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04 April 24, 2017 Budget & implementationRIVERSIDE COUNTY TRANSPORTATION COMMISSION BUDGET AND IMPLEMENTATION COMMITTEE  www.rctc.org  AGENDA*  *Actions may be taken on any item listed on the agenda 9:30 a.m.  Monday, April 24, 2017  BOARD ROOM  County of Riverside Administrative Center  4080 Lemon Street, First Floor  Riverside, California  In compliance with the Brown Act and Government Code Section 54957.5, agenda materials distributed  72 hours prior to the meeting, which are public records relating to open session agenda items, will be  available for inspection by members of the public prior to the meeting at the Commission office, 4080 Lemon  Street, Third Floor, Riverside, CA, and on the Commission’s website, www.rctc.org.  In compliance with the Americans with Disabilities Act, Government Code Section 54954.2, and the Federal  Transit Administration Title VI, please contact the Clerk of the Board at (951) 787‐7141 if special assistance  is needed to participate in a Commission meeting, including accessibility and translation services.  Assistance  is provided free of charge.  Notification of at least 48 hours prior to the meeting time will assist staff in  assuring reasonable arrangements can be made to provide assistance at the meeting.    1.CALL TO ORDER / ROLL CALL 2.PLEDGE OF ALLEGIANCE 3.PUBLIC COMMENTS – Each individual speaker is limited to speak three (3) continuous minutes or less.  The Committee may, either at the direction of the Chair or by majority vote of the Committee, waive this three minute time limitation.  Depending on the number of items on the Agenda and the number of speakers, the Chair may, at his/her discretion, reduce the time of each speaker to two (2) continuous minutes.  Also, the Committee may terminate public comments if such comments become repetitious.  In addition, the maximum time for public comment for any individual item or topic is thirty (30) minutes.  Speakers may not yield their time to others without the consent of the Chair.  Any written documents to be distributed or presented to the Committee shall be submitted to the Clerk of the Board.  This policy applies to Public Comments and comments on Agenda Items. Under the Brown Act, the Board should not take action on or discuss matters raised during public comment portion of the agenda which are not listed on the agenda.  Board members may refer such matters to staff for factual information or to be placed on the subsequent agenda for consideration. 4.APPROVAL OF MINUTES – MARCH 27, 2017 COMM-BI-00038 Budget and Implementation Committee  April 24, 2017  Page 2   5. ADDITIONS/REVISIONS (The Committee may add an item to the Agenda after making a  finding that there is a need to take immediate action on the item and that the item came to  the attention of the Committee subsequent to the posting of the agenda.  An action adding  an item to the agenda requires 2/3 vote of the Committee.  If there are less than 2/3 of the  Committee members present, adding an item to the agenda requires a unanimous vote.   Added items will be placed for discussion at the end of the agenda.)  6. CONSENT CALENDAR ‐ All matters on the Consent Calendar will be approved in a single  motion unless a Commissioner(s) requests separate action on specific item(s).  Items pulled  from the Consent Calendar will be placed for discussion at the end of the agenda.     6A. SINGLE SIGNATURE AUTHORITY REPORT    Page 1   Overview      This item is for the Committee to:      1) Receive and file the Single Signature Authority report for the third quarter  ended March 31, 2017; and    2) Forward to the Commission for final action.  7. PROPOSED BUDGET FOR FISCAL YEAR 2017/18  Page 3  Overview     This item is for the Committee to:     1) Discuss, review, and provide guidance on the proposed Fiscal Year 2017/18 Budget;  and   2) Forward to the Commission to open the public hearing in order to receive input and  comments on the proposed FY 2017/18 Budget on May 10 and on June 14, 2017, and  thereafter close the public hearing.                                                  Budget and Implementation Committee  April 24, 2017  Page 3   8. INTERSTATE 15 EXPRESS LANES PROJECT AND 91 PROJECT COMPLETION PLANS OF  FINANCE  Page 22  Overview     This item is for the Committee to:     1) Approve the 91 Project Completion Plan of Finance;   2) Approve the I‐15 ELP Plan of Finance regarding the issuance of the 2017 Series A Sales  Tax Revenue Bonds (2017 Bonds) and receipt of a TIFIA loan from the USDOT or, in  the alternative to a TIFIA loan, the issuance of toll revenue bonds;   3) Adopt Resolution No. 17‐006, “Resolution Authorizing the Issuance and Sale of Not to  Exceed $218,760,000 Aggregate Principal Amount of Riverside County Transportation  Commission Sales Tax Revenue Bonds (Limited Tax Bonds) in One or More Series,  Including the Execution and Delivery of a Seventh Supplemental Indenture, a Purchase  Contract, an Official Statement, and a Continuing Disclosure Agreement, and the  Authorization of a Toll Revenue Bond Financing of the I‐15 Express Lanes Project in an  Amount Not To Exceed $165,000,000, Including the Execution and Delivery of a  Master Indenture, a First Supplemental Indenture and a Loan Agreement Relating to  Transportation Infrastructure Finance and Innovation Act Program Credit Assistance,  and the Taking of All Other Actions Necessary in Connection Therewith”;   4) Approve the draft form of the Official Statement for the issuance of 2017 Bonds for  the I‐15 ELP and 91 Project in a not to exceed amount of $218,760,000 and authorize  the Executive Director to revise, approve, and execute the printing and distribution  of the Official Statement;   5) Approve the draft form of the Continuing Disclosure Agreement related to the 2017  Bonds between the Riverside County Transportation Commission and Digital  Assurance Certification, L.L.C., as dissemination agent, and authorize the Executive  Director to revise, approve, and execute the final Continuing Disclosure Agreement;   6) Approve the draft form of the Seventh Supplemental Indenture for the 2017 Bonds  between the Riverside County Transportation Commission and U.S. Bank National  Association (US Bank), as Trustee, and authorize the Executive Director to revise,  approve, and execute the final Seventh Supplemental Indenture;   7) Approve the draft form of the Bond Purchase Agreement between the Riverside  County Transportation Commission and Bank of America Merrill Lynch (BofAML) and  Goldman, Sachs & Co. (Goldman), as Underwriter Representative acting on behalf of  itself and Barclays Capital Inc. (Barclays), Academy Securities (Academy), and Fidelity  Capital Markets. (Fidelity), (collectively the Underwriters), for the 2017 Bonds and  authorize the Chief Financial Officer to revise, approve, and execute the final Bond  Purchase Agreement;    8) Approve the draft form of the Master Indenture between the Riverside County  Transportation Commission and US Bank, as Trustee, related to the Toll Revenue  Bonds for the I‐15 ELP and authorize the Executive Director to revise, approve, and  execute the final Indenture;  Budget and Implementation Committee  April 24, 2017  Page 4    9) Approve the draft form of the First Supplemental Indenture for the I‐15 ELP TIFIA loan  between the Riverside County Transportation Commission and US Bank, as Trustee,  and authorize the Executive Director to revise, approve, and execute the final First  Supplemental Indenture;   10) Approve the draft form of the TIFIA Loan Agreement between the Riverside County  Transportation Commission and the USDOT for an amount not to exceed $165 million  and authorize the Executive Director to revise, approve, and execute the final TIFIA  Loan Agreement;   11) Approve the estimated costs of issuance to be paid from the bond proceeds and  execution of related agreements, as required; and   12) Forward to the Commission for final action.      9. STATE LEGISLATIVE UPDATE  Page 310  Overview     This item is for the Committee to:     1) Adopt the following bill positions:  a) AB 1523 (Obernolte) – Support;   b) SB 150 (Allen) – Oppose;   c) SB 264 (Nguyen) – Oppose;   d) SB 477 (Cannella) – Support;    2) Receive and file an update on state legislation; and   3) Forward to the Commission for final action.      10. AGREEMENT FOR THE DEVELOPMENT OF A COUNTYWIDE LONG RANGE  TRANSPORTATION PLAN  Page 314  Overview     This item is for the Committee to:     1) Award Agreement No. 17‐65‐071‐00 to VRPA Technologies, Inc. for the development  of a long range transportation plan (LRTP) for a two‐year term, in an amount of  $963,002, plus a contingency amount of $96,300, for a total amount not to exceed  $1,059,302;   2) Authorize the Chair or Executive Director, pursuant to legal counsel review, to  execute the agreement on behalf of the Commission;   3) Authorize the Executive Director or designee to approve the use of the contingency  amount as may be required for these services; and   4) Forward to the Commission for final action.              Budget and Implementation Committee  April 24, 2017  Page 5   11. AMENDMENT TO COMMISSION’S RAIL PROGRAM SHORT RANGE TRANSIT PLANS    Page 336  Overview     This item is for the Committee to:     1) Amend the Commission’s Commuter Rail Program’s FY 2016/17 Short Range Transit  Plan (SRTP), as follows:   a) Allocate $16,956,682 of Federal Transit Administration (FTA) Section 5307  Grant funds to the 2017 Riverside County Rail Passenger Efficiency Upgrades  project; and  b) Allocate $16,816,916 of FTA Section 5337 Grant funds to the 2017 Commuter  Rail State of Good Repair project; and   2) Forward to the Commission for final action.      12. SHORT RANGE TRANSIT PLAN AMENDMENT TO RIVERSIDE TRANSIT AGENCY’S FISCAL  YEAR 2016/2017 CAPITAL ASSISTANCE PROGRAM  Page 339  Overview     This item is for the Committee to:     1) Approve modification to Riverside Transit Agency’s (RTA) FY 2016/17 capital  assistance program to reflect an additional $688,570 in FY 2013/14 and FY 2014/15  Federal Transit Administration (FTA) Section 5339 Hemet urbanized area (UZA) funds  to cover capital expenses related to the new Hemet Facility Maintenance project and  allocate $172,143 in State Transit Assistance (STA) funds to provide required match  for the FTA Section 5339 funds;    2) Amend RTA’s FY 2016/17 capital assistance program to reflect an additional  $1,492,532 in FY 2015/16 California Low Carbon Transit Operation Program (LCTOP)  funds received for the UCR Mobility Hub;   3) Reprogram the Local Transportation Fund (LTF) capital amount of $2,400,000  originally identified for the Twin Cities Transit Center and move the funds to RTA’s  new Operations and Maintenance Facility project;   4) Approve amendments to RTA’s Short Range Transit Plans (SRTP) to reflect the  changes outlined above; and   5) Forward to the Commission for final action.                                  Budget and Implementation Committee  April 24, 2017  Page 6   13. REQUEST TO JOIN THE CALIFORNIA VANPOOL AUTHORITY  Page 342  Overview     This item is for the Committee to:     1) Adopt Resolution No. 17‐009, “Resolution of the Riverside County Transportation  Commission Resolving to Join the California Vanpool Authority”;   2) Authorize the Executive Director or designee to transmit a request to the California  Vanpool Authority (CalVans) board to approve the Commission to join the joint  powers authority;   3) Authorize the Executive Director, pursuant to legal counsel review, to execute an  addendum to the joint powers agreement to form CalVans to memorialize the  Commission’s membership;    4) Authorize the Chair or Executive Director, pursuant to legal counsel review, to  execute Agreement No. 17‐45‐089‐00 with SunLine Transit Agency (SunLine) to  approve the operation of the SunLine Vanpool Program (SolVan) under the terms and  conditions of the Commission’s membership in CalVans;   5) Authorize the Chair to appoint one member and one alternate to serve on the  CalVans board; and    6) Forward to the Commission for final action.      14. CITIZENS ADVISORY COMMITTEE/SOCIAL SERVICES TRANSPORTATION ADVISORY  COMMITTEE MEMBERSHIP NOMINATIONS  Page 382  Overview     This item is for the Committee to:     1) Approve member re‐appointments to the Citizens Advisory Committee/Social  Services Transportation Advisory committee (CAC/SSTAC) effective May 10, 2017;  and   2) Forward to the Commission for final action.                                                  Budget and Implementation Committee  April 24, 2017  Page 7   15. FISCAL YEAR 2017/18 SAN BERNARDINO COUNTY TRANSPORTATION AUTHORITY  AGREEMENT FOR INLAND EMPIRE RIDESHARE AND 511 SERVICES  Page 385  Overview     This item is for the Committee to:     1) Approve Agreement No. 17‐45‐088‐00 with the San Bernardino County  Transportation Authority (SBCTA) to reimburse the Commission in an amount not to  exceed $1.3 million for Fiscal Year 2017/18 commuter/employer rideshare and Inland  Empire 511 (IE511) programs administered by the Commission, on behalf of both  agencies, as part of an ongoing bi‐county partnership;    2) Authorize the Chair or Executive Director, pursuant to legal counsel review, to  execute the agreement on behalf of the Commission; and   3) Forward to the Commission for final action.    16. ITEM(S) PULLED FROM CONSENT CALENDAR AGENDA    17. COMMISSIONERS / STAFF REPORT     Overview     This item provides the opportunity for the Commissioners and staff to report on attended  and upcoming meeting/conferences and issues related to Commission activities.    18. ADJOURNMENT AND THE NEXT MEETING      The next Budget and Implementation Committee meeting is scheduled to be held at  9:30 a.m., Monday, May 22, 2017, Board Chambers, First Floor, County Administrative  Center, 4080 Lemon Street, Riverside.    Riverside Counly Transportation Commission TO: FROM: DATE: SUBJECT: Riverside County Transportation Commission Jennifer Harmon, Clerk of the Board April 19, 2017 Possible Conflicts of Interest Issues -Budget and Implementation Committee Agenda of April 24, 2017 The April 24 agenda of the Budget and Implementation Committee includes items which may raise possible conflicts of interest. A RCTC member may not participate in any discussion or action concerning a contract or amendment if a campaign contribution of more than $250 is received in the past 12 months or 3 months following the conclusion from any entity or individual listed. Agenda Item No. 10 -Agreement for the Development of a Countvwide Long Range Transportation Plan Consultant(s): VRPA Technologies, Inc. Georgiena Vivian, President 4630 W. Jennifer, Suite 105 Fresno, CA 93722 RIVERSIDE COUNTY TRANSPORTATION COMMISSION BUDGET AND IMPLEMENTATION COMMITTEE ROLL CALL APRIL 24, 2017 County of Riverside, District II County of Riverside, District Ill City of Beaumont City of Calimesa City of Canyon Lake City of Cathed ra I City City of Coachella City of Desert Hot Springs City of Hemet City of Indian Wells City of Lake Elsinore City of Murrieta City of Palm Desert City of Riverside City of Temecula Present a D ; '?I D a D ;zr D ~ ~ , Absent * a D a ~ g ~ D LI D LI Alexandra Rackerby From: Sent: To: Subject: Attachments: Alexandra Rackerby Thursday, April 20, 2017 8:53 AM Alexandra Rackerby RCTC Budget and Implementation Committee -lpad compatible users Conflict of Interest Form.pdf; Conflict of Interest Memo.81_04.24.17.pdf Good morning Commissioners, The Budget and Implementation Committee agenda for Monday, April 24, 2017 is posted on our Website at http://www. rctcdev. info/uploads/media items/budget-a nd-i m plementatio n-com m ittee-a pril-24-2017 .origi na I .pdf Also, attached is the Conflict of Interest Memo and Form for your information. Let me know if you have any questions or concerns. Thank you. Respectfully, Allie Rackerby Records Technician Riverside County Transpol'lalion Commission PO Box 12008, Rivetside. CA 92502-2208 4080 Lemon Street, 3111 Floor, Riverside, CA 92501 {951) 787-71411 rclc.org 1 AGENDA ITEM 4 MINUTES RIVERSIDE COUNTY TRANSPORTATION COMMISSION    BUDGET AND IMPLEMENTATION COMMITTEE    Monday, March 27, 2017    MINUTES    1. CALL TO ORDER / ROLL CALL    The meeting of the Budget and Implementation Committee was called to order by  Vice Chair Rusty Bailey at 9:33 a.m., in the Board Room at the County of Riverside  Administrative Center, 4080 Lemon Street, First Floor, Riverside, California, 92501.    Members/Alternates Present Members Absent     Rusty Bailey Jan Harnik  Nancy Carroll Steven Hernandez  Dawn Haggerty Greg Pettis  Jim Hyatt   Rick Gibbs   Linda Krupa   Bob Magee   Scott Matas   Michael Naggar   Dana Reed   John Tavaglione   Chuck Washington      2. PLEDGE OF ALLEGIANCE    At this time, Commissioner John Tavaglione led the Budget and Implementation  Committee in a flag salute.    3. PUBLIC COMMENTS    There were no requests to speak from the public.     4. APPROVAL OF MINUTES – FEBRUARY 27, 2017    M/S/C (Krupa/Hyatt) to approve the minutes of February 27, 2017 meeting as  submitted.      RCTC Budget and Implementation Committee Minutes  March 27, 2017  Page 2  5. ADDITIONS / REVISIONS    There were no additions or revisions to the agenda.    At this time, Theresia Trevino, Chief Financial Officer, left the meeting.     6. AGREEMENT FOR INVESTMENT MANAGEMENT SERVICES FOR THE INTERSTATE 15  EXPRESS LANES    Megan Kavand, Senior Financial Analyst, presented the scope of the agreement for  investment management services for the Interstate 15 Express Lanes.    M/S/C (Gibbs/Matas) to:    1) Award Agreement No. 17‐19‐050‐00 to Logan Circle Partners, L.P. for the  provision of investment management services for the I‐15 Express Lanes  project for a five‐year term, and two, one‐year options to extend the  agreement, for a total amount not to exceed $400,000;  2) Authorize the Chair or Executive Director, pursuant to legal counsel  review, to execute the agreement, including option years, on behalf of  the Commission; and  3) Forward to the Commission for final action.    Theresia Trevino rejoined the meeting.    7. STATE AND FEDERAL LEGISLATIVE UPDATE     Jillian Guizado, Senior Legislative Affairs Analyst, presented an update on state and  federal legislation, including three recommended bill positions.    In response to Commissioner Dana Reed’s question regarding opposition to AB 1189,  Jillian Guizado responded staff is not aware of any opposition at this time.    Commissioner Chuck Washington discussed SCA 11, which is not part of this agenda item.   It seeks to turn judicial, school, city, and county offices into partisan offices.  The California  State Association of Counties is opposing this amendment and Commissioner Washington  requested it be agendized for consideration.    At Commissioner Dawn Haggerty’s request for clarification as to why the Commission  opposed AB 91, Executive Director Anne Mayer explained this bill focuses solely on  Riverside County.  Staff does not believe freeway operations should be mandated by law  as Caltrans already has that authority.  Additionally, the Commission would be required  to repay federal funds or construct substitute projects that would meet or exceed the air  quality improvements originally proposed by the HOV projects.    RCTC Budget and Implementation Committee Minutes  March 27, 2017  Page 3    Vice Chair Bailey discussed the importance of SB 1, noting the Fix Our Road Coalition’s  support, and asked for the Commission’s position on this bill and what Commissioners  can do to educate their constituents.    Anne Mayer responded staff has not brought a recommended position forward to the  Commission for action.  The Commission has adopted the 2017 State and Federal  Legislative Platform that outlines the positions the Commission will take on various pieces  of legislation, administrative policies, and regulations.  Staff can provide estimates of the  funding each jurisdiction would receive should a version of the bill pass.    M/S/C (Gibbs/Haggerty) to:    1) Adopt the following bill positions:  a) AB 179 (Cervantes) – Oppose;  b) AB 408 (Chen) – Oppose;   c) AB 697 (Fong) – Oppose;  2) Receive and file an update on state and federal legislation; and  3) Forward to the Commission for final action.    8. ADVANCE OF LOCAL TRANSPORTATION FUND FUNDS IN SUPPORT OF CONTINUED BUS  OPERATIONS    Robert Yates, Multimodal Services Director, presented the details of the advance of Local  Transportation Fund (LTF) funds in support of continued bus operations for Riverside  Transit Agency (RTA) and SunLine Transit Agency (SunLine).    M/S/C (Gibbs/Reed) to:    1) Approve an advance of LTF funds in the amount of $9.5 million to the RTA  until such time that the appropriation of the remainder of FFY 2016/17  Federal Transit Administration (FTA) Section 5307 funds are released to  RTA;   2) Approve an advance of LTF funds in the amount of $3 million to SunLine  until such time that the appropriation of the remainder of FFY 2016/17  FTA Section 5307 funds are released to SunLine; and  3) Forward to the Commission for final action.    9. BLYTHE WELLNESS EXPRESS PROJECT    Monica Morales, Management Analyst, presented the details of the Blythe Wellness  Express project.     RCTC Budget and Implementation Committee Minutes  March 27, 2017  Page 4  In response to Commissioner Haggerty’s question regarding the type of transportation  that will be used for this program as RTA has a program in which it donates refurbished  buses, Robert Yates stated the city of Blythe has identified a vehicle for this program and  is also participating in the FTA Section 5310 Call for Projects to obtain a new vehicle.  Staff  is aware of the RTA program and has worked with RTA in the past to donate several  vehicles.  Mr. Yates thanked Commissioner Haggerty for her comments.    M/S/C (Reed/Matas) to:    1) Approve Memorandum of Understanding (MOU) and Subrecipient  Agreement No. 17‐26‐076‐00 with Palo Verde Valley Transit Agency  (PVVTA) for the Blythe Wellness Express (BWE);   2) Authorize the Chair or Executive Director, pursuant to legal counsel  review, to execute the agreement on behalf of the Commission;   3) Approve an increase of $31,000 to the FY 2016/17 budget expenditures  and federal revenues; and  4) Forward to the Commission for final action.    10. COMMISSIONERS / EXECUTIVE DIRECTOR REPORT    Anne Mayer reported on the opening of the 91 Express Lanes on March 20 and reminded  Commissioners the dedication ceremony for the 91 Project is scheduled for Friday,  March 31, at 11 a.m. at the North Main Corona Parking Structure.     11. ADJOURNMENT    There being no further business for consideration by the Budget and Implementation  Committee, the meeting was adjourned at 10:17 a.m.    Respectfully submitted,    Jennifer Harmon  Clerk of the Board  AGENDA ITEM 6A Agenda item 6A  RIVERSIDE COUNTY TRANSPORTATION COMMISSION  DATE: April 24, 2017  TO: Budget and Implementation Committee  FROM: Matt Wallace, Procurement Manager  Jose Mendoza, Procurement Analyst  THROUGH: Theresia Trevino, Chief Financial Officer   SUBJECT: Single Signature Authority Report  STAFF RECOMMENDATION:  This item is for the Committee to:  1)Receive and file the Single Signature Authority report for the third quarter ended March 31, 2017; and 2)Forward to the Commission for final action. BACKGROUND INFORMATION:  Certain contracts are executed under single signature authority as permitted in the  Commission’s Procurement Policy Manual adopted in September 2015.  The Executive Director  is authorized to sign services contracts that are less than $150,000 individually and in an  aggregate amount not to exceed $1 million in any given fiscal year.  Additionally, in accordance  with Public Utilities Code Section 130323(c), the Executive Director is authorized to sign  contracts for supplies, equipment, materials, and construction of all facilities and works under  $50,000 individually.  The attached report details all contracts that have been executed for the third quarter ended  March 31, 2017, under the single signature authority granted to the Executive Director.  The  unused capacity of single signature authority for services at March 31, 2017 is $713,000.  Attachment:  Single Signature Authority Report as of March 31, 2017.  1 CONSULTANTDESCRIPTION OF SERVICESORIGINAL CONTRACT AMOUNTPAID AMOUNTREMAINING CONTRACT AMOUNTAMOUNT AVAILABLE July 1, 2016$1,000,000.00Smith, Watts & HartmanState Legislative Advocacy Services18,000.0018,000.000.00Alvarado SmithLegal Services16,000.0014,370.03 1,629.97S&P Global RatingsRating evaluation service for indicative rating related to I-15 Express Lanes TIFIA loan and toll revenue bonds100,000.0075,000.00 25,000.00Connected ConsultingPublic Engagement and Education Strategy Efforts40,000.000.00 40,000.00ExigentInformation Technology Support Services75,000.0058,467.56 16,532.44Revenue & Cost Specialists, LLCCost Allocation Plan Consultant18,000.000.0018,000.00Regents of University of CACustomized Staff Training Programs20,000.000.0020,000.00AMOUNT USED287,000.00287,000.00$713,000.00NoneN/A$- $- $- Jose MendozaTheresia TrevinoPrepared byReviewed byAMOUNT USEDSINGLE SIGNATURE AUTHORITYAS OF March 31, 2017Note: Shaded area represents new contracts listed in the first quarter.AMOUNT REMAINING through March 31, 2017Agreements that fall under Public Utilities Code 130323 (C)V:\2017\05 May\B&I\6A.JM.Att1.SingleSignQ3.xlsx2 AGENDA ITEM 7 Agenda Item 7  RIVERSIDE COUNTY TRANSPORTATION COMMISSION  DATE: April 24, 2017  TO: Budget and Implementation Committee  FROM: Michele Cisneros, Deputy Director of Finance  THROUGH: Theresia Trevino, Chief Financial Officer  SUBJECT: Proposed Budget for Fiscal Year 2017/18    STAFF RECOMMENDATION:    This item is for the Committee to:    1) Discuss, review, and provide guidance on the proposed Fiscal Year 2017/18 Budget; and  2) Forward to the Commission to open the public hearing in order to receive input and  comments on the proposed FY 2017/18 Budget on May 10 and on June 14, 2017, and  thereafter close the public hearing.    BACKGROUND INFORMATION:    Staff completed the initial budget preparation process, and attached is an executive summary for  the proposed FY 2017/18 Budget.  The policy goals and objectives approved by the Commission  on March 8 were the basis of this budget.  The long‐term policy goals that support the  Commission’s objectives considered during the preparation of the budget relate to promote  mobility; mitigate and address impact of goods movement; encourage economic development;  ensure improved system efficiencies; foster environmental stewardship; support transportation  choices through intermodalism and accessibility; prioritize public and stakeholder  communications; and maintain fiscal and organizational accountability.    Staff will present highlights of significant items included in the budget and is seeking review of  and input on the proposed FY 2017/18 Budget.  Based on input received from Commissioners,  staff will update the document, as necessary, and present the proposed budget for the opening  of the public hearing and for the Commission’s review on May 10.  As a result of input received  from the public and the Commission, staff will make any necessary changes to the budget  document for final review, close of the public hearing, and adoption at its June 14 Commission  meeting.     The executive summary document contains a summary of all departmental budgets and  summarizes the information for the Commission.  The department budgets present the goals and  objectives, the resources needed to accomplish the goals, and the appropriations required to  accomplish the tasks.  Staff also included the budgets by fund type, as this table provides a  summary of the budgeted revenues and expenditures/expenses from a fund perspective.   3 Agenda Item 7  Preliminary funding estimates for transit operating and capital expenditures have been included  in the budget, although the draft Short Range Transit Plans are still under review.  An adjustment  for a revised estimate of these transit expenditures may be included in the final budget document  presented in June 2017.     At the June 14 Commission meeting, staff will present the entire budget document with detailed  narratives.      A summary of the proposed FY 2017/18 Budget is as follows:     FY 2017/18 Budget  Revenues and other financing sources:      Sales taxes‐Measure A and Local Transportation Funds  $ 264,000,000     Reimbursements (federal, state, and other)   98,648,100     Transportation Uniform Mitigation Funds, including  reimbursements    21,250,000     State Transit Assistance   10,469,000  Toll revenues   16,835,800     Other revenues   248,000     Interest on investments   3,516,700     Debt proceeds   285,652,000     Transfers in   295,634,900  Total revenues and other financing sources   996,254,500     Expenditures and other financing uses:      Personnel salaries and fringe benefits   9,554,200     Professional services   17,871,100     Support services   11,643,200     Projects and operations   625,197,700     Capital outlay   5,380,000     Debt service (principal and interest)   102,668,200     Transfers out   295,634,900  Total expenditures and other financing uses   1,067,949,300     Excess (deficiency) of revenues and other financing sources over  (under) expenditures and other financing uses          (71,694,800)     Beginning fund balance (projected)   678,545,600  Ending fund balance (projected) $  606,850,800    Attachment:  Executive Summary for the Proposed FY 2017/18 Budget     4 Executive Summary    Introduction    The budget for Fiscal Year (FY) 2017/18 is presented to the Board of Commissioners (Board) and the citizens of  Riverside County. The budget outlines the projects the Commission plans to undertake during the year and  appropriates expenditures to accomplish these tasks. The budget also shows the funding sources and fund  balances that will be used for these projects. This document will serve as the Commission’s monetary guideline. To  provide the reader a better understanding of the projects, staff has included descriptive information regarding  each department and major projects. The discussion in each department includes a review of accomplishments,  major initiatives, and key assumptions.    Staff used the goals and objectives approved at the Commission meeting on March 8, 2017 to prepare this budget.  In addition to the Commission’s guiding principles, long‐term goals, and strategic plan, the short‐term factors  listed below were used to guide the development of the budget.    Operational   Aggressively pursue completion of the State Route (SR) 91 project (91 Project) and development of the  Interstate (I) 15 Express Lanes, Mid County Parkway, and SR‐79 realignment projects included in the  Western Riverside County Delivery Plan, as these projects create jobs and improve the economic base in  the County.  (Mobility, Economic Development)   Enhance corridor mobility and traveler choice with the operation of the tolled 91 Express Lanes and the  continued development of tolled express lanes on I‐15.  (Mobility)    Provide leadership in the planning and development of the Coachella Valley‐San Gorgonio Pass corridor  rail service.  (Mobility)   Work closely with local jurisdictions to implement the Transportation Uniform Mitigation Fee (TUMF)  regional arterial program projects and facilitate the delivery of eligible arterial improvements in western  Riverside County (Western County).  (Mobility)   Work closely with partners in the Coachella Valley to ensure the implementation of Measure A funding  priorities.  (Mobility)   Work with local and regional agencies in developing resources for preservation and maintenance of the  highways and regional arterials.  (System E fficiencies)    Continue active engagement in state and federal efforts to streamline and modernize the California  Environmental Quality Act (CEQA) and the National Environmental Policy Act (NEPA) to improve the  Commission’s ability to deliver critical projects.  (Mobility, Environmental Stewardship)   Support innovative programs that provide transit assistance in hard to serve rural areas or for riders with  special transit needs.  (Intermodalism & Accessibility)   Support cost controls and promote operating efficiency for transit operators.  (Intermodalism &  Accessibility, System Efficiencies)   Maintain effective partnerships among commuters, employers, and government to increase the efficiency  of our transportation system by encouraging and promoting motorized and non‐motorized transportation  alternatives.  (Intermodalism & Accessibility, System Efficiencies)   Continue to provide a motorist aid system that ensures safety and convenience to freeway motorists.   (System Efficiencies)    Maintain an active involvement in state and federal legislative matters to ensure that the Commission  receives proper consideration for transportation projects and funding.  (Communications)   Explore local options for sustainable funding in addressing long‐term transportation and quality‐of‐life  needs for the County.  (Communications, Environmental Stewardship)   Commence the first ten‐year update of the 2009 Measure A Expenditure Plan, as required by the  ordinance, and initiate the development of a county‐wide transportation plan. (Mobility)   Develop and implement express lane marketing and promotion campaigns for the 91 Express Lanes to  increase customer accounts and lane usage. (Communications, Mobility)   Maintain close communication with Commissioners and educate policy makers on all issues of importance  to the Commission.  (Communications)  5  Develop and execute a communications and public engagement strategy for the purposes of education,  information, and customer service. (Communications)    Financial   Fund administrative costs with allocations from program funding sources.  (Financial Planning)   Maintain administrative program delivery costs below the policy threshold of 4% of Measure A revenues;  the FY 2017/18 Management Services budget is 1.64% of Measure A revenues.  (Financial Planning,  Expenditures)   Maintain administrative salaries and benefits at less than 1% of Measure A revenues; the FY 2017/18  administrative salaries and benefits is .54% of Measure A revenues.  (Financial Planning, Expenditures)   Continue to maintain prudent cash reserves to provide some level of insulation for unplanned  expenditures.  (Reserves, Cash Management & Investment)   Continue to maintain current strong bond ratings with rating agencies.  (Debt Management)   Move forward on Measure A projects for highways and regional arterials using sales tax revenues, TUMF  revenues, and state and federal funding as well as financing alternatives such as commercial paper, sales  tax revenue bonds, toll revenue bonds, and federal loans.  (Debt Management, Expenditures)   Establish and maintain revenues and reserves generated from toll operations to be available for debt  service in accordance with toll supported debt agreements; maintenance, repair, rehabilitation,  administration and operations; and capital projects within the corridor.  (Reserves, Revenues)    Conduct enhanced outreach to businesses and contractors located in the County regarding opportunities  to provide competitive and qualified goods and/or services to the Commission.  (Procurement)   Maintain the enterprise resource planning (ERP) system to integrate project accounting needs and  improve accounting efficiency.  (Auditing, Accounting & Financial Reporting)   Manage Commission projects and programs, including toll operations, with a small but effective staff by  augmenting staff efforts with contract staff and consultants.  (Human Resources Management)    Budget Overview    Total sources (Table 1) are budgeted at $996,254,500 which is an increase of 35% over FY 2016/17 projected  sources and a 24% increase over the FY 2016/17 revised budget. Total sources are comprised of revenues of  $414,967,600, transfers in of $295,634,900, and debt proceeds of $285,652,000. The projected fund balance at  June 30, 2017 available for expenditures/expenses (excluding reserves for debt service of $48,151,000 and  advances receivable of $28,476,500) is $601,918,100. Accordingly, total funding available for the FY 2017/18  budget totals $1,598,172,600.    Table 1 – Sources FY 2016‐2018   FY 15/16 FY 16/17 FY 16/17 FY 17/18 Dollar Percent Actual Revised Budget Projected Budget Change Change Measure A Sales Tax 167,630,300$       173,000,000$        173,000,000$          176,000,000$        3,000,000$            2% LTF Sales Tax 83,776,500           85,000,000            85,000,000             88,000,000           3,000,000               4% STA Sales Tax 13,358,000           10,821,600            10,821,600             10,469,000           (352,600)                  ‐3% Intergovernmental 76,821,400           59,242,300            33,985,900             98,648,100           39,405,800            67% TUMF Revenue 19,831,300           18,520,000            18,850,000             21,250,000           2,730,000               15% Toll Revenue ‐                             3,798,000              3,239,700               16,835,800           13,037,800            343% Other Revenue 7,295,600              2,518,000              268,500                   248,000                  (2,270,000)             ‐90% Investment Income 8,592,800              1,849,000              4,715,600               3,516,700             1,667,700               90% Transfers In 162,708,700         241,966,700          192,895,500           295,634,900         53,668,200            22% Debt Proceeds 248,792,200         203,494,200            212,500,200             285,652,000           82,157,800            40% TOTAL Sources 788,806,800$       800,209,800$        735,277,000$          996,254,500$        196,044,700$        24%   Riverside County has specific competitive advantages over nearby coastal counties (Los Angeles, Orange, and San  Diego) including housing that is more available and affordable as well as plentiful commercial real estate and land  available for development at lower costs.  Riverside County’s economy is benefitting from employment gains that  are a function of the County’s ability to attract businesses with lower commercial rents and a skilled labor force.   Population migration to the Inland Empire (i.e., Riverside and San Bernardino counties) has occurred due to these  employment opportunities and a lower cost of living compared to the coastal counties.  Improvements in the local  6 labor market and resurgence in home sales has increased economic activity contributing to stable sales tax  revenue growth as noted on Chart 1.    Chart 1 – Sources:  Five‐Year Trend  $0 $100,000,000 $200,000,000 $300,000,000 $400,000,000 $500,000,000 $600,000,000 $700,000,000 FY 13/14 FY 14/15 FY 15/16 FY 16/17 FY 17/18 Measure A Sales Tax LTF Sales  Tax STA Sales Tax TUMF Federal, State, Local Revenues Toll Revenue Transfers In Debt Proceeds   Sales tax revenues have continued to remain stable during the last five fiscal years.  The Commission’s economic  outlook for FY 2017/18 continues to be cautiously optimistic; however, the state and federal budget issues  continue to affect funding of the Commission’s capital projects and programs. Should Measure A and Local  Transportation Fund (LTF) sales tax revenues fluctuate and the availability of federal and state revenues continue  to be uncertain, the timing and scope of the Commission’s projects and programs may be impacted.    While the Commission’s primary revenues are the Measure A and LTF sales taxes, other revenues and financing  sources are required to fund the Commission’s programs and projects as illustrated in Chart 2.    Chart 2 – Sources: Major Categories  Measure A Sales Tax17% LTF Sales Tax 9% STA Sales Tax 1% Intergovernmental 10% TUMF Revenue2% Toll Revenue 2% Investment Income0%Transfers  In30% Debt Proceeds29%     The State Board of Equalization (SBOE or State) recently provided to cities and other agencies its projections that  statewide taxable sales over the next fiscal year will increase 4.4%; however, the Commission is not basing its  estimate of revenues solely on the SBOE’s projection and will continue its conservative projection practices. After  7 taking the state of the local economy and recent revenue trends into consideration, staff projects Measure A sales  tax revenues of $176,000,000 for FY 2017/18.   This is a 2% increase from the FY 2016/17 revised projection of  $173,000,000. At midyear the Commission will reassess sales tax revenue projections based on the economy and  revenue trends.      On behalf of the County, the Commission administers the LTF for public transportation needs, local streets and  roads, and bicycle and pedestrian facilities. The majority of LTF funding received by the County and available for  allocation is distributed to all public transit operators in the County, and the Commission receives allocations for  administration, planning, and programming in addition to funding for Western County rail operations included in  the commuter rail Short Range Transit Plan (SRTP). The LTF sales tax revenue received from the State is budgeted  at $88,000,000, an increase of 4% from the FY 2016/17 revised projection of $85,000,000.      State Transit Assistance (STA) funds generated from the statewide sales tax on motor vehicle fuel are allocated by  formula by the State Controller to the Commission for allocations to the County’s public transit operators. The STA  transit allocation, which is based on recent State estimates, for FY 2017/18 is $10,469,000.    Intergovernmental revenues include reimbursement revenues from federal sources of $77,877,100, state sources  of $11,500,200, and local agencies of $9,270,800 for highway and rail capital projects, rail operations and station  maintenance, commuter assistance, and motorist assistance programs as well as planning and programming  activities. The significant increase of 67% in FY 2017/18 compared to the FY 2016/17 revised budget is related to  federal reimbursements for the I‐15 Express Lanes and Pachappa Underpass projects.  Reimbursement revenues  vary from year to year depending on project activities and funding levels.      As a result of an amended Memorandum of Understanding (MOU) with the Western Riverside Council of  Governments (WRCOG), the Commission will receive 48.7% of TUMF revenues (as updated by the most recent  Nexus study). TUMF represents fees assessed on new residential and commercial development in Western County.  FY 2017/18 TUMF fees are projected at $20,000,000 and are slightly higher than the FY 2016/17 revised projection  of $18,850,000 and reflect the resurgence in the housing market in the Inland Em pire. Additional TUMF zone  reimbursements of $1,250,000 are expected for the Lake Elsinore Railroad Canyon project.      FY 2016/17 marked the initial year of toll operations for the Riverside 91 Express Lanes following substantial  completion of the 91 Project in March 2017. Estimated toll revenues of $16,835,800 for FY 2017/18 are derived  from the Riverside County 91 Express Lanes Extension Investment Grade Traffic and Revenue Report and 2013  financing assumptions.       Other revenue of $248,000 is related to property management generated from properties acquired in connection  with the 91 Project and various rail properties.     Investment income in FY 2017/18 is anticipated to increase by $1,667,700 or 90% compared to the FY 2016/17  budget as the result of higher cash balances in connection with the I‐15 Express Lanes project financing.     Transfers in of $295,634,900 relate primarily to the transfer of available debt proceeds for highway projects; LTF  funding for general administration, planning and programming, rail operations and station maintenance, and  grade separation project allocations; approved interfund allocations for specific projects and administrative cost  allocations; and debt service requirements from highway, regional arterial, and local streets and roads funds. Debt  proceeds consist of draw downs of $88,000,000 from the federal Transportation Infrastructure Finance and  Innovation Act (TIFIA) loan and issuance of $178,760,000 in sales tax revenue bonds and commercial paper notes  and associated bond premium of $18,892,000 related to the I‐15 Express Lanes project and 91 Project completion  financing.    Total uses (Table 2), including transfers out of $295,634,900, are budgeted at $1,067,949,300, an increase of 3%  from the prior year revised budget amount of $1,032,819,500. Program expenditures and transfers out totaling  $942,373,400 represent 88% of total budgeted uses in FY 2017/18. Program costs have increased by 9% from  $864,261,400 in FY 2016/17 due to projects identified below.    8 Table 2 – Uses FY 2016‐2018  FY 15/16 FY 16/17 FY 16/17 FY 17/18 Dollar Percent Actual Revised Budget Projected Budget Change Change Capital Highway, Rail, and Regional Arterials 607,285,200$       603,953,000$        438,568,100$          662,615,300$        58,662,300$          10% Capital Local Streets and Roads 49,826,500           51,358,000            51,358,000             52,936,000           1,578,000               3% Commuter Assistance 2,808,100              3,587,500              3,265,600               5,064,900             1,477,400               41% Debt Service 53,435,100           149,260,800          137,465,400           102,668,200         (46,592,600)           ‐31% Management Services 15,600,700           19,297,300            18,658,700             22,907,700           3,610,400               19% Motorist Assistance 5,104,100              6,952,400              5,630,600               6,000,500             (951,900)                 ‐14% Planning and Programming 3,405,900              11,576,400            2,704,700               13,489,000           1,912,600               17% Public and Specialized Transit 94,756,100           139,197,300          109,186,700           146,978,500         7,781,200               6% Rail Maintenance and Operations 19,966,100           41,083,700            26,455,400             37,436,500           (3,647,200)             ‐9% Toll Operations ‐                             6,553,100              3,859,600               17,852,700           11,299,600            172% TOTAL  Uses 852,187,800$       1,032,819,500$     797,152,800$          1,067,949,300$    35,129,800$          3% Note:  Management Services includes Executive Management, Administration, External Affairs, and Finance.    Capital highway, rail, and regional arterials budgeted uses of $662,615,300 are 10% higher compared to the FY  2016/17 budget due to continued right of way support for the 91 Project and design build and construction on the  I‐15 Express Lanes project.      Local streets and roads expenditures of $52,936,000 reflect an increase of 3% over the FY 2016/17 budget and  represent the disbursements to local jurisdictions for the construction, repair, and maintenance of local streets  and roads.      Commuter assistance budgeted expenditures of $5,064,900 are 41% higher than FY 2016/17 budget due to a  $1,500,000 transfer out for a Western County public transit project.       Debt service of $102,668,200 has decreased 31% as a result of the refunding of $63,900,000 of sales tax revenue  bonds in FY 2016/17 compared to the anticipated retirement of $20,000,000 in commercial paper notes in  connection with the I‐15 Express Lanes project financing in FY 2017/18.     Management services expenditures have increased 19% or $3,610,400 from the FY 2016/17 budget due to  information technology equipment upgrades, expansion of office space, robust communication and engagement  efforts, financial advisory services, and debt service contribution.      Motorist assistance expenditures have decreased 14% or $951,900 from the FY 2016/17 budget as a result of  reduction in IE511 costs and call box hardware upgrades in the prior year.      Planning and programming budgeted expenditures of $13,489,000 reflect a 17% increase from the FY 2016/17  budget due to increased projects and operations activities in connection with LTF disbursements for planning and  programming, signal synchronization projects, and Fundtrak project database upgrades.     Public and specialized transit budgeted expenditures of $146,978,500 are 6% higher than the FY 2016/17 budget  due to increased transit capital expenditures for public transit.       The 9% decrease in rail maintenance and operation’s budgeted expenditures of $37,436,500 is primarily related to  Coachella Valley‐San Gorgonio Pass corridor activities.      Toll operations expenses are budgeted at $17,852,700 to manage the operations, maintenance, and capital  support of the Riverside 91 Express Lanes for a full fiscal year.  The FY 2016/17 budget represents approximately  one‐half year of operations.   Total uses included in the FY 2017/18 budget by major categories are illustrated in Chart 3.    9 Chart 3 – Uses: Major Categories  Capital Highway, Rail, and  Regional Arterials 62% Capital Local Streets and Roads 5% Commuter Assistance 0% Debt  Service 10% Management Services 2% Motorist Assistance 1% Planning and Programming  1% Public and Specialized Transit 14% Rail Maintenance and  Operations 3% Toll Operations 2%   Commission Personnel    The Commission’s salaries and benefits total $9,554,200 for FY 2017/18. This is comparable to the FY 2016/17  revised budget of $9,505,100 (Chart 4) and includes a 4% pool for merit‐based salary increases.  The Commission’s  salary schedule for FY 2017/18 is included in Appendix B and complies with Government Code §20636  “Compensation Earnable” and California Code of Register §570.5, “Requirements for a Publicly Available Pay  Schedule.”    Chart 4 – Salaries and Benefits Cost: Five‐Year Comparison   $‐  $2,000,000  $4,000,000  $6,000,000  $8,000,000  $10,000,000  $12,000,000 FY 13/14 FY 14/15 FY 15/16 FY 16/17 FY 17/18   The FY 2017/18 full‐time equivalents (FTE) of 50 positions is comparable to the FY 2016/17 level (Table 3) and  reflects a 1.0 FTE increase for the recruitment of an information technology administrator.  Significant organization  changes were accomplished in FY 2016/17 related to large transportation capital projects resulting in toll  operations and the investment of billions of dollars requiring substantial attention at many staff levels.   Management continues to be firmly committed to the intent of the Commission’s enabling legislation that called  for a small staff. Staff will continue to be provided the tools needed to ensure an efficient and productive work  environment. However, it must be recognized that small is not viewed in an absolute context; it is relative to the  required tasks to be performed and the demands to be met.    10 Table 3 – Full‐Time Equivalents by Department FY 2016—2018  FY 15/16 FY 16/17 FY 17/18 Executive Management 0.6 0.4 0.4 Administration 4.6 4.7 5.2 External Affairs 2.1 1.9 3.8 Finance 8.3 7.8 7.6 Planning and Programming 5.2 6.3 5.2 Rail Maintenance and Operations 4.5 4.6 4.5 Public and Specialized Transit 2.3 2.3 2.3 Commuter Assistance 1.8 1.5 1.4 Motorist Assistance 0.7 0.9 1.4 Capital Project Development and Delivery 15.9 17.5 14.6 Toll Operations 0.0 1.1 3.6 TOTAL 46.0 49.0 50.0   The Commission provides a comprehensive package of benefits to employees. The package includes:  health,  dental, vision, life insurance, short and long‐term disability, workers’ compensation, tuition assistance, sick and  vacation leave, retirement benefits in the form of participation in the California Public Employees’ Retirement  System (CalPERS), postretirement health care, deferred compensation, and employee assistance program. The  compensation components are shown in Chart 5.     Chart 5 – Personnel Salaries and Benefits  Salaries 66% Retirement 16% Health  12% Other Fringes 6%     Department Initiatives    The preparation of each department’s budget was based on key assumptions, accomplishments in FY 2016/17,  major initiatives for FY 2017/18, and department goals and related objectives. Following are the key initiatives and  summary of expenditures/expenses for each department (Tables 4 through 14).    Executive Management     Continue project development and delivery as the key Measure A priority.   Foster growth in usage of the 91 Express Lanes and ensure its financial success.     Proceed with construction on the I‐15 Express Lanes project.  11  Progress with a study to address mitigating the impact of truck traffic that serves logistics facilities.   Continue planning efforts to advance passenger rail service in the Coachella Valley‐San Gorgonio Pass  corridor.    Advocate for state and federal investments in transportation to fund needed transportation priorities in the  County and stimulate the local economy.    Initiate a long‐range Riverside County Transportation Plan for use in establishing integrated transportation  priorities.   Maintain regional cooperation and collaboration as a significant effort consistent with the philosophy and  mission of the Commission.   Implement a comprehensive social media outreach program to build awareness of the Commission and its  role in the community.    Maintain an effective mid‐sized transportation agency with a small and dedicated staff.    Table 4 – Executive Management  FY 15/16 FY 16/17 FY 16/17 FY 17/18 Dollar Percent Actual Revised Budget Projected Budget Change Change Personnel 178,400$                   90,600$                     89,900$                   91,400$                     800$                            1% Professional 91,000                       268,000                     146,000                  225,000                    (43,000)                       ‐16% Support 65,500                       87,000                       75,600                    90,900                       3,900                          4% TOTAL 334,900$                   445,600$                   311,500$                 407,300$                   (38,300)$                      ‐9%   Administration     Provide high quality support services to the Commission and to internal and external customers.    Continue to enhance the electronic records management system.   Continue to provide timely communications to Commissioners with continued emphasis on the utilization of  electronic mail.   Continue to update technology to improve internal processes and interaction with the public.   Support and develop a motivated workforce with a framework of activities and practices that comply with  employment laws and regulations.   Continue to employ and recruit a dynamic and talented workforce.    Table 5 – Administration  FY 15/16 FY 16/17 FY 16/17 FY 17/18 Dollar Percent Actual Revised Budget Projected Budget Change Change Personnel 614,200$                   530,700$                   525,200$                 722,600$                   191,900$                    36% Professional 213,000                    396,700                    337,500                  447,000                    50,300                         13% Support 581,100                    727,800                    720,100                  963,800                    236,000                      32% Capital Outlay 73,000                      175,000                    175,000                  670,000                    495,000                      283% Debt Service 24,900                       ‐                                  ‐                                ‐                                   ‐                                   N/A TOTAL 1,506,200$                1,830,200$                1,757,800$             2,803,400$                973,200$                    53%   External Affairs     Develop effective partnerships with transportation providers to communicate a unified message to Congress  regarding mobility needs.   Advocate positions in the State Legislature and in Congress that advance the County’s transportation  interests.   Continue a leadership role in formulating a countywide direction on federal transportation policies.   Pursue state legislation authorizing a sales tax supplemental to Measure A.   Conduct a concerted outreach effort to new federal and state representatives on local transportation issues.   Utilize modern technology to plan a robust public communication and engagement effort to build accessible  and transparent communication of the Commission’s projects.     Develop marketing and communication plans for the 91 Express Lanes and commencement of construction of  the I‐15 Express Lanes project.   Continue the public outreach program, “Operation Lifesaver”, targeting schools in close proximity to railroad  tracks on rail safety education, engineering, and enforcement.      12 Table 6 – External Affairs  FY 15/16 FY 16/17 FY 16/17 FY 17/18 Dollar Percent Actual Revised Budget Projected Budget Change Change Personnel 462,000$                   666,700$                   666,700$                 719,100$                   52,400$                      8% Professional 535,600                    918,400                    918,400                  1,025,500                 107,100                      12% Support 67,500                      114,600                    114,400                  191,600                    77,000                         67% TOTAL 1,065,100$                1,699,700$                1,699,500$             1,936,200$                236,500$                    14%   Finance     Continue appropriate uses of long‐ and short‐term financing to advance 2009 Measure A projects of the  Commission.   Apply the sales tax revenue forecast update to update a financing plan to support the Western Riverside  County Delivery Plan and Coachella Valley Association of Governments (CVAG) highway and regional arterial  projects.   Continue to support the financing efforts for the I‐15 Express Lanes project.    Work in partnership with the 91 Express Lanes toll operations contractor’s back office to develop and refine  accounting and financial policies and processes.   Continue to keep abreast of Governmental Accounting Standards Board (GASB) technical activities affecting  the Commission’s accounting and financial reporting activities and implement new pronouncements.   Continue to strengthen the ERP system to benefit all staff in the management of accounting and project  information and automation of a paperless workflow system.   Manage a centralized procurements process in order to strengthen controls and ensure consistency in the  application of procurement policies and procedures and adherence to applicable laws and regulations.    Conduct outreach activities to encourage disadvantaged business enterprise (DBE) and small business  enterprise (SBE) participation in various contracts.       Table 7 – Finance  FY 15/16 FY 16/17 FY 16/17 FY 17/18 Dollar Percent Actual Revised Budget Projected Budget Change Change Personnel 1,012,800$                1,085,200$                1,081,600$             981,600$                   (103,600)$                    ‐10% Professional 1,818,800                 2,955,800                 2,572,600               2,470,200                 (485,600)                      ‐16% Support 862,400                    1,230,800                 1,210,700               828,000                    (402,800)                      ‐33% Capital Outlay 25,400                      50,000                      25,000                    280,000                    230,000                      460% Transfers Out 9,000,000                 10,000,000               10,000,000            13,201,000               3,201,000                   32% TOTAL 12,719,400$             15,321,800$             14,889,900$           17,760,800$              2,439,000$                 16%   Planning and Programming     Monitor funding authority and responsibility related to the State Transportation Improvement Program (STIP)  and impacts on the STIP caused by the state budget issues.   Ensure STIP/Regional Improvement Program (RIP), Active Transportation Program (ATP), and other funded  projects are administered and implemented consistent with California Transportation Commission (CTC),  California Department of Transportation (Caltrans), and Southern California Association of Governments  (SCAG) policies.   Continue to strategically program projects and obligate funds in an expeditious manner for the maximum use  of all available funding, including monitoring the use of such funding to prevent from lapsing.    Focus on interregional concerns and maintain effective working relationships involving various multi‐county  transportation issues, including goods movement.   Coordinate planning efforts with regional and local agencies relating to the development of regional  transportation plans (RTP) and green house gas reduction (GHG) implementation guidelines.   Secure funding through the FAST Act for goods movement‐related needs.   Monitor and track the TUMF regional arterial projects.   Continue the Congestion Management Program (CMP) update and traffic monitoring along urban and rural  highway systems.   Participate in the development of the ATP guidelines to represent the County’s best interest in program  funding.   13  Administer the SB821 Bicycle and Pedestrian Facilities Program (SB821).   Commence the development of a countywide integrated long‐range transportation plan and support next  generation feasibility studies.    Table 8 – Planning and Programming  FY 15/16 FY 16/17 FY 16/17 FY 17/18 Dollar Percent Actual Revised Budget Projected Budget Change Change Personnel 1,175,100$                1,066,900$                1,018,200$             1,105,000$                38,100$                      4% Professional 258,700                    192,500                    188,300                  602,500                    410,000                      213% Support 22,000                      11,300                      17,200                    18,200                       6,900                           61% Projects and Operations 1,950,100                 10,305,700               1,481,000               10,903,000               597,300                      6% Transfers Out ‐                                 ‐                                 ‐                               860,300                    860,300                      N/A TOTAL 3,405,900$                11,576,400$             2,704,700$             13,489,000$              1,912,600$                 17%   Rail Maintenance and Operations     As a member of the Southern California Regional Rail Authority (SCRRA), continue active participation in the  governance and operations of the Metrolink commuter rail system.   Continue the planning and implementation of capital improvements at the commuter rail stations in the  County, including security and rehabilitation projects and parking requirements.   Continue to support and evaluate activities related to the PVL service.   Establish the best approach to build, maintain, and operate cost effective and environmentally sustainable  facilities that meet the public’s transportation needs.   Lead the service development process and actively coordinate with all stakeholders along the Coachella  Valley‐San Gorgonio Pass corridor for intercity passenger rail service.     Develop the next generation rail feasibility study to evaluate future growth opportunities for passenger rail in  the County.    Table 9 – Rail Maintenance and Operations  FY 15/16 FY 16/17 FY 16/17 FY 17/18 Dollar Percent Actual Revised Budget Projected Budget Change Change Personnel 704,000$                   926,300$                   925,800$                 848,700$                   (77,600)$                      ‐8% Professional 1,233,600                  4,692,800                  1,839,900               4,502,500                 (190,300)                      ‐4% Support 1,416,700                  2,862,300                  2,094,100               3,398,600                 536,300                      19% Projects and Operations 16,531,600                32,541,300                21,574,600            27,659,700               (4,881,600)                   ‐15% Capital Outlay 80,200                       61,000                       21,000                    90,000                       29,000                         48% Transfers Out ‐                                   ‐                                   ‐                               937,000                    937,000                      N/A TOTAL 19,966,100$             41,083,700$             26,455,400$           37,436,500$              (3,647,200)$                 ‐9%   Public and Specialized Transit     Support innovative programs that provide transit assistance in hard to serve rural areas or for riders having  very special transit needs and monitor funding of these programs.   Continue long‐range planning activities to ensure that anticipated revenues are in line with projected levels of  service by transit operators.   Continue public transit operator oversight and fiduciary responsibilities to ensure that annual fiscal audits and  state triennial performance audits are conducted in accordance with TDA regulations.    Provide availability for local matching funds to Western County applicants seeking Federal Transit  Administration (FTA) Section 5310 federal capital grants.   Coordinate with operators on major capital purchases and investments into new rolling stock and other  system improvements in order to maintain a viable on‐hand reserve.   Coordinate with transit operators to provide connecting bus service to the new PVL stations.     14 Table 10 – Public and Specialized Transit  FY 15/16 FY 16/17 FY 16/17 FY 17/18 Dollar Percent Actual Revised Budget Projected Budget Change Change Personnel 369,400$                   307,500$                   303,000$                 415,500$                   108,000$                    35% Professional 198,600                     197,000                    196,700                  220,300                    23,300                         12% Support 45,800                       54,200                      48,200                    56,700                       2,500                           5% Projects and Operations 70,990,800                114,844,600            86,850,400            121,897,600             7,053,000                   6% Transfers Out 23,151,500                23,794,000               21,788,400            24,388,400               594,400                      2% TOTAL 94,756,100$             139,197,300$           109,186,700$         146,978,500$           7,781,200$                 6%   Commuter Assistance     Improve the suite of services and outreach to rideshare participants and employer partners, including  personalized information and electronic access and distribution.   Maintain and grow employer partnerships through value‐added services and tools for ridesharing programs.   Maintain the long‐term partnership with San Bernardino County Transportation Authority (SBCTA) to manage  and implement a “sister” commuter assistance program for residents and employers in San Bernardino  County.   Optimize park and ride facilities to support car/vanpool/buspool arrangements and facilitate transit  connections.    Refine commuter incentive options with focus on higher density modes of transportation.   Operate a cost‐effective program within the County that results in reduction of single occupant vehicles.      Table 11 – Commuter Assistance  FY 15/16 FY 16/17 FY 16/17 FY 17/18 Dollar Percent Actual Revised Budget Projected Budget Change Change Personnel 298,700$                   273,100$                   267,000$                 259,800$                   (13,300)$                      ‐5% Professional 332,600                     465,000                    478,100                  499,300                    34,300                         7% Support 9,100                          204,400                    151,200                  152,400                    (52,000)                        ‐25% Projects and Operations 2,008,200                  2,645,000                 2,369,300               2,456,500                 (188,500)                      ‐7% Transfers Out 159,500                      ‐                                  ‐                               1,696,900                 1,696,900                   N/A TOTAL 2,808,100$                3,587,500$                3,265,600$             5,064,900$                1,477,400$                 41%   Motorist Assistance     Assess opportunities for efficiency related to the call box program operations.   Maintain a high benefit‐to‐cost ratio related to the performance of the FSP program.    Transition from a locally provided IE511 system to a regional southern California 511 solution.   Implement a seamless service transition to call box hardware upgrades in anticipation of cellular technology  migrations.    Continue the call box system program to serve as a “safe net” for stranded motorists in the County.   Utilize the opportunity to enhance coordination between California Highway Patrol (CHP) and Caltrans on  traveler information.     Table 12 – Motorist Assistance  FY 15/16 FY 16/17 FY 16/17 FY 17/18 Dollar Percent Actual Revised Budget Projected Budget Change Change Personnel 92,300$                     163,600$                   163,400$                 204,000$                   40,400$                      25% Professional 439,100                     744,400                    530,800                  518,000                    (226,400)                      ‐30% Support 232,900                     919,300                    680,100                  298,900                    (620,400)                      ‐67% Projects and Operations 3,395,200                  4,016,200                 3,555,000               3,723,000                 (293,200)                      ‐7% Transfers Out 944,600                     1,108,900                 701,300                  1,256,600                 147,700                      13% TOTAL 5,104,100$                6,952,400$                5,630,600$             6,000,500$                (951,900)$                    ‐14%   Toll Operations     Manage the operations of the 91 Express Lanes adhering to the Commission’s 91 Express Lanes Toll Policy.   Manage toll operations using investment grade traffic and revenue studies and cost estimate assumptions  specific to each express lane facility.   Continue I‐15 Express Lanes toll planning through development of business rules and agency agreements.  15  Provide timely and effective reporting of toll operation metrics including revenue, transactions, carpool usage,  and performance indicators.   Participate in the California Toll Operators Committee to advance regional and statewide tolling initiatives,  technology, interoperability, and coordination among California toll agencies.      Table 13 – Toll Operations  FY 15/16 FY 16/17 FY 16/17 FY 17/18 Dollar Percent Actual Revised Budget Projected Budget Change Change Personnel ‐$                                268,400$                   169,800$                 745,100$                   476,700$                    178% Professional ‐                                  307,000                    323,500                  913,500                    606,500                      198% Support and Maintenance ‐                                  2,674,900                 1,161,400               4,991,600                 2,316,700                   87% Projects and Operations ‐                                  3,052,800                 1,804,900               6,752,400                 3,699,600                   121% Capital Outlay ‐                                  250,000                    400,000                  400,000                    150,000                      60% Transfers Out ‐                                  ‐                                 ‐                               4,050,100                 4,050,100                   N/A TOTAL ‐$                                6,553,100$                3,859,600$             17,852,700$              11,299,600$               172%   Capital Project Development and Delivery     Continue project work on the Western Riverside County Delivery Plan projects, including the 91 Project; I‐15  Express Lanes project; SR‐60 truck climbing lanes; SR‐79 realignment; Mid County Parkway; and Pachappa  Underpass project.   Provide TUMF regional arterial funding and support to local jurisdictions for regional arterial project  engineering, right of way acquisition, and construction.   Provide 2009 Measure A funding to the incorporated cities, CVAG, and the County for local streets and roads  maintenance, repair, and construction.    Develop strategies to implement alternative financing structures including public toll roads.    Maintain a right of way acquisition and management program in support of capital projects.   Manage right of way acquisition in the most cost effective manner and within project schedules, while  adhering to federal and state regulations.   Maintain and manage the access, use, safety, and security of Commission‐owned properties including  commuter rail stations, properties in acquisition process, and income‐generating properties.    Table 14 – Capital Project Development and Delivery  FY 15/16 FY 16/17 FY 16/17 FY 17/18 Dollar Percent Actual Revised Budget Projected Budget Change Change Personnel 3,275,700$                4,126,100$                4,154,900$             3,461,400$                (664,700)$                   ‐16% Professional 8,743,900                  22,921,200                20,480,200            6,447,300                 (16,473,900)                ‐72% Support 651,700                     1,202,500                  666,900                  652,500                    (550,000)                     ‐46% Projects and Operations 513,983,700             417,932,400             302,868,300          451,805,500             33,873,100                 8% Capital Outlay 1,003,600                  2,065,000                  1,350,000               3,940,000                 1,875,000                   91% Debt Service 53,410,200                149,260,800             137,465,400          102,668,200             (46,592,600)                ‐31% Transfers Out 129,453,100             207,063,800             160,405,800          249,244,600             42,180,800                 20% TOTAL 710,521,900$           804,571,800$           627,391,500$         818,219,500$           13,647,700$               2%   Fund Balances    The total fund balance as of June 30, 2017 is projected at $678,545,600. The Commission’s budgeted activities for  FY 2017/18 are expected to result in a $71,694,800 decrease of total fund balance at June 30, 2018 to  $606,850,800. The primary cause of the decrease is project activities in FY 2017/18 related to the 91 Project, I‐15  Express Lanes project, and public transit allocations. Table 15 presents the components of fund balance by fund  type and program at June 30, 2018.    16 Table 15 – Projected Fund Balances by Fund Type and Program at June 30, 2018    Management Services $2,022,600 Measure A Western County: Highways $152,498,500 Riverside 91 Express Lanes $1,508,400 Planning and Programming 2,392,700 Bond Financing $5,125,600 Rail Maintenance and Operations 10,962,000 Commuter Assistance 14,066,100 Economic Development 7,309,300 Highways 17,792,300 Loans Receivable 0 Local Streets and Roads 1,000 New Corridors 11,999,600 Public and Specialized Transit 7,370,000 Rail 15,568,000 Regional Arterials 46,629,700 Measure A Coachella Valley: Highways and Regional Arterial 20,628,100 Local Streets and Roads 1,300 Specialized Transit 1,945,100 Measure A Palo Verde Valley Local Streets and Roads 600 Other Agency Projects Fund 204,600 Coachella Valley/San Gorgonio Pass 2,400 Motorist Assistance 7,858,200 State Transit Assistance 65,901,500 Local Transportation Fund 87,517,300 TUMF:  CETAP 41,986,300 Regional Arterials 36,519,300 General Fund $15,377,300 Special Revenue Funds $388,426,300 Riverside County Transportation Commission $606,850,800 Capital Projects Funds $152,498,500 Enterprise Fund $1,508,400$49,040,300 Debt Service Fund   The actual and projected trends in fund balances for each governmental and enterprise fund type from FY 2014/15  through FY 2017/18 are illustrated in Chart 6.  Chart 6 – Projected Fund Balance Trends by Fund Type FY 2015 – 2018    $1,000,000  $101,000,000  $201,000,000  $301,000,000  $401,000,000  $501,000,000  $601,000,000 General Fund Special Revenue Funds Capital Projects Funds Debt Service Fund Enterprise Fund FY 14/15 FY 15/16 FY 16/17 FY 17/18   Budget Summary    The overall budget for FY 2017/18 is presented in Table 16 by summarized line items, Table 17 by operating and  capital classifications, and Table 18 by fund type, and highway, rail, and regional arterial program expenditures by  project are summarized in Table 19.      17 Table 16 – Budget Comparative by Summarized Line Item FY 2016—2018    FY 15/16 FY 16/17 FY 16/17 FY 17/18 Dollar Percent Actual Revised Budget Projected Budget Change Change Revenues Measure A Sales Tax 167,630,300$        173,000,000$        173,000,000$        176,000,000$      3,000,000$            2% LTF Sales Tax 83,776,500            85,000,000             85,000,000             88,000,000           3,000,000               4% STA Sales Tax 13,358,000            10,821,600             10,821,600             10,469,000           (352,600)                 ‐3% Federal Reimbursements 18,669,000            37,157,000             16,530,300             77,877,100           40,720,100            110% State Reimbursements 56,580,500            11,589,200             9,751,900               11,500,200           (89,000)                   ‐1% Local Reimbursements 1,571,900               10,496,100             7,703,700               9,270,800             (1,225,300)             ‐12% TUMF Revenue 19,831,300            18,520,000             18,850,000             21,250,000           2,730,000               15% Toll Revenue ‐                               3,798,000               3,239,700               16,835,800           13,037,800            343% Other Revenue 7,295,600               2,518,000               268,500                  248,000                (2,270,000)             ‐90% Investment Income 8,592,800               1,849,000               4,715,600               3,516,700             1,667,700               90% TOTAL Revenues 377,305,900          354,748,900          329,881,300          414,967,600         60,218,700            17% Expenditures/Expenses Personnel Salaries and Benefits 8,182,600               9,505,100               9,365,500               9,554,200             49,100                    1% Professional and Support Professional Services 13,864,900            34,058,800             28,012,000             17,871,100           (16,187,700)           ‐48% Support Costs 3,954,700               10,089,100             6,939,900               11,643,200           1,554,100               15% TOTAL Professional and Support Costs 17,819,600            44,147,900             34,951,900             29,514,300           (14,633,600)           ‐33% Projects and Operations Program Operations 15,024,500            20,412,300             16,321,200             23,468,000           3,055,700               15% Engineering 3,577,300               18,582,900             3,704,000               11,016,400           (7,566,500)             ‐41% Construction 112,142,200          91,213,200             32,269,000             77,536,600           (13,676,600)           ‐15% Design Build 265,484,600          145,010,600          140,930,000          189,485,000         44,474,400            31% Right of Way/Land 56,274,900            74,289,700             36,246,600             83,236,100           8,946,400               12% Operating and Capital Disbursements 93,551,300            150,989,700          108,956,100          153,567,600         2,577,900               2% Special Studies 830,300                  2,965,000               202,000                  3,952,000             987,000                  33% Local Streets and Roads 49,826,500            51,358,000             51,358,000             52,936,000           1,578,000               3% Regional Arterials 12,148,000            30,516,600             30,516,600             30,000,000           (516,600)                 ‐2% TOTAL Projects and Operations 608,859,600          585,338,000          420,503,500          625,197,700         39,859,700            7% Debt Service Principal Payments 7,814,200               28,100,000             27,300,000             56,045,000           27,945,000            99% Interest Payments 45,620,900            56,615,800             45,611,400             41,123,200           (15,492,600)           ‐27% Cost of Issuance ‐                               645,000                  654,000                  5,500,000             4,855,000               753% TOTAL Debt Service 53,435,100            85,360,800             73,565,400             102,668,200         17,307,400            20% Capital Outlay 1,182,200               2,601,000               1,971,000               5,380,000             2,779,000               107% TOTAL Expenditures/Expenses 689,479,100          726,952,800          540,357,300          772,314,400         45,361,600            6% Excess (deficiency) of Revenues over (under)  Expenditures/Expenses (312,173,200)         (372,203,900)         (210,476,000)         (357,346,800)       14,857,100            ‐4% Other Financing Sources (Uses) Transfers In 162,708,700          241,966,700          192,895,500          295,634,900         53,668,200            22% Transfers Out (162,708,700)         (241,966,700)         (192,895,500)         (295,634,900)       (53,668,200)           22% Debt Proceeds 20,000,000            103,225,000          96,140,000             178,760,000         75,535,000            73% TIFIA Loan Proceeds 228,792,200          100,269,200          107,946,200          88,000,000           (12,269,200)           ‐12% Payment to Escrow Agent ‐                               (63,900,000)           (63,900,000)           ‐                             63,900,000            ‐100% Bond Premium ‐                               ‐                               8,414,000               18,892,000           18,892,000            N/A Net Financing Sources (Uses)248,792,200          139,594,200          148,600,200          285,652,000         146,057,800          105% Excess (deficiency) of Revenues over (under)  Expenditures/Expenses and Other Financing  Sources (Uses)(63,381,000)           (232,609,700)         (61,875,800)           (71,694,800)          160,914,900          ‐69% Beginning Fund Balance 803,802,400          740,421,400          740,421,400          678,545,600         (61,875,800)           ‐8% ENDING FUND BALANCE 740,421,400$        507,811,700$        678,545,600$        606,850,800$      99,039,100$          20% 18 Table 17 – Operating and Capital Budget FY 2017/18  FY 17/18 FY 17/18 FY 17/18 Operating Budget Capital Budget TOTAL Budget Revenues Measure A Sales Tax 13,368,000$          162,632,000$        176,000,000$         LTF Sales Tax 88,000,000             ‐                               88,000,000              STA Sales Tax 10,469,000             ‐                               10,469,000              Federal Reimbursements 6,794,200               71,082,900             77,877,100              State Reimbursements 7,365,700               4,134,500               11,500,200              Local Reimbursements 3,689,300               5,581,500               9,270,800                TUMF Revenue ‐                               21,250,000             21,250,000              Toll Revenue ‐                               16,835,800             16,835,800              Other Revenue ‐                               248,000                  248,000                   Investment Income 995,200                  2,521,500               3,516,700                TOTAL Revenues 130,681,400          284,286,200          414,967,600           Expenditures/Expenses Personnel Salaries and Benefits 5,151,000               4,403,200               9,554,200                Professional and Support Professional Services 9,235,800               8,635,300               17,871,100              Support Costs 5,992,700               5,650,500               11,643,200              TOTAL Professional and Support Costs 15,228,500            14,285,800             29,514,300              Projects and Operations Program Operations 9,030,000               14,438,000             23,468,000              Engineering 2,250,000               8,766,400               11,016,400              Construction 5,184,200               72,352,400             77,536,600              Design Build ‐                               189,485,000          189,485,000           Right of Way and Land ‐                               83,236,100             83,236,100              Operating and Capital Disbursements 143,217,600          10,350,000             153,567,600           Special Studies 3,150,000               802,000                  3,952,000                Local Streets and Roads ‐                               52,936,000             52,936,000              Regional Arterials ‐                               30,000,000             30,000,000              TOTAL Projects and Operations 162,831,800          462,365,900          625,197,700           Debt Service Principal Payments ‐                               56,045,000             56,045,000              Interest Payments ‐                               41,123,200             41,123,200              Cost of Issuance ‐                               5,500,000               5,500,000                TOTAL Debt Service ‐                               102,668,200          102,668,200           Capital Outlay 1,040,000               4,340,000               5,380,000                TOTAL Expenditures/Expenses 184,251,300          588,063,100          772,314,400           Excess (deficiency) of Revenues over (under)  Expenditures/Expenses (53,569,900)           (303,776,900)         (357,346,800)          Other Financing Sources (Uses) Transfers In 42,178,300            253,456,600          295,634,900           Transfers Out (28,936,200)           (266,698,700)         (295,634,900)          Debt Proceeds ‐                               178,760,000          178,760,000           TIFIA Loan Proceeds ‐                               88,000,000             88,000,000              Bond Premium ‐                               18,892,000             18,892,000              Net Financing Sources (Uses)13,242,100            272,409,900          285,652,000           Excess (deficiency) of Revenues over (under)  Expenditures/Expenses and Other Financing  Sources (Uses)(40,327,800)           (31,367,000)           (71,694,800)            Beginning Fund Balance 240,365,700          438,179,900          678,545,600           ENDING FUND BALANCE 200,037,900$        406,812,900$        606,850,800$          19 Table 18 – Budget by Fund Type FY 2017/18  FY 17/18 General Fund Special Revenue Capital Projects Debt Service Enterprise TOTAL Budget Revenues Measure A Sales Tax ‐$                             176,000,000$        ‐$                             ‐$                           ‐$                             176,000,000$    LTF Sales Tax ‐                               88,000,000             ‐                               ‐                             ‐                               88,000,000         STA Sales Tax ‐                               10,469,000             ‐                               ‐                             ‐                               10,469,000         Federal Reimbursements 4,161,700               70,968,900             ‐                               2,746,500             ‐                               77,877,100         State Reimbursements 3,365,700               8,134,500               ‐                               ‐                             ‐                               11,500,200         Local Reimbursements 1,468,200               7,802,600               ‐                               ‐                             ‐                               9,270,800           TUMF Revenue ‐                               21,250,000             ‐                               ‐                             ‐                               21,250,000         Toll Revenue ‐                               ‐                               ‐                               ‐                             16,835,800            16,835,800         Other Revenue ‐                               248,000                  ‐                               ‐                             ‐                               248,000              Investment Income 76,500                    1,932,400               1,135,300               365,000                7,500                      3,516,700           TOTAL Revenues 9,072,100               384,805,400          1,135,300               3,111,500             16,843,300            414,967,600      Expenditures/Expenses Personnel Salaries and Benefits 4,512,600               4,296,500               ‐                               ‐                             745,100                  9,554,200           Professional and Support Professional Services 4,747,200               11,810,400             400,000                  ‐                             913,500                  17,871,100         Support Costs 5,531,500               1,120,100               ‐                               ‐                             4,991,600               11,643,200         TOTAL Professional and Support Costs 10,278,700            12,930,500             400,000                  ‐                             5,905,100               29,514,300         Projects and Operations Program Operations 2,850,500               13,865,100             ‐                               ‐                             6,752,400               23,468,000         Engineering 2,000,000               9,016,400               ‐                               ‐                             ‐                               11,016,400         Construction 2,984,200               74,552,400             ‐                               ‐                             ‐                               77,536,600         Design Build ‐                               189,485,000          ‐                               ‐                             ‐                               189,485,000      Right of Way/Land ‐                               83,236,100             ‐                               ‐                             ‐                               83,236,100         Operating and Capital Disbursements 21,455,000            132,112,600          ‐                               ‐                             ‐                               153,567,600      Special Studies 3,150,000               802,000                  ‐                               ‐                             ‐                               3,952,000           Local Streets and Roads ‐                               52,936,000             ‐                               ‐                             ‐                               52,936,000         Regional Arterials ‐                               30,000,000             ‐                               ‐                             ‐                               30,000,000         TOTAL Projects and Operations 32,439,700            586,005,600          ‐                               ‐                             6,752,400               625,197,700      Debt Service Principal Payments ‐                               ‐                               20,000,000             36,045,000           ‐                               56,045,000         Interest Payments ‐                               ‐                               172,500                  40,950,700           ‐                               41,123,200         Cost of Issuance ‐                               ‐                               5,500,000               ‐                             ‐                               5,500,000           TOTAL Debt Service ‐                               ‐                               25,672,500             76,995,700           ‐                               102,668,200      Capital Outlay 1,040,000               3,940,000               ‐                               ‐                             400,000                  5,380,000           TOTAL Expenditures/Expenses 48,271,000            607,172,600          26,072,500             76,995,700           13,802,600            772,314,400      Excess (deficiency) of Revenues over (under)  Expenditures/Expenses (39,198,900)           (222,367,200)         (24,937,200)           (73,884,200)          3,040,700               (357,346,800)     Other Financing Sources (Uses) Transfers In 39,273,900            158,841,000          20,000,000             77,520,000           ‐                               295,634,900      Transfers Out (1,541,400)             (140,387,900)         (146,909,000)         (2,746,500)            (4,050,100)             (295,634,900)     Debt Proceeds ‐                               ‐                               178,760,000          ‐                             ‐                               178,760,000      TIFIA Loan Proceeds ‐                               88,000,000             ‐                               ‐                             ‐                               88,000,000         Bond Premium ‐                               ‐                               18,892,000             ‐                             ‐                               18,892,000         Net Financing Sources (Uses)37,732,500            106,453,100          70,743,000             74,773,500           (4,050,100)             285,652,000      Excess (deficiency) of Revenues over (under)  Expenditures/Expenses and Other Financing  Sources (Uses)(1,466,400)             (115,914,100)         45,805,800             889,300                (1,009,400)             (71,694,800)       Beginning Fund Balance 16,843,700            504,340,400          106,692,700          48,151,000           2,517,800               678,545,600      ENDING FUND BALANCE 15,377,300$          388,426,300$        152,498,500$        49,040,300$         1,508,400$            606,850,800$      20 Table 19 – Highway, Regional Arterial, and Rail Programs FY 2017/18  Description  HIGHWAY ENGINEERING SR‐60 Truck climbing lanes 225,000$                        91/71 connectors 50,000                             I‐15 Express Lanes 130,000                          Mid County Parkway (MCP)1,500,000                       MCP I‐215/Placentia interchange 2,000,000                       Ethanac SR‐74 corridor 900,000 French Valley Parkway Phase II (Temecula)798,900                          Riverside County ‐ Santa Ana River Trail 500,000 General (details presented in Section 6.3 Planning and Programming)2,000,000 SUBTOTAL HIGHWAY ENGINEERING 8,103,900 REGIONAL ARTERIAL ENGINEERING Various Western County TUMF regional arterial projects, including SR‐79 realignment 2,327,500 SUBTOTAL  REGIONAL ARTERIAL ENGINEERING 2,327,500 RAIL ENGINEERING Riverside Downtown/Pedley station improvements 95,000 Riverside‐La Sierra station improvements 190,000 Perris Valley Line and other rail projects 50,000 Other ‐ Coachella Valley‐San Gorgonio Pass corridor (details presented in Section 6.2 Rail)250,000 SUBTOTAL RAIL ENGINEERING 585,000 TOTAL HIGHWAY, REGIONAL ARTERIAL, AND RAIL ENGINEERING 11,016,400$                  HIGHWAY CONSTRUCTION I‐15 Express Lanes 6,065,000$                     I‐215 corridor improvements (central segment)/Scott Road to Nuevo Road 692,000                          Pachappa underpass 11,950,000 91 Project 3,320,000                       Riverside quiet zones 3,821,000 I‐15/SR‐79 south interchange (Temecula)4,000,000 Riverside County ‐ Santa Ana River Trail 2,800,000                       General (details presented in Section 6.3 Planning and Programming)1,175,000 SUBTOTAL  HIGHWAY CONSTRUCTION 33,823,000 REGIONAL ARTERIAL CONSTRUCTION Various Western County Measure A regional arterial projects 5,150,200 SUBTOTAL  REGIONAL ARTERIAL CONSTRUCTION 8,536,900 RAIL CONSTRUCTION Riverside Downtown/Pedley station improvements 3,237,700 Riverside‐La Sierra station improvements 3,870,000 Station rehabilitation 1,500,000 Perris Valley Line and other rail projects 24,119,000 Corona Auto  Center Drive traffic signal 250,000 Other ‐ Coachella Valley‐San Gorgonio Pass corridor (details presented in Section 6.2 Rail)2,200,000 SUBTOTAL  RAIL CONSTRUCTION 35,176,700 TOTAL HIGHWAY, REGIONAL ARTERIAL, AND RAIL CONSTRUCTION 77,536,600$                  HIGHWAY DESIGN BUILD 91 Project 79,100,000$                   I‐15 Express Lanes 110,385,000                   TOTAL HIGHWAY DESIGN BUILD 189,485,000$               HIGHWAY RIGHT OF WAY AND LAND SR‐60 truck climbing lanes 1,500,000$                     60/215 East Junction HOV lane connectors 5,000                               I‐215 corridor improvements (central segment)/Scott Road to Nuevo Road 30,000 Pachappa underpass 800,000 Mid County Parkway 4,100,000 MCP I‐215/Placentia interchange 16,500,000 SR‐74 curve widening 5,000 I‐15 Express Lanes 3,315,000 SR‐74/I‐15 to 7th Street 230,000 91/71 connectors 1,105,000                       91 Project 43,733,000 SR‐91 HOV lanes/Adams Street to 60/91/215 interchange 1,525,000 MSHCP land acquisition in Western County 3,000,000                       Riverside County ‐ Santa Ana River Trail 265,000                          French Valley Parkway Phase II (Temecula)673,600                          SUBTOTAL HIGHWAY RIGHT OF WAY AND LAND 76,786,600 REGIONAL ARTERIAL RIGHT OF WAY AND LAND Various Western County TUMF regional arterial projects, including SR‐79 realignment 6,270,000 SUBTOTAL REGIONAL ARTERIAL RIGHT OF WAY AND LAND 6,270,000 RAIL RIGHT OF WAY AND LAND Perris Valley Line and other rail projects 19,000 Riverside‐La Sierra station improvements 10,000 General 150,500                          SUBTOTAL RAIL RIGHT OF WAY AND LAND 179,500 TOTAL HIGHWAY, REGIONAL ARTERIAL, AND RAIL RIGHT OF WAY AND LAND 83,236,100$                  GRAND TOTAL HIGHWAY, REGIONAL ARTERIAL, AND RAIL PROGRAMS 361,274,100$               21 PROPOSED BUDGET FISCAL YEAR 2017/18 Budget Process Resource Estimation Commission Policy Goals Department Goals and Objectives Department Budget Development Budget Compilation Budget Review and Adoption FY 2017/18 Budget Considerations •Use of accumulated reserves for projects and programs, as necessary •Flexibility to change scope and timing of capital projects •Small staff with heavy use of consultants •Interfund borrowing policy, if required RCTC projects and programs •Impact on transit operations and capital project needs •Use of TUMF reserves for project expenditures Stabilized sales tax and TUMF revenues •Toll revenues and expenses derived from Investment Grade Traffic and Revenue Report RCTC 91 Express Lanes operations •TIFIA loan draw down on the I-15 Express Lanes project •Issuance of sales tax revenue bonds, commercial paper notes, and bond premium for the I-15 Express Lanes project and 91 Project completion Financing needs and related costs Budget Summary FY 2017/18 Beginning Fund Balance (7/1/2017)678,545,600$ Revenues 414,967,600 Debt Proceeds 285,652,000 Transfers In 295,634,900 Total Estimated Sources 996,254,500 Expenditures/Expenses (669,646,200) Debt Service (102,668,200) Transfers Out (295,634,900) Total Estimated Uses (1,067,949,300) Uses Over Sources (offset by beginning fund balance)(71,694,800) Ending Fund Balance (6/30/2018)606,850,800$ Sources Breakdown FY 16/17 FY 16/17 FY 17/18 Revised Budget Projected Budget Measure A Sales Tax 173,000,000$ 173,000,000$ 176,000,000$ LTF Sales Tax 85,000,000 85,000,000 88,000,000 STA Sales Tax 10,821,600 10,821,600 10,469,000 Intergovernmental 59,242,300 33,985,900 98,648,100 TUMF Revenue 18,520,000 18,850,000 21,250,000 Toll Revenue 3,798,000 3,239,700 16,835,800 Other Revenue 2,518,000 268,500 248,000 Investment Income 1,849,000 4,715,600 3,516,700 Transfers In 241,966,700 192,895,500 295,634,900 Debt Proceeds 203,494,200 212,500,200 285,652,000 TOTAL Sources 800,209,800$ 735,277,000$ 996,254,500$ Sources Comparison $- $50 $100 $150 $200 $250 $300 $350 MillionsFY 16/17 Revised Budget FY 16/17 Projected FY 17/18 Budget Expenditures/Expenses by Department FY 16/17 FY 16/17 FY 17/18 Revised Budget Projected Budget Capital Highway, Rail, and Regional Arterials 603,953,000$ 438,568,100$ 662,615,300$ Capital Local Streets and Roads 51,358,000 51,358,000 52,936,000 Commuter Assistance 3,587,500 3,265,600 5,064,900 Debt Service 149,260,800 137,465,400 102,668,200 Management Services 19,297,300 18,658,700 22,907,700 Motorist Assistance 6,952,400 5,630,600 6,000,500 Planning and Programming 11,576,400 2,704,700 13,489,000 Public and Specialized Transit 139,197,300 109,186,700 146,978,500 Rail Maintenance and Operations 41,083,700 26,455,400 37,436,500 Toll Operations 6,553,100 3,859,600 17,852,700 TOTAL Expenditures/Expenses 1,032,819,500$ 797,152,800$ 1,067,949,300$ Expenditures/Expenses Comparison $- $50 $100 $150 $200 $250 $300 $350 $400 $450 $500 $550 $600 $650 $700 MillionsFY 16/17 Revised Budget FY 16/17 Projected FY 17/18 Budget Capital Department Highlights 91 Project I-15 Express Lanes Mid County Parkway Expenditures/Expenses by Function FY 16/17 FY 16/17 FY 17/18 Percent Revised Budget Projected Budget Change Salaries and Benefits 9,505,100$ 9,365,500$ 9,554,200$ 1% Professional Services 34,058,800 28,012,000 17,871,100 -48% Support Costs 10,089,100 6,939,900 11,643,200 15% Projects and Operations 585,338,000 420,503,500 625,197,700 7% Debt Service 149,260,800 137,465,400 102,668,200 -31% Capital Outlay 2,601,000 1,971,000 5,380,000 107% TOTAL Expenditures/Expenses 790,852,800$ 604,257,300$ 772,314,400$ -2% *Excludes transfers out Expenditures/Expenses by Function Comparison $- $100 $200 $300 $400 $500 $600 $700 Salaries and Benefits Professional Services Support Costs Projects and Operations Debt Service Capital OutlayMillions *Excludes transfers out FY 16/17 Revised Budget FY 16/17 Projected FY 17/18 Budget Next Steps Close public hearing and adopt budget June 14, 2017 Review the final budget draft, close the public hearing, and adopt the final budget Open public hearing May 10, 2017 Receive input for the proposed budget and open the public hearing Continue monitoring revenues Measure A administrative salaries and benefits Funding needs for projects and transit operators Sales Tax and TUMF revenue trends Timeliness of federal and state reimbursements AGENDA ITEM 8 COMMISSIONERS:  PLEASE GIVE SPECIAL ATTENTION TO THE TWO  BOLD PARAGRAPHS AND ATTACHMENT 2 IN THIS AGENDA ITEM.  