4935-0838-0872.4
REIMBURSEMENT AGREEMENT
Among
CITY OF SAN JOSE,
CITY OF SAN JOSE FINANCING AUTHORITY
and
BANK OF AMERICA, N.A.
Relating to:
CITY OF SAN JOSE FINANCING AUTHORITY
SUBORDINATE WASTEWATER REVENUE
COMMERCIAL PAPER NOTES, SERIES A-1
AND
CI
TY OF SAN JOSE FINANCING AUTHORITY
SUBORDINATE WASTEWATER REVENUE
COMMERCIAL PAPER NOTES, SERIES A-2 (FEDERALLY TAXABLE)
Dated as of [October 1, 2026]
DRAFT--Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.
Table of Contents
Page
ARTICLE I
DEFINITIONS
Section 1.01. Definitions ....................................................................................................2 Section 1.02. Other Interpretive Provisions ....................................................................... 12 Section 1.03. Accounting Terms ....................................................................................... 13 Section 1.04. Times of Day .............................................................................................. 13
ARTICLE II
LETTER OF CREDIT
Section 2.01. Issuance of Letter of Credit ......................................................................... 13 Section 2.02. Letter of Credit Drawings ............................................................................ 13 Section 2.03. Reimbursement of Certain Drawings under the Letter of Credit; Mandatory Prepayment; Interest .................................................................. 13 Section 2.04. Reimbursement of Drawings Other Than Drawings Creating Advances Under the Letter of Credit ........................................................................... 15 Section 2.05. Fees............................................................................................................. 15 Section 2.06. Method of Payment; Etc .............................................................................. 15 Section 2.07. Termination of Letter of Credit by the Authority ......................................... 15 Section 2.08. Computation of Interest and Fees ................................................................ 16 Section 2.09. Payment Due on Non-Business Day to Be Made on Next Business Day ............................................................................................................. 16 Section 2.10. Default Rate ................................................................................................ 16 Section 2.11. Source of Funds .......................................................................................... 16 Section 2.12. Extension of Stated Expiration Date ............................................................ 16 Section 2.13. Net of Taxes, Etc ......................................................................................... 16 Section 2.14. Increased Costs ........................................................................................... 18 Section 2.15. Maximum Interest Rate ............................................................................... 19 Section 2.16. Issuance Generally ...................................................................................... 19
ARTICLE
III
CONDITIONS PRECEDENT
Section 3.01. Conditions Precedent to Issuance of the Letter of Credit .............................. 20 Section 3.02. Conditions Precedent to Advances............................................................... 22
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
DRAFT--Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.
Table of Contents
(continued)
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ii
Section 4.01. Representations and Warranties of the Authority ......................................... 22 Section 4.02. Representations and Warranties of the City ................................................. 25
ARTICLE V
COVENANTS
Section 5.01. Covenants of the Authority .......................................................................... 29 Section 5.02. Covenants of the City .................................................................................. 34
ARTICLE VI
DEFAULTS
Section 6.01. Events of Default ........................................................................................ 39 Section 6.02. Rights and Remedies ................................................................................... 41 Section 6.03. Special Acceleration Terms for Certain Events of Default ........................... 42 Section 6.04. Suits at Law or in Equity and Mandamus .................................................... 43 Section 6.05. Remedies Not Exclusive .............................................................................. 43 Section 6.06. No Waiver of Remedies .............................................................................. 43
ARTICLE VII
MISCELLANEOUS
Section 7.01. Amendments, Etc ........................................................................................ 43 Section 7.02. Notices; Effectiveness; Electronic Communication...................................... 43 Section 7.03. Costs and Expenses; Damage Waiver .......................................................... 44 Section 7.04. Obligations Absolute ................................................................................... 46 Section 7.05. Successors and Assigns ............................................................................... 46 Section 7.06. Treatment of Certain Information; Confidentiality ....................................... 47 Section 7.07. Counterparts; Integration; Effectiveness ...................................................... 48 Section 7.08. Survival of Representations and Warranties................................................. 48 Section 7.09. Severability ................................................................................................. 48 Section 7.10. Governing Law; Jurisdiction; Jury Trial ...................................................... 48 Section 7.11. No Advisory or Fiduciary Relationship ....................................................... 49 Section 7.12. Electronic Execution of Certain Documents ................................................ 50 Section 7.13. USA PATRIOT Act Notice ......................................................................... 50 Section 7.14. Time of the Essence .................................................................................... 50 Section 7.15. Further Assurances ...................................................................................... 50
DRAFT--Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.
Table of Contents
(continued)
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iii
Section 7.16. No Third-Party Rights ................................................................................. 51 Section 7.17. EMMA Postings .......................................................................................... 51 Section 7.18. Acknowledgement Regarding Any Supported QFCs ................................... 51 Section 7.19. Limited Liability of Authority and the City ................................................. 52 Section 7.20. Waiver of Personal Liability ........................................................................ 52
EXHIBIT A – FORM OF BANK NOTE
EXHIBIT B – FORM OF NOTICE OF NON-ISSUANCE INSTRUCTION
EXHIBIT C – FORM OF COMPLIANCE CERTIFICATE
APPENDIX I – FORM OF IRREVOCABLE TRANSFERABLE DIRECT-PAY LETTER OF CREDIT
SCHEDULE I – NOTICES
DRAFT--Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.
REIMBURSEMENT AGREEMENT
THIS REIMBURSEMENT AGREEMENT dated as of [October 1, 2026] (together with any amendments or supplements hereto, this “Agreement”), is made among the CITY OF SAN JOSE (the “City”), the CITY OF SAN JOSE FINANCING AUTHORITY (the “Authority”) and BANK OF AMERICA, N.A. (together with its successors and assigns , the “Bank”). Capitalized terms used herein and not otherwise defined shall have the meaning provided in Article I WITNESSETH:
WHEREAS, the Authority is a joint exercise of powers authority duly organized and existing under and by virtue of the Joint Powers Agreement and the Act; and WHEREAS, the Former Agency, as of February 1, 2012, has been dissolved and the City has become the successor agency of the Former Agency pursuant to Part 1.85 of Division 24 of the California Health and Safety Code and pursuant to California Health and Safety Code Section 34178(b)(3), the joint exercise of powers agreement establishing the Authority remains in effect; and
WHEREAS, the Act authorizes and empowers the Authority to issue revenue bonds, notes and other evidences of indebtedness to assist local agencies with the financing and refinancing of public capital improvements, and to issue revenue bonds, notes and other evidences of indebtedness to refund such bonds, notes and other evidences of indebtedness; and WHEREAS, the Authority has determined to issue from time to time Series A Notes to assist the City with the financing and refinancing of the acquisition, construction and installation from time to time of certain Projects, including through the refunding of the Authority’s outstanding Subordinate Wastewater Revenue Notes and the refunding of any other bonds, notes or other evidences of indebtedness of the Authority or the City issued or incurred for such purpose; WHEREAS, pursuant to the Authority Resolution and the City Resolution, the Authority and the City authorized the issuance of the Series A Notes; WHEREAS, the Authority and the City ha ve requested the Bank to issue the Letter of Credit in order to assure the payment at maturity of the principal of and interest on the Series A Notes; and
WHEREAS, the Bank is prepared to issue the Letter of Credit upon the terms and conditions provided herein.
NOW,
THEREFORE, in consideration of the premises and the mutual agreements herein contained, the Authority, the City and the Bank agree as follows:
DRAFT--Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.
2 ARTICLE I
DEFINITIONS
Section 1.01. Definitions. In addition to other terms defined herein, unless the context shall indicate a contrary meaning or intent, the following terms shall have the respective meanings indicated below, such meanings to be applicable equally to both the singular and plural forms of such terms:
“Act” means Chapter 5 of Division 7 of Title 1 of the Government Code of the State of California, as amended.
“Advance” has the meaning set forth in Section 2.03(a)(i) hereof. “Affiliate” means, with respect to any Person, any Person that directly or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, such first Person. A Person shall be deemed to control another Person for the purposes of this definition if such first Person possesses, directly or indirectly, the power to direct, or cause the direction of, the management and policies of the second Person, whether through the ownership of voting securities, common directors, trustees or officers, by contract or otherwise. “Agreement” has the meaning set forth in the introductory paragraph hereof. “Alternate Letter of Credit” means a letter of credit delivered to the Issuing and Paying Agent in replacement of the Letter of Credit in accordance with the terms and provisions of the Issuing and Paying Agent Agreement.
“Amortization Commencement Date ” means, with respect to any Advance, the one hundred eightieth (180
th) day immediately succeeding the date the related Advance was made. “Amortization End Date” means the earlier to occur of (a) the third (3rd) anniversary of the date the related Advance was made and (b) the date each Advance is required to be paid in full as provided in clause (A), (B) or (C) of Section 2.03(a)(iii) hereof. “Amortization Payment” has the meaning set forth in Section 2.03(a)(iii) hereof. “Amortization Payment Date ” means, with respect to each Advance (i) the related Amortization Commencement Date and the first Business Day of every third calendar month occurring thereafter prior to the related Amortization End Date , and (ii) the related Amortization End Date.
“Amortization Period” means the period commencing on the date the related Advance is made and ending on the date on which the related Advance is payable in full pursuant to the terms of Section 2.03(a)(iii) hereof.
“Authority” has the meaning set forth in the introductory paragraph hereof.
DRAFT--Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.
3 “Authority Resolution” means [Resolution No. ___] , adopted on [September __, 2026] , by the Governing Board of the Authority.
“Authorized Officer ” or “Authorized Officers ” means with respect to the Authority, its Executive Director or its Treasurer, or their authorized designees, or any officer or employee of the Authority authorized to perform specific acts or duties on behalf of the Authority by resolution duly adopted by the governing board of the Authority, a certified copy of which is provided to the Bank and, with respect to the City, its City Manager or its Finance Director, or their authorized designees, or any officer or employee of the City authorized to perform s pecific acts or duties on behalf of the City by resolution adopted by the City Council of the City, a certified copy of which is provided to the Bank.
“Authorized Representative” has the meaning set forth in the Issuing and Paying Agent Agreement.
“Available Amount” has the meaning set forth in the Letter of Credit. “Bank” has the meaning set forth in the introductory paragraph hereof. “Bank Agreement ” means any credit agreement, liquidity agreement, standby bond purchase agreement, reimbursement agreement, revolving credit agreement, direct purchase agreement (such as a continuing covenant agreement or supplemental bondholder’s agreement), or other agreement or instrument (or any amendment, supplement or other modification thereof) under which, directly or indirectly, any Person or Persons undertake(s) (a) to make loans to the City or the Authority that are secured by or payable from Net System Revenues or (b) (i) to make or provide funds to make, payment of, (ii) to purchase or (iii) to provide credit enhancement for bonds, notes or other obligations of the Authority or the City secured by or payable from Net System Revenues.
“Bank Note” means the promissory note made by the Authority to the order of the Bank, evidencing the obligation of the Authority to repay Advances, substantially in the form of Exhibit A attached hereto , with appropriate completions , and any and all renewals , extensions or modifications thereof.
“Bank Note CUSIP Number” means [__________].
“Bank Rate” means, for any day, the rate of interest per annum with respect to an Advance (i) for any day commencing on the date such Advance is made up to and including the ninetieth (90th) day next succeeding the date such Advance is made , equal to the Base Rate from time to time in effect and (ii) for any day commencing on or after the ninety- first (91st) day next succeeding the date such Advance is made, equal to the sum of the Base Rate from time to time in effect plus one percent (1.00%); provided that upon the occurrence and during the continuance of such Event of Default , “Bank Rate” shall mean the Default Rate; provided, however, that in no event shall the Bank Rate be less than the highest per annum interest rate applicable to any Series A Notes that are outstanding.
DRAFT--Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.
4 “Bankruptcy Code” means Title 11 of the United States Code, as amended from time to time, or any successor statute thereto.
“Base Rate” means, for any day, the highest of (i) the Prime Rate in effect on such day plus one percent (1.00%), (ii) the Federal Funds Rate in effect on such day plus two percent (2.00%) and (iii) seven percent (7.00%). Each change in the Base Rate shall take effect simultaneously with the corresponding change or changes in the Prime Rate or Federal Funds Rate, as the case may be. Each determination of the Base Rate by the Bank shall be conclusive and binding on the Authority absent manifest error.
