1 Business Services
April 11, 2023
WIFIA Master Agreement and
Project 1 Loan Agreement for
Wastewater Enterprise
Nikolai J. Sklaroff
Capital Finance Director
Alexandra Gunnell
Loans & Grants Director
Agenda
• WIFIA Programmatic Loan and First Sub-Agr eement
• FY 2023 Capital Financing Plan
• Wastewater Capital Financing Strategy
• Requested Commission Action:
Approve a new WIFIA Master Loan Agreement with the U.S.
Environmental Protection Agency (“EPA”) in an aggregate principal amount up to $791,337,456 and a sub-loan agreement (“Project 1 Loan Agreement”) for an initial draw down of $369,335,021 under the Master Agreement to provide partial funding for certain projects in the Wastewater Enterprise Capital Plan.
2 Water Infrastructure Finance and
Innovation Act
• Provides low-cos t federal loans for qualified projects • Administered by US EPA since 2014
• July 2018 – exec uted $699 million loan for SEP
Biosolids Digester Facilities Project (BDFP)
o June 2020, loan interest rate adjusted from 3.09% to 1.45% o March 2023, first disbursement of $122,282,825
• June 2020 – exec uted $525 million loan for SEP
Headworks Project and BDFP.
• SFPUC may request reduction of 1.45% rate in future
3 Milestones for SFPUC's
3rd WIFIA Loan
4 WIFIA Master Agreement
• EPA's new programmatic financing structure allows
borr
owers to execute sub-agreements under a master
agreement for "bundles" of projects when "shovel ready." • Defines general terms for a series of WIFIA loans, the first of w
hich is the Project 1 Loan Agreement.
• Terms and provisions are comparable Bi osolids and
Headworks WIFIA Loan Agreements.
• Commits up to $791,337,456 in partial funding (49%) from WIF
IA for certain WWE CIP projects.
5 Project 1 Loan Agreement
6 • Obligates up to $369,335,021 of the $791,337,456 from the Master Agreement
• Partial funding (49% of project costs and eligible expenses) for six WWE CIP projects:
o Westside Pump Station Reliability Improvements
o North Shore Pump Station Wet Weather Improvements
o Wawona Area Stormwater Improvement
o New Treasure Island Wastewater Treatment Plant
o Folsom Area Stormwater Improvement
o Yosemite Creek Daylighting
• May be combined with Clean
Water State Revolving Fund
loans and grants in the future.
Loan Administration
• Compliance with federal requirements (National
Env
ironmental Policy Act, Davis-Bacon, American Iron & Steel / Build America, Buy America)
7 • Quarterly cost and construction
progress reporting
• Project site visits conducted by US
EPA
• Periodic disbursement requests and
semi-annual repayments
• Project performance reporting at com
pletion and 5 years post-
completion
• Financial reporting and noticing, as is common for all revenue bonds
Revenue Bond Indenture
• Per the Wastewater Revenue Bond Indenture
o Repayment secured by senior lien pledge of
Was
tewater system revenues on parity with
outstanding Revenue Bonds and SRF Loans
o Pursuant to Article VIIIB of the Charter, as provided under P
roposition E.
• Sixteenth Supplemental Indenture - Agr eement
between the SFPUC and the Trustee; sets forth
certain contractual terms of the First Draw WIFIA
Loan Agreement, including payment and redemption
provisions
8 Key Economic Terms In Loan
• Rate on each loan set at 0.01% higher than US
Treasury’
s State and Local Government
Securities on the date of loan execution
• 4.046% as of 3/3/2023
• 35 year repayment period beginning 5 years after
compl
etion of last project, estimated 2028
9 Capital Financing Plan
(FY 2022-23)
10 Description
Approx. Issue
Size
Comm.
Action
1. Water - Clean Water State Revolving Fund
(SRF) amended Loan Agreement - Westside
Recycled Water Project
$4.9M increase
to $191M total 11/2022
2. Wastewater & Power - Renewal or
replacement of bank credit facilities for
interim funding programs
$125M - Power
$100M -
Wastewater
2/2023
3. Wastewater - Revenue Bonds Issuance $775M New
Money 3/2023
4. Wastewater - Water Infrastructure Finance
and Innovation Act (WIFIA) Loan Agreement
- Resilience Projects
$791M
Agreement and
$369M Loan
4/2023
Dates and amounts are subject to change
Capital Financing Strategy
(Wastewater Enterprise)
• Mitigate upward pressure on rates and charges
o 10-year financial plan* calls for issuance of
$4.
1 billion of Wastewater Revenue Bonds
• Actively manage capital financing costs
o Take advantage of low-cos t Federal and State loans
and options offered with such financing
o Effectively privately placing our Revenue Bonds with
Federal
or State government on favorable terms
• Maintain Wastewater Enterprise’s high ratings
• AA rating from S&P Global Ratings and Aa2 rating
fr
om Moody’s Investors Service reconfirmed
11 *10-Year Financial Plan (FY 2023-24 to FY 2032-33), February 2023 WIFIA Master Agreement
(Capital Finance Rationale)
• The Master Agreement may provi de lower cost
financing than if it had been financed wholly
through traditional Wastewater Revenue bonds
o Rate locked in advance, then not tied to market when
draw
n
o Single rate
o Deferred principal amortization; longer capitalized
int
erest period
o Flexible disbursement terms with loans drawn down by
the S
FPUC as needed during or after construction.
o One-time rate adjustment option for each draw
agr
eement executed under the Master Agreement.
12 Borrowing Rates vs. Term
13 Yield Curves
(Public Bonds vs. WIFIA Bonds)
14 • Relative rate advantage will depend on how rates
change after the WIFIA rate is locked, and what
the amortization of bonds would be.
Flexible Options for Future Borrowing
(Projected Aggregate Net Debt Service)
15 $0
$50,000,000
$100,000,000
$150,000,000
$200,000,000
$250,000,000
$300,000,000
2022
2024
2026
2028
2030
2032
2034
2036
2038
2040
2042
2044
2046
2048
2050
2052
2054
2056
2058
2060
2062
2064
2066
2023B&C Refundings NDS Planned SRF Loans WIFIA 1&2**
WIFIA 3a&b** DBC Cap Plan NDS (2024-2033) Capital Plan NDS (post 2033) *Preliminary, subject to change. Years are in fiscal year basis.
Locked In:
1.45%
GFE:
~ 3.35%*
GFE:
~4.046%*
“Good Faith Estimate”
• SB 450 enacted in O ctober 2017 requires Good Faith
Estimate
• Requires local agencies to disclose estimates of certain debt f
inancing-related information at time of authorization
• Information obtained from municipal advisor
• The following is a good faith reasonable estimate of the 2023 WI
FIA Project 1 Loan Agreement which has a
maximum principal amount of $369,335,021.
‒ True interest cost: 4.046%
‒ Finance charge of the loan: $427,246
‒ Amount of proceeds received: $368,907,775
‒ Total payment amount net of Capitalized Interest:
$957,074,401
‒ Will provide this information for all future debt authorizations 16 17
Questions
AGENDA ITEM
Public Utilities Commission
City and County of San Francisco
APPROVAL:
COMMISSION
SECRETARY Donna Hood
DEPARTMENT Business Services AGENDA NO 9
MEETING DATE April 11 , 2023
Au
thorize Wastewater Enterprise Loan Agreement: Regular Calendar Project Manager: Alexandra Gunnell
Approve New Wastewater Enterprise Water Infrastructure Finance and Innovation Act (WIFIA) Master Loan Agreement in Amount up to $791,337,456 and Project 1 Loan Agreement of $369,335,021
Summary of
Proposed
Commission
Action:
Approve a New Water Infrastructure Finance and Innovation Act Master Loan Agreement (Master Agreement) with the United States Environmental Protection Agency in an aggregate principal amount up to $791,337,456 and a sub-loan agreement (Project 1 Loan Agreement) for an initial draw down of $369,335,021 under the Master Agreement to provide partial funding for certain projects in the Wastewater Enterprise Capital Plan.
Background: The WIFIA Loan Program:
In 2014, Congress enacted the Water Infrastructure Finance and Innovation Act (WIFIA) that created the WIFIA Loan Program, a low-cost loan funding program to be administered by the United States Environmental Protection Agency (EPA). Pursuant to WIFIA, the EPA c an select qualified projects of both public and private entities and enter into loans to fund such projects for up to 49% of the cost of the project, as well as certain other eligible costs.
Selected projects comprise a broad range of projects tha t the WIFIA Loan Program can finance, including wastewater, drinking water, stormwater, and water recycling projects.
On July 26, 2018, by Resolution No. 18-0126, t he SFPUC entered into its first WIFIA loan agreement, executed on July 27, 2018 (2018 WIFIA Loan Agreement) in the aggregate principal amount of $699,242,023 to provide funding for 49% of the Biosolids Digester Facilities Project (Biosolids Project) plus certain eligible financing expenses, such as interest costs during construction (Eligible Expenses). The 2018 WIFIA Loan Agreement was executed by the EPA as part of the first round of funding of the WIFIA Loan Program. On June 9, 2020, the Commission approved a replacement agreement in the amount of $699,242,023 for the 2018 WIFIA loan Execute Agreement: Approve WIFIA Master Agreement in Amount up to $791,337,456.
Commission Meeting Date: April 11, 2023
agreement to fund a portion of the Biosolids Project adjusting the loan interest rate to 1.45% from 3.09%.
Additionally, in June of 2020, the C ommission authorized a new WIFIA loan agreement in the principal amount up to $525,000,000 to fund a portion of the Headworks Project and an increme ntal portion of the Biosolids Project.
WIFIA Master Agreement and WIFIA Project 1 Loan Agreement:
The SFPUC proposes to enter a new WIFIA Master Loan A greement (Master Agreement) with the EPA in a not to exceed $791,337,456 to provide partial funding for projects in the Wastewater Enterprise Capital Plan. The Master Agreement defines the general terms for funding a series of WIFIA loans, the first of which is described as the “ Project 1 Loan Agreement.”
The incurrence of the Project 1 Loan Agreement ( and the issuance of a WIFIA Project 1 Bond in evidence of the same ), in an aggregate initial principal amount not to exceed $369,335,021, will provide partial funding for six Wastewater Enterprise capital improvement projects. Proceeds of the loan will fund 49% of project costs plus eligible expenses for the Westside Pump Station Reliability Improvements, North Shore Pump Station Wet Weather Improvements, Wawona Area Stormwater Improvement, New Treasure Island Wastewater Treatment Plant (also known as the Treasure Island Water Resource Recovery Facility), Folsom Area Stormwater Improvement, and Yosemite Creek Daylighting.
The SFPUC is also applying for Clean Water State Revolving Fund (SRF) financing through the State Water Resources Control Board to fund several of these projects, which could be paired with WIFIA loan funding.
The terms and provisions of the Master Agreement and Project 1 Loan Agreement are comparable to the terms and provisions of the Biosolids and Headworks WIFIA Loan Agreements that SFPUC executed in 2020.
Rationale for the WIFIA Master Agreement:
The Wastewater Enterprise is facing significant rate pressure in funding its large Capital Improvement Program. Unlike WSIP, where the costs to fund the capital program could be spread over the much larger retail and wholesale water rate base, the costs of Wastewater’s capital investments are paid for by a smaller sewer service area rate base represented by retail wastewater customers located within the geographical boundaries of the City.
To mitigate such rate pressure, the SFPUC is utilizing a broad range of funding vehicles for the Wastewater CIP, such as grants, subsidized loans, low-cost Clean Water State Revolving Fund (SRF) loans, low- cost Commercial Paper (Interim Funding Program), low-cost variable and fixed rate tax exempt debt and WIFIA loan funding.
Execute Agreement: Approve WIFIA Master Agreement in Amount up to $791,337,456.
Commission Meeting Date: April 11, 2023
The Master Agreement will potentially provide funding for the Wastewater Enterprise capital program’s project s, at a cost lower than if it had been funded wholly through Wastewater Revenue Bonds. Due to the requirement for local matching funds (49%/51% split), the SFPUC will continue to fund a portion of these projects with other financing tools. The Master Agreement also allows deferred principal amortization and longer repayment terms than the SFPUC has typically employed with R evenue Bond financing sold in the public markets, which – together with other financing strategies employed by the SFPUC - will help mitigate sewer rate increases over the next 10-year financial planning period and beyond. While significant rate increases are expected the low-cost Master Agreement funding will provide significant future rate relief for ratepayers compared to other financing options.
The Master Agreement provides for flexible disbursement terms. Loan proceeds can be drawn down by the SFPUC as needed either during project construction, or at the end of construction. Interest on the l oan begins to accrue when draws are made by the SFPUC only on the amounts drawn.
The SFPUC can choose to obtain more cost-effective interim construction funding of the project in lieu of drawing on the loan (i.e., bond anticipation notes (BANs), or other short term commercial paper) if advantageous.
Should that be the case again, then the SFPUC would draw on the WIFIA loan at the end of project construction and use the proceeds to pay off the BANs. Loan repayment would then begin at that time at the higher loan rate.
The WIFIA program also allows for a one-time rate adjustment to each draw agreement that is executed under the Master Agreement. This provides the SFPUC with an option to a djust the interest rate of the Project 1 Loan agreement if the Treasury rate decreases , as long as the SFPUC has not drawn on the l oan and construction has not been completed. The SFPUC has availed itself of this option on a prior WIFIA loan.
WIFIA Loan Terms & Financing Plan:
Each WIFIA Project Loan A greement executed under the Master Agreement will provide partial funding for certain projects in the Wastewater Enterprise Capital Plan at a fixed rate. The interest rate will be set for the entire term of each loan at 0.01% higher than the U.S. Treasury’s 30-year State and Local Government Securities (SLGS) rate on the date of loan execution. Given the current market environment, the rate is estimated at 4.046% (as of March 3, 2023). This compares with an estimated planning rate of 5% for 30-year Wastewater Revenue Bond financing in our 10-year financial plan.
In comparison to Wastewater Revenue Bond financing, the Master Agreement will provide a lower interest rate and deferred prin cipal repayment terms. This will provide significant capacity to fund and deliver the Wastewater’s capital program, thereby mitigating sewer rate pressures during the repayment period compared to other financing sources.
The Master Agreement will be executed in accordance with the Wastewater Indenture. Repayment will be secured by a senior lien pledge of net revenues Execute Agreement: Approve WIFIA Master Agreement in Amount up to $791,337,456.
Commission Meeting Date: April 11, 2023
of the Wastewater Enterprise on parity with its outstanding Wastewater Revenue Bonds and SRF loans.
The Master Agreement is being executed pursuant to Article VIIIB of the Charter, as provided under Proposition E, enacted by the voters of the City and County of San Francisco in 2002. The Agreement is authorized by Board of Supervisor Ordinance No. 0089- 15, authorized in June 2015; Board Ordinance No. 111- 16, authorized in June 2016; Board Ordinance No. 144- 18, authorized in June 2018; Board Ordinance No. 173- 20, authorized in September 2020; and Board Ordinance No. 128-21, authorized in July 2021; and Board Ordinance No. 110-22, authorized in May 2022.
Transaction Schedule:
If approved by the Commission, Staff anticipates that the Master Agreement and the Project 1 Loan Agreement will be executed with the EPA in April 2023. The interest rate of the Project 1 Loan Agreement will be established on the date of execution and will be based on market conditions that day.
SFPUC anticipates executing between one to three additional WIFIA Project Loan Agreements under the Master between 2024 – 2027 to fund additional projects from the Wastewater Capital Plan, and will return to the Commission to request approval prior to the executi on of any additional WIFIA Project Loan Agreements.
Analysis of Financing Alternatives:
As part of the Wastewater Enterprise’s 10-Year Financial Plan, the SFPUC analyzes financing alternatives for the capital program, taking into consideration capital project funding needs and timing, available financing alternatives, and market conditions and impacts on the ratepayers. For each financing, SFPUC Ca pital Finance staff examines the most cost -effective financing structure within the context of the overall capital plan.
SFPUC Capital Finance staff has reviewed the Wastewater Enterprise’s outstanding debt portfolio and capital financing needs and recomme nds primary funding through long- term fixed and variable rate revenue bonds , as well as low- cost loans that are available to the SFPUC, such as WIFIA and SRF loans. Based on this review, staff has determined that WIFIA loan funding reduces costs and meets near-term construction contract award and payment requirements and mitigates future rate pressure on sewer ratepayers.
SB 450 Legislation Compliance:
In 2017, Senate Bill 450 (SB 450) was enacted. The law requires the governing body of a local public body to obtain and disclose, prior to authorization of a new bond issue, good faith estimates of the following financing-related information:
1. True Interest Cost (TIC) of the bonds.
Execute Agreement: Approve WIFIA Master Agreement in Amount up to $791,337,456.
Commission Meeting Date: April 11, 2023
2. Finance charge of the bonds: Representing the sum of all fees and charges paid to third parties.
3. Amount of proceeds received: Representing proceeds of the bonds net of fees and charges paid to third parties and any reserves or capitalized interest funded by the bonds.
4. Total payment amount: The sum of all debt service payments on the bonds calculated to the final maturity of the bonds.
SB 450 requires that the good faith estimates be obtained from either the issuer’s municipal advisor, underwriter or third- party lender. The Commission has been presented with this information in past staff reports requesting approval of bonds issued or loans executed since the enactment of SB 450.
The following represents a good faith reasonable estimate of certain costs of the Project 1 Loan Agreement for purposes of compliance with SB 450 and based upon information as of March 2 , 2023. Staff has consulted with its municipal advisor, Montague DeRose & Associates, and obtained estimates reflecting the expected closing date with regard to the Project 1 Loan Agreement. Actual results may vary.
Project 1 Loan Agreement:
• True Interest Cost: 4.046%
• Finance Charge of the Loan (reflects transaction costs of issuance):
$427,245.55
• Amount of Proceeds Received by the Public Body for Entering into the Loan (net of reserves or capitalized interest (“CAPI”) deposits and the finance charge of the loan): $368,907,774.97
• Total Payment Amount (i.e., Total Net Debt Service net of CAPI):
$957,074,401.34
The Commission is being asked to approve the form and author ize the execution of documents relating to the WIFIA Master Agreement and Project 1 Loan Agreement as described below.
(1) Master Agreement – The loan agreement between the SFPUC and the EPA that sets forth the terms and provisions of the WIFIA financing that will govern all Project Loan Agreements executed under the Master Agreement including repayment terms, security provisions, covenants, representations and warranties, events of default and remedies, indemnifications, and noticing requirements. It is closely modeled after the 2020 WIFIA loan agreements.
(2) Project 1 Loan Agreement – The loan agreement between the SFPUC and the EPA that sets forth the maximum amount of financing available from the Master Agreement to fund those projects listed in Schedule III, the interest rate, the repayment schedule, and any special project - specific
compliance requirements (such as environmental mitigation) not outlined under the Master Agreement.
(3) Sixteenth Supplemental Indenture - T he Sixteenth Supplemental Indenture is an agreement between the SFPUC and the Trustee that sets forth certain contractual terms of the Project 1 Loan Agreement , Execute Agreement: Approve WIFIA Master Agreement in Amount up to $791,337,456.
Commission Meeting Date: April 11, 2023
including payment and redemption provisions. The Fifteenth Supplemental Indenture will be approved in conjunction with the issuance of Series 2023 Bonds.
Legal and Advisory Team:
SFPUC Grants & Loans and Capital Finance staff worked collaboratively with Municipal Advisors to the SFPUC , as well as the City Attorney’s Office and outside legal counsel, to develop all aspects of the documents associated with the WIFIA loan documents, attached herein. The parties working with the SFPUC on these transactions are as follows:
• Office of the San Francisco City Attorney
• Legal Counsel: Norton Rose Fulbright LLP
• Municipal Advisor: Montague DeRose & Associates
• Trustee: U.S. Bank National Association
Considerations:
The following represent certain considerations related to the WIFIA Master Agreement in a “Questions and Answers” format:
Q. What is the amount of the WIFIA Master Agreement?
A. The Master Agreement has a not- to-exceed amount of $ 791,337,456.
This consists of (1) 49% of the combined estimated cost of certain eligible Wastewater Capital Plan projects (Wastewater Capital Improvement Plan Resilience Projects ) as defined in the loan agreements, (2) a 10% programmatic contingency, and (3) eligible financing costs . Eligible financing costs include interest a nd financing costs of Revenue Bonds related to funding the remaining portion of the projects partially funded by the WIFIA loan.
Q. Why is the SFPUC entering the Master Agreement?
A. The SFPUC is entering into the Master Agreement to provide low-cost funding with deferred and long repayment terms for 49% (plus E ligible Expenses) of project costs of the Wastewater capital projects.
Q. What is the structure of the WIFIA financing?
A. The Master Agreement sets forth the general terms that will govern multiple WIFIA agreements . Draw Agreements under the WIFIA M aster will define the specific projects that may receive WIFIA funding, specif y the funding amount that can be drawn from the WIFIA Master for those projects, and will set a fixed interest rate and repayment schedule for that loan. The interest rate on the loans will be set on the date of loan executions and will be 0.01% above the
U.S. Treasury State and Local Government
Securities (SLGS) rate as of that date . The interest rate assumed for the Project 1 Loan Agreement is estimated at a rate of 4.046%. Interest on the loan starts to accrue upon disbursement(s) of the loan, with a repayment period of up to 35 years, with repayment beginning five year s after completion of the Yosemite Creek Daylighting Project
, estimated to be
2028. Under the WIFIA Master Agreement terms, the SFPUC has the Execute Agreement: Approve WIFIA Master Agreement in Amount up to $791,337,456.
Commission Meeting Date: April 11, 2023
flexibility to repay the loan in a manner most beneficial to the funding of its capital plan. The current plan of finance is to make interest -only payments from FY2032 to 2041 and to amortize principal from FY 2042 to 2062, the final year of loan repayment.
Q. Is the SFPUC engaging in a public offering when entering the Master Agreement, as it does when it sells Revenue Bonds, and will there be disclosure requirements to investors?
A. No. The SFPUC is entering into the loan directly with the EPA, however the SFPUC expects to issue its Wastewater Revenue Bonds in a public offering to fund all or a portion of the 51% share of project costs not funded by the WIFIA loan . The WIFIA Loan its elf does not constitute a public offering of bonds to investors through an underwriting process. As such, there is no need for the SFPUC to provide disclosure to investors through an official statement as it does with its Revenue Bond offerings. However, since the Master Agreement will be on a parity lien basis with outstanding Wastewater Revenue Bonds, the SFPUC remains obligated to disclose the loan by posting
the loan documents on the EMMA website, the national
repository for investors and other members of the public to view the terms and provisions of the loan.
Moreover, the WIFIA program requires the
SFPUC to obtain a rating from a rating agency , which the SFPUC intends to do in conjunction with obtaining ratings for its upcoming 2023 revenue bonds.
Q. How will debt service on the WIFIA Master Agreement be paid? A. Debt service on the WIFIA Master Agreement is payable from “net revenues” of the Wastewater Enterprise, the source of which is its rates and charges. Net revenues are those revenues remaining after payment of Operating and Maintenance Expenses of the Wastewater Enterprise. The agreement will be secur
ed on a parity lien basis with the Wastewater
Enterprise’s outstanding senior lien Revenue Bonds and State Revolving Fund (SRF) Loans, and its terms and provisions will be in accordance with the Wastewater Indenture.
Q. What impact will the Project 1 Loan Agreement have on Wastewater Enterprise rates?
A. Assuming the interest rate of 4.046%, the Project 1 Loan Agreement will have an average Wastewater bill impact of approximately $6.56/month based on a n average annual debt service of the estimated repayment schedule.
Q. Will entering the Master Agreement have a negative impact on the Wastewater Enterprise’s credit ratings?
A. The SFPUC has applied for ratings for the Master Agreement, as is required by the EPA. Since the current 10- Year Financial Plan projects the respective CIP Projects to be funded primarily with more costly Wastewater Revenue Bonds instead of the Master Agreement, it is not expected that the credit ratings will be negatively impacted. In addition, since the Master Agreement is being entered on a parity lien basis with outstanding Wastewater Revenue Bonds and is being entered into in accordance with the Wastewater Indenture, the SFPUC does not see the legal structure of the Execute Agreement: Approve WIFIA Master Agreement in Amount up to $791,337,456.
Commission Meeting Date: April 11, 2023
loans causing an adverse impact on the Wastewater Enterprise’s credit ratings. As debt is issued, whether Wastewater Revenue Bonds, or state and federal loans, to the extent they are issued on parity with the SFPUC’s rated parity debt obligations, the debt is potentially dilutive of debt service coverage and unless rates are raised sufficiently to offset increased debt, any pronounced and protracted decline in debt service coverage could result in adverse impacts on the SFPUC’s wastewater enterprise bond rating.
Result of Inaction: A delay or denial in approving this agenda item will potentially result in the need to enter more costly financing and adversely impact the SFPUC’s ability to proceed with the timely implementation of the Wastewater Enterprise’s Capital Program.
Environmental
Review:
The six projects included in the Project 1 Loan Agreement (Westside Pump Station Reliability Improvements, North Shore Pump Station Wet Weather Improvements, Wawona Area Stormwater Improvement, New Treasure Island Wastewater Treatment Plant (also known as the Treasure Island Water Resource Recovery Facility), Folsom Area Stormwater Improvement, and Yosemite Creek Daylighting) have already undergone environmental review under the California Environmental Quality Act (CEQA), as detailed below.
The Westside Pump Station Reliability Improvements project, North Shore Pump Station Wet Weather Improvements project, Wawona Area Stormwater Improvement project, and New Treasure Island Wastewater Treatment Plant project have been approved by this Commission. Approval of the Folsom Area Stormwater Improvement project will be considered at this Commission meeting . Approval of t
he Yosemite Creek Daylighting
project will be considered at a future Commission meeting.
Future projects could be included in the Master Loan Agreement. Approval of the Master Loan Agreement does not constitute approval of any future projects.
Construction work on future projects will not be authorized to commence until the CEQA review process is completed, this Commission approves each project and authorizes construction work to begin, and the SFPUC issues a Notice to Proceed for each project.
On April 20, 2017, the San Francisco Planning Department determined the Westside Pump Station Reliability Improvements project to be categorically exempt from environmental review under the CEQA Guid
elines section
15301, Class 1 (Existing Facilities) under Case Number 2016-014160ENV.
On October 13, 2017, the San Francisco Planning Department determined the North Shore Pump Station Wet Weather Improvements project to be categorically exempt from
environmental review under the CEQA
Guidelines section 15301, Class 1 (Existing Facilities) under Case Number 2017-010521ENV.
On May 28, 2020, the San Francisco Planning Department determined the Wawona Area Stormwater Improvement and Vicente Street Water Main Execute Agreement: Approve WIFIA Master Agreement in Amount up to $791,337,456.
Commission Meeting Date: April 11, 2023
Replacement project to be categorically exempt from environmental review under the CEQA Guidelines section 15303, Class 3 (New Construction or Conversion of Small Structures) under Case Number 2020-002636ENV.
On September 23, 2021, the San Francisco Planning Department determined the Folsom Area Stormwater Improvement to be categorically exempt from environmental review under the CEQA Guidelines section 15302, Class 2 (Replacement or Reconstruction) and the CEQA Guidelines section 15303, Class 3 (New Construction or Conversion of Small Structures) under Case Number 2021-002217ENV.
On August 15, 2017, the San Francisco Planning Department determined the Upper Yosemite Creek Daylighting project to be categorically exempt from environmental review under
the CEQA Guidelines section 15304,
Class 4 (Minor Alterations to Land) under Case Number 2015-004546ENV.
On April 21, 2011, the Planning Commission, and the Treasure Island Redevelopment Authority (TIDA) certified the Final Environmental Impact Report (FEIR) for the Treasure Island/Yerba Buena Island Redevelopment Project, including the new wastewater treatment plant, (Case No. 2007.0903E) prepared pursuant to the CEQA by Motion No. 18325 and by Resolution No. 11-14-04/21, respectively.
On April 18, 2019 the Planning Department reevaluated the updated wastewater treatment plant project design and concluded that there were no substantial changes to the project or circumstances under which the project would be undertaken, and no new information which was not known at the time of the Final EIR, that would require subsequent or supplemental environmental review.
On April 23, 2019, by Resolution No. 19- 0082, this Commission approved the Project Delivery Method for Project No. CWP11001, New Treasure Island Wastewater Treatment Plant and adopted the CEQA Findings and Mitigation Monitoring and Reporting Program (MMRP) as required by CEQA.
The Categorical Exemptions for the above projects can be found here:
https://sfpuc.sharefile.com/d-s5d37ccc341844d4d859353a692e34a53 The Final EIR, CEQA Findings, 2011 memo to the Planning Commission, Resolution No. 19-0082, the MMRP and the 2019 CEQA Note to File can be found here:
https://sfpuc.sharefile.com/d-sbc4f32ed0fbf44f7a67bb78960c51d6b
Recommendation: SFPUC staff recommends that the Commission adopt the attached resolution.
Attachments: 1) Form of WIFIA Master Agreement
2) Form of the Project 1 Loan Agreement
3) Form of Sixteenth Supplemental Indenture
PUBLIC UTILITIES COMMISSION
City and County of San Francisco
RESOLUTION NO. __________
WHEREAS, At a duly called and held election on November 5, 2002, a majority of voters voting on the measure approved Proposition E (Proposition E of 2002), codified as Article VIIIB of the Charter of the City and County of San Francisco (City), which, among other things, authorized the San Francisco Public Utilities Commission (“Commission”) of the City to issue its revenue bonds, including notes, commercial paper or other forms of indebtedness, when authorized by ordinance approved by a two-thirds vote of the Board of Supervisors of the City (Board), for the purpose of reconstructing, replacing, expanding, repairing or improving water facilities or clean water facilities, or combinations of water and clean water facilities under the jurisdiction of the Commission and subject to the provision of certain certifications of an independent engineer retained by the Commission and certain certifications by the San Francisco Planning Department, which certifications make the findings and determinations set forth in Section 8B.124 of the Charter; and WHEREAS, On June 12, 2012, the Board passed by two-thirds vote Ordinance No. 115-12, approving the issuance and sale of wastewater revenue bonds by the Commission pursuant to Article VIIIB of the Charter of the City, in an aggregate principal amount not to exceed $522,810,000, to finance capital projects benefiting the Wastewater Enterprise; and WHEREAS, On June 24, 2014, the Board passed by two-thirds vote Ordinance No. 107 -14, approving the issuance and sale of wastewater revenue bonds by the Commission pursuant to Article VIIIB of the Charter of the City, in an aggregate principal amount not to exceed $819,035,941, to finance capital projects benefiting the Wastewater Enterprise; and WHEREAS, On June 9, 2015, the Board passed by two-thirds vote Ordinance No. 0089-15, which amended and supplemented Ordinance No. 107-14 to provide authority for the Commission to execute and deliver one or more State of California Water Resources Control Board Installment Sale Agreements in connection with State Revolving Loans, to finance capital projects benefiting the Wastewater Enterprise; and
WHEREAS, On June 14, 2016, the Board passed by two-thirds vote Ordinance No. 111 -16, approving the issuance and sale of wastewater revenue bonds and authorizing the Commission to execute and deliver one or more State of California Water Resources Control Board Ins tallment Sale Agreements in connection with State Revolving Loans and other forms of indebtedness, to finance capital projects benefiting the Wastewater Enterprise in an aggregate principal amount not to exceed $1,112,601,280; and
WHEREAS, On June 12, 2018, the Board passed by two-thirds vote Ordinance No. 144 -18, approving the issuance and sale of wastewater revenue bonds, including commercial paper, revolving credit notes, or bond anticipation notes, and authorizing the Commission to execute and deliver one or more State of California Water Resources Control Board Installment Sale Agreements in connection with State Revolving Loans or loan agreements with the federal government, acting through the Administrator of the Environmental Protection Agency (EPA) under the U.S. Environmental Protection Agency Water Infrastructure Finance and Innovation Act (WIFIA), to finance capital projects benefiting the Wastewater Enterprise in an aggregate principal amount not to exceed $987,414,494; and
WHEREAS, On September 29, 2020, Board passed by two-thirds vote Ordinance No. 173-20, approving the issuance and sale of tax- exempt or taxable wastewater revenue bonds and other forms of indebtedness, including State Revolving Loans, grants from the State of California Water Resources Control Board or WIFIA loan agreements, to finance capital projects benefiting the Wastewater Enterprise in an aggregate principal amount not to exceed $349,919,252; and WHEREAS, On July 27, 2021, Board passed by two-thirds vote Ordinance No. 128-21, amending Ordinance No. 173-20 approving the issuance and sale of tax-exempt or taxable wastewater revenue bonds and other forms of indebtedness, including State Revolving Loans, grants from the State of California Water Resources Control Board or WIFIA loan agreements, to finance capital projects benefiting the Wastewater Enterprise in an aggregate principal amount not to exceed $563,430,430; and
WHEREAS, On June 14, 2022, Board passed by two-thirds vote Ordinance No. 110-22 (collectively with Ordinance No. 115-12, Ordinance No. 107-14, Ordinance No. 0089-15, Ordinance No. 111-16, Ordinance No. 144-18, Ordinance No. 173-20, and Ordinance No. 128-21, the Ordinances), approving the issuance and sale of tax-exempt or taxable wastewater revenue bonds and other forms of indebtedness, including State Revolving Loans, grants from the State of California Water Resources Control Board or WIFIA loan agreements, to finance capital projects benefiting the Wastewater Enterprise in an aggregate principal amount not to exceed $704,198,901; and WHEREAS, The series of WIFIA loan agreements related to the Wastewater Enterprise’s Wastewater Capital Plan Resilience Program (defined below) will be made pursuant to the terms of a WIFIA Master Agreement, by and between the EPA and the Commission (Master Agreement) and each WIFIA loan agreement entered into thereunder will be evidenced by a bond (WIFIA Bond) issued pursuant to the Indenture, originally dated as of January 1, 2003, as supplemented and amended (the Indenture, as supplemented and amended, the Indenture) by and between the Commission and U.S.
Bank Trust Company, National Association, as successor trustee (Trustee); and WHEREAS, On June 8, 2022, the Commission filed with the EPA an application for a series of loans under the WIFIA program to finance a portion of the costs of the certain projects listed under the Wastewater Enterprise’s capital improvement plan (Wastewater Capital Plan Resilience Program) which the EPA has approved in an amount not to exceed $791,337,456 (exclusive of capitalized interest), subject to terms of the Master Agreement; and WHEREAS, The Wastewater Capital Plan Resilience Program consists of projects that are designed to repair, rehabilitate, and replace critical assets that have a significant risk of failure, and to upgrade the system to enhance reliability, resiliency, and sustainability, as generally categorized in Schedule I of the Master Agreement and more particularly described in Section 1 (Definitions) of each subsequent WIFIA loan agreement, including the WIFIA Project 1 Loan Agreement (as defined below); and
WHEREAS, The EPA proposes to make funding available to the Commission for each future project related to the Wastewater Capital Plan Resilience Program through a draw down on the Master Agreement by execution of a subsequent WIFIA loan agreement and the purchase of a WIFIA Bond, issued pursuant to a supplemental indenture and the applicable WIFIA loan agreement, to be issued by the Commission; and
WHEREAS, The initial draw down, under the terms and conditions of the Master Agreement, related to the Wastewater Capital Plan Resilience Program’s first project will be made pursuant to the terms of a WIFIA loan agreement, by and between the EPA and the Commission (WIFIA Project 1 Loan Agreement) and will be evidenced by a WIFIA Bond (WIFIA Project 1 Bond) issued pursuant to the Sixteenth Supplemental Indenture (Sixteenth Supplemental Indenture), by and between the Trustee and the Commission; and
WHEREAS, Under the authority granted or proposed to be granted under Article VIIIB of the Charter of the City and by the Ordinances and this resolution it is proposed that the Commission execute and deliver the Master Agreement, the WIFIA Project 1 Loan Agreement and the Sixteenth Supplemental Indenture, and issue the WIFIA Project 1 Bond in an aggregate initial principal amount not to exceed $369,335,021, for the purpose of financing or refinancing (through the retirement of commercial paper notes, bond anticipation notes or other interim borrowings) the Wastewater Capital Plan Resilience Program (including reimbursing the Commission for certain capital costs previously paid with proceeds of wastewater commercial paper notes or from other moneys as permitted by the Master Agreement and the WIFI A Project 1 Loan Agreement), including with respect to the first project under such program through the WIFIA Project 1 Loan Agreement and WIFIA Project 1 Bond; and
WHEREAS, The Commission has been presented with and has examined the proposed forms of the Master Agreement, the WIFIA Project 1 Loan Agreement and the Sixteenth Supplemental Indenture (including the WIFIA Project 1 Bond); and
WHEREAS, The Commission is duly authorized and empowered, pursuant to each and every requirement of law, to authorize the foregoing transactions, to execute and deliver the Master Agreement, WIFIA Project 1 Loan Agreement and the Sixteenth Supplemental Indenture, and, subject to the conditions of the Sixteenth Supplemental Indenture, to execute and deliver the WIFIA Project 1 Bond, and related documents for the purposes, in the manner and upon the terms provided herein; and WHEREAS, Article VIIIB of the Charter of the City (Section 8B.124) allows for the issuance of revenue bonds and other forms of indebtedness, subject to the provision of certain certifications of an independent engineer retained by the Commission and certain certifications by the San Francisco Planning Department, which certifications make the findings and determinations set forth in Section 8B.124; and
WHEREAS, Certificates intended to meet the requirements set forth in Section 8B.124 will have been presented for review by the Board (“Certificates”), and the Certificates will be filed with the Clerk of the Board and the Clerk of the Commission prior to any draw down of the Master Agreement, WIFIA Project 1 Loan Agreement and issuance of the WIFIA Project 1 Bond; now, therefore, be it WHEREAS, The six projects included in the Project 1 Loan Agreement (Westside Pump Station Reliability Improvements, North Shore Pump Station Wet Weather Improvements, Wawona Area Stormwater Improvement, New Treasure Island Wastewater Treatment Plant (also known as the Treasure Island Water Resource Recovery Facility), Folsom Area Stormwater Improvement, and Yosemite C reek Daylighting) have undergone environmental review under the California Environmental Quality Act (CEQA), as detailed below; and
WHEREAS, Future projects could be included in the Master Loan Agreement; and construction work on future projects will not be authorized to commence until the CEQA review process is completed, this Commission approves each project and authorizes construction work to begin, and the SFPUC issues a Notice to Proceed for each project; and
WHEREAS, On April 20, 2017, the San Franci sco Planning Department determined the Westside Pump Station Reliability Improvements project to be categorically exempt from environmental review under California Environmental Quality Act (CEQA) Guidelines section 15301, Class 1 (Existing Facilities) under Case Number 2016-014160ENV; and
WHEREAS, On October 13, 2017, the San Francisco Planning Department determined the North Shore Pump Station Wet Weather Improvements project to be categorically exempt from environmental review under the CEQA Guidelines section 15301, Class 1 (Existing Facilities) under Case Number 2017-010521ENV; and
WHEREAS, On May 28, 2020, the San Francisco Planning Department determined the Wawona Area Stormwater Improvement and Vicente Street Water Main Replacement project to be categorically exempt from environmental review under the CEQA Guidelines section 15303, Class 3 (New Construction or Conversion of Small Structures) under Case Number 2020-002636ENV; and
WHEREAS, On September 23, 2021, the San Francisco Planning Department determined the Folsom Area Stormwater Improvement project to be categorically exempt from environmental review under the CEQA Guidelines section 15302, Class 2 (Replacement or Reconstruction) and the CEQA Guidelines section 15303, Class 3 (New Construction or Conversion of Small Structures) under Case Number 2021-002217ENV; and
WHEREAS, On August 15, 2017, the San Francisco Planning Department determined the Upper Yosemite Creek Daylighting project to be categorically exempt from environmental review under the CEQA Guidelines section 15304, Class 4 (Minor Alterations to Land) under Case Number 2015-004546ENV; and
WHEREAS, On April 21, 2011, the Planning Commission, and the Treasure Island Redevelopment Authority (TIDA) certified the Final Environmental Impact Report (FEIR) for the Treasure Island/Yerba Buena Island Redevelopment Project, including the new wastewater treatment plant, (Case No. 2007.0903E) prepared pursuant to the CEQA by Motion No. 18325 and by Resolution No. 11-14-04/21, respectively; and
WHEREAS, On April 18, 2019, the Planning Department reevaluated the updated New Treasure Island Wastewater Treatment Plant project design and concluded that there were no substantial changes to the project or circumstances under which the project would be undertaken, and no new information which was not known at the time of the Final EIR, that would require subsequent or supplemental environmental review; and
WHEREAS, This Commission has reviewed and considered the information contained in the FEIR, the CEQA Findings, the CEQA Note to File, and all written and oral information provided by the Planning Department, the public, relevant public agencies, SFPUC staff and other experts and the administrative files for the Treasure Island/Yerba Buena Island Redevelopment project; WHEREAS, Authorization of the Master Loan Agreement is not an approval of the proposed Folsom Area Stormwater Improvement project, Yosemite Creek Daylighting project, or future projects to be included in the Master Loan Agreement, and the SFPUC retains discretion to, among other things, modify the proposed projects to mitigate significant environmental impacts, require the implementation of specific measures to mitigate any significant environmental impacts of the projects, or reject the projects, following completion of environmental review; now, therefore, be it
RESOLVED, This Commission has reviewed and considered the FEIR and the CEQA Note to File and the record as a whole for the Treasure Island/Yerba Buena Island Redevelopment Project, finds that the FEIR is adequate for its use as the decision–making body for the Project, and incorporates the CEQA findings contained in Resolution Number 19-0082 by this reference thereto as though set forth in this Resolution; and, be it
FURTHER RESOLVED, This Commission further finds that since the Treasure Island/Yerba Buena Island Redevelopment Project FEIR and CEQA Note to File were finalized, there have been no substantial project changes and no substantial changes in project circumstances that would require major revisions to the FEIR due to the involvement of new significant environmental effects or an increase in the severity of previously identified significant impacts, and there is no new information of substantial importance that would change the conclusions set forth in the FEIR and CEQA Note to File; and, be it FURTHER RESOLVED, By the Public Utilities Commission of the City and County of San Francisco, as follows:
Section 1. Authorization of the Master Agreement, WIFIA Project 1 Loan Agreement and Issuance of the WIFIA Project 1 Bond. The incurrence of the Master Agreement to finance certain projects under the Wastewater Capital Plan Resilience Program in an amount not to exceed $791,337,456, the WIFIA Project 1 Loan Agreement and the issuance of the WIFIA Project 1 Bond in evidence thereof, to finance the first project under such program in an aggregate initial principal amount not to exceed $369,335,021, is hereby authorized and approved by the Commission pursuant to Article VIIIB of the Charter of the City, and the Ordinances, and subject to the limitations and conditions provided herein.
The WIFIA Project 1 Bond shall be issued in accordance with the Ordinances, this resolution, the Charter, including but not limited to, the provision of certifications required by Section 8B.124 of the Charter to the Secretary of the Commission and the Clerk of the Board, and the Indenture, including but not limited to the provisions of the Sixteenth Supplemental Indenture as it relates to the WIFIA Project 1 Bond setting forth the conditions which must be satisfied prior to the issuance of all or a portion of the WIFIA Project 1 Bond. The interest rate on the WIFIA Project 1 Bond shall not exceed twelve percent (12%) and the final maturity of the WIFIA Project 1 Bond shall be the earlier of (a) October 1, 2061 and (b) the semi -annual payment date immediately preceding the date that is thirty - five (35) years following the substantial completion date, as more particularly described in the WIFIA Project 1 Loan Agreement; provided that the Commission hereby delegates to the General Manager the authority to determine, with the advice of the Commission’s municipal advisor(s), to enter into negotiations with the EPA in order to extend the final maturity of the 2023 Bond by 10 years but not beyond the longest maturity date permitted by the Water Infrastructure Finance and Innovation Act, § 5021 et seq. of Public Law 113-121 (as amended from time to time), codified as 33 U.S.C. §§ 3901- 3915, and to do any and all things and take any and all actions which may be necessary or advisable, in the General Manager’s discretion, to memorialize an extended final maturity date; provided further that no failure to negotiate any such extension shall serve to impair or otherwise affect any of the approvals or authorizations established by this resolution.
Section 2. Subsequent WIFIA Loan Agreements under Master Agreement and Draws under the WIFIA Project 1 Loan Agreement. The incurrence of separate WIFIA loan agreement(s) related to each future Wastewater Capital Plan Resilience Program project under the Master Agreement and the issuance of associated WIFIA Bonds in evidence thereof, shall require prior Commission approval before the execution and delivery thereof.
Any subsequent WIFIA Bond, shall be issued in accordance with the Ordinances, this resolution, the Charter, including but not limited to, the provision of certifications required by
Section 8B.124 of the Charter to the Secretary of the Commission and the Clerk of the Board, and the Indenture, including but not limited to the provisions of applicable subsequent supplemental indentures as it relates to subsequent WIFIA Bonds setting forth the conditions which must be satisfied prior to the issuance of all or a portion of the applicable WIFIA Bond from time to time. The interest rate on each WIFIA Bond shall not exceed twelve percent (12%) and the final maturity of each WIFIA Bond shall not extend beyond the longest maturity date permitted by the Water Infrastruct ure Finance and Innovation Act, § 5021 et seq. of Public Law 113-121 (as amended from time to time), codified as 33 U.S.C. §§ 3901-3915. The form of each future WIFIA Bond shall be substantially similar to the WIFIA Project 1 Bond.
The Commission hereby delegates to the General Manager the authority to determine, with the advice of the Commission’s municipal advisor(s), whether to draw down on the WIFIA Project 1 Loan Agreement from time to time (a “Draw Down”). Prior to or on the date of the delivery of funds associated with each Draw Down, the General Manager shall determine, upon consultation with the Commission’s municipal advisor(s), that (i) the Draw Down is likely to achieve a lower overall cost to the Commission than other alternatives, or otherwise serve as a more effective debt management tool than other alternatives, and (ii) the requirements of Section 3 of the Commission’s Debt Management Policies and Procedures, as the same may have been amended and in effect at the time of such determination, have been satisfied (collectively, “Draw Down Certification”). The General Manager is hereby authorized to deliver any certifications and take such other actions, upon the advice of the City Attorney, as are required to effect a Draw Down.
Section 3. Disposition of Revenues: Rate Covenant. Section 5.01(c) of the Indenture, which sets forth the disposition of Revenues (as defined in the Indenture) applicable to the bonds relating to the Wastewater Enterprise is hereby confirmed by the Commission and the Commission furt her confirms, pledges and covenants with the holders of the bonds, including the WIFIA Bonds, that the Revenues shall be appropriated and expended in the order of priority set forth in Section 5.01(c) of the Indenture, as the same may be amended from time to time. This Commission also declares that the Commission will comply with all of the terms, provisions and covenants contained in the Indenture, as the same may be amended from time to time, including the covenants to establish, fix, and prescribe rates, fees and charges sufficient to enable the Commission to comply with the terms, conditions and covenants of the Indenture.
Section 4. Master Agreement, the WIFIA Project 1 Loan Agreement and Sixteenth Supplemental Indenture. The proposed form of the Master Agreement, the proposed form of the WIFIA Project 1 Loan Agreement and the proposed form of the Sixteenth Supplemental Indenture providing for the issuance of the WIFIA Project 1 Bond to evidence the WIFIA Project 1 Loan Agreement, submitted to this meeting, and the terms and conditions of each such document, are hereby approved.
The General Manager of the Commission or his or her designees are authorized and directed to execute and deliver and the Secretary of the Commission or the designee thereof is authorized to attest to the Master Agreement, the WIFIA Project 1 Loan Agreement and the Sixteenth Supplemental Indenture in such forms, with such additions thereto or changes therein which they may approve with the advice of the City Attorney, such approval to be conclusively evidenced by the execution and delivery of the Master Agreement, the WIFIA Project 1 Loan Agreement and the Sixteenth Supplemental Indenture.
The Secretary of the Commission is directed to file a copy of the form of each the Master Agreement, the WIFIA Project 1 Loan Agreement and the Sixteenth Supplemental Indenture with the minutes of this meeting.
Section 5. Form of the WIFIA Project 1 Bond. The form of the WIFIA Project 1 Bond, in substantially the form attached to the Sixteenth Supplemental Indenture and presented to this meeting, is hereby approved. The General Manager of the Commission is hereby authorized and directed to
approve and to execute the WIFIA Project 1 Bond by manual or facsimile signature, and the Secretary of the Commission is hereby authorized and directed to attest, by manual or facsimile signature, with such changes, additions, amendments or modifications thereto which they, from time to time, may approve with the advice of the City Attorney, such approval to be conclusively evidenced by the execution and delivery of the WIFIA Project 1 Bond, subject to the limitations set forth in Section 1 hereof.
Section 6. General Authority. The General Manager, the Deputy General Manager and Chief Operating Officer, and the Assistant General Manager, Business Services and Chief Financial Officer of the Commission, and their duly authorized deputies and respective designees, and the officers of the City are hereby authorized and directed, each acting alone, for and in the name and on behalf of this Commission, to execute and deliver any and all documents, certificates and representations, including, but not limited to, signature certificates, no-litigation certificates and each WIFIA term sheet required by the Master Agreement, and to do any and all things and take any and all actions which may be necessary or advisable, in their discretion, to execute and deliver the Master Agreement, the WIFIA Project 1 Loan Agreement and the Sixteenth Supplemental Indenture, and to effectuate Draw Downs from time to time thereunder, the retirement of any interim borrowings to be paid from such Draw Downs, and the other actions which the Commission has approved in this resolution. The General Manager is authorized to delegate any of the responsibilities or duties set forth in this resolution to the Deputy General Manager and Chief Operating Officer, and the Assistant General Manager, Business Services and Chief Financial Officer of the Commission and their duly authorized deputies and respective designees.
Section 7. SB 450 Compliance. The Commission acknowledges that the good faith estimates required by Section 5852.1 of the California Government Code are disclosed in the staff report and are available to the public at the meeting at which this resolution is approved.
Section 8. Ratification. All actions heretofore taken by the officials, employees and agents of the Commission with respect to the authorization of the Master Agreement, the WIFIA Project 1 Loan Agreement and the authorization, sale and issuance from time to time of the WIFIA Project 1 Bond, are hereby approved, confirmed and ratified.
;
and be it
FURTHER RESOLVED, 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 April 11, 2023.
Secretary, Public Utilities Commission
EPA/HAWKINS DRAFT 2/28/23
3734007.10 046357 CTR
UNITED STATES
ENVIRONMENTAL PROTECTION AGENCY
WIFIA MASTER AGREEMENT
With the
PUBLIC UTILITIES COMMISSION OF THE CITY AND
COUNTY OF SAN FRANCISCO
For the
SFPUC WASTEWATER CAPITAL PLAN RESILIENCE
PROGRAM
Dated as of [______], 2023
i
3734007.10 046357 CTR
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS AND INTERPRETATION 2
Section 1. Definitions............................................................................................................ 2 Section 2. Interpretation ...................................................................................................... 17 ARTICLE II THE WIFIA LOAN 19
Section 3. WIFIA Loans for the Master Program ............................................................... 19 Section 4. Disbursement Conditions ................................................................................... 20 Section 5. Term ................................................................................................................... 20 Section 6. Interest Rate ....................................................................................................... 20 Section 7. Outstanding WIFIA Bond Balance; Revisions to Bond Amortization Schedule ............................................................................................................. 21 Section 8. Security and Priority; Flow of Funds. ................................................................ 22 Section 9. Payment of Principal and Interest ...................................................................... 23 Section 10. Prepayment ........................................................................................................ 26 Section 11. [Intentionally Omitted] ...................................................................................... 28 ARTICLE III CONDITIONS PRECEDENT 28
Section 12. Conditions Precedent ......................................................................................... 28 ARTICLE IV REPRESENTATIONS AND WARRANTIES 35
Section 13. Representations and Warranties of Borrower .................................................... 35 Section 14. Representations and Warranties of WIFIA Lender ........................................... 42 ARTICLE V COVENANTS 43
Section 15. Affirmative Covenants ....................................................................................... 43 Section 16. Negative Covenants ........................................................................................... 49 Section 17. Indemnification .................................................................................................. 52 Section 18. Sale of WIFIA Loan........................................................................................... 53 ARTICLE VI EVENTS OF DEFAULT AND REMEDIES 53
Section 19. System Events of Default and Remedies ........................................................... 53 Section 20. Project Events of Default and Remedies ........................................................... 57 Section 21. Accounting and Audit Procedures; Inspections; Reports and Records ............. 58 Section 22. System Financial Planning and Reporting ......................................................... 59 Section 23. Project Oversight and Monitoring ..................................................................... 61 ARTICLE VII MISCELLANEOUS 62
Section 24. Disclaimer of Warranty...................................................................................... 62 Section 25. No Personal Recourse ........................................................................................ 63 Section 26. No Third Party Rights ........................................................................................ 63 Section 27. Borrower’s Authorized Representative.............................................................. 63 Section 28. WIFIA Lender’s Authorized Representative ..................................................... 63 Section 29. Servicer .............................................................................................................. 63 Section 30. Fees and Expenses ............................................................................................. 64 Section 31. Amendments and Waivers ................................................................................. 65 Section 32. Governing Law .................................................................................................. 65 Section 33. Severability ........................................................................................................ 66 Section 34. Successors and Assigns...................................................................................... 66
ii
3734007.10 046357 CTR
Section 35. Remedies Not Exclusive .................................................................................... 66 Section 36. Delay or Omission Not Waiver.......................................................................... 66 Section 37. Counterparts ....................................................................................................... 66 Section 38. Notices; Payment Instructions ........................................................................... 67 Section 39. Effectiveness ...................................................................................................... 68 Section 40. Survival .............................................................................................................. 68 Section 41. Integration .......................................................................................................... 68
SCHEDULE I – Master Program
SCHEDULE II – Existing Indebtedness
SCHEDULE III – Requisition Procedures
SCHEDULE 15(k) – Rate Covenant
SCHEDULE 16(a) – Additional Bonds Test
EXHIBIT A – Form of WIFIA Supplemental Indenture (including WIFIA Bond form) EXHIBIT B – Form of Requisition
EXHIBIT C – Form of Construction Monitoring Report
EXHIBIT D – Form of Certification of Eligible Project Costs Documentation EXHIBIT E – Form of Public Benefits Report
EXHIBIT F-1 – Opinions Required from Counsel to Borrower EXHIBIT F-2 – Opinions Required from Bond Counsel
EXHIBIT G – Form of WIFIA Loan Request
EXHIBIT H-1 – Form of Closing Certificate
EXHIBIT H-2 – Form of Project Closing Certificate
EXHIBIT I – Form of Certificate of Substantial Completion EXHIBIT J – Form of WIFIA Project Term Sheet
EXHIBIT K – Form of WIFIA Loan Agreement
3734007.10 046357 CTR
WIFIA MASTER AGREEMENT
THIS WIFIA MASTER AGREEMENT (this “Agreement”), dated as of [______], 2023, is by and bet ween the PUBLIC UTILITIES COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO , a commission duly organized and existing under and pursuant to the Charter of the City and County of San Francisco and the laws of the State of California (the “State”), with an address at 525 Golden Gate Avenue , San Francisco, California 94102 (the “Borrower”), and the UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, an agency of the United States of America, acting by and through the Administrator of the Environmental Protection A gency (the “Administrator”), with an address at 1200 Pennsylvania Avenue NW, Washington DC 20460 (the “WIFIA Lender”), RECITALS:
WHEREAS, the Congress of the United States of America enacted the Water Infrastructure Finance and Innovation Act (“WIFIA”), § 5021 et seq. of Public Law 113-121 (as amended, and as may be further amended from time to time, the “ Act”), which is codified as 33 U.S.C. §§ 3901-3915; and
WHEREAS, the Act authorizes the W IFIA Lender to enter into agreements to provide financial assista nce with one or more eligible entities to make secured loans with appropriate security features to finance a portion of the eligible costs of projects eligible for assistance; and WHEREAS, pursuant to the Application (as defined herein), the Borrower has p roposed the development and construction of multiple Projects (as defined herein) with respect to the Master Program (as defined herein), and desires to obtain WIFIA financial assistance for each Project;
WHEREAS, the Borrower and the WIFIA Lender are entering into this Agreement to set forth certain common terms and conditions applicable to each prospective WIFIA financing; WHEREAS, the Borrower will request, from time to time, that the WIFIA Lender make a WIFIA Loan (as defined herein) to be used to pay a portion of the Eligible Project Costs (as defined herein) for a Project in accordance with the terms and conditions set forth herein and in the associated WIFIA Loan Agreement (as defined herein); WHEREAS, subject to the terms and conditions set forth herein and in each WIFIA Loan Agreement and the Act, the WIFIA Lender proposes to make funding available to the Borrower for a portion of the Eligible Project Costs of each Project through the purchase of a WIFIA Bond (as defined herein) to be issued by the Borrower for each WIFIA Loan; and WHEREAS, the WIFIA Lender has entered into this Agreement in reliance upon, among other things, the information and representations of the Borrower set forth in the A pplication and the supporting information provided by the Borrower.
