/Deftrtation Joe Wirthman City Operations Director Lance Rubio Operations Manager Rachael Preston Project Manager Jose Cruz Central Office Engineer Jan Van Graunin en Plant Manager Scott Sanducci Network Technician II Gerardo Issasi Network Technician II 2. Alternate Staff(for use only if primary staff are not available) Name Classilleation/Designation Richard Guard City Operations Director of LA Myles Nanbu Vice President of Operations Steven Sutter Network Technician III Do gFaloon O ation Manager Reggie Roberts Central Office En inear Eart VanWe Plant Manager Jose Centeno NetworkTeclntician III Substitution or addition of Contractor's key personnel in any given category or classification shall be allowed only with prior written approval of the County'a Project Manager. File Folder347018 23 Page 23 of 27 Attachment C EXHIBIT I COUNTY OF ORANGE CHILD SUPPORT ENFORCEMENT CERTIFICATION REQUIREMENTS A. In the case of an individual Contractor,his/her name,date of birth, Social Security number,and residence address: Name: D.O.B: Social Security No: Residence Address: B. In the case of a Contractor doing business in a form other than as an individual, the name, date of birth, Social Security number, and residence address of each individual who owns an interest of 10 percent or more in the contracting entity: Name: D.O.B: Social Security No: Residence Address: Name: D.OB: Social Security No: Residence Address: (Additional sheets may be used if necessary) C. A certification that the Contractor has fully complied with all applicable federal and state reporting requirements regarding its employees;and D. A certification that the Contractor has fully complied with all lawfully served Wage and Earnings Assignment Orders and Notices of Assignment and will continue to so comply. "I certify that is in full compliance with all applicable federal and state reporting requirements regarding its employees and with all lawfully served Wage and Earnings Assignment Orders and Notices of Assignments and will continue to be In compliance throughout the tern of Contract with the County of Orange. I understand that failure to comply shall constitute a material breach of the Contract and that failure to cure such breach within 10 calendar days of notice from the County shall constitute grounds for termination of the Contract. Authorized Signature Name Title Fuc Wro 547018 24 Page 24 of 27 Attachment C Contra[t Llaaslfleellon TIME WARNEROTELECOM NE" CONNECTING YOUR BUSINESS TO MORE BUSINESS" ❑Tamsmambrnmaarommlmnrmm Ox..aww44.rt.m.mmRN Dau: nnsD. Amount R268006 Internet Service Order Form ThNSwicc Onferi...Rd W.and Eefl.Ehn,uponei2..Wlon Ey Tme Warner THemm Holdings Inc. CTVJC9 eM CaunryofOEnRc PLugomv). 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Joseph Deleon "now, 7W567-737d Fee 714.5575195 Mein Tern Comadl 24a7 Help Deal W Oh-pall NatwOlk Engineer no. 71443 2449 Fax Nona Main TernC staa12 Dame Lolefs Pnpm 714-795-0345 Fee 71*51lil Man Tern COMe413 Wei statement none 714-757-5101 Fa[ 714 5 675 062 Maintenance carded l 24.7 Help Oaf ask far Gal Nepal Enginew Red. 714531-2449 Fes None Mainlenatw Cmlazl2 Donned Lomrl2 Pnpm 714-796.6345 Fax 714-567-51)62 - ..sa. ."' - (1) Pmdugt Name mite Nt9t1J (2) BandwidM' IDeNpsled (3) Conitatmalon Point roYoitt (4) VLAt4Ta9Service Unlbnlletl Saggetl Service(lI7S)': (5) SafoN¢Porla O10MPdt =10N4PeM1 O1000MPM Total all RecuMng Charge $ -35;DOO.bO; TOW CMrgelRemrtl Charge 8 Total Non-Remnirg Chage 'd 101:15MI) Tool Termimeem Charge Se.1fil - Del Twm(Mo) WMonths DepastlAmount d - Desiredlnshw Dma Veda. 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Shensi Maintenance Windows:Time Warner Telecom may perform routine netvrork meinbnance between 1i01 AM and d:W AM local lime,Mondaythrough Sunday.Time Warner Telecom may extend or schedule mulsional windows If necessary, Cusmmwappmves and atroptends Native ImIlIuwded NIANISfomge Tmncpod Service Ober,MIUI fWlyi ryomles the associated the Masser Sernce gprwment mlemed lg on MaN page and the V K Tag Service Dead, Desired lnslallaYon Dale for each order is subject to Time Wamer Telemn intemal provisioning intervata,whLrn are spmficb service type,quantity,laalun entl ava0abfiy Provisioning interval begins afterrars¢ldeseined oNerand any other required documentation,The Time Wismar Telecom Aesount person will provide a fimn due dab to customer upon musipt ofall required information. Customerarnaedges Patiheindividualexe 6u tNs OMerm Cusses aft behalf has full and emphasis aulhaiy,ID bind Customer. 71hf0o Tnoe WamerTWcom Holiff.,i nc eoammee eounnyoromnge sgnmwa: sienw.re: u2 o C. :i& Neashoralh D.Cross eens.1, otif gala aarunt Twa: W I General Mahawr boo: Mandl Contract M,a1n air 0a1e: net.: }} )y Qln Seminal Manual J L.W Version 2.4 Page 26 of 27 Attachment C TIME WARN ER,4TELL• OM Native LAN Service OrderFGrm Elite MAN vv en.URI Ctty I anne County O.casa. unsy 0nn .coup Onn Coup Pon Lac S DnrcYortnel LcoNn1 1 OnNel London I 2 OrvNel Lanai 2 CnM.d LomWnN 4 DmNel Interloper. Oa'Jml 0 Yml Pon5ne090rWm0N ING.Part 1%0MB dIXOMPon tOWM 1%0MPNI 1M0 Mb ttWMPOM1 I IVI LoaMPMCmmNN EI'na N1AN I I M..LAN I am Ni I FJAe NIAN FM1wisel Addrazs 44006.GraMAwnua I3%TU. pr{va SauN 1275N.&M1n Aw WeckM1oa Sl Cal can 6eNaMe onval M. IXane SMe.21P CA CA Clk CA DesecAmrFlr Idea. 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Lucas WSM Lure.WSM L.W6M LIxedMISM CUNanx Premiss Eq .Hm6grtan CPE 2-IDer 2-fber 2-fader 24ber PORTMRC S Hall 2 6Ns0 Ir Yd.O] 5 M.00 SmvinlBantlwiEN MRC 5 1,SMA0 E IMD.W E lA%AD E 1=00 NRC me E 100101 S 1WD.[O E 1.0%.01 S 1.dM.00 Ty"2MRC 5 5 5 5 TMII E E S 5 LM1an _Lllerpe S S E E Termination CM1am bee M54 See MSA See MSA SeeIAA Need More leendl7 Inew,7.1.1.Side aIwM WN MI Me I.s.Mgs.XLeuMn Mil an Me ACS DMIA Codes at 14W S.GnrM Aentod.Me 7 Neepa lu Me N1eE III as dead;2� ,MSI Wo County. Orude WAN CmIreall F 14M DWM10WW0227. SlanGeN Winenance Wndoxs:Tme Wem.,Telemm mry pWe-roWlne network Madrunence MMen lY%AM lnd H00 AM local tlmq Monday Ynougb Sunday.Thant Wnmr Tel.—may expaM or achandi Will aml val Ilneeessarv. CVSNmY appvux anopspMI Me Nike Ad/FxRMM NUNISIwage Tronall del oNb,AdH(YIN papal 2tt5 Neapocind MUVf Sol lgRemeM Nened re M Main Men an Me VIAN Tag Rrvia DNer. OJr[d llrsbM4pn Date fore3N 0Ntt Usufll�mTime WanerT2 mmlmel goviabnegNWaU,whRil are spsT bmrvicefry±,plerlily,Rotlon antl avalW0111ry. rrrwled Ing In2rv.beghsaRen m¢Iq W slpllpi oNvantl any oUerrea,Ilretl dcameAmOm.The Tme VlamaTeHrvn YrmnlpamnwlOpmNde a frm EueN@ b osSme umn mxgtofall ryulrtE nlomu[bn. Grsmmer arknlaMat9es Cet MelMMtlusl veoMly tllisONsrm Nsrtwn'z trlmYM1esfiYl enS mmpYR aYlkpMy 1p bFd filsMns. /^/�� Man' Cuammer o® II Iti& varaianza _... ,... .. .,_ .. .. . �..,,.. Page 27 of 27 ADMINISTRATION COMMITTEE Neeing Dare TOBA.Of Dir. 12/10/14 12/17/14 AGENDA REPORT Item Number Item Number a Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Lorenzo Tyner, Director, Finance and Administrative Services SUBJECT: COOPERATIVE PROCUREMENT WITH THE U.S. GENERAL SERVICES AGREEMENT (GSA) GENERAL MANAGER'S RECOMMENDATION Authorize purchases of information technology computer, peripheral equipment and services using the U.S. General Services Agreement (GSA) IT Schedule 70 commencing December 22, 2014 through December 31, 2019, for a total amount not to exceed $500,000, in accordance with Ordinance OCSD-44, Section 2.03(B) Cooperative Purchases. SUMMARY In order to properly maintain and repair Orange County Sanitation District's (OCSD) facilities the Information Technology division has needs to purchase computers and peripheral parts and supplies. Such item requirements have been forecasted based upon projected obsolete equipment, historical product failure rates, and new items to address general capacity, redundancy, or security. Since technology changes so frequently, it is not appropriate to stock these items in OCSD's warehouses. OCSD desires to select the U.S. General Services Agreement (GSA) IT Schedule 70, as a provider of computer and peripheral equipment based on contract pricing, breadth of product offerings, availability and the ease of using online ordering systems. Large capital items will be procured through the bidding process. PRIOR COMMITTEE/BOARD ACTIONS N/A ADDITIONAL INFORMATION The U.S. General Services Agreement IT Schedule 70 is the largest, most widely used acquisition vehicle in the federal government. Schedule 70 is an indefinite delivery/indefinite quantity (IDIQ) multiple award schedule, providing direct access to products, services, and solutions from more than 5,000 certified industry partners. As one of the leading national government purchasing cooperative, providing government Page 1 of 2 procurement resources and solutions to local and state government agencies, school districts (K-12), higher education institutes, and nonprofits looking for the best overall supplier government pricing. The program is available to all State of California governmental entities (State agencies, cities, counties, special districts, school districts, universities, etc.) that expend public funds for the acquisition of both goods and services. CEQA N/A BUDGET / PURCHASING ORDINANCE COMPLIANCE This request complies with authority levels of the Sanitation District's Purchasing Ordinance. The items purchased through the process are budgeted in the yearly Joint Operating Budget. ATTACHMENT The following attachment(s) may be viewed on-line at the OCSD website (www.ocsd.coml with the complete agenda package: • U.S. General Services Agreement (GSA) IT Schedule 70 Page 2 of 2 70--General Purpose Commercial Information Technology Equipment, Software and Serv...Page 1 of 18 ® 70--General e Purpose Commercial Information Technology Equipment, Software and Services Solicitation Number: FCISJB-980001-B Agency: General Services Administration Office: Federal Acquisition Service(FAS) Location:Center for IT Schedule Operations(QTFA) Notice Type: Original Posted Date: Combined Synopsis/Solicitation April 30,2014 Posted Date: Response Data: April 30,2014 - Original Response Date: Archiving Policy: - Manual Archive Original Archive Dale: Archive Date: Original Set Aside: N/A Set Aside: N/A Classification Code: 70—General purpose information technology equipment NAICS Code: 541 --Professional,Scientific,and Technical Services/541512--Computer Systems Design Services Synopsis: Added:Apr 30,2014 1:46 pm Modified: Dec 02,2014 2:30 pm Track Changes No Description Provided Solicitation 1 Type:Solicitation Posted Date:April 30,2014 ------------------------------------------------------------------------------------------------------------ htlo://sws.asa.aov/sws-search/viewSolDocument.do? method=view&solNum=RkNJU iKQi05ODAwMDEtQ ==&solRefmsh=MzM=&solDoc=MDkwMDAOMml4MmJm JiazZC Description:01 -Read Me First ------------------------------------------------------------------------------------------------------------ htlo://sws.asa.aov/sws-search/viewSolDocument.do? method=view&solNum=RkNJU 1 KQi05ODAwMDEtQ ==&solRefmsh=MzM=&solDoc=MDkwMDAOMmi4MmQ z wN, Description:02-Solicitation ------------------------------------------------------------------------------------------------------------ htto://sws.asa.aov/sws-search/viewSolDocument.do? method=view&solNum=RkNJU iKQi05ODAwMDEtQ ==&solRefmsh=MzM=&solDoc=MDkwMDAOMmi4MmQ z wN Description:03-SF1449 https://www.fbo.gov/index?s=opportunity&mode=form&id=d24cd9e270944b554632f37... 12/02/2014 70--General Purpose Commercial Information Technology Equipment, Software and Serv...Page 2 of 18 ----------------------------------------------------------------------------------------------------------- http://sws.asa.aov/sws-search/viewSolDmument.do? method=view&solNum=RkNJU iK i050DAwMDEt ==&solRefresh=MzM=&solDoc=MDkwMDAOMm14Mm z xMi Description:04-Regulations Incorporated by Reference ----------------------------------------------------------------------------------------------------------- http://sws.asa.aov/sws-search/viewSolDmument.do? method=view&solNum=RkNJU iK i050DAwMDEt ==&solRefresh=MzM=&solDoc=MDkwMDAOMm14MmJm )DUM Description:05-Past Performance Evaluation http://sws.asa.aov/sws-search/viewSolDocu ment.do? method=view&solNum=RkNJU iK i05ODAwMDEt ==&solRefresh=MzM=&solDo�MDkwMDAOMml4Mm GVkN Description:06-Small Business Sub Contracting Plan ------------------------------------------------------------------------------------------------------------ http://sws.asa.aov/sws-search/viewSolDmument.do? method=view&solNum=RkNJU iK i05ODAwMDEt ==&solRefresh=MzM=&solDo�MDkwMDAOMm14Mm mFIZ/ Description: 07-Proposal Price List Preparation ........... ... ............................................................................................ hnv://sws.asa.00v/sws-search/viewSolDmument.do? method=view&solNum=RkNJU lK i05ODAwMDEt ==&solRefresh=MzM=&solDo�MDkwMDAOMmi4MmJmI 42QvZ Description:08-Commercial Sales Practice Format(CSP-1) ........................................................................................................... http://sws.asa.aov/sws-search/viewSolDmument.do? method=view&solNum=RkNJU lK i05ODAwMDE1 ==&solRefresh=MzM=&solDoc=MDkwMDAOMmi4MmJm DIJO Description:09-Agent Authorization Letter .... ..._- .......... ..................................................................................... http://sws.asa.00v/sws-search/viewSolDmument.do? method=view&solNum=RkNJU lK i05ODAwMDEt ==&solRefresh=MzM=&solDo�MDkwMDAOMmi4MmJm ITY10 Description: 10-Letter of Supply Template ........................................................................................................... htto://sws.asa.aov/sws-search/viewSolDocu ment.do? method=view&solNum=RkNJU iKQi05ODAwMDEt ==&solRefresh=MzM=&solDoc-MDkwMDAOMm14Mm GZ'N Description: 11 -SCA Wage of Determinations Index htty,//sws.asa.aov/sws-search/viewSolDocu ment.do? method=view&solNum=RkNJU lKQi05ODAwMDEt ==&solRefresh=MzM=&solDoc-MDkWMDAOMml4Mm mJZF Description: 12-Sample Labor Category Matrix htty,//sws.asa.aov/sws-search/viewSolDmument.do? method=view&solNum=RkNJU 1KQi050DAwMDEt ==&solRefresh=MzM=&so1Do�MDkwMDAOMml4Mm mRIV� Description: 13-Critical Information Specific to Schedule 70 ------------------------------------------------------------------------------------------------------------ http://sws.gs .gov/sws-search/viewSolDmument.do? method=viewZi &solicitationNumber=RkNJU 1 KQi05ODAwMDEtQ ==&refreshNumber--MzM=&scheduleNumb r-MD Description:All Files Point of Contact(s): Customer Service IT ACQUISITION CENTER,2200 CRYSTAL DR..CP 4.ARLINGTON,VA 22202 https://www.fbo.gov/index?s=opportunity&mode=form&id=d24cd9e270944b554632f37... 12/02/2014 70--General Purpose Commercial Information Technology Equipment, Software and Serv...Page 3 of 18 ALL FILES Solicitation 1 11 Apr 30,2014 01 -Read Me First 02-Solicitation 03-SF1449 04-Regulations Incom( 05-Past Performance E 06-Small Business Sul 07-Proposal Price List 08-Commercial Sales I 09-Agent Authorizatior 10-Letter of Supply Tei 11 -SCA Wage of Datei 12-Sample Labor Cate 13-Cdgcal Information All Files Opportunity History • Original Synopsis Combined SynopsislSolicitation Apr 30,2014 1:46 pm • Changed Apr 30,2014 1:46 pm Solicitation • Award Apr30,2014 4:00 pm • Award May 01,2014 10:15 am • Award May 01,2014 10:45 am • Award May 01,2014 3:15 pm • Award May 02,2014 10:45 am • Award May 02,2014 10:45 am • Award May 02,2014 12:00 pm • Award May 02,2014 https://www.fbo.gov/index?s=opportunity&mode=form&id=d24cd9e270944b554632f37... 12/02/2014 70--General Purpose Commercial Information Technology Equipment, Software and Serv...Page 4 of 18 12:30 pm • Award May 05,2014 8:15 am • Award May 06,2014 1:30 pm • Award May 06,2014 3:45 pm • Award May 07,2014 12:30 pm • Award May 08,2014 7:45 pm • Award May 09,2014 5:30 pm • Award May 12,2014 6:30 am • Award May 12,2014 9:15 am • Award May 12,2014 4:15 pm • Award May 16,2014 8:15 am • Award May 16,2014 1:00 pm • Award May 18,2014 7:45 pm • Award May 19,2014 11:00 am • Award May 19,2014 1:00 pm • Award May 20,2014 3:15 pm • Award May 23,2014 10:30 am • Award May 23,2014 3:15 pm https://www.fbo.gov/index?s=opportunity&mode=form&id=d24cd9e270944b554632f37... 12/02/2014 70--General Purpose Commercial Information Technology Equipment, Software and Serv...Page 5 of 18 • Award May 23,2014 3:45 pm • Award May 23,2014 4:15 pm • Award May 28,2014 2:15 pm • Award May 28,2014 3:00 pm • Award May 29,2014 12:15 pm • Award May 29,2014 1:15 pm • Award May 29,2014 1:15 pm • Award May 30,2014 1145 am • Award May 30,2014 2:00 pm • Award May 30,2014 7:30 pm • Award Jun 02,2014 6:45 am • Award Jun 02,2014 12:15 pm • Award Jun 03,2014 3:15 pm • Award Jun 04,2014 1:00 pm • Award Jun 05,2014 9:15 am • Award Jun 05,2014 3:45 pm • Award Jun 06,2014 4:30 pm • Award https://www.fbo.gov/index?s=opportunity&mode=form&id=d24cd9e270944b554632f37... 12/02/2014 70--General Purpose Commercial Information Technology Equipment, Software and Serv...Page 6 of 18 Jun 06,2014 8:00 pm • Award Jun 09,2014 9:45 am • Award Jun 09,2014 2:30 pm • Award Jun 10,2014 5:30 pm • Award Jun 11,2014 10:15 am • Award Jun 11,2014 12:30 pm • Award Jun 11,2014 2:45 pm • Award Jun 12,2014 6:30 am • Award Jun 16,2014 9:15 am • Award Jun 16,2014 2:16 pm • Award Jun 17,2014 7:16 am • Award Jun 17,2014 10:16 am • Award Jun 17,2014 11:01 am • Award Jun 18,2014 3:02 am • Award Jun 18,2014 11 16 am • Award Jun 19,2014 12:01 pm • Award Jun 20,2014 7:00 am • Award Jun 24,2014 https://www.fbo.gov/index?s=opportunity&mode=form&id=d24cd9e270944b554632f37... 12/02/2014 70--General Purpose Commercial Information Technology Equipment, Software and Serv...Page 7 of 18 7:00 am • Award Jun 24,2014 7:15 am • Award Jun 24,2014 4:45 pm • Award Jun 26,2014 5:46 pm • Award Jun 27,2014 11:00 am • Award Jul 03,2014 3:16 pm • Award Jul 04,2014 1:30 pm • Award Jul 05,2014 8:30 pm • Award Jul 07,2014 8:00 am • Award Jul 07,2014 5:15 pm • Award Jul 09,2014 1:45 pm • Award Jul 10,2014 8:45 am • Award Jul 10,2014 9:00 am • Award Jul 10,2014 4:45 pm • Award Jul 11,2014 8:00 am • Award Jul 11,2014 2:00 pm • Award Jul 11,2014 3:15 pm • Award Jul 11,2014 3:30 pm https://www.fbo.gov/index?s=opportunity&mode=form&id=d24cd9e270944b554632f37... 12/02/2014 70--General Purpose Commercial Information Technology Equipment, Software and Serv...Page 8 of 18 • Award Jul 14,2014 1:15 pm • Award Jul 14,2014 2:45 pm • Award Jul 14,2014 2:46 pm • Award Jul 16,2014 1:00 pm • Award Jul 17,2014 12:16 pm • Award Jul 17,2014 6:30 pm • Award Jul 18,2014 9:00 am • Award Jul 18,2014 5:30 pm • Award Jul 21,2014 3:16 pm • Award Jul 21,2014 8:00 pm • Award Jul 23,2014 3:28 pm • Award Jul 24,2014 12:45 pm • Award Jul 24,2014 1:01 pm • Award Jul 25,2014 12:45 pm • Award Jul 25,2014 3:45 pm • Award Jul 25,2014 4:30 pm • Award Jul 28,2014 2:15 pm • Award https://www.fbo.gov/index?s=opportunity&mode=form&id=d24cd9e270944b554632f37... 12/02/2014 70--General Purpose Commercial Information Technology Equipment, Software and Serv...Page 9 of 18 Jul 30,2014 6:00 pm • Award Jul 31,2014 8:15 am • Award Jul 31,2014 9:16 am • Award Jul 31,2014 9:45 am • Award Jul 31,2014 1145 am • Award Jul 31,2014 4:45 pm • Award Jul 31,2014 5:00 pm • Award Aug 01,2014 9:45 am • Award Aug 01,2014 1:45 pm • Award Aug 01,2014 3:45 pm • Award Aug 04,2014 1:19 pm • Award Aug 06,2014 8:15 am • Award Aug 06,2014 5:31 pm • Award Aug 07,2014 8:00 am • Award Aug 07,2014 2:15 pm • Award Aug 07,2014 4:00 pm • Award Aug 07,2014 5:45 pm • Award Aug 11,2014 https://www.fbo.gov/index?s=opportunity&mode=form&id=d24cd9e270944b554632f37... 12/02/2014 70--General Purpose Commercial Information Technology Equipment, Software and S... Page 10 of 18 11:15 am • Award Aug 11,2014 2:00 pm • Award Aug 12,2014 7:45 pm • Award Aug 13,2014 11:15 am • Award Aug 14,2014 5:15 pm • Award Aug 19,2014 12:15 pm • Award Aug 19,2014 9:15 pm • Award Aug 20,2014 8:30 am • Award Aug 20,2014 4:45 pm • Award Aug 21,2014 4:30 pm • Award Aug 21,2014 4:32 pm • Award Aug 22,2014 11:15 am • Award Aug 22,2014 12:45 pm • Award Aug 22,2014 4:32 pm • Award Aug 22,2014 5:15 pm • Award Aug 22,2014 6:45 pm • Award Aug 25,2014 7:00 am • Award Aug 25,2014 3:30 pm https://www.fbo.gov/index?s=opportunity&mode=form&id=d24cd9e270944b554632f37... 12/02/2014 70--General Purpose Commercial Information Technology Equipment, Software and S... Page 11 of 18 • Award Aug 25,2014 3:30 pm • Award Aug 27,2014 5:00 pm • Award Aug 29,2014 1145 am • Award Aug 29,2014 7:45 pm • Award Aug 30,2014 11:30 am • Award Aug 30,2014 4:15 pm • Award Sep 03,2014 2:30 pm • Award Sep 03,2014 4:15 pm • Award Sep 04,2014 3:15 pm • Award Sep 04,2014 5:15 pm • Award Sep 05,2014 12:00 pm • Award Sep 05,2014 12:45 pm • Award Sep 05,2014 3:00 pm • Award Sep 08,2014 12:30 pm • Award Sep 09,2014 8:45 am • Award Sep 09,2014 3:45 pm • Award Sep 09,2014 5:45 pm • Award https://www.fbo.gov/index?s=opportunity&mode=form&id=d24cd9e270944b554632f37... 12/02/2014 70--General Purpose Commercial Information Technology Equipment, Software and S... Page 12 of 18 Sep 09,2014 8:45 pm • Award Sep 10,2014 9:30 am • Award Sep 10,2014 9:45 am • Award Sep 10,2014 10:00 am • Award Sep 11,2014 4:45 pm • Award Sep 12,2014 9:15 am • Award Sep 12,2014 9:30 am • Award Sep 16,2014 9:15 am • Award Sep 17,2014 9:00 am • Award Sep 17,2014 1:15 pm • Award Sep 17,2014 4:30 pm • Award Sep 17,2014 4:45 pm • Award Sep 18,2014 3:45 pm • Award Sep 18,2014 3:45 pm • Award Sep 19,2014 11:15 am • Award Sep 22,2014 3:15 pm • Award Sep 23,2014 2:00 pm • Award Sep 23,2014 https://www.fbo.gov/index?s=opportunity&mode=form&id=d24cd9e270944b554632f37... 12/02/2014 70--General Purpose Commercial Information Technology Equipment, Software and S... Page 13 of 18 3:15 pm • Award Sep 24,2014 10:30 am • Award Sep 24,2014 2:45 pm • Award Sep 24,2014 6:00 pm • Award Sep 25,2014 4:45 pm • Award Sep 26,2014 7:00 am • Award Sep 26,2014 3:45 pm • Award Sep 26,2014 8:15 pm • Award Sep 30,2014 12:15 pm • Award Sep 30,2014 12:30 pm • Award Sep 30,2014 2:45 pm • Award Sep 30,2014 3:15 pm • Award Sep 30,2014 6:15 pm • Award Oct 01,2014 8:15 am • Award Oct 02,2014 8:45 am • Award Oct 02,2014 1:15 pm • Award Oct 02,2014 4:15 pm • Award Oct 03,2014 2:45 pm https://www.fbo.gov/index?s=opportunity&mode=form&id=d24cd9e270944b554632f37... 12/02/2014 70--General Purpose Commercial Information Technology Equipment, Software and S... Page 14 of 18 • Award Oct 03,2014 5:15 pm • Award Oct 03,2014 5:45 pm • Award Oct 03,2014 7:30 pm • Award Oct 06,2014 9:32 am • Award Oct 06,2014 9:45 am • Award Oct 06,2014 1:00 pm • Award Oct 06,2014 2:45 pm • Award Oct 06,2014 4:15 pm • Award Oct 07,2014 10:45 am • Award Oct 09,2014 8:30 am • Award Oct 09.2014 1145 am • Award Oct 14,2014 2:30 pm • Award Oct 15,2014 3:00 pm • Award Oct 15.2014 4:30 pm • Award Oct 15,2014 7:15 pm • Award Oct 16,2014 1:15 pm • Award Oct 16,2014 3:00 pm • Award https://www.fbo.gov/index?s=opportunity&mode=form&id=d24cd9e270944b554632f37... 12/02/2014 70--General Purpose Commercial Information Technology Equipment, Software and S... Page 15 of 18 Oct 17,2014 10:15 am • Award Oct 17,2014 10:16 am • Award Oct 17,2014 12:15 pm • Award Oct 17,2014 4:00 pm • Award Oct 20,2014 7:00 am • Award Oct 20,2014 12:15 pm • Award Oct 21,2014 11:00 am • Award Oct 21,2014 3:15 pm • Award Oct 22,2014 2:00 pm • Award Oct 24,2014 2:00 pm • Award Oct 24,2014 4:15 pm • Award Oct 24,2014 6:45 pm • Award Oct 28,2014 11:45 am • Award Oct 29,2014 6:00 am • Award Oct 29,2014 10:00 am • Award Oct 29,2014 3:00 pm • Award Oct 29.2014 4:30 pm • Award Oct 29,2014 https://www.fbo.gov/index?s=opportunity&mode=form&id=d24cd9e270944b554632f37... 12/02/2014 70--General Purpose Commercial Information Technology Equipment, Software and S... Page 16 of 18 4:45 pm • Award Oct 29,2014 4:45 pm • Award Oct 30,2014 9:00 am • Award Oct 30,2014 10:15 am • Award Oct 30,2014 12:15 pm • Award Oct 30,2014 1:45 pm • Award Oct 30,2014 2:30 pm • Award Oct 30,2014 4:15 pm • Award Oct 31,2014 12:15 pm • Award Oct 31,2014 6:00 pm • Award Oct 31,2014 9:00 pm • Award Nov 01,2014 2:45 pm • Award Nov 03,2014 2:00 pm • Award Nov 04,2014 8:45 am • Award Nov 04,2014 10:30 am • Award Nov 04,2014 11:45 am • Award Nov 05,2014 11:00 am • Award Nov 06,2014 11:33 am https://www.fbo.gov/index?s=opportunity&mode=form&id=d24cd9e270944b554632f37... 12/02/2014 70--General Purpose Commercial Information Technology Equipment, Software and S... Page 17 of 18 • Award Nov 06,2014 6:15 pm • Award Nov 06,2014 8:45 pm • Award Nov 10,2014 6:15 am • Award Nov 10,2014 1:30 pm • Award Nov 10,20U 6:15 pm • Award Nov 14,2014 6:45 am • Award Nov 14,2014 11:15 am • Award Nov 14,2014 12:45 pm • Award Nov 17,2014 1:45 pm • Award Nov 18,2014 11:30 am • Award Nov 21,2014 10'.15 am • Award Nov 21,2014 10:45 am • Award Nov 21,2014 11:30 am • Award Nov 24,2014 9:15 am • Award Nov 24,2014 5:33 pm • Award Nov 25,2014 7:45 am • Award Nov 25,2014 11:30 am • Award https://www.fbo.gov/index?s=opportunity&mode=form&id=d24cd9e270944b554632f37... 12/02/2014 70--General Purpose Commercial Information Technology Equipment, Software and S... Page 18 of 18 Nov 25,2014 2:30 pm • Award Nov 25,2014 4:15 pm • Award Nov 25,2014 4:18 pm • Award Nov 25,2014 5:00 pm • Award Nov 26,2014 9:30 am • Award Nov 26,2014 11:15 am • Award Dec 01,2014 9:15 am • Award Dec 01,2014 10:00 am • Award Dec 01,2014 11:00 am • Award Dec 01,2014 4:45 pm • Award Dec 01,2014 4:48 pm • Award Dec 01,2014 9:00 pm • Award Dec 02,2014 10:15 am • Award Dec 02,2014 2:30 pm https://www.fbo.gov/index?s=opportunity&mode=form&id=d24cd9e270944b554632f37... 12/02/2014 ADMINISTRATION COMMITTEE Neeing Dare TOBA.Of Dir. JVJO114 12/17/14 AGENDA REPORT Item Number Item Number s Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Lorenzo Tyner, Director, Finance and Administrative Services SUBJECT: COOPERATIVE PROCUREMENT ON THE CITY OF RICHLAND CONTRACT NO. 13-068 GENERAL MANAGER'S RECOMMENDATION Authorize purchases of information technology consulting services using the City of Richland, Washington cooperative agreement #13-068 with ShareSquared Inc. Commencing January 5, 2015 through June 30, 2016, for a total amount not to exceed $300,000, in accordance with Ordinance OCSD-44, Section 2.03(B) Cooperative Purchases. SUMMARY In order to properly maintain and repair Orange County Sanitation District's (OCSD) SharePoint site the Information Technology division has needs to purchase consulting services. Such item requirements have been forecasted based upon projected project demands as well as expected troubleshooting. OCSD desires to select the cooperative agreement #13-068 as established by the City of Richland, Washington as the lead agency, naming ShareSquared Inc. as the primary provider of SharePoint professional and implementation of SharePoint-based Enterprise Content Management (ECM) solutions based on contract pricing, breadth of service offerings, availability and technical expertise. PRIOR COMMITTEE/BOARD ACTIONS N/A ADDITIONAL INFORMATION OCSD is upgrading the Microsoft SharePoint environment to the current version and implementing the SharePoint records and document management solution. Consulting services with an experienced implementer is required to upgrade and maintain the software environment as well as consulting with the OCSD business units to establish their records management framework. Page 1 of 2 CEQA N/A BUDGET / PURCHASING ORDINANCE COMPLIANCE This request complies with authority levels of the Sanitation District's Purchasing Ordinance Compliance. The items purchased through the process are budgeted in the yearly Joint Operating Budget. ATTACHMENT The following attachment(s) may be viewed on-line at the OCSD website (www.ocsd.coml with the complete agenda package: Cooperative Agreement between City of Richland and ShareSquared, Inc. Page 2 of 2 Return b Mende Report Contract No. 13-068 Riehlantl AGREEMENT BETWEEN CITY AND CONSULTANT THIS AGREEMENT,entered into this 2nd day of October, 2013 ("Effective Date") by and between the City of Richland,505 Swift Aye., Richland,Washington,(hereinafter referred to as the "City), and ShareSquared. Inc., 2155 Verdugo Bhd #33, Montrose, CA91020 (hereinafter referred to as the"Consultant). WITNESSEfH: 1) SCOPE OF WORK a) The Consultant shall fumish sermcesand products as designated in this Agreement and E)hibits hereto, all of which are hereby incorporated by reference. The Consultant shall proHde professional and implementation services for a SharePoint-based Enterprise Content Management(ECK solution, b) The following eldlibit(s)are attached hereto and made a part of this Agreement: () Exhibit A Detailed Scope of Work (i) Fxhibit B:RFP 13-33 Proposal response submitted by ShareSquared, Inc.. dated August23, 2013 c) This Agreementoonsists of this Agreement,the above referenced ExIiibits and other documents listed below. These form the entire Agreement and all areas fulty apart of the Agreement as if attached to this Agreement orrepeated herein. In the event of a conflict between documents the order of precedence will be the order listed below. An enumeration of the Agreement documents is set forth below: (i) City of Richland Agreement No. 13-068 (i) EtdtibitA Detailed Scope of Work (iii) E1dlibit B:RFP 13-33 proposal response submitted by ShareSqu ared, Inc. dated August 23, 2013 (iy City Richland RFP 13-33 2) GENERAL REQUIREMENTS a) The Consultant shall attend status, progress, and coordination meetings with the designated Cityof Richland project team. If additional meetings are requested,the Citywill proddethe Consultant sufficient notice prior to those meetings requiring Consultant participation. RevWV 2a13 Page 1 of 13 Contract No. 13-068 b) The Consultants hall prepare a monthlyprogress report if requested,in a form approved by the City,that will outline in written and graphical form the various phases and the order of performance of the work in sufficient details so that the progress of the work can easily be evaluated. 3) TIME FOR BEGINNING AND COMPLETION The Consultant shall not begin anywork under the terms of this Agreement until authored in writing bythe City.Cons ullant agrees to use best efforts to complete all work described under this Agreement by W rch 31,2014. 4) PAYMENT a) The City shall pay the Consultant an amount not to exceed three hundred forty-five thousand nine hundred seventyseven dollars($345,977)to complete the services detailed under this Agreement and accompanying Exhibits. Payment shall be made on a"time and materials"basis. Payment as idertifed in this section shall be full compensation for all services rendered and forall labor, products,travel and incidentals necessaryto complete the work specified herein. b) Invoices not in dispute bythe Cilywi l l be paid net thirty(30)days and shall referencethe contract number and/or purchase order applicable to the work.The invoice shall provide sufficient detail on the work being billed and include detailed receipts for any invoices. c) Invoices will be submitted on a biweekly basis and shall be payable for all work completed to date. d) Pre-approved travel, meals and lodging will be reimbursed at cost and onlywhen consultant travels at least 50 miles per one waytrip.Reimbursable expenses are limited to the following: coach airfare, ground transportation (tab, shuttle, car rental), hotel accommodations at the government rate,personal or company vehicle use at the then- current federal mileage rate,and meals at the current federal per-diem meal allowance or up to the currentfederal per-diem with detailed receipts,no alcohol,and a 20% maxmum gratuity. e) Reimbursement for reproduction services,phone, postage, andothersimilar expenses is not authorised under this Agreement. f) The Consultant will allow access to the City,the State of Washington,the Federal Grantor Agency,the Comptroller General of the United States, or any of their duly authorized representatives to any books,documents, papers,and records which are directly pertinent to the specific contract forthe purpose of making audit, examination, excerpts, and transcriptions. Unless otherwise provided,said records must be retained for three years from the date of receipt of final payment. If any l itigation,claim, or audit arising out of, in connection with,or relating to this contract is initiated before the expiration of the three-year period,the records shall be retained until such litigation, claim, or audit involving the records is completed. Rev0427-2013 Page 2 of 13 Return b Mende Report Contract No. 13-068 5) INDEPENDENT CONTRACTOR The Consultant, and any and all employees of the Consultant or otherpersons engaged in the performance of anywork orservices required of the Consultant under this Agreement, are independent contractors and shall not be considered employees of the City. Anyandallclaims that arise at anytime underany Workers'Compensation Acton behalf of said employees or other persons while so engaged, and any and all claims made by third parry as a consequence of any actor omission on the part of the Consultant's employees orolher persons engaged in anyof the work orservices required to be provided herein, shall bathe sole obligation and responsibility of the Consultant. 6) OWNERSHIP OF DOCUMENTS Al designs,drawings, specifications,documents,reports and other work products prepared pursuant to this Agreement, will become the property of the City upon payment to the Consultant of the fees asset forth in this Agreement. The City acknowledges the Consultant's plans and specifications,including all documents on electronic media, as instruments of professional services.The plans and specifications prepared under this Agreement shall become the property of the City upon completion of the services and payment in full of all payment due to the Consultant. The City may make orpernit to be made any modifications to the plans and specifications without the priorwritten authorization of the Consultant.The City agrees to waive any claim against the Consultant arising from any unauthorized reuse of the plans and specifications,and to indemn'dyand hold the Consultant harmless from anyclaim, I iabilityor costa rising or allegedly arising out of any reuse of the plans and specifications bythe Cityor its agent not authorized by the Consultant. 7) TERMINATION a) This Agreement maybe terminated byeither party upon thirty(30)days' written notice. In the event the City terminates this Agreement, the City shall pay the Consultant for the hourly s ervices performed and any approved product purchases made on behalf of the City up until such termination becomes effective. b) The work underthis Agreement may be suspended upon written notice. If anywork covered bythis Agreement shall be suspended or abandoned bythe Citybefore the Consultant has completed the assig ned work the City s hall pay the Consultant for the hourlyseroces performed and anyapproved product purchases made on behalfof theCity up until such suspension or abandonment becomes effective. 8) DISPUTE RESOLUTION a) The City and the Consultant agree to negotiate in good faith for a period of thirty(30)days from the date of notice of all disputes between them prior to exercising their rights under this Agreement, or under law. Page 3 of 13 R ev 0929-2013 Contract No. 13-068 b) All disputes between the City and the Consultant not resolved by negotiation betweenthe parties maybe arbitrated onlybymutual agreement ufthe Cityand the Consultant. Ifnot m utualy agreed to resole the claim by arbitration,the claim will reached by legal action. 9) DEBARMENT CERTIFICATION The Cc nsuttantcertifies that neitherthe Consultant nor its principals are presently debarred, suspended, proposed for debarment, declared ineligible, or voluntarilyewAuded from participating in this Contract by any Federal or State department or agency. Further,the Consultant agrees not to enterinto any arrangements or contracts related to completion of the work contemplated under this Agreementwith anyparlythat is on the "General Service Administration List of Parties Excluded from Federal Procurement or Non-procurement Programs"which can be found at: www.sam.covand http:/Awww ini wa covdTradesLicensing/PrevWage/AwardingAgencies/defaultasp 10) VENUE APPLICABLE LAW AND PERSONAL JURISDICTION In the eventthat eitherpartydeems itnecessaryto initiate a legal action to enforce any right or obligation underthis Agreement,the parties agreethat anysuch action shall be initiated in the Superior Court of the State of Washington situated in Benton County.The parties agree that all questions shall be resolved byapplication of Washington law, and that the parties to such action shall have the right of appeal from such decision of the Superior Court in accordance with the laws of the State of Washington. The Consultant hereby consents to the personal jurisdiction of the Superior Court of the State of Washington situated in Benton County. 11) ATTORNEYS FEES The parties agree that should legal action be necessary to enforce any of the provisions of this Agreement,that the prevailing partywill be awarded its reasonable attorneys fees and costs in action, including costs and attorneys fees on appeal if appeal is taken. 12) INSURANCE The Consultantshall procure and maintain for the duration of the Agreement insurance against claims for injuries to persons ordamage to propertywhich mayarise from or in connection with the performance of the work hereunder by the Consultant, its agents, representatives, or employees. a) No Limitation.Consuhanfs maintenance of insurance as required bythis Agreement shall not beconstrued to Iimdthe liabilityof the Consultant to the coverage provided by such insurance, or otherwise limit the Citys recourse to any remedy ava i lable at law or in equity. b) Minimum Scooeof Insurance.Consuhantshall obtain insurance of the types described below: R"0a7-2013 Page 4 of 13 Return to Agenda Reporl Contract No. 13-068 1. Automobile Liability insurance covering all owned.non-owned,hired and leased vehicles.Coverage shall be written on Insurance Services Office (ISO)form CA 0001 or substitute form providing equivalent liability coverage. If necessary, the policyshall be endorsed to provide contractual liability coverage. 2. Commercial General Liability insurance shall bewritten on ISO occurrence form CG 00 01 ora substitute form providing equivalent coverage and shall cover I iability arising from premises,operations,independent contractors and personal injuryand advertising injury.The City shall be named as an insured under the Consultant's Commercial General Liability insurance policywith respect to the work performed for the City. 3. Workers'Comoensation coverage as required by the Industrial Insurance laws of the State of Washington. 4. Professional Liability insurance appropriate to the Consultant's profession. c) Mnimum Amounts of Insurance.Consultant shall maintain the following insurance limits: 1. Automobile Liabildv insurancewith a minimum combined single limit for bodily injury and property da m age of$1,000,000 per accident. 2. Commercial General Liability insurances hall bewritten with limits no less than $1,000,000 each occurrence, $2,000,000 general aggregate. 3. Professional Liability insurance shall be written with limits no less than $1,000,000 per claim and $1,000,000 poliryaggregate limit. d) Olherinsurance Provisions. The Consultant's insurance coverage shall be primary insurance with respect to the City.Any insurance, self-insurance, or insurance pool coverage maintained bythe City s hal l be excess of the Consultant's insurance and shall not contribute with it. e) Acceptabilityof Insurers. Insuranceislo be placed with insurers with a currentAM best rating of not less than AMI. f) Verification ofCoverape.Consultant shall furnish the Citywith original certificates and copyofthe amendatory endorsements evidencing the insurance requirements ofthe Consultant before co mmencement of the work including, but not necessarily limited,to the additional insured endorsement. g) Notice of Cancellation.The Consultant shall provide the City with written notice of any policy cancellation within two (2)business days of Cons ulta nt's receipt of such notice. Page 5 of 13 Rev09-2]-2013 Contract No. 13-068 h) Failure to Maintain Insurance. Failure on the part of the Consultant to maintain the insurance as required shall constitute a material breach ofcontract,upon which the City may,aftergiving five(5)business days'notice to the Consultant to correct the breach, im mediatelytenm inate the contract or,at its discretion,procure or renew such insurance and payanyand all premiums in connection therewith,with anysums so expanded to be repaid to the Cityon demand,or at the sole discretion of the City, offset against funds due the Consultant from the City. 13) INDEMNIRCATION IHOLD HARMLESS a) Consultant shall defend,indemnify,and hold the City, its officers, officials, employees and volunteers harmless from anyand all claims, injuries, damages, losses or suits including attomeyfees,arising out of or resullingfrom the acts, errors or omissions of the Consultant or the Consultant's employees or agents in performance of this Agreement,except for injuries and damages caused bythe sole negligence of the City. b) Should a courtof competent jurisdiction determine that this Agreement is subject to RCW 4.24.115,then,in the event of liability for damages arising out of bodily injury to persons or damages to propertycaused byor resulting from the concurrent negligence of the Consultant and the City, its officers, officials, employees, and volunteers,the Consultant's liability,including the dutyand costto defend,shall be only to the extent of the Consultant's negligence. It is further specifically and expressly understood that the indemnification provided herein constitutes the Cons ultanfs waiver of immunity under Industrial Insurance,Title 51 RCW,solelyfor the purposes of this indemnification. This waiver has been mutually negotiated bythe parties.The provisions of this section shall survive the expiration or term ination of this Agreement. 14) STANDARD OF CARE The professional services will be furnished in accordance with the care and skill ordinarily used by members of the same profession practicing under similar conditions at the same time and in the same locality. 15) SUCCESSORS OR ASSIGNS All of the terms, conditions and provisions hereof shall inure to the benefit of and be binding upon the parties hereto,and their respective successors and assigns; provided, however, that no assignment of the Agreement shall be made without written consent of the parties to the Agreement. 16) EQUAL OPPORTUNITY AGREEMENT Consultant shall not discriminate against any employee orjob applicants for work under this Agreement for reasons of race, sex nationality, religious creed, or sexual orientation. 17) PARTIAL INVALIDITY Any provision of this Agreement which is found to be invalid or unenforceable shall be ineffective to the extent of such invalidity or unenforceability, and the invalidity or unenforceabililyof such provision shall not afkctthevalidityorenforceabililyof the remaining provisions hereof. Rev09-27-2013 Page 6 of 13 Return b Mende Report Contract No. 13-068 18) AMENDMENT CLAUSE All amendments must be in writing and be approved and signed bybolh parties. 19) CHANGE IN LAW The parties hereto agree that in the event that legislation is enacted or regulations are promulgated,or a decision of court is rendered, or any interpretive policy or opinion of any govemmental agency charged with the enforcement of any such law or regulation is published that affects or may affect the legality of this Agreement or any part thereof or materialyand adverselyaffects the ability of either parlyto perform its obligations orreceive the benefits intended hereunder("Adverse Change in Law),then within fourteen (14) days fol lowing written notice byeither parlyto the other party of such adverse change in law,the parties shall meet to negotiate in good faith an amendment which will carry out the original intention of the parties to the event possible in I ight of the adverse change in law.If,despite good faith attempts,the parties cannot reach agreement upon an amendment within s ivy (60)days after commencing negotiation,then this Agreement maybe terminated byeither party as of the earlier of: (i)the effective date of the adverse change in law, or(ii)the e)piration of period of sivy(60)days following written notice of termination provided by one paryto the other. 20) CONFIDENTIALITY In the course of performing under this Agreement, Consultant, including its employees, agents or representatives,may receive,be a)posed to,or acquire confidential information. Confidential information may include, but is not limited to, patient information,contract terms,sensitive employee information,or proprietarydata in anyform,whetherwritten,oral, or contained in anycomputer database or computer readable form.Consultant shall: t)not disclose confidential information exept as permitted bythis Agreement; (it)only permit use of such confidential information byemployees,agents and representatives having a need to know in connection with performance under this Agreement; and (III) advise each of its employees, agents, and representatives of their obligations to keep such information confidential. Confidential Information shall not include information or materials that (i)were generally known to the public as of the effective date of this Agreement;or(ii) become generally known to the public after the effective date of this Agreement byresultofan act oromission other than an act or omission of Consultant:or(iii)were rightfully known to Consultant prior to disclosure by Customer; or (iy are or were disclosed by Customer to a third party generalywithout restriction on disclosure;or(y the Consultant lawfullyreceived from a third parry without that third partys breach of agreement or obligation of trust; or (4) are independently developed by Consultant. 21) CHANGES OFWORK a) When required to do so,and without anyaddifionalcompensalion, the Consultant shall m a ke such changes and revisions in the completed work of this Agreement as necessary to correct or revise any significant errors,omissions of items asspecified in the e>dhibits Page 7 of 13 Rev09-27-2013 Contract No. 13-068 hereto,or other appreciable deficiencies in the design,drawings, specifications, reports, and other similar documents or work product which the Consultant is responsible for preparing or furnishing under this Agreement Forpurposesofdarity,sigrrficantemors and appreciable deficiencies are defined herein to mean errors ordefciencies that if allowed to remain,undermine the effected use or functionalityof the SharePoint-based Enterprise Content Management(ECM1 solution prodded bythe Consultant,or otherwise adversely affect the essential purpose of this agreement. b) Should the Cityfrnd it desirable for its own purposes to have previously s atisfactorily corn pleted work or parts thereof changed or revised, the Consultant shall make such revisions as directed bythe City.This works hall be considered as E)dra Work and will be paid for as herein provided under Section 22. E)dra Work. 22) EXTRA WORK The Citymay desire to have the Consultant perform work or render additional services within the general scope of this Agreement.Such work shall be considered as E#ra Work and will be specified in a written supplement to this Ag reemenl which will setforth the nature ofthe scope, schedule for additional work,additional fees and the method of payment.Work under a supplemental Agreement shall not proceed until authorized in writing bythe City. 23) INTER-LOCAL AGREEMENT It is theintentof this Agreement to make available workof similar nature and scope to other local government entities of the Slate of Washington,orany other state as long as individual statelawallows entitiesto enlerintoan Inter-local agreement,bymutual agreementwith the successful bidder and properlyauthorized inter-local purchasing agreements as provided for by RC W 39.34,which details the right to purchase the same equipment,product or service at the prices quoted and for the period of the contract,in addition to orders from the City of Richland. The Cityof Richland does not accept anyresponsibility for purchase orders issued by other public agencies. Rev OB-27-2or3 Page 8 of 13 Return to Agenda Reporl Contract No. 13-068 IN WITNESS WHEREOF,the parties hereto have a)ecuted th is Agreement as of the dayand year firstabo%e written. CITY OF RICHLAND, WASHINGTON CONSULTANT� D 1� CYNTFtWp-. JOHN ON Signature City Mat ger Damd Krualov/Mananina Director Printed Name &Title ATTEST: /J -la'blc. C�b✓�iCvt✓y ShareSauared Inc. �r NMCIA HOPKINS City Clerk 2155 Verdugo BIW.#33 Montrose CA 91020 APPROVED AS TO FORM: Address `1^ Ion K ' Phone: 800.445.1279 A00 HEATHER D. KINTZLEY Email: DavW&ShareSauared com City Attomey R.v O9-27-2013 Page 9 of 13 Contract No. 13-068 B(HIBIT A: Detailed Scope of Work The purpose ofthis Scope of Work is to have ShareSquared, Inc. perform the following professional services and deliverthe specified products. I. Establish City of Richland Enterprise SharePoint2013 Deployment Plan 1. Promde tech nical leadership and expertise in establishing the Enterprise SharePoint 2013 Deployment Plan and overall system architecture for a fleuble, scalable ECM solution. 2. Promde an Information, Logical, and Physical Architecture Plan and recommendation that addresses SharePoint govemance and'taxonomyas well as an overarching SharePoint 2013 Deployment Plan. 3. Provide a detailed breakdown of all labor costs associated with installing,configuring, and deploying a test and production Enterprise SharePoint2013 environmentas presaibed in the Deployment Plan documentation. 4. Provide a detailed breakdown of time,materials,and all costs associated with implementing the followi ng third party software in the Cityof Rich land's SharePoi nt environment: • Collabware CLM Standard Edition • KnowledgeLake Imaging,Unify,Capture,and Connect for SharePoint • Arx Cosign Connector for SharePoint 5. Remew the current ECM solution and provide recommendation and cost estimates to migrate Enterprise content to Share Point enHronment. If additional software and/or hardware are needed to accomplish content m igration,ShareSquared, Inc.will supply applicable details. II.SharePoint Implementation 1. Design,install,setup,configure,and document Enterprise SharePoint2013 infrastructure in accordance with Mcros oft best practices. 2. Work with the Cityof Richland to design and implement a backup and recoverystrategy. 3. Monitor and troubleshoot hardware/software installation in conjunction with Cityof Richland Information Technology(IT)staff. 4. Provide detailed documentation of installation and configuration. Rev0427-2073 Page 10 of 13 Rd,,.l A tl R d Contract No. 13-068 5. Execute testing and validation of Enterprise SharePoint2013 deployment and resolution of all identified risks and issues prior to system launch date. 6. Upon completion of SharePointimplenrentation,acceptance criteria will be reviewed by the City of Richland IT staff and ShareSquared, Inc.to ensure that all project requirements have been met,all deliverables are operational and working as elpected per deployment plan,and support is transitioned and accepted byCityof Richland IT staff. III.Third Party Product Integration with SharePoint 1. Work with City of Richland IT staff to install and configure Collabware CLM in the SharePoint environmem according to vendorbest practices and recommendations. Configure test and production environments and run pilot to ensuretesting and quality assurance is performed to identity rislrs,software bugs,and any system shodcomings prior to going live. If additional software a ndlor hardware are needed to fu Ily i m plement solution,ShareSquared,Inc.will supply applicable details. 2. Workwith City of Richland IT staff to install and configure Knowledgelake Imaging, Unify, Capture,and Connect in the SharePoint environment according to vendor best practices and recommendations. Configuretest and production environments and run pilot to ensure testing and quality assurance is performed to iden*risks,software bugs,and anysystem shortcomings prior to going live. If additional software and/or hardware are needed to fullyimplementsolution,ShareSquared,Inc.will supply applicable details. 3. Workwith City of Richland IT staff to install and configure Arx CoSign in the SharePoint environment according to vendor best practices and recommendations. Configuretest and production environments and run pilot to ensure testing and quality assurance is performed to identify risks,software bugs,and any system shortcomings prior to going live. If additional s oflware and/or hardware are needed to fully implement solution, ShareSquared, Inc.will supply applicable details. IV. Project Support and Training 1. Develop overarching project plan that can be used tofu l ly im plement the SharePoint 2013 platform according to the City of Richland's business requirements. Thisproject plan must include the third party product integration with a list of prioritized tasks, required human, physical,and financial resources,and projected scheduleltimeline. Page 11 of 13 Rev Og-27-2013 Contract No. 13-068 2. Recommend and educate City of Richland IT staff in SharePoint development and configuration tasks,as well as integration with the above-stated 3"party products. This work can be done via onsite vis its or remote assistance,as agreed upon by both parties. a. During the project duration,provide Cityof Richland IT staff with best practice reviews and recommendations. V. Initial Phase—Schedule of Deliverables 1. ShareSquared,Inc.s hall,byJanuary 31,2014,the SharePoint 2013 platform will be fully im plemented including the third party product integrations with Collabware, Knowledge Lake,and Cosign in the production environment provided however that there are no project delays attributable to the City. 2. ShareSquared,Inc.shall byNlarch 1, 2014,complete all activities in this scope of work; deliver to the Cityof Richland all project planning and implementation documents, education and training,as well as a II appropriate knowledge transfer to fu I lys u pport the SharePoint environment provided however that there are no project delays attributable to the City. Vl. Payment Schedule 1. The City of Richland will make progress payments as setforth in section4)c)to ShareSquared, Inc.upon acceptance of the work by owner as outlined below and as set forth in Exhibit A:Scope of Work. No products shall be ordered and/or delivered without written approval of the City. Date Description Amount 11/15/13 Phase Completion—Discovery, Requirements Elicitation and $81,850 the Development and Delfveryof the SharePoint Governance Plan Template 12/02/13 Phase 2 Procurement—Metaogixsoftware for Content $10,000 Mgration 12/02113 Phase 3 Procurement—Software and Licensing for the PILOT $109,920 Implementation of Collabware CLM and Knowledgel-ake Imaging, Uni ,Ca lure,and Connectfor SharePoint 12/31/13 Phase 2 Completion—Content Mgration Professional Services $7.000 01/31/14 Phase 3 Procurement -Software and Licensing for the $118,595 Remaining Production Implementation of Collabware CLMand KnowledgeLake Imaging,Unify,Capture,and Connect for SharePoint 02/07/14 Phase 4 Procurement —ArxCosign Connectorfor SharePoint $17,112 software and licensing 0228/14 Phase 4 Completion—Digital Signature Professional Services $1,500 RmW27-2013 Page 12 of 13 Return to Agenda Reporl Contract No. 13-066 and Training EXHIBIT B: RFP 13-33 proposal response submitted by Shared Squared, Inc.. dated August23, 2013 RevM27-2013 Page 13 of 13 A �® CERTIFICATE OF LIABILITY INSURANCE 1p'01R013 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER.THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND,EXTEND OR ALTERTHE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER)S),AUTHORIZED REPRESENTATIVE OR PRODUCER,AND THE CERTIFICATE HOLDER. IMPORTANT: It the certificate holder Is an ADDITIONAL INSURED,the policy(les)must be ondomed. If SUBROGATION IS WANED,subject to the terms and conditions of the policy,certain policies may require an endorsement A statement on this cerUlIcate does not confer rights to the certficate holder in lieu of such endorsement)s). FROOUCER LOCKTON COMI MITES P 7�[ M47 SAI FELIPE.SUITE 320 J/V�P.IjE,Ean: _ _1 MlStlat HOUSTON,TX nos? EAIAR POMESS: B0 ERISIAFFORDINOCONmAOC NMCe INSURER A'ACE Amerbn knomeWe COnI a 22BB] U8URE9 INS WERE: INSPERITY.INC. least CRESCENT SPRINGS DRIVE W SURER C: KINGWOOO,T)(77339 u11Ea o: SEE BELOW NS MSURER E: NSURMF: COVERAGES CERTIFICATE NUMBER:9HMTPFRS REVISION NUMBER: THIS IS TO CERTIFYTHATTHE POLICIES OF INSURANCE LISTED BELOW WIVE SEEN ISSUED TO THE INSURED NAMED ABOVE FORTHE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT W RH RESPECT TO WHICH THIS CERTIFICATEMAYBEISSUEDORMAYPEWAIN,THEINSURANCEAFFORDEDBYTHEPOLICIESDESCRIBEDHEREINISSMECTTOA THETERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES.LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. LLm TYPEWHISUMNCE POLICY NUMBER W CYER POLICY EIP whol aeNEMLLIAB61lY FµIR OCCURRENCE Is CONMFRCNL GFHERI1tMBRT' i FR MISES Ea s CWN54MOE OCCUR MEO EI1P P.mmm amsme S PEREOWLLSAw WMIY s ffrEMLAGGREGATE It GENLMAEGIPE WTIIPPl6PER NIODLICTS COMPIOPACA s PoLEr PRO. LOC S IW IOMOBEE LMWISY C•GM _- _BPYaIE MYI ANr wro jecensynexervewPaNm4 s E,VuEDALTOS �SEWLFD eOOILYIHAXYpbaNNMLI s HWREOAUIOS �O�ED PROOAMVGE s 1 UYBaL WB aCW FACII OCCURRENCE 5 E%CESS LW CIAIMSIMOE AGGREGLTE ___ S Mal I RETEMpNs 5 AAOMFYF C PNFRWAEEI/ETBROSW LIANl1TY IWIQD13 10101=14 X WCSTAR4 N0. ADEMRONmECUEEFmv ❑ NAG . 101. NNHI f 1WO.ODO E.L OIEEASE FA FMROfEE S 1,000.000 OEECmVfq OF OPERJG R MTv El USEAEE-MUCYLMIT IS I,WOBOD s I s I y WSCRJ I OFOPEMTOMOILWATIONSIVEHKLE9 IAWNACORO 101,ACtillwvl0.vmvha SdwCu4.Y man aPata is np,inG) -SHARESOUARED,INC.(2669T00) IS INCLUDED AS A NAMED INSURED THROUGH ENDORSEMENT. SharePdnt-baseE EMerpise Cmlent Management(ECM)solution CERTIFICATE HOLDER CANCELLATION SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE UPMMMDATETNEREOF,NOTICEWILLBECE VEREDIN ACCORDANCE WRH THE POLICY PROVISIONS. City Of RkHand,WaeNlglOn ANTNOROFD REPRESENTATIVE Ric land.WA Q52 / 505 Seth WA Nmard Page 1 of 1 ®1986-2010 ACORD CORPORATION. All rights reserved. ............... .�_ e.-..on______.�_..__........i_._._.R..._.L. ....'..on i� SHARE-2 OF 10: LM AFRO CERTIFICATE OF LIABILITY INSURANCE 1 10)01/13 10101/13 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTfTUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER,AND THE CERTIFICATE HOLDER. IMPORTANT: If the cedificate holder is an ADDITIONAL INSURED,the pdicy(les) must be endorsed. If SUBROGATION IS WAIVED,subject to the terms and conditions of the Policy,certain policies may require an endorsement A statement on this cermcate does not confer rights to the certificate holder In lieu of such endorsemengs). CONt1Or PIPS ISG International410-228-6464 uisuE PfleeUCEft Liz McLeod 204 Cedar Street 410-228-7645 y NEo.Ea.410-901-0716 JNe.Nx Cambridge,MD 21613 E RILL Liz_MCLeod�RPSNns.eom Jacque Brohawn m p811gEg9 AIFOROING COYEMDE MqC• s,,oeaA:HartfOrd Casualty Insurance Co 2S424 Means, Sharesquared, Inc. MuREq e' 2155 Verdugo Blvd.#33 Montrose, CA 91020 Disuemc: Wsuam O: p3ugEIR E: Disease F: COVERAGES CERTIFICATE NUMBER: REVISION NUMBER: THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE NAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS EXCLUSIONS AND CONDITIONS OF SUCH POLICIES.LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMSeaft . LTR TWE Of IMs11MNtt POLICYNUYem PotICY FFF PCIICY FlP 11laa GENERAL WNMNY E"CNOCCURRENCE Is 1,000,00 A X cotaPRewt GENERPl LDalurr X 3OSSMUF3063 08116013 M16114 PK.ukS(E.,l 15 300,00 CIAYsiMDE X OCCUR LFD EX➢1/✓trawprwp $ 10,00 KAsoNLL.A WJURY s 1,000,00 GENERALA bu,TE Is 2,000,00 �GENL ncGREGRTE tanAwlE6PEx. PRODUCTS-ccwroP AGG f 2,00g,00 % P°ucr n MT L is ggTWI°BLEIMBIIRy caMeWED SWGtE Lam 1.000,00 A ANr MJTo F3083 OSM6113 OW16014 BOMLuRYJPNPwtme f AILONNEO SCHEDULED .us ALmOS BODILY INJURYLPtl F¢UiYR f IX N EOAUTOS X NON-OWNED _LWr6" 'ylu,3110t: -f 3 IRYmELLA ude occUR FAfIR OCCUPo1FlICE t3 EFCESSUN LWLISYtOE IAGGIDiWTE '3 OED I I REiEMIONf I 3 wes"Bas COWENSArso WcsTATLL OM 1WDFYPLOYFRS IMBYTY YIM i "T{LRyusna ANY FP�PIETORPMiNE WEFECVINE❑ IA EL EACH ACCMW 3 OPPX;FR,MEYBFR EIICLIAEm Bsindtu,InNNI ELO_IBE_AS_E FAFuPLO_ Y_FE f__ Pyyeeaa OesvEeuW OE scNPn0NOFOPERATMSI EL00UASE-PONCYOMR 3 eE3CRIPDdI OF OPEgATUMs I LOCATNN131YFleelm JAM—b ACMc 101,Mtleo,el NemNA SNaEige,Il,mre psab rgiYnq no City of Richland Nahington is added as additional insured on the General Liability coverage as respects their contract with the insured. CERTIFICATE HOLDER CANCELLATION CITYRI3 SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE City of Richland,Washington WE CCOOPANCEEN DAM THERE",WITH WE OLICY PROVISIONS. WILL BE DELIVERED IN 505 Swift Boulevard Richland,WA 99352 AGrxoe¢ep�o7 RRE>EPR�EESENTATWE n , 01988-2010 ACORD CORPORATION. All rights reserved. ACORD 25(201 DI05) The ACORD name and logo are registered marks of ACORD ADMINISTRATION COMMITTEE Neetlng Dare TOBA.Of Dir. 12/10/14 12/17/14 AGENDA REPORT Item Number Item Number 6 Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Lorenzo Tyner, Director of Finance and Administrative Services SUBJECT: WASTEWATER REFUNDING REVENUE OBLIGATIONS, SERIES 2015A GENERAL MANAGER'S RECOMMENDATION A. Adopt Resolution No. OCSD 14-XX entitled; "A Resolution of the Orange County Sanitation District authorizing the execution and delivery by the District of an Installment Purchase Agreement, a Trust Agreement, an Escrow Agreement and a Continuing Disclosure Agreement in connection with the execution and delivery of Orange County Sanitation District Wastewater Refunding Revenue Obligations, Series 2015A, authorizing the execution and delivery of such Revenue Obligations evidencing principal in an aggregate amount of not to exceed $150,000,000, approving a Notice of Intention to Sell, authorizing the distribution of an Official Notice Inviting Bids and an Official Statement in connection with the offering and sale of such Revenue Obligations and authorizing the execution of necessary documents and related actions;" and, B. That the Orange County Sanitation District Financing Corporation approve the documents supporting and authorizing the Revenue Obligations in an aggregate amount not to exceed $150,000,000 SUMMARY On December 20, 2007, the Sanitation District issued $300,000,000 of Certificates of Participation, Series 2007B (2007B COPS) to finance certain improvements to the Wastewater System. The 2007B COPS are fixed rate obligations. On August 7, 2014, the Sanitation District issued $85,090,000 of Wastewater Refunding Revenue Obligations, Series 2014A to refund a portion ($93,930,000 of maturities 2018 through 2027) of the 2007B COPS. With the recent drop in interest rates, the longer maturities of the 2007B COPS can be refunded and provide attractive savings to the Sanitation District. The outstanding amount of COP Series 2007E is currently $173,325,000 million of which $152,990,000 are subject to optional redemption prior to maturity. In November 2014, the Administration Committee and the Board authorized the General Manager to pursue a fixed rate refunding of the remaining callable 2007E COPs. Approval of the recommended actions and the associated legal documents will enable staff to complete the refunding process. PRIOR COMMITTEE/BOARD ACTIONS Page 1 of 4 November 19, 2014: Authorize the General Manager to issue new fixed rate Certificates of Participation (COP), to be referred to as Wastewater Refunding Revenue Obligations, in an amount sufficient to refund up to $152,990,000 of COP Series 2007B. September 24, 2014: Adopt Resolution No. OCSD 14-12, authorizing the execution and delivery by the Orange County Sanitation District of an Installment Purchase Agreement, a Trust Agreement and a Continuing Disclosure Agreement in connection with the execution and delivery of Orange County Sanitation District Revenue Refunding Certificate Anticipation Notes, Series 2014B, authorizing the execution and delivery of such Notes evidencing principal in an aggregate amount of not to exceed $135,000,000, approving a Notice of Intention to Sell, authorizing the distribution of an Official Notice Inviting Bids and an Official Statement in connection with the offering and sale of such Notes and authorizing the execution of necessary documents and related actions. ADDITIONAL INFORMATION The Sanitation District currently has eleven series of debt issuances outstanding in the par amount of$1.20 billion. The table below lists each issuance, the outstanding amount, and the interest rate mode. Outstanding Interest Rate Par Amount ) Mode Series 2014B CANS(4) $ 120,850,000 Fixed Rate(two-year) Series 2014A Refunding(7) 85,090,000 Fixed Rate Series 2012B Refunding() 66,395,000 Fixed Rate Series 2012A Refunding(3) 100,645,000 Fixed Rate Series 2011A Refunding()(3) 121,290,000 Fixed Rate Series 2010C(e) 157,000,000 Fixed Rate Series 2010A(5) 80,000,000 Fixed Rate Series 2009A Refunding(3) 184,090,000 Fixed Rate Series 2008B Refunding(6) 17,315,000 Fixed Rate Series 200713(5) 173,325,000 Fixed Rate Series 2007A Refunding(3) 92,385,000 Fixed Rate Total : $1,198,385,000 (1) As of December 1,2014 (2) Refunded a portion of Sense 20M (3) Refunded a portion of Sense 2003 (4) Sense 2014B are fixed two-year certificate of anticipation notes (CANS), that refunded the Sense 2013A CANS (one-year), that refunded the Senes 2012C CANS, that refunded the Senes 2011B CANS,that refunded the 2010B CANS, that refunded the Series 2009E CANS, Page 2 of 4 that refunded the 20MC CANS that were issued to refund the Series 2006 Daily Variable Rate that were supported by a weak liquidity facility bank. (5) New money debt issue (6) Series 2008E refunded the Series 1993 Synthetic Variable-to-Fixed Rate Debt issues that were supported by a failing insurance provider. Series 1993 and 1992 refunded the Series 1986 and a portion of the Series"B"COPa. (7) Refunded a portion of Series 20078 Legal Authorization and Approvals The Board of Directors and the Financing Corporation will each be required to adopt separate Resolutions to complete this refunding. A Financing Corporation is required by the structure of the Revenue Obligations and was formed in April 2000 solely to satisfy this need. The Board of Directors of the Corporation is the same as the Board of Directors of the Sanitation District and the Corporation meets after an adjournment of the OCSD Board. The OCSD Resolution authorizes the execution and delivery of certain legal documents and the execution and delivery of Wastewater Refunding Revenue Obligations, Series 2015A, evidencing principal in an aggregate amount of not to exceed $150,000,000 all as spelled out in the title as follows: "A RESOLUTION OF THE BOARD OF DIRECTORS OF THE ORANGE COUNTY SANITATION DISTRICT AUTHORIZING THE EXECUTION AND DELIVERY BY THE DISTRICT OF AN INSTALLMENT PURCHASE AGREEMENT, A TRUST AGREEMENT, AN ESCROW AGREEMENT AND A CONTINUING DISCLOSURE AGREEMENT IN CONNECTION WITH THE EXECUTION AND DELIVERY OF ORANGE COUNTY SANITATION DISTRICT WASTEWATER REFUNDING REVENUE OBLIGATIONS, SERIES 2015A, AUTHORIZING THE EXECUTION AND DELIVERY OF SUCH REVENUE OBLIGATIONS EVIDENCING PRINCIPAL IN AN AGGREGATE AMOUNT OF NOT TO EXCEED $150,000,000, APPROVING A NOTICE OF INTENTION TO SELL, AUTHORIZING THE DISTRIBUTION OF AN OFFICIAL NOTICE INVITING BIDS AND AN OFFICIAL STATEMENT IN CONNECTION WITH THE OFFERING AND SALE OF SUCH REVENUE OBLIGATIONS AND AUTHORIZING THE EXECUTION OF NECESSARY DOCUMENTS AND RELATED ACTIONS." The Resolution of the Corporation is somewhat shorter and simpler. It authorizes three actions that are similarly enumerated in the title as follows: "A RESOLUTION OF THE BOARD OF DIRECTORS OF THE ORANGE COUNTY SANITATION DISTRICT FINANCING CORPORATION AUTHORIZING THE EXECUTION AND DELIVERY BY THE CORPORATION OF AN INSTALLMENT PURCHASE AGREEMENT AND A TRUST AGREEMENT IN CONNECTION WITH THE EXECUTION AND DELIVERY OF ORANGE COUNTY SANITATION DISTRICT WASTEWATER REFUNDING REVENUE OBLIGATIONS, SERIES 2015A, AUTHORIZING THE EXECUTION AND DELIVERY OF SUCH REVENUE OBLIGATIONS EVIDENCING PRINCIPAL IN AN AGGREGATE AMOUNT OF NOT TO EXCEED $150,000,000 AND AUTHORIZING THE EXECUTION OF NECESSARY DOCUMENTS AND RELATED ACTIONS." Page 3 of 4 Timeline Since the proposed refunding is a fixed-rate debt issuance, staff is proposing to issue the refunding through a competitive sale because it is the most expeditious way to access the market and it is expected to provide the lowest interest cost for this given structure. ➢ Board approval of legal and disclosure documents December ➢ Financing Corporation approval of legal and disclosure documents ➢ Rating Agency discussions, if any ➢ Publish Notice of Intention to Sell January ➢ Marketing and Sale through a Competitive Sale Process February ➢ Closing ➢ Begin debt administration All costs involved with the refunding, including costs for Public Resources Advisory Group, serving as Financial Advisor, and Fulbright & Jaworski, serving as Special Counsel and Disclosure Counsel, will be paid from the proceeds of the new refunding issue. CEQA N/A BUDGET/PURCHASING ORDINANCE COMPLIANCE N/A ATTACHMENTS The following attachment(s) are available in hard copy and may also be viewed on-line at the OCSD website(www.ocsd.coml with the complete agenda package: • Draft District Resolution OCSD 14-XX • Draft Corporation Resolution FC-XX • Draft Trust Agreement • Draft Installment Purchase Agreement • Draft Escrow Agreement • Draft Continuing Disclosure Agreement • Draft Preliminary Official Statement • Draft Official Notice Inviting Bids • Draft Notice of Intention to Sell Page 4 of 4 Return to Mende Report DRAFT OF 12/01/14 RESOLUTION NO. OCSD 14-XX A RESOLUTION OF THE BOARD OF DIRECTORS OF THE ORANGE COUNTY SANITATION DISTRICT AUTHORIZING THE EXECUTION AND DELIVERY BY THE DISTRICT OF AN INSTALLMENT PURCHASE AGREEMENT, A TRUST AGREEMENT, AN ESCROW AGREEMENT, AND A CONTINUING DISCLOSURE AGREEMENT IN CONNECTION WITH THE EXECUTION AND DELIVERY OF ORANGE COUNTY SANITATION DISTRICT WASTEWATER REFUNDING REVENUE OBLIGATIONS, SERIES 2015A, AUTHORIZING THE EXECUTION AND DELIVERY OF SUCH REVENUE OBLIGATIONS EVIDENCING PRINCIPAL IN AN AGGREGATE AMOUNT OF NOT TO EXCEED $150,000,000, APPROVING A NOTICE OF INTENTION TO SELL, AUTHORIZING THE DISTRIBUTION OF AN OFFICIAL NOTICE INVITING BIDS AND AN OFFICIAL STATEMENT IN CONNECTION WITH THE OFFERING AND SALE OF SUCH REVENUE OBLIGATIONS AND AUTHORIZING THE EXECUTION OF NECESSARY DOCUMENTS AND RELATED ACTIONS WHEREAS, to refinance the acquisition, construction and installation of certain improvements to its wastewater system (the "Prior Project"), the Orange County Sanitation District (the "District") has heretofore purchased the Prior Project from the Orange County Sanitation District Financing Corporation (the "Corporation"), and the Corporation has heretofore sold the Prior Project to the District, for the installment payments (the "Prior Installment Payments") made by the District pursuant to the Installment Purchase Agreement, dated as of August 1, 2000 (the "Prior Installment Purchase Agreement"), each by and between the District and the Corporation; WHEREAS, to provide the funds necessary to finance the Prior Project, the District caused the execution and delivery of the Orange County Sanitation District Certificates of Participation, Series 2007B (the "Prior Certificates"), evidencing direct, undivided fractional interests in the Prior Installment Payments; WHEREAS, the District desires to refinance a portion of the Prior Project by paying and prepaying the remaining Prior Installment Payments, and the interest thereon to the date of prepayment, thereby causing all or a portion of the remaining Prior Certificates to be prepaid; WHEREAS, to provide the funds necessary to pay and prepay a portion of the remaining Prior Installment Payments, the District and the Corporation desire that the Corporation purchase the Prior Project from the District and the District sell the Prior Project to the Corporation, and that the District then purchase the Prior Project from the Corporation and the Corporation sell the Prior Project to the District, for the installment payments (the "Installment Payments") to be made by the District pursuant to an Installment Purchase Agreement by and between the District and the Corporation (such Installment Purchase Agreement, in the form presented to this meeting, with such changes, insertions and omissions as are made pursuant to this Resolution, being referred to herein as the "Installment Purchase Agreement"); 56089867.2 11411481 Return to Mende Report WHEREAS, the Corporation intends to assign without recourse certain of its rights under and pursuant to the Installment Purchase Agreement to U.S. Bank National Association, as trustee (the 'Trustee'), pursuant to a Trust Agreement by and among the Trustee, the Corporation and the District (such Trust Agreement, in the form presented to this meeting, with such changes, insertions and omissions as are made pursuant to this Resolution, being referred to herein as the "Trust Agreement'); WHEREAS, in consideration of such assignment and the execution and delivery of the Trust Agreement, the Trustee intends to execute and deliver the Orange County Sanitation District Wastewater Refunding Revenue Obligations, Series 2015A (the 'Revenue Obligations"), evidencing direct, undivided fractional interests in the Installment Payments, and the interest thereon; WHEREAS, the District desires to provide for the public sale of the Revenue Obligations; WHEREAS, a form of the Notice of Intention to Sell to be published in connection with the public offering and sale of the Revenue Obligations has been prepared (such Notice of Intention to Sell, in the form presented to this meeting, with such changes, insertions and omissions as are made pursuant to this Resolution, being referred to herein as the "Notice of Intention to Sell"); WHEREAS, a form of the Official Notice Inviting Bids to be distributed in connection with the public offering and sale of the Revenue Obligations has been prepared (such Official Notice Inviting Bids, in the form presented to this meeting, with such changes, insertions and omissions as are made pursuant to this Resolution, being referred to herein as the "Notice Inviting Bids"); WHEREAS, a form of the Preliminary Official Statement to be distributed in connection with the public offering of the Revenue Obligations has been prepared (such Preliminary Official Statement in the form presented to this meeting, with such changes, insertions and omissions as are made pursuant to this Resolution, being referred to herein as the "Preliminary Official Statement'); WHEREAS, Rule 15c2-12 promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended ('Rule 15c2-12"), requires that the underwriter thereof must have reasonably determined that the District has undertaken in a written agreement or contract for the benefit of the holders of the Revenue Obligations to provide disclosure of certain financial information and certain material events on an ongoing basis; WHEREAS, to cause such requirement to be satisfied, the District desires to enter into a Continuing Disclosure Agreement with the Trustee (such Continuing Disclosure Agreement in the form presented to this meeting, with such changes, insertions and omissions as are made pursuant to this Resolution, being referred to herein as the "Continuing Disclosure Agreement'); WHEREAS, to cause such requirement to be satisfied, the District desires to enter into a Escrow Agreement with MUFG Union Bank, N.A., as escrow agent (such Escrow Agreement in the form presented to this meeting, with such changes, insertions 56089867.2 OCSD 14-XX-2 Return to Mende Report and omissions as are made pursuant to this Resolution, being referred to herein as the "Escrow Agreement'); WHEREAS, there have been prepared and submitted to this meeting forms of: (a) the Installment Purchase Agreement; (b) the Trust Agreement; (c) the Notice of Intention to Sell; (d) the Notice Inviting Bids; (e) the Preliminary Official Statement; (f) the Continuing Disclosure Agreement; and (g) the Escrow Agreement; WHEREAS, all acts, conditions and things required by the Constitution and laws of the State of California to exist, to have happened and to have been performed precedent to and in connection with the consummation of the financing authorized hereby do exist, have happened and have been performed in regular and due time, form and manner as required by law, and the District is now duly authorized and empowered, pursuant to each and every requirement of law, to consummate such financing for the purpose, in the manner and upon the terms herein provided. NOW, THEREFORE, the Board of Directors of the District DOES HEREBY RESOLVE, DETERMINE AND ORDER: Section 1. All of the recitals herein contained are true and correct and the Board of Directors of the District (the "Board") so finds. Section 2. The Installment Purchase Agreement, in substantially the form submitted to this meeting and made a part hereof as though set forth herein, be and the same is hereby approved. The Chair of the Board, and such other member of the Board as the Chair may designate, the General Manager of the District, the Director of Finance and Administrative Services of the District, and such other officers of the District as the Director of Finance and Administrative Services may designate (the "Authorized Officers") are, and each of them is, hereby authorized and directed, for and in the name of the District, to execute and deliver the Installment Purchase Agreement in the form submitted to this meeting, with such changes, insertions and omissions as the Authorized Officer executing the same may require or approve, such requirement or approval to be conclusively evidenced by the execution of the Installment Purchase Agreement by such Authorized Officer; provided, however, that such changes, 56089861.2 OCSD 14-XX-3 Return to Mende Report insertions and omissions shall not result in an aggregate principal amount of Installment Payments in excess of $150,000,000, shall not result in a true interest cost for the Installment Payments in excess of 5.0% and shall not result in a final Installment Payment later than February 1, 2037. Section 3. The Trust Agreement, in substantially the form submitted to this meeting and made a part hereof as though set forth in full herein, be and the same is hereby approved. The Authorized Officers are, and each of them is, hereby authorized and directed, for and in the name of the District, to execute and deliver the Trust Agreement in the form presented to this meeting, with such changes, insertions and omissions as the Authorized Officer executing the same may require or approve, such requirement or approval to be conclusively evidenced by the execution of the Trust Agreement by such Authorized Officer. Section 4. The execution and delivery of Revenue Obligations evidencing principal in an aggregate amount of not to exceed $150,000,000, payable in the years and in the amounts, and evidencing principal of and interest on the Installment Payments as specified in the Trust Agreement as finally executed, are hereby authorized and approved. Section 5. The prepayment of all or a portion of the remaining principal components of the Prior Installment Payments, and the interest components thereof to the dates of prepayment, and the Prior Certificates evidencing interests therein, as determined by any Authorized Officer, is hereby authorized and approved. Section 6. The form of Notice of Intention to Sell, in substantially the form submitted to this meeting and made a part hereof as though set forth in full herein, with such changes, insertions and omissions therein as may be approved by an Authorized Officer, is hereby approved, and the use of the Notice of Intention to Sell in connection with the offering and sale of the Revenue Obligations is hereby approved. The Authorized Officers are each hereby authorized and directed, for and in the name and on behalf of the District, to cause the Notice of Intention to Sell to be published once in The Bond Buyer (or in such other financial publication generally circulated throughout the State of California or reasonably expected to be disseminated among prospective bidders for the Revenue Obligations as an Authorized Officer shall approve as being in the best interests of the District) at least five days prior to the date set for the opening of bids in the Notice Inviting Bids, with such changes, insertions and omissions therein as an Authorized Officer may require or approve, such requirement or approval to be conclusively evidenced by such publishing of the Notice of Intention to Sell. Section 7. The Notice Inviting Bids, in substantially the form submitted to this meeting and made a part hereof as though set forth herein, with such changes, insertions and omissions therein as may be approved by an Authorized Officer, be and the same is hereby approved, and the use of the Notice Inviting Bids in connection with the offering and sale of the Revenue Obligations is hereby authorized and approved. The terms and conditions of the offering and sale of the Revenue Obligations shall be as specified in the Notice Inviting Bids. Bids for the purchase of the Revenue 5WS98612 OCSD 14-XX-4 Return to Mende Rom Obligations shall be received at the time and place set forth in the Notice Inviting Bids. The Authorized Officers are each hereby authorized and directed, for and in the name and on behalf of the District, to accept the bid for the Revenue Obligations with the lowest true interest cost, or to reject all bids therefor, in accordance with the terms of the Notice Inviting Bids. Section 8. The Preliminary Official Statement, in substantially the form presented to this meeting and made a part hereof as though set forth in full herein, with such changes, insertions and omissions therein as may be approved by an Authorized Officer, is hereby approved, and the use of the Preliminary Official Statement in connection with the offering and sale of the Revenue Obligations is hereby authorized and approved. The Authorized Officers are each hereby authorized to certify on behalf of the District that the Preliminary Official Statement is deemed final as of its date, within the meaning of Rule 15c2-12 (except for the omission of certain information permitted by Rule 15c2-12 to be omitted). The Authorized Officers are each hereby authorized and directed to furnish, or cause to be furnished, to prospective bidders for the Revenue Obligations a reasonable number of copies of the Preliminary Official Statement. Section 9. The preparation and delivery of a final Official Statement (the "Official Statement'), and its use in connection with the offering and sale of the Revenue Obligations, be and the same is hereby authorized and approved. The Official Statement shall be in substantially the form of the Preliminary Official Statement, with such changes, insertions and omissions as may be approved by an Authorized Officer, such approval to be conclusively evidenced by the execution and delivery thereof. The Authorized Officers are, and each of them is, hereby authorized and directed to execute the final Official Statement and any amendment or supplement thereto, for and in the name of the District. Section 10. The Continuing Disclosure Agreement, in substantially the form submitted to this meeting and made a part hereof as though set forth herein, be and the same is hereby approved. The Authorized Officers are, and each of them is, hereby authorized and directed, for and in the name of the District, to execute and deliver the Continuing Disclosure Agreement in the form submitted to this meeting, with such changes, insertions and omissions as the Authorized Officer executing the same may require or approve, such requirement or approval to be conclusively evidenced by the execution of the Continuing Disclosure Agreement by such Authorized Officer. Section 11. The Escrow Agreement, in substantially the form submitted to this meeting and made a part hereof as though set forth herein, be and the same is hereby approved. The Authorized Officers are, and each of them is, hereby authorized and directed, for and in the name of the District, to execute and deliver the Escrow Agreement in the form submitted to this meeting, with such changes, insertions and omissions as the Authorized Officer executing the same may require or approve, such requirement or approval to be conclusively evidenced by the execution of the Escrow Agreement by such Authorized Officer. 