Agenda Item 8  RIVERSIDE COUNTY TRANSPORTATION COMMISSION  DATE: April 24, 2017  TO: Budget and Implementation Committee  FROM: Theresia Trevino, Chief Financial Officer  THROUGH: John Standiford, Deputy Executive Director  SUBJECT: Interstate 15 Express Lanes Project and 91 Project Completion Plans of Finance    STAFF RECOMMENDATION:    After many years of planning and development related to the Interstate 15 Express Lanes Project  (I‐15 ELP), the Commission is now poised to begin final design and construction following the  award of a design‐build contract to Skanska‐Ames, a Joint Venture, in April.  A preliminary Plan  of Finance for the I‐15 ELP has been presented previously to the Commission, and the final I‐15  ELP Plan of Finance is ready for approval.      Additionally, substantial completion for the State Route 91 Corridor Improvement Project  (91 Project) occurred on March 20, and the RCTC 91 Express Lanes and other general purpose  improvements are now open to traffic.  In 2014, the 91 Project cost increased from the  $1.312 million financed in July 2013 to $1.407 billion—primarily as a result of an increase in right  of way acquisition costs.  Accordingly, the Commission developed the 91 Project Completion Plan  of Finance.    The following staff recommendations are related to the plans of finance for the I‐15 ELP and  91 Project and include issuance of sales tax revenue bonds for the I‐15 ELP and 91 Project and  execution of a Transportation Infrastructure Finance and Innovation Act (TIFIA) loan with the  U.S. Department of Transportation (USDOT) for the I‐15 ELP or, in the alternative to a TIFIA loan,  the issuance of toll revenue bonds.    This item is for the Committee to:    1) Approve the 91 Project Completion Plan of Finance;  2) Approve the I‐15 ELP Plan of Finance regarding the issuance of the 2017 Series A Sales Tax  Revenue Bonds (2017 Bonds) and receipt of a TIFIA loan from the USDOT or, in the  alternative to a TIFIA loan, the issuance of toll revenue bonds;  3) Adopt Resolution No. 17‐006, “Resolution Authorizing the Issuance and Sale of Not to  Exceed $218,760,000 Aggregate Principal Amount of Riverside County Transportation  Commission Sales Tax Revenue Bonds (Limited Tax Bonds) in One or More Series, Including  the Execution and Delivery of a Seventh Supplemental Indenture, a Purchase Contract, an  Official Statement, and a Continuing Disclosure Agreement, and the Authorization of a  Toll Revenue Bond Financing of the I‐15 Express Lanes Project in an Amount Not To Exceed  22 Agenda Item 8  $165,000,000, Including the Execution and Delivery of a Master Indenture, a First  Supplemental Indenture and a Loan Agreement Relating to Transportation Infrastructure  Finance and Innovation Act Program Credit Assistance, and the Taking of All Other Actions  Necessary in Connection Therewith”;  4) Approve the draft form of the Official Statement for the issuance of 2017 Bonds for the  I‐15 ELP and 91 Project in a not to exceed amount of $218,760,000 and authorize the  Executive Director to revise, approve, and execute the printing and distribution of the  Official Statement;  5) Approve the draft form of the Continuing Disclosure Agreement related to the 2017  Bonds between the Riverside County Transportation Commission and Digital Assurance  Certification, L.L.C., as dissemination agent, and authorize the Executive Director to  revise, approve, and execute the final Continuing Disclosure Agreement;  6) Approve the draft form of the Seventh Supplemental Indenture for the 2017 Bonds  between the Riverside County Transportation Commission and U.S. Bank National  Association (US Bank), as Trustee, and authorize the Executive Director to revise, approve,  and execute the final Seventh Supplemental Indenture;  7) Approve the draft form of the Bond Purchase Agreement between the Riverside County  Transportation Commission and Bank of America Merrill Lynch (BofAML) and Goldman,  Sachs & Co. (Goldman), as Underwriter Representative acting on behalf of itself and  Barclays Capital Inc. (Barclays), Academy Securities (Academy), and Fidelity Capital  Markets. (Fidelity), (collectively the Underwriters), for the 2017 Bonds and authorize the  Chief Financial Officer to revise, approve, and execute the final Bond Purchase  Agreement;   8) Approve the draft form of the Master Indenture between the Riverside County  Transportation Commission and US Bank, as Trustee, related to the Toll Revenue Bonds  for the I‐15 ELP and authorize the Executive Director to revise, approve, and execute the  final Indenture;  9) Approve the draft form of the First Supplemental Indenture for the I‐15 ELP TIFIA loan  between the Riverside County Transportation Commission and US Bank, as Trustee, and  authorize the Executive Director to revise, approve, and execute the final First  Supplemental Indenture;  10) Approve the draft form of the TIFIA Loan Agreement between the Riverside County  Transportation Commission and the USDOT for an amount not to exceed $165 million and  authorize the Executive Director to revise, approve, and execute the final TIFIA Loan  Agreement;  11) Approve the estimated costs of issuance to be paid from the bond proceeds and execution  of related agreements, as required; and  12) Forward to the Commission for final action.    BACKGROUND INFORMATION:    The 2009 Measure A Expenditure Plan (Expenditure Plan) approved by Riverside County voters  in November 2002, identified improvements related to I‐15 to be implemented with Measure A  Western Riverside County (Western County) highway funds.  As staff began planning highway  23 Agenda Item 8  projects for the first 10 years of the new measure, construction costs had been increasing  significantly.  Although the Expenditure Plan contemplated the need for state and federal funding  to supplement Measure A revenues for highway projects, it was apparent innovative financing  techniques would be necessary to fund some of the highway projects and the Measure A debt  limitation would need to be increased.      Accordingly, in early 2006 following a competitive procurement, the Commission engaged a  strategic partnership advisory team knowledgeable in the area of transportation economics,  federal transportation funding tools, and corporate equity investment evaluation to evaluate the  feasibility of public/private partnerships and public delivery options to build additional  transportation capacity and/or to speed the delivery of planned projects.  The SR‐91 and I‐15  corridors were identified by this team as projects with strong user demand that could be financed  using toll revenues.  In December 2006, the Commission approved the 10‐Year Western Riverside  County Highway Delivery Plan (10‐Year Delivery Plan), which identified improvements including  toll, or express, lanes on the SR‐91 and I‐15.  Other general purpose improvements were also  included in the 10‐Year Delivery Plan.    In the following years, the Commission hired engineering firms to commence development of  separate project report/environmental documents following competitive procurements.  The  Commission also obtained state and federal tolling authority as well as design‐build authority for  both projects.  Due to the recession that occurred shortly after the approval of the  10‐Year Delivery Plan, the Commission also reprioritized and recalibrated these projects in order  to maintain financial feasibility.  The scope of each of these projects is as follows:     The 91 Project connects with the Orange County Transportation Authority 91 Express  Lanes at the Orange County/Riverside County line using a two‐mile mixing area and  continues approximately eight miles to the 15/91 interchange in Riverside County.  The  91 Project involved widening pavement on the outside of the existing SR‐91 to reposition  general purpose lanes and repurpose the existing high occupancy vehicle lane to  accommodate two tolled express lanes in the median in each direction.  It also involved  constructing one new general purpose lane in each direction from SR‐71 to I‐15,  ultimately providing two tolled express lanes and five general purpose lanes in each  direction.  The 91 Project also included the restriping of lanes and construction of a  two‐lane (one lane in each direction) direct tolled connector approximately 2.8 miles long  providing the 91 Express Lanes with access/egress to I‐15 South.    Other improvements included reconstruction with geometric improvements of five local  interchanges; construction of new and widened bridges, retaining walls, sounds walls, and  aesthetics improvement; addition of a collector‐distributor system with braided ramps in  the vicinity of the 15/91 interchange; addition of auxiliary lanes and other operational  improvements; restriping of lanes; and installation of an electronic toll collection and  enforcement system.    24 Agenda Item 8   The I‐15 ELP consists of one to two tolled express lanes in each direction on I‐15 between  Cajalco Road and SR‐60 through the cities of Corona, Norco, Eastvale, and Jurupa Valley  and portions of unincorporated Riverside County, a distance of approximately 15 miles.   The project includes sign modifications, installation of new signs, and construction of  retaining walls and sound walls.  Eleven bridges are to be widened.  Roadway  improvements are anticipated to be constructed within the existing Caltrans right of way  with the majority of the improvements occurring within the existing I‐15 median.  An  electronic toll enforcement and collection system will also be installed.  The I‐15 ELP is  expected to open to tolled vehicular traffic in July 2020.      Through separate competitive procurements, the Commission hired Parsons Transportation  Group (Parsons) as the project and construction manager for the 91 Project and I‐15 ELP to assist  the Commission in the preparation for design‐build, toll systems integration and installation, and  toll operator procurements and contracts as well as to oversee the design and construction work  during the design‐build phase.  Some of the preparation activities consisted of developing and  negotiating various agreements required in connection with the design‐build phase as well as  operations of the toll lanes following the completion of construction.  For the 91 Project, the  Commission awarded a design‐build contract to Atkinson/Walsh, a Joint Venture, and approved  an agreement for the operations and maintenance of the 91 Express Lanes to Cofiroute USA, LLC  in May 2013 and authorized the award of an electronic toll and traffic management systems  integration and installation contract to Cofiroute in January 2014.  For the I‐15 ELP, the  Commission awarded a toll services provider contract to Kapsch Traffic Com North America in  January 2017 and a design‐build contract to Skanska‐Ames, a Joint Venture, in April 2017.     While project development activities were underway, staff also conducted various financing  activities required to finance the project costs related to the design‐build phase.       Bond underwriting teams for each project were appointed following competitive  procurements for underwriter services in connection with future long‐term debt  financings.  The initial tasks for the senior underwriting team included the development  of a financial model and evaluation of potential financing structures, including TIFIA loans  and toll revenue bonds.   Following separate competitive procurements for traffic and revenue studies, Stantec  Consulting Services (Stantec) was awarded contracts to prepare the investment‐grade  traffic and revenue studies for the 91 Project and the I‐15 ELP and to assist in the  development of a toll policy for each project.  A traffic and revenue study is required for  the successful financing of toll‐supported debt, including toll revenue bonds and a TIFIA  loan.   The Commission submitted letters of interest for credit assistance to TIFIA for both  projects.  In July 2013 TIFIA approved a loan for the 91 Project in the approximate amount  of $421 million.  For the I‐15 ELP, the Commission advanced to the creditworthiness stage  in January 2016 and is currently completing the creditworthiness assessment and  negotiations for the terms and conditions of a TIFIA loan.  25 Agenda Item 8   A preliminary Plan of Finance for the I‐15 ELP was presented to the Commission in  November 2015 and November 2016, and the Commission approved $110 million in  federal Congestion Mitigation and Air Quality (CMAQ) and/or Surface Transportation  Block Grant (STBG) funds for design‐build costs related to the I‐15 ELP.   Competitive procurements for investment management services related to the project  financings were conducted.  Logan Circle Partners, L.P. was awarded investment  management services agreements in May 2013 for the 91 Project and in April 2017 for  the I‐15 ELP.    US Bank serves as the trustee for administration of the sales tax bonds and the toll‐ supported debt.  Typically, the trustee fulfills its duties on behalf of the bond investors  and TIFIA in accordance with the trust indentures over the life of the outstanding debt  unless there is cause for termination and appointment of a successor trustee.    In July 2013, the Commission completed the financing for the $1.312 billion 91 Project with the  issuance of sales tax bonds and toll revenue bonds and the execution of a TIFIA loan.  In spring  2014, the capital cost estimates for the 91 Project were reviewed and revised for a total  estimated cost of $1.407 billion.  The $95 million estimated cost increase was primarily related  to higher than anticipated right of way acquisition costs.  Subsequent annual reviews of the  91 Project costs, including spring 2017, resulted in no changes to the $1.407 billion cost estimate,  which also includes contingencies.  As a result of substantial completion, a Plan of Finance for the  completion of the 91 Project is now required.      The toll‐supported debt is not subject to the 2009 Measure A debt limit as these bonds or loans  are secured by a lien on toll revenues; however, the initial Measure A debt limit of $500 million  constrained the ability to issue additional sales tax revenue bonds secured by a lien on 2009  Measure A revenues.  In November 2010, a majority of the voters in Riverside County increased  the 2009 Measure A debt limit to $975 million.  As of June 1, 2017, the projected amount of sales  tax debt is $776,240,000, excluding an authorized but unissued $40 million of commercial paper  notes:    Balance at  6/1/16 October 2016  Refunding Principal  Payments March 2017  Issuance Anticipated  Balance at  6/1/17 Bonds: 2009 A, B, C 139,100,000$   (63,900,000)$  (4,400,000)$      ‐$                      70,800,000$     2010 A, B 150,000,000      ‐                         ‐                         ‐                        150,000,000     2013 A 462,200,000      ‐                         ‐                         ‐                        462,200,000     2016 A ‐                          76,140,000      (2,900,000)        ‐                        73,240,000       Subtotal‐Bonds Commercial Paper 20,000,000       (20,000,000)      ‐                        20,000,000      20,000,000       Total Outstanding Debt 771,300,000$   (7,760,000)$     (7,300,000)$     20,000,000$    776,240,000$  Debt Description     Staff combined the I‐15 ELP and 91 Project Plans of Finance as a single financing to achieve  financing efficiencies.    26 Agenda Item 8  Plan of Finance    I‐15 ELP    The financing team has maintained a quantitative model of the financing for the I‐15 ELP since  2015.  The most recent version of the model was updated in March to refine market‐based  assumptions and reflect updated estimates of overall I‐15 ELP capital and operating expenses as  a result of recent procurement activities.  The projected total capital costs for the I‐15 ELP,  excluding financing reserves, is approximately $454.6 million.  Approximately $93.8 million of  predevelopment costs is expected to have been incurred through financial close; these costs have  been funded with available Measure A sources on a pay‐as‐you‐go basis or financed through the  Commission’s commercial paper program or prior sales tax revenue bond financings.   Accordingly, the I‐15 ELP costs to be financed approximate $360.8 million.  The financing will also  include approximately $30 million in proceeds to retire outstanding commercial paper notes and  $14 million for a ramp up reserve fund for operation and maintenance of the I‐15 ELP based on  financial modeling requirements.  Therefore, the total I‐15 ELP Plan of Finance is in the  approximate amount of $403.9 million; however, it is preliminary and subject to change.     91 Project Completion    As previously noted, a Completion Plan of Finance for the 91 Project is needed for approximately  $95 million of projected costs through final completion.  Approximately $53 million of this  amount is related to contingencies, which may or may not be utilized.  Assuming that the  Commission’s $60 million commercial paper program will be maintained after this financing, staff  proposes the issuance of commercial paper notes to pay for 91 Project costs related to the use  of available contingency.  These commercial paper notes would likely be retired at a later date  through the issuance of long‐term sales tax bonds.  Accordingly, the amount that must be  currently financed is approximately $42 million.    The commercial paper program availability and the completion bonds proceeds aggregate  $93,709,531 and cover 98.3 percent of the 91 Project costs to be financed.  The remaining  $1.6 million, if required, will be paid from available Measure A revenues on a pay‐as‐you‐go basis.    Combined Plans of Finance    Current financing assumptions for the I‐15 ELP include the issuance of senior lien sales tax  revenue bonds in the form of current interest bonds, a TIFIA loan secured by a senior lien on toll  revenues, and federal CMAQ and STBG funds.  As a result of using the commercial paper program  to finance I‐15 ELP costs through financial close and refinancing the outstanding commercial  paper notes with premium sales tax bonds, additional sales tax bonds can be issued to fund the  91 Project completion costs.  The following is a summary of the most current estimate of sources  and uses for the combined I‐15 ELP and 91 Project financing:    27 Agenda Item 8  Par Amount $              158,760,000  Premium                   17,460,964                   151,424,726                   110,000,000  $              437,645,690   $                98,511,433                   151,424,726                   110,000,000                    14,000,000                    30,000,000                    33,709,531  $              437,645,690  1 Amounts  are subject to change Sources1: Sales Tax Bonds TIFIA Loan CMAQ/STBG Funds Total Sources Uses1:    Bonds Proceeds Construction Fund Deposit    TIFIA Construction Draws    CMAQ/STBG Reimbursements    Ramp‐Up Fund Deposit    Bonds Proceeds Construction Fund Deposit Total Uses    Repayment  of RCTC Commercial Paper I‐15 ELP 91 Project     Based on the projected amount of sales tax bonds to be issued for the I‐15 ELP and 91 Project  and maintaining the commercial paper program for 91 Project completion, the Measure A sales  tax debt limitation will be fully utilized.    Measure A Sales Tax Debt Limitation 975,000,000$  Total Outstanding Debt, projected as of June 1, 2017 776,240,000$  Issuance of Commercial Paper in June, as reimbursement to Commission for I‐15 ELP costs 10,000,000       Total Outstanding Debt, projected prior to financial close 786,240,000     Combined I‐15 ELP and 91 Project Financing: Issuance of Sales Tax Bonds 158,760,000     Retirement of Outstanding Commercial Paper (30,000,000)      Total Outstanding Debt, projected after I‐15 ELP financing requirements 915,000,000$ (915,000,000)   Total Debt Capacity Available for Commercial Paper Program and 91 Project Completion 60,000,000$        Additional debt capacity will be available as sales tax bond principal maturities are paid in future  years; however, any additional debt issuances will need to be evaluated based on projected  Measure A revenues.    Sales Tax Revenue Bonds and Commercial Paper Program    The 2017 Bonds are proposed to be issued as fixed, long‐term callable current interest bonds  with projected interest coupon rates ranging from 3 percent to 5 percent (projected yields of  1.52 percent to 4.13 percent) and principal maturities beginning in June 2018 through June 2039.   Actual interest rates for the bonds will be determined in July during the pricing of the bonds.  28 Agenda Item 8  A debt service reserve fund requirement for the 2017 Bonds is not anticipated (consistent with  the other outstanding sales tax revenue bonds).      The 2017 Bonds are expected to be issued at a premium, i.e., bondholders are willing to accept  a lower yield for higher coupon rates.  Premium can only be utilized to pay debt service and will  be used to retire the outstanding commercial paper at financial close.  Accordingly, the bonds  are projected to provide approximately $176.2 million in bond proceeds.    A portion of the sales tax bond proceeds will be used to pay costs of issuance, including  underwriter’s discount.  The total costs of issuance for the sales tax bonds and the TIFIA loan are  estimated not to exceed $6.1 million, or 1.9 percent.  The Commission’s debt management policy  limits such costs to 2 percent.  A portion of the 2017 Bonds proceeds will also be used to retire  all of the outstanding commercial paper notes, which amount is projected to be $30 million  outstanding as of July 19.      The credit and liquidity support for the Commission’s commercial paper program is a $60,750,000  irrevocable direct draw letter of credit and reimbursement agreement with State Street Bank and  Trust Company (State Street), which expires in October 2017.  Shortly after this proposed plan of  finance is executed, staff will begin to either negotiate an extension with State Street or procure  a substitution of the letter of credit and reimbursement agreement with another bank.    Projected debt service coverage of the total outstanding sales tax debt based on projected  Measure A sales tax revenues is expected to exceed the Commission’s 2x coverage policy for the  sales tax supported debt.    TIFIA Loan    TIFIA loans may finance up to half of a project’s eligible costs; however, USDOT practice is to  generally limit TIFIA loans to 33 percent of project’s eligible costs.  Based on the current I‐15 ELP  Plan of Finance and eligible project costs, a $151.4 million TIFIA loan is anticipated, subject to  completion of the creditworthiness assessment by TIFIA’s financial team.  The TIFIA loan interest  rate assumed in the financial model is currently estimated at 3.55 percent and is tied to the rate  on a 30‐year U.S. Treasury Bond plus 1 basis point (0.01 percent).  The TIFIA loan interest rate as  of April 18 is 2.89 percent; the actual interest rate for the TIFIA loan will be determined in July  upon the execution of the TIFIA Loan Agreement.  Interest on the TIFIA loan will be payable  beginning in June 2025.      During the first five years of repayment, only interest payments are required on the TIFIA loan.   To the extent that payments of interest result in debt service coverage of at least 1.3 times, the  debt service is considered mandatory debt service.  Mandatory debt service is required to be  paid, and failure to pay results in a default under the TIFIA Loan Agreement.  The TIFIA loan will  also include payments beginning June 2026 that fully fund all interest and result in total annual  TIFIA loan payments that are approximately level for the term of the TIFIA loan.  The additional  payments are considered scheduled debt service.  Payment of scheduled debt service is only  29 Agenda Item 8  required if revenues are sufficient to allow its payment.  The TIFIA loan principal maturities are  projected to begin in June 2030 through June 2055, which is about 15 years before the expiration  of toll authority.      The TIFIA loan includes the following key provisions:     The TIFIA loan will have a senior lien on toll revenues;    Minimum 1.3x coverage for all senior and subordinated toll revenue supported debt;   Additional bonds secured by toll revenues can be issued if a minimum 1.5x coverage  requirement is met and the TIFIA lender approves;   Completion bonds may be issued should that prove necessary due to unexpected cost  increases or delays;   An estimated $14 million ramp up reserve fund for initial years’ operations will be funded  from a combination of sales tax bond proceeds, up to a 5 percent working capital limit  per federal tax regulations, and Commission Measure A contributions;   An estimated $7 million repair and rehabilitation sweep reserve account will be funded  from net toll revenues, after funding higher priorities in the flow of funds (as listed below);   An estimated $18 million TIFIA loan reserve will be established from the proceeds of a  Measure A loan (Initial Loan) of $3 million per year beginning with FY 2018/19 through  FY 2023/24 to the extent that net toll revenues, after funding higher priorities in the flow  of funds, are not available;   A contingent Measure A loan (Contingent Backstop Loan) will be provided during  FY 2024/25 through FY 2038/39 to an annual maximum amount of $3.85 million and up  to a cumulative total of $38.5 million from Measure A receipts as needed to pay operation  and maintenance costs and debt service not covered by net toll revenues;    Repayment of the Commission’s Initial Loan and Contingent Backstop Loan is projected  to be at an interest rate of 4 percent and subject to meeting certain blocked, or restricted,  payment conditions; and   Net toll revenues remaining after payment on the TIFIA loan, any toll revenue bonds  issued on a parity or subordinated basis to the TIFIA loan, and the Commission’s Initial  Loan and Contingent Backstop Loan will be applied equally to prepayment of the TIFIA  loan and to release to the Commission for other projects in the corridor.    The Commission’s commitment of Measure A funds related to the Initial Loan and Contingent  Backstop Loan is included in Section 52.04 of the Seventh Supplemental Sales Tax Indenture  (Seventh Supplemental Indenture).  The TIFIA loan reserve amount and requirement for the  Contingent Backstop Loan are based on quantitative modeling efforts to achieve an investment  grade rating under a rating case from Fitch Ratings (Fitch); the rating case assumed default  scenarios in which projected toll revenues were subjected to extreme stress, both through initial  additional reduction by 25 percent (from already stressed projections) and through reduction of  the annual rate of growth in toll revenues.  An investment grade rating is a requirement for the  TIFIA loan.     30 Agenda Item 8  Under the Seventh Supplemental Indenture, Measure A sales tax revenues will be accumulated  by the sales tax bonds trustee and deposited in the I‐15 Trust Fund up to the annual maximum.   If net toll revenues are not sufficient to fund the annual cap amounts of $3 million for the Initial  Loan and $3.85 million for the Contingent Backstop Loan, such amounts will be transferred by  the sales tax trustee to the toll trustee.    Flow of Funds for Toll Operations    Toll operations for the I‐15 ELP will be provided by Kapsch.  Toll revenues and other non‐toll  related revenues will be deposited by Kapsch on a daily basis with the trustee.  These revenues  will be required to fund certain costs and reserves in order of priority.  Article V of the draft Toll  Revenue Bonds Master Indenture and First Supplemental Indenture (Toll Indentures) list the  priority of the flow of funds, as follows; however, this is subject to completion of TIFIA  negotiations:     Operations and maintenance fund, including ramp up reserve;   Rebate fund;   Senior Lien obligations (including TIFIA mandatory) interest fund;   Senior Lien obligations (including TIFIA mandatory) principal fund;   Senior Lien obligations (including TIFIA) debt service reserve fund replenishment, if  required;   Repair and rehabilitation fund;   Scheduled TIFIA debt service obligations fund;   Repair and rehabilitation sweep reserve fund;   Second Lien obligations debt service payments and reserve fund (reserved);   Subordinate obligations debt service payments and reserve fund (reserved;    Holding fund, subject to blocked payment conditions;   Commission loan payments;   Capital expenditures (reserved);   Residual fund to be shared with TIFIA on a 50/50 basis; and   Surplus account for Commission’s share of residual fund.    Events of default identified in Section 7.01 of the draft Toll Indentures, and subject to completion  of TIFIA negotiations, are as follows:     Default in payment of any interest or principal on any bond when due;   Default in observance or performance of any other covenant or agreement of Commission  contained in the Indentures for a period of 30 days after written notice; and   Occurrence and continuance of a bankruptcy‐related event of the Commission.    Should an event of default occur, the Toll Indentures specify the application of revenue and other  funds after a default.    31 Agenda Item 8  Alternative Financing Plans    Assuming the successful execution of a TIFIA loan, the current quantitative model does not  anticipate the issuance of toll revenue bonds given the difference in borrowing costs.  The  financial team has been negotiating the terms of a TIFIA loan with the USDOT for several months.  Staff is pleased to report the Commission’s financial team reached general agreement on  substantially all key business terms and conditions.  The financing schedule anticipated that TIFIA  staff would present the I‐15 ELP loan package assessment to a USDOT internal credit review team  in mid‐May, which would be followed by an invitation from the USDOT to submit an application  for a loan shortly thereafter.  The Commission is preparing such an application based on the  current status of TIFIA negotiations, such that the application will be ready for submittal to TIFIA  immediately upon receipt of the invitation.  The application will then be reviewed by the TIFIA  credit review team in early June.  If the application is satisfactory, the credit review team will  then recommend approval of the loan to the TIFIA Council on Credit and Finance (TIFIA Council).   At a meeting in late June, the TIFIA Council is expected to submit a final recommendation for loan  approval to the USDOT Secretary.      In late March, TIFIA staff advised the Commission that key positions on the TIFIA Council had not  yet been appointed by the President or confirmed by the Senate.  The Deputy Secretary of the  USDOT usually serves as the chair of the TIFIA Council.  A Deputy Secretary has been nominated  and approved by a House committee; however, his nomination is awaiting Senate confirmation;  staff does not have a prediction as to when confirmation will occur.  No other TIFIA Council  positions have been nominated for appointment by the President.  Without USDOT leadership  positions filled, and no expectation the positions will be filled in time to meet the key milestones  necessary to maintain I‐15 ELP’s schedule, a degree of uncertainty exists regarding how the next  few months will unfold with regard to the TIFIA loan.  In the meantime, TIFIA and Commission  financial teams continue to proceed with the creditworthiness assessment phase of the TIFIA  loan as if the loan and project remain on schedule.  The Commission’s government relations team  engaged Representative Ken Calvert (CA‐42) to assist with communicating with the Presidential  Administration regarding the urgency for decision‐making at the USDOT.    Accordingly, the Commission’s financial team has developed at least one alternative plan of  finance in which the TIFIA loan would be replaced by the issuance of toll revenue bonds; however,  the proceeds from the issuance of toll revenue bonds are projected to approximate $114 million  requiring an increase in Measure A bonds and related premium of $55.9 million and $7.1 million,  respectively.  Therefore, the plan of finance would increase approximately $25.6 million from  $403.9 million to $429.5 million.  If additional sales tax bonds of $55.9 million are issued, this  would require the termination of the commercial paper program and the use of available  Measure A funds, including possible internal loans, to finance the 91 Project completion costs.   This alternative is not desirable but must be considered.       32 Agenda Item 8  Staff is also considering a potential financing scenario under which the closing of the TIFIA loan  is delayed beyond 2017, but can still be completed in a reasonable time.  This would involve a  short‐term placement of notes with a private lender—potentially one or more of the  underwriting firms currently selected for the sales tax revenue bonds.  The notes would be repaid  from proceeds of the TIFIA loan as received.    Staff anticipates that a decision to pursue at least two plans of finance will need to be made in  early May in order to maintain the schedule for financial close on July 19.  Therefore, to provide  flexibility to the Commission’s management and financial teams, staff recommends the  Commission authorize sales tax revenue bonds in an amount not to exceed $218,760,000  (maximum available capacity under Measure A debt limitation) and toll revenue bonds, including  a TIFIA loan, in an amount not to exceed $165 million.  If either the toll revenue bonds or short‐ term note scenario is employed, staff will likely return to the Commission in June for specific  approval of the related documents applicable to the specific scenario.    The finance team will continue to update the quantitative financial model with current schedule  estimates, interest rate assumptions, and final TIFIA negotiation and other matters.  Such  updates to the model through pricing of the bonds and financial close may result in some changes  to the sales tax and toll revenue supported debt amounts in order to maximize the efficiency of  the plan of finance.  As a result, the staff recommendation for a maximum amount of toll bonds  is slightly above the projected TIFIA loan amount and possible toll revenue bonds issuance.    Financing Team and Related Documents    The financing team that participated in the development of this proposed plan of finance,  preparation, and negotiation of the required documents includes the following key members:     Financial Advisor – Fieldman, Rolapp & Associates, Inc. (Fieldman);   Bond Counsel – Orrick Herrington & Sutcliffe LLP;   Disclosure Counsel – Norton Rose Fulbright US LLP;   General and TIFIA Counsel – Best, Best & Krieger LLP;   Senior Underwriters – BofAML, Goldman, and Barclays;   Co‐managing Underwriters – Academy Securities (a veteran‐owned business) and Fidelity  Capital Markets;   Project and Construction Manager – Parsons;   Traffic and Revenue Consultant – Stantec; and   Trustee – US Bank.    The following is a summary of draft documents related to the I‐15 ELP Plan of Finance and  completion of the 91 Project to be approved by the Commission:    33 Agenda Item 8  2017 Bonds TIFIA Loan  Resolution 17‐006  Official Statement Master Indenture  Continuing Disclosure Agreement First Supplemental Indenture  Seventh Supplemental Indenture TIFIA Loan Agreement  Bond Purchase Agreement     Drafts of the documents related to the sales tax portion for the proposed I‐15 ELP financing,  which are not expected to have substantive revisions, are included as attachments to this staff  report for approval and consist of the following:     Resolution No. 17‐006 (draft) authorizing the issuance and sale of a not to exceed amount  of sales tax revenue bonds including the execution and delivery of the Supplemental  Indenture, Purchase Contract, Official Statement, and Continuing Disclosure Agreement;  a toll revenue bond financing of a not to exceed amount including the execution and  delivery of the Master Indenture, First Supplemental Indenture, and TIFIA Loan  Agreement; and the taking of all other actions necessary in connection with this  transaction (Attachment 1);    Preliminary Official Statement (draft) for the 2017 Bonds (Attachment 2);   Seventh Supplemental Indenture between the Commission and the trustee (draft)  regarding the terms and conditions of the issuance of the 2017 Bonds (Attachment 3);   Continuing Disclosure Agreement (draft) between the Commission and the dissemination  agent for the 2017 Bonds (Attachment 4);    Purchase Contract (draft) between the Commission and the underwriters regarding the  purchase of the 2017 Bonds (Attachment 5);   Master Indenture between the Commission and the trustee (draft) regarding the terms  and conditions of the issuance of the I‐15 ELP Toll Revenue Bonds (Attachment 6);    First Supplemental Indenture between the Commission and the trustee (draft) regarding  the terms and conditions of the TIFIA loan (Attachment 7); and   TIFIA Loan Agreement between the Commission and USDOT (draft) regarding the terms  and conditions of the TIFIA loan (Attachment 8).    The TIFIA Loan Agreement (draft) was not provided by TIFIA prior to the printing of this staff  report but will be available at the May Commission meeting; however, Fieldman summarized the  key terms and conditions in a draft term sheet for the Committee.  The term sheet reflects the  substantially negotiated terms and conditions and the Commission’s proposed terms and  conditions based on discussions with TIFIA for the remaining items.    Staff recommends approval of the estimated costs of issuance of $6.1 million for the issuance of  the 2017 Bonds and securing of a TIFIA loan as well as the execution of related professional  services agreements or amendments to agreements.  The costs of issuance consist of  underwriting fees and expenses as well as other costs related primarily to issuer counsel, bond  counsel, tax counsel, disclosure counsel, financial advisor, TIFIA, and rating agencies.  34 Agenda Item 8  As part of the action to authorize the issuance of the 2017 Bonds, the Commission will approve  the form of the Preliminary Official Statement and authorize its distribution in connection with  the sale of the bonds, as well as the preparation of a final Official Statement once the bonds  have been priced.  These offering documents are required under state and federal securities  laws prohibiting the offer and sale of securities such as the 2017 Bonds, unless all matters that  would be material to an investor in the bonds have been adequately disclosed and there is no  omission of material facts.  Furthermore, under rules of the Securities and Exchange  Commission, the underwriters cannot purchase the bonds unless they have received a  substantially final offering document, which discloses all material information that they  reasonably believe to be true and correct.      The Commissioners serving on the Board as the governing body of the issuer of the 2017 Bonds  are expected to read and be familiar with the information described in the draft Preliminary  Official Statement included with this staff report.  The Commissioners may employ the services  of experts to take the lead in the drafting and review of the Official Statement and to provide  financial projections included in the Official Statement; however, the Commissioners have the  duty to review the information and bring to the attention of those responsible for the  preparation of the offering document any misstatements or omissions in the draft and to ask  questions if they are unclear about the information or their role.  Members of the financing  team will be available at the Committee and Commission meetings to respond to the  identification of any misstatements or omissions or to such questions.     Anticipating approval for this transaction, the schedule of subsequent activities related to the  financing is as follows:    Rating agency meetings April 26‐27  Commission approval of financing documents May 10  TIFIA invitation to submit application May 18  Submittal of TIFIA application May 18  Posting of preliminary official statement June 19  Investor roadshow and calls/meetings, if needed  June 19‐30  TIFIA Council approval of TIFIA loan June 21  Pricing activities July 11‐12  TIFIA Loan Agreement execution July 18  Financing closing activities July 18‐19    Changes to these documents may be necessary as a result of continuing development by the  financing team, meetings with the rating agencies, and continuing negotiations with TIFIA.  Staff  will discuss significant unresolved matters that may affect these documents at the Commission  meeting.  Since general legal counsel is a key member of the financing team, staff recommends  the Executive Director or Chief Financial Officer be authorized to approve and execute the final  documents, as applicable.      35 Agenda Item 8  Financial Impact    Proceeds from the 2017 Bonds will be received upon issuance of the bonds; the TIFIA loan will  be drawn upon monthly in connection with cost reimbursement requisitions.  Costs of issuance,  currently estimated at $6.1 million, will be paid from bond proceeds.    Financial Information  In Fiscal Year Budget:  Yes        N/A    Year:  FY 2017/18        FY 2018/19+   Amount:  $293,691,000 (revenues and other  financing sources)  $6,100,000 (expenditures)    $143,954,700 (revenues and other  financing sources)  Source of Funds:  Sales tax bond proceeds and  2009 Measure A Western  County highway and bond  financing sales tax revenues,  toll revenue bonds/TIFIA  loan, federal CMAQ and STBG  funds  Budget Adjustment:No  N/A  GL/Project Accounting No.:  XX3027 000 59102 307 31 59102 (sales tax bond proceeds)  003027 000 59102 262 31 59102 (TIFIA loan)  003027 414 41403 262 31 41401 (CMAQ/STBG funds)  XX3027 96103 307 31 96103 (costs of issuance)  Fiscal Procedures Approved: Date: 04/17/2017    Attachments:  1) Resolution No. 17‐006 (draft)  2) Preliminary Official Statement (draft)  3) Seventh Supplemental (Sales Tax) Indenture (draft)  4) Continuing Disclosure Agreement (draft)  5) Bond Purchase Contract (draft)  6) Master (Toll) Indenture (draft)  7) First Supplemental (Toll) Indenture (draft)  8) TIFIA Loan Agreement Term Sheet (draft) – TIFIA Loan Agreement to be provided at  Commission meeting  36 BLANK OH&S Draft – 4/13/17 OHSUSA:766606664 NO. 17-006 RESOLUTION AUTHORIZING THE ISSUANCE AND SALE OF NOT TO EXCEED $218,760,000 AGGREGATE PRINCIPAL AMOUNT OF RIVERSIDE COUNTY TRANSPORTATION COMMISSION SALES TAX REVENUE BONDS (LIMITED TAX BONDS) IN ONE OR MORE SERIES, INCLUDING THE EXECUTION AND DELIVERY OF A SEVENTH SUPPLEMENTAL INDENTURE, A PURCHASE CONTRACT, AN OFFICIAL STATEMENT, AND A CONTINUING DISCLOSURE AGREEMENT, AND THE AUTHORIZATION OF A TOLL REVENUE BOND FINANCING OF THE I-15 EXPRESS LANES PROJECT IN AN AMOUNT NOT TO EXCEED $165,000,000, INCLUDING THE EXECUTION AND DELIVERY OF A MASTER INDENTURE, A FIRST SUPPLEMENTAL INDENTURE AND A LOAN AGREEMENT RELATING TO TRANSPORTATION INFRASTRUCTURE FINANCE AND INNOVATION ACT PROGRAM CREDIT ASSISTANCE, AND THE TAKING OF ALL OTHER ACTIONS NECESSARY IN CONNECTION THEREWITH _______________________ WHEREAS, the Riverside County Transportation Commission (the “Commission”) is a county transportation commission duly organized and existing pursuant to the County Transportation Commissions Act, being Division 12 of the Public Utilities Code of the State of California (Section 130000 et seq.) (as amended, the “Act”); WHEREAS, the Commission is authorized pursuant to the Riverside County Transportation Sales Tax Act, being Division 25 of the Public Utilities Code of the State of California (Section 240000 et seq.) (the “Sales Tax Act”), to, among other things, and with voter approval, levy a retail transactions and use tax in accordance with the provisions of Part 1.6 (commencing with Section 7251) of Division 2 of the California Revenue and Taxation Code (the “Sales Tax Law”) and to issue limited tax bonds payable from the proceeds of such tax; WHEREAS, the Commission adopted Ordinance No. 02-001, named the “Transportation Expenditure Plan and Retail Transaction and Use Tax Ordinance” (the “Ordinance No. 02-001”) on May 8, 2002, pursuant to the provisions of the Sales Tax Act, which Ordinance provides for the imposition of a retail transactions and use tax (the “Sales Tax”) applicable in the incorporated and unincorporated territory of Riverside County (the “County”) in accordance with the provisions of the Sales Tax Law at the rate of one-half of one percent (1/2%) commencing July 1, 2009 and continuing for a period not to exceed thirty (30) years; WHEREAS, by its terms, the Ordinance became effective at the close of the polls on November 5, 2002, the day of the election at which the proposition imposing the Sales Tax was approved by more than two-thirds of the electors voting on the measure; WHEREAS, the Ordinance empowers the Commission to sell or issue, from time to time, on or before the collection of the Sales Tax, bonds, or other evidences of indebtedness (collectively, the “Sales Tax Debt”), the proceeds of which will fund capital expenditures for various purposes, including to carry out the transportation projects described in the Riverside ATTACHMENT 1 37 -2- OHSUSA:766606664 County Transportation Improvement Plan, adopted as part of the Ordinance, including any future amendments thereto (the “Expenditure Plan”); WHEREAS, on July 14, 2010, the Commission adopted Ordinance No. 10-002 (the “Ordinance No. 10-002” and, collectively with Ordinance No. 02-001, as amended from time to time, the “Ordinance”) providing that the aggregate principal amount of Sales Tax Debt at any one time outstanding shall not exceed $975 million; WHEREAS, by its terms, the Ordinance No. 10-002 became effective at the close of the polls on November 2, 2010, the day of the election at which the proposition relating to the Ordinance No. 10-002 was approved by more than a majority of electors voting on the measure; WHEREAS, the Ordinance authorizes the Commission to apply proceeds of the Sales Tax (the “Sales Tax Revenues”) for transportation purposes, including the construction, capital, acquisition, maintenance and operation of streets, roads, highways, including state highways, and for related purposes; WHEREAS, the Commission is further authorized by Section 240309 of the California Public Utilities Code to issue from time to time limited tax bonds (defined to include indebtedness and securities of any kind or class, including sales tax revenue bonds), secured and payable in whole or in part from Sales Tax Revenues; WHEREAS, pursuant to Streets and Highways Code Sections 149.7 and 149.8, including Chapter 421 of the California Statutes of 2008 (Assembly Bill 1954) (the “Toll Act”), the Commission is authorized to set, levy and collect tolls, user fees, or other similar charges, payable for use of high-occupancy toll (“HOT”) lanes and other facilities in the Interstate 15 (referenced in the Toll Act as State Highway Route 15) (the “I-15”) corridor in Riverside County (the “Toll Road”), and to issue one or more series of bonds or other obligations (the “Toll Revenue Bonds”) pursuant to the terms and conditions of a resolution adopted by a two-thirds vote of the Commission, which Obligations may be payable from the proceeds of such tolls (the “Toll Revenues”) and any other source of revenues available to the Commission and pledged as security for the Toll Revenue Bonds; WHEREAS, the Act authorizes Toll Revenue Bonds to be issued for the purpose of financing the planning, design, development, financing, construction, reconstruction, rehabilitation, improvement, acquisition, lease, operation, or maintenance, or any combination of these, with respect to tolled and non-tolled facilities, structures, auxiliary lanes, on-ramps, turnarounds, connector roads, bridges, and roadways that are on, necessary for, or related to the construction or operation of the I-15 Express Lanes in northern Riverside County, including the construction of one to two tolled express lanes extending approximately 15 miles in each direction between the I-15/Cajalco Road interchange in Corona and I-15/SR-60 interchange just south of the Riverside/San Bernardino County line and the installation of an electronic toll enforcement and collection system (the “I-15 Express Lanes Project”); WHEREAS, the Commission submitted an application to the California Transportation Commission (the “CTC”) to develop the I-15 Express Lanes Project, and pursuant thereto, the 38 -3- OHSUSA:766606664 CTC conducted two public hearings and determined the application was eligible and submitted the same for legislative approval which was obtained and codified in the Toll Act; WHEREAS, pursuant to Chapter 6.5 (commencing with Section 6800) of Part 1 of Division 2 of the Public Contract Code, the Commission is authorized to employ the design- build method of procurement in connection with the I-15 Express Lanes Project; WHEREAS, the California Department of Transportation (“Caltrans”) and the Commission have entered into Agreement No. 17-31-002-00, the CALTRANS/RCTC Toll Facility Agreement (Including Real Property Lease) Interstate 15 Express Lanes in Riverside County on September 29, 2016, by and between the Commission and Caltrans (the “Toll Facility Agreement”); WHEREAS, Caltrans and the Commission have entered into the Cooperative Agreement No. 16-31-038-00 for Design-Build of the I-15 Express Lanes Project on May 31, 2016, as required by Public Contract Code Section 6821, by and between the Commission and Caltrans (as further defined herein, the “Caltrans DB Cooperative Agreement”); WHEREAS, Caltrans served as lead agency for environmental review, analysis and approval of the I-15 Express Lanes Project pursuant to the requirements of the California Environmental Quality Act (“CEQA”), and in such capacity prepared a Mitigated Negative Declaration and Initial Study (“MND”) for the project; WHEREAS, Caltrans adopted the MND, adopted an Environmental Commitments Record (“Mitigation Monitoring and Reporting Program”) and approved the I-15 Express Lanes Project on May 4, 2016; WHEREAS, the Commission has completed its environmental assessment of the I-15 Express Lanes Project following consideration of the MND and Mitigation Monitoring and Reporting Program, and has approved Resolution No. 06-012 on July 13, 2016, adopting the Mitigation Monitoring and Reporting Program and approving the I-15 Express Lanes Project; WHEREAS, the Commission has submitted an application to the United States Department of Transportation (the “Department of Transportation”) for Federal project credit assistance under the Transportation Infrastructure Finance and Innovation Act, codified under Sections 601-609 of title 23 of the United States Code, and the Commission anticipates full approval for project credit assistance in an original amount (excluding compounded interest) of not to exceed one hundred sixty-five million dollars ($165,000,000) (the “TIFIA Loan”), to fund a portion of the I-15 Express Lanes Project; WHEREAS, that certain Master Indenture, dated as of July 1, 2017 (the “Toll Revenue Bond Indenture”), by and between the Commission and U.S. Bank National Association (the “Toll Trustee”), will secure the Commission’s obligation to repay the TIFIA Loan from Toll Revenues pursuant to the terms of the Toll Revenue Bond Indenture as supplemented by a First Supplemental Indenture (the “First Supplemental Indenture”) and a loan agreement to be entered into by and between the Commission and the Department of Transportation (the “TIFIA Loan Agreement”); 39 -4- OHSUSA:766606664 WHEREAS, if the TIFIA Loan is not obtained, the Commission will issue Toll Revenue Bonds (the “Toll Revenue Bonds”) under the Toll Revenue Bond Indenture and the First Supplemental Indenture will secure the repayment of Toll Revenue Bonds; WHEREAS, the Commission hereby determines to issue its Toll Revenue Bond, 2017 TIFIA Series, (the “TIFIA Toll Bond” and collectively, with the Toll Revenue Bonds, the “Toll Obligation”) in a principal amount not to exceed one hundred sixty-five million dollars ($165,000,000) under the Toll Revenue Bond Indenture to evidence the principal and interest obligations payable from the Toll Revenues; WHEREAS, the Commission has heretofore issued its Sales Tax Revenue Bonds (Limited Tax Bonds) in the aggregate principal amount of $756,240,000 (the “Outstanding Sales Tax Bonds”), pursuant to an indenture, dated as of June 1, 2008, as amended and supplemented, including by a second supplemental indenture, dated as of October 1, 2009, a third supplemental indenture, dated as of November 1, 2010, a fourth supplemental indenture, dated as of September 1, 2011, a fifth supplemental indenture, dated as of June 1, 2013, and a sixth supplemental indenture, dated as of October 1, 2016 (collectively, and as subsequently amended from time to time, the “Sales Tax Revenue Bond Indenture”), each by and between the Commission and U.S. Bank National Association, as trustee (the “Sales Tax Trustee”); WHEREAS, the Commission has heretofore authorized the issuance from time to time of its Commercial Paper Notes (Limited Tax Bonds), Series A and Series B (the “CP Notes”), pursuant to an indenture, dated as of March 1, 2005, by and between the Commission and U.S. Bank National Association, as trustee and an issuing and paying agent agreement, dated as of March 1, 2005, and a first supplement to issuing and paying agent agreement, dated as of April 1, 2012, each by and between the Commission and U.S. Bank Trust National Association, as issuing and paying agent (collectively, the “CP Documents”); WHEREAS, the Commission previously determined pursuant to Resolution No. 13-021 adopted by the Commission on September 11, 2013, to permanently decrease the aggregate principal amount of CP Notes authorized to be issued and outstanding pursuant to the CP Documents to the Series A Notes in an amount not to exceed sixty million dollars ($60,000,000) and amended related agreements in connection therewith and it may be necessary to further amend the CP Documents to decrease or eliminate the amount of CP Notes authorized to be issued or replace the existing letter of credit providing credit and liquidity support for the CP Notes; WHEREAS, the Commission hereby determines that one or more new series or subseries of bonds in an aggregate principal amount not to exceed two hundred eighteen million seven hundred sixty thousand dollars ($218,760,000) and payable on a parity with the Outstanding Sales Tax Bonds is necessary in order to finance (i) funds for portions of the I-15 Express Lanes Project authorized in the Expenditure Plan, including the reimbursement of prior Commission expenditures on such project (ii) funds related to the construction or operation of the portions of the State Highway Route 91 between the Orange and Riverside County line to the west and State Highway Route 15 to the east (the “Riverside SR-91 Corridor Improvement Project”) authorized in the Expenditure Plan, (iii) the refunding of all or a portion of the outstanding CP Notes, and (iv) the costs of issuance incurred in connection with such bonds, and 40 -5- OHSUSA:766606664 the Commission has determined that such bonds in an amount not to exceed such principal amount or such lesser principal amount as when combined with the then Outstanding Sales Tax Revenue Bonds and the obligations under the CP Documents will not exceed the aggregate amount of $975,000,000 shall be issued, secured by the Sales Tax Revenues and entitled, “Riverside County Transportation Commission Sales Tax Revenue Bonds (Limited Tax Bonds), Series 2017” (the “Series 2017 Sales Tax Bonds”); WHEREAS, the Series 2017 Sales Tax Bonds authorized herein are subject to Chapter 9 of Title 10 of Part 2 of the Code of Civil Procedure of the State of California, (Section 860 et seq.) and, pursuant thereto, will be conclusively valid and binding on the sixty-first day following the approval and adoption of this Resolution by the Commission absent any action taken thereunder by any interested party; WHEREAS, the Commission has heretofore expended approximately $62,000,000 of its Sales Tax Revenues on the I-15 Express Lanes Project and expects that an additional allocation of Sales Tax Revenues, in an aggregate amount not expected to exceed sixty-four million dollars ($64,000,000]) (the “Additional Allocation”), may be required to support the Toll Bond financing of the I-15 Express Lanes Project, in accordance with the terms of the Toll Revenue Bonds Indenture, in order to obtain federal support in the form of the TIFIA Loan and provide for initial operations; WHEREAS, the Commission has projected approximately $95,312,000 of additional costs related to the Riverside SR-91 Corridor Improvement Project related primarily to increased right of way acquisition costs; WHEREAS, the following documents have been prepared and presented to the Commission (collectively, the “Project Financing Documents”): (1) a proposed form of Seventh Supplemental Indenture (the “Seventh Supplemental Sales Tax Revenue Bond Indenture”), by and between the Commission and the Sales Tax Trustee, providing for the issuance of the Series 2017 Sales Tax Bonds; (2) a proposed form of bond purchase agreement setting forth the terms of sale of the Series 2017 Sales Tax Bonds (the “Sales Tax Purchase Contract”), in an aggregate principal amount not to exceed two hundred eighteen million seven hundred sixty thousand dollars ($218,760,000), which the Commission proposes to enter into with Bank of America Merrill Lynch, Pierce, Fenner & Smith Incorporated, Goldman, Sachs & Co., and Barclays Capital, Inc., as representatives, acting on behalf of themselves and Academy Securities and Fidelity Capital Markets (collectively, the “Sales Tax Bond Underwriters”); (3) a proposed form of official statement in preliminary form to be distributed in connection with the offering and sale of the Series 2017 Sales Tax Bonds (the “Official Statement”); (4) a proposed form of Continuing Disclosure Agreement to be executed and delivered by the Commission to assist the Sales Tax Bond Underwriters in 41 -6- OHSUSA:766606664 satisfying their respective obligations under Rule 15c2-12 promulgated by the Securities and Exchange Commission; (5) a proposed form of Toll Revenue Bond Indenture and First Supplemental Indenture, each by and between the Commission and the Toll Trustee; and (6) a proposed form of TIFIA Loan Agreement, by and between the Commission and the Department of Transportation, providing the repayment terms of the TIFIA Loan and related covenants; and WHEREAS, the Commission has been presented with proposed forms of the Project Financing Documents relating to the financing described herein (the “Project Financing”), and the Commission has examined and approved each document and desires to authorize and direct the execution of such documents as are specified herein and such other documents as are necessary in connection with the Project Financing and to authorize and direct the consummation of such financing; NOW THEREFORE, THE RIVERSIDE COUNTY TRANSPORTATION COMMISSION RESOLVES: Section 1. The Commission finds and determines that the foregoing recitals are true and correct and makes them an effective part of this Resolution by incorporating them herein by reference. Section 2. The issuance by the Commission of not to exceed $218,760,000 aggregate principal amount of Riverside County Transportation Commission Sales Tax Revenue Bonds (Limited Tax Bonds), Series 2017, or such lesser principal amount as when combined with the then Outstanding Sales Tax Revenue Bonds and the obligations under the CP Documents will not exceed the aggregate amount of $975,000,000, in accordance with the provisions set forth in the Sales Tax Revenue Bond Indenture and the Seventh Supplemental Sales Tax Revenue Bond Indenture, in one or more series or subseries, is hereby authorized and approved. Section 3. The proposed form of Seventh Supplemental Sales Tax Revenue Bond Indenture presented to this meeting and the terms and conditions thereof are hereby approved. The structure, date, maturity date or dates (not to exceed June 1, 2039), fixed interest rate or rates (such rates not to exceed a maximum of 6.00% per annum), interest payment dates, forms, registration privileges, place or places of payment, terms of redemption, mandatory purchase, additional series designation and number thereof and other terms of the Series 2017 Sales Tax Bonds shall be (subject to the foregoing limitations) as provided in the Sales Tax Revenue Bond Indenture and the Seventh Supplemental Sales Tax Revenue Bond Indenture as finally executed and delivered. The Executive Director is hereby authorized and directed, for and in the name and on behalf of the Commission, to execute and deliver the Seventh Supplemental Sales Tax Revenue Bond Indenture, in substantially said form, with such changes therein as the officer executing the same may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof. 42 -7- OHSUSA:766606664 Section 4. The proposed form of Purchase Contract presented to this meeting and the terms and conditions thereof are hereby approved. The Executive Director is hereby authorized and directed, for and in the name and on behalf of the Commission, to sell the Series 2017 Sales Tax Bonds to the Sales Tax Bond Underwriters pursuant to the Purchase Contract, with the Sales Tax Bond Underwriters’ compensation not to exceed 1.00% of the principal amount of the Series 2017 Sales Tax Bonds, and to execute and deliver the Purchase Contract, in substantially said form, with such changes therein as the officer executing the same may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof. Section 5. The proposed form of Official Statement presented to this meeting is hereby approved. The Executive Director is hereby authorized and directed to execute and deliver the Official Statement in substantially said form with such changes, insertions and deletions as may be approved by the Executive Director, said execution being conclusive evidence of such approval; and the Executive Director is hereby authorized to execute a certificate confirming that the Official Statement in preliminary form is “deemed final” by the Commission for purposes of Securities and Exchange Commission Rule 15c2-12. The distribution by the Sales Tax Bond Underwriters of copies of the Official Statement in final form to all actual purchasers of the Series 2017 Sales Tax Bonds, and the distribution by the Sales Tax Bond Underwriters of the Official Statement in preliminary form to potential purchasers of the Series 2017 Sales Tax Bonds, is hereby authorized and approved. Section 6. The proposed form of Continuing Disclosure Agreement presented to this meeting is hereby approved. The Executive Director is hereby authorized and directed, for and in the name and on behalf of the Commission, to execute and deliver the Continuing Disclosure Agreement in substantially said form, with such changes therein as such officer executing the same may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof. Section 7. The proposed form of TIFIA Loan Agreement presented to this meeting and the terms and conditions thereof are hereby approved. The issuance of the Toll Obligation in the principal amount not to exceed $165,000,000, the structure, date, maturity date (not to exceed the date that is thirty-five (35) years after the projected date of substantial completion of the I-15 Express Lanes Project), fixed interest rate or rates (such rates not to exceed a maximum of 8.00% per annum), interest payment dates and provisions (including deferred and compounded interest), place or places of payment, terms of prepayment and other terms of the Toll Obligation shall be (subject to the foregoing limitations) as provided in the TIFIA Loan Agreement or, in the alternative, the Toll Revenue Bonds and the Toll Revenue Bond Indenture, as finally executed and delivered. The Executive Director is hereby authorized and directed, for and in the name and on behalf of the Commission, to execute and deliver the Toll Obligation, in substantially said form, with such changes therein as the officer executing the same may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof. The Executive Director is hereby further authorized and directed, for and in the name and on behalf of the Commission, to execute and deliver any additional documents, including the First Supplemental Toll Revenue Bond Indenture, which the Executive Director may deem necessary or desirable, following consultation with bond counsel to the Commission, to establish the TIFIA Loan 43 -8- OHSUSA:766606664 Agreement as a Toll Revenue Bond or to issue Toll Revenue Bonds, secured and payable upon the terms set forth in the TIFIA Loan Agreement (if executed) and the Toll Revenue Bond Indenture. Section 8. The Toll Revenue Bond Indenture and the First Supplemental Indenture, as presented to this meeting, and the terms and conditions thereof are hereby approved. The structure, date, maturity date or dates (not to exceed 35 years following the date on which the Toll Road is opened for public use), fixed or variable interest rate or rates (such rates not to exceed a maximum of 8% per annum, or methods of determining the same, interest payment dates, forms, registration privileges, place or places of payment, terms of redemption, tender, mandatory purchase, additional series designation and number thereof and other terms of the Toll Obligation, shall as provided in the Toll Revenue Bond Indenture and First Supplemental Indenture, as finally executed and delivered. The Executive Director is hereby authorized and directed, for and in the name and on behalf of the Commission, to execute and deliver the Toll Revenue Bond Indenture, including the Master Indenture and the First Supplemental Indenture, in substantially said forms, with such additional changes therein as the officer executing the same may require or approve, including, without limitation, changes as may be necessary to assign, pledge or mortgage the Commission’s right, title and interest, to the extent permitted by law, in any agreements relating to the Toll Road, including, without limitation, the design, construction, operation and maintenance thereof, such approval to be conclusively evidenced by the execution and delivery thereof. Section 9. Each of the Executive Director, the Deputy Executive Director of the Commission or the Chief Financial Officer of the Commission, acting singly (each an “Authorized Officer”), is hereby authorized and directed to give all approvals, consents, directions, notices, orders and requests, and to take any other actions permitted by or required under the letter of credit providing credit and liquidity support for outstanding CP Notes and all documents related thereto, including, without limitation, to terminate the CP Program, decrease the aggregate principal amount of CP Notes support provided by, or execute and deliver any amendment to or replacement of, any such letters of credit or such related documents as may be necessary or desirable in connection with the refunding or defeasance of the outstanding CP Notes upon the issuance of the Series 2017 Bonds without further authorization or direction by the Commission. Section 10. Each Authorized Officer is hereby authorized and directed to enter into or to instruct the Sales Tax Trustee to enter into one or more investment agreements (hereinafter collectively referred to as the “Investment Agreement”) providing for the investment of moneys in any of the funds and accounts created under the Sales Tax Revenue Bond Indenture, including the Seventh Supplemental Sales Tax Revenue Bond Indenture, on such terms as the Authorized Officer executing the same shall deem appropriate. Pursuant to Section 5922 of the California Government Code, the Commission hereby finds and determines that the Investment Agreement will reduce the amount and duration of interest rate risk with respect to amounts invested pursuant to the Investment Agreement and is designed to reduce the amount or duration of payment, rate, spread or similar risk or result in a lower cost of borrowing when used in combination with the Series 2017 Sales Tax Bonds, or enhance the relationship between risk and return with respect to investments. 44 -9- OHSUSA:766606664 Section 11. All approvals, consents, directions, notices, orders, requests and other actions permitted or required by any of the documents authorized by this Resolution, whether before or after the issuance of the Series 2017 Sales Tax Bonds, including, without limitation, any amendment of any of the documents authorized by this Resolution, or other agreements related thereto or related to the CP Notes or the TIFIA Loan, and any of the foregoing that may be necessary or desirable in connection with any investment of proceeds of the Series 2017 Sales Tax Bonds, or in connection with the addition, substitution or replacement of underwriters, or any agreements with consultants, paying agents, escrow agents or verification agents, the removal or replacement of the Sales Tax Trustee or Toll Trustee or any similar action may be given or taken by an Authorized Officer, without further authorization or direction by the Commission, and each Authorized Officer, acting singly, is hereby authorized and directed to give any such approval, consent, direction, notice, order, request, or other action and to execute such documents and take any such action which such Authorized Officer may deem necessary or desirable to further the purposes of this Resolution. Section 12. All actions heretofore taken by the officers and agents of the Commission with respect to the Project Financing and the issuance and sale of the Series 2017 Sales Tax Bonds, are hereby ratified, confirmed and approved. If at the time of execution of any of the documents authorized herein, the Executive Director is unavailable, such documents may be executed by the Deputy Executive Director of the Commission or the Chief Financial Officer in lieu of the Executive Director. The Chair of the Board or, in the absence of such official, a Vice Chair of the Board, is hereby authorized to execute and deliver the Series 2017 Sales Tax Bonds and the Toll Bond, 2017 TIFIA Series or the Toll Revenue Bonds. The Chief Financial Officer of the Commission shall act as the Auditor-Controller of the Commission for execution of the Series 2017 Sales Tax Bonds and is hereby authorized to execute and attest to the execution of the Series 2017 Sales Tax Bonds and to countersign the Toll Bond. The Clerk of the Board is hereby authorized to attest to the execution by an Authorized Officer of any of such documents as said officers deem appropriate. The officers and agents of the Commission are hereby authorized and directed, jointly and severally, for and in the name and on behalf of the Commission, to adopt or amend written procedures relating to its bonds and to do any and all things and to take any and all actions and to execute and deliver any and all agreements, certificates and documents, including, without limitation, signature certificates, certificates concerning the contents of the Official Statement and the representations and warranties in the Purchase Contract, any tax certificates or agreements, any agreements for depository or verification services, and any agreements for rebate compliance services, which they, or any of them, may deem necessary or advisable in order to consummate the Project Financing and the issuance and sale of the Series 2017 Sales Tax Bonds and otherwise to carry out, give effect to and comply with the terms and intent of the Ordinance, this Resolution, the Act, the Sales Tax Act, the Series 2017 Sales Tax Bonds, the TIFIA Loan and the other documents approved hereby. Section 13. This Resolution shall take effect immediately upon its adoption and approval. 45 -10- OHSUSA:766606664 APPROVED AND ADOPTED by the Riverside County Transportation Commission at its meeting on [May 10, 2017]. By: Chairman, Board of Commissioners ATTEST: By: ______________________________ Clerk of the Board of the Commission 46 -11- OHSUSA:766606664 CERTIFICATE OF THE CLERK OF THE BOARD OF THE RIVERSIDE COUNTY TRANSPORTATION COMMISSION I, Jennifer Harmon, Clerk of the Board of the Riverside County Transportation Commission (the “Commission”), hereby certify that the foregoing is a full, true and correct copy of a resolution duly adopted by at least a two-thirds vote of the Commission at a meeting of the governing board of said Commission duly and regularly held in Riverside, California, on [May 10, 2017], of which meeting all of the members of said Commission had due notice. I further certify that I have carefully compared the foregoing copy with the original minutes of said meeting on file and of record in my office; that said copy is a full, true and correct copy of the original resolution adopted at said meeting and entered in said minutes; and that said resolution has not been amended, modified, rescinded or revoked in any manner since the date of its adoption, and the same is now in full force and effect. I further certify that an agenda of said meeting was posted at least 72 hours before said meeting at a location in Riverside, California, freely accessible to the public and a brief general description of the resolution to be adopted at said meeting appeared on said agenda. IN WITNESS WHEREOF, I have executed this certificate hereto as of this date, __________, 2017. By Clerk 47 BLANK DRAFT OF 04/13/17 36472210.5 11504119 PRELIMINARY OFFICIAL STATEMENT DATED ________, 2017 NEW ISSUE—BOOK-ENTRY ONLY RATINGS: S&P: “___” [DAC Logo] Fitch: “___” See “RATINGS” herein In the opinion of Orrick, Herrington & Sutcliffe LLP, Bond Counsel to the Commission, 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, interest on the 2017 Bonds is excluded from gross income for federal income tax purposes under Section 103 of the Internal Revenue Code of 1986 and is exempt from State of California personal income taxes. In the further opinion of Bond Counsel, interest on the 2017 Bonds is not a specific preference item for purposes of the federal individual or corporate alternative minimum taxes, although Bond Counsel observes that such interest is included in adjusted current earnings when calculating corporate alternative minimum taxable income. Bond Counsel expresses no opinion regarding any other tax consequences related to the ownership or disposition of, or the amount, accrual or receipt of interest on, the 2017 Bonds. See “TAX MATTERS.” $__________* RIVERSIDE COUNTY TRANSPORTATION COMMISSION Sales Tax Revenue Bonds (Limited Tax Bonds) 2017 Series A Dated: Date of Delivery Due: June 1, as shown on inside cover The Sales Tax Revenue Bonds described above (the “2017 Bonds”) are being issued by the Riverside County Transportation Commission (the “Commission”) pursuant to an Indenture, dated as of June 1, 2008, between the Commission and U.S. Bank National Association, as trustee (the “Trustee”), as supplemented, including as supplemented by a Seventh Supplemental Indenture, dated as of July 1, 2017, between the Commission and the Trustee (collectively, the “Indenture”). The proceeds of the 2017 Bonds will be applied to (i) pay a portion of the costs of the I-15 Express Lanes Project (as defined herein), (ii) pay a portion of the costs for the Riverside SR-91 Corridor Improvement Project (as defined herein), (iii) retire all or a portion of the outstanding Notes (as defined herein), and (iv) pay the costs of issuance of the 2017 Bonds. See “PLAN OF FINANCE” and “ESTIMATED SOURCES AND USES OF PROCEEDS.” Interest on the 2017 Bonds will be payable on each June 1 and December 1, commencing December 1, 2017. The 2017 Bonds are initially being issued as fully registered bonds without coupons in the denominations of $5,000 and any integral multiple thereof. The 2017 Bonds will be registered in the name of Cede & Co., as holder of the 2017 Bonds and nominee for The Depository Trust Company (“DTC”). Purchasers will not receive physical certificates representing their interest in the 2017 Bonds purchased. The principal or redemption price of and interest on the 2017 Bonds are payable by wire transfer to DTC which, in turn, is obligated to remit such principal, redemption price or interest to DTC Participants for subsequent disbursement to the Beneficial Owners of the 2017 Bonds. The 2017 Bonds will be subject to redemption as described herein. See “THE 2017 BONDS” herein. The 2017 Bonds are limited obligations of the Commission payable from and secured solely by a pledge of the Revenues (which is defined herein and which primarily consists of the receipts from the imposition in the County of Riverside, California of a ½-cent sales tax that became effective on July 1, 2009 (the “Sales Tax”), less certain administrative fees paid to the California State Board of Equalization), as described herein. The Sales Tax was approved by more than a two-thirds vote of the electorate of the County of Riverside on November 5, 2002 and is scheduled to expire on June 30, 2039. The 2017 Bonds are secured by a pledge of the Revenues on a parity with the 2009 Bonds, the 2010 Bonds and the 2013 Bonds (each as defined herein) and any Additional Bonds and Parity Obligations issued or incurred under the Indenture. See “SECURITY AND SOURCES OF PAYMENT FOR THE 2017 BONDS – Additional Bonds and Parity Obligations” and “OTHER SALES TAX OBLIGATIONS – Existing Bonds.” *Preliminary, subject to change.This Preliminary Official Statement and the information contained herein are subject to completion or amendment. Under no circumstances shall this Preliminary Official Statement constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful. ATTACHMENT 2 48 36472210.5 NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE COUNTY OF RIVERSIDE, THE STATE OF CALIFORNIA OR ANY POLITICAL SUBDIVISION OR PUBLIC AGENCY THEREOF, OTHER THAN THAT OF THE COMMISSION TO THE EXTENT OF THE PLEDGE OF THE REVENUES, IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF OR INTEREST ON THE 2017 BONDS. This cover page contains certain information for general reference only. It is not a summary of the security or terms of this issue. Investors must read the entire Official Statement to obtain information essential to make an informed investment decision with respect to the 2017 Bonds. The 2017 Bonds are offered when, as and if issued and received by the Underwriters, subject to the approval of validity by Orrick, Herrington & Sutcliffe LLP as Bond Counsel to the Commission, and certain other conditions. Certain legal matters will be passed on for the Commission by Norton Rose Fulbright US LLP, Los Angeles, California, as Disclosure Counsel, and by Best Best & Krieger LLP, Riverside, California, the Commission’s General Counsel. It is anticipated that the 2017 Bonds will be available for delivery through the book-entry facilities of DTC on or about __________, 2017. BofA Merrill Lynch Goldman, Sachs & Co. Barclays Academy Securities Fidelity Capital Markets Dated: ___________, 2017 49 36472210.5 MATURITY SCHEDULE $___________* RIVERSIDE COUNTY TRANSPORTATION COMMISSION Sales Tax Revenue Bonds (Limited Tax Bonds) 2016 Series A $__________ Serial Bonds Maturity Date (June 1) Principal Amount Interest Rate Price Yield CUSIP† ( ) $______ ____% Term Bonds due June 1, 20__ - Price: _________%, Yield: ____% CUSIP †: __________ ________________________________ * Preliminary, subject to change. † CUSIP is a registered trademark of the American Bankers Association. The CUSIP data herein are provided by CUSIP Global Services, managed on behalf of the American Bankers Association by Standard & Poor’s. The CUSIP numbers are not intended to create a database and do not serve in any way as a substitute for CUSIP service. CUSIP numbers have been assigned by an independent company not affiliated with the Commission and are provided solely for convenience and reference. The CUSIP numbers for a specific maturity are subject to change after the issuance of the 2017 Bonds. The Commission and the Municipal Advisor are not responsible for the selection or accuracy of the CUSIP numbers set forth herein. 50 36472210.5 No dealer, salesman or any other person has been authorized by the Riverside County Transportation Commission (the “Commission”) to give any information or to make any representations, other than those contained in this Official Statement, and, if given or made, such other information or representations must not be relied upon as having been authorized by the Commission. 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 2017 Bonds by a person in any jurisdiction in which it is unlawful for such person to make such an offer, solicitation or sale. This Official Statement is not to be construed as a contract with the purchasers of the 2017 Bonds. Neither the delivery of this Official Statement nor the sale of any of the 2017 Bonds implies that the information herein is correct as of any time subsequent to the date hereof. The information and expressions of opinion herein are subject to change without notice, and neither the delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create the implication that there has been no change in the matters described herein since the date hereof. This Official Statement is submitted in connection with the sale of securities referred to herein and may not be reproduced or be used, as a whole or in part, for any other purpose. The information set forth herein has been obtained from the Commission and other sources believed to be reliable. The information and expressions of opinions herein are subject to change without notice and neither delivery of the 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 Commission since the date hereof. All summaries contained herein of the Indenture (as defined herein) or other documents are made subject to the provisions of such documents and do not purport to be complete statements of any or all of such provisions. All statements made herein are made as of the date of this document by the Commission except statistical information or other statements where some other date is indicated in the text. The Underwriters have provided the following sentence for inclusion in this Official Statement. The Underwriters have reviewed the information in this Official Statement in accordance with, and as part of, their responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriters do not guarantee the accuracy or completeness of such information. In connection with the offering of the 2017 Bonds, the Underwriters in connection with any reoffering may over-allot or effect transactions which stabilize or maintain the market price of the 2017 Bonds at a level above that which might otherwise prevail in the open market. Such stabilizing, if commenced, may be discontinued at any time. The Underwriters in connection with any reoffering may offer and sell the 2017 Bonds 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 Underwriters. 51 36472210.5 FORWARD-LOOKING STATEMENTS Certain statements included or incorporated by reference in this Official Statement constitute forward-looking statements. Such statements are generally identifiable by the terminology used such as “plan,” “expect,” “estimate,” “project,” “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. No assurance is given that actual results will meet the forecasts of the Commission in any way, regardless of the level of optimism communicated in the information. The Commission is not obligated to issue any updates or revisions to the forward-looking statements if or when its expectations, or events, conditions or circumstances on which such statements are based occur. 52 36472210.5 RIVERSIDE COUNTY TRANSPORTATION COMMISSION BOARD MEMBERS John F. Tavaglione (County of Riverside), Chair Dana Reed (City of Indian Wells), Vice Chair Chuck Washington (County of Riverside), 2nd Vice Chair Marion Ashley (County of Riverside) Robert Radi (City of La Quinta) To be Appointed (County of Riverside) Bob Magee (City of Lake Elsinore) Kevin Jeffries (County of Riverside) Neil Winter (City of Menifee) Deborah Franklin (City of Banning) Victoria Baca (City of Moreno Valley) Nancy Carroll (City of Beaumont) Rick Gibbs (City of Murrieta) Joseph DeConinck (City of Blythe) Berwin Hanna (City of Norco) Jim Hyatt (City of Calimesa) Jan Harnik (City of Palm Desert) Dawn Haggerty (City of Canyon Lake) Ginny Foat (City of Palm Springs) Greg Pettis (City of Cathedral City) Michael M. Vargas (City of Perris) Steven Hernandez (City of Coachella) Ted Weill (City of Rancho Mirage) Karen Spiegel (City of Corona) Rusty Bailey (City of Riverside) Scott Matas (City of Desert Hot Springs) Andrew Kotyuk (City of San Jacinto) Adam Rush (City of Eastvale) Michael S. Naggar (City of Temecula) Linda Krupa (City of Hemet) Ben Benoit (City of Wildomar) Michael Wilson (City of Indio) John Bulinski (Caltrans District 8) Brian Berkson (City of Jurupa Valley) MANAGEMENT Executive Director Anne Mayer Deputy Executive Director John Standiford Chief Financial Officer Theresia Trevino SPECIAL SERVICES Municipal Advisor Fieldman, Rolapp & Associates Irvine, California Bond Counsel Orrick, Herrington & Sutcliffe LLP San Francisco, California Disclosure Counsel Norton Rose Fulbright US LLP Los Angeles, California Trustee U.S. Bank National Association Los Angeles, California 53 TABLE OF CONTENTS Page 36472210.5 i INTRODUCTION ......................................................................................................................... 1 General ............................................................................................................................... 1 The Commission ................................................................................................................ 1 Authority for Issuance........................................................................................................ 2 Purpose and Application of Proceeds ................................................................................ 2 The 2017 Bonds ................................................................................................................. 2 Security for the 2017 Bonds .............................................................................................. 2 No Reserve Fund................................................................................................................ 3 Continuing Disclosure ....................................................................................................... 3 References .......................................................................................................................... 3 THE 2017 BONDS ........................................................................................................................ 4 General ............................................................................................................................... 4 Redemption of 2017 Bonds ............................................................................................... 4 Selection of 2017 Bonds for Redemption .......................................................................... 5 Notice of Redemption ........................................................................................................ 5 Purchase In Lieu of Redemption ........................................................................................ 6 PLAN OF FINANCE ..................................................................................................................... 6 General ............................................................................................................................... 6 I-15 Express Lanes Project ................................................................................................ 6 Riverside SR-91 Corridor Improvement Project ............................................................... 7 ESTIMATED SOURCES AND USES OF PROCEEDS .............................................................. 9 DEBT SERVICE SCHEDULE.................................................................................................... 10 SECURITY AND SOURCES OF PAYMENT FOR THE 2017 BONDS .................................. 11 Limited Obligation ........................................................................................................... 11 Pledge of Revenues .......................................................................................................... 11 Revenue Fund; Allocation of Revenues .......................................................................... 12 No Reserve Fund.............................................................................................................. 15 Additional Bonds and Parity Obligations ........................................................................ 15 OTHER SALES TAX OBLIGATIONS ...................................................................................... 17 Existing Bonds ................................................................................................................. 17 BofA Swap Agreement .................................................................................................... 18 Subordinate Obligations................................................................................................... 19 Limitation on Outstanding Sales Tax Obligations ........................................................... 20 THE SALES TAX ....................................................................................................................... 20 General ............................................................................................................................. 20 Collection of Sales Tax Revenues ................................................................................... 21 Historical Sales Tax Revenues......................................................................................... 22 54 TABLE OF CONTENTS (continued) Page 36472210.5 ii RIVERSIDE COUNTY TRANSPORTATION COMMISSION ................................................ 23 General ............................................................................................................................. 23 State Route 91 .................................................................................................................. 24 The Transportation Expenditure Plan .............................................................................. 24 Commissioners ................................................................................................................. 25 Executive Staff ................................................................................................................. 25 Cash and Investments ...................................................................................................... 26 Debt Management Policy ................................................................................................. 26 THE I-15 EXPRESS LANES PROJECT .................................................................................... 27 RISK FACTORS ......................................................................................................................... 27 Economic Conditions ....................................................................................................... 27 Investments ...................................................................................................................... 27 Parity with Liquidity Facility Bonds................................................................................ 28 The Sales Tax ................................................................................................................... 28 Increased Internet Use May Reduce Sales Tax Revenues ............................................... 28 Proposition 218 ................................................................................................................ 28 Further Initiatives ............................................................................................................. 29 Loss of Tax Exemption .................................................................................................... 29 Reduction in Subsidy Payments....................................................................................... 29 Financial and Operating Risks of the Riverside SR-91 Corridor Improvement Project and the I-15 Express Lanes Project ......................................................... 30 Impact of Bankruptcy of the Commission ....................................................................... 30 FINANCIAL STATEMENTS ..................................................................................................... 32 LITIGATION ............................................................................................................................... 32 TAX MATTERS .......................................................................................................................... 32 CERTAIN LEGAL MATTERS .................................................................................................. 34 RATINGS .................................................................................................................................... 35 UNDERWRITING ...................................................................................................................... 35 MUNICIPAL ADVISOR............................................................................................................. 36 CONTINUING DISCLOSURE ................................................................................................... 36 MISCELLANEOUS .................................................................................................................... 36 A 55 TABLE OF CONTENTS (continued) Page 36472210.5 iii PPENDIX A – COMMISSION AUDITED FINANCIAL STATEMENTS FOR FISCAL YEAR ENDED JUNE 30, 2016.................................................... A-1 APPENDIX B – COUNTY OF RIVERSIDE DEMOGRAPHIC AND ECONOMIC INFORMATION.......................................................................................... B-1 APPENDIX C – SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE ......... C-1 APPENDIX D – FORM OF CONTINUING DISCLOSURE AGREEMENT ....................... D-1 APPENDIX E – BOOK-ENTRY SYSTEM ........................................................................... E-1 APPENDIX F – FORM OF BOND COUNSEL OPINION ................................................... F-1 56 36472210.5 1 OFFICIAL STATEMENT $___________* RIVERSIDE COUNTY TRANSPORTATION COMMISSION Sales Tax Revenue Refunding Bonds (Limited Tax Bonds) 2016 Series A INTRODUCTION General This Official Statement, which includes the cover page and the appendices hereto, sets forth certain information in connection with the offering by the Riverside County Transportation Commission (the “Commission”) of $__________* principal amount of Riverside County Transportation Commission Sales Tax Revenue Refunding Bonds (Limited Tax Bonds), 2016 Series A (the “2017 Bonds”). As used herein, the term “Bonds” means any Bonds, including the 2017 Bonds, issued pursuant to the Indenture (as defined below). All capitalized terms used and not otherwise defined herein shall have the meanings assigned to such terms in “APPENDIX C – SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE.” The Commission The Commission is a county transportation commission duly organized and existing pursuant to the County Transportation Commissions Act, being Division 12 of the Public Utilities Code of the State of California (Section 130000 et seq.). The Commission began to oversee the funding and coordination of public transportation services in 1977 within the County of Riverside (the “County”). The Commission serves as the tax authority and implementation agency for the voter-approved Measure A Transportation Improvement Program, which imposes a ½-cent sales tax within the County to fund transportation improvements. See “RIVERSIDE COUNTY TRANSPORTATION COMMISSION.” The County was organized in 1893 from territory in San Bernardino and San Diego Counties and encompasses 7,177 square miles. The County is bordered on the north by San Bernardino County, on the east by the State of Arizona, on the south by San Diego and Imperial Counties and on the west by Orange and San Bernardino Counties. The County is the fourth largest county (by area) in the State of California (the “State”) and stretches 185 miles from the Arizona border to within 20 miles of the Pacific Ocean. There are 28 incorporated cities in the County. According to the State Department of Finance, Demographic Research Unit, the County’s population was estimated at 2,360,727 as of July 1, 2016. See “APPENDIX B – COUNTY OF RIVERSIDE DEMOGRAPHIC AND ECONOMIC INFORMATION.” * Preliminary, subject to change. 57 36472210.5 2 Authority for Issuance The 2017 Bonds are being issued by the Commission under and pursuant to the Riverside County Transportation Sales Tax Act, being Division 25 of the Public Utilities Code of the State of California (Section 240000 et seq.) (the “Act”), Article 10 and Article 11 of Chapter 3 of Part 1 of Division 2 of Title 5 of the California Government Code (Section 53570 et seq.), the Transportation Expenditure Plan and Retail Transaction and Use Tax Ordinance (the “Ordinance”), adopted by the Commission on May 8, 2002 and approved by more than two- thirds of electors of the County voting on such proposition in the November 5, 2002 election, and any amendments or extensions thereto (collectively, and together with the Act, the “Law”); and an Indenture, dated as of June 1, 2008 (the “2008 Indenture”), as supplemented and amended to the date hereof, including as supplemented by a Seventh Supplemental Indenture, dated as of July 1, 2017 (the “Seventh Supplemental Indenture” and, together with the 2008 Indenture, as supplemented and amended, the “Indenture”), each between the Commission and U.S. Bank National Association, as trustee (the “Trustee”). At a special election held in the County on November 2, 2010, an amendment to the Ordinance increasing the limitation on the outstanding amount of the Commission’s bonds secured by Sales Tax Revenues from $500 million to $975 million was approved by a majority of those voting on the proposition. See “OTHER SALES TAX OBLIGATIONS – Limitation on Outstanding Sales Tax Obligations.” Purpose and Application of Proceeds The proceeds of the 2017 Bonds will be applied to (i) pay a portion of the costs of the I- 15 Express Lanes Project (as defined herein), (ii) pay a portion of the costs for the Riverside SR- 91 Corridor Improvement Project (as defined herein), (iii) retire all or a portion of the outstanding Notes (as defined herein), and (iv) pay the costs of issuance of the 2017 Bonds. See “PLAN OF FINANCE” and “ESTIMATED SOURCES AND USES OF PROCEEDS.” The 2017 Bonds Interest on the 2017 Bonds will be payable on each June 1 and December 1, commencing December 1, 2017. The 2017 Bonds will be issued as fully registered bonds without coupons in the denominations of $5,000 and any integral multiple thereof. The 2017 Bonds will be registered in the name of Cede & Co., as holder of the 2017 Bonds and nominee for The Depository Trust Company (“DTC”). Purchasers will not receive physical certificates representing their interest in the 2017 Bonds purchased. The 2017 Bonds will be subject to redemption prior to their maturity. See “THE 2017 BONDS – Redemption of 2017 Bonds.” Security for the 2017 Bonds The 2017 Bonds are limited obligations of the Commission payable from and secured by certain revenues (the “Revenues”) pledged under the Indenture, including a pledge of revenues (the “Sales Tax Revenues”) derived from a ½-cent sales tax that became effective on July 1, 2009 (the “Sales Tax”), imposed in the County in accordance with the Law and the California Transactions and Use Tax Law (Revenue and Taxation Code Section 7251 et seq.), net of an administrative fee paid to the California State Board of Equalization (the “Board of 58 36472210.5 3 Equalization”) in connection with the collection and disbursement of the Sales Tax. The Sales Tax was approved by more than two-thirds of the electorate of the County on November 5, 2002 and is scheduled to expire on June 30, 2039. The 2017 Bonds are secured by a pledge of the Revenues on a parity with the Commission’s Sales Tax Revenue Bonds (Limited Tax Bonds), 2009 Series B and 2009 Series C (collectively, the “2009 Bonds”), Sales Tax Revenue Bonds (Limited Tax Bonds), 2010 Series A (Tax-Exempt) and 2010 Series B (Taxable Build America Bonds) (collectively, the “2010 Bonds”), Sales Tax Revenue Bonds (Limited Tax Bonds), 2013 Series A (the “2013 Bonds”) and Sales Tax Revenue Refunding Bonds (Limited Tax Bonds), 2016 Series A (the “2016 Bonds”), and any Additional Bonds and Parity Obligations issued or incurred under the Indenture (the the 2009 Bonds, the 2010 Bonds, the 2013 Bonds, the 2016 Bonds and any Additional Bonds are collectively referred to herein as the “Bonds”). The Bonds are currently Outstanding in the aggregate principal amount of $756,240,000. The Commission has also executed an interest rate swap, the scheduled payments of which are payable on a parity with the 2009 Bonds. See “SECURITY AND SOURCES OF PAYMENT FOR THE 2017 BONDS – Additional Bonds and Parity Obligations” and “OTHER SALES TAX OBLIGATIONS – Existing Bonds.” NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE COUNTY OF RIVERSIDE, THE STATE OF CALIFORNIA OR ANY POLITICAL SUBDIVISION OR PUBLIC AGENCY THEREOF, OTHER THAN THE COMMISSION TO THE EXTENT OF THE PLEDGE OF THE REVENUES, IS PLEDGED TO THE PAYMENT OF THE 2017 BONDS. No Reserve Fund The Commission is not funding a reserve fund for the 2017 Bonds. No other Outstanding Bonds are secured by a reserve fund. Continuing Disclosure The Commission will covenant for the benefit of the beneficial owners of the 2017 Bonds to provide certain financial information and operating data relating to the Commission and notices of the occurrence of certain enumerated events, if material, to the Municipal Securities Rulemaking Board (the “MSRB”) pursuant to a Continuing Disclosure Agreement (the “Continuing Disclosure Agreement”). These covenants are being made in order to assist the Underwriters of the 2017 Bonds in complying with Rule 15c2-12, as amended (the “Rule”) of the U.S. Securities and Exchange Commission (the “SEC”) promulgated under the Securities Exchange Act of 1934, as amended. See “APPENDIX D – FORM OF CONTINUING DISCLOSURE AGREEMENT.” References The descriptions and summaries of the Indenture and various other documents hereinafter set forth do not purport to be comprehensive or definitive, and reference is made to each such document for the complete details of all terms and conditions. All statements herein are qualified in their entirety by reference to each such document, copies of which are available for inspection at the offices of the Commission. 