Contract analysis

ARTICLE I — DEFINITIONS AND RULES OF CONSTRUCTION

Section 1.01 — Definitions All capitalized terms used but not otherwise defined in this First Supplemental Indenture shall have the respective meanings ascribed to them in the Master Indenture. In addition to the terms defined in the Recitals hereto, the following terms, as used in this First Supplemental Indenture, shall have the following meanings unless the context clearly requires otherwise: "Act" means Chapter 4

Section 1.02 — Rules of Construction The following rules of construction shall apply to this First Supplemental Indenture: (a) All references herein to the "Master Indenture" shall mean the Master Indenture as supplemented and amended by this First Supplemental Indenture and by any further supplemental indentures entered into in accordance with the terms thereof. (b) The table of contents and the article and section

Section 1.03 — Authority for First Supplemental Indenture This First Supplemental Indenture is entered into pursuant to and in accordance with (a) the Act, (b) Section 2.12 of the Master Indenture, which authorizes the issuance of additional series of Bonds upon the execution and delivery of a supplemental indenture and satisfaction of the conditions precedent set forth therein, and (c) the Authorizing Resolution. Th

ARTICLE II — AUTHORIZATION AND TERMS OF SERIES 2023A BONDS

Section 2.01 — Authorization of Series 2023A Bonds The Authority hereby authorizes the issuance and delivery of a series of Bonds to be designated "Cascadia State Infrastructure Authority Water Treatment Revenue Bonds, Series 2023A (Tax-Exempt)" in the aggregate principal amount of Two Hundred Twenty Million Dollars ($220,000,000). The Series 2023A Bonds are issued under and pursuant to, and in all respects in accord

Section 2.02 — Purpose The proceeds of the Series 2023A Bonds shall be applied and used for the following purposes: (a) to finance the design, construction, equipping, and commissioning of the Project, as more particularly described in Schedule B attached hereto; (b) to fund the Costs of Issuance Fund established pursuant to Section 4.02 hereof; (c) to fund the Capitalized Interest Fund established pursuant to Sectio

Section 2.03 — Terms of the Series 2023A Bonds The Series 2023A Bonds shall have the following terms: (a) Aggregate Principal Amount. The aggregate principal amount of the Series 2023A Bonds shall be Two Hundred Twenty Million Dollars ($220,000,000). (b) Dated Date. The Series 2023A Bonds shall be dated as of October 24, 2023 (the "Dated Date"). (c) Interest Rate. The Series 2023A Bonds shall bear interest at a fixed

Section 2.04 — Tax-Exempt Status The interest on the Series 2023A Bonds is intended to be and shall be excludable from gross income of the owners thereof for federal income tax purposes under Section 103 of the Code, and the Series 2023A Bonds are not "private activity bonds" as defined in Section 141 of the Code. The Authority has covenanted and agreed to take such actions and refrain from taking such actions as are

Section 2.05 — Pricing and Sale The Series 2023A Bonds have been sold by the Authority to the Underwriters pursuant to the Bond Purchase Agreement dated August 30, 2023, at a purchase price equal to 99.25% of the aggregate par amount thereof (reflecting an Original Issue discount of One Million Six Hundred Fifty Thousand Dollars ($1,650,000)), less the Underwriters' discount of Nine Hundred Ninety Thousand Dollars ($

ARTICLE III — REDEMPTION OF SERIES 2023A BONDS

Section 3.01 — Optional Redemption The Series 2023A Bonds are subject to optional redemption by the Authority, in whole or in part, on any date on or after October 1, 2033 (representing ten (10) years of call protection from the Dated Date), at a redemption price equal to one hundred percent (100%) of the principal amount of the Series 2023A Bonds to be redeemed, plus accrued and unpaid interest thereon to the date f

Section 3.02 — Mandatory Sinking Fund Redemption The Series 2023A Bonds are subject to mandatory sinking fund redemption, in part, on each October 1 on which a Mandatory Sinking Fund Installment is due, commencing October 1, 2024, at a redemption price equal to one hundred percent (100%) of the principal amount to be redeemed, plus accrued and unpaid interest thereon to the date fixed for redemption, in the respectiv

