9.107(6), Section 9.107(8) and Article VIIIB thereof, as applicable, and pursuant to the terms and conditions set forth herein, for the purpose of financing or refinancing (through the retirement of outstanding commercial paper notes of the Power Enterprise) various capital im provements benefitting the Power Enterprise; and
WHEREAS, on [RESO DATE], 2023, the Commission passed its Resolution No. 23-[RESO NO], approving, among other things, the issuance of the 2023A Bonds and the execution and delivery of this Third Supplement; and
3 4868-2349-5786v4/200617-0010
WHEREAS, all acts and proceedings required by law necessary to make the 2023A Bonds, when executed by the SFPUC, authenticated and delivered by the Trustee and duly issued, the valid, binding and legal limited obligations of the SFPUC, and to constitute this Third Supplement a valid and binding agreement for the uses and purposes herein set forth in accordance with its terms, have been done and taken, and the execution and delivery of the Third Supplement have been in all respects duly authorized;
NOW, THEREFORE, in order to secure the payment of the principal of, Redemption Price, if any, and interest on, the 2023A Bonds at any time issued and Outstanding under the Trust Indenture and this Third Supplement, according to their tenor, and to secure the performance and observance of all the covenants and conditions therein and herein set forth, and to declare the terms and conditions upon and subject to which the 2023A Bonds are to be issued and received, and in consideration of the premises and of the mutual covenants herein contained and of the purchase and acceptance of the 2023A Bonds by the Owners thereof, and for other valuable consideration, the receipt of which is hereby acknowledged, the SFPUC does hereby covenant and agree with the Trustee, for the benefit of the Owners from time to time of the 2023A Bonds, as follows:
ARTICLE I
THIRD SUPPLEMENT; DEFINITIONS
Section 1.01 Third Supplement . This Third Supplemental Trust Indenture is executed and delivered in accordance with and is subject to the terms and provisions of the Master Indenture.
Section 1.02 Definitions. Unless the context otherwise requires, all terms used and not otherwise defined herein, including the Recitals, shall have the meanings set forth in the Master Indenture. In addition, unless the context otherwise requires, the following terms shall have the following meanings in this Third Supplement:
“Authorized Denominations” means, with respect to the 2023A Bonds, $5,000 and any integral multiple thereof.
“Interest Payment Date” means the date or dates specified herein. “Master Indenture ” means the Master Indenture by and between the SFPUC and the Trustee, dated as of May 1, 2015, and any amendments, modifications or supplements thereto. “Record Date” means the fifteenth day of the calendar month before each Interest Payment Date.
“Reserve Requirement” means with respect to the 2023A Bonds, $0. “Third Supplement ” means this Third Supplemental Trust Indenture, dated as of [October] 1, 2023, by and between the SFPUC and the Trustee, and any amendments, modifications or supplements hereto.
“2023A Bond Fund” means the Bond Fund for the 2023A Bonds created pursuant to Section
5.6(a) of the Master Indenture.
4 4868-2349-5786v4/200617-0010
“2023A Bond Retirement Account” means the Bond Retirement Account created in the 2023A Bond Fund for the 2023A Bonds pursuant to Section 5.6(d) of the Master Indenture. “2023A Bonds ” means the Public Utilities Commission of the City and County of San Francisco Power Revenue Bonds, 2023 Series A issued pursuant to this Third Supplement. “2023A Capitalized Interest Account” means the Capitalized Interest Account created in the 2023A Bond Fund for the 2023A Bonds pursuant to Section 5.6(c) of the Master Indenture. “2023A Continuing Disclosure Certificate ” means the Continuing Disclosure Certificate, dated the date of initial issuance of the 2023A Bonds, executed and delivered by the SFPUC, as it may be supplemented and amended in accordance with its terms. “2023A Costs of Issuance Account” means the account of that name created pursuant to Section 4.04 of this Third Supplement.
“2023A Proceeds Fund ” means the fund of that name created pursuant to Section 4.02 of this Third Supplement.
“2023A Project ” means the reconstruction, replacement, expansion, repair, and/or improvement of the facilities of the Power Enterprise to be financed or refinanced from proceeds of the 2023A Bonds.
“2023A Tax Certificate” means the Tax Certificate delivered by the SFPUC at the time of the issuance and delivery of the 2023A Bonds, as the same may be amended or supplemented in accordance with its terms.
Section 1.03 Requirements of the Master Indenture . Upon the issuance and delivery of the 2023A Bonds, the SFPUC will be in compliance with the requirements set forth in Article III of the Master Indenture with respect to issuing additional Bonds.
ARTICLE II
AUTHORIZATION AND TERMS OF THE 2023A BONDS
Section 2.01 Authorization of the 2023A Bonds . There is hereby created a Series of Bonds issued pursuant to the Charter and under the Master Indenture, which Bonds will be designated as “Public Utilities Commission of the City and County of San Francisco Power Revenue Bonds, 2023 Series A” (the “2023A Bonds”) and issued in the aggregate principal amount of $_________.
Section 2.02 Authentication of the 2023A Bonds . The 2023A Bonds shall be issued as hereinafter provided. The Registrar shall authenticate and deliver the 2023A Bonds upon receipt of all of the items set forth in Section 3.3 of the Master Indenture.
Section 2.03 Terms of the 2023A Bonds.
(a) General. The 2023A Bonds shall be issued in fully registered form in Authorized Denominations. The 2023A Bonds shall be dated the date of delivery, shall mature on the dates and 5 4868-2349-5786v4/200617-0010
in the principal amounts, and bear interest, payable on May 1 and November 1 of each year commencing on [May 1, 2024], at the per annum rates as follows:
2023A BONDS
Maturity Date
(November 1) Principal Amount Interest Rate
The 2023A Bonds shall be Current Interest Bonds. Interest shall be computed on the basis of a 360-day year consisting of twelve (12) 30-day months. The 2023A Bonds shall bear interest until the principal sum thereof has been paid; provided, however, that if at the maturity date of the 2023A Bonds, funds are available for the payment thereof in full in accordance with the terms of Article XI of the Master Indenture, such 2023A Bonds shall then cease to bear interest. (b) Method of Payment. The Principal and Redemption Price of the 2023A Bonds will be payable to the Owner thereof at the corporate office of the Trustee. Interest on the 2023A Bonds will be payable by the Trustee on each Interest Payment Date by check mailed to each Owner as of the Record Date, at the most recent address shown on the Bond Register; provided, however, that payment of interest to each Owner of record who owns $1,000,000 or more in aggregate principal amount of the 2023A Bonds may be made to such Owner by wire transfer to such wire address within the United States as that Owner may request in writing prior to the Record Date. The Trustee shall pay Principal of and interest on the 2023A Bonds only to or upon the order of the respective Owners, as shown in the Bond Register, or their respective attorneys, duly authorized in writing, and all such payments shall be valid and effective to fully satisfy and discharge the obligations hereunder 6 4868-2349-5786v4/200617-0010
with respect to the payment of Principal of and interest on the 2023A Bonds to the extent of the sum or sums so paid.
Section 2.04 Form of 2023A Bonds . The 2023A Bonds shall be issued in subst antially the form set forth in Exhibit A hereto. CUSIP identification numbers shall be printed on the 2023A Bonds, but such numbers shall not be deemed to be a part of the 2023A Bonds or a part of the contract evidenced thereby and no liability shall attach to the SFPUC or its officers, employees or agents because or on account of such CUSIP identification numbers.
ARTICLE III
REDEMPTION PROVISIONS
Section 3.01 Optional Redemption.
(a) Optional Redemption of the 2023A Bonds on and after [May/November] 1, 20___.
The 2023A Bonds maturing on and after November 1, 20__ are subject to redemption prior to their respective stated maturity dates, at the option of the SFPUC, from any source of available funds, as a whole or in part, in Authorized Denominations, on any date on or after __________ 1, 20___, at a Redemption Price equal to 100% of the principal amount of the 2023A Bonds called for redemption, together with accrued interest to the date fixed for redemption, without premium. (b) [Optional Redemption of the 2023A Bonds Prior to [May/November] 1, 20__. Prior to [May/November] 1, 20[__], the 2023A Bonds are subject to redemption prior to their respective stated maturity dates, at the option of the SFPUC, from any source of available funds (other than Mandatory Sinking Fund Payments) as a whole or in part, in Authorized Denominations, on any date, at a Redemption Price equal to, for each maturity of the 2023A Bonds to be redeemed, 100% of the Amortized Value (as defined below) of the 2023A Bonds of such maturity to be redeemed, plus accrued interest to the date of redemption on the 2023A Bonds of such maturity to be so redeemed. “Amortized Value” means, with respect to any 2023A Bonds to be redeemed pursuant to this Section 3.01(b), the principal amount of the 2023A Bonds to be redeemed mul tiplied by the price of such 2023A Bonds expressed as a percentage, calculated based on the industry standard method of calculating bond prices, with a delivery date equal to the date of redemption, a maturity date equal to the stated maturity date of such 2023A Bonds and a yield equal to the original offering yield of such 2023A Bonds (as set forth on the inside cover of the Official Statement dated ___________, 2023 relating to the 2023A Bonds).]
