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“Financial Obligation” means, for purposes of the Listed Events set out in Section 5(a)(15) and Section (5)(a)(16), a (i) debt obligation; (ii) derivative instrument entered into in connection with, or pledged as security or a source of payment for, an existing or planned debt obligation; or (iii) guarantee of (i) or (ii). The term “Financial Obligation” shall not include municipal securities (as defined in the Securities Exchange Act of 1934, as amended) as to which a final official statement (as defined in the Rule) has been provided to the MSRB consistent with the Rule. “Holder” shall mean either the registered owners of the 2022CD Bonds, or, if the 202 2CD Bonds are registered in the name of The Depository Trust Company or another recognized depository, any applicable participant in such depository system.
“Listed Events” shall mean any of the events listed in Section 5(a) of this Disclosure Certificate. “MSRB” shall mean the Municipal Securities Rulemaking Board or any other entity designated or authorized by the Securities and Exchange Commission to receive continuing disclosure filings pursuant to the Rule. Until otherwise designated by the MSRB or the Securities and Exchange Commission, filings with the MSRB are to be made through the Electronic Municipal Market Access (EMMA) website of the MSRB currently located at http://emma.msrb.org.
“Official Statement” shall mean the final Official Statement, dated _________, 2022, prepared in connection with the sale and offering of the 2022CD Bonds.
“Participating Underwriters” shall mean any of the original underwriters or purchasers of the 2022CD Bonds required to comply with the Rule in connection with the offering of the 2022CD Bonds. “Rule” shall mean Rule 15c2-12(b)(5) adopted by the S.E.C. under the Securities Exchange Act of 1934, as the same may be amended from time to time.
SECTION 3. P rovision of Annual Reports.
(a) The SFPUC shall, or shall cause the Dissemination Agent to, not later than March 31 of each year, commencing with the report for Fiscal Year 2021-22 (which is due not later than March 31, 2023), provide to the MSRB an Annual Report which is consistent with the requirements of Section 4 of this Disclosure Certificate. If the Dissemination Agent is not the SFPUC, the SFPUC shall provide the Annual Report to the Dissemination Agent not later than 15 days prior to said date. The Annual Report must be submitted in electronic forma t and accompanied by such identifying information as is prescribed by the MSRB, and may cross -reference other information as provided in Section 4 of this Disclosure Certificate.
However, if the audited financial statements of the SFPUC are not available by the date required above for the filing of the Annual Report, the SFPUC shall submit unaudited financial statements and submit the audited financial statements as soon as they are available. If the SFPUC’s Fiscal Year changes, it shall give notice of such change in the same manner as for a Listed Event under Section 5(b). (b) If the SFPUC is unable to provide to the MSRB an Annual Report by the date required in subsection (a), the SFPUC shall send a notice to the MSRB in substantially the form attached as Ex hibit A. (c) The Dissemination Agent shall (if the Dissemination Agent is other than the SFPUC) file a report with the SFPUC certifying the date that the Annual Report was provided to the MSRB pursuant to this Disclosure Certificate.
SECTION 4. C
ontent of Annual Reports. The SFPUC’s Annual Report shall contain or incorporate by reference the following information:
(a) A udited financial statements of the Wastewater Enterprise for the prior Fiscal Year, prepared in accordance with generally accepted accounting principles applicable to the SFPUC from time to time. If the SFPUC’s audited financial statements are not available by the date the Annual Report is required to be filed, the Annual Report shall contain unaudited financial statements in a format similar to the financial statements contained in the final Official Statement, and the audited financial statements shall be filed in the same manner as the Annual Report when they become available;
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(b) An update for the prior Fiscal Year of the table in the Official Statement entitled “TABLE 6, SUMMARY OF ACTIVE SEWER ACCOUNTS BY USER TYPE;” (c) An update for the prior Fiscal Year of the table in the Official Statement entitled “TABLE 12, HISTORICAL SINGLE-FAMILY RESIDENTIAL SEWER RATES”; (d) An update for the prior Fiscal Year of the table in the Official Statement entitled “TABLE 13, HISTORICAL MULTI-FAMILY RESIDENTIAL SEWER RATES”; (e) An update for the prior Fiscal Year of the table in the Official Statement entitled “TABLE 14, ADOPTED SINGLE-FAMILY AND MULTI-FAMILY RESIDENTIAL SEWER RATES”; (f) An update for the prior Fiscal Year of the table in the Official Statement entitled “TABLE 15, HISTORICAL AND ADOPTED NON-RESIDENTIAL DISCHARGE RATES”; (g) An update for the prior Fiscal Year of the tables in the Official Statement in the sections entitled “OBLIGATIONS PAYABLE FROM NET REVENUES – Outstanding Parity Revenue Bonds” and “– Parity Loans” showing all bonds and other obligations of the SFPUC secured by Net Revenues; and (h) An update for the prior Fiscal Year of the table in the Official Statement entitled “TABLE 22, HISTORICAL REVENUE, OPERATING & MAINTENANCE EXPENSE AND DEBT SERVICE COVERAGE FOR FISCAL YEARS ENDED JUNE 30.”
Any or all of the items listed above may be set forth in a document or set of documents, or may be included by specific reference to other documents, including official statements of debt issues of the SFPUC or related public entities, which are available to the public on the MSRB website. If the document included by reference is a final official statement, it must be available from the MSRB. The SFPUC shall clearly identify each such other document so included by reference.
SECTION 5. R
eporting of Significant Events.
(a) The SFPUC shall give, or cause to be given, notice of the occurrence of any of the following Listed Events with respect to the 2022CD Bonds:
1. Principal and interest payment delinquencies;
2. Non-payment related defaults, if material;
3. Unscheduled draws on debt service reserves reflecting financial difficulties;
4. Unscheduled draws on credit enhancements reflecting financial difficulties;
5. Substitution of credit or liquidity providers, or their failure to perform;
6. Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701- TEB), other material notices or determinations with respect to the tax status of the 2022CD Bonds, or other material events affecting the tax status of the 2022CD Bonds;
7. Modifications to rights of Holders, if material;
8. Optional, unscheduled or contingent 2022CD Bond calls, if material, and tender offers;
9. Defeasances;
10. Release, substitution, or sale of property securing repayment of the 2022CD Bonds, if material;
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11. Rating changes;
12. Bankruptcy, insolvency, receivership or similar event of the SFPUC;
13. The consummation of a merger, consolidation, or acquisition involving the SFPUC or the sale of all or substantially all of the assets of the SFPUC, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material;
14. Appointment of a successor or additional trustee or the change of name of a trustee, if material;
15. Incurrence of a Financial Obligation of the SFPUC, if material, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a Financial Obligation of the SFPUC, any of which affect Holders, if material; and
16. Default, event of acceleration, termination event, modi fication of terms, or other similar events under the terms of a Financial Obligation of the SFPUC, any of which reflect financial difficulties.
Note:
for the purposes of the event identified in subparagraph (12), the event is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent, or similar officer for the SFPUC in a proceeding under the United States Bankruptcy Code or in any other proceeding under State or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the SFPUC, or if such jurisdiction has been assumed by leaving the existing governing body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the SFPU C. (b) W
henever the SFPUC obtains knowledge of the occurrence of a Listed Event in Section 5(a), the SFPUC shall, or shall cause the Dissemination Agent (if not the SFPUC) to, file a notice of such occurrence with the MSRB, in an electronic format as prescribed by the MSRB, in a timely manner not in excess of 10 business days after the occurrence of the Listed Event. Notwithstanding the foregoing, notice of a Listed Event described in subsection (a)(8) above need not be given under this subsection any earlier than the notice (if any) of the underlying event is given to holders of affected 2022CD Bonds under the Indenture.
(c) The SFPUC shall give, or cause to be given, notice of the occurrence of the receipt by the SFPUC of a written statement by the Climate Standards Board to the effect that the 2022 C Bonds are no longer “Climate Bond Certified.” The SFPUC shall, or shall cause the Dissemination Agent (if not the SFPUC) to, file a notice of such occurrence with the MSRB, in electronic format as prescribed by the MSRB, in a timely manner not in excess of 30 days after the receipt by the SFPUC of such written statement. (d) The SFPUC intends to comply with the Listed Events described in Section 5(a)(15) and Section 5(a)(16) and the definition of “Financial Obligation” in Section 2, with reference to the Rule, any other applicable federal securities laws and the guidance provided by the S.E.C. in Release No. 34- 83885 dated August 20, 2018 (the “2018 Release”), and any further amendments or written guidance provided by the S.E.C. or its staff with respect to the amendments to the Rule effected by the 2018 Release.
SECTION 6. T
ermination of Reporting Obligation . The SFPUC’s obligations under this Disclosure Certificate shall terminate upon the legal defeasance, prior redemption or payment in full of all of the 2022CD Bonds.
If such termination occurs prior to the final maturity of the 2022CD Bonds, the SFPUC shall give notice of such termination in the same manner as for a Listed Event under Section 5(b).
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SECTION 7. Dissemination Agent . The SFPUC may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Certificate, and may discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent. The Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Certificate.
SECTION 8. Am endment; Waiver. Notwithstanding any other provision of this Disclosure Certificate, the SFPUC may amend or waive this Disclosure Certific ate or any provision of this Disclosure Certificate, provided that the following conditions are satisfied:
(a) I f the amendment or waiver relates to the provisions of Sections 3(a), 4 or 5(a), it may only be made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature or status of an obligated person with respect to the 2022CD Bonds or the type of business conducted;
(b) The undertaking, as amended or taking into account such waiver, would, in the opinion of the City Attorney of the City and County of San Francisco or nationally recognized bond counsel, have complied with the requirements of the Rule at the time of the original issuance of the 2022CD Bonds, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; and
(c) The amendment or waiver either (i) is approved by the owners of a majority in aggregate principal amount of the 2022CD Bonds or (ii) does not, in the opinion of the City Attorney or nationally recognized bond counsel, materially impair the interests of the Holders.
In the event of any amendment or waiver of a provision of this Disclosure Certificate, the SFPUC shall describe such amendment in the next Annual Report , and shall include, as applicable, a narrative explanation of the reason for the amendment or waiver and its impact on the type (or in the case of a change of accounting principles, on the presentation) of financial information or operating data being pre sented by the SFPUC. In addition, if the amendment relates to the accounting principles to be followed in preparing financial statements: (i) notice of such change shall be given in the same manner as for a Listed Event under Section 5; and (ii) the Annual Report for the year in which the change is made should present a comparison (in narrative form and also, if feasible, in quantitative form) between the financial statements as prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles.
SECTION 9. A
dditional Information. Nothing in this Disclosure Certificate shall be deemed to prevent the SFPUC from disseminating any other information, using the means of dissemination set forth in this Disclosure Certificate or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure Certificate. If the SFPUC chooses to include any information in any Annual Report or notice of occurrence of a Listed Event in addition to that which is specifically required by this Disclosure Certificate, the SFPUC shall have no obligation under this Disclosure Certificate to update such information or include it in any future Annual Report or notice of occurrence of a Listed Event.
SECTION 10. Def
ault. In the event of a failure of the SFPUC to comply with any provision of this Disclosure Certificate, any Participating Underwriters, Holder or Beneficial Owner of the 2022CD Bonds may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the SFPUC to comply with its obligations under this Disclosure Certificate; provided that any such action may be instituted only in a federal or State court located in the City and County of San Francisco, State of California.
Failure by the SFPUC to comply with any provision of this Disclosure Certificate shall not be deemed an Event of Default under the Indenture and the sole remedy under this Disclosure Certificate in the event of any failure of the SFPUC to comply with this Disclosure Certificate shall be an action to compel performance.
SECTION 11. Ben
eficiaries. This Disclosure Certificate shall inure solely to the be nefit of the SFPUC, the Dissemination Agent, the Participating Underwriters and Holders and Beneficial Owners from time to time of the 2022CD Bonds, and shall create no rights in any other person or entity.
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Dated as of the date first written above.
PUBLIC UTILITIES COMMISSION OF THE
CITY AND COUNTY OF SAN FRANCISCO
By:
General Manager
Approved as to form:
DAVID CHIU
CITY ATTORNEY
By:
Deputy City Attorney
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CONTINUING DISCLOSURE CERTIFICATE
EXHIBIT A
FORM OF NOTICE TO THE
MUNICIPAL SECURITIES RULEMAKING BOARD
OF FAILURE TO FILE ANNUAL REPORT
Name of Issuer: Public Utilities Commission of the City and County of San Francisco Name of Issue: Wastewater Revenue Bonds, 2022 Series C (Refunding – Federally Taxable) (SSIP) (Green Bonds), and Wastewater Revenue Bonds, 2022 Series D (Refunding – Federally Taxable) (Non-SSIP)
Date of Issuance: ____________, 2022
NOTICE IS HEREBY GIVEN that the SF PUC has not provided an Annual Report with respect to the above -named Bonds as required by Section 3 of the Continuing Disclosure Certificate of the Public Utilities Commission of the City and County of San Francisco, dated _________, 2022. The SFPUC anti cipates that the Annual Report will be filed by _______________.
Dated: _______________
PUBLIC UTILITIES COMMISSION OF
THE CITY AND COUNTY OF SAN FRANCISCO
By: [ to be signed only if filed]
Title
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APPENDIX E
INFORMATION REGARDING BOOK-ENTRY ONLY SYSTEM
AND GLOBAL CLEARANCE PROCEDURES
Introduction
The information in this Appendix E concerning, respectively, The Depository Trust Company (“DTC”), Euroclear Bank S.A./N.V. as operator of the Euroclear System (“Euroclear”) and Clearstream Banking, société anonyme, Luxembourg (“Clearstream Banking”) (DTC, Euroclear and Clearstream Banking together, the “Clearing Systems”), and DTC’s book- entry-only system has been provided by DTC, Euroclear and Clearstream Banking for use in disclosure documents such as this Official Statement. None of the SFPUC, the Trustee or the Underwriters of the 2022ABCD Bonds make any representation as to its accuracy or completeness.
DTC will act as the initial securities depository for the 2022ABCD Bonds. Euroclear and Clearstream Banking are participants of DTC and facilitate the clearance and settlement of securities transactions by electronic book-entry transfer between their respective account holders.
The information set forth below in this Appendix E is subject to any change in or reinterpretation of the rules, regulations and procedures of the Clearing Systems currently in effect and the SFPUC expressly disclaims any responsibility to update this Official Statement to reflect any such changes. The information herein concerning the Clearing Systems has been obtained from sources that the SFPUC believes to be reliable, but none of the SFPUC, the Trustee or the Underwriters take any responsibility for the accuracy or completeness of the information set forth herein. Investors wishing to use the facilities of any of the Clearing Systems are advised to confirm the continued applicability of the rules, regulations and procedures of the relevant Clearing System. The SFPUC will have no responsibility or liability for any aspect of the records relating to, or payments made on account of, beneficial ownership interests in the 2022ABCD Bonds held through the facilities of any Clearing System or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests.
The Beneficial Owners should confirm the following information with DTC or the DTC Participa nts.
So long as Cede & Co. is the registered holder of the 2022ABCD Bonds, as nominee of DTC, references in the Official Statement, including the Appendices thereto, to the Holders of the 2022ABCD Bonds shall mean Cede & Co. and shall not mean the Beneficial Owners of the 2022ABCD Bonds.
THE SFPUC AND THE TRUSTEE SHALL NOT HAVE ANY RESPONSIBILITY OR OBLIGATION TO DTC PARTICIPANTS, TO INDIRECT PARTICIPANTS, OR ANY BENEFICIAL OWNER, WITH RESPECT TO:
(I) THE ACCURACY OF ANY RECORDS MAINTAINED BY DTC, ANY DTC P ARTICIPANT OR INDIRECT PARTICIPANT; (II) THE PAYMENT BY DTC OR ANY DTC PARTICIPANT OR INDIRECT PARTICIPANT OF ANY AMOUNT WITH RESPECT TO THE PRINCIPAL AND INTEREST DUE ON THE 2022ABCD BONDS; (III) THE DELIVERY OF ANY NOTICE THAT IS PERMITTED OR REQUIRED TO BE GIVEN TO THE HOLDERS OF THE 2022ABCD BONDS UNDER THE INDENTURE; (IV) THE SELECTION BY DTC OR ANY
DTC PARTICIPANT OR INDIRECT PARTICIPANT OF ANY PERSON TO RECEIVE PAYMENT IN THE EVENT OF A PARTIAL REDEMPTION OF THE 2022ABCD BONDS; (V) ANY CONSENT GIVEN OR OTHER ACTION TAKEN BY DTC AS REGISTERED OWNER OF THE 2022ABCD BONDS; OR (VI) ANY OTHER MATTER.
THE TRUSTEE, AS LONG AS THE BOOK -ENTRY ONLY SYSTEM IS USED FOR THE 2022ABCD BONDS, WILL SEND ANY NOTICE OF REDEMPTION AND ANY OTHER NOTICES ONLY TO DTC. ANY
FAILURE OF DTC TO ADVISE ANY DTC PARTICIPANT, OR OF ANY DTC PARTICIPANT TO NOTIFY
ANY BENEFICIAL OWNER, OF ANY NOTICE AND ITS CONTENT OR EFFECT WILL NOT AFFECT THE VALIDITY OR SUFFICIENCY OF THE PROCEEDINGS RELATING TO THE REDEMPTION OF 2022ABCD BONDS CALLED FOR REDEMPTION OR OF ANY OTHER ACTION PREMISED ON SUCH NOTICE.
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Book Entry-Only System
The Depository Trust Company (“DTC”), New York, NY, will act as securities depository for the 2022ABCD Bonds. The 2022ABCD Bonds will be issued as fully registered securities registered in the name of Cede & Co. (DTC’s partnership nominee) or such other name as may be requested by an authorized representative of DTC.
One fully-registered bond will be issued for each maturity of the 2022ABCD Bonds, each in the aggregate p rincipal amount of such maturity, and will be deposited with DTC.
DTC, the world’s largest securities depository, is a limited-purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code, and a “clearing agency” registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934.
DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non -U.S. equity issues, corporate and municipal debt issues, and money market instruments from over 100 countries that DTC’s participants (“Direct Participants”) deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants’ accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non- U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation (“DTCC”). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (“Indirect Participants”). The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at
Purchases of 2022ABCD Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the 2022ABCD Bonds on DTC’s records. The ownership interest of each actual purchaser of each 2022ABCD Bond (“Beneficial Owner”) is in turn to be recorded on the Direct and Indirect Participants’ records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the 2022ABCD Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive bonds representing their ownership interests in 2022ABCD Bonds, except in the event that use of the book- entry system for the 2022ABCD Bonds is discontinued.
To facilitate subsequent transfers, all 2022ABCD Bonds deposited by Direct Participants with DTC are registered in the name of DTC’s partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The depo sit of 2022ABCD Bonds with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the 2022ABCD Bonds; DTC’s records reflect on ly the identity of the Direct Participants to whose accounts such 2022ABCD Bonds are credited, which may or may not be the Beneficial Owners.
The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time.
Beneficial Owners of 2022ABCD Bonds may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the 2022ABCD Bonds, such as redemptions, tenders, defaults, and proposed amendments to the 2022ABCD Bond documents. For example, Beneficial Owners of 2022ABCD Bonds may wish to ascertain that the nominee holding the 2022ABCD Bonds for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of notices be provided directly to them.
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Redemption notices shall be sent to DTC. If less than all of the 2022ABCD Bonds within a maturity are being redeemed, DTC’s practice is to determine by lot the amount of the interest of each Direct Participant in such maturity to be redeemed.
Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to 2022ABCD Bonds unless authorized by a Direct Participant in accordance with DTC’s Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the SFPUC as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.’s consenting or voting rights to those Direct Participants to whose accounts 2022ABCD Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy).
Principal and interest payments on the 2022ABCD Bonds will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC’s practice is to credit Direct Participants’ accounts upon DTC’s receipt of funds and corresponding detail information from the SFPUC or the Trustee, on payment date in accordance with their respective holdings shown on DTC’s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the acc ounts of customers in bearer form or registered in “street name,” and will be the responsibility of such Participant and not of DTC nor its nominee, the Trustee, or the SFPUC, subject to any statutory or regulatory requirements as may be in effect from time to time. Principal and interest payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Trustee, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.
A Beneficial Owner shall give notice to elect to have its 2022ABCD Bonds purchased or tendered, through its Participant, to the Trustee, and shall effect delivery of such 2022ABCD Bonds by causing the Direct Participant to transfer the Participant’s interest in the 2022ABCD Bonds, on DTC’s records, to the Trustee. The requirement for physical delivery of 2022ABCD Bonds in connection with an optional tender or a mandatory purchase will be deemed satisfied when the ownership rights in the 2022ABCD Bonds are transferred by Direct Participants on DTC’s records and followed by a book-entry credit of tendered 2022ABCD Bonds to the Trustee’s DTC account.
DTC may discontinue providing its services as depository with respect to the 2022ABCD Bonds at any time by giving reasonable notice to the SFPUC or the Trustee. Under such circumstances, in the event that a successor depository is not obtained, physical 2022ABCD Bonds are required to be printed and delivered.
The SFPUC may decide to discontinue use of the system of book-entry transfers through DTC (or a successor securities depository). In that event, physical 2022ABCD Bonds will be printed and delivered.
The information in this section concerning DTC and DTC’s book-entry system has been obtained from sources that the SFPUC believes to be reliable, but the SFPUC takes no responsibility for the accuracy thereof.
Euroclear and Clearstream Banking
Euroclear and Clearstream Banking have advised the SFPUC as follows:
Euroclear and Clearstream Banking each hold securities for their customers and facilitate the clearance and settlement of securities transactions by electronic book -entry transfer between their respective account holders.
Euroclear and Clearstream Banking provide various services including safekeeping, administration, clearance and settlement of internationally traded securities and securities lending and borrowing. Euroclear and Clearstream Banking also deal with domestic securities markets in several cou ntries through established depositary and custodial relationships. Euroclear and Clearstream Banking have established an electronic bridge between their two systems across which their respective participants may settle trades with each other.
Euroclear and Clearstream Banking customers are worldwide financial institutions, including underwriters, securities brokers and dealers, banks, trust companies and clearing corporations. Indirect access to Euroclear and Clearstream Banking is available to other institutions that clear through or maintain a custodial relationship with an account holder of either system, either directly or indirectly.
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Clearing and Settlement Procedures. Any 2022ABCD Bonds sold in offshore transactions will be initially issued to investors through the book- entry facilities of DTC, for the account of its participants, including but not limited to Euroclear and Clearstream Banking. If the investors are participants in Clearstream Banking and Euroclear in Europe, or indirectly through organizations that are participants in the Clearing Systems, Clearstream Banking and Euroclear will hold omnibus positions on behalf of their participants through customers’ securities accounts in Clearstream Banking’s and Euroclear’s names on the books of their respective depositories. In all cases, the record holder of the 2022ABCD Bonds will be DTC’s nominee and not Euroclear or Clearstream Banking. The depositories, in turn, will hold positions in customers’ securities accounts in the depositories’ names on the books of DTC. Because of time zone differences, the securities account of a Clearstream Banking or Euroclear participant as a result of a transaction with a participant, other than a depository holding on behalf of Clearstream Banking or Euroclear, will be credited during the securities settlement processing day, which must be a business day for Clearstream Banking or Euroclear, as the case may be, immediately following the DTC settlement date. These credits or any transactions in the securities settled d uring the processing will be reported to the relevant Euroclear participant or Clearstream Banking participant on that business day. Cash received in Clearstream Banking or Euroclear as a result of sales of securities by or through a Clearstream Banking pa rticipant or Euroclear participant to a DTC Participant, other than the depository for Clearstream Banking or Euroclear, will be received with value on the DTC settlement date but will be available in the relevant Clearstream Banking or Euroclear cash acco unt only as of the business day following settlement in DTC.
Transfers between participants will occur in accordance with DTC rules. Transfers between Clearstream Banking participants or Euroclear participants will occur in accordance with their respective rules and operating procedures. Cross-market transfers between persons holding directly or indirectly through DTC, on the one hand, and directly or indirectly through Clearstream Banking participants or Euroclear participants, on the other, will be effected in DTC in accordance with DTC rules on behalf of the relevant European international clearing system by the relevant depositories; however, cross -market transactions will require delivery of instructions to the relevant European international clearing system by the counterparty in the system in accordance with its rules and procedures and within its established deadlines in European time. The relevant European international clearing system will, if the transaction meets its settlement requirements, deliver instructions to its depository to take action to effect final settlement on its behalf by delivering or receiving securities in DTC, and making or receiving payment in accordance with normal procedures for same day funds settlement applicable to DTC. Clearstream Banking participants or Euroclear participants may not deliver instructions directly to the depositories.
The SFPUC will not impose any fees in respect of holding the 2022ABCD Bonds; however, holders of book- entry interests in the 2022ABCD Bonds may incur fees normally payable in respect of the maintenance and operation of accounts in the Clearing Systems.
Initial Settlement. Interests in the 2022ABCD Bonds will be in uncertified book- entry form. Purchasers electing to hold book-entry interests in the 2022ABCD Bonds through Euroclear and Clearstream Banking accounts will follow the settlement procedures applicable thereto and applicable to DTC. Book -entry interests in the 2022ABCD Bonds will be credited by DTC to Euroclear and Clearstream Banking participants’ securities clearance accounts on the business day following the date of delivery of the 2022ABCD Bonds against payment (value as on the date of delivery of the 2022ABCD Bonds). DTC participants acting on behalf of purchasers electing to hold book- entry interests in the 2022ABCD Bonds through DTC will follow the delivery practices applicable to securities eligible for DTC’s Same Day Funds Settlement system. DTC participants’ securities accounts will be credited with book-entry interests in the 2022ABCD Bonds following confirmation of receipt of payment to the SFPUC on the date of delivery of the 2022ABCD Bonds.
Secondary Market Trading. Secondary market trades in the 2022ABCD Bonds will be settled by transfer of title to book-entry interests in the Clearing Systems. Title to such book- entry interests will pass by registration of the transfer within the records of Euroclear, Clearstream Banking or DTC, as the case may be, in accordance with their respective procedures. Book-entry interests in the 2022ABCD Bonds may be transferred within Euroclear and within Clearstream Banking and between Euroclear and Clearstream Banking in accordance with procedures established for these purposes by Euroclear and Clearstream Banking. Book- entry interests in the 2022ABCD Bonds may be transferred within DTC in accordance with procedures established for this purpose by DTC. Transfer of book- entry interests in the 2022ABCD Bonds between Euroclear or Clearstream Banking and DTC shall be effected in accordance with procedures established for this purpose by Euroclear, Clearstream Banking and DTC.
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Special Timing Considerations
Investors should be aware that investors will only be able to make and receive deliveries, payments and other communications involving the 2022ABCD Bonds through Euroclear or Clearstream Banking on days when those systems are open for business. In addition, because of time -zone differences, there may be complications with completing transactions involving Clearstream Banking and/or Euroclear on the same business day as in the United States. U.S. investors who wish to transfer their interests in the Bonds, or to receive or make a payment or delivery of 2022ABCD Bonds, on a particular day, may find that the transactions will not be performed until the ne xt business day in Luxembourg if Clearstream Banking is used, or Brussels if Euroclear is used.
Clearing Information
The SFPUC and the Underwriters expect that the 2022ABCD Bonds will be accepted for clearance through the facilities of Euroclear and Clearstream Banking. The CUSIP numbers for the Bonds are set out on the cover page of this Official Statement.
Limitations
For so long as the 2022ABCD Bonds are registered in the name of DTC or its nominee, Cede & Co., the SFPUC and the Trustee will recognize only DTC or its nominee, Cede & Co., as the registered owner of the 2022ABCD Bonds for all purposes, including payments, notices and voting. So long as Cede & Co. is the registered owner of the 2022ABCD Bonds, references in this Official Statement to registered owners of the 2022ABCD Bonds shall mean Cede & Co. and shall not mean the Beneficial Owners of the 2022ABCD Bonds.
Because DTC is treated as the owner of the 2022ABCD Bonds for substantially all purposes, Beneficial Owners may have a restricted ability to influence in a timely fashion remedial action or the giving or withholding of requested consents or other directions. In addition, because the identity of Beneficial Owners is unknown to the SFPUC or DTC, it may be difficult to transmit information of potential interest to Beneficial Owners in an effective and timely manner.
Beneficial Owners should make appropriate arrangements with their broker or dealer regarding distribution of information regarding the 2022ABCD Bonds that may be transmitted by or through DTC.
The SFPUC will have no responsibility or obligation with respect to:
• the accuracy of the records of DTC, its nominee or any Direct Participant or Indirect Participant with respect to any Beneficial Ownership interest in any 2022ABCD Bonds; • the delivery to any Direct Participant or Indirect Participant or any other person, other than a registered owner as shown in the bond register kept by the Trustee, of any notice with respect to any 2022ABCD Bonds including, without limitation, any notice of redemption with respect to any 2022ABCD Bonds;
• the payment to any Direct Participant or Indirect Participant or any other person, other tha n a registered owner as shown in the bond register kept by the Trustee, of any amount with respect to the principal of, premium, if any, or interest on, any 2022ABCD Bonds; or • any consent given by DTC or its nominee as registered owner.
Prior to any discontinuation of the book entry only system hereinabove described, the SFPUC and the Trustee may treat Cede & Co. (or such other nominee of DTC) as, and deem Cede & Co. (or such other nominee) to be, the absolute registered owner of the 2022ABCD Bonds for all purposes whatsoever, including, without limitation:
• the payment of principal, premium, if any, and interest on the 2022ABCD Bonds; • giving notices of redemption and other matters with respect to the 2022ABCD Bonds; • registering transfers with respect to the 2022ABCD Bonds; and
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• the selection of 2022ABCD Bonds for redemption.
General
None of Euroclear, Clearstream Banking or DTC is under any obligation to perform or continue to perform the procedures referred to above, and such procedures may be discontinued at any time.
None of the SFPUC, the Underwriters nor any of their agents will have any responsibility for the performance by Euroclear, Clearstream Banking or DTC or their respective direct or indirect participants or account holders of their respective obligations under the rules and procedures governing their operations or the arrangements referred to above.
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APPENDIX F
FORM OF FORWARD DELIVERY CONTRACT
[To be tailored to this issue]
Citigroup Global Markets Inc
As Representative of the Underwriters
$[PRINCIPAL AMOUNT]
[ISSUER]
[NAME OF BONDS]
[BORROWER]
SERIES [ ]
Ladies and Gentlemen:
The undersigned (the “Purchaser”) hereby agrees (this “Agreement”) to purchase from Citigroup Global Markets Inc. (the “Representative”), as representative of itself and the Underwriters set forth in the Forward Delivery Bond Purchase Contract (defined below) (collectively with the Representative, the “Underwriters”) when, as, and if issued and delivered to the Underwriters by the [ISSUER] (the “Issuer”), and the Representative agrees to sell to the Purchaser:
Par Amount Maturity Date Interest Rate CUSIP Number Yield Price
of the above-referenced Series [ ] Bonds (the “Bonds” or the “Purchased Obligations”) offered by the Issuer under the Preliminary Official Statement dated [POS DATE] and the Official Statement relating to the Purchased Obligations dated [OS DATE] (the “Official Statement”), at the purchase price and with the interest rates, principal amounts, and maturity dates shown above, and on the further terms and conditions set forth in the Forward Delivery Bond Purchase Contract. The Purchased Obligations are being purchased by the Underwriters pursuant to a Forward Delivery Bond Purchase Contract dated [FDBPC DATE] among the Issuer, [BORROWER] (the “Borrower”) and the Representative, acting on its behalf and on behalf of the Under writers (the “Forward Delivery Contract”). Capitalized terms used but not defined herein shall have the meanings ascribed thereto in the Forward Delivery Contract or the Official Statement.
The Purchaser hereby confirms that it has reviewed the Preliminary Official Statement and the Official Statement (including without limitation the section[s] entitled [CONFORM TO OS CAPTIONS] “CERTAIN FORWARD DELIVERY CONSIDERATIONS FOR THE SERIES [ ] BONDS” and [ ] therein), has considered the risks associa ted with purchasing the Purchased Obligations and is duly authorized to purchase the Purchased Obligations. The Purchaser further acknowledges and agrees that the Purchased Obligations are being sold on a “forward” basis, and the Purchaser hereby purchases and agrees to accept delivery of such Purchased Obligations from the Underwriters on or about [SETTLEMENT DATE] (the “Settlement Date”).
Payment for the Purchased Obligations shall be made to the Representative or upon its order on the Settlement Date upon delivery to the Purchaser of the Purchased Obligations through the book -entry system of The Depository Trust Company. The Purchaser agrees that in no event shall the Underwriters be responsible or liable for any claim or loss, whether direct or consequential, which the Purchaser may suffer in the event the Issuer does not for any reason issue and deliver the Purchased Obligations.
Upon the Settlement Date, the obligation of the Purchaser to take delivery of the Purchased Obligations hereunder shall be unconditional. The Purchaser may terminate its obligation to purchase the Purchased Obligations in the event that between the date of the Forward Delivery Contract and the Settlement Date, one of the following events shall have occurred and the Purchaser has notified the Representative in writing as provided herein:
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(1) the Bonds are not rated (or any such rating is suspended or withdrawn which results in the Bonds having no rating) by any of [S&P, Moody’s, Fitch, or Kroll] on the Settlement Date; (2) as a result of a Change in Law (as defined below) that involves the enactment of federal legislation that applies only to “state or local bonds” (such as the Bonds) that are issued and delivered on or after the Preliminary Closing Date, the owner of a Bond is not able to utilize the full benefit of the exclusion from gross income for federal income tax purposes of interest payable on the Bonds;
(3) as a result of a Change in Law or for any other reason, Bond Counsel notifies the Issuer that it does not expect to be able to issue an opinion substantially in the form and to the effect set forth in Appendix [ ] to the Official Statement;
(4) an event of default has occurred and is continuing, technical or otherwise, under [insert relevant Bond Documents to mirror Section 15(e) of the FDBPC]; or (5) an event shall occur which makes untrue or incorrect in any material respect, as of the time of such event, any statement or information contained in the Official Statement or Updated Official Statement or which is not reflected in the Official Statement or Updated Official Statement but should be reflected therein in order to make the statements contained therein in light of the circumstances under which there were made, not misleading in any material respect and in either such event, (a) the Issuer or Borrower refused to permit the Official Statement or Updated Official Statement, as the case may be to be supplemented to supply such statement or information in an manner satisfactory to the Underwriters or ((b) the ef fect of the Official Statement or Updated Official Statement as so supplemented is, in the judgment of the Representative, to materially adversely affect the market price or marketability of the Bonds or the ability of the Underwriters to enforce contracts for the sale, at the contemplated offering prices (or yields), of the Bonds.
A “Change in Law” means:
(i) any change in or addition to applicable federal or state law, whether statutory or as interpreted by the courts, including any changes in or new rules, regulations or other pronouncements or interpretations by federal or state agencies;
(ii) any legislation enacted by the Congress of the United States or recommended for passage by the President of the United States (whether or not such enacted or recommended legislation has an effective date which is on or before the Settlement Date);
(iii) any law, rule or regulation proposed or enacted by any governmental body, department or agency (whether or not such proposed or enacted law, rule or regulation has an effective date which is on or before the Settlement Date); or
(iv) any judgment, ruling or order issued by any court or administrative body, which with respect to clauses (i) through (iv) hereof would (A) as to the Underwriters, legally prohibit (or have the retroactive effect of prohibiting, if enacted, adopted, passed or finalized) the Underwriters from (1) accepting delivery of and paying for the Bonds in accordance with the provisions of the Forward Delivery Contract or (2) selling the Bonds or beneficial ownership interests therein to the public, or, (B) as to the Issuer, make the sale or issuance and delivery of the Bonds by the Issuer illegal (or have the retroactive effect of making illegal such issuance, sale and delivery, if enacted, adopted, passed or finalized), (C) eliminate the exclusion from gross income for federal income tax purposes of interest on the Bonds (or have the retroactive effect of eliminating such exclusion if enacted, adopted, passed or finalized), or (D) require the Bonds to be registered under the 1933 Act or under the 1934 Act, or require the [TRUST] to be qualified under the 1939 Act (or have the retroactive effect of requiring such registration or qualification if enacted, adopted, passed or finalized); or (v) a stop order, ruling, regulation, or official statement by the SEC or any other governmental agency having jurisdiction of the subject matter shall have been issued or made or any other event
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occurs, the effect of which is that the issuance, offering or sale of the Bonds, is or would be, in violation of any provision of the federal securities laws, including the 1933 Act, the 1934 Act, or the 1939 Act.
The Purchaser acknowledges and agrees that the Purchased Obligations are being sold on a “forward” or “forward delivery” basis for delivery on the Settlement Date and that the Purchaser is obligated to take up and pay for the Purchased Obligations on the Settlement Date unless the Underwriters terminate the Forward Delivery Contract, or the Purchaser terminates its o bligation to purchase the Purchased Obligations as described herein. To effect a termination by the Purchaser, the Purchaser acknowledges and agrees that it must give written notice of its termination to the Representative before the Settlement Date. The P urchaser understands and agrees that no termination of the obligation of the Purchaser may occur after the Settlement Date. The Purchaser is not a third- party beneficiary under the Forward Delivery Contract and has no rights to enforce, or cause the Underw riters to enforce, any of the terms thereof. The Purchaser acknowledges that it will not be able to withdraw its order except as described herein, and will not otherwise be excused from performance of its obligations to take up and pay for the Purchased Obligations on the Settlement Date because of market or credit changes, including specifically, but not limited to (a) changes in the ratings assigned to the Purchased Obligations or changes in the credit associated with the Purchased Obligations generally, and (b) changes in the financial condition and operations of the Issuer or the Borrower. The Purchaser acknowledges and agrees that it will remain obligated to purchase the Purchased Obligations in accordance with the terms hereof, even if the Purchaser decides to sell such Purchased Obligations following the date hereof, unless the Purchaser sells Purchased Obligations to another institution with the prior written consent of the Representative and such institution provides a written acknowledgment of confirmation of purchase order and a forward delivery contract in the same respective forms as that executed by the Purchaser.
The Purchaser represents and warrants that, as of the date hereof, the Purchaser is not prohibited from purchasing the Purchased Obligations hereby agreed to be purchased by it under the laws of the jurisdiction(s) to which the Purchaser is subject.
This Agreement will inure to the benefit of and be binding upon the parties hereto and their respective successors, but will not be assignable by either party without the prior written consent of the other. [If applicable to the Purchaser add:
The Purchaser acknowledges and agrees that, upon the earlier of (i) the Purchaser disclosing its intention to cease publication of Net Asset Value or (i i) the Purchaser failing to publish Net Asset Value on any New York Business Day, in each case, on or prior to the Settlement Date, the Representative may, in its sole discretion, terminate this Agreement and sell the Purchased Obligations contemplated by this Agreement to another purchaser. For the avoidance of doubt, nothing in the immediately preceding sentence creates any right for the Purchaser to terminate its obligation to purchase the Purchased Obligations contemplated by this Agreement. As used herein: “Net Asset Value” means, as of any date, Total Assets minus Total Liabilities, in each case as of such date; “Total Assets” means, at any date, all assets of Purchaser which in accordance with generally accepted accounting principles would be classified as assets upon a balance sheet of Purchaser prepared as of such date; “Total Liabilities” means, at any date, all liabilities of Purchaser which in accordance with generally accepted accounting principles would be classified as liabilities upon a balance sheet of Purchaser prepared as of such date; and “New York Business Day” means a day on financial markets in New York City are open for general business (including dealings in municipal bonds).
The Purchaser agrees that it will at all times satisfy the minimum initial and maintenance margin requirements of Regulation T of the Board of Governors of the Federal Reserve System, Rule 431 of the New York Governors of the Federal Reserve System, Rule 431 of the New York Stock Exchange, Inc., and any other margin regulations applicable to the Representative.]
This Forward Delivery Contract may be executed by either of the parties hereto in any number of counterparts, each of which shall be deemed to be an original, but all such counterparts shall together co nstitute one and the same instrument under the laws of the State of New York.
It is understood that the acceptance by the Representative of any forward delivery contract (including this one) is in the Representative's sole discretion and that, without limiting the foregoing, acceptances of such contracts need not be on a “first-come, first-served” basis. If this Agreement is acceptable to the Representative, it is requested
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that the Representative sign the form of acceptance below and mail or deliver one of the counterparts hereof to the Purchaser at its address set forth below. This will become a binding contract between the Representative and the Purchaser when such counterpart is so mailed or delivered by the Representative. This Agreement does not constitute a customer confirmation pursuant to Rule G-15 of the Municipal Securities Rulemaking Board.
This Agreement shall be construed and administered under the laws of the State of New York.
Purchaser
By:
Name:
Title:
Address
Telephone
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Accepted as of [ ], 20[ ]
Citigroup Global Markets Inc., as Representative of the Underwriters
Name:
Title:
4866-1592-3470.5
FOURTEENTH SUPPLEMENTAL INDENTURE
by and between
PUBLIC UTILITIES COMMISSION OF THE
CITY AND COUNTY OF SAN FRANCISCO
and
U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION,
as Trustee
relating to
$[PAR A]
Aggregate Principal Amount of
Public Utilities Commission the
City And County of San Francisco
Wastewater Revenue Bonds,
2022 Series A
(Refunding) (SSIP)
(Green Bonds)
$[PAR B]
Aggregate Principal Amount of
Public Utilities Commission of the
City And County of San Francisco
Wastewater Revenue Bonds,
2022 Series B
(Refunding) (Non-SSIP)
Dated as of [ ___] 1, 2022
Table of Contents
Page
ARTICLE LXII
DEFINITIONS ............................................................................................................................... 8
ARTICLE LXIII
PROVISIONS RELATING TO BONDS
Section 63.01. Authorization and Terms of Bonds .................................................................. 9 Section 63.02. Forms of Bonds .............................................................................................. 11 Section 63.03. Use of Depository .......................................................................................... 11 Section 63.04. Issuance of 2022AB Bonds ............................................................................ 13 Section 63.05. Application of Proceeds of 2022 Series A Bonds .......................................... 13 Section 63.06. Application of Proceeds of 2022 Series B Bonds .......................................... 13 Section 63.07. Establishment and Application of the 2022 Series A Rebate Fund ............... 14 Section 63.08. Establishment and Application of the 2022 Series B Rebate Fund ............... 15 Section 63.09. Terms of Redemption—2022 Series A Bonds............................................... 16 Section 63.10. 2022 Series A Sinking Fund Account ............................................................ 17 Section 63.11. Terms of Redemption—2022 Series B Bonds ............................................... 19 Section 63.12. 2022 Series B Sinking Fund Account ............................................................ 19 Section 63.13. Purchase In Lieu of Mandatory Sinking Fund Redemption .......................... 21 Section 63.14. Tax Covenants ............................................................................................... 21 Section 63.15. Continuing Disclosure ................................................................................... 22 Section 63.16. Administration of the 2022AB Costs of Issuance Fund ................................ 22 Section 63.17. No Senior State Loans ................................................................................... 23
ARTICLE LXIV
MISCELLANEOUS
Section 64.01. Terms of 2022AB Bonds Subject to the Indenture ........................................ 23 Section 64.02. Effective Date of Fourteenth Supplemental Indenture .................................. 23 Section 64.03. Execution in Counterparts.............................................................................. 24
ARTICLE LXV
ADDITIONAL CITY REQUIREMENTS
Section 65.01. Local Business Enterprise Utilization; Liquidated Damages ........................ 24 Section 65.02. Nondiscrimination; Penalties ......................................................................... 25 Section 65.03. MacBride Principles—Northern Ireland ........................................................ 26 Section 65.04. Tropical Hardwood and Virgin Redwood Ban .............................................. 26 Section 65.05. Drug-Free Workplace Policy ......................................................................... 26 Section 65.06. Compliance with Americans with Disabilities Act ........................................ 26 Section 65.07. Sunshine Ordinance ....................................................................................... 27 Section 65.08. Limitations on Contributions ......................................................................... 27 Section 65.09. Requiring Minimum Compensation for Covered Employees ....................... 27 Section 65.10. Requiring Health Benefits for Covered Employees....................................... 29 Table of Contents
(continued)
Page
ii
Section 65.11. Prohibition on Political Activity With City Funds ........................................ 30 Section 65.12. Conflict of Interest ......................................................................................... 31 Section 65.13. Earned Income Credit (EIC) Forms ............................................................... 31 Section 65.14. Preservative-treated Wood Containing Arsenic ............................................. 32 Section 65.15. Nondisclosure of Private Information ............................................................ 32 Section 65.16. Proprietary or Confidential Information of City ............................................ 32 Section 65.17. Compliance with Laws .................................................................................. 32 Section 65.18. Works for Hire ............................................................................................... 32 Section 65.19. Resource Conservation .................................................................................. 33 Section 65.20. Public Access to Meetings and Records ........................................................ 33 Section 65.21. Guaranteed Maximum Costs.......................................................................... 33 Section 65.22. Submitting False Claims; Monetary Penalties ............................................... 33 Section 65.23. Agreement Made in California; Venue .......................................................... 34 Section 65.24. Ownership of Results ..................................................................................... 34 Section 65.25. Audit and Inspection of Records.................................................................... 34 Section 65.26. Subcontracting ............................................................................................... 34 Section 65.27. Assignment .................................................................................................... 34 Section 65.28. Non-Waiver of Rights .................................................................................... 35 Section 65.29. City a Third-Party Beneficiary....................................................................... 35 Section 65.30. Food Service Waste Reduction Requirements ............................................... 35 Section 65.31. Graffiti Removal ............................................................................................ 35 EXHIBIT H FORM OF 2022AB BOND
4866-1592-3470.5
FOURTEENTH SUPPLEMENTAL INDENTURE
$[PAR A]
Aggregate Principal Amount of
Public Utilities Commission the
City And County of San Francisco
Wastewater Revenue Bonds
2022 Series A
(Refunding) (SSIP)
(Green Bonds)
$[PAR B]
Aggregate Principal Amount of
Public Utilities Commission of the
City And County of San Francisco
Wastewater Revenue Bonds,
2022 Series B
(Refunding) (Non-SSIP)
THIS FOURTEENTH SUPPLEMENTAL INDENTURE, dated as of [__] 1, 2022 (this “Fourteenth Supplemental Indenture”), is by and between PUBLIC UTILITIES COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO (the “Commission”), a commission duly constituted under the Charter (the “Charter”) of the City and County of San Francisco (the “City”), and U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION (as successor in interest to U.S. Bank, National Association), a national banking association duly organized and existing under and by virtue of the laws of the United States of America, as trustee (the “Trustee”); W I T N E S S E T H :
WHEREAS, this Fourteenth Supplemental Indenture is sup plemental to the Indenture, dated as of January 1, 2003 (the “Original Indenture”), between the Commission and the Trustee [(also known as U.S. Bank, N.A.) ], as amended by a First Amendment to Indenture dated as of May 1, 2010 (the “First Amendment”), and as supplemented by a First Supplemental Indenture, dated as of May 1, 2010 (the “First Supplemental Indenture”), as supplemented by a Second Supplemental Indenture, dated as of January 1, 2013 (the “Second Supplemental Indenture”), as supplemented by a Third Supplemental Indenture, dated as of February 1, 2013 (the “Third Supplemental Indenture”), as supplemented by a Fourth Supplemental Indenture, dated as of May 1, 2016 (the “Fourth Supplemental Indenture”), as amended by a Fifth Supplemental Indenture, dated as of September 14, 2017 (the “Fifth Supplemental Indenture”), as amended by a Sixth Supplemental Indenture, dated July 1, 2018 (the “Sixth Supplemental Indenture”), as further supplemented by the Seventh Supplemental Indenture, dated as of August 1, 2018 (the “Seventh Supplemental Indenture”), as further supplemented by the Eighth Supplemental Indenture, dated as of August 1, 2018 (the “Eighth Supplemental Indenture”), as further supplemented by the Ninth Supplemental Indenture, dated as of July 1, 2018 (the “Ninth Supplemental Indenture”), as further supplemented by the Tenth Supplemental Indenture, dated as of June 12, 2020 (the “Tenth Supplemental Indenture”), as further supplemented by the Eleventh Supplemental Indenture, dated as of June 12, 2020 (the “Eleventh Supplemental Indenture”), as further supplemented by the Twelfth Supplemental Indenture dated November 1, 2021 (the “Twelfth Supplemental Indenture”), as further supplemented by the Thirteenth Supplemental Indenture dated November 1, 2021 (the “Thirteenth Supplemental Indenture,” and, together with the First Amendment, First Supplemental Indenture, the Second Supplemental Indenture, the Third Supplemental Indenture, the Fourth Supplemental Indenture, the Fifth Supplemental Indenture, the Sixth Supplemental Indenture, the Seventh Supplemental Indenture, the Eighth Supplemental Indenture, the Ninth Supplemental Indenture, the Tenth Supplemental
2 4866-1592-3470.5
Indenture, the Eleventh Supplemental Indenture, the Twelfth Supplemental Indenture, the Thirteenth Supplemental Indentur e and this Fourteenth Supplemental Indenture, dated [___] 1, 2022 and the Original Indenture, the “Indenture”); and
WHEREAS, in January, 2003, the Commission issued the first series of Bonds under the Indenture designated the “Public Utilities Commission of the City and County of San Francisco Clean Water Revenue Bonds, 2003 Refunding Series A” (the “2003 Refunding Series A Bonds”), in the original principal amount of $396,270,000, for the purpose of (a) refunding certain sewer revenue bonds previously issued by the City to finance and refinance the acquisition of improvements to the Enterprise (as defined in the Indenture), which had previously been owned and operated by the City; (b) funding a reserve account for the 2003 Refunding Series A Bonds; and (c) paying costs of issuance, all as set forth in the Indenture; and WHEREAS, pursuant to Section 8B.124 of the City Charter, the Commission has the authority to issue additional revenue bonds for the purpose of reconstructing, replacing, expanding, repairing or improving water facilities or clean water facilities, or combinations of water and clean water facilities under the jurisdiction of the Commission, subject to certain conditions, including, among others, the adoption of an ordinance by a two-thirds vote of the Board of Supervisors of the City, under such terms and conditions as the Commission may authorize; and WHEREAS, on April 27, 2010, the Board of Supervisors passed by a two -thirds vote its Ordinance No: 93-10, signed by the Mayor of the City on May 3, 2010, approving the issuance and sale of wastewater revenue bonds pursuant to Article VIIIB of the City Charter to finance various capital projects benefiting the Enterprise, as well as paying the costs of issuance and other incidental costs relating thereto, in an aggregate principal amount not to exceed $297,756,235; and WHEREAS, in May, 2010, the Commission issued the second series of Bonds under the Indenture designated the “Public Utilities Commission of the City and County of San Francisco Wastewater Revenue Bonds, 2010 Series A” (the “2010 Series A Bonds”), in the original principal amount of $47,050,000, to refund certain commercial paper notes issued by the Commission to finance a portion of the Capital Improvement Program (“CIP”), to fund a reserve account for the 2010 Series A Bonds and to pay costs of issuance, all as set forth in the Indenture; and WHEREAS, in May, 2010, the Commission issued the third series of Bonds under the Indenture designated the “Public Utilities Commi ssion of the City and County of San Francisco Wastewater Revenue Bonds, 2010 Series B (Federally Taxable - Build America Bonds -Direct Payment)” (the “2010 Series B Bonds”), in the original principal amount of $192,515,000, to refund certain commercial paper notes, to fund a portion of the costs of the CIP and a portion of the costs of the Commission’s proposed Sewer System Improvement Program, to fund capitalized interest on the 2010 Series B Bonds, to fund a reserve account for the 2010 Series B Bonds and to pay costs of issuance, all as set forth in the Indenture; and WHEREAS, on June 12, 2012, the Board of Supervisors passed by a two -thirds vote its Ordinance No. 115-12, signed by the Mayor of the City on June 18, 2012, approving the issuance and sale of wastewater revenue bonds pursuant to Article VIIIB of the Charter to finance various capital projects benefiting the Enterprise, as well as paying the costs of issuance and other incidental costs relating thereto, in an aggregate principal amount not to exceed $522,810,000; and
3 4866-1592-3470.5
WHEREAS, on November 13, 2012, the Commission passed its Resolution No. 12-0210, and on December 11, 2012, the Board of Supervisors passed its Resolution No. 459-12; signed by the Mayor on December 18, 2012, approving, among other things, (a) the issuance of not to exceed $250,000,000 aggregate principal amount of wastewater revenue bonds to refund outstanding wastewater revenue bonds and certain loans made by the State of California Water Resources Control Board, pursuant to Section 9.109 of the Charter, as supplemented by California Government Code Sections 53580 et seq.; and (b) the issuance of not to exceed $420,000,000 aggregate principal amount of wastewater revenue bonds to finance or refinance (through the retirement of commercial paper notes) various capital projects benefiting the Enterprise (including reimbursing the Commission for certain capital costs previously paid with proceeds of wastewater commercial paper notes), pursuant to Section 8B.124; and WHEREAS, in January, 2013, the Commission issued the fourth series of Bonds under the Indenture designated the “Public Utilities Commission of the City and County of San Francisco Wastewater Revenue Bonds, 2013 Series A (Refunding)” (the “2013 Series A Bonds”), in the original principal amount of $193,400,000, to refund all of the 2003 Refunding Series A Bonds, to prepay certain loans made by the State of California Water Resources Control Board, and to pay costs of issuance, all as set forth in the Second Supplemental Indenture; and WHEREAS, in February 27, 2013, the Commission issued the fifth series of Bonds under the Indenture designated the “Public Utilities Commission of the City and County of San Francisco Wastewater Revenue Bonds, 2013 Series B” (the “2013 Series B Bonds”), in the original principal amount of $331,585,000, to finance or refinance (through the retirement of commercial paper notes) various capital projects benefiting the Enterprise (including reimbursing the Commission for certain capital costs paid wi th proceeds of wastewater commercial paper notes), fund capitalized interest, and to pay costs of issuance, all as set forth in the Third Supplemental Indenture; and
WHEREAS, on June 25, 2013, the Board of Supervisors passed by a two -thirds vote its Ordinance No. 123-13, which revised the fiscal year 2013 -14 capital improvement project of the Commission and reduced the revenue bond authorization under Ordinance No. 115- 12 by $27,870,059; and
WHEREAS, on July 2, 2014, the Board of Supervisors passed by a two- thirds vote Ordinance No. 107- 14, approving the issuance and sale of wastewater revenue bonds by the Commission pursuant to Article VIIIB of the Charter of the City, in an aggregate principal amount not to exceed $819,035,941, to finance capital projects benefiting the Enterprise; and WHEREAS, on June 9, 2015, the Board of Supervisors passed by a two- thirds vote Ordinance No. 0089 -15, which amended and supplemented Ordinance No. 107- 14 to provide authority for the Commission to execute and deliver one or m ore State of California Water Resources Control Board Installment Sale Agreements in connection with loans made by the State of California Water Resources Control Board, to finance capital projects benefiting the Enterprise; and
WHEREAS, on June 14, 2016, the Board of Supervisors passed by two- thirds vote Ordinance No. 111- 16, approving the issuance and sale of wastewater revenue bonds and
4 4866-1592-3470.5
authorizing the Commission to execute and deliver one or more State of California Water Resources Control Board Installment Sale Agreements in connection with loans made by the State of California Water Resources Control Board, pursuant to Article VIIIB of the Charter of the City, in an aggregate principal amount not to exceed $1,112,601,280, to finance capital projects benefiting the Enterprise; and
WHEREAS, on June 12, 2018, the Board of Supervisors passed by two- thirds vote Ordinance No. 144-18, approving the issuance and sale of wastewater revenue bonds, commercial paper, revolving credit notes, or bond anticipation notes, authorizing the Commission to execute and deliver one or more State of California Water Resources Control Board Installment Sale Agreements in connection with State Revolving Loans, and authorizing the Commission to execute and deliver loan agreements with the United States Environmental Protection Agency under the Water Infrastructure Finance and Innovation Act, all pursuant to Article VIIIB of the Charter of the City, in an aggregate principal amount not to exceed $987,414,494, to finance capital projects benefiting the Enterprise; and
WHEREAS, on September 29, 2020, the Board of Supervisors passed by two- thirds vote Ordinance No. 173-20, approving the issuance and sale of wastewater revenue bonds, commercial paper, revolving credit notes, or bond anticipation notes, authorizing the Commission to execute and deliver one or more State of California Water Resources Control Board Installment Sale Agreements in connection with State Revolving Loans, and authorizing the Commission to execute and deliver loan agreements with the United States Environmental Protection Agency under the Water Infrastructure Finance and Innovation Act, all pursuant to Article VIIIB of the Charter of the City, in an aggregate principal amount not to exceed $349,919,252, to finance capital projects benefiting the Enterprise, and further authorized the approved the issuance of wastewater revenue refunding bonds, to refund any outstanding obligations of the Enterprise, subject to the limitations set forth therein; and
WHEREAS, on March 22, 2016, the Commission passed its Resolution No. 16-0057, and on April 26, 2016, the Board of Supervisors passed its Resolution No. 154-16; signed by the Mayor on May 6, 2016, approving, among other things, the issuance of not to exceed $621,000,000 aggregate principal amount of wastewater revenue bonds to finance or refinance (through the retirement of commercial paper notes) various capital projects benefiting the Enterprise (including reimbursing the Commission for certain capital costs previously paid with proceeds of wastewater commercial paper notes), pursuant to Section 8B.124; and WHEREAS, on May 24, 2016, the Commission issued the sixth and seventh series of Bonds under the Indenture designated the “Public Utilities Commission of the City and County of San Francisco Wastewater Revenue Bonds, 2016 Series A (Green Bonds)” (the “ 2016 Series A Bonds”), in the original principal amount of $240,580,000 and “Public Utilities Commission of the City and County of San Francisco Wastewater Revenue Bonds , 2016 Series B” (the “2016 Series B Bonds”), in the original principal amount of $67,820,000, in each case to finance or refinance (through the retirement of commercial paper notes) various capital projects benefiting the Enterprise (including reimbursing the Commission for certain capital costs paid with proceeds of wastewater commercial paper notes), fund capitalized interest, and to pay costs of issuance, all as set forth in the Fourth Supplemental Indenture; and
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WHEREAS, on August 8, 2018, the Commission issued the eighth, ninth and tenth series of Bonds under the Indenture designated the “Public Utilities Commission of the City and County of San Francisco Wastewater Revenue Bonds, 2018 Series A (Green Bonds)” (the “2018 Series A Bonds”), in the original principal amount of $229,050,000, the “Public Utilities Commission of the City and County of San Francisco Wastewater Revenue Bonds, 2018 Series B” (the “2018 Series B Bonds”), in the original principal amount of $185,950,000 and the “Public Utilities Commission of the City and County of San Francisco Wastewater Revenue Bonds, 2018 Series C (Green Bonds)” (the “2018 Series C Bonds”) in the original principal amount of $179,145,000, in each case to finance or refinance (through the retirement of commercial paper notes) various capital projects benefiting the Enterprise, fund capitalized interest, and to pay costs of issuance, all as set forth in the Seventh Supplemental Indenture and the Eighth Supplemental Indenture; and WHEREAS, the Commission entered int o an Installment Sale Agreement executed on January 12, 2016, with the California State Water Resources Control Board in the aggregate principal amount of up to $7,435,000 (the “2016 SRF Loan”) to finance a capital project described therein benefiting the Enterprise; and
WHEREAS, the Commission entered into an Installment Sale Agreement executed by the Commission on September 14, 2017, with the California State Water Resources Control Board, in the aggregate principal amount of up to $34,445,778 (the “2017 Southeast Treatment Plant Primary/Secondary Upgrade SRF Loan”) to finance a capital project described therein benefiting the Enterprise; and
WHEREAS, the Commission entered into an Installment Sale Agreement executed by the Commission on September 14, 2017, with the California State Water Resources Control Board, as amended, in the aggregate principal amount of up to $40,006,740 (the “2017 Southeast Treatment Plant Disinfection Upgrade SRF Loan”) to finance a capital project described therein benefiting the Enterprise; and
WHEREAS, the Commission entered into an Installment Sale Agreement executed by the Commission on September 14, 2017, with the California State Water Resources Control Board in the aggregate principal amount of up to $20,199,435 (the “2017 North Point SRF Loan”) to finance a capital project described therein benefiting the Enterprise; and WHEREAS, the Commission entered into an Installment Sale Agreement executed by the Commission on May 7, 2020, with the California State Water Resources Control Board, as amended, in the aggregate principal amount of up to $54,387,969 (the “2020 Digester Gas Utilization Upgrade SRF Loan”) to finance a capital project described therein benefiting the Enterprise; and
WHEREAS, the Commission entered into an Installment Sale Agreement executed by the Commission on May 7, 2020, with the California State Water Resources Control Board, as amended, in the aggregate principal amount of up to $132,000,000 (the “2020 Water Pollution Control Plant Biosolids Digester Facilities SRF Loan”) to finance a capital project described therein benefiting the Enterprise; and
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WHEREAS, the Commission entered into an Installment Sale Agreement executed by the Commission on May 10, 2021, with the California State Water Resources Control Board, as amended, in the aggregate principal amount of up to $112,036,181 (the “2021 SEP New Headworks (GRIT) Replacement SRF Loan” and, together with the 2016 SRF Loan, the 2017 Southeast Treatment Plant Primary/Secondary Upgrade SRF Loan, the 2017 Southeast Treatment Plant Disinfection Upgrade SRF Loan, the 2017 North Point SRF Loan the 2020 Digester Gas Utilization Upgrade and the 2020 Water Pollution Control Plant Biosolids Digester Facilities, the “SRF Loans”) to finance a capital project described therein benefiting the Enterprise; and WHEREAS, on September 14, 2017, the Commission amended the Original Indenture as supplemented to the date thereof as set forth in the Fifth Supplemental Indenture; and WHEREAS, on July 10, 2018, the Commission approved amendments to the Original Indenture as amended and supplemented to the date thereof, as set forth in the Sixth Supplemental Indenture, which amendments bec ame effective in accordance with the terms of the Original Indenture and the Sixth Supplemental Indenture; and
WHEREAS, on July 27, 2018, the Commission executed and delivered the Ninth Supplemental Indenture in connection with the execution and delivery of a WIFIA Loan Agreement (the “Original Biosolids Digester Facilities WIFIA Loan Agreement”) with the United States Environmental Protection Agency in a principal amount up to $699,242,023; and WHEREAS, on June 12, 2020, the Commission executed and delivered the Tenth Supplemental Indenture in connection with the reauthorization of the Original Biosolids Digester Facilities WIFIA Loan Agreement (the “Biosolids Digester Facilities WIFIA Loan Agreement”) with the United States Environmental Protection Agency in a principal amount up to $699,242,023; and
WHEREAS, on June 12, 2020, the Commission executed and delivered the Eleventh Supplemental Indenture in connection with the execution and delivery of a WIFIA Loan Agreement (the “Southeast Treatment Plant Improvements Project WIFIA Loan Agreement” and together with the Biosolids Digester Facilities WIFIA Loan Agreement, the “WIFIA Loan Agreements”) with the United States Environmental Protection Agency in a principal amount up to $513,861,981; and
WHEREAS, on November 30, 2021, the Commission issued two series of notes under the Indenture designated as the “Public Utilities Commission of the City and County of San Francisco Wastewater Revenue Notes 2021 Series A (Green Notes)” (the “2021 Series A Notes”), in the original principal amount of $218,355,000, and the “Public Utilities Commission of the City and County of San Francisco Wastewater Revenue Notes 2021 Series B (Green Notes)” (the “2021 Series B Notes”), in the original principal amount of $129,110,000, in each case, to finance various capital projects benefiting the Enterprise, and to pay costs of issuance, all as set forth in the Twelfth Supplemental Indenture; and
WHEREAS, on November 30, 2021, the Commission issued the [eleventh and twelfth] series of Bonds under the Indenture designated as the “Public Utilities Commission of the City and County of San Francisco Wastewater Revenue Bonds 2021 Series A (SSIP)(Green Bonds)” (the
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“2021 Series A Bonds”), in the original principal amount of $260,835,000 and the “Public Utilities Commission of the City and County of San Francisco Wastewater Revenue Bonds 2021 Series B (Non-SSIP)” (the “Series 2021 Series B Bonds”), in the original principal amount of $37,045,000, in each case to refinance (through the retirement of commercial paper notes) various capital projects benefiting the Enterprise, fund capitalized interest, and to pay costs of issuance, all as set forth in the Thirteenth Supplemental Indenture; and
WHEREAS, pursuant to Section 9.109 of the City Charter (as supplemented by California Government Code Section 53580 et seq.), the Board of Supervisors is authorized to provide for the issuance of bonds of the City for the purpose of refunding any revenue bonds of the City then outstanding without voter approval, providing that such refunding is expected to result in net debt service savings to the City on a present value basis; and WHEREAS, on [ April 12 ], 2022, the Commission passed its Resolution No. 22-[___] , approving, among other things, the issuance of not to exceed $ [_______] aggregate principal amount of wastewater revenue bonds, in one or more series, to refund outstanding wastewater revenue bonds, pursuant to certain ordinances of the Board, the Indenture and Section 9.109 of the Charter (as supplemented by California Government Code Sections 53580 et seq.); and WHEREAS, the Commission has determined to issue additional series of Bonds under this Fourteenth Supplemental Indenture designated the “Wastewater Revenue Bonds, 2022 Series A (Refunding) (SSIP) (Green Bonds) ” in the original principal amount of $[PAR A] (the “2022 Series A Bonds”), and the “Wastewater Revenue Bonds, 2022 Series B (Refunding) (Non-SSIP)” in the original principal amount of $[PAR B] (the “2022 Series B Bonds”, and together with the 2022 Series A Bonds, the “2022AB Bonds”), to among other things, refund all or a portion of the outstanding 2013 Series A Bonds and 2013 Series B Bonds, pursuant to Section 9.109 of the Charter (as supplemented by California Government Code Sections 53580 et seq.), and Ordinance No. 173-20, and an Escrow Agreement, dated as of [_________], 2022 (the “Escrow Agreement”), by and between the Commission and U.S. Bank Trust Company, National Association (as successor in interest to U.S. Bank, National Association), as escrow agent; and WHEREAS, the 2022AB Bonds will be issued by the Commission under the Indenture each as a separate Series of Bonds payable on a parity with the 2010 Series B Bonds, [ the 2013 Series A Bonds, the 2013 Series B Bonds], the 2016 Series A Bonds, the 2016 Series B Bonds, the 2018 Series A Bonds, the 2018 Series B Bonds, the 2018 Series C Bonds, the 2021 Series A Notes, the 2021 Series B Notes, the 2021 Series A Bonds, the 2021 Series B Bonds , the SRF Loans and the WIFIA Loan Agreements; and
WHEREAS, the conditions and limitations contained in the Law and the Indenture will be satisfied at the time of issuance of the 2022AB Bonds; and WHEREAS, all acts, conditions and things required by law to exist, to have happened and to have been performed precedent to and in connection with the execution and the entering into of this Fourteenth Supplemental Indenture do exist, have happened and have been performed in regular and due time, form and manner as required by law, and the parties hereto are now duly authorized to execute and enter into this Fourteenth Supplemental Indenture;
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NOW, THEREFORE, the parties hereto agree, as follows:
ARTICLE LXII
DEFINITIONS
The terms defined in this section shall, for all purposes of this Fourteenth Supplemental Indenture, have the meanings herein specified, to be equally applicable to both the singular and plural forms of any of the terms herein defined. Terms defined in the Indenture not otherwise defined herein shall have the meanings specified therein. “Closing Date” means [__________], 2022, the date of the original issuance and delivery of the 2022AB Bonds.
