Approve (1) the form of a Revolving Credit Agreement with Wells Fargo Bank, National — CleanPowerSF Sfpuc Commission, February 25, 2025

Nikolai J. Sklaroff,
Capital Finance Director
February 25, 2025
Water and Power Enterprise Interim
Funding Program Credit Facilities –
Revolving Credit Agreement
Agenda
• Interim Funding Programs
• New Water Enterprise Revolving Credit
Agreement
• Series R-2
• New Power Enterprise Revolving Credit
Agreement
• Series R-1
• Commission Authorization
2 3
Interim Funding Programs
• General Overview of Interim Funding Program was
provided during January 14, 2025, Commission Meeting
o In summary, the Interim Funding Program provides a cost- efficient means of releasing capital appropriation on Controller's Reserve, a means of funding capital needs by only borrowing debt as needed through issuance of Commercial Paper or
borrowing on revolving lines of credit, and a means of
aggregating borrowing needs until long-term bonds are issued • This presentation combines approval of one facility for the Water Enterprise under one resolution and one
facility for the Power Enterprise under a separate
resolution under one combined Revolving Credit
Agreement
4 Interim Funding Program
(Water Enterprise)
• Authorized for $500 million of interim financing previously • $250 million of Additional Authorization Approved by
Commission, BOS and Mayor Effective December 25, 2024
• Existing Facilities: four series ($550 million) for Commercial Paper; one ($100 million) for Revolving Credit Line:

Series
Amount
($millions) Credit Facility Bank Facility Type
Expiration
Date
A-1 100 Sumitomo Mitsui Bank Letter of Credit Feb 2030
A-2 200 Sumitomo Mitsui Bank Letter of Credit June 2027 A-3 100 Barclay’s Bank Letter of Credit July 2027
A-4 150 PNC Bank Letter of Credit Feb 2028
R-1 100 US Bank Revolving Credit Agreement July 2027
$650 Subtotal: Existing Facilities Under Prior Authorization 100 Unutilized New Authorization
$750 Total Program Authorization
New
New
5 Interim Funding Program
(Power Enterprise)
• Authorized for $250 million of interim financing previously • $200 million of Additional Authorization Approved by
Commission, BOS and Mayor effective December 25, 2024
• Existing facilities consist of two series (totaling $350 million) backed by Letters of Credit for Commercial Paper:

Series
Amount
($millions) Credit Facility Bank Facility Type
Expiration
Date
A-1 125 Bank of America Letter of Credit Mar 2026
A-2 125 Bank of America Letter of Credit Mar 2026
A-3 100 Sumitomo Mitsui Bank Letter of Credit Feb 2030
$350 Sub-Total: Existing Facilities under Prior Authorization 100 Unutilized New Authorization
$450 Total Program Authorization
New
6 Solicitation of Credit Facilities
• SFPUC and its municipal advisors, Backstrom McCarley Berry & Co., LLC conducted a competitive solicitation for credit facilities for additional Water interim funding facilities, a replacement for an expiring Water facility, as well as for additional Power interim funding facilities.
• The SFPUC solicited bids from the City’s pre-qualified pool of credit providers (currently maintained by the Airport Commission) and received responses from seven banks, including banks new to the SFPUC's credit portfolio
• Following evaluation of the proposals, and successful negotiation of terms with the selected providers. The Commission approved three facilities at its February 11th meeting and staff recommends the following proposed credit facilities.

Secured Overnight Financing Rate
(SOFR)
7 Source: Bloomberg
The Municipal Advisors provided a Good Faith Estimate that includes a 4.55% rounded 90-day average of SOFR (SOFR rate of 4.33% as of February 14, 2025). 0%
1%
2%
3%
4%
5%
6%
SOFR Data
8 • Staff recommends the following proposed credit facility for the Water Interim Funding Program:

Proposed Facility Tenor Short-Term Bank
Ratings
R-2, Wells Fargo Bank Revolver
($100 million principal) 3 years P-1, A-1, and F1+
New Credit Facility
(Water Interim Funding Program)
Proposed Fees Rate
Unutilized 0.25%
(Approx,. $250k per year)
Tax-Exempt Borrowing 0.55% plus an applicable spread to the Daily SOFR rate on amounts drawn
Taxable Borrowing 0.65% plus an applicable spread to the Daily SOFR rate on amounts drawn
The Secured Overnight Financing Rate (SOFR) is a broad measure of the cost of borrowing cash overnight collateralized by Treasury securities. 9 New Credit Facility
(Power Interim Funding Program)
• Based on the same RFP and process employed for
the Water Enterprise facilities, Staff recommends the
following proposed new credit facility for the Power
Enterprise:

Proposed Facility Tenor Short-Term Bank
Ratings
R-1, Wells Fargo Bank Revolver
($100 million principal) 3 years P-1, A-1, and F1+
Proposed Fees Rate
Unutilized 0.25% (Approx. $250k per year)
Tax-Exempt Borrowing 0.55% plus an applicable spread to the Daily SOFR rate on amounts drawn
Taxable Borrowing 0.65% plus an applicable spread to the Daily SOFR rate on amounts drawn
SB 450 Requirements
• SB 450 (enacted in October 2017), requires local
agencies to disclose, prior to authorization of a new loan, good faith estimates
• Information obtained from municipal advisor included in Commission Staff Report:
• A good faith estimates is $100,000 for each respective Water Enterprise and Power Enterprise commitment,
as follows:
10 Good Faith Estimates
11 True Interest Cost1 4.69%
Finance Charge of the Obligations 1. Fees to Wells Fargo (including Legal Fees) - $40,000

2. Counsel and Disbursements -
$35,000

3. Municipal Advisor and
Disbursements - $25,000
Total - $100,000
Amount of Proceeds to be Received
2 $100,000,000
Total Payment Amount3 $228,200,000
1Assumes full utilization of the $100 million Commitment for the Water Enterprise and $100 million Commitment for the Power Enterprise under the Wells Revolving Credit Agreement at an assumed interest rate set forth in the Wells Revolving Credit Agreement.
2Assumes full utilization of the $100 million Commitment for the Water Enterprise and $100 million Commitment for the Power Enterprise under the Wells Revolving Credit Agreement and that finance charges are not paid from Advances. 3Assumes $100 million is drawn for the Water Enterprise and $100 million for the Power Enterprise under the Wells Revolving Credit Agreement on the effective date of the Wells Revolving Credit Agreement and repaid on the stated expiration date of the Wells Revolving Credit Agreement.
12 Additional Facility Terms
• Proposed facilities may be extended up to nine years
total
• The SFPUC also may (and typically does) solicit the
best pricing available prior to replacing or extending a facility
13 Recommended Commission Action
(Water Series R-2 and Power R-1)
• Series R-2 for Water Enterprise and R-1 for Power
Enterprise: Request to approve Form of Revolving
Credit Agreement for a Not to Exceed Principal amount of $200 million and related fee agreement, of which a
principal amount of not to exceed $100 million is in
support of the Water Interim Funding Program and a
principal amount of not to exceed $100 million is in
support of the Power Interim Funding Program
• Revolving Credit Agreement
• Fee Agreement
14 Questions
4915-9517-4418.2

AGENDA ITEM
Public Utilities Commission
City and County of San Francisco

DEPARTMENT Financial Services AGENDA NO. 8
MEETING DATE February 25, 2025
Calendar: Regular Calendar
Project Manager: Nikolai J. Sklaroff

Approve New Credit Facility Agreements for Interim Funding of Water and Power Enterprise Capital Program

Summary of Proposed
Commission Action
Approve (1) the form of a Revolving Credit Agreement with Wells Fargo Bank, National Association (Wells Fargo) in the total principal amount of $200 million and (2) the related Fee Agreement, pursuant to which agreements a principal amount of not- to-exceed $100 million at any one time will support the San Francisco Public Utilities Commission Water Interim Funding Program and a principal amount of not-to-exceed $100 million at any one time will support the San Francisco Public Utilities Commission Power Interim Funding Program, separately; and authorize the General Manager to enter into the same agreements with Wells Fargo.

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

The San Francisco Public Utilities Commission (SFPUC) manages short-term (or interim) funding of its separate Water Enterprise and Power Enterprise capital programs through the periodic issuance of commercial paper (CP) notes or accessing available lines of credit, as needed.

Discussions of the specific Interim Funding Programs and tools for the Water Enterprise and Power Enterprise are also presented in the Staff Reports accompanying Resolution No. 25-0019 for the Water Enterprise and Resolution No. 25- 0020 for the Power Enterprise , both approved at the Commission’s February 11, 2025 meeting.

The Interim Funding Programs provide capacity to release budget reserves and allow the SFPUC to borrow only what is needed in small tranches, and then to aggregate borrowing costs into larger, more efficient long-term financings.

Each series of the SFPUC’s Interim Funding Programs is secured by a borrowing document . The SFPUC intentionally diversifies the

Agenda Title: Approve New Credit Facility Agreements for Interim Funding of Water and Power Enterprise Capital Program
Commission Meeting Date: February 25, 2025

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2 4915-9517-4418.2
types of facilities employed, which may be reimbursement agreements supporting a letter of credit, a liquidity facility agreement (such as a Standby Note Purchase Agreement), or a credit facility such as a revolving credit agreement . The Water Enterprise and Power Enterprise can each, separately, procure a revolving credit agreement (such as Series R-2 proposed here for the Water Enterprise and Series R-1 proposed here for the Power Enterprise ), in both cases as approved under the respective enterprise Interim Funding Programs to fund capital projects.

When drawing funds from any of these facilities, interest is paid to the bank at a variable rate based on a market index at the time of the draw plus a fixed spread, or margin predetermined per agreement terms. The term of the draw is open-ended (up to the expiration date of the facility) and can be repaid when long-term revenue bonds are issued for the respective enterprise or when advantageous for the SFPUC.

The respective enterprise Interim Funding Programs have been cost- effective means to fund the encumbrance, contract certification, and cash spending requirements of the respective Water Enterprise and Power Enterprise capital program s. The
periodic draws on the
revolving credit facility will remain outstanding until long- term revenue bond, long- term state or long- term federal loan financing replacement proceeds are available.

The Commission and the Board of Supervisors have authorized (i) the SFPUC Water Enterprise Interim Funding Program up to $750 million aggregate principal amount outstanding at any one time (which includes the additional $250 million of borrowing capacity authorized on December 25, 2024) and (ii) the SFPUC Power Enterprise Interim Funding Program up to $450 million aggregate principal amount outstanding at any one time, (which includes the additional $200 million of borrowing capacity authorized on December 25, 2024). Such additional and new authorizations of $250 million for the Water Enterprise and $200 million for the Power Enterprise, we approved by the Board of Supervisors by Ordinance 269-24 on November 19, 2024.

The Water Enterprise Interim Funding Program is currently made up of the following components:

• Four series totaling $ 550 million (aggregate principal amount) that are for the issuance of either tax-exempt or taxable CP and that are each supported by a high-grade Agenda Title: Approve New Credit Facility Agreements for Interim Funding of Water and Power Enterprise Capital Program
Commission Meeting Date: February 25, 2025

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3 4915-9517-4418.2
bank facility in the form of a letter of credit (LOC); and • One series that is for a $100 million revolving credit agreement (line of credit ) that can be used to make tax- exempt or taxable draws from a high-grade bank.

The new authorization pursuant to Ordinance No. 269-24, approved by the Board of Supervisors on November 10, 2024, expanding the Water Enterprise Interim Funding Program by $250 million to a total not-to-exceed principal amount of $750 million, includes the $150 million Reimbursement Agreement with PNC Bank National
Association for Series A -4/A-4-T that was unanimously approved by the Commission on February 11, 2025 (already reflected in bullet point one immediately above) . The remaining $100 million of the new authorization will fall under the Revolving Credit Agreement with Wells Fargo to be approved by this Resolution.

Currently, the five series of the Water Interim Funding Program are as follows:

1) Series A-1/A-1-T: $100 million Sumitomo Mitsui Bank
LOC (Expiring February 2030)
2) Series A-2/A-2-T: $200 million Sumitomo Mitsui Bank
LOC (Expiring July 2027)
3) Series A-3/A-3-T: $100 million Barclays Bank
LOC (Expiring July 2027)
4) Series A-4/A-4-T: $150 million PNC Bank LOC
(Expiring on February 2028)
5) Series R-1/R-1-T: $100 million US Bank Revolving Line of Credit (Expiring July 2027)

The Power Water Interim Funding Program is currently made up of the following components:

• Three series totaling $ 350 million (aggregate principal amount) that are for the issuance of tax-exempt CP and that are each supported by a high-grade bank credit facility in the form of a letter of credit (LOC);

The new authorization pursuant to Ordinance No. 269-24, approved by the Board of Supervisors on November 10, 2024, expanding the Power Enterprise Interim Funding Program by $20
0 million to a
total not-to-exceed principal amount of $450 million , includes the $100 million Reimbursement Agreement with Sumitomo Mitsui Bank Corporation for Series A -3/A-3-T that was unanimously approved by the Commission on February 11, 2025 (already Agenda Title: Approve New Credit Facility Agreements for Interim Funding of Water and Power Enterprise Capital Program
Commission Meeting Date: February 25, 2025

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4 4915-9517-4418.2
reflected in the bullet point immediately above). The remaining $100 million of the new authorization will fall under the Revolving Credit Agreement with Wells Fargo to be approved by this Resolution.

Currently, the three series of the Power Interim Funding Program are as follows:

1) Series A-1: $125 million Bank of America LOC (Exp.

March 2026)
2) Series A-2: $125 million Bank of America LOC (Exp.

March 2026)
3) Series A -3/A-3-T: $100 million Sumitomo Mitsui
Banking Corporation LOC (Exp. February 2030)

Staff recommends that the Commission approve the form of the following:

For the Water Enterprise:

• (i) A Revolving Credit Agreement with Wells Fargo for Series R -2 (Taxable and Tax -Exempt): $100 million
Revolving Line of Credit and (ii) a Fee and Interest Rate Agreement with Wells Fargo, as described below; and

For the Power Enterprise:

• (i) A Revolving Credit Agreement with Wells Fargo for Series R -1 (Taxable and Tax - Exempt): $100 million
Revolving Line of Credit and (ii) a Fee and Interest Rate Agreement with Wells Fargo, as described below.

A single Revolving Credit Agreement shall be used to create both of the Water and Power borrowing facilities; the two facilities shall also always remain distinct and never commingle, in compliance with the SFPUC’s obligations under Proposition 218 and Proposition 26 of the California Constitution.

Bank Facility Procurement Process: As has been SFPUC practice in the past, to renew or replace expiring agreements, the SFPUC has chosen to rely on the prequalified bank pool created by the San Francisco Airport Commission through a formal Request for Qualifications process. On October 21, 2024, the SFPUC’s Municipal Advisors solicited proposals from all banks in the pre- qualified Bank Credit Facilities Pool. On November 8, 2024, the SFPUC received proposals from seven banks, which the Municipal Agenda Title: Approve New Credit Facility Agreements for Interim Funding of Water and Power Enterprise Capital Program
Commission Meeting Date: February 25, 2025

Page 5 ends

5 4915-9517-4418.2
Advisors assisted in evaluating.

Recommendations: Staff recommends approval of the following facilities based on an evaluation of the terms, cost, credit quality of the bank, facility type offered, and other criteria as outlined in the RFP, as follows:

For the Water Enterprise:

Water Series R-2 (New Facility): A new Revolving Credit Agreement (Line of Credit) with Wells Fargo in the principal amount of $100 million at an annual cost of 0.25% unutilized (approximately $250,000), for three years, with the option to extend the Revolving Credit Agreement for up to a total term of up to nine years from the commencement of the initial term thereof, and a proposed not -to-exceed future draw fee of $500,000 per year in the event the facility is extended.1

Should the commission draw on the credit facility, the fees increase to 0. 55% (for tax -exempt borrowing) and 0.65% (for taxable borrowing) plus an applicable spread to the Daily SOFR rate on amounts drawn, which is the Secured Overnight Financing Rate published by the Federal Reserve Bank of New York each business day representing the cost of borrowing cash overnight secured by U.S. Treasury
securities. This acts as a benchmark interest rate for various financial products in the market. Rates and terms are further stipulated in the Fee Agreement.

These costs and unutilized fees are less than the assumptions used in the financial plans for the recently approved Water Enterprise capital budget and are comparable to fees recently obtained from banks for other recent SFPUC agreements.

Proposed Facility Tenor
Proposed
Annual Fee
R-1, Wells Fargo Bank
Revolver ($100m) 3 years 0.25%

Power Enterprise:

Power Series R-1 (New Facility): A new Revolving Credit Agreement (Line of Credit) with Wells Fargo in the principal amount of $100 million at an annual cost of 0.25% unutilized (approximately $250,000), for three years, with the option to Agenda Title: Approve New Credit Facility Agreements for Interim Funding of Water and Power Enterprise Capital Program
Commission Meeting Date: February 25, 2025

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6 4915-9517-4418.2
extend the Revolving Credit Agreement for up to a total term of up to nine years from the commencement of the initial term thereof, and a proposed not -to-exceed future draw fee of $500,000 per year in the event the facility is extended.1

Should the commission draw on the credit facility, the fees increase to 0.55% (for tax- exempt borrowing) and 0.65% (for taxable borrowing) plus an applicable spread to the Daily SOFR rate on amounts drawn, which is the Secured
Overnight Financing Rate published by the Federal Reserve Bank of New York each business day representing the cost of borrowing cash overnight secured by U.S. Treasury
securities. This acts as a benchmark interest rate for various financial products in the market. Rates and terms are further stipulated in the Fee Agreement.

These costs and unutilized fees are less than the assumptions used in the financial plans for the recently approved Power Enterprise capital budget and are comparable to fees recently obtained from banks for other recent SFPUC agreements1.

Proposed Facility Tenor
Proposed
Annual Fee
R-1, Wells Fargo Bank
Revolver ($100m) 3 years 0.25%

1 The actual fee for future extensions is unknown and would be determined in negotiation with the bank or through a competitive process.

The proposed credit facilities have high- grade short -term credit ratings from Moody’s Investors Service, S&P Global Ratings, and Fitch Ratings, respectively as follows:

• Wells Fargo Bank: P-1/A-1/F1+

This staff report includes two separate resolutions that correspond to each the Water and Power Enterprise borrowing facilities, respectively. As noted above, the documents to create the two borrowing facilities are the same documents.

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

1 The actual fee for future extensions is unknown and would be determined in negotiation with the bank or through a competitive process.

Agenda Title: Approve New Credit Facility Agreements for Interim Funding of Water and Power Enterprise Capital Program
Commission Meeting Date: February 25, 2025

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7 4915-9517-4418.2
form:

Form of Revolving Credit Agreement ( Wells Fargo ): This agreement, by and between the SFPUC and Wells Fargo, sets out the terms of providing a loan directly from the bank, including the process for making draws on the bank, and the terms for repayment of the loan to the bank.

Form of Interest Rate and Fee Letter Agreement (Wells Fargo): This agreement, by and between the SFPUC and Wells Fargo, sets out the fees Wells Fargo charges in connection with maintaining the facility and the terms associated with making draws upon the facility.

SB 450 Legislation Compliance: Pursuant to Senate Bill 450 (SB 450) enacted in 2017, California law requires the governing body of a local public body to obtain and disclose, prior to authorization of a new loan , good faith estimates of the following financing- related information:

GOOD FAITH ESTIMATES

The following information was obtained from Backstrom McCarley Berry & Co., LLC ( Municipal Advisor )
with respect to the
obligations to be incurred under the Wells Fargo Revolving Credit Agreement and the Notes ( Obligations) approved in the attached Commission Resolution s, and is provided in compliance with Section 5852.1 of the California Government Code with respect to the Obligations:

Section 1. True Interest Cost of the Obligations 2. Based on market interest rates prevailing at the time of preparation of this information, a good faith estimate of the true interest cost of the Obligations, which means the rate necessary to discount the amounts payable on the respective principal and interest payment dates to the purchase price received for the Obligations, is 4.69%.

Section 2. Finance Charge of the Obligations . A good faith estimate of the finance charges associated with the Obligations (the sum of all fees and charges paid to third parties (or costs associated with the Obligations), is $100,000 for each respective, separate Water Enterprise and Power Enterprise commitment, as follows:

2 Assumes full utilization of the $100 million Commitment for the Water Enterprise and $100 million Commitment for the Power Enterprise under the Wells Revolving Credit Agreement at an assumed interest rate set forth in the Wells Revolving Credit Agreement.

Agenda Title: Approve New Credit Facility Agreements for Interim Funding of Water and Power Enterprise Capital Program
Commission Meeting Date: February 25, 2025

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8 4915-9517-4418.2
Fe Wells Fargo (including legal fees) $ 40,000
(b) SFPUC Counsel and Disbursements $ 35,000
(b) Municipal Advisor and Disbursements $ 25,000
Total $ 100,000

Section 3. Amount of Proceeds to be Received 3. A good faith estimate of the amount of proceeds expected to be received by the Commission from Advances is $100,000,000.

Section 4. Total Payment Amount4. Based on market interest rates prevailing at the time of preparation of this information, a good faith estimate of the total payment amount, which means the sum total of all payments the Commission will make to pay debt service on the Obligations plus the finance charge of the Obligations described in Section 2 above not paid with the proceeds of the Advances, calculated to the stated expiration date of the Wells Revolving Credit Agreement, is $ 228,200,000 (aggregated for Water and Power).

Attention is directed to the fact that the foregoing information constitutes good faith estimates only. The actual interest cost, finance charges, amount of proceeds and total payment amount may vary from the estimates above due to variations from these estimates in the timing of Advances received by the Commission, and the amount of Advances received. The date and amount of Advances will be determined by the Commission based on need to provide funds to further the purposes of the interim borrowing program and other factors. Market interest rates are affected by economic and other factors beyond the Commission’s control.

Budget & Costs: The Water Enterprise capital budget and the Power Enterprise capital budget, and associated appropriations , cover the respective costs of this action.

Environmental Review: The proposed action is an approval for credit facility agreements that provide interim funding for the Water Enterprise and Power Enterprise capital program s. This action does not constitute a “project” under the California Environmental Quality Act ( CEQA) Guidelines section 15378(b)(4) because approval of the credit facility agreements is a government funding mechanism, which does

3 Assumes full utilization of the $100 million Commitment for the Water Enterprise and $100 million Commitment for the Power Enterprise under the Wells Revolving Credit Agreement and that finance charges are not paid from Advances.

4 Assumes $100 million is drawn for the Water Enterprise and $100 million for the Power Enterprise under the Wells Revolving Credit Agreement on the effective date of the Wells Revolving Credit Agreement and repaid on the stated expiration date of the Wells Revolving Credit Agreement.

Agenda Title: Approve New Credit Facility Agreements for Interim Funding of Water and Power Enterprise Capital Program
Commission Meeting Date: February 25, 2025

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9 4915-9517-4418.2
not involve any commitment to a specific project that may result in a potentially significant physical change in the environment.

On August 1, 2024, the Environmental Review Officer issued a Certificate of the City and County of San Francisco Planning Department (pursuant to Section 8B.124(b) of the City Charter) under Proposition E of November 2002, granting authority for the issuance of debt to the Board of Supervisors, for the Water Enterprise Capital Program. By this certification, the Environmental Review Officer certified that the projects to be funded through the sale of Water Revenue Bonds and/or Other Forms of Indebtedness, including Commercial Paper, either already comply with the requirements of the CEQA or will undergo CEQA review when they are defined. This certificate can be found here:
https://sfgov.legistar.com/View.ashx?M=F&ID=13655934&GUID= 508902F1-E4F7-4E7B-AFD3-435C73898E12

On August 1, 2024, the Environmental Review Officer issued a Certificate of the City and County of San Francisco Planning Department (pursuant to Section 8B.124(b) of the City Charter) under Proposition A of June 2018, granting authority for the issuance of debt to the Board of Supervisors, for the Power Enterprise Capital Program. By this certification, the Environmental Review Officer certified that the projects to be funded through the sale of Power Revenue Bonds and/or Other Forms of Indebtedness, including Commercial Paper, either already comply with the requirements of the California Environmental Quality Act (CEQA) or will undergo environmental review pursuant to the CEQA when they are defined. This certificate can be found here
https://sfgov.legistar.com/View.ashx?M=F&ID=13655933&GUID= E0C82847-9CA9-4368-8C71-30AAB4A0962E

Attachments: 1. Form of Revolving Credit Agreement (Wells Fargo)

2. Form of Fee Agreement (Wells Fargo)

Water Enterprise

4915-9517-4418.2

PUBLIC UTILITIES COMMISSION

City and County of San Francisco
RESOLUTION NO.: ___________
WHEREAS, On November 5, 2002, the voters of the City and County of San Francisco (the “City”) approved Proposition E (codified at Charter Section 8B.124, but hereinafter referred to as “Proposition E”), which among other things, authorized the Public Utili ties Commission of the City and County of San Francisco (the “Commission”) to issue revenue bonds, including notes, commercial paper or other forms of indebtedness, when authorized by ordinance approved by a two-thirds vote of the Board of Supervisors of the City and County of San Francisco (the “Board”), for the purpose of reconstructing, replacing, expanding, repairing or improving water facilities or clean water facilities or combinations of water and clean water facilities under the jurisdiction of the Commission (the “Water Enterprise”); and
WHEREAS, Pursuant to Section 43.5 of the San Francisco Administrative Code (“Article V”), enacted by Ordinance No. 203-98 adopted by the Board on June 8, 1998, and signed by the Mayor of the City and County of San Francisco (the “Mayor”) on June 19, 1998, as amended by Ordinance No. 270-06, adopted on October 24, 2006 by the Board and signed by the Mayor on October 31, 2006, the Board established a procedure pursuant to which the Commission may issue short-term indebtedness, including the issuance of commer cial paper and revolving indebtedness in anticipation of the issuance of its revenue bonds; and WHEREAS, Under Section 8B.124 of the Charter of the City and County of San Francisco (the “Charter”), the Board’s authority to authorize an issuance of debt under Proposition E is subject to the provision of certain certifications of an independent enginee r retained by the Commission and certain certifications of appropriate environmental review by the San Francisco Planning Department, which certifications shall make the findings and determinations set forth in Charter Section 8B.124 (together, the “Proposition E Certificates”); and WHEREAS, Pursuant to (i) Ordinance No. 174-20 adopted by the Board on September 29, 2020 and signed by the Mayor on October 1, 2020, (ii) Ordinance No. 112- 22, adopted by the Board on June 14, 2022 and signed by the Mayor on June 24, 2022, (iii) Ordinance No. 180 -23, adopted by the Board on July 25, 2023 and signed by the Mayor on July 28, 2023, and (iv) Ordinance No. 131-24 adopted by the Board on June 18, 2024 and signed by the Mayor on June 27, 2024, the Board has authorized the issuance from time to tim e of up to $1,887,552,493 of water revenue bonds and other forms of indebtedness of the Commission under Proposition E, and in the anticipation of the issuance of such indebtedness, has authorized the issuance of short - term indebtedness of the Commission; and
WHEREAS, The amount of authorized but unissued water revenue bonds under the ordinances set forth in the immediately preceding whereas clause is $1,696,974,012; and WHEREAS, The Board has previously approved pursuant to Resolution No. 300- 03, adopted by the Board on May 6, 2003, and signed by the Mayor on May 16, 2003, the establishment of a commercial paper program/interim funding program (the “Water Interim 2 4915-9517-4418.2
Funding Program”) for the Water Enterprise and the issuance of up to $250 million, at that time, in aggregate principal amount of Water Enterprise commercial paper notes and/or bank notes outstanding at any one time; and
WHEREAS, T he Board has previously approved pursuant to Ordinance No. 311- 08, adopted by the Board on December 16, 2008 and signed by the Mayor on December 19, 2008, an increase in the Water Interim Funding Program from an aggregate principal amount of $250 million to an aggregate principal amount of $500 million outstanding at any one time; and WHEREAS, Pursuant to Ordinance No. 269-24 (“Ordinance No. 269-24”), adopted by the Board on November 19, 2024 and signed by the Mayor on November 25, 2024, and Resolution No. 24-0193 (“Resolution No. 24 -0193”), adopted by this Commission on September 10, 2024, the Water Interim Funding Program was increased from an aggregate principal amount of $500 million to an aggregate principal amount of $750 million outstanding at any one time; and
WHEREAS, In order to support and/or maintain the Water Interim Funding Program, the Commission issued a request for bids from qualified banks to provide for one or more letters of credit, revolving credit facilities and/or revolving lines of credit and/or any other short -term borrowing facility which furthers the purpose and intent of the Water Interim Funding Program; and
WHEREAS, After an evaluation of the responses to such request for bids, the Commission staff determined that a new revolving line of credit in the not -to-exceed principal amount of $100 million offered by Wells Fargo Bank, National Association (or any subsidiary of Wells Fargo Bank, National Association, including without limitation, Wells Fargo Municipal Capital Strategies, LLC) ( collectively, “Wells”), which would permit the Commission to request loans directly from Wells in order to maintain the Water In terim Funding Program , was the most advantageous to the Commission, and was determined to be the lowest cost, responsive and responsible bidder to support and/or maintain the Water Interim Funding Program; and WHEREAS, The proposed form of the Revolving Credit Agreement, by and between the Commission and Wells (the “Wells Revolving Credit Agreement”) (which includes, as exhibits, among other exhibits, forms of the promissory notes to be made by the Commission to Wells, the “Wells Notes”), and a Fee and Interest Rate Agreement, by and between the Commission and Wells (the “Wells Fee Letter Agreement”), have been presented to the Commission and filed with the Secretary, and the Commission finds it in its best inter est to enter into and perform such agreements; and
WHEREAS, In addition to permitting the Commission to request loans directly from Wells in order to maintain the Water Interim Funding Program, the Wells Revolving Credit Agreement would also provide a distinct and separate new revolving line of credit in the not -to-exceed principal amount of $100 million offered by Wells (the “Power Revolving Line of Credit”), which would permit the Commission to request loans directly from Wells in order to maintain the Power Interim Funding Program (as defined and described in Ordinance No. 269-24 and Resolution No. 24-0193); and
3 4915-9517-4418.2
WHEREAS, The obligations of the Commission set forth in the Wells Revolving Credit Agreement and Wells Fee Letter Agreement relating to the Power Revolving Line of Credit are obligations of the Commission relating to the Power Enterprise and its Power Interim Funding Program only and will not be obligations of the Water Enterprise and its Water Interim Funding Program; and
WHEREAS, The Power Revolving Line of Credit being offered by Wells, as well as the documents relating thereto, will be approved by the Commission pursuant to a separate Commission action; and
WHEREAS, Pursuant to Ordinance No. 269-24, the Commission is authorized to take such actions and to execute and deliver such promissory notes, certificates, agreements, requests or other documents, as necessary or desirable to facilitate the issuance, sale and delivery of short - term indebtedness of the Water Interim Funding Program and to carry out the provisions of Ordinance No. 269- 24 to accomplish the purpose and intent of the Water Interim Funding Program; and
WHEREAS, The Commission has paid, beginning no earlier than 60 days prior to the adoption of this Resolution, and will pay, on and after the date hereof, certain expenditures (the “Expenditures” as defined in the Code referred to below) in connection with the acquisition, construction and/or equipping of the Water Enterprise capital improvement program projects; and WHEREAS, The Commission adopts this Resolution as official action of the Commission in order to comply with Treasury Regulation §1.150- 2 and any other regulations of the Internal Revenue Service (the “Code”) relating to the qualification for reimbursement of Commission Expenditures (as defined in the Code) incurred prior to the date of issue of any obligations under the Water Interim Funding Program; and

WHEREAS,
The Proposition E Certificates meeting the Proposition E requirements, including certification by the San Francisco Planning Department that projects to be funded through the Water Interim Funding Program either already comply with the California Environmental Quality Act (CEQA) requirements or will undergo CEQA review when they are defined, are on file with the Clerk of the Board in accordance with Proposition E prior to the issuance of any obligations under the Water Interim Funding Program; and

WHEREAS, The proposed action is an approval for credit facility agreements that provide interim funding for the Water Enterprise capital program, and this action does not constitute a “project” under the CEQA Guidelines section 15378(b)(4) because approval of the credit facility agreements is a government funding mechanism, which does not involve any commitment to a specific project that may result in a potentially significant physical change in the environment; now, therefore, be it
RESOLVED by the Public Utilities Commission of the City and County of San Francisco, as follows:
4 4915-9517-4418.2
Section 1. Approval of Bank Agreements. The forms of the Wells Revolving Credit Agreement (which includes, as exhibits, among other exhibits, the forms of the Wells Notes), and the related Wells Fee Letter Agreement (together, the “Bank Agreements”) , as it relates to the Water Enterprise and its Water Interim Funding Program, in substantially the forms submitted to this Commission, are hereby approved and recommended to the Director of the City’s Office of Public Finance (the “Director”) for approval pursuant to the Administrative Code, Article V thereof. The General Manager (or the duly authorized and acting General Manager) of the Commission (in either capacity, referred to herein as, the “General Manager”) or their designee, the Deputy Chief Financial Officer and the Capital Finance Director, are authorized and directed to execute and deliver the Bank Agreements in substantially said forms, subject to such additions thereto or changes therein which the General Manager, upon consultation with the City Attorney and Director, shall approve, such approval to be conclusively evidenced by the execution and delivery of such Bank Agreements, provided that the Bank Agreements may be extended for an additional term (as set forth in Section 2 below). The performance by the Commission of the terms of the Bank Agreements in their respective executed forms are also hereby approved.

Section 2. Extension of and Terms of Bank Agreements. The General Manager or their designee, the Deputy Chief Financial Officer and the Capital Finance Director, are further authorized, upon consultation with the City Attorney and the Director, to execute one or more amendments to the Bank Agreements, to extend the term of the Bank Agreements authorized hereunder, by an aggregate period not to exceed nine (9) years from the commencement date of its initial term. The annual undrawn facility fee payable by the Commission in connection with the Wells Revolving Credit Agreement and the relat ed Wells Fee Letter Agreement shall not exceed (i) $250,000, initially, and subject to adjustment as set forth in the related Wells Fee Letter Agreement, and (ii) $500,000 in connection with any future extension thereof. The outstanding principal amount of each Loan (as defined in the Bank Agreements) shall bear interest at the applicable interest rates set forth in the Bank Agreements (subject to the limitation s set forth in Section 3 below).

Section 3. Limitations. In no event shall the commercial paper notes or draws made under the Water Interim Funding Program exceed $750 million in aggregate principal amount and in no event shall the interest rate or interest rates cause the aggregate average stated interest cost to exceed 12% per annum; provided, however, that if the City or the Board increases the maximum interest rate allowable under any bank agreement (as it relates to the obligations payable thereunder), then such increased rate shall be the permitted maximum interest rate (as it relates to the obligations payable under bank agreements).

Section 4. Intent to Reimburse. This Commission hereby declares the official intent of the Commission to reimburse the Commission with proceeds of the draws made under the Bank Agreements with respect to the Water Enterprise capital improvement projects made on and after a date that is no more than 60 days prior to the adoption of this Resolution. The Commission reasonably expects on the date hereof that it will reimburse the Expenditures with proceeds of the draws made under the Bank Agreements. Each such Expenditure was and will be either (A) of a type properly chargeable to a capital account under general federal income tax principles (determined in each case as of the date of the Expenditure), (B) a cost of issuance with respect to the draws made under the Bank Agreements , (C) a nonrecurring item that is not customarily payable from current revenues, or (D) a grant to pay a party that is not related to or an agent of the 5 4915-9517-4418.2
issuer so long as such grant does not impose any obligation or condition (directly or indirectly) to repay any amount to or for the benefit of the Commission The Commission will make a reimbursement allocation, which is a written allocation that evidences the Commission’s use of proceeds of the draws made under the Bank Agreements to reimburse an Expenditure, no later than 18 months after the later of the date on which the Expenditure is paid or the component of the capital improvement projects is placed in service or abandoned, but in no event more than three years after the date on which the Expenditure is paid. The Commission recognizes that exceptions are available for certain “preliminary expenditures,” costs of issuance, certain de minimis amounts, expenditures by “ small issuers” (based on the year of issuance and not the year of expenditure) and expenditures for construction projects of at least 5 years.

Section 5. Further Actions. The General Manager or their designee, the Deputy Chief Financial Officer and the Capital Finance Director, and in consultation with the City Attorney and the Director, are each hereby authorized and directed to execute such other agreements, certifications or documents and to take any and all necessary action in connection with and in furtherance of the execution and performance of the Bank Agreements under the Water Interim Funding Program.