5WS98612 OCSD 14-XX-5 Return to Mende Report Section 12. The Authorized Officers are, and each of them hereby is, authorized and directed to execute and deliver any and all documents and instruments and to do and cause to be done any and all acts and things necessary or proper for carrying out the execution and delivery of the Revenue Obligations and the transactions contemplated by the notices, agreements and documents referenced in this Resolution. Section 13. All actions heretofore taken by the officers and employees of the District with respect to the execution, delivery and sale of the Revenue Obligations, or in connection with or related to any of the agreements or documents referenced in this Resolution, are hereby approved, confirmed and ratified. Section 14. This Resolution shall take effect immediately upon its adoption. PASSED AND ADOPTED at a regular meeting held on December 17, 2014. Tom Beamish Chairman of the Board ATTEST: Maria E. Ayala Clerk of the Board APPROVED: Bradley Hogin General Counsel Orange County Sanitation District 56089867.2 OCSD 14-XX-6 Return to Mende Report STATE OF CALIFORNIA ) ss COUNTY OF ORANGE ) I, Maria E. Ayala, Clerk of the Board of Directors of the Orange County Sanitation District, do hereby certify that the foregoing Resolution No. OCSD 14-XX was passed and adopted at a regular meeting of said Board on the 171h day of December, 2014, by the following vote, to wit: AYES: NOES: ABSTENTIONS: ABSENT: IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of Orange County Sanitation District this 17t^ day of December, 2014. Maria E. Ayala Clerk of the Board of Directors Orange County Sanitation District 56089867.2 Return to Mende Report DRAFT OF 12/01/14 RESOLUTION NO. FC-XX A RESOLUTION OF THE BOARD OF DIRECTORS OF THE ORANGE COUNTY SANITATION DISTRICT FINANCING CORPORATION AUTHORIZING THE EXECUTION AND DELIVERY BY THE CORPORATION OF AN INSTALLMENT PURCHASE AGREEMENT AND A TRUST AGREEMENT IN CONNECTION WITH THE EXECUTION AND DELIVERY OF ORANGE COUNTY SANITATION DISTRICT WASTEWATER REFUNDING REVENUE OBLIGATIONS, SERIES 2015A, AUTHORIZING THE EXECUTION AND DELIVERY OF SUCH REVENUE OBLIGATIONS EVIDENCING PRINCIPAL IN AN AGGREGATE AMOUNT OF NOT TO EXCEED $150,000,000 AND AUTHORIZING THE EXECUTION OF NECESSARY DOCUMENTS AND RELATED ACTIONS. WHEREAS, to refinance the acquisition, construction and installation of certain improvements to its wastewater system (the 'Prior Project"), the Orange County Sanitation District (the 'District") has heretofore purchased the Prior Project from the Orange County Sanitation District Financing Corporation (the "Corporation"), and the Corporation has heretofore sold the Prior Project to the District, for the installment payments (the 'Prior Installment Payments") made by the District pursuant to the Installment Purchase Agreement, dated as of August 1, 2000 (the 'Prior Installment Purchase Agreement'), by and between the District and the Corporation; WHEREAS, to provide the funds necessary to refinance the Prior Project, the District caused the execution and delivery of the Orange County Sanitation District Certificates of Participation, Series 2007B (the 'Prior Certificates'), evidencing direct, undivided fractional interests in the related Prior Installment Payments; WHEREAS, the District desires to refinance a portion of the Prior Project by paying and prepaying the remaining Prior Installment Payments, and the interest thereon to the date of prepayment, thereby causing all or a portion of the remaining Prior Certificates to be prepaid; WHEREAS, to provide the funds necessary to pay and prepay a portion of the remaining Prior Installment Payments, the District and the Corporation desire that the Corporation purchase the Prior Project from the District and the District sell the Prior Project to the Corporation, and that the District then purchase the Prior Project from the Corporation and the Corporation sell the Prior Project to the District, for the installment payments (the "Installment Payments") to be made by the District pursuant to an Installment Purchase Agreement by and between the District and the Corporation (such Installment Purchase Agreement, in the form presented to this meeting, with such changes, insertions and omissions as are made pursuant to this Resolution, being referred to herein as the "Installment Purchase Agreement"); 56089900.2 11411481 Return to Mende Report WHEREAS, the Corporation intends to assign without recourse certain of its rights under and pursuant to the Installment Purchase Agreement to U.S. Bank National Association, as trustee (the 'Trustee"), pursuant to a Trust Agreement by and among the Trustee, the Corporation and the District (such Trust Agreement, in the form presented to this meeting, with such changes, insertions and omissions as are made pursuant to this Resolution, being referred to herein as the "Trust Agreement'); WHEREAS, in consideration of such assignment and the execution and delivery of the Trust Agreement, the Trustee intends to execute and deliver the Orange County Sanitation District Wastewater Refunding Revenue Obligations, Series 2015A (the "Revenue Obligations"), evidencing direct, undivided fractional interests in the Installment Payments, and the interest thereon; WHEREAS, there have been prepared and submitted to this meeting forms of: (a) the Installment Purchase Agreement; and (b) the Trust Agreement; WHEREAS, all acts, conditions and things required by the Constitution and laws of the State of California to exist, to have happened and to have been performed precedent to and in connection with the consummation of the actions authorized hereby do exist, have happened and have been performed in regular and due time, form and manner as required by law, and the Corporation is now duly authorized and empowered, pursuant to each and every requirement of law, to consummate such actions for the purpose, in the manner and upon the terms herein provided; NOW, THEREFORE, the Board of Directors of the Corporation DOES HEREBY RESOLVE, DETERMINE AND ORDER: Section 1. All of the recitals herein contained are true and correct and the Board of Directors of the Corporation (the "Board") so finds. Section 2. The Installment Purchase Agreement, in substantially the form submitted to this meeting and made a part hereof as though set forth herein, be and the same is hereby approved. The President of the Corporation, the Vice-President of the Corporation, the Treasurer of the Corporation and the Secretary of the Corporation, and such other officers of the Corporation as the President may designate (the "Authorized Officers") are, and each of them is, hereby authorized and directed, for and in the name of the Corporation, to execute and deliver the Installment Purchase Agreement in the form submitted to this meeting, with such changes, insertions and omissions as the Authorized Officer executing the same may require or approve, such requirement or approval to be conclusively evidenced by the execution of the Installment Purchase Agreement by such Authorized Officer; provided, however, that such changes, insertions and omissions shall not result in an aggregate principal amount of Installment Payments in excess of $150,000,000, shall not result in a true interest cost for the Installment Payments in excess of 5.0% and shall not result in a final Installment Payment later than February 1, 2037. eso8eeoo.2 FC-XX-2 Return to Mende Report Section 3. The Trust Agreement, in substantially the form submitted to this meeting and made a part hereof as though set forth in full herein, be and the same is hereby approved. The Authorized Officers are, and each of them is, hereby authorized and directed, for and in the name of the Corporation, to execute and deliver the Trust Agreement in the form presented to this meeting, with such changes, insertions and omissions as the Authorized Officer executing the same may require or approve, such requirement or approval to be conclusively evidenced by the execution of the Trust Agreement by such Authorized Officer. Section 4. The execution and delivery of Revenue Obligations evidencing principal in an aggregate amount of not to exceed $150,000,000, payable in the years and in the amounts, and evidencing direct, undivided fractional interests in the Installment Payments, and the interest thereon, as specified in the Trust Agreement as finally executed, are hereby authorized and approved. Section 5. The officers and agents of the Corporation are, and each of them hereby is, authorized and directed to execute and deliver any and all documents and instruments and to do and cause to be done any and all acts and things necessary or proper for carrying out the execution and delivery of the Revenue Obligations and the transactions contemplated by the agreements or documents referenced in this Resolution. Section 6. All actions heretofore taken by the officers and agents of the Corporation with respect to the execution, delivery and sale of the Revenue Obligations, or in connection with or related to any of the agreements or documents referenced in this Resolution, are hereby approved, confirmed and ratified. Section 7. This Resolution shall take effect immediately upon its adoption. esoseeoo.z FC-XX-3 Return to Mende Report PASSED AND ADOPTED at a meeting held on December 17, 2014. Tom Beamish President, Orange County Sanitation District Financing Corporation ATTEST: Maria E. Ayala Secretary/Clerk of the Board Orange County Sanitation District Financing Corporation APPROVED: Bradley Hogin, General Counsel, Orange County Sanitation District Financing Corporation esoseeoo.z FC-XX-4 Return to Mende Report STATE OF CALIFORNIA ) ss COUNTY OF ORANGE ) I, Maria E. Ayala, Clerk of the Board of Directors of the Orange County Sanitation District Financing Corporation, do hereby certify that the foregoing Resolution No. FC- XX was passed and adopted at a regular meeting of said Board on the 171" day of December, 2014, by the following vote, to wit: AYES: NOES: ABSTENTIONS: ABSENT: IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of Orange County Sanitation District Financing Corporation this 17" day of December, 2014. Maria E. Ayala Secretary/Clerk of the Board of Directors Orange County Sanitation District Financing Corporation 56089900.2 FC-XX-5 DRAFT OF 12/01/14 TRUST AGREEMENT by and among U.S. BANK NATIONAL ASSOCIATION, as Trustee, ORANGE COUNTY SANITATION DISTRICT FINANCING CORPORATION and ORANGE COUNTY SANITATION DISTRICT Dated as of February 1, 2015 Relating to ge County Sanitation District Wastewater Refunding Revenue Obligations Series 2015A 411636112 1141/48/ TABLE OF CONTENTS Page ARTICLE I DEFINITIONS; EQUAL SECURITY Section1.01. Definitions........................................................................................................2 Section 1.02. Definitions in Installment Purchase Agreement..............................................9 Section1.03. Equal Security..................................................................................................9 ARTICLE II TERMS AND CONDITIONS OF REVENUE OBLIGATIONS Section 2.01. Preparation and Delivery of Revenue Obligations ..........................................9 Section 2.02. Denomination, Medium and Dating of Revenue Obligations .........................9 Section 2.03. Payment Dates of Revenue Obligations; Interest Computation.................... 10 Section 2.04. Form of Revenue Obligations........................................................................ 11 Section 2.05. Execution of Revenue Obligations and Replacement Certificates................ 11 Section 2.06. Transfer and Payment,Exchange or Cancellation of Revenue Obligations..................................................................................................... 11 Section 2.07. Revenue Obligation Registration Books........................................................ 11 Section 2.08. Temporary Revenue Obligations................................................................... 12 Section 2.09. Revenue Obligations Mutilated, Lost,Destroyed or Stolen.......................... 12 Section 2.10. Book-Entry System........................................................................................ 12 ARTICLE III PROCEEDS OF REVENUE OBLIGATIONS Section 3.01. Delivery of Revenue Obligations................................................................... 15 Section 3.02. Deposit of Proceeds of Revenue Obligations ................................................ 15 Section 3.03. Costs of Issuance Fund.................................................................................. 15 ARTICLE IV PREPAYMENT OF REVENUE OBLIGATIONS Section 4.01. Optional Prepayment..................................................................................... 15 Section4.02. Reserved......................................................................................................... 16 Section 4.03. Selection of Revenue Obligations for Optional Prepayment......................... 16 Section 4.04. Notice of Prepayment .................................................................................... 16 Section 4.05. Partial Prepayment of Revenue Obligations.................................................. 17 Section 4.06. Effect of Prepayment..................................................................................... 17 ARTICLE V ASSIGNMENT AND PLEDGE; FUNDS AND ACCOUNTS Section 5.01. Assignment and Pledge.................................................................................. 17 Section 5.02. Installment Payment Fund............................................................................. 18 Section5.03. Reserved......................................................................................................... 19 Section 5.04. Investment of Moneys.................................................................................... 19 Section 5.05. Brokerage Confirmations............................................................................... 19 41163611.2 i TABLE OF CONTENTS (continued) Page ARTICLE VI COVENANTS Section 6.01. Compliance with Trust Agreement................................................................20 Section 6.02. Compliance with Installment Purchase Agreement.......................................20 Section 6.03. Compliance with Master Agreement.............................................................20 Section 6.04. Observance of Laws and Regulations............................................................20 Section6.05. Other Liens.....................................................................................................20 Section 6.06. Prosecution and Defense of Suits ..................................................................20 Section 6.07. Accounting Records and Statements.............................................................21 Section 6.08. Tax Covenants ...............................................................................................21 Section 6.09. Continuing Disclosure ...................................................................................24 Section 6.10. Further Assurances.........................................................................................25 ARTICLE VII DEFAULT AND LIMITATIONS OF LIABILITY Section 7.01. Action upon Event of Default........................................................................25 Section 7.02. Other Remedies of the Trustee......................................................................25 Section7.03. Non-Waiver....................................................................................................25 Section 7.04. Remedies Not Exclusive................................................................................26 Section 7.05. Application of Amounts After Default..........................................................26 Section 7.06. Trustee May Enforce Claims Without Possession of Revenue Obligations.....................................................................................................27 Section 7.07. Limitation on Suits.........................................................................................27 Section 7.08. No Liability by the Corporation to the Owners.............................................27 Section 7.09. No Liability by the District to the Owners.....................................................27 Section 7.10. No Liability of the Trustee to the Owners.....................................................28 ARTICLE VI I THE TRUSTEE Section 8.01. Employment of the Trustee; Duties...............................................................28 Section 8.02. Removal and Resignation of the Trustee.......................................................28 Section 8.03. Compensation and Indemnification of the Trustee........................................29 Section 8.04. Protection of the Trustee................................................................................30 ARTICLE IX AMENDMENT OF OR SUPPLEMENT TO TRUST AGREEMENT Section 9.01. Amendment or Supplement...........................................................................31 Section 9.02. Disqualified Revenue Obligations.................................................................32 Section 9.03. Endorsement or Replacement of Revenue Obligations After Amendment or Supplement...........................................................................32 Section 9.04. Amendment by Mutual Consent....................................................................33 41163611.2 ii TABLE OF CONTENTS (continued) Page ARTICLE X DEFEASANCE Section 10.01. Discharge of Revenue Obligations and Trust Agreement.............................33 Section10.02. Unclaimed Moneys........................................................................................34 ARTICLE XI MISCELLANEOUS Section 11.01. Benefits of Trust Agreement..........................................................................35 Section 11.02. Successor Deemed Included in all References to Predecessor......................35 Section 11.03. Execution of Documents by Owners.............................................................35 Section 11.04. Waiver of Personal Liability..........................................................................35 Section 11.05. Acquisition of Revenue Obligations by District............................................36 Section11.06. Content of Certificates...................................................................................36 Section 11.07. Funds and Accounts.......................................................................................36 Section 11.08. Article and Section Headings, Gender and References.................................36 Section 11.09. Partial Invalidity.............................................................................................37 Section 11.10. California Law...............................................................................................37 Section11.11. Notices...........................................................................................................37 Section 11.12. Effective Date................................................................................................38 Section 11.13. Execution in Counterparts..............................................................................38 EXHIBIT A—FORM OF REVENUE OBLIGATION 41163611.2 111 TRUST AGREEMENT THIS TRUST AGREEMENT (this "Trust Agreement'), dated as of February 1, 2015, is made by and among U.S. BANK NATIONAL ASSOCIATION, a national banking association organized and existing under the laws of the United States of America, as trustee(the "Trustee"), the ORANGE COUNTY SANITATION DISTRICT FINANCING CORPORATION, a nonprofit public benefit corporation organized and existing under the laws of the State of California (the "Corporation"), and the ORANGE COUNTY SANITATION DISTRICT, a county sanitation district organized and existing under the laws of the State of California(the"District'). WITNESSETH: WHEREAS, to refinance the acquisition, construction and installation of certain improvements to its wastewater system (the "Prior Project'), the District has heretofore purchased the Prior Project from the Corporation, and the Corporation has heretofore sold the Prior Project to the District, for the installment payments (the "Prior Installment Payments") made by the District pursuant to the Installment Purchase Agreement, dated as of August 1, 2000 (the"Prior Installment Purchase Agreement'),by and between the District and the Corporation; WHEREAS, to provide the funds necessary to refinance the Prior Project, the District caused the execution and delivery of the Orange County Sanitation District Certificates of Participation, Series 2007B (the "Prior Certificates"), evidencing direct, undivided fractional interests in the related Prior Installment Purchase Agreement and the related Prior Installment Payments; WHEREAS,the District desires to refinance a portion of the Prior Project(the "Project') by prepaying a portion of the remaining Prior Installment Payments, and the interest thereon to the date of prepayment, thereby causing a portion of the Prior Certificates to be retired; WHEREAS, to provide the funds necessary to pay and prepay a portion of the remaining Prior Installment Payments,the District and the Corporation desire that the Corporation purchase the Project from the District and the District sell the Project to the Corporation, and that the District then purchase the Project from the Corporation and the Corporation sell the Project to the District, for the installment payments (the"Installment Payments") to be made by the District pursuant to the Installment Purchase Agreement, dated the date hereof(the"Installment Purchase Agreement'); WHEREAS, the Corporation proposes to assign without recourse certain of its rights under and pursuant to the Installment Purchase Agreement to the Trustee; WHEREAS, in consideration of such assignment and the execution and delivery of this Trust Agreement, the Trustee has agreed to execute and deliver Orange County Sanitation District Wastewater Refunding Revenue Obligations, Series 2015A (the "Revenue Obligations"), which are certificates of participation, evidencing direct, undivided fractional interests in the Installment Purchase Agreement and the related Installment Payments,and the interest thereon; 4116361L2 WHEREAS, a portion of the proceeds of the Revenue Obligations will be used to prepay [all] [a portion] of the Prior Installment Payments; and WHEREAS, all acts, conditions and things required by law to exist, to have happened and to have been performed precedent to and in connection with the execution and delivery of this Trust Agreement do exist, have happened and have been performed in regular and due time, form and manner as required by law, and the parties hereto are now duly authorized to execute and deliver this Trust Agreement; NOW, THEREFORE, in consideration of the promises and of the mutual agreements and covenants contained herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged,the parties hereto do hereby agree as follows: ARTICLE I DEFINITIONS; EQUAL SECURITY Section 1.01. Definitions. Except as provided in Section 1.02 hereof or unless the context otherwise requires, the terms defined in this Section shall for all purposes hereof and of any amendment hereof or supplement hereto and of the Revenue Obligations and of any certificate, opinion, request or other document mentioned herein or therein have the meanings defined herein, the following definitions to be equally applicable to both the singular and plural forms of any of the terms defined herein: "Authorized Corporation Representative"means the President,the Vice President, the Treasurer and the Secretary of the Corporation, and any other Person authorized by the President of the Corporation to act on behalf of the Corporation under or with respect to this Trust Agreement. "Authorized Denominations"means $5,000 and integral multiples thereof. "Authorized District Representative" means the General Manager of the District, the Director of Finance and Administrative Services of the District, the Controller of the District and any other Person authorized by the Director of Finance and Administrative Services of the District to act on behalf of the District under or with respect to this Trust Agreement. "Beneficial Owners" means those individuals, partnerships, corporations or other entities for which the Participants have caused the Depository to hold Book-Entry Certificates. "Book-Entry Certificates" means the Revenue Obligations registered in the name of the nominee of DTC, or any successor securities depository for the Revenue Obligations, as the Owner thereof pursuant to the terms and provisions of Section 2.10 hereof. "Business Day" means a day other than (a) Saturday or Sunday, (b)a day on which banking institutions in the city in which the Principal Office is located are authorized or required by law to be closed, and (c)a day on which the New York Stock Exchange is authorized or obligated by law or executive order to be closed. au636n2 2 "Cede & Co." means Cede & Co., the nominee of DTC, and any successor nominee of DTC with respect to the Revenue Obligations. "Certificate Year" means each twelve-month period beginning on February 2 in each year and extending to the next succeeding February 1, both dates inclusive, except that the first Certificate Year shall begin on the Closing Date and end on February 1,2016. "Closing Date"means February_, 2015. "Code" means the Internal Revenue Code of 1986. "Continuing Disclosure Agreement" means the Continuing Disclosure Agreement, dated as of the date hereof, by and between the District and Digital Assurance Certification LLC, as originally executed and as it may from time to time be amended in accordance with the terms thereof. "Corporation' means the Orange County Sanitation District Financing Corporation, a nonprofit public benefit corporation organized and existing under the laws of the State. "Costs of Issuance" means all the costs of executing and delivering the Revenue Obligations, including, but not limited to, all printing and document preparation expenses in connection with this Trust Agreement, the Installment purchase Agreement, the Revenue Obligations and any preliminary official statement and final official statement pertaining to the Revenue Obligations, fees of a financial advisor, rating agency fees, market study fees, legal fees and expenses of counsel with respect to the execution and delivery of the Revenue Obligations, the initial fees and expenses of the Trustee and its counsel and other fees and expenses incurred in connection with the execution and delivery of the Revenue Obligations, to the extent such fees and expenses are approved by the District. "Costs of Issuance Fund" means the fund by that name established in accordance with Section 3.03 hereof. "Depository" means the securities depository acting as Depository pursuant to Section 2.10 hereof. "District" means the Orange County Sanitation District, a county sanitation district organized and existing under the laws of the State, and any successor thereto. "DTC"means The Depository Trust Company,New York,New York and its successors. "Escrow Agent"means MUFG Union Bank,N.A. and its successor or assign. "Escrow Agreement" means the Escrow Agreement, dated as of February 1, 2015, between the Escrow Agent and the District. "Escrow Fund" means the escrow fund established under the Escrow Agreement and held by the Escrow Agent. au636n2 3 "Event of Default" shall have the meaning set forth in Section 6.01 of the Installment Purchase Agreement. "Government Obligations" means any of the following which are noncallable by the issuer thereof except to the extent not permitted by the laws of the State as an investment for the moneys to be invested therein at the time of investment: (i) (a) direct general obligations of the United States of America, (b)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 (c) any fund or other pooling arrangement whose assets consist exclusively of the obligations listed in clause(a) or (b) of this clause(i) and which is rated at least `P-1" by Moody's; provided that, such obligations shall not include unit investment trusts or mutual fund obligations; (ii) advance refunded tax-exempt obligations that (a) are rated by Moody's and S&P, (b) are secured by obligations specified in clause(i), (c) me tax-exempt because they are secured by obligations specified in clause (i), and (d) have the same ratings as the obligations specified in clause (i); (iii) bonds, debentures or notes issued by any of the following federal agencies: Federal Farm Credit Bank, Federal Home Loan Mortgage Corporation or Fannie Mae; provided, that such bonds, debentures or notes shall be the senior obligations of such agencies (including participation certificates) and have the same ratings by Moody's and S&P as the obligations specified in clause(i); and (iv) 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. "Installment Payment Fund" means the fund by that name established in accordance with Section 5.02 hereof. "Installment Payments" means the Installment Payments required to be made by the District pursuant to Section 3.02 of the Installment Purchase Agreement. `Installment Purchase Agreement' means the Installment Purchase Agreement, dated as of the date hereof, by and between the District and the Corporation, as originally executed and as it may from time to time be amended in accordance with the provisions thereof. "Interest Account" means the account by that name within the Installment Payment Fund established in accordance with Section 5.02 hereof. "Interest Payment Date" means February 1 and August 1 of each year, commencing August 1,2015. 4116361L2 4 "Letter of Representations"means the letter of the District delivered to and accepted by the Depository on or prior to the delivery of the Revenue Obligations as Book-Entry Certificates setting forth the basis on which the Depository serves as depository for such Book-Entry Certificates, as originally executed or as it may be supplemented or revised or replaced by a letter to a substitute Depository. "Master Agreement" means the Master Agreement for District Obligations, dated as of August 1, 2000,by and between the District and the Corporation, as originally executed and as it may from time to time be amended or supplemented in accordance with the terms thereof. "Moody's" means Moody's Investors Service, a corporation organized and existing under the laws of the State of Delaware, its successors and assigns, except that if such corporation shall no longer perform the function of a securities rating agency for any reason, the term "Moody's" shall be deemed to refer to any other nationally recognized securities rating agency selected by the District. "Nominee" means the nominee of the Depository, which may be the Depository, as determined from time to time pursuant to Section 2.10 hereof. "Opinion of Counsel" means a written opinion of Fulbright& Jaworski LLP or any other counsel of recognized national standing in the field of law relating to municipal bonds, appointed and paid by the District. "Outstanding," when used as of any particular time with reference to Revenue Obligations, means (subject to the provisions of Section 9.02 hereof) all Revenue Obligations except (a)Revenue Obligations previously canceled by the Trustee or delivered to the Trustee for cancellation, (b) Revenue Obligations paid or deemed to have been paid within the meaning of Section 10.01 hereof, and(c) Revenue Obligations in lieu of or in substitution for which other Revenue Obligations shall have been executed and delivered by the Trustee pursuant to Section 2.09 hereof. "Owner" means any Person who shall be the registered owner of any Outstanding Revenue Obligation as indicated in the registration books of the Trustee required to be maintained pursuant to Section 2.07 hereof. "Participants" means those broker-dealers, banks and other financial institutions from time to time for which the Depository holds Book-Entry Certificates as securities depository. "Participating Underwriter" has the meaning ascribed thereto in the Continuing Disclosure Agreement. 4116361L2 5 "Permitted Investments"means any of the following, except to the extent not permitted by the laws of the State as an investment for the moneys to be invested therein at the time of investment: (1) Government Obligations; (2) 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; (3) 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 S&P; or which are rated by Moody's "VMIG 1" or better and by S&P "A-1+" or better with respect to commercial paper, or "VMIG 1" and "SP-111 , respectively, with respect to municipal notes; (4) 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 Trustee); provided that (a) such bank, trust company or national banking association be rated "Aa3" or better by Moody's and "AA-" or better by S&P; 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 10% 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 $15,000,000; (5) Repurchase agreements with any bank, trust company or national banking association insured by the Federal Deposit Insurance Corporation(including the Trustee), with subsidiaries (of a parent company), provided the obligations of the subsidiary under the agreement we unconditionally guaranteed by the parent, 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(1) or (2) of this definition, provided that either such bank, trust company or national banking association which (or senior debt or claims paying ability of the financial entity's guarantor) is rated, at the time of investment,"Aa3"or better by Moody's and"AA-" or better by S&P; (6) Repurchase agreements with maturities of not more than one year entered into with financial institutions such as banks or trust companies organized under state law or national banks or banking associations (including the Trustee), 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 Securities Investor 4116361L2 6 Protection Corporation or with a dealer or parent holding company that is rated, at the time of investment, or whose long-term debt obligations (or senior debt or claims paying ability of the financial entity's guarantor) are rated, at the time of investment, "Aa3" or better by Moody's and"AA-"or better by S&P,provided such repurchase agreements are in writing, secured by obligations described in paragraphs (1) and (2) 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 Trustee has a perfected first lien in, and retains possession of, such obligations free from all third party claims; (7) Investment agreements, forward purchase agreements and reserve fund put agreements with any corporation, including banking or financial institutions, or agreements entered into with subsidiaries (of a parent company), provided the obligations of the subsidiary under the agreement are unconditionally guaranteed by the parent, the corporate debt of which (or senior debt or claims paying ability of the financial entity's guarantor) is rated, at the time of investment, "Aa3" or better by Moody's and "AA-" or better by S&P; (8) Guaranteed investment contracts or similar funding agreements issued by insurance companies, provided that either the long term corporate debt of such insurance company, at the time of investment, is rated, at the time of investment, "Aa3" or better by Moody's and "AA-" or better by S&P or which agreements are fully and continuously secured by a valid and perfected first priority security interest in obligations described in paragraph(1) or (2) of this definition, or that the following conditions are met: (a) the market value of the collateral is maintained at levels acceptable to Moody's and S&P, (b)the Trustee or a third party acting solely as agent for the Trustee has possession of the collateral, (c) the Trustee has a perfected first priority security interest in 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 Trustee to liquidate collateral; (9) Corporate commercial paper rated"P-1"or better by Moody's and"A-1+" or better by S&P at the time of investment; (10) Taxable government money market portfolios which are rated"AAAm"or "AAAm-G" by S&P and "P-l"by Moody's (including funds for which the Trustee or an affiliate provides investment advice or similar services); and (11) Deposits with the Local Agency Investment Fund of the State, as may otherwise be permitted by law. "Person" means an individual, corporation, limited liability company, firm, association, partnership, trust, or other legal entity or group of entities, including a governmental entity or any agency or political subdivision thereof. "Prepayment Account"means the account by that name within the Installment Payment Fund established in accordance with Section 5.02 hereof. "Principal Account" means the account by that name within the Installment Payment Fund established in accordance with Section 5.02 hereof. 4116361L2 7 "Principal Office" means the Trustee's principal corporate trust office in Los Angeles, California. "Principal Payment Date"means a date on which an Installment Payment evidenced by the Revenue Obligations becomes due and payable. "Prior Certificates" means the District's Certificates of Participation, Series 2007B, maturing in the years through , inclusive. "Prior Trust Agreement" means the Trust Agreement, dated as of December 1, 2007, by and among the Prior Trustee, the Corporation and the District, as amended and supplemented, pursuant to which the Prior Certificates were executed and delivered. "Prior Trustee" means MUFG Union Bank, N.A., formerly known as Union Bank of California,N.A., as trustee under the Prior Trust Agreement. "Project" has the meaning ascribed thereto in the recitals hereto. "Record Date"means, with respect to the interest payable on any Interest Payment Date, the 15th day of the calendar month immediately preceding such Interest Payment Date, whether or not such day is a Business Day. "Revenue Obligations" means the Orange County Sanitation District Wastewater Refunding Revenue Obligations, Series 2015A, executed and delivered by the Trustee pursuant hereto, which are certificates of participation, evidencing direct, undivided fractional interests in the Installment Purchase Agreement and the related Installment Payments, and the interest thereon. "S&P" means Standard & Poor's Ratings Services, a Standard & Poor's Financial Services LLC business, its successors and assigns, except that if such entity shall no longer perform the functions of a securities rating agency for any reason, the term "S&P" shall be deemed to refer to any other nationally recognized securities rating agency selected by the District. "State"means the State of California. "Trust Agreement" means this Trust Agreement, dated as of February 1, 2015, by and among the Trustee, the Corporation and the District, as originally executed and delivered and as it may from time to time be amended or supplemented in accordance with the provisions hereof. "Trustee" means U.S. Bank National Association, a national banking association duly organized and existing under the laws of the United States of America, or any other bank or trust company which may at any time be substituted in its place as provided in Section 8.02 hereof. "Written Certificate" and"Written Request"mean (a)with respect to the Corporation, a written certificate or written request, respectively, signed in the name of the Corporation by an Authorized Corporation Representative, and (b)with respect to the District, a written certificate or written request, respectively, signed in the name of the District by an Authorized District 4116361L2 8 Representative. Any such certificate or request may, but need not, be combined in a single instrument with any other instrument, opinion or representation, and the two or more so combined shall be read and construed as a single instrument. Section 1.02. Definitions in Installment Purchase Agreement. Except as otherwise herein defined and unless the context otherwise requires, the terms defined in the Installment Purchase Agreement shall for all purposes hereof and of any amendment hereof or supplement hereto and of any report or other document mentioned herein have the meanings defined therein, such definitions to be equally applicable to both the singular and plural forms of any of the terms defined therein. With respect to any defined term which is given a different meaning under this Trust Agreement than under the Installment Purchase Agreement, as used herein it shall have the meaning given herein. Section 1.03. Equal Seeurity. In consideration of the acceptance of the Revenue Obligations by the Owners, this Trust Agreement shall be deemed to be and shall constitute a contract between the Trustee and the Owners to secure the full and final payment of the interest and principal evidenced by the Revenue Obligations which may be executed and delivered hereunder, subject to each of the agreements, conditions, covenants and terms contained herein; and all agreements, conditions, covenants and terms contained herein required to be observed or performed by or on behalf of the Trustee shall be for the equal and proportionate benefit, protection and security of all Owners without distinction, preference or priority as to security or otherwise of any Revenue Obligations over any other Revenue Obligations by reason of the number or date thereof or the time of execution or delivery thereof or for any cause whatsoever, except as expressly provided herein or therein. ARTICLE II TERMS AND CONDITIONS OF REVENUE OBLIGATIONS Section 2.01. Preparation and Delivery of Revenue Obligations. The Trustee is hereby authorized, upon the Written Request of the District, to execute and deliver the Revenue Obligations in the aggregate principal amount of $ evidencing the aggregate principal amount of the Installment Payments and each evidencing a direct, fractional undivided interest in the Installment Payments, and the interest thereon. The Installment Payments evidenced by each Revenue Obligation shall constitute the principal evidenced thereby and the interest on such Installment Payments shall constitute the interest evidenced thereby. The Revenue Obligations shall be numbered,with or without prefixes, as directed by the Trustee. Section 2.02. Denomination, Medium and Dating of Revenue Obligations. The Revenue Obligations shall be designated "Orange County Sanitation District Wastewater Refunding Revenue Obligations, Series 2015A" and shall be prepared in the form of fully registered Revenue Obligations, without coupons, in Authorized Denominations and shall be payable in lawful money of the United States of America. The Revenue Obligations shall be dated as of the Closing Date. Each Revenue Obligation shall evidence interest from the Interest Payment Date next preceding its date of execution to which interest has been paid in full, unless such date of execution shall be after a 4116361L2 9 Record Date and on or prior to the following Interest Payment Date, in which case such Revenue Obligation shall evidence interest from such Interest Payment Date, or unless such date of execution shall be on or prior to July 15, 2015, in which case such Revenue Obligation shall represent interest from the Closing Date. Notwithstanding, the foregoing, if, as shown by the records of the Trustee, interest evidenced by the Revenue Obligations shall be in default, each Revenue Obligation shall evidence interest from the last Interest Payment Date to which such interest has been paid in full or duly provided for. Section 2.03. Payment Dates of Revenue Obligations: Interest Computation. (a)Method and Place of Payment. The principal evidenced by the Revenue Obligations shall become due and payable, subject to prior prepayment, on February 1 of the years, in the amounts,and shall evidence interest accruing at the rates per annum set forth below: Principal Payment Date Principal Interest (February 1) Component Rate Except as otherwise provided in the Letter of Representations, payments of interest evidenced by the Revenue Obligations shall be made to the Owners thereof(as determined at the close of business on the Record Date next preceding the related Interest Payment Date)by check or draft of the Trustee mailed to the address of each such Owner as it appears on the registration books maintained by the Trustee pursuant to Section 2.07 hereof, or to such other address as may be furnished in writing to the Trustee by each such Owner. Except as otherwise provided in the Letter of Representations, payment of principal and prepayment premium, if any, evidenced by the Revenue Obligations, on their stated Principal Payment Dates or on prepayment in whole or in part prior thereto, shall be made only upon presentation and surrender of the Revenue Obligations at the Principal Office. (b) Computation oflnterest. The interest evidenced by the Revenue Obligations shall be payable on each Interest Payment Date to and including their respective Principal Payment Dates or prepayment prior thereto, and shall represent the sum of the interest on the Installment Payments coming due on the Interest Payment Dates in each year. The principal evidenced by the Revenue Obligations shall be payable on their respective Principal Payment Dates in each year and shall represent the Installment Payments coming due on the Principal Payment Dates in each year. Interest evidenced by the Revenue Obligations shall be computed on the basis of a 360-day year consisting of twelve 30-day months. 4116361L2 10 Section 2.04. Form of Revenue Obligations. The Revenue Obligations shall be in substantially the form of Exhibit A hereto, with necessary or appropriate insertions, omissions and variations as permitted or required hereby. Section 2.05. Execution of Revenue Obligations and Replacement Certificates. The Revenue Obligations shall be executed by the Trustee by the manual signature of an authorized signatory of the Trustee. The Trustee shall deliver replacement Revenue Obligations in the manner and as contemplated by this Article. Such replacement Revenue Obligations shall be executed as herein provided and shall be in Authorized Denominations. Section 2.06. Transfer and Payment, Exchange or Cancellation of Revenue Obligations. Each Revenue Obligation is transferable by the Owner thereof, in person or by his attorney duly authorized in writing, at the Principal Office, on the registration books maintained by the Trustee pursuant to the provisions of Section 2.07 hereof,upon surrender of such Revenue Obligation for cancellation accompanied by delivery of a duly executed written instrument of transfer in a form acceptable to the Trustee. The Tmstee may treat the Owner of any Revenue Obligation as the absolute owner of such Revenue Obligation for all purposes, whether or not the principal or interest evidenced by such Revenue Obligation shall be overdue, and the Trustee shall not be affected by any knowledge or notice to the contrary; and payment of the interest and principal evidenced by such Revenue Obligation shall be made only to such Owner, which payments shall be valid and effectual to satisfy and discharge the liability evidenced by such Revenue Obligation to the extent of the sum or sums so paid. Whenever any Revenue Obligation shall be surrendered for transfer, the Trustee shall execute and deliver a new Revenue Obligation or Revenue Obligations evidencing principal in the same aggregate amount and having the same stated Principal Payment Date. The Trustee shall require the payment by any Owner requesting such transfer of any tax or other governmental charge required to be paid with respect to such transfer. Each Revenue Obligation may be exchanged at the Principal Office for Revenue Obligations evidencing principal in a like aggregate principal amount having the same stated Principal Payment Date in such Authorized Denominations as the Owner thereof may request. The Trustee shall require the payment by the Owner requesting such exchange of any tax or other governmental charge required to be paid with respect to such exchange. Whenever in this Trust Agreement provision is made for the cancellation by the Trustee of any Bonds, the Trustee shall destroy such Bonds and deliver a certificate of such destruction to the District. Section 2.07. Revenue Obligation Registration Books. The Trustee shall keep at its Principal Office sufficient books for the registration and transfer of the Revenue Obligations, which books shall be available for inspection and copying by the District at reasonable hours and under reasonable conditions; and upon presentation for such purpose the Trustee shall, under such reasonable regulations as it may prescribe, register or transfer the Revenue Obligations on such books as hereinabove provided. 4116361L2 11 Section 2.08. Temporary Revenue Obligations. The Revenue Obligations may be initially delivered in temporary form exchangeable for definitive Revenue Obligations when ready for delivery, which temporary Revenue Obligations shall be printed, lithographed or typewritten, shall be of such denominations as may be determined by the Trustee, shall be in fully registered form and shall contain such reference to any of the provisions hereof as may be appropriate. Every temporary Revenue Obligation shall be executed and delivered by the Trustee upon the same conditions and terms and in substantially the same manner as definitive Revenue Obligations. If the Trustee executes and delivers temporary Revenue Obligations, it shall prepare and execute definitive Revenue Obligations without delay, and thereupon the temporary Revenue Obligations may be surrendered at the Principal Office in exchange for such definitive Revenue Obligations, and until so exchanged such temporary Revenue Obligations shall be entitled to the same benefits hereunder as definitive Revenue Obligations executed and delivered hereunder. Section 2.09. Revenue ObBeations Mutilated, Lost, Destroyed or Stolen. If any Revenue Obligation shall become mutilated, the Trustee, at the expense of the Owner thereof, shall execute and deliver a new Revenue Obligation evidencing a like principal amount and having the same stated Principal Payment Date and number in exchange and substitution for the Revenue Obligation so mutilated, but only upon surrender to the Trustee of the Revenue Obligation so mutilated. Every mutilated Revenue Obligation so surrendered to the Trustee shall be canceled by it. If any Revenue Obligation shall be lost, destroyed or stolen, evidence of such loss, destruction or theft may be submitted to the Trustee, and if such evidence is satisfactory to the Trustee and indemnity satisfactory to the Trustee shall be given, the Trustee, at the expense of the Owner thereof, shall execute and deliver a new Revenue Obligation evidencing a like principal amount and having the same stated Principal Payment Date, numbered as the Trustee shall determine, in lieu of and in substitution for the Revenue Obligation so lost, destroyed or stolen. The Trustee may require payment of a sum not exceeding the actual cost of preparing each new Revenue Obligation executed and delivered by it under this Section and of the expenses which may be incurred by it under this Section. Any Revenue Obligation executed and delivered under the provisions of this Section in lieu of any Revenue Obligation alleged to be lost, destroyed or stolen shall be equally and proportionately entitled to the benefits hereof with all other Revenue Obligations executed and delivered hereunder, and the Trustee shall not be required to treat both the original Revenue Obligation and any replacement Revenue Obligation as being Outstanding for the purpose of determining the amount of Revenue Obligations which may be executed and delivered hereunder or for the purpose of determining any percentage of Revenue Obligations Outstanding hereunder, but both the original and replacement Revenue Obligation shall be treated as one and the same. Notwithstanding any other provision of this Section, in lieu of executing and delivering a new Revenue Obligation for a Revenue Obligation which has been lost, destroyed or stolen and which evidences principal that is then payable, the Trustee may make payment of such Revenue Obligation to the Owner thereof if so instructed by the District. Section 2.10. Book-Entry System. (a) The Revenue Obligations shall be initially executed and delivered as Book-Entry Certificates, and the Revenue Obligations for each stated Principal Payment Date shall be in the form of a separate single fully registered Revenue Obligation (which may be typewritten). Upon initial execution and delivery, the ownership of each Revenue Obligation shall be registered in the registration books maintained by the Trustee 411636111 12 in the name of the Nominee, as nominee of the Depository. Payment of principal or interest evidenced by any Book-Entry Certificate registered in the name of the Nominee shall be made on the applicable Interest Payment Date by wire transfer of New York clearing house or equivalent next day funds or by wire transfer of same day funds to the account of the Nominee. Such payments shall be made to the Nominee at the address which is, on the Record Date, shown for the Nominee in the registration books maintained by the Trustee. (b) With respect to Book-Entry Certificates, the District, the Corporation and the Trustee shall have no responsibility or obligation to any Participant or to any Person on behalf of which such a Participant holds an interest in such Book-Entry Certificates. Without limiting the immediately preceding sentence, the District, the Corporation and the Trustee shall have no responsibility or obligation with respect to (i)the accuracy of the records of the Depository, the Nominee or any Participant with respect to any ownership interest in Book-Entry Certificates, (ii)the delivery to any Participant or any other Person, other than an Owner as shown in the registration books maintained by the Trustee, of any notice with respect to Book-Entry Certificates, including any notice of prepayment, (iii)the selection by the Depository and its Participants of the beneficial interests in Book-Entry Certificates to be prepaid in the event Revenue Obligations are prepaid in part, (iv) the payment to any Participant or any other Person, other than an Owner as shown in the registration books maintained by the Trustee, of any amount with respect to principal, premium, if any, or interest evidenced by Book-Entry Certificates, or(v)any consent given or other action taken by the Depository as Owner. (c) The District, the Corporation and the Trustee may treat and consider the Person in whose name each Book-Entry Certificate is registered in the registration books maintained by the Trustee as the absolute Owner of such Book-Entry Certificate for the purpose of payment of principal, prepayment premium, if any, and interest evidenced by such Revenue Obligation, for the purpose of selecting any Revenue Obligations, or portions thereof, to be prepaid, for the purpose of giving notices of prepayment and other matters with respect to such Revenue Obligation, for the purpose of registering transfers with respect to such Revenue Obligation, for the purpose of obtaining any consent or other action to be taken by Owners and for all other purposes whatsoever, and the District, the Corporation and the Trustee shall not be affected by any notice to the contrary. (d) Reserved. (e) The Trustee shall pay all principal, premium, if any, and interest evidenced by the Revenue Obligations to the respective Owner, as shown in the registration books maintained by the Trustee, or his respective attorney duly authorized in writing, and all such payments shall be valid and effective to fully satisfy and discharge the obligations with respect to payment of principal, premium, if any, and interest evidenced by the Revenue Obligations to the extent of the sum or sums so paid. No Person other than an Owner, as shown in the registration books maintained by the Trustee, shall receive a Revenue Obligation evidencing principal, premium, if any, and interest evidenced by the Revenue Obligations. Upon delivery by the Depository to the Owners, the Trustee and the District of written notice to the effect that the Depository has determined to substitute a new nominee in place of the Nominee, and subject to the provisions herein with respect to Record Dates, the word Nominee in this Trust Agreement shall refer to such nominee of the Depository. 41163611.2 13 (f) To qualify the Book-Entry Certificates for the Depository's book-entry system, the District shall execute and deliver to the Depository a Letter of Representations. The execution and delivery of a Letter of Representations shall not in any way impose upon the Corporation,the District or the Trustee any obligation whatsoever with respect to Persons having interests in such Book-Entry Certificates other than the Owners, as shown on the registration books maintained by the Trustee. Such Letter of Representations may provide the time, form, content and manner of transmission, of notices to the Depository. In addition to the execution and delivery of a Letter of Representations by the District, the District, the Corporation and the Trustee shall take such other actions, not inconsistent with this Trust Agreement, as are reasonably necessary to qualify Book-Entry Certificates for the Depository's book-entry program. (g) If the District determines that it is in the best interests of the Beneficial Owners that they be able to obtain certificated Revenue Obligations and that such Revenue Obligations should therefore be made available and notifies the Depository and the Trustee of such determination, the Depository will notify the Participants of the availability through the Depository of certificated Revenue Obligations. In such event, the Trustee shall transfer and exchange certificated Revenue Obligations as requested by the Depository and any other Owners in appropriate amounts. In the event (i)the Depository determines not to continue to act as securities depository for Book-Entry Certificates, or(ii)the Depository shall no longer so act and gives notice to the Trustee of such determination, then the District shall discontinue the Book- Entry system with the Depository. If the District determines to replace the Depository with another qualified securities depository, the District shall prepare or direct the preparation of a new single, separate, fully registered Revenue Obligation for each stated Principal Payment Date of such Book-Entry Certificates, registered in the name of such successor or substitute qualified securities depository or its nominee. If the District fails to identify another qualified securities depository to replace the Depository, then the Revenue Obligations shall no longer be restricted to being registered in the registration books maintained by the Trustee in the name of the Nominee, but shall be registered in whatever name or names the Owners transferring or exchanging such Revenue Obligations shall designate, in accordance with the provisions of Sections 2.06 and 2.09 hereof. Whenever the Depository requests the District to do so, the District will cooperate with the Depository in taking appropriate action after reasonable notice (i)to make available one or more separate certificates evidencing the Book-Entry Certificates to any Participant having Book-Entry Certificates credited to its account with the Depository, and (ii)to arrange for another securities depository to maintain custody of certificates evidencing the Book-Entry Certificates. (h) Notwithstanding any other provision of this Trust Agreement to the contrary, if DTC is the sole Owner of the Revenue Obligations, so long as any Book-Entry Certificate is registered in the name of the Nominee, all payments of principal, premium, if any, and interest evidenced by such Revenue Obligation and all notices with respect to such Revenue Obligation shall be made and given, respectively, as provided in the Letter of Representations or as otherwise instructed by the Depository. (i) In connection with any notice or other communication to be provided to Owners pursuant to the Trust Agreement by the District, the Corporation or the Trustee, with respect to any consent or other action to be taken by Owners, the Trustee shall establish a record date for 411636111 14 such consent or other action and give the Depository notice of such record date not less than 15 calendar days in advance of such record date to the extent possible. Notice to the Depository shall be given only when DTC is the sole Owner of the Revenue Obligations. ARTICLE III PROCEEDS OF REVENUE OBLIGATIONS Section 3.01. Delivery of Revenue Obligations. The Trustee is hereby authorized to execute the Revenue Obligations and deliver the Revenue Obligations to the original purchaser thereof upon receipt of a Written Request of the District and upon receipt of the net proceeds of sale thereof. Section 3.02. Deposit of Proceeds of Revenue Obligations. The net proceeds received by the Trustee from the sale of the Revenue Obligations in the amount of$ (which amount includes the security deposit for the Revenue Obligations in the amount of $ on deposit with the Trustee) shall be deposited or transferred by the Trustee as follows: (a) the Trustee shall deposit in the Costs of Issuance Fund the amount of $ ; and (b) the Trustee shall transfer to the Escrow Agent for deposit in the Escrow Fund established under the Escrow Agreement the amount of$ from the proceeds of the Revenue Obligations, to apply, together with other available monies released from the Prior Trust Agreement, to the payment and prepayment of a portion of the installment payments related to the Prior Certificates as provided in the Escrow Agreement. Following the above transfers and deposits, the Proceeds Fund shall be closed. Section 3.03. Costs of Issuance Fund. The Trustee shall establish and maintain a separate special fund to be held by the Trustee known as the Costs of Issuance Fund. There shall be deposited in the Costs of Issuance Fund on the Closing Date the amount required to be deposited therein pursuant to Section 3.02 hereof. The Trustee shall disburse moneys from the Costs of Issuance Fund on such dates and in such amounts as are necessary to pay Costs of Issuance, in each case upon the Written Request of the District stating the Person to whom payment is to be made, the amount to be paid, the purpose for which the obligation was incurred and that such payment is a proper charge against the Costs of Issuance Fund. On the date that is six months after the Closing Date, the Trustee shall transfer any amounts then remaining in the Costs of Issuance Fund to the Installment Payment Fund. Upon such transfer, the Costs of Issuance Fund shall be closed. ARTICLE IV PREPAYMENT OF REVENUE OBLIGATIONS Section 4.01. Optional Prepayment. The Revenue Obligations with stated Principal Payment Dates prior to February 1, 2026 are not subject to optional prepayment prior to their 4116361L2 15 stated Principal Payment Dates. The Revenue Obligations with stated Principal Payment Dates on or after February 1, 2026 are subject to optional prepayment prior to their stated Principal Payment Dates, on any date on or after February 1, 2025, in whole or in part, in Authorized Denominations, from and to the extent of prepaid Installment Payments paid pursuant to Section 4.01 of the Installment Purchase Agreement or from any other source of available funds, any such prepayment to be at a price equal to the principal evidenced by the Revenue Obligations to be prepaid, plus accrued interest evidenced thereby to the date fixed for prepayment,without premium. Section 4.02. Reserved. Section 4.03. Selection of Revenue Obligations for Optional Prepayment. Whenever less than all the Outstanding Revenue Obligations are to be prepaid on any one date pursuant to Section 4.01 hereof, with respect to optional prepayment of Revenue Obligations, the Trustee shall select the Revenue Obligations to be prepaid among Revenue Obligations with different Principal Payment Dates as directed in a Written Request of the District. Whenever less than all the Outstanding Revenue Obligations with the same stated Principal Payment Date are to be prepaid on any one date pursuant to Section 4.01 hereof, the Trustee shall select the Revenue Obligations with such Principal Payment Date to be prepaid as directed in a Written Request of the District, or at the discretion of the District by lot in any manner that the Trustee deems fair and appropriate, which decision shall be final and binding upon the District and the Owners. The Trustee shall promptly notify the District in writing of the numbers of the Revenue Obligations so selected for prepayment on such date. For purposes of such selection, any Revenue Obligation may be prepaid in part in Authorized Denominations. Section 4.04. Notice of Prepayment. When prepayment of Revenue Obligations is authorized pursuant to Section 4.01, the Trustee shall give notice, at the expense of the District, of the prepayment of the Revenue Obligations. The notice of prepayment shall specify (a) the Revenue Obligations or designated portions thereof(in the case of prepayment of the Revenue Obligations in part but not in whole) which are to be prepaid, (b) the date of prepayment, (c)the place or places where the prepayment will be made, including the time and address of any paying agent, (d) the prepayment price, (e)the CUSIP numbers assigned to the Revenue Obligations to be prepaid, (t)the numbers of the Revenue Obligations to be prepaid in whole or in part and, in the case of any Revenue Obligation to be prepaid in part only, the principal evidenced by such Revenue Obligation to be prepaid, and (g)the interest rate and stated Principal Payment Date of each Revenue Obligation to be prepaid in whole or in part. Such notice of prepayment shall further state that on the specified date there shall become due and payable upon each Revenue Obligation or portion thereof being prepaid the prepayment price and that from and after such date interest evidenced thereby shall cease to accrue and be payable. With respect to any notice of prepayment of Revenue Obligations pursuant to Section 4.01 hereof, unless at the time such notice is given the Revenue Obligations to be prepaid shall be deemed to have been paid within the meaning of Section 10.01 hereof, such notice shall state that such prepayment is conditional upon receipt by the Trustee, on or prior to the date fixed for such prepayment, of moneys sufficient to pay for the prepayment price of the Revenue Obligations to be prepaid, and that if such moneys shall not have been so received said notice shall be of no force and effect and the District shall not be required to prepay such Revenue Obligations. If a notice of prepayment of Revenue Obligations contains such a condition and such moneys are not 4116361L2 16 so received, the prepayment of Revenue Obligations as described in the conditional notice of prepayment shall not be made and the Trustee shall, within a reasonable time after the date on which such prepayment was to occur, give notice to the persons and in the manner in which the notice of prepayment was given,that such moneys were not so received and that there shall be no prepayment of Revenue Obligations pursuant to such notice of prepayment. The Trustee shall, at least 20 but not more than 60 days prior to any prepayment date, give notice of prepayment to the respective Owners of Revenue Obligations designated for prepayment by first-class mail, postage prepaid, at their addresses appearing on the registration books maintained by the Trustee as of the close of business on the day before such notice of prepayment is given. The actual receipt by the Owner of any notice of such prepayment shall not be a condition precedent to prepayment, and neither failure to receive such notice nor any defect therein shall affect the validity of the proceedings for the prepayment of such Revenue Obligations or the cessation of interest evidenced thereby on the date fixed for prepayment. A certificate by the Trustee that notice of prepayment has been given to Owners as herein provided shall be conclusive as against all parties, and no Owner whose Revenue Obligation is called for prepayment may object thereto or object to the cessation of interest evidenced thereby on the fixed prepayment date by any claim or showing that said Owner failed to actually receive such notice of prepayment. Section 4.05. Partial Prepayment of Revenue Obligations. Upon surrender of any Revenue Obligation prepaid in part only, the Trustee shall execute and deliver to the Owner thereof a new Revenue Obligation or Revenue Obligations evidencing the unprepaid principal with respect to the Revenue Obligation surrendered. Section 4.06. Effect of Prepayment. If notice of prepayment has been duly given as aforesaid and moneys for the payment of the prepayment price of the Revenue Obligations to be prepaid are held by the Trustee, then on the prepayment date designated in such notice, the Revenue Obligations so called for prepayment shall become payable at the prepayment price specified in such notice; and from and after the date so designated, interest evidenced by the Revenue Obligations so called for prepayment shall cease to accrue, such Revenue Obligations shall cease to be entitled to any benefit or security hereunder and the Owners of such Revenue Obligations shall have no rights in respect thereof except to receive payment of the prepayment price thereof The Trustee shall, upon surrender for payment of any of the Revenue Obligations to be prepaid, pay such Revenue Obligations at the prepayment price thereof, and such moneys shall be pledged to such payment. All Revenue Obligations prepaid pursuant to the provisions of this Article shall be canceled by the Trustee and shall not be redelivered. ARTICLE V ASSIGNMENT AND PLEDGE; FUNDS AND ACCOUNTS Section 5.01. Assignment and Pledge. The Corporation hereby transfers, conveys and assigns to the Trustee, for the benefit of the Owners, all of the Corporation's rights, title and 4116361L2 17 interest in and to the Installment Purchase Agreement (excepfing its rights to indemnification thereunder), including the right to receive Installment Payments, and the interest thereon, from the District and the right to exercise any remedies provided therein in the event of a default by the District thereunder. The Trustee hereby accepts said transfer, conveyance and assignment, solely in its capacity as Trustee, for the benefit of the Owners, subject to the provisions of this Trust Agreement. All Installment Payments, and the interest thereon, shall be paid directly by the District to the Trustee, and if received by the Corporation at any time shall be deposited by the Corporation with the Trustee immediately upon the receipt thereof. To secure the respective rights of the Owners to the payments required to be made thereto as provided herein, the Corporation and the District hereby irrevocably pledge to the Trustee, for the benefit of the Owners, all of their right, title and interest, if any, in and to all amounts on deposit from time to time in the funds and accounts established hereunder. This pledge shall constitute a first lien on the amounts on deposit in such funds and accounts. Section 5.02. Installment Payment Fund. (a)The Trustee shall establish and maintain the Installment Payment Fund until all required Installment Payments, and the interest thereon, are paid in full pursuant to the Installment Purchase Agreement and until the first date upon which the Revenue Obligations are no longer Outstanding. The Trustee shall deposit in the Installment Payment Fund all Installment Payments, and the interest thereon, paid by the District and received by the Trustee. The moneys in the Installment Payment Fund shall be held in trust by the Trustee for the benefit of the Owners and shall be used and disbursed only for the purposes and uses herein authorized. (b) The Trustee shall transfer the amounts on deposit in the Installment Payment Fund, at the times and in the manner hereinafter provided, to the following respective accounts within the Installment Payment Fund, each of which the Trustee hereby agrees to establish and maintain until all required Installment Payments, and the interest thereon, are paid in full pursuant to the Installment Purchase Agreement and until the first date upon which the Revenue Obligations are no longer Outstanding. The moneys in each of such accounts shall be held in trust by the Trustee for the benefit of the Owners and shall be used and disbursed only for the purposes and uses herein authorized. (i) Interest Account. The Trustee, on each Interest Payment Date, shall deposit in the Interest Account that amount of moneys representing the interest on the Installment Payments coming due on such Interest Payment Date. Moneys in the Interest Account shall be used by the Trustee for the purpose of paying the interest evidenced by the Revenue Obligations when due and payable. (ii) Principal Account. The Trustee, on each Principal Payment Date, shall deposit in the Principal Account that amount of moneys representing the Installment Payments coming due on such Principal Payment Date. Moneys in the Principal Account shall be used by the Trustee for the purpose of paying the principal evidenced by the Revenue Obligations when due and payable. (iii) Prepayment Account. The Trustee, on the prepayment date specified in the Written Request of the District filed with the Trustee at the time that any prepaid 4116361L2 18 Installment Payment is paid to the Trustee pursuant to the Installment Purchase Agreement, shall deposit in the Prepayment Account that amount of moneys representing such prepaid Installment Payment, the accrued interest thereon to the prepayment date and any premium payable with respect thereto. The Trustee shall deposit in the Prepayment Account any other amounts made available by the District that the District, pursuant to a Written Request of the District, instructs the Trustee to apply to the prepayment of Revenue Obligations pursuant to Section 4.01 hereof. Moneys in the Prepayment Account shall be used by the Trustee for the purpose of paying the interest, premium, if any, and principal evidenced by the Revenue Obligations to be prepaid pursuant to Section 4.01 hereof. Section 5.03. Reserved. Section 5.04. Investment of Moneys. Except as otherwise provided herein, all moneys in any of the funds or accounts established pursuant to this Trust Agreement shall be invested by the Trustee solely in Permitted Investments, as directed by the District pursuant to a Written Request of the District at least two (2) Business Days prior to the making of such investment. Moneys in all funds and accounts held by the Trustee shall be invested in Permitted Investments maturing not later than the date on which it is estimated that such moneys will be required for the purposes specified in this Trust Agreement. Absent timely written direction from the District, the Trustee shall invest any funds held by it in Permitted Investments described in clause (10) of the definition thereof. Permitted Investments that are registerable securities shall be registered in the name of the Trustee. All interest, profits and other income received from the investment of moneys in any fund or account established pursuant to this Trust Agreement shall be retained therein. Permitted Investments acquired as an investment of moneys in any fund or account established under this Trust Agreement shall be credited to such fund or account. For the purpose of determining the amount in any fund, all Permitted Investments credited to such fund shall be valued by the Trustee at the market value thereof, such valuation to be performed not less frequently than semiannually on or before each January 15 and July 15. The Trustee or an affiliate may act as principal or agent in the making or disposing of any investment. The Trustee shall sell or present for redemption any Permitted Investment whenever it shall be necessary to provide moneys to meet any required payment, transfer, withdrawal or disbursement from the fund or account to which such Permitted Investment is credited, and the Trustee shall not be liable or responsible for any loss resulting from any investment made or sold pursuant to this Section. For purposes of investment, the Trustee may commingle moneys in any of the funds and accounts established hereunder. The Trustee is hereby authorized, in making or disposing of any investment permitted by this Section, to deal with itself (in its individual capacity) or with any one or more of its affiliates, whether or not such affiliate is acting as an agent of the Trustee or for any third Person or dealing as principal for its own account Section 5.05. Brokerase Confirmations. The Trustee shall furnish the District periodic cash transaction statements which include detail for all investment transactions effected by the 4116361 L2 19 Trustee or brokers selected by the District. Upon the District's election and request, the Trustee shall provide the District online access to such statements. The District waives the right to receive brokerage confirmations of securities transactions effected by the Trustee as they occur,to the extent permitted by law. The District further understands that trade confirmations for securities transactions effected by the Trustee will be available upon request and at no additional cost and other trade confirmations may be obtained from the applicable broker ARTICLE VI COVENANTS Section 6.01. Compliance with Trust Agreement. The Trustee will not execute or deliver any Revenue Obligations in any manner other than in accordance with the provisions hereof, and the Corporation and the District will not suffer or permit any default by them to occur hereunder, but will faithfully comply with, keep, observe and perform all the agreements, conditions, covenants and terms hereof required to be complied with, kept, observed and performed by them. Section 6.02. Compliance with Installment Purchase Agreement. The Corporation and the District will faithfully comply with, keep, observe and perform all the agreements, conditions, covenants and terms contained in the Installment Purchase Agreement required to be complied with, kept, observed and performed by them and, together with the Trustee, will enforce the Installment Purchase Agreement against the other party thereto in accordance with its terms. Section 6.03. Compliance with Master Agreement. The Corporation and the District will faithfully comply with, keep, observe and perform all the agreements, conditions, covenants and terms contained in the Master Agreement required to be complied with, kept, observed and performed by them and,together with the Trustee,will enforce the Master Agreement against the other party thereto in accordance with its terms. Section 6.04. Observance of Laws and Regulations. The Corporation and the District will faithfully comply with, keep, observe and perform all valid and lawful obligations or regulations now or hereafter imposed on them by contract, or prescribed by any law of the United States of America or of the State, or by any officer, board or commission having jurisdiction or control, as a condition of the continued enjoyment of each and every franchise, right or privilege now owned or hereafter acquired by them, including their right to exist and carry on their respective businesses,to the end that such franchises, rights and privileges shall be maintained and preserved and shall not become abandoned, forfeited or in any manner impaired. Section 6.05. Other Liens. None of the Trustee, the Corporation or the District shall create or suffer to be created any pledge of or lien on the amounts on deposit in any of the funds or accounts created hereunder, other than the pledge and lien hereof. Section 6.06. Prosecution and Defense of Suits. The District will defend against every action, suit or other proceeding at any time brought against the Trustee or any Owner upon any claim arising out of the receipt, deposit or disbursement of any of the Installment Payments, or 4116361 L2 20 the interest thereon, or involving the rights of the Trustee or any Owner hereunder; provided, however, that the Trustee or any Owner at its or his election may appear in and defend any such action, suit or other proceeding. Section 6.07. Accounting Records and Statements. The Trustee will keep proper accounting records in which complete and correct entries shall be made of all transactions made by the Trustee relating to the receipt, deposit and disbursement of the Installment Payments, and the interest thereon, and such accounting records shall be available for inspection by the Corporation and the District at reasonable hours and under reasonable conditions. The Trustee shall not be obligated to provide an accounting for any fund or account that (a)has a balance of $0.00 and (b) has not had any activity since the last reporting date. The Trustee will, upon written request, make copies of the foregoing available to any Owner (at the expense of such Owner). Section 6.08. Tax Covenants. (a) Special Definitions. When used in this Section, the following terms shall have the following meanings: "Bond Counsel" means Fulbright& Jaworski LLP or any other counsel of recognized national standing in the field of law relating to municipal bonds, appointed and paid by the District. "Computation Date" has the meaning set forth in section 1.148-1(b) of the Tax Regulations. "Computation Period' means, initially, that period commencing on the date of the execution and delivery of the Revenue Obligations and concluding on the initial Computation Date and, thereafter, each period commencing on the day next following a Computation Date and concluding on the immediately succeeding Computation Date. "Gross Proceeds" of any issue of governmental obligations means any proceeds as defined in section 1.148-1(b) of the Tax Regulations (referring to sales, investment and transferred proceeds) of that issue, and any replacement proceeds as defined in section 1.148- 1(c)of the Tax Regulations, of that issue. "Investment"has the meaning set forth in section 1.148-1(b)of the Tax Regulations. "Nonpurpose Investment"means any investment property, as defined in section 148(b) of the Code, in which Gross Proceeds of an issue are invested and that is not acquired to carry out the governmental purposes of that issue. "Opinion of Bond Counser' means a written opinion of Fulbright&Jaworski LLP or any other counsel of recognized national standing in the field of law relating to municipal bonds, appointed and paid by the District. au636n2 21 "Prior Issue" shall refer to the Prior Certificates (but in the case of any of the foregoing executed and delivered for multiple purposes, only to the portion thereof allocable pursuant to section 1.148-9(b)(4) of the Tax Regulations to other than refunding purposes). "Proceeds," with respect to an issue of governmental obligations, has the meaning set forth in has the meaning set forth in section 1.148-1(b) of the Tax Regulations (referring to sales, investment and transferred proceeds, but not replacement proceeds). "Rebate Amount"has the meaning set forth in section 1.148-1(b) of the Tax Regulations. "Tax Regulations" means the United States Treasury Regulations promulgated pursuant to sections 103 and 141 through 150 of the Code. "Yield" of (i) any Investment has the meaning set forth in section 1.148-5 of the Tax Regulations and (ii) in respect of the Revenue Obligations has the meaning set forth in section 1.148-4 of the Tax Regulations. (a) Exclusion of Interest from Gross Income. The District will take all actions necessary to establish and maintain the exclusion pursuant to section 103(a) of the Code of interest on the Revenue Obligations from the gross income of the owners thereof for federal income tax purposes, and will not use, permit the use of, or omit to use Gross Proceeds of the Revenue Obligations or any other amounts (or any property the acquisition, construction or improvement of which is to be refinanced directly or indirectly with Gross Proceeds) in a manner that if made or omitted, respectively, would cause the interest on any Revenue Obligation to fail to be excluded pursuant to section 103(a) of the Code from the gross income of the owners thereof for federal income tax purposes. Without limiting the generality of the foregoing, unless and until the Trustee receives a written Opinion of Bond Counsel to the effect that failure to comply with such covenant will not adversely affect the exclusion pursuant to section 103(a) of the Code of interest on any Revenue Obligation from the gross income of the owner thereof, the District shall comply with this covenant and each of the specific covenants in this Section. (b) No Private Use or Private Payments. Except as would not cause any Revenue Obligation to become a "private activity bond" within the meaning of section 141 of the Code and the Tax Regulations and rulings thereunder, the District shall at all times prior to the payment and cancellation of the last of the Revenue Obligations to be retired: (i) exclusively own, operate and possess all property the acquisition, construction or improvement of which is to be financed or refinanced directly or indirectly with Gross Proceeds of the Revenue Obligations and not use or permit the use of such Gross Proceeds (including all contractual arrangements with terns different than those applicable to the general public) or any property acquired, constructed or improved with such Gross Proceeds or the Gross Proceeds of the Prior Issue in any activity carried on by any person or entity (including the United States or any agency, department and instrumentality thereof) other than a state or local government, unless such use is solely as a member of the general public; and (ii) does not directly or indirectly impose or accept any charge or other payment by any person or entity who is treated as using Gross Proceeds of the Revenue 4/1636111 22 Obligations or of the Prior Issue, or any property the acquisition, construction or improvement of which is to be financed or refinanced directly or indirectly with such Gross Proceeds, other than taxes of general application within the jurisdiction of the District or interest earned on investments acquired with such Gross Proceeds pending application for their intended purposes. (c) No Private Loan. Except as would not cause any Revenue Obligation to become a"private activity bond"within the meaning of section 141 of the Code and the Tax Regulations and rulings thereunder,the District shall not use of Gross Proceeds of the Revenue Obligations to make or finance loans to any person or entity other than a state or local government. For purposes of the foregoing covenant, such Gross Proceeds are considered to be `loaned" to a person or entity if. (i) property acquired, constructed or improved with such Gross Proceeds is sold or leased to such person or entity in a transaction that creates a debt for federal income tax purposes; (ii) capacity in or service from such property is committed to such person or entity under a take-or-pay, output or similar contract or arrangement; or (iii) indirect benefits of such Gross Proceeds, or burdens and benefits of ownership of any property acquired, constructed or improved with such Gross Proceeds, are otherwise transferred in a transaction that is the economic equivalent of a loan. For purposes of this covenant, the District will treat any transaction constituting a loan of Gross Proceeds of the Prior Issue as resulting in a loan of Gross Proceeds of the Revenue Obligations. (d) Not to Invest at Higher Yield. Except as would not cause any Revenue Obligation to become an "arbitrage bond"within the meaning of section 148 of the Code and the Tax Regulations and rulings thereunder, the District will not, at any time prior to the final cancellation of the last Revenue Obligation to be retired, directly or indirectly invest Gross Proceeds of the Revenue Obligations in any Investment, if as a result of that investment the yield of any Investment acquired with Gross Proceeds of the Revenue Obligations, whether then held or previously disposed of, would materially exceed the yield of the Revenue Obligations within the meaning of said section 148. (e) Not Federally Guaranteed. Except to the extent such action or failure to act would not pursuant to section 149(b) of the Code and the Tax Regulations and rulings thereunder, adversely affect the exclusion pursuant to section 103(a) of interest on the Revenue Obligations from the gross income of the owners thereof for federal income tax purposes, the District will not take or omit to take any action that would cause any Revenue Obligation to be "federally guaranteed" within the meaning of section 149(b) of the Code and the Tax Regulations and rulings thereunder. (f) Information Report. The District will timely file any information necessary to the exclusion pursuant to section 103(a) of the Code of interest on the Revenue Obligations required by section 149(e) of the Code with the Secretary of the Treasury on Form 8038-G or such other form and in such place as the Secretary of the Treasury may prescribe. (g) Not to Divert Arbitrage Profits. Except to the extent permitted by section 148 of the Code and the Tax Regulations and rulings thereunder, the District will not at any time prior to the final cancellation of the last of the Revenue Obligations to be retired, enter into any transaction that reduces the amount required to be paid to the United States pursuant to 4116361 L2 23 section 148(f) of the Code because such transaction results in a smaller profit or a larger loss than would have resulted if the transaction had been at arm's length and had the yield on the Revenue Obligations not been relevant to either party. (h) Revenue Obligations Satisfy Section 149(g). The District represents that neither the Prior Issue nor the Revenue Obligations are or will become "hedge bonds" within the meaning of section 149(g) of the Code. Without limitation of the foregoing, with respect to the Prior Issue, (i)(A) on the date of issuance of that issue the District reasonably expected (based upon its own knowledge and upon representations made by other governmental persons upon the issuance of those obligations) that within the three-year period commencing on such date no less than 85% of the spendable proceeds of that issue would be expended for the governmental purposes thereof and (B) the District believes and represents that at no time has more than 50% of the proceeds of that issue been invested in Nonpurpose Investments having a substantially guaranteed yield for a period of four years or more, and with respect to the application of Proceeds of the Revenue Obligations other than for refunding purposes, (ii)(A) the District will not deliver the Revenue Obligations unless on the date of the issuance of the Revenue Obligations it reasonably expects that within the three-year period commencing on such date of issuance at least 85% of such spendable proceeds of the Revenue Obligations will be expended for the governmental purpose of the Revenue Obligations and(B) at no time will more than 50% of such spendable proceeds of the Revenue Obligations be invested in Nonpurpose Investments having a substantially guaranteed yield for a period of four years or more. (i) Elections. The District hereby directs and authorizes any Authorized Representative to make elections permitted or required pursuant to the provisions of the Code or the Tax Regulations, as such Authorized Representative (after consultation with Bond Counsel) deems necessary or appropriate in connection with the Revenue Obligations, in the Tax Certificate (as defined below)or similar or other appropriate certificate, form or document. 