CleanPowerSF Sfpuc Commission
February 14, 2023

AGENDA ITEM
Public Utilities Commission
City and County of San Francisco

APPROVAL:

COMMISSION

SECRETARY

Donna Hood

DEPARTMENT

Financial Services

AGENDA NO.

12 MEETING DATE

February 14, 2023

Approve Replacement Credit Facility and Dealer Agreements for Power Enterprise Commercial Paper Program: Regular Calendar

Project Manager: Nikolai Sklaroff

Summary of
Proposed
Commission Action
Approve form of Letter of Credit agreement with Bank of America in the principal amount not to exceed $125 million (exclusive of 270 days’ interest), and approve a form of replacement dealer agreements in support of the Power Commercial Program; and authorize the General Manager to enter into an agreement with Bank of America N.A for a new Letter of Credit, and Barclays, Goldman Sachs, and RBC Capital Markets for amended dealer agreements related to the Program.

Background,
Description of Scope
of Services, and
Agreement Terms:

In November 2015, p ursuant to Board of Supervisors Resolution No. 427-15, the Board authorized the establishment of the Power Enterprise Commercial Paper Program in the principal amount not to exceed $90 million against authorizations for indebtedness under Sections 9.107(6) and 9.107(8) of the Charter.

On June 15, 2018, the voters of San Francisco approved Proposition A (“Prop A”) which amended Charter Section 8B.124 to authorize the Power Enterprise to issue revenue bonds, notes, commercial paper or other forms of indebtedness when authorized by ordinance approved by two- thirds vote of the Board for the purpose of reconstructing, replacing, expanding, repairing or improving power facilities of the City.

On January 15, 2019 the Board adopted Ordinance No. 2- 19 to increase in the Power CP Program to an amount not -to-exceed $250 million of commercial paper notes (collectively, the “CP Notes”) outstanding at any one time, pursuant to the provisions of (i) Article V of the City’s Administrative Code; (ii) Sections 9.107(6) and 9.107(8) of the Charter, and (iii) Section 8B.124 of the Charter.

On November 13, 2018, by Resolution No. 18-0188 this Commission approved a Reimbursement Agreement dated March 1, 2019 and Letter of Credit dated March 7, 2019 with Sumitomo Mitsui Banking Execute Agreements: Approve Replacement Credit Facility and Dealer Agreements fort the Power Enterprise Commercial Paper Program
Commission Meeting Date: February 14, 2023

Corporation, in the not to exceed principal of $125 million and wi th and expiration date of March 6, 2023. The purpose of the requested action today is to approve a replacement Reimbursement Agreement and Letter of Credit between Bank of America NA and the Commission.

The Power Commercial Paper Program authorized by the Commission and the Board of Supervisors in the total amount of $250 million is comprised of the following:
1) Series A-1: $125M Bank of America LOC (Exp. 3/6/2026) 2) Series A-2: $125M Sumitomo Mitsui Banking Corporation LOC (Exp. 3/6/2023)

The proposed Bank of America Reimbursement Agreement and Letter of Credit will replace the Sumitomo Mitsui Banking Corporation Agreement and Letter of Credit that will be expiring March 6, 2023.

The SFPUC currently provides most of the interim funding of the Power Enterprise capital program through the issuance, from time to time, of commercial paper (CP). In today’s market, CP results in an approximate all -in borrowing rate of approximately 3 %. CP is determined to be a cost-effective means to fund the encumbrance, contract certification and cash spending requirements of the Power Enterprise capital program, until long-term revenue bond or long-term State and federal loan financing takes place (if available).

Should any of the recommended firms fail to meet City cont racting or other requirements, or if negotiations are otherwise not successful, it is recommended that the General Manager be authorized to negotiate with other bidders. All of the recommended firms are currently certified as compliant vendors with the City.

Credit Facility Procurement Process: To renew or replace the expiring agreement, a Request for Proposals (RFP) was issued on December 2, 2022 and was sent to eighteen banks from a pre-qualified Bank Credit Facilities Pool. Proposals were received from 8 banks on December 20, 2022.

Recommended Credit Facility and Terms: Staff recommends Bank of America NA as the responsible proposer submitting the lowest cost, responsive proposal, as follows:

Power Series A -2: Bank of America NA Letter of Credit
(LOC) in the principal amount of $125 ,000,000 and a stated amount of $136,095,891 (includes maximum allowable
interest) at an annual cost of 0.29% ( annual cost of
approximately $395,000 per year ), for three years with the option to extend the LOC to a total term of up to nine years and a proposed not-to-exceed fee of $550,000 per year.

Execute Agreements: Approve Replacement Credit Facility and Dealer Agreements fort the Power Enterprise Commercial Paper Program
Commission Meeting Date: February 14, 2023

These fees are included in the Power Enterprise capital budget and are comparable to fees recently obtained from banks for other recent SFPUC agreements and are lower than the fees on the existing agreements.

Bank of America NA has high- grade short-term credit ratings of A -1 (Standard & Poor’s); and F-1+ (Fitch).

Description of Replacement Agreement : Under the agreement, Bank of America will provide a credit facility in the form of a letter of credit in the principal amount of $125 million, to provide security to CP noteholders of the timely repayment of principal and interest on any issued CP should the SFPUC be unable to do so.

Dealer Agreements:

In connection with the Power Commercial Paper Program, the Commission also issued a request for bids from prequalified firms to serve as the commercial paper dealer(s) for the Power Commercial Paper Program to sell and remarket Commercial Paper Notes. A request for bids was sent to 33 prequalified firms in December to the Controller’s Office of Public Finance underwriting pool . Staff recommends as the lowest cost, responsive and responsible bidders, the following proposals: Barclays, Goldman Sachs and RBC Capital Markets LLC. The annual fee for each dealer is 0.05% of outstanding CP for all dealers, except for RBC Capital Marke ts, LLC, which has an annual fee of 0.045%. The fees are consistent with dealer fees obtained in the past for the Water, Wastewater and Power CP Programs. The combined not -to-exceed annual fees for the five firms will be in the amount of $250,000.

The ter m of the dealer agreements is five years, with optional extension up to a total term of nine years. These fees are included in the Wastewater Enterprise capital budget.

The dealer agreements provide that each firm can remarket up to $250 million of the Power CP Program
, but in no case will the combined
amount of CP remarketed by the three firms exceed the authorized amount of $250 million at any given time.

The following are brief summaries of each document that the Commission is being asked to approve in form:

Reimbursement Agreement (Bank of America) : This agreement between the SFPUC and Bank of America (the “Bank”) which includes the new Letter of Credit as an appendix, sets out the terms pursuant to which the Letter of Credit is issued as well as the terms under which the SFPUC repays the Bank for draws on the Letter of Credit. The Letter of Credit is i ssued by the Bank in favor of the Execute Agreements: Approve Replacement Credit Facility and Dealer Agreements fort the Power Enterprise Commercial Paper Program
Commission Meeting Date: February 14, 2023

Issuing and Paying Agent. T he Letter of Credit is the credit facility that is drawn upon by the Issuing and Paying Agent to pay principal and interest due on maturing c ommercial paper, in the event the SFPUC does not make payments . The Letter of Credit is direct- pay and is irrevocable, once issued, until it expires or is terminated in certain limited circumsta nces, as described in the Reimbursement Agreement.

Fee Agreement (Bank of America): Agreement, by and between the SFPUC and Bank of America ( the Bank) sets out the fees the respective Bank charges in connection with the issuance of and draws upon its Letter of Credit.

Dealer Agreement ( Barclays, Goldman Sachs and RBC Capital Markets): This agreement replaces the existing separate Dealer Agreement by and between the SFPUC and each respective d ealer (Barclays, Goldman Sachs and RBC Capital Markets.) The Dealer Agreement, generally, sets out the terms pursuant to which such dealer may purchase or arrange for the sale of the commercial paper.

Offering Memorandum: This is the disclosure document that is used by the dealers in placin g and remarketing the commercial paper to prospective investors. It contains brief descriptions of the Power CP Program, as expanded, including the Commercial Paper Notes ; the credit facility provider (Bank of America ) and each Letter of Credit and Reimbursement Agreement of the Bank; and the SFPUC and Power Enterprise. It also contains the ratings assigned to the commercial paper, which ratings represent the Bank’s respective short-term ratings.

Disclosure Considerations: The Power C ommercial Paper Program, would be supported by the Bank of America NA Letter of Credit as described in the Offering Memorandum (OM). Unlike the Official Statement in a long -term revenue bond transaction, the OM for a CP Program supported by a Liqui dity Facilities or Letters of Credit does not include detailed financial and/or operating information of the issuer, in this case the SFPUC and Power Enterprise. Instead, CP investors rely primarily on the financial standing of the credit bank (Bank of America NA) for the source of repayment.

The Reimbursement Agreement with Bank of America NA contains representations and warranties which have been reviewed and affirmed to be appropriate for the SFPUC by staff, the City Attorney’s Office, and the SFPUC’s No
te Counsel (Kutak Rock LLP). The
representations and warranties include matters such as the good standing of the SFPUC; the authorization of the agreements, commercial paper, and liquidity agreements; the absence of material litigation; the fairness and ac curacy of the financial statements; and that there has been no material adverse change in the financial condition of the SFPUC.

Execute Agreements: Approve Replacement Credit Facility and Dealer Agreements fort the Power Enterprise Commercial Paper Program
Commission Meeting Date: February 14, 2023

Upon closing of this transaction, staff will post the key transaction documents on EMMA, the municipal bond industry’s on- line disclosure repository. There is no continuing disclosure undertaking for CP as it is exempt from the requirements of SEC Rule 15c-2-12.

Result of Inaction: A delay in this authorization could accelerate the frequency of long - term bond issuances, which could result in higher associated borrowing costs.

Budget & Costs: The Power Enterprise capital budget and associated appropriations cover these associated costs.

Recommendation: SFPUC staff recommends that the Commission adopt the attached resolution.

Environmental
Review:

The proposed action is replacement of an expiring agreement that provides interim funding for the Power Enterprise capital program. On August 2, 2022, the Environmental Review Officer (ERO) issued a Certificate of the City and County of San Francisco Planning Department (pursuant to Section 8B.124(b) of the City Charter) under Proposition A of June 2018, granting authority for the issuance of debt to the Board of Supervisors, for the Power Enterprise Capital Program. By this certification, the ERO certified that the projects to be funded through the sale of Power Revenue Bonds and/or Other Forms of Indebtedness, including Commercial Paper, either already comply with the requirements of the California Environmental Quality Act (CEQA) or will undergo environmental review pursuant to the CEQA when they are defined. This certificate can be found here:
https://sfpuc.sharefile.com/d-sd7110b2875fc41e2925e73252735875f

Attachments: 1. Reimbursement Agreement (Bank of America)

2. Fee Agreement (Bank of America)

3. Dealer Agreement

4. Offering Memorandum

PUBLIC UTILITIES COMMISSION

City and County of San Francisco
RESOLUTION NO.: ___________
WHEREAS, Pursuant to Article V of Chapter 43 (“Article V”) of the San Francisco Administrative Code (the “City’s Administrative Code”), enacted by Ordinance No. 203-98, adopted by the Board of Supervisors (the “Board”) of the City and County of San Francisco (the “City”) on June 8, 1998, and signed by the Mayor of the City (the “Mayor”) on June 19, 1998 (“Ordinance No. 203- 98”), as amended by Ordinance No. 270- 06, adopted by the Board on October 24, 2006, and signed by the Mayor on October 31, 2006 (“Ordinance No. 270- 06” and, together with Ordinance No. 203 98, the “Ordinances”), the Board established a proce dure pursuant to which the San Francisco Public Utilities Commission (the “Commission”) may issue short-term indebtedness, including the issuance and reissuance of commercial paper notes in anticipation of the issuance of revenue bonds; and
WHEREAS, On Jun e 5, 2018, the voters of the City approved Proposition A (“Proposition A”), which among other things, amended Section 8B.124 of the Charter of the City and County of San Francisco (the “Charter”) to authorize the Commission to issue indebtedness, including revenue bonds, notes, commercial paper or other forms of indebtedness, when authorized by ordinance approved by a two- thirds vote of the Board, for the purpose of reconstructing, replacing, expanding, repairing or improving power facilities under the jurisdiction of the Commission (the “Power Enterprise”), or for any other lawful purpose of the power facilities of the City in furtherance of the purposes specified in Charter Section 8B.124, provided that the Commission is prohibited from financing the construction of power plants that generate electricity using fossil fuels or nuclear energy under Proposition A; and WHEREAS, Under Section 8B.124 of the Charter, the Board’s authority to authorize an issuance of debt under Proposition A is subject to the provi sion of certain certifications of an independent engineer retained by Commission and certain certifications by the San Francisco Planning Department, which certifications shall make the findings and determinations set forth in Charter Section 8B.124 (together, the “Proposition A Certificates”); and WHEREAS, the Commission has previously authorized, pursuant to Resolution No. 15- 0183 adopted by the Commission of September 8, 2015, the establishment of the Power Enterprise Commercial Paper Program (the “Power Enterprise CP Program”) and the issuance of up to $90 million in aggregate principal amount of commercial paper notes outstanding at any one time; and
WHEREAS, Pursuant to Article V, the Ordinances and Resolution No. 427- 15, adopted by the Board on November 17, 2015, and signed by the Mayor on November 25, 2015, the Board has previously authorized the establishment of the Power Enterprise CP Program and the issuance of up to $90 million in aggregate principal amount of commercial paper notes outstanding at any one time against authorizations for indebtedness under Article V and Sections

9.107(6) and 9.107(8) of the Charter, to provide additional interim financing of capital improvements and related costs for improvements, betterments and additions to the P ower Enterprise; and

WHEREAS, On November 13, 2018, the Commission approved Resolution No. 18-0188 to authorize an increase in the principal amount of the Power CP Program to an amount not -to- exceed $250 million of commercial paper notes outstanding at any one time from a principal amount of not -to-exceed $90 million of commercial paper notes outstanding at any one time pursuant to the provisions of (i) Article V of the City’s Administrative Code; (ii) Sections

9.107(6) and 9.107(8) of the Charter, and (iii) Section 8B.124 of the Charter; and WHEREAS, the Board has approved pursuant to Ordinance No. 2- 19, adopted by the Board on January 15, 2019, and signed by the Mayor on January 18, 2019, an ordinance to authorize, an increase in the Power CP Program to an amount not -to-exceed $250 million of commercial paper notes (collectively, the “CP Notes”) outstanding at any one time, from a principal amount of not-to-exceed $90 million of commercial paper notes outstanding at any one time pursuant to the provisions of (i) Article V of the City’s Administrative Code; (ii) Sections

9.107(6) and 9.107(8) of the Charter, and (iii) Section 8B.124 of the Charter; and WHEREAS, Pursuant to Article V and the Ordinances, the Commission is authorized to negotiate and execute credit or liquidity facilities to support the payment of principal and/or interest, as applicable, on the CP Notes and any additional agreements related thereto; and WHEREAS, In connection with the Power CP Program, and in order to provide liquidity for the payment of the Commission’s maturing CP Notes (Power Series) Series A -2 (Tax Exempt) (the “Series A -2 Notes”), the Commission has previously authorized, executed and delivered a letter of credit, dated as of March 7, 2019 (the “SMBC Letter of Credit”) an d a Reimbursement Agreement, dated as of March 1, 2019, between the Commission and Sumitomo Mitsui Banking Corporation, acting through its New York Branch (“SMBC”), and a First Amended and Restated Issuing and Paying Agent Agreement, dated as of March 1, 2019 (the “Original Issuing and Paying Agent Agreement”), by and between the Commission and U.S.

Bank Trust Company, National Association, (as successor in interest to U.S. Bank, National Association); and
WHEREAS, The SMBC Letter of Credit will terminate b y its terms on March 3, 2023; and
WHEREAS, In order to support and/or maintain the Power CP Program, the Commission issued a request for bids from qualified banks to provide for a substitute letter of credit; and WHEREAS, After an evaluation of the responses to such request for bids, the Commission staff determined that the letter of credit supporting $125 million of the Series A -2 Notes (the “BANA Letter of Credit”) offered by Bank of America, N.A. (“BANA”) was most advantageous to the Commission and was determined to be the lowest cost, responsive and responsible bidder to provide liquidity support for the Power CP Program Series A-2 Notes; and WHEREAS, The proposed form of the Reimbursement Agreement, by and between the Commission and BANA (the “BANA Reimbursement Agreement”), which includes, as exhibits, the form of the BANA Letter of Credit and the form of Bank Note (the “BANA Bank Note”) to be executed by the Commission in favor of BANA evidencing any and all obligations of the Commission to reimburse BANA under the BANA Reimbursement Agreement, and a Fee Agreement, by and between the Commission and BANA (the “BANA Fee Agreement”) have been presented to the Commission and filed with the Secretary, and the Commission finds it in its best interest to enter into such agreements; and

WHEREAS, Pursuant to Resolution Nos. 15- 0183, 18- 0188 and 427- 15 and the ordinances referred to herein, the Commission is authorized to take any and all necessary action in connection with the issuance of the CP Notes, including, the execution of one or more commercial paper dealer agreements entered into in connection with the sale and issuance of the CP Notes; and
WHEREAS, In connection with the Power CP Program, the Commission issued a request for bids from qualified banks to serve as the commercial paper dealer(s) for the Power CP Program CP Notes; and
WHEREAS, After an evaluation of the responses to such request for bids, the Commission staff determined that the bids from Barclays Capital Inc., Goldman Sachs & Co.

LLC and RBC Capital Markets, LLC were most advantageous to the Commission and were determined to be the lowest cost, responsive and responsible bidder to serve as the commercial paper dealers for the Power CP Program CP Notes; and
WHEREAS, The Commission find s it necessary to execute one or more commercial paper dealer agreements for the CP Notes and to deliver an offering memorandum in connection with the sale and issuance of the CP Notes; and
WHEREAS, The proposed form of dealer agreement (the “Dealer Agreement”) has been presented to the Commission and filed with the Secretary, and the Commission finds it in its best interest to enter into such agreement with one or more qualified commercial paper dealers; and WHEREAS, In connection with the foregoing substi tution, the offering memorandum for the CP Notes will be updated to reflect the BANA Letter of Credit, the BANA Reimbursement Agreement, the BANA Fee Agreement and the Series A -2 Notes, and such other matters deemed necessary to comply with federal securities laws; and
WHEREAS, The proposed form of offering memorandum (the “Offering Memorandum”) has been presented to the Commission and filed with the Secretary; and WHEREAS, The Commission has paid, beginning no earlier than 60 days prior to the adoption of this Resolution and will pay, on and after the date hereof, certain expenditures (the “Expenditures” as defined in the Code referred to below) in connection with the acquisition, construction and/or equipping of the Power Enterprise capital improvement projects; and WHEREAS, The Commission adopts this Resolution as official action of the Commission in order to comply with Treasury Regulation §1.150- 2 and any other regulations of the Internal Revenue Service (the “Code”) relating to the qualification for reimbursement of Commission Expenditures (as defined in the Code) incurred prior to the date of issue of any CP Notes; and
WHEREAS, The Proposition A Certificates meeting the Proposition A requirements, including California Environmental Quality Act (CEQA) requirements are on file with the Clerk of the Board in accordance with Proposition A prior to the issuance of any CP Notes; now, therefore, be it
RESOLVED by the Public Utilities Commission, as follows:

Section 1. Approval of BANA Agreements . The forms of the BANA Reimbursement Agreement, the BANA Bank Note, and the BANA Fee Agreement (collectively, the “BANA Agreements”), in substantially the forms submitted to this Commission, are hereby approved and recommended to the Director of the City’s Office of Public Finance (the “Director”) for approval

pursuant to the Administrative Code, Article V thereof. The General Manager (or the duly authorized and acting General Manager) of the Commission (in either capacity, referred to herein as, the “General Manager”) or their designee, the Deputy Chief Financial Officer and the Capital Finance Director, are authorized and directed to execute and deliver the BANA Agreements in substantially said forms, subject to such additions thereto or changes therein which the General Manager, upon consultation with the City Attorney and Director, shall approve, such approval to be conclusively evidenced by the execution and delivery of such BANA Agreements, provided that the BANA Agreements may be extended for an additional term (as provide d for in Section 2 below).

Section 2. Extension of Term of BANA Letter of Credit. The General Manager or their designee, the Deputy Chief Financial Officer and the Capital Finance Director, are further authorized, upon consultation with the City Attorney and the Director, to execute one or more amendments to the BANA Agreements to extend the term of the BANA Letter of Credit authorized hereunder by an aggregate period not to exceed nine (9) years from the commencement date of the initial term, provided further th at the annual facility fee payable to BANA thereunder shall not exceed $550,000.

Section 3. Limitations. In no event shall the CP Notes exceed $250,000,000 in aggregate principal amount and in no event shall the interest rate or interest rates cause the aggregate average interest cost to exceed 12% per annum, and in no event shall the term of any bank reimbursement obligation exceed (10) years from the date of its original execution.

Section 4. Approval of Offering Memorandum. The General Manager or their designee, upon consultation with the City Attorney and the Director, is hereby authorized and directed to prepare and cause the distribution of an Offering Memorandum relating to the Power CP Program, in substantially the form on file with the Commission, subject to such a dditions thereto and changes therein, and any amendments or supplements thereto from time to time which the General Manager, upon consultation with the City Attorney and the Director, shall approve. The General Manager (or any designee thereof) is further authorized and directed to distribute, in connection with the sale of any CP Notes, one or more Offering Memoranda in such form, as the General Manager, upon consultation with the City Attorney, Bond Counsel and the Director shall approve.

Section 5. Approval of D ealer Agreements. The form of the Dealer Agreement, in substantially the form submitted to this Commission, is hereby approved and recommended to the Director for approval pursuant to Article V of the City’s Administrative Code. The General Manager or their designee, the Deputy Chief Financial Officer and the Capital Finance Director, are authorized and directed to execute and deliver one or more Dealer Agreements in substantially said form, for an initial term of not to exceed five (5) years, subject to such additions thereto or changes therein which the General Manager, upon consultation with the City Attorney and Director, shall approve, such approval to be conclusively evidenced by the execution and delivery of such Dealer Agreements.

Section 6. Extensions of T erm of Dealer Agreement. The General Manager or their designee, the Deputy Chief Financial Officer and the Capital Finance Director, are further authorized, in consultation with the City Attorney and the Director, to execute one or more amendments in orde r to extend the term of any Dealer Agreement authorized hereunder as long as the aggregate term of such Dealer Agreement does not to exceed nine (9) years from the commencement date of the initial term of such Dealer Agreement and so long as the total compensation to the commercial paper dealer(s) shall not exceed an aggregate of $250,000 per year.

Section 7. Intent to Reimburse. This Commission hereby declares the official intent of the Commission to reimburse the Commission with proceeds of the CP Notes) with respect to the Power Enterprise capital improvement projects made on and after a date that is no more than 60 days prior to the adoption of this Resolution. The Commission reasonably expects on the date hereof that it will reimburse the Expenditures with pro ceeds of the CP Notes. Each such Expenditure was and will be either (A) of a type properly chargeable to a capital account under general federal income tax principles (determined in each case as of the date of the Expenditure), (B) a cost of issuance with respect to the CP Notes, (C) a nonrecurring item that is not customarily payable from current revenues, or (D) a grant to pay a party that is not related to or an agent of the issuer so long as such grant does not impose any obligation or condition (direc tly or indirectly) to repay any amount to or for the benefit of the Commission The Commission will make a reimbursement allocation, which is a written allocation that evidences the Commission’s use of proceeds of the CP Notes or other short -term indebtedness to reimburse an Expenditure, no later than 18 months after the later of the date on which the Expenditure is paid or the component of the capital improvement projects is placed in service or abandoned, but in no event more than three years after the da te on which the Expenditure is paid. The Commission recognizes that exceptions are available for certain “preliminary expenditures,” costs of issuance, certain de minimis amounts, expenditures by “small issuers” (based on the year of issuance and not the year of expenditure) and expenditures for construction projects of at least 5 years.

Section 8. Further Actions . The General Manager or their designee, the Deputy Chief Financial Officer and the Capital Finance Director, and in consultation with the City Attorney and the Director, is hereby authorized and directed to execute such other agreements, certifications or documents and to take any and all necessary action in furtherance of the expiration of the SMBC Letter of Credit, the execution of the BANA Agreements, any future extension of the BANA Letter of Credit or the Dealer Agreement(s) and the marketing and sale of the CP Notes.

Section 9. Delegation. The General Manager is authorized to delegate any of the responsibilities or duties set forth in this resolution to the Assistant General Manager, Business Services and Chief Financial Officer of the Commission.

Section 10. Ratification. All actions heretofore taken by the officials, employees and agents of the Commission with respect to the expiration of the SMBC Letter of Credit, the substitution of the SMBC Letter of Credit with the BANA Letter of Credit, entering into the BANA Reimbursement Agreement and BANA Fee Agreement, and the execution by the Commission of the BANA Bank Note, are hereby approved, confirmed and ratified.

Section 11. Effective Date. This resolution shall take effect from and after its adoption.

I hereby certify that the foregoing resolution was adopted by the Public Utilities Commission at its meeting on February 14, 2023.

Secretary, Public Utilities Commission

4886-4749-3705.4

NP DRAFT 1/18

REIMBURSEMENT AGREEMENT
Dated as of March 1, 2023,
between

PUBLIC UTILITIES COMMISSION OF

THE CITY AND COUNTY OF SAN FRANCISCO
and
BANK OF AMERICA, N.A.
relating to:
$125,000,000

PUBLIC UTILITIES COMMISSION

OF THE CITY AND COUNTY OF SAN FRANCISCO

COMMERCIAL PAPER NOTES
(POWER SERIES)
SERIES A-2
Table of Contents

Page
i
ARTICLE 1 DEFINITIONS ........................................................................................................... 3 Section 1.1 Definitions ........................................................................................................... 3 ARTICLE 2 LETTER OF CREDIT ............................................................................................. 15 Section 2.1 Issuance of Letter of Credit ............................................................................... 15 Section 2.2 Letter of Credit Drawings ................................................................................. 15 Section 2.3 Reimbursement .................................................................................................. 15 Section 2.4 Advances; Term Loans ...................................................................................... 16 Section 2.5 Fees .................................................................................................................... 18 Section 2.6 The Bank Note .................................................................................................. 18 Section 2.7 Termination of Letter of Credit; Reduction of Stated Amount ......................... 19 Section 2.8 Computation of Interest and Fees ...................................................................... 19 Section 2.9 Payment Due on Non-Business Day to Be Made on Next Business Day ......... 19 Section 2.10 Default Rate ....................................................................................................... 19 Section 2.11 Source of Funds ................................................................................................. 19 Section 2.12 Extension of Stated Expiration Date ................................................................. 19 Section 2.13 Taxes ................................................................................................................. 20 Section 2.14 Increased Costs .................................................................................................. 21 Section 2.15 Margin Regulations ........................................................................................... 23 Section 2.16 Maximum Rate; Payment of Fee ....................................................................... 23 Section 2.17 Security of Obligations ...................................................................................... 23 Section 2.18 Commercial Paper Operations .......................................................................... 24 Section 2.19 Method of Payment; Etc .................................................................................... 25 ARTICLE 3 CONDITIONS PRECEDENT ................................................................................. 25 Section 3.1 Conditions Precedent to Effectiveness .............................................................. 25 ARTICLE 4 REPRESENTATIONS AND WARRANTIES ........................................................ 27 Section 4.1 Organization, Powers, Etc ................................................................................. 28 Section 4.2 Authorization, Absence of Conflicts, Etc .......................................................... 28 Section 4.3 Binding Obligations; Security for Bank Note ................................................... 28 Section 4.4 Governmental Consent or Approval ................................................................. 29 Section 4.5 Absence of Material Litigation ......................................................................... 29 Section 4.6 Financial Condition ........................................................................................... 29 Section 4.7 Incorporation of Representations and Warranties ............................................. 29 Section 4.8 Accuracy and Completeness of Information ..................................................... 30 Section 4.9 No Default ......................................................................................................... 30 Section 4.10 No Proposed Legal Changes ............................................................................. 30 Section 4.11 Compliance with Laws, Etc .............................................................................. 30 Section 4.12 Environmental Matters ...................................................................................... 31 Section 4.13 Tax Status of Interest on Series A-2 Notes ....................................................... 31 Section 4.14 Issuing and Paying Agent; Dealers ................................................................... 31 Table of Contents (continued)

Page
ii
Section 4.15 Regulation U ..................................................................................................... 31 Section 4.16 Liens .................................................................................................................. 31 Section 4.17 Sovereign Immunity .......................................................................................... 31 Section 4.18 City Business Days ............................................................................................ 32 Section 4.19 Usury ................................................................................................................. 32 Section 4.20 Insurance ........................................................................................................... 32 Section 4.21 ERISA ............................................................................................................... 32 Section 4.22 Sanctions Concerns and Anti-Corruption Laws ................................................ 32 Section 4.23 Swap Contracts .................................................................................................. 32 ARTICLE 5 COVENANTS ......................................................................................................... 32 Section 5.1 Affirmative Covenants ...................................................................................... 32 Section 5.2 Negative Covenants ........................................................................................... 40 ARTICLE 6 DEFAULTS ............................................................................................................. 45 Section 6.1 Events of Default and Remedies ....................................................................... 45 Section 6.2 Remedies ........................................................................................................... 47 ARTICLE 7 MISCELLANEOUS ................................................................................................ 48 Section 7.1 Amendments, Waivers, Etc ............................................................................... 48 Section 7.2 Notices ............................................................................................................... 48 Section 7.3 Survival of Covenants; Successors and Assigns ............................................... 49 Section 7.4 Unconditional Obligations ................................................................................ 50 Section 7.5 Liability of Bank; Indemnification .................................................................... 51 Section 7.6 Expenses ............................................................................................................ 52 Section 7.7 No Waiver; Conflict .......................................................................................... 52 Section 7.8 Modification, Amendment, Waiver, Etc ........................................................... 53 Section 7.9 Dealing with the Commission, the Issuing and Paying Agent and/or the Dealer 53 Section 7.10 Severability ........................................................................................................ 53 Section 7.11 Counterparts ...................................................................................................... 53 Section 7.12 Table of Contents; Headings ............................................................................. 53 Section 7.13 Entire Agreement .............................................................................................. 53 Section 7.14 Governing Law Waiver of Jury Trial ................................................................ 53 Section 7.15 Governmental Regulations ................................................................................ 54 Section 7.16 USA PATRIOT Act .......................................................................................... 54 Section 7.17 Electronic Transmissions .................................................................................. 55 Section 7.18 Assignment to Federal Reserve Bank ............................................................... 55 Section 7.19 City Requirements ............................................................................................. 55 Section 7.20 Arm’s Length Transaction ................................................................................. 55 4886-4749-3705.4

Table of Contents (continued)
Page
(i)
Appendix I – Form of Letter of Credit
Exhibit A – Form of Bank Note
Exhibit B – Form of Compliance Certificate
Exhibit C – 2023 List of City Holidays
Exhibit D – City Requirements
Exhibit E – List of Qualified Dealers
4886-4749-3705.4

This REIMBURSEMENT AGREEMENT, dated as of March 1, 2023 (together with any amendments or supplements hereto, this “ Agreement”), is between the

PUBLIC UTILITIES COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO (together with its successors and assigns, the “ Commission”) and BANK OF AMERICA, N.A. (together with its successors and assigns, the “Bank”).

WITNESSETH:

WHEREAS, pursuant to Sections 4.112 and Article 8B of the Charter of the City and County of San Francisco (the “Charter” ), the Commission has exclusive charge of the construction, management, supervision, maintenance, extension, operation, use and control of all water and energy supplies and utilities of the City under the Commission’s jurisdiction, including the hereinafter defined Power Enterprise;
WHEREAS, Pursuant to Article V of Chapter 43 ( “Article V ”) of the San Francisco Administrative Code (the “ City’s Administrative Code ”), enacted by O rdinance No. 203-98, adopted by the Board of Supervisors (the “Board”) of the City and County of San Francisco (the “City”) on June 8, 1998, and signed by the Mayor of the City (the “ Mayor”) on June 19, 1998 (“Ordinance No. 203-98” ), as amended by Ordinance No. 270- 06, adopted by the Board on October 24, 2006, and signed by the Mayor on October 31, 2006 ( “Ordinance No. 270-06” and, together with Ordinance No. 203 98, the “Ordinances” ), the Board established a procedure pursuant to which the Commission may issue short -term indebtedness, including the issuance and reissuance of commercial paper notes in anticipation of the issuance of revenue bonds; and WHEREAS, On June 5, 2018, the voters of the City approved Proposition A (“Proposition A”), which among other things, amended Section 8B.124 of the Charter of the City and County of San Francisco (the “ Charter”) to authorize the Commission to issue indebtedness, including revenue bonds, notes, commercial paper or other forms of indebtedness, for the benef it of the Power Enterprise, when authorized by ordinance approved by a two- thirds vote of the Board, or for any other lawful purpose of the power facilities of the City in furtherance of the purposes specified in Charter Section 8B.124, provided that the C ommission is prohibited from financing the construction of power plants that generate electricity using fossil fuels or nuclear energy under Proposition A; and
WHEREAS, pursuant to Section 9.107(6) of the Charter, the Board of Supervisors of the City (the “Board” ) is authorized to provide for the issuance of revenue bonds, without voter approval, issued for the purpose of the reconstruction or replacement of existing water facilities and/or electric power facilities under the jurisdiction of the Commission when authorized by resolution adopted by a three-fourths majority of all of the members of the Board; WHEREAS, pursuant to Section 9.107(8) of the Charter, the Board is also authorized to provide for the issuance of revenue bonds, without voter approval, issued to finance or refinance the acquisition, construction, installation, equipping, improvement or rehabilitation of equipment or facilities for renewable energy and energy conservation; WHEREAS, pursuant to Section 43.5.2 of the Administrative Code of the City, following Board approval of the issuance of revenue bonds by the Commission pursuant to Section 9.107 4886-4749-3705.4

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of the Charter, the Commission may incur short -term indebtedness in the form of commercial paper, temporary notes or other forms of indebtedness as long as such short -term indebtedness is incurred in anticipation of the issuance of such revenue bonds; WHEREAS, the Commission deems it necessary and desirable and in the public interest to authorize the issuance of commercial paper notes in anticipation of the issuance of revenue bonds, payable from and secured by the revenues of the Power Enterprise, after the payment of operating and maintenance expenses and any required deposits for repairs and replacements to the Power Enterprise, under and in accordance with Section 9.107, 9.109 and 9.111 of the Charter and pursuant to the terms and conditions set forth herein, for any lawful purposes of the Power Enterprise, which commercial paper notes and the interest thereon shall constitute a subordinate lien and charge on the revenues provided for the payment thereof; and WHEREAS, the Commission has previously authorized, pursuant to Resolution No. 15- 0183 adopted by the Commission on September 8, 2015, the establishment of the Power Enterprise Commercial Paper Program (the “ Power Enterprise CP Program ”) and the issuance of up to $90 million in aggregate principal amount of commercial paper notes outstanding at any one time; and
WHEREAS, pursuant to Article V, the Ordinances and Resolution No. 427-15, adopted by the Board on November 17, 2015, and signed by the Mayor on November 25, 2015, the Board has previously authorized the establishment of the Power Enterprise CP Program and the issuance of up to $90 million in aggregate principal amount of commerc ial paper notes outstanding at any one time against authorizations for indebtedness under Article V and Sections 9.107(6) and 9.107(8) of the Charter, to provide additional interim financing of capital improvements and related costs for improvements, bette rments and additions to the Power Enterprise; and
WHEREAS, on November 13, 2018, the Commission approved Resolution No. 18-0188 to authorize an increase in the principal amount of the Power CP Program to an amount not -to- exceed $250 million of commercial paper notes outstanding at any one time from a principal amount of not -to-exceed $90 million of commercial paper notes outstanding at any one time pursuant to the provisions of (i) Article V of the City ’s Administrative Code; (ii) Sections

9.107(6) and 9.107(8) of the Charter, and (iii) Section 8B.124 of the Charter; and WHEREAS, the Board has approved pursuant to Ordinance No. 2- 19, adopted by the Board on January 15, 2019, and signed by the Mayor on January 18, 2019, an ordinance to authorize, an increase in the Power CP Program to an amount not -to-exceed $250 million of commercial paper notes (collectively, the “CP Notes ”) outstanding at any one time, from a principal amount of not-to-exceed $90 million of commercial paper notes outstanding at any one time pursuant to the provisions of (i) Article V of the City ’s Administrative Code; (ii) Sections

9.107(6) and 9.107(8) of the Charter, and (iii) Section 8B.124 of the Charter; and WHEREAS, in connection with the Power CP Program, and in order to provide liquidity for the payment of the Commission ’s maturing CP Notes (Power Series) Series A -2 (Tax Exempt) (the “ Series A -2 Notes ”), the Commission has previously authorized, executed and delivered a letter of credit (the “ Prior Letter of Credit ”) and a Reimbursement Agreement, 4886-4749-3705.4

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dated as of March 1, 2019, between the Commission and Sumitomo Mitsui Banking Corporation, acting through its New York Branch (“SMBC”), and a First Amended and Restated Issuing and Paying Agent Agreement, dated as of March 1, 2019 (the “Original Issuing and Paying Agent Agreement ”), by and between the Commission and U.S. Bank Trust Company, National Association, (as successor in interest to U.S. Bank, National Association); and WHEREAS, the SMBC Letter of Credit will terminate by its terms on March 3, 2023; WHEREAS, the Commission has requested the Bank issue a letter of credit in the original stated amount of $ [136,095,891] (representing an amount supporting Series A -2 Notes in an aggregate principal amount of [$125,000,000] plus an amount equal to 270 days interest on such principal amount at the rate per annum of twelve percent (12%) computed on the basis of a 365-day year (and rounded up to the nearest dollar)) for the payment by the Issuing and Paying Agent, when and as due, of the principal of and interest on the Series A-2 Notes; and WHEREAS, the Bank is willing to issue such letter of credit upon the terms and conditions provided herein.

NOW THEREFORE, in consideration of the premises and the mutual agreements herein contained, the Commission and the Bank agree as follows:

ARTICLE 1

DEFINITIONS
Section 1.1 Definitions. As used in this Agreement:
“Acceleration Notice” has the meaning set forth in Section 6.2 hereof. “Advance” has the meaning set forth in Section 2.4(a) hereof. “Agreement” has the meaning set forth in the introductory paragraph hereof. “Alternate Facility ” has the meaning set forth in the Issuing and Paying Agent Agreement.
“Annual Budget ” means the budget or budgets prepared by the Commission in substantially the form that has been previously presented to the Bank. “Annual Debt Service” has the meaning set forth in the Master Trust Indenture. “Applicable Law ” means (i) all applicable common law and principles of equity and (ii) all applicable provisions of all (A) constitutions, statutes, rules, regulations and orders of all governmental and non -governmental bodies, (B) Governmental Approvals and (C) orders, decisions, judgments and decrees of all courts (whether at law or in equity) and arbitrators. 4886-4749-3705.4

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“Authorized Representative” means each of the General Manager of the San Francisco Utilities Commission, Assistant General Manager and Chief Financial Officer, Business Services, Deputy Chief Financial Officer, Financial Services, Debt Manager, Financial Planning, Utility Specialist, Financial Planning, Controller of the City and County of San Francisco, Director of Finance, Capital Finance Director, and any other individual designated from time to time as a “Designated Representative” a certificate executed by the General Manager of the San Francisco Public Utilities Commission delivered to the Bank. “Available Funds” means any unencumbered amounts, including non- appropriated fund balances and reserves, and cash and the book value of investments held by the Treasurer of the City for the Power Enterprise, that the Commission reasonably expects would be available, as of any date of calculation, to pay principal (or in the case of any capital appreciation bond, the accreted value thereof) of and interest on Bonds when due. “Available Power Enterprise Revenues” has the meaning set forth in the Issuing and Paying Agent Agreement.
“Bank” has the meaning set forth in the introductory paragraph hereof. “Bank Agreement ” means any credit agreement, liquidity agreement, standby bond purchase agreement, reimbursement agreement, direct purchase agreement, bond purchase agreement, or other agreement or instrument (or any amendment, supplement or other modification thereof) under which, directly or indirectly, any Person or Persons undertake(s) to make or provide funds to make payment of, or to purchase or provide credit enhancement for, bonds or notes of the Commission secured by or payable from Revenues (but excluding Reserve Account Credit Facility).
“Bank Note” has the meaning set forth in Section 2.6 hereof. “Bank Rate ” means, subject to the terms of Section 2.16 hereof, a rate of interest per annum with respect to an Advance or Term Loan, as applicable, (i) for any day commencing on the date such Advance is made up to and including the ninetieth (90th) day succeeding the date such Advance is made, equal to the Base Rate from time to time in effect and (ii) for any day commencing on the ninety- first (91st) day succeeding the date such Advance is made and thereafter, equal to the Base Rate from time to time in effect plus one percent (1.00%); provided, further, however, that immediately and automatically upon the occurrence of an Event of Default (and without any notice given with respect thereto) and during the continuance of such Event of Default, “Bank Rate” will mean the Default Rate; and provided, further, that at no time shall the Bank Rate be less than the highest rate on any outstanding Series A-2 Notes. “Base Rate” means, for any day, the rate of interest per annum equal to the highest of:
(i) the Prime Rate plus one percent (1%), (ii) the Federal Funds Rate plus two percent (2%), and (iii) seven percent (7%). Each determination of the Base Rate by the Bank shall be conclusive and binding on the Commission absent manifest error. Each change in the Base Rate will take effect simultaneously with the corresponding change or changes in the Prime Rate or the Federal Funds Rate, as the case may be.
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“Basic Documents” means, at any time, each of the following documents and agreements as in effect or as outstanding, as the case may be, at such time: (a) the Notes, (b) the Resolution, (c) Ordinance, (d) the Offering Memorandum, (e) the Dealer Agreements, (f) the Issuing and Paying Agent Agreement, (g) the Bank Note, (h) the Fee Agreement and (i) this Agreement and any and all future renewals and extensions or restatements of, or amendments or supplements to, any of the foregoing.
“BHC Act Affiliate ” of a party means an “ affiliate” (as such term is defined under, and interpreted in accordance with, 12 U.S.C. 1841(k)) of such party. “Board” has the meaning set forth in the recitals hereof. “Bond Coverage Ratio” for any Fiscal Year means the ratio of (a) Net Revenues in such Fiscal Year to (b) Annual Debt Service on the Outstanding Bonds in such Fiscal Year. “Bonds” has the meaning set forth in the Master Trust Indenture. “Bond Counsel” has the meaning set forth in the Issuing and Paying Agent Agreement. “Business Day” has the same meaning set forth in the Letter of Credit. “Certificate” of the Commission means a written certifica te signed by a duly authorized officer or employee of the Commission.
“Change in Law” means the occurrence, after the Closing Date, of any of the following:
(a) the adoption or taking effect of any Law, including, without limitation any Risk -Based Capital Guidelines, (b) any change in any Law or in the administration, interpretation, implementation or application thereof by any Governmental Authority or (c) the making or issuance of any request, rule, ruling, guideline, regulation or directive (whether or not having the force of law) by any Governmental Authority; provided that, notwithstand ing anything herein to the contrary, (i) the Dodd -Frank Wall Street Reform and Consumer Protection Act and all requests, rules, rulings, guidelines, regulations or directives thereunder or issued in connection therewith and (ii) all requests, rules, rulings, guidelines, regulations or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities shall in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted or issued. “Charter” has the meaning set forth in the recitals hereof. “City” has the meaning set forth in the recitals hereof. “Closing Date” means the date on which the Letter of Credit is issued, which, subject to the satisfaction of the conditions precedent set forth in Section 3.1 hereof, is expected to be March __, 2023.
“Code” means the Internal Revenue Code of 1986, as amended from time to time, including regulations, rulings and judicial decisions promulgated thereunder. 4886-4749-3705.4

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“Commission” has the meaning set forth in the introductory paragraph hereof. “Consulting Engineer” has the meaning set forth in the Master Trust Indenture. “Covered Entity” means any of the following: (i) a “ covered entity ” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b); (ii) a “covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or (iii) a “covered FSI ” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b).

“Dealers” means the dealer or dealers selected from time to time by the Commission (and acceptable to the Bank) to market the Series A -2 Notes pursuant t o the terms of any applicable Dealer Agreement and any permitted assigns and successors thereto. “Dealer Agreement” means each dealer agreement by and between the Commission and a Dealer, in form and substance reasonably acceptable to the Bank, as such agreement may be amended and supplemented from time to time in accordance with the terms thereof and hereof. “Debt” of any Person means, at any date, without duplication, (a) all obligations of such Person for borrowed money, (b) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments, (c) all obligations of such Person to pay the deferred purchase price of property or services, except trade accounts payable arising in the ordinary course of business, (d) all obligatio ns of such Person as lessee under capital leases, (e) all debt of others secured by a Lien on any asset of such Person, whether or not such debt is assumed by such Person, (f) all Guarantees by such Person of debt of other Persons, (g) all obligations of s uch Person under any Swap Contract and (h) all obligations of such Person to reimburse or repay any bank or other Person in respect of amounts paid or advanced under a letter of credit, credit agreement, liquidity facility or other instrument.
“Default” means any condition or event which with the giving of notice or lapse of time or both would, unless cured or waived, become an Event of Default. “Default Rate ” means, for any day, subject to the terms of Section 2.16 hereof, a per annum rate of interest equal to the sum of the Base Rate from time to time in effect plus four percent (4.00%).
“Default Right ” has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable. “Designated Jurisdiction” means any country or territory to the extent that such country or territory itself is the subject of any Sanction.
“Drawing” has the meaning set forth in Section 2.3 hereof. “DTC” means The Depository Trust Company, New York, New York, and any successor securities depository.
4886-4749-3705.4

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“Employee Plan” means an employee benefit plan covered by Title IV of ERISA and maintained for employees of the Commission.
“Environmental Laws ” means any and all federal, state and local statutes, laws, ordinances, rules, judgments, orders, decrees, permits, concessions, grants, franchises, licenses, agreements or other governmental restrictions relating to the environment or to emissions, discharges or releases of pollutants, contaminants, petroleum or petroleum products, chemicals or industrial, toxic or hazardous substances or wastes into the environment including, without limitation, ambient air, surface water, ground water or land, or otherwise relating to the processing, distribution, use, treatment, storage, disposal, transport or handling of pollutants, contaminants, petroleum or petroleum products, chemicals or industrial, toxic or hazardous substances or wastes or the clean-up or other remediation thereof. “ERISA” means the Employee Retirement Income Security Act of 1974, as amended, or any successor statute thereto.
“Event of Default” has the meaning set forth in Section 6.1 hereof. “Excluded Taxes” means, with respect to the Bank or any Participant, (a) taxes imposed on or measured by its overall net income (however denominated), and franchise taxes imposed on it (in lieu of net income taxes), by the jurisdiction (or any political subdivision thereof) under the laws of which the Bank or such Participant is organized or in which its principal office is located and (b) any branch profits taxes imposed by the United States or any similar tax imposed by any other jurisdiction in which the Commission is located. “Federal Funds Rate ” means, for any day, the rate per annum equal to the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day; provided that (a) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (b) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate (rounded upward, if necessary, to a whole multiple of 1/100 of 1%) charged to the Bank on such day on such transactions as determined by the Bank. Each determination of the Federal Funds Rate by the Bank shall be deemed conclusive and binding on the Commission absent manifest error.
“Fee Agreement” means that certain Fee Agreement dated the Closing Date, between the Commission and the Bank, as amended, supplemented, restated or otherwise modified from time to time in accordance with the terms hereof and thereof. “Final Drawing Notice” has the meaning set forth in the Letter of Credit. “ Fiscal Year” has the meaning set forth in the Master Trust Indenture. “Fitch” means Fitch Ratings, Inc. “GAAP” means generally accepted accounting principles in the United States of America from time to time as set forth in (a) the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and (b) statements and pronouncements of the Government Accounting Standards Board, as modified by the 4886-4749-3705.4

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opinions, statements and pronouncements of any similar accounting body of comparable standing having authority over accounting by governmental entities. “Governmental Approval ” means an authorization, consent, approval, license or exemption of, registration or filing with, or report to, any Governmental Authority. “Governmental Authority ” means the government of the United States or any other nation or any political subdivision thereof or any governmental or quasi -governmental entity, including any court, department, commission, board, bureau, agency, administration, central bank, service, district or other instrumentality of any governmental entity or other entity exercising executive, legislative, judicial, taxing, regulatory, fiscal, monetary or administrative powers or functions of or pert aining to government, or any arbitrator, mediator or other Person with authority to bind a party at law.
“Guarantees” means, for any Person, all guarantees, endorsements (other than for collection or deposit in the ordinary course of business) and other contingent obligations of such Person to purchase, to provide funds for payment, to supply funds to invest in any other Person or otherwise to assure a creditor of another Person against loss. “Hetch Hetchy Project” means the Hetch Hetchy Water and Power Project, including the O’Shaughnessy Dam, the Hetch Hetchy Reservoir, the Canyon and Mountain Tunnels, the Kirkwood, Moccasin and Holms Powerhouses, Cherry Lake and its dam, Lake Eleanor and its dam, the related water storage and transportation and hydro- electric generating facilities down to and including the Moccasin Powerhouse, all located in Yosemite National Park, Stanislaus National Forest and Tuolumne County, the rights to which were granted to the City by the Raker Act of 1913, and the related transmission facilities down to the City of Newark. “Indemnified Taxes” means Taxes other than Excluded Taxes. “Insolvency Proceeding ” means a receivership, insolvency, liquidation, resolution, or similar proceeding.