“Escrow Agreement” means the Escrow Agreement, dated as of its date, by and between the Commission and U.S. Bank Trust Company, National Association, as trustee and escrow agent for the Refunded 2013A Bonds and the Refunded 2013B Bonds. “Refunded 2013A Bonds” means the 2013 Series A Bonds refunded and defeased with a portion of the proceeds of the 2022 Series A Bonds, as set forth in the Escrow Agreement. “Refunded 2013B Bonds ” means the 2013 Series B Bonds refunded and defeased with a portion of the proceeds of the 2022 Series B Bonds, as set forth in the Escrow Agreement. “Refunded 2013A Bonds Escrow Fund” means the fund by that name established and maintained pursuant to the Escrow Agreement.
“Refunded 2013B Bonds Escrow Fund” means the fund by that name established and maintained pursuant to the Escrow Agreement.
“2022AB Bonds” means the 2022 Series A Bonds and the 2022 Series B Bonds. “2022AB Continuing Disclosure Certificate” means the Continuing Disclosure Certificate, dated the date of initial issuance of the 2022AB Bonds, executed and delivered by the Commission, as it may be supplemented and amended in accordance with its terms. “2022AB Costs of Issuance Fund ” means the fund by that name established pursuant to Section 63.05.
“2022 Series A Bonds ” means the 2022 Series A Bonds authorized pursuant to Section 63.01(a).
“2022 Series A Rebate Fund” means the fund by that name established pursuant to Section 63.07.
[“2022 Series A Sinking Fund Account” means the account by that name established within the Principal Fund pursuant to Section 63.10.]
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“2022 Series B Bonds ” means the 2022 Series B Bonds authorized pursuant to Section 63.01(b).
“2022 Series B Rebate Fund” means the fund by that name established pursuant to Section 63.08.
[“2022 Series B Sinking Fund Account” means the account by that name established within the Principal Fund pursuant to Section 63.12]
ARTICLE LXIII
PROVISIONS RELATING TO BONDS
Section 63.01. Authorization and Terms of Bonds.
(a) A Series of Bonds are hereby created and such Bonds are designated as the “Wastewater Revenue Bonds, 2022 Series A (Refunding) (SSIP) (Green Bonds),” which shall be a Series of Clean Water Revenue Bonds issued under the Indenture. The aggregate principal amount of 2022 Series A Bonds that may be issued and Outstanding under this Fourteenth Supplemental Indenture shall not exceed $[PAR A], except as may be otherwise provided in Section 2.08. The 2022AB Bonds shall be of the tenor known as Current Interest Bonds.
(b) A Series of Bonds are hereby created and such Bonds are designated as the “Wastewater Revenue Bonds, 2022 Series B (Refunding) (Non-SSIP),” which shall be a Series of Clean Water Revenue Bonds issued under the Indenture. The aggregate principal amount of 2022 Series B Bonds that may be issued and Outstanding under this Fourteenth Supplemental Indenture shall not exceed $[PAR B], except as may be otherwise provided in Section 2.08. The 2022AB Bonds shall be of the tenor known as Current Interest Bonds. (c) The 2022AB Bonds shall be initially registered in the name of “Cede & Co.,” as nominee of The Depository Trust Company, New York, New York, and shall be evidenced by one 2022 Series A Bond and one 2022 Series B Bond maturing on each respective maturity date in a denomination corresponding to the total principal designated to mature on such date. Registered ownership of the 2022AB Bonds , or any portion thereof, may not thereafter be transferred except as set forth in Section 63.03 herein. (d) The 2022AB Bonds shall be issued as fully registered Bonds without coupons in the denominations of $5,000 or any integral multiple thereof; provided that no 2022AB Bond shall have principal maturing on more than one principal maturity date. The 2022AB Bonds shall be dated as of the Closing Date, the date of delivery thereof, and shall accrue interest from such date.
(e) The 2022 Series A Bonds shall mature on October 1 in the following years and in the following amounts and shall bear interest at the following rates per annum payable on April 1 and October 1 in each year, commencing [October/ April 1, 20__] , calculated on the basis of a 360-day year consisting of twelve 30-day months:
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Maturity
(October 1)
Principal
Amount
Interest
Rate
(f) The 2022 Series B Bonds shall mature on October 1 in the following years and in the following amounts and shall bear interest at the following rates per annum payable on April 1 and October 1 in each year, commencing [October/April 1, 20__] , calculated on the basis of a 360-day year consisting of twelve 30-day months:
Maturity
(October 1)
Principal
Amount
Interest
Rate
(g) The principal of and premium, if any, on the 2022AB Bonds shall be payable by check or wire in lawful money of the United States of America to the Owner thereof, upon the surrender thereof at the corporate trust office of U.S. Bank Trust Company, National Association, in San Francisco, California, or such other office designated by the Trustee.
The interest on the 2022AB Bonds shall be payable in like lawful money to the person whose name appears on the bond registration books of the Trustee as the Owner thereof as of the close of business on the 15th day of the calendar month immediately preceding an interest payment date, whether or not such day is a Business Day, such interest to be paid by check mailed to such Owner at such address as appears on such registration books or at such address as such Owner may have filed with the Trustee for that purpose, or at the request of an Owner of at least $1,000,000 in aggregate principal amount of Bonds filed with the Trustee by such 15th day, by wire transfer to such account designated in such request at a financial institution in the United States.
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(h) Each Bond shall bear interest from the interest payment date next preceding the date of authentication thereof unless it is authenticated as of a day during the period from the 16th day of the calendar month next preceding any interest payment date to the interest payment date, inclusive, in w hich event it shall bear interest from such interest payment date, or unless it is authenticated on or before [September/March ] 15, 20[__], in which event it shall bear interest from the Closing Date; provided, however, that if, at the time of authentication of any Bond, interest is in default on Outstanding Bonds, such Bond shall bear interest from the interest payment date to which interest has previously been paid or made available for payment on the Outstanding Bonds and shall be payable to the Owners t hereof of record as of a special date as shall be established by the Trustee following such default.
(i) The Trustee shall assign each Bond authenticated and registered by it a distinctive letter, or number, or letter and number, and shall maintain a record thereof which shall be available to the Commission for inspection.
(j) On January 30, 2013, certain amendments set forth in the First Amendment that govern the sizing of the Required Reserve for each Series of Bonds became effective in accordance with the terms of the Indenture. In accordance therewith, the Commission has determined not to fund the Required Reserve for the 2022AB Bonds. (k) The Commission has reviewed all proceedings heretofore taken relative to the authorization of the 2022AB Bonds and has found, as a result of such review, that all conditions, things and acts required by law to exist, happen or be performed precedent to and in the issuance of the 2022AB Bonds do exist, have happened and have been performed in due time, form and manner as required by law, and the Commission is authorized, pursuant to each and every requirement of law, including the Law, to issue the 2022AB Bonds in the manner and form provided in this Fourteenth Supplemental Indenture.
Section 63.02. Forms of Bonds . The 2022AB Bonds and the Trustee’s certificates of authentication and registration and the forms of assignment to appear thereon shall be in substantially the forms set forth as Exhibit H to this Fourteenth Supplemental Indenture, with necessary or appropriate variations, omissions and insertions as permitted or required by this Fourteenth Supplemental Indenture.
Section 63.03. Use of Depository.
(a) The 2022AB Bonds shall be initially registered as provided in Section 63.01(c) and Section 63.01(i) hereof. Registered ownership of the 2022AB Bonds, or any portions thereof, may not thereafter be transferred except:
(i) to any successor of The Depository Trust Company or its nominee, or of any substitute depository designated pursuant to clause (ii) of this clause (a) (a “Substitute Depository”); provided that any successor of The Depository Trust Company or Substitute Depository shall be qualified under any applicable laws to provide the service proposed to be provided by it;
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(ii) to any Substitute Depository not objected to by the Trustee, upon (A) t he resignation of The Depository Trust Company or its successor (or any Substitute Depository or its successor) from its functions as depository, or ( B) a determination by the Commission that The Depository Trust Company (or its successor) is no longer able to carry out its functions as depository; provided that any such Substitute Depository shall be qualified under any applicable laws to provide the services proposed to be provided by it; or
(iii) to any person as provided below, upon (1) the resignation of The Depository Trust Company or its successor (or any Substitute Depository or its successor) from its functions as depository, or (2) a determination by the Commission to remove The Depository Trust Company or its successor (or Substitute Depository or its successor) from its functions as depository. (b) In the case of any transfer pursuant to clause (i) or clause (ii) of subsection (a) of this Section 63.03, upon receipt of all Outstanding 2022AB Bonds by the Trustee, together with a Written Request of the Commission to the Trustee designating the Substitute Depository, a single new 2022AB Bond, which the Commission shall prepare or cause to be prepared, shall be executed and delivered for each maturity of 2022AB Bonds then Outstanding, registered in the name of such successor or such Substitute Depository, or their nominees, as the case may be, all as specified in such Written Request of the Commission.
In the case of any transfer pursuant to Section 63.03(a)(iii), upon receipt of all Outstanding 2022AB Bonds by the Trustee, together with a Written Request of the Commission to the Trustee, new 2022AB Bonds , which the Commission shall prepare or cause to be prepared in definitive form, shall be executed and delivered in such denominations and registered in the names of such persons as are requested in such Written Request of the Commission, subject to the limitations of Section 63.01 hereof, provided that the Trustee shall not be required to deliver such new 2022AB Bonds within a period less than 60 days after the date of receipt of such Written Request from the Commission. (c) In the case of a partial redemption or an advance refunding of any 2022AB Bonds evidencing a portion of the principal maturing in a particular year, The Depository Trust Company or its successor (or any Substitute Depository or its successor) shall make an appropriate notation on such 2022AB Bonds indicating the date and amounts of such reduction in principal, in form acceptable to the Trustee. The Trustee shall not be liable for such depository’s failure to make such notations or errors in making such notations. (d) The Commission and the Trustee shall be entitled to treat the person in whose name any 2022AB Bond is registered as the Owner thereof for all purposes of the Indenture and any applicable laws, notwithstanding any notice to the contrary received by the Trustee or the Commission; and the Commission and the Trustee shall not have responsibility for transmitting payments to, communicating with, notifying, or otherwise dealing with any beneficial owners of the 2022AB Bonds . Neither the Commission nor the Trustee shall have any responsibility or obligation, legal or otherwise, to any such beneficial owners or to any other party, including The Depository Trust Company or its
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successor (or Substitute Depository or its successor), except to the Owner of any 2022AB Bonds, and the Trustee may rely conclusively on its records as to the identity of the Owners of the 2022AB Bonds.
(e) Notwithstanding any other provision of this Fourteenth Supplemental Indenture and so long as all Outstanding 2022AB Bonds are registered in the name of Cede & Co. or its registered assigns, the Commission and the Trustee shall cooperate with Cede & Co., as sole registered Bondowner, and its registered assigns, in effecting payment of the principal of and redemption premium, if any, and interest on the 2022AB Bonds by arranging for payment in such manner that funds for such payments are properly identified and are made available on the date they are due all in accordance with the Letter of Representations delivered by the Commission and the Trustee to The Depository Trust Company with respect to the 2022AB Bonds, the provisions of which the Trustee may rely upon to implement the foregoing procedures notwithstanding any inconsistent provisions herein.
Section 63.04. Issuance of 2022AB Bonds. At any time after the execution of this Fourteenth Supplemental Indenture , the Commission may execute and the Trustee may authenticate and upon a Written Request or Certificate of the Commission, deliver 2022 Series A Bonds in the aggregate principal amount of $[PAR A] and 2022 Series B Bonds in the aggregate principal amount of $[PAR B] to the respective initial purchasers thereof specified in such Written Request or Certificate.
Section 63.05. Application of Proceeds of 2022 Series A Bonds. (a) On the Closing Date, the initial purchaser(s) of the 2022 Series A Bonds will pay and deliver the purchase price of the 2022 Series A Bonds (including the good faith deposit paid prior to the Closing Date) equal to $[______] (comprised of the principal amount of the 2022 Series A Bonds of $[PAR A].00, plus [net] original issue premium on the 2022 Series A Bonds of $[__________], less an underwriter’s discount in the amount of $[_________]) to the Trustee, who shall deposit and transfer this amount as follows:
(i) The Trustee shall deposit $[______] in a separate fund to be known as the “2022AB Costs of Issuance Fund,” which the Trustee hereby agrees to establish and maintain. The money in the 2022AB Costs of Issuance Fund shall be used and disbursed in the manner provided herein for the purpose of paying costs of issuance incidental to or connected with the issuance of the 2022 Series A B Bonds (or for making reimbursements to the Commission or any other person, firm or corporation for such costs theretofore paid by such person or it). (ii) The Trustee, as escrow agent for the Refunded 2013A Bonds, shall deposit $[______] in the Refunded 2013A Bonds Escrow Fund established under the Escrow Agreement and such funds shall be applied as set forth therein.
Section 63.06. Application of Proceeds of 2022 Series B Bonds. (a) On the Closing Date, the initial purchaser (s) of the 2022 Series B Bonds will pay and deliver the purchase price of the 2022 Series B Bonds (including the good
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faith deposit paid prior to the Closing Date) equal to $[________] (comprised of the principal amount of the 2022 Series B Bonds of $[PAR B] .00, plus [net] original issue premium on the 2022 Series B Bonds of $[________], less an underwriter’s discount in the amount of $[_______] ) to the Trustee, who shall deposit and transfer this amount as follows:
(i) The Trustee shall deposit $ [_______] in the 2022AB Costs of Issuance Fund (established pursuant to Section 63.05(a)(i) . The money in the 2022AB Costs of Issuance Fund shall be used and disbursed in the manner provided herein for the purpose of paying costs of issuance incidental to or connected with the issuance of the 2022AB Bonds (or for making reimbursements to the Commission or any other person, firm or corporation for such costs theretofore paid by such person or it).
(ii) The Trustee, as escrow agent for the Refunded 2013B Bonds, shall deposit $[______] in the Refunded 2013B Bonds Escrow Fund established under the Escrow Agreement and such funds shall be applied as set forth therein.
Section 63.07. Establishment and Application of the 2022 Series A Rebate Fund. (a) The Trustee shall establish and maintain a fund separate from any other fund established and maintained hereunder to be known as the “2022 Series A Rebate Fund.” Within the 2022 Ser ies A Rebate Fund, the Trustee shall maintain such accounts as it is instructed by the Commission as necessary in order to comply with the terms and requirements of the Tax Certificate with respect to the 2022 Series A Bonds, dated the date of issuance of the 2022 Series A Bonds (for purposes of this Section 63.07, the “Tax Certificate”).
Subject to the transfer provisions provided in paragraph (e) below, all money at any time deposited in the 2022 Series A Rebate Fund shall be held by the Trustee for the account of the Commission in trust, to the extent required to satisfy the requirements for rebate, as set forth in the Tax Certificate (for purposes of this Section 63.07, the “ 2022 Series A Rebate Requirement”), for payment to the federal government of the United States of America, and no other person shall have any rights in or claim to such money. All amounts deposited into or on deposit in the 2022 Series A Rebate Fund shall be governed by this Section 63.07, by Section 63.14 hereof and by the Tax Certificate (which is incorporated herein by reference). The Trustee shall be deemed conclusively to have complied with such provisions and fulfilled its obligation with respect to rebate as long as it follows the written directions of the Commission, including supplying all necessary information in the manner provided in the Tax Certificate. The Trustee shall not be required to take any actions under this Section 63.07, Section 63.14 hereof or the Tax Certificate in the absence of written directions by the Commission, and shall have no liability or responsibility to enforce compliance by the Commission with the terms of the Tax Certificate nor make computations in connection therewith. (b) Upon the Commission’s written direction, an amount shall be deposited to the 2022 Series A Rebate Fund by the Trustee from deposits by the Commission so that
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the balance of the amount on deposit thereto equals the 2022 Series A Rebate Requirement.
Computations of the 2022 Series A Rebate Requirement shall be furnished by or on behalf of the Commission in accordance with the Tax Certificate. (c) The Trustee shall have no obligation to rebate any amounts required to be rebated pursuant to this Section 63.07, other than from moneys held in the funds and accounts created under the Indenture or from other moneys provided to it by or on behalf of the Commission.
(d) The Trustee shall invest all amounts held in the 2022 Series A Rebate Fund in Permitted Investments as instructed in writing by the Commission, subject to the restrictions set forth in the Tax Certificate. Moneys shall not be transferred from the 2022 Series A Rebate Fund except as provided in paragraph (e) below. (e) Upon receipt of the Commission’s written directions, the Trustee shall remit part or all of the balances in the 2022 Series A Rebate Fund to the United States, as so directed. In addition, if the Commission so directs, the Trustee will deposit moneys into or transfer moneys out of the 2022 Series A Rebate Fund from or into such accounts or funds as directed by the Commission’s written directions. Any funds remaining in the 2022 Series A Rebate Fund after redemption and payment of all of the 2022 Series A Bonds and payment and satisfaction of any 2022 Series A Rebate Requirement shall be withdrawn and remitted to the Commission upon the Commission’s written request. (f) Notwithstanding any other provision of the Indenture, the obligation to remit the 2022 Series A Rebate Requirement to the United States and to comply with all other requirements of this Section 63.07, Section 63.14 hereof and the Tax Certificate shall survive the defeasance or payment in full of the 2022 Series A Bonds.
Section 63.08. Establishment and Application of the 2022 Series B Rebate Fund. (a) The Trustee shall establish and maintain a fund separate from any other fund established and maintained hereunder to be known as the “2022 Series B Rebate Fund.” Within the 2022 Series B Rebate Fund, the Trustee shall maintain such accounts as it is instructed by the Commission as necessary in order to comply with the terms and requirements of the Tax Certificate with respect to the 2022 Series B Bonds, dated the date of issuance of the 2022 Series B Bonds (for purposes of this Article LXIII, the “Tax Certificate”).
Subject to the transfer provisions provided in paragraph (e) below, all money at any time deposited in the 2022 Series B Rebate Fund shall be held by the Trustee for the account of the Commission in trust, to the extent required to satisfy the requirements for rebate, as set forth in the Tax Certificate (for purposes of this Section 63.08, the “ 2022 Series B Rebate Requirement ”), for payment to the federal government of the United States of America, and no other person shall have any rights in or claim to such money.
All amounts deposited into or on deposit in the 2022 Series B Rebate Fund shall be governed by this Section 63.08, by Section 63.14 hereof and by the Tax Certificate (which is incorporated herein by reference). The Trustee shall be deemed conclusively to have
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complied with such provisions and fulfilled its obligation with respect to rebate as long as it follows the written directions of the Commission, including supplying all necessary information in the manner provided in the Tax Certificate. The Trustee shall not be required to take any actions under this Section 63.08, Section 63.14 hereof or the Tax Certificate in the absence of written directions by the Commission, and shall have no liability or responsibility to enforce compliance by the Commission with the terms of the Tax Certificate nor make computations in connection therewith. (b) Upon the Commission’s written direction, an amount shall be deposited to the 2022 Series B Rebate Fund by the Trustee from deposits by the Commission so that the balance of the amount on deposit thereto equals the 2022 Series B Rebate Requirement.
Computations of the 2022 Series B Rebate Requirement shall be furnished by or on behalf of the Commission in accordance with the Tax Certificate. (c) The Trustee shall have no obligation to rebate any amounts required to be rebated pursuant to this Section 63.08, other than from moneys held in the funds and accounts created under the Indenture or from other moneys provided to it by or on behalf of the Commission.
(d) The Trustee shall invest all amounts held in the 2022 Series B Rebate Fund in Permitted Investments as instructed in writing by the Commission, subject to the restrictions set forth in the Tax Certificate. Moneys shall not be transferred from the 2022 Series B Rebate Fund except as provided in paragraph (e) below. (e) Upon receipt of the Commission’s written directions, the Trustee shall remit part or all of the balances in the 2022 Series B Rebate Fund to the United States, as so directed. In addition, if the Commission so directs, the Trustee will deposit moneys into or transfer moneys out of the 2022 Series B Rebate Fund from or into such accounts or funds as directed by the Commission’s written directions. Any funds remaining in the 2022 Series B Rebate Fund after redemption and payment of all of the 2022 Series B Bonds and payment and satisfaction of any 2022 Series B Rebate Requirement shall be withdrawn and remitted to the Commission upon the Commission’s written request. (f) Notwithstanding any other provision of the Indenture, the obligation to remit the 2022 Series B Rebate Requirement to the United States and to comply with all other requirements of this Section 63.08, Section 63.14 hereof and the Tax Certificate shall survive the defeasance or payment in full of the 2022 Series B Bonds.
Section 63.09. Terms of Redemption—2022 Series A Bonds. (a) (i) Optional Redemption. The 2022 Series A Bonds shall be subject to redemption prior to their stated maturity, at the option of the Commission, from and to the extent of any source of available funds, as a whole or in part, on any date on or after [____________], at a redemption price equal to 100% of the principal amount of the 2022 Series A Bonds to be redeemed, plus accrued interest thereon to the date fixed for redemption, without premium. If 2022 Series A Bonds are to be optionally redeemed in part, the Commission shall direct the maturities, or portions thereof, to be redeemed, and,
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if less than all of the 2022 Series A Bonds of a particular maturity are to be redeemed, the 2022 Series A Bonds shall be redeemed by lot within any such maturity. (ii) Mandatory Sinking Fund Account Redemption. The 2022 Series A Bonds maturing on October 1, [___], and October 1, [___], and payable from the 2022 Series A Sinking Fund Account, are further subject to redemption prior to their stated maturity, from the 2022 Series A Sinking Fund Account, on any October 1 on or after October 1, [___], and October 1, [___], respectively, by lot within any such maturity if less than all of the 2022 Series A Bonds of such maturity and tenor be redeemed, upon payment of the principal amount thereof and accrued interest thereon to the date fixed for redemption, without premium, in accordance with the schedules shown in Section [___] herein.
(b) Application of Terms of Indenture . The provisions of the Indenture relating to redemption of Bonds set forth in Sections 4.02 (“Selection of Bonds for Redemption”), 4.03 (“Notice of Redemption”), 4.04 (“Partial Redemption of Bond”), 4.05 (“Effect of Redemption”) and 4.06 (“Rescission of Notice of Redemption”) shall apply to the redemption of the 2022 Series A Bonds.
Section 63.10. 2022 Series A Sinking Fund Account. The Trustee shall establish and hold within the Principal Fund established under Section 5.02(a) of the Indenture, a 2022 Series A Sinking Fund Account, which the Commission hereby covenants and agrees to cause to be maintained, for payment of the Bond Obligation of the 2022 Series A Term Bonds.
The Trustee, on or before September 30 of each year (commencing on or before September 30, 20[__]), shall deposit in the 2022 Series A Sinking Fund Account from the Principal Fund moneys in an amount sufficient to call and redeem or to pay at maturity, as the case may be, the principal of 2022 Series A Term Bonds in the following respective principal amounts on the next succeeding October 1 in each of the following years (each such deposit of moneys being referred to as a “2022 Series A Minimum Sinking Fund Account Payment”). 2022 Series A Term Bonds maturing on October 1, 20[__]
October 1 of the Year Principal Amount
*
____________________
*Final Maturity Date
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2022 Series A Term Bonds maturing on October 1, 20[__]
October 1 of the Year Principal Amount
$
*
____________________
*Final Maturity Date
During the twelve -month period immediately preceding each redemption from the 2022 Series A Sinking Fund Account, the Commission may satisfy, in whole or in part, the 2022 Series A Minimum Sinking Fund Account Payment and the redemption therefrom by depositing with the Trustee 2022 Series A Term Bonds for cancellation prior to the Trustee’s selection of the 2022 Series A Term Bonds for redemption.
All moneys in the 2022 Series A Sinking Fund Account, at the Written Request of the Commission, shall be used and withdrawn by the Trustee at any time for the purchase of 2022 Series A Term Bonds (except that no 2022 Series A Term Bonds maturing in any year shall be purchased so long as any 2022 Series A Term Bonds maturing in any earlier year and being of like tenor are Outstanding) at public or private sale, as and when and at such prices (including brokerage and other charges, but excluding accrued interest, which is payable from the Interest Fund) as the Commission shall direct by Written Request, but not to exceed the principal thereof, and all 2022 Series A Term Bonds so purchased by the Trustee or deposited by the Commission, shall be cancelled and delivered to the Commission; provided, however, that:
(a) all moneys in the 2022 Series A Sinking Fund Account on each September 15, beginning on September 15, 20[__] and ending on September 15, 20[__] , together with any additional sums the Trustee expects to receive for deposit in the 2022 Series A Sinking Fund Account after such date and on or before the next succeeding October 1, shall be used and withdrawn by the Trustee solely for the purpose of redeeming the 2022 Series A Term Bonds that are subject to redemption under this Section 63.10; and (b) the Trustee shall during each twelve -month period beginning with the twelve - month period ending on October 1, 20[__], purchase or call and redeem (as herein provided) an aggregate amount of 2022 Series A Term Bonds equal to at least the amount of Bond Obligation of the 2022 Series A Term Bonds identified above in this Section 63.10 for such twelve -month period reduced by the principal amount of 2022 Series A Term Bonds deposited by the Commission with the Trustee, except that if 2022 Series A Term Bonds of any Term Bond maturity have previously been redeemed or purchased by the Trustee or deposited by the Commission in excess of the amount of Bond Obligation of the 2022 Series A Term Bonds identified above in this Section 63.10, there shall be deemed to have been a reduction of the remaining amounts stated above in this Section 63.10 on a Proportionate Basis, and further except that moneys in the 2022 Series A Sinking Fund Account shall be used, to the extent necessary, to purchase or retire the Outstanding 2022 Series A Term Bonds at the maturity thereof.
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The Commission hereby covenants and agrees with the Owners of the 2022 Series A Term Bonds to call and redeem 2022 Series A Term Bonds from the 2022 Series A Sinking Fund Account pursuant to this Section 63.10 on October 1 in each of the years, and in the amounts, stated above in this Section 63.10.
Section 63.11. Terms of Redemption—2022 Series B Bonds. (a) (i) Optional Redemption. The 2022 Series B Bonds shall be subject to redemption prior to their stated maturity, at the option of the Commission, from and to the extent of any source of available funds, as a whole or in part, on any date on or after [____________], at a redemption price equal to 100% of the principal amount of the 2022 Series B Bonds to be redeemed, plus accrued interest thereon to the date fixed for redemption, without premium. If 2022 Series B Bonds are to be optionally redeemed in part, the Commission shall direct the maturities, or portions thereof, to be redeemed, and, if less than all of the 2022 Series B Bonds of a particular maturity are to be redeemed, the 2022 Series B Bonds shall be redeemed by lot within any such maturity. (ii) Mandatory Sinking Fund Account Redemption. The 2022 Series B Bonds maturing on October 1, [___], and October 1, [___], and payable from the 2022 Series B Sinking Fund Account, are further subject to redemption prior to their stated maturity, from the 2022 Series B Sinking Fund Account, on any October 1 on or after October 1, [___], and October 1, [___], respectively, by lot within any such maturity if less than all of the 2022 Series B Bonds of such maturity and tenor be redeemed, upon payment of the principal amount thereof and accrued interest thereon to the date fixed for redemption, without premium, in accordance with the schedules shown in Section [___] herein.
(b) Application of Terms of Indenture . The provisions of the Indenture relating to redemption of Bonds set forth in Sections 4.02 (“Selection of Bonds for Redemption”), 4.03 (“Notice of Redemption”), 4.04 (“Partial Redemption of Bond”), 4.05 (“Effect of Redemption”) and 4.06 (“Rescission of Notice of Redemption”) shall apply to the redemption of the 2022 Series B Bonds.
Section 63.12. 2022 Series B Sinking Fund Account. The Trustee shall establish and hold within the Principal Fund established under Section 5.02(a) of the Indenture, a 2022 Series B Sinking Fund Account, which the Commission hereby covenants and agrees to cause to be maintained, for payment of the Bond Obligation of the 2022 Series B Term Bonds.
The Trustee, on or before September 30 of each year (commencing on or before September 30, 20[__]), shall deposit in the 2022 Series B Sinking Fund Account from the Principal Fund moneys in an amount sufficient to call and redeem or to pay at maturity, as the case may be, the principal of 2022 Series B Term Bonds in the following respective principal amounts on the next succeeding October 1 in each of the following years (each such deposit of moneys being referred to as a “2022 Series B Minimum Sinking Fund Account Payment”).
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2022 Series B Term Bonds maturing on October 1, 20[__]
October 1 of the Year Principal Amount
*
____________________
*Final Maturity Date
2022 Series B Term Bonds maturing on October 1, 20[__]
October 1 of the Year Principal Amount
$
*
____________________
*Final Maturity Date
During the twelve -month period immediately preceding each redemption from the 2022 Series B Sinking Fund Account, the Commission may satisfy, in whole or in part, the 2022 Series B Minimum Sinking Fund Account Payment and the redemption therefrom by deposi ting with the Trustee 2022 Series B Term Bonds for cancellation prior to the Trustee’s selection of the 2022 Series B Term Bonds for redemption.
All moneys in the 2022 Series B Sinking Fund Account, at the Written Request of the Commission, shall be used and withdrawn by the Trustee at any time for the purchase of 2022 Series B Term Bonds (except that no 2022 Series B Term Bonds maturing in any year shall be purchased so long as any 2022 Series B Term Bonds maturing in any earlier year and being of like tenor are Outstanding) at public or private sale, as and when and at such prices (including brokerage and other charges, but excluding accrued interest, which is payable from the Interest Fund) as the Commission shall direct by Written Request, but not to exceed the principal thereof, and all 2022 Series B Term Bonds so purchased by the Trustee or deposited by the Commission, shall be cancelled and delivered to the Commission; provided, however, that:
(a) all moneys in the 2022 Series B Sinking Fund Account on each September 15, beginning on September 15, 20[__] and ending on September 15, 20[__], together with any additional sums the Trustee expects to receive for deposit in the 2022 Series B Sinking Fund Account after such date and on or before the next succeeding October 1, shall be used and withdrawn by the Trustee solely for the purpose of redeeming the 2022 Series B Term Bonds that are subject to redemption under this Section 63.12; and (b) the Trustee shall during each twelve -month period beginning with t he twelve-month period ending on October 1, 20[__], purchase or call and redeem (as herein provided) an aggregate amount of 2022 Series B Term Bonds equal to at least the amount of Bond Obligation of the 2022 Series B Term Bonds identified above in this Section 63.12for such twelve- month period reduced by the principal amount of 2022 Series B Term Bonds deposited by the
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Commission with the Trustee, except that if 2022 Series B Term Bonds of any Term Bond maturity have previously been redeemed or purchased by the Trustee or deposited by the Commission in excess of the amount of Bond Obligation of the 2022 Series B Term Bonds identified above in this Section 63.12, there shall be deemed to have been a reduction of the remaining amounts stated above in this Sec tion 63.12on a Proportionate Basis, and further except that moneys in the 2022 Series B Sinking Fund Account shall be used, to the extent necessary, to purchase or retire the Outstanding 2022 Series B Term Bonds at the maturity thereof.
The Commission hereby covenants and agrees with the Owners of the 2022 Series B Term Bonds to call and redeem 2022 Series B Term Bonds from the 2022 Series B Sinking Fund Account pursuant to this Section 63.12 on October 1 in each of the years, and in the amounts, stated above in this Section 63.12.
Section 63.13. Purchase In Lieu of Mandatory Sinking Fund Redemption. In lieu of mandatory sinking fund redemption of the 2022AB Bonds as described in Sections [___] and [___] above, the Commission may satisfy, in whole or in part, the related minimum Sinking Fund Account payment amounts and redemption of 2022AB Bonds that are term bonds of the respective Series by depositing with the Trustee 2022AB Bonds that are term bonds of the respective Series for cancellation prior to the Trustee’s selection of the 2022AB Bonds that are term bonds of such Series for redemption, or may request the Trustee to purchase 2022AB Bonds that are term bonds of the respective Series, at public or private sale as and when and at such prices (inclu ding brokerage and other charges and including accrued interest) as the Commission may direct, not to exceed the principal amount thereof. The par amount of any of such 2022AB Bonds so deposited or purchased in any twelve-month period ending on August 15 in any year will be credited towards and will reduce the par amount of such 2022AB Bonds required to be redeemed as described above on the next succeeding October 1.
Section 63.14. Tax Covenants . The Commission covenants that it will not take any action, or fail to take any action, if any such action or failure to take action would adversely affect the exclusion from gross income of the interest on the 2022AB Bonds under Section 103 of the Code.
The Commission will not directly or indirectly use or permit the use of any proceeds of the 2022AB Bonds or any other funds of the Commission, or take or omit to take any action that would cause the 2022AB Bonds to be “arbitrage bonds” within the meaning of Section 148(a) of the Code. To that end, the Commission will comply with all requirements of Section 148 of the Code to the extent applicable to the 2022AB Bonds . If at any time the Commission is of the opin ion that for purposes of this Section 63.14 it is necessary to restrict or limit the yield on the investment of any moneys held by the Trustee under the Indenture or otherwise, the Commission shall so instruct the Trustee in writing, and the Trustee shall take such action as required by such instructions. Without limiting the generality of the foregoing, the Commission agrees that there shall be paid from time to time all amounts required to be rebated to the United States pursuant to Section 148(f) of the Code and any temporary, proposed or final Treasury Regulations as may be applied to the 2022AB Bonds from time to time. This covenant shall survive payment in full or defeasance of the 2022AB Bonds. The Commission specifically covenants to pay or cause to be paid to the United States, at the times and in the amounts determined, the 2022 Series A Rebate
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Requirement and the 2022 Series B Rebate Requirement. The Trustee agrees to comply with all written instructions of the Commission given in accordance with the Tax Certificate.
Notwithstanding any provision of this Section 63.14, if the Commission provides to the Trustee an opinion of nationally recognized bond counsel to the effect that any action required under this 63.14 or under the Tax Certificate is no longer required, or to the effect that some further action is required, to maintain the exclusion from gross income of the interest on the 2022AB Bonds under Section 103 of the Code, the Commission and the Trustee may rely conclusively on such opinion in complying with the provisions hereof, and the covenants hereunder shall be deemed to be modified to that extent. The Commission shall en sure that the proceeds of the 2022AB Bonds are not so used as to cause the 2022AB Bonds to satisfy the private business tests of Section 141(b) of the Code or the private loan financing test of Section 141(c) of the Code. The Commission shall not take any action or permit or suffer any action to be taken if the result of the same would be to cause any of the 2022AB Bonds to be “federally guaranteed” within the meaning of Section 149(b) of the Code;
Section 63.15. Continuing Disclosure. The Commission hereby covenants and agrees that it will comply with and carry out all of the provisions of the 2022AB Continuing Disclosure Certificate. Notwithstanding any other provision of the Indenture, failure of the Commission to comply with the 2022AB Continuing Disclosure Certificate shall not be considered an Event of Default; however, any Participating Underwriter (as such term is defined in the 2022AB Continuing Disclosure Certificate) or any Bondowner or beneficial owner may take such actions as may be necessary and appropriate, including seeking specific performance by court order, to cause the Commission to comply with its obligations under this Section 63.15, and the sole remedy in the event of any failure of the Commission to comply with the 2022AB Continuing Disclosure Certificate shall be an action to compel performance.
Section 63.16. Administration of the 2022AB Costs of Issuance Fund. (a) Before any payment is made by the Trustee to pay costs of issuance from the 2022AB Costs of Issuance Fund, the Commission shall cause to be filed with the Trustee a Written Requisition of the Commission that states the following (which shall be sufficient evidence to the Trustee of the facts stated):
(i) the item number of the payment;
(ii) the name and address of the person to whom payment is due; (iii) the amount to be paid; and
(iv) the purpose for which the obligation to be paid was incurred. (v) Each such Written Requisition shall state, and shall be sufficient evidence to the Trustee:
(A) that obligations in the stated amounts have been incurred by the Commission and that each item thereof is a proper charge; and
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(B) that there has not been filed with or served upon the Commission notice of any lien, right to lien or attachment upon, or claim affecting the right to receive payment of, any of the moneys payable to any of the persons named in such Written Requisition, which has not been released or will not be released simul taneously with the payment of such obligation.
(b) Upon receipt of each such Written Requisition, the Trustee will pay the amounts set forth in such Written Requisition as directed by the terms hereof. The Trustee need not make any such payment if it has received notice of any lien, right to lien or attachment upon, or claim affecting the right to receive payment of, any of the moneys to be so paid, which has not been released or will not be released simultaneously with such payment.
(c) Any balance of money remai ning in the 2022AB Costs of Issuance Fund after the payment of all costs incidental to or connected with the issuance of the 2022AB Bonds (as certified to the Trustee by the Commission) or on [___] 1, 2022, whichever is earlier, shall be transferred by the Trustee to the [Interest Fund], and the 2022AB Costs of Issuance Fund shall be closed.
Section 63.17. No Senior State Loans. No Senior State Loans are currently Outstanding.
Notwithstanding anything contained in the Indenture, including but not limited to Section 5.01(b)(ii) thereof, the Commission will not issue or enter into any Senior State Loans or pay any amounts with r espect to any loan agreement with the State of California (or any board, department or agency thereof) prior to the payment of amounts described in Section 5.01(b)(iii) of the Indenture.
ARTICLE LXIV
MISCELLANEOUS
Section 64.01. Terms of 2022AB Bonds Subject to the Indenture. Except as expressly provided in this Fourteenth Supplemental Indenture, every term and condition contained in the Indenture shall apply to this Fourteenth Supplemental Indenture, and to the 2022AB Bonds , with the same force and effect as if the same were her ein set forth at length, with such omissions, variations and modifications thereof as may be appropriate to make the same conform to this Fourteenth Supplemental Indenture.
This Fourteenth Supplemental Indenture and all the terms and provisions herein contained shall form part of the Indenture as fully and with the same effect as if all such terms and provisions had been set forth in the Indenture. The Indenture is hereby ratified and confirmed and shall continue in full force and effect in accordance with the terms and provisions thereof, as supplemented and amended hereby.
Section 64.02. Effective Date of Fourteenth Supplemental Indenture . This Fourteenth Supplemental Indenture shall take effect upon its execution and delivery.
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Section 64.03. Execution in Counterparts . This Fourteenth Supplemental Indenture may be executed in several counterparts, each of which shall be deemed an original and all of which shall constitute but one and the same instrument.
ARTICLE LXV
ADDITIONAL CITY REQUIREMENTS
[CONFIRM WITH CITY THAT THERE HAVE BEEN NO CHANGES]
As used in this Article LXV, “Agreement” means the Indenture.
To the extent of any inconsistency between this Article LXV and provisions in previous supplemental indentures dealing with City contracting requirements, the provisions of this Article LXV shall control.
Section 65.01. Local Business Enterprise Utilization; Liquidated Damages. (a) The LBE Ordinance. The Trustee shall comply with all the requirements of the Disadvantaged Business Enterprise Ordinance set forth in Chapter 14B of the San Francisco Adminis trative Code as it now exists or as it may be amended in the future (collectively the “LBE Ordinance”), provided such amendments do not materially increase the Trustee’s obligations or liabilities, or materially diminish the Trustee’s rights, under this Fourteenth Supplemental Indenture. Such provisions of the LBE Ordinance are incorporated by reference and made a part of this Fourteenth Supplemental Indenture as though fully set forth in this Section 65.01. The Trustee’s willful failure to comply with any applicable provision of the LBE Ordinance is a material breach of the Trustee’s obligations under this Fourteenth Supplemental Indenture and shall entitle City, subject to any applicable notice and cure provisions set forth in this Fourteenth Supplementa l Indenture, to exercise any of the remedies provided for under this Fourteenth Supplemental Indenture, under the LBE Ordinance or otherwise available at law or in equity, which remedies shall be cumulative unless this Fourteenth Supplemental Indenture expressly provides that any remedy is exclusive. In addition, The Trustee shall comply fully with all other applicable local, state and federal laws ꞏ prohibiting discrimination and requiring equal opportunity in contracting, including subcontracting. (b) Compliance and Enforcement.
(i) Enforcement. If the Trustee willfully fails to comply with any of the provisions of the LBE Ordinance, the rules and regulations implementing the LBE Ordinance, or the provisions of this Fourteenth Supplemental Indenture pertaining to LBE participation, the Trustee shall be liable for liquidated damages in an amount equal to the Trustee’s net profit on this Fourteenth Supplemental Indenture, or 10% of the total amount of this Fourteenth Supplemental Indenture, or $1,000, whichever is greatest. The Director of the Ci ty’s Human Rights Commission or any other public official authorized to enforce the LBE Ordinance (separately and collectively, the “Director of HRC”) may also impose other sanctions against the Trustee authorized in the LBE Ordinance, including declaring the Trustee to be
25 4866-1592-3470.5
irresponsible and ineligible to contract with the City for a period of up to five years or revocation of the Trustee’s DBE certification. The Director of HRC will determine the sanctions to be imposed, including the amount of liquidated damages, after investigation pursuant to Administrative Code §14B.17.
By entering into this Fourteenth Supplemental Indenture, the Trustee acknowledges and agrees that any liquidated damages assessed by the Director of the HRC shall be payable to City upon demand. ꞏThe Trustee further acknowledges and agrees that any liquidated damages assessed may be withheld from any monies due to the Trustee on any contract with City,
The Trustee agrees to maintain records necessary for monitoring its compliance with the LBE Ordinance for a period of three years following termination or expiration of this Fourteenth Supplemental Indenture, and shall make such records available for audit and inspection by the Director of HRC or the Controller upon request.
Section 65.02. Nondiscrimination; Penalties.
(a) Trustee Shall Not Discriminate . In the performance of this Fourteenth Supplemental Indenture; the Trustee agrees not to discriminate against any employee, City and County employee working with such contractor or subcontractor, applica nt for employment with such contractor or subcontractor, or against any person seeking accommodations, advantages, facilities, privileges, services, or membership in all business, social, or other establishments or organizations, on the basis of the fact or perception of a person’s race, color, creed, religion, national origin, ancestry, age, height, weight, sex, sexual orientation, gender identity, domestic partner status, marital status, disability or Acquired Immune Deficiency Syndrome or HIV status (AID S/HN status), or association with members of such protected classes, or in retaliation for opposition to discrimination against such classes.
(b) Subcontracts. The Trustee shall incorporate by reference in all subcontracts the provisions of §§12B.2(a), 12B.2( c)-(k), and 12C.3 of the San Francisco Administrative Code (copies of which are available from Purchasing) and shall require all subcontractors to comply with such provisions. The Trustee’s failure to comply with the obligations in this subsection shall c onstitute a material breach of this Fourteenth Supplemental Indenture.
(c) Nondiscrimination in Benefits. The Trustee does not as of the date of this Fourteenth Supplemental Indenture and will not during the term of this Fourteenth Supplemental Indenture , in any of its operations in San Francisco, on real property owned by San Francisco, or where work is being performed for the City elsewhere in the United States, discriminate in the provision of bereavement leave, family medical leave, health benefits, member ship or membership discounts, moving expenses, pension and retirement benefits or travel benefits, as well as any benefits other than the benefits specified above, between employees with domestic partners and employees with spouses, and/or between the domestic partners and spouses of such employees, where the domestic partnership has been registered with a governmental entity pursuant to state or local law
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authorizing such registration, subject to the conditions set forth in §12B.2(b) of the San Francisco Administrative Code.
(d) Condition to Contract. As a condition to this Fourteenth Supplemental Indenture, the Trustee shall execute the “Chapter 12B Declaration: Nondiscrimination in Contracts and Benefits” form (form HRC -12B-101) with supporting documentation and secure the approval of the form by the San Francisco Human Rights Commission. (e) Incorporation of Administrative Code Provisions by Reference . The provisions of Chapters 12B and 12C of the San Francisco Administrative Code are incorporated in this Secti on 65.02 by reference and madeꞏ a p a r t o f this Fourteenth Supplemental Indenture as though fully set forth herein. The Trustee shall comply fully with and be bound by all of the provisions that apply to this Fourteenth Supplemental Indenture under such Chapters, including but not limited to the remedies provided in such Chapters. Without limiting the foregoing, the Trustee understands that pursuant to §12B.2(h) of the San Francisco Administrative Code, a penalty of $50 for each person for each calendar day during which such person was discriminated against in violation of the provisions of this Fourteenth Supplemental Indenture may be assessed against the Trustee and/or deducted from any payments due the Trustee.
Section 65.03. MacBride Principles —Northern Ireland . Pursuant to San Francisco Administrative Code §12F.5, the City and County of San Francisco urges companies doing business in Northern Ireland to move towards resolving employment inequities, and encourages such companies to abide by the MacBride Principles. The City and County of San Francisco urges San Francisco companies to do business with corporations that abide by the MacBride Principles.
By signing below, the person executing this Fourteenth Supplemental Indenture on behalf of the Trustee acknowledges and agrees that he or she has read and understood this Section 65.03.
Section 65.04. Tropical Hardwood and Virgin Redwood Ban . Pursuant to §804(b) of the San Francisco Environment Code, the City and County of San Francisco urges contractors not to import, purchase, obtain, or use for any purpose, any tropical hardwood, tropical hardwood wood product, virgin redwood or virgin redwood wood product.
Section 65.05. Drug-Free Workplace Policy. The Trustee acknowledges that pursuant to the Federal Drug -Free Workplace Act of 1989, the unlawful manufacture, distribution, dispensation, possession, or use of a controlled substance is prohibited on City premises. The Trustee agrees that any violation of this prohibition by the Trustee, its employees, agents or assigns will be deemed a material breach of this Fourteenth Supplemental Indenture.
Section 65.06. Compliance with Americans with Disabilities Act . The Trustee acknowledges that, pursuant to the Americans with Disabilities Act (ADA), programs, services and other activities provided by a public entity to the public, whether directly or through a contractor, must be accessible to the disabled public. The Trustee shall provide the services specified in this Fourteenth Supplemental Indenture in a manner that complies with the ADA and any and all other applicable federal, state and local disability rights legislation. The Trustee agrees not to discriminate against disabled persons in the provision of services , benefits or activities provided under this Fourteenth Supplemental Indenture and further agrees that any violation of
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this prohibition on the part of the Trustee, its employees, agents or assigns will constitute a material breach of this Fourteenth Supplemental Indenture.
Section 65.07. Sunshine Ordinance. In accordance with San Francisco Administrative Code §67.24(e), contracts, contractors’ bids, responses to solicitations and all other records of communications between City and persons or firms seeking contracts, shall be open to inspection immediately after a contract has been awarded. Nothing in this provision requires the disclosure of a private person or organization’s net worth or other proprietary financial data submitted for qualification for a contract or other benefit until and unless that person or organization is awarded the contract or benefit. Information provided which is covered by this paragraph will be made available to the public upon request.
Section 65.08. Limitations on Contributions. Through its execution of this Fourteenth Supplemental Indenture, the Trustee acknowledges that it is familiar with Section 1.126 of the City’s Campaign and Governmental Conduct Code, which prohibits any person who contracts with the City for the rendition of personal services, for the furnishing of any material, supplies or equipment, for the sale or lease of any land or building, or for a grant, loan or loan guarantee, from making any campaign contribution to (a) an individual holding a City elective office if the contract must be approved by the individual, a board on which that individual serves; or a board on which an appointee of that individual serves ; (b) a candidate for the office held by such individual ; or (c) a committee controlled by such individual, at any time from the commencement of negotiations for the contract until the later of either the termination of negotiations for such contract or six months after the date the contract is approved. The Trustee acknowledges that the foregoing restriction applies only if the contract or a combination or series of contracts approved by the same individual or board in a fiscal year have a total anticipated or actual value of $50,000 or more. The Trustee further acknowledges that the prohibition on contributions applies to e ach prospective party to the contract; each member of the Trustee’s board of directors; the Trustee’s chairperson, chief executive officer, chief financial officer and chief operating officer; any person with an ownership interest of more than 20 percent in the Trustee; any subcontractor listed in the bid or contract; and any committee that is sponsored or controlled by the Trustee. Additionally, the Trustee acknowledges that the Trustee must inform each of the persons described in the preceding sentence of the prohibitions contained in Section 1.126.
Section 65.09. Requiring Minimum Compensation for Covered Employees. (a) The Trustee agrees to comply fully with and be bound by all of the provisions of the Minimum Compensation Ordinance (MCO), as set forth in San Francisco Administrative Code Chapter 12P (Chapter 12P), including the remedies provided, and implementing guidelines and rules. The provisions of Chapter l2P are incorporated herein- by reference and made a part of this Fourteenth Supplemental Indenture as though fully set forth. The text of the MCO is available on the web at http://www.sfgov.org/olse/mco. A partial listing of some of the Trustee’s obligations under the MCO is set forth in this Section 65.09. The Trustee is required to comply with all the provisions of the MCO, irrespective of the listing of obligations in this Section 65.09. (b) The MCO requires the Trustee to pay the Trustee’s employees a minimum hourly gross compensation wage rate and to provide minimum compensated and
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uncompensated time off. The minimum wage rate may change from year to year and the Trustee is obligated to keep informed of the then -current requirements. Any subcontract entered into by the Trustee shall require the subcontractor to comply with the requirements of the MCO and shall contain contractual obligations substantially the same as those set forth in this Section 65.09. It is the Trustee’s obligation to ensure that any subcontractors of any tier under this Fourteenth Supplemental Indenture comply with the requirements of the MCO. If any subcontractor under this Fourteenth Supplemental Indenture fails to comply, City may pursue any of the remedies set forth in this Section 65.09 against the Trustee.
(c) The Trustee shall not take adverse action or otherwise discriminate against an employee or other person for the exercise or attempted exercise of rights under the MCO. Such actions, if taken within 90 days of the exercise or attempted exercise of such rights, will be rebuttably presumed to be retaliation prohibited by the MCO. (d) The Trustee shall maintain employee and payroll records as required by the MCO. If the Trustee fails to do so, it shall be presumed that the Trustee paid no more than the minimum wage required under State law.
(e) The City is authorized to inspect the Trustee’s job sites and conduct interviews with employees and conduct audits of the Trustee. (f) The Trustee’s commitment to provide the Minimum Compensation is a material element of the City’s consideration for this Fourteenth Supplemental Indenture.
The City in its s ole discretion shall determine whether such a breach has occurred. The City and the public will suffer actual damage that will be impractical or extremely difficult to determine if the Trustee fails to comply with these requirements. The Trustee agrees that the sums set forth in Section 12P.6.1 of the MCO as liquidated damages are not a penalty, but are reasonable estimates of the loss that the City and the public will incur for the Trustee’s noncompliance. The procedures governing the assessment of liquidated damages shall be those set forth in Section 12P.6.2 of Chapter 12P. (g) The Trustee understands and agrees that if it fails to comply with the requirements of the MCO, the City shall have the right to pursue any rights or remedies available under Chapter 12P (including liquidated damages), under the terms of the contract, and under applicable law. If, within 30 days after receiving written notice of a breach of this Fourteenth Supplemental Indenture for violating the MCO, the Trustee fails to cure such breach or, if such breach cannot reasonably be cured within such period of 30 days, the Trustee fails to commence efforts to cure within such period, or thereafter fails diligently to pursue such cure to completion; the City shall have the right to pursue any rights or remedies available under applicable law, including those set forth in Section 12P.6(c) of Chapter 12P. Each of these remedies shall be exercisable individually or in combination with any other rights or remedies available to the City. (h) The Trustee represents and warrants that it is not an entity that was set up, or is being used, for the purpose of evading the intent of the MCO.
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(i) The City may conduct random audits of the Trustee. Random audits shall be (i) noticed in advance in writing; (ii) limited to ascertaining whether Covered Employees are paid at least the minimum compensation required by the MCO; (iii) accomplished through an examination of pertinent records at a mutually agreed upon time and location within ten days of the written notice; and (iv) limited to one audit of the Trustee every two years for the duration of this Fourteenth Supplemental Indenture . Nothing in this Fourteenth Supplemental Indenture is intended to preclude the City from investigating any report of an alleged violation of the MCO.