Section 6. Delegation. The General Manager is authorized to delegate any of the responsibilities or duties set forth in this resolution to the Assistant General Manager, Business Services and Chief Financial Officer of the Commission.

Section 7. SB 450 Compliance. The Public Utilities Commission acknowledges that the good faith estimates required by Section 5852.1 of the California Government Code are disclosed in the staff report and are available to the public at the meeting at which this resolution is approved.

Section 8. Ratification. All actions heretofore taken by the officials, employees and agents of the Commission with respect to the execution of the Bank Agreements in connection with providing short -term interim funding of the Water Enterprise capital improvement program, including the Water Interim Funding Program, are hereby approved, confirmed and ratified.

Section 9. Effective Date. This resolution shall take effect from and after its adoption.

I hereby certify that the foregoing resolution was adopted by the San Francisco Public Utilities Commission at its meeting on February 25, 2025.

Director of Commission Affairs
San Francisco Public Utilities Commission

Power Enterprise

4932-2177-7938.2

PUBLIC UTILITIES COMMISSION

City and County of San Francisco
RESOLUTION NO.: ___________
WHEREAS, On June 5, 2018, the voters of the City and County of San Francisco (the “City”) approved Proposition A (“Proposition A”), which among other things, amended Section 8B.124 of the Charter of the City and County of San Francisco (the “Charter”) to authorize the Public Utilities Commission of the City and County of San Francisco (the “Commission”) to issue indebtedness, including revenue bonds, notes, commercial paper or other forms of indebtedness, when authorized by ordinance approved by a two- thirds vote of the Board of Supervisors of the City and County of San Francisco (the “Board”) , for the purpose of reconstructing, replacing, expanding, repairing or improving power facilities under the jurisdiction of the Commission (the “Power Enterprise”), or for any other lawful purpose of the power facilities of the City in furtherance of the purposes specified in Charter Section 8B.124, provided that the Commission is prohibited from financing the construction of power plants that generate electricity using fossil fuels or nuclear energy under Proposition A; and WHEREAS, Pursuant to Section 43.5 of the San Francisco Administrative Code (“Article V”), enacted by Ordinance No. 203-98 adopted by the Board on June 8, 1998, and signed by the Mayor of the City and County of San Francisco (the “Mayor”) on June 19, 1998, as amended by Ordinance No. 270-06, adopted on October 24, 2006 by the Board and signed by the Mayor on October 31, 2006, the Board established a procedure pursuant to which the Commission may issue short-term indebtedness, including the issuance of commer cial paper and revolving indebtedness in anticipation of the issuance of its revenue bonds; and WHEREAS, Under Section 8B.124 of the Charter, the Board’s authority to authorize an issuance of debt under Proposition A is subject to the provision of certain certifications of an independent engineer retained by Commission and certain certifications of appropriate environmental review by the San Francisco Planning Department, which certifications shall make the findings and determinations set forth in Charter Section 8B.124 (together, the “Proposition A Certificates”); and
WHEREAS, Pursuant to (i) Ordinance No. 142-18 adopted by the Board on June 12, 2018 and signed by the Mayor on June 20, 2018, (ii) Ordinance No. 152- 19 adopted by the Board on June 25, 2019 and signed by the Mayor on June 28, 2019, (iii) Ordinance No. 127- 21 adopted by the Board on July 27, 2021 and signed by the Mayor on August 4, 2021, (iv) Ordinance No. 109- 22 adopted by the Board on June 14, 2022 and signed by the Mayor on June 24, 2022, (v) Ordinance No. 182-23 adopted by the Board on July 25, 2023 and signed by the Mayor on July 28, 2023, and (vi) Ordinance No. 126 -24 adopted by the Board on June 11, 2024 and signed by the Mayor on June 21, 2024, the Board has authorized the issuance from time to time of up to $836,960,525 of power revenue bonds and other forms of indebtedness of the Commission under Proposition A and Sections 9.107(6) and 9.107(8) of the Charter, and in the anticipation of the issuance of such indebtedness, has authorized the issuance of short -term indebtedness of the Commission; and
2 4932-2177-7938.2
WHEREAS, The amount of authorized but unissued power revenue bonds under the ordinances set forth in the immediately preceding whereas clause is $742,330,456; and WHEREAS, The Board has previously approved pursuant to Resolution No. 427- 15, adopted by the Board on November 17, 2015, and signed by the Mayor on November 25, 2015, the establishment of a commercial paper program/interim funding program (the “Power Interim Funding Program”) for the Power Enterprise and the issuance of up to $90 million, at that time, in aggregate principal amount of Power Enterprise commercial paper notes outstanding at any one time; and
WHEREAS, The Board has previously approved pursuant to Ordinance No. 2-19, adopted by the Board on January 15, 2019, and signed by the Mayor on January 18, 2019, an increase in the Power Interim Funding Program from an aggregate principal amount of $90 million to an aggregate principal amount of $250 million of commercial paper notes outstanding at any one time; and
WHEREAS, Pursuant to Ordinance No. 269-24 (“Ordinance No. 269-24”), adopted by the Board on November 19, 2024 and signed by the Mayor on November 25, 2024, and Resolution No. 24-0193 (“Resolution No. 24 -0193”), adopted by this Commission on September 10, 2024, the Power Interim Funding Program was increased from an aggregate principal amount of $250 million to an aggregate principal amount of $450 million outstanding at any one time; and
WHEREAS, In order to support and/or maintain the Power Interim Funding Program, the Commission issued a request for bids from qualified banks to provide for one or more letters of credit, revolving credit facilities and/or revolving lines of credit and/or any other short -term borrowing facility which furthers the purpose and intent of the Power Interim Funding Program; and
WHEREAS, After an evaluation of the responses to such request for bids, the Commission staff determined that a new revolving line of credit in the not -to-exceed principal amount of $100 million offered by Wells Fargo Bank, National Association (or any subsidiary of Wells Fargo Bank, National Association, including without limitation, Wells Fargo Municipal Capital Strategies, LLC) (collectively, “Wells”), which would permit the Commission to request loans directly from Wells in order to maintain the Power Interim Funding Program , was the most advantageous to the Commission, and was determined to be the lowest cost, r esponsive and responsible bidder to support and/or maintain the Power Interim Funding Program; and WHEREAS, The proposed form of the Revolving Credit Agreement, by and between the Commission and Wells (the “Wells Revolving Credit Agreement”) (which includes, as exhibits, among other exhibits, forms of the promissory notes to be made by the Commission to Wells, the “Wells Notes”), and a Fee and Interest Rate Agreement, by and between the Commission and Wells (the “Wells Fee Letter Agreement”), have been presented to the Commission and filed with the Secretary, and the Commission finds it in its best inter est to enter into and perform such agreements; and
3 4932-2177-7938.2
WHEREAS, In addition to permitting the Commission to request loans directly from Wells in order to maintain the Power Interim Funding Program, the Wells Revolving Credit Agreement would also provide a distinct and separate new revolving line of credit in the not -to-exceed principal amount of $100 million offered by Wells (the “Water Revolving Line of Credit”), which would permit the Commission to request loans directly from Wells in order to maintain the Water Interim Funding Program (as defined and described in Ordinance No. 269-24 and Resolution No. 24-0193); and
WHEREAS, The obligations of the Commission set forth in the Wells Revolving Credit Agreement and Wells Fee Letter Agreement relating to the Water Revolving Line of Credit are obligations of the Commission relating to the Water Enterprise and its Water Interim Funding Program only and will not be obligations of the Power Enterprise and its Power Interim Funding Program; and
WHEREAS, The Water Revolving Line of Credit being offered by Wells, as well as the documents relating thereto, will be approved by the Commission pursuant to a separate Commission action; and
WHEREAS, Pursuant to Ordinance No. 269-24, the Commission is authorized to take such actions and to execute and deliver such promissory notes, certificates, agreements, requests or other documents, as necessary or desirable to facilitate the issuance, sale and delivery of short - term indebtedness of the Power Interim Funding Program and to carry out the provisions of Ordinance No. 269- 24 to accomplish the purpose and intent of the Power Interim Funding Program; and
WHEREAS, The Commission has paid, beginning no earlier than 60 days prior to the adoption of this Resolution, and will pay, on and after the date hereof, certain expenditures (the “Expenditures” as defined in the Code referred to below) in connection with the acquisition, construction and/or equipping of the Power Enterprise capital improvement program projects; and WHEREAS, The Commission adopts this Resolution as official action of the Commission in order to comply with Treasury Regulation §1.150- 2 and any other regulations of the Internal Revenue Service (the “Code”) relating to the qualification for reimbursement of Commission Expenditures (as defined in the Code) incurred prior to the date of issue of any obligations under the Power Interim Funding Program; and
WHEREAS, The Proposition A Certificates meeting the Proposition A requirements, including certification by the San Francisco Planning Department that projects to be funded through the Power Interim Funding Program either already comply with the California Environmental Quality Act (CEQA) requirements or will undergo CEQA review when they are defined, are on file with the Clerk of the Board in accordance with Proposition A prior to the issuance of any obligations under the Power Interim Funding Program; and

WHEREAS, The proposed action is an approval for credit facility agreements that provide interim funding for the Power Enterprise capital program, and this action does not constitute a “project” under the CEQA Guidelines section 15378(b)(4) because approval of the credit facility 4 4932-2177-7938.2
agreements is a government funding mechanism, which does not involve any commitment to a specific project that may result in a potentially significant physical change in the environment; now, therefore, be it
RESOLVED by the Public Utilities Commission of the City and County of San Francisco, as follows:

Section 1. Approval of Bank Agreements. The forms of the Wells Revolving Credit Agreement (which includes, as exhibits, among other exhibits, the forms of the Wells Notes), and the related Wells Fee Letter Agreement (together, the “Bank Agreements”) , as it relates to the Power Enterprise and its Power Interim Funding Program, in substantially the forms submitted to this Commission, are hereby approved and recommended to the Director of the City’s Office of Public Finance (the “Director”) for approval pursuant to the Administrative Code, Article V thereof. The General Manager (or the duly authorized and acting General Manager) of the Commission (in either capacity, referred to herein as, the “General Manager”) or their designee, the Deputy Chief Financial Officer an d the Capital Finance Director, are authorized and directed to execute and deliver the Bank Agreements in substantially said forms, subject to such additions thereto or changes therein which the General Manager, upon consultation with the City Attorney and Director, shall approve, such approval to be conclusively evidenced by the execution and delivery of such Bank Agreements, provided that the Bank Agreements may be extended for an additional term (as set forth in Section 2 below). The performance by the Commission of the terms of the Bank Agreements in their respective executed forms are also hereby approved.

Section 3. Limitations. In no event shall the commercial paper notes or draws made under the Power Interim Funding Program exceed $450 million in aggregate principal amount and in no event shall the interest rate or interest rates cause the aggregate average stated interest cost to exceed 12% per annum; provided, however, that if the City or the Board increases the maximum interest rate allowable under any bank agreement (as it relates to the obligations payable thereunder), then such increased rate shall be the permitted maximum interest rate (as it relates to the obligations payable under bank agreements).

Section 4. Intent to Reimburse. This Commission hereby declares the official intent of the Commission to reimburse the Commission with proceeds of the draws made under the Bank Agreements with respect to the Power Enterprise capital improvement projects made on and after 5 4932-2177-7938.2
a date that is no more than 60 days prior to the adoption of this Resolution. The Commission reasonably expects on the date hereof that it will reimburse the Expenditures with proceeds of the draws made under the Bank Agreements. Each such Expenditure was and will be either (A) of a type properly chargeable to a capital account under general federal income tax principles (determined in each case as of the date of the Expenditure), (B) a cost of issuance with respect to the draws made under the Bank Agreem ents, (C) a nonrecurring item that is not customarily payable from current revenues, or (D) a grant to pay a party that is not related to or an agent of the issuer so long as such grant does not impose any obligation or condition (directly or indirectly) to repay any amount to or for the benefit of the Commission The Commission will make a reimbursement allocation, which is a written allocation that evidences the Commission ’s use of proceeds of the draws made under the Bank Agreements to reimburse an Expenditure, no later than 18 months after the later of the date on which the Expenditure is paid or the component of the capital improvement projects is placed in service or abandoned, but in no event more than three years after the date on which the Expenditure is paid. The Commission recognizes that exceptions are available for certain “preliminary expenditures,” costs of issuance, certain de minimis amounts, expenditures by “ small issuers” (based on the year of issuance and not the year of expenditure) and expenditures for construction projects of at least 5 years.

Section 8. Ratification. All actions heretofore taken by the officials, employees and agents of the Commission with respect to the execution of the Bank Agreements in connection with providing short -term interim funding of the Power Enterprise capital improvement program, including the Power Interim Funding Program, are hereby approved, confirmed and ratified.

6 4932-2177-7938.2

Section 9. Effective Date. This resolution shall take effect from and after its adoption.

I hereby certify that the foregoing resolution was adopted by the San Francisco Public Utilities Commission at its meeting on February 25, 2025.

Director of Commission Affairs
San Francisco Public Utilities Commission

CHAPMAN DRAFT
JANUARY 31, 2025
1305518698-1__revolving_credit_agreement__sfpuc_water___power___wells_fargo___15_ 4457552

EVOLVING CREDIT AGREEMENT
Dated as of February [__], 2025
between

PUBLIC UTILITIES COMMISSION OF

THE CITY AND COUNTY OF SAN FRANCISCO

and

WELLS FARGO BANK, NATIONAL ASSOCIATION

relating to:

$200,000,000 in Revolving Obligations, consisting of:

Not to Exceed $100,000,000
Public Utilities Commission
of the City and County of San Francisco
Revolving Obligations (Power Series, Proposition A)
Series R-1

and

Not to Exceed $100,000,000
Public Utilities Commission
of the City and County of San Francisco
Revolving Obligations (Water Series, Proposition E)
Series R-2

-i-

TABLE OF CONTENTS
PAGE
ARTICLE ONE DEFINITIONS .................................................................................................1 Section 1.1. Definitions..............................................................................................1 Section 1.2. Interpretations ......................................................................................21 Section 1.3. Accounting Terms ................................................................................21 Section 1.4. Rates .....................................................................................................21 Section 1.5. Water Obligations only of the Water System; Power Obligations only of the Power System ............................................................................22 ARTICLE TWO THE CREDIT ................................................................................................22 Section 2.1. Commitment to Lend ...........................................................................22 Section 2.2. Method of Borrowing, Continuing or Converting Loans; Account to Which Proceeds of Loans to Be Credited ............................................23 Section 2.3. The Notes .............................................................................................24 Section 2.4. Maturity of Loans and Term Loans .....................................................26 Section 2.5. Interest Rates ........................................................................................26 Section 2.6. Fees ......................................................................................................27 Section 2.7. Optional Termination or Reduction of Commitment...........................28 Section 2.8. Mandatory Termination or Reduction of Commitment .......................28 Section 2.9. Optional Prepayments ..........................................................................28 Section 2.10. General Provisions as to Payments ......................................................29 Section 2.11. Computation of Interest and Fees ........................................................29 Section 2.12. The Term Loans ...................................................................................29 Section 2.13. Determination of Taxability .................................................................30 Section 2.14. Inability to Determine Interest Rates; Illegality...................................31 Section 2.15. Taxes ....................................................................................................32 Section 2.16. Increased Costs; Capital or Liquidity Requirements ...........................33 Section 2.17. Margin Regulations ..............................................................................35 Section 2.18. Security of Obligations ........................................................................35 ARTICLE THREE CONDITIONS PRECEDENT ............................................................................35 Section 3.1. Conditions Precedent to Effectiveness.................................................35 Section 3.2. No Note Rating; DTC; Offering Document.........................................38 Section 3.3. Borrowings During the Revolving Credit Period ................................38 Section 3.4. Each Tax-Exempt Loan Borrowing .....................................................39 ARTICLE FOUR REPRESENTATIONS AND WARRANTIES ........................................................39 Section 4.1. Organization, Powers, Etc. ...................................................................39 Section 4.2. Authorization, Absence of Conflicts, Etc. ...........................................40 Section 4.3. Binding Obligations; Security for Bank Note ......................................40 Section 4.4. Governmental Consent or Approval ....................................................41 -ii-

Section 4.5. Absence of Material Litigation ............................................................41 Section 4.6. Financial Condition ..............................................................................41 Section 4.7. Incorporation of Representations and Warranties................................41 Section 4.8. Accuracy and Completeness of Information ........................................42 Section 4.9. No Default ............................................................................................42 Section 4.10. No Proposed Legal Changes ................................................................42 Section 4.11. Compliance with Laws, Etc. ................................................................42 Section 4.12. Environmental Matters.........................................................................43 Section 4.13. Tax Status of Interest on Tax-Exempt Notes .......................................43 Section 4.14. Regulation U ........................................................................................43 Section 4.15. Liens .....................................................................................................43 Section 4.16. Sovereign Immunity.............................................................................43 Section 4.17. City Business Days ..............................................................................44 Section 4.18. Usury ....................................................................................................44 Section 4.19. Insurance ..............................................................................................44 Section 4.20. ERISA ..................................................................................................44 Section 4.21. Sanctions Concerns and Anti-Corruption Laws ..................................44 Section 4.22. Swap Contracts ....................................................................................44 ARTICLE FIVE COVENANTS ................................................................................................45 Section 5.1. Affirmative Covenants .........................................................................45 Section 5.2. Negative Covenants .............................................................................57 ARTICLE SIX DEFAULTS ...................................................................................................65 Section 6.1. Events of Default Relating to the Water System .................................65 Section 6.2. Remedies Relating to Water System ....................................................68 Section 6.3. Events of Default Relating to the Power System .................................69 Section 6.4. Remedies Relating to Power System ...................................................71 ARTICLE SEVEN MISCELLANEOUS ........................................................................................72 Section 7.1. Amendments, Waivers, Etc. .................................................................72 Section 7.2. Notices .................................................................................................72 Section 7.3. Survival of Covenants; Successors and Assigns ..................................73 Section 7.4. Unconditional Obligations ...................................................................75 Section 7.5. Liability of Bank; Indemnification ......................................................75 Section 7.6. Expenses ..............................................................................................76 Section 7.7. No Waiver; Conflict. ............................................................................76 Section 7.8. Modification, Amendment, Waiver, Etc. .............................................77 Section 7.9. Dealing with the Commission ..............................................................77 Section 7.10. Severability ..........................................................................................77 Section 7.11. Counterparts .........................................................................................77 Section 7.12. Table of Contents; Headings ................................................................77 Section 7.13. Entire Agreement .................................................................................77 Section 7.14. Governing Law; Consent to Jurisdiction and Venue; Waiver of Jury Trial ......................................................................................................77 -iii-

Section 7.15. Governmental Regulations...................................................................78 Section 7.16. USA PATRIOT Act .............................................................................78 Section 7.17. Electronic Transmissions .....................................................................79 Section 7.18. Assignment to Federal Reserve Bank ..................................................79 Section 7.19. City Requirements ...............................................................................80 Section 7.20. No Advisory or Fiduciary Responsibility ............................................80 Section 7.21. Redaction .............................................................................................80 Section 7.22. Acknowledgement Regarding any Supported QFCs ...........................80

XHIBIT A FORM OF NOTICE OF BORROWING

EXHIBIT B FORM OF NOTICE OF CONVERSION

EXHIBIT C FORM OF COMPLIANCE CERTIFICATE
EXHIBIT D 2025 LIST OF CITY HOLIDAYS

EXHIBIT E CITY REQUIREMENTS

EXHIBIT F FORM OF POWER SYSTEM TAXABLE NOTE

EXHIBIT G FORM OF WATER SYSTEM TAXABLE NOTE

EXHIBIT H FORM OF POWER SYSTEM TAX-EXEMPT NOTE

EXHIBIT I FORM OF WATER SYSTEM TAX-EXEMPT NOTE

EXHIBIT J FORM OF POWER SYSTEM TAXABLE TERM NOTE

EXHIBIT K FORM OF WATER SYSTEM TAXABLE TERM NOTE

EXHIBIT L FORM OF POWER SYSTEM TAX-EXEMPT TERM NOTE

EXHIBIT M FORM OF WATER SYSTEM TAX-EXEMPT TERM NOTE

EXHIBIT N FORM OF REQUEST FOR EXTENDED FUNDED PERIOD

REVOLVING CREDIT AGREEMENT
This REVOLVING CREDIT AGREEMENT dated as of February [__], 2025 (together with any amendments or supplements hereto, this “ Agreement”), is between the P UBLIC UTILITIES COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO (together with its successors and assigns, the “Commission”) and WELLS FARGO BANK, NATIONAL ASSOCIATION (together with its successors and assigns, the “Bank”).

WITNESSETH:

WHEREAS, the Commission wishes to obtain two separate revolving lines of credit (each individually a “Line of Credit” and collectively, the “Lines of Credit”) from the Bank hereunder for the several benefit of the Water Enterprise and the Power Enterprise, respectively, and the Bank is willing, upon the terms and subject to the conditions set forth below, to provide each such Line of Credit, to the Water Enterprise and Power Enterprise, respectively, of the Commission; and WHEREAS, the Commission is authorized to enter into the Lines of Credit pursuant to the Water Resolution and Power Resolution, as applicable;
WHEREAS, all of the respective obligations of the Commission to repay the Bank for the respective extension of credit made by the Bank under each respective Line of Credit hereunder and to pay all other respective amounts payable to the Bank arising under or pursuant to this Agreement (as it relates to the Water System and Power System, separately), or applicable promissory note to be issued to the Bank hereunder are created under and will be evidenced by this Agreement (as it relates to the Water System and Power System, separately), and such promissory notes and will be secured by a pledge of and lien on the Available Water Enterprise Revenues and Available Power Enterprise Revenues (each as defined herein), as applicable, all in accordance with the terms and conditions hereof.

NOW, THEREFORE, in consideration of the mutual promises contained herein and other valuable consideration, the sufficiency of which are hereby acknowledged, the Commission and the Bank hereby agree as follows:

ARTICLE ONE

DEFINITIONS
Section 1.1. Definitions. As used in this Agreement:
“Affiliate” means, with respect to any Person, any Person that directly or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, such first Person. A Person shall be deemed to control another Person for the purposes of this definition if such first Person possesses, directly or indirectly, the power to direct, or cause the direction of, the management and policies of the second Person, whether through the ownership of voting securities, common directors, trustees or officers, by contract or otherwise. -2-
“Agreement” has the meaning set forth in the introductory paragraph hereof. “Alternate Facility” means another credit or liquidity facility enabling the Commission to borrow, on the terms and conditions to the Commission no less favorable than the terms of this Agreement, an amount equal to the principal amount of the Notes, which may be outstanding under this Agreement.
“Amendment Effective Date” means the date the Proposed Amendments become effective pursuant to Section 187.01 of the Forty-Third Supplemental Indenture. “Annual Budget ” means the budget or budgets prepared by the Commission in substantially the form that has been previously presented to the Bank. “Anti-Corruption Laws” means all laws, rules, and regulations of any jurisdiction from time to time concerning or relating to bribery or corruption, including the United States Foreign Corrupt Practices Act of 1977 and the rules and regulations thereunder and the U.K. Bribery A ct 2010 and the rules and regulations thereunder.
“Anti-Money Laundering Laws” means any and all laws, statutes, regulations or obligatory government orders, decrees, ordinances or rules related to terrorism financing, money laundering, any predicate crime to money laundering or any financial record keeping, including any applicable provision of the PATRIOT Act and The Currency and Foreign Transactions Reporting Act (also known as the “Bank Secrecy Act,” 31 U.S.C. §§ 5311- 5330 and 12 U.S.C. §§ 1818(s), 1820(b) and 1951-1959).
“Applicable Factor for Tax-exempt Loans” means eighty percent (80%). “Applicable Law” means (i) all applicable common law and principles of equity and (ii) all applicable provisions of all (A) constitutions, statutes, rules, regulations and orders of all governmental and non -governmental bodies, (B) Governmental Approvals and (C) orders, decisions, judgments and decrees of all courts (whether at law or in equity) and arbitrators. “Authorized Representative ” means each of the General Manager of the Commission, Assistant General Manager, Business Services and Chief Financial Officer of the Commission, Deputy Chief Financial Officer of the Commission, and Debt Manager of the Commission, Utility Specialist, Fina ncial Planning of the Commission, Controller of the City and County of San Francisco, Director of Finance of the City and County of San Francisco, and any other individual designated from time to time as a “Designated Representative” in a certificate executed by the General Manager of the Commission delivered to the Bank. In each case, any such officer referred to in this definition shall include any individual acting in such position on an interim basis in accordance with the Charter or applicable State law. “Available Power Enterprise Revenues” means all of the moneys in the Power Revenue Fund (comprised primarily of Power Net Revenues and earnings thereon) remaining after the payments required by Subsections 5.5(c) through (e) of the Power Bonds Indenture, and all other -3-
amounts payable on a parity with amounts paid under Section 5.5(f) of the Power Bonds Indenture pursuant to the terms thereof.
“Available Water Enterprise Revenues ” means all of the moneys in the Water Revenue Fund (comprised primarily of Water Enterprise Revenues , and earnings thereon) remaining after (i) the payments required by Subsections 5.01(b)(1), (2), (3) and (4) and Subsections 5.02(a), (b) and (c), but prior to the transfers required by Subsections 5.01(b)(5) and Subsection 5.01(b)(6) of the Water Bonds Indenture and (ii ) all amounts required to be paid under any other indenture or resolution of the Commission for principal, interest, reserve fund and any other debt service requirements on other Senior Water Bonds and Subordinated Water Bonds of the Commission as the same become due and payable.
“Bank” has the meaning set forth in the introductory paragraph hereof. “Bank Agreement ” means any credit agreement, liquidity agreement, standby bond purchase agreement, reimbursement agreement , direct purchase agreement, bond purchase agreement, loan agreement, other agreements under which loans are made, or any other agreement or instrument (or any amendment, supplement or other modification thereof) under which, directly or indirectly, any Person or Persons undertake(s) to extend credit or make or provide funds to make payment of, or to purchase or provide credit enhancement for bonds or notes of the Commission secured by or payable from Water Enterprise Revenues or Power Enterprise Revenues, as applicable.
“Base Rate” means, for any day, a fluctuating rate of interest per annum equal to the greatest of (i) the Prime Rate in effect at such time plus one percent (1.0%), (ii) the Federal Funds Rate in effect at such time plus two percent (2.%) and (iii) seven percent (7.0%). “Basic Documents” means the Water Basic Documents or Power Basic Documents , as applicable.
“Benchmark” means, initially, Daily Simple SOFR; provided, however , that if a Benchmark Transition Event has occurred with respect to Daily Simple SOFR or the then-current Benchmark, then “Benchmark” means the applicable Benchmark Replacement to the extent that such Benchmark Replacement has become effective pursuant to the provisions of this Agreement. “Benchmark Administrator” means, initially, the SOFR Administrator, or any successor administrator of the then-current Benchmark or any insolvency or resolution official with authority over such administrator.
“Benchmark Floor” means zero percent (0.00%).
“Benchmark Replacement” means the sum of: (A) the alternate rate of interest that has been selected by the Bank as the replacement for the then-current Benchmark; and (B) the spread adjustment, or method for calculating or determining such spread adjustment, (which may be a positive or negative value or zero) that has been selected by the Bank, in each case, giving due consideration to (x) any selection or recommendation by the Relevant Governmental Body at such -4-
time for a replacement rate, the mechanism for determining such a rate, the methodology or conventions applicable to such rate, or the spread adjustment, or method for calculating or determining such spread adjustment, for such rate, or (y) any evolving or then-prevailing market convention for determining a rate of interest as a replacement to the then -current Benchmark, the methodology or conventions applicable to such rate, or the spread adjustment, or method for calculating or determining such spread adj ustment, for such alternate rate for U.S. dollar - denominated syndicated or bilateral credit facilities at such time; provided, however, that if the Benchmark Replacement as determined as provided above would be less than the Benchmark Floor, then Benchmark Replacement shall be deemed to be the Benchmark Floor, subject to any other applicable floor rate provision.
“Benchmark Replacement Conforming Changes” means any technical, administrative or operational changes (including, without limitation, changes to the definition of “U.S. Government Securities Business Day,” the timing and frequency of determining rates and making payments of interest, prepayment provisions and other technical, administrative or operational matters) that the Bank decides may be appropriate to reflect the adoption and implementation of a Benchmark Replacement and to permit the administration thereof by the Bank. “Benchmark Replacement Date” means the date specified by the Bank in a notice to the Commission following a Benchmark Transition Event.
“Benchmark Transition Event” means the occurrence of one or more of the following events with respect to the then -current Benchmark: a public statement or publication of information by or on behalf of the Benchmark Administrator or a regulatory supervisor for the Benchmark Administrator announcing that (A) the Benchmark Administrator has ceased or will cease to provide the Benchmark permanently or indefinitely or (B) the Benchmark is no longer, or as of a specified future date will no longer be, representative of underlying markets. “Board” means the Board of Supervisors of the City.
“Borrowing” means a borrowing hereunder consisting of a Loan to be made to the Commission by the Bank pursuant to Article II hereof.
“Business Day” means a day which is not (a) a Saturday, Sunday or legal holiday on which banking institutions in San Francisco , California or New York, New York are authorized by law to close, (b) a day on which the New York Stock Exchange or the Federal Reserve Bank is closed or (c) a day on which the principal offices of the Bank is closed. “Change in Law” means the occurrence, after the Closing Date, of any of the following:
(a) the adoption or taking effect of any Law, including, without limitation any Risk-Based Capital Guidelines, (b) any change in any Law or in the administration, interpretation, implementation or application thereof by any Governmental Authority or (c) the making or issuance of any request, rule, ruling, guideline, regulation or directive (whether or not having the force of law) by any Governmental Authority; provided that, notwithstanding anything herein to the contrary, (i) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, rulings, guidelines, regulations or directives thereunder or issued in connection therewith and (ii) all -5-
requests, rules, rulings, guidelines, regulations or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities , in each case pursuant to Basel III or any successor Basel accord , shall in each case be deemed to be a “Change in Law,” regardless of the date enacted, adopted or issued.
“Charter” means the Charter of the City and County of San Francisco, as amended and supplemented from time to time, and any new or successor Charter. “City” means the City and County of San Francisco.
“Closing Date” means February [__], 2025, subject to the satisfaction or waiver by the Bank of all of the conditions precedent set forth in Article Four hereof. “Code” means the Internal Revenue Code of 1986, as amended from time to time, including regulations, rulings and judicial decisions promulgated thereunder. “Commission” has the meaning set forth in the introductory paragraph hereof, and includes any successor or assign permitted hereby.
“Commitment” means the Water Commitment or the Power Commitment, as applicable. “Daily Simple SOFR” means, for any day (a “ SOFR Rate Day”), a rate per annum equal to the greater of (a) SOFR for the day (such day, a “ SOFR Determination Day ”) that is five (5) U.S. Government Securities Business Days prior to (A) if such SOFR Rate Day is a U.S.

