CHAPMAN DRAFT DATED OCTOBER 2, 2023
4100954
AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT
Dated as of [______], 2023
between
CITY OF ANAHEIM
and
WELLS FARGO BANK, NATIONAL ASSOCIATION
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TABLE OF CONTENTS
SECTION HEADING PAGE
ARTICLE I DEFINITIONS .................................................................................................2 Section 1.01. Definitions..............................................................................................2 Section 1.02. Accounting Terms and Determinations ...............................................20 Section 1.03. Rates .....................................................................................................21 Section 1.04. Other Interpretive Provisions ...............................................................22 ARTICLE II THE CREDIT ................................................................................................22 Section 2.01. Commitment to Lend ...........................................................................22 Section 2.02. Method of Borrowing Loans; Account to Which Proceeds of Loans to Be Credited .......................................................................23 Section 2.03. The Notes .............................................................................................25 Section 2.04. Maturity of Loans and Term Loans .....................................................26 Section 2.05. Interest Rates ........................................................................................26 Section 2.06. Fees ......................................................................................................27 Section 2.07. Optional Termination or Reduction of Commitment...........................29 Section 2.08. Mandatory Termination or Reduction of Commitment .......................29 Section 2.09. Optional Prepayments ..........................................................................29 Section 2.10. General Provisions as to Payments ......................................................29 Section 2.11. Computation of Interest and Fees ........................................................29 Section 2.12. The Term Loans ...................................................................................30 Section 2.13. Determination of Taxability .................................................................30 Section 2.14. Changed Circumstances .......................................................................31 ARTICLE III CONDITIONS ................................................................................................33 Section 3.01. Effectiveness ........................................................................................33 Section 3.02. Borrowings Other Than Refunding Borrowings During the Revolving Credit Period.................................................................34 Section 3.03. Refunding Borrowings .........................................................................35 Section 3.04. Initial Tax-exempt Loan Borrowings ...................................................36 Section 3.05. No Note Rating; Offering Document ...................................................36 ARTICLE IV REPRESENTATIONS AND WARRANTIES ........................................................36 Section 4.01. Organization, Powers, Etc ....................................................................36 Section 4.02. Authorization; No Contravention ........................................................36 Section 4.03. Binding Effect ......................................................................................37 Section 4.04. Financial Information...........................................................................37 Section 4.05. Litigation ..............................................................................................37 Section 4.06. Employee Benefit Plans, Etc................................................................38 Section 4.07. Status of Notes .....................................................................................38 Section 4.08. Taxes ....................................................................................................38
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Section 4.09. Full Disclosure .....................................................................................39 Section 4.10. No Default ............................................................................................39 Section 4.11. Qualified Obligations ...........................................................................39 Section 4.12. No Sovereign Immunity .......................................................................39 Section 4.13. Rate Increases ......................................................................................39 Section 4.14. Insurance ..............................................................................................39 Section 4.15. Pending Legislation and Decisions ......................................................40 Section 4.16. Incorporation of Representations and Warranties................................40 Section 4.17. Federal Reserve Board Regulations .....................................................40 Section 4.18. Environmental Laws ............................................................................40 Section 4.19. Tax Exempt Status ...............................................................................41 Section 4.20. Compliance with Laws ........................................................................41 Section 4.21. Usury ....................................................................................................41 Section 4.22. Financing Documents to Constitute a Contract and a Legal Obligation ..................................................................................41 Section 4.23. Financing Documents ..........................................................................41 Section 4.24. Anti-Corruption Laws; Anti-Money Laundering Laws and Sanctions .......................................................................................41 ARTICLE V COVENANTS ................................................................................................42 Section 5.01. Information ..........................................................................................42 Section 5.02. Payment of Obligations; Removal of Liens .........................................44 Section 5.03. Maintenance of Property ......................................................................44 Section 5.04. Conduct of Business and Maintenance of Existence ...........................44 Section 5.05. Compliance with Laws ........................................................................44 Section 5.06. Inspection of Property, Books and Records .........................................44 Section 5.07. Use of Proceeds....................................................................................45 Section 5.08. Incorporation of Covenants by Reference; No Amendments; Etc .................................................................................45 Section 5.09. ERISA Matters .....................................................................................46 Section 5.10. Further Assurances...............................................................................46 Section 5.11. Related Obligations ..............................................................................46 Section 5.12. Insurance ..............................................................................................46 Section 5.13. Sovereign Immunity.............................................................................47 Section 5.14. Proceeds of Notes ................................................................................47 Section 5.15. Preservation of Lien .............................................................................47 Section 5.16. Additional Note or Collateral...............................................................47 Section 5.17. Parity Creditors and Covenants ...........................................................47 Section 5.18. Charges ................................................................................................48 Section 5.19. Investment Policy.................................................................................48 Section 5.20. Preservation of Existence, Ownership, Etc. .........................................48 Section 5.21. Certain Information ..............................................................................48 Section 5.22. Consolidation or Merger ......................................................................49 Section 5.23. Accounting Methods and Fiscal Year ..................................................49 Section 5.24. Exempt Status ......................................................................................49
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Section 5.25. Impairment of Rights ...........................................................................49 Section 5.26. Investments ..........................................................................................49 Section 5.27. Swap Contracts ....................................................................................49 Section 5.28. Compliance with Anti-Corruption Laws; Anti-Money Laundering Laws and Sanctions ..........................................................50 ARTICLE VI EVENTS OF DEFAULT ..................................................................................50 Section 6.01. Events of Default .................................................................................50 Section 6.02. Effect of Event of Default ....................................................................53 Section 6.03. Right of Setoff......................................................................................53 ARTICLE VIII INCREASED COSTS AND TAXES ...................................................................54 Section 7.01. Additional Costs...................................................................................54 Section 7.02. Taxes ....................................................................................................55 ARTICLE VIII MISCELLANEOUS ........................................................................................57 Section 8.01. Notices .................................................................................................57 Section 8.02. No Waivers ..........................................................................................58 Section 8.03. Expenses; Documentary Taxes; Indemnification ................................58 Section 8.04. Amendments and Waivers ...................................................................58 Section 8.05. Successors and Assigns........................................................................59 Section 8.06. Governing Law; Venue ........................................................................61 Section 8.07. Counterparts; Integration .....................................................................61 Section 8.08. Judicial Reference ................................................................................61 Section 8.09. Severability ..........................................................................................61 Section 8.10. Government Regulations .....................................................................61 Section 8.11. No Advisory or Fiduciary Relationship ...............................................61 Section 8.12. Fees and Expenses ...............................................................................62 Section 8.13. EMMA Postings...................................................................................62 Section 8.14. Acknowledgment Regarding Any Supported QFCs ............................63 Section 8.15. Amendment and Restatement ..............................................................64 EXHIBIT A — FORM OF NOTICE OF BORROWING
EXHIBIT B — FORM OF NOTICE OF CHANGE OF LENDER ACCOUNT
EXHIBIT C — FORM OF ELECTRIC SYSTEM TAXABLE NOTE
EXHIBIT D — FORM OF ELECTRIC SYSTEM TAXABLE TERM NOTE
EXHIBIT E — FORM OF ELECTRIC SYSTEM TAX-EXEMPT NOTE
EXHIBIT F — FORM OF WATER SYSTEM TAXABLE NOTE
EXHIBIT G — FORM OF WATER SYSTEM TAXABLE TERM NOTE
EXHIBIT H — FORM OF WATER SYSTEM TAX-EXEMPT NOTE
EXHIBIT I — FORM OF OPINION OF NOTE COUNSEL
AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT
This Amended and Restated Revolving Credit Agreement ( as amended, restated, supplemented or otherwise modified from time to time, this “Agreement”) is dated as of [______], 2023, between City of Anaheim, a municipal corporation created and existing pursuant to the laws of the State of California (the “City” ), and Wells F argo Bank, National Association, and its successors and assigns (the “Lender”).
RECITALS
WHEREAS, the City makes expenditures to maintain, repair and operate its Electric System and Water System and to pay the costs of acquisition and construction of additions to and improvements of its Electric System and Water System; and W
HEREAS, Section 1210 of the Charter of the City, as amended by a proposition duly submitted to and approved by the qualified voters at a special municipal election held on November 2, 1982, provides in relevant part as follows:
[T]he City may also sell and issue at any time and from time to time revenue anticipation notes (including renewal revenue anticipation notes) in anticipation of the receipt of revenues of the City’s water and electric utilities; provided that the aggregate principal amount of such revenue anticipation notes outstanding in accordance with their terms at any one time shall not exceed, for each of such utilities, an amount equal to 25% of the gross revenue earned by the respective utility during the immediately preceding fiscal year as set forth in the audited financial statements of such utility for such year.
Such revenue anticipation notes may be sold, issued, and secured in such manner and subject to such terms and conditions as the City Council may prescribe by ordinance; provided that such revenue anticipation notes shall not constitute an indebtedness or general obligation of the City of Anaheim and are not to be secured by the taxing power of said City; and
W
HEREAS, the City and the Lender have previously entered into that certain Revolving Credit Agreement dated as of January 4, 2021 (the “Existing Agreement”), pursuant to which the Lender established a revolving credit facility to provide loans to the City from time to time; WHEREAS, the City Council has determined that it is in the best interests of the City to enter into a new revolving credit agreement for use by either the Electric Syst em or the Water System, and for the indebtedness thereunder to be evidenced by electric revenue anticipation notes and water revenue anticipation notes, as applicable, pursuant to said Section 1210 of the Charter of the City to defray certain of the expenditures made in (i) the maintenance, repair and operation of its Electric System and Water System, (ii) the payment of costs of acquisition and construction of additions to and improvements of its Electric System and Water System, and (iii) the refinancing of indebtedness issued to finance any of the foregoing; and
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WHEREAS, in connection with the foregoing, the City and the Lender have agreed to make certain modifications to the Existing Agreement and for the sake of clarity and convenience will amend and restate the Existing Agreement in its entirety in the form of this Agreement, and this Agreement shall supersede, amend and restate the Existing Agreement in its entirety, and the Lender has agreed to continue to make revolving loans, all upon the terms and conditions set forth in this Agreement.
NOW, THEREFORE in consideration of the mutual promises, covenants and conditions contained herein, the parties agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. (a) Capitalized terms used herein but not otherwise defined in subsection (b) below or elsewhere herein shall have the meanings given to them in the Ordinances or the Resolutions, as applicable.
(b) The following terms, as used herein, have the following meanings:
“Agreement” has the meaning set forth in the recitals hereof. “Affiliate” means any other Person controlling or controlled by or under common control with the City. For purposes of this definition, “control,” when used with respect to any specified Person, means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting rights, membership, the power to appoint members, trustees or directors, by contract or otherwise. “Anti-Corruption Laws” means all laws, rules, and regulations of any jurisdiction from time to time concerning or relating to bribery or corruption, including the United States Foreign Corrupt Practices Act of 1977 and the rules and regulations thereunder and the U.K. Bribery Act 2010 and the rules and regulations thereunder.
“Anti-Money Laundering Laws” means any and all laws, statutes, regulations or obligatory government orders, decrees, ordinances or rules related to terrorism financing, money laundering, any predicate crime to money laundering or any financial record keeping, including any applicable provision of the Patriot Act and The Currency and Foreign Transactions Reporting Act (also known as the “Bank Secrecy Act,” 31 U.S.C. §§ 5311- 5330 and 12 U.S.C. §§ 1818(s), 1820(b) and 1951-1959).
“Applicable Factor” means eighty percent (80%).
“Applicable Spread” means a rate per annum associated with the Level corresponding to the Ratings (for the Electric System or the Water System, as applicable), as specified below.
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LEVEL
MOODY’S
RATING S&P RATING FITCH RATING
APPLICABLE
SPREAD FOR
TAXABLE
LOANS
APPLICABLE
SPREAD FOR
TAX-EXEMPT
LOANS
Level 1 A1 or above A+ or above A+ or above 0.80% 0.64% Level 2 A2 A A 0.95% 0.79%
Level 3 A3 A- A- 1.10% 0.94%
Level 4 Baa1 BBB+ BBB+ 1.35% 1.19%
Level 5 Baa2 BBB BBB 1.70% 1.54%
Level 6 Baa3 or
below
BBB- or
below
BBB- or
below
2.20% 2.04%
In the event of a split in the Ratings for the applicable System (i.e., one of the Ratings is at a different Level than one or more of the other such Ratings), the Applicable Spread shall be based upon the Level in which the lowest Rating appears (for the avoidance of doubt, Level 6 is the lowest Level and Level 1 is the highest Level for purposes of the above pricing grid). In the event that any rating with respec t to any Qualified Obligation for the applicable System is suspended, withdrawn or otherwise unavailable from any Rating Agency (except to the extent that the applicable Rating Agency states in writing that the unavailab ility of such rating is for non- credit related reasons), and so long as such rating shall remain suspended, withdrawn or unavailable, or upon the occurrence and during the continuance of an Event of Default, in each case, the Applicable Spread shall immediately equal the rate set forth in Le vel 6 above plus one percent (1.00%) per annum, without notice to the City ( provided, however, that the Lender will use commercially reasonable efforts to provide notice thereof to the City as promptly as possible thereafter). Any change in the Applicable Spread resulting from a change in the Ratings or any of the other events described in this paragraph shall be and become effective as of and on the date of the announcement of the change in the Ratings or the occurrence of such other event. References to Ratings above are references to rating categories as presently determined by the Rating Agencies and in the event of adoption of any new or changed rating system, the ratings from the Rating Agency in question referred to above shall be deemed to refer to the rating category under the new rating system that most closely approximates the applicable rating category as currently in effect.
The City acknowledges that as of the Effective Date the Applicable Spread is that specified above for Level 1.
“Authorized Person” means each of the Public Utilities General Manager of the City, the Public Utilities Assistant General Manager — Finance and Energy Resources of the City, the City Treasurer, the Finance Director of the City , and any other person so des ignated by the Public Utilities General Manager in writing to the Lender.
“Authorizing Resolution” means Resolution No. [2023- ______] of the City Council, adopted on [_________], 2023.
“Available Tenor” means, as of any date of determination and with respe ct to the then - current Benchmark, as applicable, (a) if such Benchmark is a term rate, any tenor for such Benchmark (or component thereof) that is or may be used for determining the length of an interest
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period pursuant to this Agreement or (b) otherwise, any payment period for interest calculated with reference to such Benchmark (or component thereof) that is or may be used for determining any frequency of making payments of interest calculated with reference to such Benchmark, in each case, as of such date and not including, for the avoidance of doubt, any tenor for such Benchmark that is then-removed from the definition of “Interest Period” pursuant to Section 2.14(c)(iv) hereof. “Base Rate” means, for any day, a fluctuating rate of interest per annum equal to the greatest of (i) the Prime Rate in effect at such time plus one percent (1.0%), (ii) the Federal Funds Rate in effect at such time plus two percent (2.0%), and (iii) seven percent (7.0%). “Base Rate Loan” means a Loan bearing interest at the sum of (i) the Base Rate then in effect plus (ii) the Applicable Spread with respect to such Loan. “Benchmark” means, initially, Daily Simple SOFR; provided that if a Benchmark Transition Event has occurred with respect to Daily Simple SOFR or the then-current Benchmark, then “Benchmark” means the applicable Benchmark Replacement to the extent that such Benchmark Replacement has replaced such prior benchmark rate pursuant to Section 2.14(c)(i) hereof.
“Benchmark Replacement” means, with respect to any Bench mark Transition Event, the sum of: (a) the alternate benchmark rate that has been selected by the Lender giving due consideration to (i) any selection or recommendation of a replacement benchmark rate or the mechanism for determining such a rate by the Rel evant Governmental Body or (ii) any evolving or then-prevailing market convention for determining a benchmark rate as a replacement to the then-current Benchmark for Dollar-denominated syndicated or bilateral credit facilities and (b) the related Benchmark Replacement Adjustment; provided that, if such Benchmark Replacement as so determined would be less than the Floor, such Benchmark Replacement will be deemed to be the Floor for the purposes of this Agreement and the other Financing Documents. “Benchmark Replacement Adjustment” means, with respect to any replacement of the then-current Benchmark with an Unadjusted Benchmark Replacement for any applicable Available Tenor, the spread adjustment, or method for calculating or determining such spread adjustment, (which may be a positive or negative value or zero) that has been selected by the Lender giving due consideration to (a) any selection or recommendation of a spread adjustment, or method for calculating or determining such spread adjustment, f or the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement by the Relevant Governmental Body or (b) any evolving or then- prevailing market convention for determining a spread adjustment, or method for calculating or determini ng such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement for Dollar-denominated syndicated or bilateral credit facilities. “Benchmark Replacement Date” means the earliest to occur of the followin g events with respect to the then-current Benchmark:
(a) in the case of clause (a) or (b) of the definition of “Benchmark Transition Event,” the later of (i) the date of the public statement or publication of information
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referenced therein and (ii) the date on which the administrator of such Benchmark (or the published component used in the calculation thereof) permanently or indefinitely ceases to provide all Available Tenors of such Benchmark (or such component thereof); or (b) in the case of clause (c) of the definition of “Benchmark Transition Event,” the first date on which such Benchmark (or the published component used in the calculation thereof) has been determined and announced by the regulatory supervisor for the administrator of such Benchmark (or such component thereof) to be non- representative; provided, that such non- representativeness will be determined by reference to the most recent statement or publication referenced in such clause (c) and even if any Available Tenor of such Benchmark (o r such component thereof) continues to be provi ded on such date.
For the avoidance of doubt, the “Benchmark Replacement Date” will be deemed to have occurred in the case of clause (a) or (b) with respect to any Benchmark upon the occurrence of the applicable event or events set forth therein with respect to all then -current Available Tenors of such Benchmark (or the published component used in the calculation thereof). “Benchmark Transition Event” means the occurrence of one or more of the following events with respect to the then-current Benchmark:
(a) a public statement or publication of information by or on behalf of the administrator of such Benchmark (or the published component used in the calculation thereof) announcing that such administrator has ce ased or will cease to provide all Available Tenors of such Benchmark (or such component thereof), permanently or indefinitely; provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide an y Available Tenor of such Benchmark (or such component thereof);
(b) a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark (or the published component used in the calculation thereof), the F RB, the Federal Reserve Bank of New York, an insolvency official with jurisdiction over the administrator for such Benchmark (or such component), a resolution authority with jurisdiction over the administrator for such Benchmark (or such component) or a court or an entity with similar insolvency or resolution authority over the administrator for such Benchmark (or such component), which states that the administrator of such Benchmark (or such component) has ceased or will cease to provide all Available Tenors of such Benchmark (or such component thereof) permanently or indefinitely; provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide any Available Tenor of such Benchmark (or such component thereof); or
(c) a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark (or the published component used in the calculation thereof) announcing that all Available Tenors of such Benchmark (or such component thereof) are not, or as of a specified future date will not be, representative.
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For the avoidance of doubt, a “Benchmark Transition Event” will be deemed to have occurred with respect to any Benchmark if a public statement or publication of information set forth above has occurred with respect to each then-current Available Tenor of such Benchmark (or the published component used in the calculation thereof). “Benchmark Transition Start Date” means, in the case of a Benchmark Transition Event, the earlier of (a) the applicable Benchmark Replacement Date and (b) if such Benchmark Transition Event is a public statement or publication of information of a prospective event, the 90th day prior to the expected date of such event a s of such public statement or publication of information (or if the expected date of such prospective event is fewer than ninety (90) days after such statement or publication, the date of such statement or publication). “Benchmark Unavailability Period” means the period (if any) (x) beginning at the time that a Benchmark Replacement Date has occurred if, at such time, no Benchmark Replacement has replaced the then -current Benchmark for all purposes hereunder and under any Financing Document in accordance with Section 2.14(c) hereof and (y) ending at the time that a Benchmark Replacement has replaced the then -current Benchmark for all purposes hereunder and under any Financing Document in accordance with Section 2.14(c) hereof. “Borrowing” means a borrowing hereunder consisting of a Loan to be made to the City by the Lender pursuant to Article II.
“Business Day” means any day other than (i) a Saturday or Sunday, or (ii) other day on which commercial banks are authorized to close under the Laws of, or are in fa ct closed in, the state where the Lender’s Office is located, or (iii) a day on which the New York Stock Exchange is closed, or (iv) a day on which the payment system of the Federal Reserve System is not operational.
“Capital Lease Obligations” of any Person means, subject to Section 1.2(b), the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof , which obligations are required to be classified and accounted for as finance leases on a balance sheet of such Person under GAAP, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP.
“Change in Law” shall mean the occurrence, after the date of this Agreement, of any of the following: (a) the adoption or taking effect of any Law, including, without limitation, any Risk-Based Capital Guidelines, (b) any change in any Law or in the administration, interpretation, implementation or application thereof by any Governmental Authority or (c) the making or issuance of any request, rule, ruling, guideline, regulation or directive (whether or not having the force of law) by any Governmental Authority; provi ded that notwithstanding anything herein to the contrary, (i) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, ruling, guidelines, regulations or directives thereunder or issued in connection therewith and (ii) all requests, rules, rulings, guidelines, regulations or directives promulgated by the Lender for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities shall in each case be
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deemed to be a “Change in Law”, regardless of the date enacted, adopted or issued; provided, that, for the purposes of this definition only, “Governmental Authority” shall mean the government of the United States or any other nation or any political subdivision thereof or any governmental or quasi-governmental entity, including any court, department, commission, board, bureau, agency, administration, central bank, service, district or other instrumentality of any governmental entity or other entity exercising executive, legislative, judicial, taxing, regulatory, fiscal, monetary or administrative powers or functions of or pertaining to government (including any supra -national bodies such as the European Union or European Central Bank), or any arbitrator, mediator or other Person with authority to bind a party at law.
“Charter” means the Charter of the City, as amended from time to time. “City Council” means the City Council of the City, as said Council is constituted from time to time.
“Code” means the Internal Revenue Code of 1986, as amended from time to time, and all rules and regulations from time to time promulgated thereunder. “Commitment” means the amount of $100,000,000, as such amount may be reduced from time to time pursuant to Sections 2.07, 2.08 and 6.01 hereof. “Confidential Information” means any sensitive or confidential information regarding the City, the Lender or any Affiliate of the Lender including, without limitation, address and account information, e-mail addresses, telephone numbers, facsimile numbers, names and signatures of officers, employees and signatories.
“Conforming Changes” means, with respect to either the use or administration of Daily Simple SOFR or the use, administration, adoption or implementation of any Benchmark Replacement, any technical, administrative or operational changes (including changes to the definition of “Base Rate”, the definition of “Business Day,” the definition of “U.S. Government Securities Business Day,” the definition of “Interest Period” or any similar or analogous definition (or the addition of a concept of “interest period”), timing and frequency of determining rates and making payments of interest, timing of borrowing requests or prepayment, conversion or continuation notices, the applicability and length of lookback periods and other technical, administrative or operational matters) that the Lender decides may be appropriate to reflect the adoption and implementation of any such rate or to permit the use and administration thereof by the Lender in a manner substantially consistent with market practice (or, if the Lender decides that adoption of any portion of such market pract ice is not administratively feasible or if the Lender determines that no market practice for the administration of any such rate exists, in such other manner of administration as the Lender decides is reasonably necessary in connection with the administration of this Agreement and the other Financing Documents). “Controlled Group” means all members of a controlled group of corporations and all trades or businesses (whether or not incorporated) under common control which, together with the City or any subsidiary, are treated as a single employer under Section 414 of the Code.
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“Daily Simple SOFR” means, for any day (a “ SOFR Rate Day”), a rate per annum equal to the greater of (a) SOFR for the day (such day, a “SOFR Determination Day” ) that is five (5) U.S. Government Securities Business Days prior to (i) if such SOFR Rate Day is a U.S.