59 36472210.5 4 THE 2017 BONDS General The 2017 Bonds will mature on June 1 in the years and in the principal amounts shown on the inside cover of this Official Statement. Interest on the 2017 Bonds will be payable on each June 1 and December 1, commencing December 1, 2017, and will be computed on the basis of a 360-day year comprised of twelve 30-day months. Interest on each 2017 Bond will be payable to the registered Holder at such registered Holder’s address as it appears on the Bond Register from the latest of: (i) such 2017 Bond’s Issue Date, (ii) the most recent Interest Payment Date to which interest has been paid thereon or duly provided for, or (iii) if the date of authentication of such 2017 Bond is after a Record Date but prior to the immediately succeeding Interest Payment Date, the Interest Payment Date immediately succeeding such date of authentication. “Record Date” means, with respect to the 2017 Bonds, the fifteenth (15th) day (whether or not a Business Day) of the month preceding the month in which such Interest Payment Date occurs. The 2017 Bonds will be issued as fully registered bonds without coupons in the denominations of $5,000 and any integral multiple thereof. DTC will act as the initial securities depository for the 2017 Bonds, which will be issued initially pursuant to a book-entry only system. See “APPENDIX E – BOOK-ENTRY SYSTEM.” Under the Indenture, the Commission may appoint a successor securities depository to DTC for the 2017 Bonds. The information under this caption, “THE 2017 BONDS,” is subject in its entirety to the provisions described in “APPENDIX E – BOOK-ENTRY SYSTEM” while the 2017 Bonds are in DTC’s book-entry system. Redemption of 2017 Bonds * Optional Redemption. The 2017 Bonds maturing on or after June 1, 20__ shall be subject to redemption prior to their respective stated maturities, at the option of the Commission, from any source of available funds, as a whole or in part, on any date on or after _____ 1, 20__ at the principal amount of 2017 Bonds called for redemption plus accrued interest to the date fixed for redemption, without premium. Sufficient Funds Required for Optional Redemption. Any optional redemption of 2017 Bonds and notice thereof shall be conditional and rescinded and cancelled if for any reason on the date fixed for redemption moneys are not available in the Redemption Fund or otherwise held in trust for such purpose in an amount sufficient to pay in full on said date the principal of, interest, and any premium due on the 2017 Bonds called for redemption. * Preliminary, subject to change. 60 36472210.5 5 Mandatory Redemption. The 2017 Bonds maturing on June 1, 20__ shall be subject to mandatory redemption prior to their respective stated maturities, in part, by lot, from Mandatory Sinking Account Payments on each June 1 that a Mandatory Sinking Account Payment is due as specified in the following table, in the principal amount equal to the Mandatory Sinking Account Payment due on such date and at a redemption price equal to 100% of the principal amount thereof, plus accrued but unpaid interest to the redemption date, without premium. The Mandatory Sinking Account Payments for the 2017 Bonds maturing on June 1, 20__ (the “2017 Series A Term Bonds”) shall be due in the amounts and on the dates as follows: Mandatory Sinking Account Payments Dates (June 1) Mandatory Sinking Account Payments 20__ $ 20__ 20__ 20__ 20__ 20__* Selection of 2017 Bonds for Redemption The Commission shall designate which maturities of any 2017 Bonds are to be called for optional redemption. If less than all 2017 Bonds maturing by their terms on any one date are to be redeemed at any one time, the Trustee shall select the 2017 Bonds of such maturity date to be redeemed in any matter that it deems appropriate and fair and shall promptly notify the Commission in writing of the numbers of the 2017 Bonds so selected for redemption. For purposes of such selection, 2017 Bonds shall be deemed to be composed of multiples of minimum Authorized Denominations and any such multiple may be separately redeemed. “Authorized Denomination” means, with respect to the 2017 Bonds, $5,000 and any integral multiple thereof. In the event of an optional redemption of the 2017 Series A Term Bonds, the Commission shall designate the Mandatory Sinking Account Payments, or portions thereof, in an aggregate amount equal to the principal amount of 2017 Series A Term Bonds so optionally redeemed, that are to be reduced as allocated to such redemption, and such Mandatory Sinking Account Payments shall be reduced accordingly. Notice of Redemption Each notice of redemption is to be mailed by the Trustee not less than 20 nor more than 90 days prior to the redemption date, to DTC and other parties specified in the Indenture. Conveyance of notices and other communications by DTC to DTC Direct Participants, by DTC Direct Participants to DTC Indirect Participants, and by DTC Direct Participants and DTC Indirect Participants to Beneficial Owners of 2017 Bonds will be governed by arrangements among them, and the Commission and the Trustee will not have any responsibility or obligation to send a notice of redemption except to DTC. Failure of DTC to receive any notice of 61 36472210.5 6 redemption or any defect therein will not affect the sufficiency of any proceedings for redemption. Purchase In Lieu of Redemption The Commission reserves the right at all times to purchase any of its 2017 Bonds on the open market. In lieu of mandatory redemption, the Commission may surrender to the Trustee for cancellation 2017 Bonds purchased on the open market, and such 2017 Bonds shall be cancelled by the Trustee. If any 2017 Bonds are so cancelled, the Commission may designate the Mandatory Sinking Account Payments or portions thereof within such Series of the 2017 Series A Bonds so purchased that are to be reduced as a result of such cancellation. PLAN OF FINANCE General The proceeds of the 2017 Bonds will be applied to (i) pay a portion of the costs of the I- 15 Express Lanes Project (as defined herein), (ii) pay a portion of the costs for the Riverside SR- 91 Corridor Improvement Project (as defined herein), (iii) retire all or a portion of the outstanding Notes (as defined herein), and (iv) pay the costs of issuance of the 2017 Bonds. See “ESTIMATED SOURCES AND USES OF PROCEEDS.” I-15 Express Lanes Project The “I-15 Express Lanes Project” will add two tolled express lanes in each direction on I-15 between Cajalco Road and State Route 60 (SR-60), a distance of 14.6 miles. The Commission expects the project to improve existing and future mobility along the I-15 corridor, reduce congestion and improve traffic operations, provide a time-saving travel choice with multiple entry/exit points, expand the tolled express lane network and increase travel time reliability. Drivers will be able to access and exit the tolled facility at multiple locations. See “THE I-15 EXPRESS LANES PROJECT.” The delivery of the 2017 Bonds is conditioned on the prior execution of a TIFIA Loan Agreement (the “TIFIA Loan Agreement”) between the Commission and the United States Department of Transportation, acting by and through the Executive Director of the Build America Bureau (the “TIFIA Lender”), providing for a direct loan under the Transportation Infrastructure Finance and Innovation Act of 1998 (the “TIFIA Loan”) in the approximate principal amount of $_________. The TIFIA Loan is payable from and secured by toll revenues generated by the I-15 Express Lanes Project (“Toll Revenues”), and is not secured by Sales Tax Revenues. The proceeds of the TIFIA Loan will be used, together with a portion of the proceeds of the 2017 Bonds and certain other funds of the Commission as described below, to finance the acquisition and construction of the I-15 Express Lanes Project. See “RIVERSIDE COUNTY TRANSPORTATION COMMISSION—The Transportation Expenditure Plan.” 62 36472210.5 7 Pursuant to the TIFIA Loan Agreement and the Master Indenture between the Commission and U.S. Bank National Association, as trustee (the “Toll Trustee”), providing for the issuance of Senior Lien Obligations, Second Lien Obligations and Subordinate Obligations payable from Toll Revenues (the “Toll Indenture”), the Commission has covenanted to deposit the following amounts (the “Commission Initial Loan”): Fiscal Year (ending June 30) Contribution Amount 2019 $3,000,000 2020 3,000,000 2021 3,000,000 2022 3,000,000 2023 3,000,000 2024 3,000,000 The proceeds of the Commission Initial Loan shall be deposited into the revenue fund applied under the Toll Indenture, or as provided in the Toll Indenture, and will only be requested by the Toll Trustee to the extent Toll Revenues are not sufficient by the last business day of each calendar month preceding June 1 to make the deposits required under the Toll Indenture. Such deposits are expected to be made by the Commission from Sales Tax Revenues of the Commission available for such purpose. Payment of the 2017 Bonds from Sales Tax Revenues is not conditioned upon the construction or operation of the I-15 Express Lanes Project or the payment of the TIFIA Loan or any obligations issued under the Toll Indenture. The Commission further covenants to provide additional unsecured funds after payments due under the Indenture as a conditional backstop if Toll Revenues are insufficient in the Fiscal Years 2025 and 2028 through 2039 in an annual amount not to exceed $3,850,000 in any such year and in the aggregate not to exceed $38,500,000. Such amounts will be requested by the Toll Trustee from the Trustee only upon a certification that there is a deficiency in Toll Revenues necessary to make the deposits required under the Toll Indenture and the amount requested will only be in the amount of such deficiency subject to the limits set forth in the Toll Indenture. Any such amounts will increase the outstanding balance of the Commission Loan on the date of such transfer. Riverside SR-91 Corridor Improvement Project State Route 91 (“SR-91”) is an east-west limited access highway running from Interstate 110 in Los Angeles County at its western end, through Orange County and to the interchange of Interstate 215 and State Route 60 (“SR-60”) in Riverside County on its eastern end. The previous SR-91 cross section generally consisted of four general purpose lanes, varying in width from 11 feet to 12 feet, as well as auxiliary lanes in each direction. In Orange County, two tolled express lanes (“OCTA SR-91 Express Lanes”) are operated in each direction by the Orange County Transportation Authority. The OCTA SR-91 Express Lanes were constructed in the median area of SR-91, beginning west of the SR-91/State Route 55 interchange and terminating 63 36472210.5 8 near the Orange County/Riverside County line. These express lanes previously transitioned into one high occupancy vehicle (“HOV”) lane in each direction in Riverside County. The Riverside SR-91 Corridor Improvement Project (the “Riverside SR-91 Corridor Improvement Project”) connects with the OCTA SR-91 Express Lanes at the Orange County/Riverside County line using a two-mile long mixing area (allowing vehicles to use either or both sections of the tolled lanes) and continue approximately eight miles to the Interstate 15 (“I-15”)/SR-91 interchange in Riverside County, California. The Riverside SR-91 Corridor Improvement Project involved widening pavement on the outside of the existing highway to reposition general purpose lanes and repurposing the existing HOV lane to accommodate two tolled express lanes in the median in each direction. The Riverside SR-91 Corridor Improvement Project also involved constructing one new general purpose lane in each direction from State Route 71 to I-15, ultimately providing two tolled express lanes and five general purpose lanes in each direction. The Riverside SR-91 Corridor Improvement Project also included the restriping of lanes and construction of a two-lane (one lane in each direction) direct tolled connector approximately 2.8 miles in distance providing the SR-91 tolled express lanes with access/egress to I-15 South. This tolled direct connector commences near Grand Avenue on SR-91 and ends on I-15 South near Ontario Avenue in the City of Corona. All of the Commission-sponsored tolled express lanes are referred to herein as the “RCTC SR-91 Express Lanes.” Other Riverside SR-91 Corridor Improvement Project improvements included reconstruction with geometric improvements of five local interchanges; construction of new and widened bridges, retaining walls, sound walls, and aesthetics improvements; addition of a collector-distributor system with braided ramps in the vicinity of the SR-91/I-15 interchange; addition of auxiliary lanes and other operational improvements; restriping of lanes in the eastbound and westbound directions for approximately two miles to the west of the Orange County/Riverside County line; restriping of lanes in the eastbound direction for approximately three miles east of the I-15/SR-91 interchange; and the installation of an electronic toll collection and enforcement system. [Remainder of page intentionally left blank.] 64 36472210.5 9 ESTIMATED SOURCES AND USES OF PROCEEDS The proceeds from the sale of the 2017 Bonds are expected to be applied as follows: Sources of Funds: Principal Amount $ Net Premium/Discount Total Sources: $ Uses of Funds: Transfer to Toll Trustee for deposit into the Project Fund $ Transfer to Notes Trustee Costs of Issuance(1) Total Uses: $ ________________ (1) Includes the Underwriters’ discount, Rating Agency fees, initial fees and expenses of the Trustee, printing costs, fees and expenses of Bond Counsel, Disclosure Counsel and the Municipal Advisor and other miscellaneous costs of issuance. [Remainder of page intentionally left blank.] 65 36472210.5 10 DEBT SERVICE SCHEDULE 2010 Series B Bonds 2017 Bonds Fiscal Year Ending June 30 2009 Bonds(1) 2010 Series A Bonds Principal Interest 2010 Series B Subsidy Payments(2) 2013 Bonds(3) 2016 Bonds Principal Interest Total(4) Annual Net Debt Service(4) 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 Total(5) ________________ (1) Interest on the 2009 Bonds is calculated assuming the interest rates are equal to the fixed rates on the BofA Swap Agreement, without including any remarketing agent or liquidity provider fees and expenses. See “OTHER SALES TAX OBLIGATIONS – BofA Swap Agreement.” (2) Under the Indenture, Subsidy Payments expected to be received from the United States Treasury Department are treated as an offset to Debt Service. See “RISK FACTORS— Reduction in Subsidy Payments.” (3) Interest through and including December 1, 2017 will be paid from amounts deposited into the 2013 Capitalized Interest Fund and interest earnings thereon assumed at 0.__% per annum. (4) Totals presented may not add due to rounding. 66 36472210.5 11 SECURITY AND SOURCES OF PAYMENT FOR THE 2017 BONDS Limited Obligation THE 2017 BONDS ARE LIMITED TAX OBLIGATIONS OF THE COMMISSION PAYABLE SOLELY FROM REVENUES AS DEFINED AND PROVIDED IN THE INDENTURE AND CERTAIN OTHER FUNDS PLEDGED UNDER THE INDENTURE. THE COMMISSION IS NOT OBLIGATED TO PAY THE 2017 BONDS EXCEPT FROM REVENUES AND THOSE CERTAIN OTHER FUNDS PLEDGED UNDER THE INDENTURE. THE 2017 BONDS DO NOT CONSTITUTE A DEBT OR LIABILITY OF THE STATE OR ANY POLITICAL SUBDIVISION OF THE STATE OTHER THAN THE COMMISSION, OR A PLEDGE OF THE FULL FAITH AND CREDIT OF THE STATE OR OF ANY POLITICAL SUBDIVISION OF THE STATE. THE GENERAL FUND OF THE COMMISSION IS NOT LIABLE, AND THE CREDIT OR TAXING POWER (OTHER THAN AS DESCRIBED IN THE INDENTURE) OF THE COMMISSION IS NOT PLEDGED, FOR THE PAYMENT OF THE 2017 BONDS, THEIR INTEREST, OR ANY PREMIUM DUE UPON REDEMPTION OF THE 2017 BONDS. THE 2017 BONDS ARE NOT SECURED BY A LEGAL OR EQUITABLE PLEDGE OF, OR CHARGE, LIEN OR ENCUMBRANCE UPON, ANY OF THE PROPERTY OF THE COMMISSION OR ANY OF ITS INCOME OR RECEIPTS, EXCEPT THE REVENUES AND THE CERTAIN OTHER FUNDS PLEDGED UNDER THE INDENTURE. Pledge of Revenues All Revenues, consisting of Sales Tax Revenues and Swap Revenues, are irrevocably pledged by the Commission to secure the punctual payment of the principal of, premium, if any, and interest on the 2017 Bonds and any additional Series of Bonds issued under the Indenture and all amounts owing on any Parity Obligations in accordance with their terms. The Revenues shall not be used for any other purpose while any of the Bonds or Parity Obligations remain Outstanding, except as permitted by the provisions of the Indenture permitting the application thereof for the purposes and on the terms and conditions set forth therein. Additionally, all amounts (including, as applicable, proceeds of the Bonds) held by the Trustee under the Indenture (except for amounts held in the Rebate Fund, any Letter of Credit Account and any Bond Purchase Fund) are pledged to secure the payment of all amounts owing on the Bonds and Parity Obligations, subject only to the provisions of the Indenture permitting the application thereof for the purposes and on the terms and conditions set forth therein. Pursuant to the Indenture, the pledge of Revenues constitutes a first lien to secure the Bonds and Parity Obligations. The pledge of Revenues shall be irrevocable until all Bonds issued under the Indenture, including the 2017 Bonds, and all Parity Obligations are no longer Outstanding. The Revenues pledged to the payment of the Bonds and Parity Obligations shall be applied without priority or distinction of one over the other and the Sales Tax Revenues shall constitute a trust fund for the security and payment of the Bonds and Parity Obligations; but nevertheless out of Revenues certain amounts may be applied for other purposes as provided in the Indenture. For a detailed description of the Sales Tax and projected receipts of Sales Tax Revenues, see “THE SALES TAX” herein. For a discussion of Swap Revenues, see “OTHER SALES TAX OBLIGATIONS – BofA Swap Agreement” herein. 67 36472210.5 12 Revenue Fund; Allocation of Revenues As long as any Bonds are Outstanding or any Parity Obligations remain unpaid, the Commission has assigned the Sales Tax Revenues to the Trustee and shall cause the Board of Equalization to transmit the same directly to the Trustee. The Sales Tax Revenues shall be received and held in trust by the Trustee for the benefit of the Holders of the Bonds and any Parity Obligations. The Trustee shall forthwith deposit all Sales Tax Revenues in the Revenue Fund, maintained and held in trust by the Trustee, when and as such Sales Tax Revenues are received by the Trustee. See “APPENDIX C – SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE – Allocation of Sales Tax Revenues.” Investment income on amounts held by the Trustee (other than amounts held in the Rebate Fund or for which particular instructions are provided) shall also be deposited in the Revenue Fund. In each month while Bonds remain Outstanding, the Trustee is required to set aside receipts of Sales Tax Revenues in the following respective funds, amounts and order of priority (provided that deficiencies in any previously required deposit shall be made up prior to the deposit to a fund subsequent in priority and further provided that set asides or transfers required with respect to Parity Obligations, including certain regularly scheduled payments pursuant to Interest Rate Swap Agreements that are payable on a parity with the 2017 Bonds, shall be made on a parity basis, as provided in the Indenture): 1. Interest Fund. The Indenture requires the Trustee to make monthly deposits in the Interest Fund in an amount equal to (a) one-sixth of the aggregate half-yearly amount of interest becoming due and payable on Outstanding Current Interest Bonds (other than Bonds constituting Variable Rate Indebtedness) during the ensuing six-month period, plus (b) the aggregate amount of interest to accrue during that month on Outstanding Variable Rate Indebtedness, calculated, if the actual rate of interest is not known, at the interest rate specified in writing by the Commission, or if the Commission has not specified an interest rate in writing, calculated at the maximum interest rate borne by such Variable Rate Indebtedness during the month prior to the month of deposit plus one hundred (100) basis points (provided, however, that the amount of such deposit into the Interest Fund for any month may be reduced by the amount by which the deposit in the prior month exceeded the actual amount of interest accrued and paid during that month on said Outstanding Variable Rate Indebtedness and provided further that the amount of such deposit into the Interest Fund for any month will be increased by the amount by which the deposit in the prior month was less than the actual amount of interest accruing during that month on said Outstanding Variable Rate Indebtedness). No deposit need be made into the Interest Fund if the amount contained therein is at least equal to the interest to become due and payable on the Interest Payment Dates falling within the next six (6) months upon all of the Outstanding Bonds issued under the Indenture, and on June 1 and December 1 of each year any excess amounts in the Interest Fund not needed to pay interest on such date (and not held to pay interest on Bonds having Interest Payment Dates other than June 1 and December 1) will be transferred to the Commission (but excluding, in each case, any moneys on deposit in the Interest Fund from the proceeds of any Series of Bonds or other source and reserved as capitalized interest to pay interest on any future Interest Payment Dates following such Interest Payment Dates). All Swap Revenues received with respect to Interest Rate Swap 68 36472210.5 13 Agreements that are Parity Obligations shall be deposited in the Interest Fund and credited to the above-required deposits, and payments on such Interest Rate Swap Agreements (other than fees and expenses and termination payments) shall be payable from the Interest Fund and the above-required deposits shall be adjusted to include such payments. The Third Supplemental Indenture provides that immediately upon receipt of any Subsidy Payment with respect to the 2010 Series B Bonds, the Trustee shall deposit such amounts into the Interest Fund. In addition, the Fifth Supplemental Indenture provides that amounts on deposit in the 2013 Capitalized Interest Fund shall be transferred to the Interest Fund, on or before the Interest Payment Dates and in the amounts specified therein, to be used solely for paying interest on the 2013 Bonds through December 1, 2017. 2. Principal Fund; Sinking Accounts. The Indenture also requires the Trustee to make monthly deposits in the Principal Fund in an amount equal to at least (a) one-sixth of the aggregate semiannual amount of principal and accreted value, if applicable, becoming due and payable within the next six months on Outstanding Bonds having semiannual maturity dates, plus (b) one-twelfth of the aggregate yearly amount of principal, accreted value, if applicable, becoming due and payable within the next twelve months on Outstanding Bonds having annual maturity dates, plus (c) one-sixth of the aggregate of the Mandatory Sinking Account Payments to be paid during the next six-month period into the respective Sinking Accounts for the Term Bonds of all Series for which Sinking Accounts have been created and for which semiannual mandatory redemption is required from said Sinking Accounts, plus (d) one-twelfth of the aggregate of the Mandatory Sinking Account Payments to be paid during the next 12-month period into the respective Sinking Accounts for the Term Bonds of all Series for which Sinking Accounts have been created and for which annual mandatory redemption is required from such Sinking Accounts; provided that if the Commission certifies to the Trustee that any principal payments are expected to be refunded on or prior to their respective due dates or paid from amounts on deposit in a Bond Reserve Fund that would be in excess of the Bond Reserve Requirement applicable to such Bond Reserve Fund upon such payment, no amounts are required to be set aside toward such principal to be so refunded or paid. All of the aforesaid deposits made in connection with future Mandatory Sinking Account Payments are to be made without priority of any payment into any one such Sinking Account over any other such payment. If the Sales Tax Revenues are not sufficient to make the required deposits so that moneys in the Principal Fund on any principal or mandatory redemption date are equal to the amount of Bond Obligation to become due and payable on the Outstanding Serial Bonds of all Series plus the Bond Obligation amount of and redemption premium on the Outstanding Term Bonds required to be redeemed or paid at maturity on such date, then such moneys will be applied on a Proportionate Basis and in such proportion as said Serial Bonds and said Term Bonds shall bear to each other, after first deducting for such purposes from said Term Bonds any of said Term Bonds required to be redeemed annually which will have been redeemed or purchased during the preceding 12-month period and any of said Term Bonds required to be redeemed semiannually which will have been redeemed or purchased during the six-month period ending on such date or the immediately preceding six month period. In the event that the Sales Tax Revenues will 69 36472210.5 14 not be sufficient to pay in full all Mandatory Sinking Account Payments required to be paid at any one time into all such Sinking Accounts, then payments into all such Sinking Accounts are to be made on a Proportionate Basis, in proportion that the respective Mandatory Sinking Account Payments required to be made into each Sinking Account during the then current 12-month period bear to the aggregate of all of the Mandatory Sinking Account Payments required to be made into all such Sinking Accounts during such 12-month period. No deposit must be made into the Principal Fund as long as such fund holds (i) moneys sufficient to pay the Bond Obligations of all then Outstanding Serial Bonds maturing by their terms within the next twelve (12) months plus (ii) the aggregate of all Mandatory Sinking Account Payments required to be made in such 12-month period, but less any amounts deposited into the Principal Fund during such 12-month period and theretofore paid from the Principal Fund to redeem or purchase Term Bonds during such 12-month period; provided that if the Commission certifies to the Trustee that any principal payments are expected to be refunded on or prior to their respective due dates or paid from amounts on deposit in a Bond Reserve Fund that would be in excess of the Bond Reserve Requirement applicable to such Bond Reserve Fund upon such payment, no amounts need be on deposit with respect to such principal payments. At the beginning of each Fiscal Year and in any event not later than June 1 of each year, the Trustee is required to request from the Commission a Certificate of the Commission setting forth the principal payments for which deposits will not be necessary pursuant to the preceding sentence and the reason therefor. On June 1 of each year or as soon as practicable thereafter any excess amounts in the Principal Fund not needed to pay principal on such date (and not held to pay principal on Bonds having principal payment dates other than June 1) are required to be transferred to the Commission. 3. Bond Reserve Fund. The Indenture also requires the Trustee to make deposits to the Bond Reserve Fund, to the extent required. No such deposits are currently required for any series of Bonds. See “SECURITY AND SOURCES OF PAYMENT FOR THE 2017 BONDS – No Reserve Fund.” 4. Subordinate Obligations Fund. As long as any Subordinate Obligations remain unpaid, any Revenues remaining in the Revenue Fund after the transfers described in (1), (2) and (3) above have been made shall be transferred to the trustee (the “Notes Trustee”) for the Commission’s Commercial Paper Notes (Limited Tax Bonds), Series A and Series B. After the Notes Trustee has made the required deposit of Revenues under the Subordinate Indenture, the Notes Trustee shall transfer any remaining Revenues back to the Trustee. There are currently $20,000,000 of Notes outstanding. 5. Fees and Expenses Fund. At the direction of the Commission, after the transfers described in (1), (2), (3) and (4) above have been made, the Trustee is required to deposit as soon as practicable in each month in the Fees and Expenses Fund (i) amounts necessary for payment of fees, expenses and similar charges (including fees, expenses and similar charges relating to any Liquidity Facility or Credit Enhancement for the Bonds or any Parity Obligations) owing in such month or the following month by the 70 36472210.5 15 Commission in connection with the Bonds or any Parity Obligations and (ii) amounts necessary for payment of fees, expenses and similar charges owing in such month or the following month by the Commission in connection with Subordinate Obligations. The Commission shall inform the Trustee of such amounts, in writing, on or prior to the first Business Day of each month. Any Revenues remaining in the Revenue Fund after the foregoing transfers described in (1), (2), (3), (4) and (5) above, except as the Commission shall otherwise direct in writing or as is otherwise provided in a supplemental indenture, shall be transferred to the Commission on the same Business Day or as soon as practicable thereafter. The Commission may use and apply the Revenues when received by it for any lawful purpose of the Commission, including the redemption of Bonds upon the terms and conditions set forth in the supplemental indenture relating to such Bonds and the purchase of Bonds as and when and at such prices as it may determine. If, five (5) days prior to any principal payment date, Interest Payment Date or mandatory redemption date, the amounts on deposit in the Revenue Fund, the Interest Fund, the Principal Fund, including the Sinking Accounts therein, and, as and to the extent not required to satisfy the Bond Reserve Requirement, any Bond Reserve Fund established in connection with the 2017 Bonds with respect to the payments to be made on such upcoming date are insufficient to make such payments, the Trustee shall immediately notify the Commission, in writing, of such deficiency and direct that the Commission transfer the amount of such deficiency to the Trustee on or prior to such payment date. The Commission has covenanted and agreed to transfer to the Trustee from any Revenues in its possession the amount of such deficiency on or prior to the principal, interest or mandatory redemption date referenced in such notice. See “APPENDIX C – SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE – Definitions” and “– Allocation of Sales Tax Revenues” for a more complete discussion. No Reserve Fund The Commission is not funding a reserve fund for the 2017 Bonds. No other Outstanding Bonds are secured by a reserve fund. Additional Bonds and Parity Obligations The Commission currently has $756,240,000 in aggregate principal amount of its Bonds Outstanding, payable from Sales Tax Revenues on a parity with the 2017 Bonds. See “OTHER SALES TAX OBLIGATIONS – Existing Bonds.” Under the Indenture, the Commission may issue other obligations payable in whole or in part from Sales Tax Revenues, subject to the limitations of the Act and to the terms and conditions contained in the Indenture. Issuance of Additional Series of Bonds. The Commission may by Supplemental Indenture establish one or more additional Series of Bonds payable from Sales Tax Revenues and secured by the pledge made under the Indenture equally and ratably with the 2017 Bonds, but only upon compliance by the Commission with the provisions of the Indenture, including the conditions that: 71 36472210.5 16 (1) No Event of Default shall have occurred and then be continuing. (2) The aggregate principal amount of Bonds issued pursuant to the Indenture may not exceed any limitation imposed by the Act. (3) If so required in the Supplemental Indenture providing for the issuance of such Series, either (i) a Bond Reserve Fund shall be established to provide additional security for such Series of Bonds or (ii) the balance in an existing Bond Reserve Fund, forthwith upon the receipt of the proceeds of the sale of Bonds of such Series shall be increased, if necessary, to an amount at least equal to the Bond Reserve Requirement with respect to all Bonds to be considered Outstanding upon the issuance of Bonds of such Series. Said deposit may be made from the proceeds of the sale of Bonds of such Series or from other funds of the Commission or from both such sources or may be made in the form of a Reserve Facility. (4) The Commission shall place on file with the Trustee a Certificate of the Commission certifying that the amount of Sales Tax Revenues collected during the Fiscal Year for which audited financial statements are available preceding the date on which such additional Series of Bonds will become Outstanding shall have been at least equal to 1.5 times Maximum Annual Debt Service on all Series of Bonds and Parity Obligations then Outstanding and the additional Series of Bonds then proposed to be issued, which Certificate shall also set forth the computations upon which such Certificate is based. For purposes of determining Debt Service, interest on the 2010 Series B Bonds will be calculated net of the Subsidy Payments. See “APPENDIX C – SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE – Definitions.” Nothing in the Indenture shall prevent or be construed to prevent the Supplemental Indenture providing for the issuance of an additional Series of Bonds from pledging or otherwise providing, in addition to the security given or intended to be given by the Indenture, additional security for the benefit of such additional Series of Bonds or any portion thereof. Issuance of Refunding Bonds. Refunding Bonds may be authorized and issued by the Commission without compliance with the provisions of the Indenture described above under (4) “Issuance of Additional Series of Bonds” and other terms of the Indenture; provided, that Maximum Annual Debt Service on all Bonds and Parity Obligations Outstanding following the issuance of such Refunding Bonds is less than or equal to Maximum Annual Debt Service on all Bonds and Parity Obligations Outstanding prior to the issuance of such Refunding Bonds, or (ii) that the Commission expects a reduction in Debt Service on all Bonds Outstanding and all Parity Obligations outstanding to result from the refunding to be effected with the proceeds of such Refunding Bonds. Issuance of Parity Obligations. The Commission may also issue Parity Obligations which will have, when issued, an equal lien and charge upon the Sales Tax Revenues, provided that the conditions to the issuance of such Parity Obligations set forth in the Indenture are satisfied, including satisfaction of the coverage test described in subsection (4) above under the caption “Issuance of Additional Series of Bonds” (unless such Parity Obligations are being issued for refunding purposes, in which case the coverage test shall not apply). 72 36472210.5 17 As defined in the Indenture, “Parity Obligations” means any indebtedness, installment sale obligation, lease obligation or other obligation of the Commission for borrowed money, the BofA Swap Agreement or any other Interest Rate Swap Agreement (excluding fees and expenses and termination payments on Interest Rate Swap Agreements) entered into in connection with a Series of Bonds, in each case incurred in accordance with the provisions of the Indenture and having an equal lien and charge upon the Sales Tax Revenues and therefore being payable on a parity with the Bonds (whether or not any Bonds are Outstanding). The Commission’s obligation to make regularly scheduled payments under the BofA Swap Agreement (as defined below) constitutes a Parity Obligation under the Indenture. The Ordinance, as amended, limits the amount of the Commission’s bonds secured by Sales Tax Revenues to a maximum aggregate principal amount of $975 million at any one time outstanding. See “OTHER SALES TAX OBLIGATIONS – Limitation on Outstanding Sales Tax Obligations.” OTHER SALES TAX OBLIGATIONS Existing Bonds On September 28, 2016, the Commission issued $76,140,000 in original aggregate principal amount of its Sales Tax Revenue Refunding Bonds (Limited Tax Bonds) 2016 Series A (the “2016 Refunding Bonds), which are currently outstanding in the aggregate principal amount of $73,240,000. The 2016 Refunding Bonds mature, subject to optional redemption prior thereto, on June 1, 2029. On July 3, 2013, the Commission issued $462,200,000 in original aggregate principal amount of its Sales Tax Revenue Bonds (Limited Tax Bonds) 2013 Series A, which are currently outstanding in the aggregate principal amount of $462,200,000. The 2013 Bonds mature, subject to optional and mandatory sinking fund redemption prior thereto, on June 1, 2039. On November 30, 2010, the Commission issued $37,630,000 in original aggregate principal amount of its Sales Tax Revenue Bonds (Limited Tax Bonds) 2010 Series A (Tax- Exempt) (the “2010 Series A Bonds”) and $112,370,000 in original aggregate principal amount of its Sales Tax Revenue Bonds (Limited Tax Bonds) 2010 Series B (Taxable Build America Bonds) (the “2010 Series B Bonds” and, together with the 2010 Series A Bonds, the “2010 Bonds”) , which are currently outstanding in the aggregate principal amount of $150,000,000. The 2010 Series A Bonds consist of 5.00% Term Bonds maturing on June 1, 2032, and the 2010 Series B Bonds consist of 6.807% Term Bonds maturing on June 1, 2039, subject in each case to mandatory redemption from Mandatory Sinking Account Payments. The 2010 Series B Bonds have been designated by the Commission as “Build America Bonds” that are “qualified bonds” under the American Recovery and Reinvestment Act of 2009 (the “Stimulus Act”). The Trustee is to receive on the Commission’s behalf cash subsidy payments from the United States Treasury (“Subsidy Payments”) equal to 35% of the interest payable on the 2010 Series B Bonds, or 45% of the interest payable on such 2010 Series B Bonds that have been additionally designated as “Recovery Zone Economic Development Bonds.” On March 1, 2013, the federal government announced the implementation of certain 73 36472210.5 18 automatic spending cuts known as the sequester. As a result of the sequester, Subsidy Payments for the 2010 Series B Bonds will be reduced by 6.9% (or approximately $205,800) for the federal fiscal year ending September 30, 2017 unless Congressional action changes the reduction percentage. See “RISK FACTORS – Reduction in Subsidy Payments.” The Commission is obligated to make all payments of Debt Service on the 2010 Series B Bonds from Revenues regardless of whether it receives the full amount of the Subsidy Payments. The Commission does not believe that the reduction in Subsidy Payments due to the sequester will have a material adverse effect on the Commission’s ability to pay Debt Service on the 2010 Series B Bonds or any other Bonds. On October 1, 2009, the Commission issued $185,000,000 in original aggregate principal amount of its Sales Tax Revenue Bonds (Limited Tax Bonds) 2009 Series A, 2009 Series B and 2009 Series C (collectively, the “2009 Bonds”), which are currently outstanding in the aggregate principal amount of $70,800,000. The Commission’s Sales Tax Revenue Bonds (Limited Tax Bonds) 2009 Series A (the “2009 Series A Bonds”) were refunded in full with a portion of the proceeds of the 2016 Bonds. The 2009 Bonds mature, subject to mandatory sinking fund redemption prior thereto, on June 1, 2029 and are variable rate obligations currently bearing interest at a weekly rate. To hedge its variable rate exposure on the 2009 Bonds, the Commission entered into an interest rate swap agreements, as described further in “BofA Swap Agreement” below. The 2009 Bonds are currently subject to optional tender by the holders thereof. The payment of the purchase price of tendered 2009 Bonds is payable from the proceeds of remarketing the 2009 Bonds and, to the extent remarketing proceeds are insufficient therefor, from amounts available from Standby Bond Purchase Agreements relating to each remaining series of the 2009 Bonds (each, a “2009 Bonds Liquidity Facility”), between the Commission and The Bank of Tokyo-Mitsubishi UFJ, Ltd., acting through its New York Branch (the “2009 Bonds Liquidity Provider”), or from any Alternate Liquidity Facility that may be obtained by the Commission in the future. Each 2009 Bonds Liquidity Facility expires on March 15, 2019, unless extended by the parties thereto. The obligation of the Commission to reimburse the 2009 Bonds Liquidity Provider and to make any other payments under a 2009 Bonds Liquidity Facility is secured by a pledge of Sales Tax Revenues on a parity with the pledge securing the Bonds, including the 2017 Bonds. Under certain circumstances, 2009 Bonds purchased by the 2009 Bonds Liquidity Provider and not remarketed may become Liquidity Facility Bonds. Such Liquidity Facility Bonds shall bear interest as provided in the relevant 2009 Bonds Liquidity Facility and may be subject to mandatory prepayment upon the occurrence of certain events of default described in such 2009 Bonds Liquidity Facility. BofA Swap Agreement The Commission entered into an ISDA Master Agreement, dated as of August 22, 2006, with Bank of America, N.A. (“BofA”), as supplemented by the Schedule, dated as of August 22, 2006 and the confirmation of a transaction, dated August 22, 2006, with an initial notional amount of $100,000,000 (collectively, the “BofA Swap Agreement”) and an interest rate swap agreement with Deutsche Bank AG, acting through its New York Branch (the “DBAG Swap Agreement”) with an initial notional amount of $85,000,000 to hedge its variable rate exposure on the 2009 Bonds. On September 28, 2016, the Commission negotiated the termination of the 74 36472210.5 19 DBAG Swap Agreement in conjunction with the refunding of the 2009 Series A Bonds. The BofA Swap Agreement has an effective date of October 1, 2009 and expires on June 1, 2029. The Commission’s obligation to make regularly scheduled payments to BofA under the BofA Swap Agreement is secured by Sales Tax Revenues on a parity basis with the Commission’s obligation to pay principal of and interest on the Bonds, including the 2017 Bonds, and therefore such obligation constitutes a Parity Obligation under the Indenture. The BofA Swap Agreement currently is outstanding in the notional amount of $70,800,000, subject to amortization as set forth therein, which corresponds to the combined amortization of the 2009 Series B Bonds and 2009 Series C Bonds. Pursuant to this agreement, BofA has agreed to pay the Commission a floating rate equal to 67% of USDLIBOR (One Month) and the Commission has agreed to pay BofA a fixed rate equal to 3.679%. The BofA Swap Agreement is subject to early termination in the event that the unenhanced ratings on the Bonds issued by Moody’s Investors Service (“Moody’s”) and Standard & Poor’s Rating Services (“S&P”) fall below investment grade or are withdrawn or suspended; a reduction in the long- term unsubordinated ratings of BofA below investment grade can also result in an early termination of the BofA Swap Agreement. The Commission has the option of terminating the BofA Swap Agreement upon two Business Days’ notice provided it has sufficient funds to pay any early termination amount. As of March 31, 2017, if the Commission terminated the BofA Swap Agreement, it would owe BofA a termination payment in the amount of approximately $10.5 million. The Commission is not required to post collateral with respect to its obligations under the BofA Swap Agreement. If there is an early termination of the BofA Swap Agreement, a termination payment is payable by either the Commission or the swap counterparty depending on the then current market value of the agreement. Any such termination payment payable by the Commission with respect to the BofA Swap Agreement could be substantial. Any early termination payments are payable from Sales Tax Revenues on a basis subordinate to the Bonds (including the 2017 Bonds), Parity Obligations and payments of principal of and interest on Subordinate Obligations. Subordinate Obligations The Commission may issue obligations (“Subordinate Obligations”) payable out of Sales Tax Revenues on a basis subordinate to the payment of the principal, premium, interest and reserve fund requirements for the Bonds and all Parity Obligations, as the same become due and payable. The Commission’s obligation to make early termination payments under the BofA Swap Agreement is secured by a pledge of the Sales Tax Revenues subordinate to the pledge in favor of the 2017 Bonds, Parity Obligations and payment of principal of and interest on Subordinate Obligations. The Commission's Sales Tax Revenue Commercial Paper Notes (Limited Tax Bonds) (the “Notes”) and the credit agreement supporting the Notes constitute Subordinate Obligations under the Indenture. There are currently $20,000,000 of Notes outstanding. The program was initially established at a maximum of $185,000,000 in principal amount and has been reduced to a maximum of $60,000,000 in principal amount. The Commission intends to retire $20,000,000 in principal amount of the Notes currently outstanding with a portion of the proceeds from the 75 36472210.5 20 2017 Bonds. See “PLAN OF FINANCE” and “ESTIMATED SOURCES AND USES OF PROCEEDS.” The principal of and interest on any Notes are payable from draws under an irrevocable, direct-pay letter of credit (the “CP Letter of Credit”) issued by State Street Bank and Trust Company (the “CP Bank”). The stated amount of the Letter of Credit is $60,750,000. The CP Letter of Credit expires in October 2017, unless terminated earlier as provided in the related reimbursement agreement. The Commission’s obligation to reimburse the CP Bank for draws under the CP Letter of Credit to pay the principal of and interest on the Notes is secured by a pledge of Sales Tax Revenues subordinate to the pledge in favor of the holders of the Bonds, including the 2017 Bonds, and on parity with the obligation to pay Note holders. If the Commission is unable to extend or replace the CP Letter of Credit by its expiration date, the Commission may refund any related Notes and any related reimbursement obligations due to the CP Bank with the proceeds of an additional Series of Bonds, in accordance with the requirements of the Indenture. See “SECURITY AND SOURCES OF PAYMENT FOR THE 2017 BONDS – Additional Bonds and Parity Obligations” herein. Limitation on Outstanding Sales Tax Obligations Under the Ordinance, as amended, the Commission has the power to sell or issue, from time to time, bonds or other evidence of indebtedness, including but not limited to capital appreciation bonds, secured solely by Sales Tax Revenues, in the aggregate principal amount at any one time outstanding of not to exceed $975 million. A ballot measure increasing the limitation from its original $500 million amount to $975 million was approved by a majority of those voting at a special election held in the County on November 2, 2010. Additional ballot measures increasing the limitation are possible in the future. See “SECURITY AND SOURCES OF PAYMENT FOR THE 2017 BONDS – Additional Bonds and Parity Obligations” herein. THE SALES TAX General The Act, among other things, authorizes the Commission to develop a countywide consensus on a proposed transaction expenditure plan to be submitted to the voters as part of an ordinance imposing a retail transactions and use tax in the County in accordance with the provisions of the California Transactions and Use Tax Law (Revenue and Taxation Code Section 7251, et seq.). In accordance with the Act, on November 5, 2002, more than two-thirds of the voters of the County voting on the measure approved Measure “A,” which authorized the imposition of the Sales Tax in the County. The Sales Tax commenced on July 1, 2009 and will be collected for a thirty-year period ending on June 30, 2039. The Sales Tax consists of a one- half of one percent (1/2%) sales tax on the gross receipts of retailers from the sale of tangible personal property sold in the County and a use tax at the same rate upon the storage, use or other consumption in the County of such property purchased from any retailer for storage, use or other consumption in the County, subject to certain limited exceptions described below. See “RIVERSIDE COUNTY TRANSPORTATION COMMISSION – The Transportation Expenditure Plan” herein. 76 36472210.5 21 The one-half of one percent sales tax imposed in the County for transportation purposes and administered by the Commission, is in addition to the sales tax levied statewide by the State of California (the “State”) and certain other sales taxes imposed by cities and local agencies within the County. Proposition 30, approved by the voters of the State in the November 2012 election, increased the statewide sales tax by one-quarter of one percent, from 7.25% to 7.5%, for a period of four years from January 1, 2013 to but excluding January 1, 2017. Thus, the State sales tax is currently 7.25%. In general, the statewide sales tax applies to the gross receipts of retailers from the sale of tangible personal property. The statewide use tax is imposed on the storage, use or other consumption in the state of property purchased from a retailer for such storage, use or other consumption. Since the use tax does not apply to cases where the sale of the property is subject to the sales tax, the application of the use tax generally is to purchases made outside of the State for use within the State. The Sales Tax generally is imposed upon the same transactions and items subject to the sales and use tax levied statewide by the State (hereinafter collectively referred to as the “State Sales Tax”), with generally the same exceptions. Many categories of transactions are exempt from the State Sales Tax and the Sales Tax. The most important of these exemptions are: sales of food products for home consumption, prescription medicine, edible livestock and their feed, seed and fertilizer used in raising food for human consumption, and gas, electricity and water when delivered to consumers through mains, lines and pipes. In addition, “Occasional Sales” (i.e., sales of property not held or used by a seller in the course of activities for which he or she is required to hold a seller’s permit) are generally exempt from the State Sales Tax and from the Sales Tax; however, the “Occasional Sales” exemption does not apply to the sale of an entire business and other sales of machinery and equipment used in a business. Sales of property to be used outside the county which are shipped to a point outside the county, pursuant to the contract of sale, by delivery to such point by the retailer, or by delivery by the retailer to a carrier for shipment to a consignee, at such point, are exempt from the State Sales Tax and from the Sales Tax. Action by the State Legislature or by voter initiative or judicial decisions interpreting State law could change the transactions and items upon which the State Sales Tax and the Sales Tax are imposed. Such changes or amendments could have either an adverse or beneficial effect on Sales Tax Revenues. The Commission is not currently aware of any proposed legislative change which would have a material adverse effect on Sales Tax Revenues. See also “RISK FACTORS – Proposition 218” herein. Collection of Sales Tax Revenues Collection of the Sales Tax is administered by the Board of Equalization. The Commission and the Board of Equalization have entered into an agreement for state administration of district transactions and use taxes to authorize payment of Sales Tax Revenues directly to the Trustee. The Board of Equalization, after deducting amounts payable to itself, is required to remit the balance of amounts received from the Sales Tax directly to the Trustee. The Trustee is required to apply the Sales Tax Revenues to make deposits to the funds and accounts established under the Indenture and to transfer the remaining amounts to U.S. Bank National Association, as issuing and paying agent for the Notes (the “Issuing and Paying Agent”). See “SECURITY AND SOURCES OF PAYMENT FOR THE 2017 BONDS” herein. 77 36472210.5 22 The remaining unapplied Sales Tax Revenues, if any, are applied to pay fees, expenses and similar charges relating to any Liquidity Facility or Credit Enhancement, or otherwise owing in connection with the Bonds or Parity Obligations, and thereafter are transferred to the Commission for use for any purpose contemplated by the Ordinance. The fee that the Board of Equalization is authorized to charge for collection of the Sales Tax is determined by State legislation. The Board of Equalization fee for collection of the Sales Tax for Fiscal Year 2016-17 is estimated to be $2,017,780. Historical Sales Tax Revenues The following table sets forth net Sales Tax Revenues for the Fiscal Years indicated below. RIVERSIDE COUNTY TRANSPORTATION COMMISSION HISTORICAL SALES TAX REVENUES Fiscal Year Ended June 30 Net Sales Tax Revenues(1) Percent Change From Prior Fiscal Year 2007 $154,539,723 - 2008 142,537,548 (7.77) 2009 119,688,289 (16.03) 2010 114,526,254 (4.31) 2011 123,439,833 7.78 2012 134,984,307 9.35 2013 149,428,124 10.70 2014 156,355,894 4.64 2015 163,092,776 4.31 2016 167,630,239 2.78 ________________ (1) Net of Board of Equalization administrative fee. Source: The Commission. Sales Tax receipts for the first ten months of the Fiscal Year ending June 30, 2017 were $141,104,206. The Commission is unable to predict if annual Sales Tax Revenues will continue to increase. For a summary of historical taxable retail sales within the County, see the table entitled “County of Riverside, Taxable Sales Transactions” in “APPENDIX B – COUNTY OF RIVERSIDE DEMOGRAPHIC AND ECONOMIC INFORMATION.” 78 36472210.5 23 The following table sets forth the Maximum Annual Debt Service coverage on the Bonds (including the 2017 Bonds) based on Sales Tax Revenues for the Fiscal Year ended June 30, 2016. Sales Tax Revenues Fiscal Year Ended June 30, 2016 Maximum Annual Debt Service on all Bonds(1) Coverage Ratio $167,630,239 $____ _(2) ___(2) ________________ (1) Interest on variable rate debt is calculated assuming the interest rates are equal to the fixed rates on the BofA Swap Agreement, without including any remarketing agent or liquidity provider fees and expenses. The Subsidy Payments relating to the Series 2010 Bonds are treated as an offset to Debt Service and the Maximum Annual Debt Service presented in the table above is reduced by the Subsidy Payments. Maximum Annual Debt Service is projected to occur in _____, 20__. See “DEBT SERVICE SCHEDULE” and “RISK FACTORS – Reduction in Subsidy Payments” herein. (2) Includes debt service on 2017 Bonds. Source: The Commission and Fieldman, Rolapp & Associates. RIVERSIDE COUNTY TRANSPORTATION COMMISSION General The Commission is charged with a number of important responsibilities in serving the residents of the County. Administering the sales tax program, which has raised more than $1 billion, has been by far the most prominent of these responsibilities. The Commission, which has the responsibility of placing future transportation ballot measures before the public, was successful in November 2002 in obtaining more than two-thirds voter approval of the Sales Tax. In addition to the Commission’s Measure A responsibilities, the Commission has also been designated as the congestion management agency (the “CMA”) for the County. As the CMA, the Commission has developed a congestion management program that more effectively utilizes transportation funds by linking land use, transportation and air quality efforts. The Commission serves as the Service Authority for Freeway Emergencies and operates the freeway service patrol (the “FSP”) for the County. The results of these programs – 597 call boxes along the County roadways and 21 FSP tow trucks providing assistance to more than 43,000 motorists annually – are among the most visible of the Commission’s programs. In 1998, the State Legislature gave new authority to the Commission by changing the way funding is distributed from the State Transportation Improvement Program, which is funded through state and federal gas taxes. In simple terms, counties no longer apply to the State for funding their most urgent transportation needs. Instead, State transportation dollars are given directly as an entitlement, leaving the decision making about transportation spending up to the designated county transportation commission like the Commission. While this gives the Commission greater control over how transportation dollars are spent, it also requires a much higher level of local communication and participation to determine how these dollars are spent throughout a county with many transportation needs. The Commission has the responsibility to 79 36472210.5 24 program funds received under the California Transportation Development Act, a statewide source of funding for transit purposes, primarily to the County’s major public transit providers, although the Commission has no responsibility to provide transit services. To enhance County-wide participation and improve its decision-making, the Commission made a major change in its structure in 1999 by expanding the Board from eight members to 30. The Board expanded in 2008, 2010 and 2011 with the addition of four members in total representing newly incorporated cities. The current Board now has 34 members. The expanded Commission ensures better representation throughout the County and provides the participatory framework for continued success in carrying out these responsibilities. State Route 91 Payment of the 2017 Bonds from Sales Tax Revenues is not conditioned upon the construction or operation of the Riverside SR-91 Corridor Improvement Project or the payment of the Commission’s Toll Revenue Senior Lien Bonds, 2013 Series A and 2013 Series B (together, the “2013 Toll Revenue Bonds”) issued in connection with the Riverside SR-91 Corridor Improvement Project. See, however, “RISK FACTORS – Financial and Operating Risks of the Riverside SR-91 Corridor Improvement Project and the I-15 Express Lanes Project.” The Transportation Expenditure Plan On November 5, 2002, 69.2% of the voters of the County approved Measure “A” – The Riverside County Transportation Commission Transportation Expenditure Plan (the “Expenditure Plan”) and Retail Transaction and Use Tax Ordinance (the “Ordinance”) which expressed the following concerns in its preamble: “The transportation system in Riverside County is rapidly deteriorating and our population and economy are growing rapidly. Maintenance and repairs of existing roadways and improvements to relieve congestion cannot be accomplished with available funds. Without additional funds, the system will bog down and pavement will crumble into permanent disrepair…. Local governments must either generate revenues to expand our system and maintain our investments or watch the system collapse and endanger the health, welfare and safety of all Riverside County residents.” The goals of the Expenditure Plan are as follows: (1) Maintain and improve the quality of life in Riverside County by supplementing existing funds for transportation; (2) provide for accountability in the expenditure of taxpayer funds; (3) provide for equity in the distribution of Measure “A” Revenues; and (4) provide for local control of the Transportation Improvement Program. To address the concerns as expressed in the preamble, and to accomplish its goals and policies, the Ordinance provided that sales tax revenues be distributed to the specific geographic 80 36472210.5 25 areas of Riverside County (i.e., Western County, Coachella Valley, and Palo Verde Valley) based on their proportionate share of revenues generated in the County, and that funds (including proceeds of bonds secured by such sales tax revenues) be allocated for highway and regional arterial projects, local streets and roads, transit and commuter rail, new corridors and economic development. In the Western County, $370 million is to be used for new corridor projects, $1.020 billion for highway projects, $300 million for regional arterial projects, $390 million for public transit, $970 million for local street and road improvements, $270 million for bond financing costs, and the remaining $40 million for economic development projects. In the Coachella Valley, fifty percent is to be earmarked for its highway and regional arterial system, thirty-five percent for local streets and roads, and the remaining fifteen percent for transit. All Palo Verde Valley funds are designated for the maintenance of local streets and roads. Commissioners Section 130053 of the California Public Utilities Code specifies that the Commission consists of five members of the Riverside County Board of Supervisors, one member from each incorporated city in Riverside County (each of whom must be a mayor or member of the City Council) and one non-voting member appointed by the governor of the State of California. The role of the Commission is to act as a policy-making board for Riverside County transportation activities. Executive Staff The Commission’s key staff members, the position held by each and a brief statement of the background of each staff member are set forth below. Anne Mayer, Executive Director. Anne Mayer was appointed in October 2007 as the Executive Director of the Commission. She is responsible for overall management of the Commission including execution of operational policies and procedures and all personnel decisions. Ms. Mayer joined the Commission in May 2005 as Deputy Executive Director. Prior to joining the Commission, she was the District 8 Director for the California Department of Transportation (“Caltrans”). As District Director, she was responsible for management of the State highway system in San Bernardino and Riverside counties. Ms. Mayer is a Professional Engineer in the State of California with over 30 years of experience in the public works field, working at Caltrans for 14 of those years. Ms. Mayer holds a civil engineering degree from Michigan State University. John Standiford, Deputy Executive Director. In January 2008, John Standiford was appointed as Deputy Executive Director for the Commission. He joined the Commission in 1999 and was the Public Affairs Director prior to his current appointment. Mr. Standiford also served as the Manager of Government and Media Relations for the Orange County Transportation Authority, where he worked for more than seven years. Earlier in his career, Mr. Standiford worked for three state legislators from the Los Angeles area. He received his bachelor and masters degrees from the University of California, Irvine. Theresia Trevino, Chief Financial Officer. Ms. Trevino joined the Commission as the Chief Financial Officer in January 2004. Ms. Trevino previously worked as Manager of 81 36472210.5 26 Accounting and Financial Reporting for the Orange County Transportation Authority. She also served as an adjunct professor for governmental accounting and reporting at the University of Redlands. Ms. Trevino’s 19-year public accounting career included 16 years with Ernst & Young LLP. As Senior Manager in its Assurance and Advisory Business Services practice serving government clients, she led the development of the Southern California practice and served as a national technical resource. She is a Certified Public Accountant in California and completed the Executive Management Program at the University of California, Riverside. Ms. Trevino received a bachelor of science degree in accounting from Loyola Marymount University with Magna Cum Laude Honors. Cash and Investments As of March 31, 2017 (based on unaudited financial information), the Commission had approximately $715.8 million, at book value, in cash and investments. Such cash and investments were comprised of non-discretionary trust accounts (including commercial paper proceeds and debt service principal and interest funds) of approximately $138.0 million and discretionary (operating) accounts of approximately $577.8 million. The non-discretionary trust accounts are primarily invested in specific debt securities and money market mutual funds. Approximately $106.8 million represents the 2013 Toll Revenue Bonds and 2013 Bond proceeds that secure the 2013 Toll Revenue Bonds and are not available as security for the 2017 Bonds. The discretionary accounts were invested, as of March 31, 2017, as follows: Cash and Investments Percentage of Total Book Value as of March 31, 2017 Riverside County Pooled Investment Fund 85.9% Local Agency Investment Fund 0.6 Operations Pooled Investments (in debt securities) 8.8 Bank deposits 4.7 Total 100.0% Additional information regarding the Commission’s cash and investments is included in “Note 1. Summary of Significant Accounting Policies — Cash and Investments” and “Note 2. Cash and Investments” in the Notes to Financial Statements in “APPENDIX A — COMMISSION AUDITED FINANCIAL STATEMENTS FOR FISCAL YEAR ENDED JUNE 30, 2016.” Debt Management Policy The Commission’s Board has adopted a Debt Management Policy with periodic revisions with the most recent revision approved by the Board on September 14, 2016. Since its initial adoption by the Board, the Debt Management Policy has stated that one of the Commission’s main objectives in the sale of debt payable from Sales Tax Revenues is to maintain a 2.0x debt service coverage ratio. The Debt Management Policy is always subject to further revision by majority action of the Commissioners. 82 36472210.5 27 THE I-15 EXPRESS LANES PROJECT Interstate 15 (I-15) is an interstate goods-movement corridor that links Southern California to the counties east of Los Angeles and to Las Vegas, the Rocky Mountain States, and Canada. It is a major truck route included in the National Network for Federal Surface Transportation Assistance Act of 1982 for oversize trucks. The “I-15 Express Lanes Project” will add two tolled express lanes in each direction on I- 15 between Cajalco Road and SR-60, a distance of 14.6 miles. The primary purpose of the I-15 Express Lanes Project is to improve congested traffic operations, considering current and future (2040) travel demand, on the I-15 corridor between Cajalco Road and the I-15/State Route 60 (SR-60) Interchange just south of the San Bernardino County line. Additional project elements include the construction of a series of soundwalls along the project corridor as well as bridge widenings to accommodate the new tolled express lanes. All proposed improvements are to be constructed within the Caltrans right-of-way, with the majority of the improvements occurring within the existing I-15 median. The Commission awarded a design-build contract for the I-15 Express Lanes Project in April 2017 and expects for construction to commence in 2018. The tolled express lanes are expected to be open in mid-2020. RISK FACTORS Economic Conditions The amount of Sales Tax Revenues collected at any time is directly dependent upon the level of retail sales within the County. During the latter part of 2007 through 2010 the economy of the County was in a recession, as evidenced by a high unemployment rate, a decrease in total personal income and taxable sales, a drop in residential and commercial building permits, a decline in the rate of home sales and the median price of single-family homes and condominiums, an increase in notices of default on mortgage loans secured by homes and condominiums and an increase in foreclosures resulting from such defaults. No assurance can be provided that a future recession or economic decline will not adversely impact the level of retail sales within the County and therefore the amount of Sales Tax Revenues available to the Commission. For information relating to economic conditions within the County and the State, see “APPENDIX B – COUNTY OF RIVERSIDE DEMOGRAPHIC AND ECONOMIC INFORMATION.” Investments The Commission has significant holdings in the Riverside County Investment Pool, which contains a broad range of investments. Market fluctuations have affected and will continue to affect the value of those investments and those fluctuations may be and historically have been material. Recent market disruptions have exacerbated the market fluctuations, but as a result of stable investments in government securities, the Commission’s portfolio has not suffered any major losses with respect to the principal amount of funds invested. The Commission has experienced a reduction in interest income on such investments as a result of current market 83 36472210.5 28 conditions. See “RIVERSIDE COUNTY TRANSPORTATION COMMISSION – Cash and Investments.” Parity with Liquidity Facility Bonds The Indenture does not provide the remedy of acceleration of any Bonds, including the 2017 Bonds, in the event of a default in the payment of principal of and interest on the Bonds when due; provided, however, that if any 2009 Bonds become Liquidity Facility Bonds, such Liquidity Facility Bonds are subject to mandatory prepayment as set forth in the related 2009 Bonds Liquidity Facility. Each 2009 Bonds Liquidity Facility generally provides that Liquidity Facility Bonds unable to be remarketed are subject to redemption in six equal semi-annual installments commencing 180 days following the earlier of (i) the related purchase date or (ii) the expiration date of the applicable 2009 Bonds Liquidity Facility. See “OTHER SALES TAX OBLIGATIONS – Existing Bonds.” Upon a default by the Commission, each Holder of a 2017 Bond will have the rights to exercise the remedies set forth in the Indenture, subject to the limitations thereon. See “APPENDIX C – SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE.” The Sales Tax With limited exceptions, the Sales Tax will be imposed upon the same transactions and items subject to the sales tax levied statewide by the State. The State Legislature or the voters within the State, through the initiative process, or judicial decisions interpreting State law, could change or limit the transactions and items upon which the statewide sales tax and the Sales Tax are imposed. Any such change or limitation could have an adverse impact on the Sales Tax Revenues collected. For a further description of the Sales Tax, see “THE SALES TAX.” Increased Internet Use May Reduce Sales Tax Revenues The increasing use of the Internet to conduct electronic commerce may affect the levels of Sales Tax Revenues. Internet sales of physical products by businesses located in the State, and Internet sales of physical products delivered to the State by businesses located outside of the State are generally subject to the Sales Tax. The Commission believes that many of these transactions may avoid taxation either through error or deliberate non-reporting and this potentially reduces the amount of Sales Tax Revenues. As a result, the more that the Internet is used to conduct electronic commerce, along with the failure to collect sales taxes on such Internet purchases, the more that the Commission may experience reductions of Sales Tax Revenues. On September 23, 2011, Governor Jerry Brown signed into law a settlement with Amazon.com Inc., one of the largest internet retailers in the State. As a result, beginning in September 2012, Amazon started collecting taxes from its on-line sales in the State, to remit to the Board of Equalization. Proposition 218 On November 5, 1996, voters in the State approved an initiative known as the Right to Vote on Taxes Act (“Proposition 218”). Proposition 218 added Articles XIIIC and XIIID to the California Constitution. Article XIIIC requires majority voter approval for the imposition, extension or increase of general taxes and two-thirds voter approval for the imposition, extension 84 36472210.5 29 or increase of special taxes by a local government, which is defined to include local or regional governmental agencies such as the Commission. The Sales Tax was approved by more than two-thirds of the voters in Riverside County and is therefore in compliance with the requirements of Proposition 218. Article XIIIC also removes limitations that may have applied to the voter initiative power with regard to reducing or repealing previously authorized local taxes, even previously voter-approved taxes like the Sales Tax. In the view of the Commission, however, any attempt by the voters to use the initiative provisions of Proposition 218 to rescind or reduce the levy and collection of the Sales Tax in a manner which would prevent the payment of debt service on the 2017 Bonds, would violate the Contracts Clause of the United States Constitution and, accordingly, would be precluded. The interpretation and application of Proposition 218 will ultimately be determined by the courts. Further Initiatives Proposition 218 was adopted as a measure that qualified for the ballot pursuant to California’s initiative process. From time to time other initiative measures could be adopted, which may affect the Commission’s ability to levy and collect the Sales Tax, or change the types of transactions or items subject to a Sales Tax. Loss of Tax Exemption As discussed under “TAX MATTERS,” interest on the 2017 Bonds could become includable in federal gross income, possibly from the date of issuance of the 2017 Bonds, as a result of acts or omissions of the Commission subsequent to the issuance of the 2017 Bonds. Should interest become includable in federal gross income, the 2017 Bonds are not subject to mandatory redemption by reason thereof and may remain outstanding until maturity. Reduction in Subsidy Payments The 2010 Series B Bonds have been designated by the Commission as “Build America Bonds” that are “qualified bonds” under the Stimulus Act. The Trustee is to receive on the Commission’s behalf Subsidy Payments from the United States Treasury equal to 35% of the interest payable on the 2010 Series B Bonds, and 45% of the interest payable on such 2010 Series B Bonds that have been additionally designated as “Recovery Zone Economic Development Bonds.” The amount of any Subsidy Payments to be received in connection with the 2010 Series B Bonds is subject to legislative changes by the United States Congress, as further described below. Further, Subsidy Payments will only be paid if the 2010 Series B Bonds continue to qualify as Build America Bonds or Recovery Zone Economic Development Bonds. For the 2010 Series B Bonds to be and remain Build America Bonds or Recovery Zone Economic Development Bonds, the Commission must comply with certain covenants and establish certain facts and expectations with respect to the 2010 Series B Bonds, the use and investment of proceeds thereof and the use of property financed thereby. Thus, it is possible that the Commission may not receive the Subsidy Payments. Subsidy Payments are also subject to offset against amounts that may, for unrelated reasons, be owed by the Commission to any agency of the United States of America. 85 36472210.5 30 On March 1, 2013, the federal government announced the implementation of certain automatic spending cuts known as “sequestration.” In Fiscal Year 2015-16, sequestration reduced Subsidy Payments to the Commission by approximately $202,800. The Commission expects future reductions in Subsidy Payments to occur due to sequestration but is unable to predict the amount or duration of such reductions. Under the Indenture, Subsidy Payments are treated as an offset to Debt Service, but the Commission remains obligated to make all payments of Debt Service on the Bonds from Revenues regardless of whether it receives the full amount of the Subsidy Payments. The Commission does not believe that failure to receive all or any portion of the Subsidy Payments, due to sequestration or other causes, will have a material adverse effect on the Commission’s ability to pay Debt Service on the 2010 Series B Bonds or any other Bonds. Financial and Operating Risks of the Riverside SR-91 Corridor Improvement Project and the I-15 Express Lanes Project The Commission incurred $597,709,010.60 of senior and subordinate debt payable from and secured by Toll Revenues to finance a portion of the costs of the Riverside SR-91 Corridor Improvement Project and expects to incur approximately $__________ of senior debt payable from and secured by toll revenues to finance a portion of the costs of the I-15 Express Lanes Project. In addition to its debt service obligations arising from such debt, the Commission will have ongoing operation and maintenance expenses as well as certain repair and rehabilitation obligations over the 50-year period following substantial completion of the Riverside SR-91 Corridor Improvement Project and the I-15 Express Lanes Project. Moreover, the Commission will also face continued liability as the owner of the Riverside SR-91 Corridor Improvement Project and the I-15 Express Lanes Project. The Commission has limited experience (approximately three months) with the ownership and operation of enterprises like the Riverside SR-91 Corridor Improvement Project and the I-15 Express Lanes Project. While the Commission’s financial obligations with respect to the Riverside SR-91 Corridor Improvement Project and the I-15 Express Lanes Project after substantial completion are limited to Toll Revenues, any financial distress affecting the Riverside SR-91 Corridor Improvement Project or the I-15 Express Lanes Project may also affect the Commission. Neither project is owned by a stand-alone municipal entity that may file for Chapter 9 bankruptcy separately from the Commission. If either project was to experience financial difficulty severe enough to justify protection under the Bankruptcy Code, the Commission would be the entity filing for Chapter 9 bankruptcy. See “Impact of Bankruptcy of the Commission” below. Impact of Bankruptcy of the Commission The Commission may be authorized to file for Chapter 9 municipal bankruptcy under certain circumstances. Should the Commission file for bankruptcy, there could be adverse effects on the holders of the 2017 Bonds. If the Sales Tax Revenues are “special revenues” under the Bankruptcy Code, then Sales Tax Revenues collected after the date of the bankruptcy filing should be subject to the lien of the 86 36472210.5 31 Indenture. “Special revenues” are defined to include taxes specifically levied to finance one or more projects or systems, excluding receipts from general property, sales, or income taxes levied to finance the general purposes of the governmental entity. The Sales Tax was levied to finance the Expenditure Plan, which includes a number of projects (collectively referred to herein as the “Expenditure Plan Projects”), and some of these Expenditure Plan Projects are described in broad terms. If a court determined that the Sales Tax was levied to finance the general purposes of the Commission, rather than specific projects, then Sales Tax Revenues would not be special revenues. No assurance can be given that a court would not hold that the Sales Tax Revenues are not special revenues. Were the Sales Tax Revenues determined not to be “special revenues,” then Sales Tax Revenues collected after the commencement of a bankruptcy case would likely not be subject to the lien of the Indenture. The holders of the 2017 Bonds may not be able to assert a claim against any property of the Commission other than the Sales Tax Revenues, and were these amounts no longer subject to the lien of the Indenture following commencement of a bankruptcy case, then there could thereafter be no amounts from which the holders of the 2017 Bonds are entitled to be paid. The Bankruptcy Code provides that special revenues can be applied to necessary operating expenses of the project or system from which the special revenues are derived, before they are applied to other obligations. This rule applies regardless of the provisions of the transaction documents. The law is not clear as to whether, or to what extent, Sales Tax Revenues would be considered to be “derived” from the Expenditure Plan Projects. To the extent that Sales Tax Revenues are determined to be both special revenues and derived from the Expenditure Plan Projects, the Commission may be able to use Sales Tax Revenues to pay necessary operating expenses of the Expenditure Plan Projects, before the remaining Sales Tax Revenues are turned over to the Trustee to pay amounts owed to the holders of the 2017 Bonds. It is not clear precisely which expenses would constitute necessary operating expenses. If the Commission is in bankruptcy, the parties (including the holders of the 2017 Bonds) may be prohibited from taking any action to collect any amount from the Commission or to enforce any obligation of the Commission, unless the permission of the bankruptcy court is obtained. These restrictions may also prevent the Trustee from making payments to the holders of the 2017 Bonds from funds in the Trustee’s possession. The procedure pursuant to which Sales Tax Revenues are paid directly by the Board of Equalization to the Trustee may no longer be enforceable, and the Commission may be able to require the Board of Equalization to pay Sales Tax Revenues directly to the Commission. The Commission as a debtor in bankruptcy may be able to borrow additional money that is secured by a lien on any of its property (including Sales Tax Revenues), which lien could have priority over the lien of the Indenture, or to cause some Sales Tax Revenues to be released to it, free and clear of lien of the Indenture, in each case provided that the bankruptcy court determines that the rights of the Trustee and the holders of the 2017 Bonds will be adequately protected. The Commission may also be able, without the consent and over the objection of the Trustee and the holders of the 2017 Bonds, to alter the priority, interest rate, payment terms, collateral, maturity dates, payment sources, covenants (including tax-related covenants), and other terms or provisions of the Indenture and the 2017 Bonds, provided that the bankruptcy court determines that the alterations are “fair and equitable.” 87 36472210.5 32 There may be delays in payments on the 2017 Bonds while the court considers any of these issues. There may be other possible effects of a bankruptcy of the Commission that could result in delays or reductions in payments on the 2017 Bonds, or result in losses to the holders of the 2017 Bonds. Regardless of any specific adverse determinations in a Commission bankruptcy proceeding, the fact of a Commission bankruptcy proceeding could have an adverse effect on the liquidity and value of the 2017 Bonds. FINANCIAL STATEMENTS The financial statements of the Commission for the Fiscal Year ended June 30, 2016, included in the 2016 CAFR which is attached as APPENDIX A to this Official Statement, have been audited by Macias Gini & O’Connell LLP, certified public accountants, as stated in its report therein. Macias Gini & O’Connell LLP, the Commission’s independent auditor, has not been engaged to perform, and has not performed, since the date of its report included therein, any procedures on the financial statements addressed in that report. Macias Gini & O’Connell LLP also has not performed any procedures relating to this Official Statement. Except as described herein, the Commission represents that there has been no material adverse change in its financial position since June 30, 2016. LITIGATION There is not now pending any litigation restraining or enjoining the imposition or collection of the Sales Tax, the construction or operation of the SR-91 Corridor Improvement Project or the I-15 Express Lanes Project or the issuance or delivery of the 2017 Bonds or questioning or affecting the validity of the 2017 Bonds or the proceedings and authority under which they are to be issued. Neither the creation, organization or existence of the Commission, nor the title of the present members of the Commission to their respective offices, is being contested. TAX MATTERS In the opinion of Orrick, Herrington & Sutcliffe LLP, Bond Counsel to the Commission (“Bond 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, interest on the 2017 Bonds is excluded from gross income for federal income tax purposes under Section 103 of the Internal Revenue Code of 1986 (the “Code”) and is exempt from State of California personal income taxes. Bond Counsel is of the further opinion that interest on the 2017 Bonds is not a specific preference item for purposes of the federal individual or corporate alternative minimum taxes, although Bond Counsel observes that such interest is included in adjusted current earnings when calculating corporate alternative minimum taxable income. A complete copy of the proposed form of opinion of Bond Counsel is included herein as APPENDIX F. To the extent the issue price of any maturity of the 2017 Bonds is less than the amount to be paid at maturity of such 2017 Bonds (excluding amounts stated to be interest and payable at least annually over the term of such 2017 Bonds), the difference constitutes “original issue discount,” the accrual of which, to the extent properly allocable to each owner thereof, is treated 88 36472210.5 33 as interest on the 2017 Bonds which is excluded from gross income for federal income tax purposes and State of California personal income taxes. For this purpose, the issue price of a particular maturity of the 2017 Bonds is the first price at which a substantial amount of such maturity of the 2017 Bonds is sold to the public (excluding bond houses, brokers, or similar persons or organizations acting in the capacity of underwriters, placement agents or wholesalers). The original issue discount with respect to any maturity of the 2017 Bonds accrues daily over the term to maturity of such 2017 Bonds on the basis of a constant interest rate compounded semiannually (with straight-line interpolations between compounding dates). The accruing original issue discount is added to the adjusted basis of such 2017 Bonds to determine taxable gain or loss upon disposition (including sale, redemption, or payment on maturity) of such 2017 Bonds. Owners of the 2017 Bonds should consult their own tax advisors with respect to the tax consequences of ownership of 2017 Bonds with original issue discount, including the treatment of purchasers who do not purchase such 2017 Bonds in the original offering to the public at the first price at which a substantial amount of such 2017 Bonds is sold to the public. 2017 Bonds purchased, whether at original issuance or otherwise, for an amount higher than their principal amount payable at maturity (or, in some cases, at their earlier call date) (“Premium Bonds”) will be treated as having amortizable bond premium. No deduction is allowable for the amortizable bond premium in the case of bonds, like the Premium Bonds, the interest on which is excluded from gross income for federal income tax purposes. However, the amount of tax-exempt interest received, and a purchaser’s basis in a Premium Bond, will be reduced by the amount of amortizable bond premium properly allocable to such purchaser. Owners of Premium Bonds should consult their own tax advisors with respect to the proper treatment of amortizable bond premium in their particular circumstances. The Code imposes various restrictions, conditions and requirements relating to the exclusion from gross income for federal income tax purposes of interest on obligations such as the 2017 Bonds. The Commission has made certain representations and covenanted to comply with certain restrictions, conditions and requirements designed to ensure that interest on the 2017 Bonds will not be included in federal gross income. Inaccuracy of these representations or failure to comply with these covenants may result in interest on the 2017 Bonds being included in gross income for federal income tax purposes, possibly from the date of original issuance of the 2017 Bonds. The opinion of Bond Counsel assumes the accuracy of these representations and compliance with these covenants. Bond Counsel has not undertaken to determine (or to inform any person) whether any actions taken (or not taken), or events occurring (or not occurring), or any other matters coming to Bond Counsel’s attention after the date of issuance of the 2017 Bonds may adversely affect the value of, or the tax status of interest on, the 2017 Bonds. Accordingly, the opinion of Bond Counsel is not intended to, and may not, be relied upon in connection with any such actions, events or matters. Although Bond Counsel is of the opinion that interest on the 2017 Bonds is excluded from gross income for federal income tax purposes and is exempt from State of California personal income taxes, the ownership or disposition of, or the accrual or receipt of amounts treated as interest on, the 2017 Bonds may otherwise affect a beneficial owner’s federal, state or local tax liability. The nature and extent of these other tax consequences depends upon the particular tax status of the beneficial owner or the beneficial owner’s other items of income or deduction. Bond Counsel expresses no opinion regarding any such other tax consequences. 89 36472210.5 34 Current and future legislative proposals, if enacted into law, clarification of the Code or court decisions may cause interest on the 2017 Bonds to be subject, directly or indirectly, in whole or in part, to federal income taxation or to be subject to or exempted from state income taxation, or otherwise prevent beneficial owners from realizing the full current benefit of the tax status of such interest. For example, budget proposals in recent years have proposed legislation that would limit the exclusion from gross income of interest on the 2017 Bonds to some extent for high-income individuals. The introduction or enactment of any such legislative proposals or clarification of the Code or court decisions may also affect, perhaps significantly, the market price for, or marketability of, the 2017 Bonds. Prospective purchasers of the 2017 Bonds should consult their own tax advisors regarding the potential impact of any pending or proposed federal or state tax legislation, regulations or litigation, as to which Bond Counsel is expected to express no opinion. The opinion of Bond Counsel is based on current legal authority, covers certain matters not directly addressed by such authorities, and represents Bond Counsel’s judgment as to the proper treatment of the 2017 Bonds for federal income tax purposes. It is not binding on the Internal Revenue Service (“IRS”) or the courts. Furthermore, Bond Counsel cannot give and has not given any opinion or assurance about the future activities of the Commission, or about the effect of future changes in the Code, the applicable regulations, the interpretation thereof or the enforcement thereof by the IRS. The Commission has covenanted, however, to comply with the requirements of the Code. Bond Counsel’s engagement with respect to the 2017 Bonds ends with the issuance of the 2017 Bonds, and, unless separately engaged, Bond Counsel is not obligated to defend the Commission or the beneficial owners regarding the tax-exempt status of the 2017 Bonds in the event of an audit examination by the IRS. Under current procedures, parties other than the Commission and its appointed counsel, including the beneficial owners, would have little, if any, right to participate in the audit examination process. Moreover, because achieving judicial review in connection with an audit examination of tax-exempt bonds is difficult, obtaining an independent review of IRS positions with which the Commission legitimately disagrees may not be practicable. Any action of the Internal Revenue Service, including but not limited to selection of the 2017 Bonds for audit, or the course or result of such audit, or an audit of bonds presenting similar tax issues, may affect the market price for, or the marketability of, the 2017 Bonds, and may cause the Commission or the beneficial owners to incur significant expense. CERTAIN LEGAL MATTERS The validity of the Bonds and certain other legal matters are subject to the approving opinion of Orrick, Herrington & Sutcliffe LLP, Bond Counsel to the Commission. A complete copy of the proposed form of Bond Counsel opinion is contained in APPENDIX F hereto. Bond Counsel undertakes no responsibility for the accuracy, completeness or fairness of this Official Statement. Certain legal matters will be passed upon for the Commission by Norton Rose Fulbright US LLP, Los Angeles, California, as Disclosure Counsel, and by Best Best & Krieger LLP, Riverside, California, the General Counsel for the Commission. Compensation paid to Bond Counsel and Disclosure Counsel is conditioned upon the successful issuance of the 2017 Bonds. 90 36472210.5 35 RATINGS S&P Global Ratings, a business unit of Standard & Poor’s Financial Services LLC, and Fitch Ratings have assigned the 2017 Bonds the long-term municipal bond credit ratings of “___” and “___,” respectively. Each such rating should be evaluated independently of any other rating. Such ratings reflect only the views of such organizations and any desired explanation of the significance of such ratings should be obtained from the rating agency furnishing the same. The ratings described above do not constitute a recommendation to buy, sell or hold the 2017 Bonds. The Commission has furnished to the rating agencies certain information respecting the 2017 Bonds and the Commission. Generally, rating agencies base their ratings on such information and materials and their own investigations, studies and assumptions. The ratings are subject to revision, suspension or withdrawal at any time by the rating agencies, and there is no assurance that the ratings will continue for any period of time or that they will not be lowered or withdrawn. The Commission undertakes no responsibility to oppose any such revision, suspension or withdrawal. Any downward revision, suspension or withdrawal of any rating may have an adverse effect on the market price of the 2017 Bonds or the ability to sell the 2017 Bonds. UNDERWRITING Merrill Lynch, Pierce, Fenner & Smith Incorporated, Goldman, Sachs & Co. and Barclays Capital LLC, as co-representatives of themselves and Academy Securities Inc. and Fidelity Capital Markets, underwriters of the 2017 Bonds (collectively, the “Underwriters”), have agreed, subject to certain conditions, to purchase the 2017 Bonds at a price of $__________ (representing the aggregate principal amount of the 2017 Bonds, plus/less a premium/discount of $________, less an underwriters’ discount of $________). The Bond Purchase Agreement for the 2017 Bonds provides that the Underwriters will purchase all the 2017 Bonds if any are purchased. The delivery of the 2017 Bonds is conditioned upon the prior execution of the TIFIA Loan Agreement. The 2017 Bonds may be offered and sold by the Underwriters to certain dealers and others at yields lower than the public offering yields indicated on the inside cover hereof, and such public offering yields may be changed, from time to time, by the Underwriters. An affiliate of Merrill Lynch, Pierce, Fenner & Smith Incorporated, one of the Underwriters, is a counterparty under an interest rate swap agreement (the BofA Swap Agreement) that hedges the 2009 Series B Bonds and 2009 Series C Bonds. Barclays Capital LLC, one of the Underwriters, serves as the Commission’s commercial paper dealer and remarketing agent for the 2009 Series B Bonds and 2009 Series C Bonds. The following paragraphs have been provided by the Underwriters for inclusion in this Official Statement and the Commission does not assume any responsibility for the accuracy or completeness of such statements or information. Academy Securities, Inc., Co-Manager of the 2017 Bonds, has entered into Distribution Agreements with The Vanguard Group, TD Ameritrade Inc., Stoever, Glass & Company Inc., 91 36472210.5 36 BNY Mellon Capital Markets LLC, R. Seelaus & Co., Douglas & Co. Municipals, Inc., Ross, Sinclaire & Associates, Inc., W.H. Mell Associates, Inc., Intercoastal Capital Markets, Inc., and Janney Montgomery Scott LLC for the retail distribution of certain municipal securities at the original issue prices. Pursuant to these Distribution Agreements (if applicable to this transaction), Academy Securities may share a portion of its underwriting compensation with these firms. The Underwriters and their respective affiliates are full service financial institutions engaged in various activities, which may include sales and trading, commercial and investment banking, advisory, investment management, investment research, principal investment, hedging, market making, brokerage and other financial and non-financial activities and services. Under certain circumstances, the Underwriters and their affiliates may have certain creditor and/or other rights against the Commission and its affiliates in connection with such activities. In the various course of their various business activities, the Underwriters and their respective affiliates, officers, directors and employees may purchase, sell or hold a broad array of investments and actively traded securities, derivatives, loans, commodities, currencies, credit default swaps and other financial instruments for their own account and for the accounts of their customers, and such investment and trading activities may involve or relate to assets, securities and/or instruments of the Commission (directly, as collateral securing other obligations or otherwise) and/or persons and entities with relationships with the Commission. The Underwriters and their respective affiliates may also communicate independent investment recommendations, market color or trading ideas and/or publish or express independent research views in respect of such assets, securities or instruments and may at any time hold, or recommend to clients that they should acquire, long and/or short positions in such assets, securities and instruments MUNICIPAL ADVISOR The Commission has retained Fieldman, Rolapp & Associates, Irvine, California, as Municipal Advisor in connection with the issuance of the 2017 Bonds. Unless specifically noted, the Municipal Advisor is not obligated to undertake, and has not undertaken to make, an independent verification or assume responsibility for the accuracy, completeness or fairness of the information contained in this Official Statement. The Municipal Advisor is an independent municipal advisory firm and is not engaged in the business of underwriting, trading or distributing municipal securities or other public securities. Compensation paid to the Municipal Advisor is contingent upon the successful issuance of the 2017 Bonds. CONTINUING DISCLOSURE The Commission has agreed to execute the Continuing Disclosure Agreement and will covenant therein for the benefit of the beneficial owners of the 2017 Bonds to provide certain financial information and operating data relating to the Commission and the Sales Tax by not later than nine months after the end of the Commission’s prior fiscal year (the “Annual Reports”), and to provide notices of the occurrence of certain enumerated events (the “Listed Events”). The Annual Reports and notices of Listed Events will be filed with the MSRB. See “APPENDIX D – FORM OF CONTINUING DISCLOSURE AGREEMENT.” 