EXHIBIT 12-G
FIRST AMENDMENT TO
TRUST AGREEMENT
This First Amendment to Trust Agreement, dated as of
_________, 2004 (the “First Amendment to Trust Agreement”), is entered by and
between U.S. BANK NATIONAL ASSOCIATION, __________, California, formerly known
as First Trust of California, National Association, and the MONTEREY PENINSULA
WATER MANAGEMENT DISTRICT, a California public agency duly organized and
existing under the laws of the State of California (“MPWMD”).
WHEREAS, the parties hereto have previously entered
into a certain Trust Agreement, dated as of December 1, 1992 (the “Original
Trust Agreement”) in connection with the issuance of $33,900,000 Variable Rate
Demand Certificates of Participation (Wastewater Reclamation Project) Series
1992 (the “1992 Certificates”).
WHEREAS, in accordance with a certain Water Purchase
Agreement, dated as of December 1, 1992, (the “Original Water Purchase
Agreement”) by and among MPWMD, the Carmel Area Wastewater District, a
California public agency duly organized and existing under the laws of the
State of California (“CAWD”) and the Pebble Beach Community Services District,
a California public agency duly organized and existing under the laws of the
State of California (“PBCSD”), CAWD and PBCSD agreed to sell, and MPWMD agreed
to purchase, through certain payments known as “Series 1992 Water Payments,” as
defined in the Original Trust Agreement, reclaimed water (also referred to as
recycled water) produced by the wastewater reclamation project which was
financed and constructed with proceeds of the 1992 Certificates (the “Original
Project”). These 1992 Water Payments
payable by MPWMD constitute the security for payment of the principal and
interest components of the Series 1992 Certificates.
WHEREAS, the performance of the Original Project has
not met the expectations of the parties with regard to either quantity or
quality of recycled water due to a number of factors beyond the consideration
of any of the parties participating in the Original Project. Prominent among these factors are: (1) the
salt sensitivity of the dominant species planted in the greens of many of the
golf courses irrigated with the recycled water; (2) inadequacy of the drainage
facilities to conduct accumulated salts away from the greens; (3) increased
salinity due to (a) smaller than anticipated amounts of secondary effluent due
to decreased flows of influent to the CAWD wastewater plant (resulting in part
from consumers’ water conservation efforts), (b) the addition of water
softening units, and (c) internal wastewater plant processes contributing
additional salinity loading; (4) the lack of sufficient data concerning the
composition of the secondary effluent produced by the CAWD Wastewater Treatment
Plant or concerning the water quality and water quantity requirements for golf
course irrigation; and (5) the absence of any seasonal storage of recycled
water.
WHEREAS, CAWD, PBCSD and MPWMD have agreed to cooperate
in the implementation and financing of certain improvements to the Original
Project (such improvements being the “Project Expansion”).
WHEREAS, although no Additional Certificates will be
issued in connection with the Project Expansion, the parties hereto desire to
amend the Original Trust Agreement to provide for certain modifications thereto
caused by the Project Expansion and related activities.
WHEREAS, Section 9.01(b) of the Original Trust
Agreement permits amendments thereto with (i) the written consent of the Credit
Bank and (ii) a determination that such amendments will not adversely affect
the interests of the Owners of the Certificates.
WHEREAS the Credit Bank has filed its written consent
with the Trustee, and the parties hereto have determined that the First
Amendment to Trust Agreement will not adversely affect the owners of the
Certificates.
WHEREAS, concurrently herewith, MPWMD, CAWD and PBCSD
will execute a First Amendment to Water Purchase Agreement (the “First
Amendment to Water Purchase Agreement”) dated as of the date hereof, for which
the Credit Bank has filed its written consent with the Trustee.
NOW THEREFORE, in consideration of the foregoing, and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto do hereby agree as follows:
A.
Definitions.
