FEE AGREEMENT
DATED: [OCTOBER __, 2026]
Reference is hereby made to (a) that certain Reimbursement Agreement, dated as of [October 1, 2026] (as amended, restated or otherwise modified from time to time, the “Reimbursement Agreement”), among the City of San José Financing Authority (the “Authority”), the City of San José (the “City”) and Bank of America, N.A. (the “ Bank”), relating to the Authority’s (i) Subordinate Wastewater Revenue Commercial Paper Notes, Series A -1 and (ii) Subordinate Wastewater Revenue Commercial Paper Notes, Series A -2 (Federally Taxable) (collectively, the “Series A Notes”), and (ii) that certain Irrevocable Transferable Direct-Pay Letter of Credit dated [October __, 2026] (the “Letter of Credit”), issued pursuant to the Reimbursement Agreement, supporting the Series A Notes. Capitalized terms used herein that are not specifically defined herein shall have the meanings assigned to such terms in the Reimbursement Agreement or the Letter of Credit, as applicable.
The purpose of this Fee Agreement is to confirm the agreement between the Bank, the Authority and the City with respect to the Facility Fees ( as defined below) and certain other fees payable by the Authority to the Bank. This Fee Agreement is the Fee Agreement referenced in the Reimbursement Agreement, the terms of which are incorporated by reference into the Reimbursement Agreement. This Fee Agreement and the Reimbursement Agreement are to be construed as one agreement between the Authority, the City and the Bank, and all obligations hereunder are to be construed as obligations thereunder. All references to amounts due and payable under the Reimbursement Agreement will be deemed to include all amounts , fees and expenses payable under this Fee Agreement.
ARTICLE I. FEES.
Section 1.1. Facility Fees. The Authority hereby agrees to pay or cause to be paid to the Bank a non-refundable facility fee (the “Facility Fee” ) quarterly in arrears on each Facility Fee Payment Date on the daily undrawn Stated Amount of the Letter of Credit in effect from time to time during each calendar quarter immediately preceding such Facility Fee Payment date, at the Facility Fee Rate. As used herein, (i) “ Facility Fee Payment Date” means the last Business Day of each month immediately succeeding the end of a calendar quarter, and (ii) “Facility Fee Rate” means the fee rate per annum set forth in the grid below opposite Level 1; provided , however, if any Rating Agency downgrades its Obligor Rating to a Level less than Level 1, the applicable “Facility Fee Rate” shall be the rate per annum set forth in the grid below opposite the Level that corresponds to (i) if Obligor Ratings are assigned by all three Rating Agencies and two Obligor Ratings are equivalent, the Facility Fee Rate shall be based on the Level corresponding to those two equivalent Obligor Ratings, (ii) if Obligor Ratings are assigned by all three Rating Agencies and no two Obligor Rati ngs are equivalent, the Facility Fee Rate shall be based on the Level corresponding to the middle Obligor Rating, (iii) if Obligor Ratings are assigned by only two Rating Agencies and the Obligor Ratings are not equivalent, the Facility Fee Rate shall be based on the Level corresponding to the lower Obligor Rating, and (iv) if only one Obligor Rating is assigned by either S&P or Fitch, the Facility Fee Rate shall be based on the Level corresponding to that Obligor Rating:
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LEVEL S&P RATING FITCH RATING KROLL RATING FACILITY
FEE RATE
Level 1 AA- or above AA- or above AA- or above 31 bps (0.31%) Level 2 A+ A+ A+ 51 bps (0.51%)
Level 3 A A A 71 bps (0.71%)
Level 4 A- A- A- 91 bps (0.91%)
Level 5 BBB+ BBB+ BBB+ 126 bps (1.26%)
Level 6 BBB BBB BBB 161 bps (1.61%)
Upon the occurrence and during the continuance of an Event of Default , the Facility Fee Rate shall be increased by 150 bps ( 1.50%) per annum from the Facility Fee Rate in effect immediately prior thereto. Any change in the Facility Fee Rate resulting from a change in a n Obligor Rating shall be and become effective as of and on the date of the announcement of the change in such Obligor Rating. References to the Obligor Ratings above are references to the rating categories of the Rating Agencies as presently determined by the respective Rating Agencies and in the event of adoption of any new or changed rating system by any Rating Agency, the Obligor Ratings from the applicable Rating Agency shall be deemed to refer to the rating category under the new rating system which most closely approximates the applicable rating category as currently in effect. The Authority, the City and the Bank acknowledge that as of the Effective Date the Facility Fee Rate is that specified above for Level 1.
Section 1.2. Drawing Fee. The Authority hereby agrees to pay to the Bank a drawing fee of $250 for each Drawing (each, a “Draw Fee”) under the Letter of Credit , payable on the date such Drawing is made.