92 36472210.5 37 MISCELLANEOUS The references herein to the Act and the Indenture are brief outlines of certain provisions thereof. Such outlines do not purport to be complete and for full and complete statements of such provisions reference is made to said documents or the Act, as the case may be. Copies of the documents mentioned under this heading are available for inspection at the Commission and following delivery of the 2017 Bonds will be on file at the offices of the Trustee in Los Angeles, California. References are made herein to certain documents and reports which are brief summaries thereof which do not purport to be complete or definitive. Reference is made to such documents and reports for full and complete statements of the content thereof. Any statement 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 Commission and the purchasers or Holders of any of the 2017 Bonds. The execution and delivery of this Official Statement has been duly authorized by the Commission. RIVERSIDE COUNTY TRANSPORTATION COMMISSION By: Executive Director 93 36472210.5 APPENDIX A COMMISSION AUDITED FINANCIAL STATEMENTS FOR FISCAL YEAR ENDED JUNE 30, 2016 94 36472210.5 B-1 APPENDIX B COUNTY OF RIVERSIDE DEMOGRAPHIC AND ECONOMIC INFORMATION [update appendix as 2016 data becomes available] Set forth below is certain demographic and economic information with respect to the County of Riverside (the “County”). Such information is provided as general information and has been obtained from sources that the Commission believes to be reliable, but the Commission makes no representation as to the accuracy or completeness of the information included. The weakness of the economy at the County, State and national levels may not be reflected in the data presented below, as more recent information has not been made available to the Commission. The County was organized in 1893 from territory in San Bernardino and San Diego Counties and encompasses 7,177 square miles. The County is bordered on the north by San Bernardino County, on the east by the State of Arizona, on the south by San Diego and Imperial Counties and on the west by Orange and San Bernardino Counties. The County is the fourth largest county (by area) in the State and stretches 185 miles from the Arizona border to within 20 miles of the Pacific Ocean. There are 28 incorporated cities in the County. In its 123 years of existence, the County's economy has diversified and prospered. Originally, the County was a very agricultural area, known for a variety of crops grown on its fertile soils. The County remains a strong agricultural area, but it is increasingly becoming a leader in manufacturing, transportation, construction, and tourism. Population According to the State Department of Finance, Demographic Research Unit, the County’s population was estimated at 2,347,828 as of January 1, 2016, representing an approximately 1.3% increase over the County’s population as estimated for the prior year, and a rate higher than the statewide population increase of 0.9% for the same period. According to the State Department of Finance, Demographic Research Unit, the County’s population was estimated at 2,360,727 as of July 1, 2016. For the ten year period of January 1, 2006 to January 1, 2016, the County’s population grew by approximately 18.82%. During this period, the cities of Eastvale, Jurupa Valley, Menifee and Wildomar incorporated, and account for a total population of 12.16% of the County as of January 1, 2016. 95 36472210.5 B-2 The following table sets forth annual population figures as of January 1 of each year for cities located within the County for each of the years listed: COUNTY OF RIVERSIDE POPULATION OF CITIES WITHIN THE COUNTY (As of January 1) City 2012 2013 2014 2015 2016 Banning 30,133 30,332 30,483 30,659 30,834 Beaumont 39,359 40,666 41,864 43,601 45,118 Blythe 20,570 19,894 19,305 19,254 19,813 Calimesa 7,956 7,932 8,040 8,138 8,289 Canyon Lake 10,629 10,543 10,564 10,608 10,681 Cathedral City 52,485 53,163 53,480 53,859 54,261 Coachella 42,426 43,676 44,614 45,001 45,407 Corona 156,178 159,469 162,000 163,317 164,659 Desert Hot Springs 27,973 28,385 28,605 28,794 29,048 Eastvale 55,881 57,458 59,375 60,825 63,162 Hemet 79,489 78,842 79,176 79,548 80,070 Indian Wells 5,103 5,199 5,265 5,336 5,412 Indio 79,185 83,450 84,655 86,683 88,058 Jurupa Valley 95,970 95,731 96,025 96,898 98,177 Lake Elsinore 53,457 56,039 57,368 59,142 61,006 La Quinta 38,100 38,156 38,720 39,311 39,977 Menifee 81,540 83,885 85,455 87,286 89,004 Moreno Valley 198,353 200,889 202,191 203,696 205,383 Murrieta 107,214 110,183 111,226 112,576 113,795 Norco 27,314 27,048 27,037 26,392 26,896 Palm Desert 48,924 48,282 48,494 48,835 49,335 Palm Springs 45,326 45,465 45,818 46,204 46,654 Perris 70,307 70,700 71,743 72,476 73,722 Rancho Mirage 17,583 17,685 17,783 17,920 18,070 Riverside 311,332 316,162 318,511 321,655 324,696 San Jacinto 45,385 46,216 46,649 47,087 47,656 Temecula 103,133 104,145 105,368 107,794 109,064 Wildomar 33,050 33,685 34,271 34,758 35,168 TOTALS Incorporated 1,884,355 1,913,280 1,934,085 1,957,653 1,983,415 Unincorporated 355,360 353,269 357,008 360,271 364,413 County-Wide 2,239,715 2,266,549 2,291,093 2,317,924 2,347,828 California 37,881,357 38,239,207 38,567,459 38,907,642 39,255,883 ____________________ Source: State Department of Finance, Demographic Research Unit. 96 36472210.5 B-3 Industry and Employment The County is a part of the Riverside-San Bernardino-Ontario Metropolitan Statistical Area (“MSA”), which includes all of Riverside and San Bernardino Counties. The following table sets forth the annual average employment by industry for the Riverside-San Bernardino- Ontario MSA. RIVERSIDE-SAN BERNARDINO-ONTARIO MSA ANNUAL AVERAGE EMPLOYMENT(1) Industry 2011 2012 2013 2014 2015 Total Farm 14,900 15,000 14,500 14,400 15,100 Construction 59,100 62,600 70,000 77,600 85,200 Financial Activities 39,500 40,200 41,300 42,300 43,200 Government 227,500 224,600 225,200 228,800 233,400 Manufacturing 85,100 86,700 87,300 91,300 95,600 Nondurable Goods 29,300 29,800 30,100 31,100 32,800 Durable Goods 55,800 56,900 57,300 60,200 62,800 Mining & Logging 1,000 1,200 1,200 1,300 1,300 Retail Trade 158,500 162,400 164,800 169,400 173,500 Professional and Business Services 126,000 127,500 132,400 139,300 144,400 Educational and Health Services 165,400 173,600 187,600 194,800 205,000 Leisure and Hospitality 124,000 129,400 135,900 144,800 151,500 Other Services 39,100 40,100 41,100 43,000 44,000 Transportation, Warehousing and Utilities 67,900 73,000 78,400 86,600 97,300 Wholesale Trade 49,200 52,200 56,400 58,900 61,700 Information 12,200 11,700 11,500 11,300 11,300 TOTAL, All Industries(2) 1,169,400 1,200,200 1,247,800 1,303,700 1,362,400 ___________________________ Source: State Employment Development Department, Labor Market Information Division. (1) Based on a March 2015 Benchmark. (2) The employment figures by industry which are shown above are not directly comparable to “TOTAL, All Industries” due to rounding. 97 36472210.5 B-4 The following table sets forth certain of the ten major employers located in the County as of 2015: COUNTY OF RIVERSIDE CERTAIN MAJOR EMPLOYERS (2015)(1) Company Name Product/Service No. of Local Employees County of Riverside County Government 20,684 March Air Reserve Base Military Reserve Base 8,500 Stater Bros Market Supermarkets 6,900 Wal-Mart Retailer 6,550 University of California, Riverside University 5,768 Kaiser Permanente Riverside Medical Center Hospital 5,300 Corona-Norco Unified School District School District 4,932 Temecula Valley Unified School District School District 4,000 Riverside Unified School District School District 3,871 Hemet Unified School District School District 3,400 ____________________ Source: Riverside County Economic Development Agency. (1) Most current year for which data is available. Unemployment statistics for the County, the State and the United States for the years 2011 through 2015 and partial data for 2016, as indicated, are set forth in the following table. COUNTY OF RIVERSIDE COUNTY, STATE AND NATIONAL UNEMPLOYMENT DATA 2011 2012 2013 2014 2015 2016 County(1) 13.2% 11.6% 9.9% 8.2% 6.7% 6.3%(2) California(1) 11.7 10.4 8.9 7.5 6.2 5.5(2) United States(3) 9.1 8.2 7.5 6.1 5.3 4.9 ____________________ Source: State of California Employment Development Department Labor Market Information Division for the County and California; U.S. Bureau of Labor Statistics for the United States. (1) Data is not seasonally adjusted. The unemployment data for the County and the State is calculated using unrounded data. (2) For October 2016. (3) For June of the given year; data is seasonally adjusted. 98 36472210.5 B-5 Commercial Activity Commercial activity is an important factor in the County’s economy. Much of the County’s commercial activity is concentrated in central business districts or small neighborhood commercial centers in cities. There are five regional shopping malls in the County: Galleria at Tyler (Riverside), Hemet Valley Mall, Westfield Palm Desert Shopping Center, Moreno Valley Mall, and The Promenade in Temecula. There are also two factory outlet malls (Desert Hills Factory Stores and Lake Elsinore Outlet Center) and over 200 area centers in the County. Taxable Sales Transactions The following table sets forth taxable sale transactions in the County for the years 2010 through 2014, the last year being the most recent full year of which annual data is currently available. Taxable sale transaction information by industry for 2015 is not yet available. COUNTY OF RIVERSIDE TAXABLE SALES TRANSACTIONS (In Thousands) 2010 2011 2012 2013 2014 Motor Vehicles and Parts Dealers $ 2,620,568 $ 3,010,487 $ 3,493,098 $ 3,965,201 4,417,943 Furniture and Home Furnishings 412,325 436,482 441,649 486,061 520,393 Electronics and Appliances Stores 470,784 478,406 488,419 510,423 510,061 Building Materials, Garden Equipment and Supplies 1,232,145 1,303,073 1,365,513 1,535,178 1,706,183 Food and Beverage Stores 1,267,758 1,304,731 1,356,148 1,421,590 1,509,403 Health and Personal Care Stores 400,207 454,268 490,238 523,724 544,958 Gasoline Stations 2,685,840 3,300,785 3,516,040 3,456,322 3,426,830 Clothing and Clothing Accessories Stores 1,391,174 1,505,821 1,672,482 1,771,603 1,989,623 Sporting Goods, Hobby, Book and Music Stores 428,121 454,971 467,536 499,366 519,188 General Merchandise Stores 2,947,905 3,051,709 3,174,022 3,298,920 3,289,057 Miscellaneous Store Retailers 652,273 700,338 742,118 758,664 809,032 Nonstore Retailers 92,916 101,876 142,081 243,334 309,809 Food Services and Drinking Places 2,317,486 2,473,339 2,668,324 2,836,388 3,093,862 Total Retail and Food Services(1) 16,919,500 18,576,285 20,016,668 21,306,774 22,646,343 All Other Outlets 6,233,280 7,065,212 8,079,341 8,758,693 9,389,345 Total All Outlets(1) $23,152,780 $25,641,497 $28,096,009 $30,065,467 32,035,687 __________________ Source: California State Board of Equalization, Research and Statistics Division. (1) Amounts subject to rounding differences. 99 36472210.5 B-6 Building and Real Estate Activity The following tables set forth five-year summaries of building permit valuations and new dwelling units authorized in the County (in both incorporated and unincorporated areas) for the years 2011 through 2015. COUNTY OF RIVERSIDE BUILDING PERMIT VALUATIONS (In Thousands) 2011 2012 2013 2014 2015 RESIDENTIAL New Single-Family $ 651,747 $ 854,814 $1,134,158 $1,296,553 $1,267,593 New Multi-Family 115,064 99,578 136,501 178,117 110,458 Alterations and Adjustments 119,684 84,517 94,422 147,081 113,615 Total Residential 886,495 1,038,909 1 ,365,081 1,621,751 1,491,666 NON-RESIDENTIAL New Commercial 152,160 346,865 80,510 184,138 182,089 New Industry 10,000 3,767 140,972 161,321 111,070 New Other(1) 99,898 78,602 184,500 142,204 215,914 Alterations & Adjustments 297,357 154,325 364,616 327,327 299,882 Total Nonresidential 559,415 583,559 770,598 814,990 808,955 TOTAL ALL BUILDING $1,445,910 $1,622,468 $2,135,679 $2,436,741 $2,300,621 ____________________ Source: Construction Industry Research Board for years 2011, 2014 and 2015; California Homebuilding Foundation for years 2012 and 2013. (1) Includes churches and religious buildings, hospitals and institutional buildings, schools and educational buildings, residential garages, and public works and utilities buildings. COUNTY OF RIVERSIDE NUMBER OF NEW DWELLING UNITS 2011 2012 2013 2014 2015 Single Family 2,659 3,467 4,671 5,007 4,833 Multi-Family 1,061 829 1,415 1,931 1,189 TOTAL 3,720 4,296 6,086 6,938 6,022 ____________________ Source: Construction Industry Research Board for years 2011, 2014 and 2015; California Homebuilding Foundation/Construction Industry Research Board for years 2012 and 2013. 100 36472210.5 B-7 The following table sets forth the annual median housing prices for Los Angeles County, Riverside County, San Bernardino County and Southern California for the years 2011 through 2015. COUNTY OF RIVERSIDE COMPARISON OF MEDIAN HOUSING PRICES Year Los Angeles Riverside San Bernardino Southern California(1) 2011 $315,000 $195,000 $150,000 $280,000 2012 330,000 210,000 163,000 300,000 2013 411,000 259,000 205,000 370,000 2014 455,000 293,000 240,000 410,000 2015 487,500 310,000 262,000 431,000 ____________________ Source: MDA DataQuick Information Systems. (1) Southern California comprises Los Angeles, Orange, San Diego, Riverside, San Bernardino and Ventura Counties. The following table sets forth the home and condominium foreclosures recorded in Los Angeles County, Riverside County, San Bernardino County and Southern California for the years 2011 through 2015. COUNTY OF RIVERSIDE COMPARISON OF HOME FORECLOSURES Year Los Angeles Riverside San Bernardino Southern California(1) 2011 25,597 17,383 14,181 77,105 2012 15,271 10,657 9,262 47,347 2013 6,469 4,191 4,088 19,470 2014 4,566 2,912 2,984 13,787 2015 3,970 2,463 2,616 11,959 ____________________ Source: MDA DataQuick Information Systems. (1) Southern California comprises Los Angeles, Orange, San Diego, Riverside, San Bernardino and Ventura Counties. Agriculture Agriculture remains an important source of income in the County. Principal agricultural products are: nursery, milk, table grapes, eggs, avocados, grapefruit, alfalfa, bell peppers, dates, and lemons. Four areas in the County account for the major portion of agricultural activity: the Riverside/Corona and San Jacinto/Temecula Valley Districts in the western portion of the County, the Coachella Valley in the central portion and the Palo Verde Valley near the County’s eastern border. The value of agricultural production in the County for the years 2011 through 2015 is set forth in the following table. 101 36472210.5 B-8 COUNTY OF RIVERSIDE VALUE OF AGRICULTURAL PRODUCTION 2011 2012 2013 2014 2015 Citrus Fruits $ 119,942,513 $ 125,711,000 $ 142,404,000 $ 170,891,000 $ 187,673,000 Trees and Vines 232,649,262 217,214,000 232,536,000 223,593,000 234,928,000 Vegetables, Melons, Misc. 278,628,295 286,234,000 340,407,000 337,404,000 327,199,000 Field and Seed Crops 149,198,052 147,352,000 154,582,000 156,575,000 122,794,000 Nursery 200,154,964 190,878,000 191,215,000 172,910,000 158,648,000 Apiculture 4,844,400 4,983,000 4,715,000 4,819,000 4,897,000 Aquaculture 4,808,250 4,205,000 2,262,000 5,078,000 5,397,000 Livestock and Poultry 292,030,380 276,553,000 259,683,000 290,746,000 260,015,000 Grand Total $1,282,256,116 $1,253,130,000 $1,327,804,000 $1,362,016,000 $1,301,551,000 ____________________ Source: Riverside County Agricultural Production Report. Transportation Several major freeways and highways provide access between the County and all parts of Southern California. State Route 91 extends southwest from Riverside through Corona and connects with the Orange County freeway network in Fullerton. Interstate 10 traverses most of the width of the County, the western-most portion of which links up with major cities and freeways in Los Angeles County and the southern part of San Bernardino County, with the eastern part linking to the County’s desert cities and Arizona. Interstate 15 and 215 extend north and then east to Las Vegas, and south to San Diego. State Route 60 provides an alternate (to Interstate 10) east-west link to Los Angeles County. Riverside 91 Express Lanes that connect with the OCTA SR-91 Express Lanes at the Orange County/Riverside County line and continue to the Interstate 15/State Route 91 interchange are under construction and expected to open in early 2017. When travelling along State Route 91 through Corona, vehicles will be able to use either the tolled express lanes or the general purpose lanes, which are free. Metrolink provides commuter rail service to Los Angeles, San Bernardino and Orange Counties from nine stations in the County. Transcontinental passenger rail service is provided by Amtrak with stops in Riverside and Palm Springs. Freight service to major west coast and national markets is provided by two transcontinental railroads–Union Pacific Railroad and the BNSF Railway Company. Truck service is provided by several common carriers, making available overnight delivery service to major California cities. Transcontinental bus service is provided by Greyhound Lines. Intercounty, intercity and local bus service is provided by the Riverside Transit Agency to western County cities and communities. There are also four municipal transit operators in the western County providing services within the cities of Banning, Beaumont, Corona and Riverside. The SunLine Transit Agency provides local bus service throughout the Coachella Valley, servicing the area from Desert Hot Springs to Oasis and from Palm Springs to Riverside. The Palo Verde Valley Transit Agency provides service in the far eastern portion of the County (City of Blythe and surrounding communities). 102 36472210.5 B-9 The County seat, located in the City of Riverside, is within 20 miles of the Ontario International Airport in neighboring San Bernardino County. This airport is operated by Los Angeles World Airports, a proprietary department of the City of Los Angeles, and is scheduled to be transferred by the City of Los Angeles to a joint powers authority in 2016. Four major airlines schedule commercial flight service at Palm Springs Regional Airport. County-operated general aviation airports include those in Thermal, Hemet, Blythe and French Valley. The cities of Riverside, Corona and Banning also operate general aviation airports. There is a military base at March Air Reserve Base, which converted from an active duty base to a reserve-only base on April 1, 1996. The March AFB Joint Powers Authority (the “JPA”), comprised of the County and the Cities of Riverside, Moreno Valley and Perris, is responsible for planning and developing joint military and civilian use. The JPA has constructed infrastructure improvements, entered into leases with private users and initialized a major business park project. Education There are four elementary school districts, one high school district, eighteen unified (K-12) school districts and four community college districts in the County. Ninety-two percent of all K-12 students attend schools in the unified school districts. The three largest unified school districts are Riverside Unified School District, Moreno Valley Unified School District and Corona-Norco Unified School District. There are seven two-year community college campuses located in the communities of Riverside, Moreno Valley, Norco, San Jacinto, Menifee, Coachella Valley and Palo Verde Valley. There are also three universities located in the City of Riverside: the University of California at Riverside, La Sierra University and California Baptist University. In addition, a campus of California State University San Bernardino is located in Palm Desert. 103 36472210.5 APPENDIX C SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE 104 36472210.5 APPENDIX D FORM OF CONTINUING DISCLOSURE AGREEMENT 105 36472210.5 E-1 APPENDIX E BOOK ENTRY SYSTEM The information in this Appendix E concerning The Depository Trust Company, New York, New York (“DTC”), and DTC’s Book-Entry System has been obtained from DTC and the Commission and the Trustee take no responsibility for the completeness or accuracy thereof. The Commission and the Trustee cannot and do not give any assurances that DTC (defined below), DTC Participants or Indirect Participants or others will distribute any (a) payments of principal or purchase price or interest with respect to the 2017 Bonds, (b) certificates representing ownership interest in or other confirmation or ownership interest in the 2017 Bonds, or (c) redemption or other notices sent to DTC or Cede & Co., its nominee, as the registered owner of the 2017 Bonds, or that they will do so on a timely basis, or that DTC, DTC Participants or DTC Indirect Participants will act in the manner described in this Appendix E. The current “Rules” applicable to DTC are on file with the Securities and Exchange Commission and the current “Procedures” of DTC to be followed in dealing with DTC Participants are on file with DTC. The Commission and the Trustee are not responsible or liable for the failure of DTC or any DTC Participant to make any payment or give any notice to a beneficial owner with respect to the 2017 Bonds or an error or delay relating thereto. The Depository Trust Company, New York, NY, will act as securities depository for the 2017 Bonds. The 2017 Bonds 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 bond certificate will be issued for each maturity of each series of the 2017 Bonds, in the aggregate principal amount of such maturity, 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 issues of 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 106 36472210.5 E-2 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 set forth on such website is not incorporated by reference herein. Purchases of 2017 Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the 2017 Bonds on DTC’s records. The ownership interest of each actual purchaser of each 2017 Bond (“Beneficial Owner”) is in turn 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 2017 Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Bonds, except in the event that use of the book-entry system for the 2017 Bonds is discontinued. To facilitate subsequent transfers, all 2017 Bonds deposited by Direct Participants with DTC are registered in the name of DTC’s partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of 2017 Bonds with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the 2017 Bonds; DTC’s records reflect only the identity of the Direct Participants to whose accounts such 2017 Bonds 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. Redemption notices shall be sent to DTC. If less than all of the 2017 Bonds within an issue are being redeemed, DTC’s practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to 2017 Bonds unless authorized by a Direct Participant in accordance with DTC’s MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy 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 2017 Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy). 107 36472210.5 E-3 Principal, premium, if any, and interest payments on the 2017 Bonds 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 Trustee, on a 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 Commission, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal, premium, if any, and interest to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of 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. DTC may discontinue providing its services as depository with respect to the 2017 Bonds at any time by giving reasonable notice to the Trustee. Under such circumstances, in the event that a successor depository is not obtained, Bond certificates are required to be printed and delivered. The Commission may decide to discontinue use of the system of book-entry transfers through DTC (or a successor securities depository). In that event, bond certificates will be printed and delivered. If DTC determines not to continue to act as securities depository by giving notice to the Commission and the Trustee, and discharges its responsibilities with respect thereto under applicable law and there is not a successor securities depository, or the Commission determines that it is in the best interest of the Beneficial Owners of the 2017 Bonds that they be able to obtain certificates, the Trustee will execute, transfer and exchange 2017 Bonds as requested by DTC and will deliver new 2017 Bonds in fully registered form in denominations of $5,000 principal amount or any integral multiple thereof in the names of Beneficial Owners or DTC Participants. In the event the book-entry system is discontinued, the principal amount of and premium, if any, payable with respect to the 2017 Bonds will be payable upon surrender thereof at the principal corporate trust office of the Trustee. The interest on 2017 Bonds will be payable by check mailed to the respective Owners thereof at their addresses as they appear on the books maintained by the Trustee. Any 2017 Bond may, in accordance with its terms, be transferred, upon the register required to be kept pursuant to the provisions of the Indenture, by the person in whose name it is registered, in person or by his or her duly authorized attorney, upon surrender of such Bond for cancellation, accompanied by delivery of a written instrument of transfer, duly executed in a form approved by the Trustee. The 2017 Bonds may be exchanged at the corporate trust office of the Trustee for a like aggregate principal amount of 2017 Bonds of other authorized denominations of the same series, tenor, maturity and interest rate by the person in whose name it is registered, in person or by his or her duly authorized attorney, upon surrender of such 2017 108 36472210.5 E-4 Bond for cancellation; provided that no transfer or exchange may occur during the period established by the Trustee for selection of 2017 Bonds for redemption, or of any 2017 Bond or portion of a 2017 Bond so selected for redemption. The Trustee shall require the Bondholder requesting such transfer or exchange to pay any tax or other governmental charge required to be paid with respect to such exchange. 109 APPENDIX F FORM OF BOND COUNSEL OPINION 110 BLANK OHSUSA:765987463.8 OH&S Draft – 4/19/17 SEVENTH SUPPLEMENTAL INDENTURE between RIVERSIDE COUNTY TRANSPORTATION COMMISSION and U.S. BANK NATIONAL ASSOCIATION, as Trustee ________________________________ Dated as of [July 1, 2017] ________________________________ Relating to RIVERSIDE COUNTY TRANSPORTATION COMMISSION SALES TAX REVENUE BONDS (LIMITED TAX BONDS) 2017 SERIES A (Supplementing the Indenture Dated as of June 1, 2008) ATTACHMENT 3 111 i OHSUSA:765987463.8 ARTICLE XLVIII DEFINITIONS  Section 48.01. Definitions........................................................................................................ 1  Section 48.02. Rules of Construction ...................................................................................... 3  ARTICLE XLIX FINDINGS, DETERMINATIONS AND DIRECTIONS  Section 49.01. Findings and Determinations ........................................................................... 3  Section 49.02. Recital in Bonds ............................................................................................... 3  Section 49.03. Effect of Findings and Recital ......................................................................... 4  ARTICLE L AUTHORIZATION OF 2017 SERIES A BONDS  Section 50.01. Principal Amount, Designation and Series ...................................................... 4  Section 50.02. Purpose and Application of Proceeds .............................................................. 4  Section 50.03. Form, Denomination, Numbers and Letters .................................................... 4  Section 50.04. Date, Maturities and Interest Rates .................................................................. 5  ARTICLE LI REDEMPTION AND PURCHASE OF 2017 SERIES A BONDS  Section 51.01. Optional Redemption of 2017 Series A Bonds ................................................ 6  Section 51.02. Mandatory Redemption of 2017 Series A Bonds From Mandatory Sinking Account Payments .............................................................................. 6  Section 51.03. Selection of Bonds for Redemption ................................................................. 7  Section 51.04. Notice of Redemption; Purchase In Lieu of Redemption ................................ 7  ARTICLE LII ESTABLISHMENT OF FUNDS AND ACCOUNTS AND APPLICATION THEREOF  Section 52.01. Funds and Accounts ......................................................................................... 8  Section 52.02. 2017 Project Fund ............................................................................................ 8  Section 52.03. 2017 Costs of Issuance Fund ........................................................................... 8  Section 52.04. I-15 Trust Fund ................................................................................................ 9  ARTICLE LIII MISCELLANEOUS  Section 53.01. Severability ...................................................................................................... 9  Section 53.02. Parties Interested Herein .................................................................................. 9  Section 53.03. Headings Not Binding.................................................................................... 10  Section 53.04. Notice Addresses ........................................................................................... 10  Section 53.05. Notices to Rating Agencies ............................................................................ 10  Section 53.06. Indenture to Remain in Effect ........................................................................ 10  Section 53.07. Effective Date of Seventh Supplemental Indenture ....................................... 10  Section 53.08. Execution in Counterparts .............................................................................. 10  112 ii OHSUSA:765987463.8 EXHIBITS EXHIBIT A FORM OF 2017 SERIES A BOND ............................................................... A-1 EXHIBIT B NOTICE ADDRESSES .................................................................................. B-1 113 OHSUSA:765987463.8 SEVENTH SUPPLEMENTAL INDENTURE THIS SEVENTH SUPPLEMENTAL INDENTURE, dated as of [July 1, 2017] (this “Seventh Supplemental Indenture”), between the RIVERSIDE COUNTY TRANSPORTATION COMMISSION, a public entity duly established and existing under the laws of the State of California (the “Commission”) and U.S. BANK NATIONAL ASSOCIATION, a national banking association duly organized and existing under and by virtue of the laws of the United States of America, as trustee (the “Trustee”): WITNESSETH: WHEREAS, this Seventh Supplemental Indenture is supplemental to the Indenture, dated as of June 1, 2008 (as supplemented and amended from time to time pursuant to its terms, the “Indenture”), between the Commission and the Trustee; WHEREAS, the Indenture provides that the Commission may issue Bonds from time to time as authorized by a Supplemental Indenture, which Bonds are to be payable from Revenues and from such other sources as may be specified with respect to a particular Series of Bonds in the Supplemental Indenture authorizing such Series; WHEREAS, the Commission has heretofore issued its Sales Tax Revenue Bonds (Limited Tax Bonds), 2009 Series B, 2009 Series C, 2010 Series A, 2010 Series B, 2013 Series A and Sales Tax Revenue Refunding Bonds (Limited Tax Bonds), 2016 Series A and such bonds are outstanding in the aggregate principal amount of $756,240,000, secured by the pledge of Revenues and other monies as set forth in the Indenture; and WHEREAS, the Commission desires to provide at this time for the issuance of an additional Series of Bonds to be designated “Riverside County Transportation Commission Sales Tax Revenue Bonds (Limited Tax Bonds), 2017 Series A” (the “2017 Series A Bonds”) for the purpose of providing funds to pay for a portion of the Costs of the Project, to retire [$20,000,000] principal amount of the Commission’s Outstanding Notes, and to pay costs of issuance, all as provided in this Seventh Supplemental Indenture; NOW, THEREFORE, the parties hereto hereby agree as follows: ARTICLE XLVIII DEFINITIONS Section 48.01. Definitions. (a) Definitions. Unless the context otherwise requires, or as otherwise provided in subsection (b) and (c) of this Section, all terms which are defined in Section 1.02, Section 19.01, Section 26.01, Section 32.01, Section 36.01 and Section 42.01 of the Indenture shall have the same meanings in this Seventh Supplemental Indenture. 114 2 OHSUSA:765987463.8 (b) Additional Definitions. Unless the context otherwise requires, the following terms shall, for all purposes of this Seventh Supplemental Indenture, have the following meanings: “Authorized Denominations” means, with respect to 2017 Series A Bonds, $5,000 and any integral multiple thereof. “Commission Backstop Loan” means the aggregate amount of any contingent backstop loan amounts made by the Commission to the Project (as defined in the Toll Revenue Bond Indenture) pursuant to Section 5.05(b) of the Toll Revenue Bond Indenture. “Commission Initial Loan” means the aggregate amount of the initial loan the Commission covenants to make to the Project (as defined in the Toll Revenue Bond Indenture) pursuant to Section 5.05(a) of the Toll Revenue Bond Indenture. “Expenditure Plan” means the Riverside County Transportation Improvement Plan, adopted as part of the Ordinance. “I-15 Trust Fund” means the fund of such name established and held by the Trustee under this Seventh Supplemental Indenture. “Interest Payment Date” means, with respect to 2017 Series A Bonds, June 1 and December 1 of each year until the redemption or maturity of such 2017 Series A Bonds, commencing with December 1, 2017. “Issue Date” means, with respect to the 2017 Series A Bonds, the date on which the 2017 Series A Bonds are first delivered to the purchasers thereof. “Record Date” means, with respect to the 2017 Series A Bonds, the fifteenth (15th) day (whether or not a Business Day) of the month preceding the month in which such Interest Payment Date occurs. “Redemption Price” means, with respect to any 2017 Series A Bond or a portion thereof, 100% of the principal amount thereof to be redeemed, plus the applicable premium, if any, payable upon redemption thereof pursuant to such Bond or this Seventh Supplemental Indenture. “Riverside SR-91 Corridor Improvement Project” means the portions of the State Highway Route 91 between the Orange and Riverside County line to the west and State Highway Route 15 to the east. “Seventh Supplemental Indenture” means this Seventh Supplemental Indenture, between the Commission and the Trustee, as amended and supplemented from time to time. “Toll Revenue Bond Indenture” means that certain Master Indenture, dated as of [July 1, 2017], by and between the Commission and the Toll Trustee, as amended and supplemented from time to time, including as amended and supplemented by that certain First Supplement to Master Indenture, dated as of [July 1, 2017], by and between the Commission and the Toll Trustee. 115 3 OHSUSA:765987463.8 “Toll Trustee” means U.S. Bank National Association, as trustee under the Toll Revenue Bonds Indenture, and its successors and assigns. “2017 Costs of Issuance Fund” means the fund by that name established pursuant to Section 52.01(b). “2017 Project Fund” means the fund by that name established pursuant to Section 52.01(c). “2017 Series A Bonds” shall mean the Riverside County Transportation Commission Sales Tax Revenue Bonds (Limited Tax Bonds), 2017 Series A, authorized by Article L of this Indenture. “2017 Series A Bonds Tax Certificate” means the Tax Certificate executed on behalf of the Commission in connection with the issuance of the 2017 Series A Bonds. Section 48.02. Rules of Construction. Words of the masculine gender shall be deemed and construed to include correlative words of the feminine and neuter genders. Unless the context shall otherwise indicate, words importing the singular number shall include the plural number and vice versa, and words importing persons shall include corporations and associations, including public bodies, as well as natural persons. Defined terms shall include any variant of the terms set forth in this Article XLVIII. The terms “hereby,” “hereof,” “hereto,” “herein,” “hereunder,” and any similar terms, as used in this Seventh Supplemental Indenture, refer to the Indenture. ARTICLE XLIX FINDINGS, DETERMINATIONS AND DIRECTIONS Section 49.01. Findings and Determinations. The Commission hereby finds and determines that the 2017 Series A Bonds shall be issued pursuant to Article L and Section 3.01, Section 3.02 and Section 3.03 of the Indenture, and upon the issuance of the 2017 Series A Bonds, any and all acts, conditions and things required to exist, to happen and to be performed, precedent to and in the issuance thereof, will exist, will have happened and will have been performed, in due time, form and manner, as required by the Constitution and statutes of the State. Section 49.02. Recital in Bonds. There shall be included in each of the definitive 2017 Series A Bonds, and also in each of the temporary 2017 Series A Bonds, if any are issued, a certification and recital that any and all acts, conditions and things required to exist, to happen and to be performed, precedent to and in the incurring of the indebtedness evidenced by that 2017 Series A Bonds, and in the issuing of that 2017 Series A Bonds, exist, have happened and have been performed in due time, form and manner, as required by the Constitution and statutes of the State and the Act, and that said 2017 Series A Bonds, together with all other indebtedness of the Commission payable out of Revenues, is within every debt and other limit prescribed by the Constitution and statutes of the State and the Act, and that such certification and recital shall be in such form as is set forth in the form of the 2017 Series A Bonds attached hereto as Exhibit A. 116 4 OHSUSA:765987463.8 Section 49.03. Effect of Findings and Recital. From and after the issuance of the 2017 Series A Bonds, the findings and determinations herein shall be conclusive evidence of the existence of the facts so found and determined in any action or proceeding in any court in which the validity of the 2017 Series A Bonds is at issue. ARTICLE L AUTHORIZATION OF 2017 SERIES A BONDS Section 50.01. Principal Amount, Designation and Series. Pursuant to the provisions of this Indenture and the provisions of the Act, a Series of Bonds entitled to the benefit, protection and security of such provisions is hereby authorized in the aggregate principal amount of $[Par Amount]. Such Bonds shall be designated as, and shall be distinguished from the Bonds of all other Series by the title, “Riverside County Transportation Commission Sales Tax Revenue Bonds (Limited Tax Bonds), 2017 Series A.” At any time after the execution and delivery of this Supplemental Indenture, the Commission may execute and, upon the order of the Commission, the Trustee shall authenticate and deliver each 2017 Series A Bonds in the aggregate principal amount set forth above. Section 50.02. Purpose and Application of Proceeds. The 2017 Series A Bonds are issued for the purpose of providing funds to pay for a portion of the Costs of the Project and to retire $___________ principal amount of the Commission’s Outstanding Notes. In addition, a portion of the proceeds of the 2017 Series A Bonds will be applied to pay Costs of Issuance of the 2017 Series A Bonds. The net proceeds from the sale of the 2017 Series A Bonds in the amount of $___________ shall be received by the Trustee, and the Trustee shall deposit or transfer such funds as follows: (a) $____________ of such proceeds shall be transferred to the Toll Trustee for deposit into the Sales Tax Revenue Bonds Account within the Project Fund, each established pursuant to the terms of the Toll Revenue Bond Indenture, for application to Costs of the Project as set forth in the Toll Revenue Bond Indenture; (b) $____________ of such proceeds shall be transferred to the Notes Trustee for deposit upon the order of the Commission; (c) $____________ of such proceeds shall be deposited in the 2017 Project Fund; and (d) $____________, the remainder of such proceeds, shall be deposited in the 2017 Costs of Issuance Fund. Section 50.03. Form, Denomination, Numbers and Letters. Each Series of 2017 Series A Bonds shall be issued as fully registered bonds without coupons in book-entry form and in Authorized Denominations and shall be numbered from one upward in consecutive numerical order preceded by the letter “R” prefixed to the number. Each Series of 2017 Series A Bonds and the certificate of authentication shall be substantially in the form attached hereto as Exhibit A. 117 5 OHSUSA:765987463.8 Section 50.04. Date, Maturities and Interest Rates. The 2017 Series A Bonds shall be issued as Current Interest Bonds in the aggregate principal amount of $[Par Amount]. The 2017 Series A Bonds shall be dated their Issue Date, shall bear interest from that date at the following rates per annum, computed on the basis of a 360-day year comprised of twelve 30-day months, and shall mature on June 1 in the following years and in the following amounts: Maturity Date (June 1) Principal Amount Interest Rate 20__ $ % 20__ 20__ 20__ 20__ 20__ 20__ 20__ 20__ 20__ 20__ 20__ 20__ 20__ 20__ 20__ 2039* _______________________________________ * Term Bond Final Maturity Interest on each 2017 Series A Bond shall be payable on each Interest Payment Date for such 2017 Series A Bond until the principal sum of such 2017 Series A Bond has been paid; provided, however, that if at the maturity date of any 2017 Series A Bond (or if the same is redeemable and shall be duly called for redemption, then at the date fixed for redemption) funds are available for the payment or redemption thereof, in full accordance with terms of the Indenture, such 2017 Series A Bond shall then cease to bear interest. Interest on each 2017 Series A Bond shall be payable to the registered Holder thereof at such registered Holder’s address as it appears on the Bond Register from the latest of: (i) such 2017 Series A Bond’s Issue Date; (ii) the most recent Interest Payment Date to which interest has been paid thereon or duly provided for, or (iii) if the date of authentication of such Bond is after a Record Date but prior to the immediately succeeding Interest Payment Date, the Interest Payment Date immediately succeeding such date of authentication. As long as the 2017 Series A Bonds are Book-Entry Bonds, principal of and interest on the 2017 Series A Bonds shall be payable by wire transfer to DTC in lawful money of the United States of America. Principal of the 2017 Series A Bonds shall be payable when due upon presentation and surrender thereof at the Principal Office of the Trustee. 118 6 OHSUSA:765987463.8 Each 2017 Series A Bond shall be payable as provided in Section 2.10, including Section 2.10(E), or, in the event the use of the Securities Depository is discontinued, the principal of each 2017 Series A Bond shall be payable in lawful money of the United States of America upon surrender thereof at the Principal Office of the Trustee, and the interest on each 2017 Series A Bond shall be payable in lawful money of the United States of America by the Trustee to the Holder thereof as of the close of business on the Record Date, such interest to be paid by the Trustee to such Holder in immediately available funds (by wire transfer or by deposit to the account of the Holder if such account is maintained with the Trustee), according to the instructions given by such Holder to the Trustee or, in the event no such instructions have been given, by check mailed by first class mail to the Holder at such Holder’s address as it appears as of the Record Date on the bond registration books kept by the Trustee. ARTICLE LI REDEMPTION AND PURCHASE OF 2017 SERIES A BONDS Section 51.01. Optional Redemption of 2017 Series A Bonds. (a) Optional Redemption of 2017 Series A Bonds. The 2017 Series A Bonds maturing on or before June 1, 20__ shall not be subject to redemption prior to their respective stated maturities. The 2017 Series A Bonds maturing on or after June 1, 20__ shall be subject to redemption prior to their respective stated maturities, at the option of the Commission, from any source of available funds, as a whole or in part, on any date on or after June 1, 20__ at the principal amount of 2017 Series A Bonds called for redemption plus accrued interest to the date fixed for redemption, without premium. (b) Sufficient Funds Required for Optional Redemption. Any optional redemption of 2017 Series A Bonds and notice thereof shall be conditional and rescinded and cancelled pursuant to the provisions of Section 4.02 if for any reason on the date fixed for redemption moneys are not available in the Redemption Fund or otherwise held in trust for such purpose in an amount sufficient to pay in full on said date the principal of, interest, and any premium due on the 2017 Series A Bonds called for redemption. Section 51.02. Mandatory Redemption of 2017 Series A Bonds From Mandatory Sinking Account Payments. (a) Mandatory Redemption of 2017 Series A Bonds. The 2017 Series A Bonds maturing on June 1, 20__ shall also be subject to mandatory redemption prior to their respective stated maturities, in part, by lot, from Mandatory Sinking Account Payments on each June 1 that a Mandatory Sinking Account Payment is due as specified in this Section 51.02(a), in the principal amount equal to the Mandatory Sinking Account Payment due on such date and at a redemption price equal to 100% of the principal amount thereof, plus accrued but unpaid interest to the redemption date, without premium. 119 7 OHSUSA:765987463.8 The Mandatory Sinking Account Payments for the 2017 Series A Term Bonds maturing on June 1, 20__ shall be due in the amounts and on the dates as follows: Mandatory Sinking Account Payments Dates (June 1) Mandatory Sinking Account Payments 20__ $ 20__ 20__ 20__ 20__ 20__* ____________________ *Final Maturity Section 51.03. Selection of Bonds for Redemption. (a) Selection of 2017 Series A Bonds for Redemption. The Commission shall designate which maturities of any 2017 Series A Bonds are to be called for optional redemption pursuant to Section 51.01(a). If less than all 2017 Series A Bonds maturing by their terms on any one date are to be redeemed at any one time, the Trustee shall select the 2017 Series A Bonds of such maturity date to be redeemed in any manner that it deems appropriate and fair and shall promptly notify the Commission in writing of the numbers of the 2017 Series A Bonds so selected for redemption. For purposes of such selection, 2017 Series A Bonds shall be deemed to be composed of multiples of minimum Authorized Denominations and any such multiple may be separately redeemed. In the event of an optional redemption of the 2017 Series A Term Bonds pursuant to Section 51.01(a), the Commission shall designate the Mandatory Sinking Account Payments under Section 51.02(a), or portions thereof, in an aggregate amount equal to the principal amount of 2017 Series A Term Bonds so optionally redeemed, that are to be reduced as allocated to such redemption, and such Mandatory Sinking Account Payments shall be reduced accordingly. Section 51.04. Notice of Redemption; Purchase In Lieu of Redemption. (a) Any notice of redemption of the 2017 Series A Bonds shall be delivered in accordance with Section 4.02 and may be rescinded as provided in Section 4.02; provided that such notice shall be given by the Trustee to the Holders not less than 20 days prior to the redemption date. The Commission shall provide the Trustee with a Request for optional redemption at least 30 days (or such lesser time as is acceptable to the Trustee) prior to the optional redemption date specified in such Request. (b) The Commission reserves the right at all times to purchase any of its 2017 Series A Bonds on the open market. In lieu of mandatory redemption, the Commission may surrender to the Trustee for cancellation 2017 Series A Bonds purchased on the open market, and such 2017 Series A Bonds shall be cancelled by the Trustee. If any 2017 Series A Bonds are so cancelled, the Commission may designate the Mandatory Sinking Account Payments or portions 120 8 OHSUSA:765987463.8 thereof within such Series of the 2017 Series A Bonds so purchased that are to be reduced as a result of such cancellation. ARTICLE LII ESTABLISHMENT OF FUNDS AND ACCOUNTS AND APPLICATION THEREOF Section 52.01. Funds and Accounts. The following funds and accounts are hereby established in connection with the 2017 Series A Bonds and the Project: (a) To ensure the proper application of such portion of proceeds from the sale of the 2017 Series A Bonds to be applied to pay the Costs of Issuance of the 2017 Series A Bonds, there is hereby established the 2017 Costs of Issuance Fund, such fund to be held by the Trustee. (b) To provide for certain conditional support for the Project from an allocation of Sales Tax Revenues there is hereby established the I-15 Trust Fund, such fund to be held by the Trustee. (c) To ensure the proper application of such portion of proceeds from the sale of the 2017 Series A Bonds to be applied to pay the Costs of the Project, there is hereby established the 2017 Project Fund, such fund to be held by the Trustee. Section 52.02. 2017 Project Fund. The monies set aside and placed in the 2017 Project Fund shall be expended for the purpose of paying Costs of the Project, and specifically costs related to the construction or operation of the Riverside SR-91 Corridor Improvement Project authorized in the Expenditure Plan. Before any payment from the 2017 Project Fund shall be made by the Trustee, the Commission shall file or cause to be filed with the Trustee a requisition of the Commission (each a “Requisition”), such Requisition to be signed by an Authorized Representative and to include: (i) the item number of such payment; (ii) the name and address or wire instructions for payment of the person to whom each such payment is due, which may be the Commission in the case of reimbursement for costs theretofore paid by the Commission; (iii) the respective amounts to be paid; (iv) the purpose by general classification for which each obligation to be paid was incurred; and (v) that obligations in the stated amounts have been incurred by the Commission and are presently due and payable and that each item thereof is a proper charge against the 2017 Project Fund and has not been previously paid from said fund. The address or payment instructions of the person to be paid may be by attachment of invoices in the specified amount contained in the Requisition. Section 52.03. 2017 Costs of Issuance Fund. The monies set aside and placed in the 2017 Costs of Issuance Fund shall be expended for the purpose of paying the Costs of Issuance of the 2017 Series A Bonds. Before any payment from the 2017 Costs of Issuance Fund shall be made by the Trustee, the Commission shall file or cause to be filed with the Trustee a requisition of the Commission (each a “Requisition”), such Requisition to be signed by an Authorized Representative and to include: (i) the item number of such payment; (ii) the name and address or wire instructions for payment of the person to whom each such payment is due, which may be the Commission in the case of reimbursement for costs theretofore paid by the Commission; (iii) the respective amounts to be paid; (iv) the purpose by general classification for which each obligation to be paid was incurred; and (v) that obligations in the stated amounts have been incurred by the 121 9 OHSUSA:765987463.8 Commission and are presently due and payable and that each item thereof is a proper charge against the 2017 Costs of Issuance Fund and has not been previously paid from said fund. The address or payment instructions of the person to be paid may be by attachment of invoices in the specified amount contained in the Requisition. On December 1, 2017 any remaining amounts in the 2017 Costs of Issuance Fund shall be transferred to the Revenue Fund and the 2017 Costs of Issuance Fund shall be closed. Section 52.04. I-15 Trust Fund. Prior to transferring any Revenues to the Commission pursuant to Section 5.02(B) the Trustee, to the extent Revenues are available, shall deposit to the I-15 Trust Fund in each month 1/11th of the Commission Initial Loan amount of $3,000,000 until there is on deposit in the I-15 Trust Fund by the date that is three Business Days prior to June 1 in each of the Fiscal Years 2019 through 2024 said amount of $3,000,000. The aggregate amount of the Commission Initial Loan shall not exceed $18,000,000. In addition, for the Commission Backstop Loan amount, the Trustee shall deposit to the I-15 Trust Fund in each month in the Fiscal Years 2025 through 2039, an amount equal to 1/11th of $[3,850,000] until there is on deposit in such fund in such indicated Fiscal Year said amount of $[3,850,000]; provided that the aggregate amount transferred to the I-15 Trust Fund for the Commission Backstop Loan amount shall not exceed $[38,500,000]. Amounts on deposit in the I-15 Trust Fund may only be used to make transfers to the Toll Trustee and may be used by the Toll Trustee for any of the requirements under the Toll Indenture. The Toll Trustee may request that the $3,000,000 (or such lesser amount) be transferred to it on the date that is three Business Days prior to June 1 in each of the Fiscal Years 2019 through 2024 from the I-15 Trust Fund as a Commission Initial Loan payment and the Trustee shall transfer such amount from the funds set aside therefor. At any time in each of the Fiscal Years 2025 through 2039, the Toll Trustee may request a transfer of amounts on deposit in the I-15 Trust Fund related to the Commission Backstop Loan; provided such transfers do not exceed $[3,850,000] in any Fiscal Year or $[38,500,000] in the aggregate. On June 1 of each of the Fiscal Years 2025 through 2038, any amount on deposit in the I-15 Trust Fund in excess of $[3,850,000] will be transferred to the Commission and on June 1, 2039 the I- 15 Trust Fund shall be closed and all funds therein transferred to the Commission. ARTICLE LIII MISCELLANEOUS Section 53.01. Severability. If any covenant, agreement or provision, or any portion thereof, contained in this Seventh Supplemental Indenture, or the application thereof to any person or circumstance, is held to be unconstitutional, invalid or unenforceable, the remainder of this Seventh Supplemental Indenture, and the application of any such covenant, agreement or provision, or portion thereof, to other Persons or circumstances, shall be deemed severable and shall not be affected thereby, and this Seventh Supplemental Indenture and the 2017 Series A Bonds issued pursuant hereto shall remain valid, and the Holders of the 2017 Series A Bonds shall retain all valid rights and benefits accorded to them under this Indenture, the Act, and the Constitution and statutes of the State. Section 53.02. Parties Interested Herein. Nothing in this Seventh Supplemental Indenture expressed or implied is intended or shall be construed to confer upon, or to give to, any person or entity, other than the Commission, the Trustee, each Credit Provider, if any, and the Holders of the 2017 Series A Bonds, any right, remedy or claim under or by reason of this Seventh 122 10 OHSUSA:765987463.8 Supplemental Indenture or any covenant, condition or stipulation hereof; and all the covenants, stipulations, promises and agreements in this Seventh Supplemental Indenture contained by and on behalf of the Commission shall be for the sole and exclusive benefit of the Commission, the Trustee, each Credit Provider, if any, and the Holders of the 2017 Series A Bonds. Section 53.03. Headings Not Binding. The headings in this Seventh Supplemental Indenture are for convenience only and in no way define, limit or describe the scope or intent of any provisions or sections of this Seventh Supplemental Indenture. Section 53.04. Notice Addresses. Except as otherwise provided herein, it shall be sufficient service or giving of notice, request, complaint, demand or other paper if the same shall be duly mailed by registered or certified mail, postage prepaid, addressed to the Notice Address for the appropriate party or parties as provided in Exhibit B hereto. Any such entity by notice given hereunder may designate any different addresses to which subsequent notices, certificates or other communications shall be sent, but no notice directed to any one such entity shall be thereby required to be sent to more than two addresses. Any such communication may also be sent by Electronic Means, receipt of which shall be confirmed. Section 53.05. Notices to Rating Agencies. The Trustee shall provide notice to the Rating Agencies of the following events with respect to the 2017 Series A Bonds: (1) Change in Trustee; (2) Amendments to the Indenture; (3) Provision, Expiration, Termination, substitution or extension of a 2017 Credit Enhancement, if any, or any 2017 Credit Provider thereunder; and (4) Redemption or defeasance of any 2017 Series A Bonds. Section 53.06. Indenture to Remain in Effect. Save and except as amended and supplemented by this Seventh Supplemental Indenture, the Indenture shall remain in full force and effect. Section 53.07. Effective Date of Seventh Supplemental Indenture. This Seventh Supplemental Indenture shall take effect upon its execution and delivery. Section 53.08. Execution in Counterparts. This Seventh Supplemental Indenture 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. 123 S-1 OHSUSA:765987463.8 IN WITNESS WHEREOF, the parties hereto have executed this Seventh Supplemental Indenture by their officers thereunto duly authorized as of the day and year first written above. RIVERSIDE COUNTY TRANSPORTATION COMMISSION By: Executive Director (Seal) ATTEST: Clerk of the Riverside County Transportation Commission APPROVED AS TO FORM: By: General Counsel U.S. BANK NATIONAL ASSOCIATION, as Trustee By: Authorized Officer 124 A-1 OHSUSA:765987463.8 EXHIBIT A FORM OF 2017 SERIES A BOND No. R--__________ $___________ Riverside County Transportation Commission Sales Tax Revenue Bond (Limited Tax Bond) 2017 Series A INTEREST RATE MATURITY ISSUE DATE CUSIP ___% June 1, 20__ ______, 2017 769125 ___ REGISTERED OWNER: Cede & Co. PRINCIPAL AMOUNT: Dollars RIVERSIDE COUNTY TRANSPORTATION COMMISSION, a public entity duly organized and existing under the laws of the State of California (the “Commission”), for value received, hereby promises to pay (but solely from Revenues as hereinafter referred to) in lawful money of the United States of America, to the registered Holder or registered assigns, on the maturity date set forth above, unless redeemed prior thereto as hereinafter provided, the principal amount specified above, together with interest thereon from the Issue Date set forth above until the principal hereof shall have been paid, at the Interest Rate set forth above payable on each June 1 and December 1, commencing December 1, 2017 (each, an “Interest Payment Date”). The principal of and premium, if any, on this Bond are payable to the registered Holder hereof upon presentation and surrender of this Bond at the corporate trust office of U.S. Bank National Association, as trustee (together with any successor as trustee under the hereinafter defined Indenture, the “Trustee”) in St. Paul Minnesota or at such other corporate trust office the Trustee shall designate for presentation of Bonds. Interest on this Bond shall be paid by check drawn upon the Trustee and mailed on the applicable Interest Payment Date to the registered Holder hereof as of the close of business on the Record Date at such registered Holder’s address as it appears on the Bond Register. As used herein, “Record Date” means the fifteenth (15th) day (whether or not a Business Day) of the month preceding the month in which such Interest Payment Date occurs. This Bond is one of a duly authorized issue of bonds of the Commission, designated as “Riverside County Transportation Commission, Sales Tax Revenue Bonds (Limited Tax Bonds)” (the “Bonds”), of the series designated above, all of which are being issued pursuant to the provisions of the Riverside County Transportation Sales Tax Act, Division 25 (Section 240000 et seq.) of the Public Utilities Code of the State of California, as now in effect and as it may from time to time hereafter be amended or supplemented (the “Act”), the Transportation Expenditure Plan and Retail Transaction and Use Tax Ordinance, adopted by the Commission on May 8, 2002 and approved by at least two-thirds of electors voting on such proposition in the November 5, 2002 election and any amendments or extensions thereto, and as authorized pursuant to Article 10 and 125 A-2 OHSUSA:765987463.8 Article 11 of Chapter 3 of Part 1 of Division 2 of Title 5 of the California Government Code (Section 53570 et seq.) and other applicable provisions of the laws of the State of California (collectively, and together with the Act, the “Law”), and an Indenture, dated as of June 1, 2008, as supplemented, including as supplemented by a Seventh Supplemental Indenture, dated as of [July 1, 2017] (the “Seventh Supplemental Indenture”), each between the Commission and the Trustee, hereinafter referred to collectively as the “Indenture.” Said authorized issue of Bonds is not limited in aggregate principal amount and consists or may consist of one or more series of varying denominations, dates, maturities, interest rates and other provisions, as in the Indenture provided. Capitalized terms used herein and not otherwise defined shall have the meaning given such terms in the Indenture. THIS BOND IS A LIMITED TAX BOND OBLIGATION OF THE COMMISSION PAYABLE SOLELY FROM REVENUES AS DEFINED AND PROVIDED IN THE INDENTURE AND CERTAIN OTHER FUNDS PLEDGED UNDER THE INDENTURE AND THE COMMISSION IS NOT OBLIGATED TO PAY THIS BOND EXCEPT FROM REVENUES AND THOSE CERTAIN OTHER FUNDS PLEDGED UNDER THE INDENTURE. THIS BOND DOES NOT CONSTITUTE A DEBT OR LIABILITY OF THE STATE OF CALIFORNIA (THE “STATE”) OR ANY POLITICAL SUBDIVISION OF THE STATE OTHER THAN THE COMMISSION, OR A PLEDGE OF THE FULL FAITH AND CREDIT OF THE STATE OR OF ANY POLITICAL SUBDIVISION OF THE STATE. THE GENERAL FUND OF THE COMMISSION IS NOT LIABLE, AND THE CREDIT OR TAXING POWER (OTHER THAN AS DESCRIBED HEREIN) OF THE COMMISSION IS NOT PLEDGED, FOR THE PAYMENT OF THE BONDS, THEIR INTEREST, OR ANY PREMIUM DUE UPON REDEMPTION OF THE BONDS. THE BONDS ARE NOT SECURED BY A LEGAL OR EQUITABLE PLEDGE OF, OR CHARGE, LIEN OR ENCUMBRANCE UPON, ANY OF THE PROPERTY OF THE COMMISSION OR ANY OF ITS INCOME OR RECEIPTS, EXCEPT THE REVENUES AND CERTAIN OTHER FUNDS PLEDGED UNDER THE INDENTURE. Reference is hereby made to the Indenture and the Law for a description of the terms on which the Bonds are issued and to be issued, the provisions with regard to the nature and extent of the pledge of Revenues and certain other funds and the rights of the registered Holders of the Bonds and all the terms of the Indenture are hereby incorporated herein and constitute a contract between the Commission and the registered Holder from time to time of this Bond, and to all the provisions thereof the registered Holder of this Bond, by its acceptance hereof, consents and agrees. Additional Bonds may be issued and other indebtedness may be incurred on a parity with the Series of Bonds of which this Bond is a part, but only subject to the conditions and limitations contained in the Indenture. This Bond is payable as to both principal and interest, and any premium upon redemption hereof, exclusively from the Revenues and other funds pledged under the Indenture, which consist primarily of the amounts available for distribution to the Commission on and after July 1, 2009 on account of the retail transactions and use tax imposed in the County of Riverside pursuant to the Law, after deducting amounts payable by the Commission to the State Board of Equalization for costs and expenses for its services in connection with the retail transactions and use taxes collected pursuant to the Act, all as provided in the Indenture, and the Commission is not obligated to pay 126 A-3 OHSUSA:765987463.8 the principal of and interest on this Bond except from Revenues and certain other funds pledged thereunder. This Bond shall be deliverable in the form of a fully registered Bond in denominations of $5,000 and any multiple thereof. Optional and Mandatory Redemption Provisions Bonds shall be subject to optional and mandatory redemption as specified in the Indenture. Amendments and Modifications The rights and obligations of the Commission and of the Beneficial Owners, registered Holders of the Bonds may be modified or amended at any time in the manner, to the extent, and upon the terms provided in the Indenture, which provide, in certain circumstances, for modifications and amendments without the consent of or notice to the registered Holders of Bonds. Transfer and Exchange Provisions This Bond is transferable or exchangeable as provided in the Indenture, only upon the bond registration books maintained by the Trustee, by the registered Holder hereof, or by his or her duly authorized attorney, upon surrender of this Bond at the Principal Office of the Trustee, together with a written instrument of transfer satisfactory to the Trustee duly executed by the registered Holder or his or her duly authorized attorney, and thereupon a new Bond or Bonds of the same series, maturity and in the same aggregate principal amount, shall be issued to the transferee in exchange therefor as provided in the Indenture, upon payment of any charges therein prescribed. Persons Deemed Holders The person in whose name this Bond is registered shall be deemed and regarded as the absolute Holder hereof for all purposes, including receiving payment of, or on account of, the principal and any redemption premium and interest due hereon. It is hereby certified and recited that any and all acts, conditions and things required to exist, to happen and to be performed, precedent to and in the incurring of the indebtedness evidenced by this Bond, and in the issuing of this Bond, exist, have happened and have been performed in due time, form and manner, as required by the Constitution and statutes of the State of California and the Act, and that this Bond, together with all other indebtedness of the Commission payable out of Revenues, is within every debt and other limit prescribed by the Constitution and statutes of the State of California and the Law. 127 A-4 OHSUSA:765987463.8 This Bond shall not be entitled to any benefit under the Indenture, or become valid or obligatory for any purpose, until the certificate of authentication hereon endorsed shall have been manually signed by the Trustee. IN WITNESS WHEREOF the Riverside County Transportation Commission has caused this Bond to be executed in its name and on its behalf by the manual or facsimile signature of its duly authorized representatives and its seal to be affixed hereto all as of the Issue Date set forth above. RIVERSIDE COUNTY TRANSPORTATION COMMISSION By: Chair of the Board of Commissioners (Seal) Attest: Auditor-Controller [FORM OF CERTIFICATE OF AUTHENTICATION] This Bond is one of the 2017 Series A Bonds described in the within mentioned Indenture and was authenticated on the date set forth below. Date of Authentication: _________________________ [U.S. BANK NATIONAL ASSOCIATION], as Trustee By: Authorized Officer 128 A-5 OHSUSA:765987463.8 [DTC LEGEND] Unless this Bond is presented by an authorized representative of The Depository Trust Company to the issuer or its agent for registration of transfer, exchange or payment, and any Bond issued 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 since the registered Owner hereof, Cede & Co., has an interest herein. [FORM OF ASSIGNMENT] FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto (Please Print or Type Name and Address of Assignee) PLEASE INSERT SOCIAL SECURITY OR OTHER TAX IDENTIFICATION NUMBER OF ASSIGNEE the within bond and all rights thereunder, and hereby irrevocably constitutes and appoints to transfer the within Bond on the books kept for registration thereof with full power of substitution in the premises. Dated: Signature: (Signature of Assignor) Notice: The signature on this assignment must correspond with the name of the registered Holder as it appears upon the face of the within Bond in every particular without alteration or enlargement or any change whatsoever. SIGNATURE GUARANTEED: Notice: Signature must be guaranteed by an eligible guarantor firm. 129 INDEX TO EXHIBITS B-1 OHSUSA:765987463.8 EXHIBIT B NOTICE ADDRESSES To the Commission: To the Rating Agencies: Riverside County Transportation Commission Standard & Poor’s Ratings Services Street Address: 55 Water Street, 38th Floor 4080 Lemon Street, 3rd Floor New York, New York 10041 Riverside, California 92501 Telephone: (212) 438-2000 Mailing Address: Fax: (212) 438-2157 P.O. Box 12008 Riverside, California 92502 Fitch Ratings Attention: Chief Financial Officer One State Street Plaza Telephone: (951) 787-7926 New York, New York 10004 Fax: (951) 787-7920 Telephone: (212) 908-0500 Fax: (212) 480-4421 To the Trustee: U.S. Bank National Association 633 West Fifth Street, 24th Floor Los Angeles, California 90071 Attention: Corporate Trust Division Telephone: (213) 615-6023 Fax: (213) 615-6197 130 ATTACHMENT 4 36646681.2 CONTINUING DISCLOSURE AGREEMENT by and between RIVERSIDE COUNTY TRANSPORTATION COMMISSION and DIGITAL ASSURANCE CERTIFICATION, L.L.C., as Dissemination Agent Dated as of July 1, 2017 Relating to $___________ RIVERSIDE COUNTY TRANSPORTATION COMMISSION Sales Tax Revenue Bonds (Limited Tax Bonds) 2017 Series A 131 36646681.2 1 CONTINUING DISCLOSURE AGREEMENT THIS CONTINUING DISCLOSURE AGREEMENT (this “Disclosure Agreement”), dated as of July 1, 2017, is by and between the RIVERSIDE COUNTY TRANSPORTATION COMMISSION, a public entity duly established and existing under the laws of the State of California (the “Commission”), and DIGITAL ASSURANCE CERTIFICATION, L.L.C., as Dissemination Agent (the “Dissemination Agent”). WITNESSETH: WHEREAS, the Commission has issued $_________ Riverside County Transportation Commission Sales Tax Revenue Bonds (Limited Tax Bonds) 2017 Series A (the “2017 Bonds”) pursuant to an Indenture, dated as of June 1, 2008, between the Commission and U.S. Bank National Association, as trustee (the “Trustee”), as supplemented, including as supplemented by a Seventh Supplemental Indenture, dated as of July 1, 2017, between the Commission and the Trustee (collectively, the “Indenture”); and WHEREAS, this Disclosure Agreement is being executed and delivered by the Commission and the Dissemination Agent for the benefit of the owners and beneficial owners of the 2017 Bonds and in order to assist the underwriters of the 2017 Bonds 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. Purpose of the Disclosure Agreement. This Disclosure Agreement is being executed and delivered by the Commission and the Dissemination Agent for the benefit of the Holders and Beneficial Owners of the 2017 Bonds and in order to assist the Participating Underwriters in complying with SEC Rule 15c2-12. Section 2. Definitions. Capitalized undefined terms used herein shall have the meanings ascribed thereto in the Indenture. In addition, the following capitalized terms shall have the following meanings: “Annual Report” means any Annual Report provided by the Commission pursuant to, and as described in, Sections 3 and 4 of this Disclosure Agreement. “Disclosure Representative” means the Chief Financial Officer of the Commission, or such other officer or employee of the Commission as the Executive Director of the Commission or the Chief Financial Officer of the Commission 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 Commission, or any successor thereto selected by the Commission. The initial Dissemination Agent shall be Digital Assurance Certification, L.L.C. 132 36646681.2 2 “EMMA” shall mean the Municipal Securities Rulemaking Board’s Electronic Municipal Market Access System for Municipal Securities disclosures, maintained on the internet at http://emma.msrb.org. “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 Commission, 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 5 hereof. “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 the EMMA website of the MSRB, currently located at http://emma.msrb.org. “Official Statement” means the Official Statement, dated ____________, 2017, relating to the 2017 Bonds. “Participating Underwriters” means the underwriters of the 2017 Bonds required to comply with the Rule in connection with the offering of the 2017 Bonds. “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 may be amended from time to time. “SEC” means the Securities and Exchange Commission. Section 3. Provision of Annual Reports. (a) So long as any 2017 Bonds remain outstanding pursuant to the Indenture, the Commission shall, or shall cause the Dissemination Agent to, not later than nine (9) months after the end of each Fiscal Year, commencing with the report for the 2016-17 Fiscal Year, provide to the MSRB, through EMMA, an Annual Report which is consistent with the requirements of Section 4 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 4 of this Disclosure Agreement; provided, that the audited financial statements of the Commission may be submitted separately from the balance of the Annual Report and later than the date required above for the filing of the Annual Report if they are not available by that date. If the Fiscal Year changes for the Commission, the Commission shall give notice of such change in the manner provided under Section 5(e) hereof. 133 36646681.2 3 (b) Not later than two (2) Business Days prior to the date specified in subsection (a) for providing the Annual Report to each Repository, the Commission shall provide the Annual Report to the Dissemination Agent. If by such date, the Dissemination Agent has not received a copy of the Annual Report from the Commission, the Dissemination Agent shall contact the Commission to determine if the Commission is in compliance with the first sentence of subsection (a). (c) If the Dissemination Agent is unable to verify that an Annual Report of the Commission has been provided to each Repository by the date required in subsection (a), the Dissemination Agent shall send a notice to each Repository in substantially the form attached hereto as Exhibit A. (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) to the extent known to the Dissemination Agent file a report with the Commission and (if the Dissemination Agent is not the Trustee) the Trustee certifying that the Annual Report has been provided pursuant to this Disclosure Agreement, and stating the date it was provided. Section 4. Content of Annual Reports. The Commission’s Annual Report shall contain or include by reference the following: (a) The audited financial statements of the Commission for the prior Fiscal Year, 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 Commission’s audited financial statements are not available by the time the Annual Report is required to be filed pursuant to Section 3(a), the Annual Report shall contain unaudited financial statements in a format similar to the financial statements contained in the final Official Statement, and the audited financial statements shall be filed in the same manner as the Annual Report when they become available. (b) The debt service schedule for the 2017 Bonds, if there have been any unscheduled redemptions, retirements or defeasances, and the debt service on any additional parity bonds issued, in each case during the prior Fiscal Year. (c) The actual Sales Tax Revenues for the prior Fiscal Year consistent with the information concerning Sales Tax Revenues set forth in the Official Statement under the caption “THE SALES TAX,” including but not limited to an update of the table entitled “Historical Sales Tax Revenues” set forth in the Official Statement under the caption “THE SALES TAX – Historical Sales Tax Revenues.” 134 36646681.2 4 Any or all of the items listed above may be included by specific reference to other documents, including official statements of debt issues of the Commission or public entities related thereto, which have been submitted to each Repository or the Securities and Exchange Commission. If the document included by reference is a final official statement, it must be available from the MSRB. The Commission shall clearly identify each such other document so included by reference. The contents, presentation and format of the Annual Reports may be modified from time to time as determined in the judgment of the Commission to conform to changes in accounting or disclosure principles or practices and legal requirements followed by or applicable to the Commission or to reflect changes in the business, structure, operations, legal form of the Commission or any mergers, consolidations, acquisitions or dispositions made by or affecting the Commission; provided that any such modifications shall comply with the requirements of the Rule. Section 5. Reporting of Significant Events. (a) Pursuant to the provisions of this Section 5, the Commission shall give, or cause to be given, notice of the occurrence of any of the following events with respect to the 2017 Bonds, 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; (4) rating changes; (5) adverse tax opinions or the issuance by the Internal Revenue Service of proposed or final determinations of taxability or Notices of Proposed Issue (IRS Form 5701-TEB); (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 Commission 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 Commission, or if 135 36646681.2 5 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 Commission. (b) Pursuant to the provisions of this Section 5, the Commission shall give, or cause to be given, notice of the occurrence of any of the following events with respect to the 2017 Bonds, if material: (1) the consummation of a merger, consolidation or acquisition involving the Commission or the sale of all or substantially all of the assets of the Commission, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions; (2) appointment of a successor or additional Trustee or the change of the name of a Trustee; (3) non-payment related defaults; (4) modifications to the rights of Holders; (5) bond calls; (6) release, substitution or sale of property securing repayment of the 2017 Bonds; or (7) in addition to the adverse tax opinions or determinations of taxability described in Section 5(a)(5) above, any other notices or determinations with respect to the tax status of the 2017 Bonds, or other events affecting the tax status of the 2017 Bonds. (c) Whenever the Commission obtains knowledge of the occurrence of a Listed Event, described in subsection (b) of this Section 5, the Commission shall as soon as possible determine if such event would be material under applicable federal securities law. (d) If the Commission determines that knowledge of the occurrence of a Listed Event described in subsection (b) of this Section 5 would be material under applicable federal securities law, the Commission shall promptly notify the Dissemination Agent in writing and instruct the Dissemination Agent to report the occurrence to the MSRB in a timely manner not more than ten (10) Business Days after the event. 136 36646681.2 6 (e) If the Dissemination Agent has been instructed by the Commission to report the occurrence of a Listed Event, the Dissemination Agent shall file a notice of such occurrence with the MSRB. Section 6. Filings 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 7. Termination of Reporting Obligation. The Commission’s obligations under this Disclosure Agreement shall terminate upon the legal defeasance or payment in full of all of the 2017 Bonds. If such termination occurs prior to the final maturity of the 2017 Bonds, the Commission shall give notice of such termination in the same manner as for a Listed Event under Section 5. Section 8. Dissemination Agent. The Commission 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 shall be the Dissemination Agent; provided, it shall receive written notice of such designation at the time of such designation. Section 9. Amendment; Waiver. Notwithstanding any other provision of this Disclosure Agreement, the Commission 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 Commission 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 10. Additional Information. Nothing in this Disclosure Agreement shall be deemed to prevent the Commission 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 or notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure Agreement. Section 11. Default. In the event of a failure of the Commission or the Dissemination Agent to comply with any provision of this Disclosure Agreement, the Trustee shall, at the written request of any Participating Underwriter or of the Holders of at least twenty-five percent (25%) of the aggregate principal amount of the 2017 Bonds then Outstanding (but only to the extent funds in an amount satisfactory to the Trustee have been provided to it or it has been otherwise indemnified to its satisfaction from any cost, liability, expense or additional charges and fees of the Trustee whatsoever, including, without limitation, reasonable fees and expenses of its attorneys), or any Holder or beneficial owner of the 2017 Bonds may, take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court 137 36646681.2 7 order, to cause the Commission 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 Indenture, and the sole remedy under this Disclosure Agreement in the event of any failure of the Commission or the Dissemination Agent to comply with this Disclosure Agreement shall be an action to compel performance. Section 12. Duties, Immunities and Liabilities of Dissemination Agent. The Dissemination Agent shall not be responsible for the form or content of any notice of Listed Event. The Dissemination Agent shall receive reasonable compensation for its services provided under this Disclosure Agreement. The Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Agreement, and the Commission 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 attorneys 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 Commission under this Section shall survive resignation or removal of the Dissemination Agent and payment of the 2017 Bonds. Section 13. Notices. Any notices or communications to or among any of the parties to the Disclosure Agreement or the Trustee may be given as follows: To the Commission: Riverside County Transportation Commission 4080 Lemon Street, 3rd Floor Riverside, California 92501 Tel: (951) 787-7926 Fax: (951) 787-7920 Mail: P.O. Box 12008 Riverside, California 92502 To the Dissemination Agent: Digital Assurance Certification, L.L.C. 315 E. Robinson Street, Suite 300 Orlando, Florida 32801 Tel: (407) 515-1100 Fax: (407) 515-6513 To the Trustee: U.S. Bank National Association 633 West Fifth Street, 24th Floor Los Angeles, California 90071 Attention: Corporate Trust Division Tel: (213) 615-6023 Fax: (213) 615-6197 Any person may, by written notice to the other persons listed above, designate a different address or telephone number(s) to which subsequent notices or communications should be sent. Any notice or communication may also be sent by electronic mail, receipt of which shall be confirmed. 138 36646681.2 8 Section 14. Beneficiaries. This Disclosure Agreement shall inure solely to the benefit of the Commission, the Dissemination Agent, the Participating Underwriters and holders and beneficial owners from time to time of the 2017 Bonds, and shall create no rights in any other person or entity. Section 15. 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. IN WITNESS WHEREOF, the parties hereto have executed this Disclosure Agreement as of the date first above written. RIVERSIDE COUNTY TRANSPORTATION COMMISSION By: Theresia Trevino Chief Financial Officer DIGITAL ASSURANCE CERTIFICATION, L.L.C., as Dissemination Agent By: Authorized Representative 139 36646681.2 A-1 EXHIBIT A NOTICE TO REPOSITORIES OF FAILURE TO FILE ANNUAL REPORT Name of Issuer: Riverside County Transportation Commission (the “Commission”) Name of Issue: $___________ Riverside County Transportation Commission Sales Tax Revenue Bonds (Limited Tax Bonds) 2017 Series A Date of Issuance: __________, 2017 NOTICE IS HEREBY GIVEN that the Commission has not provided an Annual Report with respect to the above-named Bonds as required by this Continuing Disclosure Agreement dated as of July 1, 2017, between the Commission and the Dissemination Agent. The Commission anticipates that the Annual Report will be filed by _____________. Dated: ______, 20__ DIGITAL ASSURANCE CERTIFICATION, L.L.C., as Dissemination Agent, on behalf of the Commission cc: Riverside County Transportation Commission 140 DOCSOC/1807350v4/200313-0018 $_____________ RIVERSIDE COUNTY TRANSPORTATION COMMISSION SALES TAX REVENUE BONDS (LIMITED TAX BONDS) 2017 SERIES A BOND PURCHASE AGREEMENT _________ __, 2017 Riverside County Transportation Commission P.O. Box 12008 Riverside, California 92502 Ladies and Gentlemen: The undersigned, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Goldman, Sachs & Co., as representatives (the “Representatives”), acting on behalf of themselves and the underwriters listed in Exhibit A hereto, (collectively, the “Underwriters”), offers to enter into this Bond Purchase Agreement (the “Purchase Agreement”) with the Riverside County Transportation Commission (the “Commission”), for the purchase by the Underwriters of the Sales Tax Revenue Bonds (Limited Tax Bonds), 2017 Series A (the “Bonds”), to be issued by the Commission and authenticated by U.S. Bank National Association, a national banking association, located in Los Angeles, California, as trustee (the “Trustee”) under that certain Indenture, dated as of June 1, 2008 between the Commission and the Trustee (the “Original Indenture”), as supplemented, including as supplemented by the Seventh Supplemental Indenture, dated as of July 1, 2017 (the “Seventh Supplemental Indenture”). The Original Indenture as supplemented is collectively referred to herein as the “Indenture.” The offer made hereby is subject to its written acceptance by the Commission, and delivery of an executed counterpart of this Purchase Agreement to us at or before 11:59 p.m., California Time, on the date hereof, and, if not so accepted, will be subject to withdrawal by the Underwriters upon notice from the Representatives delivered to the Commission’s Executive Director or Chief Financial Officer at any time before acceptance. Upon acceptance, this Purchase Agreement shall be in full force and effect in accordance with its terms and shall be binding upon the Commission and the Underwriters. All capitalized terms used herein and not otherwise defined shall have the meanings given to such terms in the Indenture. The proceeds of the Bonds will be used to (i) pay a portion of the costs of the I-15 Express Lanes Project, (ii) pay a portion of the costs for the Riverside SR-91 Corridor Improvement Project, (iii) retire all or a portion of the outstanding Notes, and (iv) pay the costs of issuance of the 2017 Bonds, all as defined in and more particularly described in the Official Statement. In order to finance additional costs of the Project, concurrently with the issuance of the Bonds, the Commission intends to enter into the TIFIA Loan Agreement (as defined in the Official Statement), pursuant to which the Commission may borrow up to $____________ for costs of the Project. In order to assist the Underwriters in complying with Rule 15c2-12 (as hereinafter defined), the Commission will undertake, pursuant to the Indenture and a Continuing Disclosure Agreement ATTACHMENT 5 141 2 DOCSOC/1807350v4/200313-0018 with Digital Assurance Certification L.L.C. dated as of July 1, 2017 (the “Continuing Disclosure Agreement”), to provide certain annual financial information and notices of the occurrence of certain specified events. A description of this undertaking is set forth in, and a form of such agreement is attached as an appendix to, the Preliminary Official Statement and the Official Statement. 1. On the basis of the representations, warranties and covenants and upon the terms and conditions set forth in this Purchase Agreement, the Underwriters hereby agree to purchase and the Commission hereby agrees to issue and cause the Trustee to authenticate and deliver to the Underwriters all (but not less than all) of the Bonds in the aggregate principal amount of $__________. The Bonds shall be dated the Closing Date. The Underwriters agree to purchase the Bonds at the aggregate purchase price of $___________ (consisting of the aggregate principal amount of the Bonds, plus original issue premium of $_________ and less $___________ Underwriters’ discount). The Bonds mature in the years and principal amounts and bear interest at the rates set forth in Exhibit B hereto, shall be subject to redemption as set forth in Exhibit C hereto and shall be substantially in the form described in the Indenture, and shall be issued and secured under the provisions of and shall be payable and subject to redemption as provided in the Indenture. The Bonds shall be special limited obligations of the Commission payable from Revenues. The Sales Tax Revenues of the Commission are pledged to the payment of the principal of, interest and premium, if any, on the Bonds as provided in the Indenture. 2. The Underwriters have designated the undersigned as their Representatives. The undersigned represent that they have been duly authorized by the Underwriters to execute this Purchase Agreement. The Underwriters agree to make an initial public offering of all of the Bonds, at a price not in excess of the initial public offering prices set forth on the cover page of the Official Statement; provided, however, the Underwriters reserve the right subsequent to the initial public offering to change such initial public offering prices as the Underwriters deem necessary or desirable, in their sole discretion, in connection with the marketing of the Bonds, and may offer and sell the bonds to certain dealers, unit investment trusts and money market funds, certain of which may be sponsored or managed by one or more of the Underwriters at prices lower than the initial public offering prices or yields greater than the yields set forth in the Official Statement. The Representatives shall provide to the Issuer a certificate setting forth the offering prices of the Bonds in substantially the form set forth on Exhibit D. 3. The Commission has delivered or caused to be delivered to the Underwriters prior to the execution of this Purchase Agreement, copies of the Preliminary Official Statement dated ________ __, 2017 relating to the Bonds (the “Preliminary Official Statement”). The Commission ratifies, confirms and approves the use and distribution by the Underwriters of the Preliminary Official Statement, in connection with the sale of the Bonds. It is acknowledged by the Commission that the Underwriters may deliver the Preliminary Official Statement and a final Official Statement (as hereinafter defined) electronically over the internet and in printed paper form. For purposes of this Purchase Agreement, the printed paper form of the Preliminary Official Statement and the Official Statement are deemed controlling. The Commission deems such Preliminary Official Statement final as of its date for purposes of Rule 15c2-12 under the Securities Exchange Act of 1934 (“Rule 15c2- 12”) except for information allowed to be omitted by Rule 15c2-12. Within seven (7) business days from the date hereof and in any event not less than two days prior to the date of Closing (as defined below), the Commission shall deliver to the Underwriters a final Official Statement, executed on behalf of the Commission by an authorized representative of the Commission and dated the date hereof, which shall be in the form of the Preliminary Official Statement with only those changes necessary to reflect 142 3 DOCSOC/1807350v4/200313-0018 information permitted to be omitted by paragraph (b)(1) of Rule 15c2-12, and such other amendments or supplements as shall have been approved by the Commission and the Underwriters and such additional conformed copies thereof in “designated electronic format” (as defined in MSRB Rule G- 32), as the Underwriters may reasonably request in sufficient quantities to comply with Rule 15c2-12 and to meet potential customer requests for copies of the Official Statement. The Official Statement, including the cover page, the appendices thereto and all information incorporated therein by reference is hereinafter referred collectively to as the “Official Statement.” The Representatives agree to (1) provide the Commission with final pricing information on the Bonds on a timely basis, (2) disseminate to the Underwriters copies of the final Official Statement, including any supplements prepared by the Commission, and (3) promptly file a copy of the final Official Statement, including any supplements prepared by the Commission, with the Municipal Securities Rulemaking Board. 4. The Closing. At 9:00 a.m., California time, on _______ __, 2017, or at such other time or on such other date as the Commission and the Representative may agree (the “Closing Date”), the Commission, following the receipt by the Trustee of the purchase price from the Underwriters, shall deliver, or cause to be delivered, the Bonds in book-entry form through the Trustee via the F.A.S.T. delivery book-entry system of The Depository Trust Company (“DTC”) to the Underwriters. The Representatives, on behalf of the Underwriters, will pay the aggregate purchase price set forth in paragraph 1 hereof, in immediately available funds to or on the order of the Commission and accept such delivery. Concurrently with the delivery of the Bonds to the Underwriters, the Commission will deliver the documents hereinafter mentioned at the offices of Orrick, Herrington & Sutcliffe LLP, San Francisco, California (“Bond Counsel”) or another place to be mutually agreed upon by the Commission and the Representatives. This payment for and delivery of the Bonds, together with the delivery of the aforementioned documents, is herein called the “Closing.” The obligation of the Underwriters to pay for and accept delivery of the Bonds, and the obligation of the Commission to deliver the Bonds, shall each be contingent on the condition that the TIFIA Agreement shall have been executed by the Commission and shall be in full force and effect. 