“BHC Act Affiliate ” of a party means an “affiliate” (as such term is defined under, and interpreted in accordance with, 12 U.S.C. 1841(k)) of such party. “Bond Counsel” means Orrick Herrington & Sutcliff LLP, or any other firm of nationally recognized bond counsel.
“Business Day” means any day other than (a) a Saturday or Sunday, (b) a day on which banks located in the State of New York or State of California are required or authorized by law or executive order to be closed, (c) a day on which the New York Stock Exchange is closed, or (d) a day on which the presentation office of the Bank for drawings under the Letter of Credit is authorized or required to close.
“Change in Law” means the occurrence, after the Effective Date, of any of the following:
(a) the adoption or taking effect of any law, including, without limitation Risk- Based Capital Guidelines, (b) any change in any law or in the administration, interpretation, implementation or application thereof by any Governmental Authority or (c) the making or issuance of any request, rule, ruling, guideline, regulation or directive (whether or not having the force of law) by any Governmental Authority; provided that notwithstanding anything herein to the contrary, (i) the Dodd Frank Wall Street Reform and Consumer Protection Act and all requests, rules, rulings, guidelines, regulations or directives thereunder or issued in connection therewith and (ii) all requests, rules, rulings, guidelines, regulations or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States of America or foreign regulatory authorities shall in each case be deemed to be a “Change in Law,” regardless of the date enacted, adopted or issued. “City” has the meaning set forth in the introductory paragraph hereof. “City Resolution” means [Resolution No. ___], adopted on [September __, 2026], by the City Council of the City.
“Code” means the Internal Revenue Code of 1986, as amended, and when reference is made to a particular section thereof, the applicable Treasury Regulations from time to time promulgated or proposed thereunder.
“Confidential Information” means any sensitive or confidential information regarding the Authority, the City, the Bank or any Affiliate of the Bank including, without limitation, address and account information , e- mail addresses, telephone numbers , facsimile numbers , names and signatures of officers, employees and signatories.
DRAFT--Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.
5 “Contract” means any indentures, agreements (other than this Agreement), other contractual restrictions, leases, instruments (other than the Series A Notes), or guaranties to which the City or the Authority is a party related to Material Debt or under which their obligations are payable from or secured by Net System Revenues.
“Covered Entity” means any of the following: (a) a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b); (b) a “covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or (c) a “covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b). “Covered Party” has the meaning set forth in Section 7.18 hereof. “Dealer” means each dealer selected from time to time by the Authority to market the Series A Notes in accordance with the Issuing and Paying Agent Agreement. As of the Effective Date, the Dealers are Barclays Capital Inc., Morgan Stanley & Co. LLC and TD Financial Products LLC.
“Dealer Agreements” means each Dealer Agreement dated as of [October __, 2026], by and between the Authority and the related Dealer and any amendments or supplements thereto, or any other dealer agreement entered into by the Authority and a Dealer with respect to the Series A Notes.
“Debt” of any Person means at any date, without duplication, (i) all obligations of such Person for borrowed money, (ii) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments, (iii) all obligations of such Person to pay the deferred purchase price of property or services, except trade accounts payable arising in the ordinary course of business, (iv) all obligations of such Person under capital leases, (v) all Debt of others Guaranteed, contingently or otherwise, by such Person, (vi) all deferred reimbursement obligations of such Person to reimburse any bank or other Person in respect of amounts paid pursuant to letters of credit, guarantees or other credit instruments, (vii) all Debt of others secured by a Lien on any asset of such Person, if such Debt is assumed by such Person, (viii) all net obligations of such Person to repurchase any security or other property which arise out of or in connection with the sale or such security or other property, (ix) all obligations of such Person in respect of Interest Rate Swap Agreements or similar agreements and arrangements and (x) obligations under Bank Agreements.
“Default” means any condition or event which with the giving of notice or lapse of time or both would, unless cured or waived, become an Event of Default. “Default Rate” means a fluctuating interest rate per annum equal to the sum of the Base Rate from time to time in effect plus four percent (4.00%); provided that in no event shall the Default Rate be less than the highest per annum interest rate applicable to Series A Notes that are outstanding.
“Default Right ” has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable.
DRAFT--Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.
6 “Designated Jurisdiction” means any country or territory to the extent that such country or territory is the subject of any Sanction.
“Drawing” means a drawing under the Letter of Credit to pay the principal of and interest on the Series A Notes on their respective maturity dates. “Effective Date” means [October __, 2026], which, subject to the satisfaction, or waiver by the Bank, of the conditions precedent set forth in Section 3.01 hereof, is the date on which the Letter of Credit shall be issued.
“EMMA” means Electronic Municipal Market Access as provided by the Municipal Securities Rulemaking Board.
“Environmental Law(s)” means any and all federal, state, local and foreign statutes, laws, regulations, ordinances, rules, codes, plans, judgments, orders, decrees, permits, concessions, grants, restrictions, franchises, licenses, policies, binding and enforceable guidelines, agreements or other governmental restrictions (or judicial or administrative interpretations thereof) relating to air, water or land pollution, wetlands or the protection of the environment, public health and safety or to emissions, discharges or releases of Hazardous Materials into the environment, including, without limitation, ambient air, surface water, ground water, or land, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials or the clean up or other remediation thereof. “ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated and rulings issued thereunder. Section references to ERISA herein correspond to sections of ERISA as in effect at the Effective Date and any corresponding future sections of ERISA amendatory thereof, supplemental thereto or substituted therefor.
“Event of Default” has the meaning set forth in Section 6.01 hereof. “Event of Insolvency” means, with respect to any Person, the occurrence of one or more of the following events:
(a) the issuance, under the laws of any state or under the laws of the United States of America, of an order of rehabilitation, liquidation or dissolution of such Person; (b) the commencement by or against such Person of a case or other proceeding seeking liquidation, reorganization or other relief with respect to such Person or its debts under any bankruptcy, insolvency or other similar state or federal law now or hereafter in effect, including, without limitation, the appointment of a trustee, receiver, liquidator, custodian or other similar official for such Person or any substantial part of its property or there shall be appointed or designated with respect to it, an entity such as an organization, board, commission, authority, agency or body to monitor, review, oversee, recommend or declare a financial emergency or similar state of financial distress with respect to it or there shall be declared or introduced or proposed for consideration by it or by any legislative or regulatory body with competent jurisdiction over it, the existence of a state of financial emergency or similar state of financial distress in respect of it;
DRAFT--Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.
7 (c) the making of an assignment for the benefit of creditors by such Person; (d) the inability or failure of such Person to generally pay its debts as they become due;
(e) the declaration of a moratorium with respect to the payment of the debts of such Person;
(f) such Person shall admit in writing its inability to pay its debts when due; (g) such Person is “insolvent” as defined in Section 101(32) of the Bankruptcy Code; or
(h) the initiation of any action in furtherance of or to authorize any of the foregoing by or on behalf of such Person.
“Excess Interest” has the meaning set forth in Section 2.15 hereof. “Excluded Taxes” means, with respect to the Bank, (a) taxes imposed on or measured by its overall net income (however denominated), and franchise taxes imposed on it (in lieu of net income taxes), by the jurisdiction (or any political subdivision thereof) under the laws of which the Bank is organized or in which its principal office is located, and (b) any branch profits taxes imposed by the United States of America.
“Facility Fees” has the meaning set forth in the Fee Agreement. “Federal Funds Rate ” means, for any day, the rate per annum calculated by the Federal Reserve Bank of New York based on such day’s federal funds transactions by depository institutions (as determined in such manner as the Federal Reserve Bank of New York shall set forth on its public website from time to time) and published on the next succeeding Business Day by the Federal Reserve Bank of New York as the federal funds effective rate; provided, that, if the Federal Funds Rate as so determined would be less than zero, such rate shall be deemed to be zero for purposes of this Agreement.
“Fee Agreement” means the Fee Agreement dated as of the Effective Date, between the Authority, the City and the Bank, and all amendments, modifications, restatements and extensions of such agreement, entered into from time to time and any other agreement delivered in substitution or exchange for such agreement.
“Final Drawing Notice” has the meaning set forth in the Letter of Credit. “Fitch” means Fitch Ratings, Inc., and any successor rating agency. “Former Agency” means the former Redevelopment Agency of the City. “Generally Accepted Accounting Principles ” or “GAAP” means generally accepted accounting principles in effect from time to time in the United States and applicable to entities such as the City.
DRAFT--Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.
8 “Governmental Authority” means the government of the United States or any other nation, or of any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra -national bodies such as the European Union or the European Central Bank).
“Guarantee” of any Person means any obligation, contingent or otherwise, of such Person directly or indirectly guaranteeing any Debt of any other Person or in any manner providing for the payment of any Debt of any other Person or otherwise protecting the holder of such Debt against loss (whether by virtue of partnership arrangements, by agreement to keep well, to purchase assets, goods, securities or services, or to take or pay or otherwise); provided that the term “Guarantee” shall not include endorsement of items fo r collection or deposit in the ordinary course of business. The term “Guarantee” used as a verb has a correlative meaning. “Hazardous Materials” means all explosive or radioactive substances or wastes and all hazardous or toxic substances, materials, contaminants, chemicals, wastes or other pollutants, including petroleum or petroleum distillates, asbestos or asbestos containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to any Environmental Law. “Indemnified Taxes” means Taxes other than Excluded Taxes. “Indemnitee” has the meaning set forth in Section 7.03(b) hereof. “Installment Payments” means all installment payments required to be paid by the City under the Installment Purchase Contract.
“Installment Purchase Contract ” means the Subordinate Installment Purchase Contract dated as of [October 1, 2026], between the Authority and the City, as originally executed and as it may from time to time be amended in accordance with its terms. “Interest Rate Swap Agreement ” means an interest rate swap, cap or collar agreement or similar arrangement between any Person and a financial institution providing for the transfer or mitigation of interest rate risks either generally or under specific contingencies. “Issuing and Paying Agent ” means the firm serving as issuing and paying agent for the Series A Notes pursuant to the Issuing and Paying Agent Agreement . As of the Effective Date , the Issuing and Paying Agent is U.S. Bank Trust Company, National Association. “Issuing and Paying Agent Agreement” means the Issuing and Paying Agent Agreement, dated as of [October 1, 2026] , between the Authority and the Issuing and Paying Agent , as amended, supplemented or otherwise modified from time to time. “Joint Powers Agreement” means the Joint Exercise of Powers Agreement dated December 8, 1992, between the City and the Former Agency.
“Kroll” means Kroll Bond Rating Agency, LLC, and its successors and assigns.
DRAFT--Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.
9 “Letter of Credit” means the irrevocable transferable direct -pay letter of credit issued by the Bank for the account of the Authority in favor of the Issuing and Paying Agent supporting the Series A Notes, in substantially the form of Appendix I hereto with appropriate insertions , as it may be amended, modified or restated from time to time. “Liabilities” has the meaning set forth in Section 7.03(b) hereof. “Lien” means any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge, or preference, priority or other security interest or preferential arrangement in the nature of a security interest of any kind or nature whatsoever (including any conditional sale or other title retention agreement, any easement, right of way or other encumbrance on title to real property, and any financing lease having substantially the same economic effect as any of the foregoing).
“Master Resolution” means Resolution No. 80770, a Resolution of the City Council of the City of San José Amending and Restating Resolution No. 78382 Providing for the Allocation of Wastewater System Revenues, the Pledge of Wastewater Net System Revenues and Establishing Covenants to Secure the Payment of Obligations Payable from Wastewater Net System Revenues, adopted on November 15, 2022, as amended from time to time in accordance with its terms. “Material Adverse Change ” means the occurrence of any event or change which in the reasonable discretion of the Bank materially and adversely effects (a) the enforceability of this Agreement or any Related Document to which the Authority or the City is a party, (b) the ability of the Authority or the City to perform its obligations hereunder or thereunder or (c) the rights of or benefits or remedies available to the Bank under this Agreement or the Related Documents to which the Authority or the City is a party.
