Authorize the Issuance of Water Revenue Bonds, 2023 Series C — CleanPowerSF Sfpuc Commission, June 27, 2023 (part 2 of 3)

Information Reporting and Backup Withholding. Interest paid on the 2023CD Bonds will be subject to information reporting in a manner similar to interest paid on taxable obligations. Although such reporting requirement does not, in and of itself, affect the excludability of such interest from gross income for federal income tax purposes, such reporting requirement causes the payment of interest on the 2023CD Bonds to be subject to backup withholding if such interest is paid to be neficial owners who (a) are not “exempt recipients,” and (b) either fail to provide certain identifying information (such as the beneficial owner’s taxpayer identification number) in the required manner or have been identified by the IRS as having failed to report all interest and dividends required to be shown on their income tax returns. Generally, individuals are not exempt recipients, whereas corporations and certain other entities are exempt recipients. Amounts withheld under the backup withholding rul es from a payment to a beneficial owner are allowed as a refund or credit against such beneficial owner’s federal income tax liability so long as the required information is furnished to the IRS.

State Tax Exemption. In the further opinion of Bond Counsel, interest on the 2023CD Bonds is exempt from personal income taxes imposed by the State of California.

Future Developments. Existing law may change to reduce or eliminate the benefit to owners of the 2023CD Bonds of the exclusion of the interest on the 2023CD Bonds from gross income for federal income tax purposes or of the exemption of interest on the 2023CD Bonds from State of California personal income taxation. Any proposed legislation, whether or not enacted, or administrative action, whether or not taken, could also affect the value and marketability of the 2023CD Bonds. Prospective purchasers of the 2023CD Bonds should consult their own tax advisors with respect to any proposed or future change in tax law.

Proposed Form of Opinion. The proposed form of opinion of Bond Counsel regarding the 2023CD Bonds is attached in APPENDIX D.

CERTAIN LEGAL MATTERS
Certain legal matters incident to the authorization, sale and delivery of the 2023CD Bonds are subject to the approval of Norton Rose Fulbright US LLP, San Francisco, California, Bond Counsel to the SFPUC. Certain legal matters are being passed upon for th e SFPUC by the City Attorney and by Orrick, Herrington & Sutcliffe LLP , San Francisco, California, Disclosure Counsel. Certain legal matters are being passed upon for the Underwriters by Hawkins Delafield & Wood LLP, San Francisco , California . Bond Counsel and Disclosure Counsel will receive compensation that is contingent upon the sale and delivery of the 2023CD Bonds.

The form of approving opinion of Bond Counsel is set forth in Appendix D, and will be available at the time of delivery of the 2023CD Bonds. Bond Counsel is not passing upon and undertakes no responsibility for the accuracy, completeness or fairness of the information contained in this Official Statement.

Orrick, Herrington & Sutcliffe LLP has served as Disclosure Counsel to the SFPUC and in such capacity has advised the SFPUC with respect to the requirements of applicable securities laws and participated with responsible SFPUC officials and staff in conferences and meetings where information contained in this Official Statement was reviewed for accuracy and completeness. Disclosure Counsel is not responsible for the accuracy or completeness of the information presented in this Official Statement and has not undertaken to independently verify any of such information. Rather, the SFPUC is solely responsible for the accuracy and completeness of the information contained

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in this Official Statement. Upon the issuance of the 2023CD Bonds, Orrick, Herrington & Sutcliffe LLP will deliver a letter to the SFPUC concerning certain matters with respect to the Official Statement. No purchaser or holder of the 2023CD Bonds, or other person or party other than the SFPUC, will be entitled to rely on such letter or on the fact that Orrick, Herrington & Sutcliffe LLP has acted as Disclosure Counsel to the SFPUC.

RATINGS
Moody’s Investors Service (“ Moody’s”) has assigned its municipal bond rating of “ ___” to the 2023CD Bonds, and S&P Global Ratings, a Standard & Poor’s Financial Services LLC business (“S&P ”), has assigned its municipal bond rating of “AA-” to the 2023CD Bonds.

The ratings assigned by Moody’s and S&P express only the views of the respective rating agencies. The explanation of the significance of these ratings, and any outlook associated with these ratings, may be obtained from Moody’s and S&P, respectively. Each rating agency generally bases its rating on its own investigations, studies, and assumptions. The SFPUC has provided certain additional information and materials to the rating agencies (some of which does not appear in this Official Statement).

A securities rating is not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time. There is no assurance such ratings will continue for any given period of time or that such ratings will not be revised downward or withdrawn entirely by the rating agencies, if in the judgment of such rating agencies, circumstances so warrant. Any such downward revision or withdrawal of such ratings may have an adverse effect on the market price of the 2023CD Bonds. The SFPUC undertakes no responsibility to maintain its current ratings on the 2023CD Bonds or to oppose any such downward revision, suspension or withdrawal.

UNDERWRITING
The 2023CD Bonds are being purchased by Jefferies LLC , as representative on behalf of itself and Wells Fargo Securities , Samuel A. Ramirez & Co., Inc., RBC Capital Markets, UBS Financial Services Inc. and U.S.

Bancorp Investments, Inc. (collectively, the “Underwriters”).

The Underwriters have agreed to purchase from the SFPUC the 2023C Bonds at a purchase price of $________ (consisting of $ ________ aggregate principal amount of the 2023C Bonds, [plus/less] original issue [premium/discount], less an underwriter’s discount of $________ ), and the 2023D Bonds at a purchase price of $________ (consisting of $________ aggregate principal amount of the 2023D Bonds, [plus/less] original issue [premium/discount], less an underwriter’s discount of $ ________). Under the bond purchase contract to be entered into in connection with the purchase of the 2023CD Bonds, the Underwriters will be obligated to purchase all of the 2023CD Bonds if any are purchased, the obligation to make such purchase being subject to certain terms and conditions to be satisfied by the SFPUC.

The Underwriters have certified the reoffering prices or yields set forth on the inside cover page of this Official Statement for the 2023CD Bonds. The SFPUC takes no responsibility for the accuracy of these prices or yields. The Underwriters may offer and sell the 2023C Bonds or 2023D Bonds to certain dealers and others at prices lower than the offering prices stated on the inside cover page. The offering prices may be changed from time to time by the Underwriters.

The Underwriters and their respective affiliates are full service financial in stitutions engaged in various activities, which may include securities trading, commercial and investment banking, advisory, investment management, principal investment, hedging, financing and brokerage activities. Certain of the Underwriters and their respective affiliates have, from time to time, performed, and may in the future perform, various investment banking services for the SFPUC for which they received or will receive customary fees.

In the ordinary course of their various business activities, the Underwriters and their respective affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments (which may include bank loans and/or credit default swaps) for their own account and for

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the accounts of their customers and may at any time hold long and short positions in such securities and instruments.

Such investment and securities activities may involve securities and instruments of the SFPUC.

Jefferies L LC, the senior underwriter of the 2023CD Bonds, is also acting as the Dealer Manager in connection with the tender offer described under “PLAN OF REFUNDING.” The SFPUC has agreed to pay to the Dealer Manager a customary fee for its services and to reimburse the Dealer Manager for its reasonable expenses relating to such tender offer from proceeds of the 2023CD Bonds.

In addition, Jefferies LLC has entered into a buy- side advisory engagement with the City concerning the City’s proposed acquisition of certai n assets of PG&E and may have received or will receive customary fees in connection with such engagement. See “THE PUBLIC UTILITIES COMMISSION – Organization, Purposes and Powers – Hetch Hetchy – Water and Power Operations.”
Wells Fargo Corporate & Investment Banking (which may be referred to elsewhere as “CIB,” “Wells Fargo Securities” or “WFS”) is the trade name used for the corporate banking, capital markets and investment banking services of Wells Fargo & Company and its subsidiaries, including Wells Fargo Bank, National Association (“WFBNA”), a member of the National Futures Association, which conducts its municipal securities sales, trading and underwriting operations through the Wells Fargo Bank, N.A. Municipal Finance Group, a separately identifiable department of WFBNA, registered with the U.S. Securities and Exchange Commission as a municipal securities dealer pursuant to Section 15B(a) of the Securities Exchange Act of 1934.

WFBNA, acting through its Municipal Finance Group, the co -senior underwriter of the 2023CD Bonds, has entered into an agreement (the “WFA Distribution Agreement ”) with its affiliate, Wells Fargo Clearing Services, LLC (which uses the trade name “Wells Fargo Advisors”) (“WFA”), for the distribution of certain municipal securities offerings, including the 2023CD Bonds. Pursuant to the WFA Distribution Agreement, WFBNA will share a portion of its underwriting or remarketing agent compensation, as applicable, with respect to the 2023CD Bonds with WFA.

WFBNA has also entered into an agreement (the “WFSLLC Distribution Agreement”) with its affiliate Wells Fargo Securities, LLC (“ WFSLLC”), for the distribution of municipal securities offerings, including the 2023CD Bonds.

Pursuant to the WFSLLC Distribution Agreement, WFBNA pays a portion of WFSLLC’s expenses based on its municipal securities transactions. WFBNA, WFSLLC, and WFA are each wholly-owned subsidiaries of Wells Fargo & Company.

UBS Financial Services Inc. (“UBS FSI ”) has entered into a distribution and service agreement with it s affiliate UBS Securities LLC (“ UBS Securities ”) for the distribution of certain municipal securities offerings.

Pursuant to such agreement, UBS FSI will share a portion of its underwriting compensation with UBS Securities. UBS FSI and UBS Securities are each subsidiaries of UBS Group AG. “US Bancorp” is the marketing name of U.S. Bancorp and its subsidiaries, including U.S. Bancorp Investments, Inc., which is serving as an Underwriter of the 2023CD Bonds, and U.S. Bank Trust Company, National Association, which is serving as Trustee for the 2023CD Bonds.

FINANCIAL STATEMENTS
Attached as Appendix C are the audited financial statements of the Water Enterprise (the “Financial Statements”) for Fiscal Years 2020-21 and 2021-22, prepared by the SFPUC and audited by KPMG LLP, independent certified public accountants, San Francisco, California (the “Auditor ”). The financial statements are included for convenience.

The audited financial statements of the SFPUC are public documents and the SFPUC has not requested nor did the SFPUC obtain permission from the Auditor to include the audited financial statements as an Appendix to this Official Statement. Accordingly, the Auditor has made no representation in connection with inclusion of the audits herein that there has been no material change in the financial condition of the SFPUC since the most recent audit was concluded. The Auditor has not been engaged to perform and has not performed, since the date of its report included herein, any procedures on the financial statements addressed in that report. The Auditor also has not performed any procedures relating to this Official Statement.

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CONTINUING DISCLOSURE
The SFPUC has covenanted for the benefit of the Owners and Beneficial Owners of the 2023CD Bonds, under a Continuing Disclosure Certificate dated as of the Closing Date, to provide certain financial information and operating data (the “Annual Report”) not later than nine months following the end of its Fiscal Year (presently June 30), beginning on March 31, 2024 , with the report for Fiscal Year 20 22-23, and to promptly provide notices of the occurrence of certain enumerated events set forth in the Continuing Disclosure Certificate (“ Listed Events”).

The SFPUC will file the Annual Report and any notice of Listed Events as described in the Continuing Disclosure Certificate. The specific nature of the information to be contained in the Annual Report or the noti ces of Listed Events is set forth in the Continuing Disclosure Certificate. These covenants have been made in order to assist the Underwriters in complying with the Rule. The form of the Continuing Disclosure Certificate is attached to this Official Statement as Appendix E.

On July 25, 2017, the SFPUC and U.S. Bank National Association (“U.S. Bank ”) entered into revolving credit agreements (the “Revolving Credit Agreements ”) providing for the extension of credit to the SFPUC in the amount of $100,000,000 for the Water Enterprise and $75,000,000 for the Wastewater Enterprise. The SFPUC has not drawn on either credit facility and has no outstanding obligations thereunder. On January 7, 2022, the SFPUC and U.S. Bank entered into amendments to the Revolving Credit Agreements extending the respective commitment expiration dates to July 18, 2024. The SFPUC filed Listed Event notices with respect to such extensions on February 3, 2022.

CO-MUNICIPAL ADVISORS
Montague DeRose and Associates, LLC, Walnut Creek, California, and Backstrom McCarley Berry & Co., LLC, San Francisco, California (the “Co -Municipal Advisors”), are acting as co -municipal advisors to the SFPUC with respect to the 2023CD Bonds. The Co-Municipal Advisors have assisted the SFPUC in the preparation of this Official Statement and in other matters relating to the planning, structuring, execution and delivery of the 2023CD Bonds. The Co-Municipal Advisors have not independently verified any of the data contained herein or conducted a detailed investigation of the affairs of the SFPUC to determine the accuracy or completeness of this Official Statement.

Because of its limited participation, the Co -Municipal Advisors assume no responsibility for the accuracy or completeness of any of the information contained herein. The Co- Municipal Advisors will not purchase or make a market in any of the 2023CD Bonds.

The compensation to be received by the Co- Municipal Advisors from the SFPUC for services provided in connection with the planning, structuring, execution and delivery of the 2023CD Bonds is contingent upon the sale and delivery of the 2023CD Bonds.

VERIFICATION OF MATHEMATICAL ACCURACY
Upon delivery of the 2023CD Bonds, __________, __________, will deliver a report on the mathematical accuracy of certain computations, contained in schedules provided to them on behalf of the SFPUC, relating to (a) the sufficiency of the anticipated receipts from the cash deposited in the Escrow Fund to redeem the Advance Refunded Bond to be refunded in full, and (b) the “yield” on the investments deposited in the Escrow Fund for the Advance Refunded Bonds and on the 2023CD Bonds considered by Bond Counsel in connection with the opinion rendered by such firm that the 2023CD Bonds are not “arbitrage bonds” within the meaning of Section 148 of the Tax Code, as amended. See “PLAN OF REFUNDING.”

MISCELLANEOUS
References made in this Official Statement to certain documents and reports are brief summaries thereof that do not purport to be complete or definitive, and reference is made to such documents and reports for full and complete statements of the contents thereof.

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The appendices to this Official Statement are integral parts of this Official Statement. Investors must read the entire Official Statement, including the appendices, to obtain information essential to making an informed investment decision.

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APPROVAL AND DELIVERY
This Official Statement has been duly approved, executed and delivered by the SFPUC.

PUBLIC UTILITIES COMMISSION OF THE

CITY AND COUNTY OF SAN FRANCISCO
By:

General Manager

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APPENDIX A

SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE
This Appendix contains summaries of certain provisions of the Indenture, which are in addition and complementary to the summaries found in the Official Statement under the captions “INTRODUCTION,” “ THE 2023CD BONDS” and “SECURITY FOR THE BONDS.” The following summaries are qualified in their entirety by reference to the Indenture, a copy of which can be obtained from the SFPUC.

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APPENDIX B

SUMMARY OF CERTAIN PROVISIONS OF THE WATER SUPPLY AGREEMENT The following brief summary of certain provisions of the Water Supply Agreement is subject in all respects to all of the provisions of such document. This brief summary does not purport to be a complete statement of said provisions and prospective purchasers of the 2023CD Bonds are referred to the complete text of said document.

Definitions
“1984 Agreement” refers to the 1984 Settlement Agreement and Master Water Sales Contract between the City and County of San Francisco and certain Suburban Purchasers in San Mateo County, Santa Clara County and Alameda County, which expired on June 30, 2009.
“Act” refers to the Raker Act, 38 Stat. 242, the Act of Congress, enacted in 1913, that authorized the construction of the Hetch Hetchy system on federal lands. “Adjusted Proportional Annual Use” means the respective percentages of annual water use, as adjusted to reflect deliveries of water by the Hetch Hetchy Water & Power Project to outside City Retail Customers. “Agreement” refers to the Water Supply Agreement, by and among San Francisco and the Wholesale Customers who approve the Agreement.
“BAWSCA” refers to the Bay Area Water Supply and Conservation Agency established pursuant to Division 31 of the California Water Code (Water Code §§81300-81461) or its successor and permitted assigns. “CEQA” refers to the California Environmental Quality Act found at §§21000 et seq. of the Public Resources Code and the Guidelines for the California Environmental Quality Act found at §§15000 et seq. of Title 14 of the California Code of Regulations, as amended from time to time. “Commission” means the governing board of the SFPUC.
“Debt Service” means principal and interest paid during a fiscal year on Indebtedness incurred by the SFPUC the proceeds of which are used or are scheduled to be used for the acquisition or construction of New Regional Assets or to refund such Indebtedness.
“Direct Retail ” refers to Regional Water System capital or operating expenditures that are incurred to provide water service solely to Retail Customers.
“Direct Wholesale” refers to Regional Water System capital or operating expenditures that are incurred to provide water service solely to one or more Wholesale Customers. “Drought” means a water shortage caused by lack of precipitation, as reflected in resolutions of the Commission calling for voluntary or mandatory water rationing based on evaluation of water stored or otherwise available to the Regional Water System, whether or not the Commission declares a water shortage emergency pursuant to Water Code §§ 350 et seq., as amended from time to time. “Emergency” means a sudden, non-drought event, such as an earthquake, failure of Regional Water System infrastructure or other catastrophic event or natural disaster that results in an insufficient supply of water available to the Retail or Wholesale Service Areas for basic human consumption, firefighting, sanitation, and fire protection. “Encumbrance” or “Encumber” refers to the process by which the City Controller certifies the availability of amounts previously appropriated by the Commission for specifically identified SFPUC capital projects performed either by third parties or through work orders to other San Francisco departments.

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“Environmental Enhancement Surcharge ” means the surcharge to be imposed by the SFPUC on individual parties to the Agreement whose use exceeds their Interim Supply Allocation when the collective use of water by all parties to the Agreement is in excess of the Interim Supply Limitation. “Excess Use Charges” are monthly charges set by the SFPUC, in the form of multipliers, that are applied to the Wholesale Customer water rates during times of mandatory rationing if a Wholesale Customer’s water usage is greater than its shortage allocation.
“Fundamental Rights” of Wholesale Customers are their status as parties to the Agreement, their allocation of water recognized in the Agreement, their protection against arbitrary, unreasonable, or unjustly discriminatory rates and any other specific rights described in the Agreement. “Hetch Hetchy Enterprise” refers to Hetch Hetchy Water and Power Enterprise, a SFPUC operating department.
“Indebtedness” includes revenue bonds, bond anticipation notes, certificates of participation (excluding certificates of participation towards which SFPUC contributes debt service as an operating expense), and commercial paper.
“Individual Water Sales Contract ” refers to the contracts between each Wholesale Customer and San Francisco that details customer-specific matters such as location of service connections, service area maps and other matters specific to that customer.
“Individual Supply Guarantee” refers to each Wholesale Customer’s share of the Supply Assurance. “Interim Supply Allocation” refers to each Wholesale Customer’s share, to be established by the SFPUC of the Interim Supply Limitation.
“Interim Supply Limitation” refers to the 265 MGD annual average limitation on water deliveries from Regional Water System watersheds.
“Joint,” when used in connection with Hetch Hetchy Enterprise assets or expenses, refers to assets used or expenses incurred in providing both water supply (“Water -Related”) and in the generation and transmission of electrical energy (“Power-Related”).
“Local System Water” refers to Regional Water System water supplies developed in San Mateo, Alameda and Santa Clara Counties or otherwise not produced by the Hetch Hetchy Enterprise under rights of way granted by the Act.
“MGD” refers to an average flow rate of one million gallons per day over a specific time period, often a year.

For example, one MGD is equal to 365 million gallons per year or 1,120 acre feet per year. “Minimum Annual Purchase Quantity” means the minimum amount of water that a Wholesale Customer that has as Individual Supply Guarantee agrees to purchase from San Francisco annually. “Net Annual Debt Service” refers to debt service less payments made from proceeds of Indebtedness (e.g., capitalized interest), earnings on bond proceeds (e.g., reserve fund earnings) used to pay Debt Service, and interest paid from renewed commercial paper, or from reserve fund liquidation. “New Assets” refers to Regional and Hetch Hetchy Water -Only and Water -Related capital assets added to Regional Water System plant in service after June 30, 2009.

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“New Regional Assets ” refers to New Assets placed in service on or after July 1, 2009 that are used and useful in delivering water to Wholesale Customers. The following four categories comprise New Regional Assets:

1. Water Enterprise Regional Assets

2. Water Enterprise Direct Wholesale Assets

3. Hetch Hetchy Water Only Assets

4. Water-Related portion (45 percent) of Hetch Hetchy Joint Assets “Power-Only,” when used with reference to Hetch Hetchy Enterprise capital costs and operating and maintenance expenses, means capital costs and expenses that are incurred solely for the construction and operation of assets used to generate and transmit electrical energy. “Power-Related” refers to the power related portion (55%) of Joint Hetch Hetchy Enterprise assets or expenses.
“Proportional Annual Use” means the shares of deliveries from the Regional Water System used by City Retail Customers and by the Wholesale Customers in a fiscal year, expressed as a percentage. “Proportional Water Use” refers the general principle of allocating Regional Water System costs based on the relative purchases of water by Retail and Wholesale Customers. “Regional,” when used with reference to Water Enterprise capital assets and operating expenses, refers to assets and expenses that benefit Wholesale and Regional Customers. “Regional Water System ” means the water storage, transmission and treatment system operated by the SFPUC in Tuolumne, Stanislaus, San Joaquin, Alameda, Santa Clara, San Mateo and San Francisco counties, including projects constructed under the WSIP, but excluding Direct Retail and Direct Wholesale assets. “Retail Customers” means any customer that purchases water from San Francisco that is not a Wholesale Customer, whether located inside or outside of San Francisco. “Retail Service Area” means the areas where SFPUC sells water to Retail Customers. “Retail Water” means water sold by the SFPUC to its Retail Customers within and outside San Francisco. “San Francisco” refers to the City and County of San Francisco. “SFPUC” refers to the San Francisco Public Utilities Commission as an operating department of San Francisco, the General Manager of which reports to the Commission. “Substantially Expended,” when used with respect to a specific bond issue, means 98% of the proceeds from that bond issue and investment earnings contributed to the project fund have been expended. “Supply Assurance” means the 184 MGD maximum annual average metered supply of water dedicated by San Francisco to public use in the Wholesale Service Area (not including San José and Santa Clara). “Temporary Modified Minimum Annual Purchase Quantity ” means the minimum amount of water that a Wholesale Customer that has an Individual Supply Guarantee, which has received a permanent transfer of a portion of Individual Supply Guarantee and a portion of Minimum Annual Purchase Quantity, agrees to purchase from San Francisco on a temporary annual basis.

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“Term” means the 25 -year term of the Agreement commencing July 1, 2009, including one or both 5- year extensions authorized by the Agreement.
“Tier 1 Shorta ge Plan ” refers to the Water Shortage Allocation Plan, adopted by the SFPUC and the Wholesale Customers in conjunction with the Agreement describing the method for allocating water between the SFPUC and the Wholesale Customers collectively for shortages of up to 20% of deliveries from the Regional Water System, as amended from time-to-time.
“Water Enterprise” refers to the San Francisco Water Department (SFWD), an SFPUC Operating Department.
“Water Management Charge” refers to the charge collected by San Francisco on behalf of BAWSCA for local water resource development in the Wholesale Service Area. “Water-Only,” when used with reference to Hetch Hetchy Enterprise capital costs and operating and maintenance expenses, means capital costs and expenses that are incurred solely for the construction and operation of assets used to protect water quality or to provide for the delivery of water for consumptive purposes. “Water-Related” refers to the water related portion (45%) of Joint Hetch Hetchy Enterprise assets or expenses.
“Wheeling Statute” refers to Article 4 of Chapter 11 of the California Water Code, as amended from time to time.
“Wholesale Capital Fund” is the account established by the SFPUC for deposit of Wholesale Customer revenue that is used to fund the wholesale share of revenue-funded New Regional Assets. “Wholesale Customer” or “Customers” means one or more of the 26 water customers that are contracting for purchase of water from San Francisco pursuant to the Agreement. Cordilleras Mutual Water Comp any is a wholesale customer of the SFPUC, but is not a party to Water Supply Agreement and is not a “Wholesale Customer.” “Wholesale Revenue Coverage” refers to the additional dollar amount included in wholesale rates each fiscal year that is charged to Wholesale Customers by the SFPUC for their proportionate share of Debt Service coverage.
“Wholesale Revenue Coverage Reserve” refers to the account established by the SFPUC for deposit of Wholesale Revenue Coverage.
“Wholesale Revenue Requirement” means the calculated Wholesale Customer portion of SFPUC Regional Water System capital and operating costs.
“Wholesale Service Area” means the combined service areas of the Wholesale Customers, as delineated on the service area maps attached to each Individual Water Sales Contract. “WSIP” refers to the Water System Improvement Program approved by the Commission in Resolution No. 08-0200 on October 30, 2008, as amended from time to time.

Term
The Term of the Agreement is twenty-five (25) years. The Term began on July 1, 2009 and ends on June 30, 2034.

In December 2031, the SFPUC may provide written notice to the Wholesale Customers that it is willing to extend the Term of the Agreement. Between January 1, 2032 and June 30, 2032, any Wholesale Customer may accept the SFPUC’s offer to extend the Term by providing a written notice of extension to the SFPUC. If such notices of

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extension are received from Wholesale Customers representing at least two- thirds in number as of June 30, 2032 and seventy five percent (75%) of the quantity of water delivered by the SFPUC to all Wholesale Customers during fiscal year 2030-31, the Term shall be extended for another five (5) years (“First Extension Term”), through June 30, 2039.

No party to the Agreement which does not wish to remain a party during the Extension Term shall be compelled to do so by the actions of other parties.

In December 2036, the SFPUC may provide written notice to the Wholesale Customers that it is willing to extend the Term of the Agreement. Between January 1, 2037 and June 30, 2037, any Wholesale Customer may accept the SFPUC’s offer to extend the Term by providing a written notice of extension to the SFPUC. If such notices of extension are received from Wholesale Customers representing at least two- thirds in number as of June 30, 2037 and seventy five percent (75%) of the quantity of water delivered by the SFPUC to all Wholesale Customers during fiscal year 2035-36, the Term shall be extended for another five (5) years (“Second Extension Term”), through June 30, 2044. No party to the Agreement which does not wish to remain a party during the Extension Term shall be compelled to do so by the actions of other parties.

Amendments to Agreement
The Agreement may be amended with the written consent of San Francisco and of Wholesale Customers representing at least two -thirds in number and seventy five percent (75%) of the quantity of water delivered by San Francisco to all Wholesale Customers during the fiscal year immediately preceding the amendment.

No amendment which adversely affects a Fundamental Right of a Wholesale Customer may be made without the written consent of that customer.

Supply Assurance
San Francisco agrees to deliver water to the Wholesale Customers up to the amount of the Supply Assurance.

Water delivered by San Francisco to Retail Customers shall not be included in the Supply Assurance. Such commitment is subject to the Interim Supply Limitation provisions in the Agreement.

Both the Supply Assurance and the Individual Supply Guarantees identified are expressed in terms of daily deliveries on an annual average basis and do not themselves constitute a guarantee by San Francisco to meet peak daily or hourly demands of the Wholesale Customers, irrespective of what those peak demands may be. The parties acknowledge, however, that the Regional Water System has been designed and constructed to meet peak daily and hourly demands and that its capacity to do so has not yet been reached. San Francisco agrees to operate the Regional Water System to meet peak requirements of the Wholesale Customers to the extent possible without adversely affecting its ability to meet peak demands of Retail Customers. The Agreement shall not preclude San Francisco from undertaking to meet specific peak demand requirements of individual Wholesale Customers in their Individual Water Sales Contracts.

The Supply Assurance is perpetual and shall survive the expiration or earlier termination of the Agreement.

Similarly, the Individual Supply Guarantees and/or the Individual Wate r Sales Contracts are perpetual and shall survive the expiration or earlier termination of the Agreement or the Individual Water Sales Contracts.

The amount of water made available by San Francisco to the Wholesale Customers is subject to reduction, to the extent and for the period made necessary by reason of water shortage, Drought, Emergencies, or by malfunctioning or rehabilitation of facilities in the Regional Water System. The amount of water made available to the Wholesale Customers may not be reduced, however, merely because the water recycling and groundwater projects which WSIP envisions to be constructed within San Francisco, or the conservation programs intended to reduce water use by Retail Customers that are included in the WSIP, do not generate the yield or savings (10 MGD combined) anticipated by San Francisco.

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Allocation of Supply Assurance
A portion of the Supply Assurance has been allocated among 24 of the 26 Wholesale Customers. Three Wholesale Customers do not have Individual Supply Guarantees. The cities of San José and Santa Clara do not have an Individual Supply Guarantee because San Francisco has provided water to them on a temporary and interruptible basis. The City of Hayward does not have an Individual Supply Guarantee because of the terms of the 1962 contract between it and San Francisco.

If the total amount of water delivered by San Francisco to Hayward and to the Wholesale Customers with Individual Supply Guarantees exceeds 184 MGD over a period of three consecutive fiscal years (i.e., July 1 through June 30), then the Individual Supply Guarantees of those Wholesale Customers shall be reduced pro rata so that their combined entitlement and the sustained use by Hayward does not exceed 184 MGD.

It is the responsibility of each Wholesale Customer to limit its purchases of water from San Francisco so as to remain within its Individual Supply Guarantee. San Francisco is not liable to any Wholesale Customer or obligated to supply more water to any Wholesale Customer individually or to the Wholesale Customers collectively than the amount to which it or they are otherwise entitled under the Agreement due to the use by any Wholesale Customer of more water than the amount to which it is entitled under the Agreement.

San Francisco installs such new connections between the Regional Water System and the distribution system of any Wholesale Customer that are necessary to deliver the quantities of water to which the Wholesale Customer is entitled under the Agreement. San Francisco has the right to determine the location of such connections, in light of the need to maintain the structural integrity of the Regional Water System and, where applicable, the need to limit peaking directly off of Regional Water System pipelines by a Wholesale Customer’s indi vidual retail customers, the need to ensure that a Wholesale Customer’s individual retail customers have access to alternative sources of water in the event of a reduction in San Francisco’s ability to provide them with water, and other factors which may a ffect the desirability or undesirability of a particular location.

Wholesale Customer Service Areas
A Wholesale Customer may not deliver water furnished to it by San Francisco outside the boundary of its service area without the prior written consent of San Francisco, except for deliveries to another Wholesale Customer on an emergency and temporary basis. San Francisco may refuse a Wholesale Customer’s request to expand its service area on any reasonable basis.

If two or more Wholesale Customers agree to adjust the boundaries of their respective service areas so that one assumes an obligation to serve customers in an area that was previously within the service area of another Wholesale Customer, they may also correspondingly adjust their respective Individual Supply Guarantees. Such adjustments require only the consent of San Francisco and the Wholesale Customers involved, so long as the Supply Assurance and the Individual Supply Guarantees of other Wholesale Customers are not affected.

San Francisco acknowledges that it has heretofore consented in writing to deliveries of water by individual Wholesale Customers outside their service area boundaries and agrees that nothing in the Agreement is intended to affect such prior authorizations, which remain in full force and effect according to their terms.

Permanent Transfers of Individual Supply Guarantees and Minimum Annual Purchase Quantities A Wholesale Customer that has an Individual Supply Guarantee may transfer a portion of it to one or more other Wholesale Customers; transfers of a portion of an Individual Supply Guarantee must be permanent; and transfers of portions of Individual Supply Guarantees are subject to approval by the SFPUC. SFPUC review is limited to (1) whether a proposed transfer complies with the Act, and (2) whether the affected facilities in the Regional Water System have sufficient capacity to accommodate delivery of the increased amount of water to the proposed transferee.

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Transfers of a portion of a Minimum Annual Purchase Quantity may be included in transfers of a portion of an Individual Supply Guarantee and are subject to the same requirements for Individual Supply Guarantee transfers as well as certain additional conditions.

Restrictions on Resale
Each Wholesale Customer agrees that it will not sell any water purchased from San Francisco to a private party for resale by such private party to others in violation of the Act.

Each Wholesale Customer also agrees that it will not sell water purchased from San Francisco to another Wholesale Customer without prior written approval of the SFPUC, except on a temporary and emergency basis. The SFPUC agrees that it will not unreasonably withhold its consent to a request by a Wholesale Customer to deliver water to another Wholesale Customer for resale.

Conservation; Use of Local Sources
Each Wholesale Customer shall take all actions within its legal authority related to water conservation that are necessary to insure that the SFPUC (a) remains eligible for (i) state and federal grants and (ii) access to the Drought Water Bank operated by the California Department of Water Resources, as well as other Drought -related water purchase or transfer programs, and (b) complies with future legal requirements imposed on the Regional Water System by the federal government, the State, or any other third party as conditions for receiving funding or water supply.

San Francisco and each Wholesale Customer agree that they will diligently apply their best efforts to use both surface water and groundwater sources located within their respective service areas and available recycled water to the maximum feasible extent, taking into account the environmental impacts, the public health effects and the effects on supply reliability of such use, as well as the cost of developing such sources.

Restrictions on Purchases of Water from Others; Minimum Annual Purchases Each Wholesale Customer (except for Alameda County Water District and the cities of Milpitas, Mountain View and Sunnyvale) agrees that it will not contract for, purchase or receive, with or without compensation, directly or indirectly, from any person, corporation, governmental agency or other entity, any water for delivery or use within its service area without the prior written consent of San Francisco.

The prohibition in the preceding sentence does not apply to:

1. recycled water;

2. water necessary on an emergency and temporary basis, provided that the Wholesale Customer promptly gives San Francisco notice of the nature of the emergency, the amount of water that has been or is to be purchased, and the expected duration of the emergency; or

3. water in excess of a Wholesale Customer’s Individual Supply Guarantee.

Alameda County Water District and the cities of Milpitas, Mountain View and Sunnyvale may purchas e water from sources other than San Francisco, provided that San Francisco shall require that each purchase a minimum annual quantity of water from San Francisco. These Minimum Annual Purchase Quantities are set out in the Agreement and the Individual Wate r Sales Contracts between San Francisco and each of these four Wholesale Customers, and a portion of such a quantity may be transferred to another Wholesale Customer at the same time as a transfer of a portion of Individual Supply Guarantee. Certain Wholesale Customers may also be required to purchase Temporary Modified Minimum Annual Purchase Quantities from San Francisco.

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Water Quality
San Francisco shall deliver treated water to Wholesale Customers (except Coastside County Water District, which receives untreated water from Crystal Springs and Pilarcitos Reservoirs) that complies with primary maximum contaminant level and treatment technique standards at the regulatory entry points designated in the San Francisco Regional Water System Domestic Water Supp ly Permit (currently Permit No. 02-04-04P3810001) issued by the California Department of Public Health.

Regional Water System Repair, Maintenance and Operation San Francisco will keep the Regional Water System in good working order and repair consistent with prudent utility practice.

San Francisco will continue to operate its reservoirs in a manner that assigns higher priority to the delivery of water to the Bay Area and the environment than to the generation of electric power. The SFPUC, as the Regional Water System operator, is solely responsible for making day-to-day operational decisions.

Shortages
Notwithstanding San Francisco’s obligations to deliver the Supply Assurance to the Wholesale Customers collectively and the Individual Supply Guarantees to Wholesale Customers individually, San Francisco may reduce the amount of water available or interrupt water deliveries to specific geographical areas within the Regional Water System service area to the extent that such reductions are necessary due to Emerge ncies, or in order to install, repair, rehabilitate, replace, investigate or inspect equipment in, or perform other maintenance work on, the Regional Water System. Such reductions or interruptions may be imposed by San Francisco without corresponding reduc tions or interruptions in the amount of water available to SFPUC water users outside the specific geographical area where reductions or interruptions are necessary, if the system’s ability to supply water outside the specific geographical area has not been impaired. In the event of such a reduction or interruption, San Francisco will restore the supply of water to the specific geographical area as soon as is possible.

Following a major system emergency event, the SFPUC will work closely with its Wholesale C ustomers to monitor customer demand, including the demand source. In the event that any individual Wholesale Service Area or Retail Service Area customer’s uncontrolled distribution system leaks could result in major water waste and endanger the supply provided by the Regional Water System as a whole, flow through some customer connections may need to be temporarily reduced or terminated. SFPUC will work closely with customers to assess the nature of the demand (e.g. fire-fighting versus leakage), so that public health and safety protection can be given top priority.

1. All emergencies that require use of non -potable source water will require use of chlorine, or other suitable disinfectant, if feasible.

2. San Francisco will use its best efforts to meet the seismic reliability and delivery reliability level of service goals adopted by the Commission in conjunction with the WSIP. San Francisco will distribute water on an equitable basis throughout the Regional Water System service area following a regional Emergency, subject to physical limitations caused by damage to the Regional Water System.

Notwithstanding San Francisco’s obligations to deliver the Supply Assurance to the Wholesale Customers collectively and the Individual Supply Guarantees to Wholesale Customers individually, San Francisco may reduce the amount of water available to the Wholesale Customers in response to Drought.

1. The Tier 1 Shortage Plan set forth in the Agreement will continue to be used to allocate water from the Regional Water System between Retail and Wholesale Customers during system -wide shortages of 20% or less.

2. San Francisco and the Wholesale Customers may negotiate in good faith revisions to the Tier 1 Shortage Plan to adjust for and accommodate anticipated changes due to demand hardening in the SFPUC’s Wholesale and Retail Service Areas. Until agreement is reached, the current Tier 1 Shortage Plan will remain in effect.

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3. The SFPUC will honor allocations of water among the Wholesale Customers (“Tier 2 Allocations”) provided by BAWSCA or if unanimously agreed to by all Wholesale Customers. If BAWSCA or all Wholesale Customers do not provide the SFPUC with Tier 2 Allocations, then the SFPUC may make a final allocation decision after first meeting and discussing allocations with BAWSCA and the Wholesale Customers. For Regional Water System shortages in excess of 20%, San Francisco shall (a) follow the Tier 1 Shortage Plan allocations up to the 20% reduction, (b) meet and discuss how to implement incremental reductions above 20% with the Wholesale Customers, and (c) make a final determination of allocations above the 20% reduction. After the SFPUC has made the final allocation decision, the Wholesale Customers shall be free to challenge the allocation on any applicable legal or equitable basis.

4. San Francisco will use its best efforts to identify potential sources of dry year water supplies and establish the contractual and other means to access and deliver those supplies in sufficient quantity to meet a goal of not more than 20% system-wide shortage in any year of the design drought.

Wheeling of Water from Outside SFPUC System
Subject to the Wheeling Statute, the SFPUC will not deny use of Regional Water System unused capacity for wheeling when such capacity is available for wheeli ng purposes during periods when the SFPUC has declared a water shortage emergency under Water Code Section 350 if the following conditions are met:

A. The transferor pays reasonable charges incurred by the SFPUC as a result of the wheeling, including capital, operation, maintenance, administrative and replacement costs (as such are defined in the Wheeling Statute).

B. Wheeled water that is stored in the Regional Water System spills first.

C. Wheeled water will not unreasonably: (1) impact fish and wildlife resources in Regional Water System reservoirs; (2) diminish the quality of water delivered for consumptive uses; or (3) increase the risk of exotic species impairing Regional Water System operations. The transferor may at its own expense provide for treatment to mitigate these effects.

D. Priority will be given to wheeling by Wholesale Customers or BAWSCA over arrangements for third-party public entities.

Limits on New Customers
Until December 31, 2028, San Francisco will not enter into contracts to supply water to any entity other than a Wholesale Customer (whether permanent or temporary, firm or interruptible) unless:

1. It completes any necessary environmental review under CEQA of the proposed new wholesale water service obligations;

2. It concurrently completes any necessary environmental review under CEQA and commits to make both San José and Santa Clara permanent customers with Individual Supply Guarantees equal to at least 9 MGD; and

3. The Agreement is amended to incorporate any commitments to proposed new wholesale customers and to San José and Santa Clara, and to address the effects, if any, of the new customer(s) on water supply reliability, water quality and cost to existing customers of the Regional Water System.

As of January 1, 2029, San Francisco will not enter into contracts to supply water to any entity other than a Wholesale Customer (whether permanent or temporary, firm or interruptible) unless:

1. It completes any necessary environmental review under CEQA of the proposed new wholesale water service obligations;

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3. Doing so increases the reliability of the Regional Water System; and

4. The Agreement is concurrently amended (a) to reflect that increased reliability by means of an increased commitment by San Francisco to deliver water during Droughts and (b) to address the effects, if any, of the new customer(s) on water supply, water quality and cost to existing customers of the Regional Water System.

San Francisco may enter into new retail water service obligations outside of the City and County of San Francisco:

1. Only in Alameda, San Mateo, Santa Clara, San Joaquin and Tuolumne Counties;

2. That are within or immediately adjacent to areas in which it currently serves other Retail Customers; and

3. Until the aggregate additional demand represented by the new retail customers reaches 0.5 MGD.

The limitations on serving new Retail Customers described in this subsection do not apply to historical obligations to supply water that may be contained in prior agreements between the SFPUC or its predecessor the Spring Valley Water Company, and individual users or property owners located adjacent to Regional Water System transmission pipelines.

Subject to completion of necessary environmental review under CEQA, San Francisco may at any time enter into water exchanges or cost sharing agreements with other water suppliers to enhance dry year or normal year water deliveries, provided that San Francisco cannot incur new water service obligations to such other water suppliers unless the requirements for taking on new wholesale customers are met.

New Sources of Water Supply to Maintain Supply Assurance Sudden and unanticipated events may require San Francisco to act promptly to protect the health, safety and economic well -being of its Retail and Wholesale Customers. Such sudden events include, but are not limited to drought, earthquakes, terrorist acts, catastrophic failures of facilities owned and operated by San Francisco, and other natural or man-made events. If such events diminish San Francisco’s ability to maintain the Supply Assurance, San Francisco may increase the Wholesale Revenue Requirement to pay for planning, evaluation and implementation of replacement sources of supply when such needs arise and without the prior approval of the Wholesale Customers.

Climate change, regulatory actions and other events may impact San Francisco’s ability to maintain the Supply Assurance from its existing surface water supplies, but on timescales long enough to permit San Francisco to collaborate with its Wholesale Customers on how best to address possible impacts to water supply. If such events diminish San Francisco’s ability to maintain the Supply Assurance, San Francisco may increase the Wholesale Revenue Requirement to pay for planning, evaluation and implementation of replacement sources of supply when such needs arise and without the prior approval of the Wholesale Customers.

New Sources of Water Supply to Increase Supply Assurance San Francisco may offer to increase the Supply Assurance at the request of some or all of its Wholesale Customers. Costs associate d with providing additional water from its existing water supplies in San Mateo, Santa Clara, Alameda, Tuolumne, and Stanislaus Counties shall be allocated to Wholesale and Retail Customers as described in the Agreement.

If San Francisco seeks to develop additional water supplies from new sources to increase the Supply Assurance available to Wholesale Customers, studies and resulting water supply projects will be conducted jointly with BAWSCA under separate agreement(s) specifying the purpose of the project s, the anticipated regional benefits

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and how costs of studies and implementation will be allocated and charged. Nothing in the Agreement shall serve as precedent for the allocation of such new supply capital costs between Retail and Wholesale Customers or associated operational expenses, which shall only occur following approval of both parties and amendment of the Agreement, if necessary.

Interim Supply Limitation Imposed by SFPUC
In adopting the WSIP in Res. No. 08- 0200, the Commission included full implementation of all proposed WSIP capital improvement projects to achieve level of service goals relating to public health, seismic safety, and delivery reliability, but decided to adopt a water supply element that includes the Interim Supply Limitation. The Interim Supply Limitation is allocated as follows between Retail and Wholesale Customers:

Retail Customers’ allocation: 81 MGD
Wholesale Customers’ allocation: 184 MGD
The Wholesale Customers’ collective allocation of 184 MGD under the Interim Supply Limitation includes the demand of the cities of San José and Santa Clara, whose demand is not included in the Supply Assurance.

Transfers of Interim Supply Allocations
Any Wholesale Customer, including Hayward, may transfer a portion of its Interim Supply Allocation to one or more other Wholesale Customers. All Wholesale Customers are also eligible transferees, including California Water Service Company up to its Individual Supply Guarantee. Transfers of a portion of an Interim Supply Allocation must be prospective. The duration of a transfer cannot be less than the balance of the fiscal year. Transfers of portions of Interim Supply Allocations are subject to approval by the SFPUC. SFPUC review is limited to determining (1) whether a proposed transfer complies with the Act, and (2) whether the affected facilities in the Regional Water System have sufficient capacity to accommodate delivery of the increased amount of water to the proposed transferee.

Maintenance of Condition of Hetch Hetchy Reservoir
San Francisco may not change the existing condition of the Hetch Hetchy Reservoir by:

1. Abandoning or decommissioning O’Shaughnessy Dam; or

2. Draining Hetch Hetchy Reservoir, except for purposes of (i) repair, rehabilitation, maintenance, improvement, or reconstruction of O’Shaughnessy Dam or appurtenances, (ii) supplying water to the Bay Area during drought, or (iii) meeting water release requirements under the Raker Act, or federal or state law unless the parties enter into an amendment to the Water Supply Agreement.

Environmental Enhancement Surcharge
For the duration of the Interim Supply Limitation, the Commission will establish the Environmental Enhancement Surcharge concurrently with the budget -coordinated rate process set forth in the Agreement. The monetary amount of the Environmental Enhancement Surcharge per volume of water, such as dollars per acre -foot, will be equivalent for Retail Customer use in excess of 81 MGD and Wholesale Customer use in excess of 184 MGD.

The Environmental Enhancement Surcharge will be levied only if and when combined Retail Customer and Wholesale Customer purchases exceed the Interim Supply Limitation of 265 MGD and if the fund described below has been established by the San Francisco Board of Supervisors. In that event, the Environmental Enhancement Surcharge will apply to Retail Customers for use in excess of 81 MGD and to individual Wholesale Customers for use in excess of their Interim Supply Allocations established by the Commission.

1. Environmental Enhancement Surcharges rel ated to the Retail Customers’ use in excess of their 81 MGD Retail Customer Allocation will be paid by the SFPUC, and no portion of such surcharges

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may be allocated to Wholesale Customers. The method of recovering the Environmental Enhancement Surcharges imposed upon Retail Customers shall be within the sole discretion of the SFPUC.

2. Environmental Enhancement Surcharges related to the individual Wholesale Customers’ use in excess of their respective Interim Supply Allocations will be paid to the SFPUC by individual Wholesale Customers.

Environmental Enhancement Surcharges paid by the SFPUC and by Wholesale Customers will be placed into a restricted reserve fund. The SFPUC will request the San Francisco Board of Supervisors to establish this fund by ordinance and, if adopted, the fund will be subject to the following restrictions:

1. Interest earnings will stay in the reserve fund.

2. The reserve fund shall (a) be subject to automatic appropriation; (b) require unexpended and unencumbered fund balances to be carried forward from year to year; and (c) not be transferred to the San Francisco General Fund.

3. The reserve fund may be used only for specific environmental restoration and enhancement measures for the Sierra and local watersheds, such as those included in the Watershed Environmental Improvement Program.

4. Environmental Enhancement Surcharge proceeds shall be expended in an expeditious manner. Any Environmental Enhancement Surcharge proceeds that remain in the reserve fund as of December 31, 2018 shall be used to complete projects previously approved. Upon completion of the identified projects, the balance of any unexpended sums in the reserve fund shall be distributed to BAWSCA and the SFPUC in proportion to the total amount of surcharges assessed to the Wholesale and Retail Customers, respectively.

Specific uses of Environmental Enhancement Surcharges will be decided by the SFPUC and BAWSCA General Managers following input from environmental stakeholders and other interested members of the public. If parties are unable to agree, then they will jointly select a third person to participate in making the decision.

San José/Santa Clara Interim Supply Allocation and Process for Reduction/ Termination .

San Francisco will supply a combined annual average of 9 MGD to the cit ies of San José and Santa Clara through 2028. Water supplied by San Francisco may only be used in the existing defined service areas in the northern portions of San José and Santa Clara. San Francisco may reduce the quantity of water specified in this sect ion when it establishes the Interim Supply Allocations for Wholesale Customers. The establishment of Interim Supply Allocations for San José and Santa Clara shall not be considered a reduction of supply, provided that the Interim Supply Allocations assigned to San José and Santa Clara do not effect a reduction greater than the aggregate average reduction in Individual Supply Guarantees for Wholesale Customers that have such guarantees.

San Francisco Decisions in 2028 Regarding Future Water Supply By December 31, 2028, San Francisco will have completed any necessary CEQA review that is relevant to making San José and Santa Clara permanent customers of the Regional Water System and will decide whether or not to make San José and Santa Clara permanent customers of the Regional Water System. San Francisco will make San José and Santa Clara permanent customers only if, and to the extent that, San Francisco determines that Regional Water System long term water supplies are available. In the event that San Francisco decides to afford permanent status to San José and Santa Clara, the Agreement will be amended.

By December 31, 2028, San Francisco will have completed any necessary CEQA review and will decide how much water if any, in excess of the Supply Assurance it will supply to Wholesale Customers from the Regional Water

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System to meet their projected future water demands until the year 2040, and whether to offer a corresponding increase in the Supply Assurance as a result of its determination.

Retained Discretion of SFPUC and Wholesale Customers
The Agreement contemplates discretionary actions that the SFPUC and the Wholesale Customers may choose to take in the future that could result in physical changes to the environment (“Discretionary Actions”). The Discretionary Actions include decisions to:

1. Develop additional or alternate water resources by the SFPUC or one or more Wholesale Customers;

2. Implement the physical facilities comprising the WSIP by December 30, 2021;

3. Approve wheeling proposals by Wholesale Customers;

4. Approve new wholesale customers and water exchange or cost sharing agreements with other water suppliers;

5. Provide additional water to San José and/or Santa Clara;

6. Offer permanent status to San José and/or Santa Clara;

7. Reduce or terminate supply to San José and/or Santa Clara;

8. Provide additional water to Wholesale Customers in excess of the Supply Assurance to meet their projected future water demands;

9. Offer a corresponding volumetric increase in the Supply Assurance; and

10. Implement Hetch Hetchy Water and Power projects listed in the Agreement.

Wholesale Revenue Requirement
The Agreement shall be applicable only to the water rates charged by San Francisco to the Wholesale Customers. Nothing contained in the Agreement shall limit, constrain, or in any w ay affect the rates which San Francisco may charge for water sold to Retail Customers or the methodology by which such rates are determined.

The Agreement sets forth the method by which the Wholesale Customers’ collective share of expenses incurred by the SFPUC in delivering water to them will be determined.

The Agreement implements two general principles as follows: (1) the Wholesale Customers should not pay for expenses of SFPUC operations from which they receive no benefit and (2) the Wholesale Customers should pay their share of expenses incurred by the SFPUC in delivering water to them on the basis of Proportional Annual Use unless otherwise explicitly provided in the Agreement.

To implement these general principles, the Wholesale Revenue Requirement wi ll consist of, and be limited to the Wholesale Customers’ shares of the following categories of expense:

1. Contribution to the capital cost of Water Enterprise New Regional Assets.

2. Water Enterprise operation and maintenance expenses, including power purchase d from the Hetch Hetchy Enterprise that is used in the operation of the Water Enterprise.

3. Water Enterprise administrative and general expenses.

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4. Water Enterprise property taxes.

5. The Water Enterprise’s share of the Hetch Hetchy Enterprise’s operation and mai ntenance, administrative and general, and property tax expenses.

6. The Water Enterprise’s share of the Hetch Hetchy Enterprise’s capital cost of New Assets classified as Water-Only and the Water-Related portion of Joint Assets.

In each of these cost categories, Direct Retail Expenses will be allocated entirely to Retail Customers. Direct Wholesale Expenses will be allocated entirely to the Wholesale Customers. Regional Expenses will be allocated between Retail Customers and Wholesale Customers.

For purposes of establishing the rates to be charged Wholesale Customers, expenses will be based on the budget for, and estimates of water purchases in, the following fiscal year. For purposes of accounting, the Wholesale Revenue Requirement will be determined on the basis of actual expenses incurred and actual water use.

In addition, rates charged to Wholesale Customers may include the Wholesale Customers’ contribution to a Wholesale Revenue Coverage Reserve, which is not included in the Wholesale Revenue Requirement itself.

Capital Cost Contribution – New Regional Assets
The Wholesale Customers shall pay the wholesale share of Net Annual Debt Service for new Regional Assets.

1. The amount of Net Annual Debt Service for New Regional Assets will be determined for each series of Indebtedness issued. Until the proceeds of a particular series are Substantially Expended, the amount attributable to specific projects will be based on the expected use of proceeds shown in the “Certificate Regarding Use of Proceeds” executed by the SFPUC General Manager on behalf of the Commission in connection with the sale of the Indebtedness.

2. After the proceeds of a series are Substantially Expended, the SFPUC General Manager will prepare and execute a certificate showing the actual expenditure of proceeds at an allocation of Net Debt Service to New Regional Assets for a series of bonds will be used in the fiscal year in which the proceeds have been Substantially Expended and thereafter.

3. The Wholesale Customers’ share of Net Annual Debt Service for the New Regional Assets that are categorized as Direct Wholesale will be 100 percent. (None of the projects in the WSIP are categorized as Direct Wholesale.) The Wholesale Customers’ share of Net Annual Debt Service for all other New Regional Assets will be determined each year and will be equal to the Wholesale Customers’ Proportional Annual Use.

4. If Indebtedness is issued by the SFPUC to refund the 2006 Revenue Bonds, Series A or to refund any other long-term Indebtedness issued after July 1, 2009, the Net Annual Debt Service attributable to proceeds used for refunding will be allocated on the same basis as the Indebtedness being refunded.

5. In addition to Net Debt Service, Wholesale Customers will pay a proportionate share of annual administrative costs associated with Indebtedness, such as bond trustee fees, credit rating agency fees, letter of credit issuer fees, San Francisco Revenue Bond Oversight Committee fees, etc., but only to the extent such fees are neither paid from proceeds of Indebtedness nor included in SFPUC operation and maintenance or administrative and general expenses.

The Wholesale Customers shall pay the wholesale share of the appropriation contained in the SFPUC annual budget for each year to be used to acquire or construct New Regional Assets.

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The Wholesale Customers’ share of the annual appropriation for revenue -funded New Regional Assets that are categorized as Direct Wholesale will be 100 percent. The Wholesale Customers’ share of the annual appropriation for all other revenue -funded New Regional Assets will be determined each year and will be equal to the Wholesale Customers’ Proportional Annual Use in each fiscal year. The amount appropriated in each fiscal year for the wholesale share of New Regional Assets shall be contributed to the Wholesale Capital Fund.

Hetch Hetchy Enterprise Expenses
There are two steps involved in determining the amount of the Wholesale Customers’ share of Hetch Hetchy Enterprise expenses.

1. The first step is to determine the Water Enterprise’s share of Hetch Hetchy Enterprise operation expenses, maintenance expenses, administrative and general expenses, and property taxes.

2. The second step is to determine the Wholesale Customers’ share of expenses allocable to the Water Enterprise.

The Water Enterprise’s share of Hetch Hetchy Enterprise expenses consist of 100 percent of Water -Only expenses and the Water-Related portion (45%) of Joint expenses.

The Wholesale Customers’ share of the sum of the Water Enterprise’s share of Hetch Hetchy Enterprise expenses shall be calculated by multiplying that dollar amount by Adjusted Proportional Annual Use.

Wholesale Customers are also allocated a share of Hetch Hetchy Enterprise capital costs. The components of Hetch Hetchy Enterprise capital costs are as follows:

1. The Wat er Enterprise will be assigned 100 percent of Net Annual Debt Service attributable to acquisition and construction of New Hetch Hetchy Enterprise assets that are Water -Only and the Water-Related portion (45 percent) of Net Annual Debt Service on New Hetch Hetchy Enterprise Joint assets.

2. The Water Enterprise will be assigned 100 percent of capital expenditures from revenues for New Hetch Hetchy Enterprise assets that are Water- Only and the Water-Related portion (45 percent) of such expenditures for new Hetch Hetchy Enterprise Joint assets.