Government Securities Business Day, such SOFR Rate Day or (B) if such SOFR Rate Day is not a U.S. Government Securities Business Day, the U.S. Government Securi ties Business Day immediately preceding such SOFR Rate Day, in each case, as such SOFR i s published by the SOFR Administrator on the SOFR Administrator’s Website; provided that if by 5:00 p.m. on the second (2 nd) U.S. Government Securities Business Day immediately following any SOFR Determination Day, SOFR in respect of such SOFR Determination Day has not been published on the SOFR Administrator’s Website and a Benchmark Replacement Date with respect to Daily Simple SOFR has not occurred, then SOFR for such SOFR Determination Day will be SOFR as published in respect of the first preceding U.S. Government Securities Business Day for which such SOFR was published on the SOFR Administrator’s Website; provided further that SOFR as determined pursuant to this proviso shall be utilized for purposes of calculation of Daily Simple SOFR for no more than three (3) consecutive SOFR Rate Days and (b) the Floor. Any change in Daily Simple SOFR due to a change in SOFR shall be effective from and including the effective date of such change in SOFR without notice to the Commission. “Daily SOFR Applicable Spread for Taxable Loans” means either the Water Daily SOFR Applicable Spread for Taxable Loans or the Power Daily SOFR Applicable Spread for Taxable Loans, as applicable.
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“Daily SOFR Applicable Spread for Tax -exempt Loans” means either the Water Daily SOFR Applicable Spread for Tax-Exempt Loans or the Power Daily SOFR Applicable Spread for Tax-Exempt Loans, as applicable.
“Debt” of any Person means at any date, without duplication, (a) all obligations of such Person for borrowed money, (b) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments, (c) all obligations of such Person to pay the deferred purchase price of property or services, except trade accounts payable arising in the ordinary course of business, (d) all obligations of such Person as lessee under capital leases or finance leases, (e) all Debt of others secured by a lien on any asset of such Person, whether or not such Debt is assumed by such Person, (f) all Guarantees by such Person of Debt of other Persons, (g) all obligations of such Person under any Swap Contract, and (h) all obligations of such Person to reimburse or repay any bank or other Person in respect of amounts paid or advanced under a letter of credit, credit agreement, liquidity facility or other instrument.
“Default” means any event or condition which, with notice, the passage of time or any combination of the foregoing, would constitute an Event of Default. “Default Rate” means, for any day, and with respect to any Note, Loan, Term Loan or Obligation, a rate of interest per annum equal to the Base Rate on such day plus three percent (3.00%).
“Determination of Taxability” means and shall be deemed to have occurred on the first to occur of the following:
(i) on the date on which the Commission files any statement, supplemental statement or other tax schedule, return or document which discloses that an Event of Taxability shall have in fact occurred;
(ii) the date on which the Bank or any Noteholder or former Noteholder notifies the Commission that it has received a written opinion by a nationally recognized firm of attorneys of substantial expertise on the subject of tax- exempt municipal finance to t he effect that an Event of Taxability shall have occurred unless, within one hundred eighty (180) days after receipt by the Commission of such notification from the Bank or such Noteholder or any former Noteholder, the Commission shall deliver to the Bank, the Noteholder and any former Noteholder a ruling or determination letter issued to or on behalf of the Commission by the Commissioner of the Internal Revenue Service or the Director of Tax-Exempt Bonds of the Tax- Exempt and Government Entities Division of the Internal Revenue Service (or any other government official exercising the same or a substantially similar function from time to time) or a written opinion of its Note Counsel to the effect that, after taking into consideration such facts as form the basis for the opinion that an Event of Taxability has occurred, an Event of Taxability shall not have occurred; (iii) the date on which the Commission shall be advised in writing by the Commissioner of the Internal Revenue Service or the Director of Tax -Exempt Bonds of the Tax-Exempt and Government Entities Division of the Internal Revenue Service (or any -7-
other government official exercising the same or a substantially similar function from time to time, including an employee subordinate to one of these officers who has been authorized to provide such advice) that, based upon filings of the Commission, or upon any review or audit of the Commission or upon any other ground whatsoever, an Event of Taxability shall have occurred; or
(iv) the date on which the Commission shall receive notice from the Bank or any Noteholder or any former Noteholder that the Internal Revenue Service (or any other government official or agency exercising the same or a substantially similar function from time to time) has assessed as includable in the gross income of the Bank, such Noteholder or such former Noteholder the interest on the applicable Tax-exempt Notes or Tax-exempt Loan due to the occurrence of an Event of Taxability;
provided, however, no Determination of Taxability shall occur under subparagraph (iii) or (iv) hereunder unless the Commission has been afforded the opportunity, at its expense, to contest any such assessment or opinion, and, further, no Determination of Taxability shall oc cur until such contest, if made, has been finally determined after taking into account any permitted appeals ; provided further, however, that upon demand from the Bank, such Noteholder or former Noteholder, the Commission shall promptly r eimburse, the Bank, such Noteholder or former Noteholder for any payments, including any taxes, interest, penalties or other charges, the Bank, such Noteholder or former Noteholder shall be obligated to make as a result of the Determination of Taxability.
“Dollars,” “US$,” “$” and “U.S. Dollars” mean the lawful currency of the United States of America.
“Employee Plan” means an employee benefit plan covered by Title IV of ER1SA and maintained for employees of the Commission.
“Environmental Laws ” means any and all Federal, state and local statutes, laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants, franchises, licenses, agreements or other governmental restrictions relating to the environment or to emissions, discharges or releases of pollutants, contaminants, petroleum or petroleum products, chemicals or industrial, toxic or hazardous substances or wastes into the environment including, without limitation, ambient air, surface water, ground water or lan d, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of pollutants, contaminants, petroleum or petroleum products, chemicals or industrial, toxic or hazardous substances or wastes or the clean-up or other remediation thereof. “ERISA” means the Employee Retirement Income Security Act of 1974, as amended, or any successor statute thereto.
“Event of Default” has the meaning set forth in Section 6.1 (only as it relates to the Water System) or 6.3 (only as it relates to the Power System) hereof, as applicable. -8-
“Event of Taxability” means a (i) change in Law or fact or the interpretation thereof, or the occurrence or existence of any fact, event or circumstance (including, without limitation, the taking of any action by the Commission , or the failure to take any action by the Commission , or the making by the Commission of any misrepresentation herein or in any certificate given in connection with the Tax -exempt Notes or Tax -exempt Loans) which has the effect of causing interest paid or payable on any Tax -exempt Note or any Tax-exempt Loan to become includable in the gross income of the Bank, the Noteholder or any former Noteholder for federal income tax purposes or (ii) the entry of any decree or judgment by a court of competent jurisdiction, or the taking of any official action by the Internal Revenue Service or the Department of the Treasury, which decree, judgment or action shall be final under applicable procedural law, in either case, which has the effect of causing interest paid or payable on any Tax- exempt No te or any Tax - exempt Loan to become includable in the gross income of the Bank, the Noteholder or any former Noteholder for federal income tax purposes with respect to any Tax- exempt Note or any Tax - exempt Loan.
“Excess Interest Amount” has the meaning set forth in Section 2.5(d)(ii) hereof. “Excluded Taxes” means, with respect to the Bank or any Participant, (a) taxes imposed on or measured by its overall net income (however denominated), and franchise taxes imposed on it (in lieu of net income taxes), by the jurisdiction (or any political subdivision thereof) under the laws of which the Bank or such Participant is organized or in which its principal office is located, and (b) any branch profits taxes imposed by the United States or any similar tax imposed by any other jurisdiction in which the Commission is located.
“Facility Maturity Date” means (a) with respect to the Water Commitment, the earlier of (i) February [__], 2028, and (ii) such earlier date on which the Water Commitment is terminated in accordance with Section 2.8(a) hereof, provided, in each case, that if such day is not a Business Day, the Facility Maturity Date shall be the next preceding Business Day, and (b) with respect to the Power Commitment, the earlier of (i) February [__], 2028, and (ii) such earlier date on which the Power Commitment is terminated in accordance with Section 2.8(a) hereof, provided, in each case, that if such day is not a Business Day, the Facility Maturity Date shall be the next preceding Business Day.
“Fee Agreement” means the Fee and Interest Rate Agreement dated February [__], 2025, between the Commission and the Bank, as the same may be amended, supplemented, modified or restated from time to time in accordance with its terms. “Federal Funds Rate ” means, for any day, the rate per annum equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day; provided that: (a) if such day is not a Business Day, then the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day; and (b) if no such rate is so published on such next succeeding Business Day, then the Federal Funds Rate for such day sha ll be the average rate (rounded, if necessary, to a whole multiple of one one‑hundredth of 1.00%) charged to Wells Fargo Bank, National Association on such day on such -9-
transactions as determined by Wells Fargo Bank, National Association. Notwithstanding anything herein to the contrary, if the Federal Funds Rate as determined as provided above would be less than zero percent (0.0%), then the Federal Funds Rate shall be deemed to be zero percent (0.0%). “Fiscal Year” means the twelve (12) month period commencing on July 1 of each year and ending on the following June 30 or any other period of twelve (12) consecutive months adopted by the Commission as its fiscal year.
“Fitch” means Fitch Ratings Inc. and its successors and assigns. “Forty-Third Supplemental Indenture” means the Forty -Third Supplemental Indenture dated as of July 1, 2023, by and between U.S. Bank Trust Company, National Association, as trustee, and the Commission, as the same may be amended, restated, or otherwise modified from time to time in accordance with the terms hereof and thereof. “GAAP” means generally accepted accounting principles in the United States as in effect from time to time, applied by the Commission on a basis consistent with the Commission ’s most recent financial statements furnished to the Bank.
“Governmental Approvals ” means an authorization, consent, approval, license or exemption of, registration or filing with, or report to, any Governmental Authority. “Governmental Authority” means the government of the United States or any other nation or any political subdivision thereof or any governmental or quasi -governmental entity, including any court, department, commission, board, bureau, agency, administration, central bank, service, district or other instrumentality of any governmental entity or other entity exercising executive, legislative, judicial, taxing, regulatory, fiscal, monetary or administrative powers or functions of or pertaining to government, or any arbitrator, mediator or other Person with authority to bind a party at law.
“Guarantees” means, for any Person, all guarantees, endorsements (other than for collection or deposit in the ordinary course of business) and other contingent obligations of such Person to purchase, to provide funds for payment, to supply funds to invest in any other Person or otherwise to assure a creditor of another Person against loss. “Hetch Hetchy Project” means the Hetch Hetchy Water and Power Project, including the O’Shaughnessy Dam, the Hetch Hetchy Reservoir, the Canyon and Mountain Tunnels, the Kirkwood, Moccasin and Holms Powerhouses, Cherry Lake and its dam, Lake Eleanor and its dam, the related water storage and transportation and hydro- electric generating facilities down to and including the Moccasin Powerhouse, all located in Yosemite National Park, Stanislaus National Forest and Tuolumne County, the rights to which were granted to the City by the Raker Act of 1913, and the related transmission facilities down to the City of Newark. “Indemnified Taxes” means Taxes other than Excluded Taxes. -10-
“Interest Payment Date” means the first Business Day of each calendar month, the related Loan Maturity Date and such earlier date on which all Loans or the related Loan is required to be paid in full in accordance with the terms hereof or, if applicable, on the Term Loan Maturity Date. “Investment Policy and Guidelines ” means the investment guidelines of the City as in effect on the date hereof, as such investment guidelines may be amended from time to time in accordance with the Charter or other State laws, as applicable. “Law” means any treaty or any Federal, regional, state and local law, statute, rule, ordinance, regulation, code, license, authorization, decision, injunction, interpretation, policy, guideline, supervisory standard, order or decree of any court or other Governmental Authority. “Lien” means, with respect to any asset, (a) any lien, charge, claim, mortgage, security interest, pledge or assignment of revenues of any kind in respect of such asset or (b) the interest of a vendor or lessor under any conditional sale agreement, capital lease or other title retention agreement relating to such asset.
“Loan” means, individually, a Power System Loan or a Water System Loan, in accordance with the applicable Notice of Borrowing, and “Loans” collectively means Power System Loans or Water System Loans, as applicable.
“Loan Maturity Date” means the Facility Maturity Date.
“Maximum Federal Corporate Tax Rate” means, for any day, the maximum rate of income taxation imposed on corporations pursuant to Section 11(b) of the Code, as in effect as of such day (or, if as a result of a change in the Code, the rate of income taxation imposed on corporations generally s hall not be applicable to the Bank, the maximum statutory rate of federal income taxation which could apply to the Bank as of such day). “Maximum Rate” means the lesser of (a) the maximum non-usurious interest rate that may, under applicable Federal law and applicable state law, be contracted for, charged or received under such laws and (b) 12% per annum; provided, however, that if the City or the Commission increases the maximum rate allowable, which currently is set forth in clause (b) of this definition, at any time during the term hereof, then such increased rate shall automatically be deemed to be the Maximum Rate.
“Moody’s” means Moody’s Investors Service, Inc., and its successors and assigns. “Note Counsel” means any firm of attorneys nationally recognized on the subject of tax-exempt municipal finance selected by the Commission. “Noteholder” means the Bank and each Bank Transferee or Non-Bank Transferee pursuant to the terms hereof so long as such Bank Transferee or Non -Bank Transferee owns an interest in the Power System Notes or the Water System Notes, as applicable, and shall include any holder of Term Loans.
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“Notes” means, individually or collectively, as applicable, the Power System Notes and the Water System Notes.
“Notice of Borrowing” has the meaning set forth in Section 2.2(a)(i) hereof. “Notice of Conversion” has the meaning set forth in Section 2.2(a)(ii) hereof “Obligations” means the Water Obligations or the Power Obligations, as applicable. “Other Power Debt Documents” has the meaning set forth in Section 5.1(c)(B) hereof. “Other Water Debt Documents” has the meaning set forth in Section 5.1(c)(A) hereof. “Other Taxes” means all present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies arising from any payment made hereunder or under any other Basic Document or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement or any other Basic Document.
“Parity Credit Agreements” means the credit agreements entered into with respect to Parity Debt.
“Parity Debt” means (i) with respect to the Water System, any Debt issued or incurred by the Commission and secured on a parity with the lien and charge on Available Water Enterprise Revenues and/or the Water Revenue Fund securing the payment of principal of and interest on the Water System Notes or the Obligations with respect thereto and includes, without limitation, the Water System Notes, and (ii) with respect to the Power System, any Debt issued or incurred by the Commission and secured on a parity with the lien and charge on Available Power Enterprise Revenues and/or the Power Revenue Fund securing the payment of principal of and interest on the Power System Notes or the Obligations with respect thereto and includes, without limitation, the Power System Notes.
“Participant” has the meaning set forth in Section 7.3(b) hereof. “Participation” has the meaning set forth in Section 7.3(b) hereof. “Person” means an individual, a corporation, a partnership, an association, a limited liability company, a trust or any other entity or organization, including a government or political subdivision or any agency or instrumentality thereof.
“Power Annual Debt Service” has the meaning of “Annual Debt Service” as set forth in the Power Bonds Indenture.
“Power Available Funds” means any unencumbered amounts, including non-appropriated fund balances and reserves, and cash and the book value of investments held by the Treasurer of the City for the Power Enterprise, that the Commission reasonably expects would be available, as -12-
of any date of calculation, to pay principal (or in the case of any capital appreciation bond, the accreted value thereof) of and interest on Senior Power Bonds when due. “Power Basic Documents” means, at any time, each of the following documents or agreements as in effect or as outstanding, as the case may be, at such time: (a) the Power System Notes, (b) the Power Resolution, (d) the Fee Agreement, and (e) this Agreement, and any and all future renewals and extensions or restatements of, or amendments or supplements to, any of the foregoing.
“Power Bond Coverage Ratio” for any Fiscal Year means the ratio of (a) Power Net Revenues in such Fiscal Year, plus (ii) Power Available Funds in such Fiscal Year, to (b) Power Annual Debt Service on the Outstanding Bonds (as defined in the Power Bonds Indenture) in such Fiscal Year.
“Power Bonds Indenture” means the Trust Indenture, dated as of May 1, 2015, between the Commission and U.S. Bank Trust Company, National Association (as successor in interest to U.S. Bank National Association), as trustee for the holders from time to time of the Commission’s power revenue bonds, as the same may be amended, restated, or otherwise modified from time to time in accordance with the terms thereof and hereof.
“Power Commitment” means an amount equal to $100,000,000, as such amount may be reduced from time to time pursuant to Sections 2.7, 2.8 and 6.4 hereof. “Power Consulting Engineer” has the meaning of “Consulting Engineer” set forth in the Power Bonds Indenture.
“Power Daily SOFR Applicable Spread for Taxable Loans” has the meaning set forth in the Fee Agreement.
“Power Daily SOFR Applicable Spread for Tax-exempt Loans” has the meaning set forth in the Fee Agreement.
“Power Enterprise” means the Commission’s Power Enterprise established and existing as of the date of the Power Bonds Indenture to provide electric power and related services to the City and its departments, agencies and commissions as well as other customers both in and outside of the City, including that portion of the Hetch Hetchy Project used for power generation, and all other power generation, transmission and distribution facilities and related facilities, streetlights, property and rights constituting a part of the Power Enterprise, together with any and all additions, improvements, betterments, renewals, replacements and repairs thereto and extensions thereof, but shall not include: (a) the Water Enterprise, (b) the Wastewater Enterprise, or (c) any Separate System.
“Power Enterprise Debt” means any Debt issued or incurred by the Commission and payable from or secured by a pledge of and lien on Power Enterprise Revenues and/or Power Revenue Fund, including any obligations of the Commission under any related reimbursement -13-
agreements or liquidity agreements or bank notes secured by or payable from a pledge of and lien on Power Enterprise Revenues.
“Power Enterprise Revenues” has the meaning of “Revenues” as set forth in the Power Bonds Indenture.
“Power Net Revenues” for any Fiscal Year (or other designated twelve- month period) means Power Enterprise Revenues in such Fiscal Year (or other designated twelve-month period), less (a) Power Operation and Maintenance Expenses, and (b) any Priority R&R Fund Deposit (as defined in the Power Bonds Indenture ) for such Fiscal Year (or other designated twelve -month period).
“Power Obligations” means the Power Reimbursement Obligations (which includes amounts owing on the Power System Loans and all amounts evidenced by the Power System Notes) and all other obligations of the Commission to the Bank arising under or in relation to this Agreement (including, without limitation, the Fee Agreement), and only as it relates to the Power System.
“Power Operation and Maintenance Expenses” has the meaning of the term “Operation and Maintenance Expenses” as set forth in the Power Bonds Indenture. “Power Reimbursement Obligations” means any and all obligations of the Commission to repay the Bank for any Power System Loan or Power Term Loan, including in each instance all interest accrued thereon, which obligations are evidenced and secured by the Power System Notes. “Power Reserve Fund” has the meaning of “Reserve Fund” set forth in the Power Bonds Indenture.
“Power Resolution” means the Resolution No. 25- [__], adopted by the Commission on February 25, 2025.
“Power Revenue Fund” has the meaning of the term “Revenue Fund” as defined in the Power Bonds Indenture.
“Power Revolving Credit Period” means the period from and including the Closing Date to and including the Termination Date with respect to the Power Commitment. “Power Senior Debt” means any Debt issued or incurred by the Commission and secured by or payable from Power Enterprise Revenues and/or Power Revenue Fund on a basis senior or superior to the Lien in favor of the Notes and other Parity Debt and includes, without limitation, the Senior Power Bonds.
“Power System” means the Power Enterprise.
“Power System Loans” means Loans made to provide working capital or short -term or interim financing or refinancing thereof for the Power System. -14-
“Power System Notes” means (i) the Power System Taxable Note, (ii) the Power System Tax-exempt Note, (iii) the Power System Taxable Term Note and ( iv) the Power System Tax - exempt Term Note.
“Power System Taxable Note” means the Power System Revolving Credit Bank Note of the Commission substantially in the form set forth in Exhibit F hereto, evidencing the obligation of the Commission to repay the Power System Loans which are Taxable Loans. “Power System Taxable Term Note” means, to the extent that the Bank makes a Term Loan with respect to the Power System, the Power System Taxable Term Note of the Commission substantially in the form set forth in Exhibit J hereto, evidencing the obligation of the Commission to repay the Term Loan that is a Taxable Loan that refunded the Power System Loans which were Taxable Loans and interest thereon.
“Power System Tax-exempt Note” means the Power System Revolving Credit Bank Note of the Commission substantially in the form set forth in Exhibit H hereto, evidencing the obligation of the Commission to repay the Power System Loans which are Tax-exempt Loans. “Power System Tax-exempt Term Note” means, to the extent that the Bank makes a Term Loan with respect to the Power System, the Power System Tax- exempt Term Note of the Commission substantially in the form set forth in Exhibit L hereto, evidencing the obligation of the Commission to repay the Term Loan that is a Tax-exempt Loan that refunded the Power System Loans which were Tax-exempt Loans and interest thereon. “Prime Rate” means, for any day, the fluctuating rate of interest per annum equal to the “Prime Rate” listed in the “Money Rates” section of The Wall Street Journal as of such day or, if The Wall Street Journal is not published on a particular day, then the “Prime Rate” liste d in the “Money Rates” section of The Wall Street Journal for the immediately preceding Business Day.

If The Wall Street Journal ceases to exist or to publish a prime rate from which the Prime Rate is then determined, then the Prime Rate shall be the rate determined by Wells Fargo Bank, National Association as its prime commercial lending rate for such day for loans denominated in U.S.

Dollars made in the United States. Wells Fargo Bank, National Association may make loans to its customers at, below or above such prime commercial lending rate, and the prime commercial lending rate referred to herein is not intended to be the best rate offered to customers of Wells Fargo Bank, National Association. Any change in the Prime Rate shall take effect on the date specified in the publication or announcement of such change. Each determination of the Prime Rate by the Bank will be conclusive and binding on the Commission absent manifest error. “Property” means any interest in any kind of property or asset, whether real, personal or mixed, or tangible or intangible, whether now owned or hereafter acquired. “Proposed Amendments” means the proposed amendments described in Article CLXXXVII of the Forty-Third Supplemental Indenture.
“Proposition E” means the measure approved by the voters of the City on November 5, 2002, which among other things, authorized the Commission to issue indebtedness, including -15-
revenue bonds, notes, commercial paper or other forms of indebtedness, when authorized by ordinance approved by a two-thirds vote of the Board, for the purpose of reconstructing, replacing, expanding, repairing or improving w ater facilities or clean water facilities or combinations of water and clean water facilities under the jurisdiction of the Commission. “Rating Agency ” and “Rating Agencies ” means, individually or collectively, as applicable, Fitch, Moody’s and S&P.
“Relevant Governmental Body” means the Board of Governors of the Federal Reserve System and/or the Federal Reserve Bank of New York, or a committee officially endorsed or convened by the Board of Governors of the Federal Reserve System and/or the Federal Reserve Bank of New York or any successor thereto.
“Resolution” means, individually or collectively, as applicable, the Power Resolution and the Water Resolution.
“Revolving Credit Period” means the Water Revolving Credit Period or the Power Revolving Credit Period, as applicable.
“Risk-Based Capital Guidelines ” means (i) the risk-based capital guidelines in effect in the United States, including transition rules, and (i i) the corresponding capital regulations promulgated by regulatory authorities outside the United States including transition rules, and any amendments to such regulations.
“S&P” means S&P Global Ratings and its successors and assigns. “Sanctioned Country” means at any time, a country, region or territory which is itself (or whose government is) the subject or target of any Sanctions (including, as of the Closing Date, Cuba, Iran, North Korea, Syria, Venezuela and Crimea).
“Sanctioned Person” means, at any time, (a) any Person listed in any Sanctions-related list of designated Persons maintained by OFAC (including OFAC’s Specially Designated Nationals and Blocked Persons List and OFAC’s Consolidated Non-SDN List), the U.S. Department of State, the United Nations Security Council, the European Union, any European member state, His Majesty’s Treasury, or other relevant sanctions authority, (b) any Person operating, organized or resident in a Sanctioned Country, (c) any Person owned or controlled by, or acting or purporting to act for or on behalf of, directly or indirectly, any such Person or Persons described in clauses (a) and (b), including a Person that is deemed by OFAC to be a Sanctions target based on the ownership of suc h legal entity by Sanctioned Person(s) or (d) any Person otherwise a target of Sanctions, including vessels and aircraft, that are designated under any Sanctions program. “Sanctions” means any and all economic or financial sanctions, sectoral sanctions, secondary sanctions, trade embargoes and restrictions and anti -terrorism laws, including but not limited to those imposed, administered or enforced from time to time by the U.S. governm ent (including those administered by OFAC or the U.S. Department of State), the United Nations Security Council, the European Union, any European member state, His Majesty’s Treasury, or -16-
other relevant sanctions authority in any jurisdiction in which (a) the Commission or any of its subsidiaries or Affiliates is located or conducts business, (b) in which any of the proceeds of the Loans will be used, or (c) from which repayment of the Loans will be derived. “Senior Power Bonds” has the meaning ascribed to the term “Bonds” as set forth in the Power Bonds Indenture.
“Senior Water Bonds” has the meaning ascribed to the term “Bonds” in the Water Bonds Indenture and includes bonds, notes or other evidences of indebtedness payable from Water Enterprise Revenues on parity with the outstanding Senior Water Bonds (including the Water Senior State Loans).
“Separate System” means any electric power or energy generation, transmission, or other facilities, property and rights that may be hereafter purchased, constructed or otherwise acquired by the Commission where the revenues derived from the ownership and operation of shall be pledged to the payment of bonds or other obligations for borrowed money issued or to purchase, construct or otherwise acquire such facilities, property and rights and shall not be included in Revenues (as such term is defined in the Power Bonds Indenture) and the operation and maintenance expenses with respect to which shall not be included in Power Operation and Maintenance Expenses.
“SOFR” means a rate equal to the secured overnight financing rate as administered by the SOFR Administrator.
“SOFR Administrator” means the Federal Reserve Bank of New York (or a successor administrator of the secured overnight financing rate). “SOFR Determination Day” has the meaning specified in the definition of “Daily Simple SOFR”.
“SOFR Loan” means any Loan bearing interest at a rate based on Daily Simple SOFR, as provided herein.
“State” means the State of California.
“Subordinated Water Bonds ” means any obligations or securities of the Commission hereafter issued pursuant to a Subordinated Water Bonds Indenture. “Subordinated Water Bonds Indenture” means any indenture of the Commission providing for the issuance of indebtedness secured in whole or in part by a lien on Water Enterprise Revenues subordinate to the lien of the Water Bonds Indenture in favor of the Senior Water Bonds but superior to the lien in favor of the Notes.
“Swap Contract ” means (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index -17-
swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross -currency rate swap transactions, currency options, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc. , any International Foreign Exchange Master Agreement, or any other master agreement (any such master agreement, together with any related schedules, a “ Master Agreement”), including any such obligations or liabilities under any Master Agreement. “System” or “Systems” means the Power System and the Water System, as applicable. “Taxable Date” means the date on which interest on any Tax-exempt Loan or Tax-exempt Note is first includable in the gross income of any holder thereof (including, without limitation, the Bank) as a result of an Event of Taxability as such date is established pursuant t o a Determination of Taxability.
“Taxable Loan” means a Loan that is identified as a Taxable Loan in the Notice of Borrowing, or a Term Loan that refunded one or more Loans which were Taxable Loans. “Taxable Period” has the meaning set forth in Section 2.13 hereof. “Taxable Rate” means, with respect to a Taxable Period, the product of (i) the interest rate on the applicable Tax-exempt Loan or Tax-exempt Note during such period and (ii) the quotient of (A) one divided by (B) one minus the Maximum Federal Corporate Tax Rate in effect as of such day.
“Taxes” means all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, fines, additions to tax or penalties applicable thereto. “Tax-exempt Loan” means a Loan that is identified as a Tax-exempt Loan in the Notice of Borrowing, or a Term Loan evidenced by a Tax-exempt Note. “Tax-exempt Notes” means the Power Tax -exempt Note, the Power Tax- exempt Term Note, the Water Tax-exempt Note, and the Water Tax-exempt Term Note. “Term Loans” has the meaning set forth in Section 2.12(a) hereof. “Term Loan Maturity Date” means the date that is three (3) years after the making of the related Term Loan hereunder, or such earlier date as Term Loan becomes due and payable by the terms hereof.
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“Term-Out Rate” means the rate of interest per annum with respect to any Term Loans (i) from and including the date of the extension of the Term Loans up to and including the date which is one hundred eighty (180) days immediately succeeding such date, equal to the Base Rate from time to time in effect and (ii) from and after the date which is one hundred and eighty- one (181) days immediately succeeding the date of the extension of the Term Loans, and at all times thereafter, equal to the Base Rate from time to time in ef fect plus one percent (1.00%); provided, however, that immediately and automatically upon the occurrence of any Event of Default (and without any notice given with respect thereto) and during the continuance of such Event of Default, the “Term-Out Rate” shall mean the Default Rate.
“Termination Date” means the Facility Maturity Date or, if earlier, the date on which the applicable Commitment is terminated or permanently reduced to zero in accordance with the terms hereof.
“U.S. Government Securities Business Day” means any day except for (a) a Saturday, (b) a Sunday or (c) a day on which SIFMA recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in United States government securities.
“Wastewater Enterprise” has the meaning of “Enterprise” as set forth in that certain Indenture, dated as of January 1, 2003, by and between the Commission and U.S. Bank Trust Company, National Association (as successor in interest to U.S. Bank National Association), as amended and supplemented, and as the same may be subsequently supplemented, amended and modified from time to time..
“Water Annual Debt Service” has the meaning of “Annual Debt Service” as set forth in the Water Bonds Indenture ; provided that references therein to Senior Water Bonds shall also include Subordinated Water Bonds and Water Senior State Loans. “Water Basic Documents” means, at any time, each of the following documents or agreements as in effect or as outstanding, as the case may be, at such time: (a) the Water System Notes, (b) the Water Resolution, (d) the Fee Agreement, and ( e) this Agreement, and any and all future renewals and extensions or restatements of, or amendments or supplements to, any of the foregoing.
“Water Bond Reserve Fund” has the meaning of “Bond Reserve Fund” as set forth in the Water Bonds Indenture.
“Water Bonds Indenture” means that certain Amended and Restated Indenture, dated as of August 1, 2002, by and between the Commission and U.S. Bank Trust Company, National Association (as successor in interest to U.S. Bank National Association), providing for the issuance from time to time of Senior Water Bonds, as amended by supplemental indentures through and including the Forty-Sixth Supplemental Indenture, dated as of August 1, 2023, by and between the Commission and U.S. Bank Trust Company, National Ass ociation and as the same may be subsequently supplemented, amended and modified from time to time. -19-
“Water Commitment” means an amount equal to $100,000,000, as such amount may be reduced from time to time pursuant to Sections 2.7, 2.8 and 6.2 hereof. “Water Consulting Engineer” has the meaning of “Consulting Engineer” set forth in the Water Bonds Indenture.
“Water Daily SOFR Applicable Spread for Taxable Loans” has the meaning set forth in the Fee Agreement.
“Water Daily SOFR Applicable Spread for Tax -exempt Loans” has the meaning set forth in the Fee Agreement.
“Water Debt Service” has the meaning of “Debt Service” set forth in the Water Bonds Indenture; provided that references therein to Senior Water Bonds shall also include Subordinated Water Bonds and Water Senior State Loans.
“Water Enterprise” has the meaning of “Enterprise” as set forth in the Water Bonds Indenture.
“Water Enterprise Debt ” means any Debt issued or incurred by the Commission and payable from or secured by a pledge of and lien on Water Enterprise Revenues and/or the Water Revenue Fund, including any obligations of the Commission under any reimbursement agreements or liquidity agreements or bank notes secured by or payable from a pledge of and lien on Water Enterprise Revenues and/or the Water Revenue Fund.
“Water Enterprise Revenues ” has the meaning ascribed to the term “ Revenues” in the Water Bonds Indenture.
“Water Maximum Annual Debt Service” has the meaning of “Maximum Annual Debt Service” in the Water Bonds Indenture; provided that references therein to Senior Water Bonds shall also include Subordinated Water Bonds and Water Senior State Loans. “Water Net Revenues” has the meaning of “Net Revenues” set forth in the Water Bonds Indenture.
“Water Obligations” means the Water Reimbursement Obligations (which includes amounts owing pursuant to Water System Loans and all amounts evidenced by the Water System Notes) and all other obligations of the Commission to the Bank arising under or in relation to this Agreement (including, without limitation, the Fee Agreement), and only as it relates to the Water System.
“Water Operation and Maintenance Costs” has the meaning of “Operation and Maintenance Costs of the Enterprise” set forth in the Water Bonds Indenture. “Water Project” has the meaning set forth in the Water Bonds Indenture. -20-
“Water Reimbursement Obligations” means any and all obligations of the Commission to repay the Bank for any Water System Loan or Water Term Loan, including in each instance all interest accrued thereon, which obligations are evidenced and secured by the Water System Notes. “Water Resolution” means the Resolution No. 25-[____], adopted by the Commission on February 25, 2025.
“Water Revenue Fund” has the meaning of “Revenue Fund” as defined in the Water Bonds Indenture.
“Water Revolving Credit Period” means the period from and including the Closing Date to and including the Termination Date with respect to the Water Commitment. “Water Senior Debt” means any Debt issued or incurred by the Commission and secured by or payable from Water Enterprise Revenues and/or the Water Revenue Fund on a basis senior or superior to the lien in favor of the Notes, the other Parity Debt, and includes, without limitation, the Senior Water Bonds, Water Senior State Loans, and any Subordinated Water Bonds. “Water Senior State Loans” means each loan agreement or installment sale agreement entered into between the Commission and the State of California (or any board, department or agency thereof) or the federal government (or any board, department or agency thereof), in each case, to finance additions, betterments, extensions, repairs, renewals or replacements to the Water Enterprise, and which, by their terms, are secured by or payable from Water Enterprise Revenues and/or the Water Revenue Fund on a senior ba sis to the obligations hereunder, under the Fee Agreement, the Water System Notes, or Parity Debt.
“Water System” means the Water Enterprise.
“Water System Loans” means Loans made to provide working capital or short -term or interim financing or refinancing thereof for the Water System. “Water System Notes” means (i) the Water System Taxable Note, (ii) the Water System Tax-exempt Note, (iii) the Water System Taxable Term Note and (iv) the Water System Tax - exempt Term Note.
“Water System Taxable Note” means the Water System Revolving Credit Bank Note of the Commission substantially in the form set forth in Exhibit G hereto, evidencing the obligation of the Commission to repay the Water System Loans which are Taxable Loans. “Water System Taxable Term Note” means, to the extent that the Bank makes a Term Loan with respect to the Water System, the Water System Taxable Term Note of the Commission substantially in the form set forth in Exhibit K hereto, evidencing the obligation of the Commission to repay the Term Loan that is a Taxable Loan that refunded the Water System Loans which were Taxable Loans and interest thereon.
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“Water System Tax-exempt Note” means the Water System Revolving Credit Bank Note of the Commission substantially in the form set forth in Exhibit I hereto, evidencing the obligation of the Commission to repay the Water System Loans which are Tax-exempt Loans. “Water System Tax-exempt Term Note” means, to the extent that the Bank makes a Term Loan with respect to the Water System, the Water System Tax -exempt Term Note of the Commission substantially in the form set forth in Exhibit M hereto, evidencing the obligation of the Commission to repay the Term Loan that is a Tax-exempt Loan that refunded the Water System Loans which were Tax-exempt Loans and interest thereon. “2024 Audited Financial Statements” has the meaning set forth in Section 4.6 hereof.

The foregoing definitions shall be equally applicable to both the singular and plural forms of the defined terms.

Section 1.2. Interpretations. The table of contents and article and section headings of this Agreement are included herein for convenience of reference purposes only and shall not constitute a part of this Agreement or affect its interpretation in any respect. All references to time herein shall refer to local time in New York, New York unless otherwise provided herein.

Section 1.3. Accounting Terms . Unless otherwise inconsistent with the terms of this Agreement, all accounting terms shall be interpreted and all accounting determinations hereunder shall be made in accordance with GAAP.

Section 1.4. Rates. The Bank does not warrant or accept any responsibility for, and shall not have any liability with respect to (i) the continuation of, administration of, submission of, calculation of or any other matter related to the Benchmark, any component definition thereof or rates referred to in the definitions thereof or with respect to any alternative, successor or replacement rate thereto (including any Benchmark Replacement), including whether the composition or characteristics of any such alternative, successo r or replacement rate (including any Benchmark Replacement) will be similar to, or produce the same value or economic equivalence of, or have the same volume or liquidity as, the Benchmark, the Tax -Exempt SOFR Rate or the Taxable SOFR Rate or any other Benchmark, the Tax -Exempt SOFR Rate or the Taxable SOFR Rate prior to its discontinuance or unavailability or (b) the effect, implementation or composition of any Benchmark Replacement Conforming Changes. To the extent permitted by law, the Bank and its affiliates or other related entities may engage in transactions that affect the calculation of the Benchmark, the Tax -Exempt SOFR Rate or the Taxable SOFR Rate or any alternative, successor or replacement rate (including any Benchmark Replacement) or any relevant adjustments thereto, in each case, in a manner adverse to the Commission . The Bank may select information sour ces or services in its reasonable discretion to ascertain the Benchmark, any component definition thereof or rates referred to in the definitions thereof, in each case pursuant to the terms of this Agreement, and shall have no liability to the Commission or any other person or entity for damages of any kind, including direct or indirect, special, punitive, incidental or consequential damages, costs, losses or expenses (whether in tort, contract or otherwise and whether at law or in equity), for any error or calculation of any such rate (or component thereof) provided by any such information source or service.
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Section 1.5. Water Obligations only of the Water System; Power Obligations only of the Power System. (i) As it relates to the Water System and the Water Obligations, the representations, warranties, covenants, events of default, remedies and Obligations of the Water System under this Agreement shall only relate to the Water System and under no event and under no circumstance shall such Water System representations, warranties, covenants, events of default, remedies and Obligations relate to the Power System; and
(ii) as it relates to the Power System and the Power Obligations, the representations, warranties, covenants, events of default, remedies and Obligations of the Power System under this Agreement shall only relate to the Power System and under no event and under no circumstance shall such Power System representations, warranties, covenants, events of default, remedies and Obligations relate to the Water System.

ARTICLE TWO

THE CREDIT
Section 2.1. Commitment to Lend.
(a) Loans. During the Revolving Credit Period, the Bank agrees, on the terms and conditions set forth in this Agreement, to make revolving loans to the Commission pursuant to this Section from time to time in amounts such that the aggregate principal amount of (i) Water System Loans by the Bank at any one time outstanding shall not exceed the amount of the Water Commitment, and (ii) Power System Loans by the Bank at any one time outstanding shall not exceed the Power Commitment. Within the foregoing limit and subject to the terms and conditions of Section 2.2 hereof, the Commission may borrow under this subsection (a), repay or, to the extent permitted by Section 2.9 hereof, prepay, the Loans and re-borrow at any time during the Revolving Credit Period under this subsection (a).
(b) Extension of Revolving Credit Period. (i) No later than 120 days prior to the Facility Maturity Date, the Commission may request the Bank to extend the then current Facility Maturity Date with respect to either the Water System or the Power System for a period as agreed to by the Commission and the Bank. If the Bank, in its sole discretion, elects to extend the Facility Maturity Date then in effect, it shall deliver to the Commission within 60 days of receiving a request, a written notice of extension (herein referred to as a “Notice of Extension”) designating the date to which the Facility Maturity Date is being extended. Such extension of the Facility Maturity Date shall be effective, after receipt of such Notice of Extension, on the Business Day following the date of delivery of such Notice of Extension, and thereafter all references in this Agreement to the Facility Maturity Date shall be deemed to be references to the date designated as such in the most recent Notice of Extension delivered to the Commission. Any date to which the Facility Maturity Date has been extended in accordance with this Section 2.1(b) may be extended in like manner. If the Bank fails to provide the Commission with a Notice of Extension as provided hereinabove, the Bank shall be deemed not to have consented to the Commission’s request. The Bank shall use commercially reasonable efforts to promptly notify the Commission if it will not extend the -23-
Facility Maturity Date, but the Bank ’s failure to do so shall be deemed a denial of the extension request.
(ii) Notwithstanding the foregoing, it is understood and agreed that the foregoing provisions are intended for the convenience of the parties only and shall in no respect prohibit the parties from agreeing to extend the Revolving Credit Period under other circumstances or at other times. In the event the Revolving Credit Period is extended under any other circumstances, the Bank shall give prompt written notice thereof to the Commission. (iii) If the Revolving Credit Period is extended, whether pursuant to subsection (i) above or otherwise, the Commission shall be deemed to have made the representations and warranties contained herein on the date on which the Revolving Credit Period is so extended.