5. Representations, Warranties and Covenants. The Commission represents, warrants and covenants to the Underwriters (and it shall be a condition of the obligation of the Underwriters to purchase and accept delivery of the Bonds) that the representations and warranties contained herein shall be true and correct on the date hereof and at the Closing Date, as if made on and at the Closing. The Commission so represents and warrants that: (a) the Commission is, and will be on the date of Closing, a county transportation commission organized and existing under the laws of the State, with full legal right, power and authority to cause the execution, sale and delivery of the Bonds, to execute, deliver and perform its obligations under this Purchase Agreement, the Continuing Disclosure Agreement and the Indenture (collectively, the “Commission’s Documents”) and to carry out and consummate all other transactions contemplated by each of the aforesaid and to execute and deliver the Official Statement; (b) by all necessary official action, the Commission has duly adopted Ordinance No. 02-001, imposing the Sales Tax, which was approved by at least two-thirds of the electors in the County voting on the Sales Tax on November 5, 2002 (“Ordinance No. 02-001”), and Ordinance No. 10-002, providing that the aggregate principal amount of bonds or other evidences of indebtedness issued by the Commission and payable from Sales Tax Revenues in accordance with Ordinance No. 02-001 at any one time outstanding shall not exceed $975 million (collectively, the “Ordinance”); 143 4 DOCSOC/1807350v4/200313-0018 (c) (i) the Preliminary Official Statement, excluding therefrom the information under the caption “UNDERWRITING” and information concerning DTC and the book-entry system and information permitted to be omitted from the Preliminary Official Statement under Rule 15c2-12 (collectively, the “POS Excluded Information”) as to which no representation or warranties are made did not as of its date contain any untrue statement of a material fact, or omit to state a material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading; and (ii) the Preliminary Official Statement, excluding therefrom the POS Excluded Information, does not as of the date of this Purchase Agreement contain any untrue statement of a material fact, or omit to state a material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading; (d) the Official Statement (excluding therefrom the information under the caption “UNDERWRITING,” reoffering prices and yields and information concerning DTC and the book-entry system (the “OS Excluded Information”) as to which no representations or warranties are made), in the form delivered to the Underwriters, does not, as of the date delivered to the Underwriters, and will not at the time of Closing (if supplemented or amended prior to the Closing, then as so supplemented or amended), contain any untrue statement of a material fact, or omit to state a material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading; (e) when delivered to and paid for by the Underwriters on the Closing Date in accordance with the provisions of this Purchase Agreement, the Bonds will have been duly authorized, executed and delivered and will constitute valid and binding limited obligations of the Commission in conformity with and entitled to the benefit and security of the Indenture, except as enforcement of such obligations may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws or equitable principles relating to or limiting creditors rights generally, the application of equitable principles, the exercise of judicial discretion and the limitations on legal remedies against public entities in the State of California; (f) the Commission, by all necessary official action prior to or concurrently with the acceptance hereof, has duly authorized the execution and delivery of the Commission’s Documents and the Official Statement, and the Commission’s Documents, when executed and delivered, assuming due authorization, execution and delivery by the other parties thereto, will constitute the legally valid and binding obligations of the Commission enforceable in accordance with their terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws or equitable principles relating to or affecting creditors’ rights generally, the exercise of judicial discretion and the limitations on legal remedies against public entities in the State; (g) the Commission is not in breach of or default under any applicable law or administrative regulation of the State of California or the United States of America or any applicable judgment, decree, resolution, contract or other instrument or any agreement to which the Commission is a party or is otherwise subject the breach of which would materially affect its ability to perform its obligations under the Commission’s Documents, and the execution and delivery of the Bonds and the Commission’s Documents and compliance with the provisions thereof will not in any material respect conflict with or constitute a material breach of or default under any applicable law, regulation, decree, writ, order or injunction or any agreement, resolution, contract or other instrument or any agreement to which the Commission is subject and which is material to the Commission’s ability to perform its obligations under the Commission’s Documents, nor will such execution, delivery and compliance result in the creation or imposition of any lien, charge or other security interest or encumbrance of any 144 5 DOCSOC/1807350v4/200313-0018 nature whatsoever upon any of the properties or assets of the Commission under the terms of any such law, administrative regulation, judgment, decree, loan agreement, indenture, bond, note, resolution, agreement or other instrument, except as provided in the Indenture; (h) at the Closing, the Commission will be in compliance in all respects with the covenants and agreements contained in the Commission’s Documents, and no event of default and no event which, with the lapse of time or giving of notice, or both, would constitute an event of default thereunder shall have occurred and be continuing; (i) no action, suit, proceeding, inquiry or investigation at law or in equity before or by any court, government agency, public board or body of competent jurisdiction, is pending or, to the best of the Commission’s knowledge, threatened against the Commission: (i) in any way affecting the existence of the Commission or in any way challenging the respective powers of the several offices or the titles of the officials of the Commission to such offices; or (ii) affecting or seeking to prohibit, restrain or enjoin the issuance, sale or delivery of any of the Bonds, the application of the proceeds of the sale of the Bonds, the proceedings authorizing and approving the Sales Tax, the levy or collection of the Sales Tax, or in any way contesting or affecting, as to the Commission, the validity or enforceability of the Act, the proceedings authorizing the Sales Tax, Resolution No. 17-006 of the Commission adopted on [May 10], 2017 (the “Resolution”), the Ordinance, the Bonds or the Commission’s Documents or contesting the powers of the Commission or its authority with respect to issuance or delivery of the Bonds or the execution and delivery of the Commission’s Documents or contesting the power or authority to levy the Sales Tax or contesting the completeness or accuracy of the Preliminary Official Statement or the Official Statement, or in any way contesting or challenging the consummation of the transactions contemplated hereby or thereby or which might materially adversely affect the ability of the Commission to perform and satisfy its obligations under the Commission’s Documents or the Bonds; nor to the best of the Commission’s knowledge is there any basis for any such action, suit, proceeding, inquiry or investigation, wherein an unfavorable decision, ruling or finding would materially adversely affect the Act, the proceedings authorizing the Sales Tax or the Commission’s Documents or the performance by the Commission of its obligations thereunder, or the authorization, execution, delivery or performance by the Commission of the Bonds or the Commission’s Documents; (j) the Commission will furnish such information, execute such instruments and take such other action not inconsistent with law in cooperation with the Underwriters which the Underwriters may reasonably request in order (i) to qualify the Bonds for offer and sale under the Blue Sky or other securities laws and regulations of such states and other jurisdictions of the United States as the Underwriters may designate; and (ii) to determine the eligibility of the Bonds for investment under the laws of such states and other jurisdictions, and will continue to take such action so long as required for distribution of the Bonds; provided, however, that in no event shall the Commission be required to take any action which would subject it to service of process in any jurisdiction in which it is not now so subject or be required to register as a dealer or broker or qualify to do business as a foreign corporation or be subject to any other similar requirements deemed by the Commission to be unduly burdensome; (k) all approvals, consents and orders of any governmental authority or agency having jurisdiction in the matters which would constitute a condition precedent to the due performance by the Commission of its obligations under the Commission’s Documents and the Bonds have been duly obtained or made, and are, and will be on the date of Closing, in full force and effect; 145 6 DOCSOC/1807350v4/200313-0018 (l) if, subsequent to the date hereof, and prior to the Closing, an event occurs, or information becomes known, affecting the Commission which is materially adverse and which might cause the information in the Official Statement, as then supplemented or amended, to contain an untrue statement of material fact or omit to state a material fact necessary to make the statements made therein, in the light of circumstances under which they were made, not misleading, the Commission shall notify the Representatives thereof, and if in the opinion of the Representatives such event requires a supplement or amendment to the Official Statement, the Commission will supplement or amend the Official Statement in a form and manner approved by the Representatives; (m) for a period of 25 days subsequent to the Closing Date (the “Delivery Period”), if an event occurs which might or would cause the Official Statement, as then supplemented or amended, to contain any untrue statement of a material fact, or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, the Commission shall promptly notify the Representatives thereof and if, in the opinion of the Representatives, such event requires the preparation and publication of a supplement or amendment to the Official Statement, the Commission shall prepare and deliver to the Underwriters (at the Commission’s expense for 25 days from the date of the Closing), as many copies of an amendment or supplement which will correct such statement or omission as the Underwriters may reasonably request. During the Delivery Period, the Commission shall furnish such information as the Representatives may from time to time reasonably request; (n) if the Official Statement is amended or supplemented pursuant to paragraph 5(l) hereof, at the time of each supplement or amendment thereto and (unless subsequently again supplemented or amended pursuant to such paragraph) at all times subsequent thereto up to and including the Closing Date, the Official Statement as so supplemented or amended (excluding therefrom the OS Excluded Information, as to which no representations or warranties are made) will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; (o) between the date of this Purchase Agreement and the date of Closing, [[except for the issuances of commercial paper under the Commission’s existing commercial paper program,]] the Commission will not, without the prior written consent of the Representatives, except as disclosed in the Preliminary Official Statement and the Official Statement and except in the course of normal business operations of the Commission, offer or issue any bonds, notes or other obligations for borrowed money, or incur any material liabilities, direct or contingent. (p) during the last five years, the Commission has not failed to comply in all material respects with any previous undertaking relating to continuing disclosure of information pursuant to Rule 15c2-12; (q) the financial statements of the Commission as of June 30, 2016 fairly represent the revenues, expenditures, assets, liabilities and fund balances of such amounts and, insofar as presented, other funds of the Commission as of the dates and for the periods therein set forth. Except as disclosed in the Official Statement or otherwise disclosed in writing to the Representatives, there has not been any materially adverse change in the financial condition of the Commission or in its operations since June 30, 2016 and there has been no occurrence, circumstance or combination thereof which is reasonably expected to result in any such materially adverse change; and 146 7 DOCSOC/1807350v4/200313-0018 (r) any certificates executed by any officer of the Commission and delivered to the Underwriters pursuant hereto shall be deemed a representation and warranty of the Issuer as to the accuracy of the statements therein made. 6. The Representatives, on behalf of themselves and the Underwriters, have entered into this Purchase Agreement in reliance upon the representations and warranties of the Commission contained herein and the representations and warranties to be contained in the documents and instruments to be delivered at the Closing and upon the performance by the Commission of its obligations both on and as of the date hereof and as of the Closing Date. Accordingly, the Underwriters’ obligations under this Purchase Agreement to purchase, to accept delivery of and to pay for the Bonds shall be subject, at the sole option of the Representatives, to the accuracy in all material respects of the representations and warranties of the Commission contained herein as of the date hereof and as of the Closing Date, to the accuracy of the statements of the officers and other officials of the Commission made in any certificate or other document furnished pursuant to the provisions hereof, to the performance by the Commission of its obligations to be performed hereunder and under such documents and instruments at or prior to the Closing Date, and to the following additional conditions: (a) Prior to the Closing, the Commission’s Documents shall have been duly authorized, executed and delivered and simultaneously with Closing the Bonds shall have been duly authorized, executed and delivered and none of such documents shall have been amended, modified or repealed, except to the extent to which the Representatives has given their written consent; (b) At the time of Closing, all official action of the Commission related to the Commission’s Documents, and the sale of the Bonds, shall be in full force and effect and shall not have been amended, modified, supplemented or repealed in any material respect; (c) At the time of Closing, the Commission shall have made timely payment of principal and/or interest when due on all of its respective outstanding bonds, notes or other obligations; (d) As of the date hereof and at Closing, trading of securities in general shall not have been suspended on any national securities exchange; nor shall any proceeding be pending or threatened by the Securities and Exchange Commission against the Commission; (e) Subsequent to the date hereof, up to and including the Closing, there shall not have occurred any change in or particularly affecting the Commission, the Act, the Ordinance, the Sales Tax, the Sales Tax Revenues, the Bonds or the Commission’s Documents as the foregoing matters are described in the Official Statement, which in the reasonable professional judgment of the Underwriters materially impairs the investment quality of the Bonds; (f) Subsequent to the date hereof, up to and including the Closing, the California State Board of Equalization (“BOE”) shall not have suspended or advised the Commission of suspension of the collection of the Sales Tax or the escrow of any proceeds thereof by the BOE, and counsel to the Commission shall not have been advised of the suspension of the collection of the Sales Tax or the escrow of any proceeds thereof by the BOE or have BOE question the validity of the Sales Tax; (g) The Commission shall perform, or have performed at or prior to the time of the Closing, all of its obligations required under or specified in the Commission’s Documents, as amended to the date of Closing, to be performed at or prior to the Closing; 147 8 DOCSOC/1807350v4/200313-0018 (h) The TIFIA Agreement shall have been executed by the Commission and in full force and effect; (i) At or prior to the Closing, the Underwriters shall receive, among other items, the following, in each case reasonably satisfactory in form and substance to the Representatives and Underwriters’ Counsel: (i) Executed copies of each of the Commission’s Documents and specimen copies of the Bonds; (ii) The approving opinion of Bond Counsel, substantially in the form attached to the Official Statement as Appendix F; (iii) A supplemental opinion of Bond Counsel, addressed to the Underwriters, stating the Underwriters may rely upon the opinion referred to in subparagraph (ii) hereof as though addressed to them and to the following effect: (A) The information contained in the Official Statement in the sections entitled “THE 2017 BONDS,” “SECURITY AND SOURCES OF PAYMENT FOR THE 2017 BONDS,” “TAX MATTERS,” “APPENDIX C – SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE” and “APPENDIX F – PROPOSED FORM OF BOND COUNSEL OPINION” insofar as such information purports to summarize certain provisions of the Indenture and such counsel’s opinion relating to the tax exemption of interest on the Bonds, are accurate in all material respects; (B) The Bonds are not subject to the registration requirements of the Securities Act of 1933, as amended, and the Indenture is exempt from qualification pursuant to the Trust Indenture Act of 1939, as amended; and (C) This Purchase Agreement has been duly executed and delivered by the Commission and is a legal, valid and binding obligation of the Commission enforceable in accordance with its terms, subject to laws relating to bankruptcy, insolvency, reorganization or creditors' rights generally, to the application of equitable principles, the exercise of judicial discretion and the limitations on legal remedies against public entities in the State. (iv) The opinion of Norton Rose Fulbright US LLP (“Disclosure Counsel”) addressed to the Underwriters, to the effect that while they have not independently verified the accuracy or fairness of the statements and representations set forth in the Official Statement or referred to therein or the financial statements and the appendices thereto, as a result of their participation in the preparation of the Preliminary Official Statement and the Official Statement and their review of certain documents referred to therein: (I) no facts have come to the attention of the personnel in the firm directly involved in rendering legal advice and assistance in connection therewith which gives them cause to believe that the Preliminary Official Statement (except for information permitted to be excluded therefrom pursuant to Rule 15c2-12, the financial statements and other financial and statistical data included therein, forecasts, projections, estimates, assumptions and expressions of opinion, statements relating to DTC, Cede & Co. and the book-entry system and statements contained in in Appendices A, B and E thereto, as to which no view need to be expressed) as of its date contained, or as of the date hereof contains, any untrue statement of a material fact or omitted or omits to state any material fact necessary in order to make the statements contained therein, in light of the circumstances under which they were made, not misleading; and (II) no facts have come to the attention 148 9 DOCSOC/1807350v4/200313-0018 of the personnel in the firm directly involved in rendering legal advice and assistance in connection therewith which gives them cause to believe that the Official Statement (except for the financial statements and other financial and statistical data included therein, forecasts, projections, estimates, assumptions and expressions of opinion, statements relating to DTC, Cede & Co. and the book-entry system and statements contained in in Appendices A, B and E thereto, as to which no view need to be expressed), as of its date contained, or as of the Closing Date contains, any untrue statement of a material fact or omitted or omits to state any material fact necessary in order to make the statements contained therein, in light of the circumstances under which they were made, not misleading; (v) An opinion, dated the date of the Closing and addressed to the Underwriters, of Best, Best & Krieger LLP, General Counsel to the Commission, to the effect that: (i) the Commission is a county transportation commission duly organized under the laws of the State; (ii) the Ordinance and the resolution or resolutions of the Commission approving and authorizing the execution and delivery of the Commission’s Documents by the Commission (the “Resolutions”) were duly adopted at meetings of the Commission, which were called and held pursuant to law and with all public notice required by law and at which a quorum was present and acting at the time of adoption; (iii) to the best knowledge of such counsel, there is no action, suit, proceeding or investigation at law or in equity before or by any court, public board or body of competent jurisdiction, pending or threatened against or affecting the Commission, to restrain or enjoining the enforcement of the Commission’s Documents or in any way contesting or affecting the validity of the Bonds or the Commission’s Documents; (iv) the execution and delivery of the Bonds by the officer executing the same and the Commission’s Documents by the Commission, the adoption of the Resolutions, and compliance by the Commission with the provisions of the foregoing, as appropriate, under the circumstances contemplated thereby, does not and will not conflict with or constitute on the part of the Commission a breach or default under any agreement or other instrument to which the Commission is a party or by which it is bound (and of which such counsel is reasonably aware) or any existing law, regulation, court order or consent decree to which the Commission is subject; (v) the Commission’s Documents have been duly authorized, executed and delivered by the Commission and, assuming due authorization, execution and delivery by the other parties thereto, the Commission’s Documents constitute legal, valid and binding agreements of the Commission, enforceable in accordance with their respective terms, subject in each case to laws relating to bankruptcy, insolvency or other laws affecting the enforcement of creditors’ rights generally and the application of equitable principles if equitable remedies are sought; (vi) except as described in the Official Statement, no authorization, approval, consent, or other order of the State or any other governmental authority or agency within the State having jurisdiction over the Commission is required for the valid authorization, execution, delivery and performance by the Commission of the Commission’s Documents which has not been obtained; and (vii) without having undertaken to determine independently the accuracy, completeness or fairness of the statements contained in the Preliminary Official Statement and the Official Statement and based upon the information made available to such counsel in the course of its participation in the preparation of the Official Statement as counsel for the Commission, nothing has come to such counsel’s attention which would cause them to believe that the Official Statement (excluding therefrom the financial statements and statistical data included in the Official Statement and the OS Excluded Information) as of the date thereof and as of the Closing Date, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; (vi) a certificate or certificates, dated the Closing Date, signed by a duly authorized official of the Commission to the effect that, to the best of such official’s knowledge, (i) the representations and warranties of the Commission contained in this Purchase Agreement are true and 149 10 DOCSOC/1807350v4/200313-0018 correct on and as of the Closing Date with the same effect as if made on the Closing Date; (ii) no event affecting the Commission has occurred since the date of the Official Statement which has the effect of causing the Official Statement (excluding the OS Excluded Information) to contain any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements and information therein, in light of the circumstances under which they were made, not misleading; (iii) the Commission has, and at the time of the Closing will have, full legal right, power and authority (A) to execute and enter into the Commission’s Documents, (B) to adopt the Resolution, (C) to sell and deliver the Bonds to the Underwriters pursuant to the Constitution and laws of the State, (D) to issue the Bonds, (E) to cause the Sales Tax to be levied and collected, (F) to pledge the Sales Tax Revenues to the payment of the Bonds and (G) to carry out and to consummate the transactions contemplated by, and to perform all of its obligations under, the Resolution, the Commission’s Documents, the Bonds and the Official Statement; (iv) the Commission has (A) duly authorized and approved the Official Statement, (B) duly authorized and approved the execution and delivery of, and performance by the Commission of its obligations under, the Bonds and the Commission’s Documents, (C) duly adopted the Resolutions and (D) duly authorized and approved the use of the proceeds of the sale of the Bonds, as contemplated by the Official Statement; (v) at or prior to the time and date of the Closing, the Bonds will have been duly executed and delivered by the Commission, and each of them and the Resolutions and the Commission’s Documents will constitute legal, valid and binding obligations of the Commission enforceable against the Commission in accordance with their respective terms, except to the extent that the enforceability may be limited by bankruptcy, insolvency, arrangement, moratorium or other laws affecting the rights of creditors generally, equitable remedies, judicial discretion and the limitations on legal remedies against local transportation authorities in the State; (vi) the Resolutions, the Commission’s Documents and the Bonds conform in all material respects to the descriptions thereof in the Preliminary Official Statement and the Official Statement; (vii) the financial data relating to the Commission and the financial statements of the Commission contained in the Preliminary Official Statement and the Official Statement present fairly the financial condition and results of the operation of the Commission at the dates and for the periods therein specified and such financial data relating to the Commission and the financial statements of the Commission contained in the Preliminary Official Statement and the Official Statement are presented in conformity with generally accepted accounting principles applied on a basis substantially consistent with that of the audited financial statements of the Commission except as otherwise specifically noted in the Preliminary Official Statement and the Official Statement and, except as disclosed in the Official Statement, since June 30, 2016, no materially adverse change has occurred, or any development involving a prospective material change, in the financial position or results of operations of the Commission and the Commission has not incurred since June 30, 2016, any material liabilities other than in the ordinary course of business or as set forth in or contemplated by the Official Statement; (viii) no litigation of any nature is now pending or, to the best of the Commission’s knowledge, threatened in any court or before any governmental agency of competent jurisdiction: (A) restraining or enjoining, or seeking to restrain or enjoin, the issuance, sale, execution or delivery of the Bonds; or (B) in any way contesting or affecting (1) the validity or enforceability of the Bonds, or (2) any proceedings of or on behalf of the Commission taken with respect to the issuance or sale of the Bonds, or (3) adoption of the Resolution or the execution and delivery of the Commission’s Documents, or (4) the levy and collection of the Sales Tax, or (5) the pledge of Sales Tax Revenues effected by the Indenture, as described in the Preliminary Official Statement and the Official Statement, or (6) the proceedings authorizing and approving the Sales Tax or the levy or collection of the Sales Tax, or (7) the existence or powers of the Commission; or (C) in any manner questioning (1) the proceedings or authority for the issuance of the Bonds, or (2) any provision made or authorized for the payment of the Bonds, or (3) the existence or operations of the Commission, or (4) the power of the Commission to issue the Bonds, or (5) the power of the Commission to undertake any other transactions necessary 150 11 DOCSOC/1807350v4/200313-0018 in connection with this proposed financing; or (D) which would have a material adverse effect upon the operations of the Commission relating to the Bonds or to the contemplated use of the proceeds thereof; (ix) none of the Commission’s proceedings or authority for the issuance, sale, execution and delivery of the Bonds, or the execution and delivery of the Commission’s Documents, or the adoption of the Resolution as described in the Preliminary Official Statement and the Official Statement has been repealed, modified, amended, revoked or rescinded; (x) no approval, permit, consent or authorization of any governmental or public agency, authority or person having jurisdiction over the Commission not already obtained and no proceedings not already had are required in connection with (A) the issuance and sale of the Bonds, (B) the execution and delivery by the Commission of, or the performance by it of its obligations under, the Bonds, the Commission’s Documents and the Resolution or (C) except as contemplated by the Preliminary Official Statement and the Official Statement, the issuance and sale of the Bonds or the application of the proceeds of the sale thereof; (xi) there is no material adverse change in the condition or affairs of the Commission that would make it unreasonable for the Underwriters or other purchasers of the Bonds to rely upon the Official Statement in connection with the resale of the Bonds, and the Underwriters are hereby authorized to distribute copies of the Official Statement in connection with the resale of the Bonds; and (xii) the Commission has complied with all the agreements and satisfied all the conditions on its part to be performed or satisfied at or prior to the date of issuance of the Bonds with respect to the issuance of the Bonds; (vii) A certificate, dated the Closing Date, signed by a duly authorized official of the Trustee, that: (A) the Trustee is a national banking association organized and existing under and by virtue of the laws of the United States of America, having the full power and being qualified to enter into the Indenture and perform its duties under the Indenture and the Continuing Disclosure Agreement (together, the “Trustee Documents”); (B) the Trustee is duly authorized to enter into the Indenture and Trustee has duly executed and delivered the Indenture; (C) the execution and delivery of the Indenture and compliance with the provisions on the Trustee’s part contained in the Trustee Documents, will not conflict with or constitute a breach of or default under any law, administrative regulation, judgment, decree, loan agreement, indenture, bond, note, resolution, agreement or other instrument to which Trustee is a party or is otherwise subject (except that no representation, warranty or agreement is made with respect to any federal or state securities or blue sky laws or regulations), nor will any such execution, delivery, adoption or compliance result in the creation or imposition of any lien, charge or other security interest or encumbrance of any nature whatsoever upon any of the properties or assets held by the Trustee pursuant to the Indenture under the terms of any such law, administrative regulation, judgment, decree, loan agreement, indenture, bond, note, resolution, agreement or other instrument, except as provided by the Trustee Documents; (D) to the best of the knowledge of the Trustee, it has not been served with any action; suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, governmental agency, public board or body, nor is any such action or other proceeding threatened against the Trustee, as such but not in its individual capacity, affecting the existence of the Trustee, or the titles of its officers to their respective offices or seeking to prohibit, restrain or enjoin the collection of Sales Tax Revenues to be applied to pay the principal, premium, if any, and interest on the Bonds, or the pledge thereof, or in any way contesting or affecting the validity or enforceability of the Indenture, or contesting the powers of the Trustee or its authority to enter into, adopt or perform 151 12 DOCSOC/1807350v4/200313-0018 its obligations under any of the foregoing, wherein an unfavorable decision, ruling or finding would materially adversely affect the validity or enforceability of the Indenture; and (E) the Trustee will apply the proceeds from the Bonds as provided in the Indenture. (viii) an opinion of counsel to the Trustee, addressed to the Underwriters, in form and substance satisfactory to the Representatives, to the effect that the Trustee is a national banking association with due power and authority to execute the Indenture, that the Trustee has duly authenticated the Bonds and that the Indenture is in effect and is valid and binding upon the Trustee; (ix) the opinion of Stradling Yocca Carlson & Rauth, counsel to the Underwriters, dated the date of the Closing and addressed to the Underwriters, in form and substance satisfactory to the Representatives; (x) a copy of the Official Statement, executed on behalf of the Commission by a person duly authorized to sign on behalf of the Commission; (xi) a certified copy of the general resolution or resolutions of the Trustee authorizing the execution and delivery of the Indenture and the Bonds; (xii) certified copies of the resolution or resolutions of the Commission authorizing the execution and delivery of the Commission’s Documents; (xiii) a copy of the Blue Sky Memorandum with respect to the Bonds, prepared by Underwriters’ Counsel; (xiv) A tax certificate relating to the tax exempt Bonds in form satisfactory to Bond Counsel and the Representatives; (xv) A copy of the Notices of Sale required to be delivered to the California Debt Investment and Advisory Commission pursuant to Sections 8855(g) and 53583 of the California Government Code; (xvi) Evidence that any ratings on the Bonds described in the Preliminary Official Statement and the Official Statement are in full force and effect as of the date of the Closing; (xvii) A Certificate, dated the Closing Date, signed by an authorized representative of Fieldman Rolapp & Associates, Financial Advisor to the Commission, to the effect that no information came to such representative’s attention which gives such representative reason to believe that the statements and information in the Preliminary Official Statement and the Official Statement under the caption “PLAN OF FINANCE” contains any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading; (xviii) A certified copy of the proceedings relating to authorization and approval of the Sales Tax, including: (i) a certified copy of the Ordinance; and (ii) evidence of the results of the November 5, 2002 and November 2, 2010 elections; 152 13 DOCSOC/1807350v4/200313-0018 (xix) A copy of the executed Agreement for State Administration of Transactions and Use Tax, between the Commission and the California State Board of Equalization, including all amendments thereto; (xx) A copy of the Blanket Letter of Representation to DTC relating to the Bonds signed by DTC and the Commission; (xxi) An executed copy of the Continuing Disclosure Agreement; and (xxii) Such additional certificates, legal opinions of Bond Counsel, Disclosure Counsel or other counsel and such other instruments or documents as Stradling Yocca Carlson & Rauth, a Professional Corporation (“Underwriters’ Counsel”), Disclosure Counsel or Bond Counsel reasonably request to evidence the truth and accuracy as of the date hereof and as of the Closing Date of information contained in the Official Statement and the representations and warranties contained herein and in the Official Statement and the due satisfaction as or prior to the Closing Date of all conditions then to be satisfied in connection with the transaction contemplated hereby. 7. To the extent permitted by law, the Commission agrees to indemnify and hold harmless the Underwriters and each person, if any, who controls (within the meaning of Section 15 of the Securities Act of 1933, as amended, or of Section 20 of the Securities Exchange Act of 1934, as amended) the Underwriters and the officers, agents and employees of the Underwriters (each such person, an “Indemnified Party”) against any and all losses, claims, damages, liabilities and expenses arising out of any untrue statement of a material fact contained in the Preliminary Official Statement (other than in the POS Excluded Information) or the Official Statement (other than in the OS Excluded Information) or the omission to state in the Preliminary Official Statement (other than omissions of the POS Excluded Information) or the Official Statement (other than omissions of the OS Excluded Information) a material fact necessary to make the statements therein relating to the Commission, in the light of the circumstances under which they were made, not misleading. The Commission shall not be liable for any settlement of any such action effected without its consent by any Indemnified Party, which consent shall not be unreasonably withheld, but if settled with the consent of the Commission or if there be a final judgment for the plaintiff in any such action against the Commission or any Indemnified Party, the Commission agrees to indemnify and hold harmless such Indemnified Party to the extent provided herein. In case any claim shall be made or action brought against an Indemnified Party for which indemnity may be sought against the Commission, as provided above, the Underwriters shall promptly notify the Commission in writing setting forth the particulars of such claim or action and the Commission shall assume the defense thereof, including at its option the retaining of counsel acceptable to the Underwriters and including the payment of all expenses. The Indemnified Party shall not have the right to retain separate counsel unless (i) the Commission shall have specifically authorized the retaining of such counsel or (ii) the parties to such suit include the Indemnified Party and one or more legal defenses may be available to it which may not be available to the Commission, in which case the Commission shall not be entitled to assume the defense of the suit but the Underwriters shall bear the fees and expenses of such counsel. Each Underwriter agrees, severally and not jointly, to indemnify and hold harmless the Commission, its employees and its officers, but only with reference to liability in connection with false statements and information in the Preliminary Official Statement and the Official Statement furnished to the Commission in writing by such Underwriter for inclusion in the Preliminary Official Statement 153 14 DOCSOC/1807350v4/200313-0018 and the Official Statement. The Commission acknowledges that the only information provided by the Underwriters for inclusion in the Preliminary Official Statement was the information contained under the caption “UNDERWRITING” and the only information provided by the Underwriters for inclusion in the Official Statement was the principal amount, interest rates, prices and yields and redemption prices set forth on the inside cover of the Official Statement and the information contained under the caption “UNDERWRITING”. 8. The Underwriters shall have the right to cancel their obligation hereunder to purchase the Bonds (and such cancellation shall not constitute a default hereunder by the Underwriters) by the Representative notifying you in writing of its election to do so between the date hereof and the Closing, if at any time hereafter and prior to the Closing: (i) any event occurring, or information becoming known that, in the reasonable judgment of the Representatives, makes untrue any statement of a material fact contained in the Official Statement or results in an omission of a material fact necessary to make the statements made therein, in the light of the circumstances under which they were made, not misleading; or (ii) An amendment to the Constitution of the United States or the State of California shall have been passed or legislation shall have been introduced in or enacted by the Congress of the United States or the legislature of any state having jurisdiction of the subject matter or legislation pending in the Congress of the United States shall have been amended or legislation shall have been recommended to the Congress of the United States or to any state having jurisdiction of the subject matter or otherwise endorsed for passage (by press release, other form of notice or otherwise) by the President of the United States, the Treasury Department of the United States, the Internal Revenue Service or the Chairman or ranking minority member of the Committee on Finance of the United States Senate or the Committee on Ways and Means of the United States House of Representatives, or legislation shall have been proposed for consideration by either such Committee by any member thereof or presented as an option for consideration by either such Committee by the staff of such Committee or by the staff of the joint Committee on Taxation of the Congress of the United States, or legislation shall have been favorably reported for passage to either House of the Congress of the United States by a Committee of such House to which such legislation has been referred for consideration, or a decision shall have been rendered by a court of the United States or of the State of California or the Tax Court of the United States, or a ruling shall have been made or a regulation or temporary regulation shall have been proposed or made or any other release or announcement shall have been made by the Treasury Department of the United States, the Internal Revenue Service or other federal or State of California authority, with respect to federal or State of California taxation upon revenues or other income of the general character to be derived by the Commission or upon interest received on obligations of the general character of the Bonds which, in the judgment of the Representatives, may have the purpose or effect, directly or, indirectly, of affecting the tax status of the Commission, its property or income, its securities (including the Bonds) or the interest thereon, or any tax exemption granted or authorized by State of California legislation; or (iii) any legislation, ordinance, rule or regulation shall be introduced in, or be enacted by any governmental body, department or agency of the State of California, or a decision by any court of competent jurisdiction within the State of California or any court of the United States of America shall be rendered which, in the reasonable opinion of the Representatives, materially adversely affects the market price or marketability of the Bonds or the ability of the Underwriters to enforce contracts for the sale of the Bonds; or 154 15 DOCSOC/1807350v4/200313-0018 (iv) legislation shall be enacted by the Congress of the United States of America, or a decision by a court of the United States of America shall be rendered, or a stop order, ruling, regulation or official statement by, or on behalf of, the Securities and Exchange Commission or any other governmental agency having jurisdiction of the subject matter shall be issued or made to the effect that the execution, delivery, offering or sale of obligations of the general character of the Bonds, or the execution, delivery, offering or sale of the Bonds, including all underlying obligations, as contemplated hereby or by the Official Statement, is in violation or would be in violation of, or that obligations of the general character of the Bonds, or the Bonds, are not exempt from registration under, any provision of the federal securities laws, including the Securities Act of 1933, as amended and as then in effect, or that the Indenture needs to be qualified under the Trust Indenture Act of 1939, as amended and as then in effect; or (v) the imposition by the New York Stock Exchange or other national securities exchange or any governmental authority or any material restrictions not now in force with respect to the Bonds or obligations of the general character of the Bonds or securities generally or the material increase of any such restrictions now in force, including those relating to the extension of credit by or the charge to the net capital requirements of, the Underwriters, which, in the reasonable opinion of the Representatives, materially adversely affects the market price or marketability of the Bonds or the ability of the Underwriters to enforce contracts for the sale of the Bonds; or (vi) the declaration of a general banking moratorium by federal, New York or California authorities or a major financial crisis or a material disruption in commercial banking or securities settlement or clearances services shall have occurred, or the general suspension of trading or minimum or maximum prices for trading shall have been fixed and be in force or maximum ranges or prices for securities shall have been required and be in force on the New York Stock Exchange on any national securities exchange by a determination by that exchange or by order of the Securities and Exchange Commission or any other governmental agency having jurisdiction, which, in the reasonable opinion of the Representatives, materially adversely affects the market price or marketability of the Bonds or the ability of the Underwriters to enforce contracts for the sale of the Bonds; or (vii) any new outbreak or escalation of hostilities, declaration by the United States of America of a national emergency or war or other calamity or crisis affecting the financial markets which, in the reasonable opinion of the Representatives, materially adversely affects the market price or marketability of the Bonds or the ability of the Underwriters to enforce contracts for the sale of the Bonds; or (viii) any rating of securities of the Commission payable from or secured by Revenues reflecting the creditworthiness of the Commission, shall have been withdrawn or reduced, placed on credit watch, assigned a negative outlook or announced to be under review by a rating agency, which, in the Representatives’ reasonable opinion, materially adversely affects the market price or marketability of the Bonds or the ability of the Underwriters to enforce contracts for the sale of the Bonds; or (ix) the commencement of any action, suit or proceeding described in Section 5(i) hereof which, in the reasonable judgment of the Representatives, materially adversely affects the market price of the Bonds or the ability of the Underwriters to enforce contracts for the sale of the Bonds; or (x) there shall be in force a general suspension of trading on the New York Stock Exchange; or 155 16 DOCSOC/1807350v4/200313-0018 (xi) a material adverse change has occurred or becomes known in the operations or finances of the Commission. 9. The Underwriters shall be under no obligation to pay and the Commission shall pay or cause to be paid from the proceeds of the Bonds or other funds available to it the expenses incident to the performance of the obligations of the Commission hereunder, including but not limited to (a) the cost of printing or engraving, and mailing or delivering the definitive Bonds and the Official Statement in reasonable quantities and all other documents or the cost of recording and filing such documents (other than as set forth in the next succeeding paragraph) prepared in connection with the transactions contemplated hereby; (b) the fees and disbursements of the Trustee, in connection with the execution, sale and delivery of the Bonds; (c) the fees and disbursements of the Bond Counsel, Disclosure Counsel, General Counsel, and any other experts or consultants retained by the Commission in connection with the transactions contemplated hereby; (d) the costs related to obtaining ratings on the Bonds. The Underwriters shall pay (a) California Debt and Investment Advisory Commission fees; (b) the cost of preparation and printing of any Blue Sky Memorandum to be used by them; (c) all advertising expenses in connection with the public offering of the Bonds; (d) the fees and expenses of Underwriters’ Counsel; (e) CUSIP number costs; and (f) any fees assessed upon the Underwriters with respect to the Bonds by the Municipal Securities Rulemaking Board or the Financial Industry Regulatory Authority. To the extent not otherwise reimbursed in full by the Commission pursuant to the preceding paragraph of this Section, the Commission acknowledges that a portion of the Underwriters’ discount is intended to reimburse the Underwriters for incidental expenses (including, but not limited to, transportation, lodging and meals of Commission and Underwriter personnel) incurred by the Underwriters (on their own behalf and/or on behalf of Underwriter personnel and Commission personnel and advisors, as applicable) in connection with the consummation of the transaction contemplated by this Purchase Agreement. 10. No covenant or agreement contained in this Purchase Agreement shall be deemed to be a covenant or agreement of any member, officer, agent or employee of the Commission nor shall such persons be liable personally under this Purchase Agreement or be subject to any personal liability or accountability solely by reason of the execution of this Purchase Agreement or solely by reason of the breach or attempted alleged breach hereof by the Commission. 11. Any notice to be given to the Commission under this Purchase Agreement may be given by delivering the same to the office thereof c/o Riverside County Transportation Commission*, 4080 Lemon Street, 3rd Floor, Riverside, California 92501 or P.O. Box 12008, Riverside, California 92502, and any such notice to be given to the Representatives or the Underwriters may be given by delivering the same to Merrill Lynch, Pierce, Fenner & Smith Incorporated, 555 California St., Suite 1160, Mail Code: CA 5-705-11-00, San Francisco, CA 94104, Attention: ____ ________ and Goldman, Sachs & Co., 555 California St., 45th Floor, San Francisco, CA 94104, Attention: Ian Parker. 12. The Commission hereby authorizes the Official Statement and the information therein contained to be used by the Underwriters in connection with the public sale of the Bonds. * Street address is for non-postal delivery. P.O. Box for postal (US mail) delivery. 156 17 DOCSOC/1807350v4/200313-0018 13. This Purchase Agreement shall be governed by, and construed in accordance with, the laws of the State of California. 14. The representations and warranties of the Commission set forth in or made pursuant to this Purchase Agreement shall not be deemed to have been discharged, satisfied or otherwise rendered void by reason of the Closing or termination of this Purchase Agreement and regardless of any investigations or statements as to the results thereof made by or on behalf of the Underwriters and regardless of delivery of and payment for the Bonds. 15. This Purchase Agreement, when accepted by the Commission, shall constitute the entire agreement between the Commission and the Underwriters and is made solely for the benefit of the Commission and the Underwriters (including the successors of the Underwriters). No other person shall acquire or have any right hereunder by virtue hereof, except as provided herein. 16. This Purchase Agreement is made solely for the benefit of the Commission and the Underwriters (including the successors thereof), and no other person, partnership or association shall acquire or have any right hereunder or by virtue hereof. All representations and agreements by the Commission in this Purchase Agreement shall remain operative and in full force and effect except as otherwise provided herein, regardless of any investigations made by or on behalf of the Underwriters and shall survive the issuance of and payment of the Bonds. 17. This Purchase Agreement may be executed simultaneously in several counterparts each of which shall be an original and all of which shall constitute but one and the same instrument. 18. The Representatives, in their sole discretion, may waive any condition or requirement imposed upon the Commission as set forth in this Purchase Agreement. 19. The Commission acknowledges and agrees that: (i) the primary role of the Underwriters, as underwriters, is to purchase securities, for resale to investors, in an arm’s-length commercial transaction between the Commission and the Underwriters and that the Underwriters have financial and other interests that differ from those of the Commission; (ii) in connection therewith and with the discussions, undertakings and procedures leading up to the consummation of such transaction, the Underwriters are and have been acting solely as principals and are not acting as the municipal advisor, financial advisor, agent or fiduciary of the Commission; (iii) the Underwriters have not assumed an advisory or fiduciary responsibility in favor of the Commission with respect to the offering contemplated hereby or the discussions, undertakings and procedures leading thereto (irrespective of whether the Underwriters have provided other services or are currently providing other services to the Commission on other matters); (iv) the only obligations the Underwriters have to the Commission with respect to the transaction contemplated hereby expressly are set forth in this Purchase Agreement; and (v) the Commission has consulted its own legal, municipal, financial and other advisors to the extent it has deemed appropriate. 20. This Purchase Agreement shall become effective upon the execution of the acceptance hereby by the Commission, and shall be valid and binding and enforceable as of the time of such acceptance. 21. The rights and obligations created by this Purchase Agreement shall not be subject to assignment by the Underwriters or the Commission without the prior written consent of the other parties hereto. 157 18 DOCSOC/1807350v4/200313-0018 22. In case any one or more of the provisions, contained herein shall for any reason be held invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not effect any other provisions hereof. 23. The validity, interpretation, and performance of this Purchase Agreement shall be governed by the laws of the State of California. Very truly yours, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED, on behalf of itself and as Representative of the Underwriters By: Name: Title: GOLDMAN, SACHS & CO., on behalf of itself and as Representative of the Underwriters By: Authorized Representative The foregoing is hereby agreed to and accepted as of the date first above written: RIVERSIDE COUNTY TRANSPORTATION COMMISSION By: Authorized Representative 158 A-1 DOCSOC/1807350v4/200313-0018 EXHIBIT A UNDERWRITERS Merrill Lynch, Pierce, Fenner & Smith Incorporated Goldman, Sachs & Co. Barclays Capital Academy Securities Fidelity Capital Markets 159 B-1 DOCSOC/1807350v4/200313-0018 EXHIBIT B MATURITY SCHEDULE Maturity Date (June 1) Principal Amount Interest Rate Price Yield $___________ _____% Term Bonds due June 1, 20__ – Price: ______*; Yield _______ Priced to par call on June 1, 20__. 160 C-1 DOCSOC/1807350v4/200313-0018 EXHIBIT C REDEMPTION PROVISIONS Optional Redemption. The Bonds maturing on or after June 1, 20__ are subject to redemption prior to their respective stated maturities, at the option of the Commission, from any source of available funds, as a whole or in part, on any date on or after June 1, 20__ at the principal amount of 2017 Series A Bonds called for redemption plus accrued interest to the date fixed for redemption, without premium. Mandatory Redemption of the Bonds from Mandatory Sinking Account Payments. The 2017 Series A Bonds maturing on June 1, 20__ are subject to mandatory redemption prior to their respective stated maturities, in part, by lot, from Mandatory Sinking Account Payments on each June 1 a Mandatory Sinking Account Payment is due, in the principal amount equal to the Mandatory Sinking Account Payment due on such date and at a redemption price equal to 100% of the principal amount thereof, plus accrued but unpaid interest to the redemption date, without premium. Redemption Date (June 1) Mandatory Sinking Account Payment † _____________ † Final Maturity. 161 D-2 DOCSOC/1807350v4/200313-0018 EXHIBIT D ISSUE PRICE CERTIFICATE OF THE UNDERWRITER This Certificate is furnished by Merrill Lynch, Pierce, Fenner & Smith Incorporated as representative of the underwriters (the “Representative”) in connection with the sale and issuance by _______________ (the “Commission”) of its $_________ aggregate principal amount of [NAME OF BONDS] (the “Bonds”) issued ________, 2017, and the Representative hereby certifies and represents the following, based upon information available to us: 1. Based on our assessment of the then prevailing market conditions, the Representative reasonably expected when it agreed to purchase the Bonds (the “Sale Date”) that the first prices at which at least 10% of each maturity of the Bonds would be sold by the Representative to the general public (excluding bond houses, brokers or similar persons or organizations acting in the capacity of underwriters or wholesalers) (the “Public”) would be prices not higher than, or, in the case of obligations sold on a yield basis, at yields not lower than, those listed for each maturity on Schedule A hereto (the “Initial Offering Prices”). 2. All of the Bonds have actually been offered to the Public in a bona fide public offering at prices not higher than, or, in the case of obligations sold on a yield basis, at yields not lower than, the Initial Offering Prices. 3. The first price, or yield in the case of obligations sold on a yield basis, at which ten percent (10%) of each maturity of the Bonds has been sold to the Public was at a price not higher than, or, in the case of obligations sold on a yield basis, at a yield not lower than, the Initial Offering Prices [except for the Bonds with the following maturities:]. 4. The Representative had no reason to believe that any of the Initial Offering Prices of the Bonds exceeded the expected fair market value of the Bonds as of the Sale Date. We understand that the foregoing information will be relied upon by the Commission with respect to certain of the representations set forth in the Tax Certificate and by Orrick Herrington & Sutcliffe LLP, in connection with rendering its opinion to the Commission that the interest on the Bonds is not includable in gross income of the owners thereof for federal income tax purposes. The undersigned is certifying only as to facts in existence on the date hereof. Nothing herein represents the undersigned’s interpretation of any laws; in particular the regulations under the Internal Revenue Code of 1986, or the application of any laws to these facts. The certifications contained herein are not necessarily based on personal knowledge, but may instead be based on either inquiry deemed adequate by the undersigned or institutional knowledge (or both) regarding the matters set forth herein. Although certain information furnished in this Certificate has been derived from other purchasers, bond houses and brokers and cannot be independently verified by us, we have no reason to believe it to be untrue in any material respect. 162 D-2 DOCSOC/1807350v4/200313-0018 MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED, as Representative of the Underwriters By: [NAME] [TITLE] Dated: ______________ 163 BLANK OH&S Draft – 4/18/17 OHSUSA:765989901.12 MASTER INDENTURE between RIVERSIDE COUNTY TRANSPORTATION COMMISSION and U.S. BANK NATIONAL ASSOCIATION, as Trustee Dated as of [July 1, 2017] Riverside County Transportation Commission Toll Revenue Bonds ATTACHMENT 6 164 TABLE OF CONTENTS Page -i- OHSUSA:765989901.12 ARTICLE I DEFINITIONS Section 1.01 Definitions........................................................................................................ 6 ARTICLE II THE OBLIGATIONS Section 2.01 Authorization and Purposes ........................................................................... 33 Section 2.02 General Terms of Obligations ........................................................................ 34 Section 2.03 Execution ....................................................................................................... 34 Section 2.04 Certificate of Authentication .......................................................................... 35 Section 2.05 Forms of Obligations ..................................................................................... 35 Section 2.06 Issuance, Sale and Delivery of Obligations; Application of Proceeds .......... 35 Section 2.07 Mutilated, Lost, Stolen or Destroyed Obligations ......................................... 35 Section 2.08 Exchangeability and Transfer of Obligations; Persons Treated as Holders ........................................................................................................... 36 Section 2.09 Cancellation ................................................................................................... 37 Section 2.10 Senior Lien Obligations Ratably Secured ...................................................... 37 Section 2.11 Second Lien Obligations Ratably Secured .................................................... 37 Section 2.12 Subordinate Obligations Ratably Secured ..................................................... 38 Section 2.13 Book-Entry Only System ............................................................................... 38 ARTICLE III ADDITIONAL OBLIGATIONS Section 3.01 Restrictions on Issuance of Senior Lien Obligations ..................................... 39 Section 3.02 Proceedings for Issuance of Additional Obligations ..................................... 41 Section 3.03 Restrictions on Issuance of Second Lien Obligations or Additional Subordinate Obligations ................................................................................. 42 Section 3.04 Proceedings for Issuance of Second Lien Obligations or Additional Subordinate Obligations ................................................................................. 44 Section 3.05 Subordinate Obligations; TIFIA Loans ......................................................... 44 Section 3.06 Conditions for Merging of RCTC 91 Express Lanes and Toll Road ............. 44 ARTICLE IV REDEMPTION Section 4.01 Redemption and Purchase of Obligations ...................................................... 45 165 TABLE OF CONTENTS (continued) Page -ii- OHSUSA:765989901.12 Section 4.02 Notice of Redemption .................................................................................... 45 Section 4.03 Conditional Notice of Redemption; Rescission ............................................. 45 Section 4.04 Effect of Redemption ..................................................................................... 46 Section 4.05 Partial Redemption of Obligations................................................................. 46 ARTICLE V PLEDGE; FUNDS AND ACCOUNTS Section 5.01 Deposit of Revenue by Trustee; Toll Revenue Fund ..................................... 46 Section 5.02 Establishment of Funds and Accounts ........................................................... 47 Section 5.03 Toll Revenue Fund; Priority of Deposits and Transfers ................................ 48 Section 5.04 Project Fund ................................................................................................... 53 Section 5.05 Commission Initial Loan and Commission Backstop Loan Contribution to Project ................................................................................... 56 Section 5.06 Operation and Maintenance Fund .................................................................. 57 Section 5.07 Capital Expenditures Fund ............................................................................. 58 Section 5.08 Senior Lien Obligations Reserve Fund .......................................................... 58 Section 5.09 Second Lien Obligations Reserve Fund ......................................................... 60 Section 5.10 Subordinate Obligations Reserve Fund ......................................................... 62 Section 5.11 Repair and Rehabilitation Fund ..................................................................... 64 Section 5.12 Commission Loan Fund; Residual Fund; Surplus Fund ................................ 65 Section 5.13 Rebate Fund ................................................................................................... 66 Section 5.14 Senior Lien Obligations Interest Account...................................................... 66 Section 5.15 Senior Lien Obligations Principal Account ................................................... 67 Section 5.16 Second Lien Obligations Interest Account .................................................... 67 Section 5.17 Second Lien Obligations Principal Account .................................................. 68 Section 5.18 Subordinate Obligations Interest Account ..................................................... 68 Section 5.19 Subordinate Obligations Principal Account ................................................... 68 Section 5.20 TIFIA Loan Prepayment Account ................................................................. 69 Section 5.21 Establishment and Application of the Redemption Fund .............................. 69 Section 5.22 Records .......................................................................................................... 69 Section 5.23 Investment by Trustee .................................................................................... 70 Section 5.24 Subsidy Payments .......................................................................................... 71 166 TABLE OF CONTENTS (continued) Page -iii- OHSUSA:765989901.12 Section 5.25 Withdrawal and Application of Funds; Priority of Transfers from Funds and Accounts ....................................................................................... 71 Section 5.26 Effect of Bankruptcy Related Event on TIFIA Loan ..................................... 73 ARTICLE VI COVENANTS OF THE COMMISSION Section 6.01 Punctual Payment and Performance .............................................................. 73 Section 6.02 Against Encumbrances ................................................................................... 73 Section 6.03 Toll and Revenue Covenants ......................................................................... 74 Section 6.04 Annual Budget; Financial Plan ...................................................................... 76 Section 6.05 Operation and Maintenance of the Toll Road ................................................ 76 Section 6.06 Retention of Assets ........................................................................................ 76 Section 6.07 Insurance ........................................................................................................ 76 Section 6.08 Payment of Claims ......................................................................................... 77 Section 6.09 Receipt and Deposit of Cash Advances ......................................................... 77 Section 6.10 Toll Agreements............................................................................................. 77 Section 6.11 Construction and Maintenance From Other Sources Permitted .................... 78 Section 6.12 Tax Covenants ............................................................................................... 78 Section 6.13 Accounting Records; Financial Statements and Other Reports ..................... 79 Section 6.14 Protection of Trust Estate and Rights of Holders .......................................... 79 Section 6.15 Payment of Governmental Charges and Compliance with Governmental Regulations............................................................................. 79 Section 6.16 Maintenance of Powers .................................................................................. 79 Section 6.17 Covenants Binding on Commission and Successors ..................................... 80 Section 6.18 Continuing Disclosure ................................................................................... 80 Section 6.19 Further Assurances......................................................................................... 80 ARTICLE VII DEFAULT PROVISIONS AND REMEDIES Section 7.01 Events of Default ........................................................................................... 81 Section 7.02 Application of Revenue and Other Funds After Default ............................... 81 Section 7.03 No Acceleration ............................................................................................. 83 Section 7.04 Suits at Law or in Equity and Mandamus ...................................................... 83 167 TABLE OF CONTENTS (continued) Page -iv- OHSUSA:765989901.12 Section 7.05 Waivers .......................................................................................................... 84 Section 7.06 Rights of Subordinate Lenders ....................................................................... 84 ARTICLE VIII THE TRUSTEE Section 8.01 Trustee............................................................................................................ 84 Section 8.02 Compensation and Indemnification of Trustee .............................................. 87 Section 8.03 Qualifications of Trustee; Resignation; Removal .......................................... 87 Section 8.04 Instrument of Bondholders ............................................................................ 89 Section 8.05 Issuing and Paying Agents ............................................................................. 89 ARTICLE IX AMENDMENTS Section 9.01 Amendments to Indenture Not Requiring Consent of Bondholders .............. 90 Section 9.02 Amendments to Indenture Requiring Consent of Bondholders and TIFIA Lender ................................................................................................. 91 Section 9.03 Notice to and Consent of Bondholders .......................................................... 92 Section 9.04 Execution and Effect of Supplemental Indentures ......................................... 92 Section 9.05 Obligations Owned by Commission .............................................................. 93 ARTICLE X DISCHARGE OF LIEN Section 10.01 Discharge of Lien and Security Interest ......................................................... 93 Section 10.02 Provision for Payment of Obligations ............................................................ 94 Section 10.03 Unclaimed Moneys ........................................................................................ 95 ARTICLE XI MISCELLANEOUS Section 11.01 Liability of Commission Limited to Trust Estate .......................................... 95 Section 11.02 Limitation of Rights; Third Party Beneficiary ............................................... 96 Section 11.03 Rights of Credit Providers ............................................................................. 96 Section 11.04 Severability .................................................................................................... 96 Section 11.05 Notices ........................................................................................................... 97 Section 11.06 Payments Due on Non-Business Days ........................................................... 97 Section 11.07 Captions ......................................................................................................... 97 Section 11.08 California Law ............................................................................................... 98 168 TABLE OF CONTENTS (continued) Page -v- OHSUSA:765989901.12 Section 11.09 Effective Date ................................................................................................ 98 Section 11.10 Execution in Several Counterparts ................................................................. 98 SCHEDULE I PROJECTS CONSTITUTING CAPITAL EXPENDITURES FUND PERMITTED EXPENDITURES ................................................................. S-I SCHEDULE II SCHEDULED REPAIR AND REHABILITATION FUND REQUIRED DEPOSITS .............................................................................. S-II SCHEDULE III RESIDUAL FUND SCHEDULED RETAINED BALANCE ................... S-III EXHIBIT A FORM OF FUNDS TRANSFER CERTIFICATE ...................................... A-1 169 OHSUSA:765989901.12 This MASTER INDENTURE, dated as of [July 1, 2017] (this “Master Indenture”), between the RIVERSIDE COUNTY TRANSPORTATION COMMISSION, a public entity duly existing under the laws of the State of California (as further defined herein, the “Commission”), and U.S. BANK NATIONAL ASSOCIATION, a national banking association duly organized and existing under the laws of the United States of America, as trustee (together with any successor thereto the “Trustee”); W I T N E S S E T H: WHEREAS, the Commission is a county transportation commission duly organized and existing pursuant to the County Transportation Commissions Act, being Division 12 of the Public Utilities Code of the State of California (Section 130000 et seq.) (as amended from time to time hereafter, the “Commission Act”); WHEREAS, the Commission is authorized pursuant to the Riverside County Transportation Sales Tax Act, being Division 25 of the Public Utilities Code of the State of California (Section 240000 et seq.) (the “Sales Tax Act”), to, among other things, and with voter approval, levy a retail transactions and use tax in accordance with the provisions of Part 1.6 (commencing with Section 7251) of Division 2 of the California Revenue and Taxation Code and to issue limited tax bonds payable from the proceeds of such tax; WHEREAS, the Commission adopted Ordinance No. 02-001, named the “Transportation Expenditure Plan and Retail Transaction and Use Tax Ordinance” ( “Ordinance No. 02-001”) on May 8, 2002, pursuant to the provisions of the Sales Tax Act, which Ordinance provides for the imposition of a retail transactions and use tax (the “Sales Tax”) applicable in the incorporated and unincorporated territory of the County in accordance with the provisions of Part 1.6 (commencing with Section 7251) of Division 2 of the California Revenue and Taxation Code at the rate of one-half of one percent (1/2%) commencing July 1, 2009 and continuing for a period not to exceed thirty (30) years; WHEREAS, by its terms, Ordinance No. 02-001 became effective at the close of the polls on November 5, 2002, the day of the election at which the proposition imposing the Sales Tax was approved by more than two-thirds of the electors voting on the measure; WHEREAS, the Commission adopted Ordinance No. 10-002 on July 14, 2010, amending Ordinance No. 02-001 (collectively with Ordinance No. 02-001, as amended from time to time, the “Ordinance”) which amendment was approved by a majority of the voters voting on such Ordinance at an election held on November 2, 2010; WHEREAS, the Ordinance authorizes the Commission to apply proceeds of the Sales Tax for transportation purposes, including the construction, capital, acquisition, maintenance and operation of streets, roads, highways, including state highways, and for related purposes; WHEREAS, pursuant to Streets and Highways Code Sections 149.7 and 149.8, including Chapter 421 of the California Statutes of 2008 (Assembly Bill 1954) (the “Toll Act”), the Commission is authorized to set, levy and collect tolls, user fees, or other similar charges, payable for use of high-occupancy toll (“HOT”) lanes and other facilities in the Interstate 15 170 2 OHSUSA:765989901.12 (referenced in the Toll Act as State Highway Route 15) (the “I-15”) corridor in Riverside County (as further defined herein, the “Toll Road”), and to issue one or more series of bonds or other obligations (as further defined herein, the “Obligations”) pursuant to the terms and conditions of a resolution adopted by a two-thirds vote of the Commission, which Obligations may be payable from the proceeds of such tolls (as further defined herein, the “Toll Revenues”) and any other Revenue pledged hereunder; WHEREAS, the Toll Act authorizes the Obligations to be issued for the purpose of financing the cost of the Toll Road which the Commission designates will initially consist of the portion of the I-15 between the I-15/Cajalco Road interchange and the I-15/State Route 60 (the “SR 60”) interchange (as more fully defined herein, the “I-15 Express Lanes Project”); WHEREAS, the Commission submitted an application to the California Transportation Commission (the “CTC”) to develop the I-15 Express Lanes Project, and pursuant thereto, the CTC conducted two public hearings and determined the application was eligible and submitted the same for legislative approval which was obtained and codified in the Toll Act; WHEREAS, pursuant to Chapter 6.5 (commencing with Section 6800) of Part 1 of Division 2 of the Public Contract Code, the Commission is authorized to employ the design- build method of procurement in connection with the I-15 Express Lanes Project; WHEREAS, the California Department of Transportation (“Caltrans”) and the Commission have entered into Agreement No. 17-31-002-00, the CALTRANS/RCTC Toll Facility Agreement (Including Real Property Lease) Interstate 15 Express Lanes in Riverside County on September 29, 2016, by and between the Commission and Caltrans (the “Toll Facility Agreement”); WHEREAS, the Caltrans and the Commission have entered into the Cooperative Agreement No. 16-31-038-00 for Design-Build of the I-15 Express Lanes Project on May 31, 2016, as required by Public Contract Code Section 6821, by and between the Commission and Caltrans (as further defined herein, the “Caltrans DB Cooperative Agreement”); WHEREAS, Caltrans served as lead agency for environmental review, analysis and approval of the I-15 Express Lanes Project pursuant to the requirements of the California Environmental Quality Act (“CEQA”), and in such capacity prepared a Mitigated Negative Declaration and Initial Study (“MND”) for the project; WHEREAS, Caltrans adopted the MND, adopted an Environmental Commitments Record (“Mitigation Monitoring and Reporting Program”) and approved the I-15 Express Lanes Project on May 4, 2016; WHEREAS, the Commission has completed its environmental assessment of the I-15 Express Lanes Project following consideration of the MND and Mitigation Monitoring and Reporting Program, and has approved Resolution No. 06-012 on July 13, 2016, adopting the Mitigation Monitoring and Reporting Program and approving the I-15 Express Lanes Project; 171 3 OHSUSA:765989901.12 WHEREAS, the Commission determined that it is necessary to issue Obligations, including Senior Lien Bonds (as defined herein), to (i) pay or reimburse the Commission for the payment of a portion of the Project Costs (as hereinafter defined), and (ii) apply for or otherwise obtain available federal, state and local matching funds, loans and grants to make additional funds available for the I-15 Express Lanes Project; WHEREAS, the Commission has previously issued its toll revenue bonds (the “91 Express Lane Bonds”) pursuant to a Master Indenture, dated as of June 1, 2013 (the “2013 Indenture”) in order to finance toll lanes and facilities on the portion of State Route 91 between the Orange County/Riverside County line and I-15 that constitute part of the Riverside SR-91 Corridor Improvement Project (as more fully defined in the 2013 Indenture); WHEREAS, the Obligations issued hereunder are issued and secured separately from the 91 Express Lane Bonds; provided that following completion of construction and upon satisfaction of certain conditions the systems may be merged in the future and the obligations of the projects secured on a parity from toll road system revenues; WHEREAS, the Commission has determined to enter into this Master Indenture and one or more Supplemental Indentures (collectively, the “Indenture”) to provide for (i) the issuance of such Senior Lien Bonds, entitled “Riverside County Transportation Commission Toll Revenue Senior Lien Bonds,” to establish and declare the terms and conditions upon which the Senior Lien Bonds and other obligations secured by toll revenues and other sources of funds shall be issued and secured and to secure the payment of the principal, premium (if any), and interest on the Senior Lien Bonds and other obligations secured by toll revenues on a parity with the Senior Lien Bonds (as more fully defined in Section 1.01, the “Parity Obligations”); (ii) the issuance of Second Lien Obligations, entitled “Riverside County Transportation Commission Toll Revenue Second Lien Obligations,” to establish and declare the terms and conditions upon which the Second Lien Obligations shall be issued and secured and to secure the payment of the principal, premium (if any), and interest on the Second Lien Obligations, and (iii) the issuance of Subordinate Obligations, entitled “Riverside County Transportation Commission Toll Revenue Subordinate Obligations,” to establish and declare the terms and conditions upon which the Subordinate Obligations shall be issued and secured and to secure the payment of the principal, premium (if any), and interest on the Subordinate Obligations; WHEREAS, the execution and delivery of this Master Indenture has in all respects been duly and validly authorized by resolution duly passed and approved by the Commission; and WHEREAS, the Commission certifies that all acts that are necessary to make the Obligations, when executed by the Commission and authenticated and delivered by the Trustee, duly issued and the valid, legal and binding obligations of the Commission payable in accordance with their terms, and to constitute this Master Indenture a valid and binding agreement of the parties hereto, have been done and taken, and the execution and delivery of this Master Indenture have been duly authorized; 172 4 OHSUSA:765989901.12 NOW, THEREFORE, THIS INDENTURE WITNESSETH: The Commission, to secure the payment of the Obligations as the same become due and payable, whether at maturity or by prior redemption, and the performance and observance of all of the covenants and conditions herein contained, and in consideration of the premises and the acceptance by the Trustee of the trusts hereby created and of the purchase and acceptance of the Obligations by the Holders thereof and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Commission does hereby grant, mortgage, grant a security interest in, assign, transfer in trust, and pledge to the Trustee, and to its successors in trust hereunder, and to them and their assigns forever, all rights, title, interest and privileges of the Commission in, to and under (i) the Toll Revenues, (ii) all interest or other income from investment of money in the Funds and Accounts established hereunder (excluding the Rebate Fund, the Surplus Fund and the Sales Tax Revenue Bonds Account within the Project Fund, and any Fund or Account established to hold the proceeds of a drawing on any Credit Support Instrument), (iii) all Swap Revenues, and (iv) all amounts (including the proceeds of Obligations) held in each Fund and Account established under this Indenture (except for amounts on deposit in the Rebate Fund, the Surplus Fund and the Sales Tax Revenue Bonds Account within the Project Fund, and amounts on deposit in any Fund or Account established to hold the proceeds of a drawing on any Credit Support Instrument); TO HAVE AND TO HOLD all the same (herein called the “Trust Estate”) with all privileges and appurtenances hereby granted and assigned, or agreed or intended so to be, to the Trustee and its successors in trust and to them and their assigns forever; IN TRUST NEVERTHELESS, upon the terms and trusts herein set forth, FIRST: for the equal and proportionate benefit and security of all Senior Lien Obligations, all of which, regardless of the time or times of their delivery, maturity or other due date, shall be of equal rank without preference, priority or distinction as to lien or otherwise of any Senior Lien Obligation over any other Senior Lien Obligation, except as otherwise permitted by or provided for in this Indenture or in a Supplemental Indenture; provided, that any funds held by the Trustee for the payment of specific Senior Lien Obligations which are deemed to have been paid pursuant to the provisions of Article X and any funds deposited with the Trustee hereunder specifically to be held in escrow or otherwise to provide additional security or an additional source of payment for specified Senior Lien Obligations shall be held and used only to pay or provide security for the Senior Lien Obligations for which such deposit was made and shall not be held as security on a parity for any other Senior Lien Obligations; and provided further, that the Trustee shall apply the Trust Estate hereunder to the payment of the principal of, and interest on, or Maturity Value of, and other payments with respect to the Senior Lien Obligations and for the purposes and uses and in the order of priority set forth herein prior to the payment of the principal of, and interest on, or Maturity Value of, and other payments with respect to Second Lien Obligations, Subordinate Obligations or other Obligations; and SECOND: subject to the prior security interest in the Trust Estate pledged for the security and payment of the Senior Lien Obligations, for the equal and proportionate benefit and security of all Second Lien Obligations, all of which, regardless of the time or times of their delivery, maturity or other due date, shall be of equal rank without preference, priority or 173 5 OHSUSA:765989901.12 distinction as to lien or otherwise of any Second Lien Obligation over any other Second Lien Obligation, except as otherwise permitted by or provided for in this Indenture or in a Supplemental Indenture; provided, that any funds held by the Trustee for the payment of specific Second Lien Obligations that are deemed to have been paid pursuant hereto and any funds deposited with the Trustee hereunder specifically to be held in escrow or otherwise to provide additional security or an additional source of payment for specified Second Lien Obligations shall be held and used only to pay or provide security for the Second Lien Obligations for which such deposit was made and shall not be held as security on a parity for any other Second Lien Obligations; and provided further, that the Trustee shall apply the Trust Estate hereunder to the payment of the principal of, and interest on, or Maturity Value of, and other payments with respect to the Second Lien Obligations and for the purposes and uses and in the order of priority set forth herein subordinate to the payment of the Senior Lien Obligations but prior to the payment of the principal of, and interest on, or Maturity Value of, and other payments with respect to Subordinate Obligations and other Obligations; and THIRD: subject to the security interest in the Trust Estate pledged for the security and payment of the Senior Lien Obligations and the Second Lien Obligations, for the equal and proportionate benefit and security of all Subordinate Obligations, all of which, regardless of the time or times of their delivery, maturity or other due date, shall be of equal rank without preference, priority or distinction as to lien or otherwise of any Subordinate Lien Obligation over any other Subordinate Lien Obligation, except as otherwise permitted by or provided for in this Indenture or in a Supplemental Indenture; provided, that any funds held by the Trustee for the payment of specific Subordinate Obligations which are deemed to have been paid pursuant to the provisions hereof and any funds deposited with the Trustee hereunder specifically to be held in escrow or otherwise to provide additional security or an additional source of payment for specified Subordinate Obligations shall be held and used only to pay or provide security for the Subordinate Obligations for which such deposit was made and shall not be held as security on a parity for any other Subordinate Obligations; and provided further, that the Trustee shall apply the Trust Estate hereunder to the payment of the principal of, and interest on, or Maturity Value of, and other payments with respect to the Subordinate Obligations and for the purposes and uses and in the order of priority set forth herein subordinate to the payment of the Senior Lien Obligations and the Second Lien Obligations but prior to the payment of the principal of and interest on, or Maturity Value of, and other payments with respect to other Obligations; PROVIDED, HOWEVER, that if the Commission, its successors or assigns, shall well and truly pay, or cause to be paid, or provide fully for payment as herein provided of the principal of the Obligations and the interest due or to become due thereon (together with premium, if any), at the time and in the manner set forth in the Obligations according to the true intent and meaning thereof, or shall provide, as permitted hereby, for the payment thereof by depositing with the Trustee sums sufficient for payment of the entire amount due or to become due thereon as herein provided, and shall well and truly keep, perform and observe all the covenants and conditions pursuant to the terms of this Indenture to be kept, performed and observed by it, and shall pay to the Trustee all sums of money due or to become due to it in accordance with the terms and provisions hereof, then this Indenture and the rights hereby granted shall cease, terminate and be void except as otherwise provided herein. 174 6 OHSUSA:765989901.12 THIS INDENTURE FURTHER WITNESSETH, and it is expressly declared, that all Obligations issued and secured hereunder are to be issued, authenticated and delivered and all payments, revenues, income and funds hereby pledged and assigned, and are subject to the terms, conditions, stipulations, covenants, agreements, trusts, uses and purposes as hereinafter expressed, and the Commission has agreed and covenanted, and does hereby covenant and agree with the Trustee, for the benefit of the Owners from time to time of the Obligations issued hereunder and the Secured Creditors, as follows: ARTICLE I DEFINITIONS Section 1.01 Definitions. In addition to terms elsewhere defined in this Indenture, the following terms shall have the following meanings unless the context or use clearly indicates another meaning. These definitions shall apply to the singular and plural forms of these defined terms. “Account” means each account established in accordance with the terms of this Indenture. “Accreted Value” means, with respect to any Capital Appreciation Obligations or Convertible Capital Appreciation Obligations, the principal amount thereof plus the interest accrued thereon at and prior to the maturity or earlier redemption thereof, in the case of a Capital Appreciation Obligation, or at and prior to the date of conversion of such Obligation to a Current Interest Obligation, in the case of a Convertible Capital Appreciation Obligation, compounded on the basis of a 360-day year of twelve 30-day months at the approximate interest rate thereon on each compounding date specified therein. The Accreted Value of an Obligation at any date of computation shall be an amount equal to the principal amount of such Obligation plus interest accrued thereon from the date of issuance, such interest to accrue at the rate per annum established as provided in a Supplemental Indenture and be compounded periodically, plus, if such date of computation shall not be a compounding date, the ratable portion of the difference between the Accreted Value computed as of the immediately preceding compounding date (or the date of issuance thereof if the date of computation is prior to the first compounding date succeeding the date of issuance) and the Accreted Value computed as of the immediately succeeding compounding date, calculated based on the assumption that the Accreted Value increases during any period in equal daily amounts (with straight-line interpolation between compounding dates). “Act” means, collectively, the Commission Act, the Sales Tax Act, the Toll Act, the Refunding Bond Law, Articles 10 and 11 of Chapter 3 of Part 7 of Division 2 of Title 5 of the Government Code of the State, and such other provisions of law applicable to the Commission’s authority to issue Obligations, charge tolls and construct the Toll Road. “Alternative Repair and Rehabilitation Fund Required Deposit” means, for any Monthly Funding Date, the sum of (a) the Scheduled Repair and Rehabilitation Fund Required Deposit, plus (b) the cost of any Repair and Rehabilitation Permitted Expenditures required to be incurred by the Commission (as set forth in a Written Engineer’s Certificate) 175 7 OHSUSA:765989901.12 which are in excess of the Scheduled Repair and Rehabilitation Fund Required Deposit and which will be due and payable on or before the next Monthly Funding Date; provided, however, that (i) in any Fiscal Year prior to the Fixed Payment Commencement Date (as defined in the TIFIA Loan Agreement), no Alternative Repair and Rehabilitation Fund Required Deposit in excess of the Scheduled Repair and Rehabilitation Fund Required Deposit shall be made without the TIFIA Lender’s prior written consent, and (ii) in any Fiscal Year commencing after the Fixed Payment Commencement Date, the aggregate amount of transfers to the Repair and Rehabilitation Fund in respect of Alternative Repair and Rehabilitation Fund Required Deposits shall not be in excess of 115% of the Scheduled Repair and Rehabilitation Fund Required Deposits for such Fiscal Year as shown in Schedule II hereto, without the TIFIA Lender’s prior written consent. “Annual Debt Service” means the amount of payments due on the applicable Outstanding Obligations for any Calculation Period, as calculated by the Commission, utilizing the following assumptions about payments on such Obligations (and if more than one such assumption may apply, using the relevant assumptions selected by the Commission): (i) in determining the principal amount of an Obligation due in each year, payment shall be assumed to be made in accordance with the amortization schedule established for such principal, including any minimum sinking fund or account payments; (ii) if 40 percent or more of the principal of a Series of Obligations is not due until the final stated maturity of that Series of Obligations, the principal of and interest on such Obligations may be treated as if such principal and interest were due based upon a level amortization of such principal and interest over the term of that Series of Obligations; (iii) if the Obligation is supported by a line of credit or a letter of credit, principal may be treated as if it were due based upon the level amortization of such principal over the maximum term of repayment of borrowings under such line of credit or letter of credit; (iv) if an Outstanding Obligation bears a variable interest rate, the interest rate shall be assumed to be the greater of (a) the daily average interest rate during the 12 months ending with the month preceding the date of calculation, or during such shorter period that the Obligation has been Outstanding, or (b) the rate of interest on that Obligation on the date of calculation; (v) if Obligations proposed to be issued will be variable interest rate obligations, the interest on which is excluded from gross income for federal income tax purposes, then such obligations shall be assumed to bear interest at an interest rate equal to the average SIFMA Index during the three months preceding the month of calculation, or if SIFMA Index is no longer published, at an interest rate equal to 75% of the average One Month USD LIBOR Rate during that three month period, or if the One Month USD LIBOR Rate is not available for such period, another similar rate or index selected by the Commission and, for so long as the TIFIA Lender is the holder of an Outstanding Obligation, acceptable to the TIFIA Lender; (vi) if Obligations proposed to be issued will be variable interest rate obligations the interest on which is included in gross income for federal income tax purposes, 176 8 OHSUSA:765989901.12 then such obligations shall be assumed to bear interest at an interest rate equal to the average One Month USD LIBOR Rate during the three months preceding the month of calculation, or if the One Month USD LIBOR Rate is not available for such period, another similar rate or index selected by the Commission and, for so long as the TIFIA Lender is the holder of an Outstanding Obligation, acceptable to the TIFIA Lender; (vii) if Obligations proposed to be issued are part of a Commercial Paper Program, the principal of such Obligations may be treated as if such principal were due based upon a 30-year level amortization of principal from the date of calculation and the interest on such Obligations shall be calculated as if such Obligations were variable interest rate Obligations; (viii) if the variable interest on any Obligation plus the variable payments due to the Commission and fixed payments due from the Commission under a Qualified Swap Agreement or a Swap designated by the Commission are treated by the Commission as synthetic fixed rate debt, the variable interest rate Obligation may be treated as bearing such synthetic fixed rate for the duration of the synthetic fixed rate; (ix) if the fixed interest on any Obligation plus the fixed payments due to the Commission and variable payments due from the Commission under a Qualified Swap Agreement or a Swap designated by the Commission are treated by the Commission as synthetic variable rate debt, the fixed interest rate Obligation may be treated as bearing such synthetic variable rate for the duration of the synthetic variable rate and such synthetic variable rate shall be calculated using the principles of clauses (iv), (v) or (vi) hereof; (x) if any of the Obligations are Short-Term Put Obligations, the principal of such obligations may be treated as if such principal were due based upon a 30-year level amortization of principal from the date of calculation and the interest on such obligations may be calculated as if such obligations were variable interest rate Obligations; (xi) principal and interest payments on Obligations may be excluded to the extent such payments are to be paid from amounts then currently on deposit with the Trustee or another fiduciary in escrow specifically and irrevocably therefor and interest payments on any Obligations may be excluded to the extent that such interest payments are to be paid from capitalized interest held by the Trustee or another fiduciary specifically to pay such interest, including amounts held on deposit to pay capitalized interest on one or more Series of Obligations; (xii) if any of the Obligations are, or upon issuance will be, obligations for which the Commission is entitled to receive Subsidy Payments, as evidenced by an Opinion of Bond Counsel delivered with respect to such Obligations, the obligations may be treated as bearing an interest rate equal to the rate of interest borne or assumed to be borne, as applicable, by the obligations for the period of determination minus the Subsidy Payments to which the Commission is entitled for such period; (xiii) any payment obligation under an Obligation that was or is optional or contingent (such as the obligation to make a termination payment under a Qualified Swap 177 9 OHSUSA:765989901.12 Agreement or a Swap), whether or not the option is exercised or the contingency occurs, and any payments that are not scheduled payments, may be excluded; (xiv) if any of the Obligations are, or upon issuance will be, obligations payable in a currency other than lawful currency of the United States of America, then such obligations shall be assumed to be payable in lawful currency of the United States at the rate payable by the Commission pursuant to the Commission’s related currency swap or contract entered into in connection with such obligations or, in the absence of such swap or contract, at the rate determined by the Commission using a currency market conversion factor selected by the Commission; and (xv) if any of the Obligations are in the form of or securing payment of a TIFIA Loan, Annual Debt Service on such Obligations shall include only annual TIFIA Mandatory Debt Service (provided that, for purposes of such calculation during the period prior to the TIFIA Debt Service Payment Commencement Date, the TIFIA Mandatory Debt Service shall be deemed to be zero), and such Obligations (if not a Senior Lien Obligation) shall be treated for purposes of all calculations of Annual Debt Service as Subordinate Obligations unless and until the occurrence of a Bankruptcy Related Event, upon which occurrence such Obligations shall be treated as Parity Obligations for such purposes; provided further if the TIFIA Loan is a Senior Lien Obligation, the consent of the TIFIA Lender shall be required to utilize the assumptions in clauses (ii), (iii), (vii) or (x) in calculating Annual Debt Service. “Annual Operating Budget” means the annual budget required by Section 6.04 hereof. “Authorized Denominations” means, with respect to a Series of Obligations, the denomination or denominations designated as such in a Supplemental Indenture providing for the issuance of such Obligations. “Authorized Representative” means the Executive Director of the Commission, any Deputy Executive Director of the Commission, the Chief Financial Officer of the Commission, the Toll Program Director of the Commission or any other employee of the Commission at the time designated to act on behalf of the Commission in a Certificate of the Commission executed by any of the foregoing officers and filed with the Trustee, which Certificate shall contain such employee’s specimen signature. “Average Annual Debt Service” means, at any time of determination, the average amount of Annual Debt Service paid or payable in each Calculation Period on the applicable Outstanding Obligations to the stated maturity thereof. “Bankruptcy Related Event” means (a) an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, reorganization or other relief in respect of the Commission or any of its debts, or of a substantial part of the assets of the Commission, under any Insolvency Law, or (ii) the appointment of a receiver, trustee, liquidator, custodian, sequestrator, conservator or similar official for the Commission for a substantial part of the assets of the Commission, and, in any case referred to in the foregoing subclauses (i) and (ii), such proceeding or petition shall continue undismissed for 60 days or an 178 10 OHSUSA:765989901.12 order or decree approving or ordering any of the foregoing shall be entered; (b) the Commission shall (i) apply for or consent to the appointment of a receiver, trustee, liquidator, custodian, sequestrator, conservator or similar official for the Commission or for a substantial part of the assets of the Commission, or (ii) generally not be paying its debts as they become due unless such debts are the subject of a bona fide dispute, or become unable to pay its debts generally as they become due, or (iii) make a general assignment for the benefit of creditors, or (iv) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition with respect to it described in clause (a) of this definition, or (v) commence a voluntary proceeding under any Insolvency Law, or file a voluntary petition seeking liquidation, reorganization, an arrangement with creditors or an order for relief under any Insolvency Law, or (vi) file an answer admitting the material allegations of a petition filed against it in any proceeding referred to in the foregoing subclauses (i) through (iv), inclusive, of this clause (b), or (vii) take any action for the purpose of effecting any of the foregoing; or (c) (i) all or a substantial part of the Trust Estate shall be sold or otherwise disposed of in a public or private sale or disposition pursuant to a foreclosure of the lien thereon securing any Obligations, or (ii) all or a substantial part of the Trust Estate shall be transferred pursuant to a sale or disposition of such Trust Estate in lieu of foreclosure. “Beneficial Owner” means, with respect to any Book-Entry Obligation, the beneficial owner of such Book-Entry Obligation as determined in accordance with the applicable rules of the Securities Depository for such Book-Entry Obligations. “Blocked Payment Conditions” means the conditions set forth in Section 5.12(a). “Board” means the Board of Commissioners of the Commission. “Bond Counsel” means a firm of nationally-recognized attorneys-at-law experienced in legal work relating to the issuance of municipal bonds selected by the Commission. “Bond Obligation” means, as of any given date of calculation, (a) with respect to any Outstanding Current Interest Obligation, the principal amount of such Obligation, and (b) with respect to any Outstanding Capital Appreciation Obligation or Convertible Capital Appreciation Obligation, the Accreted Value thereof. “Bond Register” means the registration books for the ownership of Obligations maintained by the Trustee pursuant to Section 2.08. “Bondholder” or “Holder” or “Owner” means the record owner of any Obligation shown on the books of registration kept by the Trustee, which, during any period when such Obligation is a Book-Entry Obligation, shall be the Securities Depository or its Nominee. “Book-Entry Obligations” means Obligations issued under a book-entry only depository system as provided in Section 2.13. 179 11 OHSUSA:765989901.12 “Business Day” means any day, other than a Saturday, Sunday or other day on which the Government or banks are authorized or obligated by law or executive order to be closed in the State of California or the State of New York or in any city in which the Principal Office of the Trustee or, with respect to any Obligations secured by a Credit Support Instrument, the office where draws are to be made on a Credit Provider is located. “Calculation Date” means each June 30 and December 31, or, if such day is not a Business Day, the next succeeding Business Day, commencing with such date following the Substantial Completion Date. “Calculation Period” means a period of consecutive twelve (12) months. “Caltrans” means the California Department of Transportation. “Caltrans DB Cooperative Agreement” means that certain Cooperative Agreement for Design-Build of the I-15 Express Lanes Project, dated as of May 31, 2016, setting forth, among other things, the manner in which the initial phase of the I-15 Express Lanes Project will be constructed in accordance with the CIP Plan using the design-build method of procurement as authorized by the CTC. “Capital Appreciation Obligations” means the Obligations designated as Capital Appreciation Obligations in the Supplemental Indenture providing for the issuance of such Obligations and on which interest is compounded and paid at maturity or on prior redemption. “Capital Expenditures Fund” means the Fund by that name created pursuant to Section 5.02. “Capital Expenditures Fund Deposits Cap” means $[___________]. “Capital Expenditures Fund Permitted Expenditures” means the expenditures necessary to complete the projects specified in Schedule I hereto, which aggregate expenditures shall not exceed the Capital Expenditures Fund Deposits Cap. “Certificate of the Commission” means an instrument in writing signed by an Authorized Representative of the Commission. “CIP Plan” means the transportation improvements relating to the I-15 Express Lanes Project, including projected costs, the use of toll revenues, and a proposed completion schedule, and the use of the design-build method of procurement in connection with such improvements to reduce costs, expedite completion and achieve design features not achievable through the traditional design-bid-build method, as described in the Caltrans DB Cooperative Agreement, as it may be amended. “Code” means the Internal Revenue Code of 1986, as amended from time to time, and any regulations promulgated thereunder. 