Section 3.03 — Selection of Bonds for Redemption If fewer than all of the Outstanding Series 2023A Bonds are to be redeemed at any time, whether by optional redemption or mandatory sinking fund redemption, the particular Series 2023A Bonds or portions thereof to be redeemed shall be selected by the Trustee by lot or by such other method as the Trustee shall deem fair and appropriate; provided, however, that so long a

Section 3.04 — Notice of Redemption The Trustee shall give notice of any redemption of the Series 2023A Bonds (whether optional or mandatory sinking fund) by sending a written notice by first-class mail, postage prepaid (or, so long as the Series 2023A Bonds are held in book-entry form, by electronic transmission through DTC's procedures), not less than thirty (30) days nor more than sixty (60) days prior to the date

Section 3.05 — Conditional Redemption The Authority reserves the right to condition any optional redemption of the Series 2023A Bonds pursuant to Section 3.01 hereof upon the availability of sufficient moneys to pay the redemption price on the date fixed for redemption. In such event, the notice of redemption shall state that it is conditional and shall specify the conditions that must be satisfied. If such condition

Section 3.06 — Effect of Redemption On the date fixed for redemption, if moneys sufficient to pay the redemption price of the Series 2023A Bonds called for redemption, including all accrued and unpaid interest thereon, are held by the Trustee in trust for such purpose, the Series 2023A Bonds so called for redemption shall cease to be Outstanding under the Master Indenture and this First Supplemental Indenture, intere

ARTICLE IV — APPLICATION OF PROCEEDS; FUNDS AND ACCOUNTS

Section 4.01 — Deposit of Proceeds On the Closing Date, the Net Bond Proceeds of the Series 2023A Bonds in the amount of Two Hundred Seventeen Million Three Hundred Sixty Thousand Dollars ($217,360,000) shall be received by the Trustee and applied as follows: (a) Two Hundred Fifteen Million Four Hundred Ninety Thousand Dollars ($215,490,000) shall be deposited into the Project Fund established under the Escrow Deposi

Section 4.02 — Costs of Issuance Fund (a) A separate fund designated the "Series 2023A Costs of Issuance Fund" is hereby established and shall be held by the Trustee in trust. On the Closing Date, the Trustee shall deposit into the Costs of Issuance Fund the amount of One Million Eight Hundred Seventy Thousand Dollars ($1,870,000) from Net Bond Proceeds. (b) Estimated Costs of Issuance of One Million Eight Hundred Se

Section 4.03 — Capitalized Interest Fund (a) A separate account designated the "Series 2023A Capitalized Interest Account" is hereby established within the Bond Fund and shall be held by the Trustee in trust. On the Closing Date, the amount of Four Million Five Hundred Ten Thousand Dollars ($4,510,000) shall be deposited into the Capitalized Interest Fund from amounts allocated within the overall deposit of Net Bond

Section 4.04 — Debt-Service Reserve Fund — Surety Policy (a) The Debt-Service Reserve Fund Requirement for the Series 2023A Bonds is an amount equal to the least of (i) maximum annual debt service on the Series 2023A Bonds, (ii) one hundred twenty-five percent (125%) of average annual debt service on the Series 2023A Bonds, or (iii) ten percent (10%) of the original aggregate principal amount of the Series 2023A Bond

Section 4.05 — Project Fund (a) All amounts deposited into the Project Fund, consisting of Net Bond Proceeds of Two Hundred Fifteen Million Four Hundred Ninety Thousand Dollars ($215,490,000) and the Authority's equity contribution of Seventeen Million Four Hundred Thousand Dollars ($17,400,000), aggregating Two Hundred Thirty-Two Million Eight Hundred Ninety Thousand Dollars ($232,890,000), shall be applied solely t

Section 4.06 — Bond Fund and Flow of Funds The Series 2023A Bonds are secured on a parity basis with all other Outstanding Bonds under the Master Indenture, and all of the flow of funds provisions set forth in Article V of the Master Indenture shall apply to the Series 2023A Bonds. Without limiting the generality of the foregoing, the flow of funds established under the Master Indenture is as follows: (i) All Gross P