“Material Adverse Effect” means with respect to the Authority or the City, a material and adverse effect in the reasonable discretion of the Bank upon (a) the enforceability of this Agreement or any Related Document to which the Authority or the City is a party, (b) the ability of the Authority or the City to perform its obligations under this Agreement or any Related Document to which the Authority or the City is a party or (c) the rights of or benefits or remedies available to the Bank under this Agreement or any Related Document to which the Authority or the City is a party.
“Material Debt” means (a) any Debt payable from or secured by a Lien on Net System Revenues on parity with or senior to the Installment Payments and (b) any Debt in the amount of $5,000,000 or more that is payable from or secured by a Lien on Net System Revenues on a priority that is subordinate to the Installment Payments.
“Material Litigation” has the meaning assigned to such term in Section 4.01(e) and 4.02(e). “Maximum Interest Rate” means the maximum rate of interest on the relevant obligation permitted by law.
“Moody’s” means Moody’s Investors Service, Inc., and its successors and assigns.
DRAFT--Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.
10 “Most Favored Nations Provision” means any provision in any Bank Agreement, the obligations under which are to be secured by the Net System Revenues on a parity with or senior to the Installment Payments, that provides for the incorporation by reference of, or provides for the entering into any amendment to incorporate, or provides that a party to such Bank Agreement has the benefit of, different or more restrictive covenants, different or more restrictive events of default, and/or greater rights or remedies than are set forth therein. “Net System Revenues” has the meaning in the Master Resolution. “Non-Issuance Notice” means the written instruction given by the Bank to the Authority and the Issuing and Paying Agent pursuant to Section 2.16 hereof or Section 6.02(b) hereof in the form attached as Exhibit B hereto.
“Obligations” means all debts, liabilities, and obligations of the Authority and the City to pay, charges and expenses under this Agreement and the other Related Documents including, without limitation, the Reimbursement Obligations (which includes amounts owing to the Bank evidenced by the Bank Note), the Facility Fees and all other obligations of the Authority and the City to the Bank arising under this Agreement and the other Related Documents. “Obligor Rating” means the ratings assigned by each Rating Agency to the City of San José Financing Authority Wastewater Revenue Bonds, Series 2022B (Green Bonds – Climate Bond Certified) (without regard to third- party credit enhancement) while such bonds are outstanding and, thereafter, the ratings, if any, assigned by each Rating Agency (without regard to third-party credit enhancement) to at least one issue of unenhanced long-term debt constituting, or secured by obligations constituting, Parity Obligations under the Master Resolution. “OFAC” means the Office of Foreign Assets Control of the United States Department of the Treasury.
“Offering Memorandum” means the Offering Memorandum dated [October __, 2026], for use by the Dealer in connection with the issuance and sale of the Series A Notes, as amended and supplemented from time to time.
“Other Taxes” has the meaning set forth in Section 2.13(a) hereof. “Outstanding” has the meaning set forth in the Issuing and Paying Agent Agreement. “Parity Obligations” has the meaning assigned in the Master Resolution. “Participant” has the meaning set forth in Section 7.05(b) hereof. “Patriot Act” has the meaning specified in Section 7.13 hereof. “Payment Account” means Bank of America, N.A. , Attention: [______________], ABA Number: [___________], Account Number: [__________], Reference: [________], or such other account or office as the Bank may designate in writing from time to time.
DRAFT--Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.
11 “Person” means an individual, limited liability company, a corporation, a partnership, an association, a trust or any other entity or organization, including any Governmental Authority. “Prime Rate” means, as of any day, the rate of interest in effect for such day as publicly announced from time to time by the Bank as its “prime rate.” The Prime Rate is a rate set by the Bank based upon various factors including the Bank’s costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such announced rate.
“Project” means any improvements, additions, and betterments to, and extensions and rehabilitations of, the Wastewater System.
“Property” means any interest in any kind of property or asset , whether real, personal or mixed, or tangible or intangible, whether now owned or hereafter acquired. “QFC” has the meaning assigned to the term “qualified financial contract” in, and shall be interpreted in accordance with, 12 U.S.C. 5390(c)(8)(D). “QFC Credit Support” has the meaning specified in Section 7.18 hereof. “Rating Agencies” means, collectively, S&P, Fitch and Kroll. “Reimbursement Obligations” means any and all obligations of the Authority to reimburse the Bank for principal of and interest on any Drawings under the Letter of Credit and all obligations to repay the Bank for any Advance, including in each instance all interest accrued thereon, which obligations to repay Advances are evidenced and secured by the Bank Note. “Related Documents” means this Agreement, the Letter of Credit, the Fee Agreement, the Issuing and Paying Agent Agreement , the Installment Purchase Contract, the Dealer Agreement, the Bank Note and the Series A Notes, as the same may be amended, modified or supplemented in accordance with their terms and the terms hereof.
“Related Parties ” means, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents, trustees, administrators, managers, advisors and representatives of such Person and of such Person’s Affiliates. “Risk-Based Capital Guidelines” means (a) the risk -based capital guidelines in effect in the United States of America, including transition rules, and (b) the corresponding capital regulations promulgated by regulatory authorities outside the United States of America including transition rules, and any amendment to such regulations. “S&P” means Standard & Poor’s Ratings Services, a Standard & Poor’s Financial Services LLC business, and any successor rating agency.
“Sanction(s)” means any sanction administered or enforced by the United States Government (including, without limitation, OFAC) or other relevant sanctions authority with jurisdiction over the City or the Authority, as applicable.
DRAFT--Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.
12 “Series A Notes” means, collectively, the Series A-1 Notes and the Series A-2 Notes. “Series A-1 Notes” means the C ity of San José Financing Authority Subordinate Wastewater Revenue Commercial Paper Notes, Series A-1.
“Series A-2 Notes” means the City of San José Financing Authority Subordinate Wastewater Revenue Commercial Paper Notes, Series A-2 (Federally Taxable). “State” means the State of California.
“Stated Amount” has the meaning set forth in the Letter of Credit. “Stated Expiration Date” has the meaning set forth in the Letter of Credit as the same may be extended from time to time in accordance with the terms of the Letter of Credit. “Subordinate Obligations” has the meaning assigned in the Master Resolution. “Supported QFC” has the meaning specified in Section 7.18 hereof. “System Revenues” has the meaning assigned in the Master Resolution. “Taxes” has the meaning set forth in Section 2.13(a) hereof. “Termination Date” has the meaning set forth in the Letter of Credit. “U.S. Special Resolution Regimes” has the meaning specified in Section 7.18 hereof. “Wastewater System” has the meaning assigned in the Master Resolution. “Wastewater Treatment System Fund” has the meaning assigned in the Master Resolution.
Section 1.02. Other Interpretive Provisions. With reference to this Agreement and each other Related Document, unless otherwise specified herein or in such other Related Document:
(a) The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “ without limitation.” The word “will” shall be construed to have the same meaning and effect as the word “ shall.” Unless the context requires otherwise, (i) any definition of or reference to any agreement, instrument or other document shall be construed as referring to such agreement, instrument or other document as from time to time amended , supplemented or otherwise modified (subject to any restrictions on such amendments , supplements or modifications set forth herein or in any other Related Document), (ii) any reference herein to any Person shall be construed to include such Person’ s successors and assigns, (iii) the words “ hereto,” “herein,” “hereof’ and “hereunder,” and words of similar import when used in any Related Document, shall be construed to refer to such Related Document in its entirety and not to any particular provision thereof , (iv) all references in a Related Document to Articles ,
DRAFT--Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.
13 Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of , and Exhibits and Schedules to, the Related Document in which such references appear, and (v) the words “ asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties , including cash, securities, accounts and contract rights.
(b) In the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including;” the words “to” and “until” each mean “to but excluding;” and the word “through” means “to and including.” (c) Section headings herein and in the other Related Documents are included for convenience of reference only and shall not affect the interpretation of this Agreement or any other Related Document.
Section 1.03. Accounting Terms. All accounting terms not specifically or completely defined herein shall be construed in conformity with, and all financial data (including financial ratios and other financial calculations) required to be submitted pursuant to this Agreement shall be prepared in conformity with, GAAP applied on a consistent basis, as in effect from time to time, applied in a manner consistent with that used in preparing the audited f inancial statements of the City referred to in Section 5.02(a)(i) hereof, except as otherwise specifically prescribed herein.
Section 1.04. Times of Day. All references in this Agreement to times of day shall be references to the prevailing time in the Pacific time zone (either standard or daylight savings) unless otherwise expressly provided herein.
ARTICLE II
LETTER
OF CREDIT
Section 2.01. Issuance of Letter of Credit. Upon the terms, subject to the conditions and relying upon the representations and warranties set forth in this Agreement or incorporated herein by reference, the Bank agrees to issue the Letter of Credit . The Letter of Credit shall be in the original stated amount of $217,753,425 (calculated as the sum of the maximum principal amount of the Series A Notes supported by the Letter of Credit (i .e., $200,000,000) plus interest thereon at a maximum rate of twelve percent (12%) per annum for a period of two hundred seventy days (270) days calculated on the basis of a year consisting of 365 days and actual number of days elapsed).
Section 2.02. Letter of Credit Drawings. The Issuing and Paying Agent is authorized to make Drawings under the Letter of Credit in accordance with its terms . The Authority hereby irrevocably approves reductions and reinstatements of the Available Amount with respect to the Letter of Credit as provided in the Letter of Credit.
Section 2.03. Reimbursement of Certain Drawings under the Letter of Credit ; Mandatory Prepayment; Interest. (a) (i) If the conditions precedent contained in Section 3.02 hereof are satisfied at the time of payment by the Bank of any Drawing , such Drawing shall constitute an advance (“Advance” ) to the Authority. The Authority’s Obligations to repay each
DRAFT--Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.
14 Advance and to pay interest thereon, as hereinafter provided, shall be evidenced and secured by the Bank Note.
(ii) The Authority promises to pay to the Bank the interest portion of each Advance on date of the related Drawing.
(iii) The Authority promises to pay or cause to be paid to the Bank the principal portion of each Advance on the earliest to occur of (A) the date on which an Alternate Letter of Credit becomes effective in substitution of the Letter of Credit with respect to the Series A Notes, (B) the date on which the Stated Amount is permanently reduced to zero or the Letter of Credit is otherwise terminated in accordance with its terms (other than as a result of the Letter of Credit terminating on the Stated Expiration Date), including as a result of the occurrence of an Event of Default , (C ) the end of the Authority’ s authority to issue Series A Notes as determined in accordance with the Issuing and Paying Agent Agreement or any resolution of the Authority or the City and (D) the related Amortization Commencement Date subject to the following sentence . Unless paid in full on a date provided above , and so long as (x) the representations and warranties of the Authority and the City set forth in this Agreement are true and correct in all material respects and (y) no Default or Event of Default shall have occurred and be continuing, in each case as of the Amortization Commencement Date, the principal portion of each Advance shall be payable by the Authority in equal installments on each Amortization Payment Date (each such payment an “Amortization Payment”) with the final installment in an amount equal to the entire then outstanding principal amount of such Advance due and payable on the Amortization End Date (the period commencing on the date such Advance is made and ending on the Amortization End Date is referred to as the “Amortization Period”). Each Amortization Payment shall be that amount of principal which will result in equal (as nearly as possible) Amortization Payments over the applicable Amortization Period. (iv) Subject to Section 2 .10 hereof, the Authority also promises to pay to the Bank interest on the unpaid amount of each Advance from the date such Advance is made until it is paid in full as provided herein, at a rate per annum equal to the Bank Rate from time to time in effect , and such interest shall be payable monthly in arrears on the first Business Day of each month (commencing on the first such date to occur after the making of the related Advance) and on the date that the final principal or interest installment of such Advance is payable as herein provided.
(b) Any Advance may be prepaid in whole or in part on the day such Advance is made. Any Advance created pursuant to paragraph (a)(i) above may be prepaid in whole or in part without premium or penalty on any Business Day upon two (2) Business Days’ prior written notice to the Bank.
(c) Upon the Bank’s receipt of any payment or prepayment of principal of any Advance, the amount of such Advance shall be reduced by the amount of such payment or prepayment.
DRAFT--Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.