The Wholesale Customers’ share of the Net Annual Debt Service and revenue funded capital expenditures shall be calculated by multiplying that dollar amount by Adjusted Proportional Annual Use.

Additional Agreements Related to Financial Issues
The Wholesale Customers have no entitlement to any of the following sources of revenue to the SFPUC.

1. Revenues from leases or sales of SFPUC real property.

2. Revenues from other utility services such as the sale of electric power, natural gas and steam.

3. Revenues from the sale of water to customers and entities other than the Wholesale Customers.

4. Revenues earned from the investment of SFPUC funds other than funds contributed by the Wholesale Customers to the Wholesale Revenue Coverage Reserve or the Wholesale Capital Fund.

Wholesale Customers are also entitled to the benefit of earnings on proceeds of Indebtedness (through expenditure on New Regional Assets and /or application to Debt Service) and to interest on the Balancing Account.

5. Revenues not related to the sale of water.

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The Wholesale Customers will not be charged with any of the following expenses:

1. Capital costs for assets constructed or acquired prior to July 1, 1984.

2. Expenses incurred by the SFPUC for generation and distribution of electric power, including Hetch Hetchy Enterprise Power -Only expenses and the Power -Related share of Hetch Hetchy Enterprise Joint expenses. An exception to this is Regional energy costs incurred by the Water Enterprise, for which Wholesale Customers are charged on the basis of Proportional Annual Use.

3. Expenses incurred by SFPUC in providing water to Retail Customers.

4. Expenses associated with the SFPUC’s accruals or allocations for uncollectible Retail Water accounts.

5. Attorneys’ fees and costs incurred by the Wholesale Customers that a court of competent jurisdiction orders San Francisco to pay as part of a final, binding judgment against San Francisco.

6. Any expenses associated with funding any reserves (other than the required Wholesale Revenue Coverage Reserve) accrued and not anticipated to be paid within one year unless such reserve is established by mutual agreement of the SFPUC and BAWSCA.

7. Any expenses accrued in respect to pending or threatened litigation, damage or personal injury claims or other loss contingencies unless projected to be paid within one year. Otherwise, such expenses will be charged to the Wholesale Customers when actually paid.

8. Any expenses associated with installing, relocating, enlarging, removing or modifying meters and service connections at the request of an individual Wholesale Customer.

9. The Retail Customers’ portion of any Environmental Enhancement Surcharges imposed to enforce the Interim Supply Limitation.

The following payments by Wholesale Customers, individually or collectively, are not credited as Wholesale revenues.

1. Payments by individual Wholesale Customers of the Environmental Enhancement Surcharge imposed to enforce the Interim Supply Limitation.

2. Payments of attorneys’ fees and costs incurred by San Francisco that a court of competent jurisdiction orders the Wholesale Customers to pay as part of a final, binding judgment against the Wholesale Customers.

3. Payments by individual Wholesale Customers for installation, relocation, enlargement, removal or modification of m eters and service connections requested by, and charged to, a Wholesale Customer.

4. Payments applied to the amortization of the ending balance in the balancing account under the 1984 Agreement.

5. Payments of the Water Management Charge which are delivered to B AWSCA.

6. Payments directed to the Wholesale Revenue Coverage Reserve.

7. Prepayments of certain capital and revenues payment.

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The Wholesale Customers will receive a proportional benefit from funds received by the SFPUC from (a) governmental grants, rebates, reimbursements or other subventions, (b) private-sector grants for Regional capital or operating purposes of the Water Enterprise and the Water -Only and Water-related portion of Joint Hetch Hetchy Water Enterprise expenses, or (c) a SFPUC use of taxable bonds.

The Wholesale Customers will receive a proportionate benefit from recovery of damages, including liquidated damages, by SFPUC from judgments against or settlements with contractors, suppliers, sureties, etc., related to Regional Water System projects and the Water -Only and Water-Related portion of Joint Hetch Hetchy Enterprise projects.

The SFPUC will continue to charge Wholesale Customers for assets acquired or constructed with proceeds of Indebtedness on which Wholesale Customers paid Debt S ervice during the Term of the Agreement on the “cash” basis (as opposed to the “utility” basis) after the expiration or earlier termination of the Agreement.

Rate Adjustments
Adjustments to the rates applicable to the Wholesale Customers, other than emergency rate increases and drought rate increases, shall be coordinated with the budget development process described in the Agreement.

The Commission may adjust the Wholesale Customers’ rates in response to an Emergency that damages the Regional Water System and disrupts San Francisco’s ability to maintain normal deliveries of water to Retail and Wholesale Customers. In such an Emergency, the Commission may adopt an emergency rate surcharge applicable to Wholesale Customers without following the budgeting procedures set forth in the Agreement, provided that any such rates surcharge imposed by the Commission shall be applicable to both Retail and Wholesale Customers and incorporate the same percentage increase for all customers. Any emergency rate surcharge adopted by the Commission shall remain in effect only until the next-budget coordinated rate-setting cycle.

If the Commission declares a water shortage emergency under Water Code Section 350, implements the Tier 1 Shortage Plan and imposes drought rates on Retail Customers, it may concurrently adjust wholesale rates independently of coordination with the annual budget process. Those adjustments may be designed to encourage water conservation and may constitute changes to the structure of the rates. Drought Rate payments and payments of excess use charges levied in accordance with the Tier 1 Shortage Plan constitute Wholesale Customer Revenue and count towards the Wholesale Revenue Requirement. The SFPUC may use these revenues to purchase additional water for the Wholesale Customers from the State Drought Water Bank or other willing seller.

Rate Structure
The Agreement is not intended and shall not be construed to limit the Commission’s right (a) to adjust the structure of the rate schedule applicable to the Wholesale Customers (i.e., the relationship among the several charges set out therein) or (b) to add, delete, or change the various charges which make up the rate schedule, provided that neither such charges nor the structure of the rate schedule(s) applicable to the Wholesale Customers shall be arbitrary, unreasonable, or unjustly discriminatory as among said customers. The SFPUC will give careful consideration to proposals for changes in the rate schedule made jointly by the Wholesale Customers but, subject to the limitations set out above, shall retain the sole and exclusive right to determine the structure of the rate schedule.

The SFPUC may recommend, and the Commission may adopt, changes in the structure of wholesale rates at any time. However, the new rate schedule implementing these changes will become effective at the beginning of the following fiscal year.

Balancing Account
After the close of each fiscal year, the SFPUC will compute the costs allocable to the Wholesale Customers for that fiscal year based on actual costs incurred by the SFPUC and actual amounts of water used by the Wholesale Customers and the Retail Customers. That amount will be compared to the amounts billed to the Wholesale Customers for that fiscal year (including any Excess Use Charges, but excluding revenues not credited to the Wholesale Revenue

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Requirement). The difference will be posted to a “balancing account” as a credit to, or charge against, the Wholesale Customers. Interest shall also be posted to the balancing account calculated by multiplying the amount of the opening balance by the average net interest rate, certified by the Controller as earned in the San Francisco Treasury for the previous fiscal year on the San Francisco County Pooled Investment Account. Interest, when posted, will carry the same mathematical sign (whether positive or negative) as carried by the opening balance. The amount posted to the balancing account in each year shall be added to, or subtracted from, the balance in the account from previous years.

If the amount in the balancing account is owed to the Wholesale Customers (a positive balance), the SFPUC shall take it into consideration in establishing wholesale rates. However, the SFPUC need not apply the entire amount to reduce wholesale rates for the immediately ensuing year. Instead, the SFPUC may prorate a positive ending balance over a period of up to three successive years in order to avoid fluctuating decreases and increases in wholesale rates.

If the amount in the balancing account is owed to the SFPUC (a negative balance), the SFPUC shall not be obligated to apply all or any part of the negative balance in establishing wholesale rates for the immediately ensuring year. Instead, the SFPUC may prorate the negative balance in whole or in part over multiple years in order to avoid fluctuating increases and decreases in wholesale rates.

Wholesale Revenue Coverage Reserve
The SFPUC may include in wholesale rates for any fiscal year an additional dollar amount (“Wholesale Revenue Coverage”), which for any fiscal year shall equal the following:

1. The lesser of (i) 25% of the Wholesale Customers’ share of Net Annual Debt Service for that fiscal year, or (ii) the amount necessary to meet the Wholesale Customers’ proportionate share of Debt Service coverage required by then-current Indebtedness for that fiscal year, minus

2. A credit for (i) the actual amount previously deposited in the “Wholesale Revenue Coverage Reserve,” (ii) accrued interest on the amounts on deposit in the Wholesale Revenue Coverage Reserve, and (iii) an amount equal to any additional interest that would have accrued on the actual amounts previously deposited in the Wholesale Revenue Coverage Reserve assuming no withdrawals had been made therefrom.

During each fiscal year, the SFPUC will set asi de and deposit that portion of revenue equal to Wholesale Revenue Coverage into a separate account that the SFPUC will establish and maintain, to be known as the “Wholesale Revenue Coverage Reserve.” Deposits into the Wholesale Revenue Coverage Reserve shall be made no less frequently than monthly. The Wholesale Revenue Coverage Reserve shall be credited with interest. The SFPUC may use amounts in the Wholesale Revenue Coverage Reserve for any lawful purpose. Any balance in the Wholesale Revenue Coverage Reserve in excess of the Wholesale Revenue Coverage amount as of the end of any fiscal year shall be applied as a credit against wholesale rates in the immediately following fiscal year unless otherwise directed by BAWSCA.

If, prior to expiration of the Term , the SFPUC determines that it would be in the best financial interest of both Retail Customers and Wholesale Customers of the Regional Water System for the Debt Service coverage requirement to be increased in one or more series of proposed new Indebtedness above 125%, or for the coverage covenant to be strengthened in other ways, it will provide a written report to BAWSCA. The report will contain (1) a description of proposed covenant(s) in the bond indenture; (2) an explanation of how savings are expected to be achieved (e.g., increase in the SFPUC’s credit rating over the then-current level; ability to obtain credit enhancement, etc.); (3) the estimated all- in true interest cost savings; (4) a comparison of the Wholesale Revenue Requirements using the Debt Service coverage limitation and under the proposed methodology; and (5) a comparison of the respective monetary benefits expected to be received by both Retail and Wholesale Customers. The SFPUC and BAWSCA agree to meet and confer in good faith about the proposed changes.

Any increase in Debt Service coverage proposed by the SFPUC shall be commensurate with Proportional Water Use by Retail and Wholesale Customers. If the SFPUC demonstrates that an increase in Debt Service coverage will result in equivalen t percentage reductions in total Wholesale and Retail Debt Service payments over the life of the proposed new Indebtedness, based on Proportional Water Use, BAWSCA may agree to a modification of the

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Wholesale Revenue Coverage requirement. If BAWSCA does not agree to a proposed modification in coverage requirements in the covenants for new Indebtedness, SFPUC may nevertheless proceed with the modification and the issuance of new Indebtedness. Any Wholesale Customer, or BAWSCA, may challenge an increase in the Wholesale Revenue Requirement resulting from the modification in Debt Service coverage through arbitration. If the arbitrator finds that the increase in Debt Service coverage (1) did not and will not result in equivalent percentage reductions in total Wh olesale and Retail Debt Service payments over the life of the proposed new Indebtedness, based on Proportional Water Use, or (2) was not commensurate with Proportional Water Use, the arbitrator may order the Wholesale Revenue Requirement to be recalculated both retrospectively and prospectively to eliminate the differential impact to Wholesale or Retail Customers.

Working Capital Requirement
The SFPUC maintains working capital in the form of unappropriated reserves for the purpose of bridging the gap between when the SFPUC incurs operating expenses required to provide service and when it receives revenues from its Retail and Wholesale Customers. The Wholesale Customers shall fund their share of working capital as part of the annual Wholesale Revenue Requirement calculation. The amount of wholesale working capital for which the Wholesale Customers will be responsible will be determined using the 60- day standard formula approach.

Applying this approach, annual wholesale working capital equals one -sixth of the wholesale allocation of operation and maintenance, administrative and general, and property tax expenses for the Water and Hetch Hetchy Enterprises. Wholesale working capital shall be calculated separately for the Water and Hetch Hetchy Enterprises.

Wholesale Capital Fund
The SFPUC shall establish a comparable Wholesale Revenue-Funded Capital Fund (Wholesale Capital Fund) to enable the Wholesale Customers to fund the wholesale share of revenue-funded New Regional Assets. The SFPUC may include in wholesale rates for any fiscal year an amount equal to the wholesale share of the SFPUC’s appropriation for revenue funded New Regional Assets for that year, which sum will be credited to the Wholesale Capital Fund. The wholesale share of other sources of funding, where legally permitted and appropriately accounted for under GAAP, will also be credited to the Wholesale Capital Fund, together with interest earnings on the Wholesale Capital Fund balance.

The SFPUC will expend revenues appropriated and transferred to the Wholesale Capital Fund only on New Regional Assets.

In order to prevent the accumulation of an excessive unexpended and unencumbered surplus in the Wholesale Capital Fund, any excess fund balance will be transferred for the credit of the Wholes ale Customers to the Balancing Account.

Arbitration and Judicial Review
All questions or disputes arising under the following subject areas shall be subject to mandatory, binding arbitration and shall not be subject to judicial determination:

1. the determination of the Wholesale Revenue Requirement, which shall include both the calculations used in the determination and the variables used in those calculations;

2. the SFPUC’s adherence to accounting practices and conduct of the compliance audit; and

3. the SFPUC’s classification of new assets for purposes of determining the Wholesale Revenue Requirement.

All other questions or disputes arising under this Agreement shall be subject to judicial determination.

Disputes about the scope of arbitrability shall be resolved by the courts.

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Preservation of Water Rights; Notice of Water Rights Proceedings It is the intention of San Francisco to preserve all of its water rights, irrespective of whether the water held under such water rights is allocated under the Agreement. Nothing in the Agreement shall be construed as an abandonment, or evidence of an intent to abandon, any of the water rights that San Francisco presently possesses.

Reservations of, and Limitations on, Claims
The 1984 Agreement resolved a civil action brought a gainst San Francisco by certain of the Wholesale Customers. Plaintiffs in that action contended that they, and other Wholesale Customers that are municipalities or special districts, were “co -grantees” within the meaning of Section 8 of the Act and were en titled to certain rights, benefits and privileges by virtue of that status. San Francisco disputed those claims.

Nothing in the Agreement, or in the Individual Water Sales Contracts, shall be construed or interpreted in any way to affect the ultimate resol ution of the controversy between the Parties concerning whether any of the Wholesale Customers are “co -grantees” under the Act and, if so, what rights, benefits and privileges accrue to them by reason of that claimed status.

The following claims, which San Francisco disputes, are reserved but may not be asserted during the Term (or portions thereof, as indicated):

1. The Wholesale Customers’ claim that the Act entitles them to water at cost.

2. The Wholesale Customers’ claim that San Francisco is obligated under the Act or state law to supply them with additional water in excess of the Supply Assurance. This claim may not be asserted unless and until San Francisco decides not to meet projected water demands of Wholesale Customers in excess of the Supply Assurance.

3. The claim by San José and Santa Clara that they are entitled under the Act, or any other federal or state law, to permanent, non -interruptible status and to be charged rates identical to those charged other Wholesale Customers. This claim may not be asserted unless and until San Francisco notifies San José or Santa Clara that it intends to interrupt or terminate water deliveries.

4. The Wholesale Customers’ claim that the SFPUC is not entitled to impose a surcharge for lost power generation revenues attributable to furnishing water in excess of the Supply Assurance. This claim may not be asserted unless and until SFPUC furnishes water in excess of the Supply Assurance during the Term and also includes such a surcharge in the price of such water.

5. Claims by Whol esale Customers (other than San José and Santa Clara, whose service areas are fixed) that SFPUC is obligated under the Act or state law to furnish water, within their Individual Supply Guarantee, for delivery to customers outside their existing service are a and that Wholesale Customers are entitled to enlarge their service areas to supply those customers. Such claims may be asserted only after SFPUC’s denial of, or failure for six months to act on, a written request by a Wholesale Customer to expand its service area.

The Wholesale Customers (and the SFPUC, where specified) will refrain from the following activities during the Term (or portions thereof, as specified):

1. The Wholesale Customers and the SFPUC will not contend before any court, administrative agency or legislative body or committee that the methodology for determining the Wholesale Revenue Requirement (or the requirements for (a) amortization of the ending balance under the 1984 Agreement, or (b) contribution to the Wholesale Revenue Coverage) determined in accordance with the Agreement violates the Act or any other provision of federal law, state law, or San Francisco’s City Charter, or is unfair, unreasonable or unlawful.

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2. The Wholesale Customers will not challenge the transfer of funds by the SFPUC to any other San Francisco City department or fund, provided such transfer complies with the San Francisco City Charter. The transfer of its funds, whether or not permitted by the City Charter, will not excuse the SFPUC from its failure to perform any obligation imposed by the Agreement.

3. The Wholesale Customers and the SFPUC will not assert monetary claims against one another based on the 1984 Agreement other than otherwise arbitral claims arising from the three fiscal years immediately preceding the start of the Term (i.e., Fiscal Years 2006-07, 2007-08 and 2008-09).

The Wholesale Customers do not, by executing the Agreement, concede the legality of the SFPUC’s establishing Interim Supply Allocations or imposing Environmental Enhancement Surcharges on wat er use in excess of such allocations. Any Wholesale Customer may challenge such allocation when imposed and/or such surcharges if and when levied, in any court of competent jurisdiction.

The furnishing of water in excess of the Supply Assurance by San Francisco to the Wholesale Customers shall not be deemed or construed to be a waiver by San Francisco of its claim that it has no obligation under any provision of law to supply such water to the Wholesale Customers, nor shall it constitute a dedication by San Francisco to the Wholesale Customers of such water.

Prohibition of Assignment
The Agreement shall be binding on, and shall inure to the benefit of, the Wholesale Customers and San Francisco, and their respective successors and permitted assigns. Each Wholesale Customer agrees that it will not transfer or assign any rights or privileges under the Agreement, either in whole or in part, or make any transfer of all or any part of its water system or allow the use thereof in any manner whereby any provision of the Agreement will not continue to be binding on it, its assignee or transferee, or such use of the system. Any assignment or transfer in violation of this covenant, and any assignment or transfer that would result in the supply of water in violation of the Act, shall be void.

Nothing shall prevent any Wholesale Customer (except the California Water Service Company and Stanford) from entering into a joint powers agreement or a municipal or multi -party water district with any other Wholesale Customer (ex cept the two listed above) to exercise the rights and obligations granted to and imposed upon the Wholesale Customers hereunder, nor shall this section prevent any Wholesale Customer (except the two listed above) from succeeding to the rights and obligations of another Wholesale Customer hereunder as long as the Wholesale Service Area served by the Wholesale Customers involved in the succession is not thereby enlarged.

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APPENDIX C

SFPUC WATER ENTERPRISE FINANCIAL STATEMENTS

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APPENDIX D

PROPOSED FORM OF OPINION OF BOND COUNSEL

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APPENDIX E

FORM OF CONTINUING DISCLOSURE CERTIFICATE
$__________

PUBLIC UTILITIES COMMISSION OF

THE CITY AND COUNTY OF SAN FRANCISCO
San Francisco Water Revenue Bonds, 2023 Series CD
$__________
2023 Sub-Series C Bonds (Refunding)
(WSIP) (Green Bonds)
$__________
2023 Sub-Series D Bonds (Refunding)
(Local Water)
[Closing Date]
This Continuing Disclosure Certificate (the “Disclosure Certificate”) is executed and delivered by the Public Utilities Commission of the City and County of San Francisco (the “ SFPUC”) in connection with the issuance of the water revenue bon ds captioned above (the “ 2023CD Bonds”). The 2023CD Bonds are being issued pursuant to an Amended and Restated Indenture, dated as of August 1, 2002, between the SFPUC and U.S. Bank Trust Company, National Association, as trustee (the “ Trustee”), as amended and supplemented, including as supplemented by a Forty-Fifth Supplemental Indenture and a Forty-Sixth Supplemental Indenture, each dated as of June 1, 2023, by and between the SFPUC and the Trustee (collectively, the “Indenture”).

The SFPUC covenants and agrees as follows:

SECTION 1. Purpose of the Disclosure Certificate. This Disclosure Certificate is being executed and delivered by the SFPUC for the benefit of the Holders and Beneficial Owners of the 2023CD Bonds and in order to assist the Participating Underwriters in complying with Securities and Exchange Commission (the “ S.E.C.”) Rule 15c2-12(b)(5).

SECTION 2. Definitions. In addition to the definitions set forth in the Indenture, which apply to any capitalized term used in this Disclosure Certificate unless otherwise defined in this Section 2, the following capitalized terms shall have the following meanings:
“Annual Report” shall mean any Annual Report provided by the SFPUC pursuant to, and as described in, Sections 3 and 4 of this Disclosure Certificate.
“Beneficial Owner” shall mean any person that: (a) has or shares the power, directly or indirectly, to make investment decisions concerning ownership of any 2023CD Bonds (including persons holding 2023CD Bonds through nominees, depositories or other intermediaries) including, but not limited to, the power to vote or consent with respect to any 2023CD Bonds or to dispose of ownership of any 2023CD Bonds; or (b) is treated as the owner of any 2023CD Bonds for federal income tax purposes.
“Dissemination Agent ” shall mean the SFPUC, acting in its capacity as Dissemination Agent under this Disclosure Certificate, or any successor Dissemination Agent designated in writing by the SFPUC and which has filed with the SFPUC a written acceptance of such designation. “Financial Obligation” means, for purposes of the Listed Events set out in Section 5(a)(10) and Section (5)(b)(8), a (i) debt obligation; (ii) derivative instrument entered into in connection with, or pledged as security or a source of payment for, an existing or planned debt obligation; or (iii) guarantee of (i) or (ii). The term “Financial Obligation” shall not include municipal securities (as defined in the Securities Exchange Act of 1934, as amended) as to which a final official statement (as defined in the Rule) has been provided to the MSRB consistent with the Rule.

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“Holder” shall mean either the registered owners of the 2023CD Bonds, or, if the 2023CD Bonds are registered in the name of The Depository Trust Company or another recognized depository, any applicable participant in such depository system.
“Listed Events” shall mean any of the events listed in Section 5(a) of this Disclosure Certificate. “MSRB” shall mean the Municipal Securities Rulemaking Board or any other entity designated or authorized by the Securities and Exchange Commission to receive continuing disclosure filings pursuant to the Rule. Until otherwise designated by the MSRB or the Securities and Exchange Commission, filings with the MSRB are to be made through the Electronic Municipal Market Access (EMMA) website of the MSRB currently located at http://emma.msrb.org.
“Official Statement” shall mean the final Official Statement, dated __________, 2023, prepared in connection with the sale and offering of the 2023CD Bonds. “Participating Underwriters ” shall mean any of the original underwriters or purchasers of the 2023CD Bonds required to comply with the Rule in connection with the offering of the 2023CD Bonds. “Rule” shall mean Rule 15c2-12(b)(5) adopted by the S.E.C. under the Securities Exchange Act of 1934, as the same may be amended from time to time.

SECTION 3. Provision of Annual Reports.
(a) The SFPUC shall, or shall cause the Dissemination Agent to, not later than nine months after the end of the SFPUC’s fiscal year (which currently ends June 30), commencing March 31, 2024, with the report for Fiscal Year 20 22-23, provide to the MSRB an Annual Report which is consistent with the requirements of Section 4 of this Disclosure Certificate. If the Dissemination Agent is not the SFPUC, the SFPUC shall provide the Annual Report to the Dissemination Agent not later than 15 days prior to said date.

The Annual Report must be submitted in electronic format and accompanied by such identifying information as is prescribed by the MSRB, and may cross -reference other information as provided in Section 4 of this Disclosure Certificate. However, if the audited financial statements of the SFPUC are not available by the date required above for the filing of the Annual Report, the SFPUC shall submit unaudited financial statements and submit the audited financial statements as soon as they are available. If the SFPUC’s Fiscal Year changes, it shall give notice of such change in the same manner as for a Listed Event under Section 5(b). (b) If the SFPUC is unable to provide to the MSRB an Annual Report by the date required in subsection (a), the SFPUC shall send a notice to the MSRB in substantially the form attached as Exhibit A. (c) The Dissemination Agent shall (if the Dissemination Agent is other than the SFPUC), file a report with the SFPUC certifying the date that the Annual Report was provided to the MSRB pursuant to this Disclosure Certificate.

SECTION 4. Content of Annual Reports. The SFPUC’s Annual Report shall contain or incorporate by reference the following information:
(a) Audited Financial Statements of the municipal water supply, storage and distribution system of the SFPUC for the prior fiscal year, prepared in accordance with generally accepted accounting principles applicable to the SFPUC from time to time. If the SFPUC’s audited financial statements are not available by the date the Annual Report is required to be filed, the Annual Report shall contain unaudited financial statements in a format similar to the financial statements contained in the final Official Statements, and the audited financial statements shall be filed in the same manner as the Annual Report when they become available;
(b) An update for the prior fiscal year of the table in the Official Statement entitled “TABLE 8, HISTORICAL WHOLESALE AND RETAIL WATER SALES”;

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(c) An update for the prior fiscal year of the table in the Official Statement entitled “TABLE 17, HISTORICAL AND ADOPTED PERCENTAGE INCREASES (DECREASES) IN WHOLESALE WATER RATES,” provided that such update need include rate increases (decreases) through the end of the prior fiscal year;
(d) An update for the prior fiscal year of the table in the Official Statement entitled “TABLE 20, HISTORICAL PERCENTAGE INCREASES (DECREASES) IN RETAIL WATER RATES,” provided that such update need include rate increases (decreases) through the end of the prior fiscal year; (e) An update for the prior fiscal year of the table in the Official Statement in the section entitled “OBLIGATIONS PAYABLE FROM REVENUES – Outstanding Parity Revenue Bonds” showing all bonds of the SFPUC secured by Revenues; and (f) An update for the prior fiscal year of the table in the Official Statement entitled “TABLE 26, HISTORICAL REVENUES, OPERATING & MAINTENANCE EXPENSES AND DEBT SERVICE COVERAGE.”
Any or all of the items listed above may be set forth in a document or set of documents, or may be included by specific reference to other documents, including official statements of debt issues of the SFPUC or related public entities, which are available to the public on the MSRB website. If the document included by reference is a final official statement, it must be available from the MSRB. The SFPUC shall clearly identify each such other document so included by reference.

SECTION 5. Reporting of Significant Events.
(a) The SFPUC shall give, or cause to be given, notice of the occurrence of any of the following Listed Events with respect to the 2023CD Bonds:

1. Principal and interest payment delinquencies;

2. Non-payment related defaults, if material;

3. Unscheduled draws on debt service reserves reflecting financial difficulties;

4. Unscheduled draws on credit enhancements reflecting financial difficulties;

5. Substitution of credit or liquidity providers, or their failure to perform;

6. Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax status of the 2023CD Bonds, or other material events affecting the tax status of the 2023CD Bonds;

7. Modifications to rights of Holders, if material;

8. Bond calls, if material, and tender offers;

9. Defeasances;

10. Release, substitution, or sale of property securing repayment of the 2023CD Bonds, if material;

11. Rating changes;

12. Bankruptcy, insolvency, receivership or similar event of the SFPUC;

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13. The consummation of a merger, consolidation, or acquisition involving the SFPUC or the sale of all or substantially all of the assets of the SFPUC, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material;

14. Appointment of a successor or additional trustee or the change of name of a trustee, if material;

15. Incurrence of a Financial Obligation of the SFPUC, if material, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a Financial Obligation of the SFPUC, any of which affect Holders; and

16. Default, event of acceleration, termination event, modification of terms, or other similar events under the terms of a Financial Obligation of the obligated person, any of which reflect financial difficulties.
(b) Whenever the SFPUC obtains knowledge of the occurrence of a Listed Event, and, if the Listed Event is described in subsections (a)(2), (a)(6) (other than an adverse tax opinion, the issuance by the IRS of a proposed or final determination of taxability, or a Notice of Proposed Issue (IRS Form 5701-TEB)), (a)(7), (a)(8) (if the event is a bond call), (a)(10), (a)(13) or (a)(14) above, the SFPUC determines that knowledge of the occurrence of that Listed Event would be material under applicable federal securities law, the SFPUC shall, or shall cause the Dissemination Agent (if not the SFPUC) to, file a notice of such occurrence with the MSRB, in an electronic format as prescribed by the MSRB, in a timely manner not in excess of 10 business days after the occurrence of the Listed Event. Notwithstanding the foregoing, notice of Listed Events described in subsections (a)(8) and (9) above need not be given under this subsection any earlier than the notice (if any) of the underlying event is given to holders of affected 2023CD Bonds under the Indenture.
(c) For purposes of this Disclosure Certificate, any event described in paragraph (a)(12) above is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent, or similar officer for the SFPUC in a proceeding under the United States Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the SFPUC, or if such jurisdiction has been assumed by leaving the existing governing body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reo rganization, arrangement, or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of said party. (d) The SFPUC shall give, or cause to be given, notice of the occurrence of the rec eipt by the SFPUC of a written statement by the Climate Standards Board to the effect that the Public Utilities Commission of the City and County of San Francisco San Francisco Water Revenue Bonds, 2023 Series CD, 2023 Sub-Series C Bonds (Refunding) (WSIP) (Green Bonds) are no longer “Climate Bond Certified.” The SFPUC shall, or shall cause the Dissemination Agent (if not the SFPUC) to, file a notice of such occurrence with the MSRB, in electronic format as prescribed by the MSRB, in a timely manner not in excess of 30 days after the receipt by the SFPUC of such written statement. (e) The SFPUC intends to comply with the Listed Events described in Section 5(a)(15) and Section 5(a)(16), and the definition of “Financial Obligation” in Section 2, with reference to the Rule, any other applicable federal securities laws and the guidance provided by the S.E.C. in Release No. 34- 83885 dated August 20, 2018 (the “ 2018 Release”), and any further amendments or written guidance provided by the S.E.C. or its staff with respect to the amendments to the Rule effected by the 2018 Release.

SECTION 6. Termination of Reporting Obligation . The SFPUC’s obligations under this Disclosure Certificate shall terminate upon the legal defeasance, prior redemption or payment in full of all of the 2023CD Bonds.

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If such termination occurs prior to the final maturity of the 2023CD Bonds, the SFPUC shall give notice of such termination in the same manner as for a Listed Event under Section 5(b).

SECTION 7. Dissemination Agent . The SFPUC may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Certificate, and may discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent. The Disse mination Agent shall have only such duties as are specifically set forth in this Disclosure Certificate.

SECTION 8. Amendment; Waiver. Notwithstanding any other provision of this Disclosure Certificate, the SFPUC may amend or waive this Disclosure Certific ate or any provision of this Disclosure Certificate, provided that the following conditions are satisfied:
(a) If the amendment or waiver relates to the provisions of Sections 3(a), 3(b), 4 or 5(a), it may only be made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature or status of an obligated person with respect to the 2023CD Bonds or the type of business conducted;
(b) The undertaking, as amended or taking into account such waiver, would, in the opinion of the City Attorney or nationally recognized bond counsel, have complied with the requirements of the Rule at the time of the original issuance of the 2023CD Bonds, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; and (c) The amendment or waiver either (i) is approved by the owners of a majority in aggregate principal amount of the 2023CD Bonds or (ii) does not, in the opinion of the City Attorney or nationally recognized bond counsel, materially impair the interests of the Holders.

In the event of any amendment or waiver of a provision of this Disclosure Certificate, the SFPUC shall describe such amendment in the next Annual Report, and shall include, as applicable , a narrative explanation of the reason for the amendment or waiver and its impact on the type (or in the case of a change of accounting principles, on the presentation) of financial information or operating data being presented by the SFPUC. In addition, if the amendment relates to the accounting principles to be followed in preparing financial statements: (i) notice of such change shall be given in the same manner as for a Listed Event under Section 5; and (ii) the Annual Report for the year in which the change is made should present a comparison (in narrative form and also, if feasible, in quantitative form) between the financial statements as prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles.

SECTION 9. Additional Information. Nothing in this Disclosure Certificate shall be deemed to prevent the SFPUC from disseminating any other information, using the means of dissemination set forth in this Disclosure Certificate or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure Certificate. If the SFPUC chooses to include any information in any Annual Report or notice of occurrence of a Listed Event in addition to that which is specifically required by this Disclosure Certificate, the SFPUC shall have no obligation under this Disclosure Certificate to update such information or include it in any future Annual Report or notice of occurrence of a Listed Event.

SECTION 10. Default. In the event of a failure of the SFPUC to comply with any provision of this Disclosure Certificate, any Participating Underwriters, Holder or Beneficial Owner of the 2023CD Bonds may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the SFPUC to comply with its obligations under this Disclosure Certificate; provided that any such action may be instituted only in a federal or State court located in the City and County of San Francisco, State of California.

Failure by the SFPUC to comply with any provision of this Disclosure Certificate shall not be deemed an Event of Default under the Indenture and the sole re medy under this Disclosure Certificate in the event of any failure of the SFPUC to comply with this Disclosure Certificate shall be an action to compel performance.

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SECTION 11. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the SFPUC, the Dissemination Agent, the Participating Underwriters and Holders and Beneficial Owners from time to time of the 2023CD Bonds, and shall create no rights in any other person or entity.

PUBLIC UTILITIES COMMISSION OF THE

CITY AND COUNTY OF SAN FRANCISCO
By:

General Manager
Approved as to Form:

DAVID C
HIU

CITY ATTORNEY
By:

Deputy City Attorney

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CONTINUING DISCLOSURE CERTIFICATE EXHIBIT A

FORM OF NOTICE TO THE

MUNICIPAL SECURITIES RULEMAKING BOARD

OF FAILURE TO FILE ANNUAL REPORT
Name of Issuer: Public Utilities Commission of the City and County of San Francisco Name of Issue: San Francisco Water Revenue Bonds, 2023 Series CD 2023 Sub-Series C Bonds (Refunding) (WSIP) (Green Bonds) 2023 Sub-Series D Bonds (Refunding) (Local Water)

Date of Issuance: __________, 2023
NOTICE IS HEREBY GIVEN that the SFPUC has not provided an Annual Report with respect to the above -named Bonds as required by Section 3 of the Continuing Disclosure Certificate of the Public Utilities Commission of the City and County of San Francisco, dated __________, 2023. The SFPUC anticipates that the Annual Report will be filed by _____________.

Dated: _______________

PUBLIC UTILITIES COMMISSION OF THE CITY AND

COUNTY OF SAN FRANCISCO
By: [t o be signed only if filed]
Title:

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APPENDIX F

SECURITIES DEPOSITORY AND THE BOOK-ENTRY SYSTEM
The information in this Appendix F has been obtained from DTC for use in securities offering documents, and the SFPUC takes no responsibility for the accuracy or completeness thereof. The SFPUC cannot and does not give any assurances that DTC, DTC Participants or Indirect Participants will distribute to the beneficial owners either (a) payments of interest, principal or premium, if any, with respect to the 2023CD Bonds or (b) certificates representing ownership interest in or other confirmation of ownership interest in the 2023CD Bonds, or that they will so do on a timely basis or that DTC, DTC Participants or DTC Indirect Participants will act in the manner described in this Official Statement. The current “Rules” applicable to DTC are on file with the Securities and Exchange Commission and the current “Procedures” of DTC to be followed in dealing with DTC Participants are on file with DTC.

As used in this Appendix F, “Securities” means the 2023CD Bonds, “Issuer” means the SFPUC, and “Agent” means the Trustee.

1. The Depository Trust Company (“DTC”), New York, NY, will act as securities depository for the securities (the “Securities”). The Securities will be issued as fully-registered securities registered in the name of Cede & Co. (DTC’s partnership nominee) or such other name as may be requested by an authorized representative of DTC.

One fully-registered Security certificate will be issued for each issue of the Securities, each in the aggregate principal amount of such issue, and will be deposited with DTC. If, however, the aggregate principal amount of any issue exceeds $500 million, one certificate will be issued with respect to each $500 million of principal amount, and an additional certificate will be issued with respect to any remaining principal amount of such issue.

2. DTC, the world’s largest securities depository, is a limited-purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code, and a “clearing agency” registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC’s participants (“Direct Participants”) deposit with DTC. DTC also facilitates the post- trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book- entry transfers and pledges between Direct Participants’ accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation (“DTCC”). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its r egulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non -U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (“Indirect Participants”). DTC has a Standard & Poor’s rating of AA+. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com. The information contained on this Internet site is not incorporated herein by reference.

3. Purchases of Securities under the DTC system must be made by or through Direct Participants, which will receive a credit for the Securities on DTC’s records. The ownership interest of each actual purchaser of each Security (“Beneficial Owner”) is in turn to be recorded on the Direct and Indirect Participants’ records.

Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered int o the transaction.

Transfers of ownership interests in the Securities are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Securities, except in the event that use of the book -entry system for the Securities is discontinued.

F-2

4. To facilitate subsequent transfers, all Securities deposited by Direct Participants with DTC are registered in the name o f DTC’s partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Securities with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Securities; DTC’s records reflect only the identity of the Direct Participants to whose accounts such Securities are credited, which may or may not be the Beneficial Owne rs. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers.

5. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of Securities may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Securities, such as redemptions, tenders, defaults, and proposed amendments to the Security documents. For example, Beneficial Owners of Securities may wish to ascertain that the nominee holding the Securities for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and r equest that copies of notices be provided directly to them.

6. Redemption notices shall be sent to DTC. If less than all of the Securities within an issue are being redeemed, DTC’s practice is to determine by lot the amount of the interest of each Direct Par ticipant in such issue to be redeemed.

7. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Securities unless authorized by a Direct Participant in accordance with DTC’s MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to Issuer as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.’s consenting or voting rights to those Direct Participants to whose accounts Securities are credited on the record date (identified in a listing attached to the Omnibus Proxy).

8. Redemption proceeds, distributions, and dividend payments on the Securities will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC’s practice is to credit Direct Participants’ accounts upon DTC’s receipt of funds and corresponding detail information from Issuer or Agent, on payable date in accordance with their respective holdings shown on DTC’s records. Payments by Participants to Beneficial Owners will be gov erned by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in “street name,” and will be the responsibility of such Participant and not of DTC, Agent, or Issuer, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions, and dividend payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of Issuer or Agent, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.

9. DTC may discontinue providing its services as depository with respect to the Securities at any time by giving reasonable notice to Issuer or Agent. Under such circumstances, in the event that a successor depository is not obtained, Security certificates are required to be printed and delivered.

10. Issuer may decide to discontinue use of the system of book- entry-only transfers through DTC (or a successor securities depository). In that event, Security certificates will be printed and delivered to DTC.

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

Norton Rose Fulbright US LLP draft 5/1/23

134832591.6

FORTY-FIFTH SUPPLEMENTAL INDENTURE
by and between
U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, as Trustee and

PUBLIC UTILITIES COMMISSION OF THE

CITY AND COUNTY OF SAN FRANCISCO
Dated as of _______ 1, 2023

AUTHORIZING THE ISSUANCE OF
$[PAR AMOUNT] AGGREGATE PRINCIPAL AMOUNT OF

PUBLIC UTILITIES COMMISSION OF THE

CITY AND COUNTY OF SAN FRANCISCO

SAN FRANCISCO WATER REVENUE BONDS
2023 SERIES CD
2023 SUB-SERIES C (REFUNDING)
(WSIP) (GREEN BONDS)
(Supplemental to the Amended and Restated Indenture,
dated as of August 1, 2002, as amended and supplemented)

134832591.6 i

TABLE OF CONTENTS
Page

DEFINITIONS
SECTION 194.01 Definitions ........................................................................................................2

PROVISIONS RELATING TO 2023 SUB-SERIES C BONDS
SECTION 195.01 Authorization and Terms of 2023 Sub-Series C Bonds ....................................3 SECTION 195.02 Terms of Redemption .......................................................................................5 SECTION 195.03 Form of 2023 Sub-Series C Bonds ...................................................................6 SECTION 195.04 Use of Depository .............................................................................................6 SECTION 195.05 Issuance of 2023 Sub-Series C Bonds ..............................................................7 SECTION 195.06 Application of Proceeds of 2023 Sub-Series C Bonds .....................................8 SECTION 195.07 2023 Sub-Series C Sinking Fund Account .......................................................9 SECTION 195.08 Establishment and Application of the 2023 Sub-Series C Rebate Fund ........12 SECTION 195.09 Tax Covenants ................................................................................................13 SECTION 195.10 Continuing Disclosure ....................................................................................14

MISCELLANEOUS
SECTION 196.01 Terms of 2023 Sub-Series C Bonds Subject to the Indenture ........................14 SECTION 196.02 Effective Date of Forty-Fifth Supplemental Indenture ...................................14 SECTION 196.03 Holder Consents to Amendments in Forty-Third Supplemental Indenture ....................................................................................................14 SECTION 196.04 Execution in Counterparts; No Seal Required for Execution .........................15

ADDITIONAL CITY REQUIREMENTS
SECTION 197.01 Conflict of Interest ..........................................................................................15 SECTION 197.02 Proprietary or Confidential Information of the City .......................................15 SECTION 197.03 Local Business Enterprise Utilization; Liquidated Damages .........................15 SECTION 197.04 Nondiscrimination; Penalties ..........................................................................16 SECTION 197.05 MacBride Principles—Northern Ireland ..........................................................17 SECTION 197.06 Tropical Hardwood and Virgin Redwood Ban ................................................18 SECTION 197.07 Drug-Free Workplace Policy ..........................................................................18 SECTION 197.08 Resource Conservation.....................................................................................18 SECTION 197.09 Compliance with Americans with Disabilities Act ........................................18 SECTION 197.10 Sunshine Ordinance ........................................................................................18 SECTION 197.11 Limitations on Contributions ..........................................................................18 134832591.6 ii
SECTION 197.12 Requiring Minimum Compensation for Covered Employees ........................19 SECTION 197.13 Requiring Health Benefits for Covered Employees .......................................20 SECTION 197.14 Prohibition on Political Activity with City Funds ..........................................22 SECTION 197.15 Preservative-treated Wood Containing Arsenic .............................................22 SECTION 197.16 Compliance with Laws ...................................................................................23 SECTION 197.17 Protection of Private Information ...................................................................23 SECTION 197.18 Food Service Waste Reduction Requirements ...............................................23 SECTION 197.19 Submitting False Claims; Monetary Penalties ................................................23 SECTION 197.20 Sugar-Sweetened Beverage Prohibition .........................................................24 SECTION 197.21 Agreement Made in California; Venue ............................................................24 SECTION 197.22 Ownership of Results ......................................................................................24 SECTION 197.23 Audit and Inspection of Records ....................................................................24 SECTION 197.24 Subcontracting ................................................................................................24 SECTION 197.25 Assignment .....................................................................................................24 SECTION 197.26 Non-Waiver of Rights .....................................................................................24 SECTION 197.27 City a Third Party Beneficiary ........................................................................25 Exhibit AV – Form of 2023 Sub-Series C Bond

134832591.6

FORTY-FIFTH SUPPLEMENTAL INDENTURE
(Supplemental to the Amended and Restated Indenture,
dated as of August 1, 2002, as amended and supplemented) Authorizing the Issuance of
$[PAR AMOUNT] Aggregate Principal Amount of
Public Utilities Commission of the
City and County of San Francisco
San Francisco Water Revenue Bonds
2023 Series CD
2023 Sub-Series C (Refunding)
(WSIP) (Green Bonds)
This Forty-Fifth Supplemental Indenture, dated as of _______ 1, 2023 (this “Forty-Fifth Supplemental Indenture ”), by and between 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 successor trustee (the “ Trustee”), and the

WHEREAS, this Forty -Fifth Supplemental Indenture is supplemental to the Amended and Restated Indenture, dated as of August 1, 2002, between the Commission and the Trustee, as amended and supplemented (the “Indenture”);
WHEREAS, as of _________, 2023, there are outstanding $_______ aggregate principal amount of Bonds issued pursuant to this Indenture;
WHEREAS, the 2010 Series ABC Bonds, the 2010 Series DE Bonds, the 2010 Series FG Bonds, the 2015 Refunding Series A Bonds, the 2016 Refunding Series AB Bonds, the 2016 Series C Bonds, the 2017 Series ABC Bonds, the 2017 Refunding Series DEFG Bonds, the 2019 Refunding Series ABC Bonds, the 2020 Series ABCD Bonds , the 2020 Refunding Series EFGH Bonds and the 2023 Series ABC Bonds are the only water revenue bonds of the Commission currently outstanding and secured by Revenues; WHEREAS, the Indenture provides that the Commission may, subject to the requirements of the Law and the Indenture, issue one or more other Series of Bonds, as well as refunding Bonds, from time to time pursuant to a supplemental indenture; WHEREAS, the Commission has determined to issue pursuant to this Forty -Fifth Supplemental Indenture a sub-series of Bonds designated “San Francisco Water Revenue Bonds, 2023 Series CD, 2023 Sub-Series C (Refunding) (WSIP) (Green Bonds) ” (the “2023 Sub-Series C Bonds” ) in the aggregate original principal amount of $[PAR AMOUNT] to purchase and cancel or defease and refund all or a portion of the outstanding _________ Bonds; 134832591.6 2
WHEREAS, simultaneous with the issuance of the 2023 Sub- Series C Bonds, the Commission has determined to issue pursuant to a Forty -Sixth Supplemental Indenture a sub- series of Bonds designated “ San Francisco Water Revenue Bonds, 2023 Series CD , 2023 Sub- Series D (Refunding) (Local Water )” (the “2023 Sub- Series D Bonds” and together with the 2023 Sub-Series C Bonds, the “2023 Series CD Bonds”) in the aggregate principal amount of $_______ to purchase and cancel or defease and refund all or a portion of the outstanding _________ Bonds;
WHEREAS, the 2023 Series CD Bonds (and each sub- series thereof) will be issued by the Commission under the Indenture payable on a parity with the other Outstanding Series of Bonds and any Parity State Loans;
WHEREAS, the conditions and limitations contained in the Law and the Indenture will be satisfied at the time of issuance of the 2023 Series CD Bonds; WHEREAS, in order to provide for the issuance of the 2023 Sub- Series C Bonds, to establish and declare the terms and conditions upon which the 2023 Sub- Series C Bonds are to be issued and to secure the payment of the principal thereof, and premium, if any, and interest thereon, the Commission has authorized the execution and delivery of this Forty -Fifth Supplemental Indenture; and
WHEREAS, all acts, conditions and things required by law to exist, to have happened and to have been performed precedent to and in connection with the execution and the entering into of this Forty -Fifth 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 Forty-Fifth Supplemental Indenture; NOW, THEREFORE, the parties hereto agree, as follows:

DEFINITIONS
SECTION 194.01 Definitions. The terms defined in this section shall, for all purposes of this Forty -Fifth Supplemental Indenture, have the meanings herein specified, to be equally applicable to both the singular and plural forms of any of the terms herein defined.

Terms defined in the Indenture not otherwise defined herein (including the preamble hereto) shall have the meanings specified therein.

DTC
The term “DTC” means The Depository Trust Company, New York, New York, a limited purpose trust company organized under the laws of the State of New York, in its capacity as Securities Depository for the 2023 Sub-Series C Bonds.

Escrow Agent
The term “Escrow Agent” means U.S. Bank Trust Company, National Association. 134832591.6 3
Escrow Agreement
The term “Escrow Agreement” means that certain Escrow Agreement, dated as of _______ 1, 2023, by and between the Commission and the Escrow Agent.

Final Notice of Acceptance
The term “Final Notice of Acceptance” means the Final Notice of Acceptance relating to the Invitation to Offer Bonds for Purchase made by the Commission dated _______, 2023.

Purchased Bonds
The term “Purchased Bonds” means the $[_________] in outstanding principal amount of the [____] Bonds as more particularly identified and accepted for purchase in the Final Notice of Acceptance.

PROVISIONS RELATING TO 2023 SUB-SERIES C BONDS
SECTION 195.01 Authorization and Terms of 2023 Sub- Series C Bonds. Additional Bonds of the Commission in the aggregate principal amount of $[PAR AMOUNT] are hereby authorized to be issued under the Charter and the Law and pursuant to the Indenture. (a) Such Bonds are designated as the “San Francisco Water Revenu e Bonds, 2023 Series CD , 2023 Sub- Series C (Refunding) (WSIP) (Green Bonds) ” (the “2023 Sub- Series C Bonds”). The aggregate principal amount of 2023 Sub- Series C Bonds that may be issued (except as may be otherwise provided in Section 2.08 of the Indenture) and Outstanding under this Forty-Fifth Supplemental Indenture shall be $[PAR AMOUNT]. The 2023 Sub- Series C Bonds shall be of the tenor known as Current Interest Bonds.

The 2023 Sub-Series C Bonds shall be issued as fully registered Bonds without coupons in denominations of $5,000 or any integral multiple thereof. The 2023 Sub- Series C Bonds shall be dated as of the date of delivery thereof, and shall accrue interest from such date.

The 2023 Sub-Series C Bonds shall be initially registered in the name o f “Cede & Co.,” as nominee of DTC, and shall be evidenced by one 2023 Sub- Series C Bond maturing on each maturity date in a denomination corresponding to the total principal designated to mature on such date. Registered ownership of the 2023 Sub- Series C Bonds, or any portion thereof, may not thereafter be transferred except as set forth in Section 195.04 herein. (b) The 2023 Sub-Series C Bonds shall mature on November 1 on the following dates and in the following amounts and shall bear interest at the following rates per annum payable on November 1, 2023, and semiannually thereafter on May 1 and November 1 in each year, calculated on the basis of a 360-day year consisting of twelve 30-day months:
134832591.6 4
Maturity Date
(November 1) Principal Amount Interest Rate
$ %

*
*
__________________
* Term bond.

The 2023 Sub-Series C Bonds maturing on November 1, 20___ and November 1, 20___ are hereby designated as Term Bonds.
(c) Subject to Section 195.04 hereof, the principal of and premium, if any, on the 2023 Sub-Series C Bonds shall be payable by check or wire transfer (as described in the next paragraph) in lawful money of the United States of America to the Owner thereof, upon the surrender thereof at the corporate trust office of U.S. Bank Trust Company, National Association, in San Francisco, California, as the Trustee, or such other office designated by the Trustee.

The interest on the 2023 Sub-Series C Bonds shall be payable in like lawful money to the person whose name appears on the bond registration books of the Trustee as the Owner thereof as of the close of business on the 15
th day of the calendar month immediately preceding an
interest payment date, whether or not such day is a Business Day, such interest to be paid by check mailed to such Owner at such address as appears on such registration books or at such address as such Owner may have filed with the Trustee for that purpose, or at the request of an Owner of at least $1,000,000 in aggregate principal amount of 2023 Sub- Series C Bonds filed with the Trustee by such 15
th day, by wire transfer to such account designated in such request at a financial institution in the United States.
(d) Each 2023 Sub-Series C Bond shall bear interest from the interest payment date next preceding the date of authentication thereof unless it is authenticated as of a day during the period from the 16
th day of the calendar month next preceding any interest payment date to the interest payment date, inclusive, in whi ch event it shall bear interest from such interest payment date, or unless it is authenticated on or before September 15, 2023, in which event it shall bear interest from [CLOSING DATE]; provided, however, that if, at the time of authentication of any Bond, interest is in default on Outstanding Bonds, such Bond shall bear interest from the interest payment date to which interest has previously been paid or made available for payment on the Outstanding Bonds and shall be payable to the Owners thereof of record as of a special date as shall be established by the Trustee following such default. (e) The 2023 Sub- Series C Bonds shall be subject to redemption as provided in Section 195.02.
134832591.6 5
(f) The Trustee shall assign each 2023 Sub- Series C Bond authenticated and registered by it a distinctive letter or number, or letter and number, and shall maintain a record thereof which shall be available to the Commission for inspection. (g) There shall be no Required Reserve for the 2023 Sub-Series C Bonds. (h) The Commission has reviewed all proceedings heretofore taken relative to the authorization of the 2023 Sub- Series C Bonds and has found, as a result of such review, that all conditions, things and acts required by law to exist, happen or be performed precedent to and in the issuance of the 2023 Sub- Series C Bonds do exist, have happened and have been performed in due time, form and manner as required by law, and the Commission is authorized, pursuant to each and every requirement of law, to issue the 2023 S ub-Series C Bonds in the manner and form provided in this Forty-Fifth Supplemental Indenture.

SECTION 195.02 Terms of Redemption.
(a) Optional Redemption. The 2023 Sub- Series C Bonds maturing on or after November 1, 20__, shall be subject to redemption prior to their stated maturity, at the option of the Commission, from any source of available funds, as a whole or in part, on any date on or after November 1, 20__, from such maturities or portions of maturities as are determined by the Commission and by lot within any one maturity, at a redemption price equal to 100% of the principal amount of the 2023 Sub- Series C Bonds to be redeemed, plus accrued interest thereon to the date fixed for redemption, without premium.
(b) Mandatory Sinking Fund Redemption.
(i) The 2023 Sub-Series C Bonds maturing on November 1, 20__, are further subject to redemption prior to their stated maturity, and payable from the 2023 Sub-Series C Bonds Sinking Fund Account (described in Section 195.07), on each November 1 on and after November 1, 20__, by lot within any such maturity if less than all of the 2023 Sub-Series C Bonds of such maturity are then being redeemed, upon payment of the principal amount thereof and accrued interest thereon to the date fixed for redemption, without premium. Such sinking fund redemption of the 2023 Sub- Series C Bonds maturing November 1, 20__ shall only be made in amounts equal to, and in accordance with, the schedule of principal amounts of 2023 Sub- Series C Bonds to be redeemed in each such year set forth in Section 195.07 below (such schedule of principal amounts subject to adjustment as directed by the Commission in the event of optional redemption of any portion of such 2023 Sub- Series C Bonds prior to maturity pursuant to Section 195.02(a) above).
(ii) The 2023 Sub-Series C Bonds maturing on November 1, 20__, are further subject to redemption prior to their stated maturity, and payable from the 2023 Sub-Series C Bonds Sinking Fund Account (described in Section 195.07), on each November 1 on and after November 1, 20__, by lot within any such maturity if less than all of the 2023 Sub-Series C Bonds of such maturity are then being redeemed, upon payment of the principal amount thereof and accrued interest thereon to the date fixed for redemption, without premium. Such sinking fund redemption of the 2023 Sub- Series C Bonds 134832591.6 6
maturing November 1, 20__ shall only be made in amounts equal to, and in accordance with, the schedule of principal amounts of 2023 Sub- Series C Bonds to be redeemed in each such year set forth in Section 195.07 below (such schedule of principal amounts subject to adjustment as directed by the Commission in the event of optional redemption of any portion of such 2023 Sub- Series Term D Bonds prior to maturity pursuant to Section 195.02(a) above).
(c) Other Terms of Redemption. Except as otherwise provided herein, 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 shall apply to the redemption of the 2023 Sub-Series C Bonds.

SECTION 195.03 Form of 2023 Sub-Series C Bonds. The 2023 Sub-Series C Bonds 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 AV to this Forty -Fifth Supplemental Indenture, with necessary or appropriate variations, omissions and insertions as permitted or required by this Forty-Fifth Supplemental Indenture.

Pursuant to Section 3.06 and 9.01(b) of the Indenture, execution of the 2023 Sub-Series C Bonds does not require the seal of the Commission.