“Investment Policy and Guidelines ” means the investment guidelines of the City as in effect on the date hereof, as such investment guidelines may be amended from time to time in accordance with the Issuing and Paying Agent Agreement, the Resolutions and State laws, as applic able.
“Issuing and Paying Agent” has the meaning set forth in the recitals to this Agreement. “Issuing and Paying Agent Agreement ” has the meaning set forth in the recitals to this Agreement.
“Law” means any treaty or any Federal, regional, state and local law, statute, rule, ordinance, regulation, code, license, authorization, decision, injunction, interpretation, policy, guideline, supervisory standard, order or decree of any court or other Governmental Authority. 4886-4749-3705.4

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“Letter of Credit ” means the irrevocable letter of credit issued by the Bank for the account of the Commission in favor of the Issuing and Paying Agent supporting the Series A -2 Notes, in the form of Appendix I hereto, with appropriate insertions, as amended. “Lien” means, with respect to any asset, (a ) any lien, charge, claim, mortgage, security interest, pledge or assignment of revenues of any kind in respect of such asset or (b) the interest of a vendor or lessor under any conditional sale agreement, capital lease or other title retention agreement relating to such asset.
“Master Trust Indenture ” means the Trust Indenture, dated as of May 1, 2015, between the Commission and U.S. Bank Trust Company, National Association (as successor in interest to U.S. Bank National Association) , as trustee for the holders from time to time of the Commission’s power revenue bonds.
“Material Litigation” shall have the meaning assigned to such term in Section 4.5. “Maximum Rate ” means the lesser of (a) the maximum non -usurious interest rate that may, under applicable federal law and applicable state law, be contracted for, charged or received under such laws and (b) 12% per annum; provided, however, that if the City or the Commission increases the maximum rate allowable, which currently set forth in clause (b) of this “Maximum Rate” definition, at any time during the term hereof, then such increased rate shall be the Maximum Rate.
“Net Revenues” for any Fiscal Year (or other designated twelve -month period) means Revenues in such Fiscal Year (or other designated twelve-mont h period), less (a) Operation and Maintenance Expenses, and (b) any Priority R&R Fund Deposit for such Fiscal Year (or other designated twelve-month period).
“No-Issuance Notice” has the meaning set forth in the Letter of Credit. “Notes” means, collectively, the Series A-1 Notes and the Series A-2 Notes. “Obligations” means the Reimbursement Obligations (which includes amounts owing to the Bank evidenced by the Bank Note) and all other obligations of the Commission to the Bank arising under or in relation to this Agreement or the Fee Agreement. “Offering Memorandum ” means any offering memorandum or similar disclosure document relating to the Series A -2 Notes, among others, and the Commission as may be prepared by or on behalf of the Commission or the Dealers from time to time in connection with the offering and sale of Series A-2 Notes.
“Operation and Maintenance Expenses ” means the costs of the proper operation, maintenance and repair of the Power Ent erprise and taxes, assessments or other governmental charges lawfully imposed on the Power Enterprise or the Revenues, or payments in lieu thereof, as determined in accordance with GAAP (as defined in the Master Trust Indenture). Operation and Maintenance Expenses shall include the payment of pension charges and proportionate payments to such compensation and other insurance or outside reserve funds as the Commission may establish or the Board may require with respect to employees of the Power Enterprise, a s 4886-4749-3705.4

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provided in Section 16.103(a) of the Charter. Operation and Maintenance Expenses shall also include repairs and maintenance costs that constitute operating expenses in accordance with GAAP (as defined in the Master Trust Indenture). Operation and Maintenance Expenses shall not include (a) any allowance for amortization, depreciation or obsolescence, (b) operation and maintenance expenses of the Water Enterprise, (c) operation and maintenance expenses of the Wastewater Enterprise, (d) operation and maintenance expenses of any Separate System, (e) any expense for which, or to the extent to which, the Commission is or will be paid or reimbursed from or by any source that is not included or includable as Revenues, (e) losses from any sale or other disposition of Power Enterprise assets, and (g) non- cash losses and costs that may be required or permitted under GAAP (as defined in the Master Trust Indenture) to be expensed, including deferred expenses and unrealized mark-to-market losses. “Ordinance” has the meaning set forth in the recitals hereof. “Original Stated Amount” has the meaning set forth in Section 2.1 hereof. “Other Debt Documents” has the meaning set forth in Section 5.1(c)(i) hereof. “Other Taxes” means all present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies arising from any payment made hereunder or under any other Basic Document or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement or any other Basic Document. “Parity Debt ” means the Series A -2 Notes, the Bank Note, the Series A -1 Notes, the Series A-1 Bank Note, and all obligations of the Commission relating to the Series A -2 Notes and the Series A -1 Notes under the Issuing and Paying Agent Agreement, this Agreement and the Series A-1 Reimbursement Agreement, and all other bonds, notes or other obligations of the Commission for borrowed money payable from and secured by a pledge of and lien and charge on revenues of the Power Enterprise on a parity with the lien on Available Power Enterprise Revenues securing the payment of the Series A-2 Notes or the Obligations. “Parity Notes” has the meaning set forth in the Issuing and Paying Agent Agreement. “Participant” has the meaning set forth in Section 7.3(b) hereof. “Participation” has the meaning set forth in Section 7.3(b) hereof. “Payment Account ” means the payment account for the Bank set forth in Section 7.2 hereof.
“Person” means an individual, a firm, a corporation, a partnership, a limited liability company, an association, a trust or any other entity or organization, including a government or political subdivision or any agency or instrumentality thereof. “Power Enterprise” means the Commission’s Power Enterprise established and existing as of the date of the Master Trust Indenture to provide electric power and related services to the City and its departments, agencies and commissions as well as other customers both in and outside of the City, including that portion of the Hetch Hetchy Project used for power generation, 4886-4749-3705.4

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and all other power generation, transmission and distribution facilities and related facilities, streetlights, property and rights constituting a part of the Power Enterprise, together with any and all additions, improvements, betterments, renewals, replacements and repairs thereto and extensions thereof, but shall not include: (a) the Water Enterprise, (b) the Wastewater Enterprise, or (c) any Separate System.
“Power Enterprise Debt ” means Debt of the Commission secured by Revenues, including, without limitation, Bonds, Series A-2 Notes and Parity Debt. “Prime Rate” means on any day, the rate of interest in effect for such day as publicly announced from time to time by the Bank as its “prime rate.” The “prime rate” is a rate set by the Bank based upon various factors including the Bank’ s costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, ab ove, or below such announced rate. Any change in such rate announced by the Bank shall take effect at the opening of business on the day specified in the public announcement of such change.
“Prior Letter of Credit” has the meaning set forth in the recitals to this Agreement. “Priority R&R Fund Deposits ” means, for any Fiscal Year or other designated twelve - month period, the amount, if any, required by the Charter to be deposited in the Reconstruction and Replacement Fund established pursuant to the Master Trust Indenture from Revenues prior to deposits in such Fiscal Year into the Bond Fund established pursuant to the Master Trust Indenture.
“Program Size ” means [$250,000,000] less the aggregate amount, if any, of all Reduction Amounts.
“Property” means any interest in any kind of property or asset, whether real, personal or mixed, or tangible or intangible, whether now owned or hereafter acquired. “QFC” has the meaning assigned to the term “ qualified financial contract” in, and shall be interpreted in accordance with, 12 U.S.C. 5390(c)(8)(D). “Quarterly Date” means the first Business Day of each March, June, September or December.
“Qualified Counterparty” means a party other than the Commission which is the party to a Swap Agreement and, at the time of execution and delivery of the Swap Agreement, (a) (i) whose senior debt obligations are or claims -paying ability is rated in one of the three highest rating categories of each of at least two Rating Agencies (without regard to any gradations within a rating category) or (ii) whose obligations under the Swap Agreement are guaranteed for the entire term of the Swap Agreement by a Person whose senior debt obligations are or claims -paying ability is rated in one of the three highest rating categor ies of each of at least two Rating Agencies (without regard to any gradations within a rating category) and (b) which is otherwise qualified to act as the party to a Swap Agreement with the Commission under any applicable law.
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“Qualified Dealer” means, (i) RBC Capital Markets, LLC, (ii) Goldman, Sachs & Co., (iii) Barclays Capital Inc. and (iv) any other financial institution on the list set forth in Exhibit E hereto which financial institution (or any parent or affiliate of such financial institution) has capital of not less than $500,000,000, and underlying ratings from S&P and Fitch of at least “A-” (or its equivalent) and “A-” (or its equivalent), respectively (unless, in each instance, the Bank in its discretion provides in writing an exception for a pa rticular Dealer under specified circumstances), and (iv) at any time after the Closing Date, any other financial institution (or any parent or affiliate of such financial institution) with capital of not less than $500,000,000, and underlying ratings from S&P and Fitch of at least “A-” (or its equivalent) and “A-” (or its equivalent), respectively (unless, in each instance, the Bank in its sole discretion consents in writing to any other financial institution acting as a Dealer) approved in writing by the B ank, which approval shall not be unreasonably withheld or delayed. “Rating Agency ” and “Rating Agencies ” means, individually or collectively, as applicable, Fitch and S&P.
“Reduction Amount” has the meaning set forth in Section 2.18(c) hereof. “Refundable Credits” means amounts payable by the Federal government to the Commission under direct-pay subsidy programs substantially similar to the Build America Bond program under Section 54AA of the Code.
“Reimbursement Obligations ” means any and all obligations of the Commission to reimburse the Bank for Drawings under the Letter of Credit and all obligations to repay the Bank any Advance or Term Loan, including in each instance all interest accrued thereon, which obligations are evidenced and secured by the Bank Note. “Reserve Account Credit Facility ” has the meaning set forth in the Master Trust Indenture.
“Resolution” has the meaning set forth in the recitals hereof. “Revenues” means all revenues, rates and charges received and accrued by the Commission for electric power and energy and other services, facilities and commodities sold, furnished or supplied by the Power Enterprise, together with income, earnings and profits therefrom (including interest earnings on the proceeds of any Bonds pending applicatio n thereof), as determined in accordance with GAAP (as defined in the Master Trust Indenture).

Revenues shall include payments to the Power Enterprise on or with respect to loans from any Separate System maintained by the Commission. Revenues shall not incl ude (a) proceeds from the issuance of any obligations for borrowed money, (b) amounts loaned to the Power Enterprise, (c) Swap Agreement Receipts, (d) proceeds from taxes, (e) customer deposits while retained as such, (f) contributions in aid of construction, (g) gifts, (h) grants, (i) insurance or condemnation proceeds that are properly allocable to a capital account, (j) non -cash revenues or gains that may be required or permitted under GAAP (as defined in the Master Trust Indenture), including mark-to-market gains and deferred revenues, (k) money received by the Commission as the proceeds of the sale of any portion of the properties of the Power Enterprise, (l) amounts by their terms not available for the payment of Operation and Maintenance Expenses or p rincipal and 4886-4749-3705.4

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interest on the Bonds, (m) Refundable Credits; (n) revenues of any Separate System, (n) Water Enterprise revenues as defined in the document or agreement governing the then -outstanding senior lien obligations of the Water Enterprise for borrow ed money, and (o) Wastewater Enterprise revenues as defined in the document or agreement governing the then -outstanding senior lien obligations of the Wastewater Enterprise for borrowed money. “Risk-Based Capital Guidelines ” means (i) the risk -based capital guidelines in effect in the United States, including transition rules, and (ii) the corresponding capital regulations promulgated by regulatory authorities outside the United States including transition rules, and any amendments to such regulations.
“S&P” means Standard & Poor ’s Ratings Services, a Standard & Poor ’s Financial Services LLC business.
“Sanction(s)” means any international economic sanction administered or enforced by the United States Government (including, without limitation, OFAC), the United Nations Security Council, the European Union, Her Majesty’ s Treasury or other relevant sanctions authority.
“Senior Debt” means any Debt issued or incurred by the Commission and secured by or payable from Revenues on a basis senior or superior to the L ien in favor of the Series A -2 Notes and other Parity Notes and includes, without limitation, the Bonds. “Separate System” means any electric power or energy generation, transmission, or other facilities, property and rights that may be hereafter purchased, constructed or otherwise acquired by the Commission where the revenues derived from the ownership and operation of shall be pledged to the payment of bonds or other obligations for borrowed money issued or to purchase, construct or otherwise acquire such facilities, property and rights and shall not be included in Revenues and the operation and maintenance expenses with respect to which shall not be included in Operation and Maintenance Expenses.
“Series” has the meaning set forth in the Master Trust Indenture. “Series A -1 Bank Note ” has the meaning set forth in the Issuing and Paying Agent Agreement.
“Series A-1 Notes” has the meaning set forth in the Issuing and Paying Agent Agreement. “Series A -1 Reimbursement Agreement ” has the meani ng set forth in the Issuing and Paying Agent Agreement.
“Series A-2 Notes” has the meaning set forth in the recitals to this Agreement. “SMBC” has the meaning set forth in the recitals to this Agreement. “State” means the State of California.
“Stated Amount” has the meaning set forth in the Letter of Credit. 4886-4749-3705.4

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“Stated Expiration Date” has the meaning set forth in the Letter of Credit. “Swap Agreement ” means any financial instrument that: (a) is entered into by the Commission with a party that is a Qualified Counterparty at the time the instrument is entered into; (b) is entered into with respect to all or a portion of a Series of Bonds; (c) is for a term not extending beyond the final maturity of the Series of Bonds or portion thereof to which it relates; (d) provides that the Commission shall pay to such Qualified Counterparty an amount accruing at either a fixed rate or a variable rate, as the case may be, on a notional amount equal to or less than the principal amount of the Series of Bonds or portion thereof to which it relates, and that such Qualified Counterparty shall pay to the Commission an amount accruing at either a variable rate or fixed rate, as appropriate, on such notional amount; (e) provides that one party shall pay to the other party any net amounts due under such instrument; and (f) has been designated to the Trustee in the Supplemental Trust Indenture (as defined in the Master Trust Indenture) authorizing the issuance of the related Series of Bonds or portion thereof or in a Certi ficate (as defined in the Master Trust Indenture) of the Commission as a Swap Agreement with respect to such Bonds.
“Swap Agreement Receipts ” means the regularly scheduled net amounts required to be paid by a Qualified Counterparty to the Commission pursuant to a Swap Agreement. “Taxes” means all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, fines, additions to tax or penalties applicable thereto.
“Term Loan” has the meaning set forth in Section 2.4(e) hereof. “Term Loan Conversion Date” has the meaning set forth in Section 2.4(b) hereof. “Term Loan Maturity Date ” means, with respect to any Term Loan, the earliest of (a) the third anniversary of the Term Loan Conversion Date for such Term Loan, (b) the third anniversary of the Stated Expiration Date as in effect on the date on which the related Term Loan was made, the date an Alternate Facility be comes effective in accordance with Section 9.02 of the Issuing and Paying Agent Agreement, (d) the date on which the Stated Amount is permanently reduced to zero or the Letter of Credit is otherwise terminated prior to the Stated Expiration Date, including as a result of the occurrence of an Event of Default and (e) the Business Day when Series A -2 Notes or bonds are sold to fund the repayment of any Term Loan.
“Termination Date” has the meaning set forth in the Letter of Credit. “2022 Audited Financial Statements” has the meaning set forth in Section 4.6 “Unpaid Drawing” has the meaning set forth in Section 2.3 hereof. 4886-4749-3705.4

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“Wastewater Enterprise” means the municipal sanitary waste and storm water collection, treatment and disposal system, as located partially within and partially without the City, and all additions, betterments, and extensions to said sanitary waste and storm water system.
“Water Enterprise” means the municipal water supply, storage and distribution system of the Commissio n, as located partially within and partially without the City, including all of the presently existing municipal water system of the City, and all additions, betterments, and extensions to said water system, but excluding any water supply, storage or distr ibution facilities which constitute part of the Hetch Hetchy Project.

The foregoing definitions are equally applicable to both the singular and plural forms of the defined terms. Any capitalized terms used herein which are not specifically defined herein have the same meanings herein as in the Issuing and Paying Agent Agreement.

All references in this Agreement to times of day are references to New York time unless otherwise expressly provided herein. Unless otherwise inconsistent with the terms of this Agreement, all accounting terms are interpreted and all accounting determinations hereunder are made in accordance with GAAP.

ARTICLE 2

LETTER OF CREDIT
Section 2.1 Issuance of Letter of Credit . Upon the terms, subject to the conditions and relying upon the representations and warranties set forth in this Agreement or incorporated into Section 4.7 hereof, the Bank agrees to issue the Letter of Credit substantially in the form of Appendix I hereto. The Letter of Credit will be in the original stated amount of [$136,095,891] (the ”Original Stated Amount ”), which is the sum of (i) the aggregate principal amount of the Series A-2 Notes authorized to be issued under the Issuing and Paying Agent Agreement, plus (ii) interest thereon at the rate of 12 percent (12%) p er annum for a period of two hundred seventy (270) days calculated on the basis of a 365- day year (and rounded up to the nearest dollar).

Section 2.2 Letter of Credit Drawings. The Issuing and Paying Agent is authorized to make Drawings under the Letter of Credit in a ccordance with its terms. The Commission authorizes the Bank to make payments under the Letter of Credit in the manner therein provided.

The Commission irrevocably approves reductions and reinstatements of the Stated Amount as provided in the Letter of Credit.

Section 2.3 Reimbursement. Subject to the provisions of Section 2.4 hereof, the Commission agrees to pay, or to cause to be paid, to the Bank (i) on each date on which the Bank honors any demand for payment under the Letter of Credit (each such payment by the Bank being referred to as a “Drawing”) a sum equal to the amount so paid under the Letter of Credit (any so paid until reimbursed being referred to as an “ Unpaid Drawing”), plus (ii) interest on each such Unpaid Drawing from and including the date such Drawing is paid until the Bank is reimbursed in full for such Drawing equal to the Default Rate. Subject to the provisions of 4886-4749-3705.4

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Section 2.4 hereof respecting Advances (each of which Advances when made will constitute of a Drawing in an amount equal to the amount of such Advance), the Commission is obligated, without notice of a Drawing or demand for reimbursement (which notice is waived by the Commission), to reimburse the Bank for all Drawings on the same day as made. The amount of any Drawing relating to accrued interest on the related Series A-2 Notes must be reimbursed by the Commission the date on which such Drawing is made. The Commission and the Bank agree that the reimbursement in full of each Drawing on the day such Drawing is made is intended to be a contemporaneous exchange for new value given to the Commission by the Bank. If a Drawing is reimbursed at or prior to 4:00 p.m. on the same day on which it is made, no interest will be payable such Drawing.

Section 2.4 Advances; Term Loans.
(a) Making of Advances . The Bank agrees that if (i) the Bank pays any Drawing under the Letter of Credit, (ii) the portion of such Drawing relating to the principal amount of the related Series A-2 Notes will not be reimbursed in full on the date of such Drawing by payment to the Bank as provided in Section 2.3 hereof and (iii) (A) the representations and warranties of the Commission contained in Article Four of this Agreement are true and correct as of the date of such Drawing, and (B) no Default or Event of Default has occurred and is continuing on the date of such Drawing, the portion of such Drawing relating to the principal amount of the related Series A-2 Notes (or the portion thereof) which is not so reimbursed by the Commission to the Bank will automatically constitute an a dvance (individually an “Advance” and, collectively, the “Advances”) made by the Bank to the Commission on the date of and in an amount equal to the amount of such Drawing relating to the principal amount of the related Series A -2 Notes (or portion thereof) which is not so reimbursed by the Commission to the Bank. For purposes of Section 2.3 hereof, each Advance when made will constitute reimbursement of the portion of the related Drawing relating to the principal amount of the related Series A -2 Notes in an amount equal to the amount of such Advance; and each Advance when made will preclude, to the extent of the amount of such Advance, the portion of the related Drawing relating to the principal amount of the related Series A -2 Notes from being or constitut ing an Unpaid Drawing. Unless the Commission has otherwise previously advised the Bank in writing, payment by the Bank of any Drawing under the Letter of Credit will be deemed to constitute a representation and warranty by the Commission that on the date o f such Drawing (i) the representations and warranties of the Commiss ion contained in Article Four, except Sections 4.5 and 4.6 he reof, are true and correct on such date, (ii) no event has occurred and is continuing which has or is having a material adverse effect on the Commission ’s obligations under this Agreement, the Fee Agreement, the Bank Note or the any of the other Basic Documents to which the Commission is a party or the ability of the Commission to perform its obligations in connection herewith or therewith and (iii) no Default or Event of Default has occurred and is continuing on such date. (b) Payment of Principal and Interest on Advances . Except as otherwise required or permitted by Section 2.4(c), 2.4(d) or 2.4(e) of this Agreement, the Commission shall repay, or to be repaid, the unpaid principal amount of each Advance on the earlier to occur of (i) the ninetieth (90th) day following the date such Advance was made and (ii) the Termination Date (with respect such Advance, the “ Term Loan Conversion D ate”). The Commission shall pay interest on the amount of each Advance from the date of such Advance until paid in full at the Bank Rate from to time in effect; provided that, from and after the occurrence of an Event of 4886-4749-3705.4

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Default, each Advance will bear interest at the Default Rate. Interest on each Advance shall be payable monthly, in arrears, on the first Business Day of each month (commencing with the first such date to occur after the making of the related Advance) and upon prepayment or maturity of such Advance. The amount of accrued interest on any Advance must be reimbursed by the Commission on the Term Loan Conversion Date.
(c) Mandatory Prepayment of Advances and Term L oans. The Commission shall prepay Advances and Term Loans if the aggregate proceeds of the issuance of Series A -2 Notes exceed the aggregate principal amount of Series A -2 Notes maturing on the date of such issuance. On the date of each such prepayment of Advances or Term Loans, as applicable (or portions thereof), the Commission shall pay to the Bank interest accrued and unpaid to the date of such prepayment on the aggregate amount of the Advances and Term Loans (or portions thereof) prepaid. Upon the Bank’ s receipt of any payment or prepayment of any Advance or Term Loan, the amount of such Advance and/or Term Loan shall be reduced by the amount of such payment or prepayment. Any prepayment pursuant to this paragraph (c) or paragraph (d) below will be applied first to outstanding Term Loans, in the inverse order of maturity, and then to outstanding Advances in the inverse order of maturity. (d) Optional Prepayment . The Commission may prepay Advances in whole, or in part in a minimum amount of $500,000 and in integral multiples of $100,000 in excess thereof, in each case without penalty or premium, on one Business Day ’s prior written notice, such prepayment to be applied as set forth in paragraph (c) above. (e) Term Loan Option. On a Term Loan Conversion Date, each Advance maturing on such date will, if the conditions set forth in Section 2.4(f) hereof have been satisfied, be converted to a term loan (a “Term Loan”).
(f) Conditions Precedent to Term Loans. Principal amounts owed by the Commission for Advances remaining unpaid on their respective Term Loan Conversion Dates will be converted to Term Loans if and only if:
(i) the representations and warranties of the Commission contained in Article Four, e xcept Sections 4.5 and 4.6, of this Agreement are true and correct on and as of the Term Loan Conversion Date, and deemed made as of such date, as though made on and as of such date;
(ii) no event has occurred and is continuing which has or is having a material adverse effect on the Commission ’s obligations under this Agreement, the Fee Agreement, the Bank Note or the any of the other Basic Documents to which the Commission is a party or the ability of the Commission to perform its obligations in connection herewith or therewith;
(iii) no Default or Event of Default has occurred and is continuing or would result from converting the Advance to a Term Loan; and (iv) no No-Issuance Notice is in effect; no Final Drawing Notice is in effect; and no Acceleration Notice has been delivered to the Commission. 4886-4749-3705.4

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(g) Repayment of Term Loans. The Commission agrees to pay to the Bank an amount equal to the unpaid principal amount of each Term Loan made by the Bank, together with interest thereon from and including the Term Loan Conversion Date to but excluding the date the Bank is reimbursed therefor at a rate per annum equal to the Bank Rate; provided that, from and after the occurrence of an Event of Default, each Term Loan will bear interest at the Default Rate. Interest on the unpaid balance of each Term Loan must be paid to the Bank monthly in arrears on the first Business Day of each calendar month during the term of such Term Loan (commencing with the first such date to occur after the applicable Term Loan Conversion Date) and on the Term Loan Maturity Date. Each Term Loan must be repaid in equal (or as nearly as possible) quarterly installments (each such installment referred to as a “ Principal Payment ”), such Principal Payments to commence on the first Quarterly Date that is at least ninety (90) days following the date of the related Advance and on each Quarterly Date thereafter and with the final installment being due and payable on the Term Loan Maturity Date, until paid in full; provided that the unpaid amount of each Term Loan must be paid in full not lat er than the applicable Term Loan Maturity Date; provided, further, that if the Commission elects to prepay a Term Loan in part, such prepayment will be applied (i) to the Term Loans in inverse order of the Term Loan Conversion Dates of the Term Loans and ( ii) to the remaining Principal Payments relating to each Term Loan prepaid in inverse order of the due dates of such Principal Payments. (h) Prepayment of Term Loans . The Authority may prepay any Term Loan in whole, or in part in a minimum amount of $500,000 and in integral multiples of $100,000 in excess thereof, in each case without penalty, on two Business Days ’ prior written notice, such prepayment to be applied as set forth in paragraph (g) above.

Section 2.5 Fees. The Commission agrees to pay and perform its obligations provided for in the Fee Agreement, including the payment of all fees and expenses provided for therein in the amounts and on the dates set forth therein. The terms and provisions of the Fee Agreement are incorporated herein by reference. All references to amounts due under this Agreement will be deemed to include all amounts and obligations (including, but not limited to, fees and expenses) due under the Fee Agreement. All fees paid under this Agreement and the Fee Agreement will be fully earned when due and nonrefundable when paid.

Section 2.6 The Bank Note . All Reimbursement Obligations will be evidenced by one promissory note of the Commission, designated “ San Francisco Public Utilities Commission Series A-2 Bank Note, (Power Series),” in substantially the form of Exhibit A hereto (the “Bank Note”), to be issued on the Closing Date, payable to the Bank in a principal amount equal to the Original Stated Amount. All Reimbursement Obligations owed to the Bank and all payments and prepayments made on account of principal and interest thereof will be recorded by the Bank on the schedule (or a continuation thereof) attached to the Bank Note, it being understood, however, that failure by the Bank to make any such endorsement will not affect the obligations of the Commission hereunder or under the Bank Note in respect of unpaid principal of and interest on the Reimbursement Obligations. The Commission shall pay principal and interest on the Bank Note on the dates and at the rates provided for in Sections 2.3 and 2.4 hereof with respect to Unpaid Drawings, Advances and Term Loans. The Commission’ s obligations to repay each Advance and Term Loan and to pay interest thereon as provided herein shall be evidenced and secured by the Bank Note, and the C ommission shall redeem the Bank Note on each date on which the Commission is required to make a principal payment on an Advance or Term Loan, as 4886-4749-3705.4

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applicable, in an amount equal to the Advance or Term Loan payment, as applicable, due on such date.

Section 2.7 Termination of Letter of Credit; Reduction of Stated Amount . (a) Notwithstanding any provision of this Agreement to the contrary, the Commission agrees not to terminate or replace the Letter of Credit, except upon (i) the payment to the Bank of all Obligations payable hereunder and under the Bank Note and the Fee Agreement and (ii) the Commission providing the Bank with thirty (30) days ’ prior written notice of its intent to terminate or replace the Letter of Credit; provided that all Obligations to the Bank must be paid to the Bank at or prior to the time of termination and any such termination or replacement of the Letter of Credit must be in compliance with the terms of the Issuing and Paying Agent Agreement.
(b) Notwithstanding any provision of this Agreement to the contrary, the Commission agrees not to permanently reduce the Stated Amount, except upon the Commission providing the Bank with thirty (30) days ’ prior written notice of its intent to permanently reduce the Stated Amount.

Section 2.8 Computation of Interest and Fees . Fees payable hereunder and under the Fee Agreement will be calculated on the basis of a year of 360 days and the actual number of days elapsed. Interest payable hereunder and under the Bank Note will be calculated on the basis of a year of 365 or 366 days, as t he case may be, and the actual number of days elapsed. Interest will accrue during each period during which interest is computed from and including the first day thereof to but excluding the last day thereof.

Section 2.9 Payment Due on Non -Business Day to Be Made on N ext Business Day. If any sum becomes payable pursuant to this Agreement on a day which is not a Business Day, the date for payment thereof will be extended, without penalty, to the next succeeding Business Day, and such extended time will be included in the computation of interest and fees.

Section 2.10 Default Rate . If any Obligation is not paid when due, such Obligation will bear interest until paid in full at a rate per annum equal to the Default Rate, payable on demand. Upon the occurrence and during the continuance of an Event of Default, the Obligations of the Commission hereunder will bear interest at the Default Rate, which interest will be payable by the Commission to the Bank upon demand therefor and be calculated on the basis of a 365- or 366-day year, as the case may be, and actual days elapsed.

Section 2.11 Source of Funds . All payments made by the Bank pursuant to the Letter of Credit will be made from funds of the Bank and not from the funds of any other Person.

Section 2.12 Extension of Stated Expiration Date . If the Commission on any date which is not more than one hundred twenty (120) days nor less than ninety (90) days prior to the Stated Expiration Date (as the same may be extended from time to time) submits to the Bank a written request for an extension of the Stated Expiration Date for a period as specified in such written (not to exceed three years), the Bank shall make reasonable efforts to respond to such request thirty (30) days after receipt of all information necessary, in the Bank ’s reasonable judgment, to per mit the Bank to make an informed credit decision. If the Bank fails to 4886-4749-3705.4

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definitively respond to request within such period of time, the Bank will be deemed to have refused to grant the extension requested. The Bank may, in its sole and absolute discretion, decide to accept or reject any such proposed extension, and no extension will become effective unless the Bank has consented thereto writing. The consent of the Bank, if granted, is conditioned upon the preparation, execution and delivery of documentation in form and substance reasonably satisfactory to the Bank and consistent with this Agreement. If such an extension request is accepted by the Bank in its sole and absolute discretion, the then current Stated Expiration Date for the Letter of Credit will be extended to the agreed to by the Commission and the Bank.

Section 2.13 Taxes.
(a) Payments Free of Taxes. Any and all payments by or on account of any obligation of the Commission hereunder, under the Bank Note or under the Fee Agreement must be made free and clear of and without reduction or withholding for any Indemnified Taxes or Other Taxes; provided that if the Commission is required by Applicable Law to deduct any Indemnified Taxes (including any Other Taxes) from such payments, then (i) the sum payable will be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section) the Bank or any Participant receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Commission shall make such deductions and (iii) the Commission shall time ly pay the full amount deducted to the relevant Governmental Authority in accordance with Applicable Law. (b) Payment of Other Taxes by the Commission . Without limiting the provisions of paragraph (a) above, the Commission shall timely pay any Other Taxes to t he relevant Governmental Authority in accordance with Applicable Law. (c) Indemnification by the Commission. The Commission shall indemnify the Bank and each Participant, within thirty (30) days after demand therefor, for the full amount of any Indemnified Taxes or Other Taxes (including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under this Section) paid by the Bank or such Participant and any penalties, interest and reasonable expenses arising therefrom or with r espect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate stating the amount of such payment or liability delivered to the Commission by the Bank or any Participant will be conclusive absent manifest error. In addition, the Commission shall indemnify the Bank and each Participant, within thirty (30) days after demand therefor, for any incremental Taxes that may become payable by the Bank or such Pa rticipant as a result of any failure of the Commission to pay any Taxes when due to the appropriate Governmental Authority or to deliver to the Bank or such Participant pursuant to paragraph (d) below, documentation evidencing the payment of Taxes.
(d) Evidence of Payments . As soon as practicable after any payment of Indemnified Taxes or Other Taxes by the Commission to a Governmental Authority, the Commission shall deliver to the Bank or the applicable Participant the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting 4886-4749-3705.4

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such payment or other evidence of such payment reasonably satisfactory to the Bank or such Participant, as applicable.
(e) Treatment of Certain Refunds . If the Bank or any Participant determines, in its sole discretion, that it has received a refund of any Taxes or Other Taxes as to which it has been indemnified pursuant to this Section (including additional amounts paid by the Commission to this Section), it shall pay to the applicable indemnifying party an amount equal to such refund only to the extent of indemnity payments made, or additional amounts paid, under this Section with respect to the Taxes or Other Taxes giving rise to such refund), net of all out-of-pocke t expenses of the Bank or such Participant, and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund); provided that the applicable indemnifying party, upon the request of the Bank or such Participant, as applicable, agrees to repay the amount over pursuant to this Section (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the Bank or such Participant in the event the Bank or such Participant required to repay such refund to such Governmental Authority.

Notwithstanding anything to the contrary in this paragraph (e), in no event will the Bank or any Participant be required to pay any amount to an indemnifying party pursuant to this paragraph (e) the payment of which would place Bank or such Participant in a less favorable net after -Tax position than the Bank or such Participant would have been in if the indemnification payments or additional amounts giving rise to such had never been paid. This paragraph will not be construed to require the Bank or any Participant make available its tax returns (or any other information relating to its taxes which it deems confidential) to the Commission or any other Person. (f) Survival. Without prejudice to the surviv al of any other agreement of the Commission hereunder, the agreements and obligations of the Commission contained in this Section will survive the termination of this Agreement and the Letter of Credit and the payment in full of the Bonds and the obligations of the Commission thereunder and hereunder.

Section 2.14 Increased Costs.
(a) Increased Costs Generally. If any Change in Law:
(i) imposes, modifies or deems applicable any reserve, liquidity ratio, special deposit, insurance premium, fee, financial charge, monetary burden, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or advances, loans or other credit extended or participated in by, the Bank or any Participant, or funding any Drawing under the Letter of Cre dit or maintaining the Letter of Credit, or complying with any term of this Agreement, or against assets held by, or deposits with or for the account of, the Bank or such Participant; (ii) subjects the Bank or any Participant to any Tax of any kind whatsoever w ith respect to this Agreement, the Bank Note, the Fee Agreement or the Letter of Credit or changes the basis of taxation of payments to the Bank or such Participant in respect thereof (except for Indemnified Taxes or Other Taxes covered by Section 2.13 and the imposition of, or any change in the rate of, any Excluded Tax payable by the Bank or any Participant);
4886-4749-3705.4

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(iii) subject credits or commitments to extend credit extended by the Bank or any Participant to any assessment or other cost imposed by the Federal Depos it Insurance Corporation or any successor thereto; or
(iv) imposes on the Bank or any Participant any other condition, cost or expense affecting this Agreement, the Bank Note, the Fee Agreement or the Letter of Credit;
and the result of any of the foregoing is to increase the cost to the Bank or such Participant related funding any Drawing under the Letter of Credit or issuing or maintaining the Letter of Credit or participation therein, as the case may be, or to reduce the amount of any sum received or by the Bank or such Participant hereunder, under the Bank Note or under the Fee Agreement (whether of principal, interest or any other amount), then, upon written request of the Bank or Participant as set forth in paragraph (c) of this Section, the Commission shal l promptly pay to the Bank or such Participant, as the case may be, such additional amount or amounts as will compensate the Bank or such Participant, as the case may be, for such additional costs incurred or reduction suffered. Notwithstanding the foregoing, the amount that any Participant will be entitled to receive under this Section 2.14(a) will in no event exceed the amount that the Bank would have been entitled to receive under this Section 2.14(a) had such Participant’s funding obligation been a direct obligation of the Bank. (b) Capital Requirements. If the Bank or any Participant determines that any Change in Law affecting the Bank or such Participant or the Bank’ s or such Participant ’s holding company, if any, regarding capital or liquidity requirements has or would have the effect of reducing the rate of return on the Bank’ s or such Participant ’s capital or liquidity or on the capital or liquidity of the Bank’s or such Participant’s holding company, if any, as a consequence of this Agreement , the Bank Note, the Fee Agreement or the Letter of Credit, to a level below that which the Bank or such Participant or the Bank’ s or such Participant ’s holding company could have achieved but for such Change in Law (taking into consideration the Bank’ s or such Participant’s policies and the policies of the Bank ’s or such Participant ’s holding company with respect to capital adequacy), then from time to time, upon written request of the Bank or such Participant as set forth in paragraph (c) of this Section, the Commission will pay to the Bank or such Participant such additional amount or amounts as will compensate the Bank or such Participant or the Bank’s or such Participant’s holding company for any such reduction suffered.

Notwithstanding the foregoing, the amount that any Participant will be entitled to receive under this Section 2.14(b) will in no event exceed the amount that the Bank would have been entitled to receive under this Section 2.14(b) had such Participant ’s funding obligation been a direct obligation of the Bank.
(c) Certificates for Reimbursement . A certificate of the Bank or a Participant setting forth the amount or amounts necessary to compensate the Bank or such Participant or the Bank’ s or such Participant ’s parent or holding company, as the case may be, as specified in paragraph (a) or (b) of this Section and delivered to the Commission, will be conclusive absent manifest error. The Commission shall pay the Bank or such Participant, as the case may be, the amount shown as due on any such certificate within thirty (30) days after receipt thereof. 4886-4749-3705.4

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(d) Delay in Requests . Failure or delay on the part of the Bank or any Participant to demand compensation pursuant to this Section will not constitute a waiver of the Bank’ s or such Participant’s right to demand such compensation; provided that the Commission is not required to compensate the Bank or such Participant pursuant to this Section for any increased costs incurred or reductions suffered more than one hundred eighty (180) days prior to the date that the Bank or such Participant, as the case may be, notifies the Commission of the Change in Law giving rise to such increased costs or reductions, and of the Bank’s or such Participant’s intention to claim compensation therefor (except that if the Change of Law giving rise to such increased costs or reductions is retroactive, then the one hundred eighty day period referred to above will be extended to include the period of retroactive effect thereof. (e) Survival. Without prejudice to the survival of any other agreement of the Commission hereunder, the agreements and obligations of the Commission contained in this will survive the termination of this Agreement and the Letter of Credit and the payment in full of Bank Note and the obligations of the Commission thereunder and hereunder.

Section 2.15 Margin Regulations . No portion of the proceeds of any Drawing under the Letter of Credit may be used by the Commission (or the Issuing and Paying Agent or any other Person on behalf of the Commission) for the purpose of “purchasing” or “ carrying” any margin stock or used in any manner which might cause the borrowing or the application of such proceeds to violate Regulation U, Regulation T or Regulation X of the Board of Governors of the Federal Reserve System or any other regulation of said Board of Governors or to violate t he Securities Exchange Act of 1934, as amended, in each case as in effect on the date or dates of such Drawings or such use of proceeds.

Section 2.16 Maximum Rate; Payment of Fee . Anything in Section 2.3, 2.4 or 2.10 hereof to the contrary notwithstanding, the amount of interest payable hereunder for any interest period will not exceed the Maximum Rate. If for any interest period the applicable interest rate would exceed the Maximum Rate, then (i) such interest rate will not exceed but will be capped at such Maximum Rat e and (ii) in any interest period thereafter that the applicable interest rate is less than the Maximum Rate, any Obligation hereunder will bear interest at the Maximum Rate until the earlier of (x) payment to the Bank of an amount equal to the amount which would have accrued but for the limitation set forth in this Section and (y) the Term Loan Maturity Date.

Upon the Term Loan Maturity Date or, if no Term Loan is or could be outstanding on the Termination Date, the Termination Date, in consideration for the limitation of the rate of interest otherwise payable hereunder, to the extent permitted by Applicable Law, the Commission shall pay to the Bank a fee in an amount equal to the amount which would have accrued but for the limitation set forth in this Section that has not previously been paid to the Bank in accordance with the immediately preceding sentence.

Section 2.17 Security of Obligations . Notwithstanding any other provision of this Agreement or any other Basic Document to the contrary, all obligations to the Bank under this Agreement, including, without limitation, the Bank Note, are limited obligations of the Commission payable solely from Revenues, as provided in the Issuing and Paying Agent Agreement, and subject to application as set forth in the Master Trust Indenture. The Obligations and the Bank Note are Subordinate Obligations (as defined in the Master Trust Agreement). 4886-4749-3705.4

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Section 2.18 Commercial Paper Operations.
(a) Issuance Generally. The Commission shall permit Series A -2 Notes to be issued, and authorize the Issuing and Paying Agent to issue Series A -2 Notes, only in accordance with the terms of the Issuing and Paying Agent Agreement and this Agreement. (b) No-Issuance Notices; Final Drawing Notice; Acceleration Notice . Series A -2 Notes may be issued from time to time prior to the Stated Expiration Date in accordance herewith and with the Issuing and Paying Agent Agreement so long as (i) the Issuing and Paying Agent is not in receipt of No -Issuance Notice by the Bank that has not been rescinded; and (ii) the Issuing and Paying Agent not in receipt of the Final Drawing Notice or the Acceleration Notice. The Bank may deliver a No- No-Issuance Notice at any time a Default or an Event of Default has occurred and is continuing. Bank may deliver the Final Drawing Notice at any time when an Event of Default has occurred and continuing. The Bank may deliver the Acceleration Notice at any time an “ event of default ” has occurred and is continuing under the Issuing and Paying Agent Agreement. A No- Issuance Notice, the Final Drawing Notice or the Acceleration Notice (for purposes of this Section 2.18(b)) is effective when received by the Issuing and Paying Agent; provided, however, that a No -Issuance Notice, the Final Drawing Notice or the Acceleration Notice received by the Issuing and Paying Agent after 12:00 Noon on any day on which Series A-2 Notes are being issued will be effective on the next succeeding day. A No - Issuance Notice, the Final Drawing Notice or the Acceleration Notice may be given by facsimile or electronic mail transmission, confirmed in writing within 24 hours, but the failure to so confirm such No-Issuance Notice, the Final Drawing Notice or the Acceleration Notice in writing will not render such No- Issuance Notice, the Final Drawing Notice or the Acceleration Notice ineffective. The Bank shall furnish a copy of any No- Issuance Notice, the Final Drawing Notice and the Acceleration Notice to the Commission and the Dealers promptly fo llowing delivery thereof to the Issuing and Paying Agent, but the failure to furnish any such copy will not render ineffective such No -Issuance Notice, the Final Drawing Notice or the Acceleration Notice.
(c) Reduction in Program Size . In the event the Commission elects not to issue Series A-2 Notes up to the Maximum Rate, or otherwise limits the interest rate on a rollover of Series A-2 Notes to a rate of interest less than the Maximum Rate and, as a result of these actions the Bank is not reimbursed for a Drawing made to pay maturing Series A-2 Notes, then the Bank may deliver written notice to the Commission with a copy to the Issuing and Paying Agent and the Dealer or Dealers for the Series A-2 Notes instructing the Commission to permanently reduce the Program Size by the principal amount of the Drawing made to purchase such maturing Series A-2 Notes (the “Reduction Amount ”). In the event the Bank delivers such a notice, the Commission shall cause the Issuing and Paying Agent to promptly deliver to the Bank a reduction certificate in the form of Annex G to the Letter of Credit requesting that the principal component of the Letter of Credit be reduced by the Reduction Amount and that the interest component of the Letter of Credit be proportionately reduced. Notwithstanding any other provision of this Agreement to the contrary, the Commission shall repay the amount of any Advance resulting from an Unpaid Drawing contemplated by this Section 2.18(c) together with accrued interest thereon no later than the date tha t is thirty (30) days following the date of such Advance.
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Section 2.19 Method of Payment; Etc . All payments to be made by the Commission under this Agreement, the Bank Note or the Fee Agreement must be made to the Payment Account not later than 4:00 p.m. on the date when due and must be made in lawful money of the United States of America in freely transferable and immediately available funds. Any payment received after such time shall be deemed to be received on the next succeeding Business Day for purposes of calculating any interest payable in respect thereof.