Any optional redemption pursuant to this Section 3.01, if so designated by the SFPUC, may be a Conditional Redemption as provided in the Master Indenture.
Section 3.02 Mandatory Sinking Fund Redemption. The 2023A Bonds maturing on November 1, 20____, are further subject to redemption prior to their stated maturity, in part by lot, from Mandatory Sinking Fund Payments required to be made by the SFPUC as specified below to be deposited in the 2023A Bond Retirement Account, on each November 1 on and after November 1, 20____, at a Redemption Price equal to the principal amount the reof to be redeemed and accrued interest thereon to the date fixed for redemption, without premium.
The dates and amounts of the Mandatory Sinking Fund Payments for the 2023A Bonds maturing on November 1, 20____ are as follows:
7 4868-2349-5786v4/200617-0010
$_________ 2023A Bonds
(20____ Term Bonds)
Mandatory Sinking Fund
Redemption Date
(November 1)
Mandatory Sinking Fund
Payment
†
† Maturity.
The 2023A Bonds maturing on November 1, 20___, are further subject to redemption prior to their stated maturity, in part by lot, from Mandatory Sinking Fund Payments required to be made by the SFPUC as specified below to be deposited in the 2023A Bond Retirement Account, on each November 1 on and after November 1, 20___, at a Redemption Price equal to the principal amount thereof to be redeemed and accrued interest thereon to the date fixed for redemption, without premium.
The dates and amounts of the Mandatory Sinking Fund Payments for the 2023A Bonds maturing on November 1, 20____ are as follows:
$_________ 2023A Bonds
(20___ Term Bonds)
Mandatory Sinking Fund
Redemption Date
(November 1)
Mandatory Sinking Fund
Payment
†
† Maturity.
ARTICLE IV
APPLICATION OF PROCEEDS OF 2023A BONDS; FUNDS AND ACCOUNTS Section 4.01 Application of the Proceeds of the 2023A Bonds. The proceeds of the sale of the 2023A Bonds in the amount of $____________ (representing the aggregate principal amount of the 2023A Bonds of $__________, [plus/less] original issue [discount/premium] of $____________ and less underwriters’ discount of $___________) shall be deposited and applied as follows:
8 4868-2349-5786v4/200617-0010
2023A Proceeds Fund
2023A Capitalized Interest Account
2023A Costs of Issuance Account
Section 4.02 2023A Proceeds Fund. In lieu of the deposit of any amounts to the Project Fund established under Section 5.8 of the Master Indenture, there is hereby created a special fund of the SFPUC to be known as the “Public Utilities Commission of the City and County of San Francisco Power Revenue Bonds, 2023 Series A Proceeds Fund” (the “2023A Proceeds Fund”) to be held in trust by the Trustee. Monies deposited in the 2023A Proceeds Fund shall be paid and transferred by the Trustee, on or before ___________, 2023 as directed by the SFPUC, to U.S. Bank Trust Company, National Association, as issuing and paying agent for the SFPUC’s commercial paper program, to be applied to refinance the 2023A Project through the application of such amounts on __________, 2023 to pay maturing commercial paper notes of the Power Enterprise.
Section 4.03 2023A Capitalized Interest Account. There shall be deposited in the 2023A Capitalized Interest Account created in the 2023A Bond Fund for the 2023A Bonds the amount set forth in Section 4.01 of this Third Supplement. Moneys deposited to the 2023A Capitalized Interest Account shall be applied by the Trustee in accordance with Section 5.6(c) of the Master Indenture to pay interest on the 2023A Bonds on each Interest Payment Date to ___________ 1, 20___ as set forth in the following schedule:
Interest Payment Date Interest Amount
May 1, 202__
November 1, 202__
May 1, 202__
November 1, 20__
Section 4.04 2023A Costs of Issuance Account. There is hereby created a special fund of the SFPUC to be known as the “Public Utilities Commission of the City and County of San Francisco Power Revenue Bonds, 2023 Series A Costs of Issuance Account” (the “2023A Costs of Issuance Account”) to be held in trust by the Trustee. Monies deposited in the 2023 Costs of Issuance Account shall be paid and applied on the written request of the SFPUC to the Trustee for the costs of issuing such 2023A Bonds. Any balance remaining in the 2023A Costs of Issuance Account one year after the date of delivery of the 2023A Bonds shall be transferred by the Trustee to the Interest Account in the 2023A Bond Fund to be applied to the payment of interest coming due on the 2023A Bonds.
Section 4.05 No Reserve Account . The 2023A Bonds shall not be a Common Reserve Series, shall not be secured by a Reserve Account and the Reserve Requirement for the 2023A Bonds shall be $0.
ARTICLE V
MISCELLANEOUS
Section 5.01 2023A Bon ds Subject to the Master Indenture . Except as expressly provided in this Third Supplement, every term and condition contained in the Master Indenture shall apply to this Third Supplement and to the 2023A Bonds with the same force and effect as if it were 9 4868-2349-5786v4/200617-0010
herein set forth at length, with such omissions, variations and modifications thereof as may be appropriate to make the same conform to this Third Supplement.
Section 5.02 Covenant to Defease or Retire Bonds Upon Acquisition of PG&E Assets .
In the event that the City shall hereafter purchase or otherwise acquire all or a substantial portion of the electric distribution and transmission assets of Pacific Gas & Electric Company needed to provide retail electric service to all electricity customers within the geographic boundaries of the City, the SFPUC will either operate such service as a Separate System or provide for all then Outstanding Bonds to be defeased or retired pursuant to applicable provisions of the Trust Indenture.
In connection with any such purchase or other acquisition, the SFPUC shall not elect to operate such service as a Separate System unless the SFPUC has determined that such operation will not have a material adverse effect on the holders of, or the security pledged for the payment of, the Bonds.
Section 5.03 Tax Covenant. The SFPUC covenants that it will comply with the provisions of the 2023A Tax Certificate, which is hereby incorporated herein as if fully set forth herein.
Section 5.04 Continuing Disclosure. The SFPUC hereby covenants and agrees that it will comply with and carry out all of the provisions of the 2023A Continuing Disclosure Certificate.
Notwithstanding any other provision of the Trust Indenture, failure of the SFPUC to comply with the 2023A Continuing Disclosure Certificate shall not be considered an Event of Default; however, any Participating Underwriter (as such term is defined in the 2023A Continuing Disclosure Certificate) or any Owner of 2023A Bonds or beneficial owner may take such actions as may be necessary and appropriate, including seeking specific performance by court order, to cause the SFPUC to comply with its obligations under this Section 5.04, and the sole remedy in the event of any failure of the SFPUC to comply with the 2023A Continuing Disclosure Certificate shall be an action to compel performance.
Section 5.05 No Priority R&R Fund Deposits. The SFPUC has determined that, because the adopted budget for the Power Enterprise provides for proceeds of Bonds (or other authorized evidences of indebtedness) to be used to finance the reconstruction and replacement of existing facilities, upon the issuance of the 2023A Bonds no Priority R&R Fund Deposits are required.
Section 5.06 Execution in Counterparts . This Third Supplement 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.
Section 5.07 Effective Date of Third Supplement. This Third Supplement shall take effect upon its execution and delivery.
[Remainder of page intentionally left blank.]
S-1
4868-2349-5786v4/200617-0010
IN WITNESS WHEREOF, the SFPUC and the Trustee have caused this Third Supplemental Trust Indenture to be executed on their behalf by their duly authorized representatives, all as of the day and year first written above.
PUBLIC UTILITIES COMMISSION OF THE
CITY AND COUNTY OF SAN FRANCISCO
By: _______________________________________
General Manager
Approved as to Form:
DAVID CHIU
City Attorney of the
City and County of San Francisco
By:
Deputy City Attorney
U.S. BANK TRUST COMPANY,
NATIONAL ASSOCIATION, as Trustee
By: _______________________________________
Authorized Officer
4868-2349-5786v4/200617-0010 A-1
EXHIBIT A
FORM OF 2023A BOND
No. R-__ $__________
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 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.
PUBLIC UTILITIES COMMISSION OF
THE CITY AND COUNTY OF SAN FRANCISCO
POWER REVENUE BONDS,
2023 SERIES A
Interest Rate Dated Date Maturity Date CUSIP No.
% , 2023 November 1, 20__ 79771K _____
REGISTERED OWNER:
PRINCIPAL SUM:
The PUBLIC UTILITY COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO (the “SFPUC”), a department of the City and County of San Francisco (the “City”) duly organized and existing under the Charter of the City, for value received, hereby promises to pay to the order of the Registered Owner shown above on the Maturity Date shown above, upon presentation and surrender hereof, the Principal Amount shown above and to pay interest at the interest rate shown above on the balance of said Principal Amount from time to time remaining unpaid. This Bond is one of the SFPUC’s Public Utilities Commission of the City and County of San Francisco Power Revenue Bonds (the “Bonds”), and is a Bond of the Series thereof designated “2023 Series A (the Bonds of such designated Series being sometime s referred to herein as the “2023A Bonds”). The Bonds are issued pursuant to the Trust Indenture, dated as of May 1, 2015, by and between the SFPUC and U.S. Bank Trust Company, National Association, as Trustee, as amended and supplemented (the “Master Inde nture”), including as supplemented by the Third Supplemental Trust Indenture, dated as of [October 1], 2023 (the “Third Supplement” and together with the Master Indenture, the “Trust Indenture”), for the purposes of financing or refinancing capital improve ments of the SFPUC, and paying certain expenses related to the issuance of the 2023A Bonds. This Bond and the rights of the Owner hereof are in all respects subject to and governed by the Trust Indenture.