ARTICLE V — SECURITY FOR SERIES 2023A BONDS

Section 5.01 — Pledge of Net Pledged Revenues The Series 2023A Bonds are special, limited obligations of the Authority, payable solely from and secured by a pledge of Net Pledged Revenues on a parity basis with all other Outstanding Bonds issued under the Master Indenture, as more particularly set forth in the Revenue Pledge Agreement. The Series 2023A Bonds do not constitute a general obligation or indebtedness of t

Section 5.02 — Additional Bonds Test Satisfaction In connection with the issuance of the Series 2023A Bonds, the Authority hereby certifies that the Additional Bonds Test set forth in Section 2.13 of the Master Indenture has been satisfied. The Additional Bonds Test requires that, at the time of issuance of any additional parity Bonds, Net Pledged Revenues for the most recently completed fiscal year (or, at the optio

Section 5.03 — Rate Covenant As set forth in Section 6.04 of the Master Indenture and the Revenue Pledge Agreement, the Authority covenants and agrees that it shall fix, charge, and collect rates, fees, and charges for water treatment services sufficient, together with other available moneys, to produce in each fiscal year Net Pledged Revenues equal to at least one hundred forty percent (140%) of the annual aggregate

Section 5.04 — Lien Status The pledge of Net Pledged Revenues securing the Series 2023A Bonds is on a parity basis with the pledge of Net Pledged Revenues securing all other Outstanding Bonds heretofore or hereafter issued under the Master Indenture, and no senior lien on Net Pledged Revenues exists or shall be created. The Authority covenants and agrees that it shall not create, assume, or permit to exist any lien o

ARTICLE VI — BOOK-ENTRY SYSTEM

Section 6.01 — Book-Entry Only; DTC The Series 2023A Bonds shall be initially issued in the form of a single fully registered bond for each maturity or mandatory sinking fund installment, registered in the name of Cede & Co., as nominee of The Depository Trust Company ("DTC"), and immobilized in the custody of DTC at its principal office in New York, New York. The DTC Participant Number assigned to Pacific Northwest

Section 6.02 — Discontinuance of Book-Entry System In the event that DTC determines not to continue to act as securities depository for the Series 2023A Bonds, or in the event that the Authority determines, with the written consent of the Trustee, that DTC is incapable of discharging its responsibilities with respect to the Series 2023A Bonds, then the Authority shall use its best efforts to appoint a successor secur

Section 6.03 — Payments Under Book-Entry System So long as the Series 2023A Bonds are maintained in book-entry form through DTC, all payments of principal of, premium (if any), and interest on the Series 2023A Bonds shall be made by the Trustee to Cede & Co. (or such other nominee as DTC may designate) as the sole registered owner of the Series 2023A Bonds, and DTC will credit such payments to the accounts of the DTC

ARTICLE VII — FORM OF SERIES 2023A BONDS

Section 7.01 — Form The Series 2023A Bonds shall be in substantially the form set forth in Exhibit A attached hereto and incorporated herein by this reference, with such appropriate insertions, omissions, substitutions, and other variations as are permitted or required by this First Supplemental Indenture or the Master Indenture. The Series 2023A Bonds may have endorsed thereon such legends or text as may be necessar

Section 7.02 — Temporary Bonds If definitive Series 2023A Bonds are not prepared in time for delivery to the Underwriters on the Closing Date, the Authority may execute and the Trustee shall authenticate and deliver temporary Series 2023A Bonds in such form as may be agreed upon by the Authority and the Trustee, which temporary Bonds shall be exchangeable without charge by the Authority or the Trustee for definitive

ARTICLE VIII — COVENANTS OF THE AUTHORITY

Section 8.01 — Tax Covenants (a) The Authority covenants and agrees that it shall take all actions and refrain from taking all actions as may be necessary, desirable, or appropriate in order to maintain the exclusion of interest on the Series 2023A Bonds from gross income of the owners thereof for federal income tax purposes under Section 103 of the Code, including, without limitation, compliance with the applicable

Section 8.02 — Continuing Disclosure The Authority hereby covenants and agrees that it shall comply with its obligations under the Continuing Disclosure Agreement dated as of October 24, 2023, between the Authority and PNTC, in its capacity as Dissemination Agent, including the timely filing of: (a) Annual financial information and operating data with respect to the Authority, including audited financial statements,