Section 2.2. Method of Borrowing, Continuing or Converting Loans; Account to Which Proceeds of Loans to Be Credited. (a)(i) In the case of any Borrowing, the Commission shall give the Bank notice in the form of Exhibit A hereto, executed by an Authorized Representative of the Commission (a “Notice of Borrowing”), by not later than 11:00 a.m. (Los Angeles time) on the second (2nd) Business Day before each Borrowing of Loans (or such shorter time as the Bank may agree in writing), specifying:
(A) the date of such Borrowing, which shall be a Business Day; (B) the aggregate amount of such Borrowing (which shall not exceed the difference between (i) the amount of the Water Commitment or Power Commitment, as applicable, and (ii) the aggregate principal amount of Water System Loans or Power System Loans, as applicable, then outstanding under the Water Commitment or Power Commitment, as applicable); and
(C) whether such Borrowing (1) is for the Power System under the Power Commitment or the Water System under the Water Commitment, and (2) will be a Taxable Loan or a Tax-exempt Loan.
(ii) The Commission may convert any Tax- exempt Loan to a Taxable Loan only upon three (3) Business Days prior written notice to the Bank prior to 11:00 a.m., Los Angeles time, on such required prior Business Day in the form of Exhibit B hereto with blanks appropriately completed (each, a “Notice of Conversion”).
(b) Subject to the provisions of subsection ( a) of this Section 2.2, by not later than 3:00 p.m. (Los Angeles time) on the date of each Borrowing, the Bank shall wire transfer, in federal or other immediately available funds, the proceeds of such Borrowing in accordance with the wire instructions provided by the Commission to the Bank in writing; provided, however, that the Commission may, from time to time, change such account by written notice to the Bank , executed by an Authorized Representative of the Commission , given to the Bank at its address referred to in Section 7.2 hereof, and subsequently confirmed by the Bank in accordance with any internal wire call back procedures.
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(c) The Bank shall not be obligated to honor more than one Borrowing with respect to a Taxable Loan and a Tax-exempt Loan per System on any Business Day. (d) Each Loan shall be in the principal amount requested by the Commission pursuant to each notice in the form of Exhibit A hereto but in any event in a minimum principal amount of $1,000,000 or such greater amount which is an integral multiple of $100,000 in excess thereof. (e) For purposes of clarity, the Commission shall only borrow Water System Loans under the Water Commitment and Power System Loans under the Power Commitment, and, at no time, shall (i) the aggregate amount of Water System Loans outstanding hereunder exceed the Water Commitment, or (ii) the aggregate amount of Power System Loans outstanding hereunder exceed the Power Commitment.
(f) For the avoidance of doubt, (i) any Water System Loan s and the related Water Obligations and/or anything related to such Water System Loans and such Water Obligations or the Water System, shall not in any event and shall not under any circumstance be considered an obligation or obligations of the Power System, and (ii) any Power System Loans and the related Power Obligations and/or anything related to such Power System Loans and such Power Obligations or the Power System, shall not in any event and shal l not under any circumstance be considered an obligation or obligations of the Water System.

Section 2.3. The Notes. (a) (i) Power System Loans which are Taxable Loans bearing interest in accordance with the terms set forth herein shall be evidenced by a single corresponding Power System Revolving Credit Bank Note of the Commission substantially in the form set forth in Exhibit F hereto payable to the Bank in an amount equal to the Power Commitment (“Power System Taxable Note”).
(ii) The Power System Loans which are Tax-exempt Loans bearing interest in accordance with the terms set forth herein shall be evidenced by a single corresponding Power System Revolving Credit Bank Note of the Commission substantially in the form set forth in Exhibit H hereto payable to the Bank in an amount equal to the Power Commitment (“Power System Tax-exempt Note”).
(iii) The Term Loan that is a Taxable Loan that refunded the Power System Loans, shall be evidenced by a single corresponding Power System Taxable Term Note of the Commission substantially in the form set forth in Exhibit J hereto payable to the Bank in an amount equal to the Power Commitment (“Power System Taxable Term Note”). (iv) The Term Loan that is a Tax-exempt Loan that refunded the Power System Loans shall be evidenced by a single corresponding Power System Tax-exempt Term Note of the Commission substantially in the form set forth in Exhibit L hereto payable to the Bank in an amount equal to the Power Commitment (“Power System Tax- exempt Term Note”).
(v) Water System Loans which are Taxable Loans bearing interest in accordance with the terms set forth herein shall be evidenced by a single corresponding -25-
Water System Revolving Credit Bank Note of the Commission substantially in the form set forth in Exhibit G hereto payable to the Bank in an amount equal to the Water Commitment (“Water System Taxable Note”).
(vi) Water System Loans which are Tax -exempt Loans bearing interest in accordance with the terms set forth herein shall be evidenced by a single corresponding Water System Revolving Credit Bank Note of the Commission substantially in the form set forth in Exhibit I hereto payable to the Bank in an amount equal to the Water Commitment (“Water System Tax-exempt Note”).
(vii) The Term Loan that is a Taxable Loan that refunded the Water System Loans shall be evidenced by a single corresponding Water System Taxable Term Note of the Commission substantially in the form set forth in Exhibit K hereto payable to the Bank in an amount equal to the Water Commitment (“Water System Taxable Term Note”). (viii) The Term Loan that is a Tax-exempt Loan that refunded the Water System Loans shall be evidenced by a single corresponding Water System Tax-exempt Term Note of the Commission substantially in the form set forth in Exhibit M hereto payable to the Bank in an amount equal to the Water Commitment (“Water System Tax- exempt Term Note”).
(b) Each reference in this Agreement to the “Power System Notes” or “Water System Notes” shall be deemed to refer to and include any or all of such Notes, respectively, as the context may require.
(c) The Bank shall record the date, amount, type and maturity of each Loan made by it and the date and amount of each payment of principal made by or on behalf of the Commission with respect thereto, and prior to any transfer of a Power System Note or Water System Note shall endorse on the schedule forming a part thereof appropriate notations to evidence the foregoing information with respect to each Loan then outstanding evidenced by such Note; provided that the failure of the Bank to make any such record ation or endorsement, or any error therein, or failure to submit any such notations to the Commission shall not affect the obligations of the Commission hereunder or under such Note. The Bank is hereby irrevocably authorized by the Commission so to endorse each Power System Note and Water System Note and to attach to and make a part of each such Note a continuation of any such schedule as and when required. (d) The Commission ’s obligations to repay each Loan and to pay interest thereon as provided herein shall be evidenced and secured by the related Note, and the Commission shall pay amounts under the related Note on each date on which the Commission is required to make a principal payment on the related Loan or Term Loan, as applicable, in an amount equal to the Loan or Term Loan, as applicable, payment due on such date. The payment of the principal of and interest on a Note shall constitute payment of the principal of and interest on the related Loans or Term Loan, as applicable, and the payment of the principal of and interest on the Loans or Term Loan, as applicable, shall constitute the payment of principal and interest on the related Note and the failure to make any payment on any Loan or Term Loan, as applicable, when due shall be a failure to make a payment on the related Note and the failure to make any payment on the related -26-
Note when due shall be a failure to make a payment on the related Loan or Term Loan, as applicable.

Section 2.4. Maturity of Loans and Term Loans . (a) Each Loan included in any Borrowing shall mature, and the principal amount thereof (together with all accrued and unpaid interest therein) shall be due and payable by the Commission , on the Facility Maturity Date or such earlier date on which all Loans or the related Loans become due and payable in accordance with the terms hereof.
(b) The Term Loans shall mature, and the principal amount thereof (together with all accrued and unpaid interest thereon) shall be due and payable by the Commission , on the Term Loan Maturity Date.

Section 2.5. Interest Rates . (a) Subject to subsection (d) below, Section 2.6(d), Section 6.2 and Section 6.4 hereof, each Loan (other than a Term Loan) which is a Taxable Loan shall bear interest on the outstanding principal amount thereof, for each day from the date such Loan is advanced until it becomes due, at a rate per annum equal to the sum of (i) the applicable Daily SOFR Applicable Spread for Taxable Loans and (ii) Daily Simple SOFR (the “Taxable SOFR Rate”). Such interest shall be payable by the Commission on each Interest Payment Date and on the Termination Date.
(b) Subject to subsection (d) below, Section 2.6(d), Section 6.2 and Section 6.4 hereof , as applicable, each Loan (other than a Term Loan) which is a Tax-exempt Loan shall bear interest on the outstanding principal amount thereof, for each day from the date such Loan is advanced until it becomes due, at a rate per annum equal to the sum of (i) the applicable Daily SOFR Applicable Spread for Tax -exempt Loans and (ii) the product of (x) Daily Simple SOFR and (y) the Applicable Factor for Tax -exempt Loans (th e “Tax-Exempt SOFR Rate” ), such sum rounded upward to the fifth decimal place . Such interest shall be payable by the Commission on each Interest Payment Date and on the Termination Date; or (c) The initial Tax -Exempt SOFR Rate shall be determined by the Bank on the SOFR Determination Day prior to the related Borrowing Date. Following the determination of the initial rate and thereafter, the applicable Tax -Exempt SOFR Rate shall be determined by the Bank on each SOFR Determination Day. The initial Taxable SOFR Rate shall be determined by the Bank on the SOFR Determination Day prior to the related Borrowing Date. Following the determination of the initial rate and thereafter, the applicable Taxable SOFR Rate shall be determined by the Bank on each SOFR Determination Day.
(d) (i) If the amount of interest payable for any period in accordance with terms hereof exceeds the amount of interest that would be payable for such period had interest for such period been calculated at the Maximum Rate, then interest for such period shall be payable in an amount calculated at the Maximum Rate for such period.
(ii) Any interest that would have been due and payable for any period but for the operation of Section 2.5(d)(i) hereof shall accrue and be payable as provided in this paragraph (ii) and shall, less interest actually paid to the Bank for such period, cons titute -27-
the “Excess Interest Amount.” If there is any accrued and unpaid Excess Interest Amount as of any date then the principal amount with respect to which interest is payable shall bear interest at the Maximum Rate, until the earlier of repayment of such prin cipal or payment to the Bank of the entire Excess Interest Amount. If there is any accrued and unpaid Excess Interest Amount as of any Interest Payment Date, then, on the current and each subsequent Interest Payment Date, interest shall be paid at the Maximum Rate rather than the otherwise applicable rate until the earlier of (A) payment to the Bank of the entire accrued Excess Interest Amount or (B) the Termination Date. Notwithstanding the foregoing, all unpaid Excess Interest Amount shall be, to the extent permitted by law, due and payable by the Commission as a fee on the Termination Date or such earlier date on which the Term Loans become due and payable in accordance with the terms hereof (or if such Excess Interest relates to Term Loans, on the Term Loan Maturity Date or such earlier date on which all Loans or the related Loans become due and payable in accordance with the terms hereof ). (iii) Notwithstanding the foregoing, on the date on which no principal amount hereunder remains unpaid, the Commission shall pay to the Bank a fee equal to any accrued and unpaid Excess Interest Amount.
(e) (i) Upon a Determination of Taxability with respect to the Tax-exempt Loans relating to the Water System , all such Tax-Exempt Loans shall bear interest at the Taxable Rate. (ii) Upon a Determination of Taxability with respect to Tax-exempt Loans relating to the Power System, all such Tax-Exempt Loans shall bear interest at the Taxable Rate. (f) Subject to subsection (d) above, the Term Loans shall bear interest on the outstanding principal amount thereof, for each date from the date of extension of such Term Loan until it becomes due, at a rate per annum equal to the Term -Out Rate. Such interest shall be payable on each Interest Payment date and on the Term Loan Maturity Date (or such earlier date on which all Loans or the related Loans become due and payable in accordance with the terms hereof).

Section 2.6. Fees. (a) The Commission agrees to perform the respective obligations provided for in the Fee Agreement, including, without limitation, the payment of any and all respective fees provided for therein. The terms and provisions of the Fee Agreement are incorporated herein by reference. Any reference herein or in any other document to fees and/or other amounts or obligations payable hereunder shall include, without limitation, all fees and other amounts or obligations payable pursuant to the Fee Agreement, as it relates to the Water Obligation and the Power Obligations, separately.
(b) If the Commission shall fail to pay any amount payable under the Fee Agreement as and when due, each such unpaid amount shall bear interest for each day from and including the date it was due until paid in full at the applicable Default Rate. (c) The Commission shall pay within thirty (30) days after demand:
(i) the reasonable costs and expenses of the Bank in connection with the enforcement (whether by means of legal proceedings or otherwise) of any of its rights -28-
under this Agreement, the other Basic Document s and such other documents which may be delivered in connection therewith;
(ii) the reasonable fees and out -of-pocket expenses for counsel or other reasonably required consultants to the Bank in connection with advising the Bank as to its rights and responsibilities under this Agreement and the other Basic Document s or in connection with Events of Default, potential Events of Default and responding to requests from the Commission for approvals, consents and waivers; and (iii) any amounts advanced by or on behalf of the Bank to the extent required to cure any Default, Event of Default or event of nonperformance hereunder or any Basic Document, together with interest at the Default Rate.
(d) Any principal of, and to the extent permitted by Applicable Law, any interest on, the Loans and any other sum payable hereunder, which is not paid when due in accordance with the terms of this Agreement (subject to any related cure periods set forth herein) shall bear interest, from the date due and payable until paid, without notice to the Commission, at a rate per annum equal to the Default Rate.

Section 2.7. Optional Termination or Reduction of Commitment . During the Revolving Credit Period, the Commission may, upon at least three Business Days’ notice to the Bank, (i) terminate either Commitment at any time, if no Loans are outstanding under such Commitment at such time, or (ii) reduce either Commitment from time to time by an aggregate amount of $1,000,000 or any larger integral multiple of $5,000, which amount shall be not greater than the amount of the aggregate outstanding principal amount of the Loans under such Commitment.

Section 2.8. Mandatory Termination or Reduction of Commitment . (a) Each Commitment shall terminate on the Termination Date, and any Loans then outstanding (together with accrued interest thereon and all other amounts payable hereunder) shall be due and payable on such date.
(b) (i) If at any time an Event of Default with respect to the Water System shall have occurred and be continuing, the Bank may deliver a written notice to that effect to the Commission, and the Water Commitment shall immediately terminate; and (ii) If at any time an Event of Default with respect to the Power System shall have occurred and be continuing, the Bank may deliver a written notice to that effect to the Commission , and the Power Commitment shall immediately terminate.

An Event of Default with respect to the Water System does not , by itself, cause or result in an automatic Event of Default under the Power System. An Event of Default with respect to the Power System does not, by itself, cause or result in an automatic Event of Default under the Water System.

Section 2.9. Optional Prepayments. The Commission may, upon at least one Business Days’ notice to the Bank, prepay any Borrowing in whole at any time, or from time to time in part in amounts aggregating $1,000,000 or any larger integral multiple of $100,000, by paying the -29-
principal amount to be prepaid and the accrued interest on the amount prepaid to the date of such prepayment shall be payable by the Commission within two (2) Business Days following the date of such prepayment.

Section 2.10. General Provisions as to Payments . The Commission shall make each payment of the principal of, and interest on, the Loans and Term Loans and of fees hereunder and under the Fee Agreement , not later than 3:00 p.m. (Los Angeles time) on the date when due, in federal or other funds immediately available in Los Angeles, to the Bank at its address referred to in Section 7.2 hereof. Whenever any payment of principal of, or interest on, the Loans or Term Loans or of fees shall be due on a day which is not a Business Day, the date for payment thereof shall be extended to the next succeeding Business Day. If the date for any payment of principal is extended by operation of law or otherwise, interest thereon shall be payable for such extended time.

Section 2.11. Computation of Interest and Fees . Interest with respect to Loans and fees shall be calculated on the basis of a 360-day year based upon the actual number of days elapsed.

Section 2.12. The Term Loans.
(a) Generally. (i) On the Facility Maturity Date, so long as (i) no Default or Event of Default shall have occurred and be continuing, or would result therefrom, and (ii) the representations and warranties of the Commission set forth in Article Four (as to the Power System only) hereof are true and correct in all material respects as if made as of such date, the Power System Loans, if any, maturing on such date shall be automatically converted to term loans (each a “Power Term Loan” and collectively the “Power Term Loans”), the proceeds of which shall be deemed to have refunded the Power System Loans and the Commission’s obligations under the related Notes.
(ii) On the Facility Maturity Date, so long as (i) no Default or Event of Default shall have occurred and be continuing, or would result therefrom, and (ii) the representations and warranties of the Commission set forth in Article Four (as to the Water System only) hereof are true and correct in all material respects (or in all respects to the extent qualified by materiality or similar concepts) as if made as of such date, the Water System Loans, if any, maturing on such date shall be automatically converted to term loans (each a “Water Term Loan” and collectively the “Water Term Loans” , and individually and collectively , together wit h the Power Term Loan and the Power Term Loans, the “Term Loan” and “Term Loans”), the proceeds of which shall be deemed to have refunded the Water System Loans and the Commission’s obligations under the related Notes. (iii) The Term Loans shall be evidenced by the Power System Taxable Term Note, the Power System Tax -exempt Term Note, the Water System Taxable Term Note and the Water System Tax -exempt Term Note, as applicable, and the Bank ’s receipt of such Note(s) shall be a condition precedent to extension of the applicable Term Loan(s).

The Term Loans may be repaid in whole or in part on any Business Date upon prior written notice from the Commission to the Bank.
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(b) Repayment. The Term Loans shall be due and payable on the date that is thirty ( 30) days after the Facility Maturity Date. During such thirty ( 30) day period the outstanding amount of the Term Loans shall accrue interest at the Term -Out Rate which shall be payable by the Commission on each Interest Payment Date. In the event that the outstanding amount of the Term Loans is due and payable on the date that is thirty (30) days following the Facility Maturity Date, upon delivery of a written request from the Commission to the Bank in the form of Exhibit N hereto no later than thirty ( 30) days after the Facility Maturity Date and provided that (A) as it relates to the Water System and Power System, separately, no Default or Event of Default shall have occurred and be continuing and (B) as it relates to the Water System and Power System, separately, the representations and warranties of the Commission set forth in Article Four hereof shall be true and correct in all material respects on the date that is thirty (30) days following the Facility Maturity Date, then the Commission shall instead pay to the Bank an amount equal to the outstanding amount of the Term Loans be payable by the Commission in twelve equal (as nearly as possible) quarterly installments, commencing on the three month anniversary of the Facility Maturity Date, and on the corresponding date in every third month occurring thereafter which occurs prior to the Term Loan Maturity Date and on the Term Loan Maturity Date; provided, however, that, notwithstanding anything contained herein to the contrary, the entire principal amount of the Term Loans, plus accrued and unpaid interest thereon, shall be due and payable in full on the Term Loan Maturity Date (or such earlier date on which all Loans or the related Loans become due and payable in accordance with the terms hereof).

Section 2.13. Determination of Taxability. (i) In the event a Determination of Taxability occurs, the Commission hereby agrees to pay to the Bank and each Noteholder within thirty (30) days of demand therefor (1) an amount equal to the difference between (A) the amount of interest that would have been paid to the Bank and such Noteholder on the applicable Tax-exempt Note or Tax-exempt Loan, without duplication, during the period for which interest on the such Tax- exempt Note or Tax-exempt Loan is included in the gross income of the Bank and such Noteholder if the applicable Tax -exempt Note or Tax -exempt Loan had borne interest at the Taxable Rate, beginning on the Taxable Date (the “Taxable Period” ), and (B) the amount of interest actually paid to the Bank and such Noteholder during the Taxable Period, and (2) an amount equal to any interest, penalties or charges owed by the Bank and such Noteholder as a result of interest on the applicable Tax-exempt Note or Tax -exempt Loan becoming included in the gross income of the Bank and such Noteholder, together with any and all reasonable attorneys’ fees, court costs, or other reasonable out -of-pocket costs incurred by the Bank and such Noteholder in connection therewith;
(ii) Subject to the provisions of clause (iii) below, the Bank and such Noteholder shall afford the Commission the opportunity, at the Commission ’s sole cost and expense, to contest (1) the validity of any amendment to the Code which causes the interest on the applicable Tax- exempt Note or Tax -exempt Loan to be included in the gross income of the Bank and such Noteholder or (2) any challenge to the validity of the tax exemption with respect to the interest on the applicable Tax-exempt Note or Tax -exempt Loan, including the right to direct the necessary litigation contesting such challenge (including administrative audit appeals); provided that, in no event shall the Bank or a Noteholder be required to make available its tax returns (or any other information relating to its taxes that it deems confidential) to the Commission or any other Person; and
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(iii) As a condition precedent to the exercise by the Commission of its right to contest set forth in clause (ii) above, the Commission shall, upon reasonable demand, within thirty (30) days, reimburse the Bank and such Noteholder for any and all reasonable expenses (including reasonable attorneys’ fees for services that may be required or desirable, as determined by the Bank and such Noteholder in its reasonable discretion) that may be incurred by the Bank and such Noteholder in connection with any such c ontest, and shall, within thirty (30) days from demand, reimburse the Bank and such Noteholder for any and all penalties or other charges payable by the Bank or such Noteholder for failure to include such interest in its gross income.

Section 2.14. Inability to Determine Interest Rates; Illegality. (a) Circumstances Affecting Benchmark Availability. Subject to subsection (b) below, if Bank determines (any determination of which shall be conclusive and binding on the Commission) that either (i) Daily Simple SOFR cannot be determined pursuant to the definition thereof other than as a result of a Benchmark Transition Event (an “Inability Determination” ) or (ii) any law has made it unlawful, or that any governmental authority has asserted that it is unlawful, for the Bank to make or maintain an advance based on SOFR or Daily Simple SOFR, or to determine or charge interest rates based upon SOFR or Daily Simple SOFR (an “Illeg ality Determination”), then the Bank will so notify the Commission. The outstanding principal balance of the Notes shall bear interest (computed on the basis of a 360- day year, actual days elapsed) at a fluctuating rate per annum determined by the Bank to be equal to the Prime Rate in effect from time to time, from the date of an Inability Determination or an Illegality Determination until Bank revokes such Inability Determination or notifies the Commission that the circumstances giving rise to such Illegality Determination no longer exist, as applicable. When interest is determined in relation to the Prime Rate, each change in the rate of interest hereunder shall become effective on the date each Prime Rate change is announced within the Bank. Notwithstanding any of the foregoing to the contrary, if a Benchmark Replacement is subsequently determined in accordance with subsection (b) below , that Benchmark Replacement, plus any applicable margin, will become effective on the Benchmark Replacement Date and will then supersede the Prime Rate and margin determined in accordance with this provision.
(b) Benchmark Replacement Setting.
(i) Benchmark Replacement. If a Benchmark Transition Event occurs, the applicable Benchmark Replacement will replace the then -current Benchmark for all purposes under the Notes or under any related loan document. Any Benchmark Replacement will become effective on the applicable Benchmark Replacement Date without any further action or consent of the Commission. (ii) Benchmark Replacement Conforming Changes . The Bank will have the right to make Benchmark Replacement Conforming Changes from time to time and any amendments implementing such Benchmark Replacement Conforming Changes will become effective without any further action or consent of the Commission. (iii) Notices; Standards for Decisions and Determinations . The Bank will promptly notify the Commission of (i) the implementation of any Benchmark Replacement -32-
and (ii) the effectiveness of any Benchmark Replacement Conforming Changes. Any determination, decision or election that may be made by the Bank pursuant to this subsection (b), including any determination with respect to a tenor, rate or adjustment or of the occurrence or non-occurrence of an event, circumstance or date and any decision to take or refrain from taking any action or any selection, will be conclusive and binding absent manifest error and will be made in its sole discretion and without the Commission’s consent.

Section 2.15. Taxes.
(a) Payments Free of Taxes . Any and all payments by or on account of any obligation of the Commission hereunder and under each respective Note and the Fee Agreement shall be made free and clear of and without reduction or withholding for any Indemnified Taxes or Other Taxes; provided that if the Commission shall be required by Applicable Law to deduct any Indemnified Taxes (including any Other Taxes) from such payments, then (i) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section) the Bank or any Participant receives an amount equal to the sum it would have received had no such deductions been made, (i i) the Commission shall make such deductions and (iii) the Commission shall timely pay the full amount deducted to the relevant Governmental Authority in accordance with Applicable Law. (b) Payment of Other Taxes by the Commission. Without limiting the provisions of paragraph (a) above, the Commission shall timely pay any Other Taxes to the relevant Governmental Authority in accordance with Applicable Law. (c) Indemnification by the Commission. The Commission shall indemnify the Bank and each Participant, within thirty (30) days after demand therefor, for the full amount of any Indemnified Taxes or Other Taxes (including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under this Section) paid by the Bank or any Participant and any penalt ies, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate stating the amount of such payment or liability delivered to the Commission by the Bank or any Participant shall be conclusive absent manifest error. In addition, the Commission shall indemnify the Bank and each Participant, within thirty (30) days after demand therefor, for any incremental Taxes that may become payable by the Bank or any Participant as a result of any failure of the Commission to pay any Taxes when due to the appropriate Governmental Authority or to deliver to the Bank or any Participant pursuant to clause (d), documentation evidencing the payment of Taxes. (d) Evidence of Payments . As soon as practicable after any payment of Indemnified Taxes or Other Taxes by the Commission to a Governmental Authority, the Commission shall deliver to the Bank or such Participant the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Bank or such Participant, as applicable.
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(e) Treatment of Certain Refunds. If the Bank or any Participant determines, in its sole discretion, that it has received a refund of any Taxes or Other Taxes as to which it has been indemnified pursuant to this Section (including additional amounts paid by the Commission pursuant to this Section), it shall pay to the applicable indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made, or additional amounts paid, under this Section with respect to the Taxes or O ther Taxes giving rise to such refund), net of all out-of-pocket expenses of the Bank or such Participant, and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund); provided that the applicable indemnifying party, upon the request of the Bank, or such Participant, as applicable, agrees to repay the amount paid over pursuant to this Section (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the Bank or such Participant in the event the Bank or such Participa nt is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this paragraph (e), in no event will the Bank or any Participant be required to pay any amount to an indemnifying party pursuant to this paragraph (e) the payment of which would place the Bank or such Participant in a less favorable net after-Tax position than the Bank or such Participant would have been in if the indemnification payments or additional amounts giving rise to such refund had never been paid. This paragraph shall not be construed to require the Bank or any Participant to make available its tax returns (or any other information relating to its taxes which it deems confidential) to the Commission or any other Person.
(f) Survival. Without prejudice to the survival of any other agreement of the Commission hereunder, the agreements and obligations of the Commission contained in this Section shall survive the termination of this Agreement and the payment in full of the Water Obligations and the Power Obligations, as applicable, and the obligations of the Commission thereunder and hereunder.

Section 2.16. Increased Costs; Capital or Liquidity Requirements. (a) Increased Costs Generally. If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, liquidity ratio, special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or advances, loans or other credit extended or participated in by, the Bank or any Participant or the Bank’ s or any such Participant ’s parent or holding company, as the case may be;
(ii) subject to the Bank or any Participant or the Bank’ s or any such Participant’s parent or holding company, as the case may be, to any Tax of any kind whatsoever with respect to this Agreement, the respective Note or the Fee Agreement, or change the basis of taxation of payments to the Bank or such Participant or the Bank’ s or any such Participant’s parent or holding company, as the case may be, in respect thereof (except for Indemnified Taxes or Other Taxes covered by and the imposition of, or any change in the rate of any Excluded Tax payable by the Bank or any Participant or the Bank’s or any such Participant’s parent or holding company, as the case may be); or -34-
(iii) impose on the Bank or any Participant or the Bank’ s or any such Participant’s parent or holding company, as the case may be, any other condition, cost or expense affecting this Agreement, the respective Bank Notes or the Fee Agreement; and the result of any of the foregoing shall be to increase the cost to the Bank or such Participant or the Bank’s or any such Participant’s parent or holding company, as the case may be, related to maintaining this Agreement, or to reduce the amount of any sum received or receivable by the Bank or such Participant or the Bank’ s or any, such Participant ’s parent or holding company, as the case may be, under this Agreement, the respective Notes or the Fee Agreement (whether of principal, interest or any other amount) then, upon written request of the Bank or such Participant as set forth in clause (c) of this Section, the Commission shall promptly pay to the Bank or such Participant, as the case may be, such additional amount or amounts as will compensate the Bank or such Participant or the Bank’s or any such Participant’s parent or holding company, as the case may be, for such additional costs incurred or reduction suffered. Notwithstanding the foregoing, the amount that any Participant shall be entitled to receive under this Section 2.16(a) shall in no event exceed the amount that the Bank would have been entitled to receive under this Section 2.16(a) had such Participant’s funding obligation been a direct obligation of the Bank. (b) Capital or Liquidity Requirements . If the Bank or any Participant determines that any Change in Law affecting the Bank or such Participant or the Bank’ s or such Participant ’s parent or holding company, if any, regarding capital or liquidity requirements, has or would have the effect of reducing the rate of return on the Bank ’s or such Participant’s or the Bank’s or such Participant’s parent or holding company holding, if any, as a consequence of this Agreement, the respective Notes or the Fee Agreement, or maintaining this Agreement, to a level below that which the Bank or such Participant or the Bank’s or such Participant’s parent or holding company could have achieved but for such Change in Law (taking into consideration the Bank’ s or such Participant’s policies and the policies of the Bank’ s or such Participant ’s parent or holding company with respect to capital adequacy or liquidity), then from time to time upon written request of the Bank or such Participant as set forth in clause (c) of this Secti on, the Commission shall promptly pay to the Bank or such Participant, as the case may be, such additional amount or amounts as will compensate the Bank or such Participant or the Bank’s or such Participant’s parent or holding company for any such reduction suffered. Notwithstanding the foregoing, the amount that any Participant shall be entitled to receive under this Section 2.16(b) shall in no event exceed the amount that the Bank would have been entitled to receive under this Section 2.16(b) had such Participant’s funding obligation been a direct obligation of the Bank. (c) Certificates for Reimbursement. A certificate of the Bank or a Participant setting forth the amount or amounts necessary to compensate the Bank or any such Participant or the Bank’s or any such Participant ’s parent or holding company, as the case may be, as specified in paragraph (a) or (b) of this Section and delivered to the Commission, shall be conclusive absent manifest error. The Commission shall pay the Bank or any such Participant, as the case may be, the amount shown as due on any such certificate within thirty (30) days after receipt thereof. (d) Delay in Requests. Failure or delay on the part of the Bank or any such Participant to demand compensation pursuant to this Section shall not constitute a waiver of the Bank’s or any such Participant’s right to demand such compensation; provided that the Commission shall not be -35-
required to compensate the Bank or any such Participant pursuant to this Section for any increased costs incurred or reductions suffered more than one hundred eighty (180) days prior to the date that the Bank or any such Participant, as the case may be, notifies the Commission of the Change in Law giving rise to such increased costs or reductions, and of the Bank’s or any such Participant’s intention to claim compensation therefor (except that ( i) if the Change in Law giving rise to such increased costs or reductions is retroactive, then the 180- day period referred to above shall be extended to include the period of retroactive effect thereof and (i i) if the Bank or any such Participant had no actual knowledge of the action resulting in such increased costs as of the date six months prior to the date of notice to the Commission, then the six- month period referred to above will not apply). As of the Closing Date, the Bank has no knowledge of any enacted, adopted or issued Change in Law that would result in the imposition of increased costs pursuant to this Section 2.16.
(e) Survival. Without prejudice to the survival of any other agreement of the Commission hereunder, the agreements and obligations of the Commission contained in this Section shall survive the termination of this Agreement and the payment in full of the respective Notes and the obligations of the Commission thereunder and hereunder.

Section 2.17. Margin Regulations. No portion of the proceeds of any Loan shall be used by the Commission for the purpose of “purchasing” or “carrying” any margin stock or used in any manner which might cause the borrowing or the application of such proceeds to violate Regulation U, Regulation T, or Regulation X of the Board of Governors of the Federal Reserve System or any other regulation of said Board of Governors or to violate the Securities Exchange Act of 1934, as amended, in each case as in effect on the date or dates of such Loan and such use of proceeds.

Section 2.18. Security of Obligations . Notwithstanding any other provision of this Agreement or any other Basic Document to the contrary, all obligations to the Bank under this Agreement, including, without limitation, the Note s, are limited obligations of the Commission payable solely from the Available Water Enterprise Revenues or Available Power Enterprise Revenues, as applicable, as set forth in Section 5.1(p) hereof.

RTICLE THREE

CONDITIONS PRECEDENT
Section 3.1. Conditions Precedent to Effectiveness . As conditions precedent to the effectiveness of this Agreement , each of the following conditions precedent shall have been fulfilled to the satisfaction of the Bank and its counsel:
(a) Opinions. As it relates to the Water System and the Power System, distinctly, the Bank shall have received an opinion of the City Attorney of the City dated the Closing Date and addressed to the Bank (or on which the Bank may rely) to the effect that (A) the Commission is duly organized and validly existing as a commission of the City pursuant to the Charter with full legal power and authority to execute this Agreement, the -36-
Fee Agreement, the Notes, and the other Basic Documents to which it is a party and to issue the Notes; (B) this Agreement, the Fee Agreement, the Note s, and the other Basic Documents to which it is a party are valid and binding agreements of the Commission enforceable against the Commission in accordance with their respective terms, subject to bankruptcy, insolvency, moratorium or other laws affecting cr editors’ rights, to general principles of equity and to limitations on remedies against public agencies; (C) no authorization, approval, consent or order of any agency or body having jurisdiction over the Commission is required in connection with the issuance of the Notes which has not been obtained; (D) the pledge of Available Water Enterprise Revenues securing Water Obligations and the pledge of Available Power Enterprise Revenues securing Power Obligations is valid , binding and enforceable ; (E) the issuance of the Notes and the execution, delivery and performance of this Agreement, the Fee Agreement, the Notes, and the other Basic Documents to which it is a party do not conflict with any material law or agreements to which the Commission is a party, or cause a default under any material documents to which the Commission is a party; and ( F) no litigation is pending or, to the best knowledge of the Commission, threatened against the Commission threatening its existence or power, its ability to issue the Notes or to enter into and perform its obligations under this Agreement, the Fee Agreement, the Notes, and the ot her Basic Documents to which it is a party, or in which a final adverse decision could materially adversely affect the business, operations or financial condition of the Commission, each such opinion (or, in lieu thereon a reliance letter) to be addressed to the Bank, dated the Closing Date and in form and substance satisfactory to the Bank.
(b) Documents. The Bank shall have received executed copies (with originals to promptly follow after the Closing Date) of this Agreement, the Fee Agreement and the Notes, and certified copies of the other Basic Documents , including all amendments and supplements, if any, to the foregoing, certified by the Secretary of the Commission or the Board, as applicable, as true, correct and complete copies thereof and being in full force and effect on and as of the Closing Date.
(c) Defaults; Representations and Warranties . As it relates to the Water System and the Power System, separately, on and as of the Closing Date hereof, ( i) no Default or Event of Default hereunder and no default or event of default under any of the other Basic Documents shall have occurred and be continuing or would occur upon the issuance of the Notes or the making of any Loans hereunder and (ii) the representations of the Commission set forth in Article Four (as it relates to the Water System and the Po wer System, separately), hereof and in each of the other Basic Documents shall be true and correct in all material respects on and as of the Closing Date with the same force and effect as if made on and as of such date.
(d) No Litigation. As it relates to the Water System and the Power System, separately, n o action, suit, investigation or proceeding shall be pending or, to the knowledge of the Commission, threatened ( i) in connection with the Notes or the other Basic Documents or any transactions contemplated thereby or hereby or (i i) against or affecting the Commission, the result of which could have a material adverse effect on the business, operations or condition (financial or otherwise) of the Commission or its ability -37-
to perform its obligations hereunder or under the Fee Agreement, the Notes or the other Basic Documents to which it is a party.
(e) No Material Adverse Change . As it relates to the Water System and the Power System, separately, since the date of the Commission’s most recent audited financial statements, (i) no material adverse change shall have occurred in the status of the business, operations or condition (financial or otherwise) of the Commission or its ability to perform its obligations hereunder or under the Fee Agreement, the Notes or the other Basic Documents to which it is a party and (i i) no law, regulation, ruling or other action (or interpretation or administration thereof) of the United States, the State of California or any political subdivision or authority therein or thereof is in effect or has occurred, the effect of which would be to prevent the Commission from ful filling its obligations hereunder or under the Notes, this Agreement, the Fee Agreement or the other Basic Documents to which it is a party.
(f) Certificate. As it relates to the Water System and the Power System, separately, t he Bank shall have received ( i) certified copies of all proceedings of the Commission authorizing the execution, delivery and performance of this Agreement, the Fee Agreement, the Notes and the other Basic Documents to which it is a party and the transactions contemplated hereby and thereby, (i i) a certificate or certificates of one or more Authorized Representatives dated the Closing Date certifying to the accuracy of t he statements made in Sections 3.1(c), (d) and (e) hereof and further certifying the name, incumbency and signature of each individual authorized to sign this Agreement, the Fee Agreement, the Note s, and the other documents or certificates to be delivered by the Commission pursuant hereto or thereto and further certifying that the conditions precedent set forth in this Section 3.1 have been satisfied.
(g) Payment of Fees. The Bank shall have received all fees and expenses due and payable to the Bank or its legal counsel pursuant to the Fee Agreement shall be paid, or alternative arrangements satisfactory therefor have been made with the Bank. (h) Financial Statements . As it relates to the Water System and the Power System, separately, t he Bank shall have received the audited financial statements of the Commission for the Fiscal Year ended June 30, 2024, and internally prepared quarterly budget reports of the Commission for the most recent fiscal quarter end, and a copy of the current quarterly budgeting status report, if not previously provided. (i) Investment, Policy and Guidelines. The Bank shall have received a copy of the current Investment Policy and Guidelines and other permitted investments, certified as of a recent date by an Authorized Representative, which shall be satisfactory to the Bank. (k) Ratings. The Bank shall have received written confirmation that the underlying long- term credit ratings assigned to the Commission ’s unenhanced Water Senior Debt are at least “[___]” by Moody’s and “[___]” by S&P, and that the underlying long-term credit ratings assigned to the Commission’s unenhanced Power Senior Debt are rated at least “[____]” by Fitch and “[___]” by S&P.
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(l) Other Matters . The Bank shall have received such other statements, certificates, agreements, documents and information with respect to the Commission and matters contemplated by this Agreement as the Bank may request.