Section 1.3. Transfer Fee. The Authority hereby agrees to pay to the Bank a transfer fee of $2,500, payable upon each transfer of the Letter of Credit to any successor issuing and paying agent under the Issuing and Paying Agent Agreement plus, in each case, the reasonable fees of legal counsel retained by the Bank in connection therewith.
Section 1.4. Amendment Fee. The Authority hereby agrees to pay to the Bank on the date of any amendment , waiver or consent with respect to the Reimbursement Agreement, this Fee Agreement, the Letter of Credit or any other Related Document an amendment, waiver or consent fee, as applicable, in an amount of $2,500 plus, in each case, the reasonable fees of legal counsel retained by the Bank in connection therewith.
Section 1.5. Termination Fee. The Authority may terminate the Letter of Credit without the payment of a termination fee in accordance with the terms and provisions of the Letter of Credit and Section 2.07 of the Reimbursement Agreement.
Section 1.6. Payments. All amounts paid pursuant to this Fee Agreement shall be non- refundable. Computations of the Facility Fee Rate shall be made on the basis of a 360- day year
DRAFT--Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document. 4928-7084-6664.5
and actual days elapsed. All amounts paid pursuant to this Fee Agreement shall be paid in the manner and to the account set forth in the Reimbursement Agreement.
ARTICLE II. MISCELLANEOUS.
Section 2.1. Administration. The City and the Authority shall pay to the Bank promptly upon receipt of an invoice all fees and expenses of the Bank payable in accordance with this Fee Agreement; provided that the failure by the Bank to provide any such invoice shall not relieve the City or the Authority of its obligation to make payment of amounts as and when due hereunder.
Section 2.2. Amendments. No amendment to this Fee Agreement shall become effective without the prior written consent of the Authority, the City and the Bank.
Section 2. 3. Governing Law. THE PROVISIONS OF SECTION 7.10 OF THE
REIMBURSEMENT AGREEMENT SHALL BE INCORPORATED BY THIS REFERENCE
INTO THIS FEE AGREEMENT AS IF SUCH PROVISIONS WERE SET FORTH IN THEIR ENTIRETY EXCEPT THAT REFERENCES TO OTHER AGREEMENTS OR “THIS AGREEMENT” SHALL MEAN T HIS FEE AGREEMENT AND REFERENCES TO “HEREUNDER” OR “HEREOF” SHALL MEAN UNDER THIS FEE AGREEMENT OR OF THIS FEE AGREEMENT.
Section 2. 4. Counterparts. This Fee Agreement may be executed in two or more counterparts, each of which shall constitute an original , but when taken together shall constitute but one agreement and any of the parties hereto may execute this Fee Agreement by signing any such counterpart. This Fee Agreement may be delivered by the exchange of signed signature pages by facsimile transmission or by attaching a pdf copy to an email, and any printed or copied version of any signature page so delivered shall have the same force and effect as an originally signed version of such signature page.
Section 2. 5. Severability. Any provision of this Fee Agreement which is prohibited , unenforceable or not authorized in any jurisdiction shall , as to such jurisdiction, be ineffective to the extent of such prohibition, unenforceability or non- authorization without invalidating the remaining provisions hereof or affecting the validity, enforceability or legality of such provision in any other jurisdiction.
Section 2.6. Limited Liability of Authority and City; Waiver of Personal Liability . The Authority’s and the City’s obligations under this Fee Agreement shall be limited as provided in Section 7.19 of the Reimbursement Agreement, which is incorporated herein by this reference. No member, officer, official, agent or employee of the Authority or the City shall be individually or personally liable for the payment of any amount under this Fee Agreement or be subject to any personal liability or accountability by reason of the execution and delivery of this Fee Agreement; but nothing herein contained shall relieve any such member, officer, official, agent or employee of the Authority or the City from the performance of any official duty provided by law or by this Fee Agreement.
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DRAFT--Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.
Signature Page to Fee Agreement
IN WITNESS WHEREOF, the parties hereto have caused this Fee Agreement to be duly executed and delivered by their respective representatives thereunto duly authorized as of the date first set forth above.
Approved as to form:
SUSANA ALCALA WOOD, City Attorney
By:
Name: Rosa Tsongtaatarii
Title: Chief Deputy City Attorney
CITY OF SAN JOSE FINANCING
AUTHORITY
By:
Name: Maria Öberg
Title: Treasurer
Attested to:
By:
Name: Toni J. Taber, CMC
Title: Secretary
DRAFT--Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.
Signature Page to Fee Agreement
CITY OF SAN JOSE
By:
Name: Maria Öberg
Title: Director of Finance
Attested to:
By:
Name: Toni J. Taber, CMC
Title: City Clerk
DRAFT--Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.
Signature Page to Fee Agreement
BANK OF AMERICA, N.A.
By:
Name: Greg Bailey
Title: Senior Vice President
DRAFT--Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.