Government Securities Business Day, such SOFR Rate Day or (ii) if such SOFR Rate Day is not a U.S. Government Securities Business Day, the U.S. Government Securities Busi ness Day immediately preceding such SOFR Rate Day, in each case, as such SOFR is published by the SOFR Administrator on the SOFR Administrator’s Website, and (b) the Floor. If by 5:00 p.m. (Eastern Time) on the second (2 nd) U.S. Government Securities Busi ness Day immediately following any SOFR Determination Day, SOFR in respect of such SOFR Determination Day has not been published on the SOFR Administrator’s Website and a Benchmark Replacement Date with respect to Daily Simple SOFR has not occurred, then S OFR for such SOFR Determination Day will be SOFR as published in respect of the first preceding U.S. Government Securities Business Day for which such SOFR was published on the SOFR Administrator’s Website; provided that any SOFR determined pursuant to thi s sentence shall be utilized for purposes of calculation of Daily Simple SOFR for no more than three (3) consecutive SOFR Rate Days. Any change in Daily Simple SOFR due to a change in SOFR shall be effective from and including the effective date of such change in SOFR without notice to the City. “Debt” of any Person means, at any date, without duplication, (i) all obligations of such Person for borrowed money, (ii) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments, (iii) all obligations of such Person to pay the deferred purchase price of property or services, except trade accounts payable arising in the ordinary course of business, (iv) all obligations of such Person as lessee which are capitalized in accorda nce with GAAP, (v) all obligations of such Person to purchase securities (or other property) which arise out of or in connection with the sale of the same or substantially similar securities or property, (vi) all non-contingent obligations of such Person t o reimburse the Lender or other Person in respect of amounts paid under a letter of credit or similar instrument, (vii) all Debt of others secured by a Lien on any asset of such Person, whether or not such Debt is assumed by such Person, (viii) all Debt of others Guaranteed by such Person, and (ix) all obligations of such Person under any Swap Contract.
“Default” means any condition or event which constitutes an Event of Default or which with the giving of notice or lapse of time or both would, unless cured or waived, become an Event of Default.
“Default Rate” shall mean, for any day, and with respect to any Obligation, a rate of interest per annum equal to the Base Rate on such day plus three percent (3.00%). “Determination of Taxability” means and shall be deemed to have occurred on the first to occur of the following:
(i) on the date when the City files any statement, supplemental statement or other tax schedule, return or document which discloses that interest paid or payable on the Tax-exempt Notes is includable, in whole or in part, in the gross income of a Noteholder or any former Noteholder for federal income tax purposes;
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(ii) on the date when the Noteholder or any former Noteholder notifies the City that it has received a written opinion by a nationally recognized firm of attorneys of substantial expertise on the subject of tax- exempt municipal finance to the effect that interest paid or payable on the Tax-exempt Notes is includable, in whole or in part, in the gross income of a Noteholder or any former Noteholder for federal income tax purposes unless, within one hundred eighty (180) days after receipt by the City of such notification from the Noteholder or any former Noteholder, the City shall deliver to the Noteholder and any former Noteholder a ruling or determination letter issued to or on behalf of the City by the Commissioner of the Internal Revenue Service or the Director of Tax- Exempt Bonds of the Tax-Exempt and Government Entities Division of the Internal Revenue Service (or any other government official exercising the same or a substantially similar function from time to time) to the effect that, after taking into consideration such facts as form the basis for the opinion that an Event of Tax ability has occurred, an Event of Taxability shall not have occurred;
(iii) on the date when the City shall be advised in writing by the Commissioner of the Internal Revenue Service or the Director of Tax-Exempt Bonds of the Tax-Exempt and Government Enti ties Division of the Internal Revenue Service (or any other government official exercising the same or a substantially similar function from time to time, including an employee subordinate to one of these officers who has been authorized to provide such advice) that, based upon filings of the City, or upon any review or audit of the City or upon any other ground whatsoever, interest paid or payable on the Tax-exempt Notes is includable, in whole or in part, in the gross income of a Noteholder or any former Noteholder for federal income tax purposes; or
(iv) on the date when the City shall receive notice from the Noteholder or any former Noteholder that the Internal Revenue Service (or any other government official or agency exercising the same or a substant ially similar function from time to time) has assessed as includable in the gross income of such Noteholder or such former Noteholder all or a portion of the interest paid or payable on the Tax-exempt Notes; provided, however, no Determination of Taxability shall occur under subparagraph (iii) or (iv) hereunder unless the City has been afforded the opportunity, at its expense, to contest any such assessment, and, further, no Determination of Taxability shall occur until such contest, if made, has been finally determined; provided further, however, that upon demand from the Noteholder or former Noteholder, the City shall promptly reimburse, but solely from payments made by the City, such Noteholder or former Noteholder for any payments, including any taxes, interest, penalties or other charges, such Noteholder (or former Noteholder) shall be obligated to make as a result of the Determination of Taxability.
“Effective Date” means the date this Agreement becomes effective in accordance with Section 3.01.
“Electric Revenue Anticipation Notes” means the City’s Electric Revenue Anticipation Notes issued pursuant to the Electric System Ordinance, including the Electric System Notes.
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“Electric System” means the entire electric system of the City, including all improvements later constructed or acquired.
“Electric System Loans” means Loans made to p rovide working capital or short -term or interim financing or refinancing thereof for the Electric System. “Electric System Notes” means the Electric System Taxable Note, the Electric System Tax-exempt Note and the Electric System Taxable Term Note (if any). “Electric System Ordinance” means Ordinance No. 5032 of the City Council, as amended and supplemented from time to time in accordance with the terms hereof. “Electric System Financing Documents” means Ordinance No. 5375, Resolution No. 76R-276, Resolution No. 89R -295 and Resolution No. 93R -102, in each case of the City Council.
“Electric System Qualified Obligations” means any Debt of the City currently outstanding or subsequently issued, secured by a first lien on, and payable from, the Electric System Surplus Revenues in the Qualified Obligations Account (as defined in the Electric System Ordinance) of the Surplus Revenue Fund (as defined in the Electric System Ordinance). “Electric System Surplus Revenues” means “Surplus Revenues” as such term is defined in the Electric System Ordinance.
“Electric System Taxable Note” means the Electric System Revolving Credit Subordinate Lender Note of the City substantially in the form set forth in Exhibit C hereto, evidencing the obligation of the City to repay the Electric System Loans which are Taxable Loans and interest thereon, issued under the Electric System Ordinance and in accordance with this Agreement. “Electric System Taxable Term Note” means, to the extent that the Lender makes a Term Loan with respect to the Electric System, the Electric System Taxable Term Note of the City substantially in the form set forth in Exhibit D hereto, evidencing the obligation of the City to repay the Term Loan that refunded the Electric System Loans and interest thereon, issued under the Electric System Ordinance in accordance with this Agreement. “Electric System Tax- exempt Note” means the Electric System Revolving Credit Subordinate Lender Note of the City substantially in the form set forth in Exhibit E hereto, evidencing the obligation of the City to repay the Elec tric System Loans which are Tax -exempt Loans and interest thereon, issued under the Electric System Ordinance and in accordance with this Agreement.
“EMMA” means Electronic Municipal Market Access as provided by the Municipal Securities Rulemaking Board.
“Environmental Claim” means any and all administrative, regulatory or judicial investigations, proceedings, actions, suits, demand letters, claims, liens, notices of noncompliance
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or violation, relating in any way to any Environmental Law (“claims”) or any permit issued under any such Environmental Law, including without limitation (a) any and all claims by Governmental Authorities for enforcement, cleanup, removal, response, remedial, or other actions or damages pursuant to any applicable Environmental Law, and (b) any and all claims by any third party seeking damages, contribution, indemnification, cost recovery, compensation or injunctive relief resulting from Hazardous Materials or arising from alleged injury or threat of injury to health, safety or the environment.
“Environmental Law(s)” means any and all federal, state, local and foreign statutes, laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants, franchises, licenses, agreements or other governmental restrictions relating to air, water or land pollution, wetlands or the protection of the environment or to emissions, discharges or releases of Hazardous Materials into the environment, including, without limitation, ambient air, surface water, ground water, or land, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials or the clean up or other remediation thereof.
“Environmental Liability” means any liability, contingent or otherwise (including any liability for damages, costs of envir onmental remediation, fines, penalties or indemnities), of the City or any of its Affiliates directly or indirectly resulting from or based upon (a) violation of any Environmental Law, (b) the generation, use, handling, presence, transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or threatened release of any Hazardous Materials into the environment or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.
“ERAN Account” has the meaning set forth in the Electric System Ordinance. “ERISA” means the Employee Retirement Income Security Act of 1974, as amended, or any successor statute.
“Event of Default” has the meaning set forth in Section 6.01 hereof. “Event of Taxability” means an event resulting in all or any portion of the interest paid or payable on the Tax-exempt Notes to be includable, in whole or in part, in the gross income of the Noteholder.
“Excess Interest Amount” shall have the meaning assigned to such term in Section 2.05(d)(ii).
“Excluded Tax” shall mean, with respect to the Lender or any Noteholder, (a) taxes imposed on or measured by its overall net income (however denominat ed), and franchise taxes imposed on it (in lieu of net income taxes), by the jurisdiction (or any political subdivision thereof) under the laws of which the Lender or such Noteholder is organized or in which its principal office is located, and (b) any branch profits taxes imposed by the United States or any similar tax imposed by any other jurisdiction in which the City is located.
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“Existing Agreement” has the meaning set forth in the recitals of this Agreement. “Facility Maturity Date” means [_________], 2028, or, if such day is not a Business Day, the next succeeding Business Day unless such Business Day falls in another calendar month, in which case the Facility Maturity Date shall be the next preceding Business Day. “FASB ASC” means the Accounting Standards Codification of the Financial Accounting Standards Board.
“Federal Funds Rate” means, for any day, the rate per annum equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day; provided that: (a) if such day is not a Business Day, then the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day; and (b) if no such rate is so published on such next succeeding Business Day, then the Federal Funds Rate for such day shall be the average rate (r ounded upward, if necessary, to a whole multiple of one one‑hundredth of 1.00%) charged to Wells Fargo Bank, National Association on such day on such transactions as determined by Wells Fargo Bank, National Association. “Financing Documents” means this A greement and (i) in the case of Electric System Loans, the Authorizing Resolution, the Electric System Ordinance, the Electric System Financing Documents and the Electric System Notes or (ii) in the case of Water System Loans, the Authorizing Resolution, t he Water System Ordinance, the Water System Financing Documents and the Water System Notes.
“Fiscal Year” means the fiscal year of the City ending on June 30 of each calendar year or such other annual period as may be prescribed by the City Council with at least six months’ prior written notice to the Lender.
“Fitch” means Fitch, Inc.
“Floor” means a rate of interest equal to zero percent (0.00%) per annum. “FRB” means the Board of Governors of the Federal Reserve System of the United States. “GAAP” means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or such other principles as may be approved by a significant segment of the accounting profession in the United States, that are applicabl e to the circumstances as of the date of determination, consistently applied
“Governmental Authority” shall mean the government of the United States or any other nation or any political subdivision thereof or any governmental or quasi -governmental entity, including any court, department, commission, board, bureau, agency, administration, central bank,
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service, district or other instrumentality of any governmental entity or other entity exercising executive, legislative, judicial, taxing, regulatory, fiscal, monetary or administrative powers or functions of or pertaining to government, or any arbitrator, mediator or other Person with authority to bind a party at law.
“Governmental Claims Act” means California Government Code §§970 et seq. “Guarantee” by any Person means any obligation, contingent or otherwise, of such Person directly or indirectly guaranteeing any Debt or other obligation of any other Person and, without limiting the generality of the foregoing, any obligation, direct or indirect, contingent or otherwise, of such Person (i) to purchase or pay (or advance or supply funds for the purchase or payment at) such Debt or other obligation (whether arising by virtue of partnership arrangements, by agreement to keep -well, to purchase assets, goods, securities or services, to take -or-pay, or to maintain financial statement conditions or otherwise) or (ii) entered into for the purpose of assuring in any other manner the obligee of such Debt or other obligation of the payment thereof or to protect such obligee against loss in respect thereof (in whole or in part); provided that the term Guarantee shall not include endorsements for collection or deposit in the ordinary course of business. The term “Guarantee” used as a verb has a corresponding meaning. “Hazardous Materials” means all explosive or radioactive substances or wastes and all hazardous or toxic substances, contaminants, chemicals, wastes or other pollutants, including petroleum or petroleum distillates, asbestos or asbestos conta ining materials, polychlorinated biphenyls, radon gas, infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to any Environmental Law.
“Indemnified Taxes” shall mean Taxes other than Excluded Taxes. “Interest Payment Date” means with respect to any Loan, the first Business Day of each calendar month, the Loan Maturity Date and such earlier date on which all Loans or the related Loan is required to be paid in full in accordance with the terms hereof or, if applicabl e, on the Term Loan Maturity Date.
“Investment Policy” means the investment policy of the City as posted on the City’s website by the Treasurer of the City as of the Effective Date. “Laws” shall mean any treaty or any federal, regional, state and local law , statute, rule, ordinance, regulation, code, license, authorization, decision, injunction, interpretation, order or decree of any court or other Governmental Authority.
“Lender Affiliate” means the Lender and any Affiliate of the Lender, and includes, without limitation, Wells Fargo Municipal Capital Strategies, LLC, and Wells Fargo Securities (a trade name).
“Lender Rate” means the rate of interest per annum with respect to any Term Loans (i) from and including the date of the extension of the Term Loans up to and including the date which is one hundred eighty (180) days immediately succeeding such date, equal to the Base Rate from
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time to time in effect and (ii) from and after the date which is one hundred and eighty- one (181) days immediately succeeding the date of the extension of the Term Loans, and at all times thereafter, equal to the Base Rate from time to time in effect plus one percent (1.00%); provided, however, that immediately and automatically upon the occurrence of any Event of Default (and without any notice given with respect thereto) and during the continuance of such Event of Default, the “Lender Rate” shall be the Default Rate.
“Lender Transferee” has the meaning set forth in Section 8.05(b) hereof. “Lending Office” means the office of the Lender to which notices of Borrowings and other notices hereunder shall be given and to which payments of amounts due hereunder and under the Electric System Notes and Water System Notes shall be made, which office (and any changes thereto) shall be co mmunicated promptly by the Lender to the City at its address specified in or pursuant to Section 8.01.
“Lien” means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of such asset. For the purposes of this Agreement, the City shall be deemed to own subject to a Lien any asset which it has acquired or holds subject to the interest of a vendor or lessor under any conditional sale agreement, capital lease or other title retention agreement relating to such asset.
“Loan” means a Loan to be made by the Lender in accordance with the applicable Notice of Borrowing or Notice of Refunding Borrowing, as the case may be. The term “Loan” means, individually, an Electric System Loan or a Water System Loan and “Loans” means Electric System Loans or Water System Loans, or a combination thereof, as applicable. “Loan Maturity Date” means the date a Loan shall mature and be due, which date shall be specified by the City in the Notice of Borrowing for such Loan; provided that in no event shall the Loan Maturity Date for a Loan be later than the Facility Maturity Date. “Majority Noteholder” means the Noteholders with a majority of the aggregate ownership interest in advances evidenced by the applicable Electric System Note or Water System Note from time to time. As of the Effective Date, Wells Fargo Bank, National Association, is the Majority Noteholder.
“Margin Stock” shall have the meaning assigned to such term in Regulation U promulgated by the Board of Directors of the Federal Reserve System, as now and hereafter from time to time in effect.
“Material Adverse Effect” means with respect to either System (a) a materially adverse effect upon the such System’s business, assets, liabilities, condition (financial or otherwise), results of operations or business prospects, (b) an adverse effect upon the binding nature, validity or enforceability of the Financing Documents or the City’s Obligations thereunder, (c) an adverse effect on the exclusion of interest with respect to th e Tax-exempt Notes from gross income for purposes of federal income taxation or the exemption of such interest from State personal income taxes or (d) a material adverse effect (i) on the authority or ability of the City to perform any of its
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obligations under any Financing Document or the ability of the City to complete the transactions contemplated hereunder or thereunder or (ii) on the rights, remedies, security or interests of the Lender hereunder or under the other Financing Documents or on the validity, enforceability or perfection of the pledge of or lien on the Pledged Revenues under the Ordinances and the Resolutions or on the priority of the Liens created thereby. “Material Debt” means Debt of the City (other than the Electric System Notes and Water System Notes) payable from or secured by Pledged Revenues on a basis senior to or on a parity with the Notes, arising in one or more related or unrelated transactions, in an aggregate principal amount exceeding $10,000,000, determined separately as to any System. “Maximum Rate” means the maximum rate of interest on the relevant obligation permitted by applicable law.
“Moody’s” means Moody’s Investors Service, Inc.
“Non-Lender Transferee” has the meaning set forth in Section 8.05(b) hereof. “Note Counsel” means Norton Rose Fulbright US LLP , or any other firm of attorneys nationally r ecognized on the subject of tax -exempt municipal finance selected by the City (or selected by the Lender and reasonably acceptable to the City). “Noteholder” means the Lender an d each Lender Transferee or Non -Lender Transferee pursuant to the terms hereof so long a s such Lender Transferee or Non -Lender Transferee owns an interest in the Electric System Notes or the Water System Notes, as applicable, and shall include any holder of Term Loans.
“Notes” means the Electric Revenue Anticipation Notes and the Water Revenue Anticipation Notes, as applicable.
“Notice of Borrowing” has the meaning set forth in Section 2.02(a)(i) hereof. “Notice of Extension” has the meaning set forth in Section 2.01(b) hereof. “Notice of Refunding Borrowing” has the meaning set forth in Section 2.02(a)(ii) hereof. “Obligations” means all amounts payable by the City, and all other obligations to be performed by the City, pursuant to this Agreement and the other Financing Documents (including any amounts to reimburse the Lender for any advances or expenditures by it under any of such documents)
“OFAC” means the U.S. Department of the Treasury’s Office of Foreign Assets Control. “Ordinance” and “Ordinances” means, individually or collectively, as applicable, the Electric System Ordinance and the Water System Ordinance.
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“Other Taxes” has the meaning set forth in Section 7.02(a) hereof. “Parity Creditor” means the obligee of any Par ity Debt. “Parity Debt” means any Debt of the City (including the Notes) currently outstanding or to be issued, secured by a lien on, and payable from, any Pledged Revenues on a parity with the Notes.
“Participant” has the meaning set forth in Section 8.05(b) hereof. “Patriot Act” means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Title III of Pub. L. 107-56 (signed into law October 26, 2001).
“Person” means an individual, a corporation, a partnership, an association, a trust or any other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.
“Plan” means, with respect to the City and each subsidiary at any time, an employee pension benefit plan which is covered by Title IV of ERISA or subject to the minimum funding standards under Section 412 of the Code and either (i) is maintained by a member of the Controlled Group for employees of a member of the Contr olled Group of which the City or such subsidiary is a part, (ii) is maintained pursuant to a collective bargaining agreement or any other arrangement under which more than one employer makes contributions and to which a member of the Controlled Group of which the City or such subsidiary is a part is then making or accruing an obligation to make contributions or has within the preceding five plan years made contributions. “Pledged Revenues” means (a) with respect to the Electric System: (i) the proceeds of Electric Revenue Anticipation Notes issued pursuant to the Electric System Ordinance or subsequent ordinances pursuant to Section 1210 of the Charter; (ii) Electric System Surplus Revenues in the ERAN Account; and any other lawfully available source of funds permitted by Section 1210 of the Charter and determined by subsequent resolution of the City Council to be a source of funds for payment of the Electric Revenue Anticipation Notes ; and (b) with respect to the Water System: (i) the proceeds of Water Revenue Anticipation Notes issued pursuant to the Water System Ordinance or subsequent ordinances pursuant to Section 1210 of the Charter; (ii) Water System Surplus Revenues in the WRAN Account; and any other lawfully available source of funds permitted by Section 1210 of the Charter and determined by subsequent resolution of the City Council to be a source of funds for payment of the Water Revenue Anticipation Notes. “Prime Rate” means on any day, the rate of interest per annum then most recently established by Wells Fargo Bank, National Association as its “prime rate.” Any such rate is a general reference rate of interest, may not be related to any other rate, and may not be the lowest or best rate actually charged by Wells Fargo Bank, National Association to any customer or a favored rate and may not correspond with future increases or decreases in interest rates charged by other lenders or market rates in general, and that Wells Fargo Bank, National Association may make various business or other loans at rat es of interest having no relationship to such rate. If
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Wells Fargo Bank, National Association ceases to establish or publish a prime rate from which the Prime Rate is then determined, the applicable variable rate from which the Prime Rate is determined thereafter shall be instead the prime rate reported in The Wall Street Journal (or the average prime rate if a high and a low prime rate are therein reported), and the Prime Rate shall change without notice with each change in such prime rate as of the date such change is reported. “Provisional Term Loan Maturity Date” means the date that is thirty (30) days following the maturity of the applicable Loan.
“Qualified Obligations” means the Electric System Qualified Obligations and the Water System Qualified Obligations.
“Ratings” means the lowest long-term unenhanced debt rating assigned to the applicable Qualified Obligations by each of Moody’s, Fitch and S&P. “Rating Agency” means each of S&P, Moody’s and Fitch.
“Refunding Borrowing” means a Borrowing which, after application of the proceeds thereof, results in no net increase in the outstanding principal amount of Loans. “Regulation U” means Regulation U of the FRB, as in effect from time to time. “Relevant Governmental Body” means the FRB or the Federal Reserve Bank of New York, or a committee officially endorsed or convened by the FRB or the Federal Reserve Bank of New York, or any successor thereto.
“Resolutions” means the Authorizing Resolution, the Electric System Financing Documents and the Water System Financing Documents.
“Revenue Anticipation Notes” means the Electric Revenue Anticipation Notes and the Water Revenue Anticipation Notes.
“Revenue Secured Debt” means any Debt of the City (including the related Notes) currently outstanding or to be issued, secured by a lien on, and payable from any Pledged Revenues (of the Electric System or the Water System, as applicable) on a parity with or senior to the Notes. “Revolving Credit Period” means the period from and including the Effective Date to and including the Facility Maturity Date.
“Risk-Based Capital Guidelines” shall mean (i) the risk-based capital guidelines in effect in the United States, including transition rules, and (ii) the corresponding capital regulations promulgated by regulatory authorities outside the United States including transition rules, and any amendments to such regulations.
“S&P” means Standard & Poor’s, a business of Standard & Poor’s Financial Services LLC.
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“Sanctioned Country” means at any time, a country, region or territory which is itself (or whose government is) the subject or target of any Sanctions. “Sanctioned Person” means, at any time, (a) any Person listed in any Sanctions-related list of designated Persons maintained by OFAC (including OFAC’s Specially Des ignated Nationals and Blocked Persons List and OFAC’s Consolidated Non-SDN List), the U.S. Department of State, the United Nations Security Council, the European Union, any European member state, H is Majesty’s Treasury, or other relevant sanctions authorit y, (b) any Person operating, organized or resident in a Sanctioned Country, (c) any Person owned or controlled by, or acting or purporting to act for or on behalf of, directly or indirectly, any such Person or Persons described in clauses (a) and (b), incl uding a Person that is deemed by OFAC to be a Sanctions target based on the ownership of such legal entity by Sanctioned Person(s) or (d) any Person otherwise a target of Sanctions, including vessels and aircraft, that are designated under any Sanctions program. “Sanctions” means any and all economic or financial sanctions, sectoral sanctions, secondary sanctions, trade embargoes and restrictions and anti -terrorism laws, including but not limited to those imposed, administered or enforced from time to time by the U.S. government (including those administered by OFAC or the U.S. Department of State), the United Nations Security Council, the European Union, any European member state, H is Majesty’s Treasury, or other relevant sanctions authority in any jurisdiction in which (a) the City or any of its Subsidiaries or Affiliates is located or conducts business, (b) in which any of the proceeds of the Loans will be used, or (c) from which repayment of the Loans will be derived. “SOFR” means a rate equal to the secured overnight financing rate as administered by the SOFR Administrator.
“SOFR Administrator” means the Federal Reserve Bank of New York (or a successor administrator of the secured overnight financing rate). “SOFR Administrator’s Website” means the website of the Federal Reserve Bank of New York, currently at http://www.newyorkfed.org, or any successor source for the secured overnight financing rate identified as such by the SOFR Administrator from time to time. “SOFR Determination Day” has the meaning specified in the definition of “Daily Simple SOFR”.
“SOFR Loan” means any Loan bearing interest at a rate based on Daily Simple SOFR. “Swap Contract” means (a) any and all rate swap transactions, basis swaps, total return swaps, credit derivative transactions, forward rate transactions, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, cap transactions, floor transactions, collar transactions, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or
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governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement (any such master agreement, together with any related schedules, a “Master Agreement”), including any such obligations or liabilities under any Master Agreement. “System” or “Systems” means the Electric System and the Water System, as applicable. “Taxable Date” means the date on which interest on the Tax -exempt Notes is first includable in gross income of the Noteholder (including, without limitation, any previous Noteholder) thereof as a result of an Event of Taxability as such a date is established pursuant to a Determination of Taxability.