180 12 OHSUSA:765989901.12 “Commercial Paper Program” means a program of short-term Obligations (secured, at the option of the Commission, on a parity with Senior Lien Obligations, Second Lien Obligations or Subordinate Obligations) having the characteristics of commercial paper in that (i) such Obligations have a stated maturity not later than 270 days from their date of issue and (ii) maturing Obligations of such program may be paid with the proceeds of renewal Obligations. “Commission” means the Riverside County Transportation Commission, a public entity duly established and existing under the laws of the State of California, and any successor thereto. “Commission Act” means Division 12 of the Public Utilities Code of the State of California (Section 130000 et seq.) as such may be amended from time to time hereafter. “Commission Backstop Loan” means the amounts transferred to the Trustee from the Sales Tax Trustee pursuant to Section 5.05(b). “Commission Initial Loan” means the aggregate amounts transferred to the Trustee from the Sales Tax Trustee pursuant to Section 5.05(a). “Commission Loan” means the aggregate amount of the Commission Initial Loan the Commission makes to the Project pursuant to Section 5.05(a) and any additional contingent Commission Backstop Loan amounts made by the Commission to the Project pursuant to Section 5.05(b). “Commission Loan Fund” means the Account by that name created pursuant to Section 5.02. “Commission Loan Rate” means an annual rate equal to 4.00%. “Completion Obligations” means any Obligations incurred for the purpose of financing the completion of a Project for which Obligations theretofore shall have been incurred in accordance with the provisions hereof, to the extent necessary to complete such Project, in the manner and scope contemplated at the time that such Obligations theretofore incurred were originally incurred, and, to the extent the same shall be applicable, in accordance with the general plans and specifications for the applicable Project, as originally prepared with only such changes as have been made in conformance with the Financing Documents pursuant to which such Obligations theretofore incurred were originally incurred. “Consulting Engineer” means [Parsons Transportation Group Inc. or such other] or an independent engineer or engineering firm, or an affiliate thereof, nationally recognized as being experienced with determining the costs of construction, operation, maintenance, repair, and/or replacement of facilities similar to the Project appointed by the Commission; provided such appointment is not objected to in written notice to the Trustee and the Commission by the TIFIA Lender within 15 Business Days as being unacceptable. “Continuing Disclosure Agreement” means, with respect to each Series of Obligations requiring an undertaking regarding disclosure under Rule 15c2-12, the continuing disclosure undertaking entered into by the Commission and, if applicable, the Trustee or a 181 13 OHSUSA:765989901.12 Dissemination Agent or both, as the same may be supplemented, modified or amended in accordance with its terms. “Convertible Capital Appreciation Obligations” means Obligations that initially are issued as Capital Appreciation Obligations, but later convert to Obligations on which interest is paid periodically. Convertible Capital Appreciation Obligations shall be Capital Appreciation Obligations until the conversion date and from and after such conversion date shall no longer be Capital Appreciation Obligations, but shall be treated as Current Interest Obligations having a principal amount equal to their Accreted Value on the conversion date. “Costs of Issuance” means all items of expense directly or indirectly payable by or reimbursable to the Commission and related to the authorization, execution, sale and delivery of Obligations, including, but not limited to, advertising and printing costs, costs of preparation and reproduction of documents, filing and recording fees, initial fees and charges of the Trustee, legal fees and charges, fees and disbursements of consultants and professionals, financial advisor fees and expenses, underwriting fees and discounts, rating agency fees, fees and charges for preparation, execution, transportation and safekeeping of such Obligations, surety, insurance, liquidity and credit enhancements costs, and any other cost, charge, termination payment or fee incurred in connection with the issuance of Obligations. “Coverage Calculation Date” has the meaning assigned in Section 6.03(b). “Coverage Ratio” has the meaning assigned in Section 6.03(b). “Credit Provider” means any municipal bond insurance company, bank or other financial institution or organization or group of financial institutions or organizations providing a Credit Support Instrument for a Series of Obligations. “Credit Support Instrument” means a policy of insurance, letter of credit, line of credit, standby purchase agreement, revolving credit agreement or other credit arrangement pursuant to which a Credit Provider provides credit or liquidity support with respect to, or available for, the payment of interest, principal or Purchase Price of any Series of Obligations, as the same may be amended from time to time pursuant to its terms, and any replacement therefor. “CTC” means the California Transportation Commission. “Current Interest Obligations” means Obligations designated as Current Interest Obligations in the Supplemental Indenture providing for the issuance of such Obligations and that pay interest to the Holders thereof on a periodic basis prior to maturity. Current Interest Obligations also include Convertible Capital Appreciation Obligations after their conversion date. “Defeasance Securities” means noncallable: (i) U.S. Treasury certificates, notes, bills and bonds, including State and Local Government Series securities; (ii) direct obligations of the U.S. Treasury which have been stripped by the U.S. Treasury itself; (iii) Resolution Funding Corp. securities (“REFCORP”), provided, however, only the interest component of REFCORP strips which have been stripped by request to the Federal Reserve Bank of New York in book entry form are acceptable; (iv) pre-refunded municipal bonds rated the same level as U.S. 182 14 OHSUSA:765989901.12 Treasury Notes and Bonds by Moody’s and by S&P, provided, however, that if such municipal bonds are rated only by S&P, then such pre-refunded municipal bonds must have been pre- refunded with cash, direct United States or United States guaranteed obligations; (v) obligations issued by the following agencies, which are backed by the full faith and credit of the United States: (a) Farmers Home Administration (FmHA) - certificates of beneficial ownership; (b) General Services Administration - participation certificates; (c) U.S. Maritime Administration - Guaranteed Title XI financing; (d) Small Business Administration guaranteed participation certificates and guaranteed pool certificates; (e) GNMA guaranteed MSB and participation certificates; and (f) U.S. Department of Housing and Urban Development (HUD) Local Authority Bonds, or (vi) certain obligations of government-sponsored agencies that are not backed by the full faith and credit of the United States limited to: (a) Federal Home Loan Mortgage Corp. (FHLMC) debt obligations; (b) Farm Credit System (formerly Federal Land Banks, Federal Intermediate Credit Banks, and Banks for Cooperatives) consolidated system- wide bonds and notes; (c) Federal Home Loan Banks (FHL Banks) consolidated debt obligations; (d) Federal National Mortgage Association (FNMA) debt obligations; (e) Student Loan Marketing Association (SLMA) debt obligations; and (f) Financing Corp. (FICO) debt obligations; and (g) other obligations approved by the Rating Agencies for defeasance escrows rated in the highest Rating Category. “Design-Build Contract” means the Design-Build Contract for the I-15 Express Lanes Project, dated [April 12, 2017], between the Commission and the Design-Build Contractor and any replacement contracts entered into by the Commission following any termination of such agreement, each in a form approved by the California Division Office of the Federal Highway Administration, an agency of the United States Department of Transportation, headquartered in Sacramento, California. “Design-Build Contractor” means Skanska-Ames, a Joint Venture and any successor thereto. “Design-Build Contractor Payments Account” means the Account by that name created within the Project Fund pursuant to Section 5.02. “Design-Build Parent Guaranties” means that certain Guaranty, dated March 29, 2017, provided by Skanska USA Civil Inc., as the same relates to the Design-Build Contract and the obligations, liabilities and duties of the Design-Build Contractor thereunder. “Dissemination Agent” means, with respect to each Series of Obligations requiring an undertaking regarding disclosure under Rule 15c2-12, the party (which may be the Commission) acting as dissemination agent under the applicable Continuing Disclosure Agreement, or any successor dissemination agent designated in writing by the Commission and which has filed a written acceptance with the Commission and the Trustee. “DTC” means The Depository Trust Company, New York, New York or any successor thereto. “Electronic” means, with respect to notice, notice through the internet or through a time-sharing terminal. 183 15 OHSUSA:765989901.12 “EMMA” means the Electronic Municipal Market Access website of the MSRB located at http://emma.msrb.org. “Event of Default” means any of the events specified in Section 7.01. “Financial Plan” means (a) the initial financial plan submitted by the Commission within 60 days after the effective date of the TIFIA Loan as set forth in Section 20(a) of such TIFIA Loan Agreement, and (b) the annual updates thereto required pursuant to such Section 20(a). “Financing Documents” means this Indenture, any Swaps or Qualified Swap Agreements, and any documents and/or instruments evidencing, documenting, securing or otherwise relating to any or all of the Obligations (including each TIFIA Loan Agreement), all as the same may from time to time be amended, modified, extended, renewed and/or restated, and each other document or instrument required to be executed and delivered by the aforementioned agreements. “Fiscal Year” means the period of twelve months terminating on June 30 of each year, or any other annual period hereafter selected and designated by the Commission as its Fiscal Year in accordance with applicable law and, if applicable, the applicable TIFIA Loan Agreement. “Fitch” means Fitch Ratings, Inc., and its successors and assigns, except that if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, then the term “Fitch” shall be deemed to refer to any other nationally recognized securities rating agency selected by the Commission. “Fund” means each fund established in accordance with the terms of this Indenture. “Funds Transfer Certificate” means a certificate prepared by the Commission in accordance with the terms of this Indenture substantially in the form of Exhibit A attached hereto containing the certifications by the Commission required by this Indenture with respect to a requested transfer of funds from a Fund or Account. “Government” means the United States of America and its departments and agencies. “Hedging Obligations” means, collectively, the payment of (a) all scheduled amounts payable to the Swap Parties by the Commission under the Swaps or Qualified Swap Agreements, as applicable (including interest accruing after the date of any filing by the Commission of any bankruptcy, insolvency or similar proceeding with respect to the Commission), net of all scheduled amounts payable to the Commission by such Swap Parties, and (b) all other indebtedness, fees, indemnities and other amounts payable by the Commission to the Swap Parties under such Swaps or Qualified Swap Agreements, net of all other indebtedness, fees, indemnities and other amounts payable by the Swap Parties to the Commission under such Swaps or Qualified Swap Agreements; provided, that Hedging Obligations shall not include Hedging Termination Obligations. For the avoidance of doubt, all 184 16 OHSUSA:765989901.12 calculations of such amounts payable under the Swaps or Qualified Swap Agreements shall be made in accordance with the terms of the applicable Swaps or Qualified Swap Agreements. “Hedging Termination Obligations” means the aggregate amount payable to the Swap Parties by the Commission upon the early termination of all or a portion of the Swaps or Qualified Swap Agreements, as applicable, net of all amounts payable to the Commission by such Swap Parties upon the early termination of all or a portion of such Swaps or Qualified Swap Agreements. For the avoidance of doubt, all calculations of such amounts payable under the Swaps or Qualified Swap Agreements shall be made in accordance with the terms of the applicable Swaps or Qualified Swap Agreements. “Holding Fund” means the account by the name created pursuant to Section 5.02. “Highest Priority Obligations” means, as of any date, Senior Lien Obligations, unless and until there are no Senior Lien Obligations Outstanding hereunder, in which case it means Second Lien Obligations, unless and until there are also no Second Lien Obligations Outstanding hereunder, in which case it means Subordinate Obligations. “I-15” means Interstate 15 (referenced in the Toll Act as State Highway Route 15). “I-15 Express Lanes Project” means the planning, design, development, financing, construction, reconstruction, rehabilitation, improvement, acquisition, lease, operation, or maintenance, or any combination of these, with respect to tolled and non-tolled facilities, structures, auxiliary lanes, on-ramps, turnarounds, connector roads, bridges, and roadways that are on, necessary for, or related to the construction or operation of the I-15 Express Lanes in northern Riverside County, including the construction of one to two tolled express lanes extending approximately 15 miles in each direction between the I-15/Cajalco Road interchange in Corona and I-15/SR-60 interchange just south of the Riverside/San Bernardino County line and the installation of an electronic toll enforcement and collection system. “I-15 Trust Fund” means the fund by that name established and held by the Sales Tax Trustee under the Sales Tax Revenue Bond Indenture. “Indenture” means this Master Indenture as the same may be amended or supplemented from time to time as permitted hereby. “Independent Certified Public Accountant” means any certified public accountant or firm of such accountants appointed by the Commission, and who, or each of whom, is independent with respect to the Commission, pursuant to the Statement on Auditing Standards No. 1 of the American Institute of Certified Public Accountants. “Insolvency Law” means the United States Bankruptcy Code, including 11 U.S.C. §101 et seq., as from time-to-time amended and in effect, and any state bankruptcy, insolvency, receivership or similar law now or hereafter in effect. 185 17 OHSUSA:765989901.12 “Insurance and Condemnation Proceeds Account” means the Account by that name created within the Project Fund pursuant to Section 5.02. “Interest Payment Date” means, with respect to a Series of Obligations, the date or dates for the payment of interest on such Obligations set forth in a Supplemental Indenture providing for the issuance of such Obligations. “Kroll” means Kroll Bond Rating Agency, Inc., and its successors and assigns, except that if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, the term “Kroll” shall be deemed to refer to any other nationally recognized statistical rating organization selected by the Commission. “Long Stop Date” means, with respect to the I-15 Express Lanes Project, the earlier of (i) the date that is one year after the date scheduled for Substantial Completion as provided in the Design-Build Contract, as such date scheduled for Substantial Completion may be extended as permitted or required under the Design-Build Contract and (ii) [________, 20__] (as that date may be extended pursuant to the TIFIA Loan Agreement), and, with respect to any other Project, the Long Stop Date for such Project, if any, set forth in a Supplemental Indenture providing for the issuance of Obligations to finance such Project. “Master Indenture” has the meaning assigned in the first paragraph hereof. “Maturity Value,” with respect to any Capital Appreciation Obligation, shall mean the Accreted Value of such Obligation at the maturity thereof and, with respect to a Convertible Capital Appreciation Obligation, shall mean the Accreted Value of such Obligation on the conversion date. “Maximum Annual Debt Service” means the highest amount of Annual Debt Service due on the applicable Obligations of the Commission for any Calculation Period during the period from the date of such determination through the final maturity date of the applicable Obligations then Outstanding and proposed to be issued. “Monthly Funding Date” means the last day of each calendar month or, if such day is not a Business Day, the next preceding Business Day. “Moody’s” means Moody’s Investors Service, and its successors and assigns, except that if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, the term “Moody’s” shall be deemed to refer to any other nationally recognized statistical rating organization selected by the Commission. “MSRB” means the Municipal Securities Rulemaking Board, and its successors and assigns. Until otherwise designated by the MSRB, filings with the MSRB are to be made through EMMA. “Net Revenue” means, for any Fiscal Year, Revenue less Operation and Maintenance Expenses for that Fiscal Year (excluding, in such calculations, (i) any extraordinary or one-time revenues from Revenue for such Fiscal Year, and (ii) any extraordinary or one-time expenses from Operation and Maintenance Expenses for such Fiscal Year, but only if and to the 186 18 OHSUSA:765989901.12 extent such extraordinary or one-time expenses are paid or payable from extraordinary or one- time revenues being excluded from Revenue for such Fiscal Year), as set forth in (a) the audited financial statement of the Commission for Fiscal Years for which audited financial statements are available, (b) to the extent that audited financial statements are not available, the unaudited financial statements of the Commission for Fiscal Years for which unaudited financial statements are available or (c) to the extent that neither audited financial statements nor unaudited financial statements are available, projections of the Commission (which projections shall be as set forth in the most recent Financial Plan while Obligations in the form of or securing payment of a TIFIA Loan are Outstanding). Net Revenue shall not include any amount on deposit in the Senior Lien Obligations Reserve Fund, the Second Lien Obligations Reserve Fund or the Subordinate Obligations Reserve Fund. Additionally, when calculating Net Revenue for purposes of Sections 3.01(b) and (c), Sections 3.03 (b) and (c) and Section 6.03, Net Revenue shall only include the amounts received under clauses (b), (c) and (d) of the definition of Toll Revenues to the extent that any such amounts are applied to, or reserved for, the payment of principal of or interest on Obligations. “Nominee” means the nominee of the Securities Depository for the Book-Entry Obligations, in whose name such Book-Entry Obligations are to be registered. The initial Nominee shall be Cede & Co., the partnership nominee of DTC. “Obligations” means all indebtedness of the Commission payable from Revenue incurred or assumed by the Commission for borrowed money (including indebtedness arising under Credit Support Instruments) and all other financing obligations of the Commission relating to the Toll Road that, in accordance with generally accepted accounting principles, are included as a liability on a balance sheet for the Toll Road books and records, including any bonds, notes, certificates or other obligations, as the case may be, authenticated and delivered under and pursuant to the Indenture as Senior Lien Obligations, Second Lien Obligations or Subordinate Obligations. For the purpose of determining the “Obligations” payable from Revenue, Obligations that are no longer Outstanding shall be excluded. The Commission Loan will not constitute an Obligation hereunder for purposes of the covenants in Article VI. “One Month USD LIBOR Rate” means the British Banker’s Association average of interbank offered rates in the London market for dollar deposits for a one-month period. “Operating Agreement” means the I-15 Express Lanes Toll Services Contract No. 16-31-043-00, dated as of January 26, 2017, by and between the Commission and the Toll Services Provider to design, implement and operate a toll collection system through a toll services contract for the I-15 Express Lanes Project, as amended, modified, supplemented in accordance with the terms of the TIFIA Loan Agreement and the Operating Agreement, and all related or ancillary agreements, or any other operating agreement entered into by the Commission and one or more entities in accordance with the terms hereof. “Operation and Maintenance Expenses” means all reasonable current expenses incurred and paid or payable by the Commission for the operation and maintenance of the Toll Road payable from Revenue, determined in accordance with generally accepted accounting principles, including, without limitation, payments with respect to financing leases and 187 19 OHSUSA:765989901.12 installment purchase agreements, all amounts paid or payable under the Operating Agreement, the Police Services Agreement and similar agreements, costs for operation, maintenance and repair, consumables, payments under any lease or rental payments properly considered to be operating expenses, payments pursuant to agreements for the management of the Toll Road, taxes, premiums paid or payable on any insurance, payments for oversight services, all administrative, engineering and policing costs, costs for any security, toll collection and enforcement expenses, fees and expenses of the Traffic Consultant, the Trustee, each trustee for or holder of Second Lien Obligations or Subordinate Obligations, any rating agency, credit, liquidity or remarketing fees relating to Obligations, and any other Secured Creditor (for the avoidance of doubt, such fees, administrative costs and expenses do not include any commitment fees, termination fees, fines or other penalties or any payments to be made to Swap Parties including Hedging Obligations and Hedging Termination Obligations), any insurance consultant, legal and accounting expenses, and any other reasonable and necessary expense paid or payable for the operation and maintenance of the Toll Road, but excluding expenses paid or scheduled to be paid from proceeds of Obligations, capital expenditures, expenditures for rehabilitation and operational improvement projects on the Toll Road, depreciation or obsolescence charges or reserves therefore, debt service for Obligations, and any non-cash charges, such as depreciation, amortization of intangibles and other bookkeeping entries of a similar nature. “Operation and Maintenance Fund” means the Fund by that name created pursuant to Section 5.06. “Opinion of Bond Counsel” means a written opinion of Bond Counsel. “Ordinance” means Ordinance No. 02-001, named the “Transportation Expenditure Plan and Retail Transaction and Use Tax Ordinance,” adopted by the Commission on May 8, 2002, pursuant to the provisions of the Sales Tax Act as amended from time to time including as amended by Ordinance No. 10-002 adopted by the Commission on July 14, 2010. “Outstanding,” when used with reference to Obligations hereunder means all Obligations that have been issued by the Commission hereunder or pursuant hereto, except such Obligations: (i) canceled or delivered for cancellation; (ii) deemed to be paid in accordance with Section 10.02 or any similar provisions in the constituent instruments defining the rights of the holders of such Obligations; (iii) in lieu of which other Obligations have been authenticated under Sections 2.07 or 2.08 or any similar provisions in the constituent instruments defining the rights of the holders of such Obligations; and (iv) to the extent described in Section 9.05, Obligations held by or for the account of the Commission. “Parity Obligations” means obligations of the Commission that are secured by the Trust Estate on a parity with the Senior Lien Bonds, including payments to the holders of obligations of the Commission entered into pursuant to California Government Code section 5922 (or any similar statute), in each case to the extent the Commission has contracted to make those payments as Parity Obligations. “Participating Underwriter” means any of the original underwriters of any Series of Obligations required to comply with Rule 15c2-12. 188 20 OHSUSA:765989901.12 “Permitted Investments” means the following: (i) any bonds or other obligations which as to principal and interest constitute direct obligations of, or are fully and unconditionally guaranteed as to the payment of principal and interest by, the United States of America, including obligations of any federal agency or federal government-sponsored enterprise; (ii) any certificates, receipts, securities or other obligations evidencing ownership of, or the right to receive, a specified portion of one or more interest payments or principal payments, or any combination thereof, to be made on any bond, note, or other obligation described above in clause (i); (iii) obligations of the Federal National Mortgage Association, the Government National Mortgage Association, Federal Home Loan Banks, Farmers Home Administration and Federal Home Loan Mortgage Corporation, including mortgage pass-through securities, collateralized mortgage obligations, mortgage-backed or other pay-through bonds guaranteed by such agencies; (iv) housing authority bonds issued by public agencies or municipalities and fully secured as to the payment of both principal and interest by a pledge of annual contributions under an annual contributions contract or contracts with the United States of America; or project notes issued by public agencies or municipalities and fully secured as to the payment of both principal and interest by a requisition or payment agreement with the United States of America; (v) obligations of any state, territory or commonwealth of the United States of America or any political subdivision thereof or any agency or department of the foregoing; provided that at the time of their purchase such obligations have a Threshold Rating; (vi) any bonds or other obligations of any state of the United States of America or any political subdivision thereof (a) (1) which are not callable prior to maturity or (2) which are pre-refunded prior to maturity and as to which irrevocable instructions have been given to the trustee of such bonds or other obligations by the obligor to give due notice of redemption and to call such bonds for redemption on the date or dates specified in such instructions, (b) which are secured as to principal and interest and redemption premium, if any, by a fund consisting only of cash or bonds or other obligations of the character described above in clause (i) or (ii) which fund may be applied only to the payment of such principal of and interest and redemption premium, if any, on such bonds or other obligations on the interest payment dates and the maturity date or dates thereof or the specified redemption date or dates pursuant to such irrevocable instructions, as appropriate, (c) as to which the principal of and interest on the bonds and obligations of the character described above in clause (i) or (ii) which have been deposited in such fund along with any cash on deposit in such fund are sufficient to pay the principal of and interest and redemption premium, if any, on the bonds or other obligations described in this clause (vi) on the interest payment dates and the maturity date or dates thereof or on the redemption date or dates specified in the irrevocable instructions referred to in subclause (a) of this clause (vi), as appropriate, and (d) which have a long-term Threshold Rating at the time of their purchase; 189 21 OHSUSA:765989901.12 (vii) bonds, notes, debentures or other evidences of indebtedness issued or guaranteed by any corporation provided that at the time of their purchase such obligations have a Threshold Rating; (viii) demand or time deposits, including trust accounts, trust funds, interest- bearing deposits, overnight banking deposits, interest bearing money market accounts or certificates of deposit (including those placed by a third party pursuant to an agreement between the Commission and the Trustee), whether negotiable or nonnegotiable, issued by any bank or trust company organized under the laws of any state of the United States of America or any national banking association (including the Trustee or any of its affiliates), provided that such certificates of deposit shall be issued by an institution, the senior debt obligations of which have a Threshold Rating; (ix) taxable commercial paper, other than that issued by bank holding companies, or tax-exempt commercial paper assigned a short-term Threshold Rating at the time of purchase; (x) variable rate obligations required to be redeemed or purchased by the obligor or its agent or designee upon demand of the holder thereof secured as to such redemption or purchase requirement by a liquidity credit agreement with a corporation and as to the payment of interest and principal either upon maturity or redemption (other than upon demand by the holder thereof) thereof by an unconditional credit facility of a corporation or enhanced by a liquidity agreement whereby a corporation agrees to provide market liquidity by committing to purchase the obligation upon demand by the holder thereof, provided that the variable rate obligations themselves have a short-term Threshold Rating, if any, and a long-term Threshold Rating, if any, and that the corporations providing the liquidity agreement and credit facility have, at the date of acquisition of the variable rate obligation by the Trustee, an outstanding issue of unsecured, uninsured and unguaranteed debt obligations assigned a Threshold Rating; (xi) any repurchase or reverse repurchase agreement with any bank or trust company organized under the laws of any state of the United States or any national banking association (including the Trustee or any of its affiliates) having a minimum permanent capital of one hundred million dollars ($100,000,000) or government bond dealer reporting to, trading with, and recognized as a primary dealer by the Federal Reserve Bank of New York, which agreement is secured by any one or more of the securities and obligations described in clauses (i), (ii), (iii) or (iv) above, which shall have a market value (exclusive of accrued interest and valued at least monthly) at least equal to 102% of the principal amount of such investment and shall be lodged with the Trustee or other fiduciary, as custodian for the Trustee, by the bank, trust company, national banking association or bond dealer executing such repurchase agreement, and the entity executing each such repurchase agreement required to be so secured shall furnish the Trustee with an undertaking satisfactory to it that the aggregate market value of all such obligations securing each such repurchase agreement (as valued at least monthly) will be an amount equal to 102% of the principal amount of each such repurchase agreement and the Trustee shall be entitled to rely on each such undertaking; (xii) any cash sweep or similar account arrangement of or available to the Trustee, the investments of which are limited to investments described in clauses (i), (ii), (iii), 190 22 OHSUSA:765989901.12 (iv), (v) and (xi) of this definition of Permitted Investments and any money market fund, the entire investments of which are limited to investments described in clauses (i), (ii), (iii), (iv), (v) and (xi) of this definition of Permitted Investments; provided that as used in this clause (xii) and clause (xiii) investments will be deemed to satisfy the requirements of clause (xi) if they meet the requirements set forth in clause (xi) ending with the words “clauses (i), (ii), (iii) or (iv) above” and without regard to the remainder of such clause (xi); (xiii) any investment agreement with a financial institution or insurance company or whose obligations are guaranteed by a financial institution or insurance company which: (a) has at the date of execution thereof an outstanding issue of unsecured, uninsured and unguaranteed debt obligations or a claims paying ability assigned a Threshold Rating; or (b) is fully secured by obligations described in items (i), (ii), (iii) or (iv) of the definition of Permitted Investments which are (A) valued not less frequently than monthly and have a fair market value, exclusive of accrued interest, at all times at least equal to the principal amount of the investment, (B) held by the Trustee or other custodian acceptable to the Trustee, (C) subject to a perfected first lien in the Trustee, and (D) free and clear from all third party liens; (xiv) shares of beneficial interest in diversified management companies investing exclusively in securities and obligations described in clauses (i) through (xiii) of this definition of Permitted Investments and which companies have been assigned a long-term Threshold Rating or have an investment advisor registered with the Securities and Exchange Commission with not less than five (5) years’ experience investing in such securities and obligations and with assets under management in excess of $500,000,000; (xv) shares in a common law trust established pursuant to Title 1, Division 7, Chapter 5 of the Government Code of the State which invests exclusively in investments permitted by Section 53635 of Title 5, Division 2, Chapter 4 of the Government Code of the State, as it may be amended; (xvi) bankers’ acceptances issued by domestic or foreign banks (including the Trustee or any of its affiliates), which are eligible for purchase by the Federal Reserve System, the short-term paper of which has a short-term Threshold Rating, which purchases may not exceed two hundred seventy (270) days maturity; (xvii) the pooled investment fund of the County of Riverside, California, which is administered in accordance with the investment policy of said County as established by the Treasurer/Tax Collector thereof, as permitted by Section 53601 of the Government Code of the State, copies of which policy are available upon written request to said Treasurer/Tax Collector; (xviii) the Local Agency Investment Fund or similar pooled fund operated by or on behalf of the State of California and which is authorized to accept investments of moneys held in any of the Funds or Accounts established pursuant to this Indenture; (xix) obligations of the Resolution Trust Corporation and interest obligations of the Resolution Funding Corporation; (xx) financial futures or financial option contracts with an entity the debt securities of which are assigned a Threshold Rating; 191 23 OHSUSA:765989901.12 (xxi) any bond, notes debentures, or other evidences of indebtedness backed by either business or consumer receivables rated either Aa3 or AA- or higher and issued by an issuer which has a Threshold Rating; (xxii) investment in money market mutual funds having a rating in the highest investment category granted thereby from S&P or Moody’s, including, without limitation any mutual fund for which the Trustee or an affiliate of the Trustee serves as investment manager, administrator, shareholder servicing agent, and/or custodian or subcustodian, notwithstanding that (i) the Trustee or an affiliate of the Trustee receives fees from funds for services rendered, (ii) the Trustee collects fees for services rendered pursuant to this Indenture, which fees are separate from the fees received from such funds, and (iii) services performed for such funds and pursuant to this Indenture may at times duplicate those provided to such funds by the Trustee or an affiliate of the Trustee; (xxiii) any investments authorized pursuant to California Government Code Section 53601 provided that at the time of their purchase such obligations have a Threshold Rating; and (xxiv) any other forms of investments, including repurchase agreements, approved by the Board and consented to by each Credit Provider then providing a Credit Support Instrument, subject to the terms of Section 11.03(b) hereof, for a Series of Highest Priority Obligations. “Person” means any natural person, firm, partnership, association, corporation, or public body. “Police Services Agreement” means the Police Services Agreement to be entered into by and between the State of California, acting by and through the California Highway Patrol, and the Commission, as amended, modified and supplemented in accordance with its terms. “Principal Office” means, with respect to the Trustee, the corporate trust office of the Trustee at St. Paul, Minnesota, Attention: Global Corporate Trust Services, and solely for purposes of the presentation of Obligations for transfer, exchange or payment, such other or additional offices as may be designated by the Trustee from time to time. “Project” means the I-15 Express Lanes Project and additional capital projects extending, improving or otherwise related to the Toll Road that the Commission determines to finance hereunder. “Project Costs” means all or any part of the following with respect to the Project: (a) the cost of study, design, acquisition, construction, expansion, enlargement, extension, reconstruction, restoration, repair and rehabilitation of the Project or portion thereof (including, but not limited to, indemnity and surety bonds, permits, taxes, licenses, insurance premiums, or other municipal or governmental charges lawfully levied or assessed during construction); 192 24 OHSUSA:765989901.12 (b) the cost of acquisition of all real or personal property, rights, rights-of- way, franchises, easements and interests acquired or used for the Project or portion thereof, (c) the cost of site preparation, including demolishing or removing any structures on land so acquired and the cost of acquiring any land to which the structures may be removed; (d) any cost of borings and other preliminary investigations necessary or incident to determining the feasibility or practicability of constructing the Project or portion thereof and any cost necessary or desirable to satisfy conditions associated with the issuance of any permit for the construction thereof (including the costs of environmental related mitigation required in connection therewith); (e) the cost of all machinery and equipment, vehicles, materials and rolling stock; (f) Costs of Issuance; (g) interest on Obligations or Sales Tax Bonds issued for the Project for the period prior to and during acquisition or completion of construction (or such longer period as may be allowed by applicable law), as determined by the Commission; (h) the cost of architectural, engineering, environmental feasibility, traffic and revenue, economic and demographic, appraisal, financial, and legal services; (i) cost of planning, investigations, studies, evaluations, plans, specifications, estimates, and administrative and other expenses that are necessary or incidental to the determination of the feasibility of constructing the Project or portion thereof or incidental to the obtaining of construction contracts or to the construction (including construction administration and inspection), acquisition or financing thereof and that constitute capital costs; (j) Operation and Maintenance Expenses occurring during and for a period of up to one year after acquisition or completion of construction, as determined by the Commission, provided that, if applicable, the Trustee has received an Opinion of Bond Counsel (which opinion may address either specific Operation and Maintenance Expenses or categories of Operation and Maintenance Expenses) to the effect that the treatment of such Operation and Maintenance Expenses as a Project Cost will not adversely affect the exclusion of interest on any Outstanding Obligations intended to be tax-exempt from gross income for federal income tax purposes; (k) the repayment or reimbursement of any Obligation, loan or advance for any of the foregoing; and (l) such other costs and expenses as are permitted by the Act or other applicable law at the time such Obligations are issued. “Project Fund” means the Fund by that name established pursuant to Section 5.02. 193 25 OHSUSA:765989901.12 “Purchase Price” means, with respect to Obligations, the amount set forth in this Indenture as the amount to be paid when such Obligations are tendered for purchase or deemed tendered for purchase in accordance with the provisions of this Indenture. “Qualified Swap Agreement” means a contract or agreement, intended to place Senior Lien Bonds or such investments as the Commission shall specify on the interest rate, currency, cash flow or other basis desired by the Commission, payments (other than payments of fees and expenses and termination payments) with respect to which the Commission has specified shall be payable from Revenue on a parity with the payment of Senior Lien Bonds, including, without limitation, any interest rate swap agreement, currency swap agreement, forward payment conversion agreement or futures contract, any contract providing for payments based on levels of, or changes in, interest rates, currency exchange rates, stock or other indices, any contract to exchange cash flows or a series of payments, or any contract, including, without limitation, an interest rate floor or cap, or an option, put or call, to hedge payment, currency, rate, spread or similar exposure, between the Commission and a Swap Party. “R & R Sweep Reserve Amount” means the amount of $________________. “Ramp Up Account” means the Account by that name created pursuant to Section 5.02 “Rating Agency” means, as and to the extent applicable to a Series of Obligations, each of Fitch, Moody’s, S&P or Kroll then maintaining a rating on such Series of Obligations at the request of the Commission. “Rating Category” means: (i) with respect to any long-term rating category, all ratings designated by a particular letter or combination of letters, without regard to any numerical modifier, plus or minus sign or other modifier; and (ii) with respect to any short-term or commercial paper rating category, all ratings designated by a particular letter or combination of letters and taking into account any numerical modifier, but not any plus or minus sign or other modifier. “Rating Confirmation” means written evidence from each Rating Agency then rating any Series of Obligations at the request of the Commission to the effect that, following the event that requires the Rating Confirmation, the then current rating for such Series of Obligations will not be lowered to a lower Rating Category or suspended or withdrawn solely as a result of the occurrence of such event. “RCTC 91 Express Lanes” means toll lanes and facilities on the portion of State Route 91 between the Orange County/Riverside County line and I-15 that constitute part of the Riverside SR-91 Corridor Improvement Project (as more fully defined in the 2013 Indenture). “Rebate Fund” means the Fund by that name created pursuant to Section 5.02. “Redemption Fund” means the Fund by that name created pursuant to Section 5.18. 194 26 OHSUSA:765989901.12 “Repair and Rehabilitation Fund” means the Fund by that name created pursuant to Section 5.02. “Repair and Rehabilitation Fund Permitted Expenditures” means capital expenditures reasonably necessary to repair or rehabilitate the Toll Road so that it remains in a condition that meets the performance and maintenance standards established by Caltrans for existing State-operated transportation facilities of substantially equivalent size, location and character. “Repair and Rehabilitation Sweep Reserve Account” means the Account by that name created pursuant to Section 5.02. “Representation Letter” means the letter or letters of representation from the Commission to, or other instrument or agreement with, a Securities Depository for Book-Entry Obligations, in which the Commission, among other things, makes certain representations to the Securities Depository with respect to the Book-Entry Obligations, the payment thereof and delivery of notices with respect thereto. “Reserve Facility” means a letter of credit, surety bond or insurance policy issued to the Trustee by a bank or company licensed to issue a surety bond or insurance policy guaranteeing the timely payment of the principal of and interest on the Obligations supported by the Reserve Facility. “Reserve Facility Costs” means amounts owed with respect to repayment of draws on a Reserve Facility, including interest thereon at the rate specified in the agreement pertaining to such Reserve Facility and expenses owed to the Reserve Facility Provider in connection with such Reserve Facility. “Reserve Facility Provider” means any provider of a Reserve Facility, any successor thereto or any replacement therefor. “Residual Fund” means the Fund by that name created pursuant to Section 5.02. “Residual Fund Scheduled Retained Balance” means, as of each June 1 and December 1 of the years specified in Schedule III hereto, the balance set forth in Schedule III hereto, such amounts being determined in accordance with the Base Case Financial Model (as that term is defined in the TIFIA Loan Agreement). “Revenue” means: (i) Toll Revenues; (ii) all interest or other income from investment of money in the Funds and Accounts established hereunder (excluding the Rebate Fund, the Surplus Fund, the Operation and Maintenance Fund, the Sales Tax Revenue Bonds Account within the Project Fund, and any Fund or Account established to hold the proceeds of a drawing on any Credit Support Instrument); (iii) proceeds of the Commission Loan, and (iv) all Swap Revenues; provided that for any calculations required by Article III hereof, “Revenue” shall not include Subsidy Payments. 195 27 OHSUSA:765989901.12 “Rule 15c2-12” means Securities and Exchange Commission Rule 15c2-12, adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time. “S&P” means Standard & Poor’s Ratings Services, a division of Standard & Poor’s Financial Services LLC, a subsidiary of The McGraw-Hill Companies, and its successors and assigns, except that if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, the term “S&P” shall be deemed to refer to any other nationally recognized statistical rating organization selected by the Commission. “Sales Tax Act” means the Riverside County Transportation Sales Tax Act, being Division 25 of the Public Utilities Code of the State of California (Section 240000 et seq.), as amended from time to time. “Sales Tax Eligible Project Costs” means Project Costs that are permitted to be paid from Sales Tax Revenues or the proceeds of Sales Tax Revenue Bonds in accordance with the provisions of the Sales Tax Act, the Ordinance, and the Sales Tax Revenue Bond Indenture, if applicable. “Sales Tax Revenue Bond Indenture” means that certain Indenture, dated as of June 1, 2008, as amended and supplemented, by and between the Commission and U.S. Bank National Association, as trustee. “Sales Tax Revenue Bonds” means Riverside County Transportation Commission Sales Tax Revenue Bonds (Limited Tax Bonds) issued pursuant to the Sales Tax Revenue Bond Indenture. “Sales Tax Revenue Bonds Account” means the Account by that name created within the Project Fund pursuant to Section 5.02. “Sales Tax Revenues” means the amounts distributed to the Commission, pursuant to Section 5.02(B) of the Sales Tax Revenue Bond Indenture, on account of the retail transactions and use tax imposed in the County of Riverside pursuant to the Sales Tax Act and the Ordinance. “Sales Tax Trustee” means the Trustee under the Sales Tax Revenue Bond Indenture. “Scheduled Repair and Rehabilitation Fund Required Deposit” means for each Monthly Funding Date, one-twelfth (1/12) of the amount set forth for such Fiscal Year in Schedule II hereto, as such Schedule may be amended from time to time. “Second Lien Obligations” means (i) any Obligations issued or incurred hereunder that are subordinated in right of payment and lien priority to the Senior Lien Obligations and senior in right of payment and lien priority to the Subordinate Obligations, provided, however, that upon the occurrence of a Bankruptcy Related Event, Subordinate Obligations in the form of or securing payment of a TIFIA Loan shall be Senior Obligations, and (ii) any related Hedging Obligations. 196 28 OHSUSA:765989901.12 “Second Lien Obligations Account” means the Account by that name created within the Project Fund pursuant to Section 5.02. “Second Lien Obligations Fund” means the Fund by that name created pursuant to Section 5.02. “Second Lien Obligations Interest Account” means the Account by that name created within the Second Lien Obligations Fund pursuant to Section 5.02. “Second Lien Obligations Principal Account” means the Account by that name created within the Second Lien Obligations Fund pursuant to Section 5.02. “Second Lien Obligations Reserve Fund” means the Fund by that name created pursuant to Section 5.02. “Second Lien Obligations Reserve Requirement” for any Second Lien Obligations means the amount, if any, specified by a Supplemental Indenture as the amount required to be held in the Second Lien Obligations Reserve Fund, or an Account thereof, for the payment of principal of and interest on the Outstanding Second Lien Obligations secured by such Fund or Account. “Secured Creditors” means, collectively, (i) the Trustee on behalf of the Bondholders, (ii) any Swap Party, and (iii) any other trustee, holder or creditor of any Obligations. “Securities Depository” means DTC or any other trust company or other entity that provides a book-entry system for the registration of ownership interests in securities and which is acting as security depository for Book-Entry Obligations. “Senior Lien Bonds” means the bonds or commercial paper identified as the Riverside County Transportation Commission Toll Revenue Senior Lien Bonds authorized by, issued in accordance with, and at any time Outstanding pursuant to, this Indenture. “Senior Lien Obligations” means collectively, Senior Lien Bonds and Parity Obligations issued or incurred hereunder and, upon the occurrence of a Bankruptcy Related Event, Subordinate Obligations in the form of or securing payment of a TIFIA Loan. “Senior Lien Obligations Account” means the Account by that name created within the Project Fund pursuant to Section 5.02. “Senior Lien Obligations Fund” means the Fund by that name created pursuant to Section 5.02. “Senior Lien Obligations Interest Account” means the Account by that name created within the Senior Lien Obligations Fund pursuant to Section 5.02. “Senior Lien Obligations Principal Account” means the Account by that name created within the Senior Lien Obligations Fund pursuant to Section 5.02. 197 29 OHSUSA:765989901.12 “Senior Lien Obligations Reserve Fund” means the Fund by that name created pursuant to Section 5.02. “Senior Lien Obligations Reserve Requirement” for any Senior Lien Obligations means the amount, if any, specified by a Supplemental Indenture as the amount required to be held in the Senior Lien Obligations Reserve Fund, or an Account thereof, for the payment of principal of and interest on the Outstanding Senior Lien Obligations secured by such Fund or Account. “Series” means all Obligations identified in this Indenture or any Supplemental Indenture as a separate Series. “Short-Term Put Obligation” means an Obligation with a stated maturity of ten years or less, the principal of which the Commission determines on or before the date of issuance that it intends to pay from remarketing proceeds or proceeds of refunding obligations. “SIFMA Index” means Securities Industry and Financial Markets Association Municipal Swap Index as of the most recent date such index was published by the Securities Industry and Financial Markets Association or any successor thereto, or in the event such index is no longer published by the Securities Industry and Financial Markets Association or any successor thereto, such comparable replacement index as shall be published by the Securities Industry and Financial Markets Association or any successor thereto. In the event that such comparable replacement index is no longer published by the Securities Industry and Financial Markets Association or any successor thereto, an alternative index shall be selected by the Commission. “Sinking Fund Installment” means, with respect to any Series of Obligations, each amount so designated for the Term Bonds of such Series in the Supplemental Indenture providing for the issuance of such Series of Obligations requiring payments by the Commission to be applied to the retirement of such Series of Obligations on and prior to the stated maturity date thereof. “Special Project” shall mean any project which is so designated by the Commission in a resolution of the Board a copy of which is delivered to the Trustee. “State” means the State of California. “Subordinate Obligations” means any Obligations that are subordinated in right of payment and lien priority to the Senior Lien Obligations and the Second Lien Obligations, including the Subordinate Obligations in the form of or securing payment of any TIFIA Loans (that are not issued as Senior Lien Obligations) prior to the occurrence of a Bankruptcy Related Event. “Subordinate Obligations Account” means the Account by that name created within the Project Fund pursuant to Section 5.02. “Subordinate Obligations Fund” means the Fund by that name created pursuant to Section 5.02. 198 30 OHSUSA:765989901.12 “Subordinate Obligations Interest Account” means the Account by that name created within the Subordinate Obligations Fund pursuant to Section 5.02. “TIFIA Loan Prepayment Account” means the Account by that name created pursuant to Section 5.02. “Subordinate Obligations Principal Account” means the Account by that name created within the Subordinate Obligations Fund pursuant to Section 5.02. “Subordinate Obligations Reserve Fund” means the Fund by that name created pursuant to Section 5.02. “Subordinate Obligations Reserve Requirement” for any Subordinate Obligations means the amount, if any, specified by a Supplemental Indenture as the amount required to be held in the Subordinate Obligations Reserve Fund, or an Account thereof, for the payment of principal of and interest on the Outstanding Subordinate Obligations secured by such Fund or Account. “Subsidy Payments” means, (a) with respect to a Series of Obligations issued under Section 54AA of the Code, the amounts relating to such Series of Obligations which are payable by the Federal government under Section 6431 of the Code, which the Commission has elected to receive under Section 54AA(g)(1) of the Code, and (b) with respect to a Series of Obligations issued under any other provision of the Code that creates a substantially similar direct-pay subsidy program, the amounts relating to such Series of Obligations which are payable by the Federal government under the applicable provision of the Code which the Commission has elected to receive under the applicable provisions of the Code. “Substantial Completion” means the opening of a Project fully to vehicular traffic. “Substantial Completion Date” means, with respect to the I-15 Express Lanes Project, the date on which the Toll Road portion of the I-15 Express Lanes Project opens for vehicular traffic for tolling, and, with respect to any other Project, the Substantial Completion Date for such Project, if any, set forth in a Supplemental Indenture providing for the issuance of Obligations to finance such Project. “Supplemental Indenture” means any indenture executed and delivered by the Commission and the Trustee in accordance with this Indenture that is stated to be a supplemental indenture hereto. “Surplus Fund” means the Fund by that name created pursuant to Section 5.02. “Swap” means any interest rate swap agreement, currency swap agreement, forward payment conversion agreement or futures contract, any contract providing for payments based on levels of, or changes in, interest rates, currency exchange rates, stock or other indices, any contract to exchange cash flows or a series of payments, or any contract, including, without limitation, an interest rate floor or cap, or an option, put or call, to hedge payment, currency, rate, 199 31 OHSUSA:765989901.12 spread or similar exposure, between the Commission and a Swap Party, which is not a Qualified Swap Agreement. “Swap Party” means each entity that is a party to either a Qualified Swap Agreement or a Swap entered into with the Commission. “Swap Revenues” means any amount paid by a Swap Party to the Commission pursuant to any Qualified Swap Agreement or Swap, after any netting of payments required by such Qualified Swap Agreement or Swap, as applicable, and any payments paid to the Commission by a Swap Party as consideration for termination or amendment of a Qualified Swap Agreement or Swap, as applicable. “Tax Certificate” means the Tax Certificate delivered by the Commission at the time of the issuance of a Series of Obligations, as the same may be amended and supplemented in accordance with its terms. “Term Bonds” means Obligations of any Series that are payable on or before their specified maturity dates from Sinking Fund Installments established for that purpose in the Supplemental Indenture providing for the issuance of such Series of Obligations, which Sinking Fund Installments are calculated to retire such Obligations on or before their specified maturity dates. “Threshold Rating” means a long term rating of either A3 or A- (or their equivalents) or higher or a short term rating of either P-2 or A-2 (or their equivalents) or higher from a Rating Agency, as applicable. “TIFIA Debt Service Payment Commencement Date” means the fifth (5th) anniversary of the Substantial Completion Date or, if such date does not fall on an Interest Payment Date, the first Interest Payment Date to occur prior to the fifth (5th) anniversary of the Substantial Completion Date. “TIFIA Lender” means the United States Department of Transportation, acting by and through the Federal Highway Administrator, for the purpose of making one or more TIFIA Loans to the Commission. “TIFIA Loan” means each loan made to the Commission by the TIFIA Lender pursuant to a TIFIA Loan Agreement and secured by Toll Revenues hereunder. “TIFIA Loan Agreement” means the Loan Agreement, dated as of [______, 20__], by and between the Commission and the TIFIA Lender, and any other loan agreement by and between the Commission and the TIFIA Lender secured by Toll Revenues hereunder and, in each case, any amendments or supplements thereto permitted hereby and thereby. “TIFIA Loan Life Coverage Ratio” has the meaning specified for such term (or any similar term) in the applicable TIFIA Loan Agreement. “TIFIA Loan Prepayment Account” means the account of name created pursuant to Section 5.02. 200 32 OHSUSA:765989901.12 “TIFIA Loan Prepayment Commencement Date” means the first Monthly Funding Date occurring after the TIFIA Debt Service Payment Commencement Date. “TIFIA Mandatory Debt Service” means the portion of a TIFIA Loan which is unconditionally required to be paid in accordance with, and pursuant to, the terms of the TIFIA Loan Agreement relating thereto, as of the date of calculation of TIFIA Mandatory Debt Service (assuming, for purposes of projected debt service, that the full amount of such TIFIA Loan will be disbursed). “TIFIA Obligations” has the meaning specified for the term “Obligations” (or any similar term) in the applicable TIFIA Loan Agreement. “TIFIA Payment Date” has the meaning specified for the term “Payment Date” (or any similar term) in the applicable TIFIA Loan Agreement. “TIFIA Scheduled Debt Service” means, with respect to any TIFIA Payment Date occurring on or after the TIFIA Debt Service Payment Commencement Date, the total debt service to be made on such TIFIA Payment Date with respect to the applicable TIFIA Loan. “Toll Agreements” means the Operating Agreement, the Design-Build Contract, the Design-Build Parent Guaranties, the Caltrans DB Cooperative Agreement and the Toll Facility Agreement, and any amendments or supplements thereto permitted thereby and hereby. “Toll Facility Agreement” means that certain Toll Facility Agreement, dated as of September 29, 2016, by and between the Commission and Caltrans relating to the Commission’s leasehold rights to Caltrans I-15 right-of-way in Riverside County and Caltrans’ role in oversight of the Project, and any amendments or supplements thereto permitted thereby and hereby. “Toll Revenue Fund” means the Fund by that name created pursuant to Section 5.02. “Toll Revenues” means (a) toll revenues, user fees, fines, rents or other similar charges payable for use of the Toll Road, as well as fines and penalties and interest thereon collected as a result of a failure to pay any such amounts, (b) proceeds of insurance payable to or received by the Commission with respect to the Toll Road (whether by way of claims, return of premiums, ex gratia settlements or otherwise), including proceeds from business interruption insurance and loss of advance profits insurance, except for proceeds of fire and other casualty insurance that are deposited to the Insurance and Condemnation Proceeds Account of the Project Fund and actually applied or reserved for application to the repair, restoration or replacement of the Toll Road, (c) proceeds of any condemnation awards with respect to the Toll Road, except to the extent deposited to the Insurance and Condemnation Proceeds Account of the Project Fund and actually applied or reserved for application to the replacement of the Toll Road, (d) liquidated damages for delayed completion of a Project payable to the Commission under a construction contract relating to the Toll Road or a portion thereof, (e) proceeds of credit support provided by the Toll Operator pursuant to the Operating Agreement, and (f) any other incidental or related fees or charges; but excluding therefrom cash advances representing deposits against future toll payments from users or potential users of the Toll Road. 201 33 OHSUSA:765989901.12 “Toll Road” means lanes of a street, road or highway upon which the Commission has all right, power and authority pursuant to law to impose tolls, and upon which tolls are imposed by the Commission using any of the following tolling strategies: (a) general purpose or generally-applicable tolls, (b) tolls that may be levied and may vary according to levels of congestion anticipated or experienced or according to the occupancy of the vehicle, (c) any combination of (a) and (b), and (d) any other tolling strategy the Commission may determine appropriate on a facility-by-facility basis; and the related tolling facilities, as such tolled lanes and related facilities may from time to time be expanded, improved, upgraded, enlarged, or enhanced, but only to the extent that: (i) the Commission irrevocably designates in writing that such toll lanes and related facilities, and any expansion, improvement, upgrade, enlargement or enhancement constitutes a Toll Road generating Toll Revenues hereunder and (ii) that (x) the additional Operation and Maintenance Expenses associated with any such expansion, improvement, upgrade, enlargement or enhancement and (y) any additional Obligations issued to finance the costs of any such expansion, improvement, upgrade, enlargement or enhancement, shall not result in debt service coverage ratios for the Subordinate Obligations lower than those stated in the Base Case Model (as defined in the TIFIA Loan Agreement) delivered to the TIFIA Lender on the Effective Date (as defined in the TIFIA Loan Agreement). “Toll Road” shall not include any Special Project. “Toll Road” initially means any such tolled lanes and facilities (including structures, on-ramps, connector roads, bridges, and roadways that are on, necessary for, or related to the construction or operation of the Toll Road) on the portion of I-15 between the I-15/Cajalco Road interchange and the I-15/SR-60 interchange that constitute the I-15 Express Lanes Project. “Toll Services Provider” means Kapsch Traffic Com Transportation NA Inc. or any successor, as operator of the Toll Road responsible for the collection of tolls and fees and the establishment and maintenance of customer accounts and records, pursuant to the Operating Agreement. “Traffic Consultant” means Stantec Consulting or such other traffic and revenue consultant or firm of nationally-recognized traffic and revenue consultants experienced in performing the duties for which a Traffic Consultant is required to be employed pursuant to the provisions of this Indenture selected by the Commission; provided such selection is not objected to in written notice to the Trustee and the Commission by the TIFIA Lender within 15 Business Days as being unacceptable. “Trust Estate” has the meaning specified in the Granting Clauses herein. “2017 Sales Tax Revenue Bonds” means the Riverside County Transportation Commission Sales Tax Revenue Bonds (Limited Tax Bonds), 2017 Series A. “Written Engineer’s Certificate” means an instrument in writing signed by a Consulting Engineer stating that an Alternative Repair and Rehabilitation Fund Required Deposit is necessary to pay for Repair and Rehabilitation Fund Permitted Expenditures for a Fiscal Year due to at least one of the following: (i) reasonably unforeseen expenditures incurred to the extent necessary to respond to emergency conditions; or (ii) reasonably unforeseen expenditures to the extent necessary to be made to maintain the Project in a state of good repair and in a condition 202 34 OHSUSA:765989901.12 that meets the performance and maintenance standards established by Caltrans for existing State- operated transportation facilities of substantially equivalent size, location and character. “Written Request of the Commission” means an instrument in writing signed by an Authorized Representative. ARTICLE II THE OBLIGATIONS Section 2.01 Authorization and Purposes. Obligations in the form of Senior Lien Obligations, Second Lien Obligations or Subordinate Obligations may be issued hereunder, in book-entry form or otherwise, from time to time as the issuance thereof is approved by the Commission. The maximum Bond Obligation of Obligations that may be issued hereunder is not limited; subject, however, to any limitations contained in the Act and to the right of the Commission, which is hereby reserved, to limit the initial Bond Obligation of Obligations that may be issued or Outstanding hereunder. The Senior Lien Bonds are designated generally as “Riverside County Transportation Commission Toll Revenue Senior Lien Bonds,” each Series thereof to bear such additional designation as may be necessary or appropriate to distinguish such Series from every other Series of Senior Lien Obligations. The Second Lien Obligations are designated generally as “Riverside County Transportation Commission Toll Revenue Second Lien Bonds,” each Series thereof to bear such additional designation as may be necessary or appropriate to distinguish such Series from every other Series of Second Lien Obligations. The Subordinate Obligations are designated generally as “Riverside County Transportation Commission Toll Revenue Subordinate Bonds,” each Series thereof to bear such additional designation as may be necessary or appropriate to distinguish such Series from every other Series of Subordinate Obligations. The Obligations may be issued in such Series as from time to time shall be established and authorized by the Commission, subject to the covenants, provisions and conditions herein. Each separate Series of Obligations shall be authorized by the Commission in a Supplemental Indenture. No Obligations may be issued under the provisions of this Indenture except in accordance with this Article and Article III. Obligations may be issued for the purpose of financing the I-15 Express Lanes Project using a design-build procurement process, or for any other purpose authorized by the Act and this Indenture. Section 2.02 General Terms of Obligations. Each Obligation shall be secured hereby and shall bear interest and shall be payable and be additionally secured and have such other terms as shall be specified in its Supplemental Indenture, or if not specified therein, as specified by an Authorized Representative pursuant to Section 2.06. The principal and Purchase Price of, premium, if any, and interest on the Obligations shall be payable in lawful currency of the United States of America, except as otherwise specified in a Supplemental Indenture. During any period in which any Obligations are Book-Entry Obligations, payment of debt service on such Book-Entry Obligations shall be made to the Securities Depository, or its Nominee, and in accordance with arrangements among the Commission, the Trustee and the Securities Depository. During any period in which any 203 35 OHSUSA:765989901.12 Obligations are not Book-Entry Obligations, unless otherwise specified in a Supplemental Indenture, the principal and Purchase Price of and premium, if any, on all such Obligations shall be payable by wire or check at the Principal Office of the Trustee upon the presentation and surrender of such Obligations as the same become due and payable, and the interest on such Obligations shall be paid by wire or check drawn upon the Trustee and mailed on the applicable interest payment date to the persons in whose names the Obligations are registered on the registration books maintained by the Trustee at the close of business on the record date for such interest payment. Section 2.03 Execution. The Obligations shall be executed in the name and on behalf of the Commission by the facsimile or manual signature of the Chairperson of the Board or any Vice Chairperson of the Board and shall be countersigned by the facsimile or manual signature of the Chief Financial Officer of the Commission, and shall have the official seal of the Commission attached or affixed thereon in manual or facsimile form. Unless otherwise provided in any Supplemental Indenture, the Obligations shall then be delivered to the Trustee for authentication by the Trustee. In case any of the officers who shall have signed or attested any of the Obligations shall cease to be such officer or officers of the Commission before the Obligations so signed or attested shall have been authenticated or delivered by the Trustee or issued by the Commission, such Obligations may nevertheless be authenticated, delivered and issued and, upon such authentication, delivery and issue, shall be as binding upon the Commission as though those who signed and attested the same had continued to be such officers of the Commission, and also any Obligation may be signed and attested on behalf of the Commission by such persons as at the actual date of execution of such Obligation shall be the proper officers of the Commission although at the nominal date of such Obligation any such person shall not have been such officer of the Commission. Section 2.04 Certificate of Authentication. No Obligations shall be secured hereby or entitled to the benefit hereof or shall be or become valid or obligatory for any purpose unless there shall be endorsed thereon a certificate of authentication, substantially in the form set forth in the form of Obligation referred to in Section 2.05 hereof, executed by the Trustee; and such certificate on any Obligation issued by the Commission shall be conclusive evidence that such Obligation has been duly authenticated and delivered hereunder. Section 2.05 Forms of Obligations. The Obligations, the Trustee’s certificate of authentication and the form of assignment shall be in substantially the forms specified in a Supplemental Indenture or if not specified therein, as specified by an Authorized Representative pursuant to Section 2.06, and may have such letters, numbers or other marks of identification (including, but not limited to, the Series designation provided for in Section 2.01) and such legends and endorsements placed thereon as may be required to comply with any applicable laws or rules or regulations, or as may, consistent herewith, be determined by an Authorized Representative. The Obligations shall be in either typewritten or printed form, as an Authorized Representative shall direct, provided that any expenses incurred in connection therewith shall be paid by the Commission. Section 2.06 Issuance, Sale and Delivery of Obligations; Application of Proceeds. The Obligations of each Series shall be delivered by the Trustee in accordance with a Written Request of the Commission, which may be Electronic, in the manner specified herein. 204 36 OHSUSA:765989901.12 Said Written Request of the Commission shall specify the following terms for the Obligations then being issued to the extent such terms are not set forth in the Supplemental Indenture creating such Series of Obligations and are applicable to such Obligations: whether such Obligation is a Senior Lien Bond, Parity Obligation, Second Lien Obligation or Subordinate Obligation hereunder; Series designation; Authorized Denominations; form of such Obligation; book-entry provisions, if any; maturity date or dates or maturity determination method, which may vary for Obligations within such Series; principal amount; issue date; interest rate or interest rate determination method, which may vary for Obligations within such Series; record date for interest payments; sinking fund provisions, if any; required reserves, if any; redemption provisions, if any; tender provisions, if any; additional security, if any; and any other terms and conditions that are not inconsistent with this Indenture. Upon the delivery of each Series of Obligations, the proceeds shall immediately be applied and deposited as set forth in the applicable Supplemental Indenture. Section 2.07 Mutilated, Lost, Stolen or Destroyed Obligations. If any Obligation is mutilated, lost, stolen or destroyed, the Commission shall execute and the Trustee shall authenticate and deliver a new Obligation of the same Series, maturity date, principal amount and tenor in lieu of and in substitution for the Obligation mutilated, lost, stolen or destroyed; provided that there shall be first furnished to the Trustee evidence satisfactory to the Trustee of the ownership of such Obligation and of such loss, theft or destruction (or, in the case of a mutilated Obligation, such mutilated Obligation shall first be surrendered to the Trustee), together with indemnity satisfactory to the Trustee and compliance with such other reasonable regulations as the Commission and Trustee may prescribe. Subject to the proviso set forth in the preceding sentence, if any such Obligation shall have matured or a redemption date pertaining thereto shall have passed, instead of issuing a new Obligation, the Commission may pay the same without surrender thereof. The Commission and the Trustee may charge the Holder of such Obligation with their reasonable fees and expenses in this connection. Section 2.08 Exchangeability and Transfer of Obligations; Persons Treated as Holders. The Commission hereby directs the Trustee, which is hereby constituted and appointed the bond registrar for the Obligations, to keep books for the registration of the Obligations and for the registration of transfer of the Obligations as provided herein. Any registered owner of an Obligation, in person or by its duly authorized attorney, may transfer title to its Obligation on the books of registration kept by the Trustee, upon surrender thereof at the Principal Office of the Trustee, together with a written instrument of transfer (in substantially the form of assignment attached to the Obligation or as provided in its Supplemental Indenture) executed by the registered owner or its duly authorized attorney, and upon surrender for registration of transfer of any Obligation, the Commission shall execute, and the Trustee shall authenticate and deliver in the name of the transferee or transferees, a new Obligation or Obligations of the same Series, maturity date, Bond Obligation and tenor as the Obligation surrendered. Obligations may be exchanged upon surrender thereof at the Principal Office of the Trustee for Obligations of the same Series, maturity date, Bond Obligation and tenor as the Obligations being exchanged. The Commission shall execute and the Trustee shall authenticate 205 37 OHSUSA:765989901.12 and deliver Obligations that the registered owner making the exchange is entitled to receive, bearing numbers not contemporaneously then outstanding. Such registrations of transfers or exchanges of Obligations shall be without charge to the registered owner of such Obligations, but any taxes or other governmental charges required to be paid with respect to the same shall be paid by the registered owner of the Obligation requesting such registration of transfer or exchange as a condition precedent to the exercise of such privilege. Any service charge made by the Trustee for any such registration, transfer or exchange shall be paid by the Commission. The Trustee shall not register any transfer of any Obligation after notice calling such Obligation (or portion thereof) for redemption or partial redemption or notice of mandatory tender with respect thereto has been given and prior to such redemption or mandatory tender, as the case may be, except, in the case of any Obligation to be redeemed in part, the portion thereof not to be redeemed. The person in whose name any Obligation shall be registered shall be deemed and regarded as the absolute owner thereof for all purposes, and payment of or on account of either principal, premium, if any, or interest shall be made only to or upon the order of the registered owner thereof or his duly authorized attorney, but such registration may be changed as hereinabove provided. All such payments shall be valid and effectual to satisfy and discharge the liability upon such Obligation to the extent of the sum or sums so paid. All Obligations issued upon any transfer or exchange of Obligations shall be legal, valid and binding obligations of the Commission, evidencing the same debt, and entitled to the same security and benefits under this Indenture, as the Obligations surrendered upon such transfer or exchange. Section 2.09 Cancellation. All Obligations that have been surrendered to the Trustee pursuant to Section 2.07 or 2.08 of this Indenture and all Obligations that have been paid or redeemed, either at or prior to maturity, except as otherwise provided in a Supplemental Indenture, shall be cancelled and destroyed by the Trustee and a certificate of destruction shall be delivered to the Commission upon its request. Section 2.10 Senior Lien Obligations Ratably Secured. All Senior Lien Obligations issued hereunder that by their terms are stated to be equally and ratably secured by this Indenture without preference, priority or distinction on account of the Series or the actual time or times of the authentication, delivery or maturity of such Senior Lien Obligations shall be so equally and ratably secured so that, subject to any differences specified in this Indenture, all such Senior Lien Obligations at any time Outstanding hereunder shall have the same right, lien and preference under and by virtue of this Indenture and shall all be equally and ratably secured hereby with like effect as if they were of the same Series and they had all been executed, authenticated and delivered simultaneously on the date hereof, whether the same, or any of them, shall actually be disposed of at such date, or whether they, or any of them, shall be disposed of at some future date; provided, however, that the moneys in any Account within the Senior Lien Obligations Reserve Fund shall only secure the Series of Senior Lien Obligations to which such Account relates. Upon the occurrence of a Bankruptcy Related Event of which the Trustee shall 206 38 OHSUSA:765989901.12 be notified in writing, any Account within the Subordinate Obligations Reserve Fund that secures payment of the principal and interest on a Subordinate Obligation in the form of or securing payment of a TIFIA Loan, will become an Account within the Senior Lien Obligations Reserve Fund, will be funded on a parity with any other Accounts within the Senior Lien Obligations Reserve Fund and will be available only to pay principal and interest on the Senior Lien Obligation in the form of or securing payment of such TIFIA Loan. The Senior Lien Obligation in the form of or securing payment of a TIFIA Loan will not be secured by any other Account within the Senior Lien Obligations Reserve Fund. Section 2.11 Second Lien Obligations Ratably Secured. All Second Lien Obligations issued hereunder that by their terms are stated to be equally and ratably secured by this Indenture without preference, priority or distinction on account of the Series or the actual time or times of the authentication, delivery or maturity of such Second Lien Obligations shall be so equally and ratably secured so that, subject to any differences specified in this Indenture, all such Second Lien Obligations at any time Outstanding hereunder shall have the same right, lien and preference under and by virtue of this Indenture and shall all be equally and ratably secured hereby with like effect as if they were of the same Series and they had all been executed, authenticated and delivered simultaneously on the date hereof, whether the same, or any of them, shall actually be disposed of at such date, or whether they, or any of them, shall be disposed of at some future date; provided, however, that the moneys in any Account within the Second Lien Obligations Reserve Fund shall only secure the Series of Second Lien Obligations to which such Account relates. Section 2.12 Subordinate Obligations Ratably Secured. All Subordinate Obligations issued hereunder that by their terms are stated to be equally and ratably secured by this Indenture without preference, priority or distinction on account of the Series or the actual time or times of the authentication, delivery or maturity of such Subordinate Obligations shall be so equally and ratably secured so that, subject to any differences specified in this Indenture, all such Subordinate Obligations at any time Outstanding hereunder shall have the same right, lien and preference under and by virtue of this Indenture and shall all be equally and ratably secured hereby with like effect as if they were of the same Series and they had all been executed, authenticated and delivered simultaneously on the date hereof, whether the same, or any of them, shall actually be disposed of at such date, or whether they, or any of them, shall be disposed of at some future date; provided, however, that the moneys in any Account within the Subordinate Obligations Reserve Fund shall only secure the Series of Subordinate Obligations to which such Account relates. Upon the occurrence of a Bankruptcy Related Event of which the Trustee shall be notified in writing, any Account within the Subordinate Obligations Reserve Fund that secures payment of the principal and interest on a Subordinate Obligation in the form of or securing payment of a TIFIA Loan, will become an Account within the Senior Lien Obligations Reserve Fund, will be funded on a parity with any other Accounts within the Senior Lien Obligations Reserve Fund and will be available only to pay principal and interest on the Parity Obligation in the form of or securing payment of such TIFIA Loan. The Parity Obligation in the form of or securing payment of a TIFIA Loan will not be secured by any other Account within the Senior Lien Obligations Reserve Fund. Section 2.13 Book-Entry Only System. Unless an Authorized Representative shall otherwise direct or unless otherwise specified in a Supplemental Indenture, all Obligations 207 39 OHSUSA:765989901.12 issued hereunder shall be issued as Book-Entry Obligations in fully registered form. Book-Entry Obligations shall be registered in the name of the Securities Depository or its Nominee as directed by such Securities Depository. DTC shall act as the initial Securities Depository and has designated Cede & Co. as its Nominee. Beneficial Owners of Obligations will not receive physical delivery of bond certificates except as provided hereinafter. For so long as DTC shall continue to serve as Securities Depository for the Obligations as provided herein, all transfers of beneficial ownership interests will be made by book-entry only, and no person purchasing, selling or otherwise transferring beneficial ownership of Obligations is to receive, hold or deliver any Obligation certificate. With respect to Obligations registered in the name of Cede & Co., as Nominee of DTC, the Commission and the Trustee shall have no responsibility or obligation to any participant in DTC (each, a “DTC Participant”) or to any person on whose behalf a DTC Participant holds an interest in the Obligations. Without limiting the immediately preceding sentence, the Commission and the Trustee shall have no responsibility or obligation with respect to (i) the accuracy of the records of DTC, Cede & Co. or any DTC Participant with respect to any ownership interest in the Obligations, (ii) the delivery to any DTC Participant or any other person, other than a registered owner of the Obligations, as shown on the registration books, of any notice with respect to the Obligations, including any notice of redemption or mandatory tender, or (iii) the payment to any DTC Participant or any other person, other than a registered owner of the Obligations, as shown in the registration books, of any amount with respect to principal or Purchase Price of, or premium, if any, or interest on, the Obligations. Replacement Obligations may be issued directly to Beneficial Owners of Obligations other than DTC, or its Nominee, but only in the event that: (i) DTC determines not to continue to act as Securities Depository for the Obligations (which determination shall become effective no less than 90 days after written notice to such effect to the Commission and the Trustee); or (ii) an Authorized Representative has advised DTC of its determination (which determination is conclusive as to DTC and Beneficial Owners of the Obligations) that DTC is incapable of discharging its duties as Securities Depository for the Obligations; or (iii) the Commission has determined (which determination is conclusive as to DTC and the Beneficial Owners of the Obligations) that the interests of the Beneficial Owners of the Obligations might be adversely affected if such book-entry only system of registration and transfer is continued. Upon occurrence of any of the foregoing events, the Commission shall use its best efforts to attempt to locate another qualified Securities Depository. If the Commission fails to locate another qualified Securities Depository to replace DTC, the Commission shall cause to be authenticated and delivered replacement Obligations, in certificate form, to the Beneficial Owners of the Obligations. In the event that the Commission makes the determination noted in (ii) or (iii) above (provided that the Commission undertakes no obligation to make any investigation to determine the occurrence of any events that would permit the Commission to make any such determination), and has made provisions to notify the Beneficial Owners of Obligations of such determination by mailing an appropriate notice to DTC and its Nominee, the Commission shall cause to be issued replacement Obligations in certificate form to Beneficial Owners of the Obligations as shown on the records of DTC provided to the Commission. Whenever, during the term of the Obligations, the Beneficial Ownership thereof is determined by book-entry at DTC, (i) the requirements in this Indenture of holding, delivering or 208 40 OHSUSA:765989901.12 transferring Obligations shall be deemed modified to require the appropriate person or entity to meet the requirements of DTC as to registering or transferring the book entry to produce the same effect and (ii) delivery of the Obligations and notices to Bondholders will be in accordance with arrangements among the Commission, the Trustee and DTC notwithstanding any provision of this Indenture to the contrary. The Trustee and the Commission, acting by and through an Authorized Representative, are authorized to enter into a letter of representations with DTC to implement the book-entry only system of Obligation registration described above and all payments of principal, Purchase Price, interest and premium, if any, shall be made in accordance with the letter of representations with DTC. If at any time, DTC ceases to hold the Obligations in book-entry form, all references herein to DTC shall be of no further force or effect. ARTICLE III ADDITIONAL OBLIGATIONS Section 3.01 Restrictions on Issuance of Senior Lien Obligations. Subsequent to the initial issuance of Obligations pursuant to this Indenture, Senior Lien Obligations may be issued if the requirements of (a), (b), (c) or (d) below are met. (a) The Senior Lien Obligations are issued for purposes of refunding Outstanding Senior Lien Obligations by providing funds for the payment of any or all of the following: (1) The Bond Obligation, redemption or purchase price (including premium, if any) of the Outstanding Senior Lien Obligations to be refunded; (2) All expenses incident to the calling, retiring or paying of such Outstanding Senior Lien Obligations, the Costs of Issuance of such refunding Senior Lien Obligations, and any termination payments or other payments to the holders of obligations of the Commission entered into pursuant to California Government Code Section 5922 (or any similar statute) related to such Outstanding Obligations; (3) Interest on all Outstanding Senior Lien Obligations to be refunded to the date such Senior Lien Obligations will be called for redemption or paid at maturity; (4) Interest on the refunding Senior Lien Obligations from the date thereof to the date of payment or redemption of the Senior Lien Obligations or to be refunded; (5) Amounts necessary to fund a Senior Lien Obligations Reserve Fund; and the Commission delivers a Certificate of the Commission to the effect that the Commission projects that (i) the Average Annual Debt Service on all Outstanding Obligations after the 209 41 OHSUSA:765989901.12 issuance of the proposed additional Senior Lien Obligations will be less than the Average Annual Debt Service on all Outstanding Obligations prior to the issuance of such proposed Senior Lien Obligations; (ii) the Annual Debt Service on all Outstanding Obligations after the issuance of the proposed additional Senior Lien Obligations will be less than the Annual Debt Service on all Outstanding Obligations prior to such issuance in each year through the stated maturity date of the Senior Lien Obligations being refunded; and that (iii) if the maturity date of such additional Senior Lien Obligations to be issued extends to a date later than the stated final maturity date of the Obligations being refunded, then Net Revenue in each Fiscal Year from and after the stated final maturity date of such refunded Obligations is projected to be not less than one hundred thirty percent (130%) of the Annual Debt Service payable in each such Fiscal Year with respect to all Outstanding Obligations, including the proposed additional Senior Lien Obligations. (b) The Commission delivers a Certificate of the Commission supported by a report of the Traffic Consultant to the effect that, as of the date of issuance of the additional Senior Lien Obligations (which may be issued to refund Sales Tax Revenue Bonds, the proceeds of which were used to finance the Project): (1) Net Revenue during the preceding Calculation Period ending not more than ninety (90) days prior to the date of delivery of the proposed additional Senior Lien Obligations, was sufficient to satisfy the requirements of Section 6.03(a) of this Indenture (which report may assume that a revision of the tolls that was approved and implemented by the Commission subsequent to the beginning of such Calculation Period had been in effect for the entire Calculation Period); (2) projected Net Revenue for the next Fiscal Year over the term of the proposed additional Senior Lien Obligations is expected to be sufficient to satisfy the requirements of Section 6.03(a) of this Indenture in each Fiscal Year (treating for purposes of such calculation TIFIA loans that are Senior Lien Obligations as Senior Lien Obligations). In calculating projected Net Revenue, the Traffic Consultant shall take into account amounts projected to be received from any adopted toll increase or increases (provided that no additional approvals need to be obtained and no additional requirements need to be satisfied in order to implement any such increase or increases) and any additional toll lanes and facilities to be designated as included within the definition of Toll Road; (3) if a TIFIA Loan Agreement is outstanding, projected Total Loan Life Coverage (as defined in the TIFIA Loan Agreement) for the current and each Fiscal Year during the term of the TIFIA Loan of at least 1.30; and (4) written evidence from the applicable Rating Agency or Rating Agencies that such Senior Lien Obligations and any TIFIA Obligations in the form of or securing payment of a TIFIA Loan will be rated at an investment grade rating by such Rating Agency. (c) The Senior Lien Obligations constitute Completion Obligations; provided, however, that prior to the incurrence of such Completion Obligations, the Commission shall furnish to the Trustee: 210 42 OHSUSA:765989901.12 (1) a certificate of a licensed architect or Consulting Engineer estimating the costs of completing the facilities for which such Completion Obligations are to be incurred; (2) a Certificate of the Commission certifying that the amount of such Completion Obligations to be incurred will be sufficient, together with other funds, if applicable, to complete construction of the facilities as estimated by the architect or Consulting Engineer in respect of which such Completion Obligation is to be incurred and pay capitalized interest, if any, on Commission Obligations Outstanding during the completion period; (3) if a TIFIA Loan is outstanding, a Certificate of the Commission to the effect that the principal amount of such Completion Obligation shall not exceed the maximum principal amount based on the TIFIA Lender’s sensitivity analysis and feedback based on the Consulting Engineer’s report; and (4) written evidence from the applicable credit rating agency or agencies that such Senior Lien Obligations and any TIFIA Obligations in the form of or securing payment of a TIFIA Loan will be rated at an investment grade rating by such credit rating agency. (d) The Commission issues not more than $135,000,000 principal amount and delivers a Certificate of the Commission certifying to the effect that, as of the date of issuance of the additional Senior Lien Obligations (which may be issued to refund Sales Tax Revenue Bonds, the proceeds of which were used to finance the Project): (1) Net Revenue during the preceding Calculation Period ending not more than ninety (90) days prior to the date of delivery of the proposed additional Senior Lien Obligations, was sufficient to satisfy the requirements of Section 6.03(a) of this Indenture (which report may assume that a revision of the tolls that was approved and implemented by the Commission subsequent to the beginning of such Calculation Period had been in effect for the entire Calculation Period) and 1.50 times Maximum Annual Debt Service; (2) projected Net Revenue for the next Fiscal Year of the proposed additional Senior Lien Obligations is expected to be sufficient to 1.50 times Maximum Annual Debt Service (treating for purposes of such calculation TIFIA Loans that are Senior Lien Obligations as Senior Lien Obligations). In calculating projected Net Revenue, the Traffic Consultant shall take into account amounts projected to be received from any adopted toll increase or increases (provided that no additional approvals need to be obtained and no additional requirements need to be satisfied in order to implement any such increase or increases) and any additional toll lanes and facilities to be designated as included within the definition of Toll Road; (3) if a TIFIA Loan Agreement is outstanding, projected Total Loan Life Coverage (as defined in the TIFIA Loan Agreement) for the current and each Fiscal Year during the term of the TIFIA Loan of at least 1.30; and 211 43 OHSUSA:765989901.12 (4) written evidence from the applicable Rating Agency or Rating Agencies that such Senior Lien Obligations and any TIFIA Obligations in the form of or securing payment of a TIFIA Loan will be rated at an investment grade rating by such Rating Agency. Section 3.02 Proceedings for Issuance of Additional Obligations. Whenever the Commission determines to issue Senior Lien Obligations subsequent to the initial issuance of Obligations pursuant to this Indenture and all Supplemental Indentures executed as of the same date, the Commission shall, in addition to fulfilling the requirements of Article II and Section 3.01, file with or provide to the Trustee: (a) a Certificate of the Commission stating that no Event of Default specified in Section 7.01 has occurred and is then continuing; (b) a Certificate of the Commission stating that the applicable requirements of Section 3.01 have been satisfied; (c) such amount, in cash or in the form of a Reserve Facility, as shall equal the Senior Lien Obligations Reserve Requirement, if any, for such Senior Lien Obligations for deposit in the Senior Lien Obligations Reserve Fund, as calculated by the Commission; (d) an Opinion of Bond Counsel to the effect that the Supplemental Indenture creating such Senior Lien Obligations has been executed and delivered by the Commission in accordance with this Indenture and that such Senior Lien Obligations, when duly executed by the Commission and authenticated and delivered by the Trustee, will be valid and binding obligations of the Commission; (e) a Certificate of the Commission stating that there has been no downgrade from the lower of the (i) then-existing credit ratings of Outstanding Senior Obligations and any Outstanding TIFIA Loan and (ii) credit ratings of Outstanding Senior Obligations and any Outstanding TIFIA Loan as of issuance date; and (f) such Additional Senior Lien Obligations shall not amortize before the commencement of debt service payments under any Outstanding TIFIA Loan. Section 3.03 Restrictions on Issuance of Second Lien Obligations or Additional Subordinate Obligations. Subsequent to the initial issuance of Obligations in the form of or securing payment of a TIFIA Loan pursuant to this Indenture, Second Lien Obligations or additional Subordinate Obligations (including Subordinate Obligations in the form of or securing payment of one or more TIFIA Loans) may be issued if the requirements of (a), (b) or (c) below are met. (a) The Second Lien Obligations or Subordinate Obligations, as applicable, are issued for purposes of refunding Outstanding Obligations by providing funds for the payment of any or all of the following: (1) The Bond Obligation, redemption or purchase price (including premium, if any) of the Outstanding Obligations to be refunded; 212 44 OHSUSA:765989901.12 (2) All expenses incident to the calling, retiring or paying of such Outstanding Second Lien Obligations or Outstanding Subordinate Obligations, the Costs of Issuance of such refunding Second Lien Obligations or Subordinate Obligations, and any termination payments or other payments to the holders of obligations of the Commission entered into pursuant to California Government Code Section 5922 (or any similar statute) related to such Outstanding Obligations; (3) Interest on all Outstanding Obligations to be refunded to the date such Obligations will be called for redemption or paid at maturity; (4) Interest on the refunding Second Lien Obligations or Subordinate Obligations from the date thereof to the date of payment or redemption of the Obligations to be refunded; (5) Any amounts necessary to fund a Second Lien Obligations Reserve Fund; and the Commission delivers a Certificate of the Commission to the effect that the Commission projects that the Annual Debt Service on all Outstanding Obligations after the issuance of the proposed additional Second Lien Obligations or Subordinate Obligations will be less than the Annual Debt Service on all Outstanding Obligations prior to the issuance of such proposed Second Lien Obligations or Subordinate Obligations in each year through the stated maturity date of such refunded Obligations; and that, if the maturity date of such additional Second Lien Obligations or Subordinate Obligations to be issued extends to a date later than the stated final maturity date of the Obligations being refunded, then Net Revenue in each Fiscal Year from and after the stated final maturity date of such refunded Obligations is projected to be not less one hundred thirty percent (130%) of the Annual Debt Service payable in each such Fiscal Year with respect to all Outstanding Obligations, including the proposed additional Second Lien Obligations or Subordinate Obligations. (b) The Commission delivers a report of the Traffic Consultant to the effect that, as of the date of issuance of the additional Second Lien Obligations or Subordinate Obligations: (1) Net Revenue during the preceding Calculation Period ending not more than ninety (90) days prior to the date of delivery of the proposed additional Second Lien Obligations or Subordinate Obligations, was sufficient to satisfy the requirements of Section 6.03(a) of this Indenture (which report may assume that a revision of the tolls that was approved and implemented by the Commission subsequent to the beginning of such Calculation Period had been in effect for the entire Calculation Period), and (2) projected Net Revenue for each Fiscal Year over the term of the proposed additional Second Lien Obligations or Subordinate Obligations is expected be sufficient to satisfy the requirements of Section 6.03(a)(2) and (3) of this Indenture in each Fiscal Year. In calculating projected Net Revenue, the Traffic Consultant shall take into account amounts projected to be received from any adopted toll increase or increases (provided that no additional approvals need to be obtained and no additional requirements 213 45 OHSUSA:765989901.12 need to be satisfied in order to implement