2 3734007.10 046357 CTR
NOW, THEREFORE, the premises being as stated above, and for good and valuable consideration, the receipt and sufficiency of which are acknowledged to be adequate, and intending to be legally bound hereby, it is hereby mutually agreed by and bet ween the Borrower and the WIFIA Lender as follows:
ARTICLE I
DEFINITIONS AND INTERPRETATION
Section 1. De finitions.
Unless the context otherwise requires, capitalized terms used in this Agreement shall have the meanings set forth below in this Section 1 (Definitions) or as otherwise defined in this Agreement. Any term used in this Agreement that is defined by reference to any other agreement shall continue to have the meaning specified in such agreement, whether or not such agreement remains in effect.
“Act” has the meaning provided in the recitals hereto.
“Additional Bonds ” means any Bonds permitted under Section 16(a) ( Negative Covenants – Indebtedness) and under the Indenture, which Bonds are issued or incurred after the Effective Date and payable from Net System Revenues on a parity basis with debt service on the Bonds that are Outstanding.
“Additional Parity Loans” means any Parity Loans per mitted under Section 16(a) (Negative Covenants – Indebtedness ) and under the Indenture, which Parity Loans are entered into or incurred after the Effective Date.
“Additional Parity Obligations” means Additional Bonds, Additional Parity Loans and any other obligation issued or incurred by the Borrower after the Effective Date that is permitted under Section 16(a) ( Negative Covenants – Indebtedness ) and authorized under the terms of the Indenture to be secured on a parity with the WIFIA Bonds. “Additional Principal Project Contract ” means, for each Project, each Principal Project Contract entered into after the applicable WIFIA Loan Agreement Effective Date. “Administrator” has the meaning provided in the preamble hereto. “Agreement” has the meaning provided in the preamble hereto. “Anticipated WIFIA Loan Disbursement Schedule ” has, for each WIFIA Loan, the meaning provided in Section 1 (Definitions) of the corresponding WIFIA Loan Agreement. “Application” means the Borrower’s application for WIFIA financial assistance received by the WIFIA Lender on August 30, 2022.
3 3734007.10 046357 CTR
“Authorized Representative” means, with respect to the Borrower, such o fficers or individuals that have authorization from the applicable governing body to perform the act being referred to.
“Bank Secrecy Act ” means the Bank Secrecy Act of 1970, as amended, and the regulations promulgated thereunder.
“Bankruptcy Related Event ” means, with respect to any Person, (a) an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, reorganization or other relief in respect of such Person or any of its debts, or of a substantial part of the assets thereof, under any Insolvency Laws, or (ii) the appointment of a receiver, trustee, liquidator, custodian, sequestrator, conservator or similar official for such Person or for a substantial part of the assets thereof and, in any case referred to in the foregoing subclauses (i) and (ii), such proceeding or petition shall continue undismissed for sixty (60) days or an order or decree approving or ordering any of the foregoing shall be ent ered; (b) such Person shall (i) apply for or consent to the appointment of a receiver, trustee, liquidator, custodian, sequestrator, conservator or similar official therefor or for a substantial part of the assets thereof, (ii) generally not be paying its debts as they become due unless such debts are the subject of a bona fide dispute, or become unable to pay its debts generally as they become due, (iii) solely with respect to the Borrower, fail to make a payment of WIFIA Debt Service in accordance with the provisions of Section 9 ( Payment of Principal and Intere st) and such failure is not cured within thirty (3 0) days following notification by the WIFIA Lender of failure to make such payment, (iv) make a general assignment for the benefit of creditors, (v) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition with respect to it described in clause (a) of this definition, (vi) commence a voluntary proceeding under any Insolvency Law, or file a voluntary petition seeking liquidation, reorganization, an arran gement with creditors or an order for relief under any Insolvency Law, (vi i) file an answer admitting the material allegations of a petition filed against it in any proceeding referred to in the foregoing subclauses (i) through (v), inclusive, of this clause (b), or (viii) take any action for the purpose of effecting any of the foregoing, including seeking approval or legislative enactment by any Governmental Authority to authorize commencement of a voluntary proceeding under any Insolvency Law ; (c) solely with respect to the Borrower, (i) the Trustee shall commence a process pursuant to which all or a substantial part of the System Revenues may be sold or otherwise disposed of in a public or private sale or disposition pursuant to a foreclosure of the Liens thereon securing the Parity Obligations, or (ii) the Trustee shall commence a process pursuant to which all or a substantial part of the System Revenues may be sold or otherwise disposed of pursuant to a sale or disposition of the System Revenues in lieu of foreclosure; or (d) solely with respect to the Borrower, the Trustee shall transfer, pursuant to directions issued by the Bondholders, funds on deposit in any of the System Accounts upon the occurrence and during the continuation of a System Event of Default under this Agreement or an event of default under the Indenture Documents for application to the prepayment or repayment of any principal amount of the Parity Obligations other than in accordance with the provisions of the Indenture. “Base Case Finan cial Model ” means a financial model prepared by the Borrower forecasting the capital costs of the System (including the Master Program) and the rates, revenues, operating expenses and major maintenance requirements of the System for the Forecast Period and based upon assumptions and methodology provided by the Borrower and
4 3734007.10 046357 CTR
acceptable to the WIFIA Lender as of the Effective Date, which model shall be provided to the WIFIA Lender as a fully functional Microsoft Excel – based financial model or such other format requested by the WIFIA Lender.
“Board of Supervisors” means the Board of Supervisors of the City from time to time or any other governing board of the City hereafter provided for by law. “Bond” has the meaning provided in the Indenture and includes each WIFIA Bond. “Bond Amortization Schedule” has, for each WIFIA Bond, the meaning provided in Section 1 (Definitions) of the corresponding WIFIA Loan Agreement. “Bond Reserve Fund” has the meaning provided in the Indenture. “Bond Reserve Fund Policy” has the meaning provided in the Indenture. “Bondholder” means, when used with respect to any WIFIA Bond, the WIFIA Lender (and any subsequent registered holder of any WIFIA Bond) and, when used with respect to any other Bond or Obligation, the registered owner of such Bond or Obligation in accordance with the Indenture.
“Borrower” has the meaning provided in the preamble hereto. “Borrower Fiscal Year” means (a) as of the Effective Date, a fiscal year of the Borrower commencing on July 1 of any calendar year and en ding on June 30 of the immed iately succeeding calendar year or (b) such other fiscal year as the Borrower may hereafter adopt. “Borrower’s Authorized Representative” means any Person who shall be designated as such pursuant to Section 27 (Borrower’s Authorized Representative). “Business Day ” means any day other than a Saturday, a Sunday or a day on which offices of the Government or the State are authorized to be closed or on which commercial banks are authorized or required by law, regulation or executive order to be closed in New York, New York or San Francisco, California.
“Capital Expenditures ” means expenditures made or liabilities incurred for the acquisition of any assets , improvements or replacements thereto that have a useful life of more than one (1) year and that are capitalized in accordance with GAAP. “Capital Project Account” has the meaning provided in the Indenture. “Capital Project Fund” has the meaning provided in the Indenture. “Capitalized Interest Period ” has, for each WIFIA Loan, the meaning provided in Section 1 (Definitions) of the corresponding WIFIA Loan Agreement. “Charter” means the Charter of the City as it now exists or as it may hereafter be amended, and any new or successor Charter.
5 3734007.10 046357 CTR
“City” means the existing political subdivisio n known as the City and County of San Francisco, in the State of California, as the same is organized and existing under and by virtue of the Constitution and laws of the State of California and the Charter, and any public body hereafter created as a successor thereto.
“Closing Certificate ” has the meaning provided in Section 12(a)(v) ( Conditions Precedent – Conditions Precedent to Effectiveness).
“Congress” means the Congress of the United States of America. “Construction Monitoring Report” means, for each Project, a report on the status of the Project, substantially in the form of Exhibit C (Form of Construction Monitoring Report), unless otherwise agreed to be in a different form by the WIFIA Lender. “Construction Period” means, with respect to each WIFI A Loan Agreement, the period from the applicable WIFIA Loan Agreement Effective Date through the applicable Substantial Completion Date.
“Construction Period Servicing Fee” has the meaning set forth in Secti on 30(a )(ii) (Fees and Expenses – Construction Period Servicing Fee), and, for each WIFIA Loan, shall be in the amount specified in Section 11(a)(ii) (Fees and Expenses) of the corresponding WIFIA Loan Agreement and paid in accordance with Section 30 (Fees and Expenses) hereof. “Control” means, when used with respect to any particular Person, the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities or partnership or other ownership interests, by contract or otherwise, and the terms “ Controlling” and “Controlled by” have meanings correlative to the foregoing. “CPI” means the Consumer Price Index for All Urban Consumers (CPI -U) for the U.S.
City Average for All Items, 1982-84=100 (not seasonally adjusted) or its successor, published by the Bureau of Labor Statistics and located at https://www.bls.gov/news.release/cpi.t01.htm. “Debt Service” has the meaning provided in the Indenture. “Debt Service Payment Commencement Date” has, for each WIFIA Loan, the meaning provided in Section 1 (Definitions) of the corresponding WIFIA Loan Agreement. “Default Rate” means, with respect to each WIFIA Loan, an interest rate equal to the sum of (a) the corresponding WIFIA Interest Rate plus (b) two hundred (200) basis points. “Development Default ” means , with respect to any Project, (a) the Borrower fails to diligently prosecute the work related to such Project or (b) the Borrower fails to achieve Substantial Completion of such Project by the applicable Development Default Date. “Development Default Date” has, for each Project, the meaning provided in Section 1 (Definitions) of the corresponding WIFIA Loan Agreement and shall be the calendar date that, as
6 3734007.10 046357 CTR
of the applicable WIFIA Loan Agreement Effective Date, is twenty -four (24) months following the Projected Substantial Completion Date set forth in such WIFIA Loan Agreement. “Disbursement” means a disbursement of WIFIA Loan proceeds, subject to and in accordance with this Agreement and the corresponding WIFIA Loan Agreement. “Disbursement Date” means , for each WIFIA Loan, any date on which the WIFIA Lender makes a D isbursement pursuant to Section 4 ( Disbursement Conditions) hereof and the corresponding WIFIA Loan Agreement.
“Dollars” and “$” means the lawful currency of the United States of America. “Effective Date” means the date of this Agreement.
“Eligible Project Costs ” means, with respect to each Project, amounts in the Project Budget relating to such Project that have been approved by the WIFIA Lender, which are paid by or for the account of the Borrower in connection with such Project ( including, as applicable, Project expenditures incurred prior to the receipt of WIFIA credit assistance) , which shall arise from the following:
(a) development-phase activities, including planning, feasibility analysis (including any related analysis necessary to carry out an eligible project) , revenue forecasting, environmental review, permitting, preliminary engineering and design work and other preconstruction activities;
(b) construction, reconstruction, rehabilitation, and replacement activities; (c) the acquisition of real property or an interest in real property (including water rights, land relat ing to the Project and improvements to land), environmental mitigation (including acquisitions pursuant to Section 3905(8) of Title 33 of the United States Code), construction contingencies, and acquisition of equipment; or (d) capitalized interest (with respect to Obligations other than the WIFIA Loan) necessary to meet market requirements, reasonably required reserve funds, capital issuance expenses, and other carrying costs during construction; provided that Eligible Project Costs must be consistent with all other applicable federal law , including the Act.
“Eligible Project Costs D oc umentation” means , with respect to each Project, all supporting documentation with respect to the Eligible Project Costs, including copies of invoices and records evidencing incurred or previously paid Eligible Project Costs, which documentation should contain sufficient detail satisfactory to the WIFIA Lender (e.g. if the Borrower intends to utilize WIFIA Loan proceeds to make construction progress payments for Eligible Project Costs, the documentation should demonstrate that such progress payments are c ommensurate with the cost of the work that has been completed).
7 3734007.10 046357 CTR
“EMMA” means the Electronic Municipal Market Access system as described in 1934 Act Release No. 59062 and maintained by the Municipal Securities Rulemaking Board established pursuant to Section 15B(b)1 of the Securities Exchange Act of 1934, as amended, and its successors.
“Environmental Laws” has the meaning provided in Section 13(r) (Representations and Warranties of Borrower – Environmental Matters).
“EPA” means the United States Environmental Protection Agency. “Event of Loss ” means any event or series of events that causes any portion of the System to be damaged, destroyed or rendered unfit for normal use for any reason whatsoever, including through a failure of title, or any loss of such property through eminent domain. “Existing Indebtedness ” means indebtedness of the Borrower that has been issued or incurred prior to the Effective Date, as listed and described in Schedule II ( Existing Indebtedness).
“Existing Principal Project Contract ” means , with respect to each Project, each Principal Project Contract existing as of the applicable WIFIA Loan Agreement Effective Date, as set forth in Part A of Schedule 13 (n) ( Existing Principal Project Contracts ) to the corresponding WIFIA Loan Agreement.
“Federal Fiscal Year” or “FFY” means the fiscal year of the Government, which is the twelve (12) month period that ends on September 30 of the specified calendar year and begins on October 1 of the preceding calendar year.
“Final Disbursement Date” means, with respect to each WIFIA Loan, the earliest of (a) the date on which such WIFIA Loan has been disbursed in full; (b) the date on which the Borrower has certified to the WIFIA Lender that it will not request any further D isbursements under such WIFIA L oan; (c) the date on which the WIFIA Lender terminates its obligations relating to disbursements of any undisbursed amounts of such WIFIA Loan in accordance with Section 19 ( System Events of Default and Remedies ) or Section 20 ( Project Events of Default and Remedies); or (d) the date that is one (1) year after the Substantial Completion Date of the Project relating to such WIFIA Loan.
“Final Maturity Date ” has, for each WIFIA Loan, the meaning provided in Section 1 (Definitions) of the corresponding WIFIA Loan Agreement. In no event shall the Final Maturity Date for any WIFIA Loan extend beyond the longest maturity date permitted by the Act. “Financial Plan” means the financial plan (s) and financial projection(s) to be delivered by the Borrower to the WIFIA Lender pursuant to Section 22 (System Financial Planning and Reporting).
“Financial Statements” has the meaning provided in Section 13(x) (Representations and Warranties of Borrower – Financial Statements).
8 3734007.10 046357 CTR
“First Disbursement Date” means, for each WIFIA Loan, the date on which the WIFIA Lender makes the first Disbursement pursuant to Section 4 ( Disbursement Conditions ) hereof and the corresponding WIFIA Loan Agreement.
“Forecast Period” means, as of any date, the time period from and including the then- current Borrower Fiscal Year until the later ending date of either (a) the five (5) immediately succeeding Borrower Fiscal Years or (b) the end of the Borrower Fiscal Year in which the Borrower’s then-currently effective capital improvement plan for the System concludes. “GAAP” means generally accepted accounting principles for governmental entities, as established by GASB, in effect from time to time in the United States of America. “GASB” means the Government Accounting Standards Board, or any successor ent ity with responsibility for establishing accounting rules for governmental entities. “Government” means the United States of America and its departments and agencies. “Governmental Approvals ” means all authorizations, consents, approvals, waivers, exceptions, variances, filings, permits, orders, licenses, exemptions and declarations of or with any Governmental Authority.
“Governmental Authority ” means any federal, state, provincial, county, city, town, village, municipal or other government or governmental department, commission, council, court, board, bureau, agency, authority or instrumentality (whether executive, legislative, judicial, administrative or regulatory), of or within the United States of America or its territories or possessions, including the State and its counties and municipalities, and their respective courts, agencies, instrumentalities and regulatory bodies, or any entity that acts “on behalf of” any of the foregoing, whether as an agency or authority of such body. “Indemnitee” has the meaning provided in Section 17 (Indemnification). “Indenture” means that certain Indenture, dated as of January 1, 2003, by and between the Borrower and the Trustee, as amended and supplemented from time to time (including by the WIFIA Supplemental Indenture).
“Indenture Documents ” means the Indenture, each Supplemental Indenture, and each other agreement, instrument and document executed and delivered pursuant to or in connection with any of the foregoing.
“Insolvency Laws” means the United States Bankruptcy Code, 11 U.S.C. § 101 et seq., as from time to time amended and in effect, and any state bankruptcy, insolvency, receivership, conservatorship or similar law now or hereafter in effect. “Interest Fund” means the fund of that name established pursuant to Section 5.02 of the Indenture for the purposes specified in Section 5.03 of the Indenture. “Interest Only Period ” has, for each WIFIA Loan, the meaning provided in Section 1 (Definitions) of the corresponding WIFIA Loan Agreement.
9 3734007.10 046357 CTR
“Interim Financing” means interim bond anticipation notes, commercial paper or other short-term temporary financing, in each case with a maturity not later than five (5) years following the issuance or incurrence thereof, the proceeds of which are applied to pay Eligible Project Costs.
“Investment Grade Rating ” means a public rating no lower than ‘ BBB-’, ‘ Baa3’, ‘bbb-’, ‘BBB (low)’, or higher, from a Nationally Recognized Rating Agency. “Letter of Credit Agreement” has the meaning provided in the Indenture. “Lien” means any mortgage, pledge, hypothecation, assignment, mandatory deposit arrangement, encumbrance, attachment, lien (statutory or other), charge or other security interest, or preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever, including any sale -leaseback arrangement, any conditional sale or other title retention agreement, any financing lease having substantially the same effect as any of the foregoing, and the filing of any financing statement or similar instrument under the UCC or any other applicable law.
“Loss Proceeds” means any proceeds of builders’ risk or casualty insurance or proceeds of eminent domain proceedings resulting from any Event of Loss. “Master Availability Period ” means the period from the Ef fective Date until the date that is five (5) years following the Effective Date.
“Master Program ” means the Borrower ’s anticipated improvements to the System through the development and construction of each Project, which shall be within the scope described in Schedule I (Master Program) and specifically defined in the corresponding WIFIA Loan Agreement.
“Master Program Amount” means $791,337,456.
“Material Adverse Effect ” means a material adverse effect on (a) the System, the Projects or the System Revenue s; (b) the business, operations, properties, condition (financial or otherwise) or prospects of the Borrower; (c) the legality, validity or enforceability of any material provision of any Indenture Document or WIFIA Loan Document; (d) the ability of the Borrower to enter into, perform or comply with any of its material obligatio ns under any Indenture Document or WIFIA Loan Document; (e) the validity, enforceability or priority of the Liens provided under the Indenture Documents on the Net System Revenues in favor of the Secured Parties; or (f) the WIFIA Lender’s rights or remedies available under any WIFIA Loan Document.
“Maximum Principal Amount” means, for each WIFIA Loan, the maximum amount of Disbursements that may be made by the WIFIA Lender with respect to such WIFIA Loan, as specified in the corresponding WIFIA Loan Agreement and excluding any interest that is capitalized and added to the principal balance of such WIFIA Loan in accordance with this Agreement and the other applicable WIFIA Loan Documents.
10 3734007.10 046357 CTR
“Nationally Recognized Rating Agency” means any nationally recognized statistical rating organization identified as such by the Securities and Exchange Commission. “NEPA” means the National Environmental Policy Act of 1969, as amended, and any successor statute of similar import, and regulations thereunder, in each case as in effect from time to time.
“NEPA Determination ” means, with respect to each Project, the final NEPA decision issued for such Project by EPA in accordance with NEPA. “Net Loss Proceed s” means Loss Proceeds after excluding any proceeds of delay- in- start-up insurance, proceeds covering liability of the Borrower to third parties and Loss Proceeds used or to be used by the Borrower to repair or restore the System in accordance with Section
6.20 of the Indenture.
“Net System Revenues ” means all of the System Revenues less all Operation s and Maintenance Expenses.
“Obligations” means debt of the Borrower that is secured by a pledge and lien on Net System Revenues, including both Parity Obligations and Subordinated Obligations. “OFAC” means the Office of Foreign Assets Control of the United States Department of the Treasury.
“Operating Period Servicing Fee” has the mean ing set forth in Section 30(a )(iii) (Fees and Expenses – Operating Period Servicing Fee).
“Operations and Maintenance Expenses ” means the reasonable and necessary costs of operating and maintaining the System , calculated on generally accepted accounting principles, including (among other things) salaries and wages, fees for services, costs of materials, supplies and fuel, reasonable expenses of management, legal fees, accounting fees, repairs and other expenses necessary to maintain and preserve the System in good repair and working order, and reasonable amounts for administration, overhead, insurance, taxes (if any), and the payment of pension charges and proportionate payments to such compensation and other insurance or outside reserve funds as the Borrower may establish or the Board of Supervisors may require with respect to emplo yees of the Borrower, as provided in the Charter; provided, howeve r, that the term “ Operations and Maintenance E xpenses” excludes in all cases (a) depreciation and obsolescence charges or reserves therefor, (b) amortization of intangibles or other bookkeeping entries of a similar nature, (c) costs of capital additions, replacements, betterments, extensions or improvements to the System , which under generally accepted accounting principles are chargeable to a capital account or to a reserve for depreciation, (d) charges for the payment of principal and interest on any revenue bonds or other indebtedness heretofore or hereafter issued for System purposes and (e) such costs as are scheduled to be paid by the Borrower from moneys other than System Revenues, such moneys to be clearly available for such purpose. “Organizational Documents ”
means: (a) with respect to any Person that is a
Governmental Authority, (i) the constitutional and statutory provisions that are the basis for the existence and authority of such Governmental Authority, including any enabling statutes,
11 3734007.10 046357 CTR
ordinances or public charters and any other organic laws establishing such Governmental Authority and ( ii) the bylaws, code of regulations , operating procedures or other organizational documents of or adopted by such Governmental Authority by which such Governmental Authority, its powers, operations or procedures or its securities, bonds, notes or other obligations are governed or from which such powers are derived; and (b) with respect to any Person that is not a Governmental Authority, (i ) to the extent such Person is a corporation, the certificate or articles of incorporation and the by-laws of such Person, (ii) to the extent such Person is a limited liability company, the certificate of formation o r articles of formation or organization and operating or limited liability company agreement of such Person and ( iii) to the extent such Person is a partnership, joint venture, trust or other form of business, the partnership, joint venture or other applicable agreement of formation or organization and any agreement, instrument, filing or notice with respect thereto filed in connection with its formation or organization with the applicable Governmental Authority in the jurisdiction of its formation or organization and, if applicable, any certificate or articles of formation or organization or formation of such Person.
“Outstanding” has the meaning provided in the Indenture. “Outstanding WIFIA Bond Balance” means, with respect to each WIFIA Bond, the sum of (a) the aggregate principal amount of such WIFIA Bond drawn by the Borrower (i.e., the sum of the WIFIA Loan proceeds disbursed by the WIFIA Lender) plus (b) capitalized interest added to the pri ncipal balance of such WIFIA Bond during the Capitalized Inter est Period pursuant to Section 9(c) (Payment of Principal and Interest – Capitalized Interest Period) minus (c) the aggregate principal amount of such WIFIA Bond repaid by the Borrower , as determined in accordance with Section 7 ( Outstanding WIFIA Bond Balance; Revisions to Bond Amortization Schedule).
“Parity Loans” has the meaning provided in the Indenture. “Parity Obligations” means the Bonds, any Parity Loans , any other Existing Indebtedness of the Borrower that is on a parity with the Bonds as of the E ffective Date pursuant to the terms of the Indenture and any Additional Parity Obligations. “Parity State Loan ” means any Parity Loan entered into between the Borrower and the State (or any board, department or agency thereof).
“Patriot Act” means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, as amended, and all regu lations promulgated thereunder.
“Payment Default ” has the meaning provided in Section 19(a)(i) (System Events of Default and Remedies – Payment Default).
“Payment Period ”
means, with respect to each WIFIA Loan, any period of six (6) months from (and including) a Semi -Annual Payment Date to (but excluding) the immediately succeeding Semi-Annual Payment Date ; provided that the first Payment Period shall be the six
12 3734007.10 046357 CTR
(6) month period ending on the date immediately prior to the Debt Service Payment Commencement Date.
“Permitted Debt” means:
(a) Existing Indebtedness;
(b) the WIFIA Bonds;
(c) Additional Parity Obligations; and
(d) Subordinated Obligations.
“Permitted Investments” means any “Permitted Investment” under and as defined in the Indenture.
“Permitted Liens” means Liens permitted by the terms of the Indenture. “Person” means and includes an individual, a general or limited partnership, a joint venture, a corporation, a limited liability company, a trust, an unincorporated organization and any Governmental Authority.
“Principal Fund” means the fund of that name established pursuant to Section 5.02 of the Indenture for the purposes specified in Section 5.04 of the Indenture. “Principal Project Contracts ” means, with respect to each Project, any prime contract entered into by the Borrower with respect to such Project that involves any construction activity (such as demolition, site preparation, civil works construction, installation, remediation, refurbishment, rehabilitation, or removal and replacement services) . For the avoidance of doubt, “Principal Project Contract” shall include each Existing Principal Project Contract for the relevant Project and, upon the effectiveness thereof, each Additional Principal Project Contract for such Project.
“Principal Project Party ” means any Person (other than the Borrower) party to a Principal Project Contract.
“Professional Utility Consultant ” m e
ans any independent licensed professional
engineer, certified public accountant, or other independent person or firm, selected by the Borrower and reasonably acceptable to the WIFIA Lender, having skill and experience with the operation and maintenance of sewer systems of comparable size and character to the System in such areas as are relevant to the purposes for which such entity is retained, including the establishment of rates and charges; provided that the WIFIA Lender shall be deemed to have consented to any proposed Professional Utility Consultant so long as Borrower shall have provided the WIFIA Lender with thirty (30) Business Days’ advance written notice of such proposed Professional Utility Consultant, together with supporting information concerning the qualifications of such proposed Professional Utility Consultant, and the WIFIA Lender shall not have objected in writing within such thirty (30) Business Day period (upon the conclusion of
13 3734007.10 046357 CTR
which period such proposed Professional Utility Consultant shall become the Professional Utility Consultant).
“Project” has, for each WIFIA Loan Agreement, the meaning provided in Section 1 (Definitions) of such WIFIA Loan Agreement.
“Project Budget” has, for each Project, the meaning provided in Section 1 ( Definitions) of the corresponding WIFIA Loan Agreement.
“Project Closing Certificate” has the meaning provided in Section 12(b)( viii) (Conditions Precedent – Conditions Precedent to Effectiveness of Each WIFIA Loan Agreement). “Project Event of Default ” has the meaning provided in Section 20 ( Project Events of Default and Remedies).
“Project Schedule” has, for each Project, the meaning provided in Section 1 (Definitions) of the corresponding WIFIA Loan Agreement. “Project Term Sheet ” means a term sheet substantially in the form attached hereto as Exhibit J (Form of WIFIA Project Term Sheet ) entered into by the Borrower and the WIFIA Lender in respect of a WIFIA Loan.
“Projected Substantial Completion Date ” has, for each WIFIA Loan, the meaning provided in Section 1 (Definitions) of the corresponding WIFIA Loan Agreement. “Public Benefits Report ” means the report, in the form attached hereto as Exhibit E (Form of Public Benefits Report), with respect to a Project. “Rate Covenant” has the meaning provided in Sectio n 15(k) ( Affirmative Covenants – Rate Covenant).
“Rating Category” means one of the generic rating categories of a Nationally Recognized Rating Agency without regard to any refinement or gradation of such rating by a numerical modifier or otherwise.
“Rebate Account ” means an account (or Rebate Fund (as defined in the Indenture)) established under the Indenture Documents to hold or account for earnings that may have to be rebated to the federal government as a condition of maintaining tax- exempt status of obligations the interest on which is excludable from gross income of the holder of the obligations. “Related Documents ” means the Indenture Documents, the WIFIA Loan Documents and the Letter of Credit Agreements (if any).
“Requisition” has the meaning provided in Section 4(a) (Disbursement Conditions). “Reserve Account” means an account established in the Bond Reserve Fund as security for a Series of Bonds issued under the Indenture.
14 3734007.10 046357 CTR
“Revenue Fund” has the meaning provided in the Indenture. “Secured Parties” means the WIFIA Lender, each other Bondholder and each holder of any other Parity Obligation pursuant to the Indenture Documents. “Semi-Annual Payment Date” means each April 1 and October 1. “Senior State Loans” has the meaning provided in the Indenture. “Series of Bonds” has the meaning provided in the Indenture. “Servicer” means such entity or entities as the WIFIA Lender shall designate from time to time to perform, or assist the WIFIA Lender in performing, certain duties hereunder. “Servicing Fee” means the Servicing Set-Up Fee and any Construction Period Servicing Fee or Operating Period Servicing Fee.
“Servicing Set -Up Fee ” has the meaning provided in Section 30(a) (i) ( Fees and Expenses – Servicing Set-Up Fee) and, for each WIFIA Loan, shall be in the amount provided in Section 11(a)(i) (Fees and Expenses), of the corresponding WIFIA Loan Agreement and paid in accordance with Section 30(a)(i) (Fees and Expenses – Servicing Set-Up Fee) hereof. “Sinking Fund Account ” means any special account or accounts established by the Indenture or any Supplemental Indenture or Indentures in the Principal Fund for the payment of Term Bonds.
“State” has the meaning provided in the preamble hereto. “Subordinated Obligations ” means any O bligation that (a ) is fully subor dinated in priority of payment (as to both principal, interest, and security interest in pledged collateral , and whether such payment is made upon default or acceleration ) to payment of amounts due with respect to the Parity Obligations (including the WIFIA Bonds); and (b) is further limited with respect to voting rights to matters that ( i) diminish the pledge of Net System Revenues with respect to such Obligations; (ii) change the times or amounts of payment on such Obligations ; or (iii) reduce any voting rights in respect of such Obligations. “Substantial Completion ” means, with respect to each Project, the stage at which the Project is considered to perform the functions for which the Project is designed. “Substantial Completion Date ” means, with respect to each Project, the date on which the Borrower certifies to the WIFIA Lender, with evidence satisfactory to the WIFIA Lender, that Substantial Completion for such Project has occurred. “Supplemental Indenture” means a supplement to or modification of the provisions of the Indenture entered into by the Borrower and the Trustee in accordance with the terms of the Indenture, authorizing the issuance of Additional Parity Obligations or amending the terms of the Indenture.
15 3734007.10 046357 CTR
“System” means the whole and each and every part of the municipal sanitary waste and storm water collection, treatment and disposal system and auxiliary or related facilities of the Borrower, including all of the presently existing system of the Borrower for the collection, treatment and disposal of sanitary waste and storm water, and all future additions, betterments, and extensions to that system or any part thereof, including the Projects. “System Accounts” means the Capital Project Fund and each Capital Project Account (including the WIFIA Project Account), the Bond Reserve Fund and each Reserve Account, the Revenue Fund, the Principal Fund, any Sinking Fund Account (including the WIFIA Sinking Fund Account) and the Interest Fund, in each case, as established pursuant to the Indenture. “System Event of Default” has the meaning provided in Section 19 (System Events of Default and Remedies).
“System Revenues” means all gross revenues of the System , including all charges received for and all other income and receipts derived by the Borrower from the operation of the System, or arising from the System , including connection and installation charges, but excluding (a) any money received by or for the account the Borrower from the levy or collection of taxes ; (b) moneys received from the State and the United States of America and required to be deposited in restricted funds ; (c) refundable deposits made to establish credit ; (d) advances and contributions made to the Borrower to be applied to construction; (e) moneys received constituting casualty insurance proceeds with respect to all or any part of the System and moneys received constituting other insurance proceeds ; (f) moneys received from the sale or disposition of all or any part of the System; (g) moneys received upon the taking by or under the threat of eminent domain of all or any part of the System; (h) proceeds from Bonds issued by the Borrower or proceeds from loans or other indebtedness obtained by the Borrower; and (i) moneys or securities received by the Borrower as gifts or grants, the use of which is restricted by the donor or grantor. The term “System Revenues” includes (x ) all interest or other income (excluding profits or losses from the sale or disposition of Permitted Investments or other securities owned by or on behalf of the Borrower ) derived from the deposit or investment of any moneys in any fund or account established hereunder (excluding any Rebate Account and any escrow fund pledged for the payment of defeased bonds) or in any fund or account of the System and legally available to pay Debt Service, and (y) any other moneys, proceeds and other amounts that the Borrower determines should be “Revenues” under the Indenture. “Term Bonds” has the meaning provided in the Indenture. “Total Project Costs” means, with respect to each Pr oject, (a) the costs paid or incurred or to be paid or incurred by the Borrower in connection with or incidental to the acquisition, design, construction and equipping of such Project, including legal, administrative, engineering, planning, design, insurance and costs of issuance; (b) amounts, if any, required by the Indenture Documents or the WIFIA Loan Documents to be paid into any fund or account upon the incurrence of such WIFIA Loan and, if issued or incurred in connection with such Project, any Parity Obligations or Subordinated Obligations; (c) payments when due (whether at the maturity of principal, the due date of interest, or upon optional or mandatory prepayment) during the Construction Period in respect of any indebtedness of the Borrower, in each case in connection with such Project (other than the WIFIA Loan); and (d) costs of equipment and supplies and
16 3734007.10 046357 CTR
initial working capital and reserves required by the Borrower for the commencement of operation of such Project, including general administrative expenses and overhead of the Borrower.
“Trustee” means U.S. Bank Trust Company, National Association, as successor trustee to U.S. Bank National Association, acting as an independent trustee with the duties and powers provided in the Indenture, its successors and assigns, and any other corporation or association which may at any time be substituted in its place, as provided in Section 8.01 of the Indenture. “UEI” means, with respect to any Person, a Unique Entity ID issued by the Federal Government through SAM.gov as the unique entity identifier for such Person. “Uncontrollable Force” m eans any cause beyond the control of the Borrower, including:
(a) a hurricane, tornado, flood or similar occurrence, landslide, earthquake, fire or other casualty, strike or labor disturbance, freight embargo, act of a public enemy, explosion, war, blockade, terrorist act, insurrection, riot, general arrest or restraint of government and people, civil disturbance or similar occurrence, sabotage, cyber-attack, or act of God (provided, that the Borrower shall not be required to settle any strike or labor disturbance in which it may be involved) or (b) the order or judgment of any federal, state or local court, administrative agency or governmental officer or body, if it is not also the result of willful or negligent action or a lack of reasonable diligence of the Borrower and the Borrower does not c ontrol the administrative agency or governmental officer or body; provided, that the diligent contest in good faith of any such order or judgment shall not constitute or be construed as a willful or negligent action or a lack of reasonable diligence of the Borrower.
“Uniform Commercial Code” o
r “UCC” means the Uniform Commercial Code, as in
effect from time to time in the State.
“Variable Rate Indebtedness” has the meaning provided in the Indenture. “WIFIA” has the meaning provided in the recitals hereto. “WIFIA Bond ” means, for each WIFIA Loan, the Bond delivered by the Borrower in substantially the form of Exhibit A (Form of WIFIA Su pplemental Indenture (including WIFIA Bond form) ) and issued pursuant to the corresponding WIFIA Supplemental Indenture and WIFIA Loan Agreement. Each WIFIA Bond shall be a Bond under the Indenture. “WIFIA Debt Service” means, with respect to each WIFIA B ond, for any Semi-Annual Payment Date occurring on or after the Debt Service Payment Commencement Date for such WIFIA Bond, the principal portion of the Outstanding WIFIA Bond Balance and any interest payable thereon (including interest accruing after the date of any filing by the Borrower of any petition in bankruptcy or the commencement of any bankruptcy, insolvency or similar proceeding with respect to the Borrower) , in each case, due and payable on such Semi -Annual Payment Date in accordance with the pr ovisions of Section 9(d) (Payment of Principal and Interest – Payment of WIFIA Debt Service).
17 3734007.10 046357 CTR
“WIFIA Interest Rate ” means, for each WIFIA Loan (and the corresponding WIFIA Bond), the rate specified in Section 6 ( Interest Rate ) of the corresponding WIFIA Lo an Agreement, which shall be computed in accordance with Section 6 (Interest Rate) hereof. “WIFIA Lender” has the meaning provided in the preamble hereto. “WIFIA Lender’s Authorized Representative” means the Administrator and any other Person who shall be designated as such pursuant to Section 28 ( WIFIA Lender’s Authorized Representative).
“WIFIA Loan” has, for each WIFIA Loan Agreement, the meaning provided in Section 1 (Definitions) thereof.
“WIFIA Loan Agreement ” means a loan agreement substantially in the form attached hereto as Exhibit K ( Form of WIFIA Loan Agreement ) entered into by and between the Borrower and the WIFIA Lender in respect of the relevant Project. “WIFIA Loan Agreement Effective Date” has, for each WIFIA Loan Agreement, the meaning provided in Section 1 (Definitions) thereof.
“WIFIA Loan Documents” means this Agreement, the WIFIA Bonds, the WIFIA Loan Agreements, the WIFIA Supplemental Indentures, and the other Indenture Documents. “WIFIA Loan Request” has the meaning provided in Section 3(c) (WIFIA Loans for the Master Program).
“WIFIA Project Account ” has , for each WIFIA Loan, the meaning provided in the corresponding WIFIA Supplemental Indenture.
“WIFIA Sinking Fund Account ” has, for each WIFIA Loan, the meaning provided in the corresponding WIFIA Supplemental Indenture.
“WIFIA Supplemental Indenture ” means for each WIFIA Loan, the Supplemental Indenture entered into by and between the Borrower and the Trustee to authorize, among other things, the issuance of the corresponding WIFIA Bond and in substantially the form set forth in Exhibit A (Form of WIFIA Supplemental Indenture (including WIFIA Bond form)).
Section 2. Int erpretation.
(a) Unless the context shall otherwise require, the words “ hereto,” “herein,” “hereof” and other words of similar import refer to this Agreement as a whole. (b) Words of the masculine gender shall be deemed and construed to include correlative words of the feminine and neuter genders and vice versa. (c) Words importing the singular number shall include the plural number and vice versa unless the context shall otherwise require.
18 3734007.10 046357 CTR
(d) The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.”
(e) Whenever the Borrower ’s knowledge is implicated in this Agre ement or the phrase “ to the Borrower ’s knowledge ” or a similar phrase is used in this Agreement, the Borrower’s knowledge or such phrase(s) shall be interpreted to mean to the best of the Borrower’s knowledge after reasonable and diligent inquiry and investigation. Unless the context shall otherwise require, references to any Person shall be deemed to include such Person’s successors and permitted assigns.
(f) Unless the context shall otherwise require, references to preambles, recitals, Sections, subsections, clauses, schedules, exhibits, appendices and provisions are to the applicable preambles, recitals, Sections, subsections, clauses, schedules, exhibits, appendices and provisions of this Agreement.
(g) The schedules and exhibits to this Agreement, and the appendices and schedules to such exhibits, are hereby incorporated by reference and made an integral part of this Agreement.
(h) The headings or titles of this Agreement and its Section s, schedules or exhibits, as well as any table of contents, ar e for convenience of reference only and shall not define or limit its provisions.
(i) Unless the context shall otherwise require, all references to any resolution, contract, agreement, lease or other document shall be deemed to include any amendments or supplements to, or modifications or restatements or replacements of, such docume nts that are approved from time to time in accordance with the terms thereof and hereof. (j) Every request, order, demand, application, appointment, notice, statement, certificate, consent or similar communication or action hereunder by any party shall, unless otherwise specifically provided, be delivered in writing in accordance with Section 38 (Notices; Payment Instructions) and signed by a duly authorized representative of such party. (k) References t o “disbursements of WIFIA Loan proceeds” or similar phrasing shall be construed as meaning the same thing as “paying the purc hase price of the WIFIA Bond.”
(l) Whenever the Agreement requires a change in principal amount, intere st rate or amortization schedule of any WIFIA Loan, it is intended that such change be reflected in the corresponding WIFIA Bond. Whenever there is a prepayment of any WIFIA Loan, it is intended that such prepayment be implemented through a redemption of the corresponding WIFIA Bond.
(m) If any provision of this Agreement (or any other WIFIA Loan Document) conflicts with any provision of a WIFIA Loan Agreement, the provisions of such WIF IA Loan Agreement shall prevail.
19 3734007.10 046357 CTR
ARTICLE II
THE WIFIA LOAN
Section 3. WIF IA Loans for the Master Program.
(a) Subject to the terms and conditions set forth in this Agreement and, with respect to each WIFIA Loan requested pursuant to the terms hereof, the terms and conditions set forth in the relevant WIFIA Loan Agreement, the Borrower may reques t a WIFIA Loan for a Project under the Master Program to be entered into through the execution of a WIFIA Loan Agreement and the related WIFIA Loan Documents during the Master Availability Period in accordance with this Section . The aggregate of the M aximum Principal Amount of all WIFIA Loans shall not at any time exceed the Master Program Amount . With respect to each WIFIA Loan, (i) the Maximum Principal Amount of such WIFIA Loan, together with the amount of any other credit assistance provided under the A ct, shall not exceed forty -nine percent (49%) of reasonably anticipated Eligible Project Costs of the relevant Project and (ii) the total federal assistance for such Project, including but not limited to the Maximum Principal Amount of such WIFIA Loan and all federal grants, shall not exceed eighty percent (80%) of Total Project Costs of such Project.
(b) The number of WIFIA Loans permitted under this Agreement shall be limite
d to five (5); provided that additional WIFIA Loans may be permitted if requested by t he Borrower, subject to the limits set by the Master Program Amount, and further subject to the approval of the WIFIA Lender, which approval shall be in the WIFIA Lender’s sole discretion. (c) With respect to each WIFIA Loan and Project (other than the first WIFIA
Loan, which shall be entered into concurrently with the execution and delivery of this Agreement, subject to Section 12(b) ( Conditions Precedent – Conditions Precedent to Effectiveness of each WIFIA Loan Agreement )), the Borrower may, f rom time to time after the Effective Date but in any event (x) not more than once every sixty (60) days and (y) no later than one hundred eighty (180) days prior to the end of the Master Availability Period, request that the WIFIA Lender enter into a WIFIA Loan Agreement and related WIFIA Loan Documents in respect of such Project by delivering to the WIFIA Lender a written request in the form of Exhibit G (Form of WIFIA Loan Request ) (a “WIFIA Loan Request ”), which shall specify the Project to which such WIFIA Loan Reques t relates, together with (i) a description of the Project, (ii) an estimated Project budget, (iii) the most recent Financial Plan delivered to the WIFIA Lender in accordance with Section 22(a) ( System Financial Planning and Reporting Requirements – Financial Plan), and (i v) such additional information relating to the Project as may be requested by the WIFIA Lender. For each WIFIA Loan Request submitted in accordance herewith, the WIFIA Lender and the Borrower shall, subject to the terms and conditions set f orth herein, promptly and in good faith, negotiate, finalize and enter into the Project Term Sheet, WIFIA Loan Agreement and the other WIFIA Loan Documents for the requested WIFIA Loan. (d) As of the Effective Date of this Agreement, the WIFIA Lender has administratively reserved sufficient budget authority to make available the Master Program Amount. Notwithstanding the foregoing, the availability of any WIFIA Loan for a Project under the Master Program shall be subject to (i) there being sufficient availability of budgetary
20 3734007.10 046357 CTR
authority at the time the WIFIA Loan Request for such WIFIA Loan is made and (ii) final eligibility and approval of such WIFIA Project and WIFIA Loan , in each case as determined by the WIFIA Lender in accordance with the Act and applicable law.
Section 4. Di sbursement Conditions.
(a) WIFIA Loan proceeds shall be disbursed pursuant to a WIFIA Loan Agreement solely in respect of Eligible Project Costs paid or incurred and approved for payment by or on behalf of the Borrower in connection with the applicable Project, including, for the avoidance of doubt, Eligible Project Costs that were initially funded with Interim Financing proceeds. Each Disbursement of a WIFIA Loan shall be made pursuant to the procedures of Schedule III (Requisition Procedures) and subject to the requirements of this Section 4 and the conditions set forth in Section 12(c) ( Conditions Precedent to All Disbursements); provided, that no Disbursement of any WIFIA Loan shall be made after the Final Disbursement Date with respect to such WIFIA Loan.
(b) Subject to this Section 4, with respect to each WIFIA Loan, any scheduled D
isbursement (as reflected in the applicable Anticipated WIFIA Loan Disbursement Schedule) that remains undrawn as of its scheduled date shall automatically be available for the next scheduled Disbursement date, up to the applicable Final Disbursement Date, with the effect of automatically updating the applicable Anticipated WIFIA Loan Disbursement Schedule (and the corresponding Bond Amortization Schedule) without need for the WIFIA Lender’s approval.
The Borrower may also amend any Anticipated WIFIA Loan Disbursement Schedule by submitting a revised version thereof to the WIFIA Lender no later than thirty (30) days prior to the proposed effective date of such amendment, together with a detailed explanation of the reasons for such revisions. Such revised Anticipated WIFIA Loan Disbursement Schedule shall become effective upon the WIFIA Lender’s approval thereof, which approval shall be deemed granted if the WIFIA Lender has not objected within thirty (30) days from receipt of the revised schedule, and which approval shall have the effect of updating the corresponding Bond Amortization Schedule to reflect the updated Anticipated WIFIA Loan Disbursement Schedule.
Notwithstanding the foregoing, the First Disbursement Date of each WIFIA Loan shall not be earlier than the initial date of Disbursement set out in the Anticipated WIFIA Loan Amortization Schedule for such WIFIA Loan as of the applicable WIFIA Loan Agreement Effective Date.
Section 5. Ter
m.
The term of each WIFIA Loan shall extend from the applicable WIFIA Loan Agreement Effective Date to the Final Maturity Date of such WIFIA Loan (and corresponding WIFIA Bond) or to such earlier date as all amounts due or to become due to the WIF IA Lender under such WIFIA Loan Agreement and under such WIFIA Bond have been irrevocably paid in full in immediately available funds.
Section 6. In terest Rate.
Each WIFIA Loan (and corresponding WIFIA Bond ) shall bear interest with respect to the applicable Outstanding WIFIA Bond Balance at a fixed rate, calculated on the applicable WIFIA Loan Agreement Effective Date by adding one basis point (0.01%) to the rate
21 3734007.10 046357 CTR
of securities of a similar maturity (based on the weighted -aver age life of the applicable WIFIA Loan) as published, on the execution date of the applicable WIFIA Loan Agreement, in the United States Treasury Bureau of the Fiscal Service’s daily rate table for State and Local Government Series (SLGS) securities, currently located on the Internet at https://www.treasurydirect.gov/GA-SL/SLGS/selectSLGSDate.htm. Commencing on the First Disbursement Date of the applicable WIFIA Loan, interest will accrue and be computed on the applicable Outstanding WIFIA Bond Balance (as well as on any past due interest) from time to time on the basis of a 360- day year of twelve (12) thirty (30) day months, and will be compounded semi-annually on each Semi-Annual Payment Date occurring during the applicable Capitalized Interest Period ; provided that, in the event of any Payment Default or any Project Event of Default under the applicable WIFIA Loan Agreement, the Borrower shall pay interest on the applicable Outstanding WIFIA Bond Balance at the Default Rate, (a) in the case of any Payment Default, from (and including) its due date to (but excluding) the date of actual payment and (b), in the case of any Project Event of Default, from (and including) the date of such occurrence until (and excluding) the date such Project Event of Default has been cured in accordance with the ter ms of this Agreement and the relevant WIFIA Loan Agreement . The WIFIA Lender shall provide written notice to the Borrower and the Trustee of any Payment Default or Project Event of Default, which notice shall specify the effective date of the Default Rate and shall be deemed conclusive absent manifest error ; provided that no failure or delay on the part of the WIFIA Lender to provide such notice and no defect in any such notice shall affect in any manner the Borrower’s obligations hereunder or under any other WIFIA Loan Document.
Section 7. Outs
tanding WIFIA Bond Balance; Revisions to Bond Amortization Schedule. (a) Each Outstanding WIFIA Bond Balance will be ( i) increased on each occasion on which the WIFIA Lender disburses loan proceeds under the applicable WIFIA Loan Agreement ( commencing with the applicable First Disbursement Date) by the amount of such Disbursement; ( ii) increased on each occasion on which interest on such WIFIA Loan is capitalized pursuant to the provisions of Section 9(c ) (Payment of Principal and Interest – Capitalized Interest Period) , by the amount of interest so capitalized; and ( iii) decreased upon each payment or prepayment of the Outstanding WIFIA Bond Balance for the applicable WIFIA Bond, by the amount of principal so paid. With respect to each WIFIA Bond, t he WIFIA Lender shall, within thirty (30) days following (w ) e ach D isbursement Date, (x) each Semi -Annual Payment Date following the First Disbursement Date , (y) the last day of the Capitalized Interest Period, and (z) each prepayment date (as the case may be), make a notation on the applicable WIFIA Bond of the Outstanding WIFIA Bond Balance as of such applicable date and advise the Borrower and the Trustee by written notice of the amount of the applicable Outstanding WIFIA Bond Balanc e as of such applicable date, and its determination of such balance in any such notice shall be deemed conclusive absent manifest error; provided that neither the failure to make any such notation or to provide any such notice, nor any delay or error in an y such notation or notice shall affect in any manner the Borrower’s obligations hereunder or under any other WIFIA Loan Document.
(b) The W IFIA Lender is hereby authorized to modify each Bond Amortization Schedule and the information included in the exhibits t o the applicable WIFIA Bond from time to time , in accordance with the principles set forth below in this clause (b) and in clause (c) of this Section to reflect (i) any change to the Outstanding WIFIA Bond Balance for
22 3734007.10 046357 CTR
the applicable WIFIA Bond, (ii ) any change to the date and amount of any principal or interest due and payable or to become due and payable by the Borrower under the corresponding WIFIA Loan Agreement , and ( iii) such other administrative information as the WIFIA Lender may determine is necessa ry for administering such WIFIA Loan or such WIFIA Loan Agreement.
Any calculations described above shall be rounded up to the nearest whole cent. Any partial prepayments of any Outstanding WIFIA Bond Balance pursuant to Section 10 ( Prepayment) shall be applied in accordance with Section 10(e ) ( Prepayment – General Prepayment Instructions). Absent manifest error, the WIFIA Lender’s determination of such matters as set forth on any Bond Amortization Schedule and in the exhibits to the corresponding WIFIA Bond shall be conclusive evidence thereof ; provided that neither the failure to make any such recordation nor any error in any such recordation shall affect in any manner the Borrower ’s obligations hereunder or under any other WIFIA Loan Document. The WIFIA Lender shall provide the Borrower and the Trustee with notification of each Outstanding WIFIA Bond Balance pursuant to clause (a) of this Section 7 ( Outstanding WIFIA Bond Balance; Revisions to Bond Amortization Schedule ), as well as a copy of the corresponding Bond Amortization Schedule as revised, but no failure to provide or delay in providing the Borrower or the Trustee with such copy shall affect any of the obligations of the Borrower under this Agreement or the other WIFIA Loan Documents.
(c) The D
ollar amounts set forth in each Bond Amortization Schedule, as of the applicable WIFIA Loan Agreement Effective Date, shall be determined based on the Anticipated WIFIA Loan Disburs ement Schedule in effect on such WIFIA Loan Agreement Effective Date. Such Dol lar amount s are therefore subject to change in connection with a modification of such Bond Amortization Schedule. Any such change shall be consistent with the percentages of pr incipal payments set forth in such Bond Amortization Schedule as of such WIFIA Loan Agreement Effective Date, as specified in clause (ii) of Section 9(d) (Payment of Principal and Interest – Payment of WIFIA Debt Service) and subject to adjustment only as expressly provided in clause (iii) of Section 9(d) (Payment of Principal and Interest – Payment of WIFIA Debt Service).
Section 8. Se curity and Priority; Flow of Funds.
(a) As security for each WIFIA Bond, the Borrower has in the Indenture irrevocably pledged all of the Net System Revenues to the punctual payment of the principal of and interest an d redemption premium, if any, on the Bonds (including each WIFIA Bond) and the other Parity Obligations. The Borrower affirm s such pledge under this Agreement. Each WIFIA Bond shall be secured at all times in right of payment and right of security on a par ity with all other Bonds issued under the Indenture, including any Additional Bonds , and other Parity Obligations. As security for the payment of all other obligations under this Agreement and each WIFIA Loan Agreement not evidenced by the WIFIA Bonds, including the Borrower’s indemnification obligations pursuant to Section 17 ( Indemnification), the Borrower hereby irrevocably pledges all of the Net System Revenues on a subordinate basis after payment of all Parity Obligations . All payment obligations of the Borrower are subject to the limitations specified in Section 11.01 of the Indenture.
(b) Except (i) for Permitted Liens, or (ii) to the extent otherwise provided in clause (a) of this Section 8 (Security and Priority; Flow of Funds), the Net System Revenues will
23 3734007.10 046357 CTR
be free and clear of any pledge, L i en, charge or encumbrance thereon or with respect thereto, of equal rank with or senior to the pledge of the Borrower created under the Indenture Documents for the benefit of the WIFIA Lender, and all organizational, regulatory or other necessary action on the part of the Borrower with respect to the foregoing has been duly and validly taken; provided that, in accordance with each corresponding WIFIA Supplemental Indenture, each Disbursement will require the certificates and the opinion of bond counsel to the Borrower specified in Section 12(c )(viii) (Conditions Precedent – Conditions Precedent to All Disbursements).
(c) The Borrower shall not use System R evenues to make any payments or satisfy any obligations other than in accordance with the provisions of this Section 8 (Security and Priority; Flow of Funds) and the Indenture Documents and shall not apply any portion of the System Revenues in contravention of this Agreement or the Indenture Documents. (d) The Indenture provides that all System Revenues shall be deposited in the Revenue Fund and that all moneys in the Revenue Fund, including earnings thereon, shall be appropriated, transferred, expended or used for the following purposes, and only in accordance with the following priority:
(i) the payment of Operations and Maintenance Expenses; (ii) the payment of Bonds (including the WIFIA Bonds), Parity Loans, and other Parity Obligations, including amounts due as reimbursement under any Letter of Credit Agreement, as provided in Article V of the Indenture and, as applicable, any Supplemental Indenture; and
(iii) any other lawful purpose of the Borrower.
Section 9. Pa
yment of Principal and Interest.
(a) Payment Dates. For each WIFIA Bond, t he Borrower agrees to pay the principal of and interest on su ch WIFIA Bond by making payments in accordance with the provisions of this Agreement, the applicable WIFIA Loan Agreement and the Indenture Documents on each Semi -Annual Payment Date, beginning on the applicable Debt Service Payment Commencement Date, and on each other date on which payment thereof is required to be made under any applicable WIFIA Loan Document (including the applicable Final Maturity Date and any date on which payment is due by reason of the acceleration of the maturity of a WIFIA Bond or otherwise); provided that if any such date is not a Business Day, payment shall be made on the next Business Day following such date.
(b) Interest Commencement Date. W ith respect to each WIFIA Bond, interest shall accrue and be payable only on those amounts for which a Requisition has been submitted and funds (or such portion of funds as have been approved by WIFIA Lender) have been made available to the Borrower for use on the applicable Project in accordance with Section 4 (Disbursement Conditions ). Interest on amounts capitalized pursuant to the following Section 9(c) (Payment of Principal and Interest – Capitalized Interest Period) shall commence on the
24 3734007.10 046357 CTR
date such interest is added to the principal balance of the applicable WIFIA Bond during the applicable Capitalized Interest Period.
(c) Capitalized Interest Period. N o payment of the principal of or interest on a WIFIA Bond is required to be made during the Capitalized Interest Period applicable to such WIFIA Bond. On each Semi -Annual Payment Date occurring during the Capitalized Interest Period applicable to a WIFIA Bond, interest accrued on such WIFIA Bond in the six (6) month period ending immediately prior to such date, including both interest accrued on the applicable Outstanding WIFIA Bond Balance as of the prior Semi -Annual Payment Da te and interest accrued on any D isbursement during such period with respect to such WIFIA Bond, shall be capitalized and added to the applicable Outstanding WIFIA Bond Balance. For the avoidance of doubt, the interest in respect of the last day of the Capitalized Interest Period will not be capitalized but will be payable on the applicable Debt Service Payment Commencement Date, together with all interest accrued in respect of the initial Payment Period. Notwithstanding t he foregoing, each Capitalized Interest Period shall end immediately upon written notification to the Borrower and the Trustee by the WIFIA Lender that a System Event of Default or a Project Event of Default has occurred under the applicable WIFIA Loan Agr eement, in which case the provisions of this Section shall no longer apply with respect to the corresponding WIFIA Bond and payments of principal and interest shall be currently due and payable in accordance with the terms hereof and interest shall no longer be capitalized. For purposes of this subsection, a System Event of Default under clause (v) of Section 19(a) (System Events of Default and Remedies – Cross Default with Financing Documents) shall be deemed to have occurred upon the occurrence of any nonpayment of principal of, interest on, or redemption price of any Parity Obligations when due, regardless of whether the holders of the applicable Parity Obligations or the Trustee for the applicable Parity Obligations, or any legal order, has waived, permitted deferral of, or forgiven any such payment.