“Taxable Loan” means a Loan the interest on which is not excluded from gross income for federal income tax purposes.
“Taxable Rate” has the meaning assigned to such term in Section 2.05(a) hereof. “Taxes” shall mean all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, fines, additions to tax or penalties applicable thereto.
“Tax-exempt Loan” means a Loan the interest on which is excluded from gross income for federal income tax purposes.
“Tax-exempt Notes” means the Electric System Tax-exempt Notes and the Water System Tax-exempt Notes.
“Term Loans” has the meaning set forth in Section 2.12(a). “Term Loan Maturity Date” means the date that is three years after the making of the Term Loan(s) hereunder, or such earlier date as the Term Loans become due and payable by the terms hereof.
“Termination Date” means the Facility Maturity Date or, if earlier, the date on which th e Commitment is terminated or permanently reduced to zero in accordance with the terms hereof. “Unadjusted Benchmark Replacement” means the applicable Benchmark Replacement excluding the related Benchmark Replacement Adjustment. “U.S. Government Securities Business Day” means any day except for (a) a Saturday, (b) a Sunday or (c) a day on which the Securities Industry and Financial Markets Association recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in United States government securities ; provided that for purposes of notice requirements in Sections 2.02(a) and 2.09 hereof, in each case, such day is also a Business Day.
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“Water Revenue Anticipation Notes” means the City’s Water Revenue Anticipation Notes issued pursuant to the Water System Ordinance, including the Water System Notes. “Water System” means the entire water system of the City, including all improvements later constructed or acquired.
“Water System Loans” means Loans made to p rovide working capital or short -term or interim financing or refinancing thereof for the Water System. “Water System Notes” means the Water System Taxable Note, the Water System Tax-exempt Note and the Water System Taxable Term Note (if any). “Water System Ordinance” means Ordinance No. 5376 of the City Council, as amended and supplemented from time to time in accordance with the terms hereof. “Water System Financing Documents” means Resolution No. 83R -169, Resolution No. 90R-293, Resolution No. 92R -59 and Resolution No. 2013- 034, in each case of the City Council.
“Water System Qualified Obligations” means any Debt of the City currently outstanding or subsequently issued, secured by a first lien on, and payable from, the Water System Surplus Revenues in the Qualified Obligations Account (as defined in the Water System Ordinance) of the Surplus Revenue Fund (as defined in the Water System Ordinance). “Water System Surplus Revenues” means “Surplus Revenues,” as such term is defined in the Water System Ordinance.
“Water System Taxable Note” means the Water System Revolving Credit Subordinate Lender Note of the City substantially in the form set forth in Exhibit F hereto, evidencing the obligation of the City to repay the Water System Loans which are Taxable Loans and interest thereon, issued under the Water System Ordinance and in accordance with this Agreement. “Water System Taxable Term Note” means, to the extent that the Lender makes a Term Loan with respect to the Water System, the Water System Taxable Term Note of the City substantially in the form set forth in Exhibit G hereto, evidencing the obligation of the City to repay the Term Loan that refunded the Water System Loans and interest thereon, issued under the Water System Ordinance in accordance with this Agreement. “Water System Tax-exempt Note” means the Water System Revolving Credit Subordinate Lender Note of the City substantially in the form set forth in Exhibit H hereto, evidencing the obligation of the City to repay the Water System Loans which are Tax-exempt Loans and interest thereon, issued under the Water System Ordinance and in accordance with this Agreement. “WRAN Account” has the meaning set forth in the Water System Ordinance.
Section 1.02. Accounting Terms and Determinations.
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(a) All accounting terms not specifically or completely defined herein shall be construed in conformity with, and all financial data (including financial ratios and other financial calculations) required to be submitted pursuant to this Agreement shall be prepared in conformity with GAAP, applied on a consistent basis, as in effect from time to time and in a manner consistent with that used in preparing the audited financial statements required by Section 5.01(a), except as otherwise specifically prescribed herein. Notwithstanding the foregoing, for purposes of determining compliance with any covenant (including the computation of any financial covenant) contained herein, Debt of the City and its Subsidiaries shall be deemed to be carried at 100% of the outstanding principal amount thereof, and the effects of FASB ASC 825 and FASB ASC 470- 20 on financial liabilities shall be disregarded.
(b) If at any time any change in GAAP would affect the computation of any financial ratio or requirement set forth in any Financing Document, and the City or the Lender shall so request, the Lender and the City shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP; provided that, until so amended, (i) such ratio or requirement shall continue to be computed in accordance with GAAP prior to such change therein and (ii) the City shall provide to the Lender financial statements and other documents required under this Agreement or as reasonably requested hereunder setting forth a reconciliation between calculations of such ratio or requirement made before and after giving effect to such change in GAAP; provided, further that (A) all obligations of any Person that are or would have been treated as operating leases for purposes of GAAP prior to the effectiveness of FASB ASC 842 shall continue to be accounted for as operating leases for purposes of all financial definitions and calculations for purpose of this Agreement (whether or not such operating lease obligations were in effect on such date) notwithstanding the fact that such obligations are required in accordance with FASB ASC 842 (on a prospective or retroactive basis or otherwise) to be treated as Capital Lease Obligations in the financial statements and (B) all financial statements delivered to the Lender hereunder shall contain a schedule showing the modifications necessary to reconcile the adjustments made pursuant to clause (A) above with such financial statements.
Section 1.03. Rates. The Lender does not warrant or accept any responsibility for, and shall not have any liability with respe ct to, ( a) the continuation of, administration of, submission of, calculation of or any other matter related to the Benchmark, any component definition thereof or rates referred to in the definition thereof , or with respect to any alternative, successor or replacement rate thereto (including any Benchmark Replacement) , including whether the composition or characteristics of any such alternative, successor or replacement rate (including any Benchmark Replacement), as it may or may not be adjusted pursuant to Section 2.14(c) hereof, will be similar to, or produce the same value or economic equivalence of, or have the same volume or liquidity as, the Benchmark or any other Benchmark prior to its discontinuance or unavailability, or (b) the effect, implementation or composition of any Conforming Changes. The Lender and its Affiliates or other related entities may engage in transactions that affect the calculation of the Benchmark, any alternative, successor or replacement rate (including any Benchmark Replacement) or any relevant adjustments thereto and such transactions may be adverse to the City. The Lender may select information sources or services in its reasonable discretion to ascertain the Benchmark, any component definition thereof or rates referred to in the definition thereof, in each case pursuant to the terms of this Agreement, and shall have no liability to the City or any other person or entity for damages of any kind, including direct or indirect, special, punitive,
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incidental or consequential damages, costs, losses or expenses (whether in tort, contract or otherwise and whether at law or in equit y), for any error or calculation of any such rate (or component thereof) provided by any such information source or service.
Section 1.04. Other Interpretive Provisions . With reference to this Agreement, unless otherwise specified herein:
(a) The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.” The word “ will” shall be construed to have the same meaning and effect as the word “shall .” Unless the context requires otherwise, (i) any definition of or reference to any agreement, instrument or other document shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herei n), (ii) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (iii) the words “ hereto,” “ herein,” “hereof ” and “hereunder,” and words of similar import when used in this Agreement shall be construed to refer to such document in its entirety and not to any particular provision thereof, (iv) all references in this Agreement to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement in which such references appear, (v) any reference to any law shall include all statutory and regulatory provisions consolidating, amending, replacing or interpreting such law and any reference to any law or regulation shall, unless otherwise specified, refer to such law or regulation as amended, modified or supplemented from time to time, and (vi) the words “ asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights. (b) In the computation of periods of time from a specified date to a later specified date, the word “ from” means “from and including;” the words “ to” and “until ” each mean “to but excluding;” and the word “through” means “to and including.” (c) Section headings herein are included for convenience of reference only and shall not affect the interpretation of this Agreement.
A
RTICLE II
THE CREDIT
Section 2.01. Commitment to Lend.
(a) Loans. During the Revolving Credit Period, the Lender agrees, on the terms and conditions set forth in this Agreement, to make revolving loans to the City pursuant to this Section from time to time in amounts such that the aggregate principal amount of Loans by the Lender at any one time outstanding shall not exceed the a mount of the Commitment. Within the foregoing limit, the City may borrow under this subsection (a), repay or, to the extent permitted by
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Section 2.09, prepay, the Loans and re -borrow at any time during the Revolving Credit Period under this subsection (a).
(b) Extension of Revolving Credit Period. (i) No later than 120 days prior to the Facility Maturity Date, the City may request the Lender and the Noteholders to extend the then current Facility Maturity Date for a period of no less than 365 days. If t he Lender and each Noteholder, in their sole discretion, elects to extend the Facility Maturity Date then in effect, they shall deliver to the City within 60 days of receiving said request a written notice of extension (herein referred to as a “Notice of Extension” ) designating the date to which the Facility Maturity Date is being extended. Such extension of the Facility Mat urity Date shall be effective, after receipt of such Notice of Extension, on the Business Day following the date of delivery of such Notice, and thereafter all references in this Agreement to the Facility Maturity Date shall be deemed to be references to the date designated as such in the most recent Notice of Extension delivered to the City. Any date to which the Facility Maturity Date has been extended in accordance with this Section 2.01(b) may be extended in like manner. If the Lender or any Noteholder fails to provide the City with a Notice of Extension as provided hereinabove, the Lender and Noteholders shall be deemed not to have consented to the City’s request. The Lender shall use commercially reasonable efforts to promptly notify the City if it and the Noteholders will not extend the Facility Maturity Date, but the Lender’s or any Noteholder’s failure to do so shall be deemed a denial of the extension request.
(ii) Notwithstanding the foregoing, it is understood and agreed that the foregoing provisions are intended for the convenience of the parties only and shall in no respect prohibit the parties from agreeing to extend the Revolving Credit Period under other circumstances or at other times. In the event the Revolving Credit Period is extended under any other circumstances, the Lender shall give prompt written notice thereof to the City. (iii) If the Revolving Credit Period is extended, whether pursuant to subsection (i) above or otherwise, the City shall be deemed to have made the representations and warranties contained herein on the date on which the Revolving Credit Period is so extended.
Section 2.02. Method of Borrowing Loans; Account to Which Proceeds of Loans to Be Credited. (a)(i) In the case of any Borrowing that is not a Refunding Borrowing, the City shall give the Lender notice in the form of Exhibit A hereto, executed by an Authorized Person of the City (a “Notice of Borr owing”), by not later than 11:00 a.m. (Los Angeles time) at least five (5) U.S. Government Securities Business Days before each Borrowing (or such shorter time as the Lender may agree), specifying:
(A) the date of such Borrowing, which shall be a Business Day, (B) the aggregate amount of such Borrowing (which shall not exceed the difference between (i) the amount of the Commitment and (ii) the aggregate principal amount of Loans then outstanding),
(C) whether such Borrowing (1) is for the Electric System or the Water System, and (2) will be a Taxable Loan or a Tax-exempt Loan, and
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(D) the Loan Maturity Date of such Loan.
(ii) In the case of any Borrowing that is a Refunding Borrowing, the City shall give the Lender notice in the form of Exhibit A hereto, executed by an Authorized Persons of the City (a “Notice of Refunding Borrowing” ), by not later than 11:00 a.m. (Los Angeles time) at least five (5) U.S. Government Securities Business Days before each Refunding Borrowing (or such shorter time as the Lender may agree), specifying:
(A) the date of such Borrowing, which shall be a Business Day, (B) the aggregate amount of such B orrowing (which shall not exceed the aggregate principal amount of the Loans to be paid or prepaid on such date), (C) whether such Borrowing (1) is for the Electric System or the Water System and (2) will be a Taxable Loan or a Tax-exempt Loan, and (D) the Loan Maturity Date of such Loan.
(iii) Notwithstanding the provisions of clause (ii) of this Section, if during the Revolving Credit Period the City shall not have timely given the Lender the notice required by said clause (ii) with respect to any Loa n that is coming due ( i.e., notice that it will repay said loan through a Refunding Borrowing), and if it has not otherwise indicated to the Lender that it intends to repay said Loan from its own funds, then:
(A) it shall be deemed that the City has reque sted a Refunding Borrowing to repay such Loan with a Loan Maturity Date of the lesser of 61 days or the Facility Maturity Date;
(B) if such Loan was a Taxable Loan, then the Loan constituting such Refunding Borrowing shall be a Taxable Loan and if such Loan was a Tax-exempt Loan, then the Loan constituting such Refunding Borrowing shall be a Tax-exempt Loan; and (C) if such Loan was an Electric System Loan, then the Loan constituting such Refunding Borrowing shall be an Electric System Loan; and if such L oan was a Water System Loan, then the Loan constituting such Refunding Borrowing shall be a Water System Loan.
(iv) Reserved.
(b) If the Lender makes a new Loan hereunder on a day on which the City is to repay all or any part of an outstanding Loan, unless the City shall otherwise repay the Loan coming due on such date, the Lender shall apply the proceeds of its new Loan to make such repayment and in such event only an amount equal to the difference (if any) between the amount being borrowed and the amount being repaid shall be made available by the Lender to the City or remitted by the City to the Lender, as the case may be.
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(c) Subject to the provisions of subsection (b) of this Section 2.02, by not later than 3:00 p.m. (Los Angeles time) on the date of each Borrowing, the Lender shall wire transfer, in federal or other immediately available funds, the proceeds of such Borrowing to the following account: Wells Fargo Bank, National Association: ABA #: 121-000248; Credit to: City of Anaheim; Account #: 4100055599; provided, however, that the City may, from time to time, change such account by written notice to the Lender, executed by an Authorized Person of the City, given to the Lender at its address referred to in Section 8.01. (d) The Lender shall not be obligated to honor more than one Borrowing on any Business Day.
(e) Each Loan shall be in the principal amount requested by the City pursuant to each notice in the form of Exhibit A hereto but in any event in a minimum principal amount of $1,000,000 or such greater amount which is an integral multiple of $100,000; provided, however, that the Lender shall not be obligated to make more than seven (7) Loans to the City in any calendar year, nor more than one Loan to the City in any calendar day (excluding Loans with respect to Refunding Borrowings).
Section 2.03. The Notes. (a) The Loans which are Taxable Loans shall be evidenced by a single corresponding Taxable Note for each System payable to the Lender in an amount equal to the Commitme nt, and the Loans which are Tax -exempt Loans shall be evidence d by a single corresponding Tax-exempt Note for each System payable to the Lender in an amount equal to the Commitment. Notwithstanding anything herein to the contrary, the aggregate principal amount of all Loans at any one time outstanding hereunder with respect to the Electric System Notes and the Water System Notes shall not exceed the amount of the Commitment. (b) Each reference in this Agreement to the “Electric System Notes” or “Water System Notes” shall be deemed to refer to and include any or all of such Notes, respectively, as the context may require.
(c) The Lender shall record the date, amount, type and maturity of each Loan made by it and the date and amount of each payment of principal made by or on behalf of the City with respect thereto, and prior to any transfer of an Electric System Note or Water System Note shall endorse on the schedule forming a part thereof appropriate notations to evidence the foregoing information with respect to each Loan then outstanding evidenced by such Note; provided that the failure of the Lender to make any such recordation or endorsement, or any error therein, or failure to submit any such notations to the City shall not affect the obligations of the City hereunder or under such Note. The Lender is hereby irrevocably authorized by the City so to endorse each Electric System Note and Water System Note and to attach to and make a part of each such Note a continuation of any such schedule as and when required.
(d) The City’s obligations to repay each Loan and to pay interest thereon as provided herein shall be evidenced and secured by the related Note, and the City shall pay amounts under the related Note on each date on which the City is required to make a principal payment on the related Loan in an amount equal to the Loan payment due on such date. The payment of the principal of and interest on a Note shall constitute paym ent of the principal of and interest on the
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related Loans and the payment of the principal of and interest on the Loans shall constitute the payment of and principal and interest on the related Note and the failure to make any payment on any Loan when due shall be a failure to make a payment on the related Note and the failure to make any payment on the related Note when due shall be a failure to make a payment on the related Loan.
Section 2.04. Maturity of Loans and Term Loans . (a) Each Loan included in any Borrowing shall mature, and the principal amount thereof (together with all accrued and unpaid interest therein) shall be due and payable by the City, on the Loan Maturity Date for such Loan or such earlier date on which all Loans or the related Loans become due and payable in accordance with the terms hereof ; provided, however, that all Loans shall be due and payable in full on the Facility Maturity Date.
(b) The Term Loans shall matur e, and the principal amount thereof (together with all accrued and unpaid interest thereon) shall be due and payable by the City on the Term Loan Maturity Date.
Section 2.05. Interest Rates. (a) Subject to subsections (d) and (e) below, and Section 6.02 hereof, each Loan which is a Taxable Loan shall bear interest on the outstanding principal amount thereof, for each day from the date such Loan is made until it becomes due, at a rate per annum equal to the sum of (i) Daily Simple SOFR plus (ii) the Applicable Spread for the type of Loan (the “Taxable Rate”). Such interest shall be payable by the City on each Interest Payment Date and on the Loan Maturity Date.
(b) Subject to subsections (d) and (e) below, and Section 6.02(e) hereof, each Loan which is a Tax-exempt Loan shall bear interest on the outstanding principal amount thereof, for each day from the date such Loan is made until it becomes due, at a rate per annum equal to the sum of (i) the product of (A) Daily Simple SOFR times (B) the Applicable Factor, plus (ii) the Applicable Spread for the type of Loan. Such interest shall be payable by the City on each Interest Payment Date and on the Loan Maturity Date.
(c) The Lender shall determine each interest rate applicable to the Loans hereunder. The Lender shall give prompt notice to the City by facsimile or electronic mail of each rate of interest so determined, and its determination thereof shall be conclusive in the absence of manifest error. (d) (i) If the amount of interest payable for any period in accordance with terms hereof exceeds the amount of interest that would be payable for such period had interest for such period been calculated at the Maximum Rate, then interest for such period shall be payable in an amount calculated at the Maximum Rate for such period.
(ii) Any interest that would have been due and payable for any period but for the operation of Section 2.05(d)(i) shall accrue and be payable as provided in this paragraph (ii) and shall, less interest actually paid to the Lender for such period, constitute the “Excess Interest Amount.” If there is any accrued and unpaid Excess Interest Amount as of any date then the principal amount with respect to which interest is payable shall bear
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interest at the Maximum Rate, until the earlier of repayment of such principal or payment to the Lender of the entire Excess Interest Amount.
If there is any accrued and unpaid Excess Interest Amount as of any Interest Payment Date, then, on the current and each subsequent Interest Payment Date, interest shall be paid at the Maximum Rate rather than the otherwise applicable rate until the earlier of (A) payment to the Lender of the entire accrued Excess Interest Amount or (B) the Facility Maturity Date. Notwithstanding the foregoing, all unpaid Excess Interest Amount shall be, to the extent permitted by law, due and payable by the City as a fee on the Facility Maturity Date (or if such Excess Interest Amount relates to Term Loans, on the Term Loan Maturity Date).
(iii) Notwithstanding the foregoing, on the date on which no principal amount hereunder remains unpaid, the City shall pay to the Lender a fee equal to any accrued and unpaid Excess Interest Amount.
(e) Subject to Section 2.14 hereof, the Term Loans shall bear interest on the outstanding principal amount thereof, for each date from the date of extension of such Term Loan until it becomes due, at a rate per annum equal to the Lender Rate. Such interest shall be payable on each Interest Payment date and on the Term Loan Maturity Date.
Section 2.06. Fees. (a) The City agrees to pay to the Lender a n onrefundable fee (the “Commitment Fee”) accruing at a rate per annum on the daily unused amount of the Commitment, associated with the level corresponding to the lowest Ratings for either the Electric System or the Water System ( i.e., the Ratings of the El ectric System or the Water System that result in the application of the highest numerical Level/Commitment Fee), as specified below:
L
EVEL
MOODY’S
RATING S&P RATING FITCH RATING
COMMITMENT
FEE
Level 1 A1 or above A+ or above A+ or above 0.27%
Level 2 A2 A A 0.32%
Level 3 A3 A- A- 0.37%
Level 4 Baa1 BBB+ BBB+ 0.52%
Level 5 Baa2 BBB BBB 0.77%
Level 6 Baa3 or below BBB- or below BBB- or below 1.12% In the event of a split in the Ratings (i.e., one of the Ratings is at a different Level than one or more of the other Ratings), the Commitment Fee shall be based upon the Level in which the lowest Rating appears (for the avoidance of doubt, Level 6 is the lowest Level and Level 1 is the highest Level for purposes of the above pricing grid). In the event that any rating with respect to any Qualified Obligation of either the Electric System or the Water System, is suspended, withdrawn or otherwise unavailable from any Rating Agency (except to the exte nt that the applicable Rating Agency states in writing that the unavailab ility of such rating is for non- credit
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related reasons), and so long as such rating shall remain suspended, withdrawn or unavailable, or upon the occurrence and during the continuance of an Event of Default, in each case, the Commitment Fee shall immediately equal the rate set forth in Level 6 above plus one percent (1.00%) per annum, without notice to the City ( provided, however, that the Lender will use commercially reasonable effort s to provide notice thereof to the City as promptly as possible thereafter). Any change in the Commitment Fee resulting from a change in the Ratings or any of the other events described in this paragraph shall be and become effective as of and on the date of the announcement of the change in the Ratings or the occurrence of such other event. References to ratings above are references to rating categories as presently determined by the Rating Agencies and in the event of adoption of any new or changed rati ng system, the ratings from the Rating Agency in question referred to above shall be deemed to refer to the rating category under the new rating system that most closely approximates the applicable rating category as currently in effect.
The City acknowledges that as of the Effective Date the Commitment Fee is that specified above for Level 1.
The Commitment Fee shall be payable quarterly in arrears on the first Business Day of each March, June, September and December (commencing on [December 1, 2023], for the period from and including the Effective Da te to and including [ November 30 , 2023] ), and on the Termination Date. The Commitment Fee shall be c alculated on the basis of a 360- day year and actual days elapsed.
(b) Upon each amendment hereof, consent or waiver hereunder or under any Financing Document, the City shall pay or cause to be paid reasonable attorneys’ fees and expenses, if any, incurred by the Lender in processing such amendment, consent or waiver and a fee to the Lender of $2,500 (or such higher amount as the City and the Lender may agree) for each such amendment, consent or waiver.
(c) If the City shall fail to pay any amount payable under this Section 2.06 as and when due, each such unpaid amount shall bear interest for each day from and including the date it was due until paid in full at the applicable Default Rate.
(d) The City shall pay within thirty (30) days after demand:
(i) all reasonable costs and expenses of the Lender in connection with the enforcement (whether by means of legal proceedings or otherwise) of any of its rights under this Agreement, the other Financing Documents and such other documents which may be delivered in connection therewith;
(ii) the reasonable fees and out -of-pocket expenses for counsel or other reasonably required consultants to the Lender in connection with advising the Lender as to its rights and responsibilities under this Agreement and the other Financing Documents or in connection with Events of Default, potential Events of Default and responding to requests from the City for approvals, consents and waivers; and
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(iii) any amounts advanced by or on behalf of the Lender to the extent required to cure any Default, Event of Default or event of nonperformance hereunder or any Financing Document, together with interest at the Default Rate. (e) Any principal of, and to the extent permitted by applicable law, any interest on, the Loans and any other sum payable hereunder, which is not paid when due shall bear interest, from the date due and payable until paid, payable on demand, at a rate per annum equal to the Default Rate.
Section 2.07. Optional Termination or Reduction of Commitment . During the Revolving Credit Period, the City may, upon at least three Business Days’ notice to the Lender, (i) terminate the Commitment at any time, if no Loans are outstanding at such time, or (ii) ratably reduce the Commitment from time to time by an aggregate amount of $1,000,000 or any l arger integral multiple of $1,000,000, which amount shall be not greater than the amount of the Commitment in excess of the aggregate outstanding principal amount of the Loans.
Section 2.08. Mandatory Termination or Reduction of Commitment. (a) The Commitment shall terminate on the Termination Date, and any Loans then outstanding (together with accrued interest thereon and all other amounts payable hereunder) shall be due and payable on such date. (b) If at any time an Event of Default for any System or for all Systems shall have occurred and be continuing, the Lender may deliver a written notice to that effect to the City, and the Commitment shall immediately terminate as to the System(s) to which the Event(s) of Default relates.