In addition, as it relates to the Water System and the Power System, separately, (A) the Bank shall have made a reasonable determination that, as of the Closing Date, no law, regulation, ruling or other action of the United States of America, the State or any other Governmental Authority or any political subdivision or authority therein or thereof shall be in effect or shall have occurred, the effect of which would be to prevent the Commission or the Bank from fulfilling their respective obligations under this Agreement and the Basic Documents and (B) no material adverse change in the financial condition of the Commission or in the laws, rules, guidelines, or regulations (or their interpretation or administration) currently in effect and applicable to the parties hereto, the Commission and the transactions contemplated hereby, as reasonably determined by the Bank, shall have occurred. The execution and delivery of this Agreement by the Bank shall signify its having made such determination, as it relates to t he Water System and the Power System, separately.

Section 3.2. No Note Rating; DTC ; Offering Document . The Notes shall not be (i) assigned a s pecific rating by any Rating Agency, (ii) registered with The Deposit ory Trust Company or any other securities depository, (iii) issued pursuant to any type of official statement, private placement memorandum or other offering document or (iv) placed or offered by a broker-dealer in the capacity of an underwriter or a placement agent.

Section 3.3. Borrowings During the Revolving Credit Period. The obligation of the Bank to make a Loan on the occasion of any Borrowing or to convert any Tax-exempt Loan to a Taxable Loan for a particular System on or prior to the Termination Date is subject to the satisfaction of the following conditions, as it relates to the Water System and the Power System, separately:
(a) receipt by the Bank of a Notice of Borrowing (or appropriate notice regarding a conversion) as required by Section 2.2 hereof; (b) immediately after such Borrowing or conversion the aggregate outstanding principal amount of the Loans will not exceed the amount of the applicable Commitment; (c) immediately before and as a result of giving effect to such Borrowing or conversion, no Default or Event of Default for the System to which the Loan relates (or for both Systems) shall have occurred and be continuing; and (d) the representations and warranties of the Commission (except to the extent the same expressly relate to an earlier date, then such representation or warranty shall be true and correct, in all material respects (or all respects to the extent qualified by materiality or similar concepts), as of such earlier date and except that the representations contained in Section 4.6 of the Agreement shall be deemed to refer to the most recent financial statements of the Commission delivered to the Bank pursuant to Section 5.1 hereof) (and if such representations and warranties relate to a System, then only to the extent they relate to the particular System for which the Loan is to be made, continued or converted) -39-
contained in this Agreement shall be true in all material respects on and as of the date of such Borrowing or conversion.

As it relates to the Water System and the Power System, separately, each Borrowing or conversion hereunder shall be deemed to be a representation and warranty by the Commission on the date of such Borrowing as to the facts specified in clauses (b), (c) and (d) of this Section.

Section 3.4. Each Tax-Exempt Loan Borrowing. The obligation of the Bank to make each Tax-exempt Loan with respect to each System hereunder is subject to the satisfaction of the following conditions, as it relates to the Water System and the Power System, separately:
(a) all conditions set forth in Section 3.3 hereof shall be satisfied prior to the making of such Loan;
(b) the Bank shall have received an executed opinion of Note Counsel addressed to the Commission and with a reliance letter to the Bank , in a form acceptable to the Bank and its counsel , to the effect that the interest on all the Tax -exempt Loans, as evidenced by the Tax-Exempt Note, relating to the applicable System is excludable from gross income for federal income tax purposes; and
(c) the Commission shall have executed, and the Bank shall have received an executed copy of, the tax certificate related to the applicable Tax -Exempt Loans, as evidenced by the Tax -exempt Notes, and such other forms or other related documents as may be required in connection with such tax certificate or reasonably requested by the Bank and its counsel.

RTICLE FOUR

REPRESENTATIONS AND WARRANTIES
As it relates to the Water System, the Commission makes the representations and warranties set forth below to each Noteholder of the Water System Notes, and, as it relates to the Power System, the Commission makes the representations and warranties set forth below to each Noteholder of the Power System Notes:

Section 4.1. Organization, Powers, Etc. The Commission (a) is a commission of the City and County of San Francisco organized and existing under the Charter and (b) has the full legal right, power and authority to ( i) issue the Notes in accordance with the applicable Resolution; (ii) to own and operate the Water Enterprise and Power Enterprise and control its properties and to carry on its business as now conducted and as contemplated to be conducted in connection with the issuance of the Notes, and the execution, delivery and performance of its obligations under this Agreement, the Fee Agreement, the Notes and the other Basic Documents to which it is a party, (iii) execute, deliver and perform its obligations under the Note s, the Fee Agreement, the other Basic Documents to which it is a party and this Agreement, and (iv) to provide for the security of the applicable Obligations hereunder pursuant to the Charter and the terms hereof ; and (c) has -40-
complied with all Laws in all matters related to such actions of the Commission as are contemplated by this Agreement, the Notes, the Fee Agreement and the other Basic Documents to which it is a party.

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

Section 4.3. Binding Obligations; Security for Water System Notes; Security for Power System Notes. (a) This Agreement, the Fee Agreement, the Note s and each of the other Basic Documents to which the Commission is a party, when executed by the parties hereto and thereto, will be, valid and binding obligations of the Commission (assuming due authorization and execution by the other parties thereto) enf orceable against the Commission in accordance with their respective terms, except to the extent, if any, that the enforceability thereof may be limited by (i) any applicable bankruptcy, insolvency reorganization, moratorium or other similar law of the State or Federal government affecting the enforcement of creditors ’ rights heretofore or hereafter enacted, (i i) the fact that enforcement may also be subject to the exercise of judicial discretion in appropriate cases and (ii i) the limitations on legal remedies against public agencies of the State, if any.
(b) (i) (x) The Water System Notes and other Water Obligations are secured by a first Lien and charge on and pledge of , and payable from, the Available Water Enterprise Revenues, equally and ratably with, and on a parity with, all other Parity Debt (including any obligations under any credit or liquidity facility secured by and payable from Available Water Enterprise Revenues supporting such other series of commercial paper notes secured by and payable from Available Water Enterprise Revenues).
(y) There is no pledge of or Lien on Water Enterprise Revenues that ranks senior to Water Senior Debt. There is no pledge of or Lien on Available Water Enterprise Revenues that ranks senior to the Water System Notes, Water Obligations, or Parity Debt other than Water Senior Debt. (ii) (x) The Power System Notes and other Power Obligations are secured by a first Lien on and pledge of, and payable from, the Available Power Enterprise Revenues.

The only debt obligations secured by Power Net Revenues on a basis senior to the Power System Notes are the Senior Power Bonds issued in accordance with the Power Bonds Indenture.
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(y) There is no pledge of or Lien on Power Net Revenues that ranks senior to Power Senior Debt. There is no pledge of or Lien on Available Power Enterprise Revenues that ranks senior to the Power System Notes, Power Obligations or Parity Debt other than Power Senior Debt.

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

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

Section 4.6. Financial Condition. The audited financial statements of the Commission, as at and for the period ended June 30, 2024 (the “2024 Audited Financial Statements”), and all other financial statements of the Commission furnished to the Bank were prepared in accordance with GAAP applied on a consistent basis throughout the periods involved and are subject to certification by independent certified public accountants of recognized standing or by independent certified public accountants otherwise acceptable to the Bank . The 2024 Audited Financial Statements were prepared by Macias Gini O’Connell LLP . The audited financial statements of the Commission for fiscal year [2025] will be prepared by [Macias Gini O’Connell LLP] or similar qualified independent auditing firm . The data on which such financial statements and budget reports are based were true and correct . The 2024 Audited Financial Statements and the budget reports present fairly the financial position of the Commission as of the date they purport to represent and the revenues, expenses and changes in fund balances and in financial position for the periods then ended. Since June 30, 2024, no material adverse change has occurred in the business, operations or condition (financial or otherwise) of the Commission.

Section 4.7. Incorporation of Representations and Warranties . The representations and warranties of the Commission set forth in the Basic Documents are true and accurate in all material -42-
respects on the Closing Date, as fully as though made on the Closing Date . The Commission makes, as of the Closing Date, each of such representations and warranties to, and for the benefit of, the Bank, as if the same were set forth at length herein together with all applicable definitions thereto. No amendment, modification or termination of any such representations, warranties or definitions contained in the Basic Documents shall be effective to amend, modify or terminate the representations, warranties and definitions incorporated herein, by this reference, without the prior written consent of the Bank.

Section 4.8. Accuracy and Completeness of Information. All certificates, financial statements, documents and other reports furnished to the Bank by the Commission on or prior to the Closing Date in connection with the transactions contemplated hereby were, as of their respective dates and taken in the aggregat e, complete and correct in all material respects to the extent necessary to give the Bank true and accurate knowledge of the subject matter thereof and did not contain any untrue statement of a material fact and there are no facts that the Commission has not disclosed in writing to the Bank that, individually or in the aggregate, could materially impair the ability of the Commission to perform its obligations under the Notes, this Agreement, the Fee Agreement or the other Basic Documents.

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

Section 4.10. No Proposed Legal Changes. There is no amendment or, to the knowledge of the Commission, proposed amendment to the Constitution of the State, any State law or the Charter or any administrative interpretation of the Constitution of the State, any State law, or the Charter, or any judicial decision interpreting any of the foregoing, the effect of which could reasonably be expected to have a material adverse effect on the Commission ’s obligations under this Agreement, the Fee Agreement, the Notes or any of the other Basic Documents t o which the Commission is a party or the ability of the Commission to perform its obligations in connection herewith or therewith . To the best knowledge of the Commission after due inquiry, t here is no public vote or referendum pending, proposed or concluded, the results of which could reasonably be expected result in a material adverse effect on the Commission’s obligations under this Agreement, the Fee Agreement , the Notes, or any of the other Basic Documents to which it is a party or the ability of the Commission to perform its obligations in connection herewith or therewith or the enforceability or validity of this Agreement or any of the other Basic Documents.

Section 4.11. Compliance with Laws, Etc. The Commission is in compliance with all Laws applicable to it, non-compliance with which might have a material adverse effect on the security for the Notes and the obligations under this Agreement, the Fee Agreement, the Note s and the validity and enforceability of this Agreement and the other Basic Documents to which the Commission is a party . In addition, no benefit plan maintained by the Commission for its -43-
employees is subject to the provisions of ERISA, and the Commission is in compliance with all Laws in respect of each such benefit plan.

Section 4.12. Environmental Matters . In the ordinary course of its business, the Commission conducts an ongoing review of Environmental Laws on the business, operations and the condition of its property, in the course of which it identifies and evaluates associated liabilities and costs (incl uding, without limitation, any capital or operating expenditures required for clean-up or closure of properties presently or previously owned or operated, any capital or operating expenditures required to achieve or maintain compliance with environmental protection standards imposed by law or as a condition of any license, permit or contract, any related constraints on operating activities, including any periodic or permanent shutdown of any facility or reduction in the level of or change in the nature of operations conducted thereat and any actual or potential liabilities to third parties, including employees, and any related costs and expenses) .

On the basis of such review, the Commission does not believe that Environmental Laws are likely to have a material adverse effect on the ability of the Commission to make any payments in respect of the Notes or any of its obligations hereunder or under the Fee Agreement.

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

Section 4.14. Regulation U. The Commission is not engaged in the business of extending credit for the purpose of purchasing or carrying margin stock (within the meaning of Regulation U issued by the Board of Governors of the Federal Reserve System); and no proceeds of the Notes will be used to extend credit to others for the purpose of purchasing or carrying any margin stock.

Section 4.15. Liens. (i) This Agreement (as it relates to the Water System only) creates a valid lien and charge on and pledge of the Available Water Enterprise Revenues to provide security for the payment of the principal of and interest on the Water System Notes and the corresponding Water Obligations, and no filings, recordings, registrations or other actions are necessary to create or perfect such lien.
(ii) This Agreement (as it relates to the Power System only) creates a valid lien and charge on and pledge of the Available Power Enterprise Revenues to provide security for the payment of the principal of and interest on the Power System Notes and the and the corresponding Power Obligations, and no filings, recordings, registrations or other actions are necessary to create or perfect such lien.

Section 4.16. Sovereign Immunity. The Commission is not entitled to immunity from legal proceedings to enforce this Agreement, the Fee Agreement, the Notes or any other Basic Document to which the Commission is a party (including, without limitation, immunity from service of process or imm unity from jurisdiction of any court otherwise having jurisdiction) and is subject to claims and suits for damages in connection with its obligations under this Agreement, the Fee Agreement, the Notes or any other Basic Document to which the Commission is a party. -44-
Section 4.17. City Business Days. Attached to this Agreement as Exhibit D is a complete and accurate list of the days that are legal holidays of the City for 2025, as well as any other day the City is authorized by law to be closed for official business during 2025.

Section 4.18. Usury. The terms of this Agreement and the Basic Documents to which the Commission is a party regarding the calculation and payment of interest and fees do not violate any applicable usury laws.

Section 4.19. Insurance. As of the Closing Date, the Commission maintains such insurance, including self-insurance, as is required by Section 5.1(k) hereof.

Section 4.20. ERISA. The Commission does not maintain or contribute to, and has not maintained or contributed to, any Employee Plan that is subject to Title IV of ERISA.

Section 4.21. Sanctions Concerns and Anti-Corruption Laws. (i) Neither the Commission nor to the knowledge of the Commission, any of its respective directors, officers, employees or Affiliates, or (ii) any agent or representative of the Commission that will act in any capacity in connection with or benefit from this Agreement or the Notes , (A) is a Sanctioned Person or currently the subject or target of any Sanctions, (B) has its assets located in a Sanctioned Country, (C) is under administrative, civil or criminal investigation for an alleged violation of, or received notice from or made a voluntary disclosure to any governmental entity re garding a possible violation of, Anti-Corruption Laws, Anti-Money Laundering Laws or Sanctions by a governmental authority that enforces Sanctions or any Anti-Corruption Laws or Anti-Money Laundering Laws, or (D) directly or indirectly derives revenues from investments in, or transactions with, Sanctioned Persons.
(ii) The Commission has implemented and maintains in effect policies and procedures designed to ensure compliance by the Commission and its respective directors, officers, employees, agents and a ffiliates with all Anti- Corruption Laws, Anti -Money Laundering Laws and applicable Sanctions.
(iii) The Commission , and to the knowledge of the Commission , director, officer, employee, agent and affiliate of the Commission and each such Subsidiary, is in compliance with all Anti-Corruption Laws, Anti-Money Laundering Laws in all respects and applicable Sanctions. (iv) No proceeds of any Loans have been used, directly or indirectly, by the Commission, or any of its respective directors, officers, employees and agents in violation of Section 5.1( x) hereof.

Section 4.22. Swap Contracts. (i) The Commission has not entered into any Swap Contract secured by Water Enterprise Revenues or Power Enterprise Revenues, as applicable, (a) wherein any termination payment thereunder is senior to or on a parity with the payment of the Notes or the Obligations or (b) which requires the Commission to post cash collateral to secure its obligations thereunder.
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ARTICLE FIVE

COVENANTS
Section 5.1. Affirmative Covenants . As it relates to the Water System and the Power System, separately, as long as this Agreement is in effect, and until all amounts payable hereunder, including under the Notes, are indefeasibly paid in full, the Commission will perform and observe the covenants set forth below:
(a) Accounting and Reports. As it relates to the Water System and the Power System, separately, t he Commission will maintain a standard system of accounting in accordance with GAAP consistently applied and furnish to the Bank:
(i) as soon as practicable and, in any event, within, two hundred forty (240) days after the end of each Fiscal Year of the Commission, a balance sheet of the Commission as at the end of such Fiscal Year and statements of income, changes in fund balances and cash flows for the Fiscal Year then ended, all in reasonable detail prepared in accordance with GAAP consistently applied, and including therein calculations supporting the Commission’ s compliance with Section 5.1(s)hereof; and accompanied by (A) a rep ort and opinion of the Commission’s independent accountants (who shall be of recognized standing or an independent certified public accountant otherwise acceptable to the Bank) which report and opinion shall have been prepared in accordance with generally accepted auditing standards and (B ) a compliance certificate, substantially in the form of Exhibit C hereto, signed by an Authorized Representative stating that no Event of Default or Default has occurred, or if such Event of Default or Default has occurred, specifying the nature of such Event of Default or Default, the period of its existence, the nature and status thereof and any remedial steps taken or proposed to correct such Event of Default or Default;
(ii) as soon as practicable but, in any event, within ten (10) days after the issuance thereof, copies of any prospectus, official statement, offering circular, placement memorandum or similar document, and any supplements thereto and updates and amendments thereof (including any filings made pursuant to Rule 15c2-12 under the Securities Act of 1933, as amended), that the Commission makes available in connection with the offering for sale of any bonds or notes of which it is the issuer and copies of any other financial reports or other written information distribute d gener ally to holders of bonds or notes issued by the Commission;
(iii) within sixty (60) days after the first day of the Fiscal Year, a copy of its Annual Budget for such Fiscal Year and such additional period as may be covered by such Annual Budget, which Annual Budget shall include all obligations due hereunder, the Fee Agreement and in connection with Notes; -46-
(iv) as soon as practicable but, in any event, within ten (10) days after the adoption of any resolution authorizing the issuance of any Parity Debt, notice of the proposed issuance of such Parity Debt and a copy of such resolution; and (v) with reasonable promptness, such other data regarding the financial position or business of the Commission or its property as the Bank may reasonably request from time to time.

As and to the extent that any financial statement, audit report or other filing described in Section 5.1(a) hereof has been filed in accordance with the terms thereof with any nationally recognized municipal securities information repository and with the Municipal Securities Rulemaking Board, the requirements of Section 5.1(a) hereof with respect thereto shall be deemed satisfied.
(b) Access to Records. As it relates to the Water System and the Power System, separately, at any reasonable time and from time to time, during normal business hours and on at least five (5) Business Days’ notice, the Commission will permit the Bank or any of its agents or representatives to visit and inspect any of the properties of the Commission and the other assets of the Commission, to examine the books of account of the Commission (and to make copies thereof and extracts therefrom), and to discuss the affairs, finances and accounts of the Commission with, and to be advised as to the same by, its officers, all at such reasonable times and intervals as the Bank may reasonably request. (c) Compliance with Documents and Other Debt Documents; Operation and Maintenance of Water Enterprise.
(A) (i) The Commission will perform and comply with each covenant set forth in the Water Basic Documents, the Water Bonds Indenture and in any other authorizing document that shall be entered into by the Commission and created subsequent to the Closing Date with respect to the Water System Notes, the Water Bonds Indenture or any Parity Debt (of the Water System) including, without limitation, each line of credit, letter of credit, bond insurance policy, surety bond or other form of credit or liquidity enhancement t he Commission may provide in conjunction with the issuance of any Water Enterprise Debt (the foregoing documents and the Water Bonds Indenture (exclusive of the Water Basic Documents) being referred to herein as “ Other Water Debt Documents”). By the terms of this Agreement (as it relates to the Water Obligations) , the Bank shall be a third party beneficiary of the covenants set forth in each of the Water Basic Documents, including each amendment and supplement to the foregoing, and in each Other Water Debt Document, and each such covenant, together with the related definitions of terms contained therein, is hereby incorporated by reference herein with the same effect as if it were set forth herein in its entirety . Except as otherwise set forth in paragraph (ii) below and in Section 5.2(a) (as it relates to the Water System) hereof, the Commission will not amend, supplement or otherwise modify (or permit any of the foregoing), or request or agree to any consent or waiver under, or effect or permit the cancellation, acceleration or termination of, or release -47-
or permit the release of any collateral held under any of the Water Basic Documents or any Other Water Debt Document in any manner without the prior written consent of the Bank, and the Commission will take, or cause to be taken, all such actions as may be reasonably requested by the Bank to strictly enforce the obligations of the other parties to any of the Water Basic Documents and any Other Water Debt Documents, as well as each of the covenants set forth therein . The Commission shall give prior written notice to the Bank of any action referred to in this subparagraph (A)(i).
(ii) The Commission covenants that it will maintain and preserve the Water Enterprise in good repair and working order at all times from the Water Enterprise Revenues available for such purposes, in conformity with standards customarily followed for municipal water systems of like size and character . The Commission will from time to time make all necessary and proper repairs, renewals, replacements and substitutions to the properties of the Water Enterprise, so that at all times business carried on in connection with the Water Enterprise shall and can be properly and advantageously conducted in an efficient manner and at reasonable cost, and will operate the Water Enterprise in an efficient and economical manner and shall not commit or allow any waste with respect to the Water Enterprise.
(B) (i) The Commission will perform and comply with each covenant set forth in the Power Basic Documents, the Power Bonds Indenture and in any other authorizing document that shall be entered into by the Commission and created subsequent to the Closing Date with respect to the Power System Notes, the Power Bonds Indenture or any Parity Debt (of the Power System) including, without limitation, each line of credit, letter of credit, bond insurance policy, surety bond or other form of credit or liquidity enhancement the Commission may provide in conjunction with the issuance of any Power Enterprise Debt (the foregoing documents and the Power Bonds Indenture (exclusive of the Power Basic Documents) being referred to herein as “Other Power Debt Documents”). By the terms of this Agreement (as it relates to the Power Obligations), the Bank shall be a third party beneficiary of the covenants set forth in each of the Power Basic Documents, including each amendment and supplement to the foregoing, and in each Other Power Debt Document, and each such covenant, together with the related definitions of terms contained therein, is hereby incorporated by reference herein with the same effect as if it were set forth herein in its entirety. Except as otherwise set forth in paragraph (ii) below and in Section 5.2(a) (as it relates to the Power System) hereof, the Commission will not amend, supplement or otherwise modify (or permit any of the foregoing), or request or agree to any consent or waiver under, or effect or permit the cancellation, acceleration or termination of, or release or permit the release of any collateral held under any of the Power Basic Documents or any Other Power Debt Document in any manner without the prior written consent of the Bank, and the Commission will take, or cause to be taken, all such actions as may be reasonably requested by the Bank to strictly enforce the obligations of the other parties to any of the Power Basic Documents and any Other Power Debt -48-
Documents, as well as each of the covenants set forth therein. The Commission shall give prior written notice to the Bank of any action referred to in this subparagraph (B)(i).
(ii) The Commission covenants that it will maintain and preserve the Power Enterprise in good repair and working order at all times from the Power Enterprise Revenues available for such purposes, in conformity with standards customarily followed for municipal water and power systems of like size and character. The Commission will from time to time make all necessary and proper repairs, renewals, replacements and substitutions to the properties of the Power Enterprise, so that at all times business carried on in connection with the Power Enterprise shall and can be properly and advantageously conducted in an efficient manner and at reasonable cost, and will operate the Power Enterprise in an efficient and economical manner and shall not commit or allow any waste with respect to the Power Enterprise.
(d) Defaults. As it relates to the Water System and the Power System, separately, the Commission will notify the Bank of any Default or Event of Default of which the Commission has knowledge, as soon as possible and, in any event, within three (3) Business Days of acquiring knowledge thereof, setting forth the details of such Default or Event of Default and the action which the Commission has taken and proposes to take with respect thereto.
(e) Compliance with Laws . As it relates to the Water System and the Power System, separately, t he Commission will comply in all material respects with all Laws binding upon or applicable to the Commission (including Environmental Laws) and material to this Agreement or any other Basic Documents. (f) Use of Proceeds of the Notes . As it relates to the Water System and the Power System, separately, the Commission will use the proceeds of the Loans only for the purposes set forth in the applicable Basic Documents and for such other purpose or purposes as may be approved by the Bank in writing. In addition, the Commission will not use, nor permit the use of, the proceeds of the Loans to be applied in violation of Regulation U issued by the Board of Governors of the Federal Reserve System. (g) Litigation Notice. As it relates to the Water System and the Power System, separately, the Commission covenants that it will promptly give notice to the Bank of any action, suit or proceeding actually known to it at law or in equity or by or before any court, governmental instrumentality or other agency which, if adversely determined, would materially impair the ability of the Commission to perform its obligations under this Agreement or the other Basic Documents.
(h) Investment Policy and Guidelines. The Commission shall promptly notify the Bank in writing, not less than thirty (30) days after the Commission ’s formal consideration thereof, of any change proposed to the I nvestment Policy and Guidelines, -49-
which proposed change would increase the types of investments permitted thereby as of the Closing Date; and which notice shall also confirm compliance with State law. (i) Further Assurances . As it relates to the Water System and the Power System, separately, t he Commission shall execute, acknowledge where appropriate, and deliver, and cause to be executed, acknowledged where appropriate, and delivered, from time to time, promptly at the request of the Bank, all such instruments and documents as are usual and customary or advisable to carry out the intent and purpose of this Agreement and the other Basic Documents.
(j) Notices. As it relates to the Water System and the Power System, separately, the Commission will promptly furnish, or cause to be furnished, to the Bank (i) notice of the occurrence of any “event of default” under any Basic Document to which it is a party or any other document pursuant to which Water Enterprise Debt or Power Enterprise Debt, as applicable, is issued, incurred, enhanced or purchased, (i i) copies of any communications received from any taxing authority, securities regulatory authority with respect to the Notes, the transactions contemplated hereby, or any other Water Enterprise Debt or Power Enterprise Debt, as applicable, which discloses the occurrence of an event or the existence of a condition which could materially impair the ability of the Commission to perform its respective obligations hereunder, under the Notes, under the Fee Agreement or under the other Basic Documents and which are not restricted or prohibited from being shared under the law or the direction of a court of compet ent jurisdiction or other Governmental Authority, ( iii) notice of any proposed amendment to the Resolutions or any other Basic Document and copies of all such amendments promptly following the execution thereof and ( iv) notice of any change in any material fact or circumstance represented or warranted in this Agreement or in any of the other Basic Documents which could materially impair the ability of the Commission to perform its respective obligations under the this Agreement, the Fee Agreement, the Notes or the other Basic Documents.
(k) Maintenance of Insurance.
(i) As it relates to the Water System and the Power System, separately, the Commission shall maintain, or cause to be maintained, at all times, insurance on and with respect to its properties with responsible and reputable insurance companies; provided, however, that the Commission may maintain self -insurance general liability on its properties not covered by the PEPIP policy, for worker ’s compensation and vehicle liability and, with the consent of the Bank, such other self-insurance as it deems prudent. Such insurance shall include casualty, liability and workers’ compensation and be in amounts and with deductibles and exclusions customary and reasonable for governmental entities of similar size and with similar operations as the Commission.
(ii) The Commission shall, upon request of the Bank, furnish evidence of such insurance to the Bank. The Commission shall also procure and maintain at all times adequate fidelity insurance or bonds on all officers and employees -50-
handling or responsible for any Water Enterprise Revenues , Power Enterprise Revenues, or funds of the Water Enterprise or Power Enterprise, as applicable, such insurance or bond to be in an aggregate amount at least equal to the maximum amount of such Water Enterprise Revenues or Power Enterprise Revenues , as applicable, or funds at any one time in the custody of all such officers and employees or in the amount of one million dollars ($1,000,000), whichever is less.

The insurance described above may be provided as part of any comprehensive fidelity and other insurance and not separately for the Water Enterprise or Power Enterprise, as applicable.
(l) Alternate Facility. As it relates to the Water System and the Power System, separately, the Commission agrees that any termination of this Agreement as a result of the provision of any Alternate Facility will require, as a condition thereto, that the Commission provide funds on the date of such termination, which funds will be sufficient to insure the payment of all respective amounts due to the Bank hereunder including, without limitation, the amounts due with respect to the Notes together, in each c ase, with accrued but unpaid interest thereon. As it relates to the Water System and the Power System, separately, on the date of such termination, the Commission shall pay to the Bank an amount equal to the outstanding principal amount of any and all other obligations due and owing hereunder. (m) Preservation of Security. As it relates to the Water System and the Power System, separately, the Commission shall take any and all actions necessary or reasonably requested by the Bank to maintain the security pledged in favor of the Note s as described in Section 5.1(p) hereof.
(n) City Business Days. During the term of this Agreement, upon learning of any change in the legal holidays of the City or the day or days that the City is authorized by law to be closed for official business, as initially listed on Exhibit D attached hereto, the Commission shall promptly send the Bank written notice of such change(s), in the form of an updated complete list, which shall replace Exhibit D attached hereto. (o) Preservation of Existence, Etc. (i) The Commission will not take any action pursuant to the Charter to accomplish a merger of the Water Enterprise with any other entity or enterprise, unless and until the Commission shall have provided a method for segregating the Water Enterprise Revenues f rom the revenues of said other entity or enterprise in a manner that will, or shall otherwise, preserve the lien upon the Available Water Enterprise Revenues for the payment of Water System Notes and the other Water Obligations of the Commission under this Agreement described in Section 5.1(p) (as it relates to the Water Obligations) hereof, and shall have obtained an opinion of counsel from a firm nationally recognized in the practice of tax-exempt financing that such merger will not, in and of itself, ( i) affect the exclusion from gross income of the interest on the applicable Tax-Exempt Notes, and (i i) cause the lien or security interest created by this Agreement (as it relates to the Water Obligations) to be no l onger valid as provided in Section 5.1(p) hereof in the event the Commission does effect such a merger, the Commission shall provide written notice thereof to the Bank and shall deliver a copy of the aforementioned opinion to the Bank.
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(ii) The Commission will not take any action pursuant to the Charter to accomplish a merger of the Power Enterprise with any other entity or enterprise, unless and until the Commission shall have provided a method for segregating the Power Enterprise Revenues from the revenues of said other entity or enterprise in a manner that will, or shall otherwise, preserve the lien upon the Available Power Enterprise Revenues for the payment of the Power System Notes and the other Power Obligations of the Commission under this Agreement and the Fee Agreement described in Section 5.1(p) (as it relates to the Power Obligations) hereof, and shall have obtained an opinion of counsel from a firm nationally recognized in the practice of tax- exempt financing that such merger will not, in and of itself, (i) affect the exclusion from gross income of the interest on the applicable Tax - exempt Notes, and (ii) cause the lien or security interest created by this Agreement (as it relates to the Power Obligations) to be no longer valid as provided in Section 5.1(p) hereof in the event the Commission does effect such a merger, the Commission shall provide written notice thereof to the Bank and shall deliver a copy of the aforementioned opinion to the Bank.
(p) Pledge of Available Revenues.
(i) The Water System Notes and Water Obligations are revenue obligations and are not secured by the taxing power of the Commission and shall be payable as to both principal and interest from, and shall be secured by a pledge (which pledge shall be effected in the manner and to the extent hereinafter provided) of and charge on , the Available Water Enterprise Revenues . The Available Water Enterprise Revenues constitute a trust fund for the security and payment of the interest on and principal of the Water System Notes and all other Water Obligations of the Commission relating to such notes thereunder and under this Agreement. The Commission hereby pledges and grants a Lien and charge on and security interest in the Available Water Enterprise Revenues for the payment of the Water System Notes and all other Water O bligations of the Commission relating to such notes thereunder and under this Agreement without priority or distinction of one over the other . The pledge of the Available Water Enterprise Revenues herein made shall be irrevocable until this Agreement has been terminated and all of the principal and interest owed under the Water System Notes has been paid and retired and any related Water Obligations of the Commission have been satisfied . The Commission will not issue Debt secured by or payable from the Available Water Enterprise Revenues on a basis that is senior to the Water System Notes or Water Obligations, other than Water Senior Debt. (ii) The Power System Notes and Power Obligations are revenue obligations and are not secured by the taxing power of the Commission and shall be payable as to both principal and interest from, and shall be secured by a pledge (which pledge shall be effected in the manner and to the extent hereinafter provided) of and charge on , the Available Power Enterprise Revenues . The Available Power Enterprise Revenues constitute a trust fund for the security and payment of the interest on and principal of the Powe r System Notes and all other Power Obligations of the Commission relating to such notes thereunder and under -52-
this Agreement. The Commission hereby pledges and grants a Lien and charge on and security interest in t he Available Power Enterprise Revenues for the payment of the Power System Notes and all other Power O bligations of the Commission relating to such notes thereunder and under this Agreement without priority or distinction of one over the other. The pledge of the Available Power Enterprise Revenues herein made shall be irrevocable until this Agreement has been terminated and all of the principal and interest owed under the Power System Notes has been paid and retired and any related Power O bligations of the Commission have been satisfied. The Commission will not issue Debt secured by or payable from the Available Power Enterprise Revenues on a basis that is senior to the Power System Notes or Power Obligations other than Power Senior Debt. (q) Payment of Taxes, Etc. The Commission will pay and discharge, or cause to be paid and discharged, all taxes, assessments and other governmental charges which may hereafter be lawfully imposed upon the Commission on account of the Water Enterprise or Power Enterprise, as applicable, or any portion thereof and which, if unpaid, might impair the security of the Notes or the obligations of the Commission under this Agreement, or the Fee Agreement when the same shall become due, but nothing herein contained shall require the Commission to pay any such tax, assessment or charge so long as it shall in good faith contest the validity thereof. The Commission will duly observe and comply with all valid material requirements of any governmental authority relative to the Water Enterprise or Power Enterprise or any part thereof. (r) Notice of Rating Change. As it relates to the Water System and the Power System, the Commission shall use its best efforts to notify the Bank as soon as practicable of any suspension, reduction or withdrawal in the senior long- term rating of any Water Senior Debt or Power Senior Debt, respectively.
(s) Amounts of Rates and Charges (Water Enterprise Debt). The Commission covenants to establish, maintain and collect rates and charges with respect to the Water Enterprise sufficient (after giving effect to the expected receipt of refinancing proceeds from the sale of Water Senior Debt) to pay the Water System Notes and the other Water Obligations, the Parity Debt, and all other obligations secured by or payable from Water Enterprise Revenues (including, without limitation, all current operation and maintenance costs and amounts due and owing hereunder and under the Parity Credit Agreements). (t) Amounts of Rates and Charges ( Water Senior Debt ). (i) Prior to the Amendment Effective Date:
(A) The Commission covenants to at all time s establish, fix, prescribe and collect rates, fees and charges in connection with the water services and facilities furnished by the Water Enterprise so as to yield Water Enterprise Revenues at least sufficient, after making reasonable allowances for contingencies and error in the estimates (for avoidance of doubt , calculated on a cash basis and -53-
not budgetary basis) to pay the following amounts:
(1) The interest on and principal of the Water Senior Debt as they become due and payable (but not including any interest moneys for the payment of which have been deposited in the trust for the payment of interest from the proceeds of any Water Senior Debt or from any other source).
(2) All other payments required for compliance with the terms of the Water Bonds Indenture and of any Supplemental Indenture (as defined in the Water Bonds Indenture) providing for the issuance of additional Series of Senior Water Bonds pursuant to Article III of the Water Bonds Indenture and of any Subordinated Water Bonds Indenture. (3) All other payments to meet any other obligations of the Commission which are charges, liens or encumbrances upon, or payable from, the Water Enterprise Revenues.
(4) All current Water Operation and Maintenance Costs of the Enterprise (but not including such Water Operation and Maintenance Costs of the Enterprise as are scheduled to be paid by the Commission from moneys other than Water Enterprise Revenues, such moneys to be clearly available for such purpose).
(B) In addition to the requirements of the foregoing subsection (A), rates, fees and charges in connection with the water , services and facilities furnished by the Water Enterprise shall be established, fixed, prescribed and collected so as to yield Water Net Revenues during the then immediately ensuing period of twelve months which (together with any fund balances of the Commission or the Water Enterprise which are available for payment of Water Debt Service and are not budgeted to be expended during such twelve months but excluding the Bond Reserve Fund (as defined in the Water Bonds Indenture)) (for avoidance of doubt, calculated on a cash basis and not budgetary basis), are equal to at least 1.25 times Water Annual Debt Service (but excluding any interest moneys for the payment of which have been deposited in trust for the payment of interest from the proceeds of any Water Senior Debt or from any other source) for said twelve-month period. (C) The Commission may make adjustments from time to time in such rates, fees and charges and may make such classification thereof as it deems necessary, but shall not reduce such rates, fees and charges below those then in effect unless the Water Enterprise Revenues resulting after such reduced rates are put into effect will at all times be sufficient to meet the requirements of this Section. (ii) On and after the Amendment Effective Date,
(A) To the fullest extent permitted by law, the
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Commission shall establish, fix and prescribe, prior to the commencement of each Fiscal Year, rates, fees and charges in connection with the water, services and facilities
furnished by the Water Enterprise so as to yield Water
Enterprise Revenues at least sufficient, after making
reasonable allowances for contingencies and error in the estimates (for avoidance of doubt, calculated on a budgetary basis and not cash basis) to pay the following amounts:
(1) The interest on and principal of the
Water Senior Debt as they become due and payable
(but not including any interest moneys for the
payment of which have been deposited in trust for the
payment of interest from the proceeds of any Water
Senior Debt or from any other source).
(2) All other payments required for
compliance with the terms of the Water Bonds
Indenture and of any Supplemental Indenture (as
defined in the Water Bonds Indenture) providing for
the issuance of additional Series of Senior Water
Bonds pursuant to Article III of the Water Bonds
Indenture and of any Subordinated Water Bonds
Indenture.
(3) All other payments to meet any other
obligations of the Commission which are charges,
liens or encumbrances upon, or payable from, the
Water Enterprise Revenues.
(4) All current Water Operation and
Maintenance Costs of the Enterprise (but not
including such Water Operation and Maintenance
Costs of the Enterprise as are scheduled to be paid by
the Commission from moneys other than Revenues,
such moneys to be clearly available for such
purpose).
(B) In addition to the requirements in subsection (A)
immediately above, to the fullest extent permitted by law, the Commission shall establish, fix and prescribe, prior to the commencement of each Fiscal Year, rates, fees and charges in connection wit h the water, services and facilities furnished by the Water Enterprise, which are reasonably expected to be at least sufficient to yield during such Fiscal Year Water Net Revenues (together with any fund balances of the Commission, which are -55-
available for Water Debt Service, but excluding the Bond Reserve Fund (as defined in the Water Bonds Indenture) equal to 1.25 times Water Annual Debt Service payable in such Fiscal Year.
(C) The Commission may make adjustments from time
to time in such rates, fees and charges and may make such classification thereof as it deems necessary, but shall not reduce such rates, fees and charges below those then in effect unless the Revenues resulting after such reduced rates are put into effect will at all times be sufficient to meet the requirements of this Section.
(D) So long as the Commission has complied with its obligations set forth in clause (A) and clause (B) of this Section

5.1(t)(ii), the failure to yield the amount of Water Enterprise Revenues as set forth in clause (A) of this Section 5.1( t)(ii), or the failure of Water Net Revenues to equal 1.25 times Water Annual Debt Service as set forth in clause (B) of this Section 5.1(t)(ii) at the end of a Fiscal Year, shall not constitute a default or an Event of Default hereunder so long as the Commission has complied with clause (A) and clause (B) of this Section 5.1( t)(ii) at the commencement of the succeeding Fiscal Year.
(u) Amounts of Rates and Charges (Power Enterprise). (i) The Commission shall fix, establish, maintain and collect rates and charges for electric power and energy and other services, facilities and commodities sold, furnished or supplied through the facilities of the Power Enterprise, which shall be fair and nondiscriminatory and adequate to provide the Commission with Power Enterprise Revenues in each Fiscal Year sufficient:
(a) To pay, to the extent not paid from other available moneys, (A) the Power Operation and Maintenance Expenses during such Fiscal Year, (B) Power Annual Debt Service on the Senior Power Bonds due and payable in such Fiscal Year, (C) the amounts, if any, required to be deposited into the Reserve Fund established pursuant to the Power Bonds Indenture during such Fiscal Year and (D) any and all other amounts the Commission is obligated to pay or set aside from the Power Enterprise Revenues by law or contrac t in such Fiscal Year, including, without limitation and without duplication, amounts payable to the Bank under this Agreement and the Notes and Parity Debt outstanding and/or expected to be outstanding during such Fiscal Year;
(b) To maintain a Power Bond Coverage Ratio of at least 1.0 to 1.0; and (c) Together with Power Available Funds, to maintain a Power Bond Coverage Ratio of at least 1.25 to 1.00;
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provided, however, the failure of the Commission to maintain the Power Bond Coverage Ratios in any Fiscal Year shall not constitute a default in the observance of the covenants of this subsection if:
(A) within 60 days after the Commission first determines that a Power Bond Coverage Ratio was not met or 60 days after the Commission’s receipt of audited financial statements showing that a Power Bond Coverage Ratio was not met (whichever is earlier), the Commission engages a Power Consulting Engineer to deliver a report to the Commission within 60 days after such engagement which includes recommendations as to how the Commission can increase Power Enterprise Revenues and/or reduce Power Operation and Maintenance Expenses so as to satisfy the Power Bond Coverage Ratios; and
(B) (1) within 120 days after receipt of the Power Consulting Engineer’s report the Commission implements the recommendations set forth in such report; or (2) the report states that the Power Enterprise cannot generate Power Enterprise Revenues and/or reduce Power Operation and Maintenance Expenses sufficient to enable the Commission to maintain the Power Bond Coverage Ratios while satisfying the other covenants set forth in the Power Bonds Indenture, and the Commission increases its Power Enterprise Reven ues (as defined in the Power Bonds Indenture) and/or reduces its Power Operation and Maintenance Expenses to the extent otherwise recommended in such report; or (3) the Commission is prevented from taking any such action by order of any court of competent jurisdiction.