The principal of, premium, if any, and interest on the 2023A Bonds is payable solely from amounts on deposit in a separate account in a special fund of the SFPUC known as the Public Utilities Commission of the City and County of San Francisco Power Revenue Bonds, 2023 Series A Bond Fund (the “2023A Bond Fund”) and other funds and accounts established for the benefit of the Bonds as set forth in the Trust Indenture. The SFPUC has pledged, obligated and bound itself irrevocably to set aside and to pay into the 2023A Bond Fund the fixed amount of Revenues (a s
4868-2349-5786v4/200617-0010 A-2
defined in the Trust Indenture), sufficient in time and amount to pay principal of, premium, if any, and interest on all the 2023A Bonds from time to time Outstanding, as the same shall respectively become due and payable pursuant to the terms of the Trust Indenture.
The Bonds are special limited obligations of the SFPUC. The SFPUC is not obligated to pay the principal of, premium, if any, or interest on the Bonds from any source of funds other than Revenues, after payment of Operation and Maintenance Ex penses and any Priority R&R Fund Deposits. Neither the general funds of the SFPUC nor the funds of any SFPUC enterprise (other than the Revenues and the funds pledged therefor under the Trust Indenture) shall be liable for the payment on the Bonds. The SFPUC has no taxing power. The General Fund of the City is not liable for the payment of the principal of, premium, if any, or interest on the Bonds, and neither the credit nor the taxing power of the City is pledged to the payment of the principal of, premium, if any, or interest on the Bonds. The Bonds are not secured by a legal or equitable pledge of, or charge, lien, or encumbrance upon, any of the property of the City or of the SFPUC or any of its income or receipts, except Revenues, after payment of Operation and Maintenance Expenses and any Priority R&R Fund Deposits.
The Bonds are equally and ratably secured by a pledge of Revenues, after payment of Operation and Maintenance Expenses and any Priority R&R Fund Deposits. The SFPUC has heretofore incurred and may hereafter incur additional indebtedness secured by a pledge of Revenues on an equal and ratable (parity) basis with the Bonds subject to the terms of the Trust Indenture.
All terms used in this Bond and not otherwise defined herein shall have the respective meanings assigned thereto in the Trust Indenture.
Interest on this 2023A Bond will be payable on each May 1 and November 1, commencing on [May 1, 2024], and on the maturity date specified above on the principal amount specified above.
Interest on this 2023A Bond shall be payable to the Owner as of the close of business on the applicable Record Date by check drawn upon and mailed by the Trustee to such Registered Owner at the address shown on the registration books maintained by the Registrar (the “Bond Register”); provided, however, that, if requested in writing to the Trustee by a Registered Owner of not less than $1,000,000 in principal amount of 2023A Bonds prior to the applicable Record Date, interest shall be payable by wire transfer to such wire address within the United States as the Registered Owner shall specify. The principal of and redemption premium, if any, on this 2023A Bond shall be payable only upon presentation and surrender of this 2023A Bond at the corporate office of the Trustee. Principal of, and redemption premium, if any, and interest on, this 2023A Bond are payable in lawful money of the United States of America, which, at the respective date of payment thereof, is legal tender for the payment of public and private debts.
Interest on this 2023A Bond shall be computed on the basis of a 360-day year consisting of twelve (12) 30-day months.
The Registrar shall be the registrar for the Bonds. While any of the Bonds are Outstanding, the Registrar shall, on behalf of the SFPUC, keep and maintain the Bond Register (which shall be kept at the corporate office of the Registrar).
The 2023A Bonds shall be subject to optional redemption [and mandatory sinking fund redemption] prior to maturity, in whole or in part, at the times, in the amounts and at the prices determined pursuant to the Third Supplement as set forth below:
4868-2349-5786v4/200617-0010 A-3
The 2023A Bonds maturing on and after November 1, 20____ are subject to redemption prior to their respective stated maturity dates, at the option of the SFPUC, from any source of available funds, as a whole or in part, in Authorized Denominations, on any date on or after _________ 1, 20___, at a Redemption Price equal to 100% of the principal amount of the 2023A Bonds called for redemption, together with accrued interest to the date fixed for redemption, without premium. [Prior to [May/November] 1, 20[__], the 2023A Bonds are subject to redemption prior to their respective stated maturity dates, at the option of the SFPUC, from any source of available funds (other than Mandatory Sinking Fund Payments) as a whole or in part, in Authorized Denominations, on any date, at a Redemption Price equal to, for each maturity of the Bonds to be redeemed, 100% of the Amortized Value (as defined in the Third Supplement) of the 2023A Bonds of such maturity to be redeemed, plus accrued interest to the date of redemption on the 2023A Bonds of such maturity to be so redeemed.]
[The 2023A Bonds maturing on November 1, 20___ are further subject to redemption prior to their stated maturity, in part by lot, from Mandatory Sinking Fund Payments required to be made by the SFPUC as specified in the Third Supplemental indenture to be deposited in the 2023A Bond Retirement Account, on each November 1 on and after November 1, 20___, at a Redemption Price equal to the principal amount thereof to be redeemed and accrued interest thereon to the date fixed for redemption, without premium.]
[The 2023A Bonds maturing on November 1, 20___ are further subject to redemption prior to their stated maturity, in part by lot, from Mandatory Sinking Fund Payments required to be made by the SFPUC as specified in the Third Supplemental indenture to be deposited in the 2023A Bond Retirement Account, on each November 1 on and after November 1, 20___, at a Redemption Price equal to the principal amount thereof to be redeemed and accrued interest thereon to the date fixed for redemption, without premium.]
When 2023A Bonds (or portions thereof) are to be redeemed, the SFPUC shall give or cause to be given notice of the redemption of such 2023A Bonds to the Trustee no later than 45 days prior to the date fixed for redemption or such shorter time as may be acceptable to the Trustee. In the case of an optional redemption, the notice may state that such redemption is a Conditional Redemption, and such notice and optional redemption shall be of no effect if such money is not so deposited or if the notice is rescinded as described in the Trust Indenture. The Trustee, at the expense of the SFPUC, shall send notice of any redemption, identifying the 2023A Bonds to be redeemed, the date fixed for redemption and the method and place of payment and the information required by the Trust Indenture, by first class mail to each Owner of a 2023A Bond called for re demption to the Owner’s address set forth on the Bond Register. Such notice shall be sent by the Trustee by first class mail between 30 and 60 days prior to the scheduled date fixed for redemption. With respect to Book - Entry Bonds, if the Trustee sends notice of redemption to the Securities Depository pursuant to the Letter of Representations, the Trustee shall not be required to give the notice set forth in the immediately preceding sentence. If notice is given as stated in this paragraph, failure of any Owner to receive such notice, or any defect in the notice, shall not affect the redemption or the validity of the proceedings for the redemption of the 2023A Bonds.
No recourse shall be had for the payment of the principal of, premium, if any, or interest on, any of the Bonds or for any claim based thereon or under the Trust Indenture, against any past, present or future Commission member or any officer, employee or agent of the SFPUC, under any rule of law or equity, statute or constitution or by the enforcement of any assessment or penalty or otherwise, and all such liability of any such Commission member or officer, employee or agent as
4868-2349-5786v4/200617-0010 A-4
such is hereby expressly waived and released as a condition of, and in consideration for, the acceptance of this Bond.
The Owner of this Bond shall have no right to enforce the provisions of the Trust Indenture or to institute action to enforce the covenants therein, or to take any action with respect to any Event of Default under the Trust Indenture, or to institute, appear in or defend any suit or other proceedings with respect thereto, except as provided in the Trust Indenture.
The SFPUC and the Trustee may treat the person in whose name this Bond is registered as the Owner hereof for the purpose of receiving payment as herein provided and for all other purposes, whether or not this Bond is overdue, and neither the SFPUC nor the Trustee shall be affected by notice to the contrary.
The Trust Indenture prescribes the manner in which this Bond may be discharged, including a provision that the Bonds shall be deemed to be paid if cash and/or Government Securities maturing as to principal and interest in such amounts and at such times as will insure the availability of sufficient moneys to pay the principal of, premium, if any, and interest on the Bonds shall have been deposited with the Trustee, after which the Bonds shall no longer be secured by or entitled to the benefits of the Trust Indenture, except for the purposes of registration and exchange of Bonds and of payment from such source.
This Bond is transferable by the Owner hereof in person or by his or her attorney duly authorized in writing at the corporate office of the Bond Registrar but only in the manner, subject to the limitations of and upon payment of the charges provided in the Trust Indenture and upon surrender and cancellation of this Bond. Upon such transfer, a new registered Bond or Bonds in Authorized Denominations in the same aggregate principal amount will be issued to the transferee in exchange therefor.