ARTICLE 3

CONDITIONS PRECEDENT
Section 3.1 Conditions Precedent to Effectiveness . As conditions precedent to the obligation of the Bank to issue the Letter of Credit, each of the following conditions precedent must have been fulfilled to the satisfaction of the Bank and its counsel:
(a) Opinions. The Bank has received (i) an opinion of the City Attorney of the City the Closing Date and addressed to the Bank (or on which the Bank may rely) to the effect that (A) Commission is duly organized and validly existing as a commission of the City pursuant to the Charter with full legal power and authority to execute this Agreement, the Fee Agreement and the other Basic Documents to which it is a party and to issue the Series A -2 Notes; (B) this Agreement, the Fee Agreement and the other Basic Documents to which it is a party are valid and binding agreements the Commission enforceable against the Commission in accordance with their respective terms, subject to bankruptcy, insolvency, moratorium or other laws affecting creditors’ rights, to general principles of equity and to limitations on remedies against public agencies; (C) no authorization, approval, consent or order of any agency or body having jurisdiction over the Commission is required in connection with the issuance of the Series A -2 Notes which has not been obtained; (D) the issuance of the Series A-2 Notes and the execution, delivery and performance of this Agreement, the Fee Agreement the other Basic Documents to which it is a party do not conflict with any law or material to which the Commission is a party or cause a default under any material documents to which the Commission is a party; and (E) no litigation is pending or, to the best knowledge of the City thre atened against the Commission threatening its existence or power, its ability to issue the Series A -2 Notes to enter into and perform its obligations under this Agreement, the Fee Agreement and the other Basic Documents to which it is a party or in which a final adverse decision could materially affect the business, operations or financial condition of the Commission, such opinion (or, in lieu thereof, a reliance letter) to be addressed to the Bank, dated the Closing Date and in form and substance satisfactory to the Bank; and (ii) an opinion of the Bond Counsel dated the Closing Date and addressed to the Bank (or on which the Bank may rely) to the effect that (1) the Commission is duly organized and validly existing as a commission of the City pursuant to the Charter with full power and authority to execute this Agreement, the Fee Agreement and the other Basic Documents and to issue the Series A -2 Notes ; (2) this Agreement, the Fee Agreement and the other Basic Documents are valid and binding agreements of t he Commission enforceable in accordance with their respective terms, subject to bankruptcy, insolvency, moratorium or other laws affecting creditors’ rights, to general principles of equity and to limitations on remedies against public agencies and (3) the on the Series A -2 Notes is excludable from the gross income of the 4886-4749-3705.4

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recipients thereof for Federal income tax purposes and for State of California income tax purposes.
(b) Documents. The Bank has received executed copies of this Agreement, the Fee Agreement, the Ordinance, each Dealer Agreement that is to be in effect on the Closing Date, the Resolution, the Issuing and Paying Agent Agreement and the Bank Note, including all amendments and supplements, if any, to the foregoing, certified by the Secretary of the Commission, the Clerk of the Board or any Authorized Representative or the Board, as applicable, as being in full force and effect on and as of the Closing Date. (c) Defaults; Representations and Warranties . On and as of the Closing Date, (i) no Default or Ev ent of Default and no default or event of default under any of the other Basic Documents has occurred and is continuing or would occur upon the issuance of the Letter of Credit or the making of any Advance or Term Loan and (ii) the representations of the Commission set forth in Article Four hereof and in each of the other Basic Documents are true and correct in all material respects on and as of the Closing Date with the same force and effect as if made on and as of such date.
(d) No Litigation . No action, suit, investigation or proceeding is pending or, to the knowledge of the Commission, threatened (i) in connection with the Series A -2 Notes or the other Basic Documents or any transactions contemplated thereby or hereby or (ii) against or affecting the Commiss ion, the result of which could have a material adverse effect on the business, operations or condition (financial or otherwise) of the Commission or its ability to perform its obligations hereunder, under the Fee Agreement or under the Series A -2 Notes or the other Basic Documents to which it is a party.
(e) No Material Adverse Change . Since the date of the 2022 Audited Financial Statements, (i) no material adverse change has occurred in the status of the business, operations or condition (financial or otherwise) of the Commission or its ability to perform its obligations hereunder, under the Fee Agreement or under the Series A-2 Notes or the other Basic Documents to which it is a party and (ii) no law, regulation, ruling or other action (or interpretation or administration thereof) of the United States, the State of California or any political subdivision or authority therein or thereof is in effect or has occurred, the effect of which would be to prevent the Bank from fulfilling its obligations hereunder or under the Series A -2 Notes, this Agreement, the Fee Agreement or the other Basic Documents to which it is a party. (f) Certificate. The Bank has received (i) certified copies of all proceedings of the Commission authorizing the execution, delivery and performance of this Agreement, the Fee Agreement, the Bank Note and the other Basic Documents to which it is a party and the transactions contemplated hereby and thereby and (ii) a certificate or certificates of one or more Authorized Representatives dated the Closing Date certifying the accuracy of the statements made in Section 3.1(c), (d) and (e) hereof and further certifying the name, incumbency and signature of each individual authorized to sign this Agreement, the Fee Agreement, the Bank Note, the other Basic Documents to which the Commission is a party and the other documents or certificates to be delivered by th e Commission pursuant hereto or thereto, on which certification the Bank may conclusively rely until a revised certificate is similarly delivered, and that the conditions precedent set forth in this Section 3.1 have been satisfied. 4886-4749-3705.4

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(g) Payment of Fees. The Bank has received all fees and expenses due and payable to the Bank or its legal counsel pursuant to the Fee Agreement or alternative arrangements satisfactory therefor have been made with the Bank.
(h) Financial Statements . The Bank has received the 2022 Audited Financial Statements, internally prepared quarterly budget reports of the Commission for the most recent fiscal quarter end and a copy of the current quarterly budgeting status report, if not previously provided. [TO BE CONFIRMED IF 2022 WILL BE AVAILABLE BY CLOSING] (i) Offering Memorandum . The Bank has received a copy of the Offering Memorandum.
(j) CUSIP and Rating for Bank Note . The Bank has received written confirmation that (a) a CUSIP number has been obtained from Standard and Poor ’s CUSIP Services for the Bank Note and (b) the Bank Note (and its CUSIP number) has been assigned a long term rating of at least investment grade from any Rating Agency.
(k) Series A -2 Notes Rating. The Bank has received written confirmation that the Series A-2 Notes have been rated [“A-1”] by Standard & Poor ’s and that the underlying long- term credit ratings assigned to the Commission ’s unenhanced Bonds are at least “ AA” by Standard & Poor’s and “AA-” by Fitch.
(l) Prior Letter of Credit. Confirmation that arrangements have been made with SMBC to terminate the Prior Letter of Credit as soon as allowable under the Basic Documents. (m) Other Matters. The Bank has received such other statements, certificates, agreements, documents and information with respect to the Commission and matters contemplated by this Agreement as the Bank may have requested.

In addition, (A) the Bank must have made a reasonable determination that, as of the Date, no Law or other action of the United States of America, the State or any other Authority or any political subdivision or authority therein or thereof is in effect or has occurred, effect of which would be to prevent the Commission, the Issuing and Paying Agent, the Dealers the Bank from fulfilling their respective obligations under this Agreement and the other Basic Documents and (B) no material adverse change in the financial condition of the Commission or in the Laws (or their interpretation or administration) currently in effect and applicable to the parties hereto and the transactions contemplated hereby has occurred as reasonably determined by the Bank. The execution and delivery of this Agreement by the Bank signifies its having made such determination.

ARTICLE 4

REPRESENTATIONS AND WARRANTIES
In order to induce the Bank to issue the Letter of Credit, the Commission represents and warrants to the Bank as follows:
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Section 4.1 Organization, Powers, Etc . The Commission (a) is a commission of the City and County of San Francisco organized and existing under the Charter; (b) has the full legal right, power and a uthority to (i) issue and sell the Series A -2 Notes in accordance with the Issuing and Paying Agent Agreement, (ii) own and operate the Power Enterprise and control its properties and to carry on its business as now conducted and as contemplated to be conducted in connection with the issuance of the Series A -2 Notes, and the execution, delivery and performance of its obligations under this Agreement, the Fee Agreement, the Bank Note and the other Basic Documents to which it is a party, (iii) execute, delive r and perform its obligations under the Bank Note, the Fee Agreement, the other Basic Documents to which it is a party and this Agreement and (iv) provide for the security of the Series A -2 Notes and the Bank Note pursuant to the Charter, the Issuing and P aying Agent Agreement and the Master Trust Indenture; and (c) has complied with all Laws in all matters related to such actions of the Commission as are contemplated by this Agreement, the Bank Note, the Fee Agreement and the other Basic Documents to which it is a party.

Section 4.2 Authorization, Absence of Conflicts, Etc . The issuance of the Series A - 2 Notes and the execution, delivery and performance by the Commission of this Agreement, the Bank Note, the Fee Agreement and the other Basic Documents to which it is a party (a) have been duly authorized by all necessary action on the part of the Commission, (b) do not and will not conflict with, or result in a violation of, any Laws, including the Charter, or any order, writ, rule or regulation of any court or governmental agency or instrumentality binding upon or applicable to the Commission which violation would result in a material adverse impact on the Commission and (c) do not and will not conflict with, result in a violation of, or constitute a default under, any resolution, agreement or instrument to which the Commission is a party or by which the Commission or any of its property is bound which, in any case, would result in a material adverse impact on the Commission.

Section 4.3 Binding Obligations; Security for Bank Note . (a) This Agreement, the Fee Agreement, the Bank Note and each of the other Basic Documents to which the Commission is a party, when executed by the parties hereto and thereto, be valid and binding obligations of the Commission (assuming due authorization and execution by the other parties thereto) enforceable against the Commission in accordance with their respective terms, except to the extent, if any, that the enforceability thereof may be limited by (i) any bankruptcy, insolvency, reorgani zation, moratorium or other similar law of the State or Federal government affecting the enforcement of creditors ’ rights generally heretofore or hereafter enacted, (ii) the fact that enforcement may also be subject to the exercise of judicial discretion in appropriate cases and (iii) the limitations on legal remedies against public agencies of the State, if any.
(b) The Note and the Bank Note are secured by the pledge of Available Power Enterprise Revenues and certain other funds and accounts held by the Issuing and Paying Agent as provided in Section 5.1(n) hereof and the Issuing and Paying Agent Agreement. The only debt obligations secured by Revenues on a basis senior to the Series A -2 Notes and Bank Note is the Senior Debt issued in accordance with the Master Trust Indenture. 4886-4749-3705.4

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Section 4.4 Governmental Consent or Approval . No consent, approval, permit, authorization or order of, or registration or filing with, any court or government agency, authority or other instrumentality not already obtained, given or made is required on the part of the Commission for the execution, delivery and performance by the Commission of this Agreement, the Bank Note, the Fee Agreement or any other Basic Document to which it is a party. All consents, approvals, permits, authorizations and orde rs of, and registrations and filings with, any court or governmental or public agency, authority or other instrumentality required for the issuance, sale, execution, delivery and performance of this Agreement, the Fee Agreement, the Bank Note or any other Basic Document to which it is a party, have been or will be obtained prior to the delivery hereof or thereof.

Section 4.5 Absence of Material Litigation . There is no action, suit, proceeding, or investigation, at law or in equity, before or by any court, arbitrator or governmental or other body or official pending or, to the best knowledge of the Commission, threatened against or the Commission questioning the validity of the Charter, the Ordinance or the Resolutions, or any proceeding taken or to be taken by the Commission in connection with the execution, delivery and performance by the Commission of this Agreement, the Bank Note, the Fee Agreement or any Basic Document to which it is a party, or seeking to prohibit, restrain or enjoin the execution, delivery or performance by the Commission of any of the foregoing, or which, if adversely determined, could reasonably be expected to result in any material adverse change in the financial condition, operations or prospects of the Commission, or wherein an unfavorable decision, ruling or finding would in any way materially adversely affect the transactions contemplated by this Agreement or any of the other Basic Documents (any such action or proceeding being herein to as “Material Litigation”).

Section 4.6 Financial Condition. The audited financial statements of the Commission as at and fo r the period ended June 30, 2022 (the “2022 Audited Financial Statements”), and all other financial statements of the Commission furnished to the Bank were prepared in accordance with GAAP applied on a consistent basis throughout the periods involved and are subject to certification by independent certified public accountants of nationally recognized standing or by independent certified public accountants otherwise acceptable to the Bank. The 2022 Audited Financial Statements were prepared by [ KPMG LLP] . The audited financial statements of the Commission for fiscal year [2022] will be prepared by [ KPMG LLP ] or a similar qualified independent auditing firm. The data on which such financial statements and budget reports are based were true and correct. The 2022 Audited Financial Statements and the budget reports present fairly the financial position of the Commission as of the date they purport to represent and the revenues, expenses and changes in fund balances and in financial position for the periods then ended. Since June 30, 2022, no material adverse change has occurred in the business, operations or condition (financial or otherwise) of the Commission . [RECEIPT OF 2022 FINANCIALS TO BE CONFIRMED]
Section 4.7 Incorporation of Representations and Warranties. The representations and warranties of the Commission set forth in the Basic Documents are true and accurate in all material respects on the Closing Date, as fully as though made on the Closing Date. The Commission makes, as of the Closing Date, each of such representations and warranties to, and for the benefit of, the Bank, as if the same were set forth at length in this Section 4.7 together with all applicable definitions thereto. No amendment, modification or termination of any such 4886-4749-3705.4

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representations, warranties or definitions contained in the Basic Documents will be effective to amend, modify or terminate the representations, warranties and definitions incorporated in this Section 4.7 by this reference, without the prior written consent of the Bank.

Section 4.8 Accuracy and Completeness of Information . The Basic Documents and all certificates, financial statements, documents and other written information furnished to the Bank by or on behalf of the Commission on or prior to the Closing Date in connection with the transactions contemplated hereby were, as of their respective dates, complete and correct in all material respects to the extent necessary to give the Bank true and accurate knowledge of the subject matter thereof and did not contain any untrue statement of a material fact. To the best knowledge of the Commission, the Offering Memorandum does not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statement s therein, in the light of the circumstances under which they were made, not misleading; provided, that no representation is made with respect to information included in the Offering Memorandum concerning (i) the Bank, furnished in writing by the Bank expr essly for inclusion therein, or (ii) DTC, furnished in writing by DTC expressly for inclusion therein.

Section 4.9 No Default.
(a) No Default or Event of Default under this Agreement has occurred and is continuing that is or would, with the passage of time or the giving of notice, or both, constitute a default by the Commission in the performance, observance or fulfillment of any of the obligations, covenants or conditions contained in any Basic Document to which it is a party. (b) No “event of default ” has occurred and is con tinuing under any other material mortgage, indenture, contract, agreement or undertaking to which the Commission is a party or which purports to be binding on the Commission or on any of its property.

Section 4.10 No Proposed Legal Changes . There is no amendment or, to the knowledge of the Commission, proposed amendment to the Constitution of the State, any State law or the Charter or any administrative interpretation of the Constitution of the State, any State law, or the Charter, or any judicial decision interpreting any of the foregoing, the effect of which could reasonably be expected to have a material adverse effect on the Commission ’s obligations under this Agreement, the Fee Agreement, the Bank Note or the any of the other Basic Documents to which the Commission is a party or the ability of the Commission to perform its obligations in connection herewith or therewith.

Section 4.11 Compliance with Laws, Etc . The Commission is in compliance with the Investment Policy and all Laws applicable to the Commission, non- compliance with which might have a material adverse effect on the security for the Series A -2 Notes and the obligations under this Agreement, the Fee Agreement and the Bank Note or the validity and enforceability of this Agreement or any other Basic Document to which the Commission is a party. In addition, no benefit plan maintained by the Commission for its employees is subject to the provisions of ERISA, and the Commission is in compliance with all Laws in respect of each such benefit plan. 4886-4749-3705.4

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Section 4.12 Environmental Matters . In the ordinary course of its business, the Commission conducts an ongoing review of Environmental Laws on the business, operations and the condition of its property, in the course of which it identifies and evaluates associated liabilities and costs (including, but not limited to, any capital or operating expenditures required for clean-up or closure of properties currently or previously owned or operated, any capital or operating expenditures required to achieve or maintain compliance with environmental protection standards imposed by law or as a condition of any license, permit or contract, any related constraints on operating activities, including any periodic or permanent shutdown of any facility or reduction in the level of or change in the nature of operati ons conducted thereat and any actual or potential liabilities to third parties, including employees, and any related costs and expenses). On the basis of such review, the Commission does not believe that Environmental Laws are likely to have a material adv erse effect on the ability of the Commission to make any payments in respect of the Series A-2 Notes, the Bank Note or any of its obligations hereunder or under the Fee Agreement.

Section 4.13 Tax Status of Interest on Series A-2 Notes. The Commission represents to the Bank that it has not taken any action, and knows of no action that any other Person has taken, which would cause interest on the Series A -2 Notes to be includable in the gross income of the recipients thereof for Federal income tax purposes or which would cause interest on the Series A -2 Notes to be includable in the gross income of the recipients thereof for State of California income tax purposes.

Section 4.14 Issuing and Paying Agent; Dealers . The Commission represents that U.S. Bank National Association has been duly appointed the Issuing and Paying Agent for the Series A -2 Notes and that RBC Capital Markets, LLC, Goldman, Sachs & Co. and Barclays Capital Inc., collectively, have each been duly appointed to serve as Dealers for the Series A -2 Notes under its Dealer Agreement and the Resolutions.

Section 4.15 Regulation U . The Commission is not engaged in the business of extending credit for the purpose of purchasing or ca rrying margin stock (within the meaning of Regulation U issued by the Board of Governors of the Federal Reserve System); and no proceeds of the Series A-2 Notes, the Advances or the Term Loans will be used to extend credit to others for the purpose of purchasing or carrying any margin stock.

Section 4.16 Liens. The Issuing and Paying Agent Agreement creates a valid Lien on and pledge of the Available Power Enterprise Revenues, subject only to the provisions of the Issuing and Paying Agent Agreement permitting the application thereof for purposes and on the terms and conditions set forth therein, and the moneys and other property described in Article VI thereof to provide security for the payment of the principal of and interest on the Series A -2 Notes and the obligations of the Commission under this Agreement, the Fee Agreement and the Bank Note, and no filings, recordings, registrations or other actions are necessary to create or perfect such Lien.

Section 4.17 Sovereign Immunity . The Commission is not entitled to immunity from legal proceedings to enforce this Agreement, the Fee Agreement, the Bank Note, the Series A -2 Notes or any other Basic Document to which the Commission is a party (including, without limitation, immunity from service of process or immunity from jurisdiction of any court 4886-4749-3705.4

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otherwise having jurisdiction) and is subject to claims and suits for damages in connection with its obligations under this Agreement, the Fee Agreement, the Bank Note, the Series A -2 Notes or any other Basic Document to which the Commission is a party.

Section 4.18 City Business Days . Attached to this Agreement as Exhibit C is a complete and accurate list of the days that are leg al holidays of the City for 2023, as well as any other day the City is authorized by law to be closed for official business during 2023.

Section 4.19 Usury. The terms of this Agreement and the Basic Documents to which the Commission is a party regarding the calculation and payment of interest and fees do not violate any applicable usury laws.

Section 4.20 Insurance. As of the Closing Date, the Commission maintains such insurance, including self-insurance, as is required by Section 5.1(k) hereof.

Section 4.21 ERISA. The Commission does not maintain or contribute to, and has not maintained or contributed to, any Employee Plan that is subject to Title IV of ERISA.

Section 4.22 Sanctions Concerns and Anti-Corruption Laws. (a) Neither the Commission, nor, to the knowledge of the Commission, any director, officer, employee, agent, affiliate or representative thereof, is an individual or entity that is, or is owned or controlled by any individual or entity that is (i) currently the subject or target of any Sanctions, (ii) included on OFAC’s List of Specially Designated Nationals, HMT’s Consolidated List of Financial Sanctions Targets and the Investment Ban List, or any similar list enforced by any other relevant sanctions authority or (iii) located, organized or resident in a Designated Jurisdiction.
(b) The Commission has conducted its business in compliance with the United States Foreign Corrupt Practices Act of 1977 and other sim ilar anti -corruption legislation in other jurisdictions, and have instituted and maintained policies and procedures designed to promote and achieve compliance with such laws.

Section 4.23 Swap Contracts . The Commission has not entered into any Swap Agreement secured by Revenues (a) wherein any termination payment thereunder is senior to or on a parity with the payment of the Series A-2 Notes or the Obligations or (b) which requires the Commission to post cash collateral to secure its obligations thereunder.

ARTICLE 5

COVENANTS
Section 5.1 Affirmative Covenants . So long as the Letter of Credit has not expired or terminated or any Obligations remain outstanding under this Agreement, the Commission shall perform and observe the covenants set forth below, unless the Bank otherwise consents in writing:
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(a) Accounting and Reports . The Commission shall maintain a standard system of accounting in accordance with GAAP consistently applied and furnish to the Bank:
(i) as soon as practicable and, in any event, within two hundred forty (240) days after the end of each Fiscal Year of the Commission, a balance sheet of the Commission as at the end of such Fiscal Year and statements of income, changes in fund balances and cash flows for the Fiscal Year then ended, all in reasonable detail and prepared in accordance with GAAP consistently applied, accompanied by (A) a report and opinion of the Commission’ s independent accountants (which will be of recognized standing or an independent certified public accountant otherwise acceptable to the Bank), which report and opinion will have been prepared in accordance with generally accepted auditing standards and (B) a compliance certificate, substantially in the form of Exhibit B hereto, signed by an Authorized Representative stating that no Event of Default or Default has occurred or if any Event of Default or Default has occurred, specifying the nature of such Event of Default or Default, the period of its existence, the nature and status thereof and any remedial steps taken or proposed to correct such Event of Default or Default;
(ii) as soon as practicable but, in any event, within ten (10) days after the issuance thereof, copies of any prospectus, official statement, offering circular, placement memorandum or similar document, and any supplements thereto and updates and amendments thereof (including any filings made pursuant to Rule 15c2- 12 under the Securities Act of 1933, as amended), that the Commission makes available in connection with the offering for sale of any bonds or notes secured by Revenues of which it is the issuer and copies of any other financial reports or other written information distributed generally to holders of bonds or notes issued by the Commission; (iii) within ten (10) days after the publication thereof, a copy of the Commission’s Annual Budget for the next Fiscal Year and such additional period as may be covered by such Annual Budget, which budget shall include all obligations due hereunder, under the Fee Agreement and under the Bank Note for the next Fiscal Year and such additional period as may be covered by such Annual Budget; (iv) promptly upon learning of any change in the legal holidays of the City or the day or days that the City is authorized by law to be closed for official business, as initially listed on Exhibit C attached hereto, written notice of su ch change(s), in the form of an updated complete list, which will replace Exhibit C attached hereto; and (v) with reasonable promptness, such other data regarding the financial position or business of the Commission or its property as the Bank may reasonably request from time to time.

As and to the extent that any financial statement, audit report or other filing described in this Section 5.1(a) has been filed in accordance with the terms thereof with any nationally recognized municipal securities information repository and with the Municipal Securities Rulemaking Board, or posted to the Commission ’s website, as applicable, and the Commission 4886-4749-3705.4

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has provided written notice thereof to the Bank, the requirements of Section 5.1(a) hereof with respect thereto will be deemed satisfied.
(b) Access to Records. At any reasonable time and from time to time, during normal business hours and, so long as no Event of Default has occurred and is continuing, on at least five (5) Business Days’ notice, the Commission shall permit the B ank or any of its agents or representatives to visit and inspect any of the properties of the Commission and the other assets of the Commission, to examine the books of account of the Commission (and to make copies thereof and extracts therefrom), and to d iscuss the affairs, finances and accounts of the Commission with, and to be advised as to the same by, its officers, all at such reasonable times and intervals as the Bank may reasonably request.
(c) Compliance with Documents and Other Debt Documents; Operation and Maintenance of Power Enterprise.
(i) The Commission shall perform and comply with each covenant set forth in Basic Documents, the Master Trust Indenture and in any other authorizing document that is entered into by the Commission and created subsequent to the Closing Date with respect to any Parity Debt including, without limitation, each line of credit, letter of credit, bond insurance policy, surety bond or other form of credit or liquidity enhancement the Commission may provide in conjunction with the issuance of any Bonds or Parity Debt (the foregoing documents (exclusive of the Basic Documents) being referred to herein as “Other Debt Documents ”). By the terms of this Agreement, the Bank is a third party beneficiary of the covenants set forth in each of the Basic Documents, including each amendment and supplement thereto, and in each Other Debt Document, and each such covenant, together the related definitions of terms contained therein, is incorporated by reference in this 5.1(c) with the same effect a s if it were set forth herein in its entirety. Except as otherwise forth in paragraph (ii) below and in Section 5.2(a) hereof, the Commission shall not amend, supplement or otherwise modify (or permit any of the foregoing), or request or agree to any consent or waiver under, or effect or permit the cancellation, acceleration or termination of, release or permit the release of any collateral held under, any of the Basic Documents or Other Debt Document in any manner without the prior written consent of the Bank, and the Commission shall take, or cause to be taken, all such actions as may be reasonably by the Bank to strictly enforce the obligations of the other parties to any of the Basic Documents and any Other Debt Documents, as well as each of the covenant s set forth . The Commission shall give prior written notice to the Bank of any action referred to in this subparagraph (i).
(ii) The Commission covenants that it will maintain and preserve the Power Enterprise in good repair and working order at all times from the Revenues available for such purposes, in conformity with standards customarily followed for municipal water and power systems of like size and character. The Commission will from time to time make all necessary and proper repairs, renewals, replacements and substitutions to the properties of the Power Enterprise, so that at all times business carried on in connection with the Power Enterprise shall and can be properly and advantageously conducted in an efficient manner and at reasonable cost, and will operate the Power 4886-4749-3705.4

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Enterprise in an efficient and economical manner and shall not commit or allow any waste with respect to the Power Enterprise.
(d) Defaults. The Commission shall notify the Bank of any Default or Event of Default of which the Commission has knowledge, as soon as possible and, in any event, within three (3) Business Days of acquiring knowledge thereof, setting forth the details of such Default or Event of Default and the action which the Commission has taken and proposes to take with respect thereto.
(e) Compliance with Laws . The Commission shall comply in all material respects with all Laws binding upon or applicable to the Commission (including Environmental Laws) and material to this Agreement, the Fee Agreement, the Bank Note or any other Basic Documents.
(f) Use of Proceeds of the Series A -2 Notes. The Commission shall use the proceeds derived from the sale of the Series A -2 Notes only for the purposes set forth in the Basic Documents and for such other purpose or purposes as may be approved by the Bank. In addition, the Commission shall not use, nor permit the use of, the proceeds of the Series A -2 Notes or any Drawing to be applied in violation of Regulation U issued by the Board of Governors of the Federal Reserve System.
(g) Litigation Notice. The Commission shall promptly give notice to the Bank of a ny action, suit or proceeding actually known to it at law or in equity or by or before any court, governmental instrumentality or other agency which, if adversely determined, would materially impair the ability of the Commission to perform its obligations under the Series A -2 Notes, the Bank Note, this Agreement, the Fee Agreement or any other Basic Document. (h) Bank Agreements . In the event that Commission shall enter into or otherwise consent to any amendment, supplement or other modification of any Bank Agr eement after the Closing Date which Bank Agreement contains additional or more restrictive covenants or additional or more restrictive events of default (“ Improved Provisions,” which for the avoidance of doubt does not include pricing, termination fees and provisions related to interest rates), then the Commission shall provide the Bank with a copy of such Bank Agreement and the Improved Provisions shall automatically be deemed incorporated into this Agreement and the Bank shall have the benefit of the Improved Provisions until such time as the Bank Agreement containing such Improved Provisions terminates. The Commission shall promptly cooperate with the Bank to enter into an amendment of this Agreement to include such Improved Provisions. (i) Further Assurances. The Commission shall execute, acknowledge where and deliver, and cause to be executed, acknowledged where appropriate and delivered, from time to time, promptly at the request of the Bank, all such instruments and documents as are usual and customary or advisable to carry out the intent and purpose of this Agreement, the Bank Note and other Basic Documents.
(j) Notices. The Commission shall promptly furnish, or cause to be furnished, to the Bank (i) notice of the occurrence of any “ event of default ” under the Issuing and Paying Agent Agreement, any other Basic Document to which it is a party or any other document pursuant to 4886-4749-3705.4

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which Power Enterprise Debt is issued, incurred, enhanced or purchased, (ii) notice of the failure by any Dealer or the Issuing and the Paying Agent to perform any of their respective obligations under the applicable Dealer Agreement or the Issuing and Paying Agent Agreement, as applicable, (iii) notice of any proposed substitution of this Agreement, (iv) notice of any proposed amendment to the Issuing and Paying Agent Agreement or the Resolutions or any other Basic Document and copies of all such amendments promptly following the execution thereof and (v) notice of the passage of any state or local Law not of general applicability to all Persons of which the Commission has knowledge, which could reasonably be expected to have a material adverse effect on the Commission’s ability to perform its obligations under this Agreement or the other Basic Documents or to result in a material adverse effect on the enforceability or validity of this Agreement or any of the other Basic Documents.
(k) Maintenance of Insurance . The Commission shall maintain, or cause to be maintained, at all times, insurance on and with respect to its properties with responsible and reputable insurance companies; provided, however, that the Commission may maintain self- insurance general liability on its properties not covered by the public entity property insurance program policy, for worker ’s compensation and vehicle liability and, with the consent of the Bank, such other self -insurance as it deems prudent. Such insurance must include casualty, liability and workers ’ compensation and be in amounts and with deductibles and exclusions customary and reasonable for governmental entities of similar size and with similar operations as the Commission. The Commission shall, upon request of the Bank, furnish evidence of such insurance to the Bank. The Commission shall also procure and maintain at all times adequate fidelity insu rance or bonds on all officers and employees handling or responsible for any Revenues or funds of the Power Enterprise, such insurance or bond to be in an aggregate amount at least equal to the maximum amount of such Revenues or funds at any one time in the custody of all such officers and employees or in the amount of one million dollars ($1,000,000), whichever is less. The insurance described above may be provided as part of any comprehensive fidelity and other insurance and not separately for the Power Enterprise. (l) Alternate Facility.
(i) The Commission shall use commercially reasonable efforts to obtain an Alternate Facility to replace the Letter of Credit (or otherwise refinance the Series A-2 Notes) if (A) Bank decides not to extend the Stated Expiration Date pursuant to Section 2.12 hereof, (B) Event of Default has occurred and is continuing, (C) the Commission terminates the Letter Credit pursuant to Section 2.7 hereof or (D) the Bank declares all amounts due hereunder, under the Fee Agreement and under the Bank Note immediately become due and payable.
(ii) The Commission shall not cause an Alternate Facility to become effective with respect to than all the Series A-2 Notes without the prior written consent of the Bank.
(iii) The Commission agrees that any termination of this Agreement as a result of the provision of any Alternate Facility will require, as a condition thereto, that the Commission provide funds on the date of such termination, which funds will be sufficient to pay all amounts due to the Bank hereunder and under the Fee Agreement 4886-4749-3705.4

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including, but not limited to, the amounts due with respect to the Bank Note together, in each case, with accrued but unpaid interest thereon. On the date of such termination, the Commission shall pay to the Bank an amount equal to the outstanding principal amount, together with any accrued by unpaid interest thereon, of any and all other obligations due and owing hereunder and under the Fee Agreement.
(m) Preservation of Security. The Commission shall take any and all actions necessary or reasonably requested by the Bank to maintain the security pledged in favor of this Agreement and the Bank Note as described in Section 5.1(n) hereof. (n) Pledge of Available Power Enterprise Revenues. The Series A -2 Notes and the obligations of the Commission under this Agreement, the Fee Agreement and the Bank Note are revenue obligations, are not secured by the taxing power of the Commission or the City and shall be payable as to both principal and interest from, and shall be secured solely by a pl edge as hereinafter provided of, the Available Power Enterprise Revenues, and, as set forth below, funds and accounts created under the Issuing and Paying Agent Agreement.

The Available Power Enterprise Revenues (on a parity with the pledge securing any Parity Notes and on a parity with and to the extent of the pledge set forth in Section 6.01 of the Issuing and Paying Agent Agreement) and the Construction Fund and the accounts therein (on a parity with and to the extent of the pledge set forth in Section 6.01 of the Issuing and Paying Agent Agreement) are hereby pledged to the payment of the Series A -2 Notes, the Bank Note and all obligations of the Commission relating to the Series A -2 Notes under the Issuing and Paying Agent Agreement and under this Agree ment, on a parity with all obligations of the Commission relating to the Series A-1 Notes, the Series A-1 Bank Note and all obligations of the Commission relating to the Series A-1 Notes under the Issuing and Paying Agent Agreement and under the Series A -1 Reimbursement Agreement without priority or distinction of one over the other, except as expressly provided under the Issuing and Paying Agent Agreement. In addition, the Series A-2 Debt Service Account (on a parity with and to the extent of the pledge s et forth in Section 6.01 of the Issuing and Paying Agent Agreement) is hereby pledged to secure the payment of the interest on and principal of the Series A -2 Notes, and the Series A -2 Bank Payment Account and the Series A -2 Bank Note Debt Service Account are hereby pledged (on a parity with and to the extent of the pledge set forth in Section 6.01 of the Issuing and Paying Agent Agreement) to secure the payment of the interest on and principal of the Bank Note and obligations under this Agreement.

The Available Power Enterprise Revenues and the funds and accounts pledged to the payment of the Series A -2 Notes, the Bank Note and all obligations of the Commission relating to the Series A-2 Notes hereunder and under the Issuing and Paying Agent Agreement const itute a trust fund for the security and payment of the interest on and principal of the Series A -2 Notes, the Bank Note and all obligations of the Commission relating to the Series A -2 Notes under the Issuing and Paying Agent Agreement and under this Agreement, as provided herein and in the Issuing and Paying Agent Agreement, and shall be irrevocable until all of the Series A -2 Notes and the Bank Note have been paid and retired and any related obligations of the Commission under this Agreement have been satisfied.
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The Commission will not issue or incur Debt secured by or payable from the Power Enterprise Revenues on a basis that is senior to the obligations owed to the Bank hereunder, under the Fee Agreement and the Bank Note other than Bonds and Swap Agreem ents (as defined in the Master Trust Indenture) and other than the prior payment of amounts required by Sections 5.5(a)-(e) of the Master Trust Indenture.
(o) Rates. The Commission shall fix, establish, maintain and collect rates and charges for electric power and energy and other services, facilities and commodities sold, furnished or supplied through the facilities of the Power Enterprise, which shall be fair and nondiscriminatory and adequate to provide the Commission with Revenues in each Fiscal Year sufficient:
(i) To pay, to the extent not paid from other available moneys, (A) the Operation and Maintenance Expenses during such Fiscal Year, (B) Annual Debt Service on the Bonds due and payable in such Fiscal Year, (C) the amounts, if any, required to be deposited into the Reserve Fund established pursuant to the Master Trust Indenture during such Fiscal Year and (D) any and all other amounts the Commission is obligated to pay or set aside from the Revenues by law or contract in such Fiscal Year, including, without limitation and without duplication, amounts payable to the Bank under this Agreement, the Fee Agreement and the Bank Note and the principal of any interest on all Series A-2 Notes outstanding and/or expected to be outstanding during such Fiscal Year; (ii) To maintain a Bond Coverage Ratio of at least 1.0 to 1.0; and (iii) Together with Available Funds, to maintain a Bond Coverage Ratio of at least 1.25 to 1.00;
provided, however, the failure of the Commission to maintain the Bond Coverage Ratios in any Fiscal Year shall not constitute a default in the observance of the covenants of this subsection if:
(1) within 60 days after the Commission first determines that a Bond Coverage Ratio was not met or 60 days after the Commission’ s receipt of audited financial statements showing that a Bond Coverage Ratio was not met (whichever is earlier), the Commission engages a Consulting Engineer to deliver a report to the Commission within 60 days after such engagement which includes recommendations as to how the Commission can increase Revenues and/or reduce Operation and Maintenance Expenses so as to satisfy the Bond Coverage Ratios; and (2) (A) within 120 days after receipt of the Consulting Engineer’s report the Commission implements the recommendations set forth in such report; or (B) the report states that the Power Enterprise cannot generate Revenues and/or reduce Operation and Maintenance Expenses sufficient to enable the Commission to maintain the Bond Coverage Ratios while satisfying the other covenants set forth in the Master Trust Indenture, and the Commission increases its Revenues and/or reduces its Operation and Maintenance Expenses to the extent otherwise recommended in such report; or (C) the Commission is prevented from taking any such action by order of any court of competent jurisdiction.
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Notwithstanding the foregoing, failure for two (2) consecutive Fiscal Years to maintain the Bond Coverage Ratios shall in all events constitute an Event of Default. (p) Budget. The Commission shall include in each annual budget of the Commission all amounts reasonably anticipated to be necessary to pay all obligations due to the Bank hereunder, under the Fee Agreement and under the Bank Note. If the amounts so budgeted are not adequate for the payment of the obligations due hereunder, under the Fee Agreement and under the Bank Note, the Commission shall take such action as may be necessary to cause such annual budget to be amended, corrected or augmented so as to include therein the amounts required to be paid to the Bank during the course of the Fiscal Year to which such annual budget applies.
(q) Payment of Taxes, Etc . The Commission shall pay and discharge, or cause to be paid and discharged, all taxes, assessments and other governmental charges which may hereafter be lawfully imposed upon the Commission on account of the Power Enterprise or any portion thereof and which, if unpaid, might impair the security of the Series A -2 Notes, this Agreement, the obligations of the Commission under the Fee Agreement and the Bank Note when the same become due, but nothing herein contained will require the Commission to pay any such tax, assessment or charge so long as it in good faith contests the validity thereof. The Commission shall duly observe and comply with all valid material requirements of any Governmental Authority relative to the Power Enterprise or any part thereof. (r) Notice of Rating Change . The Commission shall use its best efforts to notify the Bank as soon as practicable of any suspension, reduction or withdrawal in the senior long- term rating of any Power Enterprise Debt.
(s) Issuing and Paying Agent and Dealer.
(i) The Commission shall at all times maintain a Dealer with respect to the Commission shall use its best efforts at all times to enforce the Dealer Agreement.

The Commission agrees to cause the Dealer to use its best efforts to sell the Series A -2 Notes up to the maximum rate applicable to the Series A -2 Notes in order to repay maturing Series A-2 Notes. Each Dealer Agreement shall provide that the related Dealer may not resign until the earlier of (i) the appointment of a Dealer which is acceptable to the Bank and such Dealer ’s acceptance of such appointment and (ii) the date which is at least sixty (60) days following the receipt by Commission, the Issuing and Payi ng Agent and the Bank of prior written notice of such resignation. (ii) On and after the Closing Date, the Commission shall at all times maintain an Issuing and Paying Agent pursuant to the terms of the Issuing and Paying Agent. Any successor Issuing and Paying Agent (or any parent or affiliate of such Issuing and Paying Agent) shall have capital of not less than $500,000,000, and underlying ratings from S&P and Fitch of at least “ A3” (or its equivalent), “A-” (or its equivalent) and “A-” (or its equivalent), re spectively (unless, in each instance, the Bank in its discretion provides in writing an exception for a particular Issuing and Paying Agent under specified circumstances).
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(iii) In no event shall the Commission permit any Dealer other than a Qualified Dealer to act as dealer for the Series A -2 Notes. In the event that any material adverse change occurs in the status of the financial condition of any Dealer for the Series A-2 Notes or its ability to perform its obligations under the Dealer Agreement to which it is a party, the Commission shall promptly disqualify and, if it desires, replace such Dealer and appoint another Qualified Dealer with respect to the Series A-2 Notes.

If any Advance or Term Loan remains outstanding for a period of thirty (30) consecutive calendar days or any Dealer fails to perform its duties under the Dealer Agreement to which it is a party, the Commission shall, at the written direction of the Bank, cause the related Dealer (that has been unable to sell rollover Series A -2 Notes or fails to perform its duties) to be replaced with a Qualified Dealer within thirty (30) calendar days after receipt of such written direction. Any successor Dealer (or any parent or affiliate of such Dealer shall have capital of not less than $500,000,000, and underlying ratings from S&P and Fitch of at least “A-” (or its equivalent) and “A-” (or its equivalent), respectively (unless, in each instance, the Bank in its discretion provides in writing an exception for a particular Dealer under specified circumstances).
(t) Maintenance of Ratings on Series A -2 Notes . The Commission shall at all times (i) cause at least one of Fitch and S&P to maintain at least one short- term rating on the Series A-2 Notes, (ii) Fitch and S&P to maintain a long -term, unenhanced debt rating on Senior Debt, and (iii) cause at least one of Fitch and S&P to maintain a long -term rating on the Bank Note.

Section 5.2 Negative Covenants . So long as the Letter of Credit has not expired or terminated or any Obligations remain outstanding under this Agreem ent, the Fee Agreement or the Bank Note the Commission shall not, unless the Bank otherwise consents in writing:
(a) Amendments. Subject to Section 5.1(c) hereof, directly or indirectly amend, supplement or terminate any of the Basic Documents or the Master Tr ust Indenture, except that (i) Commission may amend or modify, or permit to be amended or modified, any of the Basic Documents (as and to the extent the Commission ’s participation is required for such purpose) in a manner (A) not relating to the duties, obligations or rights of the Bank under this Agreement and not having a material adverse effect on (x) the ability of the Commission to pay when due the principal of or interest on the Series A -2 Notes and the obligations of the Commission under this Agreement, Fee Agreement and the Bank Note or (y) the security, rights or remedies of the Bank hereunder, under the Bank Note or under any other Basic Document; and (ii) the Commission may amend the Offering Memorandum to update information relating to any entity described therein other than the Bank. The Commission agrees to deliver to the Bank copies of all such amendments, modification, supplements or other changes at least ten (10) Business Days prior to the effective date of any such amendment, modification, supplement or other change.

The Bank shall, within five (5) Business Days, inform the Commission in writing if, in its reasonable discretion, such amendment, modification, supplement or other change requires the prior written consent of the Bank in accordance with this Section 5.2(a). Notwithstanding the foregoing, the Commission, without the Bank’ s prior written consent, may perform ministerial duties, make such provisions for the purpose of curing any ambiguity, inconsistency or omission, or of curing or correcting any defective provision, as the Commission may deem necessary or desirable, in any case which do not adversely affect the security, rights or remedies of the Bank 4886-4749-3705.4

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hereunder, under the Bank Note, or any other Basic Document and, solely in connect ion with the issuance of additional Debt, issue in strict compliance with the terms of the governing documents related thereto.
(b) Merger, Disposition of Assets. Consolidate or merge with or into any Person or sell, lease or otherwise transfer all or substantially all of its assets to any Person. (c) Preservation of Corporate Existence, Etc. Take any action to terminate its existence as a body politic and corporate and a political subdivision of the State or its rights and privileges as such entity within the State.
(d) Total Outstanding. Permit the aggregate principal amount of all Series A -2 Notes and the Bank Note outstanding at any time to exceed [$136,095,891] (except as provided in Section 5.2(f) hereof); or permit the aggregate principal amount of and interest on all Series A -2 Notes outstanding at any time to exceed the Stated Amount at such time. (e) Exempt Status. Take any action, omit to take any action or cause or permit another Person to take any action or omit to take any action, which, if taken or omi tted, would adversely affect the excludability of interest on the Series A -2 Notes (other than those issued as taxable Series A-2 Notes) from the gross income of the holders thereof for purposes of Federal income taxation.
(f) Issue Power Enterprise Debt.
(1) Issue any Senior Debt or Parity Debt unless:
(i) no “event of default” shall have occurred and be continuing under the agreement or instrument pursuant to which any outstanding Senior Debt or Parity Debt was issued or incurred and no event shall have occurred which, but for the passage of time or the giving of notice, would constitute an “event of default” under any such agreement or instrument;
(ii) such Senior Debt or Parity Debt does not exceed at any time any limitation set forth in the Constitution or other laws of the State, the Charter, the Resolution, the Ordinance, the Master Trust Indenture or any supplement thereto, other resolutions adopted by the Commission, Ordinances adopted by the Board or the Issuing and Paying Agent Agreement;
(iii) in the case of Senior Debt, either:
(A) a Certificate of the Commission stating that, in each of the first three (3) full Fiscal Years after the sale of such Senior Debt, projected Net Revenues (1) plus Available Funds, are at least 1.25 times Annual Debt Service on the outstanding Senior Debt, after giving effect to the issuance of such Senior Debt, and (2) are at least 1.0 times Annual Debt Service on the outstanding Senior Debt, plus required deposits into any Reserve Fund established pursuant to the Master Trust Indenture, after giving effect to the issuance of such Senior Debt; or 4886-4749-3705.4

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(B) a Certificate of the Commission stating that Net Revenues from any twelve consecutive months of the prior 24 months: (1) plus Available Funds, are at least 1.25 times Annual Debt Service on the outstanding Senior Debt, after giving effect to the issuance o f such Senior Debt, and (2) are at least

1.0 times Annual Debt Service on the outstanding Senior Debt, plus required deposits into any Reserve Fund established pursuant to the Master Trust Indenture after giving effect to the issuance of such Senior Debt; provided, however, for purposes of this paragraph (B) the following adjustments may be made to Net Revenues for such period, if so stated in the Certificate of the Commission; (I) an allowance for additional Revenues anticipated from any additions, extensions and improvements to the Power Enterprise to be acquired or constructed from proceeds of such or a prior Senior Debt and for any changes in Operation and Maintenance Expenses resulting therefrom, that are not reflected in Net Revenues for such Fiscal Year, but only if such additional Revenues and changes in Operation and Maintenance Expenses represent a full twelve months’ change in Net Revenues attributable to such additions, extensions and improvements; and (II) An allowance for additional Revenues attributable to any increase in the rates and charges imposed by the Commission that (x) was in effect prior to the issuance of such Senior Debt but which, during all or part of such Fiscal Year, was not in effect, or (y) was adopted by the Commission prior t o the issuance of such Senior Debt and will be in effect within 90 days after such issuance, but in either case only if such additional Revenues represent a full twelve months ’ change in Net Revenues attributable to such increase in rates and charges; (iv) in the case of Parity Debt in addition to the Series A -2 Notes and the Series A-1 Notes, either:
(A) a Certificate of the Commission stating that, in each of the three (3) full Fiscal Years after the sale of such Parity Debt, Revenues will sufficient to pay (I) the Operation and Maintenance Expenses during each such Fiscal Year, (II) Annual Debt Service on the Bonds and all other outstanding Senior Debt due and payable in each such Fiscal Year, (III) the amounts, if any, required to be deposited into the Reserve F und established pursuant to the Master Trust Indenture during each such Fiscal Year, (IV) in the case of the Series A -2 Notes, debt service on the Series A -2 Notes assuming the entire authorized amount of the Series A-2 Notes is issued and outstanding and that such amount will amortize over a thirty year period on a level debt basis using an interest rate equal to the Bond Buyer 25- Bond Revenue Bond Index (or, if such index is no longer published, any other comparable revenue bond on the date of such Certificate and (V) any and all other amounts the Commission is obligated to pay or set aside from Revenues by law or in each such Fiscal Year, including, without limitation and without duplication, amounts payable to the Bank under this Agreement, the Fee Agreement and the Bank Note, as well as the principal of and interest on the Parity Debt to be issued; or
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(B) a Certificate of the Commission stating that Revenues from any twelve consecutive months of the prior 24 months were sufficient to pay (I) the Operation and Maintenance Expenses during such twelve consecutive month period, (II) Annual Debt Service on the Bonds and all other outstanding Senior Debt due and payable in such twelve consecutive month period, (III) the amounts, if any, required to be deposited int o the Reserve Fund established pursuant to the Master Trust Indenture during such twelve consecutive month period, (IV) in the case of the Series A -2 Notes, debt service on the Series A -2 Notes assuming the entire authorized amount of the Series A -2 Notes was issued and outstanding during such twelve consecutive month period and that such amount was amortizing over a thirty year period on a level debt basis using an interest rate equal to the Bo nd Buyer 25- Bond Revenue Bond Index (or, if such index is no longer published, any other comparable revenue bond index) on the date of such Certificate and (V) any and all other amounts the Commission was obligated to pay or set aside from Revenues by law or contract in such twelve consecutive month period, including, without limitation and without duplication, amounts payable to the Bank under this Agreement, the Fee Agreement and the Bank Note during such twelve consecutive month period, as well as the pr incipal of and interest on the Parity Debt to be issued (assuming such Parity Debt had been outstanding during such twelve consecutive month period); (v) the issuance of Parity Debt will not result in the creation of a Lien on the Available Power Enterprise Revenues that is senior to the Lien securing the Series A-2 Notes or the obligations under the Agreement, the Fee Letter and the Bank Note; and
(vi) any such Parity Debt is issued in compliance with Section 5.07 of the Issuing and Paying Agent Agreement;
(vii) in connection with the issuance of any additional Senior Debt, the Commission provides certificates demonstrating compliance with the requirements set forth in Section 3.4 or Section 3.5, as the case may be, of the Master Trust Indenture;
(viii) in connection with the issuance of any additional Parity Debt, the Commission provides a certificate demonstrating compliance with the requirements set forth in Section 5.07 of the Issuing and Paying Agent Agreement; and
(ix) no Default or Event of Default has occurred and is continuing hereunder as a result thereof.
(2) The Commission will not issue Debt secured by or payable from the Revenues on a basis that is senior to the obligations owed to the Bank hereunder, under the Fee Agreement and the Bank Note other than the Bonds other than in accordance with this Section 5.2(f), the Master Trust Indenture and the Issuing and Paying Agent Agreement.
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(g) Use of Bank’s Name. Permit the use of the Bank’ s name in any official statement or other offering document unless the Bank has approved in writing the description of the Bank contained in such document.
(h) Arbitrage Bonds; Tax -Exempt Status of Series A -2 Notes. Invest the proceeds of the Series A-2 Notes in any way that would violate the Code or cause the Series A -2 Notes to be deemed “arbitrage bonds” or take any action or omit to take any action if such action or omission would adversely affect the exclusion of interest on the Series A -2 Notes from gross income of the holders thereof for Federal income tax purposes.
(i) Swap Agreements. Without the prior written consent of the Bank, enter into any Swap Agreement secured by Revenues (a) wherein any termination payments thereunder are senior to or on parity with the payment of the Series A -2 Notes or the Obligations or (b) which requires the Commission to post cash collateral to secure its obligations thereunder. (j) Liens. Create or suffer to exist or permit any Lien on the Revenues other than the Liens created or permitted by the Master Trust Indenture, the Issuing and Paying Agent Agreement (including Parity Debt), this Agreement, the Series A -2 Reimbursement Agreement and Liens that are junior and subordinate to the Lien created by the Issuing and Paying Agent Agreement and this Agreement under terms and conditions satisfactory to the Bank. (k) Sovereign Immunity. Assert the defense of any future right of sovereign immunity in a legal proceeding to enforce or collect upon the obligations of the Commission under this Agreement, the Fee Agreement or the Bank Note or the transactions contemplated hereby and thereby.
(l) Power Enterprise. Construct, operate or maintain, and shall not within the scope of its powers permit any other public or private corporation, political subdivision, district or agency or any Person whatsoever to construct, operate or maintain, within the City or any part thereof, any system or utility competitive with the Power Enterprise. The Commission shall have in effect, or cause to have in effect, at all times an ordinance or resolution requiring all customers of the Power Enterprise to pay the fees, rates and charges applicable to the services and facilities furnished by the Power Enterprise. The Commission shall not provide any service of the Power Enterprise free of charge to any Person, except (i) for free use by the City and its agencies, (ii) to the extent that any such free use is required by the terms of any existing contract or agreement and (iii) for incidental insignificant free use so long as such free use does not prevent the Commission from satisfying the other covenants of this Agreement, including, without limitation, Section 5.1(o) hereof.
(m) Preservation of Existence, Etc. Take any action pursuant to the Charter to accomplish a merger of the Power Enterprise with any other entity or enterprise, unless and until the Commission has provided a method for segregating the Revenues from the revenues of said other entity or enterprise in a manner that will, or shall otherwise, preserve the Lien on the Available Power Enterprise Revenues for the payment of the Series A -2 Notes and the Obligations provided in Section 4.3 hereof and has obtained an opinion of counsel from a firm nationally recognized in the practice of tax-exempt financing that such merger will not, in and of itself, (i) affect the exclusion from gross income of the interest on the Series A-2 Notes or (ii) 4886-4749-3705.4

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cause the Lien created by this Agreement to be no longer valid as required by Section 5.1(n) hereof. If the Commission does effect such a merger, the Commission shall provide written notice thereof to the Bank and shall deliver a copy of the aforementioned opinion to the Bank. (n) Use of Proceeds. Use the proceeds of any credit extension, whether directly or indirectly, and whether immedia tely, incidentally or ultimately, to purchase or carry margin stock (within the meaning of Regulation U of the Board of Governors of the Federal Reserve System) or to extend credit to others for the purpose of purchasing or carrying margin stock or to refund indebtedness originally incurred for such purpose, in each case in violation of, or for a purpose which violates, or would be inconsistent with, Regulation T, U or X of the Board of Governors of the Federal Reserve System. The Commission shall not use t he proceeds of the Series A-2 Notes or the Bank Note for any purpose other than as provided for in the Resolutions and not in contravention of applicable Law.
(o) Series A-2 Notes. Permit any Series A -2 Note issued pursuant to the Resolutions or the Issuing and Paying Agent Agreement to mature more than two hundred seventy (270) days after the date of issuance or after the Stated Expiration Date.