Unless otherwise indicated, all capitalized terms shall have the
meanings set forth in the Original Trust Agreement. The Original Trust Agreement, as amended by
this First Amendment to Trust Agreement, is referred to herein as the “Trust
Agreement.”
Section 1.01 of the Original Trust Agreement is hereby
amended and supplemented as follows:
1.
The following new definition is added:
Amended and Restated Construction and Operation
Agreement. The term “Amended and
Restated Construction and Operation Agreement” means the Amended and Restated
Construction and Operation Agreement, dated as of ___________, 2004, by and
among CAWD, PBCSD and PBC, as further amended from time to time.
2.
The definition of “Ancillary Agreements” is amended to
include the original definition of that term as shown in the Original Trust
Agreement and also to include the “Related Agreements” as defined in the
Amended and Restated Construction and Operation Agreement.
3.
The definition of “Business Day” is deleted in its
entirety and replaced with the following:
“Business Day” means any weekday which is not a
federal or California
state holiday.
4.
The definition of “Capital Costs” shall be as defined
in the Amended and Restated Construction and Operation Agreement, but shall
exclude “Capital Costs of the Project Expansion” as defined therein.
5.
The definition of “Construction and Operation
Agreement” is deleted in its entirety and replaced with the following:
“Construction and Operation Agreement” means the
Wastewater Reclamation Project Construction and Operation Agreement among
MPWMD, CAWD, PBCSD and PBC, dated as of November 1, 1990, as amended and
restated by the Amended and Restated Construction and Operation Agreement and
as may be further amended from time to time.
6.
The following new definition is added:
COP Documents.
“COP Documents” means the Official Statement and all other documents
prepared in connection with the execution and delivery of the 1992
Certificates, including, without limitation, the authorizing resolutions, the
Trust Agreement, the Water Purchase Agreement, the Financing Implementation
Agreement, the Certificate Purchase Contract and the Letter of Credit.
7.
The following new definition is added:
Completed.
“Completed” with respect to the Project Expansion shall mean that each
of the following events has occurred: (1) all required permits or other
approvals have been obtained, (2) all construction activities for the Advanced
Treatment Component, as defined in the Amended and Restated Construction and
Operation Agreement, (being added to the tertiary treatment plant facilities of
the Original Project), the Forest Lake Reservoir, and all treatment and
distribution facilities associated therewith, have been completed and tested in
accordance with their respective approved plans, permits and other approvals,
(3) Forest Lake Reservoir has been filled to capacity with Recycled Water from
the Advanced Treatment Component, and (4) all portions of the distribution
system are capable of delivering such Recycled Water to the Recycled Water
Irrigation Areas. The Project Expansion
shall be deemed Completed only if and when each of the events described in the
preceding sentence has occurred as reasonably determined by CAWD/PBCSD.
8.
The definition of “Credit Bank” is hereby amended by
deleting the words “The Sumitomo Bank, Limited, acting through its San
Francisco branch” and replacing them with “Bank of America.”
9.
The definition of “Financing Implementation Agreement”
is deleted in its entirety and replaced with the following:
“Financing Implementation Agreement” means the
Financing Implementation Agreement Relating to Wastewater Reclamation Project,
dated as of December 1, 1992, by and between MPWMD and PBC, as amended by the
First Amendment to Financing Implementation Agreement, dated as of
____________, 2004, and as may be further amended from time to time.
10.
The definition of “Information Services” is deleted in
its entirety and replaced with the following:
“Information Services” means Financial Information,
Incorporated’s “Daily Called Bond Service,” 30 Montgomery Street, 10th Floor,
Jersey City, New Jersey 0 7302, Attention: Editor; Mergent/FIS, Inc., 5250-77
Center Drive, Charlotte, North Carolina 28217, Attention Called Bond Dept.;
Kenny Standard and Poor’s, 55 Water Street, New York, New York 10041; and, in accordance
with then-current guidelines of the Securities and Exchange Commission, such
other services providing information with respect to called bonds, or no such
services, as MPWMD may designate in a Written Request of MPWMD delivered to the
Trustee.