Reference is hereby made to the Trust Indenture, a copy of which is on file with both the Trustee and the SFPUC, for the provisions, among others, with respect to the nature and extent of the rights, duties and obligations of the SFPUC, the Trustee and the Owners of any Bonds, the terms upon which the Bonds are issued and secured and other matters, to all of which the Owner of this Bond assents by the acceptance of this Bond.
Modifications or alterations of the Trust Indenture, or of any supplement thereto, may be made only to the extent and in the circumstances permitted by the Trust Indenture.
It is hereby certified and declared that all acts, conditions and things required to exist, to have happened and to have been performed precedent to and in the execution of the Master Indenture, the Third Supplement and the issuance of this Bond and the series of Bonds of which this is one do exist, have happened and have been performed in due time, form and manner as required by law, and that this Bond, together with all other indebtedness of the SFPUC, does not exceed any limit prescribed by the Constitution and laws of the State of California and is not in excess of the amount of Bonds permitted to be issued under the Trust Indenture.
This Bond shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the Trust Indenture unless and until the certificate of authentication hereon shall have been duly executed by the manual signature of an authorized officer of the Bond Registrar.
4868-2349-5786v4/200617-0010 A-5
IN WITNESS WHEREOF, PUBLIC UTILITIES COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO has caused this Bond to be executed in its name by the manual or facsimile signature of its General Manager and by the manual or facsimile signature of the Controller of the City as of the date set forth above.
PUBLIC UTILITIES COMMISSION OF THE
CITY AND COUNTY OF SAN FRANCISCO
By:
General Manager
By:
Controller of the City and County
of San Francisco
COUNTERSIGNED:
By: ________________________________
Secretary of the Commission
CERTIFICATE OF AUTHENTICATION
This Bond is one of the fully registered Public Utilities Commission of the City and County of San Francisco Power Revenue Bonds, 2023 Series A, described in the within mentioned Trust Indenture.
Date of Authentication: _________________________
U.S. BANK TRUST COMPANY,
NATIONAL ASSOCIATION,
as Trustee and Bond Registrar
By:
Authorized Signatory
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ASSIGNMENT
The following abbreviations, when used in the inscription on the face of the withi n mentioned Bonds and in the assignment below, shall be construed as though they were written out in full according to applicable laws or regulations.
TEN COM: as tenants in common
TEN ENT: as tenants by the entireties
JT TEN: as joint tenants with right of survivorship and not as tenants in common UNIF GIFT MIN ACT ________________ Custodian _________________________ (Cust) (Minor)
Additional abbreviations may also be used though not in the above list.
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 Bond Registrar with full power of substitution in the premises.
Dated: _______________
Note: The signature(s) to this Assignment must correspond with the name(s) as written on the face of the within Bond in every particular, without alteration or enlargement or any change whatsoever.
SIGNATURE GUARANTEED:
NOTICE: Signature(s) must be guaranteed by a member firm of the New York Stock Exchange or a commercial bank or trust company.
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EXHIBIT B
CITY CONTRACTING PROVISIONS
[Provisions subject to final review being undertaken by City Attorney’s Office] The Trustee shall comply with the following provisions of this Third Supplemental Trust Indenture as if set forth in the text thereof. Capitalized terms used but not defined in this exhibit shall have the meanings given in the Third Supplemental Trust Indenture.
1. Nondiscrimination; Penalties.
(a) Nondiscrimination in Contracts. The Trustee shall comply with the provisions of Chapters 12B and 12C of the San Francisco Administrative Code. The Trustee 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.
The Trustee 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. The Trustee d oes not as of the date of this Third Supplemental Trust Indenture, and will not during the term of this Third Supplemental Trust 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 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 Third Supplemental Trust Indenture, the Trustee shall execute the “Chapter 12B Declaration: Nondiscrimination in Contracts and Benefits” form (form HRC-12B-101) with supporting documentation and secure the approval of the form by the San Francisco Human Rights Commission.
2. MacBride Principles —Northern Ireland. The provisions of San Francisco Administrative Code §12F are incorporated by this reference and made part of this Third Supplemental Trust Indenture. By entering into this Third Supplemental Trust Indenture, the Trustee confirms that it has read and understood that the City urges companies doing business in Northern Ireland to resolve employment inequities and to abide by the MacBride Principles, and urges San Francisco companies to do business with corporations that abide by the MacBride Principles.
3. Tropical Hardwood and Virgin Redwood Ban. Under San Francisco Environment Code Section 804(b), the City urges the Trustee not to import, purchase, obtain, or use for any purpose, any tropical hardwood, tropical hardwood wood product, virgin redwood or virgin redwood wood product.
4. Alcohol and Drug -Free Workplace. The City reserves the right to deny access to, or require the Trustee to remove from, City facilities personnel of such Trustee 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
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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 . The Trustee shall provide the services specified in the Third Supplemental Trust Indenture 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. The Trus tee acknowledges that this Third Supplemental Trust Indenture and all records related to its formation, such Trustee’s performance of services provided under the Third Supplemental Trust Indenture, 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 Third Supplemental Trust Indenture, the Trustee 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 the Trustee’s board of direc tors; the Trustee’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 Trustee; any subcontractor listed in the bid or contract; and any committee that is sponsored or controlled by such Trustee. The Trustee certifies that it has informed each such person of the limitation on contributions imposed by Section 1.126 by the time it submitted a proposal for such contract and has provided the names of the persons required to be informed to the City department with whom it is contracting.
8. Requiring Minimum Compensation for Covered Employees . The Trustee shall pay covered employees no less than the minimum compensation required by San Francisco Administrative Code Chapter 12P. The Trustee is subject to the enforcement and penalty provisions in Chapter 12P. By entering into this Third Supplemental Trust Indenture, the Trustee certifies that it is in compliance with Chapter 12P.
9. Requiring Health Benefits for Covered Employees. The Trustee shall comply with San Francisco Administrative Code Chapter 12Q. The Trustee shall choose and perform one of the Health Care Accountability options set forth in San Francisco Administrative Code Chapter 12Q.3. T he Trustee is subject to the enforcement and penalty provisions in Chapter 12Q.
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10. Prohibition on Political Activity with City Funds. In performing the services provided under the Third Supplemental Trust Indenture, the Trustee shall comply with San Franc isco Administrative Code Chapter 12G, which prohibits funds appropriated by the City for this Third Supplemental Trust Indenture from being expended to participate in, support, or attempt to influence any political campaign for a candidate or for a ballot measure. The Trustee is subject to the enforcement and penalty provisions in Chapter 12G.
11. Nondisclosure of Private, Proprietary or Confidential Information. If this Third Supplemental Trust Indenture requires the City to disclose “Private Information” to the Trustee within the meaning of San Francisco Administrative Code Chapter 12M, the Trustee shall use such information consistent with the restrictions stated in Chapter 12M and in this Third Supplemental Trust Indenture and only as necessary in performing the services provided under the Third Supplemental Trust Indenture. The Trustee is subject to the enforcement and penalty provisions in Chapter 12M.
In the performance of services provided under the Third Supplemental Trust Indenture, the Trustee may have access to the City’s proprietary or confidential information, the disclosure of which to third parties may damage the City. If the City discloses proprietary or confidential information to the Trustee, such information must be held by such Trustee in confidence and used only in performing the Third Supplemental Trust 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 or confidential information.
12. Consideration of Criminal History in Hiring and Employment Decisions. The Trustee agrees to comply fully with and be bound by all of the provisions of Chapter 12T, “City Contractor/Subcontractor Consideration of Criminal History in Hiring and Employment Decisions,” of the San Francisco Administrative Code (“Chapter 12T”), including the remedies provided, and implementing regulations, as may be amended from time to time. The provisions of Chapter 12T are incorporated by reference and made a part of this Third Supplemental Trust Indenture. The text of Chapter 12T is available on the web at http://sfgov.org/olse/fco. A partial listing of some of the Trustees’ obligations under Chapter 12T is set forth in this Section. The Trustee is required to comply with all of the applicable provisions of Chapter 12T, irrespective of the listing of obligations in this Section. Capitalized terms used in this Section and not defined in this Third Supplemental Trust Indenture shall have the meanings assigned to such terms in Chapter 12T.
The requirements of Chapter 12T shall only apply to the Trustee’s operations to the extent those operations are in furtherance of the performance of this Third Supplemental Trust Indenture, shall apply only to applicants and employees who would be or are performing work in furtherance of this Third Supplemental Trust Indenture, 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 Third Supplemental Trust Indenture. 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
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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 Third Supplemental Trust Indenture, the Trustee 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 Third Supplemental Trust Indenture.
15. Assignment . The services provided under the Third Supplemental Trust Indenture to be performed by the Trustee are personal in character and neither this Third Supplemental Trust Indenture nor any duties or obligations 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 Third Supplemental Trust Indenture. Any purported assignment made in violation of this provision shall be null and void.
16. Food Service Waste Reduction Requirements. The Trustee shall comply with the Food Service Waste Reduction Ordinance, as set forth in San Francisco Environment Code Chapter 16, including but not limited to the provided remedies for noncompliance.
