Agenda packet — Daly City City Council, February 23, 2026 (part 2 of 2)

53 shall be considered or deemed to have been paid until the WIFIA Lender shall have received irrevocable payment in immediately available funds in accordance with the requirements for payment set forth in this Agreement.
(l) Hedging. Other than Qualified Swap Agreements, no Obligor shall enter into any swap or hedging transaction, including inflation indexed swap transactions, “cap” or “collar” transactions, futures, or any other hedging transaction without the prior written consent of the WIFIA Lender. No Obligor shall enter into any Qualified Swap Agreement for a speculative purpose.

Section 16. Reporting Requirements.
(a) Updated Financial Model.
(i) The Members (or the City on behalf of the Members) shall provide to the WIFIA Lender not later than ninety (90) days after the beginning of each Fiscal Year, an updated Base Case Financial Model reflecting the (A) then-current conditions and (B) projected conditions for a period not less than the greater of (1) the next five (5) succeeding Fiscal Years, (2) the duration of the City’s then-current adopted capital improvement plan period for the Water Enterprise and (3) the duration of the District’s then-adopted capital improvement plan period for the Sewer Enterprise.
(ii) The Updated Financial Model shall demonstrate to the satisfaction of the WIFIA Lender that the Members (or the City on behalf of the Members) have developed and identified adequate revenues to implement a plan for operating, maintaining and repairing the Project over its useful life, and shall include: (A) each Member’s capital improvement plan, major maintenance plan, projected rates and charges, projected debt outstanding and annual debt service, projected Revenues and projected Maintenance and Operation Costs; (B) evidence of compliance with the Rate Covenant for the most recent Fiscal Year and the projected Rate Covenant Debt Service coverages for the duration of the period set forth in Section 16(a)(i)(B) (Reporting Requirements – Updated Financial Model); (C) a written narrative identifying any material changes to the underlying assumptions from the previous Updated Financial Model; and (D) a certificate signed by the City’s Authorized Representative and the District’s Authorized Representative, certifying that (1) the Updated Financial Model, including the assumptions and supporting documentation, as of its date, is accurate and reasonable to the best of each Member’s knowledge and belief, (2) each Member’s annual projected Net Revenues are projected to be sufficient to meet the WIFIA Loan Amortization Schedule and to satisfy the Rate Covenant through the Final Maturity Date, and (3) each Member is in compliance with its obligations in respect of the Rate Covenant pursuant to Section 14(a) (Affirmative Covenants – Rate Covenant).
(iii) The delivery of the Updated Financial Model to the WIFIA Lender shall constitute a representation and warranty by each Member that the Updated Financial Model reflects such Member’s reasonable expectations, using assumptions that such Member believes to be reasonable, of its System’s expected operations, including capital costs, capital spending schedule, rates and revenues or charges (if applicable), Revenues,

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54 Maintenance and Operation Costs, major maintenance costs, financing structure and other scheduling, cost and financing elements required to be included in the Base Case Financial Model. The Updated Financial Model shall independently model the Project (as well as the Systems) addressing each of the foregoing as it may apply to the Project. (b) Annual Financial Statements. Each Obligor shall deliver to the WIFIA Lender, as soon as available, but no later than one hundred eighty (180) days after the end of each Fiscal Year; provided that the failure of an Obligor to deliver to the WIFIA Lender the annual audited financial statements and related certificate required under this Section 16(b) (Reporting Requirements – Annual Financial Statements) during the period that is one hundred eighty (180) days after the end of the applicable Fiscal Year shall not constitute a Default or an Event of Default so long as the relevant Obligor provides such annual audited financial statements and certificate within ninety (90) days after the end of such period:
(i) a copy of the audited financial statements, including a Statement of Net Position, a Statement of Revenues, Expenses and Changes in Fund Net Position, and a Statement of Cash Flows of such Obligor as of the end of such Fiscal Year (which may in each case be included and submitted to the WIFIA Lender as part of such Obligor’s audited comprehensive annual financial report) (A) certified without qualification or exception, or qualification as to the scope of the audit, by an independent public accounting firm selected by such Obligor and (B) which shall be complete and correct in all material respects and shall be prepared in reasonable detail and in accordance with GAAP applied consistently throughout the periods reflected therein (except, with respect to the annual financial statements, for changes approved or required by the independent public accountants certifying such statements and disclosed therein); and (ii) together with each delivery of such annual audited financial statements, a certificate signed by the applicable Authorized Representative stating whether or not, to such Obligor’s knowledge, during the annual period covered by such financial statements, there occurred any Default or Event of Default and, if any such Default or Event of Default shall have occurred during such period, the nature of such Default or Event of Default and the actions that such Obligor has taken or intends to take in respect thereof.
(c) Final Design Specifications. The Members (or the City on behalf of the Members) shall deliver to the WIFIA Lender, no later than thirty (30) days prior to (i) bid advertisement, a copy of the final specifications relating to the development and construction of the Project and (ii) any notice to proceed for the Project, a copy of the executed construction contract related to such notice to proceed and the final Project specifications. (d) Construction Reporting The WIFIA Lender shall have the right in its sole discretion to monitor (or direct its agents to monitor) the development of the Project, including environmental compliance, design, and construction of the Project. The Members (or the City on behalf of the Members) shall be responsible for administering construction oversight of the Project in accordance with applicable federal, state and local governmental requirements. Each Member agrees to cooperate in good faith with the WIFIA Lender in the conduct of such monitoring by promptly providing the WIFIA Lender with such reports, documentation or other information as

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55 shall be requested by the WIFIA Lender or its agents, including any independent engineer reports, documentation or information. During the period through Substantial Completion of the Project, the Members (or the City on behalf of the Members) shall furnish to the WIFIA Lender, on a quarterly basis, a report on the status of the Project, substantially in the form of Exhibit F (Form of Construction Monitoring Report). The report shall be executed by the City’s Authorized Representative and, for any quarter, shall be delivered to the WIFIA Lender within thirty (30) days of the following quarter (or if such day is not a Business Day, on the next following Business Day).

If the then-current projection for the Substantial Completion Date is a date later than the Projected Substantial Completion Date, the Members (or the City on behalf of the Members) shall provide in such report a description in reasonable detail to the reasonable satisfaction of the WIFIA Lender of the reasons for such projected delay, an estimate of the impact of such delay on the capital and operating costs of the Systems (if any), and a certification of the City’s Authorized Representative that the new date is not reasonably expected to result in a Material Adverse Effect. The Projected Substantial Completion Date shall automatically be adjusted to the new date specified by the Members in the Construction Monitoring Report unless the WIFIA Lender objects to the adjustment in writing to the Members within sixty (60) days following receipt of such Construction Monitoring Report on the basis that such report does not demonstrate the matters specified in this paragraph.
(e) Public Benefits Report. The Members (or the City on behalf of the Members) shall deliver to the WIFIA Lender a report, in the form of Exhibit G (Form of Public Benefits Report) (the “Public Benefits Report”), (i) no later than thirty (30) days prior to the Effective Date, (ii) within ninety (90) days following the Substantial Completion Date and (iii) within ninety (90) days following the fifth (5 th) anniversary of the Substantial Completion Date.

Each Obligor agrees that information described under this Section 16(e) (Reporting Requirements – Public Benefits Report) may be made publicly available by the WIFIA Lender at its discretion. (f) Modifications to Total Project Costs. For the period through the Substantial Completion Date, the Members (or the City on behalf of the Members) shall provide the WIFIA Lender with written notification at least thirty (30) days prior to instituting any increase or decrease to the aggregate Total Project Costs in an amount equal to or greater than ten percent (10%), which notification shall set forth the nature of the proposed increase or decrease and an estimate of the impact of such increase or decrease on the capital costs and operating costs of the Systems. The Members’ notice shall demonstrate that the proposed increase or decrease is consistent with the provisions of this Agreement, is necessary or beneficial to the Project, does not materially impair the WIFIA Lender’s security or any Obligor’s ability to comply with its obligations under the Related Documents (including any financial ratios or covenants included therein), and is not reasonably expected to result in a Material Adverse Effect. (g) Operations and Maintenance. The WIFIA Lender shall have the right, in its sole discretion, to monitor (or direct its agents to monitor) the Project’s operations and, as the WIFIA Lender may request from time to time, to receive reporting on the operation and management of the Project, and copies of any contracts relating to the operation and maintenance of the Project. The Members agree to cooperate in good faith with the WIFIA Lender in the conduct of such monitoring by promptly providing the WIFIA Lender with such reports, documentation, or other information requested by the WIFIA Lender. The WIFIA Lender has the right, in its sole discretion, to retain such consultants or advisors, to carry out the provisions of this

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56 Section 16(g) (Reporting Requirements – Operations and Maintenance). On or prior to the Substantial Completion Date, the Members (or the City on behalf of the Members) shall deliver to the WIFIA Lender an operations and maintenance manual with respect to the Project, in form and substance reasonably acceptable to the WIFIA Lender.
(h) Notices.
(i) Each Obligor shall, within fifteen (15) days (or such other time as specified below) after it learns of the occurrence, give the WIFIA Lender notice of any of the following events or receipt of any of the following notices, as applicable, setting forth details of such event (unless such notice has already been provided by another Obligor); provided that any notice required pursuant to paragraphs (A) (Substantial Completion), (D) (Delayed Governmental Approvals), (E) (Environmental Notices) or (H) (Uncontrollable Force) of this Section 16(h) may be provided by the City on behalf of the applicable Obligor:
(A) Substantial Completion: the occurrence of Substantial Completion, such notice to be provided in the form set forth in Exhibit E (Form of Certificate of Substantial Completion);
(B) Defaults; Events of Default: any Default or Event of Default; (C) Litigation: (1) the filing of any litigation, suit or action, or the commencement of any proceeding, against such Obligor before any arbitrator, Governmental Authority, alternative dispute resolution body, or other neutral third- party, or the receipt by such Obligor in writing of any threat of litigation, suit, action, or proceeding, or of any written claim against such Obligor that, in each case, could reasonably be expected to have a Material Adverse Effect, and any material changes in the status of such litigation, suit, action or claim, and (2) any judgment against such Obligor that could reasonably be expected to have a Material Adverse Effect, either individually or in the aggregate; (D) Delayed Governmental Approvals: any failure to receive or delay in receiving any Governmental Approval or making any required filing, notice, recordation or other demonstration to or with a Governmental Authority, in each case to the extent such failure or delay will or could reasonably be expected to result in a delay to any major milestone date (including the Projected Substantial Completion Date) set forth in the Construction Schedule, together with a written explanation of the reasons for such failure or delay and the applicable Obligor’s plans to remedy or mitigate the effects of such failure or delay; (E) Environmental Notices: any material notice of violation or material change in finding under any Environmental Law related to the Project or any material changes to the NEPA Determination;
(F) Amendments: except as otherwise agreed by the WIFIA Lender in writing, copies of fully executed amendments, modifications, replacements or supplements to any Related Document within ten (10) days

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57 following execution thereof; provided that such notice can be accomplished through an email to the WIFIA Lender that includes a link to the posting of the relevant documents on EMMA under the WIFIA CUSIP Number; (G) Related Document Defaults: any material breach or default or event of default on the part of such Obligor or any other party under any Related Document; provided that such notice can be accomplished through an email to the WIFIA Lender that includes a link to the posting of the relevant documents on EMMA under the WIFIA CUSIP Number;
(H) Uncontrollable Force: the occurrence of any Uncontrollable Force that could reasonably be expected to materially and adversely affect the Project;
(I) Ratings Changes: any change in the rating assigned to the WIFIA Loan or any other Obligations by any Nationally Recognized Rating Agency that has provided a public rating on the WIFIA Loan or such Obligations, and any notices, reports or other written materials (other than those that are ministerial in nature) received from any such rating agencies; provided that such notice can be accomplished through an email to the WIFIA Lender that includes a link to the posting of the relevant documents on EMMA under the WIFIA CUSIP Number;
(J) 2 C.F.R. § 180.350 Notices: any notification required pursuant to 2 C.F.R. § 180.350, whether attributable to a failure by such Obligor to disclose information previously required to have been disclosed or due to such Obligor or any of such Obligor’s principals meeting any of the criteria set forth in 2 C.F.R. § 180.335;
(K) Additional Construction Contracts: copies of any executed Additional Construction Contracts (together with any related contracts, side letters or other understandings);
(L) Issuance of Obligations: copies of any final Issuing Instrument (together with any continuing disclosure documents, ordinances, official statement, certifications or cash flow projections in connection therewith), prepared in connection with the incurrence of any Additional Obligations; provided that such notice can be accomplished through an email to the WIFIA Lender that includes a link to the posting of the relevant documents on EMMA under the WIFIA CUSIP Number;
(M) Postings on EMMA: the posting of any document on EMMA in accordance with the requirements of any continuing disclosure agreement or similar document with respect to any Outstanding Obligations relating to annual financial information and operating data and the reporting of significant events; provided that such notice can be accomplished through an email to the WIFIA

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58 Lender that includes a link to the posting of the relevant document on EMMA under the WIFIA CUSIP Number; and
(N) Other Adverse Events: the occurrence of any other event or condition, including any notice of breach from a contract counterparty or any holder of any Obligations, that could reasonably be expected to result in a Material Adverse Effect or have a material and adverse effect on the Project. (ii) Within thirty (30) calendar days after any Obligor learns of the occurrence of an event specified in Section 16(h)(i) (Reporting Requirements – Notices) (other than Section 16(h)(i)(A) (Reporting Requirements – Notices – Substantial Completion), Section 16(h)(i)(F) (Reporting Requirements – Notices – Amendments), Section 16(h)(i)(I) (Reporting Requirements – Notices – Ratings Changes) (in the case of a ratings upgrade), Section 16(h)(i)(K) (Reporting Requirements – Notices – Additional Construction Contracts), Section 16(h)(i)(L) (Reporting Requirements – Notices – Issuance of Obligations) or Section 16(h)(i)(M) (Reporting Requirements – Notices – Postings on EMMA)), the applicable Authorized Representative (or, in the case of Section 16(h)(i)(D) (Delayed Governmental Approvals), Section 16(h)(i)(E) (Environmental Notices) or Section 16(h)(i)(H) (Uncontrollable Force), the City’s Authorized Representative on behalf of the applicable Obligor) shall provide a statement to the WIFIA Lender setting forth the actions the applicable Obligor proposes to take with respect thereto. The Obligors (or the City on behalf of the applicable Obligor) shall also provide the WIFIA Lender with any further information reasonably requested by the WIFIA Lender from time to time concerning the matters described in Section 16(h)(i) (Reporting Requirements – Notices).
(i) Requested Information. Each Obligor shall, at any time while the WIFIA Loan remains outstanding, promptly deliver to the WIFIA Lender such additional information regarding the business, financial, legal or organizational affairs of such Obligor or regarding the Systems (including the Project), the Net Revenues or the Authority Revenues as the WIFIA Lender may from time to time reasonably request.

ARTICLE VI

EVENTS OF DEFAULT
Section 17. Events of Default and Remedies.
(a) An “Event of Default” shall exist under this Agreement if any of the following occurs; provided that the occurrence of an event set forth in Section 17(a)(ii) (Covenant Default), Section 17(a)(iii) (Misrepresentation Default), Section 17(a)(v) (Enforcement of Related Documents), Section 17(a)(vi) (Material Adverse Judgment) or Section 17(a)(ix) (Development Default) shall not constitute an Event of Default under this Agreement until the WIFIA Lender has provided a notice of such Event of Default to the Borrower; provided, further, that nothing in this Section 17(a) (Events of Default and Remedies) is intended to limit any obligation of the Borrower hereunder, including any obligation to cure any event or condition contemplated under this Section 17(a) (Events of Default and Remedies):

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59 (i) Payment Default. (A) The Borrower shall fail to pay when due any part of the principal amount of or interest on the WIFIA Loan (including WIFIA Debt Service required to have been paid pursuant to the provisions of Section 8 (Payment of Principal and Interest)) or (B) either Member shall fail to pay when due any part of any Authority Bond Payment required to have been paid pursuant to the provisions of any WIFIA FA, and, in each case, such failure continues for a period of five (5) days, when and as the payment thereof shall be required under this Agreement, the WIFIA Bond, any WIFIA FA or on the Final Maturity Date (each such failure, a “Payment Default”). (ii) Covenant Default. Any Obligor shall fail to observe or perform any covenant, agreement or obligation of such Obligor under this Agreement or any other WIFIA Loan Document (other than in the case of any Payment Default or any Development Default), and such failure shall not be cured within thirty (30) days after the earlier to occur of (A) receipt by such Obligor from the WIFIA Lender of written notice thereof or (B) such Obligor’s knowledge of such failure; provided that if such failure is capable of cure but cannot reasonably be cured within such thirty (30) day cure period, and such thirty (30) day cure period shall be extended by up to one hundred fifty (150) additional days, if and so long as (1) within such thirty (30) day cure period the applicable Obligor shall commence actions reasonably designed to cure such failure and shall diligently pursue such actions until such failure is cured and (2) such failure is cured within one hundred eighty (180) days of the date specified in either clause (A) or (B) above, as applicable.
(iii) Misrepresentation Default. Any of the representations, warranties or certifications of any Obligor made in or delivered pursuant to the WIFIA Loan Documents (or in any certificates delivered by any Obligor in connection with the WIFIA Loan Documents) shall prove to have been false or misleading in any material respect when made or deemed made (or any representation and warranty or certification that is subject to a materiality qualifier shall prove to have been false or misleading in any respect); provided that no Event of Default shall be deemed to have occurred under this Section 17(a)(iii) (Events of Default and Remedies – Misrepresentation Default) if and so long as (A) such misrepresentation is not intentional, (B) such misrepresentation is not a misrepresentation in respect of Section 12(g) (Representations and Warranties of Obligors – Security Interests), Section 12(h) (Representations and Warranties of Obligors – No Debarment), Section 12(i) (Representations and Warranties of Obligors – No Lobbying) or Section 12(k) (Representations and Warranties of Obligors – Compliance with Laws), (C) in the reasonable determination of the WIFIA Lender, such misrepresentation has not had, and would not reasonably be expected to result in, a Material Adverse Effect, (D) in the reasonable determination of the WIFIA Lender, the underlying issue giving rise to the misrepresentation is capable of being cured and (E) the underlying issue giving rise to the misrepresentation is cured by such Obligor within thirty (30) days after the date on which such Obligor first became aware (or reasonably should have become aware) of such misrepresentation.
(iv) Acceleration of Obligations. Any acceleration shall occur of the maturity of any Obligation, or any such Obligation shall not be paid in full upon the final maturity thereof.

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60 (v) Enforcement of Related Documents. The holder(s) of Obligations under a Related Document exercises remedies permitted thereunder for an event of default that has occurred and is continuing (and has not been cured or waived by the expiration of any applicable grace period), in respect of the performance of any covenant, agreement or obligation of any Obligor under such Related Document.
(vi) Material Adverse Judgment. Any final, non-appealable judgment related to the Net Revenues, the Authority Revenues, either System or the Project shall be entered against any Obligor that results in the impairment of (A) any Obligor’s ability to comply with any of such Person’s payment obligations under any other WIFIA Loan Document or (B) the existence, priority or perfection of the Borrower’s security interest in the Net Revenues or the WIFIA Lender’s security interest in the Authority Revenues, the Borrower’s rights with respect to the WIFIA FAs or the WIFIA Debt Service Account. (vii) Occurrence of Bankruptcy Related Event. A Bankruptcy Related Event shall occur.
(viii) Invalidity of WIFIA Loan Documents. (A) Any WIFIA Loan Document ceases to be in full force and effect (other than as a result of the termination thereof in accordance with its terms) or becomes void, voidable, illegal or unenforceable, or any Obligor contests in any manner the validity or enforceability of any WIFIA Loan Document to which it is a party or denies it has any further liability under any WIFIA Loan Document to which it is a party, or purports to revoke, terminate or rescind any WIFIA Loan Document to which it is a party; (B) either WIFIA FA ceases (other than as expressly permitted thereunder) to be effective or to grant a valid and binding security interest on any material portion of either Member’s Net Revenues, and with the priority purported to be created thereby; (C) this Agreement ceases to be effective or to grant a valid and binding security interest on any material portion of the Authority Revenues, the right, title and interest of the Borrower in the WIFIA FAs or the WIFIA Debt Service Account, other than as a result of actions or a failure to act by, and within the control of, the WIFIA Lender, and with the priority purported to be created thereby; or (D) any event occurs that results in the impairment in the validity, enforceability, perfection or priority of (1) the Borrower’s Lien on the Net Revenues or (2) the WIFIA Lender’s Lien on the Authority Revenues, the right, title and interest of the Borrower in the WIFIA FAs or the WIFIA Debt Service Account.
(ix) Development Default. A Development Default shall occur. (b) Upon (i) the occurrence of any Bankruptcy Related Event or (ii) the acceleration of any amounts under either WIFIA FA, all obligations of the WIFIA Lender hereunder with respect to the disbursement of any undisbursed amounts of the WIFIA Loan shall automatically be deemed terminated, and the Outstanding WIFIA Loan Balance, together with all interest accrued thereon and all fees, costs, expenses, indemnities and other amounts payable under this Agreement and the other WIFIA Loan Documents, shall automatically become immediately due and payable, without presentment, demand, notice, declaration, protest or other requirements of any kind, all of which are hereby expressly waived.