Section 65.10. Requiring Health Benefits for Covered Employees. Unless exempt, the Trustee agrees to comply fully with and be bound by all of the provisions of the Health Care Accountability Ordinance (HCAO), as set forth in San Francisco Administrative Code Chapter 12Q, including the remedies provided, and implementing regulations, as the same may be amended from time to time. The provisions of Chapter 12Q are incorporated herein by reference and made a part of this Fourteenth Supplemental Indenture as though fully set forth. The text of the HCAO is available on the web at http://www.sfgov.org/oca/lwlh.htm. Capitalized terms used in this Section 65.10 and not defined in this Fourteenth Supplemental Indenture shall have the meanings assigned to such terms in Chapter 12Q.
(a) For each Covered Employee, the Trustee shall provide the appropriate health benefit set forth in Section 12Q.3 of the HCAO. If the Trustee chooses to offer the health plan option, such health plan shall meet the minimum standards set forth by the San Francisco Health Commission.
(b) Notwithstanding the above, if the Trustee is a small business as defined in Section 12Q.3(d) of the HCAO, it shall have no obligation to comply with paragraph (a) above.
(c) The Trustee’s failure to comply with the HCAO shall constitute a material breach of this Fourteenth Supplemental Indenture. City shall notify the Trustee if such a breach has occurred. If, within 30 days after receiving City’s written notice of a breach of this Fourteenth Supplemental Indenture for violating the HCAO, the Trustee fails to cure such breach or, if such breach cannot reasonably be cured within such period of 30 days, the Trustee fails to commence efforts to cure within such period, or thereafter fails diligently to p ursue such cure to completion, City shall have the right to pursue the remedies set forth in 12Q.5(f)(1 -5). Each of these remedies shall be exercisable individually or in combination with any other rights or remedies available to City. (d) Any Subcontract entered into by the Trustee shall require the Subcontractor to comply with the requirements of the HCAO and shall contain contractual obligations substantially the same as those set forth in this Section 65.10. The Trustee shall notify City’s Office of Contract Administration when it enters into such a Subcontract and shall certify to the Office of Contract Administration that it has notified the Subcontractor of the obligations under the HCAO and has imposed the requirements of the HCAO on Subcontractor through the Subcontract. The Trustee shall be responsible for its Subcontractors’ compliance with this Chapter. If a Subcontractor fails to comply, the City may pursue the remedies set forth in this Section 65.10 against the Trustee based on the
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Subcontractor’s failure to comply, provided that City has first provided the Trustee with notice and an opportunity to obtain a cure of the violation. (e) The Trustee shall not discharge, reduce in compensation, or otherwise discriminate against any employee for notifying City with regard to the Trustee’s noncompliance or anticipated noncompliance with the requirements of the HCAO, for opposing any practice proscribed by the HCAO, for participating in proceedings related to the HCAO, or for seeking to assert or enforce any rights under the HCAO by any lawful means.
(f) The Trustee represents and warrants that it is not an entity that was set up, or is being used, for the purpose of evading the intent of the HCAO. (g) The Trustee shall maintain employee and payroll records in compli ance with the California Labor Code and Industrial Welfare Commission orders, including the number of hours each employee has worked on the City Contract. (h) The Trustee shall keep itself informed of the current requirements of the HCAO.
(i) The Trustee shall provide reports to the City in accordance with any reporting standards promulgated by the City’ under the HCAO, including reports on Subcontractors and Subtenants, as applicable.
(j) The Trustee shall provide City with access to records pertaining to compliance with HCAO after receiving a written request from City to do so and being provided at least ten business days to respond.
(k) The Trustee shall allow City to inspect the Trustee’s job sites and have access to the Trustee’s employees in order to monitor and deter mine compliance with HCAO.
(l) The City may conduct random audits of the Trustee to ascertain its compliance with HCAO. The Trustee agrees to cooperate with City when it conducts such audits.
(m) If the Trustee is exempt from the HCAO when this Fourteenth Supplemental Indenture is executed because its amount is less than $25,000 ($50,000 for nonprofits), but the Trustee later enters into an agreement or agreements that cause the Trustee’s aggregate amount of all agreements with City to reach $75,000, all the agreements shall be thereafter subject to the HCAO. This obligation arises on the effective date of the agreement that causes the cumulative amount of agreements between the Trustee and the City to be equal to or greater than $75,000 in the fiscal year.
Section 65.11. Prohibition on Political Activity With City Funds . In accordance with San Francisco Administrative Code Chapter 12.G, the Trustee may not participate in, support, or attempt to influence any political campaign for a candidate or for a ballot measure (collecti vely, “Political Activity”) in the performance of the services provided under this Fourteenth
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Supplemental Indenture. The Trustee agrees to comply with San Francisco Administrative Code Chapter 12.G and any implementing rules and regulations promulgated by the City’s Controller.
The terms andꞏ provisions of Chapter 12.G are incorporated herein by this reference. In the event the Trustee violates the provisions of this Section 65.11, the City may, in addition to any other rights or remedies available hereunder, (a) terminate this Fourteenth Supplemental Indenture, and (b) prohibit the Trustee from bidding on or receiving any new City contract for a period of two years. The Controller will not consider the Trustee’s use of profit as a violation of this Section 65.11.
Section 65.12. Conflict of Interest . Through its execution of this Fourteenth Supplemental Indenture , the Trustee acknowledges that it is familiar with the provisions of Section 15.103 of the City’s Charter, Article III, Chapter 2 of City’s Campaign and Governmental Conduct Code, and Section 87100 et seq. and Section 1090 et seq. of the Government Code of the State of California, and certifies that it does not know of any facts which constitute a violation of said provision and agrees that it will immediately notify the City if it becomes aware of any such fact during the term of this Fourteenth Supplemental Indenture.
Section 65.13. Earned Income Credit (EIC) Forms . Administrative Code S ection 120 requires that employers provide their employees with IRS Form W5 (The Earned Income Credit Advance Payment Certificate) and the IRS EIC Schedule, as set forth below. Employers can locate these forms at the IRS Office, on the Internet, or anywhere that Federal Tax Forms can be found.
(a) The Trustee shall provide EIC Forms to each Eligible Employee at each of the following times: (i) within 30 days following the date on which this Fourteenth Supplemental Indenture becomes effective (unless the Trustee has already provided such EIC Forms at least once during the calendar year in which such effective date falls); (ii) promptly after any Eligible Employee is hired by the Trustee; and (iii) annually between January 1 and January 31 of each calendar year during the term of this Fourteenth Supplemental Indenture.
(b) Failure to comply with any requirement contained in Section 61.13(a) hereof shall constitute a material breach by the Trustee of the terms of this Fourteenth Supplemental Indenture. If, within thirty days after the Trustee receives written notice of such a breach; the Trustee fails to cure such breach or, if such breach cannot reasonably be cured within such period of thirty days, the Trustee fails to commence efforts to cure within such period or thereafter fails to diligently pursue such cure to completion, the City may pursue any rights or remedies available under this Fourteenth Supplemental Indenture or under applicable law.
(c) Any Subcontract entered into by the Trustee shall require the subcontractor to comply, as to the subcontractor’s Eligible Employees, with each of t he terms of this Section 65.13.
(d) Capitalized terms used in this Section 65.13 and not defined in this Fourteenth Supplemental Indenture shall have the meanings assigned to such terms in Section 120 of the San Francisco Administrative Code.
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Section 65.14. Preservative-treated Wood Containing Arsenic . The Trustee may not purchase preservative treated wood products containing arsenic in the performance of this Fourteenth Supplemental Indenture unless an exemption from the requirements of Chapter 13 of the San Francisco Environment Code is obtained from the Department of the Environment under Section 1304 of the Code. The term “preservative -treated wood containing arsenic” shall mean wood treated with a preservative that contains arsenic; elemental arsenic, or an arsenic co pper combination, including, but not limited to, chromated copper arsenate preservative, ammoniacal copper zinc arsenate preservative, or ammoniacal copper arsenate preservative. The Trustee may purchase preservative-treated wood products on the list of environmentally preferable alternatives prepared and adopted by the Department of the Environment. This provision does not preclude the Trustee from purchasing preservative-treated wood containing arsenic for saltwater immersion.
The term “saltwater immersion” shall mean a pressure- treated wood that is used for construction purposes or facilities that are partially or totally immersed in saltwater.
Section 65.15. Nondisclosure of Private Information. The Trustee has read and agrees to the terms set forth in San Francisco Administrative Code Sections 12M.2, “Nondisclosure of Private Information,” and 12M.3, “Enforcement” of Administrative Code Chapter 12M, “Protection of Private Information,” which are incorporated herein as if fully set forth. The Trustee agrees that any failure of the Trustee to comply with the requirements of Section 12M.2 of this Chapter shall be a material breach of this Fourteenth Supplemental Indenture. In such an event, in addition to any other remedies available to it under equity or law, the City may terminate this Fourteenth Supplemental Indenture , bring a false claim action against the Trustee pursuant to Chapter 6 or Chapter 21 of the Administrative Code, or debar the Trustee.
Section 65.16. Proprietary or Confidential Information of City. The Trustee understands and agrees that, in the performance of the work or services under this Fourteenth Supplemental Indenture or in contemplation thereof, the Trustee may have access to private or confidential information which may be owned or controlled by City and that such information may contain proprietary or confidential details, the disclosure of which to third parties may be damaging to City. The Trustee agrees that all information disclosed by City to the Trustee shall be held in confidence and used only in performance of the Thirteenth Supplemental Indenture. The Trustee shall exercise the same standard of care to protect such information as a reasonably prudent contractor would use to protect its own proprietary data.
Section 65.17. Compliance with Laws. The Trustee shall keep itself fully informed of the City’s Charter, codes, ordinances and regulations of the City and of all state, and federal lawsꞏin any manner affecting the performance of this Fourteenth Supplemental Indenture, and must at all times comply with such local codes, ordinances, and regulations and all applicable laws as they may be amended from time to time.
Section 65.18. Works for Hire. If, in connection with services performed under this Fourteenth Supplemental Indenture, the Trustee or its subcontractors create artwork, copy, posters, billboards, photographs, videotapes, audiotapes, systems designs, software, reports, diagrams, surveys, blueprints, source codes or any other original works of authorship, such works of authorship shall be works for hire as defined under Title 17 of the United States Code, and all copyrights in such works are the property of the City. If it is ever determined that any works created by the Trustee or its subcontractors under this Fourteenth Supplemental Indenture are not
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works for hire under U.S. law, the Trustee hereby assigns all copyrights to such works to the City, and agrees to provide any material and execute any documents necessary to effectuate such assignment. With the approval of the City, the Trustee m ay retain and use copies of such works for reference and as documentation of its experience and capabilities.
Section 65.19. Resource Conservation. Chapter 5 of the San Francisco Environment Code (“Resource Conservation”) is incorporated herein by reference . Failure by the Trustee to comply with any of the applicable requirements of Chapter 5 will be deemed a material breach of contract.
Section 65.20. Public Access to Meetings and Records . If the Trustee receives a cumulative total per year of at least $250,000 in City funds or City -administered funds and is a non-profit organization as defined in Chapter 12L of the San Francisco Administrative Code; the Trustee shall comply with and be bound by all the applicable provisions of that Chapter. By executing this Fourteenth Supplemental Indenture, the Trustee agrees to open its meetings and records to the public in the manner set forth in §§12L.4 and 12L.5 of the Administrative Code.
The Trustee further agrees to make- good faith efforts to promote community membership on its Board of Directors in the manner set forth in §12L.6 of the Administrative Code. The Trustee acknowledges that its material failure to comply with any of the provisions of this paragraph shall constitute a material breach of this Fourteenth Supplemental Indentur e. The Trustee further acknowledges that such material breach of this Fourteenth Supplemental Indenture shall be grounds for the City to terminate and/or not renew the agreement, partially or in its entirety.
Section 65.21. Guaranteed Maximum Costs.
(a) The City’s obligation hereunder shall not at any time exceed the amount certified by the Controller for the purpose and period stated in such certification. (b) Except as may be provided by laws governing emergency procedures, officers and employees of the City are not authorized to request, and the City is not required to reimburse the Trustee for, commodities or services beyond the agreed upon contract scope unless the changed scope is authorized by amendment and approved as required by law.
(c) Officers and employees of the City are not authorized to offer or promise, nor is the City required to honor, any offered or promised additional funding in excess of the maximum amount of funding for which the contract is certified without certification of the additional amount by the Controller.
(d) The Controller is not authorized to make payments on any contract for which funds have not been certified as available in the budget or by supplemental appropriation.
Section 65.22. Submitting False Claims; Monetary Penalties . Pursuant to San Francisco Administrative Code §21.16, any contractor, subcontractor or consultant who submits a false claim shall be liable to the City for three times the amount of damages which the City sustains because of the false claim. A contractor, subcontractor or consultan t who submits a false claim shall also be liable to the City for the costs, including attorneys’ fees, of a civil action brought to
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recover any of those penalties or damages, and may be liable to the City for a civil penalty of up to $10,000 for each false claim. A contractor, subcontractor or consultant will be deemed to have submitted a false claim to the City if the contractor, subcontractor or consultant: (a) knowingly presents or causes to be presented to an officer or employee of the City a false claim or request for payment or approval; (b) knowingly makes, uses, or causes to be made or used a false record or statement to get a false claim paid or approved by the City; (c) conspires to defraud the City by getting a false claim allowed or paid by the City; (d) knowingly makes, uses, or causes to be made or used a false record or statement to conceal, avoid, or decrease an obligation to pay or transmit money or property to the City; or (e) is a beneficiary of an inadvertent submission of a false claim to the City; subsequently discovers the falsity of the claim, and fails to disclose the false claim to the City within a reasonable time after discovery of the false claim.
Section 65.23. Agreement Made in California; Venue. The formation, interpretation and performance of this Agreement shall be governed by the laws of the State of California. Venue for all litigation relative to the formation, interpretation and performance of this Agreement shall be in San Francisco.
Section 65.24. Ownership of Results. Any interest of the Trustee or its Subcontractors, in drawings, plans, specifications, blueprints, studies, reports, memoranda, computation sheets, computer files and media or other documents prepared by the Trustee or its subcontractors in connection with services to be performed under this Fourteenth Supplemental Indenture , shall become the property of and will be transmitted to City. However, the Trustee may retain and use copies for reference and as documentation of its experience and capabilities.
Section 65.25. Audit and Inspection of R ecords. The Trustee agrees to maintain and make available to the City, during regular business hours, accurate books and accounting records relating to its work under this Fourteenth Supplemental Indenture. The Trustee will permit City to audit, examine and make excerpts and transcripts from such books and records, and to make audits of all invoices, materials, payrolls, records or personnel and other data related to all other matters covered by this Fourteenth Supplemental Indenture, whether funded in whole or in part under this Fourteenth Supplemental Indenture. The Trustee shall maintain such data and records in an accessible location and condition for a period of not less than three years after final payment under this Fourteenth Supplemental Indentur e or until after final audit has been resolved, whichever is later. The State of California or any federal agency having an interest in the subject matter of this Fourteenth Supplemental Indenture shall have the same rights conferred upon City by this Section 65.25.
Section 65.26. Subcontracting. The Trustee is prohibited from subcontracting this Fourteenth Supplemental Indenture or any part of it unless such subcontracting is first approved by City in writing. Neither party shall, on the basis of this Fourteenth Supplemental Indenture, contract on behalf of or in the name of the other party. An agreement made in violation of this provision shall confer no rights on any party and shall be null and void.
Section 65.27. Assignment. The services to be performed by Trustee are perso nal in character and neither this Fourteenth Supplemental Indenture nor any duties or obligations hereunder may be assigned or delegated by the Trustee unless first approved by the Commission
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and the City by written instrument executed and approved in the same manner as this Fourteenth Supplemental Indenture.
Section 65.28. Non-Waiver of Rights . The omission by either party at any time to enforce any default or right reserved to it, or to require performance of any of the terms, covenants, or provisions hereof by the other party at the time designated, shall not be a waiver of any such default or right to which the party is entitled, nor shall it in any way affect the right of the party to enforce such provisions thereafter.
Section 65.29. City a Third -Party Beneficiary . The C ity is hereby designated as a third-party beneficiary for the purpose of enforcing all of the obligations of the Trustee contained in this Fourteenth Supplemental Indenture and to the extent that any other rights are given to the City hereunder.
Section 65.30. Food Service Waste Reduction Requirements. Effective June 1, 2007, the Trustee agrees to comply fully with and be bound by all of the provisions of the Food Service Waste Reduction Ordinance, as set forth in San Francisco Environment Code Chapter 16, including the remedies provided, and implementing guidelines and rules. The provisions of Chapter 16 are incorporated herein by reference and made a part of this Fourteenth Supplemental Indenture as though fully set forth. This provision is a material term of this Fourteenth Supplemental Indenture. By entering into this Fourteenth Supplemental Indenture, the Trustee agrees that if it breaches this provision, City will suffer actual damages that will be impractical or extremely difficult to determine; further, the Tr ustee agrees that the sum of $100 liquidated damages for the first breach, $200 liquidated damages for the second breach in the same year, and $500 liquidated damages for subsequent breaches in the same year is a reasonable estimate of the damage that the City will incur based on the violation, established in light of the circumstances existing at the time this Fourteenth Supplemental Indenture was made. Such amount shall not be considered a penalty, but rather agreed monetary damages sustained by the City because of the Trustee’s failure to comply with this provision.
Section 65.31. Graffiti Removal. Graffiti is detrimental to the health, safety and welfare of the community in that it promotes a perception in the community that the laws protecting public and private property can be disregarded with impunity. This perception fosters a sense of disrespect of the law that results in an increase in crime; degrades the community and leads to urban blight; is detrimental to property values, business opportunities and the enjoyment of life; is inconsistent with the City’s property maintenance goals and aesthetic standards; and results in additional graffiti and in other properties becoming the target of graffiti unless it is quickly removed from public and private property. Graffiti results in visual pollution and is a public nuisance. Graffiti must be abated as quickly as possible to avoid detrimental impacts on the City and County and its residents, and to prevent the further spread of graffiti. The Trustee shall remove all graffiti from any real property owned or leased by the Trustee in the City and County of San Francisco within 48 hours of the earlier of the Trustee’s (a) discovery or notification of the graffiti or (b) receipt of notification of the graffiti from the Department of Public Works. This Section 65.31 is not intended to require the Trustee to breach any lease or other agreement that it may have concerning its use of the real property. The term “graffiti” means any inscription, word, figure, marking or design that is affixed, marked, etched, scratched, drawn or painted on any building, structure, fixture or other improvement, whether permanent or temporary, including by
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way of example only and without limitation, signs, banners, billboards and fencing surrounding construction sites, whether public or private, without the consent of the owner of the property or the owner’s authorized agent, and which is visible from the public right -of-way. “Graffiti” shall not include: ( i) any sign or banner that is authorized by, and in compliance with, the applicable requirements of the San Francisco Public Works Code, the San Francisco Planning Code or the San Francisco Building Code; or ( ii) any mural or other painting or marking on the property that is protected as a work of fine art under the California Art Preservation Act (California Civil Code sections 987 et seq.) or as a work of visual art under the Federal Visual Artists Rights Act of 1990 (17 U.S.C. §§ 101 et seq.). Any failure of the Trustee to comply with this Section 65.31 of this Fourteenth Supplemental Indenture shall constitute a material breach of this Fourteenth Supplemental Indenture.
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IN WITNESS WHEREOF, the parties hereto have executed this Fourteenth Supplemental Indenture by their officers thereunto duly authorized as of the date and year first written above.
PUBLIC UTILITIES COMMISSION OF THE
CITY AND COUNTY OF SAN FRANCISCO
By
__________, General Manager of the
Commission
ATTEST:
Secretary of the Public Utilities
Commission of the City and County
of San Francisco
Approved as to form:
David Chiu, City Attorney, City Attorney
By
__________, Deputy City Attorney
U.S. BANK TRUST COMPANY, NATIONAL
ASSOCIATION,
as trustee
By
__________, Vice President
4866-1592-3470.5
EXHIBIT H
FORM OF 2022AB BOND
STATE OF CALIFORNIA
CITY AND COUNTY OF SAN FRANCISCO
PUBLIC UTILITIES COMMISSION OF THE
CITY AND COUNTY OF SAN FRANCISCO
WASTEWATER REVENUE BOND
2022 SERIES [A][B] (REFUNDING) [(SSIP) (GREEN BONDS)][(NON-SSIP)] No. R-_____ $__________
Interest Rate Maturity Date Original Issue Date CUSIP
_____% October 1, ____ [___] 1, 2022 7976H__
REGISTERED OWNER: **CEDE & CO.**
PRINCIPAL AMOUNT: DOLLARS
The PUBLIC UTILITIES COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO, a commission duly organized and existing under and pursuant to the Charter of the City and County of San Francisco and the laws of the State of California (herein called the “Commission”), for value received, hereby promises to pay (but only out of the revenues hereinafter referred to) to the registered owner set forth above, or registered assigns, on the maturity date set forth above (subject to any right of prior redemption hereinafter provided for), the principal sum set forth above by check of the Trustee (as defined below) in lawful money of the United States of America, and to pay (but only out of the revenues hereinafter referred to) interest thereon in like lawful money from the interest payment date next preceding the date of authentication of this Bond (unless this Bond is authenticated as of a day during the period from the 16th day of the calendar month next preceding any interest payment date to and including such interest payment date, in which event it shall bear interest from such interest payment date, or unless this Bond is authenticated on or before [September/ March] 15, 20[__], in which event it shall bear interest from the Dated Date; provided, however, that if, at the time of authentication of any Bond, interest is in default on Outstanding Bonds, such Bond shall bear interest from the interest payment date to which interest has previously been paid or made available for payment on the Outstanding Bonds and shall be payable to the Owners thereof of record as of a special date as shall be established by the Trustee following such default) until payment of such principal sum, at the interest rate per annum stated above, payable on April 1 and October 1 in each y ear, commencing [October/April] 1, 20[__].
The principal (or redemption price) hereof is payable to the registered owner hereof upon the surrender hereof at the corporate trust office of U.S. Bank Trust Company, National Association (as successor in interest to U.S. Bank, National Association), in San Francisco,
H-2
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California, as trustee (herein, together with any successor as trustee under the Indenture, called the “Trustee”), or such other office designated by the Trustee. The interest hereon is payable to the person whose name appears on the bond registration books of the Trustee as the registered owner hereof as of the close of business on the 15th day of the calendar month immediately preceding an interest payment date, whether or not such day is a business day, such interest to be paid, except as otherwise provided in the Indenture, by check mailed to such registered owner at such address as appears on such registration books. Interest on this Bond shall be calculated on the basis of a 360-day year comprised of twelve 30-day months.
This Bond is one of a duly authorized issue of revenue bonds of the Commission designated as the “Wastewater Revenue Bonds” (herein called the “Bonds”), of the series and designation indicated on the face hereof (herein called the “2022 Series [A][B] Bonds”) and is a Current Interest Bond (as such term is defined in the Indenture hereinafter referred to). The Bonds are not limited in aggregate principal amount and consist or may consist of one or more series of varying denominations, dates, maturities, interest rates and other provisions, as in said Indenture provided, all issued and to be issued under and pursuant to the provisions of the Charter of the City and County of San Francisco and all laws of the State of California supplemental thereto, including the Revenue Bond Law of 1941 to the extent made applicable by said Charter (herein collectively called the “Law”), and pursuant to an Indenture, dated as of January 1, 2003, between the Commission and the Trustee, as amended and supplemented, and as heretofore supplemented by that certain Fourteenth Supplemental Indenture dated as of [___] 1, 2022, between the Commission and the Trustee (collectively, with any supplements or amendments thereto, the “Indenture”).
Reference is hereby made to the Indenture (a copy of which is on file at the office of the Trustee) and to the Law for a description of the terms on which the Bonds are issued, the provisions with regard to the nature and extent of the Revenues (as such term is defined in the Indenture) and the rights thereunder (and limitations thereon) of the registered owners of the Bonds and the rights, duties and immunities of the Trustee and the rights and obligations of the Commission thereunder; and all the terms of the Indenture and the Law are hereby incorporated herein and constitute a contract between the Commission and the registered owner of this Bond, and to all the provisions thereof the owner of this Bond, by his acceptance hereof, consents and agrees. Each owner hereof shall have recourse to all of the provisions of the Law and the Indenture and shall be bound by all of the terms and conditions thereof.
The Bonds are being issued to certain outstanding Wastewater Revenue Bonds , as more particularly described in the Indenture. The Bonds are special obligations of the Commission and are payable, as to the principal thereof, interest thereon and any premiums upon the redemption of any thereof, from the revenues of the Enterprise (which, as more particularly defined in the Indenture, are therein and herein called the “Revenues”). All of the Bonds are equally secured by a pledge of, and charge and lien upon, all of the Net Revenues. Additional series of Bonds payable from the Revenues may be issued on a parity with the Bonds of this Series, but only subject to the conditions and limitations contained in the Indenture.
The principal of and interest on this 2022 Series [A][B] Bond are payable solely from the Revenues, and the Commission is not obligated to pay them except from the Revenues. The Commission has no taxing power. The general fund of the City and County of San Francisco is not liable, and the credit or taxing power of the City and County of San Francisco is not pledged,
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for the payment of the Bonds or their interest. The Bonds are not secured by a legal or equitable pledge of, or charge, lien or encumbrance upon, any of the property of the Commission or any of its income or receipts, except the Net Revenues. The owner h ereof has no right to compel the exercise of any taxing power of the City and County of San Francisco.
The rights and obligations of the Commission and the owners of the Bonds may be modified or amended at any time in the manner, to the extent and upon the terms provided in the Indenture.
The 2022 Series [A][B] Bonds shall be subject to redemption, as set forth in the Fourteenth Supplemental Indenture.
The 2022 Series [A][B] Bonds are issuable as fully registered Bonds without coupons in the denomination of $5,000 or any integral multiple thereof provided that no 2022 Series [A][B] Bond shall have principal maturing on more than one principal payment date. Subject to the limitations and conditions and upon payment of the charges, if any, as provided in the Indenture, 2022 Series [A][B] Bonds may be exchanged for a like aggregate principal amount of 2022 Series [A][B] Bonds of the same series, tenor and maturity of other authorized denominations.
This 2022 Series [A][B] Bond is transferable by the registered owner hereof, in person or by his attorney duly authorized in writing, at said office of the Trustee, but only i n the manner, subject to the limitations and upon payment of the charges provided in the Indenture, and upon surrender and cancellation of this 2022 Series [A][B] Bond. Upon such transfer a new fully registered 2022 Series [A][B] Bond or 2022 Series [A][B] Bonds, of authorized denomination or denominations and of the same series and tenor, for the same aggregate principal amount will be issued to the transferee in exchange herefor.
The Commission and the Trustee may treat the registered owner hereof as the absolute owner hereof for all purposes, and the Commission and the Trustee shall not be affected by any notice to the contrary.
It is hereby certified that all of the conditions, things and acts required to exist, to have happened or to have been performe d precedent to and in the issuance of this 2022 Series [A][B] Bond do exist, have happened or have been performed in due and regular time, form and manner as required by the Law and the laws of the State of California, and that the amount of this 2022 Series [A][B] Bond, together with all other obligations of the Commission, does not exceed any limit prescribed by the Law or any laws of the State of California, and is not in excess of the amount of Bonds permitted to be issued under the Indenture.
This 2022 Series [A][B] Bond shall not be entitled to any benefit under the Indenture, or become valid or obligatory for any purpose, until the certificate of authentication and registration hereon endorsed have been signed by the Trustee.
DTC LEGEND
Unless this bond is presented by an authorized representative of The Depository Trust Company, a New York corporation (“DTC”), to the Commission or its agent for registration of transfer, exchange, or payment, and any certificate issued is registered in the name of Cede & Co.
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or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of
DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein.
IN WITNESS WHEREOF, the Public Utilities Commission of the City and County of San Francisco has caused this Bond to be executed on its behalf, signed by the manual or facsimile signatures of its General Manager and of the Controller of the City and County of San Francisco and countersigned by the manual or facsimile signature of its Secretary, all as of [______], 2022.
PUBLIC UTILITIES C OMMISSION OF THE
CITY AND COUNTY OF SAN FRANCISCO
By
General Manager of the Commission
By
Controller of the City and County
of San Francisco
Countersigned:
By
Secretary of the Commission
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4866-1592-3470.5
TRUSTEE’S CERTIFICATE OF AUTHENTICATION
AND REGISTRATION TO APPEAR ON THE 2022 SERIES [A][B] BONDS This Bond is one of the Bonds described in the within- mentioned Indenture, which has been authenticated and registered on the date set forth below.
Dated: [___] 1, 2022
U.S. BANK TRUST COMPANY, NATIONAL
ASSOCIATION,
as Trustee
By
__________, Authorized Officer
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4866-1592-3470.5
FORM OF ASSIGNMENT
For value received the undersigned do(es) hereby sell, assign and transfer unto ____________________ the within- mentioned Registered Bond and hereby irrevocably constitute(s) and appoint(s) ____________________ attorney, to transfer the same on the books of the Trustee with full power of substitution in the premises.
Dated: __________, _____
By
Signature Guaranteed:
NOTICE: Signature must be guaranteed by a
member firm of the New York Stock Exchange or a
commercial bank or trust company.
4877-2820-1485.5
FIFTEENTH SUPPLEMENTAL INDENTURE
by and between
PUBLIC UTILITIES COMMISSION OF THE
CITY AND COUNTY OF SAN FRANCISCO
and
U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION,
as Trustee
relating to
$[PAR C]
Aggregate Principal Amount of
Public Utilities Commission the
City And County of San Francisco
Wastewater Revenue Bonds,
2022 Series C (Refunding - Federally Taxable)
(SSIP) (Green Bonds)
$[PAR D]
Aggregate Principal Amount of
Public Utilities Commission of the
City And County of San Francisco
Wastewater Revenue Bonds,
2022 Series D (Refunding - Federally Taxable)
(Non-SSIP)
Dated as of [ _____] 1, 2022
Table of Contents
Page
ARTICLE LXVI
DEFINITIONS ............................................................................................................................... 8
ARTICLE LXVII
PROVISIONS RELATING TO BONDS
Section 67.01. Authorization and Terms of Bonds ................................................................ 11 Section 67.02. Forms of Bonds .............................................................................................. 13 Section 67.03. Use of Depository .......................................................................................... 13 Section 67.04. Issuance of 2022CD Bonds ............................................................................ 15 Section 67.05. Application of Proceeds of 2022 Series C Bonds .......................................... 15 Section 67.06. Application of Proceeds of 2022 Series D Bonds .......................................... 15 Section 67.07. Reserved ......................................................................................................... 16 Section 67.08. Reserved ......................................................................................................... 16 Section 67.09. Terms of Redemption—2022 Series C Bonds ............................................... 16 Section 67.10. 2022 Series C Sinking Fund Account ............................................................ 17 Section 67.11. Terms of Redemption—2022 Series D Bonds............................................... 18 Section 67.12. 2022 Series D Sinking Fund Account ............................................................ 19 Section 67.13. Purchase In Lieu of Mandatory Sinking Fund Redemption .......................... 21 Section 67.14. Selection of 2022CD Bonds for Redemption ................................................ 21 Section 67.15. Reserved ......................................................................................................... 21 Section 67.16. Continuing Disclosure ................................................................................... 22 Section 67.17. Administration of the 2022CD Costs of Issuance Fund ................................ 22 Section 67.18. No Senior State Loans ................................................................................... 23
ARTICLE LXVIII
MISCELLANEOUS
Section 68.01. Terms of 2022CD Bonds Subject to the Indenture ........................................ 23 Section 68.02. Effective Date of Fifteenth Supplemental Indenture ..................................... 23 Section 68.03. Execution in Counterparts.............................................................................. 23
ARTICLE LXIX
ADDITIONAL CITY REQUIREMENTS
Section 69.01. Local Business Enterprise Utilization; Liquidated Damages ........................ 24 Section 69.02. Nondiscrimination; Penalties ......................................................................... 25 Section 69.03. MacBride Principles—Northern Ireland ........................................................ 26 Section 69.04. Tropical Hardwood and Virgin Redwood Ban .............................................. 26 Section 69.05. Drug-Free Workplace Policy ......................................................................... 26 Section 69.06. Compliance with Americans with Disabilities Act ........................................ 26 Section 69.07. Sunshine Ordinance ....................................................................................... 26 Section 69.08. Limitations on Contributions ......................................................................... 26 Section 69.09. Requiring Minimum Compensation for Covered Employees ....................... 27 Table of Contents
(continued)
Page
ii
Section 69.10. Requiring Health Benefits for Covered Employees....................................... 28 Section 69.11. Prohibition on Political Activity With City Funds ........................................ 30 Section 69.12. Conflict of Interest ......................................................................................... 30 Section 69.13. Earned Income Credit (EIC) Forms ............................................................... 31 Section 69.14. Preservative-treated Wood Containing Arsenic ............................................. 31 Section 69.15. Nondisclosure of Private Information ............................................................ 32 Section 69.16. Proprietary or Confidential Information of City ............................................ 32 Section 69.17. Compliance with Laws .................................................................................. 32 Section 69.18. Works for Hire ............................................................................................... 32 Section 69.19. Resource Conservation .................................................................................. 32 Section 69.20. Public Access to Meetings and Records ........................................................ 32 Section 69.21. Guaranteed Maximum Costs.......................................................................... 33 Section 69.22. Submitting False Claims; Monetary Penalties ............................................... 33 Section 69.23. Agreement Made in California; Venue .......................................................... 34 Section 69.24. Ownership of Results ..................................................................................... 34 Section 69.25. Audit and Inspection of Records.................................................................... 34 Section 69.26. Subcontracting ............................................................................................... 34 Section 69.27. Assignment .................................................................................................... 34 Section 69.28. Non-Waiver of Rights .................................................................................... 34 Section 69.29. City a Third-Party Beneficiary....................................................................... 34 Section 69.30. Food Service Waste Reduction Requirements ............................................... 35 Section 69.31. Graffiti Removal ............................................................................................ 35 EXHIBIT I F ORM OF 2022CD BOND
4877-2820-1485.5
FIFTEENTH SUPPLEMENTAL INDENTURE
$[PAR C]
Aggregate Principal Amount of
Public Utilities Commission of the
City and County of San Francisco
Wastewater Revenue Bonds,
2022 Series C (Refunding - Federally
Taxable)
(SSIP) (Green Bonds)
$[PAR D]
Aggregate Principal Amount of
Public Utilities Commission of the
City and County of San Francisco
Wastewater Revenue Bonds,
2022 Series D (Refunding - Federally
Taxable)
(Non-SSIP)
THIS FIFTEENTH SUPPLEMENTAL INDENTURE , dated as of [_____] 1, 2022 (this “ Fifteenth Supplemental Indenture”), is by and between PUBLIC UTILITIES COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO (the “Commission”), a commission duly constituted under the Charter (the “Charter”) of the City and County of San Francisco (the “City”), and U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION (as successor in interest to U.S. Bank, National Association), a national banking association duly organized and existing under and by virtue of the laws of the United States of America, as trustee (the “Trustee”);
W I T N E S S E T H :
WHEREAS, this Fifteenth Supplemental Indenture is supplemental to the Indenture, dated as of January 1, 2003 (the “Original Indenture”), between the Commission and the Trustee [ (also known as U.S. Bank, N.A.)], as amended by a First Amendment to Indenture dated as of May 1, 2010 (the “First Amendment”), and as supplemented by a First Supplemental Indenture, dated as of May 1, 2010 (the “First Supplemental Indenture”), as supplemented by a Second Supplemental Indenture, dated as of January 1, 2013 (the “Second Supplemental Indenture”), as supplemented by a Third Supplemental Indenture, dated as of February 1, 2013 (the “Third Supplemental Indenture”), as supplemented by a Fourth Supplemental Indenture, dated a s of May 1, 2016 (the “Fourth Supplemental Indenture”), as amended by a Fifth Supplemental Indenture, dated as of September 14, 2017 (the “Fifth Supplemental Indenture”), as amended by a Sixth Supplemental Indenture, dated July 1, 2018 (the “Sixth Supplemental Indenture”), as further supplemented by the Seventh Supplemental Indenture, dated as of August 1, 2018 (the “Seventh Supplemental Indenture”), as further supplemented by the Eighth Supplemental Indenture, dated as of August 1, 2018 (the “Eighth Supplemental Indenture”), as further supplemented by the Ninth Supplemental Indenture, dated as of July 1, 2018 (the “Ninth Supplemental Indenture”), as further supplemented by the Tenth Supplemental Indenture, dated as of June 12, 2020 (the “Tenth Supplemental Indenture”), as further supplemented by the Eleventh Supplemental Indenture, dated as of June 12, 2020 (the “Eleventh Supplemental Indenture”), as further supplemented by the Twelfth Supplemental Indenture dated November 1, 2021 (the “Twelfth Supplemental Indenture”), as further supplemented by the Thirteenth Supplemental Indenture dated November 1, 2021 (the “Thirteenth Supplemental Indenture ”), as further supplemented by the Fourteenth Supplemental Indenture dated [_________] 1, 2022 (the “Fourteenth Supplemental Indenture,” and, together with the First Amendment, First Supplemental Indenture, the Second Supplemental Indenture, the Third Supplemental Indenture, the Fourth Supplemental Indenture, the Fifth Supplemental
2 4877-2820-1485.5
Indenture, the Sixth Supplemental Indenture, the Seventh Supplemental Indenture, the Eighth Supplemental Indenture, the Ninth Supplemental Indenture, the Tenth Supplemental Indenture, the Eleventh Supplemental Indenture, the Twelfth Supplemental Indenture, the Thirteenth Supplemental Indenture and this Fifteenth Supplemental Indenture, dated [_____] 1, 2022 and the Original Indenture, the “Indenture”); and
WHEREAS, in January, 2003, the Commission issued the first series of Bonds under the Indenture designated the “Public Utilities Commission o f the City and County of San Francisco Clean Water Revenue Bonds, 2003 Refunding Series A” (the “2003 Refunding Series A Bonds”), in the original principal amount of $396,270,000, for the purpose of (a) refunding certain sewer revenue bonds previously issued by the City to finance and refinance the acquisition of improvements to the Enterprise (as defined in the Indenture), which had previously been owned and operated by the City; (b) funding a reserve account for the 2003 Refunding Series A Bonds; and (c) paying costs of issuance, all as set forth in the Indenture; and WHEREAS, pursuant to Section 8B.124 of the City Charter, the Commission has the authority to issue additional revenue bonds for the purpose of reconstructing, replacing, expanding, repairing or improving water facilities or clean water facilities, or combinations of water and clean water facilities under the jurisdiction of the Commission, subject to certain conditions, including, among others, the adoption of an ordinance by a two-thirds vote of the Board of Supervisors of the City, under such terms and conditions as the Commission may authorize; and WHEREAS, on April 27, 2010, the Board of Supervisors passed by a two -thirds vote its Ordinance No: 93-10, signed by the Mayor of the City on May 3, 2010, approving the issuance and sale of wastewater revenue bonds pursuant to Article VIIIB of the City Charter to finance various capital projects benefiting the Enterprise, as well as paying the costs of issuance and other incidental costs relating thereto, in an aggregate principal amount not to exceed $297,756,235; and WHEREAS, in May, 2010, the Commission issued the second series of Bonds under the Indenture designated the “Public Utilities Commission of the City and County of San Francisco Wastewater Revenue Bonds, 2010 Series A” (the “2010 Series A Bonds”), in the original principal amount of $47,050,000, to refund certain commercial paper notes issued by the Commission to finance a portion of the Capital Improvement Program (“CIP”), to fund a reserve account for the 2010 Series A Bonds and to pay costs of issuance, all as set forth in the Indenture; and WHEREAS, in May, 2010, the Commission issued the third series of Bonds under the Indenture designated the “Public Utilities Commission of the City and County of San Francisco Wastewater Revenue Bonds, 2010 Series B (Federally Taxable - Build America Bonds -Direct Payment)” (the “2010 Series B Bonds”), in the original principal amount of $192,515,000, to refund certain commercial paper notes, to fund a portion of the costs of the CIP and a portion of the costs of the Commission’s proposed Sewer System Improvement Program, to fund capitalized interest on the 2010 Series B Bonds, to fund a reserve account for the 2010 Series B Bonds and to pay costs of issuance, all as set forth in the Indenture; and WHEREAS, on June 12, 2012, the Board of Supervisors passed by a two -thirds vote its Ordinance No. 115-12, signed by the Mayor of the City on June 18, 2012, approving the issuance and sale of wastewater revenue bonds pursuant to Article VIIIB of the Charter to finance various
3 4877-2820-1485.5
capital projects benefiting the Enterprise, as well as paying the costs of issuance and other incidental costs relating thereto, in an aggregate principal amount not to exceed $522,810,000; and WHEREAS, on November 13, 2012, the Commission passed its Resolution No. 12-0210, and on December 11, 2012, the Board of Supervisors passed its Resolution No. 459-12; signed by the Mayor on December 18, 2012, approving, among other things, (a) the issuance of not to exceed $250,000,000 aggregate principal amount of wastewater revenue bonds to refund outstanding wastewater revenue bonds and certain loans made by the State of California Water Resources Control Board, pursuant to Section 9.109 of the Charter, as supplemented by California Government Code Sections 53580 et seq.; and (b) the issuance of not to exceed $420,000,000 aggregate principal amount of wastewater revenue bonds to finance or refinance (through the retirement of commercial paper notes) various capital projects benefiting the Enterprise (including reimbursing the Commission for certain capital costs previously paid with proceeds of wastewater commercial paper notes), pursuant to Section 8B.124; and WHEREAS, in January, 2013, the Commission issued the fourth series of Bonds under the Indenture designated the “Public Utilities Commission of the City and County of San Francisco Wastewater Revenue Bonds, 2013 Series A (Refunding)” (the “2013 Series A Bonds”), in the original principal amount of $193,400,000, to refund all of the 2003 Refunding Series A Bonds, to prepay certain loans made by the State of California Water Resources Control Board, and to pay costs of issuance, all as set forth in the Second Supplemental Indenture; and WHEREAS, in February 27, 2013, the Commission issued the fifth series of Bonds under the Indenture designated the “Public Utilities Commission of the City and County of San Francisco Wastewater Revenue Bonds, 2013 Series B” (the “2013 Series B Bonds”), in the original principal amount of $331,585,000, to finance or refinance (through the retirement of commercial paper notes) various capital projects benefiting the Enterprise (including reimbursing the Commission for certain capital costs paid with proceeds of wastewater commercial paper notes), fund capitalized interest, and to pay costs of issuance, all as set forth in the Third Supplemental Indenture; and
WHEREAS, on June 25, 2013, the Board of Supervisors passed by a two -thirds vote its Ordinance No. 123-13, which revised the fiscal year 2013 -14 capital improvement project of the Commission and reduced the revenue bond authorization under Ordinance No. 115- 12 by $27,870,059; and
WHEREAS, on July 2, 2014, the Board of Supervisors passed by a two- thirds vote Ordinance No. 107- 14, approving the issuance and sale of wastewater revenue bonds by the Commission pursuant to Article VIIIB of the Charter of the City, in an aggregate principal amount not to exceed $819,035,941, to finance capital projects benefiting the Enterprise; and WHEREAS, on June 9, 2015, the Board of Supervisors passed by a two- thirds vote Ordinance No. 0089 -15, which amended and supplemented Ordinance No. 107- 14 to provide authority for the Commission to execute and deliver one or more State of California Water Resources Control Board Installment Sale Agreements in connection with loans made by the State of California Water Resources Control Board, to finance capital projects benefiting the Enterprise; and
4 4877-2820-1485.5
WHEREAS, on June 14, 2016, the Board of Supervisors passed by two- thirds vote Ordinance No. 111- 16, approving the issuance and sale of wastewater revenue bonds and authorizing the Commission to execute and deliver one or more State of California Water Resources Control Board Installment Sale Agreements in connection with loans made by the State of California Water Resources Control Board, pursuant to Article VIIIB of the Charter of the City, in an aggregate principal amount not to exceed $1,112,601,280, to finance capital projects benefiting the Enterprise; and
WHEREAS, on June 12, 2018, the Board of Supervisors passed by two- thirds vote Ordinance No. 144-18, approving the issuance and sale of wastewater revenue bonds, commercial paper, revolving credit notes, or bond anticipation notes, authorizing the Commission to execute and deliver one or more State of California Water Resources Control Board Installment Sale Agreements in connection with State Revolving Loans, and authorizing the Commission to execute and deliver loan agreements with the United States Environmental Protection Agency under the Water Infrastructure Finance and Innovation Act, all pursuant to Article VIIIB of the Charter of the City, in an aggregate principal amount not to exceed $987,414,494, to finance capital projects benefiting the Enterprise; and
WHEREAS, on September 29, 2020, the Board of Supervisors passed by two- thirds vote Ordinance No. 173-20, approving the issuance and sale of wastewater revenue bonds, commercial paper, revolving credit notes, or bond anticipation notes, authorizing the Commission to execute and deliver one or more State of California Water Resources Control Board Installment Sale Agreements in connection with State Revolving Loans, and authorizing the Commission to execute and deliver loan agreements w ith the United States Environmental Protection Agency under the Water Infrastructure Finance and Innovation Act, all pursuant to Article VIIIB of the Charter of the City, in an aggregate principal amount not to exceed $349,919,252, to finance capital projects benefiting the Enterprise, and further authorized the approved the issuance of wastewater revenue refunding bonds, to refund any outstanding obligations of the Enterprise, subject to the limitations set forth therein; and
WHEREAS, on March 22, 2016, the Commission passed its Resolution No. 16-0057, and on April 26, 2016, the Board of Supervisors passed its Resolution No. 154-16; signed by the Mayor on May 6, 2016, approving, among other things, the issuance of not to exceed $621,000,000 aggregate princi pal amount of wastewater revenue bonds to finance or refinance (through the retirement of commercial paper notes) various capital projects benefiting the Enterprise (including reimbursing the Commission for certain capital costs previously paid with proceeds of wastewater commercial paper notes), pursuant to Section 8B.124; and WHEREAS, on May 24, 2016, the Commission issued the sixth and seventh series of Bonds under the Indenture designated the “Public Utilities Commission of the City and County of San Francisco Wastewater Revenue Bonds, 2016 Series A (Green Bonds)” (the “2016 Series A Bonds”), in the original principal amount of $240,580,000 and “Public Utilities Commission of the City and County of San Francisco Wastewater Revenue Bonds, 2016 Series B” (the “2016 Series B Bonds”), in the original principal amount of $67,820,000, in each case to finance or refinance (through the retirement of commercial paper notes) various capital projects benefiting the Enterprise (including reimbursing the Commission for certain capital costs paid with proceeds
5 4877-2820-1485.5
of wastewater commercial paper notes), fund capitalized interest, and to pay costs of issuance, all as set forth in the Fourth Supplemental Indenture; and
WHEREAS, on August 8, 2018, the Commission issued the eighth, ninth and tenth series of Bonds under the Indenture designated the “Public Utilities Commission of the City and County of San Francisco Wastewater Revenue Bonds, 2018 Series A (Green Bonds)” (the “2018 Series A Bonds”), in the original principal amount of $229,050,000, the “Public Utilities Commission of the City and County of San Francisco Wastewater Revenue Bonds, 2018 Series B” (the “2018 Series B Bonds”), in the original principal amount of $185,950,000 and the “Public Utilities Commission of the City and County of San Francisco Wastewater Revenue Bonds, 2018 Series C (Green Bonds)” (the “2018 Series C Bonds”) in the original principal amount of $179,145,000, in each case to finance or refinance (through the retirement of commercial paper notes) vari ous capital projects benefiting the Enterprise, fund capitalized interest, and to pay costs of issuance, all as set forth in the Seventh Supplemental Indenture and the Eighth Supplemental Indenture; and WHEREAS, the Commission entered into an Installment S ale Agreement executed on January 12, 2016, with the California State Water Resources Control Board in the aggregate principal amount of up to $7,435,000 (the “2016 SRF Loan”) to finance a capital project described therein benefiting the Enterprise; and
WHEREAS, the Commission entered into an Installment Sale Agreement executed by the Commission on September 14, 2017, with the California State Water Resources Control Board, in the aggregate principal amount of up to $34,445,778 (the “2017 Southeast Treatment Plant Primary/Secondary Upgrade SRF Loan”) to finance a capital project described therein benefiting the Enterprise; and
WHEREAS, the Commission entered into an Installment Sale Agreement executed by the Commission on September 14, 2017, with the California State Water Resources Control Board, as amended, in the aggregate principal amount of up to $40,006,740 (the “2017 Southeast Treatment Plant Disinfection Upgrade SRF Loan”) to finance a capital project described therein benefiting the Enterprise; and
WHEREAS, the Commission entered into an Installment Sale Agreement executed by the Commission on September 14, 2017, with the California State Water Resources Control Board in the aggregate principal amount of up to $20,199,435 (the “2017 North Point SRF Loan”) to finance a capital project described therein benefiting the Enterprise; and WHEREAS, the Commission entered into an Installment Sale Agreement executed by the Commission on May 7, 2020, with the California State Water Resources Control Board, as amended, in the aggregate principal amount of up to $54,387,969 (the “2020 Digester Gas Utilization Upgrade SRF Loan”) to finance a capital project described therein benefiting the Enterprise; and
WHEREAS, the Commission entered into an Installment Sale Agreement executed by the Commission on May 7, 2020, with the California State Water Resources Control Board, as amended, in the aggregate principal amount of up to $132,000,000 (the “2020 Water Pollution
6 4877-2820-1485.5
Control Plant Biosolids Digester Facilities SRF Loan”) to finance a capital project described therein benefiting the Enterprise; and
WHEREAS, the Commission entered into an Installment Sale Agreement executed by the Commission on May 10, 2021, with the California State Water Resources Control Board, as amended, in the aggregate principal amount of up to $112,036,181 (the “2021 SEP New Headworks (GRIT) Replacement SRF Loan” and, together with the 2016 SRF Loan, the 2017 Southeast Treatment Plant Primary/Secondary Upgrade SRF Loan, the 2017 Southeast Treatment Plant Disinfection Upgrade SRF Loan, the 2017 North Point SRF Loan the 2020 Digester Gas Utilization Upgrade and the 2020 Water Pollution Control Plant Biosolids Digester Facilities, the “SRF Loans”) to finance a capital project described therein benefiting the Enterprise; and WHEREAS, on September 14, 2017, the Commission amended the Original Indenture as supplemented to the date thereof as set forth in the Fifth Supplemental Indenture; and WHEREAS, on July 10, 2018, the Commission approved amendments to the Original Indenture as amended and supplemented to the date thereof, as set forth in the Sixth Supplemental Indenture, which amendments bec ame effective in accordance with the terms of the Original Indenture and the Sixth Supplemental Indenture; and
WHEREAS, on July 27, 2018, the Commission executed and delivered the Ninth Supplemental Indenture in connection with the execution and delivery of a WIFIA Loan Agreement (the “Original Biosolids Digester Facilities WIFIA Loan Agreement”) with the United States Environmental Protection Agency in a principal amount up to $699,242,023; and WHEREAS, on June 12, 2020, the Commission executed and delivered the Tenth Supplemental Indenture in connection with the reauthorization of the Original Biosolids Digester Facilities WIFIA Loan Agreement (the “Biosolids Digester Facilities WIFIA Loan Agreement”) with the United States Environmental Protection Agency in a principal amount up to $699,242,023; and
WHEREAS, on June 12, 2020, the Commission executed and delivered the Ele venth Supplemental Indenture in connection with the execution and delivery of a WIFIA Loan Agreement (the “Southeast Treatment Plant Improvements Project WIFIA Loan Agreement” and together with the Biosolids Digester Facilities WIFIA Loan Agreement, the “W IFIA Loan Agreements”) with the United States Environmental Protection Agency in a principal amount up to $513,861,981; and
WHEREAS, on November 30, 2021, the Commission issued two series of notes under the Indenture designated as the “Public Utilities Commission of the City and County of San Francisco Wastewater Revenue Notes 2021 Series A (Green Notes)” (the “2021 Series A Notes”), in the original principal amount of $218,355,000, and the “Public Utilities Commission of the City and County of San Francisc o Wastewater Revenue Notes 2021 Series B (Green Notes)” (the “2021 Series B Notes”), in the original principal amount of $129,110,000, in each case, to finance various capital projects benefiting the Enterprise, and to pay costs of issuance, all as set forth in the Twelfth Supplemental Indenture; and
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WHEREAS, on November 30, 2021, the Commission issued the [eleventh and twelfth] series of Bonds under the Indenture designated as the “Public Utilities Commission of the City and County of San Francisco Wastewater Revenue Bonds 2021 Series A (SSIP)(Green Bonds)” (the “2021 Series A Bonds”), in the original principal amount of $260,835,000 and the “Public Utilities Commission of the City and County of San Francisco Wastewater Revenue Bonds 2021 Series B (Non-SSIP)” (the “Series 2021 Series B Bonds”), in the original principal amount of $37,045,000, in each case to refinance (through the retirement of commercial paper notes) various capital projects benefiting the Enterprise, fund capitalized interest, and to pay costs of issuance, all as set forth in the Thirteenth Supplemental Indenture; and
WHEREAS, pursuant to Section 9.109 of the City Charter (as supplemented by California Government Code Section 53580 et seq.), the Board of Supervisors is authorized to provide for the issuance of bonds of the City for the purpose of refunding any revenue bonds of the City then outstanding without voter approval, providing that such refunding is expected to result in net debt service savings to the City on a present value basis; and WHEREAS, on [April 12 ], 2022, the Commission passed its Resolution No. 22-[___] , approving, among other things, the issuance of not to exceed $ [_______] aggregate principal amount of wastewater revenue bonds, in one or more series, to refund outstanding wastewater revenue bonds, pursuant to certain ordinances of the Board, the Indenture and Section 9.109 of the Charter (as supplemented by California Government Code Sections 53580 et seq.); and WHERES, on [________], 2022, the Commission issued the [thirteenth and fourteenth] series of Bonds under the Indenture designated as the “Public Utilities Commission of the City and County of San Francisco Wastewater Revenue Bonds 2022 Series A (Refunding) (SSIP) (Green Bonds)” in the original principal amount of $[PAR A] (the “2022 Series A Bonds”) and Public Utilities Commission of the City and County of San Francisco Wastewater Revenue Bonds 2022 Series B (Refunding) (Non-SSIP)” in the original principal amount of $[PAR B] (the “2022 Series B Bonds”), to refund [all/portion] of the outstanding 2013 Series A Bonds and 2013 Series B Bonds, and to pay costs of issuance, all as set forth in the Fourteenth Supplemental Indenture; and WHEREAS, the Commission has determined to issue additional series of Bonds under this Fifteenth Supplemental Indenture designated as the “Public Utilities Commission of the City and County of San Francisco Wastewater Revenue Bonds, 2022 Series C (Refunding - Federally Taxable) (SSIP) (Green Bonds)” in the original principal amount of $ [PAR C] (the “2022 Series C Bonds”) and “Wastewater Revenue Bonds, 2022 Series D (Refunding - Federally Taxable) (Non-SSIP)” in the original principal amount of $[PAR D] (the “2022 Series D Bonds” , and together with the 2022 Series C Bonds, the “2022CD Bonds”), to, among other things, refund all or a portion of the outstanding 2016 Series A Bonds and 2016 Series B Bonds, pursuant to Section 9.109 of the Charter (as supplemented by California Government Code Sections 53580 et seq.), and Ordinance No. 173-20, and an Escrow Agreement, dated as of [_________], 2022 (the “Escrow Agreement”), by and between the Commission and U.S. Bank Trust Company, National Association (as successor in interest to U.S. Bank, National Association), as escrow agent; and WHEREAS, the 2022CD Bonds will be issued by the Commission under the Indenture each as a separate Series of Bonds payable on a parity with the 2010 Series B Bonds, [ the 2013 Series A Bonds, the 2013 Series B Bonds, the 2016 Series A Bonds, the 2016 Series B Bonds,] the
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2018 Series A Bonds, the 2018 Series B Bonds, the 2018 Series C Bonds, the 2021 Series A Notes, the 2021 Series B Notes, the 2021 Series A Bonds, the 2021 Series B Bonds, the 2022 Series A Bonds, the 2022 Series B Bonds, the SRF Loans and the WIFIA Loan Agreements; and WHEREAS, the conditions and limitations contained in the Law and the Indenture will be satisfied at the time of issuance of the 2022CD Bonds; and WHEREAS, all acts, conditions and things required by law to exist, to have happened and to have been performed precedent to and in connection with the execution and the entering into of this Fifteenth Supplemental Indenture do exist, have happened and have been performed in regular and due time, form and manner as required by law, and the parties hereto are now duly authorized to execute and enter into this Fifteenth Supplemental Indenture; NOW, THEREFORE, the parties hereto agree, as follows:
ARTICLE LXVI
DEFINITIONS
The terms defined in this section shall, for all purposes of this Fifteenth Supplemental Indenture, have the meanings herein specified, to be equally applicable to both the singular and plural forms of any of the terms herein defined. Terms defined in the Indenture not otherwise defined herein shall have the meanings specified therein. [“Blended Treasury Yield” means, with respect to the applicable series of 2022CD Bonds of a particular maturity, the yield computed by the Commission or the Calculation Agent as the linear interpolation of two Market Treasury Yields such that the theoretical maturity that corresponds to the interpolated Market Treasury Yield equals the date that corresponds to the remaining average life of the applicable series of 2022CD Bonds maturity to be redeemed from the redemption date. The first Market Treasury Yield shall be based on an actively traded U.S. Treasury security or U.S. Treasury index whose maturity is closest to but no later than the date corresponding to the remaining average life of the applicable series of 2022CD Bonds maturity to be redeemed; the second Market Treasury Yield shall be based on an actively traded U.S. Treasury security or U.S. Treasury index whose maturity is closest to but no earlier than the date co rresponding to the remaining average life of the applicable series of 2022CD Bonds maturity to be redeemed.]
[“Calculation Agent ” means a municipal advisor or other agent selected by the Commission to perform the calculations required in connection with t he make -whole optional redemption of any sub-series of the 2022CD Bonds.]
“Closing Date” means [__________], 2022, the date of the original issuance and delivery of the 2022CD Bonds.
[“Discounted Value” means, with respect to each outstanding maturity and sub- series of the 2022CD Bonds to be redeemed, the sum as determined by the Commission or the Calculation Agent of the amounts obtained by discounting all remaining scheduled payments of principal and interest (exclusive of interest accrued to the date of redemption) on such maturity from their
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respective scheduled payment dates to the appl icable redemption date, at a yield (computed on a semi-annual basis, assuming a 360- day year consisting of twelve 30 -day months) equal to the applicable Discount Yield.
With respect to the 2022 Series C Bonds, “Discount Yield” means, the Blended Treasury Yield determined by the Commission or the Calculation Agent with respect to the 2022 Series C Bonds maturity to be redeemed, (i) plus [_____ (__)[ basis points with respect to the 2022 Series C Bonds maturing on October 1, [____[, and (ii) plus [_______ (__)[ basis points with respect to the 2022 Series C Bonds maturing on October 1, [____[. The Discount Yield will be calculated assuming semi -annual compounding based upon a 360- day year consisting of twelve 30-day months.