15 (d) All Reimbursement Obligations shall be made against and evidenced by the Bank Note. All Reimbursement Obligations due and owing to the Bank and all payments and prepayments on the account of the principal of and interest on each Reimbursement Obligation by or on behalf of the Authority shall be recorded by the Bank on its books and records, which books and records shall, absent manifest error, be conclusive as to amounts due and owing by the Authority hereunder as evidenced by the Bank Note. The Authority shall pay principal and interest on the Bank Note on the dates and at the rates provided for in Sections 2.03 and 2.04 hereof. The Authority’s obligations to repay each Advance and to pay interest thereon as provided herein shall be evidenced and secured by the Bank Note, and the Authority shall pay amounts under the Bank Note on each date on which the Authority is required to make a principal payment on an Advance in an amount equal to the Advance payment due on such date.
Section 2.04. Reimbursement of Drawings Other Than Drawings Creating Advances Under the Letter of Credit . Unless the conditions precedent contained in Section 3. 02 hereof are satisfied on the date of payment by the Bank of a Drawing, the Authority agrees to reimburse the Bank for the full amount of such Drawing immediately upon payment by the Bank of such Drawing on date of such Drawing . If the Authority does not make such reimbursement to the Bank with respect to such Drawing on such date , such Reimbursement Obligation shall bear interest at the Default Rate and be payable upon demand.
Section 2.05. Fees. The Authority and the City hereby agree to perform the obligations provided for in the Fee Agreement, including, without limitation, the payment of the Facility Fees and all other fees, expenses and other amounts provided for therein, at the times and in the amounts set forth in the Fee Agreement . The terms and provisions of the Fee Agreement are hereby incorporated herein by reference as if fully set forth herein . All references to amounts or obligations due hereunder or in any other document shall be deemed to include all amounts and obligations (including without limitation fees and expenses) under the Fee Agreement . All fees paid under this Agreement and the Fee Agreement shall be fully earned when due and nonrefundable when paid.
Section 2.06. Method of Payment; Etc. All payments to be made by the Authority under this Agreement shall be made to the applicable Payment Account not later than 4: 00 p.m., on the date when due and shall be made in lawful money of the United States of America in freely transferable and immediately available funds . All payments received after 4: 00 p .m. shall be deemed to have been made on the next succeeding Business Day and any applicable interest or fees shall continue to accrue to the date on which such payment is made.
Section 2.07. Termination of Letter of Credit by the Authority. Notwithstanding any provisions of this Agreement , the Letter of Credit or any Related Document to the contrary , the Authority agrees not to terminate the Letter of Credit unless such termination is made in accordance with the Fee Agreement . The Authority agrees that it will provide thirty (30) days prior written notice in connection with any termination of the Letter of Credit and pay to the Bank, in connection with any termination of the Letter of Credit pursuant to the terms hereof , all fees, expenses and other Obligations payable hereunder, including, without limitation, all principal and accrued interest owing on any Advances and the related Bank Note . All payments from the
DRAFT--Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.
16 Authority to the Bank referred to in this Section 2. 07 shall be made with immediately available funds.
Section 2.08. Computation of Interest and Fees . All computations of (a) interest payable by the Authority under this Agreement shall be calculated on the basis of a year consisting of 365/366 days and actual number of days elapsed, and (b) fees payable by the Authority under this Agreement shall be made on the basis of a year of three hundred sixty (360) days and the actual number of days elapsed . Interest shall accrue during each period during which interest is computed from and including the first day thereof to but excluding the last day thereof.
Section 2.09. Payment Due on Non-Business Day to Be Made on Next Business Day.
If any sum becomes payable pursuant to this Agreement on a day which is not a Business Day, the date for payment thereof shall be extended, without penalty, to the next succeeding Business Day, and such extended time shall be included in the computation of interest and fees.
Section 2.10. Default Rate. If the principal amount of any Obligation is not paid when due, such Obligation shall bear interest until paid in full at a rate per annum equal to the Default Rate, payable on demand. Upon the occurrence and during the continuance of an Event of Default, the Obligations of the Authority hereunder shall bear interest at the Default Rate, which shall be payable by the Authority upon demand therefore.
Section 2.11. Source of Funds. All payments made by the Bank pursuant to the Letter of Credit shall be made from funds of the Bank and not from the funds of any other Person.
Section 2.12. Extension of Stated Expiration Date . If the Authority and the City , on any date not earlier than one hundred twenty (120) days and not later than ninety (90) days prior to the Stated Expiration Date, submits to the Bank a written request for an extension of the Stated Expiration Date for a period as specified in such written request , the Bank will make reasonable efforts to respond to such request within forty -five (45) days after receipt of all information necessary, in the Bank’ s reasonable judgment , to permit the Bank to make an informed credit decision. In the event the Bank fails to definitively respond to such request within such period of time, the Bank shall be deemed to have refused to grant the extension requested. The Bank may, in its sole and absolute discretion, decide to accept or reject any such proposed extension, and no extension shall become effective unless the Bank shall have consented thereto in writing . The consent of the Bank, if granted, shall be conditioned upon the preparation, execution and delivery of documentation in form and substance reasonably satisfactory to the Bank and consistent with this Agreement and the Letter of Credit . If such an extension request is accepted by the Bank in its absolute discretion , the then current Stated Expiration Date for the Letter of Credit shall be extended to the date agreed to by the Authority, the City and the Bank.
Section 2.13. Net of Taxes , Etc. (a) Taxes. Any and all payments to the Bank by the Authority hereunder shall be made free and clear of and without deduction for any and all taxes, levies, imposts, deductions, charges, withholdings or liabilities imposed thereon, excluding, however, Excluded Taxes (all such non excluded taxes, levies, imposts, deductions, charges, withholdings and liabilities being hereinafter referred to as “ Taxes”). If the Authority shall be required by law to withhold or deduct any Taxes imposed by the United States or any political subdivision thereof from or in respect of any sum payable hereunder to the Bank, (i) the sum
DRAFT--Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.
17 payable shall be increased as may be necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section 2.13), the Bank receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Authority shall make such deductions and (iii) the Authority shall pay the full amount deducted to the relevant taxation authority or other authority in accordance with applicable law.
If the Authority shall make any payment under this Section 2.13 to or for the benefit of the Bank with respect to Taxes and if the Bank shall claim any credit or deduction for such Taxes against any other taxes payable by the Bank to any taxing jurisdiction in the United States then the Bank shall pay to the Authority an amount equal to the amount by which such other taxes are actually reduced; provided, that the aggregate amount payable by the Bank pursuant to this sentence shall not exceed the aggregate amount previously paid by the Authority with respect to such Taxes. In addition, the Authority agrees to pay any present or future stamp, recording or documentary taxes and any other excise or property taxes, charges or similar levies that arise under the laws of the United States of America or the States of New York or California from any payment made hereunder or from the execution or delivery or otherwise with respect to this Agreement (hereinafter referred to as “ Other Taxes”). The Bank shall provide to the Authority within a reasonable time a copy of any written notification it receives with respect to Taxes or Other Taxes owing by the Authority to the Bank hereunder; provided, that the Bank’s failure to send such notice shall not relieve the Authority of its obligation to pay such amounts hereunder. (b) Reimbursement. The Authority shall, to the fullest extent permitted by law and subject to the provisions hereof, reimburse the Bank for the full amount of Taxes and Other Taxes including any Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this Section 2.13 paid by the Bank or any liability (including penalties, interest and expenses) arising therefrom or with respect thereto, whether or not such Taxes or Other Taxes were correctly or legally asserted; provided, that the Authority shall not be obligated to reimburse the Bank for any penalties, interest or expenses relating to Taxes or Other Taxes arising from the Bank’s gross negligence or willful misconduct. The Bank agrees to give notice to the Authority of the assertion of any claim against the Bank relating to such Taxes or Other Taxes as promptly as is practicable after being notified of such assertion; provided, that the Bank’s failure to notify the Authority promptly of such assertion shall not relieve the Authority of its obligation under this Section 2.13. Payments by the Authority pursuant to this reimbursement obligation shall be made within thirty (30) days from the date the Bank makes written demand therefor, which demand shall be accompanied by a certificate describing in reasonable detail the basis thereof. The Bank agrees to repay to the Authority any refund (including that portion of any interest that was included as part of such refund) with respect to Taxes or Other Taxes paid by the Authority pursuant to this Section 2.13 received by the Bank for Taxes or Other Taxes that were paid by the Authority pursuant to this Section 2.13 and to contest, with the cooperation and at the expense of the Authority, any such Taxes or Other Taxes which the Bank or the Authority reasonably believes not to have been properly assessed. (c) Notice. Within thirty (30) days after the date of any payment of Taxes by the Authority, the Authority shall furnish to the Bank the original or a certified copy of a receipt evidencing payment thereof.
DRAFT--Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.
18 (d) Survival. All of the Authority’ s and the Bank’ s obligations under this Section 2.13 shall survive termination of this Agreement, the cancellation of the Letter of Credit and the repayment, satisfaction or discharge of all other Obligations.
Section 2.14. Increased Costs.
(a) Increased Costs Generally. If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, liquidity ratio, special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or advances, loans or other credit extended or participated in by, the Bank;
(ii) subject the Bank to any Taxes of any kind whatsoever with respect to this Agreement or the Letter of Credit, or change the basis of taxation of payments to the Bank in respect thereof (except for indemnified Taxes covered by Section 2.13 and the imposition of, or any change in the rate of, any Excluded Taxes payable by the Bank); or
(iii) impose on the Bank any other condition, cost or expense affecting this Agreement or the Letter of Credit;
and the result of any of the foregoing shall be to increase the cost to the Bank of maintaining this Agreement or issuing or maintaining the Letter of Credit, or to reduce the amount of any sum received or receivable by the Bank hereunder (whether of princ ipal, interest or any other amount) then, upon written request of the Bank as set forth in subsection (c) below, the Authority shall promptly pay to the Bank such additional amount or amounts as will compensate the Bank for such additional costs incurred or reduction suffered.
(b) Capital Requirements . If the Bank determines that any Change in Law affecting the Bank or the Bank’s parent or holding company, if any, regarding capital requirements, has or would have the effect of reducing the rate of return on the Bank’s capital or the capital of the Bank’s parent or holding company, if any, as a consequence of this Agreement, or for maintaining the Letter of Credit, to a level below that which the Bank or the Bank’s parent or holding company could have achieved but for such Change in Law (taking into consideration the Bank’s policies and the policies of the Bank’s parent or holding company with respect to capital adequacy), then from time to time upon written request of the Bank as set forth in subsection (c) below, the Authority shall promptly pay to the Bank such additional amount or amounts as will compensate the Bank or the Bank’s parent or holding company for any such reduction suffered. (c) Certificates for Reimbursement. A certificate of the Bank setting forth the amount or amounts necessary to compensate the Bank or the Bank’s parent or holding company as specified in subsection (a) or (b) above and delivered to the Authority, shall be conclusive absent manifest error. The Authority shall pay the Bank the amount shown as due on any such certificate within forty-five (45) days after receipt thereof.
DRAFT--Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.
19 (d) Delay in Requests . Failure or delay on the part of the Bank to demand compensation pursuant to this Section shall not constitute a waiver of the Bank’s right to demand such compensation; provided that the Authority shall not be required to compensate the Bank pursuant to this Section for any increased costs incurred or reductions suffered more than six (6) months prior to the date that the Bank notifies the Authority of the Change in Law giving rise to such increased costs or reductions, and of the Bank’s intention to claim c ompensation therefor (except that if the Change in Law giving rise to such increased costs or reductions is retroactive, then the six (6) month period referred to above shall be extended to include the period of retroactive effect thereof). (e) Survival. All of the Authority’ s and the Bank’ s obligations under this Section shall survive termination of this Agreement, the cancellation of the Letter of Credit and the repayment, satisfaction or discharge of all other Obligations.