ARTICLE 6

DEFAULTS
Section 6.1 Events of Default and Remedies . If any of the following events occurs, each such event will be an “Event of Default”:
(a) the Commission fails to pay, or cause to be paid, as and when due, (i) any Reimbursement Obligation or (ii) any Obligation (other than a Reimbursement Obligation) hereunder or under the Fee Agreement and, in such case, such failure continues for five (5) Business Days;
(b) any representation or warranty made by or on behalf of the Commission in this Agreement or in any other Basic Document or in any certificate or statement delivered hereunder or thereunder is incorrect or untrue in any material respect when made or deemed to have been made or delivered;
(c) the Commission defaults in the due performance or observance of any of the covenants set forth in Section 2.15, 5.1(c), 5.1(d), 5.1(g), 5.1(m)(ii), 5.1(n), 5.1(s)(ii),5.1(s)(iii) or 5.2 hereof;
(d) the Commission defaults in the due performance or observance of any other term, covenant or agreement contained in this Agreement or any other Basic Document and such default remains unremedied for a period of thirty (30) days after the occurrence thereof; (e) the Commission or the City and County of San Francisco, directly or indirectly, (i) has entered involuntarily against it an order for relief under the United States Bankruptcy Code, as amended, (ii) becomes insolvent or does not pay, or is unable to pay, or admits in writing its inability to pay, its debts generally as they become due, (iii) makes an assignment for 4886-4749-3705.4

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the benefit of creditors, (iv) applies for, seeks, consents to, or acquiesces in, the appointment of a receiver, custodian, trustee, examiner, liquidator or similar official for it or any substantial part of its Property, (v) institutes any proceeding seeking to have entered against it an order for relief under the United States Bankruptcy Code, as amended, to adjudicate it insolvent or seeking dissolution, winding up, liquidation, reorganization, arrangement, marshalling of assets, adjustment or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors or fails to file an answer or other pleading denying the material allegations of any such proceeding filed against it, (vi) takes any corporate action in furtherance of any matter described in clauses (i) through (v) above or (vii) fails to contest in good faith any appointment or proceeding described in Section 6.1(f) of this Agreement; (f) a custodian, receiver, trustee, examiner, liquidator or similar official is appointed for the Commission or the City and County of San Francisco or any substantial part of its Property, or a proceeding described in Section 6.1(e)(v) is instituted against the Commission or the City and County of San Francisco and such proceeding continues undischarged, undismissed and unstayed for a period of thirty (30) days;
(g) a debt moratorium, debt restructuring, debt adjustment or comparable restriction is imposed on the repayment when due and payable of the principal of or interest on any Debt of the Commission by the Commission or any Governmental Authority with appropriate jurisdiction;
(h) any material provision of this Agreement, the Charter or any other Basic Document at any time for any reason ceases to be valid and binding on the Commission as a result of any legislative or administrative action by a Governmental Authority with competent jurisdiction or is declared in a final non- appealable judgment by any court with competent jurisdiction to be null and void, invalid or unenforceable, or the validity or enforceability thereof is publicly contested by the Commission, or the Commission publicly contests the validity or enforceability of any obligation to pay Power Enterprise Debt, including, without limitation, the Master Trust Indenture, or any Authorized Representative publicly repudiates or otherwise denies in writing that it has any further liability or o bligation under or with respect to any provision of this Agreement, the Charter, any other Basic Document or any operative document related to Power Enterprise Debt, including, without limitation, the Master Trust Indenture; (i) dissolution or termination of the existence of the Commission; (j) the Commission (i) defaults on the payment of the principal of or interest on any Power Enterprise Debt beyond the period of grace, if any, provided in the instrument or agreement under which such Power Enterprise Debt was created or incurred or (ii) defaults the observance or performance of any agreement or condition relating to any Power Enterprise Debt, including, without limitation, any Bank Agreement, or contained in any instrument or agreement evidencing, securing or relating thereto, or any other default, event of default or similar event occurs or condition exists, the effect of which default, event of default or similar event or condition is to permit (determined without regard to whether any notice is required) any such Power Enterprise Debt to become immediately due and payable in full as the result of the acceleration, mandatory redemption or mandatory tender of such Power Enterprise Debt; 4886-4749-3705.4

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(k) the Commission (i) defaults on the payment of the principal of or intere st on any Debt (other than Power Enterprise Debt) aggregating in excess of $10,000,000 beyond the period of grace, if any, provided in the instrument or agreement under which such Debt (other than Power Enterprise Debt) was created or incurred or (ii) defa ults in the observance or performance of any agreement or condition relating to any Debt (other than Power Enterprise Debt) aggregating in excess of $10,000,000, or contained in any instrument or agreement evidencing, securing or relating thereto, or any other default, event of default or similar event occurs or condition exists, the effect of which default, event of default or similar event or condition is to permit (determined without regard to whether any notice is required) any such Debt to become immediately due and payable in full as the result of the acceleration, mandatory redemption or mandatory tender of such Debt (other than Power Enterprise Debt); (l) any final, nonappealable judgment or judgments, writ or writs or warrant or warrants of attachment, or any similar process or processes, in an aggregate amount not less than $10,000,000 are entered or filed against the Commission or against any of its Property and remain unpaid, unvacated, unbonded and unstayed for a period of sixty (60) days; (m) (i) the Co mmission shall default in the due performance or observance of any material term, covenant or agreement contained in any other Basic Document and the same shall not have been cured within any applicable cure period or (ii) any “ event of default ” under any other Basic Document (as defined respectively therein) has occurred; (n) a ruling, assessment, notice of deficiency or technical advice by the Internal Revenue Service is rendered to the effect that interest on the Series A -2 Notes is includable in the gross income of the holder(s) or owner(s) of such Series A -2 Notes and either (i) the Commission, after it has been notified by the Internal Revenue Service, does not challenge such ruling, assessment, notice or advice in a court of law during the period within which such challenge is permitted or (ii) the Commission challenges such ruling, assessment, notice or advice and a court of law makes a determination, not subject to appeal or review by another court of law, that such ruling, assessment, notice or advice is correctly rendered; (o) any of Fitch or S&P (i) downgrades its long -term rating of any Senior Debt of the Commission to below “BBB+” (or its equivalent), or “BBB+” (or its equivalent), respectively, or (ii) suspends or withdraws its rating of the same; or
(p) the passage of any Law has occurred which could reasonably be expected to have a material adverse effect on the Commission ’s ability to perform its obligations under this Agreement or the other Basic Documents or to result in a material adverse effect on th e enforceability or validity of this Agreement or any of the other Basic Documents.

Section 6.2 Remedies. Upon the occurrence of any Event of Default the Bank may exercise any one or more of the following rights and remedies in addition to any other remedies herein or by law provided:
(a) declare all Obligations to be immediately due and payable, whereupon the same are immediately due and payable without any further notice of any kind, which notice is waived by the Commission; provided, however, that in the case of an Even t of Default described in 4886-4749-3705.4

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Section 6.1(e), (f) or (g) hereof, such acceleration will automatically occur (unless such automatic acceleration is waived by the Bank in writing); or (b) issue a No -Issuance Notice (the effect of which will be as provided in Section 2.18 of this Agreement), reduce the Stated Amount of the Letter of Credit to the amount of the then outstanding Series A-2 Notes supported by the Letter of Credit plus a corresponding amount of interest coverage and/or terminate the Stated Amount as the then outstanding Series A-2 Notes are paid; or
(c) issue the Final Drawing Notice (the effect of which will be to cause the Termination Date of the Letter of Credit to occur on the fifteenth (15) calendar day after the date of receipt thereof by the Issuing and Paying Agent); or (d) pursue any rights and remedies it may have under the Basic Documents; or (e) pursue any other action available at law or in equity.

Upon the occurrence of an “ event of default ” under the Issuing and Paying Agent Agreement, the Bank may, pursuant to Section 8.01 of the Issuing and Paying Agent Agreement, by notice to the Commission and the Issuing and Paying Agent (suc h notice, the “Acceleration Notice” ), (i) declare the principal of all outstanding Series A -2 Notes, and the interest accrued thereon, to be due and payable immediately, whereupon the same shall become and shall be immediately due and payable and (ii) instruct the Issuing and Paying Agent to submit a Drawing under the Letter to pay such immediately due and payable amount.

ARTICLE 7

MISCELLANEOUS
Section 7.1 Amendments, Waivers, Etc. No amendment or waiver of any provision of this Agreement, or consent to any departure by the Commission therefrom, will in any event be effective unless the same is in writing and signed by the Bank and an Authorized Representative of the Commission, and then such waiver or consent is effective only in the specific instance and for the specific purpose for which given.

Section 7.2 Notices. All notices and other communications provided for hereunder must be in writing (including required copies) and sent by receipted hand delivery (including Federal Express or other receipted courier service), facsimile tra nsmission or regular mail, as follows:
(a) if to the Commission: City and County of San Francisco Public Utilities Commission
525 Golden Gate Avenue, 4th Floor
San Francisco, California 94102
Attention: Capital Finance Director
Telephone: (415) 551-2973
[Facsimile: (415) 554-3161]
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(b) if to the Bank: Bank of America, N.A.
333 S. Hope Street, 38th Floor
Los Angeles, California 90071
Attention: Jyoti Rathore
Telephone: (213) 621-4971
Email: [email protected]
In the case of communications to the Bank with
respect to drawings under the Letter of Credit:

Bank of America, N.A.
1 Fleet Way, PA6-580-02-30
Scranton, Pennsylvania 18507
Attention: Standby Letter of Credit Department
Telephone: (800) 370-7519 OPT 1
Facsimile: (800) 755-8743
In the case of payments to the Bank:

Bank of America, N.A.
[ABA: 026009593
A/C: 04535-88398]
Reference: Letter of Credit # ________
or such other account as the Bank may from time to time designate in writing to the Commission.
(c) if to Issuing and U.S. Bank Trust Company National Association Paying Agent: 100 Wall Street, 6th Floor
New York, New York 10005
Attention: Maria Cepeda-Holly
Telephone: (779) 225-8163
(d) if to the Dealers: At the address, telephone number and telecopy number set forth in each Dealer Agreement
or, as to each Person named above, at such other address or telephone or telecopy number as is designated by such Person in a written notice to the parties hereto. All such notices and other communications will, when delivered, sent by facsimile transmission or mailed, be effective when deposited with the courier, sent by facsimile transmission or mailed, respectively, addressed as aforesaid, except that requests for Drawings submitted to the Bank will not be effective until received by the Bank.

Section 7.3 Survival of Covenants; Successors and Assigns . (a) All covenants, agreements, representations and warranties made herein and in the certificates delivered pursuant hereto will survive the making of any Drawing or Advance hereunder and will continue in full force and effect until all of the Obligations hereunder are paid in full. Whenever in this Agreement any of the parties hereto is referred to, such reference will, subject to the last sentence 4886-4749-3705.4

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of this Section, be deemed to include the successors and assigns of such party, and all covenants, promises and agreements by or on behalf of the Commission which are contained in this Agreement will inure to the benefit of the successors and assigns of the Bank. The Commission may not transfer its rights or obligations under this Agreement without the prior written consent of the Bank. The Bank may transfer or assign some or all of its rights and obligations unde r this Agreement, the Fee Letter, the Bank Note and the Letter of Credit with the prior written consent of the Commission (which consent may not be withheld unreasonably), provided that (i) with respect to the Letter of Credit only, the Commission has received written notice from each rating agency then rating the Series A -2 Notes that the transfer will not cause the lowering, withdrawal or suspension of such rating agency’ s rating on the Series A -2 Notes, and (ii) the Bank shall be responsible for all costs solely relating to such transfer or assignment. This Agreement is made solely for the benefit of the Commission and the Bank, and no other Person (including, without limitation, the Issuing and Paying Agent, any Dealer or any holder of Series A -2 Notes ) will have any right, benefit or interest under or because of the existence of this Agreement; provided, further, that the Commission ’s liability to any Participant will not in any event exceed that liability which the Commission would owe to the Bank but for such participation. (b) Notwithstanding the foregoing, the Bank will be permitted to grant to one or more financial institutions (each a “Participant” ) a participation or participations in all or any part of the Bank’s rights and benefits and obligations under this Agreement, the Bank Note, the Fee and the Letter of Credit on a participating basis but not as a party to this Agreement (a “Participation”) without the consent of the Commission. In the event of any such grant by the of a Participation to a Participant, the Bank shall remain responsible for the performance of its obligations hereunder and under the Letter of Credit, and the Commission may continue to deal solely and directly with the Bank in connection with the Bank’ s rights and obligations under this Agreement and under the Letter of Credit. The Commission agrees that each Participant will, to the extent of its Participation, be entitled to the benefits of this Agreement as if such Participant were Bank, provided that no Participant will have the right to declare, or to take actions in response to, Event of Default under Section 6.1 hereof.

Section 7.4 Unconditional Obligations . The obligations of the Commission under this Agreement and under the Fee Agreement are absolute, unconditional, irrevocable and payable strictly in accordance with the terms of the Issuing and Paying Agent Agreement, this Agreement and the other Basic Documents to which the Commission is a party, under all circumstances whatsoever, including, without limitation, the following:
(a) any lack of validity or enforceability of this Agreement, the Letter of Credit, the Fee Agreement or the Series A-2 Notes or any other Basic Document; (b) any amendment or waiver of or any consent to departure from the terms of the Issuing and Paying Agent Agreement or all or any of the other Basic Documents to which the Bank has not consented in writing (unless pursuant to Section 5.2(a) hereof such consent is not required);
4886-4749-3705.4

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(c) the existence of any claim, counter claim, set -off, recoupment, defense or other right which any Person may have at any time against the Bank, the Commission, the Issuing and Paying Agent, any Dealer or any other Person, whether in connection with this Agreement, the other Basic Documents or any transaction related thereto; (d) any statement or any other document presented under the Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect;
(e) payment by the Bank under the Letter of Credit against presentation of a draft or certificate which does not comply with the terms of the Letter of Credit; and (f) any other circumstances or happening whatsoever, whether or not similar to any of the foregoing.

Section 7.5 Liability of Bank; Indemnification .
(a) To the extent permitted by the law of the State, the Commission assumes all risks the acts or omissions of the Issuing and Paying Agent with respect to the use of the Letter of Credit the use of proceeds thereunder; provided that this provision with respect to the Bank is not intended to and will not preclude the Commission from pursuing such rights and remedies as it may have against the Issuing and Paying Agent under any other agreements. Neither the Bank nor any of it s respective officers or directors will be liable or responsible for (i) the use of the Letter of Credit, the Drawings or the Advances, the proceeds of the Series A -2 Notes or the transactions contemplated hereby and the other Basic Documents or for any acts or omissions of the Issuing and Paying Agent or any Dealer, (ii) the validity, sufficiency or genuineness of any documents determined in good faith by Bank to be valid, sufficient or genuine, even if such documents, in fact, prove to be in any or all respects invalid, fraudulent, forged or insufficient, (iii) payments by the Bank against presentation requests for Drawings or requests which the Bank in good faith has determined to be valid, or genuine and which subsequently are found not to comply with the terms of this Agreement or any other circumstances whatsoever in making or failing to make payment hereunder; provided that the Commission is not required to indemnify the Bank for any claims, losses, liabilities, costs or expenses to the extent, but only to the extent, caused by the gross negligence or willful misconduct the Bank. (b) To the extent permitted by the law of the State, the Commission indemnifies and holds harmless the Bank from and against any and all direct, as opposed to consequential, claims, damages, losses, liabilities, costs and expenses (including specifically reasonable attorneys’ fees) which the Bank may incur (or which may be claimed against the Bank by any Person whatsoever) by reason of or in connection with (i) the execution and del ivery of this Agreement, the Fee Agreement, the Letter of Credit and the transactions contemplated hereby or thereby and (ii) any untrue statement or alleged untrue statement of any material fact contained in the Offering Memorandum prepared and distribute d in connection with the Series A -2 Notes or the omission or alleged omission to state therein a material fact necessary to make such statements, in the light of the circumstances under which they are or were made, not misleading; provided that the Commission is not required to indemnify the Bank to the extent, but only to the extent, any such claim, damage, loss, liability, cost or expense is caused by the Bank’ s willful 4886-4749-3705.4

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misconduct or gross negligence. The Bank is expressly authorized and directed to honor any demand for payment which is made under the Letter of Credit without regard to, and without any duty on its part to inquire into the existence of, any disputes or controversies between the Commission, any Dealer, the Issuing and Paying Agent or any other Person or the respective rights, duties or liabilities of any of them or whether any facts or occurrences represented in any of the documents presented under the Letter of Credit are true and correct. (c) To the fullest extent permitted by applicable law, the Commission shall not assert, and waives, any claim against the Bank, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, thi s Agreement, the Letter of Credit, any other Basic Document or any agreement or instrument contemplated hereby or thereby, the transactions contemplated hereby or thereby or the use of the proceeds thereof. (d) The obligations of the Commission under this Section 7.5 will survive the termination of this Agreement.

Section 7.6 Expenses. Upon receipt of a written invoice, the Commission shall promptly pay (i) the reasonable fees and expenses of counsel to the Bank incurred in connection with the preparation, execution and de livery and administration of this Agreement, the Letter of Credit, the Fee Agreement and the other Basic Documents as set forth in the Fee Agreement, (ii) the out -of-pocket expenses of the Bank incurred in connection with the preparation, execution and delivery and administration of this Agreement, the Letter of Credit, the Fee Agreement and the Basic Documents (provided that such expenses to be paid in connection with the preparation and execution and delivery will not exceed the amount specified in the Fee Agreement), (iii) the fees disbursements of counsel to the Bank with respect to advising the Bank as to its rights and responsibilities under this Agreement after the occurrence of an Event of Default and (iv) all costs and expenses, if any, in connection with the administration and enforcement of this Agreement and any other documents which may be delivered in connection herewith, including in each case the and disbursements of counsel to the Bank. In addition, and notwithstanding the foregoing, the Commission agrees to pay, after the occurrence of an Event of Default, all costs and expenses (including attorneys’ fees and costs of settlement) incurred by the Bank in enforcing any or in collecting any payments due from the Commission hereunder by reason of such Event of Default or in connection with any refinancing or restructuring of the credit arrangements provided under this Agreement in the nature of a “workout” or of any insolvency or bankruptcy proceedings. The obligations of the Commission under this Section 7.6 will survive the termination of this Agreement.

Section 7.7 No Waiver; Conflict . Neither any failure nor any delay on the part of the Bank in exercising any right, power or privilege hereunder, nor any course of dealing with respect to an y of the same, will operate as a waiver thereof or preclude any other or further exercise thereof, nor will a single or partial exercise thereof, preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rem edies herein provided are cumulative and not exclusive of any remedies provided by law. To the extent of any conflict between this Agreement, the Letter of Credit and any other Basic Documents, this Agreement will control solely as between the Commission and the Bank. 4886-4749-3705.4

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Section 7.8 Modification, Amendment, Waiver, Etc . No modification, amendment or waiver of any provision of this Agreement will be effective unless the same is in writing and signed in accordance with Section 7.1 hereof.

Section 7.9 Dealing with the Commission, the Is suing and Paying Agent and/or the Dealer. The Bank and its affiliates may accept deposits from, extend credit to and generally engage in any kind of banking, trust or other business with the Commission, the Issuing and Paying Agent and/or any Dealer regardless of the capacity of the Bank hereunder.

Section 7.10 Severability. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction will, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof or affecting the validity or enforceability of such provision in any other jurisdiction, and all other remaining provisions hereof will be construed to render them enforceable to the fullest extent permitted by law. The parties shall endeavor in good faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic or legal effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.

Section 7.11 Counterparts. This Agreement may be executed in two or more counterparts, each of which constitutes an original, but when taken together constitute but one agreement, and any of the parties hereto may execute this Agreement by signing any such counterpart. This Agreement may be delivered by the exchange of signed signature pages by facsimile transmission or by e -mail with a pdf copy or other replicating image attached, and any printed or copied version of any signature page so delivered will have the same force and effect as an originally signed version of such signature page.

Section 7.12 Table of Contents; Headings . The table of contents and the section and subsection headings used herein have been inserted for convenience of reference only and do not constitute matters to be considered in interpreting this Agreement.

Section 7.13 Entire Agreement . This Agreement represents the final agreement between the parties hereto with respect to the subject matter hereof and may not be contradicted by evidence of prior, contemporane ous or subsequent oral agreements of the parties hereto as to such subject matter.

Section 7.14 Governing Law Waiver of Jury Trial .
(a) THIS AGREEMENT SHALL BE DEEMED TO BE A CONTRACT UNDER,

AND FOR ALL PURPOSES SHALL BE GOVERNED BY, AND CONSTRUED AND

INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK

WITHOUT GIVING EFFECT TO CONFLICTS OF LAWS PROVISIONS (OTHER THAN NEW YORK GENERAL OBLIGATIONS LAWS 5 -1401 AND 5-1402); PROVIDED, THAT

THE OBLIGATIONS OF THE COMMISSION HEREUNDER SHALL BE GOVERNED BY

THE LAWS OF THE STATE OF CALIFORNIA WITHOUT REGARD TO CHOICE OF LAW RULES.
4886-4749-3705.4

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(b) TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OF THE

PARTIES HERETO WAIVES ITS RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE

OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, THE BASIC

DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY OR

THEREBY, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS. IF AND TO

THE EXTENT THAT THE FOREGOING WAIVER OF THE RIGHT TO A JURY TRIAL IS

UNENFORCEABLE FOR ANY REASON IN SUCH FORUM, EACH OF THE PARTIES

HERETO CONSENTS TO THE ADJUDICATION OF ALL CLAIMS PURSUANT TO

JUDICIAL REFERENCE AS PROVIDED IN CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 638, AND THE JUDICIAL REFEREE IS EMPOWERED TO HEAR AND DETERMINE ALL ISSUES IN SUCH REFERENCE, WHETHER FACT OR LAW. EACH OF

THE PARTIES HERETO REPRESENTS THAT IT HAS REVIEWED THIS WAIVER AND

CONSENT AND, FOLLOWING CONSULTATION WITH LEGAL COUNSEL ON SUCH

MATTERS, KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS AND CONSENTS TO JUDICIAL REFERENCE. IN THE EVENT OF LITIGATION, A COPY

OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY

THE COURT OR TO JUDICIAL REFERENCE UNDER CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 638 AS PROVIDED HEREIN.
(c) The covenants and waivers made pursuant to this Section 7.14 are irrevocable and unmodifiable, whether in writing or orally, and are applicable to any subsequent amendments, renewals, supplements or modifications of this Agreement. In the event of litigation, this Agreement may be filed as a written consent to a trial by the court.

Section 7.15 Governmental Regulations . The Commission shall (a) ensure that no who owns a controlling interest in or otherwise controls the Commission is or will be listed on the Specially Designated Nationals and Blocked Person List or other similar lists maintained by the Office of Foreign Assets Control (“ OFAC”), the Department of the Treasury or included in any Executive Order that prohibits or limits the Bank from making any a dvance or extension of credit the Commission or from otherwise conducting business with the Commission and (b) ensure that proceeds of the Series A -2 Notes are not used to violate any of the foreign asset control regulations of OFAC any enabling statute or Executive Order relating thereto. Further, the Commission shall comply, cause any of its subsidiaries to comply, with all applicable Bank Secrecy Act laws and regulations, amended.

Section 7.16 USA PATRIOT Act . The Bank notifies the Commission that, pursuant to the re quirements of the USA Patriot Act (Title III of Pub. L. 107 -56 (signed into law October 26, 2001)) (the “ Act”), it is required to obtain, verify and record information that identifies the Commission, which information includes the name and address of the C ommission and other information that will allow the Bank to identify the Commission in accordance with the Act. The Commission agrees to provide such documentary and other evidence of the Commission’s identity as may be requested by the Bank at any time to enable the Bank to verify the Commission’s identity or to comply with any applicable law or regulation, including, without limitation, the Act.
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Section 7.17 Electronic Transmissions. The Bank is authorized to accept and process any amendments, transfers, assignments o f proceeds, Drawings, consents, waivers and all documents relating to the Letter of Credit which are sent to Bank by electronic transmission, including SWIFT, electronic mail, telex, telecopy, courier, mail or other computer generated telecommunications and such electronic communication will have the same legal effect as if written and will be binding upon and enforceable against the Commission. The Bank may, but shall not be obligated to, require authentication of such electronic transmission or that the B ank receives original documents prior to acting on such electronic transmission.

Section 7.18 Assignment to Federal Reserve Bank . The Bank may assign and pledge all or any portion of the obligations owing to it hereunder and under the Bank Note to any Federal Reserve Bank or the United States Treasury as collateral security pursuant to Regulation A of the Board of Governors of the Federal Reserve System and any Operating Circular issued by such Federal Reserve Bank, provided that any payment in respect of such assigned obligations made by the Commission to the Bank in accordance with the terms of this Agreement or the Bank Note will satisfy the Commission ’s obligations hereunder and/or under the Bank Note in respect of such assigned obligation to the extent of such payment. No such assignment will release the Bank from its obligations hereunder.

Section 7.19 City Requirements. The Bank agrees to the City’ s requirements, as provided in Exhibit D attached hereto.

Section 7.20 Arm’s Length Transaction . The transaction described in this Agreement is an arm ’s length, commercial transaction between the Commission and the Bank in which:
(i) the Bank is acting solely as a principal (i.e., as a lender) and for its own interest; (ii) the Bank is not acting as a municipal advisor or financial ad visor to the Commission; (iii) the Bank has no duty pursuant to Section 15B of the Securities Exchange Act of 1934 to the Commission with to this transaction and the discussions, undertakings and procedures leading thereto (irrespective of whether the Bank or any of its affiliates has provided other services or is currently providing other services to the Commission on other matters); (iv) the only obligations the Bank has to the Commission with respect to this transaction are set forth in this Agreement; a nd (v) the Bank is not recommending that the Commission take an action with respect to the transaction described in this Agreement and the other Basic Documents, and before taking any action with respect to the this transaction, the Commission should discuss the information contained herein with the own legal, accounting, tax, financial and other advisors, as the Commission deems appropriate.

Section 7.21 QFC Provisions. To the extent that the Basic Documents provide support, through a guarantee or otherwise, for any agreement or instrument that is a QFC (such support, “QFC Credit Support ”, and each such QFC, a “ Supported QFC”), the parties acknowledge and agree as follow s with respect to the resolution power of the Federal Deposit Insurance Corporation under the Federal Deposit Insurance Act and Title II of the Dodd- Frank Wall Street Reform and Consumer Protection Act (together with the regulations promulgated thereunder, the “U.S. Special Resolution Regimes” ) in respect of such Supported QFC and QFC Credit Support (with the provisions below applicable notwithstanding that the Basic Documents and any Supported QFC may in fact be stated to be governed by the laws of the State of New York and/or of the United States or any other state of the United States):
4886-4749-3705.4

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(a) Acknowledgment Regarding Supported QFCs. In the event a Covered Entity that is party to a Supported QFC (each, a “ Covered Party”) becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer of such Supported QFC and the benefit of such QFC Credit Support (and any interest and obligation in or under such Supported QFC and such QFC Credit Support, and any rights in property securing such Supported QFC or such QFC Credit Support) from such Covered Party will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if the Supported QFC and such QFC Credit Support (and any such interest, obligation and rights in property) were governed by the laws of the United States or a state of the United States. In the event a Covered Party or a BHC Act Affiliate of a Covered Party becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rig hts under the Basic Documents that might otherwise apply to such Supported QFC or any QFC Credit Support that may be exercised against such Covered Party are permitted to be exercised to no greater extent than such Default Rights could be exercised under t he U.S. Special Resolution Regime if the Supported QFC and the Basic Documents were governed by the laws of the United States or a state of the United States. (b) Limitation on the Exercise of Certain Rights Related to Affiliate Insolvency Proceedings with Respect to Any Supported QFCs. Notwithstanding anything to the contrary in the Basic Documents or any other agreement, but without prejudice to the requirements of the preceding paragraph (a), Default Rights under the Basic Documents that might otherwise apply to a Supported QFC or any QFC Credit Support may not be exercised against a Covered Party if such Default Rights are related, directly or indirectly, to a BHC Act Affiliate of such Covered Party becoming subject to Insolvency Proceedings, except to the extent such exercise would be permitted under 12 C.F.R. § 252.84, 12 C.F.R. § 47.5, or 12 C.F.R. § 382.4, as applicable. After a BHC Act Affiliate of a Covered Party has become subject to Insolvency Proceedings, if any party to the Basic Documents, any Supported QFC or any QFC Credit Support seeks to exercise any Default Right against such Covered Party with respect to such Supported QFC or such QFC Credit Support, the party seeking to exercise such Default Right shall have the burden of proof, by clear and convincing evidence, that the exercise of such Default Right is permitted hereunder. [SIGNATURE PAGES FOLLOW]

[Signature Page – Power Enterprise Reimbursement Agreement – Series A-2 Notes] IN WITNESS WHEREOF, the Commission and the Bank have duly executed this Agreement as of the date first written above.

PUBLIC UTILITIES COMMISSION OF THE

CITY AND COUNTY OF SAN FRANCISCO
By:

Name: Nikolai J. Sklaroff
Title: Capital Finance Director
APPROVED AS TO FORM:

DAVID CHIU
City Attorney of the City and
County of San Francisco
By:

Name: Mark D. Blake
Title: Deputy City Attorney

ACKNOWLEDGED
By:

Name: Anna Van Degna
Title: Director of Public Finance of the
City and County of San Francisco

[Signature Page – Power Enterprise Reimbursement Agreement – Series A-2 Notes] BANK OF AMERICA, N.A.

By:

Name:

Title:
4886-4749-3705.4

Appendix I-1

APPENDIX I

FORM OF AMENDED AND RESTATED

IRREVOCABLE TRANSFERABLE LETTER OF CREDIT
BANK OF AMERICA, N.A.
1 FLEET WAY
PA6-580-02-30
SCRANTON, PENNSYLVANIA 18507
March ___, 2023
U.S. [$136,095,891]
No. __________
U.S. Bank Trust Company, National Association,
as Issuing and Paying Agent
100 Wall Street, 6th Floor
New York, New York 10005
Attention: __________
Ladies and Gentlemen:

We hereby establish in your favor as issuing and paying agent (the “ Issuing and Paying Agent”) under that certain First Amended and Restated Issuing and Paying Agent Agreement, dated as of March 1, 2019 (as amend ed, supplemented, restated or otherwise modified from time to time, the “Issuing and Paying Agent Agreement”), between the Public Utilities Commission of the City and County of San Francisco (the “ Commission”) and the Issuing and Paying Agent for the benef it of the holders of the Series A -2 Notes (as hereinafter defined) our Irrevocable Transferable Letter of Credit No. __________ (as amended, supplemented, restated or otherwise modified from time to time, this “Letter of Credit”) for the account of the Commission, whereby we hereby irrevocably authorize you to draw on us from time to time, from and after the date hereof to and including the earliest to occur of our close of business on: (i) March __ , 2026, (as extended from time to time, the “ Stated Expiration Date”), (ii) the later of the date on which we receive a written certificate from you in the form of Annex C attached hereto that an Alternate Facility has been substituted for this Letter of Credit in accordance with the Issuing and Paying Agent Agreement and the effective date of any such Alternate Facility as specified in such notice (after we honor any properly presented and conforming Drawing (as defined below) on such date), (iii) the date on which we receive a written certificate from you in the form of Annex F attached hereto that there are no longer any Series A -2 Notes Outstanding within the meaning of the Issuing and Paying Agent Agreement and that you elect to terminate this Letter of Credit, (iv) the earlier of (a) the fifteenth (15th) calen dar day after the date on which you receive notice from us in the form of Annex H (the “ Final Drawing Notice ”), (b) the date on which the drawing resulting from the delivery of the F inal Drawing Notice is honored, and (v) the earlier of (a) the third (3rd) Business Day after the date on which you receive notice from us in the form of Annex J (the “ Acceleration Notice”) and (b) the date on which the Drawing resulting from the delivery of the Acceleration Notice is honored hereunder (the earliest of the foregoing dates herein referred to as the “ Termination Date”), a maximum aggregate amount not 4886-4749-3705.4

Appendix I-2
exceeding [$136,095,891] (the “Original Stated Amount”) to pay the unpaid principal amount of, and accrued interest on, the Commission ’s Commercial Paper Notes (Power Series) Series A -2 (Tax-Exempt) (the “ Series A -2 Notes”), in accordance with the terms hereof (said [$136,095,891] having been calculated to be equal to (A) [$125,000,000], the maximum aggregate principal amount of the Series A -2 Notes which may be issued pursuant to the Issuing and Paying Agent Agreement, plus (B) [$11,095,891] which is 270 days’ accrued interest on said principal amount of the Series A-2 Notes at the rate of 12% per annum (the “ Cap Interest Rate”) and assuming a year of 365 days and rounded up to the nearest dollar. This credit is available to you against presentation of the following documents (the “Payment Documents ”) presented to the Bank:

A certificate (with all blanks appropriately completed) (i) in the form attached as Annex A hereto with respect to the payment at maturity of the principal of and interest at maturity on Series A -2 Notes, and (ii) in the form attached as Annex B hereto with respect to the payment at maturity of the principal of and interest to maturity on Series A-2 Notes and that otherwise mature on or after the date that you receive the Final Drawing Notice, each certificate to state therein that it is given by your duly authorized officer and dated the date such certificate is presented hereunder (each such completed and executed certificate, a “Drawing”).

No Drawings shall be made under this Let ter of Credit for (i) Series A -2 Notes bearing registered in the name of the Bank or its nominee or (ii) Series A -2 Notes owned by or on behalf of the Commission (“Ineligible Series A-2 Notes”).

All drawings shall be made by presentation of each Payment Document at Bank of America, N.A. , Scranton, at telecopier number (800) 755 -8743, Attention: Standby Letter of Credit Department, without further need of documentation, including the original of this Letter of Credit, it being understood that each Payment Document so submitted is to be the sole operative instrument of a Drawing. You shall use your best efforts to give telephonic notice of a drawing to the Bank at (800) 370- 7519 OPT 1 on the Business Day preceding the day of such drawing (but such notice shall not be a condition to drawing hereunder and you shall have no liability for not doing so).

We agree to honor and pay the amount of any Drawing if presented in compliance with all of the terms of this Letter of Credit to the following account: U.S. Bank National Association, ABA [ # 0 91-000-022, A/C# 1731-0185- 1827, A/C NAME: U.S. Trust, Attn:

Charlie VanVleet , Reference: Public Utilities Commission of the City and County of San Francisco Commercial Paper Notes (Power Series) Series A -2 (Tax-Exempt)] (such account, the “Beneficiary Payment Account ”). If any such Drawing is presented at or prior to 11:30 A.M., New York time, on a Business Day, payment shall be made, in immediately available funds, by 2:30 P.M., New York time, on the same Business Day. If any such Drawing is presented after 11:30 A.M., New York time, on a Business Day, payment shall be made, in immediately available funds, by 2:30 P.M., New York time, on the next succeeding Business Day. “ Business Day” shall mean any day other than (i ) Saturday or Sunday, (ii) day on which banks located in the cities in which the designated office of the Issuing and Paying Agent or the Banks (initially, Scranton, Pennsylvania, and New York, New York) is located are required or authorized to close, or (iii) a day on which the New York Stock Exchange is required or authorized to close, or 4886-4749-3705.4

Appendix I-3
(iv) a legal holiday of the City or any other day the City is authorized by law to be closed for official business.

The Stated Amount (as hereinafter defined) of this Letter of Credit will be reduced automatically by the amount of any drawing hereunder. In connection therewith (except in the case of a Drawing resulting from the delivery of a Final Drawing Notice or the Acceleration Notice), the Stated Amount will be increased when and to the extent, but only when and to the extent, (i) (A) of transfer by you to us on the date such Drawing is honored of proceeds of Commercial Paper Notes issued on such date or (B) you receive written notice from us in the form of Annex K hereto that we have been reimbursed by or on behalf of the Commission for the amount of any Drawing honored hereunder, and (ii) that you have not received notice from us in the form of Annex J hereto (a “ No-Issuance Notice”). The Stated Amount under this L etter of Credit will be reduced automatically upon our receipt of Annex G to the amount stated in paragraph 2 therein.

The “Stated Amount” shall mean the Original Stated Amount (i) less the amount of all prior reductions pursuant to Drawings, (ii) less the amount of any reduction thereof pursuant to a reduction certificate in the form of Annex G hereto, (iii) plus the amount of all reinstatements as above provided.

Prior to the Termination Date, we may extend the Stated Expiration Date from time to time at the request of the Commission by delivering to you an amendment to this Letter of Credit in the form of Annex E hereto designating the date to which the Stated Expiration Date is being extended, and thereafter all references in this Letter of Credit to the Stated Expiration Date shall be deemed to be references to the date designated as such in such notice. Any date to which the Stated Expiration Date has been extended as herein provided may be extended in a like manner.

Upon the Termination Date this Letter of Credit shall automatically terminate.

This Letter of Credit is transferable to any transferee whom has succeeded you as Issuing and Paying Agent under the Issuing and Paying Agent Agreement, and may be successively transferred in its entirety. Trans fer of the available balance under this Letter of Credit to such transferee shall be effected by the presentation to us of a Transfer Certificate in the form of Annex D attached hereto signed by the transferor and acknowledged by the transferee (each a “Transfer”) together with the original Letter of Credit.

Other than the provisions for communication by facsimile copy, communications with respect to this Letter of Credit shall be addressed to us at Bank of America, N.A., 1 Fleet Way, PA6-580-02-30, Scranton, Pennsylvania 18507, Attention: Standby Letter of Credit Department, specifically referring to the number of this Letter of Credit.

To the extent not inconsistent with the express terms hereof, this Letter of Credit shall be governed by, and construed i n accordance with, the terms of the International Standby Practices 1998, International Chamber of Commerce -Publication No. 590 ( “ISP98”), except for (i) Rule 2.06(c)(iii) thereof, with regard to an amendment of this Letter of Credit for the purpose of extending the Stated Expiration Date, (ii) Rule 3.12(a) thereof, and (iii) Rule 5.01(a) thereof.

As to matters not governed by the ISP98, this Letter of Credit shall be governed by and 4886-4749-3705.4

Appendix I-4
construed in accordance with Article 5 of the Uniform Commercial Code of the State of New York, without regard to conflict of laws.

All payments made by us hereunder shall be made from our funds and not with the funds of any other person.

This Letter of Credit sets forth in full the terms of our undertaking, and such undertaking shall not in any way be modified or amended by reference to any other document whatsoever.

BANK OF AMERICA, N.A.

By:

Name:

Title:
4886-4749-3705.4

Appendix I-5

ANNEX A
TO
BANK OF AMERICA, N.A.

LETTER OF CREDIT NO. ________

PRINCIPAL AND INTEREST DRAWING CERTIFICATE

PRIOR TO FINAL DRAWING CERTIFICATE
Bank of America, N.A.
1 Fleet Way
PA6-580-02-30
Scranton, Pennsylvania 18507
Attention: Standby Letter of Credit Department
Ladies and Gentlemen:

The undersigned individual, a duly authorized officer of ____________________ (the ”Beneficiary”), hereby certifies on behalf of the Beneficiar y as follows with respect to (i) that certain Irrevocable Transferable Letter of Credit No. __________ dated March ___, 2023 (as amended, the “Letter of Credit ”), issued by Bank of America, N.A. (the “ Bank”) in favor of the Beneficiary; (ii) those certain Series A -2 Notes (as defined in the Letter of Credit); and (iii) that certain Issuing and Paying Agent Agreement (as defined in the Letter of Credit):

1. The Beneficiary is the Issuing and Paying Agent (as defined in the Letter of Credit) under the Issuing and Paying Agent Agreement.

2. The Beneficiary is entitled to make this Drawing in the amount of $__________ under the Letter of Credit pursuant to the Issuing and Paying Agent Agreement, of which $__________ is being drawn with respect to the payment of principal of maturing Series A-2 Notes, other than Ineligible Series A-2 Notes (as defined in the Letter of Credit), and $__________ is being drawn in respect of _____ days of interest thereon.

3. The amount of the Drawing is equal to the amount required to be drawn by the Issuing and Paying Agent pursuant to the Issuing and Paying Agent Agreement.

4. The amount of the drawing made by this Certificate was computed in compliance with the terms of the Issuing and Paying Agent Agreement and does not exceed the Stated Amount (as defined in the Letter of Credit).

5. Payment by the Bank pursuant to this Drawing should be made to the Beneficiary Payment Account (as defined in the Letter of Credit) in accordance with the terms the Letter of Credit.

6. Upon receipt by the Beneficiary of the amount demanded hereby, (a) the Beneficiary will deposit the same directly into the Series A -2 Debt Service Account maintained by the Beneficiary pursuant to the Issuing and Paying Agent Agreement and 4886-4749-3705.4

Appendix I-6
apply the same directly to the payment when due of the principal amount of Series A -2 Notes and the interest amount owing on account of the Series A -2 Notes pursuant to the Issuing and Paying Agent Agreement, (b) no portion of said amount will be applied by the Beneficiary for any other purpose, (c) no portion of said amount will be commingled with other funds held by the Beneficiary, except for other funds drawn under the Letter of Credit, and (d) when such Series A-2 Notes have been presented for payment and paid by the Beneficiary, the Beneficiary will cancel such matured Series A-2 Notes.

IN WITNESS WHEREOF, this Certificate has been executed this ___ day of ____________________, 20___.
,
as Issuing and Paying Agent
By:
[Title of Authorized Officer]
4886-4749-3705.4

Appendix I-7

ANNEX B
TO
BANK OF AMERICA, N.A.

LETTER OF CREDIT NO. ________

PRINCIPAL AND INTEREST DRAWING CERTIFICATE

AFTER FINAL DRAWING CERTIFICATE
Bank of America, N.A.
1 Fleet Way
PA6-580-02-30
Scranton, Pennsylvania 18507
Attention: Standby Letter of Credit Department
Ladies and Gentlemen:

The undersigned individual, a duly authorized officer of ____________________ (the ”Beneficiary”), hereby certifies on behalf of the Beneficiary as follows with respect to (i) that certain Irrevocable Transferable Letter of Credit No. __________ dated March ___, 2023 (as amended, the “Letter of Credit ”), issued by Bank of America, N.A. (the “ Bank”) in favor of the Beneficiary; (ii) those certain Series A -2 Notes (as defined in the Letter of Credit); and (iii) that certain Issuing and Paying Agent Agreement (as defined in the Letter of Credit):

1. The Beneficiary is the Issu ing and Paying Agent (as defined in the Letter of Credit) under the Issuing and Paying Agent Agreement.

2. The Issuing and Paying Agent has received the Final Drawing Notice.

3. The Beneficiary is entitled to make this Drawing in the amount of $__________ under the Letter of Credit pursuant to the Issuing and Paying Agent Agreement, of which $__________ is being drawn with respect to the payment of principal of Series A-2 Notes maturing on or after the Final Drawing Notice, other than Ineligible Series A-2 Notes (as defined in the Letter of Credit), and $__________ is being drawn in respect of _____ days of interest thereon.

4. The amount of the Drawing is equal to the amount required to be drawn by the Issuing and Paying Agent pursuant to the Issuing and Paying Agent Agreement.

5. The amount of the drawing made by this Certificate was computed in compliance with the terms of the Issuing and Paying Agent Agreement and does not exceed the Stated Amount (as defined in the Letter of Credit).

6. This Payment Document is being presented to the Bank on a date which is no later than t he second Business Day prior to the fifteenth (15th) calendar day after receipt by the Beneficiary of the Final Drawing Notice. 4886-4749-3705.4

Appendix I-8

7. Payment by the Bank pursuant to this Drawing should be made to the Beneficiary Payment Account (as defined in the Letter of Credit) in accordance with the terms the Letter of Credit.