Section 2.09. Optional Prepayments. The City may, upon at least five (5) U.S. Government Securities Business Days’ notice to the Lender, prepay any Borrowing in whole at any time, or from time to time in part in amounts aggregating $1,000,000 or any larger integral multiple of $100,000, by paying the principal amount to be prepaid together with accrued interest thereon to the date of prepayment.
Section 2.10. General Provisions as to Payments . The City shall make each payment of principal of, and interest on, the Loans and Term Loans and of fees hereunder, not later than 3:00 p.m. (Los Angeles time) on the date when due, in federal or other funds immediately available in Los Angeles, to the L ender by means of wire transfer of funds to the account referred to in Section 8.01; provided, however, that the Lender may, from time to time, change such account by written notice to the City , given to the City at its address referred to in Section 8.01. Whenever any payment of principal of, or interest on, the Loans or Term Loans or of fees shall be due on a day which is not a Business Day, the date for payment thereof shall be extended to the next succeeding Business Day. If the date for any payment of principal is extended by operation of law or otherwise, interest thereon shall be payable for such extended time.
Section 2.11. Computation of Interest and Fees. Interest and fees shall be calculated on the basis of a 360-day year based upon the actual number of days elapsed (or, at the Lender’s option, upon prior written notice from the Lender to the City, on the basis of a 360-day year consisting of twelve 30-day months).
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Section 2.12. The Term Loans . (a) Generally. On the Facility Maturity Date, so long as (i) no Default or Event of Default shall have occurred and be continuing, or would result therefrom, and (ii) the representations and warranties of the City set forth in Article IV hereof are true and correct in all material respects as if made as of such date, the Electric System Loans and the Water System Loans, if any, maturing on such date shall be automatically converted to term loans (each a “Term Loan” and collectively the “Term Loans” ), the proceeds of which shall be deemed to have repaid the Loans and the City ’s obligations under the related Notes. The Term Loans shall be evidenced by the Electric System Taxable Term Note and the Water System Taxable Term Note, as applicable, and the Lender’s receipt of such Note(s) shall be a condition precedent to extension of the Term Loan(s). The Term Loans may be repaid in whole or in part on any Business Day upon prior written notice from the City to the Lender. (b) Repayment. The Term Loans shall be payable in full on the Provisional Term Loan Maturity Date; provided, however, that if (i) the City delivers a written request for extension, and the Lender approves such request prior to the Provision Term Loan Maturity Date, and (ii) on the Provisional Term Loan Maturity Date (A) no Default or Event of Default shall have occurred and be continuing, or would result therefrom, and ( B) the representations and warranties of the City set forth in Article IV hereof are true and correct as if made as of such date, then t he Term Loans shall be payable in twelve (12) equal (as nearly as possible) quarterly installments on the first Business Day of each January, April, July and October, beginning with the first such date to occur after the Provisional Term Loan Maturity Date; provided, however, that, notwithstanding anything contained herein to the contrary, the entire principal amount of the Term Loans, plus accrued and unpaid interest thereon, shall be due and payable in full on the Term Loan Maturity Date.
Section 2.13. Determination of Taxability. (a) In the event a Determination of Taxability occurs, to the extent not payable to the Lender hereunder , the City hereby agrees to pay to the Lender or any other Noteholder on demand therefor (i) an amount equal to the difference between (A) the amount of interest that would have been paid to the Lender or any other Noteholder on the Tax-exempt Loans during the period for which interest on the Tax-exempt Notes is included in the gross income of the Lender or any other Noteholder if the Tax-exempt Notes had borne interest at the Taxable Rate, beginning on the Taxa ble Date (the “Taxable Period”), and (B) the amount of interest actually paid to the Lender or any other Noteholder during the Taxable Period, and (ii) an amount equal to any interest, penalties or charges owed by the Lender or any other Noteholder as a result of interest on the Tax-exempt Notes becoming included in the gross income of the Lender or any other Noteholder , together with any and all attorneys ’ fees, court costs, or other out-of-pocket costs incurred by the Lender or any other Noteholder in connection therewith; (b) Subject to the provisions of paragraph (c) below, the Lender or any other Noteholder shall afford the City the opportunity, at the City’s sole cost and expense, to contest (i) the validity of any amendment to the Code which causes the interest on the Tax -exempt Notes to be included in the gross income of the Lender or any other Noteholder or (ii) any challenge to the validity of the tax exemption with respect to the interest on the Tax-exempt Notes, including the right to direct the necessary litigation contesting such challenge (including administrative audit appeals) ; provided that, in no event shall a Noteholder be required to make available its tax returns (or any other information relating to its taxes that it deems confidential) to the City or any other Person; and
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(c) As a condition precedent to the exercise by the City of its right to contest set forth in paragraph (b) above, the City shall, on demand, immediately reimburse the Lender or any other Noteholder for any and all expenses (including attorneys’ fees for services that may be required or desirable, as determined by the Lender or any other Noteholder in its sole discretion) that may be incurred by the Lender or any other Noteholder in connection with any such contest, and shall, on demand, immediately reimburse the Lender or any other Noteholder for any and all penalties or other charges payable by the Lender or any other Noteholder for failure to include such interest in its gross income.
(d) Survival. Without prejudice to the survival of any other agreement of the City hereunder, the agreements and obligations of the City contained in this Section shall survive the termination of this Agreement and the payment in full of the Tax-exempt Notes and the obligations of the City thereunder and hereunder.
Section 2.14. Changed Circumstances . Notwithstanding anything to the contrary contained in this Agreement or in any other Financing Document, the City agrees as follows:
(a) Circumstances Affecting Benchmark Availability. Subject to clause (c) below, in connection with any request for a S OFR Loan or otherwise, if for any reason (i) the Lender shall determine (which determination shall be conclusive and binding absent manifest error) that reasonable and adequate means do not exist for ascertaining Daily Simple SOFR pursuant to the definition thereof or (ii) the Lender shall determine (which determination shall be conclusive and binding absent manifest error) that Daily Simple SOFR does not adequately and fairly reflect the cost to the Lender of making or maintaining such SOFR Loans, then, in each case, the Lender shall promptly give notice thereof to the City . Upon notice thereof by the Lender to the City , any obligation of the Lender to make SOFR Loans shall be suspended (to the extent of the affected SOFR Loans) until the Lender revokes such notice. Upon receipt of such notice, (A) the City may revoke any pending request for a borrowing of SOFR Loans (to the extent of the affected SOFR Loans) or, failing that, the City will be deemed to have converted any such request into a request for a borrowing to Base Rate Loans in the amount specified therein and (B) any outstanding affected SOFR Loans will be deemed to have been converted into Base Rate Loans immediately.
Interest on any such Base Rate Loans shall be payable on the same basis and in the same manner as SOFR Loans. Upon any such conversion, the City shall also pay accrued interest on the amount so converted.
(b) Laws Affecting SOFR A vailability. If, after the date hereof, the introduction of, or any change in, any applicable Law or any change in the interpretation or administration thereof by any Governmental Authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by the Lender (or its Lending Office) with any request or directive (whether or not having the force of law) of any such Governmental Authority, central bank or comparable agency, shall make it unlawful or impossible for the Lender (or its Lending Office) to honor its obligations hereunder to make or maintain any SOFR Loan, or to determine or charge interest based upon SOFR or Daily Simple SOFR, the Lender shall promptly give notice thereof to the City (an “Illegality Notice”). Thereafter, until the Lender notifies the City that the circumstances giving rise to such determination no longer exist , any obligation of the Lender to make SOFR Loans shall be suspended. Upon receipt of an Illegality Notice, the City shall, if
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necessary to avoid such illegality, upon demand from the Lender, prepay or, if applicable, convert all SOFR Loans to Base Rate Loans. Interest on any such Base Rate Loans shall be payable on the same basis and in the same manner as SOFR Loans. Upon any such prepayment or conversion, the City shall also pay accrued interest on the amount so prepaid or converted. (c) Benchmark Replacement Setting.
(i) Benchmark Replacement. (A) Notwithstanding anything to the contrary herein or in any other Financing Document, upon the occurrence of a Benchmark Transition Event, the Lender and the City may amend this Agreement to replace the then- current Benchmark with a Benchmark Replacement. Any such amendment with respect to a Benchmark Transition Event will becom e effective at 5:00 p.m. (Eastern time) on the fifth (5
th) Business Day after the Lender has posted such proposed amendment to the City.
No replacement of a Benchmark with a Benchmark Replacement pursuant to this Section 2.14 (c)(i)(A) will occur prior to the applicable Benchmark Transition Start Date. (B) No Swap Contract shall be deemed to be a “Financing Document” for purposes of this Section 2.14(c).
(ii) Benchmark Replacement Conforming Changes. In connection with the use, administration, adoption or implementation of a Benchmark Replacement, the Lender will have the right to make Conforming Changes from time to time and, notwithstanding anything to the contrary herein or in any other Financing Document, any amendments implementing such Conforming Changes will become effective without any further action or consent of any other party to this Agreement or any other Financing Document. (iii) Notices; Standards for Decisions and Determinations. The Lender will promptly notify the City of (A) the implementation of any Benchmark Replacement and (B) the effectiveness of any Conforming Changes in connection with the use, administration, adoption or implementation of a Benchmark Replacement. The Lender will promptly notify the City of the removal or reinstatement of any tenor of a Benchmark pursuant to Section 2.14(c)(iv) below. Any determination, decision or election that may be made by the Lender pursuant to this Section 2.14(c), including any determination with respect to a tenor, rate or adjus tment or of the occurrence or non- occurrence of an event, circumstance or date and any decision to take or refrain from taking any action or any selection, will be conclusive and binding absent manifest error and may be made in its or their sole discretion and without consent from any other party to this Agreement or any other Financing Document, except, in each case, as expressly required pursuant to this Section 2.14(c).
(iv) Unavailability of Tenor of Benchmark . Notwithstanding anything to the contrary herein or in any other Financing Document, at any time (including in connection with the implementation of a Benchmark Replacement), (A) if the then-current Benchmark is a term rate and either (1) any tenor for such Benchmark is not displayed on a screen or other information service that publishes such rate from time to time as selected by the Lender in its reasonable discretion or (2) the regulatory supervisor for the administrator of
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such Benchmark has provided a public statement or publication of information announcing that any tenor for such Benchmark is not or will not be representative, then the Lender may modify the definition of “Interest Period” (or any similar or analogous definition) for any Benchmark settings at or after such time to remove such unavailable or non-representative tenor and (B) if a tenor that was removed pursuant to clause (A) above either (1) is subsequently displayed on a screen or information service for a Benchmark (including a Benchmark Replacement) or (2) is not, or is no longer, subject to an announcement that it is not or will not be representative for a Benchmark (including a Benchmark Replacement), then the Lender may modify the definition of “Interest Period” (or any similar or analogous definition) for all Benchmark set tings at or after such time to reinstate such previously removed tenor.
(v) Benchmark Unavailability Period. Upon the City’s receipt of notice of the commencement of a Benchmark Unavailability Period, (A) the City may revoke any pending request for a borrowing of or SOFR Loans to be made during any Benchmark Unavailability Period and, failing that, the City will be deemed to have converted any such request into a request for a borrowing of or conversion to Base Rate Loans and (B) any outstanding affected SOFR Loans will be deemed to have been converted to Base Rate Loans immediately.
(d) Approving Opinion. The City shall cause an Approving O pinion to be delivered to the Lender each time a new Benchmark Replacement is determined pursuant to this Section. “Approving Opinion” means, with respect to any action relating to the Tax -Exempt Loans, the occurrence of which requires an opinion of Note Counsel, an opinion of Note Counsel to the effect that such action (a) is permitted by this Agree ment, the Ordinances and the Resolutions and (b) will not adversely affect the exclusion of interest on the Tax -exempt Notes from gross income of the Owners for purposes of federal income taxation.
A
RTICLE III
CONDITIONS
Section 3.01. Effectiveness. This Agreement shall become effective on the date on which each of the following conditions shall have been satisfied:
(a) receipt by the Lender of a counterpart hereof signed by each of the parties hereto;
(b) receipt by the Lender of duly executed Water System Notes and Electric System Notes dated on or before the Effective Date complying with the provisions of Section 2.03;
(c) receipt by the Lende r of (i) an opinion of the City Attorney, in a form acceptable to the Lender and covering such matters relating to the transactions contemplated hereby or by the Financing Documents as the Lender may reasonably request, and (ii) an opinion of Note Counsel , in a form acceptable to the Lender and
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covering such matters relating to the transactions contemplated hereby or by the Financing Documents as the Lender may reasonably request (including, without limitation, as to the validity, enforceability and priorit y of the pledge of Pledged Revenues to secure the obligations of the City hereunder);
(d) receipt by the Lender of a certified copy of each instrument which composes the Ordinances and the Resolutions (each as in effect on the Effective Date) and a certificate of an Authorized Person, dated the Effective Date, certifying that each instrument which composes the Resolutions is in full force and effect on the Effective Date and that there has been no other amendment or supplement of, or modification to, any provision of any such instrument, except as set forth therein; (e) receipt by the Lender of a certificate of an Authorized Person, dated the Effective Date, certifying that (i) each of the City’s representations and warranties contained (or incorporated by reference) herein is true and correct on and as of the Effective Date, (ii) no Default or Event of Default has occurred and is continuing, (iii) no petition by or against the City has at any time been filed under the United States Bankruptcy Code or under any similar law; and (iv) no material adverse change has occurred in the ratings, financial condition, business, assets, liabilities or prospects of the City relating to the Systems since June 30, 2022, except as disclosed in writing to the Lender prior to the Effective Date;
(f) receipt by the Lender of a certificate of the City Clerk or any Deputy City Clerk, dated the Effective Date, certifying as to the authorization and signatures of the officers of the City who are authorized to execut e and deliver this Agreement and the Electric System Notes and Water System Notes then being delivered; (g) receipt by the Lender of all opinions, certificates and other documents it may reasonably request relating to the existence of the City, the authority for and the validity of this Agreement and the Notes then being delivered, and any other matters relevant hereto or thereto, all in form and substance satisfactory to the Lender; and (h) receipt by the Lender of reimbursement of the Lender’s fees and expenses and any other fees incurred in connection with the transaction contemplated by the Financing Documents, including, without limitation, any fee payable to the California Debt and Investment Advisory Commission by the Lender with respect to the Notes, the Electric System Notes and Water System Notes.
Section 3.02. Borrowings Other Than Refunding Borrowings During the Revolving Credit Period. The obligation of the Lender to make a Loan on the occasion of any Borrowing (other than a Refunding Borrowing) is subject to the satisfaction of the following conditions:
(a) receipt by the Lender of a Notice of Borrowing as required by Section 2.02; (b) the fact that, immediately after such Borrowing , the aggregate outstanding principal amount of the Loans will not exceed the amount of the Commitment;
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(c) the fact that, immediately before and as a result of giving effect to such Borrowing, no Event of Default for the System to which the Loan relates shall have occurred and be continuing;
(d) the fact that the representations and warranties of the City (and if such representations and warranties relate to a System, then only to the extent they relate to the particular System for which the Loan is to be made) contained in this Agreement ((i) except the representations and warranties set forth in Section 4.04(c) and the second sentence of Section 4.11 and (ii) except the representations and warranties set forth in Section 4.05 as to any matter which has theretofore been disclosed in writing by the City to the Lender) shall be true in all material respects on and as of the date of such Borrowing; and (e) with respect to any Tax -exempt Loan, (i) neithe r the City nor the Lender shall have received actual notice (either verbal or written) from Note Counsel that the opinion delivered pursuant to Section 3.04(b) hereof may no longer be relied upon, and (ii) the Lender shall have received an opinion from Not e Counsel in the form attached hereto as Exhibit I.
Each Borrowing hereunder shall be deemed to be a representation and warranty by the City on the date of such Borrowing as to the facts specified in clauses (b), (c) and (d) of this Section.
Section 3.03. Refunding Borrowings. The obligation of the Lender to make a Loan on the occasion of any Refunding Borrowing is subject to the satisfaction of the following conditions:
(a) receipt by the Lender of a Notice of Borrowing as required by Section 2.02; (b) the fact that, immediately after such Borrowing, the aggregate principal amount of the Loans shall be equal to the lesser of (i) the aggregate principal amount of the Loans outstanding immediately before such Borrowing and (ii) the amount of the Commitment then in effect;
(c) the fact that, immediately before and as a result of giving effect to such Borrowing, no Event of Default for the System to which the Loan relates shall have occurred and be continuing;
(d) the fact that the representations and warranties of the City (and if such representations and warranties relate to a System, then only to the extent they relate to the particular System for which the Loan is to be made) contained in this Agreement ((i) except the representations and warranties set forth in Section 4.04(c) and the second sentence of Section 4.11 and (ii) except the representations and warranties set forth in Section 4.05 as to any matter which has theretofore been disclosed in writing by the City to the Lender) shall be true in all material respects and as of the date of such Borrowing; and (e) with respect to any Tax -exempt Loan, (i) neither the City nor the Lender shall have received actual notice (either verbal or written) from Note Counsel that the opinion delivered pursuant to Section 3.04(b) hereof may no longer be relied upon, and
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(ii) the Lender shall have received an opinion from Note Counsel in the form attached hereto as Exhibit I.
Each Borrowing hereunder shall be deemed to be a representation and warranty by the City on the date of such Borrowing as to the facts specified in clauses (b), (c) and (d) of this Section.
Section 3.04. Initial Tax-Exempt Loan Borrowings. The obligation of the Lender to make each initial Tax-exempt Loan with respect to each System hereunder is subject to the satisfaction of the following conditions:
(a) all conditions set forth in Section 3.02 hereof shall be satisfied prior to the making of such Loan;
(b) the Lender shall have received an executed opinion of No te Counsel, in a form acceptable to the Lender, to the effect that the interest on the applicable Tax-exempt Note is excludable from gross income for federal income tax purposes; and (c) the City shall have executed, and the Lender shall have received an executed copy of, the tax certificate related to the applicable Tax-exempt Note.
Section 3.05. No Note Rating; Offering Document . The Notes shall not be (i) assigned a specific rating by any Rating Agency, (ii) issued pursuant to any type of official statement, private placement memorandum or other offering document, or (iii) placed or offered by a broker -dealer in the capacity of an underwriter or a placement agent.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The City represents and warrants that:
Section 4.01. Organization, Powers, Etc . The City is a municipal corporation duly organized and existing under a Charter duly and regularly adopted pursuant to the provisions of the laws and Constitution of the State of California and possesses all material governmental licenses, authorization, consents and approvals required to operate the Systems, to carry on its business related thereto as now conducted, to borrow under this Agreement and to issue the Electric System Notes and Water System Notes under the Ordinances and the Re solutions and in accordance with this Agreement.
Section 4.02. Authorization; No Contravention. Each of the Resolutions and the Ordinances has been duly adopted and is in full force and ef fect. The execution, delivery and performance by the City of this Agreement (including, without limitation, the borrowing of Loans in an aggregate principal amount equal to the amount of the Commitment), the Electric System Notes and Water System Notes and the other Financing Documents (as applicable) are within the City’s powers, have been duly authorized by all necessary action, require no action by or in respect of, or filing with, any governmental body, agency or official (other than action by the City, which
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has been taken) and do not contravene, or constitute a default under, any provision of applicable law (including, without limitation, the Char ter) or regulation or of the by- laws of the City or of any indenture, mortgage, deed of trust, lease, other agreement, judgment, injunction, order, decree or other instrument binding upon the City or the Financing Documents or any of its assets or result in the creation or imposition of any Lien on any asset of the City other than (a) in the case of the Electric System, the Lien on Pledged Revenues created by and under Section 15 of the Electric System Ordinance and (b) in the case of the Water System, the Lien on Pledged Revenues created by and under Section 15 of the Water System Ordinance. This Agreement was approved by the Public Utilities General Manager consistent with the requirements of the Water System Ordinance.
Section 4.03. Binding Effect. This Agreement and each of the other Financing Document constitute valid and binding agreements of the City and the Electric System Notes and Water System Notes will constitute a valid and binding obligation of the City, enforceable against the City in accordance with their respective terms, except as such enforceability may be limited by the City’s bankruptcy, insolvency, reorganization, moratorium or other laws or equitable principles relating to or limiting creditors’ rights generally and by limitations on remedies available against public agencies such as the City in the State.
Section 4.04. Financial Information. (a) The statements of net position of the City as of June 30, 2022, and the related statements of revenues, expenses, and changes in net position as well as the statements of cash flows for the fiscal year then ended, reported on by KPMG LLP (or the City’s then independent certified public accountants), a copy of which has been delivered to the Lender, fairly present, in conformity with generally accepted accounting principles applicable to governmental entities in the State consistently applied throughout the period covered thereby, the financial position of the City as of such date and its results of operations and cash flows for such fiscal year.
(b) The unaudited statements of r evenues, expenses, and changes in net position of the Systems for the fiscal quarter ended June 30, 2022, a copy of which has been delivered to the Lender, fairly present, in conformity with generally accepted accounting principles applied on a basis consistent with the financial statements referred to in subsection (a) of this Section, the results of operations of the Systems for such three -month period (subject to normal year -end adjustments).
(c) Since June 30, 2022, there has been no material adverse change in the business, financial position, results of operations or prospects of the City as they relate to the Systems.
Section 4.05. Litigation. Except as previously disclosed in writing by the City directly to the Lender, there is no action, suit or proceeding pending against, or to the knowledge of the City threatened against or affecting, the City, the Electric System or the Water System, or relating to any Financing Document, the Charter, this Agreement or the Notes before any court or arbitrator or any governmental body, agency or official in which, if adversely determined, could materially adversely affect the business, financial position or results of operat ions of the City, the Electric System or the Water System, or which in any manner draws into question the validity or enforceability of this Agreement, the Notes, the Charter or any other Financing Document, or any such action or proceeding affecting the existence of the City, the titles of their respective officers
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to their respective offices or the Systems, or seeking to prohibit, restrain or enjoin issuance of the Notes, the ability of any of the City to set rates or pledge revenues, as applicable, for payment of the Notes, or in any way contesting or affecting the validity or enforceability of the Notes, this Agreement or any other Financing Document to which the City is a party or contesting the exclusion of interest on the Tax-exempt Notes from gross income for federal income tax purposes, or contesting the powers of the City or any member of the City for the issuance of the Notes or the execution, delivery and performance of this Agreement and the Financing Documents to which the City is a party.
Section 4.06. Employee Benefit Plans, Etc . The City has no funding deficiency with respect to any employee benefit plan and is otherwise in compliance with terms of any such plan in which the City or any of its employees participates. The City is not subject to ERISA and maintains no Plans.
Section 4.07. Status of Notes. (a) The Electric System Ordinance provides that the Electric System Notes are secured by a pledge, charge and lien upon the Electric System Surplus Revenues in the ERAN Account and the other Pledged Revenues. Such pledge, charge and lien constitutes a pledge, charge and lien in favor of the holders of Electric System Notes. Amounts due and owing with respect to Electric System Notes are payable and secured ratably with amounts due and owing on other Electric Revenue Anticipation Notes.
(b) The Water System Ordinance provides that the Water System Notes are secured by a pledge, charge and lien upon the Water System Surplus Revenues in the WRAN Account and the other Pledged Revenues. Such pledge, charge and lien constitutes a pledge, charge and lien in favor of the holders of Water System Notes. Amounts due and owing with respect to Water System Notes are payable and secured ratably with amounts due and owing on other Water Revenue Anticipation Notes.
(c) The Electric System Notes and Water System Notes constitute revenue anticipation notes, as contemplated by Section 1210 of the Charter, and the Electric System Notes constitute “Notes” as defined in and validly issued pursuant to the Electric System Ordinance, and the Water System Notes constitute “Notes” as defined in and validly issued pursuant to the Water System Ordinance.
Section 4.08. Taxes. The City has timely filed or caused to be filed all tax returns, if any, which are required to be filed, has correctly stated the facts regarding any tax liability of the City on such returns and has paid all taxes, if any, shown to be due and payable on said returns or on any assessments made against it or any of its property and all other taxes, fees and other charges imposed on it or any of its property by any governmental body, agency or authority (other than those the amount or validity of which are currently being contested in good faith by appropriate proceedings and with respect to which appropriate reserves in accordance with GAAP have been provided on the books of the City); and no tax liens have been filed and, to the best knowledge of the City, no claims are being actively asserted with respect to any such taxes, fees or other charges (other than those the amount or validity of which are currently being contested in good faith by appropriate proceedings and with respect to which appropriate reserves in accordance with GAAP have been provided on the books of the City).