Section 2.15. Maximum Interest Rate. In no event shall the rate of interest payable by the Authority on any Obligation incurred hereunder exceed the Maximum Interest Rate . To the extent provided by law, if the rate of interest payable hereunder shall exceed the Maximum Interest Rate for any period for which interest is payable , then (a) interest at the Maximum Interest Rate shall be due and payable with respect to such interest period and (b) interest at the rate equal to the difference between (i) the rate of interest calculated in accordance with the terms is hereof and (ii) the Maximum Interest Rate (the “Excess Interest”) shall be deferred until such date as the rate of interest calculated in accordance with the terms hereof ceases to exceed the Maximum Interest Rate, at which time the Authority shall pay to the Bank, with respect to amounts then payable to the Bank that are required to accrue interest hereunder, such portion of the deferred Excess Interest as will cause the rate of interest then paid to the Bank to equal the Maximum Interest Rate, which payments of deferred Excess Interest shall continue to apply to such unpaid amounts hereunder until all deferred Excess Interest is fully paid to the Bank . Upon the termination of the Letter of Credit and this Agreement , in consideration for the limitation of the rate of interest otherwise payable hereunder, the Authority shall pay to the Bank a fee equal to the amount of all unpaid deferred Excess Interest.
Section 2.16. Issuance Generally. The Authority will permit Series A Notes to be issued, and authorize the Issuing and Paying Agent to issue Series A Notes, only in accordance with the terms of the Issuing and Paying Agent Agreement and this Reimbursement Agreement . The Authority shall not issue Series A Notes if: (a) a Default or an Event of Default shall have occurred and be continuing or would occur upon issuance of the Series A Notes; (b) the representations and warranties of the Authority and the City set forth in Article IV hereof shall no longer be true and correct in any material respect ; (c) a Non -Issuance Notice has been issued ; (d) the Issuing and Paying Agent is in receipt of the Final Drawing Notice in substantially the form attached to the Letter of Credit as Annex H , or (e) the maturity date of any such Series A Notes is later than the Business Day immediately preceding the Stated Expiration Date . The Bank may deliver a Non - Issuance Notice at any time when: (x) an Event of Default shall have occurred and be continuing; or (y) the representations and warranties of the Authority and the City set forth in Article IV hereof shall no longer be true and correct in any material respect . The Bank may deliver the Final Drawing Notice at any time when an Event of Default shall have occurred and be continuing. A Non-Issuance Notice or the Final Drawing Notice shall be effective when received by the Issuing and Paying Agent ; provided, however, that a Non -Issuance Notice or the Final Drawing Notice
DRAFT--Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.
20 received by the Issuing and Paying Agent at or after 9:30 a.m. (New York City time) , on any day on which Series A Notes are being issued shall be effective on the next succeeding day. A Non- Issuance Notice or the Final Drawing Notice may be given by electronic mail transmission , confirmed in writing within twenty -four (24) hours , but the failure to so confirm such Non - Issuance Notice or the Final Drawing Notice in writing shall not render such Non-Issuance Notice or the Final Drawing Notice ineffective. The Bank will furnish a copy of any Non-Issuance Notice or the Final Drawing Notice to the Authority and the Dealer promptly following delivery thereof to the Issuing and Paying Agent, but the failure to furnish any such copy shall not render ineffective such Non-Issuance Notice or the Final Drawing Notice.
ARTICLE III
CONDITIONS PRECEDENT
Section 3.01. Conditions Precedent to Issuance of the Letter of Credit. As conditions precedent to the obligation of the Bank to issue the Letter of Credit:
(a) The Bank shall have received on or before the Effective Date the following, each in form and substance satisfactory to the Bank and its counsel and, unless otherwise indicated, dated the Effective Date:
(i) certified copies of all resolutions of the Authority and the City which authorize the execution, delivery or performance of this Agreement or any of the Related Documents;
(ii) a certified copy of the Master Resolution, including all amendments and supplements thereto, certified by the City Clerk as being true and complete copies and that the Master Resolution has not been amended, repealed or rescinded, and is in full force and effect on the Effective Date;
(iii) copies of the Joint Powers Agreement and the bylaws of the Authority, certified to be in full force and effect as of the Effective Date by the Secretary of the Authority;
(iv) a counterpart of this Agreement and the Fee Agreement, duly executed by the Authority, the City and the Bank;
(v) a duly executed original of the Bank Note, in substantially the form of Exhibit A hereto
(vi) executed or certified copies of the Issuing and Paying Agent Agreement, the Installment Purchase Contract and the Dealer Agreements; (vii) a certificate of the Secretary or an Assistant Secretary of the Authority certifying the names and specimen signatures of each Authorized Officer of the Authority and a certificate of the Clerk or Deputy Clerk of the City certifying the names and specimen signatures of each Authorized Officer of the City;
DRAFT--Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.
21 (viii) a certificate of an Authorized Representative, certifying that all conditions precedent set forth in the Issuing and Paying Agent Agreement with respect to issuance of the Series A Notes being issued on the Effective Date shall have been satisfied;
(ix) certificates, dated the Effective Date, of an Authorized Officer of the Authority and of the City to the effect that, on and as of the Effective Date (A ) after giving effect to the execution and delivery of this Agreement and the other Related Documents, each of the representations and warranties of the Authority and the City contained in this Agreement is true and correct on and as of the Effective Date as though made on and as of such date, (B) no Default or Event of Default has occurred and is continuing or would result from the execution and delivery of this Agreement and the other Related Documents, (C) except as disclosed in writing by the Authority and the City to the Bank, there is no existing litigation in which a final adverse determination would result in a Material Adverse Change or in a material adverse change in the business, assets, liabilitie s, condition (financial or otherwise), operations or prospects of the Authority or the City related to the Wastewater System, ( D) except as disclosed in writing by the Authority and the City to the Bank, there has been no material adverse change in the Authority’s or the City’s business, assets, liabilities, condition (financial or otherwise), operations or prospects related to the Wastewater System since June 30, 202 5, and ( E) the certificate delivered under this Section 3.01(a)(ix) shall be deemed a representation and warranty by the Authority and the City that the conditions precedent to the execution and delivery of this Agreement and the other Related Documents, unless otherwise waived in accordance herewith, shall have been satisfied; (x) an executed opinion of the City Attorney, counsel for the Authority, dated the Effective Date and addressed to the Bank and an executed opinion of the City Attorney, counsel for the City, dated the Effective Date and addressed to the Bank;
(xi) an opinion of Bond Counsel, addressed to the Authority, together with a reliance letter addressed to the Bank, in each case in form and substance satisfactory to the Bank and its counsel;
(xii) evidence that the Series A Notes have been rated “P-1” by Moody’s and “A-1” by S&P; and
(xiii) evidence that (i) a CUSIP number has been obtained for the Bank Note and (ii) the Bank Note (and its related CUSIP Number) has been assigned a long-term rating of at least “BBB-” or “BBB-,” respectively, from Fitch or S&P. (b) The effectiveness of this Agreement, the issuance of the Letter of Credit and the making of Drawing and the consummation of the other transactions contemplated by this Agreement and the Issuing and Payment Agreement shall not contravene any law, rule or regulation applicable to the Authority, the City or the Bank or any request, guideline or
DRAFT--Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.
22 directive (or the interpretation or administration of any of the foregoing) of any Governmental Authority with jurisdiction over either the Authority, the City or the Bank. (c) On or prior to the Effective Date , the Bank shall have received reimbursement of the Bank’ s reasonable fees and expenses (including the legal fees and expenses of Kutak Rock LLP) and any other fees incurred in connection with the transaction contemplated by the Related Documents invoiced prior the Effective Date. (d) All legal requirements provided herein incident to the execution, delivery and performance of the Related Documents , and the transactions contemplated thereby , shall be reasonably satisfactory to the Bank and its counsel.
Section 3.02. Conditions Precedent to Advances. Following any payment by the Bank under the Letter of Credit pursuant to a Drawing, an Advance shall be made to the Authority only if on the date of payment of such Drawing by the Bank: (a) the representations and warranties contained in Article IV of this Agreement are true and correct in all material respects as of such date; and (b) no event has occurred and is continuing, or would result from such payment, which constitutes a Default or Event of Default.
ARTICLE IV
REPRESENTATIONS
AND WARRANTIES
Section 4.01. Representations and Warranties of the Authority . To induce the Bank to enter into this Agreement and to issue the Letter of Credit, the Authority hereby represents and warrants, and agrees with, the Bank as follows (which representations, warranties and agreements shall survive the execution and delivery of this Agreement and the issuance of the Letter of Credit):
(a) Organization and Powers. The Authority (i) is a joint exercise of powers authority duly formed and existing under the Joint Powers Agreement and the Act, (ii) has all powers and all material governmental licenses, authorizations, consents and approvals required to carry on its business as now conducted, (iii) has all required power and authority to execute, deliver and perform its obligations under this Agreement and the Related Documents to which it is a party and (iv) is licensed or qualified to do business in each jurisdiction where the ownership of property or the conduct of its business requires such qualifications.
(b) Authorization; Contravention. The adoption, execution, delivery and performance by the Authority of the Related Documents to which it is a party and the making of the borrowings hereunder are within the Authority’s power and authority, have been duly authorized by all necessary acti on by the Authority and do not contravene, or result in the violation of or constitute a default under, any provision of the Constitution of the State or any applicable law or regulation, or any order, rule or regulation of any court, governmental agency or instrumentality or any agreement, resolution or instrument to which the Authority is a party or by which it or any of its property is bound. (c) Governmental Consent or Approval. No authorization, consent, approval, permit, license, exemption of or filing or registration with, any court or governmental
DRAFT--Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.
23 department, commission, board, bureau, agency or instrumentality is or will be necessary for the valid execution, delivery or performance by the Authority of the Related Documents to which it is a party except such consents, authorizations, orders and approvals (copies of which have been furnished to the Bank) as have been obtained, were validly issued and are in full force and effect.
(d) Binding Effect. The Bank Note has been or will be duly executed by the Authority and delivered in accordance with this Agreement and the Related Documents.
Each of the Related Documents to which the Authority is a party has been duly executed and delivered by or on behalf of the Authority. Each of the Related Documents to which the Authority is a party constitute valid and binding obligations of the Authority enforceable in accordance with their respective terms, except as such enforceability may be limited to (i) bankruptcy, insolvency, reorganization, or similar laws affecting creditors’ rights generally, (ii) general principles of equity, (iii) the exercise of judicial discretion in appropriate cases, and (iv) the limitations on legal remedies against joint powers authorities in the State.
(e) Litigation. Except as disclosed in writing by the Authority to the Bank, there are no actions, suits or proceedings pending with service of process accomplished or, to the best of the knowledge of the Authority’s Treasurer, threatened in writing against or affecting the Authority, or relating to the Related Documents or the Authority Resolution in any court or before or by any governmental department, agency or instrumentality in which there is a reasonable possibility of any adverse decision which could have a Material Adverse Effect (together with the litigation described in Section 4.02(e), “ Material Litigation”).
(f) Compliance; No Default . No “event of default” specified in any of the Related Documents to which the Authority is a party and no event which, with the giving of notice or lapse of time or both would become such an event of default, has occurred and is continuing.
(g) Immunity. The Authority cannot assert sovereign immunity as a defense to the enforcement of its obligations hereunder or under any of the Related Documents to which it is a party.
(h) Security for the Obligations . To secure the obligations of the Authority hereunder, the Authority has, pursuant to Section 1.05 of the Issuing and Paying Agent Agreement, granted a first priority perfected security interest in the Installment Payments and all other amounts held by the Issuing and Paying Agent under the Issuing and Paying Agent Agreement, subject to the provisions of the Issuing and Paying Agent Agreement permitting the application thereof for the purposes and on the terms and conditions set forth in the Issuing and Paying Agent Agreement.
(i) Information. All information supplied and statements and representations made to the Bank by an authorized Person on behalf of the Authority in any financial, credit or accounting statement, application for credit or other statement or document furnished to the Bank in connection with this Agreement, whether prior to, contemporaneously with or
DRAFT--Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.
24 subsequent to the execution hereof, and any certificate, document, schedule or other writing furnished to the Bank pursuant to this Agreement or in response to a request made by the Bank pursuant to this Agreement, are and will be, when furnished in all ma terial respects true, complete, correct, valid, genuine and what they purport or are represented to be. (j) Incorporation of Representations and Warranties by Reference . The Authority hereby makes to the Bank the same representations and warranties made by the Authority in each Related Document to which it is a party, which representations and warranties, as well as the related defined terms contained therein, are hereb y incorporated by reference for the benefit of the Bank with the same effect as if each and every such representation and warranty and defined term were set forth herein in its entirety. No amendment to such representations and warranties or defined terms made pursuant to any Related Document shall be effective to amend such representations and warranties and defined terms as incorporated by reference herein without the prior written consent of the Bank.