(d) Payment of WIFIA D
ebt Service.
(i) During the Interest Only Period applicable to a WIFIA Bond, the WIFIA Debt Service payable by the Borrower with respect to such WIFIA Bond shall consist of one hundred percent (100%) of the amount of interest then due and payable on the applicable Outstanding WIFIA Bond Balance, and no payment of principal will be due and payable. Such payments shall be made in accordance with Section 9 (e) (Payment of Principal and Interest – Manner of Payment). (ii) On each Semi -Annual Payment Date occurring after the Interest Only Period applicable to a WIFIA Bond , the Borrower shall pay the WIFIA Debt Service with respect to such WIFIA Bond in the amounts set forth in respect of such Semi-Annual Payment Date on the corresponding Bond Amortization Schedule , as the same may be revised as provided in Section 7 ( Outstanding WIFIA Bond Balance; Revisions to Bond Amortization Schedule), which payments shall be made in accordance with Section 9(e ) (Payme nt of Principal and Interest – Manner of Payment ). The schedule of WIFIA Debt Service payments set forth on each Bond Amortization Schedule shall be calculated by the WIFIA Lender as of the last day of the applicable Capitalized Interest Period such that after the applicable Debt Service Payment Commencement Date, subject to the provisions of this Section 9(d) ( Payment of
25 3734007.10 046357 CTR
Principal and Interest – Pa yment of WIFIA Debt Service ), there shall be payable with respect to the applicable WIFIA Bond semi-annual payments of principal and semiannual payments of interest in order for the corresponding Outstanding WIFIA Bond Balance to be reduced to $0 on the applicable Final Maturity Date (assuming that interest accrues during such period on the principal balance of such WIFIA Bond at the rate per annum set forth in Section 6 (Interest Rate) of the applicable WIFIA Loan Agreement , that all WIFIA Debt Service payments are made in a timely manner during such period, and that no additional payments of principal of or inte rest on such WIFIA Bond are made during such period); provided that there shall be due and payable on the applicable Final Maturity Date of each WIFIA Bond all amounts of principal and interest not otherwise paid pursuant to the provisions of this Agreement , the applicable WIFIA Loan Agreement and the applicable WIFIA Bond. On each Semi -Annual Payment Date occurring after the Interest Only Period applicable to a WIFIA Bond, the Borrower shall pay the principal amount corresponding to such date as shown in t he corresponding Bond Amortization Schedule, and each such principal amount shall, subject to Section 10(e) (Prepayment – General Prepayment Instructions ), be calculated to equal the product of the Outstanding WIFIA Bond Balance (as of the end of the Capit alized Interest Period applicable to such WIFIA Bond) multiplied by the percentage set forth for such Semi - Annual Payment Date on the corresponding Bond Amortization Schedule. (iii) If th e Final Maturity Date with respect to a WIFIA Bond is determined to be earl ier than the calendar date specified for the definition of Final Maturity Date in the applicable WIFIA Loan Agreement , the percentages shown on the corresponding Bond Amortization Schedule shall be amended so that the percentage allocated to any Semi -Annual Payment Date following the earlier Final Maturity Date will be allocated pro -rata among the Semi -Annual Payment Dates occurring after the Interest Only Period and prior to the earlier Final Maturity Date , and such calculations shall be included in the WI FIA Lender’s calculation of WIFIA Debt Service for the applicable WIFIA Bond pursuant to clause (ii) of this Section 9(d) ( Payment of Principal and Interest – Payment of WIFIA Debt Service) and reflected in a modified Bond Amortization Schedule pursuant to Section 7 ( Outstanding WIFIA Bond Balance; Revisions to Bond Amortization Schedule).
(iv) Th e Borrower shall calculate the amortization requirements for each WIFIA Loan (i.e., the Minimum Sinking Fund Account Payments (as defined in the Indenture) required to be made on the applicable WIFIA Bond) and provide such calculations in the form of an amended Minimum Sinking Fund Account Payment Schedule (as defined in the applicable WIFIA Supplemental Indenture) to the WIFIA Lender in accordance with the applicable WIFIA Supplemental Indenture. The WIFIA Lender will promptly review and confirm or correct the calculations made by the Borrower, and reflect such final amounts (as approved by the WIFIA Lender) on e xhibit B-2 of the applicable WIFIA Bond and the correspond ing Bond Amortization Schedule ; provided that the failure to confirm or correct such calculations or to make any such revisions shall not affect in any manner the Borrower’s obligations hereunder or under any other WIFIA Loan Document.
26 3734007.10 046357 CTR
(e) Manner of Payment. Payments under the WIFIA Loan A greements (and the corresponding WIFIA Bonds, which payments shall not be duplicative) shall be made by wire transfer on or before each Semi -Annual Payment Date in Dollars and in immediately available funds in accordance with payment instructions provided by the WIFIA Lender pursuant to Section 38 ( Notices; Payment Instructions ), as modified in writing from time to time by the WIFIA Lender. The Borrower may make any such payment or portion thereof (or direct the Trustee to make such payment) with funds then on deposit in the Interest Fund and/or Principal Fund, as applicable.
(f) Final Maturity Date . Not withstanding anything herein to the contrary, each Outstanding WIFIA Bond Balance and any accrued interest thereon shall be due and payable in full on the applicable Final Maturity Date (or on any earlier date on which such WIFIA Bond is subject to mandatory redemption prior to maturity thereof or shall be accelerated, in either case pursuant to the provisions of this Agreement and the Indenture). (g) WIFIA B ond. As evidence of the Borrower ’s obligation to repay each WIFIA Loan, the Borrower shall issue and deliver to the WIFIA Lender, on or prior to the applicable WIFIA Loan Agreement Effective Date, a WIFIA Bond, having the Maximum Principal Amount specified in the WIFIA Loan Agreement for such WIFIA Bond, bearing interest at the applicable WIFIA Interest Rate and having principal and interest payable on the same dates set forth in the corresponding Bond Amortization Schedule . Without limiting any other obligation under this Agreement, in the event of any inconsistency between the payment provisions of a WIFIA Bond as set forth in the applicable WIFIA Supplemental Indenture, including such WIFIA Bond, and the payment provisions set f orth in this Section 9 (Payment of Principal and Interest ) and in Section 10 ( Prepayment), the provisions of the WIFIA Supplemental Indenture and the WIFIA Bond shall control. (h) No Defeasance. Anything to the contrary in the Indenture Documents notwithstanding, no WIFIA Bond shall be subject to defeasance and no amou nts in respect of any WIFIA Bond shall be considered or deemed to have been paid until the WIFIA Lender shall have received irrevocable payment in immediately available funds in accordance with t he requirements for payment set forth in this Agreement and the applicable WIFIA Loan Agreement.
Section 10. Prep ayment.
(a) Extraordinary Prepayment From Net Loss Proceeds . The Borr ower shall prepay each WIFIA Bond in whole or in part, without penalty or premium, from Net Loss Proceeds in accordance with Section 6.20 of the Indenture and the applicable WIFIA Supplemental Indenture.
(b) Notice of Extraordinary Pr epayment. The Borrower shall provide, or shall cause the Trustee to provide, written notice to the WIFIA Lender at least two (2) Business Days prior to the date on which it makes any prepayment pursuant to Section 10(a) ( Prepayment – Extraordinary Prepayment from Net Loss Proceeds ); provided that the Borrower’s failure to deliver such notice shall not diminish, impai r or otherwise affect the Borrower’s obligation to
27 3734007.10 046357 CTR
make any such p repayment as and when th e circumstances requiring such prepayment have occurred.
(c) Optional P repayments. After the Final Disbursement Date for a WIFIA Loan, the Borrower may prepay the corr esponding WIFIA Bond in whole or in part (and, if in part, the amounts thereof to be prepaid shall be determined by the Borrower ; provided, however, that such prepayments shall be in principal amounts of $1,000,000 or any integral multiple of $1.00 in excess thereof), from time to time but not more than once annually, without penalty or premium, by paying to the WIFIA Lender such principal amount of the WIFIA Bond to be prepaid, together with the unpaid interest accrued on the amount of principal so prepaid to the date of such prepayment, which shall be a Semi -Annual Payment Date unless otherwise agreed by the WIFIA Lender . Each prepayment of a WIFIA Bond shall be made on such date and in such principal amount as shall be specified by the Borrower in a written notice delivered to the WIFIA Lender and the Trustee. In the case of any optional prepayment, such written notice shall be delivered to the WIFIA Lender not less than ten (10) days nor more than thirty (30) days prior to the date set for prepayment, unless otherwise agreed by the WIFIA Lender. At any time between delivery of such written notice and the applicable optional prepayment, the Borrower may, without penalty or premium, rescind its announced optional prepayment of a WIFIA Bond by further writ ten notice to the WIFIA Lender. Anything in this Section 10(c) (Prepayment – Optional Prepayments) to the contrary notwithstanding, the failure by the Borrower to make any optional prepayment on any WIFIA Bond shall not constitute a breach or default unde r this Agreement or the applicable WIFIA Loan Agreement.
(d) Prepayments to be in Accordance With Indenture .
Each prepayment of a
WIFIA Bond pursuant to this Section 10 (Prepayment) shall be effected pursuant to Article IV of the Indenture (as applicable) and the applicable WIFIA Supplemental Indenture, and shall be accompanied by a certificate signed by the Borrower’s Authorized Representative identifying the provision of this Agreement pursuant to which such prepayment is being made and containing a calculation in reasonable detail of the amount of such prepayment . The terms and conditions of this Section 10 ( Prepayment) shall be reflected in each WIFIA Bond and each WIFIA Supplemental Indenture.
(e) General Prepayment Instructions. Upon the WIFIA Lender’s receipt of confirmation that payment in full of the entire Outstanding WIFIA Bond Balance with respect to any WIFIA Bond and any unpaid interest and fees with respect thereto has occurred as a result of a mandatory or optional prepayment, the WIFIA Lender shall surrender such WIFIA Bond to the Borrower or the Trustee or its representative at the princi pal office of the WIFIA Lender or the Trustee, as applicable. If the Borrower prepays only part of the unpaid balance of principal of any WIFIA Bond, the WIFIA Lender may make a notation on the corresponding Bond Amortization Schedule indicating the amount of principal of and interest on such WIFIA Bond then being prepaid and shall provide notice of such notation to the Borrower and the Trustee .
Absent manifest e rror, the WIFIA Lender’s determination of such matters as set forth on such Bond Amortization Schedule shall be conclusive evidence thereof; provided that neither the failure to make any such recordation nor any error in such recordation shall affect in any manner the Borrower’s obligations hereunder or under any other WIFIA Loan Document. Unless otherwise agreed in writing by the WIFIA Lender, all such partial prepayments of principal shall be applied to reduce future principal payments due on the applicable WIFIA Bond on a pro- rata
28 3734007.10 046357 CTR
basis. If said monies shall not have been so paid on the prepayment date, such principal amount of such WIFIA Bond shall continue to bear interest until payment thereof at the rate provided for in the applicable WIFIA Loan Agreement.
Section 11. [Intentionally Omitted].
ARTICLE III
CONDITIONS PRECEDENT
Section 12. Condi tions Precedent.
(a) Conditions Precedent to Effectiveness . Notwithstanding anything in this Agreement to the contrary, this Agreement shall not become effective until each of the following conditions precedent shall have been satisfied or waived in writing by the WIFIA Lender:
(i) The Borrower shall have duly executed and delivered to the W
IFIA Lender this Agreement in form and substance satisfactory to the WIFIA Lender. (ii) To the extent not previously de livered to the WIFIA Lender, t he Borrower shall have delivered to the WIFIA Lender certified, complete, and fully executed copies of each Indenture Document, together with any amendments, waivers or modifications thereto, in each case that has been entered into on or prior to the Effective Date,
and each such agreement shall be in full force and effect (except to the extent it is no longer in full force and effect by its own terms) and in form and substance satisfactory to the WIFIA Lender, and all conditions contained in such documents to the closing of the transactions contemplated thereby shall have been fulfilled or effectively waived (provided that for purposes of this Section 12(a)(ii), any such waiver shall be subject to the WIFIA Lender’s consent in its sole discretion).
(iii) Couns el to the Borrower shall have rendered to the WIFIA Lender legal opinions satisfactory to the WIFIA Lender in its sole discretion (including those opinions set forth on Exhibit F-1 (Opinions Required from Counsel to Borrower )) and bond counsel to the Borrower shall have rendered to the WIFIA Lender legal opinions satisfactory to the WIFIA Lender in its sole discretion (including those opinions set forth on Exhibit F-2 (Opinions Required from Bond Counsel)).
(iv) The Borrower shall have delivered to the WIFIA Lender a certificate from an Authorized Representative in the form attached hereto as Exhibit H-1 (Form of Closing Certificate) (the “Closing Certificate”) (A) designating the Borrower’s Authorized Representative and confirming s uch person’s position and incumbency and (B) certifying as to the satisfaction of the following conditions precedent (and, if requested by the WIFIA Lender, shall have provided evidence satisfactory to the WIFIA Lender of such satisfaction):
(A) the Borrower h as (1 ) obtained a Federal Employer Identification Number, (2) obtained a UEI, and (3) registered with, and obtained confirmation of
29 3734007.10 046357 CTR
active registration status from, the federal System for Award Management (www.SAM.gov);
(B) the representations and warranties o f the Borrower set forth in this Agreement (including Section 13 ( Representations and Warranties of Borrower )) and in each other Related Document shall be true and correct, as of the Effective Date, except to the extent such representations and warranties expressly relate to an earlier date (in which case, such representations and warranties shall be true and correct as of such earlier date); and
(C) no Material Adverse Effect, or any event or condition that could reasonably be expected to have a Material Adverse Effect, has occurred or arisen since the date of the Application.
(v) The Borrower shall have delivered to the WIFIA Lender a certified Base Case Financial Model on or prior to the Effective Date, which Base Case Financial Model shall (A) demonstrate that p rojected System Revenues are sufficient to meet the projected debt service with respect to the Master Program Amount, (B) demonstrate that issuance of each anticipated WIFIA Bond will satisfy all Indenture requirements for the issuance of Additional Bonds, (C) demonstrate compliance with the Rate Covenant for each Borrower Fiscal Year through the Forecast Period , and otherwise be in form and substance acceptable to the WIFIA Lender.
(vi) The Borrower shall have paid in full all invoices delivered by the WIFIA Lender to the Borrower as of the Effective Date for the fees and expenses of the WIFIA Lender’s counsel and financial advisors and any auditors or other consultants retained by the WIFIA Lender for the purposes hereof.
(vii) The Borrower shall have provided to the WIFIA Lender evidence that the Borrower is duly organized and validly existing under the laws of its jurisdiction of formation, with full power, authority and legal right to own its properties and carry on its business and governmental functions as now co nducted, including a copy of the Borrower’s Organizational Documents, as in effect on the Effective Date (and certified by the Borrower’s Authorized Representative), which Organizational Documents shall be in full force and effect and shall not have been a mended since the date of the last amendment thereto shown on the certificate.
(viii) The Borrower shall have duly adopted a n ordinance and a resolution authorizing the execution and delivery by the Borrower of this Agreement, in form and substance satisfactory to the WIFIA Lender, and such ordinance and resolution shall remain in full force and effect.
(ix) The Borrower shall have delivered to the WIFIA Lender a copy of the Borrower’s most recent ten (10)-year financial plan for the System. (x) The Borrower shall have delivered such other agreements, documents, instruments, opinions and other items required by the WIFIA Lender, all in
30 3734007.10 046357 CTR
form and substance satisfactory to the WIFIA Lender, including evidence that all other Master Program funding requirements have been met.
(b) Conditions Precedent to Effectiveness of Each WIFIA Loan Agreement .
Notwithstanding anything in this Agreement or any other WIFIA Loan Document to the contrary, no WIFIA Loan Agreement for a Project shall become effective until each of the following conditions precedent has been satisfied or waived in writing by the WIFIA Lender in its sole discretion:
(i) The Borrower shall have duly executed and delivered to the W
IFIA Lender (A) except with respect to the initial WIFIA Loan Agreement entered into concurrently with the execution and delivery of this Agreement , a WIFIA Loan Request that complies with the provisions of Section 3(c) (WIFIA Loans for the Master Program), (B) a Project Term Sheet with respect to the applicable Project and WIFIA Loan and (C) the WIFIA Loan Agreement , WIFIA Bond and WIFIA Supplemental Indenture with respect to such Project and WIFIA Loan, in each case in form and substance satisfactory to the WIFIA Lender.
(ii) The Borrower shall have delivered to the WIFIA Lender complete and fully executed copies of each Existing Principal Project Contract with respect to the applicable Project, together with any amendments, waivers or modifications thereto, along with a certification in the applicable Project Closing Certificate that each such document is complete, fully executed and in full force and effect. (iii) To the extent not previously delivered to the WIFIA Lender, the Borrower shall have delivered to the WIFIA Lender copies of any Indenture Document entered into after the Effective Date, along with a cer tification in the applicable Project Closing Certificate that each such document is complete, fully executed and in full force and effect (except to the extent it is no longer in full force and effect by its terms). (iv) The Borrower shall have duly adopted a n ordinance and a resolution authorizing the issuance of the WIFIA Bond with respect to the applicable Project and WIFIA Loan and execution and delivery by the Borrower of the WIFIA Loan Agreement and WIFIA Supplemental Indenture with respect to such Project and WIFIA Loan, and pledging the security set forth in the WIFIA Loan Agreement, WIFIA Bond and WIFIA Supplemental Indenture with respect to such Project and WIFIA Loan , in form and substance satisfactory to the WIFIA Lender, and such ordinance and resolution shall remain in full force and effect.
(v) Counsel to the Borrower shall have delivered to the WIFIA Lender legal opinions satisfactory to the WIFIA Lender in its sole discretion (including those opinions set forth in Exhibit F-1 (Opinions Required from Counsel to Borrower )) and bond counsel to the Borrower shall have delivered to the WIFIA Lender legal opinions satisfactory to the WIFIA Lender in its sole discretion (including those opinions set forth in Exhibit F-2 (Opinions Required from Bond Counsel )), in each case for the relevant Project.
31 3734007.10 046357 CTR
(vi) The Borrower shall have delivered to the WIFIA Lender a duly executed certificate from the Trustee in the form attached to the applicable WIFIA Loan Agreement as Exhibit B (Form of Certificate of Trustee). (vii) The Borrower shall have delivered to the WIFIA Lender a Project Budget for the relevant Project.
(viii) The Borrower shall have delivered to the WIFIA Lender a Project Closing Certificate with respect to the relevant Project, signed by the Borrower’s Authorized Representat ive, substantially in the form attached hereto as Exhibit H -2 (Form of Project Closing Certificate ) (a “Project Closing Certificate”) (A) confirming that the Borrower’s Authorized Representative previously designated and such person’s position and incumbency as previously provided to the WIFIA Lender remain unchanged and in full force and effect (or if changed, designating such new Borrower’s Authorized Representative and confirming such person’s position and incumbency, in form and substance satisfactory t o the WIFIA Lender) and (B ) certifying as to the satisfaction of the following conditions precedent (and, if requested by the WIFIA Lender, shall have provided evidence satisfactory to the WIFIA Lender of such satisfaction):
(A) as of the applicable WIFIA Loan Agreement Effective Date, (1 ) the Maximum Principal Amount of the relevant WIFIA Loan, together with the amount of any other credit assistance provided under the Act to the Borrower, does not exceed forty -nine percent (49%) of the reasonably anticipated E ligible Project Costs for such Project and (2) the total federal assistance provided to such Project, including the M aximum Principal Amount of the relevant WIFIA Loan, does not exceed eighty percent (80%) of Total Project Costs for such Project; (B) except as set forth in Schedule 13(r) (Environmental Matters) of the applicable WIFIA Loan Agreement , the Borrower is in compliance with NEPA and any applicable federal, state or local environmental review and approval requirements with respect to such Project, and the NEPA Determination with respect to the Project shall not have been withdrawn or materially amended; (C) the Borrower has maintained (1) the Federal Employer Identification Number provided to the WIFIA Lender as a condition precedent to the Effective Date, (2) the UEI provided to the WIFIA Lender as a condition precedent to the Effective Date and (3) an active registration status with the federal System for Award Management (www.SAM.gov);
(D) the Borrower has obtained a CUSIP number for the applicable WIFIA Loan for purposes of monitoring through EMMA;
(E) the representations and warranties of the Borrower set forth in the relevant WIFIA Loan Agreement and in each other WIFIA Loan Document to which the Borrower is a party are true and correct on and as of the WIFIA Loan Agreement Effective Date, except to the extent that such representations and
32 3734007.10 046357 CTR
warranties expressly relate to an earlier date, in which case such representations and warranties were true and correct as of such earlier date; (F) the Borrower’s Organizational Documents remain in full force and effect, and no amendments or modifications have been made to the Organizational Documents since the Effective Date that have not been delivered to the WIFIA Lender;
(G) no Material Adverse Effect, or any event or condition that could reasonably be expected to have a Material Adverse Effect, has occurred or arisen since the Effective Date; and
(H) as of the relevant WIFIA Loan Agreement Effective Date, (1) no System Event of Default or Project Event of Default hereunder or event of default under any other Related Document shall have occurred and be continuing and ( 2) no event that, with the giving of notice or the passage of time or both, would constitute a System Event of Default or a Project Event of Default hereunder or an event of default under any Related Document, in each case, shall have occurred and be continuing.
(ix) The Borrower shall have provided evidence to the WIFIA Lender’s satisfaction of the assignment by at least one (1) Nationally Recognized Rating Agency of an Investment Grade Rating on the applicable WIFIA Loan, along with a certification in the Project Closing Certificate that no such rating has been reduced, withdrawn or suspended as of the applicable WIFIA Loan Agreement Effective Date. (x) The Borrower shall have del ivered to the WIFIA Lender the most recent Financial Plan in compliance with the requirements of Section 22(a) (System Financial Planning and Reporting – Financial Plan).
(xi) The Borrower shall have delivered to the WIFIA Lender a Public Benefits Report with respect to the applicable Project. (xii) The Borrower shall have delivered to the WIFIA Lender the Borrower’s Financial Statements for the most recent Borrower Fiscal Year for which such Financial Statements are available.
(xiii) To the extent not previously paid, the Borrower shall have paid in full (A) any outstanding Servicing Fees due and payable under Section 30 ( Fees and Expenses) and (B) all invoices delivered by the WIFIA Lender to the Borrower on or prior to the relevant WIFIA Loan Agreement Effective Date for t he fees and expenses of the WIFIA Lender’s counsel and financial advisors and any auditors or other consultants retained by the WIFIA Lender for the purposes of the WIFIA Loan Documents. (xiv) The Borrower shall have delivered such other agreements, documents, instruments, opinions and other items required by the WIFIA Lender, all in form and substance satisfactory to the WIFIA Lender.
33 3734007.10 046357 CTR
(c) Conditions Precedent to All Disbursements . Notwithstanding anything in this Agreement or any other WIFIA Loan Document to the co ntrary, the WIFIA Lender shall have no obligation to make any D isbursement with respect to any WIFIA Loan to the Borrower until each of the following conditions precedent with respect to such WIFIA Loan has been satisfied or waived in writing by the WIFIA Lender:
(i) The Borrower shall have delivered to the WIFIA Lender a R
equisition that complies with the provisions of Section 4 ( Disbursement Conditions ), Schedule III (Requisition Procedures) and Exhibit B (Form of Requisition), including satisfactory Eligible Project Costs Documentati on relating to such Requisition. The Borrower’s Authorized Representative shall also certify in such Requisition that:
(A) at the time of, and immediate ly after giving effect to, any Disbursement then currently requested, (1) no Sys tem Event of Default or Project Event of Default hereunder or event of default under any other Related Document shall have occurred and be continuing and (2) no event that, with the giving of notice or the passage of time or both, would constitute a System Event of Default or a Project Event of Default hereunder or event of default under any Related Document, in each case, shall have occurred and be continuing; (B) the Borrower, and each of its contractors and subcontractors at all tiers with respect to the relevant Project, has complied with all applicable laws, rules, regulations and requirements, including 40 U.S.C. §§3141- 3144, 3146, and 3147 (relating to Davis -Bacon Act requirements) (and regulations relating thereto) and 33 U.S.C. §3914 (relating to American iron and steel products.
Supporting documentation, such as certified payroll records and certifications for all iron and steel products used for the relevant Project, are being maintained and are available for review upon request by the WIFIA Lender; (C) the representations and warranties of the Borrower set forth in this Agreement (including Section 13 ( Representations and Warranties of Borrower )) and in each other Related Document shall be true and correc t as of each date on which any Disbursement of the applicable WIFIA Loan is made, except to the extent such representations and warranties expressly relate to an earlier date (in which case, such representations and warranties shall be true and correct as of such earlier date) ; provided that, to the extent necessary to make the corresponding representation and warranty true and complete as of the relevant Disbursement Date, the Borrower shall have delivered updated versions of Schedule 13( f) (Litigation) and Schedule 13(r) ( Environmental Matters ) of the applicable WIFIA Loan Agreement in form and substance satisfactory to the WIFIA Lender in its sole discretion;
(D) no Material Adverse Effect, or any event or condition that could reasonably be expected to result in a Material Adverse Effect, shall have occurred since the applicable WIFIA Loan Agreement Effective Date;
34 3734007.10 046357 CTR
(E) the aggregate amount of all D isbursements of such WIFIA Loan (including the requested Disbursement but excluding any interest that is capitalized in accordance with the terms hereof and of the relev ant WIFIA Loan Agreement) will not exceed (1) the M aximum Principal Amount of such WIFIA Loan, or (2) the aggregate amount of the Eligible Project Costs with respect to the applicable Project paid or incurred by the Borrower;
(F) the Eligible Project Costs wit h respect to the applicable Project for which reimbursement or payment is being requested has not been reimbursed or paid by any previous Disbursement of (1) such WIFIA Loan or (2) any other source of funding for such Project (other than any Interim Financing or cash of the Borrower) as identified in the Project Budget for such Project; (G) Eligible Project Costs Documentation evidencing Eligible Project Costs in an amount equal to the amount requested for such Disbursement, either (1) has been previously submitted to and approved by the WIFIA Lender in accordance with Schedule III ( Requisition Procedures ) and Section 23(c) (Project Oversight and Monitoring – Quarterly Certification of Eligible Project Costs) of this Agreement or (2) has been submitted to the WIFIA Lender, together with a summary of such Eligible Project Costs in the Requisition (or attached separately to the Requisition), for approval by the WIFIA Lender; and (H) the Borrower has delivered all required deliverables under and in compliance with the r equirements of Section 22 ( System Financial Planning and Reporting) and Section 23 ( Project Oversight and Monitoring) , except as has been otherwise agreed by the WIFIA Lender.
(ii) To the extent not previously delivered to the WIFIA Lender, the Borrower shall h ave delivered to the WIFIA Lender certified, complete and fully executed copies of any Indenture Documents entered into after the applicable WIFIA Loan Agreement Effective Date.
(iii) To the extent not previously delivered to the WIFIA Lender and except as other wise agreed to by the WIFIA Lender pursuant to Section 15(b) (Affirmative Covenants – Copies of Documents ), the Borrower shall have provided fully executed copies of all Principal Project Contracts with respect to the applicable Project that are in effect, including, in each case, any amendment, modification or supplement thereto entered into after the applicable WIFIA Loan Agreement Effective Date. (iv) The Borrower shall have paid in full (A) any outstanding Servicing Fee due and payable under Section 30 ( Fees and Expenses) and (B) all invoices received from the WIFIA Lender as of the date of D isbursement of the relevant WIFIA Loan, for the fees and expenses of the WIFIA Lender’s counsel and financial advisors and any auditors or other consultants retained by the WIFIA Lender for the purposes hereof. (v) The Borrower shall have provided to the WIFIA Lender (A) certificates delivered to the Trustee pursuant to the relevant WIFIA Supplemental
35 3734007.10 046357 CTR
Indenture demonstrating, with respect to the requested Disbursement, compliance with Section 3.08 of the Indenture, and (B) an opinion of bond counsel to the Borrower , in form and substance satisfactory to the WIFIA Lender , as to the matters specified in the relevant WIFIA Supplemental Indenture, including that all conditions precedent under the Indenture Documents to the making of the requested D isbursement, as contemplated hereunder and under the relevant WIFIA Bond, have been satisfied.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 13. Rep resentations and Warranties of Borrower.
The Borrower hereby represents and warrants that, as of the Effective Date (other than with respect to the representations and warranties contained in Section 13(k) (Representations and Warranties of Borrower – Credit Ratings), Section 13(n) (Representations and Warranties of Borrower – Principal Project Contracts), Section 13(r) ( Representations and Warranties – Environmental Matters ) and Section 13 (gg) ( Representations and Warranties of Borrower – Operations and Maintenance Plan)) , as of each WIFIA Loan Agreement Eff ective Date and, as to each of the representations and warranties below other than those contained in Section 13(b) (Representations and Warranties of Borrower – Officer’s Authorization) Section 13(k) ( Representations and Warranties of Borrower – Credit Ra tings), the first sentence of Section 13(f) (Representations and Warranties of Borrower – Litigation), and the first sentence of Section 13(n) (Representations and Warranties of Borrower – Principal Project Contracts ), as of each date on which any Disbursement is requested or made:
(a) Organization; Power and Authority. The Borrower is a commission duly constituted under the Charter and the laws of the State , has full legal right, power and authority to do business in the State and to enter into the Related D ocuments then in existence, to execute and deliver this Agreement and the WIFIA Bond, and to carry out and consummate all transactions contemplated hereby and thereby and has duly authorized the execution, delivery and performance of this Agreement, the WIFIA Bond, and the Related Documents. (b) Officers’
Authorization. As of the Effective Date and as of each WIFIA Loan Agreement Effective Date, the officers of the Borrower executing (or that previously executed) the Related Documents, and any certifications or instruments related thereto, to which the Borrower is a party are (or were at the time of such execution) duly and properly in office and fully authorized to execute the same.
(c) Due Execution; Enforceability. Each of the Related D ocuments in effect
as of any date on which this representation and warranty is made, and to which the Borrower is a party has been duly authorized, executed and delivered by the Borrower and constitutes the legal, valid and binding agreement of the Borrower enforceable in accordance with its terms, except as such enforceability (i) may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the rights of creditors generally and (ii) is subject to general principles of equity (regardless of whether enforceability is considered in equity or at law).
36 3734007.10 046357 CTR
(d) Non- Contravention. The execution and delivery of the Related Documents to which the Borrower is a party, the consummation of the transactions contemplated by the Related Documents, and the fulfillment of or compliance with the terms and conditions of all of the Related D ocuments, will not (i) conflict with the Borrower ’s Organizational Documents, (ii) conflict in any material respect with, or constitute a violation, breach or default (whether immediately or after notice or the passage of time or both) by the Borrower of or under, any applicable law , administrative rule or regulation, any applicable court or administrative decree or order, or any indenture, mortgage, deed of trust, loan agreement , lease, contract or other agreement or instrument to which the Borrower is a party or by which it or its properties or assets are otherwise subject or bound, or (iii) result in the creation or imposition of any prohibited Lien, charge or encumbrance of any nature whatsoever upon any of the property or assets of the Borrower.
(e) Consents and Approvals. No consent or approval of any trustee, holder of any indebtedness of the Borrower or any other Person, and no consent, permission, authorization, order or li cense of, or filing or registration with, any Governmental Authority is necessary in connection with (i) the execution and delivery by the Borrower of the Related Documents, except as have been obtained or made and as are in full force and effect , or (ii) (A) the consummation of any transaction contemplated by any of the foregoing documents or (B) the fulfillment of or compliance by the Borrower with the terms and conditions of any of the Related Documents, except as have been obtained or made and as are in full force and effect or as are ministerial in nature and can reasonably be expected to be obtained or made in the ordinary course on commercially reasonable terms and conditions when needed. (f) Litigation. As
of the Effective Date, there is no action suit, proceeding or, to the knowledge of the Borrower , any inquiry or investigation, in any case before or by any court or other Governmental Authority pending or, to the knowledge of the Borrower, threatened against or affecting the ability of the Borrower to execute, deliver and perform its obligations under the Related Documents . Except as set forth in Schedul e 13 (f) (Litigation) of the applicable WIFIA Loan Agreement, as of each WIFIA Loan Agreement Effective Date and as of each subsequent date on which the representations and warranties herein are made or confirmed , there is no action, suit, proceeding or, to the knowledge of the Borrower , any inquiry or investigation before or by any court or other Governmental Authority pending, or to the knowledge of the Borrower, threatened against or affecting (i) the System ( including the Projects), the Borrower or the assets, properties or operations of the Borrower, that in any case could reasonably be expected to result in a Material Adverse Effect or (ii) the ability of the Borrower to execute, deliver and perform its obligations under the Related Documents . The Borrower is not in default (and no event has occurred and is continuing that , with the giving of notice or the passage of time or both, could constitute a default) with respect to any Governmental Approval, which default could reasonably be expected to result in a Material Adverse Effect.
(g) Security Interests . The
Indenture Documents and Section 5451 of the
California Government Code establish, for the benefit of the WIFIA Lender, the valid and binding Liens on the Net System Revenues that they purport to create, irrespective of whether any Person has notice of the pledge and without the need for any physical delivery, recordation, filing, or further act. S uch Liens are in full force and effect and are not subordinate or junior to
37 3734007.10 046357 CTR
any other Liens in respect of the Net System Revenues , and not pari passu with any obligations other than the Parity Obligations. The Borrower has duly and lawfully taken all action s required under this Agreement, the Indenture Documents, and applicable laws for the pledge of Net System Revenues pursuant to and in accordance with the Indenture Documents, and the security interests created in the Net System Revenues have been duly per fected under applicable State law. The Borrower is not in breach of any covenants set forth in Section 15(a) (Affirmative Covenants – Securing Liens) of this Agreement or in the Indenture Documents with respect to the matters described in such Section . A s of the Effective Date and as of each other date this representation and warranty is made , (i) all documents and instruments have been recorded or filed for record in such manner and in such places as are required and all other action as is necessary or desirable has been taken to establish a legal, valid, binding, and enforceable and perfected Lien on the Net System Revenues for the benefit of the WIFIA Lender and the other Secured Parties to the extent contemplated by the Indenture Documents, and (ii) al l taxes and filing fees that are due and payable in connection with the execution, delivery or recordation of any Indenture Documents or any instruments, certificates or financing statements in connection with the foregoing, have been paid. Neither the at tachment, perfection, validity, enforceability nor priority of the security interest in the Net System Revenues granted pursuant to the Indenture Documents is governed by Article 9 of the UCC.
(h) No Debarment. The Borrower has fully complied with its verific a tion
obligations under 2 C.F.R. § 180.320 and confirms, based on such verification, that, to its knowledge, neither the Borrower nor any of its principals (as defined in 2 C.F.R. § 180.995 and supplemented by 2 C.F.R § 1532.995) (i) is debarred, suspended or voluntarily excluded from participation in Government contracts, procurement or non- procurement matters, (ii) is presently indicted for or otherwise criminally or civilly charged by a Governmental Authority with commission of any of the offenses listed in 2 C.F.R. § 180 or 2 C.F.R. § 1532, or (iii) has, within the three (3) year period preceding the Effective Date , (x) been convicted for or had a civil judgment rendered against it or them for any of such listed offenses within such period or (y) had any public transactions (federal, state or local) terminated for cause or default. (i) Accuracy of Representations and Warranties. The representations, warranties and certifications of the Borrower set forth in this Agreement and the other Related Documents ar e true, correct, and complete, except to the extent such representations and warranties expressly relate to an earlier date (in which case, such representations and warranties shall be true, correct, and complete as of such earlier date). (j) Compliance with F ede
ral Requirements . The Borrower, and each of its
contractors and subcontractors at all tiers, in each case with respect to the Projects, has complied with all applicable federal laws, rules, regulations and requirements , including (i) 40 U.S.C. §§3141-3144, 3146, and 3147 and regulations relating thereto (Davis -Bacon Act Requirements), (ii) 33 U.S.C. §3914 (relating to American iron and steel products), (iii) 2 C.F.R. §180.320 and 2 C.F.R. §1532 (relating to non-debarment) and (iv) 31 U.S.C. § 1352 and 40 C.F.R. § 34.100 (relating to non-lobbying), as applicable. To ensure such compliance, the Borrower has included in all contracts with respect to each Project (A) the contract clauses relating to applicable federal requirements (such as Davis -Bacon and Equal Employment Opportunity) and (B) requirements that its contractor(s) (1) shall comply with applicable federal laws, rules, regulations, and requirements set forth in this subsection and follow applicable federal guidance, and (2)
38 3734007.10 046357 CTR
incorporate in all subcontracts (and cause all subcontractors to include in lower tier subcontracts) such terms and conditions as are required to be incorporated therein by applicable federal laws, rules, regulations and requirements set forth in this subsection. With respect to the Davis-Bacon Act requirements, the Borrower has inserted in full in all contracts relating to each Project the contract clauses set forth in the Code of Federal Regulations, Title 29 Part 5.5, and required and ensured that its contractor(s) have insert ed such clauses in all subcontracts and also a clause requiring all subcontractors to include these clauses in any lower tier subcontracts. (k) Credit Ratings.
As of each WIFIA Loan Agreement Effective Date, t he
corresponding WIFIA Loan has received a public Investment Grade Rating from at least one (1) Nationally Recognized Rating Agency, written evidence of such rating was provided to the WIFIA Lender prior to the applicable WIFIA Loan Agreement Effective Date, and such rating has not been reduced, withdrawn or suspended.
(l) No Defaults . The
Borrower is not in default under the terms of any
Related Document, and no event has occurred or condition exists that , with the giving of notice or the passage of time or both, would constitute a System Event of Default or a Project Event of Default.
(m) Governmental Approvals. All Governmental Approvals required (i) as of the Effective Date to enter into , deliver and perform the Borrower’s obligations under this Agreement, (ii) as of each WIFIA Loan Agreement Effective Date t o enter into, deliver and perform the Borrower’s obligations under the applicable WIFIA Loan Agreement and the Principal Project Contracts then in effect, and (ii i) as of any subsequent date on which this representation is made (or deemed made) , with respe ct to each Project, for the undertaking, construction and completion by the Borrower of such Project , and for the operation and management of the System (including the Projects ), have been obtained or effected and are in full force and effect and there is no basis for, nor proceeding that is pending or threatened that could reasonably be expected to result in, the revocation of any such Governmental Approval. (n) Principal Project Contracts . A
ttached as Schedule 13 (n) (Existing
Principal Project Contracts ) to each WIFIA Loan Agreement, as of the corresponding WIFIA Loan Agreement Effective Date, is a list of the Existing Principal Project Contracts. With respect to each Principal Project Contract executed as of any date on which this representation and warranty is made, such Existing Principal Project Contract is in full force and effect and all conditions precedent to the obligations of the respective parties under each such Existing Principal Project Contract have been satisfied. The Borrower is not in breach of any material term in or in default under any of such Principal Project C ontracts, and to the knowledge of the Borrower no party to any of such agreements or contracts is in breach of any material term therein or in default thereunder.
(o) Information. The
information furnished by the Borrower to the WIFIA
Lender, when taken as a whole, does not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements contained therein not misleading as of the date made or furnished ; provided, that no representation or warranty is made with regard to projections or other forward- looking statements provided by or on behalf of the Borrower (including the Base Case Financial Model or any Financial Plan, and the assump tions therein)
39 3734007.10 046357 CTR
except that each of the Base Case Financial Model and each Financial Plan (i) is based on assumptions that were reasonable in all material respects when made, (ii) was prepared in good faith and (iii) represents, in the opinion of the Borrow er, reasonable projections at the time made of the future performance of the Borrower and the System (it being understood that projections are not to be considered or regarded as facts and contain significant uncertainties and contingencies, many of which are beyond the control of the Borrower, that actual results may differ significantly from projections and that no representation is made with respect to the accuracy of such projections).
(p) OFAC; A
nti-Corruption Laws . None of the Borrower , nor, to the knowledge of the Borrower, any Principal Project Party (i) is in violation of or, since the date that is five (5) years prior to the Effective Date, has violated : (A) any applicable anti -money laundering laws, including those contained in the Bank Secrecy Act and the Patriot Act; (B) any applicable economic sanction laws administered by OFAC or by the United States Department of State; or (C) any applicable anti -drug trafficking, anti-terrorism, or anti-corruption laws, civil or criminal; or (ii) is a Person (A ) that is charged with, or has received notice from a Governmental Authority that it is under investigation for, any violation of any such laws; (B ) that has been, since the date that is five (5) years prior to the Effective Date, convicted of any violation of, has been subject to criminal or civil penalties pursuant to, had any of its property seized or f orfeited under, or has entered into any agreement with the Government or a state or local government related to violations of any such laws; (C ) that is named on the list of “ Special Designated Nationals or Blocked Persons ” maintained by OFAC (or any successor Government office or list), or any similar list maintained by the United States Department of State (or any successor Government office or list); or (D) with whom any U.S. Person (as defined by the applicable OFAC regulations ) is prohibited from transacting business of the type contemplated by this Agreement, the other Related Documents and the Principal Project Contracts under any other applicable law.
(q) Compliance with Law . Th
e Borrower is in compliance in all material
respects with, and has conducted (or caused to be conducted) its management and operation of the System (including the Projects) in compliance in all material respects with, all applicab le laws (other than Environmental Laws, which are addressed in Section 13(r) (Representations and Warranties of Borrower – Environmental Matters )), to the extent applicable. No notices of violation of any applicable law have been issued, entered or receiv ed by the Borrower other than notices of violations that are immaterial.
(r) Environmental Matters . E
xcept as set forth in Schedule 13(r)
(Environmental Matters) of the applicable WIFIA Loan Agreement, each of the Borrower and, to the Borrower’s knowledge, each Principal Project Party is in compliance with all laws applicable to the System (including the Project) relating to (i) air emissions; (ii) discharges to surface water or ground water; (iii) noise emissions; (iv) solid or liquid waste disposal; (v) the use, generation, storage, transportation or disposal of toxic or hazardous substances or wastes; (vi) biological resources (such as threatened and endangered species); (vii) other environmental, health or safety matters, including all laws applicable to th e Project; and (viii) water quality and drinking water standards (collectively, the “ Environmental Laws ”). All Governmental Approvals for the Projects relating to Environmental Laws have been, or, when required, will be, obtained and are (or, as applicabl e, will be) in full force and effect. Except as set forth in Schedule 13(r)
40 3734007.10 046357 CTR
(Environmental Matters ) of the applicable WIFIA Loan Agreement , the Borrower has not received any written communication or notice, whether from a Governmental Authority, employee, citizens group, or any other Person, that alleges that the Borrower is not in full compliance with all Environmental Laws and Governmental Approvals relating thereto in connection with the Projects and, to the Borrower ’s knowledge, there are no circumstances that may prevent or interfere with full compliance in the future by the Borrower with any such Environmental Law or Governmental Approval . The Borrower has provided to the WIFIA Lender all material assessments, reports, results of investigations or audits, and other material information in the possession of or reasonably available to the Borrower regarding the Borrower’s or each Project’s compliance with (A) Environmental Laws and (B) Governmental Approvals relating to Environmental Laws that are required for the Projects. (s) Sufficient Rights and Utilities . T
he Borrower possesses either valid legal
and beneficial title to, leasehold title in, or other valid legal rights with respect to the real property relating to the System ( including the Projects), in each case as is necessary and sufficient as of the date this representation is made for the construction, operation, maintenance and repair of the System ( including the Projects). As of any date on which this representation and warranty is made, the Principal Project Contracts then in effect and the Governmental Approvals that have been obtained and are then in full force and effect create rights in the Borrower sufficient to enable the Borrower to own, construct, operate, maintain and repair the Projects and to perform its obligations under the Principal Project Contracts to which it is a party. All utility services, means of transportation, facilities and other materials necessary for the construction and operation of the Projects (including, as necessary, gas, electrical, water and sewage services and facilities) are, or will be when needed, available to the Projects and arrangements in respect thereof have been made on commercially reasonable terms. (t) Insurance. T
he Borrower is in compliance with all insurance obligations required under each Principal Project Contract and the Related Documents as of the date on which this representation and warranty is made. To the extent the Borrower self -insures, the Borrower’s self-insurance program is actuarially sound. (u) Title. The Borrower has valid legal and beneficial title to, or a valid leasehold interest in, the personal property and other assets and revenues thereof (including the Net System Revenues) on which it purports to grant Liens pursuant to the Indenture Documents and this Agreement, in each case free and clear of any Lien of any kind, except for Permitted Liens.
(v) No Liens. Except for Permitted Liens, the Borrower has not created, and is not under any obligation to create, and has not entered into any transaction or agreement that would result in the imposition of, any Lien on the System Revenues, the Net System Revenues , the System, the Projects, or the properties or assets in relation to the Projects. (w) Intellectual Property . T
he Borrower owns, or has adequate licenses or
other valid rights to use, all patents, trademarks, service marks, trade names, copyrights, franchises, formulas, licenses and other rights with respect thereto and has obtained assignment of all licenses and other rights of whatsoever nature, in each case necessary for the Projects and the operation of th e System. To the Borrower ’s knowledge, there exists no conflict with the
41 3734007.10 046357 CTR
rights or title of any third party with respect to the intellectual property described in the preceding sentence. Excluding the use of commercially available “off-the-shelf” software, to the Borrower’s knowledge, no product, process, method, substance, part or other material produced or employed or presently contemplated to be produced by or employed by the Proje cts infringes or will infringe any patent, trademark, service mark, trade name, copyright, franchise, formula, license or other intellectual property right of any third party. (x) Financial Statements . Each income statement, balance sheet and statement of operations and cash flow s (collectively, “Financial Statements”) delivered to the WIFIA Lender pursuant to Section 22(b) (System Financial Planning and Reporting – Financial Statements) has been prepared in accordance with GAAP and presents fairly, in all mat erial respects, the financial condition of the Borrower as of the respective dates of the balance sheets included therein and the results of operations of the Borrower for the respective periods covered by the statements of income included therein. Except as reflected in such Financial Statements, there are no liabilities or obligations of the Borrower of any nature whatsoever for the period to which such Financial Statements relate that are required to be disclosed in accordance with GAAP.
(y) No Lobbying. Pursuant to 31 U.S.C. §1352, to the best of the Borrower’s knowledge and belief, (i) no Federal appropriated funds have been paid or will be paid, by or on behalf of the Borrower, to any P erson for influencing or attempting to influence an officer or employee of an agency, a m ember (or employee of a member), officer, or employee of the U.S.
Congress, in connection with the making of the WIFIA Loan, execution (including amendments or modifications) of any WIFIA Loan Document, or any other federal action under 31 U.S.C. §1352(a)(2); and (ii) if any funds other than Federal appropriated funds have been paid or will be paid to any Person for influencing or attempting to influence an officer or employee of any agency, a member (or employee of a member), officer, or employee of the U.S. Congress in connection with the WIFIA Loan, the Borrower has completed and submitted to the WIFIA Lender Standard Form -LLL, “Disclosure Form to Report Lobbying,” in accordance with its instructions.
(z) Taxes. T
he Borrower is not require d to file tax returns w ith any Governmental Authority.
(aa) Sufficient Funds. The Master Program Amount, when combined with all other funds committed for the development and construction of all Projects contemplated for the Master Program as set forth in the various sources of funds in the Base Case Financial Model and the Financial Plan, will be sufficient to carry out the Master Program. With respect to each Project, the amount of the WIFIA Loan for such Project, when combined with all other funds committed for the development and construction of such Project as set forth under the various sources of funds in the Base Case Financial Model , the Project Budget and the Financial Plan will be sufficient to carry out such Project, pay all Total Project Costs anticipated for the development and construction of such Project and achieve Substantial Completion of such Project by the Projected Substantial Completion Date with respect to such Project . The total federal assistance provided to each Project, including the Maximum Principal Amount of t he WIFIA Loan for such Project, does not exceed eighty percent (80%) of Total Project Costs for such Project. The Financial Plan most recently delivered to the WIFIA Lender pursuant to
42 3734007.10 046357 CTR
Section 22(a) (System Financial Planning and Reporting – Financial Plan) demonstrates that the projected System Revenues are sufficient to meet the WIFIA Debt Service for each Project. The Borrower has developed, and identified adequate revenues to implement, a plan for operating, maintaining, and repairing each Project over the useful life of such Project. (bb) Sovereign Immunity. The Borrower either (i) h as no immunity from the jurisdiction of any court of competent jurisdiction or from any legal process therein which could be asserted in any action to enforce the obligations of the Borrower under any of the Related Documents to which it is a party or the transactions contemplated hereby or thereby, including the obligations of the Borrower hereunder and thereunder ; or, (ii) to the extent that the Borrower has such immunity, the Borrower has waived such immunity pursuant to Section 15(r) (Affirmative Covenants – Immunity).
(cc) Patriot Act. The Borrower is not required to establish an anti -m oney
laundering compliance program pursuant to the Patriot Act. (dd) Senior State Loans . No Senior State Loan is currently in effect, and the Borrower has no remaining obligations under or in respect of any Senior State Loan. (ee) Federal Debt. The Borrower has no delinquent federal debt ( including tax liabilities but excluding delinquenc ies that have been resolved with the appropriate federal agency in accordance with the standards of the Debt Collection Improvement Act of 1996). (ff) Permitted Investments . The Borrower has neither made any investment nor entered into any agreements for the purpose of effecting any investment which (i) is not permitted pursuant to the Indenture Documents in effect as of any date on which this representation and warranty is made or (ii) does not qualify as a Permitted Investment. (gg) Operations and Maint enan
ce Plan. As of each WIFIA Loan Agreement
Effective Date, the Borrower has developed an operations and maintenance plan with respect to the corresponding Project that identifies adequate revenues to operate, maintain, and repair such Project during its useful life.
Section 14. Repr
esentations and Warranties of WIFIA Lender.
The WIFIA Lender represents and warrants that:
(a) Power and Authority. The WIFIA L ender has all requisite power and authority to make the WIFIA Loan and to perform all transactions contemplated by the Related Documents to which it is a party.
(b) Due Execution; Enforceability. The Related Documents to which it is a party have been duly authorized, executed and delivered by the WIFIA Lender, and are legally valid and binding agreements of the WIFIA Lender, enforceable against the WIFIA lender in accordance with their terms.
43 3734007.10 046357 CTR
(c) Officers’ Authorization. The officers of the WIFIA Lender executing each of the Related Documents to which the WIFIA Lender is a party are duly and properly in office and fully authorized to execute the same on behalf of the WIFIA Lender.
ARTICLE V
COVE
NANTS
Section 15. Af firmative Covenants.
The Borrower covenants and agrees as follows until the date each WIFIA Bond and all of the obligations of the Borrower under this Agreement and each WIFIA Lo an Agreement (other than contingent indemnity obligations) are irrevocably paid in full in cash , unless the WIFIA Lender waives compliance in writing:
(a) Securing Liens. The Borrower shall at any and all times, to the extent permitted by law, pass, make, do, execute, acknowledge and deliver, all and every such further resolutions, acts, deeds, conveyances, assignments, transfers and assurances as may be necessary or desirable in connection with assuring, conveying, granting, assigning, securing and confirming the Liens on the Net System Revenues (whether now existing or hereafter arising) granted for the benefit of the WIFIA Lender pursuant to the Indenture Documents, or intended so to be granted pursuant to the Indenture Documents, or which the Borrower may become bound to grant, and the Borrower shall at all times maintain the Net System Revenues free and clear of any pledge, Lien, charge or encumbrance thereon or with respect thereto that has priority over, or equal rank with, the Liens created by the Indenture Documents, other than as permitted by this Agreement, and all organizational, regulatory or other necessary action on the part of the Borrower to that end shall be duly and validly taken at all times. The Borrower shall at all times, to the extent per mitted by law, defend, preserve and protect the Liens on the Net System Revenues granted pursuant to the Indenture Documents and all the rights of the WIFIA Lender under the Indenture Documents against all claims and demands of all Persons whomsoever, subject to Permitted Liens.
(b) Copies of Documents. The Borrower shall furnish to the WIFIA Len der a
copy of the final offering documents (including any Indenture Documents) , as well as copies of any continuing disclosure documents, prepared by or on behalf of the Borrower in connec tion with the incurrence of any Additional Parity Obligations , in each case pr omptly following the publication, incurrence, issuance or filing thereof. Except as otherwise agreed by the WIFIA Lender in writing, the Borrower shall provide to the WIFIA Lender an executed version of any Additional Principal Project Contract, together with any related contracts, side letters or other understandings, promptly following the full execution thereof. (c) Use of Proceeds . T
he Borrower shall use the proceeds of the WIFIA
Loans for purposes permitted by applicable law and as otherwise permitted under this Agreement and the other Related Documents.
(d) Prosecution of Work; Verification Requirements.
44 3734007.10 046357 CTR
(i) The Borrower shall diligently prosecute the work relating to the each Project and complete each Project in accordance with the applicable Project Schedule, and in accordance with the highest standards of the Borrower’s industry. (ii) The Borrower shall ensure that each Principal Project Party complies with all applicable laws and legal or contractual requirements with respect to any performance security instrument delivered by such Principal Project Party to the Borrower and shall ensure that any letter of credit provided pursuant to any Principal Project Contract meets the requirements therefor set forth in such Principal Project Contract.
(iii) The Borrower shall comply with Subpart C of 2 C.F.R. Part 180, as supplemented by Subpart C of 2 C.F.R. Part 1532 (relating to debarment), including the verification requirements set forth in 2 C.F.R. §§ 180.300 and 180.320, and shall include in its contracts with respect to each Project similar terms or requirements for compliance. (e) Operations and Maintenance. The Borrower shall (i) o perate and maintain
the System (including the Projects) (A) in a reasonable and prudent manner and (B) substantially in accordance with the most recent Financial Plan (except as necessary to prevent or mitigate immediate threats to human health and safety or to prevent or mitigate physical damage to material portions of the System ( including the Projects)) and (ii) maintain the System ( including the Projects ) in good repair, working order and condition and in accordance with the requirements of all applicable laws and each applicable Related Document. The Borrower shall at all times do or cause to be done all things necessary to obtain, preserve, renew, extend and keep in full force and effect the Governmental Approvals and any other rights, licenses, franchises, and authorizations material to the conduct of its business. (f) Insurance.
(i) The Borrower shall at all times, through a combination of insurance policies and self -insurance programs, maintain or cause its contractors to maintain, all insurance necessary and sufficient to protect the Borrower, the System and the Project s as is customarily maintained by the Borrower with respect to works and properties of like character, against accident to, loss of, damage to and liability from such works or properties (including, in the case of each Project, during the applicable Construction Period), and, in each case, satisfying the requirements of the Related Documents and the Principal Project Contracts.
(ii) The Borrower shall cause all liability insurance policies (if any) that it maintains ( excluding property damage, automobile or workers’ compensation insurance), to reflect the WIFIA Lender as an additional insured. All such policies shall be available at all reasonable times for inspection by the WIFIA Lender, its agents and representatives.
(iii) The Borrower shall comply with the insurance requirements of the Indenture Documents and, if requested by the WIFIA Lender, shall deliver to the WIFIA Lender within thirty (30) days after receipt of any such request any certifications or
45 3734007.10 046357 CTR
opinions provided to the Borrower pursuant to the Indenture Documents with respect to the Borrower’s program of insurance or self-insurance.
(g) Notice.
(i) The Borrower shall, within ten (10) Business Days after the Borrower learns of the occurrence, give the WIFIA Lender notice of any of the following events or receipt of any of the following notices, as applicable , setting forth details of such event:
(A) Substantial Completion : the occurrence of Substantial Completion of each Project, such notice to be provided in the form set forth in Exhibit I (Form of Certificate of Substantial Completion);
(B) Events of Default : (1) an y System Event of Default or any event that, with the giving of notice or the passage of t ime or both, would constitute a System Event of Default and (2) any Project Event of Default or any event that, with the giving of notice or the passage of time or both, would constitute a Project Event of Default;
(C) Litigation: ( 1) the filing of any litigation, suit or action, or the commencement of any proceeding, against the B orrower before a ny arbitrator, Governmental Authority, alternative dispute resolution body, or other neutral third-party, or the receipt by the Borrower in writing of any threat of litigation, suit , action, or proceeding, or of any written claim against the Borrower that, in each case, could reasonably be expected to have a Material Adverse Effect, and any material changes in the status of such li tigation, suit, action or claim; and (2) any judgments against the Borrower with award amounts in excess of $50,000,000, either individually or in the aggregate;
(D) Certain Defaults: any m
aterial breach or default or event of
default on the part of the Borrower or any other party under any Principal Project Contract or under any Indenture Document;
(E) Uncontrollable Force : th
e occurrence of any
Uncontrollable Force that could reasonably be expected to materially and adversely affect the Master Program or any Project;
(F) Ratings Changes: any change in the rating assigned to any WIFIA Loan or any Parity Obligations by any Nationally Recognized Rating Agency that has provided a public rating on such indebtedness;
(G) Draws on Res erve Account: the occurrence of any draws on a Reserve Account to fund payments of interest on or principal of any Bond when due, including any draw on a ny Bond Reserve Fund Policy, or the payment of interest on or principal of any Bond by any Credit Provider (as defined in the Indenture); and
46 3734007.10 046357 CTR
(H) Cessation of Work: the cessation of all major construction work on any Project where such cessation is expected to or does ex tend for a period of thirty (30) days or more.