17. Cooperative Drafting. This Third Supplemental Trust Indenture has been drafted through a cooperative effort of the City and the Trustees, and all parties have had an opportunity to have the Third Supplemental Trust Indenture reviewed and revised by legal counsel. No party shall be considered the drafter of this Third Supplemental Trust Indenture, 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 Third Supplemental Trust Indenture.
18. Sugar-Sweetened Beverage Prohibition. The T rustee 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 Third Supplemental Trust Indenture.
19. First Source Hiring Program . The Trustee 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 Third Supplemental Trust Indenture, and the Trustee 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 B, including enforcement and penalty provisions, are incorporated into this Third Supplemental Trust
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Indenture by reference. The full text of the San Francisco Municipal Code provisions incorporated by reference in this Exhibit B are available at www.sfgov.org under “Open Gov.”
21. Prevailing Wages. Services to be performed by the Trustee under this Third Supplemental Trust Indenture 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 Third Supplemental Trust Indenture as if fully set forth herein and will apply to any Covered Services performed by the Trustee.
HB Draft of 08/16/2023
$________
PUBLIC UTILITIES COMMISSION OF THE
CITY AND COUNTY OF SAN FRANCISCO
POWER REVENUE BONDS
2023 SERIES A
BOND PURCHASE CONTRACT
_________, 2023
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 J.P. Morgan Securities LLC, on its own behalf and as representative (the “Representative”) of Morgan Stanley & Co. LLC and Siebert Williams Shank & Co., LLC (collectively, the “Underwriters” ), offers to enter into this Bond Purchase Contract (this “Purchase Contract” ) with the Public Utilities Commission of the City and County of San Francisco (the “Commission”), which will be binding upon the Commission and the Underwriters upon acceptance hereof by the Commission. This offer is made subject to the acceptance by the Commission by its execution of this Purchase Contract and its delivery to the Representative on or before 11:59 p.m., California time, on the date hereof and, if not so accepted, will be subject to 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 withdraws this offer, or the Under writers’ 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 their behalf and has full authority to take such action as it may deem advisable in respect to all matters pertaining to this Purchase Contract and that the Representative has been duly authorized to execute this Purchase Contract. Any action 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 Trust Indenture, dated as of May 1, 2015 (the “Master Indenture”), between the Commission and U.S. Bank Trust Company, National Association, as successor trustee (the “Trustee”), as -2-
supplemented and amended by a First Supplemental Trust Indenture, dated as of May 1, 2015, as supplemented and amended by a Second Supplemental Trust Indenture, dated as of November 1, 2021, and as supplemented and amended by a Third Supplemental Trust Indenture, dated as of [October 1], 2023 (the “Third 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 hereby 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 $________ aggregate principal amount of Public Utilities Commission of the City and County of San Francisco Power Revenue Bonds, 2023 Series A (the “Bonds”).
The purchase price for the Bonds shall be $_______ (representing the principal amount of the Bonds, [plus net original issue premium on the Bonds of $ __________,] less an underwriters’ discount in the amount of $_________).
The Bonds shall be dated their date of delivery and shall have the maturities in principal amounts and bear interest at the rates per annum and have the yields all as set forth on Schedule I attached hereto. The Bonds shall be subject to optional and mandatory sinking fund redem ption 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 the Charter (the “ Charter”) of the City and County of San Francisco (the “City ”), ordinances passed by the City’s Board of Supervisors authorizing the issuance and sale of power revenue bonds of the Commission and Resolution No. ______, adopted by the Commission on _________, 2023 (the “Commission Resolution”).
The Bonds are being issued to ( i) financ e or refinanc e (through the retirement of outstanding commercial paper notes ) various capital projects benefiting the Power Enterprise (including, if applicable, reimbursing the Commission for certain capital costs previously paid with the proceeds of outstanding commercial paper notes or other moneys), as may be determined by the General Manager, ( ii) financ e capitalized interest and ( iii) pay 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. On or prior to the Closing Date (as hereinafter defined), the Representative will provide the Commission with information regarding the reoffering prices and yields on the Bonds, in such form as the Commission may reasonably request. for purposes of determining the yield on the Bonds under Section 148 of the Internal Revenue Code of 1986, as amended. The Underwriters agree to make a bona fide public offering of all the Bonds, at prices not in excess of the prices or yields 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 -3-
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 they 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 .
Subsequent to the initial public offering, the public offering prices of the Bonds may change as determined by the Underwriters to be necessary in connection with the marketing of the Bonds.
Section 4. 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 ________, 2023 (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 Prelimi nary Official Statement has been made available to investors [ on the internet at www.munios.com]. The Commission hereby agrees to deliver or cause to be delivered to the Underwriters within seven (7) Business Days of the date hereof and in sufficient time to accompany any orders or confirmations from the Underwriters that request payment from any customers, the final official statement (including all information permitted to be omitted by Rule 15c2-12 and any amendments or supplements to such official statement as have been approved by the Commission and the Representative) (the “Official Statement” ) 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 file a copy of the Official Statement with the MSRB or its designee (including the MSRB’s Electronic Municipal Market Access system (“ EMMA”)) or with any other repository approved from time to time by the SEC (either in addition to or in lieu of the filings referred to above).
The Commission will deliver the Continuing Disclosure Certificate substantially in the form set forth in the Preliminary Official Statement (the “Continuing Disclosure Certificate”) on the Closing Date. The form of the Continuing Disclosure Certificate will also be set forth in the Official Statement.
Section 5. The Closing. At ______ a.m. , California time, on _________, 2023 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 -4-
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 men tioned at the offices of Stradling Yocca Carlson & Rauth, a Professional Corporation (“Bond Counsel”), in Newport Beach, California, or via electronic deal room or at another place to be mutually agreed upon by the Commission and the Representative. The Underwriters shall accept such delivery and pay the purchase price for the Bonds set forth in Section 1 by federal funds wire transfer in immediately available funds to the order of the Trustee for the account of the Commission. This payment for, and delivery of, the Bonds, together with the delivery of the aforementioned documents, is herein called the “Closing.” The Representative shall order CUSIP identification numbers and the Commission shall cause such CUSIP identification numbers to be printed on the Bonds; provided, that neither the failure to print such number on any Bond nor any error with respect thereto shall constitute cause for a failure or refusal by the Underwriters to accept the Bonds.
Section 6. Representations, Warranties, and Agreemen ts 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 laws of the State of California (the “State”), with full authority to: (i) adopt the Commission Resolution; (ii) execute and deliver the Master Indenture, the Third Supplemental I ndenture, 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 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 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 the in formation in the Official Statement, as of its date was 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 untrue statement of any material fact, and did not and will not omit to state any material fact that is necessary to make the statements made therein, in the light of the circumstances under which such statements were made, not misleading in any material respect, excluding in each case any info rmation 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 -5-
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 prior to the End of the Underwriting Period (as defined below), an event occurs or facts or conditions become known of which the Commission has knowledge, which in the reasonable opinion of 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 properties or other assets is ot herwise 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 Sta tement, neither the execution nor the delivery by the Commission of the Indenture, the Continuing Disclosure Certificate or this Purchase Contract, the adoption of the Commission Resolution, or the compliance by the Commission with such documents or author izations, 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 -6-
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 Continuing Disclosure Certificate or this Purchase Contract. (e) No Other Bond Issues or Debt . 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, other than in as contemplated by the Preliminary Official Statement or the Official Statement.
(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 board or body, pending or, to the knowledge of the Commission, threatened against the Commission: (i) affecting the existence of the Commission or the titles of its officers to their respective offices; (ii) seeking to restrain or to enjoin the sale or delivery of the Bonds or the application of the proceeds therefrom in accordance with the Indenture; (iii) in any way contesting or affecting the validity or enforceability of the Bonds, the Indenture, the 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 delive ry 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 f inal adverse decision would materially and adversely affect the operations of the Power Enterprise, Revenues available to pay the Bonds 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 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.
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(h) Continuing Discl osure. 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, to its knowledge, 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 Third 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 law 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, 2021 and June 30, 2022 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 financi al 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, 2021 and June 30, 2022 in the Preliminary Official Statement or the Official Statement.
Section 7. Representations, Warranties and Agreements of the Underwriters. The Underwriters represent, warrant and agree with the Commission that:
(a) The Representative has been duly authorized to enter into this Purchase Contract.
(b) The Underwriters shall comply with the San Francisco Business Tax Ordinance and shall, if not otherwise exempt from such ordinance, provide to the Commission a Business Tax Registration Certificate on or prior to the date hereof. (c) The Underwriters shall comply with all SEC and MSRB rules applicable to the offering, sale and delivery of the Bonds to ultimate purchasers. -8-
(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 the 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 Municipal Advisor identified herein and any notice or report to be provided to the Commission may be provided to the Commission’s Municipal Advisor.