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61 (c) Upon the occurrence of any Event of Default, the WIFIA Lender, by written notice to the Obligors, may exercise any or all of the following remedies:
(i) the WIFIA Lender may suspend or terminate all of its obligations hereunder with respect to the disbursement of any undisbursed amounts of the WIFIA Loan;
(ii) the WIFIA Lender may apply the Default Rate provisions of Section 6 (Interest Rate);
(iii) the WIFIA Lender may suspend or debar any Obligor from further participation in any Government program administered by the WIFIA Lender and notify other departments and agencies of such default;
(iv) the WIFIA Lender shall be entitled and empowered to institute against an Obligor any actions or proceedings at law or in equity for the collection of any sums due and unpaid by such Obligor hereunder or under the other WIFIA Loan Documents, and may prosecute any such judgment or final decree against such Obligor and collect in the manner provided by law out of the property of such Obligor the moneys adjudged or decreed to be payable, and the WIFIA Lender shall have all of the rights and remedies of a creditor and may take such other actions at law or in equity against an Obligor as may appear necessary or desirable to collect all amounts payable by such Obligor under this Agreement or the other WIFIA Loan Documents then due and thereafter to become due, or to enforce performance and observance of any obligation, agreement or covenant of such Obligor under this Agreement or the other WIFIA Loan Documents, including directing the Borrower to exercise any rights or remedies under either WIFIA FA; and (v) the WIFIA Lender may declare the Outstanding WIFIA Loan Balance to be, and the same shall thereupon forthwith become, immediately due and payable, together with the interest accrued thereon and all fees, costs, expenses, indemnities and other amounts payable under this Agreement and the other WIFIA Loan Documents, all without presentment, demand, notice, declaration, protest or other requirements of any kind, all of which are hereby expressly waived. (d) Notwithstanding anything to the contrary set forth in any WIFIA Loan Document, the Borrower shall not have the right to (i) accelerate the Authority Bond Payments or (ii) exercise any other rights or remedies under either WIFIA FA following the occurrence of an “Event of Default” under and as defined in such WIFIA FA without the prior written direction of the WIFIA Lender.
(e) No action taken pursuant to this Section 17 (Events of Default and Remedies) shall relieve any Obligor from its obligations pursuant to this Agreement or the other WIFIA Loan Documents, all of which shall survive any such action.

ARTICLE VII

MISCELLANEOUS

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62 Section 18. Disclaimer of Warranty. The WIFIA Lender makes no warranty or representation, either express or implied, as to the value, design, condition, merchantability or fitness for a particular purpose or fitness for use of the Project or any portion thereof or any other warranty with respect thereto. In no event shall the WIFIA Lender be liable for any incidental, indirect, special or consequential damages incidental to or arising out of this Agreement or the System (including the Project) or the existence, furnishing, functioning or use of the Project or any item or products or services provided for in this Agreement.

Section 19. No Personal Recourse. No official, employee or agent of the WIFIA Lender or any Obligor or any Person executing this Agreement or any of the other WIFIA Loan Documents shall be personally liable on this Agreement or such other WIFIA Loan Documents by reason of the issuance, delivery or execution hereof or thereof.

Section 20. No Third-Party Rights. The parties hereby agree that this Agreement creates no third-party rights against any Obligor, the Government, or the WIFIA Lender, solely by virtue of the WIFIA Loan, and each Obligor agrees to indemnify on a joint and several basis and hold the WIFIA Lender, the Servicer (if any), the Administrator, and the Government harmless, to the extent permitted by law and in accordance with Section 32 (Indemnification), from any lawsuit or claim arising in law or equity solely by reason of the WIFIA Loan, and that no third-party creditor of any Obligor shall have any right against the WIFIA Lender with respect to the WIFIA Loan made pursuant to this Agreement.

Section 21. Obligors’ Authorized Representatives. Each Obligor shall at all times have appointed an authorized representative by designating such Person or Persons from time to time to act on such Obligor’s behalf pursuant to a written certificate furnished to the WIFIA Lender and the Servicer, if any, containing the specimen signature or signatures of such Person or Persons and signed by the Borrower.

Section 22. WIFIA Lender’s Authorized Representative. The WIFIA Lender hereby appoints the Director of the WIFIA Program, whose notice details are set forth below in Section 31 (Notices), to serve as the WIFIA Lender’s Authorized Representative under this Agreement until such time as a successor or successors shall have been appointed. Thereafter, the successor in office shall serve as the WIFIA Lender’s Authorized Representative. The WIFIA Lender shall provide notice to the Obligors within a reasonable time period following the succession.

Section 23. Servicer. The WIFIA Lender may from time to time designate another entity or entities to perform, or assist the WIFIA Lender in performing, the duties of the Servicer or specified duties of the WIFIA Lender under this Agreement and the WIFIA Bond. The WIFIA Lender shall give the Obligors written notice of the appointment of any successor or additional Servicer and shall enumerate the duties or any change in duties to be performed by any Servicer.

Any references in this Agreement to the WIFIA Lender shall be deemed to be a reference to the Servicer with respect to any duties which the WIFIA Lender shall have delegated to such Servicer.

The WIFIA Lender may at any time assume the duties of any Servicer under this Agreement and the WIFIA Bond. Each Obligor shall cooperate and respond to any reasonable request of the Servicer for information, documentation or other items reasonably necessary for the performance by the Servicer of its duties hereunder.

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63 Section 24. Amendments and Waivers. No amendment, modification, termination, or waiver of any provision of this Agreement or the WIFIA Bond shall in any event be effective without the prior written consent of each of the parties hereto.

Section 25. Governing Law. This Agreement shall be governed by the federal laws of the United States of America if and to the extent such federal laws are applicable and the internal laws of the State, if and to the extent such federal laws are not applicable.

Section 26. Severability. In case any provision in or obligation under this Agreement shall be invalid, illegal, or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby.

Section 27. Successors and Assigns. This Agreement shall be binding upon the parties hereto and their respective permitted successors and assigns and shall inure to the benefit of the parties hereto and their permitted successors and assigns. Neither the rights or obligations of any Obligor hereunder or under the WIFIA Bond nor any interest herein or therein may be assigned or delegated by such Obligor without the prior written consent of the WIFIA Lender.

Section 28. Remedies Not Exclusive. No remedy conferred herein or in the WIFIA Bond or reserved to the WIFIA Lender is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or under the WIFIA Bond or now or hereafter existing at law or in equity or by statute.

Section 29. Delay or Omission Not Waiver. No delay or omission of the WIFIA Lender to exercise any right or remedy provided hereunder or under the WIFIA Bond upon a default of any Obligor (except a delay or omission pursuant to a written waiver) shall impair any such right or remedy or constitute a waiver of any such default or acquiescence therein. Every right and remedy given by this Agreement or the WIFIA Bond or by law to the WIFIA Lender may be exercised from time to time, and as often as may be deemed expedient by the WIFIA Lender.

Section 30. Counterparts. This Agreement and any amendments, waivers, consents or supplements hereto or in connection herewith may be executed in any number of counterparts and by the different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute one and the same instrument; signature pages may be detached from multiple separate counterparts and attached to a single counterpart so that all signature pages are physically attached to the same document. Electronic delivery of an executed counterpart of a signature page of this Agreement or of any document or instrument delivered in connection herewith in accordance with Section 31 (Notices) shall be effective as delivery of an original executed counterpart of this Agreement or such other document or instrument, as applicable.

Section 31. Notices. Notices hereunder shall be (a) in writing, (b) effective as provided below and (c) given by (i) nationally recognized courier service, (ii) hand delivery, or (iii) email, in each case to:

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64 If to WIFIA Lender: Environmental Protection Agency
WJC-W 6201A
1200 Pennsylvania Avenue NW
Washington, D.C. 20460
Attention: WIFIA Director
Email: [email protected]

If to Borrower: Daly City Joint Powers Financing Authority 333 90th Street
Daly City, California 94015
Attention: General Manager
Email: [email protected]

If to City: City of Daly City
333 90th Street,
Daly City, California 94015
Attention: City Manager
Email: [email protected]

If to District: North San Mateo Sanitation District
333 90th Street
Daly City, California
Attention: General Manager
Email: [email protected]

Unless otherwise instructed by the WIFIA Lender’s Authorized Representative, all notices to the WIFIA Lender should be made by email to the email address noted above for the WIFIA Lender. Notices required to be provided herein shall be provided to such different addresses or to such further parties as may be designated from time to time by the applicable Authorized Representative, with respect to notices to the applicable Obligor, or by the WIFIA Lender’s Authorized Representative, with respect to notices to the WIFIA Lender or the Servicer. Each such notice, request or communication shall be effective (A) if delivered by hand or by nationally recognized courier service, when delivered at the address specified in this Section 31 (Notices) (or in accordance with the latest unrevoked written direction from the receiving party) and (B) if given by email, when such email is delivered to the address specified in this Section 31 (Notices) (or in accordance with the latest unrevoked written direction from the receiving party); provided that notices received on a day that is not a Business Day or after 5:00 p.m. Eastern Time on a Business Day will be deemed to be effective on the next Business Day.

Section 32. Indemnification. Each Obligor shall, to the extent permitted by law, indemnify on a joint and several basis the WIFIA Lender and any official, employee, agent, advisor or representative of the WIFIA Lender (each such Person being herein referred to as an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities, fines, penalties, costs and expenses (including the fees, charges and disbursements of any counsel for any Indemnitee and the costs of environmental remediation), whether known, unknown, contingent or otherwise, incurred by or asserted against any Indemnitee

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65 arising out of, in connection with, or as a result of (a) the execution, delivery and performance of this Agreement or any of the other Related Documents, (b) the WIFIA Loan or the use of the proceeds thereof, or (c) the violation of any law, rule, regulation, order, decree, judgment or administrative decision relating to the environment, the preservation or reclamation of natural resources, the management, release or threatened release of any hazardous material or to health and safety matters; in each case arising out of or in direct relation to the Project; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities, fines, penalties, costs or related expenses are determined by a court of competent jurisdiction by final and non-appealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee. In case any action or proceeding is brought against an Indemnitee by reason of any claim with respect to which such Indemnitee is entitled to indemnification hereunder, each Obligor shall be entitled, at its expense, to participate in the defense thereof; provided that such Indemnitee has the right to retain its own counsel, at such Obligor’s expense, and such participation by such Obligor in the defense thereof shall not release such Obligor of any liability that it may have to such Indemnitee. Any Indemnitee against whom any indemnity claim contemplated in this Section 32 (Indemnification) is made shall be entitled, after consultation with each Obligor and upon consultation with legal counsel wherein such Indemnitee is advised that such indemnity claim is meritorious, to compromise or settle any such indemnity claim. Any such compromise or settlement shall be binding upon each Obligor for purposes of this Section 32 (Indemnification). Nothing herein shall be construed as a waiver of any legal immunity that may be available to any Indemnitee. To the extent permitted by applicable law, no Obligor nor the WIFIA Lender shall assert, and each Obligor and the WIFIA Lender hereby waives, any claim against any Indemnitee or any Obligor, respectively, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any of the other Related Documents, the other transactions contemplated hereby and thereby, the WIFIA Loan or the use of the proceeds thereof; provided that nothing in this sentence shall limit any Obligor’s indemnity obligations to the extent such damages are included in any third-party claim in connection with which an Indemnitee is entitled to indemnification hereunder. All amounts due to any Indemnitee under this Section 32 (Indemnification) shall be payable promptly upon demand therefor. The obligations of each Obligor under this Section 32 (Indemnification) shall survive the payment or prepayment in full or transfer of the WIFIA Loan, the enforcement of any provision of this Agreement or the other Related Documents, any amendments, waivers (other than amendments or waivers in writing with respect to this Section 32) (Indemnification) or consents in respect hereof or thereof, any Event of Default, and any workout, restructuring or similar arrangement of the obligations of any Obligor hereunder or thereunder.

Section 33. Sale of WIFIA Loan. The WIFIA Lender shall not sell the WIFIA Loan at any time prior to the later of (a) the Substantial Completion Date and (b) other than with respect to a sale or transfer to another Governmental Entity within the Federal Government, the Final Disbursement Date. After such date, the WIFIA Lender may sell the WIFIA Loan to another entity or reoffer the WIFIA Loan into the capital markets only in accordance with the provisions of this Section 33 (Sale of WIFIA Loan). Such sale or reoffering shall be on such terms as the WIFIA Lender shall deem advisable. However, in making such sale or reoffering the WIFIA Lender shall not change the terms and conditions of the WIFIA Loan without the prior written consent of each Obligor in accordance with Section 24 (Amendments and Waivers). Prior to any sale or reoffering of the WIFIA Loan, the WIFIA Lender shall provide reasonable written notice to the Obligors of

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66 the WIFIA Lender’s intention to consummate such a sale or reoffering. The provision of any notice pursuant to this Section 33 (Sale of WIFIA Loan) shall neither (x) obligate the WIFIA Lender to sell nor (y) provide the Obligors with any rights or remedies in the event the WIFIA Lender, for any reason, does not sell the WIFIA Loan.

Section 34. Effectiveness. This Agreement shall be effective on the Effective Date.

Section 35. Termination. This Agreement shall terminate upon the irrevocable payment in full in immediately available funds by the Borrower of the Outstanding WIFIA Loan Balance, together with all accrued interest, fees and expenses with respect thereto; provided that the indemnification requirements of Section 32 (Indemnification), the reporting and record keeping requirements of Section 14(p) (Affirmative Covenants – Access; Records) and the payment requirements of Section 10 (Fees and Expenses) shall survive the termination of this Agreement as provided in such sections.

Section 36. Integration. This Agreement, together with the other WIFIA Loan Documents, constitutes the entire contract between the parties relating to the subject matter hereof and supersedes any and all previous agreements and understandings, oral or written, relating to the subject matter hereof.

Section 37. City Role. The District acknowledges that, pursuant to Section 7 of the MOA, the City is designated and serves as manager with respect to the Project. Consistent with such role, the District hereby authorizes the City to exercise certain rights and perform certain obligations on its behalf under this Agreement as expressly provided herein. [The remainder of this page intentionally left blank; signature pages immediately follow.]

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[Signature Page to Vista Grande Drainage Basin Improvement Project (Daly City Joint Powers Financing Authority, City of Daly City and North San Mateo County Sanitation District) – WIFIA Loan Agreement] IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their respective officers thereunto duly authorized as of the date first written above.

DALY CITY JOINT POWERS FINANCING
AUTHORITY, by its authorized representative
By: ______________________________
Name:

Title:

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CITY OF DALY CITY,
by its authorized representative
By: ______________________________
Name:

Title:

Approved as to form

_________________________
City Attorney

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NORTH SAN MATEO COUNTY
SANITATION DISTRICT, by its authorized
representative
By: ______________________________
Name:

Title:

Approved as to form

_________________________
[General Counsel]

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UNITED STATES ENVIRONMENTAL
PROTECTION AGENCY, acting by and through
the Administrator of the United States
Environmental Protection Agency

By: ______________________________
Name: Lee M. Zeldin
Title: Administrator

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SCHEDULE I

PROJECT BUDGET
SOURCES OF FUNDS AMOUNT ($ USD) PERCENTAGE (%)
WIFIA Loan $33,890,228 21.7%
SRF Loan 62,888,288 40.3%
Contributions – CalTrans 3,440,000 2.2%
Contributions – San Francisco Public
Utilities Commission 35,000,000 22.4%
Contributions – San Mateo County 15,000,000 9.6%
Grants 5,959,752 3.8%
Total Sources of Funds $156,178,268 100.0%

USES OF FUNDS AMOUNT ($ USD) PERCENTAGE (%)
Project Construction $141,300,758 90.5%
Contingency 14,130,076 9.0%
Financing Costs 747,434 0.5%
Total Uses of Funds $156,178,268 100.0%
Total Eligible Project Costs $156,178,268 100.0%
Total Project Costs $156,178,268 100.0%

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SCHEDULE II
CONSTRUCTION SCHEDULE2
Project
Element
Design
Completi
on
Advertise Bids Permit
Issuance
Construction
Start
Construction End
Vista Grande
Drainage
Improvement
Project
August
2024
August 2025 Ongoing January 2026 August 2029

2 Note to Draft: City to confirm construction schedule as of the Effective Date.

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SCHEDULE III

EXISTING INDEBTEDNESS
A. Parity Obligations of the City
Agreement/Series Outstanding Principal3

1. Financing Agreement, dated as of September 12, 2024, by and between the Borrower and the City, related to the
California State Water Resources Control Board,
Construction Loan Agreement D2401002, Project No.
8502-110
Outstanding Principal assumes the loan was fully drawn at closing.
$30,960,727.31

B. Parity Obligations of the District
Agreement/Series Outstanding Principal4

1. Financing Agreement, dated as of September 12, 2024, by and between the Borrower and the District, related to the California State Water Resources Control Board,
Construction Loan Agreement D2401002, Project No.
8502-110
Outstanding Principal assumes the loan was fully drawn at closing.
$31,929,232.69

C. Subordinated Obligations of the City
None.

D. Subordinated Obligations of the District
None.

E. Indebtedness of the Borrower
Agreement/Series Outstanding Principal5

1. Construction Loan Agreement D2401002, Project No.
8502-110, dated as of May 19, 2025, by and among the
California State Water Resources Control Board, the
Borrower, the City and the District
$62,889,960

3 Note to Draft: Borrower to confirm outstanding principal amount as of the Effective Date. 4 Note to Draft: Borrower to confirm outstanding principal amount as of the Effective Date. 5 Note to Draft: Borrower to confirm outstanding principal amount as of the Effective Date.

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Outstanding Principal assumes the loan was fully drawn at closing.

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SCHEDULE IV

FLOWS OF FUNDS
Part A. City Flow of Funds
Money in the Water Fund, after paying as they become due and payable all Maintenance and Operation Costs, shall be applied by the City to pay when due the following amounts in the following order of priority:
(a) On or before each Authority Bond Payment Date, the City shall, from amounts in the Water Fund, transfer to the Authority for deposit into the WIFIA Debt Service Account (as defined in the WIFIA Loan Agreement) an amount that, together with amounts held in the WIFIA Debt Service Account for that purpose, is equal to the interest amount becoming due and payable on such Authority Bond Payment Date, as set forth in Appendix B (Authority Bond Payment Schedule – City of Daly City) of the WIFIA City FA. (b) On or before each Authority Bond Payment Date, the City shall, from amounts in the Water Fund, transfer to the Authority for deposit into the WIFIA Debt Service Account an amount that, together with amounts held in the WIFIA Debt Service Account for that purpose, is equal to the principal amount becoming due and payable on such Authority Bond Payment Date, as set forth in Appendix B (Authority Bond Payment Schedule – City of Daly City) of the WIFIA City FA.
(c) On or before each Authority Bond Payment Date, the City shall, from moneys in the Water Fund, pay to the party entitled thereto or transfer or cause to be transferred to any applicable debt service or other payment fund or account for any Parity Obligations, without preference or priority to the transfers made pursuant to the preceding clauses (a) and (b), on the dates specified in the Issuing Instrument relating to such Parity Obligations, the sum or sums required to be paid or deposited in such debt service or other payment fund or account with respect to principal, premium, if any, and interest on Parity Obligations. (d) On or before each Authority Bond Payment Date, the City shall, from amounts in the Water Fund in excess of the sums required to make the transfers specified in the foregoing clauses (a), (b) and (c), transfer or cause to be transferred to any applicable debt service reserve fund for any Parity Obligation other than the WIFIA Bond, the sum or sums required to be paid or deposited in such debt service reserve fund in accordance with the terms of such Parity Obligation..
(e) On or before each Authority Bond Payment Date, the City shall, from amounts in the Water Fund in excess of the sums required to make the transfers specified in foregoing clauses (a), (b), (c) and (d), pay to the party entitled thereto or transfer or cause to be transferred to any applicable debt service or other payment fund or account for any Subordinated Obligations, on the dates specified in the Issuing Instrument relating to such Subordinated Obligations, the sum or sums required to be paid or deposited in such debt service or other payment fund or account with respect to principal, premium, if any, and interest on Subordinated Obligations.