With respect to the 2022 Series D Bonds, “Discount Yield” means, the Blended Treasury Yield, as determined by the Commission or the Calculation Agent with respect to the 2022 Series D Bonds maturity to be redeemed, (i) plus [_____ (__)] basis points with respect to the 2022 Series D Bonds maturing in the years [___ and _____], (ii) plus [_____ (___)] basis points with respect to the 2022 Series D Bonds maturing in the years [_____ through _____], (iii) plus [___ (_____)] basis points with respect to the 2022 Series D Bonds maturing in the years [_____ through _____], (iv) plus [__ (_____)] basis points with respect to the 2022 Series D Bonds maturing in the years [_____ and _____], (v) plus [_____ (_____)] basis points with respect to the 2022 Series D Bonds maturing in the years [_____ through _____] and in [_____], and (vi) plus [_____ (_____)] basis points with respect to the 2022 Series D Bonds maturing in the year 2035. The Discount Yield will be calculated assuming semi-annual compounding based upon a 360-day year consisting of twelve 30-day months.]
“Escrow Agreement” means the Escrow Agreement, dated as of its date, by and between the Commission and U.S. Bank Trust Company, National Association, as trustee and escrow agent for the Refunded 2016A Bonds and the Refunded 2016B Bonds. [“Market Treasury Yield” means that yield, as determined by the SFPUC or the Calculation Agent, assuming semi -annual compounding based upon a 360- day year consisting of twelve 30-day months, which is equal to:
(i) the yield for the applicable maturity of an actively traded U.S. Treasury security, reported, as of 11:00 a.m., New York City time, on the Valuation Date on the display designated as “Page PXl” of the Bloomberg Financial Markets Services Screen (or, if not available, any other nationally recognized trading screen reporting on-line intraday trading in U.S. Treasury securities); or
(ii) if the yield described in (i) above is not reported as of such time or the yield reported as of such time is not ascertainable, the most recent yield data for the applicable U.S. Treasury maturity index from the federal Reserve Statistical Release H.15 Daily Update (or any comparable or successor publication) reported, as of 11:00 a.m., New York City time, on the Valuation Date; or
(iii) if the yields described in (i) and (ii) above are not reported as of such time or the yields reported as of such time are not ascertainable, the yield for the applicable maturity of any
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actively traded U.S. Treasury security shall be based upon the average of yield quotations for such security (after excluding the highest and lowest quotations) as of 3:30 p.m., New York City time, on the Valuation Date received from no less than five primary dealers in U.S. Government securities selected by the SFPUC.
Each yield quotation for each actively traded U.S. Treasury security required in (i) and (iii) of the definition of Market Treasury Yield above shall be determined using the average of the bid and ask prices for that security.]
“Refunded 2016A Bonds” means the 2016 Series A Bonds refunded and d efeased with a portion of the proceeds of the 2022 Series C Bonds, as set forth in the Escrow Agreement. “Refunded 2016B Bonds ” means the 2016 Series B Bonds refunded and defeased with a portion of the proceeds of the 2022 Series D Bonds, as set forth in the Escrow Agreement. “Refunded 2016A Bonds Escrow Fund” means the fund by that name established and maintained pursuant to the Escrow Agreement.
“Refunded 2016B Bonds Escrow Fund” means t he fund by that name established and maintained pursuant to the Escrow Agreement.
[“Valuation Date” means no less than the third Business Day nor more than the twentieth (20th) Business Day preceding the redemption date.]
“2022CD Bonds” means the 2022 Series C Bonds and the 2022 Series D Bonds. “2022CD Continuing Disclosure Certificate” means the Continuing Disclosure Certificate, dated the date of initial issuance of the 2022CD Bonds, executed and delivered by the Commission, as it may be supplemented and amended in accordance with its terms. “2022CD Costs of Issuance Fund” means the fund by that name established pursuant to Section 67.05.
“2022 Series C Bonds ” means the 2022 Series C Bonds authorized pursuant to Section 67.01(a).
[“2022 Series C Sinking Fund Account” means the account by that name established within the Principal Fund pursuant to Section 67.10.]
“2022 Series D Bonds ” means the 2022 Series D Bonds authorized pursuant to Section 67.01(b).
[“2022 Series D Sinking Fund Account” means the account by that name established within the Principal Fund pursuant to Section 67.12.]
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ARTICLE LXVII
PROVISIONS RELATING TO BONDS
Section 67.01. Authorization and Terms of Bonds.
(a) A Series of Bonds are hereby created and such Bonds are designated as the “Wastewater Revenue Bonds, 2022 Series C (Refunding - Federally Taxable) (SSIP) (Green Bonds),” which shall be a Series of Clean Water Revenue Bonds issued under the Indenture. The aggregate principal amount of 2022 Series C Bonds that may be issued and Outstanding under this Fifteenth Supplemental Indenture shall not exceed $[PAR C] , except as may be otherwise provided in Section 2.08. The 2022CD Bonds shall be of the tenor known as Current Interest Bonds.
(b) A Series of Bonds are hereby created and such Bonds are designated as the “Wastewater Revenue Bonds, 2022 Series D (Refunding - Federally Tax able) (Non-SSIP),” which shall be a Series of Clean Water Revenue Bonds issued under the Indenture. The aggregate principal amount of 2022 Series D Bonds that may be issued and Outstanding under this Fifteenth Supplemental Indenture shall not exceed $[PAR D], except as may be otherwise provided in Section 2.08. The 2022CD Bonds shall be of the tenor known as Current Interest Bonds.
(c) The 2022CD Bonds shall be initially registered in the name of “Cede & Co.,” as nominee of The Depository Trust Company, New York, New York, and shall be evidenced by one 2022 Series C Bond and one 2022 Series D Bond maturing on each respective maturity date in a denomination corresponding to the total principal designated to mature on such date. Registered ownership of the 2022CD Bonds, or any portion thereof, may not thereafter be transferred except as set forth in Section 67.03 herein. (d) The 2022CD Bonds shall be issued as fully registered Bonds without coupons in the denominations of $5,000 or any integral multiple thereof; provided that no 2022CD Bond shall have principal maturing on more than one principal maturity date. The 2022CD Bonds shall be dated as of the Closing Date, the date of delivery thereof, and shall accrue interest from such date.
(e) The 2022 Series C Bonds shall mature on October 1 in the following years and in the following amounts and shall bear interest at the following rates per annum payable on April 1 and October 1 in each year, commencing [October/ April 1, 20__] , calculated on the basis of a 360-day year consisting of twelve 30-day months:
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Maturity
(October 1)
Principal
Amount
Interest
Rate
(f) The 2022 Series D Bonds shall mature on October 1 in the following years and in the following amounts and shall bear interest at the following rates per annum payable on April 1 and October 1 in each year, commencing [October/April 1, 20__] , calculated on the basis of a 360-day year consisting of twelve 30-day months:
Maturity
(October 1)
Principal
Amount
Interest
Rate
(g) The principal of and premium, if any, on the 2022CD Bonds shall be payable by check or wire in lawful money of the United States of America to the Owner thereof, upon the surrender thereof at the corporate trust office of U.S. Bank Trust Company, National Association, in San Francisco, California, or such other office designated by the Trustee.
The interest on the 2022CD Bonds shall be payable in like lawful money to the person whose name appears on the bond registration books of the Trustee as the Owner thereof as of the close of business on the 15th day of the calendar month immedi ately preceding an interest payment date, whether or not such day is a Business Day, such interest to be paid by check mailed to such Owner at such address as appears on such registration books or at such address as such Owner may have filed with the Trustee for that purpose, or at the request of an Owner of at least $1,000,000 in aggregate principal amount of Bonds filed with the Trustee by such 15th day, by wire transfer to such account designated in such request at a financial institution in the United States.
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(h) Each Bond shall bear interest from the interest payment date next preceding the date of authentication thereof unless it is authenticated as of a day during the period from the 16th day of the calendar month next preceding any interest payment date to the interest payment date, inclusive, in which event it shall bear interest from such interest payment date, or unless it is authenticated on or before [September/March ] 15, 20[__], in which event it shall bear interest from the Closing Date; provided, however, that if, at the time of authentication of any Bond, interest is in default on Outstanding Bonds, such Bond shall bear interest from the interest payment date to which interest has previously been paid or made available for payment on the Outstanding Bonds and shall be payable to the Owners thereof of record as of a special date as shall be established by the Trustee following such default.
(i) The Trustee shall assign each Bond authenticated and registered by it a distinctive letter, or number, or letter and number, and shall maintain a record thereof which shall be available to the Commission for inspection.
(j) On January 30, 2013, certain amendments set forth in the First Amendment that govern the sizing of the Required Reserve for each Series of Bonds became effective in accordance with the terms of the Indenture. In accordance therewith, the Commission has determined not to fund the Required Reserve for the 2022CD Bonds. (k) The Commission has reviewed all proceedings heretofore taken relative to the authorization of the 2022CD Bonds and has found, as a result of such review, that all conditions, things and acts required by law to exist, happen or be performed precedent to and in the issuance of the 2022CD Bonds do exist, have happened and have been performed in due time, form and manner as required by law, and the Commission is authorized, pursuant to each and every requirement of law, including the Law, to issue the 2022CD Bonds in the manner and form provided in this Fifteenth Supplemental Indenture.
Section 67.02. Forms of Bonds . The 2022CD Bonds and the Trustee’s certificates of authentication and registration and the forms of assignment to appear thereon shall be in substantially the forms set forth as Exhibit I to thi s Fifteenth Supplemental Indenture, with necessary or appropriate variations, omissions and insertions as permitted or required by this Fifteenth Supplemental Indenture.
Section 67.03. Use of Depository.
(a) The 2022CD Bonds shall be initially registered as provided in Section 67.01(c) and Section 67.01(i) hereof. Registered ownership of the 2022CD Bonds, or any portions thereof, may not thereafter be transferred except:
(i) to any successor of The Depository Trust Company or its nominee, or of any substitute depository designated pursuant to clause (ii) of this clause (a) (a “Substitute Depository”); provided that any successor of The Depository Trust Company or Substitute Depository shall be qualified under any applicable laws to provide the service proposed to be provided by it;
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(ii) to any Substitute Depository not objected to by the Trustee, upon (A) the resignation of The Depository Trust Company or its successor (or any Substitute Depository or its successor) from its functions as depository, or ( B) a determination by the Commission that The Depository Trust Company (or its successor) is no longer able to carry out its functions as depository; provided that any such Substitute Depository shall be qualified under any applicable laws to provide the services proposed to be provided by it; or
(iii) to any person as provided below, upon (1) the resignation of The Depository Trust Company or its successor (or any Substitute Depository or its successor) from its functions as depository, or (2) a determination by the Commission to remove The Depository Trust Company or its successor (or Substitute Depository or its successor) from its functions as depository. (b) In the case of any transfer pursuant to clause (i) or clause (ii) of subsection (a) of this Section 67.03, upon receipt of all Outstandi ng 2022CD Bonds by the Trustee, together with a Written Request of the Commission to the Trustee designating the Substitute Depository, a single new 2022CD Bond, which the Commission shall prepare or cause to be prepared, shall be executed and delivered fo r each maturity of 2022CD Bonds then Outstanding, registered in the name of such successor or such Substitute Depository, or their nominees, as the case may be, all as specified in such Written Request of the Commission.
In the case of any transfer pursuant to Section 67.03(a)(iii), upon receipt of all Outstanding 2022CD Bonds by the Trustee, together with a Written Request of the Commission to the Trustee, new 2022CD Bonds, which the Commission shall prepare or cause to be prepared in definitive form, shall be executed and delivered in such denominations and registered in the names of such persons as are requested in such Written Request of the Commission, subject to the l imitations of Section 67.01 hereof, provided that the Trustee shall not be required to deliver such new 2022CD Bonds within a period less than 60 days after the date of receipt of such Written Request from the Commission. (c) In the case of a partial redemption or an advance refunding of any 2022CD Bonds evidencing a portion of the principal maturing in a particular year, The Depository Trust Company or its successor (or any Substitute Depository or its successor) shall make an appropriate notation on such 2022CD Bonds indicating the date and amounts of such reduction in principal, in form acceptable to the Trustee. The Trustee shall not be liable for such depository’s failure to make such notations or errors in making such notations. (d) The Commission and the Trustee shall be entitled to treat the person in whose name any 2022CD Bond is registered as the Owner thereof for all purposes of the Indenture and any applicable laws, notwithstanding any notice to the contrary received by the Trustee or the Commission; and the Commission and the Trustee shall not have responsibility for transmitting payments to, communicating with, notifying, or otherwise dealing with any beneficial owners of the 2022CD Bonds. Neither the Commission nor the Trustee shall have any responsibility or obligation, legal or otherwise, to any such beneficial owners or to any other party, including The Depository Trust Company or its
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successor (or Substitute Depository or its successor), except to the Owner of any 2022CD Bonds, and the Trustee may rely conclusively on its records as to the identity of the Owners of the 2022CD Bonds.
(e) Notwithstanding any other provision of this Fifteenth Supplemental Indenture and so long as all Outstanding 2022CD Bonds are registered in the name of Cede & Co. or its registered assigns, the Commission and the Trustee shall cooperate with Cede & Co., as sole registered Bondowner, and its registered assigns, in effecting payment of the principal of and redemption premium, if any, and interest on the 2022CD Bonds by arranging for payment in such manner that funds for such payments are properly identified and are made available on the date they are due all in accordance with the Letter of Representations delivered by the Commission and the Trustee to The Depository Trust Company with respect to the 2022CD Bonds, the provisions of which the Trustee may rely upon to implement the foregoing procedures notwithstanding any inconsistent provisions herein.
Section 67.04. Issuance of 2022CD Bonds . At any time after the execution of this Fifteenth Supplemental Indenture, the Commission may execute and the Trustee may authenticate and upon a Written Request or Certificate of the Commission, deliver 2022 Series C Bonds in the aggregate principal amount of $[PAR C] and 2022 Series D Bonds in the aggregate principal amount of $[PAR D] to the respective initial purchasers thereof specified in such Written Request or Certificate.
Section 67.05. Application of Proceeds of 2022 Series C Bonds. (a) On the Closing Date, the initial purchaser (s) of the 2022 Series C Bonds will pay and deliver the purchase price of the 2022 Series C Bonds (including the good faith deposit paid prior to the Closing Date) equal to $[______] (comprised of the principal amount of the 2022 Series C Bonds of $[PAR C].00, less an underwriter’s discount in the amount of $[_________] ) to the Trustee, who shall deposit and transfer this amount as follows:
(i) The Trustee shall deposit $[______] in a separate fund to be known as the “2022CD Costs of Issuance Fund,” which the Trustee hereby agrees to establish and maintain. The money in the 2022CD Costs of Issuance Fund shall be used and disbursed in the manner provided herein for the purpose of paying costs of issuance incidental to or connected with the issuance of the 2022 Series CD Bonds (or for making reimbursements to the Commission or any other person, firm or corporation for such costs theretofore paid by such person or it). (ii) The Trustee, as escrow agent for the Refunded 2016A Bonds, shall deposit $[______] in the Refunded 2016A Bonds Escrow Fund established under the Escrow Agreement and such funds shall be applied as set forth therein.
Section 67.06. Application of Proceeds of 2022 Series D Bonds. (a) On the Closing Date, the initial purchaser(s) of the 2022 Series D Bonds will pay and deliver the purchase pric e of the 2022 Series D Bonds (including the good
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faith deposit paid prior to the Closing Date) equal to $[________] (comprised of the principal amount of the 2022 Series D Bonds of $ [PAR D] .00, less an underwriter’s discount in the amount of $[_______] ) to the Trustee, who shall deposit and transfer this amount as follows:
(i) The Trustee shall deposit $[_______] in the 2022CD Costs of Issuance Fund (established pursuant to Section 67.05(a)(i). The money in the 2022CD Costs of Issuance Fund shall be used and disbursed in the manner provided herein for the purpose of paying costs of issuance incidental to or connected with the issuance of the 2022CD Bonds (or for making reimbursements to the Commission or any other person, firm or corporation for such costs theretofore paid by such person or it).
(ii) The Trustee, as escrow agent for the Refunded 2016B Bonds, shall deposit $[______] in the Refunded 2016B Bonds Escrow Fund established under the Escrow Agreement and such funds shall be applied as set forth therein.
Section 67.07. Reserved.
Section 67.08. Reserved.
Section 67.09. Terms of Redemption—2022 Series C Bonds. (a) (i) Optional Redemption at Par Call. On and after [______] 1, 20[__], the 2022 Series C Bonds maturing on and after [______] 1, 20[__] are subject to redemption prior to maturity, at the option of the Commission, from any moneys that may be provided for such purpose, in whole or in part, on any date, at a redemption price equal to 100% of the principal amount of the 2022 Series C Bonds to be redeemed, plus accrued interest thereon to the date fixed for redemption, without premium. (ii) Make-Whole Optional Redemption. Before October 1, 20[__], the 2022 Series C Bonds will be subject to redemption either in whole or in part, at the option of the Commission, at any time, at a redemption price equal to the greater of (i) 100% of the principal amount thereof or (ii) the Discounted Value thereof, plus in either case, accrued interest thereon to the date of redemption.
The 2022 Series C Bonds may be redeemed in any order of maturity and in any principal amount within a maturity as selected by the Commission in its sole discretion. All calculations and determinations referred to under this subsection, except as provided in the preceding sentence, are expected (but not required) to be made by the Calculation Agent.
(iii) Mandatory Sinking Fund Account Redemption. The 2022 Series C Bonds maturing on October 1, [___], and October 1, [___] (the “2022 Series C Term Bonds”), and payable from the 2022 Series C Sinking Fund Account, are further subject to redemption prior to their stated maturity, from the 2022 Series C Sinking Fund Account, on any October 1 on or after October 1, [___], and October 1, [___], respectively, on a pro- rata pass through distribution of principal basis if
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less than all of the 2022 Series C Bonds of such maturity are then being redeemed, upon payment of the principal amount thereof and accrued interest thereon to the date fixed for redemption, without premium, in accordance with the schedules shown in Section [___] herein.
(b) Application of Terms of Indenture . The provisions of the Indenture relating to redemption of Bonds set forth in 4.03 (“Notice of Redemption”), 4.04 (“Partial Redemption of Bond”), 4.05 (“Effect of Redemption”) and 4.06 (“Rescission of Notice of Redemption”) shall apply to the redemption of the 2022 Series C Bonds.
Section 67.10. 2022 Series C Sinking Fund Account . The Trustee shall establish and hold within the Principal Fund established under Section 5.02(a) of the Indenture, a 2022 Series C Sinking Fund Account, which the Commission hereby covenants and agrees to cause to be maintained, for payment of the Bond Obligation of the 2022 Series C Term Bonds.
The Trustee, on or before September 30 of each year (commencing on or before September 30, 20[__]), shall deposit in the 2022 Series C Sinking Fund Account from the Principal Fund moneys in an amount sufficient to call and redeem or to pay at maturity, as the case may be, the principal of 2022 Series C Term Bonds in the following respective principal amounts on the next succeeding October 1 in each of the following years (each such deposit of moneys being referred to as a “2022 Series C Minimum Sinking Fund Account Payment”). 2022 Series C Term Bonds maturing on October 1, 20[__]
October 1 of the Year Principal Amount
*
____________________
*Final Maturity Date
2022 Series C Term Bonds maturing on October 1, 20[__]
October 1 of the Year Principal Amount
$
*
____________________
*Final Maturity Date
During the twelve -month period immediately preceding each redemption from the 2022 Series C Sinking Fund Account, the Commission may satisfy, in whole or in part, the 2022 Series C Minimum Sinking Fund Account Payment and the redemption therefrom by deposi ting with the Trustee 2022 Series C Term Bonds for cancellation prior to the Trustee’s selection of the 2022 Series C Term Bonds for redemption.
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All moneys in the 2022 Series C Sinking Fund Account, at the Written Request of the Commission, shall be used and withdrawn by the Trustee at any time for the purchase of 2022 Series C Term Bonds (except that no 2022 Series C Term Bonds maturing in any year shall be purchased so long as any 2022 Series C Term Bonds maturing in any earlier year and being of like tenor are Outstanding) at public or private sale, as and when and at such prices (including brokerage and other charges, but excluding accrued interest, which is payable from the Interest Fund) as the Commission shall direct by Written Request, but not to exceed the principal thereof, and all 2022 Series C Term Bonds so purchased by the Trustee or deposited by the Commission, shall be cancelled and delivered to the Commission; provided, however, that:
(a) all moneys in the 2022 Series C Sinking Fund Account on each September 15, beginning on September 15, 20[__] and ending on September 15, 20[__] , together with any additional sums the Trustee expects to receive for deposit in the 2022 Series C Sinking Fund Account after such date and on or before the next succeeding October 1, shall be used and withdrawn by the Trustee solely for the purpose of redeeming the 2022 Series C Term Bonds that are subject to redemption under this Section 67.10; and (b) the Trustee shall during each twelve -month period beginning with t he twelve-month period ending on October 1, 20[__] , purchase or call and redeem (as herein provided) an aggregate amount of 2022 Series C Term Bonds equal to at least the amount of Bond Obligation of the 2022 Series C Term Bonds identified above in this Se ction 67.10 for such twelve-month period reduced by the principal amount of 2022 Series C Term Bonds deposited by the Commission with the Trustee, except that if 2022 Series C Term Bonds of any Term Bond maturity have previously been redeemed or purchased by the Trustee or deposited by the Commission in excess of the amount of Bond Obligation of the 2022 Series C Term Bonds identified above in this Section 67.10, there shall be deemed to have been a reduction of the remaining amounts stated above in this Section 67.10 on a Proportionate Basis, and further except that moneys in the 2022 Series C Sinking Fund Account shall be used, to the extent necessary, to purchase or retire the Outstanding 2022 Series C Term Bonds at the maturity thereof.
The Commission hereby covenants and agrees with the Owners of the 2022 Series C Term Bonds to call and redeem 2022 Series C Term Bonds from the 2022 Series C Sinking Fund Account pursuant to this Section 67.10 on October 1 in each of the years, and in the amounts, stated above in this Section 67.10.]
Section 67.11.Terms of Redemption—2022 Series D Bonds.
(a) (i) Optional Redemption at Par Call. On and after [______] 1, 20[__], the 2022 Series D Bonds maturing on and after [______] 1, 20[__] are subject to redemption prior to maturity, at the option of the Commission, from any moneys that may be provided for such purpose, in whole or in part, on any date, at a redemption price equal to 100% of the principal amount of the 2022 Series D Bonds to be redeemed, plus accrued interest thereon to the date fixed for redemption, without premium. (i) Make-Whole Optional Redemption. Before October 1, 20[__], the 2022 Series D Bonds will be subject to redemption either in whole or in part, at the option of the Commission, at any time, at a redemption price equal to the greater of
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(i) 100% of the principal amount thereof or (ii) the Discounted Value thereof, plus in either case, accrued interest thereon to the date of redemption.
The 2022 Series D Bonds may be redeemed in any order of maturity and in any principal amount within a maturity as selected by the Commission in its sole discretion. All calculations and determinations referred to under this subsection, except as provided in the preceding sentence, are expected (but not required) to be made by the Calculation Agent.
(ii) Mandatory Sinking Fund Account Redemption. The 2022 Series D Bonds maturing on October 1, [___], and October 1, [___] (the “2022 Series D Term Bonds”), and payable from the 2022 Series D Sinking Fund Account, are further subject to redemption prior to their stated maturity, from the 2022 Series D Sinking Fund Account, on any October 1 on or after October 1, [___], and October 1, [___], respectively, on a pro-rata pass through distribution of principal basis if less than all of the 2022 Series D Bonds of such maturity are then being redeemed, upon payment of the principal amount thereof and accrued interest thereon to the date fixed for redemption, without premium, in accordance with the schedules shown in Section [__] herein.
(b) Application of Terms of Indenture . The provisions of the Indenture relating to redemption of Bonds set forth in 4.03 (“Notice of Redemption”), 4.04 (“Partial Redemption of Bond”), 4.05 (“Effect of Redemption”) and 4.06 (“Rescission of Notice of Redemption”) shall apply to the redemption of the 2022 Series D Bonds.
Section 67.12. 2022 Series D Sinking Fund Account. The Trustee shall establish and hold within the Principal Fund established under Section 5.02(a) of the Indenture, a 2022 Series D Sinking Fund Account, which the Commission hereby covenants and agrees to cause to be maintained, for payment of the Bond Obligation of the 2022 Series D Term Bonds.
The Trustee, on or before September 30 of each year (commencing on or before September 30, 20[__]), shall deposit in the 2022 Series D Sinking Fund Account from the Principal Fund moneys in an amount sufficient to call and redeem or to pay at maturity, as the case may be, the principal of 2022 Series D Term Bonds in the following respective principal amounts on the next succeeding October 1 in each of the following years (each such deposit of moneys being referred to as a “2022 Series D Minimum Sinking Fund Account Payment”). 2022 Series D Term Bonds maturing on October 1, 20[__]
October 1 of the Year Principal Amount
*
____________________
*Final Maturity Date
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2022 Series D Term Bonds maturing on October 1, 20[__]
October 1 of the Year Principal Amount
$
*
____________________
*Final Maturity Date
During the twelve -month period immediately preceding each redemption from the 2022 Series D Sinking Fund Account, the Commission may satisfy, in whole or in part, the 2022 Series D Minimum Sinking Fund Account Payment and the redemption therefrom by depositing with the Trustee 2022 Series D Term Bonds for cancellation prior to the Trustee’s selection of the 2022 Series D Term Bonds for redemption.
All moneys in the 2022 Series D Sinking Fund Account, at the Written Request of the Commission, shall be used and withdrawn by the Trustee at any time for the purchase of 2022 Series D Term Bonds (except that no 2022 Series D Term Bonds maturing in any year shall be purchased so long as any 2022 Series D Term Bonds maturing in any earlier year and being of like tenor are Outstanding) at public or private sale, as and when and at such prices (including brokerage and other charges, but excluding accrued interest, which is payable from the Interest Fund) as the Commission shall direct by Written Request, but not to exceed the principal thereof, and all 2022 Series D Term Bonds so purchased by the Trustee or deposited by the Commission, shall be cancelled and delivered to the Commission; provided, however, that:
(a) all moneys in the 2022 Series D Sinking Fund Account on each September 15, beginning on September 15, 20[__] and ending on September 15, 20[__], together with any additional sums the Trustee expects to receive for deposit in the 2022 Series D Sinking Fund Account after such date and on or before the next succeeding October 1, shall be used and withdrawn by the Trustee solely for the purpose of redeeming the 2022 Series D Term Bonds that are subject to redemption under this Section 67.12; and (b) the Trustee shall during each twelve -month period beginning with the twelve-month period ending on October 1, 20[__], purchase or call and redeem (as herein provided) an aggregate amount of 2022 Series D Term Bonds equal to at least the amount of Bond Obligation of the 2022 Series D Term Bonds identified above in this Section 67.12 for such twelve-month period reduced by the principal amount of 2022 Series D Term Bonds deposited by the Commission with the Trustee, except that if 2022 Series D Term Bonds of any Term Bond maturity have previously been redeemed or purchased by the Trustee or deposited by the Commission in excess of the amount of Bond Obligation of the 2022 Series D Term Bonds identified above in this Section 67.12, there shall be deemed to have been a reduction of the remaining amounts stated above in this Section 67.12 on a Proportionate Basis, and further except that moneys in the 2022 Series D Sinking Fund Account shall be used, to the extent necessary, to purchase or retire the Outstanding 2022 Series D Term Bonds at the maturity thereof.
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The Commission hereby covenants and agrees with the Owners of the 2022 Series D Term Bonds to call and redeem 2022 Series D Term Bonds from the 2022 Series D Sinking Fund Account pursuant to this Section 67.12 on October 1 in each of the years, and in the amounts, stated above in this Section 67.12.
Section 67.13. Purchase In Lieu of Mandatory Sinking Fund Redemption. In lieu of mandatory sinking fund redemption of the 2022CD Bonds as described in Sections [___] and [___] above, the Commission may satisfy, in whole or in part, the related minimum Sinking Fund Account payment amounts and redemption of 2022CD Term Bonds of the respective Series by depositing with the Trustee 2022CD Bonds that are t erm bonds of the respective Series for cancellation prior to the Trustee’s selection of the 2022CD Bonds that are t erm bonds of such Series for redemption, or may request the Trustee to purchase 2022CD Bonds that are term bonds of the respective Series, at public or private sale as and when and at such prices (including brokerage and other charges and including accrued interest) as the Commission may direct, not to exceed the principal amount thereof. The par amount of any of such 2022CD Bonds so deposited or purchased in any twelve-month period ending on August 15 in any year will be credited towards and will reduce the par amount of such 2022CD Bonds required to be redeemed as described above on the next succeeding October 1.
Section 67.14. Selection of 2022CD Bonds for Redemption. Redemption of the 2022CD Bonds will only be in authorized denominations. The 2022CD Bonds are subject to redemption in such order of maturity as the Commission may direct (except mandatory sinking fund payments on the 2022CD bonds that are terms bonds). If less than all of the 2022CD Bonds of a maturity are redeemed prior to their stated maturity date, the particular 2022CD Bonds to be redeemed will be selected on a pro-rata pass-through distribution of principal basis in accordance with the rules and procedures of DTC. It is the Commission’s intent that redemption allocations made by DTC, the DTC Participants or such other intermediaries that may exist between the Commission and the beneficial owners of the 2022CD Bonds will be made on a pro- rata pass-through distribution of principal basis. However, so long as the 2022CD Bonds are held in book-entry form, the selection for redemption of such 2022CD Bonds shall be made in accordance with the operational arrangements of DTC then in effect. Neither the Commission nor the Trustee will provide any assurance or shall have any responsibility or obligation to ensure that DTC, the DTC Participants or any other intermediaries allocate redemptions of the 2022CD Bonds among beneficial owners on a pro-rata pass-through distribution of principal basis. If the DTC operational arrangements do not allow for the redemption of the 2022CD Bonds on a pro- rata pass -through distribution of principal basis, the 2022CD Bonds shall be selected for redemption, in accordance with DTC procedures, by lot.
If the 2022CD Bonds are not held in book- entry form and less than all of the 2022CD Bonds of a maturity are to be redeemed, the 2022CD Bonds to be redeemed will be selected by the Trustee on a pro-rata pass-through distribution of principal basis among all of the Bondowners of the 2022CD Bonds of that maturity based on the principal amount of 2022CD Bonds of that maturity owned by such Bondowners.
Section 67.15. Reserved.
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Section 67.16. Continuing Disclosure. The Commission hereby covenants and agrees that it will comply with and carry out all of the provisions of the 2022CD Continuing Disclosure Certificate. Notwithstanding any other provision of the Indenture, failure of the Commission to comply with the 2022CD Continuing Disclosure Certificate shall not be considered an Event of Default; however, any Participating Underwriter (as such term is defined in the 2022CD Continuing Disclosure Certificate) or any Bondowner or beneficial owner may take s uch actions as may be necessary and appropriate, including seeking specific performance by court order, to cause the Commission to comply with its obligations under this Section 67.16, and the sole remedy in the event of any failure of the Commission to comply with the 2022CD Continuing Disclosure Certificate shall be an action to compel performance.
Section 67.17. Administration of the 2022CD Costs of Issuance Fund. (a) Before any payment is made by the Trustee to pay costs of issuance from the 2022CD Costs of Issuance Fund, the Commission shall cause to be filed with the Trustee a Written Requisition of the Commission that states the following (which shall be sufficient evidence to the Trustee of the facts stated):
(i) the item number of the payment;
(ii) the name and address of the person to whom payment is due; (iii) the amount to be paid; and
(iv) the purpose for which the obligation to be paid was incurred. (v) Each such Written Requisition shall state, and shall be sufficient evidence to the Trustee:
(A) that obligations in the stated amounts have been incurred by the Commission and that each item thereof is a proper charge; and (B) that there has not been filed with or served upon the Commission notice of any lien, right to lien or attachment upon, or claim affecting the right to receive payment of, any of the moneys payable to any of the persons named in such Written Requisition, which has not been released or will not be released simultaneously with the payment of such obligation.
(b) Upon receipt of each such Written Requisition, the Trustee will pay the amounts set forth in such Written Requisition as directed by the terms hereof. The Trustee need not make any such payment if it has received notice of any lien, right to lien or attachment upon, or claim affecting the right to receive payment of, any of the moneys to be so paid, which has not been released or will not be released simultaneously with such payment.
(c) Any balance of money remaining in the 2022CD Costs of Issuance Fund after the payment of all costs incidental to or connected with the issuance of the 2022CD
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Bonds (as certified to the Trustee by the Commission) or on [___] 1, 2022, whichever is earlier, shall be transferred by the Trustee to the [Interest Fund], and the 2022CD Costs of Issuance Fund shall be closed.
Section 67.18. No Senior State Loans. No Senior State Loans are currently Outstanding.
Notwithstanding anything contained in the Indenture, including but not limited to Section 5.01(b)(ii) thereof, the Commission will not issue or enter into any Senior State Loans or pay any amounts with respect to any loan agreement with the State of California (or any board, department or agency thereof) prior to the payment of amounts described in Section 5.01(b)(iii) of the Indenture.
ARTICLE LXVIII
MISCELLANEOUS
Section 68.01. Terms of 2022CD Bonds Subject to the Indenture. Except as expressly provided in this Fifteenth Supplemental Indenture, every term and condition contained in the Indenture shall apply to this Fifteenth Supplemental Indenture, and to the 2022CD Bonds, with the same force and effect as if the same were herein set forth at length, with such omissions, variations and modifications thereof as may be appropriate to make the same conform to this Fifteenth Supplemental Indenture.
This Fifteenth Supplemental Indenture and all the terms and provisions herein contained shall form part of the Indenture as fully and with the same effect as if all such terms and provisions had been set forth in the Indenture. The Indenture is hereby ratified and conf irmed and shall continue in full force and effect in accordance with the terms and provisions thereof, as supplemented and amended hereby.
Section 68.02. Effective Date of Fifteenth Supplemental Indenture . This Fifteenth Supplemental Indenture shall take effect upon its execution and delivery.
Section 68.03. Execution in Counterparts. This Fifteenth Supplemental Indenture may be executed in several counterparts, each of which shall be deemed an original and all of which shall constitute but one and the same instrument.
ARTICLE LXIX
ADDITIONAL CITY REQUIREMENTS
[CONFIRM WITH CITY THAT THERE HAVE BEEN NO CHANGES]
As used in this Article LXIX, “Agreement” means the Indenture.
To the extent of any inconsistency between this Article LXIX and provisions in previous supplemental indentures dealing with City contracting requirements, the provisions of this Article LXIX shall control.
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Section 69.01. Local Business Enterprise Utilization; Liquidated Damages. (a) The LBE Ordinance. The Trustee shall comply with all the requirements of the Disadvantaged Business Enterprise Ordinance set forth in Chapter 14B of the San Francisco Administrative Code as it now exists or as it may be amended in the future (collectively the “LBE Ordinance”), provided such amendments do not materially increase the Trustee’s obligations or liabi lities, or materially diminish the Trustee’s rights, under this Fifteenth Supplemental Indenture. Such provisions of the LBE Ordinance are incorporated by reference and made a part of this Fifteenth Supplemental Indenture as though fully set forth in this Section 69.01. The Trustee’s willful failure to comply with any applicable provision of the LBE Ordinance is a material breach of the Trustee’s obligations under this Fifteenth Supplemental Indenture and shall entitle City, subject to any applicable notice and cure provisions set forth in this Fifteenth Supplemental Indenture, to exercise any of the remedies provided for under this Fifteenth Supplemental Indenture, under the LBE Ordinance or otherwise available at law or in equity, which remedies shall be cumulative unless this Fifteenth Supplemental Indenture expressly provides that any remedy is exclusive. In addition, The Trustee shall comply fully with all other applicable local, state and federal laws ꞏ prohibiting discrimination and requiring equal opportunity in contracting, including subcontracting. (b) Compliance and Enforcement.
(i) Enforcement. If the Trustee willfully fails to comply with any of the provisions of the LBE Ordinance, the rules and regulations implementing the LBE Ordinance, or the provisions of this Fifteenth Supplemental Indenture pertaining to LBE participation, the Trustee shall be liable for liquidated damages in an amount equal to the Trustee’s net profit on this Fifteenth Supplemental Indenture, or 10% of the total amount of this Fifteenth Supplemental Indenture, or $1,000, whichever is greatest. The Director of the City’ s Human Rights Commission or any other public official authorized to enforce the LBE Ordinance (separately and collectively, the “Director of HRC”) may also impose other sanctions against the Trustee authorized in the LBE Ordinance, including declaring the Trustee to be irresponsible and ineligible to contract with the City for a period of up to five years or revocation of the Trustee’s DBE certification. The Director of HRC will determine the sanctions to be imposed, including the amount of liquidated damages, after investigation pursuant to Administrative Code §14B.17.
By entering into this Fifteenth Supplemental Indenture, the Trustee acknowledges and agrees that any liquidated damages assessed by the Director of the HRC shall be payable to City upon demand. ꞏThe Trustee further acknowledges and agrees that any liquidated damages assessed may be withheld from any monies due to the Trustee on any contract with City,
The Trustee agrees to maintain records necessary for monitoring its compliance with the LBE Ordinance for a period of three years following termination or expiration of this Fifteenth Supplemental Indenture, and shall make such records available for audit and inspection by the Director of HRC or the Controller upon request.
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Section 69.02. Nondiscrimination; Penalties.
(a) Trustee Shall Not Discriminate . In the performance of this Fifteenth Supplemental Indenture; the Trustee agrees not to discriminate against any employee, City and County employee working with such contractor or subcontractor, applicant for emp loyment with such contractor or subcontractor, or against any person seeking accommodations, advantages, facilities, privileges, services, or membership in all business, social, or other establishments or organizations, on the basis of the fact or perception of a person’s race, color, creed, religion, national origin, ancestry, age, height, weight, sex, sexual orientation, gender identity, domestic partner status, marital status, disability or Acquired Immune Deficiency Syndrome or HIV status (AIDS/HN status), or association with members of such protected classes, or in retaliation for opposition to discrimination against such classes.
(b) Subcontracts. The Trustee shall incorporate by reference in all subcontracts the provisions of §§12B.2(a), 12B.2(c) -(k), and 12C.3 of the San Francisco Administrative Code (copies of which are available from Purchasing) and shall require all subcontractors to comply with such provisions. The Trustee’s failure to comply with the obligations in this subsection shall constitute a material breach of this Fifteenth Supplemental Indenture.
(c) Nondiscrimination in Benefits. The Trustee does not as of the date of this Fifteenth Supplemental Indenture and will not during the term of this Fifteenth Supplemental Indenture, in any of its operations in San Francisco, on real property owned by San Francisco, or where work is being performed for the City elsewhere in the United States, discriminate in the provision of bereavement leave, family medical leave, health benefits, membership or membership discounts, moving expenses, pension and retirement benefits or travel benefits, as well as any benefits other than the benefits specified above, between employees with domestic partners and employees with spouses, and/or between the domestic partners and spouses of such employees, where the domestic partnership has been registered with a governmental entity pursuant to state or local law authorizing such registration, subject to the conditions set forth in §12B.2(b) of the San Francisco Administrative Code.
(d) Condition to Contract . As a condition to this Fifteenth Supplemental Indenture, the Trustee shall execute the “Chapter 12B Declaration: Nondiscrimination in Contracts and Benefits” form (form HRC -12B-101) with supporting documentation and secure the approval of the form by the San Francisco Human Rights Commission. (e) Incorporation of Administrative Code Provisions by Reference . The provisions of Chapters 12B and 12C of the San Francisco Administrative Code are incorporated in this Section 69.02 by reference and madeꞏ a p a r t o f this Fifteenth Supplemental Indenture as though fully set forth herein. The Trustee shall comply fully with and be bound by all of the provisions that apply to this Fifteenth Supplemental Indenture under such Chapters, including but not limited to the remedies provided in such Chapters. Without limiting the foregoing, the Trustee understands that pursuant to §12B.2(h) of the San Francisco Administrative Code, a penalty of $50 for each
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person for each calendar day during which such person was discriminated against in violation of the provisions of this Fifteenth Supplemental Indenture may be assessed against the Trustee and/or deducted from any payments due the Trustee.
Section 69.03. MacBride Principles —Northern Ireland . Pursuant to San Francisco Administrative Code §12F.5, the City and County of San Francisco urges companies doing business in Northern Ireland to move towards resolving employment inequities, and encourages such companies to abide by the MacBride Principles. The City and County of San Francisco urges San Francisco companies to do business with corporations that abide by the MacBride Principles.
By signing below, the person executing this Fifteenth Supplemental Indenture on behalf of the Trustee acknowledges and agrees that he or she has read and understood this Section 69.03.
Section 69.04. Tropical Hardwood and Virgin Redwood Ban . Pursuant to §804(b) of the San Francisco Environment Code, the City and County of San Francisco urges contractors not to import, purchase, obtain, or use for any purpose, any tropical hardwood, tropical hardwood wood product, virgin redwood or virgin redwood wood product.
Section 69.05. Drug-Free Workplace Policy. The Trustee acknowledges that pursuant to the Federal Drug -Free Workplace Act of 1989, the unlawful manufacture, distribution, dispensation, possession, or use of a controlled substance is prohibited on City premises. The Trustee agrees that any violation of this prohibition by the Trustee, its employees, agents or assigns will be deemed a material breach of this Fifteenth Supplemental Indenture.
Section 69.06. Compliance with Americans with Disabilities Act . The Trustee acknowledges that, pursuant to the Americans with Disabilities Act (ADA), programs, services and other activities provided by a public entity to the public, whether directly or through a contractor, must be accessible to the disabled public. The Trustee shall provide the services specified in this Fifteenth Supplemental Indenture in a manner that complies with the ADA and any and all other applicable federal, state and local disability rights legislation. The Trustee agrees not to discriminate against disabled persons in the provision of services, benefits or activities provided under this Fifteenth Supplemental Indenture and further agrees that any violation of this prohibition on the part of the Trustee, its employees, agents or assigns will constitute a material breach of this Fifteenth Supplemental Indenture.
Section 69.07. Sunshine Ordinance. In accordance with San Francisco Administrative Code §67.24(e), contracts, contractors’ bids, responses to solicitations and all other records of communications between City and persons or firms seeking contracts, shall be open to inspection immediately after a contract has been awarded. Nothing in this provision requires the disclosure of a private person or organization’s net worth or other proprietary financial data submitted for qualification for a contract or other benefit until and unless that person or organization is awarded the contract or benefit. Information provided which is covered by this paragraph will be made available to the public upon request.
Section 69.08. Limitations on Contributions . Through its execution of this Fifteenth Supplemental Indenture, the Trustee acknowledges that it is familiar with Section 1.126 of the City’s Campaign and Governmental Conduct Code, which prohibits any person who contracts with the City for the rendition of personal services, for the furnishing of any material,
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supplies or equipment, for the sale or lease of any land or building, or for a grant, loan or loan guarantee, from making any campaign contribution to ( a) an individual holding a City elective office if the contract must be approved by the individual, a board on which that individual serves; or a board on which an appointee of that individual serves ; (b) a candidate for the office held by such individual ; or (c) a committee controlled by such individual, at any time from the commencement of negotiations for the contract until the later of either the termination of negotiations for such contract or six months after the date the contract is approved. The Trustee acknowledges that the foregoing restriction applies only if the contract or a combination or series of contracts approved by the same individual or board in a fiscal year have a total anticipated or actual value of $50,000 or more. The Trustee further acknowledges that the prohibition on contributions applies to each prospective party to the contract; each member of the Trustee’s board of directors; the Trus tee’s chairperson, chief executive officer, chief financial officer and chief operating officer; any person with an ownership interest of more than 20 percent in the Trustee; any subcontractor listed in the bid or contract; and any committee that is sponsored or controlled by the Trustee. Additionally, the Trustee acknowledges that the Trustee must inform each of the persons described in the preceding sentence of the prohibitions contained in Section 1.126.
Section 69.09. Requiring Minimum Compensation for Covered Employees. (a) The Trustee agrees to comply fully with and be bound by all of the provisions of the Minimum Compensation Ordinance (MCO), as set forth in San Francisco Administrative Code Chapter 12P (Chapter 12P), including the remedies provided, and implementing guidelines and rules. The provisions of Chapter 12P are incorporated herein-by reference and made a part of this Fifteenth Supplemental Indenture as though fully set forth. The text of the MCO is available on the web at http://www.sfgov.org/olse/mco. A partial listing of some of the Trustee’s obligations under the MCO is set forth in this Section 69.09. The Trustee is required to comply with all the provisions of the MCO, irrespective of the listing of obligations in this Section 69.09.
(b) The MCO requires the Trustee to pay the Trustee’s employees a minimum hourly gross compensation wage rate and to provide minimum compensated and uncompensated time off. The minimum wage rate may change from year to year and the Trustee is obligated to keep informed of the then -current requirements. Any subcontract entered into by the Trustee shall require the subcontractor to comply with the requirements of the MCO and shall contain contractual obligations substantially the same as those set forth in this Section 69.09. It is the Trustee’s obligation to ensure that any subcontractors of any tier under this Fifteenth Supplemental Indenture comply with the requirements of the MCO. If any subcontractor under this Fifteenth Supplemental Indenture fails to comply, City may pursue any of the remedies set forth in this Section 69.09 against the Trustee.
(c) The Trustee shall not take adverse action or otherwise discriminate against an employee or other person for the exercise or attempted exercise of rights under the MCO. Such actions, if taken within 90 days of the exercise or attempted exercise of such rights, will be rebuttably presumed to be retaliation prohibited by the MCO.
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(d) The Trustee shall maintain employee and payroll records as required by the MCO. If the Trustee fails to do so, it shall be presumed that the Trustee paid no more than the minimum wage required under State law.
(e) The City is authorized to inspect the Trustee’s job sites and conduct interviews with employees and conduct audits of the Trustee. (f) The Trustee’s co mmitment to provide the Minimum Compensation is a material element of the City’s consideration for this Fifteenth Supplemental Indenture. The City in its sole discretion shall determine whether such a breach has occurred. The City and the public will suffer actual damage that will be impractical or extremely difficult to determine if the Trustee fails to comply with these requirements. The Trustee agrees that the sums set forth in Section 12P.6.1 of the MCO as liquidated damages are not a penalty, but are reasonable estimates of the loss that the City and the public will incur for the Trustee’s noncompliance. The procedures governing the assessment of liquidated damages shall be those set forth in Section 12P.6.2 of Chapter 12P. (g) The Trustee understands and agrees that if it fails to comply with the requirements of the MCO, the City shall have the right to pursue any rights or remedies available under Chapter 12P (including liquidated damages), under the terms of the contract, and under applicable law. If, within 30 days after receiving written notice of a breach of this Fifteenth Supplemental Indenture for violating the MCO, the Trustee fails to cure such breach or, if such breach cannot reasonably be cured within such period of 30 days, the Trustee fails to commence efforts to cure within such period, or thereafter fails diligently to pursue such cure to completion; the City shall have the right to pursue any rights or remedies available under applicable law, including those set forth in Section 12P.6(c) of Chapter 12P. Each of these remedies shall be exercisable individually or in combination with any other rights or remedies available to the City. (h) The Trustee represents and warrants that it is not an entity that was set up, or is being used, for the purpose of evading the intent of the MCO. (i) The City may conduct random audits of the Trustee. Random audits shall be (i) noticed in advance in writing; (ii) limited to ascertaining whether Covered Employees are paid at least the minimum compensation required by the MCO; (iii) accomplished through an examination of pertinent records at a mutually agreed upon time and loc ation within ten days of the written notice; and (iv) limited to one audit of the Trustee every two years for the duration of this Fifteenth Supplemental Indenture. Nothing in this Fifteenth Supplemental Indenture is intended to preclude the City from investigating any report of an alleged violation of the MCO.
Section 69.10. Requiring Health Benefits for Covered Employees. Unless exempt, the Trustee agrees to comply fully with and be bound by all of the provisions of the Health Care Accountability Ordinance (HCAO), as set forth in San Francisco Administrative Code Chapter 12Q, including the remedies provided, and implementing regulations, as the same may be amended from time to time. The provisions of Chapter 12Q are incorporated herein by reference and made a part of this Fifteenth Supplemental Indenture as though fully set forth. The text of the
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HCAO is available on the web at http://www.sfgov.org/oca/lwlh.htm. Capitalized terms used in this Section 69.10 and not defined in this Fifteenth Supplemental Indenture sh all have the meanings assigned to such terms in Chapter 12Q.
(a) For each Covered Employee, the Trustee shall provide the appropriate health benefit set forth in Section 12Q.3 of the HCAO. If the Trustee chooses to offer the health plan option, such health plan shall meet the minimum standards set forth by the San Francisco Health Commission.
(b) Notwithstanding the above, if the Trustee is a small business as defined in Section 12Q.3(d) of the HCAO, it shall have no obligation to comply with paragraph (a) above.
(c) The Trustee’s failure to comply with the HCAO shall constitute a material breach of this Fifteenth Supplemental Indenture. City shall notify the Trustee if such a breach has occurred. If, within 30 days after receiving City’s written notice of a breach of this Fifteenth Supplemental Indenture for violating the HCAO, the Trustee fails to cure such breach or, if such breach cannot reasonably be cured within such period of 30 days, the Trustee fails to commence efforts to cure within such period, or thereaft er fails diligently to pursue such cure to completion, City shall have the right to pursue the remedies set forth in 12Q.5(f)(1 -5). Each of these remedies shall be exercisable individually or in combination with any other rights or remedies available to City. (d) Any Subcontract entered into by the Trustee shall require the Subcontractor to comply with the requirements of the HCAO and shall contain contractual obligations substantially the same as those set forth in this Section 69.10. The Trustee shall notif y City’s Office of Contract Administration when it enters into such a Subcontract and shall certify to the Office of Contract Administration that it has notified the Subcontractor of the obligations under the HCAO and has imposed the requirements of the HC AO on Subcontractor through the Subcontract. The Trustee shall be responsible for its Subcontractors’ compliance with this Chapter. If a Subcontractor fails to comply, the City may pursue the remedies set forth in this Section 69.10 against the Trustee based on the Subcontractor’s failure to comply, provided that City has first provided the Trustee with notice and an opportunity to obtain a cure of the violation. (e) The Trustee shall not discharge, reduce in compensation, or otherwise discriminate against an y employee for notifying City with regard to the Trustee’s noncompliance or anticipated noncompliance with the requirements of the HCAO, for opposing any practice proscribed by the HCAO, for participating in proceedings related to the HCAO, or for seeking to assert or enforce any rights under the HCAO by any lawful means.
(f) The Trustee represents and warrants that it is not an entity that was set up, or is being used, for the purpose of evading the intent of the HCAO.
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(g) The Trustee shall maintain employee and payroll records in compliance with the California Labor Code and Industrial Welfare Commission orders, including the number of hours each employee has worked on the City Contract. (h) The Trustee shall keep itself informed of the current requirements of the HCAO.
(i) The Trustee shall provide reports to the City in accordance with any reporting standards promulgated by the City’ under the HCAO, including reports on Subcontractors and Subtenants, as applicable.
(j) The Trustee shall provide City with access to records pertaining to compliance with HCAO after receiving a written request from City to do so and being provided at least ten business days to respond.
(k) The Trustee shall allow City to inspect the Trustee’s job sites and have access to the Trustee’s employees in order to monitor and determine compliance with HCAO.
(l) The City may conduct random audits of the Trustee to ascertain its compliance with HCAO. The Trustee agrees to cooperate with City when it conducts such audits.
(m) If the Trustee is exempt from the HCAO when this Fifteenth Supplemental Indenture is executed because its amount is less than $25,000 ($50,000 for nonprofits), but the Trustee later enters into an agreement or agreements that cause the Trustee’s aggregate amount of all agreements with City to reach $75,000, all the agreements shall be thereafter subject to the HCAO. This obligation arises on the effective date of the agreement that causes the cumulative amount of agreements between the Trustee and the City to be equal to or greater than $75,000 in the fiscal year.
Section 69.11. Prohibition on Political Activity With City Funds . In accordance with San Francisco Administrative Code Chapter 12.G, the Trustee may not participate in, support, or attempt to influence any political campaign for a candidate or for a ballot measure (collectively, “Political Activity”) in the performance of the services provided under this Fifteenth Supplemental Indenture. The Trustee agrees to comply with San Francisco Administrative Code Chapter 12.G and any implementing rules and regulations promulgated by the City’s Controller. The terms andꞏ provisions of Chapter 12.G are incorporated herein by this reference. In the event the Trustee violates the provisions of this Section 69.11, the City may, in addition to any other rights or remedies available hereunder, (a) terminate this Fifteenth Supplemental Indenture, and (b) prohibit the Trustee from bidding on or receiving any new City contract for a period of two years. The Controller will not consider the Trustee’s use of profit as a violation of this Section 69.11.
Section 69.12. Conflict of Interest. Through its execution of this Fifteenth Supplemental Indenture, the Trustee acknowledges that it is familiar with the provisions of Section 15.103 of the City’s Charter, Article III, C hapter 2 of City’s Campaign and Governmental Conduct Code, and Section 87100 et seq. and Section 1090 et seq. of the Government Code of the State of California, and certifies that it does not know of any facts which constitute a violation of said provision and
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agrees that it will immediately notify the City if it becomes aware of any such fact during the term of this Fifteenth Supplemental Indenture.
Section 69.13. Earned Income Credit (EIC) Forms . Administrative Code Section 120 requires that employers provide their employees with IRS Form W5 (The Earned Income Credit Advance Payment Certificate) and the IRS EIC Schedule, as set forth below.
Employers can locate these forms at the IRS Office, on the Internet, or anywhere that Federal Tax Forms can be found.
(a) The Trustee shall provide EIC Forms to each Eligible Employee at each of the following times: (i) within 30 days following the date on which this Fifteenth Supplemental Indenture becomes effective (unless the Trustee has already provided such EIC Forms at least once during the calendar year in which such effective date falls); (ii) promptly after any Eligible Employee is hired by the Trustee; and (iii) annually between January 1 and January 31 of each calendar year during the term of this Fifteenth Supplemental Indenture.
(b) Failure to comply with any requirement contained in Section 6 9.13(a) hereof shall constitute a material breach by the Trustee of the terms of this Fifteenth Supplemental Indenture. If, within thirty days after the Trustee receives written notice of such a breach; the Trustee fails to cure such breach or, if such breach cannot reasonably be cured within such period of thirty days, the Trustee fails to commence efforts to cure within such period or thereafter fails to diligently pursue such cure to completion, the City may pursue any rights or remedies available under this Fifteenth Supplemental Indenture or under applicable law.
(c) Any Subcontract entered into by the Trustee shall require the subcontractor to comply, as to the subcontractor’s Eligi ble Employees, with each of the terms of this Section 69.13.
(d) Capitalized terms used in this Section 69.13 and not defined in this Fifteenth Supplemental Indenture shall have the meanings assigned to such terms in Section 120 of the San Francisco Administrative Code.
Section 69.14. Preservative-treated Wood Containing Arsenic . The Trustee may not purchase preservative treated wood products containing arsenic in the performance of this Fifteenth Supplemental Indenture unless an exemption from the requirements of Chapter 13 of the San Francisco Environment Code is obtained from the Department of the Environment under Section 1304 of the Code. The term “preservative -treated wood containing arsenic” shall mean wood treated with a preservative that contains arsenic; elemental arsenic, or an arsenic copper combination, including, but not limited to, chromated copper arsenate preservative, ammoniacal copper zinc arsenate preservative, or ammoniacal copper arsenate preservative. The Trustee may purchase preservative-treated wood products on the list of environmentally preferable alternatives prepared and adopted by the Department of the Environment. This provision does not preclude the Trustee from purchasing preservative-treated wood containing arsenic for saltwater immersion.
The term “saltwater immersion” shall mean a pressure- treated wood that is used for construction purposes or facilities that are partially or totally immersed in saltwater.
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Section 69.15. Nondisclosure of Private Information. The Trustee has read and agrees to the te rms set forth in San Francisco Administrative Code Sections 12M.2, “Nondisclosure of Private Information,” and 12M.3, “Enforcement” of Administrative Code Chapter 12M, “Protection of Private Information,” which are incorporated herein as if fully set forth. The Trustee agrees that any failure of the Trustee to comply with the requirements of Section 12M.2 of this Chapter shall be a material breach of this Fifteenth Supplemental Indenture. In such an event, in addition to any other remedies available to it under equity or law, the City may terminate this Fifteenth Supplemental Indenture, bring a false claim action against the Trustee pursuant to Chapter 6 or Chapter 21 of the Administrative Code, or debar the Trustee.
Section 69.16. Proprietary or Confidential Informati on of City . The Trustee understands and agrees that, in the performance of the work or services under this Fifteenth Supplemental Indenture or in contemplation thereof, the Trustee may have access to private or confidential information which may be owned or controlled by City and that such information may contain proprietary or confidential details, the disclosure of which to third parties may be damaging to City. The Trustee agrees that all information disclosed by City to the Trustee shall be held in confidence and used only in performance of the Thirteenth Supplemental Indenture. The Trustee shall exercise the same standard of care to protect such information as a reasonably prudent contractor would use to protect its own proprietary data.
Section 69.17. Compliance with Laws. The Trustee shall keep itself fully informed of the City’s Charter, codes, ordinances and regulations of the City and of all state, and federal lawsꞏin any manner affecting the performance of this Fifteenth Supplemental Indenture, and must at all times comply with such local codes, ordinances, and regulations and all applicable laws as they may be amended from time to time.
Section 69.18. Works for Hire. If, in connection with services performed under this Fifteenth Supplemental Indenture, the Trustee or its subcontractors create artwork, copy, posters, billboards, photographs, videotapes, audiotapes, systems designs, software, reports, diagrams, surveys, blueprints, source codes or any other original works of authorship, such works of authorship shall be works for hire as defined under Title 17 of the United States Code, and all copyrights in such works are the property of the City. If it is ever determined that any works created by the Trustee or its subcontractors under this Fifteenth Supplemental Indenture are not works for hire under U.S. law, the Trustee hereby assigns all copyrights to such works to the City, and agrees to provide any material and execute any documents necessary to effectuate such assignment. With the approval of the City, the Truste e may retain and use copies of such works for reference and as documentation of its experience and capabilities.
Section 69.19. Resource Conservation. Chapter 5 of the San Francisco Environment Code (“Resource Conservation”) is incorporated herein by reference. Failure by the Trustee to comply with any of the applicable requirements of Chapter 5 will be deemed a material breach of contract.
Section 69.20. Public Access to Meetings and Records . If the Trustee receives a cumulative total per year of at least $250,000 in City funds or City- administered funds and is a non-profit organization as defined in Chapter 12L of the San Francisco Administrative Code; the Trustee shall comply with and be bound by all the applicable provisions of that Chapter. By
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executing this Fifteenth S upplemental Indenture, the Trustee agrees to open its meetings and records to the public in the manner set forth in §§12L.4 and 12L.5 of the Administrative Code.
The Trustee further agrees to make- good faith efforts to promote community membership on its Board of Directors in the manner set forth in §12L.6 of the Administrative Code. The Trustee acknowledges that its material failure to comply with any of the provisions of this paragraph shall constitute a material breach of this Fifteenth Supplemental Indenture. The Trustee further acknowledges that such material breach of this Fifteenth Supplemental Indenture shall be grounds for the City to terminate and/or not renew the agreement, partially or in its entirety.
Section 69.21. Guaranteed Maximum Costs.
(a) The City’s obligation hereunder shall not at any time exceed the amount certified by the Controller for the purpose and period stated in such certification. (b) Except as may be provided by laws governing emergency procedures, officers and employees of the City are not authorized to request, and the City is not required to reimburse the Trustee for, commodities or services beyond the agreed upon contract scope unless the changed scope is authorized by amendment and approved as required by law.
(c) Officers and employees of the City are not authorized to offer or promise, nor is the City required to honor, any offered or promised additional funding in excess of the maximum amount of funding for which the contract is certified without certification of the additional amount by the Controller.
(d) The Controller is not authorized to make payments on any contract for which funds have not been certified as available in the budget or by supplemental appropriation.