0) Tax Certificate. The District agrees to execute and deliver in connection with the execution and delivery of the Revenue Obligations a Tax Certificate as to Arbitrage and the Provisions of Sections 141-150 of the Internal Revenue Code of 1986, or similar document containing additional representations and covenants pertaining to the exclusion of interest with respect to the Revenue Obligations from the gross income of the owners thereof for federal income tax purposes (the "Tax Certificate"), which representations and covenants are incorporated as though expressly set forth herein. Section 6.09. Continuing Disclosure. The District will comply with and carry out all of the provisions of the Continuing Disclosure Agreement applicable to it. Notwithstanding any other provision of this Trust Agreement, failure of the District to comply with the Continuing Disclosure Agreement shall not be considered an Event of Default; provided, however, the Trustee at the request of any Participating Underwriter or the Owners of at least 25% aggregate principal amount of Outstanding Revenue Obligations and upon being indemnified to its reasonable satisfaction, shall, or any Owner or Beneficial Owner of Revenue Obligations may take such actions as may be necessary and appropriate to compel performance, including seeking mandate or specific performance by court order. The Trustee is authorized and directed to execute the acceptance and acknowledgement of the Continuing Disclosure Agreement. 4116361 L2 24 Section 6.10. Further Assurances. The District will promptly execute and deliver or cause to be executed and delivered all such other and further assurances, documents or instruments and promptly do or cause to be done all such other and further things as may be necessary or reasonably required in order to carry out the purposes and intentions of this Trust Agreement and for preserving and protecting the rights and interests of the Owners. ARTICLE VII DEFAULT AND LIMITATIONS OF LIABILITY Section 7.01. Action upon Event of Default. An Event of Default under the Installment Purchase Agreement shall constitute an Event of Default hereunder and an Event of Default under the Master Agreement shall constitute an Event of Default hereunder. The Trustee may give notice, as assignee of the Corporation, of an Event of Default under the Installment Purchase Agreement to the District, and shall do so if directed to do so by the Owners of not less than 5%of the aggregate principal evidenced by Revenue Obligations then Outstanding. In each and every case during the continuance of an Event of Default, the Trustee may and, at the direction of the Owners of not less than a majority of the aggregate principal evidenced by Revenue Obligations then Outstanding, shall, upon notice in writing to the District and the Corporation (a)exercise any of the remedies granted to the Corporation under the Installment Purchase Agreement, (b) exercise any of the remedies granted to the Tmstee under the Master Agreement, and (c)take whatever action at law or in equity may appear necessary or desirable to enforce its rights pursuant to this Trust Agreement, the Installment Purchase Agreement or the Master Agreement or to protect and enforce any of the rights vested in the Trustee or the Owners by this Trust Agreement, the Revenue Obligations, the Installment Purchase Agreement or the Master Agreement, either at law or in equity or in banlauptcy or otherwise, whether for the specific enforcement of any covenant or agreement or for the enforcement of any other legal or equitable right, including any one or more of the remedies set forth in Section 7.02 hereof. Section 7.02. Other Remedies of the Trustee. Subject to the provisions of Section 7.01 hereof, the Trustee shall have the right: (a) by mandamus or other action or proceeding or suit at law or in equity to enforce its rights against the Corporation or the District or any member, director, officer or employee thereof, and to compel the Corporation or the District or any such member, director, officer or employee to perform or carry out its or his or her duties under law and the agreements and covenants required to be performed by it or him or her contained herein; (b) by suit in equity to enjoin any acts or things which we unlawful or violate the rights of the Trustee; or (c) by suit in equity upon the happening of any Event of Default hereunder to require the Corporation and the District to account as the trustee of an express trust. Section 7.03. Non-Waiver. A waiver of any default or breach of duty or contract by the Trustee or the Owners shall not affect any subsequent default or breach of duty or contract or impair any rights or remedies on any such subsequent default or breach of duty or contract. No 4116361 L2 25 delay or omission by the Trustee or the Owners to exercise any right or remedy accruing upon any default or breach of duty or contract shall impair any such right or remedy or shall be construed to be a waiver of any such default or breach of duty or contract or an acquiescence therein, and every right or remedy conferred upon the Trustee or the Owners by law or by this Article may be enforced and exercised from time to time and as often as the Trustee shall deem expedient. If any action, proceeding or suit to enforce any right or to exercise any remedy is abandoned or determined adversely to the Trustee or any Owner, then subject to any adverse determination,the Trustee, such Owner,the Corporation and the District shall be restored to their former positions, rights and remedies as if such action, proceeding or suit had not been brought or taken. Section 7.04. Remedies Not Exclusive. Subject to the provisions of Section 7.01 hereof, no remedy herein conferred upon or reserved to the Trustee is intended to be exclusive of any other remedy, and each such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing in law or in equity or by statute or otherwise and may be exercised without exhausting and without regard to any other remedy conferred by any law. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent or subsequent assertion or employment of any other appropriate right or remedy. Section 7.05. Application of Amounts After Default. All damages or other payments received by the Trustee for the enforcement of any rights and powers of the Trustee under this Article shall be deposited into the Installment Payment Fund and as soon as practicable and thereafter applied: (a) to the payment of all amounts due the Trustee under Section 8.03 hereof; (b) unless the unpaid Installment Payments, and the interest thereon, shall have become, and shall remain, immediately due and payable pursuant to the Master Agreement: (i) to the payment of all amounts then due for interest evidenced by the Revenue Obligations, in respect of which, or for the benefit of which, money has been collected (other than Revenue Obligations which have become payable prior to such Event of Default and money for the payment of which is held by the Trustee), ratably without preference or priority of any kind, according to the amounts of interest evidenced by such Revenue Obligations due and payable; and (ii) to the payment of all amounts then due for principal evidenced by the Revenue Obligations, in respect of which, or for the benefit of which, money has been collected (other than Revenue Obligations which have become payable prior to such Event of Default and money for the payment of which is held by the Trustee), ratably without preference or priority of any kind, according to the amounts of principal evidenced by such Revenue Obligations due and payable. (c) if the unpaid Installment Payments, and the interest thereon, shall have become, and shall remain, immediately due and payable pursuant to the Master Agreement, to the 4116361 L2 26 payment of all amounts then due for principal and interest evidenced by the Revenue Obligations and, if the amount available therefor shall not be sufficient to pay in full the whole amount so due and unpaid, then to the payment thereof ratably, without preference or priority of principal over interest, or of interest over principal, or of any installment of interest over any other installment of interest, or of any Revenue Obligation over any other Revenue Obligation, to the persons entitled thereto without any discrimination or preference. Section 7.06. Trustee May Enforce Claims Without Possession of Revenue Obligations. All rights of action and claims under this Trust Agreement or the Revenue Obligations may be prosecuted and enforced by the Trustee without the possession of any of the Revenue Obligations or the production thereof in any proceeding relating thereto, and any such proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall, after provision for the payment of the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, be for the ratable benefit of the Owners of the Revenue Obligations in respect of which such judgment has been recovered. Section 7.07. Limitation on Suits. No Owner shall have any right to institute any proceeding,judicial or otherwise,with respect to this Trust Agreement, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless (a) such Owner shall have previously given written notice to the Trustee of a continuing Event of Default hereunder, (b)the Owners of not less than a majority of the aggregate principal evidenced by Revenue Obligations then Outstanding shall have made written request to the Trustee to institute proceedings in respect of such Event of Default in its own name as Trustee hereunder, (c) such Owner or Owners shall have afforded to the Trustee indemnity reasonably satisfactory to the Trustee against the costs, expenses and liabilities to be incurred in compliance with such request, (d)the Trustee for 60 days after its receipt of such notice, request and offer of indemnity shall have failed to institute any such proceedings, and (e)no direction inconsistent with such written request shall have been given to the Trustee during such 60-day period by the Owners of a majority of the aggregate principal evidenced by Revenue Obligations then Outstanding; it being understood and intended that no one or more Owners of Revenue Obligations shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Trust Agreement to affect, disturb or prejudice the rights of any other Owner of Revenue Obligations, or to obtain or seek to obtain priority or preference over any other Owner or to enforce any right under this Trust Agreement, except in the manner herein provided and for the equal and ratable benefit of all the Owners of Revenue Obligations. Section 7.08. No Liability by the Corporation to the Owners. Except as expressly provided herein, the Corporation shall not have any obligation or liability to the Owners with respect to the payment when due of the Installment Payments, and the interest thereon, by the District, or with respect to the performance by the District of the other agreements and covenants required to be performed by it contained in the Installment Purchase Agreement, the Master Agreement or herein, or with respect to the performance by the Trustee of any right or obligation required to be performed by it contained herein. Section 7.09. No Liability by the District to the Owners. Except for the payment when due of the Installment Payments, and the interest thereon, and the performance of the other 4116361 L2 27 agreements and covenants required to be performed by it contained in the Installment Purchase Agreement, the Master Agreement or herein, the District shall not have any obligation or liability to the Owners with respect to this Trust Agreement or the preparation, execution, delivery or transfer of the Revenue Obligations or the disbursement of the Installment Payments, and the interest thereon, by the Trustee to the Owners, or with respect to the performance by the Trustee of any right or obligation required to be performed by it contained herein. Section 7.10. No Liability of the Trustee to the Owners. Except as expressly provided herein, the Trustee shall not have any obligation or liability to the Owners with respect to the payment when due of the Installment Payments, and the interest thereon, by the District, or with respect to the performance by the Corporation or the District of the other agreements and covenants required to be performed by them, respectively contained in the Installment Purchase Agreement or herein. ARTICLE VIH THE TRUSTEE Section 8.01. Employment of the Trustee; Duties. The Corporation and the District hereby appoint and employ the Trustee to receive, deposit and disburse the Installment Payments, and the interest thereon, to prepare, execute, deliver and transfer the Revenue Obligations and to perform the other functions contained herein, all in the manner provided herein and subject to the conditions and terms hereof. By executing and delivering this Trust Agreement, the Trustee accepts the appointment and employment hereinabove referred to and accepts the rights and obligations of the Trustee provided herein, subject to the conditions and terns hereof. Other than when an Event of Default hereunder has occurred and is continuing,the Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Trust Agreement, and no implied covenants or obligations shall be read into this Trust Agreement against the Trustee. In case an Event of Default has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Trust 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. Section 8.02. Removal and Reshmation of the Trustee. The Corporation and the District may, by an instrument in writing, remove the Trustee initially a party hereto and any successor thereto unless an Event of Default shall have occurred and then be continuing, and shall remove the Trustee initially a party hereto and any successor thereto if at any time (a)requested to do so by an instrument or concurrent instruments in writing signed by the Owners of a majority of the aggregate principal evidenced by the Revenue Obligations at the time Outstanding (or their attorneys duly authorized in writing), or(b)the Trustee shall cease to be eligible in accordance with the following sentence, and shall appoint a successor Trustee. The Trustee shall be a bank having trust powers or a trust company in good standing in or incorporated under the laws of the United States or any state thereof, having (or if such bank or trust company is a member of a bank holding company system, its parent bank holding company shall have) a combined capital and surplus of at least $75,000,000, and be subject to supervision or examination by federal or state banking authorities. If such bank or trust company publishes a report of condition at least annually, pursuant to law or to the requirements of any supervising or 411636111 28 examining authority above referred to, then for the purposes of this Section the combined capital and surplus of such bank or trust company shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. The Trustee may at any time resign by giving written notice of such resignation to the Corporation and the District and by giving notice, by first class mail, postage prepaid, of such resignation to the Owners at their addresses appearing on the registration books maintained by the Trustee. Upon receiving such notice of resignation, the Corporation and the District shall promptly appoint a successor Trustee by an instrument in writing; provided, however, that in the event the District and the Corporation do not appoint a successor Trustee within 30 days following receipt of such notice of resignation, the resigning Trustee may, at the expense of the District, petition the appropriate court having jurisdiction to appoint a successor Trustee. Any resignation or removal of a Trustee and appointment of a successor Trustee shall become effective only upon acceptance of appointment by the successor Trustee. Any successor Trustee appointed under this Trust Agreement shall signify its acceptance of such appointment by executing and delivering to the District and the Corporation and to its predecessor Trustee a written acceptance thereof, and thereupon such successor Trustee, without any further act, deed or conveyance, shall become vested with all the moneys, estates, properties, rights, powers, trusts, duties and obligations of such predecessor Trustee, with like effect as if originally named Trustee herein;but,nevertheless, at the written request of the District or of the successor Trustee, such predecessor Trustee shall execute and deliver any and all instruments of conveyance or further assurance and do such other things as may reasonably be required for more fully and certainly vesting in and confirming to such successor Trustee all the right, title and interest of such predecessor Trustee in and to any property held by it under this Trust Agreement and shall pay over, transfer, assign and deliver to the successor Trustee any money or other property subject to the trusts and conditions herein set forth. Any corporation, association or agency into which the Trustee may be converted or merged, or with which it may be consolidated, or to which it may sell or transfer its corporate trust business and assets as a whole or substantially as a whole, or any corporation or association resulting from any such conversion, sale, merger, consolidation or transfer to which it is a party, provided that such entity meets the combined capital and surplus requirements of this Section, ipso facto, shall be and become successor trustee under this Trust Agreement and vested with all the trusts, powers, discretion, immunities, privileges and all other matters as was its predecessor, without the execution or filing of any instrument or any further act, deed or conveyance on the part of any of the parties hereto, anything herein to the contrary notwithstanding. Section 8.03. Compensation and Indemnification of the Trustee. The District shall from time to time, subject to any written agreement then in effect with the Trustee, pay the Trustee reasonable compensation for all its services rendered hereunder and reimburse the Trustee for all its reasonable advances and expenditures (which shall not include "overhead expenses" except as such expenses are included as a component of the Trustee's stated annual fees or disclosed transaction fees) hereunder, including but not limited to advances to and reasonable fees and reasonable expenses of accountants, agents, appraisers, consultants or other experts, and counsel not directly employed by the Trustee but an attorney or firm of attorneys retained by the Trustee, employed by it in the exercise and performance of its rights and 4116361 L2 29 obligations hereunder; provided, however, that the Trustee shall not have any lien for such compensation or reimbursement against any moneys held by it in any of the funds or accounts established hereunder. The Trustee may take whatever legal actions are lawfully available to it directly against the Corporation or the District. Except as otherwise expressly provided herein, no provision of this Trust Agreement shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder or in the exercise of any of its rights or powers hereunder. The District, to the extent permitted by law, agrees to indemnify and save the Trustee, its directors, officers, employees and agents harmless against any liabilities which it may incur in the exercise and performance of its powers and duties hereunder or any other document related to this Trust Agreement, including but not limited to costs and expenses incurred in defending against any claim or liability,which are not due to its negligence or willful misconduct. Section 8.04. Protection of the Trustee. The Trustee shall be protected and shall incur no liability in acting or proceeding in good faith upon any affidavit, bond, certificate, consent, notice, request, requisition, resolution, statement, waiver or other paper or document which it shall in good faith believe to be genuine and to have been adopted, executed or delivered by the proper party or pursuant to any of the provisions hereof, and the Trustee shall be under no duty to make any investigation or inquiry as to any statements contained or matters referred to in any such instrument, but may accept and rely upon the same as conclusive evidence of the truth and accuracy of such statements. The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Trust Agreement at the request or direction of any of the Owners of the Revenue Obligations pursuant to this Trust Agreement, unless such Owners shall have offered to the Trustee security or indemnity, reasonably satisfactory to the Trustee, against the reasonable costs, expenses and liabilities which might be incurred by it in compliance with such request or direction. The Trustee may consult with counsel, who may be counsel to the Corporation or the District, with regard to legal questions, and the opinion of such counsel shall be full and complete authorization and protection in respect to any action taken or suffered by it hereunder in good faith in accordance therewith. The Trustee shall not be responsible for the sufficiency of the Revenue Obligations or the Installment Purchase Agreement, or of the assignment made to it hereunder, or for statements made in the preliminary or final official statement relating to the Revenue Obligations. The Trustee shall not be required to take notice or be deemed to have notice of any default or Event of Default hereunder, except failure of any of the payments to be made to the Trustee required to be made hereunder or under the Installment Purchase Agreement, unless the Trustee shall be specifically notified in writing of such default or Event of Default by the District, the Corporation or the Owners of not less than 5% of the aggregate principal evidenced by the Revenue Obligations then Outstanding. Whenever in the administration of its rights and obligations hereunder the Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering any action hereunder, such matter(unless other evidence in respect thereof be herein specifically 41163611.2 30 prescribed) may be deemed to be conclusively proved and established by a Written Certificate of the District or a Written Certificate of the Corporation, and such certificate shall be full warrant to the Trustee for any action taken or suffered under the provisions hereof upon the faith thereof, but in its discretion the Trustee may, in lieu thereof, accept other evidence of such matter or may require such additional evidence as it deems reasonable. The Trustee may buy, sell, own, hold and deal in any of the Revenue Obligations and may join in any action which any Owner may be entitled to take with like effect as if the Trustee were not a party hereto. The Trustee, either as principal or agent, may also engage in or be interested in any financial or other transaction with the Corporation or the District, and may act as agent, depository or trustee for any committee or body of Owners or of owners of obligations of the Corporation or the District as freely as if it were not the Trustee hereunder. The Trustee may, to the extent reasonably necessary, execute any of the trusts or powers hereof and perform any rights and obligations required of it hereunder by or through agents, attorneys or receivers, and shall be entitled to advice of counsel concerning all matters of trust and its rights and obligations hereunder, and the Trustee shall not be answerable for the negligence or misconduct of any such agent, attorney or receiver selected by it with reasonable care; provided, however, that in the event of any negligence or misconduct of any such attorney, agent or receiver, the Trustee shall diligently pursue all remedies of the Trustee against such agent, attorney or receiver. The Trustee shall not be liable for any error of judgment made by it in good faith unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts. The Trustee shall not be answerable for the exercise of any trusts or powers hereunder or for anything whatsoever in connection with the funds established hereunder, except only for its own willful misconduct, negligence or breach of an obligation hereunder. The Trustee may, on behalf of the Owners, intervene in any judicial proceeding to which the Corporation or the District is a party and which, in the opinion of the Trustee and its counsel, affects the Revenue Obligations or the security therefor, and shall do so if requested in writing by the Owners of at least 5% of the aggregate principal evidenced by Revenue Obligations then Outstanding, provided the Trustee shall have no duty to take such action unless it has been indemnified to its reasonable satisfaction against all risk or liability arising from such action. ARTICLE IX AMENDMENT OF OR SUPPLEMENT TO TRUST AGREEMENT Section 9.01. Amendment or Supplement. This Trust Agreement and the rights and obligations of the Corporation, the District, the Owners and the Trustee hereunder may be amended or supplemented at any time by an amendment hereof or supplement hereto which shall become binding when the prior written consents of the Owners of a majority of the aggregate principal evidenced by the Revenue Obligations then Outstanding, exclusive of Revenue Obligations disqualified as provided in Section 9.02 hereof, are filed with the Trustee. No such amendment or supplement shall (i) extend the stated Principal Payment Date of any Revenue Obligation or reduce the rate of interest evidenced thereby or extend the time of payment of such 4116361L2 31 interest or reduce the amount of principal evidenced thereby or change the prepayment terms and provisions or the provisions regarding delivery of notice of prepayment without the prior written consent of the Owner of each Revenue Obligation so affected, (ii)reduce the percentage of Owners whose consent is required for the execution of any amendment hereof or supplement hereto without the prior written consent of the Owners of all Revenue Obligations then Outstanding, (iii)modify any of the rights or obligations of the Trustee without the prior written consent of the Trustee, or (iv)amend this Section without the prior written consent of the Owners of all Revenue Obligations then Outstanding. (a) This Trust Agreement and the rights and obligations of the Corporation, the District, the Owners and the Trustee hereunder may also be amended or supplemented at any time by an amendment hereof or supplement hereto which shall become binding upon execution, without the written consents of any Owners, but only to the extent permitted by law and only for any one or more of the following purposes: (i) to add to the agreements, conditions, covenants and terms required by the Corporation or the District to be observed or performed herein other agreements, conditions, covenants and terms thereafter to be observed or performed by the Corporation or the District, or to surrender any right or power reserved herein to or conferred herein on the Corporation or the District; (ii) to make such provisions for the purpose of curing any ambiguity or of correcting, curing or supplementing any defective provision contained herein or in regard to questions arising hereunder which the Corporation or the District may deem desirable or necessary and not inconsistent herewith; or (iii) for any other reason, provided such amendment or supplement does not adversely affect the rights or interests of the Owners. Section 9.02. Disqualified Revenue Obligations. Revenue Obligations owned or held by or for the account of the District (but excluding Revenue Obligations held in any pension or retirement fund of the District) shall not be deemed Outstanding for the purpose of any consent or other action or any calculation of Outstanding Revenue Obligations provided in this Article, and shall not be entitled to consent to or take any other action provided in this Article, and the Trustee may adopt appropriate regulations to require each Owner, before his consent provided for herein shall be deemed effective, to reveal if the Revenue Obligations as to which such consent is given are disqualified as provided in this Section. Section 9.03. Endorsement or Replacement of Revenue Obligations After Amendment or Supplement. After the effective date of any action taken as hereinabove provided in this Article, the Trustee may determine that the Revenue Obligations may bear a notation by endorsement in form approved by the Trustee as to such action, and in that case upon demand of the Owner of any Outstanding Revenue Obligation and presentation of such Revenue Obligation for such purpose at the Principal Office a suitable notation as to such action shall be made on such Revenue Obligation. If the Trustee shall receive an Opinion of Counsel advising that new Revenue Obligations modified to conform to such action are necessary, modified Revenue Obligations shall be prepared, and in that case upon demand of the Owner of any au636n2 32 Outstanding Revenue Obligations such new Revenue Obligations shall be exchanged at the Principal Office without cost to each Owner for Revenue Obligations then Outstanding upon surrender of such Outstanding Revenue Obligations. Section 9.04. Amendment by Mutual Consent. The provisions of this Article shall not prevent any Owner from accepting any amendment as to the particular Revenue Obligations owned by such Owner,provided that due notation thereof is made on such Revenue Obligations. ARTICLE X DEFEASANCE Section 10.01. Discharee of Revenue Obligations and Trust Agreement. (a)If the Trustee shall pay or cause to be paid or there shall otherwise be paid (i)to the Owners of all Outstanding Revenue Obligations the interest and principal evidenced thereby at the times and in the manner stipulated herein and therein, and (ii)all other amounts due hereunder and under the Installment Purchase Agreement,then such Owners shall cease to be entitled to the pledge of and lien on the amounts on deposit in the funds and accounts established hereunder, as provided herein, and all agreements and covenants of the Corporation,the District, and the Trustee to such Owners hereunder shall thereupon cease, terminate and become void and shall be discharged and satisfied. (b) Any Outstanding Revenue Obligation shall be deemed to have been paid within the meaning and with the effect expressed in this Section when the whole amount of the principal, premium, if any, and interest evidenced by such Revenue Obligation shall have been paid or when (i) in case said Revenue Obligation or portion thereof has been selected for prepayment in accordance with Section 4.03 hereof prior to its stated Principal Payment Date, the District shall have given to the Trustee irrevocable instructions to give, in accordance with the provisions of Section 4.03 hereof, notice of prepayment of such Revenue Obligation, or portion thereof, (ii)there shall be on deposit with the Trustee, moneys, or Government Obligations, or any combination thereof, the principal of and the interest on which when due, and without any reinvestment thereof,will provide moneys which shall be sufficient to pay when due the principal, premium, if any, and interest evidenced by such Revenue Obligation and due and to become due on or prior to the prepayment date or its stated Principal Payment Date, as the case may be, and (iii)in the event the stated Principal Payment Date of such Revenue Obligation will not occur, and said Revenue Obligation is not to be prepaid, within the next succeeding 60 days, the District shall have given the Trustee irrevocable instructions to give notice, as soon as practicable in the same manner as a notice of prepayment given pursuant to Section 4.03 hereof, to the Owner of such Revenue Obligation, or portion thereof, stating that the deposit of moneys or Government Obligations required by clause (ii) of this subsection has been made with the Trustee and that said Revenue Obligation, or portion thereof, is deemed to have been paid in accordance with this Section and stating such Principal Payment Date or prepayment date upon which moneys are to be available for the payment of the principal, premium, if any, and interest evidenced by said Revenue Obligation, or portion thereof. Neither the moneys nor the Government Obligations deposited with the Trustee pursuant to this Section nor principal or interest payments on any such Government Obligations shall be 4116361L2 33 withdrawn or used for any purpose other than, and shall be held in trust for and pledged to, the payment of the principal, premium, if any, and interest evidenced by said Revenue Obligation, or portions thereof If payment of less than all of the Revenue Obligations is to be provided for in the manner and with the effect expressed in this Section, the Trustee or the District, as applicable, shall select such Revenue Obligations, or portions thereof, in the manner specified in Section 4.03 hereof for selection for prepayment of less than all of the Revenue Obligations, in the principal amounts designated to the Trustee by the District. (c) After the payment of all the interest, prepayment premium, if any, and principal evidenced by all Outstanding Revenue Obligations and all other amounts due hereunder and under the Installment Purchase Agreement as provided in this Section, the Trustee shall execute and deliver to the Corporation and the District all such instruments as may be necessary or desirable to evidence the discharge and satisfaction of this Trust Agreement, the Trustee shall pay over or deliver to the District all moneys or securities held by it pursuant hereto which are not required for the payment of the interest, prepayment premium, if any, and principal evidenced by such Revenue Obligations and all other amounts due hereunder and under the Installment Purchase Agreement. (d) Prior to any defeasance becoming effective under this Article, the District shall cause to be delivered (i)an executed copy of a report, addressed to the Trustee and the District, in form and in substance acceptable to the District, of a nationally recognized certified public accountant, or firm of such accountants, verifying that the Government Obligations and cash, if any, satisfy the requirements of clause (ii) of subsection(b) of this Section (a `Verification"), (ii) a copy of the escrow deposit agreement entered into in connection with such defeasance, which escrow deposit agreement shall provide that no substitution of Government Obligations shall be permitted except with other Government Obligations and upon delivery of a new Verification and no reinvestment of Government Obligations shall be permitted except as contemplated by the original Verification or upon delivery of a new Verification, and(iii) a copy of an Opinion of Counsel, dated the date of such defeasance and addressed to the Trustee and the District, in form and in substance acceptable to the District, to the effect that such Revenue Obligations have been paid within the meaning and with the effect expressed in this Trust Agreement, and all agreements and covenants of the Corporation, the District and the Trustee to the Owners of such Revenue Obligations under this Trust Agreement have ceased, terminated and become void and have been discharged and satisfied. Section 10.02. Unclaimed Moneys. Any moneys held by the Trustee in trust for the payment and discharge of the interest or principal evidenced by any of the Revenue Obligations which remain unclaimed for two years after the date when such interest or principal evidenced by such Revenue Obligations have become payable, if such moneys were held by the Trustee at such date, or for two years after the date of deposit of such moneys if deposited with the Trustee after the date when the interest and principal evidenced by such Revenue Obligations have become payable, shall be repaid by the Trustee to the District as its absolute property free from trust, and the Trustee shall thereupon be released and discharged with respect thereto and the Owners shall look only to the District for the payment of the interest and principal evidenced by such Revenue Obligations. 4116361 L2 34 ARTICLE XI MISCELLANEOUS Section 11.01. Benefits of Trust Agreement. Nothing contained herein, expressed or implied, is intended to give to any Person other than the Corporation, the District, the Trustee and the Owners any claim, remedy or right under or pursuant hereto, and any agreement, condition, covenant or term required herein to be observed or performed by or on behalf of the Corporation or the District shall be for the sole and exclusive benefit of the Trustee and the Owners. Section 11.02. Successor Deemed Included in all References to Predecessor. Whenever the Corporation, the District or the Trustee, or any officer thereof, is named or referred to herein, such reference shall be deemed to include the successor to the powers, duties and functions that are presently vested in the Corporation, the District or the Trustee, or such officer, and all agreements, conditions, covenants and terms required hereby to be observed or performed by or on behalf of the Corporation, the District or the Trustee, or any officer thereof, shall bind and inure to the benefit of the respective successors thereof whether so expressed or not. Section 11.03. Execution of Documents by Owners. Any declaration, request or other instrument which is permitted or required herein to be executed by Owners may be in one or more instruments of similar tenor and may be executed by Owners in person or by their attorneys appointed in writing. The fact and date of the execution by any Owner or his attorney of any declaration, request or other instrument or of any writing appointing such attorney may be proved by the certificate of any notary public or other officer authorized to take acknowledgments of deeds to be recorded in the state or territory in which he purports to act that the Person signing such declaration, request or other instrument or writing acknowledged to him the execution thereof, or by an affidavit of a witness of such execution duly sworn to before such notary public or other officer, or by such other proof as the Trustee may accept which it may deem sufficient. The ownership of any Revenue Obligations and the amount, payment date, number and date of owning the same may be proved by the registration books maintained by the Trustee pursuant to the provisions of Section 2.07 hereof. Any declaration, request or other instrument in writing of the Owner of any Revenue Obligation shall bind all future Owners of such Revenue Obligation with respect to anything done or suffered to be done by the Corporation, the District or the Trustee in good faith and in accordance therewith. Section 11.04. Waiver of Personal Liability. Notwithstanding anything contained herein to the contrary, no member, officer or employee of the District or the Corporation shall be individually or personally liable for the payment of any moneys, including without limitation,the interest or principal evidenced by the Revenue Obligations, but nothing contained herein shall relieve any member, officer or employee of the District or the Corporation from the performance au636m2 35 of any official duty provided by any applicable provisions of law, by the Installment Purchase Agreement or hereby. Section 11.05. Acquisition of Revenue Obligations by District. All Revenue Obligations acquired by the District, whether by purchase or gift or otherwise, shall be surrendered to the Trustee for cancellation. Section 11.06. Content of Certificates. Every Written Certificate of the District and every Written Certificate of the Corporation with respect to compliance with any agreement, condition, covenant or term contained herein shall include (a)a statement that the Person making or giving such certificate has read such agreement, condition, covenant or term and the definitions herein relating thereto, (b)a brief statement as to the nature and scope of the examination or investigation upon which the statements contained in such certificate are based, (c) a statement that, in the opinion of the signer, the signer has made or caused to be made such examination or investigation as is necessary to enable the signer to express an informed opinion as to whether or not such agreement, condition, covenant or term has been complied with, and (d)a statement as to whether, in the opinion of the signer, such agreement, condition, covenant or tern has been complied with. Any Written Certificate of the District and any Written Certificate of the Corporation may be based, insofar as it relates to legal matters, upon an Opinion of Counsel, unless the Person making or giving such certificate knows that the Opinion of Counsel with respect to the matters upon which each Person's certificate may be based, as aforesaid, is erroneous, or in the exercise of reasonable care should have known that the same was erroneous. Any Opinion of Counsel may be based, insofar as it relates to factual matters, upon information which is in the possession of the District or the Corporation upon a representation by an officer or officers of the District or the Corporation, as the case may be, unless the counsel executing such Opinion of Counsel knows that the representation with respect to the matters upon which such counsel's opinion may be based, as aforesaid, is erroneous, or in the exercise of reasonable care should have known that the same was erroneous. Section 11.07. Funds and Accounts. Any fund or account required to be established and maintained herein by the Trustee may be established and maintained in the accounting records of the Trustee either as an account or a fund, and may, for the purposes of such accounting records, any audits thereof and any reports or statements with respect thereto, be treated either as an account or a fund, but all such records with respect to all such funds and accounts shall at all times be maintained in accordance with sound accounting practice and with due regard for the protection of the security of the Revenue Obligations and the rights of the Owners. The Trustee may establish such funds and accounts as it deems necessary to perform its obligations hereunder. Trustee may commingle any of the moneys held by it hereunder for investment purposes only; provided, however, that the Trustee shall account separately for the moneys in each fund or account established pursuant to this Trust Agreement. Section 11.05. Article and Section Headings. Gender and References. The singular form of any word used herein, including the terms defined in Section 1.01 hereof, shall include 4116361L2 36 the plural, and vice versa, unless the context otherwise requires. The use herein of a pronoun of any gender shall include correlative words of the other genders. The headings or titles of the several Articles and Sections hereof and the table of contents appended hereto shall be solely for convenience of reference and shall not affect the meaning, construction or effect hereof. All references herein to "Articles," "Sections," subsections or clauses are to the corresponding Articles, Sections, subsections or clauses hereof, and the words "hereby," "herein," "hereof," "hereto," "herewith," "hereunder" and other words of similar import refer to this Trust Agreement as a whole and not to any particular Article, Section, subsection or clause thereof. Section 11.09. Partial Invalidity. If any one or more of the agreements, conditions, covenants or terms required herein to be observed or performed by or on the part of the Corporation, the District or the Trustee shall be contrary to law, then such agreement or agreements, such condition or conditions, such covenant or covenants or such term or terms shall be null and void to the extent contrary to law and shall be deemed separable from the remaining agreements, conditions, covenants and terms hereof and shall in no way affect the validity hereof or of the Revenue Obligations, and the Owners shall retain all the benefit,protection and security afforded to them under any applicable provisions of law. The Corporation, the District and the Trustee hereby declare that they would have executed this Trust Agreement, and each and every Article, Section, paragraph, subsection, sentence, clause and phrase hereof and would have authorized the execution and delivery of the Revenue Obligations pursuant hereto irrespective of the fact that any one or more Articles, Sections, paragraphs, subsections, sentences, clauses or phrases hereof or the application thereof to any Person or circumstance may be held to be unconstitutional, unenforceable or invalid. Section 11.10. California Law. This Trust Agreement shall be governed by and construed in accordance with the laws of the State. Section 11.11. Notices. Any written notice, statement, demand, consent, approval, authorization, offer, designation, request or other communication to be given hereunder shall be given to the party entitled thereto at its address set forth below, or at such other address as such party may provide to the other parties in writing from time to time, namely: If to the District: Orange County Sanitation District 10844 Ellis Avenue Fountain Valley, California 92708 Attention: Director of Finance and Administrative Services 4116361L2 37 If to the Corporation: Orange County Sanitation District Financing Corporation c/o Orange County Sanitation District 10844 Ellis Avenue Fountain Valley, California 92708 Attention: Treasurer If to the Trustee: U.S. Bank National Association 633 West Fifth Street 24th Floor Los Angeles, California 90071 Attention: Corporate Trust Services Each such notice, statement, demand, consent, approval, authorization, offer, designation, request or other communication hereunder shall be deemed delivered to the party to whom it is addressed (a) if personally served or delivered, upon delivery, (b) if given by electronic communication, e.g. facsimile or telecopier or e-mail (with a PDF attachment, if applicable), upon the sender's receipt of an appropriate written acknowledgment, (c) if given by registered or certified mail, return receipt requested, deposited with the United States mail postage prepaid, 72 hours after such notice is deposited with the United States mail, (d) if given by overnight courier, with courier charges prepaid, 24 hours after delivery to said overnight courier, or (e)if given by any other means,upon delivery at the address specified in this Section. Section 11.12. Effective Date. This Trust Agreement shall become effective upon its execution and delivery. Section 11.13. Execution in Counterparts. This Trust Agreement may be simultaneously executed in several counterparts, each of which shall be deemed an original, and all of which shall constitute but one and the same instrument. [Remainder of page intentionally left blank.] 4116361L2 38 IN WITNESS WHEREOF,the parties hereto have caused this Trust Agreement to be executed by their respective officers thereunto duly authorized, all as of the day and year first written above. ORANGE COUNTY SANITATION DISTRICT FINANCING CORPORATION By: Treasurer ORANGE COUNTY SANITATION DISTRICT By: Chair of the Board of Directors (SEAL) Attest: By: Clerk of the Board of Directors U.S. BANK NATIONAL ASSOCIATION, as Trustee By: Authorized Officer 4116361 L2 39 EXHIBIT A FORM OF REVENUE OBLIGATION No. R— •*•$•*• Unless this Revenue Obligation is presented by an authorized representative of The Depository Trust Company to the Trustee for registration of transfer, exchange or payment, and any Revenue Obligation executed and delivered is registered in the name of Cede & Co. or such other name as requested by an authorized representative of The Depository Trust Company and any payment is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the Registered Owner hereof, Cede&Co.,has an interest herein. ORANGE COUNTY SANITATION DISTRICT WASTEWATER REFUNDING REVENUE OBLIGATION SERIES 2015A Such revenue obligations are certificates of participation evidencing direct,undivided fractional interests in the Installment Purchase Agreement,dated as of February 1,2015,by and between the Orange County Sanitation District and the Orange County Sanitation District Financing Corporation and the related Installment Payments,and the interest thereon. PRINCIPAL PAYMENT DATE INTEREST RATE DATED DATE CUSIP February 1, February_, 2015 REGISTERED OWNER: Cede&Co. PRINCIPAL AMOUNT: DOLLARS THIS IS TO CERTIFY that the Registered Owner of this Revenue Obligation (this "Revenue Obligation"), as identified above, is the owner of a direct, fractional undivided interest in certain installment payments ("Installment Payments"), and the interest thereon,payable under and pursuant to the Installment Purchase Agreement, dated as of February 1, 2015 (the "Installment Purchase Agreement'), by and between the Orange County Sanitation District (the "District'), a county sanitation district organized and existing under the laws of the State of California, and the Orange County Sanitation District Financing Corporation (the "Corporation"), a nonprofit public benefit corporation organized and existing under the laws of the State of California. Certain of the rights of the Corporation under the Installment Purchase Agreement, including the right to receive the Installment Payments, and the interest thereon, have been assigned without recourse by the Corporation to U.S. Bank National Association, a national banking association duly organized and existing under the laws of the United States of America, as trustee (the "Trustee") under the Trust Agreement, dated as of February 1, 2015 (the "Trust Agreement'), by and among the Trustee, the District and the Corporation. Capitalized undefined terms used herein shall have the meanings ascribed thereto in the Trust Agreement. 41163611.2 A-1 The District has executed and delivered the Master Agreement for District Obligations, dated as of August 1, 2000 (the "Master Agreement'), by and between the District and the Corporation, pursuant to which the District establishes and declares the conditions and terms upon which obligations such as the Installment Purchase Agreement, and the Installment Payments and the interest thereon, will be incurred and secured. This Revenue Obligation is one of the duly authorized Orange County Sanitation District Wastewater Refunding Revenue Obligations, Series 2015A (the "Revenue Obligations") evidencing principal in the aggregate amount of $ , executed pursuant to the terms of the Trust Agreement. The Revenue Obligations evidence direct, fractional undivided interests in the Installment Payments, and the interest thereon, payable under the Installment Purchase Agreement. The Revenue Obligations are executed and delivered to refinance certain improvements to the wastewater collection, treatment and disposal facilities of the District (the "Wastewater System") and to pay the costs of issuance incurred in connection therewith and to pay certain other related costs. The Installment Payments, and the interest thereon, are to be paid by the District pursuant to the Installment Purchase Agreement in consideration for the purchase of certain improvements to the Wastewater System and for the other agreements and obligations undertaken by the Corporation under the Installment Purchase Agreement and the Trust Agreement. The income and revenue received by the District from the operation of the Wastewater System remaining after the payment of maintenance and operation or ownership costs of the Wastewater System (as more fully described in the Installment Purchase Agreement, the "Net Revenues") are, pursuant to the Master Agreement, pledged to the payment of the Senior Obligations and Reimbursement Obligations with respect to Senior Obligations (as such terms are defined in the Master Agreement). The Installment Purchase Agreement constitutes a Senior Obligation and, as such, shall be subject to the provisions of the Master Agreement, and shall be afforded all of the advantages, benefits, interests and security afforded Senior Obligations pursuant to the Master Agreement. The Installment Purchase Agreement is payable on a parity with the other existing Senior Obligations. The District may at any time incur Senior Obligations in addition to existing Senior Obligations and the Installment Purchase Agreement payable from Net Revenues as provided in the Master Agreement on a parity with all other Senior Obligations theretofore incurred,but only subject to the conditions and upon compliance with the procedures set forth in the Master Agreement. The District is not required to advance any moneys derived from any source of income other than Net Revenues and the other funds provided in the Installment Purchase Agreement for the payment of the Installment Payments, and the interest thereon, and other payments required to be made by it under the Installment Purchase Agreement, or for the performance of any agreements or covenants required to be performed by it contained therein. The obligation of the District to pay the Installment Payments, and the interest thereon, and other payments required to be made by it under the Installment Purchase Agreement is a special obligation of the District 41163611.2 A-2 payable, in the manner provided in the Installment Purchase Agreement, solely from such Net Revenues and other funds provided for therein, and does not constitute a debt of the District or of the State of California, or of any political subdivision thereof, in contravention of any constitutional or statutory debt limitation or restriction. Reference is hereby made to the Master Agreement, the Installment Purchase Agreement and to the Trust Agreement and any and all amendments thereof and supplements thereto for a description of the terms under which the District's obligation to pay the Installment Payments, and the interest thereon, is incurred, the Revenue Obligations are executed and delivered, the provisions with regard to the nature and extent of the Net Revenues, and the rights of the Owners of the Revenue Obligations. All of the terms of the Master Agreement, the Installment Purchase Agreement and the Trust Agreement are hereby incorporated herein. The Trust Agreement constitutes a contract among the District, the Corporation and the Trustee for the benefit of the Owners of the Revenue Obligations, to all the provisions of which the Owner of this Revenue Obligation,by acceptance hereof, agrees and consents. The Registered Owner of this Revenue Obligation is entitled to receive, subject to the terms of the Trust Agreement and any right of prepayment as provided herein or therein, on the Principal Payment Date set forth above, upon presentation and surrender of this Revenue Obligation at the principal corporate trust office of the Trustee in Los Angeles, California (the `Principal Office"),the Principal Amount specified above, evidencing the Owner's interest in the Installment Payments coming due on the Principal Payment Date, and to receive on February I and August 1 of each year, commencing on August 1, 2015 (each an "Interest Payment Date"), interest accrued thereon at the Interest Rate specified above, computed on the basis of a 360-day year consisting of twelve 30-day months, until said Principal Amount is paid in full, evidencing the Registered Owner's interest in the interest evidenced by the Installment Payments coming due on each of said dates. This Revenue Obligation shall evidence interest from the Interest Payment Date next preceding its date of execution to which interest has been paid in full, unless such date of execution shall be after the 15th day of the month next preceding an Interest Payment Date, whether or not such day is a business day (each such date, a "Record Date"), and on or prior to the following Interest Payment Date, in which case this Revenue Obligation shall evidence interest from such Interest Payment Date, or unless such date of execution shall be on or prior to the first Record Date, in which case this Revenue Obligation shall evidence interest from the Dated Date specified above. Notwithstanding the foregoing, if, as shown by the records of the Trustee, interest evidenced by the Revenue Obligations shall be in default, this Revenue Obligation shall evidence interest from the last Interest Payment Date to which interest has been paid in full or duly provided for. Payments of interest evidenced by the Revenue Obligations shall be made to the Owners thereof(as determined at the close of business on the Record Date next preceding the related Interest Payment Date) by check or draft of the Trustee mailed to the address of each such Owner as it appears on the registration books maintained by the Trustee pursuant to the Trust Agreement, or to such other address as may be famished in writing to the Trustee by such Owner. Payment of principal and prepayment premium, if any, evidenced by the Revenue Obligations, on their stated principal payment dates or on prepayment in whole or in part prior 41163611.2 A-3 thereto, shall be made only upon presentation and surrender of the Revenue Obligations at the Principal Office. All such amounts are payable in lawful money of the United States of America. The Revenue Obligations are authorized to be executed and delivered in the form of fully registered certificates in denominations of$5,000 or any integral multiple thereof("Authorized Denominations"). This Revenue Obligation may be transferred or exchanged by the Registered Owner hereof, in person or by his attorney duly authorized in writing, at the Principal Office,but only in the manner, subject to the limitations and upon payment of the charges provided in the Trust Agreement. The Trustee shall not be required to transfer or exchange any Revenue Obligation during the period commencing on the date five days before the date of selection of Revenue Obligations for prepayment and ending on the date of mailing of notice of such prepayment, nor shall the Trustee be required to transfer or exchange any Revenue Obligation or portion thereof selected for prepayment from and after the date of mailing the notice of prepayment thereof. The Trustee may treat the Registered Owner hereof as the absolute owner hereof for all purposes, whether or not the principal or interest evidenced by this Revenue Obligation shall be overdue, and the Trustee shall not be affected by any knowledge or notice to the contrary; and payment of the principal and interest evidenced by this Revenue Obligation shall be made only to such Registered Owner, which payments shall be valid and effectual to satisfy and discharge the liability evidenced by this Revenue Obligation to the extent of the sum or sums so paid. The Revenue Obligations are subject to prepayment prior to their stated Principal Payment Dates in accordance with the Trust Agreement. To the extent and in the manner permitted by the terms of the Trust Agreement, the Trust Agreement and the rights and obligations of the Corporation, the District, the Owners and the Trustee under the Trust Agreement may be amended or supplemented at any time by an amendment or supplement thereto which shall become binding when the prior written consents of the Owners of a majority of the aggregate principal evidenced by the Revenue Obligations then outstanding, exclusive of Revenue Obligations disqualified as provided under the Trust Agreement, are filed with the Trustee. No such supplement or amendment shall (a)extend the stated Principal Payment Date of any Revenue Obligation or reduce the rate of interest evidenced thereby or extend the time of payment of such interest or reduce the amount of principal evidenced thereby or change the prepayment terms and provisions or the provisions regarding delivery of notice of prepayment without the prior written consent of the Owner of each Revenue Obligation so affected, (b)reduce the percentage of Owners whose consent is required for the execution of any amendment of or supplement to the Trust Agreement without the prior written consent of the Owners of all Revenue Obligations then outstanding, (c)modify any of the rights or obligations of the Trustee without the prior written consent of the Trustee, or (d)amend the amendment provisions of the Trust Agreement without the prior written consent of the Owners of all Revenue Obligations then outstanding. 41163611.2 A-4 To the extent and in the manner permitted by the terms of the Trust Agreement, the Trust Agreement and the rights and obligations of the Corporation, the District, the Owners and the Trustee under the Trust Agreement may also be amended or supplemented at any time by an amendment or supplement thereto which shall become binding upon execution, without the written consents of any Owners,but only to the extent permitted by law and only(a)to add to the agreements, conditions, covenants and terns required by the Corporation or the District to be observed or performed under the Trust Agreement other agreements, conditions, covenants and terms thereafter to be observed or performed by the Corporation or the District, or to surrender any right or power reserved therein to or conferred therein on the Corporation or the District, and which in either case shall not adversely affect the rights or interests of the Owners, (b)to make such provisions for the purpose of curing any ambiguity or of correcting, curing or supplementing any defective provision contained in the Trust Agreement or in regard to questions arising thereunder which the Corporation or the District may deem desirable or necessary and not inconsistent therewith or (c) for any other reason, provided such amendment or supplement does not adversely affect the rights or interests of the Owners. THE DISTRICT HAS CERTIFIED that all acts, conditions and things required by the statutes of the State of California and by the Trust Agreement to exist, to have happened and to have been performed precedent to and in connection with the execution and delivery of this Revenue Obligation do exist, have happened and have been performed in regular and due time, form and manner as required by law, and that the Trustee is duly authorized to execute and deliver this Revenue Obligation. IN WITNESS WHEREOF, this Revenue Obligation has been executed by the manual signature of an authorized signatory of the Trustee as of the date set forth below. Date: February_, 2015 U.S. BANK NATIONAL ASSOCIATION, as Trustee By: Authorized Officer 41163611.2 A-5 ASSIGNMENT For value received, the undersigned do(es) hereby sell, assign and transfer unto the within-mentioned Revenue Obligation and hereby irrevocably constitute(s) and appoint(s) attorney, to transfer the same on the books of the Trustee with full power of substitution in the premises. Dated: Note: The signature(s)on this Assignment must correspond with the narne(s) as written on the face of the within registered Revenue Obligation in every particular, without alteration or enlargement or any change whatsoever. Tax I.D. #: Signature Guaranteed: Now: Signatme(s)must be guaranteed by an eligible Note: The signature(s)on this Assignment must correspond guarantor. with the name(s)as written on the face of the within Revenue Obligation in every particular without alteration or enlargement or any change whatsoever. 41163611.2 A-6 DRAFT OF 12/01/14 INSTALLMENT PURCHASE AGREEMENT by and between ORANGE COUNTY SANITATION DISTRICT and ORANGE COUNTY SANITATION DISTRICT FINANCING CORPORATION Dated as of February 1, 2015 Relating to Orange County Sanitation District Wastewater Refunding Revenue Obligations Series 2015A 411635412 11411481 TABLE OF CONTENTS Page ARTICLE I DEFINITIONS.................................................................................................2 Section 1.01. Definitions............................................................................................2 Section 1.02. Definitions in Master Agreement and Trust Agreement......................3 ARTICLE II PURCHASE OF PROJECT BY,AND SALE THEREOF TO,THE CORPORATION; PAYMENT OF PURCHASE PRICE...............................4 Section 2.01. Acquisition of the Project....................................................................4 Section 2.02. Payment of Purchase Price...................................................................4 ARTICLE IH PURCHASE OF PROJECT BY,AND SALE THEREOF TO,THE DISTRICT; INSTALLMENT PAYMENTS...................................................4 Section 3.01. Purchase and Sale of Project................................................................4 Section 3.02. Installment Payments...........................................................................4 Section3.03. Reserved...............................................................................................6 Section 3.04. Obligation Absolute.............................................................................6 Section 3.05. Nature of Agreement............................................................................6 ARTICLE IV PREPAYMENT OF INSTALLMENT PAYMENTS.....................................7 Section 4.01. Prepayment of Installment Payments...................................................7 Section4.02. Notice...................................................................................................7 Section 4.03. Discharge of Obligations.....................................................................7 ARTICLE COVENANTS .................................................................................................7 Section 5.01. Compliance with Master Agreement...................................................7 Section 5.02. Compliance with Installment Purchase Agreement.............................7 Section 5.03. Protection of Security and Rights........................................................ 8 Section 5.04. Indemnification of Corporation........................................................... 8 Section 5.05. Further Assurances............................................................................... 8 ARTICLE VI EVENTS OF DEFAULT AND REMEDIES OF THE CORPORATION............................................................................................. 8 Section 6.01. Events of Default................................................................................. 8 Section 6.02. Remedies on Default............................................................................9 Section6.03. Non-Waiver..........................................................................................9 Section 6.04. Remedies Not Exclusive.................................................................... 10 ARTICLE VII AMENDMENTS ........................................................................................... 10 Section7.01. Amendments...................................................................................... 10 ARTICLE VIII MISCELLANEOUS...................................................................................... 11 Section 8.01. Liability of District Limited............................................................... 11 Section 8.02. Limitation of Rights........................................................................... 11 Section8.03. Assignment ........................................................................................ 11 Section8.04. Notices............................................................................................... 12 41163542.2 _i_ TABLE OF CONTENTS (continued) Page Section 8.05. Successor Is Deemed Included in all References to Predecessor...... 12 Section 8.06. Waiver of Personal Liability.............................................................. 12 Section 8.07. Article and Section Headings, Gender and References..................... 12 Section 8.08. Partial Invalidity................................................................................. 13 Section 8.09. Governing Law.................................................................................. 13 Section 8.10. Execution in Counterparts.................................................................. 13 EXHIBIT A DESCRIPTION OF PROJECT........................................................A-1 41163542.2 -11- INSTALLMENT PURCHASE AGREEMENT THIS INSTALLMENT PURCHASE AGREEMENT (this "Installment Purchase Agreement"), dated as of February 1, 2015, is by and between the ORANGE COUNTY SANITATION DISTRICT, a county sanitation district organized and existing under the laws of the State of California (the "District"), and the ORANGE COUNTY SANITATION DISTRICT FINANCING CORPORATION, a nonprofit public benefit corporation organized and existing under the laws of the State of California(the"Corporation"). WITNESSETH: WHEREAS, to refinance the acquisition, construction and installation of certain improvements to its wastewater system (the `Prior Project"), the District has heretofore purchased the Prior Project from the Corporation, and the Corporation has heretofore sold the Prior Project to the District, for the installment payments (the `Prior Installment Payments") made by the District pursuant to the Installment Purchase Agreement, dated as of August 1, 2000 (the`Prior Installment Purchase Agreement"),by and between the District and the Corporation; WHEREAS, to provide the funds necessary to refinance the Prior Project, the District caused the execution and delivery of the Orange County Sanitation District Certificates of Participation, Series 2007B (the "Prior Certificates"), evidencing direct, undivided fractional interests in the related Prior Installment Payments; WHEREAS,the District desires to refinance a portion of the Prior Project(the `Project') by prepaying a portion of the remaining Prior Installment Payments, and the interest thereon to the dates of prepayment, thereby causing a portion of the remaining Prior Certificates to be prepaid; WHEREAS,to provide the funds necessary to pay and prepay a portion of the remaining Prior Installment Payments,the District and the Corporation desire that the Corporation purchase the Project from the District and the District sell the Project to the Corporation, and that the District then purchase the Project from the Corporation and the Corporation sell the Project to the District, for the installment payments (the`Installment Payments") to be made by the District pursuant to this Installment Purchase Agreement; WHEREAS, pursuant to the Master Agreement for District Obligations, dated as of August 1, 2000,by and between the District and the Corporation,the District has established and declared the conditions and terms upon which obligations such as this Installment Purchase Agreement, and the Installment Payments, and the interest thereon, are to be incurred and secured; WHEREAS, the Corporation proposes to assign without recourse certain of its rights under and pursuant to this Installment Purchase Agreement to U.S. Bank National Association, as trustee(the"Trustee"); 411635412 WHEREAS, in consideration of such assignment and the execution and delivery of the Trust Agreement, dated as of the date hereof, by and among the Trustee, the Corporation and the District, the Trustee has agreed to execute and deliver the Orange County Sanitation District Wastewater Refunding Revenue Obligations, Series 2015A (the "Revenue Obligations"), evidencing direct, undivided fractional interests in the Installment Payments, and the interest thereon,payable hereunder; WHEREAS, a portion of the proceeds of the Revenue Obligations will be used to prepay certain of the Prior Installment Payments; and WHEREAS, all acts, conditions and things required by law to exist, to have happened and to have been performed precedent to and in connection with the execution and delivery of this Installment Purchase Agreement do exist, have happened and have been performed in regular and due time, form and manner as required by law, and the parties hereto are now duly authorized to execute and enter into this Installment Purchase Agreement; NOW, THEREFORE, in consideration of the covenants and provisions herein set forth and for other good and valuable consideration the receipt and sufficiency of which is hereby acknowledged,the parties hereto do hereby agree as follows: ARTICLE I DEFINITIONS Section 1.01. Definitions. Except as provided in Section 1.02 hereof or unless the context otherwise requires, the terms defined in this Section shall for all purposes hereof and of any amendment hereof or supplement hereto and of any report or other document mentioned herein or therein have the meanings defined herein, the following definitions to be equally applicable to both the singular and plural forms of any of the terms defined herein: "Business Day" means a day other than (a) Saturday or Sunday, (b) a day on which banking institutions in the city in which the Principal Office is located are authorized or required by law to be closed, and (c) a day on which the New York Stock Exchange is authorized or obligated by law or executive order to be closed. "Closing Date"means February_, 2015. "Corporation" means the Orange County Sanitation District Financing Corporation, a nonprofit public benefit corporation organized and existing under the laws of the State, and any successor thereto. "District" means the Orange County Sanitation District, a county sanitation district organized and existing under and by virtue of the laws of the State, and any successor thereto. "Event of Default"means an event described in Section 6.01 hereof. "Installment Payments" means the Installment Payments required to be made by the District pursuant to Section 3.02 hereof. 