8. Upon receipt by the Beneficiary of the amount demanded hereby, (a) the Beneficiary will deposit the s ame directly into the Series A -2 Debt S ervice Account maintained by the Beneficiary pursuant to the Issuing and Paying Agent Agreement and apply the same directly to the payment when due of the principal amount of Series A -2 Notes and the interest amount owing on account of the Series A -2 Notes pursuant to the Issuing and Paying Agent Agreement, (b) no portion of said amount will be applied by the Beneficiary for any other purpose, (c) no portion of said amount will be commingled with other funds held by the Beneficiary, except for other funds drawn under the Letter of Credit, and (d) when such Series A-2 Notes have been presented for payment and paid by the Beneficiary, the Beneficiary will cancel such matured Series A-2 Notes.

IN WITNESS WHEREOF, this Certificate has been executed this _____ day of ____________________, 20___.
,
as Issuing and Paying Agent
By:
[Title of Authorized Officer]
4886-4749-3705.4

Appendix I-9

ANNEX C
TO
BANK OF AMERICA, N.A.

LETTER OF CREDIT NO. ________

CERTIFICATE REGARDING ALTERNATE FACILITY
Bank of America, N.A.
1 Fleet Way
PA6-580-02-30
Scranton, Pennsylvania 18507
Attention: Standby Letter of Credit Department
Ladies and Gentlemen:

The undersigned individual, a duly authorized officer of ____________________ (the ”Beneficiary”), hereby certifies on behalf of the Beneficiary as follows with respect to (i) that certain Irrevocable Transferable Letter of Credit No. __________ dated March ___, 2023 (as amended, the “Letter of Credit ”), issued by Bank of America, N.A. (the “ Bank”) in favor of the Beneficiary; (ii) those certain Series A -2 Notes (as defined in the Letter of Credit); and (iii) that certain Issuing and Paying Agent Agreement (as defined in the Letter of Credit):

1. The Beneficiary is the Issuing and Paying Agent (as defined in the Letter of Credit) under the Issuing and Paying Agent Agreement.

2. The conditions precedent to the acceptance of an Alternate Facility set forth in the Issuing and Paying Agent Agreement have been satisfied.

3. An Alternate Facility in full and complete substitution for the Letter of Credit has been accepted by the Issuing and Paying Agent and is or will be in effect as of ____________________, 20___.

4. There will be no further Drawings requested from the Bank under the Letter of Credit.

5. Upon receipt by the Bank of this Certificate, the Letter of Credit will terminate with respect to all outstanding Series A-2 Notes, and the Letter of Credit (and any amendments thereto) is returned to you herewith for cancellation.

6. No payment is demanded of you in connection with this Certificate. 4886-4749-3705.4

Appendix I-10
IN WITNESS WHEREOF, this Certificate has been executed this _ ____ day of ____________________, _____.
,
as Issuing and Paying Agent
By:
[Title of Authorized Officer]
4886-4749-3705.4

Appendix I-11

ANNEX D
TO
BANK OF AMERICA, N.A.

LETTER OF CREDIT NO. ________

TRANSFER CERTIFICATE
[Date]
Bank of America, N.A.
1 Fleet Way
PA6-580-02-30
Scranton, Pennsylvania 18507
Attention: Standby Letter of Credit Department
Re: Irrevocable Transferable Letter of Credit No. __________ dated March ___, 2023 We, the undersigned “ Transferor”, hereby irrevocably transfer all of our rights to draw under the above referenced Letter of Credit (as amended, the “Letter of Credit”) in its entirety to:

NAME OF TRANSFEREE

Print Name and complete address of the Transferee) “Transferee”

ADDRESS OF TRANSFEREE

CITY/STATE/COUNTRY ZIP
(the “Transferee”) all rights of the Transferor with respect to the above -referenced Letter of Credit, including the right to draw under said Letter of Credit in the amount of the full unutilized balance thereof. Said Transferee has succeeded the Transferor as Issuing and Paying Agent under that certain First Amended and Restated Issuing and Paying Agent Agreement, dated as of March 1, 2019 (as amended, supplemented, restated or otherwise modified from time to time, the “Issuing and Paying Agent Agreement ”), between the Public Utilities Commission of the City and County of San Francisco (the “ Commission”) an d U.S. Bank Trust Company National Association as the initial Issuing and Paying Agent with respect to the Commission ’s Commercial Paper Notes (Power Series) Series A-2 (Tax-Exempt).

By virtue of this transfer, the Transferee shall have the sole rights as beneficiary of said Letter of Credit, including sole rights relating to any past or future amendments thereof, whether increases or extensions or otherwise. All amendments are to be advised directly to the Transferee without necessity of any consent of or notice to the Transferor. 4886-4749-3705.4

Appendix I-12
By its signature below, the Transferee acknowledges that it has duly succeeded the Transferor as Issuing and Paying Agent under the Issuing and Paying Agent Agreement, and agrees to be bound by the terms of the Issuing and Paying Agent Agreement as if it were the original Issuing and Paying Agent thereunder.

The Letter of Credit is returned herewith, and we ask you to endorse the transfer on the reverse thereof and to forward it directly to the Transferee with your customary notic e of transfer.

Very truly yours,
[Insert Name of Issuing and Paying Agent],
as Issuing and Paying Agent
By:
[Insert name and title of authorized officer]

SIGNATURE OF THE ABOVE OFFICER,

DULY AUTHORIZED TO ACT ON
BEHALF OF [insert name of
Issuing and Paying Agent],
AUTHENTICATED BY:

By:

Name:

Title:

Acknowledged by
[insert name of Transferee],
as Transferee and successor
Issuing and Paying Agent
By:

Name:

Title:

SIGNATURE OF THE ABOVE OFFICER

DULY AUTHORIZED TO ACT ON BEHALF
OF [insert name of Transferee],
AUTHENTICATED BY:

By:

Name:

Title:
4886-4749-3705.4

Appendix I-13

ANNEX E
TO
BANK OF AMERICA, N.A.

LETTER OF CREDIT NO. ________

NOTICE OF EXTENSION
____________________, _____
[ISSUING AND PAYING AGENT]

Attention:

Ladies and Gentlemen:

Reference is hereby made to that certain Irrevocable Transferable Letter of Credit No. __________ dated March ___, 2023 (as amended, the “ Letter of Credit”), established by us in your favor as Beneficiary. We hereby notify you that, in accordance with the terms of the Letter of Credit, the Stated Expiration Date (as defined in the Letter of Credit) h as been extended to ____________________, _____.

This letter shall be attached to the Letter of Credit and made a part thereof.

BANK OF AMERICA, N.A.

By:

Name:

Title:
4886-4749-3705.4

Appendix I-14

ANNEX F
TO
BANK OF AMERICA, N.A.

LETTER OF CREDIT NO. ________

CERTIFICATE REGARDING NO OUTSTANDING NOTES
Bank of America, N.A.
1 Fleet Way
PA6-580-02-30
Scranton, Pennsylvania 18507
Attention: Standby Letter of Credit Department
Ladies and Gentlemen:

The undersigned, a duly authorized officer of ____________________ [insert name of Issuing and Paying Agent] (the “ Beneficiary”), hereby notifies Bank of America, N.A. (the “Bank”), wit h reference to that certain Irrevocable Transferable Letter of Credit No. __________ dated March __ _, 2023 (as amended, the “ Letter of Credit ”; terms defined therein and not otherwise defined herein shall have the meanings set forth in the Letter of Credit) issued by the Bank in favor of the Beneficiary as follows:

1. The Beneficiary is the Issuing and Paying Agent under the Issuing and Paying Agent Agreement for the holders of the Series A-2 Notes.

2. No Series A-2 Notes (other than Series A-2 Notes with respect to which an Alternate Facility is in effect) remain outstand ing under the Issuing and Paying Agent Agreement, nor does the Commission intend to issue any additional Series A -2 Notes under the Issuing and Paying Agent Agreement.

3. There will be no further Drawings requested from the Bank under the Letter of Credit, and the Beneficiary hereby elects to terminate the Letter of Credit, and returns such Letter of Credit (along with any amendments thereto) to you herewith for cancellation.

4. No payment is demanded of you in connection with this Certificate.

IN WITNESS WHEREOF, the Issuing and Paying Agent has executed and delivered this Certificate as of this _____ day of ____________________, _____. [INSERT NAME OF ISSUING AND PAYING
AGENT], as Issuing and Paying Agent
By:

Name:

Title:
4886-4749-3705.4

Appendix I-15

ANNEX G
TO
BANK OF AMERICA, N.A.

LETTER OF CREDIT NO. ________

NOTICE OF REDUCTION
Bank of America, N.A.
1 Fleet Way
PA6-580-02-30
Scranton, Pennsylvania 18507
Attention: Standby Letter of Credit Department
Ladies and Gentlemen:

The undersigned, a duly authorized officer of ____________________ [insert name of Issuing and Paying Agent] (the “ Beneficiary”), hereby notifies Bank of America, N.A. (the “Bank”), wit h reference to that certain Irrevocable Transferable Letter of Credit No. __________ dated March __ _, 2023 (as amended, the “ Letter of Credit ”; terms defined therein and not otherwise defined herein shall have the meanings set forth in the Letter of Credit) issued by the Bank in favor of the Beneficiary as follows:

1. The Beneficiary is the Issuing and Paying Agent under the Issuing and Paying Agent Agreement for the holders of the Series A-2 Notes.

2. The Stated Amount of the Letter of Credit will be decreased b y the amount of $__________ ($__________ applicable to principal and $__________ applicable to interest), effective on __________ (the “Decrease Date”).

3. The new Stated Amount of the Letter of Credit is $__________, of which $__________ is applicable to principal and $__________ is applicable to interest, which amounts are not less than the outstanding principal amount of Series A -2 Notes on the Decrease Date and interest thereon at the Cap Interest Rate for a period of two hundred seventy (270) days, calculated on the basis of a year of 365 days on the Decrease Date.

4. You are required to attach this Notice of Reduction to the Letter of Credit and to treat this Notice of Reduction as an amendment to the Letter of Credit. 4886-4749-3705.4

Appendix I-16
IN WITNESS WHEREOF, the Issuing and Paying Agent has executed and delivered this Certificate as of this _____ day of ____________________, _____. [INSERT NAME OF ISSUING AND PAYING
AGENT], as Issuing and Paying Agent
By:

Name:

Title:
4886-4749-3705.4

Appendix I-17

ANNEX H
TO
BANK OF AMERICA, N.A.

LETTER OF CREDIT NO. ________

FINAL DRAWING NOTICE
[DATE]
[ISSUING AND PAYING AGENT]

Attention:

Ladies and Gentlemen:

Reference is hereby made to that certain Irrevocable Transferable Letter of Credit No. ________ dated March __, 2023 (as amended, the “ Letter of Credit;”; terms defined therein and not otherwise defined herein shall have the meanings set forth in the Letter of Credit), established by us in your favor as Issuing and Paying Agent.

Please be advised that:

1. An Event of Default under and as defined in the Reimbursement Agreement, dated as of March 1, 2023, between the undersigned and the Public Utilities Commission of the City and County of San Francisco, pursuant to which the Letter of Credit was issued, has occurred and is continuing.

2. The undersigned instructs the Issuing and Paying Agent, effective upon receipt of this Final Drawing Notice, to cease issuing Series A-2 Notes.

3. The undersigned hereby notifies you as Issuing and Paying Agent that (i) effective upon receipt of this Final Drawing Notice, the Stated Amount available to be drawn under the Letter of Credit will not be reinstated in accordance with the Letter of Credit, (ii) the Issuing and Paying Agent is instructed to make the final Drawing under the Letter of Credit to provide for the payment of Series A -2 Notes issued in accordance with the Issuing and Paying Agent Agreement which are outstanding and are maturing or are hereafter to mature, and (iii) the Termination Date of the Letter of Credit will occur and the Letter of Credit will terminate on the earlier of (a) date which is the fifteenth (15th) calendar day after the date of receipt by the Issuing and Paying Agent of this Final Drawing Notice and (b) the date on which the Drawing resulting from the delivery of this Final Drawing Notice is honored by the undersigned.
4886-4749-3705.4

Appendix I-18
BANK OF AMERICA, N.A.

By:

Name:

Title:
4886-4749-3705.4

Appendix I-19

ANNEX I
TO
BANK OF AMERICA, N.A.

LETTER OF CREDIT NO. ________

ACCELERATION NOTICE
[DATE]
[ISSUING AND PAYING AGENT]

Attention:

Ladies and Gentlemen:

Reference is hereby made to that certain Irrevocable Transferable Letter of Credit No. __________ dated March __ _, 2023 (as amended, the “ Letter of Credit ;”; terms defined therein and not otherwise defined herein shall have the meanings set forth in the Letter of Credit), established by us in your favor as Issuing and Paying Agent.

Please be advised that:

1. An “event of default ” under and as defined in the First Amended and Restated Issuing and Paying Agent Agreement, dated as of March 1, 2019 (the “ IPAA”), between the Issuing and Paying Agent and the Public Utilities Commission of the City and County of San Francisco, has occurred.

2. Pursuant to Section 8.01 of the IPAA, the undersigned notifies the Issuing and Paying Agent that is has declared the principal of all outstanding Series A -2 Notes, and the interest accrued thereon, to be due and payable immediately.

3. The undersigned hereby notifies you as Issuing and Paying Agent that (i) effective upon receipt of this Acceleration Notice, the Stated Amount available to be drawn under the Letter of Credit will not be reinstated in accordance with the Letter of Credit, (ii) the Issuing and Paying Agent is instructed to make the final Drawing under the Letter of Credit to provide for the payment of the principal of and interest on Series A-2 Notes issued in accordance with the Issuing and Paying Agent Agreement which are outstanding and which have been accelerated, and (iii) the Termination Date of the Letter of Credit will occur and the Letter of Credit will terminate on the earlier of (a) date which is the third (3rd) Business Day after the date of receipt by the Issuing and Paying Agent of this Acceleration Notice and (b) the date on which the Drawing resulting from the delivery of this Acceleration Notice is honored by the undersigned. 4886-4749-3705.4

Appendix I-20
BANK OF AMERICA, N.A.

By:

Name:

Title:

CC: PUBLIC UTILITIES COMMISSION OF THE

CITY AND COUNTY OF SAN FRANCISCO
Attention: Chief Financial Officer
525 Golden Gate Avenue, 13th Floor
San Francisco, California 94102
4886-4749-3705.4

Appendix I-21

ANNEX J
TO
BANK OF AMERICA, N.A.

LETTER OF CREDIT NO. ________

NO-ISSUANCE NOTICE
[DATE]
[ISSUING AND PAYING AGENT]

Attention:

Ladies and Gentlemen:

Reference is hereby made to that certain Irrevocable Transferable Letter of Credit No. __________ dated March __ _, 2023 (as amended, the “ Letter of Credit ;”; terms defined therein and not otherwise defined herein shall have the meanings set forth in the Letter of Credit), established by us in your favor as Issuing and Paying Agent.

Please be advised that:

1. A Default or an Event of Default under and as defined in the Reimbursement Agreement, dated as of March 1, 2023, between the Commission and the Bank (as amended and supplemented from time to time ), between t he undersigned and the Public Utilities Commission of the City and County of San Francisco, pursuant to which the Letter of Credit was issued, has occurred and is continuing.

2. Subject to the following sentence, you shall cease authenticating and issuing Series A-2 Notes, as provided in the Issuing and Paying Agent Agreement, unless and until we rescind this No -Issuance Notice. If you receive this No -Issuance Notice after 2:00 p.m., New York City time, on a Business Day, you shall cease authenticating Series A-2 Notes on the next Business Day.

3. This No-Issuance Notice will not affect our obligation to honor demands for payment under the Letter of Credit with respect to Series A -2 Notes authenticated and issued prior to your receipt of this No- Issuance Notice ( or, as provided in paragraph 2 above, on the same Business Day that you receive this No -Issuance Notice), and you will continue to have the right to draw under the Letter of Credit to pay the principal of and accrued interest on maturing Series A -2 Notes a uthenticated and issued prior to your receipt of this No -Issuance Notice (or, as provided in paragraph 2 above, authenticated and issued on the same Business Day that you receive this No-Issuance Notice. 4886-4749-3705.4

Appendix I-22
BANK OF AMERICA, N.A.

By:

Name:

Title:
4886-4749-3705.4

Appendix I-23

ANNEX K
TO
BANK OF AMERICA, N.A.

LETTER OF CREDIT NO. ________

NOTICE OF REIMBURSEMENT
[DATE]
[ISSUING AND PAYING AGENT]

Attention:

Ladies and Gentlemen:

Reference is hereby made to that certain Irrevocable Transferable Letter of Credit No. ________ dated March __, 2023 (as amended, the “ Letter of Credit;”; terms defined therein and not otherwise defined herein shall have the meanings set forth in the Letter of Credit), established by us in your favor as Issuing and Paying Agent.

Please be advised that:

1. The Bank has been reimbursed by or on behalf of the Commission for an amount drawn and honored by the Bank under the Letter of Credit and that the Stated Amount of the Letter of Credit will be increased by the amount of $__________, of which $__________ is applicable to principal and $__________ is applicable to interest, effective as of ____________________, _____ (the “Increase Date”).

2. The new Stated Amount of the Letter of Credit is $__________, of which $__________ is applicable to principal and $__________ is applicable to interest. You are authorized and directed to attach this Notice of Reimbursement to the Letter of Credit and to treat this Notice of Reimbursement as an amendment to the Letter of Credit.

BANK OF AMERICA, N.A.

By
Name:

Title:
4886-4749-3705.4

Exhibit A-1

EXHIBIT A

FORM OF BANK NOTE

SAN FRANCISCO PUBLIC UTILITIES COMMISSION BANK NOTE
Series A-2 Bank Note (POWER SERIES) BANK OF AMERICA, N.A.

CUSIP No. _____
March __, 2023 [$136,095,891] San Francisco, California For value received, PUBLIC UTILITIES COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO (the “ Commission”) promises to pay to the order of BANK OF AMERICA N.A. (the ”Bank”), by wire transfer to the payment account specified in the Agreement referred to below, or such other account as the Bank may specify to the Commission in writing, the principal sum of [ One Hundred Thirty- Six Million Ninety -Five Thousand and Eight Hundred Ninety -One Dollars ($136,095,891) ] or, if less, the aggregate outstanding principal amount of the unreimbursed Reimbursement Obligations from time to time owing to the Bank pursuant to the Reimbursement Agreement, dated as of March 1, 2023, between the Commission and the Bank (as amended and supplemented from time to time, the “ Agreement”), on the dates and in the amounts provided for in the Agreement.

The Commission promises to pay interest on the unpaid principal amount of such Reimbursement Obligations on the dates and at the rates provided for in the Agreement.

All payments of principa l and interest must be made in lawful money of the United States of America in immediately available funds. All capitalized terms used herein and not otherwise defined herein have the meanings specified in the Agreement.

This Bank Note is the Bank Note ref erred to in the Agreement and is entitled to the benefits thereof and of the other Basic Documents referred to therein. As provided in the Agreement, this Bank Note is subject to prepayment, in whole or in part. In case an Event of Default occurs and is continuing, the principal of and accrued interest on this Bank Note may be declared due and payable in the manner and with the effect provided in the Agreement.

The Bank agrees, by acceptance of this Bank Note, that, before disposing of this Bank Note, it will make a notation on the schedule attached hereto of all Reimbursement Obligations evidenced hereby and all principal payments and prepayments made hereunder and of the date to which interest hereon has been paid; provided, however , that the failure to ma ke any such notation will not limit or otherwise affect the obligation of the Commission hereunder with respect to payments of principal of and interest on this Bank Note.

Notwithstanding any other provision hereof or of the Agreement to the contrary, the obligations of the Commission hereunder are payable from the Available Power Enterprise Revenues. This Bank Note constitutes a valid and binding obligation of the Commission issued under the Issuing and Paying Agent Agreement and is secured by, and payable from, the Available Power Enterprise Revenues and from the proceeds of subsequent borrowings by the Commission, including but not limited to additional or rollover Notes authorized thereunder. 4886-4749-3705.4

Exhibit A-2
The undersigned maker and all guarantors, endorsers and pledgors that may exist at any time with respect hereto hereby waive presentment, demand, notice, protest and all other demands and notices in connection with the delivery, acceptance, performance and enforcement of this Bank Note and assent to extensions of the time of payment or forbearance or other indulgence without notice.

THIS BANK NOTE IS GOVERNED BY, AND TO BE CONSTRUED IN

ACCORDANCE WITH, THE LAW OF THE STATE OF CALIFORNIA WITHOUT GIVING EFFECT TO CONFLICTS OF LAWS PROVISIONS.

IN WITNESS WHEREOF, the Public Utilities Commission of the City and County of San Francisco has caused this Bank Note to be signed in its corporate name as an instrument under seal by its duly authorized officer on the date and in the year first above written.

PUBLIC UTILITIES COMMISSION OF THE

CITY AND COUNTY OF SAN FRANCISCO
By:

Name: Dennis J. Herrera
Title: General Manager
APPROVED AS TO FORM:

DAVID CHIU
City Attorney of the City and
County of San Francisco
By: ____________________________
Name: Mark D. Blake
Title: Deputy City Attorney

ACKNOWLEDGED:

By: ____________________________
Name: Anna Van Degna
Title: Director of Public Finance of the
City and County of San Francisco

4886-4749-3705.4

Exhibit A-3

TRANSACTIONS ON BANK NOTE
Date
Principal Amount of
Reimbursement
Obligation
Amount of
Principal Paid
Date to Which
Interest Paid Notation Made By

4886-4749-3705.4

Exhibit B-1

EXHIBIT B

FORM OF COMPLIANCE CERTIFICATE
This Compliance Certificate (this “Certificate”) is furnished to Bank of America, N.A. (the “Bank” ) pursuant to the Reimbursement Agreeme nt, dated as of March 1, 2023 (the “Agreement”), between the Public Utilities Commission of the City and Co unty of San Francisco (the “ Commission”) and Bank. Unless otherwise defined herein, the terms used in this Certificate have the meanings assigned thereto in the Agreement.

THE UNDERSIGNED HEREBY CERTIFIES THAT:

1. I am an Authorized Representative of the Commission;

2. I have reviewed the terms of the Agreement and I have made, or have caused to be made under my supervision, a detailed review of the transactions and conditions of the Commission during the accounting period covered by the attached financial statements;

3. The examinations described in paragraph 2 did not disclose, and I have no knowledge of, the existence of any condition or the occurrence of any event which constitutes a Default or Event of Default during or at the end of the accounting period covered by the attached financial statements or as of the date of this Certificate, except as set forth below; and

4. To the best of my knowledge the financial statements required by Section 5.1(a) of the Agreement and being furnished to you concurrently with this certificate fairly represent the consolidated financial condition of the Commission in accordance with GAAP as of the date and for the period covered thereby.

Describe below the exceptions, if any, to paragraph 3 by listing, in detail, the nature of the condition or event, the period during which it has existed and the action which the Commission has taken, is taking, or proposes to take with respect to each such condition or event:

The foregoing certifications and the financial statements delivered with this Certificate in support hereof, are made and delivered this _____ day of __________, 20___.

PUBLIC UTILITIES COMMISSION OF THE

CITY AND COUNTY OF SAN FRANCISCO
By:

Name:

Title:

4886-4749-3705.4

Exhibit C-1

EXHIBIT C
2023 LIST OF CITY HOLIDAYS
(INCLUDING DAYS CITY IS OFFICIALLY CLOSED)

New Year’s Day - Monday, January 2, 2023
Dr. Martin Luther King, Jr. Day - Monday, January 16, 2023 President’s Day - Monday, February 20, 2023
Memorial Day - Monday, May 29, 2023
Independence Day - Tuesday, July 4, 2023
Labor Day - Monday, September 7, 2023
Thanksgiving Day and the Day After - Thursday, November 23, 2023 & Friday, November 24, 2023
Christmas Day - Monday, December 25, 2023
4886-4749-3705.4

Exhibit D-1

EXHIBIT D

CITY REQUIREMENTS

(a) Tropical Hardwood and Virgin Redwood Ban. The City 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. (b) Nondiscrimination: Penalties.
(i) Bank Shall Not Discriminate. In the performance of this Agreement, the Bank agrees not to discriminate against any employee, City and County employee working with the Bank or subcontractor, applicant for employment with the Bank 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, or association with members of such protected classes, or in retaliation for opposition to discrimination against such classes. (ii) Subcontracts. The Bank shall incorporate by reference in all subcontracts made in fulfillment of its obligations hereunder the provisions of Sections 12B.2(a), 12B.2(c)-(k) and 12C.3 of the San Francisco Administrative Code and shall require all subcontractors to comply with such provisions. The Bank’ s failure to comply with the obligations in this subsection shall constitute a material breach of this Agreement.
(iii) Non-Discrimination in Benefits. The Bank does not as of the date of this Agreement and will not during the term of this Agreement, 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 be nefits 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 Section 12B.2(b) of the San Francisco Administrative Code. (iv) HRC Form. The Bank 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.
4886-4749-3705.4

Exhibit D-2
(v) Incorporation of Administrative Code Provisions by Reference.

The provisions of Chapters 12B and 12C of the San Francisco Adm inistrative Code are incorporated in this Section by reference and made a part of this Agreement as though fully set forth herein. The Bank shall comply fully with and be bound by all of the provisions that apply to this Agreement under such Chapters of the San Francisco Administrative Code, including but not limited to the remedies provided in such Chapters. Without limiting the foregoing, the Bank understands that pursuant to Section 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 Agreement may be assessed against the Bank and/or deducted from any payments due the Bank; provided, however, that such damages shal l not be set off against the payment of rental or other contract related to Commercial Paper Notes or other debt obligations of the City.
(c) Limitations on Contributions . Through execution of this Agreement, the Bank acknowledges that it is familiar with Sect ion 1.126 of the City’ s Campaign and Governmental Conduct Code, which prohibits any person who contracts with the City, including the Commission, for the rendition of personal services, for the furnishing of any material, supplies or equipment, for the sal e 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 Bank acknowledges that the foregoing restriction applies only if the contract or combination or series of contracts approved by the same indi vidual or board in a fiscal year have a total anticipated or actual value of $50,000 or more. The Bank further acknowledges that the prohibition on contributions applies to each prospective party to the contract; each member of the Bank’ s board of director s; the Bank ’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 Bank; any subcontractor listed in the bid or contract; and any committee that is s ponsored or controlled by the Bank. Additionally, the Bank acknowledges that the Bank must inform each of the persons described in the preceding sentence of the prohibitions contained in Section 1.126 of the City’s Campaign and Governmental Conduct Code.
(d) MacBride Principles Northern Ireland . Pursuant to San Francisco Administrative Code Section 12F.5, the City 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 urges San Francisco companies to do business with corporations that abide by the MacBride Principles. By signing below, the person executing this Agreement on behalf of the Bank acknowledges and agrees that he or she has read and understood this section.
(e) Conflict of Interest. Through its execution of this Agreement, the Bank hereby acknowledges that it is familiar with the provision of Section 15.103 of the City’ s Charter, Article III, Chapter 2 of City ’s Campaign and Governmental Conduct Code, and Section 87100 4886-4749-3705.4

Exhibit D-3
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 constitutes a violation of said provisions and agrees that it will immediately notify the City if it becomes aware of any such fact during the term of this Agreement.
(f) Earned Income Credit ( “EIC”) Forms . San Francisco Administrative Code section 12O requires that employers provide their employees with IRS Form W -5 (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.
(i) The Bank shall provide EIC Forms to each Eligible Employ ee at each of the following times: (A) within thirty days following the date on which this Agreement becomes effective (unless the Bank has already provided such EIC Forms at least once during the calendar year in which such effective date falls); (B) prom ptly after any Eligible Employee is hired by the Bank; and (C) annually between January 1 and January 31 of each calendar year during the term of this Agreement. (ii) Failure to comply with any requirement contained in the immediately preceding paragraph shall constitute a material breach by the Bank of the terms of this Agreement. If, within thirty days after the Bank receives written notice of such a breach, the Bank fails to cure such breach or, if such breach cannot reasonably be cured within such period of thirty days, the Bank 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 Agreement or under applicable law. (iii) Any subcontract entered into by the Bank shall require the subcontractor to comply, as to the subcontractor ’s Eligible Employees, with each of the terms of this Section.
(iv) Capitalized terms used in this Section and not defined in this Agreement shall have the meanings assig ned to such terms in Section 12O of the San Francisco Administrative Code.
(g) Local Business Enterprise Utilization; Liquidated Damages. (i) The LBE Ordinance. The Bank 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 Bank ’s obligations or liabilities, or materially diminish the Bank’s rights, under this Agreement. Such provisions of the LBE Ordinance are incorporated by reference and made a part of this Agreement as though fully set forth in this section. The Bank’ s willful failure to comply with any applicable pro visions of the LBE Ordinance is a material breach of the Bank ’s obligations under this Agreement and shall entitle City, subject to any applicable notice and cure provisions set forth in this Agreement, to exercise any of the remedies provided for under this Agreement, under the 4886-4749-3705.4

Exhibit D-4
LBE Ordinance or otherwise available at law or in equity, which remedies shall be cumulative unless this Agreement expressly provides that any remedy is exclusive.

In addition, the Bank shall comply fully with all other applicable l ocal, state and federal laws prohibiting discrimination and requiring equal opportunity in contracting, including subcontracting.
(ii) Compliance and Enforcement. If the Bank willfully fails to comply with any of the provisions of the LBE Ordinance, the rules a nd regulations implementing the LBE Ordinance, or the provisions of this Agreement pertaining to LBE participation, the Bank shall be liable for liquidated damages in an amount equal to the Bank’ s net profit on this Agreement, or 10% of the total amount of this Agreement, 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 Bank authorized in the LBE Ordinance, including declaring the Bank to be irresponsible and ineligible to contract with the City for a period of up to five years or revocation of the Bank’ s LBE certification. The Director of HRC will determine the sanctions to be imposed, including the amount of liquidated damages, after investigation pursuant to the San Francisco Administrative Code Section 14B.17.

By entering into this Agreement, the Bank acknowledges and agrees that any liquidated damages assessed by the Director of the HRC shall be payable to City upon demand. The Bank further acknowledges and agrees that any liquidated damages assessed may be withheld from any monies due to the Bank on any contract with City.

The Bank 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 Agreement, and shall make such records available for audit and inspection by the Director of HRC or the Controller upon request.
(h) Drug-Free Workplace Policy. The Bank 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 Com mission or City premises. The Bank agrees that any violation of this prohibition by the Bank, its employees, agents or assigns will be deemed a material breach of this Agreement.
(i) Compliance with Americans with Disabilities Act. The Bank 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 Bank shall provide the services specified in this Agreement in a manner that complies with the ADA and any and all other applicable federal, state and local disability rights legislation. The Bank agrees not to discriminate against disabled persons in the provision of services, benefits or activities provided under this Agreement and further agrees that any violation of this prohibition on the part of the Bank, its employees, agents or assigns will constitute a material breach of this Agreement.
4886-4749-3705.4

Exhibit D-5
(j) Sunshine Ordinance . In accordance with San Francisco Administrative Code Section 67.24(e), contracts, contractors ’ bids, responses to solicitations and all other records of communications between the Commission or the 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. (k) Requiring Minimum Compensation for Covered Employees. (i) The Bank 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 Agreement as though fully set forth. The text of the MCO is available on the web at www.sfgov.org/olse/mco. A partial listing of some of the Bank’ s obligations under the MCO is set forth in this Section. The Bank is required to comply with all the provisions of the MCO, irrespective of this listing of obligations in this Section.
(ii) T
he MCO requires the Bank to pay the Bank’ 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 Bank is obligated to keep informed of the then- current requirements. Any subcontract entered into by the Bank 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. It is the Bank ’s obligation to ensure that any subcontractors of any tier under this Agreement comply with the requirements of the MCO. If any subcontractor under this Agreement fails to comply, City may pursue any of the remedies set forth in this Section against the Bank.
(iii) The Bank 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. (iv) The Bank shall maintain employee and payroll records as required by the MCO. If the Bank fails to do so, it shall be presumed that the Bank paid no more than the minimum wage required under State law.
(v) The City is authorized to inspect the Bank ’s job sites and conduct interviews with employees and conduct audits of the Bank. (vi) The Bank’s commitment to provide the Minimum Compensation is a material element of the City ’s consideration for this Agreement. The City in its sole discretion shall determine whether such a breach has occurred. The City and the public 4886-4749-3705.4

Exhibit D-6
will suffer actual damage that will be impractical or extremely difficult to determine if the Bank fails to comply with these requirements. The Bank 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 Bank ’s noncompliance. The procedures governing the assessment of liquidated damages shall be those set forth in Section 12P.6.2 of Chapter 12P.
(vii) The Bank 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 Agreement for violating the MCO, the Bank fails to cure such breach or, if such breach cannot reasonably be cured within such period of 30 days, the Bank 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. (viii) The Bank represents and warrants that it is not an entit y that was set up, or is being used, for the purpose of evading the intent of the MCO. (ix) The City may conduct random audits of the Bank. Random audits shall be (A) noticed in advance in writing; (B) limited to ascertaining whether Covered Employees are paid at least the minimum compensation required by the MCO; (C) accomplished through an examination of pertinent records at a mutually agreed upon time and location within ten days of the written notice; and (D) limited to one audit of the Bank every two years for the duration of this Agreement. Nothing in this Agreement is intended to preclude the City from investigating any report of an alleged violation of the MCO.
(l) Requiring Health Benefits for Covered Employees. Unless exempt, the Bank 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 Agreement as though fully set forth herein. The text of the HCAO is available on the web at http://www.sfgov.org/lwlh.htm . Capitalized terms used in this Section and not defined in this Agreement shall have the meanings assigned to such terms in Chapter 12Q.
(i) F or each Covered Employee, the Bank shall provide the appropriate health benefit set forth in Section 12Q.3 of the HCAO. If the Bank chooses to offer the health plan option, such health plan shall meet the minimum standards set forth by the San Francisco Health Commission.
4886-4749-3705.4

Exhibit D-7
(ii) Notwithstanding the above, if the Bank is a small business as defined in Section 12Q.3(d) of the HCAO, it shall have no obligation to comply with part (i) above.
(iii) The Bank’ s failure to comply with the HCAO shall constitute a material breach of this Agreement. The City shall notify the Bank if such a breach has occurred. If, within 30 days after receiving City ’s written notice of a breach of this Agreement for violating the HCAO, the Bank fails to cure such breach or, if such breach cannot reasonably be cured within such period of 30 days, the Bank fails to commence efforts to cure within s uch period, or thereafter fails diligently to pursue such cure to completion, City shall have the right to pursue the remedies set forth in Section 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.
(iv) Any subcontract entered into by the Bank 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. The Bank 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 impos ed the requirements of the HCAO on subcontractor through the subcontract. The Bank 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 aga inst the Bank based on the subcontractor’s failure to comply, provided that City has first provided the Bank with notice and an opportunity to obtain a cure of the violation. (v) The Bank shall not discharge, reduce in compensation, or otherwise discriminate against any employee for notifying City with regard to the Bank’ 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.
(vi) The Bank 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. (vii) The Bank shall maintain employee and p ayroll 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. (viii) The Bank shall keep itself informed of the current requirements of the HCAO.
(ix) The Bank 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.
4886-4749-3705.4

Exhibit D-8
(x) The Bank shall provide City with access to records pertaining t o compliance with HCAO after receiving a written request from City to do so and being provided at least ten business days to respond.
(xi) The Bank shall allow City to inspect the Bank’ s job sites and have access to the Bank ’s employees in order to monitor and determine compliance with HCAO.
(xii) The City may conduct random audits of the Bank to ascertain its compliance with HCAO. The Bank agrees to cooperate with City when it conducts such audits.
(xiii) If the Bank is exempt from the HCAO when this Agreement is executed because its amount is less than $25,000 ($50,000 for nonprofits), but the Bank later enters into an agreement or agreements that cause the Bank ’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 Bank and the City to be equal to or greater than $75,000 in the fiscal year.
(m) Prohibition on Political Activity w ith City Funds . In accordance with San Francisco Administrative Code Chapter 12.G, the Bank 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 Agreement. The Bank 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 and provisions of Chapter 12.G are incorporated herein by this reference. In the event the Bank violates the provisions of this section, the City may, in addition to any other rights or remedies available hereunder, (i) terminate this Agreement, and (ii) prohibit the Bank from biddin g on or receiving any new City contract for a period of two (2) years. The Controller will not consider the Bank’s use of profit as a violation of this section. (n) 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 disres pect 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 its residents, and to prevent the further spread of graffiti.

The Bank shall remove all graffiti from any real property owned or leased by such Bank in the City and County of San Francis co within forty -eight (48) hours of the earlier of such Bank’s (i) discovery or notification of the graffiti or (ii) receipt of notification of the graffiti from the Department of Public Works. This Section is not intended to require any Bank to breach any 4886-4749-3705.4

Exhibit D-9
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: (A) 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 (B) 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.) o r as a work of visual art under the Federal Visual Artists Rights Act of 1990 (17 U.S.C. Section 101 et seq.).

Any failure of the Bank to comply with this Section of this Agreement shall constitute a material breach of this Agreement.
(o) Food Service Waste Re duction Requirements . The Bank 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 Agreement as though fully set forth. This provision is a material term of this Agreement. By entering into this Agreement, the Bank agrees that if it breaches this provision, the City will suffer actual damages that will be impractical or extremely difficult to determine; further, the Bank agrees that the sum of one hundred dollars ($100) liquidated damages for the first breach, two hundred dollars ($200) liquidated damages for the second breach in the same year, and five hundred dollars ($500) liquidated damages for subsequent breaches in the same year is reasonable estimate of the damage that the City will incur based on the violation, established i n light of the circumstances existing at the time this Agreement was made. Such amount shall not be considered a penalty, but rather agreed monetary damages sustained by the City because of such Bank ’s failure to comply with this provision.
(p) Preservative-treated Wood Containing Arsenic . The Bank may not purchase preservative-treated wood products containing arsenic in the performance of this Agreement 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 Bank may purchase preservative-treated wood products on the list of environmentally preferable alterna tives prepared and adopted by the Department of the Environment. This provision does not preclude the Bank 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. 4886-4749-3705.4

Exhibit D-10
(q) Nondisclosure of Private Information. The Bank agrees to comply fully with and be bound by all of the provisions of Chapter 12M of the San Francisco Administrative Code (the ”Nondisclosure of Private information Ordinance ”), including the remedies provided.

The provisions of the Nondisclosure of Private Information Ordinance are incorporated herein by reference and made a part of this Agreeme nt as though fully set forth. Capitalized terms used in this section and not defined in this Agreement shall have the meanings assigned to such terms in the Nondisclosure of Private Information Ordinance. Consistent with the requirements of the Nondisclosure of Private Information Ordinance, the Bank agrees to all of the following:
(i) Neither the Bank nor any of its Subcontractors shall disclose Private Information obtained from the City in the performance of this Agreement to any other Subcontractor, person, or other entity, unless one of the following is true:
(1) the disclosure is authorized by this Agreement;
(2) the Bank received advance written approval from the Contracting Department to disclose the information; or
(3) the disclosure is required by law or judicial order. (ii) Any disclosure or use of Private Information authorized by this Agreement shall be in accordance with any conditions or restrictions stated in this Agreement. Any disclosure or use of Private Information authorized by a Contracting Department shall b e in accordance with any conditions or restrictions stated in the approval.
(iii) Private Information shall mean any information that: (1) could be used to identify an individual, including without limitation, name, address, social security number, medical information, financial information, date and location of birth, and names of relatives; or (2) the law forbids any person from disclosing. (iv) Any failure of the Bark to comply with the Nondisclosure of Private Information Ordinance shall be a material breach of th is Agreement. In such an event, in addition to any other remedies available to it under equity or law, the City may terminate this Agreement, debar the Bank, or bring a false claim action against the Bank. (r) Proprietary or Confidential Information of City . The Bank agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its and its Affiliates’ directors, officers, employees and agents, including accountants, legal counsel and other advisors (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (b) to the extent requested by any regulatory authority, (c) to th e extent required by applicable laws or regulations or by any subpoena or similar legal process, (d) to any other party to this Agreement, (e) in connection with the exercise of any remedies hereunder or any suit, action or proceeding relating to this Agre ement or the enforcement of rights hereunder, (f) subject to an agreement containing provisions substantially the same as those of this Section, to (i) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Agreement or (ii) any actual or 4886-4749-3705.4

Exhibit D-11
prospective counterparty (or its advisors) to any swap or derivative transaction relating to the C
ity and its obligations, (g) with the consent of the City or (h) to the extent such Information (i) becomes publicly available other than as a result of a breach of this Section or (ii) becomes available to the Bank on a nonconfidential basis from a source other than the City. For the purposes of this Section, “ Information” means all information received from the City relating to the City or its business, other than any such information that is available to the Bank on a nonconfidential basis prior to disclosure by the City; provided that, in the case of information received from the City after the date hereof, such information is clearly identified at the time of delivery as confidential. Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information. (s) Subm
itting False Claims; Monetary Penalties . Pursuant to San Francisco Administrative Code Section 21.35, 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 f alse 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:
(i) knowingly presents or causes to be presented to an officer or employee of the City a false claim or request for payment or approval; (ii) 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; (iii) conspires to defraud the City by getting a false claim allowed or paid by the City; (iv) 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 (v) 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.
(t) Subcontracting. Except as otherwise provided in this Agreement, the Bank is prohibited from subcon tracting this Agreement or any part of it unless such subcontracting is first approved by City in writing. Neither party shall, on the basis of this Agreement, 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. (u) 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.
(v) City a Third Party Beneficiary. The City is hereby designated as a third party beneficiary for the purpose of enforcing all of the obligations of the Bank contained in this Exhibit D to this Agreement.
4886-4749-3705.4

Exhibit E-1

EXHIBIT E

LIST OF QUALIFIED DEALERS

ALAMO CAPITAL
BACKSTROM MCCARLEY BERRY & CO., LLC

BANK OF AMERICA MERRILL LYNCH
BARCLAYS CAPITAL INC.

BLAYLOCK BEAL VAN, LLC
CASTLEOAK SECURITIES, L.P.

CITIGROUP INC.

FIDELITY CAPITAL MARKETS
GOLDMAN SACHS & CO.

HUTCHINSON, SHOCKEY, ERLEY & CO.

JANNEY MONTGOMERY SCOTT

JEFFERIES LLC

JP MORGAN SECURITIES LLC

LOOP CAPITAL MARKETS LLC
MESIROW FINANCIAL, INC.

MITSUBISHI UFJ SECURITIES (USA), INC.

MORGAN STANLEY & CO. LLC
PIPER JAFFRAY & CO.

RBC CAPITAL MARKETS, LLC
SIEBERT BRANDFORD SHANK & CO., LLC
STERN BROTHERS & CO.

STIFEL NICOLAUS & COMPANY

STINSON SECURITIES, LLC
U.S. BANCORP INVESTMENTS, INC.

WELLS FARGO SECURITIES LLC
WILLIAM BLAIR & COMPANY, L.L.C.

4879-9934-2665.3

NP DRAFT 1/18

FEE AGREEMENT
March __, 2023
Public Utilities Commission of the City
and County of San Francisco
525 Golden Gate Avenue
San Francisco, CA 94102
Ladies and Gentlemen:

Reference is hereby made to that certain Reimbursement Agreem ent dated as of March 1, 2023 (as may be amended, supplemented, restated or otherwise modified from time to time, the “ Agreement”), between the Public Utilities Commission of the City and County of San Francisco (the “Commission ”) and Bank of America, N.A. (the “ Bank”), relating to the Commission’s Commercial Paper Notes (Power Series), Series A -2 (Tax-Exempt). Capitalized terms not otherwise defined herein shall have the meanings set forth in the Agreement.

The purpose of this Fee Agreement is to confirm the agreement between the Bank and the Commission with respect to the Commitment Fees (as defined below) and certain other fees payable by the Commission to the Bank. This Fee Agreement is the Fee Agreement referenced in the Agreement.

In order to induce the Bank to enter into the Agreement, the Commission agrees to make the following payments to the Bank at the following times:
(1) A commitment fee (the “Commitment Fee”) which shall be determined on a daily basis by multiplying (a) the Stated Amount at 5:00 p.m., Eastern time, on each day, by (b) the applicable Commitment Fee Rate (as defined below) in effect for such day, expressed as a decimal, and by (c) a fraction equal to 1/360. As used herein, “Commitment Fe e Rate” means, initially,

0.29%, provided that in the event that any Rating (as defined below) is downgraded below “AA-” by S&P or below “AA-” by Fitch to a level included in the grid below, the Commitment Fee Rate shall be equal to the per annum percentage set forth in the grid below, expressed as a decimal, opposite the level that contains the lowest Rating (it being understood that Level 1 contains the highest Ratings and Level 5 contains the lowest Ratings):

LEVEL S&P RATING FITCH RATING COMMITMENT FEE RATE
Level 1: AA- or above AA- or above 0.29%
Level 2: A+ A+ 0.39%
Level 3: A A 0.59%
Level 4: A- A- 0.79%
Level 5: BBB+ and Below BBB+ and Below 2.29%
As used herein, the “Rating” means, with respect to S&P or Fitch, the lowest long -term, unenhanced rating assigned by such Rating Agency to any Bonds. Notwithstanding the foregoing, (a) in the event that the Rating is withdrawn, suspended or otherwise unavailable from S&P or Fitch for credit related reasons and/or (b) upon the occurrence and during the continuance of an 4879-9934-2665.3

- 2 -

Event of Default, the Commitment Fee Rate shall be increased in both cases by 1.50% per annum from the Commitment Fee Rate in effect immediately prior thereto. Any chan ge in the Commitment Fee Rate resulting from a change in the Rating shall be and become effective as of and on the date of the announcement of the change in the Rating. References to the Rating above is a reference to the rating category of S&P and Fitch a s presently determined by S&P and Fitch and in the event of adoption of any new or changed rating system by S&P or Fitch, the Ratings from S&P or Fitch, as applicable, shall be deemed to refer to the rating category under the new rating system which most c losely approximates the applicable rating category as currently in effect.

In connection with the Commitment Fees payable pursuant to this Section 1.1 for any fee period, the Bank hereby agrees to use its best efforts to deliver an invoice to the Commissio n for such Commitment Fees at least thirty (30) days in advance of the payment due date; provided, however, that the failure to provide any such invoice shall not limit or otherwise affect the obligation of the Commission to pay such Commitment Fees when due.

The Commitment Fee shall be payable in immediately available funds quarterly in arrears commencing on the first Business Day of April 2023, and, thereafter, on the first Business Day of each July, October , January and April and thereafter to the Stated Expiration Date, and on the Stated Expiration Date, in all cases, covering the period from the date of the immediately preceding payment to such Business Day. The Bank’s determination of the Commitment Fee pursuant hereto shall be conclusive absent manifest error.
(2) A fee of $250 plus the Bank’s customary wire transfer and courier costs in respect of each drawing made under the Letter of Credit and honored by the Bank, which fee, wire transfer and courier cost shall be earned on the date such drawing is honored by the Bank and, unless paid to the Bank at the time each Drawing is reimbursed, shall be paid in arrears on the first Payment Date that occurs after the date such drawing is honored by the Bank. (3) A transfer fee equal to $3,000 upon each transfer of the Letter of Credit in accordance with its terms. A transfer shall be deemed to have occurred whenever the Issuing and Paying Agent is replaced, substituted or changed as a result of sale, assignment, merger, consolidation, reorganization or an act of law. A transfer shall not be deemed to have occurred solely as a result of a change in the legal name of the Issuing and Paying Agent. (4) At the time any amendment, modification, waiver, supplement or restatement of or consent sought in respect of, the Agreement, the Basic Documents and any other documents delivered under the Agreement is sought by any person other than the Bank, a fee of $3,000 plus attorneys’ fees and expenses, which fee shall be earned and payable whether or not any such amendment, modification, waiver, supplement or restatement is executed or consent granted. Fees for complex amendments, modifications, waivers, supplements, restatements or consents shall be negotiated on a case-by-case basis.
(5) The Commission shall pay fees of Bank Counsel to the Bank, Nixon Peabody LLP, a fee of $22,500 in connection with the negotiation and documentation of the Letter of Credit and the Reimbursement Agreement pursuant to an invoice provided by Bank Counsel to the Commission.
4879-9934-2665.3

- 3 -

All amounts paid pursuant to this Fee Agreement shall be non -refundable and payable in immediately available funds. Computations of the Commitment Fee shall be made on the basis of a 360-day year and actual days elapsed. All amounts paid pursuant to this Fee Agreement shall be paid in the manner and to the account set forth in the Agreement.