Section 69.22. Submitting False Claims; Monetary Penalties . Pursuant to San Francisco Administrative Code §21.16, any contractor, subcontractor or consultant who submits a false claim shall be liable to the City for three times the amount of damages which the City sustains because of the false claim. A contractor, subcontractor or consultant who submits a false claim shall also be liable to the City for the costs, including attorneys’ fees, of a civil action brought to recover any of those penalties or damages, and may be liable to the City for a civil penalty of up to $10,000 for each false claim. A contractor, subcontractor or consultant will be deemed to have submitted a false claim to the City if the contractor, subcontractor or consultant: (a) knowingly presents or causes to be presented to an officer or employee of the City a false claim or request for payment or approval; (b) knowingly makes, uses, or causes to be made or used a false record or statement to get a false claim paid or approved by the City; (c) conspires to defraud the City by getting a false claim allowed or paid by the City; (d) knowingly makes, uses, or causes to be made or used a false record or statement to conceal, avoid, or decrease an obligation to pay or transmit money or property to the City; or (e) is a beneficiary of an inadvertent submission of a false claim to the City; subsequently discovers the falsity of the claim, and fails to disclose the false claim to the City within a reasonable time after discovery of the false claim.
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Section 69.23. Agreement Made in California; Venue. The formation, interpretation and performance of this Agreement shall be governed by the laws of the State of California. Venue for all litigation relative to the formation, interpretation and performance of this Agreement shall be in San Francisco.
Section 69.24. Ownership of Results. Any interest of the Trustee or its Subcontractors, in drawings, plans, specifications, blueprints, studies, reports, memoranda, computation sheets, computer files and media or other documents prepared by the Trustee or its subcontractors in connection with services to be performed under this Fifteenth Supplemental Indenture, shall become the property of and will be transmitted to City. However, the Trustee may retain and use copies for reference and as documentation of its experience and capabilities.
Section 69.25. Audit and Inspec tion of Records . The Trustee agrees to maintain and make available to the City, during regular business hours, accurate books and accounting records relating to its work under this Fifteenth Supplemental Indenture. The Trustee will permit City to audit, examine and make excerpts and transcripts from such books and records, and to make audits of all invoices, materials, payrolls, records or personnel and other data related to all other matters covered by this Fifteenth Supplemental Indenture, whether funded in whole or in part under this Fifteenth Supplemental Indenture. The Trustee shall maintain such data and records in an accessible location and condition for a period of not less than three years after final payment under this Fifteenth Supplemental Indenture or until after final audit has been resolved, whichever is later. The State of California or any federal agency having an interest in the subject matter of this Fifteenth Supplemental Indenture shall have the same rights conferred upon City by this Section 69.25.
Section 69.26. Subcontracting. The Trustee is prohibited from subcontracting this Fifteenth Supplemental Indenture or any part of it unless such subcontracting is first approved by City in writing. Neither party shall, on the basis of this Fifteenth Supplemental Indenture, contract on behalf of or in the name of the other party. An agreement made in violation of this provision shall confer no rights on any party and shall be null and void.
Section 69.27. Assignment. The services to be performed by Trustee are per sonal in character and neither this Fifteenth Supplemental Indenture nor any duties or obligations hereunder may be assigned or delegated by the Trustee unless first approved by the Commission and the City by written instrument executed and approved in the same manner as this Fifteenth Supplemental Indenture.
Section 69.28. Non-Waiver of Rights . The omission by either party at any time to enforce any default or right reserved to it, or to require performance of any of the terms, covenants, or provisions hereof by the other party at the time designated, shall not be a waiver of any such default or right to which the party is entitled, nor shall it in any way affect the right of the party to enforce such provisions thereafter.
Section 69.29. City a Third -Party Beneficiary . The City i s hereby designated as a third-party beneficiary for the purpose of enforcing all of the obligations of the Trustee contained in this Fifteenth Supplemental Indenture and to the extent that any other rights are given to the City hereunder.
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Section 69.30. Food Service Waste Reduction Requirements . Effective June 1, 2007, the Trustee agrees to comply fully with and be bound by all of the provisions of the Food Service Waste Reduction Ordinance, as set forth in San Francisco Environment Code Chapter 16, including the remedies provided, and implementing guidelines and rules. The provisions of Chapter 16 are incorporated herein by reference and made a part of thi s Fifteenth Supplemental Indenture as though fully set forth. This provision is a material term of this Fifteenth Supplemental Indenture. By entering into this Fifteenth Supplemental Indenture, the Trustee agrees that if it breaches this provision, City will suffer actual damages that will be impractical or extremely difficult to determine; further, the Trustee agrees that the sum of $100 liquidated damages for the first breach, $200 liquidated damages for the second breach in the same year, and $500 liquidated damages for subsequent breaches in the same year is a reasonable estimate of the damage that the City will incur based on the violation, established in light of the circumstances existing at the time this Fifteenth Supplemental Indenture was made. Such amount shall not be considered a penalty, but rather agreed monetary damages sustained by the City because of the Trustee’s failure to comply with this provision.
Section 69.31. Graffiti Removal. Graffiti is detrimental to the health, safety and welfare of the community in that it promotes a perception in the community that the laws protecting public and private property can be disregarded with impunity. This perception fosters a sense of disrespect of the law that results in an increase in crime; degrades the co mmunity and leads to urban blight; is detrimental to property values, business opportunities and the enjoyment of life; is inconsistent with the City’s property maintenance goals and aesthetic standards; and results in additional graffiti and in other properties becoming the target of graffiti unless it is quickly removed from public and private property. Graffiti results in visual pollution and is a public nuisance. Graffiti must be abated as quickly as possible to avoid detrimental impacts on the City and County and its residents, and to prevent the further spread of graffiti. The Trustee shall remove all graffiti from any real property owned or leased by the Trustee in the City and County of San Francisco within 48 hours of the earlier of the Trustee’s (a) discovery or notification of the graffiti or (b) receipt of notification of the graffiti from the Department of Public Works. This Section 69.31 is not intended to require the Trustee to breach any lease or other agreement that it may have concerning its use of the real property. The term “graffiti” means any inscription, word, figure, marking or design that is affixed, marked, etched, scratched, drawn or painted on any building, structure, fixture or other improvement, whether permanent or temporary, including by way of example only and without limitation, signs, banners, billboards and fencing surrounding construction sites, whether public or private, without the consent of the owner of the property or the owner’s authorized agent, and which is visible from the public right -of-way. “Graffiti” shall not include: ( i) any sign or banner that is authorized by, and in compliance with, the applicable requirements of the San Francisco Public Works Code, the San Francisco Planning Code or the San Francisco Building Code; or ( ii) any mural or other painting or marking on the property that is protected as a work of fine art under the California Art Preservation Act (California Civil Code sections 987 et seq.) or as a work of visual art under the Federal Visual Artists Rights Act of 1990 (17 U.S.C. §§ 101 et seq.). Any failure of the Trustee to comply with this Section 69.31 of this Fifteenth Supplemental Indenture shall constitute a material breach of this Fifteenth Supplemental Indenture.
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IN WITNESS WHEREOF, the parties hereto have executed this Fifteenth Supplemental Indenture by their officers thereunto duly authorized as of the date and year first written above.
PUBLIC UTILITIES COMMISSION OF THE
CITY AND COUNTY OF SAN FRANCISCO
By
[__________], [General Manager of the
Commission]
ATTEST:
Secretary of the Public Utilities
Commission of the City and County
of San Francisco
Approved as to form:
David Chiu, City Attorney, City Attorney
By
__________, Deputy City Attorney
U.S. BANK TRUST COMPANY, NATIONAL
ASSOCIATION,
as trustee
By
__________, Vice President
4877-2820-1485.5
EXHIBIT I
FORM OF 2022CD BOND
STATE OF CALIFORNIA
CITY AND COUNTY OF SAN FRANCISCO
PUBLIC UTILITIES COMMISSION OF THE
CITY AND COUNTY OF SAN FRANCISCO
WASTEWATER REVENUE BOND
2022 SERIES [C][D](REFUNDING – FEDERALLY TAXABLE)[(SSIP) (GREEN BONDS)] [(NON-SSIP)]
No. R-_____ $__________
Interest Rate Maturity Date Original Issue Date CUSIP
_____% October 1, ____ [_____] 1, 2022 7976H__
REGISTERED OWNER: **CEDE & CO.**
PRINCIPAL AMOUNT: DOLLARS
The PUBLIC UTILITIES COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO, a commission duly organized and existing under and pursuant to the Charter of the City and County of San Francisco and the laws of the State of California (herein called the “Commission”), for value received, hereby promises to pay (but only out of the revenues hereinafter referred to) to the registered owner set forth above, or registered assigns, on the maturity date set forth above (subject to any right of prior redemption hereinafter provided for), the principal sum set forth above by check of the Trustee (as defined below) in lawful money of the United States of America, and to pay (but only out of the re venues hereinafter referred to) interest thereon in like lawful money from the interest payment date next preceding the date of authentication of this Bond (unless this Bond is authenticated as of a day during the period from the 16th day of the calendar month next preceding any interest payment date to and including such interest payment date, in which event it shall bear interest from such interest payment date, or unless this Bond is authenticated on or before [September/ March] 15, 20[__], in which even t it shall bear interest from the Dated Date; provided, however, that if, at the time of authentication of any Bond, interest is in default on Outstanding Bonds, such Bond shall bear interest from the interest payment date to which interest has previously been paid or made available for payment on the Outstanding Bonds and shall be payable to the Owners thereof of record as of a special date as shall be established by the Trustee following such default) until payment of such principal sum, at the interest r ate per annum stated above, payable on April 1 and October 1 in each year, commencing [October/April] 1, 20[__].
The principal (or redemption price) hereof is payable to the registered owner hereof upon the surrender hereof at the corporate trust office of U.S. Bank Trust Company, National
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Association (as successor in interest to U.S. Bank, National Association), in San Francisco, California, as trustee (herein, together with any successor as trustee under the Indenture, called the “Trustee”), or such other office designated by the Trustee. The interest hereon is payable to the person whose name appears on the bond registration books of the Trustee as the registered owner hereof as of the close of business on the 15th day of the calendar month immediately preceding an interest payment date, whether or not such day is a business day, such interest to be paid, except as otherwise provided in the Indenture, by check mailed to such registered owner at such address as appears on such registration books. Interest on this Bond shall be calculated on the basis of a 360-day year comprised of twelve 30-day months.
This Bond is one of a duly authorized issue of revenue bonds of the Commission designated as the “Wastewater Revenue Bonds” (herein called the “Bonds”), of the series and designation indicated on the face hereof (herein called the “2022 Series [C][D] Bonds”) and is a Current Interest Bond (as such term is defined in the Indenture hereinafter referred to). The Bonds are not limited in aggregate principal amount and consist or may consist of one or more series of varying denominations, dates, maturities, interest rates and other provisions, as in said Indenture provided, all issued and to be issued under and pursuant to the provisions of the Charter of the City and County of San Francisco and all laws of the State of California supplemental thereto, including the Revenue Bond Law of 1941 to the extent made applicable by said Charter (herein collectively called the “Law”), and pursuant to an Indenture, dated as o f January 1, 2003, between the Commission and the Trustee, as amended and supplemented, and as heretofore supplemented by that certain Fifteenth Supplemental Indenture dated as of [___] 1, 2022, between the Commission and the Trustee (collectively, with any supplements or amendments thereto, the “Indenture”).
Reference is hereby made to the Indenture (a copy of which is on file at the office of the Trustee) and to the Law for a description of the terms on which the Bonds are issued, the provisions with regard to the nature and extent of the Revenues (as such term is defined in the Indenture) and the rights thereunder (and limitations thereon) of the registered owners of the Bonds and the rights, duties and immunities of the Trustee and the rights and obligations of the Commission thereunder; and all the terms of the Indenture and the Law are hereby incorporated herein and constitute a contract between the Commission and the registered owner of this Bond, and to all the provisions thereof the owner of this Bond, by his acceptance hereof, consents and agrees. Each owner hereof shall have recourse to all of the provisions of the Law and the Indenture and shall be bound by all of the terms and conditions thereof.
The Bonds are being issued to certain outstanding Wastewater Revenue Bonds, as more particularly described in the Indenture. The Bonds are special obligations of the Commission and are payable, as to the principal thereof, interest thereon and any premiums upon the redemption of any thereof, from the revenues of the Enterprise (which, as more particularly defined in the Indenture, are therein and herein called the “Revenues”). All of the Bonds are equally secured by a pledge of, and charge and lien upon, all of the Net Revenues. Additional series of Bonds payable from the Revenues may be issued on a parity with the Bonds of this Series, but only subject to the conditions and limitations contained in the Indenture.
The principal of and interest on this 2022 Series [C][D] Bond are payable solely from the Revenues, and the Commission is not obligated to pay them except from the Revenues. The Commission has no taxing power. The general fund of the City and County of San Francisco is
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not liable, and the credit or taxing power of the City and County of San Francisco is not pledged, for the payment of the Bonds or their interest. The Bonds are not secured by a legal or equitable pledge of, or charge, lien or encumbrance upon, any of the property of the Commission or any of its income or receipts, except the Net Revenues. The owner hereof has no right to compel the exercise of any taxing power of the City and County of San Francisco.
The rights and obligations of the Commission and the owners of the Bonds may be modified or amended at any time in the manner, to the extent and upon the terms provided in the Indenture.
The 2022 Series [C][D] Bonds shall be subject to redemption, as set forth in the Fifteenth Supplemental Indenture.
The 2022 Series [C][D] Bonds are issuable as fully registered Bonds without coupons in the denomination of $5,000 or any integral multiple thereof provided that no 2022 Series [C][D] Bond shall have principal maturing on more than one principal payment date. Subject to the limitations and conditions and upon payment of the charges, if any, as provided in the Indenture, 2022 Series [C][D] Bonds may be exchanged for a like aggregate principal amount of 2022 Series [C][D] Bonds of the same series, tenor and maturity of other authorized denominations.
This 2022 Series [C][D] Bond is transferable by the registered owner hereof, in person or by his attorney duly authorized in writing, at said office of the Trustee, but only in the manner, subject to the limitations and upon payment of the charges provided in the Indenture, and upon surrender and cancellation of this 2022 Series [C][D] Bond. Upon such transfer a new fully registered 2022 Series [C][D] Bond or 2022 Series [C][D] Bonds, of authorized denomination or denominations and of the same series and tenor, for the same aggregate principal amount will be issued to the transferee in exchange herefor.
The Commission and the Trustee may treat the registered owner hereof as the absolute owner hereof for all purposes, and the Commission and the Trustee shall not be affected by any notice to the contrary.
It is hereby certified that all of the conditions, things and acts required to exist, to have happened or to have been performed precedent to and in the issuance of this 2022 Series [C][D] Bond do exist, have happened or have been performed in due and regular time, form and manner as required by the Law and the laws of the State of California, and that the amount of this 2022 Series [C][D] Bond, together with all other obligations of the Commission, does not exceed any limit prescribed by the Law or any laws of the State of California, and is not in excess of the amount of Bonds permitted to be issued under the Indenture.
This 2022 Series [C][D] Bond shall not be entitled to any benefit under the Indenture, or become valid or obligatory for any purpose, until the certificate of authentication and registration hereon endorsed have been signed by the Trustee.
DTC LEGEND
Unless this bond is presented by an authorized representative of The Depository Trust Company, a New York corporation (“DTC”), to the Commission or its agent for registration of
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transfer, exchange, or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of
DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein.
IN WITNESS WHEREOF, the Public Utilities Commission of the City and County of San Francisco has caused this Bond to be executed on its behalf, signed by the manual or facsimile signatures of its General Manager and of the Controller of the City and County of San Francisco and countersigned by the manual or facsimile signature of its Secretary, all as of [______], 2022.
PUBLIC UTILITIES CO MMISSION OF THE
CITY AND COUNTY OF SAN FRANCISCO
By
General Manager of the Commission
By
Controller of the City and County
of San Francisco
Countersigned:
By
Secretary of the Commission
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4877-2820-1485.5
TRUSTEE’S CERTIFICATE OF AUTHENTICATION
AND REGISTRATION TO APPEAR ON THE 2021 SERIES [C][D] BONDS This Bond is one of the Bonds described in the within- mentioned Indenture, which has been authenticated and registered on the date set forth below.
Dated: [_____] 1, 2022
U.S. BANK TRUST COMPANY, NATIONAL
ASSOCIATION,
as Trustee
By
__________, Authorized Officer
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4877-2820-1485.5
FORM OF ASSIGNMENT
For value received the undersigned do(es) hereby sell, assign and transfer unto ____________________ the within- mentioned Registered Bond and hereby irrevocably constitute(s) and appoint(s) ____________________ attorney, to transfer the same on the books of the Trustee with full power of substitution in the premises.
Dated: __________, _____
By
Signature Guaranteed:
NOTICE: Signature must be guaranteed by a
member firm of the New York Stock Exchange or a
commercial bank or trust company.
SYCR Draft of
3/16/2022
4886-8041-0384v4/022452-0303
$________
PUBLIC UTILITIES COMMISSION OF THE
CITY AND COUNTY OF SAN FRANCISCO
WASTEWATER REVENUE BONDS
$_________
2022 Series C
(Refunding - Federally Taxable)
(SSIP) (Green Bonds)
$_________
2022 Series D
(Refunding - Federally Taxable)
(Non-SSIP)
BOND PURCHASE CONTRACT
_____, 2022
Public Utilities Commission of the
City and County of San Francisco
525 Golden Gate Avenue, 13th Floor
San Francisco, CA 94102
Ladies and Gentlemen:
The undersigned Citigroup Global Markets Inc., on its own behalf and as representative (the “Representative”) of J.P. Morgan Securities LLC, Barclays Capital Inc., BofA Securities, Inc. and Goldman Sachs & Co. LLC ( collectively, the “Underwriters”), offers to enter into this Bond Purchase Contract (this “Purchase Contract”) with the Public Utilities Commission of the City and County of San Francisco (the “Commission” ), which will be binding upon the Commission and the Underwriters upon acceptance hereof by the Commission. This offer is made subject to the acceptance by the Commission by its execution of this Purchase Contract and its delivery to the Representative on or before 11:59 p.m., California time, on the date hereof and, if not so accepted, will be subject to with drawal by the Representative upon written notice delivered to the Commission at any time prior to the acceptance of this Purchase Contract by the Commission. If the Representative withdraws this offer, or the Underwriters’ obligation to purchase the Bonds (as hereinafter defined) is otherwise terminated pursuant to Section 8(d) hereof, then and in such case the Commission shall be without any further obligation to the Underwriters, including the payment of any costs set forth under Section 10(a) hereof, an d the Commission shall be free to sell the Bonds to any other party.
The Representative represents that it has been duly authorized by the other Underwriters to act hereunder on its behalf and has full authority to take such action as it may deem advisable in respect to all matters pertaining to this Purchase Contract and that the Representative has been duly authorized to execute this Purchase Contract. Any action take n under this Purchase Contract by the Representative will be binding upon all of the Underwriters. -2-
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Capitalized terms not otherwise defined herein shall have the meanings set forth in the Indenture, dated as of January 1, 2003 (the “Master Indenture”), between the Commission and U.S. Bank Trust Company, National Association , as successor trustee (the “Trustee”), as supplemented and amended to date and as further supplemented by a Fifteenth Supplemental Indenture, dated as of [May 1] , 2022 (the “Fifteenth Supplemental Indenture ”), between the Commission and the Trustee (the Master Indenture, as supplemented, being herein referred to as the “Indenture”).
Section 1. Purchase and Sale. Upon the terms and conditions and upon the basis of the representations set forth herein, the Under writers agree to purchase from the Commission, and the Commission hereby agrees to sell and deliver to, or for the account of, the Underwriters, all (but not less than all) of the $________ aggregate principal amount of Public Utilities Commission of the City and County of San Francisco Wastewater Revenue Bonds , 2022 Series C (Refunding - Federally Taxable) (SSIP) (Green Bonds) (the “ Series 2022C Bonds ”) and $__________ aggregate principal amount of Public Utilities Commission of the City and County of San Francisco Wastewater Revenue Bonds, 2022 Series D (Refunding - Federally Taxable) (Non-SSIP) (the “Series 2022D Bonds” and together with the Series 2022C Bonds, the “Bonds”).
The purchase price for the Bonds shall be $_______ (comprised of the purchase price of the Series 2022C Bonds in the amount of $________, representing the principal amount of the Series 2022C Bonds, less an Underwriters’ discount in the amount of $_________, and the purchase price of the Series 2022D Bonds in the amount of $_______, representing the principal amount of the Series 2022D Bonds, less an Underwriters’ discount of $___________).
The Bonds shall be da ted their date of delivery and shall have the maturities in principal amounts and bear interest at the rates per annum and have the prices all as set forth on Schedule I attached hereto. The Bonds shall be subject to optional and mandatory sinking fund redemption prior to maturity as shown on Schedule I. The Bonds shall be substantially in the form described in, and shall be issued and secured under and pursuant to, the Indenture. The Bonds shall be as otherwise described in the Official Statement (as hereinafter defined).
S
ection 2. Authorization for the Bonds; Purpose of Issue . T he Commission has the authority to issue the Bonds under Sections 9.109 of the Charter (the “ Charter”) of the City and County of San Francisco (the “ City”), and pursuant to Ordinance No. 173- 20 of the Board of Supervisors of the City (the “Board of Supervisors”) passed by two-thirds vote on September 29, 2020 (the “Ordinance”), and Resolution No. 22-____, adopted by the Commission on _______ , 2022 (the “Commission Resolution”).
The Series 2022C Bonds are being issued to (i) refund all or a portion of the Commission’s outstanding Wastewater Revenue Bonds, 2016 Series A (the “2016A Bonds ”) [add 2016B Bonds if qualify as green bonds] , and (ii) pay the costs of issuance of the Series 2022C Bonds. The 2022D Bonds are being issued to (i) refund all or a portion of the Commission’s outstanding Wastewater Revenue Bonds, 2016 Series B (the “ 2016B Bonds” and, together with the 2016A Bonds, the “ 2016 Bonds ”) and (ii) pay the costs of issuance of the 2022D Bonds.
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Section 3. Public Offering. It shall be a condition to the obligations of the Underwriters to purchase, accept delivery of and pay for the Bonds that the entire principal amount of the Bonds be sold and delivered by the Commission to th e Underwriters. The Underwriters agree to make a bona fide public offering of all the Bonds, at prices not in excess of the prices as set forth in Schedule I hereto. The Underwriters will provide, consistent with the requirements of the Municipal Securities Rulemaking Board (the “ MSRB”) Rule G -32, for the delivery of a copy of the Official Statement to each customer who purchases a Bond during the Underwriting Period (as hereinafter defined). The Underwriters further agree that it will comply with applicable laws and regulations, including without limitation Rule 15c2-12 and MSRB Rule G-17, in connection with the offering and sale of the Bonds. Subsequent to the initial public offering, the public offering prices of the Bonds may change as determined by the Underwriters to be necessary in connection with the marketing of the Bonds.
S
ection 4. Delivery of Official Statement. Prior to the date hereof, the Com mission has provided to the Underwriters for review a form of the preliminary official statement relating to the Bonds dated ________, 2022 (including the cover page and appendices thereto (the “Preliminary Official Statement”), which, as of its date, a representative of the Commission on behalf of the Commission deemed final for purposes of Rule 15c2-12 promulgated under the Securities Exchange Act of 1934 ( “Rule 15c2-12”), except for certain information permitted to be omitted therefrom by Rule 15c2- 12. By its acceptance of this offer, the Commission hereby ratifies and consents to the use and distribution by the Underwriters of the Preliminary Official Statement in connection with the public offering and sale of the Bonds, and the Commission has authorized the delivery of a final official statement relating to the Bonds dated the date hereof (both in print or electronic form) which will consist of the Preliminary Official S tatement and all information previously permitted to have been omitted by Rule 15c2-12.
The Commission hereby acknowledges that the Preliminary Official Statement has been made available to investors on the internet at ImageMasters’ website at www.MuniOS.com. The Commission hereby agrees to deliver or cause to be delivered to the Underwriters within seven (7) Business Days of the date hereof and in sufficient time to accompany any orders or confirmations from the Underwriters that request payment from any customers, not more than one hundred (100) copies of the final official statement (including all information permitted to be omitted by Rule 15c2-12 and any amendments or supplements to such official statement as have been approved by the Commission and the Representative) (the “Official Statement” ) to enable the Underwriter s to comply with the rules of the Securities and Exchange Commission (the “SEC”) and th e MSRB. The Commission hereby approves of the use and distribution by the Underwriters of the Official Statement in connection with the offer and sale of the Bonds. At the time of or prior to the Closing Date (as hereinafter de fined), the Representative shall file a copy of the Official Statement with the MSRB or its designee (including the MSRB’s Electronic Municipal Market Access system (“EMMA ”)) or with any other repository approved from time to time by the SEC (either in addition to or in lieu of the filings referred to above).
The Commission will deliver the Continuing Disclosure Certificate substantially in the form set forth in the Preliminary Official Statement (the “Continuing Disclosure Certificate”) on the Closing Date. The form of the Continui ng Disclosure Certificate will also be set forth in the Official Statement.
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Section 5. The Closing. At ______ a.m. , California time, on _________, 2022 or at such other time or on such other date as the Commission and the Representative may agree (the “Closing Date”), the Commission shall deliver, or cause to be delivered to or for the account of the Underwriters, through the Fast Automated Securities Transfer (“ FAST”) delivery system of The Depository Trust Company ( “DTC”), the Bonds in book- entry eligible form, duly executed and authenticated, and registered in the name of Cede & Co., as nominee of DTC. Concurrently with the delivery of the Bonds to the Representative, the Commission will deliver the documents hereinafter mentioned at the offices of Kutak Rock LLP (together with Curls Bartling P.C. (“ Co- Bond Counsel”), in [San Francisco, California,] or another place to be mutually agreed upon by the Commission and the Representative. The Underwriters shall accept such delivery and pay the purchase price for the Bonds set forth in Section 1 by federal funds wire transfer in immediately available funds to the order of the Trustee for the account of the Commission. This payment for, and delivery of, the Bonds, together with the delivery of the aforementioned documents, is herein called the “Closing.” The Representative shall order CUSIP identification numbers and the Commission shall cause such CUSIP identification numbers to be printed on the Bonds; provided, that neither the failure to print such number on any Bond nor any error with respect thereto shall constitute cause for a failure or refusal by the Underwriters to accept the Bonds.
Section 6. Representations, Warranties, and Agreements of the Commission . The Commission represents, warrants and agrees with the Underwriters as follows:
(a) Due Organization, Existence and Authority . The Commiss ion is a duly constituted department of the City and County of San Francisco duly organized and validly existing pursuant to its Charter and the Constitution and laws of the State, with full authority to: (i) adopt the Commission Resolution; (ii) execute and deliver the Master Indenture, the Fifteenth Supplemental Indenture, the Escrow Agreement, dated as of May __, 2022 (the “Escrow Agreement”), by and between the Commission and U.S. Bank Trust Company, National Association, as escrow agent (the “Escrow Agent”), the Continuing Disclosure Certificate and this Purchase Contract; (iii) approve the Official Statement and authorize its distribution by the Underwriter s; and (iv) sell and deliver the Bonds to the Und erwriters as provided herein. All approvals and consents which are required for the due authorization of, which would constitute a condition precedent to, or absence of which would materially adversely affect the due performance by the Commission of, its r espective obligations under the Bonds, this Purchase Contract, the Escrow Agreement and the Indenture have been duly obtained or when required for future performance are expected to be obtained, except for approvals, consents and orders as may be required under the Blue Sky or securities laws of any state in connection with the offering and sale of the Bonds.
(b) Accuracy and Completeness of the Preliminary Official Statement and Official Statement. The information in the Preliminary Official Statement, a s supplemented and amended through the date hereof was, and such information in the Official Statement, as of its date and at all times subsequent thereto up to and including the date of the Closing, will be, true and correct in all material respects, contains and will contain no misstatement of any material fact, and did not and will not omit any statement -5-
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and information that is necessary to make the statements and information contained therein, in the light of the circumstances under which such statements were made, not misleading in any material respect, excluding in each case any information contained in the Preliminary Official Statement and the Official Statement relating to (i) the offering prices, interest rates, selling co mpensation, aggregate principal amount, principal amount per maturity, delivery dates, or other terms of the Bonds depending on such matters, (ii) DTC and the book- entry only system and Euroclear Bank S.A./N.V. Clearstream Banking SA’s global clearance procedures, (iii) any CUSIP (and ISIN, Common Codes or other identification numbers, if applicable) numbers and (iv) information provided by the Underwriters , or bond insurers, if any, for inclusion in the Preliminary Official Statement or Official Statement, including without limitation information regarding offering restrictions in certain jurisdictions under the caption “INFORMATION
CONCERING OFFERING RESTRICTIONS IN CERTAIN JURISDICTIONS OUTSIDE OF THE UNITED STATES” and information regarding the prices and yields of the Bonds and under the caption “UNDERWRITING.”
(c) Amendment of Official Statement. If, at any time prior to the End of the Underwriting Period (as defined below), an event occurs or facts or conditions become known of which the Commission has knowledge, which in the reasonable opinion of Disclosure Counsel or the City Attorney might or would cause the information in the Official Statement, as then supplemented or amended, to contain any untrue statement of a material fact or to omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, the Commission will notify the Representative, and if in the reasonable opinion of the Representative or the Commission, such event, fact or condition requires the preparation and publication of a supplement or amendment to the Official Statement, the Commission will amend or supplement the Official Statement in a form and in a manner reasonably approved by the Representative and the Commission, provided all expenses incurred in connection with preparing an amendment or supplement to the Official Statement will be paid by the Commission. As used herein and for the purposes of the foregoing, the term “End of the Underwriting Period” for the Bonds shall refer to the Closing, unless the Commission shall have been notified in writing to the contrary by the Representative on or prior to the Closing, but in any event not later than the date t wenty-five (25) days following the Closing. For the purposes of this subsection, the Commission will furnish such information as the Underwriter s may from time to time reasonably request in writing prior to the End of the Underwriting Period.
(d) No Brea ch or Default. The Commission is not in breach of or default under any applicable constitutional provision, law or administrative regulation of the State of California or the United States, or any agency or department of either, or any applicable judgment or decree or any loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the Commission is a party or to which the Commission or any of its properties or other assets is otherwise subject, and no event has occurred and is continuing which, with the passage of time or the giving of notice, or both, would constitute a default or event of default under any such instrument, in any such case to the extent that the same would have a material and adverse effect upon the -6-
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business or properties or financial condition of the Commission or the issuance of the Bonds. As of the time of acceptance hereof and as of the Closing Date and except as otherwise disclosed in the Official Statement, neither the execution nor the delivery by the C ommission of the Indenture, the Escrow Agreement, the Continuing Disclosure Certificate or this Purchase Contract, the adoption of the Commission Resolution, or the compliance by the Commission with such documents or authorizations, conflicts with or constitutes a material breach of, or default under, any applicable law or administrative regulation of the State or the United States, or any other statute or administrative rule or regulation, judgment, decree, order, license, permit, agreement or instrument to which the Commission is subject, which breach, default or conflict would have a material adverse effect on the ability of the Commission to pay the Bonds or perform its obligations under the Indenture, the Escrow Agreement, the Continuing Disclosure Certificate or this Purchase Contract.
(e) No Other Bond Issues or Debt . Other than commercial paper notes, between the time of acceptance hereof and the Closing Date, the Commission will not, without prior written notice to the Representative, issue any bonds or securities or incur any other indebtedness secured by the Revenues.
(f) No Litigation . As of the date hereof and as of the Closing Date, and except as disclosed in the Official Statement, there is no action, suit, pro ceeding, inquiry or investigation, at law or in equity, before or by any court, regulatory agency, public board or body, pending or, to the knowledge of the Commission, threatened against the Commission: (i) affecting the existence of the Commission or the titles of its officers to their respective offices; (ii) seeking to restrain or to enjoin the sale or delivery of the Bonds or the application of the proceeds therefrom in accordance with the Indenture; (iii) in any way contesting or affecting the validity or enforceability of the Bonds, the Indenture, the Escrow Agreement, the Continuing Disclosure Certificate , this Purchase Contract or any action of the Commission authorizing the issuance, execution or delivery thereof; (iv) in any way contesting the completeness or accuracy of the Official Statement or any amendment or supplement thereto; or (v) contesting the powers of the Commission with respect to the Bonds or any action of the Commission authorizing the issuance, execution or delivery thereof, nor to the knowledge of the Commission, as evidenced by the representative of the Commission signing this Purchase Contract, is there any basis therefor. As of the date hereof and as of the Closing Date, and except as disclosed in the Official Statement, there is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, regulatory agency, public board or body, pending or, to the knowledge of the Commission, threatened against the Commission in which a final adverse decision would materially and adversely affect the operations of the Wastewater Enterprise, Net Revenues or the consummation of the transactions contemplated by this Purchase Contract or contesting in any way the completeness, accuracy or fairness of the Official Statement. (g) Further Cooperation; Blue Sky . The Commission will furnish such information, execute such instruments and take such other action in cooperation with the Underwriters as the Underwriter s may reasonably request in order to qualify the Bonds -7-
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for offer and sale under the Blue Sky or other securities laws and regulations of such states and other jurisdictions of the United States as the Underwriters may designate; provided, however, that the Commission will not be required to execute a special or general consent to service of process or qualify as a foreign corporation in connection with any such qualification in any jurisdiction.
(h) Continuing Disclosur e. Based on a review of its previous undertakings and except as described in the Preliminary Official Statement and the Official Statement, during the past five years, the Commission has complied in all material respects with its prior continuing disclosure undertakings under Rule 15c2-12. (i) Valid and Binding Obligations . This Purchase Contract, the Escrow Agreement, Fifteenth Supplemental Indenture and the Continuing Disclosure Certificate, when executed and delivered by the other parties thereto, will have been duly authorized, executed and delivered and will constitute legal, valid and binding obligations of the Commission (except to the extent that such enforceability may be limited by bankruptcy, insolvency, reorganization and similar law affecting creditors rights generally and general principals of equity). The Bonds, when issued, delivered and paid for as provided herein and in the Indenture, will have been duly authorized, executed and issued and will constitute legal, valid and binding limited obligations of the Commission entitled to the benefits of the Indenture.
(j) Financial Statements. No consent of KPMG LLP is required for inclusion of the independent auditors report with respect to the financial statements of the Commission for the years ended June 30, 2021 and June 30, 2020 in the P reliminary Official Statement or the Official Statement.
Section 7. Representations, Warranties and Agreements of the Underwriters. The Underwriters represent, warrant and agree with the Commission that:
(a) The Representative has been duly authorized to enter into this Purchase Contract.
(b) The Underwriters shall comply with the San Francisco Business Tax Ordinance and shall, if not otherwise exempt from such ordinance, provide to the Commission a Business Tax Registration Certificate on or prior to the date hereof. (c) The Underwriters shall comply with all SEC and MSRB rules applicable to the offering, sale and delivery of the Bonds to ultimate purchasers. (d) The Underwriters shall comply with the Commission’s policy and practice that the Commission shall not pay, and the Underwriters shall not pass through to the Commission, any fees that are assessed on the Underwriters as part of the Governmental Accounting Standards Board fee, as well as the MSRB Underwriting and Transaction Assessment, the SIFMA Municipal Assessment or any other industry related fees that are required to be paid solely by the Underwriters.
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Section 8. Closing Conditions. The Underwriters have authorized the Representative to enter into this Purchase Contract in reliance upon the representations, warranties and agreements herein and the performance by the Commission of its obligations hereunder, both as of the date hereof and as of the Closing Date. The obligations of the Underwriters under this Purchase Contract are and shall be subject to the following conditions:
(a) Bring-Down Representation. The representations and warranties of the Commission contained herein shall be true, accurate and correct in all material respects at the date hereof, and on the Closing Date, as if made on the Closing Date. (b) Executed Documents and Performance Thereunder . At the time of the Closing: (i) the Indenture, this Purchase Contract, the Escrow Agreement, the Continuing Disclosure Certificate and the Official Statement shall be in full force and effect, and shall not have been amended, modified or supplemented except with the consent of the Representative (which consent will not be unreasonably withheld); and (ii) the Commission shall perform or have performed all of its obligations required under or specified in this Purchase Contract, the Escrow Agreement, the Official Statement and the Indenture to be performed prior to the Closing.
(c) No Default. At the time of the Closing, no default shall have occurred or be existing under the Indenture or this Purchase Contract. (d) Termination Events . The Representative may terminate this Purchase Contract by notification in writing to the Commission from the Representative, if, at any time on or prior to the Closing, any of the following occurs and, as a result of the occurrence of such an event, the marketability of the Bonds or the market pr ice thereof, or the ability of the Underwriters to enforce contracts for the sale, at the contemplated offering prices, of the Bonds, in the reasonable opinion of the Representative, after consultation with the Commission, would be materially adversely affected:
(i) any event shall occur which makes untrue any statement or results in an omission to state a material fact necessary to make the statements in the Official Statement, in the light of the circumstances under which they were made, not misleading and the Commission fails to amend or supplement the Official Statement pursuant to Section 6(c) hereof or the effect of the amendment or supplement, in the reasonable judgment of the Representative, would materially adversely affect the market for the Bonds , at the contemplated offering prices (or yields) by the Underwriters of the Bonds; or
(ii) an amendment to the Constitution of the United States or the Constitution of the State or legislation in or by the Congress of the United States or the legislature of the State, or the amendment of legislation pending as of the date of this Purchase Contract in the Congress of the United States, or the favorable reporting for passage of legislation to either House of the Congress of the United States by a Committee of such House to which such legislation has been referred for consideration, or any decision of any federal or State court or any ruling or regulation (final, temporary or proposed) or official statement on -9-
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behalf of the United States Treasury Department, the Internal Revenue Service or other federal or State authority or the occurrence of any other comparable legislative or regulato ry event affecting the federal or State tax status of the interest on the Bonds or bonds or obligations of the general character of the Bonds; provided, that the occurrence of any such event shall not constitute a termination event hereunder if the prospect of such constitutional, legislative, regulatory or judicial action or enactment shall have been publicly known on the date hereof; or
(iii) any legislation, ordinance, rule or regulation shall be introduced in, or be enacted by any governmental body, department or agency of the State, or a decision by any court of competent jurisdiction within the State shall be rendered; or
(iv) a stop order, ruling, regulation or official statement by, or on behalf of, the Securities and Exchange Commission or any other governmental agency having jurisdiction of the subject matter shall be issued or made to the effect that the issuance, offering or sale of obligations of the general character of the Bonds, or the issuance, offering or sale of the Bonds, including all underlying obligations, as contemplated hereby or by the Official Statement, is in violation or would be in violation of any provision of the federal securities laws, including the Securities Act of 1933, as amended and as then in effect, or that the Indent ure need be qualified under the Trust Indenture Act of 1939, as amended and as then in effect; or
(v) legislation shall be enacted by the Congress of the United States, or a decision by a court of the United States shall be rendered, to the effect that obligations of the general character of the Bonds, or the Bonds, are not exempt from registration under the Securities Act of 1933, as amended and as then in effect, or the Securities Exchange Act of 1934, as amended and as then in effect, or that the Indenture is not exempt from qualification under the Trust Indenture Act of 1939, as amended and as then in effect; or
(vi) there shall have occurred a general suspension of trading or additional material restrictions not in force as of the date hereof shall have been imposed upon trading in the United States in securities generally by any governmental authority or by any national securities exchange; or (vii) a general banking moratorium shall have been declared by federal, State or State of New York authorities or a disruption in securities settlement, payment or clearance services has occurred; or
(viii) the ratings on the Bonds or any other debt obligations secured by Net Revenues of the Wastewater Enterprise shall have been downgraded or withdrawn or the subject of an official notice as to a possible downgrading (such as being placed on “credit watch” or “negative outlook”) subsequent to the date of this Purchase Contract by one of the rating agencies rating the Bonds; or -10-
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(ix) there shall have occurred any outbreak or escalation of hostilities, declaration by the United States of a national or international emergency or war or other calamity or crisis (or any escalation thereof).
The termination of this Purchase Contract pursuant to this Section 8(d) by the Underwriters with respect to the Bonds shall not prohibit the Commission from selling such Bonds to any other underwriter.
(e) Closing Documents. At or prior to the Closing, the Representative shall receive with respect to the Bonds (unless the context otherwise indicates) the following documents, in each case satisfactory in form and substance to the Representative:
(1) A
pproving Authorizations. Certified copies of the Ordinance and Commission Resolution.
(2) B ond Documents. An executed copy of the Master Indenture and executed originals of the Fifteenth Supplemental Indenture , the Escrow Agreement, the Continuing Disclosure Certificate and this Purchase Contract. (3) F inal Opinion. An approving opinion or opinions of Co-Bond Counsel, dated the Closing Date, and substantially in the form attached to the Official Statement, and a letter of such counsel addressed to the Underwriters to the effect that such opinion may be relied upon by the Underwriters to the same extent as if it had been addressed to them.
(4) Suppl emental Opinion. A supplemental opinion or opinions of Co- Bond Counsel addressed to the Commission and the Underwriter , dated the Closing Date, to the following effect:
(i ) T he statements contained in the Official Statement under the captions “T HE 2022 SERIES ABCD BONDS,” “S ECURITY FOR THE BONDS,” “ TAX MATTERS,” APPENDIX A—“SUMMARY OF CERTAIN
PROVISIONS OF THE INDENTURE,” and APPENDIX C—“ PROPOSED FORM OF OPINION OF CO-BOND COUNSEL,” insofar as such statements purport to summarize certain provisions of the Bonds, the Indenture, and the opinion of Co-Bond Counsel are accurate in all material respects. (ii) The Bonds are not subject to the registration requirements of the Securities Act of 1933, as amended, and the Indenture is exempt from qualification under the Trust Indenture Act of 1939, as amended. (iii) This Purchase Contract has been duly executed and delivered by the Commission and constitutes the valid and binding agreement of the Commission.
(5 ) Defeasance Opinion. A defeasance opinion of Co-Bond Counsel with respect to the 2016 Bonds.
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(6) Disclosure Counsel Opinion as to Official Statement. An opinion of Orrick, Herrington & Sutcliffe LLP, as Disclosure Counsel to the Commission, addressed to the Commission and the Underwriters, dated the Closing Date, to the effect that, while such counsel is not passing upon, and does not assume any responsibility for, the accuracy, completeness or fairness of any of the statements contained in the Preliminary Official Statement or the Official Statement, based upon such counsel’s participation in conferences during which the contents of the Preliminary Offi cial Statement and the Official Statement were discussed, no information came to such counsel’s attention which caused such counsel to believe that the Preliminary Official Statement, as of its date, or the Official Statement, as of its date and as of the Closing Date (except for the financial, statistical or economic data or forecasts, numbers, charts, tables, graphs, estimates, projections, assumptions or expressions of opinion, CUSIP numbers (and ISIN, Common Codes or other identification numbers, if applicable) , any information regarding DTC and its book- entry system, Euroclear Bank S.A./NV or Clearstream Banking S .A., and any information contained in Appendices included therein (other than Appendi x D), and any information incorporated by reference therein, as to which no opinion or view need be expressed) contained any untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading.
(6) C
ertificate of the Commission . A certificate of the Commission dated the Closing Date, signed on behalf of the Commission by an authorized officer of the Commission, to the effect that:
(i ) The representations and warranties of the Commission contained herein are true and correct in all material respects on and as of the Closing Date as if made on the Closing Date.
(ii) No event affecting the Commission has occurred since the date of the Off icial Statement which has not been disclosed therein or in any supplement or amendment thereto which event should be disclosed in the Official Statement in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. (7 ) Certificate of the Trustee and Escrow Agent . A certificate of the U.S. Bank Trust Company, National Association, as Trustee and Escrow Agent (referred to collectively in the capacity of Trustee and Escrow Agent, as “U.S.
Bank”) , dated the Closing Date, to the effect that:
(i ) U.S. Bank is a national banking association organized and existing under the laws of the United States of America and has full power and is qualified to accept and comply with the terms of the Indenture and the Escrow Agreement (together, the “ U.S. Bank Documents ”) and to perform its obligations thereunder and to authenticate the Bonds. -12-
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(ii) U.S. Bank has accepted the duties and obligations imposed on it by the U.S. Bank Documents.
(iii) No consent, approval, authorization or other action by any governmental or regulatory authority having jurisdiction over U.S. Bank that has not been obtained is or will be required for the consummation by U.S. Bank of the transactions contemplated by the U .S. Bank Documents to be undertaken by the U.S. Bank.
(iv) Compliance with the terms of the U.S. Bank Documents will not conflict with, result in a violation or breach of, or constitute a default under, any loan agreement, indenture, bond, note, resolution or any other agreement or instrument to which U.S. Bank is a party or by which it is bound, or, to the best knowledge of U.S. Bank, after reasonable investigation, any law, rule, regulation, order or decree of any court or governmental agency or body having jurisdiction over U.S. Bank or any of its activities or properties (except that no representation, warranty or agreement is made by U.S. Bank with respect to any federal or state securities or Blue Sky laws or regulations).
(v) To the knowledge of the U.S. Bank after due inquiry, there is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court or governmental agency, public board or body served on or threatened against or affecting the existence of U.S. Bank, or in any way contesting or affecting the validity or enforceability of the U.S.
Bank Documents or the Bonds, or contesting the powers of U.S. Bank or its authority to enter into and perform its obligations under the U.S. Bank Documents or the Bonds, wherein an unfavorable decision, ruling or finding would adversely affect the validity of the Bonds or the U.S. Bank Documents.
(8
) Opinion of Counsel to the Trustee and Escrow Agent . An opinion of counsel to U.S. Bank addressed to the Commission and the Underwriters, dated the Closing Date, to the effect that:
(i ) U.S. Bank is a national banking association with trust powers, duly organized and validly existing and in good standing under the laws of the United States of America, having the legal author ity to exercise trust powers in the State.
(ii) U.S. Bank has full legal power and adequate corporate authority to accept the duties and obligations imposed on it by the U.S.
Bank Documents and to authenticate the Bonds and the full legal power and authority to own its properties and to carry on its business. (iii) The Bonds have been duly authenticated by U.S. Bank. -13-
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(iv) No consent, approval, authorization or order of any court, regulatory authority or governmental body is required for the valid authorization, execution and delivery of the U.S. Bank Documents and the authentication of the Bonds or the consummation by the U.S. Bank of the transactions contemplated in the U.S. Bank Documents except such as have been obtained and except such as may be required under the state securities or Blue Sky laws in connection with the purchase and distribution of the Bonds by the Underwriters.
(v) U.S. Bank’s acceptance of its duties under the U.S. Bank Documents and the authentication of the Bonds by U.S. Bank and performance by U.S. Bank of its obligations thereunder will not conflict with or result in a breach of any of the terms, conditions or provisions of its Articles of Association or Bylaws or any other agreement or instrument to which U.S. Bank is a party or by which it is bound or any other existing law, regulation, court order or consent decree to which U.S. Bank is subject or constitute a default thereunder.
(vi) There is no action, suit, proceeding, inquiry or
investigation, at law or in equity, before or by any court, governmental agency, public board or body, pending or threatened against U.S. Bank affecting the existence of U.S. Bank or the titles of its officers to their respective offices or seeking to prohibit, restrain or enjoin the authentication of the Bonds by U.S. Bank, or contesting the powers of U.S. Bank or its authority to perform its obligations under the U.S. Bank or the Bonds.
(9
) California Debt and Investment Advisory Commission Filings .
Copies of the Report of Proposed Debt Issuance and Report of Final Sale required to be delivered to the California Debt and Investment Advisory Commission pursuant to Section 53583 of the Government Code and Section 8855(g) of t he Government Code.
(10) R ating Letters for the Bonds. Rating letters of Moody’s Investor s Service, Inc. (“Moody’s”) and Standard & Poor’s Ratings Services, a Standard & Poor’s Financial Services LLC business ( “S&P”), evidencing that such rating agencies have assigned their municipal bond ratings of “___” and “___,” respectively.
(11) O pinion of the City Attorney. An opinion of the City Attorney addressed to the Underwriters, dated the Closing Date, in substantiall y the form attached hereto as Appendix B.
(12) Blue Sky Memorandum. A copy of the Blue Sky Memorandum with respect to the Bonds, prepared by Stradling Yocca Carlson & Rauth, a Professional Corporation, counsel to the Underwriters (“Underwriters’ Counsel”). -14-
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(13) Opinion of the Underwriters’ Counsel. The opinion of Underwriters’ Counsel, dated the Closing Date and addressed to the Underwriters, in
form satisfactory to the Underwriters.
(14) Verification Report . A verification report of _____, certified public accountants, as described in the Official Statement. (15) A dditional Documents. Such legal opinions, additional certificates, instruments and other documents as the Representative, Co-Bond Counsel or the City Attorney may reasonably deem necessary to evidence the truth and accuracy as of the time of the Closing of the representations of the Commission and the due performance or satisfaction by the Commission at or prior to such time of all agreements then to be performed and all conditions then to be satisfied by the Commission.
If the Commission shall be unable to satisfy the conditions contained in t his Purchase Contract, unless waived by the Representative , or if the obligations of the Underwriters shall be terminated for any reason permitted by this Purchase Contract, this Purchase Contract shall terminate and the Underwriters and the Commission shall not be under further obligation hereunder, except as further set forth in Section 10 hereof.
Section 9. Good Faith Deposit. To secure the Commission from any loss resulting from the failure of the Underwriters to accept delivery of and pay the purchase price for the Bonds pursuant to the terms of this Purchase Contract, the Underwriters agree to deliver to or to the order of the Commission, concurrently with the execution and delivery of this Purchase Contract, either an official bank check (which may be deposited by the Commission upon receipt) or a federal funds wire transfer in the amount of $______ (the “ Good Faith Deposit ”).
At the Closing, the Good Faith Deposit will be applied towards and deducted from the aggregate net purchase price for the Bonds as provided in Section 1 of this Purchase Contract. If the Underwriters fail to pay the purchase price in full upon tender of the Bonds (other than for a reason permitted under Section 8 hereof), the Commission may retain such Good Faith Deposit as and for liquidated damages for such failure by the Underwriter s. In such circumstance, the Underwriters will have no right to recover the Good Faith Deposit or to any allowance or credit therefor. Retaining the Good Faith Deposit shall constitute the Commission’s sole and exclusive remedy an d full liquidated damages for the Underwriters’ failure (other than for a reason expressly set forth herein) to purchase and accept delivery of the Bonds pursuant to the terms of this Purchase Contract and the Underwriter s shall be released and discharged from any and all claims for damages by the Commission against the Underwriters related to such failure and any other defaults by Underwriters hereunder. Accordingly, t he Underwriters hereby waive any right to claim that the actual damages of the Commission are less than the Good Faith Deposit, and the acceptance of this offer by the Commission shall constitute a waiver of any right the Commission may have to additional damages from the Underwriters. The Underwriters and the Commission hereby acknowledge and agree that the amount fixed pursuant to this Section for liquidated damages does not constitute a penalty and is a reasonable estimate of the damages that the Commission would sustain in the event of the Underwriter’s failure to purchase and to accept delivery of the Bonds on the Closing Date pursuant to the terms of this Purchase Contract. Said -15-
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amount is agreed upon and fixed as liquidated damages because of the difficulty of ascertaining as of the date hereof the actual amount of damages that would be sustained in such event. If the Commission fails to deliver the Bonds on the Closing Date pursuant to this Purchase Contract, or if the conditions to the obligations of the Underwriters to purchase, accept delivery of and pay for the Bonds as set forth in this Purchase Contract shall not be satisfied (unless waived in writing by the Representative pursuant to this Purchase Contract), or if this Purchase Contract is terminated for a reason set forth in Section 8 hereof, the Commission shall promptly return o r cause the return of the Good Faith Deposit to the Representative. Upon such return of the Good Faith Deposit to the Underwriters, this Purchase Contract shall terminate, and neither party shall have any further obligations hereunder.
Section 10. Expense s.
(a) Commission. The Commission shall pay or cause to be paid (but solely from the proceeds of the Bonds and not otherwise) the expenses incident to the performance of the obligations of the Commission hereunder, including but not limited to: (1) the cost of printing of the Preliminary Official Statement and the final Official Statement in reasonable quantities and all other documents prepared in connection with the transactions contemplated hereby; (2) the fees and disbursements of the Trustee and counsel to the Trustee in connection with the issuance of the Bonds; (3) the fees and disbursements of Co-Bond Counsel and Disclosure Counsel and of Montague DeRose and Associates, LLC and Backstrom McCarley Berry & Co., LLC, as Co-Municipal Advisors to the Commission, and any other experts or consultants retained by the Commission in connection with the transactions contemplated hereby; (4) fees of the verification agent and (5) the costs related to obtaining ratings.
(b) Underwriters.
The Underwriters shall pay: (1) the cost of preparation and printing of Blue Sky and Legal Investment Memoranda, if any, to be used by it; (2) all advertising expenses in connection with the public offering of the Bonds; (3) California Debt and Investment Advisory Commission fees; (4) all other expenses incurred by the Underwriter s in connection with its public offering and distribution of the Bonds, including, without limitation, any experts or other consultants hired or retained by the Underwriter, including Underwriter’ s Counsel, the fees and charges of the CUSIP Bureau and the MSRB; and (5) the fees of Digital Assurance Certification, L.L.C. for a continuing disclosure compliance review . Certain expenses of the Underwriters may be included in the expense component of the Underwriters ’ discount. In addition, the Commission agrees to reimburse the Underwriter s for any expenses incurred by the Underwriters on behalf of the Commission’s employees and representatives which are in connection with this Purchase Contract, including, but not limited to, meals, transportation and lodging of those employees and representatives, which expenses, if any, will be included in the expense component of the Underwriter’s discount. The Underwriter s agree to provide the Commission with a detailed itemization of any such expenses incurred on behalf of Commission employees or representatives prior to the Closing Date. [ Notwithstanding that the California Debt and Investment Advisory Commission fees are solely the legal obligation of the Underwriters, the Commission agrees to reimburse the Underwriters for such fees.]
Section 11. C
ity Contracting Requirements . The provisions set forth in Appendix A , attached hereto, are incorporated herein by this reference. -16-
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Section 12. Notices. Any notice or other communication to be given under this Purchase Contract to the Commission or the Underwriter s may be given by delivering the same in writing at the addresses set forth below:
If to the Commission:
Public Utilities Commission of the
City and County of San Francisco
525 Golden Gate Avenue, 13th Floor
San Francisco, California 94102
Attention: Assistant General Manager, Business Services/Chief Financial Officer Telephone: (415) 554-3155
Fax: (415) 554-3161
With a copy to:
City and County of San Francisco
Office of Public Finance
City Hall, Room 336
1 Dr. Carlton B. Goodlett Place
San Francisco, California 94102
Telephone: (415) 554-5956
Fax: (415) 554-4864
If to the Representative:
Citigroup Global Markets Inc.
300 South Grand, Suite 3110
Los Angeles, California 90071
Attention: Cameron Parks, Managing Director
Telephone: (213) 486-7130
Section 13. Entire Agreement . This Purchase Contract, when accepted by the Commission, shall constitute the entire agreement between the Commission and the Underwriters and is made solely for the benefit of the Commission and the Underwriter s (including the successors or assigns of any Underwriter s with the consent of the Commission) and no other person shall acquire or have any right hereunder by virtue hereof. All of the Commission’s representations, covenants and agreements in this Purchase Contract shall remain operative and in full force and effect, regardless of (a) any investigation made by or on behalf of the Underwriter, (b) delivery of and payment for the Bonds hereunder, and (c) any termination of this Purchase Contract.
Section 14. Counterparts . This Purchase Contract may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument. This Purchase Contract may be signed in counterparts, and upon delivery to the other party of such -17-
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signed Purchase Contract, which delivery may be by facsimile transmission, shall constitute the binding agreement of each party to this Purchase Contract.
Section 15. Mutual Reliance on Representations and Warranties . The Commission hereby acknowledges that the Underwriter s, in causing the Purchase Contract to be executed by the Representative and in paying for the Bonds as provided herein, is relying upon the representations of the Commission set forth herein. The Underwriter s hereby acknowledges that the Commission, in executing this Purchase Contract and issuing the Bonds described herein, is relying upon the representations and warranties of the Underwriters set forth herein.
Section 16. Severability. In case any one or more of the provisions contained herein shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision hereof, but this Purchase Contract shall be construed as if such invalid or illegal or unenforceable provision had never been contained herein.
Section 17. State of California Law Governs . The validity, interpretation and performance of this Purchase Contract shall be governed by the laws of the State of California.
This Purchase Contract shall be enforceable in the State of California, and any action arising out of this Purchase Contract shall be filed with and maintained in the City and County of San Francisco Superior Court, San Francisco, California; provided, that the Commission may waive the requirement of venue.
Section 18. Limited Liability . The obligations and liabilities of the Commission hereunder are limited obligations of the Commission payable solely from Revenues as defined and set forth in the Indenture. None of the Commissioners, the officers or employees of the Commission, or any person executing this Purchase Contract shall be liable personally for the obligations of the Commission hereunder or be subject to any personal liability or accountability by reason of the execution hereof. Neither of the faith and credit nor the taxing power of the State or any political subdivision thereof, including the City, is pledged to the obligations of the Commission hereunder.
Section 19. No Fiduciary or Advisory Role; Arm’s Length Transaction . The Underwriters and the Commission acknowledge and agree that (i) the purchase and sale of the Bonds pursuant to this Purchase Contract is an arm’s -length commercial transaction between Commission, on the one hand, and the Underwriter s, on the other hand, (ii) in connection with such transaction, the Underwriters are acting solely as a principal and not as a municipal advisor, a financial advisor, or a fiduciary of the Commission, and m ay have financial and other interests that differ from those of the Commission, (iii) the Underwriter s have not assumed a fiduciary responsibility in favor of the Commission with respect to the offering of the Bonds or the discussions, undertakings and procedures leading thereto (whether or not any Underwriter, or any affiliate of an Underwriter, has provided or is currently providing services or advice to Commission on other matters), and (iv) the Commission and the Underwriter s have consulted with their respective legal, financial and other advisors to the extent they deemed appropriate in connection with the offering of the Bonds. T he Underwriter s are not acting as a Municipal Advisor to the Commission (as defined in Section 15B of the Exchange Act of 1934, as amended) in connection with the matters contemplated by this Purchase Contract. -18-
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Very truly yours,
CITIGROUP GLOBAL MARKETS INC., as
Representative
By: ____________________________________
Cameron Parks, Managing Director
Accepted as of the date first stated above:
PUBLIC UTILITIES COMMISSION OF THE
CITY AND COUNTY OF SAN FRANCISCO
By:_________________________________
[ Name, Title]
Approved as to Form:
DAVID CHIU
City Attorney
By:_________________________________
Mark D. Blake, Deputy City Attorney
[Signature Page to Wastewater Revenue Bonds 2022 Series C and 2022 Series D Bond Purchase Contract]
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SCHEDULE I
TO THE PURCHASE CONTRACT
MATURITY SCHEDULE
$______________
2022 SERIES C
(Refunding – Federally Taxable)
(SSIP) (Green Bonds)
Maturity
(October 1)
Principal
Amount
Interest
Rate Price
*Term Bonds
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MATURITY SCHEDULE
$_________
2022 SERIES D
(Refunding – Federally Taxable)
(Non-SSIP)
*
Term Bonds
Maturity
(October 1)
Principal
Amount
Interest
Rate Price
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Redemption Provisions for the Bonds
Series 2022C Bonds Redemption Provisions
Optional Redemption of Series 2022C Bonds . The Series 2022C Bonds are subject to redemption prior to their stated maturity, at the option of the Commission, from any source of available funds, as a whole or in part, on any date on or after _______ 1, ____, from such maturities or portions of maturities as are determined by the Commission and by lot within any one maturity, at a redemption price equal to 100% of the principal amount of the Series 2022C Bonds to be redeemed, plus accrued interest thereon to the date fixed for redemption, without premium. [Subject to update from Municipal Advisor/Commission]
Make-Whole Optional Redemption of Series 2022C Bonds. Before ______ 1, the Series 2022C Bonds will be subject to redemption either in whole or in part, at the option of the Commission, at any time, at a redemption price equal to the greater of (i) 100% of the principal amount thereof or (ii) the Discounted Value (as defined in “– Definitions for Make-Whole Optional Redemption”) thereof, plus in either case, accrued interest thereon to the date of redemption. “Discounted Value” means, with respect to each outstanding maturity and sub- series of the Series 2022C Bonds to be redeemed, the sum as determined by the Commission or the Calculation Agent of the amounts obtained by discounting all remaining scheduled payments of pri ncipal and interest (exclusive of interest accrued to the date of redemption) on such maturity from their respective scheduled payment dates to the applicable redemption date, at a yield (computed on a semi-annual basis, assuming a 360-day year consisting of twelve 30-day months) equal to the applicable Discount Yield.