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(f) All money on deposit in the Water Fund in excess of the sums required to be set aside on or before each Authority Bond Payment Date by the provisions of the foregoing clauses (a), (b), (c), (d) and (e) shall be available for (i) the payment of any unsecured obligations (including, but not limited to, any amounts payable by the City under Section 10(a), Sections 14(p)(i) and 14(p)(ii), and Section 32 of the WIFIA Loan Agreement) (ii) the acquisition and construction of improvements to the Water Enterprise, (iii) any transfers permitted under this Agreement to the Rate Stabilization Fund and (iv) any other lawful purpose of the City (provided that the foregoing clause (iv) shall not supersede, modify or otherwise affect the City’s obligations pursuant to Section 15(g) of the WIFIA Loan Agreement).

Part B. District Flow of Funds
Money in the Sewer Fund, after paying as they become due and payable all Maintenance and Operation Costs, shall be applied by the District to pay when due the following amounts in the following order of priority:
(a) On or before each Authority Bond Payment Date, the District shall, from amounts in the Sewer Fund, transfer to the Authority for deposit into the WIFIA Debt Service Account (as defined in the WIFIA Loan Agreement) an amount that, together with amounts held in the WIFIA Debt Service Account for that purpose, is equal to the interest amount becoming due and payable on such Authority Bond Payment Date, as set forth in Appendix B (Authority Bond Payment Schedule – North San Mateo County Sanitation District) of the WIFIA District FA. (b) On or before each Authority Bond Payment Date, the District shall, from amounts in the Sewer Fund, transfer to the Authority for deposit into the WIFIA Debt Service Account an amount that, together with amounts held in the WIFIA Debt Service Account for that purpose, is equal to the principal amount becoming due and payable on such Authority Bond Payment Date, as set forth in Appendix B (Authority Bond Payment Schedule – North San Mateo County Sanitation District) of the WIFIA District FA.
(c) On or before each Authority Bond Payment Date, the District shall, from moneys in the Sewer Fund, pay to the party entitled thereto or transfer or cause to be transferred to any applicable debt service or other payment fund or account for any Parity Obligations, without preference or priority to the transfers made pursuant to the preceding clauses (a) and (b), on the dates specified in the Issuing Instrument relating to such Parity Obligations, the sum or sums required to be paid or deposited in such debt service or other payment fund or account with respect to principal, premium, if any, and interest on Parity Obligations. (d) On or before each Authority Bond Payment Date, the District shall, from amounts in the Sewer Fund in excess of the sums required to make the transfers specified in the foregoing clauses (a), (b) and (c), transfer or cause to be transferred to any applicable debt service reserve fund for any Parity Obligation other than the WIFIA Bond, the sum or sums required to be paid or deposited in such debt service reserve fund in accordance with the terms of such Parity Obligation..
(e) On or before each Authority Bond Payment Date, the District shall, from amounts in the Sewer Fund in excess of the sums required to make the transfers specified in

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foregoing clauses (a), (b), (c) and (d), pay to the party entitled thereto or transfer or cause to be transferred to any applicable debt service or other payment fund or account for any Subordinated Obligations, on the dates specified in the Issuing Instrument relating to such Subordinated Obligations, the sum or sums required to be paid or deposited in such debt service or other payment fund or account with respect to principal, premium, if any, and interest on Subordinated Obligations.
(f) All money on deposit in the Sewer Fund in excess of the sums required to be set aside on or before each Authority Bond Payment Date by the provisions of the foregoing clauses (a), (b), (c), (d) and (e) shall be available for (i) the payment of any unsecured obligations (including, but not limited to, any amounts payable by the District under Section 10(a), Sections 14(p)(i) and 14(p)(ii), and Section 32 of the WIFIA Loan Agreement) (ii) the acquisition and construction of improvements to the Sewer Enterprise, (iii) any transfers permitted under this Agreement to the Rate Stabilization Fund and (iv) any other lawful purpose of the District (provided that the foregoing clause (iv) shall not supersede, modify or otherwise affect the District’s obligations pursuant to Section 15(g) of the WIFIA Loan Agreement).

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SCHEDULE V

CONSTRUCTION CONTRACTS
A. Existing Construction Contracts
Contract Name Effective
Date
Construction
Contractor
Amount Description
[Went out for bid in
October; bids due in
January 2026.]6

B. Additional Construction Contracts
None.

6 Note to draft: To be updated based on the Effective Date.

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SCHEDULE VI
WIFIA LOAN AMORTIZATION SCHEDULE7

7 Note to Draft: To be provided by the WIFIA Lender on the Effective Date. The debt service schedule will include, for reference purposes, columns reflecting the portions of debt service payments allocated to each Member through the Authority Bond Payments, which will also be provided for under the WIFIA FAs.

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A-1

EXHIBIT A

FORM OF WIFIA BOND

DALY CITY JOINT POWERS FINANCING AUTHORITY

VISTA GRANDE DRAINAGE BASIN IMPROVEMENT PROJECT

(WIFIA – N19124CA)

Maximum Principal Amount: $33,890,228
Effective Date: [●]
Interest Rate Per Annum: [●]
Due: July 1, 2064
DALY CITY JOINT POWERS FINANCING AUTHORITY, a joint exercise of powers authority duly organized and existing under and by virtue of the laws of the State of California (the “Borrower”), for value received, hereby promises to pay to the order of the UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, acting by and through the Administrator of the United States Environmental Protection Agency, or its assigns (the “WIFIA Lender”), the lesser of (x) the Maximum Principal Amount set forth above and (y) the aggregate unpaid principal amount of all disbursements (the “Disbursements”) made by the WIFIA Lender (such lesser amount, together with any interest that is capitalized and added to principal in accordance with the provisions of the WIFIA Loan Agreement (as defined below), being hereinafter referred to as the “Outstanding Principal Sum”), together with accrued and unpaid interest (including, if applicable, interest at the Default Rate, as defined in the WIFIA Loan Agreement (as defined below)) on the Outstanding Principal Sum and all fees, costs and other amounts payable in connection therewith, as more fully described in the WIFIA Loan Agreement.

The principal hereof shall be payable in the manner and at the place provided in the WIFIA Loan Agreement in accordance with SCHEDULE VI (WIFIA Loan Amortization Schedule) to the WIFIA Loan Agreement, as revised from time to time in accordance with the WIFIA Loan Agreement, until paid in full (which SCHEDULE VI, as modified from time to time in accordance with the terms of the WIFIA Loan Agreement, is incorporated in and is a part of this WIFIA Bond).

The WIFIA Lender is hereby authorized to modify the WIFIA Loan Amortization Schedule included in SCHEDULE VI to the WIFIA Loan Agreement from time to time in accordance with the terms of the WIFIA Loan Agreement to reflect the amount of each disbursement made thereunder and the date and amount of principal or interest paid by the Borrower thereunder.

Absent manifest error, the WIFIA Lender’s determination of such matters as set forth on SCHEDULE VI to the WIFIA Loan Agreement shall be conclusive evidence thereof; provided that neither the failure to make any such recordation nor any error in such recordation shall affect in any manner the Borrower’s obligations hereunder or under any other WIFIA Loan Document.

Payments hereon are to be made in accordance with Section 8 (d) (Payment of Principal and Interest – Manner of Payment) and Section 31 (Notices) of the WIFIA Loan Agreement as the

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A-2

same become due. Principal of and interest on this WIFIA Bond shall be made in Dollars and in immediately available funds (without counterclaim, offset or deduction). Any payment in respect of the WIFIA Bond shall be treated as a payment in respect of the WIFIA Loan and any prepayment of principal in respect of the WIFIA Loan shall be treated as a redemption in respect of the WIFIA Bond. If the Final Maturity Date is adjusted in accordance with the WIFIA Loan Agreement, the due date of this WIFIA Bond shall be deemed to be amended to change the due date to such revised Final Maturity Date without any further action required on the part of the Borrower or the WIFIA Lender and such amendment shall in no way amend, modify or affect the other provisions of this WIFIA Bond without the prior written agreement of the WIFIA Lender. Any such amendment shall be reflected in a revised WIFIA Loan Amortization Schedule.

This WIFIA Bond has been executed pursuant to that certain WIFIA Loan Agreement, dated as of [●], 2026, among the WIFIA Lender, the Borrower, City of Daly City and North San Mateo County Sanitation District (the “WIFIA Loan Agreement”) and is issued to evidence the obligation of the Borrower under the WIFIA Loan Agreement to repay the loans made by the WIFIA Lender and any other payments of any kind required to be paid by the Borrower under the WIFIA Loan Agreement or the other WIFIA Loan Documents referred to therein. Reference is made to the WIFIA Loan Agreement for details relating to the Borrower’s obligations hereunder.

All capitalized terms used in this WIFIA Bond and not defined herein shall have the meanings set forth in the WIFIA Loan Agreement.

This WIFIA Bond may be redeemed at the option of the Borrower in whole or in part (and, if in part, the principal installments and amounts thereof to be redeemed are to be determined in accordance with the WIFIA Loan Agreement; provided that such redemption payments shall be in principal amounts of at least $1,000,000 or any integral multiple of $1 in excess thereof), from time to time, but not more than annually, without penalty or premium, by paying to the WIFIA Lender all or part of the principal amount of the WIFIA Bond in accordance with the WIFIA Loan Agreement.

Payment of the obligations of the Borrower under this WIFIA Bond is secured pursuant to the WIFIA Loan Agreement.

Any delay on the part of the WIFIA Lender in exercising any right hereunder shall not operate as a waiver of any such right, and any waiver granted with respect to one default shall not operate as a waiver in the event of any subsequent default.

All acts, conditions and things required by the Constitution and laws of the State to happen, exist, and be performed precedent to and in the issuance of this WIFIA Bond have happened, exist and have been performed as so required. This WIFIA Bond is issued with the intent that the federal laws of the United States of America shall govern its construction to the extent such federal laws are applicable and the internal laws of the State shall govern its construction to the extent such federal laws are not applicable.

IN WITNESS WHEREOF, DALY CITY JOINT POWERS FINANCING AUTHORITY has caused this WIFIA Bond to be executed in its name and its seal to be affixed hereto and attested by its duly authorized officer, all as of the Effective Date of the WIFIA Bond set forth above.

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A-3

(SEAL)

DALY CITY JOINT POWERS

FINANCING AUTHORITY,
by its authorized representative

By ______________________________
Name:____________________________
Title:_____________________________

ATTEST:

______________________________
Secretary

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A-4

(FORM OF ASSIGNMENT)
FOR VALUE RECEIVED, the undersigned hereby unconditionally sells, assigns and transfers unto
(Please insert Social Security or other identifying number of assignee(s)):
the within bond and all rights thereunder.

Dated: ________________
NOTICE: The signature to this assignment
must correspond with the name as it appears
upon the face of the within bond in every
particular, without alteration or enlargement or
any change whatever.

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B-1

EXHIBIT B-1

REQUISITION PROCEDURES AND FORM OF REQUISITION
This Exhibit B-1 (Requisition Procedures and Form of Requisition) sets out the procedures which the Obligors (or the City on behalf of the Obligors) agree to follow in submitting Requisitions for the disbursement of WIFIA Loan proceeds in respect of the Eligible Project Costs incurred in connection with the Project. Section 1 (General Requirements Definitions) sets out the manner in which Requisitions are to be submitted and reviewed. Sections 2 (Rejection) through 4 (Withholding) set out the circumstances in which the WIFIA Lender may reject or correct Requisitions submitted by the Obligors (or the City on behalf of the Obligors) or withhold a disbursement. Each Obligor expressly agrees to the terms hereof, and further agrees that (a) the rights of the WIFIA Lender contained herein are in addition to (and not in lieu of) any other rights or remedies available to the WIFIA Lender under the WIFIA Loan Agreement, and (b) nothing contained herein shall be construed to limit the rights of the WIFIA Lender to take actions including administrative enforcement action and actions for breach of contract against any Obligor if it fails to carry out its obligations under the WIFIA Loan Agreement during the term thereof.

Section 1. General Requirements. All requests by the Obligors for the disbursement of WIFIA Loan proceeds shall be made by electronic mail or overnight delivery service by submission to the WIFIA Lender, in accordance with Section 31 (Notices) of the WIFIA Loan Agreement, of a Requisition, in form and substance satisfactory to the WIFIA Lender and completed and executed by each Authorized Representative. The form of Requisition is attached as Appendix 1 (Form of Requisition) to this Exhibit B-1 (Requisition Procedures and Form of Requisition).

Supporting documentation should be submitted with the Requisition. If the Borrower anticipates that it will draw down all or a portion of the proceeds of the WIFIA Loan to reimburse any Obligor for Eligible Project Costs paid by or on behalf of such Obligor prior to such disbursement of WIFIA Loan proceeds, whether paid from funds of such Obligor or proceeds of Obligations issued by the District, including for the purpose of paying or redeeming such Obligations, the Obligors (or the City on behalf of the Obligors) shall deliver appropriate documentation, including invoices and records, evidencing such incurred or paid Eligible Project Costs (the “Eligible Project Costs Documentation”). The Eligible Project Costs Documentation must provide sufficient detail to enable the WIFIA Lender to verify that such costs are Eligible Project Costs paid by the Obligors (or the City on behalf of the Obligors), in connection with the reimbursement of such Eligible Project Costs or for the purpose of paying or redeeming, in whole or part, the portion of any Interim Financing in respect of which the proceeds were used to pay such documented Eligible Project Costs. Each time the Obligors (or the City on behalf of the Obligors) deliver Eligible Project Costs Documentation to the WIFIA Lender and the Servicer (if any), the Obligors (or the City on behalf of the Obligors) shall also deliver to such entities a certificate, substantially in the form of Exhibit B-2 (Certification of Eligible Project Costs Documentation) and duly executed by each Authorized Representative (or the City’s Authorized Representative on behalf of the Obligors). The WIFIA Lender shall review the Eligible Project Costs Documentation and the related certificate for compliance with WIFIA disbursement requirements, and any amounts approved by the WIFIA Lender as Eligible Project Costs will be

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B-2

disbursed at such time as the Obligors (or the City on behalf of the Obligors) submit a Requisition in respect of such approved amounts.

The WIFIA Lender agrees to promptly send to the Obligors in accordance with Section 31 (Notices) of the WIFIA Loan Agreement, an acknowledgement of receipt of each Requisition in the form attached as Appendix 2 ([Approval/Disapproval] of the WIFIA Lender) to this Exhibit B-1 (Requisition Procedures and Form of Requisition) setting forth the date of receipt by the WIFIA Lender of such Requisition and setting forth the Business Day on which disbursement will be made absent denial by the WIFIA Lender. All disbursement requests must be received by the WIFIA Lender at or before 5:00 P.M. (EST) on the first (1st) Business Day of a calendar month in order to obtain disbursement by the fifteenth (15 th) day of such calendar month or, if either such day is not a Business Day, the next succeeding Business Day. If a Requisition is approved by the WIFIA Lender, the WIFIA Lender will notify the Borrower of such approval and of the amount so approved.

Section 2. Rejection. A Requisition may be rejected in whole or in part by the WIFIA Lender if it is: (a) submitted without signature of any Authorized Representative; (b) submitted under signature of a Person other than such Authorized Representatives; (c) submitted after prior disbursement of all proceeds of the WIFIA Loan; (d) submitted without adequate Eligible Project Costs Documentation, including (i) copies of invoices and records evidencing the Eligible Project Costs, (ii) a summary of the progress of construction of the Project and a general description of the work done for which the funds being requisitioned are being applied (or a certification that no change has occurred since the date of the latest quarterly report provided pursuant to Section 16(d) (Reporting Requirements – Construction Reporting)), and (iii) a copy of the most recent update to either Member’s risk register, if requested by the WIFIA Lender.

The WIFIA Lender will notify the Obligors of any Requisition so rejected, and the reasons therefor. Any Requisition rejected for the reasons specified above (other than clause (c) above) must be resubmitted in proper form in order to be considered for approval. If a Requisition exceeds the balance of the WIFIA Loan proceeds remaining to be disbursed, the request will be treated as if submitted in the amount of the balance so remaining, and the WIFIA Lender will so notify the Obligors.

Section 3. Correction. A Requisition containing an apparent mathematical error will be corrected by the WIFIA Lender, after telephonic or email notification to the Obligors, and will thereafter be treated as if submitted in the corrected amount.

Section 4. Withholding. The WIFIA Lender shall be entitled to withhold approval (in whole or in part) of any pending or subsequent requests for the disbursement of WIFIA Loan proceeds if: (a) a Default or an Event of Default shall have occurred and be continuing; (b) any Obligor (i) knowingly takes any action, or omits to take any action, amounting to fraud or violation of any applicable law, in connection with the transactions contemplated hereby; (ii) prevents or materially impairs the ability of the WIFIA Lender to monitor compliance by any Obligor with applicable law pertaining to the Project or with the terms and conditions of the WIFIA Loan Agreement; (iii) fails to observe or comply with any applicable law, or any term or condition of the WIFIA Loan Agreement; (iv) fails to satisfy the conditions set forth in Section 4 (Disbursement Conditions; Quarterly Approval of Eligible Project Costs) and Section 11(b) (Conditions

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Precedent – Conditions Precedent to Disbursements) of the WIFIA Loan Agreement; or (v) fails to deliver Eligible Project Costs Documentation satisfactory to the WIFIA Lender at the times and in the manner specified by the WIFIA Loan Agreement; provided that in such case of clause (v), the WIFIA Lender may, in its sole discretion, partially approve a disbursement request in respect of any amounts for which adequate Eligible Project Costs Documentation has been provided and may, in its sole discretion, disburse in respect of such properly documented amounts.

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APPENDIX 1 TO EXHIBIT B-1

FORM OF REQUISITION
United States Environmental Protection Agency
1200 Pennsylvania Avenue NW
WJC-W 6201A
Washington, D.C. 20460
Attention: WIFIA Director
Re: VISTA GRANDE DRAINAGE BASIN IMPROVEMENT PROJECT (WIFIA Ref N19124CA)
Ladies and Gentlemen:

Pursuant to Section 4 (Disbursement Conditions; Quarterly Approval of Eligible Project Costs) of the WIFIA Loan Agreement, dated as of [●], 2026 (the “WIFIA Loan Agreement”), by and among DALY CITY JOINT POWERS FINANCING AUTHORITY (the “Borrower”), CITY OF DALY CITY (the “City”), NORTH SAN MATEO SANITATION DISTRICT (the “District”) and the UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, acting by and through the Administrator (the “WIFIA Lender”), the Borrower hereby requests disbursement in the amount set forth below in respect of Eligible Project Costs paid or incurred by the Borrower or the Members (or the City on behalf of the Members). Capitalized terms used but not defined herein have the meaning set forth in the WIFIA Loan Agreement.

In connection with this Requisition each of the undersigned, as the Borrower’s Authorized Representative, the City’s Authorized Representative and the District’s Authorized Representative, respectively, hereby represents and certifies the following:

1. Project name Vista Grande Drainage Basin
Improvement Project

2. Borrower name Daly City Joint Powers Financing
Authority

3. WIFIA reference number N18107CA

4. Requisition number [___]

5. Requested disbursement amount $[___]

6. Requested disbursement date
(the “Disbursement Date”)
[___]

7. Total amounts previously disbursed under
the WIFIA Loan Agreement
$[___]

8. Wire instructions [___]

9. The amounts hereby requisitioned are being requested with respect to [Eligible Project Costs previously submitted to and approved by the WIFIA Lender in accordance with the WIFIA Loan Agreement] [Eligible Project Costs which have not and will not be otherwise submitted to the WIFIA Lender for approval].

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10. The amounts hereby requisitioned have been paid or incurred and approved for payment by or on behalf of the Obligors for Eligible Project Costs and have not been paid for or reimbursed by any previous disbursement from (a) WIFIA Loan proceeds or (b) any other source of funding for the Project as identified in the Project Budget.

11. No portion of the amounts requisitioned will be applied to pay for Eligible Project Costs that have been previously paid, or are expected to be paid, with proceeds of any Interim Financing[.][, except as set forth below:

Source of Interim Financing Amount of Interim Financing [___] $[___]
Total Amount of Interim Financing $[___]

The portion of the amount requisitioned equal to the total amount of the Interim Financing set forth above will be promptly applied by the applicable Obligor to either (a) discharge a like principal amount of such Interim Financing or (b) reimburse the applicable fund or account from which the proceeds of such Interim Financing were spent.]

12. The aggregate amount of all disbursements of the WIFIA Loan (including the amount requested under this Requisition) does not exceed (a) the maximum principal amount of the WIFIA Loan or (b) the amount of Eligible Project Costs paid or incurred by the Obligors (or the City on behalf of the Obligors).