This Fee Agreement may not be amended or waived except by an instrument in writing signed by the Bank and the Commission.

The provisions of Section 7.14 of the Agreement shall be incorporated by this reference into this Fee Agreement as if such provisions were set forth in their entirety except that references to “this Agreement” shall mean this Fee Agreement and references to “hereunder” or “hereof’ shal l mean under this Fee Agreement or of this Fee Agreement.

This Fee Agreement may be executed in any number of counterparts, each of which shall be an original, and all of which, when taken together, shall constitute one agreement. Delivery of an executed signature page of this Fee Agreement by electronic transmission shall be effective as delivery of a manually executed counterpart hereof.

This Fee Agreement is delivered to the Commission on the understanding that neither this Fee Agreement nor any of its t erms shall be disclosed, directly or indirectly, to any financial institution other than the Issuing and Paying Agent unless such disclosure is made to such financial institution in accordance with the terms of the California Public Records Act. [SIGNATURES BEGIN ON THE FOLLOWING PAGE]

[Signature Page to Fee Agreement]
IN WITNESS WHEREOF, the parties hereto have caused this Fee Agreement to be duly executed and delivered by their respective officers thereunto duly authorized on the date first set forth above.

PUBLIC UTILITIES COMMISSION OF THE

CITY AND COUNTY OF SAN FRANCISCO
By:

Name: Nikolai J. Sklaroff
Title: Capital Finance Director
BANK OF AMERICA, N.A.

By:

Name:

Title:

Power Enterprise CP Program
4895-2993-7482.2
FORM OF:

DEALER AGREEMENT
(Dated as of [____] [_], 2023)
THIS DEALER AGREEMENT (this “Agreement”) is entered into as of [____] [_], 2023 by and between the Public Utilities Commission (the “Commission”) of the City and County of San Francisco (the “City”) and [Barclays Capital Inc.][Goldman Sachs & Co. LLC][RBC Capital Markets, LLC] (“[Barclays][Goldman][RBC]”). [Barclays][Goldman][RBC] is referred to as the “Dealer” herein.

RECITALS
The Commission proposes to issue and reissue its Commercial Paper Notes (Power Series), Series A -1 (the “Series A -1 Notes”) or the Series A -2 Notes (the “Series A -2 Notes”), in the maximum amount of $250,000,000 at any time outstanding (the “Notes”). The Notes are issued pursuant to Ordinance No. 203-98, adopted by the Board of Supervisors of the City and County of San Francisco (the “Board”) on June 8, 1998, and signed by the Mayor of the City (the “Mayor”) on June 19, 1998, as amended by Ordinance No. 270- 06, adopted by the Board on October 24, 2006, and signed by the Mayor on October 31, 2006, Resolution No. 15- 0183, adopted by th e Commission on September 8, 2015, Resolution No. 427- 15, adopted by the Board on November 17, 2015, and signed by the Mayor on November 25, 2015, Resolution No. 18- 0188, adopted by the Commission on November 13, 2018, Ordinance No. 2- 19, adopted by the Board on January 15, 2019 and signed by the Mayor on January 18, 2019, and Resolution No. [_____], adopted by the Commission on February [__], 2023. The ordinances above are collectively referred to herein as the “Ordinances”. The resolutions above are collectively referred to herein as the “Resolutions”.

The Notes are issued pursuant to the terms of the First Amended and Restated Issuing and Paying Agent Agreement, dated as of March 1, 2019 (the “Issuing and Paying Agent Agreement”), by and between U.S. Bank Trust Company, National Association (as successor in interest to U.S.

Bank National Association) (the “Issuing and Paying Agent”) and the Commission, as amended and supplemented.

The payment of principal and interest on the Series A -1 Notes will be supported by an irrevocable direct-pay letter of credit (the initial “Series A-1 Letter of Credit”) issued by Bank of America, N.A. (the initial “Series A -1 Bank”), pursuant to the terms of the Reimbursement Agreement, dated as of December 1, 2015, as amended by the First Amendment to Reimbursement Agreement, dated as of March 1, 2019 (together, the initial “Series A -1 Reimbursement Agreement”), each by and between the Commission and the Series A-1 Bank, and the payment of principal and interest on the Series A-2 Notes will be supported by an irrevocable direct-pay letter of credit (the initial “Series A -2 Letter of Credit”) issued by Bank of America, N.A. (the initial “Series A-2 Bank”), pursuant to the terms of the Reimbursement Agreement, dated as of March 1, 2023 (the initial “Series A-2 Reimbursement Agreement”), by and between the Commission and the Series A-2 Bank.
[Barclays][Goldman][RBC] has agreed to act as a non-exclusive Dealer for the Notes and to perform the duties imposed by this Agreement.
2 4895-2993-7482.2

AGREEMENTS
NOW, THEREFORE, for and in consideration of the covenants herein made, and subject to the conditions herein set forth, the parties hereto agree as follows:

Section 1. Definitions. Unless the context clearly indicates a contrary meaning, each capitalized term used in this Agreement shall have the meaning given to that term in the Issuing and Paying Agent Agreement.

In Sections 3, 4, 7, 8, 9 and 11 of this Agreement, “Bank” means the Series A -1 Bank or the Series A -2 Bank, as applicable, “Termination Date” mean s the stated termination date established pursuant to the applicable Letter of Credit, “Letter of Credit” means the Series A -1 Letter of Credit or the Series A-2 Letter of Credit, as applicable, and “Reimbursement Agreement” means the Series A -1 Reimbursement Agreement or the Series A -2 Reimbursement Agreement, as applicable.

Section 2. Appointment of Dealer; Acceptance; Allocations; Evaluations. (a) Subject to the terms and conditions set forth in this Agreement, the Commission hereby appoints [Barclays][Goldman][RBC] as a Dealer for the Notes, and [Barclays][Goldman][RBC] hereby accepts such appointment and accepts and agrees to perform the duties and obligations imposed upon it as a Dealer under this Agreement, subject to the terms, conditions and limitations set forth in this Agreement. (b) The Dealer shall act as a non-exclusive Dealer with respect to the Notes and shall be responsible to solicit and arrange sales of the Notes allocated to it, including, without limitation, the initial placement of such Notes and subsequent sales, establishing the rates and maturities of such Notes from time to time. The Dealer acknowledges that the Commission may enter into agreements with other dealers in connection with the offering and sale of the Notes. The Commission reserves the right to allocate and reallocate Notes among the Dealer and the other dealers with respect to the Notes at any time in its sole discretion for any reason.
(c) The Dealer acknowledges that the Commission intends to conduct a regular evaluation of the Dealer. Such evaluation will consider, among other things, an analysis of interest rates on the Notes allocated hereunder and managed by the Dealer in comparison to the interest rates provided by other dealers.
(d) The Dealer acknowledges that the Commission has delivered to it executed copies of the Resolutions, the Issuing and Paying Agent Agreement, the Letter of Credit, the Reimbursement Agreement and a Certificate of Designated Representatives in accordance with Section 6 hereof.
(e) The Dealer hereby agrees that it will comply with all statutes and regulations applicable to it, including without limitation, all applicable securities laws and requirements of the Securities Exchange Commission, the Municipal Securities Rulemaking Board or any regulatory body having jurisdiction over the Dealer, non- 3 4895-2993-7482.2
compliance with which would adversely affect the Notes or the Commission’s Note program.

Section 3. Sale and Purchase of Notes.
(a) The Dealer acknowledges that the terms and conditions of the Notes are set forth in the Issuing and Paying Agent Agreement and that in particular, the Notes (i) shall be issued in denominations of $100,000 and in integral multiples of $1,000 in excess thereof, (ii) shall bear interest payable at maturity at an annual rate (calculated on the basis of a year consisting of 365 or 366 days, as applicable, and the actual number of days elapsed) payable at maturity which shall not in any event exceed the Maximum Interest Rate of 12%, (iii) shall mature on a Business Day not more than 270 days a fter their respective issuance dates, but in no event later than the Business Day immediately preceding the Termination Date, and (iv) shall be sold at a price equal to 100% of the principal amount thereof.
(b) The Dealer shall use its best efforts, consistent with commercial customs and practices, to solicit and arrange sales of the Notes at such rates and maturities as may prevail from time to time in the market in accordance with Section 4 below, and, in any event, the Dealer shall use its best efforts to solicit and arrange sales of the Notes up to the Maximum Interest Rate, as required by the applicable Issuing and Paying Agent Agreement, and irrespective of whether the rate for unreimbursed drawings under the Letter of Credit or unreimbursed advances under the Reimbursement Agreement is less than the Maximum Interest Rate. The Dealer agrees to make a good faith effort to notify Commission if for any reason it believes that it will not be able to sell the Notes on the date such Notes are to be issued. The Dealer and the Commission agree that any Notes which the Dealer may purchase or for which the Dealer may arrange the sale, will be purchased or sold on the terms and conditions and in the manner provided in the Issuing and Paying Agent Agreement and this Agreement. Anything herein to the contrary notwithstanding, to the extent of any conflict between the provisions hereof and the Issuing and Paying Agent Agreement, the provisions of the Issuing and Paying Agent Agreement shall be controlling.

Section 4. Transactions in Notes. All transactions in Notes between the Dealer and the Commission shall be in accordance with the Resolutions, the Ordinances, the Issuing and Paying Agent Agreement, this Agreement, the Letter of Credit, the Reimbursement Agreement and with the customs and practices in the commercial paper market regarding settlement and delivery formally adopted in writing from time to time by the New York Clearinghouse, to the extent not inconsistent with the Issuing and Paying Agent Agreement. As early as possible, but not later than 11:00 a.m. (New York City time) on the date on which any Notes are to be issued, the Dealer shall notify the Commission and the Director of the City’s Office of Public Finance of the City (which shall be deemed to include his or her designee) of the proposed final maturities, prices and interest rates (which interest rates shall not exceed the Maximum Interest Rate) at which the Dealer has arranged for the sale of or will purchase the Notes, and provide the Commission and the Dire ctor of the City’s Office of Public Finance with any other information as required for delivery of such Notes. The Dealer shall not be obligated to purchase any Notes unless and until agreement, as described in the following sentence, has been reached in each case on the proposed final maturities, 4 4895-2993-7482.2
prices and interest rates and the Dealer has agreed to such purchase. Not later than 11:45 a.m. (New York City time) on the date of issuance of the Notes, the Commission and the Director of the City’s Office of Public Finance may approve or disapprove of such final maturities, prices and interest rates (provided that if either the Commission or the Director of the City’s Office of Public Finance does not provide notice to the Dealer of disapproval then the Commission or the Director of the City’s Office of Public Finance, as applicable, shall be deemed to have approved such terms) and such Dealer shall either (a) confirm each transaction made with or arranged by it or (b) notify the Commission and the Issuing and Paying Agent of the difference, if any, between the amount of maturing Notes and the amount of Notes which the Dealer has arranged to sell or has agreed to purchase. Such confirmation or notification shall be given by telephone (or by other telecommunications medium acceptable to the Commission) and confirmed in writing to the Commission and the Issuing and Paying Agent in the Dealer’s customary form.

Section 5. Payment for Notes . The Dealer shall pay for the Notes purchased by the Dealer or sold by the Dealer in immediately available funds by 12:00 p.m. (New York City time) on the Business Day such Notes are delivered to the Dealer. All Notes will be sold at par, and will be executed in the manner provided for in the Issuing and Paying Agent Agreement.

Section 6. Designated Representative. Note transactions with the Commission, pursuant to Section 4 hereof, shall be with the Director of the City’s Office of Public Finance and any one of the officers or employees of the Commission or the City who are designated as a Design ated Representative by a certificate signed by the General Manager of the Commission. The Commission will deliver to the Dealer a Certificate of Designated Representatives in the form appended to the Issuing and Paying Agent Agreement as Exhibit B. The General Manager and the Director of the City’s Office of Public Finance agree to provide the Dealer with a revised Certificate of Designated Representatives in substantially said form when and as required by changes in the Designated Representatives. The Dealer may rely upon such Certificate of Designated Representatives unless and until otherwise notified in writing by the General Manager or the Director of the City’s Office of Public Finance.

The Controller of the City shall, throughout the term of this a greement, be authorized to initiate Note transactions, notwithstanding any provision hereof or future amendment hereof to the contrary.

Section 7. Certain Representations of the Commission. The Commission represents to the Dealer as follows:
(a) As of the date of each issuance of Notes: (i) the Commission has full power and authority to issue the Notes, to enter into, perform and observe the covenants and agreements on its part contained in this Agreement, the Issuing and Paying Agent Agreement, the Letter of Credit an d the Reimbursement Agreement (collectively, the “Documents”); (ii) such Documents have been duly authorized, executed and delivered by the Commission; and such Documents constitute legally valid and binding obligations of the Commission, in accordance with their terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors’ rights generally and subject, as to enforceability, to the general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law). 5 4895-2993-7482.2
(b) As of the date of each issuance of Notes, the Resolutions are in full force and effect and have not been repealed, modified or amended since their adoption. (c) As of the date of each issuance of Notes, the Ordinances are in full force and effect and has not been repealed, modified or amended since their adoption. (d) As of the date of each issuance of Notes, such Notes have been duly authorized and executed by the Commission, and when authenticated and delivered by the Issuing and Paying Agent, will be in conformity with, and entitled to the benefits of the Resolutions and the Issuing and Paying Agent Agreement. (e) The then- current Offering Memorandum related to the Notes, as supplemented or amended (the “Offering Memorandum”) will not as of its respective date, and as of each date of issuance or resale of one or more Notes pursuant to an Issuance Request, contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading (provided that the Commission makes no representation with respect to information therein regarding the Bank, the Letter of Credit, the Reimbursement Agreement, the Dealer or any other dealers, the Issuing and Paying Agent and DTC and its book-entry only system.)
(f) The Commission will cooperate with the Dealer in arranging for the qualification of the Notes for sale and the determination of their eligibility for investment under the laws of such jurisdictions in the United States as the Dealer may designate and will use its best efforts to continue such qualifications in effect so long as the Notes are being offered by the Dealer; provided, however, that the Commission will not be required to execute a special or general consent to service of process or qualify to do business in connection with action taken under this subsection nor will the Commission be required to incur any material expense.
(g) The adoption by the City of the Ordinances and the Resolutions, and the making and performance by the Commission of the other Documents and the Notes do not and will not materially conflict with or result in a material breach or violation of any of the terms or provisions of, or constitute a default under, any resolution, indenture, deed of trust, mortgage commitment, agreement or other instrument to which the Commission is a party or by which the Commission is bound, or any constitutional provision, existing l aw, administrative regulation, court order or consent decree to which the Commission or its property is subject.
(h) The Commission shall not adopt any amendment to the Documents that adversely affects the rights or obligations of the Dealer without the Dealer’s prior written consent.

Section 8. Offering Memorandum and Disclosure.
(a) The Commission shall prepare or cause to be prepared the Offering Memorandum. The Commission shall prepare or cause to be prepared an update to the Offering Memorandum on an annual basis by D ecember 31 of each year (or at any other 6 4895-2993-7482.2
time in the sole discretion of the Commission) if in the judgment of the Commission, the then-existing Offering Memorandum is misleading in any material respect. (b) The Commission shall file on the Electronic Municipal Market Access (“EMMA”) database of the Municipal Securities Rulemaking Board (“MSRB”) or shall provide the Dealer with:
(i) copies of any notices filed by the Commission in accordance with Rule l5c2-12(b)(5)(i)(C) promulgated under the Securities Exchange Act of 1934 with respect to any outstanding revenue bonds, notes or other obligations for borrowed money of the Commission relating to the Power Enterprise (the “Commission Bonds”) promptly following the filing thereof; (ii) copies of annual reports filed by the Commission in accordance with Rule 15c2-12(b)(5)(i)(A) with respect to Commission Bonds promptly following the filing thereof;
(iii) copies of the official statements or other disclosure documents with respect to Commission Bonds promptly following the issuance thereof; (iv) prompt notice and a copy of any amendment to the Issuing and Paying Agent Agreement, or of the substitution, termination or extension of the Letter of Credit;
(v) prompt notice of the occurrence and continuance of an event of default under the Issuing and Paying Agent Agreement or the Reimbursement Agreement;
(vi) prompt notice of the suspension, reduction or withdrawal of the rating on any Commission Bonds or the public announcement of the possibility thereof by the Rating Agencies then rating the Commission Bonds; and (vii) prompt notice of the receipt by the Commission of notification from Bond Counsel that the Commission may not continue to rely on their opinion regarding the validity or tax-exempt status of the Notes. (c) The Commission will furnish the Dealer such documents and information concerning the business, operations and financial condition of the Commission, as the Dealer may from time to time reasonably request.
(d) If in the reasonable opinion of the Dealer, with the c oncurrence of Bond Counsel (or the Commission’s Disclosure Counsel) and the City Attorney, changes in applicable law require that a disclosure document more extensive than the Offering Memorandum be prepared and distributed, the Commission agrees to prepar e such document.
(e) The Dealer shall provide a copy of the Offering Memorandum, as supplemented, amended and updated from time to time, to each person to whom it sells 7 4895-2993-7482.2
Notes prior to or with the delivery of any payment confirmation. The Dealer agrees to promptly post the Offering Memorandum and any supplements thereto, upon receipt from the Commission, to EMMA and will advise customers that the Offering Memorandum, as supplemented, is available from EMMA and the Commission agrees that this shall satisfy the Dealer’s obligations in the previous sentence. The Dealer shall not provide prospective or actual purchasers of the Notes with any written offering materials, disclosure documents or other documents or information in connection with the solicitation of pur chases and sales of the Notes other than the Offering Memorandum and any supplements, amendments or updates thereto and the Issuing and Paying Agent Agreement, the Letter of Credit or the Reimbursement Agreement, as the same may be amended, supplemented or replaced from time to time.
(f) The Commission authorizes the use and distribution of copies of the Offering Memorandum by the Dealer in connection with the sale (or potential sale) of the Notes.

Section 9. Conditions to Dealer’s Obligations. The obligations of the Dealer under this Agreement have been undertaken in reliance on, and shall be subject to, the due performance by the Commission of its obligations and agreements to be performed hereunder and to the accuracy of and compliance with the respective representat ions, warranties, covenants and agreements of the Commission contained herein, in each case on and as of the date of delivery of this Agreement and on and as of each date on which the Notes are to be issued. The obligations of the Dealer hereunder with re spect to each date on which the Notes are to be issued are also subject, in the discretion of the Dealer, to the following further conditions precedent:
(a) The Documents shall be in full force and effect and the Notes to be issued on such date shall have the full benefits of all of the foregoing, all of which shall not have been amended, modified or supplemented in a manner that adversely affects the Dealer, except as may have been agreed to in writing by the Dealer, and there shall be in full force and effect such additional resolutions, agreements, instruments and certificates (including such certificates as may be required by Orrick, Herrington & Sutcliffe LLP, Bond Counsel, regarding the exclusion from gross income of interest on all or a portion of the Notes from federal income tax) and such opinions of counsel, which resolutions, agreements, certificates and opinions of counsel shall be satisfactory in form and substance to the Dealer and there shall have been taken in connection therewith and in connection with the issuance or resale of the Notes all such action as shall, in the opinion of the aforesaid Bond Counsel, be necessary in connection with the transactions contemplated hereby. (b) No Event of Default (as such term is defined in the Reimbursement Agreement) shall have occurred and be continuing; and no event shall have occurred and be continuing which with the passage of time or giving of notice or both, would constitute such an Event of Default.
(c) The Dealer shall have received:
(i) executed copies of the Letter of Credit, the Reimbursement Agreement and the Issuing and Paying Agent Agreement; together, upon request, 8 4895-2993-7482.2
with a copy of the transcript of all proceedings relating to the authorization of the Notes certified by a duly authorized official of the Commission; (ii) an opinion of Orrick, Herrington & Sutcliffe LLP, Bond Counsel, in the form attached as Appendix B to the Offering Memorandum; (iii) a certificate of the Commission executed by any duly authorized official of the Commission, dated as of or prior to such date, to the effect that the information concerning the Commission which is contained in the Offering Memorandum (or other disclosure materials provided by or on behalf of the Commission) is true and correct and does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made therein, in light of the circumstances under which they were made, not misleading; and
(iv) copies of such other documents, certificates and opinions as the Dealer shall have reasonably requested in writing.

Section 10. Compensation to Dealer.
(a) For the services to be performed by the Dealer under this Agreement, the Commission agrees to pay the Dealer an annual fee equal to [4.5][5.0] basis points ([0.045][0.050]%) of the average outstanding principal amount of the Notes managed by the Dealer, payable quarterly in arrears, within 30 days after receipt of the bill for the preceding quarter, commencing with the quarter ending [_________], 20[__]. (b) The Commission’s obligations under this Section 10 which have accrued or arisen prior to the effective date of any termination or expiration of this Agreement shall survive such termination or expiration.

Section 11. Termination or Suspension. This Agreement may be terminated by the Commission at any time with respect to the Dealer and by the Dealer upon not less than 90 days’ prior written notice to the Commission and the Bank, provided that the Dealer may terminate with 60 days’ prior written notice to the Commission and the Bank if other dealers are in place w ith respect to the Notes. Notwithstanding the previous sentence, if the Dealer notifies the Commission and the Bank that it believes the Offering Memorandum (or other disclosure materials provided by the Commission) contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements made therein, in the light of the circumstances under which they were made, not misleading, and the Commission shall fail to cure such defect within 45 days in a manner reasonably satisfactory to the Dealer, the Dealer may suspend its obligations under this Agreement until the Offering Memorandum is appropriately amended or supplemented.

Notwithstanding the foregoing, no such termination or suspension shall affect the rights or obligations of the Commission or the Dealer hereunder arising prior to such termination or suspension. In addition the Dealer may suspend its obligations under this Agreement if any of the rating agencies then rating the Notes shall either (i) downgrade its respective rating assigned to the Notes so that such Notes are not an “Eligible Security” as defined under Rule 2a- 7 of the 9 4895-2993-7482.2
Investment Company Act, or (ii) suspend or withdraw its respective then- current rating assigned to the Notes.

Section 12. Counterparts. This Agreement may be executed in several counterparts, each of which shall be regarded as an original but all of which shall constitute one and the same document.

Section 13. Governing Law; 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 14. Notices. Except as otherwise specifically provided herein, all notices required or provided for under this Agreement shall be in writing and shall be delivered by hand, first class mail (postage prepaid), overnight express delivery or electronic mail, and shall be effective when received at the following addresses or at such other address as a party may designate in a notice delivered to the other part hereto in accordance herewith:

If to the Commission: City and County of San Francisco
Public Utilities Commission
525 Golden Gate Ave., 13
th Floor
San Francisco, California 94102
Tel: (415) 554-3155
Fax: (415) 554-3161
Attention: Chief Financial Officer & Assistant General
Manager, Business Services
E-Mail: [email protected]
With copies to: City and County of San Francisco
Office of Public Finance
City Hall, Room 336
San Francisco, California 94102
Fax: (415) 554-4864
Attention: Nadia Sesay
Director of Public Finance
City and County of San Francisco
Office of the Controller
City Hall, Room 316
San Francisco, California 94102
Fax: (415) 554-7466
Attention: Benjamin Rosenfield
Controller
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If to Dealer: [__________________
__________________
__________________
Attention: __________________
Telephone: __________________
Facsimile Transmission Number: __________________]
Section 15. Assignment. This Agreement shall not be assignable by any party hereto without the prior written consent of the other parties. This Agreement shall inure to the benefit of and shall be binding upon the Commission and the Dealer and their respective successor and assigns. This Agreement shall not be deemed to give any legal or equitable right, remedy or claim to any other person or entity other than the parties hereto.

Section 16. Headings. The section headings hereof have been inserted for convenience of reference only, shall not be part of this Agreement, and shall not be used to construe, define, limit or interpret the meaning of any provision hereof.

Section 17. Severability. If any provision of this Agreement shall be held or deemed by a court of competent jurisdiction to be invalid, inoperative or unenforceable for any reason, such determination shall not affect the validity or enforceability of the remaining provisions hereof.

Section 18. Entire Agreement. This Agreement constitutes the entire agreement between the parties hereto with respect to the matters covered hereby, and supersedes all prior agreements and understandings between the parties. This Agreement shall only be amended, supplemented or modified in a writing signed by all of the parties hereto.

Section 19. No Personal Liability. The Commission, the City and their respective supervisors, members, officers, employees, representatives, agents and attorneys shall not be held personally liable for the execution or performance of this Agreement, or any breach or default of the provisions hereof.

Section 20. City Requirements. The Dealer hereby agrees to the City’s requirements, as provided in Exhibit A attached hereto and incorporated hereby by this reference.

Section 21. Term. The initial term of this Agreement shall be from the date first written above through [____] [_], 20[_]. The initial term of this Agreement may be extended by written instrument signed by the parties hereto, provided that such extension is authorized under the Resolutions and the Ordinances. The Commission shall use its best efforts to notify the Dealer of its intent to terminate or extend this Agreement at least sixty (60) days prior to such termination or extension.

Section 22. Dealing in Notes by the Dealer; No Obligation to Purchase Notes. (a) The Dealer, in its individual capacity, may in good faith buy, sell, own, hold and deal in any of the Notes, including, without limitation, any Notes offered and sold by the Dealer pursuant to this Agreement, and may join in any action which any owner of the Notes may be entitled to take with like effect as if it did not act in any capacity hereunder.

The Dealer may sell any of the Notes at prices above or below par, at any time. The Dealer, 11 4895-2993-7482.2
in its individual capacity, either as principal or agent, may also engage in or be interested in any financial or other transaction with the Commission and may act as depositary, account party, or agent for any committee or body of owners of the Notes or other obligations of the Commission as freely as if it did not act in any capacity hereunder. (b) Nothing in this Agreement shall be deemed to constitute the Dealer as an underwriter of the Notes or to obligate the Dealer to purchase any Notes for its own account at any time.

Section 23. No Advisory or Fiduciary Role; Municipal Advisor Rules. (a) The Commission acknowledges and agrees that (i) the placement of Notes pursuant to this Agreement is an arm’s -length commercial transaction between the Commission and the Dealer; (ii) in connection therewith and with the discussions, undertakings and procedures leading up to the consummation of such transaction, the Dealer is and has been acting solely as a principal and is not acting as the agent, advisor, municipal advisor or fiduciary of the Commission; (iii) the Dealer has not assumed an advisory or fiduciary responsibility in favor of the Commission with respect to the offering contemplated hereby or the discussions, undertakings and procedures leading thereto (irrespective of whether the Dealer has provided other services or is currently providing other services to the Commission on other matters) and the Dealer has no obligation to the Commission with respect to the transactions contemplated hereby except the obligations expressly set forth in this Agreement; (iv) the Dealer and the Commission have different financial interests; and (v) the Commission has consulted its own legal, financial and other advisors to the extent it has deemed appropriate.
(b) The Commission acknowledges that [Barclays][Goldman][RBC] may not be able to perform some of the services the Commission may request of [Barclays][Goldman][RBC] from time to time in co nnection with [Barclays][Goldman][RBC]’s engagement as Dealer to the extent that such services would cause [Barclays][Goldman][RBC] to be considered a “municipal advisor” under SEC Rel.

No. 34- 70462 (Sept. 20, 2013)) (such final rules and to the extent ref erenced therein, Section 975, the “Municipal Advisor Rules”) implementing Section 975 (“Section 975”) of the Dodd-Frank Wall Street Reform and Consumer Protection Act. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and delivered as of the date first above written.

PUBLIC UTILITIES COMMISSION OF THE

CITY AND COUNTY OF SAN FRANCISCO
By:

Dennis Herrera
General Manager
APPROVED AS TO FORM:

DAVID CHIU
City Attorney
By:

Mark D. Blake
Deputy City Attorney
ACKNOWLEDGED:

ANNA VAN DEGNA
Director of Public Finance of the
City and County of San Francisco
By:

Director of Public Finance
[BARCLAYS CAPITAL INC.]
[GOLDMAN SACHS & CO. LLC]
[RBC CAPITAL MARKETS, LLC]
By:

Authorized Signatory

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EXHIBIT A
City Requirements
[TO BE UPDATED]
For purposes of this Exhibit A the term Dealer shall mean [Barclays Capital Inc.][Goldman Sachs & Co. LLC][RBC Capital Markets, LLC].
(a) Tropical Hardwood and Virgin Redwood Ban. The City 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. (b) Nondiscrimination: Penalties.
(i) Dealer Shall Not Discriminate. In the performance of this Agreement, the Dealer agrees not to discriminate against any employee, City and County employee working with the Dealer or subcontractor, applicant for employment with the Dealer 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, gende r identity, domestic partner status, marital status, disability or Acquired Immune Deficiency Syndrome or HIV status, or association with members of such protected classes, or in retaliation for opposition to discrimination against such classes. (ii) Subcontracts. The Dealer shall incorporate by reference in all subcontracts made in fulfillment of its obligations hereunder the provisions of Sections 12B.2(a), 12B.2(c)-(k) and 12C.3 of the San Francisco Administrative Code and shall require all subcontractors to comply with such provisions. The Dealer’s failure to comply with the obligations in this subsection shall constitute a material breach of this Agreement. (iii) Non-Discrimination in Benefits. The Dealer does not as of the date of this Agreement and will not during the term of this Agreement, 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 Section 12B.2(b) of the San Francisco Administrative Code. (iv) HRC Form. The Dealer 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.

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(v) 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 by reference and made a part of this Agreement as though fully set forth herein. The Dealer shall comply fully with and be bound by all of the provisions that apply to this Agreement under such Chapters of the San Francisco Administrative Code, including but not limited to the remedies provided in such Chapters. Without limiting the foregoing, the Dealer understands that pursuant to Section 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 Agreement may be assessed against the Dealer and/or deducted from any payments due the Dealer; provided, however, that such damages shall not be set off against the payment of rental or other contract related to Commercial Paper Notes or other debt obligations of the City.
(c) Limitations on Contributions . Through execution of this Agreement, the Dealer acknowledges that it is familiar with Section 1.126 of the City’s Campaign and G overnmental Conduct Code, which prohibits any person who contracts with the City, including the Commission, 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 Dealer acknowledges that the foregoing restriction applies only if the contract or 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 Dealer further acknowledges that the prohibition on contributions applies to each prospective party to the contract; each member of the Dealer’s board of directors; the Dealer’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 Dealer; any subcontractor listed in the bid or contract; and any committee that is sponsored or controlled by the Dealer. Additionally, the Dealer acknowledges that the Dealer must inform each of the persons described in the preceding sentence of the prohibitions contained in Section 1.126 of the City’s Campaign and Governmental Conduct Code. (d) MacBride Principles - Northern Ireland. Pursuant to San Francisco Administrative Code Section 12F.5, the City 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 urges San Francisco companies to do business with corporations that abide by the MacBride Principles. By signing below, the person executing this Agreement on behalf of the Dealer acknowledges and agrees that he or she has read and understood this section. (e) Conflict of Interest. Through its execution of this Agreement, the Dealer hereby acknowledges that it is familiar with the provision 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

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does not know of any facts which constitutes a violation of said provisions and agrees that it will immediately notify the City if it becomes aware of any such fact during the term of this Agreement. (f) Earned Income Credit (“EIC”) Forms . San Francisco Administrative Code section 12O requires that employers provide their employees with IRS Form W -5 (The Earned Income Cr edit 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.
(i) The Dealer shall provide EIC Forms to each Eligible E mployee at each of the following times: (A) within thirty days following the date on which this Agreement becomes effective (unless the Dealer has already provided such EIC Forms at least once during the calendar year in which such effective date falls); (B) promptly after any Eligible Employee is hired by the Dealer; and (C) annually between January 1 and January 31 of each calendar year during the term of this Agreement.
(ii) Failure to comply with any requirement contained in the immediately preceding paragraph shall constitute a material breach by the Dealer of the terms of this Agreement. If, within thirty days after the Dealer receives written notice of such a breach, the Dealer fails to cure such breach or, if such breach cannot reasonably be cured w ithin such period of thirty days, the Dealer 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 Agreement or under applicable law. (iii) Any subcontract entered into by the Dealer shall require the subcontractor to comply, as to the subcontractor’s Eligible Employees, with each of the terms of this Section.
(iv) Capitalized terms used in this Section and not defined in this Agr eement shall have the meanings assigned to such terms in Section 12O of the San Francisco Administrative Code.
(g) Local Business Enterprise Utilization; Liquidated Damages. (i) The LBE Ordinance. The Dealer 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 Dealer’s obligations or liabilities, or materially diminish the Dealer’s rights, under this Agreement. Such provisions of the LBE Ordinance are incorporated by reference and made a part of this Agreement as though fully set forth in this section. The Dealer’s willful failure to comply with any applicable provisions of the LBE Ordinance is a material breach of the Dealer’s obligations under this Agreement and shall entitle City, subject to any applicable notice and cure provisions set forth in this Agreeme nt, to exercise any of the remedies provided for under this Agreement, under the LBE Ordinance or otherwise available at law or in equity, which remedies shall be cumulative unless this Agreement expressly provides that any remedy is exclusive. In addition, the Dealer shall comply fully

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with all other applicable local, state and federal laws prohibiting discrimination and requiring equal opportunity in contracting, including subcontracting. (ii) Compliance and Enforcement. If the Dealer 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 Agreement pertaining to LBE participation, the Dealer shall be liable for liquidated damages in an amount equal to the Dealer’s net profit on this Agreement, or 10% of the total amount of this Agreement, 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 Dealer authorized in the LBE Ordinance, including declaring the Dealer to be irresponsible and ineligible to contract with the City for a period of up to five years or revocation of the Dealer’s LBE certification.

The Director of HRC will determine the sanctions to be imposed, including the amount of liquidated damages, after investigation pursuant to the San Francisco Administrative Code Section 14B.17.

By entering into this Agreement, the Dealer acknowledges and agrees that any liquidated damages assessed by the Director of the HRC shall be payable to City upon demand. The Dealer further acknowledges and agrees that any liquidated damages assessed may be withheld from any monies due to the Dealer on any contract with City.

The Dealer 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 Agreement, and shall make such records available for audit and inspection by the Director of HRC or the Controller upon request.
(h) Drug-Free Workplace Policy. The Dealer 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 Commission or City premises. The Dealer agrees that any violation of this prohibition by the Dealer, its employees, agents or assigns will be deemed a material breach of this Agreement.
(i) Compliance with Americans with Disabilities Act. The Dealer 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 Dealer shall provide the services specified in this Agreement in a manner that complies with the ADA and any and all other applicable federal, state and local disability rights legislation. The Dealer agrees not to discriminate against disabled persons in the provision of services, benefits or activities provided under this Agreement and further agrees that any violation of this prohibition on the part of the Dealer, its employees, agents or assigns will constitute a material breach of this Agreement.
(j) Sunshine Ordinance . In accordance with San Francisco Administrative Code Section 67.24(e), contracts, contractors’ bids, responses to solicitations and all other records of communications between the Commission or the City and persons or firms seeking contracts, shall be open to inspection immediately after a contract has been awarded. Nothing in this provision

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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. (k) Requiring Minimum Compensation for Covered Employees. (i) The Dealer 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 Agreement as though fully set forth. The text of the MCO is available on the web at www.sfgov.org/olse/mco. A partial listing of some of the Dealer’s obligations under the MCO is set forth in this Section. The Dealer is required to comply with all the provisions of the MCO, irrespective of this listing of obligations in this Section.
(ii) The MCO requires the Dealer to pay the Dealer’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 Dealer is obligated to keep informed of the then -current requirements. Any subcontract entered into by the Dealer 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. It is the Dealer’s obligation to ensure that any subcontractors of any tier under this Agreement comply with the requirements of the MCO. If any subcontractor under this Agreement fails to comply, City may pursue any of the remedies set forth in this Section against the Dealer.
(iii) The Dealer shall not take adverse action or otherwise discriminate against an emp loyee 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. (iv) The Dealer shall maintain employee and payroll records as required by the MCO. If the Dealer fails to do so, it shall be presumed that the Dealer paid no more than the minimum wage required under State law.
(v) The City is authorized to inspect the Dealer’s job sites and conduct interviews with employees and conduct audits of the Dealer. (vi) The Dealer’s commitment to provide the Minimum Compensation is a material element of the City’s consideration for this Agreement. 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 Dealer fails to comply with these requirements. The Dealer 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 Dealer’s noncompliance.

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The procedures governing the assessment of liquidated damages shall be those set forth in Section 12P.6.2 of Chapter 12P.
(vii) The Dealer 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 Agreement for violating the MCO, the Dealer fails to cure such breach or, if such breach cannot reasonably be cured within such period of 30 days, the Dealer 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.
(viii) The Dealer 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. (ix) The City may conduct random audits of the Dealer. Random audits shall be (A) noticed in advance in writing; (B) limited to ascertaining whether Cover ed Employees are paid at least the minimum compensation required by the MCO; (C) accomplished through an examination of pertinent records at a mutually agreed upon time and location within ten days of the written notice; and (D) limited to one audit of the Dealer every two years for the duration of this Agreement. Nothing in this Agreement is intended to preclude the City from investigating any report of an alleged violation of the MCO.
(l) Requiring Health Benefits for Covered Employees. Unless exempt, the Dealer 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 Agreement as though fully set forth herein. The text of the HCAO is available on the web at http://www.sfgov.org/lwlh.htm. Capitalized terms used in this Section and not defined in this Agreement shall have the meanings assigned to such terms in Chapter 12Q. (i) For each Covered Employee, the Dealer shall provide the appropriate health benefit set forth in Section 12Q.3 of the HCAO. If the Dealer chooses to offer the health plan option, such health plan shall meet the minimum standards set forth by the San Francisco Health Commission.
(ii) Notwithstanding the above, if the Dealer is a small business as defined in Section 12Q.3(d) of the HCAO, it shall have no obligation to comply with part (i) above. (iii) The Dealer’s failure to comply with the HCAO shall constitute a material breach of this Agreement. The City shall notify the Dealer if such a breach has occurred.

If, within 30 days after receiving City’s written notice of a breach of this Agreement for

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violating the HCAO, the Dealer fails to cure such breach or, if such breach cannot reasonably be cured within such period of 30 days, the Dealer fails to commence efforts to cure within such period, or thereafter fails diligently to pursue such cure to completion, City shall have the right to pursue the remedies set forth in Section 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.
(iv) Any subcontract entered into by the Dealer shall require the subcontractor to comply with the requirements of the HCAO and shall contain contractual obligations substantially the same as those se t forth in this Section. The Dealer 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 Dealer shall be responsible for its subcontractors’ compliance with this Chapter. If a subcontractor fails to comply, the City may pursue the remedies set fo rth in this Section against the Dealer based on the subcontractor’s failure to comply, provided that City has first provided the Dealer with notice and an opportunity to obtain a cure of the violation. (v) The Dealer shall not discharge, reduce in compensa tion, or otherwise discriminate against any employee for notifying City with regard to the Dealer’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.
(vi) The Dealer 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. (vii) The Dealer 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. (viii) The Dealer shall keep itself informed of the current requirements of the HCAO.
(ix) The Dealer 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.
(x) The Dealer 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.
(xi) The Dealer shall allow City to inspect the Dealer’s job sites and have access to the Dealer’s employees in order to monitor and determine compliance with HCAO.

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(xii) The City may conduct random audits of the Dealer to ascertain its compliance with HCAO. The Dealer agrees to cooperate with City when it conducts such audits.
(xiii) If the Dealer is exempt from the HCAO when this Agreement is executed because its amount is less than $25,000 ($50,000 for nonprofits), but the Dealer later enters into an agreement or agreements that cause the Dealer’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 Dealer and the City to be equal to or greater than $75,000 in the fiscal year.
(m) Prohibition on Political Activity with City Funds. In accordance with San Francisco Administrative Code Chapter 12.G, the Dealer 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 Agreement. The Dealer 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 and provisions of Chapter 12.G are incorporated herein by this reference. In the event the Dealer violates the provisions of this section, the City may, in addition to any other rights or remedies available hereunder, (i) terminate this Agreement, and (ii) prohibit the Dealer from bidding on or receiving any new City contract for a period of two (2) years. The Controller will not consider the Dealer’s use of profit as a violation of this section.
(n) 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 impunit y. 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 an d is a public nuisance. Graffiti must be abated as quickly as possible to avoid detrimental impacts on the City and its residents, and to prevent the further spread of graffiti.

The Dealer shall remove all graffiti from any real property owned or leased by such Dealer in the City and County of San Francisco within forty eight (48) hours of the earlier of such Dealer’s (i) discovery or notification of the graffiti or (ii) receipt of notification of the graffiti from the Department of Public Works. This Section is not intended to require any Dealer 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: (A) any sign or banner that is authorized by, and in compliance with, the applicable requirements of the San Francisco Public Works Code, the

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San Francisco Planning Code or the San Francisco Building Code; or (B) 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. Section 101 et seq.).

Any failure of the Dealer to comply with this Section of this Agreement shall constitute a material breach of this Agreement.
(o) Food Service Waste Reduction Requirements. The Dealer 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 Agreement as though fully set forth. This provision is a material term of this Agreement. By entering into this Agreement, the Dealer agrees that if it breaches this provision, the City will suffer actual damages that will be impractical or extremely difficult to determine; further, the Dealer agrees that the sum of one hu ndred dollars ($100) liquidated damages for the first breach, two hundred dollars ($200) liquidated damages for the second breach in the same year, and five hundred dollars ($500) liquidated damages for subsequent breaches in the same year is 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 Agreement was made. Such amount shall not be considered a penalty, but rather agreed monetary damages sustained by the City because of such Dealer’s failure to comply with this provision. (p) Preservative-treated Wood Containing Arsenic . The Dealer may not purchase preservative-treated wood products containing arsenic in the performance of this Agreement 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 Dealer 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 Dealer 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.
(q) Nondisclosure of Private Information. The Dealer agrees to comply fully with and be bound by all of the provisions of Chapter 12M of the San Francisco Administrative Code (the “Nondisclosure of Private information Ordinance ”), including the remedies provided. The provisions of the Nondiscl osure of Private Information Ordinance are incorporated herein by reference and made a part of this Agreement as though fully set forth. Capitalized terms used in this section and not defined in this Agreement shall have the meanings assigned to such term s in the Nondisclosure of Private Information Ordinance. Consistent with the requirements of the Nondisclosure of Private Information Ordinance, the Dealer agrees to all of the following:

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(i) Neither the Dealer nor any of its Subcontractors shall disclose Private Information obtained from the City in the performance of this Agreement to any other Subcontractor, person, or other entity, unless one of the following is true:
(1) the disclosure is authorized by this Agreement;
(2) the Dealer received advance written approval from the Contracting Department to disclose the information; or
(3) the disclosure is required by law or judicial order. (ii) Any disclosure or use of Private Information authorized by this Agreement shall be in accordance with any conditions or restrictions stated in this Agreement. Any disclosure or use of Private Information authorized by a Contracting Department shall be in accordance with any conditions or restrictions stated in the approval. (iii) Private Information shall mean any in formation that: (1) could be used to identify an individual, including without limitation, name, address, social security number, medical information, financial information, date and location of birth, and names of relatives; or (2) the law forbids any person from disclosing. (iv) Any failure of the Bark to comply with the Nondisclosure of Private Information Ordinance shall be a material breach of this Agreement. In such an event, in addition to any other remedies available to it under equity or law, the City may terminate this Agreement, debar the Dealer, or bring a false claim action against the Dealer. (r) Proprietary or Confidential Information of City. The Dealer agrees to maintain the confidentiality of the Information (as defined below), except tha t Information may be disclosed (a) to its and its Affiliates’ directors, officers, employees and agents, including accountants, legal counsel and other advisors (it being understood that the Persons to whom such disclosure is made will be informed of the c onfidential nature of such Information and instructed to keep such Information confidential), (b) to the extent requested by any regulatory authority, (c) to the extent required by applicable laws or regulations or by any subpoena or similar legal process, (d) to any other party to this Agreement, (e) in connection with the exercise of any remedies hereunder or any suit, action or proceeding relating to this Agreement or the enforcement of rights hereunder, (f) subject to an agreement containing provisions substantially the same as those of this Section, to (i) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Agreement or (ii) any actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating to the City and its obligations, (g) with the consent of the City or (h) to the extent such Information (i) becomes publicly available other than as a result of a breach of this Section or (ii) becomes available to the Dealer on a nonconfidential basis from a source other than the City. For the purposes of this Section, “Information” means all information received from the City relating to the City or its business, other than any such information that is a vailable to the Dealer on a nonconfidential basis prior to disclosure by the City; provided that, in the case of information received from the City after the date hereof, such information is clearly identified at the time of delivery as confidential. Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have

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complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.
(s) Submitting False Claims; Monetary Penalties . Pursuant to San Francisco Administrative Code Section 21.35, 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: (i) knowingly presents or causes to be presented to an officer or employee of the City a false claim or request for payment or approval; (ii) 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; (iii) conspires to defraud the City by getting a false claim allowed or paid by the City; (iv) 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 (v) 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 clai m to the City within a reasonable time after discovery of the false claim. (t) Subcontracting. Except as otherwise provided in this Agreement, the Dealer is prohibited from subcontracting this Agreement or any part of it unless such subcontracting is first approved by City in writing. Neither party shall, on the basis of this Agreement, 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.
(u) 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.
(v) City a Third Party Beneficiary . The City is hereby designated as a third party beneficiary fo r the purpose of enforcing all of the obligations of the Dealer contained in this Exhibit A to this Agreement.

4884-5939-2840.2
On March 7, 2019, Orrick, Herrington & Sutcliffe LLP, Bond Counsel to the Commission, deliver ed its opinion that, based upon an analysis of then existing laws, regulations, rulings and court decisions, and assuming, among other matters, the accuracy of certain representations and compliance with certain covenants, interest on the Commercial Paper Notes, when issued in accordance with the Issuing and Paying Agent Agreement and the Tax Certificate, will be excluded from gross income for federal income tax purposes under Section 103 of the Internal Revenue Code of 1986 and exempt from State of California personal income taxes. Bond Counsel’s opinion stated that the amount treated as interest on the Commercial Paper Notes and excluded from gross income will depend upon the taxpayer’s election under Internal Revenue Notice 94-84. Bond Counsel’s opinion also stated that interest on the Commercial Paper Notes is not a specific preference item for purposes of the federal alternative minimum tax. Bond Counsel express ed no opinion regarding any other tax consequences related to the ownership or disposition of, or the amount, accrual or receipt of interest on, the Commercial Paper Notes. See “TAX MATTERS.”
OFFERING MEMORANDUM DATED MARCH [__], 2023
Ratings: See “RATINGS” herein.

$250,000,000
Public Utilities Commission
of the City and County of San Francisco
Commercial Paper Notes
(Power Series)
Not To Exceed $125,000,000
Series A-1 (Tax-Exempt)
Supported by a letter of credit issued by
Bank of America, N.A.

Not To Exceed $125,000,000
Series A-2 (Tax-Exempt)
Supported by a letter of credit issued by
Bank of America, N.A.

The purpose of this Offering Memorandum is to provide certain general information in connection with the issuance and sale of the Public Utilities Commission of the City and County of San Francisco Commercial Paper Notes (Power Series) Series A -1 (Tax-Exempt) (the “Series A-1 Notes”) and the Public Utilities Commission of the City and County of San Francisco Commercial Paper Notes (Power Series) Series A-2 (Tax-Exempt) (the “Series A-2 Notes” and, together with the Series A-1 Notes, the “Commercial Paper Notes” and, each, a “Series”) . The Commission may issue and have outstanding at any one time an aggregate principal amount of Series A -1 Notes up to $125,000,000 and an aggregate principal amount of Series A-2 Notes up to $125,000,000.