411635412 2 "Installment Payment Dates"means each February 1, commencing February 1, 2028. "Installment Purchase Agreement" means this Installment Purchase Agreement, dated as of February 1, 2015, by and between the District and the Corporation, as originally executed and as it may from time to time be amended or supplemented in accordance with the terms hereof. "Interest Payment Date" means February 1 and August 1 of each year, commencing August 1,2015. "Master Agreement" means the Master Agreement for District Obligations, dated as of August 1, 2000, by and between the District and the Corporation, as originally executed and as it may from time to time be amended or supplemented in accordance with the terms thereof. "Person" means an individual, corporation, limited liability company, firm, association, partnership, trust, or other legal entity or group of entities, including a governmental entity or any agency or political subdivision thereof. "Principal Office" means the Trustee's principal corporate trust office in Los Angeles, California. "Project" means the improvements to the Wastewater System, as described in Exhibit A hereto. "Revenue Obligations" means the Orange County Sanitation District Wastewater Refunding Revenue Obligations, Series 2015A, executed and delivered by the Trustee, which are certificates of participation, evidencing direct, undivided fractional interests in the Installment Payments, and the interest thereon, executed and delivered under and pursuant to the Trust Agreement. "Trust Agreement" means the Trust Agreement, dated as of February 1, 2015, by and among the Trustee, the Corporation and the District, as originally executed and as it may from time to time be amended or supplemented in accordance with its terns. "Trustee" means U.S. Bank National Association, a national banking association duly organized and existing under the laws of the United States of America, or any other bank or trust company which may at any time be substituted in its place as provided in the Trust Agreement. Section 1.02. Definitions in Master Agreement and Trust Agreement. Except as otherwise herein defined and unless the context otherwise requires, the terms defined in the Master Agreement or the Trust Agreement shall for all purposes hereof and of any amendment hereof or supplement hereto and of any report or other document mentioned herein have the meanings defined therein, such definitions to be equally applicable to both the singular and plural forms of any of the terms defined therein. With respect to any defined term which is given a different meaning under this Installment Purchase Agreement than under the Master Agreement or the Trust Agreement, as used herein it shall have the meaning given herein. 411635412 3 ARTICLE II PURCHASE OF PROJECT BY,AND SALE THEREOF TO,THE CORPORATION; PAYMENT OF PURCHASE PRICE Section 2.01. Acquisition of the Protect. The District represents and warrants that it is the sole and exclusive owner of the Project. The Corporation hereby purchases from the District, and the District hereby sells to the Corporation, a portion of the Project equal to $ as described in Exhibit A hereto in accordance with the provisions of this Installment Purchase Agreement. All right, title and interest in and to such portion of the Project shall immediately vest in the Corporation on the Closing Date without further action on the part of the Corporation or the District. Section 2.02. Payment of Purchase Price. On the Closing Date, the Corporation shall pay to the District, as the purchase price of the applicable portion of the Project specified in Section 2.01, the amount of$ , which amount shall be paid from the proceeds of the Revenue Obligations. ARTICLE IU PURCHASE OF PROJECT BY,AND SALE THEREOF TO,THE DISTRICT; INSTALLMENT PAYMENTS Section 3.01. Purchase and Sale of Protect. The District hereby purchases from the Corporation, and the Corporation hereby sells to the District, the Project in accordance with the provisions of this Installment Purchase Agreement. All right, title and interest in and to the Project shall immediately vest in the District on the Closing Date without further action on the part of the District or the Corporation. Section 3.02. Installment Payments. The District shall, subject to any rights of prepayment provided in Article W hereof, pay to the Corporation, solely from Net Revenues and from no other sources, the purchase price of the Project in Installment Payments, with interest thereon, as provided herein. The Installment Payments and the interest thereon shall be payable on the Business Day immediately preceding each of the Installment Payment Dates in the amounts and at the interest rates per annum set forth in the following schedule: 411635412 4 Interest on Payment Installment Installment Interest Date Payment Payment Total Rate 08/01/2015 02/01/2016 08/01/2016 02/01/2017 08/01/2017 02/01/2018 08/01/2018 02/01/2019 08/01/2019 02/01/2020 08/01/2020 02/01/2021 08/01/2021 02/01/2022 08/01/2022 02/01/2023 08/01/2023 02/01/2024 08/01/2024 02/01/2025 08/01/2025 02/01/2026 08/01/2026 02/01/2027 08/01/2027 02/01/2028 08/01/2028 02/01/2029 08/01/2029 02/01/2030 08/01/2030 02/01/2031 08/01/2031 02/01/2032 08/01/2032 02/01/2033 08/01/2033 02/01/2034 08/01/2034 02/01/2035 08/01/2035 411635412 5 Interest on Payment Installment Installment Interest Date Payment Payment Total Rate 02/01/2036 08/01/2036 02/01/2037 The Installment Payments shall accrue interest from the Closing Date, at the rates set forth above, payable on the Interest Payment Dates in each year. Such interest shall accrue on the basis of a 360-day year consisting of twelve 30-day months. Each Installment Payment, and each payment of interest thereon, shall be deposited with the Trustee, as assignee of the Corporation, no later than the Business Day next preceding the Installment Payment Date or Interest Payment Date on which such Installment Payment or payment of interest is due, in lawful money of the United States of America, in immediately available fonds. If and to the extent that, on any such date, there are amounts on deposit in the Installment Payment Fund established under the Trust Agreement, or in any of the accounts therein, which amounts are not being held for the payment of specific Revenue Obligations, such amounts shall be credited against the Installment Payment, or payment of interest thereon, as applicable, due on such date. Section 3.03. Reserved. Section 3.04. Obligation Absolute. The obligation of the District to make the Installment Payments, and payments of interest thereon, and other payments required to be made by it under this Article, solely from Net Revenues, is absolute and unconditional, and until such time as the Installment Payments, payments of interest thereon, and such other payments shall have been paid in full (or provision for the payment thereof shall have been made pursuant to Article N), the District shall not discontinue or suspend any Installment Payments, or payments of interest thereon, or other payments required to be made by it hereunder when due, whether or not the Project or any part thereof is operating or operable or has been completed, or its use is suspended, interfered with, reduced or curtailed or terminated in whole or in part, and such Installment Payments, payments of interest thereon, and other payments shall not be subject to reduction whether by offset or otherwise and shall not be conditional upon the performance or nonperformance by any party of any agreement for any cause whatsoever. Section 3.05. Nature of Agreement. This Installment Purchase Agreement constitutes a Senior Obligation and, as such, shall be subject to the provisions of the Master Agreement and shall be afforded all of the advantages, benefits, interests and security afforded Senior Obligations pursuant to the Master Agreement. 411635412 6 ARTICLE IV PREPAYMENT OF INSTALLMENT PAYMENTS Section 4.01. Prepayment of Installment Payments. (a) The Installment Payments shall be subject to prepayment prior to their respective Installment Payment Dates as provided in Article IV of the Trust Agreement. (b) The District may prepay, from any source of available funds, all or any portion of the Installment Payments by depositing with the Trustee moneys or securities as provided, and subject to the terms and conditions set forth, in Article X of the Trust Agreement sufficient to pay such Installment Payments, and the interest thereon, when due or to pay such Installment Payments, and the interest thereon, through a specified date on which the District has a right to prepay such Installment Payments pursuant to subsection(a) of this Section, and to prepay such Installment Payments on such prepayment date, at a prepayment price determined in accordance with subsection(a)of this Section. (c) If less than all of the Installment Payments are prepaid then, as of the date of such prepayment pursuant to subsection (a) of this Section, or the date of a deposit pursuant to subsection (b) of this Section, the schedule of Installment Payments shall be recalculated to take such prepayment into account. Section 4.02. Notice. The District shall give written notice to the Trustee specifying the date on which the prepayment will be made prior to making any prepayment pursuant to this Article, which date shall be not less than 25 nor more than 60 days from the date such notice is given to the Trustee,unless such time period shall be waived by the Trustee. Section 4.03. Discharge of Obligations. If all Installment Payments, and the interest thereon, shall be paid as and when due in accordance with the terms hereof, or prepaid in accordance with Section 4.01 hereof, and if all Revenue Obligations shall be fully paid, or provision therefor made in accordance with Article X of the Trust Agreement, and the Trust Agreement shall be discharged by its terms, then all agreements, covenants and other obligations of the District hereunder shall thereupon cease, terminate and become void and be discharged and satisfied. ARTICLE V COVENANTS Section 5.01. Compliance with Master Agreement. The District will faithfully observe and perform all the agreements, conditions, covenants and terms contained in the Master Agreement required to be observed and performed by it and will not cause, suffer or permit any default to occur thereunder. Section 5.02. Compliance with Installment Purchase Agreement The District will punctually pay the Installment Payments, and interest thereon, and other payments required to be made by it hereunder in strict conformity with the terms hereof, and will faithfully observe and perform all the agreements, conditions, covenants and terms contained herein required to be 411635412 7 observed and performed by it, will not cause, suffer or permit any default to occur hereunder and will not terminate this Installment Purchase Agreement for any cause including, without limiting the generality of the foregoing, any acts or circumstances that may constitute failure of consideration, destruction of or damage to the Project, commercial frustration of purpose, any change in the tax or other laws of the United States of America or of the State or any political subdivision of either or any failure of the Corporation to observe or perform any agreement, condition, covenant or term contained herein required to be observed and performed by it, whether express or implied, or any duty, liability or obligation arising out of or connected herewith or the insolvency, or deemed insolvency, or bankruptcy or liquidation of the Corporation or any force majeure, including acts of God, tempest, storm, earthquake, war, rebellion, riot, civil disorder, acts of public enemies, blockade or embargo, strikes, industrial disputes, lock outs, lack of transportation facilities, fire, explosion, or acts or regulations of governmental authorities. Section 5.03. Protection of Security and Rights. The District will preserve and protect the security hereof and the rights of the Trustee, as assignee of the Corporation, to the Installment Payments, and interest thereon, and other payments required to be made by the District hereunder and will warrant and defend such rights against all claims and demands of all Persons. Section 5.04. Indemnification of Corporation. To the extent permitted by law, the District hereby agrees to indemnify and hold the Corporation and its members and officers harmless against any and all liabilities which might arise out of or are related to the Project, this Installment Purchase Agreement or the Revenue Obligations, and the District further agrees to defend the Corporation and its members and officers in any action arising out of or related to the Project,this Installment Purchase Agreement or the Revenue Obligations. Section 5.05. Further Assurances. The District will adopt, deliver, execute and make any and all further assurances, instruments and resolutions as may be reasonably necessary or proper to carry out the intention or to facilitate the performance hereof and for the better assuring and confirming unto the Corporation, or unto the Trustee, as assignee of the Corporation, the rights and benefits provided herein to the Corporation, or to the Trustee, as assignee of the Corporation. ARTICLE VI EVENTS OF DEFAULT AND REMEDIES OF THE CORPORATION Section 6.01. Events of Default. The following shall be Events of Default under this Installment Purchase Agreement, and "Event of Default' shall mean any one or more of the following events: (a) if default shall be made by the District in the due and punctual payment of or on account of any Senior Obligation as the same shall become due and payable; (b) if default shall be made by the District in the performance of any of the agreements or covenants required herein, in the Trust Agreement or in the Master Agreement to 411635412 8 be performed by it (other than as specified in (a) above), and such default shall have continued for a period of 30 days after the District shall have been given notice in writing of such default by the Corporation or the Trustee; provided, however, that the party or parties giving such notice may agree in writing to a reasonable extension of such period prior to the expiration of such 30 day period and, provided further, that if the District shall proceed to take curative action which, if begun and prosecuted with due diligence, cannot be completed within such a period of 30 days, then such period shall be increased without such written extension to such extent as shall be necessary to enable the District to diligently complete such curative action and such default shall not become an Event of Default for so long as shall be necessary to diligently complete such curative action; or (c) if the District shall file a petition or answer seeking arrangement or reorganization under the federal bankruptcy laws or any other applicable law of the United States of America or any state therein, or if a court of competent jurisdiction shall approve a petition filed with or without the consent of the District seeking arrangement or reorganization under the federal bankruptcy laws or any other applicable law of the United States of America or any state therein, or if under the provisions of any other law for the relief or aid of debtors any court of competent jurisdiction shall assume custody or control of the District or of the whole or any substantial part of its property. Section 6.02. Remedies on Default. Upon the occurrence of an Event of Default, the Trustee,as assignee of the Corporation, shall have the right: (a) by mandamus or other action or proceeding or suit at law or in equity to enforce its rights against the District and to compel the District to perform and carry out its duties under applicable law and the agreements and covenants required to be performed herein; (b) by suit in equity to enjoin any acts or things which are unlawful or violate the rights of the Trustee, as assignee of the Corporation; (c) by suit in equity to require the District to account as the trustee of an express trust; and to have a receiver or receivers appointed for the Wastewater System and of the issues, earnings, income, products and profits thereof, pending such proceedings, with such powers as the court making such appointment shall confer. Section 6.03. Non-Waiver. Nothing in this Article or in any other provision hereof shall affect or impair the obligation of the District, which is absolute and unconditional, to pay the Installment Payments, and the interest thereon, to the Trustee, as assignee of the Corporation, at the respective due dates from the Net Revenues and the other funds herein committed for such payment, or shall affect or impair the right of the Trustee, as assignee of the Corporation, which is also absolute and unconditional, to institute suit to enforce such payment by virtue of the contract embodied herein. A waiver of any default or breach of duty or contract by the Trustee, as assignee of the Corporation, shall not affect any subsequent default or breach of duty or contract or impair any rights or remedies on any such subsequent default or breach of duty or contract. No delay or omission by the Trustee, as assignee of the Corporation,to exercise any right or remedy accruing 411635412 9 upon any default or breach of duty or contract shall impair any such right or remedy or shall be construed to be a waiver of any such default or breach of duty or contract or an acquiescence therein, and every right or remedy conferred upon the Trustee, as assignee of the Corporation,by applicable law or by this Article may be enforced and exercised from time to time and as often as shall be deemed expedient by the Trustee, as assignee of the Corporation. If any action, proceeding or suit to enforce any right or exercise any remedy is abandoned or determined adversely to the Trustee, as assignee of the Corporation, the District and the Trustee, as assignee of the Corporation, shall be restored to their former positions, rights and remedies as if such action,proceeding or suit had not been brought or taken. Section 6.04. Remedies Not Exclusive. No remedy herein conferred upon or reserved to the Trustee, as assignee of the Corporation, is intended to be exclusive of any other remedy, and each such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing in law or in equity or by statute or otherwise and may be exercised without exhausting and without regard to any other remedy conferred by law. ARTICLE VII AMENDMENTS Section 7.01. Amendments. (a) This Installment Purchase Agreement and the rights and obligations of the District, the Corporation and the Trustee, as assignee of the Corporation, may be amended or modified from time to time and at any time by a written amendment hereto executed by the District, the Corporation and the Trustee, as assignee of the Corporation, with the written consent of the Owners of a majority of the aggregate principal evidenced by Revenue Obligations then Outstanding. No such amendment shall (i) extend the payment date of any Installment Payment or reduce the amount of any Installment Payment, or the interest rate applicable thereto, without the prior written consent of the Owner of each affected Revenue Obligation, or (ii)reduce the percentage of Owners of the Revenue Obligations whose consent is required to effect any such amendment or modification, without the prior written consent of the Owners of all Revenue Obligations then Outstanding. (b) This Installment Purchase Agreement and the rights and obligations of the District, the Corporation and the Trustee, as assignee of the Corporation, may be amended or modified from time to time and at any time by a written amendment hereto executed by the District, the Corporation and the Trustee, as assignee of the Corporation, without the written consents of any Owners of the Revenue Obligations, but only to the extent permitted by law and only for any one or more of the following purposes: (i) to add to the agreements, conditions, covenants and terms required by the District, the Corporation or the Trustee, as assignee of the Corporation, to be observed or performed herein other agreements, conditions, covenants and terns thereafter to be observed or performed by the District, the Corporation or the Trustee, as assignee of the Corporation, or to surrender any right or power reserved herein to or conferred herein on the District,the Corporation or the Trustee,as assignee of the Corporation; 411635412 10 (ii) to make such provisions for the purpose of curing any ambiguity or of correcting, curing or supplementing any defective provision contained herein or in regard to questions arising hereunder which the District, the Corporation or the Trustee, as assignee of the Corporation, may deem desirable or necessary and not inconsistent herewith; and (iii) to make such other changes herein or modifications hereto as the District, the Corporation or the Trustee, as assignee of the Corporation, may deem desirable or necessary, and which shall not materially adversely affect the interests of the Owners of the Revenue Obligations. ARTICLE VIII MISCELLANEOUS Section 8.01. Liability of District Limited. Notwithstanding anything contained herein to the contrary,the District shall not be required to advance any moneys derived from any source of income other than Net Revenues and the other funds provided herein for the payment of the Installment Payments, and the interest thereon, and other payments required to be made by it hereunder, or for the performance of any agreements or covenants required to be performed by it contained herein. The District may, however, but in no event shall be obligated to, advance moneys for any such purpose so long as such moneys are derived from a source legally available for such purpose and may be legally used by the District for such purpose. The obligation of the District to pay the Installment Payments, and the interest thereon, and other payments required to be made by it hereunder is a special obligation of the District payable, in the manner provided herein, solely from Net Revenues and other funds provided for herein, and does not constitute a debt of the District or of the State, or of any political subdivision thereof, in contravention of any constitutional or statutory debt limitation or restriction. Neither the faith and credit nor the taxing power of the District or the State, or any political subdivision thereof, is pledged to the payment of the Installment Payments, or the interest thereon, or other payments required to be made hereunder. Section 8.02. Limitation of Rights. Nothing in this Installment Purchase Agreement expressed or implied is intended or shall be construed to give to any Person other than the District, the Corporation and the Trustee, as assignee of the Corporation, any legal or equitable right, remedy or claim under or in respect of this Installment Purchase Agreement or any covenant, condition or provision therein or herein contained, and all such covenants, conditions and provisions are and shall be held to be for the sole and exclusive benefit of the District, the Corporation and the Trustee, as assignee of the Corporation. Section 8.03. Assignment. The District and the Corporation hereby acknowledge the transfer, conveyance and assignment by the Corporation to the Trustee of all of the Corporation's rights, title and interest in and to this Installment Purchase Agreement (excepting its rights to indemnification hereunder), including the right to receive Installment Payments, and the interest thereon,from the District,pursuant to the Trust Agreement 411635412 11 Section 8.04. Notices. Any written notice, statement, demand, consent, approval, authorization, offer, designation, request or other communication to be given hereunder shall be given to the party entitled thereto at its address set forth below, or at such other address as such party may provide to the other parties in writing from time to time, namely: If to the District: Orange County Sanitation District 10844 Ellis Avenue Fountain Valley, California 92708 Attention: Director of Finance and Administrative Services If to the Corporation: Orange County Sanitation District Financing Corporation c/o Orange County Sanitation District 10844 Ellis Avenue Fountain Valley, California 92708 Attention: Treasurer If to the Trustee: U.S. Bank National Association 633 West Fifth Street, 241"Floor Los Angeles, California 90071 Attention: Corporate Trust Each such notice, statement, demand, consent, approval, authorization, offer, designation, request or other communication hereunder shall be deemed delivered to the party to whom it is addressed (a) if personally served or delivered, upon delivery, (b) if given by electronic communication, whether by facsimile or telecopier, upon the sender's receipt of an appropriate answerback or other written acknowledgment, (c) if given by registered or certified mail, return receipt requested, deposited with the United States mail postage prepaid, 72 hours after such notice is deposited with the United States mail, (d) if given by overnight courier, with courier charges prepaid, 24 hours after delivery to said overnight courier, or (e) if given by any other means,upon delivery at the address specified in this Section. Section 8.05. Successor Is Deemed Included in all References to Predecessor. Whenever the District or the Corporation is named or referred to herein, such reference shall be deemed to include the successor to the powers, duties and functions that are presently vested in the District or the Corporation, and all agreements and covenants required hereby to be performed by or on behalf of the District or the Corporation shall bind and inure to the benefit of the respective successors thereof whether so expressed or not Section 8.06. Waiver of Personal Liability. No official, officer or employee of the District shall be individually or personally liable for the payment of the Installment Payments, or the interest thereon, or other payments required to be made by the District hereunder, but nothing contained herein shall relieve any official, officer or employee of the District from the performance of any official duty provided by any applicable provisions of law or hereby. Section 8.07. Article and Section Headings. Gender and References. The headings or titles of the several Articles and Sections hereof and the table of contents appended hereto shall be solely for convenience of reference and shall not affect the meaning, construction or 411635412 12 effect hereof, and words of any gender shall be deemed and construed to include all genders. All references herein to "Articles," "Sections" and other subsections or clauses are to the corresponding articles, sections, subsections or clauses hereof; and the words "hereby,""herein," "hereof," "hereto," "herewith" and other words of similar import refer to this Installment Purchase Agreement as a whole and not to any particular Article, Section, subdivision or clause hereof. Section 8.08. Partial Invalidity. If any one or more of the agreements or covenants or portions thereof required hereby to be performed by or on the part of the District or the Corporation shall be contrary to law, then such agreement or agreements, such covenant or covenants or such portions thereof shall be null and void and shall be deemed separable from the remaining agreements and covenants and portions thereof and shall in no way affect the validity hereof. Section 8.09. Governing Law. This Installment Purchase Agreement shall be construed and governed and construed in accordance with the laws of the State. Section 8.10. Execution in Counterparts. This Installment Purchase Agreement may be executed in several counterparts, each of which shall be deemed an original, and all of which shall constitute but one and the same instrument. 411635412 13 IN WITNESS WHEREOF,the parties hereto have executed this Installment Purchase Agreement by their officers thereunto duly authorized as of the day and year first written above. ORANGE COUNTY SANITATION DISTRICT By: Chair of the Board of Directors (SEAL) Attest: By: Clerk of the Board of Directors ORANGE COUNTY SANITATION DISTRICT FINANCING CORPORATION By: Treasurer 411635412 14 EXHIBIT A DESCRIPTION OF PROJECT The Project is consists of the acquisition, construction and installation of certain improvements to the Wastewater System, including the acquisition, construction and installation of improvements to the District's collection system, two wastewater treatment plants, and Ocean Outfall systems, including the following Project components: Magnolia Trunk Sewer Trickling Filters at Plant 2 Ellis Avenue Pump Station Sludge Digester at Plant 1 Rocky Point Pump Station Sludge Dewatering at Plant 1 and 2 Bitter Point Pump Station Rehabilitation of Solids Storage Bitter Point Force Main Rehabilitation Silos C &D at Plant 2 Euclid Relief Improvements -Headworks at Plant 2 Digester Rehabilitation at Plant 2 Primary Treatment System Rehabilitation at Plant 2 Cable Tray Improvements at Plant 1 and 2 New Secondary Treatment System at Plant 1 Rehabilitation of Odor Control Facilities A portion of the Project in the amount of$ shall be sold and purchased as described in Article II of this Installment Purchase Agreement. 411635412 A-1 DRAFT OF 12/01/14 ESCROW AGREEMENT by and between ORANGE COUNTY SANITATION DISTRICT and MUFG UNION BANK N.A., as Escrow Agent and Prior Trustee IV Dated as of February 1, 2015 Orange County Sanitation District Certificates of Participation Series 2007B 4116080G2 11411481 ESCROW AGREEMENT THIS ESCROW AGREEMENT (this "Escrow Agreement'), dated as of February 1, 2015, is by and between the ORANGE COUNTY SANITATION DISTRICT, a county sanitation district organized and existing under the laws of the State of California (the "District'), and MUFG UNION BANK, N.A., a national banking association organized and existing under the laws of the United States of America, as escrow agent (the "Escrow Agent") and as trustee under the Prior Trust Agreement referenced below(the"Prior Trustee"). WITNESSETH: WHEREAS, to finance the acquisition, construction and installation of certain improvements to its wastewater system (the "Prior Project'), the District has heretofore purchased the Prior Project from the Orange County Sanitation District Financing Corporation (the "Corporation"), and the Corporation has heretofore sold the Prior Project to the District, for the installment payments (the "Prior Installment Payments") to be made by the District pursuant to the Installment Purchase Agreement, dated as of December 1, 2007 (the "Prior Installment Purchase Agreement'),by and between the District and the Corporation; WHEREAS, to provide the funds necessary to finance the Prior Project, the District caused the execution and delivery of the Orange County Sanitation District Certificates of Participation, Series 2007B (the "Prior Certificates"), evidencing direct, undivided fractional interests in the related Prior Installment Payments, pursuant to the Trust Agreement, dated as of December 1, 2014 (the "Prior Trust Agreement'), by and among the Prior Trustee, formerly known as Union Bank of California,N.A., the Corporation and the District; WHEREAS, the District has determined to refinance a portion of the Prior Project by paying and prepaying a portion of the remaining principal components of the Prior Installment Payments (the "Refunded Installment Payments"), and the interest components thereof to the date of prepayment, thereby causing to be prepaid a portion of the currently outstanding Prior Certificates maturing on February 1 in the yews through , inclusive, in the aggregate principal amount of$ (the "Refunded Certificates"); WHEREAS, to provide the funds necessary to pay and prepay the Refunded Installment Payments, the District has caused to be executed and delivered the Orange County Sanitation District Wastewater Refunding Revenue Obligations, Series 2015A (the "Revenue Obligations"), evidencing principal in the aggregate amount of $ , pursuant to the Trust Agreement, dated as of February 1, 2015, by and among U.S Bank National Association, as trustee, the Corporation and the District; WHEREAS, in accordance with the Prior Trust Agreement, the prepayment of the Refunded Installment Payments will be applied to the payment of principal and interest evidenced by the Refunded Certificates to and including February 1, 2017 (the "Prepayment Date") and to the prepayment of the outstanding Refunded Certificates on the Prepayment Date at a prepayment price equal to the principal amount thereof plus accrued interest thereon,without premium(the "Prepayment Price"),pursuant to this Escrow Agreement; 411WSOU NOW THEREFORE, in consideration of the premises and of the mutual agreements and covenants contained herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto do hereby agree as follows: Section 1. Definitions. Unless otherwise defined herein, capitalized terns used herein shall have the meanings ascribed to such terns in the Prior Trust Agreement. Section 2. The Escrow Fund. (a) There is hereby established a fund (the "Escrow Fund") to be held as an irrevocably pledged escrow by the Escrow Agent, which the Escrow Agent shall keep separate and apart from all other funds of the District and the Escrow Agent and to be applied solely as provided in this Escrow Agreement. Pending application as provided in this Escrow Agreement, amounts on deposit in the Escrow Fund are hereby pledged solely to the payment of the principal and interest evidenced by the Refunded Certificates to and including the Prepayment Date and the payment of the Prepayment Price on the Prepayment Date, which amounts shall be held in trust by the Escrow Agent for the Owners of the Refunded Certificates. (b) The Prior Trustee is hereby instructed to release $ held in the Reserve Fund established under Section 5.03 of the Prior Trust Agreement (the "Prior Reserve") for deposit in the Escrow Fund. As reflected in the report of the nationally recognized firm of independent certified public accountants delivered in connection herewith, upon the execution and delivery of the Revenue Obligations, there shall be deposited in the Escrow Fund $ received from the proceeds of the sale of the Revenue Obligations and $ from release of the Prior Reserve for a total of $ (the "Escrow Deposit'). (c) The District has determined or caused to be determined that upon the deposit of the Escrow Deposit pursuant to Section 2(b) hereof, $ of the moneys on deposit in the Escrow Fund will be invested in the Government Obligations specified in Schedule I hereto which, together with uninvested cash in the amount of $ , will be sufficient to make the payments required by Section 4 hereof. Section 3. Use of Moneys in Escrow Fund. (a) The Escrow Agent hereby acknowledges deposit of the moneys described in Section 2(b) hereof and agrees to invest such moneys credited to the Escrow Fund in the Government Obligations specified in Schedule I hereto. (b) The Owners of the Refunded Certificates shall have a first and exclusive lien on the moneys and Government Obligations credited to the Escrow Fund until such moneys and Government Obligations are used and applied as provided in this Escrow Agreement and the Prior Trust Agreement to pay principal and interest evidenced by the Refunded Certificates to and including the Prepayment Date and to prepay in full then outstanding Refunded Certificates on the Prepayment Date. (c) The Escrow Agent shall not be held liable for investment losses resulting from compliance with the provisions of this Escrow Agreement. aucosoU 3 Section 4. Payment of Refunded Certificates. From the uninvested money and proceeds of maturing Government Obligations held in the Escrow Fund, the Escrow Agent shall apply such amounts to the payment of the principal and interest evidenced by the Refunded Certificates to and including the Prepayment Date and to the payment of the Prepayment Price of the Refunded Certificates on the Prepayment Date, all as set forth in Schedule II hereto. To the extent that the amount on deposit in the Escrow Fund on the Prepayment Date is in excess of the amount necessary to make the required payments with respect to the Refunded Certificates, such excess shall be transferred to the Trustee for deposit in the Installment Payment Fund established under the Prior Trust Agreement. Section 5. Irrevocable Instructions to Mail Notices. The District hereby irrevocably instructs the Prior Trustee to give notice within five business days of delivery of the Revenue Obligations of defeasance of the Refunded Certificates to the Owners thereof and to Assured Guaranty Municipal Corp., as successor to Financial Security Assurance Inc., substantially in the form set forth in Exhibit A hereto. The District hereby designates the Refunded Certificates for prepayment on the Prepayment Date and hereby irrevocably instructs the Prior Trustee, to give, in accordance with the provisions of Section 4.04 of the Prior Trust Agreement, notice of prepayment of such Refunded Certificates to the Owners thereof, substantially in the form set forth in Exhibit B hereto. Section 6. Performance of Duties: Acknowledgement with Respect to Irrevocable Instructions. The Escrow Agent hereby agrees to perform the duties set forth herein and agrees that the irrevocable instructions to the Escrow Agent herein provided are in a form satisfactory to it. Section 7. Substitution of Government Obligations. (a) Upon the written direction of the District, subject to the conditions and limitations set forth in paragraph (c) below, the Escrow Agent shall sell, transfer and request the redemption of or otherwise dispose of the initial Government Obligations held in and credited to the Escrow Fund; provided that, subject to paragraph (c) below, there are substituted therefor and delivered to the Escrow Agent other Government Obligations as hereinafter provided. (b) Upon the written direction of the District, subject to the conditions and limitations set forth in paragraph (c) below, the Escrow Agent shall reinvest cash balances in the Escrow Fund in Government Obligations; provided, that any such securities purchased pursuant to this paragraph (b) shall mature (1) on the next Interest Payment Date for any of the Refunded Certificates or(2) as on such other date or dates necessary to meet the requirements of Section 4 hereof, as certified by a nationally recognized firm of independent certified public accountants. (c) The District, by this Escrow Agreement, hereby covenants and agrees that it will not request the Escrow Agent to exercise any of the powers described in paragraph (a) or (b) above in any manner, which if such exercise of powers had been reasonably expected on the date of delivery of the Refunded Certificates, would cause any of the Refunded Certificates to be arbitrage bonds within the meaning of section 103(c) of the Internal Revenue Code of 1986 (the "Code"), and the regulations thereunder in effect on the date of such request and applicable to obligations issued on the date of such Refunded Certificates. Any purchase of substitute securities by the Escrow Agent shall be accomplished in accordance with paragraph (a) above to 411WSOU 4 the extent such purchases are to be made with the proceeds derived from the sale, transfer, redemption or other disposition of the Government Obligations. Such sale, transfer, redemption or other disposition of the Government Obligations and such substitution may be effected only by a simultaneous transaction and only if(i)a nationally recognized firm of independent certified public accountants shall certify that (a) such substitute securities, together with the Government Obligations and cash which will continue to be held in the Escrow Fund, will mature in such principal amounts and earn interest in such amounts and at such times so that sufficient moneys will be available from such maturing principal and interest to pay, as the same become due, all principal,premium and interest payable with respect to the Refunded Certificates which have not previously been paid, and (b) the amounts and dates of the anticipated payments by the Escrow Agent of the principal, premium and interest payable with respect to the Refunded Certificates will not be diminished or postponed thereby, (ii) the Escrow Agent shall have received an opinion of nationally recognized bond counsel to the effect that the sale, transfer, redemption or other disposition and substitution of the Government Obligations does not cause interest on either the Revenue Obligations or the Refunded Certificates to be subject to federal income taxation under relevant provisions of the Code and the regulations thereunder in effect on the date of such sale, transfer, redemption or other disposition and substitution and applicable to obligations issued on the date of execution and delivery of the Revenue Obligations. Section 8. Escrow Agent's Authority to Make Investments. Except as expressly provided in Sections 3 and 7 hereof, the Escrow Agent shall have no power or duty to invest any funds held under this Escrow Agreement. The Escrow Agent shall have no power or duty to transfer or otherwise dispose of the moneys held hereunder except as provided herein. Section 9. Indemnity. To the extent permitted by law, the District hereby assumes liability for, and hereby agrees to indemnify, protect, save and keep harmless the Escrow Agent and its respective successors, assigns, agents, employees and servants, from and against any and all liabilities, obligations, losses, damages, penalties, claims, actions, suits, costs, expenses and disbursements (including reasonable legal fees, expenses and disbursements) of whatsoever kind and nature which may be imposed on, incurred by, or asserted against, the Escrow Agent at any time in any way relating to or arising out of the execution, delivery and performance of this Escrow Agreement, the establishment hereunder of the Escrow Fund, the acceptance of the moneys deposited therein, and any payment, transfer or other application of moneys by the Escrow Agent in accordance with the provisions of this Escrow Agreement; provided, however, that the District shall not be required to indemnify the Escrow Agent against the Escrow Agent's own negligence or willful misconduct or the negligence or willful misconduct of the Escrow Agent's respective successors, assigns, agents and employees or the material breach by the Escrow Agent of the terms of this Escrow Agreement. In no event shall the District or the Escrow Agent be liable to any person by reason of the transactions contemplated hereby other than to each other as set forth in this Section. The indemnities contained in this Section shall survive the termination of this Escrow Agreement. Section 10. Responsibilities of Escrow Agent. The Escrow Agent makes no representation as to the sufficiency of the funds deposited in accordance with Section 2(b) and invested pursuant to Section 3(a) and earnings thereof, if any, to accomplish the prepayment of the Refunded Certificates pursuant to the Prior Trust Agreement or to the validity of this Escrow Agreement as to the District and, except as otherwise provided herein, the Escrow Agent shall 411 W80&2 5 incur no liability in respect thereof. The Escrow Agent shall not be liable in connection with the performance of its duties under this Escrow Agreement except for its own negligence, willful misconduct or default, and the duties and obligations of the Escrow Agent shall be determined by the express provisions of this Escrow Agreement. The Escrow Agent may consult with counsel, who may or may not be counsel to the District, and in reliance upon the written opinion of such counsel shall have full and complete authorization and protection in respect of any action taken, suffered or omitted by it in good faith in accordance therewith. Whenever the Escrow Agent shall deem it necessary or desirable that a matter be proved or established prior to taking, suffering, or omitting any action under this Escrow Agreement, such matter (except the matters set forth herein as specifically requiring a certificate of a nationally recognized firm of independent certified public accountants or an opinion of counsel of recognized standing in the field of law relating to municipal bonds) may be deemed to be conclusively established by a written certification of the District. The Escrow Agent undertakes to perform only such duties as are expressly set forth in this Agreement and no implied duties, covenants or obligations shall be read into this Agreement against the Escrow Agent. The Escrow Agent may resign by giving written notice to the District, and upon receipt of such notice the District shall promptly appoint a successor Escrow Agent. If the District does not appoint a successor Escrow Agent within thirty (30) days of receipt of such notice, the resigning Escrow Agent may petition a court of competent jurisdiction for the appointment of a successor Escrow Agent, which court may thereupon, upon such notice as it shall deem proper, appoint a successor Escrow Agent. Upon acceptance of appointment by a successor Escrow Agent, the resigning Escrow Agent shall transfer all amounts held by it in the Escrow Fund to such successor Escrow Agent and be discharged of any further obligation or responsibility hereunder. Section 11. Amendments. The District and the Escrow Agent may (but only with the consent of the Owners of all of the Refunded Certificates) amend this Escrow Agreement or enter into agreements supplemental to this Escrow Agreement. Section 12. Term. This Escrow Agreement shall commence upon its execution and delivery and shall terminate on the date upon which the Refunded Certificates have been paid in accordance with this Escrow Agreement. Section 13. Compensation. The District shall from time to time pay or cause to be paid to the Escrow Agent the agreed upon compensation for its services to be rendered hereunder, and reimburse the Escrow Agent for all of its reasonable advances in the exercise and performance of its duties hereunder; provided, however, that under no circumstances shall the Escrow Agent be entitled to any lien whatsoever on any moneys or obligations in the Escrow Fund for the payment of fees and expenses for services rendered or expenses incurred by the Escrow Agent under this Escrow Agreement or otherwise. 411WSOU 6 Section 14. Severability. If any one or more of the covenants or agreements provided in this Escrow Agreement on the part of the District or the Escrow Agent to be performed should be determined by a court of competent jurisdiction to be contrary to law, such covenants or agreements shall be null and void and shall be deemed separate from the remaining covenants and agreements herein contained and shall in no way affect the validity of the remaining provisions of this Escrow Agreement. Section 15. Counterparts. This Escrow Agreement may be executed in several counterparts, all or any of which shall be regarded for all purposes as an original but all of which shall constitute and be but one and the same instrument. Section 16. Governing Law. This Escrow Agreement shall be construed under the laws of the State of California. 411WSOU 7 IN WITNESS WHEREOF, the parties hereto have executed this Escrow Agreement as of the date first above written. MUFG UNION BANK,N.A., as Escrow Agent and Prior Trustee By: Authorized Officer ORANGE COUNTY SANITATION DISTRICT By: Lorenzo Tyner,Director of Finance and Administrative Services 41lWSOU 8 SCHEDULE I INITIAL GOVERNMENT OBLIGATIONS IN ESCROW FUND [See attached.] 41160806.2 I-1 SCHEDULED PAYMENT REQUIREMENTS OF THE REFUNDED CERTIFICATES ISee attached.] 41lWSOU II-I EXHIBIT A NOTICE OF DEFEASANCE ORANGE COUNTY SANITATION DISTRICT CERTIFICATES OF PARTICIPATION SERIES 2007B MATURING ON FEBRUARY 1 IN THE YEARS THROUGH , INCLUSIVE Principal CUSIP Payment Date Interest Rate Principal Outstandine Number* NOTICE IS HEREBY GIVEN that on February_, 2015, the Orange County Sanitation District (the "District") caused there to be deposited with MUFG Union Bank, N.A., as escrow agent (the "Escrow Agent"), pursuant to an Escrow Agreement, dated as of February 1, 2015,by and between the District and the Escrow Agent, proceeds of its Wastewater Refunding Revenue Obligations, Series 2015A, together with other available monies, which will be sufficient (i) to pay the principal and interest evidenced by the District's Certificates of Participation, Series 2007B maturing on February 1 in the years through . inclusive (the "Refunded Certificates"), to and including February 1, 2017 (the "Prepayment Date") and (ii) to pay all of the principal evidenced by the Refunded Certificates, plus accrued interest evidenced thereby to the Prepayment Date, without premium (the "Prepayment Price"), on the Prepayment Date. Thus, on the Prepayment Date there will become due and payable with respect to each of the Refunded Certificates the Prepayment Price thereof, and from and after such Prepayment Date, the interest evidenced thereby shall cease to accrue and be payable. The Escrow Agent is obligated to pay or cause to be paid to the Owners of the Refunded Certificates all sums due thereon,but only from moneys deposited with the Escrow Agent as described in this paragraph. aucosoU A-1 Dated: February_, 2015 By: MUFG Union Bank,N.A., as Trustee and Escrow Agent on behalf of the Orange County Sanitation District -Neither the District nor the Trastee/Escrow Agent shall have any responsibility for any defect in the CUSIP numbers that appear in this defiasance notice. The CUSIP numbers have been assigned by an independent service for convenience of reference, and neither the District nor the Trustee/Escrow Agent shall not be liable for any inaccuracy in such number. 4116080U A-2 EXHIBIT B NOTICE OF PREPAYMENT ORANGE COUNTY SANITATION DISTRICT CERTIFICATES OF PARTICIPATION SERIES 2007B MATURING ON FEBRUARY 1 IN THE YEARS THROUGH , INCLUSIVE Principal CUSIP Payment Date Interest Rate Principal Outstandine Number* NOTICE IS HEREBY GIVEN that the Orange County Sanitation District Certificates of Participation, Series 2007B, in the maturities and principal amounts specified above (the "Refunded Certificates") are hereby subject to prepayment on February 1, 2017 (the "Prepayment Date") at a price equal to the principal evidenced by the Refunded Certificates,plus accrued interest evidenced thereby to the Prepayment Date, without premium (the "Prepayment Price"). On the Prepayment Date there will become due and payable with respect to each of the Refunded Certificates the Prepayment Price thereof, and from and after such Prepayment Date, the interest evidenced thereby shall cease to accrue and be payable. The Refunded Certificates shall be surrendered at the address of MUFG Union Bank,N.A., as Trustee, set forth below. MUFG Union Bank,N.A. 120 S. San Pedro Street, Suite 410 Los Angeles, California 90012 Attention: Bond Redemptions The method of presentation and delivery of a Refunded Certificate is at the option and risk of the owner of each Refunded Certificate(the"Owner"). If mail is used,insured registered mail, return receipt requested is suggested. The Trustee may be obligated to withhold a percentage of the Prepayment Price from any Owner who fails to furnish the Trustee with a valid taxpayer identification number or a certification that such Owner is not subject to backup withholding. Owners who wish to avoid the application of 4116080&2 B-I these provisions should submit a completed IRS Form W-9 when presenting their Refunded Certificates. Dated: 20 By: MUFG Union Bank,N.A., as Trustee and Escrow Agent on behalf of the Orange County Sanitation District *Neithcr the District nor the Trustee/Escrow Agent shall have any responsibility for any defect in the CUSIP numbcrs that appear in this prepayment notice. The CUSIP numbers have been assigned by an independent service for convcmcnce of reference, and neither the District nor the Trustee/Escrow Agent shall not be liable for any inaccuracy in such number. 41lWSOU B-2 DRAFT OF 12/01/14 CONTINUING DISCLOSURE AGREEMENT THIS CONTINUING DISCLOSURE AGREEMENT (this "Disclosure Agreement'),dated as of February 1, 2015, is by and between the ORANGE COUNTY SANITATION DISTRICT, a county sanitation district organized and existing under the laws of the State of California (the "District'), and DIGITAL ASSURANCE CERTIFICATION LLC, as Dissemination Agent(the"Dissemination Agent'). WITNESSETH: WHEREAS, the District has caused to be executed and delivered the Orange County Sanitation District Wastewater Refunding Revenue Obligations, Series 2015A (the "Revenue Obligations"), evidencing principal in the aggregate amount of$ ,pursuant to a Trust Agreement,dated as of the date hereof(the"Trust Agreement'),by and among U.S. Bank National Association,as trustee(the "Trustee"), the Orange County Sanitation District Financing Corporation (the "Corporation") and the District;and WHEREAS, this Disclosure Agreement is being executed and delivered by the District and the Dissemination Agent for the benefit of the owners and beneficial owners of the Revenue Obligations and in order to assist the purchaser of the Revenue Obligations in complying with the Rule (as defined herein); NOW, THEREFORE, for and in consideration of the mutual promises and covenants herein contained,the parties hereto agree as follows: Section 1. Definitions. Capitalized undefined terms used herein shall have the meanings ascribed thereto in the Trust Agreement or, if not defined therein, in the Master Agreement, dated as of August 1, 2000, by and between the District and the Corporation. In addition, the following capitalized terms shall have the following meanings: "Annual Report" means any Annual Report provided by the District pursuant to, and as described in, Sections 2 and 3 hereof. "Annual Report Date" means the date in each yew that is eight months after the end of the Fiscal Year,which date,as of the date of this Disclosure Agreement,is March 1. "Disclosure Representative" means the Director of Finance and Administrative Services of the District, or such other officer or employee of the District as the District shall designate in writing to the Dissemination Agent and the Trustee from time to time. "Dissemination Agent" means an entity selected and retained by the District, or any successor thereto selected by the District. The initial Dissemination Agent shall be Digital Assurance Certification LLC. "EMMA" shall mean Electronic Municipal Market Access system, maintained on the internet at htto://emma.msrb.ore by the MSRB. "Fiscal Year" shall mean the period beginning on July 1 of each year and ending on the next succeeding June 30, or any twelve-month or fifty-two week period hereafter selected by the District,with notice of such selection or change in fiscal year to be provided as set forth herein. 41256736.1 11411481 1 "Listed Events" means any of the events listed in Section 4 hereof and any other event legally required to be reported pursuant to the Rule. "MSRB" means the Municipal Securities Rulemaking Board established pursuant to Section 15B(b)(1) of the Securities Exchange Act of 1934 or any other entity designated or authorized by the SEC to receive reports pursuant to the Rule. Until otherwise designated by the MSRB or the SEC, filings with the MSRB are to be made through EMMA. "Official StatemenP" means the Official Statement, dated , 2015, relating to the Revenue Obligations. "Participating Underwriter"means any of the original purchaser(s) of the Revenue Obligations required to comply with the Rule in connection with the offering of the Revenue Obligations. "Repository"means,until otherwise designated by the SEC,EMMA. "Rule" means Rule 15c2-12 adopted by the SEC under the Securities Exchange Act of 1934, as the same has been or may be amended from time to time. "SEC" shall mean the United States Securities and Exchange Commission. Section 2. Provision of Annual Reports. (a) The District shall provide, or shall cause the Dissemination Agent to provide, to MSRB, through EMMA, not later than 15 days prior to the Annual Report Date, an Annual Report which is consistent with the requirements of Section 3 of this Disclosure Agreement. The Annual Report must be submitted in electronic format, accompanied by such identifying information as provided by the MSRB. The Annual Report may be submitted as a single document or as separate documents comprising a package, and may include by reference other information as provided in Section 3 of this Disclosure Agreement. Not later than 15 Business Days prior to such date, the District shall provide the Annual Report to the Dissemination Agent. If the Fiscal Year changes for the District, the District shall give notice of such change in the manner provided under Section 4(e)hereof. (b) If by 15 Business Days prior to the date specified in subsection(a) for providing the Annual Report to the MSRB, through EMMA, the Dissemination Agent has not received a copy of the Annual Report the Dissemination Agent shall contact the District to determine if the District is in compliance with subsection(a). The District shall provide a written certification with each Annual Report famished to the Dissemination Agent to the effect that such Annual Report constitutes the Annual Report required to be furnished by it hereunder. The Dissemination Agent may conclusively rely upon such certification of the District and shall have no duty or obligation to review such Annual Report. (c) If the Dissemination Agent is unable to verify that an Annual Report has been provided to the MSRB by the date required in subsection(a), the Dissemination Agent shall send a notice to the MSRB in substantially the form attached as Exhibit A. 41256736.1 2 (d) The Dissemination Agent shall: (i) determine the electronic filing address of, and then-current procedures For submitting Annual Reports to, the MSRB each year prior to the date for providing the Annual Report; and (ii) (if the Dissemination Agent is other than the Trustee), to the extent appropriate information is available to it,file a report with the Authority certifying that the Annual Report has been provided pursuant to this Disclosure Agreement, stating the date it was provided. Section 3. Content of Annual Reports. The District's Annual Report shall contain or incorporate by reference the following: (a) Audited financial statements prepared in accordance with generally accepted accounting principles as promulgated to apply to governmental entities from time to time by the Governmental Accounting Standards Board. If the District's audited financial statements are not available by the Annual Report Date,the Annual Report shall contain unaudited financial statements in a format similar to the financial statements contained in the Official Statement, and the audited financial statements shall be filed in the same manner as the Annual Report when they become available. (b) The principal evidenced by the Revenue Obligations Outstanding as of the June 30 next preceding the Annual Report Date and the principal amount of other Senior Obligations outstanding as of the June 30 next preceding the Annual Report Date. (c) Updated information (not to include projections), for the Fiscal Year ended the June 30 next preceding the Annual Report Date, comparable to the information contained in the Official Statement in Table Nos. 2,4, 6 (only with respect to information on 6 under the headings Fiscal Year and Sewer Service Charge), 8,9, 10, 11, 12, 13, 14 and 16. (d) In addition to any of the information expressly required to be provided under subsections (a), (b) and (c) of this Section, the District shall provide such farther information, if any, as may be necessary to make the specifically required statements, in the light of the circumstances under which they are made,not misleading. Any or all of the items listed above may be included by specific reference to other documents, including official statements of debt issues with respect to which the District is an"obligated person" (as defined by the Rule), which are available to the public on EMMA or filed with the SEC. The District shall clearly identify each such document to be included by reference. Section 4. Reporting of Significant Events. (a) Pursuant to the provisions of this Section 4, the District shall give, or cause to be given, notice of the occurrence of any of the Following events with respect to the Revenue Obligations, in a timely manner not more than ten(10)Business Days after the event: (1) principal and interest payment delinquencies; (2) defeasances; (3) tender offers; 41256736.1 3 (4) rating changes; (5) adverse tax opinions or the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax- status of the Revenue Obligations; (6) unscheduled draws on the debt service reserves reflecting financial difficulties; (7) unscheduled draws on credit enhancements reflecting financial difficulties; (8) substitution of credit or liquidity providers or their failure to perform;or (9) bankruptcy,insolvency,receivership or similar proceedings. For these purposes, any event described in the immediately preceding paragraph(9)is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent, or similar officer for the District in a proceeding under the United States Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the District, or if such jurisdiction has been assumed by leaving the existing governing body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement, or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the District. (b) Pursuant to the provisions of this Section 4, the District shall give, or cause to be given, notice of the occurrence of any of the following events with respect to the Revenue Obligations, if material: (1) mergers, consolidations,acquisitions,the sale of all or substantially all of the assets of the obligated persons or their termination; (2) appointment of a successor or additional Trustee or the change of the time of a Trustee; (3) nonpayment related defaults; (4) modifications to the rights of Owners; (5) a notices of prepayment; or (6) release, substitution or sale of property securing repayment of the Revenue Obligations. (c) Whenever the District obtains knowledge of the occurrence of a Listed Event, described in subsection(b)of this Section 4,the District shall as soon as possible determine if such event would be material under applicable federal securities law. 41256736.1 4 (d) If the District determines that knowledge of the occurrence of a Listed Event described in subsection(b) of this Section 4 would be material under applicable federal securities law, the District shall promptly notify the Dissemination Agent in writing and instruct the Dissemination Agent to report the occurrence to the Repository in a timely manner not more than ten(10)Business Days after the event. (e) If the Dissemination Agent has been instructed by the District to report the occurrence of a Listed Event,the Dissemination Agent shall file a notice of such occurrence with the MSRB. Section 5. Filines with the MSRB. All information, operating data, financial statements, notices and other documents provided to the MSRB in accordance with this Disclosure Agreement shall be provided in an electronic format prescribed by the MSRB and shall be accompanied by identifying information as prescribed by the MSRB. Section 6. Termination of Reporting Obligation. The District's obligations under this Disclosure Agreement shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Revenue Obligations. If such termination occurs prior to the final maturity of the Revenue Obligations, the District shall give notice of such termination in the same manner as for a Listed Event under Section 4 hereof. Section 7. Dissemination Agent. The District may, from time to time, appoint or engage another Dissemination Agent to assist it in carrying out its obligations under this Disclosure Agreement, and may discharge any such Dissemination Agent,with or without appointing a successor Dissemination Agent If at any time there is not any other designated Dissemination Agent, the Trustee, if the Trustee agrees to act, shall be the Dissemination Agent; provided it shall receive written notice of such designation at the time of such designation. Notwithstanding any other provision to this Disclosure Agreement to the contrary,the District may provide any Annual Report to Beneficial Owners by means of posting such Annual Report on an intemet site that provides open access to Beneficial Owners. Section 8. Amendment: Waiver. Notwithstanding any other provision of this Disclosure Agreement, the District may amend this Disclosure Agreement, provided no amendment increasing or affecting the obligations or duties of the Dissemination Agent shall be made without the consent of such party, and any provision of this Disclosure Agreement may be waived if such amendment or waiver is supported by an opinion of counsel expert in federal securities laws acceptable to the District and the Dissemination Agent to the effect that such amendment or waiver would not, in and of itself, cause the undertakings herein to violate the Rule if such amendment or waiver had been effective on the date hereof but taking into account any subsequent change in or official interpretation of the Rule. Section 9. Additional Information. Nothing in this Disclosure Agreement shall be deemed to prevent the District from disseminating any other information, using the means of dissemination set forth in this Disclosure Agreement or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure Agreement. If the District chooses to include any information in any Annual Report or notice of occurrence of a Listed Event in addition to that which is specifically required by this Disclosure Agreement, the District shall have no obligation under this Disclosure Agreement to update such information or include it in any future Annual Report or notice of occurrence of a Listed Event. Section 10. Default. In the event of a failure of the District or the Dissemination Agent to comply with any provision of this Disclosure Agreement, the Trustee, at the written direction of any Participating Underwriter or the holders of at least 25% of the aggregate amount of principal evidenced by Outstanding Revenue Obligations and upon being indemnified to its reasonable satisfaction, shall, or any holder or beneficial owner of the Revenue Obligations may, take such actions as may be necessary 41256736.1 5 and appropriate, including seeking mandate or specific performance by court order, to cause the District, Trustee or the Dissemination Agent, as the case may be, to comply with its obligations under this Disclosure Agreement. A default under this Disclosure Agreement shall not be deemed an Event of Default under the Trust Agreement, and the sole remedy under this Disclosure Agreement in the event of any failure of the District, the Trustee or the Dissemination Agent to comply with this Disclosure Agreement shall be an action to compel performance. Section 11. Duties. Immunities and Liabilities of Trustee and Dissemination Agent. Article Vill of the Trust Agreement is hereby made applicable to this Disclosure Agreement as if this Disclosure Agreement were (solely for this purpose) contained in the Trust Agreement. Neither the Trustee nor the Dissemination Agent shall be responsible for the Form or content of any Annual Report or notice of Listed Event. The Dissemination Agent shall receive reasonable compensation for its services provided under this Disclosure Agreement. The Dissemination Agent (if other than the Trustee or the Trustee in its capacity as Dissemination Agent) shall have only such duties as are specifically set forth in this Disclosure Agreement, and the District agrees to indemnify and save the Dissemination Agent, its officers, directors, employees and agents,harmless against any loss, expense and liabilities which it may incur arising out of or in the exercise or performance of its powers and duties hereunder, including the costs and expenses (including attorney's fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent's negligence or willful misconduct. The obligations of the District under this Section shall survive resignation or removal of the Dissemination Agent and payment of the Revenue Obligations. Section 12. Beneficiaries. This Disclosure Agreement shall more solely to the benefit of the District, the Trustee, the Dissemination Agent, the Participating Underwriter and holders and beneficial owners from time to time of the Revenue Obligations, and shall create no rights in any other person or entity. Section 13. Counterparts. This Disclosure Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. 41256736.1 6 IN WITNESS WHEREOF,the parties hereto have executed this Disclosure Agreement as of the date first above written. ORANGE COUNTY SANITATION DISTRICT By: Lorenzo Tyner Director of Finance and Administrative Services DIGITAL ASSURANCE CERTIFICATION LLC, as Dissemination Agent By: Authorized Representative Acknowledged and Accepted: U.S.BANK NATIONAL ASSOCIATION, as Trustee By: Authorized Officer 41256736.1 7 EXHIBIT A NOTICE TO MUNICIPAL SECURITIES RULEMAKING BOARD OF FAILURE TO FILE ANNUAL REPORT Name of Obligor: Orange County Sanitation District Name of Issue: Orange County Sanitation District Wastewater Refunding Revenue Obligations, Series 2015A Date of Execution and Delivery: ,2015 NOTICE IS HEREBY GIVEN that the Orange County Sanitation District(the"District')has not provided an Annual Report with respect to the above-captioned Revenue Obligations as required by Section 6.09 of the Trust Agreement, dated as of February 1, 2015, by and among U.S. Bank National Association, as Trustee, the Orange County Sanitation District Financing Corporation and the District. [The District anticipates that the Annual Report will be filed by .] Dated: 20_ ORANGE COUNTY SANITATION DISTRICT By Title: cc: Trustee Dissemination Agent 41256736.1 Fulbright&Jaworsld LLP—Draft of 12/01/14 PRELIMINARY OFFICIAL STATEMENT DATED JANUARY ,2015 'Ecy y NEW ISSUE—BOOK-ENTRY-ONLY RATINGS: m 3 S&P: Fitch: (See"RATINGS"herein.) O c In the opinion of Fulbright& Jaworsld LIP, a member of Norton Rose Fulbright, Los Angeles, c�5 California, Special Counsel, under existing statutes, regulations, rulings and court decisions, and assuming compliance with the tax covenants described herein, the interest component of each Installment Payment, and $ the allocable portion thereof disMbutable in respect of any Revenue Obligation, is excluded pursuant to section 103(a)of the Internal Revenue Code of 1986 from the gross income of the owners thereoffor federal income tax 5 purposes and is not an item of tax preference far purposes of the federal alternative minimum tax. It is also the :9= opinion of Special Counsel that under existing law the interest component of each Installment Payment, and the y s, allocable portion thereof distributable in respect of any Revenue Obligation, is exempt from personal income s tares of the State of California.See, however, "TAXMATTERS"herein. � a [District Logo] $[Par Amount]* [DAC Logo] - - ORANGE COUNTY SANITATION DISTRICT �a WASTEWATER REFUNDING REVENUE OBLIGATIONS C 5 SERIES 2015A a T c 9 Dated: Date of Delivery Due: as shown on the inside cover The $[Par Amount]' Orange Cowry Sanitation District Wastewater Refunding Revenue Obligations, Series 2015A (the `Revenue Obligations") are certificates of participation that evidence direct, fractional undivided interests of the Owners thereof in certain installment payments(the"Installment Payments"),and c u the interest thereon, to be made by the Orange County Sanitation District (the "District") pursuant to the Installment Purchase Agreement, dated as of February 1, 2015 (the"Installment Purchase Agreemenf'),by and a o between the District and the Orange County Sanitation District Financing Corporation (the "Corpomdon"). oPursuant to the Master Agreement for District Obligations, dared as of August 1, 2000 (the "Master o Agreement"),by and between the District and the Corporation,the District has established conditions and terms G upon which obligations such as the Installment Payments,and the interest thereon,will be incurred and secured. Z m Installment Payments under the Installment Purchase Agreement are payable solely from Net Revenues(as more fully described in the Master Agreement, the "Net Revenues") as provided in the Installment Purchase 'S Agreement, consisting primarily of all income and revenue received by the District from the operation or r ownership of the Wastewater System of the District (the "Wastewater System") remaining after payment of c" `o Maintenance and Operation Costs, as further described in"SECURITY AND SOURCES OF PAYMENT FOR THE REVENUE OBLIGATIONS"herein. The Installment Purchase Agreement provides that the obligation of a the District to pay the Installment Payments, and payments of interest thereon, and certain other payments 0 o required to be made in accordance with the Installment Purchase Agreement, solely from Net Revenues, is c `o absolute and unconditional. See "SECURITY AND SOURCES OF PAYMENT FOR THE REVENUE 'A c OBLIGATIONS"herein. � 5 co The proceeds of the Revenue Obligations will be used to(i)prepay and retire a portion of the District's Certificates of Participation, Series 2007B, currently outstanding in the aggregate principal amount of $173,325,000 and (ii)pay the costs incurred in connection with the execution and delivery of the Revenue °m Obligations. See`REFUNDING PLAN"herein. v.g Interest evidenced by the Revenue Obligations will be payable semiannually on February 1 and m `o August 1 of each year, commencing on August 1, 2015. See"THE REVENUE OBLIGATIONS"herein. The 9 „ Revenue Obligations initially will be delivered only in book-entry form and will be registered in the name of �E Cede&Co., as nominee of The Depository Trust Company,New York,New York("DTC'), which will act as O securities depository for the Revenue Obligations. Individual purchases of the Revenue Obligations will be a3 ' Preliminary,subject to change. o= 4719437M 11411481 made in book-entry form only. Purchasers of Revenue Obligations will not receive physical certificates representing their ownership interests in the Revenue Obligations purchased. The Revenue Obligations will be delivered in denominations of$5,000 and any integral multiple thereof Payments of principal and interest evidenced by the Revenue Obligations are payable directly to DTC by U.S. Bank National Association, as trustee(the"Trusted'). Upon receipt of payments of such principal and interest,DTC will in turn distribute such payments to the beneficial owners of the Revenue Obligations. See APPENDIX E — "BOOK-ENTRY SYSTEM"herein. THE OBLIGATION OF THE DISTRICT TO PAY THE INSTALLMENT PAYMENTS, AND THE INTEREST THEREON, AND OTHER PAYMENTS REQUIRED TO BE MADE BY IT UNDER THE INSTALLMENT PURCHASE AGREEMENT IS A SPECIAL OBLIGATION OF THE DISTRICT PAYABLE, IN THE MANNER PROVIDED IN THE INSTALLMENT PURCHASE AGREEMENT, SOLELY FROM NET REVENUES AND OTHER FUNDS PROVIDED FOR IN THE INSTALLMENT PURCHASE AGREEMENT, AND DOES NOT CONSTITUTE A DEBT OF THE DISTRICT OR OF THE STATE OF CALIFORNIA, OR OF ANY POLITICAL SUBDIVISION THEREOF, IN CONTRAVENTION OF ANY CONSTITUTIONAL OR STATUTORY DEBT LIMITATION OR RESTRICTION. NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE STATE OF CALIFORNIA, OR ANY POLITICAL SUBDIVISION THEREOF, IS PLEDGED TO THE PAYMENT OF THE INSTALLMENT PAYMENTS, OR THE INTEREST THEREON, OR OTHER PAYMENTS REQUIRED TO BE MADE UNDER THE INSTALLMENT PURCHASE AGREEMENT. SEE"SECURITY AND SOURCES OF PAYMENT FOR THE REVENUE OBLIGATIONS'HEREIN. This cover page contains information intended for quick reference only. It is not a summary of this issue. Investors must read the entire Official Statement to obtain information essential to making an informed investment decision. BIDS FOR THE PURCHASE OF THE REVENUE OBLIGATIONS WILL BE RECEIVED BY THE DISTRICT UNTIL : A.M.NEW YORK TIME ON JANUARY ,2015 UNLESS POSTPONED OR CANCELLED AS SET FORTH IN THE OFFICIAL NOTICE INVITING BIDS. The Revenue Obligations are offered when, as and if executed and delivered and received by , as the Initial Purchaser, subject to the approval of Fulbright&Jaworski LIP, a member of Norton Rose Fulbright, Los Angeles, California,Special Counsel and Disclosure Counsel to the District, and certain other conditions. Certain legal matters will be passed upon for the District and the Corporation by Woodruff, Spradlin &Smart, a Professional Corporation, Costa Mesa, California. Public Resources Advisory Group, Los Angeles, California, has served as financial advisor to the District in connection with the execution and delivery of the Revenue Obligations. It is anticipated that the Revenue Obligations in definitive form will be available far delivery through the book-entry facilifies of DTC on or about February 2015. Dated: January—,2015 491943!&5 MATURITY SCHEDULE* Maturity Date Principal Interest CUSIPi (Februarys Amount Rate Yield Price (Base No. 68428T1 2018 $ % % % 2019 2020 2021 2022 2023 2024 2025 2026 2027 Preliminary,subject to change. t CUSIP is a registered trademark of the American Bankers Association. CUSIP data herein is provided by CUSIP Global Services, managed by Standard &Poor's Financial Services LLC on behalf of The American Bankers Association. This data is not intended to create a database and does not serve in any way as a substitute for the CUSIP Services. None of the District,the Initial Purchaser or the Financial Advisor is responsible for the selection or correctness of the CUSIP numbers set forth herein. 4719437M [INSERT MAP] 47194378.5 ORANGE COUNTY SANITATION DISTRICT Board of Directors Tom Beamish (Chair) La Habra John Nielsen—(Vice Chair)—Tustin Lucille KringAnaheim Teresa Smith—Orange Brett Murdock—Brea Scott Nelson—Placentia Fred Smith—Buena Park David Benavides Santa Ana Prakash NarainCypress Michael Levitt—Seal Beach Steve Nagel—Fountain Valley David Shawver—Stanton Gregory Sebourn Fullerton Brad Reese Villa Park Steve Jones—Garden Grove Gene Hernandez— Yorba Linda Joe Carchio—Huntington Beach James M. Ferryman—Costa Mesa Sanitary District Steven Choi—Irvine John Withers—Irvine Ranch Water District Peter Kim—La Palma Tyler Diep—Midway City Sanitary District Richard Murphy—Los Alamitos Janet Nguyen— Member of the Orange County Keith Curry Newport Beach Board of Supervisors Executive Mana¢ement of the District James Herberg, General Manager Robert P. Ghirelli,D.Env.,Assistant General Manager Lorenzo Tyner,Director of Finance and Administrative Services Ed Torres,Director of Operations and Maintenance Nick Arhontes,Director of Facilities Support Services Robert Thompson,Director of Engineering Jeff Reed,Director of Human Resources Special Services Special Counsel and Disclosure Counsel Fulbright&Jaworski LLP (a member of Norton Rose Fulbright) Los Angeles,California District General Counsel Bradley R.Hogin Woodruff, Spradlin&Smart,a Professional Corporation Costa Mesa,California Financial Advisor Public Resources Advisory Group Los Angeles,California Trustee Verification Agent U.S. Bank National Association Grant Thornton LLP Los Angeles,California Minneapolis,Minnesota 4919437M This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the Revenue Obligations by any person in any jurisdiction in which it is unlawful for such person to make such an offer, solicitation or sale. The information set forth herein has been provided by the Orange County Sanitation District (the "District') and other sources that are believed by the District to be reliable. No dealer,broker, salesperson or other person has been authorized to give any information or to make any representations other than those contained in this Official Statement. If given or made, such other information or representations must not be relied upon as having been authorized by the District,the Corporation or the Initial Purchaser in connection with any reoffering. This Official Statement is not to be construed as a contract with the purchasers of the Revenue Obligations. Statements contained in this Official Statement which involve estimates, projections, forecasts or matters of opinion, whether or not expressly so described herein, are intended solely as such and are not to be construed as representations of facts. The information and expressions of opinion herein are subject to change without notice and neither delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the District or the Corporation since the date hereof This Official Statement is submitted with respect to the sale of the Revenue Obligations referred to herein and may not be reproduced or used, in whole or in part, for any other purpose, unless authorized in writing by the District. All summaries of the documents and laws are made subject to the provisions thereof and do not purport to be complete statements of any or all such provisions. Preparation of this Official Statement and its distribution have been duly authorized and approved by the District and the Corporation. In connection with the offering of the Revenue Obligations, the Initial Purchaser in connection with any reoffering may over-allot or effect transactions which stabilize or maintain the market price of the Revenue Obligations at a level above that which might otherwise prevail in the open market. Such stabilizing,if commenced,may be discontinued at any time. The Initial Purchaser in connection with any reoffering may offer and sell the Revenue Obligations to certain dealers,institutional investors and others at prices lower than the public offering prices stated on the inside cover page hereof and such public offering prices may be changed from time to time by the Initial Purchaser. Certain statements included or incorporated by reference in this Official Statement constitute forward-looking statements. Such statements me generally identifiable by the terminology used such as "plan,""expect,""estimate,""budget'or other similar words. The achievement of certain results or other expectations contained in such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause actual results,performance or achievements described to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. 4919437M TABLE OF CONTENTS (continued) Paee INTRODUCTION......................................................................................................................... 