(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 A to Appendix C 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 maturit ies are indicated in Schedule A to Appendix C 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 CUSIP number for such Bonds is subject to the 10% test or subsection (c) below, as the case may be, as if such separate CUSI P 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 p rices (the “initial offering price”), or at the corresponding yield or yields, set forth in Schedule A to Appendix C attached hereto, except as otherwise set forth therein. Schedule A to Appendix C 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 , -9-
which will allo w the Commission to treat the initial offering price to the public of each such maturity as of the sale date as the issue price of that maturity (the “hold-the-offering- price rule”). So long as the hold-the-offering-price rule remains applicable to any maturity of the Bonds, the 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 (5th) 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 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 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 Bond s, 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 com ply with its agreement regarding the requirement for est ablishing 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 that no Underwriter shall be liable for the failure of any other Underwriter, or of any dealer who is a member of a selling group, or of any broker -dealer that is a party to a 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, incl uding, 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:
(i) any agreement among underwriters, any se lling 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:
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(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 Underwri ter, 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 initi al sale of the Bonds to the public to require each broke r-dealer that is a party to such retail or other third- party distribution agreement to (A) report the prices at which it sells to the public the unsold Bonds of each maturity allocated to it until it i s notified by the Representative or the Underwriter that either the 10% test has been satisfied as to the Bonds of that maturity or all Bonds of that maturity have been sold to the public , and (B) comply with the hold-the-offering-price rule, if applicab le, in each case if and for so long as directed by the R epresentative or the Underwriter or the dealer 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 under writer 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 i nitial 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 sellin g 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 subjec t, 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 ownership by one corporation of another), (ii) more than 50% -11-
common ownership of the ir 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 interes ts 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 Purchase 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 Repr esentation. The representations and warranties of the Commission contained herein shall be true, accurate and correct in all material respects at the date hereof, and on the Closing Date, as if made on the Closing Date. (b) Executed Documents and Perform ance Thereunder . At the time of the Closing: (i) the In denture, this Purchase Contract 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 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 . T he Representative may terminate this Purchase Contract by notification in writing to the Commission from the R epresentative, 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) a ny event shall occur which makes untrue any statement of a material fact or results in an omission to state a material fact necessary to make the statements in the Official Statement, in the light of the circumstances under which they were made, not misleading and the Commission fails to amend or supplement the Official Statement pursuant to Section 6(c) hereof or the effect of the amendment or supplement, in the reasonable judgment of the Representative, -12-
would materially adversely affect the market for the Bonds, at the contemplated offering prices (or yields) by the Underwriters of the Bonds; or (ii) an amendment to the Constitution of the United States or the Constitution of the State or legislation in or by the Congress of the United States or the legislature of the State, or the amendment of legislation pending as of the date of this Purchase Contract in the Congress of the United States, or the favorable reporting for passage of legislation to either House of the Congress of the United States by a Comm ittee 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 behalf of the United States Treasury Depart ment, 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 c haracter 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 charact er 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 d ecision 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) t here shall have occurred a general suspension of trading or additional material restrictions not in force as of the date hereof (including the imposition of any limitation on interest rates) shall have been imposed upon -13-
trading in the United States in secu rities generally, or the extension of credit by, or a change to the net capital requirements of, underwriters 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 i n securities settlement, payment or clearance services has occurred; or
( viii) the ratings on the Bonds or any other debt obligations secured by Revenues 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 occurr ed 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 c ontext otherwise indicates) the following documents, in each case satisfactory in form and substance to the Representative:
(1) Approving Authorizations. Certified copies of the Ordinances and Commission Resolution.
(2) Bond Documents . E xecuted cop ies of the Master Indenture, the Third Supplemental Indenture, 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 lett er 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 2023A BONDS,” “S ECURITY FOR THE BONDS,” “T AX MATTERS,” Appendix A—“S UMMARY OF CERTAIN PROVISIONS OF THE INDENTURE,” and Appendix C—“ PROPOSED FORM OF OPINION OF BOND -14-
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 l imited 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) Disclosure Counsel Opinion as to Official Statement. An opinion of Orrick, Herrington & Sutcliffe LLP, as Disclosure Counsel to the Commission, addressed to the Commission and the Underwriters, dated the Closing Date, to the effect that, while such counsel is not passing upon, and does not assume any responsibility for, the accuracy, completeness or fairness of any of the statements contained in the Preliminary Official Statemen t 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 Appendices included therein (other than Appendix D), and any information incorporated by reference therein, as to which no opinion or view need be expressed) contained any untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading. (6) 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 warranti es of the Commission contained herein are true and correct in all material respects on and as of the Closing Date as if made on the Closing Date.
(ii) No event affecting the Commission has occurred since the date of the Official Statement which has not be en disclosed therein or in -15-
any supplement or amendment theret o which event should be disclosed in the Official Statement in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. (7) Certificate of the Trustee . A certificate of t he Trustee, dated the Closing Date, to the effect that:
(i) The Trustee 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 to perform its obligations thereunder and to authenticate the Bonds. (ii) The Trustee has accepted the duties and obligations imposed on it by the Indenture.
(iii) No consent, approval, authorization or other action by any governmental or regulatory authority having jurisdiction over the Trustee that has not been obtained is or will be required for the consummation by the Trustee of the transactions contemplated by the Indenture to be undertaken by the Trustee.
(iv) Compliance with the term s of the Indenture will n ot 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 the Trustee is a party or by which it is bound, or, to the best knowledge of the Trustee, after reasonable investigation, any law, rule, regulation, order or decree of any court or governmental agency or body having jurisdiction over the Trustee or any of its activities or properties (except that no r epresentation, warranty o r agreement is made by the Trustee with respect to any federal or state securities or Blue Sky laws or regulations).
(v) To the knowledge of the Trustee after due inquiry, there is no action, su it, 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 the Trustee, or in any way contesting or affecting the validity or enforceability of the Indenture or the Bonds, or contesting the powers of the Trustee or its authority to enter into and perform its obligations under the Indenture or the Bonds, wherein an unfavorable decision, ruling or finding would adversely affect the validity of the Bonds or the Indenture. -16-
(8) Trustee’s Counsel Opinion. An opinion of counsel to the Trustee addressed to the Commission and the Underwriters, dated the Closing Date, to the effect that:
(i) T he Trustee is a national banking association with trust powers, duly organize d 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) The Trustee has full legal power and adequate corporate authority to accept the duties and obligations imposed on it by the Indenture 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 the Trus tee. (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 Indenture and the authentication of the Bonds or the consummation by the Trustee of the transactions contemplated in the Indenture exc ept 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) Trustee’s acceptance of its duties under the Indenture and the authentication of the Bonds by the Trustee and performance by the Trustee of its obligations thereunder will not conflict with or result in a breach of any of the terms, conditions or provis ions of its Articles of Association or Bylaws or any other agreement or instrument to which the Trustee is a party or by which it is bound or any other existing law, regulation, court order or consent decree to which the Trustee is subject or constitute a default thereunder.
(vi) There is n o 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 the Trustee affecting the existence of the Trust ee or the titles of its officers to their respective offices or seeking to prohibit, restrain or enjoin the authentication of the Bonds by the Trustee, or contesting the powers of the Trustee or its authority to perform its obligations under the Indenture or the Bonds.
(9) Tax Certificate . Tax Certificate of the C ommission, dated the Closing Date, in form satisfactory to Bond Counsel.
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(10) California Debt and Investment Advisory Commission Filings .
Copies of the Report of Proposed Debt Issuance and Report of Final Sale required to be delivered to the California Debt and Investment Advisory Commission pursuant to Section 53583 of the Government Code and Section 8855(g) of the Government Code.
(11) Rating Letters for the Bonds. Rating lette rs of Fitch Ratings (“Fitch”) 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. (12) Opinion of the City Attorney. An opinion of the City Attorney addressed to the Underwriters, dated the Closing Date, substantially in the form attached hereto as Appendix B.
(13) Blue Sky Memorandum. A copy of the Blue Sky Memorandum with respect to the Bonds, prepared by Husch Blackwell, LLP, counsel to the Underwriters (“Underwriters’ Counsel”).
(14) Opinion of the Underwriter s’ Counsel. The opinion of Underwriters’ Counsel, dated the Closing Date and addressed to the Underwriters, in form satisfactory to the Underwriters.
(15) 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 representat ions of the Commission and the due performance or satisfaction by the Commission at or prior to such time of all agreements then to be performed and all conditions then to be satisfied by the Commission.
If the Commission shall be unable to satisfy the conditions contained in t his Purchase Contract, unless waived by the Representative, or if the obligations of the Underwriters shall be terminated for any reason permitted by this Purchase Contract, this Purchase Contract shall terminate and the Underwriters and the Commission sha ll 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 purchas e 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 thi s 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 $______ (i.e. one percent (1%) of the amount of the Bonds as reflected on the Preliminary Official Statement) (the “Good Faith Deposit”). At the Closing, the Good Faith Deposit will be applied towards and deducted from the aggregate net purchase price for the Bonds as provided in Section 1 of this Purchase Contract. If the Underwriters fail to pay the purchase price in full upon tender of the Bonds -18-
(other than f or 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 Un derwriters 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 purcha se 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 f ailure and any other defaults by Underwriters hereunder. Accordingly, t he Underwriters hereby waive any right to claim that the actual damages of the Commission are less than the Good Faith Deposit, and the acceptance of this offer by the Commission shall constitute a waiver of any right the Commission may have to additional damages from the Underwriters.