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Section 4.09. Full Disclosure. All information heretofore furnished (including pursuant to any representation or warranty) by the City or its counsel to the Lender for purposes of or in connection with this Agreement or any other Financing Document or any transaction contemplated hereby or thereby is, and all such information hereafter furnished by the City to the Lender will be, true and accurate in all material respects on the date as of which such information is stated or certified.
Section 4.10. No Default. The City is not in default in the performance, observance or fulfillment of any of its material obligations, covenants or conditions contained in this Agreement.
The City is not presently in default under any material agreement to which it is a party which could reasonably be expected to have a Material Adverse Effect and no petition by or against the City has at any time been filed under the United States Bankruptcy Code or any similar federal or State statute. No payment default has occurred and is continuing under any Debt related to either System. The City is not in violation of any mat erial term of its Charter or by -laws or any material term of any bond indenture or agreement to which it is a party or by which any of its property or assets is bound.
Section 4.11. Qualified Obligations . (a) The City has not issued, incurred, assumed or guaranteed any Debt which is outstanding and is both (i) payable from Electric System Surplus Revenues, and (ii) senior, as to the priority of payment or security, to the Electric System Qualified Obligations.
(b) The City has not issued, incurred, assumed or guaranteed any Debt which is outstanding and is both (i) payable from Water System Surplus Revenues, and (ii) senior, as to the priority of payment or security, to the Water System Qualified Obligations.
Section 4.12. No Sovereign Immunity. Under the laws of the State of California, the City, the Systems, and the Pledged Revenues are not exempt or immune from, whether on the basis of sovereign immunity or any similar legal or equitable principle, doctrine or rule of law and whether now or at any time hereafter arising, (1) jurisdiction, (2) liability, suit or other legal or equitable remedy for the amounts due and payable under the Notes, this Agreement or any of the other Financing Documents or the performance of any of its other obligations hereunder or thereunder, or (3) enforcement of any judgment, order or decree to which the City, the Systems or the Pledged Revenues may be made subject, except in each case as provided in the Government Claims Act.
Section 4.13. Rate Increases. An increase by the City of rates, fees, rentals or other charges for the use of the product, services and facilities of the Electric System or the Water System requires no action or approval by or in respect of any governmental body, agency or official (other than the City).
Section 4.14. Insurance. With respect to the Systems, the City currently maintains insurance of such type and in such amounts or in excess of such amounts as are customarily carried by, and insures against such risks as are customarily insured against by, entities of like type, size and character to the City.
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Section 4.15. Pending Legislation and Decisions . There is no amendment, or to the knowledge of the City, proposed amendment to the Constitution of the State or any State law or any administrative interpretation of the Constitution of the State or any State law, or any legislation that has passed either house of the legislature of the State, or any published judicial decision interpreting any of the foregoing, the effect of which will materially adversely affect the issuance of the Notes, the security for the Notes or the City’s obligations hereunder or under any of the other Financing Documents, the cr eation, organization, or existence of the City or the titles to office of any officers executing this Agreement or any other Financing Documents to which the City is a party or the City’s ability to repay when due its obligations under this Agreement, the Notes, any obligations hereunder and the other Financing Documents.
Section 4.16. Incorporation of Representations and Warranties. The City hereby makes to the Lender the same representations and warranties made by the City in each Financing Document to which it is a party, which representations and warranties, together with the related definitions of terms contained therein, are incorporated herein by this reference with the same effect as if each and every such representation and warranty and definition were set forth herein in its entirety. No amendment to or waiver of such representations, warranties or definitions made pursuant to the relevant Financing Documents shall be effective to amend such representations and warranties and definitions as incorporated by reference herein without the prior written consent of the Lender.
Section 4.17. Federal Reserve Board Regulations . The City will not use any part of the proceeds of the Notes or the funds advanced under any Loan and has not incurred any indebtedness to be reduced, retired or purchased by the City out of such proceeds, for the purpose of purchasing or carrying any Margin Stock or violating Regulation T, U or X of the FRB, and the City does not own and will not acquire any such Margin Stock.
Section 4.18. Environmental Laws. In the ordinary course of its business, the City conducts an ongoing review of the effect of Environmental Laws on the business, operations and properties of the City relating to the Systems, in the course of which it identifies and evaluates associated liabilities and costs (including, without limitation, any capital or operating expenditures required for clean up or closure of properties presently or previously owned or operated, any capital or operating expenditures required to achieve or maintain compliance with environmental protection standards imposed by law or as a condition of any license, permit or contract, and related constraints on operating activities, and any actual or potential liabilities to third parties, including employees, and any related costs and expenses). The City and its assets and property relating to the Systems (1) has not become subject to any Environmental Liability nor does the City know of any basis for any Environmental Liability (other than the obligation to fund decommissioning costs relating to the City’s interest in the Systems), (2) has not received notice of any Environmental Claim or of any failure or alleged failure to comply with applicable federal, state or local health and safety s tatutes or regulations, except for notices of Environmental Claims or of failures or alleged failures to comply that, singly or in the aggregate, have not had and cannot have a Material Adverse Effect, and (3) to the best knowledge of the City, is in compliance with all Environmental Laws and has obtained and maintains or complies with any permit, license or other approval required under any Environmental Law.
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Section 4.19. Tax Exempt Status. The City has not taken any action or omitted to take any action, and knows of no action taken or omitted to be taken by any other person or entity, which action, if taken or omitted, would cause interest on the Tax- exempt Notes to be subject to federal income taxes or to personal income taxes levied by the State.
Section 4.20. Compliance with Laws. The City is in compliance with all applicable statutes, regulations and orders of, and all applicable restrictions imposed by, all governmental bodies, domestic or foreign, in respect of the operation of the Systems and its ownership interest in the Systems except such noncompliance as would not, in the aggregate, have a Material Adverse Effect.
Section 4.21. Usury. There is no limitation under California law on the rate of interest payable by the City with respect to Notes held by the Lender or the obligations to the Lender hereunder.
Section 4.22. Financing Documents to Constitute a Contract and a Legal Obligation. The provisions of the Electric System Notes and Water System Notes, this Agreement and the other Financing Documents constitute a contract between the City and the Lender and the Noteholders, as applicable, and a separate legal obligation of City, and, in each case, such provisions are enforceable by mandamus and any other appropriate suit, action or proceedings at law or in equity in any court of competent jurisdiction.
Section 4.23. Financing Documents. Ordinance Nos. 5032, 5375 and 5376, together with Resolution Nos. 76R-276, 89R-295 and 93R-102, and the Authorizing Resolution, true and correct copies of which the City has delivered to the Lender, constitute all of the documents and official action relevant or pertaining to the issuance of the Electric System Notes, the execution and delivery of this Agreement and t he other Financing Documents relating to the Electric System.
Ordinance No. 5376, together with Resolution Nos. 83R -169, 90R-293, 92R-59 and 2013-034, and the Authorizing Resolution, true and correct copies of which the City has delivered to the Lender, constitute all of the documents and official action relevant or pertaining to the issuance of the Water System Notes, the execution and delivery of this Agreement and the other Financing Documents relating to the Water System.
Section 4.24. Anti-Corruption Laws; Anti-Money Laundering Laws and Sanctions. (a) Neither (i) the City or , to the City’s knowledge, any of its officer s, employees or Affiliates nor (ii) to the City’s knowledge, any agent or representative of the City that will act in any capacity in connection with or benefit from this Agreement, (A) is a Sanctioned Person or currently the subject or target of any Sanctions, (B) has its assets located in a Sanctioned Country, (C) is under administrative, civil or criminal investigation for an alleged violation of, or received notice from or made a voluntary disclosure to any governmental entity regarding a possible violation of, Anti-Corruption Laws, Anti-Money Laundering Laws or Sanctions by a governmental authority that enforces Sanctions or any Anti-Corruption Laws or Anti-Money Laundering Laws, or (D) directly or indirectly derives revenues from investments in, or transactions with, Sanctioned Persons
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(b) The City has implemented and maintains in effect policies and procedures designed to ensure compliance by the City and, to the City’s knowledge, its officers, employees, agents and Affiliates with all Anti-Corruption Laws, Anti-Money Laundering Laws and applicable Sanctions. (c) The City and each officer, employee, agent and Affiliate of the City is in compliance with all Anti-Corruption Laws, Anti-Money Laundering Laws and applicable Sanctions to which (to the City’s knowledge) the City and its officers, employees, agents and Affiliates are directly subject.
(d) To its knowledge, no proceeds of any Loan have been used, directly or indirectly, by the City or any of its officers, employees and agents in violation of Section 5.07(b) hereof. (e) The City shall notify Lender in writing not more than one (1) business day after first becoming aware of any breach of this Section 4.24.
ARTICLE V
COVENANTS
The City agrees that, so long as the Lender has any Commitment hereunder or any amount payable under the Electric System Notes and Water System Notes or this Agr eement (including the Term Loans) remains unpaid:
Section 5.01. Information. The City will deliver to the Lender:
(a) as soon as available and in any event within 180 days after the end of each fiscal year of the City, the statements of net position of the City as of the end of such fiscal year and the related statements of revenues, expenses, and changes in net position as well as statements of cash flow for such fiscal year, setting forth in each case in co mparative form the figures for the previous fiscal year, all reported on by independent public accountants of nationally recognized standing without qualification as to the scope of the audit performed or any material weakness noted in the City’s system of internal controls; (b) as soon as available and in any event within 75 days after the end of each of the first three quarters of each fiscal year of the City, a statement of revenues, expenses, and changes in net position of each System setting forth in each case in comparative form the figures for the corresponding quarter and the corresponding portion of the City’s previous fiscal year, all of which, unless an Authorized Person of the City shall have certified to the Lender to the contrary, shall be deemed to have been certified by the C ity (subject to normal year-end adjustments) as to fairness of presentation, in accordance with GAAP and consistency;
(c) simultaneously with the delivery of each set of financial statements referred to in clause (a) above, a statement of the firm of independent public accountants which reported on such statements whether anything has come to their attention to cause them to believe that any Default existed on the date of such statements; provided, however, that
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(i) such statement shall be required only to the extent that such accountants are permitted to deliver such statement under the then- current recommendations of the American Institute of Certified Public Accountants (the “AICPA” ) and (ii) such statements may be limited only to those matters permitted under the then- current recommendations of the AICPA;
(d) promptly and in any event within five Business Days after any officer of the City obtains knowledge of any Default, if such Default is then continuing, a certi ficate of an Authorized Person of the City setting forth the details thereof and the action which the City is taking or proposes to take with respect thereto; (e) as soon as available but in any event within 30 Business Days after approval of the City, copies of the City’s annual budget;
(f) within ten Business Days after the transfer of funds by the Systems to the City (other than transfers for which appropriations have been provided in the annual budget of the Systems and reimbursements by the Systems t o the City for the costs of services provided by the City to the Systems), a certificate of an Authorized Person of the City setting forth the amount transferred;
(g) promptly and in any event within ten Business Days after any officer obtains knowledge of any litigation and any other action, suit, proceeding, inquiry or investigation reasonably related to either System that is commenced or threatened (A) against the City or any Affiliate of the City and that seeks damages in excess of $5,000,000, (B) which seeks injunctive relief, (C) which is asserted or instituted against any Plan, its fiduciaries or its assets for which the City has actual knowledge or against the City in connection with any Plan which could reasonably be expected to have a Material Adverse Effect, (D) which alleges criminal misconduct by the City or any Affiliate of the City or any officer, employee or agent of the City or any Affiliate of the City, or (E) which alleges the violation of any law regarding, or seeks remedies in connection with, any Environmental Liabilities that singly or in the aggregate could reasonably be expected to exceed $10,000,000; (h) Promptly after the occurrence or receipt thereof, as applicable, (A) any criminal investigation or proceeding by a Governmental Authority involving the City, any Affiliate of the City or any officer or managerial employee of the City or any Affiliate of the City in each case that could reasonably be expected to have a Material Adverse Effect on either System; (B) written notice of a communication from any labor union of an intent to strike the City or any of its Affiliates at a future date (in each case that could reasonably be expected to have a Material Adverse Effect on either System) with such notice to include a description of the action or actions that the City or its Affiliates propose to take with respect thereto; and (C) the proposal of a bill or other legislation or the filing of any initiative or referendum which challenges the validity or enforceability of any of the Financing Documents or the Charter, or otherwise could annul, amend, modify or replace the Charter or which could lead to a material diminution or reallocation of the Pledged Revenues or any portion thereof;
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(i) promptly after the adoption thereof, copies of any amendments of or supplements to the Charter of the City and copies of any amendments to the Financing Documents; and
(j) from time to time such additional information regarding the financial position or business of the Systems as the Lender may reasonably request.
Section 5.02. Payment of Obligations; Removal of Liens. (a) With respect to each particular System, the City will (a) pay and discharge, at or before maturity, all its material obligations and liabilities of such System in accordance with the terms thereof, including, without limitation, tax liabilities, except where the same may be contested in good faith by appropriate proceedings, and will maintain, in accordance with GAAP appropriate reserves for the accrual of any of the same and (b) promptly discharge or cause to be discharged all Liens, encumbrances and charges on such property and assets, other than, in each case, those diligently contested by the City in good faith.
(b) The City shall not fund any repayment of the credit with proceeds, or provide as collateral any property, that is directly or indirectly derived from any transaction or activity that is prohibited by Sanctions, Anti -Money Laundering Laws or Anti -Corruption Laws, or that could otherwise cause the Lender or any other party to this agreement to be in violation of Sanctions, Anti-Money Laundering Laws or Anti-Corruption Laws.
Section 5.03. Maintenance of Property . The City will keep all property for each System useful and necessary in its business in good working order and condition, ordinary wear and tear excepted.
Section 5.04. Conduct of Business and Maintenance of Existence . The City will continue to engage in business of the same general type as now conducted by the City with respect to a particular System, and will preserve, renew and keep in full force and effect its existence and its rights, privileges and franchises necessary or desirable in the normal conduct of business with respect to such System.
Section 5.05. Compliance with Laws. The City will comply in all material respects with all applicable laws, ordinances, rules, regulations, and requirements of governmental authorities (including, without limitation, environmental laws) for each System, except where the necessity of compliance therewith is contested in good faith by appropriate proceedings.
Section 5.06. Inspection of Property, Books and Records. The City will keep proper books of record and ac count in which full, true and correct entries shall be made of all dealings and transactions in relation to the business and activities of the Systems; and will permit representatives of the Lender to visit and inspect any of its properties, to examine and make abstracts from any of its books and records and to discuss its affairs, finances and accounts with its officers, employees and independent public accountants, all at such reasonable times and as often as may reasonably be desired.
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Section 5.07. Use of Proceeds.
(a) No Margin Stock. The proceeds of the Loans made under this Agreement will not be used, directly or indirectly, for the purpose, whether immediate, incidental or ultimate, of buying or carrying any “margin stock” within the meaning of Regulation U. (b) Sanctions. The City shall not request or directly or indirectly use any of the credit to fund, finance or facilitate any activities, business or transactions: (i) in furtheranc e of an offer, payment, promise to pay, or authorization of the payment or giving of money, or anything else of value, to the City or, to the City’s knowledge, to any other Person in violation of any Anti - Corruption Laws or Anti -Money Laundering Laws, (ii) for the purpose of funding, financing or facilitating any activities, business or transaction of or with any Sanctioned Person, or in any Sanctioned Country, or (iii) in any manner that would result in the violation of any Sanctions directly applicable to it. The City shall notify Lender in writing not more than one (1) business day after first becoming aware of any breach of this Section 5.07.
Section 5.08. Incorporation of Covenants by Reference; No Amendments; Etc . (a)(i) The City agrees that it will perform and observe each and every covenant and agreement required to be performed or observed by it in each of (A) the Authorizing Resolution, the Electric Syst em Ordinance and the Electric System Financing Documents, as to the Electric System, and (B) the Authorizing Resolution, the Water System Ordinance and the Water System Financing Documents, as to the Water System (including, in each case, without limitation, all covenants and agreements in such Ordinances and Resolutions relating to (x) the incurrence by the City of additional debt (it being understood that any condition to any such incurrence of additional debt shall, for purposes of this Agreement, be treated as if such condition were a covenant or agreement to be performed or observed by the City) and (y) the setting of rates, fees, rentals or other charges for the use of the product, services and facilities of the Electric System and the Water System), which provisions, as well as related defined terms contained therein, (1) are hereby incorporated by reference herein with the same effect as if each and every such provision were set forth herein in its entirety (without giving effect to any expiration, am endment, supplement or termination of the Ordinances or the Resolutions, or any amendment or supplement of the Ordinances or the Resolutions, as the case may be, or the redemption or defeasance of any bonds or other securities issued thereunder (except as provided herein)), and (2) shall survive and be binding upon the City notwithstanding any termination or expiration of any such Ordinance or Resolution or the redemption or defeasance of any bonds or other securities issued thereunder. (ii) To the extent that any provision incorporated by reference herein pursuant to paragraph (i) or (ii) above permits the City or the holders of one or more bonds or other securities issued under the applicable Ordinance or Resolution or one or more holders of a series of bonds or other securities issued under the applicable Ordinance or Resolution or any Person acting on behalf of any such holder or holders to waive compliance with such provision or requires that a document, opinion or other instrument or any event or condi tion relating to such incorporated provision be acceptable or satisfactory to the City or the holders of one or more bonds or other securities issued under the applicable Ordinance or Resolution or one or more holders of a series of bonds or other securiti es issued under the applicable Ordinance or Resolution or any Person acting on behalf of any such holder or holders, for purposes of this Agreement, such provision
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shall be complied with unless it is waived by the Lender and such document, opinion or other instrument shall be acceptable or satisfactory only if it is acceptable or satisfactory to the Lender.
No amendment or supplement to or termination or expiration of such covenants and agreements or defined terms made pursuant to any such Ordinance or Resolution shall be effective to amend, supplement or terminate such covenants and agreements and defined terms as incorporated by reference herein without the consent of the Lender.
(b) Without limiting the generality of the foregoing, the City will not ame nd, modify, waive or terminate, or consent to any amendment to or modification, waiver or termination of, any provision of any of the Financing Documents which would in any respect adversely affect the rights, remedies, security or interests of the Lender of any Noteholder under this Agreement or the Electric System Notes and Water System Notes or any of the other Financing Documents, without the prior written consent of the Lender.
Section 5.09. ERISA Matters. The City will not adopt, or incur any material obligation or liability under or in respect of, any employee benefit plan, within the meaning of Section 3(3) of ERISA, that is subject to Title I or Title IV of ERISA.
Section 5.10. Further Assurances. The City shall, upon the request of the Lender , from time to time, execute and deliver and, if necessary, file, register and record such further financing statements, amendments, confirmation statements and other documents and instruments and take such further action as may be reasonably necessary to effectuate the provisions of this Agreement and the Financing Documents. Except to the extent it is exempt therefrom, the City will pay or cause to be paid all filing, registration and recording fees incident to such filing, registration and recording, and all expenses incident to the preparation, execution and acknowledgment of such instruments of further assurance, and all federal or state fees and other similar fees, duties, imposts, assessments and charges arising out of or in connection with the execution and delivery of this Agreement, the Financing Documents and such instruments of further assurance. The City, to the extent permitted by law, at all times shall defend, preserve and protect the pledge of the Pledged Revenues, and other moneys, securities, rights and interests pledged under the Resolutions and the Ordinances against all claims and demands of all persons whomsoever.
Section 5.11. Related Obligations. The City shall promptly pay all amounts payable by it hereunder and under the Financing Documents according to the terms hereof or thereof and shall duly perform each of its obligations under this Agreement and the other Financing Documents to which it is a party; which provisions, as well as related defined terms contained therein, are hereby incorporated by reference herein with the same effect as if each and every such provision were set forth herein in its entirety without giving effect to any amendment or supplement of the Financing Documents to which the Lender has not given its express written consent.
Section 5.12. Insurance. The C ity will at all times maintain insurance with respect to its business operations and properties relating to the Systems against such risks, in such amounts, with such companies and with such deductibles as is customary for business operations and properties of like size, location and character to those of the Systems.
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Section 5.13. Sovereign Immunity. To the fullest extent permitted by applicable law, the City irrevocably agrees that it will not claim any immunity on the grounds of sovereignty or other similar grounds from (i) suit, (ii) jurisdiction of any court, (iii) relief by way of injunction or order for specific performance, or (iv) enforcement of any judgment to which it or its revenues might otherwise be entitled in any proceedings in the courts of any jurisdiction and irrevocably waives, to the fullest extent permitted by applicable law, with respect to itself and its revenues (irrespective of their use or intended use), all such immunity, except to the extent provided in the Governmental Claims Act. To the extent that the City has or hereafter may acquire under any applicable law any right to immunity from setoff or legal proceedings on the grounds of sovereignty or otherwise, the City, to the extent permitted by law, hereby irrevocably waives such rights to immunity for itself and agrees not to invoke any defense of immunity in respect of its obligations arising under or related to this Agreement.
Section 5.14. Proceeds of Notes. The proceeds of the Notes will be used by the City solely for the purposes described in the Resolutions and the Ordinances.
Section 5.15. Preservation of Lien . The City shall take all necessary action to maintain, perfect and preserve the pledge of, lien on and security interest in the Pledged Revenues securing the Notes and the payment and performance of the City’s obligations hereunder.
Section 5.16. Additional Note or Collateral. If at any time the City shall seek to restrain or preclude payment of a Loan or Term Loan or any court shall extend the term of this Agreement or take any other action which has a similar effect, then, in each case, the City shall provide the Lender with a Note or other collateral of a type and value satisfactory to the Lender as security for the obligations of the City hereunder.
Section 5.17. Parity Creditors and Covenants . In the event that the City has any outstanding, or hereafter shall enter into any to any credit agreement, bond purchase agreement, liquidity agreement or other agreement or instrument (or any amendment, supplement or modification thereto) under which, directly or indirectly, any Person or Persons undertakes to directly purchase or to make or provide credit enhancement or liquidity in support of any Parity Debt or providing for incurrence of or relating to any Parity Debt (each a “Relevant Agreement”), which provides to the related Parity Creditor (a) any preference or priority with respect to the Pledged Revenues or the allocation of the Pledged Revenues as compared to the pledge and allocation to, in favor, or for the benefit, of the Lender and/or the Noteholders, (b) any additional or more restrictive covenants (including without limitation financial covenants) as compared to those made in favor of the Lender and/or the Noteholders as set forth in the Financing Documents or this Agreement or (c) different or additional events of default and/or greater rights and remedies (collectively, the “Parity Provisions”), then such Parity Provisions shall automatically be deemed to be incorporated into this Agreement for the duration of this Agreement and the Lender and the Noteholders shall have the benefits of such Parity Provisions as if it were specifically set forth in this Agreement. Upon request of the Lender, the City shall promptly enter into an amendment to this Agreement to include the Parity Provision(s) ( provided that the Lender and the Noteholders shall maintain the benefit of such Parity Provision(s) even if the City fails to provide such amendment). The City agrees to disclose promptly to the Lender each Relevant Agreement including without limitation each standby bond purchase agreement, credit agreement,
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reimbursement agreement, bond purchase agreement, continuing covenant agreement, or other agreement or instrument (or amendment, supplement or modification thereto) under which, directly or indirectly any person or persons undertake to make or provide funds to purchase any Parity Debt issued by the City.
Section 5.18. Charges. (a) The City shall at all times establish charges and cause to be collected amounts for the use of the Water System as shall be required to provide revenues at least sufficient in each Fiscal Year, together with other available funds, for the payment (without duplication) of (i) the interest on and principal payments of the outstanding Water Revenue Anticipation Notes as they become due and payable (except for the Fiscal Year in which the Facility Maturity Date is scheduled to occur, in which case the principal amount due hereunder shall be excluded from this clause (i) if the City shall have presented a plan of refinance reasonably acceptable to the Lender), (ii) all current expenses for the necessary and reasonable maintenance and operation expenses of the Water System as said expenses become due and payable, and (iii) all payments required to meet any other obligations of the City which are charges, liens encumbrances upon or payable from the revenues of the Water System.
(b) The City shall at all times establ ish charges and cause to be collected amounts for the use of the Electric System as shall be required to provide revenues at least sufficient in each Fiscal Year, together with other available funds, for the payment (without duplication) of (i) the interest on and principal payments of the outstanding Electric Revenue Anticipation Notes as they become due and payable (except for the Fiscal Year in which the Facility Maturity Date is scheduled to occur, in which case the principal amount due hereunder shall be excluded from this clause (i) if the City shall have presented a plan of refinance reasonably acceptable to the Lender), (ii) all current expenses for the necessary and reasonable maintenance and operation expenses of the Electric System as said expenses become due and payable, and (iii) all payments required to meet any other obligations of the City which are charges, liens encumbrances upon or payable from the revenues of the Electric System.