With respect to the Series 2022C Bonds, “ Discount Yield” means, the Blended Treasury Yield determined by the Commission or the Calculation Agent with respect to the Series 2022C Bonds maturity to be redeemed, (i) plus _____ (__) basis points with respect to the Series 2022C Bonds maturing on October 1, ____, and (ii) plus _______ (__) basis points with respect to the Series 2022C Bonds maturing on October 1, ____. The Discount Yield will be ca lculated assuming semi -annual compounding based upon a 360-day year consisting of twelve 30-day months.
Mandatory Sinking Fund Redemption of Series 2022C Bonds . The Series 2022C Bonds maturing on October 1, ____ (the “2022C Term Bonds (____)”), are further subject to redemption prior to their stated maturity, and payable from the 2022C Sinking Fund Account, on each October 1, ____ 1 on and after October 1, ____, by lot within any such maturity if less than all of the 2022C Term Bonds (____) of such maturity are then being redeemed, upon payment of the principal amount thereof and accrued interest thereon to the date fixed for redemption, without premium.
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Redemption Date
(October 1) Principal Amount
$
____________________
*Maturity.
Redemption of Series 2022D Bonds
Optional Redemption of Series 2022D Bonds . The Series 2022D Bonds maturing on and after October 1, ____, are subject to redemption prior to their stated maturity, at the option of the Comm ission, from any source of available funds, as a whole or in part, on any date on or after ______ 1, ____, from such maturities or portions of maturities as are determined by the Commission and by lot within any one maturity, at a redemption price equal to 100% of the principal amount of the Series 2022D Bonds to be redeemed, plus accrued interest thereon to the date fixed for redemption, without premium.
Make-Whole Optional Redemption of Series 2022D Bonds . Before ______ 1, ____, the Series 2022D Bonds will be subject to redemption either in whole or in part, at the option of the Commission, at any time, at a redemption price equal to the greater of (i) 100% of the principal amount thereof or (ii) the Discounted Value thereof, plus in either case, accrued interest thereon to the date of redemption.
Discounted Value” means, with respect to each outstanding maturity and sub- series of the Series 2022D Bonds to be redeemed, the sum as determined by the Commission or the Calculation Agent of the amounts obtained by discounting all remaining scheduled payments of principal and interest (exclusive of interest accrued to the date of redemption) on such maturity from their respective scheduled payment dates to the applicable redemption date, at a yield (computed on a semi-annual basis, assuming a 360-day year consisting of twelve 30-day months) equal to the applicable Discount Yield.
With respect to the Series 2022D Bonds, “Discount Yield” means, the Blended Treasury Yield, as determined by the Commission or the Calculation Agent with respect to the Series 2022D Bonds maturity to be redeemed, (i) plus _____ (__) basis points with respect to the Series 2022D Bonds maturing in the years ___ and _____, (ii) plus _____ (___) basis points with respect to the Series 2022D Bonds maturing in the years _____ through _____, (iii) plus ___ (_____) basis points with respect to the Series 2022D Bonds maturing in the years _____ through _____, (iv) plus __ (_____) basis points with respect to the Series 2022D Bonds maturing in the ye ars _____ and _____, (v) plus _____ (_____) basis points with respect to the Series 2022D Bonds maturing in the years _____ through _____ and in _____, and (vi) plus _____ (_____) basis points with respect to the 2022D Bonds maturing in the year ____. The Discount S-I-5
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Yield will be calculated assuming semi -annual compounding based upon a 360 -day year consisting of twelve 30-day months.
Mandatory Sinking Fund Redemption of Series 2022D Bonds . The Series 2022D Bonds maturing on October 1, ____ (the “2022D Term Bonds (____)”), are further subject to redemption prior to their stated maturity, and payable from the 2022D Sinking Fund Account, on each October 1 on and after October 1, ____, in the principal amounts described below, by lot within any such maturity if less than all of the 2022D Term Bonds (____) of such maturity are then being redeemed, upon payment of the principal amount thereof and accrued interest thereon to the date fixed for redemption, without premium.]
Redemption Date
(October 1) Principal Amount
$
*
____________________
*Maturity.
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APPENDIX A
CITY CONTRACTING PROVISIONS
Each Underwriter shall comply with the following provisions of this Purchase Contract as if set forth in the text thereof. Capitalized terms used but not defined in this exhibit shall have the meanings given in the Purchase Contract.
1. N ondiscrimination; Penalties .
(a) Nondiscrimination in Contracts. Each Underwriter shall comply with the provisions of Chapters 12B and 12C of the San Francisco Administrative Code. Each Underwriter shall incorporate by reference in any subcontracts the provisions of Sections12B.2(a), 12B.2(c) - (k), and 12C.3 of the San Francisco Administrative Code and shall require any subcontractors to comply with such provisions. Each Underwriter is subject to the enforcement and penalty provisions in Chapters 12B and 12C.
(b) Nondiscrimination in the Provision of Employee Benefits. San Francisco Administrative Code 12B.2. Each Underwriter does not as of the date of this Purchase Contract, and will not during the term of this Purchase Contract, in any of its operations in San Francisco, on real property owned by San Francisco, or where work is being performed for the City elsewhere in the United States, discriminate in the provision of employee benefits between employees with domestic partners and employees with spouses and/or between the domestic partners and spouses of such employees, subject to the conditions set forth in San Francisco Administrative Code Section12B.2.
(c) Condition to Contract . As a condition to the Purchase Contract, each Underwriter shall execute the “Chapter 12B Declaration: Nondiscrimination in Contracts and Benefits” form (form HRC -12B-101) with supporting documentation and secure the approval of the form by the San Francisco Human Rights Commission.
2. M
acBride Principles —Northern Ireland. The provisions of San Francisco Administrative Code §12F are incorporated by this reference and made part of this Purchase Contract. By entering into this Purchase Contract, each Underwriter confirms that it has read and understood that the City urges companies doing business in Northern Ireland to resolve employment inequities and to abide by the MacBride Principles, and urges San Francisco companies to do business with corporations that abide by the MacBride Principles.
3. T
ropical Hardwood and Virgin Redwood Ban. Under San Francisco Environment Code Section 804(b), the City urges each Underwriter not to import, purchase, obtain, or use for any purpose, any tropical hardwood, tropical hardwood wood product, virgin redwood or virgin redwood wood product.
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4. Alcohol and Drug- Free Workplace. The City reserves the right to deny access to, or require each Underwriter to remove from, City facilities personnel of such Underwriter who the City has reasonable grounds to believe has engaged in alcohol abuse or illegal drug activity which in any way impairs the City’s ability to maintain safe work facilities or to protect the health and well-being of City employees and the general public. The City shall have the right of final approval for the entry or re-entry of any such person previously denied access to, or removed from, City facilities. Illegal drug activity means possessing, furnishing, selling, offering, purchasing, using or being under the influence of illegal drugs or other controlled substances for which the individual lacks a valid prescription. Alcohol abuse means possessing, furnishing, selling, offering, or using alcoholic beverages, or being under the influence of alcohol.
5. C ompliance with Americans with Disabilities Act. Each Underwriter shall provide the services specified in the Purchase Contract in a manner that complies with the Americans with Disabilities Act (ADA), including but not limited to Title II’s program access requirements, and all other applicable federal, state and local disability rights legislation.
6. S unshine Ordinance. Each Underwriter acknowledges that this Purchase Contract and all records related to its formation, such Underwriter’s performance of services provided under the Purchase Contract, and the City’s payment are subject to the Californi a Public Records Act, (California Government Code §6250 et. seq.), and the San Francisco Sunshine Ordinance, (San Francisco Administrative Code Chapter 67). Such records are subject to public inspection and copying unless exempt from disclosure under feder al, state or local law.
7. L
imitations on Contributions . By executing this Purchase Contract, each Underwriter acknowledges its obligations under section 1.126 of the City’s Campaign and Governmental Conduct Code, which prohibits any person who contracts with, or is seeking a contract with, any department of the City for the rendition of personal services, for the furnishing of any material, supplies or equipment, for the sale or lease of any land or building for a grant, loan or loan guarantee, or for a development agreement, from making any campaign contribution to (1) a City elected official if the contract must be approved by that official, a board on which that official serves, or the board of a state agency on which an appointee of that offi cial serves, (2) a candidate for that City elective office held by such individual, or (3) a committee controlled by such elected official or a candidate for that office, at any time from the submission or a proposal for the contract until the later of either the termination of negotiations for such contract or twelve months after the date the City approves the contract. The prohibition on contributions applies to each prospective party to the contract; each member of each Underwriter’s board of directors; each Underwriter’s chairperson, chief executive officer, chief financial officer and chief operating officer; any person with an ownership interest of more than 10 percent in such Underwriter; any subcontractor listed in the bid or contract; and any committee that is sponsored or controlled by such Underwriter. Each Underwriter certifies that it has informed each such person of the limitation on contributions imposed by Section 1.126 by the time it submitted a proposal for such contract and has provided the names of the persons required to be informed to the City department with whom
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it is contracting.
8. R equiring Minimum Compensation for Covered Employees . Each Underwriter shall pay covered emp loyees no less than the minimum compensation required by San Francisco Administrative Code Chapter 12P. Each Underwriter is subject to the enforcement and penalty provisions in Chapter 12P. By entering into this Purchase Contract, each Underwriter certifies that it is in compliance with Chapter 12P.
9. R equiring Health Benefits for Covered Employees. Each Underwriter shall comply with San Francisco Administrative Code Chapter 12Q. Each Underwriter shall choose and perform one of the Health Care Accountability options set forth in San Francisco Administrative Code Chapter 12Q.3. Each Underwriter is subject to the enforcement and penalty provisions in Chapter 12Q.
10. P
rohibition on Political Activity with City Funds . In performing the services provided under the Purchase Contract, each Underwriter shall comply with San Francisco Administrative Code Chapter 12G, which prohibits funds appropriated by the City for this Purchase Contract from being expended to participate in, support, or attempt to influe nce any political campaign for a candidate or for a ballot measure. Each Underwriter is subject to the enforcement and penalty provisions in Chapter 12G.
11. N
ondisclosure of Private, Proprietary or Confidential Information. If this Purchase Contract requires the City to disclose “Private Information” to an Underwriter within the meaning of San Francisco Administrative Code Chapter 12M, each Underwriter shall use such information consistent with the restrictions stated in Chapter 12M and in this Purchase Contract and only as necessary in performing the services provided under the Purchase Contract. Each Underwriter is subject to the enforcement and penalty provisions in Chapter 12M.
I
n the performance of services provided under the Purchase Contract, each Underwriter may have access to the City’s proprietary or confidential information, the disclosure of which to third parties may damage the City. If the City discloses proprietary or confidential information to an Underwriter, such information must be held by such Underwriter in confidence and used only in performing the Purchase Contract. Each Underwriter shall exercise the same standard of care to protect such information as a reasonably prudent contractor would use to protect its own proprietary or confidential information.
12. C
onsideration of Criminal History in Hiring and Employment Decisions . Each Underwriter agrees to comply fully with and be bound by all of the provisions of Chapter 12T, “City Contractor/Subcontractor Consideration of Criminal History in Hiring and Employment Decisions,” of the San Francisco Administrative Code (“Chapter 12T”), including the remedies provided, and implementing regulations, as may be amended from time to time. The provisions of Chapter 12T are incorporated by re ference and made a part of this Purchase Contract. The text of Chapter 12T is available on the web at http://sfgov.org/olse/fco. A partial
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listing of some of the Underwriters’ obligations under Chapter 12T is set forth in this Section.
Each Underwriter is required to comply with all of the applicable provisions of Chapter 12T, irrespective of the listing of obligations in this Section. Capitalized terms used in this Section and not defined in this Purchase Contract shall have the meanings assigned to such t erms in Chapter 12T.
The requirements of Chapter 12T shall only apply to an Underwriter’s operations to the extent those operations are in furtherance of the performance of this Purchase Contract, shall apply only to applicants and employees who would be or are performing work in furtherance of this Purchase Contract, and shall apply when the physical location of the employment or prospective employment of an individual is wholly or substantially within the City of San Francisco. Chapter 12T shall not apply when the application in a particular context would conflict with federal or state law or with a requirement of a government agency implementing federal or state law.
13. S
ubmitting False Claims; Monetary Penalties . The full text of San Francisco Administrative Code §§ 21.35, including the enforcement and penalty provisions, is incorporated into this Purchase Contract. Under San Francisco Administrative Code §21.35, any contractor, subcontractor or consultant who submits a false claim shall be liable to the City for the statutory penalties set forth in that section. A contractor, subcontractor or consultant will be deemed to have submitted a false claim to the City if the contractor, subcontractor or consultant: (a) knowingly presents or causes to be presented to an officer or employee of the City a false claim or request for payment or approval; (b) knowingly makes, uses, or causes to be made or used a false record or statement to get a false claim paid or approved by the City; (c) conspires to defraud the City by getting a false claim allowed or paid by the City; (d) knowingly makes, uses, or causes to be made or used a false record or statement to conceal, avoid, or decrease an obligation to pay or transmit money or property to the City; or (e) is a beneficiary of an inadvertent submission of a false claim to the City, subsequently discovers the falsity of the claim, and fails to disclose the false claim to the City within a reasonable time after discovery of the false claim.
14. C
onflict of Interest. By entering into the Purchase Contract, each Underwriter certifies that it does not know of any fact which constitutes a violation of Section 15.103 of the City’s Charter; Article III, Chapter 2 of City’s Campaign and Governmental Conduct Code; Title 9, Chapter 7 of the California Government Code (Section 87100 et seq.), or Title 1, Division 4, Chapter 1, Article 4 of the California Government Code (Section 1090 et seq.), and further agrees promptly to notify the City if it becomes aware of any such fact during the term of this Purchase Contract.
15. A
ssignment . The services provided under the Purchase Contract to be performed by each Underwriter are personal in character and neither this Purchase Contract nor any duties or obligations may be assigned or delegated by an Underwriter unless first approved by the City by written instrument executed and approved in the same manner as this Purchase Contract.
Any purported assignment made in violation of this provision shall be null and void.
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16. Food Service Waste Reduction Requirements. Each Underwriter shall comply with the Food Service Waste Reduction Ordinance, as set forth in San Francisco Environment Code Chapter 16, including but not limited to the provided remedies for noncompliance.
17. C ooperative Drafting. This Purchase Contract has been drafted through a cooperative effort of the City and the Underwriters, and all parties have had an opportunity to have the Purchase Contract reviewed and revised by legal counsel. No party shall be considered the drafter of this Purchase Contract, and no presumption or rule that an ambiguity shall be construed against the party drafting the clause shall apply to the interpretation or enforcement of this Purchase Contract.
18. S
ugar- Sweetened Beverage Prohibition. Each Underwriter agrees that it will not sell, provide, or otherwise distribute Sugar -Sweetened Beverages, as defined by San Francisco Administrative Code Chapter 101, as part of its performance of this Purchase Contract.
19. F irst Source Hiring Program . Each Underwriter must comply with all of the provisions of the First Source Hiring Program, Chapter 83 of the San Francisco Administrative Code, that apply to this Purchase Contract, and each Underwriter is subject to the enforcement and penalty provisions in Chapter 83.
20. Laws Incorporated by Reference. The full text of the laws listed in this Exhibit A, including enforcement and penalty provisions, are incorporated into this Purchase Contract by reference. The full text of the San Francisco Municipal Code provisions incorporated by reference in this Exhibit A are available at www.sfgov.org under “Open Gov.”
21. P
revailing Wages. Services to be performed by the Underwriter s under this Agreement may involve the performance of trade work covered by the provisions of Section
6.22(e) of the Administrative Code or Section 21C (collectively, “Covered Services”). The provisions of Section 6.22(e) and 21C of the Administrative Code are incorporated as provisions of this Agreement as if fully set forth herein and will apply to any Covered Services performed by each Underwriter.
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APPENDIX B
FORM OF CITY ATTORNEY OPINION
__________, 2022
Public Utilities Commission
of the City and County of San Francisco
San Francisco, California
Board of Supervisors
of the City and County of San Francisco
San Francisco, California
RE:
$_______ Public Utilities Commission of the City and County of San Francisco Wastewater Revenue Bonds, 2022 Series C and 2022 Series D Ladies and Gentlemen:
This office has acted as counsel to the Public Utilities Commission of the City and County of San Francisco (“Commission”) with respect to the issuance of its $_____ aggregate principal amount of Wastewater Revenue Bonds comprised of $______ aggregate principal amount of 2022 Series C (Refunding - Federally Taxable) (SSIP) (Green Bonds) and $______ aggregate principal amount of 2022 Series D (Refunding - Federally Taxable) (Non -SSIP) (collectively, the “Bonds”). The Bonds are being issued pursuant to the Constitution and the laws of the State of California, the Charter of the City and County of San Francisco (“City”), and a Fifteenth Supplemental Indenture, between the Commission and U.S. Bank Trust Company, National Association, as successor trustee (“Trustee”), dated as of _____ 1, 2022, supplementing the Original Indenture, dated as of January 1, 2003, between the Commission and the Trustee, as successor trustee, as amended and supplemented to date (collectively, the “Indenture”). All capitalized terms not otherwise defined herein shall have the meanings ascribed to such terms in the Indenture.
In connection therewith, the undersigned has examined such documents, certificates and instruments as the undersigned deemed necessary for the purposes of this opinion, including, but not limited to, the Indenture, the Purchase Contract, dated _____, 2022 (the “Purchase Contract”), by and between the Commission and Citigroup Global Markets I nc., as representative of the underwriters named therein, the Escrow Agreement, by and between the Commission and the Trustee, the Continuing Disclosure Certificate of the Commission, as executed and delivered on the date of delivery of the Bonds (“Continuing Disclosure Certificate”), Resolution No. 22-______ of the Commission adopted on ____, 2022 (“Commission Resolution”), Ordinance No. 173-20 of the Board of Supervisors of the City (the “Board of Supervisors”) passed by a two-thirds vote on September 29, 2020; and signed by the Mayor on October 1, 2020 (“City Ordinance”).
In reviewing the documents and matters referred to above, the undersigned has not undertaken to verify independently and has assumed the accuracy of the factual matters represented, war ranted or certified therein. The undersigned has examined the Charter of the City. The opinions expressed herein are based on an analysis of existing laws, regulations, rulings and court decisions and cover certain matters not directly addressed by such authorities.
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Such opinions may be affected by actions taken or omitted or events occurring after the date hereof. We have not undertaken to determine, or to inform any person, whether any such actions are taken or omitted or events do occur or any other matters come to our attention after the date hereof. We disclaim any obligation to update this opinion. We have assumed the genuineness of all documents and signatures presented to us (whether as originals or as copies) and the due and legal execution an d delivery thereof by, and validity against, any parties other than the Commission. In addition, we call attention to the fact that the rights and obligations under the Indenture, the Bonds and the Escrow Agreement and their enforceability may be subject to bankruptcy, insolvency, reorganization, arrangement, fraudulent conveyance, moratorium and other laws relating to or affecting creditors’ rights, to the application of equitable principles, to the exercise of judicial discretion in appropriate cases and to the limitations on legal remedies against cities and counties in the State of California. We express no opinion with respect to any indemnification, contribution, penalty, choice of law, choice of forum, choice of venue, waiver or severability provisions contained in the foregoing documents.
Based upon and subject to the foregoing, the undersigned is of the opinion that:
1. The Commission is duly organized and validly existing as a commission of the City under and pursuant to the Charter of the City.
2. The Commission Resolution and City Ordinance were duly passed at meetings of the Commission and the Board of Supervisors, respectively. The meetings were called and held pursuant to law, with all public notice required by law and at which a quorum was present and acting throughout. The Commission Resolution and City Ordinance are in full force and effect , as of the date hereof, and have not been modified, amended or rescinded since their approval date.
3. To the best of the undersigned’s knowledge, no action, suit, proceeding, inquiry or investigation, at law or in equity before or by any court, governmental agency, public board or body, is pending or threatened against the Commission to restrain or enjoin the issuance of the Bonds, or in any way contesting the validity of the Indenture, Continuing Disclosure Certificate, the Escrow Agreement, the Purchase Contract, the City Ordinance or the City Resolution.
4. There is no litigation pending, with service of process having been accomplished, questioning the existence of the City or the Commission, or contesting the power of the Commission to fix water rates and charges, or in any way contesting or affecting (i) the proceedings under which the Bonds are to be issued, (ii) the validity of the Bonds or the validity of the Indenture, (iii) the pledge of Revenues by the Commission under the Indenture or (iv) the title to the office of the present members of the Board of Supervisors or the Commission; nor are there suits or claims against the City or the Commission which would materially impair the ability of the Commission to pay principal or interest on the Bonds when due.
5. The Indenture, Continuing Disclosure Certificate, the Escrow Agreement and the Purchase Contract have been duly authorized, executed and delivered by the Commission, and constitute valid and binding agreements of the Commission enforceable in accordance with their respective terms.
This letter is furnished for the benefit of the above -addressed parties, and is not intended to, and shall not, be relied upon by anyone other than the above -addressees. This letter shall not be circulated, quoted or otherwise referred to or relied upon for any other purpose or by any other person. The City Attorney does not undertake any obligation to update t his letter. Other than the Commission and the City, no attorney -client relationship has existed or exists between this office and any other party.
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Very truly yours,
SYCR Draft of
3/16/2022
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$________
PUBLIC UTILITIES COMMISSION OF THE
CITY AND COUNTY OF SAN FRANCISCO
WASTEWATER REVENUE BONDS
$_________
2022 Series A
(Refunding)
(SSIP) (Green Bonds)
$_________
2022 Series B
(Refunding) (Non-SSIP)
FORWARD DELIVERY BOND PURCHASE CONTRACT
_____, 2022
Public Utilities Commission of the
City and County of San Francisco
525 Golden Gate Avenue, 13th Floor
San Francisco, CA 94102
Ladies and Gentlemen:
The undersigned Citigroup Global Markets Inc., on its own behalf and as representative (the “Representative”) of J.P. Morgan Securities LLC, Barclays Capital Inc., BofA Securities, Inc. and Goldman Sachs & Co. LLC ( collectively, the “ Underwriters”), offers to enter into this Forward Delivery Bond Purchase Contract (this “ Forward Delivery Purchase Contract ”) with the Public Utilities Commission of the City and County of San Francisco (the “Commission” ), which will be binding upon the Commission and the Underwriters upon acceptance hereof by the Commission. This offer is made subject to the acceptance by the Commission by its execution of this Forward Delivery Purchase Contract and its delivery to the Representative on or before 11:59 p.m., California time, on the date hereof and, if not so accepted, will be subject to withdrawal by the Representative upon written notice delivered to the Commission at any time prior to the acceptance of this Forward Delivery Purchase Contract by the Commission. If the Representative withdraws this offer, or the Underwriters’ obligation to purchase the Bonds (as hereinafter defined) is otherwise terminated pursuant to Section 10(d) or Section 12 hereof, then and in each such case the Commission shall be without any further obligation to the Underwriters, including the payment of any costs set forth under Section 14(a) hereof, and the Commission shall be free to sell the Bonds to any other party.
The Representative represents that it has been duly authorized by the other Underwriters to act hereunder on its behalf and has full authority to take such action as it may deem advisable in respect to all matters pertaining to this Forward Delivery Purchase Contract and that the Representative has been duly authorized to execute this Forward Delivery Purchase Contract .
Any action taken under this Forward Delivery Purchase Contract by the Representative will be binding upon all of the Underwriters.
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Capitalized terms not otherwise defined herein shall have the meanings set forth in the Indenture, dated as of January 1, 2003 (the “Master Indenture”), between the Commission and U.S. Bank Trust Company, National Association, as successor trustee (the “Trustee”), as supplemented and amended to date and as further supplemented by a Fourteenth Supplemental Indenture, dated as of [___ 1] , 2022 ( the “Fourteenth Supplemental Indenture ”), between the Commission and the Trustee (the Master Indenture, as supplemented, being herein referred to as the “Indenture”).
Section 1. Purchase and Sale. Upon the terms and conditions and upon the basis of the representations set forth herein, the Underwriters agree to purchase from the Commission, and the Commission hereby agrees to sell and deliver to, or for the account of, the Underwriters, all (but not less than all) of the $________ aggregate principal amount of Public Utilities Commission of the City and County of San Francisco Wastewater Revenue Bonds , 2022 Series A (Refunding) (SSIP) (Green Bonds) (the “ Series 2022A Bonds ”) and $__________ aggregate principal amount of Public Utilities Commission of the City and County of San Francisco Wastewater Revenue Bonds, 2022 Series B (Refunding) (Non-SSIP) (the “Series 2022B Bonds” and together with the Series 2022A Bonds, the “Bonds”).
The purchase price for the Bonds shall be $_______ (comprised of the purchase price of the Series 2022A Bonds in the amount of $________, representing the principal amount of the Series 2022A Bonds, plus an original issue premium of $_____, less an Underwriters’ discount in the amount of $_________, and the purchase price of the Series 2022B Bonds in the amount of $_______, representing the principal amount of the Series 2022B Bonds, plus an original issue premium of $_____, less an Underwriters’ discount of $___________).
The Bonds shall be d
ated the Settlement Date (as hereinafter defined) and shall have the maturities in principal amounts and bear interest at the rates per annum and have the yields all as set forth on Schedule I attached hereto. The Bonds shall be subject to optional and mandatory sinking fund redemption prior to maturity as shown on Schedule I . The Bonds shall be substantially in the form described in, and shall be issued and secured under and pursuant to, the Indenture. The Bonds shall be as otherwise described in the Official Statement (as hereinafter defined).
Section 2. A
uthorization for the Bonds; Purpose of Issue . The Commission has the authority to issue the Bonds under Sections 9.109 of the Charter (the “ Charter”) of the City and County of San Francisco (the “ City”), and pursuant to Ordinance No. 173- 20 of the Board of Supervisors of the City (the “Board of Supervisors”) passed by two-thirds vote on September 29, 2020 (the “Ordinance”), and Resolution No. 22-____, adopted by the Commission on _______, 2022 (the “Commission Resolution”).
The Series 2022A Bonds are being issued to (i) refund all or a portion of the Commission’s outstanding Wastewater Revenue Bo nds, 2013 Series A Bonds (the “2013A Bonds”) and (ii) pay the costs of issuance of the Series 2022A Bonds. The 2022B Bonds are being issued to (i) refund all or a portion of the Commission’s outstanding Wastewater Revenue Bonds, 2013 Series B Bonds (the “2013B Bonds” and, together with the 2013A Bonds, the “2013 Bonds”) and (ii) pay the costs of issuance of the 2022B Bonds. -3-
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Section 3. Public Offering. It shall be a condition to the obligations of the Underwriters to purchase, accept delivery of and pay for the Bonds that the entire principal amount of the Bonds be sold and delivered by the Commission to the Underwriters. On or prior to the Closing Date (as hereinafter defined), the Representative will provide the Commission with information regarding the reoffering prices and yields on the Bonds, as further described in Section 4 hereof, for purposes of determining the yield on the Bonds under Section 148 of the Internal Revenue Code of 1986, as amended. The Underwriters will provide, consistent with the requirements of the Municipal Securities Rulemaking Boa rd (the “ MSRB”) Rule G -32, for the delivery of a copy of the Official Statement to each customer who purchases a Bond during the Underwriting Period (as hereinafter defined). The Underwriters further agree that it will comply with applicable laws and regulations, including without limitation Rule 15c2-12 and MSRB Rule G-17, in connection with the offering and sale of the Bonds. Subsequent to the initial public offering, the public offering prices of the Bonds may change as determined by the Underwriters to be necessary in connection with the marketing of the Bonds.
Section 4. Establishment of Issue Price of the Bonds.
(a) The Representative, on behalf of the Underwriters, agrees to assist the Commission in establishing the issue price of the B onds and shall execute and deliver to the Commission at Closing (as hereinafter de fined) an “issue price” or similar certificate, together with the supporting pricing wires or equivalent communications, substantially in the form attached hereto as Appendix A , with such modifications as may be appropriate or necessary, in the reasonable judgment of the Representative, the Commission and Co-Bond Counsel ( as hereinafter defined), to accurately reflect, as applicable, the sales price or prices or the initial offering price or prices to the public of the Bonds . All actions to be taken by the Commission under this Section 4 to establish the issue price of the Bonds may be taken on behalf of the Commission by the Commission ’s Co -Municipal Advisors ( as hereinafter de fined) and any notice or report to be provided to the Commission may be provided to the Commission’s Co- Municipal Advisors.
(b) E
xcept as otherwise set forth in Appendix A attached hereto, the Commission will treat the first price at which 10% of each maturity of the Bonds (the “ 10% test”) is sold to the public as the issue price of that maturity . At or promptly after the execution of this Forward Delivery Purchase Contract, the Representative shall report to the Commission the price or prices at which the Underwriters have sold to the public each maturity of the Bonds. For purposes of this Section, if Bonds mature on the same date but have different interest rates, each separate CUSIP number within that maturity will be treated as a separate maturity of the Bonds. (c) The Representative confirms that the Underwriters have offered such maturities of t
he Bonds to the public on or before the date of this Forward Delivery Purchase Contract at the offering price or prices (the “ initial offering price ”), or at the corresponding yield or yields, set forth in Appendix A attached hereto, except as otherwise set forth therein. Appendix A also sets forth, as of the date of this Forward Delivery Purchase Contract, the maturities, if any, of the Bonds for which the 10% test has not been satisfied and for which t he Commission and the Representative, on behalf of the Underwriters, agree (i) the Representative shall retain the unsold Bonds of each mat urity for which the 10% test has not been satisfied and will not allocate any such Bonds to any other Underwriter and (ii) the restrictions set forth in the next sentence shall -4-
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apply, which will allow the Commission to treat the initial offering price to the public of each such maturity as of the sale date as the issue price of that maturity (the “hold-the- offering-price rule”). So long as the hold-the- offering-price rule remains applicable to any maturity of the Bonds, the Representative will neither offer nor sell unsold Bonds of such maturity to any person at a price that is higher than the initial offering price to the public during the period starting on the sale date and ending on the earlier of the following:
(i) the close of the fifth (5
th) business day after the sale date; or
(ii) the date on which the Underwriters have sold at least 10% of that maturity of the Bonds to the public at a price that is no higher than the initial offering price to the public.
The Representative shall advise the Commission promptly after the close of the fifth (5th) business day after the sale date whether the Representative has sold 10% of that maturity of the Bonds to the public at a price that is no higher than the initial offering price to the public. (d) The Representative confirms that:
(i) any agreement among underwriters, any selling group agreement and each third-party distribution agreement (to which the Representative is a party) relating to the initial sale of the Bonds to the public, together with the related pricing wires, contains or will contain language obligating each U nderwriter, each dealer who is a member of the selling group and each broker -dealer that is a party to such third -party distribution agreement, as applicable:
(A) (i) to report the prices at which it sells to the public the unsold Bonds of each maturity allocated to it, whether or not the Settlement Date has occurred, until either all Bonds of that maturity allocated to it have been sold or it is notified by the Represe ntative that the 10% test has been satisfied as to the Bonds of that maturity, provided that, the reporting obligation after the Settlement Date may be at reasonable periodic intervals or otherwise upon request of the Representative, and (ii) to comply wit h the hold-the- offering-price rule, if applicable, if and for so long as directed by the Representative and as set forth in the related pricing wires,
(B) to promptly notify the Representative of any sales of Bonds that, to its knowledge, are made to a purchaser who is a related party to an underwriter participating in the initial sale of the Bonds to the public (each such term being used as defined below),
(C) to acknowledge that, unless otherwise advised by the underwriter, dealer or broker-dealer, the Representative shall assume that each order submitted by the underwriter, dealer or broker-dealer is a sale to the public. (ii) any agreement among underwriters or selling group agreement relating to the initial sale of the Bonds to the public, together with the related pricing wires, contains or will contain language obligating each underwriter or dealer that is a party to a third- -5-
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party distribution agreement to be employed in connection with the initial sale of the Bonds to the public to require each broker -dealer that is a party to such third -party distribution agreement to (A) report the prices at which it sells to the public the unsold Bonds of each maturity allocated to it, whether or not the Settlement Date has occurred, until either all Bonds of that maturity allocated to it have been sold or it is notified by the Representative or such underwriter or dealer that the 10% test has been satisfied as to the Bonds of that maturity, provided that, the reporting obligation after the Settlement Date may be at reasonable periodic intervals or otherwise upon request of the Representative or such underwriter or dealer, and (B) comply with the hold-the- offering-price rule, if applicable, if and for so long as directed by the Representative or the underwriter or the dealer and as set forth in the related pricing wires.
(e) The Commission acknowledges that, in making the representations set forth in this subsection, the Representative will rely on (i) the agreement of each underwriter to comply with the requirements for establishing the issue price of the B onds, including, but not limited to, its agreement to comply with the hold -the-offering-price rule, if applicable to the B onds, as set forth in an agreement among underwriters and the relate d pricing wires, (ii) in the event a selling group has been created in connection with the initial sale of the B onds to the public, the agreement of each dealer who is a member of the selling group to comply with the requirements for establishing issue pri ce of the B onds, including, but not limited to, its agreement to comply with the hold-the- offering-price rule, if applicable to the B onds, as set forth in a selling group agreement and the related pricing wires, and (iii) in the event that an underwriter or dealer who is a member of the selling group is a party to a third- party distribution agreement that was employed in connection with the initial sale of the B onds to the public, the agreement of each broker-dealer that is a party to such agreement to comp ly with the requirements for establishing the issue price of the Bonds, including, but not limited to, its agreement to comply with the hold- the-offering-price rule, if applicable to the B onds, as set forth in the third- party distribution agreement and the related pricing wires. The Commission further acknowledges that each underwriter shall be solely liable for its failure to comply with its agreement to adhere to the requirements for establishing issue price of the B onds, including, but not limited to, i ts agreement to comply with the hold-the-offering-price rule, if applicable to the Bonds, and that no underwriter shall be liable for the failure of any other underwriter, or of any dealer who is a member of a selling group, or of any broker -dealer that is a party to a third- party distribution agreement, to comply with its corresponding agreement to comply with the requirements for establishing the issue price of the B onds, including, but not limited to, its agreement to comply with the hold-the-offering-price rule, if applicable to the Bonds. (f) The Underwriters acknowledge that sales of any B onds to any person that is a related party to an underwriter participating in the initial sale of the B onds to the public (each such term being used as defined below) shall not constitute sales to the public for purposes of this section. Further, for purposes of this section:
(i) “public” means any person other than an underwriter or a related party, (ii) “underwriter” means (A) any person that agrees pursuant to a written contract with the Commission (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the public and (B) any person -6-
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that agrees pursuant to a written contract directly or indirectly with a person described in clause (A) to participate in the initial sale of the B onds to the public (including a member of a selling group or a party to a third- party distribution agreement participating in the initial sale of the Bonds to the public),
(iii) a purchaser of any of t he Bonds is a “ related party” to an underwriter if the underwriter and the purchaser are subject, directly or indirectly, to (A) more than 50% common ownership of the voting power or the total value of their stock, if both entities are corporations (including direct ownership by one corporation of another), (B) more than 50% common ownership of their capital interests or profits interests, if both entities are partnerships (including direct ownership by one partnership of another), or (C) more than 50% common ownership of the value of the outstanding stock of the corporation or the capital interests or profit interests of the partnership, as applicable, if one entity is a corporation and the other entity is a partnership (including direct ownership of the applicable stock or interests by one entity of the other), and (iv) “sale date” means the date of execution of this Forward Delivery Purchase Contract by all parties.
Section 5. Delivery of Official Statement.
(a) Prior to the date hereof, the Commission has provided to the Underwriters for review a form of the preliminary official statement relating to the Bonds dated ________, 2022 (including the cover page and appendices thereto (the “Preliminary Official Statement”), which, as of its date, a representative of the Commission on behalf of the Commission deemed final for purposes of Rule 15c2-12 promulgated under the Securities Exchange Act of 1934 (“Rule 15c2-12”), except for certain information permitted to be omitted ther efrom by Rule 15c2-12. By its acceptance of this offer, the Commission hereby ratifies and consents to the use and distribution by the Underwriters of the Preliminary Official Statement in connection with the public offering and sale of the Bonds, and the Commission has authorized the delivery of a final official statement relating to the Bonds dated the date hereof (both in print or electronic form) which will consist of the Preliminary Official Statement and all information previously permitted to have been omitted by Rule 15c2-12.
The Commission hereby acknowledges that the Preliminary Official Statement has been made available to investors on the internet at ImageMasters’ website at www.MuniOS.com. The Commission hereby agrees to deliver or cause to be delivered to the Underwriters within seven (7) Business Days of the date hereof or three (3) Business Days prior to the Closing Date ( as hereinafter defined) and in sufficient time to accompany any orders or confirmations from the Underwriters that request payment from any customers, not more than one hundred (100) copies of the final official statement (including all information permitted to be omitted by Rule 15c2-12 and any amendments or supplements to such official statement as have been approved by the Commission and the Representative) (the “Official Statement” ) to enable the Underwriters to comply with the rules of the Securities and Exchange Commission (the “ SEC”) and the MSRB.
The Commission hereby approves of the use and distribution by the Underwriters of the Official Statement in connection with the offer and sale of the Bonds. At the time of or prior to the Closing Date (as hereinafter de fined), the Representative shall file a copy of the Official -7-
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Statement with the MSRB or its designee (inc luding the MSRB’s Electronic Municipal Market Access system (“EMMA”)) or with any other repository approved from time to time by the SEC (either in addition to or in lieu of the filings referred to above). (b) Notwithstanding any prior amendment or supplements to the Official Statement made pursuant to Section 8(c) of this Forward Delivery Purchase Contract , the Commission, in cooperation with the Underwriters, shall prepare an updated Official Statement dated a date not more than twenty-five (25) nor less than ten (10) days prior to Settlement (both dates inclusive) relating to the Bonds (the “ Updated Official Statement ”) which, as of such date, will be correct and complete in all material respects and will not contain any untrue statement of a ma terial fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. Promptly following its preparation, the Commission shall furnish to the Representative the Updated Official Statement in a sufficient number of printed, conformed copies to permit the Underwriters (as the Commission shall be informed by the Underwriters) to comply with Rule 15c2- 12 and other applicable rules of the SEC and the MSRB as described in subsection ( a) of this Section . The Commission hereby approves of the use and distribution by the Underwriters of the Updated Official Statement. (c) If a change to the Official Statement referenced in Section 8(c) below occurs subsequent to the Closing Date, the Commission, shall deliver , or cause the delivery of, to the Underwriters as soon as practicable thereafter, letters to the effect of the letter delivered pursuant to Section 10(e)(8) hereof and certificates to the effect of the representation provided in Section 8(b) hereof as the Representative may reasonably require to evidence the truth and accuracy of any corrected information.
(d) The Commission will deliver the Continuing Disclosure Certificate substantially in the form set forth in the Preliminary Official Statement (the “Continuing Disclosure Certificate”) on the Settlement Date. The form of the Continuing Disclosure Certificate will also be set forth in the Official Statement.
Section 6. The Closing. At ______ a.m. , California time, on _________, 2022 or at such other time or on such other date as the Commission and the Representative may agree (the “Closing Date”), the certificates, opinions and other documents required by Section 10(d) below shall be executed and delivered (all of the foregoing actions are herein referred to collectively as the “Closing”). The Closing shall take place at the offices of Kutak Rock LLP (together with Curls Bartling P.C. (“ Co-Bond Counsel”), in [San Francisco, California,] or another place to be mutually agreed upon by the Commission and the Representative. Assuming the Closing is completed in accordance with the provisions of this Forward Delivery Purchase Contract then, subject to the provisions of this Forward Delivery Purchase Contract, the Underwrit ers shall be obligated to purchase the Bonds and pay the purchase price therefor set forth in Section 1 (and the Commission shall be obligated to issue and deliver such Bonds) at the Settlement.
Section 7. The Settlement. At ______ a.m., California time, on _________, 2022 or at such other time or on such other date as the Commission and the Representative may agree (the “Settlement Date”), the Commission shall deliver, or cause to be delivered to or for the account of the Underwriters, through the Fast Automated Sec urities Transfer (“FAST”) delivery system of The Depository Trust Company (“DTC”), the Bonds in book -entry eligible form, duly -8-
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executed and authenticated, and registered in the name of Cede & Co., as nominee of DTC.
Concurrently with the delivery of the B onds to the Representative, the Commission will deliver the documents hereinafter mentioned at the offices of Kutak Rock LLP, in [San Francisco, California,] or another place to be mutually agreed upon by the Commission and the Representative. The Underwr iters shall accept such delivery and pay the purchase price for the Bonds set forth in Section 1 by federal funds wire transfer in immediately available funds to the order of the Trustee for the account of the Commission. This payment for, and delivery of, the Bonds, together with the delivery of the certificates, opinions and other documents required by Section 11, is herein called the “Settlement .” The Representative shall order CUSIP identification numbers and the Commission shall cause such CUSIP identification numbers to be printed on the Bonds; provided, that neither the failure to print such number on any Bond nor any error with respect thereto shall constitute cause for a failure or refusal by the Underwriters to accept the Bonds.
Section 8. Representations, Warranties, and Agreements of the Commission . The Commission represents, warrants and agrees with the Underwriters as follows:
(a) Due Organization, Existence and Authority . The Commission is a duly constituted department of the City and County of San Francisco duly organized and validly existing pursuant to its Charter and the Constitution and laws of the State, with full authority to:
(i) adopt the Commission Resolution; (ii) execute and deliver the Master Indenture, the Fourteenth Supplemental Indenture , the Escrow Agreement, dated as of _____, 2022 (the “Escrow Agreement”), by and between the Commission and U.S. Bank Trust Company, National Association, as escrow agent (the “Escrow Agent”), the Continuing Disclosure Certificate and this Forward Delivery Purchase Contract ; (iii) approve the Official Statement and the Updated Official Statement and authorize the distribution thereof by the Underwriters; and (iv) sell and deliver the Bonds to the Underwriters as provided herein. All approvals and consents which are required for the due authorization of, which would constitute a condition precedent to, or absence of which would materially adversely affect the due performance by the Commission of, its respective obligations under the Bonds, this Forward Delivery Purchase Contract , the Escrow Agreement and the Indenture have been duly obtained or when required for future performance are expected to be obtained, except for approvals, consents and orders as may be required under the Blue Sky or securities laws of any state in connection with the offering and sale of the Bonds. (b) Accuracy and Completeness of the Preliminary Official Statement, Official Statement and Updated Official Statement . The information in the Preliminary Official Statement, as supplemented and amended through the date hereof was, and such information in the Official Statement, as of its date and at all times subsequent thereto up to and including the date of the Closing, will be, and such information in the Updated Official Statement, as of its date and as of the Settlement D ate, will be true and correct in all material respects, contains and will contain no misstatement of any material fact, and did not and will not omit any statement and information that is necessary to make the statements and information contained therein, in the light of the circumstances under which such statements were made, not misleading in any material respect, excluding in each case any information contained in the Preliminary Official Statement, the Official Statement or Updated Official Statement re lating to (i) the offering prices, interest rates, selling compensation, aggregate principal amount, principal amount per maturity, delivery dates, or other terms of the Bonds depending on such matters, (ii) DTC and -9-
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the book- entry only system and Euroclear Bank S.A./N.V. Clearstream Banking SA’s global clearance procedures , (iii) any CUSIP (and ISIN, Common Codes or other identification numbers, if applicable) numbers and (iv) information provided by the Underwriters for inclusion in the Preliminary Official Statement, the Official Statement or Updated Official Statement, including without limitation information regarding offering restrictions in certain jurisdictions under the caption “INFORMATION CONCERING OFFERING RESTRICTIONS IN CERTAIN JURISDICTIONS OUT SIDE OF THE UNITED STATES ” and information regarding the prices and yields of the Bonds and under the caption “UNDERWRITING.” (c) Amendment of Official Statement. If, between the date hereof and the date on which an Updated Official Statement is delivered to the Underwriters pursuant to Section 5(b) hereof, an event occurs or facts or conditions become known of which the Commission has knowledge, which in the reasonable opinion of Disclosure Counsel or the City Attorney might or would cause the information in the Official Statement, as then supplemented or amended, to contain any untrue statement of a material fact or to omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, the Commission will notify the Representative, and if in the reasonable opinion of the Representative or the Commission, such event, fact or condition requires the preparation and publication of a supplement or amendment to the Official Statement, the Commission will amend or supplement the Official Statement in a form and in a manner reasonably approved by the Representative and the Commission, provided all expenses incurred in connection with preparing an amendment or supplement to the Official Statement will be paid by the Commission. (d) Amendment of Updated Official Statement. Until the earlier of (i) ninety (90) days after the End of the Underwriting Period (as defined below) or (ii) the time when the Updated Official Statement, as applicable, is available to any person on EMMA, but in no case less than twenty-five (25) days following the End of t he Underwriting Period, if a n event occurs or facts or conditions become known of which the Commission has knowledge, which in the reasonable opinion of Disclosure Counsel or the City Attorney might or would cause the information in the Official Statement, as then supplemented or amended, to contain any untrue statement of a material fact or to omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, the Commission will notify the Representative, and if in the reasonable opinion of the Representative or the Commission, such event, fact or condition requires the preparation and publication of a supplement or amendment to the Updated Official Statement, the Commission will amend or supplement the Updated Official Statement in a form and in a manner reasonably approved by the Representative and the Commission, provided all expenses incurred in connection with preparing an amendment or supplement to the Updated Official Statement will be paid by the Commission. As used herein and for the purposes of the foregoing, the term “End of the Underwriting Period” for the Bonds shall refer to the Settlement, unless the Commission shall have been notified in writing to the contrary by the Representative on or prior to the Settlement, but in any e vent not later than the date twenty- five (25) days following the Settlement. For the purposes of this subsection, the Commission will furnish such information as the Underwriters may from time to time reasonably request in writing prior to the End of the Underwriting Period.
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(e) No Breach or Default. The Commission is not in breach of or default under any applicable constitutional provision, law or administrative regulation of the State of California or the United States, or any agency or department of either, or any applicable judgment or decree or any loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the Commission is a party or to which the Commission or any of its properties or other assets is otherwise subject, and no event has occurred and is continuing which, with the passage of time or the giving of notice, or both, would constitute a default or event of default under any such instrument, in any such case to the extent that the same would have a material and adverse effect upon the business or properties or financial condition of the Commission or the issuance of the Bonds. As of the time of acceptance hereof and as of the Closing Date or the Settlement Date, as applicable, and except as otherwise disclosed in the Official Statement or the Updated Official Statement, as applicable , neither the execution nor the delivery by the Commission of the Indenture, the Escrow Agreement, the Continuing Disclosure Certificate or this Forward Delivery Purchase Contract , the adoption of the Commission Resolution, or the compliance by the Commission with such documents or authorizations, conflicts with or constitutes a material breach of, or default under, any applicable law or administrative regulation of the State or the United States, or any other statute or administrative rule or regulation, judgment, decree, order, license, permit, agreement or instrument to which the Commission is subject, which breach, default or conflict would have a material adverse effect on the ability of the Commission to pay the Bonds or perform its obligations under the Indenture, the Escrow Agreement, the Continuing Disclosure Certificate or this Forward Delivery Purchase Contract. (f) No Other Bond Issues or Debt . Other than the Commission’s Wastewater Revenue Bonds, Series 2022C (Refunding - Federally Taxable) (SSIP) (Green Bonds) and the Commission’s Public Utilities Commission of the City and County of San Francisco Wastewater Revenue Bonds, Series 2022D (Refunding - Federally Taxable) (Non-SSIP) or commercial paper notes, between the time of acceptance hereof and the Settlement Date, the Commission will not, without prior written notice to the Representative, issue any bonds or securities or incur any other indebtedness secured by the Revenues.
(g) No Litigation. As of the date hereof and as of the Closing Date or the Settlement Date, as applicable, and except as disclosed in the Official Statement or the Updated Official Statement, as applicable, there is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, regulatory agency, public board or body, pending or, to the knowledge of the Commission, threatened against the Commission: (i) affecting the existence of the Commission or the titles of its officers to their respective offices; (ii) seeking to restrain or to enjoin the sale or delivery of the Bonds or the application of the proceeds therefrom in accordance with the Indenture; (iii) in any way contesting or affecting the validity or enforceability of the Bonds, the Indenture, the Escrow Agreement, the Continuing Disclosure Certificate, this Forward Delivery Purchase Contract or any action of the Commission authorizing the issuance, execution or delivery thereof; (iv) in any way contesting the completeness or accuracy of the Official Statement or any amendment or supplement thereto; or (v) contesting the powers of the Commission with respect to the Bonds or any action of the Commission authorizing the issuance, execution or delivery thereof, nor to the knowledge of the Commission, as evidenced by the representative of the Commission signing this Forward Delivery Purchase Contract, is there any basis therefor. As of the date hereof and as of the Closing Date or the Settlement Date, as applicable, and except as disclosed in the Official -11-
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Statement or the Updated Official Statement, as applicable, there is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, regulatory agency, public board or body, pending or, to the knowledge of the Commission, threatened against the Commission in which a final adverse decision would materially and adversely affect the operations of the Wastewater Enterprise, Net Revenues or the consummation of the transactions contemplated by this Forward Delivery Purchase Contract or contesting in any way the completeness, accuracy or fairness of the Official Statement or the Updated Official Statement, as applicable.
(h) Further Cooperation; Blue Sky . The Commission will furnish such information, execute such instruments and take such other action in cooperation with the Underwriter s as the Underwriters may reasonably request in order to qualify the Bonds for offer and sale under the Blue Sky or other securities laws and regulations of such states and other jurisdictions of the United States as the Underwriter s may designate; provided, however, that the Commission will not be required to execute a special or general consent to service of process or qualify as a foreign corporation in connection with any such qualification in any jurisdiction. (i) Continuing Disclosur e. Based on a review of its previous undertakings and except as described in the Preliminary Official Statement, the Official Statement or the Updated Official Statement, during the past five years, the Commission has complied in all material respects with its prior continuing disclosure undertakings under Rule 15c2-12. (j) Valid and Binding Obligations . This Forward Delivery Purchase Contract, the Escrow Agreement , the Fourteenth Supplemental Indenture and the Continuing Disclosure Certificate, when executed and delivered by the other parties thereto, will have been duly authorized, executed and delivered and will constitute legal, valid and binding obligations of the Commission (except to the extent that such enforceability may be limited by bankruptcy, insolvency, reorganization and similar law affecting creditors rights generally and general principals of equity). The Bonds, when issued, delivered and paid for as provided herein and in the Indenture, will have been duly authorized, executed and issued and will constitute legal, valid and binding limited obligations of the Commission entitled to the benefits of the Indenture. (k) Financial Statements. No consent of KPMG LLP is required for inclusion of the independent auditors report with respect to the financial statements of the Commission for the years ended June 30, 2021 and June 30, 2020 in the Preliminary Official Statement, the Official Statement or the Updated Official Statement.
Section 9. Representations, Warranties and Agreements of the Underwriters. The Underwriters represent, warrant and agree with the Commission that:
(a) The Representative has been duly authorized to enter into this Forward Delivery Purchase Contract.
(b) The Underwriters shall comply with the San Francisco Business Tax Ordinance and shall, if not otherwise exempt from such ordinance, provide to the Commission a Business Tax Registration Certificate on or prior to the date hereof. -12-
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(c) The Underwriters shall comply with all SEC and MSRB rules applicable to the offering, sale and delivery of the Bonds to ultimate purchasers. (d) The Underwriters shall comply with the Commission’s policy and practice that the Commission shall not pay, and the Underwriters shall not pass through to the Commission, any fees that are assessed on the Underwriters as part of the Governmental Accounting Standards Board fee, as well as the MSRB Underwriting and Transaction Assessment, the SIFMA Municipal Assessment or any other industry related fees that are required to be paid solely by the Underwriters.
Section 10. Closing Conditions . The Underwriters have authorized the Representative to enter into this Forward Delivery Purchase Contract in reliance upon the representations, warranties and agreements herein and the performance by the Commission of its obligations hereunder, both as of the date hereof and as of the Closing Date. The obligations of the Underwriters under this Forward Delivery Purchase Contract are and shall be subject to the following conditions:
(a) Bring-Down Representation. The representations and warranties of the Commission contained herein shall be true, accurate and correct in all material respects at the date hereof, and on the Closing Date, as if made on the Closing Date. (b) Executed Documents and Performance Thereunder . At the time of the Closing:
(i) the Indenture, as amended to the Closing Date, this Forward Delivery Purchase Contract , and the Official Statement shall be in full force and effect, and shall not have been amended, modified or supplemented except with the consent of the Representative (which consent will not be unreasonably withheld); and (ii) the Commission shall perform or have performed all of its obligations required under or specified in this Forward Delivery Purchase Contract , the Official Statement and the Indenture to be performed prior to the Closing. (c) No Default . At the time of the Closing, no default shall have occurred or be existing under the Indenture or this Forward Delivery Purchase Contract. (d) Termination Rights on and P rior to Closing . T he Representative may terminate this Forward Delivery Purchase Contract by notification in writing to the Commission from the Representative, if, at any time on or prior to the Closing, any of the following occurs and, as a result of the occurrence of such an event, the marketability of the Bonds or the market price thereof, or the ability of the Underwriters to enforce contracts for the sale , at the contemplated offering prices, of the Bonds, in the reasonable opinion of the Representative, after consultation with the Commission, would be materially adversely affected:
(i) any event shall occur which makes untrue any statement or results in an omission to state a material fact necessary to make the statements in the Official Statement, in the light of the circumstances under which they were made, not misleading and the Commission fails to amend or supplement the Official Statement pursuant to Section 8(c) hereof or the effect of the amendment or supplement, in the reasonable judgment of the Representative, would materially adversely affect the mar ket for the -13-
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Bonds, at the contemplated offering prices (or yields) by the Underwriters of the Bonds ; or
(ii) an amendment to the Constitution of the United States or the Constitution of the State or legislation in or by the Congress of the United States or the legislature of the State, or the amendment of legislation pending as of the date of this Forward Delivery Purchase Contract in the Congress of the United States, or the favorable reporting for passage of legislation to either House of the Congress of the United States by a Committee of such House to which such legislation has been referred for consideration, or any decision of any federal or State court or any ruling or regulation (final, temporary or proposed) or of ficial statement on behalf of the United States Treasury Department, the Internal Revenue Service or other federal or State authority or the occurrence of any other comparable legislative or regulatory event affecting the federal or State tax status of the interest on the Bonds or bonds or obligations of the general character of the Bonds; provided, that the occurrence of any such event shall not constitute a termination event hereunder if the prospect of such constitutional, legislative, regulatory or judi cial action or enactment shall have been publicly known on the date hereof; or (iii) any legislation, ordinance, rule or regulation shall be introduced in, or be enacted by any governmental body, department or agency of the State, or a decision by any court of competent jurisdiction within the State shall be rendered; or (iv) a stop order, ruling, regulation or official statement by, or on behalf of, the Securities and Exchange Commission or any other governmental agency having jurisdiction of the subject matter shall be issued or made to the effect that the issuance, offering or sale of obligations of the general character of the Bonds, or the issuance, offering or sale of the Bonds, including all underlying obligations, as contemplated hereby or by the Official State ment, is in violation or would be in violation of any provision of the federal securities laws, including the Securities Act of 1933, as amended and as then in effect, or that the Indenture need be qualified under the Trust Indenture Act of 1939, as amended and as then in effect; or
(v) legislation shall be enacted by the Congress of the United States, or a decision by a court of the United States shall be rendered, to the effect that obligations of the general character of the Bonds, or the Bonds, are not exempt from registration under the Securities Act of 1933, as amended and as then in effect, or the Securities Exchange Act of 1934, as amended and as then in effect, or that the Indenture is not exempt from qualification under the Trust Indenture Act of 1939, as amended and as then in effect; or (vi) there shall have occurred a general suspension of trading or additional material restrictions not in force as of the date hereof shall have been imposed upon trading in the United States in securities generally by any governmental authority or by any national securities exchange; or
(vii) a general banking moratorium shall have been declared by federal, State or State of New York authorities or a disruption in securities settlement, payment or clearance services has occurred; or
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(viii) the ratings on the Bonds or any other debt obligations secured by Net Revenues of the Wastewater Enterprise shall have been downgraded or withdrawn or the subject of an official notice as to a possible downgrading (such as being placed on “credit watch” or “negative outlook”) subsequent to the date of this Forward Delivery Purchase Contract by one of the rating agencies rating the Bonds; or (ix) there shall have occurred any outbreak or escalation of hostilities, declaration by the United States of a national or international emergency or war or other calamity or crisis (or any escalation thereof).
The termination of this Forward Delivery Purchase Contract pursuant to this Section 10(d) by the Underwriter s with respect to the Bonds shall not prohibit the Commission from selling such Bonds to any other underwriter. (e) Closing Documents. At or prior to t he Closing, the Representative shall receive with respect to the Bonds (unless the context otherwise indicates) the following documents, in each case satisfactory in form and substance to the Representative:
(1) A
pproving Authorizations . Certified copies of the Ordinance and Commission Resolution.
(2) Master Indenture. A n executed copy of the Master Indenture. (3) Forward Delivery Purchase Contract. An executed original of this Forward Delivery Purchase Contract.
(4) Bond Documents. C opies of each of the Fourteenth Supplemental Indenture, the Escrow Agreement and the Continuing Disclosure Certificate , each duly executed and in form to be delivered by the respective parties thereto at Settlement.
(5) Letter Regarding Final Opinion. A letter, dated the Closing Date and addr essed to the Commission , of Co-Bond Counsel, to the effect that Co - Bond Counsel is not aware of any reason that will prevent Co-Bond Counsel from delivering on the Settlement Date an approving opinion substantially in the form attached to the Official Statement, together with a letter of Co -Bond Counsel , dated the date of the Closing and addressed to the Underwriters, to the effect that the fo regoing letter addressed to the Commission may be relied upon by the Underwriters to the same extent as if such letter were addressed to them. (6) Supple
mental Opinion. A supplemental opinion or opinions of Co- Bond Counsel addressed to the Commission and the Underwriters, dated the Closing Date, to the following effect:
(i) T
he statements contained in the Official Statement under the captions “T HE 2022 SERIES ABCD BONDS,” “S ECURITY FOR THE BONDS,” “ TAX MATTERS,” APPENDIX A—“SUMMARY OF CERTAIN
PROVISIONS OF THE INDENTURE,” and APPENDIX C—“ PROPOSED FORM -15-
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OF OPINION OF CO-BOND COUNSEL,” insofar as such statements purport to summarize certain provisions of the Bonds, the Indenture, and the opinion of Co-Bond Counsel with respect to the exclusion from gross income of interest on the Bonds for federal income tax purposes are accurate in all material respects.