13. The Obligors have secured financing and appropriated cash, and have developed a feasible plan of finance to secure future financing and appropriate future cash amounts, for the Project, which together with funds that remain available and not yet drawn under the WIFIA Loan, will be sufficient to pay the reasonably anticipated remaining Total Project Costs.

14. The total federal assistance provided to the Project, including the maximum principal amount of the WIFIA Loan, does not exceed eighty percent (80%) of Total Project Costs.

15. The Obligors (or the City on behalf of the Obligors) have all Governmental Approvals necessary as of the date hereof and as of the Disbursement Date (immediately after giving effect to the above-requested disbursement of WIFIA Loan proceeds), for the development, construction, operation and maintenance of the Project and each such Governmental Approval has been issued and is in full force and effect (and is not subject to any notice of violation, breach or revocation).

16. Each of the insurance policies maintained by the Obligors pursuant to Section 14(e) (Affirmative Covenants – Operation and Maintenance of the Systems; Insurance) of the WIFIA Loan Agreement is in full force and effect, and no notice of termination thereof has been issued by the applicable insurance provider.

17. As of the date hereof and on the Disbursement Date (immediately after giving effect to the above-requested disbursement of WIFIA Loan proceeds), (a) no Default or Event of

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Default, and no event of default under any other Related Document and (b) no event that, with the giving of notice or the passage of time or both, would constitute an event of default under any Related Document, in each case, has occurred and is continuing. No Material Adverse Effect, or any event or condition that could reasonably be expected to have a Material Adverse Effect, has occurred or arisen since the Effective Date.

18. Each Obligor, and each of each Obligor’s contractors and subcontractors at all tiers with respect to the Project, has complied with all applicable laws, rules, regulations and requirements, including 40 U.S.C. §§ 3141-3144, 3146, and 3147 (relating to Davis-Bacon Act requirements) (and regulations relating thereto) and 33 U.S.C. § 3914 (relating to American iron and steel products). Supporting documentation, such as certified payroll records and certifications for all iron and steel products used for the Project, are being maintained and are available for review upon request by the WIFIA Lender.

19. The representations and warranties of each Obligor set forth in the WIFIA Loan Agreement and in each other Related Document are true and correct as of the date hereof and as of the Disbursement Date, except to the extent such representations and warranties expressly relate to an earlier date (in which case, such representations and warranties are true and correct as of such earlier date).

20. Each Related Document that has been delivered by any Obligor to the WIFIA Lender pursuant to Section 11(b)(iii) (Conditions Precedent – Conditions Precedent to Disbursements) is complete, fully executed and in full force and effect.

21. The current estimated percentage of physical completion of the Project is [___]%. Each Member is in compliance with Section 16(d) (Reporting Requirements – Construction Reporting) and no change has occurred since the date of the most recently delivered quarterly construction progress report that could reasonably be expected to cause a Material Adverse Effect.

22. The Obligors have delivered all required deliverables under and in compliance with the requirements of Section 16 (Reporting Requirements), except as has been otherwise agreed by the WIFIA Lender.

23. All documentation evidencing the Eligible Project Costs to be reimbursed to the Borrower or to be used to pay Eligible Project Costs previously paid from proceeds of any Interim Financing by the above-requested disbursement has been delivered by the Obligors (or the City on behalf of the Obligors) to the WIFIA Lender at the times and in the manner specified by the WIFIA Loan Agreement, including the details set forth below:

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WIFIA USE ONLY
Vendor or
Contractor
Name25F8
Invoice
Number2
6F9
Invoice
Date
Payment
Date
Invoice
Amount
WIFIA
Requested
Amount27
F10
Activity
Type28
F11
Descripti
on of
Activity2
9F12
Approved
Amount
Notes

The undersigned acknowledge that if any Obligor makes a false, fictitious, or fraudulent claim, statement, submission, or certification to the Government in connection with the Project, the Government reserves the right to impose on such Obligor the penalties of 18 U.S.C. § 1001, to the extent the Government deems appropriate.

8 If seeking reimbursement for internal costs, enter “Internally financed activities.” 9 Vendor’s number indicated on the invoice sent to the applicable Obligor. 10 If the amount requested for reimbursement by the WIFIA Lender is less than the total amount of the invoice, include an explanation for the difference.
11 Specify whether activity is: (a) Development phase activity, which includes planning, preliminary engineering, design, environmental review, revenue forecasting and other pre-construction activities; (b) Construction, which includes construction, reconstruction, rehabilitation and replacement activities; (c) Acquisition of real property, which includes acquiring an interest in real property, environmental mitigation, construction contingencies and acquisition of equipment; (d) Carrying costs, including capitalized interest, as necessary to meet market requirements, reasonably required reserve funds, capital issuance expenses and other carrying costs during construction; (e) WIFIA fees, including for application and credit processing; or (f) Other, with an explanation in the “Description of Activity” column. 12 Provide a brief description of the activities included in the invoice for which WIFIA funds are being requested and any other notes that will aid in the review of the disbursement request.

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Date:
_______________________

DALY CITY JOINT POWERS FINANCING

AUTHORITY,
By its authorized representative
By: _______________________________
Name:

Title:___________________________

Date:
_______________________

CITY OF DALY CITY
By its authorized representative
By: _______________________________
Name:

Title:___________________________

Date:
_______________________

NORTH SAN MATEO SANITATION DISTRICT,
By its authorized representative
By: _______________________________
Name:

Title:___________________________

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APPENDIX 2 TO EXHIBIT B-1
[APPROVAL/DISAPPROVAL] OF THE WIFIA LENDER
(To be delivered to the Obligors)
Requisition Number [_______________] is [approved in the amount of $[________]] [approved in part in the amount of $[_________]] [not approved, for the reasons set forth in Annex A attached hereto,] 13 by the WIFIA Lender (as defined herein) pursuant to Section 4 (Disbursement Conditions; Quarterly Approval of Eligible Project Costs) of the WIFIA Loan Agreement, dated as of [●], 2026, by and among Daly City Joint Powers Financing Authority (the “Borrower”), City of Daly City (the “City”), North San Mateo Sanitation District (the “District” and together with the Borrower and the City, the “Obligors”) and the United States Environmental Protection Agency, acting by and through the Administrator (the “WIFIA Lender”).

Any determination, action or failure to act by the WIFIA Lender with respect to the Requisition set forth above, including any withholding of a disbursement, shall be at the WIFIA Lender’s sole discretion, and in no event shall the WIFIA Lender be responsible for or liable to any Obligor for any and/or all consequence(s) which are the result thereof.

UNITED STATES ENVIRONMENTAL
PROTECTION AGENCY, acting by and through
the Administrator

By: ___________________________
WIFIA Lender’s Authorized Representative
Name:

Title:

Dated:

13 If there is any partial or full denial of approval, the WIFIA Lender should provide a separate attachment setting forth the reasons for such partial or full denial of approval.

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EXHIBIT B-2

CERTIFICATION OF ELIGIBLE PROJECT

COSTS DOCUMENTATION
[Date]
United States Environmental Protection Agency14

1200 Pennsylvania Avenue NW
WJC-W 6201A
Washington, D.C. 20460
Attention: WIFIA Director
Re: VISTA GRANDE DRAINAGE BASIN IMPROVEMENT PROJECT (WIFIA Ref N19124CA)
Ladies and Gentlemen:

Pursuant to Section 4 (Disbursement Conditions; Quarterly Approval of Eligible Project Costs) of the WIFIA Loan Agreement, dated as of [●], 2026 (the “WIFIA Loan Agreement”), by and among DALY CITY JOINT POWERS FINANCING AUTHORITY (the “Borrower”), CITY OF DALY CITY (the “City”), NORTH SAN MATEO SANITATION DISTRICT (the “District”) and the UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, acting by and through the Administrator (the “WIFIA Lender”), we hereby present this certificate in connection with the Obligors’ delivery of Eligible Project Costs Documentation to the WIFIA Lender.

Capitalized terms used but not defined herein have the meaning set forth in the WIFIA Loan Agreement.

Each of the undersigned does hereby represent and certify the following:

1. This certificate is being delivered to the WIFIA Lender in connection with the Eligible Project Costs Documentation and is applicable to the period between [__________] and [__________].

2. [The amount of Eligible Project Costs for which reimbursement will be sought from the WIFIA Loan pursuant to this certificate is $[__________].]

3. The sources of funding for such Eligible Project Costs are [listed below / set forth in Exhibit [__] to this certificate].

WIFIA USE ONLY

14 If there is a Servicer for the WIFIA Loan, provide a copy to the Servicer as well and include its notice details here.

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WIFIA USE ONLY
Vendor or
Contractor
Name32F15
Invoice
Number33
F16
Invoice
Date
Payment
Date
Invoice
Amount
Activity
Type34F
17 Description
of
Activity35F
18 Approved
Amount
Notes

4. [The funds for which reimbursement will be sought were expended solely in connection with the payment or reimbursement of Eligible Project Costs.]

Date:
_______________________

DALY CITY JOINT POWERS FINANCING

AUTHORITY,
By its authorized representative
By: _______________________________
Name:

Title:___________________________

Date:
_______________________

CITY OF DALY CITY,
By its authorized representative
By: _______________________________
Name:

Title:___________________________

Date:
_______________________

NORTH SAN MATEO SANITATION DISTRICT,
By its authorized representative
By: _______________________________
Name:

Title:___________________________

15 If seeking reimbursement for internal costs, enter “Internally financed activities.” 16 Vendor’s number indicated on the invoice sent to the Borrower. 17 Specify whether activity is: (a) Development phase activity, which includes planning, preliminary engineering, design, environmental review, revenue forecasting and other pre-construction activities; (b) Construction, which includes construction, reconstruction, rehabilitation and replacement activities; (c) Acquisition of real property, which includes acquiring an interest in real property, environmental mitigation, construction contingencies and acquisition of equipment; (d) Carrying costs, including capitalized interest, as necessary to meet market requirements, reasonably required reserve funds, capital issuance expenses and other carrying costs during construction; (e) WIFIA fees, including for application and credit processing; or (f) Other, with an explanation in the “Description of Activity” column. 18 Provide a brief description of the activities included in the invoice for which WIFIA funds are being requested and any other notes that will aid in the review of the documentation.

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EXHIBIT C-1

OPINIONS REQUIRED FROM COUNSEL TO OBLIGORS
An opinion of counsel of the Obligors, dated as of the Effective Date, to the effect that:

1. the Borrower has been duly created pursuant to Chapter 5, Division 7, Title 1 of the Code of the State (the “JPA Law”) and validly exists as a joint exercise of powers authority duly organized and existing under and by virtue of the laws of the State with good right and power to issue the WIFIA Bond;

2. the City has been duly created and validly exists as a general city and municipal corporation duly organized and existing under and by virtue of the laws of the State;

3. the District has been duly created and validly exists as a county sanitation district and subsidiary district of the City duly organized and existing under and by virtue of the laws of the State;

4. each Obligor is duly organized under the laws of the State and has full legal right, power and authority to own its property and conduct its affairs;

5. each Obligor is in good standing under the laws of the State;

6. each Obligor has all requisite power and authority to conduct its business and to execute and deliver, and to perform its obligations under the Related Documents to which it is a party;

7. the execution and delivery by each Obligor of, and the performance of such Obligor’s respective obligations under, the Related Documents to which it is a party, have been duly authorized by all necessary organizational or regulatory action;

8. each Obligor has duly executed and delivered each Related Document to which it is a party and each such Related Document is in full force and effect and constitutes the legal, valid and binding obligation of such Obligor, enforceable against such Obligor in accordance with their respective terms;

9. no authorization, consent, or other approval of, or registration, declaration or other filing with any governmental authority of the United States of America or of the State is required other than those already obtained or made on the part of each Obligor for the execution and delivery by such Obligor of, and the performance of such Obligor under, any Related Document to which it is a party other than authorizations, consents, approvals, registrations, declarations and filings set forth in the opinion that have already been timely obtained or made by such Obligor;

10. all actions by the City or District that are required for the application of Net Revenues as required under the applicable WIFIA FA have been duly and lawfully made and all actions by the Borrower that are required for the application of Authority Revenues as required under this Agreement have been duly and lawfully made;

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11. the execution and delivery by each Obligor of, and performance with the provisions of, the Related Documents to which such Obligor is a party do not (i) violate the Organizational Documents of such Obligor (including the JPA Law with respect to the Borrower), (ii) violate the law of the United States of America or of the State or (iii) conflict with or constitute a breach of or default under any material agreement or other instrument known to such counsel to which such Obligor is a party, or to the best of such counsel’s knowledge, after reasonable review, any court order, consent decree, statute, rule, regulation or any other law to which such Obligor is subject;

12. no Obligor is entitled to claim governmental immunity in any breach of contract action under the Related Documents, to the extent (if any) such immunity has been waived under the Related Documents and applicable law;

13. the Borrower is not an investment company required to register under the Investment Company Act of 1940, as amended; and

14. to the knowledge of such counsel after due inquiry, there are no actions, suits, proceedings or investigations against any Obligor by or before any court, arbitrator or any other Governmental Authority in connection with the Related Documents or any System (including the Project) that are pending or, to the knowledge of such counsel after due inquiry that would materially impair the transactions contemplated by the Related Documents.

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EXHIBIT C-2

OPINIONS REQUIRED FROM BOND COUNSEL
An opinion of bond counsel, dated as of the Effective Date, to the effect that:

1. the WIFIA Bond is being issued pursuant to the authority granted by the laws of the State, including the JPA Law and the Joint Powers Agreement.

2. each Related Document constitutes a legal, valid and binding agreement of each Obligor that is a party thereto, enforceable against such Obligor in accordance with its respective terms and conditions.

3. the Authority Bond Payments (a) are secured by the Net Revenues, (b) are Parity Obligations, (c) are enforceable under the laws of the State without any further action by any Member or any other Person, and (d) rank pari passu in right of payment and right of security with all other Parity Obligations and senior in right of payment and right of security to all Subordinated Obligations;

4. the WIFIA Bond and the WIFIA Loan (a) are secured by (i) all of the Authority Revenues and (ii) all of the right, title and interest of the Borrower (but none of the obligations) in the WIFIA FAs and (iii) the WIFIA Debt Service Account, and (b) are enforceable in accordance with WIFIA Bond and the Loan Agreement, respectively, under the laws of the State without any further action by the Borrower or any other Person;

5. the WIFIA FAs create the valid and binding assignment and pledge of the Net Revenues to secure the payment of the Authority Bond Payments, irrespective of whether any party has notice of the pledge and without the need for any physical delivery, recordation, filing or further act; and

6. the Loan Agreement creates the valid and binding assignment and pledge of the Authority Revenues, the right, title and interest of the Borrower in the WIFIA FAs to secure the payment of the principal of, interest on, and other amounts payable in respect of, the WIFIA Bond, irrespective of whether any party has notice of the pledge and without the need for any physical delivery, recordation, filing or further act.

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EXHIBIT D

FORM OF CLOSING CERTIFICATE
Reference is made to that certain WIFIA Loan Agreement, dated as of [●], 2026 (the “WIFIA Loan Agreement”), by and among Daly City Joint Powers Financing Authority (the “Borrower”), City of Daly City (the “City”), North San Mateo Sanitation District (the “District”) and the United States Environmental Protection Agency, acting by and through the Administrator (the “WIFIA Lender”). Capitalized terms used in this certificate and not defined shall have the respective meanings ascribed to such terms in the WIFIA Loan Agreement.

In connection with Section 11(a) (Conditions Precedent – Conditions Precedent to Effectiveness) of the WIFIA Loan Agreement, the undersigned, [●], as Borrower’s Authorized Representative, [●], as City’s Authorized Representative and [●], as District’s Authorized Representative, each does hereby certify on behalf of the Borrower, the City and the District, respectively, and not in his/her personal capacity, as of the date hereof:
(a) pursuant to Section 11(a)(vi) (Conditions Precedent – Conditions Precedent to Effectiveness) of the WIFIA Loan Agreement, attached hereto as Annex A-1 , Annex A-2 and Annex A-3 are incumbency certificates that list all persons, together with their positions and specimen signatures, who are duly authorized by each Obligor to execute the Related Documents to which such Obligor is or will be a party, and who have been appointed as an Borrower’s Authorized Representative, City’s Authorized Representative or District’s Authorized Representative, as applicable, in accordance with Section 21 (Obligors’ Authorized Representatives) of the WIFIA Loan Agreement;
(b) pursuant to Section 11(a)(ii) (Conditions Precedent – Conditions Precedent to Effectiveness) of the WIFIA Loan Agreement, attached hereto as Annex B are copies of each Related Document (other than the WIFIA Loan Documents) and each Construction Contract to which it is a party, together with any amendments, waivers or modifications thereto, that has been entered into on or prior to the Effective Date, and each such document is complete, fully executed, and in full force and effect, and all conditions contained in such documents that are necessary to the closing of the WIFIA transactions contemplated hereby have been fulfilled; (c) pursuant to Section 11(a)(iii) (Conditions Precedent – Conditions Precedent to Effectiveness) of the WIFIA Loan Agreement, attached hereto as Annex C is a copy of each Obligor’s Organizational Documents, as in effect on the Effective Date, which Organizational Documents are in full force and effect;
(d) pursuant to Section 11(a)(iv) (Conditions Precedent – Conditions Precedent to Effectiveness) of the WIFIA Loan Agreement, other than the Related Documents, there are no additional instruments or documents necessary for any Obligor to execute and deliver, or to perform its obligations under, the WIFIA Loan Documents to which it is a party and to consummate and implement the transactions contemplated by the WIFIA Loan Documents to which it is a party;
(e) pursuant to Section 11(a)(vi)(A) (Conditions Precedent – Conditions Precedent to Effectiveness) of the WIFIA Loan Agreement, the aggregate of all funds secured and appropriated

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D-2

for the development and construction of the Project as set forth in the Base Case Financial Model and in the Project Budget are reasonably expected to be sufficient to carry out the Project, pay all Total Project Costs anticipated for the Project and achieve Substantial Completion by the Projected Substantial Completion Date;
(f) pursuant to Section 11(a)(vi)(B) (Conditions Precedent – Conditions Precedent to Effectiveness) of the WIFIA Loan Agreement, the Obligors have obtained all Governmental Approvals necessary as of the Effective Date (i) in connection with the Project and (ii) to execute and deliver, and perform their obligations under the WIFIA Loan Documents, and each such Governmental Approval is final, non-appealable and in full force and effect (and is not subject to any notice of violation, breach or revocation);
(g) pursuant to Section 11(a)(vi)(C) (Conditions Precedent – Conditions Precedent to Effectiveness) of the WIFIA Loan Agreement, (i) the maximum principal amount of the WIFIA Loan, together with the amount of any other credit assistance provided under the Act to the Borrower, does not exceed forty-nine percent (49%) of reasonably anticipated Eligible Project Costs; (ii) the aggregate amount of Eligible Project Costs previously incurred prior to the Effective Date does not exceed fifty-one percent (51%) of Eligible Project Costs; and (iii) the total federal assistance provided to the Project, including the maximum principal amount of the WIFIA Loan, does not exceed eighty percent (80%) of Total Project Costs; (h) pursuant to Section 11(a)(vi)(D) (Conditions Precedent – Conditions Precedent to Effectiveness) of the WIFIA Loan Agreement, each Obligor is in compliance with NEPA and any applicable federal, state or local environmental review and approval requirements with respect to the Project;
(i) pursuant to Section 11(a)(vi)(E) (Conditions Precedent – Conditions Precedent to Effectiveness) of the WIFIA Loan Agreement, (i) (A) the Borrower’s Federal Employer Identification Number is 39-5152349, (B) the Borrower’s UEI Number is JZDNPG2LVF83, and (C) the Borrower has registered with, and obtained confirmation of active registration status from, the federal System for Award Management (www.SAM.gov), which confirmation is attached hereto as Annex D-1, (ii) (A) the City’s UEI Number is KS8RFKRF6ZE6 and (B) the City has registered with, and obtained confirmation of active registration status from, the federal System for Award Management (www.SAM.gov), which confirmation is attached hereto as Annex D-2, and (iii) (A) the District’s UEI Number is ZBHWU14ZDVC9 and (B) the District has registered with, and obtained confirmation of active registration status from, the federal System for Award Management (www.SAM.gov), which confirmation is attached hereto as Annex D-3; (j) pursuant to Section 11(a)(vi)(F) (Conditions Precedent – Conditions Precedent to Effectiveness) of the WIFIA Loan Agreement, the WIFIA CUSIP number for the WIFIA Loan is [];
(k) pursuant to Section 11(a)(vi)(G) (Conditions Precedent – Conditions Precedent to Effectiveness) of the WIFIA Loan Agreement, the representations and warranties of each Obligor set forth in the WIFIA Loan Agreement and in each other Related Document to which such Obligor is a party are true and correct on and as of the date hereof, except to the extent that such

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representations and warranties expressly relate to an earlier date, in which case such representations and warranties were true and correct as of such earlier date; (l) pursuant to Section 11(a)(vi)(H) (Conditions Precedent – Conditions Precedent to Effectiveness) of the WIFIA Loan Agreement, no Material Adverse Effect, or any event or condition that could reasonably be expected to have a Material Adverse Effect, has occurred or arisen since the date of the Application;
(m) pursuant to Section 11(a)(vii) (Conditions Precedent – Conditions Precedent to Effectiveness) of the WIFIA Loan Agreement, the rating under the rating letter delivered to the WIFIA Lender pursuant to such Section 11(a)(vii) has not been reduced, withdrawn or suspended as of the Effective Date; [and]
(n) pursuant to Section 11(a)(viii) (Conditions Precedent – Conditions Precedent to Effectiveness) of the WIFIA Loan Agreement, attached hereto as Annex E is the Base Case Financial Model, which (i) demonstrates that projected Net Revenues and Authority Revenues are each sufficient to meet the WIFIA Loan Amortization Schedule, (ii) demonstrates compliance with the Rate Covenant for each Fiscal Year through the Final Maturity Date, (iii) reflects principal amortization and interest payment schedules acceptable to the WIFIA Lender, (iv) demonstrates that the Members (or the City on behalf of the Members) have developed, and identified adequate revenues to implement, a plan for operating, maintaining and repairing the Project over its useful life and (v) otherwise meets the requirements of such Section 11(a)(viii) (Conditions Precedent – Conditions Precedent to Effectiveness); [and]
(o) [any other attachments or provisions as may apply to the WIFIA Loan Agreement].