References herein to the Commercial Paper Notes, the Letters of Credit, the Reimbursement Agreements and the Issuing and Paying Agent Agreement (all as hereinafter defined) do not purport to be complete or definitive, do not constitute summaries thereof, and are qualified in their entiret y by reference to the provisions thereof. The information and expressions of opinion in this Offering Memorandum are subject to change without notice after the date hereof and future use of this Offering Memorandum shall not otherwise create any implication that there has been no change in the matters referred to in this Offering Memorandum since the date hereof. This Offering Memorandum is not to be construed as a contract between the Public Utilities Commission of the City and County of San Francisco (the “Commission”) and the purchasers of the Commercial Paper Notes. Prospective purchasers of the Commercial Paper Notes are expected to conduct their own review and analysis before making an investment decision.

The Commission has entered into (i) the Reimbursement Agreement, dated as of December 1, 2015, as amended by the First Amendment to Reimbursement Agreement, dated as of March 1, 2019 and as amended by the Second Amendment to Reimbursement Agreement, dated as of February 23, 2022 (together, the “Series A -1 Reimbursement Agreement”), each by and between the Commission and Bank of America, N.A. (the “Series A-1 Bank”), pursuant to which the Series A-1 Bank has issued an irrevocable direct pay letter of credit (the “Series A -1 Letter of Credit”) for the account of the Commission in favor of U.S. Bank Trust Company National Association, (as succes sor in interest to U.S.

Bank, National Association), as issuing and paying agent (the “Issuing and Paying Agent”), supporting the payment of the principal of and interest on maturing Series A -1 Notes, and (ii) the Reimbursement Agreement, dated as of March 1, 2019 (the “Series A -2 Reimbursement Agreement” and, together with the Series A -1 Reimbursement Agreement, the “Reimbursement Agreements”), by and between the Commission and Bank of America, N.A. (the “Series A-2 Bank” and, together with Series A-1 Bank, the “Bank”), pursuant to which the Series A-2 Bank has issued an irrevocable direct pay letter of credit (the “S eries A-2 Letter of Credit” and, together with the Series A -1 Letter of Credit, the “Letters of Credit”) for the account of the Commission in favor of the Issuing and Paying Agent supporting the payment of the principal of and interest on maturing Series A-2 Notes.

Unless terminated earlier or extended in accordance with their respective terms, the Series A -1 Letter of Credit will expire on March 6, 2026, and the Series A-2 Letter of Credit will expire on March 7, 2023.

TIMELY PAYMENT OF PRINCIPAL OF AND/OR INTEREST ON MATURING COMMERCIAL PAPER NOTES OF EACH SERIES IS DEPENDENT UPON THE AVAILABILITY OF PROCEEDS OF DRAWS UNDER THE APPLICABLE LETTER OF CREDIT . IF FOR ANY REASON THE BANK FAILS TO

MAKE A PAYMENT DUE UNDER THE APPLICABLE LETTER OF CREDIT, THE COMMISSION WOULD HAVE NO OBLIGATION TO MAKE ANY

PAYMENTS WITH RESPECT TO THE APPLICABLE COMMERCIAL PAPER NOTES EXCEPT FROM AVAILABLE POWER ENTERPRISE REVENUES, AND

IT IS UNLIKELY THAT THE COMMISSION WOULD HAVE SUFFICIENT FUNDS ON HAND AND AVAILABLE TO MAKE THE CORRESPONDING PAYMENT OF PRINCIPAL OF AND/OR INTEREST ON SUCH COMMERCIAL PAPER NOTES. PROSPECTIVE INVESTORS SHOULD THEREFORE BASE THEIR

INVESTMENT DECISION, INSOFAR AS IT RELATES TO THE CREDITWORTHINESS OF A SERIES OF COMMERCIAL PAPER NOTES, SOLELY ON THE CREDIT OF THE APPLICABLE BANK, RATHER THAN THE COMMISSION.

The Commercial Paper Notes are also payable from the proceeds of refunding Commercial Paper Notes or refunding bonds or other obligations which may be authorized and issued from time to time for such purpose. In addition, the Commission has pledged Available Power Enterprise Revenues (as defined herein) to the repayment of the Commercial Paper Notes on a basis subordinate to repayment of the Commission’s outstanding Power Revenue Bonds ( as defined herein) . See “THE COMMISSION AND THE POWER ENTERPRISE—Obligations Payable from Net Revenues” herein.

THE GENERAL FUND OF THE CITY AND COUNTY OF SAN FRANCISCO IS NOT LIABLE, AND NEITHER THE CREDIT NOR THE TAXING POWER OF THE CITY AND COUNTY OF SAN FRANCISCO IS PLEDGED, FOR THE PAYMENT OF THE COMMERCIAL PAPER NOTES AND THE INTEREST THEREON.

DEALERS FOR ALL SERIES
Barclays Goldman Sachs & Co. LLC RBC Capital Markets

TABLE OF CONTENTS

Page

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INTRODUCTION ....................................................................................................................................................... 1 THE COMMISSION AND THE POWER ENTERPRISE ......................................................................................... 2 The Commission ........................................................................................................................................... 2 The Power Enterprise .................................................................................................................................... 3 Community Choice Aggregation Service ...................................................................................................... 3 Sources of Revenue ....................................................................................................................................... 3 Capital Improvement Plan ............................................................................................................................. 4 Obligations Payable from Net Revenues ....................................................................................................... 4 Memorandum of Understanding (Mountain Tunnel Improvement Project) .................................................. 5 Power Purchase Agreements ......................................................................................................................... 5 Investment Policy .......................................................................................................................................... 6 Power Enterprise Financial Statements ......................................................................................................... 6 THE COMMERCIAL PAPER NOTES ...................................................................................................................... 6 Limited Obligation ........................................................................................................................................ 8 Pledge of Available Power Enterprise Revenues and Certain Funds and Accounts...................................... 8 SERIES A-1 LETTER OF CREDIT AND SERIES A-1 REIMBURSEMENT AGREEMENT ................................ 9 Series A-1 Letter of Credit ............................................................................................................................ 9 Series A-1 Reimbursement Agreement Events of Default .......................................................................... 10 Series A-1 Reimbursement Agreement Remedies ...................................................................................... 12 SERIES A-2 LETTER OF CREDIT AND SERIES A-2 REIMBURSEMENT AGREEMENT .............................. 13 Series A-2 Letter of Credit .......................................................................................................................... 13 Series A-2 Reimbursement Agreement Events of Default .......................................................................... 14 Series A-2 Reimbursement Agreement Remedies ...................................................................................... 16 THE BANK ............................................................................................................................................................... 17 Bank of America, N.A ................................................................................................................................. 17 RATINGS .................................................................................................................................................................. 18 ABSENCE OF LITIGATION ................................................................................................................................... 18 THE DEALERS ........................................................................................................................................................ 18 TAX MATTERS ....................................................................................................................................................... 19 NO CONTINUING DISCLOSURE FOR COMMERCIAL PAPER NOTES .......................................................... 20 LEGAL MATTERS .................................................................................................................................................. 21 ADDITIONAL INFORMATION ............................................................................................................................. 22

APPENDIX A BOOK-ENTRY SYSTEM FOR COMMERCIAL PAPER NOTES

APPENDIX B CO PY OF BOND COUNSEL OPINION

APPENDIX C POWER ENTERPRISE FINANCIAL STATEMENTS

4884-5939-2840.2

INTRODUCTION
The purpose of this Offering Memorandum is to provide certain general information in connection with the issuance and sale of the Public Utilities Commission of the City and County of San Francisco Commercial Paper Notes (Power Series) Series A-1 (Tax-Exempt) (the “Series A-1 Notes”) and the Public Utilities Commission of the City and County of San Francisco Commercial Paper Notes (Power Series) Series A-2 (Tax-Exempt) (the “Series A-2 Notes” and, together with the Series A -1 Notes, the “Commercial Paper Notes” and, each, a “Series”) . The Commission may issue and have outstanding at any one time an aggregate principal amount of Series A -1 Notes up to $125,000,000 and an aggregate principal amount of Series A-2 Notes up to $125,000,000. Capitalized terms used herein and not defined shall have the respective meanings given such terms in the First Amended and Restated Issuing and Paying Agent Agreement, dated as of March 1, 2019 (the “Issuing and Paying Agent Agreement”), by and between U.S. Bank Trust Company National Assoc iation, (as successor in interest to U.S. Bank, National Association) , as issuing and paying agent (the “Issuing and Paying Agent”) and the Public Utilities Commission of the City and County of San Francisco (the “Commission”), as applicable . If not defined below or in the Issuing and Paying Agent Agreement, capitalized terms used herein shall have the meanings given such terms in the Trust Indenture, dated as of May 1, 2015, as amended by the First Supplemental Trust Indenture, dated as of May 1, 2015, as amended by the Second Supplemental Trust Indenture, dated as of December 1, 2021, and as the same may be subsequently supplemented, amended and modified from time to time (the “Power Bonds Indenture”), between the Commission and U.S. Bank Trust Company National Association, (as successor in interest to U.S. Bank, National Association), as trustee thereunder, providing for the issuance from time to time of the Commission’s Power Revenue Bonds, designated as the “Power Revenue Bonds,” and other obligations as provided therein, as the same may be supplemented, amended and modified from time to time.

The Commission has entered into (i) the Reimbursement Agreement, dated as of December 1, 2015, as amended by the First Amendment to Reimbursement Agreement, d ated as of March 1, 2019 and as amended by the Second Amendment to Reimbursement Agreement, dated as of February 23, 2022 (together, the “Series A -1 Reimbursement Agreement”), each by and between the Commission and Bank of America, N.A . (the “Series A -1 Bank”), pursuant to which the Series A- 1 Bank has issued an irrevocable direct pay letter of credit (the “Series A -1 Letter of Credit”) for the account of the Commission in favor of the Issuing and Paying Agent supporting the payment of the principal of and interest on maturing Series A -1 Notes, and (ii) the Reimbursement Agreement, dated as of March 1, 2023 (the “Series A -2 Reimbursement Agreement” and, together with the Series A- 1 Reimbursement Agreement, the “Reimbursement Agreements”), by and between the Commission and Bank of America, N.A. (the “Series A-2 Bank” and, together with Series A-1 Bank, the “Bank”), pursuant to which the Series A-2 Bank has issued an irrevocable direct pay letter of credit (the “Series A-2 Letter of Credit” and, together with the Series A-1 Letter of Credit, the “Letters of Credit”) for the account of the Commission in favor of the Issuing and Paying Agent supporting the payment of the principal of and interest on maturing Series A-2 Notes.

TIMELY PAYMENT OF PRINCIPAL OF AND/OR INTEREST ON MATURING COMMERCIAL

PAPER NOTES OF EACH SERIES IS DEPENDENT UPON THE AVAILABILITY OF PROCEEDS OF DRAWS UNDER THE APPLICABLE LETTER OF CREDIT. IF FOR ANY REASON THE BANK FAILS

TO MAKE A PAYMENT DUE UNDER THE APPLICABLE LETTER OF CREDIT, THE COMMISSION

WOULD HAVE NO OBLIGATION TO MAKE ANY PAYMENTS WITH RESPECT TO THE

APPLICABLE COMMERCIAL PAPER NOTES EXCEPT FROM AVAILABLE POWER ENTERPRISE

REVENUES, AND IT IS UNLIKELY THAT THE COMMISSION WOULD HAVE SUFFICIENT FUNDS

ON HAND AND AVAILABLE TO MAKE TH E CORRESPONDING PAYMENT OF PRINCIPAL OF AND/OR INTEREST ON SUCH COMMERCIAL PAPER NOTES. PROSPECTIVE INVESTORS SHOULD

THEREFORE BASE THEIR INVESTMENT DECISION, INSOFAR AS IT RELATES TO THE

CREDITWORTHINESS OF A SERIES OF COMMERCIAL PAPER NOTES, SOLELY ON T HE CREDIT OF THE APPLICABLE BANK, RATHER THAN THE COMMISSION.

The Commercial Paper Notes are also payable from the proceeds of refunding Commercial Paper Notes or refunding bonds or other obligations which may be authorized and issued from time to time for such purpose. In addition, the Commission has pledged Available Power Enterprise Revenues (as defined herein) to the repayment of the Commercial Paper Notes on a basis subordinate to repayment of the Commission’s outstanding Power Revenue Bonds (as defined herein) . See “THE COMMISSION AND THE POWER ENTERPRISE —Obligations Payable from Net Revenues” herein.

2 4884-5939-2840.2
The information in this Offering Memorandum has been obtained from the Commission, the Bank and other sources believed to be reliable . References herein to the Ordinance (as defined herein), the Resolution (as defined herein), the Issuing and Paying Agent Agreement, the Commercial Paper Notes, the Letters of Credit and the Reimbursement Agreements do not purport to be complete or definitive, do not constitute summaries thereof, and are qualified in their entirety by reference to the provisions thereof . The information and expressions of opinion in this Offering Memorandum are subject to change without notice after the date hereof and future use of t his Offering Memorandum shall not otherwise create any implication that there has been no change in the matters referred to in this Offering Memorandum since the date hereof . This Offering Memorandum is not to be construed as a contract between the Commis sion and the purchasers of the Commercial Paper Notes . Prospective purchasers of the Commercial Paper Notes are expected to conduct their own review and analysis before making an investment decision.

The Commercial Paper Notes are exempt from registration under the Securities Act of 1933, as amended.

THE COMMISSION AND THE POWER ENTERPRISE
The Commission
The Commission operates and maintains dams and reservoirs, power generation and transmission facilities, water transmission facilities, water and wastewater treatment plants, water distribution facilities, wastewater collection facilities and power distribution facilities . The Commission’s facilities extend from the Hetch Hetchy watershed in the Sierra Nevada, across the Central Valley, over and around the southern end of San Francisco Bay and north along the San Francisco Peninsula to the City.

The Commission, which consists of five members appointed by the Mayor of the City (the “Mayor”), is a department of the City responsible for the maintenance, opera tion and development of three utility enterprises: the Hetch Hetchy Water and Power Enterprise, the Water Enterprise and the Wastewater Enterprise.

Hetch Hetchy Water and Power. Hetch Hetchy Water and Power is comprised of two key components: Hetch Hetchy Water, which operates and maintains the Hetch Hetchy Project, and Hetch Hetchy Power (referred to in this Offering Memorandum as the “Power Enterprise ”), which is responsible for all of the Commission’s power utility commercial transactions and in -City po wer operations. The Hetch Hetchy Project provides water for distribution through the Water Enterprise and hydroelectric power to municipal and other customers through the Power Enterprise.

CleanPowerSF is a component unit of the Power Enterprise and a “Se parate System” under the Power Bonds Indenture. See “–Community Choice Aggregation Service” below for additional information on CleanPowerSF.

Water Enterprise. Nearly 2.7 million people rely on water supplied by the Commission to meet their daily water needs through its Water Enterprise. The Commission serves as the retail water supplier for the City and is responsible for water deliveries to residents and institutions within the City limits, as well as to a number of retail accounts outside of the City limits. In addition, the Commission sells water to 27 wholesale customer entities in San Mateo, Alameda and Santa Clara Counties.

Wastewater Enterprise. The Wastewater Enterprise’s collection and treatment system consists of a combined sewer collection system conveying sewage and stormwater flows within the City to three water pollution control plants, also located within the City. Treated effluent flows are then discharged through deep -water outfalls into the San Francisco Bay and Pacific Ocean. The Wastewater Enterprise also currently provides sewage treatment service on Treasure Island pursuant to contract and operates an onsite sewage and stormwater reclamation and treatment facility at the Commission’s new headquarters at 525 Golden Gate Avenue.

Each of the Commission’s three utility enterprises is operated and managed as a separate financial entity and separate enterprise funds are maintained for each enterprise. In addition, CleanPowerSF maintains its own financial statements, and segregates its revenues and expenses from the Power Enterprise . No revenues from the Water Enterprise, the Wastewater Enterprise or CleanPowerSF have been pledged for payment of the Power Enterprise Commercial Paper Notes and no such revenues shall be available for the repayment thereof.

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The Power Enterprise
The Power Enterprise was created in February 2005 as a separate system and accounting unit within Hetch Hetchy Water and Power. The Power Enterprise provides retail electric service to meet the municipal requirements of the City, including power to operate the San Francisco Municipal Transportation Agency’s streetcars and electric buses, San Francisco General Hospital, City Hall, police stations, fire stations and schools, certain Port of San Francisco facilities, street and traffic lights, municipal buildings and other City facilities, such as the San Francisco International Airport , and to certain public agencies and retail customers and provides pedestrian and streetlight operation and maint enance services, energy efficiency, and distributed generation services to City residents and businesses and other customers. Additionally, the Power Enterprise provides power to the Modesto Irrigation District and the Turlock Irrigation District and to other customers consistent with prescribed contractual obligations and federal law.

A number of the facilities of the Hetch Hetchy Project are joint assets and are used for both water transmission and power generation and transmission, benefitting both Hetc h Hetchy Water and the Power Enterprise. All power sales revenues are allocated to the Power Enterprise. Operating and capital costs benefitting the Power Enterprise and 55% of operating and capital costs that jointly benefit both Hetch Hetchy Water and the Power Enterprise are allocated to the Power Enterprise. Operating and capital costs benefitting Hetch Hetchy Water and 45% of operating capital costs jointly benefitting both Hetch Hetchy Water and the Power Enterprise are allocated to the Commission's Water Enterprise.

Community Choice Aggregation Service
California state law allows a local government entity to sell electricity directly to customers within the entity’s jurisdiction through a Community Choice Aggregation (“CCA”) program . Under a CCA pro gram, a public entity may develop a portfolio of energy supplies that it purchased or produced to meet specific local targets for renewable energy or to meet other policy and service objectives . Transmission and distribution services would continue to be provided by the local utility subject to California Public Utilities Commission tariffs. Customers within a CCA’s jurisdiction may choose to opt-out of the program.

CleanPowerSF is a “Separate System” (as such term is defined in the Power Bonds Indenture) apart from the Power Enterprise system and revenues, with CleanPowerSF’s costs generally supported by revenues received by its CCA customers. Net Revenues of the Power Enterprise may be available to pay the obligations of CleanPowerSF, but only to the extent such Net Revenues are in excess of all requirements (including the payment of debt service on all Power Revenue Bonds, the Commercial Paper Notes and Parity Notes (as defined herein)) under the Power Bonds Indenture.

In May 2016, the Commission launched CleanPowerSF, a Community Choice Aggregation program.

CleanPowerSF is a component unit of the Power Enterprise and a “ Separate System ” under the Power Bonds Indenture. Under CleanPowerSF, the Commission pools the electricity demands of many City reside nts and businesses that are retail electric distribution customers of PG&E, for the purpose of buying electricity on behalf of such customers. CleanPowerSF, which currently serves over 380,000 accounts, gives residential and commercial electricity consumers in San Francisco a choice of having their electricity supplied from clean renewable sources, such as solar and wind, at competitive rates. CleanPowerSF offers two products: a “Green” product comprised of at least 50% renewable energy and a “SuperGreen” product comprised of 100% renewable energy. CleanPowerSF is an opt- out program and customers can choose to use CleanPowerSF or stay with Pacific Gas & Electric Company’s existing generation service. Since the Commission launched CleanPowerSF in 2016, the program has maintained a 96% participation rate and a 4% opt-out rate.

Sources of Revenue
On average, approximately 88% of all Revenues of the Power Enterprise are from charges for services and approximately 12% are from other revenues, including rents, interest income and other revenues. On average, approximately 85% of charges for service are from municipal sales. Following the outbreak of COVID-19, in Fiscal Year 2020-21 approximately 70% of charges for service were from municipal sales. While those revenues have historically remained relatively constant, in recent years, the Commission has approved rate increases to municipal

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customers. Retail sales have grown in recent years due to customer growth in redevelopment areas and customers transferring to Hetch Hetchy power service from other providers. Wholesale sales are possible when there is excess Hetch Hetchy project generation available for sale, and are driven by supply variability and market prices.

Capital Improvement Plan
On February 14, 2023, the Commission adopted the 10 -year capital plan for Fiscal Years 202 3-24 through 2032-33 (the “2024-33 CIP”), totaling approximately $8.79 billion. Of such amount, approximately $1.57 billion has been allocated to Hetch Hetchy Water and Power, with approximately $441 million allocated to Hetch Hetchy Water (which is funded by the Water Enterprise) and $1.13 billion allocated to Hetch Hetchy Power (which is funded by the Power Enterprise).

The Hetch Hetchy Water and Power capital program is divided into power- infrastructure-related projects (allocable to the Power Enterprise), water-infrastructure-related projects (allocable to the Water Enterprise) and joint projects for facilities that are used for both water and power operations (allocable 55% to the Power Enterprise and 45% to the Water Enterprise). The capital plan for Fiscal Year 2023-24 was approved by the Commission as part of the budget for the Power Enterprise, with capital spending budgeted at $ 41.9 million. The capital plan budget for Fiscal Year 2024-25 will be presented for approval next year in order for further budget development work to take place.

The 2024-33 CIP is projected to be funded primarily from a combination of Power Enterprise revenues (i.e. cash) and bonds and commercial paper. Specifically, the 2024-33 Hetch Hetchy Water and Power CIP projects that revenue funding will account for $197 million of project funding, and total debt funding will account for $1.38 billion of project funding. Of this, $ 934 million is projected to come from Power Enterprise debt and $ 441 million from Water Enterprise debt. For Fiscal Year 2023-24, projects are expected to be primarily funded from $7.45 million of Power Enterprise revenues, $41.9 million of proceeds of future Power Enterprise bond or commercial paper sales and $65.5 million of Water Enterprise bond and commercial paper proceeds.

Obligations Payable from Net Revenues
Senior Obligations. As of February 1, 2023, the Power Enterprise had $158,910,000 in outstanding aggregate principal amount of Power Revenue Bonds, comprised of the Commission’s: (i) Power Revenue Bonds, 2015 Series A (Green Bonds) (the “ 2015A Bonds”) outstanding in the aggregate principal amount of $ 32,025,000, (ii) Power Revenue Bonds, 2015 Series B (the “2015B Bonds”), outstanding in the aggregate principal amount of $2,885,000 , (iii) Power Revenue Bonds, 2021 Series A (Green Bonds) (the “2021A Bonds”), outstanding in the aggregate principal amount of $74,280,000, and (iv) Power Revenue Bonds, 2021 Series B (the “2021B Bonds,” and together with the 2021A Bonds, the “2021AB Bonds”) , outstanding in the aggregate principal amount of $ 49,720,000. The 2015A Bonds, the 2015B and the 2021AB Bonds are collectively referred to herein as , the “Outstanding Power Revenue Bonds”).

There are currently no other obligations of the Commission payable from Net Revenues on a parity with the Outstanding Power Revenue Bonds.

Subordinate Obligations. The Commercial Paper Notes are secured by a pledge of Net Revenues subordinate to the pledge of Net Revenues securing the Outstanding Power Revenue Bonds and any future Power Revenue Bonds.

The Outstanding Power Revenue Bonds have underlying ratings of “ [AA-]” by Fitch Ratings, Inc . (“Fitch”) and “[AA]” by S&P Global Ratings, a division of Standard & Poor’s Financial Services LLC (“S&P”).

As of February 1, 2023, the Power Enterprise also had $4,424,706 in outstanding aggregate principal amount of obligations subordinate to the Outstanding Power Revenue Bonds (the “Parity Notes”). The Parity Notes consist of certain federal subsidy bonds (clean renewable energy bonds, new clean renewable energy bonds a nd qualified energy conservation bonds) that were privately placed on a non-rated basis.

The Commercial Paper Notes are secured by a pledge of Net Revenues on a parity with the pledge of Net Revenues securing the Parity Notes.

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Other Obligations Subordinate to the Commercial Paper Notes and Parity Notes. In 2010, the Commission constructed its administrative offices at 525 Golden Gate Avenue, one block north of City Hall, to house the administrative offices of the Commission ’s three utility enterprises that are now located in various leased facilities .

Total project costs were approximately $2 02 million, and were financed with land and property sale proceeds, fund balances, grants and the proceeds from the execution and delivery in 2009 of certificates of participation, representing interests in a City General Fund lease . Pursuant to a Memorandum of Understanding between the City and the Commission, the Commission will reimburse the City General Fund for all debt service in connection with this City financing (net of Refundable Credits (as defined in the Power Bonds Indenture) received).

The Commission has allocated such payment obligations internally among its three utility enterprises based on percentage usage, and the Power Enterprise is allocated approximately 9.72% of such obligation, payable from Net Revenues on a basis subordinate to the payment of the Commercial Paper Notes.

The Commission may, with majority voter approval or, in certain instances with majority, two-thirds or three- quarters vote of the Board of Supervisors of the City (the “Board”) (depending on the nature of the Power Revenue Bonds), authorize additional Power Revenue Bonds, the payment of which will be prior to, on parity with, or subordinate to, the payment of the Commercial Paper Notes, without notice to, or consent of, any holder of the Commercial Paper Notes.

Memorandum of Understanding (Mountain Tunnel Improvement Project) During the fiscal year ended June 30, 2022, the Commission entered into a Drinking Water State Revolving Fund (SRF) Loan (the “DWSRF Loan”) with the California State Water Resources Control Board , which provides a low-interest-rate loan in the approximate amount of $238,000,000 for the Mountain Tunnel Improvement Project (the “MTIP”), a capital project of Hetch Hetchy Water & Power. A component of the MTIP, the Flow Control Facility, is a joint asset of the Water Enterprise and Power Enterprise. The Power Enterprise will be responsible for repayment to the Water Enterprise of the DWSRF Loan debt service representing its allocable share of the cost of the “Flow Control Facility” component of the MTIP (the “Power Enterprise Portion”). Pursuant to a Memorandum of Understanding to be entered into by and between the Water Enterprise and the Power Enterprise, the Power Enterprise Portion paid by the Water Enterprise under the DWSRF Loan will be reimbursed to the Water Enterprise by the Power Enterprise and will not be deemed to be a debt obligation of the Power Enterprise, and will instead be treated as a component of Operation and Maintenance Expenses under the Power Bonds Indenture, in the approximate amount of $2.7 million annually. The Power Enterprise’s allocable share of the cost of the MTIP, approximately $65,259,600, represents approximately 27.42% of the total DWSRF Loan Amount.

Power Purchase Agreements
In June 2009, the Power Enterprise entered into a 25-year power purchase agreement with SFCity 1, LP, to purchase electricity generated from a solar photovoltaic project located at Sunset Reservoir. In July 2013, Duke Energy (“Duke Energy”) assumed ownership of the power purchas e agreement. In accordance with the terms and conditions thereof, commencing on the project’s commercial operation date, Duke Energy will sell and deliver, and the Power Enterprise shall purchase and accept, all of the output of the project. The facility achieved commercial operation in November 2010.

Payments made by the Power Enterprise under its agreement with Duke Energy constitute Operation and Maintenance Expenses under the Power Bonds Indenture. In Fiscal Years 2018 -19, 2019-20, 2020-21and 2021-22, the Power Enterprise purchased approximately 6,427 megawatt- hours (“MWh”) of electricity for a total payment of $1.96 million , approximately 6,877 MWh of electricity for a total payment of $2.14 million, approximately 6,598 MWh of electricity for a total payment of $2.13 million and approximately 6,460 MWh of electricity for a total payment of $2.23 million, respectively. For Fiscal Year 2022-23, the projected purchased electricity is approximately 6,607 MWh for a total payment of approximately $2.25 million.

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Investment Policy
The Commission’s funds are invested through the City’s office of the Treasurer pursuant to the City’s investment policy. The investment policy of the City is reviewed annually and is subject to change . A copy of the City’s Annual Statement of Investment Policy can be found at www.sftreasurer.org.

Power Enterprise Financial Statements
The financial statements of the Power Enterprise for the Fiscal Year ended June 30, 2022, are attached to this Offering Memorandum as APPENDIX C. Additional financial and operating data relating to the Commission and the Power Enterprise may be found in the Commission’s most recent filings made pursuant to continuing disclosure undertakings of the Commission in connection with its Outstanding Power Revenue Bonds, which are filed with the Municipal Securities Rulemaking Board (“MSRB”) through the Electronic Municipal Market Access (“EMMA”) website. Additionally, the Commission provided COVID -19 information in its official statement prepared in connection with the issuance of the 2021AB Bonds, dated December 8, 2021 (the “Series 2021AB Official Statement”) and the effects that COVID-19 has had on the Commission and the Power Enterprise as the date of the Series 2021AB Official Statement. The Commission may provide supplemental information in its annual continuing disclosure report filings and may from time to time provide voluntary notices, in its sole discretion, to provide information to investors.

See “ADDITIONAL INFORMATION.”

TIMELY PAYMENT OF PRINCIPAL OF AND/OR INTEREST ON MATURING COMMERCIAL

PAPER NOTES OF EACH SERIES IS DEPENDENT UPON THE AVAILABILITY OF PROCEEDS OF DRAWS UNDER THE APPLICABLE LETTER OF CREDIT. IF FOR ANY REASON THE BANK FAILS

TO MAKE A PAYMENT DUE UNDER THE APPLICABLE LETTER OF CREDIT, THE COMMISSION

WOULD HAVE NO OBLIGATION TO MAKE ANY PAYMENTS WITH RESPECT TO THE

APPLICABLE COMMERCIAL PAPER NOTES EXCEPT FROM AVAILABLE POWER ENTERPRISE

REVENUES, AND IT IS UNLIKELY THAT THE COMMISSION WOULD HAVE SUFFICIENT F UNDS

ON HAND AND AVAILABLE TO MAKE THE CORRESPONDING PAYMENT OF PRINCIPAL OF AND/OR INTEREST ON SUCH COMMERCIAL PAPER NOTES. PROSPECTIVE INVESTORS SHOULD

THEREFORE BASE THEIR INVESTMENT DECISION, INSOFAR AS IT RELATES TO THE

CREDITWORTHINESS OF A SERIES O F COMMERCIAL PAPER NOTES, SOLELY ON THE CREDIT OF THE APPLICABLE BANK, RATHER THAN THE COMMISSION.

THE COMMERCIAL PAPER NOTES
The Commercial Paper Notes are authorized to be issued pursuant to (i) Article V of Chapter 43 of the San Francisco Administrative Code, enacted by Ordinance No. 203-98, adopted by the Board on June 8, 1998, and signed by the Mayor on June 19, 1998, as amended by Ordinance 270-06 adopted by the Board on October 24, 2006, and signed by the Mayor on October 31, 2006, to establish a procedure for the Commission to issue commercial paper; (ii) Section 9.107(6) and 9.107(8) of the Charter; (iii) Section 8B.124 of the Charter, subject to receipt of the Proposition A Certifications (as defined herein); and (iv) Ordinance No. 002-19, adopted by the Board on January 15, 2019, and signed by the Mayor on January 18, 2019 (the “Ordinance”), and Resolution No. 18-0188, adopted by the Commission on November 13, 2018 (the “Resolution”), providing for and approving of the issuance by the Commission of not to exceed $250,000,000 principal amount of Commercial Paper Notes.

Issuance of debt under Section 8B.124 of the Charter is subject to (i) receipt of certification from an independent engineer that (x) the projects to be financed by such debt meet utility standards and (y) estimated net revenue will be sufficient to meet operating, maintenance, debt service coverage and other indenture or resolution requirements; and (ii) receipt of certification from the San Francisco Planning Department that facilities financed with such debt will comply with applicable requirements of the California Environmental Quality Act (collectively, the “Proposition A Certifications”).

The Commercial Paper Notes are issued pursuant to the terms of the Issuing and Paying Agent Agreement.

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The Commercial Paper Notes will be issued from time to time to finance projects associated with the Commission’s Power Enterprise. The Commission may issue, and have outstanding at any one time, an aggregate principal amount of Series A-1 Notes up to $125,000,000, and an aggregate principal amount of Series A-2 Notes up to $125,000,000.

The Commercial Paper Notes are dated the date of their original issuance, issued in book-entry form only in denominations of $100,000, and in integral multiples of $1,000 in excess of $100,000, and bear interest at separately stated interest rates not to exceed 12% per annum.

The Commercial Paper Notes are fully registered notes registered in the name of Cede & Co., as registered owner and nominee for The Dep ository Trust Company (“DTC”), New York, New York . Beneficial ownership interests in the Commercial Paper Notes are available in book -entry form only, and purchasers of the Commercial Paper Notes will not receive certificates representing their interests in the Commercial Paper Notes purchased. While held in book-entry form, all payments of principal of and interest on the Commercial Paper Notes will be made by wire transfer to DTC or its nominee as the sole registered owner of the Commercial Paper Notes . Payments to the beneficial owners are the responsibility of DTC and its participants. See “APPENDIX A—BOOK-ENTRY SYSTEM FOR COMMERCIAL PAPER NOTES.”
Each Commercial Paper Note will bear interest payable at maturity at an annual rate calculated on the basis of actual days elapsed and a year of 365 or 366 days, as applicable.

Each Commercial Paper Note will mature on a Business Day not more than 270 days after its issuance date, but in no event later than the Business Day immediately preceding the Terminat ion Date (as defined herein) of the applicable Letter of Credit.

Each Commercial Paper Note (i) will be sold at a price of not less than 100% of the principal amount thereof, and (ii) will mature on a Business Day . The Commercial Paper Notes will not be s ubject to redemption prior to maturity. Payments of principal of and interest on maturing Commercial Paper Notes will be made by the Issuing and Paying Agent directly to DTC.

Notwithstanding anything to the contrary in the Issuing and Paying Agent Agreeme nt and the Commercial Paper Notes, upon an Event of Default (as such term is defined in the Issuing and Paying Agent Agreement), (i) if the applicable Bank is insolvent or has failed to honor a properly presented and conforming Drawing (as such term is defined in the Issuing and Paying Agent Agreement) under the applicable Letter of Credit, any holder of the applicable Series of Commercial Paper Notes at the time outstanding may, by notice to the Commission, declare the principal of such holder’s Commercial Paper Notes, and the interest accrued thereon, to be due and payable immediately, whereupon the same shall become and shall be immediately due and payable; and (ii) (A) so long as the applicable Bank is not insolvent and has not failed to honor a properly presented and conforming Drawing under the applicable Letter of Credit, such Bank, on behalf of the holders of the applicable Series of Commercial Paper Notes at the time outstanding, by notice to the Commission, may declare the principal of all outstandin g Commercial Paper Notes of such Series, and the interest accrued thereon, to be due and payable immediately, whereupon the same shall become and shall be immediately due and payable and the Issuing and Paying Agent shall, to the extent the applicable Letter of Credit so provides, immediately make thereafter a Drawing under such Letter of Credit to pay the amount of interest and principal then due on the applicable Series of Commercial Paper Notes and (B) such Bank may, by notice to the Commission, declare the principal of the applicable Bank Notes, and the interest accrued thereon (and the Unpaid Drawings and Advances evidenced thereby), to be due and payable immediately, whereupon the same shall become and shall be immediately due and payable, anything in Issuing and Paying Agent Agreement or in the applicable Series of Commercial Paper Notes or in the applicable Reimbursement Agreement contained to the contrary notwithstanding, provided however, this clause (ii) shall be of no effect if said Event of Default was caused by a failure of such Bank to honor a properly presented and conforming Drawing made on the applicable Letter of Credit in conformance with the terms of the Issuing and Paying Agent Agreement. See “SERIES A-1 LETTER OF CREDIT AND SERIES A-1 REIMBURSEMENT AGREEMENT – Series A -1 Reimbursement Agreement Remedies” and “SERIES A -2 LETTER OF CREDIT AND SERIES A- 2 REIMBURSEMENT AGREEMENT – Series A -2 Reimbursement Agreement Remedies.”

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Limited Obligation

TIMELY PAYMENT OF PRINCIPAL OF AND/OR INTEREST ON MATURING COMMERCIAL

PAPER NOTES OF EACH SERIES IS DEPENDENT UPON THE AVAILABILITY OF PROCEEDS OF DRAWS UNDER THE APPLICABLE LETTER OF CREDIT. PROSPECTIVE INVESTORS SHOULD

THEREFORE BASE THEIR INVESTMENT DECISION, INSOFAR AS IT RELATES TO THE

CREDITWORTHINESS OF A SERIES OF COMMERCIAL PAPER NOTES, SOLELY ON THE CREDIT OF THE APPLICABLE BANK, RATHER THAN THE COMMISSION.

THE GENERAL FUND OF THE CITY AND COUNTY OF SAN FRANCISCO IS NOT LIABLE, AND

NEITHER THE CREDIT NOR THE TAXING POWER OF THE CITY AND COUNTY OF SAN FRANCISCO IS PLEDGED, FOR THE PAYMENT OF THE COMMERCIAL PAPER NOTES.

Pledge of Available Power Enterprise Revenues and Certain Funds and Accounts The Commercial Paper Notes and the Bank Notes and the obligations of the Commission under the Series A-1 Reimbursement Agreement and the Series A- 2 Reimbursement Agreement are revenue obligations, are not secured by the taxing power of the Commission or the City and shall be payable as to both principal and interest from, and shall be secured solely by a pledge as hereinafter provided of, the Available Power Enterprise Revenues, and, as set forth below, certain funds and accounts created under the Issuing and Paying Agent Agreement.

The Available Power Enterprise Revenues (on a parity with the pledge securing any Parity Notes) and the Construction Fund and the accounts therein are pledged to the payment of the Commercial Paper Notes, the Bank Notes and all obligations of the Commission relating to such Commercial Paper Notes under the Issuing and Paying Agent Agreement and under the Series A-1 Reimbursement Agreement and the Series A-2 Reimbursement Agreement without priority or distinction of one over the other, except as expressly provided under the Issuing and Paying Agent Agreement. In addition, (i) the Series A-1 Debt Service Account is pledged to secure the payment of the interest on and principal of the Series A-1 Notes, (ii) the Series A-1 Bank Payment Account and the Series A-1 Bank Note Debt Service Account are pledged to secure the payment of the interest on and principal of the Series A-1 Bank Notes and obligations under the Series A-1 Reimbursement Agreement, (iii) the Series A-2 Debt Service Account is pledged to secure the payment of the interest on and principal of the Series A -2 Notes, and (i v) the Series A -2 Bank Payment Account and the Series A-2 Bank Note Debt Service Account are pledged to secure the payment of the interest on and principal of the Series A-2 Bank Notes and obligations under the Series A-2 Reimbursement Agreement.

The Available Power Enterprise Revenues and the funds and accounts pledged under the Issuing and Paying Agent Agreement constitute a trust fund for the security and payment of the interest on and principal of the Commercial Paper Notes and the Bank Notes and all obligations of the Commission relating to such Commercial Paper Notes under the Issuing and Paying Agent Agreement and under the Series A-1 Reimbursement Agreement and the Series A-2 Reimbursement Agreement, as provided under the Issuing and Paying Agent Agreement, and shall be irrevocable until all of the Commercial Paper Notes and the Bank Notes secured by Available Power Enterprise Revenues have been paid and retired and any related obligations of the Commission under the Series A -1 Reimbursement Agreement and the Series A-2 Reimbursement Agreement have been satisfied. “Available Power Enterprise Revenues ” means all of the moneys in the Revenue Fund (as defined in the Power Bonds Indenture and comprised primarily of Power Enterprise Revenues and earnings thereon) remaining after the payments required by Subsections 5.5(c) -(e) of the Power Bonds Indenture, and all other amounts payable on parity with amounts paid under Subsection 5.5(f) of the Power Bonds Indenture pursuant to the terms thereof. “Power Enterprise Revenues” has the meaning ascribed to the term “Net Revenues” in the Power Bonds Indenture, which is defined as, for any Fiscal Year (or other designated twelve-month period), Revenues in such Fiscal Year (or other designated twelve-month period), less (a) Operation and Maintenance Expenses, and (b) any Priority R&R Fund Deposit for such Fiscal Year (or other designated twelve-month period). “Revenues” means all revenues, rates and charges received and accrued by the Commission for electric power and energy and other services, facilities and commodities sold, furnished or supplied by the Power Enterprise, together

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with income, earnings and profits therefrom (including interest earnings on the proceeds of any Bonds pending application thereof), as determined in accordance with GAAP. “Revenues” includes payments to the Power Enterprise on or with respect to loans from any Separate System maintained by the Commission . “Revenues” do not include (a) proceeds from the issuance of any obligations for borrowed money, (b) amounts loaned to the Power Enterprise, (c) Swap Agreement Receipts, (d) proceeds from taxes, (e) customer deposits while retained as such, (f) contributions in aid of construction, (g) gifts, (h) grants, (i) insurance o r condemnation proceeds that are properly allocable to a capital account, (j) non -cash revenues or gains that may be required or permitted under GAAP, including mark -to- market gains and deferred revenues, (k) money received by the Commission as the proceeds of the sale of any portion of the properties of the Power Enterprise, (l) amounts by their terms not available for the payment of Operation and Maintenance Expenses or Principal and interest on the Bonds, (m) Refundable Credits; (n) revenues of any Separ ate System, (n) Water Enterprise revenues as defined in the document or agreement governing the then-outstanding senior lien obligations of the Water Enterprise for borrowed money, and (o) Wastewater Enterprise revenues as defined in the document or agreement governing the then -outstanding senior lien obligations of the Wastewater Enterprise for borrowed money.

Under the Issuing and Paying Agent Agreement, the Commission has covenanted to establish, maintain and collect rates and charges with respect to the Power Enterprise sufficient (after giving effect to the expected receipt of refinancing proceeds from the sale of Commercial Paper Notes or Power Revenue Bonds) to pay the Commercial Paper Notes, the Parity Notes, the Bank Notes (as defined herein), and all other amounts due and owing under the Series A -1 Reimbursement Agreement and the Series A -2 Reimbursement Agreement and all other obligations payable from the Power Enterprise . The Commission has also covenanted not to issue any additional Parity Notes , bonds, notes or other obligations for borrowed money payable from revenues of the Power Enterprise unless the Commission certifies that (i) actual revenues of the Power Enterprise for the most recently completed fiscal year or (ii) projected revenues for the next three fiscal years following the issuance of such Parity Notes, additional bonds, notes, additional Series of Commercial Paper Notes, or other indebtedness are or will be sufficient to satisfy the rate covenant described above, assuming the issuance of such Parity Notes, bonds, notes, additional Series of Commercial Paper Notes, or other indebtedness and repayment, if any, from the proceeds thereof of maturing Commercial Paper Notes, the Bank Notes and all other amounts due and owing under the Series A-1 Reimbursement Agreement and the Series A-2 Reimbursement Agreement pursuant to the terms of such financing.

The Commercial Paper Notes are also payable from the proceeds of refunding Commercial Paper Notes or refunding bonds or other obligations which may be authorized and issued from time to time for such purpose.

SERIES A-1 LETTER OF CREDIT AND SERIES A-1 REIMBURSEMENT AGREEMENT Payments of principal and interest on the Series A-1 Notes will be made from drawings under the Series A-1 Letter of Credit. The following description is a summary of certain provisions of the Series A-1 Letter of Credit and the Series A -1 Reimbursement Agreement. Such summary does not purport to be a complete description or restatement of the material provisions of the Series A-1 Letter of Credit or the Series A-1 Reimbursement Agreement.

Investors should obtain and review copies of the Series A- 1 Letter of Credit and the Series A -1 Reimbursement Agreement in order to understand all of the terms of those documents . All capitalized terms appearing under this heading “SERIES A-1 LETTER OF CREDIT AND SERIES A -1 REIMBURSEMENT AGREEMENT” shall have the meanings assigned to them in the Series A-1 Reimbursement Agreement.

TIMELY PAYMENT OF PRINCIPAL OF AND/OR INTEREST ON MATURI NG SERIES A -1

NOTES IS DEPENDENT UPON THE AVAILABILITY OF PROCEEDS OF DRAWS UNDER THE SERIES A-1 LETTER OF CREDIT.

Series A-1 Letter of Credit
The Series A-1 Letter of Credit is an irrevocable transferable obligation of the Series A-1 Bank and supports the payment of principal of and interest on maturing Series A-1 Notes only. The Series A-1 Letter of Credit may not be drawn on for any other purpose. The Series A-1 Letter of Credit was issued in an amount equal to the maximum principal amount of $125,000,000 of the Series A-1 Notes plus 270 days’ interest thereon at the rate of 12% per annum calculated on the basis of a year of 365 days (the “Stated Amount”) . The Issuing and Paying Agent is authorized to draw on the Series A -1 Letter of Credit in an aggre gate amount not to exceed the Stated Amount of the Series A -1

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Letter of Credit and in accordance with the terms and conditions and, subject to the reductions and reinstatements as described therein, in amounts as set forth in the Series A -1 Letter of Credit, in one or more Drawings (as defined in the Series A-1 Letter of Credit), payable as set forth in the Series A-1 Letter of Credit on any Business Day (as defined in the Series A-1 Letter of Credit), by presentation of the appropriate certifications, (i) for the payment at maturity of the principal of and interest on Series A-1 Notes or (ii) for the payment at maturity of the principal of and interest to maturity on Series A-1 Notes that otherwise mature on or after the date that the Issuing and Paying Age nt receives a Final Drawing Notice (as defined in the Series A-1 Letter of Credit) from the Series A-1 Bank.

Upon the Series A-1 Bank honoring any Drawing, the Stated Amount and the amount available to be drawn under the Series A-1 Letter of Credit by the Issuing and Paying Agent pursuant to any subsequent Drawing shall be automatically decreased by an amount equal to the amount of such Drawing. In connection therewith, the Stated Amount shall be increased when and to the extent, but only when and to the extent (i) (A) of transfer by the Issuing and Paying Agent to the Series A-1 Bank on the date such Drawing is honored of proceeds of Series A-1 Notes issued on such date or (B) the Issuing and Paying Agent receives written notice from the Series A-1 Bank that the Series A-1 Bank has been reimbursed by or on behalf of the Commission for any amount drawn under the Series A -1 Letter of Credit by any Drawing, and (ii) that the Issuing and Paying Agent has not received a No-Issuance Notice (as defined in the Series A-1 Letter of Credit) from the Series A-1 Bank.

The Series A-1 Letter of Credit shall expire at the close of business of the Series A-1 Bank, on the date (the earliest of such date to occur referred to as the “Termination Date”) which is the earliest of (i) March 6, 2026 (unless extended pursuant to the terms of the Series A -1 Letter of Credit), (ii) the later of the date on which the Series A -1 Bank receives written notice from the Issuing and Paying Agent that an Alternate Facility (as defined in the Issuing and Paying Agent Agreement) has been substituted for the Series A-1 Letter of Credit in accordance with the Issuing and Paying Agent Agreement and the effective date of any such Alternate Facility (after the Series A -1 Bank honors any properly presented and conforming Drawing on such date), (iii) the date on which the Series A-1 Bank receives written notice from the Issuing and Paying Agent that there are no longer any Series A -1 Notes Outstanding within the meaning of the Issuing and Paying Agent Agreement and that the Issuing and Paying Agent elects to terminate the Series A-1 Letter of Credit, (iv) the earlier of (a) the fifteenth (15th) calendar day after the date on which the Issuing and Paying Agent receives the Final Drawing Notice and (b) the date on which the drawing resulting from the delivery of the Final Drawing Notice is honored, and (v) the earlier of (a) the third (3rd) Business Day (as defined in the Series A-1 Letter of Credit) after the date on which the Commission receives an Acceleration Notice (as defined herein), and (b) the date on which the Drawing resulting from the delivery of the Acceleration Notice is honored under the Series A-1 Letter of Credit.