(ii) The Borrower shall, within thirty (30) Business Days after the B
orrower learns of the occurrence, give the WIFIA Lender notice of any of the following events or receipt of any of the following notices, as appl icable, setting forth details of such event:
(A) Insurance Claim : any insurance claims made by the Borrower or any Principal Project Party in respect of any Project in excess of $50,000,000 either individually or in the aggregate, to the extent related to any Project or to the extent the proceeds from such insurance claim would be deposited into a System Account;
(B) 2 C.F.R. § 180.350 Notices : a ny notification required pursuant to 2 C.F.R. § 180.350, whether attributable to a failure by the Borrower to disclose information previously required to have been disclosed or due to the Borrower or any of its principals meeting any of the criteria set forth in 2 C.F.R. § 180.335; and (C) Other Adverse Events : t
he occurrence of any other event
or condition, including any notice of breach from a contract counterparty, that could reasonably be expected to result in a Material Adverse Effect or have a material and adverse effect on the Master Program or any Project.
(iii) The
Borrower shall, in accordance with Environmental Laws but not later than thirty (30) Business Days after the Borrower learns of the occurrence, give the WIFIA Lender notice of any of the following events or receipt of any of the following notices, as applicable, setting forth details of such event:
(A) E
nvironmental Notices : any material N otice of Violation under and as defined in any Environmental Law related to any Project or any material changes to any NEPA Determination;
(B) Archeological or Historical Resources: t he discovery of any potential arch eological or historical resources during the course of construction of any Project; and
(C) Endangered or Threatened Species : t he discovery of any unexpected endangered or threatened species during the course of construction of any Project.
(iv) Th e Borrower sh all provide the WIFIA Lender with any further information reasonably requested by the WIFIA Lender from time to time concerning the matters described in this Section 15(g) (Affirmative Covenants – Notice). (h) Remedial A ction. Within sixty (6 0) calendar days after the Borrower learns of the occurrence of an event specified in Section 15(g) (Affirmative Covenants – Notice)
47 3734007.10 046357 CTR
(excluding Section 15(g)(i)(A) (Affirmative Covenants – Notice – Substantial Completion) and, in the case of a ratings upgrade , Section 15(g)(i)(F) (Affirmative Covenants – Notice – Ratings Changes)), the Borrower ’s Authorized Representative shall provide a statement to the WIFIA Lender setting forth the actions the Borrower proposes to take with respect thereto. (i) [Intentionally Omitted].
(j) System Accounts; Permitted Investments.
(i) The Borrow er shall maintain the Revenue Fund as an enterprise fund separate and apart from all other funds of the Borrower. The Revenue Fund shall be administered in accordance with the Indenture.
(ii) The Borrower shall cause all Reserve Accounts to be funded in such amounts and under such conditions as are required by the Indenture Documents. (iii) Amounts on deposit in the System Accounts shall be held uninvested or invested in Permitted Investments pursuant to the terms of t he Indenture.
Permitted Investments must mature or be redeemable at the election of the holder at such times as may be necessary to ensure that funds will be available within the applicable account to be applied towards the purpose for which the applicabl e account has been established.
(k) Rate Covenant.
(i) The Borrower shall establish, fix and prescribe rates, fees and charges in connection with the System in compliance with the provisions of Section 6.13 of the Indenture, as in effect as of the Effective Date and as such provisions are set forth in Schedule 15 (k) ( Rate Covenant ) (subject to this Section 15(k)(i) ( Affirmative Covenants – Rate Covenant), the “Rate Covenant”).
(ii) If the forecast furnished by the Borrower in the most recent Financial Plan delive red b y the Borrower pursuant to Section 22( a) (System Financial Planning and Reporting – Financial Plan) demonstrates that projected Net System Revenues may be inadequate to satisfy the Rate Covenant for any Borrower Fiscal Yea r covered by such Financial Plan , or if the Borrower fails to satisfy the Rate Covenant for the most recently ended Borrower Fiscal Year, the Borrower shall (A) within ninety (90) days after request by the WIFIA Lender, engage the Professional Utility Consultant to review and analyze the o perations of the System and recommend actions regarding revising the rates or changing the methods of operations, or any other actions to increase the Net System Revenues so as to satisfy the Rate Covenant, (B) cause the Professional Utility Consultant to issue its report, including any such recommended actions, no later than ninety (90) days following such engagement, and (C) either (1) implement the Professional Utility Consultant’s recommendation or (2) undertake an alternative course of action after dem onstrating to the WIFIA Lender’s satisfaction that an alternative plan will generate an equivalent or greater increase to the Net System Revenues so as to satisfy the Rate Covenant.
48 3734007.10 046357 CTR
(l) Compliance w ith Law . The Borrower shall, and shall require its contractors and subcontractors at all tiers with respect to each Project to, comply in all material respects with all applicable federal, State and local laws, rules, regulations and requirements, including (i) 40 U.S.C. §§3141- 3144, 3146, and 3147 (Davis -Bacon Act Requirements) and (ii) 33 U.S.C. §3914 (relating to American iron and steel products). To ensure such compliance, the Borrower shall include in all contracts with respect to the Projects requirements that its contractor(s) shall comply with applicable fede ral laws, rules, regulations, and requirements set forth in this Section 15(l) (Affirmative Covenants – Compliance with Law) and follow applicable federal guidance, and shall require that the contractor(s) incorporate in all subcontracts (and cause all subcontractors to include in all lower tier subcontracts) such terms and conditions as are required to be incorporated therein by applicable federal laws, rules, regulations and requirements set forth in this Section 15(l) ( Affirmative Covenants – Compliance with Law ).
With respect to the Davis -Bacon Act requirements, the Borrower shall insert in full in all contracts relating to the Projects the contract clauses set forth in the Code of Federal Regulations, Title 29 Part 5.5, and require and ensure that its contractor(s) insert such clauses in all subcontracts with respect to the Projects and also a clause requiring all subcontractors to include these clauses in any lower tier subcontracts.
(m) Material Obligations ; Lie ns. The Borrower shall pay its material obligations promptly and in accordance with their terms and pay and discharge promptly all taxes, assessments and governmental charges or levies imposed upon it or upon the System Revenues or other assets of the System, before the same shall become delinquent or in default, as well as all lawful and material claims for labor, materials and supplies or other claims which, if unpaid, might give rise to a Lien upon such properties or any part thereof or on the System Revenues or the Net System Revenues ; provided, however , that such payment and discharge shall not be required with respect to any such tax, assessment, charge, levy, claim or Lien so long as the validity or amount thereof shall be contested by the Borrower in good faith by appropriate proceedings and s o long as the Borrower shall have set aside adequate reserves with respect thereto in accordance with and to the extent required by GAAP, applied on a consistent basis. (n) [Intentionally Omitted].
(o
) SAM Registration. The Borrower shall (i) obtain and maintain an active registration status with the federal System for Award Management ( www.SAM.gov) (or any successor system or registry) prior to the Effective Date and provide such registration information to the WIFIA Lender and (ii) within sixty (60) days prior to each anniversary of the Effective Date until each Final Disbursement Date , provide to the WIFIA Lender evidence of such active registration status with no active exclusions reflected in such registration. (p) UEI. T
he Borrower shall (i) obtain a UEI prior to the Effective Date and provide such UEI to the WIFIA Lender and (ii) within sixty (60) days prior to each anniversary of the Effective Date, provide to the WIFIA Lender evidence of the continuing effectiveness of such UEI, in each case until each Final Maturity Date or to such earlier date as all amounts due or to become due to the WIFIA Lender under this Agreement and the WIFIA Loan Agreements have been irrevocably paid in full in cash.
49 3734007.10 046357 CTR
(q) Events of Loss; Loss Proceeds . If an Event of Loss shall occur wi th respect to the System (including the Projects ) or any par t thereof, the Borrower shall (i) diligently pursue all of its rights to compensation against all relevant insurers, reinsurers and Governmental Authorities, as applicable, in respect of such event and (ii ) pay or apply all Loss Proceeds stemming from such event in accordance with the Indenture and, to the extent applicable, Section 10 ( Prepayment); provided that, to the extent Loss Proceeds are attributable to any Project, such Loss Proceeds shall be applied to repair, reconstruct, reinstate, restore and/or replace those portions of the Project in respect of which the applicable Loss Proceeds were received, if and to the extent permitted by the Indenture. (r) Immunity. T o the fullest extent permitted by applicable law, the Borrower agrees that it will not assert any immunity (and hereby waives any such immunity) it may have as a governmental entity from lawsuits, other actions and claims, and any judgments with respect to the enforcement of any of the obligations of the Borrower under this Agreement or any other WIFIA Loan Document.
(s) Patriot Act. If the anti -mone
y laundering compliance program provisions
of the Patriot Act become applicable to t he Borrower, then the Borrower sha ll provide written notice to the WIFIA Lender of the same and shall promptly establish an anti -money laundering compliance program that complies with all requirements of the Patriot Act.
Section 16. Nega tive Covenants.
The Borrower covenants and agrees as follows until the date each WIFIA Bond and all of the obligations of the Borrower under this Agreement and each WIFIA Loan Agreement (other than contingent indemnity obligations) are irrevocably paid in full in cash , unless the WIFIA Lender waives compliance in writing:
(a) Indebtedness.
(i) The Borrower covenants that it shall not issue any Additional Parity Obligations other than as expressly permitted under the applicable provisions of the Indenture, as in effect as of the Effective Date and as such provisions are set forth in Schedule 16(a) (Additional Bonds Test).
(ii) The Borrower shall provide to the WIF IA Lender notice of the issuance of Additional Parity Obligations in a manner consistent with its continuing disclosure requirements, which notice shall confirm that the issuance of such Additi onal Parity Obligations is permissible pursuant to clause (i) of this Section 16(a) ( Negative Covenants – Indebtedness).
(iii) Without limiting anything in this Section 16(a) ( Negative Covenants – Indebtedness ), the Borrower shall not incur any Obligation that doe s not constitute Permitted Debt hereunder, including, in the case of any Obligation subordinate to the Parity Obligations, satisfaction of the requirements under the definition of “Subordinated Obligations.”
50 3734007.10 046357 CTR
(iv) Notwithstanding any of the foregoing clauses of this Section 16(a) (Negative Covenants – Indebtedness ) or anything contained in the Indenture, the Borrower covenants that it will not have Outstanding at any time Parity Obligations that constitute Variable R ate Indebtedness in excess of twenty -five p ercent ( 25%) of the Borrower’s total Parity Obligations.
(v) Notwithstanding any of the foregoing clauses of this Section 16(a) (Negative Covenants – Indebtedness ) or anything contained in the Indenture, the Borrower shall not issue or enter into any Senior St ate Loans or pay any amount with respect to any loan agreement with the State (or any board, department or agency thereof) prior to the payment of the Parity Obligations.
(b) No Lien Extinguishment or Adverse Amendments. The Borrower shall not, and shall not permit any Person to, without the prior written consent of the WIFIA Lender, either (i) extinguish or impair the Liens on the Net System Revenues granted pursuant to the Indenture, (ii) amend, modify, replace or supplement any Related Document in a manner that could adversely affect the WIFIA Lender (in the WIFIA Lender’s determination) in connection with the WIFIA Loan, (iii) waive or permit a waiver of any provision of any Related Document in a manner which could adversely affect the WIFIA Lender (in the WIFIA Lender’s determination) in connection with the WIFIA Loans , or which could reasonably be expected to have a Material Adverse Effect (in the WIFIA Lender’s determination), (iv) assign, terminate or replace any Related Document or (v) provide in any In denture Document, or in any other financing document with respect to any Parity Obligation , that the holders of such Parity Obligations may accelerate such Parity Obligations , or require the mandatory prepayment in full thereof, in the case of any breach or event of default thereunder, unless the WIFIA Lender is concurrently provided, pursuant to an amendment to this Agreement and (if necessary) the Indenture, with such acceleration or mandatory prepayment right with respect to the WIFIA Bonds. Except as o therwise agreed by the WIFIA Lender in writing, the Borrower will provide to the WIFIA Lender (x) copies of any proposed amendments, modifications, replacements of, or supplements to any Related Document at least thirty (30) days prior to the effective dat e thereof and (y) complete, correct and fully executed copies of any amendment, modification or supplement to any Related Document within thirty (30) days after execution thereof. (c) No Prohibited Liens. Except for Permitted Liens, the Borrower shall not create, incur, assume or permit to exist any Lien on the Projects , the System Revenues, the Net System Revenues , or the Borrower ’s respective rights therein . The Borrower shall not collaterally assign any of its rights under or pursuant to any Principal Pr oject Contract and shall not permit a Lien to encumber the Borrower’s rights or privileges under any Principal Project Contract, unless pursuant to the Indenture Documents in favor of the Trustee on behalf of the Secured Parties.
(d) Restricted Payments and Tr ans
fers. The Borrower shall not permit
System Revenues or other assets of the System, or any funds in any accounts held under the Indenture or in any other fund or account held by or on behalf of the Borrower, to be paid or transferred or otherwise applied except as permitted by the Indenture. (e) [Intentionally Omitted]
.
51 3734007.10 046357 CTR
(f) No Prohibited Sale , Lease or Assignment. The Borrower shall not sell , lease or assign its rights in and to the System or the Project except as permitted by Section 6.03 of the Indenture.
(g) Borrowe r Fiscal Year. The Borrower shall not at any time adopt any fiscal year other than the Borrower Fiscal Year, except with thirty (30) days’ prior written notice to the WIFIA Lender.
(h) Change in Legal Structure; Mergers and Acquisitions. The Borrower shall not, and shall not agree to, (i) acquire by purchase or otherwise the business, property or fixed assets of, or equity interests or other evidence of beneficial ownership interests in, any Person, other than purchases or other acquisitions of inventory or materials or spare parts or Capital Expenditures, each in the ordinary course of business in compli ance with the annual budget set forth in the Financial Plan most recently approved by the WIFIA Lender or (ii) reorganize, consolidate with or merge into another Person unless ( A) such reorganization, merger or consolidation is with or into another entity established by State law and such reorganization, merger or consolidation is mandated by State law , and in each case, does not adversely affect or impair to any extent or in any manner ( 1) the System Revenues or the Net System Revenues or (2) the availability of the System Revenues for the payment and security of the obligations of the Borrower under the WIFIA Loan Documents ; and ( B) the Borrower provides to the WIFIA Lender, no later than sixty (60) days prior to the date of reorganization, consolidation or merger, prior written notice of such reorganization, consolidation or merger and the agreements and documents authorizing the reorganization, consolidation or merger, satisfactory in form and substance to the WIFIA Lender. The documents authorizing any reorganization, consolidation or merger shall contain a provision, satisfactory in form and substance to the WIFIA Lender, that, following such reorganization, consolidation or merger, the successor will assume, by operation of law or otherwise, the due and punctual performance and observance of all of the representations, warranties, covenants, agreements and conditions of this Agreement and the other Related Documents to which the Borrower is a party, and manage and operate the System and establish rates and charges consistent with the representations, warranties and covenants set forth herein. In addition, the Borrower shall provide all information concerning such reorganization, consolidation or merger as shall have been reasonably requested by the WIFIA Lender.
(i) No Defeasance of WIF
IA Bonds . The Borrower shall not defease the
WIFIA Bonds pursuant to the Indenture.
(j) OFAC Compliance. The Borrower shall not, (i ) violate (A) any applicable anti-money laundering laws, including those contained in the Bank Secrecy Act and the Patriot Act, (B) any applicable economic sanction laws administered by OFAC or by the United States Department of State, or (C) any applicable anti-drug trafficking, anti-terrorism, or anti-corruption laws, civil or criminal; or (ii) be a Person (A) that is charged with , or that has received notice from a Governmental Authority that it is under investigation for, any violation of any such laws, (B) that is convicted of any violation of, is subject to civil or criminal penalties pursuant to, ha s any of its property seized or forfeited under, or enters into any agreement with the Government or a state or local government related to violations of, any such laws, (C) that is named on the list of “Special Designated Nationals or Blocked Persons ” maintained by OFAC (or any successor
52 3734007.10 046357 CTR
Government office or list), or any similar list maintained by the United States Department of State (or any successor Government office or list), (D) with whom any U.S. Person (as defined in the applicable OFAC regulations) is prohibited from transacting business of the type contemplated by this Agreement, the other Related Documents and the Principal Project Contracts under any other applicable law, (E) that is owned, Controlled by, or affiliated with any Person identified in clause (A), (B), (C) or (D) of this clause (ii), or (F) is in violation of any obligation to maintain appropriate internal controls as required by the governing laws of the jurisdiction of such Person as are necessary to ensure compliance with the economic sanctions , anti-money laundering and anti -corruption laws of the United States of America and the jurisdiction where the Person resides, is domiciled or has its principal place of business.
Section 17. In demnification.
The Borrower shall, to the extent permitted by law, indemnify the WIFIA Lender and any official, employee, agent or representative of the WIFIA Lender (each such Person being herein referred to as an “ Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities, fines, penalties, costs and expenses (including the fees, charges and disbursements of any counsel for any Indemnitee and the costs of environmental remediation), whether known, unknown, contingent or otherwise, incurred by or asserted against any Indemnitee arising out of, in connection with, or as a result of (a) the execution, delivery and performance of this Agreement, any of the other Related Documents or the Principal Project Contracts , (b) the WIFIA Loans or the use of the proceeds thereof, or (c ) the violation of any law, rule, regulation, order, decree, judgment or administrative decision relating to the environment, the preservation or reclamation of natural resources, the management, release or threatened release of any hazardous material or to health and safety matters; in each case arising out of or in direct relation to any Project ; provided, that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities , fines, penalties, costs or related expenses are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee. In case any action or proceeding is brought against an Indemnitee by reason of any claim with respect to which such Indemnitee is entitled to indemnification hereunder, the Borrower shall be entitled, at its expense, to participate in the defense thereof ; provided that such Indemnitee has the right to retain its own counsel, at the Borrower’s expense, and such participation by the Borrower in the defense thereof shall not release the Borrower of any liability that it may have to such Indemnitee. Any Indemnitee against whom any indemnity claim contemplated in this Se ction 17 ( Indemnification) is made shall be entitled, after consultation with the Borrower and upon consultation with legal counsel wherein such Indemnitee is advised that such indemnity claim is meritorious, to compromise or settle any such indemnity claim. Any such compromise or settlement shall be binding upon the Borrower for purposes of this Section 17 (Indemnification). Nothing herein shall be construed as a waiver of any legal immunity that may be available to any Indemnitee. To the extent permitted by applicable law, neither the Borrower nor the WIFIA Lender shall assert, and each of the Borrower and the WIFIA Lender hereby waives, any claim against any Indemnitee or the Borrower, respectively, 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, this Agreement, any of the other Related Documents, the Principal Project Contracts, the other transactions contemplated hereby and thereby, the WIFIA Loans or the use of the proceeds
53 3734007.10 046357 CTR
thereof, provided, th at nothing in this sentence shall limit the Borrower ’s indemnity obligations to the extent such damages are included in any third party claim in connection with which an Indemnitee is entitled to indemnification hereunder . All amounts due to any Indemnitee under this Section 17 ( Indemnification) shall be payable promptly upon demand therefor. The obligations of the Borrower under this Section 17 (Indemnification) shall survive the payment or prepayment in full or transfer of the WIFIA Bonds , the enforcement of any provision of this Agreement or the other Related Documents, any amendments, waivers (other than amendments or waivers in writing with respect to this Section 17 ( Indemnification)) or consents in respect hereof or thereof, any System Event of Default or Project Event of Default, and any workout, restructuring or similar arrangement of the obligations of the Borrower hereunder or thereunder.
The obligations of the Borrower to make any payment under this Section 17 ( Indemnification) shall be subordinate to the payment of all Parity Obligations.
Section 18. Sale o
f WIFIA Loans.
The WIFIA Lender shall not sell any WIFIA Loan at any time prior to (a) the Substantial Completion Date relating to such WIFIA Loan or (b) if such WIFIA Loan has not been disbursed in full prior to the Substantial Completion Date, the earlier of (i) the date on which such WIFIA Loan has been disbursed in full or (ii) the date falling one year after the Substantial Completion Date of the corresponding Project. After such date, the WIFIA Lender may sell such WIFIA Loan to another entity or reoffer the WIFIA Loan into the capital markets only in accordance with the provisions of this Section 18 ( Sale of WIFIA Loan). Such sale or reoffering shall be on such terms as the WIFIA Lender shall deem advisable, and the Borrower shall act reasonably and cooperate with the WIFIA Lender in connection therewith, including by presenting to the Trustee in a timely manner the wri tten certificate required by the applicable WIFIA Supplemental Indenture for the transfer of the applicable WIFIA Bond; provided that no such sale shall obligate the Borrower to provide any disclosure materials or make any representations or agreements in connection with such sale or reoffering. I n making such sale or reoffering the WIFIA Lender shall not change the terms and conditions of such WIFIA Loan without the prior written consent of the Borrower in accordance with Section 31 (Amendments and Waiver s). The WIFIA Lender shall provide , at least sixty (60) days prior to any sale or reoffering of any WIFIA Loan, written notice to the Borrower of the WIFIA Lender’s intention to consummate such a sale or reoffering; provided that no such notice shall be required during the continuation of any System Event of Default or Project Event of Default. The provision of any notice pursuant to this Section with respect to any WIFIA Loan shall not (x ) obligate the WIFIA Lender to sell nor (y) provide the Borrower with any rights or remedies in the event the WIFIA Lender, for any reason, does not sell such WIFIA Loan.
ARTICLE VI
EVE
NTS OF DEFAULT AND REMEDIES
Section 19. Sy stem Events of Default and Remedies.
(a) A “System Event of Default” shall exist under this Agreement and each WIFIA Loan Agreement if any of the following occurs:
54 3734007.10 046357 CTR
(i) Payment Default . T he Borrower shall fail to pay any of the principal amount of or interest on any WIFIA Bond (including WIFIA Debt Service required to have been paid pursuant to the provisions of Section 9 (Payment of Principal and Interest ), when and as the payment thereof shall be required under such WIFIA Bond, this Agreement or the related WIFIA Loan Agreement or on any Final Maturity Date (each such failure, a “Payment Default”).
(ii) Covenant Default. The Borrower shall fail to observe or perform any covenant, agreement or obligation of the Borrower under this Agreement, any WIFIA Loan Agreement, any WIFIA Bond or any other WIFIA Loan Document (other than in the case of any Payment Default or any Project Event of Default), and such failure shall not be cured within thirty (30) days after the earlier to occur of (A) receipt by the Borrower from the WIFIA Lender of written notice thereof or (B) the Borrower’s knowledge of such failure ; provided that if such failur e is capable of cure but cannot reasonably be cured within such thirty (30) day cure period, then no System Event of Default shall be deemed to have occurred or be continuing under this Section 19(a) (ii) (Sys
tem Events of Default and Remedies – Covenant Default), and such thirty (30) day cure period shall be extended by up to one hundred fifty (150) additional days, if and so long as (x) within such thirty (30) day cure period the Borrower shall commence actions reasonably designed to cure such failure and shall diligently pursue such actions until such failure is cured and (y) such failure is cured within one hundred eighty (180) days of the date specified in either (A) or (B) above, as applicable. (iii) Mi srepresentation Default. Any of the representations, warranties or certifications of the Borrower made in or delivered pursuant to the WIFIA Loan Documents (or in any certificates delivered by the Borrower in connection with the WIFIA Loan Documents) shall prove to ha ve been false or misleading in any material respect when made or deemed made (or any representation and warranty that is subject to a materiality qualifier shall prove to have been false or misleading in any respect); provided, that no System Event of Defa ult shall be deemed to have occurred under this Section 19(a)(iii) (System Events of Default and Remedies – Misrepresentation D efault) if and so long as (A) such misrepresentation is not intentional, (B) such misrepresentation is not a misrepresentation in respect of Section 13(h) (Representations and Warranties of Borrower – No Debarment), Section 13(j) (Representations and Warranties of Borrower – Compliance with Federal Requirements ) or Section 13(p) (Representations and Warranties of Borrower – OFAC; Anti-Corruption Laws), Section 13(y) (No Lobbying), or Section 13(cc) (Representations and Warranties of Borrower – Patriot Act), (C) in the reasonable determination of the WIFIA Lender, such misrepresentation has not had, and would not reasonably be expected to result in, a Material Adverse Effect, (D) in the reasonable determination of the WIFIA Lender, the underlying issue giving rise to the misrepresentation is capable of being cured , (E) the underlying issue giving rise to the misrepresentation is cured by the Borrower within thirty (30) days from the date on which the Borrower first became aware (or reasonably should have become aware) of such misrepresentation , and (F) the Borrower diligently pursues such cure during such thirty (30) day period.
55 3734007.10 046357 CTR
(iv) Accel eration of Parity Obligations. Any acceleration shall occur of the maturity of any Parity Obligation, or any Parity Obligation shall not be paid in full upon the final maturity thereof.
(v) Cross Default With Financin g Documents. Any of the representations, warranties or certifications of the Borrower made in or delivered pursuant to the Indenture Documents, or made in or delivered pursuant to the documents (the “Other Loan Documents ”) under which any Parity Obligation is created or incurred, shall prove to be false or misleading in any material respect (each an “ Other Indebtedness Misrepresentation Default”), or any default shall occur in respect of the performance of any covenant, agreement or obligation of the Borrower under the Indenture Documents or the Other Loan Documents, and such default shall be continuing after the giving of any applicable notice and the expiration of any applicable grace period specified in the Indenture Documents or the Other Loan Documents (as the case may be) with respect to such default (each an “ Other Indebtedness Covenant Default”), if the effect of such Other Indebtedness Misrepresentation Default or Other Indebtedness Covenant Default shall be to permit the immediate acceleration of the maturity of any or all of the Parity Obligations , and, in the case of any such Other Indebtedness Misrepresentation Default or Other Indebtedness Covenant Default, the Borrower shall have failed to cure such Other Indebtedness Misrepresentation Default or Other Indebtedness Covenant Default or to obtain an effective written waiver thereof in accordance with the terms of such Parity Obligations.
(vi) [Intentionally
Omitted].
(vii) Judgm ents. One or more judgments (A) for the payment of money in an a ggregate amount in excess of $ 50,000,000 (inflated annually by CPI) that are payable from System Revenues and are not otherwise fully covered by insurance (for which the insurer has acknowledged and not disputed coverage) or (B) that would reasonably be expected to result in a Material Adverse Effect shall, in either case, be rendered against the Borrower, and the same shall remain undischarged for a period of thirty (30) consecutive days during which time period execution shall not be effectively stayed, or any action shall be legally taken by a judgment creditor to attach or levy upon any assets of the Borrower to enforce any such judgment. (viii) Failu
re to Maintain Existence. The Borrower shall fail to continue its existence as a commission duly constituted under the Charter and the laws of the State, unless at or prior to the time the Borrower ceases to exist in such form a successor public agency or governing body has been created by the State or the City pursuant to a valid and unchallenged State law or Charter amendment and has succeeded to the assets of the Borrower and has assumed all of the obligations of the Borrower under the WIFIA Loan Documents.
(ix) Occur rence of a Bankruptcy Related Event. A Bankruptcy Related Event shall occur with respect to the Borrower.
56 3734007.10 046357 CTR
(x) Invalidity o f WIFIA Loan Documents. (A) Any WIFIA Loan Document ceases to be in full force and effect (other than as a result of the termination thereof in accordance with its terms) or becomes void, voidable, illegal or unenforceable, or the Borrower contests in any manner the validity or enforceability of any WIFIA Loan Document to which it is a party or denies it has any further liability under any WIFIA Loan Document to which it is a party, or purports to revoke, terminate or rescind any WIFIA Loan Document to which it is a party; or (B) any Indenture Document ceases (other than as expressly permitted thereunder) to be effective or to grant a valid and binding security interest on any material portion of the Net System Revenues other than as a result of actions or a failure to act by, and within the control of, any Secured Party, and with the priority purported to be created thereby.
(xi) Failure to Satisfy Rate Covenant. In the case that the Borrower shall have failed to satisfy the Rate Covenant for any Borrower Fiscal Year, the Borrower shall have failed to regain compliance with the Rate Covenant for the immediately following Borrower Fiscal Year.
(b) Upon the occurrence of any Bankruptcy Related Event with respect to the B
orrower, all obligations of the WIFIA Lender her eunder and under the WIFIA Loan Agreements with respect to the D isbursement of any undisbursed amounts of any WIFIA Loan shall automatically be deemed terminated.
(c) Upon the occurrence of any other System Event of Default, the WIFIA Lender, by written notice to the Borrower, may (i) suspend or terminate all of its obligations hereunder with respect to the Disbursement of any undisbursed amounts of the WIFIA Loans and (ii) cease permitting interest on the WIFIA Loans to be capitalized. (d) Subject to clause (h) b elow, w henever any System Event of Default hereunder shall have occurred and be continuing, the WIFIA Lender shall be entitled and empowered to institute any actions or proceedings at law or in equity for the collection of any sums due and unpaid hereunder or under the WIFIA Bonds or the other WIFIA Loan Documents, and may prosecute any such judgment or final decree against the Borrower and collect in the manner provided by law out of the property of the Borrower the moneys adjudged or decreed to be payable , and the WIFIA Lender shall have all of the rights and remedies of a creditor, including all rights and remedies of a secured creditor under the Uniform Commercial Code, and may take such other actions at law or in equity as may appear necessary or desira ble to collect all amounts payable by Borrower under this Agreement, the WIFIA Loan Agreements, the WIFIA Bonds or the other WIFIA Loan Documents then due and thereafter to become due, or to enforce performance and observance of any obligation, agreement or covenant of the Borrower under this Agreement, the WIFIA Loan Agreements, the WIFIA Bonds or the other WIFIA Loan Documents.
(e) Whenever any System Event of Default hereunder shall have occurred and be continuing, the WIFIA Lender may suspend or debar the B orrower from further participation in any Government program administered by the WIFIA Lender and to notify other departments and agencies of such default.
57 3734007.10 046357 CTR
(f) Whenever a Payment Default with respect to any WIFIA Loan shall occur and be continuing, the Default Rate provisions of Section 6 ( Interest Rate) shall apply to such WIFIA Loan.
(g) No action taken pursuant to this Section 19 (System Events of Default and Remedies) shall relieve Borrower from its obligations pursuant to this Agreement, the WIFIA Loan Agreements, the WIFIA Bonds or the other WIFIA Loan Documents, all of which shall survive any such action.
(h) Notwithstanding anything to the contrary in this Section 19 (System Events of Default and Remedies ), the WIFIA Lender may not take any action, in law or equity, attempting to control, enforce or direct the application of System Revenues in the Revenue Fund or any other fund maintained under the Indenture, or to enforce the pledge of Net System Revenues pursuant to the Indenture or this Agreement or to accelerate the payment obligations under the WIFIA Bonds , or to take any other remedial action under circumstances where the System Event of Default is also an “Event of Default” under the Indenture and where, in the determination of the Trustee, such action would adversely affect the rights of the Trustee or other Secured Parties, except pursuant to the WIFIA Lender’s rights as a Bondholder under the Indenture, and in the exercise of any such rights under the Indenture, the WIFIA Lender, as a Bondholder, will have such rights accorded to it measured as a Bond Obligation (as defined in the Indenture), on a parity with all other Bonds and any other Parity Obligations as provided in the Indenture. For the avoidance of doubt, nothing herein shall prevent the WIFIA L ender from taking any action contemplated by clauses (b), (c), (e) or (f) above if a System Event of Default shall occur and be continuing.
Section 20. Pr
oject Events of Default and Remedies.
(a) A “Project Event of Default” shall exist under the WIFIA Loan Agreement for the relevant Project to which such event relates (and not under any other WIFIA Loan Agreement) if any of the following occurs:
(i) Development Default. A Development Default shall occur. (ii) Project Abandonment . The Borrower shall abandon the relevant Project, unless otherwise approved by the WIFIA Lender. (b) Upon the occurrence of a ny P roject Event of Default , the WIFIA Lender may suspend or terminate all of its obligations under the relevant WIFIA Loan Agreement with respect to the D isbursement of any undisbursed amounts of the relevant WIFIA Loan. In addition, upon any Project Event of Default, (i) interest shall immediately cease to be capitalized and (ii) the Default Rate provisions of Section 6 ( Interest Rate) shall apply , in each case with respect to the relevant WIFIA Loan.
58 3734007.10 046357 CTR
Section 21. Ac counting and Audit Procedures; Inspections; Reports and Records. (a) System Related Accounting and Audit Procedures; Reports and Records. (i) The Borrower shall establish fiscal controls and accounting procedures sufficient to assure proper accounting for all System R evenues, operating expenses, capital expenses, depreciation, reserves, debt issued and outstanding and debt payments. The Borrower shall use accounting, audit and fiscal procedures conforming to GAAP.
(ii) The Borrower shall provide to the WIFIA Lender, promptly after the receipt thereof, copies of (A ) final ratings and any notices, reports or other written materials (other than those that are ministerial in nature) received from, any Nationally Recognized Rating Agency that has provided, or is being requested to provide, a rating with respect to any Parity Obligations and (B) all notices and other written communications, other than those that are non- substantive or ministerial in nature, received by it from the Trustee or any Bondholder.
(iii) The Borrower shall provide to the WIFIA Lender, concurrently with delivery to the Trustee, copies of all reports, notices and other written materials, other than those that are non-substantive or ministerial in nature, required to be sent to the Trustee or any Bondholder under the Indenture Documents , relating to any of the operation of the System, System Revenues, or rates and charges established by the Borrower for the System ; provided that the Borrower need not provide those items that are non-substantive or ministerial in nature.
(b) Project Re lated Accounting and Audit Procedures; Inspections; Reports and Records.
(i) The Borrower shall establish fiscal controls and accounting procedures sufficient to assure proper accounting for all costs related to the Projects , WIFIA Loan requisitions submitted, WIFIA Loan proceeds received, payments made by the Borrower with regard to the Project s, other sources of funding for the Project s (including amounts paid from such sources for Project costs so that audits may be performed to ensure compliance with and enforcement of this Agreement and all other WIFIA Loan Documents ). The Borrower shall use accounting, audit and fiscal procedures conforming to GAAP, including, with respect to the WIFIA Loans , accounting of principal and interest payments, disbursements, prepayments and calculation of interest and principal amounts outstanding. (ii) So long as any WIFIA Loan or any portion thereof shall remain outstanding and until five (5) years after such WIFIA Loan shall have been paid in full, the WIFIA Lender shall have the right, upon reasonable prior notice, to visit and inspect any portion of the relevant Project , to examine books of account and records of the Borrower relating to such Project, to make copies and extracts th erefrom at the Borrower’s expense, and to discuss the Borrower’s affairs, finances and accounts relating to such Project with, and to be advised as to the same by, its officers and employees and
59 3734007.10 046357 CTR
its independent public accountants (and by this provision the Borrower irrevocably authorizes its independent public accountants to discuss with the WIFIA Lender the affairs, finances and accounts of the Borrower, whether or not any representative of the Borrower is present, it being understood that nothing contained in this Section 21(b ) (Accounting and Audit Procedures; Inspections; Reports and Records – Project Related Accounting and Audit Procedures; Inspections; Reports and Records ) is intended to confer any right to exclude any such representative from such dis cussions), all at such reasonable times and intervals as the WIFIA Lender may request . The Borrower agrees to pay all out -of-pocket expenses incurred by the WIFIA Lender in connection with the WIFIA Lender’s exercise of its rights under this Section 21(b) ( Accounting and Audit Procedures; Inspections; Reports and Records – Project –Related Accounting and Audit Procedures; Inspections; Reports and Records ) at any time when a System Event of Default or Project Event of Default shall have occurred and be continuing; (iii) The Borrower shall maintain and retain all files relating to the Projects and the WIFIA Loans until five (5) years after the later of the date on which ( A) all rights and duties under this Agreement and the WIFIA Loan Agreements and under the corr esponding WIFIA Supplemental Indentures and WIFIA Bonds (including payments) have been fulfilled and any required audits have been performed and (B ) any litigation relating to the Projects, the WIFIA Loans, this Agreement or any WIFIA Loan Document is fina lly resolved or, if the WIFIA Lender has reasonable cause to extend such date, a date to be mutually agreed upon by the WIFIA Lender and the Borrower.
The Borrower shall provide to the WIFIA Lender in a timely manner all records and documentation relating to the Master Program and the WIFIA Loans that the WIFIA Lender may reasonably request from time to time.
(iv) The Borrower shall have a single or program -specific audit conducted in accordance with 2 C.F.R. Part 200 Subpart F and 31 U.S.C. § 7502 in 2020 and annually thereafter, except to the extent biennial audits are permitted for the Borrower pursuant to 2 C.F.R. § 200.504 and 31 U.S.C. § 7502(b). Upon reasonable notice, the Borrower shall cooperate fully in the conduct of any periodic or compliance audits conducted by the WIFIA Lender, or designees thereof, pursuant to 40 C.F.R. Part 35, 31 U.S.C. § 7503(b), or 31 U.S.C. § 6503(h) and shall provide full access to any books, documents, papers or other records that are pertinent to the Project or the WIFIA Loans, to the Administrator, or the designee thereof, for any such project or programmatic audit.
Section 22. Sy
stem Financial Planning and Reporting.
(a) Financial Plan . On an annual basis until each Final Maturity Date , t he Borrower shall provide to the WIFIA Lender its then -current ten ( 10)-year f inancial plan not later than ninety (90) days after its adoption by the Borrower and, in any event, prior to June 30 of each Borrower Fiscal Year, commencing with Borrower Fiscal Year 2023. Each Financial Plan provided to the WIFIA Lender pursuant to this Section 22(a) ( System Financial Planning and Reporting – Financial Plan) shall be substantially in the form, or provide substantially the same information, as the ten ( 10)-year financial plan for the System delivered to the WI FIA
60 3734007.10 046357 CTR
Lender pursuant to Section 12(a)(xvii ) ( Conditions Precedent – Conditions Precedent to Effectiveness). In addition, the Borrower shall comply with the following:
(i) Each Financial Plan shall (A) set forth the Borrower’s capital improvement plan, projected rates and charges, projected debt outstanding, annual debt service and projected operations and maintenance expenses; (B) evidence projected compliance with the Rate Covenant for each Borrower Fiscal Year covered by the Financial Plan ; (C) demonstrate to the satisfaction of the WIFIA Lender that the Borrower has developed and identified adequate revenues to implement a plan for operating, maintaining and repairing the System over the useful life of the System assets ; and (D) be based upon assumptions that as of its date are accurate and reasonable to the best of the Borrower’s knowledge and belief.
(ii) Each Financial Plan delivered prior to a Project’s Substantial Completion Date shall show that the Borrower has sufficient financial resources to complete such Project by its Projected Substantial Completion Date. (iii) With each Financial Plan the Borrower shall provide a written narrative identifying any material changes to the underlying assumptions from the previous Financial Plan.
(b) Financial Statements.
(i) The Borrower shall furnish to the WIFIA Lender a s soon as available, but no later than one hundred eighty (180) days after the end of each Borrower Fiscal Year, a copy of the audited income statement and balance sheet of the Borrower as of the end of such Borrower F iscal Year and the related audited statements of operations and of cash flow of the Borrower for such Borrower Fiscal Y ear, setting forth in each case in comparative form the figures for the previous Borrower Fiscal Year, certified without qualification or exception, or qualification as to the scope of the audit, by an independent public accounting firm selected by the Borrower and which is reasonably acceptable to the WIFIA Lender; provided, that the failure of the Borrower to furnish the documents required by this Section 22(b) (i) within such one hundred eighty (180) -day period shall not constitute a System Event of Default or a Project Event of Default so long as the Borrower furnishes such documents within sixty (60) days after the end of such one hundred eighty (180)-day period.
1 (ii) All such financial statements shall be complete and correct in all material respects and shall be prepared in reasonable detail and in accordance with GAAP applied consistently throughout the periods reflected therein (except, w ith respect to the annual financial statements, for changes approved or required by the independent public accountants certifying such statements and disclosed therein).
1 Note to Borrower: Please confirm if SFPUC also intends to request an amendment to each of the prior WIFIA Loan Agreements to conform with the financial documentation submittal timelines set forth in Section 22(b)(i).
61 3734007.10 046357 CTR
Section 23. Pr oject Oversight and Monitoring.
(a) Project Development, Design and Construction. The WIFIA Lender shall have the right in its sole discretion to monitor (or direct its agents to monitor) the development, including environmental compliance, design, and construction of each Project. The Borrower shall be responsible for administering construction oversight of each Project in accordance with applicable federal, state and local governmental requirements. The Borrower agrees to cooperate in good faith with the WIFIA Lender in the conduct of such monitoring by promptly providing the WIFIA Lender with such reports, documentation or other information as shall be requested by the WIFIA Lender or its agents, including any independent engineer reports, documentation or information.
(b) Construction Monitoring Report. Wi
th respect to each Project, dur ing the
period beginning from the first quarter following bid advertisement of the first Principal Project Contract for such Project , through and until Substantial Completion of such Project, the Borrower shall furnish to the WIFIA Lender, on a quarterly basis, the Construction Monitoring Report. The report shall be delivered to the WIFIA Lender not later than one hundred eighty (180) days after the end of each such quarter (or if such day is not a Business Day, on the next following Business Day). If the then-current projection for the Substantial Completion Date of a Project is a date different than the applicable Projected Substantial Completion Date , the Borrower shall provide in the Construction Monitoring Report a description in reasonable detail to the reasonable satisfaction of the WIFIA Lender of the reasons for such projected delay or difference. The Projected Substantial Completion Date of the applicable Project shall automatically be adjusted to the new date specified by the Borrower in the Const ruction Monitoring Report unless the WIFIA Lender objects to the adjustment in writing to the Borrower within sixty (60) days following receipt of such Construction Monitoring Report on the basis that such report does not demonstrate the matters specified in this paragraph. (c) Quarterly Certification of Eligible Project Costs . If requested by the
WIFIA Lender, on a basis not more frequently than quarterly, the Borrower shall submit to the WIFIA Lender, concurrently with the delivery of the Construction Monitoring Report, a certificate, in the form of Exhibit D ( Form of Certification of Eligible Project Costs Documentation), signed by the Borrower’s Authorized Representative, and attaching Eligible Project Costs Documentation as applicable. I f there are no appli cable Eligible Project Costs for such quarter, the Borrower may notify the WIFIA Lender by written confirmation of the same by email in accordance with Section 3 8 ( Notices; Payment Instructions ). Within sixty (60) days following the receipt of such certificate and accompanying Eligible Project Costs Documentation (if applicable), the WIFIA Lender shall notify the Borrower confirming (i) which Eligible Project Costs incurred by the Borrower set forth in the certification have been approved or denied (and, if denied, the reasons therefor) and (ii) the cumulative amount of Eligible Project Costs that have been approved as of the date of such notice. Any such approved amounts of Eligible Project Costs shall then be deemed to be available for Disbursement at such time as the Borrower submits a Requisition in respect of such approved amounts in accordance with Section 4 (Disbursement Conditions).
(d) Final Specifications. I
f not previously provided to the WIFIA Lender, t he
Borrower shall deliver to the WIFIA Lender, pr ior to bid advertisement for each Project
62 3734007.10 046357 CTR
(including each sub- project or component, if applicable), a copy of the final specifications relating to the development and construction of such Project (or such sub- project or component, as the case may be), demonstrating compliance with all applicable federal requirements and including a summary of the scope of work thereunder.
(e) Public Benefits Report . With respect to each Project, the Borrower shall deliver to the WIFIA Lender the Public Benefits Report (i) prio r to the corresponding WIFIA Loan Agreement Effective Date, (ii) within ninety (90) days following the Substantial Completion Date of the Project and (iii) within ninety (90) days following the fifth (5th) anniversary of the Substantial Completion Date of the Project. The Borrower agrees that information described in the Public Benefits Report may be made publicly available by the WIFIA Lender at its discretion.
(f) Requested Information. The Borrower shall, at any time while the WIFIA Loans remain outstanding, promptly deliver to the WIFIA Lender such additional information regarding the business, financial, legal or organizational affairs of the Borrower or regarding the Master Program and the Projects (including construction progress reports delivered by a Principal Project Party to the Borrower) or the System Revenues (including any rate studies prepared by or for the Borrower) as the WIFIA Lender may from time to time reasonably request.
(g) Project Operations . The
WIFIA Lender shall have the right, acting
reasonably, to monitor (or direct its agents to monitor) each Project’s operations and, as the WIFIA Lender may request from time to time, to receive reporting on the operation and management of each Project, and copies of any contracts relating to the operat ion and maintenance of each Project. The Borrower agrees to cooperate in good faith with the WIFIA Lender in the conduct of such monitoring by promptly providing the WIFIA Lender with such reports, documentation, or other information requested by the WIFIA Lender. The WIFIA Lender has the right, in its sole discretion, to retain such consultants or advisors, to carry out the provisions of this Section 23 (Project Oversight and Monitoring).
ARTICLE VII
MI
SCELLANEOUS
Section 24. Di sclaimer of Warranty.
The WIFIA Lender makes no warranty or representation, either express or implied, as to the value, design, condition, merchantability or fitness for a particular purpose or fitness for use of any Project or any portion thereof or any other warranty with respect thereto.
Without limiting anything under Section 17 ( Indemnification), i n no event shall the WIFIA Lender be liable for any damages (whether direct or indirect), incidental to or arising out of any Project or the financing, existence, furnishing, functioning or use of any Project.
63 3734007.10 046357 CTR
Section 25. No P ersonal Recourse.
No official, employee or agent of the WIFIA Lender or the Borrower (including any commission member of the Borrower) or any Person executing this Agreement or any of the other WIFIA Loan Documents shall be personally liable on this Agreement or such other WIFIA Loan Documents by reason of the issuance, delivery or execution hereof or thereof.
Section 26. No T hird Party Rights.
The parties hereby agree that this Agreement creates no third party rights against the Borrower, the Government, or the WIFIA Lender, solely by virtue of the WIFIA Loan, and the Borrower agrees to indemnify and hold the WIFIA Lender, the Servicer (if any), the Administrator, and the Government harmless, to the extent permitted by law and in accordance with Section 17 ( Indemnification), from any lawsuit or claim arising in law or equity solely by reason of any WIFIA Loan, and that no third party creditor or creditors of the Borrower shall have any right against the WIFIA Lender with respect to any WIFIA Loan made pursuant to this Agreement.
Section 27. Bo rrower’s Authorized Representative.
The Borrower shall at all times have appointed a Borrower ’s Authorized Representative by designating such Person or Persons from time to time to act on the Borrower ’s behalf pursuant to a written certificate furnished to the WIFIA Lender and the Servicer, if any, containing the specimen signature or signatures of such Person or Persons and signed by the Borrower.
Section 28. WIF IA Lender’s Authorized Representative.
The WIFIA Lender hereby appoints the Director of the WIFIA Program, whose notice details are set forth below in Section 38 ( Notices) to serve as the WIFIA Lender’s Authorized Representative under this Agreement until such time as a successor or successors shall have been appointed. Thereaf ter, the successor in office shall serve as the WIFIA Lender’s Authorized Representative. The WIFIA Lender shall provide notice to the Borrower within a reasonable time period following the succession.
Section 29. Ser
vicer.
The WIFIA Lender may from time to time designate another entity or entities to perform, or assist the WIFIA Lender in performing, the duties of the Servicer or specified duties of the WIFIA Lender under this Agreement and the WIFIA Loan Agreements and the WIFIA Bonds. The WIFIA Lender shall give the Borrower written notice of the appointment of any successor or additional Servicer and shall enumerate the duties or any change in duties to be performed by any Servicer. Any references in this Agreement to the WIFIA Lender shall be deemed to be a reference to the Servicer with respect to any duties which the WIFIA Lender shall have delegated to such Servicer. The WIFIA Lender may at any time assume the duties of any Servicer under this Agreement and the WIFIA Loan Agreements and the WIFIA Bonds.
The Borrower shall cooperate and respond to any reasonable request of the Servicer for
64 3734007.10 046357 CTR
information, documentation or other items reasonably necessary for the performance by the Servicer of its duties hereunder.
Section 30. Fees and Expenses.
(a) The Borrower shall pay to the WIFIA Lender for each WIFIA Loan:
(i) a servicing set-up fee equal to the amount specified in clause (a) of Section 11 ( Fees and Expenses ) of the applicable WIFIA Loan Agreement (the “Servicing Set-Up Fee”), which shall be due and payable within thirty (30) days after receipt of an invoice from the WIFIA Lender with respect thereto (or, if earlier, the Initial Disbursement Date of the related WIFIA Loan);
(ii) an annual construction period servicing fee equal to the amount specified in clause (b) of Section 11 ( Fees and Expenses) of the applicable WIFIA Loan Agreement (the “Construction Period Servicing Fee”), which shall accrue on the first Business Day of the then -current Federal Fiscal Year and shall be due and payable on or prior to each November 15 during the Construction Period under the applicable WIFIA Loan Agreement (including the Federal Fiscal Year during which the applicable Substantial Completion Date occurs); provided that the initial Construction Period Servicing Fee shall be due and payable within thirty (30) days after receipt of an invoice from the WIFIA Lender with respect thereto (or, if earlier, the Initial Disbursement Date of the related WIFIA Loan), in an amount pro- rated from the applicable WIFIA Loan Agreement Effective Date through the last day of the then-applicable Federal Fiscal Year; and
(iii) an annual operating period servicing fee equal to the amount specified in clause (c) of Section 11 ( Fees and Expenses) of the applicable WIFIA Loan Agreement (the “Operating Period Servicing Fee”), wh ich shall accrue on the first Business Day of the then -current Federal Fiscal Year and shall be due and payable on or prior to each November 15, beginning with the first November 15 following the end of the Federal Fiscal Year during which the applicable Substantial Completion Date occurs until (and including) the applicable Final Maturity Date; provided that any Operating Period Servicing Fee due and payable with respect to any Federal Fiscal Year during which such Final Maturity Date occurs shall be equal to the pro- rata monthly portion of the then applicable Operating Period Servicing Fee multiplied by the number of partial or whole months remaining between October 1 and such Final Maturity Date. (b) The amount of each Construction Period Servicing Fee (other than the initial Construction Period Servicing Fee) and each Operating Period Servicing Fee shall be adjusted in proportion to the percentage change in CPI for the calendar year immediately preceding the calendar year during which such fee is due. The WI FIA Lender shall notify the Borrower of the amount of each such fee at least thirty (30) days before payment is due, which determination shall be conclusive absent manifest error. (c) Reimbursement of
Expense s. The Borrower agrees, whether or not the
transactions hereby contemplated shall be consummated, to reimburse the WIFIA Lender on
65 3734007.10 046357 CTR
demand from time to time , within thirty (30) days after receipt of any invoi ce from the WIFIA Lender, for any and all fees, costs, charges, and expenses incurred by it (including the fees, costs, and expenses of its legal counsel, financial advisors, auditors and other consultants and advisors) in connection with the negotiation, preparation, execution, delivery, and performance of this Agreement and the other WIFIA Loan Documen ts and the transactions hereby and thereby contemplated, including attorneys’, and engineers’ fees and professional costs, including all such fees, costs, and expenses incurred as a result of or in connection with:
(i) the review of each WIFIA Loan Request and the negotiation, preparation, execution, delivery, and performance of each Project Term Sheet, WIFIA Loan Agreement, and the other WIFIA Loan Documents related to the relevant Project; (ii) the enforcement of or attempt to enforce any provision of this Agreement or any of the other WIFIA Loan Documents;
(iii) any amendment, modification, or requested amendment or modification of, waiver, consent, or requested waiver or consent under or with respect to, or the protection or preservation of any right or claim under, this Agreement, any other Related Document , or to the Net System Revenues, or advice in connection with the administration, preservation in full force and effect , and enforcement of this Agreement or any other Related Document or the rights of the WIFIA Lender thereunder; and (iv) any work -out, restructuring, or similar arrangement of the obligations of the Borrower under this Agreement or the other WIFIA Loan Documents, including during the pendency of one or more System Events of Default or Project Events of Default.
The obligations of the Borrower under this Section 30 ( Fees and Expenses ) shall survive the payment or prepayment in full or transfer of any WIFIA Bond, the enforcement of any provision of this Agreement or the other WIFIA Loan Documents, any such amendments, waivers or consents, any System Event of Default or Project Event of Default, and any such workout, restructuring, or similar arrangement.
Section 31. Am
endments and Waivers.
No amendment, modification, termination, or waiver of any provision of this Agreement, the WIFIA Loan Agreements or the corresponding WIFIA Bonds shall in any event be effective without the written consent of each of the parties hereto.
Section 32. Gove rning Law.
This Agreement and the WIFIA Loan Agreements shall be governed by the federal laws of the United States of America if and to the extent such federal laws are applicable and the internal laws of the State, if and to the extent such federal laws are not applicable.
66 3734007.10 046357 CTR
Section 33. Se verability.
In case any provision in or obligation under this Agreem ent shall be invalid, illegal, or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby.
Section 34. Suc cessors and Assigns.
This Agreement shall be binding upon the parties hereto and their respective permitted successors and assigns and shall inure to the benefit of the parties hereto and their permitted successors and assigns. Neithe r the Borrower’ s rights or obligations under this Agreement, the WIFIA Loan Agreements or the corresponding WIFIA Bonds nor any interest herein or therein may be assigned or delegated by the Borrower without the prior written consent of the WIFIA Lender.
Section 35. Re
medies Not Exclusive.
No remedy conferred herein or reserved to the WIFIA Lender under this Agreement, the WIFIA Loan Agreements or the corresponding WIFIA Bonds is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or thereunder or now or hereafter existing at law or in equity or by statute.
Section 36. De
lay or Omission Not Waiver.
No delay or omission of the WIFIA Lender to exerci se any right or remedy provided under this Agreement, the WIFIA Loan Agreements or the corresponding WIFIA Bonds upon a default of the Borrower (except a delay or omission pursuant to a written waiver) shall impair any such right or remedy or constitute a waiver of any such default or acquiescence herein or therein. Every right and remedy given by this Agreement, the WIFIA Loan Agreements or the corresponding WIFIA Bonds or by law to the WIFIA Lender may be exercised from time to time, and as often as may be deemed expedient by the WIFIA Lender.
Section 37. Count
erparts.
This Agreement and any amendments, waivers, consents or supplements hereto or in connection herewith may be executed in any number of counterparts and by the different parties hereto in separate cou nterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute one and the same instrument; signature pages may be detached from multiple separate counterparts and attached to a sing le counterpart so that all signature pages are physically attached to the same document.
Electronic delivery of an executed counterpart of a signature page of this Agreement or of any document or instrument delivered in connection herewith in accordance w ith Section 38 (Notices; Payment Instructions) shall be effective as delivery of an original executed counterpart of this Agreement or such other document or instrument, as applicable.
67 3734007.10 046357 CTR
Section 38. No tices; Payment Instructions.
Notices hereunder shall be (a) in wri ting, (b) effective as provided below and (c) given by (i) nationally recognized courier service, (ii) hand delivery, or (iii) email, in each case to:
If to WIFIA Lender: United States Environmental Protection Agency WJC-E 7334A
1200 Pennsylvania Avenue NW
Washington, DC 20460
Attention: WIFIA Director
Email: [email protected]
If to Borrower2: Public Utilities Commission of the City and County of San Francisco
525 Golden Gate Avenue
San Francisco, California 94102
Attention: [________]
Email: [_________]
If to the Trustee U.S. Bank Trust Company, National
Association
Global Corporate Trust and Escrow Services
One California Street, Suite 1000
San Francisco, CA 94111
Attention: Andrew Fung
Email: [email protected]
Unless otherwise instructed by the WIFIA Lender’s Authorized Representative, all notices to the WIFIA Lender should be made by email to the email address noted above for the WIFIA Lender.