11.
The definition of “Fiscal Sponsorship Agreement” is
deleted in its entirety and replaced with the following:
“Fiscal Sponsorship Agreement” means the Wastewater
Reclamation Project Fiscal Sponsorship Agreement between the MPWMD and PBC
dated as of October 3, 1989, as amended from time to time (including the
amendments thereto made by the Financing Implementation Agreement and the
Supplemental Financing Agreement).
12.
The definition of “Management Committee” is deleted in
its entirety and replaced with the following:
“Management Committee” means the committee formed
pursuant to and in accordance with the Amended and Restated and Construction
and Operation Agreement and which is charged with the design and construction
of the Project Expansion and the development and approval of a budget for, and
management and operation of, the Project.
13.
The definition of “Net Operating Revenues” is deleted
in its entirety and replaced with the following:
“Net Operating Revenues” for a Fiscal Year means the
amount by which Operating Revenues exceeds Operation and Maintenance Expenses
and Bond Carrying Costs during such Fiscal Year.
14.
The definition of “Operating Revenues” is deleted in
its entirety and replaced with the following:
“Operating Revenues,” as applied to the Project, means
all income, rents, rates, fees, charges and other moneys derived by the Public
Participants (as defined in the Construction and Operation Agreement) from the
ownership or operation of the Project, including, without limiting the
generality of the foregoing: (i) all income, rents, rates, fees, charges or
other moneys derived from the sale, furnishing and supplying of the Recycled
Water (or from potable water supplied in lieu thereof); (ii) insurance and
condemnation proceeds resulting from damage to or destruction of the Project
facilities, or from the condemnation of any of such facilities; and (iii)
interest earned on all revenues mentioned in (i) and (ii) above or on any fund
or account relating to the Project under the COP Documents (excluding any
amounts required to be rebated to the United States pursuant to Section 148 of
the Internal Revenue Code); provided, however, that such term shall not include
customers’ deposits or any other deposits subject to refund until such deposits
have become the property of one of the Public Participants or the water supply
surcharge retained by MPWMD in connection with the sale of Recycled Water in
accordance with the Financing Implementation Agreement.
15.
The definition of “Operation and Maintenance Expenses”
is deleted in its entirety and replaced with the following:
“Operation and Maintenance Expenses,” as applied to
the Project, means all expenses and costs of management, operation,
maintenance, repair, replacement, renovation, or improvement of the Project
properly chargeable to the Project in accordance with generally acceptable
accounting principles, including, without limitation, (a) payments to be made
by any of the Public Participants under agreements with Cal-Am for the purchase
of potable water; (b) an allowance for depreciation, amortization, and
obsolescence determined in accordance with Section 5.2(b) of the Amended and
Restated Construction and Operation Agreement; (c) all administrative expenses
of MPWMD, CAWD, and PBCSD, incurred in connection with, and properly allocable
as an expense relating to, the Project and the Certificates; and (d) an amount
equal to any reduction in real property taxes allocated to MPWMD caused by a
change in California state law which results in a reduction of such tax
allocation based on the collection of the Operating Revenues from the sale of
the Recycled Water, as more specifically provided in the Financing
Implementation Agreement.
16.
The definition of “O&M Reserve Fund” is deleted in
its entirety and replaced with the following:
“Operation and Maintenance Reserve Fund” means the
fund which shall be maintained and held separate and apart from other funds to
pay for Operation and Maintenance Expenses as they become due and payable
during a Fiscal Year to the extent the timing or amount of Operating Revenues
for such Fiscal Year are insufficient to provide for such payments.
17.
The definition of “O&M Reserve Requirement” is
deleted in its entirety and replaced by the following:
“Operation and Maintenance Reserve Requirement” means
the annual reserve amount determined by the Management Committee as part of the
annual budget for each Fiscal Year of the Project in accordance with generally
accepted accounting principles. The
Management Committee may, but shall not be required to, adjust the annual
reserve amount determined upon adoption of the annual budget for a Fiscal Year
in the event of subsequent budget adjustments during the course of such Fiscal
Year.