any such increase or increases) and any additional toll lanes and facilities to be designated as included within the definition of Toll Road. (c) Such Second Lien Obligations or Subordinate Obligations constitute Completion Obligations; provided, however, that prior to the incurrence of such Completion Obligations, the Commission shall furnish to the Trustee: (1) a certificate of a licensed architect or Consulting Engineer estimating the costs of completing the facilities for which such Completion Obligations are to be incurred and pay capitalized interest, if any, on Commission Obligations Outstanding during the completion period, (2) a Certificate of the Commission certifying that the amount of such Completion Obligations to be incurred will be sufficient, together with other funds, if applicable, to complete construction of the facilities as estimated by the architect or a Consulting Engineer in respect of which such Completion Obligations is to be incurred, and (3) a Certificate of the Commission to the effect that the principal amount of such Completion Obligation shall not exceed the maximum principal amount based on the TIFIA Lender’s sensitivity analysis and feedback based on the Consulting Engineer’s report. Section 3.04 Proceedings for Issuance of Second Lien Obligations or Additional Subordinate Obligations. Whenever the Commission determines to issue Second Lien Obligations or Subordinate Obligations subsequent to the initial issuance of Subordinate Obligations pursuant to this Indenture and all Supplemental Indentures executed as of the same date, the Commission shall, in addition to fulfilling the requirements of Article II and Section 3.03, file with or provide to the Trustee: (a) a Certificate of the Commission stating that no Event of Default specified in Section 7.01 has occurred and is then continuing; (b) a Certificate of the Commission stating that the applicable requirements of Section 3.03 have been satisfied; (c) such amount, in cash or in the form of a Reserve Facility, as shall equal the Second Lien Obligations Reserve Requirement or Subordinate Obligations Reserve Requirement, if any, as of the date of issuance of such Series of Second Lien Obligations or Subordinate Obligations, for deposit in the Second Lien Obligations Reserve Fund or Subordinate Obligations Reserve Fund as applicable, as calculated by the Commission; and (d) an Opinion of Bond Counsel to the effect that the Supplemental Indenture creating such Series of Second Lien Obligations or Subordinate Obligations has been executed and delivered by the Commission in accordance with this Indenture and that such Series of Second Lien Obligations or Subordinate Obligations, when duly executed by the Commission 214 46 OHSUSA:765989901.12 and authenticated and delivered by the Trustee, will be valid and binding obligations of the Commission. Section 3.05 Subordinate Obligations; TIFIA Loans. Subsequent to the initial issuance of Senior Obligations in the form of or securing payment of a TIFIA Loan pursuant to this Indenture, the Commission may issue Subordinate Obligations hereunder in the form of or securing payment of a TIFIA Loan pursuant to TIFIA Loan Agreements containing provisions providing for such Subordinate Obligations to become Parity Obligations having a lien on Revenue on a parity with the Senior Lien Bonds upon the occurrence of a Bankruptcy Related Event of the Commission while such TIFIA Loan is held by the TIFIA Lender or another federal government agency or instrumentality. Section 3.06 Conditions for Merging of RCTC 91 Express Lanes and Toll Road. Upon Certification by the Commission that based on audited financial statements of the Commission, the Obligations hereunder and the outstanding obligations under the 2013 Indenture, if considered outstanding hereunder as if all such obligations had been issued hereunder, and treating as the Revenues hereunder to also include the “Revenues” pledged under the 2013 Indenture and the Toll Road to consist of all the facilities defined as “Toll Road” hereunder and under the 2013 Indenture, would produce, as a combined system, Net Revenues sufficient to satisfy the covenants of the Commission under Section 6.03 with respect to all such obligations considered outstanding and the covenants and conditions to the issuance of $1 of additional Senior Lien Obligations hereunder, then the Commission and the Trustee may execute, without the consent of the Holders, an amendment to this Indenture to effect the consolidation of the two Toll Roads and the outstanding debt secured thereby as issued and secured under this Indenture. ARTICLE IV REDEMPTION Section 4.01 Redemption and Purchase of Obligations. Each Series of Obligations may be made subject to mandatory or optional redemption or mandatory or optional tender and purchase prior to their respective stated maturities, as a whole or in part, at such time or times, upon such terms and conditions, at such prices, upon such notice and with such effect as may be provided in the Supplemental Indenture creating such Series of Obligations. Section 4.02 Notice of Redemption. Unless otherwise specified in a Supplemental Indenture creating a Series of Obligations, each notice of redemption shall be mailed by the Trustee, not less than twenty (20) nor more than sixty (60) days prior to the redemption date, to each Owner and to the MSRB. Notice of redemption to the Owners shall be given by first class mail. Each notice of redemption shall state the date of such notice, the date of issue of the Series of Obligations to which such notice relates, the redemption date, the redemption price, the place or places of redemption (including the name and appropriate address or addresses of the Trustee), the CUSIP number (if any) of the maturity or maturities, and, in the case of a Series of Obligations to be redeemed in part only, the identity of the Obligations to be redeemed. Except as provided in Section 4.03 in the case of conditional optional redemption, each such notice shall also state that on said date there will become due and payable on each of 215 47 OHSUSA:765989901.12 said Obligations the redemption price thereof, together with interest accrued thereon to the date fixed for redemption, and that from and after such redemption date interest thereon shall cease to accrue, and shall require that such Obligations be then surrendered at the address or addresses of the Trustee specified in the redemption notice. Neither the Commission nor the Trustee shall have any responsibility for any defect in the CUSIP number that appears on any Obligation or in any redemption notice with respect thereto, and any such redemption notice may contain a statement to the effect that CUSIP numbers have been assigned by an independent service for convenience of reference and that neither the Commission nor the Trustee shall be liable for any inaccuracy in such numbers. Failure of any Owner to receive any notice of redemption or any defect therein shall not affect the sufficiency of any proceedings for redemption. Section 4.03 Conditional Notice of Redemption; Rescission. Any notice of optional redemption of the Obligations delivered in accordance with Section 4.02 may be conditional, and if any condition stated in the notice of redemption shall not have been satisfied on or prior to the redemption date, said notice shall be of no force and effect and the Commission shall not be required to redeem the Obligations thereby called for redemption, such Obligations shall not become due and payable, and the redemption shall be cancelled and the Trustee shall within a reasonable time thereafter give notice, to the persons and in the manner in which the notice of redemption was given, that such condition or conditions were not met and that the redemption was cancelled. In addition, the Commission may, at its option, on or prior to the date fixed for optional redemption in any notice of redemption of the Obligations, rescind and cancel such notice of redemption by Written Request of the Commission to the Trustee, and any optional redemption of Obligations and notice thereof shall be rescinded and cancelled and the Trustee shall mail notice of such cancellation to the recipients of the notice of redemption being cancelled pursuant to the provisions of Section 4.02. Any optional redemption of Obligations and notice thereof shall be rescinded and cancelled if for any reason on the date fixed for optional redemption moneys are not available in the Redemption Fund or otherwise held in trust for such purpose in an amount sufficient to pay in full on said date the principal of, interest, and any premium due on the Obligations called for optional redemption and such failure to optionally redeem the Obligations called for redemption shall not be a default hereunder. Section 4.04 Effect of Redemption. Notice of redemption having been duly given as aforesaid or as otherwise provided in a Supplemental Indenture, and moneys for payment of the redemption price of, together with interest accrued to the redemption date on, the Obligations (or portions thereof) so called for redemption being held by the Trustee, on the redemption date designated in such notice, the Obligations (or portions thereof) so called for redemption shall become due and payable at the redemption price specified in this Indenture, together with interest accrued thereon to the date fixed for redemption, interest on the Obligations so called for redemption shall cease to accrue, said Obligations (or portions thereof) shall cease to be entitled to any benefit or security under this Indenture, and the Owners of said Obligations shall have no rights in respect thereof except to receive payment of said redemption price and accrued interest to the date fixed for redemption. Section 4.05 Partial Redemption of Obligations. Upon surrender of any Obligation to be redeemed in part only, the Commission shall execute, and the Trustee shall authenticate and deliver to the Owner of such Obligation, at the expense of the Commission, a new Obligation or Obligations of Authorized Denominations equal in Bond Obligation to the 216 48 OHSUSA:765989901.12 unredeemed portion of the Obligation surrendered, of the same Series, maturity and terms as the surrendered Obligation. ARTICLE V PLEDGE; FUNDS AND ACCOUNTS Section 5.01 Deposit of Revenue by Trustee; Toll Revenue Fund. (a) All Toll Revenues received and receivable by the Commission and pledged and assigned by this Indenture to the Trustee, together with the balance of the Trust Estate, are to be paid directly to the Trustee and deposited by it in the Funds and Accounts described in this Article V and held in trust for the purposes set forth herein, and, except as otherwise provided herein, shall not be subject to any lien, levy, garnishment or attachment by any creditor of the Commission nor shall they be subject to any assignment or hypothecation by the Commission. Subject only to the provisions of this Indenture permitting the application thereof for or to the purposes and on the terms and conditions set forth herein and therein, the Trustee shall be entitled to and shall collect and receive all of the Toll Revenues, and any Toll Revenues collected or received by the Commission shall be deemed to be held, and to have been collected or received, by the Commission as the agent of the Trustee and shall forthwith be paid by the Commission to the Trustee. Moneys on deposit in the Funds and Accounts described in this Article V (excluding the Rebate Fund, the Surplus Fund, the Sales Tax Revenue Bonds Account within the Project Fund, and any Fund or Account established to hold the proceeds of a drawing on any Credit Support Instrument) shall be held by the Trustee or the Commission, as applicable, in trust, and pending application in accordance with the provisions of this Article V shall be subject to a lien and charge in favor of the Holders until applied as hereinafter provided. The Trustee shall at all times maintain accurate records of deposits into such Funds and Accounts and the sources and timing of such deposits. (b) As long as any Obligations or Reserve Facility Costs remain unpaid, the Commission hereby assigns and shall cause Toll Revenues to be transmitted by the Toll Operator on at least a weekly basis directly to the Trustee for deposit in a trust fund, designated as the “Toll Revenue Fund,” which Fund the Trustee shall establish and maintain in trust. Investment income on amounts held by the Trustee in the Toll Revenue Fund shall also be deposited in the Toll Revenue Fund. All moneys at any time held in the Toll Revenue Fund shall be held in trust for the benefit of the holders of the Obligations and shall be disbursed, allocated and applied solely for the uses and purposes set forth in this Indenture. Section 5.02 Establishment of Funds and Accounts. (a) In addition to the Toll Revenue Fund established pursuant to Section 5.01, the following Funds and Accounts are hereby established and created and shall be maintained in trust by the Trustee: (1) the Project Fund, and within the Project Fund, the Senior Lien Obligations Account, the Second Lien Obligations Account, the Subordinate Obligations 217 49 OHSUSA:765989901.12 Account, the Sales Tax Revenue Bonds Account, the Design-Build Contractor Payments Account and the Insurance and Condemnation Proceeds Account; (2) the Rebate Fund; (3) the Senior Lien Obligations Fund and, within the Senior Lien Obligations Fund, the Senior Lien Obligations Interest Account, the Senior Lien Obligations Principal Account and the TIFIA Loan Prepayment Account; (4) the Senior Lien Obligations Reserve Fund; (5) the Repair and Rehabilitation Fund and, within the Repair and Rehabilitation Fund, the R & R Sweep Reserve Account; (6) the Second Lien Obligations Fund and, within the Second Lien Obligations Fund, the Second Lien Obligations Interest Account and the Second Lien Obligations Principal Account; (7) the Second Lien Obligations Reserve Fund; (8) the Subordinate Obligations Fund and, within the Subordinate Obligations Fund, the Subordinate Obligations Interest Account, the Subordinate Obligations Principal Account and the TIFIA Loan Prepayment Account; (9) the Subordinate Obligations Reserve Fund; (10) the Holding Fund; (11) the Commission Loan Fund; (12) the Capital Expenditures Fund; and (13) the Residual Fund. and the following Funds are hereby established and created and shall be maintained by the Commission: (14) the Operation and Maintenance Fund and, within the Operation and Maintenance Fund, the Ramp Up Account; and (15) the Surplus Fund. In addition, upon the written request of the Commission, the Trustee shall establish and maintain additional temporary Funds or Accounts or sub-accounts for the purposes specified in any such request. (b) All of the Funds and Accounts (other than the Surplus Fund and the Operation and Maintenance Fund) shall be held by the Trustee and, except as expressly provided herein, the Commission shall not have any right to withdraw funds from any Fund or Account 218 50 OHSUSA:765989901.12 established pursuant to Section 5.02(a). The Commission hereby irrevocably authorizes the Trustee to credit funds to or deposit funds in, and to withdraw and transfer funds from, each Fund or Account in accordance with the terms of this Indenture. Section 5.03 Toll Revenue Fund; Priority of Deposits and Transfers. (a) From and after the Substantial Completion Date for the I-15 Express Lanes Project, except for amounts to be deposited in other Funds or Accounts pursuant to this Article, the Commission shall promptly deposit or cause to be deposited into the Toll Revenue Fund all Revenue and transfers from other Funds or Accounts as required by the terms of this Indenture. (b) From and after the Substantial Completion Date for the I-15 Express Lanes Project, subject to Section 5.25 hereof, including the delivery of a Funds Transfer Certificate by the Commission (to the extent required by such Section 5.25), the Trustee shall make the following transfers and payments from the Toll Revenue Fund in the amounts, at the times and only for the purposes specified below and in the following order of priority (it being agreed that no amount shall be transferred on any date pursuant to any clause below until amounts sufficient as of that Monthly Funding Date (to the extent applicable) for all the purposes specified under the prior clauses shall have been transferred or set aside): First, on each Monthly Funding Date, to the Operation and Maintenance Fund, including the Ramp Up Account within the Operation and Maintenance Fund, the amount necessary to increase the balance of the Operation and Maintenance Fund to an amount equal to the Operation and Maintenance Expenses then due and payable, plus one-sixth (1/6) of the Operation and Maintenance Expenses projected in accordance with the most recently-adopted Annual Operating Budget of the Commission to be due and payable during the Fiscal Year continuing or commencing on the day after such Monthly Funding Date; Second, on each Monthly Funding Date, any payments then due and payable by the Commission to the Rebate Fund or any similar rebate fund established with respect to any future tax-exempt borrowing transaction under this Indenture; Third, (x) on each Monthly Funding Date and on each other date on which the following amounts shall be due and payable, to the Senior Lien Obligations Interest Account the sum of (A)(1) in the case of Outstanding Senior Lien Obligations with semiannual interest payment dates, one-sixth (1/6) of the amount of the interest payable on such Senior Lien Obligations on the next interest payment date; (2) in the case of Outstanding Senior Lien Obligations with quarterly interest payment dates, one-third (1/3) of the amount of the interest payable on such Senior Lien Obligations on the next interest payment date; and (3) in the case of Outstanding Senior Lien Obligations with monthly interest payment dates, the amount of interest payable on such Senior Lien Obligations on the next interest payment date; plus (B) the sum of any continuing shortfall in transfers required to have been made to the Senior Lien Obligations Interest Account on any preceding Monthly Funding Date; plus (C) if such Monthly Funding Date is also an interest payment date or the last Monthly Funding Date before an interest payment date on any Senior Lien Obligations, any other amount required to make the amount credited to the Senior Lien Obligations Interest Account equal to the amount payable on such 219 51 OHSUSA:765989901.12 Senior Lien Obligations on such interest payment date; and (y) on each Monthly Funding Date, to the applicable Swap Parties, scheduled Hedging Obligations due under any Qualified Swap Agreements, if any, net of any scheduled amounts payable to the Commission with respect to such scheduled Hedging Obligations; provided, however, that with respect to Senior Obligations in the form of or securing payment of a TIFIA Loan, only the interest component of TIFIA Mandatory Debt Service shall be set aside pursuant to this Third clause; Fourth, on each Monthly Funding Date and on each other date on which the following amounts shall be due and payable, commencing twelve months before the first annual principal payment date (including any mandatory sinking fund redemption date) or six months before the first semi-annual principal payment date (including any mandatory sinking fund redemption date), to the Senior Lien Obligations Principal Account, the sum of (A)(1) in the case of Outstanding Senior Lien Obligations with annual principal or mandatory sinking fund payment dates, one-twelfth (1/12) of the principal and mandatory sinking fund redemptions due on such Senior Lien Obligations; and (2) in the case of Outstanding Senior Lien Obligations with semi-annual principal or mandatory sinking fund payment dates, one-sixth (1/6) of the principal and mandatory sinking fund redemptions due on such Senior Lien Obligations; and (B) the sum of any shortfall in transfers required to have been made to the Senior Lien Obligations Principal Account on any previous Monthly Funding Date; and (C) if the Monthly Funding Date is also a principal payment date (or mandatory sinking fund redemption date) or the last Monthly Funding Date before a principal payment date (or mandatory sinking fund redemption date) on any Senior Lien Obligations, any other amount required to make the amount credited to the Senior Lien Obligations Principal Account equal to the amount of principal due on such Senior Lien Obligations on such principal payment date or mandatory sinking fund redemption date; provided, however, that with respect to Senior Obligations in the form of or securing payment of a TIFIA Loan, only the principal component of TIFIA Mandatory Debt Service shall be set aside pursuant to this Fourth clause; Fifth, on each Monthly Funding Date, to the Senior Lien Obligations Reserve Fund (or the applicable Account therein) the amount necessary so that the balance therein equals the applicable Senior Lien Obligations Reserve Requirement; provided, however, that in the event that the Trustee shall have withdrawn moneys in the Senior Lien Obligations Reserve Fund or any Account therein for the purpose of paying principal of or interest on the applicable Senior Lien Obligations when due as provided in this Indenture, the Trustee shall limit such deposit to the Senior Lien Obligations Reserve Fund or the applicable Account therein, on each of the next six Monthly Funding Dates after such withdrawal, to an amount equal to one-sixth (1/6th) of the aggregate amount of each such withdrawal until the amount on deposit in the Senior Lien Obligations Reserve Fund (or the applicable Account therein) is equal to the applicable Senior Lien Obligations Reserve Requirement; provided further however, that in the event such requirements cannot be fully funded, the funds available shall be transferred to each Account in the Senior Lien Obligations Reserve Fund ratably in accordance with its respective shortfall; Sixth, on each Monthly Funding Date, to the extent sufficient funds are then available after application of funds for the purposes specified in the prior clauses of this Section 5.03(b), to the Repair and Rehabilitation Fund, an amount equal to the Alternative Repair and Rehabilitation Fund Required Deposit or, if no such deposit is then required to be made, an amount not to exceed the Scheduled Repair and Rehabilitation Fund Required Deposit 220 52 OHSUSA:765989901.12 for such Monthly Funding Date. If sufficient funds are not then available on a particular Monthly Funding Date, after application of funds for the purposes specified in the prior clauses, to fund the Scheduled Repair and Rehabilitation Fund Required Deposit or Alternative Repair and Rehabilitation Fund Required Deposit, as applicable, or if the Commission has elected to defer all or a portion of the Scheduled Repair and Rehabilitation Fund Required Deposit for a prior Monthly Funding Date or Monthly Funding Dates, the Commission may use funds on each subsequent Monthly Funding Date to satisfy the cumulative shortfall in the Scheduled Repair and Rehabilitation Fund Required Deposit or Alternative Repair and Rehabilitation Fund Required Deposit, as applicable, from previous Monthly Funding Dates; Seventh, in the event the Commission has Senior Obligations outstanding in the form of or securing payment of a TIFIA Loan, on each Monthly Funding Date commencing on the Monthly Funding Date that is six months prior to the date on which TIFIA Scheduled Debt Service is first due and payable, to the Senior Obligations Interest Account, an amount which equals one-sixth (1/6) of the TIFIA Scheduled Debt Service (excluding any amounts already set aside on such Monthly Funding Date to be applied to TIFIA Mandatory Debt Service in accordance with the Third and Fourth clauses above) due and payable on the immediately succeeding payment date for such TIFIA Loan; Eighth, on each Monthly Funding Date, to the extent sufficient funds are then available after application of funds for the purposes specified in the prior clauses of this Section 5.03(b), to the Repair and Rehabilitation Sweep Reserve Account, all funds until the R&R Sweep Reserve Amount is on deposit therein; Ninth, (x) on each Monthly Funding Date and on each other date on which the following amounts shall be due and payable, to the Second Lien Obligations Interest Account the sum of (A)(1) in the case of Outstanding Second Lien Obligations with semiannual interest payment dates, one-sixth (1/6) of the amount of the interest payable on such Second Lien Obligations on the next interest payment date; (2) in the case of Outstanding Second Lien Obligations with quarterly interest payment dates, one-third (1/3) of the amount of the interest payable on such Second Lien Obligations on the next interest payment date; and (3) in the case of Outstanding Second Lien Obligations with monthly interest payment dates, the amount of interest payable on such Second Lien Obligations on the next interest payment date; plus (B) the sum of any continuing shortfall in transfers required to have been made to the Second Lien Obligations Interest Account on any preceding Monthly Funding Date; plus (C) if such Monthly Funding Date is also an interest payment date or the last Monthly Funding Date before an interest payment date on any Second Lien Obligations, any other amount required to make the amount credited to the Second Lien Obligations Interest Account equal to the amount payable on such Second Lien Obligations on such interest payment date, and (y) on each Monthly Funding Date, to the applicable Swap Parties, scheduled payments due under any Hedging Obligations, if any, net of any scheduled amounts payable to the Commission with respect to such scheduled Hedging Obligations, under any Swaps entered into in connection with such Second Lien Obligations; Tenth, on each Monthly Funding Date and on each other date on which the following amounts shall be due and payable, commencing twelve months before the first annual principal payment date (including any mandatory sinking fund redemption date) or six months 221 53 OHSUSA:765989901.12 before the first semi-annual principal payment date (including any mandatory sinking fund redemption date), to the Second Lien Obligations Principal Account, the sum of (A)(1) in the case of Outstanding Second Lien Obligations with annual principal or mandatory sinking fund payment dates, one-twelfth (1/12) of the principal and mandatory sinking fund redemptions due on such Second Lien Obligations; and (2) in the case of Outstanding Second Lien Obligations with semi-annual principal or mandatory sinking fund payment dates, one-sixth (1/6) of the principal and mandatory sinking fund redemptions due on such Second Lien Obligations; (B) the sum of any shortfall in transfers required to have been made to the Second Lien Obligations Principal Account on any previous Monthly Funding Date; and (C) if the Monthly Funding Date is also a principal payment date (or mandatory sinking fund redemption date) or the last Monthly Funding Date before a principal payment date (or mandatory sinking fund redemption date) on any Second Lien Obligations, any other amount required to make the amount credited to the Second Lien Obligations Principal Account equal to the amount of principal due on such Second Lien Obligations on such principal payment date or mandatory sinking fund redemption date; Eleventh, on each Monthly Funding Date, to the Second Lien Obligations Reserve Fund (or the applicable Account therein), the amount necessary so that the balance therein equals the applicable Second Lien Obligations Reserve Requirement; provided, however, that in the event that the Trustee shall have withdrawn moneys in the Second Lien Obligations Reserve Fund therein for the purpose of paying principal of or interest on the applicable Second Lien Obligations secured thereby when due as provided in this Indenture, the Trustee shall limit such deposit to the Second Lien Obligations Reserve Fund, on each of the next six Monthly Funding Dates after such withdrawal, to an amount equal to one-sixth (1/6th) of the aggregate amount of each such unreplenished withdrawal until the amount on deposit in the Second Lien Obligations Reserve Fund is equal to the applicable Second Lien Obligations Reserve Requirement; provided, further however, that in the event such requirements cannot be fully funded, the funds available shall be transferred to each Account in the Second Lien Obligations Reserve Fund ratably in accordance with its respective shortfall; Twelfth, (x) on each Monthly Funding Date and on each other date on which the following amounts shall be due and payable, to the Subordinate Obligations Interest Account the sum of (A)(1) in the case of Outstanding Subordinate Obligations with semi-annual interest payment dates, one-sixth (1/6) of the interest payable on such Subordinate Obligations on the next interest payment date; (2) in the case of Outstanding Subordinate Obligations with quarterly interest payment dates, one-third (1/3) of the amount of the interest payable on such Subordinate Obligations on the next interest payment date; and (3) in the case of Outstanding Subordinate Obligations with monthly interest payment dates, the interest payable on such Subordinate Obligations on the next interest payment date; plus (B) the sum of any continuing shortfall in transfers required to have been made to the Subordinate Obligations Interest Account on any preceding Monthly Funding Date; plus (C) if such Monthly Funding Date is also an interest payment date or the last Monthly Funding Date before an interest payment date on any Subordinate Obligations, any other amount required to make the amount credited to the Subordinate Obligations Interest Account equal to the interest payable on such Subordinate Obligations on such interest payment date; provided, however, that with respect to Subordinate Obligations in the form of or securing payment of a TIFIA Loan, only the interest component of TIFIA Mandatory Debt Service shall be set aside pursuant to this Eleventh clause; 222 54 OHSUSA:765989901.12 Thirteenth, on each Monthly Funding Date and on each other date on which the following amounts shall be due and payable, commencing twelve months before the first annual principal payment date (including any mandatory sinking fund redemption date) or six months before the first semi-annual principal payment date (including any mandatory sinking fund redemption date), to the Subordinate Obligations Principal Account the sum of (A)(1) in the case of Outstanding Subordinate Obligations with annual principal payment date, one-twelfth (1/12) of the principal due on such Subordinate Obligations on the next principal payment date; and (2) in the case of Outstanding Subordinate Obligations with semi-annual principal payment dates, one-sixth (1/6) of the principal redemptions due on such Subordinate Obligation on the next principal payment date; plus (B) the sum of any shortfall in transfers required to have been made to the Subordinate Obligations Principal Account on any previous Monthly Funding Date; plus (C) if the Monthly Funding Date is also a principal payment date or the last Monthly Funding Date before a principal payment date (or mandatory sinking fund redemption date) on any Subordinate Obligations, any other amount required to make the amount credited to the Subordinate Obligations Principal Account equal to the amount of principal due on such Subordinate Obligation on such principal payment date or mandatory sinking fund redemption date provided, however, that with respect to Subordinate Obligations in the form of or securing payment of a TIFIA Loan, only the principal component of the TIFIA Mandatory Debt Service shall be set aside pursuant to the Twelfth clause; Fourteenth, on each Monthly Funding Date, to the Subordinate Obligations Reserve Fund (or the applicable Account therein), the amount, if any, necessary to increase the balance therein (taking into account amounts then on deposit therein) to the Subordinate Obligations Reserve Requirement; Fifteenth, in the event the Commission has Subordinate Obligations outstanding in the form of or securing payment of a TIFIA Loan, on each Monthly Funding Date commencing on the Monthly Funding Date that is six months prior to the date on which TIFIA Scheduled Debt Service is first due and payable, to the Subordinate Obligations Interest Account, an amount which equals one-sixth (1/6) of the TIFIA Scheduled Debt Service (excluding any amounts already set aside on such Monthly Funding Date to be applied to TIFIA Mandatory Debt Service in accordance with the Ninth and Tenth clauses above) due and payable on the immediately succeeding payment date for such TIFIA Loan; Sixteenth, on each Monthly Funding Date, to the Holding Fund the remaining amount of any Toll Revenues; Seventeenth, on each Monthly Funding Date, provided the Blocked Payment Conditions have been met, to the Commission Loan Fund the remaining amount of any Toll Revenues to the extent the Commission Loan remains outstanding; Eighteenth, on each Monthly Funding Date, to the Capital Expenditures Fund to the extent necessary to fund such Fund on a monthly pro-rata basis in such Fiscal Year so that the balance therein (taking into account all amounts then on deposit therein) equals the aggregate amount of Capital Expenditures Fund Permitted Expenditures indicated for the Fiscal Year in the Annual Operating Budget, which amount may be $0; provided, however, that in no event shall 223 55 OHSUSA:765989901.12 the total of all amounts transferred into the Capital Expenditures Fund exceed the Capital Expenditures Fund Deposits Cap; Nineteenth, on each Monthly Funding Date and on each other date on which the following amounts shall be due and payable, to the counterparties to Qualified Swap Agreements or Swaps, an amount equal to any Hedging Termination Obligations payable upon a termination of any such Qualified Swap Agreements or Swaps; and Twentieth, on each Monthly Funding Date, and only to the extent funds are then available after application of funds for the purposes specified in the prior First through Eighteenth clauses and only to the extent all Reserve Funds are funded to the full future scheduled amount of the Reserve Requirement, on such Monthly Funding Date, to the Residual Fund, all remaining amounts, if any. (c) To the extent that on any Calculation Date or any other date of determination requested by the Commission, the Commission determines that (i) the amounts on deposit in the Senior Lien Obligations Reserve Fund are in excess of the applicable Senior Lien Obligations Reserve Requirement, (ii) the amounts on deposit in the Second Lien Obligations Reserve Fund are in excess of the applicable Second Lien Obligations Reserve Requirement, (iii) amounts on deposit in the Subordinate Obligations Reserve Fund are in excess of the applicable Subordinate Obligations Reserve Requirement, (iv) the amounts on deposit in the Repair and Rehabilitation Fund (other than the R & R Sweep Reserve Account therein) are certified by the Commission to be in excess of what is required for expected Repair and Rehabilitation Fund Permitted Expenditures, or (v) the amounts on deposit in the Capital Expenditures Fund are (A) certified by the Commission to no longer be needed for making Capital Expenditures Fund Permitted Expenditures, or (B) in excess of the Capital Expenditures Fund Deposits Cap, then in each such case, as applicable, the excess amounts shall be transferred into the Toll Revenue Fund. Section 5.04 Project Fund. (a) Accounts. Pursuant to Section 5.02(a) hereof, the Trustee is to establish and create and maintain in trust the following separate Accounts within the Project Fund: (1) the Senior Lien Obligations Account; (2) the Second Lien Obligations Account; (3) the Subordinate Obligations Account; (4) the Sales Tax Revenue Bonds Account; (5) the Design-Build Contractor Payments Account; and (6) the Insurance and Condemnation Proceeds Account. Project Costs shall be paid from the Project Fund and its Accounts, including the Senior Lien Obligations Account, the Second Lien Obligations Account, the Subordinate 224 56 OHSUSA:765989901.12 Obligations Account, the Sales Tax Revenue Bonds Account, the Design-Build Contractor Payments Account and the Insurance and Condemnation Proceeds Account as described below. The Commission shall be entitled to open new Accounts of the Project Fund for such purposes as may be set forth in a Supplemental Indenture. (b) Senior Lien Obligations Account. The net proceeds of each Series of the Senior Lien Obligations shall be deposited by the Trustee into the applicable sub-account of the Senior Lien Obligations Account as provided by the applicable Supplemental Indenture. The Senior Lien Obligations Account and all sub-accounts therein shall be maintained in order to account for the receipt and disbursement of proceeds (and all earnings thereon) of the Senior Lien Obligations, including but not limited to, the payment of, or reimbursement for a prior payment of, Costs of Issuance of Senior Lien Obligations and other Project Costs permitted to be paid with the proceeds of such Senior Lien Obligations. Funds therein shall be disbursed pursuant to a Funds Transfer Certificate in accordance with the provisions of Section 5.25. Notwithstanding anything to the contrary set forth herein, the amounts on deposit in any such sub-account of the Senior Lien Obligations Account (and all earnings thereon) shall secure only the Senior Lien Obligations issued to fund the initial deposit to such sub-account, and such amounts shall be held by the Trustee hereunder solely for the benefit of the holders of such Senior Lien Obligations until such funds have been disbursed in accordance with this Section. (c) Second Lien Obligations Account. The net proceeds of Second Lien Obligations shall be deposited by the Trustee into the applicable sub-account of the Second Lien Obligations Account as provided by the applicable Supplemental Indenture. The Second Lien Obligations Account and all sub-accounts therein shall be maintained in order to account for the receipt and disbursement of proceeds (and all earnings thereon) of the Second Lien Obligations, including but not limited to, the payment of, or reimbursement for a prior payment of, Costs of Issuance of Second Lien Obligations and other Project Costs permitted to be paid with the proceeds of such Second Lien Obligations. Funds therein shall be disbursed pursuant to a Funds Transfer Certificate in accordance with the provisions of Section 5.25. Notwithstanding anything to the contrary set forth herein, the amounts on deposit in any such sub-account of the Second Lien Obligations Account (and all earnings thereon) shall secure only the Second Lien Obligations issued to fund the initial deposit to such sub-account, and such amounts shall be held by the Trustee hereunder solely for the benefit of the holders of such Second Lien Obligations until such funds have been disbursed in accordance with this Section. (d) Subordinate Obligations Account. The net proceeds of Subordinate Obligations shall be deposited by the Trustee into the applicable sub-account of the Subordinate Obligations Account as provided by the applicable Supplemental Indenture. The Subordinate Obligations Account and all sub-accounts therein shall be maintained in order to account for the receipt and disbursement of proceeds (and all earnings thereon) of the Subordinate Obligations, including but not limited to, the payment of, or reimbursement for a prior payment of, Costs of Issuance of Subordinate Obligations and other Project Costs permitted to be paid with the proceeds of such Subordinate Obligations. Funds therein shall be disbursed pursuant to a Funds Transfer Certificate in accordance with the provisions of Section 5.25. The net proceeds of each draw under each TIFIA Loan Agreement shall be deposited on the respective funding date of such draw in a dedicated sub-account of the Subordinate Obligations Account in accordance with, and used for the payment of Eligible Project Costs (as such term is defined in the 225 57 OHSUSA:765989901.12 applicable TIFIA Loan Agreement) in accordance with the applicable TIFIA Loan Agreement. Notwithstanding anything to the contrary set forth herein, the amounts on deposit in any such sub-account of the Subordinate Obligations Account (and all earnings thereon) shall secure only the Obligations in the form of or securing payment of the related TIFIA Loan, and such amounts shall be held by the Trustee hereunder solely for the benefit of the TIFIA Lender until such funds have been disbursed in accordance with this Section. (e) Sales Tax Revenue Bonds Account. The proceeds of the 2017 Sales Tax Revenue Bonds will be transferred to the Trustee and deposited by the Trustee into the Sales Tax Revenue Bonds Account and will be used to pay Sales Tax Eligible Project Costs in accordance with the provisions hereof and of the Sales Tax Revenue Bond Indenture. The Commission shall comply with Section 5.25, including the delivery of a Funds Transfer Certificate (to the extent required by such Section 5.25), and with the applicable provisions of the Sales Tax Revenue Bond Indenture in requesting a disbursement of funds from time to time from the Sales Tax Revenue Bonds Account. (f) Design-Build Contractor Payments Account. Amounts, including but not limited to liquidated damages, payable to or received by the Commission from the Design-Build Contractor shall be transferred to the Trustee and deposited by the Trustee into the Design-Build Contractor Payments Account and used to pay Project Costs. The Commission shall comply with Section 5.25, including the delivery of a Funds Transfer Certificate (to the extent required by such Section 5.25) in requesting a disbursement of funds from time to time from the Design- Build Contractor Payments Account. (g) Insurance and Condemnation Proceeds Account. Proceeds of fire and other casualty insurance payable to or received by the Commission with respect to the Toll Road (whether by way of claims, return of premiums, ex gratia settlements or otherwise), and proceeds of any condemnation awards payable to or received by the Commission with respect to the Toll Road shall be transferred to the Trustee and deposited by the Trustee into the Insurance and Condemnation Proceeds Account. If received prior to the applicable Substantial Completion Date, amounts on deposit in such account shall be used to pay Project Costs and shall be transferred in accordance with subsection (h) below. If received after the applicable Substantial Completion Date, amounts on deposit in the Insurance and Condemnation Proceeds Account may be used by the Commission to pay the costs of restoration, repair or rehabilitation of the Toll Road or portion thereof to which such insurance or condemnation proceeds relate; provided, however, that any portion of such amounts that the Commission elects not to use for such restoration, repair or rehabilitation of the Toll Road or that are in excess of the amount needed for such restoration, repair or rehabilitation of the Toll Road, as evidenced by a Certificate of the Commission delivered to the Trustee, shall be transferred to the Redemption Fund and applied to the prepayment of principal of Outstanding Highest Priority Obligations. The Commission shall comply with Section 5.25, including the delivery of a Funds Transfer Certificate (to the extent required by such Section 5.25) in requesting a disbursement of funds from time to time from the Insurance and Condemnation Proceeds Account. (h) Transfers Upon Substantial and Final Completion. On the Substantial Completion Date (as evidenced by delivery to the Trustee of a Certificate of the Commission), the Trustee shall deposit into the Operations and Maintenance Fund $[7,000,000] of funds on 226 58 OHSUSA:765989901.12 deposit in the Project Fund (or, if the remaining balance of such Fund is less than $[7,000,000] on the date of such deposit, the amount of such remaining balance). Except as otherwise required by any applicable law, to the extent that on the date of final completion of the construction of the I-15 Express Lanes Project, as evidenced by the delivery to the Trustee of a Certificate of the Commission, there shall be any other funds remaining on deposit in the Project Fund (or any Account thereof), such funds will be deposited into the Toll Revenue Fund; provided, however, that any excess funds remaining on deposit in the Sales Tax Revenue Bonds Account, other than proceeds of the Commission Loan, shall be transferred to the Commission (if the Commission provides an Opinion of Bond Counsel that such transfer is appropriate in order to not adversely affect the tax-exempt status of interest on the Sales Tax Revenue Bonds. Section 5.05 Commission Initial Loan and Commission Backstop Loan Contribution to Project. (a) Commission Initial Loan. The Commission has heretofore expended approximately $[62,000,000] of its Sales Tax Revenues and other funds on Project Costs and such expenditures are part of the equity contribution of the Commission. In addition, the Commission hereby covenants to make available for deposit the following amounts in the years indicated below (on the Monthly Funding Date preceding June 1 within each such Fiscal Year) into the Revenue Fund, such amounts to consist of the scheduled Commission Initial Loan to the Project (such payments to be requested by a written certificate of the Trustee as to the need for such funds delivered to the Sales Tax Trustee under the Sales Tax Revenue Bond Indenture and to the Commission), as follows: Fiscal Year (ending June 30) Equity Loan Amount 2019 $3,000,000 2020 3,000,000 2021 3,000,000 2022 3,000,000 2023 3,000,000 2024 3,000,000 Such deposits are expected to be made by the Commission from Sales Tax Revenues of the Commission held by the Sales Tax Trustee under the Sales Tax Revenue Bond Indenture for such purpose in the I-15 Trust Fund. The Trustee shall maintain a record of the outstanding balance of the Commission Loan, together with interest thereon at the Commission Loan Rate, such interest to be compounded on each June 1 and December 1 until paid. The proceeds of the Commission Initial Loan shall be deposited into the Toll Revenue Fund and treated as Revenues and shall only be requested by the Trustee to the extent Toll Revenues are not sufficient by the Monthly Funding Date preceding June 1 to make the deposits 227 59 OHSUSA:765989901.12 required by the purposes specified in the First through Fifth clauses of Section 5.03(b); provided that prior to the Substantial Completion Date, proceeds of the Commission Initial Loan shall be deposited in the Senior Obligations Reserve Fund, if necessary, to increase the balance therein to the Senior Obligations Reserve Requirement. (b) Commission Backstop Loan. The Commission further covenants to provide additional funds as a conditional backstop in the event Toll Revenues are insufficient in the Fiscal Years 2025 through 2039 in an annual amount not to exceed $[3,850,000] in any such year and in the aggregate not to exceed [$38,500,000.] Such amounts shall be requested by the Trustee from the Sales Tax Trustee only upon a certification that there is a deficiency in Toll Revenues necessary to make the deposits required by the purposes specified in the First through Fifth clauses of Section 5.03(b) on any Monthly Funding Date and the amount requested shall be only in the amount of such deficiency subject to the limits set forth above. Such amounts shall be deposited with the Trustee from amounts on deposit in the I-15 Trust Fund held by the Sales Tax Trustee under the Sales Tax Revenue Bond Indenture. Any such amount deposited with the Trustee shall increase the outstanding balance of the Commission Loan on the date of such transfer. Section 5.06 Operation and Maintenance Fund. (a) The Commission shall establish and maintain the Operation and Maintenance Fund in accordance herewith. On the Substantial Completion Date, the Commission shall provide such funds as are necessary to increase the funds on deposit in the Ramp Up Account of the Operations and Maintenance Fund to the amount of $[14,000,000] (the “Ramp Up Reserve”). (b) The Commission shall thereafter apply the funds in the Operation and Maintenance Fund and the amounts transferred to the Operation and Maintenance Fund under Article V of this Indenture for the payment of Operation and Maintenance Expenses in accordance with the terms of this Indenture. Section 5.07 Capital Expenditures Fund. (a) The Trustee shall cause amounts in the Toll Revenue Fund, to the extent available, to be deposited into the Capital Expenditures Fund on each Monthly Funding Date in accordance with clause Seventeenth of Section 5.03(b). Any amounts on deposit in the Capital Expenditures Fund that are (i) certified by the Commission to no longer be needed for making Capital Expenditures Fund Permitted Expenditures, or (ii) in excess of the Capital Expenditures Fund Deposits Cap, shall be applied in accordance with the requirements of Section 5.03(c) of this Indenture. (b) On any date on which Capital Expenditures Fund Permitted Expenditures are due and payable or reasonably expected to become due and payable, monies on deposit in the Capital Expenditures Fund shall be applied by the Trustee pursuant to a Written Request of Commission to pay such Capital Expenditures Fund Permitted Expenditures. (c) If, after transferring any funds then on deposit in the Residual Fund in accordance with Section 5.12(c) hereof, on the Business Day prior to an interest payment date or 228 60 OHSUSA:765989901.12 principal payment date, the amount then on deposit in the Senior Lien Obligations Fund, the Second Lien Obligations Fund or the Subordinate Obligations Fund is insufficient to pay the principal of, and/or interest on, the related Senior Lien Obligations, Second Lien Obligations and/or Subordinate Obligations secured thereby then due, the Trustee shall make the following transfers from amounts on deposit in the Capital Expenditures Fund in the following order of priority; first, to the Senior Lien Obligations Fund, the amount necessary to pay principal and interest due and payable on such interest payment date or principal payment date on the Senior Lien Obligations; second, to the Second Lien Obligations Fund, the amount necessary to pay principal and interest due and payable on such interest payment date or principal payment date on the Second Lien Obligations and third, to the Subordinate Obligations Fund, the amount necessary to pay principal and interest due and payable on such interest payment date or principal payment date on the Subordinate Obligations. Section 5.08 Senior Lien Obligations Reserve Fund. (a) On the date of issuance of any Series of Senior Lien Obligations that has a Senior Lien Obligations Reserve Requirement, the Senior Lien Obligations Reserve Requirement for those Senior Lien Obligations shall be deposited in the Senior Lien Obligations Reserve Fund in an Account solely for the benefit of those Senior Lien Obligations. Alternatively, the Supplemental Indenture for any Series of Senior Lien Obligations may establish a pooled Senior Lien Obligations Reserve Requirement for that Series of Senior Lien Obligations and any one or more subsequently issued Series of Senior Lien Obligations with the same pooled Senior Lien Obligations Reserve Requirement, in which case the Senior Lien Obligations Reserve Requirement for the initial issue of such Senior Lien Obligations shall be deposited in the Senior Lien Obligations Reserve Fund in an Account solely for the benefit of those Senior Lien Obligations and any additional Senior Lien Obligations with the same pooled Senior Lien Obligations Reserve Requirement, and on the date of issuance of any such additional Senior Lien Obligations, there shall be deposited in the Account the amount necessary to increase the balance in the Account to an amount equal to the Senior Lien Obligations Reserve Requirement for all Senior Lien Obligations secured by that Account. (b) Monies on deposit in each Account within the Senior Lien Obligations Reserve Fund shall be applied by the Trustee as follows: (1) If on any (x) interest payment date for Senior Lien Obligations secured by an Account within the Senior Lien Obligations Reserve Fund, (y) principal payment date for such Senior Lien Obligations or (z) redemption date on which such Senior Lien Obligations are subject to mandatory sinking fund redemption, the amount on deposit in the applicable Account of the Senior Lien Obligations Fund, determined after taking into account all amounts transferred to such Account of the Senior Lien Obligations Fund in accordance with clauses Third and Fourth of Section 5.03(b), and amounts transferred from the following Funds in the following order of priority, the Residual Fund, the Capital Expenditures Fund, the Repair and Rehabilitation Fund and the Toll Revenue Fund in accordance with this Indenture on or prior to such date, is not sufficient to pay interest and/or principal and/or the redemption price (excluding any redemption premium) due on such Senior Lien Obligations, then moneys shall be transferred to the Senior Lien Obligations Interest Account and/or the Senior Lien 229 61 OHSUSA:765989901.12 Obligations Principal Account, as applicable, from the applicable Account of the Senior Lien Obligations Reserve Fund which, together with moneys then on deposit in the applicable Account of the Senior Lien Obligations Fund, will be sufficient to pay interest and/or principal and/or the redemption price (excluding any redemption premium) due on such Senior Lien Obligations on such date. Moneys shall be transferred first to the Senior Lien Obligations Interest Account until such Account, together with any available funds then on deposit in the Senior Lien Obligations Interest Account, is sufficiently funded with respect to such Senior Lien Obligations and thereafter, to the Senior Lien Obligations Principal Account until such Account, together with any available funds then on deposit in the Senior Lien Obligations Principal Account, is sufficiently funded with respect to such Senior Lien Obligations. (2) Upon the maturity of Senior Lien Obligations secured by funds on deposit in an Account of the Senior Lien Obligations Reserve Fund or upon the earlier redemption of all or any portion of such Senior Lien Obligations, the Commission may direct the Trustee to transfer amounts on deposit in the applicable Account within the Senior Lien Obligations Reserve Fund to the Senior Lien Obligations Principal Account for application to the final payment of principal of all or a portion of the Senior Lien Obligations secured thereby or to an escrow account established for defeasance of such Senior Lien Obligations pursuant to Article X hereof, provided that, if less than all of the Senior Lien Obligations mature or are redeemed, the amount remaining on deposit in such Account of the Senior Lien Obligations Reserve Fund following any such transfer shall not be less than the Senior Lien Obligations Reserve Requirement applicable to the Senior Lien Obligations secured thereby to remain Outstanding. (3) Except as provided in paragraph (2) above, any amounts on deposit in an Account of the Senior Lien Obligations Reserve Fund in excess of the applicable Senior Lien Obligations Reserve Requirement shall be applied in accordance with Section 5.03(c) of this Indenture. (c) The lien on the Senior Lien Obligations Reserve Fund (and all earnings thereon) shall apply only to the Senior Lien Obligations and the related interest of the Holder of such Senior Lien Obligations with respect to amounts on deposit in such Fund from time to time, and such amounts shall be solely for the benefit of such holder of Senior Lien Obligations until such funds have been disbursed in accordance with this Section. If necessary, the Commission shall instruct the Trustee to create Accounts within the Senior Lien Obligations Reserve Fund to facilitate compliance with the provisions of this paragraph. (d) The Senior Lien Obligations Reserve Requirement for any Series of Senior Lien Obligations may be permitted or required by the Supplemental Indenture establishing the Senior Lien Obligations Reserve Requirement to be funded in whole or in part with a Reserve Facility. The terms and conditions for any Reserve Facility shall be set forth in the Reserve Facility or the Supplemental Indenture establishing the Senior Lien Obligations Reserve Requirement to be met in whole or in part by the Reserve Facility, provided that those terms and conditions shall conform to and be consistent with the provisions set forth in this Section 5.08. The Trustee shall withdraw cash (and liquidate investments to produce cash) and draw on Reserve Facilities in or with respect to any Account in the Senior Lien Obligations 230 62 OHSUSA:765989901.12 Reserve Fund to fund payments of principal of and interest on Senior Lien Obligations supported by such Account in the Senior Lien Obligations Reserve Fund in the manner and in the order specified herein and in the applicable Supplemental Indenture or Supplemental Indentures. This Indenture shall not be discharged until all Reserve Facility Costs owing to a Reserve Facility Provider have been paid in full. (e) Upon the occurrence of a Bankruptcy Related Event of which the Trustee shall be notified in writing, any Account within the Subordinate Obligations Reserve Fund that secures payment of the principal and interest on a Subordinate Obligation in the form of or securing payment of a TIFIA Loan, will become an Account within the Senior Lien Obligations Reserve Fund, will be funded on a parity with any other Accounts within the Senior Lien Obligations Reserve Fund and will be available only to pay principal and interest on the Parity Obligation in the form of or securing payment of such TIFIA Loan. The Parity Obligation in the form of or securing payment of a TIFIA Loan will not be secured by any other Account within the Senior Lien Obligations Reserve Fund. Section 5.09 Second Lien Obligations Reserve Fund. (a) On the date of issuance of any Series of Second Lien Obligations that has a Second Lien Obligations Reserve Requirement, the Second Lien Obligations Reserve Requirement for those Second Lien Obligations shall be deposited in the Second Lien Obligations Reserve Fund in an Account solely for the benefit of those Second Lien Obligations. Alternatively, the Supplemental Indenture for any Series of Second Lien Obligations may establish a pooled Second Lien Obligations Reserve Requirement for those Second Lien Obligations and any one or more subsequently issued Second Lien Obligations with the same pooled Second Lien Obligations Reserve Requirement, in which case the Second Lien Obligations Reserve Requirement for the initial issue of such Second Lien Obligations shall be deposited in the Second Lien Obligations Reserve Fund in an Account solely for the benefit of those Second Lien Obligations and any additional Second Lien Obligations with the same pooled Second Lien Obligations Reserve Requirement, and on the date of issuance of any such additional Second Lien Obligations, there shall be deposited in the Account the amount necessary to increase the balance in the Account to an amount equal to the Second Lien Obligations Reserve Requirement for all Second Lien Obligations secured by that Account. (b) Monies on deposit in each Account within the Second Lien Obligations Reserve Fund shall be applied by the Trustee as follows: (1) If on any (x) interest payment date for Second Lien Obligations secured by an Account within the Second Lien Obligations Reserve Fund, (y) principal payment date for such Second Lien Obligations or (z) redemption date on which such Second Lien Obligations are subject to mandatory sinking fund redemption, the amount on deposit in the applicable Account of the Second Lien Obligations Fund, determined after taking into account all amounts transferred to such Account of the Second Lien Obligations Fund in accordance with clauses Ninth and Tenth of Section 5.03(b), and amounts transferred from the following Funds in the following order of priority, the Residual Fund, the Capital Expenditures Fund, the Repair and Rehabilitation Fund and the Toll Revenue Fund in accordance with this Indenture on or prior to such date, is not 231 63 OHSUSA:765989901.12 sufficient to pay interest and/or principal and/or the redemption price (excluding any redemption premium) due on such Second Lien Obligations, then moneys shall be transferred to the Second Lien Obligations Interest Account and/or the Second Lien Obligations Principal Account, as applicable, from the applicable Account of the Second Lien Obligations Reserve Fund which, together with moneys then on deposit in the applicable Account of the Second Lien Obligations Fund, will be sufficient to pay interest and/or principal and/or the redemption price (excluding any redemption premium) due on such Second Lien Obligations on such date. Moneys shall be transferred first to the Second Lien Obligations Interest Account until such Account, together with any available funds then on deposit in the Second Lien Obligations Interest Account, is sufficiently funded with respect to such Second Lien Obligations and thereafter, to the Second Lien Obligations Principal Account until such Account, together with any available funds then on deposit in the Second Lien Obligations Principal Account, is sufficiently funded with respect to such Second Lien Obligations. (2) Upon the maturity of Second Lien Obligations secured by funds on deposit in an Account of the Second Lien Obligations Reserve Fund or upon the earlier redemption of all or any portion of such Second Lien Obligations, the Commission may direct the Trustee to transfer amounts on deposit in the applicable Account within the Second Lien Obligations Reserve Fund to the Second Lien Obligations Principal Account for application to the final payment of principal of all or a portion of the Second Lien Obligations secured thereby or to an escrow account established for defeasance of such Second Lien Obligations pursuant to Article X hereof, provided that, if less than all of the Second Lien Obligations mature or are redeemed, the amount remaining on deposit in such Account of the Second Lien Obligations Reserve Fund following any such transfer shall not be less than the Second Lien Obligations Reserve Requirement applicable to the Second Lien Obligations secured thereby to remain Outstanding. (3) Except as provided in paragraph (2) above, any amounts on deposit in an Account of the Second Lien Obligations Reserve Fund in excess of the applicable Second Lien Obligations Reserve Requirement shall be applied in accordance with Sections 5.03(c) of this Indenture. (c) The lien on the Second Lien Obligations Reserve Fund (and all earnings thereon) shall apply only to the Second Lien Obligations and the related interest of the Holder of such Second Lien Obligations with respect to amounts on deposit in such Fund from time to time, and such amounts shall be solely for the benefit of such holder of Second Lien Obligations until such funds have been disbursed in accordance with this Section. If necessary, the Commission shall instruct the Trustee to create Accounts within the Second Lien Obligations Reserve Fund to facilitate compliance with the provisions of this paragraph. (d) The Second Lien Obligations Reserve Requirement for any Series of Second Lien Obligations may be permitted or required by the Supplemental Indenture establishing the Second Lien Obligations Reserve Requirement to be funded in whole or in part with a Reserve Facility. The terms and conditions for any Reserve Facility shall be set forth in the Reserve Facility or the Supplemental Indenture establishing the Second Lien Obligations Reserve Requirement to be met in whole or in part by the Reserve Facility, provided that those 232 64 OHSUSA:765989901.12 terms and conditions shall conform to and be consistent with the provisions set forth in this Section 5.09. The Trustee shall withdraw cash (and liquidate investments to produce cash) and draw on Reserve Facilities in or with respect to any Account in the Second Lien Obligations Reserve Fund to fund payments of principal of and interest on Second Lien Obligations supported by such Account in the Second Lien Obligations Reserve Fund in the manner and in the order specified herein and in the applicable Supplemental Indenture or Supplemental Indentures. This Indenture shall not be discharged until all Reserve Facility Costs owing to a Reserve Facility Provider have been paid in full. Section 5.10 Subordinate Obligations Reserve Fund. (a) The Subordinate Obligations Reserve Requirement for those Subordinate Obligations secured by the Subordinate Obligations Reserve Fund or an Account therein shall be deposited in the Subordinate Obligations Reserve Fund in an Account solely for the benefit of those Subordinate Obligations on the dates and in the amounts set forth in the Supplemental Indenture authorizing the issuance of such Subordinate Obligations; provided, however, alternatively, the Supplemental Indenture for any Series of Subordinate Obligations may establish a pooled Subordinate Obligations Reserve Requirement for those Subordinate Obligations and any one or more subsequently issued Subordinate Obligations with the same pooled Subordinate Obligations Reserve Requirement, in which case the Subordinate Obligations Reserve Requirement for the initial issue of such Subordinate Obligations shall be deposited in the Subordinate Obligations Reserve Fund in an Account solely for the benefit of those Subordinate Obligations and any additional Subordinate Obligations with the same pooled Subordinate Obligations Reserve Requirement, and on the date of issuance of any such additional Subordinate Obligations, there shall be deposited in the Account the amount necessary to increase the balance in the Account to an amount equal to the Subordinate Obligations Reserve Requirement for all Subordinate Obligations secured by that Account. (b) Monies on deposit in each Account within the Subordinate Obligations Reserve Fund shall be applied by the Trustee as follows: (1) If on any (x) interest payment date for Subordinate Obligations secured by an Account within the Subordinate Obligations Reserve Fund, (y) principal payment date for such Subordinate Obligations or (z) redemption date on which such Subordinate Obligations are subject to mandatory sinking fund redemption, the amount on deposit in the applicable Account of the Subordinate Obligations Fund, determined after taking into account all amounts transferred to such Account of the Subordinate Obligations Fund in accordance with clauses Twelfth, Thirteenth and Fourteenth of Section 5.03(b), and amounts transferred from the following Funds in the following order of priority, the Residual Fund, the Capital Expenditures Fund, the Repair and Rehabilitation Fund and the Toll Revenue Fund in accordance with this Indenture on or prior to such date, is not sufficient to pay interest and/or principal and/or the redemption price (excluding any redemption premium) due on such Subordinate Obligations, then moneys shall be transferred to the Subordinate Obligations Interest Account and/or the Subordinate Obligations Principal Account, as applicable, from the applicable Account of the Subordinate Obligations Reserve Fund which, together with moneys then on deposit in the applicable Account of the Subordinate Obligations Fund, will be sufficient to pay 233 65 OHSUSA:765989901.12 interest and/or principal and/or the redemption price (excluding any redemption premium) due on such Subordinate Obligations on such date. Moneys shall be transferred first to the Subordinate Obligations Interest Account until such Account, together with any available funds then on deposit in the Subordinate Obligations Interest Account, is sufficiently funded with respect to such Subordinate Obligations and thereafter, to the Subordinate Obligations Principal Account until such Account, together with any available funds then on deposit in the Subordinate Obligations Principal Account, is sufficiently funded with respect to such Subordinate Obligations. (2) Upon the maturity of Subordinate Obligations secured by funds on deposit in an Account of the Subordinate Obligations Reserve Fund or upon the earlier redemption of all or any portion of such Subordinate Obligations, the Commission may direct the Trustee to transfer amounts on deposit in the applicable Account within the Subordinate Obligations Reserve Fund to the Subordinate Obligations Principal Account for application to the final payment of principal of all or a portion of the Subordinate Obligations secured thereby or to an escrow account established for defeasance of such Subordinate Obligations pursuant to Article X hereof, provided that, if less than all of the Subordinate Obligations mature or are redeemed, the amount remaining on deposit in such Account of the Subordinate Obligations Reserve Fund following any such transfer shall not be less than the Subordinate Obligations Reserve Requirement applicable to the Subordinate Obligations secured thereby to remain Outstanding. (3) Except as provided in paragraph (2) above, any amounts on deposit in an Account of the Subordinate Obligations Reserve Fund in excess of the applicable Subordinate Obligations Reserve Requirement shall be applied in accordance with Section 5.03(c) of this Indenture. (c) The lien on the Subordinate Obligations Reserve Fund (and all earnings thereon) shall apply only to the Subordinate Obligations and the related interest of the Holder of such Subordinate Obligations with respect to amounts on deposit in such Fund from time to time, and such amounts shall be solely for the benefit of such holder of Subordinate Obligations until such funds have been disbursed in accordance with this Section. If necessary, the Commission shall instruct the Trustee to create Accounts within the Subordinate Obligations Reserve Fund to facilitate compliance with the provisions of this paragraph. (d) The Subordinate Obligations Reserve Requirement for any Series of Subordinate Obligations may be permitted or required by the Supplemental Indenture establishing the Subordinate Obligations Reserve Requirement to be funded in whole or in part with a Reserve Facility. The terms and conditions for any Reserve Facility shall be set forth in the Reserve Facility or the Supplemental Indenture establishing the Subordinate Obligations Reserve Requirement to be met in whole or in part by the Reserve Facility, provided that those terms and conditions shall conform to and be consistent with the provisions set forth in this Section 5.10. The Trustee shall withdraw cash (and liquidate investments to produce cash) and draw on Reserve Facilities in or with respect to any Account in the Subordinate Obligations Reserve Fund to fund payments of principal of and interest on Subordinate Obligations supported by such Account in the Subordinate Obligations Reserve Fund in the manner and in the order specified herein and in the applicable Supplemental Indenture or Supplemental 234 66 OHSUSA:765989901.12 Indentures. This Indenture shall not be discharged until all Reserve Facility Costs owing to a Reserve Facility Provider have been paid in full. (e) Upon the occurrence of a Bankruptcy Related Event of which the Trustee shall be notified in writing, any Account within the Subordinate Obligations Reserve Fund that secures payment of the principal and interest on a Subordinate Obligation in the form of or securing payment of a TIFIA Loan, will become an Account within the Senior Lien Obligations Reserve Fund, will be funded on a parity with any other Accounts within the Senior Lien Obligations Reserve Fund and will be available only to pay principal and interest on the Parity Obligation in the form of or securing payment of such TIFIA Loan. The Parity Obligation in the form of or securing payment of a TIFIA Loan will not be secured by any other Account within the Senior Lien Obligations Reserve Fund. Section 5.11 Repair and Rehabilitation Fund. (a) The Trustee shall, in accordance with clause Sixth of Section 5.03(b), cause amounts in the Toll Revenue Fund, to the extent available, to be deposited into the Repair and Rehabilitation Fund from time to time in an amount equal to the Scheduled Repair and Rehabilitation Fund Required Deposit or the Alternative Repair and Rehabilitation Fund Required Deposit, as applicable. Any amounts on deposit in the Repair and Rehabilitation Fund certified by the Commission as no longer being needed for Repair and Rehabilitation Fund Permitted Expenditures shall be applied in accordance with the requirements of Section 5.03(c) of this Indenture. (b) On any date on which Repair and Rehabilitation Fund Permitted Expenditures are due and payable or reasonably expected to become due and payable, monies on deposit in the Repair and Rehabilitation Fund shall be applied by the Trustee pursuant to a Written Request of Commission to pay such Repair and Rehabilitation Fund Permitted Expenditures. (c) If, after transferring any funds then on deposit in the Residual Fund in accordance with Section 5.12(c) hereof and in the Capital Expenditures Fund in accordance with Section 5.07(c) hereof, on the Business Day prior to an interest payment date or principal payment date, the amount then on deposit in the Senior Lien Obligations Fund, the Second Lien Obligations Fund or the Subordinate Obligations Fund is insufficient to pay the principal of, and/or interest on, the related Senior Lien Obligations, Second Lien Obligations and/or Subordinate Obligations secured thereby then due, the Trustee shall make the following transfers from amounts on deposit in the Repair and Rehabilitation Fund in the following order of priority; first, to the Senior Lien Obligations Fund, the amount necessary to pay principal and interest due and payable on such interest payment date or principal payment date on the Senior Lien Obligations; second, to the Second Lien Obligations Fund, the amount necessary to pay principal and interest due and payable on such interest payment date or principal payment date on the Second Lien Obligations and third, to the Subordinate Obligations Fund, the amount necessary to pay principal and interest due and payable on such interest payment date or principal payment date on the Subordinate Obligations. 235 67 OHSUSA:765989901.12 Section 5.12 Holding Fund; Commission Loan Fund; Residual Fund; Surplus Fund. (a) On each Monthly Funding Date, the Trustee shall, in accordance with clause Seventeenth of Section 5.03(b), cause amounts in the Toll Revenue Fund, to the extent available after application of funds for the purposes specified in clauses First through Seventeenth of Section 5.03(b), to be deposited into the Holding Fund. Such amounts will be retained in such fund until the following conditions are satisfied (the “Blocked Payment Conditions”): (1) No Event of Default shall have occurred and be continuing; (2) All reserve funds are fully funded; (3) All required deposits to date have been made to the Repair and Rehabilitation Fund; (4) No default exists under the Operating Agreement; (5) The Commission certifies that it projects senior debt service coverage for the current, two year historical, and two year projected Calculation Dates of at least 1.30; and (6) The Commission certifies that it projects total debt service coverage for the current, two year historical, and two year projected Calculation Dates of at least 1.30. (b) On each Monthly Funding Date, provided the Blocked Payment Conditions are satisfied, the Trustee cause all amounts on deposit in the Holding Fund to be deposited in the Commission Loan Fund and on June 1 of each year, the Trustee shall cause any amounts on deposit in the Commission Loan Fund to be paid to the Commission to retire, to the extent available, the outstanding amount of the Commission Loan. (c) On each Monthly Funding Date, the Trustee shall, in accordance with clause Twentieth of Section 5.03(b), cause amounts in the Toll Revenue Fund, to the extent available after application of funds for the purposes specified in clauses First through Nineteenth of Section 5.03(b), to be deposited into the Residual Fund. (d) If on the Business Day prior to an interest payment date or principal payment date, the amount then on deposit in the Senior Lien Obligations Fund, the Second Lien Obligations Fund or the Subordinate Obligations Fund is insufficient to pay the principal of, and/or interest on, the related Senior Lien Obligations, Second Lien Obligations and/or Subordinate Obligations secured thereby then due, the Trustee shall make the following transfers from amounts on deposit in the Holding Fund, the Commission Loan Fund or the Residual Fund in the following order of priority; first, to the Senior Lien Obligations Fund, the amount necessary to pay principal and interest due and payable on such interest payment date or principal payment date on the Senior Lien Obligations; second, to the Second Lien Obligations Fund, the amount necessary to pay principal and interest due and payable on such interest 236 68 OHSUSA:765989901.12 payment date or principal payment date on the Second Lien Obligations and third, to the Subordinate Obligations Fund, the amount necessary to pay principal and interest due and payable on such interest payment date or principal payment date on the Subordinate Obligations. (e) On the Business Day prior to each date for payment of TIFIA Scheduled Debt Service related to a Subordinate Obligation, after making the transfers described in subsection (c) above, the Trustee shall transfer from the Commission Loan Fund or Residual Fund and deposit to the Subordinate Interest Account within the Subordinate Obligations Fund an amount equal to the shortfall, if any, between (i) the combined TIFIA Mandatory Debt Service and TIFIA Scheduled Debt Service due and payable on such payment date and (ii) the amount then on deposit in the Subordinate Interest Account. (f) On June 1 and December 1 each year prior to the TIFIA Loan Prepayment Commencement Date and provided the Blocked Payment Conditions have been met, after the payment of all amounts due on the Commission’s Obligations on such date, the amounts remaining on deposit in the Residual Fund in excess of the then-current Residual Fund Scheduled Retained Balance shall be transferred on each such date to the Surplus Fund; provided that, to the actual knowledge of the Trustee, no Event of Default has occurred and is continuing hereunder and that there is no shortfall in funding the amounts required by clauses First through Nineteenth of Section 5.03(c) on such date. On June 1 and December 1 each year, commencing with the first June 1 or December 1 following the TIFIA Loan Prepayment Commencement Date, after the payment of all amounts due on the Commission’s Obligations on such date and repayment of the Commission Loan, the amounts remaining on deposit in the Residual Fund in excess of the then-current Residual Fund Scheduled Retained Balance shall be transferred on each such date as follows: (1) while Obligations in the form of or securing payment of a TIFIA Loan remain Outstanding: (A) fifty percent (50%) to the TIFIA Loan Prepayment Account, and (B) fifty percent (50%) to the Surplus Fund; or (2) if no TIFIA Loan remains Outstanding, to the Surplus Fund; provided that, to the actual knowledge of the Trustee, no Event of Default has occurred and is continuing hereunder and that there is no shortfall in funding the amounts required by clauses First through Nineteenth of Section 5.03(c) on such date. (g) Funds on deposit in the Surplus Fund and funds credited to such Fund and funds paid to the Commission to retire the Commission Loan will not be subject to the lien and pledge of this Indenture, and the Commission will have the exclusive right to withdraw or otherwise dispose of or transfer funds on deposit in the Surplus Fund to any account (or to such Person) as directed by the Commission in writing in its sole discretion. Section 5.13 Rebate Fund. There shall be deposited in the Rebate Fund amounts transferred in accordance with clause Second Section 5.03(b). All money at any time deposited in the Rebate Fund shall be held by the Trustee to satisfy the Rebate Requirement (as defined in the Tax Certificate) for payment to the United States of America. The Trustee shall have no responsibility with respect to the Rebate Fund or the Rebate Requirement except to follow the written instructions of the Commission. Section 5.14 Senior Lien Obligations Interest Account. 237 69 OHSUSA:765989901.12 (a) On each Monthly Funding Date, the Trustee shall, in accordance with clause Third of Section 5.03(b), cause amounts in the Toll Revenue Fund, to the extent available after application of funds for the purposes specified in clauses First and Second of Section 5.03(b), and before making any transfers to the Senior Lien Obligations Fund from the Residual Fund in accordance with Section 5.12(c), from the Capital Expenditures Fund in accordance with Section 5.07(c), from the Repair and Rehabilitation Fund in accordance with Section 5.11(c) and from the Senior Lien Obligations Reserve Fund in accordance with Section 5.08(b), in such order of priority, to be deposited into the Senior Lien Obligations Interest Account. (b) On the Business Day prior to each date when the interest portion of debt service on any Senior Lien Obligations shall be due and payable, monies on deposit in the Senior Lien Obligations Interest Account shall be applied pro rata to the payment of the interest due on such Senior Lien Obligations in accordance with this Indenture. Section 5.15 Senior Lien Obligations Principal Account. (a) On each Monthly Funding Date, the Trustee shall, in accordance with clause Fourth of Section 5.03(b), cause amounts in the Toll Revenue Fund, to the extent available after application of funds for the purposes specified in clauses First through Third of Section 5.03(b), and before making any transfers to the Senior Lien Obligations Fund from the Residual Fund in accordance with Section 5.12(c), from the Capital Expenditures Fund in accordance with Section 5.07(c), from the Repair and Rehabilitation Fund in accordance with Section 5.11(c) and from the Senior Lien Obligations Reserve Fund in accordance with Section 5.08(b), in such order of priority, to be deposited into the Senior Lien Obligations Principal Account. (b) On the Business Day prior to each date when the principal portion of debt service (including any mandatory sinking fund redemption payments) on any Senior Lien Obligations shall be due and payable, monies on deposit in the Senior Lien Obligations Principal Account shall be applied pro rata to the payment of the principal portion of such Senior Lien Obligations in accordance with this Indenture. Section 5.16 Second Lien Obligations Interest Account. (a) On each Monthly Funding Date, the Trustee shall, in accordance with clause Ninth of Section 5.03(b), cause amounts in the Toll Revenue Fund, to the extent available after application of funds for the purposes specified in clauses First through Seventh of Section 5.03(b), and before making any transfers to the Second Lien Obligations Fund from the Residual Fund in accordance with Section 5.12(b), from the Capital Expenditures Fund in accordance with Section 5.07(c), from the Repair and Rehabilitation Fund in accordance with Section 5.11(c) and from the Second Lien Obligations Reserve Fund in accordance with Section 5.09(b), in such order of priority, to be deposited into the Second Lien Obligations Interest Account. (b) On the Business Day prior to each date when the interest portion of debt service on any Second Lien Obligations shall be due and payable, monies on deposit in the Second Lien Obligations Interest Account shall be transferred pro rata to the trustee for the interest due on such Second Lien Obligations in accordance with this Indenture. 238 70 OHSUSA:765989901.12 Section 5.17 Second Lien Obligations Principal Account. (a) On each Monthly Funding Date, the Trustee shall, in accordance with clause Tenth of Section 5.03(b), cause amounts in the Toll Revenue Fund, to the extent available after application of funds for the purposes specified in clauses First through Ninth of Section 5.03(b), and before making any transfers to the Second Lien Obligations Fund from the Residual Fund in accordance with Section 5.12(b), from the Capital Expenditures Fund in accordance with Section 5.07(c), from the Repair and Rehabilitation Fund in accordance with Section 5.11(c) and from the Second Lien Obligations Reserve Fund in accordance with Section 5.09(b), in such order of priority, to be deposited into the Second Lien Obligations Principal Account. (b) On the Business Day prior to the date when the principal portion of debt service (including any mandatory sinking fund redemption payments) on any Second Lien Obligations shall be due and payable, monies on deposit in the Second Lien Obligations Principal Account shall be transferred pro rata to the trustee for the principal portion of such Second Lien Obligations in accordance with this Indenture. Section 5.18 Subordinate Obligations Interest Account. (a) On each Monthly Funding Date, the Trustee shall, in accordance with clause Twelfth of Section 5.03(b), cause amounts in the Toll Revenue Fund, to the extent available after application of funds for the purposes specified in clauses First through Eleventh of Section 5.03(b), and before making any transfers to the Subordinate Obligations Fund from the Residual Fund in accordance with Section 5.12(b), from the Capital Expenditures Fund in accordance with Section 5.07(c), from the Repair and Rehabilitation Fund in accordance with Section 5.11(c) and from the Subordinate Obligations Reserve Fund in accordance with Section 5.10(b), in such order of priority, to be deposited into the Subordinate Obligations Interest Account. (b) On the Business Day prior to the date when the interest portion of debt service on any Subordinate Obligations shall be due and payable, monies on deposit in the Subordinate Obligations Interest Account shall be transferred to the trustee for or Holder of such Subordinate Obligations in accordance this Indenture. Section 5.19 Subordinate Obligations Principal Account. (a) On each Monthly Funding Date, the Trustee shall, in accordance with clauses Thirteenth and Fifteenth of Section 5.03(b), cause amounts in the Toll Revenue Fund, to the extent available after application of funds for the purposes specified in clauses First through Eleventh and, to the extent applicable, Thirteenth and Fourteenth, of Section 5.03(b), and before making any transfers to the Subordinate Obligations Fund from the Residual Fund in accordance with Section 5.12(b), from the Capital Expenditures Fund in accordance with Section 5.07(c), from the Repair and Rehabilitation Fund in accordance with Section 5.11(c) and from the Subordinate Obligations Reserve Fund in accordance with Section 5.10(b), in such order of priority, to be deposited into the Subordinate Obligations Principal Account. (b) On the Business Day prior to the date when the interest portion of debt service on any Subordinate Obligations shall be due and payable, monies on deposit in the 239 71 OHSUSA:765989901.12 Subordinate Obligations Principal Account shall be transferred to the trustee for or Holder of such Subordinate Obligations in accordance this Indenture. Section 5.20 TIFIA Loan Prepayment Account. (a) On June 1 and December 1, commencing with the first June 1 or December 1 following the TIFIA Loan Prepayment Commencement Date, the Trustee shall, in accordance with Section 5.12(e), transfer fifty percent (50%) of the balance then on deposit in the Residual Fund to the TIFIA Loan Prepayment Account. (b) The Trustee shall transfer amounts on deposit in TIFIA Loan Prepayment Account for application to the prepayment of the applicable Obligations evidencing the TIFIA Loan in accordance with the provisions of the Supplemental Indenture pursuant to which such Obligations are issued. Section 5.21 Establishment and Application of the Redemption Fund. The Trustee shall establish, maintain and hold in trust a special Fund designated as the “Redemption Fund.” All moneys deposited by the Commission with the Trustee for the purpose of redeeming Obligations of any Series (other than pursuant to a mandatory sinking fund redemption) shall, unless otherwise provided in the Supplemental Indenture establishing the terms and conditions for such Series Obligations, be deposited in the Redemption Fund. All amounts deposited in the Redemption Fund shall be used and withdrawn by the Trustee solely for the purpose of redeeming Obligations of such Series and maturity as shall be specified by the Commission in a Written Request of the Commission delivered to the Trustee, in the manner, at the times and upon the terms and conditions specified in the Supplemental Indenture pursuant to which such Series of Obligations was issued. Such Written Request of the Commission may specify that amounts on deposit in the Redemption Fund that remain unclaimed for a specified period of time shall be paid to the Commission, and the Trustee shall pay such unclaimed amounts to the Commission in accordance with the Written Request of the Commission. Section 5.22 Records. The Trustee shall cause to be kept and maintained records pertaining to each Fund and Account held by it and all disbursements therefrom and shall deliver monthly to the Commission and, for so long as any Obligations in the form of or securing payment of a TIFIA Loan remain Outstanding, to the TIFIA Lender statements of activity with respect to such Funds and Accounts, provided that the Trustee shall not be obligated to report as to any Fund or Account that (a) has a balance of zero and (b) has not had any activity since the last reporting date. In addition, the Commission shall cause to be kept and maintained records pertaining to each Fund and Account held by it and all disbursements therefrom and shall deliver monthly to the Trustee and, for so long as any Obligations in the form of or securing payment of a TIFIA Loan remain Outstanding, to the TIFIA Lender statements of activity with respect to such Funds and Accounts, provided that the Commission shall not be obligated to report as to any Fund or Account that (a) has a balance of zero and (b) has not had any activity since the last reporting date. 240 72 OHSUSA:765989901.12 Section 5.23 Investment by Trustee. Unless otherwise provided in a Supplemental Indenture, moneys held by the Trustee in the Funds and Accounts created hereunder shall be invested and reinvested in Permitted Investments in accordance with the written instructions of an Authorized Representative. Unless otherwise specified in the Supplemental Indenture with respect to a Fund or Account created pursuant to such Supplemental Indenture, all Permitted Investments shall be held by or under the control of the Trustee and shall be deemed at all times to be a part of the Fund or Account that was used to purchase the Permitted Investment. Unless otherwise provided by a Written Request of the Commission or in a Supplemental Indenture with respect to a Fund or Account created pursuant thereto, all interest, profits and other income received from the investment of moneys in any Fund or Account held by the Trustee, other than the Rebate Fund and the Accounts in the Project Fund, shall be transferred to the Toll Revenue Fund when received. All interest, profits and other income received from the investment of moneys in the Rebate Fund shall be deposited in the Rebate Fund. All interest, profits and other income received from the investment of monies in the Operation and Maintenance Fund shall be deposited in the Operation and Maintenance Fund. All interest, profits and other income received from the investment of monies in the Surplus Fund shall be deposited in the Surplus Fund. Unless otherwise provided in a Supplemental Indenture establishing an Account within the Project Fund, all interest, profits and other income received from the investment of moneys in an Account within the Project Fund shall be deposited in such Account. Notwithstanding anything to the contrary contained in this paragraph, an amount of interest received with respect to any Permitted Investment equal to the amount of accrued interest, if any, paid as part of the purchase price of such Permitted Investment shall be credited to the Fund or Account from which such accrued interest was paid. The Trustee is authorized and directed to cause to be sold or redeemed and reduced to cash a sufficient amount of Permitted Investments whenever the cash balance in any Fund or Account is or will be insufficient to make any required disbursement. The Trustee shall not be responsible for any depreciation in the value of any Permitted Investment or for any loss resulting from such sale or redemption. Absent a Written Request of the Commission instructing the Trustee how to invest the cash balance in a Fund or Account held by the Trustee hereunder, the Trustee shall hold such cash balances uninvested pending its receipt of such a Written Request of the Commission. All Permitted Investments credited to the Senior Lien Obligations Reserve Fund, the Second Lien Obligations Reserve Fund or the Subordinate Obligations Reserve Fund shall be valued by the Trustee as of each Calculation Date. All Permitted Investments credited to the Senior Lien Obligations Reserve Fund, the Second Lien Obligations Reserve Fund or the Subordinate Obligations Reserve Fund shall be valued at their fair market value determined to the extent practical by reference to the closing bid price thereof published in The Wall Street Journal or any other financial publication or generally recognized pricing information service selected by the Trustee in its discretion. The Trustee may use and rely conclusively and without liability upon any generally recognized pricing information service (including brokers and dealers in securities) available to it. 241 73 OHSUSA:765989901.12 The Commission acknowledges that regulations of the Comptroller of the Currency grant the Commission the right to receive brokerage confirmations of the security transactions as they occur, at no additional cost. To the extent permitted by law, the Commission specifically waives compliance with 12 C.F.R. 12 and hereby notifies the Trustee that no brokerage confirmations need be sent relating to the security transactions as they occur. The Trustee or its affiliates may act as sponsor, advisor, principal or agent in the acquisition or disposition of any investment with the prior written approval of an Authorized Representative. The Trustee may commingle any of the moneys held by it pursuant to this Indenture (except for amounts on deposit in the Rebate Fund, the Sales Tax Revenue Bonds Account within the Project Fund, and any Fund or Account established to hold the proceeds of a drawing on any Credit Support Instrument) for investment purposes only; provided, however, that the Trustee shall account separately for the moneys belonging to each Fund or Account established pursuant to this Indenture and held by it. The Commission shall not commingle the moneys held by it in the Operation and Maintenance Fund with any other funds held by the Commission. The Trustee may rely on the investment directions of the Commission as to both the suitability and legality of the directed investments. Section 5.24 Subsidy Payments. The Commission irrevocably directs that all Subsidy Payments with respect to Senior Lien Bonds be made directly to the Trustee for deposit in the Senior Lien Obligations Interest Account pursuant to this Indenture. The Commission irrevocably directs that all Subsidy Payments with respect to Second Lien Obligations be made directly to the Trustee for deposit in the Second Lien Obligations Interest Account pursuant to this Indenture. The Commission irrevocably directs that all Subsidy Payments with respect to Subordinate Obligations be made directly to the Trustee for deposit in the Subordinate Obligations Fund pursuant to this Indenture. Any such Subsidy Payments received by the Commission shall be promptly remitted to the Trustee. The Trustee shall deposit all such Subsidy Payments to the applicable Account upon receipt thereof. Section 5.25 Withdrawal and Application of Funds; Priority of Transfers from Funds and Accounts. (a) Except as provided in Sections 5.05, 5.07, 5.08, 5.09, 5.10, 5.11, 5.12, 5.13, 5.14, 5.15, 5.16, 5.17, 5.19, 5.20 and 5.21, each withdrawal or transfer of funds from the Funds and Accounts by the Trustee on behalf of the Commission in accordance herewith shall be made pursuant to an executed Funds Transfer Certificate, which certificate shall be provided and prepared by the Commission in accordance with the terms hereof and shall contain a certification by the Commission that such withdrawal or transfer complies with the requirements of this Indenture. (b) The Funds Transfer Certificate relating to each applicable Fund or Account shall be delivered to the Trustee (with a copy to the trustee for or Holder of any Second Lien Obligations or Subordinate Obligations) no later than two (2) Business Days prior to each date on which funds are proposed to be withdrawn from the applicable Fund or Account or transferred from a Fund or Account to another Fund or Account in accordance with this Indenture. The Trustee shall comply with any such Funds Transfer Certificate; provided, that if the trustee for or Holder of Second Lien Obligations or Subordinate Obligations provides written 242 74 OHSUSA:765989901.12 notice to the Trustee, the Commission and the other Secured Creditors that any payment, withdrawal or transfer of funds is not in compliance with this Indenture or the other Financing Documents and specifies such non-compliance in such notice, the Commission shall not be entitled to cause such proposed withdrawal until such time as it has submitted a revised Funds Transfer Certificate which complies with the terms hereof or thereof. (c) The Commission shall have the right to withdraw or cause to be transferred funds from the Operation and Maintenance Fund, the Capital Expenditures Fund and the Repair and Rehabilitation Fund solely for the purpose of payment of Operation and Maintenance Expenses, Capital Expenditures Fund Permitted Expenditures or Repair and Rehabilitation Fund Permitted Expenditures, respectively, at any time without any approval or consent of the Trustee or any other person. (d) Each Funds Transfer Certificate requesting a disbursement from an Account within the Project Fund shall contain the following certifications by the Commission or, as to paragraph (5), the Commission and the Consulting Engineer: (1) the names of the persons, firms or corporations to whom each such payment is due, including the Commission in the case of reimbursements or the Trustee in the case of payments of capitalized interest; (2) the respective amounts to be paid or reimbursed to such entities; (3) the purpose or Project Cost by general classification for which each such obligation to be paid or reimbursed was incurred; (4) that obligations in the stated amounts have been incurred by the Commission and presently are due and payable (except with respect to requisitions for capitalized interest, in which case amounts requisitioned, together with expected earnings from investment thereof, do not exceed amounts properly capitalizable as interest related to projects prior to their completion), or properly are reimbursable to the Commission, and that each item thereof is a Project Cost, is a proper charge against the applicable Account in the Project Fund, and has not been paid or reimbursed previously; (5) after giving effect to the requisition, sufficient funds are and will be available to the Commission to achieve substantial completion of the applicable Project on or prior to the applicable Long Stop Date; provided that this certification need not be provided with respect to requisitions made after the applicable Substantial Completion Date; (6) that there has not been filed with or served on the Commission any notice of lien, right of lien, or attachment upon or claim affecting the right of any person, firm or corporation named in such requisition to receive payment of any amounts which has not been released or will not be released simultaneously with the payment of such obligation; and 243 75 OHSUSA:765989901.12 (7) that, as of the date of such Funds Transfer Certificate, no event or condition exists that constitutes, or that with the notice or lapse of time or both, would constitute, an Event of Default under this Indenture. Section 5.26 Effect of Bankruptcy Related Event on TIFIA Loan. Notwithstanding any other provision to the contrary herein, upon the occurrence of any Bankruptcy Related Event, Subordinate Obligations in the form of or securing payment of the TIFIA Loan shall, automatically and without action on the part of the TIFIA Lender or any other person, immediately become Parity Obligations, and be of equal rank and on a parity with other Senior Lien Obligations, and the TIFIA Lender shall become and be entitled to all rights of an owner of Senior Lien Obligations hereunder (including, without limitation, the right of payment pro rata with other Senior Lien Obligations hereunder). Upon the occurrence of a Bankruptcy Related Event of which the Trustee shall be notified in writing, any Account within the Subordinate Obligations Reserve Fund that secures payment of the principal and interest on a Subordinate Obligation in the form of or securing payment of a TIFIA Loan, will become an Account within the Senior Lien Obligations Reserve Fund, will be funded on a parity with any other Accounts within the Senior Lien Obligations Reserve Fund and will be available only to pay principal and interest on the Parity Obligation in the form of or securing payment of such TIFIA Loan. The Parity Obligation in the form of or securing payment of a TIFIA Loan will not be secured by any other Account within the Senior Lien Obligations Reserve Fund. The provisions contained in this Section 5.26 and in Sections 1.01, 2.10, 2.12, 5.08(e), 5.10(e) and 7.06(b) of this Indenture with respect to the TIFIA Lender’s right to have the Subordinate Obligations in the form of or securing payment of the TIFIA Loan become and be secured as Parity Obligations upon the occurrence of a Bankruptcy Related Event shall be of no force or effect following the sale of the TIFIA Loan to a non-governmental commercial entity, but only with respect to that portion of the TIFIA Loan so sold. However, should an assignment or sale be made to a federal government agency or instrumentality, the Federal government shall retain the right to have the Subordinate Obligations in the form of or securing payment of the TIFIA Loan become and be secured as Parity Obligations upon the occurrence of any Bankruptcy Related Event. ARTICLE VI COVENANTS OF THE COMMISSION Section 6.01 Punctual Payment and Performance. The Commission will punctually pay the principal of and the interest on (and redemption premiums, if any, to become due on) its Obligations hereunder in strict conformity with the terms of the Act, this Indenture and such Obligations, and will faithfully observe and perform all of the agreements and covenants contained in this Indenture and such Obligations. Section 6.02 Against Encumbrances. The Commission will not create or cause or permit to be created any pledge, lien, charge or encumbrance having priority over the lien of the Senior Lien Obligations upon any part of the Trust Estate, except for Operation and 244 76 OHSUSA:765989901.12 Maintenance Expenses payable from Revenue. The Commission will not create or cause or permit to be created any pledge, lien, charge or encumbrance having parity with the lien of the Senior Lien Obligations upon any part of the Trust Estate except the lien of Senior Lien Obligations. The Commission will not create or cause or permit to be created any pledge, lien, charge or encumbrance having priority over the lien of the Second Lien Obligations upon any part of the Trust Estate except Senior Lien Obligations. The Commission will not create or cause or permit to be created any pledge, lien, charge or encumbrance having priority over the lien of the Subordinate Obligations upon any part of the Trust Estate, except Senior Lien Obligations, and Second Lien Obligations. The Commission will not create or permit to be created or issue any Obligations secured by the Trust Estate except as provided in Section 3.03. Section 6.03 Toll and Revenue Covenants. (a) The Commission covenants that it shall at all times, beginning in the first full Fiscal Year following the Substantial Completion Date for the I-15 Express Lanes Project, establish, levy, maintain and collect tolls in connection with the Toll Road and establish such charges for use of the property constituting part of the Toll Road, including, without limitation and as permitted by law, leasehold payments, concession payments, rents and other charges, as shall be sufficient, collectively, to produce Net Revenue in each Fiscal Year equal to or in excess of the ratios set forth in each of (1), (2), and (3) below: (1) one hundred fifty percent (150%) of the Annual Debt Service in such Fiscal Year on all Outstanding Senior Lien Obligations other than any TIFIA Loans such TIFIA Loans to be treated as Subordinate Obligations for purposes of the Coverage Ratio calculation, calculated on the basis of TIFIA Mandatory Debt Service if a TIFIA Loan is outstanding; (2) one hundred thirty percent (130%) of the Annual Debt Service in such Fiscal Year on all Outstanding Senior Lien Obligations, Second Lien Obligations and Subordinate Obligations, calculated on the basis of TIFIA Mandatory Debt Service if a TIFIA Loan is outstanding; and (3) one hundred percent (100%) of the Annual Debt Service in such Fiscal Year on all Outstanding Obligations, plus the amounts required to be deposited into the Senior Lien Obligations Reserve Fund, the Second Lien Obligations Reserve Fund, the Subordinate Obligations Reserve Fund, the Capital Expenditures Fund, and the Repair and Rehabilitation Fund and any other Fund established by a Supplemental Indenture to be funded by Revenue. In making the calculations in (1), (2), and (3) above, the Commission may take into consideration as a credit against Annual Debt Service any amounts received, or reasonably expected to be received, in the Fiscal Year from or as a result of any additional security irrevocably granted or pledged to the Bondholders by the Commission with respect to the Obligations in accordance with Section 9.01(b) of this Indenture; provided, that if such grant or pledge is not for the benefit of all Obligations, the amounts expected to be received may only be taken into account when making the calculation with respect to the Obligations receiving the benefit of such grant or pledge. 