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IN WITNESS WHEREOF, the undersigned has executed this certificate as of the date first mentioned above.

DALY CITY JOINT POWERS FINANCING

AUTHORITY,
by its authorized representative

By: _______________________________
Name:

Title:

CITY OF DALY CITY,
by its authorized representative

By: _______________________________
Name:

Title:

NORTH SAN MATEO SANITATION
DISTRICT, by its authorized representative

By: _______________________________
Name:

Title:

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D-5

ANNEX A-1 TO EXHIBIT D

BORROWER INCUMBENCY CERTIFICATE
The undersigned, in his/her capacity as the Secretary of Daly City Joint Powers Financing Authority, a joint powers authority duly organized and existing under and by virtue of the laws of the State of California (the “Borrower”) hereby certifies that he/she is authorized to execute this certificate and further certifies that the following persons have been elected or appointed, are qualified, and are now acting as officers or authorized persons of the Borrower in the capacity or capacities indicated below, and that the signatures set forth opposite their respective names are their true and genuine signatures. He/She further certifies that any of the officers listed below is authorized to sign agreements and give written instructions with regard to any matters pertaining to the WIFIA Loan Documents on behalf of the Borrower as the Borrower’s Authorized Representative (each as defined in that certain WIFIA Loan Agreement, dated as of the date hereof, among the Borrower, City of Daly City, North San Mateo Sanitation District and the United States Environmental Protection Agency, acting by and through the Administrator):

Name Title Signature
[_______________] [Chairperson] ________________________ [_______________] [_________________] ________________________ [_______________] [Executive Director] ________________________ [_______________] [___________________] ________________________ [_______________] [___________________] ________________________

IN WITNESS WHEREOF, the undersigned has executed this certificate as of this [] day of [].

DALY CITY JOINT POWERS FINANCING
AUTHORITY, by its authorized representative

By: _______________________________
Name:

Title:

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D-6

ANNEX A-2 TO EXHIBIT D

CITY INCUMBENCY CERTIFICATE
The undersigned, in his/her capacity as the City Clerk of City of Daly City, a general city and municipal corporation duly organized and existing under and by virtue of the laws of the State of California (the “City”) hereby certifies that he/she is authorized to execute this certificate and further certifies that the following persons have been elected or appointed, are qualified, and are now acting as officers or authorized persons of the City in the capacity or capacities indicated below, and that the signatures set forth opposite their respective names are their true and genuine signatures. He/She further certifies that any of the officers listed below is authorized to sign agreements and give written instructions with regard to any matters pertaining to the WIFIA Loan Documents on behalf of the City as the City’s Authorized Representative (each as defined in that certain WIFIA Loan Agreement, dated as of the date hereof, among the City, Daly City Joint Powers Financing Authority, North San Mateo Sanitation District and the United States Environmental Protection Agency, acting by and through the Administrator):

Name Title Signature
[_______________] [City Manager] ________________________ [_______________] [Finance Director] ________________________ [_______________] [_____________] ________________________ [_______________] [___________________] ________________________ [_______________] [___________________] ________________________

IN WITNESS WHEREOF, the undersigned has executed this certificate as of this [] day of [].

CITY OF DALY CITY, by its authorized
representative

By: _______________________________
Name:

Title:

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D-7

ANNEX A-3 TO EXHIBIT D

DISTRICT INCUMBENCY CERTIFICATE
The undersigned, in his/her capacity as the Secretary of North San Mateo Sanitation District, a political subdivision duly organized and existing under and by virtue of the laws of the State of California (the “District”) hereby certifies that he/she is authorized to execute this certificate and further certifies that the following persons have been elected or appointed, are qualified, and are now acting as officers or authorized persons of the District in the capacity or capacities indicated below, and that the signatures set forth opposite their respective names are their true and genuine signatures. He/She further certifies that any of the officers listed below is authorized to sign agreements and give written instructions with regard to any matters pertaining to the WIFIA Loan Documents on behalf of the District as the District’s Authorized Representative (each as defined in that certain WIFIA Loan Agreement, dated as of the date hereof, among the District, Daly City Joint Powers Financing Authority, City of Daly City and the United States Environmental Protection Agency, acting by and through the Administrator):

Name Title Signature
[_______________] [Chairman] ________________________
[_______________] [General Manager] ________________________ [_______________] [___________________] ________________________ [_______________] [___________________] ________________________ [_______________] [___________________] ________________________

IN WITNESS WHEREOF, the undersigned has executed this certificate as of this [] day of [].

NORTH SAN MATEO SANITATION
DISTRICT, by its authorized representative

By: _______________________________
Name:

Title:

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E-1

EXHIBIT E

FORM OF CERTIFICATE OF SUBSTANTIAL COMPLETION
[Letterhead of Borrower]
[Date]
Environmental Protection Agency
WIFIA Director
WJC-W 6201A
1200 Pennsylvania Avenue NW
Washington, DC 20460

Project: VISTA GRANDE DRAINAGE BASIN IMPROVEMENT PROJECT (WIFIA – N19124CA)
Dear Director:

This certificate is provided pursuant to Section 16(h)(i)(A) (Reporting Requirements – Notices – Substantial Completion) of that certain WIFIA Loan Agreement (the “WIFIA Loan Agreement”), dated as of [●], 2026 by and among Daly City Joint Powers Financing Authority (the “Borrower”), City of Daly City (the “City”), North San Mateo Sanitation District (the “District”) and the United States Environmental Protection Agency, acting by and through its Administrator (the “WIFIA Lender”).

Unless otherwise defined herein, all capitalized terms in this certificate have the meanings assigned to those terms in the WIFIA Loan Agreement.

I, the undersigned, in my capacity as the City’s Authorized Representative, and not in my individual capacity, do hereby certify to the WIFIA Lender that:
(a) on [insert date Substantial Completion requirements were satisfied], the Project satisfied each of the requirements for Substantial Completion set forth in the [insert reference to the design-build or similar agreements for the Project];
(b) Substantial Completion has been declared under each of the above-referenced agreements and copies of the notices of Substantial Completion under such agreements are attached to this certification;
(c) Substantial Completion, as defined in the WIFIA Loan Agreement, has been achieved; and (d) the total federal assistance provided to the Project, including the maximum principal amount of the WIFIA Loan (excluding any interest that is capitalized in accordance with the terms hereof), does not exceed eighty percent (80%) of Total Project Costs.

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E-2

CITY OF DALY CITY,
by its authorized representative

By: _______________________________
Name:

Title:

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F-1

EXHIBIT F

FORM OF CONSTRUCTION MONITORING REPORT
United States Environmental Protection Agency
WIFIA Director
WJC-W 6201A
1200 Pennsylvania Avenue NW
Washington, DC 20460
[email protected]
Re: Vista Grande Drainage Basin Improvement Project (WIFIA – N19124CA) This Construction Monitoring Report for the period of [insert relevant quarterly period] is provided pursuant to Section 16(d) (Reporting Requirements – Construction Reporting) of the WIFIA Loan Agreement, dated as of [●], 2026 (the “WIFIA Loan Agreement”), by and among Daly City Joint Powers Financing Authority (the “Borrower”), City of Daly City (the “City”), North San Mateo Sanitation District (the “District”) and the United States Environmental Protection Agency, acting by and through the Administrator of the Environmental Protection Agency (the “WIFIA Lender”). Unless otherwise defined herein, all capitalized terms in this Construction Monitoring Report have the meanings assigned to those terms in the WIFIA Loan Agreement.

1. Project Status. Provide a narrative summary of the Project’s construction progress during the Quarterly Period, including with respect to the Project components or sub-projects where appropriate. Complete the table in Appendix A to update the Project scope, schedule, and costs with the latest information.

2. Current Projected Substantial Completion Date:

If the current Projected Substantial Completion Date differs than the date set forth in the Construction Monitoring Report most recently delivered to the WIFIA Lender (or, if no such report has yet been provided, the date of the Projected Substantial Completion Date set forth in the WIFIA Loan Agreement as of the Effective Date), provide a description in reasonable detail for such projected delay or difference:

3. Material Problems (if any)

Note any problems encountered or anticipated during the construction of the Project during the Quarterly Period that (1) impedes Project completion within the scope, costs, and schedule outlined in the WIFIA Loan Agreement or (2) relates to unforeseen complications in connection with the construction of the Project. This may include commissioning/start-up issues, constructability issues

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F-2
for the Project as planned, adverse impacts to Project surroundings, changes in or issues with meeting environmental or federal compliance requirements, and unanticipated or abnormal permit approval timelines. Include an assessment of the impact and any current plans to address the problems.

4. Other Matters Related to the Project (if applicable)

Date: _______________________ CITY OF DALY CITY,
by its authorized representative
By: _______________________________
Name: _____________________________
Title:_______________________________

Date: _______________________ NORTH SAN MATEO SANITATION

DISTRICT,
by its authorized representative
By: _______________________________
Name: _____________________________
Title:_______________________________

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F-3
APPENDIX A 1

Project Scope Project Schedule Project Costs
Project
Component
Completed
(Y/N)
Contract/
Vendor
Bid
Advertisement
Date
Contract
Award Date
NTP Effective
Date
Original
Substantial
Completion
Date
Estimated
Substantial
Completion
Date
Original
Contract
Amount
Estimated
Costs to
Complete
Costs Earned
or Paid to Date

Total

Table Definitions:

Project Component – project name or ID as tracked by the borrower Complete (Y/N) – indication that project is complete, and no additional updates will be provided Description (program of projects only) – brief overview of scope of work for the project component.

Location (program of projects only) – physical project boundaries Covered by existing NEPA? (program of projects only) – refer to the environmental review documents that is the basis for the NEPA finding. Is the project within the geographic scope and scope of activities described in the documents?

Contract/Vendor – the contract identifier and contractor that is/will be completing the project construction.

Bid Advertisement Date – the date the bid was advertised Contract Award date – the date the contract was awarded NTP Effective date – the effective date to proceed with the construction in the Notice to Proceed Original Substantial Completion Date – the substantial completion date for the given project as noted in the original contract award Estimated Substantial Completion Date – the latest date estimate for substantial completion for the given project component

Original Contract Amount – the original contract award amount Estimated Costs to Complete – the latest cost estimates to complete the given project component Costs Earned or Paid to Date – the latest incurred contract costs for the given project component Total – Total the cost amounts across all project components and contracts

1 Appendix A summarizes all project components that will be bid in the next quarter, are currently under construction, or have completed construction. It should be a cumulative list of projects that is updated each quarter. A Microsoft Excel spreadsheet with similar table format is acceptable.

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F-4

Date: _______________________ CITY OF DALY CITY,
by its authorized representative

By: _______________________________
Name: _____________________________
Title:_______________________________

Date: _______________________ NORTH SAN MATEO SANITATION

DISTRICT,
by its authorized representative

By: _______________________________
Name: _____________________________
Title:_______________________________

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G-1

EXHIBIT G

FORM OF PUBLIC BENEFITS REPORT
Date: [________]
Pursuant to Section 11(a)(xii) (Conditions Precedent – Conditions Precedent to Effectiveness) and Section 16(e) (Reporting Requirements – Public Benefits Report) of the WIFIA Loan Agreement (as defined below), City of Daly City (the “City”) and North San Mateo County Sanitation District (the “District”) are providing this Public Benefits Report in connection with the Vista Grande Drainage Basin Improvement Project (WIFIA – N19124CA). Capitalized terms used in this certificate and not defined shall have the respective meanings ascribed to such terms in the WIFIA Loan Agreement dated [on or about the date hereof] (the “WIFIA Loan Agreement”), between Daly City Joint Powers Financing Authority (the “Borrower”), the City, the District and the United States Environmental Protection Agency, acting by and through the Administrator.

Reporting Period: [Prior to the Effective Date][within ninety (90) days following the Substantial Completion Date][within ninety (90) following the fifth (5 th) anniversary of the Substantial Completion Date]
(i) The number of total jobs and direct jobs projected to be created by the Project during the period between the Effective Date and the Substantial Completion Date:

The WIFIA Lender projects that the Project will create [__] total jobs, of which the Borrower projects [__] will be direct jobs.
(ii) Indicate (yes or no) whether the Project will assist the Members in complying with applicable regulatory requirements, and if yes, describe how the project assists with regulatory compliance:

Yes ☐
If yes, additional description: [___]

No ☐

(iii) The Project will assist the Members with the following environmental measure:
[___].

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G-2

DALY CITY JOINT POWERS FINANCING

AUTHORITY,
by its authorized representative

By: _______________________________
Name:

Title:

CITY OF DALY CITY,
by its authorized representative

By: _______________________________
Name:

Title:

NORTH SAN MATEO COUNTY
SANITATION DISTRICT, by its authorized
representative

By: _______________________________
Name:

Title:

Page 213 of 245 ends

A&O Shearman draft 1-29-26

FINANCING AGREEMENT (WIFIA LOAN AGREEMENT)

This FINANCING AGREEMENT (WIFIA LOAN AGREEMENT) (this “Agreement”), dated as of _____, 20__, is between DALY CITY JOINT POWERS FINANCING AUTHORITY, a joint exercise of powers authority duly organized and existing under the laws of the State of California (the “Authority”), and the CITY OF DALY CITY, a general law city and municipal corporation established under the Constitution of the State of California (the “City”).

B A C K G R O U N D :

A. The City and the North San Mateo County Sanitation District (the “District,” and together with the City, the “Members” and each a “Member”) desire to finance the Project (as defined herein).

B. The City and the District are parties to a Joint Exercise of Powers Agreement, dated as of March 1, 2021 (as amended, the “Joint Powers Agreement”), pursuant to which the Authority was established as a joint exercise of powers authority under the Joint Exercise of Powers Act (Government Code §6500 et seq.) (the “Joint Powers Law”) for the purpose of providing assistance to the City and the District with their financing programs, including the financing of the Project, and for any other financing purposes authorized under Article 4 of the Joint Powers Law and other applicable law.

C. Section 6504 of the Joint Powers Law authorizes the Members to make contributions for the purpose set forth in the Joint Powers Agreement, and the Joint Powers Agreement provides for agreements between the Authority and the Members (as defined in the Joint Powers Agreement) pursuant to which the Members would be obligated to pay their share of the debt service on bonds and other obligations of the Authority.

D. The City, the District and the Authority previously entered into that certain Memorandum of Agreement, dated as of March 29, 2024 (the “MOA”), pursuant to which the parties thereto (a) allocated ownership of the Project to the City, (b) allocated responsibility for construction of the Project to the City, with 49.23% of the construction costs allocable to the Water Enterprise and 50.77% of the construction costs allocable to the Sewer Enterprise (as defined in the District Financing Agreement referenced below) and (c) allocated responsibility for operation and maintenance of the Project to the City, with 49.23% of the operation and maintenance costs allocable to the Water Enterprise and 50.77% of the operation and maintenance costs allocable to the Sewer Enterprise.

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E. The Congress of the United States of America enacted the Water Infrastructure Finance and Innovation Act, §5021 et seq. of Public Law 113-121 as amended by Section 1445 of the Fixing America’s Surface Transportation Act of 2015, as further amended by Section 5008 of the Water Infrastructure Improvements for the Nation Act of 2016, Section 4201 of America’s Water Infrastructure Act of 2018, and by Sections 50214 and 50215 of the Infrastructure Investment and Jobs Act of 2021 (collectively, as the same may be amended from time to time, the “Act” or “WIFIA”), which is codified at 33 U.S.C. §§3901-3915.

F. The Act authorizes the United States Environmental Protection Agency, an agency of the United States of America (“EPA”), acting by and through the Administrator of the EPA, with an address at 1200 Pennsylvania Avenue NW, Washington, DC 20460 (the “WIFIA Lender”) to enter into agreements to provide financial assistance with one or more eligible entities to make secured loans with appropriate security features to finance a portion of the eligible costs of projects eligible for assistance.

G. The Members have asked that the WIFIA Lender make a secured loan to the Authority (the “WIFIA Loan”), pursuant to the Act, to be used to pay a portion of the eligible costs of the Project, and the WIFIA Lender and the Authority are concurrently with the effectiveness of this Agreement entering into a WIFIA Loan Agreement, dated as of _____, 2026 (the “WIFIA Loan Agreement”).

H. In order to evidence the WIFIA Loan, the Authority has authorized the issuance of its Daly City Joint Powers Financing Authority 2026 Wastewater Revenue Bond (WIFIA Loan) (the “WIFIA Bond”), under the provisions of Article 4 (commencing with Section 6584) of Chapter 5 of Division 7 of Title 1 of the Government Code of the State of California. The maximum principal amount of the WIFIA Bond shall not exceed $33,890,228. Interest shall accrue on the WIFIA Bond at the interest rates and be payable on the dates as provided therein and in the WIFIA Loan Agreement. The WIFIA Bond will be issued pursuant to the WIFIA Loan Agreement.

I. The WIFIA Loan Agreement requires the City to execute and deliver a Financing Agreement to evidence the City’s obligation to make its Authority Bond Payments, and to secure its obligation to pay its Authority Bond Payments with its City Revenues (as defined in the WIFIA Loan Agreement).

J. The Authority and the City wish to enter into this Agreement in order to implement the existing provisions of the Joint Powers Agreement with respect to the repayment of the WIFIA Bond and the WIFIA Loan and to provide security for the WIFIA Bond and the WIFIA Loan. The District is concurrently with the effectiveness of this Agreement entering into a Financing Agreement (WIFIA Loan Agreement), dated as of ___, 20__ (the “District Financing Agreement”) for the same purpose.

K. In connection with obtaining financial assistance for the Project from the State Water Resources Control Board (the “State Water Board”) pursuant to Section 13475 et seq. of the California Water Code, the City has previously entered into (i) a Construction Loan Agreement, by and among the State Water Board, the Authority, the City and the District, which was executed by the State Water Board on May 19, 2025 and (ii) a related Financing Agreement, dated as of September 12, 2024 (the “2025 SRF Financing Agreement”), by and between the Authority and the City. Under the 2025 SRF Financing Agreement, the City agreed to make certain payments denominated Member

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Agency Payments (“2025 SRF Member Agency Payments”). The City’s obligation to make the 2025 SRF Member Agency Payments is secured by a pledge of and payable from Net Revenues of the Water Enterprise.

L. The 2025 SRF Financing Agreement allows the City to incur additional obligations secured by and payable from Net Revenues on a parity basis with the 2025 SRF Member Agency Payments, including the Authority Bond Payments.

A G R E E M E N T :

In consideration of the foregoing and the material covenants hereinafter contained, the City and the Authority formally agree as follows:

Section 1. Definitions. In the event of a conflict between a term as defined in this Agreement and as such term as defined in the WIFIA Loan Agreement, the definition given such term in the WIFIA Loan Agreement shall control. Otherwise, the terms defined in the recitals above and in Appendix A hereto have the respective meanings given those terms when used in this Agreement.