SECTION 195.04 Use of Depository.
(a) The 2023 Sub- Series C Bonds shall be initially registered as provided in Section 195.01 hereof. Registered ownership of the 2023 Sub- Series C Bonds, or any portions thereof, may not thereafter be transferred except:
(i) to any successor of DTC or its nominee, or of any substitute depository designated pursuant to clause (ii) of this subsection (a) (a “ Substitute Depository” ); provided that any successor of DTC or Substitute Depository shall be qualified under any applicable laws to provide the service proposed to be provided by it; (ii) to any Substitute Depository not objected to by the Trustee, upon (1) the resignation of DTC or its successor (or any Substitute Depository or its successor) from its functions as depository, or (2) a determination by the Commission that DTC (or its successor) is no longer able to carry out its functions as depository; provided that any such Substitute Depository shall be qualified under any applicable laws to provide the services proposed to be provided by it; or
(iii) to any person as provided below, upon (1) the resignation of DTC or its successor (or any Substitute Depository or its successor) from its functions as depository, or (2) a determination by the Commission to remove DTC or its successor (or Substitute Depository or its successor) from its functions as depository. (b) In the case of any transfer pursuant to clause (i) or clause (ii) of subsection (a) of this Section, upon receipt of all Outstanding 2023 Sub- Series C Bonds by the Trustee, together with a Written Request of the Commission to the Trustee designating the Substitute Depository, a single new 2023 Sub- Series C Bond, which the Commission shall prepare or cause to be prepared, shall be executed and delivered for each maturity of 2023 Sub -Series C Bonds then 134832591.6 7
Outstanding, registered in the name of such successor or such Substitute Depository, or their nominees, as the case may be, all as specified in such Written Request of the Commission. (c) In the case of any transfer pursuant to clause (iii) of subsection (a) of this Section, upon receipt of all Outstanding 2023 Sub-Series C Bonds by the Trustee, together with a Written Request of the Commission to the Trustee, new 2023 Sub- Series C Bonds, which the Commission shall prepare or cause to be prepared in definitive form, shall be executed and delivered in such denominations and registered in the names of such persons as are requested in such Written Request of the Commission, subject to the limitations of Section 195.01 hereof, provided that the Trustee shall not be required to deliver such new 2023 Sub- Series C Bonds within a period less than 60 days after the date of receipt of such Written Request from the Commission.
(d) In the case of a partial redemption or an advance refunding of any 2023 Sub- Series C Bonds evidencing a portion of the principal maturing in a particular year, DTC or its successor (or any Substitute Depository or its successor) shall make an appropriate notation on such 2023 Sub-Series C Bonds indicating the date and amounts of such reduction in principal, in form acceptable to the Trustee. The Trustee shall not be liable for such Securities Depository’ s (or any Substitute Depository’ s) failure to make su ch notations or errors in making such notations.
(e) The Commission and the Trustee shall be entitled to treat the person in whose name any 2023 Sub- Series C Bond is registered as the Owner thereof for all purposes of the Indenture and any applicable laws, notwithstanding any notice to the contrary received by the Trustee or the Commission; and the Commission and the Trustee shall not have responsibility for transmitting payments to, communicating with, notifying, or otherwise dealing with any beneficial owners of the 2023 Sub- Series C Bonds. Neither the Commission nor the Trustee shall have any responsibility or obligation, legal or otherwise, to any such beneficial owners or to any other party, including DTC or its successor (or Substitute Depository or its s uccessor), except to the Owner of any 2023 Sub- Series C Bonds, and the Trustee may rely conclusively on its records as to the identity of the Owners of the 2023 Sub-Series C Bonds. (f) Notwithstanding any other provision of this Forty -Fifth Supplemental Indent ure and so long as all Outstanding 2023 Sub- Series C Bonds are registered in the name of Cede & Co. or its registered assigns, the Commission and the Trustee shall cooperate with Cede & Co., as sole registered Bondowner, and its registered assigns, in effecting payment of the principal of and redemption premium, if any, and interest on the 2023 Sub- Series C Bonds by arranging for payment in such manner that funds for such payments are properly identified and are made available on the date they are due all in accordance with the letter of representations delivered by the Commission and the Trustee to DTC with respect to the 2023 Sub -Series C Bonds, the provisions of which the Trustee may rely upon to implement the foregoing procedures notwithstanding any inconsistent provisions herein.

SECTION 195.05 Issuance of 2023 Sub-Series C Bonds.
(a) At any time after the execution of this Forty -Fifth Supplemental Indenture, the Commission may execute and the Trustee may authenticate and, upon a Written Request or 134832591.6 8
Certificate of the Commission, deliver 2023 Sub- Series C Bonds in the aggregate principal amount of $[PAR AMOUNT] to the initial purchasers thereof specified in such Written Request or Certificate.

SECTION 195.06 Application of Proceeds of 2023 Sub-Series C Bonds. (a) The original purchaser of the 2023 Sub- Series C Bonds will pay and deliver the purchase price of the 2023 Sub- Series C Bonds (including any good faith deposit paid prior to the Closing Date and applied to such purchase price) equal to $[_________] to the T rustee, and the Trustee shall deposit and transfer this amount, [together with $[_________] from the [_________] Fund,] as follows:

1. The Trustee shall deposit $[_________] in a separate fund to be known as the “2023 Series CD Costs of Issuance Fund,” which the Trustee hereby agrees to establish and maintain.

2. The Trustee shall deposit $[_________] in a separate fund to be known as the “2023 Sub- Series C E Purchased Bonds Fund,” which the Trustee hereby agrees to establish and maintain.

3. The Trustee shall transf er the remainder of such sum, in the amount of $[_________], to the Escrow Agent to be applied pursuant to the terms of the Escrow Agreement.
(b) Before any payment is made by the Trustee to pay costs of issuance from the 2023 Series CD Costs of Issuance Fund, the Commission shall cause to be filed with the Trustee a Written Requisition of the Commission showing with respect to each payment to be made:

1. the item number of the payment;

2. the name and address of the person to whom payment is due;

3. the amount to be paid; and

4. the purpose for which the obligation to be paid was incurred.

Each such Written Requisition shall state, and shall be sufficient evidence to the Trustee:
(y) that obligations in the stated amounts have been incurred by the Commission and that each item thereof is a proper charge; and (z) that there has not been filed with or served upon the Commission notice of any lien, right to lien or attachment upon, or claim affecting the right to receive payment of, any of the moneys payable to any of the persons named in such Written Requisition, which has not been released or will not be released simultaneously with the payment of such obligation.
134832591.6 9
Upon receipt of each such Written Requisition, the Trustee will pay the amounts set forth in such Written Requisition as directed by the terms hereof. The Trustee need not make any such payment if it has received notice of any lien, right to lien or attachment upon, or claim affecting the right to receive payment of, any of the moneys to be so paid, which has not been released or will not be released simultaneously with such payment.

When all costs of issuance of the 2023 Series CD Bonds have been paid, the Commission shall deliver a Certificate of the Commission stating such fact to the Trustee (as described in clause (c) below).
(c) The money in the 2023 Series CD Costs of Issuance Fund (including such amounts deposited therein pursuant to the Forty-Sixth Supplemental Indenture) shall be used and disbursed in the manner provided herein and therein for the purpose of paying all costs of issuance incidental to or connected with the issuance of the 2023 Series CD Bonds (or for making reimbursements to the Commission or any other person, firm or corporation for such costs theretofore paid by such person or it).

Any balance of money remaining in the 2023 Series CD Costs of Issuance Fund after the payment of all costs incidental to or connected with the issuance of the 2023 Series CD Bonds (as certified to the Trustee by the Commission pursuant to the final paragraph of clause (b) above) or on [_________], 2023, whichever is earlier, shall be transferred by the Trustee to the Commission and the 2023 Series CD Costs of Issuance Fund shall be closed. (d) On the delivery date of the 2023 Sub- Series C Bonds, the monies set aside and placed within the 2023 Sub- Series C E Purchased Bonds Fund pursuant to this Forty -Fifth Supplemental Indenture and the Forty -Sixth Supplemental Indenture shall be applied, together with other amounts, solely to payment of the purchase price of and accrued interest on the Purchased Bonds. The Trustee shall wire the purchase price of and accrued interest on the Purchased Bonds to DTC for credit to the Purchased Bonds, all as set forth in in a Written Request of the Commission delivered concurrently with delivery of the 2023 Sub- Series C E Bonds, through the Automated Tender Option Program (“ATOP”). The Commission directs the Trustee to cancel such Purchased Bonds. At such time as the Purchased Bonds have been purchased and cancelled, or at such time as no funds remain in the 2023 Sub- Series C E Purchased Bonds Fund, the Trustee may close and terminate the 2023 Sub- Series CE Purchased Bonds Fund.

SECTION 195.07 2023 Sub-Series C Sinking Fund Account.
(a) The Trustee shall establish and hold within the Principal Fund established under Section 5.02(b) of the Indenture, a 2023 Sub- Series C Sinking Fund Account, which the Commission hereby covenants and agrees to cause to be maintained, for payment of the Bond Obligation of the 2023 Sub-Series C Term Bonds.
(b) The Trustee, on or before October 31 of each year (commencing on or before October 31, 20__), shall deposit in the 2023 Sub- Series C Sinking Fund Account from the Principal Fund moneys in an amount sufficient to call and redeem in accordance with Section 195.02(b) hereof or to pay at final maturity, as the case may be, on the next succeeding 134832591.6 10
November 1, the principal of the 2023 Sub-Series C Term Bonds maturing on November 1, 20__ in the following respective principal amounts in each of the following years (each such deposit of moneys being referred to as a “ 2023 Sub -Series C Minimum Sinking Fund Account Payment”):

Redemption Date
(November 1) Principal Amount
$

†
______________
† Maturity
The Trustee, on or before October 31 of each year (commencing on or before October 31, 20__), shall deposit in the 2023 Sub- Series C Sinking Fund Account from the Principal Fund moneys in an amount sufficient to call and redeem in accordance with Section 195.02(b) hereof or to pay at final maturity, as the case may be, on the next succeeding November 1, the principal of the 2023 Sub- Series C Term Bonds maturing on November 1, 20__ in the following respective principal amounts in each of the following years (each such deposit of moneys being referred to as a “2023 Sub-Series C Minimum Sinking Fund Account Payment”):

Redemption Date
(November 1) Principal Amount
$

†
______________
† Maturity
134832591.6 11
(c) During the 12- month period ending on September 15 of each year immediately preceding each redemption from the 2023 Sub- Series C Sinking Fund Account, the Commission may satisfy, in whole or in part, the 2023 Sub- Series C Minimum Sinking Fund Account Payment and the redemption of 2023 Sub-Series C Term Bonds therefrom by depositing with the Trustee 2023 Sub-Series C Term Bonds for cancellation prior to the Trustee ’s selection of the 2023 Sub-Series C Term Bonds for redemption.
(d) In lieu of the redemption of 2023 Sub- Series C Term Bonds pursuant to Section 195.02(b) hereof, at the Written Request of the Commission, moneys in the 2023 Sub- Series C Sinking Fund Account may be used and withdrawn by the Trustee at any time for the purchase of 2023 Sub- Series C Term Bonds at public or private sale, as and when and at such prices (including brokerage and other charges, but excluding accrued interest, which is payable from the Interest Fund) as the Commission shall direct by Written Request, but not to exceed the principal thereof, and all 2023 Sub- Series C Term Bonds so purchased by the Trustee or deposited by the Commission, shall be cancelled and delivered to the Commission; provided, however, that:
(i) all moneys in the 2023 Sub- Series C Sinking Fund Account on each September 15, beginning on September 15, 20__ and ending on September 15, 20__, together with any additional sums the Trustee expects to receive for deposit in the 2023 Sub-Series C Sinking Fund Account after such date and on or before the next succeeding November 1, shall be used and withdrawn by the Trustee solely for the purpose of redeeming the 2023 Sub -Series C Term Bonds that are subject t o redemption on such next succeeding November 1 pursuant to Section 195.02(b) and Section 195.07(b) hereof; and
(ii) the Trustee shall during each 12 month period beginning with the 12- month period ending on November 1, 20__ purchase or call and redeem (as her ein provided) an aggregate amount of 2023 Sub- Series C Term Bonds equal to at least the amount of Bond Obligation of the 2023 Sub -Series C Term Bonds identified in Section 195.07(b) above for such 12 -month period reduced by the principal amount of 2023 Sub- Series C Term Bonds deposited by the Commission with the Trustee as described in Section 195.07(c) hereof for such 12-month period, except that if during any such 12-month period, 2023 Sub- Series C Term Bonds of any Term Bond maturity have otherwise been redeemed or purchased by the Trustee or deposited by the Commission in excess of the amount of Bond Obligation of the 2023 Sub- Series C Term Bonds identified in Section 195.07(b) above for such 12-month period, unless otherwise directed by the Commission at the time of such redemption, purchase or deposit, the remaining 2023 Sub- Series C Minimum Sinking Account Payment amounts stated in Section 195.07(b) above shall be deemed to have been reduced on a Proportionate Basis, and further except that moneys in t he 2023 Sub-Series C Sinking Fund Account shall be used, to the extent necessary, to purchase or retire the balance of the Outstanding 2023 Sub-Series C Term Bonds at the final maturity thereof.

The Commission hereby covenants and agrees with the Owners of the 2023 Sub-Series C Bonds to call and redeem 2023 Sub- Series C Bonds from the 2023 Sub- Series C Sinking Fund Account pursuant to this Section on November 1 in each of the years, and in the amounts, stated 134832591.6 12
in Section 195.07(b) above (subject to adjustment of such amounts in the event of optional redemption of such 2023 Sub-Series C Term Bonds or as otherwise hereinabove provided).

SECTION 195.08 Establishment and Application of the 2023 Sub- Series C Rebate Fund.
(a) The Trustee shall establish and maintain a fund separate from any other fund established and maintained hereunder to be known as the “2023 Sub- Series C Rebate Fund” (for purposes of this Article, the “Rebate Fund”). Within the Rebate Fund, the Trustee shall maintain such accounts as it is instructed by the Commission as necessary in order to comply with the terms and requirements of the Tax Certificate with respect to the 2023 Sub- Series C Bonds, dated the date of issuance of the 2023 Sub- Series C Bonds (for purposes of this Article, the “Tax Certificate”).

Subject to the transfer provisions provided in paragraph (e) below, all money at any time deposited in the Rebate Fund shall be held by the Trustee for the account of the Commission in trust, to the extent required to satisfy the requirements for rebate, as set forth in the Tax Certificate (for purposes of this Article, the “Rebate Requirement”), for payment to the federal government of the United States of America, and no other person shall have any rights in or claim to such money. All amounts deposited into or on deposit in the Rebate Fund shall be governed by this Section, by Section 195.10 hereof and by the Tax Certificate (which is incorporated herein by reference). The Trustee shall be deemed conclusively to have complied with such provisions and fulfilled its obligation with respect to rebate as long as it follows the written directions of the Commission, including supplying all necessary information in the manner provided in the Tax Certificate. The Trustee shall not be required to take any actions under this Section, Section 195.10 hereof or the Tax Certificate in the absence of written directions by the Commission, and shall have no liability or responsibility to enforce compliance by the Commission with the terms of the Tax Certificate nor make computations in connection therewith.
(b) Upon the Commission’s written direction, an amount shall be deposited in the Rebate Fund by the Trustee from deposits by the Commission so that the balance of the amount on deposit therein equals the Rebate Requirement. Computations of the Rebate Requirement shall be furnished by or on behalf of the Commission in accordance with the Tax Certificate.

The Trustee shall have no obligation to rebate any amounts required to be rebated pursuant to this Section, other than from moneys held in the funds and accounts created under the Indenture or from other moneys provided to it by or on behalf of the Commission. (c) The Trustee shall invest all amounts held in the Rebat e Fund in Permitted Investments as instructed in writing by the Commission, subject to the restrictions set forth in the Tax Certificate. Moneys shall not be transferred from the Rebate Fund except as provided in paragraph (e) below.

Upon receipt of the Commission’s written directions, the Trustee shall remit part or all of the balances in the Rebate Fund to the United States, as so directed. In addition, if the Commission so directs, the Trustee will deposit moneys into or transfer moneys out of the 134832591.6 13
Rebate Fund from or into such accounts or funds as directed by the Commission’s written directions. Any funds remaining in the Rebate Fund after redemption and payment of all of the 2023 Sub- Series C Bonds and payment and satisfaction of any Rebate Requirement shall be withdrawn and remitted to the Commission upon the Commission’s written request. (d) Notwithstanding any other provision of the Indenture, the obligation to remit the Rebate Requirement to the United States and to comply with all other requirements of this Section, Section 195.10 hereof and the Tax Certificate shall survive the defeasance or payment in full of the 2023 Sub-Series C Bonds.

SECTION 195.09 Tax Covenants.

The Commission covenants that it will not take any action, or fail to take any action, if any such action or failure to take action would adversely affect the exclusion from gross income of the interest on the 2023 Sub-Series C Bonds under Section 103 of the Code.

The Commission will not directly or indirectly use or permit the use of any proceeds of the 2023 Sub-Series C Bonds or any other funds of the Commission, or take or omit to take any action that would cause the 2023 Sub-Series C Bonds to be “arbitrage bonds” within the meaning of Section 148(a) of the Code. To that end, the Commission will com ply with all requirements of Section 148 of the Code to the extent applicable to the 2023 Sub- Series C Bonds. If at any time the Commission is of the opinion that for purposes of this Section it is necessary to restrict or limit the yield on the investmen t of any moneys held by the Trustee under the Indenture or otherwise, the Commission shall so instruct the Trustee in writing, and the Trustee shall take such action as required by such instructions.

Without limiting the generality of the foregoing, the Commission agrees that there shall be paid from time to time all amounts required to be rebated to the United States pursuant to Section 148(f) of the Code and any temporary, proposed or final Treasury Regulations as may be applied to the 2023 Sub-Series C Bonds from time to time. This covenant shall survive payment in full or defeasance of the 2023 Sub-Series C Bonds. The Commission specifically covenants to pay or cause to be paid to the United States, at the times and in the amounts determined under Section 195.09 hereof, the Rebate Requirement. The Trustee agrees to comply with all written instructions of the Commission given in accordance with the Tax Certificate.

Notwithstanding any provision of this Section and Section 195.09 hereof, if the Commission provides to the Trustee an opinion of nationally recognized bond counsel to the effect that any action required under this Section and Section 195.09 hereof or under the Tax Certificate is no longer required, or to the effect that some further action is required, to maintain the exclusion from gross income of the interest on the 2023 Sub- Series C Bonds under Section 103 of the Code, the Commission and the Trustee may rely conclusively on such opinion in complying with the provisions hereof, and the covenants hereunder shall be deemed to be modified to that extent.

The Commission shall assure that the proceeds of the 2023 Sub- Series C Bonds are not so used as to cause the 2023 Sub- Series C Bonds to satisfy the private business tests of Section 141(b) of the Code or the private loan financing test of Section 141(c) of the Code. 134832591.6 14
The Commission shall not take any action or permit or suffer any action to be taken if the result of the same would be to cause any of the 2023 Sub- Series C Bonds to be “federally guaranteed” within the meaning of Section 149(b) of the Code.

SECTION 195.10 Continuing Disclosure.

The Commission hereby covenants and agrees that it will comply with and carry out all of the provisions of that certain Continuing Disclosure Certificate, dated as of the date of issuance of the 2023 Sub- Series C Bonds, executed and delivered by the Commission in connection with the issuance of the 2023 Sub- Series C Bonds, as it may be supplemented and amended in accordance with its terms (the “ 2023 Series CD Continuing Disclosure Certificate”).

Notwithstanding any other provision of the Indenture, failure of the Commission to comply with the 2023 Series CD Continuing Disclosure Certificate shall not be considered an Event of Default; however, any Participating Underwriter (as such term is defined in the 2023 Series CD Continuing Disclosure Certificate) or any Bondowner or beneficial owner may take such actions as may be necessary and appropriate, including seeking specific performance by court order, to cause the Commission to comply with its obligations under this Section, and the sole remedy in the event of any failure of the Commission to comply with the 2023 Series CD Continuing Disclosure Certificate shall be an action to compel performance.

MISCELLANEOUS
SECTION 196.01 Terms of 2023 Sub-Series C Bonds Subject to the Indenture.

Except as expressly provided in this Forty -Fifth Supplemental Indenture, every term and condition contained in the Indenture shall apply to this Forty -Fifth Supplemental Indenture, and to the 2023 Sub- Series C Bonds, with the same force and effect as if the same were herein set forth at length, with such omissions, variations and modifications thereof as may be appropriate to make the same conform to this Forty-Fifth Supplemental Indenture.

This Forty-Fifth Supplemental Indenture and all the terms and provisions herein contained shall form part of the Indenture as fully and with the same effect as if all such terms and provisions had been set forth in the Indenture. Except as expressly amended by Article CLXXXVII in the Forty -Third Supplemental Indenture, the Indenture is hereby ratified and confirmed and shall continue in full force and effect in accordance with the terms and provisions thereof. The amendments set forth in Article CLXXXVII in the Forty- Third Supplemental Indenture shall be incorporated as part of the Indenture upon their effectiveness as set forth in Section 187.01 in the Forty-Third Supplemental Indenture.

SECTION 196.02 Effective Date of Forty-Fifth Supplemental Indenture. This Forty- Fifth Supplemental Indenture shall take effect upon its execution and delivery.

SECTION 196.03 Holder Consents to Amendments in Forty -Third Supplemental Indenture. By acceptance of a 2023 Sub- Series C Bond, the holder thereof consents to the amendments described in Article CLXXXVII in the Forty-Third Supplemental Indenture. 134832591.6 15
SECTION 196.04 Execution in Counterparts; No Seal Required for Execution. This Forty-Fifth Supplemental Indenture may be executed in several counterparts, each of which shall be deemed an original, and all of which shall constitute but one and the same instrument. No seal of the Commission is required for the execution of this Forty-Fifth Supplemental Indenture.

ADDITIONAL CITY REQUIREMENTS
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 197.01 Conflict of Interest. Through its execution of this Forty -Fifth 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 Sect ion 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 Forty-Fifth Supplemental Indenture.

SECTION 197.02 Proprietary or Confidential Information of the City. The Trustee understands and agrees that, in the performance of the work or services under this Forty-Fifth Supplemental Indenture or in contemplation thereof, the Trustee may have access to private or confidential information which may be owned or controlled by the City and that such information may contain proprietary or confidential details, the disclosure of which to t hird parties may be damaging to the City. The Trustee agrees that all information disclosed by City to the Trustee shall be held in confidence and used only in the performance of this Forty -Fifth Supplemental Indenture. The Trustee shall exercise the same standard of care to protect such information as a reasonably prudent contractor would use to protect its own proprietary data.

SECTION 197.03 Local Business Enterprise Utilization; Liquidated Damages. (a) The LBE Ordinance
The Trustee shall comply with all the requirements of the Local Business Enterprise and Non-Discrimination in Contracting 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 Forty -Fifth Supplemental Indenture. Such provisions of the LBE Ordinance are incorporated by reference and made a part of this Forty -Fifth Supplemental Indenture as though fully set forth in this Section. The Trustee ’s willful failure to comply with any applicable provisions of the LBE Ordinance is a material breach of the Tr ustee’s obligations under this Forty-Fifth Supplemental Indenture and shall entitle City, subject to any applicable notice and cure provisions set forth in 134832591.6 16
this Forty-Fifth Supplemental Indenture, to exercise any of the remedies provided for under this Forty-Fifth Supplemental Indenture, under the LBE Ordinance or otherwise available at law or in equity, which remedies shall be cumulative unless this Forty -Fifth Supplemental Indenture expressly provides that any remedy is exclusive. In addition, the Truste e shall comply fully with all other applicable local, state and federal laws prohibiting discrimination and requiring equal opportunity in contracting, including subcontracting.
(b) 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 Forty -Fifth 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 Forty -Fifth Supplemental Indenture, or 10% of the total amount of this Forty -Fifth Supplemental Indenture, or $1,000, whichever is greatest. The Director of the City ’s Contracts Monitoring Division or any other public official au thorized to enforce the LBE Ordinance (separately and collectively, the “Director of CMD”) may also impose other sanctions against the Trustee authorized in the LBE Ordinance, including declaring the Trustee to be irresponsible and ineligible to contract w ith the City for a period of up to five years or revocation of the Trustee ’s LBE certification. The Director of CMD 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 Forty -Fifth Supplemental Indenture, the Trustee acknowledges and agrees that any liquidated damages assessed by the Director of the CMD shall be payable to City upon demand. The 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 Forty -Fifth Supplemental Indenture, and shall make s uch records available for audit and inspection by the Director of CMD or the Controller upon request.

SECTION 197.04 Nondiscrimination; Penalties.
(a) Trustee Shall Not Discriminate
In the performance of this Forty -Fifth Supplemental Indenture, the Trustee agrees not to discriminate against any employee, City and County employee working with the Trustee or subcontractor, applicant for employment with the Trustee or subcontractor, or against any person seeking accommodations, advantages, facilities, privileges, services, or m embership 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, domest ic partner status, marital status, disability or Acquired Immune Deficiency Syndrome or HIV status (AIDS/HIV status), or association with members of such protected classes, or in retaliation for opposition to discrimination against such classes. 134832591.6 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 Purchasing) and shall require all subcontractors to comply with such provisions. The Trustee ’s failure to comply with the obligations in this subsection shall constitute a material breach of this Forty-Fifth Supplemental Indenture. (c) Nondiscrimination in Benefits
The Trustee does not as of the date of this Forty -Fifth Supplemental Indenture and will not during the term of this Forty -Fifth 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 specif ied above, between employees with domestic partners and employees with spouses, and/or between the domestic partners and spouses of such employees, where the domestic partnership has been registered with a governmental entity pursuant to state or local law authorizing such registration, subject to the conditions set forth in §12B.2(b) of the San Francisco Administrative Code. (d) Condition to Contract
As a condition to this Forty -Fifth Supplemental Indenture, the Trustee shall execute the “Chapter 12B Declarati on: Nondiscrimination in Contracts and Benefits ” form (Form CMD- 12B-101) with supporting documentation and secure the approval of the form by the San Francisco Contracts Monitoring Division (formerly ‘Human Rights Commission’). (e) Incorporation of Administrative Code Provisions by Reference The provisions of Chapters 12B and 12C of the San Francisco Administrative Code are incorporated in this Section by reference and made a part of this Forty -Fifth 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 Forty -Fifth 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) and 12C.3(g) 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 Forty -Fifth Supplemental Indenture may be assessed against the Trustee and/or deducted from any payments due the Trustee.

SECTION 197.05 MacBride Principles—Northern Ireland. Pursuant to San Francisco Administrative Code §12F.5, the City and County of San Francisco urges companies doing business in Northern Ireland to move towards resolving employment inequities, and encourages such companies to abide by the MacBride Principles. The City and County of San Francisco urges San Francisco companies to do business with corporations that abide by the MacBride Principles. By signing below, the person executing this Forty -Fifth Supplemental Indenture on 134832591.6 18
behalf of the Trustee acknowledges and agrees that he or she has read and understood this Section.

SECTION 197.06 Tropical Hardwood and Virgin Redwood Ban. Pursuant to §804(b) of the San Francisco Environment Code, the City and County of San Francisco urges contractors not to import, purchase, obtain, or use for any purpose, any tropical hardwood, tropical hardwood wood product, virgin redwood or virgin redwood wood product.

SECTION 197.07 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 prohi bited 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 Forty-Fifth Supplemental Indenture.

SECTION 197.08 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 this Forty-Fifth Supplemental Indenture.

SECTION 197.09 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 Forty -Fifth Supplemental Indenture in a manner that complies with the ADA and any and all other applicable federal, state and local disability rights legislation. The Trustee agrees not to discriminate against disabled persons in the provision of services, benefits or activities provided under this Forty -Fifth 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 Forty-Fifth Supplemental Indenture.

SECTION 197.10 Sunshine Ordinance . In accordance with San Francisco Administrative Code §67.24(e), contracts, contractors ’ bids, responses t o 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 197.11 Limitations on Contributions . Through execution of this Forty - Fifth 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 the board of a state agency on which an appointee of that individual serves, (2) a candidate for 134832591.6 19
the office held by such individual, or (3) a committee controlled by such individual, at any time from the commencement of negotiations for the contract until the later of either the termination of negotiations for such contract or six months after the date the contract is approved. The Trustee acknowledges that the foregoing restriction applies only if the contract or a combination or series of contracts approved by the same individual or board in a fiscal year have a total anticipated or actual value of $50,000 or more. The Trustee further acknowledges that the prohibition on contributions applies to each prospective party to the contract; each member of the Trustee’s board of directors; the 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. The Trustee further agrees to provide to the City the names of each person, entity or committee described above.

SECTION 197.12 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 Administ rative Code Chapter 12P (Chapter 12P), including the remedies provided, and implementing guidelines and rules. The provisions of Section 12P.5 and 12P.5.1 of Chapter 12P are incorporated herein by reference and made a part of this Forty-Fifth Supplemental Indenture as though fully set forth.

The text of the MCO is available on the web at www.sfgov.org/olse/mco. A partial listing of some of the 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.
(b) The MCO requires the Trustee to pay the Trustee ’s employees a minimum hourly gross compensation wage rate and to provide minimum compensated and uncompensated time off. The minimum wage rate may change from year to year and the Trustee is obligated to keep informed of the then -current requirements. Any subcontract entered into by the Trustee shall require the subcontractor to comply with the requirements of the MCO and sha ll 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 Forty -Fifth Supplemental Indenture comply with the requirements of the MCO. If any subcontractor under this Forty-Fifth Supplemental Indenture fails to comply, the City may pursue any of the remedies set forth in this Section against the Trustee.
(c) The Trustee shall not take adverse action or otherwise discriminate against an employee or other person for the exercise or attempted exercise of rights under the MCO. Such actions, if taken within 90 days of the exercise or attempted exercise of such rights, will be rebuttably presumed to be retaliation prohibited by the MCO. (d) The Trustee shall maintain employee and payroll records as required by the MCO.

If the Trustee fails to do so, it shall be presumed that the Trustee paid no more than the minimum wage required under State law.
134832591.6 20
(e) The City is authorized to inspect the Trustee ’s job sites and conduct interviews with employees and conduct audits of the Trustee.
(f) The Trustee’s commitment to provide the Minimum Compensation is a material element of the City ’s consideration for this Forty -Fifth Supplemental Indenture. The City in its sole discretion shall determine whether such a breach has occurred. The City and the public will suffer actual damage that will be impractical or extremely difficult to determine if the Trustee fails to comply with these requirements. The Trustee agrees that the sums set forth in Section 12P.6.1 of the MCO as liquidated damages are not a penalty, but are reasonable estimates of the loss that the City and the public will incur for the Trustee ’s noncompliance. The procedures governing the assessment of liquidated damages shall be those set forth in Section 12P.6.2 of Chapter 12P.
(g) The Trustee understands and agrees that if it fails to comply with the requirements of the MCO, the City shall have the right to pursue any rights or remedies available under Chapter 12P (including liquidated damages), under the terms of this Forty -Fifth Supplemental Indenture, and under applicable law. If, within 30 days after receiving written notice of a breach of this Forty-Fifth Supplemental Indenture for violating the MCO, the Tr ustee fails to cure such breach or, if such breach cannot reasonably be cured within such period of 30 days, the Trustee fails to commence efforts to cure within such period, or thereafter fails diligently to pursue such cure to completion, the City shall have the right to pursue any rights or remedies available under applicable law, including those set forth in Section 12P.6(c) of Chapter 12P. Each of these remedies shall be exercisable individually or in combination with any other rights or remedies available to the City.
(h) The Trustee represents and warrants that it is not an entity that was set up, or is being used, for the purpose of evading the intent of the MCO. (i) The City may conduct random audits of the Trustee. Random audits shall be (i) noticed in advance in writing; (ii) limited to ascertaining whether Covered Employees are paid at least the minimum compensation required by the MCO; (iii) accomplished through an examination of pertinent records at a mutually agreed upon time and 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 Forty-Fifth Supplemental Indenture. Nothing in this Forty -Fifth Supplemental Indenture is intended to preclude the City from investigating any report of an alleged violation of the MCO.

SECTION 197.13 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 Section 12Q.5.1 of Chapter 12Q are incorporated by reference and made a part of this Forty-Fifth Supplemental Indenture as though fully set forth herein. The text of the HCAO is available on the web at www.sfgov.org/olse.

Capitalized terms used in this Section and not defined in this Forty-Fifth Supplemental Indenture shall have the meanings assigned to such terms in Chapter 12Q. 134832591.6 21
(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(e) 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 Forty-Fifth Supplemental Indenture. The City shall notify the Trustee if such a breach has occurred. If, within 30 days after receiving the City’ s written notice of a breach of this Forty - Fifth 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, the City shall have the right to pursue the remedies set forth in 12Q.5.1 and 12Q.(f)(1-6). Each of these remedies shall be exercisable individually or in combination with any other rights or remedies available to the City.
(d) Any Subcontract entered into by the Trustee shall require the Subcontractor to comply with the requirements of the HCAO and shall contain contractual obligations substantially the same as those set forth in this Section. 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 Chapter 12Q. 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 the 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 the City with regard to the Trustee ’s noncompliance or anticipated noncompliance with the requirements of the HCAO, for opposing any practice proscribed by the HCAO, for participating in proceedings related to the HCA O, 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 this Forty-Fifth Supplemental Indenture. (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.
134832591.6 22
(j) The Trustee shall provide the City with access to records pertaining to compliance with HCAO after receiving a written request from the City to do so and being provided at least ten business days to respond.
(k) The Trustee shall allow the 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 the City when it conducts such audits. (m) If the Trustee is exempt from the HCAO when this Forty -Fifth Supplemental Indenture is executed because its fees hereunder are in an amount that 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 the City to reach $75,000, all the agreements shall be thereafter subject to the HCAO. This obligation arises on the effective date of the agreement that causes the cumulative amount of fees from agreements between the Trustee and the City to be equal to or greater than $75,000 in the fiscal year.

SECTION 197.14 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 Forty - Fifth 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 and provisions of Chapter 12.G are incorporated herein by this reference.

In the event t he Trustee violates the provisions of this Section, the City may, in addition to any other rights or remedies available hereunder, (i) terminate this Forty -Fifth Supplemental Indenture, and (ii) prohibit the Trustee from bidding on or receiving any new Cit y 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 197.15 Preservative-treated Wood Containing Arsenic . The Trustee may not purchase preservative -treated wood products containing arsenic in the performance of this Forty-Fifth 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 Environment Code. The term “ preservative-treated wood containing arsenic” shall mean wood treated with a preservative that contains arsenic, elemental arsenic, or an arsenic copper combination, including, but not limited to, chromated copper arsenate preservative, ammoniacal copper zinc arsenate preservative, or ammoniacal copper arsenate preservative. The Trustee may purchase preservative- treated wood products on the list of environmentally preferable alternatives prepared and adopted by the Department of the Environment. This provision does not preclude the Trustee from purchasing preservative -treated wood containing arsenic for saltwater immersion. The term “ saltwater immersion” shall mean a pressure-treated wood that is used for construction purposes or facilitie s that are partially or totally immersed in saltwater.
134832591.6 23
SECTION 197.16 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 Forty-Fifth 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 197.17 Protection of Private Information. The Trustee has read and agrees to the terms set forth in San Francisco Administrative Code Section 12M.2, “Nondisclosure of Private Information, ” and 12M.3, “ Enforcement,” and in 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 Chapter 12M shall be a material breach of this Forty -Fifth Supplemental Indenture. In such an event, in addition to any other remedies available to it under equity or law, the City may terminate this Forty-Fifth 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 197.18 Food Service Waste Reduction Requirements. 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 t he remedies provided, and implementing guidelines and rules. The provisions of Chapter 16 are incorporated by reference and made a part of this Forty -Fifth Supplemental Indenture as though fully set forth herein. This provision is a material term of this Forty-Fifth Supplemental Indenture. By entering into this Forty -Fifth Supplemental Indenture, the Trustee agrees that if it breaches this provision, the 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 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 Forty -Fifth 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 197.19 Submitting False Claims; Monetary Penalties . Pursuant to San Francisco Administrative Code §21.35, any contractor, subcontractor or consultant who submits a false claim shall be liable to the City for the statutory penalties set forth in that Section. A contractor, subcontractor or consultant who submits a false claim shall also be liable to the City for the costs, including attorneys’ fees, of a civil action brought to recover any of those penalties or damages, and may be liable to the City for a civil penalty of up to $10,000 for each false claim. A contractor, subcontractor or consultant will be deemed to have subm itted a false claim to the City if the contractor, subcontractor or consultant: (a) knowingly presents or causes to be presented to an officer or employee of the City a false claim or request for payment or approval; (b) knowingly makes, uses, or causes to be made or used a false record or statement to get a false claim paid or approved by the City; (c) conspires to defraud the City by getting a false claim allowed or paid by the City; (d) knowingly makes, uses, or causes to be made or used a false record o r 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 134832591.6 24
City, subsequently discovers the falsity of the claim, and fails to disc lose the false claim to the City within a reasonable time after discovery of the false claim.

SECTION 197.20 Sugar-Sweetened Beverage Prohibition. The Trustee agrees that it will not sell, provide, or otherwise distribute Sugar -Sweetened Beverages, as defined by San Francisco Administrative Code Chapter 101, as part of its performance of this Forty -Fifth Supplemental Indenture.

SECTION 197.21 Agreement Made in California; Venue. The formation, interpretation and performance of this Agreement shall be governed by the laws of the Stat e of California.

Venue for all litigation relative to the formation, interpretation and performance of this Agreement shall be in San Francisco.

SECTION 197.22 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 Forty -Fifth Supplemental Indenture shall become the property of and will be transmitted to the City. However, the Trustee may retain and use copies for reference and as documentation of its experience and capabilities.

SECTION 197.23 Audit and Inspection of Records . The Trustee agrees to maintain and make available t o the City, during regular business hours, accurate books and accounting records relating to its work under this Forty -Fifth Supplemental Indenture. The Trustee will permit the 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 Forty -Fifth Supplemental Indenture, whether funded in whole or in part under this Forty -Fifth 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 Forty-Fifth Supplemental Indenture or until after final audit has been resolved, whic hever is later. The State of California or any federal agency having an interest in the subject matter of this Forty -Fifth Supplemental Indenture shall have the same rights conferred upon the City by this Section.

SECTION 197.24 Subcontracting. The Trustee is prohibited from subcontracting this Forty-Fifth Supplemental Indenture or any part of it unless such subcontracting is first approved by the City in writing. Neither party shall, on the basis of this Forty -Fifth Supplemental Indenture, contract on behalf of or in the name of the other party. An agreement made in violation of this provision shall confer no rights on any party and shall be null and void.

SECTION 197.25 Assignment. The services to be performed by Trustee are personal in character and neither this Forty -Fifth Supplemental Indenture nor any duties or obligations hereunder may be assigned or delegated by the Trustee unless first approved by the City by written instrument executed and approved in the same manner as this Forty-Fifth Supplemental Indenture.

SECTION 197.26 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, 134832591.6 25
covenants, or provisions hereof by the other party at the time designated, shall not be a waiver of any such default or right to which the party is entitled, nor shall it in any way affect the right of the party to enforce such provisions thereafter.

SECTION 197.27 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 this Article of this Forty-Fifth Supplemental Indenture and to the extent that any other right s are given to the City hereunder.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

134832591.6 S-1
IN WITNESS WHEREOF, the parties hereto have executed this Forty -Fifth Supplemental Indenture by their officers thereunto duly authorized as of the date and year first written above.

U.S. BANK TRUST COMPANY, NATIONAL

ASSOCIATION,
as Trustee
By: ______________________________________
Vice President

PUBLIC UTILITIES COMMISSION OF THE

CITY AND COUNTY OF SAN FRANCISCO
By: ______________________________________
General Manager
ATTEST:
____________________________________
Secretary of the Public Utilities
Commission of the City and County
of San Francisco
Approved as to form:

David Chiu, City Attorney
By: ________________________________
Mark D. Blake, Deputy City Attorney

134832591.6 AV-1

EXHIBIT AV

FORM OF 2023 SUB-SERIES C BOND
Unless this bond is presented by an authorized representative of The Depository Trust Company, a New York corporation ( “DTC”), to the Commission or its agent for registration of transfer, exchange, or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein. $______________ No. R-______
State of California
City and County of San Francisco

PUBLIC UTILITIES COMMISSION OF THE

CITY AND COUNTY OF SAN FRANCISCO

SAN FRANCISCO WATER REVENUE BOND
2023 SERIES CD
2023 SUB-SERIES C BOND (REFUNDING)
(WSIP) (GREEN BONDS)
Dated Date Interest Rate Maturity Date CUSIP No.
_________, 2023 November 1, 20__
Registered Owner: Cede & Co.

Principal Amount: _____________________ DOLLARS
The PUBLIC UTILITIES COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO, a commission duly organized and existing under and pursuant to the Charter of the City and County of San Francisco and the laws of the State of California (herein called the “Commission”), for value received, hereby promises to pay (but only out of the revenues hereinafter referred to) to the registered owner set forth above, or registered assigns, on the maturity date set forth above (subject to any right of prior redemption hereinafter provided for), the principal sum set forth above in lawful money of the United States of America, and to pay (but only out of the revenues hereinafter referred to) interest thereon in like lawful money from the interest payment date next preceding the date of authentication of this Bond (unless this Bond is authenticated as of a day during the period from the 16 th day of the calendar month next
preceding any interest payment date to and including such interest payment date, in which event it shall bear interest from such interest payment date, or unless this Bond is authenticated on or 134832591.6 AV-2
before September 15, 2023, in which event it shall bear interest from [CLOSING DATE] ; provided, however, that if, at the time of authentication of any Bond, interest is in default on Outstanding Bonds, such Bond shall bear interest from the interest payment date to which interest has previously been paid or made available for payment on the Outstanding Bonds and shall be payable to the Owners thereof of record as of a special date as shall be established by the Trustee (as defined below) following such default) until payment of such principal sum, at the interest rate per annum stated above, payable on November 1, 2023 and semiannually thereafter on May 1 and November 1 in each year.

The principal (or redemption price) hereof is payable to the registered owner hereof upon the surrender hereof at the corporate trust office of U.S. Bank Trust Company, National Association, in San Francisco, California, as trustee (herein, together with any successor as trustee under the Indenture, called the “ Trustee”), or such other office designated by the Trustee.

The interest hereon is payable to the person whose name appears on the bond registration books of the Trustee as the registered owner hereof as of the close of business on the 15 th day of the
calendar month immediately preceding an interest payment date, whether or not such day is a business day, such interest to be paid, except as otherwise provided in the Indenture, by check mailed to such registered owner at such address as appears on such registration books. Interest on this Bond shall be calculated on the basis of a 360- day year comprised of twelve 30 -day months.

This Bond is one of a duly authorized issue of revenue bonds of the Commission designated as the “San Francisco Water Revenue Bonds ” (herein called the “Bonds” ), of the series and designation indicated on the face hereof (herein called the “ 2023 Sub- Series C Bonds”) and is a Current Interest Bond (as such term is defined in the Indenture hereinafter referred to). The Bonds are not limited in aggregate principal amount and consist or may consist of one or more series of varying denominations, dates, maturities, interest rates and other provisions, as in said Indenture provided, all issued and to be issued under and pursuant to the provisions of the Charter of the City and County of San Francisco and all laws of the State of California supplemental thereto, including the Revenue Bond Law of 1941 to the extent made applicable by said Charter (herein collectively called the “ Law”), and pursuant to an Amended and Restated Indenture, dated as of August 1, 2002, between the Trustee and the Commission, as further amended and supplemented, including as amended and supplemented by that certain Forty-Fifth Supplemental Indenture, dated as of _______ 1, 2023, between the Trustee and the Commission, authorizing the issuance of the 2023 Sub- Series C B onds (collectively, the “Indenture”).

Reference is hereby made to the Indenture (a copy of which is on file at the office of the Trustee) and to the Law for a description of the terms on which the Bonds are issued, the provisions with regard to the nature and extent of the Revenues (as such term is defined in the Indenture) and the rights thereunder (and limitations thereon) of the registered owners of the Bonds and the rights, duties and immunities of the Trustee and the rights and obligations of the Commission thereunder; and all the terms of the Indenture and the Law are hereby incorporated herein and constitute a contract between the Commission and the registered owner of this Bond, and to all the provisions thereof the owner of this Bond, by his acceptance hereof, consents and agrees. Each owner hereof shall have recourse to all of the provisions of the Law and the Indenture and shall be bound by all of the terms and conditions thereof. 134832591.6 AV-3
The Bonds are issued to refinance and finance the reconstruction, r eplacement, expansion and repair of or improvements to the water facilities of the Enterprise, as more particularly described in the Indenture. The Bonds are special obligations of the Commission and are payable, as to the principal thereof, interest thereon and any premiums upon the redemption of any thereof, from the revenues of the Enterprise (which, as more particularly defined in the Indenture, are therein and herein called the “ Revenues”). All of the Bonds are equally secured by a pledge of, and charge and lien upon, all of the Revenues, and the Revenues constitute a trust fund for the security and payment of the interest on and principal of the Bonds; 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 the Bonds as provided in the Indenture. Additional Series of Bonds payable from the Revenues may be issued on a parity with the Bonds of this Series, but only subject to the conditions and limitations contained in the Indenture.

The principal of and interest on this Bond are payable solely from the Revenues, and the Commission is not obligated to pay them except from the Revenues. The Commission has no taxing power. The general fund of the City and County of San Francisco is not liable, and the credit or taxing power of the City and County of San Francisco is not pledged, for the payment of the Bonds or their interest. The Bonds are not secured by a legal or equitable pledge of, or charge, lien or encumbrance upon, any of the property of the Commission or any of its income or receipts, except the Revenues. The owner hereof has no right to compel the exercise of any taxing power of the City and County of San Francisco.

The rights and obligations of the Commission and the owners of the Bonds may be modified or amended at any time in the manner, to the extent and upon the terms provided in the Indenture.

The 2023 Sub-Series C Bonds maturing on or after November 1, 20__, shall be subject to redemption prior to their stated maturity, at the option of the Commission, from any source of available funds, as a whole or in part, on any date on or after November 1, 20__, from such maturities or portions of maturities as are determined by the Commission and by lot within any one maturity, at a redemption price equal to 100% of the principal amount of the 2023 Sub- Series C Bonds to be redeemed, plus accrued interest thereon to the date fixed for redemption, without premium.

The 2023 Sub-Series C Term Bonds maturing November 1, 20__, are further subject to redemption prior to their stated maturity and payable from the 2023 Sub- Series C Sinking Fund Account (described in the Indenture), on November 1, 20__, by lot within any such maturity if less than all of the 2023 Sub-Series C Bonds of such maturity are redeemed, upon payment of the principal amount thereof and accrued interest thereon to the date fixed for redemption without premium. Such sinking fund redemption of the 2023 Sub- Series C Term Bo nds maturing November 1, 20__ shall only be made in amounts equal to, and in accordance with, the schedule of principal amounts of 2023 Sub- Series C Bonds to be redeemed in each such year set forth below (subject to adjustment as directed by the Commission in the event of optional redemption of any portion of such 2023 Sub- Series C Term Bonds prior to maturity pursuant to the Indenture):
134832591.6 AV-4
Redemption Date
(November 1) Principal Amount
$

†
______________
† Maturity
The 2023 Sub-Series C Term Bonds maturing November 1, 20__, are further subject to redemption prior to their stated maturity and payable from the 2023 Sub- Series C Sinking Fund Account (described in the Indenture), on November 1, 20__, by lot within any such m aturity if less than all of the 2023 Sub-Series C Bonds of such maturity are redeemed, upon payment of the principal amount thereof and accrued interest thereon to the date fixed for redemption without premium. Such sinking fund redemption of the 2023 Sub- Series C Term Bonds maturing November 1, 20__ shall only be made in amounts equal to, and in accordance with, the schedule of principal amounts of 2023 Sub- Series C Bonds to be redeemed in each such year set forth below (subject to adjustment as directed by the Commission in the event of optional redemption of any portion of such 2023 Sub- Series C Term Bonds prior to maturity pursuant to the Indenture):

Redemption Date
(November 1) Principal Amount
$

†
______________
† Maturity
134832591.6 AV-5
The 2023 Sub-Series C Bonds are issuable as fully registered Bonds without coupons in the denomination of $5,000 or any integral multiple thereof provided that no Bond shall have principal maturing on more than one principal payment date. Subject to the limitations and conditions and upon payment of the charges, if any, as provided in the Indenture, 2023 Sub- Series C Bonds may be exchanged for a like aggregate principal amount of 2023 Sub- Series C Bonds of the same series, tenor and maturity of other authorized denominations.

This Bond is transferable by the registered owner hereof, in person or by his attorney duly authorized in writing, at said office of the Trustee, but only in the manner, subject to the limitations and upon payment of the charges provided in the Indenture, and upon surrender and cancellation of this Bond. Upon such transfer a new fully registered Bond or Bonds, of authorized denomination or denominations and of the same series and tenor, for the same aggregate principal amount will be issued to the transferee in exchange herefor.

The Commission and the Trustee may treat the registered owner hereof as the absolute owner hereof for all purposes, and the Commission and the Trustee shall not be affected by any notice to the contrary.

It is hereby certified that all of the conditions, things and acts required to exist, to have happened or to have been performed precedent to and in the issuance of this Bond do exist, have happened or have been performed in due and regular time, form and manner as required by the Law and the laws of the State of California, and that the amount of this Bond, together with all other obligations of the Commission, does not exceed any limit prescribed by the Law or any laws of the State of California, and is not in excess of the amount of Bonds permitted to be issued under the Indenture.

This 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.

By acceptance of this Bond, the holder hereof consents to the amendments described in Article CLXXXVII of the Forty-Third Supplemental Indenture. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
134832591.6 AV-6
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 manua l or facsimile signature of its Secretary, all as of [CLOSING DATE].

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
134832591.6 AV-7
[FORM OF TRUSTEE’S CERTIFICATE OF AUTHENTICATION
AND REGISTRATION TO APPEAR ON THE 2023 SUB-SERIES C BOND] This Bond is one of the Bonds described in the within- mentioned Indenture, which has been authenticated and registered on the date set forth below.

U.S. BANK TRUST COMPANY, NATIONAL

ASSOCIATION,
as Trustee
Dated: [CLOSING DATE]
By: ______________________________________
Authorized Officer
134832591.6 AV-8
[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:
_______________________________________
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.

Norton Rose Fulbright US LLP draft 5/1/23

134834076.4

FORTY-SIXTH SUPPLEMENTAL INDENTURE
by and between
U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, as Trustee and

PUBLIC UTILITIES COMMISSION OF THE

CITY AND COUNTY OF SAN FRANCISCO
Dated as of _______ 1, 2023

AUTHORIZING THE ISSUANCE OF
$[PAR AMOUNT] AGGREGATE PRINCIPAL AMOUNT OF

PUBLIC UTILITIES COMMISSION OF THE

CITY AND COUNTY OF SAN FRANCISCO

SAN FRANCISCO WATER REVENUE BONDS
2023 SERIES CD
2023 SUB-SERIES D (REFUNDING)
(LOCAL WATER)
(Supplemental to the Amended and Restated Indenture,
dated as of August 1, 2002, as amended and supplemented)

134834076.4 i

TABLE OF CONTENTS
Page

DEFINITIONS
SECTION 198.01 Definitions ........................................................................................................2

PROVISIONS RELATING TO 2023 SUB-SERIES D BONDS
SECTION 199.01 Authorization and Terms of 2023 Sub-Series D Bonds ...................................3 SECTION 199.02 Terms of Redemption .......................................................................................5 SECTION 199.03 Form of 2023 Sub-Series D Bonds ...................................................................6 SECTION 199.04 Use of Depository .............................................................................................6 SECTION 199.05 Issuance of 2023 Sub-Series D Bonds ..............................................................7 SECTION 199.06 Application of Proceeds of 2023 Sub-Series D Bonds .....................................8 SECTION 199.07 2023 Sub-Series D Sinking Fund Account .......................................................9 SECTION 199.08 Establishment and Application of the 2023 Sub-Series D Rebate Fund ........12 SECTION 199.09 Tax Covenants ................................................................................................13 SECTION 199.10 Continuing Disclosure ....................................................................................14

MISCELLANEOUS
SECTION 200.01 Terms of 2023 Sub-Series D Bonds Subject to the Indenture ........................14 SECTION 200.02 Effective Date of Forty-Sixth Supplemental Indenture ..................................14 SECTION 200.03 Holder Consents to Amendments in Forty-Third Supplemental Indenture ....................................................................................................14 SECTION 200.04 Execution in Counterparts; No Seal Required for Execution .........................15

ADDITIONAL CITY REQUIREMENTS
SECTION 201.01 Conflict of Interest ..........................................................................................15 SECTION 201.02 Proprietary or Confidential Information of the City .......................................15 SECTION 201.03 Local Business Enterprise Utilization; Liquidated Damages .........................15 SECTION 201.04 Nondiscrimination; Penalties ..........................................................................16 SECTION 201.05 MacBride Principles—Northern Ireland ..........................................................17 SECTION 201.06 Tropical Hardwood and Virgin Redwood Ban ................................................18 SECTION 201.07 Drug-Free Workplace Policy ..........................................................................18 SECTION 201.08 Resource Conservation.....................................................................................18 SECTION 201.09 Compliance with Americans with Disabilities Act ........................................18 SECTION 201.10 Sunshine Ordinance ........................................................................................18 SECTION 201.11 Limitations on Contributions ..........................................................................18 134834076.4 ii
SECTION 201.12 Requiring Minimum Compensation for Covered Employees ........................19 SECTION 201.13 Requiring Health Benefits for Covered Employees .......................................20 SECTION 201.14 Prohibition on Political Activity with City Funds ..........................................22 SECTION 201.15 Preservative-treated Wood Containing Arsenic .............................................22 SECTION 201.16 Compliance with Laws ...................................................................................23 SECTION 201.17 Protection of Private Information ...................................................................23 SECTION 201.18 Food Service Waste Reduction Requirements ...............................................23 SECTION 201.19 Submitting False Claims; Monetary Penalties ................................................23 SECTION 201.20 Sugar-Sweetened Beverage Prohibition .........................................................24 SECTION 201.21 Agreement Made in California; Venue ............................................................24 SECTION 201.22 Ownership of Results ......................................................................................24 SECTION 201.23 Audit and Inspection of Records ....................................................................24 SECTION 201.24 Subcontracting ................................................................................................24 SECTION 201.25 Assignment .....................................................................................................24 SECTION 201.26 Non-Waiver of Rights .....................................................................................24 SECTION 201.27 City a Third Party Beneficiary ........................................................................25 Exhibit AW – Form of 2023 Sub-Series D Bond

134834076.4

FORTY-SIXTH SUPPLEMENTAL INDENTURE
(Supplemental to the Amended and Restated Indenture,
dated as of August 1, 2002, as amended and supplemented) Authorizing the Issuance of
$[PAR AMOUNT] Aggregate Principal Amount of
Public Utilities Commission of the
City and County of San Francisco
San Francisco Water Revenue Bonds
2023 Series CD
2023 Sub-Series D (Refunding)
(Local Water)
This Forty-Sixth Supplemental Indenture, dated as of _______ 1, 2023 (this “Forty-Sixth Supplemental Indenture” ), by and between 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 successor trustee (the “ Trustee”), and the

WHEREAS, this Forty -Sixth Supplemental Indenture is supplemental to the Amended and Restated Indenture, dated as of August 1, 2002, between the Commission and the Trustee, as amended and supplemented (the “Indenture”);
WHEREAS, as of _________, 2023, there are outstanding $_______ aggregate principal amount of Bonds issued pursuant to this Indenture;
WHEREAS, the 2010 Series ABC Bonds, the 2010 Series DE Bonds, the 2010 Series FG Bonds, the 2015 Refunding Series A Bonds, the 2016 Refunding Series AB Bonds, the 2016 Series C Bonds, the 2017 Series ABC Bonds, the 2017 Refunding Series DE Bonds, the 2019 Refunding Series ABC Bonds, the 2020 Series ABCD Bonds , the 2020 Refunding Series EFGH Bonds and the 2023 Series ABC Bonds are the only water revenue bonds of the Commission currently outstanding and secured by Revenues; WHEREAS, the Indenture provides that the Commission may, subject to the requirements of the Law and the Indenture, issue one or more other Series of Bonds, as well as refunding Bonds, from time to time pursuant to a supplemental indenture; WHEREAS, the Commission has determined to issue pursuant to this Forty -Sixth Supplemental Indenture a sub-series of Bonds designated “San Francisco Water Revenue Bonds, 2023 Series CD, 2023 Sub- Series D (Refunding) (Local Water )” (the “2023 Sub- Series D Bonds”) in the aggregate original principal amount of $[PAR AMOUNT] to purchase and cancel or defease and refund all or a portion of the outstanding _________ Bonds; 134834076.4 2
WHEREAS, simultaneous with the issuance of the 2023 Sub- Series D Bonds, the Commission has determined to issue pursuant to a Forty- Sixth Supplemental Indenture a sub- series of Bonds designated “ San Francisco Water Revenue Bonds, 2023 Series CD, 2023 Sub- Series C (Refunding) (WSIP) (Green Bonds )” (the “2023 Sub- Series C Bonds,” and together with the 2023 Sub- Series D Bonds, the “ 2023 Series CD Bonds” ) in the aggregate principal amount of $_______ to purchase and cancel or defease and refund all or a portion of the outstanding _________ Bonds;
WHEREAS, the 2023 Series CD Bonds (and each sub- series thereof) will be issued by the Commission under the Indenture payable on a parity with the other Outstanding Series of Bonds and any Parity State Loans;
WHEREAS, the conditions and limitations contained in the Law and the Indenture will be satisfied at the time of issuance of the 2023 Series CD Bonds; WHEREAS, in order to provide for the issuance of the 2023 Sub- Series D Bonds, to establish and declare the terms and conditions upon which the 2023 Sub- Series D Bonds are to be issued and to secure the payment of the principal thereof, and premium, if any, and interest thereon, the Commission has authorized the execution and delivery of this Forty-Sixth Supplemental Indenture; and
WHEREAS, all acts, conditions and things required by law to exist, to have happened and to have been performed precedent to and in connection with the execution and the entering into of this Forty -Sixth 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 Forty-Sixth Supplemental Indenture; NOW, THEREFORE, the parties hereto agree, as follows:

DEFINITIONS
SECTION 198.01 Definitions. The terms defined in this section shall, for all purposes of this Forty -Sixth Supplemental Indenture, have the meani ngs herein specified, to be equally applicable to both the singular and plural forms of any of the terms herein defined.