18.
The following new definition is added:
Original Project. “Original Project” means and consists of (1)
a tertiary treatment facility at the present CAWD wastewater treatment plant
site, designed to produce at least 800 acre feet per year of disinfected
recycled water suitable for irrigation of the Recycled Water Irrigation Areas
(as defined in the Amended and Restated Construction and Operation Agreement),
as more specifically described as the Tertiary Facility in the Amended and
Restated Construction and Operation Agreement, and (2) the distribution system
which is capable of distributing the recycled water from the Tertiary Facility
to a point of distribution in the Del Monte Forest for further distribution to
the Recycled Water Irrigation Areas presently in operation, as more
specifically described as the Distribution System in the Amended and Restated
Construction and Operation Agreement.
Improvements to the Irrigation System (as defined in the Amended and
Restated Construction and Operation Agreement) on each of the Recycled Water
Irrigation Areas presently in operation were also financed and constructed as
part of the Original Project.
19.
The definition of “Project” is deleted in its entirety
and replaced with the following:
“Project” means the Original Project and the Project
Expansion.
20.
The following new definition is added:
Project Expansion. “Project Expansion” means and consists of
components intended to improve the Original Project, principally including (but
not limited to) (a) the addition of advanced treatment components to the
treatment facilities of the Original Project (the “Advanced Treatment
Component”), and (b) the addition of storage, treatment, and distribution
facilities at or associated with the Forest Lake Reservoir located within the
Del Monte Forest (the “Forest Lake Component”), both as more particularly
described in the Amended and Restated Construction and Operation Agreement.
21.
The definition of “Rating Agencies” is deleted in its
entirety and replaced with the following:
“Rating Agencies” means Standard & Poor’s
Corporation and Moody’s Investors Service, their successors and assigns, and,
if either or both of such entities shall be dissolved or liquidated or shall no
longer perform the functions of a securities rating agency, “Rating Agency”
shall be deemed to refer to any other nationally recognized securities rating agency
designated by the Trustee at the written direction of the Credit Bank.
22.
The definition of “Reclaimed Water” is deleted in its
entirety and replaced with the following:
Recycled Water.
The meaning of the term “Recycled Water” depends upon whether or not the
Project Expansion is Completed. The term
“Reclaimed Water,” as used in any of the Related Agreements, means “Recycled
Water.”
(a) Before
the Project Expansion is Completed, “Recycled Water” shall mean water
originating from the Tertiary Facility, as defined in the Amended and Restated
Construction and Operation Agreement.
(b) After
the Project Expansion is Completed, “Recycled Water” shall mean water
originating from the Advanced Treatment Component and/or Forest Lake Component
meeting the water quality standards set forth in Exhibit “E” to the Amended and
Restated Construction and Operation Agreement.
23.
The definition of “Sales Agreements” is deleted in its
entirety and replaced by the following:
Recycled Water Sales Agreement. “Recycled Water Sales Agreement” means each
Agreement for Sale of Reclaimed Water, dated as of 1992 and currently in
effect, by and between MPWMD and the owners of the Recycled Water Irrigation
Areas (as defined in the Amended and Restated Construction and Operation
Agreement) and, after the Project Expansion is Completed, each Agreement for
Sale of Recycled Water by and between MPWMD and the then current owners of the
Recycled Water Irrigation Areas.
24.
The definition of “Securities Depositories” is deleted
in its entirety and replaced with the following:
“Securities Depositories” means the following
registered securities depository: The Depository Trust Company, 711 Stewart Avenue, Garden City, New York 11530, Fax (516) 227-4039 or 4190;
or, in accordance with then-current guidelines of the Securities and Exchange
Commission, such other securities depositories, or no such depositories, as
MPWMD may designate in a Written Request of MPWMD delivered to the Trustee.