245 77 OHSUSA:765989901.12 (b) Beginning in the first full Fiscal Year following the Substantial Completion Date for the I-15 Express Lanes Project, the Commission covenants: (i) to compute projected Net Revenue for each Fiscal Year and the projected ratios described in Section 6.03(a)(1), (2) and (3) (each, a “Coverage Ratio”) within ten Business Days after the beginning of that Fiscal Year (such date of computation being hereinafter referred to as a “Coverage Calculation Date”); (ii) to furnish promptly to the Trustee a Certificate of the Commission setting forth the results of such computations; and (iii) if any Coverage Ratio is less than the applicable requirement of Section 6.03(a), to take such action as promptly as practicable after the Coverage Calculation Date (including, without limitation, increasing Toll Revenues through toll increases) as the Commission projects is necessary to cause each projected Coverage Ratio for each Fiscal Year to equal or exceed the requirement of Section 6.03(a) for each such Fiscal Year. Within 60 days after the end of each Fiscal Year (beginning with the first full Fiscal Year following the Substantial Completion Date for the I-15 Express Lanes Project), the Commission will file with the Trustee a report setting forth the Net Revenue for such Fiscal Year. The failure of toll rates to yield an amount sufficient to achieve each Coverage Ratio shall not be deemed to constitute an Event of Default so long as the Commission complies with the requirements set forth below in this Section 6.03(b). If any such report indicates that the Net Revenue for such Fiscal Year was less than the amount required pursuant to Section 6.03(a), then as soon as practicable after delivering such report to the Trustee and, while there are Outstanding Obligations in the form of or securing payment of a TIFIA Loan, the TIFIA Lender, the Commission shall employ a Traffic Consultant to review and analyze the operations of the Toll Road and to submit to the Board, as soon as practicable (but not later than such date as will enable the Board to act upon it within 180 days after the end of the Fiscal Year in question), a written report which shall include the actions that the Traffic Consultant recommends should be taken by the Commission with respect to (i) revising the toll rates, (ii) altering its methods of operation, or (iii) taking other action projected to produce the amount so required to comply in each year with each Coverage Ratio (or, if less, the maximum amount deemed feasible by the Traffic Consultant and that the Traffic Consultant estimates will not adversely affect the amount of Net Revenue). Promptly upon its receipt of such written report (and, in any case, within 180 days after the end of the Fiscal Year in question), after giving due consideration thereto, the Commission will revise the toll rates, as permitted by law, alter its methods of operation, or take such other action as it deems appropriate. Such revisions, alterations, or actions need not comply with the recommendations of the Traffic Consultant so long as Net Revenue projected by the Traffic Consultant to be produced by the revisions, alterations or actions then taken by the Commission are at least equal to the amount required hereinabove. The Trustee shall have no responsibility to review any written report received pursuant to this Section 6.03(b). (c) The Commission further covenants that such toll rates for traffic using the Toll Road will be established and maintained in a reasonable way to cover all traffic (other than vehicles used for maintaining the Toll Road; police, fire, and other public emergency vehicles; buses owned and operated by any public agency; vehicles with multiple passengers or which allow for a limited number of passengers, including motorcycles, according to policies determined by the State or the Commission; electric, hybrid-electric and other vehicles that meet emission-reduction policies determined by the State or the Commission; vehicles which are otherwise exempt from payment of tolls under State or federal law; and any vehicles during a 246 78 OHSUSA:765989901.12 public emergency declared by the Commission) consistent with the requirements hereof, but with such classifications as the Commission may deem appropriate. (d) Notwithstanding any provision to the contrary, nothing in this Section 6.03 shall be deemed to require the Commission to collect tolls and other fees with respect to which the Commission has determined, based upon a report from a Traffic Consultant, that the costs of collection would exceed the amount of tolls and other fees expected to be collected; and provided further that nothing contained in this Section 6.03 shall prevent the Commission from temporarily reducing or eliminating tolls and other fees in connection with programs which it intends to use to increase Net Revenue. (e) If a TIFIA Loan is outstanding, and the commission fails for 18 months to meet the required Coverage Ratios, the Commission shall immediately be required to apply amounts in the Holding Fund to prepay pro rata such Outstanding TIFIA Loan amounts in amounts equal to the lesser of (i) the amount necessary to regain compliance with the required Coverage Ratios and (ii) the amount on deposit in the Holding Fund. Prepayments shall continue pursuant to this subsection (e) until compliance with the required Coverage Ratios is regained. Any failure to meet the Coverage Ratios will not by itself constitute an Event of Default. If the prepayment is applied in inverse order of maturity, the impact of this provision shall be muted. Section 6.04 Annual Budget; Financial Plan. The Commission covenants that, for each Fiscal Year, it will take such actions as may be required of it to prepare and will adopt an annual budget in accordance with applicable law, including the Act, and the Toll Agreements. The Commission further covenants that it will provide to the Trustee (A) no later than 30 days prior to the commencement of each Fiscal Year, an operating plan and a preliminary budget, and (B) not later than the first day of each Fiscal Year, a copy of the Commission’s final budget (such copy of the final budget being referred to herein as the “Annual Operating Budget”). The Commission further covenants that it will provide to the Trustee a copy of the Commission’s Financial Plans concurrently with their submission to the TIFIA Lender. The Trustee shall have no responsibility to review such preliminary budget, Annual Operating Budget or Financial Plan and shall only retain such documents as a repository for the holders of the Obligations. Section 6.05 Operation and Maintenance of the Toll Road. The Commission covenants and agrees that it has taken, and, so long as any Obligations are Outstanding, that it will take, all steps necessary to ensure that it will continue to have lawful right and lawful power to operate and maintain the Toll Road as a revenue-producing facility and that it will impose and collect tolls on the Toll Road consistent with its obligations under the Act and the Toll Agreements. The Commission covenants and agrees to at all times operate the Toll Road in accordance with the requirements of the Act and the Toll Agreements. The Commission further covenants and agrees that it will pay all Operation and Maintenance Expenses and keep the Toll Road in good repair in accordance with customary business practices and the Maintenance Standards (as defined in the Toll Facility Agreement). The Commission further covenants that, should any Obligations remain Outstanding following the expiration of the Commission’s authorization to impose tolls on the Toll Road, and should the Commission project that, within five calendar years such authorization will expire with Obligations remaining Outstanding, the 247 79 OHSUSA:765989901.12 Commission will petition the Legislature of the State to extend its authorization to impose such tolls. Section 6.06 Retention of Assets. Subject to the provisions of the Act and the Toll Agreements, the Commission covenants not to sell, lease or otherwise dispose of assets necessary to operate the Toll Road in the manner and at the levels of activity required to enable it to perform its covenants contained herein, including, without limitation, the covenants contained in Section 6.03 and Section 6.05. Section 6.07 Insurance. The Commission covenants to carry at all times insurance (including reasonable self-insurance) or cause insurance to be carried (including by the Design-Build Contractor, its subcontractors and the Toll Operator) with responsible insurance and/or reinsurance companies authorized and qualified to do business in (or with companies duly authorized and qualified to do business in) the State and to assume the risks thereof consistent with insurance requirements of all agreements entered into by the Commission in connection with the design, construction, operation and maintenance of each Project until the Substantial Completion Date therefor, and after the Substantial Completion of the I-15 Express Lanes Project, of the Toll Road. Nothing contained herein shall be deemed or construed to prevent the Commission from maintaining policies of insurance with respect to the Toll Road in which parties other than the Commission are named as dual obligee beneficiaries, provided that such other parties shall be limited to Caltrans, the Trustee, the TIFIA Lender, contractors constructing Special Projects and persons supplying toll collection and revenue management system equipment or facilities. Upon request of the Trustee, the Commission shall provide the Trustee with an officer’s certificate stating that it is in compliance with this Section 6.07. Section 6.08 Payment of Claims. The Commission will pay and discharge any and all lawful claims that, if unpaid, might become a charge or lien upon the Trust Estate or any part thereof, prior to or on a parity with the charge and lien upon the Revenue securing the Obligations Outstanding hereunder. Section 6.09 Receipt and Deposit of Cash Advances. The Commission covenants and agrees that, immediately upon receipt of cash advances representing deposits against future toll payments from users or potential users of the Toll Road by or on behalf of the Commission, it will (i) deposit and hold, or cause to be deposited and held, such moneys in a special account, separate from other assets of the Commission, and cause such moneys to be deposited with and held by a bank or trust company (which may be the Trustee), (ii) invest such moneys only in Permitted Investments of the type described in clauses (i), (ii), (iii), (iv), (v), (vi), (ix), (xii), (xvii) or (xviii) of the definition thereof, maturing within thirty (30) days from the date of the investment, and (iii) promptly, and in any event within seven Business Days after such deposits become tolls, transfer or cause the transfer of moneys from such account for credit to the Toll Revenue Fund. The Commission further covenants and agrees that it will not enter into any agreement pursuant to which cash advances received by any other person, business organization or governmental entity may be applied to the payment of tolls unless such person, business organization or governmental entity, as the case may be, has agreed to take such actions 248 80 OHSUSA:765989901.12 as the Commission may determine are reasonably necessary to assure that the Commission will receive timely payment of such tolls. Section 6.10 Toll Agreements. The Commission hereby covenants and agrees that it has all lawful right and power to enter into the Toll Agreements and that it shall perform all of its material obligations and exercise all of the powers granted to it thereunder (including but not limited to the Commission’s powers to enforce performance by the counterparty to each such Toll Agreement of such counterparty’s obligations thereunder) as the Commission may, in its reasonable judgment, determine are necessary to complete or cause the Substantial Completion and final completion of the portions of the I-15 Express Lanes Project comprising the Toll Road in accordance with the CIP Plan, to allow the Toll Road to be opened to vehicular traffic, and to commence and continue collection of tolls established pursuant to Section 6.03 of this Indenture. The Commission hereby covenants and agrees to employ the design-build method of procurement in connection with the construction of the initial phase of the I-15 Express Lanes Project, in accordance with the CIP Plan. Section 6.11 Construction and Maintenance From Other Sources Permitted. Notwithstanding any provision to the contrary in this Indenture, the Commission may, in accordance with the Act and other applicable laws, construct, reconstruct, rehabilitate, improve, acquire, lease, operate, or maintain, or any combination of these, both tolled and nontolled facilities, structures, onramps, connector roads, bridges, and roadways that are on, necessary for, or related to the construction or operation of the Toll Road using any funds legally available therefore, including, without limitation and as applicable, Sales Tax Revenues, proceeds of Sales Tax Revenue Bonds and federal, State and local grants, loans and matching funds. Notwithstanding any other provision of this Indenture, the United States of America, the State or any of their respective agencies, departments or political subdivisions may construct, reconstruct, rehabilitate, improve, acquire, lease, operate, maintain, or any combination of these, both tolled and nontolled facilities, structures, onramps, connector roads, bridges, and roadways related to or competing with the I-15 Express Lanes Project or to pay for all or any part of the cost thereof. The Commission has no power or authority to grant, permit, prohibit, prevent or interfere with any such actions. Section 6.12 Tax Covenants. (a) The Commission shall not use or permit the use of any proceeds of the Obligations or any funds of the Commission, directly or indirectly, to acquire any securities or obligations that would cause the interest on Obligations intended by the Commission to be exempt from federal income taxation to become subject to federal income taxation, and shall not take or permit to be taken any other action or actions that would cause any such Obligations to be an “arbitrage bond” within the meaning of Section 148 of the Code or “federally guaranteed” within the meaning of Section 149(b) of the Code and any such applicable regulations promulgated from time to time thereunder. The Commission shall observe and not violate the requirements of Section 148 of the Code and any such applicable regulations. The Commission shall comply with all requirements of Sections 148 and 149(b) of the Code to the extent applicable to Obligations. In the event that at any time the Commission is of the opinion that for purposes of this Section 6.03(a) it is necessary to restrict or to limit the yield on the investment of any moneys held by the Trustee under this Indenture, the Commission shall so instruct the 249 81 OHSUSA:765989901.12 Trustee under this Indenture in writing, and the Trustee shall take such action as may be reasonably necessary in accordance with such instructions. (b) The Commission covenants to comply with the provisions and procedures of each Tax Certificate. (c) The Commission shall not, and shall not cause the Trustee to, use or permit the use of any proceeds of the Obligations or any funds of the Commission (so long as such proceeds or other funds are under its control), directly or indirectly, in any manner, and shall not take or omit to take any action that would cause any of the Obligations to be treated as an obligation not described in Section 103(a) of the Code if such Obligations were, when originally issued, intended by the Commission to be obligations described in Section 103(a) of the Code. (d) Notwithstanding any provisions of this Section 6.12 or any Tax Certificate, if the Commission shall provide to the Trustee an Opinion of Bond Counsel to the effect that any specified action required under this Section 6.12 is no longer required or that some further or different action is required to maintain the exclusion from gross income for federal income tax purposes of interest on any Obligations, the Trustee and the Commission may conclusively rely on such opinion in complying with the requirements of this Section, and, notwithstanding any other provision of this Indenture or any Tax Certificate, the covenants hereunder shall be deemed to be modified to that extent. (e) The Trustee shall follow the directions of the Commission given pursuant to the Tax Certificate, and shall have no liability or responsibility to enforce compliance by the Commission with the terms of the Tax Certificate. Section 6.13 Accounting Records; Financial Statements and Other Reports. (a) The Commission shall keep appropriate accounting records in accordance with generally accepted accounting principles. Such accounting records shall at all times during business hours be subject to the inspection of the Trustee or of any Holder (or its representative authorized in writing). (b) The Commission shall prepare and file with the Trustee annually within 210 days after the close of each Fiscal Year financial statements of the Commission for such Fiscal Year, together with an audit report thereon prepared by an Independent Certified Public Accountant. The Trustee shall have no duty to review, verify or analyze such audit report and financial statements and shall hold such audit report and financial statements solely as a repository for the benefit of the holders of the Obligations. The Trustee shall not be deemed to have notice of any information contained therein or default or Event of Default which may be disclosed therein in any manner. Section 6.14 Protection of Trust Estate and Rights of Holders. The Commission shall preserve and protect the Trust Estate and the security of the Obligations issued hereunder and the rights of the holders of such Obligations and will warrant and defend their rights against all claims and demands of all persons. From and after the sale and delivery of any 250 82 OHSUSA:765989901.12 Senior Lien Obligations, Second Lien Obligations or Subordinate Obligations by the Commission, such Obligations shall be incontestable by the Commission. Section 6.15 Payment of Governmental Charges and Compliance with Governmental Regulations. The Commission shall pay and discharge all taxes or payments in lieu of taxes, assessments and other governmental charges or liens that may be levied, assessed or charged upon the Revenue, or any part thereof, promptly as and when the same shall become due and payable, except that the Commission shall not be required to pay any such governmental charges so long as the application or validity thereof shall be contested in good faith and the Commission shall have set aside reserves to cover such payments. Section 6.16 Maintenance of Powers. The Commission covenants that it will at all times use its best efforts to maintain the powers, rights, functions, duties and obligations now reposed on it pursuant to the Act and all other laws and the Toll Facility Agreement and will not at any time voluntarily do, suffer or permit any act or thing the effect of which would be to hinder, delay or imperil either the payment of the indebtedness evidenced by any of the Obligations hereunder or Credit Support Instruments relating thereto or the performance or observance of any of the covenants herein contained. Section 6.17 Covenants Binding on Commission and Successors. All covenants, stipulations, obligations and agreements of the Commission contained in this Indenture shall be deemed to be covenants, stipulations, obligations and agreements of the Commission to the full extent authorized or permitted by law. If the powers or duties of the Commission shall hereafter be transferred by amendment of the Act or a new act or any provision of the Constitution or any other law of the State or in any other manner there shall be a successor to the Commission, and if such transfer shall relate to any matter or thing permitted or required to be done under this Indenture by the Commission then the entity that shall succeed to such powers or duties of the Commission shall act and be obligated in the place and stead of the Commission as in this Indenture provided, and all such covenants, stipulations, obligations and agreements shall be binding upon the successor or successors thereof from time to time and upon any officer, board, body or commission to whom or to which any power or duty affecting such covenants, stipulations, obligations and agreement shall be transferred by or in accordance with law. Section 6.18 Continuing Disclosure. Upon the issuance of any Series of Obligations, or upon conversion of any Series of Obligations to an interest rate period, requiring an undertaking regarding continuing disclosure under Rule 15c2-12, the Commission hereby covenants and agrees that it will execute and deliver a Continuing Disclosure Agreement with respect to such Series of Obligations and comply with and carry out all of the provisions of such Continuing Disclosure Agreement applicable to it. Notwithstanding any other provision of this Indenture, failure of the Commission to comply with the provisions of any Continuing Disclosure Agreement shall not constitute an Event of Default under this Indenture; provided, however, that the Trustee, at the request of any Participating Underwriter or the Owner of an Outstanding Obligation, shall (but only to the extent that the Trustee is indemnified to its satisfaction from any liability or expense, including fees and expenses of its attorneys) or any Owner or Beneficial Owner of an Obligation may, take such actions as may be necessary and 251 83 OHSUSA:765989901.12 appropriate, including seeking mandate or specific performance by court order to cause the Commission to comply with its obligations under this Section. Section 6.19 Further Assurances. The Commission 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 Holders of the rights and benefits provided herein. ARTICLE VII DEFAULT PROVISIONS AND REMEDIES Section 7.01 Events of Default. Any one of the following and any other event specified in a Supplemental Indenture as an Event of Default shall constitute an Event of Default hereunder: (a) default in the payment of any interest on any Highest Priority Obligation when and as the same shall have become due and payable; (b) default in the payment of the principal of or premium, if any, on any Highest Priority Obligation when and as the same shall become due and payable, whether at the stated maturity or redemption date thereof or otherwise; (c) default by the Commission in the observance or performance of any other covenant or agreement of the Commission contained in this Indenture and the continuance thereof for a period of sixty (60) days after written notice thereof to the Commission given by the Trustee; (d) if the Commission files a petition in voluntary bankruptcy for the composition of its affairs or for its corporate reorganization under any state or federal bankruptcy or insolvency law, or makes an assignment for the benefit of creditors, or admits in writing to its insolvency or inability to pay debts as they mature, or consents in writing to the appointment of a trustee or receiver for itself; (e) if a court of competent jurisdiction shall enter an order, judgment or decree declaring the Commission insolvent, or adjudging it bankrupt, or appointing a trustee or receiver of the Commission, or approving a petition filed against the Commission seeking reorganization of the Commission under any applicable law or statute of the United States of America or any state thereof, and such order, judgment or decree shall not be vacated or set aside or stayed within sixty (60) days from the date of the entry thereof; or (f) 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 Commission or of the Revenue, and such custody or control shall not be terminated within sixty (60) days from the date of assumption of such custody or control. The Commission shall notify the Trustee of the occurrence of a Bankruptcy Related 252 84 OHSUSA:765989901.12 Event or an Event of Default within five (5) Business Days after the Commission learns of the occurrence. If the Trustee has actual knowledge, or is notified by the Commission or a Bondholder, of the occurrence of an Event of Default or a Bankruptcy Related Event hereunder, the Trustee shall provide prompt written notice of the occurrence of such Event of Default or Bankruptcy Related Event to the Commission and all Bondholders. Section 7.02 Application of Revenue and Other Funds After Default. If an Event of Default shall occur and be continuing, the Trust Estate shall be under the control of and applied by the Trustee as follows and in the following order: (a) first, to the payment of all fees, costs and other expenses (including the reasonable fees, costs and expenses of counsel and actual fees, costs and expenses due and payable by the Commission pursuant to the indemnity required by Section 7.06(c)) owed to the Trustee, and then to the pro rata payment of all costs and other expenses (including the reasonable fees, costs and expenses of counsel) owed to the trustee or Holder of any Obligations in connection with the performance of their obligations under the Financing Documents, including to the TIFIA Lender under the applicable TIFIA Loan Agreement, to which they are a party and the consummation of the transactions contemplated thereby (in each case to the extent not previously satisfied); (b) second, to the payment of Operation and Maintenance Expenses; (c) third, to the pro rata payment of all accrued and unpaid interest (but not default interest, if any) on all Senior Lien Obligations then Outstanding, in each case in the order of maturity of the payments thereof; (d) fourth, to the pro rata payment of all unpaid principal amounts of any Senior Lien Obligations then due; (e) fifth, to the pro rata payment of all accrued and unpaid default interest then due, if any, with respect to any Senior Lien Obligations, and scheduled payments due under any related Hedging Obligations, if any, net of any scheduled amounts payable to the Commission with respect to scheduled Hedging Obligations under Qualified Swap Agreements; (f) sixth, to the pro rata payment of all accrued and unpaid redemption or prepayment premium then due, if any, with respect to any Senior Lien Obligations; (g) seventh, to the pro rata payment of all other amounts, if any, due and payable under any Financing Document with respect to any Senior Lien Obligations; (h) eighth, to the pro rata payment of all accrued and unpaid interest (but not default interest, if any) on all Second Lien Obligations; (i) ninth, if any unpaid principal of any Second Lien Obligations has become due, to the pro rata payment of such unpaid principal amounts; (j) tenth, to the pro rata payment of all accrued and unpaid default interest then due, if any, with respect to any Second Lien Obligations and scheduled payments due under 253 85 OHSUSA:765989901.12 any related Hedging Obligations, if any, net of any scheduled amounts payable to the Commission with respect to scheduled Hedging Obligations under Swaps; (k) eleventh, to the pro rata payment of all accrued and unpaid redemption or prepayment premium then due, if any, with respect to any Second Lien Obligations; (l) twelfth, to the pro rata payment of all other amounts, if any, due and payable under any Financing Document with respect to any Second Lien Obligations; (m) thirteenth, to the pro rata payment of all accrued and unpaid interest (but not default interest, if any) on all Subordinate Obligations; (n) fourteenth, if any unpaid principal of any Subordinate Obligations has become due, to the pro rata payment of such unpaid principal amounts; (o) fifteenth, to the pro rata payment of all accrued and unpaid default interest then due, if any, with respect to any Subordinate Obligations and scheduled payments due under any related Hedging Obligations, if any, net of any scheduled amounts payable to the Commission with respect to scheduled Hedging Obligations under Swaps; (p) sixteenth, to the pro rata payment of all accrued and unpaid redemption or prepayment premium then due, if any, with respect to any Subordinate Obligations; (q) seventeenth, to the pro rata payment of all other amounts, if any, due and payable under any Financing Document with respect to any Subordinate Obligations; (r) eighteenth, to the payment of any Hedging Termination Obligations with respect to Qualified Swap Agreements or Swaps; and (s) nineteenth, upon the payment in full of all Secured Obligations in accordance with clauses first through eighteenth hereof, to pay to the Commission, or as may be directed by the Commission, or as a court of competent jurisdiction may direct, any Revenue or other funds then remaining in the Trust Estate. Section 7.03 No Acceleration. There shall be no right of acceleration with respect to the Obligations. Section 7.04 Suits at Law or in Equity and Mandamus. In case one or more Events of Default shall occur, then and in every such case the Trustee may, and shall at the request of the Holders of not less than a majority of the Bond Obligation of the Highest Priority Obligations then Outstanding (or such greater percentage of the Holders of Highest Priority Obligations as may be specified in the Supplemental Indenture) upon receiving indemnity reasonably satisfactory to it, potentially including indemnity provided by such Holders (subject to Section 7.06(c)), proceed to protect and enforce Bondholder rights by such appropriate judicial proceeding as shall be deemed most effectual to protect and enforce any such right, either by suit in equity or by action at law, whether for the specific performance of any covenant or agreement contained in this Indenture, or in aid of the exercise of any power granted in this Indenture, or to enforce any other legal or equitable right vested in the holders of Obligations by 254 86 OHSUSA:765989901.12 this Indenture or such Obligations or by law. The provisions of this Indenture shall constitute a contract with each and every Bondholder and the duties of the Commission shall be enforceable by the Trustee on behalf of any Bondholder by mandamus or other appropriate suit, action or proceeding in any court of competent jurisdiction. Nothing herein shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Bondholder any plan of reorganization, arrangement, adjustment, or composition affecting the Obligations or the rights of any Holder thereof, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding without the approval of the Holders so affected. Section 7.05 Waivers. No delay or omission to exercise any right or power accruing upon any Event of Default shall impair any such right or power or shall be construed to be a waiver of any such Event of Default or acquiescence therein and every such right and power may be exercised from time to time and as often as may be deemed expedient. No waiver of any Event of Default hereunder shall extend to or shall affect any subsequent Event of Default or shall impair any rights or remedies consequent thereon. Section 7.06 Rights of Subordinate Lenders. (a) Nothing in this Article VII or elsewhere in this Indenture shall be construed to limit or preclude the exercise of any rights or remedies reserved by the trustee for the Second Lien Obligations or by the trustee for or Holder of any Subordinate Obligations; (b) Upon the occurrence of a Bankruptcy Related Event, if the TIFIA Loan is then outstanding the TIFIA Lender may request, and the Trustee shall, upon receiving indemnity reasonably satisfactory to it from the Commission, proceed to protect and enforce the TIFIA Lender’s rights by such appropriate judicial proceeding as shall be deemed most effectual to protect and enforce any such right, either by suit in equity or by action at law, whether for the specific performance of any covenant or agreement contained in this Indenture, or in aid of the exercise of any power granted in this Indenture, or to enforce any other legal or equitable right vested in the TIFIA Lender as a third-party beneficiary by this Indenture or by law. The provisions of this Indenture shall constitute a contract with the TIFIA Lender and the duties of the Commission shall be enforceable by the Trustee on behalf of the TIFIA Lender by mandamus or other appropriate suit, action or proceeding in any court of competent jurisdiction. Nothing herein shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of the TIFIA Lender any plan of reorganization, arrangement, adjustment, or composition affecting the TIFIA Loan or the rights of the TIFIA Lender, or to authorize the Trustee to vote in respect of the claim of the TIFIA Lender in any such proceeding without the approval of the TIFIA Lender. (c) The Commission agrees to provide adequate indemnity to the Trustee on behalf of the TIFIA Lender in accordance with this Section 7.06; provided that such indemnity shall be provided from Revenues in accordance with the provisions of this Indenture; and provided, further, that in no event shall such indemnity exceed the amount of indemnity that the Commission is required to provide the TIFIA Lender pursuant to the applicable TIFIA Loan Agreement; and provided, further, that in no event shall the Trustee be required to continue to protect and enforce the TIFIA Lender’s rights if it does not receive adequate indemnity to proceed. 255 87 OHSUSA:765989901.12 ARTICLE VIII THE TRUSTEE Section 8.01 Trustee. (a) U.S. BANK NATIONAL ASSOCIATION, will serve as the Trustee under this Indenture. The Trustee shall be required to perform such duties and only such duties as are specifically set forth in this Indenture. The Trustee shall, during the existence of any Event of Default (that has not been cured), exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in their exercise, as reasonable persons would exercise or use under the circumstances in the conduct of their own affairs. The Trustee accepts the duties imposed upon it hereunder and agrees, particularly: (i) to hold all sums held by it for the payment of the principal and Purchase Price of, premium, if any, or interest on the Obligations in trust for the benefit of the Holders of the Obligations as provided herein until such sums shall be paid to such Holders of such Obligations or otherwise disposed of as herein provided; (ii) to authenticate and cancel Obligations as provided herein; (iii) to perform its obligations under this Indenture; and (iv) to keep such books and records relating to its duties as Trustee as shall be consistent with reasonable industry practice and to make such books and records available for inspection by the Commission at all reasonable times upon reasonable notice. The Commission shall cause the necessary arrangements to be made and to be thereafter continued whereby: (i) funds derived from the sources specified in this Indenture will be made available at the Principal Office of the Trustee for the timely payment of principal and Purchase Price of, premium, if any, and interest on the Obligations; (ii) Obligations shall be made available for authentication, exchange and registration of transfer by the Trustee at the Principal Office of the Trustee; and (iii) the Trustee shall be furnished such records and other information, at such times, as shall be required to enable the Trustee to perform the duties and obligations imposed upon it hereunder. (b) No provision of this Indenture shall be construed to relieve the Trustee from liability for its own negligent action or its own negligent failure to act, except that, at all times regardless of whether or not any Event of Default shall exist: (i) the duties and obligations of the Trustee shall be determined solely by the express provisions of this Indenture, and the Trustee shall not be liable except for the performance of such duties and obligations as are specifically set forth in this Indenture, and no implied covenants or obligations shall be read into this Indenture against the Trustee; (ii) in the absence of bad faith on the part of the Trustee, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon any certificate, notice, order, requisition, request, consent or opinion furnished to the Trustee conforming to the requirements of this Indenture; but in the case of any such certificate, notice, order, requisition, request, consent or opinion which by any provision hereof is specifically required to be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not it, on its face, conforms to the requirements of this Indenture; (iii) the Trustee shall not be liable for any error of judgment made in good faith unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts; and (iv) the Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Holders of not less than a majority, or such larger or smaller percentage as may be required hereunder, in Bond Obligation 256 88 OHSUSA:765989901.12 of the Highest Priority Obligations at the time Outstanding relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred upon the Trustee under this Indenture. The permissive right of the Trustee to do things enumerated in this Indenture as a right shall not be construed as a duty and the Trustee shall not be answerable for other than its negligence or willful misconduct. (c) None of the provisions contained in this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur individual financial liability in the performance of any of its duties or in the exercise of any of its rights or powers. The Trustee shall not be required to give any bond or surety in respect of the execution of the said trusts and powers or otherwise in respect of the premises. Before taking any action under this Indenture relating to an Event of Default or taking any other action (other than making payments of principal and interest in accordance with the provisions of this Indenture) hereunder, the Trustee may require that indemnity reasonably satisfactory to it be furnished for the reimbursement of all expenses to which it may be put and to protect it against all liability. (d) No delivery of Obligations to the Trustee or purchase of Obligations by the Trustee shall constitute a redemption of Obligations or any extinguishment of the debt represented thereby, unless such Obligations are surrendered by the Commission to the Trustee for cancellation pursuant to this Indenture. (e) The Trustee shall not be accountable for the use or application by the Commission of the proceeds of the Obligations or for the use or application of any money paid over to the Commission by the Trustee in accordance with the provisions of this Indenture. The Trustee shall have no responsibility or liability with respect to any information, statements or recitals in any offering memorandum or other disclosure material prepared or distributed with respect to the issuance of the Obligations other than information provided by the Trustee for use therein, if any. (f) Whenever in the administration of this Indenture the Trustee shall deem it necessary or desirable that a matter be provided or established prior to taking or suffering any action to be taken hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may, in the absence of negligence or willful misconduct on the part of the Trustee, be deemed to be conclusively proved and established by a Certificate of the Commission and delivered to the Trustee and such certificate, in the absence of negligence or willful misconduct on the part of the Trustee, shall be full warrant to the Trustee for any action taken, suffered or omitted by it under the provisions of this Indenture upon the faith thereof. (g) The Trustee may elect to accept and act upon instructions or directions pursuant to this Indenture sent by facsimile or Electronic means, provided, however, that, the Trustee shall have received an incumbency certificate listing persons designated to give such instructions or directions and containing specimen signatures of such designated persons, which such incumbency certificate shall be amended and replaced whenever a person is to be added or deleted from the listing. If the Commission elects to give the Trustee facsimile or Electronic instructions and the Trustee in its discretion elects to act upon such instructions, the Trustee’s understanding of such instructions shall be deemed controlling in the absence of its negligence or willful misconduct. The Trustee shall not be liable for any losses, costs or expenses arising 257 89 OHSUSA:765989901.12 directly or indirectly from the Trustee’s reliance upon and compliance with such instructions notwithstanding such instructions conflict or are inconsistent with a subsequent written instruction. In the absence of negligence or willful misconduct by the Trustee, the Commission agrees to assume all risks arising out of the use of such facsimile or Electronic methods to submit instructions and directions to the Trustee, including without limitation the risk of the Trustee acting on unauthorized instructions, and the risk of interception and misuse by third parties. Section 8.02 Compensation and Indemnification of Trustee. The Commission shall: (i) pay the Trustee reasonable compensation (which, to the extent permitted by applicable law, shall not be limited by any law limiting the compensation of the trustee of an express trust); (ii) pay or reimburse the Trustee upon request for all reasonable fees, expenses, disbursements and advances incurred or made in accordance with any of the provisions of this Indenture (including the reasonable compensation and the expenses and disbursements of its counsel and of all agents and other persons not regularly in its employ), except to the extent that any such expense, disbursement or advance is due to its own negligence or willful misconduct; and (iii) to the extent permitted by applicable law, indemnify the Trustee and its officers, directors, agents and employees for, and to hold it harmless against, any loss, liability, cost, suit, claim, judgment, damage or expense incurred by it, arising out of or in connection with the acceptance or administration of this Indenture or the performance of its duties hereunder, including legal fees and expenses and the costs and expenses of defending itself against or investigating any claim of liability or expense, except to the extent that any such liability or expense was due to its own negligence or willful misconduct. The obligations of the Commission under this Section 8.02 shall survive the satisfaction and discharge of this Indenture and the earlier removal or resignation of the Trustee. When the Trustee incurs expenses or renders services after the occurrence of an Event of Default, such expenses and the compensation for such services are intended to constitute expenses of administration under any federal or state bankruptcy, insolvency, arrangement, moratorium, reorganization or other debtor relief law. Section 8.03 Qualifications of Trustee; Resignation; Removal. (a) There shall at all times be a trustee hereunder that is a commercial bank, trust company or national association organized and doing business under the laws of the United States or of a state thereof, authorized under such laws to exercise corporate trust powers, having (or if such bank, trust company or national association is a member of a bank holding company system, its holding company has) a combined capital and surplus of at least five hundred million dollars ($500,000,000), and subject to supervision or examination by federal or state authority. If such banks, trust companies, or banking associations publish reports of condition at least annually, pursuant to law or to the requirements of any supervising or examining authority above referred to, then, for the purposes of this Section 8.03, the combined capital and surplus of such banks, trust companies or banking associations shall be deemed to be their combined capital and surplus as set forth in their most recent reports of conditions so published. (b) The Trustee may at any time resign by giving at least thirty (30) days’ written notice to the Commission. Upon receiving such notice of resignation, the Commission, shall promptly appoint a successor trustee by an instrument in writing. If no successor trustee shall have been so appointed and have accepted appointment within thirty (30) days after the giving of such notice of resignation, the resigning trustee may petition any court of competent 258 90 OHSUSA:765989901.12 jurisdiction for the appointment of a successor trustee, or any Holder who has been a bona fide Holder of a Highest Priority Obligation for at least six months may, on behalf of itself and any others similarly situated, petition any such court for the appointment of a successor trustee. Such court may thereupon, after such notice, if any, as it may deem proper and prescribe, appoint a successor trustee. (c) In case at any time either of the following shall occur: (i) the Trustee shall cease to be eligible in accordance with the provisions of this Section 8.03 and shall fail to resign after written request therefor by the Commission or by any Holder who has been a bona fide Holder of a Highest Priority Obligation for at least six months; or (ii) the Trustee shall become incapable of acting, or shall be adjudged a bankrupt or insolvent, or a receiver of the Trustee or of its property shall be appointed, or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, then, in any such case, the Commission may remove the Trustee and appoint a successor trustee by an instrument in writing executed by an Authorized Representative, or any Holder who has been a bona fide Holder of a Highest Priority Obligation for at least six months may, on behalf of itself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor trustee. Such court may thereupon, after such notice, if any, as it may deem proper and prescribe, remove the Trustee and appoint a successor trustee. If no successor trustee shall have been so appointed by the Commission and have accepted appointment within thirty (30) days after such removal, the Trustee may petition any court of competent jurisdiction for the appointment of a successor trustee, or any Holder who has been a bona fide Holder of a Highest Priority Obligation for at least six months may, on behalf of itself and any others similarly situated, petition any such court for the appointment of a successor trustee. (d) The Commission or Holders of a majority in Bond Obligation of the Highest Priority Obligation at the time Outstanding may at any time remove the Trustee and appoint a successor trustee by an instrument or concurrent instruments in writing signed by an Authorized Representative of the Commission or by such Holders, as the case may be. (e) Any resignation or removal of the Trustee and appointment of a successor trustee pursuant to any of the provisions of this Section 8.03 shall become effective upon written acceptance of appointment by the successor trustee acceptable to the Commission. Any successor trustee shall execute, acknowledge and deliver to the Commission and to its predecessor trustee an instrument accepting such appointment hereunder, and thereupon the resignation or removal of the predecessor trustee shall become effective and such successor trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts, duties and obligations of its predecessor in the trusts hereunder, with like effect as if originally named as Trustee herein; but, nevertheless, on the Written Request of the Commission or the request of the successor trustee, the predecessor trustee ceasing to act shall execute and deliver an instrument transferring to such successor trustee, upon the trusts herein expressed, all the rights, powers and trusts of the trustee so ceasing to act. Upon request of any such successor trustee, the Commission shall execute any and all instruments in writing necessary or desirable for more fully and certainly vesting in and confirming to such successor trustee all such rights, powers and duties. No successor trustee shall accept appointment as provided in this Section 8.03 unless at the time of such acceptance such successor trustee shall be 259 91 OHSUSA:765989901.12 eligible under the provisions of this Section 8.03. Upon acceptance of appointment by a successor trustee as provided in this Section 8.03, the Commission or such successor trustee shall give Holders notice of the succession of such trustee to the trusts hereunder. (f) Any company into which the Trustee may be merged or converted or with which it may be consolidated or any company resulting from any merger, conversion or consolidation to which it shall be a party or any company to which the Trustee may sell or transfer all or substantially all of its corporate trust business, provided such company shall be eligible under this Section 8.03 and acceptable to the Commission, shall be the successor to such Trustee without the execution or filing of any paper or any further act, anything herein to the contrary notwithstanding. (g) In the event of the resignation or removal of the Trustee, the Trustee shall deliver any money and any Obligations and its related books and records held by it in such capacity to its successor. (h) The Trustee may execute any of the trusts or powers hereof and perform any of its duties and responsibilities hereunder by or through attorneys, agents or receivers, including issuing and paying agents as provided in Section 8.05, and the Trustee shall not be answerable for the conduct of the same if appointed with due care hereunder, provided that the Trustee shall remain responsible for its duties hereunder. The Trustee may consult with counsel and the advice or any opinion of counsel shall be full and complete authorization and protection in respect of any action taken or omitted by it hereunder in the absence of negligence and willful misconduct and in accordance with such advice or opinion of counsel. Section 8.04 Instrument of Bondholders. Any instrument required by this Indenture to be executed by Bondholders may be in any number of writings of similar tenor and may be executed by Bondholders in person or by agent appointed in writing. Proof of the execution of any such instrument or of the writing appointing any such agent and of the ownership of Obligations given in any of the following forms shall be sufficient for any of the purposes of this Indenture: (i) a certificate of any officer in any jurisdiction who by law has power to take acknowledgements within such jurisdiction that the person signing such writing acknowledged before him the execution thereof; or (ii) a certificate executed by any trust company or bank stating that at the date thereof the party named therein did exhibit to an officer of such trust company or bank, as the property of such party, the Obligations therein mentioned. The Trustee may rely on such an instrument of Bondholders unless and until the Trustee receives notice in the form specified in (i) or (ii) above that the original such instrument is no longer reliable. In the event that the Trustee shall receive conflicting directions from two or more groups of Bondholders, each with combined holdings of not less than twenty-five percent (25%) of the principal amount of Outstanding Highest Priority Obligations, the directions given by the group of Bondholders that holds the largest percentage of Highest Priority Obligations shall be controlling and the Trustee shall follow such directions to the extent required herein. The Trustee shall have no liability provided it is following the instructions of such Bondholders permitted to direct the Trustee pursuant to this Indenture. 260 92 OHSUSA:765989901.12 Section 8.05 Issuing and Paying Agents. The Commission may appoint and at all times have one or more issuing and paying agents in such place or places as the Commission may designate, for the payment of a Series of Obligations. Such issuing and paying agent shall meet the qualifications for the Trustee and the procedures and conditions for removal and resignation set forth in Section 8.03 hereof. It shall be the duty of the Trustee to make such arrangements with any such issuing and paying agent as may be necessary to assure, to the extent of the moneys held by the Trustee for such payment, the prompt payment of Obligations presented at either place of payment. ARTICLE IX AMENDMENTS Section 9.01 Amendments to Indenture Not Requiring Consent of Bondholders. Except to the extent restricted by a Supplemental Indenture, the Commission and the Trustee, without the consent of or notice to any Bondholders, may execute Supplemental Indentures amending this Indenture for one or more of the following purposes: (a) to grant to or confer upon the Trustee for the benefit of the Holders of any Series of Obligations or of all Obligations any additional rights, remedies, powers or authority that may lawfully be granted to or conferred upon the Trustee; (b) to grant or pledge to the Trustee for the benefit of the Holders of any Series of Obligations or of all Obligations any additional security; (c) to amend this Indenture in such manner as may be necessary or convenient in connection with the book-entry system for payments, transfers and other matters relating to the Obligations; (d) to cure any ambiguity, supply any omission, or to correct or supplement any provision of this Indenture that, in the Opinion of Bond Counsel, is defective or inconsistent with any other provision of this Indenture; (e) to insert such provisions clarifying matters or questions arising under this Indenture as are necessary or desirable and are not contrary to or inconsistent with this Indenture as theretofore in effect; (f) to make any change therein necessary, in the Opinion of Bond Counsel, to maintain the exclusion from gross income for federal income tax purposes of the interest on any Outstanding Obligations intended by the Commission to bear federally tax-exempt interest; (g) to modify, amend or supplement this Indenture or any Supplemental Indenture in such manner as to permit, if presented, the qualification hereof and thereof under the Trust Indenture Act of 1939 or any similar federal statute hereafter in effect or under any state blue sky law; (h) to make modifications or adjustments necessary in order to accommodate a Credit Support Instrument or a Reserve Facility; 261 93 OHSUSA:765989901.12 (i) to modify, alter, amend or supplement this Indenture if (1) all of the Obligations to be affected thereby are variable interest rate obligations, (2) the modification, alteration, amendment or supplement shall not become effective until written notice thereof shall have been given to Bondholders of the affected Series by the Trustee, and (3) thirty (30) days shall have passed during which time such Bondholders shall have had the opportunity to tender their variable interest rate bonds for purchase; (j) to modify, alter, amend or supplement this Indenture if (1) all of the Obligations to be affected thereby are Obligations in the form of or securing payment of a TIFIA Loan, and (2) the written consent of the TIFIA Lender has been obtained to such modification, alteration, amendment or supplement; (k) to make any change therein that does not materially and adversely affect the rights of any of the Holders of the Obligations (and the absence of a material or adverse effect is required to, be evidenced by a Certificate of the Commission or an Opinion of Bond Counsel delivered pursuant to Section 9.04); and (l) to issue additional Obligations hereunder in accordance with the terms hereof, including to specify and determine the lien status of a Series of Obligations or, if applicable, the springing lien status of a Series of Obligations and also any other matters and things relative to such Obligations which are not contrary to or inconsistent with this Indenture as theretofore in effect, or to amend, modify or rescind any such authorization, specification or determination at any time prior to the original issuance of such Obligations; provided, in addition to the limitation set forth in Section 9.04, that no such amendment may permit, or be construed as permitting, (i) an extension of the maturity of the principal of, or the mandatory redemption date of, or interest on, any Obligation, or (ii) a reduction in the principal amount of, or the redemption premium or the rate of interest on, any Obligation, or (iii) a preference or priority of any Senior Lien Obligations over any other Senior Lien Obligations, or (iv) a preference or priority of any Second Lien Obligation or Second Lien Obligations over any other Second Lien Obligation or Second Lien Obligations or Senior Lien Obligation, or (v) a preference or priority of any Subordinate Obligation or Subordinate Obligations over any other Subordinate Obligation or Subordinate Obligations, Second Lien Obligation or Senior Lien Obligation (except as otherwise provided herein with respect to Subordinate Obligations in the form of or securing the payment of a TIFIA Loan) or (vi) a reduction in the Bond Obligation of the Obligations required for any consent to any amendment pursuant to Section 9.02. Section 9.02 Amendments to Indenture Requiring Consent of Bondholders and TIFIA Lender. Exclusive of amendments authorized by Section 9.01 and subject to the terms and provisions contained in this Section 9.02 and in any Supplemental Indenture, and further subject at all times prior to repayment of each Subordinate Obligation in the form of or securing payment of a TIFIA Loan in full pursuant to its terms to receipt of written consent from the TIFIA Lender, the Holders of at least a majority in aggregate Bond Obligation of the Obligations Outstanding at the time such consent is given, and in case less than all of the several Series of Obligations then Outstanding are affected by the modification or amendment, of the Holders of at least a majority in aggregate Bond Obligation of the Obligations of each Series so affected and Outstanding at the time such consent is given (provided, however, that if such 262 94 OHSUSA:765989901.12 modification or amendment will, by its terms, not take effect so long as any Obligations of any particular Series and maturity remain Outstanding, the consent of the Holders of such Obligations shall not be required and such Obligations shall not be deemed to be Outstanding for the purpose of any calculation of Outstanding Obligations under this Section 9.02) shall have the right, from time to time, anything contained in this Indenture to the contrary notwithstanding, to consent to such other amendments hereto for the purpose of modifying, altering, amending, or supplementing any of the terms or provisions contained in this Indenture or in any Supplemental Indenture; provided, however, that nothing in this Section 9.02 shall permit, or be construed as permitting (i) an extension of the maturity of the principal of, or the mandatory redemption date of, or interest on, any Obligation, or (ii) a reduction in the principal amount of, or the redemption premium or the rate of interest on, any Obligation, or (iii) a preference or priority of any Senior Lien Obligations over any other Senior Lien Obligations, or (iv) a preference or priority of any Second Lien Obligation or Second Lien Obligations over any other Second Lien Obligation or Second Lien Obligations or Senior Lien Obligations, or (v) a preference or priority of any Subordinate Obligation over any other Subordinate Obligation (except as otherwise provided herein with respect to Subordinate Obligations in the form of or securing payment of a TIFIA Loan) or (vi) a reduction in the Bond Obligation of the Obligations required for any consent to any amendment. Section 9.03 Notice to and Consent of Bondholders. If consent of the Bondholders is required under the terms of this Indenture for the amendment of this Indenture or for any other similar purpose, the Commission shall cause notice of the proposed amendment to be given by first-class mail to the Holders of the Outstanding Obligations then shown on the registration books for the Obligations. Such notice shall briefly set forth the nature of the proposed amendment or other action and shall state that copies of any such amendment are on file at the office of the Commission and the Principal Office of the Trustee for inspection by all Bondholders. If, within sixty (60) days or such longer period as shall be prescribed by the Commission following the mailing of such notice, the Holders of the requisite principal amount of the Obligations Outstanding by instruments filed with the Commission shall have consented to the amendment or other proposed action, then the Commission may adopt or execute, as appropriate, such amendment or take such proposed action and the consent of the Bondholders shall thereby be conclusively presumed. Such instruments filed with the Commission may include documents, including Certificates of the Commission, stating that Holders of Obligations have consented to an amendment by purchasing such Obligations if the official statement or other disclosure document related to such purchase disclosed that the purchase of the Obligations was deemed to mean that the Holders consented to the amendment. Section 9.04 Execution and Effect of Supplemental Indentures. Prior to executing any Supplemental Indenture hereunder, the Trustee shall receive, and is entitled to rely upon, an Opinion of Bond Counsel to the effect that such Supplemental Indenture is authorized or permitted hereunder. The Trustee is not obligated to execute any Supplemental Indenture adversely affecting its rights, duties protections and immunities hereunder. The Trustee shall not execute any Supplemental Indenture materially affecting the priority of payment of any Second Lien Obligation or the rights and obligations of the holders of any Second Lien Obligation, as evidenced by the Opinion of Bond Counsel delivered pursuant to this Section 9.04, without the prior written consent of the trustee for or required holders of such Second Lien Obligation. The Trustee shall not execute any Supplemental Indenture materially affecting the priority of 263 95 OHSUSA:765989901.12 payment of any Subordinate Obligation or the rights or obligations of the holder of any Subordinate Obligation, as evidenced by the Opinion of Bond Counsel delivered pursuant to this Section 9.04, without the prior written consent of the trustee for or required holders of such Subordinate Obligation. Upon the execution and delivery of any Supplemental Indenture pursuant to this Article IX, this Indenture shall be deemed to be modified and amended in accordance therewith, and the respective rights, duties and obligations under this Indenture of the Commission, the Trustee and all Owners of Outstanding Obligations shall thereafter be determined, exercised and enforced subject in all respects to such modification and amendment, and all the terms and conditions of any such Supplemental Indenture shall be deemed to be part of the terms and conditions of this Indenture for any and all purposes. Section 9.05 Obligations Owned by Commission. (a) For purposes of this Article IX, Obligations owned or held by or for the account of the Commission shall not be deemed Outstanding for the purpose of consent or other action or any calculation of Outstanding Obligations provided for in this Article IX, and the Commission shall not be entitled with respect to such Obligations to give any consent or take any other action provided for in this Article IX; except that in determining whether the Trustee shall be protected in relying upon any such approval or consent of a Holder, only Obligations which the Trustee actually knows to be owned by the Commission shall be disregarded unless all Obligations are owned or held by or for the account of the Commission, in which case such Obligations shall be considered Outstanding for the purpose of such determination. Upon request of the Trustee, at the time of any consent or other action is to be taken under this Article IX, the Commission shall furnish the Trustee a Certificate of the Commission, upon which the Trustee may rely, describing all Senior Lien Obligations so to be excluded. (b) The purchase or other acquisition of Obligations by or on behalf of the Commission shall not cancel, extinguish, or otherwise affect the Obligations unless such Obligations are surrendered by the Commission to the Trustee for cancellation in accordance with Section 10.01(b). ARTICLE X DISCHARGE OF LIEN Section 10.01 Discharge of Lien and Security Interest. (a) At the election of the Commission, upon payment in full of all the Obligations and of all other amounts payable under this Indenture, the pledge and lien on the Trust Estate arising under this Indenture shall cease, determine and be void; provided, however, such discharge of this Indenture shall not terminate the powers and rights granted to the Trustee with respect to the payment, transfer and exchange of the Obligations, and Section 8.02 shall survive hereunder. In such event, upon the written request of the Commission, the Trustee shall cooperate with an accounting for such period or periods as shall be requested by the Commission to be prepared and filed with the Commission and shall execute and deliver to the Commission all such instruments as may be necessary or desirable to evidence such discharge as prepared by or on behalf of the Commission, and the Trustee shall pay over, transfer, assign or deliver to the Commission all moneys or securities or other property held by it pursuant to this Indenture which are not 264 96 OHSUSA:765989901.12 required for the payment or redemption of Obligations not theretofore surrendered for such payment or redemption. (b) The Commission may at any time surrender to the Trustee for cancellation any Obligations previously authenticated and delivered hereunder that the Commission at its option may have acquired in any manner whatsoever and such Obligations upon such surrender and cancellation shall be deemed to be paid and retired. (c) Notwithstanding any provision in this Indenture to the contrary, if the principal of or interest on any Obligations shall be paid by a Credit Provider, those Obligations shall remain Outstanding for all purposes, not be defeased or otherwise satisfied and not be considered paid by the Commission within the meaning of this Section 10.01, and the pledge of the Trust Estate and all covenants, agreements and other obligations of the Commission as herein provided shall continue to exist and shall run to the benefit of such Credit Provider, and such Credit Provider shall be subrogated to the rights of the Holders. Section 10.02 Provision for Payment of Obligations. Obligations (or any portion of the Obligations) shall be deemed to have been paid within the meaning of Section 10.01 if: (a) there shall have been irrevocably deposited with the Trustee or other fiduciary in trust either (i) lawful money of the United States of America in an amount that shall be sufficient, or (ii) Defeasance Securities, the principal and interest on which when due, together with the moneys, if any, deposited with the Trustee at the same time, shall be sufficient (as confirmed by a report of an Independent Certified Public Accountant or verification agent), to pay when due the principal amount of, redemption premium (if any) and all unpaid interest on such Obligations (or any portion thereof) to the maturity or the redemption date thereof, as the case may be; and (b) if any such Obligations are to be redeemed on any date prior to their maturity, (i) the Trustee shall have received (not less than 25 days prior to the proposed redemption date) in form satisfactory to it irrevocable written instructions from an Authorized Representative to redeem such Obligations on such date and (ii) notice of such redemption shall have been given or provision satisfactory to the Trustee shall have been irrevocably made for the giving of such notice. Limitations elsewhere specified herein regarding the investment of money held by the Trustee shall not be construed to prevent the depositing and holding of the Defeasance Securities described in Section 10.02(a)(ii) for the purpose of defeasing the lien of this Indenture as to Obligations that have not yet become due and payable. In addition, all money so deposited as provided in Section 10.02(a)(i) may also be invested and reinvested, at the written direction of an Authorized Representative, in Defeasance Securities, maturing in the amounts and times as hereinbefore set forth, subject to the confirming report of an Independent Certified Public Accountant or verification agent as to the sufficiency thereof as provided in Section 10.02(a)(ii), and all income from all Defeasance Securities in the hands of the Trustee or other fiduciary pursuant to this Section 10.02, that is not required for the payment of the principal of the Obligations and interest and redemption premium, if any, thereon with respect to which such 265 97 OHSUSA:765989901.12 money shall have been so deposited, shall be deposited in the Toll Revenue Fund as and when realized and applied as is other money deposited in the Toll Revenue Fund, or, in the event there are no longer any Obligations Outstanding under this Indenture, such income shall be automatically paid over to the Commission. Notwithstanding any other provision of this Indenture, no Obligation that is subject to optional or mandatory tender in accordance with the provisions of the Supplemental Indenture pursuant to which such Obligation was issued, shall be deemed to be paid within the meaning of this Indenture, unless arrangements shall have been made to assure that such Obligation, if tendered for purchase prior to the date of its redemption or maturity in accordance with the provisions of the applicable Supplemental Indenture, could be paid and redeemed from such moneys or Defeasance Securities as are provided pursuant to this Section 10.02. Section 10.03 Unclaimed Moneys. Anything contained herein to the contrary notwithstanding, any moneys held by the Trustee in trust for the payment and discharge of any of the Obligations that remain unclaimed for two (2) years after the date when such Obligations shall have become due and payable (during which period the Trustee shall hold such moneys without liability for interest), either at their stated maturity dates, tender for purchase or by call for redemption, if such moneys were held by the Trustee at such date, or for two (2) years after the date of deposit of such moneys, if deposited with Trustee after the date when such Obligations or the Purchase Price thereof became due and payable, shall automatically be repaid by the Trustee to the Commission as its absolute property free from trust, and the Trustee shall thereupon be released and discharged with respect thereto and the Holders shall look only to the Commission for the payment of the principal or Purchase Price of, the redemption premiums, if any, and interest on such Obligations. ARTICLE XI MISCELLANEOUS Section 11.01 Liability of Commission Limited to Trust Estate. Notwithstanding anything contained herein, the Commission shall not be required to advance any money derived from any source of income other than from the Trust Estate as provided herein for the payment of the principal of or redemption premium, if any, or interest on the Obligations or for the performance of any agreements or covenants contained herein. The Commission may, however, advance funds for any such purpose so long as such funds are derived from a source legally available for such purpose and may be used by the Commission for such purpose without incurring an indebtedness prohibited hereby. The Obligations are limited obligations of the Commission payable, as to principal thereof, and redemption premium, if any, upon the redemption of any thereof, and interest thereon, solely from the Trust Estate as provided herein and the Commission is not obligated to pay them except from the Trust Estate. The Obligations do not constitute a debt or liability of the State or of any political subdivision of the State other than the Commission, or a pledge of the full faith and credit of the State or of any political subdivision of the State. 266 98 OHSUSA:765989901.12 Section 11.02 Limitation of Rights; Third Party Beneficiary. With the exception of rights herein expressly conferred, nothing expressed or mentioned in or to be implied from this Indenture or the Obligations is intended or shall be construed to give to any Person other than the Bondholders and each Secured Creditor any legal or equitable right, remedy or claim under or in respect to this Indenture or any covenants, conditions and provisions herein contained; this Indenture and all of the covenants, conditions and provisions herein being intended to be and being for the sole and exclusive benefit of the Bondholders and each Secured Creditor. Any consent right set forth herein of the TIFIA Lender shall not be applicable if the Obligation evidenced by the TIFIA Loan will be prepaid in full upon the proposed action of the Commission. Section 11.03 Rights of Credit Providers. (a) A Supplemental Indenture authorizing a Series of Obligations may provide that any Credit Provider providing a Credit Support Instrument with respect to Obligations of such Series may exercise any right under this Indenture given to the Owners of the Obligations to which such Credit Support Instrument relates. (b) All provisions under this Indenture authorizing the exercise of rights by a Credit Provider with respect to consents, approvals, directions, waivers, appointments, requests or other actions, shall be deemed not to require or permit such consents, approvals, directions, waivers, appointments, requests or other actions and shall be read as if the Credit Provider were not mentioned therein during any period during which there is a default by such Credit Provider under the applicable Credit Support Instrument or after the applicable Credit Support Instrument shall at any time for any reason cease to be valid and binding on the Credit Provider, or shall be declared to be null and void by final judgment of a court of competent jurisdiction, or after the Credit Support Instrument has been rescinded, repudiated by the Credit Provider or terminated, or after a receiver, conservator or liquidator has been appointed for the Credit Provider or if the Credit Provider is rated below Baa3 by Moody’s or BBB- by S&P. All provisions relating to the rights of a Credit Provider shall be of no further force and effect if all amounts owing to the Credit Provider under a Credit Support Instrument have been paid and the Credit Support Instrument provided by such Credit Provider is no longer in effect. Section 11.04 Severability. If any provision of this Indenture is held to be in conflict with any applicable statute or rule of law or is otherwise held to be unenforceable for any reason whatsoever, such circumstances shall not have the effect of rendering the other provision or provisions herein contained invalid, inoperative, or unenforceable to any extent whatsoever. If any one or more of the provisions contained in this Indenture or in the Obligations shall for any reason be held to be invalid, illegal or unenforceable in any respect, then such provision or provisions shall be deemed severable from the remaining provisions contained in this Indenture and such invalidity, illegality or unenforceability shall not affect any other provision of this Indenture, and this Indenture shall be construed as if such invalid or illegal or unenforceable provision had never been contained herein. The Commission hereby declares that it would have executed this Indenture and each and every other section, paragraph, sentence, clause or phrase hereof, and authorized the issuance of the Obligations pursuant to this Indenture, irrespective of the fact that any one or more sections, paragraphs, sentences, clauses or phrases of this Indenture may be held illegal, invalid or unenforceable. 267 99 OHSUSA:765989901.12 Section 11.05 Notices. Except as otherwise provided herein, it shall be sufficient service or giving of notice, request, complaint, demand or other paper if the same shall be duly mailed by registered or certified mail, postage prepaid, addressed as follows: If to the Commission: Riverside County Transportation Commission P.O. Box 12008 Riverside, California 92502 or 4080 Lemon Street, 3rd Floor Riverside, CA 92501 Attention: Chief Financial Officer Telephone: (951) 787-7141 Fax: (951) 787-7920 If to the Trustee: U.S. BANK NATIONAL ASSOCIATION [633 West Fifth Street, 24th Floor Los Angeles, California 90071 Attention: Corporate Trust Division Telephone: (213) 615-6023 Fax: (213) 615-6197] The Commission and the Trustee by notice given hereunder may designate any different addresses to which subsequent notices, certificates or other communications shall be sent, or addresses or other instructions for the giving of Electronic notice, but no notice directed to any one such entity shall be thereby required to be sent to more than two addresses. Section 11.06 Payments Due on Non-Business Days. Except as specifically provided otherwise in a Supplemental Indenture, any payment or transfer that would otherwise become due on a day that is not a Business Day need not be made on such day but shall be made on the next succeeding Business Day, with the same force and effect as if made on the date due, and no interest shall accrue for the period from and after the date due. Section 11.07 Captions. The captions or headings in this Indenture are for convenience only and in no way define, limit or describe the scope or intent of any provisions or sections of this Indenture. 268 100 OHSUSA:765989901.12 Section 11.08 California Law. This Indenture shall be construed and governed in accordance with the laws of the State of California. Section 11.09 Effective Date. This Indenture shall become effective upon its execution and delivery. Section 11.10 Execution in Several Counterparts. This Indenture may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original; and all such counterparts, or as many of them as the Commission and Trustee shall preserve undestroyed, shall together constitute but one and the same instrument. 269 101 OHSUSA:765989901.12 IN WITNESS WHEREOF, the parties hereto have caused this Master Indenture to be executed by their officers thereunto duly authorized as of the day and year first written above. RIVERSIDE COUNTY TRANSPORTATION COMMISSION By Executive Director Countersigned: Clerk of the Board APPROVED AS TO FORM: By: General Counsel U.S. BANK NATIONAL ASSOCIATION, as Trustee By Authorized Officer 270 S-I OHSUSA:765989901.12 SCHEDULE I PROJECTS CONSTITUTING CAPITAL EXPENDITURES FUND PERMITTED EXPENDITURES 15 Express Lanes Southern Extension: Construct two tolled express lanes in each direction from SR-74 to Cajalco Rd. at an estimated cost of $560 million. 91/15 Connector Project: Construct new tolled express lane connectors from eastbound SR-91 to northbound I-15 and from southbound I-15 to westbound SR-91, including extending a single tolled express lane in each direction approximately one mile northerly on I-15 to Hidden Valley Parkway, at an estimated cost of $191 million. 271 S-II OHSUSA:765989901.12 SCHEDULE II SCHEDULED REPAIR AND REHABILITATION FUND REQUIRED DEPOSITS Fiscal Year Ending June 30, Deposit Amount 20__ --- 272 S-III OHSUSA:765989901.12 SCHEDULE III RESIDUAL FUND SCHEDULED RETAINED BALANCE Date Residual Fund Scheduled Retained Balance $ 273 A-1 OHSUSA:765989901.12 EXHIBIT A FORM OF FUNDS TRANSFER CERTIFICATE _______, 20__1 [U.S. Bank National Association, as trustee 633 West Fifth Street, 24th Floor Los Angeles, California 90071 Attention: Corporate Trust Division Telephone: (213) 615-6023 Fax: (213) 615-6197] This Funds Transfer Certificate is delivered pursuant to the Master Indenture, as supplemented by the First Supplemental Indenture, each dated as of [July 1, 2017] (as so supplemented, and as subsequently supplemented and amended, the “Indenture”), by and between Riverside County Transportation Commission (the “Commission”) and U.S. BANK NATIONAL ASSOCIATION, as trustee (the “Trustee”). All capitalized terms used but not defined herein shall have the meanings specified in the Indenture. The undersigned [Executive Director/Deputy Executive Director/Chief Financial Officer/Toll Program Director] of the Commission hereby certifies to the Trustee on behalf of the Commission that the withdrawals and transfers below comply with the requirements of the Indenture. The Commission hereby requests that the Trustee make the following transfers on [______], 20[__] for the following purposes: (A) Transfers from the Toll Revenue Fund in the following order of priority: (i) $_______ to the Operation and Maintenance Fund for the purposes contemplated by clause First of Section 5.03(b) and Section 5.06 of the Indenture. (ii) $_______ to the Rebate Fund for the purposes contemplated by clause Second of Section 5.03(b) and Section 5.13 of the Indenture. 1 Must be at least two Business Days prior to date of making transfers pursuant to Indenture Section 5.25(b). 274 A-2 OHSUSA:765989901.12 (iii) $_______ to the Senior Lien Obligations Interest Account for the purposes contemplated by clause Third of Section 5.03(b) and Section 5.14 of the Indenture. (iv) $_______ to the Senior Lien Obligations Principal Account for the purposes contemplated by clause Fourth of Section 5.03(b) and Section 5.15 of the Indenture. (v) $_______ to the Senior Lien Obligations Reserve Fund for the purposes contemplated by clause Fifth of Section 5.03(b) and Section 5.08 of the Indenture. (vi) $_______ to the Repair and Rehabilitation Fund for the purposes contemplated by clause Sixth of Section 5.03(b) and Section 5.11 of the Indenture. (vii) $_______ to the Senior Lien Obligations Interest Account for the purposes contemplated by clause Seventh of Section 5.03(b) of the Indenture with respect to TIFIA Scheduled Debt Service. (viii) $_______ to the Repair and Rehabilitation Sweep Reserve Account of the Repair and Rehabilitation Fund for the purposes contemplated by clause Eighth of Section 5.03(b) of the Indenture. (ix) $_______ to the Second Lien Obligations Interest Account for the purposes contemplated by clause Ninth of Section 5.03(b) and Section 5.16 of the Indenture. (x) $_______ to the Second Lien Obligations Principal Account for the purposes contemplated by clause Tenth of Section 5.03(b) and Section 5.17 of the Indenture. (xi) $_______ to the Second Lien Obligations Reserve Fund for the purposes contemplated by clause Eleventh of Section 5.03(b) and Section 5.09 of the Indenture. (xii) $_______ to the Subordinate Obligations Interest Account for the purposes contemplated by clause Twelfth of Section 5.03(b) and Section 5.18 of the Indenture. (xiii) $_______ to the Subordinate Obligations Principal Account for the purposes contemplated by clause Thirteenth of Section 5.03(b) and Section 5.19 of the Indenture. (xiv) $_______ to the Subordinate Obligations Reserve Fund for the purposes contemplated by clause Fourteenth of Section 5.03(b) and Section 5.10 of the Indenture. 275 A-3 OHSUSA:765989901.12 (xv) $_______ to the Subordinate Obligations Interest Account for the purposes contemplated by clause Fifteenth of Section 5.03(b) of the Indenture with respect to TIFIA Scheduled Debt Service. (xvi) $_______ to the Holding Fund for the purposes contemplated by clause Sixteenth of Section 5.03(b) and Section 5.12 of the Indenture. (xvii) $_______ to the Commission Loan Fund for the purposes contemplated by clause Seventeenth of Section 5.03(b) and Section 5.12 of the Indenture with respect to repayment of loans to the Commission. (xviii) $_______ to the Capital Expenditures Fund for the purposes contemplated by clause Eighteenth of Section 5.03(b) and Section 5.07 of the Indenture (bringing the aggregate total of all Capital Expenditures Fund transfers to $_________, which is less than the Capital Expenditures Fund Deposits Cap). (xix) $_______ to [insert counterparty to Qualified Swap Agreement or Swap] for the purposes contemplated by clause Nineteenth of Section 5.03(b) of the Indenture and [name relevant provision of Qualified Swap Agreement or Swap]. (xx) $_______ to the Residual Fund for the purposes contemplated by clause Twentieth of Section 5.03(b) and Section 5.12 of the Indenture. In the event that amounts on deposit in the Toll Revenue Fund are insufficient to satisfy in full the transfers in the amounts specified under items (i) through (xvi) above, the Trustee shall obtain instructions from the Commission as to the transfer of funds from another fund or account established under the Indenture to satisfy such transfer instructions in accordance with the Indenture. (B) Transfers to the Toll Revenue Fund from the following funds: (i) $_______ from the [2017 Bonds Reserve Account of the] Senior Lien Obligations Reserve Fund for the purposes contemplated by Sections 5.03(c). (ii) $_______ from the Second Lien Obligations Reserve Fund for the purposes contemplated by Sections 5.03(c). (iii) $_______ from the Subordinate Obligations Reserve Fund for the purposes contemplated by Sections 5.03(c). (iv) $_______ from the Repair and Rehabilitation Fund for the purposes contemplated by Sections 5.03(c). (v) $_______ from the Capital Expenditures Fund for the purposes contemplated by Sections 5.03(c). The Commission has determined as of the date of this Funds Transfer Certificate that the amount[s] specified in [(i), (ii), (iii), (iv)] above [is / are] the amount[s] by which the funds on 276 A-4 OHSUSA:765989901.12 deposit in [the Senior Lien Obligations Reserve Fund, the Second Lien Obligations Reserve Fund, the Subordinate Obligations Reserve Fund, the Repair and Rehabilitation Fund, the Senior Lien Obligations Reserve Fund] exceed the [Senior Lien Obligations Reserve Requirement, Second Lien Obligations Reserve Requirement, Subordinate Obligations Reserve Requirement, Capital Expenditures Fund Deposit Cap, amount required for expected Repair and Rehabilitation Fund Permitted Expenditures] [or] [are no longer be needed for making Capital Expenditures Fund Permitted Expenditures]. (C) Transfer[s] to the party[ies] identified in Schedule I hereto funds in the amount[s], from the Fund[s] or Account[s] and for the [Project Costs/Capital Expenditures Fund Permitted Expenditures/Repair and Rehabilitation Fund Permitted Expenditures/purposes] set forth in Schedule I hereto. [To the extent that capitalized interest is being requisitioned hereunder, amounts requisitioned, together with expected earnings from investment thereof, do not exceed amounts properly capitalizable as interest related to projects prior to their completion.] [Obligations in the amounts reflected in Schedule I hereto have been incurred by the Commission and presently are due and payable or properly are reimbursable to the Commission, and each item thereof is a Project Cost, is a proper charge against the applicable Account in the Project Fund and has not been paid or reimbursed previously.] [The Commission hereby certifies, and included with this Funds Transfer Certificate is a Certificate of the Consulting Engineer certifying that [[A/a]fter giving effect to the transfer in paragraph (C) above, sufficient funds are and will be available to the Commission to achieve substantial completion of the applicable Project on or prior to the applicable Long Stop Date.]] [There has not been filed with or served on the Commission any notice of lien, right of lien, or attachment upon or claim affecting the right of any person, firm or corporation named in Schedule I to receive payment of any amounts shown therein which has not been released or will not be released simultaneously with the payment of such obligation. As of the date of this Funds Transfer Certificate, no event or condition exists that constitutes, or that with the notice or lapse of time or both, would constitute, an Event of Default under the Indenture.] (D) Deposit or Transfer Upon [Substantial][Final] Completion. [The Substantial Completion Date occurred on [DATE]. The Trustee is hereby instructed to make the deposit to the Operations and Maintenance Fund described in Section 5.04(i) of the Indenture.] [[DATE] is the date of final completion of the I-15 Express Lanes Project. The Trustee is hereby instructed to make the deposit to the Toll Revenue Fund and the transfer to the Commission described in Section 5.04(i) of the Indenture.] RIVERSIDE COUNTY TRANSPORTATION COMMISSION By 277 A-5 OHSUSA:765989901.12 Authorized Representative 278 A-1 OHSUSA:765989901.12 SCHEDULE I FUNDS TRANSFER DESCRIPTION Transfer To Amount From Fund, Account or Subaccount Purpose (Project Cost, Capital Expenditures Fund Permitted Expenditure, Repair and Rehabilitation Fund Permitted Expenditure, or other purpose (describe)) and general classification of transfer requested $_______ 279 OHSUSA:765990908.3 OH&S Draft – 4/18/16 FIRST SUPPLEMENTAL INDENTURE between RIVERSIDE COUNTY TRANSPORTATION COMMISSION and U.S. BANK NATIONAL ASSOCIATION, as Trustee Dated as of [July 1, 2017] Relating to the Riverside County Transportation Commission Toll Revenue Bonds, 2017 TIFIA Series (Supplementing the Master Indenture Dated as of [July 1, 2017]) ATTACHMENT 7 280 TABLE OF CONTENTS Page -i- OHSUSA:765990908.3 ARTICLE XII DEFINITIONS Section 12.01. Definitions........................................................................................................ 1 Section 12.02. Rules of Construction ..................................................................................... 2 ARTICLE XIIII FINDINGS, DETERMINATIONS AND DIRECTIONS Section 13.01. Findings and Determinations ........................................................................... 3 Section 13.02. Recital in Bonds ............................................................................................... 3 Section 13.03. Effect of Findings and Recital ......................................................................... 3 ARTICLE XIV AUTHORIZATION OF THE 2017 TIFIA BOND Section 14.01. Authorization; Principal Amount, Designation and Series .............................. 3 Section 14.02. Priority and Lien; Effect of Bankruptcy Related Event on 2017 TIFIA Bond ................................................................................................................. 4 Section 14.03. Purpose ............................................................................................................. 4 Section 14.04. Form, Denomination, Numbers and Letters .................................................... 4 Section 14.05. Date, Maturities and Interest Rates .................................................................. 5 Section 14.06. Conditions To Delivery of 2017 TIFIA Bonds ................................................ 6 Section 14.07. Disposition of Proceeds of 2017 TIFIA Bonds................................................ 6 ARTICLE XV TRANSFERS; SUBORDINATE OBLIGATIONS RESERVE ACCOUNT (2017 TIFIA LOAN) Section 15.01. Transfers to the Debt Service Fund ................................................................. 6 Section 15.02. Subordinate Obligations Reserve Account (2017 TIFIA Loan) ...................... 6 ARTICLE XVI OTHER PROVISIONS Section 16.01. Tax Status......................................................................................................... 7 Section 16.02. No Amendment without Consent of the TIFIA Lender ................................... 7 ARTICLE XVII MISCELLANEOUS Section 17.01. Severability ...................................................................................................... 7 Section 17.02. Parties Interested Herein .................................................................................. 7 Section 17.03. Headings Not Binding...................................................................................... 8 281 TABLE OF CONTENTS (continued) Page -ii- OHSUSA:765990908.3 Section 17.04. Indenture to Remain in Effect .......................................................................... 8 Section 17.05. Effective Date of First Supplemental Indenture .............................................. 8 Section 17.06. Execution in Counterparts ................................................................................ 8 EXHIBIT A FORM OF TRANSFEREE’S LETTER ...................................................... A-1 EXHIBIT B FORM OF 2017 TIFIA BOND ................................................................... B-1 APPENDIX ONE I-15 EXPRESS LANES PROJECT .......................................................... A-1-1 APPENDIX TWO TIFIA LOAN AMORTIZATION SCHEDULE I-15 EXPRESS LANES PROJECT .................................................................................... A-2-1 282 OHSUSA:765990908.3 THIS FIRST SUPPLEMENTAL INDENTURE, dated as of [July 1, 2017] (this “First Supplemental Indenture”), between the RIVERSIDE COUNTY TRANSPORTATION COMMISSION, a public entity duly existing under the laws of the State of California (the “Commission”) and U.S. BANK NATIONAL ASSOCIATION, a national banking association duly organized and existing under the laws of the United States of America, as trustee (together with any successor thereto, the “Trustee”). WITNESSETH: WHEREAS, this First Supplemental Indenture is supplemental to the Master Indenture, dated as of [July 1, 2017] (as supplemented and amended from time to time pursuant to its terms, the “Indenture”), between the Commission and the Trustee; WHEREAS, the Indenture provides that the Commission may issue Senior Lien Obligations from time to time as authorized by a Supplemental Indenture, which Senior Lien Obligations are to be secured by the Trust Estate in accordance with the Indenture; WHEREAS, the Commission and the Trustee desire to enter into this First Supplemental Indenture to set forth the terms of the Commission’s obligations to the TIFIA Lender, relating to the execution and delivery of the TIFIA Loan Agreement dated as of [_____, 2017] (the “2017 TIFIA Loan Agreement”) authorizing and setting forth the terms and conditions of a TIFIA Loan (the “2017 TIFIA Loan”) from the TIFIA Lender to the Commission, which TIFIA Loan is to be evidenced by a bond entitled “Riverside County Transportation Commission Toll Revenue Bond, 2017 TIFIA Series” (the “2017 TIFIA Bond”), to be issued in an aggregate principal amount not to exceed $[TIFIA PAR]; WHEREAS, the 2017 TIFIA Loan Agreement is being entered into as indebtedness under, pursuant to and in accordance with the Act, and the proceeds of the 2017 TIFIA Loan may be disbursed by the TIFIA Lender to be used to finance the Project (as that term is defined in the 2017 TIFIA Loan Agreement); and WHEREAS, the Commission desires to provide at this time for the issuance of the 2017 TIFIA Bond, as further provided in this First Supplemental Indenture; NOW, THEREFORE, the parties hereto hereby agree as follows: ARTICLE XII DEFINITIONS Section 12.01. Definitions. (a) Definitions. Unless the context otherwise requires, or as otherwise provided in subsection (b) of this Section, all terms defined in the Indenture shall have the same meanings, respectively, in this First Supplemental Indenture. 283 -2- OHSUSA:765990908.3 (b) Additional Definitions. Unless the context otherwise requires, the following terms shall, for all purposes of this First Supplemental Indenture, have the following meanings: “Authorized Denominations” means, with respect to the 2017 TIFIA Bond, $1,000,000 principal amount and any integral multiple of $1 in excess thereof. “Interest Payment Date” means, with respect to the 2017 TIFIA Bond, each [June 1] and [December 1] (and, if applicable, each Interim Payment Date) of each applicable year on and after the TIFIA Debt Service Payment Commencement Date, or if such day is not a Business Day, then the Business Day succeeding such date. “Interim Payment Date” means any date (a) on which interest on or principal of any Obligations is payable and (b) that is not a [June 1] or [December 1] occurring on or after the TIFIA Debt Service Payment Commencement Date. “Issue Date” means the date of delivery of the 2017 TIFIA Bond to the TIFIA Lender. “Principal Payment Date” means, with respect to the 2017 TIFIA Bond, each scheduled principal payment date as set forth in the Loan Amortization Schedule (as defined in the TIFIA Loan Agreement), which shall occur on [June 1] of each applicable year on and after the TIFIA Debt Service Payment Commencement Date, or if such day is not a Business Day, then the Business Day succeeding such date. “Record Date” means, with respect to the 2017 TIFIA Bonds, the fifteenth (15th) day (whether or not a Business Day) of the month preceding the month in which such Interest Payment Date occurs. “Registration Books” has the meaning specified in Section [20.04(a)]. “First Supplemental Indenture” means this First Supplemental Indenture, dated as of [July 1, 2017]. “Senior Lien Obligations Reserve Account (2017 TIFIA Loan)” means the Senior Lien Ob