(k) Regulation U. The Authority is not entering into this Agreement and the transactions contemplated hereby for the purpose of purchasing or carrying margin stock as defined in Regulation U of the Board of Governors of the Federal Reserve System. (l) Usury. Assuming that the Bank is an exempted class of persons within the meaning of Article 15 of the California Constitution, the terms of this Agreement and the Related Documents regarding the calculation and payment of interest and fees do not violate any applicable usury laws of the State.
(m) No Proposed Legal Changes. Except as previously disclosed in writing to the Bank, to the knowledge of the Authority’s Treasurer since the Effective Date no amendment to the Constitution of the State or any published administrative interpretation of the Constitution of the State and no law has been enacted and no final and non- appealable judicial decision interpreting any of the foregoing, the effect of which could reasonably be expected to have a Material Adverse Effect. (n) Sanctions Concerns and Anti-Corruption Laws.
(i) Sanctions Concerns. To the current actual knowledge of the Treasurer of the Authority, the Authority is not (A) currently the subject or target of any Sanctions, (B) included on OFAC’s List of Specially Designated Nationals or (C) located, organized or resident in a Designated Jurisdiction. To the current actual knowledge of the Treasurer of the Authority, the Authority has conducted its business in compliance with all applicable Sanctions and has instituted and maintained policies and procedures designed to promote and achie ve compliance with such Sanctions.
(ii) Anti-Corruption Laws . To the current actual knowledge of the Treasurer of the Authority, the Authority has conducted its business in compliance in all material respects with the United States Foreign Corrupt Practices Act of 1977 and other applicable anti -corruption legislation in any other jurisdiction in which
DRAFT--Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.
25 the Authority is located or doing business and to which the Authority is subject in such jurisdiction, in each case as and to the extent applicable to the Authority, and has instituted and maintained policies and procedures designed to promote and achieve compliance with such laws.
(o) Compliance with Applicable Law . The Authority is in compliance in all material respects with the requirements of all applicable law, including all governmental approvals, except in such instances in which (i) such requirement of applicable law is being contested in good faith by appropriate proceedings diligently conducted by or on behalf of the Authority or (ii) the failure to comply therewith could not reasonably be expected to have a Material Adverse Effect.
(p) Employee Benefit Plans. The Authority does not maintain or contribute to, and has not maintained or contributed to, an employee pension benefit plan that is subject to Title IV of ERISA.
(q) Issuance of Series A Notes. Each issuance of Series A Notes by the Authority shall be deemed a representation by the Authority that (i) the Authority has complied in all material respects with all applicable terms and provisions of this Agreement, (ii) on such date, and after giving effect to the issuance of such Series A Notes and the application of the proceeds thereof, no Default or Event of Default has occurred or is continuing, (iii) the representations and warranties of the Authority contained in this Agreement are true and correct in all material respects on and as of the date of issuance of such Series A Notes as though made on and as of such date, and (iv) after giving effect to the issuance of such Series A Notes and the application of the proceeds thereof, the aggregate amount of Series A Notes Outstanding, together with accrued interest thereon to maturity, will not exceed the Available Amount.
(r) Tax-Exempt Status. The Authority has not taken any action or omitted to take any action, and knows of no action taken or omitted to be taken by any other Person, which action, if taken or omitted , would adversely affect the exclusion of interest on the Series A-1 Notes from gross income for federal income tax purposes. (s) Issuing and Paying Agent; Dealer. U.S. Bank Trust Company, National Association (or a successor or assign approved in writing by the Bank, provided that written approval shall not be required in circumstances of succession or assignment due to merger, consolidation or other similar action) is the duly appointed and acting Issuing and Paying Agent, and Barclays Capital Inc., Morgan Stanley & Co. LLC and TD Financial Products LLC (or a successor or assign approved in writing by the Bank, provided that written approval shall not be required in circumstances of succession or assignment due to merger, consolidation or other similar action) are the duly appointed and acting Dealers.
Section 4.02. Representations and Warranties of the City. To induce the Bank to enter into this Agreement and to issue the Letter of Credit, the City hereby represents and warrants, and agrees with, the Bank as follows (which representations, warranties and agreements shall survive the execution and delivery of this Agreement and the issuance of the Letter of Credit):
DRAFT--Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.
26 (a) Organization and Powers. The City (i) is a charter city duly organized and existing under the Constitution and laws of the State, ( ii) has all powers and all material governmental licenses, authorizations, consents and approvals required to carry on its business as now conducted, ( iii) has all required power and authority to execute, deliver and perform its obligations under this Agreement and the Related Documents to which it is a party and ( iv) is licensed or qualified to do business in each jurisdiction where the ownership of property or the conduct of its business requires such qualifications. (b) Authorization; Contravention. The adoption, execution, delivery and performance by the City of the Related Documents to which it is a party are within the City’s power and authority, have been duly authorized by all necessary action by the City and do not contravene, or result in the violation of or constitute a default under, any provision of the Constitution of the State or any applicable law or regulation, or any order, rule or regulation of any court, governmental agency or instrumentality or any agreement, resolution or instrument to which the City is a party or by which it or any of its property is bound.
(c) Governmental Consent or Approval. No authorization, consent, approval, permit, license, exemption of or filing or registration with, any court or governmental department, commission, board, bureau, agency or instrumentality is or will be necessary for the valid execution, delivery or performance by the City of the Related Documents to which it is a party except such consents, authorizations, orders and approvals (copies of which have been furnished to the Bank) as have been obtained, were validly issued and are in full force and effect.
(d) Binding Effect. Each of the Related Documents to which the City is a party has been duly executed and delivered by or on behalf of the City. Each of the Related Documents to which the City is a party constitute valid and binding obligations of the City enforceable in accordance with their respective terms, except as such enforceability may be limited by (i) bankruptcy, insolvency, reorganization, or similar laws affecting creditors’ rights generally, (ii) general principles of equity, (iii) the exercise of judicial discretion in appropriate cases, and (iv) the limitations on legal remedies against cities in the State. (e) Litigation. Except as disclosed in writing to the Bank, there are no actions, suits or proceedings pending with service of process accomplished or, to the best of the knowledge of the City’s Finance Director, threatened in writing against or affecting the City, or relating to the Related Documents , the City Resolution or the Master Resolution in any court or before or by any governmental department, agency or instrumentality in which there is a reasonable possibility of any adverse decision which could have a Material Adverse Effect (together with the litigation described in Section 4.01(e), “ Material Litigation”).
(f) Compliance; No Default . No “event of default” specified in any of the Related Documents to which the City is a party and no event which, with the giving of notice or lapse of time or both would become such an event of default, has occurred and is continuing.
DRAFT--Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.
27 (g) Immunity. The City cannot assert sovereign immunity as a defense to the enforcement of its obligations hereunder or under any of the Related Documents to which it is a party.
(h) Security for the Obligations . The Installment Purchase Contract has been designated as a Subordinate Obligation Contract, and the Installment Payments owing thereunder constitute Subordinate Obligations, under the Master Resolution. The Installment Payments are secured by the pledge o f and lien on Net System Revenues as provided in the Master Resolution, with the payment priority set forth in the Master Resolution.
(i) Environmental Laws. Except as disclosed in writing to the Bank, the City has not received notice to the effect that its operations are not in compliance with any of the requirements of applicable Environmental Laws, or are the subject of any governmental investigation evaluating whether any remedial action is needed to respond to a release of any Hazardous Materials into the environment, which noncompliance or remedial action would have a Material Adverse Effect.
(j) Financial Information. The balance sheet of the City as at June 30, 2025, and the related statement of revenues, expenses and changes in net assets and statement of cash flows for the fiscal year then ended, copies of all of which have been delivered to the Bank, fairly present the financial position of the City at such date and the results of its operations and changes in financial position for the fiscal year then ended, in conformity with Generally Accepted Accounting P rinciples consistently applied (except as stated therein). Since the date of such financial statements there has been no Material Adverse Change.
(k) Information. All information supplied and statements and representations made to the Bank by an authorized Person on behalf of the City in any financial, credit or accounting statement, application for credit or other statement or document furnished to the Bank in connection with this Agreement, whether prior to, contemporaneously with or subsequent to the execution hereof, and any certificate, document, schedule or other writing furnished to the Bank pursuant to this Agreement or in response to a request made by the Bank pursuant to this Agreement, are and will be, when furnished in all material respects true, complete, correct, valid, genuine and what they purport or are represented to be. (l) Incorporation of Representations and Warranties by Reference . The City hereby makes to the Bank the same representations and warranties made by the City in each Related Document to which it is a party, which representations and warranties, as well as the related defined terms contained therein, are hereby incorporated by reference for the benefit of the Bank with the same effect as if each and every such representation and warranty and defined term were set forth herein in its entirety. No amendment to such representations and warranties or defined terms made pursuant to any Related Document shall be effective to amend such representations and warranties and defined terms as incorporated by reference herein without the prior written consent of the Bank.
DRAFT--Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.
28 (m) Regulation U . The City is not entering into this Agreement and the transactions contemplated hereby for the purpose of purchasing or carrying margin stock as defined in Regulation U of the Board of Governors of the Federal Reserve System. (n) Usury. Assuming that the Bank is an exempted class of persons within the meaning of Article 15 of the California Constitution, the terms of this Agreement and the Related Documents regarding the calculation and payment of interest and fees do not violate any applicable usury laws of the State.
(o) No Proposed Legal Changes. Except as previously disclosed in writing to the Bank, to the knowledge of the City’s Finance Director since the Effective Date no amendment to the Constitution of the State or any published administrative interpretation of the Constitution of the State and no law has been enacted and no final and non- appealable judicial decision interpreting any of the foregoing, the effect of which could reasonably be expected to have a Material Adverse Effect. (p) Sanctions Concerns and Anti-Corruption Laws.
(i) Sanctions Concerns . To the current actual knowledge of the Director of Finance of the City, the City is not (A) currently the subject or target of any Sanctions, (B) included on OFAC’s List of Specially Designated Nationals or (C) located, organized or resident in a Designated Jurisdiction. To the current actual knowledge of the Director of Finance of the City, the City has conducted its business in compliance with all applicable Sanctions and has instituted and maintained policies and procedures designed to promote and achie ve compliance with such Sanctions.
(ii) Anti-Corruption Laws . To the current actual knowledge of the Director of Finance of the City, the City has conducted its business in compliance in all material respects with the United States Foreign Corrupt Practices Act of 1977 and other applicable anti -corruption legislation in any other jurisdiction in which the City is located or doing business and to which the City is subject in such jurisdiction, in each case as and to the extent applicable to the City, and has instituted and maintained policies and procedures designed to promote and achieve compliance with such laws.
(q) Compliance with Applicable Law. The City is in compliance in all material respects with the requirements of all applicable law, including all governmental approvals, except in such instances in which (i) such requirement of applicable law is being contested in good faith by appropriate proceedings diligently conducted by or on behalf of the City or (ii) the failure to comply therewith could not reasonably be expected to have a Material Adverse Effect.
(r) Insurance. The City currently maintains insurance with respect to the Wastewater System of such type and in such amounts or in excess of such amounts as are customarily carried by, and insures against such risks as are customarily insured against by, Persons and projects of like type, size and character.
DRAFT--Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.
29 (s) Employee Benefit Plans. The City does not maintain or contribute to, and has not maintained or contributed to, an employee pension benefit plan that is subject to Title IV of ERISA.
(t) Tax-Exempt Status. The City has not taken any action or omitted to take any action, and knows of no action taken or omitted to be taken by any other Person, which action, if taken or omitted, would adversely affect the exclusion of interest on the Series A-1 Notes from gross income for federal income tax purposes
ARTICLE V
COVENANTS
Section 5.01. Covenants of the Authority . The Authority covenants and agrees, from the date hereof and until the payment in full of all Obligations , unless the Bank shall otherwise consent in writing:
(a) Information. The Authority covenants and agrees that, at all times from and after the Effective Date until payment in full of all amounts due and owing to the Bank hereunder, the Authority will deliver to the Bank:
(i) Amendments. Promptly after the adoption thereof, copies of any amendments of or supplements to any of the Related Documents. (ii) Other Information. Such other information regarding the Authority as the Bank may reasonably request.