The Underwriters and the Commission hereby acknowledge and agree that the amount fixed pursuant to this Section for liquidated damages does not constitute a penalty and is a reasonable estimate of the damages that the Commission would sustain in the event of the Underwriters’ failure to purchase and to accept delivery of the Bonds on the Closing Date pursuant to the t erms 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 Purchas e 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 reas onable 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 PFM California Advisors LLC, as Financial Advisors to the Commission, and any other experts or consultants retained by the Commission in connection with the transactions contemplated hereby; and (4) the costs related to obtaining ratings. -19-
(b) Underwriters. The Commission has agreed to pay the Underwriters’ discount set forth in Section 1 of this Purchase Contract, and (subject to Section 7(d) above) inclusive in the expense component of the Underwriter’s dis count 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 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 , the fees of Digital Assurance Certification, L.L.C. for a continuing disclosure compliance review and expenses incurred by the Underwriters on behalf of the Commission’s employees and representatives which are in connection with this Purchase Contract, including, but not limited to, transportation, lodging, and meals. The Underwriters agree t o provide the Commission with a detailed itemization of any such expenses incurred on behalf of Commission employees or representatives prior to the Closing Date.
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 Commission, 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: Chief Financial Officer and Assistant General Manager, Business Services
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:
J.P. Morgan Securities LLC
560 Mission Street, Floor 3
San Francisco, CA 94105
Attention: Will Frymann, Executive Director
Telephone: (415) 315-3901
Section 14. E ntire 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 Commis sion) and no other person shall acquire or have any right hereunder by virtue hereof. All of the Commission’s representations, covenants and agreements in this Purchase Contract shall remain operative and in full force and effect, re gardless 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 pa rties 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 Relian ce on Representations and Warranties . T he 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, are relying upon the representations of the Commission set forth herein. The Underwriters 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 o ne 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 t he 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, t hat the Commission may waive the requirement of venue.
Section 19. Limited Liability . The obligations and liabilities of the Commission hereunder are limited obligations of the Commission payable solely from Revenues as defined -21-
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 lia bility 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 interes ts that differ from those of the Commission, (iii) the Underwriters have not assumed (individually or collectively) a fiduciary responsibility in favor of the Commission with respect to the offe ring 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 respe ct 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 conne ction with the offering of the Bonds. The Underwriters are not acting as municipal advisors 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.
[Remainder of page intentionally left blank]
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This Purchase Contract shall become effective upon execution of the acceptance of this Purchase Contract by the Commission and shall be valid and enf orceable as of the time of such acceptance.
Very truly yours,
J.P. MORGAN SECURITIES LLC, as
Representative
By: ___________________________________
Name: Will Frymann
Title: Executive Director
Accepted as of the date first stated above:
P
UBLIC 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 Power Revenue Bonds 2023 A Bond Purchase Contract] S-I-1
SCHEDULE I
TO THE PURCHASE CONTRACT
MATURITY SCHEDULE
$______________
2023 Series A Bonds
Maturity
(November 1)
Principal
Amount
Interest
Rate Yield Price
CUSIP
(Base No.
_______)
c Priced to the Call Date of _________
* Term Bonds
S-I-2
Redemption Provisions for the Bonds
Optional Redemption. The Bonds maturing on and after November 1, 20[__] are subject to redemption prior to their respective stated maturity dates, at the option of the Com mission, from any source of available funds, as a whole or in part, in Authorized Denominations, on any date on or after [May/November] 1, 20[__], and if in part by lot within such maturity of Bonds, at a Redemption Price equal to 1 00% of the principal amount of Bonds to be redeemed, plus accrued interest thereon to the date fixed for redemption, without premium. [Optional Redemption of the Bonds Prior to [May/November] 1, 20[__]. Prior to [May/November] 1, 20[__], the Bonds are subject to optional redemption prior to their respective stated maturity dates, at the option of the Commission , from any source of available funds (other than Mandatory Sinking Fund Payments) as a whole or in part, in Authorized Denominations, on any date, at a Redemption Price equ al to, for each maturity of the Bonds to be redeemed, 100% of the Amortized Value (defined below) of the Bonds of such maturity to be redeemed, plus accrued interest to the date of redemption on the Bonds of such maturity to be so redeemed. “Amortized Val ue” will equal the principal amount of the Bonds to be redeemed multiplied by the price of such Bonds expressed as a percentage, calculated based on the industry standard method of calculating bond prices, with a delivery date equal to the date of redemption, a maturity date equal to the stated maturity date of such Bonds and a yield equal to such Bonds’ original offering yield as set forth on the inside cover of the Official Statement relatin g to the Bonds.]
Mandatory Sinking Fund Redemption. The Bonds maturing on November 1, 20__, and November 1, 20__, are further subject to redemption prior to their stated maturity, in part by lot, from Mandatory Sinking Fund Payments required to be made by the Commission as specified below to be deposited in the 2023 S eries A Bond Retirement Account, on each November 1 on or after November 1, 20__, and November 1, 20__, respectively, at a Redemption Price equal to the principal amount thereof to be redeemed and accrued interest thereon to the dat e fixed for redemption, without premium.
The Term Bonds maturing on November 1, 20__ shall be redeemed from Mandatory Sinking Fund Payments in the following principal amounts on the dates indicated below.
Redemption Date
(November 1) Principal Amount
†
__________
† Maturity
The Term Bonds maturing on November 1, 20__ shall be redeemed from Mandatory Sinking Fund Payments in the following respective principal amounts on the dates indicated below.
S-I-3
Redemption Date
(November 1) Principal Amount
†
__________
† Maturity
In the event less than all of the Term Bonds of a maturity are purchased or called for optional redemption, the Mandatory Sinking Fund Payments for such Term Bonds to be reduced shall be specified by the Commission.
A-1
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 inco rporate by reference in any subcontracts the provisions of Secti ons 12B.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 Section 12B.2.
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. Pursuant to San Francisco Environment Code Section 804(b), the City urges each Underwriter not to import, purchase, obtain, or use for any purpose, any tropical hardwood, tropical hardwood wood product, virgin redwood or virgin redwood wood product.
4. Alcohol and Dr ug-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 abi lity 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, A-2
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 mea ns 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 this 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 ack nowledges that this Purc hase Contract and all records related to its formation, such Underwriter’s performance under this 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 Contra ct, 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 person al 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 (i) 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, (ii) a candidate for that City elective office, or (iii) a committee controlled by such elected official or a candidate for that office, at any time from the submission of 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% in such Underwriter; any subcontractor listed in the bid or contract; and any committee that is sponsored or controlled by such Underwriter. Each U nderwriter certifies that it has informe d each such person of the limitation on contributions imposed by Section 1.126 by the time it submitted a proposal for the contract, and has provided the names of the persons required to be informed to the City department with whom it is contracting.
8. Requiring Minimum Compensation for Covered Employees . If Administrative Code Chapter 12P applies to this Purchase Contract, each Underwriter shall pay covered employees no less than the minimum compensation required by S an Francisco Administrative Code Chapter 12P, including a minimum hourly gross compensation, compensated time off, and uncompensated time off. Each Underwriter is subject to the enforcement and penalty provisions in Chapter 12P. Information about and the text of the Chapter 12P is available on the web at http://sfgov.org/olse/mco. Each Underwriter is required to comply with all of the applicable provisions of 12P, irrespective of the listing of obligations in this Section. By signing and executing this Purc hase Contract, each Underwriter certifies that it complies with A-3
Chapter 12P.
9. Requiring Health Benefits for Covered Employees. If Administrative Code Chapter 12Q applies to this Purchase Contract, each Underwriter shall comply the requirements of Chapter 12Q. For each Covered Employee, the respe ctive Underwriter shall provide the appropriate health benefit set forth in Section 12Q.3 of the HCAO. If an Underwriter chooses to offer the health plan option, such health plan shall meet the minimum standards set forth by the San Francisco Health Commi ssion. Information about and the text of the Chapter 12Q, as well as the Health Commission’s minimum standards, is available on the web at http://sfgov.org/olse/hcao. Each Underwriter is subject to the enforcement an d penalty provisions in Chapter 12Q. Any subcontract entered into by an Underwriter shall require any subcontractor with 20 or more employees to comply with the requirements of the HCAO and shall contain contractual obligations substantially the same as those set forth in this Section.
10. Prohibition on Political Activity with City Funds. In performing under this 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 candidate or for a ballot measure. Each Underwriter is subject to the enforcement and penalty provisions in Chapter 12G.
11. Nondisclosure of Private, Proprietary or Conf idential 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 Chapte r 12M and in this Purchase Contract and only as necessary in performing the services provided under this Purchase Contract. Each Underwriter is subject to the enforcement and penalty provisions in Chapter 12M.
In the performance of services provided under this Purchase Contract, each Underwriter may have access to the City’s proprietary or confidential information, the disclosure of which to third parties may damage the City. If the City disclo ses proprietary or confidential information to an Underwriter, such information must be held by such Underwriter in confidence and used only in performing this Purchase Contract. Each Underwriter shall exercise the same standard of care to protect such inf ormation 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 Employment Decisions,” of the San Francisco Administrative Code (“Chapter 12T”), including the remedies provided, and implementing regulations, as may be amended from time to time. The provisions of Chapter 12T are incorporated by reference and made a part of this 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, A-4
irrespective of the listing of obligations in this Section. Capitalized terms used in this Sectio n 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 Contrac t, 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 which excludes Airport property. Chapter 12T shall not apply when the application in a particular context would conflict with federal or state law or with a r equirement of a government agency implementing federal or state law.