Section 5.19. Investment Policy. The City shall provide the Lender with a copy of any amendment to its Investment Policy following the adoption of any such amendment. In no event shall the City make any investment of funds of either System by (i) increasing or compounding the dollar amount of funds available for investment by obtaining loans or purchasing securities on margin or (ii) materially deviating from the Investment Policy in effect on the Effective Date, without the prior written consent of the Lender.
Section 5.20. Preservation of Existence, Ownership, Etc. The City shall not, with respect to any System, dissolve nor shall it sell, lease, assign, transfer or otherwise dispose of all or substantially all of such System’s assets (including, without limitation, by sale and leaseback).
Section 5.21. Certain Information. The City shall not include in an offering document any information concerning the Lender or any Noteholder that is not supplied in writing, or otherwise approved, by the Lender or such Noteholder expressly for inclusion therein.
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Section 5.22. Consolidation or Merger. The City shall not consolidate with or merge into another Person or permit one or more other Persons to consolidate with or merge into it or acquire all or substantially all of the property and assets of any other Person.
Section 5.23. Accounting Methods and Fiscal Year. With respect to the Systems, the City will not adopt, permit or consent to any change in accounting practices other than as required by GAAP and will not adopt, permit or consent to any change in its Fiscal Year without six months prior written notice to the Lender.
Section 5.24. Exempt Status. The City shall not take any action or omit to take any action that, if taken or omitted, would adversely affect the excludability of interest on the Tax- exempt Notes from the gross income of the holders thereof for purposes of Federal income taxation under the Code.
(i) The City covenants that it shall not take any action, or fail to take any action, or permit any action to be taken on its behalf or cause or permit any circumstance within its control to arise or continue, if any such action or inaction would adversely affect the exclusion from gross income for federal income tax purp oses of the interest on the Tax-exempt Notes under Section 103 of the Code and the applicable Treasury Regulations promulgated thereunder. Without limiting the generality of the foregoing, the City covenants that it will comply with the instructions and requirements of the Tax Certificate to be executed and delivered on the date of issuance of the Tax- exempt Notes concerning certain matters pertaining to the use of proceeds of the Tax- exempt Notes, including any and all exhibi ts attached thereto (the “Tax Certificate” ). This covenant shall survive payment in full or defeasance of the Tax-exempt Notes.
(ii) Notwithstanding any provisions of this Section, if the City shall obtain an opinion of nationally recognized bond counsel that any specified action required under this Section 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 the Tax-exempt Notes, the City may conclusively rely on such opinion in complying with the requirements of this Section and of the Tax Certificate, and the covenants hereunder shall be deemed to be modified to that extent.
Section 5.25. Impairment of Rights. The City shall not take or permit any action, under the Ordinances, the Resolutions, the Notes, or any other Financing Documents or under any Parity Debt otherwise inconsistent with or impairing the rights, remedies, security or inte rests of the Lender or any Noteholder under this Agreement including, without limitation, the obligation of the City to pay any obligations owed to the Lender or any Noteholder.
Section 5.26. Investments. The City will not make any investment, nor enter into any agreements for the purpose of effecting any investment, which is not permitted pursuant to the Charter, its organizational documents or the Ordinances or the Resolutions.
Section 5.27. Swap Contracts. The City will not enter into any Swap Contract with respect to any Pledged Revenues wherein any termination payments or settlement amounts are senior to
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or on parity with the payment of the Notes or the obligations hereunder, in each case, without the prior written consent of the Lender, which shall not be unreasonably withheld.
Section 5.28. Compliance with Anti-Corruption Laws; Anti-Money Laundering Laws and Sanctions. The City shall maintain in effect and enforce policies and procedures designed to promote and achieve compliance by the City and its officers, employees and agents with all Anti- Corruption Laws, Anti-Money Laundering Laws and applicable Sanctions to which (to the City’s knowledge) the City and its officers, employees and agents are directly subject.
ARTICLE VI
EVENTS OF DEFAULT
Section 6.01. Events of Default . If one or more of the following events ( “Events of Default”) shall have occurred and be continuing, they shall each constitute an Event of Default with respect to the System and the related Commitment of the Lender and Obligations of the City which are affected by such event, or for both Systems in the case of Sections 6.01(g), 6.01(h) and
6.01(k):
(a) (i) as to a System, the Ci ty shall fail to pay when due any principal of or interest on any Loan, any Notes or any Term Loan or (ii) as to a System, the City shall fail to pay when due any fees or any other amount payable hereunder; (b) the City shall fail to observe or perform any covenant contained (or incorporated by reference) in Sections 5.01 (c)-(j), 5.02, 5.04, 5.07, 5.08 (after giving effect to any grace period contained therein), 5.09, 5.11 (after giving effect to any grace period contained therein), 5.13, 5.14, 5.15, 5.18, 5.20, 5.21, 5.22, 5.24, 5.25, 5.27 or 5.28; (c) the City shall fail to observe or perform any covenant or agreement contained in this Agreement (other than those covered by clause (a) or (b) above) or in any Financing Document relating to such System (o ther than those covered by clause (b) above) for 30 days (or 15 days in the case of Section 5.01(a) or 5.01(b) hereof) after the earlier of (i) the date of which written notice thereof has been given to the City by the Lender or (ii) the date on which any official of the City first becomes aware of such failure; (d) (i) as to a System to the extent it relates to any individual System and not both Systems or (ii) as to both Systems, to the extent it relates to both Systems or the City generally: any repres entation, warranty, certification or statement made by the City (or incorporated by reference) in this Agreement or any Financing Document or in any certificate, financial statement or other document delivered pursuant to this Agreement or any Financing Document shall prove to have been incorrect in any material respect when made (or deemed made);
(e) as to a System, the City shall fail to make any payment in respect of any Material Debt when due or within any applicable grace period; or, as to a System, any event
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or condition shall occur which results in any Material Debt being immediately due and payable;
(f) as to a System, any event or condition shall occur which enables (or, with the giving of notice or lapse of time or both, would enable) the holder of Material Debt or any Person acting on such holder’s behalf to accelerate the maturity thereof; (g) the City shall commence a voluntary case or other proceeding seeking liquidation, reorganization or other relief with respect to itself or its debts unde r any bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any substantial part of its property, or shall consent to any such relief or to the appointment of or taking possession by any such official in an involuntary case or other proceeding commenced against it, or shall make a general assignment for the benefit of creditors, or shall fail generally to pay its debts as they become due, or shall take any action to authorize any of the foregoing;
(h) an involuntary case or other proceeding shall be commenced against the City seeking liquidation, reorganization or other relief with respect to it or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any substantial part of its property and such involuntary case or other proceeding shall rema in undismissed and unstayed for a period of 60 days; or an order for relief shall be entered against the City under the federal bankruptcy laws or applicable state law as now or hereafter in effect;
(i) as to a System, (i) a judgment or order for the payment of money in excess of $10,000,000 which is payable from the related Pledged Revenues shall be rendered against the City and such judgment or order shall continue unsatisfied and unstayed for a period of 60 days, or (ii) the City shall have failed to pr omptly lift any execution, garnishment, or attachment pursuant to a judgment or order which could reasonably be expected to impair the City’s ability to carry on its System related business; (j) (i) any provision of this Agreement or any Financing Document as to a System related to (A) payment of principal of or interest on any Loan, any Notes or any Term Loan or (B) the validity or enforceability of the pledge of the Pledged Revenues or any other pledge or security interest created by the Ordinances shall at any time for any reason cease to be valid and binding on the City as a result of any legislative or administrative action by a Governmental Authority with competent jurisdiction, or shall be declared, in a final nonappealable judgment by any court of c ompetent jurisdiction, to be null and void, invalid or unenforceable;
(ii) the validity or enforceability of any material provision of this Agreement or any Financing Document as to a System related to (A) payment of principal of or interest on any Loan, any Notes or any Term Loan or any Revenue Secured Debt, or (B) the validity
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or enforceability of the pledge of the Pledged Revenues or any other pledge or security interest created by the Ordinances shall be publicly contested by the City; or (iii) any ot her material provision of this Agreement or any other Financing Document as to a System, other than a provision described in clause (i) above, shall at any time for any reason cease to be valid and binding on the City, or shall be declared to be null and void as a result of a final non- appealable judgment by a court of competent jurisdiction or by any Governmental Authority having jurisdiction, or the validity or enforceability thereof shall be contested by the City;
(k) there shall occur a termination, winding up, liquidation or dissolution of the City or the consolidation or merger of the City with or into any Person; (l) a moratorium shall have been declared or announced (whether or not in writing) by the City or any Governmental Authority with respect to any Debt of a System; (m) as to either System, the powers of the City shall be limited in any way or the Resolutions or the Ordinances shall be modified or amended in any way without the prior written consent of the Lender , in either case, which prevents the City from fixing, charging or collecting rates and charges for the use and services of the relevant System in an amount sufficient to pay its Debts as they become due; (n) as to either System, any of S&P, Fitch or Moody’s shall have (i) assigned any Debt secured by a lien on Pledged Revenues a rating below A- (S&P and Fitch) or A3 (Moody’s), or (ii) suspended or withdrawn ratings of any other Debt secured by a lien on Pledged Revenues; or
(o) as to either System, any “event of default” under any Financing Document (as defined respectively therein) shall have occurred;
then, and in every such event, the Lender (i) may, by notice to the City, terminate the Commitment as to the Loan or Loans for any relevant System, or terminate the Commitment as to the Loan or Loans for all Systems if the Event of Default does not relate to a particular System, and the Commitment to the relevant extent shall thereupon terminate, and (ii) may, by notice to the City demand that the Notes relating to the Loan or Loans or Term Loans for the relevant System, or relating to all the Loans or Term Loans for the Systems if the Event of Default does not relate to a particular System, be immediately due and payable by the City and the City shall thereupon be obligated to pay immediately the outstanding principal amount of such Notes or Term Loans, as applicable (together with accrued interest thereon), without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the City; provided that in the case of any of the Events of Default specified in clause (g), (h), (k) or (l) above, without any notice to the City or any other act by the Lender , the Commitment shall thereupon immediately terminate and the related Notes or Term Loan s, as applicable, shall immediately be deemed to be due for payment by the City and the City shall be obligated to pay immediately the outstanding principal amount of the related Notes or Term Loans, as applicable, (together with accrued interest thereon) and with all other amounts then owing hereunder, in each case, without presentment, demand, protest
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or notice of any kind, all of which are hereby waived by the City; the Lender shall also be entitled to exercise any and all other rights and remedies available at law or in equity. Promptly following the taking of any action or the occurrence of any event or condition referred to above, the Lender shall give notice thereof to the City, but the failure to give any such notice or any delay in giving any such notice shall not impair the validity or effect of any action or event or condition referred to above.
Notwithstanding the provisions of the immediately preceding paragraph, (x) the Lender shall not cause the Notes relating to the Loan or Loans or Term Loans for the relevant System, or relating to all the Loans or Term Loans for the Systems if the Event of Default does not relate to a particular System, to become immediately due and payable by the City as described in clause (ii) of the immediately preceding paragraph until seven (7) days after the occurrence of an Event of Default specified in Section 6.01(a)(i), 6.01(e), 6.01(g), 6.01(h), 6.01(j)(i), 6.01(j)(ii), 6.01(k) or 6.01(l), and (y) the Lender shall notify the City of an acceleration at least one hundred and eighty (180) days prior thereto in the case of any Event of Default not specified in the immediately preceding clause (x). Notwithstanding the foregoing sentence of this paragraph, if any other holder or credit enhancer of Revenue Secured Debt or any counterparty under any Swap Contract related thereto causes any such Revenue Secured Debt to become immediately due and payable, the Lender may immediately, without notice, avail itself of the remedies set forth in clause (ii) of the immediately preceding paragraph (and all other remedies hereunder) and/or declare or cause to be declared the unpaid principal amount of all outstanding Notes relating to the Loan or Loans or Term Loans for the relevant System, or relating to all the Loans or Term Loans for the Systems if the Event of Default does not relate to a particular System, all interest accrued and unpaid thereon, and all other amounts owing or payable hereunder to be immediately due and payable.
Section 6.02. Effect of Event of De fault. The related Notes or Term Loans, as applicable, shall be immediately due and payable upon becoming subject to payment by the City pursuant to Section 6.01 hereof. From and after the occurrence of an Event of Default, all amounts owing to the Lender and all amounts owing to the Noteholders hereunder and amounts owing on any related Notes or Term Loans, as applicable and all other obligations of the City hereunder shall bear interest at the Default Rate.
Section 6.03. Right of Setoff. Upon the occurrence of an Event of Default, each Noteholder and their respective affiliates may, at any time and from time to time, without notice to the City or any other Person (any such notice being expressly waived), set off and appropriate and apply, against and on account of, any obligations and liabilities of the City relating to the Systems to the Noteholders or its affiliates arising under or connected w ith this Agreement and the Financing Documents, without regard to whether or not the Noteholders shall have made any demand therefor, and although such obligations and liabilities may be contingent or unmatured, any and all deposits (general or special, including but not limited to indebtedness evidenced by certificates of deposit, whether matured or unmatured, but not including trust accounts or accounts subject to a prior lien in favor of a creditor extending credit to the City) and any other indebtedness or other payment obligation at any time held or owing by the Noteholders or their respective affiliates to or for the credit or the account of the City relating to the Systems.
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ARTICLE VII
INCREASED COSTS AND TAXES
Section 7.01. Additional Costs.
(a) Increased Costs Generally. If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, capital or liquidity ratio, special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or advances, loans or other credit extended or participated in by, the Lender or any Noteholder;
(ii) subject to the Lender or any Noteholder to any Tax of any kind whatsoever with respect to this Agreement, the related Notes, any Loan or Term Loan made by it or the related Notes, or change the basis of taxation of payments to the Lender or such Noteholder in respect thereof (except for Indemnified Taxes or Other Taxes covered by Section 7.02 hereof and the imposition of, or any change in the rate of any Excluded Tax payable by the Lender or such Noteholder); or
(iii) impose on the Lender or any Noteholder any other condition, cost or expense affecting this Agreement or the related Notes or the Term Loans; and the result of any of the foregoing shall be to increase the cost to the Lender or such Noteholder of making Loans or Term Loans or maintaining the Commitment, or to reduce the amount of any sum received or receivable by the Lender or such Noteholder hereunder, under the related Notes, under any Loan or under the Term Loan(s) (whether of principal, interest or any other amount) then, upon written request of the Lender or such Noteholder a s set forth in clause (c) below, the City shall promptly pay to the Lender or such Noteholder, as the case may be, such additional amount or amounts as will compensate the Lender or such Noteholder, as the case may be, for such additional costs incurred or reduction suffered.
(b) Capital or Liquidity Requirements. If the Lender or any Noteholder determines that any Change in Law affecting the Lender or such Noteholder or the Lender’s or such Noteholder’s parent or holding company, if any, regarding capital or liquidity requirements, either (i) affects or would affect the amount of capital or liquidity to be maintained by the Lender or (ii) has or would have the effect of reducing the rate of return on the Lender’s or such Noteholder’s capital or the capital of such Lender’s or such Noteholder’s parent or holding company holding, if any, as a consequence of this Agreement, or of making Loans or Term Loans or maintaining the Commitment, to a level below that which the Lender or such Noteholder or the Lender’s or such Noteholder’s parent or holding company could have achieved but for such Change in Law (taking into consideration the Lender’s or such Noteholder’s policies and the policies of the Lender’s or such Noteholder’s parent or holding company with respec t to capital or liquidity adequacy), then from time to time upon written request of the Lender or such Noteholder as set forth in clause (c) below the City shall promptly pay to the Lender or such Noteholder, as the case may be, such
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additional amount or amounts as will compensate the Lender or such Noteholder or the Lender’s or such Noteholder’s parent or holding company for any such reduction suffered. (c) Certificates for Reimbursement. A certificate of the Lender or any Noteholder setting forth the amount or amounts necessary to compensate the Lender or any such Noteholder or the Lender’s or any such Noteholder’s parent or holding company, as the case may be, as specified in paragraph (a) or (b) of this Section in reasonable detail setting forth the computation of such compensation (including the reason therefor), and delivered to the City, shall be conclusive absent manifest error. The City shall pay the Lender or any such Noteholder, as the case may be, the amount shown as due on any such certificate within ten (10) days after receipt thereof. (d) Delay in Requests. Failure or delay on the part of the Lender or any such Noteholder to demand compensation pursuant to this Section shall not constitute a waiver of the Lender’s or any such Noteholder’s right to demand such compensation. (e) Survival. Without prejudice to the survival of any other agreement of the City hereunder, the agreements and obligations of the City contained in this Section shall survive the termination of this Agreement and the payment in full of the Loans and the obligations of the City thereunder and hereunder.
Section 7.02. Taxes.
(a) Any and all payments to the Lender or any Noteholder by the City hereunder or with respect to the Loans shall be made free and clear of and without deduction or withholding for any and all Indemnified Taxes. If the City shall be required by law to deduct or withhold any Indemnified Taxes imposed by the United States of America or any political subdivision thereof from or in respect of any sum payable hereunder or with respect to the Loans, then (i) the sum payable shall be increased as may be necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section) the Lender or such Noteholder receives an amount equal to the sum it would have received had no such deductions been made, (ii) the City shall make such deductions and (iii) the City shall timely pay the full amount deducted to the relevant taxation authority or other authority in accordance with applicable law. If the City shall make any payment under this Section to or for the benefit of the Lender or such Noteholder with respect to Indemnified Taxes and if the Lender or such Noteholde r shall claim any credit or deduction for such Indemnified Taxes against any other taxes payable by the Lender or such Noteholder to any taxing jurisdiction in the United States of America then the Lender or such Noteholder shall pay to the City an amount equal to the amount by which such other taxes are actually reduced; provided, that the aggregate amount payable by the Lender or such Noteholder pursuant to this sentence shall not exceed the aggregate amount previously paid by the City with respect to such Indemnified Taxes. In addition, the City agrees to pay any present or future stamp, recording or documentary taxes and any other excise or property taxes, charges or similar levies that arise under the laws of the United States of America or any state of the United States from any payment made hereunder or under the Loans or from the execution or delivery of this Agreement or the Notes, or otherwise with respect to this Agreement or the Loans (hereinafter referred to as “Other Taxes”). The Lender or such Noteholder shall provide to the City within a reasonable time a copy of any written notification it receives with respect to Indemnified Taxes or
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Other Taxes owing by the City to the Lender or such Noteholder hereunder; provided, that the Lender or such Noteholder’s failure to send such notice shall not relieve the City of its obligation to pay such amounts hereunder.
(b) The City shall, to the fullest extent permitted by law and subject to the provisions hereof, pay the Lender o r such Noteholder for the full amount of Indemnified Taxes and Other Taxes including any Indemnified Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this Section paid by the Lender or such Noteholder or any liability (including penalties, interest and expenses) arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally asserted; provided, that the City shall not be obligated to pay the Lender or such Noteholder for any penalties, interest or expenses relating to Indemnified Taxes or Other Taxes arising from the Lender or such Noteholder’s gross negligence or willful misconduct. The Lender or such Noteholder agrees to give notice to the City of the assertion of any claim against the Lender or such Noteholder relating to such Indemnified Taxes or Other Taxes as promptly as is practicable after being notified of such assertion; provided, that the Lender or such Noteholder’s failure to notify the City promptly of such assertion shall not relieve the City of its obligation under this Section. Payments by the City pursuant to this Section shall be made within ten (10) days from the date the Lender or such Noteholder makes written demand therefor, which demand shall be accompan ied by a certificate describing in reasonable detail the basis thereof; provided that the City shall not be required to compensate the Lender or any such Noteholder pursuant to this clause (b) for any Indemnified Taxes or Other Taxes incurred or suffered more than six (6) months prior to the date that the Lender or any such Noteholder, as the case may be, notifies the City of its payment of such Indemnified Taxes or Other Taxes, and of the Lender’s or any such Noteholder’s intention to claim indemnification therefor (except that if the imposition of such Indemnified Taxes or Other Taxes is retroactive, then the six- month period referred to above shall be extended to include the period of retroactive effect thereof). The Lender or such Noteholder agrees to r epay to the City any refund (including that portion of any interest that was included as part of such refund) with respect to Indemnified Taxes or Other Taxes paid by the City pursuant to this Section received by the Lender or such Noteholder for Indemnified Taxes or Other Taxes that were paid by the City pursuant to this Section and to contest, with the cooperation and at the expense of the City, any such Indemnified Taxes or Other Taxes which the Lender or such Noteholder or the City reasonably believes not to have been properly assessed. (c) Within thirty (30) days after the date of any payment of Indemnified Taxes by the City, the City shall furnish to the Lender or such Noteholder, as applicable, the original or a certified copy of a receipt evidencing payment thereof. (d) Without prejudice to the survival of any other agreement of the City hereunder, the agreements and obligations of the City contained in this Section shall survive the termination of this Agreement and the payment in full of the Loans and the obligations of the City thereunder and hereunder.
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ARTICLE VIII
MISCELLANEOUS
Section 8.01. Notices. All notices, requests, consents and other communications to either party hereunder shall be in writing (including bank wire, facsimile transmission or similar writing) and shall be given to such party at its address or facsimile number set forth on the signature page hereof or at such other address or facsimile number as such party may hereafter specify for the purpose by at least five Business Days’ prior notice to the other party. Each such notice, request, consent or other communication shall be effective (i) if given by facsimile, when such facsimile is transmitted to the facsimile number specified in this Section and the appropriate answerback is received, (ii) if given by mail, 72 hours after such communication is deposited in the mails with first class postage prepaid, addressed as aforesaid or (iii) if given by any other means, when delivered at the address specified in this Section; provided that notices to the Lender under Article II or Article VII shall not be effective until received.
Lender: Wells Fargo Bank, National Association
Wells Fargo Commercial Banking
420 Montgomery Street, 10th Floor
San Francisco, CA 94104
MAC: A0101-093
Telephone: (628) 260-3395
Attention: Jason G. Pollack
Director & Lead Commercial
Relationship Manager
E-mail: [email protected]
with a copy to: Wells Fargo Municipal Capital Strategies, LLC 550 S Tryon Street
Charlotte, NC 28202
Attention: Matthew Antunes
Telephone: (704) 410-0503
E-mail:[email protected]
Wire instructions: Wells Fargo Bank, National Association Roanoke Servicing Site – Commercial/Corporate
ABA: 121000248
Name: Wells Fargo Bank
Account Number: 00698314050720
Account Name: Wires in Process
Address: Roanoke, VA
Originator to Beneficiary Info.:
Cust Name: Anaheim Public Utilities
OBGR: 0262913097
OBGN: 0262913097
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If to City: City of Anaheim
200 S. Anaheim Blvd., Second Floor
Anaheim, California 92805
Telephone: (714) 765-5166
Telecopy: (714) 765-4105
Attention: City Clerk
with a copy to: City of Anaheim
201 South Anaheim Blvd., Suite 1101
Anaheim, California 92805
Telephone: (714) 765-4157
Telecopy: (714) 765-4138
Attention: Public Utilities General Manager
Section 8.02. No Waivers. No failure or delay by the Lender in exercising any right, power or privilege hereunder or under the Notes shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law.
Section 8.03. Expenses; Documentary Taxes; Indemnification. (a) The City shall pay (i) all out-of-pocket expenses of the Lender, including fees and disbursements of counsel for the Lender, in connection with the preparation of t his Agreement, any waiver or consent hereunder or any amendment hereof or any Default or alleged Default hereunder and (ii) all out-of-pocket expenses incurred by the Lender, including fees and disbursements of counsel, in connection with any Event of Defa ult or alleged Event of Default, and collection, bankruptcy, insolvency and other enforcement proceedings resulting therefrom. The City shall, to the extent permitted by law, indemnify the Lender against any transfer taxes, documentary taxes, assessments or charges made by any governmental authority by reason of the execution and delivery of this Agreement or the Notes.