(b) Notices.
(i) Notice of Default . The Authority shall provide to the Bank in writing, promptly upon learning thereof, notice of any Default or Event of Default. (ii) Notice of Material Adverse Change and Material Adverse Effect .
The Authority shall provide to the Bank in writing, promptly upon learning thereof, notice of any event that could reasonably be expected to result in a Material Adverse Change and any event which could reasonably be expected to have a Material Adverse Effect.
(iii) Litigation. The Authority shall provide to the Bank in writing, promptly upon learning thereof, notice of any Material Litigation. (iv) Issuing and Paying Agent and Dealers. The Authority shall provide the Bank in writing, promptly upon learning thereof , notice of the failure by the Issuing and Paying Agent or by the Dealer to perform in any material respect any of their respective obligations under the Issuing and Paying Agent Agreement or the Dealer Agreements.
(v) Reserved.
DRAFT--Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.
30 (vi) Alternate Letter of Credit. The Authority shall provide to the Bank written notice of any proposed substitution of this Agreement and the Letter of Credit by the time required pursuant to Section 5.08 of the Issuing and Paying Agent Agreement.
(c) No Amendment of Related Documents . The Authority shall not enter into or consent to any amendments of or supplements to any Related Document or any waiver of the requirements thereof without the prior written consent of the Bank. Notwithstanding the foregoing, the Authority may enter into or consent to any amendments or supplements to the Related Documents that are reasonably necessary to extend the terms of the Issuing and Paying Agent Agreement or the Dealer Agreements, to provide for the payment of consideration for services rendered thereunder, and to attend to non-substantive administrative matters such as notice provisions and delivery instructions; provided, that the Authority delivers a copy of any such amendment or supplement to the Bank. (d) Related Obligations and Incorporation of Covenants. The covenants of the Authority set forth in the Related Documents to which it is a party, as well as related defined terms contained therein, are hereby incorporated by reference herein with the same effect as if each and every such provision were set forth herein in its entirety for the benefit of the Bank and shall be enforceable by the Bank against the Authority. All such incorporated covenants shall be in addition to the express covenants contained herein and shall not be limited by the express covenants contained herein nor shall such incorporated covenants be a limitation on the express covenants contained herein. To the extent that any such incorporated provision permits any Person to waive compliance with or consent to such provision or requires that a document, opinion, report or other instrument or any event or condition be acceptable or satisfactory to any Person, for purposes of this Agreement, such compliance shall be waived, or such provision shall be consented to, only if it is waived or consented to, as the case may be, by the Bank and such document, opinion, report or other instrument shall be acceptable or satisfactory only if acceptable or satisfactory to the Bank. No amendment to such covenants (or the defined terms relating thereto) made pursuant to the Related Documents shall be effective to amend such incorporated covenants without the written consent of the Bank. Notwithstanding the termination or expiration of any Related Document, the Authority shall, unless such Related Document has terminated or expired in accordance with its terms and has been replaced by a new Related Document, continue to observe the covenants therein contained for the benefit of the Bank until the termination of this Agreement. (e) Taxes and Liabilities . The Authority will pay or cause to be paid and discharged (i) all its indebtedness and obligations promptly and in accordance with their terms to the extent that such failure to pay or discharge would adversely affect the rights of the Bank hereunder or under the Related Documents or the ability of the Authority to perform its obligations under, the Bank Note, the Fee Agreement or this Agreement and (ii) promptly all taxes, assessments and governmental charges or levies imposed upon it or upon its income and profits, or upon any of its property, real, personal or mixed, or upon any part thereof, in each case before the same shall become in default which, if not paid, would likely have a Material Adverse Effect.
DRAFT--Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.
31 (f) Further Assurances. The Authority will at any and all times, insofar as it may be authorized so to do by law, pass, make, do, execute, acknowledge and deliver all and every such further resolutions, acts, deeds, conveyances, assignments, recordings, filings, transfers and assurances as may be necessary or, in the reasonable judgment of the Bank, desirable for the better assuring, conveying, granting, assigning, and confirming all and singular the rights, revenues, and other funds hereby pledged or assigned to the payment of the Bank Note, or intended so to be, of which the Authority may become bound to pledge or assign. From time to time hereafter, the Authority will execute and deliver such additional instruments, certificates or documents, and will take all such actions as the Bank may reasonably request for the purposes of implementing or effectuating the provisions of this Agreement and each of the other Related Documents or for the purpose of more fully perfecting or renewing the Bank’s rights with respect to any rights, properties or assets subject to such documents pursuant hereto or thereto. (g) Most Favored Nations Provisions. In the event the Authority shall, directly or indirectly, be a party to or be bound by any Bank Agreement, the obligations under which are to be secured by the Net System Revenues on a parity with or senior to the Installment Payments, which contains a Most Favored Nations Provision, the Authority shall provide the Bank with a copy of such Bank Agreement and such Most Favored Nations Provision shall automatically be deemed to be incorporated into this Agreement and the Bank shall have the benefits of such Most Favored Nations Provision as if specifically set forth herein. The Authority shall promptly enter into an amendment to this Agreement to include such Most Favored Nations Provision; provided that the Bank shall have and maintain the benefit of such Most Favored Nations Provision even if the Authority fails to provide such amendment.
(h) Maintenance of Books and Records. The Authority shall keep proper books of record and account in which full, true and correct entries will be made of all dealings or transactions in relation to its business and activities related to the Installment Purchase Contract.
(i) Exempt Status. The Authority shall not take any action or omit to take any action that, if taken or omitted, would adversely affect the excludability of interest on the Series A-1 Notes from the gross income of the holders thereof for purposes of federal income taxation under the Code.
(j) Licenses, Permits, Etc . All authorizations, approvals, licenses, permits, consents and orders of any governmental authority, board, agency or commission having jurisdiction in the matter which are required for the due authorization of, which would constitute a condition precedent to or the absence of which would adversely affect the due performance by the Authority of its obligations hereunder and under the other Related Documents to which it is a party have been and shall at all times in all material respects be duly maintained and complied with by the Authority.
(k) Laws and Contracts. The Authority shall do all things necessary to maintain and comply with all necessary authorizations, approvals, consents and rights material for the conduct of its business as it is presently being conducted and the ownership and
DRAFT--Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.
32 operations of its facilities as they are presently being operated and comply in all material respects with all present and future laws (including Environmental Laws), statutes, rules, regulations, codes, ordinances, orders, writs, judgments, decrees, award s, injunctions, restrictive covenants and requirements binding upon or applicable to it, its assets or its operations to the extent that a failure to so maintain or comply would materially and adversely affect (in the reasonable opinion of the Bank) the rights of the Bank hereunder or the ability of the Authority to perform its obligations under the Bank or this Agreement.
The Authority shall comply in all material respects with any credit agreement, indenture, mortgage, agreement or other instrument to which it is a party or otherwise subject to the extent that a failure to comply would materially and a dversely affect (in the reasonable opinion of the Bank) the rights of the Bank hereunder or the ability of the Authority to perform its obligations under the Bank Note or this Agreement. The Authority will promptly furnish copies of all default notices under any such laws and any outstanding contracts or agreements, a default under which would likely have a Material Adverse Effect.
(l) Existence. The Authority shall maintain its existence. (m) Liens. The Authority shall not cause or permit there to be any Lien on its rights under the Installment Purchase Contract except for the Lien created pursuant to the Issuing and Paying Agent Agreement. The Authority shall not assign or transfer any of its rights under the Installment Purchase Contract except as provided in the Issuing and Paying Agent Agreement.
(n) Restrictions on Use of Letter of Credit Proceeds. The Authority shall cause the proceeds of the Letter of Credit to be applied by the Issuing and Paying Agent for the purposes described in the Issuing and Paying Agent Agreement. (o) Filing of Agreement. In the event that the Authority delivers this Agreement to the Municipal Securities Rulemaking Board, for filing with EMMA, the filed copy of this Agreement shall be redacted in a manner satisfactory to the Bank. (p) Anti-Corruption Laws; Sanctions.
(i) The Authority shall conduct its business in compliance in all material respects with the United States Foreign Corrupt Practices Act of 1977 and other applicable anti -corruption legislation in any other jurisdiction in which the Authority is located or doing business and to which the Authority is subject in such jurisdiction, in each case as and to the extent applicable to the Authority and with all applicable Sanctions, and maintain policies and procedures designed to promote and achieve compliance with such laws and Sanctions.
(ii) The Authority shall not permit the Issuing and Paying Agent to use any proceeds of the Letter of Credit, or lend, contribute or otherwise make available such proceeds to any Person, to fund any activities of or business with any Person, that, at the time of such funding, is the subject of Sanctions, or in any other manner
DRAFT--Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.
33 that will result in a violation by any Person (including any Person participating in the transaction, whether as Bank or otherwise) of Sanctions. (iii) The Authority shall not permit the Issuing and Paying Agent to use any proceeds of the Letter of Credit for any purpose which would breach the United States Foreign Corrupt Practices Act of 1977 and other anti-corruption legislation in other jurisdictions.
(q) Maintenance of Issuing and Paying Agent. The Authority shall maintain in place an Issuing and Paying Agent under the Issuing and Paying Agent Agreement for the Series A Notes, and obtain the prior written consent of the Bank (which consent shall not be unreasonably withheld) to any change in the Person acting as Issuing and Paying Agent (provided that written consent shall not be required in circumstances of succession or assignment due to merger, consolidation or other similar action). (r) Total Outstanding. The Authority shall not permit the aggregate amount of all Series A Notes Outstanding and accrued interest thereon to the maturity thereof and all Drawings and Advances outstanding and unpaid at any time to exceed the Stated Amount. (s) Reserved.
(t) Offering Memorandum. Other than as expressly consented to in writing by the Bank, the Authority shall not refer to the Bank in the Offering Memorandum or any other offering or reoffering document with respect to the Series A Notes or make any changes in reference to the Bank in any revision of such Offering Memorandum or any such offering or reoffering document without the Bank’s prior written consent thereto, which consent shall not be unreasonably withheld.
(u) Reserved.
(v) Remarketing. The Authority shall issue and sell Series A Notes as promptly as practicable after a Drawing on the Letter of Credit and use the proceeds of sale solely for the repayment of such Drawing (and such proceeds of sale shall be deemed to be proceeds of Series A Notes for all the purposes of the Issuing and Paying Agent Agreement, this Agreement and the Bank Note).
(w) Commercial Paper Dealer . The Authority shall appoint, or cause to be appointed, at all times, a Dealer, which is acceptable to the Bank. The Authority agrees to cause the Dealer to use its best efforts to sell Series A Notes at par, up to the maximum rate applicable to Series A Notes, in order to repay maturing Series A Notes. If the Dealer fails to perform its duties under the Dealer Agreement (including, without limitation, an inability or failure to sell Series A Notes to pay maturing Series A Notes), then the Authority agrees, at the written request of the Bank, to cause the Dealer to be replaced with a Dealer satisfactory to the Bank. The Authority agrees to obtain the written consent of the Bank (which consent shall not be unreasonably withheld) prior to the appointment of a successor Dealer (provided that written consent shall not be required in circumstances of succession or assignment due to merger, consolidation or other similar action) . The Authority shall at all times exercise commercially reasonable efforts to cause each D ealer
DRAFT--Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.
34 Agreement entered into after the date hereof, to contain satisfactory third-party beneficiary provisions in favor of the Bank. Any Dealer Agreement shall provide that such dealer may resign upon at least sixty (60) days’ prior written notice to the Authority and the Bank. (x) Liquidity; Bonding Capacity.
(i) In the event that the Bank shall decide not to extend the Stated Expiration Date, the Authority shall use its commercially reasonable efforts to obtain an Alternate Letter of Credit to replace the Letter of Credit or shall take such other action as will result in the payment of all amounts owed to the Bank upon termination of the Letter of Credit and this Agreement. (ii) The Authority agrees that any Alternate Letter of Credit will require, as a condition to the effectiveness of such Alternate Letter of Credit, that the provider of the Alternate Letter of Credit will provide funds, on the date the Alternate Letter of Credit becomes effective, for the payment of all principal and accrued interest (at the Bank Rate) on all Advances then outstanding. On such date, any and all amounts due hereunder and under the Bank Note, the Issuing and Paying Agent Agreement or the Series A Notes due to the Bank shall be payable in full to the Bank.