Terms defined in the Indenture not otherwise defined herein (including the preamble hereto) shall have the meanings specified therein.

Escrow Agent
The term “Escrow Agent” means U.S. Bank Trust Company, National Association. 134834076.4 3
Escrow Agreement
The term “ Escrow Agreement ” means that certain Escrow Agreement, dated as of _______ 1, 2023, by and between the Commission and the Escrow Agent.

PROVISIONS RELATING TO 2023 SUB-SERIES D BONDS
SECTION 199.01 Authorization and Terms of 2023 Sub-Series D Bonds. Additional Bonds of the Commission in the aggregate principal amount of $[PAR AMOUNT] are hereby authorized to be issued under the Charter and the Law and pursuant to the Indenture. (a) Such Bonds are designated as the “San Francisco Water Revenue Bonds, 2023 Series CD, 2023 Sub- Series D (Refunding) ( Local Water )” (the “2023 Sub- Series D Bonds” ).

The aggregate principal amount of 2023 Sub- Series D Bonds that may be issued (except as may be otherwise provided in Section 2.08 of the Indenture) and Outstanding under t his Forty-Sixth Supplemental Indenture shall be $[PAR AMOUNT]. The 2023 Sub- Series D Bonds shall be of the tenor known as Current Interest Bonds.

The 2023 Sub-Series D Bonds shall be issued as fully registered Bonds without coupons in denominations of $5,000 or any integral multiple thereof. The 2023 Sub- Series D Bonds shall be dated as of the date of delivery thereof, and shall accrue interest from such date.

The 2023 Sub-Series D Bonds shall be initially registered in the name of “Cede & Co.,” as nominee of DTC, and shall be evidenced by one 2023 Sub- Series D Bond maturing on each maturity date in a denomination corresponding to the total principal designated to mature on such date. Registered ownership of the 2023 Sub- Series D Bonds, or any portion thereof, may not thereafter be transferred except as set forth in Section 199.04 herein. (b) The 2023 Sub-Series D Bonds shall mature on November 1 on the following dates and in the following amounts and shall bear interest at the following rates per annum payable on November 1, 2023, and semiannually thereafter on May 1 and November 1 in each year, calculated on the basis of a 360-day year consisting of twelve 30-day months:
134834076.4 4
Maturity Date
(November 1) Principal Amount Interest Rate
$ %

*
*
__________________
* Term bond.

The 2023 Sub-Series D Bonds maturing on November 1, 20___ and November 1, 20___ are hereby designated as Term Bonds.
(c) Subject to Section 199.04 hereof, the principal of and premium, if any, on the 2023 Sub-Series D Bonds shall be payable by check or wire transfer (as described in the next paragraph) in lawful money of the United States of America to the Owner thereof, upon the surrender thereof at the corporate trust office of U.S. Bank Trust Company, National Association, in San Francisco, California, as the Trustee, or such other office designated by the Trustee.

The interest on the 2023 Sub-Series D Bonds shall be payable in like lawful money to the person whose name appears on the bond registration books of the Trustee as the Owner thereof as of the close of business on the 15
th day of the calendar month immediately preceding an
interest payment date, whether or not such day is a Business Day, such interest to be paid by check mailed to such Owner at such address as appears on such registration books or at such address as such Owner may have filed with the Trustee for that purpose, or at the request of an Owner of at least $1,000,000 in aggregate principal amount of 2023 Sub- Series D Bonds filed with the Trustee by such 15
th day, by wire transfer to such account designated in such request at a financial institution in the United States.
(d) Each 2023 Sub-Series D Bond shall bear interest from the i nterest payment date next preceding the date of authentication thereof unless it is authenticated as of a day during the period from the 16
th day of the calendar month next preceding any interest payment date to the interest payment date, inclusive, in whi ch event it shall bear interest from such interest payment date, or unless it is authenticated on or before September 15, 2023, in which event it shall bear interest from [CLOSING DATE]; provided, however, that if, at the time of authentication of any Bond, interest is in default on Outstanding Bonds, such Bond shall bear interest from the interest payment date to which interest has previously been paid or made available for payment on the Outstanding Bonds and shall be payable to the Owners thereof of record as of a special date as shall be established by the Trustee following such default. (e) The 2023 Sub- Series D Bonds shall be subject to redemption as provided in Section 199.02.
134834076.4 5
(f) The Trustee shall assign each 2023 Sub- Series D Bond authenticated and registered by it a distinctive letter or number, or letter and number, and shall maintain a record thereof which shall be available to the Commission for inspection. (g) There shall be no Required Reserve for the 2023 Sub-Series D Bonds. (h) The Commission has reviewed all proceedings heretofore taken relative to the authorization of the 2023 Sub- Series D Bonds and has found, as a result of such review, that all conditions, things and acts required by law to exist, happen or be performed precedent to and in the issuance of the 2023 Sub- Series D Bonds do exist, have happened and have been performed in due time, form and manner as required by law, and the Commission is authorized, pursuant to each and every requirement of law, to issue the 2023 S ub-Series D Bonds in the manner and form provided in this Forty-Sixth Supplemental Indenture.

SECTION 199.02 Terms of Redemption.
(a) Optional Redemption. The 2023 Sub- Series D Bonds maturing on or after November 1, 20__, shall be subject to redemption prior to their stated maturity, at the option of the Commission, from any source of available funds, as a whole or in part, on any date on or after November 1, 20__, from such maturities or portions of maturities as are determined by the Commission and by lot within any one maturity, at a redemption price equal to 100% of the principal amount of the 2023 Sub- Series D Bonds to be redeemed, plus accrued interest thereon to the date fixed for redemption, without premium.
(b) Mandatory Sinking Fund Redemption.
(i) The 2023 Sub-Series D Bonds maturing on November 1, 20__, are further subject to redemption prior to their stated maturity, and payable from the 2023 Sub-Series D Bonds Sinking Fund Account (described in Section 199.07), on each November 1 on and after November 1, 20__, by lot within any such maturity if less than all of the 2023 Sub-Series D Bonds of such maturity are then being redeemed, upon payment of the principal amount thereof and accrued interest thereon to the date fixed for redemption, without premium. Such sinking fund redemption of the 2023 Sub- Series D Bonds maturing November 1, 20__ shall only be made in amounts equal to, and in accordance with, the schedule of principal amounts of 2023 Sub- Series D Bonds to be redeemed in each such year set forth in Section 199.07 below (such schedule of principal amounts subject to adjustment as directed by the Commission in the event of optional redemption of any portion of such 2023 Sub- Series D Bonds prior to maturity pursuant to Section 199.02(a) above).
(ii) The 2023 Sub-Series D Bonds maturing on November 1, 20__, are further subject to redemption prior to their stated maturity, and payable from the 2023 Sub-Series D Bonds Sinking Fund Account (described in Section 199.07), on each November 1 on and after November 1, 20__, by lot within any such maturity if less than all of the 2023 Sub-Series D Bonds of such maturity are then being redeemed, upon payment of the principal amount thereof and accrued interest thereon to the date fixed for redemption, without premium. Such sinking fund redemption of the 2023 Sub- Series D Bonds 134834076.4 6
maturing November 1, 20__ shall only be made in amounts equal to, and in accordance with, the schedule of principal amounts of 2023 Sub- Series D Bonds to be redeemed in each such year set forth in Section 199.07 below (such schedule of principal amounts subject to adjustment as directed by the Commission in the event of optional redemption of any portion of such 2023 Sub- Series Term D Bonds prior to maturity pursuant to Section 199.02(a) above).
(c) Other Terms of Redemption. Except as otherwise provided herein, 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 shall apply to the redemption of the 2023 Sub-Series D Bonds.

SECTION 199.03 Form of 2023 Sub-Series D Bonds. The 2023 Sub-Series D Bonds 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 AW to this Forty -Sixth Supplemental Indenture , with n ecessary or appropriate variations, omissions and insertions as permitted or required by this Forty-Sixth Supplemental Indenture.

Pursuant to Section 3.06 and 9.01(b) of the Indenture, execution of the 2023 Sub- Series D Bonds does not require the seal of the Commission.

SECTION 199.04 Use of Depository.
(a) The 2023 Sub- Series D Bonds shall be initially registered as provided in Section 199.01 hereof. Registered ownership of the 2023 Sub- Series D Bonds, or any portions thereof, may not thereafter be transferred except:
(i) to any successor of DTC or its nominee, or of any substitute depository designated pursuant to clause (ii) of this subsection (a) (a “ Substitute Depository” ); provided that any successor of DTC or Substitute Depository shall be qualified under any applicable laws to provide the service proposed to be provided by it; (ii) to any Substitute Depository not objected to by the Trustee, upon (1) the resignation of DTC or its successor (or any Substitute Depository or its successor) from its functions as depository, or (2) a determination by the Commission that DTC (or its successor) is no longer able to carry out its functions as depository; provided that any such Substitute Depository shall be qualified under any applicable laws to provide the services proposed to be provided by it; or
(iii) to any person as provided below, upon (1) the resignation of DTC or its successor (or any Substitute Depository or its successor) from its functions as depository, or (2) a determination by the Commission to remove DTC or its successor (or S ubstitute Depository or its successor) from its functions as depository. (b) In the case of any transfer pursuant to clause (i) or clause (ii) of subsection (a) of this Section, upon receipt of all Outstanding 2023 Sub- Series D Bonds by the Trustee, together with a Written Request of the Commission to the Trustee designating the Substitute Depository, a single new 2023 Sub- Series D Bond, which the Commission shall prepare or cause to be prepared, shall be executed and delivered for each maturity of 2023 Sub -Series D Bonds then 134834076.4 7
Outstanding, registered in the name of such successor or such Substitute Depository, or their nominees, as the case may be, all as specified in such Written Request of the Commission. (c) In the case of any transfer pursuant to clause (iii) of subsection (a) of this Section, upon receipt of all Outstanding 2023 Sub-Series D Bonds by the Trustee, together with a Written Request of the Commission to the Trustee, new 2023 Sub- Series D Bonds, which the Commission sh all prepare or cause to be prepared in definitive form, shall be executed and delivered in such denominations and registered in the names of such persons as are requested in such Written Request of the Commission, subject to the limitations of Section 199.01 hereof, provided that the Trustee shall not be required to deliver such new 2023 Sub- Series D Bonds within a period less than 60 days after the date of receipt of such Written Request from the Commission.
(d) In the case of a partial redemption or an advance refunding of any 2023 Sub- Series D Bonds evidencing a portion of the principal maturing in a particular year, DTC or its successor (or any Substitute Depository or its successor) shall make an appropriate notation on such 2023 Sub-Series D Bonds indicating the date and amounts of such reduction in principal, in form acceptable to the Trustee. The Trustee shall not be liable for such Securities Depository’ s (or any Substitute Depository’ s) failure to make such notations or errors in making such notations.
(e) The Commission and the Trustee shall be entitled to treat the person in whose name any 2023 Sub- Series D Bond is registered as the Owner thereof for all purposes of the Indenture and any applicable laws, notwithstanding any notice to the contrary received by the Trustee or the Commission; and the Commission and the Trustee shall not have responsibility for transmitting payments to, communicating with, notifying, or otherwise dealing with any beneficial owners of the 2023 Sub- Series D Bonds. Neither the Commission nor the Trustee shall have any responsibility or obligation, legal or otherwise, to any such beneficial owners or to any other party, including DTC or its successor (or Substitute Depository or its successor), except to the Owner of any 2023 Sub-S eries D Bonds, and the Trustee may rely conclusively on its records as to the identity of the Owners of the 2023 Sub-Series D Bonds. (f) Notwithstanding any other provision of this Forty-Sixth Supplemental Indenture and so long as all Outstanding 2023 Sub- Series D Bonds are registered in the name of Cede & Co. or its registered assigns, the Commission and the Trustee shall cooperate with Cede & Co., as sole registered Bondowner, and its registered assigns, in effecting payment of the principal of and redemption premium, if any, and interest on the 2023 Sub- Series D Bonds by arranging for payment in such manner that funds for such payments are properly identified and are made available on the date they are due all in accordance with the letter of representations delivered by the Commission and the Trustee to DTC with respect to the 2023 Sub- Series D Bonds, the provisions of which the Trustee may rely upon to implement the foregoing procedures notwithstanding any inconsistent provisions herein.

SECTION 199.05 Issuance of 2023 Sub-Series D Bonds.
(a) At any time after the execution of this Forty -Sixth Supplemental Indenture, the Commission may execute and the Trustee may authenticate and, upon a Written Request or 134834076.4 8
Certificate of the Commission, deliver 2023 Sub- Series D Bonds in the aggregate principal amount of $[PAR AMOUNT] to the initial purchasers thereof specified in such Written Request or Certificate.

SECTION 199.06 Application of Proceeds of 2023 Sub-Series D Bonds. (a) The original purchaser of the 2023 Sub- Series D Bonds will pay and deliver the purchase price of the 2023 Sub- Series D Bonds (including any good faith deposit paid prior to the Closing Date and applied to such purchase price) equal to $[_________] to the Trustee, and the Trustee shall deposit and transfer this amount, [together with $[_________] from the [_________] Fund,] as follows:

1. The Trustee shall deposit $[_________] in a separate fund to be known as the 2023 Series CD Costs of Issuance Fund established and maintained under the Forty- Sixth Supplemental Indenture.

2. The Trustee shall deposit $[_________] in the “2023 Sub- Series D E Purchased Bonds Fund” established and maintained under the Forty- Sixth Supplemental Indenture.

3. The Trustee shall transfer the r emainder of such sum, in the amount of $[_________], to the Escrow Agent to be applied pursuant to the terms of the Escrow Agreement.
(b) Before any payment is made by the Trustee to pay costs of issuance from the 2023 Series CD Costs of Issuance Fund, the Com mission shall cause to be filed with the Trustee a Written Requisition of the Commission showing with respect to each payment to be made:

1. the item number of the payment;

2. the name and address of the person to whom payment is due;

3. the amount to be paid; and

4. the purpose for which the obligation to be paid was incurred.

Each such Written Requisition shall state, and shall be sufficient evidence to the Trustee:
(y) that obligations in the stated amounts have been incurred by the Commission and that each item thereof is a proper charge; and (z) that there has not been filed with or served upon the Commission notice of any lien, right to lien or attachment upon, or claim affecting the right to receive payment of, any of the moneys payable to any of the persons named in such Written Requisition, which has not been released or will not be released simultaneously with the payment of such obligation.
134834076.4 9
Upon receipt of each such Written Requisition, the Trustee will pay the amounts set forth in such Written Requisition as directed by the terms hereof. The Trustee need not make any such payment if it has received notice of any lien, right to lien or attachment upon, or claim affecting the right to receive payment of, any of the moneys to be so paid, which has not been released or will not be released simultaneously with such payment.

When all costs of issuance of the 2023 Series CD Bonds have been paid, the Commission shall deliver a Certificate of the Commission stating such fact to the Trustee (as described in clause (c) below).
(c) The money in the 2023 Series CD Costs of Issuance Fund (including such amounts deposited therein pursuant to the Forty -Fifth Supplemental Indenture) shall be used and disbursed in the manner provided herein and therein for the purpose of paying all costs of issuance incidental to or connected with the issuance of the 2023 Series CD Bonds (or for making reimbursements to the Commission or any other person, firm or corporation for such costs theretofore paid by such person or it).

Any balance of money remaining in the 2023 Series CD Costs of Issuance Fund after the payment of all costs incidental to or connected with the issuance of the 2023 Series CD Bonds (as certified to the Trustee by the Commission pursuant to the final paragraph of clause (b) above) or on [_________], 2023, whichever is earlier, shall be transferred by the Trustee to the Commission and the 2023 Series CD Costs of Issuance Fund shall be closed. (d) On the delivery date of the 2023 Sub- Series D Bonds, the monies set aside and placed wit hin the 2023 Sub- Series DE Purchased Bonds Fund pursuant to this Forty- Sixth Supplemental Indenture and the Forty -Fifth Supplemental Indenture shall be applied, together with other amounts, solely to payment of the purchase price of and accrued interest on the Purchased Bonds. The Trustee shall wire the purchase price of and accrued interest on the Purchased Bonds to DTC for credit to the Purchased Bonds, all as set forth in in a Written Request of the Commission delivered concurrently with delivery of the 2023 Sub- Series DE Bonds, through the Automated Tender Option Program (“ATOP”). The Commission directs the Trustee to cancel such P urchased Bonds. At such time as the Purchased Bonds have been purchased and cancelled, or at such time as no funds remain in the 2023 Sub- Series DE Purchased Bonds Fund, the Trustee may close and terminate the 2023 Sub -Series DE Purchased Bonds Fund.

SECTION 199.07 2023 Sub-Series D Sinking Fund Account.
(a) The Trustee shall establish and hold within the Principal Fund established under Section 5.02(b) of the Indenture, a 2023 Sub- Series D Sinking Fund Account, which the Commission hereby covenants and agrees to cause to be maintained, for payment of the Bond Obligation of the 2023 Sub-Series D Term Bonds.
(b) The Trustee, on or before October 31 of each year (commencing on or before October 31, 20__), shall deposit in the 2023 Sub- Series D Sinking Fund Account from the Principal Fund moneys in an amount sufficient to call and redeem in accordance with Section 199.02(b) hereof or to pay at final maturity, as the case may be, on the next succeeding 134834076.4 10
November 1, the principal of the 2023 Sub-Series D Term Bonds maturing on November 1, 20__ in the following respective principal amounts in each of the following years (each such deposit of moneys being referred to as a “ 2023 Sub -Series D Minimum Sinking Fund Account Payment”):

Redemption Date
(November 1) Principal Amount
$

†
______________
† Maturity
The Trustee, on or before October 31 of each year (commencing on or before October 31, 20__), shall deposit in the 2023 Sub- Series D Sinking Fund Account from the Principal Fund moneys in an amount sufficient to call and redeem in accordance with Section 199.02(b) hereof or to pay at final maturity, as the case may be, on the next succeeding November 1, the principal of the 2023 Sub- Series D Term Bonds maturing on November 1, 20__ in the following respective principal amounts in each of the following years (each such deposit of moneys being referred to as a “2023 Sub-Series D Minimum Sinking Fund Account Payment”):

Redemption Date
(November 1) Principal Amount
$

†
______________
† Maturity
134834076.4 11
(c) During the 12- month period ending on September 15 of each year immediately preceding each redemption from the 2023 Sub- Series D Sinking Fund Account, the Commission may satisfy, in whole or in part, the 2023 Sub- Series D Minimum Sinking Fund Account Payment and the redemption of 2023 Sub-Series D Term Bonds therefrom by depositing with the Trustee 2023 Sub-Series D Term Bonds for cancellation prior to the Trustee ’s selection of the 2023 Sub-Series D Term Bonds for redemption.
(d) In lieu of the redemption of 2023 Sub- Series D Term Bonds pursuant to Section 199.02(b) hereof, at the Written Request of the Commission, moneys in the 2023 Sub- Series D Sinking Fund Account may be used and withdrawn by the Trustee at any time for the purchase of 2023 Sub- Series D Term Bonds at public or private sale, as and when and at such prices (including brokerage and other charges, but excluding accrued interest, which is payable from the Interest Fund) as the Commission shall direct by Written Request, but not to exceed the principal thereof, and all 2023 Sub- Series D Term Bonds so purchased by the Trustee or deposited by the Commission, shall be cancelled and delivered to the Commission; provided, however, that:
(i) all moneys in the 2023 Sub- Series D Sinking Fund Ac count on each September 15, beginning on September 15, 20__ and ending on September 15, 20__, together with any additional sums the Trustee expects to receive for deposit in the 2023 Sub-Series D Sinking Fund Account after such date and on or before the next succeeding November 1, shall be used and withdrawn by the Trustee solely for the purpose of redeeming the 2023 Sub -Series D Term Bonds that are subject to redemption on such next succeeding November 1 pursuant to Section 199.02(b) and Section 199.07(b) hereof; and
(ii) the Trustee shall during each 12 month period beginning with the 12- month period ending on November 1, 20__ purchase or call and redeem (as herein provided) an aggregate amount of 2023 Sub- Series D Term Bonds equal to at least the amount of Bond Obligation of the 2023 Sub -Series D Term Bonds identified in Section 199.07(b) above for such 12 -month period reduced by the principal amount of 2023 Sub- Series D Term Bonds deposited by the Commission with the Trustee as described in Section 199.07(c) hereof for such 12-month period, except that if during any such 12-month period, 2023 Sub- Series D Term Bonds of any Term Bond maturity have otherwise been redeemed or purchased by the Trustee or deposited by the Commission in excess of the amount of Bond Obligation of the 2023 Sub- Series D Term Bonds identified in Section 199.07(b) above for such 12-month period, unless otherwise directed by the Commission at the time of such redemption, purchase or deposit, the remaining 2023 Sub- Series D Minimum Sinking Account Payment amounts stated in Section 199.07(b) above shall be deemed to have been reduced on a Proportionate Basis, and further except that moneys in the 2023 Sub- Series D Sinking Fund Account shall be used, to the extent necessary, to purchase or retire the balance of the Outstanding 2023 Sub-Series D Term Bonds at the final maturity thereof.

The Commission hereby covenants and agrees with the Owners of the 2023 Sub- Series D Bonds to call and redeem 2023 Sub- Series D Bonds from the 2023 Sub- Series D Sinking Fund Account pursuant to this Section on November 1 in each of the years, and in the amounts, stated 134834076.4 12
in Section 199.07(b) above (subject to adjustment of such amounts in the event of optional redemption of such 2023 Sub-Series D Term Bonds or as otherwise hereinabove provided).

SECTION 199.08 Establishment and Application of the 2023 Sub- Series D Rebate Fund.
(a) The Trustee shall establish and maintain a fund separate from any other fund established and maintained hereunder to be known as the “2023 Sub- Series D Rebate Fund” (for purposes of this Article, the “Rebate Fund”). Within the Rebate Fund, the Trustee shall maintain such accounts as it is instructed by the Commission as necessary in order to comply with the terms and requirements of the Tax Certificate with r espect to the 2023 Sub- Series D Bonds, dated the date of issuance of the 2023 Sub-Series D Bonds (for purposes of this Article, the “Tax Certificate”).

Subject to the transfer provisions provided in paragraph (e) below, all money at any time deposited in the Rebate Fund shall be held by the Trustee for the account of the Commission in trust, to the extent required to satisfy the requirements for rebate, as set forth in the Tax Certificate (for purposes of this Article, the “Rebate Requirement”), for payment to the federal government of the United States of America, and no other person shall have any rights in or claim to such money. All amounts deposited into or on deposit in the Rebate Fund shall be governed by this Section, by Section 199.10 hereof and by the Tax Certificate (which is incorporated herein by reference). The Trustee shall be deemed conclusively to have complied with such provisions and fulfilled its obligation with respect to rebate as long as it follows the written directions of the Commission, including supplying all necessary information in the manner provided in the Tax Certificate. The Trustee shall not be required to take any actions under this Section, Section 199.10 hereof or the Tax Certificate in the absence of written directions by the Commission, and shall have no liability or responsibility to enforce compliance by the Commission with the terms of the Tax Certificate nor make computations in connection therewith.
(b) Upon the Commission’s written direction, an amount shall be deposited in the Rebate Fund by the Trustee from deposits by the Commission so that the balance of the amount on deposit therein equals the Rebate Requirement. Computations of the Rebate Requirement shall be furnished by or on behalf of the Commission in accordance with the Tax Certificate.

The Trustee shall have no obligation to rebate any amounts required to be rebated pursuant to this Section, other than from moneys held in the funds and accounts created under the Indenture or from other moneys provided to it by or on behalf of the Commission. (c) The Trustee shall invest all amounts held in the Rebate Fund in Permitted Investments as instructed in writing by the Commission, subject to the restrictions set forth in the Tax Certificate. Moneys shall not be trans ferred from the Rebate Fund except as provided in paragraph (e) below.

Upon receipt of the Commission’s written directions, the Trustee shall remit part or all of the balances in the Rebate Fund to the United States, as so directed. In addition, if the Commission so directs, the Trustee will deposit moneys into or transfer moneys out of the 134834076.4 13
Rebate Fund from or into such accounts or funds as directed by the Commission’s written directions. Any funds remaining in the Rebate Fund after redemption and payment of all of the 2023 Sub- Series D Bonds and payment and satisfaction of any Rebate Requirement shall be withdrawn and remitted to the Commission upon the Commission’s written request. (d) Notwithstanding any other provision of the Indenture, the obligation to r emit the Rebate Requirement to the United States and to comply with all other requirements of this Section, Section 199.10 hereof and the Tax Certificate shall survive the defeasance or payment in full of the 2023 Sub-Series D Bonds.

SECTION 199.09 Tax Covenants.

The Commission will not directly or indirectly use or permit the use of any proceeds of the 2023 Sub-Series D Bonds or any other funds of the Commission, or take or omit to take any action that would cause the 2023 Sub- Series D Bonds to be “arbitrage bonds” within the meaning of Section 148(a) of the Code. To that end, the Commission will comply with all requirements of Section 148 of the Code to the extent applicable to the 2023 Sub- Series D Bonds. If at any time the Commission is of the opinion that for purposes of this Section it is necessary to restrict or limit the yield on the investment of any moneys held by the Trustee under the Indenture or otherwise, the Commission shall so instruct the Trustee in writing, and the Trustee shall take such action as required by such instructions.

Without limiting the generality of the foregoing, the Commission agrees that there shall be paid from time to time all amounts required to be rebated to the United States pursuant to Section 148(f) of the Code and any temporary, proposed or final Treasury Regulations as may be applied to the 2023 Sub-Series D Bonds from time to time. This covenant shall survive payment in full or defeasance of the 2023 Sub- Series D Bonds. The Commission specifically covenants to pay or cause to be paid to the United States, at the times and in the amounts determined under Section 199.09 hereof, the Rebate Requirement. The Trustee agrees to comply with all written instructions of the Commission given in accordance with the Tax Certificate.

Notwithstanding any provision of this Section and Section 199.09 hereof, if the Commission provides to the Trustee an opinion of nationally recognized bond counsel to the effect that any action required under this Section and Section 199.09 hereof or under the Tax Certificate is no longer required, or to the effect that some further action is required, to maintain the exclusion from gross income of the interest on the 2023 Sub- Series D Bonds under Section 103 of the Code, the Commission and the Trustee may rely conclusively on such opinion in complying with the provisions hereof, and the covenants hereunder shall be deemed to be modified to that extent.

The Commission shall assure that the proceeds of the 2023 Sub- Series D Bonds are not so used as to cause the 2023 Sub- Series D Bonds to satisfy the private business tests of Section 141(b) of the Code or the private loan financing test of Section 141(c) of the Code. 134834076.4 14
The Commission shall not take any action or permit or suffer any action to be taken if the result of the same would be to cause any of the 2023 Sub- Series D Bonds to be “federally guaranteed” within the meaning of Section 149(b) of the Code.

SECTION 199.10 Continuing Disclosure.

The Commission hereby covenants and agrees that it will comply with and carry out all of the provisions of that certain Continuing Disclosure Certificate, dated as of the date of issuance of the 2023 Sub- Series D Bonds, executed and delivered by the Commission in connection with the issuance of the 2023 Sub- Series D Bonds, as it may be supplemented and amended in accordance with its terms (the “ 2023 Series CD Continuing Disclosure Certificate”).

MISCELLANEOUS
SECTION 200.01 Terms of 2023 Sub-Series D Bonds Subject to the Indenture.

Except as expressly provided in this Forty -Sixth Supplemental Indenture, every term and condition contained in the Indenture shall apply to this Forty -Sixth Supplemental Indenture, and to the 2023 Sub- Series D Bonds, with the same force and effect as if the same were herein set forth at length, with such omissions, variations and modifications thereof as may be appropriate to make the same conform to this Forty-Sixth Supplemental Indenture.

This Forty-Sixth Supplemental Indenture and all the terms and provisions herein contained shall form part of the Indenture as fully and with the same effect as if all such terms and provisions had been set forth in the Indenture. Except as expressly amended by Article CLXXXVII in the Forty -Third Supplemental Indenture, the Indenture is hereby ratified and confirmed and shall continue in full force and effect in accordance with the terms and provisions thereof. The amendments set forth in Article CLXXXVII in the Forty-Third Supplemental Indenture shall be incorporated as part of the Indenture upon their effectiveness as set forth in Section 187.01 in the Forty-Third Supplemental Indenture.

SECTION 200.02 Effective Date of Forty-Sixth Supplemental Indenture. This Forty- Sixth Supplemental Indenture shall take effect upon its execution and delivery.

SECTION 200.03 Holder Consents to Amendments in Forty -Third Supplemental Indenture. By acceptance of a 2023 Sub- Series D Bond, the holder thereof consents to the amendments described in Article CLXXXVII in the Forty-Third Supplemental Indenture. 134834076.4 15
SECTION 200.04 Execution in Counterparts; No Seal Required for Execution. This Forty-Sixth Supplemental Indenture may be executed in several counterparts, each of which shall be deemed an original, and all of which shall constitute but one and the same instrument. No seal of the Commission is required for the execution of this Forty-Sixth Supplemental Indenture.

ADDITIONAL CITY REQUIREMENTS
As used in this Article, “Agreement” means the Indenture.

SECTION 201.01 Conflict of Interest. Through its execution of this Forty -Sixth 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 Sect ion 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 Forty-Sixth Supplemental Indenture.

SECTION 201.02 Proprietary or Confidential Information of the City. The Trustee understands and agrees that, in the performance of the work or services under this Forty -Sixth Supplemental Indenture or in contemplation thereof, the Trustee may have access to private or confidential information which may be owned or controlled by the City and that such information may contain proprietary or confidential details, the disclosure of which to t hird parties may be damaging to the City. The Trustee agrees that all information disclosed by City to the Trustee shall be held in confidence and used only in the performance of this Forty-Sixth Supplemental Indenture. The Trustee shall exercise the same standard of care to protect such information as a reasonably prudent contractor would use to protect its own proprietary data.

SECTION 201.03 Local Business Enterprise Utilization; Liquidated Damages. (a) The LBE Ordinance
The Trustee shall comply with all the requirements of the Local Business Enterprise and Non-Discrimination in Contracting 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 Forty -Sixth Supplemental Indenture. Such provisions of the LBE Ordinance are incorporated by reference and made a part of this Forty -Sixth Supplemental Indenture as though fully set forth in this Section. The Trustee ’s willful failure to comply with any applicable provisions of the LBE Ordinance is a material breach of the Tr ustee’s obligations under this Forty -Sixth Supplemental Indenture and shall entitle City, subject to any applicable notice and cure provisions set forth in 134834076.4 16
this Forty-Sixth Supplemental Indenture, to exercise any of the remedies provided for under this Forty-Sixth Supplemental Indenture, under the LBE Ordinance or otherwise available at law or in equity, which remedies shall be cumulative unless this Forty -Sixth Supplemental Indenture expressly provides that any remedy is exclusive. In addition, the Truste e shall comply fully with all other applicable local, state and federal laws prohibiting discrimination and requiring equal opportunity in contracting, including subcontracting.
(b) 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 Forty -Sixth 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 Forty -Sixth Supplemental Indenture, or 10% of the total amount of this Forty -Sixth Supplemental Indenture , or $1,000, whichever is greatest. The Director of the City ’s Contracts Monitoring Division or any other public official authorized to enforce the LBE Ordinance (separately and collectively, the “Director of CMD”) 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 LBE certification. The Director of CMD will determine the sanctions to be imposed, including the amount of liquidat ed damages, after investigation pursuant to Administrative Code §14B.17.

By entering into this Forty -Sixth Supplemental Indenture, the Trustee acknowledges and agrees that any liquidated damages assessed by the Director of the CMD shall be payable to City upon demand. The 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 Forty-Sixth Supplemental Indenture, and shall make such records available for audit and inspection by the Director of CMD or the Controller upon request.

SECTION 201.04 Nondiscrimination; Penalties.
(a) Trustee Shall Not Discriminate
In the performance of this Forty -Sixth Supplemental Indenture, the Trustee agrees not to discriminate against any employee, City and County employee working with the Trustee or subcontractor, applicant for employment with the Trustee 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/HIV status), or association with members of such protected classes, or in retaliation for opposition to discrimination against such classes. 134834076.4 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 Purchasing) and shall require all subcontractors to comply with such provisions. The Trustee ’s failure to comply with the obligations in this subsection shall constitute a material breach of this Forty-Sixth Supplemental Indenture. (c) Nondiscrimination in Benefits
The Trustee does not as of the date of this Forty -Sixth Supplemental Indenture and will not during the term of this Forty -Sixth 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 me mbership 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 partn ers and spouses of such employees, where the domestic partnership has been registered with a governmental entity pursuant to state or local law authorizing such registration, subject to the conditions set forth in §12B.2(b) of the San Francisco Administrative Code. (d) Condition to Contract
As a condition to this Forty -Sixth Supplemental Indenture, the Trustee shall execute the “Chapter 12B Declaration: Nondiscrimination in Contracts and Benefits ” form (Form CMD- 12B-101) with supporting documentation and secure the approval of the form by the San Francisco Contracts Monitoring Division (formerly ‘Human Rights Commission’). (e) Incorporation of Administrative Code Provisions by Reference The provisions of Chapters 12B and 12C of the San Francisco Administrative Code are incorporated in this Section by reference and made a part of this Forty -Sixth 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 Forty -Sixth 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) and 12C.3(g) 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 Forty -Sixth Supplemental Indenture may be assessed against the Trustee and/or deducted from any payments due the Trustee.

SECTION 201.05 MacBride Principles—Northern Ireland. Pursuant to San Francisco Administrative Code §12F.5, the City and County of San Francisco urges companies doing business in Northern Ireland to move towards resolving employment inequities, and encourages such companies to abide by the MacBride Principles. The City and County of San Francisco urges San Francisco companies to do business with corporations that abide by the MacBride Principles. By signing below, the person executing this Forty -Sixth Supplemental Indenture on 134834076.4 18
behalf of the Trustee acknowledges and agrees that he or she has read and understood this Section.

SECTION 201.06 Tropical Hardwood and Virgin Redwood Ban. Pursuant to §804(b) of the San Francisco Environment Code, the City and County of San Francisco urges contractors not to import, purchase, obtain, or use for any purpose, any tropical hardwood, tropical hardwood wood product, virgin redwood or virgin redwood wood product.

SECTION 201.07 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 Forty-Sixth Supplemental Indenture.

SECTION 201.08 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 this Forty-Sixth Supplemental Indenture.

SECTION 201.09 Compliance with Americans with Disabilities Act. The Trustee acknowledges that, pursuant to the Ameri cans 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 t his Forty-Sixth 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 servi ces, benefits or activities provided under this Forty -Sixth 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 Forty-Sixth Supplemental Indenture.

SECTION 201.10 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 contrac ts, 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 201.11 Limitations on Contributions . Through execution of this Forty - Sixth 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 the board of a state agency on which an appointee of that individual serves, (2) a candidate for 134834076.4 19
the office held by such individual, or (3) a committee controlled by such individual, at any time from the commencement of negotiations for the contract until the later of either the termination of negotiations for such contract or six months after the date the contract is approved. The Trustee acknowledges that the foregoing restriction applies only if the contract or a combination or series of contracts approved by the same individual or board in a fi scal 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. The Trustee further agrees to provide to the City the names of each person, entity or committee described above.

SECTION 201.12 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 Sa n Francisco Administrative Code Chapter 12P (Chapter 12P), including the remedies provided, and implementing guidelines and rules. The provisions of Section 12P.5 and 12P.5.1 of Chapter 12P are incorporated herein by reference and made a part of this Fort y-Sixth Supplemental Indenture as though fully set forth. The text of the MCO is available on the web at www.sfgov.org/olse/mco. A partial listing of some of the 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.
(b) The MCO requires the Trustee to pay the Trustee ’s employees a minimum hourly gross compensation wage rate and to provide minimum compensated and uncompe nsated 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 Forty -Sixth Supplemental Indenture comply with the requirements of the MCO. If any subcontractor under this Forty - Sixth Supplemental Indenture fails to comply, the City may pursue any of the remedies set forth in this Section against the Trustee.
(c) The Trustee shall not take adverse action or otherwise discri minate against an employee or other person for the exercise or attempted exercise of rights under the MCO. Such actions, if taken within 90 days of the exercise or attempted exercise of such rights, will be rebuttably presumed to be retaliation prohibited by the MCO. (d) The Trustee shall maintain employee and payroll records as required by the MCO.

If the Trustee fails to do so, it shall be presumed that the Trustee paid no more than the minimum wage required under State law.
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(e) The City is authorized to inspec t the Trustee ’s job sites and conduct interviews with employees and conduct audits of the Trustee.
(f) The Trustee’s commitment to provide the Minimum Compensation is a material element of the City ’s consideration for this Forty -Sixth Supplemental Indenture. The City in its sole discretion shall determine whether such a breach has occurred. The City and the public will suffer actual damage that will be impractical or extremely difficult to determine if the Trustee fails to comply with these requirements. The Trustee agrees that the sums set forth in Section 12P.6.1 of the MCO as liquidated damages are not a penalty, but are reasonable estimates of the loss that the City and the public will incur for the Trustee ’s noncompliance. The procedures governing the assessment of liquidated damages shall be those set forth in Section 12P.6.2 of Chapter 12P.
(g) The Trustee understands and agrees that if it fails to comply with the requirements of the MCO, the City shall have the right to pursue any rights or remedies available under Chapter 12P (including liquidated damages), under the terms of this Forty -Sixth Supplemental Indenture, and under applicable law. If, within 30 days after receiving written notice of a breach of this Forty-Sixth Supplemental Indenture for violating the MCO, the Trustee fails to cure such breach or, if such breach cannot reasonably be cured within such period of 30 days, the Trustee fails to commence efforts to cure within such period, or thereafter fails diligently to pursue such cure to completion, the City shall have the right to pursue any rights or remedies available under applicable law, including those set forth in Section 12P.6(c) of Chapter 12P. Each of these remedies shall be exercisable individually or in combination with any other rights or remedies available to the City.
(h) The Trustee represents and warrants that it is not an entity that was set up, or is being used, for the purpose of evading the intent of the MCO. (i) The City may conduct random audits of the Trustee. Random audits shall be (i) noticed in advance in writing; (ii) limited to ascertaining whether Covered Employees are paid at least the minimum compensation required by the MCO; (iii) accomplished through an examination of pertinent records at a mutually agreed upon time and 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 Forty-Sixth Supplemental Indenture. Nothing in this Forty -Sixth Supplemental Indenture is intended to preclude the City from investigating any report of an alleged violation of the MCO.

SECTION 201.13 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 (HC AO), 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 Section 12Q.5.1 of Chapter 12Q are incorporated by reference and made a part of this Forty -Sixth Supplemental Indenture as though fully set forth herein. The text of the HCAO is available on the web at www.sfgov.org/olse.

Capitalized terms used in this Section and not defined in this Forty-Sixth Supplemental Indenture shall have the meanings assigned to such terms in Chapter 12Q. 134834076.4 21
(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(e) 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 Forty -Sixth Supplemental Indenture. The City shall notify the Trustee if such a breach has occurred. If, within 30 days after receiving the City’ s written notice of a breach of this Forty-Sixth 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, the City shall have the right to pursue the remedies set forth in 12Q.5.1 and 12Q.(f)(1-6). Each of these remedies shall be exercisable individually or in combination w ith any other rights or remedies available to the City.
(d) Any Subcontract entered into by the Trustee shall require the Subcontractor to comply with the requirements of the HCAO and shall contain contractual obligations substantially the same as those set forth in this Section. 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 Chapter 12Q. 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 the 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 the City with regard to the Trustee ’s noncompliance or anticipated noncompliance with the requirements of the HCAO, for opposing any practice proscribed by the HCAO, for participating in proceedings related to the HCAO, or for seeking to assert or enforce any rights under the HCAO by any lawful means. (f) The Trustee represents and warrants that it is not an entity that was set up, or is being used, for the purpose of evading the intent of the HCAO. (g) The Trustee shall maintain employee and payroll records in compliance with the California Labor Code and Industrial Welfare Commission orders, including the number of hours each employee has worked on this Forty-Sixth Supplemental Indenture. (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.
134834076.4 22
(j) The Trustee shall provide the City with access to records pertaining to compliance with HCAO after receiving a written request from the City to do so and being provided at least ten business days to respond.
(k) The Trustee shall allow the 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 the City when it conducts such audits. (m) If the Trustee is exempt from the HCAO when this Forty -Sixth Supplemental Indenture is executed because its fees hereunder are in an amount that is less than $25,000 ($50,000 for nonprofits), but the Trustee lat er enters into an agreement or agreements that cause the Trustee’ s aggregate amount of all agreements with the City to reach $75,000, all the agreements shall be thereafter subject to the HCAO. This obligation arises on the effective date of the agreement that causes the cumulative amount of fees from agreements between the Trustee and the City to be equal to or greater than $75,000 in the fiscal year.

SECTION 201.14 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 Forty - Sixth 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 and 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 Forty -Sixth 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 201.15 Preservative-treated Wood Containing Arsenic . The Trustee may not purchase preservative -treated wood products containing arsenic in the performance of this Forty-Sixth 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 Environment Code. The term “ preservative-treated wood containing arsenic” shall mean wood treated with a preservative that contains arsenic, elemental arsenic, or an arsenic copper combination, including, but not limited to, chromated copper arsenate preservative, ammoniacal copper zinc arsenate preservative, or ammoniacal copper arsenate preservative. The Trustee may purchase preservative- treated wood products on the list of environmentally preferable alternatives prepared and adopted by the Department of the Environment. This provision does not preclude the Trustee from purchasing preservative -treated wood containing arsenic for saltwater immersion. The term “ saltwater immersion” shall mean a pressure-treated wood that is used for construc tion purposes or facilities that are partially or totally immersed in saltwater.
134834076.4 23
SECTION 201.16 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 Forty-Sixth 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 201.17 Protection of Private Information. The Trustee has read and agrees to the terms set forth in San Francisco Administrative Code Section 12M.2, “Nondisclosure of Private Information, ” and 12M.3, “ Enforcement,” and in Administrative Code Chapter 12M, “Protection of Private Infor mation,” 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 Chapter 12M shall be a material breach of this Forty -Sixth Supplemental Indenture. In suc h an event, in addition to any other remedies available to it under equity or law, the City may terminate this Forty-Sixth 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 201.18 Food Service Waste Reduction Requirements. 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 by reference and made a part of this Forty-Sixth Supplemental Indenture as though fully set forth herein. This provision is a material term of this Forty -Sixth Supplemental Indenture . By entering into this Forty -Sixth Supplemental Indenture, the Trustee agrees that if it breaches this provision, the 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 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 Forty -Sixth 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 201.19 Submitting False Claims; Monetary Penalties . Pursuant to San Francisco Administrative Code §21.35, any contractor, subcontractor or consultant who submits a false claim shall be liable to the City for the statutory penalties set forth in that Section. A contractor, subcontractor or consultant who submits a false claim shall also be liable to the City for the costs, including attorneys’ fees, of a civil action brought to recover any of those penalties or damages, and may be liable to the City for a civil penalty of up to $10,000 for each false claim. A contractor, subcontractor or consultant will be deemed to have submitted a false claim to the City if the contractor, subcontractor or consultant: (a) knowingly presents or causes to be presented to an officer or employee of the City a false claim or request for payment or approval; (b) knowingly makes, uses, or causes to be made or used a false record or statement to get a false claim paid or approved by the City; (c) conspires to defraud the City by getting a false claim allowed or paid by the City; (d) knowingly makes, uses, or causes to be made or used a false record or statement to conceal, avoid, or decrease an obligation to pay or transmit money or property to the City; or (e) is a beneficiary of an inadvertent submission of a false claim to the 134834076.4 24
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 201.20 Sugar-Sweetened Beverage Prohibition. The Trustee agrees that it will not sell, provide, or otherwise distribute Sugar -Sweetened Beverages, as defined b y San Francisco Administrative Code Chapter 101, as part of its performance of this Forty -Sixth Supplemental Indenture.

SECTION 201.21 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 201.22 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 Forty -Sixth Supplemental Indenture shall become the property of and will be transmitted to the City. However, the Trustee may retain and use copies for reference and as documentation of its experience and capabilities.

SECTION 201.23 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 Forty -Sixth Supplemental Indenture . The Trustee will permit the 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 Forty-Sixth Supplemental Indenture , whether funded in whole or in part under this Forty-Sixth 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 Forty -Sixth 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 Forty -Sixth Supplemental Indenture shall have the same rights conferred upon the City by this Section.

SECTION 201.24 Subcontracting. The Trustee is prohibited from subcontracting this Forty-Sixth Supplemental Indenture or any part of it unless such subcontracting is first approved by the City in writing. Neither party shall, on the basis of this Forty -Sixth Supplemental Indenture, contract on behalf of or in the name of the other party. An agreement made in violation of this provision shall confer no rights on any party and shall be null and void.

SECTION 201.25 Assignment. The services to be performed by Trustee are personal in character and neither this Forty -Sixth Supplemental Indenture nor any duties or obligations hereunder may be assigned or delegated by the Trustee unless first approved by the City by written instrument executed and approved in the same manner as this Forty -Sixth Supplemental Indenture.

SECTION 201.26 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, 134834076.4 25
covenants, or provisions hereof by the other party at the time designated, shall not be a waiver of any such default or right to which the party is entitled, nor shall it in any way affect the right of the party to enforce such provisions thereafter.

SECTION 201.27 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 this Article of this Forty -Sixth Supplemental Indenture and to the extent that any other right s are given to the City hereunder.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

134834076.4 S-1
IN WITNESS WHEREOF, the parties hereto have executed this Forty -Sixth Supplemental Indenture by their officers thereunto duly authorized as of the date and year first written above.

U.S. BANK TRUST COMPANY, NATIONAL

ASSOCIATION,
as Trustee
By: ______________________________________
Vice President

PUBLIC UTILITIES COMMISSION OF THE

David Chiu, City Attorney
By: ________________________________
Mark D. Blake, Deputy City Attorney

134834076.4 AW-1

EXHIBIT AW

FORM OF 2023 SUB-SERIES D BOND
Unless this bond is presented by an authorized representative of The Depository Trust Company, a New York corporation ( “DTC”), to the Commission or its agent for registration of transfer, exchange, or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein. $______________ No. R-______
State of California
City and County of San Francisco

PUBLIC UTILITIES COMMISSION OF THE

CITY AND COUNTY OF SAN FRANCISCO

SAN FRANCISCO WATER REVENUE BOND
2023 SERIES CD
2023 SUB-SERIES D BOND (REFUNDING)
(LOCAL WATER)
Dated Date Interest Rate Maturity Date CUSIP No.
_________, 2023 November 1, 20__
Registered Owner: Cede & Co.

Principal Amount: _____________________ DOLLARS
The PUBLIC UTILITIES COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO, a commission duly organized and existing under and pursuant to the Charter of the City and County of San Francisco and the laws of the State of California (herein called the “Commission”), for value received, hereby promises to pay (but only out of the revenues hereinafter referred to) to the registered owner set forth above, or registered assigns, on the maturity date set forth above (subject to any right of prior redemption hereinafter provided for), the principal sum set forth above in lawful money of the United States of America, and to pay (but only out of the revenues hereinafter referred to) interest thereon in like lawful money from the interest payment date next preceding the date of authentication of this Bond (unless this Bond is authenticated as of a day during the period from the 16 th day of the calendar month next
preceding any interest payment date to and including such interest payment date, in which event it shall bear interest from such interest payment date, or unless this Bond is authenticated on or 134834076.4 AW-2
before September 15, 2023, in which event it shall bear interest from [CLOSING DATE] ; provided, however, that if, at the time of authentication of any Bond, interest is in default on Outstanding Bonds, such Bond shall bear interest from the interest payment date to which interest has previously been paid or made available for payment on the Outstanding Bonds and shall be payable to the Owners thereof of record as of a special date as shall be established by the Trustee (as defined below) following such default) until payment of such principal sum, at the interest rate per annum stated above, payable on November 1, 2023 and semiannually thereafter on May 1 and November 1 in each year.

The interest hereon is payable to the person whose name appears on the bond registration books of the Trustee as the registered ow ner hereof as of the close of business on the 15 th day of the
calendar month immediately preceding an interest payment date, whether or not such day is a business day, such interest to be paid, except as otherwise provided in the Indenture, by check mailed to such registered owner at such address as appears on such registration books. Interest on this Bond shall be calculated on the basis of a 360- day year comprised of twelve 30- day months.

This Bond is one of a duly authorized issue of revenue bonds of th e Commission designated as the “San Francisco Water Revenue Bonds ” (herein called the “Bonds” ), of the series and designation indicated on the face hereof (herein called the “ 2023 Sub- Series D Bonds”) and is a Current Interest Bond (as such term is defined in the Indenture hereinafter referred to). The Bonds are not limited in aggregate principal amount and consist or may consist of one or more series of varying denominations, dates, maturities, interest rates and other provisions, as in said Indenture provided, all issued and to be issued under and pursuant to the provisions of the Charter of the City and County of San Francisco and all laws of the State of California supplemental thereto, including the Revenue Bond Law of 1941 to the extent made applicable by said Charter (herein collectively called the “ Law”), and pursuant to an Amended and Restated Indenture, dated as of August 1, 2002, between the Trustee and the Commission, as further amended and supplemented, including as amended and supplemented by t hat certain Forty-Sixth Supplemental Indenture, dated as of _______ 1, 2023, between the Trustee and the Commission, authorizing the issuance of the 2023 Sub- Series D Bonds (collectively, the “Indenture”).

Reference is hereby made to the Indenture (a copy of which is on file at the office of the Trustee) and to the Law for a description of the terms on which the Bonds are issued, the provisions with regard to the nature and extent of the Revenues (as such term is defined in the Indenture) and the rights thereunder (and limitations thereon) of the registered owners of the Bonds and the rights, duties and immunities of the Trustee and the rights and obligations of the Commission thereunder; and all the terms of the Indenture and the Law are hereby incorporated herein and constitute a contract between the Commission and the registered owner of this Bond, and to all the provisions thereof the owner of this Bond, by his acceptance hereof, consents and agrees. Each owner hereof shall have recourse to all of t he provisions of the Law and the Indenture and shall be bound by all of the terms and conditions thereof. 134834076.4 AW-3
The Bonds are issued to refinance and finance the reconstruction, replacement, expansion and repair of or improvements to the water facilities of the Enterprise, as more particularly described in the Indenture. The Bonds are special obligations of the Commission and are payable, as to the principal thereof, interest thereon and any premiums upon the redemption of any thereof, from the revenues of the E nterprise (which, as more particularly defined in the Indenture, are therein and herein called the “ Revenues”). All of the Bonds are equally secured by a pledge of, and charge and lien upon, all of the Revenues, and the Revenues constitute a trust fund for the security and payment of the interest on and principal of the Bonds; 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 the Bonds as provided in the Indenture. Additional Series of Bonds payable from the Revenues may be issued on a parity with the Bonds of this Series, but only subject to the conditions and limitations contained in the Indenture.

The rights and obligations of the Commission and the owners of the Bonds may be modified or amended at any time in the manner, to the extent and upon the terms provided in the Indenture.

The 2023 Sub-Series D Bonds maturing on or after November 1, 20__, shall be subject to redemption prior to their stated maturity, at the option of the Commission, from any source of available fun ds, as a whole or in part, on any date on or after November 1, 20__, from such maturities or portions of maturities as are determined by the Commission and by lot within any one maturity, at a redemption price equal to 100% of the principal amount of the 2023 Sub- Series D Bonds to be redeemed, plus accrued interest thereon to the date fixed for redemption, without premium.

The 2023 Sub-Series D Term Bonds maturing November 1, 20__, are further subject to redemption prior to their stated maturity and payable from the 2023 Sub- Series D Sinking Fund Account (described in the Indenture), on November 1, 20__, by lot within any such maturity if less than all of the 2023 Sub- Series D Bonds of such maturity are redeemed, upon payment of the principal amount thereof and accrued interest thereon to the date fixed for redemption without premium. Such sinking fund redemption of the 2023 Sub- Series D Term Bonds maturing November 1, 20__ shall only be made in amounts equal to, and in accordance with, the schedule of principal amounts of 2023 Sub- Series D Bonds to be redeemed in each such year set forth below (subject to adjustment as directed by the Commission in the event of optional redemption of any portion of such 2023 Sub- Series D Term Bonds prior to maturity pursuant to the Indenture):
134834076.4 AW-4
Redemption Date
(November 1) Principal Amount
$

†
______________
† Maturity
The 2023 Sub-Series D Term Bonds maturing November 1, 20__, are further subject to redemption prior to their stated maturity and payable from the 2023 Sub- Series D Sinking Fund Account (described in the Indenture), on November 1, 20__, by lot within any such maturity if less than all of the 2023 Sub- Series D Bonds of such maturity are redeemed, upon payment of the principal amount thereof and accrued interest thereon to the date fixed for redemption without premium. Such sinking fund redemption of the 2023 Sub- Series D Term Bo nds maturing November 1, 20__ shall only be made in amounts equal to, and in accordance with, the schedule of principal amounts of 2023 Sub- Series D Bonds to be redeemed in each such year set forth below (subject to adjustment as directed by the Commission in the event of optional redemption of any portion of such 2023 Sub- Series D Term Bonds prior to maturity pursuant to the Indenture):

Redemption Date
(November 1) Principal Amount
$

†
______________
† Maturity
134834076.4 AW-5
The 2023 Sub-Series D Bonds are issuable as fully registered Bonds without coupons in the denomination of $5,000 or any integral multiple thereof provided that no Bond shall have principal maturing on more than one principal payment date. Subject to the limit ations and conditions and upon payment of the charges, if any, as provided in the Indenture, 2023 Sub- Series D Bonds may be exchanged for a like aggregate principal amount of 2023 Sub- Series D Bonds of the same series, tenor and maturity of other authorized denominations.