Notices required to be provided herein shall be provided to such different address es or to such further parties as may be designated from time to time by a Borrower ’s Authorized Representative, with respect to notices to the Borrower , or by the WIFIA Lender’s Authorized Representative, with respect to notices to the WIFIA Lender or the Servicer. The Borrower shall make any payments hereunder or under the WIFIA Bond in accordance with Section 9(e ) (Payment of Principal and Interest – Manner of Payment) and the payment instructions hereafter provided by the WIFIA Lender’s Authorized Repre sentative, as modified from time to time by the WIFIA Lender . Each such notice, request or communication shall be effective (x) if delivered by hand or by nationally recognized courier service, when delivered at the address specified in this Section 38 ( Notices; Payment Instructions ) (or in accordance with the latest unrevoked written direction from the receiving party) and (y) if given by email, when such email is delivered to the address specified in this Section 38 ( Notices; Payment Instructions ) (or in
2 Note to Borrower: Please provide contact details.
68 3734007.10 046357 CTR
accordance with the latest unrevoked written direction from the receiving party) ; provi ded, that notices received on a day that is not a Business Day or after 5:00 p.m. Eastern Time on a Business Day will be deemed to be effective on the next Business Day.
Section 39. Eff ectiveness.
This Agreement shall be effective on the Effective Date.
Section 40. Sur vival.
The indemnification requirements of Section 17 ( Indemnification), the reporting and record keeping requirements of Section 21 ( Accounting and Audit Procedures; Inspec tions; Reports and Records ) and the payment requirements of Section 30 ( Fees and Expenses ) shall survive the termination of this Agreement as provided in such Sections.
Section 41. In tegration.
This Agreement constitutes the entire contract between the parties relating to the subject matter hereof and supersedes any and all previous agreements and understandings, oral or written, relating to the subject matter hereof.
[Signature Page to SFPUC Wastewater Capital Plan Resilience Program – WIFIA Master Agreement] 3734007.10 046357 CTR
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and deliver ed by their respective officers thereunto duly authorized as of the date first written above.
PUBLIC UTILITES COMMISSION OF
THE CITY AND COUNTY OF SAN
FRANCISCO
By: ______________________________
Name:
Title:
[Signature Page to SFPUC Wastewater Capital Plan Resilience Program – WIFIA Master Agreement] 3734007.10 046357 CTR
UNITED STATES ENVIRONMENTAL
PROTECTION AGENCY, acting by and
through the Administrator of the
Environmental Protection Agency
By: ______________________________
Name: Michael S. Regan
Title: Administrator
Schedule I-1
3734007.10 046357 CTR
SCHEDULE I
MASTER PROGRAM
The Master Program is the SFPUC Wastewater Capital Plan Resilience Program, located in San Francisco, California, which consists of projects that are designed to repair, rehabilitate, and replace critical assets that have a significant risk of failure, and to upgrade the system to enhance reliability, resiliency, and sustainability. The Master Program includes the following categories:
1. Green infrastructure project components that will capture and clean stormwate r throughout the Borrower’s system;
2. Stormwater improvements in areas of the City that are currently prone to flooding;
3. Shoreline management and protection plan to provide a long- term protect ion of wastewater assets;
4. New wastewater treatment plant that will provide reliable service for the Treasure Island residents and meet the recycled water demands of the future redevelopment on the island;
5. Treatment facility projects that will address aging infrastructure, outdated technologies, and address long-term regulatory compliance by ensuring continued performance;
6. Pump station upgrades to ensure efficient and reliable transport of combined flows to the Borrower’s treatment facilities;
7. Rehabilitation of Combined Sewer Discharge structures for emergency discharge relief; and
8. Effluent outfall pipe replacement to reliably transport effluent.
Schedule II-1
3734007.10 046357 CTR
SCHEDULE II
EXISTING INDEBTEDNESS3
A. Existing Parity Obligations (other than Parity State Loans)
Title Original Debt Amount Final Maturity Date
2010 Revenue Bonds, Series A $47,050,000 10/01/2021
2010 Revenue Bonds, Series B $192,515,000 10/01/2040
2013 Revenue Bonds, Series A $193,400,000 10/01/2025
2013 Revenue Bonds, Series B $331,585,000 10/01/2042
2016 Revenue Bonds, Series A $240,580,000 10/01/2046
2016 Revenue Bonds, Series B $67,820,000 10/01/2046
2018 Revenue Bonds, Series A $229,050,000 10/01/2043
2018 Revenue Bonds, Series B $185,950,000 10/01/2043
2018 Revenue Bonds, Series C $179,145,000 10/01/2043
WIFIA Loan N17128CA $699,242,023 04/01/2059
B. Parity State Loans
Title Original Debt Amount Final Maturity Date
State Water Board CWSRF 8372-110 $132,000,000 05/01/2056 State Water Board CWSRF 8371-110 $54,387,969 08/22/2051 State Water Board CWSRF 8064-110 $7,435,000 07/31/2050 State Water Board CWSRF 8088-110 $40,006,740 07/18/2049 State Water Board CWSRF 8129-110 $20,199,435 02/28/2048 State Water Board CWSRF 8132-110 $34,445,778 03/30/2048
C. Existing Subordinated Obligations
Title Original Debt Amount Final Maturity Date
Commercial Paper Subseries
A-1, A-2, A-4, A-6 & A-7
$675,000,000 10/13/2023
Revolving Credit Agreement, Series R-1 $75,000,000 07/25/2020 2009 Certificates of Participation, Series C $38,120,000 11/01/2022 2009 Certificates of Participation, Series D $129,550,000 11/01/2041
3 Note to Borrower: Borrower to update.
Schedule III-1
3734007.10 046357 CTR
SCHEDULE III
REQUISITION PROCEDURES
This Schedule III sets out the procedures which the Borrower agrees to follow in submitting Requisitions for any Disbursement of any WIFIA Loan . The Borrower expressly agrees to the terms hereof, and further agrees that (i) the rights of the WIFIA Lender contained herein are in addition to (and not in lieu of) any other rights or remedies available to the WIFIA Lender under the WIFIA Loan Documents , and (ii) nothing contained herein shall be construed to limit the rights of the WIFIA Lender to take actions including administrative enforcement action and actions for breach of contract against the Borrower if it fails to carry out its obligations under this Agreement or the applicable WIFIA Loan Agreement during the term thereof.
PART A. Gen
eral Requirements.
(a) Manner of Request : All requests by the Borrower fo r a Disbursement shall be made in writing by electronic submission to the WIFIA Lender, in accordance with Section 38 (Notices; Payment Instructions) of the WIFIA Master Agreement. (b) Required Documentation: Any r equest by the Borrower should include the submission of:
(i) a Requisition, in the form attached as Exhibit B ( Form of Requisition) , completed and executed by the Borrower’s Authorized Representative, and otherwise in form and substance satisfactory to the WIFIA Lender; and
(ii) all Eligible Pr oject Costs Documentation that has not otherwise been provided to the WIFIA Lender in accordance with Section 23(c) ( Project Oversight and Monitoring – Quarterly Certification of Eligible Project Costs) of this Agreement. (c) Timing: A
ny request for a Disbursement must be received by the WIFIA Lender and the Servicer (if any) at or before 5:00 P.M. (Eastern Time) on either:
(i) th e first (1 st) Business D ay of a calendar month in order to obtain the requested Disbursement by the fifteenth (15th) day of such calendar month; (ii) the fifteenth (15 th) day of a calendar month, in order to obtain the requested Disbursement by the first (1st) day of the immediately following calendar month; provided, that, (x) if any such day is not a Business Day, the Disbursem ent request or payment (as the case may be) shall be made by the next succeeding Business Day; (y) the Borrower shall not request to receive more than one (1) Disbursement per month or every thirty (30) days (whichever is longer); and (z) no Disbursements shall be made after the Final Disbursement Date.
Schedule III-2
3734007.10 046357 CTR
PART B. WI FIA Lender Review Process.
(a) The WIFIA Lender shall review the Requisition and the Eligible Project Costs Documentation for compliance with WIFIA Disbursement requirements. (b) If a Requisition is approved by the WIFIA Lender, the WIFIA Lender will notify the Borrower of such approval and of the amount so approved. A Requisition containing an apparent mathematical error will be corrected by the WIFIA Lender, after telephonic or email notification to the Borrower, and will thereafter be treated as if submitted in the corrected amount. If the amount requested for Disbursement in the Requisition exceeds the available balance of the WIFIA Loan proceeds remaining to be disbursed, the Disbursement r equest will be treated as if submitted in the amount of the balance so remaining, and the WIFIA Lender will so notify the Borrower.
(c) The W IFIA Lender shall be entitled to withhold approval (in whole or in part) of any pending or subsequent requests for the Disbursement of WIFIA Loan proceeds if: (i) a System Event of Default or a Project Event of Default shall have occurred and be continuing or (ii) the Borrower (1) knowingly takes any action, or omits to take any action, amounting to fraud or violation of any applicable law, in connection with the transactions contemplated hereby; (2) prevents or materially impairs the ability of the WIFIA Lender to monitor compliance by the Borrower with applicable law pertaining to the applicable Project or with the te rms and conditions of the WIFIA Master Agreement or the applicable WIFIA Loan Agreement; (3) fails to observe or comply with any applicable law, or any term or condition of the WIFIA Master Agreement or the applicable WIFIA Loan Agreement; (4) fails to sat isfy the conditions set forth in Section 4 ( Disbursement Conditions ) and Section 12(c ) (Conditions Precedent to All Disbursements) of the WIFIA Master Agreement; or (5) fails to deliver Eligible Project Costs Documentation satisfactory to the WIFIA Lender at the times and in the manner specified by the WIFIA Master Agreement; provided, that in such case of sub- clause (5) above, the WIFIA Lender may, in its sole discretion, partially approve a Requisition in respect of any amounts for which adequate Eligible Project Costs Documentation has been provided and may, in its sole discretion, disburse in respect of such properly documented amounts. The WIFIA Lender will notify the Borrower of any withholding, and the reasons therefor. (d) A Requisition may be rejected
in whole or in part by the WIFIA Lender if it is: (i)
submitted without signature; (ii) submitted under signature of a Person other than a Borrower ’s Authorized Representative; (iii) submitted after prior Disbursement of all proceeds of the WIFIA Loan; or (iv) submitted without adequate Eligible Project Costs Documentation. The WIFIA Lender will notify the Borrower of any Requisition so rejected, and the reasons therefor. Any Requisition rejected fo r the reasons specified under this paragraph (d) must be resubmitted in proper form in order to be considered for approval.
Schedule 15(k)-1
3734007.10 046357 CTR
SCHEDULE 15(k)
RATE COVENANT
Section 6.13 of the Indenture, as in effect as of the Effective Date, is set forth below.
All capitalized terms used below in this Schedule 15(k) have the meanings assigned to such terms in the Indenture. All section references made below in this Schedule 15(k) refer to sections in the Indenture.
SECTION 6.13. Amounts of Rates and Charges . (
a) To the fullest extent permitted by
law, the Commission shall establish, fix and prescribe, prior to the commencement of each Fiscal Year, rates, fees and charges in connection with the sanitary waste and storm water collection, treatment and disposal services and facilities furnished by the Enterprise so as to yield Revenues at least sufficient, after making reasonable allowances for contingencies and error in the estimates to pay the following amounts:
(i)
The interest on and principal of the Bonds as they become due and payable (but not including any interest moneys for the payment of which have been deposited in the Interest Fund from the proceeds of any Series of Bonds or from any other source).
(ii) All other payments required for compliance with the terms of this Indenture and of any Supplemental Indenture providing for the issuance of additional Series of Bonds pursuant to Article III.
(iii) All other payments to meet any other obligations of the Commission which are charges, liens or encumbrances upon, or payable from, the Revenues.
(iv) All current Operation and Maintenance Costs of the Enterprise (but not including such Operation and Maintenance Costs as are scheduled to be paid by the Commission from moneys other than Revenues, such moneys to be clearly available for such purpose).
(b) In addition to the requirements in subsection (a), to the fullest extent permitted by law, the Commission shall establish, fix and prescribe, prior to the commencement of each Fiscal Year, rates, fees and charges in connection with the sanitary waste and storm water collection, treatment and disposal services and facilities furnished by the Enterprise, which are reasonably expected to be at least sufficient to yield during such Fiscal Year Net Revenues (together with any fund balances of the Commission, which are available for Debt Service, but excluding the Bond Reserve Fund) equal to 1.25 times Annual Debt Service payable in such Fiscal Year.
(c) The Commission may make adjustments from time to time in such rates, fees and charges and may make such classification t hereof as it deems necessary, but shall not reduce such rates, fees and charges below those then in effect unless the Revenues resulting after such
Schedule 15(k)-2
3734007.10 046357 CTR
reduced rates are put into effect will at all times be sufficient to meet the requirements of this Section.
(d) So long as the Commission has complied with its obligations set forth in clause (a) and clause (b) of this Section 6.13, the failure to yield the amount of Revenues as set forth in clause (a) of this Section 6.13, or the failure of Net Revenues to equal 1.25 times Annual Debt Service as set forth in clause (b) of this Section 6.13 at the end of a Fiscal Year, shall not constitute a default or an Event of Default hereunder so long as the Commission has complied with clause (a) and clause (b) of this Section 6.13 at the commencement of the succeeding Fiscal Year.
Schedule 16(a)-1
3734007.10 046357 CTR
SCHEDULE 16(a)
ADDITIONAL BONDS TEST
The applicable provisions of the Indenture for the issuance of Additional Parity Obligations, as in effect as of the Effective Date, are set forth below.
All capitalized terms used below in this Schedule 16(a) have the meanings assigned to such terms in the Indenture. All section references made below in this Schedule 16(a) refer to sections in the Indenture.
SECTION 3.05. Issuance of Additional Bonds. In addition to the 2003 Refunding Series A Bonds, the Commission may, subject to the requirements of the Law, by Supplemental Indenture establish one or more other Series of Bonds payable from Net Revenues on a parity with the 2003 Refunding Series A Bonds and secured by a lien upon and pledge of Net Revenues equal to the lien and pledge securing the 2003 Refunding Series A Bonds, and the Commission may issue and the Trustee may authenticate and deliver Bonds of any Series so established, in such principal amount and for such lawful purpose or purposes (including refunding of any Bonds issued hereunder and then Outstanding) as shall be determined by the Commission in said Supplemental Indenture, but only upon compliance by the Commission with the provisions of Section 3.07, and subject to the following specific conditions, which are hereby made conditions precedent to the issuance of any such additional Series of Bonds:
(a)
No Event of Default shall have occurred and be continuing under this Indenture or any Supplemental Indenture 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 the Indenture or any Supplemental Indenture.
(b) The Supplemental Indenture providing for the issuance of such additional Series of Bonds shall require that the amount on deposit in the Bond Reserve Fund to be established pursuant to Section 5.02 be increased, if and to the extent necessary, immediately upon the receipt of the proceeds of the sal e of such additional Series of Bonds, to an amount equal to the Required Reserve. This deposit may be made from such proceeds or any other source, as provided in the Supplemental Indenture.
(c) The Supplemental Indenture providing for the issuance of such additional Series of Bonds shall provide for the payment of interest and principal as follows:
(i) Principal on such Additional Bonds shall be payable either semiannually on April 1 and October 1 of each year in which principal falls due or annually on October 1 of each year in which principal falls due, and Term Bonds of any Series shall have a principal maturity date of October 1. Interest on such Additional Bonds that are Current Interest Bonds shall be payable semiannually on April 1 and October 1 of each year excepting the first year, provided that the first installment of interest shall be payable on
Schedule 16(a)-2
3734007.10 046357 CTR
either April 1 or October 1 and shall be for a period of not longer than twelve months and that the interest shall be payable thereafter semiannually on April 1 and October 1.
(ii) Notwithstanding subsection (i), the Supplemental Indenture authorizing the issuance of such Additional Bonds may provide for the payment of principal and interest on dates other than those specified in subsection (i) if the Supplemental Indenture provides for the monthly payment of a portion of interest and principal becoming due and payable on the succeeding Interest Payment Date and Principal Payment Date, as applicable, as set forth in detail in the Supplemental Indenture.
(iii) Interest on any Bonds constituting Variable Rate Indebtedness or Tender Indebtedness may be payable on such Payment Dates as shall be specified in the Supplemental Indenture.
(d) Fixed serial maturities or mandatory Minimum Sinking Fund Account Payments, or any combination thereof, shall be established in amounts sufficient to provide for the retirement of all of the Bonds of such additional Series on or before their respective maturity dates; provided, however, that such requirement shall not apply to Balloon Indebtedness or principal amounts of such Series of Bonds which the Commission has specified as Excluded Principal.
(e) The aggregate principal amount of Bonds issued hereunder shall not exceed any limitation imposed by law or by any Supplemental Indenture.
(f) After the sale of the Series of Additional Bonds proposed to be issued (but prior to the issuance and delivery thereof and receipt of payment therefor), the Commission shall file the following documents with the Trustee; these documents shall, with respect to such Series of Additional Bonds, be based upon the actual interest rate or rates determined at the time of sale thereof (except that, with respect to Variable Rate Indebtedness, the interest rate for the Series of Additional Bonds shall be calculated in accordance with the provisions of subsection (b) of the definition of Annual Debt Service).
(i) A Certificate of the Commission setting forth for each of the next three Fiscal Years estimates of (A) Revenues, (B) Operation and Maintenance Costs of the Enterprise and (3) Net Revenues.
(ii) A Certificate of the Commission demonstrating that (1) the ratio of (A) Net Revenues for the most recent Fiscal Year for which audited financial statements are available, or any consecutive twelve calendar month period during the eighteen calendar month period prior to the issuance of such additional Series of Bonds, to (B) Annual Debt Service for the current Fiscal Year, calculated as of the date of sale of, and including such additional Series of Bonds, will not be less than 1.25:1; or (2) the ratio of (A) Net Revenues projected by the Commission for each of the next three Fiscal Years as determined in Section 3.05(f)(i) above, and including in such projections amounts projected to be receive d from any adopted rate increases and fund balances of the
Schedule 16(a)-3
3734007.10 046357 CTR
Commission which are projected to be available for the payment of Debt Service (but excluding the Bond Reserve Fund), to (B) Annual Debt Service in each of such three Fiscal Years, calculated as of the date of sale of and including such additional Series of Bonds, will not be less than 1.25:1 in each of such Fiscal Years
SECTION 3.06. Issuance of Additional Bonds for Refunding. In addition to the 2003 Refunding Series A Bonds, the Commission may, subject to the requirements of the Law, by Supplemental Indenture establish one or more other Series of Bonds payable from Net Revenues on a parity with the 2003 Refunding Series A Bonds and secured by a lien upon and pledge of Net Revenues equal to the l ien and pledge securing the 2003 Refunding Series A Bonds, and the Commission may issue, and the Trustee may authenticate and deliver, Bonds of any Series so established, for the purpose of refunding any Bonds issued hereunder and then Outstanding, but only upon compliance by the Commission with the provisions of Section 3.07, and subject to the following specific conditions, which are hereby made conditions precedent to the issuance of any such additional Series of Bonds:
(a)
No Event of Default shall have occurred and be continuing under this Indenture or any Supplemental Indenture 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 the Indenture or any Supplemental Indenture.
(b) The Supplemental Indenture providing for the issuance of such additional Series of Bonds shall require that the amounts on deposit in the Bond Reserve Fund to be established pursuant to Section 5.02 be increased, if necessary, upon the receipt of the proceeds of the sale of such additional Series of Bonds to an amount equal to the Required Reserve. This deposit may be made from such proceeds or any other source, as provided in the Supplemental Indenture.
(c) The Supplemental Indenture providing for the issuance of such additional Series of Bonds shall provide for the payment of interest and principal as follows:
(i) Principal on such Additional Bonds shall be payable either semiannually on April 1 and October 1 of each year in which principal falls due or annually on October 1 of each year in which principal falls due, and Term Bonds of any Series shall have a principal maturity date of October 1. Interest on such Additional Bonds that are Current Interest Bonds shall be payable semiannually on April 1 and October 1 of each year excepting the first year, provided that the first installment of interest shall be payable on either April 1 or October 1 and shall be for a period of not longer than twelve months and that the interest shall be payable thereafter semiannually on April 1 and October 1.
(ii) Notwithstanding subsection (i), the Supplemental Indenture authorizing the issuance of such Additional Bonds may provide for the payment of principal and interest on dates other than those specified in subsection (i) if the Supplemental Indenture provides for the monthly payment of a portion of interest and principal becoming due and payable on the succeeding Interest Payment Date and Principal Payment Date, as applicable, as set forth in detail in the Supplemental Indenture.
Schedule 16(a)-4
3734007.10 046357 CTR
(iii) Interest on any Bonds constituting Variable Rate Indebtedness or Tender Indebtedness may be payable on such Payment Dates as shall be specified in the Supplemental Indenture providing for the issuance of such Bonds.
(d) Fixed serial maturities or mandatory Minimum Sinking Fund Account Payments, or any combination thereof, shall be established in amounts sufficient to provide for the retirement of all of the Bonds of such additional Series on or before their respective mat urity dates, unless such Bonds are Balloon Indebtedness.
(e) The aggregate principal amount of Bonds issued hereunder shall not exceed any limitation imposed by law or by any Supplemental Indenture.
(f) After giving effect to the application of the proceeds of the additional Series of Bonds, either (i) Annual Debt Service will not be increased in any Fiscal Year (excluding Debt Service on the Outstanding Bonds to be refunded) in an amount in excess of 5% or (ii) the Average Annual Debt Service for the Bon ds of such additional Series (during the period from their issuance to their last maturity date) shall be equal to or less than the Average Annual Debt Service on the Bonds to be refunded (during the period from the issuance of the additional Series to the last maturity date of the Bonds to be refunded).
(g) After the sale of the additional Series of Bonds proposed to be issued (but prior to the issuance and delivery thereof and receipt of payment therefor), the Commission shall file the following documents with the Trustee; these documents shall, with respect to such additional Series of Bonds, be based upon the actual interest rate or rates determined at the time of sale thereof.
(i) A Certificate of the Commission that all of the requirements of this Section 3.06 have been met.
(ii) A certificate of one or more Qualified Financial Advisors that the requirements of subsection (e) of this Section have been met.
SECTION 3.07. Proceedings for the Issuance of Additional Series of Bonds.
(a) Whenever the Commission determines to issue an additional Series of Bonds pursuant to Section 3.05 or 3.06, as the case may be, the Commission shall execute or adopt a Supplemental Indenture providing for the issuance of such additional Series of Bonds.
(b) Such Supplemental Indenture shall specify the maximum principal amount of Bonds of such Series, provide for the distinctive designation of Bonds of such Series, and prescribe the other terms and conditions of such additional Series of Bonds in accordance wit h
Schedule 16(a)-5
3734007.10 046357 CTR
this Indenture and subject to the provisions of Section 3.05 or 3.06, as the case may be. The Commission may by such Supplemental Indenture prescribe any provisions respecting the Bonds of such Series not inconsistent with the terms of this Indenture, including registration, transfer and exchange provisions, provisions for the payment of principal and interest and sinking fund provisions.
(c) Before such additional Series of Bonds may be issued and delivered, the Commission shall file the following documents with the Trustee:
(i) An Opinion of Counsel setting forth (1) that such counsel has examined the Supplemental Indenture and found it to be in compliance with the requirements of this Indenture; (2) that the execution and delivery of the additional Series of Bonds have been sufficiently and duly authorized by the Commission; (3) that said additional Series of Bonds, when duly executed by the Commission and, if required, authenticated and delivered by the Trustee, will be valid and binding special obligations of the Commission, payable from Net Revenues as provided herein; and (4) that the issuance of the additional Series of Bonds will not adversely affect the exclusion from federal income taxation of interest on any Bonds then Outstanding.
(ii) The certificates and reports required by Section 3.05 (if the Additional Bonds constitute an additional lien on the Net Revenues) or 3.06 (if the Additional Bonds are issued to refund any Outstanding Bonds), as appropriate.
(iii) The Supplemental Indenture, duly executed or certified and approved by the Trustee.
(d) Upon the delivery to the Trustee of the foregoing instruments, the Trustee shall authenticate and deliver said additional Series of Bonds, in the aggregate principal amount specified in such Supplemental Indenture, to, or upon the Written Request of, the Commission, when such additional Series of Bonds shall have been presented to it for that purpose.
SECTION 3.08. No Issuance of Additional Bonds or Other Obligations Except as Permitted Herein; Exceptions. So long as any of the Bonds remain Outstanding, the Commission may issue any Additional Bonds or obligations payable from Net Revenues on a parity with the Bonds only pursuant to Sections 3.05, 3.06 and 3.07, except under any of the following conditions, in which case none of the limitations or restrictions on the issuance of additional Series of Bonds set forth in Sections 3.05, 3.06 and 3.07 shall be applicable:
(a) i
f the Owners of a majority in aggregate amount of the Bond Obligation and a ny Credit Provider consent in writing to the issuance of such Additional Bonds or obligations, or
(b) the obligation constitutes debt of the Commission (including without limitation loan agreements entered into between the Commission and the State of California (or any board, department or agency thereof) to finance or refinance additions, betterments, extensions, repairs,
Schedule 16(a)-6
3734007.10 046357 CTR
renewals or replacements to the Enterprise) payable by its terms from Net Revenues on a subordinate basis to the payment of Debt Service on the Bonds.
In addition, the Commission may enter into Parity Loans if no Event of Default has occurred and is continuing under this Indenture or any Supplemental Indenture (and no event has occurred which, but for the passage of time or the giving of notice, would constitute an Event of Default under this Indenture or any Supplemental Indenture) and, on the date of the execution and delivery of such Parity Loans and with respect to Parity Loans executed and delivered prior to the effective date of t he amendments set forth in Article II of the Sixth Supplemental Indenture, on the effective date of the amendments set forth in Article II of the Sixth Supplemental Indenture, the Commission delivers a Certificate to the Trustee setting forth, for each of the next three Fiscal Years after the delivery of the Parity Loans, and in the case of Parity Loans executed and delivered prior to the effective date of the amendments set forth in Article II of the Sixth Supplemental Indenture, the next three Fiscal Years, determined on such date, (i) the Revenues, Operation and Maintenance Costs of the Enterprise and Net Revenues and (ii) the Annual Debt Service (assuming the delivery of the Parity Loans), and demonstrating that the estimated Net Revenues (together with any fund balances of the Commission, which are available for Debt Service, but excluding the Bond Reserve Fund), in each of such Fiscal Years is at least equal to 1.25 times the Annual Debt Service in each of such Fiscal Years
A-1
3734007.10 046357 CTR
EXHIBIT A
FORM OF WIFIA SUPPLEMENTAL INDENTURE (INCLUDING WIFIA BOND FORM)4
4 Form of WIFIA Bond to include Disbursement and Payments Schedule as an attachment.
B-1
3734007.10 046357 CTR
EXHIBIT B
FORM OF REQUISITION
VIA EMAIL
United States Environmental Protection Agency5
1200 Pennsylvania Avenue NW
WJC-E 7334A
Washington, D.C. 20460
Attention: WIFIA Director
Email: [email protected]
Re: [ ●] Project (WIFIA [insert loan number])
Ladies and Gentlemen:
Pursuant to Section 4 ( Disbursement Conditions) and Schedule III (Requisition Procedures) of the WIFIA Master Agreement, dated as of [ date], 2023 (the “WIFIA Master Agreement”), by and between the PUBLIC UTILITIES COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO (the “Borrower”) and the UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, acting by and through the Administrator (the “WIFIA Lender”), and the WIFIA Loan Agreement, dated as of [ ●], by and between the Borrower and the WIFIA Lender (the “WIFIA Loan Agreement ”), the Borrower hereby requests a Disbursement in the amount set forth below in respect of Eligible Project Costs paid or incurred by the Borrower .
Capitalized terms used but not defined herein have the meaning set forth in the WIFIA Master Agreement and the WIFIA Loan Agreement.
In connection with this Requisition, the undersigned, as the Borrower’s Authorized Representative, hereby represents and certifies the following:
1. Project name [____]
2. Borrower name Public Utilities Commission of the City and County of San Francisco
3. WIFIA Loan ID [____]
4. Borrower UEI [____]
5. Borrower FEIN number [____]
6. Requisition number [_____]
7. Requested Disbursement amount $[___]
8. Requested date of Disbursement
(the “Disbursement Date”)6
[___]
5 If there is a Servicer for the WIFIA Loan, provide a copy to the Servicer as well and include its notice details here. 6 Note this should be the actual disbursement date on which the Borrower requests to receive the funds, not the date that this Requisition form is submitted to the WIFIA Lender.
B-2
3734007.10 046357 CTR
9. Total amounts previously disbursed under the
WIFIA Loan Agreement
$[___]
10. Wire or ACH transfer instructions (please specify
method)
[___]
11. As of the date hereof, and immediately after giving effect to the Disbursement requested under this Requisition, (a) no System Event of Default or Project Event of Default and no event of default under any other Related Document shall have occurred and be continuing and (b) no event that, with the giving of notice or the passage of time or both, would constitute an event of default under any other Related Document, shall have occurred and be continuing.
12. No Material Adverse Effect, or any event or condition that could reasonably be expected to result in a Material Adverse Effect, has occurred since the WIFIA Loan Agreement Effective Date.
13. The aggregate amount of all Disbursements of the WIFIA Loan (including the requested Disbursement amount under this Requisition but excluding any interest that is capitalized in accordance with the terms of the WIFIA Master Agreement and the WIFIA Loan Agreement) does not exceed (a) the Maximum Principal Amount of the WIFIA Loan or (b) the aggregate amount of Eligible Project Costs for the Project paid or incurred by the Borrower.
14. The Eligible Project Costs for which reimbursement or payment is being requested has not been reimbursed or paid by any previous Disbursement of (a) the WIFIA Loan or (b) any other source of funding for the Project (other than Interim Financing or cash of the Borrower) as identified in the Project Budget.
15. The Borrower, and each of its contractors and subcontractors at all tiers with respect to the Project, has complied with all applicable laws, rules, regulations and requirements, including 40 U.S.C. §§3141-3144, 3146, and 3147 (relating to Davis -Bacon Act requirements) (and regulations relating thereto) and 33 U.S.C. §3914 (relating to American iron and steel products). Supporting documentation, such as certified payroll records and certifications for all iron and steel products used for the Project, are being maintained and are available for review upon request by the WIFIA Lender.
16. The representations and warranties of the Borrower set forth in the WIFIA Master Agreement and in each other Related Document are true and correct as of the date hereof and as of the Disbursement Date, except to the extent such representations and warranties expressly relate to an earlier date (in which case, such representations and warranties are true and correct as of such earlier date).
17. The Borrower has delivered all required deliverables under and in comp liance with the requirements of Section 22 (System Financial Planning and Reporting) and Section 23 (Project Oversight and Monitoring) , except as has been otherwise agreed by the WIFIA Lender.
B-3
3734007.10 046357 CTR
18. The amount hereby being requested for Disbursement is with respect to Eligible Project Costs for which [all][a portion][none] of the Eligible Project Costs Documentation was (a) previously submitted to and approved by the WIFIA Lender in accordance with Schedule III ( Requisition Procedures ) and Section 23(c) ( Project Oversight and Monitoring – Quarterly Certification of Eligible Project Costs ) of the WIFIA Master Agreement or (b ) submitted to the WIFIA Lender, together with a summary of such Eligible Project Costs in this Requisition (or attached separately to the Requisition), for approval by the WIFIA Lender . The [following table below][attached excel sheet] sets out a summary of any Eligible Project Costs that have not otherwise been previous ly submitted to the WIFIA Lender for approval, and supporting Eligible Project Costs Documentation in respect of such new Eligible Project Costs is attached hereto. 7
WIFIA USE ONLY
Vendor or
Contractor
Name8
Invoice
Number9
Invoice
Date
Payment
Date
Invoice
Amount
WIFIA
Requested
Amount10
Activity
Type11
Description
of Activity12
Approved
Amount
Notes
The undersigned acknowledges that if the Borrower makes a false, fictitious, or fraudulent claim, statement, submission, or certification to the Government in connection with the Project, the Government reserves the right to impose on the Borrower the penalties of 18 U.S.C. § 1001, to the extent the Government deems appropriate.
Date: _______________________ PUBLIC UTILITIES COMMISSION OF
THE CITY AND COUNTY OF SAN
FRANCISCO,
by its Authorized Representative
7 See Schedule III and Exhibit D of the WIFIA Master Agreement for additional details on EPC Documentation. 8 If seeking reimbursement for internal costs, enter “Internally financed activities.” 9 Vendor’s number indicated on the invoice sent to the Borrower. 10 If the amount requested for reimbursement by the WIFIA Lender is less than the total amount of the invoice, include an explanation for the difference.
11 Specify whether activity is: (a) Development phase activity , which includes planning, preliminary engineering, design, environmental review, revenue forecasting and other pre -construction activities; (b) Construction, which includes construction, reconstruction, rehabilitation and replacement activities; (c) Acquisition of real property , which includes acquiring an interest in real property, environmental mitigation, construction contingencies and acquisition of equipment; (d) Carrying costs , including capitalized interest, a s necessary to meet market requirements, reasonably required reserve funds, capital issuance expenses and other carrying costs during construction; (e) WIFIA fees, including for application and credit processing; or (f) Other , with an explanation in the ”Description of Activity” column.
12 Provide a brief description of the activities included in the invoice for which WIFIA funds are being requested and any other notes that will aid in the review of the disbursement request.
B-4
3734007.10 046357 CTR
By: _______________________________
Name:
Title:___________________________
C-1
3734007.10 046357 CTR
EXHIBIT C
FORM OF CONSTRUCTION MONITORING REPORT
VIA EMAIL
United States Environmental Protection Agency
1200 Pennsylvania Avenue NW
WJC-E 7334A
Washington, DC 20460
Attn: WIFIA Director
Email: [email protected]
Re: [●] Project (WIFIA [insert loan number])
This Construction Monitoring Report for the period of [ insert relevant quarterly period] (the “Quarterly Period”) is provided pursuant to Section 23(b) ( Project Oversight and Monitoring – Construction Monitoring Report ) of the WIFIA Master Agreement, dated as of [______], 2023 (the “WIFIA Master Agreement”), by and between the PUBLIC UTILITIES COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO (the “Borrower”) and the UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, act ing by and through the Administrator of the Environmental Protection Agency (the “ WIFIA Lender”), and the WIFIA Loan Agreement by and between the Borrower and the WIFIA Lender, dated as of [ ●] (the “WIFIA Loan Agreement ”). Unless otherwise defined herein, all capitalized terms in this Construction Monitoring Report have the meanings assigned to those terms in the WIFIA Master Agreement and the WIFIA Loan Agreement.
1. Project Status . Provide a narrative summary of the Project’s construction progress during the Quarterly Period, including with respect to the Project components or sub- projects where appropriate. Complete the table in Appendix A to update the Project scope, schedule, and costs with the latest information.
2. Current Projected Substantial Completion
Date:
If the current Projected Substantial Completion Date differs than the date set forth in the Construction Monitoring Report most recently delivered to the WIFIA Lender (or, if no such report has yet been provided, the date of the Projected Substantial Completion Date set forth in the WIFIA Loan Agreement as of the WIFIA Loan Agreement Effective Date), provide a description in reasonable detail for such projected delay or difference:
C-2
3734007.10 046357 CTR
3. Material Problems (if any)
Note any problems encountered or anticipated during the construction of the Project during the Quarterly Period that (1) impedes Project completion within the scope, costs, and schedule outlined in the WIFIA Loan Agreement or (2) relates to unforeseen complications in connection with the construction of the Project. This may include commissioning/start-up issues, constructability issues for the Project as planned, adverse impacts to Project surroundings, changes in or issues with meeting environmental or federal compliance requirements, and unanticipated or abnormal permit approval timelines. Include an assessment of the impact and any current plans to address the problems.
4. Other Matters Related to the Project (if applicable)
Date: _______________________ PUBLIC UTILITIES COMMISSION OF THE
CITY AND COUNTY OF SAN FRANCISCO
By: _______________________________
Name: _____________________________
Title:_______________________________
C-3
3734007.10 046357 CTR
APPENDIX A 13
Project Scope Project Schedule Project Costs
Project
Component
Completed
(Y/N)
Contract/
Vendor
Bid
Advertisem
ent Date
Contract
Award Date
NTP
Effective
Date
Original
Substantial
Completion
Date
Estimated
Substantial
Completion
Date
Original
Contract
Amount
Estimated
Costs to
Complete
Costs
Earned or
Paid to
Date
Total
Table Definitions:
Project Component – project name or ID as tracked by the borrower Complete (Y/N) – indication that project is complete, and no additional updates will be provided Description (program of projects only) – brief overview of scope of work for the project component.
Location (program of projects only) – physical project boundaries Covered by existing NEPA? (program of projects only) – refer to the environmental review documents that is the basis for the NEPA finding. Is the project within the geographic scope and scope of activities described in the documents?
Contract/Vendor – the contract identifier and contractor that is/will be completing the project construction.
Bid Advertisement Date – the date the bid was advertised Contract Award date – the date the contract was awarded NTP Effective date – the effective date to proceed with the construction in the Notice to Proceed Original Substantial Completion Date – the substantial completion date for the given project as noted in the original contract award Estimated Substantial Completion Date – the latest date estimate for substantial completion for the given project component
Original Contract Amount – the original contract award amount Estimated Costs to Complete – the latest cost estimates to complete the given project component Costs Earned or Paid to Date – the latest incurred contract costs for the given project component Total – Total the cost amounts across all project components and contract
13 Appendix A summarizes all project components that will be bid in the next quarter, are currently under construction, or have completed construction. It should be a cumulative list of project s that is updated each quarter. A Microsoft Excel spreadsheet with similar table format is acceptable.
D-1
3734007.10 046357 CTR
EXHIBIT D
FORM OF CERTIFICATION OF ELIGIBLE PROJECT COSTS DOCUMENTATION
VIA EMAIL
United States Environmental Protection Agency14
1200 Pennsylvania Avenue NW
WJC-E 7334A
Washington, D.C. 20460
Attention: WIFIA Director
Email: [email protected]
Re: [ ●] Project (WIFIA [insert loan number])
Ladies and Gentlemen:
Pursuant to Section 23 (c) ( Project Oversight and Monitoring – Quarterly Certification of Eligible Project Costs) of the WIFIA Master Agreement, dated as of [_____], 2023 (the “WIFIA Master Agreement”), by and between the PUBLIC UTILITIES COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO (the “Borrower”) and the UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, acting by and through the Administrator (the “WIFIA Lender” ), and the WIFIA Loan Agreemen t by and between the Borrower and the WIFIA Lender, dated as of [ ●] (the “WIFIA Loan Agreement”), the Borrower hereby presents this certificate in connection with the Borrower’s delivery of Eligible Project Costs Documentation to the WIFIA Lender. Capitalized terms used but not defined herein have the meaning set forth in the WIFIA Master Agreement and the WIFIA Loan Agreement.
The undersigned does hereby represent and certify the following:
1. This certificate is being delivered to the WIFIA Lender in connection with the Eligible Project Costs during the period between [___] and [___] (the “Quarterly Period”).
2. A summary of the Eligible Project Costs incurred, invoiced and/or paid (as the case may be) is set out in the [attached excel sheet][table on the following page:]
14 If there is a Servicer for the WIFIA Loan, provide a copy to the Servicer as well and include its notice details here.
D-2
3734007.10 046357 CTR
WIFIA USE ONLY
Vendor or
Contractor
Name15
Invoice
Number16
Invoice
Date
Payment
Date
Invoice
Amount
Activity
Type17
Description
of
Activity18
Approved
Amount
Notes
3. The anticipated sources of funding for such Eligible Project Costs are [listed below][set forth in the attached excel sheet].
4. Supporting Eligible Project Costs Documentation for the above Eligible Project Costs for the Quarterly Period are also attached hereto.
19 5. The most recently delivered Construction Monitoring Report delivered in accordance with Section 23(b) ( Project Oversight and Monitoring – Construction Monitoring Report) of the WIFIA Master Agreement sets out a summary of the progress of construction of the Project, no change has occurred since the date of such Construction Monitoring Report that could reasonably be e xpected to cause a Material Adverse Effect, and the Borrower is otherwise in compliance with Section 23 ( Project Oversight and Monitoring) of the WIFIA Master Agreement.
Date: _______________________ PUBLIC UTILITIES COMMISSION OF
THE CITY AND COUNTY OF SAN
FRANCISCO
20 By: _______________________________
Name:
Title:___________________________
15 If the expectation is to seek reimbursement for internal costs, enter “Internally financed activities.” 16 Vendor’s number indicated on the invoice sent to the Borrower. 17 Specify whether activity is: (a) Development phase activity , which includes planning, preliminary engineering, design, environmental review, revenue forecasting and other pre -construction activities; (b) Construction, which includes construction, reconstruction, rehabilitation and replacement activities; (c) Acquisition of real property , which includes acquiring an interest in real property, environmental mitigation, construction contingencies and acquisition of equipment; (d) Carrying costs , including capitalized interest on other Project Obligations during construction, as necessary to meet market requirements, reasonably required reserve funds, capital issuance expenses and other carrying costs during construction; (e) WIFIA fees , including for application and credit processing; or (f) Other, with an explanation in the ”Description of Activity” column. 18 Provide a brief description of the activities included in the invoice for which WIFIA funds are being requested and any other notes that will aid in the review of the documentation. 19 See Schedule III and Exhibit D of the WIFIA Master Agreement for additional details on EPC Documentation. 20 To be executed by the Borrower’s Authorized Representative.
E-1
3734007.10 046357 CTR
EXHIBIT E
FORM OF PUBLIC BENEFITS REPORT
Reference is made to (i) that certain WIFIA Master Agreement by and between the Public Utilities Commission of the C ity and County of San Francisco (the “Borrower”) and the United States Environmental Protection Agency, acting by and through the Administrator of the Environmental Protection Agency (the “WIFIA Lender” ), dated as of [______] , 2023 (the “WIFIA Master Agreement”) and (ii) that certain WIFIA Loan Agreement by and between the Borrower and the WIFIA Lender, dated as of [ ●] (the “WIFIA Loan Agreement”). Capitalized terms used and not defined herein shall have the respective meanings ascribed to such terms in the WIFIA Loan Agreement, or if not defined therein, the WIFIA Master Agreement.
Pursuant to Section 12(b) (xi) ( Conditions Precedent – Conditions Precedent to Effectiveness of E ach WIFIA Loan Agreement ) and Section 23(e) ( Project Oversight and Monitoring – P ublic Benefits Report ) of the WIFIA Master Agreement, the Borrower is providing this Public Benefits Report in connection with the [ ●] Project (WIFIA [insert loan number]):
Reporting Period: [Prior to the Effective Date][within ninety (90) days following the Subs
tantial Completion Date][within ninety (90) days following the fifth (5th) anniversary of the Substantial Completion Date]
(i) T he number of total jobs and direct jobs projected to be created by the Project during the period between the Effective Date and the Substantial Completion Date:
WIFIA projects that the Project will create [__] total jobs, of which the Borrower projects [__] will be direct jobs.
(ii) Indicate (yes or no) whether the Project will assist the Borrower in complying with applicable regulatory requirements, and if yes , describe how the project assists with regulatory compliance:
Yes
☐
If yes, additional description: [___]
No
☐
(iii) The Project will assist the Borrower with the following environmental measure:
Amount by which Project will provide new, expanded, improved, more reliable, more resilient, or more efficient treatment capacity for wastewater treatment (measured in MGD capacity at Substantial Completion): [___]
F-1-1
3734007.10 046357 CTR
EXHIBIT F-1
OPINIONS REQUIRED OF COUNSEL TO BORROWER
An opinion of the counsel of the Borrower, dated as of the Effective Date and each WIFIA Loan Agreement Effective Date, to the effect that:
(a) the Borrower is duly formed, validly existing, and in good standing under the laws of the jurisdiction of its organization;
(b) the Borrower has all requisite power and authority to conduct its business and to execute and deliver, and to perform its obligations under the Related Documents to which it is a party;
(c) the execution and delivery by the Borrower of, and the performance of its respective obligations under, the Related Documents to which it is a party , have been duly authorized by all necessary organizational or regulatory action;
(d) the Borrower has duly executed and delivered each Related Document to which it is a party and each such Related Document constitutes the legal, valid and binding obligation of such party; enforceable against such party in accordance with their respective terms; (e) no authorization, consent , or other approval of, or registration, declaration or other filing with any governmental authority of the United States of America or of the State is required on the part of the Borrower for the execution and delivery by such party of, and the performance of such party under, any Related Document to which it is a party other than authorizations, consents, approvals, registrations, declarations and filings that have already been timely obtained or made by the Borrower;
(f) the execution and delivery by the Borrower of, and compliance with the provisions of , the Related Documents to which it is a party in each case do not (i) violate the Orga nizational Documents of the Borrower, (ii) violate the law of the United States of America or of the State or (iii) conflict with or constitute a breach of or default under any material agreement or other instrument known to such counsel to which the Borrower is a party, or to the best of such counsel’s knowledge, after reasonable review, any court order, consent decree, statute, rule, regulation or any other law to which the Borrower is subject; (g) to our knowledge after due inquiry, there are no actions, suits, proceedings or investigations against the Borrower by or before any court, arbitrator or any other Governmental Authority in connection with the Related Documents or the Projects that are pending; and (h) the Borrower is not entitled to claim governmental immunity in any breach of contract action under the WIFIA Master Agreement or the WIFIA Bond or by the Truste e under the Indenture Documents.
F-2-1
3734007.10 046357 CTR
EXHIBIT F-2
OPINIONS REQUIRED FROM BOND COUNSEL
An opinion of bond counsel, dated as of the Effective Date and each WIFIA Loan Agreement Effective Date, to the effect that:
(a) the Borrower has been duly created and validly exists as a commission under and pursuant to the Charter of the City and the laws of the State (including the Charter, as amended to the date hereof) (the “Borrower Act”), with good right and power to issue the WIFIA Bond; (b) each of the Indenture and the WIFIA Loan Documents has been duly authorized, executed and delivered by the Borrower , is in full force and effect and constitutes th e legal, valid, and binding obligation of the Borrower, enforceable against the Borrower in accordance with its respective terms and conditions;
(c) upon receipt by the Trustee of the portion of the purchase price of the WIFIA Bond on each Disbursement Dat e in compliance with the provisions of the WIFIA Supplemental Indenture, the WIFIA Bond delivered to the WIFIA Lender in connection with the execution of the WIFIA Master Agreement, in the principal amount deemed purchased by the WIFIA Lender as of such Disbursement Date, including any amount purchased on any prior Disbursement Date and any capitalized interest thereon, will be secured by the Net System Revenues and will be a Bond entitled to the benefits of a Bond under the Indenture, enforceable under the laws of the State without any further action by the Commission or any other Person, and will be on a parity with all other Bonds issued under the Indenture, including any Additional Bonds, in right of payment and right of security;
(d) the Indenture creat es a valid pledge of the Net System Revenues, which pledge constitutes a lien on and security interest in the Net System Revenues, to secure the payment of the principal of, and interest on the Bonds (including, upon payment of the purchase price of the WIFIA Bond pursuant to the WIFIA Supplemental Indenture, the WIFIA Bond), subject to the provisions of the Indenture permitting the application thereof for the purposes and on the terms and conditions set forth therein, irrespective of whether any party has notice of the pledge and without the need for any physical delivery, recordation, filing or further act to perfect such assignment or pledge;
(e) subject to the satisfaction of the provisions of the WIFIA Supplemental Indenture on each Disbursement Date, all actions by the Borrower that are required for the application of System Revenues as required under the Indenture and under the WIFIA Master Agreement will have been duly and lawfully made on each such Disbursement Date; (f) the Borrower has complied w ith the requirements of State law to lawfully pledge the Net System Revenues and use the Net System Revenues as required by the terms of the Indenture and the WIFIA Master Agreement; and
F-2-2
3734007.10 046357 CTR
(g) the Borrower is not an investment company required to register under the Investment Company Act of 1940, as amended.
H-1-1
3734007.10 046357 CTR
EXHIBIT G
FORM OF WIFIA LOAN REQUEST
[Letterhead of Borrower]
[Date]21
United States Environmental Protection Agency
WIFIA Director
WJC-W 6201A
1200 Pennsylvania Avenue NW
Washington, DC 20460
[email protected]
Project: [●] Project (WIFIA [insert loan number])
Dear Director:
This loan request is provided pursuant to Section 3(b) (W IFIA Loans for the Master Program) of
that certain WIFIA Master Agreement, dated as of [_____], 2023 (the “WIFIA Master Agreement”), by and betw een the Public Utilities Commission of the City and County of San Francisco (the “Borrower”) and the United States Environmental Protection Agency, acting by and through the Administrator of the Environmental Protection Agency (the “ WIFIA Lender”).
Unless otherwise defined herein, all capitalized terms in this loan request have the meanings assigned to those terms in the WIFIA Master Agreement.
I, the undersigned, in my capacity as the Borrower’s Authorized Representative and not in my indi
vidual capacity, do hereby request that the WIFIA Lender, in accordance with, and subject to the terms and conditions of, the WIFIA Master Agreement, enter into a WIFIA Loan Agreement and related WIFIA Loan Documents with respect to [●] Project (the “Project”). (a) The Project consists of [describe the Project].
(b) Attached hereto as Annex A i
s the most recent [Updated Financial Model] [financial
plan] delivered to the WIFIA Lender.
(c) [Such additional information relating to the Project as may be requested by the WIFIA L
ender.]
21 To be dated no later than 180 days prior to the end of the Master Availability Period.
G-2
3734007.10 046357 CTR
PUBLIC UTILITIES COMMISSION OF THE
CITY AND COUNTY OF SAN FRANCISCO
by its Authorized Representative
By: _______________________________
Name:
Title:
H-1-1
3734007.10 046357 CTR
EXHIBIT H-1
FORM OF CLOSING CERTIFICATE
Reference is made to that certain WIFIA Master Agreement , dated as of [_____] , 2023 (the “WIFIA Master Agreement ”), by and among the Public Utilities Commission of the City and County of San Francisco (the “Borrower”) and the United States Environmental Protection Agency, acting by and through the Administrator (the “ WIFIA Lender ”). Capitalized terms used in this certificate and not defined shall have the respective meanings ascribed to such terms in the WIFIA Master Agreement.
The undersigned, [___________], as Borrower’s Authorized Representative, does hereby certify on behalf of the Borrower and not in his/her personal capacity, as of the date hereof:
(a) pursuant to Section 12(a)( iv) ( Conditions Precedent – Conditions Precedent to Effectiveness) of the WIFIA Master Agreement, attached hereto as Exhibit A is an incumbency certificate that lists all persons, together with their positions and specimen signatures, who are duly authorized by the Borrower to execute the Related Documents to which the Borrower is or will be a party, and who have been appointed a Borrower’s Aut horized Representative in accordance with Section 27 ( Borrower’s Authorized Representative ) of the WIFIA Master Agreement;
(b) pursuant to Section 12(a)(iv)(A) (Conditions Precedent – Conditions Precedent to Effectiveness) of the WIFIA Master Agreement , (i) th e Borrower’s Federal Employer Identification Number is 94-6000417
22, (ii) the Borrower’s UEI is
[_______], and (iii) the Borrower has registered with, and obtained confirmation of active registration status from, the federal System for Award Management (www.SAM.gov), and attached hereto as Exhibit B is evidence of each of (ii) and (iii);
(c) pursuant to Section 12(a)(iv)(B
) (Conditions Precedent – Conditions Precedent to
Effectiveness) of the WIFIA Master Agreement , t he representations and warranties of the Borr ower set forth in WIFIA Master Agreement (including Section 13 ( Representations and Warranties of Borrower )) and in each other Related Document are true and correct, as of the Effective Date, except to the extent such representations and warranties express ly relate to an earlier date (in which case, such representations and warranties ar e true and correct as of such earlier date); and
(d) pursuant to Section 12(a)(iv)(C) (Conditions Precedent – Conditions Precedent to Effectiveness) of the WIFIA Master Agreemen t, no Material Adverse Effect, or any event or condition that could reasonably be expected to have a Material Adverse Effect, has occurred or arisen since the date of the Application;
22 Borrower to confirm FEIN and provide signed W-9 form.
H-1-2
3734007.10 046357 CTR
This certificate may be delivered by the delivery of signed signature pages by electronic means, facsimile transmission, or by e-mail with a PDF copy attached, and any printed or copied versions of any signature page so delivered shall have the same force and effect as an originally signed version of such signature page. Signatures of this certificate made by electronic means shall be accompanied by an email, contemporaneous or otherwise, confirming the use of such means.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
H-1-3
3734007.10 046357 CTR
IN WITNESS WHEREOF, the undersigned has executed this certificate as of the date first mentioned above.
PUBLIC UTILITIES COMMISSION OF THE
CITY AND COUNTY OF SAN FRANCISCO
By: _______________________________
Name:
Title:
H-1-4
3734007.10 046357 CTR
EXHIBIT A TO EXHIBIT H-1
INCUMBENCY CERTIFICATE
The undersigned certifies that he/she is the [Secretary] of the Public Utilities Commission of the City and County of San Francisco, a commission duly organized and existing under and pursuant to the Charter of the City and County of San Francisco and the laws of the State of California (the “Borrower”), and as such he/she is authorized to execute this certificate and further certifies that the following persons have been elected or appointed, are qualified, and are now acting as officers or authorized persons of the Borrower in the capacity or capacities indicated below, and that the signatures set forth opposite their respective names are their true and genuine signatures. He/She further certifies that any of the officers listed below is authorized to sign agreements and give written instructions with regard to any matters pertaining to the WIFIA Loan Documents and/or the Indenture Documents as the Borrower’s Authorized Representative (each as defined in that certain WIFIA Master Agreement, dated as of the date hereof, between the Borrower and the United States Environmental Protection Agency, acting by and through the Administrator):
Name Title
Signature
[_______________] [___________________] ________________________ [_______________] [___________________] ________________________ [_______________] [___________________] ________________________ [_______________] [___________________] ________________________ [_______________] [___________________] ________________________
IN WITNESS WHEREOF, the undersigned has executed this certificate as of this _____ day of [___], 2023.
PUBLIC UTILITIES COMMISSION OF THE
CITY AND COUNTY OF SAN FRANCISCO
By: _______________________________
Name:
Title:
H-2-1
3734007.10 046357 CTR
EXHIBIT H-2
FORM OF PROJECT CLOSING CERTIFICATE
[●], 202[●]
Reference is made to that certain WIFIA Master Agreement, dated as of [________], 2023 (t
he “WIFIA Master Agreement ”), by and between the Public Utilities Commission of the City and County of San Francisco (the “Borrower ”) and the United States Environmental Protection Agency, acting by and through the Administrator (the “ WIFIA Lender”) and that certain WIFIA Loan Agreement, dated as of [●] (the “ WIFIA Loan Agreement ”), by and between the Borrower and the WIFIA Lender. Capitalized terms used and not defined in this certificate shall have the respective meanings ascribed to such terms in the WIFIA Loan Agreement, or if not defined therein, the WIFIA Master Agreement.