1 General............................................................................................................................... 1 TheDistrict........................................................................................................................2 Security and Sources of Payment for the Revenue Obligations........................................2 Continuing Disclosure.......................................................................................................3 Miscellaneous ....................................................................................................................3 REFUNDING PLAN.....................................................................................................................4 ESTIMATED SOURCES AND USES OF FUNDS..................................................................... 5 THE REVENUE OBLIGATIONS................................................................................................ 5 General............................................................................................................................... 5 Prepayment Provisions.......................................................................................................6 SECURITY AND SOURCES OF PAYMENT FOR THE REVENUE OBLIGATIONS............7 InstallmentPayments.........................................................................................................7 Available Funds of the District.......................................................................................... 8 NetRevenues.....................................................................................................................9 Rate Stabilization Account.............................................................................................. 10 Allocation of Revenues.................................................................................................... 10 RateCovenant.................................................................................................................. 11 Limitations on Issuance of Additional Obligations......................................................... 11 Insurance.......................................................................................................................... 13 Allocation of Installment Payments................................................................................. 14 THEDISTRICT........................................................................................................................... 15 Background...................................................................................................................... 15 Organization and Administration..................................................................................... 16 Services............................................................................................................................ 17 ServiceArea..................................................................................................................... 17 Employees........................................................................................................................ 18 RetirementPlan................................................................................................................ 19 Other Post-Employment Benefits....................................................................................21 RiskManagement............................................................................................................21 ExistingFacilities.............................................................................................................21 Permits, Licenses and Other Regulations ........................................................................23 District Planning and Capital Improvement Program.....................................................24 Groundwater Replenishment System...............................................................................25 Preferred Level of Treatment...........................................................................................26 BiosolidsManagement.....................................................................................................26 UrbanRunoff...................................................................................................................27 Integrated Emergency Response Program.......................................................................28 Five-Year Strategic Planning...........................................................................................29 4919437&5 -i- TABLE OF CONTENTS (continued) Page DISTRICT REVENUES..............................................................................................................30 SewerService Charges ....................................................................................................30 AdditionalRevenues........................................................................................................33 Wastewater Treatment History........................................................................................34 Customers ........................................................................................................................34 AssessedValuation..........................................................................................................36 Tax Levies and Delinquencies........................................................................................37 BudgetaryProcess............................................................................................................38 Reserves...........................................................................................................................39 Summaryof Operating Data............................................................................................40 Forecasted Operating Data...............................................................................................42 Management's Discussion and Analysis of Operating Data............................................44 Investment of District Funds............................................................................................45 FINANCIAL OBLIGATIONS....................................................................................................45 ExistingIndebtedness......................................................................................................45 AnticipatedFinancings ....................................................................................................46 Direct and Overlapping Bonded Debt..............................................................................46 THECORPORATION................................................................................................................46 LIMITATIONS ON TAXES AND REVENUES........................................................................47 Article XIIIA of the California Constitution...................................................................47 Legislation Implementing Article XIIIA.........................................................................47 Article XIIIB of the California Constitution....................................................................48 Proposition IA and Proposition 22..................................................................................49 Article XIIIC and Article XIIID of the California Constitution......................................50 Other Initiative Measures.................................................................................................52 LEGALMATTERS.....................................................................................................................52 FINANCIAL ADVISOR.............................................................................................................52 ABSENCE OF LITIGATION.....................................................................................................52 FINANCIAL STATEMENTS.....................................................................................................53 TAXMATTERS..........................................................................................................................53 TaxExemption.................................................................................................................53 Tax Accounting Treatment of Bond Premium and Original Issue Discount...................55 Other Tax Consequences.................................................................................................56 4719437M _ jj _ TABLE OF CONTENTS (continued) Page VERIFICATION OF MATHEMATICAL COMPUTATIONS..................................................56 CONTINUING DISCLOSURE...................................................................................................57 RATINGS....................................................................................................................................57 PURCHASE AND REOFFERING.............................................................................................57 MISCELLANEOUS....................................................................................................................58 APPENDIX A — COMPREHENSIVE ANNUAL FINANCIAL REPORT OF THE ORANGE COUNTY SANITATION DISTRICT FOR FISCAL YEAR ENDED JUNE 30,2014.............................................................................A-1 APPENDIX B — THE COUNTY OF ORANGE—ECONOMIC AND DEMOGRAPHIC INFORMATION....................................................................................................B-I APPENDIX C — SUMMARY OF PRINCIPAL LEGAL DOCUMENTS........................................C-1 APPENDIX D — FORM OF CONTINUING DISCLOSURE AGREEMENT..................................D-1 APPENDIX E — BOOK-ENTRY SYSTEM......................................................................................E-1 APPENDIX F — FORM OF APPROVING OPINION OF SPECIAL COUNSEL............................F-1 4719437M OFFICIAL STATEMENT $[PAR AMOUNT]' ORANGE COUNTY SANITATION DISTRICT WASTEWATER REFUNDING REVENUE OBLIGATIONS SERIES 2015A INTRODUCTION This introduction contains only a brief summary of certain of the terms of the Revenue Obligations being offered and a brief description of the Offrcial Statement. All statements contained in this introduction are qualified in their entirety by reference to the entire Official Statement. References to, and summaries of,provisions of the Constitution and laws of the State of California (the "State') and any documents referred to herein do notpurport to be complete and such references are qualified in their entirely by reference to the complete provisions. All capitalized terms used in this Official Statement and not otherwise defined herein have the meanings set forth in the Trust Agreement, the Installment Purchase Agreement and the Master Agreement (each, as hereinafter defined). See APPENDIX C— "SUMMARY OFPRINCIPAL LEGAL DOCUMENTS—Definitions"herein. General This Official Statement, including the cover page and all appendices hereto, provides certain information concerning the sale and delivery of$[Par Amount]aggregate principal amount of the Orange County Sanitation District Wastewater Refunding Revenue Obligations, Series 2015A (the "Revenue Obligations"), which are certificates of participation evidencing direct,fractional undivided interests in certain installment payments (the "Installment Payments") and the interest thereon, to be made by the Orange County Sanitation District (the "District") pursuant to the Installment Purchase Agreement, dated as of February 1, 2015 (the"Installment Purchase Agreement"),by and between the District and the Orange County Sanitation District Financing Corporation(the"Corporation"). Unless the context clearly indicates to the contrary, a reference herein to either of the Installment Purchase Agreement or the Revenue Obligations is intended to refer to the corresponding interest in the Installment Purchase Agreement. Pursuant to the Master Agreement for District Obligations, dated as of August 1, 2000 (the "Master Agreement'), by and between the District and the Corporation, the District has established and declared the conditions and terms upon which obligations such as the Installment Purchase Agreement, and the Installment Payments and the interest thereon, will be incurred and secured. Installment Payments under the Installment Purchase Agreement are payable solely from Net Revenues (as defined hereinafter) as provided in the Installment Purchase Agreement, consisting primarily of all income and revenue received by the District from the operation or ownership of the Wastewater System of the District (the "Wastewater System") remaining after payment of Maintenance and Operation Costs, as further described in "SECURITY AND SOURCES OF PAYMENT FOR THE REVENUE OBLIGATIONS" herein. Preliminary,subject to change. 47194378.5 The Revenue Obligations me to be executed and delivered pursuant to a Trust Agreement, dated as of February 1, 2015 (the "Trust Agreement'), by and among the District, the Corporation and U.S. Bank National Association,as trustee(the"Trustee"). Proceeds from the sale of the Revenue Obligations will be used to (i)prepay and retire a portion of the District's Certificates of Participation, Series 2007B, currently outstanding in the aggregate principal amount of$173,325,000,and(ii)pay the costs incurred in connection with the execution and delivery of the Revenue Obligations. See "REFUNDING PLAN" herein. The Revenue Obligations will be executed and delivered in the form of fully registered certificates of participation, dated as of the date of initial delivery thereof and will mature on February 1 in each such year as set forth on the inside cover page hereof. Interest evidenced by the Revenue Obligations will be payable semiannually on February 1 and August 1 of each year, commencing on August 1, 2015. See"THE REVENUE OBLIGATIONS"herein. The Revenue Obligations initially will be delivered only in book-entry form and will be registered in the name of Cede & Co., as nominee of The Depository Trust Company,New York, New York ("DTC"), which will act as securities depository for the Revenue Obligations. The Revenue Obligations will be delivered in denominations of$5,000 and any integral multiple thereof So long as the Revenue Obligations are in the DTC book-entry system, the interest, principal, purchase price and prepayment premiums, if any, due with respect to the Revenue Obligations will be payable by the Trustee, or its agent,to DTC or its nominee. DTC, in tam,will make payments pursuant to its procedures as described under APPENDIX E — "BOOK—ENTRY SYSTEM" herein. The District The District is a public agency responsible for regional wastewater collection, treatment and disposal. The District is the sixth largest wastewater discharger in the United States. The District provides service to an area with a population of approximately 2.5 million people in the northern and central portion of the County of Orange (the "County"), in a service was of approximately 479 square miles, treating an average of 198 million gallons per day("mg/d")of wastewater in Fiscal Year 2013-14. See`THE DISTRICT,""DISTRICT REVENUES"and"FINANCIAL OBLIGATIONS"herein. Security and Sources of Payment for the Revenue Obligations The Revenue Obligations, which are certificates of participation, evidence direct, fractional undivided interests in the Installment Payments, and the interest thereon, paid by the District pursuant to the Installment Purchase Agreement. The obligation of the District to pay the Installment Payments and the interest thereon and other payments required to be made by it under the Installment Purchase Agreement is a special obligation of the District payable, in the manner provided under the Installment Purchase Agreement, solely from Net Revenues, and other funds as provided in the Installment Purchase Agreement. Net Revenues generally consist of all income and revenue received by the District from the operation or ownership of the Wastewater System remaining after payment of Maintenance and Operation Costs, all as further provided in the Master Agreement. The Installment Purchase Agreement constitutes a Senior Obligation and, as such, is subject to the provisions of the Master Agreement and is afforded all of the advantages, benefits, interests and security afforded Senior Obligations pursuant to the Master Agreement. The District currently has Outstanding Senior Obligations payable from Net Revenues on a parity with the Installment Payments under the Installment Purchase Agreement. See "ESTIMATED SOURCES AND USES OF FUNDS," "FINANCIAL OBLIGATIONS — Existing Indebtedness" and "THE DISTRICT"herein and APPENDIX C—"SUMMARY OF PRINCIPAL LEGAL DOCUMENTS— Master Agreement'attached hereto.The District has no Subordinate Obligations currently outstanding. 47194378.5 2 Pursuant to the Master Agreement, the District will, to the extent permitted by law, fix, prescribe and collect fees and charges for the services and facilities of the Wastewater System which will be at least sufficient to yield during each Fiscal Year (a)Net Revenues equal to 125% of Debt Service on Senior Obligations for such Fiscal Year and (b)Net Operating Revenues equal to 100% of Debt Service on all Obligations for such Fiscal Year. The District may make adjustments from time to time in such fees and charges and may make such classification thereof as it deems necessary, but shall not reduce the fees and charges then in effect unless the Revenues and Net Revenues from such reduced fees and charges will at all times be sufficient to meet the requirements of the Master Agreement. See "SECURITY AND SOURCE OF PAYMENT FOR THE REVENUE OBLIGATIONS—Rate Covenant"herein. The obligation of the District to pay the Installment Payments and the interest thereon,and other payments required to be made by it under the Installment Purchase Agreement is a special obligation of the District payable, in the manner provided in the Installment Purchase Agreement, solely from Net Revenues and other funds provided for in the Installment Purchase Agreement,and does not constitute a debt of the District or of the State, or of any political subdivision thereof, in contravention of any constitutional or statutory debt limitation or restriction. Neither the faith and credit nor the taxing power of the District or the State or any political subdivision thereof, is pledged to the payment of the Installment Payments, or the interest thereon, or other payments required to be made under the Installment Purchase Agreement. The Installment Purchase Agreement constitutes a Senior Obligation and, as such, is subject to the provisions of the Master Agreement and is afforded all of the advantages, benefits, interests and security afforded Senior Obligations pursuant to the Master Agreement. See"SECURITY AND SOURCES OF PAYMENT FOR THE REVENUE OBLIGATIONS"herein. Continuing Disclosure The District has covenanted for the benefit of holders and beneficial owners of the Revenue Obligations (a)to provide certain financial information and operating data(the"Annual Report')relating to the District and the property in the District not later than eight months after the end of the District's Fiscal Year (which currently would be March 1), commencing with the report for the 2013-14 Fiscal Year, and (b)to provide notices of the occurrence of certain enumerated events. The specific nature of the information to be contained in the Annual Report or the notices of enumerated events is set forth in the Continuing Disclosure Agreement. See "CONTINUING DISCLOSURE" herein and APPENDIX D —"FORM OF CONTINUING DISCLOSURE AGREEMENT." Miscellaneous The descriptions herein of the Trust Agreement,the Master Agreement, the Instalbnent Purchase Agreement, the Continuing Disclosure Agreement and any other agreements relating to the Revenue Obligations are qualified in their entirety by reference to such documents. Copies of the Trust Agreement, the Master Agreement and the Installment Purchase Agreement are on file and available for inspection at the corporate trust office of U.S. Bank National Association, Los Angeles, California Attention: Corporate Trust. 47194378.5 3 REFUNDING PLAN A portion of the net proceeds of sale of the Revenue Obligations, together with other available moneys, will be used to prepay and retire a portion of the installment payments (the `Refunded Installment Payments") to be made by the District pursuant to an Installment Purchase Agreement, dated as of December 1,2007 (the "200713 Installment Purchase Agreement'),by and between the District and the Corporation. Contemporaneous with the execution and delivery of the 2007B Installment Purchase Agreement, the District caused the execution and delivery of its Certificates of Participation, Series 2007B (the "2007B Certificates") evidencing direct, fractional undivided interests in certain installment payments (the "2007B Installment Payments") and the interest thereon, to be made by the District. The 2007B Certificates were executed and delivered on December 20, 2007 in an aggregate principal amount equal to the original aggregate amount of the 2007B Installment Payments ($300,000,000), of which $173,325,000 is currently outstanding. Pursuant to the terms of the Trust Agreement, dated as December 1, 2007 (the "2007B Trust Agreement'), by and among the District, the Corporation and MUFG Union Bank, N.A., as successor trustee thereunder, the prepayment of the 2007B Installment Payments (the `Refunded Installment Payments"), and prepayment of the 2007B Certificates maturing on February 1 in the years _` through inclusive, in the aggregate principal amount of $ * in respect thereof (the `Refunded Certificates"), will be effected by depositing a portion of the proceeds of the Revenue Obligations,together with other available moneys, in an escrow fund(the"Escrow Fund")to be created and established under the Escrow Agreement, dated as of February 1, 2015, by and between the District and MUFG Union Bank,N.A.,as escrow agent thereunder. The District will cause the Escrow Fund deposit to be invested in Government Obligations (as defined in the 200713 Trust Agreement). The Government Obligations will be scheduled to mature in such amounts and at such times and will pay principal and interest at such rates as to provide amounts sufficient to pay the Refunded Installment Payments and interest thereon and to make scheduled distributions thereof with respect to the Refunded Certificates due and payable through February 1,2017, and on February 1, 2017 to prepay without premium the unpaid Refunded Installment Payments, and through distribution of such prepayment to prepay the remaining Refunded Certificates, all in accordance with the terms of the 2007B Installment Purchase Agreement, the 2007B Trust Agreement and the Refunded Certificates. See "VERIFICATION OF MATHEMATICAL COMPUTATIONS" herein. The amounts deposited in the Escrow Fund will be held in trust solely for the Refunded Certificates and will not be available to pay the principal and interest evidenced by the Revenue Obligations or any obligations other than the Refunded Certificates. Preliminary,subject to change. 47194378.5 4 ESTIMATED SOURCES AND USES OF FUNDS The estimated sources and uses of funds in connection with the execution and delivery of the Revenue Obligations are presented below. Sources Principal Amount of Revenue Obligations $ Premium Refunded Certificates Reserve Release Total Sources $ Uses Deposit to Escrow Fund $ Initial Purchaser's Discount Costs of Issuance"' Total Uses $ Costsinclude,among other things,fees and expenses of rating agencies,verification agent, Special Counsel and Disclosure Counsel,and the initial fees of the Tmstee. THE REVENUE OBLIGATIONS General The Revenue Obligations will be prepared in the form of fully registered certificates of participation in denominations of$5,000 and any integral multiple thereof. The Revenue Obligations will be dated as of the date of initial delivery thereof and will mature on February 1 in such years as set forth on the inside cover page hereof. Interest evidenced by the Revenue Obligations will be payable semiannually on February 1 and August 1 of each year, commencing on August 1, 2015. The Revenue Obligations initially will be delivered only in book-entry form and will be registered in the name of Cede &Co., as nominee of The Depository Trust Company,New York, New York("DTC"),which will act as securities depository for the Revenue Obligations. Individual purchases of the Revenue Obligations will be made in book-entry form only. Purchasers of Revenue Obligations will not receive physical certificates representing their ownership interests in the Revenue Obligations purchased. The interest evidenced by the Revenue Obligations shall be payable on each Interest Payment Date to and including their respective Principal Payment Dates or prepayment prior thereto, and shall represent the sum of the interest on the Installment Payments coming due on the Interest Payment Dates in each year. The principal evidenced by the Revenue Obligations shall be payable on their respective Principal Payment Dates in each year and shall represent the Installment Payments coming due on the Principal Payment Dates in each year. Each Revenue Obligation shall evidence interest from the Interest Payment Date next preceding its date of execution to which interest has been paid in full,unless such date of execution shall be after a Record Date and on or prior to the following Interest Payment Date,in which case such Revenue Obligation shall evidence interest from such Interest Payment Date, or unless such date of execution shall be on or prior to July 15, 2015, in which case such Revenue Obligation shall represent interest from its date of initial delivery. Notwithstanding, the foregoing, if, as shown by the records of the Trustee, interest evidenced by the Revenue Obligations shall be in default, each Revenue Obligation shall evidence interest from the last Interest Payment Date to which such interest has been paid in full or duly provided for. Interest evidenced by the Revenue Obligations shall be computed on the basis of a 360-day year consisting of twelve 30-day months. See APPENDIX C — "SUMMARY OF PRINCIPAL LEGAL DOCUMENTS—Trust Agreement' 47194378.5 5 Payments of principal and interest evidenced by the Revenue Obligations me payable directly to DTC by U.S. Bank National Association, as trustee. Upon receipt of payments of such principal and interest, DTC will in turn distribute such payments to the beneficial owners of the Revenue Obligations. So long as the Revenue Obligations are held in the DTC book-entry system, the interest, principal, purchase price and prepayment premiums, if any, due with respect to the Revenue Obligations will be payable by the Trustee, or its agent, to DTC or its nominee. DTC, in win, will make payments pursuant to its procedures as described under APPENDIX E—"BOOK-ENTRY SYSTEM"herein. Prepayment Provisions Optional Prepayment. The Revenue Obligations with stated Principal Payment Dates prior to February 1, 2026 me not subject to optional prepayment prior to their stated Principal Payment Dates. The Revenue Obligations with stated Principal Payment Dates on or after February 1, 2026 we subject to optional prepayment prior to their stated Principal Payment Dates, on any date on or after February 1, 2025, in whole or in part, in Authorized Denominations, from and to the extent of prepaid Installment Payments paid pursuant to the Installment Purchase Agreement or from any other source of available funds, any such prepayment to be at a price equal to the principal evidenced by the Revenue Obligations to be prepaid,plus accrued interest evidenced thereby to the date fixed for prepayment,without premium. Selection of Revenue Obligations for Prepayment Whenever less than all the Outstanding Revenue Obligations are to be prepaid on any one date pursuant to provisions of the Trust Agreement with respect to optional prepayment of Revenue Obligations, the Trustee shall select the Revenue Obligations to be prepaid among Revenue Obligations with different Principal Payment Dates as directed in a Written Request of the District. Whenever less than all the Outstanding Revenue Obligations with the same stated Principal Payment Date are to be prepaid on any one date in accordance with the Trust Agreement, the Trustee shall select the Revenue Obligations with such Principal Payment Date to be prepaid as directed in a Written Request of the District, or at the discretion of the District by lot in any manner that the Trustee deems fair and appropriate, which decision shall be final and binding upon the District and the Owners. The Trustee shall promptly notify the District in writing of the numbers of the Revenue Obligations so selected for prepayment on such date. For purposes of such selection, any Revenue Obligation may be prepaid in part in Authorized Denominations. Notice of Prepayment When prepayment of Revenue Obligations is authorized pursuant to the Trust Agreement, the Trustee shall give notice, at the expense of the District, of the prepayment of the Revenue Obligations. The notice of prepayment shall specify(a)the Revenue Obligations or designated portions thereof(in the case of prepayment of the Revenue Obligations in part but not in whole)which are to be prepaid, (b)the date of prepayment, (c)the place or places where the prepayment will be made, including the name and address of any paying agent, (d)the prepayment price, (e)the CUSIP numbers assigned to the Revenue Obligations to be prepaid, (f)the numbers of the Revenue Obligations to be prepaid in whole or in part and, in the case of any Revenue Obligation to be prepaid in part only, the principal evidenced by such Revenue Obligation to be prepaid, and (g)the interest rate and stated Principal Payment Date of each Revenue Obligation to be prepaid in whole or in part. Such notice of prepayment shall further state that on the specified date there shall become due and payable upon each Revenue Obligation or portion thereof being prepaid the prepayment price and that from and after such date interest evidenced thereby shall cease to accrue and be payable. With respect to any notice of optional prepayment of Revenue Obligations, unless at the time such notice is given the Revenue Preliminary,subject to change. 47194308.5 6 Obligations to be prepaid shall be deemed to have been paid within the meaning of the Trust Agreement, such notice shall state that such prepayment is conditional upon receipt by the Trustee, on or prior to the date fixed for such prepayment, of moneys sufficient to pay for the prepayment price of the Revenue Obligations to be prepaid, and that if such moneys shall not have been so received said notice shall be of no force and effect and the District shall not be required to prepay such Revenue Obligations. In the event a notice of prepayment of Revenue Obligations contains such a condition and such moneys are not so received, the prepayment of Revenue Obligations as described in the conditional notice of prepayment shall not be made and the Trustee shall,within a reasonable time after the date on which such prepayment was to occur, give notice to the persons and in the manner in which the notice of prepayment was given, that such moneys were not so received and that there shall be no prepayment of Revenue Obligations pursuant to such notice of prepayment. The Trustee shall,at least 20 but not more than 60 days prior to any prepayment date, give notice of prepayment to the respective Owners of Revenue Obligations designated for prepayment by first-class mail,postage prepaid, at their addresses appearing on the registration books maintained by the Trustee as of the close of business on the day before such notice of prepayment is given. The actual receipt by the Owner of any notice of such prepayment shall not be a condition precedent to prepayment, and neither failure to receive such notice nor any defect therein shall affect the validity of the proceedings for the prepayment of such Revenue Obligations or the cessation of interest evidenced thereby on the date fixed for prepayment. Effect of Prepayment If notice of prepayment has been duly given as aforesaid and moneys for the payment of the prepayment price of the Revenue Obligations to be prepaid are held by the Trustee, then on the prepayment date designated in such notice, the Revenue Obligations so called for prepayment shall become payable at the prepayment price specified in such notice; and from and after the date so designated,interest evidenced by the Revenue Obligations so called for prepayment shall cease to accrue, such Revenue Obligations shall cease to be entitled to any benefit or security hereunder and the Owners of such Revenue Obligations shall have no rights in respect thereof except to receive payment of the prepayment price thereof. The Trustee shall, upon surrender for payment of any of the Revenue Obligations to be prepaid, pay such Revenue Obligations at the prepayment price thereof, and such moneys shall be pledged to such payment. SECURITY AND SOURCES OF PAYMENT FOR THE REVENUE OBLIGATIONS Installment Payments Pursuant to the Installment Purchase Agreement, the Project will be reacquired by the District from the Corporation. The District has covenanted to, subject to any rights of prepayment under the Installment Purchase Agreement, pay to the Corporation, solely from Net Revenues and from no other sources, the Purchase Price in Installment Payments, with interest thereon, as provided in the Installment Purchase Agreement. Pursuant to the Master Agreement, the District has established and declared the conditions and terms upon which obligations such as the Installment Purchase Agreement, and the Installment Payments and the interest thereon payable under the Installment Purchase Agreement,will be incurred and secured. The obligation of the District to make the Installment Payments, and payments of interest thereon,and other payments required to be made by it under the Installment Purchase Agreement, solely from Net Revenues,is absolute and unconditional,and until such time as the Installment Payments, payments of interest thereon, and such other payments shall have been paid in full (or provision for the payment thereof shall have been made pursuant to the Installment Purchase Agreement), the District has covenanted that it will not discontinue or suspend any Installment Payments when due,whether or not the Project or any part thereof is operating or operable or has been completed, or its use is suspended, 47194378.5 interfered with, reduced or curtailed or terminated in whole or in part, and such Installment Payments, payments of interest thereon, and other payments shall not be subject to reduction whether offset or otherwise and shall not be conditional upon the performance or nonperformance by any party of any agreement or any cause whatsoever. The District's obligation to make Installment Payments from Net Revenues is on a parity with the District's obligation to make payments with respect to its Outstanding Senior Obligations. See "Net Revenues"below. Pursuant to the Trust Agreement, the Corporation has assigned to the Trustee for the benefit of the Owners of the Revenue Obligations substantially all of its rights, title and interest in and to the Installment Purchase Agreement, including its right to receive Installment Payments and the interest thereon. The District has certain Existing Senior Obligations Outstanding payable from Net Revenues on a parity with the Installment Payments under the Installment Purchase Agreement. The term "Existing Senior Obligations" as used in this Official Statement refers to the Installment Purchase Agreements relating to the District's currently Outstanding Senior Obligations, as set forth on Table 16 under the caption "FINANCIAL OBLIGATIONS—Existing Indebtedness"herein. The term"Senior Obligations" as used in this Official Statement refers to the Existing Senior Obligations and to any additional Senior Obligations, such as the Installment Purchase Agreement, that may be made payable on a parity basis to the Installment Payments as provided in the Master Agreement. Senior Obligations, together with any Subordinate Obligations payable on a subordinate basis to the Installment Payments incurred as provided in the Master Agreement, are referred to collectively as the "Obligations." The District has no Subordinate Obligations currently outstanding. See "FINANCIAL OBLIGATIONS Existing Indebtedness" herein and APPENDIX C — "SUMMARY OF PRINCIPAL LEGAL DOCUMENTS— Master Agreement"attached hereto. The obligation of the District to pay the Installment Payments, and the interest thereon,and other payments required to be made by it under the Installment Purchase Agreement and Master Agreement, is a special obligation of the District payable, in the manner provided in the Installment Purchase Agreement, solely from Net Revenues and other funds provided for in the Installment Purchase Agreement, and does not constitute a debt of the District,the State or any political subdivision thereof, in contravention of any constitutional or statutory debt limitation or restriction. Neither the faith and credit nor the taxing power of the District, the State or any political subdivision thereof, is pledged to the payment of the Installment Payments, or the interest thereon, or other payments required to be made under the Installment Purchase Agreement. The Installment Purchase Agreement constitutes a Senior Obligation and, as such, is subject to the provisions of the Master Agreement and is afforded all of the advantages, benefits, interests and security afforded Senior Obligations pursuant to the Master Agreement. See"SECURITY AND SOURCES OF PAYMENT FOR THE REVENUE OBLIGATIONS" herein. Available Funds of the District As Senior Obligations under the Master Agreement, the Installment Payments are payable from and secured by a pledge of Net Revenues. Should Net Revenues prove insufficient, the Installment Purchase Agreement further provides that the Installment Payments are payable from any other lawfully available funds of the District The primary lawfully available funds of the District are its reserve funds, other than trustee-held amounts required to be in any Obligation Reserve Fund securing certain of the District's Senior Obligations, as described in the Master Agreement. At June 30, 2014, the District's Debt Service Required Reserves totaled $132 million, of which $43.1 million were trustee-held amounts in Obligation Reserve Funds as required under the Master Agreement. See APPENDIX C — "SUMMARY OF PRINCIPAL LEGAL DOCUMENTS — Master Agreement" attached hereto. District reserve funds are maintained in accordance with the District's reserve policy. See "DISTRICT REVENUES — Reserves." Available reserves at June 30, 2013 and June 30, 2014 were approximately 47194378.5 8 $651 million and$_million, respectively. See"DISTRICT REVENUES—Reserves,"= Summary of Operating Data"and'—Projected Operating Data." Net Revenues The District is obligated to make Installment Payments from, among other things, Net Revenues as provided in the Master Agreement, which consist of Revenues remaining after payment of costs paid by the District for maintaining and operating the Wastewater System ("Maintenance and Operation Costs"). Revenues are defined in the Master Agreement to mean, for any period, all income and revenue received by the District during such period from the operation or ownership of the Wastewater System, determined in accordance with generally accepted accounting principles, including all fees and charges received during such period for the services of the Wastewater System, investment income received during such period(but only to the extent that such investment income is generally available to pay costs with respect to the Wastewater System, including Maintenance and Operation Costs), Net Proceeds of business interruption insurance received during such period, ad valorem taxes received during such period,payments under the Agreement Acquiring Ownership Interests,Assigning Rights and Establishing Obligations, entered into on February 13, 1986, and amendment No. 1 thereto dated December 10, 1986 (the "IRWD Agreement'), by and between predecessor County Sanitation District No. 14 of Orange County and the Irvine Ranch Water District (the "IRWD") received during such period and all other money received during such period howsoever derived by the District from the operation or ownership of the Wastewater System or arising from the Wastewater System (including any standby or availability charges), but excluding (a)Capital Facilities Capacity Charges, (b)payments received under Financial Contracts, and (c)refundable deposits made to establish credit and advances or contributions in aid of construction (which, for purposes of the Master Agreement, shall not include payments under the IRWD Agreement); provided, however, that (i)Revenues shall be increased by the amounts, if any, transferred during such period from the Rate Stabilization Account to the Revenue Account and shall be decreased by the amounts, if any, transferred during such period from the Revenue Account to the Rate Stabilization Account, and(ii)Revenues shall include Capital Facilities Capacity Charges collected during such period to the extent that such Capital Facilities Capacity Charges could be properly expended on a Capital Facilities Capacity Charge Eligible Project for which the proceeds of Senior Obligations were used or are available to be used. Any Federal Subsidy payments received by the District will constitute Revenues as defined in the Master Agreement. See"DISTRICT REVENUES—Additional Revenues"herein. The District's obligation to make the Installment Payments from its Net Revenues is on a parity with the District's obligation to make payments with respect to its other outstanding obligations described as Senior Obligations and all Reimbursement Obligations with respect to Senior Obligations, as provided in the Master Agreement. The Installment Purchase Agreement constitutes a Senior Obligation and, as such, is subject to the provisions of the Master Agreement and is afforded all of the advantages, benefits, interests and security afforded Senior Obligations pursuant to the Master Agreement. Pursuant to the Master Agreement, the District pledges all Net Revenues to the payment of the Senior Obligations and Reimbursement Obligations with respect to Senior Obligations, and the Net Revenues will not be used for any other purpose while any of the Senior Obligations or Reimbursement Obligations with respect to Senior Obligations remain unpaid; provided, however, that out of the Net Revenues there may be apportioned such sums for such purposes as are expressly permitted by the Master Agreement. This pledge constitutes a first lien on the Net Revenues for the payment of the Senior Obligations and Reimbursement Obligations with respect to Senior Obligations. The term"Senior Obligations"generally means all revenue bonds or notes(including bond anticipation notes and commercial paper)of the District authorized, issued,executed and delivered under and pursuant to applicable law,the Installment Purchase Agreement, and all other contracts (including financial contracts) or leases of the District authorized and executed by the District under and pursuant to applicable law, including, without limitation, installment, 47194308.5 9 lease or other payments which are, in accordance with the provisions of the Master Agreement, payable from Net Revenues on a parity with the payments under the Master Agreement. The District may at any time incur Subordinate Obligations payable on a subordinate basis to the Installment Payments as provided in the Master Agreement; provided, however, that prior to incurring such Subordinate Obligations, the District shall have determined that the incurrence thereof will not materially adversely affect the District's ability to comply with the requirements of the Master Agreement. The District may at any time incur Reimbursement Obligations with respect to Subordinate Obligations. For a description of the District's Outstanding Senior Obligations and Subordinate Obligations, see "FINANCIAL OBLIGATIONS Existing Indebtedness" herein. There are currently no Subordinate Obligations or Reimbursement Obligations with respect to Subordinate Obligations outstanding. The District may, in connection with the incurrence of Subordinate Obligations, pledge Net Revenues to the payment of Subordinate Obligations and Reimbursement Obligations with respect to Subordinate Obligations; provided, however, that such pledge, and any lien created thereby, shall be junior and subordinate to the pledge of, and lien on,Net Revenues for the payment of Senior Obligations and Reimbursement Obligations with respect to Senior Obligations. Rate Stabilization Account To avoid fluctuations in its fees and charges of the Wastewater System, from time to time the District may deposit in the Rate Stabilization Account from Net Revenues such amounts as the District deems necessary or appropriate. From time to time, the District may also transfer moneys from the Rate Stabilization Account to the Revenue Account to be used by the District, first to pay all Maintenance and Operations Costs as and when the same shall be due and payable. In addition, any such amount transferred from the Rate Stabilization Account to the Revenue Account by the District is included as Revenues for any period,but such transferred amount is excluded from determining Operating Revenues for any period. Revenues will be decreased by the amounts,if any,transferred from the Revenue Account to the Rate Stabilization Account. There are presently no funds in the Rate Stabilization Account. Allocation of Revenues To carry out and effectuate the pledge of Net Revenues under the Master Agreement as described above, the District agrees and covenants that all Operating Revenues received by the District will be deposited when and as received in the Revenue Account. Additionally, amounts may, from time to time as the District deems necessary or appropriate, be transferred from the Rate Stabilization Account and deposited in the Revenue Account,as described above under'—Rate Stabilization Account"above. The District will pay from the Revenue Account all Maintenance and Operations Costs (including amounts reasonably required to be set aside in contingency reserves for Maintenance and Operations Costs, the payment of which is not immediately required)as and when the same shall be due and payable. After having paid, or having made provisions for the payment of, Maintenance and Operations Costs, the District shall set aside and deposit or transfer, as the case may be, from the Revenue Account such amounts at such times as provided in the Master Agreement in the following order of priority: (1) Senior Obligation Payment Account; (2) Senior Obligation Reserve Funds (the Revenue Obligations are not secured by any Reserve Fund); (3) Subordinate Obligation Payment Account; 47194378.5 10 (4) Subordinate Obligation Reserve Funds;and (5) Rate Stabilization Account. Amounts required or permitted to be deposited or transferred as described in items 2, 3, 4 and 5 above, shall not be so deposited or transferred unless the District shall have determined that there will be sufficient Net Revenues available to make the required deposits or transfers on the dates on which such deposits or transfers are required to be made as described above. So long as the District has determined that Net Revenues will be sufficient to make all of the deposits or transfers required to be made pursuant to items 1, 2, 3, 4 and 5 above, on the dates on which such deposits or transfers are required to be made, Net Revenues on deposit in the Revenue Account may from time to time be used for any purpose for which the District funds may be legally applied. For additional information, see APPENDIX C — "SUMMARY OF PRINCIPAL LEGAL DOCUMENTS Master Agreement." Rate Covenant Pursuant to the Master Agreement, the District will,to the extent permitted by law, fix, prescribe and collect fees and charges for the services of the Wastewater System which will be at least sufficient to yield during each Fiscal Yen(a)Net Revenues equal to 125%of Debt Service on Senior Obligations for such Fiscal Year and (b)Net Operating Revenues equal to 100% of Debt Service on all Obligations for such Fiscal Year. The District may make adjustments from time to time in such fees and charges and may make such classification thereof as it deems necessary, but will not reduce the fees and charges then in effect unless the Revenues and Net Revenues from such reduced fees and charges will at all times be sufficient to meet the requirements of the Master Agreement. In addition, the District has covenanted in the Master Agreement to prepare and adopt an annual budget for the Wastewater System for each Fiscal Year. Such budget will set forth in reasonable detail the Revenues anticipated to be derived in such Fiscal Year and the expenditures anticipated to be paid or provided for therefrom in such Fiscal Year, including, without limitation, the amounts required to pay or provide for the payment of the Obligations during such Fiscal Year, the amounts required to pay or provide for the payment of Maintenance and Operations Costs during such Fiscal Year and the amounts required to pay or provide for the payment of all other claims or obligations required to be paid from Revenues in such Fiscal Year, and will show that Revenues and Net Revenues will be at least sufficient to satisfy the requirements of the Master Agreement. On or before September 1 of each Fiscal Year, the District will file with the Trustee a copy of the adopted budget for such Fiscal Year See APPENDIX C — "SUMMARY OF PRINCIPAL LEGAL DOCUMENTS — Master Agreement' for additional information. The District has an established reserve policy with eight separate reserve fund categories. Over the next ten years,the year ending reserve total for each year is projected not to fall below$500 million as indicated in the District's ten-year cash flow forecast for Fiscal Years 2014-15 through 2023-24. At its election,the District may use unrestricted reserves to help satisfy the rate covenant described above. See "DISTRICT REVENUES Reserves"herein. Limitations on Issuance of Additional Obligations Senior Obligation& The District may at any time incur Senior Obligations in addition to the Existing Senior Obligations payable from Net Revenues as provided in the Master Agreement on a parity with all other Senior Obligations theretofore incurred but only subject to the following conditions under the Master Agreement: 47194308.5 11 (1) Upon the incurrence of such Senior Obligations, no Event of Default will be continuing under the Master Agreement;and (2) Subject to the provisions of the Master Agreement, the District will have received either one of the following: (1) A Written Certificate of the District certifying that, for a 12 consecutive calendar month period during the 24 consecutive calendar month period ending in the calendar month prior to the incurrence of such Senior Obligations (which 12 consecutive calendar month period will be specified in such certificate or certificates): (A) Net Revenues,as shown by the books of the District,will have amounted to at least 125% of Maximum Annual Debt Service on all Senior Obligations to be outstanding immediately after the incurrence of such Senior Obligations,and (B) Net Operating Revenues,as shown by the books of the District,will have amounted to at least 100% of Maximum Annual Debt Service on all Obligations to be outstanding immediately after the incurrence of such Senior Obligations. For purposes of demonstrating compliance with the foregoing,Net Revenues and Net Operating Revenues may be adjusted for(x)any changes in fees and charges for the services of the Wastewater System which have been adopted and are in effect on the date such Senior Obligations are incurred, but which, during all or any part of such 12 consecutive calendar month period, were not in effect, (y)customers added to the Wastewater System subsequent to such 12 consecutive calendar month period but prior to the date such Senior Obligations are incurred, and (z) the estimated change in available Net Revenues and Net Operating Revenues which will result from the connection of existing residences or businesses to the Wastewater System within one year following completion of any project to be funded or any system to be acquired from the proceeds of such Senior Obligations;or (ii) A certificate or certificates from one or more Consultants which, when taken together, project that, for each of the two Fiscal Years next succeeding the incurrence of such Senior Obligations: (A) Net Revenues will amount to at least 125% of Maximum Annual Debt Service on all Senior Obligations to be outstanding immediately after the incurrence of such Senior Obligations,and (B) Net Operating Revenues will amount to at least 100% of Maximum Annual Debt Service on all Obligations to be outstanding immediately after the incurrence of such Senior Obligations. For purposes of demonstrating compliance with the foregoing,Net Revenues and Net Operating Revenues may be adjusted for(x) any changes in fees and charges for the services of the Wastewater System which have been adopted and are in effect on the date such Senior Obligations are incurred or will go into effect prior to the end of such two Fiscal Year period, (y) customers expected to be added to 47194308.5 12 the Wastewater System prior to the end of such two Fiscal Year period, and (z) the estimated change in available Net Revenues and Net Operating Revenues which will result from the connection of existing residences or businesses to the Wastewater System within one year following completion of any project to be funded or any system to be acquired from the proceeds of such Senior Obligations. For purposes of preparing the certificate or certificates described above,the Consultant may rely upon financial statements prepared by the District that have not been subject to audit by an independent certified public accountant if audited financial statements for the period are not available. See, also "FINANCIAL OBLIGATIONS — Existing Indebtedness" herein. The District is not required to comply with the provisions described above in paragraph (2) if the Senior Obligations being incurred are Short-Terre Obligations excluded from the calculation of Assumed Debt Service pursuant to clause (H) of the definition thereof. See APPENDIX C — "SUMMARY OF PRINCIPAL LEGAL DOCUMENTS Definitions"herein. The determination of Net Revenues for use in the calculation described above is more fully described in APPENDIX C — "SUMMARY OF PRINCIPAL LEGAL DOCUMENTS — Master Agreement Senior Obligations" attached hereto. The District is not required to comply with the provisions described in paragraph (2) above for such portion of Senior Obligations incurred for the purpose of providing funds to refund or refinance Senior Obligations if (i)upon such refunding or refinancing, debt service on such refunded or refinanced Obligations, or debt service on bonds, notes or other obligations of an entity other than the District,the debt service on which is payable from Obligation Payments for such Obligations (the "Related Bonds"), will no longer be included in the calculation of Assumed Debt Service either because such Obligations, or the Related Bonds of such Obligations, will have been paid in full or because such debt service is disregarded pursuant to clause (L) of the definition of Assumed Debt Service, and (ii)Assumed Debt Service in each Fiscal Year for the portion of such Senior Obligations incurred for the purpose of providing funds to refund or refinance such Obligations is less than or equal to 105% of Assumed Debt Service in such Fiscal Year for such Obligations being refunded or refinanced (assuming for such purposes that debt service on such refunded or refinanced Obligations, or debt service on the Related Bonds of such Obligations, is not disregarded pursuant to clause (L) of the definition of Assumed Debt Service). See APPENDIX C — "SUMMARY OF PRINCIPAL LEGAL DOCUMENTS—Master Agreement'attached hereto for additional information. The District may at any time incur Reimbursement Obligations with respect to Senior Obligations. Subordinate Obligations. The District may at any time incur Subordinate Obligations upon satisfaction of the conditions provided in the Master Agreement. See APPENDIX C "SUMMARY OF PRINCIPAL LEGAL DOCUMENTS—Master Agreement'herein for a description of such conditions. There are currently no Subordinate Obligations outstanding. Insurance The District will procure and maintain or cause to be procured and maintained casualty insurance on the Wastewater System with responsible insurers, or provide self- insurance (which may be provided in the form of risk-sharing pools), in such amounts and against such risks (including accident to or destruction of the Wastewater System) as are usually covered in connection with facilities similar to the Wastewater System. The District will procure and maintain such other insurance which it will deem advisable or necessary to protect its interests and the interests of the Corporation. See "THE DISTRICT 47194308.5 13 —Risk Management" and APPENDIX C—"SUMMARY OF PRINCIPAL LEGAL DOCUMENTS— Master Agreement'herein. Allocation of Installment Payments Set forth in Table I are the principal and interest payments on the Revenue Obligations. Also set forth are the payments due on Existing Senior Obligations,including the Refunded Certificates. Table 1 Payments Relating to the Revenue Obligations and Existing Senior Obligations of the District Fiscal Year Installment Payments Other Ending Relating to Revenue Obligations Senior Obligations1111t1 June 30 Principal Interest Principal Interest Total 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 Total The District nds to refinance its Reveane Refunding Certificate Anticipation Notes,Series 2014B("2014B Certificates') on or before their maturity on November 15,2016. Assumes principal is amortized from 2022 through 2036 and an interest rate of 3%per annum.See"FINANCIAL OBLIGATIONS—Recent and Anticipated Financings"herein. a) Includes payments with respect to the Refunded Certificates,a portion of which are to be refunded with the proceeds of the Revenue Obligations, See"REFUNDING PLAN"herein. 47194378.5 14 THE DISTRICT Background The Orange County Sanitation District is a public agency responsible for regional wastewater collection, treatment and disposal. The District is the sixth largest wastewater discharger in the United States. The District provides service to an area with a population of approximately 2.5 million people in the northern and central portion of the County by treating an average of 198 mg/d of wastewater in Fiscal Year 2013-14. The District serves approximately 81% of the County population in approximately 479 square miles,or approximately 60%of the County's area. The service area which comprises the District was originally formed in 1954 pursuant to the County Sanitation District Act, as amended, Section 4700 et seq. of the Health and Safety Code of the State. The District's service area originally consisted of seven independent special districts in the County which were each responsible for matters relating to their individual districts. These special districts were jointly responsible for the treatment and disposal facilities which they each used. The seven independent districts were successors to the Joint Outfall Sewer Organization, which was formed in 1923 among the Cities of Anaheim, Santa Ana, Fullerton, and Orange, and the sanitary districts of Placentia, Buena Park, La Habra, and Garden Grove. The Joint Outfall Sewer Organization constructed a treatment plant and outfall in the early 1920s to serve its members. It was reorganized in 1947 and 1948 into seven county sanitation districts — District Nos. 1, 2, 3, 5, 6, 7 and 11. These prior districts were formed based on engineers' analyses of the gravity flows in the service area. District No. 13 was formed in 1985 and District No. 14 was added in 1986. These districts were co-participants in a Joint Agreement which provided for the joint construction,ownership,and operation of the prior districts'joint facilities. In April 1998, at the request of the Board of Directors of the District (the`Board of Directors"), the Board of Supervisors of the County of Orange (the "County Board") passed Resolution No. 98-140 approving the consolidation of the then existing nine special districts into a new, single sanitation district, to be known as the Orange County Sanitation District. This action was designed to simplify governance structures, reduce the size of the Board of Directors, ease administrative processes, streamline decision- making and consolidate accounting and auditing processes. The consolidation was effective on July 1, 1998. Pursuant to the Resolution and Government Code Section 57500, the prior districts transferred and assigned all of their powers, rights, duties, obligations, functions and properties to the District, and the District assumed all obligations of the prior districts which were several and not joint including, without limitation, their obligations to repay the then outstanding certificates of participation. The boundaries of the nine predecessor special districts were initially used by the District to delineate separate revenue areas (the"Revenue Areas") for budgeting and accounting purposes and in order to facilitate the imposition of fees and charges imposed by the District. See "DISTRICT REVENUES — Sewer Service Charges"herein. The District is managed by the Board of Directors, whose members are appointed by 25 member cities and agencies which are serviced by the District. The District is responsible for construction and maintenance of a major portion of the wastewater collection, treatment and disposal facilities within its boundaries. Revenue Area No. 7 is responsible for approximately 170 miles of local sewers in its service area, whereas local sanitary districts, water districts and cities are responsible for local sewers in the remainder of the District's service area. 47194378.5 15 Organization and Administration The District is independent of and overlaps other political jurisdictions. There are many governmental entities, including the County,that operate within the District's jurisdiction. These entities are exclusively responsible for the administration of their own fiscal affairs,and the District is not entitled to operating surpluses of,or responsible for operating deficits of,any of the other entities. The 25-member Board of Directors is composed of representatives from 21 cities, unincorporated areas of the County and three special districts, including mayors of cities, members of city councils, directors of independent special districts and one member from the County Board. Several board committees, made up of members of the Board of Directors, consider topics for action by the Board of Directors and make recommendations to the Board of Directors. The Chair and the Vice Chair of the Board of Directors are elected every yew by a majority of the Board of Directors, and serve at the pleasure of the majority of the Board of Directors. The District has a general manager, outside general counsel, and administrative and operating staff, with offices located at Reclamation Plant No. 1 in Fountain Valley, California. The District currently employs an administrative and operating staff of approximately 600 under the direction of its General Manager,James Heiberg. James Herberg, P.E. is the General Manager of the District and has served in this capacity since April 2013. During his 20 years with the District,he has held the positions of Assistant General Manager, Director of Engineering, and Director of Operations and Maintenance. Mr. Herberg has more than 27 years of experience in the water and wastewater industries, including six years at the Orange County Water District with whom the District has partnered on the Groundwater Replenishment System project. Robert P. Ghirelb, D.Env. is the Assistant General Manager of the District, and has served in that capacity since July 2006. Dr. Ghirelli previously served as Director of Technical Services for the District since his joining the District in 1998. Prior to joining the District,Dr. Ghirelli served for just over a year as managing principal of the Los Angeles office of a national environmental consulting firm, and served 20 years in supervisory positions with the State Water Resources Control Board and Regional Water Quality Control Boards, including 13 years serving as Executive Officer of the California Regional Water Quality Control Board,Los AngelesiVentura Region. Lorenzo Tyner is the District's Director of Finance and Administrative Services. In September 2005, Mr. Tyner joined the District with more than 20 years of public finance and budgeting experience, most recently serving as the Los Angeles Unified School District Budget Director and Deputy Chief Financial Officer. Mr. Tyner previously worked in large government organizations including the City of Los Angeles and the Los Angeles County Metropolitan Transportation Authority and with private sector companies IBM Global Services and TRW Space and Defense. Ed Torres is the District's Director of Operations and Maintenance for the District. He has served the District since 1991. Prior to joining the District, Mr. Torres served in a professional capacity for the California State University System and TRW Electronics and Defense Sector. Mr. Torres has more than 25 years of public and private sector experience in protecting public health and the environment. Nick Arhontes, P.E. is the District's Director of Facilities Support Services and has served the District since 1988. Mr. Arhontes has more than 30 yens of experience managing various engineered systems in the private and public sectors regionally,nationally,and internationally. 47194378.5 16 Robert Thompson, P.E. is the District's Director of Engineering. He has worked for the district since 1995. Mr. Thompson has served has served as manager in several departments with OCSD, including Information Technology, Operations and Maintenance,and Engineering. He has had a lead role in creating and maintaining engineering,programming,tagging and asset standards for the District. Jeff Reed is the District's Director of Human Resources. He has worked for the District since 1987. Mr. Reed serves as the District's Employee Relations Officer, administering to employer-employee relations between the District and its local public employee organizations. In addition to human resources,Mr.Reed has served the District in leadership roles in both safety and operations. Services The District owns and operates regional wastewater collection, treatment, and disposal facilities for the metropolitan area in the northern and central portion of the County. The District receives wastewater from the collection systems of the cities, sanitary districts and unincorporated areas of the County located within the District. See"THE DISTRICT—Service Areas"herein. Generally, local agency systems collect wastewater from residential and industrial customers and convey the wastewater to District trunk sewer pipelines for conveyance to the District's wastewater treatment plants. The District's staff is responsible for operating and maintaining the District's infrastructure, although some work is performed by external contractors. Currently, the District has established supply contracts for all chemicals necessary to the operation and maintenance of the facilities of the District. The District has sufficient standby systems in the event of equipment failures or system outages. Service Area The map on the inside cover of this Official Statement shows the District's boundaries and selected cities located within the District. District boundaries were originally established in 1947 and 1948 based on drainage basins. As the existing cities have grown and new areas have incorporated, city limits have come to overlap District boundaries. The District currently serves an approximately 479 square-mile area including 23 of the County's 34 cities and various unincorporated areas of the County. The District serves a population of approximately 2.5 million residents. 47194378.5 17 Set forth in Table 2 below is the estimated populations of cities and unincorporated areas served by the District as of January 1,2014. Table 2 Estimated Populations of Cities and Unincorporated Areas Served by the Orange County Sanitation District As of January 1,2014 CRY Population Anaheim 348,305 Brea 42,397 Buena Park 82,344 Costa Mesa 111,846 Cypress 48,886 Fountain Valley 56,702 Fullerton 140,131 Garden Grove 173,953 Huntington Beach 195,999 Irvine 242,651 La Habra 61,717 La Palma 15,896 Los Alamitos 11,729 Newport Beach 86,874 Orange 139,279 Placentia 52,094 Santa Ana 331,953 Seal Beach 24,591 Stanton 38,963 Tustin 78,360 Villa Park 5,935 Westminster 91,652 Yorba Linda 67.069 Cities Subtotal 2,449,326 Unincorporated Areas(estimated)(z) 72,095 Total 2 521 421 Demogr�i Research esea ch Rp h Unit,State of Califomia Department of Finance. o) Center for Demographic Research,Califomia State University,Fullerton. Employees As of June 30, 2014, the District had a total of 584 employees. The majority of District employees are represented by recognized employee organizations, which include the following: the Orange County Employees Association("OCEA"),representing administrative/clerical,technical services and engineering employees since 1979, the International Union of Operating Engineers — Local 501 ("Local 501"), representing operations and maintenance employees since October 1985, and the Supervisory and Professional Management Group ("SPMT"), representing employees within the Supervisor Group and Professional Group since 1991. The total number of represented employees as of June 30, 2014 was 545, and is broken down as follows: 99 employees represented by OCEA, 196 employees represented by Local 501, and 250 employees represented by the SPMT. The contractual agreements between District and the Supervisor Group and Professional Group were renegotiated in 2010 47194378.5 18 and expired on June 30, 2013. The District is continuing to bargain with the Supervisor Group and Professional Group to reach agreement. The contractual agreements between OCEA and District and the Local 501 and District were renegotiated in 2011 and expired on June 30,2014. The terms of the existing contractual agreements will continue until renegotiation of the arrangements between the District and OCEA and Local 501,respectively, are completed. Historically, the District has experienced positive and collaborative working relationships with each organization and has not endured any work stoppages since the early 1980s. Retirement Plan The District participates in the Orange County Employees Retirement System ("OCERS'), a cost-sharing multiple-employer defined benefit pension plan, which is governed and administered by a nine-member Board of Retirement. OCERS was established in 1945 under the provisions of the County Employees Retirement Law of 1937,and provides members with retirement,death,disability,and cost of- living benefits. All full-time and part-time District employees participate in OCERS. Contributions are based on an OCERS actuarial-determined rate structure and age at time of employment; contributions are deducted on a pre-tax basis. Most employees do not pay into Social Security with the exception of 1.45% of gross income, which is paid into the Medicare portion of Social Security. The amount of the retirement allowance is based upon the member's age at retirement,the member's"final compensation"as defined in Section 31462 of the Retirement Law of 1937, the total years of service under OCERS, and the employee's classification as a Plan B, G, H, or U member. Plan U applies to all full-time and part-time employees hired on or after January 1, 2013. Plan B applies to supervisor and professional employees hired on or after October 1, 2010, Local 501 employees hired on or after July 1, 2011 and OCEA employees hired on or after August 1, 2011. Plan G applies to employees hired before September 21, 1979. Plan H applies to employees hired on or after September 21, 1979 and prior to the eligibility dates for Plan B or Plan U. Plan G and H provide 2.5% of final compensation per year of service at age 55. Plan B provides 1.667% of final compensation per year of service at age 57.5, and Plan U provides 2%at 62. "Final compensation"is the highest consecutive 12 months of compensation for Plan G members and the highest consecutive 36 months of compensation divided by three for Plan B, H, and U members. Benefits fully vest under the OCERS retirement plan upon reaching five years of service. Employees who retire at or after age 50 with ten or more years of service are eligible to receive an annual retirement allowance,but at a reduced benefit for those employees retiring prior to age 62 for Plan U members, 57.5 for Plan B members, or prior to age 55 for Plan G and H members. OCERS also provides death and disability benefits. As a condition of participation under the provisions of the County Employees Retirement Law of 1937, members are required to contribute a percentage of their annual compensation to OCERS. The District contributes a percentage of covered employees' base salary towards the employee's contribution to OCERS for members of Plans G and H. Members of Plans U and B do not receive any contributions toward employee's contribution to OCERS. 47194378.5 19 Set forth in Table 3 below is a current comparison of the District's contributions to OCERS for Fiscal Years 2009-10 through 2013-14 and projected contributions for Fiscal Year 2014-15. Table 3 Orange County Sanitation District Comparison of District Contributions to OCERS for Fiscal Years 2009-10 through 2013-14 and Projected Contributions for Fiscal Year 2014-15 District Fiscal Year RateM Contributions 2009-10 21.50% $13,029,795 2010-11 24.04 14,370,158 2011-12 26.10 15,767,050 2012-13 27.35 16,363,917 2013-14 31.87 18,920,212 2014-15t�1 Requi�on as a percent of covered payroll. Includes amortization of Unfunded Actuarial Accrued Liability.Combined one for all Plans. (�) Projected. Source: Orange County Sanitation District. For Fiscal Years 2008-09 through 2013-14, the District's required contribution was equal to the contribution that the District actually made. As noted, the required contribution set forth above includes amortization of Unfunded Actuarial Accrued Liability ("UAAL"). For the Fiscal Year ended June 30, 2014, total payroll costs of employees covered by OCERS was $59,360,635. As of the December 31, 2012 valuation, OCERS has an aggregate UAAL ratio of 62.52%, for a total UAAL on an actuarial basis of$5.68 billion. The District's retirement program includes Additional Retiree Benefit Account ("ARBA') benefits. ARBA benefits provide a monthly payment to retirees towards the premium costs of health insurance for the retiree and eligible dependents. The retiree is not required to use this amount for health insurance premium or to remain on the OCERS medical plan. Benefits vest upon retirement. The District pays 100%of the cost for the ARBA plan and utilizes a pay-as-you-go method for funding the plan. The District paid $367,210 in ARBA benefits during Fiscal Year 2013-14. Effective August 1, 2011, ARBA benefits are no longer available to new OCEA Group employees of the District. For more information regarding OCERS and the District's retirement plan as of June 30, 2014, see Note 5 and 6 to the Comprehensive Annual Financial Report of the Orange County Sanitation District for Fiscal Year Ended June 30, 2014 set forth in Appendix A. The Comprehensive Annual Financial Reports of the Orange County Employees Retirement System are available on the OCERS website at http://www.ocers.org. The information on such website is not incorporated herein by such reference or otherwise. The District cannot predict whether the OCERS investment portfolio will experience additional losses in the future; however, any future losses could result in material increases in the District's required contributions. 47194378.5 20 Other Post-Employment Benefits In June 2004, Governmental Accounting Standards Board ("GASB") issued Statement No. 45, which requires state and local governmental employers to fund the actuarially determined annual required contribution("ARC")for its post-employment benefits other than pension benefits (known as other post- employment benefits or"OPEB") or record the entire amount of the unfunded liability of its OPEB in its financial statements. OPEB includes healthcare and life insurance expenses and related liabilities, and an annual required contribution to fund such liabilities. The District adopted Statement No. 45 for the fiscal year beginning July 1, 2007, as required of a GASB "Phase 1 Agency." According to the District's actuary, Demsey Filliger Associates (the "Actuary"), the unfunded OPEB liability as of July 1, 2013 is approximately $11.6 million. The ARC was determined to be $755,078 for the three years beginning with Fiscal Year 2013-14, the period covered by the last actuarial valuation. Calculation of the ARC is based on the present value of benefits seeming in the current year,a 30-year amortization of the unfunded OPEB liability and an assumed rate of return on investments in the retiree fund of 4% per arum. The District does not believe that its OPEB liability will have a material impact on its operational results. Risk Management As of the date hereof, the District has in force basic all risk property and casualty insurance, including theft, fire, flood,terrorism and boiler and machinery losses at its plants and pump stations. The District is self-insured for portions of workers' compensation,property damage and general liability. The self-insurance portion of workers' compensation is $750,000 per person per occurrence with outside excess insurance coverage to the statutory limit. The self-insured portion for property damage covering fire and other disasters is $250,000 per occurrence with outside excess insurance coverage to $1 billion. The self-insured portion for property damage covering flood is $100,000 per occurrence with outside excess insurance coverage to $300 million. The District also maintains outside comprehensive boiler and machinery insurance, including business interruption insurance, with a $100 million limit with deductibles ranging from$25,000 to$350,000. The District is self-insured for general liability coverage up to $500,000 per occurrence, with excess general liability coverage up to $40 million. In addition, the District relies on a combination of self-insurance and District reserves for all property damage from the perils of seismic activity as well as the expectation that some disaster relief funds may be available from the Federal Emergency Management Agency ("FEMA") to address any resulting damage. See "DISTRICT REVENUES —Reserves" and "— Integrated Emergency Response Program." There is no assurance that, in the event of a significant seismic event, a combination of self-insurance, District reserves or FEMA assistance would be available or sufficient for the repair or replacement of the affected property. During the past five fiscal years there have been no settlements in excess of covered amounts. Claims against the District are processed by outside claim administrators. The District believes that there are no unrecorded claims as of June 30, 2014 that would materially affect the financial position of the District. For more information regarding the District's insurance coverage as of Jane 30, 2014, see Note 1 to the Comprehensive Annual Financial Report of the Orange County Sanitation District for Fiscal Year Ended Jane 30,2014 set forth in Appendix A. Existing Facilities The Wastewater System presently consists of two wastewater treatment plants, an influent metering and diversion structure, 15 off-plant pump stations,various interplant pipelines and connections, 47194378.5 21 and the ocean outfall facilities. The District's Wastewater System includes approximately 403 miles of sewers within 11 trunk sewer systems, 170 miles of local sewers located within a portion of Revenue Area No. 7, two treatment plants, two discharge outfalls and two emergency weir outlets. The existing treatment plants have a rated primary treatment capacity of 372 mg/d,including standby capacity. Treatment Plant No. 1 ("Plant No. 1")is located in the City of Fountain Valley, about four miles from the coast, adjacent to the Santa Ana River. Secondary treatment capabilities are provided by a trickling filter plant and two conventional air activated sludge plants. Up to 105 mg/d of secondary treated effluent is conveyed to an Orange County Water District (the "OCWD") plant for tertiary treatment prior to reclamation and groundwater recharge. See "Groundwater Replenishment System" below. Treatment Plant No. 2 ("Plant No.2")is located in the City of Huntington Beach, 1,500 feet from the ocean, at the mouth of the Santa Ana River. Secondary treatment capabilities are provided by a Pure Oxygen Activated Sludge plant and a Solids Contact Trickling Filter plant. The District employs several phases in the treatment of wastewater. The first phase, preliminary treatment,removes debris such as eggshells, sand and other non-biodegradable items. See also`Preferred Level of Treatment" and `Biosolids Management" below. In the next phase, primary treatment, wastewater is pumped to large settling basins. The liquids are separated from the remaining solids which settle or float as the wastewater passes through large settling basins called clarifiers. The settled solids are sent to solids treatment facilities. All of the wastewater received by the District is sent to secondary treatment for further processing. During secondary treatment, the wastewater is treated with naturally occurring bacteria to remove most of the remaining dissolved and suspended microscopic organic solids. The treated wastewater from both plants is mixed together at Plant No. 2,where it is then pumped through the ocean outfall pipe that extends five miles offshore. Set forth in Table 4 below are the treatment plants' approximate treatment capacities. Table 4 Wastewater System Treatment Capacities (mWd) 2013-14 Primary Secondary Actual Flows Treatment Capacity Treatment Capacity Plant No. 1 96 204 182 Plant No. 2 102 168 150 Aggregate Treatment 198 372 332 Source: Orange County Sanitation District. The District also has the capability to divert a portion of the influent flow from Plant No. 1 to Plant No. 2 through interplant connections. A portion of the flow destined for Plant No. 2 can also be diverted to Plant No. 1. Another interplant facility allows gas generated during solids treatment to be transported between Plant No. 1 and Plant No. 2 and allows digester gas (which is used as fuel for many of the facilities' engines)from one plant to be used at the other to balance the supply and demand, which results in efficient gas utilization. 