It is hereb y 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 do exist, have happened or have been performed in due and regular time, form and manner as required by the Law and the laws of the State of California, and that the amount of this Bond, together with all other obligations of the Commission, does not exceed any limit prescribed by the Law or any laws of the State of California, and is not in excess of the amount of Bonds permitted to be issued under the Indenture.

By acceptance of this Bond, the holder hereof consents to the amendments described in Article CLXXXVII of the Forty-Third Supplemental Indenture. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
134834076.4 AW-6
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 [CLOSING DATE].

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
134834076.4 AW-7
[FORM OF TRUSTEE’S CERTIFICATE OF AUTHENTICATION
AND REGISTRATION TO APPEAR ON THE 2023 SUB-SERIES D BOND] This Bond is one of the Bonds described in the within- mentioned Indenture, which has been authenticated and registered on the date set forth below.

U.S. BANK TRUST COMPANY, NATIONAL

ASSOCIATION,
as Trustee
Dated: [CLOSING DATE]
By: ______________________________________
Authorized Officer
134834076.4 AW-8
[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.

HDW Draft – 5/24/23 [REFUNDING]

3771174.5 046549 AGMT

$[AGGREGATE PAR]

PUBLIC UTILITIES COMMISSION OF THE

CITY AND COUNTY OF SAN FRANCISCO

SAN FRANCISCO WATER REVENUE BONDS
2023 SERIES CD

$__________
2023 SUB-SERIES C BONDS
(REFUNDING)
(WSIP)(GREEN BONDS)
$__________
2023 SUB-SERIES D BONDS
(REFUNDING)
(LOCAL WATER)

BOND PURCHASE CONTRACT

[Pricing Date]
Public Utilities Commission of the
City and County of San Francisco
525 Golden Gate Avenue, 13th Floor
San Francisco, CA 94102
Ladies and Gentlemen:

The undersigned Jefferies LLC , on its own behalf and as representative (the “Representative”) of Wells Fargo Bank, N.A., RBC Capital Markets, LLC, Samuel A. Ramirez & Co., Inc., UBS Financial Services, Inc. and U.S. Bancorp Investments, Inc. (collectively, the “Underwriters”), offers to enter into this Bond Purchase Contract (this “Purchase Contract”) with the Public Utilities Commission of the City and County of San Francisco (the “Commission” ), which will be binding upon the Commission and the Underwriters upon acceptance hereof by the Commission. This offer is made subject to the acceptance by the Commission by its execution of this Purchase Contract and its delivery to the Representative on or before 11:59 p.m., California time, on the date hereof and, if not so accepted, will be subject to withdrawal by the Underwriters upon written notice delivered by the Representative to the Commission at any time prior to the acceptance of this Purchase Contract by the Commission. If the Representative w ithdraws this offer, or the Underwriters’ obligation to purchase the Bonds (as hereinafter defined) is otherwise terminated pursuant to Section 9(d) hereof, then and in such case the Commission shall be without any further obligation to the Underwriters, including the payment of any costs set forth under Section 11(a) hereof, and the Commission shall be free to sell the Bonds to any other party.

The Representative represents that it has been duly authorized by the other Underwriters to act hereunder on its behalf and has full authority to take such action as it may deem advisable in respect to all matters pertaining to this Purchase Contract and that the Representative has been -2-
3771174.5 046549 AGMT
duly authorized to execute this Purchase Contract. Any action taken under this Purchase Contract by the Representative will be binding upon all of the Underwriters.

Capitalized terms not otherwise defined herein shall have the meanings set forth in the Amended and Restated Indenture, dated as of August 1, 2002 (the “Master Indenture”), between the Commission and U.S. Bank Trust Company, National Association, as successor trustee (the “Trustee”), as supplemented and amended to date and as further supplemented by a Forty- Fifth Supplemental Indenture, dated as of June 1, 2023 (the “Forty-Fifth Supplemental Indenture”) and a Forty-Sixth Supplemental Indenture, dated as of June 1, 2023 (the “Forty-Sixth Supplemental Indenture”), each between the Commission and the Trustee (the Master Indenture, as supplemented, being herein referred to as the “Indenture”).

Section 1. Purchase and Sale. Upon the terms and conditions and upon the basis of the representations set forth herein, the Underwriters jointly and severally agree to purchase from the Commission, and the Commission hereby agrees to sell and deliver to, or for the account of, the Underwriters, all (but not less than all) of the $[TOTAL PAR] aggregate principal amount of Public Utilities Commission of the City and County of San Francisco Water Revenue Bonds, 2023 Series CD (the “Bonds”), consisting of the $[2023C Par] 2023 Sub-Series C (Refunding) (WSIP) (Green Bonds) (the “Series 2023C Bonds”) and the $[2023D Par] 2023 Sub-Series D (Refunding) (Local Water ) (the “Series 2023D Bonds ,” and together with the Series 2023C Bonds, the “Bonds”). On or about the closing of the Bonds, the Commission will issue its Public Utilities Commission of the City and County of San Francisco San Francisco Water Revenue Bonds, 2023 Series AB (the “New Money Bonds”). Closing of the Bonds is not contingent upon the issuance of the New Money Bonds.

The aggregate purchase price for the Bonds shall be $[Aggregate Purchase Price] (comprised of the purchase price of the Series 2023C Bonds in the amount of $[ 2023C Purchase Price], representing the principal amount of the Series 2023C Bonds, plus a [net] premium of $[2023C Premium] and less an Underwriters’ discount in the amount of $[2023C UW Discount], and the purchase price of the Series 2023D Bonds in the amount of $[ 2023D Purchase Price], representing the principal amount of th e Series 2023D Bonds, plus a [net] premium of $[ 2023D Premium] and less an Underwriters’ discount of $[ 2023D UW Discount]). At the Closing, the Good Faith Deposit (defined herein) will be applied and deducted from the aggregate net purchase price for the Bonds as provided in Section 10 of this Purchase Contract.

The Bonds shall be dated their date of delivery and shall have th e maturities in principal amounts and bear interest at the rates per annum and have the prices all as set forth on Schedule I attached hereto. The Bonds shall be subject to optional and mandatory sinking fund redemption prior to maturity as shown on Schedule I. The Bonds shall be substantially in the form described in, and shall be issued and secured under and pursuant to, the Indenture. The Bonds shall be as otherwise described in the Official Statement (as hereinafter defined).

Section 2. Authorization for the Bonds; Purpose of Issue . T he Commission has the authority to issue the Bonds under Sections 9.109 of the Charter (the “ Charter”) of the City and County of San Francisco (the “ City”), and pursuant to Ordinance No. 174-20 of the Board of Supervisors of the City (the “Board of Supervisors”) passed by two-thirds vote on September 29, -3-
3771174.5 046549 AGMT
2020 (the “Ordinance”), and Resolution No. 23-[____], adopted by the Commission on [June 13], 2023 (the “Commission Resolution”).

Proceeds of the Bonds will be used to (i) pay the purchase price of certain outstanding water revenue bonds of the SFPUC tendered for cash, (ii) advance refund certain outstanding water revenue bonds of the SFPUC and (iii) pay the costs of issuance of the Bonds.

Section 3. Public Offering. It shall be a condition to the obligations of the Underwriters to purchase, accept delivery of and pay for the Bonds that the entire principal amount of the Bonds be sold and delivered by the Commission to the Underwriters. Th e Underwriters intend to make a bona fide public offering of all the Bonds, at prices not in excess of the prices as set forth in Schedule I hereto (subject in all respects to the provisions of Section 8 hereof). The Underwriters will provide, consistent with the requirements of the Municipal Securities Rulemaking Board (the “MSRB”) Rule G-32, for the delivery of a copy of the Official Statement to each customer who purchases a Bond during the Underwriting Period (as hereinafter defined). The Underwriters further agree that it will comply with applicable laws and regulations, including without limitation Section 15(c)(2)(12) of the Securities Exchange Act of 1934 (“Rule 15c2-12”) and MSRB Rule G-17, in connection with the offering and sale of the Bonds. S ubsequent to the initial public offering, the public offering prices of the Bonds may change as determined by the Underwriters to be necessary in connection with the marketing of the Bonds.

Section 4. Delivery of Official Statement. Prior to the date hereof, the Commission has provided to the Underwriters for review a form of the preliminary official statement relating to the Bonds dated [POS Date] (including the cover page and appendices thereto (the “Preliminary Official Statement”), which, as of its date, a representative of the Commission on behalf of the Commission deemed final for purposes of Rule 15c2-12 , except for certain information permitted to be omitted therefrom by Rule 15c2-12. By its acceptance of this offer, the Commission hereby ratifies and consents to the use and distribution by the Underwriters of the Preliminary Official Statement in connection with the public offering and sale of the Bonds, and the Commission has authorized the delivery of a final official statement relating to the Bonds dated the date hereof (both in print or electronic form) which will consist of the Preliminary Official Statement and all information previously permitted to have been omitted by Rule 15c2-12.

The Commission hereby acknowledges that the Preliminary Official Statement has been made available to investors on the internet at Elabra’s website at [__________]. The Commission hereby agrees to deliver or cause to be delivered to the Underwriters within seven (7) Business Days of the date hereof (but in no case later than one (1) Business Day prior to the Closing Date (as defined herein)) and in sufficient time to accompany any orders or confirmations from the Underwriters that request payment from any customers, the final official s tatement (including all information permitted to be omitted by Rule 15c2-12 and any amendments or supplements to such official statement as have been approved by the Commission and the Representative) (the “Official Statement”) in “the designated electronic format” (as defined in Rule G-32 of the MSRB, to enable the Underwriters to comply with the rules of the Securities and Exchange Commission (the “SEC”) and the MSRB. The Commission hereby approves of the use and distribution by the Underwriters of the Official Statement in connection with the offer and sale of the Bonds. At the time of or prior to the Closing Date (as hereinafter de fined), the Representative shall fi le a copy of the Official -4-
3771174.5 046549 AGMT
Statement with the MSRB or its designee (including the MSRB’s Electronic Municipal Market Access system (“EMMA”)) or with any other repository approved from time to time by the SEC (either in addition to or in lieu of the filings referred to above).

The Commission will deliver the Continuing Disclosure Certificate substantially in the form set forth in the Preliminary Official Statement (the “Continuing Disclosure Certificate”) on the Closing Date. The form of the Continuing Discl osure Certificate will also be set forth in the Official Statement.

Section 5. The Closing. At ______ a.m., California time, on [Closing Date] or at such other time or on such other date as the Commission and the Representative may agree (the “Closing Date”), the Commission shall deliver, or cause to be delivered to or for the account of the Underwriters, through the Fast Automated Securities Transfer (“ FAST”) delivery system of The Depository Trust Company ( “DTC”), the Bonds in book- entry eligible form, duly executed and authenticated, and registered in the name of Cede & Co., as nominee of DTC. Concurrently with the delivery of the Bonds to the Representative, the Commission will deliver the documents hereinafter mentioned at the offices of Norton Rose Fulbright US LLP (“ Bond Counsel ”), in San Francisco, California, or another place to be mutually agreed upon by the Commission and the Representative. The Underwriters shall accept such delivery and pay the purchase price for the Bonds set forth in Section 1 by federal funds wire transfer in immediately available funds to the order of the Trustee for the account of the Commission. This payment for, and delivery of, the Bonds, together with the delivery of the aforementioned documents, is herein called the “Closing.” The Representative shall order CUSIP identification numbers and the Commission shall cause such CUSIP identification numbers to be printed on the Bonds; provided, that neither the failure to print such number on any Bond nor any error with r espect thereto shall constitute cause for a failure or refusal by the Underwriters to accept the Bonds.

Section 6. Representations, Warranties, and Agreements of the Commission . The Commission represents, warrants and agrees with the Underwriters as follows:
(a) Due Organization, Existence and Authority . The Commission is a duly constituted public commission of the City and County of San Francisco duly organized and validly existing pursuant to its Charter and the Constitution and la ws of the State of California (the “State”), with full authority to: (i) adopt the Commission Resolution; (ii) execute and deliver the Master Indenture, the Forty-Fifth Supplemental Indenture, the Forty-Sixth Supplemental Indenture, the Escrow Agreement, dated as of [ June 1, 2023] (the “Escrow Agreement”), by and between the Commission and U.S. Bank Trust Company, National Association, as escrow agent (the “Escrow Agent”) , the Continuing Disclosure Certificate and this Purchase Contract; (iii) approve the Official Statement and authorize its distribution by the Underwriters; and (iv) sell and deliver the Bonds to the Underwriters as provided herein. All approvals and consents which are required for the due authorization of, which would constitute a condition precedent to, or the absence of which would materially adversely affect the due performance by the Commission of, its respective obligations under the Bonds, this Purchase Contract, the Escrow Agreement and the Indenture have been duly obtained or when required for future performance are expected to be obtained, except for such approvals, consents and orders as may be required under -5-
3771174.5 046549 AGMT
the Blue Sky or securities laws of any state in connection with the offering and sale of the Bonds.
(b) Accuracy and Completeness of the Preliminary Official Statement and Official Statement. The information in the Preliminary Official Statement, as of its date was and as of the date hereof is, and such information in the Official Statement, as of its date and at all times subsequent thereto up to and including the date of the Closing, will be, true and correct in all material respects, contains and will contain no misstatement of any material fact, and did not and will not omit any statement and information that is necessary to make the statements and information contained therein, in the light of the circumstances under which such statements were made, not misleading in any material respect, excluding in each case any information contained in the Preliminary Official Statement and the Official Statement relating to (i) the offering prices, interest rates, selling compensation, aggregate principal amount, principal amount per maturity, delivery dates, or other terms of the Bonds depending on such matters, (ii) DTC and the book- entry only system, (iii) any CUSIP numbers and (iv) information provided by the Underwriters, or bond insurers, if any, for inclusion in the Preliminary Official Statement or Official Statement, including without limitation information regarding the prices and yields of the Bonds and under the caption “UNDERWRITING.”
(c) Amendment of Official Statement. If, at any time pr ior to the End of the Underwriting Period (as defined below), an event occurs or facts or conditions become known of which the Commission has knowledge, which in the reasonable opinion of Orrick, Herrington & Sutcliffe LLP (“Disclosure Counsel”) or the City Attorney might or would cause the information in the Official Statement, as then supplemented or amended, to contain any untrue statement of a material fact or to omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, the Commission will notify the Representative, and if in the reasonable opinion of the Representative or the Commission, such event, fact or condition requires the preparation and publication of a supplement or amendment to the Official Statement, the Commission will amend or supplement the Official Statement in a form and in a manner reasonably approved by the Representative and the Commission, provided all expenses incurred in connection with preparing an amendment or supplement to the Official Statement will be paid by the Commission. As used herein and for the purposes of the foregoing, the term “End of the Underwriting Period” for the Bonds shall refer to the Closing, unless the Commission shall have been notified in writing to the contrary by the Representative on or prior to the Closing, but in any event not later than the date twenty- five (25) days following the Closing. For the purposes of this subsection, the Commission will furnish such information as the Representative may from time to time reasonably request in writing prior to the End of the Underwriting Period. (d) No Breach or Default. The Commission is not in breach of or default under any applicable constitutional provision, law or administrative regulation of the State or the United States, or any agency or department of either, or of any applicable judgment or decree or any loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the Commission is a party or to which the Commission or any of its -6-
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properties or other assets is otherwise subject, and no event has occurred and is continuing which, with the passage of time or the giving of notice, or both, would constitute a default or event of default under any such instrument, which breach or default in any such case, would have a material and adverse effect upon the business operations, properties or financial condition of the Commission or the issuance of the Bonds. As of the time of acceptance hereof and as of the Closing Date and except as otherwise disclosed in the Official Statement, neither the execution nor the delivery by the Commission of the Indenture, the Escrow Agreement, the C ontinuing Disclosure Certificate or this Purchase Contract, the adoption of the Commission Resolution, or the compliance by the Commission with such documents or authorizations, conflicts with or constitutes a material breach of, or default under, any applicable law or administrative regulation of the State or the United States, or any other statute or administrative rule or regulation, judgment, decree, order, license, permit, agreement or instrument to which the Commission is subject, which breach, default or conflict would have a material adverse effect on the ability of the Commission to pay the Bonds or perform its obligations under the Indenture, the Escrow Agreement, the Continuing Disclosure Certificate or this Purchase Contract. (e) No Other Bond I ssues or Debt . Other than the New Money Bonds and commercial paper notes, or as disclosed in the Official Statement, between the time of acceptance hereof and the Closing Date, the Commission will not, without prior written notice to the Representative, issue any bonds or securities or incur any other indebtedness secured by the Revenues.
(f) No Litigation. As of the date hereof and as of the Closing Date, and except as disclosed in the Official Statement, there is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, regulatory agency, public boa rd or body, pending or, to the knowledge of the Commission, threatened against the Commission: (i) affecting the existence of the Commission or the titles of its officers to their respective offices; (ii) seeking to restrain or to enjoin the sale or delivery of the Bonds or the application of the proceeds therefrom in accordance with the Indenture; (iii) in any way contesting or affecting the validity or enforceability of the Bonds, the Indenture, the Escrow Agreement, the Continuing Disclosure Certificate, this Purchase Contract or any action of the Commission authorizing the issuance, execution or delivery thereof; (iv) in any way contesting the completeness or accuracy of the Official Statement or any amendment or supplement thereto; or (v) contesting the powers of the Commission with respect to the Bonds or any action of the Commission authorizing the issuance, execution or delivery thereof, nor to the knowledge of the Commission, as evidenced by the representative of the Commission signing this Purchase Contract, is there any basis therefor. As of the date hereof and as of the Closing Date, and except as disclosed in the Official Statement, there is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, regulatory agency, public board or body, pending or, to the knowledge of the Commission, threatened against the Commission in which a final adverse decision would materially and adversely affect the operations of the Water Enterprise (as defined in the Indenture), Revenues or the consummation of the transactions contemplated by this Purchase Contract or contesting in any way the completeness, accuracy or fairness of the Official Statement. The Commission shall advise the -7-
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Representative promptly of the institution of any proceedings known to it by any governmental agency prohibiting or otherwise affecting the use of the Preliminary Official Statement or the Official Statement in connection with the offering, sale or distribution of the Bonds.
(g) Further Cooperation; Blue Sky . The Commission will furnish such information, execute such instruments and take such other action in cooperation with the Underwriters as the Representative may reasonably request in order to qualify the Bonds for offer and sale under the Blue Sky or other securities laws and regulations of such states and other jurisdictions of the United States as the Representative may designate; provided, however, that the Commission will not be required to execute a special or general consent to service of process or qualify as a foreign corporation in connection with any such qualification in any jurisdiction.
(h) Continuing Disclosure. Based on a review of its previous undertakings and except as described in the Preliminary Official Statement and the Official Statement, [during the past five years, the Commission has complied in all material respects with its prior continuing disclosure undertakings under Rule 15c2-12.] (i) Valid and Binding Obligations . This Purchase Contract, the Escrow Agreement, the Forty-Fifth Supplemental Indenture, the Forty -Sixth Supplemental Indenture and the Continuing Disclosure Certificate, when executed and delivered by the other parties thereto, will have been duly authorized, executed and delivered and will constitute legal, valid and binding obligations of the Commission (except to the extent that such enforceability may be limited by bankruptcy, insolvency, reorganization, receivership, arrangement, fraudulent conveyance, moratorium and similar la w affecting creditors rights generally, general principals of equity, the exercise of judicial discretion in appropriate cases, and to the limitations on remedies against city and counties in California). The Bonds, when issued, delivered and paid for as provided herein and in the Indenture, will have been duly authorized, executed and issued and will constitute legal, valid and binding limited obligations of the Commission entitled to the benefits of the Indenture.
(j) Financial Statements. The financial statements of the Commission for the years ended June 30, 2022 and June 30, 2021 fairly represent the receipts, expenditures, assets, liabilities and cash balances of such amounts and, insofar as presented, other funds of the Commission as of the dates and for the periods therein set forth. Except as disclosed in the Official Statement or otherwise disclosed in writing to the Representative, there has not been any materially adverse change in the financial condition of the Commission or in its operations since the date of such financial statements and there has been no occurrence, circumstance or combination thereof which is reasonably expected to result in any such materially adverse change. The financial statements of the Commission are public documents and the Commission has not requested nor did the Commission obtain permission from KPMG LLP, independent certified public accountants, to include the financial statements of the Commission for the years ended June 30, 2022 and June 30, 2021 in the Preliminary Official Statement or the Official Statement. -8-
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Section 7. Representations, Warranties and Agreements of the Underwriters. The Underwriters represent, warrant and agree with the Commission that:
(a) The Representative has been duly authorized to enter into this Purchase Contract.
(b) The Underwriters shall comply with the San Francisco Business Tax Ordinance and shall, if not otherwise exempt from such ordinance, provide to the Commission a Business Tax Registration Certificate on or prior to the date hereof. (c) The Underwriters shall comply with all SEC and MSRB rules applicable to the offering, sale and delivery of the Bonds to ultimate purchasers. (d) The Underwriters shall comply with the Commission’s policy and practice that the Commission shall not pay, and the Underwriters shall not pass through to the Commission, any fees that are assessed on the Underwriters as part of the Governmental Accounting Standards Board fee, as well as the MSRB Underwriting and Transaction Assessment, the SIFMA Municipal Assessment or any other industry related fees that are required to be paid solely by the Underwriters.

Section 8.

Establishment of “Issue Price” of Bonds.
(a) The Representative, on behalf of the Underwriters, agrees to assist the Commission in establishing the “issue price” of the Bonds and shall execute and deliver to the Commission on or before the Closing Date an “issue price” or similar certificate, together with supporting pricing wires or equivalent communications, substantially in the form attached hereto as Appendix C, with such modifications as may be appropriate or necessary, in the reasonable judgment of the Representative, the Commission and Bond Counsel, to accurately reflect, as applicable, the sales price or prices or the initial offering price or prices to the public of the Bonds. All actions to be taken by the Commission under this Section 8 to establish the issue price of the Bonds may be taken on behalf of the Commission by the Commission’s Co- Municipal Advisors identified herein and any notice or report to be provided to the Commission may be provided to the Commission’s Co-Municipal Advisors. (b) With respect to Bonds of those maturities as to which at least 10% of the Bonds of the maturity has been sold to the public (defined in subsection (f) below) at a single price (the “10% test”), based on reporting by the Representative to the Commission on the date hereof and prior to the execution of this Purchase Contract, which maturities are indicated in Schedule I attached hereto as having satisfied the 10% test (the “10% Test Maturities”), the Commission will treat the first price at which 10% of each such maturity of the Bonds was sold to the public as the issue price of that maturity. With respect to Bonds of those maturities as to which the 10% test has not been satisfied, based on reporting by the Representative to the Commission on the date hereof and prior to the execution of this Purchase Contract, which maturities are indicated in Schedule I attached hereto as being subject to the “hold-the-offering- price rule,” defined below (the “Hold-the-Offering-Price Maturities”), the Representative and the Commission agree that the rules in paragraph (c) below shall apply. For purposes of this section, for Bonds maturing on the same date but having different interest rates, each separate -9-
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CUSIP number for such Bonds is subject to the 10% test or subsection (c) below, as the case may be, as if such separate CUSIP number were a separate maturity. (c) With respect to the Hold -the-Offering-Price Maturities, the Representative confirms that the Underwriters have offered the Bonds to the public on or before the date of this Purchase Contract at the offering price or prices (the “initial offering price”), or at the corresponding yield or yields, set forth in Schedule I attached hereto, except as otherwise set forth therein. Schedule I also sets forth, as of the date of this Purchase Contract, the maturities, if any, of the Bonds for which the 10% test has not been satisfied and for which the Commission and the Representative, on behalf of the Underwriters, agrees that the restrictions set forth in the next sentence shall apply (the “hold-the-offering-price rule”). So long as the hold-the-offering- price rule remains applicable to any maturity of the Bonds, the Underwriters will neither offer nor sell unsold Bonds of that maturity to any person at a price that is higher than the initial offering price to the public during the period starting on the sale date and ending on the earlier of the following:
(i) the close of the fifth (5
th) business day after the sale date; or
(ii) the date on which the Underwriters have sold at least 10% of that maturity of the Bonds to the public at a price that is no higher than the initial offering price to the public.
(d) The Commission acknowledges that, in making the representations set forth in this subsection (d), the Representative will rely on (i) the agreement of each Underwriter to comply with the requirements for establishi ng issue price of the Bonds, including, but not limited to, its agreement to comply with the hold -the-offering-price rule, if applicable to the Bonds, as set forth in an agreement among underwriters and the related pricing wires, (ii) in the event a selling group has been created in connection with the initial sale of the Bonds to the public, the agreement of each dealer who is a member of the selling group to comply with the requirements for establishing issue price of the Bonds, including, but not limited to, its agreement to comply with the hold- the-offering-price rule, if applicable to the Bonds, as set forth in a selling group agreement and the related pricing wires, and (iii) in the event that an Underwriter is a party to a retail or other third-party distribution agreement that was employed in connection with the initial sale of the Bonds to the public, the agreement of each broker- dealer that is a party to such agreement to comply with the requirements for establishing issue price of the Bonds, including, but not limited to, its agreement to comply with the hold- the- offering-price rule, as set forth in the retail or other third-party distribution agreement and the related pricing wires. The Commission further acknowledges that each Underwriter shall be solely liable for its failure to comply with its agreement regarding the requirement for establishing issue price of the Bonds, including, but not limited to, its agreement to comply with the hold-the-offering-price rule, if applicable to the Bonds, and t hat no Underwriter shall be liable for the failure of any other Underwriter, or of any dealer who is a member of a selling group, or of any broker -dealer that is a party to a retail or other third-party distribution agreement, to comply with its corresponding agreement to comply with the requirements for establishing issue price of the Bonds, including, but not limited to, its agreement to comply with the hold-the-offering-price rule, if applicable to the Bonds. (e) The Representative confirms that:
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(i) any agreement among underwriters, any selling group agreement and each retail or other third-party distribution agreement (to which the Representative is a party) relating to the initial sale of the Bonds to the public, together with the related pricing wires, contains or will contain language obligating each Underwriter, each dealer who is a member of the selling group and each broker-dealer that is a party to such retail or other third- party distribution agreement, as applicable:
(A) to promptly notify the Representative of any sales of Bonds that, to its knowledge, are made to a purchaser who is a related party to an underwriter participating in the initial sale of the Bonds to the public (each such term being used as defined below); and (B) to acknowledge that, unless otherwise advised by the Underwriter, dealer or broker-dealer, the Representative shall assume that each order submitted by the Underwriter, dealer or broker-dealer is a sale to the public.
(ii) any agreement among underwriters and any selling group agreement relating to the initial sale of the Bonds to the public, together with the related pricing wires, contains or will contain language obligating each Underwriter or dealer that is a party to a retail or other third-party distribution agreement to be employed in connection with the initial sale of the Bonds to the public to require each broker-dealer that is a party to such retail or other third-party distribution agreement to comply with the hold-the-offering-price rule, if applicable, in each case if and for so long as directed by the Representative or the Underwriter and as set forth in the related pricing wires. (f) The Underwriters acknowledge that sales of any Bonds to any person that is a related party to an underwriter participating in the initial sale of the Bonds to the public (each such term being used as defined below) shall not constitute sales to the public for purposes of this subsection (f). Further, for purposes of this subsection (f):
(i) “public” means any person other than an underwriter or a related party to an underwriter,
(ii) “underwriter” means (A) any person that agrees pursuant to a written contract with the Commission (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the public and (B) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (A) to participate in the initial sale of the Bonds to the public (including a member of a selling group or a party to a retail or other third- party distribution agreement participating in the initial sale of the Bonds to the public),
(iii) a purchaser of any of the Bonds is a “related party” to an underwriter if the underwriter and the purchaser are subject, directly or indirectly, to (i) more than 50% common ownership of the voting power or the total value of their stock, if both entities are corporations (including direct -11-
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ownership by one corporation of another), (ii) more than 50% common ownership of their capital interests or profits interests, if both entities are partnerships (including direct ownership by one partnership of another), or (iii) more than 50% common ownership of the value of the outstanding stock of the corporation or the capital interests or profit interests of the partnership, as applicable, if one entity is a corporation and the other entity is a partnership (including direct ownership of the applicable stock or interests by one entity of the other), and
(iv) “sale date” means the date of execution of this Purcha se Contract by all parties.

Section 9. Closing Conditions. The Underwriters have authorized the Representative to enter into this Purchase Contract in reliance upon the representations, warranties and agreements herein and the performance by the Commission of its obligations hereunder, both as of the date hereof and as of the Closing Date. The obligations of the Underwriters under this Purchase Contract are and shall be subject to the following conditions:
(a) Bring-Down Representation. The representat ions and warranties of the Commission contained herein shall be true, accurate and correct in all material respects at the date hereof, and on the Closing Date, as if made on the Closing Date. (b) Executed Documents and Performance Thereunder . At the time of the Closing: (i) the Indenture, this Purchase Contract, the Escrow Agreement and the Continuing Disclosure Certificate shall be in full force and effect, and shall not have been amended, modified or supplemented except with the consent of the Representative (which consent will not be unreasonably withheld); and (ii) the Commission shall perform or have performed all of its obligations required under or specified in this Purchase Contract, the Escrow Agreement, the Indenture and the Continuing Disclosure Certificate to be performed prior to the Closing.
(c) No Default. At the time of the Closing, no default shall have occurred or be existing under the Indenture or this Purchase Contract. (d) Termination Events . The Representative may terminate this Purchase Contract by notification in writing to the Commission from the Representative, if, at any time on or prior to the Closing, any of the following occurs and, as a result of the occurrence of such an event, the marketability of the Bonds or the market price thereof, or the ability of the Underwriters to enforce contracts for the sale, at the contemplated offering prices, of the Bonds, in the reasonable opinion of the Representative, after consultation with the Commission, would be materially adversely affected:
(i) any event shall occur which makes untrue any statement or results in an omission to state a material fact necessary to make the statements in the Official Statement, in the light of the circumstances under which they were made, not misleading and the Commission fails to amend or supplement the Official Statement pursuant to Section 6(c) hereof or the effect of the amendment or -12-
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supplement, in the reasonable judgment of the Representative, would material ly adversely affect the market for the Bonds, at the contemplated offering prices (or yields) by the Underwriters of the Bonds; or
(ii) an amendment to the Constitution of the United States or the Constitution of the State or legislation in or by the Congress of the United States or the legislature of the State, or the amendment of legislation pending as of the date of this Purchase Contract in the Congress of the United States, or the favorable reporting for passage of legislation to either House of the Congress of the United States by a Committee of such House to which such legislation has been referred for consideration, or any decision of any federal or State court or any ruling or regulation (final, temporary or proposed) or official statement on behal f of the United States Treasury Department, the Internal Revenue Service or other federal or State authority or the occurrence of any other comparable legislative or regulatory event affecting the federal or State tax status of the interest on the Bonds or bonds or obligations of the general character of the Bonds; provided, that the occurrence of any such event shall not constitute a termination event hereunder if the prospect of such constitutional, legislative, regulatory or judicial action or enactment shall have been publicly known on the date hereof; or (iii) any legislation, ordinance, rule or regulation shall be introduced in, or be enacted by any governmental body, department or agency of the State, or a decision by any court of competent jurisdiction within the State shall be rendered; or
(iv) a stop order, ruling, regulation or official statement by, or on behalf of, the Securities and Exchange Commission or any other governmental agency having jurisdiction of the subject matter shall be issued or made to the effect that the issuance, offering or sale of obligations of the general character of the Bonds, or the issuance, offering or sale of the Bonds, including all underlying obligations, as contemplated hereby or by the Official Statement, is in violation or would be in violation of any provision of the federal securities laws, including the Securities Act of 1933, as amended and as then in effect, or that the Indenture need be qualified under the Trust Indenture Act of 1939, as amended and as then in effect; or
(v) legislation shall be enacted by the Congress of the United States, or a decision by a court of the United States shall be rendered, to the effect that obligations of the general character of the Bonds, or the Bonds, are not exempt from registration under the Securities Act of 1933, as amended and as then in effect, or the Securities Exchange Act of 1934, as amended and as then in effect, or that the Indenture is not exempt from qualification under the Trust Indenture Act of 1939, as amended and as then in effect; or
(vi) there shall have occurred a general suspension of trading or additional material restrictions not in force as of the date hereof shall have been -13-
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imposed upon trading in the United States in securities generally by any governmental authority or by any national securities exchange; or (vii) a general banking moratorium shall have been declared by federal, State or State of New York authorities or a disruption in securities settlement, payment or clearance services has occurred; or
(viii) the ratings on the Bonds or any other debt obligations secured by Revenues of the Water Enterprise shall have been downgraded or withdrawn or the subject of an official notice as to a possible downgrading (such as being placed on “credit watch” or “negative outlook”) subsequent to the date of this Purchase Contract by one of the rating agencies rating the Bonds; or (ix) there shall have occurred any outbreak or escalation of hostilities, declaration by the United States of a national or international emergency or war or other calamity or crisis (or any escalation thereof).

The termination of this Purchase Contract pursuant to this Section 9(d) by the Underwriters with respect to the Bonds shall not prohibit the Commission from selling such Bonds to any other underwriter.
(e) Closing Documents. At or prior to the Closing, the Representative shall receive with respect to the Bonds (unless the context otherwise indicates) the following documents, in each case satisfactory in form and substance to the Representative:
(1) Approving Authorizations. Certified copies of the Ordinance and the Commission Resolution.
(2) Bond Documents. An executed copy of the Master Indenture and executed originals of the Forty -Fifth Supplemental Indenture , the Forty -Sixth Supplemental Indenture, the Escrow Agreement, the Continuing Disclosure Certificate and this Purchase Contract.
(3) Final Opinion. An approving opinion of Bond Counsel, dated the Closing Date, and substantially in the form attached to the Official Statement, and a letter of such counsel addressed to the Representative to the effect that such opinion may be relied upon by the Underwriters to the same extent as if it had been addressed to them.
(4) Supplemental Opinion. A supplemental opinion or opinions of Bond Counsel addressed to the Commission and the Representative, dated the Closing Date, to the following effect:
(i) The statements contained in the Official Statement under the captions “T HE 2023CD BONDS,” “S ECURITY FOR THE BONDS,” “T AX MATTERS,” APPENDIX A—“SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE,” and APPENDIX D—“PROPOSED FORM OF OPINION OF BOND -14-
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COUNSEL,” insofar as such statements purport to summarize certain provisions of the Bonds, the Indenture, and the opinion of Bond Counsel are accurate in all material respects.
(ii) The Bonds are not subject to the registration requirements of the Securities Act of 1933, as amended, and the Indenture is exempt from qualification under the Trust Indenture Act of 1939, as amended. (iii) This Purchase Contract has been duly executed and delivered by the Commission and constitutes the valid and binding agreement of the Commission, enforceable in accordance with its terms, except as enforcement thereof may be limited by bankruptcy, insolvency, reorganization, arrangement, fraudulent conveyance, moratorium or other similar laws affecting enforcement of creditors’ rights, by the application of equitable principles if equitable remedies are sought and limitations on the enforcement of legal remedies against public agencies in the State. (5) Defeasance Opinion. A defeasance opinion of Bond Counsel with respect to the Refunded Bonds.
(6) Disclosure Counsel Opinion as to Official Statement. An opinion of Orrick, Herrington & Sutcliffe LLP, as Disclosure Counsel to the Commission, addressed to the Commission and the Underwriters, dated the Closing Date, to the effect th at, while such counsel is not passing upon, and does not assume any responsibility for, the accuracy, completeness or fairness of any of the statements contained in the Preliminary Official Statement or the Official Statement, based upon such counsel’s participation in conferences during which the contents of the Preliminary Official Statement and the Official Statement were discussed, no information came to such counsel’s attention which caused such counsel to believe that the Preliminary Official Statement, as of its date, or the Official Statement, as of its date and as of the Closing Date (except for the financial, statistical or economic data or forecasts, numbers, charts, tables, graphs, estimates, projections, assumptions or expressions of opinion, CUSIP numbers, any information regarding DTC and its book- entry system, and any information contained in Appendice s included therein (other than Appendix E), and any information incorporated by reference therein, as to which no opinion or view need be expressed) contained any untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading.
(7) Certificate of the Commission . A certificate of the Commission dated the Closing Date, signed on behalf of the Commission by an authorized officer of the Commission, to the effect that:
(i) The representations and warranties of the Commission contained herein are true and correct in all material respects on and as of the Closing Date as if made on the Closing Date.
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(ii) No event affecting the Commission has occurred since the date of the Official Statement which has not been disclosed therein or in any supplement or amendment thereto which event should be disclosed in the Official Statement in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. (8) Certificate of the Trustee and Escrow Agent. A certificate of U.S.

Bank Trust Company, National Association, as Trustee and Escrow Agent (also referred to herein as “U.S. Bank”), dated the Closing Date, to the effect that:
(i) U.S. Bank is a national banking association organized and existing under the laws of the United States of America and has full power and is qualified to accept and comply with the terms of the Indenture and the Escrow Agreement (together, the “ U.S. Bank Documents ”) and to perform its obligations thereunder and to authenticate the Bonds. (ii) U.S. Bank has accepted the duties and obligations imposed on it by the U.S. Bank Documents.
(iii) No consent, approval, authorization or other action by any governmental or regulatory authority having jurisdiction over U.S. Bank that has not been obtained is or will be required for the consummation by U.S. Bank of the transactions contemplated by the U.S. Bank Documents to be undertaken by the U.S. Bank.
(iv) Compliance with the terms of the U.S. Bank Documents will not conflict with, result in a violation or breach of, or constitute a default under, any loan agreement, indenture, bond, note, resolution or any other agreement or instrument to which U.S. Bank is a party or by which it is bound, or, to the best knowledge of U.S. Bank, aft er reasonable investigation, any law, rule, regulation, order or decree of any court or governmental agency or body having jurisdiction over U.S. Bank or any of its activities or properties (except that no representation, warranty or agreement is made by U .S. Bank with respect to any federal or state securities or Blue Sky laws or regulations).
(v) To the knowledge of the U.S. Bank after due inquiry, there is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court or governmental agency, public board or body served on or threatened against or affecting the existence of U.S. Bank, or in any way contesting or affecting the validity or enforceability of the U.S. Bank Documents or the Bonds, or contesting the powers of U.S. Bank or its authority to enter into and perform its obligations under the U.S. Bank Documents or the Bonds, wherein an unfavorable decision, ruling or finding would adversely affect the validity of the Bonds or the U.S. Bank Documents.
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(9) Opinion of Counsel to the Trustee and Escrow Agent. An opinion of counsel to U.S. Bank addressed to the Commission and the Underwriters, dated the Closing Date, to the effect that:
(i) U.S. Bank is a national banking association with trust powers, duly organized and validly existing and in good standing under the laws of the United States of America, having the legal authority to exercise trust powers in the State.
(ii) U.S. Bank has full legal power and adequate corporate authority to accept the duties and obligations imposed on it by the U.S. Bank Documents and to authenticate the Bonds and the full legal power and authority to own its properties and to carry on its business. (iii) The Bonds have been duly authenticated by U.S. Bank. (iv) No consent, approval, authorization or order of any court, regulatory authority or governmental body is required for the valid authorization, execution and delivery of the U.S. Bank Documents and the authentication of the Bonds or the consummation by the U.S. Bank of the transactions contemplated in the U.S. Bank Documents except such as have been obtained and except such as may be required under the state securities or Blue Sky laws in connection with the purchase and distribution of the Bonds by the Underwriters.
(v) U.S. Bank’s acceptance of its duties under the U.S. Bank Documents and the authentication of the Bonds by U.S. Bank and performance by U.S. Bank of its obligations thereunder will not conflict with or result in a breach of any of the terms, conditions or provisions of its Articles of Association or Bylaws or any other agreement or instrument to which U.S. Bank is a party or by which it is bound or any other existing law, regulation, court order or consent decree to which U.S. Bank is subject or constitute a default thereunder.
(vi) There is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, governmental agency, public board or body, pending or threatened against U.S. Bank affecting the existence of U.S. Bank or the titles of its officers to their respective offices or seeking to prohibit, restrain or enjoin the authentication of the Bonds by U.S. Bank, or contesting the powers of U.S. Bank or its authority to perform its obligations under the U.S. Bank or the Bonds.
(10) Tax Certificate.

Tax Certificate of the Commission, dated the Closing
Date, in form satisfactory to Bond Counsel.
(11) California Debt and Investment Advisory Commission Filings .

Copies of the Report of Proposed Debt Issuance and Report of Final Sale required -17-
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to be delivered to the California Debt and Investment Advisory Commission pursuant to Section 53583 of the Government Code and S ection 8855(g) of the Government Code.
(12) Rating Letters for the Bonds. Rat ing letters of Moody’s Investors Service, Inc. (“Moody’s”) and Standard & Poor’s Ratings Services, a Standard & Poor’s Financial Services LLC business ( “S&P”), evidencing that such rating agencies have assigned their municipal bond ratings of “[___]” and “[ ___],” respectively.
(13) Opinion of the City Attorney. An opinion of the City Attorney addressed to the Underwriters, dated the Closing Date, in substant ially the form attached hereto as Appendix B.
(14) Blue Sky Memorandum. A copy of the Blue Sky Memorandum with respect to the Bonds, prepared by Hawkins Delafield & Wood LLP, counsel to the Underwriters (“Underwriters’ Counsel”).
(15) Opinion of the Underwriters’ Counsel. The opinion of Underwriters’ Counsel, dated the Closing Date and addressed to the Underwriters, in form satisfactory to the Underwriters.
(16) Verification Report. A verification report of _____, certified public accountants, as described in the Official Statement.
(17) Additional Documents. Such legal opinions, additional certificates, instruments and other documents as the Representative, Bond Counsel or the City Attorney may reasonably deem necessary to evidence the truth and accuracy as of the time of the Closing of the representations of the Commission and the due performance or satisfaction by the Commission at or prior to such time of all agreements then to be performed and all conditions then to be satisfied by the Commission.

If the Commission shall be unable to satisfy the conditions contained in this Purchase Contract, unless waived by the Representative, or if the obligations of t he Underwriters shall be terminated for any reason permitted by this Purchase Contract, this Purchase Contract shall terminate and the Underwriters and the Commission shall not be under further obligation hereunder, except as further set forth in Section 11 hereof.

Section 10. Good Faith Deposit. To secure the Commission from any loss resulting from the failure of the Underwriters to accept delivery of and pay the purchase price for the Bonds pursuant to the terms of this Purchase Contract, the Underwriters agree to deliver to or to the order of the Commission, concurrently with the execution and delivery of this Purchase Contract, either an official bank check (which may be deposited by the Commission upon receipt) or a federal funds wire transfer in the amount of $[Good Faith Deposit] (the “ Good Faith Deposit”). At the Closing, the Good Faith Deposit will be applied towards and deducted from the aggregate net purchase price for the Bonds as provided in Section 1 of this Purchase Contract. If the -18-
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Underwriters fail to pay the purchase price in full upon tender of the Bonds (other than for a reason permitted under Section 9 hereof), the Commission may retain such Good Faith Deposit as and for liquidated damages for such failure by the Underwriters. In such circumstance, the Underwriters will have no right to recover the Good Faith Deposit or to any allowance or credit therefor.

Retaining the Good Faith Deposit shall constitute the Commission’s sole and exclusive remedy and full liquidated damages for the Underwriters’ failure (other than for a reason expressly set forth herein) to purchase and accept delivery of the Bonds pursuant to the terms of this Purchase Contract and the Underwriters shall be released and discharged from any and all claims for damages by the Commission against the Underwriters related to such failure and any other defaults by Underwriters hereunder. Accordingly, the Underwriters hereby waive any right to claim that the actual damages of the Commission are less than the Good Faith Deposit, and the acceptance of this offer by the Commission shall constitute a waiver of any right the Commission may have to additional damages from the Underwriters. The Underwriters and the Commission hereby acknowledge and agree that the amount fixed pursuant to this Section for liquidated damages does not constitute a penalty and is a reasonable estimate of the damages that the Commission would sustain in the event of the Underwriter’s failure to purchase and to accept delivery of the Bonds on the Closing Date pursuant to the terms of this Purchase Contract. Said amount is agreed upon and fixed as liquidated damages because of the difficulty of ascertaining as of the date hereof the actual amount of damages that would be sustained in such event. If the Commission fails to deliver the Bonds on the Closing Date pursuant to this Purchase Contract, or if the conditions to the obligations of the Underwriters to purchase, accept delivery of and pay for the Bonds as set forth in this Purchase Contract shall not be satisfied (unless waived in writing by the Representative pursuant to this Purchase Contract), or if this Purchase Contract is terminated for a reason set forth in Section 9 hereof, the Commission shall promptly return or cause the return of the Good Faith Deposit to the Representative. Upon such return of the Good Faith Deposit to the Representative, this Purchase Contract shall terminate, and neither party shall have any further obligations hereunder.

Section 11. Expenses.
(a) Commission. The Commission shall pay or cause to be paid (but solely from the proceeds of the Bonds and not otherwise) the expenses incident to the performance of the obligations of the Commission hereunder, including but not limited to: (1) the cost of printing of the Preliminary Official Statement and the final Official Statement in reasonable quantities and all other documents prepared in connection with the transactions contemplated hereby; (2) the fees and disbursements of the Trustee and counsel to the Trustee in connection with the issuance of the Bonds; (3) the fees and disbursements of Bond Counsel and Disclosure Counsel and of Montague DeRose and Associates, LLC and Backstrom McCarley Berry & Co., LLC, as Co -Municipal Advisors to the Commission, and any other experts or consultants retained by the Commission in connection with the transactions contemplated hereby; (4) fees of the verification agent and (5) the costs related to obtaining ratings.

(b) Underwriters. The Commission has agreed to pay the Underwriters’ discount set forth in Section 1 of this Purchase Contract, and inclusive in the expense component of the Underwriter’s discount are expenses incurred or paid for by the Underwriters on behalf of the Commission in connection with the marketing, issuance, and delivery of the Bonds, including, but -19-
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not limited to, advertising expenses, fees and expenses of Underwriters’ Counsel, the costs of any Preliminary and Final Blue Sky Memoranda, CUSIP fees, California Debt and Investment Advisory Commission fees, and transportation, lodging, and meals for the Commission’s employees and representatives.

The Commission and Representative acknowledge that expenses included in the expense component of the Underwriters’ discount are based upon estimates. The Commission and Representative agree that in the event the aggregate estimated expenses exceed the aggregate actual expenses incurred by the Representative in an amount equal to or greater than $1,000 (the “Reimbursement Threshold”), the Representative shall reimburse to the Commission the aggregate amount of expenses equal to or greater than the Reimbursement Threshold. For the avoidance of doubt, the Commission acknowledges and agrees that in the event the aggregate estimated expenses exceed the aggregate actual expenses incurred by the Representative in an amount less than the Reimbursement Threshold, no reimbursement will be made by the Representative. The Commission acknowledges that it has had an opportunity, in consultation with such advisors as it may deem appropriate, if any, to evaluate and consider the fees and expenses being incurred as part of the issuance of the Bonds.

Section 12. City Contracting Requirements . The Underwriters agree to comply with the provisions set forth in Appendix A, attached hereto, which are incorporated herein by this reference.

Section 13. Notices. Any notice or other communication to be given under this Purchase Contract to the Commiss ion, to the Representative or to the Underwriters may be given by delivering the same in writing at the addresses set forth below:

If to the Commission:

Public Utilities Commission of the
City and County of San Francisco
525 Golden Gate Avenue, 13th Floor
San Francisco, California 94102
Attention: Assistant General Manager, Business Services/Chief Financial Officer Telephone: (415) 554-3155
Fax: (415) 554-3161
With a copy to:

City and County of San Francisco
Office of Public Finance
City Hall, Room 338
1 Dr. Carlton B. Goodlett Place
San Francisco, California 94102
Telephone: (415) 554-5956
Fax: (415) 554-4864
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If to the Representative:

Jefferies LLC.
11100 Santa Monica Blvd.

Los Angeles, California 90025
Attention: Simon Wirecki, Managing Director
Telephone: (310) 575-5251

Section 14. Entire Agreement . This Purchase Contract, when accepted by the Commission, shall constitute the entire agreement between the Commission and the Underwriters and is made solely for the benefit of the Commission and the Underwriters (including the successors or assigns of any Underwriters with the consent of the Commission) and no other person shall acquire or have any right hereunder by vir tue hereof. All of the Commission’s representations, covenants and agreements in this Purchase Contract shall remain operative and in full force and effect, regardless of (a) any investigation made by or on behalf of the Underwriters, (b) delivery of and payment for the Bonds hereunder, and (c) any termination of this Purchase Contract.

Section 15. Counterparts . This Purchase Contract may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument. This Purchase Contract may be signed in counterparts, and upon delivery to the other party of such signed Purchase Contract, which delivery may be by facsimile transmission, shall constitute the binding agreement of each party to this Purchase Contract.

Section 16. Mutual Reliance on Representations and Warranties . The Commission hereby acknowledges that the Underwriters, in causing the Purchase Contract to be executed by the Representative and in paying for the Bonds as provided herein, is relying upon the representations of the Commission set forth herein. The Underwr iters hereby acknowledge that the Commission, in executing this Purchase Contract and issuing the Bonds described herein, is relying upon the representations and warranties of the Underwriters set forth herein.

Section 17. Severability. In case any one or more of the provisions contained herein shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision hereof, but this Purchase Contract shall be construed as if such invalid or illegal or unenforceable provision had never been contained herein.

Section 18. State of California Law Governs . The validity, interpretation and performance of this Purchase Contract shall be governed by the laws of the State of California.

This Purchase Contract shall be enforceable in the State of California, and any action arising out of this Purchase Contract shall be filed with and maintained in the City and County of San Francisco Superior Court, San Francisco, California; provided, that the Commission may waive the requirement of venue.
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Section 19. Limited Liability . The obligations and liabilities of the Commission hereunder are limited obligations of the Commission payable solely from Revenues as defined and set forth in the Indenture. None of the Commissioners, the officers or employees of the Commission, or any person executing this Purchase Contract shall be liable personally for the obligations of the Commission hereunder or be subject to any personal liability or accountability by reason of the execution hereof. Neither of the faith and credit nor the taxing power of the State or any political subdivision thereof, including the City, is pledged to the obligations of the Commission hereunder.

Section 20. No Fiduciary or Advisory Role; Arm’s Length Transaction . The Underwriters and the Commission acknowledge and agree that (i) the purchase and sale of the Bonds pursuant to this Purchase Contract is an arm’s -length commercial transaction between Commission, on the one hand, and the Underwriters, on the other hand, (ii) in connection with such transaction, the Underwriters are acting solely as a principal and not as a municipal advisor, a financial advisor, or a fiduciary of the Commission, and may have financial and other interests that differ from those of the Commission, (iii) the Underwriters have not assumed a fiduciary responsibility in favor of the Commission with respect to the offering of the Bonds or the discussions, undertakings and procedures leading thereto (whether or not any Underwriter, or any affiliate of an Underwriter, has provided or is currently providing services or advice to Commission on other matters), (iv) the only obligations the Underwriters have to the Commission with respect to the transaction contemplated hereby expressly are set forth in this Purchase Contract, and (v) the Commission and the Underwriters have consulted with their respective legal, financial and other advisors to the extent they deemed appropriate in connection with the offering of the Bonds. The Underwriters are not acting as a Municipal Advisor to the Commission (as defined in Section 15B of the Exchange Act of 1934, as amended) in connection with the matters contemplated by this Purchase Contract.
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Very truly yours,
JEFFERIES LLC, as Representative

By: ___________________________________
Name: Simon Wirecki
Title: Managing Director
Accepted as of the date first stated above:

PUBLIC UTILITIES COMMISSION OF THE

CITY AND COUNTY OF SAN FRANCISCO
By:_________________________________
Name:

Title:

Approved as to Form:

DAVID CHIU
City Attorney
By:_________________________________
Mark D. Blake, Deputy City Attorney

[Signature Page to Water Revenue Bonds 2023 Series CD
Bond Purchase Contract]

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SCHEDULE I

TO THE PURCHASE CONTRACT

MATURITY SCHEDULE
$[2023C PAR]
2023 SERIES C

Maturity Date
(November 1)
Principal
Amount
Interest
Rate

Price 10% Test
Satisfied
Subject to
Hold-the-
Offering Price
Rule

* Term Bonds; subject to mandatory sinking fund redemption.

C Priced to the par call date of November 1, 20__.

Optional Redemption of 2023C Bonds. The 2023C Bonds maturing on or after November 1, 20__ are subject to redemption prior to their stated maturity, at the option of the Commission , from any source of available funds, as a whole or in part, on any date on or after November 1, 20__, from such maturities or portions of maturities as are determined by the Commission and (except as otherwise provided under the procedures of Securities Depository for the 2023C Bonds) by lot within any one maturity, at a redemption price equal to 100% of the principal amount of the 2023C Bonds to be redeemed, plus accrued interest thereon to the date fixed for redemption, without premium.

Mandatory Sinking Fund Redemption of 2023C Bonds . The 2023C Bonds maturing on November 1, ____ (the “2023C Term Bonds (____)”), are further subject to redemption prior to their stated maturity, and payable from the 2023C Sinking Fund Account, on each November 1 on and after November 1, ____, (except as otherwise provided under the procedures of Securities Depository for the 2023C Bonds) by lot within any such maturity if less than all of the 2023C Term Bonds (____) of such maturity are then being redeemed, upon payment of the principal amount thereof and accrued interest thereon to the date fixed for redemption, without premium.

The 2023C Term Bonds (____) are subject to mandatory redemption on November 1 in each of the years and in the respective principal amounts as follows (such schedule subject to adjustment as directed by the SFPUC in the event of optional redemption of any portion of such 2023C Term Bonds (____) prior to maturity as described above):

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Redemption Date
(November 1) Principal Amount

*
*Maturity.

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MATURITY SCHEDULE
$[2023D PAR]
2023 SERIES D

Maturity Date
(November 1)
Principal
Amount
Interest
Rate

Price
10% Test
Satisfied
Subject to
Hold-the-
Offering Price
Rule

* Term Bonds; subject to mandatory sinking fund redemption.

C Priced to the par call date of November 1, 20__.

Optional Redemption of 2023D Bonds. The 2023D Bonds maturing on or after November 1, 20__ are subject to redemption prior to their stated maturity, at the option of the Commission , from any source of available funds, as a whole or in part, on any date on or after November 1, 20__, from such maturities or portions of maturities as are determined by the Commission and (except as otherwise provided under the procedures of Securities Depository for the 2023D Bonds) by lot within any one maturity, at a redemption price equal to 100% of the principal amount of the 2023D Bonds to be redeemed, plus accrued interest thereon to the date fixed for redemption, without premium.

Mandatory Sinking Fund Redemption of 2023D Bonds . The 2023D Bonds maturing on November 1, ____ (the “2023D Term Bonds (____)”), are further subject to redemption prior to their stated maturity, and payable from the 2023D Sinking Fund Account, on each November 1 on and after November 1, ____, (except as otherwise provided under the procedures of Securitie s Depository for the 2023D Bonds) by lot within any such maturity if less than all of the 2023D Term Bonds (____) of such maturity are then being redeemed, upon payment of the principal amount thereof and accrued interest thereon to the date fixed for redemption, without premium.

The 2023D Term Bonds (____) are subject to mandatory redemption on November 1 in each of the years and in the respective principal amounts as follows (such schedule subject to adjustment as directed by the SFPUC in the event of optional redemption of any portion of such 2023D Term Bonds (____) prior to maturity as described above):

Redemption Date
(November 1) Principal Amount

*
*Maturity.

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APPENDIX A

CITY CONTRACTING PROVISIONS

Each Underwriter shall comply with the following provisions of this Purchase Contract as if set forth in the text thereof. Capitalized terms used but not defined in this exhibit shall have the meanings given in the Purchase Contract.

1. Nondiscrimination; Penalties.

(a) Nondiscrimination in Contracts. Each Underwriter shall comply with the provisions of Chapters 12B and 12C of the San Francisco Administrative Code. Each Underwriter shall incorporate by reference in any subcontracts the provisions of Sections12B.2(a), 12B.2(c)- (k), and 12C.3 of the San Francisco Administrative Code and shall require any subcontractors to comply with such provisions. Each Underwriter is subject to the enforcement and penalty provisions in Chapters 12B and 12C.