In connection with Section 12(b) ( Condi
tions Precedent – Conditions Precedent to
Effectiveness of Each WIFIA Loan Agreement ) of the WIFIA Master Agreement and Section 12(a) (Conditions Precedent – Conditions Precedent to Effectiveness ) of the WIFIA Loan Agreement, the undersigned, [●], as Borrower’s Authorized Representative, does hereby certify on behalf of the Borrower and not in his/her personal capacity, as of the date hereof:
(a) pursuant to Section 12(b ) (viii) of the WIFIA Master Agreement, the Borrower’s Authorized Representative previously designated and such person’s position and incumbency previously provided to the WIFIA Lender remain unchanged and in full force and effect] [attached hereto as Annex A is an incumbency certificate that lists all person s, together with their positions and specimen signatures, who are duly authorized by the Borrower to execute the Related Documents to which the Borrower is or will be a party, and who have been appointed as a Borrower’s Authorized Representative in accordance with Section 27 (Borrower’s Authorized Representative) of the WIFIA Master Agreement; (b) pursuant to Section 12(b)(ii) of
the WIFIA Master Agreement, the
Borrower has delivered to the WIFIA Lender copies of each Existing Principal Project Contract with re spect to the Project, together with any amendments, waivers or modifications thereto, true, correct and complete copies of which are included in the closing transcripts for the WIFIA Loan, and each such document is complete, fully executed, and in full for ce and effect (except to the extent it is no longer in full force and effect by its terms); (c) pursuant to Section 12(b) (iii) of the WIFIA Master Agreement, the Borrower has delivered to the WIFIA Lender copies of each Indenture Document entered into after the Effective Date, true, correct and complete copies of which are included in the closing transcripts for the WIFIA Loan, and each such document is complete, fully executed and in full force and effect;
(d) pursuant to Section 12( b
)(iv) of the WIFIA Master Agre ement, the
Borrower has duly adopted an ordinance attached as Annex [●] and a resolution attached as Annex [●] , authorizing the issuance of the WIFIA Bond and execution and delivery by the Borrower of the WIFIA Loan Agreement and WIFIA Supplemental Indenture , and pledging the
H-2-2
3734007.10 046357 CTR
security set forth in the WIFIA Loan Agreement , WIFIA Bond and WIFIA Supplemental Indenture, and such ordinance and resolution remains in full force and effect; (e) pursuant to Section 12(b)(viii)(A) of the WIFIA Master Agreement, (i) the Maximum Principal Amount of the relevant WIFIA Loan, together with the amount of any other credit assistance provided under the Act to the Borrower, does not exceed forty- nine percent (49%) of the reasonably anticipated Eligible Project Costs for the Project and (ii) the total federal assistance provided to the Project, including the Maximum Principal Amount of the relevant WIFIA Loan, does not exceed eighty percent (80%) of Total Project Costs for the Project; (f) pursuant to Section 12(b)(viii)(B) of the WIFIA Master Agreement, except as set forth in Schedule 13(r) ( Environmental Matters ) to the WIFIA Loan Agreement the Borrower is in compliance with NEPA and any applicable federal, state or local environmental review and approval requirements with respect to the Project and the NEPA Determination with respect to the Project is in full force and effect and has not been withdrawn or materially amended;
(g) pursuant to Section 12(b)(vi ii)(C) of the WIFIA Master Agreement, the Borrower has maintained (i) the Borrower’s Federal Employer Identification Number provided to the WIFIA Lender as a condition precedent to the Effective Date, (ii) the Borrower’s UEI provided to the WIFIA Lender as a condition precedent to the Effective Date, and (iii) active registration status with the federal System for Award Management (www.SAM.gov); (h) pursuant to Section 12(b)(v iii)(D) of the WIFIA Master Agreement, the WIFIA CUSIP Number is [____];
(i) pursuant to Section 12(b)(vi ii
)(E) of the WIFIA Master Agreement, the
representations and warranties of the Borrower set forth in the relevant WIFIA Loan Agreement and in each other WIFIA Loan Document to which the Borrower is a party are true and correct on and as of the WIFIA Loan Agreement Effective Date, except to the extent that such representations and warranties expressly relate to an earlier date, in which case such representations and warranties were true and correct as of such earlier date [and attached as Annex [●] is an updated version of Schedule 13(r) (Environmental Matters ) necessary to make the corresponding representation and warranty true and complete as of the WIFIA Loan Agreement Effective Date];
(j) pursuant to Section 12(b)(vi ii
)(F) of the WIFIA Master Agreement, the
Borrower’s Organizational Documents remain in full force and effect, and no amendments or modifications have been made to the Organizational Documents since the Effective Date that have not been delivered to the WIFIA Lender;
(k) pursuant to Section 12(b)(vi ii)(G) of the WIFIA Master Agreement, no Material Adverse Effect, or any event or condition that could reasonably be expected to have a Material Adverse Effect, has occurred or arisen since the Effective Date; and
H-2-3
3734007.10 046357 CTR
(l) pursuant to Section 12(b)(viii)(H) of the WIFIA Master Agreement, (1) no System Event of Default or Project Even t of Default and no event of default under any Related Document has occurred and is continuing and (2) no event that, with the giving of notice or the passage of time or both, would constitute a System Event of Default or a Project Event of Default or an event of default under any Related Document, in each case, has occurred and is continuing.
IN WITNESS WHEREOF, the undersigned has executed this certificate as of the date first mentioned above.
PUBLIC UTILITIES COMMISSION OF THE
CITY AND COUNTY OF SAN FRANCISCO
by its Authorized Representative
By: _______________________________
Name:
Title:
I-1
3734007.10 046357 CTR
EXHIBIT I
FORM OF CERTIFICATE OF SUBSTANTIAL COMPLETION
[Letterhead of Borrower]
[Date]
Environmental Protection Agency
WIFIA Director
WJC-W 6201A
1200 Pennsylvania Avenue NW
Washington, DC 20460
Project: [●] Project (WIFIA [insert loan number])
Dear Director:
This certificate is provided pursuant to Section 15(g)(i)(A) (R eporting Requirements – Notices –
Substantial Completion) of that certain WIFIA Master Agreement (the “WIFIA Master Agreement”), dated as of [_________] , 2023, by and between the Public Utilities Commission of the City and County of San Francisco (the “Borrower”) and the United States Environmental Protection Agency, acting by and through the Administrator of the Environmental Protection Agency (the “WIFIA Lender”).
Unless otherwise defined herein, all capitalized terms in this certificate have the meanings as
signed to those terms in the WIFIA Master Agreement.
I, the undersigned, in my capacity as the Borrower’s Authorized Representative and not in my individual capacity, do hereby certify to the WIFIA Lender that:
(a) the Project has satisfied each of the requirements for Substantial Completion set forth in the Principal Project Contracts;
(b) Substantial Completion has been declared under each of the relevant Principal Project Contracts and copies of the notices of Substantial Completion under such agreements are attached to this certification;
(c) Substantial Completion, as defined in the W IFIA Loan Agreement, has been achieved and the Substantial Completion Date is [___]; and
(d) The total federal assistance provided to the Project, including the Maximum Principal Amount of the WIFIA Loan, does not exceed eighty percent (80%) of Total Proje ct Costs.
I-2
3734007.10 046357 CTR
PUBLIC UTILITIES COMMISSION OF THE
CITY AND COUNTY OF SAN FRANCISCO
By: _______________________________
Name:
Title:
J-1
3734007.10 046357 CTR
EXHIBIT J
FORM OF WIFIA PROJECT TERM SHEET
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
[●], 20[●]
Public Utilities Commission of the City and County of San Francisco 525 Golden Gate Avenue
San Francisco, California 94102
RE: WIFIA Loan Term Sheet for SFPUC Wastewater Capital Plan Resilience Program – Project [●] with the Public Utilities Commission of the City and County of San Francisco (WIFIA ID – [●])
Ladies and Gentlemen:
This WIFIA Loan Term Sheet (this “ Term Sheet”) constitutes (a) the approval of the United States Environmental Protection Agency, acting by and through the Administrator of the Environmental Protection Agency (hereinafter, the “ USEPA”), of the application for credit assistance of the Borrower (as defined below) dated August 30, 2022 (the “Application”) and (b) the agreement of USEPA to provide financing for the above -referenced project (as further described below, the “Project”) in the form of a secured loan (the “WIFIA Loan ”), pursuant to the Water Infrastructure Finance and Innovation Act (“ WIFIA”), § 5021 et seq. of Public Law 113-121 (as amended from time to time ) (the “ Act”), codified as 33 U.S.C. §§ 3901-3915, subject in all respects to (i) the terms and conditions contained herein, (ii) the terms and conditions contained in that certain WIFIA Master Agreement, dated as of [_____], 2023, by and between the WIFIA Lender (as defined below) and the Borrower (the “WIFIA Master Agreement”), and (iii) the execution and delivery of the WIFIA loan agreement with respect to the Project to be entered into on or after the date hereof (the “WIFIA Loan Agreement ”) on terms and conditions acceptable to USEPA contained therein. Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to such terms in the WIFIA Loan Agreement or, if not defined therein, the WIFIA Master Agreement.
USEPA’s agreement to provide WIFIA credit assistance to the Project is based upon the Application and the supplemental information and documents, including the base case financial model, provided to USEPA. This Term Sheet is an agreement of USEPA only to the terms specified herein, which may be modified or supplemented by USEPA in its discretion at any time and from time to time during the course of its due diligence and credit approval process. In addition, WIFIA credit assistance is subject in all respects to the execution o f the WIFIA Loan Agreement on terms and conditions acceptable to USEPA
By executing this Term Sheet, the Borrower confirms its agreement to reimburse USEPA for any and all fees and expenses that USEPA incurs for legal counsel, financial advice, and other consultants in connection with the evaluation of the Project and the negotiation and preparation of the WIFIA Loan Agreement and related documents (whether or not any such agreement is ultimately executed).
J-2
3734007.10 046357 CTR
This Term Sheet shall be governed by the federal laws of the United States of America if and to the extent such federal laws are applicable, and the internal laws of the State of California, if and to the extent such federal laws are not applicable. This Term Sheet, and any amendments, waivers, consents or supplements hereto may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute but one a nd the same instrument. Electronic delivery of an executed counterpart of a signature page shall be effective as delivery of an original executed counterpart.
J-3
3734007.10 046357 CTR
INDICATIVE TERMS OF THE WIFIA LOAN
WIFIA LENDER United States Environmental Protection Agency, an agency of the United States of America, acting by and through the Administrator of the Environmental Protection Agency (the “WIFIA Lender”).
BORROWER Public Utilities Commission of the City and County of San Francisco, a commission duly organized and e xisting under and pursuant to the Charter of the City and County of San Francisco and the laws of the State of California (the “Borrower”).
PROJECT The “ Project” means the SFPUC Wastewater Capital Plan Resilience Program – Project [●], located at [________], as further described in Schedule III ( Project) to the WIFIA Loan Agreement.
WIFIA LOAN AMOUNT A maximum principal amount (sum of disbursements and excluding any capitalized interest ) not to exceed $[●]; provided that (a) the m aximum principal amount of the WIFIA Loan, together with the amount of any other credit assistance provided under the Act, shall not exceed forty- nine percent (49%) of reasonably anticipated Eligible Project Costs for the Project and (b) the total federal assistance for the Project, including but not limited to the maximum principal amount of the WIFIA Loan and all federal grants, shall not exceed eighty percent (80%) of Total Project Costs for the Project.
INTEREST RATE The WIFIA Loan shall bear interest at a fixed rate, calculated by adding one basis point (0.01%) to the rate of securities of a similar maturity (based on the weighted- average life of the WIFIA Loan) as published, on the execution date of the WIFIA Loan
Agreement, in the United States Treas ury Bureau of the Fiscal Service’s daily rate table for State and Local Government Series (SLGS) securities.
The WIFIA Loan shall also bear default interest at a rate of two hundred (200) basis points above the otherwise applicable interest rate, at such times and upon such terms as provided in the WIFIA Master Agreement.
PAYMENT DATES Principal and interest on the WIFIA Bond shall be paid on April 1 and October 1 of each year in accordance with the terms of the WIFIA Loan Agreement.
The Debt Service Payment Commencement Date shall in no event be later than five (5) years after the Substantial Completion Date of the Project.
J-4
3734007.10 046357 CTR
FINAL MATURITY DATE The earlier of (a) [●] 1, 20[●] and (b) the Semi-Annual Payment Date immediately preceding the date that is thirty -five (35) years following the Substantial Completion Date.
PROJECTED
SUBSTANTIAL
COMPLETION DATE
[●].
DEDICATED SOURCE OF
REPAYMENT
As secu rity for each WIFIA Bond, the Borrower has in the Indenture irrevocably pledged all of the Net System Revenues to the punctual payment of the principal of and interest and redemption premium, if any, on the Bonds (including each WIFIA Bond) and the other P
arity Obligations. The Borrower has
affirmed such pledge under the WIFIA Master Agreement.
SECURITY AND LIEN
PRIORITY
Each WIFIA Bond shall be secured at all times in right of payment and right of security on a parity with all other Bonds issued under the Indenture, including any Additional Bonds, and other Parity Obligations. As security for the payment of all other obligations under the WIFIA Master Agreement and the WIFIA Loan Agreement not evidenced by the WIFIA Bonds, including the Borrower’s indemn ification obligations, the Borrower has irrevocably pledged in the WIFIA Master Agreement all of the Net System Revenues on a subordinate basis after payment of all Parity Obligations. All payment obligations of the Borrower are subject to the limitations
specified in Section 11.01 of the
Indenture.
PREPAYMENT The Borrower may optionally prepay the WIFIA Loan in whole or in part, from time to time, but not more than once during any Borrower Fiscal Year, without penalty or premium; provided that any such prepayment shall be made on a Semi -Annual Payment Date unless otherwise agreed by the WIFIA Lender and in a minimum principal amount of $1,000,000 or any multiple of $1.00 in excess thereof, and otherwise in accordance with the WIFIA Loan Agreement; provided further that the WIFIA Loan may be prepaid in full at any time without penalty.
RATE COVENANT The Borrower shall establish , fix and prescribe rates, fees and charges in connection with the System in compliance with the provisions of Section 6.13 of the Indenture, as in effect as of the Effective Date and as such provisions are set forth in Schedule 15(k) to the WIFIA Master Agreement (the “Rate Covenant”).
ADDITIONAL
INDEBTEDNESS
(i) The Borrower shall not issue any Additional
Parity Obligations other tha n as expressly permitted under the applicable provisions of the Indenture, as in effect as of the Effective Date and as such provisions are set forth in Schedule
J-5
3734007.10 046357 CTR
16(a) to the WIFIA Master Agreement.
(ii) The Borrower shall provide to the WIFIA
Lender notice of the issuance of Additional Parity Obligations in a manner consistent with its continuing disclosure requirements, which notice shall confirm that the issuance of such Additional Parity Obligations is permissible pursuant to clause (i) above. (iii) Without limiting anything in this section, the
Borrower shall not incur any Obligation that does not constitute Permitted Debt under the WIFIA Master Agreement, including, in the case of any Obligation subordinate to the Parity Obligations, satisfaction of the requirements under the definition of “Subordinated Obligations.”
(iv) Notwithstanding any of the foregoing
clauses of this section or anything contained in the Indenture, the Borrower will not have Outstanding at any time Parity
Obligations that constitute Variable Rate Indebtedness in excess of twenty-
five percent (25%) of the Borrower’s total Parity
Obligations.
(v) Notwithstanding any of the foregoing
clauses of this section or anything contained in the Indenture, the Borrower shall not issue or enter into any Senior State Loans or pay any amount with respect to any loan agreement with the State (or any board, department or agency thereof) prior to the payment of the Parity Obligations.
RESTRICTED PAYMENTS
AND TRANSFERS
The Borrower shall not permit System Revenues o r other assets of the System, or any funds in any accounts held under the Indenture or in any other fund or account held by or on behalf of the Borrower, to be paid or transferred or otherwise applied except as permitted by the Indenture.
WIFIA LOAN
DOCUMENTATION
The WIFIA Loan shall be subject to the preparation, execution and delivery of the WIFIA Loan Agreement, the WIFIA Bond and any other loan documentation required by the WIFIA Lender in connection therewith, in each case acceptable to the WIFIA Lender and the Borrower, which will contain certain conditions precedent, representations and warranties, affirmative and negative covenants, events of default, and other provisions as agreed between the WIFIA Lender and the Borrower, in each case in accordance with the terms of the WIFIA Master Agreement.
GOVERNING LAW The WIFIA Loan Agreement shall be governed by the federal laws of the United States of America, if and to the extent such federal laws are applicable, and the internal laws of the State of
J-6
3734007.10 046357 CTR
California, if and to the extent such federal laws are not applicable.
COUNTERPARTS This Term Sheet, and any amendments, waivers, consents or supplements hereto may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute but one and the same instrument. Signature pages may be detached from multiple separate counterparts and attached to a single cou nterpart so that all signature pages are physically attached to the same document. Electronic delivery of an executed counterpart of a signature page shall be effective as delivery of an original executed counterpart.
[Signature pages follow]
J-7
3734007.10 046357 CTR
If the for egoing terms are acceptable, please countersign this letter in the space indicated below.
Sincerely,
UNITED STATES ENVIRONMENTAL
PROTECTION AGENCY, acting by and
through the Administrator of the United States
Environmental Protection Agency
By: _______________________________
Name: Michael S. Regan
Title: Administrator
[Signature Page to SFPUC Wastewater Capital Plan Resilience Program – Project [●] – WIFIA Term Sheet]
J-8
3734007.10 046357 CTR
ACKNOWLEDGED AND AGREED:
PUBLIC UTILITIES COMMISSION OF
THE CITY AND COUNTY OF SAN FRANCISCO,
by its Authorized Representative
By: _______________________________
Name:
Title:
[Signature Page to SFPUC Wastewater Capital Plan Resilience Program – Project [●] – WIFIA Term Sheet]
K-1
3734007.10 046357 CTR
EXHIBIT K
FORM OF WIFIA LOAN AGREEMENT
[Attached.]
K-2
3734007.10 046357 CTR
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WIFIA LOAN AGREEMENT
for up to $[●]
with
PUBLIC UTILITIES COMMISSION OF THE CITY AND COUNTY OF SAN
FRANCISCO
for the
SFPUC WASTEWATER CAPITAL PLAN RESILIENCE PROGRAM – PROJECT [___] (WIFIA ID – [insert loan number])
Dated as of [●], 20[●]
K-1
3734007.10 046357 CTR
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS AND INTERPRETATION ......................................................... 4 Section 1. Definitions....................................................................................................... 4 Section 2. Interpretation ................................................................................................... 6 ARTICLE II THE WIFIA LOAN ............................................................................................... 6 Section 3. WIFIA Loan Amount ...................................................................................... 6 Section 4. Disbursement Conditions ................................................................................ 6 Section 5. [Reserved] ....................................................................................................... 6 Section 6. Interest Rate .................................................................................................... 6 Section 7. [Reserved] ....................................................................................................... 7 Section 8. Payment of WIFIA Debt Service .................................................................... 7 Section 9. WIFIA Bond ................................................................................................... 7 Section 10. Prepayment ..................................................................................................... 7 Section 11. Fees and Expenses .......................................................................................... 7 ARTICLE III CONDITIONS PRECEDENT ............................................................................ 8 Section 12. Conditions Precedent ...................................................................................... 8 ARTICLE IV REPRESENTATIONS AND WARRANTIES .................................................. 8 Section 13. Representations and Warranties of Borrower ................................................. 8 Section 14. Representations and Warranties of WIFIA Lender ........................................ 9 ARTICLE V COVENANTS ........................................................................................................ 9 Section 15. Covenants ........................................................................................................ 9 Section 16. [Reserved] ....................................................................................................... 9 Section 17. [Reserved] ....................................................................................................... 9 ARTICLE VI EVENTS OF DEFAULT ..................................................................................... 9 Section 18. Events of Default and Remedies ..................................................................... 9 ARTICLE VII MISCELLANEOUS ......................................................................................... 10 Section 19. Governing Law ............................................................................................. 10 Section 20. Effectiveness ................................................................................................. 10 Section 21. Termination ................................................................................................... 10 Section 22. Miscellaneous ............................................................................................... 10
SCHEDULES
SCHEDULE I – Project Budget
SCHEDULE II – Project Schedule
[SCHEDULE III – Project]23
23 Note to Form: Include only if applicable.
K-2
3734007.10 046357 CTR
SCHEDULE 13(f) – Litigation
SCHEDULE 13(n) – Existing Principal Project Contracts
SCHEDULE 13(r) – Environmental Matters
EXHIBITS
EXHIBIT A – WIFIA Debt Service
EXHIBIT B – Form of Certificate of Trustee
K-3
3734007.10 046357 CTR
WIFIA LOAN AGREEMENT
THIS WIFIA LOAN AGREEMENT (this “ Agreement”), dated as of [●], 20[ ●], is by and between the PUBLIC UTILITIES COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO, a commission duly organized and existing under and pursuant to the Charter of the City and County of San Francisco and the laws of the State of California, with an address at 525 Golden Gate Avenue, San Francisco, California 94102 (the “Borrower”) and the UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, an agency of the United States of America, acting by and through the Administrator of the Environmental Protection Agency, with an address at 1200 Pennsylvania Avenue NW, Washington, DC 20460 (the “WIFIA Lender”).
RECITALS:
WHEREAS, the Congress of the United States of America enacted the Water Infrastructure Finance and Innovation Act, § 5021 et seq. of Public Law 113-121, as amended, and as may be further amended from time to time, which is codified as 33 U.S.C. §§ 3901-3915; WHEREAS, the Act authorizes the WIFIA Lender to enter into agreements to provide financial assistance with one o r more eligible entities to make secured loans with appropriate security features to finance a portion of the eligible costs of projects eligible for assistance; WHEREAS, the Borrower and the WIFIA Lender entered into that certain WIFIA Master Agreement, dated as of [_____], 2023 (the “WIFIA Master Agreement”), pursuant to which the parties thereto have set forth certain common terms and conditions applicable to each WIFIA loan and project under the Master Program;
WHEREAS, the Borrower has submitted a WIFIA Loan Request, da ted [●] (the “Project WIFIA Loan Request ”), to the WIFIA Lender pursuant to the WIFIA Master Agreement and thereby requested that the WIFIA Lender make the WIFIA Loan (as defined below) in a principal amount not to exceed $[●] to be used to pay a portion of the Eligible Project Costs related to the Project (as defined below);
WHEREAS, as of the date hereof, the Administrator has approved WIFIA financial assistance for the Project to be provided in the form of the WIFIA Loan, subject to the terms and conditions contained herein and in the WIFIA Master Agreement; WHEREAS, based on the Project WIFIA Loan Request, the Application, the WIFIA Master Agreement and the representations, warranties and covenants set forth herein and therein, the WIFIA Lender proposes to make funding available to the Borrower through the purchase of the WIFIA Bond (as defined below) to be issued by the Borrower, upon the terms and conditions set forth herein and in the WIFIA Master Agreement;
WHEREAS, the Borrower agrees to repay any am ount due pursuant to this Agreement and the WIFIA Bond in accordance with the terms and provisions of this Agreement, the WIFIA Master Agreement and the WIFIA Bond; and
K-4
3734007.10 046357 CTR
WHEREAS, the WIFIA Lender has entered into this Agreement in reliance upon, among other things, the information and representations of the Borrower set forth in the Project WIFIA Loan Request, the Application, the WIFIA Master Agreement, and the supporting information provided by the Borrower.
NOW, THEREFORE, the premises being as stated ab ove, and for good and valuable consideration, the receipt and sufficiency of which are acknowledged to be adequate, and intending to be legally bound hereby, it is hereby mutually agreed by and between the Borrower and the WIFIA Lender as follows:
ARTICLE I
DEFINITIONS AND INTERPRETATION
Section 1. Def
initions.
Each capitalized term used in this Agreement (including in the recitals hereto) and not otherwise defined herein shall have the meaning assigned to such term in the WIFIA Master Agreement. Any term used in this Agreement (including in the recitals hereto) that is defined by reference to any other agreement shall continue to have the meaning specified in such agreement, whether or not such agreement remains in effect. In addition, as used in this Agreement (including in the recitals hereto), the following terms have the following meanings:
“Agreement” has the meaning provided in the preamble hereto. “Anticipated WIFIA Loan Disbursement Schedule ” m
eans the disbursement schedule
set forth in Exhibit A (WIFIA Debt Service), reflecting the anticipated disbursement of proceeds of the WIFIA Loan, as such schedule may be amended from time to time pursuant to Section 4 (Disbursement Conditions).
“Bond Amortization Schedule” m eans the bond amortization schedule reflected in the applicable column of Exhibit A ( WIFIA Debt Service ), as amended from time to time in accordance with Section 7 ( Outstanding WIFIA Bond Balance; Revisions to Bond Amortization Schedule) of the WIFIA Master Agreement.
“Capitalized Interest Period ” means the period from (and including) the First Disbursement Date to ( and including) the date that is six (6) months prior to [_____], subject to earlier termination as set forth in Section 8(a)(iii) ( Payment of WIFIA De bt Service) of the WIFIA Master Agreement.
“Debt Service Payment Commencement Date” means the earlier to occur of (a) [●] and (b) the Semi-Annual Payment Date on or immediately preceding the fifth (5 th) anniversary of the Substantial Completion Date ; provided that, if the Capitalized Interest Period ends pursuant to Section 9(c) (Payment of Principal and Interest – Capitalized Interest Period) of the WIFIA Master Agreement due to the occurrence of a System Event of Default or a Project E
vent of Default, the Debt Service Payment Commencement Date shall be the first Semi - Annual Payment Date immediately following the end of the Capitalized Interest Period.
K-5
3734007.10 046357 CTR
“Development Default Date” means [●].
“Final Maturity Date” means the earlier of (a) [●] (or such earlier date as is set forth in an updated Exhibit A (WIFIA Debt Service) pursuant to Section 7 (Outstanding WIFIA Bond Balance; Revisions to Bond Amortization Schedule ) of the WIFIA Master Agreement); and (b) the Semi-Annual Payment Date immediately preceding the date that is thirty -five (35) years following the Substantial Completion Date.
“Interest Only Period ” means the period commencing from (and including) the Debt Service Payment Commen cement Date and ending on [_____] (or on such earlier date as all amounts due or to become due to the WIFIA Lender hereunder have been irrevocably paid in full in cash).
“Project” means [ insert short description of project ][, as described in further detail in Schedule III (Project)].24
“Project Budget ” means the budget for the Project attached to this Agreement as Schedule I (Project Budget) showing a summary of Total Project Costs with a breakdown of all Eligible Project Costs and the estimated sources and uses of funds for the Project. “Project Schedule” means (a) the initial schedule or schedules on which the construction ti
metables for the Project are set forth, attached hereto as Schedule II (Project Schedule), and (b) any updates thereto included in the Construction Monitoring Report for the Project most recently submitted to the WIFIA Lender in accordance with Section 23(b) ( Project Oversight and Monitoring – Construction Monitoring Report) of the WIFIA Master Agreement. “Project WIFIA Loan Request” h as the meaning provided in the recitals hereto. “Projected Substantial Completion Date ” means [●], as such date may be adjusted in accordance with Section 23(b) ( Project Oversight and Monitoring – Construction Monitoring Report) of the WIFIA Master Agreement.
“WIFIA Bond ” m eans the Bond evidencing the Borrower’s obligation to repay the WIFIA Loan issued and delivered by the Borrower in substantially the form set forth in Exhibit A (Form of WIFIA Supplemental Indenture (including WIFIA Bond form)) to the WIFIA Master Agreement.
“WIFIA Loan” m eans the secured loan made by the WIFIA Lender to t he Borrower on the terms and conditions set forth herein, in the WIFIA Master Agreement and in the WIFIA Bond, pursuant to the Act, in a principal amount not to exceed $[ ●], to be used in respect of Eligible Project Costs with respect to the Project.
“WIFIA Loan Agreement Effective Date” means the date of this Agreement.
24 Note to Form: Schedule to be included i f the WIFIA Lender determines additional details describing the Project are necessary.
K-6
3734007.10 046357 CTR
“WIFIA Master Agreement” has the meaning provided in the recitals hereto. “WIFIA Suppl emental Indenture ” means that certain [ ______], entered into by and between the Borrower and the Trustee on [●], 20[●], authorizing, among other things, the execution and delivery of this Agreement, the issuance of the WIFIA Bond and certain related actions by the Borrower in connection with the issuance of the WIFIA Loan, in substantially the form of Exhibit A (Form of WIFIA Supplemental Indenture (including WIFIA Bond form)) to the WIFIA Master Agreement.
Section 2. Inte rpretation.
(a) Except as otherwise expressly provided herein, the rules of interpretation set forth in Section 2 of the WIFIA Master Agreement shall apply herein, mutatis mutandis , as if set out in this Agreement in full (and as if each reference therein to “this Agreement” were a reference to this Agreement, and each reference to any “WIFIA Loan” or any “WIFIA Bond” were a reference, respectively, to the WIFIA Loan or the WIFIA Bond as such terms are defined in this Agreement).
(b) This Agreement is one of the WIFIA Loan Agreements referenced in the WI
FIA Master Agreement.
ARTICLE II
THE WIFIA LOAN
Section 3. WI FIA Loan Amount.
The principal amount of the WIFIA Loan shall not exceed $[ ●]. WIFIA Loan proceeds available to be drawn shall be disbursed from time to time in accordance with Section 4 (Disbursement Conditions ) hereof and Section 12(c) ( Conditions Precedent – Conditions Precedent to All Disbursements) of the WIFIA Master Agreement.
Section 4. Dis bursement Conditions.
The WIFIA Loan shall be disbursed in accordance with Section 4 ( Disbursement Conditions) of the WIFIA Master Agreement.
Section 5. [Reser ved].
Section 6. Interest Rate.
The interest rate with respect to the Outstanding WIFIA Bond Balance for the WIFIA Loan shall be [●] and [●] hundredths percent ([●]%) per annum. 25 Interest will accrue and be
25 Note to Form : The WIFIA Interest Rate shall be calculated by adding one (1) basis point (0.01%) to the rate of securities of a similar maturity (based on the weighted -average life of the WIFIA Loan) as published, on (cont’d)
K-7
3734007.10 046357 CTR
computed on the Outstanding WIFIA Bond Ba lance from time to time pursuant to, and otherwise in accordance with, with Section 6 (Interest Rate) of the WIFIA Master Agreement.
Section 7. [Reserved].
Section 8. Payment of WIFIA Debt Service.
Payments of WIFIA Debt Service shall be made by the Borrower on each Semi -Annual Payment Date occurring on and after the Debt Service Payment Commencement Date as provided in Section 9(d) (Payment of Principal and Interest – Payment of WIFIA Debt Service) of the WIFIA Master Agreement.
Section 9. WIF IA Bond.
As evidence of the Borrower’s obligation to repay the WIFIA Loan, the Borrower shall issue and deliver to the WIFIA Lender, on or prior to the WIFIA Loan Agreement Effective Date, the WIFIA Bond substantially in the form set forth in Exhibit A ( Form of WIFIA Supplemental Indenture (including WIFIA Bond form)) to the Master Agreement, having a maximum principal amount of $[●].
Section 10. Prep ayment.
The Borrower may prepay the WIFIA Loan in accordance with Section 10(c) (Prepayment – Optional Prepayments) of the WIFIA Master Agreement.
Section 11. Fees and Expenses.
The Borrower shall pay to the WIFIA Lender , in each case pursuant to and in accordance with Section 30 (Fees and Expenses) of the WIFIA Master Agreement:
(a) a one-time Servicing Set-Up Fee equal to $[●];
(b) an annual Construction Period Servicing Fee equal to $[●] per annum; pr
ovided that the initial C onstruction Period Servicing Fee shall be in a pro- rated amount equal to $[●] in accordance with Section 3 0(a)(ii) ( Fees and Expenses ) of the WIFIA Master Agreement; and
(c) an Operating Period Servicing Fee equal to $[●] per annum; and (d
) any other applicable fees, costs, charges and expenses pursuant to, and o
therwise in accordance with, Section 30 (Fees and Expenses) of the WIFIA Master Agreement. ________________________
(cont’d from previous page)
the WIFIA Loan Agreement Effective Date, in the United States Treasury Bureau of the Fiscal Service’s daily rate table for State and Local Government Series (SLGS) securities.
K-8
3734007.10 046357 CTR
ARTICLE III
CONDITIONS PRECEDENT
Section 12. Condi tions Precedent.
(a) Conditions Precedent to Effectiveness . The effectiveness of this Agreement is subject to the satisfaction, or the WIFIA Lender’s written waiver, as determined by the WIFIA Lender in its sole discretion, of each of the conditions precedent to the effectiveness of this Agreement set forth in Section 12(b) (Conditions Pr ecedent – Conditions Precedent to Effectiveness of Each WIFIA Loan Agreement ) of the WIFIA Master Agreement (each of which is incorporated by reference herein, mutatis mutandis, as if set out in this Agreement in full and as if each reference therein to an y “Project,” any “WIFIA Loan,” any “WIFIA Bond,” or any “WIFIA Loan Agreement” were a reference, respectively, to the Project, the WIFIA Loan, the WIFIA Bond, or this Agreement (as such terms are defined in this Agreement)). (b) Conditions Precedent to Disbursemen
ts. Notwithstanding anything in this
Agreement to the contrary, the WIFIA Lender’s obligation to make any Disbursement of the WIFIA Loan to the Borrower (including the initial Disbursement hereunder) is subject to the satisfaction or the WIFIA Lender’ s written waiver, as determined by the WIFIA Lender in its sole discretion, of each of the conditions precedent to Disbursements set forth in Section 12(c) (Conditions Precedent – Conditions Precedent to All Disbursements) of the WIFIA Master Agreement (each of which is incorporated by reference herein, mutatis mutandis, as if set out in this Agreement in full and as if each reference therein to any “WIFIA Loan” or any “WIFIA Loan Agreement” were a reference, respectively, to the WIFIA Loan or this Agreement (as such terms are defined in this Agreement)).
ARTICLE IV
REP
RESENTATIONS AND WARRANTIES
Section 13. Rep resentations and Warranties of Borrower.
The representations and warranties set out in Section 13 (Representations and Warranties of Borrower) of the WIFIA Master Agreement shall be made on the WIFIA Loan Agreement Effective Date and as of each date on which any Disbursement of the WIFIA Loan is requested or made, except as otherwise expressly provided in Section 13 of the WIFIA Master Agreement.
Each such representation and warranty is incorporated by reference herein, mutatis mutandis, for the benefit of the WIFIA Lender as if set out in this Agreement in full (and as if each reference therein to “this Agreement” were a reference to this Agreement and as if each reference therein to (a) any “Project” or the “Master Program”, (b) any “WIFIA Loan” or (c) any “WIFIA Bond” were a reference, respectively, to (i) the Project, (ii) the WIFIA Loan or (iii) the WIFIA Bond (as such terms are defined in this Agreement)). The Borrower acknowledges that it makes such representations and warranties with the intention of inducing the WIFIA Lender to enter into this Agreement and the other WIFIA Loan Documents an d to advance the WIFIA Loan to the
K-9
3734007.10 046357 CTR
Borrower, and that the WIFIA Lender has entered into this Agreement and the other WIFIA Loan Documents on the basis of, and in full reliance on, each such representation and warranty.
Section 14. Rep resentations and Warranties of WIFIA Lender.
The representations and warranties set out in Section 14 (Representations and Warranties of WIFIA Lender ) of the WIFIA Master Agreement shall be made on the WIFIA Loan Agreement Effective Date, mutatis mutandis , for the benefit of the Borrow er as if set out in this Agreement in full (and as if each reference therein to any “WIFIA Loan” were a reference to the WIFIA Loan (as such term is defined in this Agreement)).
ARTICLE V
COVE
NANTS
Section 15. Cove nants.
The Borrower covenants and agrees, until the date the WIFIA Loan and all of the obligations of the Borrower under the WIFIA Loan Documents with respect to the WIFIA Loan or the Project (other than contingent indemnity obligations) have been irrevocably paid in full in immediately available funds and the WIFIA Lender no longer has any commitment to make Disbursements under this Agreement to the Borrower, unless the WIFIA Lender waives compliance in writing, to comply with each of the covenants set forth in the WIFIA Master Agreement, including Section 15 ( Affirmative Covenants ), Section 16 ( Negative Covenants ), Section 22 (System Financial Planning and Reporting) and Section 23 ( Project Oversight and Monitoring) of the WIFIA Master Agreement, which covenants are incorporated by reference herein mutatis mutandis as if fully set forth herein (and as if each reference therein to “this Agreement” were a reference to this Agreement and as if each reference therein to (a) any “Project” or the “Master Program,” (b) any “WIFIA Loan” or (c) any “WIFIA Bond” were a reference, respectively, to (i) the Project, (ii) the WIFIA Loan or (iii) the WIFIA Bond (as such terms are defined in this Agreement)).
Section 16. [Reser
ved].
Section 17. [Reserved].
ARTICLE VI
EVENTS OF DEFAULT
Section 18. Eve nts of Default and Remedies.
(a) Each System Event of Default set out in Section 19 ( System Events of Default and Remedies ) of the WIFIA Master Agreement and each Project Event of Default set out in Section 20 ( Project Events of Default and Remedies ) shall constitute a System Event of Default or Project Event of Default, as applicable, under this Agreement, except as otherwise
K-10
3734007.10 046357 CTR
expressly provided in Section 19 (Sys tem Events of Default and Remedies) or Section 20 (Project Events of Default and Remedies) of the WIFIA Master Agreement. (b) Upon the occurrence and during the continuation of any System Eve nt of Default or Project Event of Default hereunder, the WIFIA Lender shall have each of the rights and remedies to which it is entitled as provided in and with the same effect as described in Section 19 ( System Events of Default an d Remedies) and Section 20 ( Project Events of Default and Remedies) of the WIFIA Master Agreement.
ARTICLE VII
MI
SCELLANEOUS
Section 19. Gove rning Law.
This Agreement shall be governed by the federal laws of the United States of America, if and to the extent such federal laws are applicable, and the internal laws of the State, if and to the extent such federal laws are not applicable.
Section 20. Ef
fectiveness.
This Agreement shall be effective on the WIFIA Loan Agreement Effective Date.
Section 21. Te rmination.
This Agreement shall terminate upon the irrevocable payment in full in immediately available funds by the Borrower of the Outstanding WIFIA Bond Balance, together with all accrued interest, fees and expenses with respect thereto; provided that the indemnification requirements of Section 17 ( Indemnification) of the WIFIA Master Agreement, as incorporated herein, the reporting and record keeping requirements of Section 21 ( Accounting and Audit Procedures; Inspections; Reports and Records ) of the WIFIA Master Agreement, as incorporated herein, and the payment requirements of Section 11 ( Fees and Expenses ) shall survive the termination of this Agreement as provided in such sections.
Section 22. Mis cellaneous.
Sections 17 ( Indemnification), 18 ( Sale of WIFIA Loan ), 24 ( Disclaimer of Warranty ), 25 ( No P ersonal Recourse ), 26 ( No Third Party Rights ), 27 ( Borrower’s Authorized Representative), 28 ( WIFIA Lender’s Authorized Representative), 29 ( Servicer), 31 (Amendments and Waivers ), 33 (Severability), 34 (Successors and Assigns ), 35 (Remedies Not Exclusive), 36 ( Delay or Omission Not Waiver ), 37 (Counterparts ), 38 ( Notices; Payment Instructions) and 41 (Integration) of the WIFIA Master Agreement shall be incorporated in this Agreement, mutatis mutandis, as if set out in this Agreement in full (and as if each reference therein to “this Agreement” were a reference to this Agreement and as if each reference therein to (a) any “Project” or the “Master Program”, (b) any “WIFIA Loan” or (c) any “WIFIA Bond” were a reference, respectively, to (i) the Project, (ii) the WIFIA Loan or (iii) the WIFIA Bond (as such terms are defined in this Agreement)).
K-11
3734007.10 046357 CTR
[The remainder of this page intentionally left blank; signature pages immediately follow.]
K-12
3734007.10 046357 CTR
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their respective officers thereunto duly authorized as of the date first written above.
PUBLIC UTILITIES COMMISSION OF THE
CITY AND COUNTY OF SAN FRANCISCO,
by its Authorized Representative
By:
Name:
Title:
[Signature Page to SFPUC Wastewater Capital Plan Resilience Program – Project [●] – WIFIA Loan Agreement]
K-13
3734007.10 046357 CTR
UNITED STATES ENVIRONMENTAL
PROTECTION AGENCY, acting by and through
the Administrator of the Environmental Protection
Agency
By:
Name: Michael S. Regan
Title: Administrator
[Signature Page to SFPUC Wastewater Capital Plan Resilience Program – Project [●] – WIFIA Loan Agreement]
K-14
3734007.10 046357 CTR
SCHEDULE I
PROJECT BUDGET
SOURCES OF FUNDS AMOUNT ($ USD) PERCENTAGE (%)
[___]
Total Sources of Funds
USES OF FUNDS AMOUNT ($ USD) PERCENTAGE (%)
[___]
Total Uses of Funds
Total Eligible Project Costs
Total Project Costs
K-15
3734007.10 046357 CTR
SCHEDULE II
PROJECT SCHEDULE
[To be provided by Borrower]
K-16
3734007.10 046357 CTR
[SCHEDULE III]26
[PROJECT]
[Insert description of Project]
26 Note to Form: Include only if applicable.
K-17
3734007.10 046357 CTR
SCHEDULE 13(f)
LITIGATION27
No. Parties Date Initiated Description Venue
27 Note to Form: Indicate “none” if inapplicable.
K-18
3734007.10 046357 CTR
SCHEDULE 13(n)
EXISTING PRINCIPAL PROJECT CONTRACTS28
Contract Date Parties Description
28 To be completed by Borrower.
K-19
3734007.10 046357 CTR
SCHEDULE 13(r)
ENVIRONMENTAL MATTERS29
29 Note to Form: Indicate “none” if inapplicable.
K-20
3734007.10 046357 CTR
EXHIBIT A
WIFIA DEBT SERVICE30
[See attached]
30 Note to Form: WIFIA Lender to provide on the WIFIA Loan Agreement Effective Date.
K-21
3734007.10 046357 CTR
EXHIBIT B
FORM OF CERTIFICATE OF TRUSTEE
PUBLIC UTILITIES COMMISSION OF THE
CITY AND COUNTY OF SAN FRANCISCO
WIFIA Bond,
[___] Project
(WIFIA [_____])
The undersigned, [_______] (the “Trustee”), by its duly appointed, qualified and acting authorized officer, certifies with respect to the above referenced bond (the “WIFIA Bond”) dated as of [______] , as follows (capitalized terms used in this Certificate which are not otherwise defined shall have the meanings given to such terms in the Indenture (as defined below)):
1. That the Trustee is a national banking association duly organized and validly existing and in good standing under the laws of the United States of America.
2. All approvals, consents and orders of any governmental authority or agency having jurisdiction over the Trustee in the matter which would constitute a condition precedent to the performance by the Trustee of its duties and obligations under the documents pertaining to the issuance of the WIFIA Bond have been obtained by the Trustee and are in full force and effect.
3. That the documents pertaining to the issuance of the WIFIA B ond to which the Trustee is a party were executed by the Trustee and the WIFIA Bond was authenticated on behalf of the Trustee by one or more of the persons whose names and offices appear on Annex One attached hereto and made part hereof, that each person was at the time of the execution of such documents and the authentication of the WIFIA Bond and now is duly appointed, qualified and acting incumbent of his or her respective office, that each such person was authorized to execute such documents and to authenticate the WIFIA Bond, and that the signature appearing after the name of each such person is a true and correct specimen of that person’s genuine signature.
4. That the undersigned is authorized to act as Trustee and accept the trusts c
onveyed to it under the Indenture ( “Trusts”), has accepted the Trusts so conveyed and in so accepting the Trusts and so acting is not in violation of any provision of its articles of association or bylaws, any law, regulation or court or administrative order or, to its knowledge, any agreement or other instrument to which it is a party or by which it may be bound.
5. That attached to this Certificate as Annex On e is a full, true and correct copy of excerpts from resolutions of the bylaws of the Trustee that evidence the Trustee’ s trust powers and the authority of the officers referred to above to act on behalf of the Trustee; and that the se excerpts and other applicable documents were in effect on the date or dates such officers acted
K-22
3734007.10 046357 CTR
and remain in full force and effect today, and such excerpts and documents have not been amended since the date of the last amendment thereto shown on any such copy, as applicable.
6. That receipt is acknowledged of all instruments, certifications and other documents or confirmations required to be received by the Trustee pursuant to that certain Indenture, dated as of January 1, 2003, by and between the Public Utilities Commission of the City and County of San Francisco (the “Borrower”) and the Trustee ( as amended, the “Indenture”).
7. That receipt is also acknowledged of that certain WIFIA Master Agreement, dated as of [_____], 2023 (the “WIFIA Master Agreement”) and WIFIA Loan Agreement, dated as of [_______] (the “WIFIA Loan Agreement ”), between the Borrower and the United States Environmental Protection Agency, acting by and through the Administrator.
8. That the Trustee also accepts its appointment and agrees to perform the duties and responsibilities of Trustee for and in respect of the WIFIA Bond as set forth in the Indenture, the WIFIA Master Agreement and the WIFIA Loan Agreement, including from time to time redeeming all or a portion of the WIFIA Bond as provided in Article IV of the Indenture. In accepting such duties and responsibilities, the Trustee shall be entitled to all of the privileges, immunities, rights and protections set forth in Article VIII of the Indenture.
9. That all funds and a ccounts for the payment of the WIFIA Bond pursuant to the Indenture have been established as provided in the Indenture.
This certificate may be delivered by the delivery of signed signature pages by electronic means, facsimile transmission, or by e-mail with a PDF copy attached, and any printed or copied versions of any signature page so delivered shall have the same force and effect as an originally signed version of such signature page. Signatures of this certificate made by electronic means shall be accompani ed by an email, contemporaneous or otherwise, confirming the use of such means.
[SIGNATURE PAGE FOLLOWS]
K-23
3734007.10 046357 CTR
Dated: [______]
[________________]
By:
Authorized Officer
K-24
3734007.10 046357 CTR
ANNEX ONE TO EXHIBIT B
EXCERPTS OF BYLAWS AND INCUMBENCY CERTIFICATE
EPA/HAWKINS DRAFT 2/28/23
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WIFIA LOAN AGREEMENT
for up to $369,335,021
with
PUBLIC UTILITIES COMMISSION OF THE CITY AND COUNTY OF SAN
FRANCISCO
for the
SFPUC WASTEWATER CAPITAL PLAN RESILIENCE PROGRAM – PROJECT 1 (WIFIA ID – 21112CA)
Dated as of [●], 2023
i
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS AND INTERPRETATION
Section 1. Definitions................................................................................................................2 Section 2. Interpretation. ...........................................................................................................4
ARTICLE II
THE WIFIA LOAN
Section 3. WIFIA Loan Amount. ..............................................................................................4 Section 4. Disbursement Conditions. ........................................................................................4 Section 5. [Reserved]. ...............................................................................................................4 Section 6. Interest Rate. ............................................................................................................4 Section 7. [Reserved]. ...............................................................................................................4 Section 8. Payment of Principal and Interest. ...........................................................................5 Section 9. WIFIA Bond. ...........................................................................................................5 Section 10. Prepayment. .............................................................................................................5 Section 11. Fees and Expenses. ..................................................................................................5
ARTICLE III
CONDITIONS PRECEDENT
Section 12. Conditions Precedent. ..............................................................................................5
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 13. Representations and Warranties of Borrower. .........................................................6 Section 14. Representations and Warranties of WIFIA Lender. ................................................6
ARTICLE V
COVENANTS
Section 15. Covenants. ................................................................................................................7 Section 16. [Reserved]. ...............................................................................................................7 Section 17. [Reserved]. ...............................................................................................................7
ARTICLE VI
EVENTS OF DEFAULT
Section 18. Events of Default and Remedies. .............................................................................7
ii
ARTICLE VII
MISCELLANEOUS
Section 19. Governing Law. .......................................................................................................8 Section 20. Effectiveness. ...........................................................................................................8 Section 21. Termination. .............................................................................................................8 Section 22. Miscellaneous. .........................................................................................................8
SCHEDULES
SCHEDULE I – Project Budget
SCHEDULE II – Project Schedule
SCHEDULE III – Project
SCHEDULE 13(f) – Litigation
SCHEDULE 13(n) – Existing Principal Project Contracts
SCHEDULE 13(r) – Environmental Matters
EXHIBITS
EXHIBIT A – WIFIA Debt Service
EXHIBIT B – Form of Certificate of Trustee
1 WIFIA LOAN AGREEMENT
THIS WIFIA LOAN AGREEM ENT (this “ Agreement”), dated as of [●], 20 23, is by and between the PUBLIC UTILITIES COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO, a commission duly organized and existing under and pursuant to the Charter of the City and County of San Francisco and the laws of the State of California, with an address at 525 Golden Gate Avenue, San Francisco, California 94102 (the “Borrower”) and the UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, an agency of the United States of America, acting by and through the Administrator of the Environmental Protection Agency, with an address at 1200 Pennsylvania Avenue NW, Washington, DC 20460 (the “WIFIA Lender”).
RECITALS:
WHEREAS, the Congress of the United States of America enacted the Water Infrastructure Finance and Innovation Act, § 5021 et seq. of Public Law 113-121, as amended, and as may be further amended from time to time, which is codified as 33 U.S.C. §§ 3901-3915; WHEREAS, the Act authorizes the WIFIA Lender to enter into agreements to provide financial assistance with one or more eligible entities to make secured loans with appropriate security features to finance a portion of the eligible costs of projects eligible for assistance; WHEREAS, the Borrower and the WIFIA Lender entered into that certain WIFIA Master Agreement, dated as of [_____], 2023 (the “WIFIA Master Agreement”), pursuant to which the parties thereto have set forth certain common terms and conditions applicable to each WIFIA loan and project under the Master Program;
WHEREAS, pursuant to the WIFIA Master Agreement, the Borrower has requested that the WIFIA Lender make the WIFIA Loan (as defined below) in a principal amount not to exceed $369,335,021 to be used to pay a portion of the Eligible Project Costs related to the Project (as defined below);
WHEREAS, as of the date hereof, the Administrator has approved WIFIA financial assistance for the Project to be provided in the form of the WIFIA Loan, subject to the terms and conditions contained herein and in the WIFIA Master Agreement; WHEREAS, based on the Project WIFIA Loan Request, t he Application, the WIFIA Master Agreement and the representations, warranties and covenants set forth herein and therein, the WIFIA Lender proposes to make funding available to the Borrower through the purchase of the WIFIA Bond (as defined below) to be issued by the Borrower, upon the terms and conditions set forth herein and in the WIFIA Master Agreement;
WHEREAS, the Borrower agrees to repay any amount due pursuant to this Agreement and the WIFIA Bond in accordance with the terms and provisions of this Agreement, the WIFIA Master Agreement and the WIFIA Bond; and
WHEREAS, the WIFIA Lender has entered into this Agreement in reliance upon, among other things, the information and representations of the Borrower set forth in the Project WIFIA
2 Loan Request, the Application, the WIFIA Master Agreement, and the supporting information provided by the Borrower.
NOW, THEREFORE, the premises being as stated above, and for good and valuable consideration, the receipt and sufficiency of which are acknowledged to be a dequate, and intending to be legally bound hereby, it is hereby mutually agreed by and between the Borrower and the WIFIA Lender as follows:
ARTICLE I
DEFINITIONS AND INTERPRETATION
Section 1. Definitions.
Each capitalized term used in this Agreement (including in the recitals hereto) and not otherwise defined herein shall have the meaning assigned to such term in the WIFIA Master Agreement. Any term used in this Agreement (including in the recitals hereto) that is defined by reference to any other agreement shall continue to have the meaning specified in such agreement, whether or not such agreement remains in effect. In addition, as used in this Agreement (including in the recitals hereto), the following terms have the following meanings:
“Agreement” has the meaning provided in the preamble hereto. “Anticipated WIFIA Loan Disbursement Schedule ” means the disbursement schedule set forth in Exhibit A (WIFIA Debt Service), reflecting the anticipated disbursement of proceeds of the WIFIA Loan, as such schedule may be amended from time to time pursuant to Section 4 (Disbursement Conditions).
“Bond Amortization Schedule” means the bond amortization schedule reflected in the applicable column of Exhibit A ( WIFIA Debt Service ), as amend ed from time to time in accordance with Section 7 ( Outstanding WIFIA Bond Balance; Revisions to Bond Amortization Schedule) of the WIFIA Master Agreement.
“Capitalized Interest Period ” means the period from (and including) the First Disbursement Date to ( and including) the date that is six (6) months prior to April 1, 2032, subject to earlier termination as set forth in Section 8(a)(iii) ( Payment of WIFIA Debt Service) of the WIFIA Master Agreement.
“Debt Service Payment Commencement Date” means the earlier to occur of (a) April 1, 2032 and (b) the Semi -Annual Payment Date on or immediately preceding the fifth (5 th) anniversary of the Substantial Completion Date; provided that, if the Capitalized Interest Period ends pursuant to Section 9(c) (Payment of Principal and Interest – Capitalized Interest Period) of the WIFIA Master Agreement due to the occurrence of a System Event of Default or a Project Event of Default, the Debt Service Payment Commencement Date shall be the first Semi-Annual Payment Date immediately following the end of the Capitalized Interest Period. “Development Default Date” means May 8, 2030.
3 “Final Maturity Date” means the earlier of (a) October 1, 2061 (or such earlier date as is set forth in an updated Exhibit A ( WIFIA Debt Service ) pursu ant to Section 7 ( Outstanding WIFIA Bond Balance; Revisions to Bond Amortization Schedule ) of the WIFIA Master Agreement); and (b) the Semi-Annual Payment Date immediately preceding the date that is thirty-five (35) years following the Substantial Completion Date. “Interest Only Period ” means the period commencing from (and including) the Debt Service Payment Commencement Date and ending on September 30, 2041 (or on such earlier date as all amounts due or to become due to the WIFIA Lender hereunder have been irrevocably paid in full in cash).
“Project” means Project 1 of the SFPUC Wastewater Capital Plan Resilience Program, located in San Francisco, California, as described in further detail in Schedule III (Project), as may be amended from time to time with the WIFIA Lender’s approval. “Project Budget ” means the budget for the Project attached to this Agreement as Schedule I (Project Budget) showing a summary of Total Project Costs with a breakdown of all Eligible Project Costs and the estimated sources and uses of funds for the Project. “Project WIFIA Loan Request” has the meaning provided in the recitals hereto. “Project Schedule” means (a) the initial schedule or schedules on which the construction timetables for the Project are set forth, attached hereto as Schedule II (Project Schedule), and (b) any updates thereto included in the Construction Monitoring Report for the Project most recently submitted to the WIFIA Lender in accordance with Section 23(b) ( Project Oversight and Monitoring – Construction Monitoring Report) of the WIFIA Master Agreement. “Projected Substantial Completion Date ” means May 8 , 2028, as such date may be adjusted in accordance with Section 23(b) ( Project Oversight and Monitoring – Construction Monitoring Report) of the WIFIA Master Agreement.
“WIFIA Bond ” means the Bond evidencing the Borrower’s obligation to repay the WIFIA Loan issued and delivered by the Borrower in substantially the form set forth in Exhibit A (Form of WIFIA Supplemental Indenture (including WIFIA Bond form)) to the WIFIA Master Agreement.
“WIFIA Loan” means the secured loan made by the WIFIA Lender to the Borrower on the terms and conditions set forth herein, in the WIFIA Master Agreement and in the WIFIA Bond, pursuant to the Act, in a principal amount not to exc eed $ 369,335,021, to be used in respect of Eligible Project Costs with respect to the Project. “WIFIA Loan Agreement Effective Date” means the date of this Agreement. “WIFIA Master Agreement” has the meaning provided in the recitals hereto. “WIFIA Supplemental Indenture ” means that certain Sixteenth Supplemental Indenture, entered into by and between the Borrower and the Trustee on [●], 2023, authorizing, among other things, the execution and delivery of this Agreement, the issuance of the WIFIA
4 Bond and certain related actions by the Borrower in connection with the issuance of the WIFIA Loan, in substantially the form of Exhibit A ( Form of WIFIA Supplemental Indenture (including WIFIA Bond form)) to the WIFIA Master Agreement.
Section 2. Interpretation.
(a) Except as otherwise expressly provided herein, the rules of interpretation set forth in Section 2 of the WIFIA Master Agreement shall apply herein, mutatis mutandis, as if set out in this Agreement in full (and as if each reference therein to “this Agreement” were a reference to this Agreement, and each reference to any “WIFIA Loan” or any “WIFIA Bond” were a reference, respectively, to the WIFIA Loan or the WIFIA Bond as such terms are defined in this Agreement). (b) This Agreement is one of the WIFIA Loan Agreements referenced in the WIFIA Master Agreement.
ARTICLE II
THE WIFIA LOAN
Section 3. WIFIA Loan Amount.
The principal amount of the WIFIA Loan shall not exceed $ 369,335,021. WIFIA Loan proceeds available to be drawn shall be disbursed from time to time in accordance with Section 4 (Disbursement Conditions ) hereof and Section 12(c) ( Conditions Precedent – Conditions Precedent to All Disbursements) of the WIFIA Master Agreement.
Section 4. Disbursement Conditions.
The WIFIA Loan shall be disbursed in accordance with Section 4 ( Disbursement Conditions) of the WIFIA Master Agreement.
Section 5. [Reserved].
Section 6. Interest Rate.
The interest rate with respect to the Outstanding WIFIA Bond Balance for the WIFIA Loan shall be [●] and [●] hundredths percent ([●]%) per annum. 1 Interest will accr ue and be computed on the Outstanding WIFIA Bond Balance from time to time pursuant to, and otherwise in accordance with, with Section 6 (Interest Rate) of the WIFIA Master Agreement.
Section 7. [Reserved].
1 Note to Borrower: The WIFIA Interest Rate shall be calculated by adding one (1) basis point (0.01%) to the rate of securities of a similar maturity (based on the weighted -average life of the WIFIA Loan) as published, on the WIFIA Loan Agreement Effective Date, in the United States Treasury Bureau of the Fiscal Service’s daily rate table for State and Local Government Series (SLGS) securities.
5 Section 8. Payment of Principal and Interest.
Payments of WIFIA D ebt Service shall be made by the Borrower on each Semi -Annual Payment Date occurring on and after the Debt Service Payment Commencement Date as provided in Section 9(d) (Payment of Principal and Interest – Payment of WIFIA Debt Service) of the WIFIA Master Agreement.
Section 9. WIFIA Bond.
As evidence of the Borrower’s obligation to repay the WIFIA Loan, the Borrower shall issue and deliver to the WIFIA Lender, on or prior to the WIFIA Loan Agreement Effective Date, the WIFIA Bond substantially in the form set fo rth in Exhibit A ( Form of WIFIA Supplemental Indenture (including WIFIA Bond form)) to the Master Agreement, having a maximum principal amount of $369,335,021.
Section 10. Prepayment.
The Borrower may prepay the WIFIA Loan in accordance with Section 10(c) (Prepayment – Optional Prepayments) of the WIFIA Master Agreement.