47194378.5 22 Permits,Licenses and Other Regulations The District is subject to laws, rules and permits issued by federal, state, regional and local regulatory bodies. The Wastewater System is subject to regulations imposed by the 1972 Clean Water Act, Public Law 92-500 (the "Clean Water Act"), the California Environmental Quality Act of 1970, as amended ("CEQA") and the Federal Clean Air Act. The regulatory requirements are primarily administered by the United States Environmental Protection Agency (the "EPA"), the California Air Resources Board, the Santa Ana Regional Water Quality Control Board ("RWQCB"), and the South Coast Air Quality Management District ("AQMD"). Regulations of these agencies deal primarily with the quality of effluent which may be discharged from the treatment plants and air quality emissions. The Clean Water Act directs the EPA to monitor and to regulate the discharge of pollution into navigable waterways and to enforce the requirements that all wastewater treatment plants in the nation provide full secondary treatment for sewage. In 1977, Congress amended the Clean Water Act to allow waivers of secondary treatment standards for certain ocean dischargers if they can demonstrate,to the satisfaction of the EPA that significant adverse environmental impacts would not occur. The District currently has all applicable permits and licenses necessary to operate its facilities. The District has discharged treated wastewater into the Pacific Ocean under a permit issued by the EPA and the RWQCB. The discharge permit included a waiver under the 301(h) provisions of the Clean Water Act, allowing for less than full secondary treatment based on an ocean discharge of sufficient depth, distance and dilution. The permit was initially issued in 1985 and was the first modified Section 301(h)permit issued to a major wastewater treatment facility. The permit was re-issued on May 6, 1998 and expired on June 8,2003. On July 17,2002,the Board of Directors adopted Resolution No. OCSD 02-14, "Establishing the Policy for Level of Treatment of Wastewater Discharged into the Ocean." This resolution established the District's policy to treat all wastewater discharges into the ocean to secondary treatment standards thereby providing for continued public safety, marine ecosystem protection, and water reclamation opportunities. To implement this policy, District staff was directed to immediately proceed with the planning, design, and implementation of treatment methods that will allow the District to meet Clean Water Act secondary treatment standards with the expressed purposes of eliminating the need for the permit waiver received under Section 301(h). The District completed these improvements on time by December 2012 at a total capital improvement cost of$537.8 million. Following the determination by the Board of Directors on July 2002 to implement full secondary standards, staff prepared the Secondary Treatment National Pollutant Discharge Elimination System ("NPDES") Permit Application that was required to be submitted to the regional office of the EPA and the RWQCB in December 2002. The NPDES Permit is separate and apart from the permit waiver received under Section 301(h), and once awarded would negate the need for a waiver. Achieving secondary treatment standards was originally projected to take nine years to complete, with completion expected in December 2012. Because ocean discharge permits are issued for only five years, and the EPA has no authority to waive the discharge limit requirements or grant a longer permit (except in accordance with Section 301(h)), the District decided to voluntarily seek a consent decree concurrently with the issuance of the new ocean discharge permit. This negotiated cement decree (the "Consent Decree") approves the schedule and decrees that no penalties will be imposed for discharges that exceed the secondary treatment limits during the period of construction. The Consent Decree was signed by the District, the EPA and the RWQCB and filed with the U.S. District Court on November 15, 2004. The District is in compliance with the Consent Decree, having completed all of the improvements on time by the deadline of December 2012. 47194378.5 23 The District is also subject to the requirements of the Federal Clean Air Act which mandates attainment with national ambient air quality standards for criteria pollutants (ozone, particulate matter, carbon monoxide,lead,nitrogen dioxide,and sulfur dioxide). Criteria air pollutants cause adverse effects on human health and environment. AQMD is the local air pollution control agency charged with implementing the Federal Clean Air Act. In addition to criteria pollutants, AQMD also implements numerous federal and state requirements related to the toxic air pollutants which can cause cancer or other severe localized health effects. The State's Air Toxic Hot Spots Act, for example, requires facilities to conduct health risk assessments and notify the neighboring communities if the health risk exceeds the regulatory thresholds. Pursuant to AQMD's requirements, the District must obtain permits before sewage treatment improvement projects can be constructed and operated. Such permits are project specific and may contain conditions that govern design criteria, operating parameters, and emissions standards. Most of the District's treatment facilities are enclosed in order to capture and treat emissions to meet regulatory emissions standards and to minimize odor impact to the neighboring communities. The District's treatment plants are also subject to the requirements of Title V of the Federal Clean Air Act amendments. The Title V permit is a single air quality permit for a facility that consolidates and replaces all of the air permits for individual pieces of equipment previously issued by the local air quality district. The permit contains all of the applicable local, state, and federal requirements, including periodic self-certification of compliance and mandatory self-reporting of permit deviation. All Title V permit related reporting and documents submitted to the AQMD must be signed by the highest District official — in this case the General Manager. The Title V program also demands facilities to organize and conduct extensive training of the staff involved,including the field operation and maintenance staff. Another Title V important feature is a possibility of the public active participation and intervention in the cases of potential emission limits and monitoring violations. The District Title V permits did not receive any negative public responses or comments during the required public review period. The District received initial Title V permits for the treatment plants in January 2009. Title V permits are issued for a five-year period. Title V permits for both plants were issued on April 16,2014. They will expire on April 16,2019. District Planning and Capital Improvement Program In November 2007, the Board of Directors adopted a new comprehensive strategic plan to consider the District's service levels and operational needs for the next five years. The Strategic Plan has been updated annually to continue looking at a five-year horizon(each,a"Five-Year Strategic Plan"). See "THE DISTRICT—Five-Year Strategic Planning." In December 2009, the Board of Directors adopted a Facilities Master Plan (the "Master Plan"). The Master Plan updated the planning processes set forth in the 1989 Master Plan,the 1999 Strategic Plan and the 2002 Interim Strategic Plan Update. The Master Plan also incorporates and implements the levels of services defined by the Board of Directors that are included in the 2009 Five-Year Strategic Plan. The result is a plan that integrates research, facilities planning, water conservation and reclamation, sludge reuse, other wastewater programs and financial planning into a single unified approach. Key components of the Master Plan include updated flow projections and collection system hydraulic modeling. The District expects to satisfy required sewer capacity and rehabilitation improvements for the Wastewater System through its Capital Improvement Program ("CIP"). The District =natty reviews and validates its CIP. The CIP was developed to satisfy anticipated regulatory requirements, increased population, anticipated rehabilitations and replacements, additional treatment requirements, conservation, 47194378.5 24 energy and other resource savings considerations, odor control improvements, and air quality protection needs. Through Fiscal Year 2033-34,the current CIP is scheduled to accomplish: • Major rehabilitation of the existing headworks, primary treatment, secondary treatment, outfall pumping, and solids handling facilities at both treatment plants; • Replace and rehabilitate nine of the District's outlying pumping stations, and 27 trunk sewer improvement projects;and • Reduce fence line odor to levels that minimize odor complaints. The 2014 CIP Validation Study resulted in revisions to the CIP. The CIP currently consists of 115 individual capital projects through Fiscal Yen 2033-34 with remaining outlays of$1.9 billion. Over the next five years, the CIP contemplates average annual capital expenditures of$141.7 million based on the 2014 CIP Validation Study. Implementation of full secondary treatment standards was completed in December,2012. Set forth in Table 5 below is a summary of total estimated capital costs for the CIP for Fiscal Years 2014-15 through 2033-34. Table 5 Capital Improvement Program—Estimated Capital Costs Fiscal Years 2014-15 through 2033-34 Project Cost Collection System Capacity $ 215,855,000 Collection System Repair,Rehabilitation,Replacement 419,878,000 Treatment Plant Capacity 311,193,000 Additional Secondary Treatment 121,784,000 Improved Treatment 147,557,000 Treatment Plant Repair,Rehabilitation, Replacement 663,011,000 Support Facilities 33,096.00 Total Validated Capital Improvement Program 1.912.374.000 Source: 2014-I6 Budget Update,Orange County Sanitation District. The CIP included budgeted expenditures of$169.2 million in Fiscal Year 2014-15. There are currently 37 projects in the construction phase with proposed capital outlay spending in 2014-15. The two most significant projects in the construction phase are the Sludge Dewatering and Odor Control at Plant 1 and the Newport Force Main Rehabilitation with projected Fiscal Year 2014-15 expenditures of$61.1 million and$20.4 million respectively. Groundwater Replenishment System The District has taken a multi-jurisdictional approach to planning for capital facilities because many of the methods for reducing or managing flows involve other jurisdictions. One such project is the Groundwater Replenishment System ("GWRS"). In March 2001, the District entered into an agreement with the OCWD to design and construct Phase I of the GWRS. The capital cost of this Phase was shared equally (50% shares) by each agency. The GWRS is a joint effort by the two agencies to provide reclaimed water for replenishment of the Orange County Groundwater Basin and to augment the seawater intrusion barrier. Phase I of the GWRS became operational in January of 2008. In 2013, GWRS produced approximately 72,000 acre-feet. The Phase II expansion broke ground in January 2012 to add 47194378.5 25 approximately 33,000 acre-feet per year. The District expects the Phase 11 expansion to be completed in the first quarter of 2015. The Phase II expansion and all future phases will be funded solely by OCWD. The District has committed 168,000 acre-feet per year of secondary effluent to these future expanded operations. The District and OCWD amended their 2001 agreement in 2010 to provide OCWD with the first right of refusal of secondary treated water flows from the District's Fountain Valley-based Plant No. 1 for these future phases; however, no capital funding is anticipated or dedicated from the District for these future expansion phases. OCWD and the District have agreed to share equally in the cost of the Joint GWRS Microftltration Backwash Redirection Project which will increase the quantity of water available during the early morning hours when the flows are low. This project will save the District operational costs in the form of reduced primary treatment chemical usage. Preferred Level of Treatment In July 2002, the Board of Directors approved a change from the existing level of treatment, a blend of 50% advanced primary and 50% secondary treated wastewater, to full secondary treatment standards. The District completed all of the necessary expansion projects to support full secondary treatment by December 2012. See "THE DISTRICT — Permits, Licenses and Other Regulations." On July 20, 2012, the District received a new NPDES permit, which reflects the full secondary treatment requirements. The new NPDES permit will expire on July 19,2017. Biosolids Management Through the treatment of wastewater,the District recovers and treats nutrient-rich, organic matter (solids) to produce biosolids. Biosolids can be recycled through composting or fertilizing non-food farm fields(land application)or disposed in a landfill for methane gas recovery. The District's goal is to ensure our biosolids management strategies align with existing market conditions and continue a sustainable, reliable and economical biosolids management program that provides environmentally sound practices and meets the stringent federal, State and local regulatory requirements. The District's biosolids averaged about 765 tons per day("tpd') in Fiscal Year 2013-14, with an average cost per ton of$62.17 in July 2014 for managing at offsite locations, as described in the table below. These biosolids management costs totaled about $17.4 million last fiscal year. Anticipated increases in biosolids production in Fiscal Years 2014-16 increased the budget to about $18.32 million (5.3%). In these fiscal years,the District's biosolids tonnage will peak at about 785 tpd until the following new facilities come online to reduce biosolids costs by about one-third. • Irvine Ranch Water District is constructing solids processing facilities and will stop sending their solids to the District in 2016. • Plant No. 1 centrifuges are currently under construction and anticipated to start creating drier solids and reducing hauling costs by mid-2017. • Plant No. 2 centrifuges will begin operating by early 2019. • In the next few years,the District also will be implementing several significant construction,maintenance and rehabilitation projects affecting the solids treatment portions of both plants.These projects,along with the start-up of the next phase of GWRS(Ground Water Replenishment System),may increase the biosolids hauling budget as the treatment process becomes more complex. 47194378.5 26 Biosolids Management Contracts Current tons Contract per day Average (Minimum tons managed cost per ton Contractor Location Product per day and ter ml (approximate) (July 20141 Synagro Kem County,CA Compost 250 tpd—10 years plus two 250 tpd $75.21 five-year renewals,first renewal 12/27/16 Synagro La Paz County,AZ Compost 0 tpd—10 years plus two 70 tpd $63.03 five-year renewals,first renewal 12/27/16 Tule Ranch Yuma County,AZ Land 0 tpd—5 years plus one 350 tpd $54.66 application five year renewal,renewal I/l/18 Orange Orange County,CA Local 0 tpd—8 years plus one 70 tpd $53.40 County Landfill 10-year renewal,first Waste& renewal 6/30/18 Recycling The District's contractors provide back-up biosolids management capacity in California and Arizona that include compost, land application, lime stabilization before land application and landfill. Together, these options have the additional available capacity to manage more than ten times the District's daily biosolids production to ensure sustainable,consistent,and reliable operations. The District anticipates issuing a request for proposals ("RFP") in 2016 in advance of the Synagro contract renewal. In Fall 2013, the Board of Directors adopted a new Five-Year Strategic Plan that included studying biosolids management options in order to make recommendations for a potentially longer-term management option RFP in 2018. In 2003, the District was the first agency in the nation to be certified by the National Biosolids Partnership for its biosolids program. Certification requires regular third-party audits and a robust internal management system based on the ISO 14001 Environmental Management System standard. The District is committed to a diverse biosolids program to help ensure a sustainable, reliable, and economical program. Urban Runoff Recognizing that County beaches were being affected by pollution carried by urban runoff, the Board of Directors adopted a number of resolutions agreeing to accept dry weather urban runoff into the sewer system. In Jane 2002, Assembly Bill 1892 amended the District's charter to formally allow the diversion and management of dry weather urban runoff flows. Resolution No. 01-07, adopted March 28, 2001, declared that the District will initially waive fees and charges associated with authorized discharges of dry weather urban runoff to the sewer system until the total volume of all runoff discharges exceeds four million gallons per day ("MGD") calculated on a monthly average. For the first 12 years of the Urban Runoff Program,the average monthly flow averages remained less than the 4 MGD threshold thus avoiding user fee costs being assessed to the diversion permittees. In 2012, the District received a number of diversion proposals to deal with bacteria and selenium loading to the upper Newport Bay. The discharge from the additional proposed diversions combined with the existing diversion flows would eventually exceed the four MGD fee threshold. On June 12, 2013, the Board adopted Resolution No. 13 09 expanding the waiver of fees or charges on the treatment of dry weather urban runoff from four MGD to ten MGD. According to the Board, the change was necessary not only to protect the County's coastal resources, but also to provide an economic benefit to the local economy by helping to keep our beaches open. 47194378.5 27 There are currently 19 active urban runoff diversion structures, four owned and operated by the County, 11 owned and operated by the City of Huntington Beach, one owned and operated by the City of Newport Beach, two owned and operated by the IRWD, and one owned and operated by The Irvine Company. The Dry Weather Urban Runoff Program is administered by the Environmental Compliance Division which issues a discharge permit for each of the diversion structures. The permit functions as a control mechanism that specifically prohibits storm runoff and authorizes discharge only during periods of dry weather. The permit also establishes specific discharge limits, constituent monitoring, and flow metering requirements. In addition, the District conducts quarterly sampling and analysis of the urban runoff discharges to ensure discharge limit compliance for the various regulated constituents. Since 1999, the District has treated a total of 7.9 billion gallons of dry-weather urban runoff that would otherwise have been discharged into the ocean with no treatment. From July 1, 2013 through June 30,2014,the daily average urban runoff flow ranged between 0.59 and 1.72 MGD with a cumulative total diversion of 386 million gallons for this period. At the existing operations and maintenance cost of $1,657 per million gallons (2013-14 rate), the District's cost for treating the urban runoff discharge for this period is estimated at$640,360. Due to increasingly strict receiving water quality standards, the District is receiving requests to accept additional urban mnoff discharges. Five additional urban ranoff diversions have been proposed to deal with bacteria and selenium loading to the Newport Back Bay Watershed: Peters Canyon in the City of Irvine, Big Canyon Wash in the City of Newport Beach, and the Delhi, Santa Fe, and Lane flood control channels in the City of Santa Ana. Peters Canyon Wash, which collects selenium from selenium- laden shallow groundwater, is the biggest contributor of selenium in the San Diego Creek watershed in dry weather. The proposed urban runoff flows will result in average monthly flows of 4-6 MUD. Integrated Emergency Response Program In recognition of the potential damage which could occur in the event of a major earthquake, flood, or other disaster, the District implemented an Integrated Emergency Response Program (the "IERP")in 1979.The IERP is a two-volume plan which contains policies,plans and procedures preparing for, and responding to, emergencies. The District also analyzed disaster preparedness issues and policies within the Master Plan, and within a 1994 report titled Fault Rupture Hazard Investigation—Wastewater Treatment Plant No.2(the"1994 Report"). The disaster preparedness plan included in the Master Plan reviewed two possible major earthquake scenarios: an 8.3 Richter magnitude ("M") earthquake on the southern San Andreas fault system and an M 7.0 earthquake on the Newport-Inglewood fault zone,which includes Plant No. 2. An M 8.3 earthquake on the southern San Andreas fault,while on the whole more destructive than the M 7.0 Newport-Inglewood fault, may result in less damage to the District's service area due to the distance of the fault from most of the service area. However, the Master Plan stated that damage from such a major earthquake on the San Andreas fault would be extensive. Also, the Master Plan indicated that an M 7.0 earthquake on the Newport-Inglewood fault within five miles of the District's sewerage facilities could cause major destruction to those facilities. The disaster preparedness plan in the Master Plan indicated that it would not be economically feasible to upgrade all of the existing sanitary sewerage facilities to survive an earthquake of this magnitude along the Newport-Inglewood fault. The IERP outlines the policies and employee actions to be taken before, during and after an earthquake, earthquake response guidelines and damage assessment procedures. The Master Plan analyzed the vulnerability of the sanitary sewerage facilities and operations of the District and planned a risk reduction program wherein the vulnerability of many of the District's sanitary sewerage facilities to an earthquake could be reduced by recommended retrofit construction 47194378.5 28 measures. The Master Plan also recommended that designs of existing major structures which were constructed prior to development of current seismic design standards be reviewed and the structures strengthened,if necessary. Since the Master Plan and the 1994 Report, the District has completed retrofitting where deemed appropriate. Pursuant to the Master Plan, all recent and future projects have been, and will be, designed to the same high earthquake code standards as set for other essential services, such as hospitals and fire stations. Many of the older buildings analyzed in the Master Plan have been replaced by structures built after 1989. The Army Corps of Engineers' "All-River Plan" has mitigated any future flooding of the Santa Ana River system and potential threats to the District's Wastewater System. Also, both Plant No. 1 and Plant No. 2 are built to federal standards. The IERP takes into account the damage potential posed by coastal flooding, tsunamis (large ocean waves generated by seismic activity) and windstorms. No assurance can be given that any such events would not have a material adverse impact on the Wastewater System. The Strategic Plan and IERP makes recommendations regarding fire protection of the Wastewater System. Most of the structures at Plant No. 1 and Plant No. 2 we constructed of fire-resistant materials. The IERP describes the procedures needed to respond to a possible disaster. For more information regarding emergency response policies, the disaster preparedness plan described in the IERP can be reviewed at the District's office. Five-Year Strategic Planning The Strategic Plan envisions an organizational culture that adheres to the District's core values and makes efficient and effective use of all available resources. Over the past six years, the District completed thirty-eight strategic goals and made strides to improve technical operations, biosolids management, odor control,and regulatory compliance. Through a newly developed Vision Statement,the District is committed to focusing efforts on customer service, protecting public health and the environment, fiscal responsibility,communications,partnering with others, and creating the best possible workforce. As a result of two Strategic Planning workshops, individual Board of Director's interviews, employee and management focus groups,the following eight new strategic goals were identified: 1. Odor Control—Completion of the Odor Control Master Plan. 2. Future Biosolids Management Options — Study biosolids management options including third party contracts and onsite capital facilities. 3. Energy Efficiency— Continue to research new energy efficiency and energy conversion technologies. 4. Disinfection of Ocean Discharge — Develop an implementation plan that includes the technical,financial and societal factors associated with cessation of disinfection of the ocean discharge. 5. Local Sewer Transfers—Complete the transfer of 174 miles of local sewers serving parts of the City of Tustin and unincorporated areas north of the City of Tustin and local sewer transfers in the City of Santa Ana. 47194378.5 29 6. Legislative Advocacy and Public Outreach—Develop a unified legislative advocacy and public outreach program. 7. Future Water Recycling — Determine partnerships, needs, strategies, benefits and costs associated with recycling of Plant No. 2 effluent water. 8. Workforce Planning and Workforce Development—This initiative is ongoing and part of a comprehensive workforce planning and development effort to ensure that the District has the right people with the right skills and abilities, in the right place,at the right time. DISTRICT REVENUES Sewer Service Charges General. The District has the power to establish fees and charges for services of the Wastewater System. Such fees and charges are established by the District's Board of Directors and are not subject to review or approval by any other agencies. In Fiscal Year 1997-98, a Rate Advisory Committee (the "RAC") was established comprised of representatives from industrial, commercial and residential users. The goal of the RAC was to examine the then current rate structure and, if needed, develop recommendations for change. The RAC analyzed the District's rate structure to determine whether its then current sewer service user fees (now known as "Sewer Service Charges") were equitable among residential and industrial customers. This review resulted in a proposal to expand the number of non-residential user categories from one to 23 and to provide for gradual rate increases in seven of the nine Revenue Areas. The Sewer Service Charges for those categories were based on the average flow and strength of wastewater discharged for each property type and remain currently in use. The Board of Directors establishes the annual sanitary sewer service charges by ordinance. The sanitary sewer service charge ordinances are adopted by a two-thirds vote of the Board of Directors as required under law after conducting a noticed public hearing in compliance with Proposition 218. See "LIMITATIONS ON TAXES AND REVENUES — Article XIIIC and Article XIIID of the California Constitution." The District collects Sewer Service Charges from property owners through the semi-annual property tax bill distributed by the County throughout the District, except in Revenue Area No. 14. Pursuant to the IRWD Agreement, the District receives quarterly fee payments from the IRWD which directly collects fees from customers through a monthly billing procedure in Revenue Area No. 14. The District currently participates in the County's Teeter Plan under which the District receives annually 100% of the secured property tax levies to which it otherwise is entitled, regardless of whether the County has actually collected the levies. The District has covenanted in the Master Agreement to fix, prescribe and collect fees and charges to satisfy certain coverage requirements as further described under "SECURITY AND SOURCES OF PAYMENT FOR THE REVENUE OBLIGATIONS—Rate Covenant'herein. Residential and Commercial Sewer Service Charges. In May 2002, the Board of Directors adopted District Ordinance No. OCSD 18 (the "2002 Ordinance') which became effective on July 1, 2002. The 2002 Ordinance included a single family residential ("SFR") rate increase, the underlying basis for all sanitary sewer service charges including sanitary sewer rates for multi-family residential units as well as most commercial and industrial properties, of$7.50 per year, or 9.4%,to $87.50 per year. In 47194378.5 30 June 2003, the Board of Directors authorized a Proposition 218 notice on proposed "not to exceed"rate increases for each year over the next five years. Paramour to the 2002 Ordinance, the District established residential Sewer Service Charges, except within Revenue Area No. 14,based on the cost of services and facilities provided to each customer of the District. The noticed public hearing held in connection with the 2002 Ordinance considered increases in the amount of the annual charges of approximately 20%per year for each of the then following five years. In May 2005, the Board of Directors adopted Ordinance No. OCSD-26 increasing the Fiscal Year 2005-06 single family residential rate, the underlying basis for all sewer service charges, by 31%, from $115.00 to $151.00 for all ratepayers, except those located in Revenue Area No. 14. In June 2007,the Board of Directors adopted Ordinance No. OCSD-32 increasing the Fiscal Year 2007-08 single family residential rate by 9.8%. On February 27, 2008, the Board of Directors approved increases in its sanitary sewer service charges for all SFRs and multi-family residential units, and for all commercial properties. The Board of Directors increased the SRF rate, which is the basis for all of the District's sewer service charges, by 10.4%for Fiscal Year 2008-09, 10.0%for Fiscal Year 2009-10, 10.4%for Fiscal Year 2010-11, 9.4% for Fiscal Year 2011-12 and 10.1% for Fiscal Year 2012-13. On March 27, 2013, the Board of Directors adopted Ordinance No. OCSD-41 approving increases in its sanitary sewer service charges for all SRFs, multi-family residential units, and all non-residential properties. The Board increased the SRF rate, which is the basis for all of the District's sewer service charges, by 4.8% for Fiscal Year 2013-14 and thereafter by an average annual increase of 2.4%for each Fiscal Year through Fiscal Year 2017-18. Set forth in Table 6 below is a comparison of the Sewer Service Charge rate for single family residences for the fiscal years shown. Table 6 Annual Sewer Service Charges Single Family Residence Rate Ten Year Rate Schedule Fiscal Years 2008-09 through 2017-18 Fiscal Sewer Service Fiscal Sewer Service Year Charee Year Charee 2008-09 $201 2013-14 $308 2009-10 221 2014-15 316 2010-11 244 2015-16 323 2011-12 267 2016-17 331 2012-13 294 2017-18 339 Source: Orange County Sanitation District Set forth in Table 7 below are the total average annual Sewer Service Charges for SFRs within the District, together with comparable total average annual charges for wastewater service within the jurisdictions of certain other cities and districts within the State as of the dates indicated. The District's approved SFR rate of$316 in Fiscal You 2014-15 remains below the average annual sewer rate of$484 according to a Fiscal Year 2012-13 survey of 759 agencies encompassing all 58 counties in California conducted by the State Water Resources Control Board. 47194378.5 31 Table 7 Comparison of Total Sewer Service Charges For Single Family Residences As of July 1,2013 Average Dry Annual Weather Sewer Flow Service Treatment Collection Property Tax End (me/d)to Charge"' Levelo"' Resuonsibili to Income"' City of San Diego 168 $573 2 Yes No City of Los Angeles 428 435 4 Yes No East Bay MUD 80 358 4 No Yes Sacramento County 140 348 3 No Yes Orange County 221 316 3 No Yes Sanitation District Los Angeles County 497 245 4 No Yes Source: Information obtained from respective entities listed. 17 Treatment Level Categories: "1"—Primary treatment. "2"—Advanced primary or primary with some secondary treatment. "3"—Secondary treatment. "4"—Advanced secondary or secondary with some tertiary treatment. (3) "5"—Tertiary treatment Source: Wastewater User Charge Survey Report by the California State Water Resources Control Board. Industrial Sewer Service Charges. The District charges industrial Sewer Service Charges to customers discharging high-strength or high-volume wastes into the sewer systems. Customers subject to industrial Sewer Service Charges are billed directly by the District. The fee charged to each customer is based on the customer's sewage volume, the concentration of suspended solids and biochemical oxygen demand. Pursuant to the 2002 Ordinance, rates for each component factor were revised for certain industrial users in order to be consistent with the rates charged to residential users. Total industrial Sewer Service Charges in Fiscal Year 2013-14 were approximately $14.4 million. Industrial Sewer Service Charges are applied to both operating and capital funds. The Sewer Service Charge increases described above are necessary to meet the District's cash flow needs arising from the addition of disinfection treatment and other operating requirements. As projected through Fiscal Year 2030-31, the cash flow needs of the CIP total approximately $1.9 billion. Over the next five years the CIP contemplates average annual capital expenditures of$141.7 million. In addition, the CIP contemplates $286 million, or an annual average of$57 million, to finance projects currently unknown or unidentified as forecasted by the District's Asset Management Program(the"Asset Management Program"). 47194378.5 32 Additional Revenues The District has several sources of additional revenue, including property taxes, Capital Facilities Capacity Charges,capacity rights,permit and inspection fees and interest earnings. Property Taxes. The District receives approximately 2.5%of the one percent County ad valorem property tax levy, based on the allocation procedure under State law. Property tax revenues were $64.8 million in Fiscal Year 2009-10, $64.3 million in Fiscal Year 2010-11, $67.9 million in Fiscal Year 2011- 12, $77.3 million in Fiscal Year 2012-13, and are estimated to be 74.0 million in Fiscal Year 2013-14. Because of one-time redevelopment dissolution property tax proceeds received in Fiscal Year 2012-13, the District currently estimates that its property tax receipts will decrease slightly in Fiscal Year 2013-14, but increase by approximately 5.0%each year thereafter through Fiscal Year 2018-19. The apportionment of the ad valorem tax is made pursuant to a revenue program adopted by the District in April 1979 to comply with EPA and RWQCB mandates, legal and contractual requirements and Board of Director's policy. Capital Faclities Capacity Charges. Capital Facilities Capacity Charges (commonly referred to as connection fees) are one-time fees with two components, paid at the time property is developed and connected to the Wastewater System. The fees are imposed by the District pursuant to Section 5471 of the California Health and Safety Code and are levied to pay a portion of the District's capital costs and for access to capacity in the Wastewater System. The District currently has Capital Facilities Capacity Charges of $3,341 per residential unit (three-bedroom); however, under the current industrial use ordinance, additional Capital Facilities Capacity Charges can be imposed on industrial users who place larger than average demand on the Wastewater System. Member cities and sanitary districts collect Capital Facilities Capacity Charges for the District when building permits are issued. Capital Facilities Capacity Charges are reviewed annually to reflect the changes in the value of the Wastewater System to which a new customer is connecting. On December 15, 1999, the Board of Directors approved District Ordinance No. OCSD 99-11 (the"1999 Ordinance")which established a comprehensive Capital Facilities Capacity Charge. The 1999 Ordinance, effective as of January 1, 2000, renamed connection fees as Capital Facilities Capacity Charges and provided a more equitable schedule of fees among industrial, commercial and residential users. Pursuant to the 1999 Ordinance,Capital Facilities Capacity Charges were revised for high demand industrial users in five incremental increases from 1999 through 2001. For a summary of historical and projected revenues derived from Capital Facilities Capacity Charges, see Table 14 and Table 15 below. Pursuant to an agreement with the IRWD, the IRWD is not required to pay Capital Facilities Capacity Charges and, in exchange, the IRWD provides funding to the District for the construction costs of certain wastewater collection, transmission, treatment and disposal facilities to be used by the IRWD and is obligated to make certain payments to the District for certain services arising from the Wastewater System(including any standby or availability charges). Sale of Capacity. The District has entered into agreements with the Santa Ana Watershed Project Authority ("SAWPA") whereby wastewater from Upper Santa Ana River Basin dischargers can be transported through the District's Santa Ana River Interceptor to the District's wastewater treatment facilities. This program was developed in the early 1970s. The agreements establish control mechanisms regarding the quality of wastes deposited into the Wastewater System. At the present time, SAWPA has purchased and paid for 30 mg/d of maximum regulated flow capacity rights in the District's Santa Ana River Interceptor and 17 mg/d of monthly average flow capacity in the District's wastewater treatment plants. Projected revenues from SAWPA range from$4.5 million to$5.3 million over the next five years. 47194378.5 33 Additional treatment plant capacity can be purchased in increments at the District's current replacement cost. Federal Subsidy Payments. In connection with the District's Revenue Obligations,Series 2010A (the "2010A Revenue Obligations") and the District's Revenue Obligations, Series 2010C (the "2010C Revenue Obligations"), issued as "Build America Bonds," the District is scheduled to receive certain federal subsidy payments of approximately $5.1 million annually through 2031 and lesser amounts thereafter until 2044. Subsidy payments with respect to the 2010A Revenue Obligations and the 2010C Revenue Obligations constitute Revenues as defined in the Master Agreement. In its financial reports,the District accounts for subsidy payments received in connection with the 2010A Revenue Obligations and the 2010C Revenue Obligations as a reduction in interest expense with respect to such obligations. For the 2010A Revenue Obligations and the 2010C Revenue Obligations to be and remain Build America Bonds, the District must comply with certain covenants and establish certain facts and expectations with respect to the 2010A Revenue Obligations and the 2010C Revenue Obligations,the use and investment of proceeds thereof and the use of property financed thereby. Thus, it is possible that the District may not receive the federal subsidy payments due to the District's noncompliance. The federal subsidy payments are also subject to offset against amounts that may, for unrelated reasons, be owed by the District to any agency of the United States of America. On March 1, 2013, the federal government announced the implementation of certain automatic spending cuts (mown as the sequester. As a result of the sequester, federal subsidy payments for the 2010A Revenue Obligations were reduced by 8.7% (or$67,874)and by 7.2% (or$67,874) for the federal fiscal years ended September 30, 2013 and September 30, 2014, respectively, and federal subsidy payments for the 2010C Revenue Obligations were reduced by 8.7% (or $152,807) and by 7.2% (or $152,807) for the federal fiscal years ended September 30, 2013 and September 30, 2014, respectively. According to the Internal Revenue Service, subsidy payments will be reduced by 7.3% for the federal fiscal year ending September 30, 2015. The District is obligated to make all payments with respect to the 2010A Revenue Obligations and the 2010C Revenue Obligations, however, from Revenues as defined in the Master Agreement,regardless of whether it receives the full amount of federal subsidy payments. The District cannot predict whether future reductions in federal subsidy payments will occur due to the sequester. However, the District does not believe that any reduction in federal subsidy payments will have a material adverse effect on the District's ability to pay the 2010A Revenue Obligations or the 2010C Revenue Obligations. Wastewater Treatment History The wastewater flows for Fiscal Year 2008-09 through Fiscal Year 2013-14 were 211 mg/d, 196 mg/d, 207 mg/d,201 mg/d, 200 mg/d and 198 mg/d respectively. The highest flow rate experienced was during El Nifio stomt periods. Peak flows of 500 mg/d were recorded in December 1997 and February 1998. There were no sewer failures or overflows during these events. Customers The historical number of customers served by the District for the Fiscal Years 2009-10 through 2013-14 and the projected number of customers served by the District for the Fiscal Years 2014-15 through 2018-19, identified in Equivalent Dwelling Units ("EDUs"), are set forth in Table 8 and Table 9 below. As discussed below, sewer service charges are based on the expected amount of wastewater flow for a single family dwelling. This base amount is considered the "equivalent dwelling unit." Set forth in Table 8 below are the EDUs that equate to total Sewer Service Charge levies,while the EDUs set forth in Table 9 equate to total sewer service charge collections. 47194378.5 34 Table 8 Historical and Projected Equivalent Dwelling Units Fiscal Years 2009-10 through 2018-19 Historical Projected Fiscal Year EDUs([) Fiscal Year EDUs 2009-10 930,164 2014-15 920,506121 2010-11 924,622 2015-16 923,175 2011-12 924,525 2016-17 925,898 2012-13 915,685 2017-18 928,676 2013-14 917,936 2018-19 931,462 With respect Fiscal Years, presentation in the Statistical Section of the District's Comprehensive Annual Financial Report set forth in Appendix A includes EDUs that equate to total Sewer Service Charge collections rather than levies. n) EDUs projected in the proposed two-year budget as of June 2014. Source: Orange County Sanitation District. Set forth in Table 9 below are the number of residential and commercial customers and industrial customers and the approximate percentages of Sewer Service Charge revenues derived from the combined residential and commercial use and industrial use for the last five fiscal years. Table 9 Number of Accounts and Revenues by Customer Class for the Fiscal Years 2009-10 through 2013-14 (S in Millions) Residential/Commercial Industrial Number of Percentage Percentage Equivalent of Sewer of Sewer Single- Service Number of Service Family Total Charge Customer Total Charge Fiscal Year Dwellings Revenue Revenues Accounts Revenue Revenues 2009-10 875,442 $193.5 95% 487 $10.8 5% 2010-11 874,130 213.3 95 479 10.1 5 2011-12 869,709 232.2 96 516 9.5 4 2012-13 879,443 258.6 96 527 10.8 4 2013-14 869,461 267.8 95 489 14.4 5 Source:Orange County Sanitation District. 47194378.5 35 Set forth in Table 10 below are the ten largest principal sewer service customers of the District for the Fiscal Year ended June 30,2014. Table 10 Largest Principal Sewer Service Customers of the District for the Fiscal Year Ended June 30,2014 Sewer Service User Charees House Foods America Corp. $1,096,791 Kimberly-Clark Worldwide, Inc. 1,059,850 Stremicks Heritage Foods,LLC 971,832 MCP Foods,Inc. 898,925 Dean Foods Co. of CA Inc. 585,374 Nor-Cal Beverage Co. Inc. (NCB) 577,261 Jazz Semiconductor 475,299 Ameripec Inc. 420,365 Pepsi-Cola Bottling Group 402,513 Pulmuone Wildwood,Inc. 383,365 Total Source: Orange County Sanitation District. Assessed Valuation The assessed valuation of property in the County is established by the County Assessor, except for public utility property which is assessed by the State Board of Equalization. Due to changes in assessment required under State Constitution Article XIIIA, the County assessment roll no longer purports to be proportional to market value. See "LIMITATIONS ON TAXES AND REVENUES" herein. Generally,property can be reappraised upward to market value only upon a change in ownership or completion of new construction. The assessed value of property that has not incurred a change of ownership or new construction most be adjusted annually to reflect inflation at a rate not to exceed 2% per year based on the State consumer price index. In the event of declining property value caused by substantial damage, destruction, economic or other factors, the assessed value must be reduced temporarily to reflect market value. For the definition of full cash value and more information on property tax limitations and adjustments,see"LIMITATIONS ON TAXES AND REVENUES"herein. The County Assessor determines and enrolls a value for each parcel of taxable real property in the County every year. The value review may result in a reduction in value. Taxpayers in the County also may appeal the determination of the County Assessor with respect to the assessed value of their property. 47194378.5 36 Set forth in Table 11 below is a five-year history of assessed valuations in the District for the fiscal years shown. Table 11 Assessed Valuations of Property in the District Fiscal Years 2010-11 through 2014-15 ($in Billions) Fiscal Year Value Percent Chance 2010-11 $304.3 (0.27%) 2011-12 308.7 1.43 2012-13 316.4 2.48 2013-14 329.3 4.09 2014-15 350.5 6.44 Source: County of Orange Auditor-Controller. Tax Levies and Delinquencies Property taxes are based on assessed valuation which is determined as described under "DISTRICT REVENUES—Assessed Valuation"herein. In accordance with the California Revenue and Taxation Code, the County tax collector collects secured tax levies for each Fiscal Year. Property taxes on the secured roll are due in two installments, on November 1 and February 1. The District currently participates in the County's Teeter Plan under which the District receives annually 100% of the secured property tax levies and Sewer Service Charges to which it otherwise is entitled,regardless of whether the County has actually collected the levies. This alternative method provides for funding each taxing entity included in the Teeter Plan with its total secured property taxes during the year the taxes are levied, including any amount uncollected at fiscal year-end. Under this plan,the District's general fund receives the full amount of seemed property taxes levied each year on its behalf and, for so long as such plan remains in effect, the participating entities, such as the District, no longer experience delinquent taxes. The County's general fund is the designated recipient of future collections of penalties and interest on all delinquent taxes collected on behalf of participants in this alternative method of apportionment. In recent years, the County has experienced delinquencies of Sewer Service Charges in the District of approximately 2.0%. Set forth in Table 12 below is a five-year history of the District's ad valorem total property tax and Sewer Service Charge levies. 47194378.5 37 Table 12 Total Property Tax and Sewer Service Charge Levies in the District for Fiscal Years 2010-11 through 2014-15 (In Thousands) Total Property Tax and Sewer Fiscal Year Service Charge Lew 2010-I1 $292,646 2011-12 314,077 2012-13 340,298 2013-14 356,904 2014-15 363,144 Source: County of Orange Auditor-Controller. Budgetary Process The District's operating fund budget relies on revenues from Sewer Service Charges and property taxes,both of which me collected on the property tax bill, as previously described under the captions'— Sewer Service Charges" and '— Additional Revenues." The District receives tax revenues from the County in eight allocations, with the largest receipts in December and April. The District operates on a Fiscal Year beginning each July 1. The operating fund budgets include funds to cover the dry period of each tax year, i.e.,the period from the beginning of the Fiscal Year until the first taxes are received. The dry-period requirement is budgeted at one-half of the annual operating fund budgeted expenditures. The District uses the accrual method of accounting in its budgets. The District has conformed to its budgets for the last five fiscal years and is conforming to its budget for the current fiscal year. The District's annual budget preparation process begins in January of each year and concludes in June upon its adoption. The General Manager reviews the final operating budgets and then distributes them to the Directors and District Committees for consideration. The Board of Directors then adopts the proposed annual budgets,with any revisions,in June of each year. Budgetary control is exercised at the individual Department level and administrative policies provide guidelines on budget transfers and the authorization necessary to implement transfers. A budget adjustment is a transfer which does not change the total appropriated amount and does not require Board of Directors action. Approval may be granted by the General Manager or the Department Head in certain circumstances. Department Heads have the discretion to reapportion funds between certain line items within a division but may not exceed total appropriated amounts for each department. They may also transfer staff across divisional lines. The General Manager and Board of Directors most approve additional capital outlay items. A budget amendment is an adjustment to the total appropriated amount which was not included in the original budget. These supplemental appropriations require formal action by the Board of Directors. Prior you reserves or fund balances may be appropriated to fund items not previously included in the adopted budget. Reserves or fund balances exceeding minimum amounts required by fiscal policies may be appropriated if it is determined to be in the best interest of the District. Directors may also appropriate reserves in case of emergencies or unusual circumstances. 47194378.5 38 Reserves The District has an established reserve policy with eight separate categories for its reserve funds. Collectively, these individual reserve requirements total over $500 million for each year of the current ten-year cash flow forecast. Set forth in Table 13 below are the actual reserves at June 30, 2012, June 30, 2013 and June 30, 2014, and projected reserves at June 30,2015 for each fund. Table 13 Cash Reserves June 30,2012 through 2014 and Projected at June 30,2015 (In Millions) Actual Projected 2012 2013 2014 2015 June 30 June 30 June 30 June 30 Cash Flow Requirements Reserve— Operating Expenses $ 76 $ 76 $ 76 $76 Certificates of Participation Payments 92 98 98 86 Operating Contingencies Reserve 15 15 15 15 Capital Improvement Program Reserve 171 209 275 216 Catastrophe and Self Insurance 57 57 57 57 Capital Replacement and Refurbishment 59 61 61 62 Debt Service Required Reserveslo 138 135 132 129 Total 608 651 $L S641 "Debt Service Required Reserves" constitute all amounts held in Obligation Reserve Funds, together with additional amounts held by the District that may be used for the payment of debt service on District obligations in accordance with the District's reserve policy. As of June 30, 2014, $132 million of Debt Service Required Reserves were held in Obligation Reserve Funds,of which$43.1 million is restricted by covenant for the specific obligations for which such Obligation Reserve Funds were established. Source: Orange County Sanitation District. The District's reserves consist of the following components: • The Cash Flow Requirements Reserve was established to fund operation, maintenance and certificates of participation debt service expenses for the first half of the fiscal year, prior to the receipt of the first installment of the property tax allocation and sewer service user fees which are collected as a separate line item on the property tax bill. The level of this reserve is established as the sum of an amount equal to six months operations and maintenance expense and the total of certificates of participation debt service expenses due in the subsequent fiscal year. • The Operating Contingencies Reserve was established to provide for non-recurring expenditures that were not anticipated when the annual budget and Sewer Service Charges were adopted. The level of this reserve is equal to 10%of the District's annual operating budget. • The Capital Improvement Program Reserve was established to fund annual increments of the Capital Improvement Program with a target level at one-half of the average annual Capital Improvement Program through the year 2020. Levels higher and lower than the target can be expected while the long-term financing and capital improvement programs are being finalized. 47194378.5 39 • The Catastrophic Loss, or Self-Insurance Reserve is established for property damage including fire, flood and earthquake, general liability and workers' compensation. The level of reserve in this fund is maintained at a level to fund the District's non-reimbursed costs which are estimated to be$57 million. • The Capital Replacement and Refurbishment Reserve was established to provide 30% of the funding to replace or refurbish the current collection, treatment and disposal facilities. The current replacement value of these facilities is estimated to be approximately $6.2 billion. The initial reserve level for this fund was established at $50 million and is augmented by interest earnings and a portion of the annual Sewer Service Charges. • Debt Service Required Reserves include trustee-held amounts in any Obligation Reserve Fund and additional amounts held by the District for the payment of debt service in accordance with the District's reserve policy. The District's current policy is to maintain reserves (including trustee- held reserves) for debt service in the amount of 10% of the principal amount of the District's outstanding debt obligations. • The Rate Stabilization Reserve accumulates all available funds which exceed the targets for all other reserves. The Rate Stabilization Reserve is a separate fund from the Rate Stabilization Account established under the Trust Agreement. There is currently no established target for this reserve and,because the reserves of all other funds have not been exceeded, the reserve level for this reserve fund has been zero for Fiscal Year 2010-11 through Fiscal Year 2013-14. • In Fiscal Year 2009-10, Financial Management staff and the Board of Directors concluded that given the nature of the likely events that may cause a withdrawal from the District's reserves and the degree of overlap among reserve categories,the total amount reserved need not equal the sum of each separate reserve category. As a result, the District adjusted the application of its reserve policy, leading to a reduction of $40 million of the accumulated total, or approximately 8%. Reserve levels are calculated in accordance with the District's reserve policy. Summary of Operating Data Set forth in Table 14 below is a summary of historic operating results for the District for Fiscal Years 2009-10 through Fiscal Year 2013-14. The information presented in the summary should be read in conjunction with the financial statements and notes. See APPENDIX A — "COMPREHENSIVE ANNUAL FINANCIAL REPORT OF THE ORANGE COUNTY SANITATION DISTRICT FOR FISCAL YEAR ENDED TUNE 30,2014." 47194308.5 40 Table 14 Summary of District Historical Revenues and Expenses and Other Financial Information For Fiscal Years 2009-10 through 2013-14 ($in Millions) Audited 2009-10 2010-11 2011-12 2012-13 2013-14 Revenues: Residential &Commercial Sewer Service Charges(l) Regional $193.5 $213.3 $232.2 $258.6 $267.8 Local 5.6 5.7 5.7 5.8 5.7 Industrial Sewer Service Charges 10.8 10.1 9.5 13.5 14.4 Revenue Area No. 14 Fees 10.2 21.4 18.0 27.5 23.6 Ad Valorem Taxes 64.8 64.3 67.9 77.3 72.8 Interest Earnings 19.2 10.1 15.7 (3.6) 6.1 Other Revenues 12.5 5.7 3.6 4.6 5.1 Total Revenues $316.6 $330.6 $352.6 $383.7 $395.5 Operations and Maintenance Expenses(1) 138.1 143.4 172.31s7 149.8 146.4 Net Revenues $178 5 $187 2 $180 3 $233 9 24 1 Debt Service 67.1 $_72. 65.4 $ 77. $_2" Coverage Ratios 2.66x 2.59x 2.76x 3.01x 2.68x CIP Outlay $251.1 $1607 $1017 $ 416 $$7.5 Ending Reserves $473.0 $597.0 1608.0 $615, $713.7 al Net of rebates,if any,to commercial users. (n) Excludes depreciation and amortization expenses. o) Includes a one-time write-down of$34.2 million for costs of feasibility studies (which costs were previously capitalized and being amortized over a five-year period) to properly conform to generally accepted accounting principles. Source: Orange County Sanitation District. 47194378.5 41 Forecasted Operating Data Set forth in Table 15 below are forecasted operating results for the District for Fiscal Years 2014- 15 through 2018-19. These projections assume the number of projects and scheduled build out set forth in the 2014 CIP Validation Study, and reflect the Board-approved rate increase of 2.6% in Fiscal Year 2014-15, and the average annual rate increases of 2.4% over the following three fiscal years. Principal expenditure components of these projections are derived from the 2014 CIP Validation Study, which identified 77 large capital projects and 38 special projects with a 20-year projected outlay of$1.9 billion. Much of the construction is scheduled during the next four and a half years, with average annual capital outlays of$141.7 million. The District's CIP cash flow budget for Fiscal Year 2014-15 is $169.2 million. This CIP budget finances joint works treatment and disposal system improvement projects, and collection system improvement projects. The preparation of such projections was based upon certain assumptions and certain forecasts with respect to conditions that may occur in the future. While the District believes that these assumptions and forecasts are reasonable for the purposes of the projected selected operating data, it makes no representation that they will in fact occur. To the extent that actual future conditions differ from those assumed herein,the data will vary. [Remainder of page intentionally left blank.] 47194378.5 42 Table 15 Summary of Forecasted District Revenues and Expenses and Other Financial Information for Fiscal Years 2014-15 through 2018-19 ($in Mitlions)"41 2014-15 2015-16 2016-17 2017-18 2018-19 Revenues Residential&Commercial Sewer Service Charges $288.9 $296.3 $304.5 $312.9 $321.4 Industrial Sewer Service Charges 13.7 14.0 14.3 14.7 15.0 IRWD Assessments 14.2 13.5 8.8 4.6 5.0 SAWPA Assessments 2.5 2.7 2.8 2.9 3.0 Ad Valorem Taxes 77.7 81.6 85.7 90.0 94.5 Interest Earnings 13.1 14.7 17.4 17.5 20.6 Other Revenues 1.7 1.7 10.1 1.8 1.8 Total Revenues $411.8 $424.5 $443.6 $444.4 $461.3 Add: Build America Bonds Federal Subsidy") $ 5.1 $ 5.1 $ 5.1 $ 5.1 $ 5.1 Operations and Maintenance Expenses (152.5) (155.0) (158.8) (162.6) (169.9 ) Net Revenues(2) $2644 $274.6 $289.9 $286.92 65 Debt Service $ 85.8 $ 86.7 $ 91.7 $ 87.8 $ 86.0 Build America Bonds Federal Subsidy 5.1 5.1 5.1 5.1 5.1 Gross Debt Service $ 90 9 $2L8 S 96.8 S-92.9 S 91.1 Coverage Ratios(2) 1.91x 2 99x 2 99x 3,42x 3 25x CIE Outlays $186.4 206.0 $1966 $205.9 $198.9 Replacement,Refurbishment and Rehabilitation(�1 17.2 25.7 61.1 100.5 90.9 Ending Reserves %599.8 $5$74 S593A $590 $606.9 See REVENUES-Additional Revenues-Federal Subsidy Payments"herein. (%) Calculated in accordance with the Master Agreement and the Installment Purchase Agreement. n) Represents future capital outlays identified within the District's Asset Management Program that have not been developed into specific proposed projects and included within the CIP. (4) Assumptions: a) Annual growth in EDUs is projected to increase 0.3%over the next five years. b) The Residential and Commercial Sewer Service Charge and the Industrial Sewer Service Charges forecasts are based on the total projected EDUs, and the actual board approved rate increase of 2.6% in Fiscal Year 2014-15,and board approved rate increases over the next three years averaging 2.4%per year. c) Revenue Area No. 14 Fees are derived based on the projected contribution of sewage flows to the District from the IRWD. d) Ad valorem taxes are projected with annual increases of 5.0%. c) Interest eamings are projected to average 2.0%of annual cash balances. f) Operating and Maintenance Expenses are forecasted with a base increase of 1.1%per year with adjustments for known periodic outlays that do not occur annually. g) Annual CIP Outlays are based on the cash flow projections developed from the CIP Validation Study. Source: Orange County Sanitation District. 47194378.5 43 Management's Discussion and Analysis of Operating Data The District's Fiscal Year 2014-15 total operating, capital improvement, debt service, and other financing requirement budget is $554.4 million, a 39.6% increase over the prior year budget of$397.0 million. This overall increase is primarily attributable to a one-time reduction of$125 million in long- term liabilities. This one-time reduction is the result of some of the 2013-14 CIP program being spread out into future years and the receipt of unexpected one-time revenues in Fiscal Year 2013-14. This $125 million one-time reduction will consist of a pay-down of a portion of the $200 million current unfunded accrued actuarial pension liability. Excluding this one-time reduction, the total proposed cash flow budget for Fiscal Year 2014-15 totals $429 million, an 8.2% increase over the prior year. This overall increase consists of an increase in capital outlay of$41.5 million or 28.2%, a decrease in debt service requirements of$12.4 million or 12.6%,and an increase in operating expenses of$3.2 million or 2.1%. The Fiscal Yew 2014-15 proposed budget to operate, maintain and manage am sewage collection, treatment and disposal system is $152.5 million, an increase of 2.1% over the prior year budget. Personnel costs have increased by$1.2 million,or 1.2%, due to the retirement of many long-term employees, as there were 23 retirees in Fiscal Year 2013-14 and 17 retirees in Fiscal Year 2012-13. As of Much 31, 2014,there were 44 vacant positions,or 7.0%of total staffing, and staffing levels are proposed to remain unchanged from the current full-time equivalent("FTE")positions of 626.0. Repairs and maintenance costs me proposed to increase $1.8 million or 15.8%. This increase is mostly attributable to increases in basic repairs and maintenance costs including the scheduling of digester cleanings totaling$1.0 million and one central generation engine overhaul totaling$893,000.The biosolids hauling budget was raised $0.92 million, or 5.3%, due to a slight increase in unit cost and the anticipated increase in biosolids production that is projected to peak at about 785 tons per day, up from the prior fiscal year average of 765 tons per day,because of several projects that could reduce operational performance. Overhead cost allocation out to the CIP has been reduced by$1.5 million, or 8.1%reduction due to decreased CIP outlay over the past several years. Conversely affecting these operating increases,chemical supplies have decreased$1.0 million,or 6.8%, as a result of the decrease disinfection, odor control, and chemicals used in the treatment process due to chemical optimization and decreased disinfection requirements. In addition,property and liability insurance premiums me proposed to decrease $900,000, or 64.3%, due to favorable market conditions on premiums for insurance renewals. In preparation of the Fiscal Year 2014-16 biennium budget,District staff developed and reviewed with the Board of Directors a capital improvement program to deliver the levels of service included in the District's five-year strategic plan. These levels of services and associated capital projects are included in the District's Five-Year Strategic Plan. In addition, District staff validated the active CIP projects currently being executed to ensure that the scope of work on the active projects remains appropriate, and that the cost estimates have been accurately updated. The Fiscal Year 2014-15 CIP cash flow budget was approved at $169.2 million. The 2014 validated CIP includes 77 large capital projects and 38 special projects with 20-year outlays totaling$1.9 billion. The completion of the CIP Validation Study in 2013 reaffirmed the need for rate increases in future years. Based on the results of the CIP Validation Study and the Five-Year Plan, the Board of Directors adopted Ordinance No. OCSD-41, increasing the sanitary sewer service charges by approximately 4.8% in Fiscal Year 2013-14, and by an average of 2.4% over the following four years. These rate increases were approved by a vote of two-thirds of the members of the Board of Directors and 47194378.5 44 are not subject to reaffirmation in any of the future fiscal years covered by this five-yew period. This action increased the single family residence user rate,the basis for all sewer user fee rates, from $308 in Fiscal Year 2013-14 to $316 in Fiscal Year 2014-15. See "DISTRICT REVENUES — Sewer Service Charges." Investment of District Funds State statutes authorize the District to invest in obligations of the United States Government,state and local governmental agencies, negotiable certificates of deposits, bankers acceptances, commercial paper, reverse repurchase agreements and a variety of other investment instruments which are allowable under California Government Code Section 53600 et seq. All District funds, except for Obligation Reserve Funds controlled by a bank trustee pursuant to the provisions of Existing Senior Obligations, are managed by an external money manager, Pacific Investment Management Company. Mellon Trust serves as the District's independent custodian bank for its investment program. Callan Associates serves as the District's independent advisor. As of October 31, 2014, the District's externally managed fund consisted of a short-term investment portfolio of$58.8 million with an average maturity of 37 days, and a long-term investment portfolio of$416.8 million with average maturities of 2.6 years. Investments consist of United States government securities, corporate bonds and commercial paper. The District's portfolio contains no structured investment vehicles("SIVs")or reverse repurchase agreements. Deposits in banks are maintained in financial institutions which provide deposit protection on the bank balance from the Federal Deposit Insurance Corporation. The California Government Code requires State banks and savings and loans to secure local government deposits by pledging government securities equal to 110% of the deposits or by pledging first trust deed mortgage notes equal to 150% of the deposits. The District's Investment Policy requires that the District invest public funds in a manner which ensures the safety and preservation of capital while meeting reasonable anticipated operating expenditure needs, achieving a reasonable rate of return and conforming to all state and local statutes governing the investment of public funds. The primary objectives, in order, of the District's investment activities are safety,liquidity and return on investment. FINANCIAL OBLIGATIONS Existing Indebtedness Currently, the District has Senior Obligations Outstanding payable on a parity with the Revenue Obligations. The table below describes the District's outstanding parity certificates of participation as of January 1, 2015. The payment obligations in connection with each series of these certificates of participation constitute Senior Obligations,subject to the provisions of the Master Agreement and shall be afforded all of the benefits, interests and security afforded Senior Obligations pursuant to the Master Agreement. The District has no general obligation bonds or subordinate bonds outstanding. 47194378.5 45 Table 16 Outstanding Senior Obligations As of January 1,2015 Original Principal Issue Outstanding Final Amount Date Balance Maturi 2007A Certificates $ 95,180,000 05/22/07 $ 92,385,000 02/01/30 2007B Certificates 300,000,000 12/20/07 173,325,0001D 02/01/37 2008B Certificates 27,800,000 09/11/08 17,315,000 08/01/16 2009A Certificates 200,000,000 05/07/09 184,090,000 02/01/39 2010A Certificates 80,000,000 05/18/10 80,000,000 02/01/40 2010C Revenue Obligations 157,000,000 11/29/10 157,000,000 02/01/44 2011A Revenue Obligations 147,595,000 10/03/11 121,290,000 02/01/26 2012A Revenue Obligations 100,645,000 03/22/12 100,645,000 02/01/33 2012B Revenue Obligations 66,395,000 08/16/12 66,395,000 02/01/26 2014A Revenue Obligations 85,090,000 08/07/14 85,090,000 02/01/27 2014B Certificates(2) 120,850,000 10/08/14 120,850,000 11/15/16n1 Total Senior Obligations 1.3R0.555.000 $1.198.385.000 Includes the Refunded Certificates to be refunded with the proceeds of the Revenue Obligations. See "REFUNDING PLAN"herein. I�1 The District may in the future refund the 2014B Certificates with Senior Obligations amortizing over a term of approximately 21 years. In connection with the execution and delivery of the above-referenced outstanding certificates of participation, the District entered into certain installment purchase agreements, or equivalent documents, providing for the payment of installment payments or similar payments. Anticipated Financings From time to time the District may incur other obligations to finance portions of the CIP. Over the next ten years,however,the District does not expect to issue any additional debt,other than refunding debt. The District expects to refund outstanding obligations from time to time, such as the 2014B Certificates mentioned in Table 16 above. Direct and Overlapping Bonded Debt The aggregate direct and overlapping bonded debt of the District as of June 30, 2014 is set forth on page 54 of Appendix A. THE CORPORATION The Corporation was organized on June 19, 2000 as a nonprofit public benefit corporation pursuant to the Nonprofit Public Corporation law of the State. The Corporation's purpose is to render assistance to the District in its acquisition of equipment,real property and improvements on behalf of the District. Under its articles of incorporation, the Corporation has all powers conferred upon nonprofit public benefit corporations by the laws of the State,provided that it will not engage in any activity other than that which is necessary or convenient for, or incidental to the purposes for which it was formed. 47194378.5 46 The Corporation is a separate legal entity from the District. It is governed by a twenty-five member Board of Directors. The Corporation has no employees. All staff work is performed by employees of the District. The members of the Corporation's Board of Directors are the Board of Directors of the District. The District's Director of Finance and Administrative Services and other District employees are available to provide staff support to the Corporation. The Corporation has not entered into any material financing arrangements other than those referred to in this Official Statement. Further information concerning the Corporation may be obtained from the Orange County Sanitation District office at 10844 Ellis Avenue, Fountain Valley, California, 92708-7018. LIMITATIONS ON TAXES AND REVENUES Article XIIIA of the California Constitution On June 6, 1978, California voters approved proposition 13 ("Proposition 13"), which added Article XIIIA to the State Constitution ("Article XIIIA"). Article XIIIA, as amended, limits the amount of any ad valorem tax on real property to one percent of the full cash value thereof, except that additional ad valorem taxes may be levied to pay debt service on (i)indebtedness approved by the voters prior to July 1, 1978,(ii)(as a result of an amendment to Article XIIIA approved by State voters on Jane 3, 1986) on bonded indebtedness for the acquisition or improvement of real property which has been approved on or after July 1, 1978 by two-third of the voters on such indebtedness, and (iii)bonded indebtedness incurred by a school district or community college district for the construction, reconstruction, rehabilitation or replacement of school facilities or the acquisition or lease of real property for school facilities, approved by 55% of the voters of the district, but only if certain accountability measures are included in the proposition. Article XIIIA defines full cash value to mean "the county assessor's valuation of real property as shown on the 1975-76 tax bill under "full cash value," or thereafter, the appraised value of real property when purchased, newly constructed, or a change in ownership has occurred after the 1975 assessment" The full cash value may be adjusted annually to reflect inflation at a rate not to exceed 2%per year or to reflect a reduction in the consumer price index or comparable data for the area under the taxing jurisdiction, or reduced in the event of declining property values caused by substantial damage, destruction, or other factors. Legislation enacted by the State Legislature to implement Article XIIIA provides that notwithstanding any other law, local agencies may not levy any ad valorem property tax except to pay debt service on indebtedness approved by the voters as described above. Legislation Implementing Article XIIIA Legislation has been enacted and amended a number of times since 1978 to implement Article XIIIA. Under current law,local agencies are no longer permitted to levy directly any property tax(except to pay voter-approved indebtedness). The one percent property tax is automatically levied by the County and distributed according to a formula among taxing agencies. The formula apportions the tax roughly in proportion to the relative shares of taxes levied prior to 1989. Increases of assessed valuation resulting from reappraisals of property due to new construction, change in ownership or from the 2% annual adjustment are allocated among the various jurisdictions in the "taxing area" based upon their respective "situs." Any such allocation made to a local agency continues as part of its allocation in future years. 