(b) Nondiscrimination in the Provision of Employee Benefits. San Francisco Administrative Code 12B.2. Each Underwriter does not as of the date of this Purchase Contract, and will not during the term of this Purchase Contract, in any of its operations in San Francisco, on real property owned by San Francisco, or where work is being performed for the City elsewhere in the United States, discriminate in the provision of employee benefits between employees with domestic partners and employees with spouses and/or between the domestic partners and spouses of such employees, subject to the conditions set forth in San Francisco Administrative Code Section12B.2.

(c) Condition to Contract. As a condition to the Purchase Contract, each Underwriter shall execute the “Chapter 12B Declaration: Nondiscrimination in Contracts and Benefits” form (form HRC-12B-101) with supporting documentation and secure the approval of the form by the San Francisco Human Rights Commission.

2. MacBride Principles —Northern Ireland. The provisions of San Francisco Administrative Code §12F are incorporated by this reference and made part of this Purchase Contract. By entering into this Purchase Contract, each Underwriter confirms that it has read and understood that the City urges companies doing business in Northern Ireland to resolve employment inequities and to abide by the MacBride Principles, and urges San Francisco companies to do business with corporations that abide by the MacBride Principles.

3. Tropical Hardwood and Virgin Redwood Ban. Un der San Francisco Environment Code Section 804(b), the City urges each Underwriter not to import, purchase, obtain, or use for any purpose, any tropical hardwood, tropical hardwood wood product, virgin redwood or virgin redwood wood product.

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4. Alcohol and Drug-Free Workplace. The City reserves the right to deny access to, or require each Underwriter to remove from, City facilities personnel of such Underwriter who the City has reasonable grounds to believe has engaged in alcohol abuse or illegal drug activity which in any way impairs the City’s ability to maintain safe work facilities or to protect the health and well-being of City employees and the general public. The City shall have the right of final approval for the entry or re -entry of any such person previously denied access to, or removed from, City facilities. Illegal drug activity means possessing, furnishing, selling, offering, purchasing, using or being under the influence of illegal drugs or other controlled substances for which the individual lacks a valid prescription. Alcohol abuse means possessing, furnishing, selling, offering, or using alcoholic beverages, or being under the influence of alcohol.

5. Compliance with Americans with Disabilities Act. Each Underwriter shall provide the services specified in the Purchase Contract in a manner that complies with the Americans with Disabilities Act (ADA), including but not limited to Title II’s program access requirements, and all other applicable federal, state and local disability rights legislation.

6. Sunshine Ordinance. Each Underwriter acknowledges that this Purchase Contract and all records related to its formation, such Underwriter’s performance of services provided under the Purchase Contract, and the City’s payment are subject to the California Public Records Act, (California Government Code §6250 et. seq.), and the San Francisco Sunshine Ordinance, (San Francisco Administrative Code Chapter 67). Such records are subject to public inspection and copying unless exempt from disclosure under federal, state or local law.

7. Limitations on Contributions . By executing this Purchase Contract, each Underwriter acknowledges its obligations under section 1.126 of the City’s Campaign and Governmental Conduct Code, which prohibits any person who contracts with, or is seeking a contract with, any department of the City for the rendition of personal services, for the furnishing of any material, supplies or equipment, for the sale or lease of any land or building for a grant, loan or loan guarantee, or for a development agreement, from making any campaign contribution to (1) a City elected official if the contract must be approved by that official, a board on which that official serves, or the board of a state agency on which an appointee of that official serves, (2) a candidate for that City elective office held by such individual, or (3) a committee controlled by such elected official or a candidate for that office, at any time from the submission or a proposal for the contract until the later of either the termination of negotiations for such contract or twelve months after the date the City approves the contract. The prohibition on contributions applies to each prospective party to the contract; each member of each Underwriter’s board of directors; each Underwriter’s chairperson, chief executive officer, chief financial officer and chief operating officer; any person with an ownership interest of more than 10 percent in such Underwriter; any subcontractor listed in the bid or contract; and any committee that is sponsored or controlled by such Underwriter. Each Underwriter certifies that it has informed each such person of the limitation on contributions imposed by Section 1.126 by the time it submitted a proposal for such contract and has provided the names of the persons required to be informed to the City department with whom it is contracting.

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8. Requiring Minimum Compensation for Covered Employees . Each Underwriter shall pay covered employees no less than the minimum compensation required by San Francisco Administrative Code Chapter 12P. Each Underwriter is subject to the enforcement and penalty provisions in Chapter 12P. By entering into this Purchase Contract, each Underwriter certifies that it is in compliance with Chapter 12P.

9. Requiring Health Benefits for Covered Employees. Each Underwriter shall comply with San Francisco Administrative Code Chapter 12Q. Each Underwriter shall choose and perform one of the Health Care Accountability options set forth in San Francisco Administrative Code Chapter 12Q.3. Each Underwriter is subject to the enforcement and penalty provisions in Chapter 12Q.

10. Prohibition on Political Activity with City Funds . In performing the services provided under the Purchase Contract, each Underwriter shall comply with San Francisco Administrative Code Chapter 12G, which prohibits funds appropriated by the City for this Purchase Contract from being expended to participate in, support, or attempt to influence any political campaign for a can didate or for a ballot measure. Each Underwriter is subject to the enforcement and penalty provisions in Chapter 12G.

11. Nondisclosure of Private, Proprietary or Confidential Information. If this Purchase Contract requires the City to disclose “Private Information” to an Underwriter within the meaning of San Francisco Administrative Code Chapter 12M, each Underwriter shall use such information consistent with the restrictions stated in Chapter 12M and in this Purchase Contract and only as necessary in performing the services provided under the Purchase Contract.

Each Underwriter is subject to the enforcement and penalty provisions in Chapter 12M.

In the performance of services provided under the Purchase Contract, each Underwriter may have access to th e City’s proprietary or confidential information, the disclosure of which to third parties may damage the City. If the City discloses proprietary or confidential information to an Underwriter, such information must be held by such Underwriter in confidence and used only in performing the Purchase Contract. Each Underwriter shall exercise the same standard of care to protect such information as a reasonably prudent contractor would use to protect its own proprietary or confidential information.

12. Consideration of Criminal History in Hiring and Employment Decisions . Each Underwriter agrees to comply fully with and be bound by all of the provisions of Chapter 12T, “City Contractor/Subcontractor Consideration of Criminal History in Hiring and Employme nt Decisions,” of the San Francisco Administrative Code (“Chapter 12T”), including the remedies provided, and implementing regulations, as may be amended from time to time. The provisions of Chapter 12T are incorporated by reference and made a part of this Purchase Contract. The text of Chapter 12T is available on the web at http://sfgov.org/olse/fco. A partial listing of some of the Underwriters’ obligations under Chapter 12T is set forth in this Section. Each Underwriter is required to comply with all of the applicable provisions of Chapter 12T, irrespective of the

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listing of obligations in this Section. Capitalized terms used in this Section and not defined in this Purchase Contract shall have the meanings assigned to such terms in Chapter 12T.

The requirements of Chapter 12T shall only apply to an Underwriter’s operations to the extent those operations are in furtherance of the performance of this Purchase Contract, shall apply only to applicants and employees who would be or are performing work in furtherance of this Purchase Contract, and shall apply when the physical location of the employment or prospective employment of an individual is wholly or substantially within the City of San Francisco. Chapter 12T shall not apply when the application in a particular context would conflict with federal or state law or with a requirement of a government agency implementing federal or state law.

13. Submitting False Claims; Monetary Penalties . The full text of San Francisco Administrative Code §§ 21.35, including the enforcement and penalty provisions, is incorporated into this Purchase Contract. Under San Francisco Administrative Code §21.35, any contractor, subcontractor or consultant who submits a false claim shall be liable to the City for the statutory penalties set forth in that section. A contractor, subcontractor or consultant will be deemed to have submitted a false claim to the City if the contractor, subcontractor or consultant:
(a) knowingly presents or causes to be presented to an officer or employee of the City a false claim or request for payment or approval; (b) knowingly makes, uses, or causes to be made or used a false record or statement to get a false claim paid or approved by the City; (c) conspires to defraud the City by getting a false claim allowed or paid by the City; (d) knowingly makes, uses, or causes to be made or used a false record or statement to conceal, avoid, or decrease an obligation to pay or transmit money or property to the City; or (e) is a beneficiary of an inadvertent submission of a false claim to the City, subsequently discovers the falsity of the claim, and fails to disclose the false claim to the City within a reasonable time after discovery of the false claim.

14. Conflict of Interest. By entering into the Purchase Contract, each Underwriter certifies that it does not know of any fact which constitutes a violation of Section 15.103 of the City’s Charter; Article III, Chapter 2 of City’s Campaign and Governmental Conduct Code; Title 9, Chapter 7 of the California Government Code (Section 87100 et seq.), or Title 1, Division 4, Chapter 1, Article 4 of the California Government Code (Section 1090 et seq.), and further agrees promptly to notify the City if it becomes aware of any such fact during the term of this Purchase Contract.

15. Assignment. The services provided under the Purchase Contract to be performed by each Underwriter are personal in character and neither this Purchase Contract nor any duties or obligations may be assigned or delegated by an Underwriter unless first approved by the City by written instrument executed and approved in the same manner as this Purchase Contract. Any purported assignment made in violation of this provision shall be null and void.

16. Food Service Waste Reduction Requirements. Each Underwriter shall comply with the Food Service Waste Reduction Ordinance, as set forth in San Francisco Environment Code Chapter 16, including but not limited to the provided remedies for noncompliance.

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17. Cooperative Drafting. This Purchase Contract has been drafted through a cooperative effort of the City and the Underwriters, and all parties have had an opportunity to have the Purchase Contract reviewed and revised by legal counsel. No party shall be considered the drafter of this Purchase Contract, and no presumption or rule that an ambiguity shall be construed against the party drafting the clause shall apply to the interpretation or enforcement of this Purchase Contract.

18. Sugar-Sweetened Beverage Prohibition. Each Underwriter agrees that it will not sell, provide, or otherwise distribute Sugar -Sweetened Beverages, as defined by San Francisco Administrative Code Chapter 101, as part of its performance of this Purchase Contract.

19. First Source Hiring Program . Each Underwriter must comply with all of the provisions of the First Source Hiring Program, Chapter 83 of the San Francisco Administrative Code, that apply to this Purchase Contract, and each Underwriter is subject to the enforcement and penalty provisions in Chapter 83.

20. Laws Incorporated by Reference. The full text of the laws listed in this Exhibit A, including enforcement and penalty provisions, are incorporated into this Purchase Contract by reference. The full text of the San Francisco Municipal Code provisions incorporated by reference in this Exhibit A are available at www.sfgov.org under “Open Gov.”

21. Prevailing Wages . Services to be performed by the Underwriters under this Agreement may involve the performance of trade work covered by the provisions of Section

6.22(e) of the Administrative Code or Section 21C (collectively, “Covered Services”). The provisions of Section 6.22(e) and 21C of the Administrative Code are incorporated as provisions of this Agreement as if fully set forth herein and will apply to any Covered Services performed by each Underwriter.

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APPENDIX B

FORM OF CITY ATTORNEY OPINION
[Closing Date]
Public Utilities Commission
of the City and County of San Francisco
San Francisco, California
Board of Supervisors
of the City and County of San Francisco
San Francisco, California
RE: $[Aggregate Principal Amount] Public Utilities Commission of the City and County of San Francisco
Water Revenue Bonds, 2023 Series CD
Ladies and Gentlemen:

This office has acted as counsel to the Public Utilities Commission of the City and County of San Francisco (“Commission”) with respect to the issuance of its $[Aggregate Principal Amount] aggregate principal amount of San Francisco Water Revenue Bonds , 2023 Series CD comprised of $[2023C Par] aggregate principal amount of 2023 Sub-Series C Bonds (Refunding) (WSIP) (Green Bonds) and $[2023D Par] aggregate principal amount of 2023 Sub-Series D Bonds (Refunding) (Local Water) (collectively, the “Bonds”). The Bonds are being issued pursuant to the Constitution and the laws of the State of California, the Charter of the City and County of San Francisco (“City”), a Forty -Fifth Supplemental Indenture, dated as of June 1, 2023 (the “Forty- Fifth Supplemental Indenture”) and a Forty-Sixth Supplemental Indenture, dated as of June 1, 2023 (the “Forty-Sixth Supplemental Indenture”), each between the Commission and U.S. Bank Trust Company, National Association, as successor trustee (“Trustee”), supplementing the Amended and Restated Indenture, dated as of August 1, 2002, between the Commission and the Trustee, as successor trustee, as amended and supplemented to date (collectively, the “Indenture”).

All capitalized terms not otherwise defined herein shall have the meanings ascribed to such terms in the Indenture.

In connection therewith, the undersigned has examined such documents, certificates and instruments as the undersigned deemed necessary for the purposes of this opinion, including, but not limited to, the Indenture, the Purchase Contract, dated [_______], 2023 (the “Purchase Contract”), by and between the Commission and Jefferies LLC, as representative of the underwriters named therein, the Escrow Agreement, by and between the Commi ssion and the Trustee, the Continuing Disclosure Certificate of the Commission, as executed and delivered on the date of delivery of the Bonds (“Continuing Disclosure Certificate”), Resolution No. 23-______ of the Commission adopted on [June 13], 2023 (“Commission Resolution”), Ordinance No. 174- 20 of the Board of Supervisors of the City (the “Board of Supervisors”) passed by a two-thirds vote on September 29, 2020; and signed by the Mayor on [______] (“City Ordinance”).

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In reviewing the documents and matters referred to above, the undersigned has not undertaken to verify independently and has assumed the accuracy of the factual matters represented, warranted or certified therein. The undersigned has examined the Charter of the City.

The opinions expressed herein are based on an analysis of existing laws, regulations, rulings and court decisions and cover certain matters not directly addressed by such authorities. Such opinions may be affected by actions taken or omitted or events occurring after the date hereof. We have not undertaken to determine, or to inform any person, whether any such actions are taken or omitted or events do occur or any other matters come to our attention after the date hereof. We disclaim any obligation to update this opinion. We have assumed the genuineness of all documents and signatures presented to us (whether as originals or as copies) and the due and legal execution and delivery thereof by, and validity against, any parties other than the Commission. In addition, we call attention to the fact that the rights and obligations under the Ind enture, the Bonds and the Escrow Agreement and their enforceability may be subject to bankruptcy, insolvency, reorganization, arrangement, fraudulent conveyance, moratorium and other laws r elating to or affecting creditors’ rights, to the application of equitable principles, to the exercise of judicial discretion in appropriate cases and to the limitations on legal remedies against cities and counties in the State of California. We express no opinion with respect to any indemnification, contribution, penalty, choice of law, choice of forum, choice of venue, waiver or severability provisions contained in the foregoing documents.

Based upon and subject to the foregoing, the undersigned is of the opinion that:

1. The Commission is duly organized and validly existing as a commission of the City under and pursuant to the Charter of the City.

2. The Commission Resolution and City Ordinance were duly passed at meetings of the Commission and the Board of Supervisors, respectively. The meetings were called and held pursuant to law, with all public notice required by law and at which a quorum was present and acting throughout. The Commission Resolution and City Ordinance are in full force and effect, as of the date hereof, and have not been modified, amended or rescinded since their approval date.

3. To the best of the undersigned’s knowledge, no action, suit, proceeding, inquiry or investigation, at law or in equity before or by any court, governmental agency, public board or body, is pending or threatened against the Commission to restrain or enjoin the issuance of the Bonds, or in any way contesting the validity of the Indenture, Continuing Disclosure Certificate, the Escrow Agreement, the Purchase Contract, the City Ordinance or the City Resolution.

4. There is no litigation pending, with service of process having been accomplished, questioning the existence of the City or the Commission, or contesting the power of the Commission to fix water rates and charges, or in any way contesting or affecting (i) the proceedings under which the Bonds are to be issued, (ii) the validity of the Bonds or the validity of the Indenture, (iii) the pledge of Revenues by the Commission under the Indenture or (iv) the title to the office of the present members of the Board of Supervisors or the Commission; nor are there suits or claims against the City or the Commission which would materially impair the ability of the Commission to pay principal or interest on the Bonds when due.

5. The Indenture, Continuing Disclosure Certificate , the Escrow Agreement and the Purchase Contract have been duly authorized, executed and delivered by the Commission, and constitute valid and binding agreements of the Commission enforceable in accordance with their respective terms.

6. To the best of the undersigned’s knowledge, except as otherwise disclosed in the Official Statement, neither the execution nor the delivery by the Commission of the Indenture, the

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Escrow Agreement, the Continuing Disclosure Certificate or the Purchase Contract, the adoption of the Commission Resolution, or the compliance by the Commission with such documents or authorizations, conflicts with or constitutes a material breach of, or default under, any applicable law or administrative regulation of the State or the United States, or any other statute or administrative rule or regulation, judgment, decree, order, license, permit, agreement or instrument to which the Commission is subject, which breach, default or conflict would have a material adverse effect on the ability of the Commission to pay the Bonds or perform its obligations under the Indenture, the Escrow Agreement, the Continuing Disclosure Certificate or the Purchase Contract.

This letter is furnished for the benefit of the above -addressed parties, and is not intended to, and shall not, be relied upon by anyone other than the above -addressees. This letter shall not be circulated, quoted or otherwise referred to or relied upon for any other purpose or by any other person. The City Attorney does not undertake any obligation to update this letter. Other than the Commission and the City, no attorney-client relationship has existed or exists between this office and any other party.

Very truly yours,

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3771174.5 046549 AGMT

APPENDIX C

ISSUE PRICE CERTIFICATE
The undersigned, on behalf of Jefferies LLC, on its own behalf and as representative (the “Representative”) of Wells Fargo Bank, N.A., RBC Capital Markets, LLC, Samuel A. Ramirez & Co., Inc., UBS Financial Services, Inc. and U.S. Bancorp Investments, Inc. (together, the “Underwriting Group”), to the extent set forth herein, hereby certifies as set forth below with respect to the sale and issuance of the Public Utilities Commission of the City and County of San Francisco, San Francisco Water Revenue Bonds, 2023 Series CD (collectively, the “Bonds”).

1. Sale of the General Rule Maturities . As of the date of this certificate, for each Maturity of the General Rule Maturities, the first price at which at least 10% of such Maturity was sold to the Public is the respective price listed in Schedule A. The “10% Rule Used” box is checked for each such Maturity in Schedule A.

2. Defined Terms.
(a) General Rule Maturities means those Maturities of the Bonds listed in Schedule A hereto as the “General Rule Maturities.”
(b) Issuer means the Public Utilities Commission of the City and County of San Francisco.
(c) Maturity means Bonds with the same credit and payment terms. Bonds with different maturity dates, or Bonds with the same maturity date but different stated interest rates, are treated as separate maturities.
(d) Public means any person (including an individual, trust, estate, partnership, association, company, or corporation) other than an Underwriter or a related party to an Underwriter. The term “related party” for purposes of this certificate means any two or more persons who have greater than 50 percent common ownership, directly or indirectly. (e) Sale Date means the first day on which there is a binding contract in writing for the sale of a Maturity of the Bonds. The Sale Date of the Bonds is [Pricing Date]. (f) Underwriter means (i) any person that agrees pursuant to a written contract with the Issuer (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the Public, and (ii) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (i) of this paragraph to participate in the initial sale of the Bonds to the Public (including a member of a selling group or a party to a retail distribution agreement participating in the initial sale of the Bonds to the Public).

The representations set forth in this certificate are limited to factual matters only. Nothing in this certificate represents the Representative’s interpretation of any laws, including specifically Sections 103 and 148 of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations thereunder. The undersigned understands that the foregoing information will be relied upon by the Issuer with respect to certain of the representations set forth in the Tax Certificate with

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3771174.5 046549 AGMT
respect to the Bonds and with respect to compliance with the federal income tax rules affecting the Bonds, and by Norton Rose Fulbright US LLP, in connection with rendering their respective opinions that the interest on the Bonds is excluded from gross income for federal income tax purposes, the preparation of the Internal Revenue Service Form 8038-G, and other federal income tax advice that it may give to the Issuer from time to time relating to the Bonds. The representations set forth herein are not necessarily based on personal knowledge and, in certain cases, the undersigned is relying on representations made by the other members of the Underwriting Group.

JEFFERIES LLC, as Representative

By: __________________________________
Name:

Title:

Dated: [Closing Date]

3771174.5 046549 AGMT

SCHEDULE A

SALE PRICES OF THE GENERAL RULE MATURITIES
(Attached)

Norton Rose Fulbright US LLP draft of 5/1/23
135319473.3
1 ESCROW AGREEMENT

RELATED TO

REFUNDING AND DEFEASANCE OF CERTAIN

PUBLIC UTILITIES COMMISSION

OF THE CITY AND COUNTY OF SAN FRANCISCO

WATER REVENUE BONDS
THIS ESCROW AGREEMENT, dated as of [June __, 2023] , is 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 TR UST 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 escrow agent hereunder (the “Escrow Agent ”) and as successor trustee with respect to the Refunded Bonds referred to below (the “Trustee”).

WITNESSET H:

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”) to authorize the issuance by the Commission of its revenue bonds or other forms of revenue financing, wh en authorized by ordinance approved by a two- thirds vote of the Board of Supervisors of the City (the “Board ”), for the purpose of reconstructing, replacing, expanding, repairing or improving water facilities under the jurisdiction of the Commission, subject to satisfaction of cer tain conditions; and
WHEREAS, the authority to issue revenue bonds pursuant to Proposition E of 2002 is expressly notwithstanding, and in addition to, the authority granted to the Board under Section 9.107 of the Charter, to provide for the issuance of rev enue bonds of the City upon the assent of a majority of the voters upon any proposition for the issuance of revenue bonds; and WHEREAS, at the duly called and held revenue bond election on November 5, 2002, a majority of voters voting on the measure further approved, under the authority of Charter Section 9.107, Proposition A (“Proposition A of 2002”) which, among other things, authorized the Commission to issue its revenue bonds and/or other forms of revenue financing in a principa l amount not to exceed $1,628,000,000 (such authorized amount being subject to reduction to the extent projects designed and intended in substantial part to improve the reliability of the City’s regional water system are issued by the San Francisco Bay Area Regional Water System Financing Authority) for the purpose of financing the costs of acquisition and construction of improvements to the City’s water system, capitalized interest and all costs and expenses incidental to such improvements, including but n ot limited to engineering, inspection, auditing, legal and fiscal agent fees and costs of issuance; and
WHEREAS, Section 9.109 of the Charter authorizes the Board to provide for the issuance of revenue refunding bonds, for which no voter approval is required, for the purpose of refunding any outstanding revenue bonds of the City provided such refunding bonds are 135319473.3 2
expected to result in net debt service savings to the City on a present value basis, calculated as provided by ordinance; and
WHEREAS, Pursuant to Proposition E of 2002, Proposition A of 2002, or, as applicable, Section 9.109, and various ordinances and resolutions adopted by the Board and the Commission thereunder, the Commission has previously issued, under that certain Amended and Restated Indenture, dated as of August 1, 2002, by and between the Commission and the Trustee, as further amended and supplemented (the “ Indenture”), among other bonds, its: [ (i) San Francisco Water Revenue Bonds, [____] Sub- Series [_] Bonds (the “[____] Bonds ”); (ii) San Francisco Water Revenue Bonds, [____] Sub-Series [_] Bonds (Refunding) (the “[____] Bonds”); (iii) San Francisco Water Revenue Bonds, [____] Sub- Series [_] Bonds (WSIP) (the “[____] Bonds ”); (iv) San Francisco Water Revenue Bonds, [____] Sub- Series [_] Bonds ( Prop. A Reimbursement) (the “ [____] Bonds ”); (v) San Francisco Water Revenue Bonds, [____] Sub- Series [_] Bonds (Refunding) (the “ [____] Bonds”); (vi) San Francisco Water Revenue Bonds, [____] Sub- Series [_] Bonds (WSIP) (Green Bonds) (the “ [____] Bonds ”); (vi) San Francisco Water Revenue Bonds, [___] Sub- Series [_] Bonds ( Non-WSIP) (the “[____] Bonds ”); and (vi) San Francisco Water Revenue Bonds, [___] Sub- Series [_] Bonds (Hetch Hetchy) (the “[____] Bonds”)]; and
WHEREAS, on September 29, 2020 the Bo ard of Supervisors of the City passed Ordinance No. 174-20, by a two- thirds vote, authorizing, among other things, the issuance of water revenue refunding bonds by the Commission, without limitation as to principal amount, subject to satisfaction of certain conditions; and on _______, 2023, the Commission adopted Resolution No. 23-____, authorizing the issuance of water revenue refunding bonds in an aggregate principal amount not exceeding [_______] , each under the authority granted pursuant to Section 9.109 of the Charter;
WHEREAS, under the authority hereinabove mentioned, the Commission has now determined to issue $[_______] aggregate principal amount of its San Francisco Water Revenue Bonds, 2023 Series CD in two sub-series: (i) 2023 Sub- Series C (Refunding) (WSIP) (Green Bonds) in the principal amount of $[_______] (the “2023C Bonds”), to be issued under a Forty - Fifth Supplemental Indenture supplementing the Indenture; and (ii) 2023 Sub- Series D (Refunding) (Local Water) in the principal amount of $[________] (the “2023D Bonds”), to be issued under a Forty-Sixth Supplemental Indenture supplementing the Indenture. The 2023 Series CD Bonds are being issued for the purpose of refunding and defeasing:
i. [_____] principal amount of the [____] Bonds (such portion of the [____] Bonds being refunded, the “[____] Refunded Bonds”);
ii. [_____] principal amount of the [____] Bonds (such portion of the [____] Bonds being refunded, the “[____] Refunded Bonds”);
iii. [_____] principal amount of the [____] Bonds (such portion of the [_ ___] Bonds being refunded, the “[____] Refunded Bonds”);
iv. [_____] principal amount of the [____] Bonds (such portion of the [____] Bonds being refunded, the “[____] Refunded Bonds”);
135319473.3 3
v. [_____] principal amount of the [____] Bonds (such portion of th e [____] Bonds being refunded, the “[____] Refunded Bonds”);
vi. [_____] principal amount of the [____] Bonds (such portion of the [____] Bonds being refunded, the “[____] Refunded Bonds”);
vii. [_____] principal amount of the [____] Bonds (such portion of the [____] Bonds being refunded, the “[____] Refunded Bonds”); and
viii. [_____] principal amount of the [____] Bonds (such portion of the [____] Bonds being refunded, the “ [____] Refunded Bonds ” and, collectively with the [____] Refunded Bonds , the [____] Refunded B onds, the [____] Refunded Bonds, the [____] Refunded Bonds, the [____] Refunded Bonds, the [____] Refunded Bonds and the [____] R efunded Bonds, the “Refunded Bonds ”) all as more specifically shown in Exhibit A attached hereto;]
WHEREAS, by irrevocably deposi ting with the Escrow Agent certain of the proceeds of the 2023 Series CD Bonds, together with certain other available funds relating to the Refunded Bonds, and directing the Escrow Agent to invest such amounts in certain [ federal securities ] satisfying the criteria set forth in Section 10.02 of the Indenture (as further detailed in Exhibit C attached hereto, the “Initial Federal Securities”), the Escrow Agent will have sufficient moneys to pay: (a) the interest becoming due on the Refunded Bonds on each i nterest payment date therefor on and before the respective maturity dates, and redemption dates, as applicable, of such Refunded Bonds, and (b) the principal due at maturity on the Refunded Bonds maturing on [_______], 2023 and to pay the redemption price ( i.e., 100% of the principal amount) of the Refunded Bonds to be redeemed on the respective redemption dates therefor; WHEREAS, the Escrow Agent, in reliance on the verification report prepared by [_____] (the “Verification Report ”), which Verification Rep ort shows that the Initial Federal Securities and un-invested cash in the Escrow Fund (hereinafter defined) are sufficient to provide for the timely payment of the Refunded Bonds, has determined that the Escrow Fund is sufficient for such purpose; and
NOW THEREFORE, in consideration of the mutual covenants and agreements herein contained, the Commission and the Escrow Agent agree as follows:

SECTION 1. Establishment of Escrow Fund. There is hereby created and established with the Escrow Agent a special, segregated and irrevocable escrow fund (the “Escrow Fund”) to be held in the custody of the Escrow Agent in escrow for the benefit of the re gistered owners of the Refunded Bonds, separate and apart from other funds of the Commission. Within the Escrow Fund, the Escrow Agent shall create [_____] separate accounts: (i) one relating exclusively to the [____] Refunded Bonds (the “[____] Escrow Ac count”); (ii) one relating exclusively to the [____] Refunded Bonds (the “ [____] Escrow Account ”); (iii) one relating exclusively t o the [____] Refunded Bonds (the “[____] Escrow Account ”); (iv) one relating exclusively to the [____] Refunded Bonds (the “ [____] Escrow Account ”); (v) one relating exclusively to the [____] Refunded Bonds (the “ [____] Escrow Account ”); (vi) one relatin g exclusively to the [____] Refunded Bonds (the “ [____] Escrow Account ”); (vii) one relating exclusively to the 135319473.3 4
[____] Refunded Bonds (the “[____] Escrow Account”); and (viii) one relating exclusively to the [____] Refunded Bonds (the “[____] Escrow Account”).

SECTION 2. Deposit of Moneys. The Commission hereby irrevocably deposits with the Escrow Agent the amount of $[___________] in the Escrow Fund, representing the sum of $[___________] from the proceeds of the 2023 Series CD Bonds, plus funds transfer s of $[___________] from the Capitalized Interest Account for the [____] Refunded Bonds, $[___________] from the Interest Fund (excluding the foregoing transfer from the Capitalized Interest Account for the [____] Refunded Bonds) , $[___________] from the Principal Fund, $[___________] from the [____] Bond Reserve Account released in connection with the refunding of the Refunded Bonds , $[_ __________] from the [____] Bond Reserve Account released in connection with the refunding of the Refunded Bonds and $[___________] f rom the [____] Bond Reserve Account released in connection with the refunding of the Refunded Bonds.

Such amount shall be deposited and more specifically allocated to the eight accounts within the Escrow Fund as follows:

Escrow
Account Bond Proceeds Principal Fund Interest Fund(9)
[____] Refunded
Bonds
Capitalized
Interest Account
Debt Service
Reserve
Accounts Total
[____] $ (1) $ $ $ (10) $
[____] (2) (11)
[____] (3) (12)
[____] (4) (12)
[____] (5) (12)
[____] (6)
[____] (7)
[____] (8)
Total

_______________
(1) [_________] from [_____] Bonds proceeds and [_________] from [____] Bonds proceeds. (2) From [_____] Bonds proceeds.
(3) From [_____] Bonds proceeds.
(4) From [_____] Bonds proceeds.
(5) From [_____] Bonds proceeds.
(6) From [_____] Bonds proceeds.
(7) From [_____] Bonds proceeds.
(8) From [_____] Bonds proceeds.
(9) Excluding the [____] Refunded Bonds Capitalized Interest Fund Account transfer shown in the table. (10) From [____] Series [____] Debt Service Account.
(11) From [____] Series [____] Debt Service Account.
(12) From [____] Series [____] Debt Service Account.

The moneys in the Escrow Fund (and the [eight] accounts therein) shall be applied solely as provided in this E scrow Ag reement. The Commission has determined in reliance on th e Verification Report that the moneys set forth above are at least equal to an amount sufficient to defease the Refunded Bonds by paying when due the amounts shown i n Exhibit B attached hereto.
135319473.3 5
SECTION 3. Application of Moneys in the Escrow Fund. The Escrow Agent acknowledges receipt of the moneys described in Section 2 in the Escrow Fund and agrees , on [____], 2023, to use $[________] of such moneys to purchase, on behalf of and for the account of the Commission, the Initial Federal Securities, and to hold $[_________] as un-invested cash (such Initial Federal Securities and un-invested cash for each Escrow Account within the Escrow all as more specifically described in Exhibit C) . The Initial Federa l Securities are not subject to redemption and are scheduled to mature on or before the times when they will be required for the payment of the interest on and the redemption price of the applicable Refunded Bonds as shown in Exhibit B.

SECTION 4. Payment of the Refunded Bonds.
(a) Payment of the Refunded Bonds. The moneys on deposit in the Escrow Fund (including moneys from the maturing principal of the Initial Federal Securities (or other Federal Securities hereafter deposited therein in accordance with Section 8) and th e investment income and other earnings thereon) shall be applied by the Escrow Agent as follows:
(i) The Escrow Agent shall apply the amounts on deposit in the [____] Escrow Account to pay (x) the interest on the [____] Refunded Bonds due on
[_____________], and (y) the principal due at maturity on the [____] Refunded Bonds maturing on [_____________], and the redemption price of the remaining [____] Refunded Bonds on [_____________], the redemption date therefor; (ii) The Escrow Agent shall apply the amounts on dep osit in the [____] Escrow Account to pay (x) principal of and interest on the [____] Refunded Bonds becoming due on and prior to [_____________], and ( y) the redemption price (i.e., 100.0% of the principal amount) of the [____] Refunded Bonds on [_____________], the redemption date therefor; (iii) The Escrow Agent shall apply the amounts on deposit in the [____] Escrow Account to pa y (x) principal of and interest on the [____] Refunded Bonds becoming due on and prior to [_____________], and ( y) the redemption price (i.e., 100.0% of the principal amount) of the [____] Refunded Bonds on [_____________], the redemption date therefor; (iv) The Escrow Agent shall apply the amounts on deposit in the [____] Escrow Account to pay (x) principal of and interest on the [____] Refunded Bonds becoming due on and prior to [_____________], and ( y) the redemption price (i.e., 100.0% of the principal amount) of the [____] Refunded Bonds on [_____________], the redemption date therefor; (v) The Escrow Agent shall apply the amounts on deposi t in the [____] Escrow Account to pay (x) principal of and interest on the [____] Refunded Bonds becoming due on and prior to [_____________], and (y) the redemption price (i.e., 100.0% of the principal amount) of the [____] Refunded Bonds on [_____________], the redemption date therefor; 135319473.3 6
(vi) The Escrow Agent shall apply the amounts on deposit in the [____] Escrow Account to pay (x) principal of and interest on the [____] Refunded Bonds becoming due on and prior to [___________], and ( y) the redemption price (i.e., 100.0% of the principal amount) of the [____] Refunded Bonds on [____________], the redemption date therefor;
(vii) The Escr ow Agent shall apply the amounts on deposit in the [____] Escrow Account to pay (x) principal of and interest on the [____] Refunded Bonds becoming due on and prior to [_____________], and ( y) the redemption price (i.e., 100.0% of the principal amount) of the [____] Refunded Bonds on [_____________], the redemption date therefor; and (viii) The Escrow Agent shall apply the amounts on deposit i n the [____] Escrow Account to pay (x) principal of and interest on the [____] Refunded Bonds becoming due on and prior to [_____________], and (y) the redemption price (i.e., 100.0% of the principal amount) of the [____] Refunded Bonds on [_____________], the redemption date therefor; all as shown in the disbursement requirements set forth in Exhibit B. (b) Priority of Payments . The Owners of the Refunded Bonds of each sub - series shall have a lien on, and the Commission hereby irrevocably pledges and grant s a security interest in, the moneys and securities in the Escrow Fund which are allocable and sufficient to repay the Refunded Bonds of such sub- series, in accordance with this Escrow Agreement, until such moneys and such securities are used and applied a s provided in this Escrow Agreement.
(c) Transfer of Excess Funds in Escrow Fund. Any amounts remaining in the Escrow Fund following the redemption of all Refunded Bonds shall be transferred by the Escrow Agent to or at the direction of the Commission.

SECTION 5. Irrevocable Instructions to Provide Notices; Incorporation of Definitions in Indenture; Application of Certain Terms of Indenture.
(a) Irrevocable Instructions to Provide Notice s of Defeasance. The Commission hereby irrevocably instructs the Escrow Agent (as Trus tee for the Refunded Bonds) to provide, within three (3) business days of the date of deposit of amounts pursuant to Section 2 hereof, notices substantially in the forms set forth in Exhibit D attached hereto, that irrevocable deposits have been made with the Escrow Agent and that the Refunded Bonds of the respective sub- series have been deemed to be paid in accordance with the Indenture, (i) by mail to the registered owners of the applicable sub - series of the Refunded Bonds, (ii) by mail to the Securities De positories, (iii) by mail to one or more Information Services and (iv) by electronic means of communication to the Municipal Securities Rulemaking Board (“MSRB”) through the Electronic Municipal Market Access System (referred to as “EMMA”), at www.emma.msrb.org; and (b) Irrevocable Instructions to Provide Notice s of Redemption. The Commission hereby irrevocably instructs the Escrow Agent (as Trustee for the Refunded 135319473.3 7
Bonds) to provide, at least thirty (30) days but not more than sixty (60) days prior to the applicable r edemption date for each sub -series of the Refunded Bonds (other than the [____] Refunded Bonds), a notice substanti ally in the applicable form set forth in Exhibit E attached hereto, of the redemption of the Refunded Bonds designated for redemption on such date (i) by mail to the registered owners of the applicable sub- series of the Refunded Bonds, (ii) by mail to the Securities Depositories, (iii) by mail to one or more Information Services and (iv) by electronic means of communication to the MSR B through EMMA, at www.emma.msrb.org, all in accordance with the Indenture. [The Escrow Agent hereby represents and warrants that pursuant to previous instructions given by the Commission, the Escrow Agent mailed a conditional notice of redemption with respect to the [____] Refunded Bonds on [______], 2023, in accordance with the provisions of the Indenture, and filed such notice with EMMA.] The Escrow Agent hereby confirms that it will take all actions required to be taken by it under the Indenture and t his Escrow Agreement in order to effectuate the defeasance, redemption and payment of the Refunded Bonds as provided herein. (c) Incorporation of Definitions. Capitalized terms used herein and not otherwise defined shall have the meanings ascribed to them in the Indenture. (d) Application of Certain Terms. All of the terms of the Indenture relating to the making of payments of principal, interest and redemption price with respect to the applicable Refunded Bonds and relating to the notices of defeasance and redem ption are incorporated in this Escrow Agreement as if set forth in full herein. The procedures set forth in the Indenture relating to the resignation and removal of the Trustee thereunder are also incorporated in this Escrow Agreement as if set forth in f ull herein and shall be the procedures to be followed with respect to any resignation or removal of the Escrow Agent hereunder.

SECTION 6. Performance of Duties . The Escrow Agent agrees to perform only the duties set forth herein and shall have no responsibility to ta ke any action or omit to take any action not set forth herein.

SECTION 7. Escrow Agent’s Authority to Make Investments . Except as provided in Section 8 of this Escrow Agreement, the Escrow Agent shall have no power or duty to invest any funds held under this Escrow Agreement or to sell, transfer or otherwise dispose of the moneys held hereunder.

SECTION 8. Investment of Funds in the Escrow Fund.
(a) Except as otherwise provided in Section 2 hereof, amounts held in the Escrow Fund under this Escrow Agreement may be invested only i n United States treasury notes, bonds, bills or certificates of indebtedness, or obligations for which the faith and credit of the United States of America are pledged for the payment of principal and interest (including obligations issued or held in book- entry form and securities which represent an undivided interest in such direct obligations); any securities now or hereafte r authorized, both the principal of and interest on which is guaranteed directly by the full 135319473.3 8
faith and credit of the United States of America, and including interest strips held in book-entry form by the Federal Reserve Bank of New York of bonds issued by the Resolution Funding Corporation; bonds, debentures, notes or other evidence of indebtedness issued or guaranteed by any of the f ollowing federal agencies and provided such obligations are backed by the full faith and credit of the United States of Ameri ca (stripped securities are only permitted if they have been stripped by the agency itself):
(i) direct obligations or fully guarante ed certificates of beneficial ownership of the U.S.

Export-Import Bank, (ii) certificates of beneficial ownership of the Ru ral Economic Community Development Administration (formerly the Farmers Home Administration), (iii) obligations of the Federal Fina ncing Bank, (iv) debentures of the Federal Housing Administration; (v) participation certificates of the General Services Adm inistration, (vi) guaranteed Title XI financings of the U.S. Maritime Administration, and (vii) project notes, local authority bonds, new communities debentures and U.S. public housing notes and bonds of the U.S. Department of Housing and Urban Development. Those obligations described in the preceding sentence are herein referred to as “ Federal Securities.”
(b) At the direction of the C ommission, the Escrow Agent shall redeem, transfer or exchange the Initial Federal Securities or any Federal Securities which are then held as an investment of the Escrow Fund and reinvest the proceeds thereof, together with the other moneys held in such Escrow Fund in Federal Securities, and may release to the Commission the excess amount then resulting in the Escrow Fund provided that the Commission delivers to the Escrow Agent the following:
(i) an opinion of an independent certified public accountant to the effect th at, after such reinvestment the principal amount of Federal Securities, together with the interest thereon and other available moneys held in the Escrow Fund, will be sufficient without reinvestment to pay interest on , and the principal or redemption price of, the Refunded Bonds as provided in Section 4 hereof; and (ii) an unqualified opinion of nationally recognized municipal bond counsel to the effect that (a) such investment will not cause either the Refunded Bonds, or other Bonds issued under the I ndenture to be “arbitrage bonds” within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended (the “Cod e”), and the regulations thereunder in effect on the date of such investment, or otherwise cause the interest on any of such bonds (n ot designated as taxable bonds) to be included in the gross income of the recipients thereof for federal income tax purposes, and (b) such reinvestment complies with the Constitution and laws of the State of California and with all relevant documents relating to the issuance of the Refunded Bonds.
(c) If, at any time, the Initial Federal Securities or other Federal Securities then held as an investment of the Escrow Fund mature or payments are made thereon to the Escrow Agent or the Escrow Agent otherwise holds or receives cash in advance of the time same cash is needed to make payment on the Refunded Bonds, such amounts shall be held uninvested unless the Escrow Agent has received written instructions from the 135319473.3 9
Commission directing the investment of such amounts and all of the following requirements have been met:
(i) such moneys shall be invested only in Federal Securities that mature not later than the date on which the funds invested therein will be needed to make payments on the Refunded Bonds;
(ii) such moneys shal l be inves ted only in Federal Securities that mature in an amount, together with interest thereon, not less than the full amount paid by Escrow Agent to acquire such investments;
(iii) prior to any such reinvestment, the Escrow Agent shall receive from the Commission or t he Commission’s financial advisor a certificate to the effect that the investments to be acquired by the Escrow Age nt meet the requirements of Subsections 8(c)(i) and 8(c)(ii) above; and (iv) if the yield on such reinvestment is greater than 0.00% or th e reinvestment is being made pursuant to an agreement providing for the purchase of Federal Securities at a future time or times, then prior to any such reinvestment, the Commission shall deliver to the Escrow Agent an unqualified opinion of nationally recognized municipal bond counsel to the effect that such reinvestment will not cause either the Refunded Bonds or other Bonds issued under the Indenture to be “arbitrage bonds” within the meaning of Section 148 of the Code, and the regulations thereunder i n effect o n the date of such investment, or otherwise cause the interest on any of such bonds (not designated as taxable bonds) to be included in the gross income of the recipients thereof for federal income tax purposes; provided that, if such investment is made pursuant to the terms of an agreement between the Escrow Agent and a supplier of securities which agreement is entered into by the Escrow Agent at the written direction of the Commission and provides for investments to be provided at a future time or times, then the requirement set forth in this Subsection 8(c)(iv) shall be met if the opinion described herein is provided prior to the time the agreement is entered into and relates to all investments made in accordance with the terms of such agreement.
(d) In addition to the requirements and restrictions set forth above in Subsection 8(c), if the Refunded Bonds then carry a rating assigned by Moody’s and/or Standard & Poor’s on the basis of the security provided by the Escrow Fund, then the Commission shall not direct the Escrow Agent to enter into an agreement providing for the purchase of securities at a future time or times a s an investment of the Escrow Fund unless prior to the time the Escrow Agent enters into such agreement, the Commission has been notified by the rating agency or agencies then maintaining such rating or ratings that entering into the agreement will not cau se the rating or ratings then assigned to the Refunded Bonds to be reduced or withdrawn.

SECTION 9. Indemnity. The Commission hereby assumes liability for, and hereby agrees (whether or not any of the transactions contemplated hereby are consummated) to 135319473.3 10
indemnify, protect, save and keep harmless , the Escrow Agent and its respective successors, assigns, agents, officers, directors, employees and s ervants, from and against any and all liabilities, obligations, losses, damages, penalties, claims, actions, suits, costs, expenses and disbursements (including reasonable legal fees and disbursements) of whatever kind and nature which may be imposed on, incurred by, or asserted against, the Escrow Agent at any time (whether or not also indemnified against the same by the Commission or any other person under any other agreement or instrument, but without double indemnity) in any way relating to or arising out of the execution, delivery and performance of this Escrow Agreement, the establishment hereunder of the Escrow Fund, the acceptance of the funds and securities deposited therein, and any payment, transfer or other application of moneys or securities by the Escrow Agent in accordance with the provisions of this Escrow Agreement; provided, however, that the Commission shall n ot be required to indemnify the Escrow Agent against the Escrow Agent’s own negligence or willful misconduct or the negligence or w illful mis conduct of the Escrow Agent’s respective agents and employees or the willful breach by the Escrow Agent of the terms of this Escrow Agreement. In no event shall the Commission or the Escrow Agent be liable to any person by reason of the transactions contemplated hereby other than to each other as set forth in this Section. The indemnities contained in this Section shall survive the termination of this Escrow Agreement.

SECTION 10. Responsibilities of Escrow Agent. The Escrow Agent and its agents and servants shall not be held to any personal liability whatsoever, in tort, contract, or otherwise, in connection with the execution and delivery of this Escrow Agreement, the establishment of the Escrow Fund, the acceptance of the moneys or securities deposited t herein, or any payment, transfer or other application of moneys or obligations by the Escrow Agent in accordance with the provisions of this Escrow Agreement or by reason of any non- negligent act, non-negligent omission or non- negligent error of the Escrow Agent made in good faith in the conduct of its duties. The recitals of fact contained in the “Whereas” clauses herein shall be taken as the statements of the Commission, and the Escrow Agent assumes no responsibility for the correctness thereof. The Escrow Agent makes no representation as to the validity of this Escrow Agreement as to the Commission and, except as otherwise provided herein, the Escrow Agent shall incur no liability in respect thereof. The Escrow Agent shall not be liable in connection with the performance of its duties under this Escrow Agreement except for its own negligence, willful misconduct or willful breach, and the duties and obligations of the Escrow Agent shall be determined by the express provisions of this Escrow Agreement. T he Escrow Agent shall be under no obligation to inquire into or be in any way responsible for the performance or nonperformance by the Commission of its obligations. The Escrow Agent may consult with counsel, who may or may not be counsel to the Commission, and in reliance upon the written opinion of such counsel shall have full and complete authorization and protection in respect of any action taken, suffered or omitted by it in good faith in accordance therewith. Whenever the Escrow Agent shall deem it ne cessary or desirable that a matter be proved or established prior to taking, suffering, or omitting any action under this E scrow Agreement, such matter may be deemed to be conclusively established by a certificate signed by the General Manager and the Assistant General Manager, Business Services of the Commission.

SECTION 11. Amendments. This Escrow Agreement is made for the benefit of t he Commission and the Owners from time to time of the Refunded Bonds and it shall not be repealed, revoked, altered or amended without the wr itten consent of all such Owners, the 135319473.3 11
Escrow Agent and the Commission; provided, however, that the Commission and t he Escrow Agent may, without the consent of, or notice to, such Owners, amend this Escrow Agreement or enter into such agreements s upplemental to this Escrow Agreement as shall not adversely affect the rights of such Owners and as shall not be inconsistent with the terms and provisions of this Escrow Agreement or the Indenture, for any one or more of the following purposes: (i) to cure any ambiguity or formal defect or omission in this Escrow Agreement; (ii) to grant to, or confer upon, the Escrow Agent for the benefit of the Owners of the Refunded Bonds, any additional rights, remedies, powers or authority that may lawfully be granted t o, or conferred upon, such Owners or the Escrow Agent; and (iii) to include under this Escrow Agreement additional funds, securities or properties. The Escrow Agent shall be entitled to rely conclusively upon an unqualified opinion of nationally recogni zed municipal bond attorneys with respect to compliance with this Section, including the extent, if any, to which any change, modification, addition or elimination affects the rights of the Owners of the Refunded Bonds or that any instrument executed hereunder complies with the conditions and provisions of this Section.

SECTION 12. Term. This Escrow Agreement shall commence upon its execution and delivery and shall terminate on the date on which the Refunded Bonds shall have been paid in full in accordance with this E scrow Agreement and any amounts remaining in the Escrow Fund shall have been paid to the Commission as required under Section 4(c) of this Escrow Agreement.

SECTION 13. Compensation. The Escrow Agent shall receive its reasonable fees and expenses as previously agreed t o by the Escrow Agent and the Commission; provided, however, that under no circumstances shall the Escrow Agent be entitled to any lien whatsoever on any moneys or obligations in the Escrow Fund for the payment of fees and expenses for services rendered or expenses incurred by the Escrow Agent under this Escrow Agreement.

SECTION 14. Severability. If any one or more of the covenants or agreements provided in this Escrow Agreement on the part of the Commission or the Escrow Agent to be performed should be determined by a court of competent jurisdiction to be contrary to law, such covenants or agreements shall be null and void and shall be deemed separate from the remaining covenants and agreements herein contained and shall in no way affect the validity of the remaini ng provisions of this Escrow Agreement.

SECTION 15. Governing Law . This Escrow Agreement shall be construed under the laws of the State of California.

SECTION 16. Insufficient Funds . If at any time the moneys and investments in the Escrow Fund, including the anticipated proceeds of the I nitial Federal Securities or any future Federal Securities pursuant to Section 8 hereof, and earnings thereon, will not be sufficient to make all payments required by this Escrow Agreement, the Escrow Agent shall notify the Commission in writing, upon obtaining actual knowledge of such insufficiency of funds or failure to receive instructions, of the amount thereof and, to the extent known to it, the reason therefor, provided the Escrow Agent shall not be liable for any delay or failure to notify th e Commission of such events.
135319473.3 12
SECTION 17. Counterparts . This Escrow Agreement may be executed in several counterparts, all or any of which shall be regarded for all purposes as an original but all of which shall constitute and be but one and the same instrument.

SECTION 18. Notification to Moody’s and S&P. The Commission hereby directs the Escrow Agent to notify Moody’s Investor’s Service and S&P Global Ratings of any amendment to this Agreement by mail at the following addresses: Moody’s Investors Ser vice, Seven World Trade Center, New York, New York 10004, Attention: Public Finance Department, and Standard & Poor’s Ratings Services, 55 Water Street, New York, New York 10041, Attention:

Public Finance Department.
[Remainder of Page Intentionally Left Blank]

135319473.3
S-1
IN WITNESS WHEREOF, the parties hereto have caused this Escrow Agreement to be executed by their duly authorized officers as of the date first above written.

U.S. BANK TRUST COMPANY, NATIONAL

ASSOCIATION,
as Escrow Agent
By: ______________________________________
Andrew Fung
Vice President

PUBLIC UTILITIES COMMISSION OF THE

CITY AND COUNTY OF SAN FRANCISCO
By: ______________________________________
Dennis J. Herrera
General Manager
Approved as to form:

David Chiu, City Attorney
By: ________________________________
Mark D. Blake, Deputy City Attorney
A-1

EXHIBIT A

REFUNDED BONDS
[____] REFUNDED BONDS
Maturity
Outstanding
Principal
Amount Interest Rate
CUSIP*
(Base No.
79765R)
Principal
Amount to be
Refunded
Payment or
Redemption
Date
$ % $

Total:

[____] REFUNDED BONDS
Maturity
Outstanding
Principal
Amount Interest Rate
CUSIP*
(Base No.
79765R)
Principal
Amount to be
Refunded
Redemption
Date
$ % $

Total:

[____] REFUNDED BONDS
Maturity
Outstanding
Principal
Amount Interest Rate
CUSIP*
(Base No.
79765R)
Principal
Amount to be
Refunded
Redemption
Date
$ % $

Total:
__________
† Term Bond

* CUSIP is a registered trademark of the American Bankers Association. CUSIP data herein are provided by CUSIP Global Services (CGS), which is managed on behalf of th e American Bankers Association by FactSet Research Systems, Inc. This information is not intended to create a database and does not serve in any way as a substitute for the CGS database. Neither the Commission nor the Underwriters assume any responsibility for the accuracy of the CUSIP data.

A-2

EXHIBIT A

REFUNDED BONDS
(continued)
[____] REFUNDED BONDS
Maturity
Outstanding
Principal
Amount Interest Rate
CUSIP*
(Base No.
79765R)
Principal
Amount to be
Refunded
Redemption
Date
$ % $

Total:
__________
† Term Bond

[____] REFUNDED BONDS
Maturity
Outstanding
Principal
Amount Interest Rate
CUSIP*
(Base No.
79765R)
Principal
Amount to be
Refunded
Redemption
Date
$ % $

Total:

* CUSIP is a registered trademark of the American Bankers Association. CU SIP data herein are provided by CUSIP Global Services (CGS), which is managed on behalf of the American Bankers Asso ciation by FactSet Resear ch Systems, Inc. This information is not intended to create a database and does not serve in any way as a substitute for the CGS database. Neither the Commission nor the Underwriters assume any responsibility for the accuracy of the CUSIP data.

A-3

EXHIBIT A

REFUNDED BONDS
(continued)
[____] REFUNDED BONDS
Maturity
Outstanding
Principal
Amount Interest Rate
CUSIP*
(Base No.
79765R)
Principal
Amount to be
Refunded
Redemption
Date
$ % $

Total:
__________
† Term Bond

* CUSIP is a registered trademark of the American Bankers Association. CUSIP data herein are provided by CUSIP Global Services (CGS), which is managed on behalf of the American Bankers Association by FactSet Research Systems, Inc. This information is not intended to create a database and does not serve in any way as a substitute for the CGS database. Neither the Commission nor the Underwriters assume any responsibility for the accuracy of the CUSIP data.

A-4

EXHIBIT A

REFUNDED BONDS
(continued)
[____] REFUNDED BONDS
Maturity
Outstanding
Principal
Amount Interest Rate
CUSIP**
(Base No.
79765R)
Principal
Amount to be
Refunded
Redemption
Date
$ % $

Total:
__________
† Term Bond

* CUSIP is a registered trademark of the American Bankers Association. CUSIP data herein are provided by CUSIP Global Services (CGS), which is managed on behalf of the American Bankers Association by FactSet Research Systems, Inc. This information is not intended to create a database and does not serve in any wa y as a substitute for the CGS database. Neither the Commission nor the Underwriters assume any responsibility for the accuracy of the CUSIP data.

A-5

EXHIBIT A

REFUNDED BONDS
(continued)
[____] REFUNDED BONDS
Maturity
Outstanding
Principal
Amount Interest Rate
CUSIP1
(Base No.
79765R)
Principal
Amount to be
Refunded
Redemption
Date
$ % $

Total:
__________
† Term Bond

1 CUSIP is a registered trademark of the American Bankers Association. CUSIP data h erein are provided by CUS IP Global Services (CGS), which is managed on behalf of the American Bankers Association by FactSet Research System s, Inc. This information is not intended to create a database and does not serve in any way as a substitute for the CGS database. Neither the Commission nor the Underwriters assume any responsibility for the accuracy of the CUSIP data.