(b) To the fullest extent permitted by applicable law, the City agrees to indemnify the Lender and each Noteholder and hold the Lender each Noteholder harmless from and against any and all liabilities, losses, damages, costs and expenses of any kind, including, without limitation, the reasonable fees and disbursements of counsel, which may be incurred by the Lender or such Noteholder in connection with or relating to or arising out of this Agreement or any other Financing Document, or any of the transactions contemplated hereby or thereby, or any actual or proposed use of proceeds of Loans hereunder; provided that the Lender or such Notehol der shall not have the right to be indemnified hereunder for its own gross negligence or willful misconduct as determined by a court of competent jurisdiction in a final and non-appealable judgment. Without prejudice to the survival of any other agreement of the City hereunder, the agreements and obligations of the City contained in this Section shall survive the termination of this Agreement and the payment in full of the Loans and the obligations of the City thereunder and hereunder.
Section 8.04. Amendments and Waivers. Any provision of this Agreement or the Electric System Notes and Water System Notes may be amended or waived if, but only if, such amendment
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or waiver is in writing and is signed by the City and the Lender, and unless, the Commitment shall have terminated, any party holding all or any portion of the Commitment ; provided that no such amendment or waiver shall (i) increase the Commitment or shorten the dur ation of the Commitment or affect any right or remedy to terminate the Commitment without the written consent of each party affected thereby, (ii) reduce the principal amount of any Loan or reduce the rate of interest thereon, or reduce any fees payable hereunder, without the written consent of each Noteholder affected thereby; (iii) postpone the scheduled date of payment of the principal amount of any Loan, or any interest thereon, or any fees payable hereunder, or reduce the amount of, waive or excuse any such payment, without the written consent of each Noteholder affected thereby, or (iv) change any of the provisions of this Section.
Section 8.05. Successors and Assigns.
(a) Successors and Assigns Generally . This Agreement is a continuing obligation and shall be binding upon the City, its successors, transferees and assigns and shall inure to the benefit of the Noteholders and their respective permitted successors, transferees and assigns. The City may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of the Lender. Each Noteholder may, in its sole discretion and in accordance with applicable Law, from time to time assign, sell or transfer in whole or in pa rt, this Agreement, its interest in the Electric System Notes and Water System Notes and the Financing Documents in accordance with the provisions of paragraph (b) or (c) of this Section; provided that the outstanding balance of any interest subject to suc h assignment, sale or tr ansfer shall not be less than $10,000,000 unless the City otherwise consents; provided, however, that no such consent shall be required if an Event of Default shall have occurred and be continuing. Each Noteholder may at any time a nd from time to time enter into participation agreements in accordance with the provisions of paragraph (d) of this Section. Each Noteholder may at any time pledge or assign a security interest subject to the restrictions of paragraph (e) of this Section. Wells Fargo Bank, National Association shall be the Lender hereunder until such time as the Majority Noteholder designates an alternate Person to serve as the Lender hereunder by delivery of written notice to the City and such Person accepts and agrees t o act as the Lender hereunder and under the Financing Documents. The Majority Noteholder may so designate an alternate Person to act as the Lender from time to time. Upon acceptance and notification thereof to the City, the successor to the Lender for such purposes shall thereupon succeed to and become vested with all of the rights, powers, privileges and responsibilities of the Lender, and Wells Fargo Bank, National Association or any other Person being replaced as the Lender shall be discharged from its duties and obligations as the Lender hereunder.
(b) Sales and Transfers by Noteholder to a Lender Transferee. Without limitation of the foregoing generality, a Noteholder may at any time sell or otherwise transfer to one or more transferees all or a portion of its interest in an Electric System Note or a Water System Note to a Person that is (i) a Lender Affiliate or (ii) a trust or other custodial arrangement established by the Lender or a Lender Affiliate, the owners of any beneficial interest in which are limited to “qualified institutional buyers” as defined in Rule 144A promulgated under the 1933 Act (each, a “Lender Transferee”). From and after the date of such sale or transfer, Wells Fargo Bank, National Association (and its successors) shall cont inue to have all of the rights of the Lender hereunder and under the other Financing Documents as if no such transfer or sale had occurred; provided,
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however, that (A) no such sale or transfer referred to in clause (b)(i) or (b)(ii) hereof shall in any way affect the obligations of the Lender hereunder, (B) the City shall be required to deal only with the Lender with respect to any matters under this Agreement and (C) in the case of a sale or transfer referred to in clause (b)(i) or (b)(ii) hereof, only the Lender shall be entitled to enforce the provisions of this Agreement against the City.
(c) Sales and Transfers by Noteholder to a Non- Lender Transferee. Without limitation of the foregoing generality, a Noteholder may at any time sell or otherwise transfer to one or more transferees which are not Lender Transferees but each of which constitutes (i) a “qualified institutional buyer” as defined in Rule 144A promulgated under the 1933 Act and (ii) a commercial bank organized under the laws of the United States, or any state thereof, or any other country which is a member of the Organization for Economic Cooperation and Development, or a political subdivision of any such country, and, in any such case, having a combined capital and surplus, determined as of the date of any transfer pursuant to this clause (c), of not less than $5,000,000,000 (each a “Non-Lender Transferee”) all or a portion of its interest in the applicable Electric System Note or Water System Note if (A) written notice of such sale or transfer, including that such sale or transfer is to a Non -Lender Transferee, together with addresses and related information with respect to the Non-Lender Transferee, shall have been given to the City and the Lender (if different than the Noteholder) by such selling Noteholder and Non- Lender Transferee, and (B) the Non-Lender Transferee shall have delivered to the City and the selling Noteholder, an investment letter in substantially the form delivered by t he Lender on the Effective Date (the “Investor Letter”).
From and after the date the City and the selling Noteholder have received written notice and an executed Investor Letter, (A) the Non-Lender Transferee thereunder shall be a party hereto and shall have the rights and obligations of a Noteholder hereunder and under the other Financing Documents, and this Agreement shall be deemed to be amended to the extent, but only to the extent, necessary to effect the addition of the Non- Lender Transferee, and any reference to the assigning Noteholder hereunder and under the other Financing Documents shall thereafter refer to such transferring Noteholder and to the Non- Lender Transferee to the extent of their respective interests, and (B) if the transferring Noteholder no longer owns any interest in ei ther the Electric System Notes or the Water System Notes, then it shall relinquish its rights and be released from its obligations hereunder and under the Financing Documents. (d) Participations. The Lender shall have the right to grant participations in all or a portion of the Lender’s interest in the Electric System Notes and Water System Notes, this Agreement and the other Financing Documents to one or more other banking institutions; provided, however, that (i) no such participation by any such partici pant shall in any way affect the obligations of the Lender hereunder and (ii) the City shall be required to deal only with the Lender, with respect to any matters under this Agreement, the Electric System Notes, the Water System Notes, and the other Financ ing Documents and no such participant shall be entitled to enforce any provision hereunder against the City.
(e) Certain Pledges. The Lender may at any time pledge or grant a security interest in all or any portion of its rights under the Electric System Notes, the Water System Notes, this Agreement and the Financing Documents to secure obligations of the Lender, including any pledge
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or assignment to secure obligations to a Federal Reserve Bank; provided that no such pledge or assignment shall release the Lender from any of its obligations hereunder or substitute any such pledgee or assignee for the Lender as a party hereto.
Section 8.06. Governing Law; Venue. (a) This Agreement shall be construed in accordance with and governed by the internal laws of the State of California. (b) Venue shall lie in any Federal District Court sitting in Los Angeles, California.
Section 8.07. Counterparts; Integration. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement constitutes the entire agreement and understanding among the parties hereto and supersedes any and all prior agreements and understandings, oral or written, relating to the subject matter hereof.
Section 8.08. Judicial Reference. I
F ANY ACTION OR PROCEEDING IS FILED IN A COURT OF
THE STATE OF CALIFORNIA BY OR AGAINST ANY PARTY HERETO IN CONNECTION WITH ANY OF THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR ANY OTHER FINANCING DOCUMENT, THE
COURT SHALL , AND IS HEREBY DIRECTED TO , MAKE A GENERAL REFERENCE PURSUANT TO CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 638 TO A REFEREE (WHO SHALL BE A SINGLE
ACTIVE OR RETIRED J UDGE) TO HEAR AND DETERMINE ALL OF THE ISSUES IN SUCH ACTION OR
PROCEEDING (WHETHER OF FACT OR OF LAW) AND TO REPORT A STATEMENT OF DECISION, PROVIDED
THAT AT THE OPTION OF ANY PARTY TO SUCH PROCEEDING , ANY SUCH ISSUES PERTAINING TO A “PROVISIONAL REMEDY” AS DEFINED IN CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 1281.8 SHALL BE HEARD AND DETERMINED BY THE COURT.
Section 8.09. Severability. The invalidity or unenforceability of anyone or more phrases, sentences, clauses, or Sections contained in this Agreement shall not affect the validity or enforceability of the remaining portions of this Agreement, or any part thereof.
Section 8.10. Government Regulations. The Lender hereby notifies the City that pursuant to the requirements of the Patriot Act or any other Anti-Money Laundering Laws, it is required to obtain, verify and record information that identifies the City, which information includes the name and address of the City and other information that will allow the Lender to identify the City in accordance with the Patriot Act or such Anti-Money Laundering Laws. The City hereby agrees that it shall promptly provide such information upon request by the Lender. The City shall, promptly following a request by the Lender, provide all documentation and other information that the Lender reasonably requests in order to comply with its ongoing obligations under applicable law or regulation, including, without limitation, “know your customer” and anti-money laundering rules and regulations, including the Patriot Act, and shall comply.
Section 8.11. No Advisory or Fiduciary Relationship. In connection with all aspects of each transaction contemplated hereby (including in connection with any amendment, waiver or other modification hereof or of any other Financing Document), the City acknowledges and agrees, and acknowledges its Affiliates’ understanding, that: (a) (i) the services regarding this Agreement provided by the Lender and any Affiliate thereof are arm’s -length comme rcial transactions
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between the City, on the one hand, and the Lender and its Affiliates, on the other hand, (ii) the City has consulted its own legal, accounting, regulatory, tax, financial and other advisors to the extent it has deemed appropriate, and (i ii) the City is capable of evaluating, and understands and accepts, the terms, risks and conditions of the transactions contemplated hereby and by the other Financing Documents; (b) (i) the Lender and its Affiliates each is and has been acting solely as a principal for its own interests and, except as expressly agreed in writing by the relevant parties, has not been, is not, and will not be acting as an advisor (municipal, financial or otherwise), agent or fiduciary, for the City, or any other Person and the Lender and its Affiliates have no fiduciary duty pursuant to Section 15B of the Securities Exchange Act of 1934 to the City with respect to this transaction and the discussions, undertakings and procedures leading thereto (irrespective of whether the Lender or any of its Affiliates has provided other services or is currently providing other services to the City on other matters), (ii) neither the Lender nor any of its Affiliates has any obligation to the City with respect to the transactions contemplated hereby except those obligations expressly set forth herein and in the other Financing Documents, (iii) the only obligations the Lender and its Affiliates have has to the City with respect to this transaction are set forth in this Agreement; and (iv) the Lender is not recommending that the City take an action with respect to the transaction described in this Agreement and the other Financing Documents; and (c) the Lender and its Affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the City, and neither the Lender nor any of its Affiliates has any obligation to disclose any of such interests to the City. To the fullest extent permitted by law, the City , hereby waives and releases any claims that it may have against the Lender or any of its Affiliates with respect to any breach or alleged breach of agency or fiduciary duty in connection with any aspect of any transactions contemplated hereby.
Section 8.12. Fees and Expenses. (a) No later than thirty (30) days after the Effective Date, the City shall pay to Chapman and Cutler LLP, as counsel to the Lender, its legal fees and expenses incurred in connection with the preparation, review, negotiation, executi on and delivery of the Financing Documents. Legal fees shall be paid directly to Chapman and Cutler LLP, in accordance with its instructions.
(b) To the extent not paid pursuant to Section 3.01( h) hereof, the City shall pay any fee payable to the California Debt and Investment Advisory Commission by the Lender with respect to the Notes, the Electric System Notes and Water System Notes.
Section 8.13. EMMA Postings. In the event the City files with E MMA, this Agreement, any Financing Documents or any description of the material terms thereof or notice of any agreement to covenants, events of default, remedies, priority rights or other similar terms, either voluntarily or as required pursuant a continu ing disclosure agreement or Rule 15c2- 12 promulgated pursuant to the Securities Exchange Act of 1934, as amended (the “Rule”) (each such posting, an “EMMA Posting”), the City shall (i) provide the Lender with a copy of each EMMA Posting prior to submitting or posting on EMMA and (ii) shall not file or permit the filing of any EMMA Posting that includes Confidential Information. The City acknowledges and agrees that although the Lender may request review, edits or redactions of such materials prior to filing, the Lender is not responsible for the City’s or any other entity’s (including, but not limited to, any broker-dealer’s) compliance or noncompliance (or any claims, losses or liabilities arising
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therefrom) with any continuing disclosure agreement or any a pplicable securities or other laws, including, but not limited to, those relating to the Rule.
Section 8.14. Acknowledgment Regarding Any Supported QFCs . To the extent that the Financing Documents provide support, through a guarantee or otherwise, for Swap Contract or any other agreement or instrument that is a QFC (such support, “QFC Credit Support” and, each such QFC, a “Supported QFC”), the parties acknowledge and agree as follows with respect to the resolution power of the FDIC under the Federal Deposit Insurance Act and Title II of the Dodd- Frank Wall Street Reform and Consumer Protection Act (together with the regulations promulgated thereunder, the “U .S. Special Resolution Regimes”) in respect of such Supported QFC and QFC Credit Support (with the provisions below applicable notwithstanding that the Financing Documents and any Supported QFC may in fact be stated to be governed by the laws of the State of New York and/or of the United States or any other state of the United States):
(a) In the event a Covered Entity that is party to a Supported QFC (each, a “ Covered Party”) becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer of such Supported QFC and the benefit of such QFC Credit Support (and any interest and obligation in or under such Supported QFC and such QFC Credit Support, and any rights in property securing such Supported QFC or such QFC Credit Support) from such Covered Party will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if the Supported QFC and such QFC Credit Support (and any such interest, obligation and rights in property) were governed by the laws of the United States or a state of the United States. In the event a Covered Party or a BHC Act Affiliate of a Covered Party becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights under the Financing Documents that might otherwise apply to such Supported QFC or any QFC Credit Support that may be exercised against such Covered Party are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if th e Supported QFC and the Financing Documents were governed by the laws of the United States or a state of the United States.
(b) As used in this Section 8.14, the following terms have the following meanings:
“BHC Act Affiliate” of a party means an “affiliate” (as such term is defined under, and interpreted in accordance with, 12 U.S.C. 1841(k)) of such party. “Covered Entity” means any of the following:
(i) a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b);
(ii) a “covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or
(iii) a “covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b).
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“Default Right” has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable. “QFC” has the meaning assigned to the term “qualified financial contract” in, and shall be interpreted in accordance with, 12 U.S.C. 5390(c)(8)(D).
Section 8.15. Amendment and Restatement . This Agreement amends and restates in its entirety the Existing Agreement and from and after the Effect ive Date all references made to the Existing Agreement in any other instrument or document shall without more, be deemed to refer to this Agreement. This Agreement shall become effective and supersede all provisions of the Existing Agreement upon the execution of this Agreement by each of the parties hereto and the fulfillment of all conditions precedent hereof but is not intended to be or operate as a novation or an accord and satisfaction of the Existing Agreement or the indebtedness, obligations and liabilities of the City evidenced or provided for thereunder.
[S
IGNATURE PAGE FOLLOWS]
[Signature Page to Amended and Restated Revolving Credit Agreement] IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.
CITY OF ANAHEIM
By: ____________________________________
Name: _______________________________
Title: ________________________________
(SEAL)
Attest:
By: _________________________________
Name: ___________________________
Title: City Clerk
WELLS FARGO BANK, NATIONAL ASSOCIATION
By: ____________________________________
Name: Jason G. Pollack
Title: Director
EXHIBIT A
FORM OF NOTICE OF BORROWING
[Date]
TO: Wells Fargo Bank, National Association
Wells Fargo Commercial Banking
420 Montgomery Street, 10th Floor
San Francisco, CA 94104
MAC: A0101-093
Telephone: (628) 260-3395
Attention: Jason G. Pollack
Director & & Lead Commercial
Relationship Manager
E-mail:[email protected]
Wells Fargo Municipal Capital Strategies, LLC,
550 S Tryon Street
Charlotte, NC 28202
Telephone: (704) 410-0503
Attention: Matthew Antunes
E-mail: [email protected]
FROM: City of Anaheim
Re: Amended and Restated Revolving Credit Agreement (as amended, supplemented, restated or otherwise modified from time to time, the “Credit Agreement”)
dated as of [______], 2023 between
the City of Anaheim and the Lender
We hereby give notice, pursuant to Section 2.02(a) of the Credit Agreement, of the following proposed Borrowing:
Date of Borrowing .......................................................................................... [Date] Loan Principal Amount ....................................................................... [$xx,xxx,xxx] Amount of Loans Outstanding .......................................................... [$xxx,xxx,xxx] The Loan Maturity Date.................................................................................. [Date]
A-2
The Proceeds of such Loan are to be wire transferred to the following account:
_________________________
_________________________
_________________________
_________________________
The Loan constituting such Borrowing
is to be ..................................... [Electric System Loan] [Water System Loan] The Rate for such Loan is to be Daily Simple SOFR ................................................
The Loan constituting such Borrowing is
to be ...................................................... [Taxable Loan] or [Tax-exempt Loan] The Loan constituting such Borrowing is
to be .................................................... [Borrowing] or [Refunding Borrowing] The rates of interest on the Loan will not exceed the maximum rate permitted by law.
Terms used herein have the meanings assigned to them in the Credit Agreement.
CITY OF ANAHEIM
By: ____________________________________
Name: _______________________________
Title: ________________________________
EXHIBIT B
FORM OF NOTICE OF CHANGE OF LENDER ACCOUNT
[Date]
TO: Wells Fargo Bank, National Association (the “Lender”) FROM: City of Anaheim
Re: Amended and Restated Revolving Credit Agreement (as amended, supplemented, restated or otherwise modified from time to time, the “Credit Agreement”)
dated as of [_________], 2023 between
the City of Anaheim and the Lender
We hereby give notice, pursuant to Section 2.02(c) of the Credit Agreement, of a change to the account to which the proceeds of Borrowings are to be wire transferred. From and after the date hereof, the proceeds of all Borrowings should be wire transferred to the following account:
[account information to be inserted]
Terms used herein have the meanings assigned to them in the Credit Agreement.
CITY OF ANAHEIM
By: ____________________________________
Name: _______________________________
Title: ________________________________
EXHIBIT C
TRANSFER OF THIS NOTE IS RESTRICTED AS SET FORTH IN THE AGREEMENT
FORM OF ELECTRIC SYSTEM TAXABLE NOTE
CITY OF ANAHEIM ELECTRIC REVENUE ANTICIPATION NOTE
$100,000,000 Anaheim, California [_________], 2023
CUSIP: 32542KD35
For value received, the CITY OF ANAHEIM (the “City”), a municipal corporation organized and existing under a charter duly and regularly adopted pursuant to the provisions of the Constitution of the State of California, promises to pay, solely from the funds hereafter referred to, to Wells Fargo Bank, Natio nal Association (the “Lender”), at the address provided in the Agreement (hereinafter defined), (i) the principal sum of O NE HUNDRED MILLION DOLLARS ($100,000,000) or, if less, the aggregate unpaid principal amount of all Taxable Loans related to the Electric System made by the Lender to the City, payable at such times as are specified in the Agreement, and (ii) interest on the unpaid principal amount of each Taxable Loan related to the Electric System made by the Lender, from the date of each such Taxable Loan related to the Electric System until such principal amount is paid in full, at such interest rates, and payable at such times, as are specified in the Agreement, in lawful money of the United States of America, in federal or other immediately available funds, from the date hereof until this Note is paid in full, in like money and funds at such office.
The City promises to make all other payments owed by it under the Agreement. All capitalized terms used herein and not otherwise defined herein shall ha ve the meanings specified in the Agreement.
This Note is subject to prepayment, and amounts prepaid prior to the last day of the Revolving Credit Period may be reborrowed, all pursuant to the terms and under the conditions of the Amended and Restated Revolving Credit Agreement dated as of [________] , 2023 (as amended, supplemented, restated or otherwise modified from time to time, the “Agreement”), between the City and the Lender. Reference is made to the Agreement for provisions as to the prepayment hereof and for reborrowing. Reference is also made to the Agreement for provisions providing for additional interest and other amounts to be payable under certain circumstances. If the Noteholder enforces this Note upon default, the City shall reimburse the Noteholder for reasonable costs and expenses in curred by the Noteholder in collection, including attorneys fees and expenses as set out in Section 2.06 and 8.03 of the Agreement. This Note shall be construed in accordance with and governed by the internal laws of the State of California.
The parties h ereto, including the undersigned maker and all guarantors, endorsers and pledgors that may exist at any time with respect hereto, hereby waive presentment, demand, notice,
- 2 -
protest and all other demands and notices in connection with the delivery, acceptance, performance and enforcement of this Note and assent to the extensions of the time of payment or forbearance or other indulgence without notice.
This Note, including the interest hereon, is payable solely from and secured by a lien upon the pledge of certain revenues and certain other available funds and money of the City, all as set forth in Section 4.07 of the Agreement and the Electric System Ordinance (as defined in the Agreement). This Note does not constitute a general obligation or indebtedness of the City within the meaning of any constitutional, charter, or statutory limitations or provisions (and the Noteholder hereof shall never have the right to require or compel the levy of ad valorem taxes for the payment of the principal of and interest on this Note). Further reference is made to the Agreement and the Electric System Ordinance for the provisions relating to the security of this Note and the duties and obligations of the City.
It is hereby certified, recited and declared that all conditions, acts and things essential to the validity of this Note exist, have happened and have been done and that every requirement of law affecting the issuance hereof has been duly complied with.
This Note is issued in replacement for and amends and restates in it s entirety that certain $100,000,000 Electric System Taxable Note dated January 4, 2021 from the City to the Lender (the “Existing Note” ). All amounts outstanding under such Existing Note constitute amounts outstanding under this Note. This Note shall become effective and supersede all provisions of the Existing Note upon the issuance of this Note by the City and the fulfillment of all conditions precedent hereof but is not intended to be or operate as a novation or an accord and satisfaction of the Existing Note or the indebtedness, obligations and liabilities of the City evidenced or provided for thereunder. The City agrees that this Note does not extinguish or discharge the obligations of the City under the Existing Note. Reference to this specific Note need not be made in any agreement, document, instrument, letter or certificate, the Existing Note itself or any communication issued or made pursuant to or with respect to the Existing Notes, from and after the date hereof, all references made to the Existing Note in any instrument or document shall be deemed to refer to this Note.
[S
IGNATURE PAGE TO FOLLOW]
[SIGNATURE PAGE TO ELECTRIC SYSTEM TAXABLE NOTE]
Made and executed at Anaheim, California, as of the date and year first above written.
CITY OF ANAHEIM
By: ___________________________________
Public Utilities General Manager
ATTEST:
By:
City Clerk
(Seal)
A
UTHENTICATED:
By:
Public Utilities Assistant General Manager - Finance
and Energy Resources, as Issuing and Paying Agent
EXHIBIT D
TRANSFER OF THIS NOTE IS RESTRICTED AS SET FORTH IN THE AGREEMENT
FORM OF ELECTRIC SYSTEM TAXABLE TERM NOTE
CITY OF ANAHEIM ELECTRIC REVENUE ANTICIPATION NOTE
$100,000,000 Anaheim, California [________], 2023
CUSIP: 32542KF82
For value received, the CITY OF ANAHEIM (the “City”), a municipal corporation organized and existing under a charter duly and regularly adopted pursuant to the provisions of the Constitution of the State of California, promises to pay, solely from the funds hereafter referred to, to Wells Fargo Bank, National Association (the “Lender”), at the address provided in the Agreement (hereinafter defined), (i) the principal sum of O NE HUNDRED MILLION DOLLARS ($100,000,000) or, if less, the aggregate unpaid principal amount of the Term Loan related to the Electric System made by the Lender to the C ity, payable at such times as are specified in the Agreement, and (ii) interest on the unpaid principal amount of the Term Loan related to the Electric System made by the Lender, from the date of the Term Loan related to the Electric System until such principal amount is paid in full, at such interest rates, and payable at such times, as are specified in the Agreement, in lawful money of the United States of America, in federal or other immediately available funds, from the date hereof until this Note is paid in full, in like money and funds at such office.