47194378.5 47 Beginning in the 1981-82 fiscal year, assessors in the State no longer record property values on tax rolls at the assessed value of 25%of market value which was expressed as$4 per$100 assessed value. All taxable property is now shown at full market value on the tax rolls. Consequently, the tax rate is expressed as $1 per$100 of taxable value. All taxable property value included in this Official Statement is shown at 100% of market value (unless noted differently) and all tax rates reflect the $1 per $100 of taxable value. Article XIIIB of the California Constitution An initiative to amend the State Constitution entitled"Limitation of Government Appropriations" was approved on September 6, 1979, thereby adding Article XIIIB to the State Constitution ("Article XBIB"). Under Article XIIIB,the State and each local governmental entity has an annual"appropriations limit" and is not permitted to spend certain moneys that are called "appropriations subject to limitation" (consisting of tax revenues, state subventions and certain other funds) in an amount higher than the appropriations limit. Article XIBB does not affect the appropriations of moneys that are excluded from the definition of"appropriations subject to limitation,"including debt service on indebtedness existing or authorized as of January 1, 1979, or bonded indebtedness subsequently approved by the voters. In general terms, the appropriations limit is to be based on certain 1978-79 expenditures, and is to be adjusted annually to reflect changes in consumer prices, populations, and services provided by these entities. Among other provisions of Article XIIIB, if these entities' revenues in any year exceed the amounts permitted to be spent,the excess would have to be returned by revising tax rates or fee schedules over the subsequent two years. "Appropriations subject to limitation" are authorizations to spend `proceeds of taxes," which consist of tax revenues, state subventions and certain other funds, including proceeds from regulatory licenses, user charges or other fees to the extent that such proceeds exceed "the cost reasonably borne by such entity in providing the regulation, product or service,"but"proceeds of taxes" excludes tax refunds and some benefit payments such as unemployment insurance. No limit is imposed on appropriations of funds which are not `proceeds of taxes," such as reasonable user charges or fees, and certain other non- tax funds. Not included in the Article XIIIB limit we appropriations for the debt service costs of bonds existing or authorized by January 1, 1979, or subsequently authorized by the voters, appropriations required to comply with mandates of courts or the federal government and appropriations for qualified capital outlay projects. The appropriations limit may also be exceeded in certain cases of emergency. The appropriations limit for the District in each year is based on the District's limit for the prior year, adjusted annually for changes in the cost of living and changes in population, and adjusted, where applicable, for transfer of financial responsibility of providing services to or from another unit of government. The change in the cost of living is, at the District's option, either(1)the percentage change in State per capita personal income, or (2) the percentage change in the local assessment roll on nonresidential property. Either test is likely to be greater than the change in the cost of living index, which was used prior to Proposition 111. Change in population is to be measured either within the jurisdiction of the District or the County as a whole. As amended by Proposition 111, the appropriations limit is tested over consecutive two-year periods. Any excess of the aggregate "proceeds of taxes" received by a District over such two-year period above the combined appropriations limits for those two years is to be returned to taxpayers by reductions in tax rates or fee schedules over the subsequent two years. As originally enacted in 1979,the District's appropriations limit was based on 1978-79 authorizations to expend proceeds of taxes and was adjusted annually to reflect changes in cost of living and population (using different definitions, which 47194378.5 48 were modified by Proposition 111). Starting with Fiscal Year 1990-91,the District's appropriations limit was recalculated by taking the actual Fiscal Year 1986-87 limit, and applying the annual adjustments as if Proposition 111 had been in effect. The District does not anticipate that any such appropriations limitations will impair its ability to make Installment Payments as required by the Installment Purchase Agreement. Proposition lA and Proposition 22 Proposition lA ("Proposition lA"), proposed by the Legislature in connection with the 2004-05 Budget Act and approved by the voters in November 2004,restricts State authority to reduce major local tax revenues such as the tax shifts permitted to take place in Fiscal Years 2004-05 and 2005-06. Proposition IA provides that the State may not reduce any local sales tax rate, limit existing local government authority to levy a sales tax rate or change the allocation of local sales tax revenues, subject to certain exceptions. Proposition lA generally prohibits the State from shifting to schools or community colleges any share of property tax revenues allocated to local governments for any fiscal year,as set forth under the laws in effect as of November 3, 2004. Any change in the allocation of property tax revenues among local governments within a county most be approved by two-thirds of both houses of the Legislature. Proposition IA provides, however, that beginning in Fiscal Year 2008-09, the State may shift to schools and community colleges up to 8%of local government property tax revenues,which amount must be repaid, with interest, within three years, if the Governor proclaims that the shift is needed due to a severe state financial hardship, the shift is approved by two-thirds of both houses and certain other conditions are met. Such a shift may not occur more than twice in any ten-year period. The State may also approve voluntary exchanges of local sales tax and property tax revenues among local governments within a county. Proposition IA was generally superseded by the passage of a new initiative constitutional amendment at the November 2010 election, known as Proposition 22 ("Proposition 22"). The effect of Proposition 22 is to prohibit the State, even during a period of severe fiscal hardship, from delaying the distribution of tax revenues for transportation,redevelopment, or local government projects and services. It prevents the State from redirecting redevelopment agency property tax increment to any other local government or from temporarily shifting property taxes from cities, counties and special districts to schools. This is intended to, among other things,stabilize local government revenue sources by restricting the State's control over local property taxes. Prior to the passage of Proposition 22, the State invoked Proposition IA to divert $1.935 billion in local property tax revenues in fiscal year 2009-10 from cities, counties,and special districts to the State to offset State general fund spending for education and other programs. Approximately$5 million of the District's property tax revenues were diverted to the State as a result of this Proposition IA suspension. The District participated in a Proposition IA Securitization Program (the `Program") sponsored by the California Statewide Communities Development Authority. The Program allowed the District to exchange its anticipated State property tax receivable for an equal amount of cash. In addition,the State's adopted 2009-10 budget included a $1.7 billion diversion in local property tax revenues from local redevelopment agencies. Many California Redevelopment Association members are actively engaged in litigation to block such diversion and recoup certain payments already made under certain legislation passed in July 2009 that is beyond the reach of Proposition 22,known as"ABX4 26." Proposition IA also provides that if the State reduces the vehicle license fee ("VLF") rate currently in effect, 0.65% of vehicle value, the State most provide local governments with equal replacement revenues. Further, Proposition lA requires the State to suspend State mandates affecting 47194378.5 49 cities, counties and special districts, excepting mandates relating to employee rights, schools or community colleges, in any year that the State does not fully reimburse local governments for their costs to comply with such mandates. Article XIIIC and Article XIIID of the California Constitution Proposition 218, a State ballot initiative (mown as the "Right to Vote on Taxes Act," was approved by the voters on November 5, 1996. The initiative added Articles XIIIC and XIIID to the California Constitution, creating additional requirements for the imposition by most local governments of "general taxes,""special taxes,""assessments,""fees,"and`charges." Proposition 218 became effective, pursuant to its terns, as of November 6, 1996, although compliance with some of its provisions was deferred until July 1, 1997, and certain of its provisions purport to apply to any tax imposed for general governmental purposes (i.e., "general taxes") imposed, extended or increased on or after January 1, 1995 and prior to November 6, 1996. Article XIIID imposes substantive and procedural requirements on the imposition, extension or increase of any"fee" or"charge" subject to its provisions. A"fee" or"charge" subject to Article XIIID includes any levy, other than an ad valorem tax, special tax or assessment, imposed by an agency upon a parcel or upon a person as an incident of property ownership. Article XIIID prohibits, among other things, the imposition of any proposed fee or charge, and, possibly, the increase of any existing fee or charge, in the event written protests against the proposed fee or charge are presented at a required public hearing on the fee or charge by a majority of owners of the parcels upon which the fee or charge is to be imposed. Except for fees and charges for water, sewer and refuse collection services, the approval of a majority of the property owners subject to the fee or charge,or at the option of the agency,by a two-thirds vote of the electorate residing in the affected area, is required within 45 days following the public hearing on any such proposed new or increased fee or charge. The California Supreme Court decisions in Richmond v. Shasta Community Services District, 32 Cal.4th 409 (2004) ("Richmond"), and Bighorn- Desert View Water Agency v. Verjil, 39 Cal.4th 205 (2006) ("Bighorn") have clarified some of the uncertainty surrounding the applicability of Section 6 of Article XIIID to service fees and charges. In Richmond, the Shasta Community Services District charged a water connection fee, which included a capacity charge for capital improvements to the water system and a fire suppression charge. The Court held that both the capacity charge and the fire suppression charge were not subject to Article XIIID because a water connection fee is not a property-related fee or charge because it results from the properly owner's voluntary decision to apply for the connection. In both Richmond and Bighorn, however, the Court stated that a fee for ongoing water service through an existing connection is imposed "as an incident of property ownership" within the meaning of Article XIIID, rejecting, in Bighorn, the water agency's argument that consumption-based water charges are not imposed "as an incident of property ownership"but as a result of the voluntary decisions of customers as to how much water to use. Article XIIID also provides that"standby charges"are considered"assessments"and must follow the procedures required for "assessments" under Article XIIID and imposes several procedural requirements for the imposition of any assessment, which may include (1) various notice requirements, including the requirement to mail a ballot to owners of the affected property; (2) the substitution of a property owner ballot procedure for the traditional written protest procedure, and providing that"majority protest" exists when ballots (weighted according to proportional financial obligation) submitted in opposition exceed ballots in favor of the assessments; and (3) the requirement that the levying entity "separate the general benefits from the special benefits conferred on a parcel"of land. Article XIIID also precludes standby charges for services that are not immediately available to the parcel being charged. Article XIIID provides that all existing, new or increased assessments are to comply with its provisions beginning July 1, 1997. Existing assessments imposed on or before November 5, 1996, and 47194378.5 50 "imposed exclusively to finance the capital costs or maintenance and operations expenses for [among other things] water" are exempted from some of the provisions of Article XIIID applicable to assessments. Article XIIIC extends the people's initiative power to reduce or repeal existing local taxes, assessments, fees and charges. This extension of the initiative power is not limited by the terms of Article XIIIC to fees, taxes, assessment fees and charges imposed after November 6, 1996 and absent other authority could result in retroactive reduction in any existing taxes, assessments, fees or charges. In Bighorn, the Court concluded that under Article XIIIC local voters by initiative may reduce a public agency's water rates and delivery charges. The Court noted, however, that it was not holding that the authorized initiative power is free of all limitations, stating that it was not determining whether the electorate's initiative power is subject to the public agency's statutory obligation to set water service charges at a level that will `pay the operating expenses of the agency, . . . provide for repairs and depreciation of works,provide a reasonable surplus for improvements,extensions,and enlargements,pay the interest on any bonded debt, and provide a sinking or other fund for the payment of the principal of such debt as it may become due." The District implemented a five-year plan beginning in Fiscal Year 2002-03 which included a rate increase of$7.50 per year, or 9.4%, for all ratepayers to$87.50 per year. In May 2003,the Board of Directors approved a 15% rate increase per year, for each year, over the then following five years, upon 2/3 vote of the Board of Directors after conducting a noticed public hearing in compliance with Article XIIID. The Board of Directors considered this increase necessary to provide needed capital improvements,to cover additional treatment and disinfection costs,and to minimize rate increases over an extended period of time. On July 2, 2003, the Board of Directors adopted Ordinance No. OCSD-20 increasing sanitary sewer service charges for all single family and multi-family residential units as well as most commercial and industrial properties. The Ordinance was adopted by a 2/3 vote of the Board of Directors as required under law after conducting a noticed public hearing in compliance with all laws. The Ordinance increases the amount of the annual charges by approximately 15%per year for each of the following five years, commencing with Fiscal Year 2003-04, thereby raising the single family residence user rate from the then current$87.50 to$100.00, $115.00, $132.00, $152.00, and$175.00 annually. The Ordinance discounted by 5%the annual increases which were the subject of the required protest hearings on the fee increase as described above. After the completion of the CIF Validation Study for Fiscal Year 2005-06 that increased its ten year CIP cash flow projects to $2.2 billion, or an average of$220 million per year, the Board of Directors adopted Ordinance No. OCSD-26 increasing the Fiscal Year 2005-06 single family residential rate 31%,from$115 to$151 for such year. In May 2006,the Board of Directors adopted Ordinance No. OCSD-30B increasing the Fiscal Year 2006-07 single family residential rate 9.8%, from $151.00 to $165.80 for such year, except those located in Revenue Area 14. These increases represented the increase permitted under the protest hearings on the fee increase which was held in 2003. In June 2007, the Board of Directors adopted Ordinance No. OCSD-32 increasing the Fiscal Year 2007- 08 single family residential rate by 9.8%. In February 2008, after a noticed public hearing, the Board of Directors adopted Ordinance No. OCSD-35, which provides for annual increases in the single family residential rate of 10.4%, 10.0%, 10.4%, 9.4%and 10.1%,respectively, for Fiscal Years 2008-09 through 2012-13. On March 27, 2013, the Board of Directors adopted Ordinance No. OCSD41 approving increases in its sanitary sewer service charges for all single family residences, multi-family residential units, and all non-residential properties. The Board of Directors increased the single family residential rate, which is the basis for all of the District's sewer service charges, by 4.8% for Fiscal Year 2013-14 and thereafter by an average of 2.4%annually for each Fiscal Year through Fiscal Year 2017-I8. Pursuant to the Master Agreement, the District will, to the extent permitted by law, fix,prescribe and collect fees and charges for the services of the Wastewater System which will be at least sufficient to yield during each Fiscal Year(a)Net Revenues equal to 125%of Debt Service on Senior Obligations for 47194378.5 51 such Fiscal Year, and(b)Net Operating Revenues equal to 100% of Debt Service on all Obligations for such Fiscal Year. The District may make adjustments from time to time in such fees and charges and may make such classification thereof as it deems necessary, but will not reduce the fees and charges then in effect unless the Revenues and Net Revenues from such reduced fees and charges will at all times be sufficient to meet the requirements of the Master Agreement. If service charges are determined to be subject to Article XIIID, and proposed increased service charges cannot be imposed as a result of a majority protest, such circumstances may adversely affect the ability of the District to generate revenues in the amounts required by the Master Agreement, and to make Installment Payments as provided in the Installment Purchase Agreement. No assurance may be given that Articles XIIIC and XIIID will not have a material adverse impact on Net Revenues. Other Initiative Measures Articles XIIIA, XIIIB, XIIIC and XIIID were adopted pursuant to California's constitutional initiative process. From time to time other initiative measures could be adopted by California voters, placing additional limitations on the ability of the District to increase revenues. LEGAL MATTERS The validity of the Revenue Obligations and certain other legal matters are subject to the approving opinion of Fulbright & Jaworski LLP, a member of Norton Rose Fulbright, Los Angeles, California, Special Counsel to the District. A complete copy of the proposed form of Special Counsel opinion is attached as Appendix F hereto. Special Counsel, in its capacity as Special Counsel to the District,undertakes no responsibility for the accuracy,completeness or fairness of this Official Statement. Certain legal matters will be passed on for the District and the Corporation by Woodruff, Spradlin & Smart, a Professional Corporation, Costa Mesa, California, and for the District by Fulbright & Jaworski LLP,a member of Norton Rose Fulbright,Disclosure Counsel to the District. FINANCIAL ADVISOR The District has retained Public Resources Advisory Group as an independent registered municipal advisor(the"Financial Advisor")in connection with the execution and delivery of the Revenue Obligations. The Financial Advisor has not been engaged, nor have they undertaken, to audit, authenticate or otherwise verify the information set forth in the Official Statement, or any other related information available to the District, with respect to accuracy and completeness of disclosure of such information. The Financial Advisor has reviewed this Official Statement but makes no guaranty, warranty or other representation respecting accuracy and completeness of the information contained in this Official Statement. ABSENCE OF LITIGATION There is no action, suit,proceeding, inquiry or investigation,at law or in equity,before or by any court, regulatory agency, public board or body, pending or, to the best knowledge of the District, threatened against the District affecting the existence of the District or the titles of its directors or officers to their offices or seeking to restrain or to enjoin the sale or delivery of the Revenue Obligations, the application of the proceeds thereof in accordance with the Trust Agreement, or in any way contesting or affecting the validity or enforceability of the Revenue Obligations, the Trust Agreement, the Master Agreement,the Installment Purchase Agreement or any action of the District contemplated by any of said documents, or in any way contesting the completeness or accuracy of this Official Statement, or contesting the powers of the District or its authority with respect to the Revenue Obligations or any action 47194308.5 52 of the District contemplated by any of said documents, nor, to the knowledge of the District is there any basis therefor. There is no action, suit,proceeding, inquiry or investigation,at law or in equity,before or by any court, regulatory agency, public board or body pending or, to the best knowledge of the District, threatened against the District contesting or affecting the ability of the District to collect amounts from which Installment Payments are payable, or which would have a material adverse effect on the District's ability to make Installment Payments. FINANCIAL STATEMENTS The basic financial statements of the District included in Appendix A to this Official Statement have been audited by McGladrey & Pullen, LLP, independent certified public accountants. See APPENDIX A—"COMPREHENSIVE ANNUAL FINANCIAL REPORT OF THE ORANGE COUNTY SANITATION DISTRICT FOR FISCAL YEAR ENDED JUNE 30, 2014" herein. The District has received the Government Finance Officers Association Certificate of Achievement for "Excellence in Financial Reporting" for 20 consecutive years. The audited financial statements, including the footnotes thereto, should be reviewed in their entirety. McGladrey & Pullen, LLP, the District's independent auditor, has not been engaged to perform, and has not performed, since the date of its report included in Appendix A, any procedures on the financial statements addressed in that report. McGladrey & Pullen, LLP also has not performed any procedures relating to this official statement. TAX MATTERS Tax Exemption The Internal Revenue Code of 1986 (the"Code") imposes certain requirements that must be met subsequent to the execution and delivery of the Installment Purchase Agreement for the interest component of each Installment Payment (the "Interest Component"), and the allocable portion thereof distributable in respect of each Revenue Obligation (each a "Certificate Interest Distribution"), to be and remain excluded pursuant to section 103(a) of the Code from the gross income of the owners thereof for federal income tax purposes. Noncompliance with such requirements could cause such amounts to be included in gross income for federal income tax purposes retroactive to the date of delivery of the Installment Purchase Agreement and the Revenue Obligations. The District has covenanted to maintain the exclusion of the Interest Components and the Certificate Interest Distributions from the gross income of the owners thereof for federal income tax purposes. Upon the execution and delivery of the Installment Purchase Agreement, Fulbright & Jaworski LLP, Los Angeles, California, Special Counsel, will deliver its opinion that under existing law, and assuming compliance with the covenants referred to herein, each Interest Component, and each Certificate Interest Distribution in respect thereof,is excluded pursuant to section 103(a)of the Code from the gross income of the owner thereof for federal income tax purposes. Further, on that same day Special Counsel will render its opinion,based solely on the foregoing, and upon existing provisions of the laws of California, that each Interest Component, and each Certificate Interest Distribution in respect thereof, is exempt from personal income taxes of the State of California. Special Counsel will render its further opinion that, under existing statutes, regulations, rulings and court decisions, the Installment Purchase Agreement will not constitute a "specified private activity bond" within the meaning of section 57(a)(5) of the Code and, therefore, that neither any Interest Component, nor any Certificate Interest Distribution in respect thereof, will be treated as an item of tax preference for purposes of computing the alternative minimum tax imposed by section 55 of the Code. Receipt or accrual of an Interest Component allocable to, or Certificate Interest Distribution in respect of a Revenue Obligation owned by, a corporation may 47194378.5 53 affect the computation of the alternative minimum taxable income of that corporation. A corporation's alternative minimum taxable income is the basis upon which the alternative minimum tax imposed by section 55 of the Code is computed. Pursuant to the Installment Purchase Agreement and in the Tax Certificate Pertaining to Arbitrage and Other Matters under Sections 103 and 141-150 of the Internal Revenue Code of 1986, to be delivered by the District in connection with the execution and delivery of the Installment Purchase Agreement, and the issuance of the Revenue Obligations, the District will make representations relevant to the determination of, and will make certain covenants regarding or affecting, the exclusion of the Interest Component of the Installment Payments, and of each Certificate Interest Distribution in respect thereof, from the gross income of the owners thereof for federal income tax purposes. In reaching its opinions described above, Special Counsel will assume the accuracy of each such representation and the present and future compliance by the District with each of its covenants. Except as stated in this section above, Special Counsel will express no opinion as to any Federal or state tax consequence of the receipt or accrual of an Interest Component of an Installment Payment, or of a Certificate Interest Distribution in respect thereof, or of the ownership or disposition of, a Revenue Obligation. Furthermore, Special Counsel will express no opinion as to any federal, state or local tax law consequences with respect to the Installment Purchase Agreement or the Revenue Obligations, or of the Interest Components or Certificate Interest Distributions in respect thereof, if any action is taken with respect to the Installment Purchase Agreement, or the use or investment of proceeds thereof, the Trust Agreement or the Revenue Obligations predicated or permitted upon the advice or approval of other counsel. Special Counsel has not undertaken to advise in the future whether any events after the date of execution and delivery of the Installment Purchase Agreement may affect the tax status of Interest Components or Certificate Interest Distributions or the tax consequences of the ownership of a Revenue Obligation. Special Counsel's opinion is not a guarantee of a result, but represents its legal judgment based upon its review of existing statutes, regulations, published rulings and court decisions and the representations and covenants of the District described above. No ruling has been sought from the Internal Revenue Service (the "Service') with respect to the matters addressed in the opinion of Special Counsel, and Special Counsel's opinion is not binding on the Service. The Service has an ongoing program of auditing the tax-exempt status of the interest on municipal obligations. If an audit of the Installment Purchase Agreement and Revenue Obligations is commenced, under current procedures the Service is likely to treat the District as the "taxpayer,"and the owners of the Revenue Obligations would have no right to participate in the audit process. In responding to or defending an audit of the tax-exempt status of the Interest Components and Certificate Interest Distributions, the District may have different or conflicting interests from the owners. Public awareness of any future audit of the Installment Purchase Agreement and Revenue Obligations could adversely affect the value and liquidity of the Revenue Obligations during the pendency of the audit,regardless of its ultimate outcome. Existing law may change to reduce or eliminate the benefit to bondholders of the exclusion of interest on the Interest Components and Certificate Interest Distributions accrued in respect of Revenue Obligations from gross income for federal income tax purposes. Any proposed legislation or administrative action, whether or not taken, could also affect the value and marketability of the Revenue Obligations. Prospective purchasers of the Revenue Obligations should consult with their own tax advisors with respect to any proposed or future changes in tax law. A copy of the proposed form of opinion of Special Counsel relating to the Revenue Obligations is included in Appendix F. 47194378.5 54 Tax Accounting Treatment of Bond Premium and Original Issue Discount For purposes of the following discussion, each Revenue Obligation should be treated as a debt instrument, the scheduled payments of principal of and interest on which are the scheduled distributions of Installment Principal and Installment Interest,respectively, to be allocated to that Revenue Obligation in accordance with the terms of the Installment Purchase Agreement and Revenue Obligation. To the extent that a purchaser of a debt instrument acquires that debt instrument at a price that exceeds the aggregate amount of scheduled interest payments (other than payments of"qualified stated interest" as defined in section 1.1273-1 of the Treasury Regulations) to be made on that debt instrument (determined, in the case of a prepayable debt instrument, under the assumption described below) (the "stated redemption price at maturity" of the instrument), such excess will constitute "bond premium" under the Code. Section 171 of the Code, and the Treasury Regulations promulgated thereunder,provide generally that bond premium on a tax-exempt obligation must be amortized on a constant yield,economic accrual, basis; the amount of premium so amortized will reduce the owner's basis in such obligation for federal income tax purposes, but such amortized premium will not be deductible for federal income tax purposes. In the case of a purchase of a Revenue Obligation that is subject to redemption(in whole or in part)upon a permitted optional prepayment of an Installment Payment,the determination whether there is amortizable bond premium, and the computation of the accrual of that premium, must be made under the assumption that the Installment Payment will be prepaid on the permitted date that would minimize the yield on the Revenue Obligation (or that the Revenue Obligation will not be prepaid prior to the stated maturity date in respect of that Revenue Obligation if that would minimize the purchaser's yield). The rate and timing of the amortization of the bond premium and the corresponding basis reduction may result in an owner realizing a taxable gain when a Revenue Obligation owned by such owner is sold or disposed of for an amount equal to or in some circumstances even less than the original cost of the Revenue Obligation to the owner. The excess,if any, of the stated redemption price at maturity of a Revenue Obligation of a stated maturity over the initial offering price to the public of the Revenue Obligations of that stated maturity set forth on the inside cover page of this Official Statement is `original issue discount." Original issue discount accruing in respect of a Revenue Obligation is treated for federal income tax and California personal income tax purposes as additional interest in respect of that debt instrument and is excluded from the gross income of the owner thereof for federal income tax purposes and exempt from the California personal income tax to the same extent as would be stated interest on that debt instrument. Original issue discount accruing in respect of any Revenue Obligation purchased at its initial offering price and pursuant to such initial offering will accrue on a semiannual basis over the tern to the stated maturity date in respect of the Revenue Obligation on the basis of a constant yield method and, within each semiannual period, will accrue on a ratable daily basis. The amount of original issue discount in respect of such a Revenue Obligation accruing during each period is added to the adjusted basis of such Revenue Obligation to determine taxable gain upon disposition (including upon sale, prepayment or payment on maturity) of such Revenue Obligation. The Code includes certain provisions relating to the accrual of original issue discount in the case of a purchaser of a Revenue Obligation who purchases that Revenue Obligation other than at the initial offering price and pursuant to the initial offering of that Revenue Obligation. Any person considering purchasing a Revenue Obligation at a price that includes bond premium should consult his or her own tax advisors with respect to the amortization and treatment of such bond premium, including, but not limited to, the calculation of gain or loss upon the sale, prepayment or other disposition of the Revenue Obligation. Any person considering purchasing a Revenue Obligation of a maturity in respect of which there is original issue discount should consult his or her own tax advisors with respect to the tax consequences of ownership of such Revenue Obligation,including the treatment of 47194378.5 55 a purchaser who does not purchase in the original offering and at the original offering price of that Revenue Obligation, the allowance of a deduction for any loss on a sale or other disposition, and the treatment of seemed original issue discount in respect of such Revenue Obligation under federal individual and corporate alternative minimum taxes. Other Tax Consequences Although each Interest Component, and each Certificate Interest Distribution in respect thereof, may be excluded pursuant to section 103(a) of the Code from the gross income of the owner thereof for federal income tax purposes, an owner's federal, state or local tax liability may be otherwise affected by the ownership or disposition of the Revenue Obligations. The nature and extent of these other tax consequences will depend upon the owner's other items of income or deduction. Without limiting the generality of the foregoing, prospective purchasers of the Revenue Obligations should be aware that (i) section 265 of the Code denies a deduction for interest on indebtedness incurred or continued to purchase or carry the Revenue Obligations and the Code contains additional limitations on interest deductions applicable to financial institutions that own tax-exempt obligations(such as the Revenue Obligations),(ii) with respect to insurance companies subject to the tax imposed by section 831 of the Code, section 832(b)(5)(B)(i) reduces the deduction for loss reserves by 15% of the sum of certain items, including Interest Component and Certificate Interest Distributions in respect of the Revenue Obligations, (iii) Interest Component and Certificate Interest Distributions accrued in respect of Revenue Obligations owned by certain foreign corporations doing business in the United States could be subject to a branch profits tax imposed by section 884 of the Code, (iv) passive investment income, including Interest Component and Certificate Interest Distributions seemed in respect of Revenue Obligations, may be subject to federal income taxation under section 1375 of the Code for Subchapter S corporations that have Subchapter C earnings and profits at the close of the taxable year if greater than 25%of the gross receipts of such Subchapter S corporation is passive investment income, (v) section 86 of the Code requires recipients of certain Social Security and certain Railroad Retirement benefits to take into account, in determining the taxability, of such benefits, Interest Distributions and Certificate Interest Distributions seemed in respect of Revenue Obligations owned by such recipients for federal income tax purposes,and (vi) under section 32(i) of the Code, receipt of investment income, including Interest Components and Certificate Interest Distributions seemed in respect of Revenue Obligations, may disqualify the recipient thereof from obtaining the earned income credit. Special Counsel has expressed no opinion regarding any such other tax consequences. VERIFICATION OF MATHEMATICAL COMPUTATIONS Grant Thornton LLP, a firm of independent arbitrage consultants, will verify the accuracy of (i)mathematical computations concerning the adequacy of the maturing principal amounts of and interest earned on the Federal Securities deposited in the Escrow Fond, together with amounts held as cash therein, to provide for payment of the redemption prices (including seemed interest) of the Refunded Certificates on the Redemption Date and (ii)certain mathematical computations supporting the conclusion that the Revenue Obligations are not"arbitrage bonds"under the Code,which will be used in part by Special Counsel in concluding that interest on the Interest Components and Certificate Interest Distributions accrued in respect of Revenue Obligations is excluded from gross income for federal income tax purposes under present laws, including applicable provisions of the Code, existing court rulings,regulations and Internal Revenue Service rulings. The report of such independent arbitrage consultants will include the statement that the scope of their engagement was limited to verifying the mathematical accuracy of the computations contained in such schedules provided to them and that they have no obligation to update their report because of events occurring,or data or information coming to their attention, subsequent to the date of their report. 47194378.5 56 CONTINUING DISCLOSURE The District has covenanted for the benefit of holders and beneficial owners of the Revenue Obligations (a)to provide certain financial information and operating data(the"Annual Report")relating to the District and the property in the District not later than eight months after the end of the District's Fiscal Year (which currently would be March 1), commencing with the report for the 2013-14 Fiscal Year, and(b)to provide notices of the occurrence of certain enumerated events. The Annual Report will be filed by the Trustee on behalf of the District, with the Municipal Securities Rulemaking Board. The notices of enumerated events will be filed by the Trustee on behalf of the District with the Municipal Securities Rulemaking Bond. The specific nature of the information to be contained in the Annual Report or the notices of enumerated events is set Forth in the Continuing Disclosure Agreement See APPENDIX D— "FORM OF CONTINUING DISCLOSURE AGREEMENT." These covenants have been made in order to assist the Initial Purchaser in complying with S.E.C. Rule 15c2-12 (the"Rule"). In 2010, the District failed to file certain notices of enumerated events relating to upgrades in the ratings of certain of the District's then outstanding obligations. The District has since filed such enumerated event notices in connection with the rating upgrades on its obligations. Except as described in the preceding two sentences, during the past five years, the District has never failed to comply in all material respects with any previous undertaking with respect to the Rule to provide annual reports or notices of enumerated events. RATINGS The Revenue Obligations will be rated " " by Standard & Poor's Financial Services LLC ("S&P")and—by Fitch Ratings("Fitch"). Such ratings reflect only the views of the rating agencies, and do not constitute a recommendation to buy, sell or hold the Revenue Obligations. Explanation of the significance of such ratings may be obtained only from the respective organizations at: Standard & Poor's Ratings Services, 55 Water Street, New York, New York 10041 and Fitch Ratings, One State Street Plaza,New York,New York 10004. There is no assurance that any such ratings will continue for any given period of time or that they will not be revised downward or withdrawn entirely by the respective rating agencies, if in the judgment of any such rating agency circumstances so warrant. Any such downward revision or withdrawal of such ratings may have an adverse effect on the market price of the Revenue Obligations. PURCHASE AND REOFFERING (the "Initial Purchaser") has purchased the Revenue Obligations from the District at a competitive sale for a purchase price of$ (representing the aggregate principal amount of the Revenue Obligations, plus a premium of $ , and less an Initial Purchaser's discount of$ ). The public offering prices may be changed from time to time by the Initial Purchaser. The Initial Purchaser may offer and sell Revenue Obligations to certain dealers and others at prices lower than the offering prices shown on the inside cover page hereof. 47194378.5 57 MISCELLANEOUS Included herein are brief summaries of certain documents and reports, which summaries do not purport to be complete or definitive, and reference is made to such documents and reports for full and complete statements of the contents thereof Any statements in this Official Statement involving matters of opinion, whether or not expressly so stated, are intended as such and not as representations of fact. This Official Statement is not to be construed as a contract or agreement between the District and the purchasers or Owners of any of the Revenue Obligations. The execution and delivery of this Official Statement has been duly authorized by the District. ORANGE COUNTY SANITATION DISTRICT By: Chair of the Board of Directors 47194378.5 58 APPENDIX A COMPREHENSIVE ANNUAL FINANCIAL REPORT OF THE ORANGE COUNTY SANITATION DISTRICT FOR FISCAL YEAR ENDED JUNE 30,2014 47194378.5 A-1 APPENDIX B THE COUNTY OF ORANGE-ECONOMIC AND DEMOGRAPHIC INFORMATION 47194378.5 APPENDIX C SUMMARY OF PRINCIPAL LEGAL DOCUMENTS 47194378.5 C-1 APPENDIX D FORM OF CONTINUING DISCLOSURE AGREEMENT THIS CONTINUING DISCLOSURE AGREEMENT (this "Disclosure Agreement'),dated as of February 1, 2015, is by and between the ORANGE COUNTY SANITATION DISTRICT, a county sanitation district organized and existing under the laws of the State of California (the "District"), and DIGITAL ASSURANCE CERTIFICATION LLC,as Dissemination Agent(the"Dissemination Agent'). WITNESSETH: WHEREAS, the District has caused to be executed and delivered the Orange County Sanitation District Wastewater Refunding Revenue Obligations, Series 2015A (the `Revenue Obligations"), evidencing principal in the aggregate amount of$ ,pursuant to a Trust Agreement,dated as of the date hereof(the"Trust Agreement'),by and among U.S. Bank National Association, as trustee(the "Trustee"), the Orange County Sanitation District Financing Corporation (the "Corporation") and the District;and WHEREAS, this Disclosure Agreement is being executed and delivered by the District and the Dissemination Agent for the benefit of the owners and beneficial owners of the Revenue Obligations and in order to assist the purchaser of the Revenue Obligations in complying with the Rule (as defined herein); NOW, THEREFORE, for and in consideration of the mutual promises and covenants herein contained,the parties hereto agree as follows: Section 1. Definitions. Capitalized undefined terms used herein shall have the meanings ascribed thereto in the Trust Agreement or, if not defined therein, in the Master Agreement, dated as of August 1, 2000, by and between the District and the Corporation. In addition, the following capitalized terms shall have the following meanings: "Annual Report" means any Annual Report provided by the District pursuant to, and as described in, Sections 2 and 3 hereof. "Annual Report Date" means the date in each year that is eight months after the end of the Fiscal Year,which date,as of the date of this Disclosure Agreement, is March 1. "Disclosure Representative" means the Director of Finance and Administrative Services of the District, or such other officer or employee of the District as the District shall designate in writing to the Dissemination Agent and the Trustee from time to time. "Dissemination Agent" means an entity selected and retained by the District, or any successor thereto selected by the District The initial Dissemination Agent shall be Digital Assurance Certification LLC. "EMMA" shall mean Electronic Municipal Market Access system, maintained on the internet at htto://emma.msrb.ore by the MSRB. D-1 "Fiscal Year" shall mean the period beginning on July 1 of each year and ending on the next succeeding June 30, or any twelve-month or fifty-two week period hereafter selected by the District,with notice of such selection or change in fiscal year to be provided as set forth herein. "Listed Events" means any of the events listed in Section 4 hereof and any other event legally required to be reported pursuant to the Rule. "MSRB" means the Municipal Securities Rulemaking Board established pursuant to Section 1513(b)(1) of the Securities Exchange Act of 1934 or any other entity designated or authorized by the SEC to receive reports pursuant to the Rule. Until otherwise designated by the MSRB or the SEC, filings with the MSRB are to be made through EMMA. "Official Statement" means the Official Statement, dated , 2015, relating to the Revenue Obligations. "Participating Underwriter"means any of the original purchaser(s) of the Revenue Obligations required to comply with the Rule in connection with the offering of the Revenue Obligations. "Repository"means,until otherwise designated by the SEC,EMMA. "Rule" means Rule 15c2-12 adopted by the SEC under the Securities Exchange Act of 1934, as the same has been or may be amended from time to time. "SEC" shall mean the United States Securities and Exchange Commission. Section 2. Provision of Annual Reports. (a) The District shall provide, or shall cause the Dissemination Agent to provide, to MSRB, through EMMA, not later than 15 days prior to the Annual Report Date, an Annual Report which is consistent with the requirements of Section 3 of this Disclosure Agreement. The Annual Report must be submitted in electronic format, accompanied by such identifying information as provided by the MSRB. The Annual Report may be submitted as a single document or as separate documents comprising a package, and may include by reference other information as provided in Section 3 of this Disclosure Agreement. Not later than 15 Business Days prior to such date, the District shall provide the Annual Report to the Dissemination Agent. If the Fiscal Year changes for the District, the District shall give notice of such change in the manner provided under Section 4(e)hereof. (b) If by 15 Business Days prior to the date specified in subsection(a) for providing the Annual Report to the MSRB, through EMMA, the Dissemination Agent has not received a copy of the Annual Report the Dissemination Agent shall contact the District to determine if the District is in compliance with subsection(a). The District shall provide a written certification with each Annual Report famished to the Dissemination Agent to the effect that such Annual Report constitutes the Annual Report required to be famished by it hereunder. The Dissemination Agent may conclusively rely upon such certification of the District and shall have no duty or obligation to review such Annual Report. (c) If the Dissemination Agent is unable to verify that an Annual Report has been provided to the MSRB by the date required in subsection(a), the Dissemination Agent shall send a notice to the MSRB in substantially the form attached as Exhibit A. D-2 (d) The Dissemination Agent shall: (1) determine the electronic filing address of, and then-current procedures for submitting Annual Reports to, the MSRB each year prior to the date for providing the Annual Report; and (ii) (if the Dissemination Agent is other than the Trustee), to the extent appropriate information is available to it,file a report with the Authority certifying that the Annual Report has been provided pursuant to this Disclosure Agreement, stating the date it was provided. Section 3. Content of Annual Reports. The District's Annual Report shall contain or incorporate by reference the following: (a) Audited financial statements prepared in accordance with generally accepted accounting principles as promulgated to apply to governmental entities from time to time by the Governmental Accounting Standards Board. If the District's audited financial statements are not available by the Annual Report Date,the Annual Report shall contain unaudited financial statements in a format similar to the financial statements contained in the Official Statement, and the audited financial statements shall be filed in the same manner as the Annual Report when they become available. (b) The principal evidenced by the Revenue Obligations Outstanding as of the June 30 next preceding the Annual Report Date and the principal amount of other Senior Obligations outstanding as of the June 30 next preceding the Annual Report Date. (c) Updated information (not to include projections), for the Fiscal Year ended the June 30 next preceding the Annual Report Date, comparable to the information contained in the Official Statement in Table Nos. 2,4, 6 (only with respect to information on 6 under the headings Fiscal Year and Sewer Service Charge), 8,9, 10, 11, 12, 13, 14 and 16. (d) In addition to any of the information expressly required to be provided under subsections (a), (b) and (c) of this Section, the District shall provide such further information, if any, as may be necessary to make the specifically required statements, in the light of the circumstances under which they are made,not misleading. Any or all of the items listed above may be included by specific reference to other documents, including official statements of debt issues with respect to which the District is an"obligated person" (as defined by the Rule), which are available to the public on EMMA or filed with the SEC. The District shall clearly identify each such document to be included by reference. Section 4. Reportine of Sienificant Events. (a) Pursuant to the provisions of this Section 4, the District shall give, or cause to be given, notice of the occurrence of any of the following events with respect to the Revenue Obligations, in a timely manner not more than ten(10)Business Days after the event: (1) principal and interest payment delinquencies; (2) defeasances; (3) tender offers; D-3 (4) rating changes; (5) adverse tax opinions or the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax- status of the Revenue Obligations; (6) unscheduled draws on the debt service reserves reflecting financial difficulties; (7) unscheduled draws on credit enhancements reflecting financial difficulties; (8) substitution of credit or liquidity providers or their failure to perform; or (9) bankruptcy,insolvency,receivership or similar proceedings. For these purposes,any event described in the immediately preceding paragraph(9)is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent, or similar officer for the District in a proceeding under the United States Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the District, or if such jurisdiction has been assumed by leaving the existing governing body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement, or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the District. (b) Pursuant to the provisions of this Section 4, the District shall give, or cause to be given, notice of the occurrence of any of the following events with respect to the Revenue Obligations, if material: (1) mergers, consolidations,acquisitions,the sale of all or substantially all of the assets of the obligated persons or their termination; (2) appointment of a successor or additional Trustee or the change of the time of a Trustee; (3) nonpayment related defaults; (4) modifications to the rights of Owners; (5) a notices of prepayment; or (6) release, substitution or sale of property securing repayment of the Revenue Obligations. (c) Whenever the District obtains knowledge of the occurrence of a Listed Event, described in subsection(b)of this Section 4,the District shall as soon as possible determine if such event would be material under applicable federal securities law. D-4 (d) If the District determines that knowledge of the occurrence of a Listed Event described in subsection(b) of this Section 4 would be material under applicable federal securities law, the District shall promptly notify the Dissemination Agent in writing and instruct the Dissemination Agent to report the occurrence to the Repository in a timely manner not more than ten(10)Business Days after the event. (e) If the Dissemination Agent has been instructed by the District to report the occurrence of a Listed Event,the Dissemination Agent shall file a notice of such occurrence with the MSRB. Section 5. Filines with the MSRB. All information, operating data, financial statements, notices and other documents provided to the MSRB in accordance with this Disclosure Agreement shall be provided in an electronic format prescribed by the MSRB and shall be accompanied by identifying information as prescribed by the MSRB. Section 6. Termination of Reporting Obligation. The District's obligations under this Disclosure Agreement shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Revenue Obligations. If such termination occurs prior to the final maturity of the Revenue Obligations, the District shall give notice of such termination in the same manner as for a Listed Event under Section 4 hereof. Section 7. Dissemination Agent. The District may, from time to time, appoint or engage another Dissemination Agent to assist it in carrying out its obligations under this Disclosure Agreement, and may discharge any such Dissemination Agent,with or without appointing a successor Dissemination Agent If at any time there is not any other designated Dissemination Agent, the Trustee, if the Trustee agrees to act, shall be the Dissemination Agent; provided it shall receive written notice of such designation at the time of such designation. Notwithstanding any other provision to this Disclosure Agreement to the contrary,the District may provide any Annual Report to Beneficial Owners by means of posting such Annual Report on an internet site that provides open access to Beneficial Owners. Section 8. Amendment: Waiver. Notwithstanding any other provision of this Disclosure Agreement, the District may amend this Disclosure Agreement, provided no amendment increasing or affecting the obligations or duties of the Dissemination Agent shall be made without the consent of such party, and any provision of this Disclosure Agreement may be waived if such amendment or waiver is supported by an opinion of counsel expert in federal securities laws acceptable to the District and the Dissemination Agent to the effect that such amendment or waiver would not, in and of itself, cause the undertakings herein to violate the Rule if such amendment or waiver had been effective on the date hereof but taking into account any subsequent change in or official interpretation of the Rule. Section 9. Additional Information. Nothing in this Disclosure Agreement shall be deemed to prevent the District from disseminating any other information, using the means of dissemination set forth in this Disclosure Agreement or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure Agreement. If the District chooses to include any information in any Annual Report or notice of occurrence of a Listed Event in addition to that which is specifically required by this Disclosure Agreement, the District shall have no obligation under this Disclosure Agreement to update such information or include it in any future Annual Report or notice of occurrence of a Listed Event. Section 10. Default. In the event of a failure of the District or the Dissemination Agent to comply with any provision of this Disclosure Agreement, the Trustee, at the written direction of any Participating Underwriter or the holders of at least 25% of the aggregate amount of principal evidenced by Outstanding Revenue Obligations and upon being indemnified to its reasonable satisfaction, shall, or any holder or beneficial owner of the Revenue Obligations may, take such actions as may be necessary D-5 and appropriate, including seeking mandate or specific performance by court order, to cause the District, Trustee or the Dissemination Agent, as the case may be, to comply with its obligations under this Disclosure Agreement. A default under this Disclosure Agreement shall not be deemed an Event of Default under the Trust Agreement, and the sole remedy under this Disclosure Agreement in the event of any failure of the District, the Trustee or the Dissemination Agent to comply with this Disclosure Agreement shall be an action to compel performance. Section 11. Duties. Immunities and Liabilities of Trustee and Dissemination Agent. Article VIII of the Trust Agreement is hereby made applicable to this Disclosure Agreement as if this Disclosure Agreement were (solely for this purpose) contained in the Trust Agreement. Neither the Trustee nor the Dissemination Agent shall be responsible for the Form or content of any Annual Report or notice of Listed Event. The Dissemination Agent shall receive reasonable compensation for its services provided under this Disclosure Agreement. The Dissemination Agent (if other than the Trustee or the Trustee in its capacity as Dissemination Agent) shall have only such duties as are specifically set forth in this Disclosure Agreement, and the District agrees to indemnify and save the Dissemination Agent, its officers, directors, employees and agents,harmless against any loss, expense and liabilities which it may incur arising out of or in the exercise or performance of its powers and duties hereunder, including the costs and expenses (including attorney's fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent's negligence or willful misconduct. The obligations of the District under this Section shall survive resignation or removal of the Dissemination Agent and payment of the Revenue Obligations. Section 12. Beneficiaries. This Disclosure Agreement shall more solely to the benefit of the District, the Trustee, the Dissemination Agent, the Participating Underwriter and holders and beneficial owners from time to time of the Revenue Obligations, and shall create no rights in any other person or entity. Section 13. Counterparts. This Disclosure Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. D-6 IN WITNESS WHEREOF,the parties hereto have executed this Disclosure Agreement as of the date first above written. ORANGE COUNTY SANITATION DISTRICT By: Lorenzo Tyner Director of Finance and Administrative Services DIGITAL ASSURANCE CERTIFICATION LLC, as Dissemination Agent By: Authorized Representative Acknowledged and Accepted: U.S.BANK NATIONAL ASSOCIATION, as Trustee By: Authorized Officer D-7 EXHIBIT A NOTICE TO MUNICIPAL SECURITIES RULEMAKING BOARD OF FAILURE TO FILE ANNUAL REPORT Name of Obligor: Orange County Sanitation District Name of Issue: Orange County Sanitation District Wastewater Refunding Revenue Obligations, Series 2015A Date of Execution and Delivery: ,2015 NOTICE IS HEREBY GIVEN that the Orange County Sanitation District(the"District')has not provided an Annual Report with respect to the above-captioned Revenue Obligations as required by Section 6.09 of the Trust Agreement, dated as of February 1, 2015, by and among U.S. Bank National Association, as Trustee, the Orange County Sanitation District Financing Corporation and the District. [The District anticipates that the Annual Report will be filed by .] Dated: 20_ ORANGE COUNTY SANITATION DISTRICT By Title: cc: Trustee Dissemination Agent 47194308.5 D-8 APPENDIX E BOOK-ENTRY SYSTEM The description that follows of the procedures and recordkeeping with respect to beneficial ownership interests in the Revenue Obligations, payment of principal and interest evidenced by the Revenue Obligations to Participants or Beneficial Owners, confirmation and transfer of beneficial ownership interests in the Revenue Obligations, and other Revenue Obligation-related transactions by and between DTC, Participants and Beneficial Owners, is based on information furnished by DTC which the District and the Corporation each believes to be reliable, but the District and the Corporation take no responsibility for the completeness or accuracy thereof. The Depository Trust Company—Book-Entry System The Depository Trust Company("DTC"),New York,NY,will act as securities depository for the securities (the "Revenue Obligations"). The Revenue Obligations will be issued as fully-registered securities registered in the name of Cede& Co. (DTC's partnership nominee)or such other name as may be requested by an authorized representative of DTC. One fully-registered certificate will be issued for the Revenue Obligations in the aggregate principal amount of such issue, and will be deposited with DTC. DTC is a limited-purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC's participants ("Direct Participants") deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities,through electronic computerized book-entry transfers and pledges between Direct Participants' accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations,and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation ("DTCC"). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers,banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly(`Indirect Participants"). DTC has a Standard&Poor's rating of"AA+." The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com. The information on such website is not incorporated herein by such reference or otherwise. Purchases of Revenue Obligations under the DTC system must be made by or through Direct Participants, which will receive a credit for the Revenue Obligations on DTC's records. The ownership interest of each actual purchaser of each Revenue Obligation (Beneficial Owner") is in tam to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Revenue Obligations are to be accomplished by entries made on 47194378.5 E-1 the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in the Revenue Obligations, except in the event that use of the book-entry system for the Revenue Obligations is discontinued. To facilitate subsequent transfers, all Revenue Obligations deposited by Direct Participants with DTC are registered in the time of DTC's partnership nominee,Cede&Co. or such other name as may be requested by an authorized representative of DTC. The deposit of Revenue Obligations with DTC and their registration in the time of Cede&Co. or such other nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Revenue Obligations; DTC's records reflect only the identity of the Direct Participants to whose accounts such Revenue Obligations are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of Revenue Obligations may wish to take certain steps to augment transmission to them of notices of significant events with respect to the Revenue Obligations, such as prepayments, tenders, defaults, and proposed amendments to the security documents. For example, Beneficial Owners of Revenue Obligations may wish to ascertain that the nominee holding the Revenue Obligations for their benefit has agreed to obtain and transmit notices to Beneficial Owners, in the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of the notices be provided directly to them. Prepayment notices shall be sent to DTC. If less than all of the Revenue Obligations within an issue are being prepaid, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be prepaid. Neither DTC nor Cede &Co. (nor such other DTC nominee)will consent or vote with respect to the Revenue Obligations unless authorized by a Direct Participant in accordance with DTC's MMI Procedures. Under its usual procedures,DTC mails an Omnibus Proxy to the District as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts the Revenue Obligations are credited on the record date(identified in a listing attached to the Omnibus Proxy). Prepayments with respect to the Revenue Obligations will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC's practice is to credit Direct Participants' accounts, upon DTC's receipt of funds and corresponding detail information from the District or the Trustee on payable date in accordance with their respective holdings shown on DTC's records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participant and not of DTC, nor its nominee, the Trustee, or the District, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of prepayment proceeds,distributions, and dividend payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the District or the Trustee, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants. 47194378.5 E-2 DTC may discontinue providing its services w securities depository with respect to the Revenue Obligations at any time by giving reasonable notice to the District or the Trustee. Under such circumstances, in the event that a successor securities depository is not obtained,Revenue Obligations are required to be printed and delivered. The District may decide to discontinue use of the system of book-entry-only transfers through DTC (or a successor securities depository). In that event, Revenue Obligations will be printed and delivered to DTC. The information in this section concerning DTC and DTC's book-entry system has been obtained from sources that the District believes to be reliable, but the District takes no responsibility for the accuracy thereof. Discontinuance of DTC Services In the event (i)DTC determines not to continue to act as securities depository for the Revenue Obligations, (ii)DTC shall no longer act and give notice to the Trustee of such determination or(iii)the District determines that it is in the best interest of the Beneficial Owners that they be able to obtain Revenue Obligations and delivers a written certificate to the Trustee to that effect, DTC services will be discontinued. If the District determines to replace DTC with another qualified securities depository, the District shall prepare or direct the preparation of a new single, separate, fully registered Revenue Obligation for each of the maturities of the Revenue Obligations,registered in the name of such successor or substitute qualified securities depository or its nominee. If the District fails to identify another qualified securities depository to replace DTC then the Revenue Obligations shall no longer be restricted to being registered in the certificate registration books in the time of Cede&Co.,but shall be registered in such names as are requested in a certificate of the District, in accordance with the Trust Agreement. All Revenue Obligations may be presented for transfer by the Owner thereof, in person or by his attorney duly authorized in writing,at the Principal Office of the Trustee,on the books required to be kept by the Trustee pursuant to the provisions of the Trust Agreement, upon surrender of such Certifications for cancellation accompanied by delivery of a duly executed written instrument of transfer in a form acceptable to the Trustee. The Tmstee may treat the Owner of any Revenue Obligation as the absolute owner of such Revenue Obligation for all purposes, whether or not such Revenue Obligation shall be overdue, and the Trustee shall not be affected by any knowledge or notice to the contrary;and payment of the interest and principal evidenced by such Revenue Obligation shall be made only to such Owner, which payments shall be valid and effectual to satisfy and discharge the liability evidenced by such Revenue Obligation to the extent of the sum or sums so paid. Whenever any Revenue Obligations shall be surrendered for transfer, the Trustee shall execute and deliver new Revenue Obligations representing the same principal amount in Authorized Denominations. The Trustee shall require the payment of any Owner requesting such transfer of any tax or other governmental charge required to be paid with respect to such transfer. Revenue Obligations may be presented for exchange at the Principal Office of the Trustee for a like aggregate principal meant of Revenue Obligations of other Authorized Denominations. The Trustee shall require the payment by the Owner requesting such exchange of any tax or other governmental charge required to be paid with respect to such exchange. The Trustee shall not be required to transfer or exchange any Revenue Obligation during the period in which the Trustee is selecting Revenue Obligations for prepayment, nor shall the Trustee be required to transfer or exchange any Revenue Obligation or portion thereof selected for prepayment from and after the date of mailing the notice of prepayment thereof. 47194378.5 E-3 APPENDIX F FORM OF APPROVING OPINION OF SPECIAL COUNSEL Upon the execution and delivery of the Revenue Obligations, Fulbright& Jaworski LLP, a member of Norton Rose Fulbright, Los Angeles, California, Special Counsel to the District, will render its final approving opinion with respect to the Revenue Obligations in substantially the following form: [Date of Delivery] Orange County Sanitation District 10844 Ellis Avenue Fountain Valley,California 92708-7018 Orange County Sanitation District Wastewater Refunding Revenue Obligations Series 2015A Ladies and Gentlemen: We have acted as Special Counsel in connection with the $ aggregate principal amount of Orange County Sanitation District Wastewater Refunding Revenue Obligations, Series 2015A (the "Revenue Obligations") which are certificates of participation that evidence direct, fractional undivided interests of the Owners thereof in the installment payments (the "Installment Payments"), and the interest thereon, to be made by the Orange County Sanitation District (the"District') pursuant to the Installment Purchase Agreement, dated as of February 1, 2015 (the "Installment Purchase Agreement"), by and between the District and the Orange County Sanitation District Financing Corporation (the "Corporation"). Pursuant to the Master Agreement for District Obligations, dated as of August 1, 2000 (the "Master Agreement"), by and between the District and the Corporation, the District has established conditions and terns upon which obligations such as the Installment Payments, and the interest thereon, will be incurred and secured. Installment Payments under the Installment Purchase Agreement are payable solely from Net Revenues as provided in the Installment Purchase Agreement, consisting primarily of all income and revenue received by the District from the operation or ownership of the Wastewater System of the District (the "Wastewater System") remaining after payment of Maintenance and Operation Costs. Capitalized terns used and not otherwise defined herein shall have the meanings ascribed to such terns in the Installment Purchase Agreement. The Revenue Obligations are to be executed and delivered pursuant to a Trust Agreement, dated as of February 1, 2015 (the "Trust Agreement"), by and among the District, the Corporation and U.S. Bank National Association,as trustee(the"Trustee"). Proceeds from the sale of the Revenue Obligations will be used to (i)purchase and retire all of the District's outstanding Certificates of Participation, Series 2007B and (it)pay the costs incurred in connection with the execution and delivery of the Revenue Obligations. 47194378.5 F-1 As Special Counsel,we have examined copies certified to us as being true and complete copies of the Master Agreement, the Trust Agreement and the Installment Purchase Agreement and the proceedings of the District in connection with the execution and delivery of the Revenue Obligations. We have also examined such certificates of officers of the District, the Corporation and others as we have considered necessary for the purposes of this opinion. Based upon the foregoing,we are of the opinion that: I. The Master Agreement, the Installment Purchase Agreement and the Trust Agreement each has been duly and validly authorized,executed and delivered by the District and, assuming the Master Agreement, the Installment Purchase Agreement and the Trust Agreement each constitutes the legally valid and binding obligation of the other parties thereto, each constitutes the legally valid and binding obligation of the District, enforceable against the District in accordance with its respective terms. 2. The obligation of the District to pay the Installment Payments, and the interest thereon, and other payments required to be made by it under the Installment Purchase Agreement is a special obligation of the District payable, in the manner provided in the Installment Purchase Agreement, solely from Net Revenues and other funds provided for in the Installment Purchase Agreement lawfully available therefor. 3. Assuming due authorization, execution and delivery of the Trust Agreement and the Revenue Obligations by the Trustee, the Revenue Obligations me entitled to the benefits of the Trust Agreement. 4. Under existing statutes, regulations, rulings and court decisions, and, assuming compliance with the covenants mentioned below, the component of each Installment Payment designated as "Interest on Installment Payment" in Section 3.02 of the Installment Purchase Agreement (each, an "Interest Component"), and the allocable portion thereof distributable in respect of any Revenue Obligation (the"Certificate Interest Distribution"), is excluded pursuant to section 103(a)of the Internal Revenue Code of 1986(the"Code")from the gross income of the owners thereof for federal income tax purposes. We are further of the opinion that under existing statutes, regulations, rulings and court decisions, the Installment Purchase Agreement is not a "specified private activity bond" within the meaning of section 57(a)(5) of the Code and, therefore, that the Interest Components and the Certificate Interest Distributions will not be treated as items of tax preference for purposes of computing the alternative minimum tax imposed by section 55 of the Code.Receipt or accrual of an Interest Component allocable to,or Certificate Interest Distribution in respect of a Revenue Obligation owned by, a corporation may affect the computation of the alternative minimum taxable income of that corporation. A corporation's alternative minimum taxable income is the basis upon which the alternative minimum tax imposed by section 55 of the Code is computed. We me further of the opinion that under existing laws of the State of California the Interest Component allocable to and the Certificate Interest Distributions in respect of a Revenue Obligation are exempt from personal income taxes of the State of California under present state law. Pursuant to the Installment Purchase Agreement and in the Tax Certificate Pertaining to Arbitrage and Other Matters under Sections 103 and 141-150 of the Internal Revenue Code of 1986,to be delivered by the District in connection with the execution and delivery of the Revenue Obligations, the District has made representations relevant to the determination of, and has undertaken certain covenants regarding or affecting,the exclusion of the Interest Component,and the Certificate Interest Distribution, from the gross income of the owners thereof for federal 47194378.5 F-2 income tax purposes. In reaching the opinions described in the immediately preceding paragraph, we have assumed the accuracy of such representations and the present and future compliance by the District with its covenants. Except as stated in the second preceding paragraph, we express no opinion as to any federal or state tax consequence of the ownership or disposition of the Installment Purchase Agreement or the Revenue Obligations. Furthermore, we express no opinion as to any federal, state or local tax law consequence with respect to the Installment Purchase Agreement or the Revenue Obligations,or of the Interest Components or Certificate Interest Distributions in respect thereof, if any action is taken with respect to the Installment Purchase Agreement, or the use or investment of the proceeds thereof, the Master Agreement, the Trust Agreement, the Revenue Obligations permitted or predicated upon the advice or approval of other counsel. The rights of the owners of the Revenue Obligations and the enforceability of the Revenue Obligations,the Master Agreement,the Trust Agreement and the Installment Purchase Agreement may be subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' rights heretofore or hereafter enacted and may also be subject to the exercise of judicial discretion in appropriate cases. The enforceability of the Revenue Obligations, the Master Agreement, the Trust Agreement and the Installment Purchase Agreement is subject to the effect of general principles of equity, including, without limitation, concepts of materiality, reasonableness, good faith and fair dealing, to the possible unavailability of specific performance or injunctive relief,regardless of whether considered in a proceeding in equity or at law, and to the limitations on legal remedies against governmental entities in California. No opinion is expressed herein on the accuracy, completeness or fairness of the Official Statement or other offering material relating to the Revenue Obligations. Our opinions are based on existing law, which is subject to change. Such opinions are further based on our knowledge of facts as of the date hereof. We assume no duty to update or supplement our opinions to reflect any facts or circumstances that may hereafter come to our attention or to reflect any changes in any law that may hereafter occur or become effective. Moreover, our opinions are not a guarantee of result; rather, such opinions represent our legal judgment based upon our review of existing law that we deem relevant to such opinions and in reliance upon the representations and covenants referenced above. Respectfully submitted, 47194378.5 F-3 DRAFT OF 12/01/14 OFFICIAL NOTICE INVITING BIDS ORANGE COUNTY SANITATION DISTRICT WASTEWATER REFUNDING REVENUE OBLIGATIONS SERIES 2015A (Book-Entry-Only) NOTICE IS HEREBY GIVEN that bids will be received by the Orange County Sanitation District (the "District") for the purchase of $ original principal amount of Orange County Sanitation District Wastewater Refunding Revenue Obligations, Series 2015A Evidencing Direct, Fractional Undivided Interests of the Owners Thereof in Installment Payments to be Made by the Orange County Sanitation District to the Orange County Sanitation District Financing Corporation(the"Revenue Obligations"). Bids for less than all of the Revenue Obligations will not be accepted. The bids will be received in the form, in the manner and up to the time specified below (unless postponed as described herein): Date: January_,2015 11,00 a.m.,New York Time Electronic Bids' Electronic proposals may be submitted to Ipreo, at wwwnewissuehome.i-deal.com and the Parity electronic bid submission system (the "Electronic Service"). The Electronic Service will act as agent of the bidder and not of the District in connection with the submission of bids and the District assumes no responsibility or liability for bids submitted through the Electronic Service. See `Information Regarding Electronic Proposals"herein. No facsimile,hand delivery or sealed bids will be accepted. Terms of the Revenue Obligations The Preliminary Official Statement for the Revenue Obligations, dated January . 2015, including the cover page and all appendices thereto (the "Preliminary Official Statement"), provides certain information concerning the sale and delivery of$ 'aggregate principal amount of the Revenue Obligations, which are certificates of participation evidencing direct, undivided fractional interests in the Installment Payments (the `Installment Payments"), and the interest thereon, payable by the District pursuant to the Installment Pmchase Agreement, dated as of February 1, 2015 (the `Installment Purchase Agreement"), by and between the District and the Orange County Sanitation District Financing Corporation (the "Corporation"). Each bidder most have obtained and reviewed the Preliminary Official Statement prior to bidding for the Revenue Obligations. This Official Notice Inviting Bids, including all exhibits and attachments, contains certain information for quick reference only, is not a summary of the issue and governs only the terms of the sale of, bidding for and closing procedures with respect to the Revenue Obligations. Bidders must read the entire Preliminary Official Statement to obtain information essential to making an informed investment decision. Preliminary,subject to change. 56089901.2 11411481 Pursuant to the Master Agreement for District Obligations, dated as of August 1, 2000 (the "Master Agreement'), by and between the District and the Corporation, the District has established and declared the conditions and terms upon which obligations such as the Installment Purchase Agreement, and the Installment Payments and the interest thereon, will be incurred and secured. Installment Payments under the Installment Purchase Agreement are payable solely from Net Revenues, as provided in the Master Agreement and the Installment Purchase Agreement, consisting primarily of all income and revenue received by the District from the operation or ownership of the Wastewater System of the District (the"Wastewater System")remaining after payment of Maintenance and Operation Costs. The Issue The proceeds from the sale of the Revenue Obligations will be used to: (i)defease and prepay a portion of the District's outstanding Certificates of Participation, Series 2007B (the "Prior Certificates') and(ii)pay costs of execution and delivery of the Revenue Obligations. The Revenue Obligations are to be executed and delivered pursuant to a Trust Agreement, dated as of February 1, 2015 (the "Trust Agreement'), by and among the District, the Corporation and U.S. Bank National Association, as trustee (the`Trustee"). Capitalized terms not defined herein shall have the same definitions as used in the Trust Agreement or the Master Agreement. Authorization On December 17, 2014,the District and the Corporation authorized the execution and delivery of the Installment Purchase Agreement,the Trust Agreement and the Revenue Obligations. Outstanding Senior Obligations The District has outstanding Senior Obligations payable on a parity with the Installment Payments under the Installment Purchase Agreement. The term"Existing Senior Obligations"as used in the Preliminary Official Statement refers to the 2007A Installment Purchase Agreement, the 2007B Installment Purchase Agreement, the 2008B Installment Purchase Agreement, the 2009A Installment Purchase Agreement, the 2010A Installment Purchase Agreement, the 2010C Installment Purchase Agreement, the 201 IA Installment Purchase Agreement,the 2012A Installment Purchase Agreement, the 2012B Installment Purchase Agreement, the 2014A Installment Purchase Agreement and the 2014B Installment Purchase Agreement. Security and Source of Payments The Revenue Obligations are certificates of participation which evidence direct, undivided fractional interests in the Installment Payments, and the interest thereon, paid by the District pursuant to the Installment Purchase Agreement. The obligation of the District to pay the Installment Payments and the interest thereon and other payments required to be made by it under the Installment Purchase Agreement is a special obligation of the District payable, in the manner provided under the Installment Purchase Agreement, solely from Net Revenues and other funds as provided in the Installment Purchase Agreement. Net Revenues generally consist of all income and revenue received by the District from the operation or ownership of the Wastewater System remaining after payment of Maintenance and Operation Costs,all as further provided in the Master Agreement. The District's obligation to make Installment Payments from Net Revenues is on a parity with the District's obligation to make payments with respect to its other outstanding obligations described as Senior Obligations and all Reimbursement Obligations, if any, with respect to Senior Obligations, as provided in the Master Agreement. The Installment Purchase Agreement constitutes a Senior Obligation 56089901z 2 and is subject to the provisions of the Master Agreement and is afforded all of the advantages, benefits, interests and security for Senior Obligations pursuant to the Master Agreement Pursuant to the Master Agreement, the District pledges all Net Revenues to the payment of the Senior Obligations and Reimbursement Obligations with respect to Senior Obligations,and the Net Revenues will not be used for any other purpose while any of the Senior Obligations or Reimbursement Obligations with respect to Senior Obligations remain unpaid; provided, however, that out of the Net Revenues there may be apportioned such sums for such purposes as are expressly permitted by the Master Agreement. This pledge constitutes a first lien on the Net Revenues for the payment of the Senior Obligations and Reimbursement Obligations with respect to Senior Obligations. The term Senior Obligations, generally means all revenue bonds or notes(including bond anticipation notes and commercial paper)of the District authorized, executed,issued and delivered under and pursuant to applicable law, the Installment Purchase Agreement and all other contracts (including financial contracts) or leases of the District authorized and executed by the District under and pursuant to applicable law, the installment, lease or other payments which are, in accordance with the provisions of the Master Agreement, payable from Net Revenues on a parity with the payments under the Master Agreement. The District may at any time incur Subordinate Obligations; provided, however, that prior to incurring such Subordinate Obligations,the District will have determined that the incurrence thereof will not materially adversely affect the District's ability to comply with the requirements of the Master Agreement The District may at any time incur Reimbursement Obligations with respect to Subordinate Obligations. Currently, there are no Subordinate Obligations outstanding. For a description of the District's outstanding Senior Obligations, see "FINANCIAL OBLIGATIONS— Existing Indebtedness" in the Preliminary Official Statement. The District may, in connection with the incurrence of Subordinate Obligations, pledge Net Revenues to the payment of Subordinate Obligations and Reimbursement Obligations with respect to Subordinate Obligations; provided, however, that such pledge, and any lien created thereby, shall be junior and subordinate to the pledge of, and lien on,Net Revenues for the payment of Senior Obligations and Reimbursement Obligations with respect to Senior Obligations. Pursuant to the Master Agreement, the District is required, to the extent permitted by law, to fix, prescribe and collect fees and charges for the services and facilities of the Wastewater System which will be at least sufficient to yield during each Fiscal Year(a)Net Revenues equal to 125% of Debt Service on Senior Obligations for such Fiscal Year and (b)Net Operating Revenues equal to 100% of Debt Service on all Obligations for such Fiscal Year. The District may make adjustments from time to time in such fees and charges and may make such classification thereof as it deems necessary,but shall not reduce the fees and charges then in effect unless the Revenues and Net Revenues from such reduced fees and charges will at all times be sufficient to meet the requirements of the Master Agreement. See "SECURITY AND SOURCES OF PAYMENT FOR THE REVENUE OBLIGATIONS — Rate Covenant"in the Preliminary Official Statement. Additional Obligations In addition to the Existing Senior Obligations, the District may at any time incur Obligations payable on a parity or on a subordinate basis to the payment by the District of the Installment Payments upon satisfaction of conditions provided in the Master Agreement. No Obligations payable on such a subordinate basis are currently outstanding. See "SECURITY AND SOURCES OF PAYMENT FOR THE REVENUE OBLIGATIONS Limitations on Issuance of Additional Obligations" in the Preliminary Official Statement 56089901.2 3 Book-Entry-Only The Revenue Obligations will be executed and delivered in the form of fully registered certificates payable in lawful money of the United States of America. The Revenue Obligations will be initially delivered only in book-entry form and will be registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York ("DTC'), which will act as securities depository for the Revenue Obligations. Individual purchases of the Revenue Obligations will be made in book-entry form only. Purchasers of Revenue Obligations will not receive physical certificates representing their ownership interests in the Revenue Obligations purchased. The Revenue Obligations will be delivered in Authorized Denominations of$5,000 and any integral multiple thereof. Payments of principal and interest evidenced by the Revenue Obligations are payable directly to DTC by the Trustee. Upon receipt of payments of such principal and interest,DTC will in turn distribute such payments to the beneficial owners of the Revenue Obligations. So long as the Revenue Obligations are in the DTC book- entry system, the interest, principal and prepayment premiums, if any, due with respect to the Revenue Obligations will be payable by the Trustee,or its agent,to DTC or its nominee. Principal and Interest Payments The Revenue Obligations will be dated as of the date of initial delivery and will evidence interest from that date(computed on the basis of a 360-day year of twelve 30-day months). Interest evidenced by the Revenue Obligations is payable semiannually on February I and August I of each yen, commencing on August 1, 2015. Payment of principal and prepayment premium, if any, evidenced by the Revenue Obligations will be paid in lawful money of the United States of America upon presentation and surrender thereof at the Principal Office of the Trustee. Principal Amortization The Revenue Obligations will be executed and delivered in the original principal amount of $ 'and will be subject to principal amortization on February I in the years 2028 through 2037 in the amounts set forth in the Official Bid Form. Mandatory Sinking Account Prepayment If the successful bidder designates principal amounts to be combined into a term maturity, such term maturity shall be subject to mandatory sinking account payments commencing on February I of the first year which has been combined to form such term maturity and continuing on February 1 in each year thereafter until the stated maturity date of that term maturity The prepayment price will be equal to the principal amount for such year set forth in the Official Bid Form,plus accrued interest evidenced thereby to the date fixed for prepayment, without premium. The amount of each such prepayment shall be reduced in the event and to the extent that Installment Payments payable on the corresponding Installment Payment Date are prepaid pursuant to provisions of the Installment Purchase Agreement governing optional prepayment. Optional Prepayment The Revenue Obligations with stated Principal Payment Dates prior to February 1, 2026 are not subject to optional prepayment prior to their stated Principal Payment Dates. The Revenue Obligations with stated Principal Payment Dates on or after February 1,2026 are subject to optional prepayment prior Preliminary,subject to change. 