B-1

EXHIBIT B

DISBURSEMENT REQUIREMENTS

[____] REFUNDED BONDS
See Verification Report Exhibit B-1

[____] REFUNDED BONDS
See Verification Report Exhibit C-2

[____] REFUNDED BONDS
See Verification Report Exhibit D-2

[____] REFUNDED BONDS
See Verification Report Exhibit E-2

[____] REFUNDED BONDS
See Verification Report Exhibit F-2

[____] REFUNDED BONDS
See Verification Report Exhibit G-2

[____] REFUNDED BONDS
See Verification Report Exhibit H-2

[____] REFUNDED BONDS
See Verification Report Exhibit I-2
C-1

EXHIBIT C

INITIAL FEDERAL SECURITIES

[____] REFUNDED BONDS
See Verification Report Exhibit C-1

[____] REFUNDED BONDS
See Verification Report Exhibit D-1

[____] REFUNDED BONDS
See Verification Report Exhibit E-1

[____] REFUNDED BONDS
See Verification Report Exhibit F-1

[____] REFUNDED BONDS
See Verification Report Exhibit G-1

[____] REFUNDED BONDS
See Verification Report Exhibit H-1

[____] REFUNDED BONDS
See Verification Report Exhibit I-2
135319473.3
D-1

EXHIBIT D

FORMS OF DEFEASANCE NOTICES TO BE DELIVERED

135319473.3

NOTICE OF DEFEASANCE

PUBLIC UTILITIES COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO SAN FRANCISCO WATER REVENUE BONDS, [___] SERIES [__]
[__] SUB-SERIES [_] BONDS
NOTICE IS HEREBY GIVEN to the owners of the above -captioned bonds (the “[____] Bonds”) that the Public Utilities Commission of the City and County of San Francisco (the “Commission”) has deposited with U.S. Bank Trust Company, National Association, the trustee for the [____] Bonds (the “Trustee”) under the Amended an d Restated Indenture, dated as of August 1, 2002, by and between the Commission and the Trustee, as amended and supplemented to date (collectively, the “Indenture”), cash and noncallable bonds or other obligations which as to principal and interest const itute direct obligations of, or are guaranteed directly by the full faith and credit of, the United States of America, paying interest and principal in an amount which, together with the amounts held as cash, shall be fully sufficient (1) to pay the princi pal due at maturity of the [____] Bonds maturing on [_____________], as more fully
identified in the table below on [_____________], together with interest accrued to the maturity date and (2) to pay the [____] Bonds maturing on [_____________], as more fully identified in the table below on [_____________] (the “Redemption Date”), at the redemption price of 100% of the principal amount thereof together with interest accrued to the Redemption Date. [____] Sub-Series [_]
Refunded Bonds
CUSIP* Maturity Date
Principal Amount
to be Paid or
Redeemed
Interest
Rate
Redemption
Price
79765R [___] November 1, [___] $ % 100.0%
79765R [___] November 1, [___] 100.0

In accordance with the Indenture, all liability of the Commission in respect of such refunded [___] Bonds (the “[____] Refunded Bonds”) shall cease and terminate and be completely discharged and satisfied and all payments of the interest on, and the principal or redemption price of, such [____] Refunded Bonds shall be paid only from moneys on deposit with the Trustee and available as aforesaid. *The undersigned shall not be held responsible for the selection or use of the CUSIP number in this Redemption Notice, nor is any representation made as to its correctness. It is included solely for the convenience of the Holders.

DATED this __ day of [___], 2023.

U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION,
as Trustee

135319473.3

NOTICE OF DEFEASANCE

PUBLIC UTILITIES COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO SAN FRANCISCO WATER REVENUE BONDS, [___] SERIES [___]
[___] SUB-SERIES [_] BONDS
NOTICE IS HEREBY GIVEN to the owners of the above- captioned bonds (the “[____] Bonds”) that the Public Utilities Commission of the City an d County of San Francisco (the “Commission”) has deposited with U.S. Bank Trust Company, National Association, the trustee for the [____] Bonds (the “Trustee”) under the Amended and Restated Indenture, dated as of August 1, 2002, by and between the Commission and the Trustee, as amended and supplemented to date (collectively, the “Indenture”) , cash and noncallable bonds or other obligations which as to princi pal and interest constitute direct obligations of, or are guaranteed directly by the full faith and credit of, the United States of America, paying interest and principal in an amount whic h, together with the amounts held as cash, shall be fully sufficient to pay the [____] Bonds as more fully identified in the table below (the “ [____] Refunded Bonds”) on [__________] (the “Redemption Date”), at the redemption price listed below (expresse d as a percentage of the principal amount thereof) (the “Redemption Pr ice”), together with interest accrued to the Redemption Date.
[___] Sub-Series [_]
Refunded Bonds
CUSIP* Maturity Date
Principal Amount
to be Redeemed
Interest
Rate
Redemption
Price
79765R [___] November 1, [___] $ % 100.0%
79765R [___] November 1, [___] 100.0
79765R [___] November 1, [___] 100.0

In accordance with the Indenture, all liability of the Commission in respect of such [____] Refunded Bonds shall cease and term inate and be completely discharged and satisfied and all payments of t he interest on, and the principal or redemption price of, such [____] Refunded Bonds shall be paid only from moneys on deposit with the Trustee and available as aforesaid. *The undersigned shall not be held responsible for the selection or use of the CUSIP number in this Redemption Notice, nor is any representation made as to its correctness. It is included solely for the convenience of the Holders.

DATED this __ day of [___], 2023.

U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION,
as Trustee

135319473.3

EXHIBIT E

FORM OF REDEMPTION NOTICES TO BE DELIVERED

135319473.3

NOTICE OF [FULL/PARTIAL] OPTIONAL REDEMPTION

PUBLIC UTILITIES COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO SAN FRANCISCO WATER REVENUE BONDS, [___] SERIES [___]
[___] SUB-SERIES [___] BONDS
NOTICE IS HEREBY GIVEN pursuan t to the terms of the governing document dated as of [_________], between San Francisco Public Utilities Commission , as Issuer, and U.S. Bank Trust Company, National Association, as Trustee or Agent, that the bonds listed below (the “Bonds”), issued on [___], have been selected for [Full/Partial] Redemption on [_________] (the “Redemption Date”), at the price listed below of the principal amount (the “Redemption Price”) together with interest accrued to the Redemption Date.

CUSIP* Maturity Date
Interest
Rate
Principal Amount
to be Redeemed
Redemption
Price
79765R [___] November 1, [___] % $ 100.0%
79765R [___] November 1, [___] 100.0
79765R [___] November 1, [___] 100.0

On the Redemption Date, there will become due and payable the Redemption Price, together with interest accrued thereon to the Redemption Date . Pursuant to the governing document, payment of the Redemption Price on the Bonds called for redemption, together with accrued interest to the Redemption Date, will be paid without presentation of the Bonds if presentment is not required and upon presentation of the Bonds if presentment is required. If presentment is required, surrender thereof can be made in the following manner:

Delivery Instructions:

U.S. Bank
Global Corporate Trust
111 Fillmore Ave E
St. Paul, MN 55107
Bondholders presenting their bonds in person for same day payment must surrender their bond(s) by 1:00 P.M. CST on the Redemption Date and a check will be available for pick up after 2:00 P.M. CST. Checks not picked up by 4:30 P.M. CS T will be mailed out to the bondholder via first class mail . If payment of the Redemption Price is to be made to the registered owner of the Bond, you are not required to endorse the Bond to collect the Redemption Price.

Interest on the principal amount d esignated to be redeemed shall cease to accrue on and after the Redemption Date.

For a list of redemption requirements please visit our website at www.usbank.com/corporatetrust and click on the “Bondholder Information” link for r edemption instructions. You may also contact our Bondholder Communications team at 1-800-934-6802 Monday through Friday from 8 AM to 6 PM CST.

IMPORTANT NOTICE
Federal law requires the Trustee to withhold taxes at the applicable rate from the payment if an IRS Form W-9 or applicable IRS Form W-8 is not provided. Please visit www.irs.gov for additional information on the tax forms and instructions.
*The undersigned shall not be held responsible for the selection or use of the CUSIP number in this Redemption Notice, nor is any representation made as to its correctness. It is included solely fo r the convenience of the Holders.

By: U.S. Bank Trust Company, National Association, as Trustee or Agent Dated: _________, 20__.

HDW Draft 3/30/2023
3769365.5 046549 AGMT

DEALER MANAGER AGREEMENT
[Invitation Date]
Public Utilities Commission of the
City and County of San Francisco
525 Golden Gate Avenue, 13th Floor
San Francisco, California 94102

Ladies and Gentlemen:

The Public Utilities Commission of the City and County of San Francisco (the “Commission”) plans to release an Invitation to Offer Bonds for Purchase, dated [Invitation Date] (as it may be amended or supplemented, the “Invitation”), the form of which is attached hereto as Annex A, whereby the Commission will offer to beneficial owners (the “holders”) of certain of the Commission’s outstanding [_________] (collectively, the “Target Bonds”) to purchase for cash the Target Bonds (the “ Tender Offer”), all upon the terms and subject to the conditions set forth in the Invitation. The date upon which the Invitation is commenced by the Commission is herein referred to as the “ Launch Date.” This dealer manager agreement (this “ Agreement”) will confirm the understanding among the Commission and Jefferies LLC (“Jefferies”) pursuant to which the Commission has retained Jefferies to act as the exclusive dealer manager (the “Dealer Manager”), on the terms and subject to the conditions set forth herein, in connection with the proposed Tender Offer.

The Commission has prepared , approved and furnished or caused to be prepared and furnished to the Dealer Manager a complete and correct copy of the Invitation on or prior to the Launch Date. The Dealer Manager is authorized to use the Invitation delivered on or prior to the date hereof in connection with the Tender Offer in the manner contemplated by the Invitation along with such other offering materials and information that the Commission has, prior to use, approved in writing for use subsequent to the date hereof in connection with the Tender Offer (together with any and all information and documents incorporated by reference therein, collectively, the “ Additional Material”).

In connection with and as described in the Invitation, the Commission will purchase Target Bonds tendered for purchase and fund expenses incurred in connection with the Tender Offer with a portion of the proceeds of the Commission’s Water Revenue Bonds, 2023 Series DE, 2023 Sub-Series D Bonds [and 2023 Sub- Series E Bonds (?)] (the “Series 2023 Bonds”) and certain other available moneys of the Commission (such portion of said proceeds and such other available moneys, the “Target Purchase Proceeds”). The Series 2023 Bonds shall be issued pursuant to the Amended and Restated Indenture by and between the Commission and U.S. Bank Trust Company, National Asso ciation as successor trustee (the “Trustee ”), dated as of August 1, 2002, as supplemented, including as supplemented by the Forty-Sixth Supplemental Indenture, dated as of [Month] 1, 2023 (collectively, as may be further amended and supplemented as therein permitted, the “Indenture”). Terms used herein and not otherwise herein defined shall have the respective meanings given to them in the Invitation or the Indenture, as the case may be. The Commission 2 3769365.5 046549 AGMT
shall have sole authority for acceptance or rejection of any and all tenders of Target Bonds.

The Dealer Manager is not authorized to accept on the Commission’s behalf any offer made in response to the Tender Offer, or otherwise bind the Commission, without the Commission’s prior written consent. The date on which Target Bonds are purchased for cash pursuant to the Tender Offer is referred to herein as the “Settlement Date”.

SECTION 1. Engagement. Subject to the terms and conditions set forth herein:
(a) The Commission hereby retains the Dealer Manager, and subject to the terms and conditions hereof, the Dealer Manager agrees to act, as the exclusive dealer manager to the Commission in connection with the Invitation until the Settlement Date or earlier termination of this Agreement pursuant to Section 3 hereof. The Dealer Manager will advise the Commission and its legal and financial advisors with respect to the terms and timing of the Invitation.
(b) Th e Commission acknowledges that the Dealer Manager has been retained solely to provide the services set forth in this Agreement. The Commission also acknowledges and agrees that the Dealer Manager shall act as an independent contractor, on an arm’s-length basis under this Agreement with duties solely to the Commission and that nothing contained herein or the nature of the Dealer Manager’s services hereunder is intended to create or shall be construed as creating an agency or fiduciary relationship between the Dealer Manager (or any of its affiliates) and the Commission (or its security holders, directors, officers, employees or creditors) or any other person. The Commission further acknowledges that (i) the Dealer Manager shall not be deemed to act as a partner, joint venturer or agent of, or a member of a syndicate with, the Commission (except that in any jurisdiction in which the Invitation is required to be made by a registered licensed broker or dealer, it shall be deemed made by the Dealer Manager on behalf of the Commission), and the Commission shall not be deemed to act as the agent of the Dealer Manager, and (ii) no securities broker, dealer, bank, trust company or nominee shall be deemed to act as the agent of the Dealer Manager or as the agent of the Commission, and the Dealer Manager shall not be deemed to act as t he agent of any securities broker, dealer, bank, trust company or nominee. The Commission acknowledges and agrees that none of the Dealer Manager , its affiliates and their respective officers, directors, employees, agents and controlling persons (each, a “Dealer Manager-Related Person”) shall have any liability in tort, contract or otherwise to the Commission for any act or omission on the part of any securities broker, dealer, bank, trust company or nominee or any other person other than the Dealer Manager . The Commission shall have sole responsibility for the acceptance or rejection of any and all tenders of Target Bonds for purchase.
(c) Accordingly, the Commission expressly disclaims any agency or fiduciary relationship with the Dealer Manager hereunder. The Commission understands that the Dealer Manager and its affiliates are not providing (nor is the Commission relying on the Dealer Manager or its affiliates for) tax, regulatory, legal or accounting advice. The rights and obligations that the Commission may have to Jefferies or its affiliates under any credit or other agreement are separate from the Commission’s rights and obligations under this Agreement and will not be affected in any way by this Agreement. The Dealer Manager may, to the extent it 3 3769365.5 046549 AGMT
deems appropriate, retain the services of any of its affiliates to assist the Dealer Manager in providing its services hereunder and share with any such affiliates any information made available by or on behalf of the Commission. In connection with the Invitation, the Commission has consulted with its municipal, legal, accounting, tax, financial and other advisors, as applicable, to the extent it has deemed appropriate.
(d) The Commission acknowledges that Jefferies and its affiliates are engaged in a broad range of securities activities and financial services. In the ordinary course of Jefferies’ business, Jefferies or its affiliates (i) may at any time hold long or short positions, and may trade or otherwise effect transactions, for Jefferies’ account or the accounts of its customers, in debt securities of the Commission and (ii) may at any time be providing or arranging financing and other financial services to companies or entities that may be involved in this or a competing transaction. Jefferies and its affiliates shall not, however, purchase any Target Bonds during the term of this Agreement.
(e) The Dealer Manager agrees to use its customary reasonable efforts to solicit tenders of Target Bonds for purchase pursuant to the Tender Offer. The Dealer Manager agrees, in accordance with its customary practices and consistent with industry p ractice for investment banking concerns of national standing and in accordance with the terms of the Tender Offer, to perform those services in connection with the Tender Offer as are customarily performed by dealer managers, as applicable, in connection with similar transactions of a like nature, including, without limitation, communicating generally regarding the Tender Offer with securities brokers, dealers, banks, trust companies and nominees and other holders of Target Bonds, and participating in meetings with, furnishing information to, and assisting the Commission in negot iating with, holders of Target Bonds.
(f) The Commission authorizes the Dealer Manager to engage [Globic Advisors] to act as an information and tender agent (the “ Information Agent”) in connection with the Invitation and the Tender Offer and, as such, to advise the Dealer Manager as to such matters relating to the Invitation as the Dealer Manager may reasonably request. In addition, the Commission hereby authorizes the Dealer Manager to communicate regularly with the Information Agent with respect to matters relating to the Invitation. (g) The Commission, with the assistance of the Information Agent, shall deliver or cause to be delivered to (i) the holders of the Target Bonds and (ii) each participant in The Depository Trust Company (“DTC”) appearing in the most recently available DTC securities position listing prepared immediately prior to the date of this Agreement as a holder of the Target Bonds and (iii) each non-objecting beneficial owner under the rules promulgated by the Securities and Exchange Commission (“ NOBO”) appearing in the most recent NOBO list as an owner of Target Bonds (each such registered holder, participant or owner, a “ Registered or Beneficial Owner”) as soon as practicable, by hand, by overnight courier or electronic means, by another means of expedited delivery copies of the Invitation and any Additional Material.

Thereafter, to the extent practicable, until the expiration of the Invitation, the Commission shall use its best efforts to cause copies of such materials to be sent to each person who becomes a holder or beneficial owner of the Target Bonds. In addition, the Commission shall update such information from time to time during the term of this Agreement as reasonably requested by the 4 3769365.5 046549 AGMT
Dealer Manager and to the extent such information is reasonably available to the Commission within the time constraints specified.
(h) The Commission authorizes the Dealer Manger to use the Invitation and Additional Material in connection with the Tender Offer and for such period of time as any materials are required by law to be delivered in connection therewith. The Dealer Manager shall assist the Commission in disseminating the Invitation and any Additional Material, but the Dealer Manager shall not have any obligation to cause the Invitation or Additional Material to be transmitted generally to the holders of the Target Bonds. (i) Th e Commission agrees to advise the Dealer Manager promptly of (i) the occurrence of any event which, in the reasonable judgment of the Commission or its counsel, could cause or require the Commission to withdraw, rescind or modify the Invitation or Additional Material, (ii) the occurrence of any event that would permit the Commission to exercise any right not to purchase Target Bonds tendered pursuant to the Tender Offer, (iii) any proposal or requirement to amend or supplement the Invitation or Additional Material, as applicable, or to make any filing pursuant to any applicable law, regulation or other rule , (iv) the occurrence of any event that would cause any representation or warranty contained in this Agreement to be untrue or inaccurate in any material respect , (v) the o ccurrence of any event described in the second sentence of Section 4(m) hereof, (vi ) any material developments in connection with the Tender Offer, including, without limitation, the commencement of any litigation or administrative action concerning or related to the Tender Offer , or (vii) the issuance by any agency of any comment or order or the taking of any other action concerning the Tender Offer (and, if in writing, the Commission will furnish the Dealer Manager with a copy thereof) .

The Commission will also provide the Dealer Manager with any other information relating to the Tender Offer, the Invitation or Additional Material or this Agreement that the Dealer Manager may from time to time reasonably request . In addition, if any event occurs as a result of which it shall be necessary to amend or supplement the Invitation or any Additional Material in order to correct any untrue statement of a material fact contained therein or omission to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, the Commission shall, promptly upon becoming aware of any such event, advise the Dealer Manager of such event and, as promptly as practicable under the circumstances, prepare and furnish copies of such amendments or supplements of the Invitation or any such Additional Material to the Dealer Manager and the Information Agent , so that the statements in the Invitation or such Additional Material, as so amended or supplemented, will not contain any untrue statement of a material fact or omit to s tate a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The Commission agrees to file or cause to be filed with EMMA the Invitation, any Additional Material and any amendments or supplements of the Invitation or any Additional Material.
(j) E xcept as otherwise required by law or regulation, the Commission will not use or publish any material in connection with the Invitation, other than the Invitation and any other Additional Material approved in writing by the Dealer Manager, or refer to the Dealer Manager in any such material, without the prior written approval of the Dealer Manager, which in either instance shall not be unreasonably withheld. The Commission, upon receiving such 5 3769365.5 046549 AGMT
written approval, will promptly furnish the Dealer Manager with as many copies (which may be electronic copies) of such approved materials as the Dealer Manager may reasonably request. The Commission will promptly inform the Dealer Manager of any litigation or administrative or similar proceeding of which it becomes aware which is initiated or threatened with respect to the Tender Offer. The Dealer Manager agrees that it will not make any statements in connection with the Tender Offer other than the statements that are set forth in, or derived from, the Invitation or Additional Material without the prior written consent of the Commission. (k) To the extent the Commission accepts offers to purchase Target Bonds in the Tender Offer, the Target Purchase Proceeds, the delivery of which is a condition of its purchase of the Target Bonds validly tendered for purchase pursuant to the Tender Offer, will be available, and the Commission is authorized to and will use the Target Purchase Proceeds under applicable law, to pay promptly to the holders entitled thereto the full purchase price of the Target Bonds that it may elect to purchase pursuant to the Tender Offer and all related fees and expenses ; provided, however, that the source of payment therefor is solely from the Target Purchase Proceeds. (l) The Commission agrees not to purchase any Target Bonds during the term of this Agreement, except pursuant to and in accordance with the Invitation or as otherwise agreed in writing by the parties hereto and permitted under applicable laws and regulations, and the Commission agrees to cancel the Target Bonds it purchases pursuant to the Tender Offer or to cause such Bonds to be cancelled.

SECTION 2. Compensation and Expenses.
(a) The Commission shall pay to the Dealer Manager, as compensation for the Dealer Manager’s services hereunder, a fee of $ [____] for each $1,000 principal amount or accreted value as of the Settlement Date of Target Bonds purchased pursuant to the Tender Offer, subject to appropriate adjustment if the Dealer Manager terminates its participation in this Agreement or this Agreement is otherwise terminated, all as provided in Section 3 hereof. Such fee shall be payable concurrently with the payment for Bonds under the Tender Offer. (b) Whether or not any Target Bonds are tendered for purchase pursuant to the Tender Offer, and solely from the Target Purchase Proceeds, the Commission shall pay all reasonable expenses incurred in connection with the Tender Offer, including, without limitation, all fees and expenses relating to preparation, printing, mailing, and publishing of the Invitation and Additional Material and of any forwarding agent, and all fees and expenses of DTC, the Trustee and the Information Agent , and shall reimburse the Dealer Manager for all reasonable expenses incurred by the Dealer Manager in connection with its services as Dealer Manager under this Agreement, namely the reasonable fees and disbursements of counsel to the Dealer Manager.

SECTION 3. T
ermination; Withdrawal.
(a) Subject to Section 7 hereof, this Agreement shall terminate upon the earliest to occur of (i) the 1 5th day following the expiration, termination, withdrawal or cancellation of the Tender Offer, (ii) the close of business on the Settlement Date, (iii) the withdrawal by Jefferies as the Dealer Manager pursuant to Section 4(m)(A) hereof, (iv) the time 6 3769365.5 046549 AGMT
and date on which this Agreement shall be terminated by mutual consent of the parties hereto, and (v) the date that is six months after the date of this Agreement. (b) Subject to Section 7 hereof, this Agreement may be terminated by the Commission, at any time upon notice to the Dealer Manager, if (i) at any time prior to the Settlement Date, the Tender Offer is terminated or withdrawn by the Commission for any reason, or (ii) the Dealer Manager does not comply in any material respect with any of its obligations hereunder in the reasonable opinion of the Commission.
(c) Subject to Section 7 hereof, this Agreement shall be subject to termination in the absolute discretion of the Dealer Manager without any liability or penalty to the Dealer Manager and to each Dealer-Manager Related Person, and without loss of any right to reimbursement for its expenses, fees and costs pursuant to Section 2 hereof, at any time upon notice to the Commission, if (i) prior to the Settlement Date, (A) the Tender Offer is terminated or withdrawn by the Commission for any reason other than as provided in Section 3(b)(ii) above, or (B) any stop order, restraining order, injunction or denial of an application for approval has been issued and not thereafter stayed or vacated, or (C) any proceeding, litigation or investigation has been initiated, with respect to or otherwise affecting the Invitation or any other action or transaction contemplated by the Invitation or this Agreement, which the Dealer Manager reasonably believes renders it inadvisable for it to continue to act hereunder, (ii) the Commission shall have breached in any material respect any representation, warranty or covenant contained herein (including, but not limited to, the conditions set forth in Section 4 hereof), or (iii) the Commission shall publish, send or otherwise distribute any amendment or supplement to the Invitation or any Additional Material to which the Dealer Manager shall reasonably object in writing to the Commission.
(d) If this Agreement is terminated, the Commission will, solely from the Target Purchase Proceeds, reimburse the Dealer Manager for its expenses, fees and costs pursuant to Section 2 hereof through the date of such termination promptly after such date. No termination of this Agreement, except a termination pursuant to Section 3(b)(ii) hereof, shall be deemed to terminate any of the rights or obligations of the Deal er Manager or the Commission previously accrued hereunder.

SECTION 4. Representations and Warranties by the Commission. The Commission represents and warrants to the Dealer Manager, as of the date hereof, as of each date that the Invitation or any Additional Material is published, sent, given or otherwise distributed, throughout the continuance of the Invitation, and as of the Settlement Date that:
(a) The Commission is a duly constituted public commission of the City and County of San Francisco duly organized and validly existing pursuant to its Charter and the Constitution and laws of the State of California.
(b) The Commission has full legal right, power and authority to execute and deliver this Agreement, and to perform all its obligations hereunder and to make and consummate the Invitation in accordance with its terms.
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(c) The Commission has taken all necessary official action to authorize the making and consummation of the Tender Offer (including authorizing any provisions for the payment from the Target Purchase Proceeds by the Commission for Target Bonds tendered for purchase and for the issuance and delivery by the Commission of the Series 2023 Bonds) and the execution, delivery, and performance by the Commission of this Agreement; and this Agreement has been duly executed and delivered by the Commission and, assuming due authorization, execution and delivery by the Dealer Manager, this Agreement constitutes a legal, valid and binding contractual obligation of the Commission, enforceable against the Commission in accordance with its terms, subject to the effect of bankruptcy, insolvency, reorganization, arrangement, fraudulent conveyance, moratorium and other similar laws relating to or affecting the creditors’ rights generally, to the application of equitable principles, to the exercise of judicial discretion in appropriate cases and to the limitations on legal remedies against entities such as the Commission in the State.
(d) The Invitation and the Additional Material comply and (as amended or supplemented, if amended or supplemented) will comply in all material respects with all applicable requirements of the federal securities laws; and the Invitation and the Additional Material do not and (as amended or supplemented, if amended or supplemented) will not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading.
(e) Except as otherwise disclosed in the Invitation and the Additional Material (exclusive of any amendment or supplement thereto), subsequent to the respective dates as of which information is given in the Invitation and the Additional Material (exclusive of any amendment or supplement thereto): (i) there has been no material adverse change, or any development that could reasonably be expected to result in a material adverse change, in the condition, financial or otherwise, or in the earnings, management, business, operations or prospects, whether or not arising from transactions in the ordinary course of business, of the Commission in the reasonable opinion of the Dealer Manager (any such change is called a “Material Adverse Change”); and (ii) the Commission has not incurred any material liability or obligation, indirect, direct or contingent, nor entered into any material transaction or agreement other than the issuance of the Series 2023 Bonds.
(f) The making and consummation of the Tender Offer (including any provisions for the payment by the Commission from the Target Purchase Proceeds for Target Bonds tendered for purchase or for the issuance and delivery by the Commission of the Series 2023 Bonds), the execution, delivery and performance by the Commission of this Agreement and the consummation of the transactions contemplated hereby do not and will not conflict with or constitute on the part of the Commission a breach of or default under any material agreement or other instrument to which the Commission is a party, or any existing law, ordinance, administrative regulation, court order or consent decree to which the Commission is subject.
(g) To the knowledge of the Commission (except as otherwise disclosed in the Invitation or Additional Material), no litigation or other proceeding before or by any court, agency 8 3769365.5 046549 AGMT
or other administrative body, state or federal, is pending or threatened against the Commission, or that has as the subject thereof any property owned or leased by, the Commission and any such action, suit or proceeding, that if determined adversely to the Commission, would result in a Material Adverse Change or adversely affect the making or consummation of the Tender Offer, the acquisition or cancellation of Target Bonds or the other transactions contemplated by the Invitation or Additional Material.
(h) No consent, approval, authorization or order of, or registration, qualification or filing with, any court or regulatory agency or other governmental agency or instrumentality is required in connection with the making and consummation of the Invitation (including any provisions for the payment by the Commission for Target Bonds tendered for purchase or for the issuance and delivery by the Commission of the Series 2023 Bonds), the execution, delivery and performance of this Agreement or the consummation of the transactions contemplated hereby.
(i) The Commission has or will have available funds, and is authorized to use such funds under applicable law, to pay the full purchase price of the Target Bonds tendered for purchase that it may become committed to purchase pursuant to the Tender Offer and all related fees and expenses, and will have available for delivery, and is authorized to issue and deliver the Series 2023 Bonds ; and the Series 2023 Bond s when issued, authenticated and delivered will be valid and legally enforceable obligations of the Commission in accordance with their terms and the terms of the Indenture.
(j) Th e representations and warranties of the Commission solely with respect to the Series 2023 Bonds set forth in any Purchase Contract executed by the Commission with the underwriters of the Series 2023 Bonds (the “Underwriter s”) to be sold in a public offering thereof (the “ Purchase Contact”) and all certificates and opinions of the Commission delivered thereunder for the benefit of the Underwriter s are hereby incorporated into this Agreement and also made to and for the benefit of the Dealer Manager solely with respect to the Series 2023 Bonds. (k) The Commission will perform the agreements and obligations it has that are set forth in or contemplated by the Invitation and Additional Material, including, but not limited to, accepting for payment Target Bonds that have been validly tendered and not withdrawn in accordance with and subject to the terms and conditions of the Tender Offer; provided, however, that the Commission may modify or cancel the Tender Offer at any time pursuant to the Invitation and Additional Material.
(l) The Commission hereby acknowledges that, i n performing the services contemplated by this Agreement, the Dealer Manager will be relying on the information furnished by the Commission , its officers, attorneys and other agents and information available from generally recognized public sources without independent verification. (m) The Commission represents and agrees that no solicitation material in addition to the Invitation and Additional Material will be used in connection with the Tender Offer or filed with any federal, state or local governmental or regulatory agency or authority by or on behalf of the Commission without the prior approval of the Dealer Manager, which approval shall 9 3769365.5 046549 AGMT
not be unreasonably withheld or delayed. If (i) the Commission uses or permits the use of any such solicitation material in connection with the Tender Offer or files any such solicitation material with any such federal, state or local governmental or regulatory agency or authority without the prior approval of the Dealer Manager, (ii) the Commission withdraws, terminates or cancels the Tender Offer for a reason other than in accordance with Section 3(b)(ii) hereof, or (iii) at any time the Dealer Manager shall determine that any condition set forth in Section 5 shall not be satisfied, then the Dealer Manager (A) shall have a reasonable period of time after discovering or being informed of such event to elect whether to continue to act as Dealer Manager or to withdraw as Dealer Manager, as the case may be, in connection with the Tender Offer, and (B) shall be entitled promptly to receive, solely from the Target Purchase P roceeds, the payment of all expenses payable to it under this Agreement, which expenses have accrued to the date of such withdrawal. (n) The Information Agent will on behalf of the Commission and the Dealer Manager make appropriate arrangements with DTC to allow for the book- entry movement of tendered Target Bonds among Holders or Registered Owners that choose to tender Target Bonds, the Commission and DTC.
(o) The representations and warranties set forth in this Section 4 shall remain operative and in full force and effect regardless of (i) any investigation made by or on behalf of any Dealer Manager -Related Person or (ii) any termination, expiration or cancellation of this Agreement.

SECTION 5. Conditions and Obligations . The obligation of the Dealer Manager to act as a Dealer Manager hereunder shall at all times be subject, in its discretion, to the conditions that:
(a) No event shall occur or any circumstance shall exist that causes the representations and warranties of the Commission contained herein or in any certificate or writing delivered hereunder at all times during the Invitation and at all times at or prior to the Settlement Date, not to be true and correct.
(b) The Commission at all times during the Tender Offer and at all times at or prior to the Settlement Date shall have performed all of its obligations hereunder required as of such time to have been performed by it.
(c) At or prior to the Launch Date, Norton Rose Fulbright US LLP, transaction counsel to the Commission, shall furnish the Dealer Manager with the opinion letter substantially in the form attached as Exhibit A hereto.
(d) At or prior to the Launch Date, Hawkins Delafield & Wood LLP, counsel to the Dealer Manager, shall furnish the Dealer Manager with the opinion letter substantially to the effect that the Invitation, and the actions of the Commission in connection with the Tender Offer as specifically set forth in the Invitation and Additional Material, are exempt from the provisions of Section 14(d) of the 1934 Act, Regulation 14D and 14E of the Securities and Exchange Commission and the related rules promulgated thereunder and otherwise substantially in the form attached as Exhibit B hereto.
10 3769365.5 046549 AGMT
(e) At or prior to the Launch D ate, Orrick, Herrington & Sutcliffe LLP , disclosure counsel to the Commission , shall furnish the letters in substantially the form attached as Exhibit C hereto.
(f) At the Settlement Date, there shall have been delivered to the Dealer Manager, on behalf of the Commission, a certificate of the Commission, signed by an Authorized Representative, dated the Settlement Date, and stating that the representations and warranties set forth in Section 4 hereof are true and accurate as if made on such Settlement Date. (g) Th e Commission shall have advised the Dealer Manager promptly of (i) the occurrence of any event (other than one expressly contemplated by the terms of the Invitation) that could cause the Commission to withdraw, rescind or terminate the Invitation or would permit the Commission to exercise any right not to purchase Target Bonds tendered under the Invitation, (ii) the occurrence of any event, or the discovery of any fact, the occurrence or existence of which it believes would make it necessary or advisable to make any change in the Invitation or Additional Material being used or would cause any representation or warranty contained in this Agreement to be untrue or inaccurate, (iii) any proposal by the Commission or requirement to make, amend or supplement the Invitation or any Additional Material pursuant to any applicable law, rule or regulation, (iv) its awareness of the issuance by any regulatory authority of any comment or order or the taking of any other action concerning the Invitation (and, if in writing, will have furnished the Dealer Manager with a copy thereof), (v) its awareness of any material developments in connection with the Invitation or the financing thereof, including, without limitation, the commencement of any lawsuit relating to the Invitation, and (vi) any other in formation relating to the Invitation, the Additional Material or this Agreement which the Dealer Manager may from time to time reasonably request.

SECTION 6. N o Dealer Manager D uties and Obligations Beyond Those Set Forth Herein. It is expressly understood and agreed that the Dealer Manager’s duties and obligations in connection with this Dealer Manager Agreement are confined to those expressly defined herein, and no additional covenants or obligations shall be read into this Dealer Manager Agreement against the Dealer Manager.

SECTION 7. Survival. This Section 7 and Sections 2, 6, 8 and 10 hereof and the representations and warranties of the Commission set forth in Section 4 hereof shall survive any failure by the Commission to commence the Tender Offer, any termination, except a termination pursuant to Section 3(b)(ii) hereof, expiration or cancellation of this Agreement, any completion of the engagement provided for by this Agreement or any investigation made on behalf of the Commission, the Dealer Manager or any Dealer Manager-Related Person and shall survive the acquisition of Target Bonds pursuant to the Tender Offer or the termination of the Tender Offer.

SECTION 8. Governing Law . This Agreement shall be governed by, and construed in accordance with, the laws of the State.

SECTION 9. Notices. Except as otherwise expressly provided in this Agreement, a ll notices, demands and formal actions hereunder will be in writing, mailed, forwarded by nationally 11 3769365.5 046549 AGMT
recognized overnight carrier, electronically transmitted, or in some commercially accepted manner delivered to:

If to the Commission:

Public Utilities Commission of the
City and County of San Francisco
525 Golden Gate Avenue, 13th Floor
San Francisco, California 94102
Attention: Assistant General Manager, Business
Services/Chief Financial Officer
Telephone: (415) 554-3155
Fax: (415) 554-3161
With a copy to:

City and County of San Francisco
Office of Public Finance
City Hall, Room 338
1 Dr. Carlton B. Goodlett Place
San Francisco, California 94102
Telephone: (415) 554-5956
Fax: (415) 554-4864

If to the Dealer Manager:

Jefferies LLC
11100 Santa Monica Boulevard, 12th Floor
Los Angeles, California 90025
Email: [email protected]
Attention: Simon Wirecki

or to such other address specified in a notice delivered in accordance with this Section 9.

SECTION 10. Miscellaneous.
(a) This Agreement embodies the entire agreement and understanding between the parties relating to the subject matter hereof and supersedes all prior agreements and understandings related to such subject matter, and it is agreed that there are no terms, understandings, representations or warranties, express or implied, other than those set forth herein. (b) This Agreement will inure to the benefit of and be binding upon the parties and their successors (including any successors or assigns of the Dealer Manager ), and will not confer any rights upon any other person. No director of the Commission shall incur any personal liability for approving or executing this Agreement, taking any action or omitting to take any action required or permitted hereunder or otherwise by reason of or in connection with this Agreement , the Series 2023 Bonds, the Invitation, the Additional Material or any of the transactions or other matters contemplated by any of the foregoing.
12 3769365.5 046549 AGMT
(c) The Dealer Manager may share any information or matters relating to the Commission, the Invitation and the transactions contemplated hereby with its affiliates, and such affiliates may likewise share information relating to the Commission with the Dealer Manager. (d) All representations, warranties, covenants and agreements by the Commission and the Dealer Manager in this Agreement shall remain operative and in full force and effect regardless of any investigation made by or on behalf of the Dealer Manager and shall survive the tender and corresponding purchase of the Target Bonds. (e) If any term, provision, covenant or restriction contained in this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable or against public policy, the remainder of the terms, provisions, covenants, and restrictions contained herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated. The Commission and the Dealer Manager shall endeavor in good faith negotiations to replace the invalid, void or unenforceable provisions with valid provisions, the economic effect of which comes as close as possible to that of the invalid, void or unenforceable provisions. (f) Independent registered municipal advisors (as defined in SEC Rule 15Ba1- 1(d)(3)(vi)) have been engaged to advise the Commission in connection with the issuance of the Series 2023 Bonds and the Tender Offer. The Commission acknowledges that in connection with the provision of the services under this Agreement, the Dealer Manager has informed the Commission that it is relying on the exemption provided under SEC Rule 15Ba1- 1(d)(3)(vi) for the participation by an independent registered municipal advisor. The Dealer Manager is not acting as a Municipal Advisor (as defined in Section 15B of the 1934 Act) and shall have no fiduciary duty to the Commission in connection with the issuance of the Series 2023 Bonds or the Tender Offer. The Commission has consulted with its municipal and other advisors to the extent it deems appropriate in connection with the issuance of the Series 2023 Bonds and the Tender Offer.
(g) In connection with the transactions contemplated hereby and the process leading to such transactions, the Dealer Manager is and has been acting solely as a principal and is not the municipal advisor, financial advisor, agent or fiduciary of the Commission or any of the Commission’s affiliates, directors, officers, employees, creditors or any other person (irrespective of whether Jefferies has provided other services or is currently providing other services to any of them on other matters). The Commission expressly disclaims any agency or fiduciary relationship with the Dealer Manager hereunder. The Commission understands that neither the Dealer Manager nor the Dealer Manager -Related Parties is a municipal advisor and neither is providing (nor is the Commission relying on the Dealer Manager or its affiliates for) tax, regulatory, legal or accounting advice. The Commission acknowledges that it has consulted with its financial and/or municipal, legal, accounting, tax and other advisors, as applicable, to the extent it has deemed appropriate. The rights and obligations that the Commission may have to Jefferies or its affiliates, under any credit or other agreement, are separate from the Commission ’s rights and obligations under this Agreement and will not be affected in any way by this Agreement. The Dealer Manager may, to the extent it deems appropriate, retain the services of any of its affiliates to assist the Dealer Manager, as applicable, in providing its services hereunder and share with any such affiliates any information made available by or on behalf of the Commission. 13 3769365.5 046549 AGMT
(h) As of the date of this Agreement, the Dealer Manager does not hold any of the Target Bonds for its own account. One or more of affiliates of the Dealer Manager may own or hold the Target Bonds for its own account or the account of its customers. The Dealer Manager has not engaged any affiliates in any manner related to the Tender Offer. To the extent they hold any of the Target Bonds, these affiliates would be engaged like any other investor or holder of the Target Bonds.
(i) This Agreement may be executed in counterparts, each of which will be deemed an original, but all of which, taken together, will constitute one and the same instrument.

Delivery of an executed signature page of this Agreement by facsimile or email transmission shall be as effective as delivery of a manually signed counterpart hereof.

Signature Page to Dealer Manager Agreement
3769365.5 046549 AGMT
If the foregoing correctly sets forth our understanding, please indicate your acceptance of the terms hereof signing in the appropriate space below and returning to the Dealer Manager the enclosed duplicate originals hereof, whereupon this letter shall be come a binding agreement between us.

Very truly yours,

JEFFERIES LLC

By:

Authorized Representative

Accepted and agreed to as
of the date first written above:

PUBLIC UTILITIES COMMISSION OF THE

CITY AND COUNTY OF SAN FRANCISCO

By:

Authorized Representative

Approved as to Form:

DAVID CHIU
City Attorney

By:

Mark D. Blake
Deputy City Attorney

Exhibit A
A-1
3769365.5 046549 AGMT

[FORM OF LETTER OF TRANSACTION COUNSEL]
[Invitation Date]

Jefferies LLC,
as Dealer Manager
Los Angeles, California

Public Utilities Commission of the City and County of San Francisco [Name of Tendered Bonds]

[To be provided by Norton Rose Fulbright US LLP]

Ladies and Gentlemen:

This letter is addressed to you, as Dealer Manager, pursuant to Section 5(c) of the Dealer Manager Agreement, dated [Invitation Date] (the “Dealer Manager Agreement”), between you and the Public Utilities Commission of the City and County of San Francisco (the “Issuer”), in relation to the Invitation to Offer Bonds for Purchase, dated [Invitation Date] (the “Invitation”). Capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Invitation or, if not defined in the Invitation, in the Dealer Manager Agreement.

In connection with our role as transaction counsel to the Issuer, we have reviewed the Dealer Manager Agreement; the Invitation; the posted Preliminary Official Statement; the Indenture; the Ordinance; the Resolution; and such other documents, opinions and matters to the extent we deemed necessary to render the opinions and conclusions set forth herein.

As of the date hereof, we are of the following opinions and conclusions:

1. The Dealer Manager Agreement has been duly executed and delivered by the Issuer and is a valid and binding agreement of the Issuer.

2. The statements contained in the Preliminary Official Statement under the captions [“SECURITY FOR THE BONDS,” “THE BONDS” (excluding information about DTC or book -entry or under the subcaption “Book -Entry Only System”), and “TAX MATTERS,” ] excluding any material that may be treated as included under such captions by cross reference or reference to other documents or sources, any information marked as preliminary, subject to change, and any information permitted to be omitted by Securities and Exchange Commission Rule 15c2 -12 or otherwise left blank, insofar as such statements expressly summarize certain provisions of the Indenture, or set out the proposed content of our final legal opinion as transaction counsel to the Issuer concerning the validity of the Bonds and certain other matters, are accurate in all material respects.

Without having underta ken to determine independently the accuracy or completeness of the statements contained in the Invitation, we further advise you that nothing has come to our attention which would lead us to believe that, as of the date of hereof, the Invitation contains any untrue statement of a material fact or omits to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.

Very truly yours,
Exhibit B
B-1
3769365.5 046549 AGMT

[FORM OF OPINION OF COUNSEL TO THE DEALER MANAGER]
[Invitation Date]

Jefferies LLC,
as Dealer Manager under
the Agreement referred to below
Los Angeles, California
Ladies and Gentlemen:

We have acted as your counsel in your capacity as dealer manager (in such capacity, the “Dealer Manager”) under that certain Dealer Manager Agreement, dated [Invitation Date] (the “Agreement”), between the Public Utilities Commission of the City and County of San Francisco (the “Commission”) and the Dealer Manager, and in connection the Commission inviting offers to tender for some or all of the Commission ’s outstanding [Name of Tendered Bonds] , pursuant to the Invitation (hereinafter mentioned), the Commission determining which tendered Bonds will be purchased, and the process of consummating the purchase of such tendered Bonds (the “Tender Offer”). Capitalized terms used herein and not otherwise defined have the meanings given such terms in the Agreement.

In rendering this opinion, we have examined originals or copies certified or otherwise identified to our satisfaction of : (i) the Indenture; (ii) the Invitation; (iii) the Agreement; (iv) a copy of the Preliminary Official Statement of the Commission, dated [Invitation Date], relating to the Series 2023 Bonds (the “Preliminary Official Statement”); (v) the opinion letter of Norton Rose Fulbright US LLP, as transaction counsel to the Commission (“Transaction Counsel”), dated the date hereof; (vi) a letter from Orrick, Herrington & Sutcliffe LLP, as disclosure counsel to the Commission (“Disclosure Counsel”), dated the date hereof, and (vii) such other documents, certificates, instructions and records as we have considered necessary or appropriate as a basis for our opinion.

Based on and subject to the foregoing, and in reliance thereon, as of the date hereof, we are of the opinion that the Invitation and the actions of the Commission in connection with the Tender Offer, as specifically set forth in the Invitation and Additional Material, are exempt from the provisions of Section 14(d) of the 1934 Act, Regulation 14D and 14E of the Securities and Exchange Commission and the related rules promulgated thereunder.

Although we have not undertaken to check the accuracy, completeness or fairness of, or verified the information contained in, the Preliminary Official Statement and are therefore unable

B-2
3769365.5 046549 AGMT

to make any representation to you in that regard, we have participated in conferences and other communications prior to the date of the Preliminary Official Statement with your representatives and representatives of the Commission, the City Attorney, the Commission’s Municipal Advisors, Transaction Counsel, Disclosure C ounsel and others, during which conferences and other communications the contents of the Preliminary Official Statement and related matters were discussed. Based upon the information made available to us in the course of our participation in such conferences and other communications, our review of the documents referred to above, our reliance on the certificates described above and our understanding of applicable law, we advise you as a matter of fact and not opinion that no facts came to the attention of the attorneys in our firm rendering legal services in connection with the preparation of the Invitation and the Preliminary Official Statement which cause us to believe that the Invitation, including the Preliminary Official Statement, as of its date contained any untrue statement of a material fact, or omitted to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading (except that we express no view with respect to any financial, statistical or economic data or forecasts, numbers, charts, tables, graphs, estimates, projections, assumptions or expressions of opinion, CUSIP numbers, DTC and its system and procedures, information in the Preliminary Official Statement under the head ings [_____________] or information regarding the tax- exempt status of the Series 2023 Bonds, and the Appendices thereto). No responsibility is undertaken or opinion rendered with respect to any other disclosure document, materials or activity.

This opinion is being rendered to you solely for your benefit in connection with your role as Dealer Manager in connection with the Tender Offer described herein and is not to be used, circulated, quoted or otherwise referred to for any other purpose without our prior written consent.

No attorney-client relationship has existed or exists between our firm and the Commission by virtue of this letter. This opinion is limited to matters governed by the laws of the State of California and federal securities laws, and we assume no responsibility with respect to the applicability of the effect of the laws of any other jurisdiction.

We have not undertaken any duty, and expressly disclaim any responsibility, to advise you as to events occurring after the date hereof with respect to the Invitation, the Preliminary Official Statement, or other matters discussed in the Preliminary Official Statement.

Respectfully submitted,

Exhibit C
C-1
3769365.5 046549 AGMT
[FORM OF LETTER OF ISSUER DISCLOSURE COUNSEL]
[Invitation Date]
Public Utilities Commission of the
City and County of San Francisco
San Francisco, California
[To be provided by Orrick, Herrington & Sutcliffe LLP]
Ladies and Gentlemen:

We have acted as Disclosure Counsel to the Public Utilities Commission of the City and County of San Francisco (the “Commission”) in connection with (i) the Commission inviting offers to tender some or all of the Commission’s outstanding [_________] (the “Bonds”) pursuant to the Commission’s Invitation to Offer Bonds for Purchase, dated [Invitation Date] (the “Invitation”), (ii) the Commission determining which tendered Bonds will be purchased, and (iii) the process of consummating the purchase of such tendered Bonds (collectively, the “Tender Offer”). In that capacity, we assisted the Commission in the preparation of its Preliminary Official Statement, dated [Invitation Date] (the “Preliminary Official Statement”), relating to the Commission’s Water Reven ue Bonds, 2023 Series DE (the “2023 Bonds”), which Preliminary Official Statement is included in the Invitation as Appendix A attached thereto. The Commission has entered into the Dealer Manager Agreement, dated [Invitation Date] (the “Dealer Manager Agreement”), with Jefferies LLC (the “Dealer Manager”), in connection with the Tender Offer.

This letter is being delivered in accordance with Section 5(e) of the Dealer Manager Agreement.

Capitalized terms used in this letter and not otherwise defined herein shall have the meanings ascribed to them in the Preliminary Official Statement.

In our capacity as Disclosure Counsel to the Commission with respect to the Preliminary Official Statement, we advise you, as a matter of fact but not opinion, that during the course of our engagement as Disclosure Counsel to the Commission with respect to the Preliminary Official Statement, no facts came to the attention of the attorneys of our firm rendering legal services in connection with this matter that caused them to believe that the Preliminary Official Statement as of the date of the Preliminary Official Statement (except for (i) information permitted to be omitted from the Preliminary Official Statement pursuant to Rule 15c2 -12, as amended, promulgated by the Securiti es and Exchange Commission, (ii) any financial, statistical or economic data or forecasts, numbers, charts, tables, graphs, estimates, projections, assumptions or expressions of opinion, (iii) any information about the tax status of interest on the 2023 Bonds, and (iv) any statements concerning the book-entry system, as to all of which no advice is given by us), contains any untrue statement of a material fact or omits to state any material fact necessary in order to make the statements therein, in the ligh t of the circumstances under which they were made, not misleading.

Very truly yours,

C-2
3769365.5 046549 AGMT
[Invitation Date]
Jefferies LLC,
as Dealer Manager
New York, New York
[Form of Reliance Letter to be provided by Orrick, Herrington & Sutcliffe LLP] Ladies and Gentlemen:

In our capacity as Disclosure Counsel to the Public Utilities Commission of the City and County of San Francisco (the “Commission”) regarding the Preliminary Official Statement, dated [Invitation Date] (the “Preliminary Official Statement”), which Preliminary Official Statement is included in the Commission’s Invitation to Offer Bonds for Purchase, dated [Invitation Date], as Appendix A attached thereto, we delivered on this date a letter addressed to the Commission, in accordance with Section 5(e) of the Dealer Manager Agreement, dated as of [Invitation Date], between the Commission and Jefferies LLC (the “Dealer Manager”).

You are entitled to rely on that letter to the same extent as if it were addressed to you. This reliance letter is not intended to create, and does not create, an attorney-client relationship with the Dealer Manager.

Very truly yours,

134831002.6

INVITATION TO TENDER BONDS FOR PURCHASE
made by

PUBLIC UTILITIES COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO to the Holders of the

SAN FRANCISCO WATER REVENUE BONDS, [___] SERIES [___], [___] SUB-SERIES [___], BASE CUSIP: [___],
of the maturities and corresponding CUSIP numbers listed on the inside cover pages hereof

SAN FRANCISCO WATER REVENUE BONDS, [___] SERIES [___], [___] SUB-SERIES [___], BASE CUSIP: [___],
of the maturities and corresponding CUSIP numbers listed on the inside cover pages h ereof

SAN FRANCISCO WATER REVENUE BONDS, [___] SERIES [___], [___] SUB-SERIES [___], BASE CUSIP: [___],
of the maturities and corresponding CUSIP numbers listed on the inside cover pages hereof and
SAN FRANCISCO WATER REVENUE BONDS, [___] SERIES [___], [___] SUB-SERIES [___], BASE CUSIP: [___],
of the maturities and corresponding CUSIP numbers listed on the inside cover pages hereof

THIS INVITATION WILL EXPIRE AT 5:00 P.M. NEW YORK CITY TIME, ON [ JUNE 23], 2023

UNLESS EARLIER CANCELED OR EXTENDED AS DESCRIBED HEREIN

This Invitation to Tender Bonds for Purchase, dated [June 14], 2023 (as it may be amended or supplemented, including the cover page, inside cover pages and Appendix A, this “Invitation”), is made by the Public Utilities Commission of the City and County of San Francisco (the “Commission”), with the assistance of Jefferies LLC, as Dealer Manager (the “ Dealer Manager”), to the beneficial owners (the “ Holders” or “Bondholders”) of certain maturities of the Commission’s San Francisco Water Revenue Bonds, [___] Series [___], [___] Sub-Series [___], San Francisco Water Revenue Bonds, [___] Series [___], [___] Sub-Series [___], San Francisco Water Revenue Bonds, [___] Series [___], [___] Sub- Series [___], San Francisco Water Revenue Bonds, [___] Series [___], [___] Sub-Series [___], San Francisco Water Revenue Bonds, [___] Series [___], [___] Sub-Series [___], San Francisco Water Revenue Bonds, [___] Series [___], [___] Sub-Series [___] and San Francisco Water Revenue Bonds, [___] Series [___], [___] Sub -Series [___] (the “Target Bonds”). The Commission is inviting the Holders of the Target Bonds of each CUSIP noted on the inside cover pages hereof to tender all or a portion of their Target Bonds of such CUSIP to the Commission at the offer prices to be set forth in the Pricing Notice, which is expected to be dated on or about [June 16], 202 3 (as it may be amended and supplemented, the “Pricing Notice” a form of which is attached hereto as APPENDIX B). The offer prices will be determined as follows:
• with respect to the federally taxable Target Bonds listed in the Taxable Bond Tables on [pages (i)-(__)] of this Invitation (the “Taxable Bonds”), the offer price will be based on a fixed spread to be added to the yields on certain benchmark United States Treasury Securities; and
• with respect to the tax -exempt Target Bonds listed in the Tax-Exempt Bond Tables on [pages (__)-(__)] of this Invitation (the “Tax- Exempt Bonds”), the offer prices will be the purchase prices set forth in the Pricing Notice.

Should the Commission determine to purchase any Target Bonds of a CUSIP, there will be a single purchase price (a “Purchase Price”) for the Target Bonds of such CUSIP at which all such Target Bonds will be purchased. The Target Bonds, if any, that the Commission decides to purchase will be purchased on [July 20], 2023, unless such date is extended by the Commission, assuming all conditions to the Invitation have then been satisfied or waived by the Commission (such date being the “Settlement Date”). Accrued interest on the Target Bonds, if any, purchased by the Commission to but not including the Settlement Date (the “Accrued Interest”) also will be paid on the Settlement Date.

The principal amount of the Target Bonds of each CUSIP that the Commission determines to purchase, if any, will not exceed the “Maximum Principal Amount that may be Accepted for Purchase if Tendered” for such CUSIP as set forth on the inside cover pages hereof. The total of each Purchase Price of the Target Bonds by CUSIP validly tendered for purchase (the “Aggregate Purchase Price”) will be funded from

net proceeds of the Commission’s San Francisco Water Revenue Bonds, 2023 Series CD, 2023 Sub-Series C (Refunding) (WSIP) (Green Bonds) and 2023 Sub-Series D (Refunding) (Local Water) (together, the “2023 Refunding Bonds”), intended to be issued on the Settlement Date and other available moneys of the Commission, if any. If issued, the 2023 Refunding Bonds will be dated [July 20], 2023 and be issued in the manner, on the terms and with the security therefor described in the Preliminary Official Statement , dated [June 14], 2023 attached hereto as APPENDIX A (the “2023 Refunding POS”).

THE PURCHASE BY THE COMMISSION OF ANY TARGET BONDS IS CONTINGENT, AMONG OTHER THINGS, UPON THE ISSUANCE OF THE 2023 REFUNDING BONDS.

HOLDERS OF TARGET BONDS WHO DO NOT TENDER THEIR TARGET BONDS , AS WELL AS TARGET BONDS

THAT THE COMMISSION DOES NOT PURCHASE IN RESPONSE TO THIS INVITATION (ALL SUCH TARGET BONDS, THE “UNTENDERED BONDS”) WILL BE RETURNED TO THE RESPECTIVE HOLDERS THAT TENDERED SUCH TARGET BONDS AND SUCH UNTENDERED BONDS WILL REMAIN OUTSTANDING. See “INTRODUCTION – General” and “– Untendered Bonds” herein. THE COMMISSION RESERVES THE RIGHT TO, AND MAY DECIDE TO, REFUND NOW OR IN THE FUTURE (ON AN

ADVANCE OR CURRENT BASIS) SOME OR ALL OF THE UNTENDERED BONDS THROUGH THE ISSUANCE OF OTHER

TAXABLE OR TAX-EXEMPT OBLIGATIONS OF THE COMMISSION OR OTHERWISE, OR, IN THE FUTURE, TO OFFER TO PURCHASE OR EXCHANGE, SOME OR ALL OF THE UNTENDERED BONDS.