Notwithstanding the foregoing, failure for two (2) consecutive Fiscal Years to maintain the Power Bond Coverage Ratios shall in all events constitute an Event of Default. (ii) The Commission covenants to establish, maintain and collect rates and charges with respect to the Power Enterprise sufficient (after giving effect to the expected receipt of refinancing proceeds from the sale of Power Senior Debt) to pay the Power System Notes and the other Parity Debt , Power Obligations, and all other obligations secured by or payable from Power Enterprise Revenues (including, without limitation, all amounts due and owing hereunder and under the Parity Credit Agreements). (v) Maintenance of Ratings. The Commission shall at all times cause any two Rating Agencies to maintain a long -term unenhanced debt rating on each of the Power Senior Debt and Water Senior Debt.
(w) Annual Budget. As it relates to the Water System and the Power System, separately, the Commission shall include in each Annual Budget of the Commission all amounts reasonably anticipated to be necessary to pay all Obligations, as applicable. If the amounts so budgeted are not adequate for the payment of the applicable Obligations, the Commission shall take such action as may be necessary to cause such Annual Budget to be amended, corrected or augmented so as to include therein the amounts required to be paid to the Bank during the course of the Fiscal Year to which such Annual Budget applies. -57-
(x) Anti-Corruption Laws and Sanctions. The Commission shall m aintain in effect and enforce policies and procedures designed to ensure compliance by the Commission and its respective directors, officers, employees and agents with all Anti- Corruption Laws, Anti-Money Laundering Laws and applicable Sanctions. (y) Other Facilities. As it relates to the Water System and the Power System, separately, in the event that the Commission shall enter into or otherwise consent to any Bank Agreement which such Bank Agreement provides such Person with different or more restrictive covenants, shorter amortization periods with respect to term outs, a higher maximum rate with respect to obligations under a Bank Agreement, different or additional events of default and/or greater rights and remedies than are provided to the Ba nk in this Agreement, the Commission shall provide the Bank with a copy of each such Bank Agreement and such different or more restrictive covenants, different or additional events of default and/or greater rights and remedies shall automatically be deemed to be incorporated into this Agreement and the Bank shall have the benefits of such different or more restrictive covenants, different or additional events of default and/or greater rights and remedies as if specifically set forth herein. The Commission shall promptly enter into an amendment to this Agreement to include different or more restrictive covenants, different or additional events of default and/or greater rights and remedies; provided that the Bank shall have and maintain the benefit of such different or more restrictive covenants, different or additional events of default and/or greater rights and remedies even if the Commission fails to provide such amendment.

Section 5.2. Negative Covenants. As it relates to the Water System and the Power System, separately, as long as this Agreement is in effect, and until all amounts payable hereunder, including under the Notes, are indefeasibly paid in full, the Commission shall not, unless the Bank shall otherwise consent in writing:
(a) Amendments. As it relates to the Water System and the Power System, separately, subject to Section 5.1(c) hereof, directly or indirectly amend, supplement or terminate any of the Basic Documents , the Water Bonds Indenture , or the Power Bonds Indenture, as applicable, except that the Commission may amend or modify, or permit to be amended or modified, any of the Basic Documents , the Water Bonds Indenture, or the Power Bonds Indenture, as applicable (as and to the extent the Commission’s participation is required for such purpose), in a manner (A) not relating to the duties, obligations or rights of the Bank, under this Agreement and (B) not having a material adverse effect on (x) the ability of the Commission to pay when due the principal of or interest on the applicable Notes and the applicable other Obligations or (y) the security, rights or remedies of the Bank hereunder or under any Basic Document , the Water Bonds Indenture, the Power Bonds Indenture, without the prior written consent of the Bank. The Commission agrees to deliver to the Bank copies of all such amendments, modification, supplements or other changes at least ten (10) Business Days prior to the effective date of any such amendment, modification, supplement or other change. The Bank shall, within five (5) Business Days, inform the Commission in writing if, in its reasonable discretion, such amendment, modification, supplement or other change requires the prior written consent of the Bank in accordance with this Section 5.2(a). Notwithstanding the foregoing, the Commission, -58-
without the Bank’ s prior written consent, may perform ministerial duties, make such provisions for the purpose of curing any ambiguity, inconsistency or omission, or of curing or correcting any defective provision, as the Commission may deem necessary or desirable, in any case which do not adversely affect the security, rights or remedies of the Bank hereunder, under the Fee Agreement or the Notes, or any other Basic Document and, solely in connection with the issuance of additional Debt, issue in strict compliance with the terms of the governing documents related thereto.
(b) Merger, Disposition of Assets . As it relates to the Water System and the Power System, separately, consolidate or merge with or into any person or sell, lease or otherwise transfer all or substantially all of its assets to any person. (c) Preservation of Corporate Existence, Etc. Take any action to terminate its existence as a body politic and corporate and a political subdivision of the State or its rights and privileges as such entity within the State.
(d) Exempt Status. As it relates to the Water System and the Power System, separately, take any action, omit to take any action or cause or permit another person to take any action or omit to take any action, which, if taken or omitted, would adversely affect the excludability of interest on the Tax -exempt Notes from the gross income of the holders thereof for purposes of Federal income taxation. (e) Issue Water Enterprise Debt. (1) Issue any Water Enterprise Debt unless:
(i) no “event of default” shall have occurred and be continuing under the agreement or instrument pursuant to which any outstanding Water Enterprise Debt was issued or incurred and no event shall have occurred which, but for the passage of time or the giving of notice, would constitute an “event of default” under any such agreement or instrument;
(ii) such Water Enterprise Debt will not exceed at any time any limitation set forth in the Constitution or other laws of the State, the Charter, the Resolutions, any other resolutions adopted by the Commission; (iii) (A) prior to the Amendment Effective Date,
(w) If any portion of the proceeds of such Series of Senior Water Bonds or Subordinated Water Bonds is to be used to finance construction of a Water Project, the Commission shall provide to the Bank a certificate of the Water Consulting Engineers setting forth (A) the estimated date of completion for the portion of the Water Project for which such Series of Senior Water Bonds or Subordinated Water Bonds is being issued and for any other uncompleted portion of the Water Project, and (B) an estimate of the cost of construction of such portion of the Water Project and of any other uncompleted portion of the Water Project.
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(x) The Commission shall provide to the Bank a Certificate of the Commission setting forth for each of the next three Fiscal Years (and if any portion of the proceeds of such Series of Senior Water Bonds or Subordinated Water Bonds is to be used to finance construction, the three Fiscal Years following the Fiscal Year in which the Water Consulting Engineers estimate such portion of the Project will be completed) estimates of (A) Water Enterprise Revenues (B) Water Operation and Maintenance Costs of the Enterprise and (3) Water Net Revenues.
(y) Prior to the issuance of any additional Senior Water Bonds or Subordinated Water Bonds, the Commission shall provide to the Bank a certificate setting forth, for each of the next three Fiscal Years, (A) estimated Water Net Revenues, as set forth in paragraph (x) above, for each of such three Fiscal Years (and, if any portion of the proceeds of such Water Senior Debt are to be used to finance construction, the three Fiscal Years following the Fiscal Year in which the Water Consulting Engineers estimate such portion of the Water Project will be completed), (B) the Water Annual Debt Service for each of such Fiscal Years (taking into account the issuance of such additional indebtedness), including Water Annual Debt Service as estimated in such certificate of the Commission with respect to future Senior Water Bonds or Subordinated Water Bonds, if any, which the Commission estimates will be required to complete payment of the cost of construction of such portion of the Water Project and any other uncompleted portion of the Water Project, and (C) demonstrating that the estimated Water Net Revenues (together with any fund balances of the Commission which are available for the payment of Water Debt Service but excluding the Water Bond Reserve Fund) in each of the Fiscal Years set forth in paragraph (x) above is at least equal to 1.25 times the Water Annual Debt Service for each of such respective Fiscal Years.

Provided, however, that any refunding Senior Water Bonds or Subordinated Water Bonds shall be issued in compliance with the Water Bond Indenture or Subordinated Water Bonds Indenture under which such Senior Water Bonds or Subordinated Water Bonds, as applicable, and shall not be subject to this Section 5.2(e)(iii).
(B) On and after the Amendment Effective Date,
(w) If any portion of the proceeds of such Series of Senior Water Bonds or Subordinated Water Bonds is to be used to finance construction of a Water Project after the sale of the additional Series of Senior Water Bonds or Subordinated Water Bonds proposed to be issued (but prior to the issuance and delivery thereof and receipt of payment therefor), the Commission shall provide to the Bank the following documents; these documents shall, with respect to such Series of Senior Water Bonds or Subordinated Water Bonds, be based upon the actual interest rate or rates -60-
determined at the time of sale thereof (except that, with respect to Variable Rate Indebtedness (as defined in the Water Bonds Indenture) , the interest rate for the Series of Senior Water Bonds or Subordinated Water Bonds shall be calculated in accordance with the provisions of subsection (iv) of the definition of Water Maximum Annual Debt Service).
(I) A Certificate of the Commission setting forth for
each of the next three Fiscal Years estimates of (A) Water Enterprise Revenues, (B) Water Operation and Maintenance Costs of the Enterprise and (3) Water Net Revenues.
(II) A Certificate of the Commission demonstrating that (1) the ratio of (A) Water Net Revenues for the most recent Fiscal Year for which audited financial statements are available, or any consecutive twelve calendar month period during the eighteen calendar month period prior to the issuance of such additional Series of Senior Water Bonds or Subordinated Water Bonds, to (B) Water Annual Debt Service for the current Fiscal Year, calculated as of the date of sale of, and including such additional Series of Senior Water Bonds or Subordinated Water Bonds, will not be less than 1.25:1; or (2) the ratio of (A) Water Net Revenues projected by the Commission for each of the next three Fiscal Years as determined in clause (I) immediately above, and including in such projections amounts projected to be received from any adopted rate increases (but excluding the Water Bond Reserve Fund (as defined in the Water Bonds Indenture), to (B) Water Annual Debt Service in each of such three Fiscal Years, calculated as of the date of sale of and including such additional Series of Senior Water Bonds or Subordinated Water Bonds , will not be less than 1.25:1 in each of such Fiscal Years.

Provided, however, that any refunding Senior Water Bonds or Subordinated Water Bonds shall be issued in compliance with the Water Bond Indenture or Subordinated Water Bonds Indenture under which such Senior Water Bonds or Subordinated Water Bonds, as applicable, were issued and shall not be subject to this Section 5.2(e)(iii).
(iv) prior to the issuance of any additional Water Senior State Loans, the Commission shall provide to the Bank a certificate setting forth, for each of the next three Fiscal Years after the delivery of such Water Senior State Loans (A) the Water Enterprise Revenues, Water Operation and Maintenance Costs of the Enterprise and Net Revenues (assuming the delivery of the Water Senior State Loans) and (B) the Water Annual Debt Service, (assuming the delivery of the Water Senior State Loans) and demonstrating that the estimated Water Net Revenues (together with any fund balances of the Commission which are available for Water Debt Service, -61-
but excluding the Water Bond Reserve Fund), in each of such Fiscal Years is at least 1.25 times the Water Annual Debt Service in each of such Fiscal Years; (v) prior to the issuance of any additional Water Enterprise Debt, the Commission shall provide to the Bank a certificate certifying that both (x) the actual revenues of the Water Enterprise for the most recently completed Fiscal Year and (y) projected revenues for the next three (3) Fiscal Years following the issuance of such additional Water Enterprise Debt are or will be sufficient to satisfy the covenant set forth in Section 5.1(s) hereof;
(vi) the issuance of Parity Debt will not result in the creation of a Lien on the Available Water Enterprise Revenues that is senior to the Lien securing the Water System Notes or the other Water Obligations;
(vii) notwithstanding anything herein to the contrary, if such Water Enterprise Debt consists of Subordinated Water Bonds, the Commission shall not issue any Subordinated Water Bonds without the Bank’s prior written consent thereto; provided, that, for purposes of clarity, this clause (vii) shall not apply to Senior State Loans;
(viii) if Such Water Enterprise Debt consists of Parity Debt, the aggregate principal amount of such Parity Debt and any amounts outstanding under the Water System Notes outstanding does not exceed $750,000,000 in aggregate principal amount;
(x) As it relates to the Water System, no Default or Event of Default shall have occurred and be continuing hereunder as a result thereof. (2) The Commission will not issue Debt secured by or payable from the Water Net Revenues on a basis that is senior to the obligations owed to the Bank hereunder, under the Fee Agreement and the Water System Notes other than Water Senior Debt. (f) Issue Power Enterprise Debt . (i) Issue any Power Senior Debt or Parity Debt unless:
(A) no “event of default” shall have occurred and be continuing under the agreement or instrument pursuant to which any outstanding Power Senior Debt or Parity Debt was issued or incurred and no event shall have occurred which, but for the passage of time or the giving of notice, would constitute an “event of default” under any such agreement or instrument;
(B) such Power Senior Debt or Parity Debt does not exceed at any time any limitation set forth in the Constitution or other laws of the State, the Charter, the Resolution, the Ordinance, the Power Bonds Indenture or any supplement thereto, other resolutions adopted by the Commission, Ordinances adopted by the Board; and
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(C) in the case of Power Senior Debt, either:
(1) a Certificate of the Commission stating that, in each of the first three (3) full Fiscal Years after the sale of such Power Senior Debt, projected Power Net Revenues (1) plus Power Available Funds, are at least

1.25 times Power Annual Debt Service on the outstanding Senior Debt, after giving effect to the issuance of such Senior Debt, and (2) are at least

1.0 times Power Annual Debt Service on the outstanding Power Senior Debt, plus required deposits into any Power Reserve Fund established pursuant to the Power Bonds Indenture, after giving effect to the issuance of such Power Senior Debt; or
(2) a Certificate of the Commission stating that Power Net Revenues from any twelve consecutive months of the prior 24 months:
(1) plus Power Available Funds, are at least 1.25 times Power Annual Debt Service on the outstanding Power Senior Debt, after giving effect to the issuance of such Power Senior Debt, and (2) are at least 1.0 times Power Annual Debt Service on the outstanding Power Senior Debt, plus required deposits into any Reserve Fund established pursuant to the Power Bonds Indenture after giving effect to the issuance of such Power Senior Debt; provided, however , for purposes of this paragraph (B) the following adjustments may be made to Power Net Revenues for such period, if so stated in the Certificate of the Commission; (I) an allowance for additional Power Enterprise Revenues anticipated from any additions, extensions and improvements to the Power Enterprise to be acquired or constructed from proceeds of such or a prior Power Senior Debt and for any changes in Power Operation and Maintenance Expenses resulting therefrom, that are not reflected in Power Net Revenues for such Fiscal Year, but only if such additional Power Enterprise Revenues and changes in Power Operation and Maintenance Expenses represent a full twelve months’ change in Power Net Revenues attributable to such additions, extensions and improvements; and (II) an allowance for additional Power Enterprise Revenues attributable to any increase in the rates and charges imposed by the Commission that (x) was in effect prior to the issuance of such Power Senior Debt but which, during all or part of such Fiscal Year, was not in effect, or (y) was adopted by the Commission prior to the issuance of such Power Senior Debt and will be in effect within 90 days after such issuance, but in either case only if such additional Power Enterprise Revenues represent a full twelve months’ change in Power Net Revenues attributable to such increase in rates and charges;
(D) in the case of Parity Debt in addition to the Notes, either:
(1) a Certificate of the Commission stating that, in each of the three (3) full Fiscal Years after the sale of such Parity Debt, Power Enterprise Revenues will sufficient to pay (I) the Power Operation and -63-
Maintenance Expenses during each such Fiscal Year, (II) Power Annual Debt Service on the Power Bonds and all other outstanding Power Senior Debt due and payable in each such Fiscal Year, (III) the amounts, if any, required to be deposited into the Reserve Fund established pursuant to the Power Bonds Indenture during each such Fiscal Year, (IV) in the case of the Notes, debt service on the Notes assuming the entire authorized amount of the Notes is issued and outstanding and that such amount will amortize over a thirty year period on a level debt basis using an interest rate equal to the Bond Buyer 25- Bond Revenue Bond Index (or, if such index is no longer published, any other comparable revenue bond on the date of such Certificate) and (V) any and all other amounts the Commission is obligated to pay or set aside from Power Enterprise Revenues by law or in each such Fiscal Year, including, without limitation and without duplication, amounts payable to the Bank under this Agreement, the Fee Agreement and the Notes, as well as the principal of and interest on the Parity Debt to be issued; or
(2) a Certificate of the Commission stating that Power
Enterprise Revenues from any twelve consecutive months of the prior 24 months were sufficient to pay (I) the Power Operation and Maintenance Expenses during such twelve consecutive month period, (II) Power Annual Debt Service on the Power Senior Bonds and all other outstanding Power Senior Debt due and payable in such twelve consecutive month period, (III) the amounts, if any, required to be deposited into the Reserve Fund established pursuant to the Power Bonds Indenture during such twelve consecutive month period, (IV) in the case of the Notes, debt service on the Notes assuming the entire authorized amount of the Notes was issued and outstanding during such twelve consecutive month period and that such amount was amortizing over a thirty year period on a level debt basis using an interest rate equal to the Bond Buyer 25-Bond Revenue Bond Index (or, if such index is no l onger published, any other comparable revenue bond index) on the date of such Certificate and (V) any and all other amounts the Commission was obligated to pay or set aside from Power Enterprise Revenues by law or contract in such twelve consecutive month period, including, without limitation and without duplication, amounts payable to the Bank under this Agreement, the Fee Agreement and the Note s during such twelve consecutive month period, as well as the principal of and interest on the Parity Debt to be issued (assuming such Parity Debt had been outstanding during such twelve consecutive month period); (E) the issuance of Parity Debt will not result in the creation of a Lien on the Available Power Enterprise Revenues that is senior to the Lien securing the Notes or the Obligations; and
(I) As it relates to the Power System, no Default or Event of Default has occurred and is continuing hereunder as a result thereof. -64-
(ii) The Commission will not issue Debt secured by or payable from the Power Net Revenues on a basis that is senior to the Obligations other than Senior Power Bonds issued in accordance with this Section 5.2(g) and the Power Bonds Indenture. (g) Use of Bank ’s Name . As it relates to the Water System and the Power System, separately, p ermit the use of the Bank ’s name in any official statement or other offering document unless the Bank shall have approved in writing the description of the Bank contained in such document.
(h) Arbitrage; Tax-Exempt Status. As it relates to the Water System and the Power System, separately, invest the proceeds of the Notes in any way that would violate the Code or cause the Notes to be deemed “ arbitrage bonds” or take any action or omit to take any action if such action or omission would adversely affect the exclusion of interest on the Notes from gross income of the holders thereof for Federal income tax purposes. (i) Liens. Create or suffer to exist or permit any Lien on (i) the Available Water Enterprise Revenues other than the Liens created or permitted hereunder , or Liens on Available Water Enterprise Revenues that are junior and subordinate to the Lien created by this Agreement under terms and conditions satisfactory to the Bank; or (ii) the Available Power Enterprise Revenues other than the Liens created or permitted hereunder , or Liens on Available Power Enterprise Revenues that are junior and subordinate to the Lien created by this Agreement under terms and conditions satisfactory to the Bank. (j) Sovereign Immunity . As it relates to the Water System and the Power System, separately, assert (and the Commission hereby irrevocably waives) the defense of any future right of sovereign immunity in a legal proceeding to enforce or collect upon the obligations of the Commission under this Agreement, the Fee Agreement or the Note s or the transactions contemplated hereby or thereby.
(k) Maintenance of Available Water Enterprise Revenues and Available Power Enterprise Revenues. Acquire, construct, operate or maintain, and within the scope of its powers permit any other public or private corporation, political subdivision, district or agency or any person whatsoever to acquire, construct, operate or maintain, within the City or any part thereof, any system or utility competitive with the Water Enterprise or the Power Enterprise. The Commission will have in effect, or cause to have in effect, at all times an ordinance or resolution requiring all customers of the Water Enterprise and Power Enterprise, as applicable, to pay the fees, rates and charges applicable to the services and facilities furnished by the Water Enterprise or Power Enterprise. The Commission will not provide any service of the Water Enterprise or Power Enterprise free of charge to any person, firm or corporation, or to any public agency (including the United States of America, the State, and any public corporation, pol itical subdivision, city, county district or agency or any thereof), except ( i) for free use by the City and its agencies, (i i) to the extent that any such free use is required by the terms of any existing contract or agreement, and (iii) for incidental insignificant free use so long as such free use does not prevent the Commission from satisfying the other covenants of this Agreement, including, without limitation, Section 5.1(t) hereof.
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(l) Swap Contracts. Without the prior written consent of the Bank, enter into any Swap Contract secured by Water Enterprise Revenues or Power Enterprise Revenues (a) wherein any termination payments thereunder are senior to or on parity with the payment of the Notes or Parity Debt or the Obligations or (b) which requires the Commission to post cash collateral to secure its obligations thereunder. (m) Use of Proceeds. Use the proceeds of any credit extension, whether directly or indirectly, and whether immediately, incidentally or ultimately, to purchase or carry margin stock (within the meaning of Regulation U of the Board of Governors of the Federal Reserve System) or to extend credit to others for the purpose of purchasing or carrying margin stock or to refund indebtedness originally incurred for such purpose, in each case in violation of, or for a purpose which violates, or would be inconsistent with, Regulation T, U or X of the Board of Governors of the Federal Reserve System . As it relates to the Water System and the Power System, separately, t he Commission shall not use the proceeds of the Notes for any purpose other than as provided for in the applicable Basic Documents and not in contravention of applicable Law.

RTICLE SIX

DEFAULTS
Section 6.1. Events of Default Relating to the Water System. If any of the following events shall occur, each such event shall be an “Event of Default” with respect to the Water System only:
(a) with respect to the Water System, the Commission shall fail to pay, or cause to be paid, as and when due, (i) any Water Reimbursement Obligation, or (ii) any Water Obligation (other than a Water Reimbursement Obligation) and, in such case, such failure shall continue for five (5) Business Days;
(b) with respect to the Water System, any representation or warranty made by or on behalf of the Commission in this Agreement or in any other Water Basic Document or in any certificate or statement delivered hereunder or thereunder shall be incorrect or untrue in any material respect when made or deemed to have been made or delivered; (c) with respect to the Water System, the Commission shall default in the due performance or observance of any of the covenants set forth in Section 5.1(c) (A), 5.1(d),

5.1(f), 5.1(k)(i), 5.1(o)(i), 5.1(p)(i), 5.1(v), 5.1(x), or 5.2 (as each relate to the Water System only) hereof;
(d) with respect to the Water System, the Commission shall default in the due performance or observance of any other term, covenant or agreement contained in this Agreement or any other Water Basic Document and such default shall remain unremedied for a period of thirty (30) days after the occurrence thereof; -66-
(e) with respect to the Water System, the Commission or the City and County of San Francisco, directly or indirectly, shall (i) have entered involuntarily against it an order for relief under the United States Bankruptcy Code, as amended, (ii) become insolvent or shall not pay, or be unable to pay, or admit in writing its inability to pay, its debts generally as they become due, (iii) make an assignment for the benefit of creditors, (iv) apply for, seek, consent to, or acquiesce in, the appointment of a re ceiver, custodian, trustee, examiner, liquidator or similar official for it or any substantial part of its Property, (v) institute any proceeding seeking to have entered against it an order for relief under the United States Bankruptcy Code, as amended, to adjudicate it insolvent, or seeking dissolution, winding up, liquidation, reorganization, arrangement, marshalling of assets, adjustment or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors or fail to file an answer or other pleading denying the material allegations of any such proceeding filed against it, (vi) take any corporate action in furtherance of any matter described in parts (i) through (v) above, or (vii) fail to contest in good faith any appointment or proceeding described in Section 6.1(f) of this Agreement;
(f) with respect to the Water System, a custodian, receiver, trustee, examiner, liquidator or similar official shall be appointed for the Commission or the City and County of San Francisco or any substantial part of its Property, or a proceeding described in Section 6.1(e)(v) shall be instituted against the Commission or the City and County of San Francisco and such proceeding continues undischarged or any such proceeding continues undismissed or unstayed for a period of thirty (30) or more days; (g) with respect to the Water System, a debt moratorium, debt restructuring, debt adjustment or comparable restriction is imposed on the repayment when due and payable of the principal of or interest on any Debt of the Commission by the Commission or any Governmental Authority with appropriate jurisdiction; (h) with respect to the Water System, any material provision of this Agreement, the Charter, any other Water Basic Document or any operative document related to Water Enterprise Debt, including without limitation, the Water Bonds Indenture, shall at any time for any reason cease to be valid and binding on the Commission for any reason or shall be declared by any court or other Governmental Authority with competent jurisdiction to be null and void, invalid, or unenforceable, or the validity or enforceability thereof shall be publicly contested by the Commission or by a Governmental Authority with competent jurisdiction, or the Commission shall deny that it has any further liability under this Agreement, the Charter, any other Water Basic Document or any operative document related to Water Enterprise Debt, including without limitation, the Water Bonds Indenture; (i) with respect to the Water System, dissolution or termination of the existence of the Commission;
(j) with respect to the Water System, the Commission shall (i) default on the payment of the principal of or interest on any Water Enterprise Debt, beyond the period of grace, if any, provided in the instrument or agreement under which such Water Enterprise -67-
Debt was created or incurred; or (ii) default in the observance or performance of any agreement or condition relating to any Water Enterprise Debt, including, without limitation, any Bank Agreement, or contained in any instrument or agreement evidencing, securing or relating thereto, or any other default, event of default or similar event shall occur or condition exist, the effect of which default, event of default or similar event or condition is to permit (determined without regard to whether any notice i s required) or cause any such Water Enterprise Debt to become immediately due and payable in full as the result of the acceleration, mandatory redemption or mandatory tender of such Water Enterprise Debt;
(k) with respect to the Water System, the Commission shall (i) default on the payment of the principal of or interest on any Debt (other than Water Enterprise Debt) aggregating in excess of $10,000,000, beyond the period of grace, if any, provided in the instrument or agreement under which suc h Debt (other than Water Enterprise Debt) was created or incurred; or (ii) default in the observance or performance of any agreement or condition relating to any Debt (other than Water Enterprise Debt) aggregating in excess of $10,000,000, or contained in any instrument or agreement evidencing, securing or relating thereto, or any other default, event of default or similar event shall occur or condition exist, the effect of which default, event of default or similar event or condition is to permit (determined without regard to whether any notice is required) or cause any such Debt to become immediately due and payable in full as the result of the acceleration, mandatory redemption or mandatory tender of such Debt (other than Water Enterprise Debt); (l) with respect to the Water System, any final, unappealable judgment or judgments, writ or writs or warrant or warrants of attachment, or any similar process or processes, in an aggregate amount not less than $10,000,000 shall be entered or filed against the Commission or against any of its Property and remain unpaid, unvacated, unbonded or unstayed for a period of sixty (60) days;
(m) with respect to the Water System, (i) the Commission shall default in the due performance or observance of any material term, covenant or agreement contained in any other Water Basic Document and the same shall not have been cured within any applicable cure period or (ii) any “event of default” under any Water Basic Document (as defined respectively therein) shall have occurred;
(n) with respect to the Water System, a ruling, assessment, notice of deficiency or technical advice by the Internal Revenue Service shall be rendered to the effect that interest on the Water System Notes is includable in the gross income of the holder(s) or owner(s) of such Water System Notes and either (i) the Commission, after it has been notified by the Internal Revenue Service, shall not challenge such ruling, assessment, notice or advice in a court of law during the period within which such challenge is permitted or (ii) the Commission shall challenge such ruling, assessment, notice or advice and a court of law shall make a determination, not subject to appeal or review by another court of law, that such ruling, assessment, notice or advice is correctly rendered; -68-
(o) with respect to the Water System, any of Moody’s or S&P shall have downgraded its long-term unenhanced rating of any Water Senior Debt of the Commission to below “Baa2 ” (or its equivalent), or “BBB” (or its equivalent), respectively, or suspended or withdrawn its rating of the same; or
(p) with respect to the Water System, the passage of any Law has occurred which could reasonably he expected to have a material adverse effect on the Commission’s ability to perform its obligations under this Agreement or the other Water Basic Documents or to result in a material adverse effect on the enforceability or validity of this Agreement or any of the other Water Basic Documents.