Section 11. Fees and Expenses.
The Borrower shall pay to the WIFIA Lender, in each case pursuant to and in accordance with Section 30 (Fees and Expenses) of the WIFIA Master Agreement:
(a) a one-time Servicing Set-Up Fee equal to $23,100;
(b) an annual Construction Period Servicing Fee equal to $23,100 per annum; provided that the initial Construction Period Servicing Fee shall be in a pro -rated amount equal to $9,620 2 in accordance with Section 3 0(a)(ii) ( Fees and Expenses ) of the WIFIA Master Agreement; and
(c) an Operating Period Servicing Fee equal to $8,670 per annum; and (d) any other applicable fees, costs, charges and expenses pursuant to, and otherwise in accordance with, Section 30 (Fees and Expenses) of the WIFIA Master Agreement.
ARTICLE III
CONDITIONS PRECEDENT
Section 12. Conditions Precedent.
(a) Conditions Precedent to Effectiveness. The effectiveness of this Agreement is subject to the satisfaction, or the WIFIA Lender’s written waiver, as determined by
2 Note to Borrower: Pro-rated amount assumes a WLA closing in April 2023.
6 the WIFIA Lender in its sole discretion, of each of the conditions precedent to the effectiveness of this Agreement set forth in Section 12(b) (Conditions Precedent – Conditions Precedent to Effectiveness of Each WIFIA Loan Agreement ) of the WIF IA Master Agreement (each of which is incorporated by reference herein, mutatis mutandis, as if set out in this Agreement in full and as if each reference therein to any “Project,” any “WIFIA Loan,” any “WIFIA Bond,” or any “WIFIA Loan Agreement” were a reference, respectively, to the Project, the WIFIA Loan, the WIFIA Bond, or this Agreement (as such terms are defined in this Agreement)). (b) Conditions Precedent to Disbursements. Notwithstanding anything in this Agreement to the contrary, the WIFIA L ender’s obligation to make any Disbursement of the WIFIA Loan to the Borrower (including the initial Disbursement hereunder) is subject to the satisfaction or the WIFIA Lender’s written waiver, as determined by the WIFIA Lender in its sole discretion, of each of the conditions precedent to Disbursements set forth in Section 12(c) (Conditions Precedent – Conditions Precedent to All Disbursements) of the WIFIA Master Agreement (each of which is incorporated by reference herein, mutatis mutandis, as if set out in this Agreement in full and as if each reference therein to any “WIFIA Loan” or any “WIFIA Loan Agreement” were a reference, respectively, to the WIFIA Loan or this Agreement (as such terms are defined in this Agreement)).
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 13. Representations and Warranties of Borrower.
The representations and warranties set out in Section 13 (Representations and Warranties of Borrower) of the WIFIA Master Agreement shall be made on the WIFIA Loan Agreement Effective Date and as of each date on which any Disbursement of the WIFIA Loan is requested or made, except as otherwise expressly provided in Section 13 of the WIFIA Master Agreement.
Each such representation and warranty is incorporated by reference herein, mutatis mutandis, for the benefit of the WIFIA Lender as if set out in this Agreement in full (and as if each reference therein to “this Agreement” were a reference to this Agreement and as if each reference therein to (a) any “Project”, (b) any “WIFIA Loan” or (c) any “WIFIA Bond” were a reference, respectively, to (i) the Project, (ii) the WIFIA Loan or (iii) the WIFIA Bond (as suc h terms are defined in this Agreement)). The Borrower acknowledges that it makes such representations and warranties with the intention of inducing the WIFIA Lender to enter into this Agreement and the other WIFIA Loan Documents and to advance the WIFIA Loan to the Borrower, and that the WIFIA Lender has entered into this Agreement and the other WIFIA Loan Documents on the basis of, and in full reliance on, each such representation and warranty.
Section 14. Representations and Warranties of WIFIA Lender.
The representations and warranties set out in Section 14 (Representations and Warranties of WIFIA Lender ) of the WIFIA Master Agreement shall be made on the WIFIA Loan Agreement Effective Date, mutatis mutandis, for the benefit of the Borrower as if set out in this Agreement in full (and as if each reference therein to any “WIFIA Loan” were a reference to the WIFIA Loan (as such term is defined in this Agreement)).
7 ARTICLE V
COVENANTS
Section 15. Covenants.
The Borrower covenants and agrees, until the date the WIFIA Loan and all of the obligations of the Borrower under the WIFIA Loan Documents with respect to the WIFIA Loan or the Project (other than contingent indemnity obligations) have been irrevocably paid in full in immediately available funds and the WIFIA Lender no longer has any commitment to make Disbursements under this Agreement to the Borrower, unless the WIFIA Lender waives compliance in writing, to comply with each of the covenants set forth in the WIFIA Master Agreement, including Section 15 ( Affirmative Covenants ), Section 16 ( Negative Covenants ), Section 22 (System Financial Planning and Reporting) and Section 23 ( Project Oversight and Monitoring) of the WIFIA Master Agreement, which covenants are incorporated by reference herein mutatis mutandis as if fully set forth herein (and as if each reference therein to “this Agreement” were a reference to this Agreement and as if each reference therein to (a) any “Project”, (b) any “WIFIA Loan” or (c) any “WIFIA Bond” were a reference, respectively, to (i) the Project, (ii) the WIFIA Loan or (iii) the WIFIA Bond (as such terms are defined in this Agreement)).
Section 16. [Reserved].
Section 17. [Reserved].
ARTICLE VI
EVENTS OF DEFAULT
Section 18. Events of Default and Remedies.
(a) Each System Event of Default set out in Section 19 ( System Events of Default and Remedies ) of the WIFIA Master Agreement and each Project Event of Default set out in Section 20 ( Project Events of Default and Remedies ) of the WIFIA Master Agreement shall constitute a System Event of Default or Project Event of Default, as applicable, under this Agreement, except as otherwise expressly provided in Section 19 (System Events of Default and Remedies) or Section 20 ( Project Events of Default and Remedies ) of the WIFIA Master Agreement.
(b) Upon the occurrence and during the continuation of any System Event of Default or Project Event of Default hereunder, the WIFIA Lender shall have each of the rights and remedies to which it is entitled as provided in and with the same effect as described in Section 19 ( System Events of Default and Remedies ) and Section 20 ( Project Events of Default and Remedies) of the WIFIA Master Agreement.
8 ARTICLE VII
MISCELLANEOUS
Section 19. Governing Law.
This Agreement shall be governed by the federal laws of the United States of America, if and to the extent such federal laws are applicable, and the internal laws of the State, if and to the extent such federal laws are not applicable.
Section 20. Effectiveness.
This Agreement shall be effective on the WIFIA Loan Agreement Effective Date.
Section 21. Termination.
This Agreemen t shall terminate upon the irrevocable payment in full in immediately available funds by the Borrower of the Outstanding WIFIA Bond Balance, together with all accrued interest, fees and expenses with respect thereto; provided that the indemnification requirements of Section 17 ( Indemnification) of the WIFIA Master Agreement, as incorporated herein, the reporting and record keeping requirements of Section 21 ( Accounting and Audit Procedures; Inspections; Reports and Records ) of the WIFIA Master Agreement, as incorporated herein, and the payment requirements of Section 11 ( Fees and Expenses ) shall survive the termination of this Agreement as provided in such sections.
Section 22. Miscellaneous.
Sections 17 (Indemnification), 18 (Sale of WIFIA Loan), 24 (Disclaimer of Warranty), 25 (No Personal Recourse ), 26 ( No Third Party Rights ), 27 ( Borrower’s Authorized Representative), 28 (WIFIA Lender’s Authorized Representative), 29 (Servicer), 31 (Amendments and Waivers), 33 (Severability), 34 (Successors and Assigns), 35 (Remedies Not Exclusive), 36 (Delay or Omission Not Waiver ), 37 (Counterparts), 38 (Notices; Payment Instructions ) and 41 (Integration) of the WIFIA Master Agreement shall be incorporated in this Agreement, mutatis mutandis, as if set out in this Agreement in fu ll (and as if each reference therein to “this Agreement” were a reference to this Agreement and as if each reference therein to (a) any “Project” or the “Master Program”, (b) any “WIFIA Loan” or (c) any “WIFIA Bond” were a reference, respectively, to (i) t he Project, (ii) the WIFIA Loan or (iii) the WIFIA Bond (as such terms are defined in this Agreement)).
[The remainder of this page intentionally left blank; signature pages immediately follow.]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their respective officers thereunto duly authorized as of the date first written above.
PUBLIC UTILITIES COMMISSION OF THE
CITY AND COUNTY OF SAN FRANCISCO,
by its Authorized Representative
By:
Name:
Title:
[Signature Page to SFPUC Wastewater Capital Plan Resilience Program – Project 1 – WIFIA Loan Agreement]
UNITED STATES ENVIRONMENTAL
PROTECTION AGENCY, acting by and through
the Administrator of the Environmental Protection
Agency
By:
Name: Michael S. Regan
Title: Administrator
[Signature Page to SFPUC Wastewater Capital Plan Resilience Program – Project 1 – WIFIA Loan Agreement]
I-1
SCHEDULE I
PROJECT BUDGET
SOURCES OF FUNDS AMOUNT ($ USD) PERCENTAGE (%)
WIFIA Loan $369,335,021.00 48.99%
Revenue Bonds $373,431,173.00 49.54%
Borrower Cash $ 4,593,172.00 0.61%
[Revenue Bond Project and Fund
Earnings]
$ 6,498,689.00 0.86%
Total Sources of Funds $753,858,055.00 100%
USES OF FUNDS AMOUNT ($ USD) PERCENTAGE (%)
Construction $550,650,588.00 73.04%
Design $ 46,251,257.00 6.14%
Planning $ 7,387,224.00 0.98%
Other Capital Costs $ 78,113,900.00 10.36%
Project Management Costs $ 25,813,752.00 3.42%
Financing Costs $ 45,641,334.00 6.05%
Total Uses of Funds $753,858,055.00 100%
Total Eligible Project Costs $753,858,055.00 100%
Total Project Costs $753,858,055.00 100%
II-1
SCHEDULE II
PROJECT SCHEDULE
Projected Substantial Completion Date: May 8, 2028
Project Element Design Start Design End Construction
Start
Construction
End
Yosemite Creek Daylighting 6/1/2022 11/1/2023 7/9/2024 5/8/2028 Wawona Area Stormwater
Improvement
9/18/2017 10/30/2020 7/26/2021 5/27/2024
Folsom Area Stormwater
Improvement
[___] [___] 6/20/2023 12/31/2026
Westside Pump Station
Reliability Improvements
2/2/2016 8/10/2020 4/1/2021 6/27/2024
North Shore Pump Station
Wet Improvements
6/1/2015 4/30/2019 4/19/2021 6/28/2024
New Treasure Island
Wastewater Treatment Plant
3/25/2020 11/7/2023 4/18/2023 11/21/2025
*The Borrower antic ipates that the Project will achieve Substantial Completion by the Projected Substantial Completion Date, which is indicated as “[Construction Final Completion]” 3 in the related Principal Project Contracts.
3 Note to Borrower: Please review and confirm the bracketed term is correct.
III-1
SCHEDULE III
PROJECT
The Project is the first project under the SFPUC Wastewater Capital Plan Resilience Program, located in San Francisco, California. The Project consists of the following components that are designed to repair, rehabilitate and replace critical assets, and to upgrade the system to enhance reliability, resiliency, and sustainability:
1. Yosemite Creek Daylighting: green infrastructure project component that will capture and clean stormwater, preventing it from overwhelming the Borrower’s sewer system;
2. Wawona Area Stormwater Improvements and Vicente Street Water Main Replacement:
stormwater improvements, including cut and cover installation of sewer, trenchless sewer construction, and pavement resurfacing;
3. Folsom Area Stormwater Improvements (Phase 2): stormwater improvements, includ ing development and construction of a new stormwater tunnel and related upstream components;
4. Westside Pump Station Reliability Improvements: pump station upgrades, including construction of a new electrical building and related improvements, to ensure eff icient and reliable transport of combined flows to the Borrower’s treatment facilities;
5. North Shore Pump Station: pump station upgrades, including replacement of dry weather pumps, to ensure efficient and reliable transport of combined flows to the Borrower’s treatment facilities; and
6. Treasure Island Wastewater Treatment Plant: construction of a new wastewater treatment plant to provide reliable service for the Treasure Island residents and meet recycled water demands on the island.
13(f)-1
SCHEDULE 13(f)
LITIGATION4
No. Parties Date Initiated Description Venue
4 To be completed by Borrower. Indicate “none” if inapplicable.
13(n)-1
SCHEDULE 13(n)
EXISTING PRINCIPAL PROJECT CONTRACTS5
Contract Date Parties Description
North Shore Pump
Station Wet Weather
Improvements,
Contract No. WW-
685R
March 3, 2021 Borrower and
Western Water
Constructors, Inc.
Construction of
the North Shore
Pump Station Wet
Weather
Improvements
Wawona Area
Stormwater
Improvement and
Vicente Street Water
Main Replacement,
Contract No. WW-
711
April 13, 2021 Borrower and K.J.
Woods
Construction Inc.
Construction of
the Wawona Area
Stormwater
Improvement and
Vicente Street
Water Main
Replacement
Westside Pump
Station Reliability
Improvements,
Contract No. WW-
645R
February 23, 2021 Borrower and
Anvil Builders,
Inc.
Construction of
the Westside
Pump Station
Reliability
Improvements
5 Borrower to review and confirm.
13(r)-1
SCHEDULE 13(r)
ENVIRONMENTAL MATTERS6
6 To be completed by Borrower. Indicate “none” if inapplicable.
A-1
EXHIBIT A
WIFIA DEBT SERVICE7
[See attached]
7 WIFIA Lender to provide on the WIFIA Loan Agreement Effective Date.
B-1
EXHIBIT B
FORM OF CERTIFICATE OF TRUSTEE
PUBLIC UTILITIES COMMISSION OF THE
CITY AND COUNTY OF SAN FRANCISCO
WIFIA Bond,
SFPUC Wastewater Capital Plan Resilience Program – Project 1 (WIFIA ID – 21112CA)
The undersigned, [_______] (the “Trustee”), by its duly appointed, qualified and acting authorized officer, certifies with respect to the above referenced bond (the “WIFIA Bond”) dated as of [______] , as follows (capitalized terms used in this Certificate which are not otherwise defined shall have the meanings given to such terms in the Indenture (as defined below)):
1. That the Trustee is a national banking association duly organized and validly existing and in good standing under the laws of the United States of America.
2. All approvals, consents and orders of any governmental authority or agency having jurisdiction over the Trustee in the matter which would constitute a condition prece dent to the performance by the Trustee of its duties and obligations under the documents pertaining to the issuance of the WIFIA Bond have been obtained by the Trustee and are in full force and effect.
3. That the documents pertaining to the issuance of the WIFIA Bond to which the Trustee is a party were executed by the Trustee and the WIFIA Bond was authenticated on behalf of the Trustee by one or more of the persons whose names and offices appear on Annex One attached hereto and made part hereof, that each person was at the time of the execution of such documents and the authentication of the WIFIA Bond and now is duly appointed, qualified and acting incumbent of his or her respective office, that each such person was authorized to execute such documents and to authenticate the WIFIA Bond, and that the signature appearing after the name of each such person is a true and correct specimen of that person’s genuine signature.
4. That the undersigned is authorized to act as Trustee and accept the trusts conveyed to it under the Indenture ( “Trusts”), has accepted the Trusts so conveyed and in so accepting the Trusts and so acting is not in violation of any provision of its articles of association or bylaws, any law, regulation or court or administrative order or, to its knowledge, any agreement or other instrument to which it is a party or by which it may be bound.
5. That attached to this Certificate as Annex One is a full, true and correct copy of excerpts from resolutions of the bylaws of the Trustee that evidence the Trustee’ s trust powers and the authority of the officers referred to above to act on behalf of the Trustee; and that these excerpts and other applicable documents were in effect on the date or dates such officers acted and remain in full force and effect today , and such excerpts and documents have not been amended since the date of the last amendment thereto shown on any such copy, as applicable.
B-2
6. That receipt is acknowledged of all instruments, certifications and other documents or confirmations required to be received by the Trustee pursuant to that certain Indenture, dated as of January 1, 2003, by and between the Public Utilities Commission of the City and County of San Francisco (the “Borrower”) and the Trustee ( as amended, the “Indenture”).
7. That receipt is also acknowledged of that certain WIFIA Master Agreement, dated as of [_____] (the “ WIFIA Master Agreement ”) and W IFIA Loan Agreement, dated as of [_______] (the “WIFIA Loan Agreement ”), between the Borrower and the United States Environmental Protection Agency, acting by and through the Administrator.
8. That the Trustee also accepts its appointment and agrees to perform the duties and responsibilities of Trustee for and in respect of the WIFIA Bond as set forth in the Indenture, the WIFIA Master Agreement and the WIFIA Loan Agreement, including from time to time redeeming all or a portion of the WIFIA Bond as provided in Article IV of the Indenture. In accepting such duties and responsibilities, the Trustee shall be entitled to all of the privileges, immunities, rights and protections set forth in Article VIII of the Indenture.
9. That all funds and accounts for the payment of the WIFIA Bond pursuant to the Indenture have been established as provided in the Indenture.
This certificate may be delivered by the delivery of signed signature pages by electronic means, facsimile transmission, or by e-mail with a PDF copy attached, and any printed or copied versions of any signature page so delivered shall have the same force and effect as an originally signed version of such signature page. Signatures of this certificate made by electronic means shall be accompanied by an email, contemporaneous or otherwise, confirming the use of such means.
[SIGNATURE PAGE FOLLOWS]
B-3
Dated: [______]
[________________]
By:
Authorized Officer
B-4
ANNEX ONE TO EXHIBIT B
EXCERPTS OF BYLAWS AND INCUMBENCY CERTIFICATE
NRF Draft
3/16/2023
133883210.6
SIXTEENTH SUPPLEMENTAL INDENTURE
by and between
PUBLIC UTILITIES COMMISSION OF THE CITY
AND COUNTY OF SAN FRANCISCO
and
U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION,
as Trustee
AUTHORIZING THE ISSUANCE OF NOT TO EXCEED
$369,335,021
Public Utilities Commission of the City and County of San Francisco Wastewater Revenue Bonds
(SFPUC Wastewater Capital Plan Resilience Program – Project 1)
Dated as of ________, 2023
Table of Contents
Page
133883210.6
ARTICLE LXX 3
Section 70.01. Definitions.................................................................................................. 3 ARTICLE LXXI WIFIA PROJECT 1 BOND PROVISIONS ...................................................... 7 Section 71.01. Authorization and Terms of the WIFIA Project 1 Bond............................ 7 Section 71.02. Form of Bond; Execution and Authentication; Transferability ................. 9 Section 71.03. Conditions to Each Disbursement and Issuance (or Increase) of the WIFIA Project 1 Bond; Application of Proceeds ................................................ 10 Section 71.04. Establishment and Application of the WIFIA Project 1 Project Account ................................................................................................................ 12 Section 71.05. Terms of Redemption .............................................................................. 12 Section 71.06. No Defeasance ......................................................................................... 14 Section 71.07. No Reserve ............................................................................................... 14 Section 71.08. Notices; Payment Instructions ................................................................. 14 Section 71.09. Commission Representations ................................................................... 15 Section 71.10. No Amendment without Consent of the WIFIA Lender ......................... 15 ARTICLE LXXII CITY REQUIREMENTS; EXECUTION...................................................... 15 Section 72.01. Local Business Enterprise Utilization; Liquidated Damages. ................. 15 Section 72.02. Nondiscrimination; Penalties. .................................................................. 16 Section 72.03. MacBride Principles—Northern Ireland .................................................. 17 Section 72.04. Tropical Hardwood and Virgin Redwood Ban ........................................ 17 Section 72.05. Drug-Free Workplace Policy ................................................................... 18 Section 72.06. Compliance with Americans with Disabilities Act .................................. 18 Section 72.07. Sunshine Ordinance ................................................................................. 18 Section 72.08. Limitations on Contributions ................................................................... 18 Section 72.09. Requiring Minimum Compensation for Covered Employees ................. 19 Section 72.10. Requiring Health Benefits for Covered Employees ................................. 20 Section 72.11. Prohibition on Political Activity with City Funds ................................... 22 Section 72.12. Conflict of Interest ................................................................................... 22 Section 72.13. Earned Income Credit (EIC) Forms ......................................................... 22 Section 72.14. Preservative-treated Wood Containing Arsenic. .................................... 23 Section 72.15. Nondisclosure of Private Information ...................................................... 23 Section 72.16. Proprietary or Confidential Information of City ...................................... 23 Section 72.17. Compliance with Laws ............................................................................ 23 Table of Contents
(continued)
Page
133883210.6
- ii -
Section 72.18. Works for Hire ......................................................................................... 23 Section 72.19. Resource Conservation ............................................................................ 24 Section 72.20. Public Access to Meetings and Records .................................................. 24 Section 72.21. Guaranteed Maximum Costs.................................................................... 24 Section 72.22. Submitting False Claims; Monetary Penalties ......................................... 24 Section 72.23. Agreement Made in California; Venue .................................................... 25 Section 72.24. Ownership of Results ............................................................................... 25 Section 72.25. Audit and Inspection of Records.............................................................. 25 Section 72.26. Subcontracting ......................................................................................... 25 Section 72.27. Assignment .............................................................................................. 25 Section 72.28. Non-Waiver of Rights .............................................................................. 26 Section 72.29. City a Third Party Beneficiary ................................................................. 26 Section 72.30. Food Service Waste Reduction Requirements ...................................... 26 Section 72.31. Graffiti Removal. ..................................................................................... 26 Section 72.32. Counterparts; Electronic Delivery.. ......................................................... 27
EXHIBIT A FORM OF WIFIA PROJECT 1 BOND (including Minimum Sinking Fund Account Payment Schedule) ...................................................................... A-1
133883210.6
SIXTEENTH SUPPLEMENTAL INDENTURE
THIS SIX TEENTH SUPPLEMENTAL INDENTURE , dated as of ________, 2023 (this “ Sixteenth Supplemental Indenture ”), by and between the PUBLIC UTILITIES COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO (the “Commission”), a commission duly constituted under the Charter (the “Charter”) of the City and County of San Francisco (the “City”), and U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, a national banking association duly organized and existing under and by virtue of the laws of the United States of America, as trustee (the “Trustee”);
WITNESSETH:
WHEREAS, this Sixteenth Supplemental Indenture is supplemental to the Indenture, dated as of January 1, 2003 (the “Original Indenture”), between the Commission and the Trustee, as amended by a First Amendment to Indenture dated as of May 1, 2010 (the “First Amendment”), and as supplemented by a First Supplemental Indenture, dated as of May 1, 2010, the Second Supplemental Indenture, dated as of January 1, 2013, the Third Supplemental Indenture, dated as of February 1, 2013, the Fourth Supplemental Indenture, dated as of May 1, 2016, the Fifth Supplemental Indenture, dated as of September 14, 2017, the Sixth Supplemental Indenture, dated as of July 1, 2018, the Seventh Supplemental Indenture dated as of August 1, 2018, the Eighth Supplemental Indenture, dated as of August 1, 2018, the Ninth Supplemental Indenture, dated as of July 27, 2018, the Tenth Supplemental Indenture dated as of June 12, 2020, the Eleventh Supplemental Indenture, dated as of June 12, 2020, the Twelfth Supplemental Indenture, dated as of November 1, 2021, the Thirteenth Supplemental Indenture, dated as of November 1, 2021, the Fourteenth Supplemental Indenture, dated as of July 1, 2022, and the Fifteenth Supplemental Indenture, dated as of April 1, 2023 (the Original Indenture and such aforementioned supplements, together with such other supplements or amendments as may be executed from time to time in accordance with the Original Indenture, the “Indenture”); WHEREAS, pursuant to Section 8B.124 of the City Charter (“Proposition E”), the Commission has the authority to issue additional revenue bonds for the purpose of reconstructing, replacing, expanding, repairing or improving water facilities or clean water facilities, or combinations of water and clean water facilities under the jurisdiction of the Commission, subject to certain conditions, including, among others, the adoption of an ordinance by a two -thirds vote of the Board of Supervisors of the City, under such terms and conditions as the Commission may authorize;
WHEREAS, pursuant to Proposition E the Board of Supervisors on June 12, 2012, adopted Ordinance No. 115-12, which was signed by the Mayor on June 18, 2012, authorizing issuance of not to exceed $522,810,000 of Bonds or other forms of indebtedness; WHEREAS, pursuant to Proposition E the Board of Supervisors on June 24, 2014, adopted Ordinance No. 107-14, which was signed by the Mayor on July 2, 2014, authorizing issuance of not to exceed $819,035,941 of Bonds or other forms of indebtedness;
133883210.6
- 2 -
WHEREAS, pursuant to Proposition E the Board of Supervisors on June 14, 2016, adopted Ordinance No. 111-16, which was signed by the Mayor on June 24, 2016, authorizing issuance of not to exceed $1,112,601,280 of Bonds or other forms of indebtedness; WHEREAS, pursuant to Proposition E the Board of Supervisors on June 12, 2018, adopted Ordinance No. 144-18, which was signed by the Mayor on June 20, 2018, authorizing issuance of not to exceed $987,414,494 of Bonds, loans or other forms of indebtedness; WHEREAS, pursuant to Proposition E the Board of Supervisors on September 29, 2020, adopted Ordinance No. 173-20, which was signed by the Mayor on October 1, 2020, authorizing issuance of not to exceed $349,919,252 of Bonds, loans or other forms of indebtedness; WHEREAS, pursuant to Proposition E the Board of Supervisors on July 27, 2021 adopted Ordinance No. 128-21, which was signed by the Mayor on August 4, 2021, amending Ordinance No. 173-20 and authorizing issuance of not to exceed $563,430,430 of Bonds, loans or other forms of indebtedness;
WHEREAS, pursuant to Proposition E the Board of Supervisors on June 14, 2022 adopted Ordinance No. 110-22, which was signed by the Mayor on June 24, 2022 (together with Ordinance No. 115-12, Ordinance No. 107- 14, Ordinance No. 111- 16, Ordinance No. 144-18, Ordinance No. 173-20 and Ordinance No. 128-21, the “Ordinances”), authorizing issuance of not to exceed $704,198,901 of Bonds or other forms of indebtedness;
WHEREAS, the Indenture provides that the Commission may, subject to the requirements of the Law (as defined in the Indenture) and the Indenture, issue one or more other series of Bonds from time to time pursuant to a supplemental indenture; WHEREAS, the Commission is seeking to finance a portion of the costs of the certain projects listed under the Wastewater Enterprise’s capital improvement plan consisting of projects that are designed to repair, rehabilitate, and replace critical assets that have a significant risk of failure, and to upgrade the system to enhance reliability, resiliency, and sustainability (the “Wastewater Capital Plan Resilience Program”, as generally categorized in Schedule I of the WIFIA Master Agreement, defined below);
WHEREAS, the Commission has determined to enter into a WIFIA Master Agreement, dated as of ________, 2023 related to the Wastewater Capital Plan Resilience Program (the “WIFIA Master Agreement”), by and between the United States Environmental Protection Agency (the “EPA”), acting through the Administrator of the EPA, pursuant to which the EPA proposes to make funding available from time to time to the Commission for a project under the Wastewater Capital Plan Resilience Program through the execution of a WIFIA loan agreement, a WIFIA term sheet and the purchase of a WIFIA bond, issued pursuant to a supplemental indenture by the Commission, in each case with respect to such project, upon the terms and conditions set forth in the WIFIA Master Agreement;
WHEREAS, pursuant to the Ordinances and resolutions of the Commission, the Commission has determined to issue an additional Series of Bonds under this Sixteenth Supplemental Indenture designated “Public Utilities Commission of the City and County of San
133883210.6
- 3 -
Francisco Wastewater Revenue Bonds ( SFPUC Wastewater Capital Plan Resilience Program – Project 1)” in an aggregate principal amount not to exceed $369,335,021 (excluding the Accreted Interest, as provided herein) (the “ WIFIA Project 1 Bond”), to, among other things, finance or refinance Eligible Project Costs (as defined herein) related to the first project under the Wastewater Capital Plan Resilience Program located in the City (as more fully described in the WIFIA Project 1 Loan Agreement, the “Project”);
WHEREAS, the Commission has determined to enter into a WIFIA Loan Agreement , dated as of _______, 2023 (the “WIFIA Project 1 Loan Agreement” and, together with the WIFIA Master Agreement, the “WIFIA Project 1 Loan Documents”), by and between the EPA , acting through the Administrator of the EPA, pursuant to which the EPA, subject to the terms and conditions of this Sixteenth Supplemental Indenture and the WIFIA Project 1 Loan Documents, will agree to purchase the WIFIA Project 1 Bond, in one or more installments, from disbursements made from time to time under the WIFIA Project 1 Loan Agreement; WHEREAS, the WIFIA Project 1 Bond will be issued by the Commission under the Indenture as a separate Series of Bonds payable on a parity with all other Outstanding Bonds issued thereunder;
WHEREAS, all acts, conditions and things required by law to exist, to have happened and to have been performed precedent to and in connection with the execution and the entering into of this Sixteenth Supplemental Indenture do exist, have happened and have been performed in regular and due time, form and manner as required by law, and the parties hereto are now duly authorized to execute and enter into this Sixteenth Supplemental Indenture; NOW, THEREFORE, the parties hereto agree, as follows:
ARTICLE LXX
Section 70.01. Definitions. The terms defined in this section shall, for all purposes of this Sixteenth Supplemental Indenture, have the meanings herein specified, to be equally applicable to both the singular and the plural forms of any of the terms herein defined. Terms defined in the Indenture and not otherwise defined herein shall have the meanings specified therein.
Accreted Interest
“Accreted Interest” means, for all purposes of this Sixteenth Supplemental Indenture, the interest that is accrued on the WIFIA Project 1 Bond and added to the Outstanding WIFIA Project 1 Bond Balance on each Semi -Annual Payment Date occurring during the Capitalized Interest Period in accordance with the WIFIA Loan Documents and Section 71.01(g).
Business Day
“Business Day” means, for all purposes of this Sixteenth Supplemental Indenture, any day other than a Saturday, a Sunday or a day on which offices of the United States Government or the State are authorized to be closed or on which commercial banks are authorized or required by law, regulation or executive order to be closed in New York, New York or San Francisco, California
133883210.6
- 4 -
Capitalized Interest Period
“Capitalized Interest Period” means, for all purposes of this Sixteenth Supplemental Indenture the period from (and including) the first Disbursement Date to (and including) the date that is six (6) months prior to April 1, 2032, unless earlier terminated by written notice from the WIFIA Lender in accordance with the WIFIA Project 1 Loan Documents and Section 71.01(g).
Debt Service Payment Commencement Date
“Debt Service Payment Commencement Date” means, for all purposes of this Sixteenth Supplemental Indenture the earlier to occur of (a) April 1, 2032 and (b) the Semi-Annual Payment Date on or immediately preceding the fifth (5 th) anniversary of the Substantial Completion Date (as defined in the WIFIA Project 1 Loan Documents) ; provided that, if the Capita lized Interest Period ends pursuant to the WIFIA Project 1 Loan Documents due to the occurrence of a WIFIA System Event of Default or a Project 1 Project Event of Default, the Debt Service Payment Commencement Date shall be the first Semi-Annual Payment Date immediately following the end of the Capitalized Interest Period.
Disbursement Date
“Disbursement Date” means, for all purposes of this Sixteenth Supplemental Indenture, any date on which the WIFIA Lender purchases all or a portion of the WIFIA Project 1 Bond with the proceeds of a disbursement provided under the WIFIA Project 1 Loan Documents in compliance with Section 71.03.
Eligible Project Costs
“Eligible Project Costs” shall have the meaning set forth as “Eligible Project Costs” in the WIFIA Project 1 Loan Documents.
Interest Fund
“Interest Fund” means the fund of that name established pursuant to Section 5.02 of the Indenture for the purposes specified in Section 5.03 of the Indenture.
Interest Only Period
“Interest Only Period” means, for all purposes of this Sixteenth Supplemental Indenture, the period commencing from (and including) the Debt Service Payment Commencement Date and ending on September 30, 2041 (or on such earlier date as all amounts due or to become due to the WIFIA Lender under the WIFIA Project 1 Bond have been irrevocably paid in full in cash).
Minimum Sinking Fund Account Payment Schedule
“Minimum Sinking Fund Account Payment Schedule” means, for all purposes of this Sixteenth Supplemental Indenture, the schedule of required Minimum Sinking Fund Account Payments required to be made on each Semi -Annual Payment Date as set forth as Exhibit A-2 to the WIFIA Project 1 Bond. The schedule will be initi ally calculated on each Disbursement Date
133883210.6
- 5 -
in accordance with Section 71.01 and shall be subject to adjustment from time to time as provided in Section 71.05(c).
Net Loss Proceeds
“Net Loss Proceeds” for all purposes of this Sixteenth Supplemental Indenture, shall have the meaning set forth in the WIFIA Project 1 Loan Documents.
Outstanding WIFIA Project 1 Bond Balance
“Outstanding WIFIA Project 1 Bond Balance” means, as of the date of calculation, the sum of (a) the aggregate principal amount of the WIFIA Project 1 Bond purchased and sold on each Disbursement Date to the WIFIA Lender (i.e., the sum of the funds received by the Trustee from the WIFIA Lender on each such Disbursement Date), plus (b) the Accreted Interest added to the principal balance of the WIFIA Project 1 Bond on each Semi -Annual Payment Date occurring during the Capitalized Interest Period, which shall be the sum of (i) the interest accrued since the last Semi-Annual Payment Date on the Outstanding WIFIA Project 1 Bond Balance as of such Semi-Annual Payment Date, and (ii) if any Disbursement Date has occurred since the last Semi - Annual Payment Date, the interest accrued on the amount of the proceeds of each disbursement since the applicable Disbursement Date, minus (c) the aggregate principal amount of the WIFIA Project 1 Bond paid or redeemed by the Commission on each Semi-Annual Payment Date or any redemption date, if earlier.
Principal Fund
“Principal Fund” means the fund of that name established pursuant to Section 5.02 of the Indenture for the purposes specified in Section 5.04 of the Indenture.
Principal Payment Date
“Principal Payment Date” for all purposes of this Sixteenth Supplemental Indenture shall have the meaning set forth in Section 71.01(h).
Project
“Project” for all purposes of this Sixteenth Supplemental Indenture shall have the meaning set forth in the preambles of this Sixteenth Supplemental Indenture.
Semi-Annual Payment Date
“Semi-Annual Payment Date” means each April 1 and October 1, commencing on the first such date following the first Disbursement Date.
133883210.6
- 6 -
WIFIA Lender
“WIFIA Lender” means the registered owner of the WIFIA Project 1 Bond, being initially, the United States Environmental Protection Agency (the “EPA”), an agency of the United States of America, acting by and through the Administrator of the EPA, and, if the conditions to transfer of the WIFIA Project 1 Bond set forth in Section 71.02(c) hereof are satisfied, any registered assign.
WIFIA Lender’s Authorized Representative
“WIFIA Lender’s Authorized Representative” shall have the meaning set forth in the WIFIA Project 1 Loan Documents.
WIFIA Master Agreement
“WIFIA Master Agreement” shall have the meaning set forth in the Preambles hereto.
WIFIA Payment Default
“WIFIA Payment Default” shall mean a Payment Default as defined in the WIFIA Project 1 Loan Documents.
WIFIA Project 1 Bond
“WIFIA Project 1 Bond” means, collectively, the Public Utilities Commission of the City and County of San Francisco Wastewater Revenue Bonds ( SFPUC Wastewater Capital Plan Resilience Program – Project 1 ) issued pursuant to the terms of this Sixteenth Supplemental Indenture.
WIFIA Project 1 Bond Default Rate
“WIFIA Project 1 Bond Default Rate” means an interest rate equal to the sum of the (a) WIFIA Project 1 Bond Interest Rate plus (b) 200 basis points.
WIFIA Project 1 Bond Final Maturity Date
“WIFIA Project 1 Bond Final Maturity Date” means the earlier to occur of (a) October 1, 2061 (or such earlier date as is set forth in a revised M inimum Sinking Fund Account Payment Schedule delivered to the Trustee pursuant to Section 71.05(c)); and the Semi-Annual Payment Date immediately preceding the date that is thirty-five years following the Substantial Completion Date (as defined in the WIFIA Project 1 Loan Documents).
WIFIA Project 1 Bond Interest Rate
“WIFIA Project 1 Bond Interest Rate” means rate of ___% per annum.
133883210.6
- 7 -
WIFIA Project 1 Loan Agreement
“WIFIA Project 1 Loan Agreement” shall have the meaning set forth in the Preambles hereto.
WIFIA Project 1 Loan Documents
“WIFIA Project 1 Loan Documents” shall have the meaning set forth in the Preambles hereto.
WIFIA Project 1 Project Account
“WIFIA Project 1 Project Account” means the account by that name established within the Capital Project Fund pursuant to Section 71.04.
WIFIA Project 1 Project Event of Default
“WIFIA Project 1 Project Event of Default ” shall mean a Project Event of Default as defined in the WIFIA Project 1 Loan Documents.
WIFIA Project 1 Sinking Fund Account
“WIFIA Project 1 Sinking Fund Account ” means the account by that name established within the Principal Fund pursuant to Section 71.01(j).
WIFIA System Event of Default
“WIFIA System Event of Default” shall mean a System Event of Default as defined in the WIFIA Project 1 Loan Documents.
ARTICLE LXXI
WIFIA Project 1 BOND PROVISIONS
Section 71.01. Authorization and Terms of the WIFIA Project 1 Bond. (a) A Series of Bonds is hereby created, and such Bonds are designated as the “Public Utilities Commission of the City and County of San Francisco Wastewater Revenue Bonds (SFPUC Wastewater Capital Plan Resilience Program – Project 1),” which shall be a Series of Clean Water Revenue Bonds issued under the Indenture. The aggregate initial principal amount of the WIFIA Project 1 Bond that may be issued to the WIFIA Lender under this Sixteenth Supplemental Indenture shall not exceed $369,335,021 (excluding the Accreted Interest, as provided herein, the “Maximum Initial Principal Amount”). (b) The WIFIA Project 1 Bond shall be initially issued as a single, fully registered Bond without coupons, registered in the name of the WIFIA Lender, in an aggregate principal amount not to exceed the Maximum Initial Principal Amo unt. The WIFIA Project 1 Bond may be issued in any denomination representing a multiple of $1.
133883210.6
- 8 -
(c) The WIFIA Project 1 Bond shall constitute a Capital Appreciation Bond during the Capitalized Interest Period, and thereafter shall automatically convert to a C urrent Interest Bond and Term Bond.
(d) The WIFIA Project 1 Bond will accrue interest on the Outstanding WIFIA Project 1 Bond Balance, from (and including) the first Disbursement Date, at the WIFIA Project 1 Bond Interest Rate (unless the WIFIA Project 1 Bond Default Rate is in effect, as hereinafter provided). Interest will accrue and be computed on the Outstanding WIFIA Project 1 Bond Balance from time to time on the basis of a 360- day year of twelve (12) thirty (30) day months, and will be compounded semi-annually on each Semi-Annual Payment Date occurring during the Capitalized Interest Period; provided that, in the event of any WIFIA Payment Default or any WIFIA Project 1 Project Event of Default , the WIFIA Project 1 Bond shall bear interest on the Outstanding WIFIA Project 1 Bond Balance at the WIFIA Project 1 Bond Default Rate, (a) in the case of any WIFIA Payment Default, from (and including) its due date to (but excluding) the date of any payment so due, and (b) in the case of any WIFIA Project 1 Project Event of Default, from (and including) the date of such occurrence until (and excluding) the date such WIFIA Project 1 Project Event of Default has been cured in accordance with the terms of the WIFIA Project 1 Loan Documents. The WIFIA Lender shall give notice to the Trustee and the Commission of any WIFIA Payment Default or WIFIA Project 1 Project Event of Default, which notice shall specify the effective date of the WIFIA Project 1 Bond Default Rate and shall be deemed conclusive by the Trustee absent manifest error. No failure or delay on the part of the WIFIA Lender in providing such notice, nor any defect in such notice shall affect in any manner the Commission’s obligations hereunder or under the WIFIA Project 1 Bond.
(e) Within thirty (30) days following each Disbursement Date, each Semi - Annual Payment Date, and each redemption date, the WIFIA Lender shall make a notation on the WIFIA Project 1 Bond of the Outstanding WIFIA Project 1 Bond Balance as of such Disbursement Date, Semi-Annual Payment Date or redemption date (as the case may be) and shall give written notice to the Commission and the Trustee stating the Outstanding WIFIA Project 1 Bond Balance as of such date, which statement and notation thereof shall be deemed conclusive absent manifest error; provided, however, that no failure to make such notation or any delay in giving such notice or in making such notation shall affect any of the obligations of the Commission hereunder or under the WIFIA Project 1 Bond. To avoid any ambiguity, the notation made by the WIFIA Lender of the Outstanding WIFIA Project 1 Bond Balance during the Capitalized Interest Period shall reflect the Accreted Value of the WIFIA Project 1 Bond as of the relevant Semi -Annual Payment Date.
(f) The WIFIA Project 1 Bond shall mature on the WIFIA Project 1 Bond Final Maturity Date, subject to earlier redemption as provided herein. (g) No payment of the principal of or interest on the WIFIA Project 1 Bond will be required to be made by the Commission during the Capitalized Interest Period, and during the Capitalized Interest Period interest will accrue on the Outstanding WIFIA Project 1 Bond Balance and will compound and be added to the Outstanding WIFIA Project 1 Bond Balance on each Semi- Annual Payment Date. Notwithstanding the foregoing, the Capitalized Interest Period shall end immediately upon written notification to the Commission and the Trustee by the WIFIA Lender in accordance with the WIFIA Project 1 Loan Documents that a WIFIA System Event of Default
133883210.6
- 9 -
or a WIFIA Project 1 Project Event of Default has occurred, in which case the Capitalized Interest Period shall cease and interest on the WIFIA Project 1 Bond (accrued since the last Semi-Annual Payment Date) shall be payable on the next Semi -Annual Payment Date following such termination and notification by the WIFIA Lender.
(h) Commencing on the Debt Service Payment Commencement Date and on each successive Semi -Annual Payment Date through the end of the Interest Only Period, the Commission will pay interest accrued on the Outstanding WIFIA Project 1 Bond Balance through (but not including) such Semi -Annual Payment Date. Commencing on the first Semi -Annual Payment Date following the end of the Interest Only Period, the Commission will pay interest on the Outstanding WIFIA Project 1 Bond Balance together with the Minimum Sinking Fund Account Payment due on each such Semi -Annual Payment Date (each of such Semi -Annual Payments Dates being referred to as a “Principal Payment Date”) in accordance with the Minimum Sinking Fund Account Payment Schedule established pursuant to Section 71.05(c). (i) The principal of, redemption price, and interest on the WIFIA Project 1 Bond shall be payable by wire transfer in immediately available funds in US Dollars in accordance with the payment instructions provided by the WIFIA Lender pursuant to Section 71.08 and no presentation of the WIFIA Project 1 Bond shall be required for any such payment, except that the final payment of the WIFIA Project 1 Bond shall be made upon or following presentation of the WIFIA Project 1 Bond for cancellation at the corporate trust office of the Trustee. (j) In accordance with Section 5.03 and Section 5.04 of the Indenture, the Commission shall deposit with the Trustee, on or before five Business Days prior to each Semi - Annual Payment Date the amount of interest and principal (or Minimum Sinking Fund Account Payment) required to be paid on the WIFIA Project 1 Bond. Upon receipt, the Trustee shall deposit such amounts into the Interest Fund and into the WIFIA Project 1 Sinking Fund Account of the Principal Fund (which WIFIA Project 1 Sinking Fund Account the Commission hereby instructs the Trustee to create and maintain). On each Semi-Annual Payment Date, the Trustee shall remit such payment of interest and principal to the WIFIA Lender in accordance with Section 5.03 and Section 5.04 of the Indenture and Section 71.08; provided that, if any such date is not a Business Day, payment shall be made on the next Business Day following such date. (k) Notwithstanding anything herein to the contrary, the Outstanding WIFIA Project 1 Bond Balance and any accrued interest thereon shall be due and payable in full on the WIFIA Project 1 Bond Final Maturity Date, unless required to be paid earlier due to acceleration or otherwise.
Section 71.02. Form of Bond; Execution and Authentication; Transferability. (a) The WIFIA Project 1 Bond and the Trustee’s certificates of authentication and registration and the form of assignment to appear thereon shall be in substantially the form set forth as Exhibit A to this Sixteenth Supplemental Indenture, with necessary or appropriate variations, omissions and insertions as permitted or required by this Sixteenth Supplemental Indenture.
133883210.6
- 10 -
(b) At any time on or after the date of execution of this Sixteenth Supplemental Indenture and the WIFIA Project 1 Loan Documents, the Commission may execute and, upon a Written Request of the Commission, the Trustee shall authenticate and deliver WIFIA Project 1 Bond to the WIFIA Lender.
(c) The WIFIA Project 1 Bond is transferable by the registered owner hereof in person or by his attorney duly authorized in writing, at the principal corporate trust office of the Trustee in San Francisco, California, but only in the manner and upon payment of the charges provided in the Indenture, upon surrender and cancellation of the WIFIA Project 1 Bond and upon presentation to the Trustee of a Written Certificate from the Commission confirming that the transfer complies with the terms of the WIFIA Project 1 Loan Documents, upon which the Trustee shall authenticate and deliver a new WIFIA Project 1 Bond or Bonds of the same series in authorized denominations, and in an aggregate principal amount equal to the Outstanding WIFIA Project 1 Bond Balance of the WIFIA Project 1 Bond so tr ansferred. If less than the entire Outstanding WIFIA Project 1 Bond Balance of the WIFIA Project 1 Bond is so transferred, the Trustee shall authenticate and deliver a separate WIFIA Project 1 Bond or Bonds of the same series to each of the transferor and transferee, reflecting the Outstanding WIFIA Project 1 Bond Balance on each such Bond and the revised Minimum Sinking Fund Account Payments applicable to such Bond. The provisions set forth in this section shall apply to all subsequent transfers following the initial transfer.
Section 71.03. Conditions to Each Disbursement and Issuance (or Increase) of the WIFIA Project 1 Bond; Application of Proceeds. On each Disbursement Date, the outstanding principal amount of the WIFIA Project 1 Bond shall be increased, and the WIFIA Project 1 Bond shall be deemed purchased and delivered to the WIFIA Lender in an amount equal to the purchase price received by the Trustee from the WIFIA Lender, provided that the Commission has filed with the Trustee, with copies to the WIFIA Lender, the following:
(a) The certificates required by the provisions of Section 3.08 of the Indenture; (b) A Certificate of an Authorized Officer (i) stating the principal amount of the WIFIA Project 1 Bond to be deemed purchased, issued and delivered on such date; and (ii) certifying (A) that no Event of Default shall have occurred and be continuing under the Indenture and no event shall have occurred which, but for the passage of time or the giving of noti ce would constitute an Event of Default under the Indenture and (B) all other conditions precedent to the issuance of the WIFIA Project 1 Bond in such principal amount have been satisfied; (c) An amended Exhibit A-2 to the WIFIA Project 1 Bond, approved by the WIFIA Lender, showing the Minimum Sinking Fund Account Payments required to be paid on the WIFIA Project 1 Bond (as increased on such Disbursement Date) on each Principal Payment Date, as required and calculated pursuant to Section 71.05(c); and (d) An Opinion of Counsel substantially to the following effect:
133883210.6
- 11 -
1. The execution and delivery of the Sixteenth Supplemental Indenture is in compliance with the requirements of the Indenture;
2. Upon receipt by the Trustee of a portion of the purchase price of the WIFIA Project 1 Bond on the Disbursement Date, the WIFIA Project 1 Bond, delivered to the WIFIA Lender in connection with the execution of the WIFIA Project 1 Loan Documents, in the principal amount deemed purchased by the WIFIA Lender as of such Disbursement Date, including any amount purchased on any prior Disbursement Date and any Accreted Interest thereon, will have been duly authorized, executed and delivered by, and will constitute the valid and binding limited obligation of, the Commission, as a Bond entitled to the benefits of a Bond under the Indenture, enforceable under the laws of the State of California without any further action by the Commission or any other Person;
3. The Indenture has been duly authorized, executed and delivered by, and constitutes the valid and binding obligation of, the Commission, enforceable against the Commission in accordance with its terms . The Indenture creates a valid pledge of the Net Revenues of the Enterprise, which pledge constitutes a lien on and security interest in the Net Revenues, to secure the payment of the principal of, and interest on the WIFIA Project 1 Bond, as and to the extent set forth in the Indenture and subject to the provisions of the Indenture permitting the application thereof for the purposes and on the terms and conditions set forth therein, irrespective of whether any party has notice of the pledge and without the need for any physical delivery, recordation, filing or further act to perfect such assignment or pledge;
4. The WIFIA Project 1 Bond is a limited obligation of the Commission and is payable exclusively from and is secured by a pledge of the Net Revenues of the Enterprise on a parity with all other Bonds issued under the Indenture, including any Additional Bonds, in right of payment and right of security. The general fund of the City is not liable and the credit or taxing power of the City is not pledged for the payment of the WIFIA Project 1 Bond or the interest thereon. The Commission has no taxing power. The WIFIA Project 1 Bond is not secured by a legal or equitable pledge of, or charge, lien or encumbrance upon, any of the property of the City or of the Commission or any of its income or receipts, except the Net Revenues. All actions by the Commission that are required for the application of Net Revenues as required under the Indenture and under the WIFIA Project 1 Loan Documents have been duly and lawfully made; and
5. The WIFIA Project 1 Bond, in the principal amount deemed purchased, issued and delivered to the WIFIA Lender on the Disbursement Date, will not adversely affect the exclusion from federal income taxation of the interest on any Outstanding Bonds from the gross income of the holders thereof.
Upon the delivery of such purchase price to the Trustee in immediately available funds and receipt of the foregoing documents and opinion, the Trustee shall make a notation in its registration books of the principal amount of the WIFIA Project 1 Bond so purchased and delivered on such date and the resulting Outstanding WIFIA Project 1 Bond Balance on such date, and the WIFIA Lender shall make similar notation on the WIFIA Project 1 Bond, all in accordance with Section
71.01; provided that the failure of the WIFIA Lender to make such notation shall not affect in any manner the Commission’s obligations hereunder or under the WIFIA Project 1 Bond. The notation
133883210.6
- 12 -
in the registration book of the Trustee shall also serve to authenticate the WIFIA Project 1 Bond deemed issued, purchased and delivered on such date, regardless of the date of the original authentication on the WIFIA Project 1 Bond.
The Trustee shall transfer the purchase price received from the WIFIA Lender on the Disbursement Date to the Commission for deposit by the Commission into the WIFIA Project 1 Project Account or as otherwise instructed by the Commission. The Treasurer shall disburse amounts in the WIFIA Project 1 Project Account as specified in a Written Requisition of the Commission.
Section 71.04. Establishment and Application of the WIFIA Project 1 Project Account. The Commission hereby covenants and agrees to establish, maintain and hold hereunder within the Capital Project Fund, established under Section 3.04 of the Indenture, a separate account known as the “ WIFIA Project 1 Project Account” (herein called the “WIFIA Project 1 Project Account”). The Treasurer shall hold the amounts on deposit in the WIFIA Project 1 Project Account, which shall be maintained and accounted for by the Controller so long as any moneys are on deposit therein. Upon completion of the Project, the Commission may direct the transfer of any remaining balance in the WIFIA Project 1 Project Account to any other lawfully available fund or account of the Commission.
The moneys in the WIFIA Project 1 Project Account shall be held by the Treasurer in trust and applied to the Eligible Project Costs for the Project. All moneys held by the Treasurer in the WIFIA Project 1 Project Account may be invested in Permitted Investments maturing not later than the date on which such moneys are required for payment by the Treasurer. The Treasurer shall pay out moneys from the WIFIA Project 1 Project Account only upon warrants drawn by the Controller in the manner provided by law. No withdrawals shall be made from the WIFIA Project 1 Project Account for any purpose not authorized by law.
Section 71.05. Terms of Redemption.
(a) Optional Redemption. After the Final Disbursement Date (as defined in the WIFIA Project 1 Loan Documents), the WIFIA Project 1 Bond shall be subject to redemption prior to the WIFIA Project 1 Bond Final Maturity Date, at the option of the Commission, from and to the extent of any source of available funds, as a whole or in part, from time to time but not more than once annually, in principal amounts of $1,000,000 or any integral multiple of $1 in excess thereof, at a redemption price equal to 100% of the principal amount of the WIFIA Project 1 Bond to be redeemed, plus accrued interest thereon to the date fixed for redemption, without premium or penalty. Each optional redemption of the WIFIA Project 1 Bond shall be made on such date and in such principal amount as shall be specified by the Commission in a written notice delivered to the WIFIA Lender and the Trustee; provided that, the date of any such optional redemption shall be a Semi Annual Payment Date unless otherwise agreed to by the WIFIA Lender. In the case of any such optional redemption, such written notice shall be delivered to the WIFIA Lender and the Trustee not less than ten (10) days nor more than thirty (30) days prior to the date set for redemption, unless otherwise agreed by the WIFIA Lender with notice to the Trustee. At any time between delivery of such written notice and the applicable optional redemption date, the Commission may, without penalty or premium, rescind its notice of optional redemption by further written notice to the WIFIA Lender and the Trustee. Anything in this Indenture to the contrary
133883210.6
- 13 -
notwithstanding, the failure by the Commission to make any optional redemption on the WIFIA Project 1 Bond shall not constitute a breach or default under the Indenture. (b) Extraordinary Redemption from Net Loss Proceeds. The WIFIA Project 1 Bond shall be subject to redemption prior to its stated maturity, in whole or in part, at a redemption price equal to 100% of the principal amount of the WIFIA Project 1 Bond to be redeemed, plus accrued interest thereon to the date fixed for redemption, without premium, from Net Loss Proceeds in accordance with the WIFIA Project 1 Loan Documents and Section 6.20 of the Indenture. The Commission shall provide, or shall cause the Trustee to provide, written notice to the WIFIA Lender at least two (2) Business Days prior to the date on which i t makes any such redemption; provided that the Commission’s failure to deliver such notice shall not diminish, impair or otherwise affect the Commission’s obligation to make any such redemption as and when the circumstances requiring such redemption have occurred under the WIFIA Project 1 Loan Documents and the Indenture.
(c) Minimum Sinking Fund Account Redemption. The WIFIA Project 1 Bond shall be subject to mandatory redemption from Minimum Sinking Fund Account Payments on each Principal Payment Date. The Minimum Sinking Fund Account Payment with respect to the WIFIA Project 1 Bond on each Principal Payment Date shall equal the product of the Outstanding WIFIA Project 1 Bond Balance as of the end of the Capitalized Interest Period times the percentage set forth on Exhibit A-2 to the WIFIA Project 1 Bond for such Principal Payment Date. On or before each Disbursement Date, the Commission will provide to the Trustee and the WIFIA Lender an amended Minimum Sinking Fund Account Payment Schedule, approved by the WIFIA Lender, showing the Minimum Sinking Fund Account Payments required to be paid on the WIFIA Project 1 Bond (as increased on such Disbursement Date) on each Principal Payment Date (assuming that the Capitalized Interest Period ends on October 1, 2031). Not later than thirty (30) days following the end of the Capitalized Interest Period, or, in the event the WIFIA Project 1 Bond (or any portion thereof) is deemed purchased and delivered after the end of the Capitalized Interest Period, on or before the Disbursement Date, the Commission will provide to the Trustee and the WIFIA Lender an amended Minimum Sinking Fund Account Payment Schedule, approved by the WIFIA Lender, showing the Minimum Sinking Fund Account Payments required to be paid on each Principal Payment Date. If the WIFIA Project 1 Bond Final Maturity Date is determined under the WIFIA Project 1 Loan Documents to be earlier than October 1, 2061, the applicable percentages shown in the Minimum Sinking Fund Account Payment Schedule shall be amended so that the percentage allocated to any Principal Payment Date following the earlier WIFIA Project 1 Bond Final Maturity Date will be allocated pro-rata among the Principal Payment Dates occurring prior to the earlier WIFIA Project 1 Bond Final Maturity Date, and such calculations shall be included by the Commission in the amended Exhibit A-2 provided to the Trustee and the WIFIA Lender pursuant to the preceding sentence, as approved by the WIFIA Lender. In addition, if the WIFIA Project 1 Bond is redeemed in part pursuant to clauses (a) or (b) of this Section 71.05, each such partial redemption shall result in a reduction of the Minimum Sinking Fund Account Payments on a pro rata basis (or in such other manner approved by the WIFIA Lender) and the Commission shall provide to the Trustee and the WIFIA Lender, not later than thirty (30) days following such optional redemption date, an amended Minimum Sinking Fund Account Payment Schedule, approved by the WIFIA Lender, which schedule shall become effective upon delivery to the Trustee. The WIFIA Lender shall reflect any revisions to Minimum Sinking Fund Account Payment Schedule on Exhibit A-2 of the WIFIA Project 1 Bond; provided that the failure to make
133883210.6
- 14 -
any such revisions shall not affect in any manner the Commission’s obligations hereunder or under the WIFIA Project 1 Bond. The Commission shall not be required to give the WIFIA Lender a ny prior notice of such Minimum Sinking Fund Account redemption. (d) Notices. Each notice of redemption given pursuant to this Section 71.05 shall be accompanied by a Certificate of the Commission identifying the provision of this Sixteenth Supplemental Inde nture and the WIFIA Project 1 Loan Documents pursuant to which such redemption (and prepayment) is being made and containing a calculation in reasonable detail of the amount of such redemption (and prepayment), including, if applicable, a revised schedule of Minimum Sinking Fund Account Payments resulting from redemption (and prepayment). (e) Application of Terms of Indenture. The provisions of the Indenture relating to redemption of Bonds set forth in Sections 4.02, 4.03, 4.04, 4.05 and 4.06, to the extent inconsistent with this Section 71.05, shall not apply to the redemption of the WIFIA Project 1 Bond and the WIFIA Lender waives any rights to notice provided thereunder.