To make an informed decision as to whether, and how, to tender Target Bonds for purchase pursuant to this Invitation, Holders must read this Invitation, including the 2023 Refunding POS attached hereto, carefully, and consult with their broker, account executive, financial advisor, attorney or other appropriate professional. For more information about risks concerning this Invitation , please see “ADDITIONAL CONSIDERATIONS” herein.

Any Bondholder wishing to tender Target Bonds for purchase in response to this Invitation must follow the procedures for tenders more specifically described herein. Bondholder s and their Financial Representatives (as defined herein) with questions about this Invitation should contact the Dealer Manager or the Information Agent and Tender Agent.

Key Dates and Times
All of these dates and times are subject to change. All times are New York City time.

Notices of changes will be sent in the manner provided for in this Invitation.

Launch Date and Post 2023 Refunding POS .................................................................................................................. [Wednesday, June 14], 2023 Pricing Notice ..................................................................................................................................................... On or about [Friday, June 16], 2023 Expiration Date .................................................................................................................................................. 5:00 p.m. on [Friday, June 23], 2023 Preliminary Acceptance Date ............................................................................................................................................. [Thursday, June 29], 2023 Preliminary Acceptance Notice ............................................................................................. Approximately 8:00 a.m. on [Thursday, June 29], 2023 Determination of Taxable Bonds Purchase Price................................................................. Approximately 10:00 a.m. on [Thursday, June 29], 2023 Notice of Taxable Bonds Purchase Price ........................................................................................................................... [Thursday, June 29], 2023 Final Acceptance Date and Final Acceptance Notice ..............................................................................................................[Friday , June 30], 2023 Settlement Date ................................................................................................................................................................... [Thursday, July 20], 2023

The Dealer Manager
for this Invitation is
The Information Agent and Tender Agent
for this Invitation is
Jefferies LLC Globic Advisors

134831002.6 i

TARGET BONDS SUBJECT TO THIS INVITATION
----------------------------------

TAXABLE BONDS
San Francisco Water Revenue Bonds
Series and Subseries
Maturity Date
(November 1)
CUSIP
No.*
Original
Principal
Amount
Interest
Rate
Principal
Amount
Outstanding
Maximum Principal Amount
that may be Accepted for
Purchase if Tendered
Benchmark U.S. Treasury
Security†‡
Indicative
Fixed
Spread§‡
[___] Series [___],
[___] Sub-Series [___]
20_ $ % $ $ _____% UST maturing _/_/20__
CUSIP: _______

[___] Series [___],
[___] Sub-Series [___]
20_ _____% UST maturing _/_/20__
CUSIP:

[Summary of redemption provisions of target bonds.]

[Additional footnotes to be added for maturities expected to be refunded with an escrow.]

* CUSIP is a registered trademark of the American Bankers Association. CUSIP information herein is provided by CUSIP Global Services, managed on behalf of the American Bankers Association by FactSet Research Systems Inc .

This information is not intended to create a database and does not serve in any way as a substitute for the CUSIP Services. CUSIP numbers are provided for convenience of reference only. None of the Commission , the Dealer Manager, the Information Agent and Tender Agent nor their respective agents or counsel assume s responsibility for the accuracy of such numbers. † The yield on each Benchmark U.S. Treasury Security to be used in establishing the Purchase Price for the Bonds will be base d on the bid-side price of the applicable U.S. Benchmark Treasury as quoted on the Bloomberg Bond Trader FIT1 series of pages at 10:00 a.m., New York City time, on _______ __, 2023. See “TERMS OF THIS INVITATION – Determination of Bonds Purchase Spread and Purchase Price” herein. ‡ Indicative Fixed Spreads [and Benchmark Treasury Securities] are preliminary and subject to change. Actual Fixed Spreads [and Benchmark Treasury Securities] will appear in the Pricing Notice. The Purchase Price to be paid on the Settlement Date excludes Accrued Interest on the Target Bonds tendered for purchase, which interest will be paid up to but not including the Settlement Date in addition to the Purchase Price.

§ The Target Bond maturing November 1, 20__ (CUSIP ______), is priced to its average life of _____, 20__, the Target Bond maturing November 1, 20__ (CUSIP ______), is priced to its average life of _____, 20__, the Target Bond maturing November 1, 20__ (CUSIP _____), is priced to its average life of _____, 20__, the Target Bond maturing November 1, 20__ (CUSIP _______), is priced to its average life of _____, 20__, the Target Bond maturing November 1, 20__ (CUSIP ______), is priced to its average life of ______, 20__, the Target Bond maturing November 1, 20__ (CUSIP _______), is priced to its average life of _____, 20__, and the Target Bond maturing November 1, 20__ (CUSIP ______), is priced to its average life of _____, 20__.

134831002.6 ii

TAX-EXEMPT BONDS
San Francisco Water Revenue Bonds
Series and Subseries
Maturity Date
(November 1)
CUSIP No.
(Base 79765R)*
Original
Principal
Amount
Interest
Rate
Principal
Amount
Outstanding
Maximum Principal
Amount that may be
Accepted for Purchase if
Tendered
Indicative
Purchase
Price as a
Percentage
of Par†
[___] Series [___],
[___] Sub-Series [___]
20_ $ % $ $
[___] Series [___],
[___] Sub-Series [___]
20_
[___] Series [___],
[___] Sub-Series [___]
20_
[___] Series [___],
[___] Sub-Series [___]
20_
[___] Series [___],
[___] Sub-Series [___]
20_
[___] Series [___],
[___] Sub-Series [___]
20_
[___] Series [___],
[___] Sub-Series [___]
20_
[___] Series [___],
[___] Sub-Series [___]
20_
[___] Series [___],
[___] Sub-Series [___]
20_
[___] Series [___],
[___] Sub-Series [___]
20_
[___] Series [___],
[___] Sub-Series [___]
20_
[___] Series [___],
[___] Sub-Series [___]
20_
[___] Series [___],
[___] Sub-Series [___]
20_

[Summary of redemption provisions of target bonds.]

[Additional footnotes to be added for maturities expected to be refunded with an escrow.]

* CUSIP is a registered trademark of the American Bankers Association. CUSIP inform ation herein is provided by CUSIP Global Services, managed on behalf of the American Bankers Association by FactSet Research Systems Inc .

134831002.6 i

PROVISIONS APPLICABLE TO THE INVITATION
On [June 16], 2023, the Pricing Notice will be made available: (i) at the Municipal Secu rities Rulemaking Board through its Electronic Municipal Market Access website, currently located at http://emma.msrb.org (the “EMMA Website”), using the CUSIP numbers for the Target Bonds listed in the “TARGET BONDS SUBJECT TO THIS INVITATION ” tables abov e; (ii) to The Depository Trust Company (“DTC”) and to the DTC participants holding the Target Bonds (as shown in a securities position report obtained by the Information Agent and Tender Agent); and (iii) by posting electronically on the website of the Information Agent and Tender Agent at https://www.globic.com/______.

The Purchase Prices for the Tax-Exempt Bonds will be set forth in the Pricing Notice.

On [June 29], 2023, the Notice of Taxable Bonds Purchase Price will be made available: (i) at the EMMA Website, using the CUSIP numbers for the Taxable Bonds listed in the “ TARGET BONDS SUB JECT TO THIS INVITATION” tables above; (ii) to DTC and to the DTC participants holding the Target Bonds (as shown in a securities position report obtained by the Information Agent and Tender Agent); and (iii) by posting electronically on the website of the Information Agent and Tender Agent at https://www.globic.com/______.

The Notice of Taxable Bonds Purchase Price will set forth the applicable Treasury yields, or Purchase Yields, which, together with the Fixed Spread determined in the Pricing Notice, will determine the P urchase Price for the Taxable Bonds.

The 2023 Refunding POS (attached hereto as APPENDIX A) is or will be made available, as an attachment to this Invitation: (i) at the EMMA Website, using the CUSIP numbers for the Target Bonds listed in the “TARGET BONDS SUBJECT TO THIS INVITATION” tables in this Invitation; (ii) to DTC and to the DTC participants holding the Target Bonds (as shown in a securities position report obtained by the Information Agent and Tender Agent); and (iii) by posting electronically on the website of the Information Agent and Tender Agent at https://www.globic.com/______.

The consummation of this Invitation is also subject to certain conditions. See “INTRODUCTION – General” herein.

134831002.6 i

IMPORTANT INFORMATION
This Invitation and the other information with respect to this Invitation are and will be available from Jefferies LLC (the “ Dealer Manager ”) and Globic Advisors (the “ Information Agent and Tender Agent ”) at https://emma.msrb.org and https://www.globic.com/ _____. Bondholders wishing to tender their Target Bonds for purchase pursuant to this Invitation must follow the procedures described in this Invitation. The Commission reserves the right to cancel, amend or otherwise modify or waive any terms or conditions of this Invitation as described herein.

The Commission will have no obligation to purchase Target Bonds if this Invitation is cancelled or if the Commission fails to accept tenders. The Commission further reserves the right to accept nonconforming tenders of Target Bonds or waive irregularities in any tender of Target Bonds. TARGET BONDS WHICH THE COMMISSION DOES NOT PURCHASE IN RESPONSE TO THIS INVITATION (SUCH TARGET BONDS, THE “ UNTENDERED BONDS”) WILL

BE RETURNED TO THE RESPECTIVE HOLDERS THAT TENDERED SUCH TARGET BON DS AND SUCH UNTENDERED BONDS WILL REMAIN OUTSTANDING. THE COMMISSION RESERVES THE RIGHT TO, AND MAY

DECIDE TO, REFUND NOW OR IN THE FUTURE (ON AN ADVANCE OR CURRENT BASIS) SOME OR ALL OF THE

UNTENDERED BONDS THROUGH THE ISSUANCE OF OTHER TAXABLE OR TAX-EXEMPT OBLIGATIONS OF THE

COMMISSION OR OTHERWISE, OR, IN THE FUTURE, TO OFFER TO PURCHASE OR EXCHANGE, SOME OR ALL OF THE UNTENDERED BONDS. The purchase by the Commission of any Target Bonds pursuant to this Invitation is contingent upon the issuance and sale of the 2023 Refunding Bonds. The issuance of the 2023 Refunding Bonds is subject to market conditions and conditions to be satisfied on or prior to the Settlement Date. The consummation of this Invitation is also subject to certain other conditions as described herein.

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES

COMMISSION HAS APPROVED OR DISAPPROVED OF THIS INVITATION OR PASSED UPON THE

FAIRNESS OR MERITS OF THIS INVITATION OR UPON THE ACCURACY OR ADEQUACY OF THE INFORMATION CONTAINED IN THIS INVITATION. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

This Invitation is not being extended to, and Target Bonds tendered in response to this Invitation will not be accepted from or on behalf of, Bondholders in any jurisdiction in which this Invitation or such acceptance thereof would not be in compliance with the laws of such jurisdiction. In any jurisdictions where the securities, “blue sky” or other laws require this Invitation to be made through a licensed or registered broker or dealer, this Invitation shall be deemed to be made on behalf of the Commission through the Dealer Manager.

References to web site addresses herein are for informational purposes only and may be in the form of a hyperlink solely for the reader’s convenience. Unless specified otherwise, such web sites and the information or links contained therein are not incorporated into, and are not a part of, this Invitation.

No dealer, salesperson or other person has been authorized to give any information or to make any representation not contained in this Invitation, and, if given or made, such information or representation may not be relied upon as having been authorized by the Commission or any of its affiliates.

The delivery of this Invitation shall not under any circumstances create any implication that any information contained herein is correct as of any time subsequent to the date hereof o r that there has been no change in the information set forth herein or in any attachments hereto or materials delivered herewith or in the affairs of the Commission, or its affiliates, since the date hereof . The information contained in this Invitation is as of the date of this Invitation only and is subject to change, completion, or amendment without notice.

Certain statements included or incorporated by reference into this Invitation constitute “forward -looking statements.” Such statements are generally identifiable by the terminology used such as “forecast,” “plan,” “expect,” “estimate,” “budget” or similar words . The achievement of certain results or other expectations contained in such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements described to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The Commission does not plan to issue any updates or revisions to those forward-looking statements if or when changes to its expectations, or events, conditions or circumstances on which such statements are based, occur.

This Invitation contains important information which should be read in its entirety before any decision is made with respect to this Invitation.

TABLE OF CONTENTS

Page

134831002.6/1001221269 ii
INTRODUCTION ....................................................................................................................................................... 1 General ........................................................................................................................................................................ 1 Binding Contract to Sell .............................................................................................................................................. 2 Sources of Funds to Purchase Target Bonds................................................................................................................ 3 Brokerage Commissions and Solicitation Fees............................................................................................................ 3 Untendered Bonds ....................................................................................................................................................... 3 Dealer Manager, Information Agent and Tender Agent .............................................................................................. 3 TERMS OF THIS INVITATION ................................................................................................................................ 3 Expiration Date ............................................................................................................................................................ 3 Tenders Only Through the Commission’s DTC ATOP Account ................................................................................ 4 Information to Bondholders ......................................................................................................................................... 4 Authorized Denominations .......................................................................................................................................... 4 Provisions Applicable to All Tenders .......................................................................................................................... 4 Representations by Tendering Bondholders to the Commission ................................................................................. 5 Tender of Target Bonds by Financial Institutions; DTC ATOP Account.................................................................... 5 Determinations as to Form and Validity of Tender Offer; Right of Waiver ................................................................ 6 Amendments and Withdrawals of Tenders Prior to Expiration Date .......................................................................... 6 Determination of Purchase Prices ................................................................................................................................ 7 Adjustment of Sinking Fund Provisions ...................................................................................................................... 8 Determination of Amounts to be Purchased ................................................................................................................ 8 Preliminary Acceptance Notice ................................................................................................................................... 9 Final Acceptance Notice .............................................................................................................................................. 9 Settlement Date; Purchase of Target Bonds ................................................................................................................ 9 Extension, Cancellation and Amendment; Changes to Terms ................................................................................... 10 ADDITIONAL CONSIDERATIONS ....................................................................................................................... 10 SUMMARY OF CERTAIN FEDERAL INCOME TAX CONSEQUENCES [UNDER REVIEW] ........................ 11 DEALER MANAGER .............................................................................................................................................. 12 INFORMATION AGENT AND TENDER AGENT ................................................................................................ 13 MISCELLANEOUS .................................................................................................................................................. 13 APPENDIX A: Series 2023 Preliminary Official Statement
APPENDIX B: Form of Pricing Notice

134831002.6/1001221269 1

INVITATION TO TENDER BONDS FOR PURCHASE
made by

PUBLIC UTILITIES COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO to the Holders of the

PUBLIC UTILITIES COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO SAN FRANCISCO WATER REVENUE BONDS, [___] SERIES [___], [___] SUB-SERIES [___], BASE CUSIP: [___],
of the maturities and corresponding CUSIP numbers listed on the inside cover pages hereof SAN FRANCISCO WATER REVENUE BONDS, [___] SERIES [___], [___] SUB-SERIES [___], BASE CUSIP: [___],
of the maturities and corresponding CUSIP numbers listed on the inside cover pages hereof SAN FRANCISCO WATER REVENUE BONDS, [___] SERIES [___], [___] SUB-SERIES [___], BASE CUSIP: [___],
of the maturities and corresponding CUSIP numbers listed on the inside cover pages hereof SAN FRANCISCO WATER REVENUE BONDS, [___] SERIES [___], [___] SUB-SERIES [___], BASE CUSIP: [___],
of the maturities and corresponding CUSIP numbers listed on the inside cover pages hereof SAN FRANCISCO WATER REVENUE BONDS, [___] SERIES [___], [___] SUB-SERIES [___], BASE CUSIP: [___],
of the maturities and corresponding CUSIP numbers listed on the inside cover pages hereof SAN FRANCISCO WATER REVENUE BONDS, [___] SERIES [___], [___] SUB-SERIES [___], BASE CUSIP: [___],
of the maturities and corresponding CUSIP numbers listed on the inside cover pages hereof and
SAN FRANCISCO WATER REVENUE BONDS, [___] SERIES [___], [___] SUB-SERIES [___], BASE CUSIP: [___],
of the maturities and corresponding CUSIP numbers listed on the inside cover pages hereof

INTRODUCTION
General
This Invitation to Tender Bonds for Purchase, dated [June 14], 2023 (as it may be amended or supplemented, including the cover page, inside cover pages and Appendix A, this “ Invitation”), is made by the Public Utilities Commission of the City and County of San Francisco (the “Commission”), with the assistance of Jefferies LLC, as Dealer Manager (the “Dealer Manager ”), to the beneficial owners (the “ Holders” or “ Bondholders”) of certain maturities of the Commission’s San Francisco Water Revenue Bonds, [___] Series [___], [___] Sub-Series [___], San Francisco Water Revenue Bonds, [___] Series [___], [___] Sub- Series [___], San Francisco Water Revenue Bonds, [___] Series [___], [___] Sub-Series [___], San Francisco Water Revenue Bonds, [___] Series [___], [___] Sub-Series [___], San Francisco Water Revenue Bonds, [___] Series [___], [___] Sub-Series [___], San Francisco Water Revenue Bonds, [___] Series [___], [___] Sub-Series [___] and San Francisco Water Revenue Bonds, [___] Series [___], [___] Sub-Series [___], as described on the inside cover pages hereof (the “Target Bonds”). The Commission is inviting the Holders of the Target Bonds of each CUSIP noted on the inside cover pages hereof to tender all or a portion of their Target Bonds of such CUSIP to the Commission at the offer prices to be set forth in the Pricing Notice, which is expected to be dated on or about [June 16], 2023 (as it may be amended and supplemented, the “Pricing Notice” a form of which is attached hereto as APPENDIX B). The offer prices will be determined as follows:
• with respect to the federally taxable Targ et Bonds listed in the Taxable Bond Tables on [ pages (i)-(__)] of this Invitation (the “Taxable Bonds”), the offer price will be based on a fixed spread to be added to the yields on certain benchmark United States Treasury Securities; and

134831002.6 2
• with respect to the tax -exempt Target Bonds listed in the Tax -Exempt Bond Tables on [pages (__) -(__)] of this Invitation (the “Tax-Exempt Bonds”), the offer prices will be the purchase prices set forth in the Pricing Notice.

Should the Commission determine to purchase any Target Bonds of a CUSIP, there will be a single purchase price (a “Purchase Price”) for the Target Bonds of such CUSIP that will apply to all such Target Bonds purchased.

The Target Bonds, if any, that the Commission decides to purchase will be purchased on [July 20], 2023, unless such date is extended by the Commission, assuming all conditions to the Invitation have then been satisfied or waived by the Commission (such date being the “Settlement Date” ). Accrued interest on the Target Bonds, if any, purcha sed by the Commission to but not including the Settlement Date (the “Accrued Interest”) also will be paid on the Settlement Date.

The Commission may decide to purchase less than all (or none) of the Target Bond s tendered to the Commission (see “TERMS OF THIS INVITATION – Determination of Amounts to be Purchased” herein). Target Bonds must be validly tendered for purchase by 5:00 p.m., New York City time, on [June 23], 2023 (or such later date as the Commission may determine, the “ Expiration Date”). The Commission reserves the right to extend, amend, waive the terms of or otherwise modify this Invitation at any time on or prior to the Expiration Date. The Commission also reserves the right , at any time prior to the Settlement Date , to cancel this Invitation for any reason in the Commission’s sole discretion. See “TERMS OF THIS INVITATION – Extension, Cancellation and Amendment; Changes to Terms” herein for a description of the right of the Commission to extend, cancel, amend, waive the terms of or otherwise modify this Invitation.

TO MAKE AN INFORMED DECISION AS TO WHETHER, AND HOW, TO TENDER TARGET BONDS FOR PURCHASE, BONDHOLDERS MUST READ THIS INVITATION, INCLUDING THE 2023 REFUNDING POS IN APPENDIX A HERETO.

None of the Commission, the Dealer Manager nor the Information Agent and Tender Agent (as defined herein) makes any recommendation that any Bondholder tender or refrain from tendering all or any portion of such Bondholder’s Target Bonds for purchase. Bondholders must make their own decisions and should read this Invitation carefully and consult with their broker, account executive, financial advisor, attorney or other appropriate professional in making these decisions.

The total of the Purchase Price of the Target Bonds of each CUSIP validly tendered and accepted for purchase pursuant to this Invitation (the “Aggregate Purchase Price”) will be funded from net proceeds of the Commission’s San Francisco Water Revenue Bonds, 2023 Series CD, 2023 Sub-Series C (Refunding) (WSIP) (Green Bonds) and 2023 Sub-Series D (Refunding) (Local Water) (together, the “2023 Refunding Bonds”), intended to be issued on the Settlement Date and other available moneys of the Commission, if any.

THE PURCHASE BY THE COMMISSION OF ANY TARGET BOND S IS CONTINGENT UPON THE ISSUANCE AND SALE OF THE 2023 REFUNDING BONDS. See “– Sources of Funds to Purchase Target Bonds” herein.

Target Bonds which the Commission does not purchase in response to this Invitation (such Target Bonds, the “ Untendered Bonds”) will be returned to the respective Holders that tendered such Target Bonds, and such Untendered Bonds will continue to be outstanding, and payable and secured, pursuant to the terms of the Amended and Restated Indenture, dated as of August 1, 2002 (as supplemented and amended, the “Indenture”), by and between the Commission and the U.S. Bank Trust Company, National Association, as successor trustee (the “Trustee” ).

Holders of Untendered Bonds will continue to bear the risk of ownership of such Untendered Bonds, including the risk of redemption pursuant to the terms of such bonds. See “– Untendered Bonds” herein.

Binding Contract to Sell
If a Bondholder ’s tender of Targe t Bonds is accepted by the Commission by the time specified herein, the Bondholder will be obligated to sell, and the Commission will be obligated to purchase, such Target Bonds on the Settlement Date at the Purchase Price for such Target Bonds, plus Accrued Interest, subject to the conditions described herein.

134831002.6 3
Sources of Funds to Purchase Target Bonds
The Aggregate Purchase Price of the Target Bonds validly tendered for purchase pursuant to this Invitation will be funded from net proceeds of the 2023 Refunding Bonds , intended to be issued on the Settlement Dat e and other available moneys of the Commission, if any.

The issuance of the 2023 Refunding Bonds is subject to market conditions and conditions to be satisfied on or prior to the Settlement Date. The 2023 Refunding Bonds are not being offered pursuant to this Invitation.

Brokerage Commissions and Solicitation Fees
Bondholders will not be obligated to pay any brokerage commissions or solicitation fees to the Commission, the Dealer Manager, or the Information Agent and Tender Agent in connection with this Invitation . However, each Bondholder should check with its broker, bank, account executive or other financial institution that maintains the account in which their Target Bonds are held (their “Financial Representative”) to determine whether it will charge any commissions or fees.

Untendered Bonds
For certain information concerning the Target Bond s, including risks associated with holding Untendered Bonds, see the Preliminary Official Statement for the 2023 Refunding Bonds attached hereto as Appendix A (the “2023 Refunding POS”). Bondholders must read the entirety of this Invitation, including Appendix A, in order to make an informed decision.

The purchase by the Commission of any Target Bonds is contingent upon the issuance and sale of the 2023 Refunding Bonds. See “– Sources of Funds to Purchase Target Bonds” herein.

The Commission reserves the right to, and may decide to, refund now or in the future (on an advance or current basis) some or all of the Untendered Bonds through the issuance of other taxable or tax-exempt obligations of the Commission or otherwise, or, in the future, to offer to purchase or exchange, some or all of the Untendered Bonds.

See “ADDITIONAL CONSIDERATIONS” herein.

The purchase by the Commission of Target Bonds may have certain potential adverse effects on H olders of Untendered Bonds, including the following:
• the principal amount of the Untendered Bonds available to trade publicly will be reduced, which could adversely affect the liquidity and market value of any Untendered Bonds; and • the average life of the remaining Untendered Bonds is likely to shorten.

Dealer Manager, Information Agent and Tender Agent
Jefferies LLC is the Dealer Manager for this Invitation. Investors with questions about this Invitation should contact the Dealer Manager or Globic Advisors, which serves as Information Agent and Tender Agent (the “Information Agent and Tender Agent”) for this Invitation, at the addresses and telephone numbers set forth on the page preceding Appendix A appended to this Invitation . See “DEALER MANAGER ” and “INFORMATION AGENT AND TENDER AGENT” herein.

TERMS OF THIS INVITATION
Expiration Date
The Commission’s invitation to tender hereunder will expire at 5:00 p.m., New York City time, on the Expiration Date. Holders who are interested in selling their Target Bonds on the Settlement Date must follow the

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procedures more specifically described herein. Holders and their Financial Representatives with questions about this Invitation should contact the Dealer Manager or the Information Agent and Tender Agent.

In the sole discretion of the Commission, the Commission may extend the Expiration Date, the Preliminary Acceptance Date, the Final Accept ance Date (each as defined herein) or the Settlement Date, or cancel, amend or otherwise modify or waive any conditions of this Invitation . See “ – Extension, Cancellation and Amendment; Changes to Terms” herein.

Tenders Only Through the Commission’s DTC ATOP Account
The Target Bonds are all held in book -entry-only form through the facilities of The Depository Trust Company (“DTC”) through banks, brokers and other institutions that are participants in DTC. All tenders of Target Bonds must be made through the Commission’s Automated Tender Offer Program account at DTC described herein (the “DTC ATOP account”). The Commission will not accept any tenders that are not made through the DTC ATOP account. As a result, Holders who are not DTC participants can only tender Target Bonds through the financial institution that maintains the DTC account in which their Target Bonds are held.

In order to ensure that each Holder receives proper consideration of the Purchase Price paid in connection with the purchase of such Holder’s Target Bonds, a Holder’s DTC participant should input such Holder’s tender instructions separately into the DTC ATOP account.

Information to Bondholders
The Commission may give information about this Invitation to the market and Holders by delivery of the information to the M unicipal Securities Rulemaking Board through its Electronic Municipal Market Access system (“EMMA”) and DTC (collectively, the “Information Services”). Delivery by the Commission of information to the Information Services will be deemed to constitute delivery of such information to each Holder.

Bondholders who would like to receive information furnished by the Commission to the Information Services must make appropriate arrangem ents with their Financial Representatives, or the Information Agent and Tender Agent.

Authorized Denominations
A Bondholder may tender Target Bonds for purchase of a particular CUSIP number that it owns in an amount of its choosing, but only in a principal amount equal to the minimum denomination of $5,000 (the “Authorized Denomination”) or any multiple of $5,000 in excess thereof.

Provisions Applicable to All Tenders
Need for Advice. A Bondholder should ask its Financial Representative or financial advisor for help in determining: (a) whether to tender Target Bonds of a particular CUSIP number for purchase, and (b) the principal amount of Target Bonds of such CUSIP number to be tendered, in each case in response to this Invitation . A Bondholder also should inquire as to whether its Financial Representative or financial advisor will charge a fee for submitting tenders if the Commission purchases t he Bondholder’s tendered Target Bond s. The Commission, the Dealer Manager, and the Information Agent and Tender Agent will not charge any Bondholder for tendering Target Bonds.

Need for Specificity of Tender . A tender cannot exceed the par amount of Targ et Bonds owned by the Bondholder and must include the following information: (1) the CUSIP number(s) of the Target Bond(s) being tendered, and (2) the principal amount of each CUSIP number being tendered (such principal amount must be stated in Authorized Denominations and if not so stated, for tenders of less than all of the holder’s position in the Target Bonds, such principal amount will be reduced to the greatest integral multiple of $5,000 equal to at least the applicable minimum Authorized Denomination) . Any Bondholder located outside of the United States should check with its broker to determine if there any additional minimal increments, alternative settlement timing or other limitations .

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“All or none” offers are not permitted.

No alternative, conditional or contingent tenders will be accepted. Holders who tender less than all of the Target Bonds that they hold must continue to hold their remaining Target Bonds in Authorized Denominations.

ALL TENDERS MUST BE MADE THROUGH THE DTC ATOP ACCOUNT. THE COMMISSION WILL NOT ACCEPT ANY TENDERS THAT ARE NOT MADE THROUGH THE DTC ATOP ACCOUNT.

LETTERS OF TRANSMITTAL ARE NOT BEING USED IN CONNECTION WITH TH IS INVITATION.

See “– Tender of Target Bonds by Financial Institutions; DTC ATOP Account” herein.

General. A Bondholder may only tender Target Bonds it owns. By tendering Target Bonds pursuant to this Invitation, a Bondholder will be deemed to have represented to, and agreed with, the Commission as set forth under “– Representations by Tendering Bondholders to the Commission” herein. All tenders shall survive the death or incapacity of the tendering Bondholder.

Representations by Tendering Bondholders to the Commission By tendering Target Bonds for purchase pursuant to this Invitation, each tendering Bondholder will be deemed to have represented to and agreed with the Commission that:
(a) the Bondholder has received this Invitation and has had the opportunity to review this Invitation prior to making its decision to tender Target Bonds, and agrees if the purchase of any tendered Target Bonds is consummated, the purchase of such Target Bonds shall be on the terms and conditions set forth in this Invitation; (b) the Bondholder has full power and authority to tender, sell, assign and trans fer the tendered Target Bonds; and on the Settlement Date, the Commission will acquire good, marketable and unencumbered title thereto, free and clear of all liens, charges, encumbrances, conditional sales agreements or other obligations and not subject to any adverse claims, subject to payment to the Bondholder of the Purchase Price for such Target Bonds plus, with respect to the Target Bonds, Accrued Interest;
(c) the Bondholder has made an independent decision to tender its Target Bonds for purchase pursuant to this Invitation , and as to the terms thereof, and such decision is based upon the Bondholder’s judgment and upon advice from such advisors with whom the Bondholder has determined to consult; (d) the Bondholder is not relying on any communication fr om the Commission, the Dealer Manager or the Information Agent and Tender Agent as investment advice or as a recommendation to tender the Bondholder’s Target Bonds, it being understood that the information from the Commission, the Dealer Manager and the Information Agent and Tender Agent related to the terms and conditions of this Invitation made pursuant to this Invitation shall not be considered investment advice or a recommendation to tender Target Bonds; and (e) the Bondholder is capable of assessing the merits of and understanding (on its own and/or through independent professional advice), and does understand, agree and accept, the terms and conditions of this Invitation.

Tender of Target Bonds by Financial Institutions; DTC ATOP Account The Commission, through the Information Agent and Tender Agent, will establish the DTC ATOP account for purposes of this Invitation within three Business Days (as defined below ) after the date of this Invitation. Tender of Target Bonds in accordance with this Invitation may be made to the Commission through the DTC ATOP account.

Any financial institution that is a participant in DTC may make a book- entry tender of the Target Bonds by causing DTC to transfer the applicable Target Bonds into the DTC ATOP account in accordance with DTC’s procedures.

Concurrently with the delivery of Target Bonds through book-entry transfer into the DTC ATOP account, an Agent’s Message (defined below) in connection with such book- entry transfer must be transmitted to and received at the DTC ATOP account by not later than 5:00 p.m. , New York City time, on the Expiration Date (as this date may have been changed pursuant to this Invitation).

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The confirmation of a book- entry transfer into the DTC ATOP account as described above is referred to herein as a “Book-Entry Confirmation.” The term “Agent’s Message” means a message transmitted by DTC to, and received by, the DTC participant and forming a part of the Book- Entry Confirmation which states that DTC has received an express acknowledgment from the DTC participant tendering the Target Bonds that are the subject of such Book-Entry Confirmation, stating (1) the CUSIP number, series, and principal amount of the Target Bonds that have been tendered by such participant pursuant to this Invitation, and (2) that such participant on behalf of the related Holder agrees to be bound by the terms of this Invitation. By causing DTC to transfer Target Bonds into the applicable Commission ATOP account, a financial institution warrants to the Commission that it has full authority, and has received from the Bondholder(s) of such Target Bonds all direction necessary, to tender and sell such Target Bonds as set forth in this Invitation.

Bondholders who are not DTC participants can only tender Bonds pursuant to this Invitation by making arrangements with and instructing their Financial Representative to tender the Bondholder’s Target Bonds through the applicable Commission ATOP account. To ensure a Bondholder’s Target Bonds are tendered to the applicable Commission ATOP account by 5:00 p.m., New York City time, on the Expiration Date, a Bondholder must provide instructions to its Financial Representative in sufficient time for the Financial Representative to tender the Bondholder’s Target Bonds to the applicable Commission ATOP account by this deadline. A Bondholder should contact its Financial Representative for information as to when the Financial Representative needs the Bondholder’s instructions in order to tender the Bondholder’s Target Bonds to the applicable State ATO P account by 5:00 p.m., New York City time, on the Expiration Date.

THE COMMISSION, THE DEALER MANAGER, AND THE INFORMATION AGENT AND

TENDER AGENT ARE NOT RESPONSIBLE FOR THE TRANSFER OF ANY TENDERED BONDS TO

THE APPLICABLE COMMISSION ATOP ACCOUNT OR FOR ANY MISTAKES, ERRORS OR OMISSIONS IN THE TRANSFER OF ANY TENDERED TARGET BONDS. “Business Day” means any day other than (i) a Saturday or a Sunday, or (ii) a day on which the offices of the Commission or banking institutions in California [or New York] are required or authorized by law to be closed.

Determinations as to Form and Validity of Tender Offer; Right of Waiver All questions as to the validity (including the time of receipt at the DTC ATOP account), form, eligibility, and acceptance of any Tar get Bonds tendered for purchase pursuant to this Invitation will be determined by the Commission in its sole discretion and will be final, conclusive, and binding on the Holders.

The Commission reserves the right to waive any irregularities or defects in any tender in response to this Invitation. The Commission, the Dealer Manager and the Information Agent and Tender Agent are not obligated to give notice to the Holders of any defects or irregularities in tenders of Target Bonds, and they will have no liability for failing to give such notice.

Amendments and Withdrawals of Tenders Prior to Expiration Date A Holder may amend its offer to tender for purchase in respect of the amount being tendered by causing an amended offer to be received at the DTC ATOP account by not later than 5:00 p.m., New York City time, on the Expiration Date.

An offer to tender for purchase may be withdrawn by a Bondholder in response to this Invitation by causing a withdrawal notice to be received at the DTC ATOP account by not later than 5:00 p.m., New York City time, on the Expiration Date.

Any amendment or withdrawal must be submitted in substantially the same manner as an offer in response to this Invitation. All amendments or withdrawal notices must be made through the DTC ATOP account. The Commission will not accept any amendments or withdrawals that are not made through the DTC ATOP account.

Holders who are not DTC participants can only amend or withdraw their offer to tender in response to this Invitation

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by making arrangements with and instructing their Financial Representative to submit the Holder’s amended offer or the Holder’s notice of withdrawal through the DTC ATOP account.

Bondholders who have tendered for purchase their Target Bonds will not receive any information from the Commission, the Dealer Managers or the Information Agent and Tender Agent concerning offers by other Bondholders. Offering Bondholders will not be afforded an opportunity to amend their offers after 5:00 p.m. on the Expiration Date. An amended or withdrawn offer must specify the applicable CUSIP number, and with respect to amended offers, the principal amount previously offered and the new amount being offered. All questions as to the validity (including the time of receipt) of an amendment or withdrawal will be dete rmined by the Commission in its sole discretion and will be final, conclusive and binding.

ALL TENDERS OF TARGET BONDS SHALL BE IRREVOCABLE AT 5:00 P.M. ON THE EXPIRATION DATE.

Determination of Purchase Prices
Determination of Purchase Prices for Taxable Bonds
On or about [June 16], 2023, the Commission will publish the Pricing Notice in the form attached hereto as APPENDIX B, which Pricing Notice will set forth (i) either (A) a confirmation of the indicative fixed spreads shown on [pages (i)-(__)] of this Invitation or (B) amendment to the fixed spreads (the “Fixed Spreads” ) for each CUSIP for the Taxable Bonds tendered.

The Pricing Notice will be made available: (i) at the Municipal Securities Rulemaking Board through its Electronic Municipal Market Access website, currently located at http://emma.msrb.org (the “EMMA Website”), using the CUSIP numbers for the Target Bonds listed in the “TARGET BONDS SUBJECT TO THIS INVITATION” tables above; (ii) to The Depository Trust Company (“DTC”) and to the DTC participants holding the Target Bonds (as shown in a securities position report obtained by the Information Agent and Tender Agent); and (iii) by posting electronically on the website of the Information Agent and Tender Agent at https://www.globic.com/___ ___.

The applicable Fixed Spread for a CUSIP will represent the spread which will be added to the yield on the Benchmark U.S. Treasury Security corresponding thereto to arrive at a yield (the “Purchase Yield”) used to calculate the Purchase Price for each maturity and corresponding CUSIP of the Taxable Bonds. The yield on the corresponding Benchmark U.S. Treasury Security will be based on the bid-side price of such Benchmark U.S. Treasury Security, as quoted on the Bloomberg Bond Trader FIT1 series of page s at approximately 10:00 a.m., New York City time, on [June 29], 2023.

On [June 29], 2023, the Notice of Taxable Bonds Purchase Price will be made available: (i) at the EMMA Website, using the CUSIP numbers for the Taxable Bonds listed in the “TARGET BONDS SUBJECT TO THIS INVITATION” tables above; (ii) to DTC and to the DTC p articipants holding the Target Bonds (as shown in a securities position report obtained by the Information Agent and Tender Agent); and (iii) by posting electronically on the website of the Information Agent and Tender Agent at https://www.globic.com/______. See “PROVISIONS APPLICABLE TO THE INVITATION” above.

The Purchase Price for the Taxable Bonds of each CUSIP will be calculated using the market standard bond pricing formula as of the Settlement Date using the applicable Purchase Yield and the maturity date of such Target Bonds except for t
he Target Bond maturing November 1, 20__ (CUSIP ______), will be to its average life of _____, 20__, the Target Bond maturing November 1, 20__ (CUSIP ______), will be to its average life of _____, 20__, the Target Bon d maturing November 1, 20__ (CUSIP _____), will be to its average life of _____, 20__, the Target Bond maturing November 1, 20__ (CUSIP _______), will be to its average life of _____, 20__, the Target Bond maturing November 1, 20__ (CUSIP ______), will be to its average life of ______, 20__, the Target Bond maturing November 1, 20__ (CUSIP _______), will be to its average life of _____, 20__, and the Target Bond maturing November 1, 20__ (CUSIP ______), will be to its average life of _____, 20__

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Determination of Purchase Prices for Tax-Exempt Bonds
The Pricing Notice will also set forth either (A) a confirmation of the indicative P urchase Prices shown on [pages (__)-(__)] of this Invitation, or (B) amendment to the prices to be paid by the Commission for each CUSIP for the Tax-Exempt Bonds tendered for purchase pursuant to this Invitation.

The purchase price for Tax-Exempt Bonds with each particular CUSIP tendered pursuant to this Invitation is the indicative price set forth on the inside cover pages of this Invitation or, if amended in the Pricing Notice, the amended price set forth in the Pricing Notice.

As stated above, t he Pricing Notice will be made available: (i) by posting at EMMA Website, using the CUSIP numbers for the Target Bonds listed in the tables under “TARGET BONDS SUBJECT TO THE TENDER OFFER”; (ii) to DTC and to the DTC participants holding the Target Bonds; and (iii) by posting electronically on the website of the Information Agent at https://www.globic.com/[____ ]. See “PROVISIONS APPLICABLE TO THE INVITATION” above.

Adjustment of Sinking Fund Provisions
Certain Target Bonds are subject to mandatory sinking fund redemptions in specified principal amounts prior to their maturity dates. If any Target Bonds subject to mandatory sinking fund redemption are purchased by the Commission pursuant to the Invitation, under the Indenture, the specified principal amounts of the Target Bonds of such CUSIP that remain outstanding to be redeemed on each mandatory sinking fund redemption date and paid upon their maturity date will be adjusted, [with the remaining mandatory sinking fund redemption payment amounts deemed to have been reduced on a Proportionate Basis (as defined in the Indenture)].

Determination of Amounts to be Purchased
The Commission is not required to purchase any Target Bond offered for tender. The Commission will determine which Target Bond s of a CUSIP , if any, it will purchase . The Commission therefore has the right to purchase none, some, or all of the tendered Target Bonds. The Commission may, but is not obligated to, purchase such principal amount of Target Bonds tendered for purchase up to the applicable maximum principal amount per CUSIP that may be accepted for purchase identified on the inside cover pages hereof.

At approximately 8:00 a.m., New York City time, on [June 29], 2023, unless such time or date is extended by the Commission (the “Preliminary Acceptance Date”), the Commission will determine the preliminary principal amount (if any) of the Target Bonds of a CUSIP that it will purchase, based on such factors as the Commission in its sole discretion deems relevant . Notice of the preliminary principal amount of the Target Bonds (if any) for each CUSIP that the Commission will initially agree to purchase will be provided to the Information Services on the Preliminary Acceptance Date. See “ – Preliminary Acceptance Notice” herein.

On [June 30], 2023, unless such date is extended by the Com mission (the “Final Acceptance Date”), the Commission will make a final determination of the principal amount of Target Bonds of each CUSIP (but not in excess of the “Maximum Principal Amount that may be Accepted for Purchase if Tendered” for such CUSIP as set forth on the inside cover pages hereof) that it wishes to purchase (such principal amount, the “ Aggregate Purchased Amount”) from among those Target Bonds of such CUSIP that were initially accepted for purchase pursuant to the Preliminary Acceptance Notice. The Commission shall be under no obligation to purchase any Target Bond initially accepted; the Commission will determine in its sole discretion if it will purchase any Target Bonds. The Commission may also determine to purchase less than all of the Target Bonds that were initially accepted for purchase .

If the Commission accepts for purchase less than all of the tendered Target Bonds for a CUSIP, the Commission will accept those tendered Target Bonds on a pro rata basis reflecting the ratio of (a) the principal amount, if any, the Commission determines to purchase, up to the “Maximum Principal Amount that may be Accepted for Purchase if Tendered ” for such CUSIP as set forth on the inside cover pages hereof to (b) the aggregate principal amount of valid offers to sell received. In such event, should the principal amount of any individual tender offer, when adjusted by the pro rata acceptance, result in an amount that is not a multiple of $5,000, the principal amount of such offer will be rounded down to the nearest multiple of $5,000. If as a result of such adjustment, the amount of a holder’s unaccepted Target Bonds is less than the minimum authorized denomination of $5,000, the Commission will reject

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such holder’s tender instruction in whole. Notice of the final Aggregate Purchased Amount, the principal amounts of all Target Bonds (if any) that the Commission will purchase (at the Purchase Prices therefor set forth in the Pricing Notice with respect to the Tax-Exempt Bonds and in the Notice of Taxable Bonds Purchase Prices with respect to the Taxable Bonds), will be provided to the Information Services on the Final Acceptance Date. See “– Final Acceptance Notice” herein.

The purchase by the Commission of any Target Bonds is contingent upon the issuance and sale of the 2023 Refunding Bonds . The issuance and sale of the 2023 Refunding Bonds is subject to market conditions and conditions to be satisfied on or prior to the Settlement Date.

Preliminary Acceptance Notice
On the Preliminary Acceptance Date, the Commission will determine by CUSIP the preliminary principal amount (if any) of the Target Bonds that it expects to purchase , based on such factors as the Commission in its sole discretion deems relevant. Notice of the preliminary principal amount of Target Bonds of each CUSIP expected to be purchased will be provided to the Information Services on the Preliminary Acceptance Date. This notification will state the preliminary Aggregate Purchased Amount of the Target Bonds for each CUSIP that the Commission will initially agree to purchase in accordance with this Invitation, which may be zero.

Final Acceptance Notice
On the Final Acceptance Date, the Commission will make a final determination of the Aggregate Purchased Amount of Target Bonds of each CUSIP that it wishes to purchase from among those Target Bonds that were initially accepted for purchase, pursuant to the Final Acceptance Notice provided on the Final Acceptance Date. Notice of the final Aggregate Purchased Amount and total p rincipal amounts of all Target Bonds of each CUSIP to be purchased will be provided to the Information Services on the Final Acceptance Date. This notification will state final Aggregate Purchased Amount, the principal amounts of all Target Bonds (if any) that the Commission will purchase (at the Purchase Prices therefor set forth in the Pricing Notice in respect of the Tax -Exempt Bonds and in the Notice of Taxable Bonds Purchase Prices in respect of the Taxable Bonds) in accordance with this Invitation , which may be zero.

The purchase by the Commission of any Target Bonds is contingent upon the issuance and sale of the 2023 Refunding Bonds. The issuance of the 2023 Refunding Bonds is subject to market conditions and conditions to be satisfied on or prior to the Settlement Date.

The Commission will have no obligation to accept tendered Target Bonds for purchase, or to purchase Target Bonds, if this Invitation is canceled. See “– Extension, Cancellation and Amendment; Changes to Terms” herein.

Settlement Date; Purchase of Target Bonds
On the Settlement Date, the Commission will purchase and pay for all Target Bonds tendered and accepted for purchase, at the applicable Purchase Prices, and will pay Accrued Interest, subject to satisfaction or waiver by the Commission of all conditions to the Commission’s obligation to purchase, and the tendering Bondholders will sell such Target Bonds to the Commission for such consideration.

The Commission may, in its sole discretion, change the Settlement Date by giving notice to t he Information Services prior to the change.

If the conditions to the Commission’s obligation to purchase the Target Bonds tendered and accepted for purchase pursuant to this Invitation, as described herein, are satisfied the Commission will pay the Aggregate Purchase Price in immediately available funds on the Settlement Date by deposit of such amount with DTC . The Commission expects that, in accordance with DTC ’s standard procedures, DTC will transmit amounts sufficient to purchase the tendered Target Bonds at the Purchase Price in immediately available funds to its participant financial institutions that hold such tendered Target Bonds for delivery to the Bondholders . None of the Commission, the Dealer Manager or the Information Agent and Tender Agent has any responsibility or liability for the distribution of such amounts by DTC or its participant financial institutions to Bondholders.

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Extension, Cancellation and Amendment; Changes to Terms The Commission has the right to extend this Invitation by notice given to the Information Services at any time but no later than the first Business Day following the previously scheduled Expiration Date, or any prior extension thereof. Notice of an extension of the Expiration Date will be effective when such notice is given.

The Commission also has the right to extend the Preliminary Acceptance Date, the Final Acceptance Date or Settlement Date by notice given to the Information Services at any time but no later than the first Business Day following the previously scheduled Preliminary Acceptance Date, Final Acceptance Date or Settlement Date, as applicable, or any prior extension thereof. Notic e of an extension of the Preliminary Acceptance Date, Final Acceptance Date or Settlement Date will be effective when such notice is given.

The Commission also reserves the right to amend, waive the terms of or otherwise modify this Invitation at any time on or prior to the Expiration Date , by giving notice to the Information Services of such amendment, waiver or other modification. The amendment, waiver or modification will be effective at the time specified in such notice.

The Commission also has the right, at any time prior to the Settlement Date, to cancel this Invitation for any reason in the Commission’s sole discretion by giving notice to the Information Services of such cancellation. The cancellation will be effective at the time specified in such notice. The Commission will have no obligation to purchase Target Bonds if cancellation of this Invitation occurs.

The Commission will also have no obligation to purchase Target Bonds offered for tender.

If the Commission extends the Expiration Date, or amends, otherwise modifies or waives any of the terms or conditions of this Invitation in any respect, the Commission may (but is not required to) disseminate additional Invitation materials and extend this Invitation to th e extent required to allow, in the Commission’s judgment, reasonable time for dissemination to Holders and for Holders to respond.

No extension or amendment or other modification or waiver of the terms or conditions of this Invitation will change the Commission’s right to decline to purchase Target Bond s without liability on the conditions stated herein or give rise to any liability of the Commission or the Information Agent and Tender Agent to any Holder or nominee.

THIS INVITATION IS NOT BEING EXTENDED TO, AND TARGET BONDS TENDERED IN

RESPONSE TO THIS INVITATION WILL NOT BE ACCEPTED FROM OR ON BEHALF OF, HOLDERS

IN ANY JURISDICTION IN WHICH THIS INVITATION OR SUCH OFFER OR ACCEPTANCE THEREOF WOULD NOT BE IN COMPLIANCE WITH THE LAWS OF SUCH JURISDICTION.

ADDITIONAL CONSIDERATIONS
None of the Commission, the Dealer Manager or the Information Agent and Tender Agent make s any recommendation that any Bondholder tender or refrain from tendering for purchase all or any portion of the Target Bonds. Each Bondholder must make its decision and should read this Invitation and consult with its broker, account executive, financial advisor, attorney or other appropriate professional in making such decision.

In deciding whether to participate in this Invitation, each Bondholder should consider carefully, in addition to the other information contained in this Invitation, the following:
• Holders of Untendered Bonds will continue to hold such Untendered Bonds and such Untendered Bonds will remain outstanding. See “INTRODUCTION – Untendered Bonds” herein. • [The Commission intends, but is not obligated, to defease certain of the Taxable Bonds or portions thereof, which are identified in the tables on the inside cover pages, to their maturity dates or call dat es (where applicable), that it does not purchase such Target Bonds pursuant to this Invitation . Any such defeasance will be effected by purchasing an escrow consisting of Federal Securities (as defined in the Indenture) or general obligation bonds of the State of California to provide for payment of principal, or if applicable the redemption price, of and interest on the applicable Target Bonds. The defeased Target

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Bonds will no longer be outstanding under the Indenture. Any such defeasance may result in certain ratings on the defeased Target Bonds being upgraded. There can be no assurance as to whether a particular Bondholder’s Target Bonds will be among the Target Bonds defeased.] • Even if the Commission does not purchase any tendered Target Bonds, the Commission shall have the right to refund now or in the future (on an advance or current basis) some or all of the Untendered Bonds through the issuance of other taxable or tax-exempt obligations of the Commission or otherwise, or, in the future, to offer to purchase or exchange, some or all of the Untendered Bonds , upon such terms and at such prices as it may determine. Any future acquisition of Target Bonds may be on the same terms or on terms that are more or less favorable to Bondholders than the terms described in this Invitation and the Pricing Notice. The decision to make future purchases or exchanges by the Commission and the terms of such future transactions will depend on various factors existing at that time. There can be no assurance as to which of these alternatives, if any, the Commission will ultimately choose to pursue in the future.
• The purchase or redemption by the Commission of Target Bonds of any CUSIP number may have certain potential adverse effects on holders of Target Bonds with such CUSIP not purchased pursuant to this Invitation, including, but not limited to, the principal amount of the Target Bonds of such CUSIP number available to trade publicly may be reduced, which could adversely affect the liquidity and market value of any Untendered Bonds of that CUSIP number that remain outstanding.

SUMMARY OF CERTAIN FEDERAL INCOME TAX CONSEQUENCES [Under review] The following is a general summary of the U.S. federal income tax consequences for Bondholders that respond to this Invitation and have their tender(s) accepted by the Commission. The discussion is based on the Internal Revenue Code of 1986, as amended (the “ Code”), the Treasury Regulations promulgated thereunder, and relevant rulings and decisions now in effect, all of which are subject to change or differing interpretations. No assurances can be given that future changes in U.S. federal income tax laws wi ll not alter the conclusions reached herein. The discussion below does not purport to deal with U.S. federal income tax consequences applicable to all categories of investors. Further, this summary does not discuss all aspects of U.S. federal income taxation that may be relevant to a particular investor in the Target Bonds in light of the investor’s particular circumstances or to certain types of investors subject to special treatment under U.S. federal income tax laws (including individuals who are neither citizens nor residents of the United States; foreign corporations, trusts and estates, in each case, as defined for U.S. federal income tax purposes; insurance companies; tax-exempt organizations; financial institutions; brokers-dealers; partnerships and other entities classified as partnerships for U.S. federal income tax purposes; and persons who have hedged the risk of owning the Target Bonds). Bondholders should note that no rulings have been or will be sought from the Internal Revenue Service (the “IRS”), and no assurance can be given that the IRS will not take contrary positions with respect to any of the U.S. federal income tax consequences discussed below. This U.S. federal income tax discussion is included for general information only and should not be construed as a tax opinion nor tax advice by the Commission or any of its advisors or agents to the Bondholders, and Bondholders, therefore, should not rely upon such discussion.

The discussion does not deal with special classes of beneficial owners of the Target Bond s, such as dealers or traders in securities, investors that elect mark -to-market accounting, banks, financial institutions, insurance companies, retirement plans or other tax-deferred or tax advantaged accounts, tax-exempt organizations, partnerships or other pass - through entities (or entities treated as such for U.S. federal income tax purposes), U.S. expatriates, persons holding their Target Bonds as a part of a hedging, integration, conversion or constructive sale transaction or a strad dle, Bondholders that are “United States persons,” as defined in section 7701(a)(30) of the Code (“ U.S.

Holders”) and are subject to the alternative minimum tax, U.S. Holders that have a functional currency other than the U.S. Dollar, and persons who are not U.S. Holders (all of such Holders should consult their tax advisors).

If a partnership or other flow -through entity holds the Target Bonds, the tax treatment of a partner in the partnership or beneficial owner of the flow -through entity generally will d epend upon the status of the partner or beneficial owner and the activities of the partnership or flow-through entity. A partner of a partnership or a beneficial owner of a flow- through entity holding Target Bonds should consult its tax advisor regarding the U.S. federal income tax consequences of this Invitation.

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Non-tendering Bondholders will not be subject to any U.S. federal income tax consequences in connection with this Invitation.

BONDHOLDERS SHOULD CONSULT THEIR TAX ADVISORS IN DETERMINING THE U.S.

FEDERAL, STATE, LOCAL, FOREIGN AND ANY OTHER TAX CONSEQUENCES TO THEM FROM THE DISPOSITION OF THEIR TARGET BONDS PURSUANT TO THIS INVITATION .

The Commission’s purchase of a Target Bond for cash in accordance with this Invitation will be a taxable event for U.S. federal income tax purposes. A Bondholder who sells Target Bonds pursuant to this Invitation generally will recognize gain or loss for U.S. federal income tax purposes in an amount equal to the difference between the (i) the amount of cash received and (ii) the Bondholder’s adjusted U.S. federal income tax basis in the Target Bonds.

Any gain or loss arising in connection with a taxable sale or exchange pursuant to this Invitation may be capital gain or loss (either long -term or short -term, depending on the Bondholder’s holding period for the Target Bonds) or may be ordinary income or loss, depending on the particular circumstances of the Bondholder. Non- corporate holders may be eligible for reduced rates of U.S. federal income tax on long- term capital gains. The deductibility of capital losses is subject to various limitations.

Under section 3406 of the Code, a tendering Bondholder who is a “United States person,” as defined in section 7701(a)(30) of Code, may, under certain circumstances, be subject to U.S. federal backup withholding.

Backup withholding applies if such tendering Bondholder : (i) fails to furnish such Bondholder’s social security number or other taxpayer identification number (“ TIN”); (ii) furnishes an incorrect TIN; (iii) fails to report property interest, dividends or other “reportable payments” as defined in the Code; or (iv) under certain circumstances, fails to provide a certified statement, signed under penalty of perjury, that the TIN provided is correct and that such Bondholder is not subject to backup withholding. Bondholders should consult their tax advisors regarding whether backup withholding applies to them and, if backup withholding applies, regarding qualification for an exemption from backup withholding and the procedures for obtaining such exemption. Backup withholding is not an additional tax.

Any amounts deducted and withheld should generally be allowed as a credit against the Bondholder’s U.S. federal income tax liability.

DEALER MANAGER
The Commission has retained Jefferies LLC (“Jefferies LLC”) to act on its behalf as Dealer Manager for this Invitation. The Commission has agreed to pay to the Dealer Manager a customary fee for its services and to reimburse the Dealer Manager for its reasonable expenses relating to this Invitation . References in this Invitation to the Dealer Manager are to Jefferies LLC only in its capacity as the Dealer Manager. The compensation of the Dealer Manager is based upon the amount of Target Bonds accepted for purchase by the Commission.

CleanPowerSF Sfpuc CommissionJune 27, 2023

CleanPowerSF Sfpuc Commission
June 27, 2023