Section 6.2. Remedies Relating to Water System . Upon the occurrence of any Event of Default set forth in Section 6.1 hereof (as it relates to the Water System) , the Bank may exercise any one or more of the following rights and remedies in addition to any other remedies herein or by law provided:
(a) declare all Water System Notes and other Water Obligations to be immediately due and payable, whereupon the same shall be immediately due and payable without any further notice of any kind, which notice is hereby waived by the Commission; provided, however, that in the case of an Event of Default described in Section 6.1(e), (f) or (g) hereof, such acceleration shall automatically occur (unless such automatic acceleration is waived by the Bank in writing); or
(b) by written notice to the Commission, reduce the Water Commitment to zero and thereafter the Bank will have no further obligation to make Water System Loans hereunder and/or terminate the Water Commitment;
(c) either personally or by attorney or agent without bringing any action or proceeding, or by a receiver to be appointed by a court in any appropriate action or proceeding, take whatever action at law or in equity may appear necessary or desirable to collect the amounts due and payable under the Water Basic Documents or to enforce performance or observance of any obligation, agreement or covenant of the Commission under the Water Basic Documents, whether for specific performance of any agreement or covenant of the Commission or in aid of the execution of any power granted to the Bank in the Water Basic Documents; or
(d) pursue any rights and remedies it may have under the Water Basic Documents; or
(e) pursue any other action available at law or in equity. -69-
Section 6.3. Events of Default Relating to the Power System . If any of the following events shall occur, each such event shall be an “Event of Default” with respect to the Power System only:
(a) with respect to the Power System, the Commission shall fail to pay, or cause to be paid, as and when due, (i) any Power Reimbursement Obligation, or (ii) any Power Obligation (other than a Power Reimbursement Obligation) and, in such case, such failure shall continue for five (5) Business Days;
(b) with respect to the Power System, any representation or warranty made by or on behalf of the Commission in this Agreement or in any other Power Basic Document or in any certificate or statement delivered hereunder or thereunder shall be incorrect or untrue in any material respect when made or deemed to have been made or delivered; (c) with respect to the Power System, the Commission shall default in the due performance or observance of any of the covenants set forth in 5.1(c)( B), 5.1(d), , 5.1(g),

5.1(k)(i), 5.1(o)(ii), 5.1(p)(ii), or 5.2 hereof (as each relate to the Power System only); (d) with respect to the Power System, the Commission shall default in the due performance or observance of any other term, covenant or agreement contained in this Agreement or any other Power Basic Document and such default shall remain unremedied for a period of thirty (30) days after the occurrence thereof; (e) with respect to the Power System, the Commission or the City and County of San Francisco, directly or indirectly, shall (i) have entered involuntarily against it an order for relief under the United States Bankruptcy Code, as amended, (ii) become insolvent or shall not pay, or be unable to pay, or admit in writing its inability to pay, its debts generally as they become due, (iii) make an assignment for the benefit of creditors, (iv) apply for, seek, consent to, or acquiesce in, the appointment of a re ceiver, custodian, trustee, examiner, liquidator or similar official for it or any substantial part of its Property, (v) institute any proceeding seeking to have entered against it an order for relief under the United States Bankruptcy Code, as amended, to adjudicate it insolvent, or seeking dissolution, winding up, liquidation, reorganization, arrangement, marshalling of assets, adjustment or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors or fail to file an answer or other pleading denying the material allegations of any such proceeding filed against it, (vi) take any corporate action in furtherance of any matter described in parts (i) through (v) above, or (vii) fail to contest in good faith any appointment or proceeding described in Section 6.3(f) of this Agreement;
(f) with respect to the Power System, a custodian, receiver, trustee, examiner, liquidator or similar official shall be appointed for the Commission or the City and County of San Francisco or any substantial part of its Property, or a proceeding described in Section 6.3(e)(v) shall be instituted against the Commission or the City and County of San Francisco and such proceeding continues undischarged or any such proceeding continues undismissed or unstayed for a period of thirty (30) or more days; -70-
(g) with respect to the Power System, a debt moratorium, debt restructuring, debt adjustment or comparable restriction is imposed on the repayment when due and payable of the principal of or interest on any Debt of the Commission by the Commission or any Governmental Authority with appropriate jurisdiction; (h) with respect to the Power System, any material provision of this Agreement, the Charter, any other Power Basic Document or any operative document related to Power Enterprise Debt, including without limitation, the Power Bonds Indenture, shall at any time for any reason cease to be valid and binding on the Commission for any reason or shall be declared by any court or other Governmental Authority with competent jurisdiction to be null and void, invalid, or unenforceable, or the validity or enforceability thereof shall be publicly contested by the Commission or by a Governmental Authority with competent jurisdiction, or the Commission shall deny that it has any further liability under this Agreement, the Charter, any other Power Basic Document or any operative document related to Power Enterprise Debt, including without limitation, the Power Bonds Indenture; (i) with respect to the Power System, dissolution or termination of the existence of the Commission;
(j) with respect to the Power System, the Commission shall (i) default on the payment of the principal of or interest on any Power Enterprise Debt, beyond the period of grace, if any, provided in the instrument or agreement under which such Power Enterprise Debt was created or incurred; or (ii) default in the observance or performance of any agreement or condition relating to any Power Enterprise Debt, including, without limitation, any Bank Agreement, or contained in any instrument or agreement evidencing, securing or relating thereto, or any other default, event of default or similar event shall occur or condition exist, the effect of which default, event of default or similar event or condition is to permit (determined without regard to whether any notic e is required) or cause any such Power Enterprise Debt to become immediately due and payable in full as the result of the acceleration, mandatory redemption or mandatory tender of such Power Enterprise Debt;
(k) with respect to the Power System, the Commission shall (i) default on the payment of the principal of or interest on any Debt (other than Power Enterprise Debt) aggregating in excess of $10,000,000, beyond the period of grace, if any, provided in the instrument or agreement under which such Debt (other than Power Enterprise Debt) was created or incurred; or (ii) default in the observance or performance of any agreement or condition relating to any Debt (other than Power Enterprise Debt) aggregating in excess of $10,000,000, or contained in any instrument or agreement evidencing, securing or relating thereto, or any other default, event of default or similar event shall occur or condition exist, the effect of which default, event of default or similar event or condition is to permit (determined without regard to whether any notice is required) or cause any such Debt to become immediately due and payable in full as the result of the acceleration, mandatory redemption or mandatory tender of such Debt (other than Power Enterprise Debt); -71-
(l) with respect to the Power System, any final, unappealable judgment or judgments, writ or writs or warrant or warrants of attachment, or any similar process or processes, in an aggregate amount not less than $10,000,000 shall be entered or filed against the Commission or against any of its Property and remain unpaid, unvacated, unbonded or unstayed for a period of sixty (60) days;
(m) with respect to the Power System, (i) the Commission shall default in the due performance or observance of any material term, covenant or agreement contained in any other Power Basic Document and the same shall not have been cured within any applicable cure period or (ii) any “event of default” under any Power Basic Document (as defined respectively therein) shall have occurred;
(n) with respect to the Power System, a ruling, assessment, notice of deficiency or technical advice by the Internal Revenue Service shall be rendered to the effect that interest on the Power System Notes is includable in the gross income of the holder(s) or owner(s) of such Power System Notes and either (i) the Commission, after it has been notified by the Internal Revenue Service, shall not challenge such ruling, assessment, notice or advice in a court of law during the period within which such challenge is permitted or (ii) the Commission shall challenge such ruling, assessment, notice or advice and a court of law shall make a determination, not subject to appeal or review by another court of law, that such ruling, assessment, notice or advice is correctly rendered; (o) with respect to the Power System, any of Fitch or S&P shall have downgraded its long-term unenhanced rating of any Power Senior Debt of the Commission to below “BBB” (or its equivalent), or “BBB” (or its equivalent), respectively, or suspended or withdrawn its rating of the same; or
(p) with respect to the Power System, the passage of any Law has occurred which could reasonably he expected to have a material adverse effect on the Commission’s ability to perform its obligations under this Agreement or the other Power Basic Documents or to result in a material adverse effect on the enforceability or validity of this Agreement or any of the other Power Basic Documents.

Section 6.4. Remedies Relating to Power System. Upon the occurrence of any Event of Default set forth in Section 6.3 hereof (as it relates to the Power System) , the Bank may exercise any one or more of the following rights and remedies in addition to any other remedies herein or by law provided:
(a) declare all Power System Notes and other Power Obligations to be immediately due and payable, whereupon the same shall be immediately due and payable without any further notice of any kind, which notice is hereby waived by the Commission; provided, however, that in the case of an Event of Default described in Section 6.3(e), (f) or (g) hereof, such acceleration shall automatically occur (unless such automatic acceleration is waived by the Bank in writing); or
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(b) by written notice to the Commission, reduce the Power Commitment to zero and thereafter the Bank will have no further obligation to make Power System Loans hereunder and/or terminate the Power Commitment; or
(c) either personally or by attorney or agent without bringing any action or proceeding, or by a receiver to be appointed by a court in any appropriate action or proceeding, take whatever action at law or in equity may appear necessary or desirable to collect the amounts due and payable under the Water Basic Documents or to enforce performance or observance of any obligation, agreement or covenant of the Commission under the Water Basic Documents, whether for specific performance of any agreement or covenant of the Commission or in aid of the execution of any power granted to the Bank in the Water Basic Documents; or
(d) pursue any rights and remedies it may have under the Power Basic Documents; or
(e) pursue any other action available at law or in equity.

ARTICLE SEVEN

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

Section 7.2. Notices. All notices and other communications provided for hereunder shall be in writing (including required copies) and sent by receipted hand delivery (including Federal Express or other receipted courier service), telecopy, facsimile transmission, or regular mail, as follows:
(a) if to the Commission:

City and County of San Francisco
Public Utilities Commission
525 Golden Gate Ave., 4th Floor
San Francisco, California 94102
Attention: Chief Financial Officer
Telephone: (415) 554-3155
Facsimile: (415) 554-3161
(b) if to the Bank:
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Wells Fargo Bank, National Association
[____________]
Attention: [_________]
Telephone: [_________]
Email: [_________]
or, as to each Person named above, at such other address as shall be designated by such Person in a written notice to the parties hereto. All such notices and other communications shall, when delivered, telecopied, sent by facsimile transmission or mailed , be effective when deposited with the courier, telecopied, sent by facsimile transmission or mailed respectively, addressed as aforesaid, except that requests for Loans submitted to the Bank shall not be effective until received by the Bank in accordance with the terms set forth in Article Two.

Section 7.3. Survival of Covenants; Successors and Assigns . As it relates to the Water System and the Power System, separately, (a) all covenants, agreements, representations, and warranties made herein and in the certificates delivered pursuant hereto shall survive the making of any Loan hereunder and shall continue in full force and effect until all of the Obligations hereunder shall have been paid in full. Whenever in this Agreement any of the parties hereto is referred to, such reference shall, subject to the last sentence of this Section, be deemed to incl ude the successors and assigns of such party, and all covenants, promises and agreements by or on behalf of the Commission which are contained in this Agreement, as it relates to the Water System and the Power System, separately, shall inure to the benefit of the successors and assigns of the Bank. The Commission may not transfer its rights or obligations under this Agreement without the prior written consent of the Bank. The Bank may transfer or assign some or all of its rights and obligations under this Agreement, the Fee Agreement, or the Not es with the prior written consent of the Commission (which consent shall not be withheld unreasonably) in accordance with Section 7.3(b), (c), or (d) hereunder ; provided that such consent of the Commission shall not be required if an Event of Default has occurred and is continuing, as it relates to the Water System and the Power System, separately . This Agreement is made solely for the benefit of the Commission and the Bank, and no other Person shall have any right, benefit or interest under or because of the existence of this Agreement; provided further that the Commission’s liability to any Participant shall not in any event exceed that liability which the Commission would owe to the Bank but for such participation.
(b) Notwithstanding the foregoing, the Bank shall be permitted to grant to one or more financial institutions (each, a “Participant” ) a participation or participations in all or any part of the Bank’s rights and benefits and obligations under the Notes on a participating basis but not as a party to this Agreement (a “Participation”) without the consent of or notice to the Commission.

In the event of any such grant by the Bank of a Participation to a Participant, the Bank shall remain responsible for the performance of its obligations hereunder and under the Notes , and the Commission shall continue to deal solely and directly with the Bank in connection with the Bank’s rights and obligations under this Agreement and the Notes . The Commission agrees that each Participant shall, to the extent of its Participation, be entitled to the benefits of this Agreement, the Fee Agreement and the Notes as if such Participant were the Bank, provided that no Participant -74-
shall have the right to declare, or to take actions in response to, an Event of Default under Section 6.1 hereof.
(c) Sales and Transfers by Noteholder to a Bank Transferee. Without limitation of the foregoing generality, a Noteholder may at any time sell or otherwise transfer to one or more transferees all or a portion of the Notes to a Person that is (i) a Bank Affiliate or (ii) a trust or other custodial arrangement established by the Bank or a Bank Affiliate, the owners of any beneficial interest in which are limited to “qualified institutional buyers” as defined in Rule 144A promulgated under the 1933 Act (each, a “Bank Transferee”). From and after the date of such sale or transfer, Wells Fargo Bank, National Association (and its successors) shall continue to have all of the rights of the Bank hereunder and under the other Basic Documents as if no such transfer or sale had occurred; provided, however, that (A) no such sale or transfer referred to in clause (c)(i) or (c)(ii) hereof shall in any way affect the obligations of the Bank hereunder, (B) the Commission shall be required to deal only with the Bank with respect to any matters under this Agreement and (C) in the case of a sale or transfer referred to in clause (c)(i) or (c)(ii) hereof, only the Bank shall be entitled to enforce the provisions of this Agreement against the Commission.

Anything herein to the contrary notwithstanding, including without limitation Section 2.16 hereof, if any Bank Transferee shall incur increased costs or capital adequacy requirements as contemplated by Section 2.16 hereof, and such increased costs or capital adequacy requirements are greater than those that the Bank would have incurred had it not sold or otherwise transferred all or a portion of a Note to such Bank Transferee provided for in this Section 7.03(c), then the Commission shall not be obligated to pay to such Bank Transferee any portion of the cost greater than that which the Commission would have paid under the provisions of Section 2.16 hereof had the Bank not sold or otherwise transferred all or a portion of such Note to a Bank Transferee unless the Commission consents to such transfer.
(d) Sales and Transfers by Noteholder to a Non-Bank Transferee. Without limitation of the foregoing generality, a Noteholder may at any time sell or otherwise transfer to one or more transferees which are not Bank Transferees but each of which constitutes (i) a “qualified institutional buyer” as defined in Rule 144A promulgated under the 1933 Act and (ii) a commercial bank organized under the laws of the United States, or any state thereof, or any other country which is a member of the Organization for Ec onomic Cooperation and Development, or a political subdivision of any such country, and, in any such case, having a combined capital and surplus, determined as of the date of any transfer pursuant to this clause (c), of not less than $5,000,000,000 (each a “Non-Bank Transferee”) all or a portion of the Notes if written notice of such sale or transfer, including that such sale or transfer is to a Non-Bank Transferee, together with addresses and related information with respect to the Non- Bank Transferee, sha ll have been given to the Commission and the Bank (if different than the Noteholder ) by such selling Noteholder and Non-Bank Transferee; provided, however, that the Commission shall be required to deal only with the Bank with respect to any matters under this Agreement unless the Commission consents to such transfer.

From and after the date the Commission and the selling Noteholder have received written notice, (A) the Non-Bank Transferee thereunder shall be a party hereto and shall have the rights and obligations of a Noteholder hereunder and under the other Basic Documents, and this -75-
Agreement shall be deemed to be amended to the extent, but only to the extent, necessary to effect the addition of the Non-Bank Transferee, and any reference to the assigning Noteholder hereunder and under the other Basic Documents shall thereafter refer to such transferring Noteholder and to the Non- Bank Transferee to the extent of their respective interests, and (B) if the transferring Noteholder no longer owns any Notes , then it shall relinquish its rights and be released from its obligations hereunder and under the Basic Documents.

Anything herein to the contrary notwithstanding, including without limitation Section 2.16 hereof, if any Non-Bank Transferee shall incur increased costs or capital adequacy requirements as contemplated by Section 2.16 hereof, and such increased costs or capital adequacy requirements are greater than those that the Bank would have incurred had it not sold or otherwise transferred all or a portion of a Note to such Non-Bank Transferee provided for in this Section 7.03(d), then the Commission shall not be obligated to pay to such Non-Bank Transferee any portion of the cost greater than that which the Commission would have paid under the provisions of Section 2.16 hereof had the Bank not sold or otherwise transferred all or a portion of such Note to a Non-Bank Transferee.

Section 7.4. Unconditional Obligations . The Water Obligations and the Power Obligations shall be absolute, unconditional, irrevocable and payable strictly in accordance with the terms of this Agreement, as it relates to the Water System and the Power System, respectively, and the other respective Basic Documents to which the Commission is a party, under all circumstances whatsoever, including, without limitation, the following:
(a) any lack of validity or enforceability of this Agreement, the Fee Agreement, the Notes or any other Basic Document;
(b) any amendment or waiver of or any consent to departure from the terms of any of the other Basic Documents to which the Bank has not consented in writing; (c) the existence of any claim, counterclaim, set -off, recoupment, defense, or other right which any Person may have at any time against the Bank, the Commission, or any other Person, whether in connection with this Agreement, the other Basic Documents, or any other transaction related thereto;
(d) payment by the Bank of a Loan against presentation of a request which the Bank in good faith determines to be valid, sufficient or genuine and which subsequently is found not to comply with the terms of this Agreement; and (e) any other circumstances or happening whatsoever whether or not similar to any of the foregoing.

Section 7.5. Liability of Bank; Indemnification . (a) Neither the Bank nor any of its respective officers or directors shall be liable or responsible for (i) the use of the Notes, the Loans thereunder, or the transactions contemplated hereby and by the other Basic Documents or for any acts or omissions of the Commission , (ii) the validity, sufficiency, or genuineness of any documents determined in good faith by the Bank to be valid, sufficient or genuine, even if such documents shall, in fact, prove to be in any or all respects invalid, fraudulent, forged or insufficient, -76-
(iii) payments by the Bank against presentation of requests for Loans or requests for which the Bank in good faith has determined to be valid, sufficient or genuine and which subsequently are found not to comply with the terms of this Agreement, or (iv) any other circumstances whatsoever in making or failing to make payment hereunder; provided that the Commission shall not be required to indemnify the Bank for any claims, losses, liabilities, costs or expenses to the extent, but only to the extent, caused by the gross negligence or willful misconduct of the Bank as determined by a court of competent jurisdiction by final and nonappealable judgment. (b) To the extent permitted by the laws of the State, the Commission hereby indemnifies and holds harmless the Bank from and against any and all claims, damages, losses, liabilities, costs or expenses (including specifically reasonable attorneys’ fees) which the Bank may incur (or which may be claimed against the Bank by any Person whatsoever) by reason of or in connection with the execution and de livery of this Agreement , the Notes, the other Basic Documents and the transactions contemplated hereby or thereby; provided that the Commission shall not be required to indemnify the Bank, to the extent, but only to the extent, any such claim, damage, loss, liability, cost or expense is caused by the Bank’s willful misconduct or gross negligence as determined by a court of competent jurisdiction by final and nonappealable judgment. (c) To the fullest extent permitted by applicable law, the Commission shall not assert, and hereby waives, any claim against the Bank, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual dam ages) arising out of, in connection with, or as a result of, this Agreement or any other Basic Document or any agreement or instrument contemplated hereby or thereby, the transactions contemplated hereby or thereby or the use of the proceeds thereof.
(d) The obligations of the Commission under this Section 7.5 shall survive the termination of this Agreement.

Section 7.6. Expenses. The Commission hereby agrees to pay and perform its obligations, as it relates to the Water System and the Power System, separately, provided for in the Fee Agreement, including the payment of all expenses provided for therein in the amounts and on the dates set forth therein. The respective terms and provisions of the Fee Agreement are incorporated herein by reference. All references to amounts due hereunder or under this Agreement shall be deemed to include all respective amounts and obligations due under the Fee Agreement. The respective obligations of the Commission under this Section 7.6 shall survive the termination of this Agreement.

Section 7.7. No Waiver; Conflict . Neither any failure nor any delay on the part of the Bank in exercising any right, power or privilege hereunder, nor any course of dealing with respect to any of the same, shall operate as a waiver thereof, preclude any other or further exercise thereof nor shall a single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power, or privilege. The remedies herein, as they relate to the Water System and the Power System, separately, provided are c umulative, and not exclusive of any remedies provided by law. To the extent of any conflict between this Agreement and any other Basic Documents, this Agreement shall control solely as between the Commission and the Bank. -77-
Section 7.8. Modification, Amendment, Waiver, Etc . No modification, amendment or waiver of any provision of this Agreement shall be effective unless the same shall be in writing and signed in accordance with Section 7.1 hereof.

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

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

Section 7.11. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall constitute an original, but when taken together shall constitute but one agreement and any of the parties hereto may execute this Agreement by signing any such counterpart.

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

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

Section 7.14. Governing Law; Consent to Jurisdiction and Venue; Waiver of Jury Trial . (a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF CALIFORNIA WITHOUT GIVING EFFECT TO CONFLICTS OF LAWS PROVISIONS ; PROVIDED THAT THE BANK’S OBLIGATIONS HEREUNDER SHALL BE GOVERNED BY , AND CONSTRUED

IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAWS PROVISIONS.
(b) EACH PARTY HERETO CONSENTS TO AND SUBMITS TO IN PERSONAM JURISDICTION AND

VENUE IN THE STATE OF CALIFORNIA AND IN THE FEDERAL DISTRICT COURTS WHICH ARE LOCATED IN THE NORTHERN DISTRICT OF CALIFORNIA. EACH PARTY ASSERTS THAT IT HAS PURPOSEFULLY

AVAILED ITSELF OF THE BENEFITS OF THE LAWS OF THE STATE OF CALIFORNIA AND WAIVES ANY

OBJECTION TO IN PERSONAM JURISDICTION ON THE GROUNDS OF MINIMUM CONTACTS , WAIVES ANY OBJECTION TO VENUE, AND WAIVES ANY PLEA OF FORUM NON CONVENIENS. THIS CONSENT TO AND SUBMISSION TO JURISDICTION IS WITH REGARD TO ANY ACTION RELATED TO THIS AGREEMENT.

REGARDLESS OF WHETHER THE PARTY’S ACTIONS TOOK PLACE IN THE STATE OF CALIFORNIA OR -78-

ELSEWHERE IN THE UNITED STATES, THIS SUBMISSION TO JURISDICTION IS NONEXCLUSIVE , AND

DOES NOT PRECLUDE EITHER PARTY FROM OBTAINING JURISDICTION OVER THE OTHER IN ANY COURT OTHERWISE HAVING JURISDICTION.
(c) TO THE EXTENT PERMITTED BY APPLICABLE LAWS , EACH OF THE PARTIES HERETO

HEREBY WAIVES ITS RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR

ARISING OUT OF THIS AGREEMENT, THE BASIC DOCUMENTS OR ANY OF THE TRANSACTIONS

CONTEMPLATED HEREBY OR THEREBY , INCLUDING CONTRACT CLAIMS , TORT CLAIMS , BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS. IF AND TO THE EXTENT THAT

THE FOREGOING WAIVER OF THE RIGHT TO A JURY TRIAL IS UNENFORCEABLE FOR ANY REASON IN

SUCH FORUM , EACH OF THE PARTIES HERETO HEREBY CONSENTS TO THE ADJUDICATION OF ALL

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

HERETO REPRESENTS THAT EACH HAS REVIEWED THIS WAIVER AND CONSENT AND EACH

KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS AND CONSENTS TO JUDICIAL

REFERENCE FOLLOWING CONSULTATION WITH LEGAL COUNSEL ON SUCH MATTERS, IN THE EVENT OF

LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT OR TO JUDICIAL REFERENCE UNDER CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 638 AS PROVIDED HEREIN.
(d) The covenants and waivers made pursuant to this Section 7.14 shall be irrevocable and unmodifiable, whether in writing or orally, and shall be applicable to any subsequent amendments, renewals, supplements or modifications of this Agreement. In the event of litigation, this Agreement may be filed as a written consent to a trial by the court.

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

Section 7.16. USA PATRIOT Act. The Bank hereby notifies the Commission that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act” ), it is required to obtain, verify and record information that identifies the Commission, which information includes the name and address of the Commission and other information that will allow the Bank to identify the Commission in accordance with the Act. The Commission agrees to provide documentary and other evidence of the Commis sion’s identity as may be requested by the Bank at any time to enable the Bank to verify the Commission’s identity or to comply with any applicable law or regulation, including, without limitation, the Act. -79-
Section 7.17. Electronic Transmissions. The Bank is authorized to accept and process any amendments, transfers, assignments of proceeds, Notice of Borrowings, consents, waivers and all documents relating to the Notes and this Agreement which are sent to the Bank by electronic transmission, including SWIFT, electronic mail, telex, telecopy, telefax, courier, mail or other computer generated telecommunications and such electronic communication shall have the same legal effect as if written and shall be binding upon and enforceable against the Commission. The Bank may, but shall not be obligated to, require authentication of such electronic transmission or that the Bank receives original documents prior to acting on such electronic transmission.

The words “execute,” “execution,” “signed,” “signature,” “delivery” and words of like import in or related to this Agreement, any other Basic Document or any document, amendment, approval, consent, waiver, modification, information, notice, certificate, report, statement, disclosure, or authorization to be signed or delivered in connection with this Agreement or any other Basic Document or the transactions contemplated hereby or thereby shall be deemed to include Electronic Signatures or exec ution in the form of an Electronic Record, and contract formations on electronic platforms approved by the Bank, deliveries or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper -based recordkeeping system, as the case may be, to the extent and as provided for in any Applicable Law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act.

Each party hereto agrees that any Electronic Signature or execution in the form of an Electronic Record shall be valid and binding on itself and each of the other parties hereto to the same extent as a manual, original signature. For the avoidance of doubt, the authorization under this paragraph may include, without limitation, use or acceptance by the parties of a manually signed paper which has been converted into electronic form (such as scanned into PDF format), or an electronically signed paper converted into another format, for transmission, delivery and/or retention.

Notwithstanding anything contained herein to the contrary, the Bank i s under no obligation to accept an Electronic Signature in any form or in any format unless expressly agreed to by the Administrative Agent pursuant to procedures approved by it; provided that without limiting the foregoing, (i) to the extent the Bank has agreed to accept such Electronic Signature from any party hereto, the Administrative Agent and the other parties hereto shall be entitled to rely on any such Electronic Signature purportedly given by or on behalf of the executing party without further verification and (ii) upon the request of the Bank, any Electronic Signature shall be promptly followed by an original manually executed counterpart thereof. Without limiting the generality of the foregoing, each party hereto hereby (A) agrees that, for all purposes, including without limitation, in connection with any workout, restructuring, enforcement of remedies, bankruptcy proceedings or litigation involving the Bank and other parties, electronic images of this Agreement or any other Basic Document (in ea ch case, including with respect to any signature pages thereto) shall have the same legal effect, validity and enforceability as any paper original, and (B) waives any argument, defense or right to contest the validity or enforceability of the Basic Documents based solely on the lack of paper original copies of any Basic Documents, including with respect to any signature pages thereto.

Section 7.18. Assignment to Federal Reserve Bank. The Bank may assign and pledge all or any portion of the obligations owing to it hereunder and under the Notes to any Federal Reserve -80-
Bank or the United States Treasury as collateral security pursuant to Regulation A of the Board of Governors of the Federal Reserve System and any Operating Circular issued by such Federal Reserve Bank, provided that any payment in respect of such assigned obligations made by the Commission to the Bank in accordance with the terms of this Agreement or the Notes shall satisfy the Commission’s obligations hereunder and/or under the respective Note in respect of such assigned obligation to the extent of such payment. No such assignment shall release the Bank from its obligations hereunder.

Section 7.19. City Requirements. The Bank hereby agrees to the City’s requirements, as provided in Exhibit E attached hereto and incorporated hereby by this reference.

Section 7.20. No Advisory or Fiduciary Responsibility. The transactions described in this Agreement, the Fee Agreement and the Notes are arm’s length, commercial transactions between the Commission and the Bank in which: (i) the Bank is acting solely as a principal (i.e., as a lender) and for its own interest; (ii) the Bank is not acting as a municipal advisor or financial advisor to, or providing advice to, the Commission; (iii) the Bank has no fiduciary duty pursuant to Section 15B of the Securities Exchange Act of 1934, as amended, and the related final r ules (the “Municipal Advisor Rules”), to Commission with respect to this transaction and the discussions, undertakings and procedures leading thereto (irrespective of whether the Bank or any of its affiliates has provided other services or is currently providing other services to the Commis sion on other matters); (iv) the Bank is relying on the bank exemption in the Municipal Advisor Rules; (v) the only obligations the Bank has to the Commission with respect to this transaction are set forth in this Agreement, the Fee Agreement and the Notes; and (vi) the Bank is not recommending that the Commission take an action with respect to the transactions described in this Agreement, the Fee Agreement and the Notes, and before taking any action with respect to these transactions, the Commission should discuss the information contained herein with the Commission’s own legal, accounting, tax, financial and other advisors, as the Commission deems appropriate.

Section 7.21. Redaction. In the event the Commission delivers to the Municipal Securities Rulemaking Board, or directly to the Municipal Securities Rulemaking Board, in either instance pursuant to Rule G-34 (“CUSIP Numbers, New Issue, and Market Information Requirements”) or any similar rule or regulation, a copy of this Agreement or the Notes (including without limitation any amendments hereto or thereto), the Commission shall only provide or cause to be provided a copy of this Agreement and the Notes (including without limitation any amendments hereto or thereto), in the forms provided by the Bank, that redacts such confidential information contained in this Agreement and the Notes (including without limitation any amendments hereto or thereto) which could be used in a fraudulent manner, such as any VRDO liquidity bank routing or account numbers, staff names and contact information and fees assessed by the Bank, which redaction is consistent with MSRB Notice 2011-17 (February 23, 2011) and the Commission shall not provide or cause to be provided a copy of the Fee Agreement. The Bank shall provide such redacted copies of this Agreement and the Notes (including without limitation any amendments hereto or thereto) upon request by the Commission.

Section 7.22. Acknowledgement Regarding any Supported QFCs . To the extent that the Basic Documents provide support, through a guarantee or otherwise, for Swap Contract or any other agreement or instrument that is a QFC (such support, “QFC Credit Support” and, each such -81-
QFC, a “ Supported QFC ”), the parties acknowledge and agree as follows with respect to the resolution power of the FDIC under the Federal Deposit Insurance Act and Title II of the Dodd- Frank Wall Street Reform and Consumer Protection Act (together with the regulations promulgated thereunder, the “U.S. Special Resolution Regimes”) in respect of such Supported QFC and QFC Credit Support (with the provisions below applicable notwithstanding that the Basic Documents and any Supported QFC may in fact be stated to be governed by the laws of the State of New York and/or of the United States or any other state of the United States):
(a) In the event a Covered Entity that is party to a Supported QFC (each, a “Covered Party ”) becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer of such Supported QFC and the benefit of such QFC Credit Support (and any interest and obligation in or under such Supported QFC and such QFC Credit Support, and any ri ghts in property securing such Supported QFC or such QFC Credit Support) from such Covered Party will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if the Supported QFC and such QFC Credit Support (and any such interest, obligation and rights in property) were governed by the laws of the United States or a state of the United States. In the event a Covered Party or a BHC Act Affiliate of a Covered Party becomes subject to a proceeding under a U.S .

Special Resolution Regime, Default Rights under the Basic Documents that might otherwise apply to such Supported QFC or any QFC Credit Support that may be exercised against such Covered Party are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if the Supported QFC and the Basic Documents were governed by the laws of the United States or a state of the United States.
(b) As used in this Section 7.22, the following terms have the following meanings:
“BHC Act Affiliate” of a party means an “affiliate” (as such term is defined under, and interpreted in accordance with, 12 U.S.C. 1841(k)) of such party. “Covered Entity” means any of the following:
(i) a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b);
(ii) a “covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or
(iii) a “covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b).
“Default Right” has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable. -82-
“QFC” has the meaning assigned to the term “qualified financial contract” in, and shall be interpreted in accordance with, 12 U.S.C. 5390(c)(8)(D). [Signature pages follow]

[Signature Page to Revolving Credit Agreement]
IN WITNESS WHEREOF, the Commission and the Bank have duly executed this Agreement as of the date first above written.

PUBLIC UTILITIES COMMISSION OF THE CITY AND

COUNTY OF SAN FRANCISCO
By: ____________________________________
Name: _____________________________
Title: ______________________________
Approved as to Form:
________________________
City Attorney of the City and County of
San Francisco
By: _________________________________
Name: __________________________
Title: ___________________________
Acknowledged:
_________________________
Director of Public Finance of the City and
County of San Francisco
By: _________________________________
Name: __________________________
Title: ___________________________

[Signature Page to Revolving Credit Agreement]

WELLS FARGO BANK, NATIONAL ASSOCIATION
By: ____________________________________
Name: ____________________________
Title: _____________________________

EXHIBIT A

FORM OF NOTICE OF BORROWING
[Date]
TO: Wells Fargo Bank, National Association (the “Bank”) FROM: Public Utilities Commission of the City and County of San Francisco (the “Commission”) Re: Revolving Credit Agreement
dated as of February [__], 2025 (together with any amendments or supplements thereto, the “Credit Agreement”) between
the Commission and the Bank
We hereby give notice, pursuant to Section 2.02(a) of the Credit Agreement, of the following proposed Borrowing:

Date of Borrowing .......................................................................................... [Date] Loan Principal Amount ....................................................................... [$xx,xxx,xxx] Amount of Loans Outstanding .......................................................... [$xxx,xxx,xxx] The Loan Maturity Date.................................................................................. [Date] The Proceeds of such Loan are to be wire transferred to the following account:

[WIRE INSTRUCTIONS]
The Loan constituting such Borrowing
is to be a (check applicable box):

Power System Loan under the Power Commitment [___]
Water System Loan under the Water Commitment [___]

The Loan constituting such Borrowing is
to be a (check applicable box):

Taxable Loan [___]
Tax-exempt Loan [___]
The rates of interest on the Loan will not exceed the Maximum Rate. Terms used herein have the meanings assigned to them in the Credit Agreement. -2-

PUBLIC UTILITIES COMMISSION OF THE CITY AND

COUNTY OF SAN FRANCISCO
By: _________________________________
Name: ______________________________
Title: _____________________________

EXHIBIT B

FORM OF NOTICE OF CONVERSION
To: Wells Fargo Bank, National Association (the “Bank”) Re: Public Utilities Commission of the City and County of San Francisco (the “Commission”)
Ladies and Gentlemen:

The undersigned, an Authorized Representative, refers to the Revolving Credit Agreement, dated as of February [__], 2025 (together with any amendments or supplements thereto, the “Agreement”), between the Commission and the Bank (the terms defined therein being used herein as therein defined) and hereby gives the Bank notice irrevocably, pursuant to Section 2.02(a)(ii) of the Agreement, of the conversion of the Loan(s) specified herein, that:

1. The Business Day of the proposed conversion is __________, 20__ (the “Conversion Date”), which is at least three Business Days following the date hereof.

2. The aggregate amount of the [Water System][Power System] Loan(s) to be converted is $______________.

3. The [Water System][Power System] Loan(s) to be converted are currently Tax-exempt Loans.

4. The [Water System][Power System] Loan(s) is/are Tax-exempt Loan(s) to be converted into [a] Taxable Loan(s).

5. The principal amount of the [Water System][Power System] Loans to be outstanding following the conversion will not exceed the [Water System][Power System]Commitment as of the Conversion Date set forth in 1 above.

-2-

IN WITNESS WHEREOF, the undersigned has executed and delivered this Notice of Continuation/Conversion as of the ______ day of _______________, _____.

PUBLIC UTILITIES COMMISSION OF THE CITY AND

COUNTY OF SAN FRANCISCO
By: _________________________________
Name: ______________________________
Title: _____________________________

EXHIBIT C

FORM OF COMPLIANCE CERTIFICATE
This Compliance Certificate (this “Certificate”) is furnished to [•] (the “Bank”) pursuant to Section 5.1(a)(i) of the Revolving Credit Agreement , dated as of [•] (the “Revolving Credit Agreement”), by and between the Public Utilities Commission of the City and County of San Francisco (the “Commission”) and the Bank. Terms used herein and not otherwise defined herein shall have the meanings assigned to them in the Revolving Credit Agreement.

The undersigned hereby certifies that:

1. I am an Authorized Representative of the Commission;

2. As it relates to the [Water System][Power System], I have reviewed the terms of the Agreement and I have made, or have caused to be made under my supervision, a detailed review of the activities, transactions and conditions of the Commission during the accounting period covered by the attached financial statements for the purpose of determining whether or not the Commission has complied with all of the terms, provisions and conditions of the Revolving Credit Agreement and the other Basic Documents;

3. As it relates to the [Water System][Power System], to the best of my knowledge, the financial statements required by Section 5.1(a)(i) of the Revolving Credit Agreement and being furnished to you concurrently with this Certificate present fairly the financial position of the Commission as of the date they purport to represent and the revenues, expenses and changes in fund balances and in financial position for the periods then ended;

4. Based on the examinations described in paragraph 2: Check One of the Following:

As it relates to the [Water System][Power System], n o Default or Event of Default has occurred and is continuing; or
As it relates to the [Water System][Power System], a Default or Event of Default has occurred and is continuing, under the following circumstances:
[Include description of circumstances and Commission remedial actions. ]

5. Based on the examinations described in paragraph 2: Check One of the Following:
-2-

As it relates to the [Water System][Power System], the representations and warranties of the Commission contained in Article Four of the Revolving Credit Agreement are true and correct; or
As it relates to the [Water System][Power System], the following representations and warranties of the Commission contained in Article Four of the Revolving Credit Agreement are not true and correct, under the following circumstances:
[Include description of circumstances and Commission remedial actions.] The foregoing certifications and the financial statements delivered with this Certificate are hereby made and delivered this _____ day of __________, _____.

PUBLIC UTILITIES COMMISSION OF THE CITY AND

COUNTY OF SAN FRANCISCO
By: ____________________________________
Name: _____________________________
Title: ______________________________

EXHIBIT D
2025 LIST OF CITY HOLIDAYS

New Y ear’ s D ay: January 1, 2025
Dr. Martin L uther K ing, Jr. Day: January 20, 2025
Presi dents’ D ay: February 17, 2025
M emori al D ay: M ay 26, 2025
J uneteenth : June 19, 2025
I ndependence D ay : July 4, 2025
L abor D ay: September 1, 2025
I ndigenous Peoples’ Day : October 13, 2025
V eterans’ D ay: November 11, 2025
T hanksgi vi ng D ay and the day after : November 27, 2025 and November 28, 2025 Chri stmas D ay : D ecember 25, 2025

EXHIBIT E

CITY REQUIREMENTS
[Updated list to be provided by the City Attorney] – to be provided by Deputy City Attorney

EXHIBIT F

FORM OF POWER SYSTEM TAXABLE NOTE

PUBLIC UTILITIES COMMISSION

OF THE CITY AND COUNTY OF SAN FRANCISCO

REVOLVING OBLIGATIONS
(POWER SERIES, PROPOSITION A)
SUBSERIES R-1-T
February [__], 2025 San Francisco, California
For value received, P UBLIC UTILITIES COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO (the “Commission”) promises to pay to the order of Wells Fargo Bank, National Association (the “Bank”) the aggregate unpaid principal amount of all Taxable Loans under the Power Commitment made by the Bank from time to time pursuant to the Agreement referred to below on the dates and in the amounts provided for in the Agreement , as it relates to the Power System.