Pursuant to the Issuing and Paying Agent Agreement, no Series A-1 Notes may be outstanding at the time of any substitution of an Alternate Facility for the Series A-1 Letter of Credit.

Series A-1 Reimbursement Agreement Events of Default
If any of the following events occurs, each such event will be an “Event of Default” under the Series A- 1 Reimbursement Agreement:
(a) the Commission fails to pay, or cause to be paid, as and when due, (i) any Reimbursement Obligation (as defined in the Series A -1 Reimbursement Agreement), or (ii) any Obligation (as defined in the Series A-1 Reimbursement Agreement) (other than a Reimbursement Obligation) under the Series A- 1 Reimbursement Agreement or under the Fee Agreement (as defined in the Series A -1 Reimbursement Agreement) and, in such case, such failure continues for five (5) Business Days (as defined in the Series A-1 Reimbursement Agreement);
(b) any representation or warranty made by or on behalf of the Commission in the Series A-1 Reimbursement Agreement or in any other Basic Document (as defined in the Series A -1 Reimbursement Agreement) or in any certificate or statement delivered thereunder is incorrect or untrue in any material respect when made or deemed to have been made or delivered; (c) the Commission defaults in the due performance or observance of certain covenants set forth in the Series A-1 Reimbursement Agreement;

11 4884-5939-2840.2
(d) the Commission defaults in the due performance or observance of any other term, covenant or agreement contained in the Series A-1 Reimbursement Agreement or any other Basic Document and such default remains unremedied for a period of thirty (30) days after the occurrence thereof; (e) the Commission or the City and County of San Francisco, directly or indirectly, (i) has entered involuntarily against it an order for relief under the United States Bankruptcy Code, as amended, (ii) becomes insolvent or does not pay, or is unable to pay, or admits in writing its inability to pay, its debts generally as they become due, (iii) makes an assignment for the benefit of creditors, (iv) applies for, seeks, consents to, or acquiesces in, the appointment of a receiver, custodian, trustee, examiner, liquidator or similar official for it or any substantial part of its Property (as defined in the Series A-1 Reimbursement Agreement), (v) institutes any proceeding seeking to have entered against it an order for relief under t he United States Bankruptcy Code, as amended, to adjudicate it insolvent, or seeking dissolution, winding up, liquidation, reorganization, arrangement, marshalling of assets, adjustment or composition of it or its debts under any law relating to bankruptcy , insolvency or reorganization or relief of debtors or fails to file an answer or other pleading denying the material allegations of any such proceeding filed against it, (vi) takes any corporate action in furtherance of any matter described in clauses (i) through (v) above, or (vii) fails to contest in good faith any appointment or proceeding described in paragraph (f) under the “SERIES A- 1 LETTER OF CREDIT AND SERIES A-1 REIMBURSEMENT AGREEMENT—Series A-1 Reimbursement Agreement Events of Default”;
(f) a custodian, receiver, trustee, examiner, liquidator or similar official is appointed for the Commission or the City and County of San Francisco or any substantial part of its Property, or a proceeding described in clause (v) of paragraph (e) under the “SERIES A -1 LETTER OF CREDIT AND SERIES A -1 REIMBURSEMENT AGREEMENT —Series A-1 Reimbursement Agreement Events of Default,” above is instituted against the Commission or the City and County of San Francisco and such proceeding continues undischarged, undismissed and unstayed for a period of thirty (30) days; (g) a debt moratorium, debt restructuring, debt adjustment or comparable restriction is imposed on the repayment when due and payable of the principal of or interest on any Debt (as defined in the Series A-1 Reimbursement Agreement) of the Commission by the Commission or any Governmental Authority with appropriate jurisdiction;
(h) any material provision of the Series A- 1 Reimbursement Agreement, the Charter or any other Basic Document at any time for any reason ceases t o be valid and binding on the Commission as a result of any legislative or administrative action by a Governmental Authority with competent jurisdiction or shall be declared in a final non appealable judgment by any court with competent jurisdiction to be null and void, invalid, or unenforceable, or the validity or enforceability thereof is publicly contested by the Commission, or the Commission publicly contests the validity or enforceability of any obligation to pay Power Enterprise Debt (as defined in the Series A -1 Reimbursement Agreement), including, without limitation, the Power Bonds Indenture, or any Authorized Representative publicly repudiates or otherwise denies in writing that it has any further liability or obligation under or with respect to an y provision of the Series A-1 Reimbursement Agreement, the Charter, any other Basic Document or any operative document related to Power Enterprise Debt, including, without limitation, the Power Bonds Indenture; (i) dissolution or termination of the existence of the Commission; (j) the Commission (i) defaults on the payment of the principal of or interest on any Power Enterprise Debt, beyond the period of grace, if any, provided in the instrument or agreement under which such Power Enterprise Debt was created or incurred; or (ii) defaults in the observance or performance of any agreement or condition relating to any Power Enterprise Debt, including, without limitation, any Bank Agreement, or contained in any instrument or agreement evidencing, securing or relating thereto, or any other default, event of default or similar event occurs or condition exists, the effect of which default, event of default or similar event or condition is to permit (determined without regard to whether any notice is required) any such Power Enterprise Debt to become immediately due and payable in full as the result of the acceleration, mandatory redemption or mandatory tender of such Power Enterprise Debt;

12 4884-5939-2840.2
(k) the Commission (i) defaults on the payment of the principal of or interest on any Debt (other than Power Enterprise Debt) aggregating in excess of $10,000,000, beyond the period of grace, if any, provided in the instrument or agreement under which such Debt (other than Power Enterprise Debt) was created or incurred; or (ii) defaults in the observance or performance of any agreement or condition relating to any Debt (other than Power Enterprise Debt) aggregating in excess of $10,000,000, or contained in any instrument or agreement evidencing, securing or relating thereto, or any other default , event of default or similar event occurs or condition exists, the effect of which default, event of default or similar event or condition is to permit (determined without regard to whether any notice is required) any such Debt to become immediately due and payable in full as the result of the acceleration, mandatory redemption or mandatory tender of such Debt (other than Power Enterprise Debt); (l) any final, nonappealable judgment or judgments, writ or writs or warrant or warrants of attachment, or any similar process or processes, in an aggregate amount not less than $10,000,000 are entered or filed against the Commission or against any of its Property and remain unpaid, unvacated, unbonded and unstayed for a period of sixty (60) days;
(m) (i) the Commission sha ll default in the due performance or observance of any material term, covenant or agreement contained in any other Basic Document and the same shall not have been cured within any applicable cure period or (ii) any “event of default” under any other Basic Document (as defined respectively therein) has occurred;
(n) a ruling, assessment, notice of deficiency or technical advice by the Internal Revenue Service is rendered to the effect that interest on the Series A-1 Notes is includable in the gross income of the holder(s) or owner(s) of such Series A -1 Notes and either (i) the Commission, after it has been notified by the Internal Revenue Service, does not challenge such ruling, assessment, notice or advice in a court of law during the period within which such challenge is permitted or (ii) the Commission challenges such ruling, assessment, notice or advice and a court of law makes a determination, not subject to appeal or review by another court of law, that such ruling, assessment, notice or advice is correctly rendered; (o) any of Fitch or S&P (i) downgrades its long-term rating of any Senior Debt (as defined in the Series A-1 Reimbursement Agreement) of the Commission to below “BBB+” (or its equivalent), or “BBB+” (or its equivalent), respectively, or (ii) suspends or withdraws its rating of the same; or (p) the passage of any Law (as defined in the Series A -1 Reimbursement Agreement) has occurred which could reasonably be expected to have a material adverse effect on the Commission’s ability to perform its obligations under the Series A-1 Reimbursement Agreement or the other Basic Documents or to result in a material adverse effect on the enforceability or validity of the Series A -1 Reimbursement Agreement or any of the other Basic Documents.

Series A-1 Reimbursement Agreement Remedies
Upon the occurrence of any Event of Default under the Series A-1 Reimbursement Agreement, the Series A-1 Bank may exercise any one or more of the following rights and remedies in addition to any other remedies provided in the Series A-1 Reimbursement Agreement or by law provided:
(a) declare all Obligations to be immediately due and payable, whereupon the same are immediately due and payable without any further notice of any kind, which notice is waived by the Commission; provided, however, that in the case of an Event of Default described in paragraph (e), (f) or (g) above under the subcaption “LETTERS OF CREDIT AND REIMBURSEMENT AGREEMENTS — Series A-1 Reimbursement Agreement Events of Default,” such acceleration will automatically occur (unless such automatic acceleration is waived by the Series A-1 Bank in writing); or (b) issue a No Issuance Notice (the effect of which will be as provided in the Series A -1 Reimbursement Agreement), reduce the Stated Amount of the Series A -1 Letter of Credit to the amount of the then outstanding Series A-1 Notes supported by the Series A -1 Letter of Credit plus a corresponding

13 4884-5939-2840.2
amount of interest coverage and/or terminate the Stated Amount as the then outstanding Series A-1 Notes are paid; or
(c) issue the Final Drawing Notice (the effect of which will be to cause the Termination Date of the Series A-1 Letter of Credit to occur on the fifteenth (15) calendar day after the date of receipt thereof by the Issuing and Paying Agent); or
(d) pursue any rights and remedies it may have under the Basic Documents; or (e) pursue any other action available at law or in equity.

Upon the occurrence of an “event of default” under the Issuing and Paying Agent Agreement, the Series A-1 Bank may by notice to the Commission and the Issuing and P aying Agent (such notice, the “Acceleration Notice”), declare the principal of all outstanding Series A -1 Notes, and the interest accrued thereon, to be due and payable immediately, whereupon the same shall become and shall be immediately due and payable and instruct the Issuing and Paying Agent to submit a Drawing under the Series A-1 Letter of Credit to pay such immediately due and payable amount.

SERIES A-2 LETTER OF CREDIT AND SERIES A-2 REIMBURSEMENT AGREEMENT [TO BE REVIEWED AND UPDATED]
Payments of principal and interest on the Series A-2 Notes will be made from drawings under the Series A- 2 Letter of Credit. The following description is a summary of certain provisions of the Series A-2 Letter of Credit and the Series A-2 Reimbursement Agreement. Su ch summary does not purport to be a complete description or restatement of the material provisions of the Series A-2 Letter of Credit or the Series A-2 Reimbursement Agreement.

Investors should obtain and review copies of the Series A-2 Letter of Credit a nd the Series A-2 Reimbursement Agreement in order to understand all of the terms of those documents. All capitalized terms appearing under this heading “SERIES A-2 LETTER OF CREDIT AND SERIES A-2 REIMBURSEMENT AGREEMENT” shall have the meanings assigned to them in the Series A-2 Reimbursement Agreement.

TIMELY PAYMENT OF PRINCIPAL OF AND/OR INTEREST ON MATURING SERIES A-2

NOTES IS DEPENDENT UPON THE AVAILABILITY OF PROCEEDS OF DRAWS UNDER THE SERIES A-2 LETTER OF CREDIT.

Series A-2 Letter of Credit
The Series A-2 Letter of Credit is an irrevocable transferable obligation of the Series A-2 Bank and supports the payment of principal of and interest on maturing Series A-2 Notes only. The Series A-2 Letter of Credit may not be drawn on for any other purpose. The Series A-2 Letter of Credit was issued in an amount equal to the maximum principal amount of $125,000,000 of the Series A-2 Notes plus 270 days’ interest thereon at the rate of 12% per annum calculated on the basis of a year of 365 days (the “Stated Amount”). The Issuing and Paying Agent is authorized to draw on the Series A-2 Letter of Credit in an aggregate amount not to exceed the Stated Amount of the Series A-2 Letter of Credit and in accordance with the terms and conditions and, subject to the reductions and reinstatements as described therein, in amounts as set forth in the Series A-2 Letter of Credit, in one or more Drawings (as defined in the Series A-2 Letter of Credit), payable as set forth in the Series A-2 Letter of Credit on any Business Day (as defined in the Series A-2 Letter of Credit), by presentation of the appropriate certifications, (i) for the payment at maturity of the principal of and interest on Series A-2 Notes or (ii) for the payment at maturity of the principal of and interest to maturity on Series A-2 Notes that otherwise mature on or after the date that the Issuing and Paying Agent receives a Final Drawing Notice (as defined in the Series A-2 Letter of Credit) from the Series A-2 Bank.

Upon the Series A-2 Bank honoring any Drawing, the Stated Amount and the amount available to be drawn under the Series A-2 Letter of Credit by the Issuing and Paying Agent pursuant to any subsequent Drawing shall be automatically decreased by an amount equal to the amount of such Drawing. In connection therewith, the Stated Amount shall be increased when and to the extent, but only when and to the extent (i) (A) of transfer by the Issuing

14 4884-5939-2840.2
and Paying Agent to the Series A-2 Bank on the date such Drawing is honored of proceeds of Series A-2 Notes issued on such date or (B) the Issuing and Paying Agent receives written notice from the Series A-2 Bank that the Series A- 2 Bank has been reimbursed by or on behalf of the Commission for any amount drawn under the Series A-2 Letter of Credit by any Drawing, and (ii) that the Issuing and Paying Agent has not received a No-Issuance Notice (as defined in the Series A-2 Letter of Credit) from the Series A-2 Bank.

The Series A-2 Letter of Credit shall expire at the close of business of the Series A-2 Bank, on the date (the earliest of such date to occur referred to as the “Termination Date”) which is the earliest of (i) [______], 20[__] (unless extended pursuant to the terms of the Series A-2 Letter of Credit), (ii) the later of the date on which the Series A-2 Bank receives written notice from the Issuing and Paying Agent that an Alternate Facility (as defined in the Issuing and Paying Agent Agreement) has been substituted for the Series A-2 Letter of Credit in accordance with the Issuing and Paying Agent Agreement and the effective date of any such Alternate Facility (after the Series A-2 Bank honors any properly presented and conforming Drawing on such date), (iii) the date on which the Series A-2 Bank receives written notice from the Issuing and Paying Agent that there are no longer any Series A-2 Notes Outstanding within the meaning of the Issuing and Paying Agent Agreement and that the Issuing and Paying Agent elects to terminate the Series A-2 Letter of Credit, (iv) the earlier of (a) the fifteenth (15th) calendar day after the date on which the Issuing and Paying Agent receives the Final Drawing Notice and (b) the date on which the drawing resulting from the delivery of the Final Drawing Notice is honored, and (v) the earlier of (a) the third (3rd) Business Day (as defined in the Series A-2 Letter of Credit) after the date on which the Commission receives an Acceleration Notice (as defined herein), and (b) the date on which the Drawing resulting from the delivery of the Acceleration Notice is honored under the Series A-2 Letter of Credit.

Pursuant to the Issuing and Paying Agent Agreement, no Series A-2 Notes may be outstanding at the time of any substitution of an Alternate Facility for the Series A-2 Letter of Credit.

Series A-2 Reimbursement Agreement Events of Default
If any of the following events occurs, each such event will be an “Event of Default” under the Series A-2 Reimbursement Agreement:
(a) the Commission fails to pay, or cause to be paid, as and when due, (i) any Reimbursement Obligation (as defined in the Series A-2 Reimbursement Agreement), or (ii) any Obligation (as defined in the Series A-2 Reimbursement Agreement) (other than a Reimbursement Obligation) under the Series A-2 Reimbursement Agreement or under the Fee Agreement (as defined in the Series A-2 Reimbursement Agreement) and, in such case, such failure continues for five (5) Business Days (as defined in the Series A- 2 Reimbursement Agreement);
(b) any representation or warranty made by or on behalf of the Commission in the Series A-2 Reimbursement Agreement or in any other Basic Document (as defined in the Series A-2 Reimbursement Agreement) or in any certificate or statement delivered thereunder is incorrect or untrue in any material respect when made or deemed to have been made or delivered; (c) the Commission defaults in the due performance or observance of certain covenants set forth in the Series A-2 Reimbursement Agreement;
(d) the Commission defaults in the due performance or observance of any other term, covenant or agreement contained in the Series A-2 Reimbursement Agreement or any other Basic Document and such default remains unremedied for a period of thirty (30) days after the occurrence thereof; (e) the Commission or the City and County of San Francisco, directly or indirectly, (i) ha s entered involuntarily against it an order for relief under the United States Bankruptcy Code, as amended, (ii) becomes insolvent or does not pay, or is unable to pay, or admits in writing its inability to pay, its debts generally as they become due, (iii ) makes an assignment for the benefit of creditors, (iv) applies for, seeks, consents to, or acquiesces in, the appointment of a receiver, custodian, trustee, examiner, liquidator or similar official for it or any substantial part of its Property (as defined in the Series A-2 Reimbursement Agreement),

15 4884-5939-2840.2
(v) institutes any proceeding seeking to have entered against it an order for relief under the United States Bankruptcy Code, as amended, to adjudicate it insolvent, or seeking dissolution, winding up, liquida tion, reorganization, arrangement, marshalling of assets, adjustment or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors or fails to file an answer or other pleading denying the material allegations of any such proceeding filed against it, (vi) takes any corporate action in furtherance of any matter described in clauses (i) through (v) above, or (vii) fails to contest in good faith any appointment or proceeding described in paragraph (f) under the “SERIES A-2 LETTER OF CREDIT AND SERIES A-2 REIMBURSEMENT AGREEMENT—Series A-2 Reimbursement Agreement Events of Default”;
(f) a custodian, receiver, trustee, examiner, liquidator or similar official is appointed for the Commission or the City and County of San Francisco or any substantial part of its Property, or a proceeding described in clause (v) of paragraph (e) under the “SERIES A-2 LETTER OF CREDIT AND SERIES A-2 REIMBURSEMENT AGREEMENT —Series A-2 Reimbursement Agreement Events of Default,” above is instituted against the Commission or the City and County of San Francisco and such proceeding continues undischarged, undismissed and unstayed for a period of thirty (30) days; (g) a debt moratorium, debt restructuring, debt adjustment or comparable restriction is imposed on the repayment when due and payable of the principal of or interest on any Debt (as defined in the Series A- 2 Reimbursement Agreement) of the Commission by the Commission or any Governmental Authority with appropriate jurisdiction;
(h) any material provision of the Series A-2 Reimbursement Agreement, the Charter or any other Basic Document at any time for any reason ceases to be valid and binding on the Commission as a result of any legislative or administrative action by a Governmental Authority with competent jurisdiction or shall be declared in a final non appealable judgment by any court with competent jurisdiction to be null and void, invalid, or unenforceable, or the validity or enforceability thereof is publicly contested by the Commission, or the Commission publicly contests the validity or enforceability of any obligation to pay Power Enterprise Debt (as defined in the Series A-2 Reimbursement Agreement), including, without limitation, the Power Bonds Indenture, or any Authorized Re presentative publicly repudiates or otherwise denies in writing that it has any further liability or obligation under or with respect to any provision of the Series A-2 Reimbursement Agreement, the Charter, any other Basic Document or any operative document related to Power Enterprise Debt, including, without limitation, the Power Bonds Indenture; (i) dissolution or termination of the existence of the Commission; (j) the Commission (i) defaults on the payment of the principal of or interest on any Power Enterprise Debt, beyond the period of grace, if any, provided in the instrument or agreement under which such Power Enterprise Debt was created or incurred; or (ii) defaults in the observance or performance of any agreement or condition relating to any Power Enterpri se Debt, including, without limitation, any Bank Agreement, or contained in any instrument or agreement evidencing, securing or relating thereto, or any other default, event of default or similar event occurs or condition exists, the effect of which defaul t, event of default or similar event or condition is to permit (determined without regard to whether any notice is required) any such Power Enterprise Debt to become immediately due and payable in full as the result of the acceleration, mandatory redemption or mandatory tender of such Power Enterprise Debt; (k) the Commission (i) defaults on the payment of the principal of or interest on any Debt (other than Power Enterprise Debt) aggregating in excess of $10,000,000, beyond the period of grace, if any, provided in the instrument or agreement under which such Debt (other than Power Enterprise Debt) was created or incurred; or (ii) defaults in the observance or performance of any agreement or condition relating to any Debt (other than Power Enterprise Debt) aggregating in excess of $10,000,000, or contained in any instrument or agreement evidencing, securing or relating thereto, or any other default, event of default or similar event occurs or condition exists, the effect of which default, event of default or simi lar event or condition is to permit (determined without regard to whether any notice is required) any such Debt to become immediately due and payable in full as the result of the acceleration, mandatory redemption or mandatory tender of such Debt (other than Power Enterprise Debt);

16 4884-5939-2840.2
(l) any final, nonappealable judgment or judgments, writ or writs or warrant or warrants of attachment, or any similar process or processes, in an aggregate amount not less than $10,000,000 are entered or filed against the Commission or against any of its Property and remain unpaid, unvacated, unbonded and unstayed for a period of sixty (60) days;
(m) (i) the Commission shall default in the due performance or observance of any material term, covenant or agreement contained in any other Basic Document and the same shall not have been cured within any applicable cure period or (ii) any “event of default” under any other Basic Document (as defined respectively therein) has occurred;
(n) a ruling, assessment, notice of deficiency or technical advi ce by the Internal Revenue Service is rendered to the effect that interest on the Series A-2 Notes is includable in the gross income of the holder(s) or owner(s) of such Series A-2 Notes and either (i) the Commission, after it has been notified by the Internal Revenue Service, does not challenge such ruling, assessment, notice or advice in a court of law during the period within which such challenge is permitted or (ii) the Commission challenges such ruling, assessment, notice or advice and a court of law m akes a determination, not subject to appeal or review by another court of law, that such ruling, assessment, notice or advice is correctly rendered; (o) any of Fitch or S&P (i) downgrades its long-term rating of any Senior Debt (as defined in the Series A-2 Reimbursement Agreement) of the Commission to below “BBB+” (or its equivalent), or “BBB+” (or its equivalent), respectively, or (ii) suspends or withdraws its rating of the same; or (p) the passage of any Law (as defined in the Series A-2 Reimbursement Agreement) has occurred which could reasonably be expected to have a material adverse effect on the Commission’s ability to perform its obligations under the Series A-2 Reimbursement Agreement or the other Basic Documents or to result in a material adverse effect on the enforceability or validity of the Series A-2 Reimbursement Agreement or any of the other Basic Documents.

Series A-2 Reimbursement Agreement Remedies
Upon the occurrence of any Event of Default under the Series A-2 Reimbursement Agreement, the Series A- 2 Bank may exercise any one or more of the following rights and remedies in addition to any other remedies provided in the Series A-2 Reimbursement Agreement or by law provided:
(a) declare all Obligations to be immediately due and payable, whereupon the sa me are immediately due and payable without any further notice of any kind, which notice is waived by the Commission; provided, however, that in the case of an Event of Default described in paragraph (e), (f) or (g) above under the subcaption “LETTERS OF CR EDIT AND REIMBURSEMENT AGREEMENTS — Series A-2 Reimbursement Agreement Events of Default,” such acceleration will automatically occur (unless such automatic acceleration is waived by the Series A-2 Bank in writing); or (b) issue a No Issuance Notice (the effect of which will be as provided in the Series A-2 Reimbursement Agreement), reduce the Stated Amount of the Series A-2 Letter of Credit to the amount of the then outstanding Series A-2 Notes supported by the Series A-2 Letter of Credit plus a corresponding amount of interest coverage and/or terminate the Stated Amount as the then outstanding Series A-2 Notes are paid; or
(c) issue the Final Drawing Notice (the effect of which will be to cause the Termination Date of the Series A-2 Letter of Credit to occur on the fifteenth (15) calendar day after the date of receipt thereof by the Issuing and Paying Agent); or
(d) pursue any rights and remedies it may have under the Basic Documents; or (e) pursue any other action available at law or in equity.

17 4884-5939-2840.2
Upon the occurrence of an “event of default” under the Issuing and Paying Agent Agreement, the Series A- 2 Bank may by notice to the Commission and the Issuing and Paying Agent (such notice, the “Acceleration Notice”), declare the principal of all outstanding Series A-2 Notes, and the interest accrued thereon, to be due and payable immediately, whereupon the same shall become and shall be immediately due and payable and instruct the Issuing and Paying Agent to submit a Drawing under the Series A-2 Letter of Credit to pay such immediately due and payable amount.

THE BANK
The following information has been furnished by the Bank for use in this Offering Memorandum. Such information has not been independently confirmed or verified by the Commission . No representation is made as to the accuracy or adequacy of such information subsequent to the date hereof. No representation is made herein by the Commission that the information contained and incorporated herein by reference is correct . The Commission has assumed no obligation to update such information in the future, or to advise of any adverse change in the financial condition of the Bank. Investors are advised to obtain and carefully review any financial reports and other information published after the date hereof about the Bank prior to making a decision to purchase the applicable Commercial Paper Notes.

Bank of America, N.A.

Bank of America, N.A. (“ Bank of America”) is a national banking association organized under the laws of the United States, with its principal executive offices located in Charlotte, North Carolina. Bank of America is a wholly-owned indirect subsidiary of Bank of America Corporation (the “ Corporation”) and is engaged in a general consumer banking, commercial banking and trust business, offering a wide range of commercial, corporate, international, financial market, retail and fiduciary banking services. As of September 30, 2021, Bank of America had consolidated assets of $2.401 trillion, consolidated deposits of $2.033 trillion and stockholder’s equity of $228.382 billion based on regulatory accounting principles.

The Corporation is a bank holding company and a financial holding company, with i ts principal executive offices located in Charlotte, North Carolina. Additional information regarding the Corporation is set forth in its Annual Report on Form 10-K for the fiscal year ended December 31, 2020, together with its subsequent periodic and current reports filed with the Securities and Exchange Commission (the “SEC”).

The SEC maintains a website at www.sec.gov which contains the filings that the Corporation files with the SEC such as reports, proxy statements and other documentation. The reports, proxy statements and other information the Corporation files with the SEC are also available at its website, www.bankofamerica.com.

The information concerning the Corporation and Bank of America is furnished solely to provide limited introductory information and does not purport to be comprehensive. Such information is qualified in its entirety by the detailed information appearing in the referenced documents and financial statements referenced therein.

Bank of America will provide copies of the most recent Bank of America Corporation Annual Report on Form 10-K, any subsequent reports on Form 10-Q, and any required reports on Form 8-K (in each case, as filed with the SEC pursuant to the Securities Exchange Act of 1934, as amended), and the publicly available portions of the most recent quarterly Call Report of the Bank delivered to the Comptroller of the Currency, without charge, to each person to whom this document is delivered, on the written request of such person. Written requests should be directed to:

Bank of America Corporation
Office of the Corporate Secretary/Shareholder Relations One Bank of America Center
150 N College St., NC1-028-28-03
Charlotte, North Carolina 28255
PAYMENTS OF PRINCIPAL AND INTEREST ON SERIES A-1 NOTES AND THE SERIES A-2 NOTES WILL BE MADE FROM DRAWINGS UNDER THE SERIES A-1 LETTER OF CREDIT AND THE SERIES A-2

18 4884-5939-2840.2
LETTER OF CREDIT, RESPECTIVELY. ALTHOUGH THE SERIES A -1 LETTER OF CREDIT AND THE SERIES A-2 LETTER OF CREDIT ARE EACH A BINDING OBLIGATION OF BANK OF AMERICA, THE SERIES A -1 NOTES AND THE SERIES A -2 NOTES ARE NOT DEPOSITS OR OBLIGATIONS OF THE

CORPORATION OR ANY OF ITS AFFILIATED BANKS AND ARE NOT GUARANTEED BY ANY OF THESE ENTITIES. THE SERIES A-1 NOTES AND THE SERIES A-2 NOTES ARE NOT INSURED BY THE FEDERAL

DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY AND ARE SUBJECT

TO CERTAIN INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF THE PRINCIPAL AMOUNT INVESTED.

The delivery of this information shall not create any implication that there has been no change in the affairs of the Corporation or Bank of America since the date of the most recent filings referenced herein, or that the information contained or referred to under this caption is correct as of any time subsequent to the referenced date.

RATINGS
Fitch has assigned a rating of “[F1+]” to the Series A-1 Notes. S&P has assigned a rating of “[A-1]” to the Series A-1 Notes. Each of such ratings is based on the understanding that the Series A- 1 Letter of Credit has been issued by the Series A-1 Bank.

Fitch has assigned a rating of “[ F1]” to the Series A -2 Notes. S&P has assigned a rating of “ [A-1]” to the Series A-2 Notes. Each of such ratings is based on the understanding that the Series A -2 Letter of Credit has been issued by the Series A-2 Bank.

Such ratings reflect only the views of such organizations and an explanation of the significance of such ratings may be obtained only from the agencies at the following addresses: Fitch Ratings, Inc., 33 Whitehall Street, New York, New York 10004 and S&P Gl obal Ratings, a division of Standard & Poor’s Financial Services LLC, 55 Water Street, New York, New York 10041. The Commission furnished to such rating agencies certain information and materials regarding the Commercial Paper Notes and the Power Enterprise. In addition, the Bank furnished certain information to such rating agencies regarding the Bank and its applicable Letter of Credit and applicable Reimbursement Agreement. There is no assurance such ratings will continue for any given period or that t hey will not be revised downward or withdrawn entirely by the rating agencies, if in the judgment of such rating agencies, circumstances so warrant and, therefore, any prospective purchaser should confirm the ratings prior to purchasing the Commercial Paper Notes. Any such change in or withdrawal of such ratings could have an adverse effect on the market for or market price of the Commercial Paper Notes . The above ratings are not recommendations to buy, sell or hold the Commercial Paper Notes . The Commis sion has not undertaken to provide notice to the holders of the Commercial Paper Notes of any change in the ratings on the Commercial Paper Notes.

The ratings on the Commercial Paper Notes may be adversely affected by a downgrade of the credit ratings of the Bank. The Commission undertakes no responsibility to oppose any such change or withdrawal. Although the Commission has covenanted to maintain a liquidity facility for the Commercial Paper Notes, it is not obligated to replace the Bank in the event of a downgrade of the Bank’s rating. The Commission has not covenanted to provide notice to holders of the Commercial Paper Notes of any downgrade of the credit ratings of the Bank.

ABSENCE OF LITIGATION
[TO BE CONFIRMED] There is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, government agency, public board or body pending or, to the best of the knowledge of the Commission after reasonable investigation, threatened in any way (i) seeking to restrain or enj oin the issuance, sale or delivery of any of the Commercial Paper Notes or (ii) challenging the validity of the Commercial Paper Notes.

THE DEALERS
The Commission has appointed Barclays Capital Inc., Goldman Sachs & Co. LLC and RBC Capital Markets, LLC, each as a non-exclusive dealer with respect to the offering and sale of the Commercial Paper Notes.

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TAX MATTERS
On March 7, 2019, Orrick, Herrington & Sutcliffe LLP, Bond Counsel to the Commission (“Bond Counsel”), delivered its opinion that, based upon an a nalysis of then existing laws, regulations, rulings and court decisions, and assuming, among other matters, the accuracy of certain representations and compliance with certain covenants, interest on the Commercial Paper Notes, when issued in accordance wit h the Issuing and Paying Agent Agreement and the Tax Certificate of the Commission, dated March 7, 2019 (as it may be amended or supplemented from time to time, the “Tax Certificate”), will be excluded from gross income for federal income tax purposes under Section 103 of the Internal Revenue Code of 1986 (the “Code”) and exempt from State of California personal income taxes. Bond Counsel’s opinion stated that interest on the Commercial Paper Notes is not a specific preference item for purposes of the federal alternative minimum tax. Bond Counsel expressed no opinion regarding any other tax consequences related to the ownership or disposition of, or the amount, accrual or receipt of interest on, the Commercial Paper Notes. A complete copy of the opinion of Bond Counsel, which speaks only as of its date, is set forth in Appendix B hereto.

Notice 94-84, 1994-2 C.B. 559, states that the Internal Revenue Service (the “IRS”) is studying whether the amount of the payment at maturity on short -term debt obligation s (i.e., debt obligations with a stated fixed rate of interest which mature not more than one year from the date of issue) that is excluded from gross income for federal income tax purposes is (i) the stated interest payable at maturity or (ii) the difference between the issue price of the short-term debt obligations and the aggregate amount to be paid at maturity of the short -term debt obligations (the “original issue discount”). For this purpose, the issue price of the short-term debt obligations is the first price at which a substantial amount of the short-term debt obligations is sold to the public (excluding bond houses, brokers, or similar persons or organizations acting in the capacity of Dealer, placement agents or wholesalers). Until the IRS provi des further guidance with respect to tax-exempt short-term debt obligations, taxpayers may treat either the stated interest payable at maturity or the original issue discount as interest that is excluded from gross income for federal income tax purposes. However, taxpayers must treat the amount to be paid at maturity on all tax -exempt short -term debt obligations in a consistent manner. Prospective purchasers of Commercial Paper Notes should consult their own tax advisors with respect to the tax consequences of ownership of Commercial Paper Notes if the prospective purchaser elects original issue discount treatment.

Commercial Paper Notes purchased, whether at original issuance or otherwise, for an amount higher than their principal amount payable at maturi ty (or, in some cases, at their earlier call date) (“Premium Notes”) will be treated as having amortizable bond premium. No deduction is allowable for the amortizable bond premium in the case of notes, like the Premium Notes, the interest on which is excl uded from gross income for federal income tax purposes. However, the amount of tax- exempt interest received, and a beneficial owner’s basis in a Premium Note, will be reduced by the amount of amortizable bond premium properly allocable to such beneficial owner. Beneficial owners of Premium Notes should consult their own tax advisors with respect to the proper treatment of amortizable bond premium in their particular circumstances.

The Code imposes various restrictions, conditions and requirements relating to the exclusion from gross income for federal income tax purposes of interest on obligations such as the Commercial Paper Notes. The Commission has made certain representations and covenanted to comply with certain restrictions, conditions and requirements designed to ensure that interest on the Commercial Paper Notes will not be included in federal gross income. Inaccuracy of these representations or failure to comply with these covenants may result in interest on the Commercial Paper Notes being included in gross income for federal income tax purposes, possibly from the date of original issuance of the Commercial Paper Notes. The opinion of Bond Counsel, which speaks only as of its date, assumed the accuracy of these representations and compliance with these covenants. Bond Counsel will not undertake, and has not undertaken, to determine (or to inform any person) whether any actions taken (or not taken), or events occurring (or not occurring), or any other matters coming to Bond Counsel’s attention af ter March 7, 2019, may adversely affect or have adversely affected the value of, or the tax status of interest on, the Commercial Paper Notes.

Accordingly, the opinion of Bond Counsel is not intended to, and may not, be relied upon in connection with any such actions, events or matters.

Although Bond Counsel rendered an opinion on March 7, 2019, that interest on the Commercial Paper Notes, when issued in accordance with the Issuing and Paying Agent Agreement and the Tax Certificate, will be excluded from gross income for federal income tax purposes and is exempt from State of California personal income taxes, the ownership or disposition of, or the accrual or receipt of amounts treated as interest on, the Commercial Paper Notes

20 4884-5939-2840.2
may otherwise affect a beneficial owner’s federal, state or local tax liability. The nature and extent of these other tax consequences depends upon the particular tax status of the beneficial owner or the beneficial owner’s other items of income or deduction. Bond Counsel expressed no opinion regarding any such other tax consequences.

Current and future legislative proposals, if enacted into law, clarification of the Code or court decisions, including any proposals, clarifications or decisions occurring after March 7, 2019, may cause interest on the Commercial Paper Notes to be subject, directly or indirectly, in whole or in part, to federal income taxation or to be subject to or exempted from state income taxation, or otherwise prevent beneficial owners from realizing the full current benefit of the tax status of such interest. The introduction or enactment of any such legislative proposals, or clarification of the Code or court decisions may also affect, perhaps significantly, the market price for, or marketability of, the Commercial Paper Notes. Prospective purchasers of the Commercial Paper Notes should consult their own tax advisors regarding the potential impact of any pending or proposed federal or state tax legislation, regulations or litigation, including those occurring after March 7, 2019, as to which Bond Counsel expressed no opinion.

The opinion of Bond Counsel delivered on March 7, 2019, was based on then current legal authority, covered certain matters not directly addressed by such authorities, and represented Bond Counsel’s judgment as to the proper treatment of the Commercial Paper Notes for federal income tax purposes. It is not binding on the IRS or the courts.

Furthermore, Bond Counsel did not give, cannot give and will not give any opinion or assurance about the activities of the Commission after the date of such opinion, or about the effect of changes in the Code, the applicable regulations, the interpretation thereof or the enforcement thereof by the IRS occurring after the date of its opini on. The Commission has covenanted, however, to comply with the requirements of the Code.

Bond Counsel’s engagement with respect to the Commercial Paper Notes ended on March 7, 2019, and, unless separately engaged, Bond Counsel is not obligated to defend the Commission or the beneficial owners regarding the tax-exempt status of the Commercial Paper Notes in the event of an audit examination by the IRS. Under current procedures, the beneficial owners, would have little, if any, right to participate in the a udit examination process.

Moreover, because achieving judicial review in connection with an audit examination of tax-exempt notes is difficult, obtaining an independent review of IRS positions with which the Commission legitimately disagrees, may not be practicable. Any action of the IRS, including but not limited to selection of the Commercial Paper Notes for audit, or the course or result of such audit, or an audit of notes presenting similar tax issues may affect the market price for, or the marketability of, the Commercial Paper Notes, and may cause the Commission or the beneficial owners to incur significant expense.

Payments on the Commercial Paper Notes generally will be subject to U.S. information reporting and possibly to “backup withholding.” Under Section 3406 of the Code and applicable U.S. Treasury Regulations issued thereunder, a non-corporate beneficial owner of Commercial Paper Notes may be subject to backup withholding with respect to “reportable payments,” which include interest paid on the Commercial Paper Notes and the gross proceeds of a sale, exchange, redemption, retirement or other disposition of the Commercial Paper Notes. The payor will be required to deduct and withhold the prescribed amounts if (i) the payee fails to furnish a U.S. taxpayer identification number (“TIN”) to the payor in the manner required, (ii) the IRS notifies the payor that the TIN furnished by the payee is incorrect, (iii) there has been a “notified payee underreporting” described in Section 3406(c) of the Code or (iv) the payee fails to certify under penalty of perjury that the payee is not subject to withholding under Section 3406(a)(1)(C) of the Code. Amounts withheld under the backup withholding rules may be refunded or credited against a beneficial owner’s federal income tax liability, if any, provided that the required information is timely furnished to the IRS.

Certain beneficial owners (including among others, corporations and certain tax-exempt organizations) are not subject to backup withholding. The failure to comply with the backup withholding rules may result in the imposition of penalties by the IRS.

NO CONTINUING DISCLOSURE FOR COMMERCIAL PAPER NOTES
The Commercial Paper Notes are exempt from the continuing disclosure requirements of Securities and Exchange Commission Rule 15c2 -12, and the Commission has not undertaken to provide annually any secondary market information with respect to the Commercial Paper Notes.

Pursuant to continuing disclosure undertakings of the Commission in connection with certain outstanding bonds, the Commission is obligated to provide certain financial information and operating data (each, an “Annual

21 4884-5939-2840.2
Report”) not later than 270 days following the end of its fiscal year (presently June 30), and to provide notices of the occurrence of certain listed events under securities laws. The Commission is obligated to file such Annual Reports and notices of listed events with the MSRB. The most recent Annual Report filed with the MSRB was prepared for the fiscal year ended June 30, 2021. The information and opinions herein and in any reports or filings pursuant to the Commission’s continuing disclosure undertakings described above are subject to change without notice, and neither the delivery thereof nor the delivery of this Offering Memorandum shall, under any circumstances, create any implication that there has been no change in the affairs of the Commission or other matters described therein or herein.

LEGAL MATTERS
[TO BE REVIEWED BY ORRICK ] On March 7, 2019, Orrick, Herrington & Sutcliffe LLP, San Francisco, California, Bond Counsel, rendered the legal opinion described in “TAX MATTERS” above, a copy of which is set forth in Appendix B hereto. Bond Counsel’s opinion speaks only as of its date. Bond Counsel is not passing upon and undertakes no responsibility for the accuracy, completeness or fairness of the information contained in this Offering Memorandum. Certain matters will be passed upon for the Bank by Nixon Peabody LLP.

22 4884-5939-2840.2

ADDITIONAL INFORMATION
Information herein concerning the Commission is limited. No attempt has been made to summarize the Issuing and Paying Agent Agreement, the Letters of Credit or the Reimbursement Agreements. The descriptions of and reference to such documents contained herein do not purport to be complete, and such references to and descriptions of such documents and all other documents and other items described herein are qualified in their entirety by reference to each such document and item. Capitalized terms used herein not otherwise de fined shall have the meanings ascribed thereto in the Issuing and Paying Agent Agreement.

Copies of the Resolution, the Ordinance, the Letters of Credit, the Reimbursement Agreements, and the Issuing and Paying Agent Agreement may be obtained from the Deal ers, and may also be obtained from the Commission at the following address:

Public Utilities Commission
of the City and County of San Francisco
Attention: Chief Financial Officer & Assistant General Manager, Business Services 525 Golden Gate Avenue, 13th Floor
San Francisco, California 94102
Tel: (415) 554-3155
Fax: (415) 554-3161
No dealer or other person has been authorized by the Commission to give any information or to make any representations other than those contained in this Offering Memorandum, and if given or made, such other information or representations must not be relied upon as having been authorized by the Commission.

The Dealers have provided the following sentence for inclusion in this Offering Memorandum. The Dealers have reviewed the information in this Offering Memorandum in accordance with, and as part of, their responsibility to investors under the federal securities law as applied to the facts and circumstances of this transaction, but the Dealers do not guarantee the accuracy or completeness of such information. (Remainder of Page Intentionally Left Blank)

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APPENDIX A

BOOK-ENTRY SYSTEM FOR COMMERCIAL PAPER NOTES
General
One master Commercial Paper Note in the aggregate principal amount not exceeding the $125,000,000 available to secure the Commercial Paper Notes (Power Series) Series A-1 and one master Commercial Paper Note in the aggregate principal amount not exceeding the $125,000,000 available to secure the Commercial Paper Notes (Power Series) Series A-2 under the applicable Letters of Credit have been registered in the name of Cede & Co., as nominee of The Depository Trust Company (“DTC”), New York, NY. DTC will act as securities depository for the Commercial Paper Notes.

The information in this section concerning DTC and DTC’s book- entry system has been obtained from sources that the Commission believes to be reliable, but the Commission takes no responsibility for the accurac y thereof.

Book-Entry System
DTC will act as securities depository for the Commercial Paper Notes. The Commercial Paper Notes 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 Commercial Paper Note certificate will be issued for each Series of the Commercial Paper Notes, in the aggregate principal amount of such Series of Commercial Paper Notes, 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 mo vement 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”) . DTC has a Standard & Poor’s rating of AA+ . The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com and www.dtc.org.

Purchases of the Commercial Paper Notes under the DTC system must be made by or through Direct Participants, which will receive a credit for the Commercial Paper Notes on DTC’s records . The ownership interest of each actual purchaser of each Commercial Paper Note (“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 Commercial Paper Notes are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in the Comme rcial Paper Notes, except in the event that use of the book-entry system for the Commercial Paper Notes is discontinued.

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To facilitate subsequent transfers, all Commercial Paper Notes deposited by Direct Participants with DTC are registered in the name of DTC’s partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of the Commercial Paper Notes with DTC and their registration in the name of Cede & Co . or such other DTC nominee do not effe ct any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Commercial Paper Notes; DTC’s records reflect only the identity of the Direct Participants to whose accounts such Commercial Paper Notes 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 Dir ect 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 the Commercial Paper Notes may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Commercial Paper Notes . For example, Beneficial Owners of Commercial Paper Notes may wish to ascertain that the nominee holding the Commercial Paper Notes 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.

Neither DTC nor Cede & Co . (nor any other DTC nominee) will consent or vote with respect to the Commercial Paper Notes unless authorized by a Direct Participant in accordance with DTC’s MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the Commission 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 the Commercial Paper Notes are credited on the record date (identified in a listing attached to the Omnibus Proxy).

Payments of principal of and interest on the Commercial Paper Notes will be made to Cede & Co., or such other nominee as may be requested by an authorized repr esentative of DTC. DTC’s practice is to credit Direct Participants’ accounts upon DTC’s receipt of funds and corresponding detail information from the Commission or the Issuing and Paying Agent, on payable date in accordance with their respective holdings shown on DTC’s records .

Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in “street name,” and will be the responsibility of such Participant and not of DTC, the Issuing and Paying Agent, or the Commission, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal of and interest on the Commerci al Paper Notes to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Commission or the Issuing and Paying Agent, 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.

NEITHER THE COMMISSION NOR THE ISSUING AND PAYING AGENT WILL HAVE ANY

RESPONSIBILITY OR OBLIGATION TO DTC PARTICIPANTS, INDIRECT PARTICIPANTS OR

BENEFICIAL OWNERS WITH RESPECT TO THE PAYMENTS OR THE PROVIDING OF NOTICE TO DTC PARTICIPANTS, INDIRECT PARTICIPANTS OR BENEFICIAL OWNERS.

Neither the Commission nor the Issuing and Paying Agent can give any assurances that DTC , DTC Participants, Indirect Participants or others will distribute payments of principal of and interest on the Commercial Paper Notes paid to DTC or its nominee, as the registered Owner, or any redemption or other notice, to the Beneficial Owners or that they will do so on a timely basis or that DTC will serve and act in a manner described in this Offering Memorandum.

Discontinuation of the Book-Entry Only System
DTC may discontinue providing its services as depository with respect to the Commercial Paper Notes at any time by giving reasonable notice to the Commission or the Issuing and Paying Agent . Under such circumstances, in the event that a successor depository is not obtained, Commercial Paper Note certificates will be printed and delivered as described in the Issuing and Paying Agent Agreement.

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The Commission may decide to discontinue use of the system of book-entry only transfers through DTC (or a successor securities depository). In that event, Commercial Paper Note certificates will be printed and delivered as described in the Issuing and Paying Agent Agreement.

SO LONG AS CEDE & CO. IS THE REGISTERED OWNER OF THE COMMERCIAL PAPER NOTES,

AS NOMINEE OF DTC, REFERENCES HEREIN TO THE OWNERS OR HOLDERS OF THE COMMERCIAL PAPER NOTES (OTHER THAN UNDER THE CAPTION “TAX MATTERS” HEREIN) SHALL MEAN CEDE & CO. AND SHALL NOT MEAN THE BENEFICIAL OWNERS OF THE COMMERCIAL PAPER NOTES.

NEITHER THE COMMISSION, THE ISSUING AND PAYING AGENT, NOR THE DEALERS WILL

HAVE ANY RESPONSIBILITY OR OBLIGATION TO DTC DIRECT P ARTICIPANTS, INDIRECT

PARTICIPANTS, OR TO ANY BENEFICIAL OWNER WITH RESPECT TO (I) THE ACCURACY OF ANY RECORDS MAINTAINED BY DTC, ANY DTC DIRECT PARTICIPANT, OR INDIRECT PARTICIPANT; (II) THE DELIVERY OF ANY NOTICE THAT IS PERMITTED OR REQUIRED TO BE GIVEN TO THE

OWNERS OF THE COMMERCIAL PAPER NOTES UNDER THE ISSUING AND PAYING AGENT AGREEMENT; (III) THE PAYMENT BY DTC OR ANY DTC DIRECT PARTICIPANT OR INDIRECT

PARTICIPANT OF ANY AMOUNT WITH RESPECT TO THE PRINCIPAL OR INTEREST DUE WITH RESPECT TO THE COMMER CIAL PAPER NOTES; (IV) ANY CONSENT GIVEN OR OTHER ACTION TAKEN BY DTC AS THE REGISTERED OWNER OF COMMERCIAL PAPER NOTES; OR (V) ANY OTHER MATTER.

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APPENDIX B

COPY OF BOND COUNSEL OPINION
[Attached]

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APPENDIX C

POWER ENTERPRISE FINANCIAL STATEMENTS