The City promises to make all other payments owed by it under the Agreement. All capitalized terms used herein and not otherwise defined herein shall have the meanings specified in the Agreement.
This Note is subject to prepayment, all pursuant to the terms and under the conditions of the Amended and Restated Revolving Credit Agreement dated as of [________] , 2023 ( as amended, supplemented, restated or otherwise modified from time to time, the “Agreement”), between the City and the Lender. Reference is made to the Agreement for provisions as to the prepayment hereof. Reference is also made to the Agreement for provi sions providing for additional interest and other amounts to be payable under certain circumstances. If the Noteholder enforces this Note upon default, the City shall reimburse the Noteholder for reasonable costs and expenses incurred by the Noteholder in collection, including attorneys fees and expenses as set out in Section 2.06 and 8.03 of the Agreement. This Note shall be construed in accordance with and governed by the internal laws of the State of California.
The parties hereto, including the undersi gned maker and all guarantors, endorsers and pledgors that may exist at any time with respect hereto, hereby waive presentment, demand, notice, protest and all other demands and notices in connection with the delivery, acceptance, performance
- 2 -
and enforcement of this Note and assent to the extensions of the time of payment or forbearance or other indulgence without notice.
This Note, including the interest hereon, is payable solely from and secured by a lien upon the pledge of certain revenues and certain ot her available funds and money of the City, all as set forth in Section 4.07 of the Agreement and the Electric System Ordinance (as defined in the Agreement). This Note does not constitute a general obligation or indebtedness of the City within the meaning of any constitutional, charter, or statutory limitations or provisions (and the Noteholder hereof shall never have the right to require or compel the levy of ad valorem taxes for the payment of the principal of and interest on this Note). Further referenc e is made to the Agreement and the Electric System Ordinance for the provisions relating to the security of this Note and the duties and obligations of the City.
It is hereby certified, recited and declared that all conditions, acts and things essential to the validity of this Note exist, have happened and have been done and that every requirement of law affecting the issuance hereof has been duly complied with.
This Note is issued in replacement for and amends and restates in its entirety that certain $100,000,000 Electric System Taxable Term Note dated January 4, 2021 from the City to the Lender (the “Existing Note” ). All amounts outstanding under such Existing Note constitute amounts outstanding under this Note . This Note shall become effective and supersede all provisions of the Existing Note upon the issuance of this Note by the City and the fulfillment of all conditions precedent hereof but is not intended to be or operate as a novation or an accord and satisfaction of the Existing Note or the indebte dness, obligations and liabilities of the City evidenced or provided for thereunder . The City agrees that this Note does not extinguish or discharge the obligations of the City under the Existing Note. Reference to this specific Note need not be made in any agreement, document, instrument, letter or certificate, the Existing Note itself or any communication issued or made pursuant to or with respect to the Existing Notes, from and after the date hereof, all references made to the Existing Note in any instrument or document shall be deemed to refer to this Note.
[S
IGNATURE PAGE TO FOLLOW]
[SIGNATURE PAGE TO ELECTRIC SYSTEM TAXABLE TERM NOTE]
Made and executed at Anaheim, California, as of the date and year first above written.
CITY OF ANAHEIM
By: ___________________________________
Public Utilities General Manager
ATTEST:
By:
City Clerk
(Seal)
A
UTHENTICATED:
By:
Public Utilities Assistant General Manager - Finance
and Energy Resources, as Issuing and Paying Agent
EXHIBIT E
TRANSFER OF THIS NOTE IS RESTRICTED AS SET FORTH IN THE AGREEMENT
FORM OF ELECTRIC SYSTEM TAX-EXEMPT NOTE
CITY OF ANAHEIM ELECTRIC REVENUE ANTICIPATION NOTE
$100,000,000 Anaheim, California [_________], 2023
CUSIP: 32542KE18
For value received, the CITY OF ANAHEIM (the “City”), a municipal corporation organized and existing under a charter duly and regularly adopted pursuant to the provisions of the Constitution of the State of California, promises to pay, solely from the funds hereafter referred to, to Wells Fargo Bank, National Association (the “Lender”), at the address provided in the Agreement (hereinafter defined), (i) the principal sum of O NE HUNDRED MILLION DOLLARS ($100,000,000) or, if less, the aggregate unpaid principal amount of all Tax-exempt Loans related to the Electric System made by the Lender to the City, payable at such times as are specified in the Agreement, and (ii) interest on the unpaid principal amount of each Tax -exempt Loan related to the Electric System made by the Lender, from the date of each such Tax -exempt Loan related to the Electric System until such principal amount is paid in full, at such interest rates, and payable at such times, as are specified in the Agreement, in lawful money of the United States of America, in federal or other immediately available funds, from the date hereof until this Note is paid in full, in like money and funds at such office.
The City promises to make all other payments owed by it under the Agreement. All capitalized terms used herein and not otherwise defined herein shall have the meanings specified in the Agreement.
This Note is subject to prepayment, and amounts prepaid prior to the last day of the Revolving Credit Period may be reborrowed, all pursuant to the terms and under the conditions of the Amended and Restated Revolving Credit Agreement dated as of [________] , 2023 ( as amended, supplemented, restated or otherwise modified from time to time, the “Agreement”), between the City and the Lender. Reference is mad e to the Agreement for provisions as to the prepayment hereof and for reborrowing. Reference is also made to the Agreement for provisions providing for additional interest and other amounts to be payable under certain circumstances. If the Noteholder enfor ces this Note upon default, the City shall reimburse the Noteholder for reasonable costs and expenses incurred by the Noteholder in collection, including attorneys fees and expenses as set out in Section 2.06 and 8.03 of the Agreement. This Note shall be c onstrued in accordance with and governed by the internal laws of the State of California.
The parties hereto, including the undersigned maker and all guarantors, endorsers and pledgors that may exist at any time with respect hereto, hereby waive presentment, demand, notice,
- 2 -
protest and all other demands and notices in connection with the delivery, acceptance, performance and enforcement of this Note and assent to the extensions of the time of payment or forbearance or other indulgence without notice.
This Note, including the interest hereon, is payable solely from and secured by a lien upon the pledge of certain revenues and certain other available funds and money of the City, all as set forth in Section 4.07 of the Agreement and the Electric System Ordinance (as defined in the Agreement). This Note does not constitute a general obligation or indebtedness of the City within the meaning of any constitutional, charter, or statutory limitations or provisions (and the Noteholder hereof shall never have the right to require or compel the levy of ad valorem taxes for the payment of the principal of and interest on this Note). Further reference is made to the Agreement and the Electric System Ordinance for the provisions relating to the security of this Note and the duties and obligations of the City.
It is hereby certified, recited and declared that all conditions, acts and things essential to the validity of this Note exist, have happened and have been done and that every requirement of law affecting the issuance hereof has been duly complied with.
This Note is issued in replacement for and amends and restates in its entirety that certain $100,000,000 Electric System Tax-Exempt Note dated January 4, 2021 from the City to the Lender (the “Existing Note” ). All amounts outstanding under such Existing Note constitute amounts outstanding under this Note. This Note shall become effective and supersede all provisions of the Existing Note upon the issuance of this Note by the City and the fulfillment of all conditions precedent hereof but is not intended to be or operate as a novation or an accord and satisfaction of the Existing Note or the indebtedness, obligations and liabilities of the City evidenced or provided for thereunder. The City agrees that this Note does not extinguish or discharge the obligations of the City under the Existing Note. Reference to this specific Note need not be made in any agreement, document, instrument, letter or certificate, the Existing Note itself or any communication issued or made pursuant to or with respect to the Existing Notes, from and after the date hereof, all references made to the Existing Note in any instrument or document shall be deemed to refer to this Note.
[S
IGNATURE PAGE TO FOLLOW]
[SIGNATURE PAGE TO ELECTRIC SYSTEM TAX-EXEMPT NOTE]
Made and executed at Anaheim, California, as of the date and year first above written.
CITY OF ANAHEIM
By: ___________________________________
Public Utilities General Manager
ATTEST:
By:
City Clerk
(Seal)
A
UTHENTICATED:
By:
Public Utilities Assistant General Manager - Finance
and Energy Resources, as Issuing and Paying Agent
EXHIBIT F
TRANSFER OF THIS NOTE IS RESTRICTED AS SET FORTH IN THE AGREEMENT
FORM OF WATER SYSTEM TAXABLE NOTE
CITY OF ANAHEIM WATER REVENUE ANTICIPATION NOTE
$100,000,000 Anaheim, California [________], 2023
CUSIP: 32596HF82
For value received, the CITY OF ANAHEIM (the “City”), a municipal corporation organized and existing under a charter duly and regularly adopted pursuant to the provisions of the Constitution of the State of California, promises to pay, solely from the funds hereafter referred to, to Wells Fargo Bank, Natio nal Association (the “Lender”), at the address provided in the Agreement (hereinafter defined), (i) the principal sum of O NE HUNDRED MILLION DOLLARS ($100,000,000) or, if less, the aggregate unpaid principal amount of all Taxable Loans related to the Water System made by the Lender to the City, payable at such times as are specified in the Agreement, and (ii) interest on the unpaid principal amount of each Taxable Loan related to the Water System made by the Lender, from the date of each such Taxable Loan related to the Water System until such principal amount is paid in full, at such interest rates, and payable at such times, as are specified in the Agreement, in lawful money of the United States of America, in federal or other immediately available funds, from the date hereof until this Note is paid in full, in like money and funds at such office.
The City promises to make all other payments owed by it under the Agreement. All capitalized terms used herein and not otherwise defined herein shall have the me anings specified in the Agreement.
This Note is subject to prepayment, and amounts prepaid prior to the last day of the Revolving Credit Period may be reborrowed, all pursuant to the terms and under the conditions of the Amended and Restated Revolving Credit Agreement dated as of [________] , 2023 ( as amended, supplemented, restated or otherwise modified from time to time, the “Agreement”), between the City and the Lender. Reference is made to the Agreement for provisions as to the prepayment hereof and for reborrowing. Reference is also made to the Agreement for provisions providing for additional interest and other amounts to be payable under certain circumstances. If the Noteholder enforces this Note upon default, the City shall reimburse the Noteholde r for reasonable costs and expenses incurred by the Noteholder in collection, including attorneys fees and expenses as set out in Section 2.06 and 8.03 of the Agreement. This Note shall be construed in accordance with and governed by the internal laws of the State of California.
The parties hereto, including the undersigned maker and all guarantors, endorsers and pledgors that may exist at any time with respect hereto, hereby waive presentment, demand, notice,
- 2 -
protest and all other demands and notices in connection with the delivery, acceptance, performance and enforcement of this Note and assent to the extensions of the time of payment or forbearance or other indulgence without notice.
This Note, including the interest hereon, is payable solely from and secured by a lien upon the pledge of certain revenues and certain other available funds and money of the City, all as set forth in Section 4.07 of the Agreement and the Water System Ordinance (as defined in the Agreement). This Note does not constitute a general obligation or indebtedness of the City within the meaning of any constitutional, charter, or statutory limitations or provisions (and the Noteholder hereof shall never have the right to require or compel the levy of ad valorem taxes for the payment of the principal of and interest on this Note). Further reference is made to the Agreement and the Water System Ordinance for the provisions relating to the security of this Note and the duties and obligations of the City.
It is hereby certified, recited an d declared that all conditions, acts and things essential to the validity of this Note exist, have happened and have been done and that every requirement of law affecting the issuance hereof has been duly complied with.
This Note is issued in replacement f or and amends and restates in its entirety that certain $100,000,000 Water System Taxable Note dated January 4, 2021 from the City to the Lender (the “Existing Note” ). All amounts outstanding under such Existing Note constitute amounts outstanding under this Note. This Note shall become effective and supersede all provisions of the Existing Note upon the issuance of this Note by the City and the fulfillment of all conditions precedent hereof but is not intended to be or operate as a novation or an accord and satisfaction of the Existing Note or the indebtedness, obligations and liabilities of the City evidenced or provided for thereunder. The City agrees that this Note does not extinguish or discharge the obligations of the City under the Existing Note. Reference to this specific Note need not be made in any agreement, document, instrument, letter or certificate, the Existing Note itself or any communication issued or made pursuant to or with respect to the Existing Notes, from and after the date hereof, all references made to the Existing Note in any instrument or document shall be deemed to refer to this Note.
[S
IGNATURE PAGE TO FOLLOW]
[SIGNATURE PAGE TO WATER SYSTEM TAXABLE NOTE]
Made and executed at Anaheim, California, as of the date and year first above written.
CITY OF ANAHEIM
By: ___________________________________
Public Utilities General Manager
ATTEST:
By:
City Clerk
(Seal)
A
UTHENTICATED:
By:
Public Utilities Assistant General Manager - Finance
and Energy Resources, as Issuing and Paying Agent
EXHIBIT G
TRANSFER OF THIS NOTE IS RESTRICTED AS SET FORTH IN THE AGREEMENT
FORM OF WATER SYSTEM TAXABLE TERM NOTE
CITY OF ANAHEIM WATER REVENUE ANTICIPATION NOTE
$100,000,000 Anaheim, California [_________], 2023
CUSIP: 32596HH49
For value received, the CITY OF ANAHEIM (the “City”), a municipal corporation organized and existing under a charter duly and regularly adopted pursuant to the provisions of the Constitution of the State of California, promises to pay, solely from the funds hereafter referred to, to Wells Fargo Bank, National Association (the “Lender”), at the address provided in the Agreement (hereinafter defined), (i) the principal sum of O NE HUNDRED MILLION DOLLARS ($100,000,000) or, if less, the aggregate unpaid principal amount of the Term Loan related to the Water System made by the Lender to the City, payable at such times as are specified in the Agreement, and (ii) interest on the unpaid principal amount of the Term Loan related to the Water System made by the Lender, from the date of the Term Loan related to the Water System until such principa l amount is paid in full, at such interest rates, and payable at such times, as are specified in the Agreement, in lawful money of the United States of America, in federal or other immediately available funds, from the date hereof until this Note is paid in full, in like money and funds at such office.
The City promises to make all other payments owed by it under the Agreement. All capitalized terms used herein and not otherwise defined herein shall have the meanings specified in the Agreement.
This Note is subject to prepayment, all pursuant to the terms and under the conditions of the Amended and Restated Revolving Credit Agreement dated as of [________] , 2023 ( as amended, supplemented, restated or otherwise modified from time to time, the “Agreement”), between the City and the Lender. Reference is made to the Agreement for provisions as to the prepayment hereof. Reference is also made to the Agreement for provisions providing for additional interest and other amounts to be payable under certain circumstances. If the Noteholder enforces this Note upon default, the City shall reimburse the Noteholder for reasonable costs and expenses incurred by the Noteholder in collection, including attorneys fees and expenses as set out in Section 2.06 and 8.03 of the Agreement. This Note shall be construed in accordance with and governed by the internal laws of the State of California.
The parties hereto, including the undersigned maker and all guarantors, endorsers and pledgors that may exist at any time with respect hereto, hereby waive presentment, demand, notice, protest and all other demands and notices in connection with the delivery, acceptance, performance
- 2 -
and enforcement of this Note and assent to the extensions of the time of payment or forbearance or other indulgence without notice.
This Note, including the interest hereon, is payable solely from and secured by a lien upon the pledge of certain revenues and certain other available funds and money of the City, all as set forth in Section 4.07 of the Agreement and the Water System Ordinance (as defined in the Agreement). This Note does not constitute a general obligation or indebtedness of the City within the meaning of any constitutional, charter, or statutory limitations or provisions (and the Noteholder hereof shall never have the right to require or compel the levy of ad valorem taxes for the payment of the principal of and interest on this Note). Further reference is made to the Agreement and the Water System Ordinance for the provisions relating to the security of this Note and the duties and obligations of the City.
It is hereby certified, recited and declared that all conditions, acts and things essential to the validity of this Note exist, have happened and have been done and that every requirement of law affecting the issuance hereof has been duly complied with.
This Note is issued in replacement for and amends and restates in its entirety that certain $100,000,000 Water System Taxable Term Note dated January 4, 2021 from the City to the Lender (the “Existing Note” ). All amounts outstanding under such Existing Note constitute amounts outstanding under this Note. This Note shall become effective and supersede all provisions of the Existing Note upon the issuance of this Note by the City and the fulfillment of all conditions precedent hereof but is not intended to be or operate as a novation or an accord and satisfaction of the Existing Note or the indebtedness, obligations and liabilities of the City evidenced or provided for thereunder. The City agrees that this Note does not extinguish or discharge the obligations of the City under the Existing Note. Reference to this specific Note need not be made in any agreement, document, instrument, letter or certificate, the Existing Note itself or any communication issued or made pursuant to or with respect to the Existing Notes, from and after the date hereof, all references made to the Existing Note in any instrument or document shall be deemed to refer to this Note.
[S
IGNATURE PAGE TO FOLLOW]
[SIGNATURE PAGE TO WATER SYSTEM TAXABLE TERM NOTE]
Made and executed at Anaheim, California, as of the date and year first above written.
CITY OF ANAHEIM
By: ___________________________________
Public Utilities General Manager
ATTEST:
By:
City Clerk
(Seal)
A
UTHENTICATED:
By:
Public Utilities Assistant General Manager - Finance
and Energy Resources, as Issuing and Paying Agent
EXHIBIT H
TRANSFER OF THIS NOTE IS RESTRICTED AS SET FORTH IN THE AGREEMENT
FORM OF WATER SYSTEM TAX-EXEMPT NOTE
CITY OF ANAHEIM WATER REVENUE ANTICIPATION NOTE
$100,000,000 Anaheim, California [_______], 2023
CUSIP: 32596HG65
For value received, the CITY OF ANAHEIM (the “City”), a municipal corporation organized and existing under a charter duly and regularly adopted pursuant to the provisions of the Constitution of the State of California, promises to pay, solely from the funds hereafter referred to, to Wells Fargo Bank, Natio nal Association (the “Lender”), at the address provided in the Agreement (hereinafter defined), (i) the principal sum of O NE HUNDRED MILLION DOLLARS ($100,000,000) or, if less, the aggregate unpaid principal amount of all Tax-exempt Loans related to the Water System made by the Lender to the City, payable at such times as are specified in the Agreement, and (ii) interest on the unpa id principal amount of each Tax -exempt Loan related to the Water System made by the Lender, from the date of each such Tax-exempt Loan related to the Water System until such principal amount is paid in full, at such interest rates, and payable at such times, as are specified in the Agreement, in lawful money of the United States of America, in federal or other immediately available funds, from the date hereof until this Note is paid in full, in like money and funds at such office.
The City promises to make all other payments owed by it under the Agreement. All capitalized terms used herein and not otherwise defined herein shall ha ve the meanings specified in the Agreement.
This Note is subject to prepayment, and amounts prepaid prior to the last day of the Revolving Credit Period may be reborrowed, all pursuant to the terms and under the conditions of the Amended and Restated Revolving Credit Agreement dated as of [________] , 2023 ( as amended, supplemented, restated or otherwise modified from time to time , the “Agreement” ), between the City and the Lender. Reference is made to the Agreement for provisions as to the prepayment hereof and for reborrowing. Reference is also made to the Agreement for provisions providing for additional interest and other amounts to be payable under certain circumstances. If the Noteholder enforces this Note upon default, the City shall rei mburse the Noteholder for reasonable costs and expenses incurred by the Noteholder in collection, including attorneys fees and expenses as set out in Section 2.06 and 8.03 of the Agreement. This Note shall be construed in accordance with and governed by the internal laws of the State of California.
The parties hereto, including the undersigned maker and all guarantors, endorsers and pledgors that may exist at any time with respect hereto, hereby waive presentment, demand, notice,
- 2 -
protest and all other demands and notices in connection with the delivery, acceptance, performance and enforcement of this Note and assent to the extensions of the time of payment or forbearance or other indulgence without notice.
This Note, including the interest hereon, is payable solely from and secured by a lien upon the pledge of certain revenues and certain other available funds and money of the City, all as set forth in Section 4.07 of the Agreement and the Water System Ordinance (as defined in the Agreement). This Note does not constitute a general obligation or indebtedness of the City within the meaning of any constitutional, charter, or statutory limitations or provisions (and the Noteholder hereof shall never have the right to require or compel the levy of ad valorem taxes for the payment of the principal of and interest on this Note). Further reference is made to the Agreement and the Water System Ordinance for the provisions relating to the security of this Note and the duties and obligations of the City.
It is hereby c ertified, recited and declared that all conditions, acts and things essential to the validity of this Note exist, have happened and have been done and that every requirement of law affecting the issuance hereof has been duly complied with.
This Note is iss ued in replacement for and amends and restates in its entirety that certain $100,000,000 Water System Tax-Exempt Note dated January 4, 2021 from the City to the Lender (the “Existing Note” ). All amounts outstanding under such Existing Note constitute amounts outstanding under this Note. This Note shall become effective and supersede all provisions of the Existing Note upon the issuance of this Note by the City and the fulfillment of all conditions precedent hereof but is not intended to be or operate as a novation or an accord and satisfaction of the Existing Note or the indebtedness, obligations and liabilities of the City evidenced or provided for thereunder. The City agrees that this Note does not extinguish or discharge the obligations of the City under the Existing Note. Reference to this specific Note need not be made in any agreement, document, instrument, letter or certificate, the Existing Note itself or any communication issued or made pursuant to or with respect to the Existing Notes, from and after the date hereof, all references made to the Existing Note in any instrument or document shall be deemed to refer to this Note.
[S
IGNATURE PAGE TO FOLLOW]
[SIGNATURE PAGE TO WATER SYSTEM TAX-EXEMPT NOTE]
Made and executed at Anaheim, California, as of the date and year first above written.
CITY OF ANAHEIM
By: ___________________________________
Public Utilities General Manager
ATTEST:
By:
City Clerk
(Seal)
A
UTHENTICATED:
By:
Public Utilities Assistant General Manager - Finance
and Energy Resources, as Issuing and Paying Agent
EXHIBIT I
FORM OF OPINION OF NOTE COUNSEL
[date]
Wells Fargo Bank, National Association
333 Market Street, 15th Floor
San Francisco, California 94105
Re: Current Borrowing under Tax-exempt Note Issued pursuant to Amended and Restated Revolving Credit Agreement, dated as of [________], 2023, between City of Anaheim and Wells Fargo Bank, National
Association
Ladies and Gentlemen:
We have acted as Bond Counsel to the City of Anaheim, California (the “City”) in connection with a Borrowing under [an Electric] [a Water] System Tax-Exempt Note (the “Note”) made on the date hereof (the “Current Borrowing”) pursuant to that certain Amended and Restated Revolving Credit Agreement, dated as of [________], 2023, between the City and Wells Fargo Bank, National Association ( as amended, restated, supplemented or otherwise modified, the “Agreement”) . The initial Borrowing under the Note was made on [date] (the “Initial Borrowing”). Capitalized terms used and not otherwise defined herein shall have the meanings ascribed to them in the Agreement.
We have examined, and in expressing the opinions hereinafter described we rely upon, certificates of the City and such other agreements, documents and matters as we deem necessary to render our opinions. We have not undertaken an independent audit or investigation of the matters described or contained in the foregoing certificates, agreements and documents.
We have assumed, without undertaking to verify, the authenticity of all documents submitted to us as originals, the conformity to originals of all documents submitted to us as certified copies, the genuineness of all signatures, and the accuracy of the statements contained in such documents.
We are of the opinion that under law existing on the date hereof the Current Borrowing is treated as part of the same issue as the Initial Borrowing for purposes of section 103(a) and sections 141 through 150 of the Internal Revenue Code of 1986 ( as amended, the “Code”), and that interest on the Note measured by the Current Borrowing will be inc luded or excluded from the gross income and the computation of the alternative minimum taxable income of the Lender for federal income tax purposes to the same extent as is interest on the Note measured by the Initial Borrowing. Except as stated in this paragraph, we express no opinion as to any federal or state tax consequence of the ownership or disposition of the Note.
- 2 -
No attorney-client relationship by virtue of this opinion exists between our firm and the Lender. This letter shall not extend to, and may not be used, circulated, quoted, referred to, or relied upon by, any other person, firm, corporation or other entity without our prior written consent.
Our opinions are based on existing law, which is subject to change. Such opinions are further based on our knowledge of facts as of the date hereof. We assume no duty to update or supplement our opinions to reflect any facts or circumstances that may hereafter come to our attention or to reflect any changes in any law that may hereafter occur or become effective.
Respectfully submitted,