Section 2. Authority Bond Payments. The Authority and the City hereby agree that the City is obligated to pay the Authority Bond Payments, as set forth herein.

Section 3. Authority Bond Payments; Prepayment; Security Deposit.

(a) Payment Dates and Amounts. The City shall be solely responsible for payment of the Authority Bond Payments. The City shall pay the Authority Bond Payments in semiannual installments in the amounts and at the times set forth in Appendix B hereto.

The Authority and the City acknowledge and agree that the Authority Bond Payments set forth in Appendix B hereto are initially equal to the payments of principal and interest set forth on the Loan Amortization Schedule in Exhibit F (WIFIA Debt Service) to the WIFIA Loan Agreement in all respects, other than with respect to the relevant payment dates.

The Authority and the City agree that (i) upon any modification to Exhibit F (WIFIA Debt Service) to the WIFIA Loan Agreement, Appendix B hereto shall be deemed modified mutatis mutandis, (ii) the City will provide to the Authority (with a copy to the WIFIA Lender) a revised Appendix B which the Authority and the City agree will replace the then current Appendix B (such replacement being a ministerial act and not an amendment or supplement to this Agreement), (iii) no modification to Appendix B hereto shall otherwise be made without the consent of the WIFIA Lender and (iv) the City’s failure to provide or delay in delivering such revised Appendix B shall not affect the modifications deemed to be made thereto or the obligation of the City to make the Authority Bond Payments as so modified.

(b) Optional Prepayment. The City may exercise its option to prepay the principal components of the Authority Bond Payments in whole or in part on any date on which the WIFIA Loan is subject to optional prepayment under the WIFIA Loan Agreement. Such option shall be exercised by payment of a prepayment price equal to the sum of (a) the aggregate principal components of the Authority Bond Payments to be prepaid and (b) the interest component of the Authority Bond Payments required to be paid on or accrued to such date; provided that such prepayments shall be in principal amounts of $1,000,000 or any integral multiple of $1.00 in excess thereof. The City shall prepay the Authority Bond

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Payments on the same dates and in the same amounts as the Authority’s optional prepayments of the WIFIA Loan in accordance with the WIFIA Loan Agreement and shall not optionally prepay the Authority Bond Payments at any other time or in any other amounts. The City shall provide written notice of a prepayment pursuant to this Section 3(b) and rescission of an announced prepayment in sufficient time to allow the Authority to meet the notice requirements of the WIFIA Loan Agreement. Anything in this Section 3(b) to the contrary notwithstanding, the failure by the City to make any optional prepayment shall not constitute a breach or default under this Agreement.

(c) Security Deposit. Notwithstanding any other provision hereof, the City may on any date secure the payment of Authority Bond Payments, in whole or in part, by irrevocably depositing with the Authority an amount of cash which, together with other available amounts, is either (i) sufficient to pay all such Authority Bond Payments, including the principal and interest components thereof, when due as set forth in Appendix B or when due on any optional prepayment date under the preceding subsection (b), or (ii) invested in whole or in part in non-callable Federal Securities in such amount as will, in the opinion of an Independent Accountant (which opinion is addressed and delivered to the Authority and the WIFIA Lender), together with interest to accrue thereon and together with any cash which is so deposited, be fully sufficient to pay all such Authority Bond Payments when due as set forth in Appendix B or when due on any optional prepayment date under the preceding subsection (b).

If the City posts a security deposit under this Section 3 for the payment of all remaining Authority Bond Payments identified by the WIFIA Lender, such security deposit shall not be deemed to be a repayment or prepayment of the Authority Bond Payments in full, and each of the Authority and the City shall comply with all of its obligations hereunder and under the other WIFIA Loan Documents (as defined in the WIFIA Loan) (other than with respect to payments of Authority Bond Payments, which payments shall continue to be made in accordance with Appendix B hereto (including by any successor entity assuming the City’s payment obligations hereunder), unless otherwise agreed by the WIFIA Lender, until the irrevocable payment in full in immediately available funds of the WIFIA Loan Balance (as defined in the WIFIA Loan Agreement) (and the corresponding unpaid principal components of the Authority Bond Payments), together with all accrued interest (and the corresponding interest components of the Authority Bond Payments), fees and expenses with respect thereto.

Notwithstanding the foregoing, should the security deposit under this Section 3 be insufficient to satisfy the full amount of Authority Bond Payments, the City shall remain obligated to pay such amounts.

Section 4. Pledge of Net Revenues; Application of Revenues.

(a) Pledge of Net Revenues. The City hereby pledges and creates a lien on and security interest in all Net Revenues to secure the payment of the Authority Bond Payments as provided herein; provided, however, that out of the Net Revenues there may be applied such sums for such purposes as are permitted hereunder. This pledge shall constitute a pledge of and charge and lien upon the Net Revenues, which pledge and lien upon the Net Revenues is on a parity with any pledge and lien of Parity Obligations, and all other moneys on deposit in the funds and accounts established hereunder for the payment of the Authority Bond Payments in accordance with the terms hereof and thereof.

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(b) Water Fund; Application of Revenues. In order to carry out and effectuate the pledge, charge and lien contained herein, the City agrees and covenants that all Revenues received by it shall be deposited when and as received in the City’s Water Fund which fund the City has previously established and agrees and covenants to maintain so long as the Authority Bond Payments are unpaid, and all money on deposit in the Water Fund shall be applied and used only as provided below, and shall be accounted for separate and apart from all other moneys, funds or other resources of the City. The City may, to the extent provided in Section 12, transfer amounts in the Water Fund to the Rate Stabilization Fund or from the Rate Stabilization Fund to the Water Fund.

Money in the Water Fund, after paying as they become due and payable all Maintenance and Operation Costs, shall be applied by the City to pay when due the following amounts in the following order of priority:

(i) On or before each Authority Bond Payment Date, the City shall, from amounts in the Water Fund, transfer to the Authority for deposit into the WIFIA Debt Service Account (as defined in the WIFIA Loan Agreement) an amount that, together with amounts held in the WIFIA Debt Service Account for that purpose, is equal to the interest amount becoming due and payable on such Authority Bond Payment Date, as set forth in Appendix B.

(ii) On or before each Authority Bond Payment Date, the City shall, from amounts in the Water Fund, transfer to the Authority for deposit into the WIFIA Debt Service Account an amount that, together with amounts held in the WIFIA Debt Service Account for that purpose, is equal to the principal amount becoming due and payable on such Authority Bond Payment Date, as set forth in Appendix B.

(iii) On or before each Authority Bond Payment Date, the City shall, from moneys in the Water Fund, pay to the party entitled thereto or transfer or cause to be transferred to any applicable debt service or other payment fund or account for any Parity Obligations, without preference or priority to the transfers made pursuant to the preceding clauses (i) and (ii), on the dates specified in the Issuing Instrument relating to such Parity Obligations, the sum or sums required to be paid or deposited in such debt service or other payment fund or account with respect to principal, premium, if any, and interest on Parity Obligations.

(iv) On or before each Authority Bond Payment Date, the City shall, from amounts in the Water Fund in excess of the sums required to make the transfers specified in the foregoing clauses (i), (ii) and (iii), transfer or cause to be transferred to any applicable debt service reserve fund for any Parity Obligation other than the WIFIA Bond, the sum or sums required to be paid or deposited in such debt service reserve fund in accordance with the terms of such Parity Obligation..

(v) On or before each Authority Bond Payment Date, the City shall, from amounts in the Water Fund in excess of the sums required to make the transfers specified in foregoing clauses (i), (ii), (iii) and (iv), pay to the party entitled thereto or transfer or cause to be transferred to any applicable debt service or other payment fund or account for any Subordinated Obligations, on the dates specified in the Issuing Instrument relating to such Subordinated Obligations, the sum or

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sums required to be paid or deposited in such debt service or other payment fund or account with respect to principal, premium, if any, and interest on Subordinated Obligations.

(vi) All money on deposit in the Water Fund in excess of the sums required to be set aside on or before each Authority Bond Payment Date by the provisions of the foregoing clauses (i), (ii), (iii), (iv) and (v) shall be available for (A) the payment of any unsecured obligations (including, but not limited to, any amounts payable by the City under Section 10(a), Sections 14(p)(i) and 14(p)(ii), and Section 32 of the WIFIA Loan Agreement) (B) the acquisition and construction of improvements to the Water Enterprise, (C) any transfers permitted under this Agreement to the Rate Stabilization Fund and (D) any other lawful purpose of the City (provided that the foregoing clause (D) shall not supersede, modify or otherwise affect the City’s obligations pursuant to Section 15(g) of the WIFIA Loan Agreement).

The City shall manage, conserve and apply amounts on deposit in the Water Fund in such a manner that all deposits required to be made under this Section 4 will be made at the times and in the amounts so required.

Section 5. Special Obligation of the City; Obligations Absolute.

(a) Special Obligation of the City. The City’s obligation to pay the Authority Bond Payments and any other amounts coming due and payable hereunder is a special obligation of the City limited to its Net Revenues. Under no circumstances is the City required to advance moneys derived from any source of income other than its Net Revenues and other sources specifically identified herein for the payment of the Authority Bond Payments and such other amounts. No other funds or property of the City are liable for the payment of the Authority Bond Payments and any other amounts coming due and payable hereunder.

(b) Obligations Absolute. The obligations of the City to pay the Authority Bond Payments from its Net Revenues and to perform and observe the other agreements contained herein are absolute and unconditional and are not subject to any defense or any right of set-off, counterclaim or recoupment arising out of any breach by the Authority of any obligation to the City or otherwise with respect to the Water Enterprise, whether hereunder or otherwise, or out of indebtedness or liability at any time owing to the City by the Authority. Until all of the Authority Bond Payments are fully paid or prepaid, the City will (a) not suspend or discontinue payment of any Authority Bond Payments, (b) perform and observe all other agreements contained in this Agreement, and (c) not terminate this Agreement for any cause, including but not limited to the occurrence of any acts or circumstances that may constitute failure of consideration, eviction or constructive eviction, destruction of or damage to the Water Enterprise or the Project, failure by the City to complete the acquisition and construction of the Project by the estimated completion date thereof, sale of the Project or the Water Enterprise, the taking by eminent domain of title to or temporary use of any component of the Project or the Water Enterprise, commercial frustration of purpose, any change in the tax laws or other laws of the United States of America or the State of California or any political subdivision of either thereof or any failure of the Authority to perform and observe any agreement, whether express or implied, or any duty, liability or obligation arising out of or connected with the WIFIA Loan Agreement or this Agreement.

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Section 6. Rates and Charges.

The City shall fix, prescribe, revise and collect rates, fees and charges for the services and facilities furnished by the Water Enterprise during each Fiscal Year which are at least sufficient to yield (a) Net Revenues for such Fiscal Year at least equal to one hundred twenty percent (120%) of Maximum Annual Debt Service on all Parity Obligations for such Fiscal Year and (b) Net Revenues for such Fiscal Year at least equal to one hundred twenty percent (120%) of Maximum Annual Debt Service on all Subordinated Obligations for such Fiscal Year, except that coverage of at least one hundred percent (100%) of Debt Service on all Subordinated Obligations shall be deemed sufficient with respect to Subordinated Obligations so long as Obligations of the City other than this Agreement are outstanding and, upon defeasance of all Obligations of the City other than this Agreement, this ratio must be at least one hundred twenty percent (120%), except where such Obligations of the City are defeased pursuant to Refunding Parity Obligations.

For the purposes of the calculation of the rate covenant described in clauses (a) and (b) above, Net Revenues may include transfers from the Rate Stabilization Fund; provided that the Net Revenues excluding such transfers are at least one hundred percent (100%) of the Maximum Annual Debt Service for the relevant Fiscal Year with respect to all Outstanding Obligations.

The City may make adjustments from time to time in such fees and charges and may make such classification thereof as it deems necessary, but shall not reduce the rates and charges then in effect unless the Net Revenues from such reduced rates and charges will at all times be sufficient to meet the requirements of this Section 6. The City shall increase such rates, fees and charges whenever necessary to produce Net Revenues sufficient to meet the requirements of this Section 6.

Section 7. No Senior Lien Debt. The City shall not create, incur or suffer to exist (a) any Obligations which are senior or prior in right to (i) the payment by the City of the Authority Bond Payments and the other Parity Obligations or (ii) the Lien on the Net Revenues in favor of the Authority or (b) any obligations, all or a portion of the proceeds of which are or will be applied at any time to fund all or any portion of Total Project Costs (as defined in the WIFIA Loan Agreement), that are secured by a Lien on any assets or property of the City other than the Net Revenues.

Section 8. Issuance of Parity Obligations and Subordinated Obligations.

(a) Without regard to subsection (c) of this Section 8, the City may at any time issue or enter into an obligation or commitment which is a Qualified Swap Agreement, provided (i) the Qualified Swap Agreement shall relate to a principal amount of Outstanding Parity Obligations or investments held under an Issuing Instrument for Parity Obligations, in each case specified by an Authorized Representative; and (ii) the notional amount of the Qualified Swap Agreement shall not exceed the principal amount of the related Parity Obligation or the amount of such investments, as applicable.

(b) Subject to subsection (c), the City may enter into Credit Support Instruments or otherwise become obligated for Credit Provider Reimbursement Obligations from time to time, provided that it complies with the requirements of subsection (c) of this Section 8.

For the avoidance of doubt with respect to municipal bond insurance policies, the amount

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considered in subsection (c) of this Section 8 shall only include accrued but unpaid interest on an amount actually advanced by the Credit Provider (if any as of the time of calculation) and any accrued but unpaid fees owed to the Credit Provider (if any as of the time of calculation), and does not require the double counting of Debt Service on a Parity Obligation and the amounts advanced by a Credit Provider under a Credit Support Instrument to pay Debt Service on such Parity Obligation.

(c) The City may, at any time and from time to time, issue any Additional Parity Obligations, provided the City obtains or provides a certificate or certificates, prepared by the City or at the City’s option by a Consultant, showing that all of the following conditions are met:

(i) The Net Revenues of the City in the most recent Fiscal Year, excluding transfers from the Rate Stabilization Fund, if any, meet the ratio for rate covenants set forth in Section 6 above;

(ii) The City is not in default on any Outstanding Obligation; and

(iii) (A) the estimated Net Revenues of the City for the Fiscal Year in which the proposed Additional Parity Obligation is issued, and (B) projected Net Revenues of the City for the five (5) Fiscal Years immediately following the Fiscal Year in which the Additional Parity Obligation is issued, will be at least equal to one hundred twenty percent (120%) of the maximum Annual Debt Service for such Fiscal Year(s) with respect to all Outstanding Parity Obligations, including the Additional Parity Obligation proposed to be issued. For purposes of clause (B), (1) if all or a portion of the interest on any Parity Obligations during such five (5) Fiscal Year period is being or will be capitalized, the five (5) Fiscal Year period will commence with the first Fiscal Year beginning on or after the last date on which such interest is capitalized, (2) projected Net Revenues of the City for each Fiscal Year in the five (5) Fiscal Year period may include Revenues arising from increases in the rates and charges estimated to be fixed and prescribed or received for the services of the Water Enterprise and which are economically feasible and reasonably considered necessary based on projected operations for such Fiscal Year, and (3) Net Revenues of the City may include Rate Stabilization Fund transfers, provided that the Net Revenues, excluding the amounts of such transfers, equals at least one hundred percent (100%) of the Maximum Annual Debt Service for the relevant Fiscal Year with respect to all Outstanding Parity Obligations, including the Additional Parity Obligation proposed to be issued.

(d) For purposes of preparing the certificate or certificates described in subsections (c) and (e), the City and any Consultant may rely upon the books and records of the City or any financial statements prepared by the City which have not been subject to audit by an Independent Accountant if audited financial statements for the particular Fiscal Year are not available.

(e) Upon the incurrence of any Additional Parity Obligations, the City shall provide to the WIFIA Lender a certificate signed by an Authorized Representative, (A) specifying the closing date with respect to such Additional Parity Obligations and (B) confirming that such Additional Parity Obligations are authorized pursuant to, and satisfy the applicable requirements under, the WIFIA Loan Agreement.

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(f)The City may, at any time and from time to time, issue any Subordinated Obligations, provided the City obtains or provides a certificate or certificates, prepared by the City or at the City’s option by a Consultant, showing that:

(i) Net Revenues of the City in the most recent Fiscal Year, excluding transfers from the Rate Stabilization Fund, if any, meet the ratio for rate covenants set forth in Section 6 above;

(ii) the City is not in default on any Outstanding Obligation; and

(iii) such Subordinated Obligation is fully subordinated to the Parity Obligations in priority of payment (as to both principal and interest), voting and priority of security interest with respect to the Net Revenues, including with respect to payment from revenues and reserves and payment upon default or acceleration of any such Obligations; provided that the Issuing Instrument for a Subordinated Obligation shall not supersede or conflict with any provision of the Financing Agreement or contain a right to accelerate without the consent of the WIFIA Lender.

(g) For purposes of preparing the certificate or certificates described in subsection (f) of this section, the City and any Consultant may rely upon the books and records of the City or any financial statements prepared by the City which have not been subject to audit by an Independent Accountant if audited financial statements for the particular Fiscal Year are not available.

(h) Upon the incurrence of any Subordinated Obligations, the City shall provide to the WIFIA Lender a certificate signed by an Authorized Representative, (A) specifying the closing date with respect to such Subordinated Obligations and (B) confirming that such Subordinated Obligations are authorized pursuant to, and satisfy the applicable requirements under, the WIFIA Loan Agreement.

Section 9. No Liens.

The City must not make any pledge of or place any lien on the Project, Water Enterprise, or Revenues except as otherwise provided or permitted by this Agreement and the WIFIA Loan Agreement.

Section 10. Operation and Insurance of the Water Enterprise. The City covenants and agrees to operate the Water Enterprise in an efficient and economical manner and to operate, maintain and preserve the Water Enterprise in good repair and working order. The City shall at all times maintain with responsible insurers all such insurance on the Water Enterprise as is customarily maintained with respect to works and properties of like character against accident to, loss of or damage to the Water Enterprise and in compliance with the requirements set forth in the WIFIA Loan Agreement. The City shall also maintain, with responsible insurers, worker’s compensation insurance and insurance against public liability and property damage to the extent reasonably necessary to protect the City, the Authority and the WIFIA Lender, as third-party beneficiary under this Agreement.

Section 11. Records and Accounts. The City shall keep proper books of record and accounts of the Water Enterprise in which complete and correct entries are made of

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all transactions relating to the Water Enterprise. Said books shall, upon prior written request, be subject to the reasonable inspection of the Authority and the WIFIA Lender, as third-party beneficiary under this Agreement, or their representatives authorized in writing, upon not less than two business days’ prior notice to the City. The City shall cause the books and accounts of the Water Enterprise to be audited annually by an Independent Accountant not more than nine months after the close of each Fiscal Year, and shall make a copy of such report available for inspection by the Authority and the WIFIA Lender, as third-party beneficiary under this Agreement. Such report may be part of a combined financial audit or report covering all or part of the City’s finances.

Section 12. Establishment and Maintenance of Rate Stabilization Fund. The City shall maintain and hold a separate fund to be known as the “Rate Stabilization Fund.” From time to time the City may deposit in the Rate Stabilization Fund from Net Revenues such amounts as the City shall determine, in accordance with Section 4(b), provided that deposits for each Fiscal Year may be made until (but not after) one hundred eighty (180) days following the end of such Fiscal Year. The City may withdraw amounts from the Rate Stabilization Fund only for transfer to the Water Fund for inclusion in Revenues for any Fiscal Year, such withdrawals to be made until (but not after) one hundred eighty (180) days after the end of such Fiscal Year. All interest or other earnings upon deposits in the Rate Stabilization Fund shall be withdrawn therefrom and accounted for as Revenues.

Amounts in the Rate Stabilization Fund are not pledged to the Authority Bond Payments or any Parity Obligation.

Section 13. Reserved.

Section 14. Cooperation with Bond Issuance. The City agrees that it will execute and deliver any and all such closing certificates, agreements, instruments, other documents or other assurances as may be reasonably requested by the Authority to complete the issuance and sale of the WIFIA Bond. Without limiting the generality of the foregoing, the City agrees to furnish the Authority such financial and operating information, continuing disclosure documents or reports as the Authority may reasonably request for disclosure under the WIFIA Loan Agreement.

Section 15. No Cross-Collateralization. In the event that the District fails to make any payments required pursuant to the District Financing Agreement, dated as of the date hereof, between the District and the Authority, or satisfy any financial obligation thereunder, the City shall have no obligation to pay such amounts and none of the District, the Authority, or the WIFIA Lender shall have any right to compel the City to pay such amounts.