25.
The following new definition is added:
“Supplemental Financing Agreement” means the
Supplemental Financing Agreement between MPWMD and PBC, dated as of
____________, 2004, as it may be amended from time to time.
26.
The definition of “Trust Agreement” is deleted in its
entirety and replaced by the following:
The term “Trust Agreement” means this Trust Agreement,
by and between the Trustee and MPWMD as originally executed and as amended by
this First Amendment to Trust Agreement, and as it may from time to time be
further amended or supplemented as provided for herein.
27.
The definition of “Trustee” is amended by deleting the
words “First Trust of California, National Association” and replacing them with
“U.S. Bank National Association.”
28.
The definition of “Water Purchase Agreement” is deleted
in its entirety and replaced with the following:
“Water Purchase Agreement” means the Water Purchase
Agreement, dated as of December 1, 1992, by and among MPWMD, CAWD and PBCSD, as
amended by the First Amendment to Water Purchase Agreement, dated as of
____________ 2004, and as may be further amended from time to time.
29.
The definition of “Water Purchase Price” is amended by
deleting the term “Reclaimed Water” and replacing it with the term “Recycled
Water.”
B.
Notices.
Section 11.14 is hereby amended to read as follows:
All written notices to be given hereunder shall be
given by first-class mail or overnight delivery service to the party entitled
thereto at its address set forth below, or at such other address as such party
may provide to the other party in writing from time to time, namely:
If to MPWMD: Monterey
Peninsula Water
Management District
5 Harris Court, Building G
Monterey, California 93940
P.O. Box 85
Monterey, California 93942-0085
Attn: General Manager
and
David
C. Laredo
De Lay & Laredo
606 Forest Avenue
Pacific Grove, California
93950
If to CAWD: Carmel
Area Wastewater District
3945 Rio Road
P.O. Box 221428
Carmel, California
93922
Attn: General Manager
and
Wellington Law Office
Attn: Robert R. Wellington
857 Cass Street, Suite D
Monterey, California
93940
If to PBCSD: Pebble
Beach Community
Services District
3101 Forest Lake Road
Pebble Beach, California
93953
Attn: General Manager
and
Wellington Law Office
Attn: Robert R. Wellington
857 Cass Street, Suite D
Monterey, California
93940
If to the Credit Bank: Bank of America
901 Main Street, 64th Floor
Dallas, TX
75202-3714
Attn: Portfolio Management – Lodging and Real Estate
If to the Trustee: U.S.
Bank National Association
One California Street, Suite 2550
San Francisco, California
94111
Attn: Portfolio Management – Lodging
If to the Tender Agent: U.S. Bank National Association
One California Street, Suite 2550
San Francisco, California
94111
Attn: Portfolio Management – Lodging
C.
Execution in Counterparts. This First Amendment to Trust Agreement may
be executed in counterparts, each of which shall be an original and all of
which shall together constitute one instrument.
A telecopied signature hereon shall be deemed an original for all
purposes.
D.
Complete Agreement. This First Amendment to Trust Agreement sets
forth the complete agreement of the parties hereto with respect to the subject
matter hereof. Further, except as
specifically described herein, nothing in this First Amendment to Trust
Agreement shall replace or amend the terms of the Original Trust Agreement or
the other COP Documents, which shall remain in full force and effect, except as
otherwise amended from time to time, or be deemed a waiver of any right,
benefit, protection, or assurance under such documents.
E.
Governing Law.
This First Amendment to Trust Agreement shall be governed by,
interpreted, and enforced in accordance with the laws of the State of California.
F.
Effective Date.
This First Amendment to Trust Agreement shall become effective as of
__________, 2004, upon the execution and delivery hereof by the parties hereto
and the filing with the Trustee of the written consent of the Credit Bank. In accordance with Section 9.04 of the
Original Trust Agreement, a copy of this First Amendment to Trust Agreement
shall be promptly mailed to each Rating Agency.
Dated: ____________