(ii) Assuming no change in applicable law from the law in effect on the Closing Date, the Bonds, if and when issued, will not be subject to the registration requirements of the Securities Act of 1933, as amended, and the Indenture is exempt from qualification under the Trust Indenture Act of 1939, as amended.
(iii) This Forward Delivery Purchase Contract has been duly executed and delivered by the Commission and constitutes the valid and binding agreement of the Commission.
(7) L etter Regarding the Defeasance Opinion. A letter from Co -Bond Counsel, dated the Closing Date and addressed to the Underwriter s, to the effect that Co-Bond Counsel is not aware of any reason that will pr event Co-Bond Counsel from delivering on the Settlement Date an opinion to the effect that the 2013 Bonds have been deemed to have been paid and are no longer outstanding pursuant to the terms of the Indenture.
(8) Disclosure Counsel Opinion as to Official Sta t ement. An opinion of Orrick, Herrington & Sutcliffe LLP, as Disclosure Counsel to the Commission, addressed to the Commission and the Underwriter, dated the Closing Date, to the effect that, while such counsel is not passing upon, and does not assume any responsibility for, the accuracy, completeness or fairness of any of the statements contained in the Preliminary Official Statement or the Official Statement, based upon such counsel’s participation in conferences during which the contents of the Preliminary Official Statement and the Official Statement were discussed, no information came to such counsel’s attention which caused such counsel to believe that the Preliminary Official Statement, as of its date, or the Official Statement, as of its date and as of the Closing Date (except for the financial, statistical or economic data or forecasts, numbers, charts, tables, graphs, estimates, projections, assumptions or expressions of opinion, CUSIP numbers (and ISIN, Common Codes or other identification numbers, if applicable), any information regarding DTC and its book- entry system, Euroclear Bank S.A./NV or Clearstream Banking S .A., and any information contained in Appendices included therein (other than Appendi x D), and any information incorporated by reference therein, as to which no opinion or view need be expressed) contained any untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading.
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(9) Certificate of the Commission . A certificate of the Commission dated the Closing Date, signed on behalf of the Commission by an authorized officer of the Commission, to the effect that:
(i) T he representations and warranties of the C ommission contained herein are true and correct in all material respects on and as of the Closing Date as if made on the Closing Date.
(ii) No event affecting the Commission has occurred since the date of the Official Statement which has not been disclosed therein or in any supplement or amendment thereto which event should be disclosed in the Official Statement in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. (10) C
ertificate of the Trustee and Escrow Agent . A certificate of the U.S. Bank Trust Company, National Association, as Trustee and Escrow Agent (referred to collectively in the capacity of Trustee and Escrow Agent, as “U.S.
Bank”), dated the Closing Date, to the effect that:
(i) U
.S. Bank is a national banking association organized and existing under the laws of the United States of America and has full power and is qualified to accept and comply with the terms of the Indenture and the Escrow Agreement (together, the “ U.S. Bank Documents ”) and to perform its obligations thereunder and to authenticate the Bonds. (ii) U.S. Bank has accepted the duties and obligations imposed on it by the U.S. Bank Documents.
(iii) No consent, approval, authorization or other action by any governmental or regulatory authority having jurisdiction over U.S. Bank that has not been obtained is or will be required for the consummation by U.S. Bank of the transactions contemplated by the U.S. Bank Documents to be undertaken by the U.S. Bank.
(iv) Compliance with the terms of the U. S. Bank Documents will not conflict with, result in a violation or breach of, or constitute a default under, any loan agreement, indenture, bond, note, resolution or any other agreement or instrument to which U.S. Bank is a party or by which it is bound, or, to the best knowledge of U.S. Bank, after reasonable investigation, any law, rule, regulation, order or decree of any court or governmental agency or body having jurisdiction over U.S. Bank or any of its activities or properties (except that no representation, warranty or agreement is made by U.S. Bank with respect to any federal or state securities or Blue Sky laws or regulations).
(v) To the knowledge of the U.S. Bank after due inquiry, there is no action, suit, proceeding, inquiry or investigation, at la w or in equity, before or by any court or governmental agency, public board or body -17-
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served on or threatened against or affecting the existence of U.S. Bank, or in any way contesting or affecting the validity or enforceability of the U.S.
Bank Documents or the Bonds, or contesting the powers of U.S. Bank or its authority to enter into and perform its obligations under the U.S. Bank Documents or the Bonds, wherein an unfavorable decision, ruling or finding would adversely affect the validity of the Bonds or the U.S. Bank Documents.
(11) O
pinion of Counsel to the Trustee and Escrow Agent . An opinion of counsel to U.S. Bank addressed to the Commission and the Underwriters, dated the Closing Date, to the effect that:
(i) U .S. Bank is a national banking association with t rust powers, duly organized and validly existing and in good standing under the laws of the United States of America, having the legal authority to exercise trust powers in the State.
(ii) U.S. Bank has full legal power and adequate corporate authority to accept the duties and obligations imposed on it by the U.S.
Bank Documents and to authenticate the Bonds and the full legal power and authority to own its properties and to carry on its business. (iii) On the Settlement Date, the Bonds will have been duly authenticated by U.S. Bank.
(iv) No consent, approval, authorization or order of any court, regulatory authority or governmental body is required for the valid authorization, execution and delivery of the U.S. Bank Documents and the authentication of the Bonds or the consummation by the U.S. Bank of the transactions contemplated in the U.S. Bank Documents except such as have been obtained and except such as may be required under the state securities or Blue Sky laws in connection with the purchase and distribution of the Bonds by the Underwriters.
(v) U.S. Bank’s acceptance of its duties under the U.S. Bank Documents and the authentication of the Bonds by U.S. Bank and performance by U.S. Bank of its obligations thereunder will not conflict with or result in a breach of any of the terms, conditions or provisions of its Articles of Association or Bylaws or any other agreement or instrument to which U.S. Bank is a party or by which it is bound or any other existing law, regulation, court order or consent decree to which U.S. Bank is subject or constitute a default thereunder.
(vi) There is no action, suit, proceeding, inquiry or
investigation, at law or in equity, before or by any court, governmental agency, public board or body, pending or threatened against U.S. Bank affecting the existence of U.S. Bank or the titles of its officers to their -18-
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respective offices or seeking to prohibit, restrain or enjoin the authentication of the Bonds by U.S. Bank, or contesting the powers of U.S. Bank or its authority to perform its obligations under the U.S. Bank or the Bonds.
(12) T
ax Certificate . Tax Certificate of the Commission, dated the Closing Date, in form satisfactory to Co- Bond Counsel, unless Co- Bond Counsel determines to require such Tax Certificate only at Settlement. (13) California Debt and Investment Advisory Commission Filings .
Copies of the Report of Proposed Debt Issuance required to be delivered to the California Debt and Investment Advisory Commission pursuant to Section 53583 of the Government Code and Section 8855(g) of the Government Code. (14) Rating Letters for the Bonds. Rating letters of Moody’s Investor s Service, Inc. (“Moody’s”) and Standard & Poor’s Ratings Services, a Standard & Poor’s Financial Services LLC business ( “S&P”), evidencing that such rating agencies have assigned their municipal bond ratings of “___” and “___,” respectively.
(15) Opinion of the City Attorney . An opinion of the City Attorney addressed to the Underwriters, dated the Closing Date, in substantially the form attached hereto as Appendix B.
(16) Blue Sky Memorandum . A copy of the Blue Sky Memorandum with respect to the Bonds, prepared by Stradling Yocca C arlson & Rauth, a Professional Corporation, counsel to the Underwriters (“Underwriters’ Counsel”). (17) Opinion of the Underwriters’ Counsel . The opinion of Underwriters’ Counsel, dated the Closing Date and addressed to the Underwriters, in
form satisfactory to the Underwriters.
(18) V erification Report . A verification report of _____, certified public accountants, as described in the Official Statement. (19) Additional Documents. S uch legal opinions, additional certificates, instruments and other documents as the Representative, Co-Bond Counsel or the City Attorney may reasonably deem necessary to evidence the truth and accuracy as of the time of the Closing of the representations of the Commission and the due performance or s atisfaction by the Commission at or prior to such time of all agreements then to be performed and all conditions then to be satisfied by the Commission.
If the Commission shall be unable to satisfy the conditions contained in t his Forward Delivery Purchase Contract for Closing, unless waived by the Representative , or if the obligations of the Underwriters shall be terminated for any reason permitted by this Forward Delivery Purchase Contract, this Forward Delivery Purchase Contract shall terminate and the -19-
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Underwriters and the Commission shall not be under further obligation hereunder, except as further set forth in Section 14 hereof.
Section 11. Settlement Conditions. The Underwriters’ obligations under this Forward Delivery Purchase Contract to purchase, to accept delivery of and to pay for the Bonds at the Settlement shall be conditioned upon the performance by the Commission of its obligations to be performed hereunder, including, without limitation, the Closing having been completed. The Underwriters’ obligations under this Forward Delivery Purchase Contract with respect to the Settlement are and shall be subject to the following conditions:
(a) Bring-Down Representation. The representations and warranties of the Commission contained herein s hall be true, accurate and correct in all material respects at the date hereof, and on the Settlement Date, as if made on the Settlement Date. (b) Executed Documents and Performance Thereunder . At the time of the Settlement: (i) the Indenture, this Forward D elivery Purchase Contract , the Continuing Disclosure Certificate, the Escrow Agreement and the Updated Official Statement shall be in full force and effect, and shall not have been amended, modified or supplemented except with the consent of the Representative (which consent will not be unreasonably withheld); and (ii) the Commission shall perform or have performed all of its obligations required under or specified in this Forward Delivery Purchase Contract , the Escrow Agreement, the Updated Official Statement and the Indenture to be performed prior to the Settlement Date. (c) No Default. At the time of the Settlement, no default shall have occurred or be existing under the Indenture or this Forward Delivery Purchase Contract. (d) Settlement Documents . At or prior to the Settlement, the Representative shall receive with respect to the Bonds (unless the context otherwise indicates) the following documents, in each case satisfactory in form and substance to the Representative:
(1) A
pproving Authorizations . Certified cop ies of the Ordinance and Commission Resolution.
(2) Bond Documents. An executed copy of the Master Indenture and executed originals of the Fourteenth Supplemental Indenture, the Escrow Agreement, the Continuing Disclosure Certificate and this Forward Delivery Purchase Contract.
(3) Final Opinion. An
approving opinion or opinions of Co-Bond
Counsel, dated the Settlement Date, and substantially in the form attached to the Official Statement, and a letter of such counsel addressed to the Underwriters to the effect that such opinion may be relied upon by the Underwriters to the same extent as if it had been addressed to them.
(4) Supple mental Opinion. A supplemental opinion or opinions of Co- Bond Counsel addressed to the Commission and the Underwriters, dated the Settlement Date, to the following effect:
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(i) The statements contained in the Updated Official Statement under the captions “THE 2022 SERIES ABCD BONDS,” “SECURITY FOR THE BONDS,” “ TAX MATTERS,” APPENDIX A—“SUMMARY OF CERTAIN
PROVISIONS OF THE INDENTURE,” and APPENDIX C—“ PROPOSED FORM OF OPINION OF CO-BOND COUNSEL,” insofar as such statements purport to summarize certain provisions of the Bonds, the Indenture, and the opinion of Co-Bond Counsel with respect to the exclusion from gross income of interest on the Bonds for federal income tax purposes are accurate in all material respects.
(ii) The Bonds are not subject to the registration requirements of the Securities Act of 1933, as amended, and the Indenture is exempt from qualification under the Trust Indenture Act of 1939, as amended. (iii) This Forward Delivery Purchase Contract has been duly executed and delivered by the Commission and constitutes the valid and binding agreement of the Commission.
(5) D efeasance Opinion. A defeasance opinion of Co-Bond Counsel with respect to the 2013 Bonds.
(6) Disclosure Counsel Opinion as to Official Statement. A n opinion of Orrick, Herrington & Sutcliffe LLP, as Disclosure Counsel to the Commission, addressed to the Commission and the Underwriter s, dated the Settlement Date, to the effect that, while such counsel is not passing upon, and does not assume any responsibility for, the accuracy, completeness or fairness of any of the statements contained in the Official Statement or the Updated Official Statement, bas ed upon such counsel’s participation in conferences during which the contents of the Official Statement and the Updated Official Statement were discussed, no information came to such counsel’s attention which caused such counsel to believe that the Official Statement, as of its date, or the Updated Official Statement, as of its date and as of the Settlement Date ( except for the financial, statistical or economic data or forecasts, numbers, charts, tables, graphs, estimates, projections, assumptions or expressions of opinion, CUSIP numbers (and ISIN, Common Codes or other identification numbers, if applicable), any information regarding DTC and its book- entry system, Euroclear Bank S.A./NV or Clearstream Banking S .A., and any information contained in Appendic es included therein (other than Appendi x D) contained any untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading.
(7) Certificate of the Commission .
A certificate of the Commission
dated the Settlement Date, signed on behalf of the Commission by an authorized officer of the Commission, to the effect that:
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(i) The representations and warranties of the Commission contained herein are true and correct in all material respects on and as of the Settlement Date as if made on the Settlement Date.
(ii) No event affecting the Commission has occurred since the date of the Updated Official Statement which has not been disclosed therein or in any supplement or amendment thereto which event should be disclosed in the Updated Official Statement in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.
(8) C
ertificate of the Trustee and Escrow Agent . A certificate of the U.S. Bank, dated the Settlement Date, to the effect that:
(i) U .S. Bank is a national banking association organized and existing under the laws of the United States of America and has full power and is qualified to accept and comply with the terms of the U.S. Bank Documents and to perform its obligations thereunder and authenticate the Bonds.
(ii) U.S. Bank has accepted the duties and obligations imposed on it by the U.S. Bank Documents.
(iii) No consent, approval, authorization or other action by any governmental or regulatory authority having jurisdiction over U.S. Bank that has not been obtained is or will be required for the consummation by U.S. Bank of the transactions contemplated by the U.S. Bank Documents to be undertaken by the U.S. Bank.
(iv) Compliance with the terms of the U.S. Bank Documents will not conflict with, result in a violation or breach of, or constitute a default under, any loan agreement, indenture, bond, note, resolution or any other agreement or instrument to which U.S. Bank is a party or by which it is bound, or, to the best knowledge of U.S. Bank, after reasonable investigation, any law, rule, regulation, order or decree of any court or governmental agency or body having jurisdiction over U.S. Bank or any of its activities or properties (except that no representation, warranty or agreement is made by U.S. Bank with respect to any federal or state securities or Blue Sky laws or regulations).
(v) To the knowledge of the U.S. Bank after due inquiry, there is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court or governmental agency, public board or body served on or threatened against or affecting the existence of U.S. Bank, or in any way contesting or affecting the validity or enforceability of the U.S.
Bank Documents or the Bonds, or contesting the powers of U.S. Bank or its authority to enter into and perform its obligations under the U.S. Bank -22-
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Documents or the Bonds, wherein an unfavorable decision, ruling or finding would adversely affect the validity of the Bonds or the U.S. Bank Documents.
(9) O pinion of Counsel to the Trustee and Escrow Agent . An opinion of counsel to U.S. Bank addressed to the Commission and the Underwriters, dated the Closing Date, to the effect that:
(i) U .S. Bank is a national banking association with trust powers, duly organized and validly existing and in good standing under the laws of the United States of America, having the legal authority to exercise trust powers in the State.
(ii) U.S. Bank has full legal power and adequate corporate authority to accept the duties and obligations imposed on it by the U.S.
Bank Documents and to authenticate the Bonds and the full legal power and authority to own its properties and to carry on its business. (iii) The Bonds have been duly authenticated by U.S. Bank. (iv) No consent, approval, authorization or order of any court, regulatory authority or governmental body is required for the valid authorization, execution and delivery of the U.S. Bank Documents and the authentication of the Bonds or the consummation by the U.S. Bank of the transactions contemplated in the U.S. Bank Documents except such as have been obtained and except such as may be required under the state securities or Blue Sky laws in connection with the purc hase and distribution of the Bonds by the Underwriters.
(v) U.S. Bank’s acceptance of its duties under the U.S. Bank Documents and the authentication of the Bonds by U.S. Bank and performance by U.S. Bank of its obligations thereunder will not conflict with or result in a breach of any of the terms, conditions or provisions of its Articles of Association or Bylaws or any other agreement or instrument to which U.S. Bank is a party or by which it is bound or any other existing law, regulation, court order or consent decree to which U.S. Bank is subject or constitute a default thereunder.
(vi) There is no action, suit, proceeding, inquiry or
investigation, at law or in equity, before or by any court, governmental agency, public board or body, pending or threatened against U.S. Bank affecting the existence of U.S. Bank or the titles of its officers to their respective offices or seeking to prohibit, restrain or enjoin the authentication of the Bonds by U.S. Bank, or contesting the powers of U.S. Bank or its authority to perform its obligations under the U.S. Bank or the Bonds.
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(10) Tax Certificate . A Tax Certificate (or a supplement to the Tax Certificate, as applicable) with respect to the Bonds in form satisfactory to Co - Bond Counsel;
(11) California Debt and Investment Advisory Commission Filings .
Copies of the Report of Final Sale required to be delivered to the California Debt and Investment Advisory Commission pursuant to Section 53583 of the Government Code and Section 8855(g) of the Government Code. (12) Rating Letters for the Bonds . Rating letters of Moody’s and S&P, confirming the then current ratings on the Bond.
(13) Opinion of the City Attorney . An opinion of the City Attorney addressed to the Underwriters, dated the Settlement Date, substantially in the form attached hereto as Appendix B.
(14) Opinion of the Underwriters’ Counsel . The opinion of Underwriters’ Counsel , dated the Settlement D ate and addressed to the Underwriters, in form satisfactory to the Underwriters. (15) [V erification Report . In the event amounts set aside for the payment or redemption of the 2013 Bonds are invested, a verification report, or supplement to the verification report, of _____, certified public accountants, dated the Settlement Date.]
(16) Additional Documents. S uch legal opinions, additional certificates, instruments and other documents as the Representative, Co-Bond Counsel or the City Attorney may reasonably deem necessary to evidence the truth and accuracy as of the time of the Settlement of the representations of the Commission and the due performance or satisfaction by the Commission at or prior to such time of all agreements then to be performed and all conditions then to be satisfied by the Commission.
If the Commission shall be unable to satisfy the conditions contained in t his Forward Delivery Purchase Contract for Settlement, unless waived by the Representative , or if the obligations of the Underwriters shall be terminated for any reason permitted by this Forward Delivery Purchase Contract, this Forward Delivery Purchase Contract shall terminate and the Underwriters and the Commission shall not be under further obligation hereunder, except as further set forth in Section 14 hereof.
Section 12. Termination Rights After Closing but on or Prior to Settlement. The Underwriters may terminate this Forward Delivery Purchase Contract without liability therefor by notification to the Commission if at any time on or after Closing and on or prior to Settlement:
(a) an event shall occur which makes untrue or incorrect in any material respect, as of the time of such event, any statement or information contained in the Official Statement or Updated Official Statement or which is not reflected in the Official Statement or Updated -24-
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Official Statement but should be reflected therein in order to make the statements contained therein in light of the circumstances under which they were made, not misleading in any material respect and, in either such event, (a) the Commission refuses to permit the Official Statement or Updated Official Statement, as the case may be, to be supplemented to supply such statement or information in a manner satisfactory to the Underwriters or (b) the effect of the Official Statement or Updated Official Statement, as so supplemented is, in the reasonable judgment of the Representative, to materially adversely affect the market price or marketability of the Bonds or the ability of the Underwriters to enforce contracts for the sale, at the contemplated offering prices (or yields), of the Bonds; or
(b) as a result of any Change in Law (as defined below) , Co-Bond Counsel notifies the Commission that it does not expect to be able to issue an opinion on the Settlement Date either (i) subs tantially in the form and to the effect set forth in Appendix C to th e Official Statement or (ii) notwithstanding a Change in La w that prevents Co-Bond Counsel from issuing an opinion substantially in the form and to the effect set forth in Appendix C to t he Official Statement, that interest on the Bonds is not subject to any then currently imposed federal income tax or personal income taxes imposed by the State and is not included as a specific preference item for purposes of federal individual or corporate alternative minimum taxes; (c) for any other reason, Co -Bond Counsel does not expect to be able to issue an opinion substantially in the form and to the effect set forth in Appendix C to th e Official Statement;
(d) as a result of a Change in Law that involves the enactment of federal legislation that applies only to “state or local bonds” (such as the Bonds) that are issued and delivered on or after the Closing Date, the owner of a Bond is not able to utilize the full benefit of the exclusion from gross income for federal income tax purposes of interest payable on the Bonds; (e) for any reason, including a Change in Law, the issuance, offering, or sale of the Bonds as contemplated by this Forward Delivery Purchase Contract or by the Official Statement, is or would be in violation of any provision of the federal securities laws, including the Securities Act of 1933, as amended , the Securities Exchange Act of 1934, as amended , or the Trust Indenture Act of 1939, as amended;
(f) an event of default has occurred and i s continuing, technical or otherwise, under any of the Indenture; or
(g) as of the Settlement Date, the Bonds are not rated (or any rating is suspended or withdrawn which results in the Bonds having no rating) by any of S&P or Moody’s.
For purposes of this Sec tion, the term “Change in Law” shall mean any of the following, which occur at any time after the Closing Date and on or prior to the Settlement Date : (i) any change in or addition to applicable federal or s tate law, whether statutory or as interpreted by the courts, including any changes in or new rules, regulations or other pronouncements or interpretations by federal or state agencies, (ii) any legislation enacted by the Congress of the United States or recommended for passage by the President of the United States ( if such enacted legislation has a proposed effective date which is on or before the Settlement Date), (iii) any law, -25-
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rule or regulation proposed or enacted by any governmental body, department or agency (if such enacted law, rule or regulation has a proposed effective date which is on or before the Settlement Date) or (iv) any judgment, ruling or order issued by any court or administrative body, which with respect to the foregoing clauses (i) through (iv) would, (A) as to the Underwriters, leg ally prohibit (or have the retroactive effect of prohibiting, if enacted, adopted, passed or finalized) the Underwriters from (1) accepting delivery of and paying for the Bonds in accordance with the provisions of this Forward Delivery Purchase Contract or (2) selling the Bonds or beneficial ownership interests therein to the bona fide purchasers or, (B) as to the Commission , make illegal the issuance, sale or delivery of the Bonds (or have the retroactive effect of making illegal such issuance, sale or delivery, if enacted, adopted, passed or finalized); (C) eliminate the exclusion from gross income of interest on the Bonds (or have the retroactive effect of eliminating such exclusion if enacted, adopted, passed, or finalized); or (D) require the Bonds to be registered under the Securities Act of 1933, as amended, or under the Securities Exchange Act of 1934, as amended, or require the Indenture to be qualified under the Trust Indenture Act of 1939, as amended, (or have the retroactive effect of requiring such registration or qualification if enacted, adopted, passed or finalized); or (v) a stop order, ruling, regulation, or official statement by the SEC or any other governmental agency having jurisdiction of the subject matter shall have been issued or made or any other event occurs, the effect of which is that the issuance, offering or sale of the Bonds, is, or would be, in violation of any provision of the federal securities laws, including the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, or the Trust Indenture Act of 1939, as amended.
The termination of this Forward Delivery Purchase Contract pursuant to this Section 12 by the Underwriters with respect to the Bonds shall not prohibit the Commission from selling such Bonds to any other underwriter.
Section 13. Good Faith Deposit. To secure the Commission from any loss resulting from the failure o f the Underwriters to accept delivery of and pay the purchase price for the Bonds pursuant to the terms of this Forward Delivery Purchase Contract, the Underwriters agree to deliver to or to the order of the Commission, concurrently with the execution and delivery of this Forward Delivery Purchase Contract, either an official bank check (which may be deposited by the Commission upon receipt) or a federal funds wire transfer in the amount of $______ (the “Good Faith Deposit”). At the Settlement, the Good Fa ith Deposit will be applied towards and deducted from the aggregate net purchase price for the Bonds as provided in Section 1 of this Forward Delivery Purchase Contract. If the Underwriters fail to pay the purchase price in full upon tender of the Bonds (other than for a reason permitted under Sections 10, 11 or 12 hereof), the Commission may retain such Good Faith Deposit as and for liquidated damages for such failure by the Underwriters. In such circumstance, the Underwriters will have no right to recover the Good Faith Deposit or to any allowance or credit therefor. Retaining the Good Faith Deposit shall constitute the Commission’s sole and exclusive remedy and full liquidated damages for the Underwriters’ failure (other than for a reason expressly set forth herein) to purchase and accept delivery of the Bonds pursuant to the terms of this Forward Delivery Purchase Contract and the Underwriters shall be released and discharged from any and all claims for damages by the Commission against the Underwriter s related to such failure and any other defaults by Underwriters hereunder. Accordingly, the Underwriters hereby waive any right to claim that the actual damages of the Commission are less than the Good Faith Deposit, and the acceptance of this offer by the Commission shall constitute a waiver of any right the Commission may have to -26-
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additional damages from the Underwriters . The Underwriters and the Commission hereby acknowledge and agree that the amount fixed pursuant to this Section for liquidated damage s does not constitute a penalty and is a reasonable estimate of the damages that the Commission would sustain in the event of the Underwriter’s failure to purchase and to accept delivery of the Bonds on the Settlement Date pursuant to the terms of this For ward Delivery Purchase Contract.
Said amount is agreed upon and fixed as liquidated damages because of the difficulty of ascertaining as of the date hereof the actual amount of damages that would be sustained in such event. If the Commission fails to deliver the Bonds on the Settlement Date pursuant to this Forward Delivery Purchase Contract, or if the conditions to the obligations of the Underwriters to purchase, accept delivery of and pay for the Bonds as set forth in this Forward Delivery Purchase Contract shall not be satisfied (unless waived in writing by the Representative pursuant to this Forward Delivery Purchase Contract), or if this Forward Delivery Purchase Contract is terminated for a reason set forth in Section 10(d) or Section 12 hereof, the Commission shall promptly return or cause the return of the Good Faith Deposit to the Representative. Upon such return of the Good Faith Deposit to the Underwriters, this Forward Delivery Purchase Contract shall terminate, and neither party shall have any further obligations hereunder.
Section 14. Expenses.
(a) Commission. The Commission shall pay or cause to be paid (but solely from the proceeds of the Bonds and not otherwise) the expenses incident to the performance of the obligations of the Commission hereunder, including but not limited to: (1) the cost of printing of the Preliminary Official Statement, the Official Statement and the Updated Official Statement in reasonable quan tities and all other documents prepared in connection with the transactions contemplated hereby; (2) the fees and disbursements of the Trustee and counsel to the Trustee in connection with the issuance of the Bonds; (3) the fees and disbursements of Co-Bond Counsel and Disclosure Counsel and of Montague DeRose and Associates, LLC and Backstrom McCarley Berry & Co., LLC, as Co -Municipal Advisors to the Commission, and any other experts or consultants retained by the Commission in connection with the transact ions contemplated hereby; (4) fees of the verification agent and ( 5) the costs related to obtaining ratings.
(b) Underwriters. The Underwriter s shall pay : (1) the cost of preparation and printing of Blue Sky and Legal Investment Memoranda, if any, to be used by it; (2) all advertising expenses in connection with the public offering of the Bonds; (3) California Debt and Investment Advisory Commission fees; (4) all other expenses incurred by the Underwriter s in connection with its public offering and distribution of the Bonds, including, without limitation, any experts or other consultants hired or retained by the Underwriter, including Underwriter’s Counsel, the fees and charges of the CUSIP Bureau and the MSRB; and (5) the fees of Digital Assurance Certification, L.L.C. for a continuing disclosure compliance review. Certain expenses of the Underwriters may be included in the expense component of the Underwriters’ discount. In addition, the Commission agrees to reimburse the Underwriter s for any expenses incurred by the Underwriters on behalf of the Commission’s employees and representatives which are in connection with this Forward Delivery Purchase Contract, including, but not limited to, meals, transportation and lodging of those employees and representatives, which expenses , if any, will be included in the expense component of the Underwriter’s discount. The Underwriters agree to provide the Commission with a detailed itemization of any such expenses incurred on behalf of -27-
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Commission employees or representatives prior to the Settlement Date. [ Notwithstanding that the California Debt and Investment Advisory Commission fees are solely the legal obligation of the Underwriters, the Commission agrees to reimburse the Underwriters for such fees.] Section 15. C ity Contracting Requirements. The provisions set forth in Appendix C , attached hereto, are incorporated herein by this reference.
Section 16. N otices. Any notice or other communication to be given under this Forward Delivery Purchase Contract to the Commission or the Underwriters may be given by delivering the same in writing at the addresses set forth below:
If to the Commission:
Public Utilities Commission of the
City and County of San Francisco
525 Golden Gate Avenue, 13th Floor
San Francisco, California 94102
Attention: Assistant General Manager, Business Services/Chief Financial Officer Telephone: (415) 554-3155
Fax: (415) 554-3161
With a copy to:
City and County of San Francisco
Office of Public Finance
City Hall, Room 336
1 Dr. Carlton B. Goodlett Place
San Francisco, California 94102
Telephone: (415) 554-5956
Fax: (415) 554-4864
If to the Representative:
Citigroup Global Markets Inc.
300 South Grand, Suite 3110
Los Angeles, California 90071
Attention: Cameron Parks, Managing Director
Telephone: (213) 486-7130
Section 17. Entire Agreement . This Forward Delivery Purchase Contract , when accepted by the Commission, shall constitute the entire agreement between the Commission and the Underwriter and is made solely for the benefit of the Commission and the Underwriters (including the successors or assigns of any Underwriters with the consent of the Commission) and no other person shall acquire or have any right hereunder by virtue hereof. All of the Commission’s representations, covenants and agreements in this Forward Delivery Purchase Contract shall remain operative and in full force and effect, regardless of (a) any investigation -28-
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made by or on behalf of the Underwriter, (b) delivery of and payment for the Bonds hereunder, and (c) any termination of this Forward Delivery Purchase Contract.
Section 18. Counterparts. This Forward Delivery Purchase Contract may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument. This Forward Delivery Purchase Contract may be signed in counterparts, and upon delivery to the other party of such signed Forward Delivery Purchase Contract , which delivery may be by facsimile transmission, shall constitute the binding agreement of each party to this Forward Delivery Purchase Contract.
Section 19. Mutual Reliance on Representations and Warranties . The Commission hereby acknowledges that the Underwriters, in causing the Forward Delivery Purchase Contract to be executed by the Representative and in paying for the Bonds as provided herein, is relying upon the representations of the Commission set forth herein. The Underwriters hereby acknowledges that the Commission, in executing this Forward Delivery Purchase Contract and issuing the Bonds described herein, is relying upon the representations and warranties of the Underwriters set forth herein.
Section 20. Severability. In case any one or more of the provisions contained herein shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision hereof, but this Forward Delivery Purchase Contract shall be construed as if such invalid or illegal or unenforceable provision had never been contained herein.
Section 21. State of California Law Governs . The validity, interpretation and performance of this Forward Delivery Purchase Contract shall be governed by the laws of the State of California. This Forward Delivery Purchase Contract shall be enforceable in the State of California, and any action arising out of this Forward Delivery Purchase Contract shall be filed with and maintained in the City and County of San Francisco Superior Court, San Francisco, California; provided, that the Commission may waive the requirement of venue.
Section 22. Limited Liability . The obligations and liabilities of the Commission hereunder are limited obligations of the Commission payable solely from Revenues as defined and set forth in the Indenture. None of the Commissioners, the officers or employees of the Commission, or any person executing this Forward Delivery Purchase Contract shall be liable personally for the obligations of the Commission hereunder or be subject to any personal liability or accountability by reason of the execution hereof. Neither of the faith and credit nor the taxing power of the State or any political subdivision thereof, including the City, is pledged to the obligations of the Commission hereunder.
Section 23. No Fiduciary or Advisory Role; Arm’s Length Transaction . The Underwriters and the Commission acknowledge and agree that (i) the purchase and sale of the Bonds pursuant to this Forward Delivery Purchase Contract is an arm’s -length commercial transaction between Commission, on the one hand, and the Underwriters, on the other hand, (ii) in connection with such transaction, the Underwriters are acting solely as a principal and not as a municipal advisor, a financial advisor, or a fiduciary of the Commission, and may have financial -29-
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and other interests that differ from those of the Commission, (iii) the Underwriters have not assumed a fiduciary responsibility in favor of the Commission with respect to the offering of the Bonds or the discussions, undertakings and procedures leading thereto (whether or not any Underwriter, or any affiliate of an Underwriter, has provided or is currently providing services or advice to Commission on other matters), and (iv) the Commission and the Underwriters have consulted with their respective legal, financi al and other advisors to the extent they deemed appropriate in connection with the offering of the Bonds. The Underwriters are not acting as a Municipal Advisor to the Commission (as defined in Section 15B of the Exchange Act of 1934, as amended) in connection with the matters contemplated by this Forward Delivery Purchase Contract.
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Very truly yours,
CITIGROUP GLOBAL MARKETS INC., as
Representative
By:
Cameron Parks, Managing Director
Accepted as of the date first stated above:
PUBLIC UTILITIES COMMISSION OF THE
CITY AND COUNTY OF SAN FRANCISCO
By:_________________________________
[Name, Title]
Approved as to Form:
DAVID CHIU
City Attorney
By:_________________________________
Mark D. Blake, Deputy City Attorney
[Signature Page to Wastewater Revenue Bonds 2022 Series A and 2022 Series B Forward Delivery Bond Purchase Contract]
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SCHEDULE I
TO THE FORWARD DELIVERY PURCHASE CONTRACT
MATURITY SCHEDULE
$______________
2022 SERIES A
(Refunding)
(SSIP) (Green Bonds)
Maturity
(October 1)
Principal
Amount
Interest
Rate Yield Price
*Term Bonds
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MATURITY SCHEDULE
$_________
2022 SERIES B
(Refunding )
(Non-SSIP)
Maturity
(October 1)
Principal
Amount
Interest
Rate Yield Price
*Term Bonds
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Redemption Provisions for the Bonds
Redemption of Series 2022A Bonds
Optional Redemption of Series 2022A Bonds . The Series 2022A Bonds are subject to redemption prior to their stated maturity, at the option of the Commission , from any source of available funds, as a whole or in part, on any date on or after _______ 1, ____, from such maturities or portions of maturities as are determined by the Commission and by lot within any one maturity, at a redemption price equal to 100% of the principal amount of the Series 2022A Bonds to be redeemed, plus accrued interest thereon to the date fixed for redemption, without premium.
Mandatory Sinking Fund Redemption of Series 2022A Bonds . The 2022A Bonds maturing on October 1, ____ (the “2022A Term Bonds (____)”), are further subject to redemption prior to their stated maturity, and payable from the 2022A Sinking Fund Account, on each October 1, ____ 1 on and after October 1, ____, by lot within any such maturity if less than all of the 2022A Term Bonds (____) of such maturity are then being redeemed, upon payment of the principal amount thereof and accrued interest thereon to the date fixed for redemption, without premium.
The 2022A Term Bonds (____) are subject to mandatory redemption on October 1 in each of the years and in the respective principal amounts as follows (such schedule subject to adjustment as directed by the Commission in the event of optional redemption of any portion of such 2022A Term Bonds (____) prior to maturity as described above):
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Redemption Date
(October 1) Principal Amount
$
____________________
*Maturity.
Redemption of Series 2022B Bonds
Optional Redemption of Series 2022B Bonds. The Series 2022B Bonds maturing on and after October 1, ____, are subject to redemption prior to their stated maturity, at the option of the Commission, from any source of available funds, as a whole or in part, on any date on or after ______ 1, ____, from such matur ities or portions of maturities as are determined by the Commission and by lot within any one maturity, at a redemption price equal to 100% of the principal amount of the Series 2022B Bonds to be redeemed, plus accrued interest thereon to the date fixed for redemption, without premium.
Mandatory Sinking Fund Redemption of Series 2022B Bonds. The Series 2022B Bonds maturing on October 1, ____ (the “2022B Term Bonds (____)”), are further subject to redemption prior to their stated maturity, and payable from the 2022B Sinking Fund Account, on each October 1 on and after October 1, ____, by lot within any such maturity if less than all of the 2022B Term Bonds (____) of such maturity are then being redeemed, upon payment of the principal amount thereof and accrued interest thereon to the date fixed for redemption, without premium.
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The 2022B Term Bonds (____) are subject to mandatory redemption on October 1 in each of the years and in the respective principal amounts as follows (such schedule subject to adjustment as directed by the SFPUC in the event of optional redemption of any portion of such 2022B Term Bonds (____) prior to maturity as described above):
Redemption Date
(October 1) Principal Amount
$
*
____________________
*Maturity.
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APPENDIX A
ISSUE PRICE CERTIFICATE
PUBLIC UTILITIES COMMISSION OF THE
CITY AND COUNTY OF SAN FRANCISCO
WASTEWATER REVENUE BONDS
$_________
2022 Series C
(Refunding) (SSIP)
(Green Bonds)
$_________
2022 Series D
(Refunding) (Non-SSIP)
The undersigned Citigroup Global Markets Inc. (the “Representative”), on its own behalf and on behalf of J.P. Morgan Securities LLC, Barclays Capital Inc., BofA Securities, Inc. and Goldman Sachs & Co. LLC (collectively, the “Underwriting Group”), hereby certifies as set forth below with respect to the sale and issuance of the above -captioned obligations (the “Bonds”).
1. Sale of the General Rule Maturities . As of the date of this certificate, for each Maturity of the General Rule Maturities, the first price at which at least 10% of such Maturity was sold to the Public is the respective price listed in Schedule A. [2. Initial Offering Price of the Hold-the-Price Maturities. (a) The Underwriting Group offered the Hold-the- Price Maturities to the Public for purchase at the respective initial offering prices listed in Schedule A (the “Initial Offering Prices”) on or before the Sale Date. A copy of the pricing wire or equivalent communication for the Bonds is attached to this certificate as Schedule B. (b) As set forth in the Forward Delivery Purchase Contract , dated ________, 2022, between the Representative and the Issuer, the members of the Underwriting group have agreed in writing that, (i) the Representative would retain the unsold Bonds of each Hold-the-Offering-Price Maturity and not allocate any such unsold Bonds to any other Underwriter, (ii) for each Maturity of the Hold-the- Offering-Price Maturities, the Representative would neither offer nor sell any of the unsold Bonds of such Maturity to any person at a price that is higher than the Initial Offering Price for such Maturity during the Holding Period for such Maturity (the “hold-the- offering-price rule”), an d (iii) any selling group agreement shall contain the agreement of each dealer who is a member of the selling group, and any retail distribution agreement shall contain the agreement of each broker-dealer who is a party to the retail distribution agreement, to comply with the hold-the-offering-price rule. The Representative, on behalf of itself, and not on behalf of the Underwriting Group, represents that it has not offered or sold unsold Bonds of any Maturity of the Hold-the- Offering Price Maturities, acq uired by the Representative, at a
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price that is higher than the respective Initial Offering Price for that Maturity of such Bonds during the Holding Period.
3. Pricing Wire or Equivalent Communication . A copy of the pricing wire or equivalent communication for the Bonds is attached to this certificate as Schedule B.
4. Defined Terms.
(a) General Rule Maturities means those Maturities of the Bonds listed in Schedule A hereto as the “General Rule Maturities.”
(b) Hold-the-Offering-Price Maturities means t hose Maturities of the Bonds listed in Schedule A hereto as the “Hold-the-Offering-Price Maturities.” (c) Holding Period means, with respect to a Hold -the-Offering-Price Maturity, the period starting on the Sale Date and ending on the earlier of (i) the close of the fifth business day after the Sale Date, or (ii) the date on which the Underwriter sold at least 10% of such H old-the-Offering-Price Maturity to the Public at prices that are no higher than the Initial Offering Price for such Hold-the-Offering-Price Maturity. (d) Issuer means the Public Utilities Commission of the City and County of San Francisco.
(e) Maturity means Bonds with the same credit and payment terms. The Bonds with different maturity dates, or Bonds with the same maturity date but different stated interest rates, are treated as separate maturities. (f) Public means any person (including an individual, t rust, estate, partnership, association, company, or corporation) other than an Underwriter or a related party to an Underwriter. The term “related party” for purposes of this certificate generally means any two or more persons who have greater than 50 percent common ownership, directly or indirectly.
(g) Sale Date means the first day on which there is a binding contract in writing for the sale of a Maturity of the Bonds. The Sale Date of the Bonds is ________, 2022.
(h) Underwriter means (i) any person that agrees pursuant to a written contract with the Issuer (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the Public, and (ii) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (i) of this paragraph to participate in the initial sale of the Bonds to the Public (including a member of a selling group or a party to a retail distribution agreement participating in the initial sale of the Bonds to the Public).
The representations set forth in this certificate are limited to factual matters only.
Nothing in this certificate represents the Representative’s interpretation of any laws, including
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specifically Sections 103 and 148 of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations thereunder. The undersigned understands that the foregoing information will be relied upon by the Issuer with respect to certain of the representations set forth in the Tax Certificate and with respect to compliance with the federal income tax rules affecting the Bonds, and by Kutak Rock LLP and Curls Bartling P.C., in connection with rendering its opinion that the interest on the Bonds is excluded from gross income for federal income tax purposes, the preparation of the Internal Revenue Service Form 8038-G, and other federal income tax advice that it may give to the Issuer from time to time relating to the Bonds.
CITIGROUP GLOBAL MARKETS INC., as
Representative of the Underwriting Group
By
Authorized Representative
Dated: ________, 2022
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SCHEDULE A
SALE PRICES OF THE GENERAL RULE MATURITIES AND
INITIAL OFFERING PRICES OF THE HOLD-THE-OFFERING-PRICE MATURITIES $______________
2022 SERIES A
(Refunding)
(SSIP) (Green Bonds)
Maturity
(October 1)
Principal
Amount
Interest
Rate Yield Price
10% Test Used
HTP
Rule
Used
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$______________
2022 SERIES B
(Refunding)
(Non-SSIP) (Green Bonds)
Maturity
(October 1)
Principal
Amount
Interest
Rate Yield Price
10% Test Used
HTP
Rule
Used
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SCHEDULE B
PRICING WIRE OR EQUIVALENT COMMUNICATION
(Attached)
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APPENDIX B
FORM OF CITY ATTORNEY OPINION
__________, 2022
Public Utilities Commission
of the City and County of San Francisco
San Francisco, California
Board of Supervisors
of the City and County of San Francisco
San Francisco, California
RE:
$_______ Public Utilities Commission of the City and County of San Francisco Wastewater Revenue Bonds, 2022 Series A and 2022 Series B Ladies and Gentlemen:
This office has acted as co unsel to the Public Utilities Commission of the City and County of San Francisco (“Commission”) with respect to the issuance of its $_____ aggregate principal amount of Wastewater Revenue Bonds comprised of $______ aggregate principal amount of 2022 Series A (Refunding) (SSIP) (Green Bonds) and $______ aggregate principal amount of 2022 Series B (Refunding) (Non- SSIP) (collectively, the “Bonds”). The Bonds are being issued pursuant to the Constitution and the laws of the State of California, the Charter of the City and County of San Francisco (“City”), and a Fourteenth Supplemental Indenture, between the Commission and U.S. Bank Trust Company, National Association, as successor trustee (“Trustee”), dated as of _____ 1, 2022, supplementing the Original Indenture, dated as of January 1, 2003, between the Commission and the Trustee, as successor trustee, as amended and supplemented to date (collectively, the “Indenture”). All capi talized terms not otherwise defined herein shall have the meanings ascribed to such terms in the Indenture.
In connection therewith, the undersigned has examined such documents, certificates and instruments as the undersigned deemed necessary for the purposes of this opinion, including, but not limited to, the Indenture, the Forward Delivery Purchase Contract, dated _____, 2022 (the “Forward Delivery Purchase Contract”), by and between the Commission and Citigroup Global Markets Inc., as representative of t he underwriters named therein, the Escrow Agreement, [as executed and to be delivered on the date of delivery of the Bonds] 1, by and between the
Commission and the Trustee, the Continuing Disclosure Certificate of the Commission, as executed and to be deli vered on the date of delivery of the Bonds 1 (“Continuing Disclosure
Certificate”), Resolution No. 22-______ of the Commission adopted on ____, 2022 (“Commission Resolution”), Ordinance No. 173-20 of the Board of Supervisors of the City (the “Board of Supervisors”) passed by a two-thirds vote on September 29, 2020; and signed by the Mayor on October 1, 2020 (“City Ordinance”).
1 To be excluded from opinion delivered on the Settlement Date.
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In reviewing the documents and matters referred to above, the undersigned has not undertaken to verify independently and has assume d the accuracy of the factual matters represented, warranted or certified therein . The undersigned has examined the Charter of the City. The opinions expressed herein are based on an analysis of existing laws, regulations, rulings and court decisions and cover certain matters not directly addressed by such authorities .
Such opinions may be affected by actions taken or omitted or events occurring after the date hereof. We have not undertaken to determine, or to inform any person, whether any such actions are taken or omitted or events do occur or any other matters come to our attention after the date hereof. We disclaim any obligation to update this opinion. We have assumed the genuineness of all documents and signatures presented to us (whether as originals or as copies) and the due and legal execution and delivery thereof by, and validity against, any parties other than the Commission. In addition, we call attention to the fact that the rights and obligations under the Indenture, the Bonds and the Escrow Agreement and their enforceability may be subject to bankruptcy, insolvency, reorganization, arrangement, fraudulent conveyance, moratorium and other laws relating to or affecting creditors’ rights, to the application of equitable principles, to the exercise of judicial discretion in appropriate cases and to the limitations on legal remedies against cities and counties in the State of California . We express no opinion with respect to any indemnification, contribution, penalty, choice of law, choice of forum, choice of venue, waiver or severability provisions contained in the foregoing documents.
Based upon and subject to the foregoing, the undersigned is of the opinion that:
1. The Commission is duly organized and validly existing as a commission of the City under and pursuant to the Charter of the City.
2. The Commission Resolution and City Ordinance were duly passed at meetings of the Commission and the Board of Supervisors, respectively. The meetings were called and held pursuant to law, with all public notice required by law and at which a quorum was present and acting throughout. The Commission Resolution and City Ordinance are in full force and effect , as of the date hereof, and have not been modified, amended or rescinded since their approval date.
3. To the best of the undersigned’s knowledge, no action, suit, proceeding, inquiry or investigation, at law or in equity before or by any court, governmental agency, public board or body, is pending or threatened against the Commission to restrain or enjoin the issuance of the Bonds, or in any way contesting the validity of the Indenture, Continuing Disclosure Certificate, the Escrow Agreement, the Forward Delivery Purchase Contract , the City Ordinance or the City Resolution.
4. There is no litigation pending, with service of process having been accomplished, questioning the existence of the City or the Commission, or contesting the power of the Commission to fix water rates and charges, or in any way contesting or affecting (i) the proceedings under which the Bonds are to be issued, (ii) the validity of the Bonds or the validity of the Indenture, (iii) the pledge of Revenues by the Commission under the Indenture or (iv) the title to the office of the present members of the Board of Supervisors or the Commission; nor are there suits or claims against the City or the Commission which would materially impair the ability of the Commission to pay principal or interest on the Bonds when due.
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5. The [Indenture, Continuing Disclosure Certificate, the Escrow Agre ement and] 2 the Forward Delivery Purchase Contract have been duly authorized, executed and delivered by the Commission, and constitute valid and binding agreements of the Commission enforceable in accordance with their respective terms.
This letter is furnished for the benefit of the above -addressed parties, and is not intended to, and shall not, be relied upon by anyone other than the above -addressees. This letter shall not be circulated, quoted or otherwise referred to or relied upon for any other purpose or by any other person. The City Attorney does not undertake any obligation to update this letter . Other than the Commission and the City, no attorney -client relationship has existed or exists between this office and any other party.
Very truly yours,
2 Forward Delivery Purchase Contract only at Closing. Indenture, Continuing Disclosure Certificate, Escrow Agent and Forward Delivery Purchase Contract at Settlement.
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APPENDIX C
CITY CONTRACTING PROVISIONS
Each Underwriter shall comply with the following provisions of this Forward Delivery Purchase Contract as if set forth in the text thereof . Capitalized terms used but not defined in this exhibit shall have the meanings given in the Forward Delivery Purchase Contract.
1. N ondiscrimination; Penalties .
(a) Nondiscrimination in Contracts . Each Underwriter shall comply with the provisions of Chapters 12B and 12C of the San Francisco Administrative Code . Each Underwriter shall incorporate by reference in any subcontracts the provisions of Sections12B.2(a), 12B.2(c)- (k), and 12C.3 of the San Francisco Administrative Code and shall require any subcontractors to comply with such provisions. Each Underwriter is subject to the enforcement and penalty provisions in Chapters 12B and 12C. (b) Nondiscrimination in the Provision of Employee Benefits , San Francisco Administrative Code 12B.2. Each Underwriter does not as of the date of this Forward Delivery Purchase Contract, and will not during the term of this Forward Delivery Purchas e Contract, in any of its operations in San Francisco, on real property owned by San Francisco, or where work is being performed for the City elsewhere in the United States, discriminate in the provision of employee benefits between employees with domestic partners and employees with spouses and/or between the domestic partners and spouses of such employees, subject to the conditions set forth in San Francisco Administrative Code Section12B.2. (c) Condition to Contract . As a condition to the Forward Delivery Purchase Contract, each Underwriter shall execute the “Chapter 12B Declaration : Nondiscrimination in Contracts and Benefits” form (form HRC -12B-101) with supporting documentation and secure the approval of the form by the San Francisco Human Rights Commission.
2. M
acBride Principles —Northern Ireland . The provisions of San Francisco Administrative Code §12F are incorporated by this reference and made part of this Forward Delivery Purchase Contract . By entering into this Forward Delivery Purchase Contra ct, each Underwriter confirms that it has read and understood that the City urges companies doing business in Northern Ireland to resolve employment inequities and to abide by the MacBride Principles, and urges San Francisco companies to do business with corporations that abide by the MacBride Principles.
3. Tropical Hardwood and Virgin Redwood Ban. Under San Francisco Environment Code Section 804(b), the City urges each Underwriter not to import, purchase, obtain, or use for any purpose, any tropical hardwood, tropical hardwood wood product, virgin redwood or virgin redwood wood product.
4. Alcohol and Drug-F
ree Workplace. The City reserves the right to deny access to, or require each Underwriter to remove from, City facilities personnel of such Underwrit er who the City has reasonable grounds to believe has engaged in alcohol abuse or illegal drug activity
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which in any way impairs the City’s ability to maintain safe work facilities or to protect the health and well-being of City employees and the general public . The City shall have the right of final approval for the entry or re -entry of any such person previously denied access to, or removed from, City facilities . Illegal drug activity means possessing, furnishing, selling, offering, purchasing, using or being under the influence of illegal drugs or other controlled substances for which the individual lacks a valid prescription. Alcohol abuse means possessing, furnishing, selling, offering, or using alcoholic beverages, or being under the influence of alcohol.
5. C
ompliance with Americans with Disabilities Act. Each Underwriter shall provide the services specified in the Forward Delivery Purchase Contract in a manner that complies with the Americans with Disabilities Act (ADA), including but not limited to Title II’s program access requirements, and all other applicable federal, state and local disability rights legislation.
6. Sunshine Ordinance. Each Underwriter acknowledges that this Forward Delivery Purchase Contract and all records related to its formation, such Underwriter’s performance of services provided under the Forward Delivery Purchase Contract, and the City’s payment are subject to the California Public Records Act, (California Government Code §6250 et. seq.), and the San Francisco Sunshine Ordinance, (San Francisco Administrative Code Chapter 67) . Such records are subject to public inspection and copying unless exempt from disclosure under federal, state or local law.
7. Limitations on Contributions .
By executing this Forward Delivery Purchase
Contract, each Underwriter acknowledges its obligations under section 1.126 of the City’s Campaign and Governmental Conduct Code, which prohibits any person who contracts with, or is seeking a contract with, any department of the City for the rendition of personal services, for the furnishing of any material, supplies or equipment, for the sale or lease of any land or building for a grant, loan or loan guarantee, or for a development agreement, from making any campaign contribution to (1) a City elected official if the contract must be approved by that official, a board on which that official serves, or the board of a state agency on which an appointee of that official serves, (2) a candidate for that City elective office held by such individual, or (3) a committee controlled by such elected official or a candidate for that office, at any time from the submission or a proposal for the contract until the later of either the termination of negotiations for such contract or twelve mo nths after the date the City approves the contract . The prohibition on contributions applies to each prospective party to the contract; each member of each Underwriter’s board of directors; each Underwriter’s chairperson, chief executive officer, chief financial officer and chief operating officer; any person with an ownership interest of more than 10 percent in such Underwriter; any subcontractor listed in the bid or contract; and any committee that is sponsored or controlled by such Underwriter. Each Underwriter certifies that it has informed each such person of the limitation on contributions imposed by Section 1.126 by the time it submitted a proposal for such contract and has provided the names of the persons required to be informed to the City department with whom it is contracting.
8. Requiring Minimum Compensation for Covered Employees. Each Underwriter shall pay covered employees no less than the minimum compensation required by San Francisco Administrative Code Chapter 12P. Each Underwriter is subject to the enforcement and penalty
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provisions in Chapter 12P. By entering into this Forward Delivery Purchase Contract, each Underwriter certifies that it is in compliance with Chapter 12P.
9. Requiring H ealth Benefits for Covered Employees. Each Underwriter shall comply with San Francisco Administrative Code Chapter 12Q. Each Underwriter shall choose and perform one of the Health Care Accountability options set forth in San Francisco Administrative Code Chapter 12Q.3. Each Under writer is subject to the enforcement and penalty provisions in Chapter 12Q.
10. Prohibition on Political Activity with City Funds . I n performing the services provided under the Forward Delivery Purchase Contract, each Underwriter shall comply with San Francisco Administrative Code Chapter 12G, which prohibits funds appropriated by the City for this Forward Delivery Purchase Contract from being expended to participate in, support, or attempt to influence any political campaign for a candidate or for a ba llot measure . Each Underwriter is subject to the enforcement and penalty provisions in Chapter 12G.
11. Nondisclosure of Private, Proprietary or Confidential Information. If this F orward
Delivery Purchase Contract requires the City to disclose “Private Information” to an Underwriter within the meaning of San Francisco Administrative Code Chapter 12M, each Underwriter shall use such information consistent with the restrictions stated in Chapter 12M and in this Forward Delivery Purchase Contract and only as necessary in performing the services provided under the Forward Delivery Purchase Contract . Each Underwriter is subject to the enforcement and penalty provisions in Chapter 12M.
In the performance of services provided under the Forward Delivery Purchase C
ontract, each Underwriter may have access to the City’s proprietary or confidential information, the disclosure of which to third parties may damage the City. If the City discloses proprietary or confidential information to an Underwriter, such information must be held by such Underwriter in confidence and used only in performing the Forward Delivery Purchase Contract. Each Underwriter shall exercise the same standard of care to protect such information as a reasonably prudent contractor would use to protect its own proprietary or confidential information.
12. C
onsideration of Criminal History in Hiring and Employment Decisions. Each Underwriter agrees to comply fully with and be bound by all of the provisions of Chapter 12T, “City Contractor/Subcontractor Consideration of Criminal History in Hiring and Employment Decisions,” of the San Francisco Administrative Code (“Chapter 12T”), including the remedies provided, and implementing regulations, as may be amended from time to time. The provisions of Chapter 12T are incorporated by reference and made a part of this Forward Delivery Purchase Contract. The text of Chapter 12T is available on the web at http://sfgov.org/olse/fco. A partial listing of some of the Underwriters’ obligations under Chapter 12T is set forth in this Section .
Each Underwriter is required to comply with all of the applicable provisions of Chapter 12T, irrespective of the listing of obligations in this Section . Capitalized terms used in this Section and not defined in this Forward Delivery Purchase Contract shall have the meanings assigned to such terms in Chapter 12T.
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The requirements of Chapter 12T shall only apply to an Underwriter’s operations to the extent those operations are in furtherance of the performance of this Forward Delivery Purchase Contract, shall apply only to applicants and employees who would be or are performing work in furtherance of this Forward Delivery Purchase Contract, and shall apply when the physical location of the employment or prospective employment of an individual is wholly or substantially within the City of San Francisco. Chapter 12T shall not apply when the application in a particular context would conflict with federal or state law or with a requirement of a government agency implementing federal or state law.
13. S
ubmitting False Claims; Monetary Penalties . The full text of San Francisco Administrative Code §§ 21.35, including the enforcement and penalty provisions, is incorporated into this Forward Delivery Purchase C ontract. Under San Francisco Administrative Code §21.35, any contractor, subcontractor or consultant who submits a false claim shall be liable to the City for the statutory penalties set forth in that section. A contractor, subcontractor or consultant will be deemed to have submitted a false claim to the City if the contractor, subcontractor or consultant : (a) knowingly presents or causes to be presented to an officer or employee of the City a false claim or request for payment or approval; (b) knowingly makes, uses, or causes to be made or used a false record or statement to get a false claim paid or approved by the City; (c) conspires to defraud the City by getting a false claim allowed or paid by the City; (d) knowingly makes, uses, or causes to be made or used a false record or statement to conceal, avoid, or decrease an obligation to pay or transmit money or property to the City; or (e) is a beneficiary of an inadvertent submission of a false claim to the City, subsequently discovers the falsity of the claim, and fails to disclose the false claim to the City within a reasonable time after discovery of the false claim.
14. Conflict of Interest . B
y entering into the Forward Delivery Purchase Contract, each Underwriter certifies that it does not know of any fact which constitutes a violation of Section 15.103 of the City’s Charter; Article III, Chapter 2 of City’s Campaign and Governmental Conduct Code; Title 9, Chapter 7 of the California Government Code (Section 87100 et seq.), or Title 1, Division 4, Chapter 1, Article 4 of the California Government Code (Section 1090 et seq.), and further agrees promptly to notify the City if it becomes aware of any such fact during the term of this Forward Delivery Purchase Contract.
15. Assignment .
The services provided under the Forward Delivery Purchase Contract to be performed by each Underwriter are personal in character and neither this Forward Delivery Purchase Contract nor any duties or obligations may be assigned or delegated by an Underwriter unless first approved by the City by written instrument executed and approved in the same manner as this Forward Delivery Purchase Contract . Any purported assignment made in violation of this provision shall be null and void.
16. Food S ervice Waste Reduction Requirements. Each Underwriter shall comply with the Food Service Waste Reduction Ordinance, as set forth in San Francisco Environment Code Chapter 16, including but not limited to the provided remedies for noncompliance.
17. Cooperative Drafting. This Forward Delivery Purchase Contract has been drafted through a cooperative effort of the City and the Underwriters, and all parties have had an opportunity to have the Forward Delivery Purchase Contract reviewed and revised by legal
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counsel. No party shall be considered the drafter of this Forward Delivery Purchase Contract, and no presumption or rule that an ambiguity shall be construed against the party drafting the clause shall apply to the interpretation or enforcement of this Forward Delivery Purchase Contract.
18. Sugar- S weetened Beverage Prohibition . Each Underwriter agrees that it will not sell, provide, or otherwise distribute Sugar -Sweetened Beverages, as defined by San Franci sco Administrative Code Chapter 101, as part of its performance of this Forward Delivery Purchase Contract.
19. First Source Hiring Program . Each Underwriter must comply with all of the provisions of the First Source Hiring Program, Chapter 83 of the San Francisco Administrative Code, that apply to this Forward Delivery Purchase Contract, and each Underwriter is subject to the enforcement and penalty provisions in Chapter 83.
20. Laws Incorporated by Reference. T
he full text of the laws listed in this Exhibit A,
including enforcement and penalty provisions, are incorporated into this Forward Delivery Purchase Contract by reference. The full text of the San Francisco Municipal Code provisions incorporated by reference in this Exhibit A are available at www.sfgov.org under “Open Gov.”