Section 16. Scope of this Agreement. This Agreement does not obligate the City to make any payments related to the WIFIA Bond except as set forth herein. In the event the Authority issues an additional series of bonds, notes or other obligations in accordance with the Joint Powers Agreement to provide financing for the Project, the City may (but is not obligated to) determine to raise its portion of the costs thereof by participating in the issuance of such bonds, notes or other obligations, and in such event the City may (but is not obligated to) enter into an additional agreement with the Authority to obligate the City to pay and secure the payment of its obligations in respect thereof.

Such additional obligations of the City, if any, may (but are not required to) be issued as Parity Obligations upon compliance with the conditions set forth in Section 8; in that event,

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but only in that event, all references in this Agreement to “Parity Obligations” will apply to such additional obligations of the City.

Section 17. Termination or Amendment; Other Related Financing Agreements. (a) The Authority and the City shall not amend or modify any of the provisions of this Agreement without the prior written consent of the WIFIA Lender.

(b) The Authority shall not take any of the following actions without the express written consent of the WIFIA Lender, as third-party beneficiary under this Agreement: (i) enter into an agreement similar to this Agreement with another party for the purpose of securing additional revenue to make its payments under the WIFIA Loan Agreement; (ii) add additional members to the Joint Powers Agreement; or (iii) amend the payment terms of this Agreement.

Section 18. Events of Default and Remedies.

(a) If an Event of Default under and as defined in the WIFIA Loan Agreement shall have occurred, then an "Event of Default" shall have occurred hereunder, and the Authority shall immediately notify the WIFIA Lender of such Event of Default and shall follow any written directions of the WIFIA Lender, which may include a direction to declare the entire principal amount of the unpaid Authority Bond Payments and the accrued interest thereon to be due and payable immediately, and upon any such declaration the same shall become immediately due and payable, anything contained herein to the contrary notwithstanding; provided that the unpaid

Authority Bond Payments shall automatically become due and payable without the action of the Authority or any other person if the unpaid principal amount of the WIFIA Loan shall have become immediately due and payable. Notwithstanding anything to the contrary set forth herein, the Authority shall not have the right to (i) accelerate the Authority Bond Payments or (ii) exercise any other rights or remedies hereunder following the occurrence of an Event of Default in each case without the prior written direction of the WIFIA Lender.

(b) Upon the occurrence of an Event of Default, the Authority shall have the right (but only following the prior written direction of the WIFIA Lender):

(i) by mandamus or other action or proceeding or suit at law or in equity to enforce its rights against the City or any director, officer or employee thereof, and to compel the City or any such director, officer or employee to perform and carry out its or his duties under the law and the agreements and covenants required to be performed by it or him or her contained herein;

(ii) by suit in equity to enjoin any acts or things which are unlawful or violate the rights of the Authority;

(iii) by suit in equity to require the City and its directors, officers and employees to account as the trustee of an express trust for the benefit of the WIFIA Lender as assignee of the Authority pursuant to the WIFIA Loan Agreement; or

(iv) to apply the Default Rate (as defined in the WIFIA Loan Agreement) to the unpaid balance of the Authority Bond Payments.

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(c) Upon the occurrence of an Event of Default, the WIFIA Lender, as assignee of the Authority pursuant to the WIFIA Loan Agreement, shall be entitled and empowered to institute any actions or proceedings at law or in equity against the City for the collection of any sums due to the Authority from the City and unpaid hereunder, and may prosecute any such judgment or final decree against the City and collect in the manner provided by law the moneys adjudged or decreed to be payable, may take such other actions at law or in equity as may appear necessary or desirable to collect all amounts payable by the City to the Authority under this Agreement then due and thereafter to become due, or to enforce performance and observance of any obligation, agreement or covenant of the City under this Agreement.

Section 19. Governing Law. This Agreement will be construed in accordance with and governed by the laws of the State of California.

Section 20. Assignment; Binding Effect. This Agreement and any rights hereunder may be assigned by the Authority, as a whole or in part, to the WIFIA Lender without the necessity of obtaining the prior consent of the City. Subject to the foregoing sentence, neither the rights or obligations of the Authority or the City hereunder nor any interest herein may be assigned or delegated without the prior written consent of the WIFIA Lender. This Agreement inures to the benefit of and is binding upon the Authority, the City and their respective successors and assigns, subject, however, to the limitations contained herein.

Section 21. Severability of Invalid Provisions. If any one or more of the provisions contained in this Agreement are for any reason held to be invalid, illegal or unenforceable in any respect, then such provision or provisions will be deemed severable from the remaining provisions contained in this Agreement and such invalidity, illegality or unenforceability will not affect any other provision of this Agreement, and this Agreement will be construed as if such invalid or illegal or unenforceable provision had never been contained herein. The Authority and the City each hereby declares that it would have entered into this Agreement and each and every other Section, paragraph, sentence, clause or phrase hereof irrespective of the fact that any one or more Sections, paragraphs, sentences, clauses or phrases of this Agreement may be held illegal, invalid or unenforceable.

Section 22. Payment on Non-Business Days. Whenever any payment is required to be made hereunder on a day which is not a business day, such payment will be made on the immediately preceding business day.

Section 23. Execution of Counterparts; Electronic Delivery. This Agreement and any amendments, waivers, consents or supplements hereto or in connection herewith may be executed in any number of counterparts and by the different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute one and the same instrument; signature pages may be detached from multiple separate counterparts and attached to a single counterpart so that all signature pages are physically attached to the same document. Electronic delivery of an executed counterpart of a signature page of this Agreement or of any document or instrument delivered in connection herewith shall be effective as delivery of an original executed counterpart of this Agreement or such other document or instrument, as applicable.

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Section 24. Third Party Beneficiary. The WIFIA Lender is hereby made a third party beneficiary hereof and is entitled to the benefits of this Agreement with the same force and effect as if the WIFIA Lender were a party hereto.

Section 25. Integration. This Agreement and the WIFIA Loan Agreement constitute the complete and final agreement between the parties. No oral or written understanding or agreement not incorporated in this Agreement shall be binding on either party.

[Remainder of page intentionally left blank. Signatures on next page.]

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IN WITNESS WHEREOF, the Authority and the City have caused this Agreement to be executed in their respective names by their duly authorized officers, all as of the date first above written.

DALY CITY JOINT POWERS FINANCING

AUTHORITY

By
Executive Director

ATTEST:

By
Secretary

CITY OF DALY CITY

By
City Manager

ATTEST:

By
City Clerk

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APPENDIX A

DEFINED TERMS

“Additional Parity Obligations” means Parity Obligations issued for the purpose of paying all or a portion of the costs of the Water Enterprise, including, without limitation, the financing of all or a part of the cost of acquisition and construction of any additions to or improvements of the Water Enterprise and satisfying the conditions set forth in Section 8(c).

“Authority Bond Payment Date” means the fifth (5th) business day prior to each Payment Date (as defined in the WIFIA Loan Agreement).

“Authority Bond Payments” means the amounts paid by the City under Section 3 of this Agreement.

“Authorized Representative” means the City Manager, the Finance Director or any other officer of the City duly authorized to act as an Authorized Representative for purposes of this Agreement by resolution of the City Council of the City or written authorization of the City Manager or the Finance Director.

“Consultant” means a consultant, consulting firm, engineer, architect, engineering firm, architectural firm, accountant or accounting firm retained by the City to perform acts, prepare certificates or otherwise carry out the duties provided for a Consultant in this Agreement. Such consultant, consulting firm, engineer, architect, engineering firm or architectural firm shall be nationally recognized within its profession for works of the character required. Such accountants or accounting firm shall be Independent Accountants licensed to practice in the State of California.

“Credit Provider” means any municipal bond insurance company, bank or other financial institution or organization which is performing in all material respects its obligations under any Credit Support Instrument for some or all of the Parity Obligations.

“Credit Provider Reimbursement Obligations” means obligations of the City to pay from the Water Fund amounts due under a Credit Support Agreement, including without limitation amounts advanced by a Credit Provider pursuant to a Credit Support Instrument as credit support or liquidity for Parity Obligations and the interest with respect thereto.

“Credit Support Agreement” means, with respect to any Credit Support Instrument, the agreement or agreements (which may be the Credit Support Instrument itself) between the City and the applicable Credit Provider, as originally executed or as it may from time to time be replaced, supplemented or amended in accordance with the provisions thereof, providing for the reimbursement to the Credit Provider for payments under such Credit Support Instrument, and the interest thereon, and includes any subsequent agreement pursuant to which a substitute Credit Support Instrument is provided, together with any related pledge agreement, security agreement or other security document.

“Credit Support Instrument” means a policy of insurance, a letter of credit, a stand- by purchase agreement, revolving credit agreement or other credit arrangement pursuant

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to which a Credit Provider provides credit or liquidity support with respect to the payment of interest, principal or the purchase price of any Parity Obligations.

“Debt Service” means, for any Fiscal Year, the aggregate amount of principal and interest scheduled to become due (either at maturity or by mandatory redemption) on all Outstanding Parity Obligations, calculated with the following assumptions;

a. Principal payments (unless a different subdivision of this definition applies for purposes of determining principal maturities or amortization) are made in accordance with any amortization schedule published for such principal, including any minimum sinking fund payments;

b. Interest on a variable rate Outstanding Parity Obligation that is not subject to a swap agreement and that is issued or will be issued as a tax-exempt obligation under federal law, is the average of the SIFMA Municipal Swap Index, or its successor index, during the 24 months preceding the date of such calculation;

c. Interest on a variable rate Outstanding Parity Obligation that is not subject to a swap agreement and that is issued or will be issued as a taxable obligation under federal law, is the average of SOFR, or its successor index, during the 24 months preceding the date of such calculation;

d. Interest on a variable rate Outstanding Parity Obligation that is subject to a swap agreement is the fixed swap rate or cap strike rate, as appropriate, if the variable rate has been swapped to a fixed rate or capped pursuant to an interest rate cap agreement or similar agreement;

e. Interest on a fixed rate Outstanding Parity Obligation that is subject to a swap agreement such that all or a portion of the interest has been swapped to a variable rate shall be treated as variable rate debt under subdivisions (b) or (c) of this definition of Debt Service;

f. Payments of principal and interest on an Outstanding Parity Obligation are excluded from the calculation of Debt Service to the extent such payments are to be paid from amounts then currently on deposit with a trustee or other fiduciary and restricted for the defeasance of such Outstanding Parity Obligation;

g. If twenty-five percent (25%) or more of the principal of an Outstanding Parity Obligation is not due until its final stated maturity, then principal and interest on that Outstanding Parity Obligation may be projected to amortize over the lesser of 30 years or the Useful Life of the financed asset, and interest may be calculated according to subdivisions (b)-(e) of this definition of Debt Service, as appropriate.

“Federal Securities” means: (a) any direct general obligations of the United States of America (including obligations issued or held in book entry form on the books of the Department of the Treasury of the United States of America), the timely payment of principal of and interest on which are unconditionally and fully guaranteed by the United States of America; and (b) any obligations the principal of and interest on which are unconditionally guaranteed by the United States of America.

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“Fiscal Year” means any twelve-month period extending from July 1 in one calendar year to June 30 of the succeeding calendar year, both dates inclusive, or any other 12-month period selected and designated by the City as its official fiscal year period.

“Generally Accepted Accounting Principles” means generally accepted accounting principles, the uniform accounting and reporting procedures set forth in publications of the American Institute of Certified Public Accountants or its successor, or by any other generally accepted authority on such procedures, and includes, as applicable, the standards set forth by the Governmental Accounting Standards Board or its successor, or the Uniform System of Accounts, as adopted by the California Public Utilities Commission for water utilities.

“Independent Accountant” means any certified public accountant or firm of certified public accountants appointed and paid by the City, and who, or each of whom (a) is in fact independent and not under domination of the City; (b) does not have any substantial interest, direct or indirect, in the City; and (c) is not connected with the City as an officer or employee of the City but who may be regularly retained to make annual or other audits of the books of or reports to the City.

“Issuing Instrument” means any indenture, trust agreement, loan agreement or other instrument or agreement under which Obligations are issued.

“Lien” means any mortgage, pledge, hypothecation, assignment, mandatory deposit arrangement, encumbrance, attachment, lien (statutory or other), charge or other security interest, or preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever, including any sale-leaseback arrangement, any conditional sale or other title retention agreement, any financing lease having substantially the same effect as any of the foregoing, and the filing of any financing statement or similar instrument under the UCC or any other applicable law.

“Maintenance and Operation Costs” means the reasonable and necessary costs paid or incurred by the City for maintaining and operating the Water Enterprise, determined in accordance with Generally Accepted Accounting Principles, including (a) all reasonable expenses of management and repair and all other expenses necessary to maintain and preserve the Water Enterprise in good repair and working order, (b) all reasonable and necessary administrative costs of the City that are charged directly or apportioned to the operation of the Water Enterprise, such as salaries and wages of employees, overhead, taxes (if any), the cost of permits, licenses, and charges to operate the Water Enterprise and insurance premiums and (c) amounts reasonably required to be set aside in an operations and maintenance contingency reserve for such costs the payment of which is not immediately required, and which shall not exceed, for purposes of constituting Maintenance and Operation Costs for a Fiscal Year that can be paid prior to Debt Service on Outstanding Parity Obligations, five percent (5%) of the budgeted Maintenance and Operation Costs set forth in the then current adopted budget (the “O&M Reserve Amounts”) (for clarity, nothing in this clause (c) shall limit the aggregate amount of O&M Reserve Amounts, or the amount of Net Revenues for a Fiscal Year or any prior Fiscal Year that can be deposited into an operations and maintenance contingency reserve from amounts in the Water Fund pursuant to clause (vi) of Section 4(b) above); but excluding, in all cases (a) depreciation, replacement, and obsolescence charges or reserves therefor and amortization of intangibles, (b) all costs paid from the proceeds of taxes received by the City and (c) all interest charges and charges for the payment of

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principal, or amortization, of bonded or other indebtedness of the City, and payments pursuant to a Qualified Swap Agreement. For the avoidance of doubt, “Maintenance and Operation Costs” includes amounts payable for operation and maintenance under the Joint Powers Agreement, the MOA and equivalent agreements entered into between the City and the Authority with respect to other projects, but does not include payments made by the City under the Joint Powers Agreement in respect of debt service on notes, bonds or other obligations issued by the City or the Authority.

“Maximum Annual Debt Service” means the maximum amount of Debt Service due on any Outstanding Parity Obligations in a Fiscal Year during the period commencing with the Fiscal Year for which such calculation is made and within the next five years in which Debt Service for such Outstanding Parity Obligations will become due.

“Net Revenues” for any Fiscal Year means the sum of Revenues for such Fiscal Year less the sum of all Maintenance and Operation Costs for such Fiscal Year.

“Obligations” means (a) obligations with respect to borrowed money and includes loans or other evidences of indebtedness, installment purchase payments under any contract, and lease payments under any financing or capital lease (determined to be such in accordance with Generally Accepted Accounting Principles), which are payable from the Water Fund, (b) obligations to replenish any debt service reserve fund with respect to obligations of the City described in (a) above; (c) obligations secured by or payable from any of obligations of the City described in (a) above; (d) obligations payable from the Water Fund and entered into in connection with, relating to, or otherwise serving as a hedge with respect to, an obligation described in (a), (b) or (c) above under (1) any contract providing for payments based on levels of, or changes in, interest rates, currency exchange rates, stock or other indices, (2) any contract to exchange cash flows or a series of payments, or (3) any contract to hedge payment, currency, rate spread or similar exposure, including but not limited to interest rate swap agreements and interest rate cap agreements; and (e) Credit Provider Reimbursement Obligations.

“Outstanding” means any Obligation that has not been discharged under the terms of the Issuing Instrument.

“Parity Obligations” means (a) the Authority Bond Payments, (b) the 2025 SRF Member Agency Payments payable under the 2025 SRF Financing Agreement, and (c) Additional Parity Obligations.

“Project” means the Vista Grande Drainage Basin Improvement project, located in City of Daly City, California, and consists of improvements to the regional stormwater drainage system infrastructure to manage flooding and enhance stormwater discharges to the Pacific Ocean, as more fully described in the WIFIA Loan Agreement.

“Qualified Swap Agreement” means a contract or agreement, payable from Net Revenues on a parity with the payment of Parity Obligations and satisfying the conditions of Section 8(a), intended to place Parity Obligations or the applicable investments on the interest rate, currency, cash flow or other basis desired by the City, including, without limitation, any interest rate swap agreement, currency swap agreement, forward payment conversion agreement or futures contract, any contract providing for payments based on levels of, or changes in, interest rates, currency exchange rates, stock or other indices, any contract to exchange cash flows or a series of payments, or any contract, including,

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without limitation, an interest rate floor or cap, or an option, put or call, to hedge payment, currency, rate, spread or similar exposure, between the City and a counterparty.

“Rate Stabilization Fund” means, the Rate Stabilization Fund established pursuant to Section 12 of this Agreement.

“Refunding Parity Obligations” means Parity Obligations issued for the purpose of refunding all or any portion of the Outstanding Parity Obligations and satisfying the conditions set forth in Section 6.

“Revenues” means, for each Fiscal Year, all gross income and revenue received by the City from the ownership or operation of the Water Enterprise, determined in accordance with Generally Accepted Accounting Principles, including:

(i) all rates, fees, and charges (including connection fees and charges) as received by the City for the services of the Water Enterprise,

(ii) amounts transferred into the Water Fund from any rate stabilization fund of the City and

(iii) all other income and revenue howsoever derived by the City from the ownership or operation of the Water Enterprise or arising from the Water Enterprise, including all income from the deposit or investment of any money in the Water Fund or any rate stabilization fund of the City or held on the City’s behalf,

minus amounts, if any, withdrawn by the City from Revenues during such Fiscal Year for deposit in the Rate Stabilization Fund and any moneys derived from refundable deposits and advances or contributions.

“SOFR” means the Secured Overnight Financing Rate.

“Subordinated Obligation” means any Obligation which is expressly made subordinate and junior in right of payment from the Water Fund to the payment of Parity Obligations.

“Uniform Commercial Code” or “UCC” means the Uniform Commercial Code, as in effect from time to time in the State of California.

“Water Enterprise” means all water collection, pumping, transport, treatment, storage, and disposal facilities, including land and easements thereof, owned by the City, including the Project, and all other properties, structures, or works hereafter acquired and constructed by the City and determined to be a part of the Water Enterprise, together with all additions, betterments, extensions, or improvements to such facilities, properties, structures, or works, or any part thereof hereafter acquired and constructed.

“Water Fund” means the fund or funds established and held by the City with respect to the Water Enterprise for the receipt and deposit of Gross Revenues.

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APPENDIX B

AUTHORITY BOND PAYMENT SCHEDULE
City of Daly City

(the payment dates shown on the attached payment schedule reflect the due dates on the WIFIA Bond and the Authority Bond Payments are due not later than the fifth (5th) Business Day prior to each such payment date on the WIFIA Bond)

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AMENDED AND RESTATED

MEMORANDUM OF AGREEMENT

Vista Grande Drainage Basin Improvement Project

This AMENDED AND RESTATED MEMORANDUM OF AGREEMENT (this “Agreement”), dated as of ____, 2026, is among DALY CITY JOINT POWERS FINANCING AUTHORITY, a joint exercise of powers authority duly organized and existing under the laws of the State of California (the “Authority”), CITY OF DALY CITY, a general city and municipal corporation established under the Constitution of the State of California (the “City”) and NORTH SAN MATEO COUNTY SANITATION DISTRICT, a county sanitation district and subsidiary district of the City established under the laws of the State of California (the “District”), and amends and restates that certain Memorandum of Agreement, dated as of March 29, 2024, by and among the Authority, the City and the District (the “Original Agreement”).

B A C K G R O U N D :

A. The City and the District desire to finance the costs of acquiring, constructing and/or reconstructing certain public facilities and improvements to maintain and enhance water quality, manage non-point source pollution, protect drinking water sources, and manage related impacts to City, District and regional water and wastewater systems including certain treatment facilities, pipelines and other infrastructure, which project is commonly referred to as the Vista Grande Drainage Basin Improvement Project (the "Project").

C. The Joint Powers Agreement provides for agreements between the Authority and the Members (as defined in the Joint Powers Agreement) pursuant to which the Members would be obligated to pay their share of the debt service on bonds and other obligations of the Authority.

D. The Members have asked the Authority to assist them with obtaining financial assistance from the State Water Resources Control Board (the “State Water Board”) pursuant to Section 13475 et seq. of the California Water Code, and the State Water Board, the Authority and the Members are concurrently entering into a Construction Loan Agreement (the “Construction Loan Agreement”) for the purpose of financing the Project.

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2 E. In connection with entering into the Construction Loan Agreement, the State Water Board required the Authority, the City and the District to enter into an agreement documenting their respective roles with respect to ownership and operation of the Project.