13. Reserved.
14. 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 Cod e §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 approva l; (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.
15. Conflict of Interest. By entering into this 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, Chapt er 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.
16. Food Service Waste Reduction Requirements. Each Underw riter shall comply with the Food Service Waste Reduction Ordinan ce, as set forth in San Francisco Environment Code Chapter 16, including but not limited to the provided remedies for noncompliance.
17. Distribution of Beverages and Water . Each Underwriter agrees that it will not sell, provide, or otherwise distribute Suga r-Sweetened Beverages, as defined by San Francisco Administrative Code Chapter 101, as part of its performance of this Purchase Contract. Each Underwriter agrees that it shall not sell, provide or otherwise distribute Packaged Wate r, as defined by San Francisco Environment Code Chapter 24, as part of its performance of this A-5
Purchase Contract.
18. Consideration of Salary History. Each Underwriter shall comply with San Francisco Administrative Code Chapter 12K, the Consideration of Salary History Ordinance or "Pay Parity Act." Each Underwriter is prohibited from considering current or past salary of an applicant in determining whether to hire the applicant or what salary to offer the applicant to t he extent that such applicant is applying for employment to be performed on this Purchase Contract or in furtherance of this Purchase Contract, and whose application, in whole or part, will be solicited, received, processed or considered, whether or not through an interview, in the City or on City property. The ordinance also prohibits employers from (1) asking such applicants about their current or past salary or (2) disclosing a current or former employee's salary history without that employee's authorization unless the salary history is public ly available. Each Underwriter is subject to the enforcement and penalty provisions in Chapter 12K. Information about and the text of Chapter 12K is available on the web at https://sfgov.org/olse/consideration-salary-history. Each Underwriter is required to comply with all of the applicable provisions of 12K, irrespective of the listing of obligations in this Section.
19. Laws Incorporated by Reference. The full text of the laws listed in this Attachment 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 Attachment A are available at http://www.amlegal.com/codes/client/san-francisco_ca/
20. First Sourc e 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 Under writer is subject to the enforcement and penalty provisions in Chapter 83.
21. Prevailing Wages . Services to be performed by an Underwriter under this Purchase Contract may involve the performance of trade work covered by the provisions of Section 6.22(e) or Section 21C of the Administrative Code (collectively, “Covered Services”).
The provisions of Section 6.22(e) and Section 21C of the Administrative Code are incorporated as provisions of this Purchase Contract as if fully set forth herein and will apply to any Covered Services performed by each Underwriter.
22. Contractor Vaccination Policy.
(a) Each Underwriter acknowledges that it has read the requirements of the 38th Supplement to Mayoral Proclamation Declaring the Existence of a Local Emergency (“Emergency Declaration”), dated Februa ry 25, 2020, and the Contractor Vaccination Policy for City Contractors issued by the City Administrator (“Contractor Vaccination Policy”), as those documents may be amended from time to time. A copy of the Contractor Vaccination Policy can be found at: https://sf.gov/confirm-vaccine-status-your-employees-and-subcontractors.
(b) A Contract subject to the Emergency Declaration is an agreement between the City and any other entity or individual and any subcontract under such agreement, where Covered Employees of the Contractor or Subcontractor work in- person with City employees in A-6
connection with the work or services performed under the agreement at a City owned, leased, or controlled facility. Such agreements include, but are not limited to, professional s ervices contracts, general services contracts, public works contracts, and grants. Contract includes such agreements currently in place or entered into during the term of the Emergency Declaration.
Contract does not include an agreement with a state or federal governmental entity or agreements that do not involve the City paying or receiving funds.
(c) In accordance with the Contractor Vaccination Policy, each Underwriter agrees that:
(i) Where applicable, each Underwriter shall ensure it complies with the requirements of the Contractor Vaccination Policy pertaining to Covered Employees, as they are defined under the Emergency Declaration and the Contractor Vaccination Policy, and insure such Covered Employees ar e either fully vaccinated for COVID -19 or obtain from such Under writer an exemption based on medical or religious grounds; and
(ii) If an Underwriter grants Covered Employees an exemption based on medical or religious grounds, such Underwriter will promptly notify City by completing and submitting the Covered Employees Granted Exemptions Form (“Exemptions Form”), which can be found at https://sf.gov/confirm-vaccine-status-your-employees-and-subcontractors (navigate to “Exemptions” to download the form).
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APPENDIX B
FORM OF CITY ATTORNEY OPINION
[to come]
C-2
APPENDIX C
ISSUE PRICE CERTIFICATE
The undersigned, on behalf of J.P. Morgan Securities LLC, on its own behalf and as representative (the “Representative”) of Morgan Stanley & Co., LLC and Siebert Williams Shank & Co., LLC (together, the “Underwriting Group”), he reby 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, Power Revenue Bonds, 2023 Series A (the “Bonds”).
1. Sale of the General Rule Maturiti es. As of the date of this certificate, for each Maturity of the General Rule Maturities, the first price at which at least 10% of such Maturity was sold to the Public is the respective price listed in Schedule A.
2. [Initial Offering Price of the Hold-the-Price Maturities. (a) The Un derwriting Group offered the Hold-the- Price Maturities to the Public for purchase at the respective initial offering prices listed in Schedule A (the “Initial Offering Prices ”) on or before the Sale Date. A copy of the pricing wire or equivalent communication for the Bonds is attached to this certificate as Schedule B. (b) As set forth in the Bond Purchase Contract, dated ____, 2023, between the Representative and the Issuer, the members of the Underwriting Group have agreed in writing that, (i) for each Mat urity of the Hold-the- Offering-Price Maturities, the [Representative][Underwriters] will neither offer nor sell any of the unsold Bonds of such Maturity to any person at a price that is higher than the Initial Offering Price for suc h Maturity during the Holding Period for such Maturity (the “hold-the-offering-price rule”), and (ii) any selling group agreement shall contain the agreement of each dealer who is a member of the selling group, and a ny retail distribution agreement shall c ontain the agreement of each broker -dealer who is a party to the retail distribution agreement, to comply with the hold-the-offering-price rule. The Representative, on behalf of itself, and not on behalf of the Underwriting Group, represents that it has not offered or sold unsol d Bonds of any Maturity of the Hold-the- Offering Price Maturities, acquired by the Representative, at a price that is higher than the respective Initial Offering Price for that Maturity of such Bonds during the Holding Period. ]
3. Pricing Wire or Equivalent Communication . A copy of the pricing wire or equivalent communication for the Bonds is attached to this certificate as Schedule B.
4. Defined Terms.
(a) General Rule Maturities means those Maturities of the Bonds listed in Schedule A hereto as the “General Rule Maturities.”
(b) Hold-the-Offering-Price Maturities means those Maturities of the Bonds listed in Schedule A hereto as the “Hold-the-Offering-Price Maturities.” C-3
(c) Holding Period means, with respect to a Hold-the- Offering-Price Maturity, the period starting on the Sale Date and ending on the earlier of (i) the close of the fifth business day after the Sale Date, or (ii) the date on which the Underwriter sold at least 10% of such Hold-the- Offering-Price Maturity to the Public at prices that are no higher than the I nitial Offering Price for such Hold-the-Offering-Price Maturity.
(d) Issuer means the Public Utilities Commission of the City and County of San Francisco.
(e) Maturity means Bonds with the same credit and payment terms. Bonds with different maturity dates, or Bonds with the same maturity date but different stated interest rates, are treated as separate maturities.
(f) Public means any person (including an individual, 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. (g) Sale Date means the first day on which there is a binding contract in writing for the sale of a Maturity of the Bonds. The Sale Date of the Bonds is [Pricing Date]. (h) Underwriter means (i) any person that agrees pursuant to a written contract with the Issuer ( or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the Public, and (ii) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (i) of this paragraph to participate in the initial sale of the Bonds to the Public (including a member of a selling group or a party to a retail distribution agreement participating in the initial sale of the Bonds to the Public).
The representations set forth in this certificate are limited to factual matters only. Nothing in this certificate represents the Representative’s interpretation of any laws, including specifically Sections 103 and 148 of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations thereunder. The undersigned understands that the foregoing information will be relied upon by the Issuer with respect to certain of the representations set forth in the Tax Certificate and with respect to compliance with the federal income tax rules affecting the Bonds, and by Stradling Yocca Carlson & Rauth, in connection with rendering their its opinion that the interest on the Bonds is excluded from gross income for federal income tax purposes, the preparation of the Internal Revenue Service Fo rm 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.
C-4
J.P. MORGAN SECURITIES LLC, as
Representative
By: __________________________________
Name:
Title:
Dated: [Closing Date]
SCHEDULE A
SALE PRICES OF THE GENERAL RULE MATURITIES
AND
INITIAL OFFERING PRICES OF THE HOLD-THE-OFFERING-PRICE MATURITIES
Maturity
(November 1)
Principal
Amount
Interest
Rate Yield Price
10% Test Used
HTP
Rule
Used
SCHEDULE B
PRICING WIRE OR EQUIVALENT COMMUNICATION
(Attached)