Section 71.06. No Defeasance . Anything to the contrary in the Indenture notwithstanding, the WIFIA Project 1 Bond shall not be subject to defeasance and no amounts in respect of the WIFIA Project 1 Bond shall be considered or deemed to have been paid until the WIFIA Lender shall have received irrevocable payment in immediately available funds in accordance with the requirements for payment set forth in this Sixteenth Supplemental Indenture.
Section 71.07. No Reserve. On January 30, 2013, certain amendments set forth in the First Amendment that govern the sizing of the Required Reserve for each Series of Bonds became effective in accordance with the terms of the Indenture. In accordance therewith, the Commission has determined not to fund the Required Reserve for the WIFIA Project 1 Bond.
Section 71.08. Notices; Payment Instructions .
(a) Notices to the WIFIA Lender hereunder shall be (a) in writing, (b) effective as provided below and (c) given by (i) nationally recognized courier service, (ii) hand delivery, or (iii) email, in each case to:
If to WIFIA Lender: United States Environmental
Protection Agency
WJC-E 7334A
1200 Pennsylvania Avenue NW
Washington, DC 20460
Attention: WIFIA Director
Email: [email protected]
, or to such other address as shall be provided by the WIFIA Lender’s Authorized Representative to the Commission and the Trustee. Unless otherwise instructed by the WI FIA Lender’s Authorized Representative, all notices to the WIFIA Lender should be made by email to the email address noted above for the WIFIA Lender. Each such notice, request or communication shall be
133883210.6
- 15 -
effective (x) if delivered by hand or by nationally r ecognized courier service, when delivered at the address specified in this Section 71.08 and (y) if given by email, when such email is delivered to the address specified in this Section 71.08; provided, that notices received on a day that is not a Business Day or after 5:00 p.m. Eastern Time on a Business Day will be deemed to be effective on the next Business Day.
(b) Any payments on the WIFIA Project 1 Bond to the WIFIA Lender shall be made by wire transfer in immediately available funds in accordance with payment instructions provided by the WIFIA Lender pursuant to the WIFIA Project 1 Loan Documents, as modified from time to time by the WIFIA Lender throug h a written notice executed by a WIFIA Lender’s Authorized Representative and delivered to the Commission and the Trustee at least five (5) Business Days prior to its proposed effective date.
Section 71.09. Commission Representations . The Commission has reviewed all proceedings heretofore taken relative to the authorization of the WIFIA Project 1 Bond and has found, as a result of such review, that all conditions, things and acts required by law to exist, happen or be performed precedent to and in the issuance of the WIFIA Project 1 Bond, except as otherwise provided in Section 71.03, do exist, have happened and have been performed in due time, form and manner as required by law, and the Commission is authorized, pursuant to each and every requirement of law, including the Law and the Ordinances to issue the WIFIA Project 1 Bond in its maximum principal amount in Section 71.01(a) and in the manner and form otherwise provided in this Sixteenth Supplemental Indenture, without any further approval or action by the Board of Supervisors or the Commission.
Section 71.10. No Amendment without Consent of the WIFIA Lender. This Sixteenth Supplemental Indenture shall not be amended except with the prior written consent of the WIFIA Lender.
ARTICLE LXXII
CITY REQUIREMENTS; EXECUTION
As used in this Article, “Agreement” means the Indenture.
To the extent of any inconsistency between the provisions in this Article and the provisions in prior Articles of this Indenture entitled “City Requirements” or “Additional City Requirements,” the provisions of this Article shall control.\
Section 72.01. Local Business Enterprise Utilization; Liquidated Damages .
(a) The LBE Ordinance. The Trustee shall comply with all the requirements of the Disadvantaged Business Enterprise Ordinance set forth in Chapter 14B of the San Francisco Administrative Code as it now exists or as it may be amended in the future (collectively the “LBE Ordinance”), provided such amendments do not materially increase the Trustee’s obligations or liabilities, or materially diminish the Trustee’s rights, under this Sixteenth Supplemental Indenture.
Such provisions of the LBE Ordinance are incorporated by reference and made a part of this
133883210.6
- 16 -
Sixteenth Supplemental Indenture as though fully set forth in this Section. The Trustee’s willful failure to comply with any applicable provision of the LBE Ordinance is a material breach of the Trustee’s obligations under this Sixt eenth Supplemental Indenture and shall entitle City, subject to any applicable notice and cure provisions set forth in this Sixteenth Supplemental Indenture, to exercise any of the remedies provided for under this Sixteenth Supplemental Indenture, under the LBE Ordinance or otherwise available at law or in equity, which remedies shall be cumulative unless this Sixteenth Supplemental Indenture expressly provides that any remedy is exclusive. In addition, the Trustee shall comply fully with all other applicable local, state and federal lawsꞏ prohibiting discrimination and requiring equal opportunity in contracting, including subcontracting.
(b) Compliance and Enforcement. If the Trustee willfully fails to comply with any of the provisions of the LBE Ordinance, the rules and regulations implementing the LBE Ordinance, or the provisions of this Sixteenth Supplemental Indenture pertaining to LBE participation, the Trustee shall be liable for liquidated damages in an amount equal to the Trustee’s net profit on this Sixteenth Supplemental Indenture, or 10% of the total amount of this Sixteenth Supplemental Indenture, or $1,000, whichever is greatest. The Director of the City’s Human Rights Commission or any other public official authorized to enforce the LBE Ordinance (separately and collectively, the “Director of HRC”) may also impose other sanctions against the Trustee authorized in the LBE Ordinance, including declaring the Trustee to be irresponsible and ineligible to contract with the City for a period of up to five years or revocation of the Trustee’s DBE certification. The Director of HRC will determine the sanctions to be imposed, including the amount of liquidated damages, after investigation pursuant to Administrative Code §14B.17.
By entering into this Sixt eenth Supplemental Indenture, the Trustee acknowledges and agrees that any liquidated damages assessed by the Director of the HRC shall be payable to City upon demand. ꞏThe Trustee further acknowledges and agrees that any liquidated damages assessed may be withheld from any monies due to the Trustee on any contract with City, The Trustee agrees to maintain records necessary for monitoring its compliance with the LBE Ordinance for a period of three years following termination or expiration of this Sixteenth Supplemental Indenture, and shall make such records available for audit and inspection by the Director of HRC or the Controller upon request.
Section 72.02. Nondiscrimination; Penalties.
(a) Trustee Shall Not Discriminate. In the performance of this Sixteenth Supplemental Indenture; the Trustee agrees not to discriminate against any employee, City and County employee working with such contractor or subcontractor, applicant for employment with such contractor or subcontractor, or against any person seeking accommodations, advantages, facilities, privileges, services, or membership in all business, social, or other establishments or organizations, on the basis of the fact or perception of a person’s race, color, creed, religion, national origin, ancestry, age, height, weight, sex, sexual orientation, gender identity, domestic partner status, marital status, disability or Acquired Immune Deficiency Syndrome or HIV status (AIDS/HN status), or association with members of such protected classes, or in retaliation for opposition t o discrimination against such classes.
133883210.6
- 17 -
(b) Subcontracts . The Trustee shall incorporate by reference in all subcontracts the provisions of §§12B.2(a), 12B.2(c) -(k), and 12C.3 of the San Francisco Administrative Code (copies of which are available from Purch asing) and shall require all subcontractors to comply with such provisions. The Trustee’s failure to comply with the obligations in this subsection shall constitute a material breach of this Sixteenth Supplemental Indenture.
Nondiscrimination in Benefits . The Trustee does not as of the date of this Sixteenth Supplemental Indenture and will not during the term of this Sixteenth Supplemental Indenture, in any of its operations in San Francisco, on real property owned by San Francisco, or where work is being performed for the City elsewhere in the United States, discriminate in the provision of bereavement leave, family medical leave, health benefits, membership or membership discounts, moving expenses, pension and retirement benefits or travel benefits, as well as any benefits other than the benefits specified above, between employees with domestic partners and employees with spouses, and/or between the domestic partners and spouses of such employees, where the domestic partnership has been registered with a governmental entity pursuant to state or local law authorizing such registration, subject to the conditions set forth in §12B.2(b) of the San Francisco Administrative Code.
(c) Condition to Contract. As a condition to this Sixteenth Supplemental Indenture, the Trustee shall execute the “Chapter 12B Declaration: Nondiscrimination in Contracts and Benefits” form (form HRC-12B-101) with supporting documentation and secure the approval of the form by the San Francisco Human Rights Commission.
(d) 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 madeꞏ a part of this Sixteenth Supplemental Indenture as though fully set forth herein. The Trustee shall comply fully with and be bound by all of the provisions that apply to this Sixteenth Supplemental Indenture under such Chapters, including but not limited to the remedies provided in such Chapters. Without limiting the foregoing, the Trustee understands that pursuant to §12B.2(h) of the San Francisco Administrative Code, a penalty of $50 for each person for each calendar day during which such person was discriminated against in violation of the provisions of this Sixteenth Supplemental Indenture may be assessed against the Trustee and/or deducted from any payments due the Trustee.
Section 72.03. MacBride Principles —Northern Ireland . The provisions of San Francisco Administrative Code §12F are incorporated by this reference and made part of this Indenture. By entering into this Indenture, the Trustee confirms that it has read and understood that the City urges companies doing business in Northern Ireland to resolve employment inequities and to abide by the MacBride Principles, and urges San Francisco companies to do business with corporations that abide by the MacBride Principles.
Section 72.04. Tropical Hardwood and Virgin Redwood Ban. Under San Francisco Environment Code Section 804(b), the City urges the Trustee not to import, purchase, obtain, or use for any purpose, any tropical hardwood, tropical hardwood wood product, virgin redwood or virgin redwood wood product.
133883210.6
- 18 -
Section 72.05. Drug-Free Workplace Policy. The Trustee acknowledges that pursuant to the Federal Drug -Free Workplace Act of 1989, the unlawful manufacture, distribution, dispensation, possession, or use of a controlled substance is prohibited on City premises. The Trustee agrees that any violation of this prohibition by the Trustee, its employees, agents or assigns will be deemed a material breach of this Sixteenth Supplemental Indenture.
Section 72.06. Compliance with Americans with Disabilities Act . The Trustee acknowledges that, pursuant to the Americans with Disabilities Act (ADA), programs, services and other activities provided by a public entity to the public, whether directly or through a contractor, must be accessible to the disabled public. The Trustee shall provide the services specified in this Sixtee nth Supplemental Indenture in a manner that complies with the ADA and any and all other applicable federal, state and local disability rights legislation. The Trustee agrees not to discriminate against disabled persons in the provision of services, benefit s or activities provided under this Sixteenth Supplemental Indenture and further agrees that any violation of this prohibition on the part of the Trustee, its employees, agents or assigns will constitute a material breach of this Sixteenth Supplemental Indenture.
Section 72.07. Sunshine Ordinance. In accordance with San Francisco Administrative Code §67.24(e), contracts, contractors’ bids, responses to solicitations and all other records of communications between City and persons or firms seeking contracts, shall be open to inspection immediately after a contract has been awarded. Nothing in this provision requires the disclosure of a private person or organization’s net worth or other proprietary financial data submitted for qualification for a contract or other benefit until and unless that person or organization is awarded the contract or benefit. Information provided which is covered by this paragraph will be made available to the public upon request.
Section 72.08. Limitations on Contributions . Through its execution of this Sixte enth Supplemental Indenture, the Trustee acknowledges that it is familiar with Section 1.126 of the City’s Campaign and Governmental Conduct Code, which prohibits any person who contracts with the City for the rendition of personal services, for the furnishing of any material, supplies or equipment, for the sale or lease of any land or building, or for a grant, loan or loan guarantee, from making any campaign contribution to (1) 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, (2) a candidate for the office held by such individual, or (3) a committee controlled by such individual, at any time from the commenceme nt of negotiations for the contract until the later of either the termination of negotiations for such contract or six months after the date the contract is approved. The Trustee acknowledges that the foregoing restriction applies only if the contract or a combination or series of contracts approved by the same individual or board in a fiscal year have a total anticipated or actual value of $50,000 or more. The Trustee further acknowledges that the prohibition on contributions applies to each prospective party to the contract; each member of the Trustee’s board of directors; the Trustee’s chairperson, chief executive officer, chief financial officer and chief operating officer; any person with an ownership interest of more than 20 percent in the Trustee; any subcontractor listed in the bid or contract; and any committee that is sponsored or controlled by the Trustee. Additionally, the Trustee acknowledges that the Trustee must inform each of the persons described in the preceding sentence of the prohibitions contained in Section 1.126.
133883210.6
- 19 -
Section 72.09. Requiring Minimum Compensation for Covered Employees. (a) The Trustee agrees to comply fully with and be bound by all of the provisions of the Minimum Compensation Ordinance (MCO), as set forth in San Francisco Administrative Code Chapter 12P (Chapter 12P), including the remedies provided, and implementing guidel ines and rules. The provisions of Chapter l2P are incorporated herein- by reference and made a part of this Sixteenth Supplemental Indenture as though fully set forth. The text of the MCO is available on the web at http://www.sfgov.org/olse/mco. A partial listing of some of the Trustee’s obligations under the MCO is set forth in this Section. The Trustee is required to comply with all the provisions of the MCO, irrespective of the listing of obligations in this Section.
The MCO requires the Trustee to pay the Trustee’s employees a minimum hourly gross compensation wage rate and to provide minimum compensated and uncompensated time off. The minimum wage rate may change from year to year and the Trustee is obligated to keep informed of the then -current requirements. Any subcontract entered into by the Trustee shall require the subcontractor to comply with the requirements of the MCO and shall contain contractual obligations substantially the same as those set forth in this Section. It is the Trustee’s obligation to ensure that any subcontractors of any tier under this Sixteenth Supplemental Indenture comply with the requirements of the MCO. If any subcontractor under this Sixteenth Supplemental Indenture fails to comply, City may pursue any of the remedies set forth in this Section against the Trustee.
(b) The Trustee shall not take adverse action or otherwise discriminate against an employee or other person for the exercise or attempted exercise of rights under the MCO. Such actions, if taken within 90 days of the exercise or attempted exercise of such rights, will be rebuttably presumed to be retaliation prohibited by the MCO. (c) The Trustee shall maintain employee and payroll records as required by the MCO.
If the Trustee fails to do so, it shall be presumed that the Trustee paid no more than the minimum wage required under State law.
(d) The City is authorized to inspect the Trustee’s job sites and conduct interviews with employees and conduct audits of the Trustee.
(e) The Trustee’s commitment to provide the M inimum Compensation is a material element of the City’s consideration for this Sixteenth Supplemental Indenture. The City in its sole discretion shall determine whether such a breach has occurred. The City and the public will suffer actual damage that will be impractical or extremely difficult to determine if the Trustee fails to comply with these requirements. The Trustee agrees that the sums set forth in Section 12P.6.1 of the MCO as liquidated damages are not a penalty, but are reasonable estimates of the loss that the City and the public will incur for the Trustee’s noncompliance. The procedures governing the assessment of liquidated damages shall be those set forth in Section 12P.6.2 of Chapter 12P. (f) The Trustee understands and agrees that if it fails to comply with the requirements of the MCO, the City shall have the right to pursue any rights or remedies available under Chapter 12P (including liquidated damages), under the terms of the contract, and under applicable law. If, within 30 days after receiving written notice of a breach of this Sixteenth Supplemental Indenture
133883210.6
- 20 -
for violating the MCO, the Trustee fails to cure such breach or, if such breach cannot reasonably be cured within such period of 30 days, the Trustee fails to commence efforts to cure within such period, or thereafter fails diligently to pursue such cure to completion; the City shall have the right to pursue any rights or remedies available under applicable law, including those set forth in Section 12P.6(c) of Chapter 12P. Each of these remedies shall be exercisable individually or in combination with any other rights or remedies available to the City. (g) The Trustee represents and warrants that it is not an entity that was set up, or is being used, for the purpose of evading the intent of the MCO. (h) The City may conduct random audits of the Trustee. Random audits shall be (i) noticed in advance in writing; (ii) limited to ascertaining whether Covered Employees are paid at least the minimum compensation required by the MCO; (iii) accomplished through an examination of pertinent records at a mutually agreed upon time and location within ten days of the written notice; and (iv) limited to one audit of the Trustee every two years for the duration of this Sixteenth Supplemental Indenture. Nothing in this Sixteenth Supplemental Indenture is intended to preclude the City from investigating any report of an alleged violation of the MCO.
Section 72.10. Requiring Health Benefits for Covered Employees. Unless exempt, the Trustee agrees to comply fully with and be bound by all of the provisions of the Health Care Accountability Ordinance (HCAO), as set forth in San Francisco Administrative Code Chapter 12Q, including the remedies provided, and implementing regulations, as the same may be amended from time to time. The provisions of Chapter 12Q are incorporated herein by reference and made a part of this Sixteenth Supplemental Indenture as though fully set forth. The text of the HCAO is available on the web at http://www.sfgov.org/oca/lwlh.htm. Capitalized terms used in this Section and not defined in this Sixteenth Supplemental Indenture shall have the meanings assigned to such terms in Chapter 12Q.
(a) For each Covered Employee, the Trustee shall provide the appropriate health benefit set forth in Section 12Q.3 of the HCAO. If the Trustee chooses to offer the health plan option, such health plan shall meet the minimum standards set forth by the San Francisco Health Commission.
(b) Notwithstanding the above, if the Trustee is a small business as defined in Section 12Q.3(d) of the HCAO, it shall have no obligation to comply with part (a) above. (c) The Trustee’s failure to comply with the HCAO shall constitute a material breach of this Sixteenth Supplemental Indenture. City shall notify the Trustee if such a breach has occurred. If, within 30 days after receiving City’s written notice of a breach of this Sixteenth Supplemental Indenture for violating the HCAO, the Trustee fails to cure such breach or, if such breach cannot reasonably be cured within such period of 30 days, the Trustee fails to commence efforts to cure within such period, or thereafter fails diligently to pursue such cure to completion, City shall have the right to pursue the remedies set forth in 12Q.5(f)(1-5). Each of these remedies shall be exercisable individually or in combination with any other rights or remedies available to City.
133883210.6
- 21 -
(d) Any Subcontract entered into by the Trustee shall require the Subcontractor to comply with the requirements of the HCAO and shall contain contractual obligations substantially the same as those set forth in this Section. The Trustee shall notify City’s Office of Contract Administration when it enters into such a Subcontract and shall certify to the Office of Contract Administration that it has notified the Subcontractor of the obligations under the HCAO and has imposed the requirements of the HCAO on Subcontractor through the Subcontract. The Trustee shall be responsible for its Subcontractors’ compliance with this Chapter. If a Subcontractor fails to comply, the City may pursue the remedies set forth in this Section against the Trustee based on the Subcontractor’s failure to comply, provided that City has first provided the Trustee with notice and an opportunity to obtain a cure of the violation.
(e) The Trustee shall not discharge, reduce in compensation, or otherwise discriminate against any employee for notifying City with regard to the Trustee’s noncompliance or anticipated noncompliance with the requirements of the HCAO, for opposing any practice proscribed by t he HCAO, for participating in proceedings related to the HCAO, or for seeking to assert or enforce any rights under the HCAO by any lawful means.
(f) The Trustee represents and warrants that it is not an entity that was set up, or is being used, for the purpose of evading the intent of the HCAO. (g) The Trustee shall maintain employee and payroll records in compliance with the California Labor Code and Industrial Welfare Commission orders, including the number of hours each employee has worked on the City Contract.
(h) The Trustee shall keep itself informed of the current requirements of the HCAO. (i) The Trustee shall provide reports to the City in accordance with any reporting standards promulgated by the City’ under the HCAO, including reports on Subcontractors and Subtenants, as applicable.
(j) The Trustee shall provide City with access to records pertaining to compliance with HCAO after receiving a written request from City to do so and being provided at least ten business days to respond.
(k) The Trustee shall allow City to inspect the Trustee’s job sites and have access to the Trustee’s employees in order to monitor and determine compliance with HCAO. (l) The City may conduct random audits of the Trustee to ascertain its compliance with HCAO. The Trustee agrees to cooperate with City when it conducts such audits. (m) If the Trustee is exempt from the HCAO when this Sixteenth Supplemental Indenture is executed because its amount is less than $25,000 ($50,000 for nonprofits), but the Trustee later enters into an agreement or agreements that cause the Trustee’s aggregate amount of all agreements with City to reach $75,000, all the agreements shall be thereafter subject to the HCAO. This obligation arises on the effective date of the agreement that ca uses the cumulative amount of agreements between the Trustee and the City to be equal to or greater than $75,000 in the fiscal year.
133883210.6
- 22 -
Section 72.11. Prohibition on Political Activity with City Funds . In accordance with San Francisco Administrative Code Chapter 12.G, the Trustee may not participate in, support, or attempt to influence any political campaign for a candidate or for a ballot measure (collectively, “Political Activity”) in the performance of the services provided under this Sixteenth Supplemental Indenture. The Trustee agrees to comply with San Francisco Administrative Code Chapter 12.G and any implementing rules and regulations promulgated by the City’s Controller. The terms andꞏ provisions of Chapter 12.G are incorporated herein by this reference. In the event the Trustee violates the provisions of this Section, the City may, in addition to any other rights or remedies available hereunder, (i) terminate this Sixteenth Supplemental Indenture, and (ii) prohibit the Trustee from bidding on or receiving any new City contract for a period of two (2) years. The Controller will not consider the Trustee’s use of profit as a violation of this Section.
Section 72.12. Conflict of Interest. Through its execution of this Sixteenth Supplemental Indenture, the Trustee acknowledges that it is familiar with the provisions of Section 15.103 of the City’s Charter, Article III, Chapter 2 of City’s Campaign and Governmental Conduct Code, and Section 87100 et seq. and Section 1090 et seq. of the Government Code of the State of California, and certifies that it does not know of any facts which constitute a violation of said provision and agrees that it will immediately notify the City if it becomes aware of any such fact during the term of this Sixteenth Supplemental Indenture.
Section 72.13. Earned Income Credit (EIC) Forms . Administrative Code section 120 requires that employers provide their employees with IRS Form W5 (The Earned Income Credit Advance Payment Certificate) and the IRS EIC Schedule, as set forth below. Employers can locate these forms at the IRS Office, on the Internet, or anywhere that Federal Tax Forms can be found. (a) The Trustee shall provide EIC Forms to each Eligible Employee at each of the following times: (i) within thirty days f ollowing the date on which this Sixteenth Supplemental Indenture becomes effective (unless the Trustee has already provided such EIC Forms at least once during the calendar year in which such effective date falls); (ii) promptly after any Eligible Employee is hired by the Trustee; and (iii) annually between January 1 and January 31 of each calendar year during the term of this Sixteenth Supplemental Indenture. (b) Failure to comply with any requirement contained in subparagraph (a) of this Section shall con stitute a material breach by the Trustee of the terms of this Sixteenth Supplemental Indenture. If, within thirty days after the Trustee receives written notice of such a breach; the Trustee fails to cure such breach or, if such breach cannot reasonably be cured within such period of thirty days, the Trustee fails to commence efforts to cure within such period or thereafter fails to diligently pursue such cure to completion, the City may pursue any rights or remedies available under this Sixteenth Supplemental Indenture or under applicable law. (c) Any Subcontract entered into by the Trustee shall require the subcontractor to comply, as to the subcontractor’s Eligible Employees, with each of the terms of this Section. (d) Capitalized terms used in this Section and not defined in this Sixteenth Supplemental Indenture shall have the meanings assigned to such terms in Section 120 of the San Francisco Administrative Code.
133883210.6
- 23 -
Section 72.14. Preservative-treated Wood Containing Arsenic . The Trustee may not purchase preservative tr eated wood products containing arsenic in the performance of this Sixteenth Supplemental Indenture unless an exemption from the requirements of Chapter 13 of the San Francisco Environment Code is obtained from the Department of the Environment under Section 1304 of the Code. The term “preservative -treated wood containing arsenic” shall mean wood treated with a preservative that contains arsenic; elemental arsenic, or an arsenic copper combination, including, but not limited to, chromated copper arsenate pre servative, ammoniacal copper zinc arsenate preservative, or ammoniacal copper arsenate preservative. The Trustee may purchase preservative-treated wood products on the list of environmentally preferable alternatives prepared and adopted by the Department of the Environment. This provision does not preclude the Trustee from purchasing preservative -treated wood containing arsenic for saltwater immersion.
The term “saltwater immersion” shall mean a pressure- treated wood that is used for construction purposes or facilities that are partially or totally immersed in saltwater.
Section 72.15. Nondisclosure of Private Information. The Trustee has read and agrees to the terms set forth in San Francisco Administrative Code Sections 12M.2, “Nondisclosure of Private Information,” and 12M.3, “Enforcement” of Administrative Code Chapter 12M, “Protection of Private Information,” which are incorporated herein as if fully set forth. The Trustee agrees that any failure of the Trustee to comply with the requirements of Section 12M.2 of this Chapter shall be a material breach of this Sixteenth Supplemental Indenture. In such an event, in addition to any other remedies available to it under equity or law, the City may terminate this Sixteenth Supplemental Indenture, bring a false claim action against the Trustee pursuant to Chapter 6 or Chapter 21 of the Administrative Code, or debar the Trustee.
Section 72.16. Proprietary or Confidential Information of City. The Trustee understands and agrees that, in the performance of the work or services under this Sixt eenth Supplemental Indenture or in contemplation thereof, the Trustee may have access to private or confidential information which may be owned or controlled by City and that such information may contain proprietary or confidential details, the disclosure of which to third parties may be damaging to City. The Trustee agrees that all information disclosed by City to the Trustee shall be held in confidence and used only in performance of the Sixteenth Supplemental Indenture. The Trustee shall exercise the sam e standard of care to protect such information as a reasonably prudent contractor would use to protect its own proprietary data.
Section 72.17. Compliance with Laws. The Trustee shall keep itself fully informed of the City’s Charter, codes, ordinances and regulations of the City and of all state, and federal laws in any manner affecting the performance of this Sixteenth Supplemental Indenture, and must at all times comply with such local codes, ordinances, and regulations and all applicable laws as they may be amended from time to time.
Section 72.18. Works for Hire. If, in connection with services performed under this Sixteenth Supplemental Indenture, the Trustee or its subcontractors create artwork, copy, posters, billboards, photographs, videotapes, audiotapes, systems designs, software, reports, diagrams, surveys, blueprints, source codes or any other original works of authorship, such works of authorship shall be works for hire as defined under Title 17 of the United States Code, and all copyrights in such works are the property of the City. If it is ever determined that any works created by the Trustee or its subcontractors under this Sixteenth Supplemental Indenture are not
133883210.6
- 24 -
works for hire under U.S. law, the Trustee hereby assigns all copyrights to such works to the City, and agrees to provide any material and execute any documents necessary to effectuate such assignment. With the approval of the City, the Trustee may retain and use copies of such works for reference and as documentation of its experience and capabilities.
Section 72.19. Resource Conservation . Chapter 5 of the San Francisco Environment Code (“Resource Conservation”) is incorporated herein by reference. Failure by the Trustee to comply with any of the applicable requirements of Chapter 5 will be deemed a material breach of contract.
Section 72.20. Public Access to Meetings and Records . If the Trustee receives a cumulative total per year of at least $250,000 in City funds or City- administered funds and is a non- profit organization as defined in Chapter 12L of the San Francisco Administrative Code; the Trustee shall comply with and be bound by all the applicable provisions of that Chapter. By executing this Sixteenth Supplemental Indenture, the Trustee agrees to open its meetings and records to the public in the manner set forth in §§12L.4 and 12L.5 of the Administrative Code.
The Trustee further agrees to make- good faith efforts to promote community membership on its Board of Directors in the manner set forth in §12L.6 of the Administrative Code. The Trustee acknowledges that its material failure to comply with any of the provisions of this paragraph shall constitute a material breach of this Sixteenth Supplemental Indenture. The Trustee further acknowledges that such material breach of this Sixteenth Supplemental Indenture shall be grounds for the City to terminate and/or not renew the agreement, partially or in its entirety.
Section 72.21. Guaranteed Maximum Costs.
(a) The City’s obligation to the Trustee hereunder shall not at any time exceed the amount certified by the Controller for the purpose and period stated in such certification. (b) Except as may be provided by laws governing emergency procedures, officers and employees of the City are not authorized to request, and the City is not required to reimburse the Trustee for, commodities or services beyond the agreed upon contract scope unless the changed scope is authorized by amendment and approved as required by law. (c) Officers and employees of the City are not authorized to offer or promise, nor is the City required to honor, any offered or promised additional funding in excess of the maximum amount of funding for which the contract is certified without certification of the additional amount by the Controller.
(d) The Controller is not authorized to make payments on any contract for which funds have not been certified as available in the budget or by supplemental appropriation.
Section 72.22. Submitting False Claims; Monetary Penalties . Pursuant to San Francisco Administrative Code §21.16, any contractor, subcontractor or consultant who submits a false claim shall be liable to the City for three times the amount of damages which the City sustains because of the false claim. A contractor, subcontractor or consultant who submits a false claim shall also be liable to the City for the costs, including attorneys’ fees, of a civil action brought to recover any of those penalties or damages, and may be liable to the City for a civil penalty of up
133883210.6
- 25 -
to $10,000 for each false claim. A contractor, subcontractor or consultant will be deemed to have submitted a false claim to the City if the contractor, subcontractor or consultant: (a) knowingly presents or causes to be presented to an officer or employee of the City a false claim or request for payment or approval; (b) knowingly makes, uses, or causes to be made or used a fal se record or statement to get a false claim paid or approved by the City; (c) conspires to defraud the City by getting a false claim allowed or paid by the City; (d) knowingly makes, uses, or causes to be made or used a false record or statement to conceal , avoid, or decrease an obligation to pay or transmit money or property to the City; or (e) is a beneficiary of an inadvertent submission of a false claim to the City; subsequently discovers the falsity of the claim, and fails to disclose the false claim to the City within a reasonable time after discovery of the false claim.
Section 72.23. Agreement Made in California; Venue. The formation, interpretation and performance of this Agreement shall be governed by the laws of the State of California. Venue for all litigation relative to the formation, interpretation and performance of this Agreement shall be in San Francisco.
Section 72.24. Ownership of Results. Any interest of the Trustee or its Subcontractors, in drawings, plans, specifications, blueprints, studies, reports, memoranda, computation sheets, computer files and media or other documents prepared by the Trustee or its subcontractors in connection with services to be performed under this Sixteenth Supplemental Indenture, shall become the property of and will be transmitted to City. However, the Trustee may retain and use copies for reference and as documentation of its experience and capabilities.
Section 72.25. Audit and Inspection of Records . The Trustee agrees to maintain and make available to the City, during regular business hours, accurate books and accounting records relating to its work under this Sixteenth Supplemental Indenture. The Trustee will permit City to audit, examine and make excerpts and transcripts from such books and records, and to make audits of all invoices, materials, payrolls, records or personnel and other data related to all other matters covered by this Sixteenth Supplemental Indenture, whether funded in whole or in part under this Sixteenth Supplemental Indenture. The Trustee shall maintain such data and records in an accessible location and condition for a period of not less than three years after final payment under this Sixteenth Supplemental Indenture or until after final audit has been resolved, whichever is later. The State of California or any federal agency having an interest in the subject matter of this Sixteenth Supplemental Indenture shall have the same rights conferred upon City by this Section.
Section 72.26. Subcontracting. The Trustee is prohibited from subcontracting this Sixteenth Supplemental Indenture or any part of it unless such subcontracting is first approved by City in writing. Neither party shall, on the basis of this Sixteenth Supplemental Indenture, contract on behalf of or in the name of the other party. An agreement made in violation of this provis ion shall confer no rights on any party and shall be null and void.
Section 72.27. Assignment. The services to be performed by Trustee are personal in character and neither this Sixteenth Supplemental Indenture nor any duties or obligations hereunder may be assigned or delegated by the Trustee unless first approved by the Commission and the City by written instrument executed and approved in the same manner as this Sixteenth Supplemental Indenture.
133883210.6
- 26 -
Section 72.28. Non-Waiver of Rights . The omission by either party at any time to enforce any default or right reserved to it, or to require performance of any of the terms, covenants, or provisions hereof by the other party at the time designated, shall not b e a waiver of any such default or right to which the party is entitled, nor shall it in any way affect the right of the party to enforce such provisions thereafter.
Section 72.29. 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 Trustee contained in Article XXV of this Sixteenth Supplemental Indenture and to the extent that any other rights are given to the City hereunder.
Section 72.30. Food Service Waste Reduction Requirements. Effective June 1, 2007, the Trustee agrees to comply fully with and be bound by all of the provisions of the Food Service Waste Reduction Ordinance, as set forth in San Francisco Environment Code Chapter 16, including the remedies provided, and implementing guidelines and rules. The provisions of Chapter 16 are incorporated herein by reference and made a part of this Sixteenth Supplemental Indenture as though fully set forth. This provision is a material term of this Sixteenth Supplemental Indenture. By entering into this Sixteenth Supplemental Indenture, the Trustee agrees that if it breaches this provision, City will suffer actual damages that will be impractical or extremely difficult to determine; further, the Trustee agrees that the sum of 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 a reasonable estimate of the damage that the City will incur based on the violation, established in light of the circumstances existing at the time this Sixteenth Supplemental Indenture was made. Such amount shall not be considered a penalty, but rather agreed monetary damages sustained by the City because of the Trustee’s failure to comply with this provision.
Section 72.31. Graffiti Removal. Graffiti is detrimental to the health, safety and welfare of the community in that it promotes a perception in the community that the laws protecting public and private property can be disregarded with impunity. This perception fosters a sense of disrespect of the law that results in an increase in crime; degrades the community and leads to urban blight; is detrimental to property values, business opportunities and the enjoyment of life; is inconsistent with the City’s property maintenance goals and aesthetic standards; and results in additional graffiti and in other properties becoming the target of graffiti unless it is quickly removed from public and private property. Graffiti results in visual pollution and is a public nuisance. Graffiti must be abated as quickly as possible to avoid detrimental impacts on the City and County and its residents, and to prevent the further spread of graffiti. The Trustee shall remove all graffiti from any real property owned or leased by the Trustee in the City and County of San Francisco within forty eight (48) hours of the earlier of the Trustee’s (a) discovery or notification of the graffiti or (b) receipt of notification of the graffiti from the Department of Public Works. This Section is not intended to require the Trustee to breach any lease or other agreement that it may have concerning its use of the real property. The term “graffiti” means any inscription, word, figure, marking or design that is affixed, marked, etched, scratched, drawn or painted on any building, structure, fixture or other improvement, whether permanent or temporary, including by way of example only and without limitation, signs, banners, billboards and fencing surrounding construction sites, whether public or private, without the consent of the owner of the property or the owner’s
133883210.6
- 27 -
authorized agent, and which is visible from the public right -of-way. “Graffiti” shall not include:
(1) 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 (2) any mural or other painting or marking on the propert y that is protected as a work of fine art under the California Art Preservation Act (California Civil Code sections 987 et seq.) or as a work of visual art under the Federal Visual Artists Rights Act of 1990 (17 U.S.C. §§ 101 et seq.). Any failure of the Trustee to comply with this Section of this Sixteenth Supplemental Indenture shall constitute a material breach of this Sixteenth Supplemental Indenture.
Section 72.32. Counterparts; Electronic Delivery . This Sixteenth Supplemental Indenture may be executed in any number of counterparts and by the different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute one and the same instrument; signature pages may be detached from multiple separate counterparts and attached to a single counterpart so that all signature pages are physically attached to the same document. This Six teenth Supplemental Indenture may be delivered by the delivery of signed signature pages by electronic means, facsimile transmission, or by e-mail with a PDF copy attached, and any printed or copied versions of any signature page so delivered shall have the same force and effect as an originally signed version of such signature page. Signatures of this Eleventh Supplemental Indenture made by electronic means shall be accompanied by an email, contemporaneous or otherwise, confirming the use of such means.
[End of Sixteenth Supplemental Indenture]
133883210.6
29837553 S-1
[Signature Page to Eleventh Supplemental Indenture]
IN WITNESS WHEREOF, the parties hereto have executed t his Sixteenth Supplemental Indenture by their officers thereunto duly authorized as of the day and year first written above.
PUBLIC UTILITIES COMMISSION OF THE
CITY AND COUNTY OF SAN FRANCISCO
By:
General Manager of the Public Utilities
Commission of the City and County of
San Francisco
U.S. BANK NATIONAL ASSOCIATION
By:
Authorized Officer
[SEAL]
Attest:
Secretary of the Public Utilities
Commission of the City and County
of San Francisco
Approved as to form:
Dennis J. Herrera, City Attorney
By:
Mark D. Blake, Deputy City Attorney
133883210.6
- A-1 -
EXHIBIT A
FORM OF WIFIA PROJECT 1 BOND
Not to Exceed $369,335,021 INITIAL PRINCIPAL AMOUNT
(excluding Accreted Interest) No. R-1
PUBLIC UTILITIES COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO
WASTEWATER REVENUE BONDS
(SFPUC WASTEWATER CAPITAL PLAN RESILIENCE PROGRAM – PROJECT 1) Dated Date Interest Rate
Final Maturity Date
(subject to adjustment
as provided in the
Indenture)
________, 2023 ____% October 1, 2061
Registered Owner: United States Environmental Protection Agency Not to Exceed INITIAL Principal Amount
(excluding the Accreted Interest): THREE HUNDRED SIXTY-NINE MILLION THREE
HUNDRED THIRTY-FIVE THOUSAND TWENTY-ONE
DOLLARS
The PUBLIC UTILITIES COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO, a commission duly organized and existing under and pursuant to the Charter of the City and Count y of San Francisco and the laws of the State of California (herein called the “Commission”), for value received, hereby promises to pay (but only out of the revenues hereinafter referred to) to the registered owner set forth above (the “WIFIA Lender”), or registered assigns, on the maturity date set forth above (subject to the right or obligation of prior redemption hereinafter provided for), the sum of the aggregate initial principal amounts of this Bond (hereinafter referred to as “Bond” or “WIFIA Project 1 Bond”) issued on each Disbursement Date, as adjusted to reflect Accreted Interest as set forth below, and to pay (but only out of the Revenues hereinafter referred to) interest accrued on the Outstanding WIFIA Project 1 Bond Balance (as hereinafter defined) at the interest rate set forth above at the times and in the manner set forth herein. This Bond will accrue interest on the Outstanding WIFIA Project 1 Bond Balance commencing on the first Disbursement Date. Interest will accrue and be computed on t he Outstanding WIFIA Project 1 Bond Balance from time to time on the basis of a 360- day year of twelve (12) thirty (30) day months, and will be compounded semi -annually on each April 1 and October 1 (each a “Semi-Annual Payment Date”) occurring during the Capitalized Interest Period; provided that, in the event of any WIFIA Payment Default or any WIFIA Project 1 Project Event of Default, this Bond shall bear interest on the Outstanding WIFIA Project 1 Bond Balance at the WIFIA Project 1 Bond Default Rate, (a) in the case of any WIFIA Payment Default, from (and
133883210.6
- A-2 -
including) its due date to (but excluding) the date of any payment so due, and (b) in the case of any WIFIA Project 1 Project Event of Default, from (and including) the date of such occurrence until (and excluding) the date such WIFIA Project 1 Project Event of Default has been cured in accordance with the terms of the WIFIA Project 1 Loan Documents. The WIFIA Lender shall give notice to the Trustee and the Commission of any WIFIA Payment Default or WIFIA Project 1 Project Event of Default, which notice shall specify the effective date of the WIFIA Project 1 Bond Default Rate and shall be deemed conclusive by the Trustee absent manifest error. No failure or delay on the part of the WIFIA Lender in providing such notice, nor any defect in such notice shall affect in any manner the Commission’s obligations under this Bond.
No payment of the principal of or interest on this Bond shall be payable by the Commission during the Capitalized Interest Period, a nd during the Capitalized Interest Period interest will accrue on the Outstanding WIFIA Project 1 Bond Balance and will compound and be added to the Outstanding WIFIA Project 1 Bond Balance on each Semi Annual Payment Date.
Notwithstanding the foregoing, the Capitalized Interest Period shall end immediately upon written notification to the Commission and the Trustee by the WIFIA Lender in accordance with the WIFIA Project 1 Loan Documents that a WIFIA System Event of Default or a WIFIA Project 1 Project Event of Default has occurred, in which case the Capitalized Interest Period shall cease and interest on this WIFIA Project 1 Bond (accrued since the last Semi -Annual Payment Date) shall be payable on the next Semi -Annual Payment Date following such termination and notification by the WIFIA Lender.
Commencing on the Debt Service Payment Commencement Date and on each successive Semi-Annual Payment Date through the end of the Interest Only Period, the Commission will pay interest accrued on the Outstanding WIFIA Project 1 Bond Balance through (but not including) such Semi-Annual Payment Date. Commencing on the Semi-Annual Payment Date following the end of the Interest Only Period, the Commission will pay interest on the Outstanding WIFIA Project 1 Bond Balance together with the Minimum Sinking Fund Account Payment due on each such Semi-Annual Payment Date (each of such Semi-Annual Payment Dates being referred to as a “Principal Payment Date”) in accordance with the Minimum Sinking Fund Account Payment Schedule. Notwithstanding anything herein to the contrary, the Outstanding WIFIA Project 1 Bond Balance and any accrued interest thereon shall be due and payable in full on the WIFIA Project 1 Bond Final Maturity Date, unless required to be paid earlier due to acceleration or otherwise.
The term “Outstanding WIFIA Project 1 Bond Balance” means, as of the date of calculation, the sum of (a) the aggregate principal amount of this Bond purchased and sold on each Disbursement Date to the WIFIA Lender (i.e., the sum of the funds received by the Trustee from the WIFIA Lender on each such Disbursement Date), plus (b) the Accreted Interest added to the principal balance of th is WIFIA Project 1 Bond on each Semi -Annual Payment Date occurring during the Capitalized Interest Period, which shall be the sum of (i) the interest accrued since the last Semi-Annual Payment Date on the Outstanding WIFIA Project 1 Bond Balance as of such Semi-Annual Payment Date, and (ii) if any Disbursement Date has occurred since the last Semi - Annual Payment Date, the interest accrued on the amount of the proceeds of each disburs ement since the applicable Disbursement Date, minus (c) the aggregate principal amount of this Bond paid or redeemed by the Commission on each Semi-annual Payment Date or any redemption date, if earlier.
133883210.6
- A-3 -
Within thirty (30) days following each Disbursement Date, each Semi -Annual Payment Date, and each redemption date, the WIFIA Lender shall make a notation on the WIFIA Project 1 Bond of the Outstanding WIFIA Project 1 Bond Balance as of such Disbursement Date, Semi - Annual Payment Date or redemption date (as the case may be) and shall give written notice to the Commission and the Trustee stating the Outstanding WIFIA Project 1 Bond Balance as of such date, which statement an d notation thereof shall be deemed conclusive absent manifest error; provided, however, that no failure to make such notation or any delay in giving such notice or in making such notation shall affect any of the obligations of the Commission on this WIFIA Project 1 Bond.
The principal of, redemption price, if any, and interest on this Bond shall be payable to the registered owner by wire transfer in immediately available funds in US Dollars in accordance with the payment instructions provided by the regis tered owner in accordance with the Sixteenth Supplemental Indenture (defined below) and no presentation of this WIFIA Project 1 Bond shall be required for any such payment, except that the final payment of this WIFIA Project 1 Bond shall be made upon or following presentation of this WIFIA Project 1 Bond for cancellation at the corporate trust office of the Trustee.
This Bond shall constitute a Capital Appreciation Bond during the Capitalized Interest Period, and thereafter shall automatically convert to a Current Interest Bond and Term Bond.
This Bond is issued under and pursuant to the provisions of the Charter of the City and County of San Francisco and all laws of the State of California supplemental thereto, including the Revenue Bond Law of 1941 to the extent made applicable by said Charter (herein collectively called the “Law”), and pursuant to an Indenture, dated as of January 1, 2003, between the Commission and the Trustee, as amended and supplemented, included as supplemented by that certain Sixteen th Supplemental Indenture, dated as of ________, 2023 (the “Sixteenth Supplemental Indenture”, and together with all supplements, the “Indenture”). Capitalized terms not defined herein shall have the meanings set forth in the Sixteenth Supplemental Indenture.
Reference is hereby made to the Indenture (a copy of which is on file at the office of the Trustee) and to the Law for a description of the terms on which this Bond is issued, the provisions with regard to the nature and extent of the Revenues (as such term is defined in the Indenture) and the rights thereunder (and limitations thereon) of the registered owner of this Bond and the rights, duties and immunities of the Trustee and the rights and obligations of the Commission thereunder; and all the terms of the Indenture and the Law are hereby incorporated herein and constitute a contract between the Commission and the registered owner of this Bond, and to all the provisions thereof the owner of this Bond, by acceptance hereof, consents and agrees. The registered owner hereof shall have recourse to all of the provisions of the Law and the Indenture and shall be bound by all of the terms and conditions thereof.
This Bond is being issued to finance and refinance the acquisition and construction of improvements to the Enterprise, as more particularly described in the Indenture. This Bond is a special obligation of the Commission and is payable, as to the principal and redemption price thereof, interest thereon, from the revenues of the Enterprise (which, as more particularly defined in the Indenture, are therein and herein called the “Revenues”). This Bond is secured by a pledge of, and charge and lien upon, all of the Revenues, and the Revenues constitute a trust fund for the
133883210.6
- A-4 -
security and payment of the interest on and principal of this Bond, but nevertheless out of the Revenues certain amounts may be applied for other purposes prior to the payment of the interest on or principal of this Bond as provided in the Indenture. Additional series of Bonds and Pari ty Loans payable from the Revenues have been and may be issued on a parity with this Bond, but only subject to the conditions and limitations contained in the Indenture.
The principal of and interest on this Bond are payable solely from the Revenues, and t he Commission is not obligated to pay them except from the Revenues. The Commission has no taxing power. The general fund of the City and County of San Francisco is not liable, and the credit or taxing power of the City and County of San Francisco is not pledged, for the payment of the Bonds or their interest. This Bond is not secured by a legal or equitable pledge of, or charge, lien or encumbrance upon, any of the property of the Commission or any of its income or receipts, except the Revenues. The ow ner hereof has no right to compel the exercise of any taxing power of the City and County of San Francisco.
The rights and obligations of the Commission and the owners of this Bond may be modified or amended at any time in the manner, to the extent and upon the terms provided in the Indenture.
After the Final Disbursement Date (as defined in the WIFIA Project 1 Loan Documents), this Bond shall be subject to redemption prior to the WIFIA Project 1 Bond Final Maturity Date, at the option of the Commission, from and to the extent of any source of available funds, as a whole or in part, from time to time but not more than once annually, in principal amounts of $1,000,000 or any integral multiple of $1 in excess thereof, at a redemption price equal to 100% of the principal amount of this Bond to be redeemed, plus accrued interest thereon to the date fixed for redemption, without premium or penalty. Each optional redemption of this Bond shall be made on such date and in such principal amount as shall be specified by the Commission in a written notice delivered to the WIFIA Lender and the Trustee; provided that the date of any such optional redemption shall be a Semi-Annual Payment date unless otherwise agreed to by the WIFIA Lender.
In the case of any such optional redemption, such written notice shall be delivered to the WIFIA Lender and the Trustee not less than ten (10) days nor more than thirty (30) days prior to the date set for redemption, unless otherwise agreed by the WIFIA Lender with notice to the Trustee. At any time between delivery of such written notice and the applicable optional redemption date, the Commission may, without penalty or premium, rescind its announced optional redemption of this WIFIA Project 1 Bond by further written notice to the WIFIA Lender and the Trustee.
This Bond shall be also subject to redemption prior to its stated maturity, in whole or in part, at a redemption price equal to 100% of the principal amount of this WIFIA Project 1 Bond to be redeemed, plus accrued interest thereon to the date fixed for redemption, without premium, from Net Loss Proceeds in accordance with the WIFIA Project 1 Loan Documents and Section
6.20 of the Indenture. The Commission shall provide, or shall cause the Trustee to provide, written notice to the WIFIA Lender at least two (2) Business Days prior to the date on which it makes any such redemption; provided that the Commission’s failure to deliver such notice shall not diminish, impair or otherwise affect the Commission’s obligation to make any such redemption as and when the circumstances requiring such redemption have occurred under the WIFIA Project 1 Loan Documents and the Indenture.
133883210.6
- A-5 -
This Bond is also subject to mandatory redemption from Minimum Sinking Fund Account Payments on each Principal Payment Date in the amounts set forth on Exhibit A -2 to this Bond (being the “Minimum Sinking Fund Account Payment Schedule”), as adjusted from time to time pursuant to the Sixteenth Supplemental Indenture. The Minimum Sinking Fund Account Payment with respect to this Bond on each Principal Payment Date shall equal the product of the Outstanding WIFIA Project 1 Bond Balance as of the end of the Capitalized Interest Period times the percentage set forth on the Minimum Sinking Fund Account Payment Schedule for such Principal Payment Date. On or before each Disbursement Date, the Commission will provide to the Trustee and the WIFIA Lender an amended Minimum Sinking Fund Account Payment Schedule, approved by the WIFIA Lender, showing the Minimum Sinking Fund Account Payments required to be paid on this WIFIA Project 1 Bond (as increased on such Disbursement Date) on each Principal Payment Date (assuming that the Capitalized Interest Period ends on October 1, 2031). Not later t han thirty (30) days following the end of the Capitalized Interest Period, or, in the event this Bond (or any portion thereof) is deemed purchased and delivered after the end of the Capitalized Interest Period, on the Disbursement Date, the Commission will provide to the Trustee and the WIFIA Lender an amended Minimum Sinking Fund Account Payment Schedule, approved by the WIFIA Lender, showing the Minimum Sinking Fund Account Payment required to be paid on each Principal Payment Date. If the WIFIA Project 1 Bond Final Maturity Date is determined under the WIFIA Project 1 Loan Documents to be earlier than October 1, 2061, the applicable percentages shown in the Minimum Sinking Fund Account Payment Schedule shall be amended so that the percentage allocated to any Principal Payment Date following the earlier WIFIA Project 1 Bond Final Maturity Date will be allocated pro-rata among the Principal Payment Dates occurring prior to the earlier Final Maturity Date, and such calculations shall be included by the Commission in the amended Minimum Sinking Fund Account Payment Schedule provided to the Trustee and the WIFIA Lender pursuant to the preceding sentence, as approved by the WIFIA Lender. In addition, if this Bond is redeemed in part pursuant to the two preceding paragraphs above, each such partial redemption shall result in a reduction of the Minimum Sinking Fund Account Payments on a pro rata basis (or in such other manner approved by the WIFIA Lender) and the Commission shall provide to the Trustee and the WIFIA Lender, not later than thirty (30) days following such optional redemption date, a revised Minimum Sinking Fund Account Payment Schedule, approved by the WIFIA Lender, which schedule shall become effective upon delivery to the Trustee. The WIFIA Lender shall reflect any revisions to Minimum Sinking Fund Account Payments on Exhibit A-2 to this Bond; provided that the failure to make any such revisions shall not affect in any manner the Commission’s obligations under the Sixteenth Supplemental Indenture or under this Bond. The Commission shall not be required to give the WIFIA Lender any prior notice of such Minimum Sinking Fund Account Payment redemption.
This Bond shall be issued as a single, fully registered Bond without coupons, in an aggregate principal amount not to exceed the Maximum Initial Principal Amount plus the Accreted Interest. The principal amount of this Bond may be increased on each Disbursement Date upon satisfaction of the conditions for issuance of such increased principal amount as provided in the Sixteenth Supplemental Indenture.
This Bond is transferable by the registered owner hereof in person or by his attorney duly authorized in writing, at the principal corporate trust office of the Trustee in San Francisco, California, but only in the manner, subject to the conditions and limitations set forth in the Sixteenth Supplemental Indenture and upon payment of the charges provided in the Indenture, and
133883210.6
- A-6 -
upon surrender and cancellation of this Bond. Upon such transfer a new fully registered Bond or Bonds of the same series, and in an aggregate principal amount equal to the Outstanding WIFIA Project 1 Bond Balance so transferred will be issued to the transferee. If less than the entire Outstanding WIFIA Project 1 Bond Balance of this WIFIA Project 1 Bond is so transferred, the Trustee shall authenticate and deliver a separate WIFIA Project 1 Bond or Bonds of the same series to each of the transferor and transferee, reflecting the Outstanding WIFIA Project 1 Bond Balance on each such Bond and the revised Minimum Sinking Fund Account Payments applicable to such Bond.
The Commission and the Trustee may treat the registered owner hereof as the absolute owner hereof for all purposes, and the Commission and the Trustee shall not be affected by any notice to the contrary.
It is hereby certified that all of the conditions, things and acts required to exist, to have happened or to have been performed precedent to and in the issuance of this Bond on each Disbursement Date do exist, have happened or will have been performed in due and regular time, form and manner as required by the Law and the laws of the State of California, and that the amount of this Bond in its maximum principal amount, together with all other obligations of the Commission, does not, and will not, exceed any limit prescribed by the Law or any laws of the State of California, and is not, and will not, be in excess of the amount of Bonds permitted to be issued under the Indenture.
This Bond shall not be entitled to any benefit under the Indenture, or become valid or obligatory for any purpose, until the certificate of authentication and registration hereon endorsed have been signed by the Trustee.
133883210.6
- A-7 -
IN WITNESS WHEREOF, the Public Utilities Commission of the City and County of San Francisco has caused this Bond to be executed on its behalf, signed by the manual or facsimile signatures of its General Manager and of the Controller of the City and County of San Francisco and countersigned by the manual or facsimile signature of its Secretary, all as of the dated date of this Bond.
PUBLIC UTILITIES COMMISSION OF THE
CITY AND COUNTY OF SAN FRANCISCO
General Manager of the Commission
Controller of the City and County of San Francisco
Countersigned:
Secretary of the Commission
133883210.6
- A-8 -
[FORM OF TRUSTEE’S CERTIFICATE OF AUTHENTICATION AND
REGISTRATION TO APPEAR ON THE WIFIA PROJECT 1 BOND]
This Bond is the Bond described in the within- mentioned Indenture, which has been authenticated and registered on the date set forth below.
Dated: ____________________
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By:
Authorized Officer
[FORM OF ASSIGNMENT]
For value received the undersigned do(es) hereby sell, assign and transfer unto ____________________________________ the within- mentioned Registered Bond and hereby irrevocably constitute(s) and appoint(s) _____________________________ attorney, to transfer the same on the books of the Trustee with full power of substitution in the premises.
Dated: ____________________
By:
Authorized Officer
SIGNATURE GUARANTEED BY:
NOTICE: Signature must be guaranteed by a member firm of the New York Stock Exchange or a commercial bank or trust company.
133883210.6
- A-1-1 -
EXHIBIT A-1 TO FORM OF WIFIA PROJECT 1 BOND
OUTSTANDING WIFIA PROJECT 1 BOND BALANCE
Date1 Disbursement
Accreted
Interest
Principal
Payments
Outstanding
WIFIA Project
1 Bond
Balance
1 Semi-Annual Payment Date, Disbursement Date, Date of End of Capitalized Interest Period or Redemption Date (as applicable)
133883210.6
- A-1-2 -
133883210.6
- A-2-1 -
EXHIBIT A-2 TO FORM OF WIFIA PROJECT 1 BOND
MINIMUM SINKING FUND ACCOUNT PAYMENT SCHEDULE
Principal Payment Date Applicable Percentage Minimum Sinking Fund Account Payment
133883210.6
- B- 1 -
1.