F. The Authority, the City and the District have determined that it is in their best interests to amend the Original Agreement to document certain additional terms in connection with a proposed financing provided by the Environmental Protection Agency under the Water Infrastructure Finance and Innovation Act.

A G R E E M E N T :

In consideration of the foregoing and the material covenants hereinafter contained, the City and the Authority formally agree as follows:

Section 1. Definitions. Capitalized terms used herein shall have the meanings given them in the preamble and Background section of this Agreement.

Section 2. Role of the Authority. The Authority, the City and the District hereby agree that the role of the Authority is limited to acting as a conduit to provide assistance with financing the Project, and that the Authority shall neither own nor operate the Project.

Section 3. Ownership of the Project. The City shall own the Project.

No entity other than the City shall own any portion of the Project.

Section 4. Construction of the Project. The City shall be responsible for construction of the Project, including the following specific tasks:

a. Selection of the third-party consultant to oversee the day-to-day activities of the planning, design, program implementation, communications, costs and schedule tracking, and construction of the Project.

b. To solicit bids, award, and enter into contracts for the Project.

c. To administer the construction, and review and approve construction contract progress payments and change orders as needed.

d. To approve, reject, or modify contracts for management, engineering and related studies and construction work, change orders, claim resolutions, and the acceptance of the completed construction of the Project.

e. To determine the adequacy of performance during the construction of the projects.

f. To apply for and receive any permits or consents required from other public agencies and entities for the Project.

g. To acquire by purchase, lease, gift, condemnation or otherwise, any real property or interest therein which it finds to be reasonably necessary for the Project.

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3 The City shall pay the costs of constructing the portion of the Project related to the City’s water enterprise from revenues of the water enterprise. The City shall send periodic invoices to the District to pay the costs of constructing the portion of the Project related to the District’s wastewater enterprise.

The parties have agreed that 49.23% of the construction costs shall be allocable to the water enterprise and 50.77% of the construction costs shall be allocable to the District’s wastewater enterprise. Within 18 months of Project completion, the parties agree to review actual construction costs, amend this Agreement in accordance with Section 7 to revise the allocation of construction costs, amend the Member Financing Agreements to revise the allocation of project related debt service, and take other actions as necessary to allocate actual construction costs including transfers of funds between the parties.

Section 5. Operation and Maintenance of the Project. The City shall be responsible for operating and maintaining the Project. More specifically, the City shall:

a. maintain, repair, replace, improve, and operate the Project,

b. solicit bids, award, and enter into contracts with third parties for services related to replacement, modification, or repair of the facilities, or parties thereof,

c. annually prepare a budget including proposed capital improvements and operation, maintenance, and replacement costs; and to provide for the allocation of these costs as described herein,

d. operate and maintain the Project in a reasonable and prudent manner,

e. maintain insurance for the Project as appropriate, and

e. comply with applicable laws and regulations and to act reasonably and prudently.

The City shall pay the costs of operating and maintaining the portion of the Project related to the City’s water enterprise from revenues of the water enterprise. The City shall send periodic invoices to the District to pay the costs of operating and maintaining the portion of the Project related to the District’s wastewater enterprise.

The parties have agreed that 49.23% of the operation and maintenance costs shall be allocable to the water enterprise and 50.77% of the operation and maintenance costs shall be allocable to the District’s wastewater enterprise. After the first full fiscal year of operating and maintaining the Project, the parties agree to annually review actual operation and maintenance costs and amend this Agreement in accordance with Section 7 to revise the allocation of future operation and maintenance costs.

Section 6. Management of Project Financing. The City shall be responsible for managing the financing of the Project, including the financing obtained from the State Water Board.

The parties have agreed that 49.23% of the financing costs shall be allocable to the water enterprise and 50.77% of the financing costs shall be allocable to the District’s wastewater enterprise. After Project completion, the parties agree to review actual

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4 financing costs and transfer funds between parties if the actual allocation varies from this Agreement and to account for any financing costs specific to one party.

Section 7. Loans. In the event the City with revenues of the water enterprise makes a payment on behalf of the District’s wastewater enterprise, such payment shall be treated as an unsecured loan by the City to the District that is payable from revenues of the wastewater enterprise and it shall accrue interest at a variable interest rate equal to the rate of return earned by the City’s pooled investment portfolio from the date of the payment by the City through the repayment date.

In the event the District with revenues of the wastewater enterprise makes a payment on behalf of the City’s water enterprise, such payment shall be treated as an unsecured loan by the District to the City that is payable from revenues of the water enterprise, and it shall accrue interest at a variable interest rate equal to the rate of return earned by the City’s pooled investment portfolio from the date of the payment by the District through the repayment date.

Section 8. Conflict. In the event of any conflict between this Agreement and the Original Agreement, this Agreement shall govern.

Section 9. Amendment; Termination. The parties may mutually agree to amend or terminate this agreement at any time by written agreement.

Section 10. Governing Law. This Agreement will be construed in accordance with and governed by the laws of the State of California.

Section 11. Severability of Invalid Provisions. If any one or more of the provisions contained in this Agreement are for any reason held to be invalid, illegal or unenforceable in any respect, then such provision or provisions will be deemed severable from the remaining provisions contained in this Agreement and such invalidity, illegality or unenforceability will not affect any other provision of this Agreement, and this Agreement will be construed as if such invalid or illegal or unenforceable provision had never been contained herein. The Authority and the City each hereby declares that it would have entered into this Agreement and each and every other Section, paragraph, sentence, clause or phrase hereof irrespective of the fact that any one or more Sections, paragraphs, sentences, clauses or phrases of this Agreement may be held illegal, invalid or unenforceable.

Section 12. Execution of Counterparts; Electronic Signatures. This Agreement may be executed in any number of counterparts, each of which will for all purposes be deemed to be an original and all of which together constitute but one and the same instrument.

The parties hereto acknowledge and agree that this Agreement may be executed by one or more electronic means (hereinafter referred to as “Electronic Signatures”). Each party hereto agrees that Electronic Signatures provided by such party shall constitute effective execution and delivery of this Agreement by such party to all other parties to or relying on this Agreement. Each party hereto agrees that Electronic Signatures shall constitute complete and satisfactory evidence of the intent of such party to be bound by those signatures and by the terms and conditions of this Agreement as signed. Each party

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5 agrees that Electronic Signatures shall be deemed to be original signatures for all purposes.

Each party hereto agrees to accept Electronic Signatures provided by any and all other parties to this Agreement as (i) full and sufficient intent by such parties to be bound hereunder, (ii) effective execution and delivery of this Agreement and (iii) constituting this Agreement an original for all purposes, without the necessity for any manually signed copies to be provided, maintained or to exist for back up or for any other purpose.

If Electronic Signatures are used to execute this Agreement, each party hereto hereby accepts the terms of, and intends and does sign, this Agreement by its Electronic Signature hereto.

[Remainder of page intentionally left blank. Signatures on next page.]

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6 IN WITNESS WHEREOF, the Authority and the City have caused this Agreement to be executed in their respective names by their duly authorized officers, all as of the date first above written.

DALY CITY JOINT POWERS FINANCING

AUTHORITY

By
Executive Director

ATTEST:

By
Secretary

CITY OF DALY CITY

By
City Manager

ATTEST:

By
City Clerk

NORTH SAN MATEO COUNTY

SANITATION DISTRICT

By
General Manager

ATTEST:

By
Secretary

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1 ORDINANCE NO. 1487

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF DALY CITY ADDING CHAPTER 5.96 TO THE DALY CITY MUNICIPAL CODE TO ESTABLISH AN

ENTERTAINMENT ZONE PROGRAM PURSUANT TO CALIFORNIA BUSINESS AND PROFESSIONS CODE SECTIONS 23039.5, 23357, 25690, 25691 & 25692 (AS AMENDED BY SB 969)

WHEREAS, the California Legislature passed SB 969, which amended the Alcoholic Beverage Control Act to permit cities, counties or combined cities/counties (on or after January 1, 2025) to establish “entertainment zones” by ordinance authorizing consumption of one or more types of alcoholic beverages in public streets, sidewalks or rights-of-way, subject to specified conditions.

WHEREAS, the City Council of the City of Daly City finds that creating such entertainment zones will promote economic vitality of commercial districts, support restaurants and bars, enhance special events, stimulate pedestrian activity and contribute to the downtown/ corridor placemaking goals of the City;
WHEREAS, the City Council further finds that it is necessary to adopt a local ordinance to designate entertainment zones in compliance with state law, establish the process and conditions by which licensed premises may participate and patrons may consume alcoholic beverages in a public outdoor venue under controlled circumstances;
NOW, THEREFORE, the City Council of the City of Daly City does ordain as follows:

SECTION 1: Chapter 5.96 is hereby added to the Daly City Municipal Code to read as follows:

CHAPTER 5.96

ENTERTAINMENT ZONES

5.96.010 Purpose and Intent

5.96.020 Definitions

5.96.030 Designation of Zones; Boundaries; Activation

5.96.040 License Participation; Conditions

5.96.050 Responsibilities of Event Organizers/Zone Managers

5.96.060 Age Verification & Identifiability

5.96.070 Review, Evaluation and Reporting

5.96.080 Enforcement and Penalties

5.96.010 Purpose and Intent.

A. This Chapter is adopted in furtherance of the authority granted under California Business & Professions Code § 23039.5 et seq., as amended by SB 969, to permit licensed businesses to sell or allow consumers to exit their licensed premises with open alcoholic beverage containers for consumption in designated public outdoor areas (“Entertainment Zones”).

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2 B. The purpose of this Chapter is to promote economic activity, pedestrian‐oriented social spaces, special events, and cultural activation, while protecting public health and safety, mitigating negative externalities such as underage consumption, littering, and nuisance activity, and ensuring proper coordination among the City, law enforcement, licensees and event organizers.

C. The City Council intends that participation by licensed businesses, event operators and patrons be subject to clear standards, defined zones, hours of operation, approved container types, identification procedures, and annual review to ensure continued compliance and public safety.

D. Nothing in this Chapter authorizes conduct otherwise prohibited by state or local law, including but not limited to public intoxication, disorderly conduct, violations of noise regulations, or violations of health and safety codes.

E. The City Council acknowledges that the California Department of Alcoholic Beverage Control (ABC”) retains full authority to enforce the ABC Act and applicable regulations notwithstanding the City’s designation of an Entertainment Zone.

5.96.020 Definitions.

A. “ABC Act” means the California Business & Professions Code and the regulations promulgated by the California Department of Alcoholic Beverage Control (ABC) governing alcoholic beverage licenses.

B. “Entertainment Zone” means a zone created by ordinance of the City of Daly City on or after January 1, 2025, that is designated in this Chapter (or subsequent amendment) and authorizes consumption of one or more types of alcoholic beverages on public streets, sidewalks or public rights-of-way within its defined boundaries during approved days and hours. (See Bus. & Prof. Code § 23039.5.)
C. “Licensed Premises” means a premises holding a valid on-sale ABC license (e.g., Type 41, 42, 47, 48) or a licensed beer manufacturer or licensed winegrower as permitted under the ABC Act and eligible to participate under this Chapter.

D. “Participating Licensee” means a licensee located within the boundaries of an Entertainment Zone that has submitted the required annual notice of intent to the ABC and the City (if required) and is permitted to allow patrons to exit its premises with open alcoholic beverage containers for consumption within the zone, subject to all applicable conditions.

E. “Open Container” means an alcoholic beverage container that is open and that is permitted to leave the Licensed Premises for consumption in the Entertainment Zone in accordance with this Chapter and the ABC Act.

F. “Public Right-of-Way” means a street, roadway, sidewalk, alley, plaza or other publicly owned pedestrian area open to the public.

G. “Non-glass/Non-metal Container” means a cup or container other than glass or metal approved by the City for use in the Entertainment Zone.

H. “Special Event” means an event approved pursuant to the City’s special event permit process, where the activation of the Entertainment Zone is described, the boundaries defined, and related City, law enforcement, event organizer, and licensee coordination has been completed.

5.96.030 Designation of Zones; Boundaries; Activation.

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3 A. The City Council may by ordinance establish an Entertainment Zone Program pursuant to this Chapter and may, by resolution adopted in accordance with and pursuant to this Chapter designate one or more Entertainment Zones within the City, identifying for each zone:

1. The geographic boundaries of the zone (streets/blocks/sidewalks/plazas).

2. The types of alcoholic beverages permitted for consumption within the zone (e.g., beer, wine, mixed drinks) and the approved container types.

3. The hours and days of operation during which open container consumption is permitted in the zone.

4. The process of activating the zone (e.g., during a Special Event Permit) and if applicable recurring activations.

5. Safety and supervision requirements, signage, age-verification protocols (21+ wristbands, etc.), security/staffing plans, trash/recycling disposal measures, and other management requirements.

6. Zones designated by resolution shall be deemed established pursuant to and in reliance upon the authority granted by this Chapter.

B. No alcohol consumption privileges under this Chapter may be authorized outside the hours of operation of the zone as set forth in the ordinance, nor during times when at least one Participating Licensee within the zone is not permitted to sell alcoholic beverages under its ABC license. (See Bus. & Prof. Code § 25691(a)–(b)).

C. Prior to enactment of a new zone or modification of an existing zone, or its activation, the City shall notify its law enforcement agency (e.g., the Daly City Police Department) and request feedback regarding:

1. Potential health and safety impacts (e.g., underage drinking, public intoxication, litter, traffic/parking, enforcement plans); and

2. Proposed boundaries, days/hours, permitted beverage types, and approved container types. (See Bus. & Prof. Code § 25692(a)).

D. The Participating Licensee shall annually submit its notice of intent to the ABC under the applicable state online tool.

E. The City may require that alcoholic beverage containers authorized for use within an Entertainment Zone bear an event-specific or zone-specific marking, logo, or identifier to assist City staff and law enforcement in determining whether a container originated from a Participating Licensee.

5.96.040 License Participation; Conditions.

A. A Licensed Premises within an Entertainment Zone that wishes to participate must:

1. Be located within the defined zone boundaries.

2. Submit annually the ABC notification of intent to participate in the open container privilege under the Entertainment Zone.

3. Comply with all of the following conditions:
a. Only alcoholic beverages of the type(s) specified in the zone ordinance may be served/consumed.
b. Open alcoholic beverage containers may leave the licensed premises only through an exit that leads directly into the Entertainment Zone and only during the approved zone hours.

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4 c. No alcoholic beverages acquired outside the licensed premises may be introduced into the zone by patrons (i.e., no BYOB or closed containers brought in).
d. The licensee must use containers that are approved (non-glass, non-metal) per the zone ordinance, and patrons must be provided with wristbands or other identifiable marking to show age (21+) as required by the zone management plan.
e. Delivery of alcoholic beverages by the licensee or third-party service to patrons within the Entertainment Zone is prohibited unless the delivery is to a private residence or private business not licensed under the ABC Act.

B. Participation by a licensee does not obligate the licensee to sell or provide alcoholic beverages for consumption off the premises. (See Bus. & Prof. Code § 23357(b)(2)).

C. The City may suspend or revoke a licensee’s local Entertainment participation privilege (or require additional conditions) upon a determination by the City Manager or designee, after consultation with the Daly City Police Department, that continued participation poses a risk to public health, safety, or welfare, or that repeated or material violations of this Chapter or an approved Zone Management Plan have occurred and if the licensee or associated event fails to comply with this Chapter or the applicable zone ordinance, or if public safety or nuisance issues arise. Any suspension or revocation shall apply solely to the privilege to participation in an Entertainment Zone under this Chapter. Such action shall not affect the underlying ABC license, which remains subject solely to ABC jurisdiction.

5.96.050 Responsibilities of Event Organizers/Zone Managers.

A. When a Special Event Permit is sought to activate an Entertainment Zone, the event organizer shall, as part of the permit, include a “Zone Management Plan” that addresses:

1. Age verification (21+ wristbands, checkout/entrance control),

2. Security/staffing (liaison with Daly City Police Department and other enforcement agencies),

3. Trash/recycling/disposal of containers (including separate receptacles for zone containers and requirements for returning or disposing containers before exit),

4. Signage (clearly identifying zone boundaries, permitted containers, “no outside alcohol” rule, hours of operation),

5. Patron flow/exit strategy (ensuring patrons exit licensed premises directly into the designated Entertainment Zone),

6. Noise/lighting/clean-up plan consistent with the City’s special event regulations and local nuisance/quiet hours codes,

7. Coordination with participating licensees and training of their staff, and

8. Reporting procedures: incident reporting to the Daly City Police Department within 24 hours if law enforcement responds to violence, public intoxication or other major incident (mirroring San José’s model),

9. Security Staffing and Public Safety Conditions: The Zone Management Plan shall include a security and staffing plan commensurate with the size, duration, location, and nature of the event and the anticipated number of patrons. Based on objective event characteristics, including but not limited to anticipated attendance, alcohol service scope, hours of operation, location-specific considerations, and prior

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5 incident history, the City may require the use of state-licensed security guards as part of the approved security plan.

Nothing in this Chapter shall be construed to establish fixed security ratios or to limit the authority of the City Manager, Police Chief, or their designees to impose additional, modified, or alternative security conditions as necessary to protect public health and safety, including prior to or during an event.

5.96.060 Age Verification & Identifiability.

A. Patrons consuming alcoholic beverages within the Entertainment Zone must be aged 21 or older.

B. The City (or its designee) shall establish a wristband or other uniform age-verification marking system for all patrons consuming alcohol in the zone; all participating licensees and event organizers must comply. (See Bus. & Prof. Code § 25690(a)).

5.96.070 Review, Evaluation and Reporting

A. The City (or its designated official or body) shall conduct a review of each Entertainment Zone every two (2) years following its adoption, in consultation with local law enforcement and other stakeholders, to evaluate whether the zone is being operated in a manner that protects health and safety, mitigates nuisance impacts, and supports economic goals. (See Bus. & Prof. Code § 25692(b)).

B. The results of the review, including incidents, enforcement actions, issues with litter or noise, business participation and economic metrics, shall be made available to the ABC upon request.

C. Based on the review, the Council may modify, suspend or revoke a zone’s designation, change its boundaries or hours, require additional conditions or terminate the zone if warranted.

5.96.080 Enforcement and Penalties.

A. Violation of any provision of this Chapter by a licensee, event organizer or patron may result in administrative or criminal enforcement actions as authorized by the Daly City Municipal Code or state law, including revocation of the licensee’s participation privilege, suspension of event permits, fines, or other penalties.

B. The City may adopt regulations, forms, fees and administrative procedures necessary to implement this Chapter.

C. Enforcement of this Chapter is cumulative and in addition to any enforcement authority exercised by the California Department of Alcoholic Beverage Control or other regulatory agencies.

SECTION 2. Severability. If any section, subsection, provision or part of this Ordinance, or its application to any person or circumstance, is held to be unconstitutional or otherwise invalid, the remainder of this Ordinance, and the application of such provision to other person or circumstances, shall not be affected thereby and shall remain in full force and effect and, to that end, the provisions of this Ordinance are severable.

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6 SECTION 3. Environmental Determination. The City Council finds, pursuant to Title 14 of the California Code of Regulations, Section 15378, that this Ordinance is exempt from the requirements of the California Environmental Quality Act (CEQA) in that it is not a project as provided by the Act, in that it does not have a potential for resulting in a detrimental physical change in the environment, directly or ultimately, as provided in Title 14, Section 15378(a), and that it is also exempt under the definition of "project" in Section 15378(b)(3) in that it concern general policy and procedure making.

SECTION 4. Publication and Effective Date. Pursuant to the provisions of Government Code Section 36933, a summary of this ordinance shall be prepared by the City Attorney. At least five (5) days prior to the Council meeting at which this ordinance is scheduled to be adopted, the City Clerk shall (1) publish the summary, and (2) post it in the City Clerk’s Office a certified copy of this ordinance. Within fifteen (15) days after the adoption of this ordinance, the City Clerk shall (1) publish the summary and (2) post in the City Clerk’s Office a certified copy of the full text of this ordinance along with the names of those City Council members voting for and against this ordinance or otherwise voting. This ordinance shall become effective thirty (30) days from and after its adoption.

Introduced this 9 th day of February , 2026.

Passed and adopted as an Ordinance of the City of Daly City at a regular meeting of the City Council of the City of Daly City held on the day of , 2026, by the following vote:

AYES, Councilmembers:

NOES, Councilmembers:

ABSENT, Councilmembers:

CITY CLERK OF THE CITY OF DALY CITY
APPROVED:

MAYOR OF THE CITY OF DALY CITY

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Daly City City CouncilFebruary 23, 2026

Daly City City Council
February 23, 2026