56089901.2 4 to their stated Principal Payment Dates, on any date on or after February 1, 2025, in whole or in part, in Authorized Denominations, from and to the extent of prepaid Installment Payments paid pursuant to the Installment Purchase Agreement or from any other source of available funds, any such prepayment to be at a price equal to the principal evidenced by the Revenue Obligations to be prepaid,plus accrued interest evidenced thereby to the date fixed for prepayment,without premium. Selection of Revenue Obligations for Prepayment Whenever less than all the Outstanding Revenue Obligations me to be prepaid on any one date pursuant to provisions of the Trust Agreement with respect to optional prepayment of Revenue Obligations, the Trustee shall select the Revenue Obligations to be prepaid among Revenue Obligations with different Principal Payment Dates as directed in a Written Request of the District. Whenever less than all the Outstanding Revenue Obligations with the same stated Principal Payment Date are to be prepaid on any one date pursuant to the Trust Agreement, the Trustee shall select the Revenue Obligations with such Principal Payment Date to be prepaid as directed in a Written Request of the District, or at the discretion of the District by lot in any manner that the Trustee deems fair and appropriate,which decision shall be final and binding upon the District and the Owners. The Trustee shall promptly notify the District in writing of the numbers of the Revenue Obligations so selected for prepayment on such date. Notice of Prepayment The Trustee shall,at least 20 but not more than 60 days prior to any prepayment date, give notice of prepayment to the respective Owners of Revenue Obligations designated for prepayment by first-class mail,postage prepaid, at their addresses appearing on the registration books maintained by the Trustee as of the close of business on the day before such notice of prepayment is given. The actual receipt by the Owner of any notice of such prepayment shall not be a condition precedent to prepayment, and neither failure to receive such notice nor any defect therein shall affect the validity of the proceedings for the prepayment of such Revenue Obligations or the cessation of interest evidenced thereby on the date fixed for prepayment. Interest Rates,Reoffering Prices,Premium or Discount Bids and Certificate of Initial Purchaser Bidders most bid to purchase all and not part of the Revenue Obligations and must submit their bids on the Official Bid Form. Bidders must specify a rate of interest for each maturity of the Revenue Obligations. The rates of interest must be expressed in multiples of either one-eighth ('s) or one- twentieth ('/is) of one percent (10/6), and no interest rate on Revenue Obligations maturing on or after February 1, 2026 may be less than 5.0%per armour. All Revenue Obligations of the same maturity must evidence interest at the same rate. The successful bidder will, within 30 minutes after being notified of the award of the Revenue Obligations, advise the District of the initial bona fide public reoffering prices of each maturity of the Revenue Obligations on the date of award. The successful bidder will also be required to furnish to the District a certificate("Certificate of Initial Purchaser") in the form of the Certificate of Initial Purchaser attached hereto(with such modifications as may be acceptable to Special Counsel). At any time before or after delivery of the Revenue Obligations to the successful bidder, that successful bidder also may be required by the District or Special Counsel to clarify any discrepancies between the Certificate of Initial Purchaser and publicly available information relating to trades of the Revenue Obligations that might suggest that the initial sale of a substantial portion of any maturity of the Revenue Obligations to the public was at a materially higher price than the price stated for that maturity in the Certificate of Initial Purchaser. 56089901.2 5 Bidders may bid to purchase the Revenue Obligations from the District at a discount or with a premium; however, no bid will be considered if the bid is to purchase Revenue Obligations at an aggregate price less than 111% or more than 120% of the aggregate principal amount of the Revenue Obligations. No bid will be accepted that contemplates the waiver of any interest or other concession by the bidder as substitute for payment in full of the purchase price. Bids that do not conform to the terms of this section may be rejected. See`Right to Reject Bids,Waive Irregularities"below. Adjustment of Principal Amounts After Receipt of Bids The principal amounts of the Revenue Obligations set forth in the Official Bid Form reflect estimates of the District as to the likely interest rates of the winning bid and the premium or discount contained in the winning bid. After selecting the winning bid, the amortization schedule for the Revenue Obligations will be adjusted in $5,000 increments, to reflect the actual interest rates and any discount or premium in the winning bid to properly fund the purchase price of the Prior Certificates and to accommodate certain other requirements or preferences of the District. Such adjustments will not change any Revenue Obligation in any yen by more than the greater of$350,000 or 10%of the principal amount for such year. The dollar amount bid for the Revenue Obligations by the winning bidder will be adjusted to reflect such adjustment in the applicable amortization schedule. Any such adjustment will change the total (but not the per Revenue Obligation) dollar amount of purchaser's discount and original issue discount or premium, if any, provided in such bid. Any such adjustment will be communicated to the winning bidder within 24 hours after receipt of such bid by the District. Changes in the amortization schedule made as described in this paragraph will not affect the determination of the winning bidder or give the winning bidder any right to reject the Revenue Obligations. No Insurance THE SUCCESSFUL BIDDER SHALL NOT PURCHASE MUNICIPAL BOND INSURANCE IN CONNECTION WITH THE REVENUE OBLIGATIONS. Form of Bid BIDS FOR LESS THAN ALL OF THE REVENUE OBLIGATIONS WILL NOT BE ACCEPTED. Each bid must be on the Official Bid Form, submitted through the Electronic Service as specified herein. All electronic proposals shall be deemed to incorporate the provisions of the Official Bid Form and must be unconditional and irrevocable. In addition, each bidder is requested to supply an estimate of the true interest cost resulting from its bid, computed as prescribed below under the caption "Award, Delivery and Payment,"which shall be considered as informative only and not binding on either the bidder or the District. Each bid must be in accordance with the terms and conditions set forth in this Official Notice Inviting Bids. The District will make its best efforts to accommodate electronic bids; however, the District,the Financial Advisor (Public Resources Advisory Group) and Special Counsel assume no responsibility for any error contained in any electronic bid, or for the failure of any electronic bid to be transmitted or received at the official time for receipt of such bids. The official time for receipt of bids will be determined by the District at the place of the bid opening, and the District shall not be required to accept the time kept by Electronic Service as the official time. The District assumes no responsibility for informing any bidder prior to the deadline that its bid is incomplete,or not received. 56089901.2 6 If multiple timely bids are received from a single bidder the District shall accept the best of such bids and each bidder agrees,by submitting any bid,to be bound by its best bid. Information Regarding Electronic Proposals All proposals most be submitted through the Electronic Service. If any provision of this Official Notice Inviting Bids conflicts with information provided by the Electronic Service, this Official Notice Inviting Bids shall control. The District is not responsible for the proper operation of, and shall have no liability for any delays or interruptions of or any damages caused by the Electronic Service. The District is using the Electronic Service as a communication mechanism and not as the District's agent to conduct electronic bidding for the Revenue Obligations. The District is not bound by any advice of or determination by the Electronic Service to the effect that any particular bid complies with the terms of this Official Notice Inviting Bids. All costs and expenses incurred by prospective bidders in connection with their submission of bids through the Electronic Service are the sole responsibility of such bidders and the District is not responsible for any such costs or expenses. Further information about the Electronic Service, including any fee charged, may be obtained from Ipreo, 1359 Broadway, Second Floor,New York,NY 10018 (212-849-5023). The District assumes no responsibility or liability for bids submitted through the Electronic Service. The District shall be entitled to assume that any bid submitted through the Electronic Service has been made by a duly authorized agent of the bidder. Bid Security Deposit Each bidder must provide with its bid a wire transfer of immediately available federal funds in the amount of$1,500,000(the"Bid Security Deposit"). Bid Security Deposit wire transfers must be received in federal funds prior to the deadline for examination of the bids, and should be directed as follows: BANK: U.S.Bank,N.A. ABA: 091000022 FBO: U.S.Bank Trust N.A. A/C: 180121167365 REF: OCSD ATTN: Linda Verstuyft (213)615-6052 The wire transfers of unsuccessful bidders will be returned promptly on the bid date after the examination of bids. The wire transfer of the successful bidder will be retained by the District and applied to the purchase price at the time of delivery of the Revenue Obligations. The District disclaims any liability for funds sent by wire transfer,except for any willful misconduct or reckless disregard for its duties. If after the award of the Revenue Obligations,the successful bidder fails to complete the purchase on the terms stated in its bid,unless such failure of performance shall be caused by any act or omission of the District, the Bid Security Deposit shall be retained by the District as stipulated liquidated damages. No interest will be paid upon any Bid Security Deposit. Official Statement The District has approved a Preliminary Official Statement for the Revenue Obligations, dated January_,2015,which the District has"deemed final"for purposes of Rule 15c2-12 promulgated by the 56089901.2 7 Securities and Exchange Commission, as amended(the"Rule"), although subject to revision,amendment and completion in conformity with the Rule. The District will provide the successful bidder such reasonable number of printed copies of the final Official Statement as such bidder may reasonably request no later than seven business days after the day the Revenue Obligations are awarded. Up to 50 copies of the final Official Statement will be famished without cost to the successful bidder and further copies, if desired, will be made available at the successful bidder's expense. The successful bidder shall file the final Official Statement with a nationally recognized municipal securities information repository on a timely basis. The successful bidder shall, by accepting the award, agree at all times to comply with the provisions of the Rule and with all applicable roles of the Municipal Securities Rulemaking Board. Award,Delivery and Payment If satisfactory bids are received, the Revenue Obligations will be awarded to the highest responsible bidder not later than two hours after the time established for the receipt of bids. The highest bidder shall be the bidder submitting the best price for the Revenue Obligations,which best price shall be that resulting in the lowest true interest cost with respect to the Revenue Obligations. The true interest cost shall be computed by doubling the semi-annual interest rate (compounded semi-annually) necessary to discount the debt service payments from their respective payment dates to the date of the Revenue Obligations and to the price bid. If two or more bidders have bid the same true interest cost, the award shall be made at the sole discretion of the District. Delivery of the Revenue Obligations is expected to occur on or about February _, 2015. The Revenue Obligations will be delivered through the facilities of DTC, New York, New York. The successful bidder shall pay for the Revenue Obligations on the date of delivery in Los Angeles,California in immediately available federal funds. Any expenses of providing federal funds shall be home by the purchaser. Payment on the delivery date shall be made in an amount equal to the price bid for the Revenue Obligations less the amount of the bid security deposit. Right to Reject Bids,Waive Irregularities The District reserves the right to reject any and all bids, and to the extent permitted by law, to waive any irregularity or informality in any bid. CUSIP Numbers It is anticipated that CUSIP numbers will be printed on the Revenue Obligations,but the District will assume no obligation for the assignment or printing of such numbers on the Revenue Obligations or for the correctness of such numbers, and neither the failure to print such numbers on any Revenue Obligation nor any error with respect thereto shall constitute cause for a failure or refusal by the purchasers thereof to accept delivery of and make payment for the Revenue Obligations. The cost for the assignment of CUSIP numbers to the Revenue Obligations will be the responsibility of the successful bidder. California Debt and Investment Advisory Commission The successful bidder will be required to pay all fees due to the California Debt and Investment Advisory Commission ("CDIAC")under California law. CDIAC will invoice the successful bidder after the delivery of the Revenue Obligations. 56089901.2 Legal Opinions The District will furnish to the successful bidder at the closing of the Revenue Obligations the legal opinion of Special Counsel to the effect that, in the opinion of Special Counsel, based upon an analysis of existing laws,regulations,rulings and court decisions,and assuming, among other matters,the accuracy of certain representations and compliance with certain covenants,the interest component of each Installment Payment and the allocable portion thereof distributable in respect of each Revenue Obligation is excluded from gross income for federal income tax purposes under section 103 of the Internal Revenue Code of 1986 and is not a specific preference item for purposes of the federal alternative minimum tax and is exempt from State of California personal income taxes. Special Counsel will express no opinion regarding any other tax consequences related to the ownership or disposition of, or the accrual or receipt of interest on,the Revenue Obligations. Closing Documents The District will furnish to the successful bidder at the time of delivery of the Revenue Obligations: (1)a certificate certifying (i) that as of and at the time of delivery of the Revenue Obligations,there is no action, suit,proceeding or investigation,pending or,to the best knowledge of the District, threatened against or affecting the District, (A) which affects or seeks to prohibit, restrain or enjoin the execution and delivery of the Revenue Obligations or the Trust Agreement, (B) in any way contesting the validity of the Revenue Obligations, the Installation Purchase Agreement or the Trust Agreement or the powers of the District to enter into or perform its obligations under such documents to which it is a party or the existence of the District, or (C)wherein an unfavorable decision, ruling or finding would materially and adversely affect the District, or the validity or enforceability of the Revenue Obligations, the Installation Purchase Agreement or the Trust Agreement or the ability of the District to perform its obligations under such documents to which it is a party, (ii)that the Preliminary Official Statement did not on the date of sale of the Revenue Obligations and the Official Statement does not on the date of delivery contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements contained therein, in the light of the circumstances under which they were made, not misleading, and (2) a receipt of the District showing that the purchase price of the Revenue Obligations has been received by the District. Continuing Disclosure To assist the successful bidder in complying with the Rule, the District will undertake, pursuant to the Continuing Disclosure Agreement, to provide certain annual financial information, and notices of the occurrence of certain enumerated events. A description of the Continuing Disclosure Agreement is set forth in the Preliminary Official Statement and will be set forth in the final Official Statement. Additional Information Electronic copies of the Trust Agreement, the Installment Purchase Agreement, the Master Agreement, this Official Notice Inviting Bids, the Official Bid Form, and the Preliminary Official Statement will be furnished to any potential bidder upon request made to the District's Financial Advisor at: Public Resources Advisory Group, 11500 West Olympic Boulevard, Suite 502, Los Angeles, CA 90064,310-477-8487,via e-mail at Ichoi@pmgadvison.com. Right to Modify or Amend The District reserves the right to modify or amend this Official Notice Inviting Bids, including but not limited to the right to adjust and change the principal amount of the Revenue Obligations being 56089901.2 9 offered; provided, however, that such notifications or amendments shall be made not later than the business day prior to the date fixed for the receipt of bids, by 4:00 p.m., New York Time and communicated through Thomson Municipal News (available at http://w .tm3.com) and by facsimile transmission to any qualified bidder timely requesting such notice. Bidders are required to bid for the Revenue Obligations as so modified. Cancellation or Postponement The District reserves the right to cancel or postpone, from time to time, the date established for the receipt of bids for any reason at any time. Any such postponement will be announced by Thomson Municipal News. If any date fixed for the receipt of bids and the sale of the Revenue Obligations is postponed, any alternative sale date will be announced via Thomson Municipal News at least 24 hours prior to such alternative sale date and will be provided by facsimile transmission to any qualified bidder timely requesting such notice. On any such alternative sale date, any bidder may submit a sealed bid for the purchase of the Revenue Obligations in conformity in all respects with the provisions of this Official Notice Inviting Bids except for the date of sale and except for the changes announced by Thomson Municipal News at the time the sale date and time are announced. Dated: January_,2015 5608990L2 10 EXHIBIT A FORM OF CERTIFICATE OF INITIAL PURCHASER January_2015 Orange County Sanitation District Fountain Valley,California Fulbright&Jaworski LLP Los Angeles,California Ladies and Gentlemen: We have served as the Underwriter in connection with the execution and delivery on behalf of the Orange County Sanitation District (the "District') of $ Orange County Sanitation District Wastewater Refunding Revenue Obligations, Series 2015A(the"Revenue Obligations"). We hereby certify that: (i) January_, 2015 was the first day on which there was a binding contract in writing for the sale or exchange of the Revenue Obligations by the District to the Underwriter, and on that day (the "Sale Date"), we undertook pursuant to such contract to make a bona fide public offering of all of the Revenue Obligations. On the Sale Date all of each maturity of the Revenue Obligations was offered in a bona fide initial offering to the general public at the initial offering price or initial offering yield (the "Initial Offering Price") shown, for such maturity on the inside cover page of the Official Statement, dated January ,2015,relating to such offering(the"Official Statement'). The Initial Offering Price for each maturity represented: (i) our reasonable determination of a fair market value on the Sale Date of that maturity of the Revenue Obligations; and (ii) the price at which we reasonably expected to sell all the Revenue Obligations of that maturity to the general public; (ii) based upon our records and other information available to us that we believe to be correct,the first price at which a substantial portion(but in no event less than ten percent) of each maturity of the Revenue Obligations[, (except for the Revenue Obligations maturing an (the "Unsold Maturity"),] was sold by the Underwriter to the general public was the Initial Offering Price in respect of that maturity as described above. [For[the] [each]Unsold Maturity,on the Sale Date we reasonably expected that a substantial portion (at least ten percent) of that Unsold Maturity would be sold at the initial offering price or yield in respect of that maturity]; (iii) at the time that we agreed to purchase the Revenue Obligations, based upon then prevailing market conditions, we had no reason to believe that the first sale of any of the Revenue Obligations to a member of the general public would be at an initial offering price greater than or an initial offering yield less than the fair market value thereof; (iv) taking into account the aggregate amount of each maturity, and treating the Initial Offering Price as the issue price of each Revenue Obligation of that maturity, the aggregate issue price of the Revenue Obligations is $ ; and 56089901.2 11411481 (v) we provided the yield proof attached hereto as Exhibit A to Special Counsel;we make no representations regarding its legal sufficiency for any purpose. For purposes of this Certificate, the term"general public"does not include bond houses,brokers, or similar persons or organizations acting in the capacity of underwriters or wholesalers. The undersigned understands that the statements made herein will be relied upon by the District in its efforts to comply with the conditions imposed by the Internal Revenue Code of 1986 (the "Code"), and will be relied upon by Special Counsel in rendering its legal opinion, concerning the exclusion from gross income for federal income tax purposes of the interest component of each Installment Payment under the Installment Purchase Agreement, dated as of February 1, 2015, and described in more detail in the Official Statement,and the amount thereof distributable with respect to the Revenue Obligations. [MTIAL PURCHASER], as Underwriter By: Title: 56089901.2 2 Exhibit A Yield Proof (See attached) 560899012 3 OFFICIAL BID FORM ORANGE COUNTY SANITATION DISTRICT WASTEWATER REFUNDING REVENUE OBLIGATIONS SERIES 2015A January ,2015 Orange County Sanitation District 10844 Ellis Avenue Fountain Valley,CA 92708-7018 Attn: Lorenzo Tyner Ladies and Gentlemen: We hereby offer to purchase all of the $ aggregate principal amount of the Orange County Sanitation District (the "District') Wastewater Refunding Revenue Obligations, Series 2015A (the `Revenue Obligations"), more particularly described in the Official Notice Inviting Bids, dated January _, 2015 (the "Official Notice Inviting Bids"), which is incorporated herein by reference, and made a part thereof, at a purchase price of $ . This offer is for Revenue Obligations evidencing interest at the rates and in the form of serial maturities or term maturities with mandatory sinking account prepayments as set forth in the table on the following page. The bid is subject to acceptance not later than two hours after the expiration of the time established for the final receipt of bids. Our calculation of the true interest cost, computed in accordance with the instructions in the Official Notice Inviting Bids, and which is considered to be informative only and not a part of the bid, is With this bid we are providing the District a wire transfer in immediately available federal funds in the amount of$1,500,000 to an account specified by the District or its representative, in accordance with the Official Notice Inviting Bids. We have noted that payment of the purchase price is to be made in immediately available Federal Funds at the time of delivery of the Revenue Obligations. If we are the successful bidder,we will (1)within 30 minutes after being notified of the verbal award of the Revenue Obligations, advise the District of the initial public offering prices of the Revenue Obligations; and (2) prior to delivery of the Revenue Obligations furnish a certificate, acceptable to Special Counsel, Fulbright& Jaworski LLP, as to the "issue price"of the Revenue Obligations in the form specified in the Official Notice Inviting Bids. Preliminary,subject to change. 56089901.2 11411481 Sinking Maturity Principal Interest Serial Account (February1 Amount* Rate Maturity Prepayment 2028 (Check one column) 2029 2030 2031 2032 2033 2034 2035 2036 2037 We represent that we have full and complete authority to submit this bid on behalf of our bidding syndicate and the undersigned will serve as the lead manager for the group if the Revenue Obligations are awarded pursuant to this bid. We certify(or declare)under penalty of perjury under the laws of the State of California that this proposal is genuine, and not a sham or collusive, nor made in the interest of or on behalf of any person not herein named, and that the bidder has not directly or indirectly induced or solicited any other bidder to put in a sham bid or any other person, firm or corporation to refrain from bidding, and that the bidder has not in any manner sought by collusion to secure for himself an advantage over any other bidder. Respectfully Submitted, Account Manager: By: Address: City: State: Telephone: Following(or attached)is a list of the members of our account on whose behalf this bid is made. Preliminary,subject to change. 56089901.2 2 DRAFT 12/01/14 NOTICE OF INTENTION TO SELL S Orange County Sanitation District Wastewater Refunding Revenue Obligations Series 2015A NOTICE IS HEREBY GIVEN that the Orange County Sanitation District(the"District') intends to receive electronic bids until 11:00 a.m.,New York time, on January 2015, through the use of an electronic bidding service offered by Ipreo; at www.newissuehome.i- deal.com and the Parity electronic bid submission system, for the purchase of all of the Orange County Sanitation District Wastewater Refunding Revenue Obligations, Series 2015A (the "Revenue Obligations"), dated as of the date of initial delivery, and maturing on such dates as described in the related Official Notice Inviting Bids (the "Notice"). No bids will be accepted by facsimile. Bids for less than all of the Revenue Obligations will not be accepted. The District reserves the right to postpone the date established for the receipt of bids as more fully described under the paragraph"Cancellation or Postponement"in the Notice. NOTICE IS HEREBY FURTHER GIVEN that electronic copies of the Notice and the Preliminary Official Statement issued in connection with the sale of the Revenue Obligations may be obtained from the District's financial advisor, Public Resources Advisory Group, 11500 West Olympic Boulevard, Suite 502, Los Angeles, California 90064, 310-477-8487, via e-mail: lchoi@pmgadvisors.com. Orange County Sanitation District Dated: .January_, 2015 ' Preliminary, subject to change. 56089541.2 11411481 ADMINISTRATION COMMITTEE Meeting Date TOBA.of Dir. iV10/i4 i2/v/r4 AGENDA REPORTItem Number Item Number Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Lorenzo Tyner, Director of Finance and Administrative Services SUBJECT: INVEST AND/OR REINVEST DISTRICT'S FUNDS GENERAL MANAGER'S RECOMMENDATION Adopt Resolution No. OCSD 14-XX, entitled "A Resolution of the Board of Directors of the Orange County Sanitation District, Authorizing the Orange County Sanitation District's Treasurer to Invest and/or Reinvest District's Funds; Adopting District's Investment Policy Statement and Performance Benchmarks for calendar year 2015; and Repealing Resolution No. OCSD 14-10". SUMMARY This agenda item presents an update to the Orange County Sanitation District's Investment Policy Statement to the Administration Committee for consideration in the Committee's capacity as the oversight committee for the Investment Policy (Section 16.2). With adoption of the Resolution, the Board of Directors would readopt the Sanitation District's current Investment Policy Statement, portfolio performance benchmarks, and monitoring and reporting requirements for calendar year 2015. The Sanitation District's Investment Policy Statement was previously approved by the Administration Committee and Board for FY 2015-15 in July 2014. In October 2014, the Board replaced the District's contracted investment manager from Pacific Investment Management Company (Pimco) with Chandler Asset Management (Chandler). Staff previously stated in the July 2014 staff report that the future investment management firm may have recommendations on changes to the investment policy for Board consideration prior to the next investment policy update a year from now. Chandler has since performed an extensive review of the District's adopted investment policy and has provided recommendations to further enhance the policy. PRIOR COMMITTEE/BOARD ACTIONS July 2014 — Board adopted Resolution No. OCSD 14-10, Authorizing the Orange County Sanitation District's Treasurer to Invest and/or Reinvest District's Funds; Adopting District's Investment Policy Statement and Performance Benchmarks for FY 2014-15; and, Repealing Resolution No. OCSD 13-13. ADDITIONAL INFORMATION The Investment Policy will govern the investment activities of Chandler Asset Management, the Sanitation District's external money manager, on behalf of the District. Page 1 of 3 On December 11, 2012, the Sanitation District's Investment Policy Statement received the Investment Policy Certification of Excellence Award from the California Municipal Treasurer's Association (CMTA). A copy of the letter of certification is included each year in the annual Investment Policy document. The Sanitation District received its first Award of Excellence for the Investment Policy Statement in December 1996. Annual Review of Investment Policy The Investment Policy includes the requirement that the Sanitation District shall review its Investment Policy annually (Sections 1.2 and 16.1). Chandler reviewed the existing policy to ensure that the language is consistent with the California Government Code, expand on the best practices utilized by CMTA (i.e., minimum allocation to the Treasury sector) and to remove some of the language in the policy specific to the prior manager. The proposed investment policy is attached with redlined changes from the most recent approved policy in July 2014. Some of the more significant proposed changes include: • US Treasury securities make up at least 10 percent of the portfolio. • Approval of Supranational Obligations not exceeding 30 percent of the portfolio to be consistent with the California Government Code beginning January 1, 2015 (53601 Q). • Expansion on the description of mortgage securities and a 20 percent limitation on mortgage securities against the entire portfolio. • Rating requirement reference has been changed to the National Recognized Statistical Rating Organization (NRSRO) and not exclusively to Moody's and S&P. Annual Delegation of Investment Authority Effective January 1, 1997, Section 53607 of the Code states that governing boards of local agencies may only delegate authority to invest and/or reinvest agency funds to the agency's Treasurer for a one-year period. With adoption of the Resolution, the Board of Directors would renew its delegation of investment authority to the Director of Finance/Treasurer for a one-year period, January 1, 2015 to December 31, 2015, in compliance with the requirements of Section 53607. Each year, the Board of Directors will consider similar actions along with the annual reconsideration of the Sanitation District's Investment Policy. CEQA N/A BUDGET / PURCHASING ORDINANCE COMPLIANCE N/A Page 2 of 3 ATTACHMENTS The following attachment(s) are included in hard copy and may also be viewed on-line at the OCSD website(mmocsd.coml with the complete agenda package: • Exhibit A - OCSD Calendar Year 2015 Investment Policy Statement-redlined • Exhibit B - Performance Monitoring & Reporting Summary • Proposed Resolution No. OCSD 14-XX Page 3 of 3 Return to Aaenda Reo., a` ORANGE COUNTY SANITATION DISTRICT INVESTMENT POLICY STATEMENT Proposed for Review and Approval By Administration Committee On Decemberdaly 108, 2014 And for Adoption By Board of Directors On Decemberdaly 2317, 2014 TABLE OF CONTENTS Section TOPIC Page 1.0 Policy......................................................................................1 2.0 Scope......................................................................................1 3.0 Standard of Prudence.............................................................1 4.0 Investment Objectives.............................................................2 5.0 Delegation of Authority............................................................2 6.0 Ethics and Conflicts of Interest................................................3 7.0 Authorized Financial Dealers and Institutions.........................4 8.0 Authorized and Suitable Investments......................................5 9.0 Collateralization.......................................................................9 10.0 Safekeeping and Custody.......................................................9 11.0 Diversification..........................................................................9 12.0 Maximum Maturities..............................................................11 13.0 Internal Control......................................................................12 14.0 Performance Objectives and Benchmarks............................12 15.0 Reporting ..............................................................................12 16.0 Investment Policy Adoption and Revision.............................13 Appendix A. Summary of Investment Authorization B. Treasury Management Procedures C. Investment Manager Certification D. Investment Pool Questionnaire (LAIF) E. Board Resolution No. OCSD-I4-XX,Authorizing the Districrs Treasurer to Invest and/or Reinvest District Funds, and Adopting Investment Policy and Performance Benchmarks F. Quarterly Investment Program Monitoring Reports G. Sections of the California Government Code Pertinent to Investing Public Funds H. Glossary of Investment Terms Return to Anerda Report ORANGE COUNTY SANITATION DISTRICT INVESTMENT POLICY STATEMENT 1.0 Policv: It is the policy of the Orange County Sanitation District(OCSD)to invest public funds in a manner which ensures the safety and preservation of capital while meeting reasonably anticipated operating expenditure needs, achieving a reasonable rate of return and conforming to all state and local statutes governing the investment of public funds. 1.1. This Investment Policy is set forth by OCSD for the following purposes: 1.1.1. To establish a clear understanding for the Board of Directors, OCSD management, responsible employees and third parties of the objectives, policies and guidelines for the investment of the OCSD's idle and surplus funds. 1.1.2. To offer guidance to investment staff and any external investment advisors on the investment of OCSD funds (see Appendix ..A"). 1.1.3. To establish a basis for evaluating investment results. 1.2. OCSD establishes investment policies which meet its current investment goals. OCSD shall review this policy annually,and may change its policies as its investment objectives change. 2.0 Scope: This Investment Policy applies to all financial assets of OCSD;except for the proceeds of OCSD's capital projects financing program,which are invested in accordance with provisions of their specific bond indentures; and such other funds excluded by law or other Board-approved covenant or agreement. These funds are accounted for by OCSD as Enterprise Funds as represented in OCSD's Comprehensive Annual Financial Report. 3.0 Standard of Prudence: The standard of prudence to be used by OCSD internal staff, and any authorized investment advisor(s),shall be as described in Section 53600.3 of the California Government Code as follows: Except as provided in subdivision (a)of Section 27000.3, all governing bodies of local agencies or persons authorized to make investment decisions on behalf of those local agencies investing public funds Page 1 ef-03 pursuant to this chapter are trustees and therefore fiduciaries subject to the prudent investor standard.When investing, reinvesting, purchasing, acquiring, exchanging, selling,or managing public funds, a trustee shall act with care, skill, prudence, and diligence under the circumstances then prevailing, including, but not limited to,the general economic conditions and the anticipated needs of the agency,that a prudent person acting in a like capacity and familiarity with those matters would use in the conduct of funds of a like character and with like aims,to safeguard the principal and maintain the liquidity needs of the agency.Within the limitations of this section and considering individual investments as part of an overall strategy, investments may be acquired as authorized by law. 4.0 Investment Objectives: The primary objectives of OCSDs investment activities, in priority order, and as described in Section 53600.5 of the California Government Code, shall be: 4.1 Safety: The safety and preservation of principal is the foremost objective of the investment program of OCSD. Investments shall be selected in a manner that seeks to ensure the preservation of capital in OCSD's overall portfolio. This will be accomplished through a program of diversification, more fully described in Section 11.0,and maturity limitations, more fully described in Section 12.0, in order that potential losses on individual securities do not exceed the income generated from the remainder of the portfolio. 4.2 Liquidity:The investment program will be administered in a manner that will ensure that sufficient funds are available for OCSD to meet its reasonably anticipated operating expenditure needs. 4.3 Return on Investments: The OCSD investment portfolio will be structured and managed with the objective of achieving a rate of return throughout budgetary and economic cycles, commensurate with legal, safety,and liquidity considerations. 5.0 Delectation of Authority: 5.1 Authority to manage OCSD's investment program is derived from the California Government Code Sections 53600 at seq. and Sections 53635 at seq. The Board of Directors hereby delegates management responsibility for the OCSD investment program to its Director of Finance and Administrative Services/Treasurer,who shall establish written procedures for the operation of the investment program, consistent with this Policy. The Controller/Assistant Treasurer shall be responsible for day-to-day administration, monitoring, and the development of written administrative procedures for the operation of the investment program, consistent with this Policy. The current treasury management procedures Page 2 ef79 Return to Mends Report are presented in Appendix"B." No person may engage in an investment transaction except as provided under the terms of this Policy and the procedures established by the Treasurer. The Treasurer shall be responsible for all transactions undertaken by OCSD internal staff, and shall establish a system of controls to regulate the activities of internal staff and external investment advisors engaged in accordance with Section 5.3. 5.2 The administrative procedures for the operation of OCSD's investment program will provide for, but not be limited to,the following: 5.2.1 Formats for monthly and quarterly reports to the Administration Committee, and the Board of Directors. 5.2.2 Compliance with generally accepted accounting principles of the Government Accounting Standards Board. 5.2.3 Establishment of benchmarks for performance measurement. 5.2.4 Establishment of a system of written internal controls. 5.2.5 Establishment of written procedures for competitive bids and offerings of securities that may be purchased or sold by intemal OCSD staff. 5.2.6 Establishment of a Desk Procedures Manual for treasury operations and management. 5.3 The Board of Directors of OCSD may, in its discretion, engage the services of one or more registered investment advisors to assist in the management of OCSD's investment portfolio in a manner consistent with OCSD's objectives. Such external investment advisors,which shall be selected through a competitive process, shall be granted discretion to purchase and sell investment securities in accordance with this Investment Policy. Such advisors must be registered under the Investment Advisers Act of 1940, or be exempt from such registration. 6.0 Ethics and Conflicts of Interest: 6.1 Officers and employees of OCSD involved in the investment process shall refrain from personal business activities that could conflict with proper execution of OCSD's investment program,or which could impair their ability to make impartial investment decisions. Employees and investment officials shall disclose to the General Manager any material financial interests in financial institutions that conduct business within OCSD's boundaries, and they shall further disclose any large personal financial/investment positions,the performance of which could be related to the performance of positions in OCSD's portfolio. Page 3 443 Page 4 of 13 Return to Mends Report 7.0 Authorized Financial Dealers and Institutions: 7.1 For investment transactions conducted by OCSD internal staff,the Treasurer will maintain a list of financial institutions authorized to provide investment services to OCSD, including "primary"or regional dealers that qualify under Securities and Exchange Commission Rule 15C3-1 (Uniform Net Capital rule), and Federal or State of California chartered banks. No public deposit shall be made except in a qualified public depository as established by State law. All financial institutions which desire to become qualified bidders for investment transactions with OCSD must supply the following for evaluation by the Treasurer: 7.1.1. Audited financial statements for the institution's three(3)most recent fiscal years. 7.1.2. A statement, in the format prescribed by the Government Finance Officers Association (GFOA),certifying that the institution has reviewed OCSD's Investment Policy and that all securities offered to the Districts shall comply fully and in every instance with all provisions of the California Government Code and with this Investment Policy. The current statement is presented in Appendix"C." 7.1.3. A statement describing the regulatory status of the dealer, and the background and expertise of the dealer's representatives. Selection of financial institutions, brokeddealers, and banks authorized to engage in transactions with OCSD shall be made through a competitive process. An annual review of the financial condition of qualified institutions will be conducted by the Treasurer. 7.2 Selection of broker/dealers used by external investment advisors retained by OCSD, shall be in compliance with contract provisions between OCSD and any external investment advisors, and shall be in substantially the following form: Use of Securities Brokers: Neither the Investment Advisor nor any parent, subsidiary or related firm shall act as a securities broker with respect to any purchases or sales of securities which may be made on behalf of OCSD, provided that this limitation shall not prevent the Investment Advisor from utilizing the services of a securities broker which is a parent, subsidiary or related firm, provided such broker effects transactions on a "cost only"or"nonprofit"basis to itself and provides competitive execution. The Investment Advisor shall provide the Districts with a list of suitable independent brokerage firms(including names and addresses)meeting the requirements of Government Code Section 53601.5, and, unless otherwise directed by OCSD, the Investment Advisor may utilize the Page 5 ef-03 service of any of such independent securities brokerage firms it deems appropriate to the extent that such firms are competitive with respect to price of services and execution. 8.0 Authorized and Suitable Investments: All investments shall be made in accordance with the California Government Code including Sections 16429.1 of seq., 53600 of seq.,and 53684, and as described within this Investment Policy. Permitted investments under this Policy shall include: 8.1 Securities, obligations, participations, or other instruments of, or issued by, or fully guaranteed as to principal and interest by the US Government, a federal agency,or a US Government-sponsored enterprise pursuant to Section 53601 (at)of the California Government Code. US Treasury securities must make up at least 10%of the portfolio. investment n mortgage backed bend� and rMOs s not governed by th a SeGt on 8.1, even fsuGh bonds are ssued by age no as of the I IS G.".FRM.Rt Se. SeGt.R 8.2 for GO Rd t ORS of purchase of mortgage 8.2 ISupranational Obligations issued or unconditionally guaranteed by the International Bank for Reconstruction and Development. International Finance Corporation. or Inter-American Development Bank. Securities must be eligible for purchase in the United States and be US dollar denominated senior unsecured unsubordinated obligations, with a maximum maturity of five years. Securities eligible for purchase under this section must be rated "AA"or better by a Nationally Recognized Statistical Ratm O anization NRSRO and shall not exceed 30%of the total O Cpnmeart INDl]:Efl n 1/1/15,Msse are C=:. In CGc Sedon 535011yI. 8.23 Mortgage 4mckedpass-through securities collateralized mortgage obligation, mortgage-backed or other Day-through bond, equipment lease-backed certificate, consumer receivable pass- through certificate,or consumer receivable-backed bond of a maximum maturity of five years. Securities eligible for investment under this subdivision shall be issued by an issuer having an"A"or higher rating for the issuer's debt as provided by an NRSRO and rated in a rating category WAN"or its eauivalenl or better by an NRSRO. Purchase of securities authorized by this subdivision may not exceed 20 percent of the agency's surplus moneys that may be invested Dursuant to this section.issued-ban agency of the US Government, which are backed by peels 9 ^•o ^o. Purchase of mortgage derivatives, which include interest-only payments(IOs)and principal-only payments (POs); inverse Floaters, and RE-REMICs (Real Estate Mortgage Investment Conduits), is hereby prohibited. Page 6 ef-13 Return to Mende Report 8.34 Commercial paper of"prime"quality and sated"Pi"by Meady's Invests (S&Pjof the highest ranking or of the highest letter and number rating as provided by an NRSRO, and issued by a domestic corporation organized and operating in the United States with assets in excess of$500 million and having a rating of"A"or better on its long-tens debt as provided by AAeedy's-eeSBRan NRSRO. Purchases of eligible commercial paper may not exceed 270 days to maturity from the date of purchase. Purchases of commercial paper shall not exceed 4525%of the market value of the portfolio, except that^ max mum of 25% of the MaFk^t ^ „of the portfol o may be nvested n oommerG al paper, so long as the average matUFty of a" GommeFo al paper n the portal a does not exceed 31 days. No more than 5%of the market value of the portfolio, or 10%of the issuer's outstanding paper, may be invested in commercial paper issued by any one(1)eligible corporation. 8.45 Banker's acceptances issued by institutions,the short-term obligations of which are rated of the highest ranking or the highest letter and number ratina as provided by an NRSRO^ n � by S&P provided that: (a)the acceptance is eligible for purchase by the Federal Reserve System; (b)the maturity does not exceed 180 days; (c) no more than 40%of the total portfolio may be invested in banker's acceptances;and (d)no more than 30%of the total portfolio may be invested in the banker's acceptances of any one(1)commercial bank. 8.6 Medium term(or corporate) notes of a maximum of five(5)years maturity issued by corporations organized and operating within the United States, or issued by depository institutions licensed by the United States, or any state,and operating within the United States with assets in excess of$500 million, and which is rated in a rating category of"A"or better on its long-term debt as provided by Moody's-gr-S&an NRSROR. Notes better by Mood)4s, OF"A"OF better by S&P. if, at the t me Of PURGhase, an agency,the note shall also be rated at least"BIBB" by the other rat ng agency. If, after purchase,the rating of an eligible note n a-rating ^^t^_^^.^."N'eF be4^- :^ .^...^gaaded t^•1380 ^falls below the minimum rating category stipulated above,the external investment advisor shall notify the District of the downgrade,and shall present an analysis and recommendations as to the disposition of the note consistent with the investment objectives of this Investment Policy. TAe-abeve-resHistiens 88uer'and do not extend to the parent Gorporat on o :�-^• �" ^^ ^�No more than 3530%of the portfolio may be invested in beg medium term notes, ^tV,^"^v. ^^t'^^^ ^^d..^^.'v.^d '^ oa _ - CanmeM rND3l:stele wtle reAnu1s MTNs V to 30%anE is nM mmdrretl wiM Mls olM1er e ion. 8.7 Notes, bonds, or other obligations that are at all times secured by a valid-first priority security interest in securities of the types listed by Page 7 st43 California Government Code Section 53651 as eligible securities for the purpose of securing local agency deposits having a market value at least equal to that required by California Government Code Section 53652 for the purpose of securing local agency deposits. The securities serving as collateral shall be placed by delivery or book entry into the custody of a trust company or the trust department of a bank that is not affiliated with the issuer of the secured obligation, and the security interest shall be perfected in accordance with the requirements of the Uniform Commercial Code or federal regulations applicable to the types of securities in which the security interest is granted. C."ent reD31:There le ro state w e ..tdcllan an the mnceMretlan M this sec ty 8.78 Shares of mutual funds investing in securities permitted under this policy type_ and under Section 53601 (WI)of the California Government Code. Such funds must either: (1)attain the highest ranking,or the highest letter and numerical rating, provided by not less than two of the three largest nationally recognized rating services; or(2)have an Investment Advisor registered with the Securities and Exchange Commission with not less than five(5)years of experience investing in the securities and obligations authorized under this Policy and under California Government Code Section 53601, and with assets under management in excess of$500 million. The purchase price of shares of beneficial interest purchased pursuant to this policy, and the California Government Code may not include any commission that the companies may charge, and shall not exceed 4520%of the Districts surplus money that may be invested pursuant Page 8 of 13 Return to Mends Report to this section. However, no more than 10%of the District's surplus funds may be invested in shares of beneficial interest of any one(1)mutual fund pursuant to this section. 8.8-9 Certificates of deposit: 8.99.1 Secured(collateralized)time deposits issued by a nationally or state-chartered bank or state or federal savings and loan association,as defined by Section 5102 of the California Financial Code, and having a net operating profit in the two(2)most recently completed fiscal years. Collateral must comply with Chapter 4, Bank Deposit Law, Section 16500 at seq.,and Chapter 4.5, Savings and Loan Association and Credit Union Deposit Law, Section 16600 at seq., of the California Government Code. 8.89.2 Negotiable certificates of deposit(NCDs) issued by a nationally or Mate-chartered bank or state of federal savings and loan association, as defined by Section 5102 of the California Financial Code; and which shall have a rating of"A"or better on its long-term debt as provided by Moedy's er-S&Pa NRSRO; or which shall have the fellewing-min mum SheFt eFM MtqRgS by at least \]oM♦ ,"A!"for d.pos to b •S&P, o comparably rate I iohest letter and number rating for deposits as provided by a NRSRO; or as otherwise approved by the District's Board of Directors. No more than 30%of the portfolio may be invested in securities ousuant to this section. 8.99.3 To be eligible to receive local agency money, a bank, savings association,federal association, or federally insured individual loan company shall have received an overall rating of not less than 'satisfactory'in its most recent evaluation by the appropriate federal financial supervisorial agency of its record of meeting the credit needs of California's communities, including low and moderate income neighborhoods, pursuant to Section 2906 of Title 12 of the United States Code. 8.910 Taxable or tax-exempt municipal bonds issued by any of the 50 United States. Such securities must be rated"""'eF h" heF by""--"•'S, -• ""A"-or higher by SSPa NRSRO; or as otherwise approved by the Districts' Board of Directors. 8.4011 The State of California Local Agency Investment Fund (LAIF). The LAW is an investment alternative for California's local governments and special districts managed by the State Treasurers Office. LAIF is more fully described in the Glossary(See Appendix"H.") The District shall use LAIF as a short-term cash management facility. Investment of District funds in LAIF shall be subject to investigation and due diligence prior to investing,and on a continual basis to a level of review pursuant to Section 3.0, Standard of Prudence,of this Policy. See Appendix"D"for Page 9 ef79 investment pool questionnaire. 8.a412 The Orange County Treasurer's Money Market Commingled Investment Pool(OCCIP). The OCCIP is a money market investment pool managed by the Orange County Treasurer's Office. OCCIP is more fully described in the Glossary. (See Appendix 'H.") The District has no funds invested in OCCIP at this time. Investment of District funds in OCCIP would be subject to investigation and due diligence prior to investing,and on a continual basis to a level of review pursuant to Section 3.0, Standard of Prudence, of this Policy. '-IS; Government wh& W, backed by pea's of mortgages guaranteed b asset backed qpcurit as rated"Ass" by Moody's and"AAA"by S&P. Select on of mortgage deFVat Yes, wh Gh n6lude meFest only payments REMICS (Real Estate Mortgage investment Gondu ts), a thereby net exceed 20% of the tota' Long Term Operat ng Man as paFffol a. 8.13 Repurchase agreements provided that: 8.13.1 All repurchase agreements shall be collateralized with securities eligible for purchase under this Policy. In order to anticipate market changes and to provide a level of security for all repurchase agreement transactions,collateralization shall be maintained at a level of at least 102%of the market value of the repurchase agreements, and shall be adjusted no less than weekly. 8.13.2 All repurchase agreements must be the subject of a Master Repurchase Agreement between OCSD and the provider of the repurchase agreement. The Master Repurchase Agreement shall be substantially in the form developed by The Bond Market Association. 8.14 Reverse repurchase agreements provided that: 8.14.1 No more than five percent(5%)of OCSD's portfolio shall be invested in reverse repurchase agreements, and there shall be no long- term reverse repurchase agreements unless otherwise authorized by the Districts' Board of Directors. 8.14.2 The maximum maturity of reverse repurchase agreements shall be ninety(90)days. 8.14.3 Reverse repurchase agreements shall mature on the exact Page 10 ef-1S Return to Aaenda Report dale of a known cash flow which will be unconditionally available to repay the maturing reverse repurchase agreement. 8.14.4 Proceeds of reverse repurchase agreements shall be used solely to supplement portfolio income or to provide portfolio liquidity, and shall not be used to speculate on market movements. 8.14.5 All reverse repurchase agreements must be the subject of a Master Repurchase Agreement between OCSD and the provider of the reverse repurchase agreement. The Master Repurchase Agreement shall be substantially in the form developed by The Bond Market Association. 8.15 Sales of OCSD-owned securities in the secondary market may incur losses in order to improve the risk or return characteristics of the portfolio, to prevent anticipated further erosion of principal, or when trading for securities that result in an expected net economic gain to OCSD. 8.16 If securities owned by the OCSD are downgraded by^'ham..,.,Meedy's ar SBP--tea-level-below the quality required by this Investment Policy, it shall be OCSD's policy to review the credit situation and make a determination as to whether to sell or retain such securities in the portfolio. If a decision is made to retain the downgraded securities in the portfolio,their presence in the portfolio will be monitored and reported monthly to the OCSD General Manager,the Administration Committee and Board of Directors. 9.0 Collateralization: Generally,the value to secure deposits under this Policy shall comply with Section 53652 of the California Government Code. Collateralization will be required for secured time deposits,as more fully described in Section 8.8.1; and repurchase agreements, as more fully described in Section 8.13.1. Collateral will always be held by an independent third-party, as more fully described in Section 10.1. The right of collateral substitution is granted. 10.0 Safekeeoina and Custody: 10.1 All securities transactions, including collateral for repurchase agreements, entered into by,or on behalf of OCSD,shall be conducted on a delivery-versus-payment(DVP)basis. Securities will be held by OCSD's third-party custodian bank,which shall be selected through a competitive process,or that agent's representative,or in the agent's account at the Federal Reserve Bank, or within clearing corporations in the U.S., and evidenced by book entry statements. Page 11 of 13 11.0 Diversification: OCSD will diversify its investments by security type, issuer,and financial institution in accordance with the following: 11.1 There is no limit on investment in securities issued by or guaranteed by the full faith and credit of the U.S.government. 11.2 No more than 20%of the portfolio may be invested in securities of a single agency of the U.S.government,which does not provide the full faith and credit of the U.S.government. 11.3 No more than 5%of the portfolio may be invested in securities of any one issuer,other than the U.S. government or its agencies. Investment in mutual funds is not governed by this Section 11.3. See Section 11.8 for conditions of purchase of mutual funds. 11.4 No individual holding shall constitute more than 5%of the total debt outstanding of any issuer. 11.5 No more than 40%of the portfolio may be invested in banker's acceptances. 11.6 No more than 4525%of the portfolio may be invested in commercial paper, except that 25% of the portfolio may be so nested so long s the average matuFty of all summers al paper n the portfal a does not exceed 31 days. 11.7 No more than 30%of the portfolio may be invested in medium-term (corporate)notes. 11.8 No more than 4520%of the portfolio may be invested in mutual funds. However, no more than 10%of the District's portfolio may be invested in shares of beneficial interest of any one(1) mutual fund. 11.9 No more than 30%of the portfolio may be invested in negotiable certificates of deposit. 11.10 No more than 10%of the portfolio may be invested in eligible municipal bonds. 11.11 No more than 20%of the Long Term Operating Monies portfolio may be invested in a combination of mortgage-backed securities, CMOs and asset-backed securities. Board approval (author zed by Board M Puts Order, jaRuary 22, 1997), and may not be Purchased by the D StF GVS staff7 Page 12 of 13 Return to Aaenda Report 11.12 No more than the lesser of 15%of the portfolio or the statutory maximum may be invested in LAIR 11.13 No more than 15%of the portfolio may be invested in the Orange County Investment Pool. 11.14 No more than 20%of the portfolio may be invested in repurchase agreements. 11.15 No more than 5%of the portfolio may be invested in reverse repurchase agreements. 12.0 Maximum Maturities: To the extent possible, OCSD will attempt to match its investments with reasonably anticipated cash flow requirements. The Treasurer shall develop a five-year cash flow forecast, which shall be updated quarterly. Based on this forecast, the Treasurer shall designate,from time-to-time, the amounts to be allocated to the investment portfolio. OCSD monies invested in accordance with this Policy are divided into two(2) categories: 12.1 Liquid Operating Monies. Funds needed for current operating and capital expenditures are known as Liquid Operating Monies. 12.1.1 The maximum final staled maturity of individual securities in the Liquid Operating Monies account portfolio shall be one(1)year from the date of purchasesettlement. 12.1.2 The average duration of the Liquid Operating Monies account portfolio shall be recommended by the Treasurer based on the Districts' cash flow requirements, but may never exceed 180 days. 12.2 Long Term Operating Monies. Funds needed for longer term purposes are known as the Long Term Operating Monies. 12.2.1 Except for the purchase of seount as by the D stnGt's extemal money manager, PJM693The maximum final stated maturity of individual securities in the Long Term Operating Monies account portfolio shall be five(5)years from the date of purchasesettlement. PIMCO may purchase these wh oh may have a stated matUF ty ef mene than five (5)years from FaqU below,. 12.2.2 The duration of the Long Term Operating Monies account portfolio shall be recommended by the Treasurer based on the Districts' five-year cash flow forecast, but may never exceed 60 months. 12.2.3 The duration of the Long Term Operating Monies account Page 13 ef-1S portfolio shall never exceed 120%of the duration as established in accordance with Section 12.2.2. 12.2.4 The duration of the Long Tenn Operating Monies account portfolio shall never be less than 80%of the duration as established in accordance with Section 12.2.2 13.0 Internal Control: 13.1 The Treasurer shall establish an annual process of independent review by an external auditor. This review will provide internal control by assuring compliance with policies and procedures. The current treasury management procedures are presented in Appendix"B" 14.0 Performance Objectives and Benchmarks: 14.1 Overall objective. The investment portfolio of OCSD shall be designed with the overall objective of obtaining a rate of return throughout budgetary and economic cycles,commensurate with investment risk constraints and reasonably anticipated cash flow needs. 14.2 The Liquid Operating Monies. The investment performance objective for the Liquid Operating Monies shall be to earn a total rate of return over a market cycle which exceeds the return on a market index approved by the Administration Committee, and by the District's Board of Directors, when the duration of the portfolio is established.This market index is more fully described in Board Resolution No. OCSD-00-18 14 XX(see Appendix"E"). 14.3 The Long Term Operating Monies. The investment performance objective for the Long Term Operating Monies shall be to earn a total rate of return over a market cycle which exceeds the return on a market index selected by the Administration Committee and approved by the Districts' Board of Directors,when the duration of the portfolio is established. This market index is more fully described in Board Resolution No. OCSD-00-16 1414XX(See Appendix"E"). 15.0 Reporting: 15.1 Quarterly investment reports shall be submitted by the Treasurer to the Administration Committee which shall forward the reports to the District's Board of Directors.The quarterly reports shall be submitted to the Administration Committee within 30 days of the end of the month in accordance with California Government Code Sections 53607,53646, and this Investment Policy. The quarterly reports shall provide clear and concise status information on the District's portfolios at the end of each reporting period, including performance measures using the benchmarks described in Section 14.0 of this Investment Policy. Sample quarterly reports are presented in Appendix"F."These reports shall contain listings Page 14 of 13 Return to Aaenda Report of individual securities held at the end of each reporting period, and shall disclose, at a minimum,the following information about the risk characteristics of OCSD's portfolio: 15.1.1 Cost and accurate and complete market value of the portfolio. 15.1.2 Modified duration of the portfolio compared to Benchmark. 15.1.3 Dollar change in value of the portfolio for a one-percent(I ) change in interest rates. 15.1.4 Percent of portfolio invested in reverse repurchase agreements,and a schedule which matches the maturity of such reverse repurchase agreements with the cash Flows which are available to repay them at maturity. 15.1.5 For the Liquid Operating Monies account only, the percent of portfolio maturing within 90 days. 15.1.6 Average portfolio credit quality. 15.1.7 Percent of portfolio with credit ratings below"A"by any rating agency,and a description of such securities. 15.1.8 Stale that all investments are in compliance with this policy and the California Government Code, or provide a listing of any transactions or holdings which do not comply with this policy or with the California Government Code. 15.1.9 Time-weighted total rate of return for the portfolio for the prior three months,twelve months,year to date, and since inception compared to the Benchmark returns for the same periods. 15.1.10 State that sufficient funds are available for OCSD to meet its operating expenditure requirements for the next six months,or if not, state the reasons for the shortfall. 15.2 OCSD's Treasurer shall meet quarterly with the Administration Committee to review investment performance, proposed strategies and compliance with this Investment Policy. External investment advisors may be required to attend said meetings at the discretion of the Chairman of the Administration Committee. 16.0 Investment Policy Adoption and Revision: 16.1 The Investment Policy of OCSD shall be reviewed by the Administration Committee and shall be adopted by resolution of the Board of Directors of OCSD. The Policy shall be reviewed on an annual basis in accordance with California Government Code Section 53646, and this Investment Page 15 of-13 Policy, by the Administration Committee,which shall recommend revisions,as appropriate, to the Board of Directors. Any modifications made thereto shall be approved by the Board of Directors. 16.2 The Administration Committee shall serve as the oversight committee for the District's Investment program and shall adopt guidelines for the ongoing review of duration, quality and liquidity of the District's portfolio. Page 16 of 13 Return to Aaende Report APPENDIX "A" SUMMARY OF INVESTMENT AUTHORIZATION INTERNAL AND EXTERNAL MANAGERS SHORT TERM OPERATING FUND INVESTMENT INTERNAL EXTERNAL U.S. Treasuries OK OK Federal Agencies Fixed coupon,fixed mat. OK Supranationals NO NOOK Mortgage-backed NO NO Commercial paper OK OK Banker's Accept. OK OK Medium Term Notes Fixed coupon,fixed mat.* OK Mutual Funds Money Market Only*` Money Market Only Negotiable CDs Fixed coupon,fixed mat.* OK Municipal Bonds OK* NO LAIF OK NO OCIP OK NO CMOs NO 490K Asset-backed NO NOOK Repurchase Agree. OK OK Reverse Repos OK* OK LONG TERM OPERATING PORTFOLIO INVESTMENT INTERNAL EXTERNAL U.S.Treasuries OK OK Federal Agencies Fixed coupon,fixed mat. OK Supranationals NO OK Mortgage-backed NO OK Commercial Paper OK OK Banker's Acceptances OK OK Medium Term Notes Fixed coupon,fixed mat` OK Mutual Funds Money Market Only** OK Negotiable CDs Fixed coupon,fixed mat.* OK Municipal Bonds OK* OK LAW OK NO OCIP OK NO CMOs NO With-Beard AppfevalOK Asset-backed NO With-Bpard-ApprevalOK Repurchase Agree. OK OK Reverse Repos OK* OK *With prior approval of the Administation Committee. "Using financial institutions approwd by the Atlministnation Committee. x:w.vn..eaiamnMwe.nconm�.w.+ro�.wcnn�.nm.mwiry eoo�a�..ea, EXHIBIT "B" Return W Aaenda Reo., ORANGE COUNTY SANTIATION DISTRICT PERFORMANCE MONITORING & REPORTING SUMMARY FOR THE DISTRICT'S INVESTMENT PROGRAM POLICY REFERENCE PERFORMANCE CHARACTERISTIC REPORTING PARTY* Chandler BNY Callan 15.1.1 Cost and market value of the portfolio(monthly mark-to-market). M, Q M, Q Q 15.1.2 Modified duration of the portfolio compared to benchmark. M, Q Q 15.1.3 Dollar change in value of the portfolio for a 1%change in interest rate. M, Q Q 15.1.4 Percent of portfolio invested in reverse repurchase agreements, and a schedule which M, Q matches the maturity of such reverse repurchase agreements with the cash flows which are available to repay them at maturity. 15.1.5 For the Liquid Operating Monies account only,the percent of portfolio maturing within 90 M, Q Q days. 15.1.6 Average portfolio credit quality. M, Q Q 15.1.7 Percent of portfolio with credit ratings below"A" by any rating agency, and a description M, Q Q of such securities. 15.1.8 Listing of any transaction or holdings which do not comply with this policy or with the M, Q California Government Code. 15.1.9 Time-weighted total rate of return for the portfolio forthe priorthree months,twelve M, Q Q months, year-to-date, and since inception compared to the benchmark returns for the same periods. ADDL** Comparison of portfolio performance to market index benchmark. M, Q Q ADDL** Comparison of Manager's performance to peer group benchmark. Q ADDL** Monitoring of organizational and structural changes of investment management firm. Q ADDL** Audit portfolios for compliance with investment policy guidelines. Q 15.1.10 OCSD will report if sufficient funds are available for it to meet operating expenditure requirements for the next six months, or if not, state the reason for the shortfall. Notes *M = Monthly *Q =Quarterly **ADDL= Monitoring of Additional Performance Characteristics EXHIBIT "B" Calendar Year 2015 Performance Monitoring & Reporting Schedule For the Administration Committee The Quarterly Investment and Board of Directors meetings of: Management Program Report to be resented for the period of: January 2015 Board only) February Oct— Dec 2014 March April May Jan — March 2015 June Jul August Board only) Aril —June 2015 September October November Jul — Sept 2015 December Return to Mende Report RESOLUTION NO. OCSD 14-XX A RESOLUTION OF THE BOARD OF DIRECTORS OF THE ORANGE COUNTY SANITATION DISTRICT, AUTHORIZING THE DISTRICT'S TREASURER TO INVEST AND/OR REINVEST DISTRICT'S FUNDS, AND ADOPTING DISTRICT'S INVESTMENT POLICY STATEMENT AND PERFORMANCE BENCHMARKS; AND REPEALING RESOLUTION NO. OCSD 14-10 WHEREAS, on July 23, 2014, the Board of Directors adopted Resolution No. 00SD 14-10, readopting the District's Investment Policy Statement, and establishing specific performance benchmarks and objectives, together with a schedule of frequency of investment performance reports; and WHEREAS, pursuant to California Government Code Section 53607, the Board of Directors may delegate authority to invest and/or reinvest District's funds to the Treasurer for a one-year period; and WHEREAS, pursuant to California Government Code Section 53646, the District is required to review its Investment Policy annually and readopt its Policy at a public meeting, which Policy will establish specific performance benchmarks and objectives, and specific monitoring and reports. NOW, THEREFORE, the Board of Directors of the Orange County Sanitation District, DOES HEREBY RESOLVE, DETERMINE AND ORDER: Section 1: That the authority of the Board of Directors to invest or reinvest District's surplus funds, or to sell or exchange securities so purchased, or to deposit for safekeeping the funds and investments of the Districts with depositories, as provided for in California Government Code Sections 53608 and 53630, is hereby delegated to the District's Treasurer for a one-year period commencing on the date this Resolution is adopted, as authorized by California Government Code Section 53607. OCSD 14-XX-1 Section 2: That the Board of Directors hereby adopts the Investment Policy Statement of the Orange County Sanitation District, as set forth in Exhibit "A", attached hereto and incorporated herein by reference. Section 3: That the Board of Directors hereby adopts the following specific performance benchmarks for their two investment funds in accordance with Section 14.0 of the District's Investment Policy: LIQUID OPERATING MONIES: The Short-Terre Operating Fund will be compared to the three-month T-Bill rate, and the Callan Active Cash Flow Income Style Group. The Callan Active Cash Flow Income Style Group represents a peer group of managers who operate with a maximum maturity of one year. LONG-TERM OPERATING MONIES: The Long-Term Operating Fund will be compared to the Merrill Lynch Government and Corporate One-to-Five Year Maturity Index and to the Callan Defensive Fixed Income Style Group. Section 4: That the Board of Directors hereby adopts a performance monitoring and reporting schedule, as required by Section 15.0 of the District's Investment Policy, which schedule is attached hereto as Exhibit "B", and incorporated herein by reference. OCSD 14-XX-2 Return to Mende Report Section 5: That Resolution No. OCSD 14-10 is hereby repealed. PASSED AND ADOPTED at regular meeting of the Board of Directors, Orange County Sanitation District held December 17, 2014. Tom Beamish Board Chair ATTEST: Maria E. Ayala Clerk of the Board OCSD 14-XX-3 ADMINISTRATION COMMITTEE Meeting Dare To ad.of Dir. tz/tD/ta -- AGENDA REPORT Item Number Item Number e Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Lorenzo Tyner, Director of Finance and Administrative Services SUBJECT: GEOGRAPHIC INFORMATION SYSTEMS (GIS)AT OCSD GENERAL MANAGER'S RECOMMENDATION Information Only. SUMMARY Geographic Information Systems (GIS) technologies are critical tools for improving the quality, accuracy, efficiency, and responsiveness of services provided by the Orange County Sanitation District (OCSD). Staff will provide a presentation on GIS data, how it is stored: Points (e.g., addresses, locations, etc.), Lines (e.g., streets, highways, sewers, etc.), Polygons (e.g., areas, political jurisdictions, etc.) and Images that can be viewed in various combinations along with how they provide easy access to information regarding the treatment plants and collections system. PRIOR COMMITTEE/BOARD ACTIONS N/A ADDITIONAL INFORMATION N/A CEQA N/A BUDGET/PURCHASING ORDINANCE COMPLIANCE N/A ATTACHMENT N/A Page 1 of 1 ORANGE COUNTY SANITATION DISTRICT Agenda Terminology Glossary Glossary of Terms and Abbreviations AQMD Air Quality Management District ASCE American Society of Civil Engineers BOD Biochemical Oxygen Demand CARB California Air Resources Board CASA California Association of Sanitation Agencies CCTV Closed Circuit Television CEQA California Environmental Quality Act CRWQCB California Regional Water Quality Control Board CWA Clean Water Act CWEA California Water Environment Association EIR Environmental Impact Report EMT Executive Management Team EPA U.S. Environmental Protection Agency FOG Fats, Oils, and Grease FSSD Facilities Support Services Department gpd Gallons per day GWR System Groundwater Replenishment System (also called GWRS) ICS Incident Command System IERP Integrated Emergency Control Plan LOS Level of Service MGD Million gallons per day NACWA National Association of Clean Water Agencies NPDES National Pollutant Discharge Elimination System NWRI National Water Research Institute O&M Operations and Maintenance OCCOG Orange County Council of Governments OCHCA Orange County Health Care Agency OCSD Orange County Sanitation District OCWD Orange County Water District GOBS Ocean Outfall Booster Station OSHA Occupational Safety and Health Administration POTW Publicly Owned Treatment Works ppm Parts per million RFP Request For Proposal RWQCB Regional Water Quality Control Board SARFPA Santa Ana River Flood Protection Agency Glossary of Terms and Abbreviations SARI Santa Ana River Inceptor SARWQCB Santa Ana Regional Water Quality Control Board SAWPA Santa Ana Watershed Project Authority SCADA Supervisory Control and Data Acquisition system SCAP Southern California Alliance of Publicly Owned Treatment Works SCAQMD South Coast Air Quality Management District SOCWA South Orange County Wastewater Authority SSMP Sanitary Sewer Management Plan SSO Sanitary Sewer Overflow SWRCB State Water Resources Control Board TDS Total Dissolved Solids TMDL Total Maximum Daily Load TSS Total Suspended Solids WDR Waste Discharge Requirements WEF Water Environment Federation WERF Water Environment Research Foundation Activated-sludge process — A secondary biological wastewater treatment process where bacteria reproduce at a high rate with the introduction of excess air or oxygen, and consume dissolved nutrients in the wastewater. Benthos— The community of organisms, such as sea stars, worms and shrimp, which live on, in, or near the seabed, also know as the benthic zone. Biochemical Oxygen Demand (BOD)—The amount of oxygen used when organic matter undergoes decomposition by microorganisms. Testing for BOD is done to assess the amount of organic matter in water. Biosolids — Biosolids are nutrient rich organic and highly treated solid materials produced by the wastewater treatment process. This high-quality product can be recycled as a soil amendment on farm land or further processed as an earth-like product for commercial and home gardens to improve and maintain fertile soil and stimulate plant growth. Capital Improvement Program (CIP) — Projects for repair, rehabilitation, and replacement of assets. Also includes treatment improvements, additional capacity, and projects for the support facilities. Coliform bacteria—A group of bacteria found in the intestines of humans and other animals, but also occasionally found elsewhere used as indicators of sewage pollution. E. coli are the most common bacteria in wastewater. Collections system — In wastewater, it is the system of typically underground pipes that receive and convey sanitary wastewater or storm water. Certificate of Participation (COP) —A type of financing where an investor purchases a share of the lease revenues of a program rather than the bond being secured by those revenues. Glossary of Terms and Abbreviations Contaminants of Potential Concern (CPC) — Pharmaceuticals, hormones, and other organic wastewater contaminants. Dilution to Threshold (D!f) — the dilution at which the majority of the people detect the odor becomes the DrT for that air sample. Greenhouse gases — In the order of relative abundance water vapor, carbon dioxide, methane, nitrous oxide, and ozone gases that are considered the cause of global warming ("greenhouse effect"). Groundwater Replenishment (GWR) System — A joint water reclamation project that proactively responds to Southern California's current and future water needs. This joint project between the Orange County Water District and the Orange County Sanitation District provides 70 million gallons a day of drinking quality water to replenish the local groundwater supply. Levels of Service (LOS)—Goals to support environmental and public expectations for performance. NDMA— N-Nitrosodimethylamine is an N-nitrosoamine suspected cancer-causing agent. It has been found in the Groundwater Replenishment System process and is eliminated using hydrogen peroxide with extra ultra-violet treatment. National Biosolids Partnership (NBP) — An alliance of the National Association of Clean Water Agencies (NACWA) and Water Environment Federation (WEF), with advisory support from the U.S. Environmental Protection Agency (EPA). NBP is committed to developing and advancing environmentally sound and sustainable biosolids management practices that go beyond regulatory compliance and promote public participation in order to enhance the credibility of local agency biosolids programs and improved communications that lead to public acceptance. Plume—A visible or measurable concentration of discharge from a stationary source or fixed facility. Publicly-owned Treatment Works (POTW)— Municipal wastewater treatment plant. Santa Ana River Interceptor (SARI) Line — A regional brine line designed to convey 30 million gallons per day (MGD) of non-reclaimable wastewater from the upper Santa Ana River basin to the ocean for disposal, after treatment. Sanitary sewer — Separate sewer systems specifically for the carrying of domestic and industrial wastewater. Combined sewers carry both wastewater and urban run-off. South Coast Air Quality Management District (SCAQMD) — Regional regulatory agency that develops plans and regulations designed to achieve public health standards by reducing emissions from business and industry. Secondary treatment — Biological wastewater treatment, particularly the activated-sludge process, where bacteria and other microorganisms consume dissolved nutrients in wastewater. Sludge—Untreated solid material created by the treatment of wastewater. Total suspended solids (TSS)—The amount of solids floating and in suspension in wastewater. Trickling filter — A biological secondary treatment process in which bacteria and other microorganisms, growing as slime on the surface of rocks or plastic media, consume nutrients in wastewater as it trickles over them. Glossary of Terms and Abbreviations Urban runoff — Water from city streets and domestic properties that carry pollutants into the storm drains, rivers, lakes, and oceans. Wastewater—Any water that enters the sanitary sewer. Watershed —A land area from which water drains to a particular water body. OCSD's service area is in the Santa Ana River Watershed.