The Commission promises to pay interest on the unpaid principal amount of such Taxable Loans made by the Bank under the Power Commitment on the dates and at the rates provided for in the Revolving Credit Agreement, dated as of February [__], 2025 (as amended, restated, or supplemented from time to time, the “Agreement” ), by and between the Commission and the Bank, as it relates to the Power System . All payments of principal and interest shall be made in lawful money of the United States of America in immed iately available funds . All capitalized terms used herein and not otherwise defined herein shall have the meanings specified in the Agreement.

This note is the Power System Taxable Note referred to in the Agreement and is entitled to the benefits thereof and of the Power Basic Documents referred to therein . As provided in the Agreement, this Note is subject to prepayment, in whole or in part . In case an Event of Default (as defined in the Agreement and as it relates to the Power System) shall occur and be continuing, the principal of and accrued interest on this Taxable Note may be declared due and payable in the manner and with the effect provided in the Agreement, as it relates to the Power System.

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

Notwithstanding any other provision hereof or of the Agreement to the contrary, the obligations of the Commission hereunder are payable solely from the Available Power Enterprise Revenues. This Taxable Note constitutes a valid and binding obligation of the Commission and

-2-

is secured by, and payable from, the Available Power Enterprise Revenues and from the proceeds of subsequent borrowings by the Commission.

The Commission hereby waives presentment, demand, notice, protest and all other demands and notices in connection with the delivery, acceptance, performance and enforcement of this Taxable Note and assent to the extensions of the time of payment or forbear ance or other indulgence without notice.

The provisions set forth in Section 7.14 of the Agreement shall govern this Taxable Note. [Remainder of page intentionally left blank]

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

PUBLIC UTILITIES COMMISSION OF THE CITY AND

COUNTY OF SAN FRANCISCO
By: ____________________________________
Name: ______________________________
Title: _______________________________

TRANSACTIONS
ON

POWER TAXABLE NOTE
DATE

AMOUNT OF TAXABLE
LOAN

AMOUNT OF

PRINCIPAL PAID

DATE TO WHICH

INTEREST PAID

NOTATION

MADE BY

EXHIBIT G

FORM OF WATER SYSTEM TAXABLE NOTE

PUBLIC UTILITIES COMMISSION

OF THE CITY AND COUNTY OF SAN FRANCISCO

REVOLVING OBLIGATIONS
(WATER SERIES, PROPOSITION E)
SUBSERIES R-2-T
February [__], 2025 San Francisco, California
For value received, P UBLIC UTILITIES COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO (the “Commission”) promises to pay to the order of Wells Fargo Bank, National Association (the “Bank”) the aggregate unpaid principal amount of all Taxable Loans under the Water Commitment made by the Bank from time to time pursuant to the Agreement referred to below on the dates and in the amounts provided for in the Agreement , as it relates to the Water System.

The Commission promises to pay interest on the unpaid principal amount of such Taxable Loans made by the Bank under the Water Commitment on the dates and at the rates provided for in the Revolving Credit Agreement, dated as of February [__], 2025 (as amended, restated, or supplemented from time to time, the “Agreement” ), by and between the Commission and the Bank, as it relates to the Water System . All payments of principal and interest shall be made in lawful money of the United States of America in immed iately available funds . All capitalized terms used herein and not otherwise defined herein shall have the meanings specified in the Agreement.

This note is the Water System Taxable Note referred to in the Agreement and is entitled to the benefits thereof and of the Water Basic Documents referred to therein . As provided in the Agreement, this Note is subject to prepayment, in whole or in part . In case an Event of Default (as defined in the Agreement and as it relates to the Water System) shall occur and be continuing, the principal of and accrued interest on this Taxable Note may be declared due and payable in the manner and with the effect provided in the Agreement, as it relates to the Water System.

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Notwithstanding any other provision hereof or of the Agreement to the contrary, the obligations of the Commission hereunder are payable solely from the Available Water Enterprise Revenues. This Taxable Note constitutes a valid and binding obligation of the Commission and is secured by, and payable from, the Available Water Enterprise Revenues and from the proceeds of subsequent borrowings by the Commission.

The provisions set forth in Section 7.14 of the Agreement shall govern this Taxable Note. [Remainder of page intentionally left blank]

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

PUBLIC UTILITIES COMMISSION OF THE CITY AND

COUNTY OF SAN FRANCISCO
By: ____________________________________
Name: ______________________________
Title: _______________________________

TRANSACTIONS
ON

WATER TAXABLE NOTE
DATE

AMOUNT OF TAXABLE
LOAN

AMOUNT OF

PRINCIPAL PAID

DATE TO WHICH

INTEREST PAID

NOTATION

MADE BY

EXHIBIT H

FORM OF POWER SYSTEM TAX-EXEMPT NOTE

PUBLIC UTILITIES COMMISSION

OF THE CITY AND COUNTY OF SAN FRANCISCO

REVOLVING OBLIGATIONS
(POWER SERIES, PROPOSITION A)
SUBSERIES R-1
February [__], 2025 San Francisco, California

FOR VALUE RECEIVED, PUBLIC UTILITIES COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO (the “Commission”) promises to pay to the order of Wells Fargo Bank, National Association (the “Bank”) the aggregate unpaid principal amount of all Tax -Exempt Loans under the Power Commitment made by the Bank from time to time pursuant to the Agreement referred to below on the dates and in the amounts provided for in the Agreement, as it relates to the Power System.

The Commission promises to pay interest on the unpaid principal amount of such Tax - Exempt Loans made by the Bank under the Power Commitment on the dates and at the rates provided for in the Revolving Credit Agreement, dated as of February [__], 2025 (as amended, restated or supplemented from time to time, the “Agreement” ), by and between the Commission and the Bank. All payments of principal and interest shall be made in lawful money of the United States of America in immediately available funds . All capi talized terms used herein and not otherwise defined herein shall have the meanings specified in the Agreement.

This note is the Power System Tax-Exempt Note referred to in the Agreement and is entitled to the benefits thereof and of the Power Basic Documents referred to therein. As provided in the Agreement, this Note is subject to prepayment, in whole or in part . In case an Event of Default (as defined in the Agreement and as it relates to the Power System) shall occur and be continuing, the principal of and accrued interest on this Tax -Exempt Note may be declared due and payable in the manner and with the effect provided in the Agreement, as it relates to the Power System.

The Bank agrees it will make a notation on the schedule attached hereto of all Tax-Exempt Loans evidenced hereby and all principal payments and prepayments made hereunder and of the date to which interest hereon has been paid; provided, however, that the failure to make any such notation shall not limit or otherwise affect the obligation of the Commission hereunder with respect to payments of principal of and interest on this Tax-Exempt Note.

Notwithstanding any other provision hereof or of the Agreement to the contrary, the obligations of the Commission hereunder are payable solely from the Available Power Enterprise Revenues. This Tax-Exempt Note constitutes a valid and binding obligation of the Commission

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and is secured by, and payable from, the Available Power Enterprise Revenues and from the proceeds of subsequent borrowings by the Commission.

The Commission hereby waives presentment, demand, notice, protest and all other demands and notices in connection with the delivery, acceptance, performance and enforcement of this Tax- Exempt Note and assent to the extensions of the time of payment or forbearance or other indulgence without notice.

The provisions set forth in Section 7.14 of the Agreement shall govern this Tax- Exempt Note.
[Remainder of page intentionally left blank.]

[Signature Page to Power System Tax-Exempt Note (SFPUC)] IN WITNESS WHEREOF, the Public Utilities Commission of the City and County of San Francisco has caused this Tax-Exempt Note to be signed in its corporate name as an instrument under seal by its duly authorized officer on the date and in the year first above written.

PUBLIC UTILITIES COMMISSION OF THE CITY AND

COUNTY OF SAN FRANCISCO
By: ____________________________________
Name: ______________________________
Title: _______________________________

TRANSACTIONS
ON

POWER SYSTEM TAX-EXEMPT NOTE
DATE

AMOUNT OF TAX-

EXEMPT LOAN

AMOUNT OF

PRINCIPAL PAID

DATE TO WHICH

INTEREST PAID

NOTATION

MADE BY

EXHIBIT I

FORM OF WATER SYSTEM TAX-EXEMPT NOTE

PUBLIC UTILITIES COMMISSION

OF THE CITY AND COUNTY OF SAN FRANCISCO

REVOLVING OBLIGATIONS
(WATER SERIES, PROPOSITION E)
SUBSERIES R-2
February [__], 2025 San Francisco, California

FOR VALUE RECEIVED, PUBLIC UTILITIES COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO (the “Commission”) promises to pay to the order of Wells Fargo Bank, National Association (the “Bank”) the aggregate unpaid principal amount of all Tax -Exempt Loans under the Water Commitment made by the Bank from time to time pursuant to the Agreement referred to below on the dates and in the amounts provided for in the Agreement, as it relates to the Water System.

The Commission promises to pay interest on the unpaid principal amount of such Tax - Exempt Loans made by the Bank under the Water Commitment on the dates and at the rates provided for in the Revolving Credit Agreement, dated as of February [__], 2025 (as amended, restated or supplemented from time to time, the “Agreement” ), by and between the Commission and the Bank, as it relates to the Water System . All payments of principal and interest shall be made in lawful money of the United States of America in immediately available funds . All capitalized terms used herein and not otherwise defined herein shall have the meanings specified in the Agreement.

This note is the Water System Tax-Exempt Note referred to in the Agreement and is entitled to the benefits thereof and of the Water Basic Documents referred to therein. As provided in the Agreement, this Note is subject to prepayment, in whole or in part . In case an Event of Default (as defined in the Agreement and as it relates to the Water System ) shall occur and be continuing, the principal of and accrued interest on this Tax -Exempt Note may be declared due and payable in the manner and with the effect provided in the Agreement, as it relates to the Water System.

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Notwithstanding any other provision hereof or of the Agreement to the contrary, the obligations of the Commission hereunder are payable solely from the Available Water Enterprise Revenues. This Tax-Exempt Note constitutes a valid and binding obligation of the Commission and is secured by, and payable from, the Available Water Enterprise Revenues and from the proceeds of subsequent borrowings by the Commission.

The Commission hereby waives presentment, demand, notice, protest and all other demands and notices in connection with the delivery, acceptance, performance and enforcement of this Tax- Exempt Note and assent to the extensions of the time of payment or forbearance or other indulgence without notice.

The provisions set forth in Section 7.14 of the Agreement shall govern this Tax- Exempt Note.
[Remainder of page intentionally left blank.]

[Signature Page to Water System Tax-Exempt Note (SFPUC)] IN WITNESS WHEREOF, the Public Utilities Commission of the City and County of San Francisco has caused this Tax-Exempt Note to be signed in its corporate name as an instrument under seal by its duly authorized officer on the date and in the year first above written.

PUBLIC UTILITIES COMMISSION OF THE CITY AND

COUNTY OF SAN FRANCISCO
By: ____________________________________
Name: ______________________________
Title: _______________________________

TRANSACTIONS
ON

WATER SYSTEM TAX-EXEMPT NOTE
DATE

AMOUNT OF TAX-

EXEMPT LOAN

AMOUNT OF

PRINCIPAL PAID

DATE TO WHICH

INTEREST PAID

NOTATION

MADE BY

EXHIBIT J

FORM OF POWER SYSTEM TAXABLE TERM NOTE

PUBLIC UTILITIES COMMISSION

OF THE CITY AND COUNTY OF SAN FRANCISCO

This note is the Power System Taxable Term Note referred to in the Agreement and is entitled to the benefits thereof and of the Power Basic Documents referred to therein. As provided in the Agreement, this Note is subject to prepayment, in whole or in part . In case an Event of Default (as defined in the Agreement and as it relates to the Power System) shall occur and be continuing, the principal of and accrued interest on this Taxable Note may be declared due and payable in the manner and with the effect provided in the Agreement , as it relates to the Power System.

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Notwithstanding any other provision hereof or of the Agreement to the contrary, the obligations of the Commission hereunder are payable solely from the Available Power Enterprise Revenues. This Taxable Note constitutes a valid and binding obligation of the Commission and is secured by, and payable from, the Available Power Enterprise Revenues and from the proceeds of subsequent borrowings by the Commission.

The provisions set forth in Section 7.14 of the Agreement shall govern this Taxable Note. [Remainder of page intentionally left blank]

[Signature Page to Power Taxable Term Note (SFPUC)]
IN WITNESS WHEREOF, the Public Utilities Commission of the City and County of San Francisco has caused this Taxable Note to be signed in its corporate name as an instrument under seal by its duly authorized officer on the date and in the year first above written.

PUBLIC UTILITIES COMMISSION OF THE CITY AND

COUNTY OF SAN FRANCISCO
By: ____________________________________
Name: ______________________________
Title: _______________________________

TRANSACTIONS
ON

POWER TAXABLE TERM NOTE
DATE

AMOUNT OF TAXABLE

TERM LOAN

AMOUNT OF

PRINCIPAL PAID

DATE TO WHICH

INTEREST PAID

NOTATION

MADE BY

EXHIBIT K

FORM OF WATER SYSTEM TAXABLE TERM NOTE

PUBLIC UTILITIES COMMISSION

OF THE CITY AND COUNTY OF SAN FRANCISCO

This note is the Water System Taxable Term Note referred to in the Agreement and is entitled to the benefits thereof and of the Water Basic Documents referred to therein. As provided in the Agreement, this Note is subject to prepayment, in whole or in part . In case an Event of Default (as defined in the Agreement and as it relates to the Water System ) shall occur and be continuing, the principal of and accrued interest on this Taxable Note may be declared due and payable in the manner and with the effect provided in the Agreement , as it relates to the Water System.

-2-
Notwithstanding any other provision hereof or of the Agreement to the contrary, the obligations of the Commission hereunder are payable solely from the Available Water Enterprise Revenues. This Taxable Note constitutes a valid and binding obligation of the Commission and is secured by, and payable from, the Available Water Enterprise Revenues and from the proceeds of subsequent borrowings by the Commission.

The provisions set forth in Section 7.14 of the Agreement shall govern this Taxable Note. [Remainder of page intentionally left blank]

[Signature Page to Water Taxable Term Note (SFPUC)]
IN WITNESS WHEREOF, the Public Utilities Commission of the City and County of San Francisco has caused this Taxable Note to be signed in its corporate name as an instrument under seal by its duly authorized officer on the date and in the year first above written.

PUBLIC UTILITIES COMMISSION OF THE CITY AND

COUNTY OF SAN FRANCISCO
By: ____________________________________
Name: ______________________________
Title: _______________________________

[Signature Page to Water Taxable Term Note (SFPUC)]

TRANSACTIONS
ON

WATER TAXABLE TERM NOTE
DATE

AMOUNT OF TAXABLE
LOAN

AMOUNT OF

PRINCIPAL PAID

DATE TO WHICH

INTEREST PAID

NOTATION

MADE BY

EXHIBIT L

FORM OF POWER SYSTEM TAX-EXEMPT TERM NOTE

PUBLIC UTILITIES COMMISSION

OF THE CITY AND COUNTY OF SAN FRANCISCO

REVOLVING OBLIGATIONS
(POWER SERIES, PROPOSITION A)
SUBSERIES R-1
February [__], 2025 San Francisco, California

The Commission promises to pay interest on the unpaid principal amount of such Tax - Exempt Loans made by the Bank under the Power Commitment on the dates and at the rates provided for in the Revolving Credit Agreement, dated as of February [__], 2025 (as amended, restated or supplemented from time to time, the “Agreement” ), by and between the Commission and the Bank, as it relates to the Power System . All payments of principal and interest shall be made in lawful money of the United States of America in immediately available funds . All capitalized terms used herein and not otherwise defined herein shall have the meanings specified in the Agreement.

This note is the Power System Tax-Exempt Term Note referred to in the Agreement and is entitled to the benefits thereof and of the Power Basic Documents referred to therein. As provided in the Agreement, this Note is subject to prepayment, in whole or in part . In case an Event of Default (as defined in the Agreement and as it relates to the Power System) shall occur and be continuing, the principal of and accrued interest on this Tax -Exempt Note may be declared due and payable in the manner and with the effect provided in the Agreement.

Notwithstanding any other provision hereof or of the Agreement to the contrary, the obligations of the Commission hereunder are payable solely from the Available Power Enterprise Revenues. This Tax-Exempt Note constitutes a valid and binding obligation of the Commission

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and is secured by, and payable from, the Available Power Enterprise Revenues and from the proceeds of subsequent borrowings by the Commission.

The Commission hereby waives presentment, demand, notice, protest and all other demands and notices in connection with the delivery, acceptance, performance and enforcement of this Tax- Exempt Note and assent to the extensions of the time of payment or forbearance or other indulgence without notice.

The provisions set forth in Section 7.14 of the Agreement shall govern this Tax- Exempt Note.
[Remainder of page intentionally left blank.]

[Signature Page to Power System Tax-Exempt Term Note (SFPUC)] IN WITNESS WHEREOF, the Public Utilities Commission of the City and County of San Francisco has caused this Tax-Exempt Note to be signed in its corporate name as an instrument under seal by its duly authorized officer on the date and in the year first above written.

PUBLIC UTILITIES COMMISSION OF THE CITY AND

COUNTY OF SAN FRANCISCO
By: ____________________________________
Name: ______________________________
Title: _______________________________

TRANSACTIONS
ON

POWER SYSTEM TAX-EXEMPT TERM NOTE
DATE

AMOUNT OF TAX-

EXEMPT TERM LOAN

AMOUNT OF

PRINCIPAL PAID

DATE TO WHICH

INTEREST PAID

NOTATION

MADE BY

EXHIBIT M

FORM OF WATER SYSTEM TAX-EXEMPT TERM NOTE

PUBLIC UTILITIES COMMISSION

OF THE CITY AND COUNTY OF SAN FRANCISCO

REVOLVING OBLIGATIONS
(WATER SERIES, PROPOSITION E)
SUBSERIES R-1
February [__], 2025 San Francisco, California

FOR VALUE RECEIVED, PUBLIC UTILITIES COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO (the “Commission”) promises to pay to the order of Wells Fargo Bank, National Association (the “Bank”) the aggregate unpaid principal amount of all Tax -Exempt Loans under the Water Commitment made by the Bank from time to time pursuant to the Agreement referred to below on the dates and in the amounts provided for in the Agreement, as it relates to the Water System.

This note is the Water System Tax-Exempt Term Note referred to in the Agreement and is entitled to the benefits thereof and of the Water Basic Documents referred to therein. As provided in the Agreement, this Note is subject to prepayment, in whole or in part . In case an Event of Default (as defined in the Agreement and as it relates to the Water System ) shall occur and be continuing, the principal of and accrued interest on this Tax -Exempt Note may be declared due and payable in the manner and with the effect provided in the Agreement, as it relates to the Water System.

-2-
and is secured by, and payable from, the Available Water Enterprise Revenues and from the proceeds of subsequent borrowings by the Commission.

The Commission hereby waives presentment, demand, notice, protest and all other demands and notices in connection with the delivery, acceptance, performance and enforcement of this Tax- Exempt Note and assent to the extensions of the time of payment or forbearance or other indulgence without notice.

The provisions set forth in Section 7.14 of the Agreement shall govern this Tax- Exempt Note.
[Remainder of page intentionally left blank.]

[Signature Page to Water System Tax-Exempt Term Note (SFPUC)] IN WITNESS WHEREOF, the Public Utilities Commission of the City and County of San Francisco has caused this Tax-Exempt Note to be signed in its corporate name as an instrument under seal by its duly authorized officer on the date and in the year first above written.

PUBLIC UTILITIES COMMISSION OF THE CITY AND

COUNTY OF SAN FRANCISCO
By: ____________________________________
Name: ______________________________
Title: _______________________________

TRANSACTIONS
ON

WATER SYSTEM TAX-EXEMPT TERM NOTE
DATE

AMOUNT OF TAX-

EXEMPT TERM LOAN

AMOUNT OF

PRINCIPAL PAID

DATE TO WHICH

INTEREST PAID

NOTATION

MADE BY

EXHIBIT N

FORM OF REQUEST FOR EXTENDED FUNDED PERIOD

[DATE]
TO: Wells Fargo Bank, National Association (the “Bank”) Ladies and Gentlemen:

The undersigned, Public Utilities Commission of the City and County of San Francisco (the “Commission”), hereby refers to the Revolving Credit Agreement dated as of February [__], 2025 as amended, modified, supplemented or restated from time to time (the “Credit Agreement”), between the Commission and Wells Fargo Bank, National Association (the “Bank ”). All capitalized terms contained herein which are not specifically defined shall have the meanings assigned to such terms in the Credit Agreement.

As it relates to the [Water System][Power System], the Commission hereby requests, pursuant to Section 2.12(b) of the Credit Agreement, that the Term Loans be payable as provided in Section 2.12(b) of the Credit Agreement with interest as provided in Section 2.12(b) of the Credit Agreement.

In connection with such request, the Commission hereby represents and warrants that:
(a) as it relates to the [Water System][Power System], no Default or Event of Default has occurred and is continuing under the Agreement on the date that is the thirtieth (30
th) day immediately succeeding the Facility Maturity Date; and (b) as it relates to the [Water System][Power System], the representations and warranties of the Commission set forth in Article Four of the Credit Agreement are true and correct in all material respects as if made as of such date that is the thirtieth (30th) day immediately succeeding the Facility Maturity Date.

We have enclosed along with this request the following information:

1. The nature of any and all Defaults and Events of Default as it relates to the [Water System][Power System]; and

2. Any other pertinent information previously requested by the Bank.

Very truly yours,
By: ________________________________
Name: ______________________________
Title: ________________________

CHAPMAN DRAFT
JANUARY 17, 2025
1305518699-2__fee_agreement__sfpuc_water___power_wells___12_ 4457522

FEE AND INTEREST RATE AGREEMENT
DATED FEBRUARY [__], 2025
Reference is hereby made to (i) that certain Revolving Credit Agreement dated as of February [__], 2025 (as amended, restated, supplemented or otherwise modified from time to time in accordance with its terms, the “Agreement”), between the PUBLIC UTILITIES COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO (the “Commission”) and WELLS FARGO BANK, NATIONAL ASSOCIATION (together with its successors and assigns, the “Bank”), pursuant to which the Bank has agreed to make Loans from time to time to the Commission under separate lines of credit for the several benefit of the Water System and Power System . Capitalized terms used herein and not otherwise defined herein have the meanings set forth in the Agreement.

The purpose of this Fee and Interest Rate Agreement (this “ Fee Agreement ”) is to confirm the agreement between the Bank and the Commission with respect to the applicable Water Commitment Fee and Power Commitment Fee (each as defined below) and certain other fees payable by the Commission to the Bank and to define the terms “Water Daily SOFR Applicable Spread for Taxable Loans ,” “Water Daily SOFR Applicable Spread for Tax -exempt Loans,” “Power Daily SOFR Applicable Spread for Taxable Loans” and “Power Daily SOFR Applicable Spread for Tax-Exempt Loans” as used in the Agreement. This Fee Agreement is the Fee Agreement referenced in the Agreement, and the terms hereof are incorporated by reference into the Agreement. This Fee Agreement and the Agreement are to be construed as one agreement between the Commission and the Bank , and all obligations hereunder are to be construed as obligations thereunder. All references to amounts due and payable under the Agreement will be deemed to include all amounts, fees and expenses payable under this Fee Agreement.

ARTICLE I. FEES.

Section 1.1. Water Commitment Fee . The Commission agrees to pay to the Bank on April 1, 2025, for the period commencing on the Closing Date , and ending on March 31, 2025, and in arrears on the first Business Day of each July, October, January, and April occurring thereafter to and including the Termination Date, and on the Termination Date, a non- refundable commitment fee (the “ Water Commitment Fee ”) with respect to the unutilized portion of the Water Commitment for each day in the related fee period, in an amount equal to the rate per annum (the “ Water Commitment Fee Rate ”) corresponding to the Ratings set forth in the applicable Level in the pricing matrix below for each day in the related fee period on the unutilized portion of the Water Commitment for each day in the related fee period:
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LEVEL
MOODY’S

RATING S&P RATING FITCH RATING

WATER COMMITMENT

FEE RATE
Level 1 Aa3 or above AA- or above AA- or above 0.25%
Level 2 A1 A+ A+ 0.30%
Level 3 A2 A A 0.35%
Level 4 A3 A- A- 0.40%
Level 5 Baa1 BBB+ BBB+ 0.45%
Level 6 Baa2 BBB BBB 0.60%
The following clauses shall apply to the pricing matrix set forth above:
(a) The term “Rating” as used in the initial paragraph of this Section 1.1 and for the purposes of the pricing matrix set forth above in this Section 1.1 and the pricing matri x set forth below in Section 1.3 shall mean the lowest Water Rating (as hereinafter defined). F or the avoidance of doubt, Level 6 is the Level with the lowest Ratings, and Level 1 is the Level with the highest Ratings for purposes of the pricing matrix set forth above in this Section 1.1 and the pricing matrix set forth below in Section 1.3 hereof.
(b) The term “Water Rating” means the long-term unenhanced debt rating assigned by Moody’s, S&P, or Fitch, as applicable, to any Senior Water Debt . I n the event of a split in the applicable Water Ratings (i.e., one of the Water Ratings is at a different Level than one or more of the other Water Ratings), the lowest Water Rating shall apply (the Water Rating is determined pursuant to this clause (b) shall be referred to herein as the “Applicable Water Rating”). (c) Any change in the Water Commitment Fee Rate resulting from a change in the Water Rating shall be and become effective as of and on the date of the announcement of such change. References to ratings above are references to rating categories as presently determined by the Rating Agencies and in the event of adoption of any new or changed rating system or a “global” rating scale by any such Rating Agency, the ratings from the Rating Agency in question referred to above shall be deemed to refer to the rating category under the new rating system that most closely approximates the applicable rating category as currently in effect. The Commission acknowledges that as of the Closing Date the Water Commitment Fee Rate is that specified above for Level 1 in the pricing matrix above . Upon the occurrence and during the continuance of an Event of Default, the Water Commitment Fee Rate shall be increased immediately and without notice by 1.00% per annum over the Water Commitment Fee Rate in effect for Level 6.

Section 1.2. Power Commitment Fee . The Commission agrees to pay to the Bank on April 1, 2025, for the period commencing on the Closing Date, and ending on March 31, 2025, and in arrears on the first Business Day of each July, October, January, and April occurring thereafter to and including the Termination Date, and on the Termination Date, a non- refundable commitment fee (the “ Power Commitment Fee ”) with respect to the unutilized portion of the Power Commitment for each day in the related fee period, in an amount equal to the rate per annum (the “ Power Commitment Fee Rate ”) corresponding to the Ratings set forth in the -3-
applicable Level in the pricing matrix below for each day in the related fee period on the unutilized portion of the Power Commitment for each day in the related fee period:

LEVEL
MOODY’S

RATING S&P RATING FITCH RATING

POWER COMMITMENT

FEE RATE
Level 1 Aa3 or above AA- or above AA- or above 0.25%
Level 2 A1 A+ A+ 0.30%
Level 3 A2 A A 0.35%
Level 4 A3 A- A- 0.40%
Level 5 Baa1 BBB+ BBB+ 0.45%
Level 6 Baa2 BBB BBB 0.60%
The following clauses shall apply to the pricing matrix set forth above:
(a) The term “Rating” as used in the initial paragraph of this Section 1.2 and for the purposes of the pricing matrix set forth above in this Section 1.2 and the pricing matrix set forth below in Section 1.4 shall mean the lowest Power Rating (as hereinafter defined ). F or the avoidance of doubt, Level 6 is the Level with the lowest Ratings, and Level 1 is the Level with the highest Ratings for purposes of the pricing matrix set forth above in this Section 1.2 and the pricing matrix set forth below in Section 1.4 hereof.
(b) The term “Power Rating” means the long-term unenhanced debt rating assigned by Moody’s, S&P , or Fitch, as applicable, to Senior Power Debt . I n the event of a split in the applicable Power Ratings (i.e., one of the Power Ratings is at a different Level than one or more of the other Power Ratings), the lowest Power Rating shall apply (the Power Rating as determined pursuant to this clause (b) shall be referred to herein as the “Applicable Power Rating”).
(c) Any change in the Power Commitment Fee Rate resulting from a change in the Power Rating shall be and become effective as of and on the date of the announcement of such change. References to ratings above are references to rating categories as presently determined by the Rating Agencies and in the event of adoption of any new or changed rating system or a “global” rating scale by any such Rating Agency, the ratings from the Rating Agency in question referred to above shall be deemed to refer to the rating category under the new rating system that most closely approximates the applicable rating category as currently in effect. The Commission acknowledges that as of the Closing Date the Power Commitment Fee Rate is that specified above for Level 1 in the pricing matrix above . Upon the occurrence and during the continuance of an Event of Default, the Power Commitment Fee Rate shall be increased immediately and without notice by 1.00% per annum over the Power Commitment Fee Rate in effect for Level 6.

Section 1.3. Amendment, Consent or Waiver Fee . The Commission agrees to pay to the Bank on the date of each amendment, supplement, or modification to the Agreement or this Fee Agreement (or any Basic Document, the amendment, supplement or modification of which -4-
requires the consent of, or waiver from, the Bank ), a non-refundable fee equal to $2,500, or such other fee as may be reasonably agreed to between the Bank and the Commission in writing plus the reasonable fees and expenses of any legal counsel retained by the Bank in connection therewith.

Section 1.4. Water Applicable Spread. For purposes of the Agreement, “ Water Daily SOFR Applicable Spread for Taxable Loans” and the “Water Daily SOFR Applicable Spread for Tax-exempt Loans ” means a rate per annum associated with the Level corresponding to the Applicable Water Ratings, as specified below:

LEVEL
MOODY’S

RATING S&P RATING FITCH RATING

WATER DAILY
SOFR

APPLICABLE

SPREAD FOR

TAXABLE LOANS

WATER DAILY
SOFR

APPLICABLE SPREAD

FOR TAX-EXEMPT
LOANS
Level 1 Aa3 or above AA- or above AA- or above 0.65% 0.55% Level 2 A1 A+ A+ 0.80% 0.70%
Level 3 A2 A A 0.95% 0.85%
Level 4 A3 A- A- 1.10% 1.00%
Level 5 Baa1 BBB+ BBB+ 1.25% 1.15%
Level 6 Baa2 BBB BBB 1.50% 1.40%
Any change in the Water Daily SOFR Applicable Spread for Taxable Loans and the Water Daily SOFR Applicable Spread for Tax-exempt Loans resulting from a change in the Applicable Water Rating shall be and become effective as of and on the date of the announcement of such change.

References to ratings above are references to rating categories as presently determined by the Rating Agencies and in the event of adoption of any new or changed rating system, the ratings from the Rating Agency in question referred to above shall be deemed to refer to the rating category under the new rating system that most closely approximates the applicable rating category as currently in effect. The Commission acknowledges that as of the Closing Date the Water Daily SOFR Applicable Spread for Taxable Loans and the Water Daily SOFR Applicable Spread for Tax-exempt Loans are the spreads that are specified above for Level 1 of this Section

1.4. Section 1.5. Power Applicable Spread. For purposes of the Agreement, “ Power Daily SOFR Applicable Spread for Taxable Loans” and the “Power Daily SOFR Applicable Spread for Tax-exempt Loans ” means a rate per annum associated with the Level corresponding to the Applicable Power Ratings, as specified below:

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LEVEL
MOODY’S

RATING S&P RATING FITCH RATING

POWER DAILY

SOFR APPLICABLE

SPREAD FOR

TAXABLE LOANS

POWER DAILY SOFR

APPLICABLE SPREAD

FOR TAX-EXEMPT
LOANS
Level 1 Aa3 or above AA- or above AA- or above 0.65% 0.55% Level 2 A1 A+ A+ 0.80% 0.70%
Level 3 A2 A A 0.95% 0.85%
Level 4 A3 A- A- 1.10% 1.00%
Level 5 Baa1 BBB+ BBB+ 1.25% 1.15%
Level 6 Baa2 BBB BBB 1.50% 1.40%
Any change in the Power Daily SOFR Applicable Spread for Taxable Loans and the Power Daily SOFR Applicable Spread for Tax-exempt Loans resulting from a change in a Power Rating shall be and become effective as of and on the date of the announcement of such change.

References to ratings above are references to rating categories as presently determined by the Rating Agencies and in the event of adoption of any new or changed rating system, the ratings from the Rating Agency in question referred to above shall be deemed to refer to the rating category under the new rating system that most closely approximates the applicable rating category as currently in effect. The Commission acknowledges that as of the Closing Date the Power Daily SOFR Applicable Spread for Taxable Loans and the Power Daily SOFR Applicable Spread for Tax-exempt Loans are the spreads that are specified above for Level 1 of this Section

1.5. A
RTICLE II. MISCELLANEOUS.

Section 2.1. Amendments. No amendment to this Fee Agreement shall become effective without the prior written consent of the Commission and the Bank.

Section 2.2. Governing Law . (a) T HIS FEE AGREEMENT SHALL BE GOVERNED BY , AND

CONSTRUED IN ACCORDANCE WITH , THE LAWS OF THE STATE OF CALIFORNIA WITHOUT GIVING EFFECT TO CONFLICTS OF LAWS PROVISIONS ; PROVIDED THAT THE BANK’S OBLIGATIONS

HEREUNDER SHALL BE GOVERNED BY , AND CONSTRUED IN ACCORDANCE WITH , THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAWS PROVISIONS . THIS FEE AGREEMENT IS SUBJECT TO SECTION 7.14 OF THE AGREEMENT IN ALL RESPECTS.

Section 2.3. Counterparts. This Fee Agreement may be executed in multiple counterparts, each of which shall constitute an original but both or all of which, when taken together, shall constitute but one instrument and any of the parties hereto may execute this Fee Agreement by signing such counterpart. This Fee Agreement may be delivered by the exchange of signed signature pages by facsimile transmission or by e -mail with a pdf copy or other -6-
replicating image attached, and any printed or copied version of any signature page so delivered shall have the same force and effect as an originally signed version of such signature page.

Section 2.4. Severability. Any provision of this Fee Agreement which is prohibited, unenforceable or not authorized in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition, unenforceability or non- authorization without invalidating the remaining provisions hereof or affecting the validity, enforceability or legality of such provision in any other jurisdiction.

Section 2.5. Obligations of the Commission. No amount payable by the Commission under this Fee Agreement shall constitute or evidence indebtedness of the City or a lien or charge on any property or the general revenues of the City but shall constitute and evidence an obligation of the Commission payable only from (i) the Commission ’s Available Water Enterprise Revenues with respect to the Water Commitment only, and (ii) the Commission’s Available Power Enterprise Revenues with respect to the Power Commitment only, each of which, as applicable, shall be allocated in the sole discretion of the Commission . No other fund or account held by or on behalf of the Commission (or any other division thereof) are available to satisfy any such obligation.

Section 2.6. Representation by Legal Counsel; Joint Preparation. The parties hereto have participated jointly in the negotiation and drafting of this Fee Agreement, and each of the parties was represented by its respective legal counsel during the negotiation and execution of this Fee Agreement. In the event an ambiguity or question of intent or interpretation arises, this Fee Agreement shall be construed as if drafted jointly by the parties , and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Fee Agreement.

Section 2.7. No Disclosure. Unless required by law, the Commission shall not deliver or permit, authorize or consent to the delivery of this Fee Agreement to any Person or for posting on the Electronic Municipal Market Access website as provided by the Municipal Securities Rulemaking Board unless the Bank provides its prior written consent. [S
IGNATURE PAGES FOLLOW]

Signature Page to Fee and Interest Rate Agreement
IN WITNESS WHEREOF, the parties hereto have caused this Fee Agreement to be duly executed and delivered by their respective officers thereunto duly authorized as of the date first written above.

PUBLIC UTILITIES COMMISSION OF THE CITY AND

COUNTY OF SAN FRANCISCO
By: ____________________________________
Name: Dennis J. Herrera
Title: General Manager
Approved as to Form:

City Attorney of the City and County of
San Francisco
By: _________________________________
Name: Katherine Thursby Ortega
Title: Deputy City Attorney
Acknowledged:

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

Signature Page to Fee and Interest Rate Agreement

WELLS FARGO BANK, NATIONAL ASSOCIATION
By: ____________________________________
Name: _____________________________
Title: _______________________________

CleanPowerSF Sfpuc CommissionFebruary 25, 2025

CleanPowerSF Sfpuc Commission
February 25, 2025