21. Prevailing Wages . S
ervices to be performed by the Underwriter under this
Agreement may involve the performance of trade work covered by the provisions of Section
6.22(e) of the Administrative Code or Section 21C (collec tively, “Covered Services”) . The provisions of Section 6.22(e) and 21C of the Administrative Code are incorporated as provisions of this Agreement as if fully set forth herein and will apply to any Covered Services performed by each Underwriter.
4879-0551-6302.3
ESCROW AGREEMENT
by and between
PUBLIC UTILITIES COMMISSION OF THE
CITY AND COUNTY OF SAN FRANCISCO
and
U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION
as Trustee/Escrow Agent
relating to
$193,400,000
Public Utilities Commission of the City and
County of San Francisco
Wastewater Revenue Bonds
2013 Series A
(Refunding)
$331,585,000
Public Utilities Commission of the City and
County of San Francisco
Wastewater Bonds
2013 Series B
Dated as of [__________], 2022
4879-0551-6302.3
ESCROW AGREEMENT
THIS ESCROW AGREEMENT, dated as of May [__], 2022 (the “Escrow Agreement”), is by and between the PUBLIC UTILITIES COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO ( the “Commission”) and U.S. Bank Trust Company, National Association ( as successor in interest to U.S. Bank, National Association) , a national banking association duly organized and existing under and by virtue of the laws of the United States of America, as trustee for the Refunded Bonds (as defined herein) and as escrow agent (the “Trustee/Escrow Agent”) hereunder.
W I T N E S S E T H :
WHEREAS, pursuant to the Indenture, dated as of January 1, 2003 (the “Original Indenture”), by and between the Commission and U.S. Bank Trust Company, National Association (as successor in interest to U.S. Bank, National Association) , as trustee thereunder (the “Trustee”), as amended and supplemented, and that certain Second Supplemental Indenture, dated as of January 1, 2013 (the “Second Supplemental Indenture ”), by and between the Commission and the Trustee, the Commission previously issued its Wastewater Revenue Bonds, 2013 Series A (Refunding), in the original aggregate principal amount of $193,400,000 (the “2013 Series A Bonds”); and
WHEREAS, pursuant to the Original Indenture and that certain Third Supplemental Indenture, dated as of February 1, 2013 (the “Third Supplemental Indenture”, and together with the Original Indenture and the Second Supplemental Indenture, referred to as the “ Indenture” herein), by and between the Commission and the Trustee, the Commission previously issued its Wastewater Revenue Bonds, 2013 Series B Bonds, in the aggregate principal amount of $331,585,000 (the “2013 Series B Bonds ”, and together with the 2013 Series A Bonds, the “2013AB Bonds”);
WHEREAS, pursuant to Section 9.109 of the Charter of the City and County of San Francisco, the Board of Supervisors (the “ Board”) of the City and County of San Francisco (the “City”) is authorized to provide for the issuance of revenue refunding bonds , for which no voter approval is required, for the purpose of refunding any outstanding revenue bonds of the City provided such refunding bonds are expected to result in net debt service savings to the City on a present value basis, calculated as provided by ordinance; WHEREAS, on September 29, 2020, the Board adopted Ordinance No. 173-20, signed by the Mayor on October 1, 2020, approving, among other things, the issuance and sale of wastewater revenue bonds, pursuant to Article VIIIB of the Charter of the City, in an aggregate principal amount not to exceed $349,919,252, to finance capital project benefiting the Wastewater Enterprise, and further authorized the approved the issuance of wastewater revenue refunding bonds, to refund any outstanding obligations of the Wastewater Enterprise, subject to the limitations set forth therein; and
WHEREAS, on [April 12 ], 2022, the Commission passed its Resolution No. 22-[___], approving, among other things, the issuance of its wastewater revenue bonds to refund the Refunded Bonds (as defined herein); and
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WHEREAS, under the authority granted under the Charter and by the ordinances and resolution hereinabove mentioned, the Commission is, simultaneously with the execution of this Escrow Agreement, issuing its: (i) Wastewater Revenue Bonds, 2022 Series A (Refunding) (SSIP) (Green Bonds) (in the aggregate principal amount of $[__________] (the “2022 Series A Bonds”) for the purpose of providing moneys, a portion of which will be used to current refund and defease the 2013 Series A Bonds set forth in Exhibit A-1 attached hereto (the “Refunded 2013A Bonds”), and (ii) Wastewater Revenue Bonds, 2022 Series B (Refunding) (Non-SSIP) in the aggregate principal amount of $[__________] (the “2022 Series B Bonds”, and together with the 2022 Series A Bonds, the “2022AB Bonds”) for the purpose of providing moneys, a portion of which will be used to current refund and defease the 2013 Series B Bonds set forth in Exhibit A -2 attached hereto (the “Refunded 2013B Bonds”), and together, with the Refunded 2013A Bonds , the “Refunded Bonds”), on October 1, 2022 (the “Redemption Date”), at a redemption price equal to 100% of the outstanding aggregate principal amount thereof, together with interest accrued with respect to the Refunded Bonds through the Redemption Date (“Redemption Price”); and NOW, THEREFORE, in consideration of the mutual covenants and agreements herein c
ontained, the Commission and the Trustee/Escrow Agent agree as follows:
Section 1. Establishment and Maintena nce of Escrow Fund s. The Trustee/Escrow Agent hereby agrees to establish and maintain a separate escrow fund for the Refunded 2013A Bonds securing the Refunded 2013A Bonds (the “Refunded 2013A Bonds Escrow Fund”) and a separate escrow fund for the Refunded 2013B Bonds securing the Refunded 2013B Bonds (the “Refunded 2013B Bonds Escrow Fund” , and together with the Refunded 2013A Bonds Escrow Fund, the “Escrow Funds”), and to hold the securities, investments and moneys therein at all times as special funds and separate trust accounts. All securities, investments and moneys in the Escrow Funds, are hereby irrevocably pledged, subject to the provisions of Section 4 and Section 6 hereof, to secure the payment of the applicable Refunded Bonds.
Section 2. Deposits to the Escrow Funds.
(a) Refunded 2013A Bonds Escrow Fund. Concurrently with the execution and delivery of this Escrow Agreement, the Commission hereby directs the Trustee/Escrow Agent to, and the Trustee/Escrow Agent shall, deposit the sum of : (i) $[__________], derived from the proceeds of the sale of the 2022 Series A Bonds (which the Commission caused to be transferred to the Trustee/Escrow Agent on [Closing Date]) to the Refunded 2013A Bonds Escrow Fund, [and (ii) $[_______] from the [Interest] Fund, attributable to the applicable Refunded Bonds].
(b) Refunded 2013B Bonds Escrow Fund. Concurrently with the execution and delivery of this Escrow Agreement, the Commission hereby directs the Trustee/Escrow Agent to, and the Trustee/Escrow Agent shall, deposit the sum of : (i) $[__________], derived from the proceeds of the sale of the 2022 Series B Bonds (which the Commission caused to be transferred to the Trustee/Escrow Agent on [Closing Date]) to the Refunded 2013B Bonds Escrow Fund, [and (ii) $[_______] from the [Interest] Fund, attributable to the applicable Refunded Bonds].
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Section 3. Investment of Moneys in the Escrow Funds.
(a) R efunded 2013A Bonds Escrow Fund. The Trustee/Escrow Agent hereby acknowledges receipt of $[______] as described in Section 2 (a) above, and that such amounts were deposited to the Refunded 2013A Bonds Escrow Fund. The Commission hereby directs the Trustee/Escrow Agent to, and the Trust ee/Escrow Agent shall, on [Closing Date], use $[______] on deposit in the Refunded 2013A Bonds Escrow Fund to purchase the securities described in Exhibit B-1 attached hereto (the “Initial Government Securities (Refunded 2013A Bonds)”), and shall retain $[______] in the Refunded 2013A Bonds Escrow Fund as a beginning cash balance.
(b) Refunded 2013B Bonds Escrow Fund. The Trustee/Escrow Agent hereby a
cknowledges receipt of $[______] as described in Section 2( b) above, and that such amounts were deposited to the Refunded 2013B Bonds Escrow Fund. The Commission hereby directs the Trustee/Escrow Agent to, and the Trustee/Escrow Agent shall, on [Closing Date], use $[______] on deposit in the Refunded 2013B Bonds Escrow Fund to purchase the securities described in Exhibit B-2 attached hereto (the “Initial Government Securities (Refunded 2013B Bonds)”), and together with the Initial Government Securities (Refunded 2013A Bonds), the “ Initial Government Securities ”), and shall retain $[______] in the Refunded 2013B Bonds Escrow Fund as a beginning cash balance.
The Trustee/Escrow Agent s hall purchase the Initial Government Securities as provided in this Section and shall hold such Initial Government Securities, the beginning cash balance and any earnings received thereon and any reinvestment thereof pursuant to this Escrow Agreement and disburse such amounts as provided herein. The Trustee/Escrow Agent shall collect amounts due and shall sell or otherwise liquidate investments in the Escrow Funds as needed to make the payments and transfers required by this Escrow Agreement and may subs titute different Government Securities, as defined and subject to the terms and limitations of Section 7 hereof, for the Initial Government Securities but otherwise shall have no power or duty to sell, transfer, request the redemption of or otherwise dispose of the Initial Government Securities.
Section 4.
Redemption of the Refunded Bonds.
(a) T he Commission hereby directs the Trustee/Escrow Agent to, and the Trustee/Escrow Agent shall, on the Redemption Date, withdraw from the Escrow Funds, amounts sufficient to pay the Redemption Price of the applicable Refunded Bonds on the Redemption Date (such amounts described in Exhibits C-1 and C-2 attached hereto). Such transfers shall constitute the respective payments of the principal, interest, and premium, if any, with respect to the applicable Refunded Bonds and the Redemption Price due from the Commission. The holders of the Refunded Bonds shall have a first lien on the moneys and Government Securities in the Escrow Fund applicable to their Refunded Bonds which are allowable and sufficient to pay such Refunded Bonds until such moneys and Government Securities are used and applied as provided in this Escrow Agreement. Any cash or securities held in the Escrow Funds are irrevocably pledged only to the holders of the applicable Refunded Bonds. Upon deposit of the moneys and Government Securities with the Trustee/Escrow Agent pursuant to the provisions of Section s 1 and 2 hereof, the 4 4879-0551-6302.3
holders of the Refunded Bonds shall cease to be entitled to any lien, benefit or security under the Indenture.
Section 5. Possible Deficiencies . If at any time it shall appear to the Trustee/Escrow Agent that the moneys in the Escrow Funds will not be sufficient to make all payments required by Section 4 hereof, the Trustee/Escrow Agent shall notify the Commission in writing as soon as reasonably practicable of such fact and the amount of such deficiency. Thereupon the Commission shall use its best efforts to obtain and deposit with the Trustee/Escrow Agent for deposit in the Escrow Funds, from any legally available moneys, such additional moneys as may be required to meet fully the aggregate amounts to become due and payable on the applicable Refunded Bonds as the same become due. The Trustee/Escrow Agent shall in no manner be responsible for the Commission’s failure to make any such deposit. The Trustee/Escrow Agent may conclusively rely on the report of a nationally recognized firm of independent certified public accountants delivered with respect to the Escrow Funds as to the sufficiency of the amounts therein to pay the applicable Refunded Bonds in accordance with Section 4 hereof.
Section 6. Unclaimed Moneys . The Trustee/Escrow Agent shall retain all unclaimed moneys, together with interest thereon, in the Escrow Funds and shall invest such unclaimed moneys as directed in writing by the Commission. At such time as the Commission delivers to the Trustee/Escrow Agent written notice that no additional amounts from the Escrow Funds will be needed to redeem the applicable Refunded Bonds, or on [_______], 2022, whichever occurs first, the Trustee/Escrow Agent shall transfer all amounts then remaining in the Escrow Funds to the Commission and thereafter the holders of the applicable Refunded Bonds shall look only to the Commission for payment and the Trustee/Escrow Agent shall have no responsibility or liability whatsoever with respect to any of such moneys. At such time as no amounts remain in the Escrow Funds, they shall be closed.
Section 7. Reinvestment; Substitution of Government Securities . Except as specifically provided below, the Trustee/Escrow Agent may not sell, transfer, request the redemption of or otherwise dispose of the Initial Government Securities.
Interest income and other amounts received by the T
rustee/Escrow Agent as payments on
the Initial Government Securities held in the Escrow Funds shall be held as part of the Escrow Funds to be used for the purposes set forth in Section 4 hereof and may be invested by the Trustee/Escrow Agent at the written direction of the Commission; provided that (a) such amounts may only be invested as permitted by the Indenture; and (b) such investments shall have maturities which do not extend beyond the date on which the moneys so invested will be needed to make payments required by Section 4 hereof.
Upon written direction of the Commission, the Trustee/Escrow Agent may sell, liquidate, or otherwise dispose of some or all of the Initial Government Securities then held as an investment in the Escrow Funds and reinvest the proceeds thereof, together with other moneys held in the Escrow Funds in different securities, as permitted by the Indenture, provided that no such substitution shall occur unless (i) the amounts of and dates on which the anticipated withdrawals from the Escrow Funds by the Trustee/Escrow Agent for the payment of the principal of, redemption price of, and interest on the applicable Refunded Bonds will not be diminished or postponed thereby, (ii) the Trustee/Escrow Agent shall receive the unqualified opinion of 5 4879-0551-6302.3
nationally recognized municipal bond counsel to the effect that such reinvestment and substitution will not adversely affect the exclusion from gross income for federal income tax purposes of interest on the 2022AB Bonds (if applicable) or the applicable Refunded Bonds (if applicable), (iii) the Trustee/Escrow Agent shall receive from a firm of in dependent certified public accountants a certification that, immediately after such reinvestment and substitution, the principal of and interest on obligations in the Escrow Funds will, together with other cash on deposit in the Escrow Funds available for such purposes, be sufficient without reinvestment to pay, when due, the principal or redemption price of and interest on the applicable Refunded Bonds; and (iv) the Trustee/Escrow Agent shall receive an opinion of nationally recognized bond counsel that such reinvestment and substitution is permissible under this Escrow Agreement and that the conditions under this Section 7 have been satisfied.
Section 8. Performance of Duties . The Trustee/Escrow Agent agrees to perform the duties set forth herein.
Section 9. Indemnity. The Commission hereby assumes liability for, and hereby agrees (whether or not any of the transactions contemplated hereby are consummated) to indemnify, protect, save and keep harmless the Trustee/Escrow Agent and its respective successors, assigns, directors, officers, agents, employees and servants, from and against any and all liabilities, obligations, losses, damages, penalties, claims, actions, suits, costs, expenses and disbursements (including reasonable legal fees and disbursements) of whatsoever kind and nature which may be imposed on, incurred by, or asserted against, the Trustee/Escrow Agent at any time (whether or not also indemnified against the same by the Commission or any other person under any other agreement or instrument, but without double indemnity) in any way relating to or arising out of the execution, delivery and performance of this Escrow Agreement, the establishment hereunder of the Escrow Funds, the acceptance of the funds deposited therein and any payment, transfer or other application of moneys by the Trustee/Escrow Agent in accordance with the provisions of this Escrow Agreement; provided, however, that the Commission shall not be required to indemnify the Trustee/Escrow Agent against the Trustee/Escrow Agent ’s own negligence or willful misconduct or the negligent or willful misconduct of the Trustee/Escrow Agent’s respective agents and employees. In no event shall the Commission or the Trustee/Escrow Agent be liable to any person by reason of the transactions contemplated hereby other than to each other as set forth in this Section 9. The indemnities contained in this Section 9 shall survive the termination of this Escrow Agreement or the earlier removal or resignation of the Trustee/Escrow Agent.
Section 10. Responsibilities of the Trustee/Escrow Agent. The Trustee/Escrow Agent and its respective successors, assigns, agents and servants shall not be held to any personal liability whatsoever, in tort, contract or otherwise, in connection with the execution and delivery of this Escrow Agreement, the establishment of the Escrow Funds , the acceptance of the moneys deposited therein, the sufficiency of the funds deposited in the Escrow Funds to accomplish the defeasance of the applicable Refunded Bonds or any payment, transfer or other application of moneys or obligations by the Trustee/Escrow Agent in accordance with the provisions of this Escrow Agreement or by reason of any non-negligent act, non-negligent omission or non-negligent error of the Trustee/Escrow Agent made in good faith in the conduct of its duties. The recitals of fact contained in the “Whereas” clauses herein shall be taken as the statements of the Commission, and the Trustee/Escrow Agent assumes no responsibility for the correctness thereof. The Trustee/Escrow Agent makes no representation as to the sufficiency of the funds deposited in the 6 4879-0551-6302.3
Escrow Funds to accomplish the refunding of the applicable Refunded Bonds on the Redemption Date or to the validity of this Escrow Agreement as to the Commission and, except as otherwise provided herein, the Trustee/Escrow Agent shall incur no liability with respect thereto. The Trustee/Escrow Agent shall not be liable in connection with the performance of its duties under this Escrow Agreement except for its own negligence, willful misconduct, and the duties and obligations of the Trustee/Escrow Agent shall be determined by the express provisions of this Escrow Agreement. The Trustee/Escrow Agent may consult with counsel, who may or may not be counsel to the Commission, and in reliance upon the written opinion of such counsel shall have full and complete authorization and protection with respect to any action taken, suffered or omitted by it in good faith in accordance therewith. Whenever the Trustee/Escrow Agent shall deem it necessary or desirable that a matter be proved or established prior to taking, suffering, or omitting any action under this Escrow Agreement, such matter may be deemed to be conclusively established by a certificate signed by an authorized officer of the Commission.
The liability of the Trustee/Escrow Agent to make the payments required by this Escrow Agreement shall be limited to the moneys in the Escrow Funds.
No provision of this Escrow Agreement shall require the Trustee/Escrow Agent to expend or risk its own funds or otherwise incur any financial liability in the performance or exercise of any of its duties hereunder, or in the exercise of its rights or powers.
The Trustee/Escrow Agent shall not be liable for the accuracy of any calculations provided herein.
Any company into which the Trustee/Escrow Agent may be merged or converted or with which it may be consolidated or any company resulting from any merger, conversion or consolidation to which it shall be a party or any company to which the Trustee/Escrow Agent may sell or transfer all or substantially all of its corporate trust business shall be the successor to the Trustee/Escrow Agent without the execution or filing of any paper or further act, anything herein to the contrary notwithstanding.
The Commission shall pay the Trustee/Escrow Agent full compensation for its duties under this Escrow Agreement, including out -of-pocket costs such as publication costs, redemption or redemption expenses, legal fees and other costs and expenses relating hereto. Under no circumstances shall amounts deposited in the Escrow Funds be deemed to be available for said purposes.
The Trustee/Escrow Agent may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents, attorneys, custodians or nominees appointed with due care, and shall not be responsible for any willful misconduct or negligence on the part of any agent, attorney, custodian or nominee so appointed.
The Trustee/Escrow Agent may conclusively rely and shall be fully protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, approval or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties. 7 4879-0551-6302.3
Anything in this Escrow Agreement to the contrary notwithstanding, in no event shall the Trustee/Escrow Agent be liable for special, indirect, punitive or consequential loss or damage of any kind whatsoever (including but not limited to lost profits), even if the Trustee/Escrow Agent has been advised of the likelihood of such loss or damage and regardless of the form of action.
The Trustee/Escrow Agent shall have the right to accept and act upon instructions, including funds transfer instructions (“ Instructions”) given pursuant to this Escrow Agreement and delivered using Electronic Means (“ Electronic Means ”) shall mean the following communications methods: e -mail, facsimile transmission, secure electronic t ransmission containing applicable authorization codes, passwords and/or authentication keys issued by the Trustee/Escrow Agent, or another method or system specified by the Trustee/Escrow Agent as available for use in connection with its services hereunder ); provided, however, that the Commission shall provide to the Trustee/Escrow Agent an incumbency certificate listing officers with the authority to provide such Instructions (“ Authorized Officers”) and containing specimen signatures of such Authorized Officers, which incumbency certificate shall be amended by the Commission whenever a person is to be added or deleted from the listing. If the Commission elects to give the Trustee/Escrow Agent Instructions using Electronic Means and the Trustee/Escrow Agent in its discretion elects to act upon such Instructions, the Trustee/Escrow Agent’s understanding of such Instructions shall be deemed controlling. The Commission understands and agrees that the Trustee/Escrow Agent cannot determine the identity of the actual sender of such Instructions and that the Trustee/Escrow Agent shall conclusively presume that directions that purport to have been sent by an Authorized O fficer listed on the incumbency certificate provided to the Trustee/Escrow Agent have been sent by such Authorized Officer. The Commission shall be responsible for ensuring that only Authorized Officers transmit such Instructions to the Trustee/Escrow Agent and that the Commission and all Authorized Officers are solely responsible to safeguard the use and confidentiality of applicable user and authorization codes, passwords and/or authentication keys upon receipt by the Commission . The Trustee/Escrow Agent shall not be liable for any losses, costs or expenses arising directly or indirectly from the Trustee/Escrow Agent’s reliance upon and compliance with such Instructions notwithstanding such directions conflict or are inconsistent with a subsequent written instruction.
The Commission agrees: (a) to assume all risks arising out of the use of Electronic Means to submit Instructions to the Trustee/Escrow Agent , including without limitation the risk of the Trustee/Escrow Agent acting on unauthorized Instructions, and the risk of interception and misuse by third parties; (b) that it is fully informed of the protections and risks associated with the various methods of transmitting Instructions to the Trustee/Escrow Agent and that there may be more secure methods of transmitting Instructions than the method(s) selected by the Commission; (c) that the security procedures (if any) to be followed in connection with its transmission of Instructions provide to it a commercially reasonable degree of protection in light of its particular needs and circumstances; and (d) to notify the Trustee/Escrow Agent immediately upon learning of any compromise or unauthorized use of the security procedures.
Except with respect to any future reinvestment or substitution of Government Securities as m
ay be directed by the Commission as set forth in Section 7 hereof, the Trustee/Escrow Agent hereby represents that, as of the date hereof, it does not need any further certificate or direction from any other party in order to carry out the terms of this Escrow Agreement. 8 4879-0551-6302.3
Section 11. Irrevocable Instructions A s to Notice of Redemption and N otice of Defeasance. The Commission hereby directs the Trustee/Escrow Agent to give or cause to be given, and the Trustee/Escrow Agent agrees to give or cause to be given, notice of the redemption of the Refunded Bonds (a form of such notice being attached hereto as Exhibit D) at such time and in such manner as provided in the Indenture.
Additionally, the Commission he reby directs the Trustee/Escrow Agent to give or cause to be given, and the Trustee/Escrow Agent hereby agrees to give or cause to be given on the date hereof, notice of the defeasance of the Refunded Bonds (a form of such notice being attached hereto as Exhibit E ). Such notice of defeasance shall be mailed (or delivered via such other approved delivery method, including via electronically) to The Depository Trust Company. The Trustee/Escrow Agent is hereby further instructed to mail and to file with the Municipal Securities Rulemaking Board’s Electronic Municipal Market Access System (“EMMA”) upon the defeasance of the Refunded Bonds a notice of defeasance of the Refunded Bonds. The sole remedy for the Trustee/Escrow Agent’s failure to file such notice on EMMA shall be an action by the holders of the Refunded Bonds in mandamus for specific performance or similar remedy to compel performance.
The T
rustee/Escrow Agent hereby acknowledges that upon the funding of the Escrow Funds as provided in this Escrow Agreement, it is in receipt of the items constituting all of the conditions precedent to the r edemption of the Refunded Bonds under the Indenture and the Refunded Bonds shall be paid in accordance with the Indenture. Additionally, the Trustee/Escrow Agent hereby acknowledges the receipt of the documents required to be delivered to it in connection with the defeasance of the Refunded Bonds pursuant to the provisions of the Indenture, and upon redemption of the Refunded Bonds, the Refunded Bonds shall cease to be entitled to any lien, benefit or security under the Indenture.
Section 12. Amendments. T
his Escrow Agreement is made for the benefit of the
Commission and the holders from time to time of the Refunded Bonds and it shall not be repealed, revoked, altered or amended without the written consent of all such holders, the Trustee/Escrow Agent and the Commission; provided, however, but only after the receipt by the Trustee/Escrow Agent of an opinion of nationally recognized bond counsel that the exclusion from gross income of interest on the 2022AB Bonds (if applicable) and the Refunded Bonds (if applicable) will not be adversely affected for federal income tax purposes, the Commission and the Trustee/Escrow Agent may, without the consent of, or notice to, such holders, amend this Escrow Agreement or enter into such agreements supplemental to t his Escrow Agreement as shall not materially adversely affect the rights of such holders and as shall not be inconsistent with the terms and provisions of this Escrow Agreement for any one or more of the following purposes: ( a) to cure any ambiguity or for mal defect or omission in this Escrow Agreement; ( b) to grant to, or confer upon, the Trustee/Escrow Agent for the benefit of the holders of the Refunded Bonds any additional rights, remedies, powers or authority that may lawfully be granted to, or conferred upon, such holders or the Trustee/Escrow Agent ; and ( c) to include under this Escrow Agreement additional funds, securities or properties. The Trustee/Escrow Agent shall be entitled to rely conclusively upon an unqualified opinion of nationally recognized bond counsel with respect to compliance with this Section 12, including the extent, if any, to which any change, modification, addition or elimination affects the rights of the holders of the Refunded Bonds or that any instrument executed hereunder complies with the conditions and provisions of this Section 12. 9 4879-0551-6302.3
Section 13. Term. This Escrow Agreement shall commence upon its execution and delivery and shall terminate on the later to occur of either: ( a) the date upon which the Refunded Bonds have been paid in accordance with this Escrow Agreement; or ( b) the date upon which no unclaimed moneys remain on deposit with the Trustee/Escrow Agent and all amounts owed to the Trustee/Escrow Agent shall have been paid in full. Any unclaimed money shall be handled and disposed of in accordance with Section 6 hereof.
Section 14. Compensation. The Trustee/Escrow Agent shall receive its reasonable fees and expenses as previously agreed to; provided, however, that under no circumstances shall the Trustee/Escrow Agent be entitled to any lien nor will it assert a lien whatsoever on any moneys or obligations in the Escrow Funds for the payment of fees and expenses for services rendered by the Trustee/Escrow Agent under this Escrow Agreement.
Section 15. Resignation or Removal of Trustee/Escrow Agent. The Trustee/Escrow Agent, may at any time resign by giving written notice to the Commission of such resignation.
The Commission may at any time remove the Trustee/Escrow Agent , which is serving as Trustee/Escrow Agent for the Refunded Bonds, on behalf of and at the direction of th e Commission, by giving written notice to the Trustee/Escrow Agent of such removal. The Commission shall promptly appoint a successor Trustee/Escrow Agent by the resignation or removal date. Resignation or removal of the Trustee/Escrow Agent will be effe ctive only upon acceptance of appointment by a successor Trustee/Escrow Agent. If the Commission does not appoint a successor, the Trustee/Escrow Agent may petition any court of competent jurisdiction for the appointment of a successor Trustee/Escrow Agent, which court may thereupon, after such notice, if any, as it may deem proper and prescribe, and as may be required by law, appoint a successor Trustee/Escrow Agent . After receiving a notice of resignation of a Trustee/Escrow Agent, the Commission may appoint a temporary Trustee/Escrow Agent to replace the resigning Trustee/Escrow Agent until the Commission appoints a successor Trustee/Escrow Agent. Any such temporary Trustee/Escrow Agent so appointed by the Commission shall immediately and without further act be replaced by the successor Trustee/Escrow Agent so appointed.
Section 16. Severability. If any one or more of the covenants or agreements provided in this Escrow Agreement on the part of the Commission or the Trustee/Escrow Agent to be performed should be determined by a court of competent jurisdiction to be contrary to law, such covenants or agreements shall be null and void and shall be deemed separate from the remaining covenants and agreements herein contained and shall in no way affect the validity of the remaining provisions of this Escrow Agreement.
Section 17. Counterparts. This Escrow Agreement may be executed in several counterparts, all or any of which shall be regarded for all purposes as one original and shall constitute and be but one and the same instrument.
Section 18. Governing Law. This Escrow Agreement shall be construed under the laws of the State of California.
Section 19. Holidays. If the date for making any payment or the last date for performance of any act or the exercising of any right, as provided in this Escrow Agreement, shall be a legal holiday or a day on which banking institutions in the city in which is located the principal office 10 4879-0551-6302.3
of the Trustee/Escrow Agent are authorized by law to remain closed, such payment may be made or act performed or right exercised on the next succeeding day not a legal holiday or a day on which such banking institutions are authorized by law to remain closed, with the same force and effect as if done on the nominal date provided in this Escrow Agreement, and no interest shall accrue for the period after such nominal date.
Section 20. Assignment. T
his Escrow Agreement shall not be assigned by the
Trustee/Escrow Agent or any successor thereto without the prior written consent of the Commission, except such assignment in connection with a merger, conversion or consolidation as described in Section 10 hereof shall not require such prior written consent of the Commission. [Remainder of page intentionally left blank]
S-1
4879-0551-6302.3
IN WITNESS WHEREOF, the parties hereto have caused this Escrow Agreement to be executed by their duly authorized officers and attested as of the date and year first written above.
PUBLIC UTILITIES COMMISSION OF THE
CITY AND COUNTY OF SAN FRANCISCO
By
[_____________], [____________]
U.S. BANK TRUST COMPANY, NATIONAL
ASSOCIATION, as Trustee/Escrow Agent
By
[ ], Authorized Officer
[Signature page to Escrow Agreement (2013AB Bonds)]
4879-0551-6302.3
EXHIBIT A-1
REFUNDED 2013A BONDS
Public Utilities Commission of the City and County of San Francisco Wastewater Revenue Bonds
2013 Series A
(Refunding)
Maturity Date
(October 1)
Principal to be
Redeemed
Redemption
Price Redemption Date
CUSIP
Number
2022 5,000,000 100 October 1, 2022 79768HBC1
2022 8,090,000 100 October 1, 2022 79768HBQ0
2023 575,000 100 October 1, 2022 79768HBD9
2024 610,000 100 October 1, 2022 79768HBE7
2025 1,260,000 100 October 1, 2022 79768HBF4
4879-0551-6302.3
EXHIBIT A-2
REFUNDED 2013B BONDS
Public Utilities Commission of the City and County of San Francisco Wastewater Revenue Bonds
2013 Series B
Maturity Date
(October 1)
Principal to be
Redeemed
Redemption
Price Redemption Date
CUSIP
Number
2023 $ 8,835,000 100% October 1, 2022 79768HBR8
2024 9,280,000 100 October 1, 2022 79768HBS6
2025 9,130,000 100 October 1, 2022 79768HBT4
2026 10,915,000 100 October 1, 2022 79768HBU1
2027 11,475,000 100 October 1, 2022 79768HBV9
2028 12,065,000 100 October 1, 2022 79768HBW7
2029 12,680,000 100 October 1, 2022 79768HBX5
2030 13,330,000 100 October 1, 2022 79768HBY3
2031 14,015,000 100 October 1, 2022 79768HBZ0
2032 14,735,000 100 October 1, 2022 79768HCA4
2033 15,415,000 100 October 1, 2022 79768HCB2
2034 16,045,000 100 October 1, 2022 79768HCC0
2035 16,695,000 100 October 1, 2022 79768HCD8
2036 17,375,000 100 October 1, 2022 79768HCE6
2039* 56,500,000 100 October 1, 2022 79768HCF3
2042* 93,095,000 100 October 1, 2022 79768HCG1
* Term bond.
4879-0551-6302.3
EXHIBIT B-1
INITIAL GOVERNMENT SECURITIES
(REFUNDED 2013A BONDS ESCROW FUND)
Maturity Date Type Coupon Price Par Amount Total Cost
Uninvested cash: $[•]
4879-0551-6302.3
EXHIBIT B-2
INITIAL GOVERNMENT SECURITIES
(REFUNDED 2013B BONDS ESCROW FUND)
Maturity Date Type Coupon Price Par Amount Total Cost
Uninvested cash: $[•]
4879-0551-6302.3
EXHIBIT C-1
DISBURSEMENTS/PAYMENT REQUIREMENTS FROM
REFUNDED 2013A BONDS ESCROW FUND
Redemption Date
Principal
Interest
Total
4879-0551-6302.3
EXHIBIT C-2
DISBURSEMENTS/PAYMENT REQUIREMENTS FROM
REFUNDED 2013B BONDS ESCROW FUND
Redemption Date
Principal
Interest
Total
4823-8142-5208.1
EXHIBIT D
FORM OF NOTICE OF REFUNDED BONDS REDEMPTION
Public Utilities Commission of the City and
County of San Francisco
Wastewater Revenue Bonds
2013 Series A
(Refunding)
Public Utilities Commission of the City and
County of San Francisco
Wastewater Bonds
2013 Series B
NOTICE IS HEREBY GIVEN , that the Public Utilities Commission of the City and County of San Francisco (the “Commission”) has called for redemption on [_________], 2022 (the “Redemption Date”) all of the bonds listed below (collectively, the “Bonds”) at a redemption price of 100% (the “Redemption Price”), together with accrued interest to the Redemption Date.
On the Redemption Date, there will become due and payable the Redemption Price of the Bonds, together with interest accrued thereon to the Redemption Date. From and after the Redemption Date, interest shall cease to accrue on the Bonds and the Bonds shall be surrendered.
Public Utilities Commission of the City and County of San Francisco Wastewater Revenue Bonds
2013 Series A
(Refunding)
CUSIP NUMBER
(Base: 79768H)
MATURITY DATE
(OCTOBER 1) AMOUNT
BC1 2022 $ 5,000,000
BQ0 2022 8,090,000
BD9 2023 575,000
BE7 2024 610,000
BF4 2025 1,260,000
D-2
4879-0551-6302.3
Public Utilities Commission of the City and County of San Francisco Wastewater Bonds
2013 Series B
CUSIP NUMBER
(Base: 79768H)
MATURITY DATE
(OCTOBER 1) AMOUNT
BR8 2023 $ 8,835,000
BS6 2024 9,280,000
BT4 2025 9,130,000
BU1 2026 10,915,000
BV9 2027 11,475,000
BW7 2028 12,065,000
BX5 2029 12,680,000
BY3 2030 13,330,000
BZ0 2031 14,015,000
CA4 2032 14,735,000
CB2 2033 15,415,000
CC0 2034 16,045,000
CD8 2035 16,695,000
CE6 2036 17,375,000
CF3 2039 56,500,000
CG1 2042 93,095,000
Payment of the Redemption Price on the Bonds called for redemption, together with accrued interest thereon to the Redemption Date, will be paid only upon presentation and surrender thereof in the following manner (if delivery is by mail, registered mail with return receipt request is recommended):
[____________]
IMPORTANT NOTICE
Withholding of 24% of gross redemption proceeds of any payment made within the United States may be required by the Jobs and Growth Tax Relief Reconciliation Act of 2003 (the “Act”), unless U.S. Bank Trust Company, National Association ( as successor in interest to U.S. Bank, National Association), as Trustee/Escrow Agent (the “Escrow Agent”), for the Bonds, has the correct taxpayer identification number (social security or employer identification number) or exemption certificate of the payee. Please furnish a properly completed Form W -9 or exemption certificate or equivalent when presenting your securities.
The Commission and the Trustee/Escrow Agent shall not be held responsible for the selection or use of CUSIP numbers, nor is any representation made as to their correctness as indicated in the notice or as printed on any bond. They are included solely for convenience of the owners of the Bonds.
Dated: ______________.
D-3
4879-0551-6302.3
Public Utilities Commission of the City and County
of San Francisco
By: U.S. Bank Trust Company, National
Association, as Trustee/Escrow Agent
4879-0551-6302.3
EXHIBIT E
FORM OF NOTICE OF REFUNDED BONDS DEFEASANCE
Public Utilities Commission of the City and
County of San Francisco
Wastewater Revenue Bonds
2013 Series A
(Refunding)
Public Utilities Commission of the City and
County of San Francisco
Wastewater Bonds
2013 Series B
Notice is hereby given to the owners of the bonds described below (collectively, the “Defeased Bonds”): (i) that there has been deposited with U.S. Bank Trust Company, National Association (as successor in interest to U.S. Bank, National Association) , as trustee and escrow agent (the “ Trustee/Escrow Agent”) , pursuant to the Escrow Agreement, dated as of May [_], 2022, by and between the Public Utilities Commission of the City and County of San Francisco (the “Commission ”), and the Trustee/Escrow Agent , moneys and investment securities, as permitted by the Indenture, dated as of January 1, 2003, as amended and supplemented, and as supplemented by that certain Second Supplemental Indenture, dated as of January 1, 2013, and as supplemented by that certain Third Supplemental Indenture, dated as of February 1, 2013 (collectively referred to herein as, the “Indenture”), all by and between the Commission and U.S.
Bank Trust Company, National Association (as successor in interest to U.S. Bank, National Association), that the principal of and interest on which when due will provide moneys which, [together with such other moneys deposited with the Trustee/Escrow Agent], will be sufficient (as evidenced by a verification report prepared by an independent certified public accountant and delivered to the Commission and the Trustee/Escrow Agent) and available to redeem the Defeased Bonds on [________] , 2022, at a r edemption price equal to 100% of the aggregate principal amount of the Defeased Bonds plus accrued interest with respect thereto; and (ii) that the Defeased Bonds are deemed to be paid for purposes of the Indenture and all obligations of the Commission under the Indenture with respect to the Defeased Bonds have ceased and terminated, except as expressly set forth therein. The Defeased Bonds are as follows:
Public Utilities Commission of the City and County of San Francisco Wastewater Revenue Bonds
2013 Series A
(Refunding)
CUSIP NUMBER
(Base: 79768H)
MATURITY DATE
(OCTOBER 1) AMOUNT
BC1 2022 5,000,000
BQ0 2022 8,090,000
BD9 2023 575,000
BE7 2024 610,000
BF4 2025 1,260,000
E-2
4879-0551-6302.3
Public Utilities Commission of the City and County of San Francisco Wastewater Bonds
2013 Series B
CUSIP NUMBER
(Base: 79768H)
MATURITY DATE
(October 1) AMOUNT
BR8 2023 $ 8,835,000
BS6 2024 9,280,000
BT4 2025 9,130,000
BU1 2026 10,915,000
BV9 2027 11,475,000
BW7 2028 12,065,000
BX5 2029 12,680,000
BY3 2030 13,330,000
BZ0 2031 14,015,000
CA4 2032 14,735,000
CB2 2033 15,415,000
CC0 2034 16,045,000
CD8 2035 16,695,000
CE6 2036 17,375,000
CF3 2039 56,500,000
CG1 2042 93,095,000
All Defeased Bonds shall be surrendered at the following address:
Delivery Instructions:
[________]
The Commission and Trustee/Escrow Agent shall not be held responsible for the selection or use of CUSIP numbers, nor is any representation made as to the correctness of the CUSIP number either as printed on any Defeased Bonds or as contained herein and any error in the CUSIP number shall not affect the validity of the proceedings for redemption and defeasance of the Defeased Bonds.
Dated: [_________].
Public Utilities Commission of the City and County
of San Francisco
By: U.S. Bank Trust Company, National
Association, as Trustee/Escrow Agent
4886-4256-4365.3
ESCROW AGREEMENT
by and between
PUBLIC UTILITIES COMMISSION OF THE
CITY AND COUNTY OF SAN FRANCISCO
and
U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION
as Trustee/Escrow Agent
relating to
$240,580,000
Public Utilities Commission of the City and
County of San Francisco
Wastewater Revenue Bonds
2016 Series A
(Green Bonds)
$67,820,000
Public Utilities Commission of the City and
County of San Francisco
Wastewater Bonds
2016 Series B
Dated as of [________] , 2022
4886-4256-4365.3
ESCROW AGREEMENT
THIS ESCROW AGREEMENT , dated as of [________] , 2022 (the “Escrow Agreement”), is by and between the PUBLIC UTILITIES COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO ( the “Commission”) and U.S. Bank Trust Company, National Association ( as successor in interest to U.S. Bank, National Association) , a national banking association duly organized and existing under and by virtue of the laws of the United States of America, as trustee for the Refunded Bonds (as defined herein) and as escrow agent (the “Trustee/Escrow Agent”) hereunder.
W I T N E S S E T H :
WHEREAS, pursuant to the Indenture, dated as of January 1, 2003 (the “Original Indenture”), by and between the Commission and U.S. Bank Trust Company, National Association (as successor in interest to U.S. Bank, National Association) , as trustee thereunder (the “Truste e”), as amended and supplemented, and as supplemented by that certain Fourth Supplemental Indenture, dated as of May 1, 2016 (the “Fourth Supplemental Indenture”, and together with the Original Indenture, the “ Indenture”), by and between the Commission and the Trustee, the Co mmission previously issued its: (i) Wastewater Revenue Bonds, 2016 Series A (Green Bonds), in the original aggregate principal amount of $240,580,000 (the “2016 Series A Bonds”), and (ii) Wastewater Revenue Bonds, 2016 Series B Bonds, in the aggregate principal amount of $67,820,000 (the “2016 Series B Bonds”, and together with the 2016 Series A Bonds, the “2016AB Bonds”);
WHEREAS, pursuant to Section 9.109 of the Charter of the City and County of San Francisco, the Board of Supervisors (the “ Board”) of the City and County of San Francisco (the “City”) is authorized to provide for the issuance of revenue refunding bonds , for which no voter approval is required, for the purpose of refunding any outstanding revenue bonds of the City provided such refunding bonds are expected to result in net debt service savings to the City on a present value basis, calculated as provided by ordinance; WHEREAS, on September 29, 2020, the Board adopted Ordinance No. 173-20, signed by the Mayor of the City on October 1, 2020, approving, among other things, the issuance and sale of wastewater revenue bonds, pursuant to Article VIIIB of the Charter of the City, in an aggregate principal amount not to exceed $349,919,252, to finance capital project benefiting the Wastewater Enterprise, and further authorized the approved the issuance of wastewater revenue refunding bonds, to refund any outstanding obligations of the Wastewater Enterprise, subject to the limitations set forth therein; and
WHEREAS, on [April 12], 2022, the Commission passed its Resolution No. 22-[___], approving, among other things, the issuance of its wastewater revenue bonds to refund the Refunded Bonds (as defined herein); and
WHEREAS, under the authority granted under the Charter and by the ordinances and resolution hereinabove mentioned, the Commission is, simultaneously with the execution of this Escrow Agreement, issuing its : (i) Wastewater Revenue Bonds, 2022 Series C (Refunding – Federally Taxable) (SSIP) (Green Bonds”) in the aggregate principal amount of $[__________] 2 4886-4256-4365.3
(the “2022 Series C Bonds”) for the purpose of providing moneys, a portion of which will be used to advance refund and defease the 2016 Series A Bonds set forth in Exhibit A-1 attached hereto (the “Refunded 2016A Bonds”), and (ii) Wastewater Revenue Bonds, 2022 Series D (Refunding – Federally Taxable) (Non-SSIP) in the aggregate principal amount of $[__________] (the “2022 Series D Bonds”, and together with the 2022 Series C Bonds, the “ 2022CD Bonds ”) for the purpose of providing moneys, a portion of which will be used to advance refund and defease the 2016 Series B Bonds set forth in Exhibit A-2 attached hereto (the “Refunded 2016B Bonds”), and together, with the Refunded 2016A Bonds, the “Refunded Bonds”), on October 1, 2025 (the “Redemption Date”), at a redemption price equal to 100% of the outstanding aggregate principal amount thereof, together with interest accrued with respect to the Refunded Bonds through the Redemption Date (“Redemption Price”); and
NOW, THEREFORE, in consideration of the mutual covenants and agreements herein c
ontained, the Commission and the Trustee/Escrow Agent agree as follows:
Section 1. Establishment and Maintenance of Escrow Funds. The Trustee/Escrow Agent hereby agrees to establish and maintain a separate escrow fund for the Refunded 2016 A Bonds securing the Refunded 2016A Bonds (the “Refunded 2016A Bonds Escrow Fund”) and a separate escrow fund for the Refunded 2016B Bonds securing the Refunded 2016B Bonds (the “Refunded 2016B Bonds Escrow Fund”, and together with the Refunded 2016A Bonds Escrow Fund, the “Escrow Funds”), and to hold the securities, investments and moneys therein at all times as special funds and separate trust accounts. All securities, investments and moneys in the Escrow Funds, are hereby irrevocably pledged, subject to the provisions of Section 4 and Section 6 hereof, to secure the payment of the applicable Refunded Bonds.
Section 2. Deposits to the Escrow Funds.
(a) Refunded 2016A Bonds Escrow Fund. Concurrently with the execution and delivery of this Escrow Agreement, the Commission hereby directs the Trustee/Escrow Agent to, and the Trustee/Escrow Agent shall, deposit the sum of : (i) $[__________], derived from the proceeds of the sale of the 2022 Series C Bonds (which the Commission caused to be transferred to the Trustee/Escrow Agent on [Closing Date]) to the Refunded 2016A Bonds Escrow Fund, [and (ii) $[_______] from the [Interest] Fund, attributable to the applicable Refunded Bonds].
(b) Refunded 2016B Bonds Escrow Fund. Concurrently with the execution and delivery of this Escrow Agreement, the Commission hereby directs the Trustee/Escrow Agent to, and the Trustee/Escrow Agent shall, deposit the sum of : (i) $[__________], derived from the proceeds of the sale of the 2022 Series D Bonds (which the Commission caused to be transferred to the Trustee/Escrow Agent on [Closing Date]) to the Refunded 2016B Bonds Escrow Fund, [and (ii) $[_______] from the [Interest] Fund, attributable to the applicable Refunded Bonds].
Section 3. Investment of Moneys in the Escrow Funds.
(a) R efunded 2016A Bonds Escrow Fund. The Trustee/Escrow Agent hereby acknowledges receipt of $[______] as described in Section 2 (a) above, and that such 3 4886-4256-4365.3
amounts were deposited to the Refunded 2016A Bonds Escrow Fund. The Commission hereby directs the Trustee/Escrow Agent to, and the Trustee/Escrow Agent shall, on [Closing Date], use $[______] on deposit in the Refunded 2016A Bonds Escrow Fund to purchase the securities described in Exhibit B-1 attached hereto (the “Initial Government Securities (Refunded 2016A Bonds)”), and shall retain $[______] in the Refunded 2016A Bonds Escrow Fund as a beginning cash balance.
(b) Refunded 2016B Bonds Escrow Fund. The Trustee/Escrow Agent hereby a
cknowledges receipt of $[______] as described in Section 2( b) above, and that such amounts were deposited to the Refunded 2016B Bonds Escrow Fund. The Commission hereby directs the Trustee/Escrow Agent to, and the Trustee/Escrow Agent shall, on [Closing Date], use $[______] on deposit in the Refunded 2016B Bonds Escrow Fund to purchase the securities described in Exhibit B-2 attached hereto (the “Initial Government Securities (Refunded 2016B Bonds)”, and together with the Initial Government Securities (Refunded 2016A Bonds), the “ Initial Government Securities ”), and shall retain $[______] in the Refunded 2016B Bonds Escrow Fund as a beginning cash balance.
The Trustee/Escrow Agent s hall purchase the Initial Government Securities as provided in this Section and shall hold such Initial Government Securities, the beginning cash balance and any earnings received thereon and any reinvestment thereof pursuant to this Escrow Agreement and disburse such amounts as provided herein. The Trustee/Escrow Agent shall collect amounts due and shall sell or otherwise liquidate investments in the Escrow Funds as needed to make the payments and transfers required by this Escrow Agreement and may substitute different Government Securities, as defined and subject to the terms and limitations of Section 7 hereof, for the Initial Gove rnment Securities but otherwise shall have no power or duty to sell, transfer, request the redemption of or otherwise dispose of the Initial Government Securities.
Section 4. Redemption of the Refunded Bonds.
(a) T he Commission hereby directs the Trustee/Escrow Agent to, and the Trustee/Escrow Agent shall, on the Redemption Date, withdraw from the Escrow Funds, amounts sufficient to pay the Redemption Price of the applicable Refunded Bonds on the Redemption Date (such amounts described in Exhibits C-1 and C-2 attached hereto). Such transfers shall constitute the respective payments of the principal, interest, and premium, if any, with respect to the applicable Refunded Bonds and the Redemption Price due from the Commission. The holders of the Refunded Bonds shall have a first lien on the moneys and Government Securities in the Escrow Fund applicable to their Refunded Bonds which are allowable and sufficient to pay such Refunded Bonds until such moneys and Government Securities are used and applied as provided in this Escrow Agreement. Any cash or securities held in the Escrow Funds are irrevocably pledged only to the holders of the applicable Refunded Bonds. Upon deposit of the moneys and Government Securities with the Trustee/Escrow Agent pursuant to the provisions of Section s 1 and 2 hereof, the holders of the Refunded Bonds shall cease to be entitled to any lien, benefit or security under the Indenture.
Section 5.
Possible Deficiencies . If at any time it shall appear to the Trustee/Escrow Agent that the moneys in the Escrow Funds will not be sufficient to make all payments required 4 4886-4256-4365.3
by Section 4 hereof, the Trustee/Escrow Agent shall notify the Commission in writing as soon as reasonably practicable of such fact and the amount of such deficiency. Thereupon the Commission shall use its best efforts to obtain and deposit with the Trustee/Escrow Agent for deposit in the Escrow Funds, from any legally available moneys, such additional moneys as may be required to meet fully the aggregate amounts to become due and payable on the applicable Refunded Bonds as the same become due. The Trustee/Escrow Agent shall in no manner be responsible for the Commission’s failure to make any such deposit. The Trustee/Escrow Agent may conclusively rely on the report of a nationally recognized firm of independent certified public accountants delivered with respect to the Escrow Funds as to the sufficiency of the amounts therein to pay the applicable Refunded Bonds in accordance with Section 4 hereof.
Section 6. Unclaimed Moneys . The Trustee/Escrow Agent shall retain all unclaimed moneys, together with interest thereon, in the Escrow Funds and shall invest such unclaimed moneys as directed in writing by the Commission. At such time as the Commission delivers to the Trustee/Escrow Agent written notice that no additional amounts from the Escrow Funds will be needed to redeem the applicable Refunded Bonds, or on [_______], 2022, whichever occurs first, the Trustee/Escrow Agent shall transfer all amounts then remaining in the Escrow Funds to the Commission and thereafter the holders of the applicable Refunded Bonds shall look only to the Commission for payment and the Trustee/Escrow Agent shall have no responsibility or liability whatsoever with respect to any of such moneys. At such time as no amounts remain in the Escrow Funds, they shall be closed.
Section 7. Reinvestment; Substitution of Government Securities . Except as specifically provided below, the Trustee/Escrow Agent may not sell, transfer, request the redemption of or otherwise dispose of the Initial Government Securities.
Interest income and other amounts received by the T
rustee/Escrow Agent as payments on
the Initial Government Securities held in the Escrow Funds shall be held as part of the Escrow Funds to be used for the purposes set forth in Section 4 hereof and may be invested by the Trustee/Escrow Agent at the written direction of the Commission; provided that (a) such amounts may only be invested as permitted by the Indenture; and (b) such investments shall have maturities which do not extend beyond the date on which the moneys so invested will be needed to make payments required by Section 4 hereof.
Upon written direction of the Commission, the Trustee/Escrow Agent may sell, liquidate, or otherwise dispose of some or all of the Initial Government Securities then held as an investment in the Escrow Funds and reinvest the proceeds thereof, together with other moneys held in the Escrow Funds in different securities, as permitted by the Indenture , provided that no such substitution shall occur unless (i) the amounts of and dates on which the anticipated withdrawals from the Escrow Funds by the Trustee/Escrow Agent for the payment of the principal of, redemption price of, and interest on the a pplicable Refunded Bonds will not be diminished or postponed thereby, (ii) the Trustee/Escrow Agent shall receive the unqualified opinion of nationally recognized municipal bond counsel to the effect that such reinvestment and substitution will not adverse ly affect the exclusion from gross income for federal income tax purposes of interest on the 2022CD Bonds (if applicable) or the applicable Refunded Bonds (if applicable), (iii) the Trustee/Escrow Agent shall receive from a firm of independent certified pu blic accountants a certification that, immediately after such reinvestment and substitution, the principal 5 4886-4256-4365.3
of and interest on obligations in the Escrow Funds will, together with other cash on deposit in the Escrow Funds available for such purposes, be sufficient without reinvestment to pay, when due, the principal or redemption price of and interest on the applicable Refunded Bonds; and (iv) the Trustee/Escrow Agent shall receive an opinion of nationally recognized bond counsel that such reinvestment and substitution is permissible under this Escrow Agreement and that the conditions under this Section 7 have been satisfied.
Section 8. Performance of Duties . The Trustee/Escrow Agent agrees to perform the duties set forth herein.
Section 9. Indemnity. The Commission hereby assumes liability for, and hereby agrees (whether or not any of the transactions contemplated hereby are consummated) to indemnify, protect, save and keep harmless the Trustee/Escrow Agent and its respective successors, assigns, directors, officers, agents, employees and servants, from and against any and all liabilities, obligations, losses, damages, penalties, claims, actions, suits, costs, expenses and disbursements (including reasonable legal fees and disbursements) of whatsoever kind and nature which may be imposed on, incurred by, or asserted against, the Trustee/Escrow Agent at any time (whether or not also indemnified against the same by the Commission or any other person under any other agreement or instrument, but without double indemnity) in any way relating to or arising out of the execution, delivery and performance of this Escrow Agreement, the establishment hereunder of the Escrow Funds, the acceptance of the funds deposited therein and any payment, transfer or other application of moneys by the Trustee/Escrow Agent in accordance with the provisions of this Escrow Agreement; provided, however, that the Commission shall not be required to indemnify the Trustee/Escrow Agent against the Trustee/Escrow Agent ’s own negligence or willful misconduct or the negligent or willful misconduct of the Trustee/Escrow Agent’s respective agents and employees. In no event shall the Commission or the Trustee/Escrow Agent be liable to any person by reason of the transactions contemplated hereby other than to each other as set forth in this Section 9. The indemnities contained in this Section 9 shall survive the termination of this Escrow Agreement or the earlier removal or resignation of the Trustee/Escrow Agent.
Section 10. Responsibilities of the T rustee/Escrow Agent. The Trustee/Escrow Agent and its respective successors, assigns, agents and servants shall not be held to any personal liability whatsoever, in tort, contract or otherwise, in connection with the execution and delivery of this Escrow Agreement, the establishment of the Escrow Funds , the acceptance of the moneys deposited therein, the sufficiency of the funds deposited in the Escrow Funds to accomplish the defeasance of the applicable Refunded Bonds or any payment, transfer or other application of moneys or obligations by the Trustee/Escrow Agent in accordance with the provisions of this Escrow Agreement or by reason of any non-negligent act, non-negligent omission or non-negligent error of the Trustee/Escrow Agent made in good faith in the conduct of its duties. The recitals of fact contained in the “Whereas” clauses herein shall be taken as the statements of the Commission, and the Trustee/Escrow Agent assumes no responsibility for the correctness thereof. The Trustee/Escrow Agent makes no representation as to the sufficiency of the funds deposited in the Escrow Funds to accomplish the refunding of the applicable Refunded Bonds on the Redemption Date or to the validity of this Escrow Agreement as to the Commission and, except as otherwise provided herein, the Trustee/Escrow Agent shall incur no liability with respect thereto. The Trustee/Escrow Agent shall not be liable in connection with the performance of its duties under this Escrow Agreement except for its own negligence, willful misconduct, and the duties and 6 4886-4256-4365.3
obligations of the Trustee/Escrow Agent shall be determined by the express provisions of this Escrow Agreement. The Trustee/Escrow Agent may consult with counsel, who may or may not be counsel to the Commission, and in reliance upon the written opinion of such counsel shall have full and complete authorization and protection with respect to any action taken, suffered or omitted by it in good faith in accordance therewith. Whenever the Trustee/Escrow Agent shall deem it necessary or desirable that a matter be proved or established prior to taking, suffering, or omitting any action under this Escrow Agreement, such matter may be deemed to be conclusively established by a certificate signed by an authorized officer of the Commission.
The liability of the Trustee/Escrow Agent to make the payments required by this Escrow Agreement shall be limited to the moneys in the Escrow Funds.
No provision of this Escrow Agreement shall require the Trustee/Escrow Agent to expend or risk its own funds or otherwise incur any financial liability in the performance or exercise of any of its duties hereunder, or in the exercise of its rights or powers.
The Trustee/Escrow Agent shall not be liable for the accuracy of any calculations provided herein.
Any company into which the Trustee/Escrow Agent may be merged or converted or with which it may be consolidated or any company resulting from any merger, conversion or consolidation to which it shall be a party or any company to which the Trustee/Escrow Agent may sell or transfer all or substantially all of its corporate trust business shall be the successor to the Trustee/Escrow Agent without the execution or filing of any paper or further act, anything herein to the contrary notwithstanding.
The Commission shall pay the Trustee/Escrow Agent full compensation for its duties under this Escrow Agreement, including out -of-pocket costs such as publication costs, redemption or redemption expenses, legal fees and other costs and expenses relating hereto. Under no circumstances shall amounts deposited in the Escrow Funds be deemed to be available for said purposes.
The Trustee/Escrow Agent may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents, attorneys, custodians or nominees appointed with due care, and shall not be responsible for any willful misconduct or negligence on the part of any agent, attorney, custodian or nominee so appointed.
The Trustee/Escrow Agent may conclusively rely and shall be fully protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, approval or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties.
Anything in this Escrow Agreement to the contrary notwithstanding, in no event shall the Trustee/Escrow Agent be liable for special, indirect, punitive or consequential loss or damage of any kind whatsoever (including but not limited to lost profits), even if the Trustee/Escrow Agent has been advised of the likelihood of such loss or damage and regardless of the form of action. 7 4886-4256-4365.3
The Trustee/Escrow Agent shall have the right to accept and act upon instructions, including funds transfer instructions (“ Instructions”) given pursuant to this Escrow Agreement and delivered using Electronic Means (“ Electronic Means ”) shall mean the following communications meth ods: e -mail, facsimile transmission, secure electronic transmission containing applicable authorization codes, passwords and/or authentication keys issued by the Trustee/Escrow Agent, or another method or system specified by the Trustee/Escrow Agent as available for use in connection with its services hereunder); provided, however, that the Commission shall provide to the Trustee/Escrow Agent an incumbency certificate listing officers with the authority to provide such Instructions (“ Authorized Officers”) and containing specimen signatures of such Authorized Officers, which incumbency certificate shall be amended by the Commission whenever a person is to be added or deleted from the listing. If the Commission elects to give the Trustee/Escrow Agent Instructions using Electronic Means and the Trustee/Escrow Agent in its discretion elects to act upon such Instructions, the Trustee/Escrow Agent’s understanding of such Instructions shall be deemed controlling. The Commission understands and agrees that the Trustee/Escrow Agent cannot determine the identity of the actual sender of such Instructions and that the Trustee/Escrow Agent shall conclusively presume that directions that purport to have been sent by an Authorized O fficer listed on the incumbency certificate provided to the Trustee/Escrow Agent have been sent by such Authorized Officer. The Commission shall be responsible for ensuring that only Authorized Officers transmit such Instructions to the Trustee/Escrow Agent and that the Commission and all Authorized Officers are solely responsible to safeguard the use and confidentiality of applicable user and authorization codes, passwords and/or authentication keys upon receipt by the Commission . The Trustee/Escrow Agent shall not be liable for any losses, costs or expenses arising directly or indirectly from the Trustee/Escrow Agent’s reliance upon and compliance with such Instructions notwithstanding such directions conflict or are inconsistent with a subsequent written instruction.