(iii) The Authority shall at all times maintain the ability to issue Notes (as defined in the Issuing and Paying Agent Agreement) in an amount at least equal to the sum of (A) the aggregate principal amount of the Outstanding Series A Notes, plus (B) the aggregate amount of accrued interest to maturity on all Outstanding Series A Notes, plus ( C) any other obligations owing to any credit enhancer or liquidity provider on the Series A Notes.
(y) Swap Termination Payments. The Authority shall in no event permit any Lien securing a swap termination payment payable from the Installment Payments to be first in priority to or pari passu with the Lien granted in support of the Series A Notes and the Bank Note.
Section 5.02. Covenants of the City. The City covenants and agrees, from the date hereof and until the payment in full of all Obligations, unless the Bank shall otherwise consent in writing:
(a) Information. The City covenants and agrees that, at all times from and after the Effective Date until payment in full of all amounts due and owing to the Bank hereunder, the City will deliver to the Bank:
(i) Annual Report. As soon as available and in any event within two hundred seventy (270) days after the end of each fiscal year of the City, (A) either (1) a copy of the annual audit report of the City (which will include financial statements for the Wastewater Treatment System Fund), certified to the City as having been prepared in accordance with GAAP consistently applied by independent certified public accountants of recognized standing, including a balance sheet of the City as of the end of such fiscal year and related statement of revenues, expenses and changes in net assets and statement of cash flows for the
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35 fiscal year ended or (2) a copy of a separate annual audit report for the Wastewater Treatment System Fund, certified to the City as having been prepared in accordance with GAAP consistently applied by independent certified public accountants of recognized standing, including a balance sheet of the Wastewater Treatment System Fund as of the end of such fiscal year and related statement of revenues, expenses and changes in net assets and statement of cash flows for the fiscal year ended and (B) a letter from an Authorized Officer addressed to the Bank in the form of Exhibit C stating that no Default or Event of Default has come to his or her attention which was continuing at the end of such fiscal year or on the date of such letter, or, if such Default or Event of Default has come to such officer’s attention and was continuing at the end of such fiscal year or on the date of such letter, indicating the nature of such Default or Event of Default and the action which the City proposes to take with respect thereto;
(ii) Budget. As soon as available, the adopted annual capital and operating budgets of the City for such upcoming fiscal year. Additionally, promptly after the adoption thereof, any amendments to the annual operating budget that could reasonably be expected to result in a Material Adverse Change. (iii) Amendments. Promptly after the adoption thereof, copies of any amendments of or supplements to any of the Related Documents. (iv) Material Event Notices. Immediately following any dissemination, distribution or provision thereof to any Person, a copy or notice of the filing of any Material Event Notice related to the Wastewater System or the System Revenues disseminated, distributed or provided by the Ci ty in satisfaction of or as may be required by the provisions of Rule 15c2-12 promulgated pursuant to the Securities Exchange Act of 1934, as amended (17 C.F.R. Sec. 240 15c2-12), or any successor or similar legal requirement.
(v) EMMA Filings. Copies or notice of the filing of all filings related to the Wastewater System or the System Revenues required to be made by the City with EMMA promptly after such filings are made.
(b) Notices.
(i) Notice of Default . The City shall provide to the Bank in writing, promptly upon learning thereof, notice of any Default or Event of Default. (ii) Notice of Material Adverse Change and Material Adverse Effect .
The City shall provide to the Bank in writing, promptly upon learning thereof, notice of any event that could reasonably be expected to result in a Material Adverse Change and any event which could reasonably be expected to have a Material Adverse Effect.
(iii) Litigation. The City shall provide to the Bank in writing, promptly upon learning thereof, notice of any Material Litigation.
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36 (c) No Amendment of Related Documents. The City will not permit or consent to any amendment to or modification, waiver, or termination of any of the Related Documents without the prior written consent of the Bank. (d) Related Obligations and Incorporation of Covenants. The covenants of the City set forth in the Related Documents to which it is a party, as well as related defined terms contained therein, are hereby incorporated by reference herein with the same effect as if each and every such provision were set forth herein in its entirety for the benefit of the Bank and shall be enforceable by the Bank against the City. All such incorporated covenants shall be in addition to the express covenants contained herein and shall not be limited by the express covenants contained herein nor shall such incorporated covenants be a limitation on the express covenants contained herein. To the extent that any such incorporated provision permits any Person to waive compliance with or consent to such provision or requires that a document, opinion, report or other instrument or any event or condition be acceptable or satisfactory to any Person, for purposes of this Agreement, such compliance shall be waived, or such provision shall be consented to, only if it is waived or consented to, as the case may be, by the Bank and such document, opinion, report or other instrument shall be acceptable or satisfactory only if acceptable or satisfactory to the Bank.
No amendment to such covenants (or the defined terms relating thereto) made pursuant to the Related Documents shall be effective to amend such incorporated covenants without the written consent of the Bank. Notwithstanding the termination or expiration of any Related Document, the City shall, unless such Related Document has terminated or expired in accordance with its terms and has been replaced by a new Related Document, continue to observe the covenants therein contained for the benefit of the Bank until the termination of this Agreement.
(e) Taxes and Liabilities. The City will pay or cause to be paid and discharged:
(i) all its indebtedness and obligations promptly and in accordance with their terms to the extent that such failure to pay or discharge would adversely affect the rights of the Bank hereunder or under the Related Documents or the ability of the City to perform its obligations under this Agreement or the Related Documents to which it is a party and
(ii) promptly all taxes, assessments and governmental charges or levies imposed upon it or upon its income and profits, or upon any of its property, real, personal or mixed, or upon any part thereof, in each case before the same shall become in default which, if not paid, would likely result in a Material Adverse Effect.
(f) Further Assurances. The City will at any and all times, insofar as it may be authorized so to do by law, pass, make, do, execute, acknowledge and deliver all and every such further resolutions, acts, deeds, conveyances, assignments, recordings, filings, transfers and assurances as may be necessary or, in the reasonable judgment of the Bank, desirable for the better assuring, conveying, granting, assigning, and confirming all and singular the rights, revenues, and other funds hereby pledged or assigned to the payment of the Bank Note, or intended so to be, of which the City may become bound to pledge or
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37 assign. From time to time hereafter, the City will execute and deliver such additional instruments, certificates or documents, and will take all such actions as the Bank may reasonably request for the purposes of implementing or effectuating the provisions of this Agreement and each of the other Related Documents or for the purpose of more fully perfecting or renewing the Bank’s rights with respect to any rights, properties or assets subject to such documents pursuant hereto or thereto.
(g) Most Favored Nations Provisions . In the event the City shall, directly or indirectly, be a party to or be bound by any Bank Agreement, the obligations under which are to be secured by the Net System Revenues on a parity with or senior to the Installment Payments, which contains a Most Favored Nations Provision, the City shall provide the Bank with a copy of such Bank Agreement and such Most Favored Nations Provision shall automatically be deemed to be incorporated into this Agreement and the Bank shall have the benefits of such Most Favored Nations Provision as if specifically set forth herein. The City shall promptly enter into an amendment to this Agreement to include such Most Favored Nations Provision; provided that the Bank shall have and maintain the benefit of such Most Favored Nations Provision even if the City fails to provide such amendment. (h) Maintenance of Books and Records . The City shall keep proper books of record and account in which full, true and correct entries will be made of all dealings or transactions in relation to its business and activities related to the Wastewater System and the System Revenues.
(i) Inspections. The City shall permit the Bank or its respective representatives, at any reasonable time and upon reasonable notice, during normal business hours and from time to time, at the request of the Bank to visit and inspect the properties of the City relating to the Wastewater System, to examine and make copies of and take abstracts from the records and books of account relating to the System Revenues, and to discuss the affairs, finances and accounts relating to the Wastewater System, and the System Revenues with the appropriate officers of the City. The Bank agrees to maintain the confidentiality of all such books, records and information; provided, however, that the Bank shall not be precluded from disclosing such information or the contents of such books and records to its legal counsel, its Participants or, to the extent required by statute, rule, regulation or judicial process or upon the lawful demand of any court, agency or other Governmental Authority having jurisdiction over the Bank. (j) Exempt Status. The City shall not take any action or omit to take any action that, if taken or omitted, would adversely affect the excludability of interest on the Series A-1 Notes from the gross income of the holders thereof for purposes of federal income taxation under the Code.
(k) Licenses, Permits, Etc . All authorizations, approvals, licenses, permits, consents and orders of any governmental authority, board, agency or commission having jurisdiction in the matter which are required for the due authorization of, which would constitute a condition precedent to or the absence of which would adversely affect the due performance by the City of its obligations hereunder and under the other Related
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38 Documents to which it is a party have been and shall at all times in all material respects be duly maintained and complied with by the City.
(l) Laws and Contracts. The City shall do all things necessary to maintain and comply with all necessary authorizations, approvals, consents and rights material for the conduct of its business as it is presently being conducted and the ownership and operations of its facilities as they are presently being operated and comply in all material respects with all present and future laws (including Environmental Laws), statutes, rules, regulations, codes, ordinances, orders, writs, judgments, decrees, awards, injunctions, restrictive covenants and requirements binding upon or applicable to it, its assets or its operations to the extent that a failure to so maintain or comply would materially and adversely affect (in the reasonable opinion of the Bank) the rights of the Bank hereunder or the ability of the City to perform its obligations under this Agreement. The City shall comply in all material respects with any credit agreement, indenture, mortgage, agreement or other instrument to which it is a party or otherwise subject to the extent that a failure to comply would materially and adversely affect (in the reasonable opinion of the Bank) the rights of the Bank hereunder or the ability of the City to perform its obligations under this Agreement.
The City will promptly furnish copies of all default notices under any such laws and any outstanding contracts or agreements, a default under which would likely result in a Material Adverse Effect.
(m) Existence. The City shall maintain its existence.
(n) Liens. The City shall not cause or permit there to be any Lien on the Net System Revenues except for the Liens expressly provided for in or permitted by the Master Resolution.
(o) Restrictions on Use of Letter of Credit Proceeds. The City shall cause the proceeds of the Letter of Credit to be applied by the Issuing and Paying Agent for the purposes described in the Issuing and Paying Agent Agreement. (p) Additional Obligations. The City shall comply with Section 2.04 of the Master Resolution.
(q) Encumbrances. The City shall comply with Section 3.01 of the Master Resolution.
(r) Disposition of Assets . The City shall comply with Section 3.02 of the Master Resolution.
(s) Maintenance and Operation of the Wastewater System . The City shall comply with Section 3.03 of the Master Resolution.
(t) Amount of Rates and Charges. The City shall comply with Section 3.04 of the Master Resolution.
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39 (u) Filing of Agreement. In the event that the City delivers this Agreement to the Municipal Securities Rulemaking Board, for filing with EMMA, the filed copy of this Agreement shall be redacted in a manner satisfactory to the Bank. (v) Insurance. The City will at all times maintain insurance with respect to the Wastewater System of such type, and in such amounts or in excess of such amounts as are customarily carried by, and insuring against such risks as are customarily insured against by, Persons and projects of like type, size and character. (w) Rating Maintenance. The City shall maintain at least one Obligor Rating at all times f rom either S&P or Fitch and shall maintain at least one long -term investment grade rating assigned to the Bank Note either from S&P or Fitch. (x) Anti-Corruption Laws; Sanctions.
(i) (i) The City shall conduct its business in compliance in all material respects with the United States Foreign Corrupt Practices Act of 1977 and other applicable anti -corruption legislation in any other jurisdiction in which the City is located or doing business and to which the City is subject in such jurisdiction, in each case as and to the extent applicable to the City and with all applicable Sanctions, and maintain policies and procedures designed to promote and achieve compliance with such laws and Sanctions.
(ii) The City shall not permit the Issuing and Paying Agent to use any proceeds of the Letter of Credit, or lend, contribute or otherwise make available such proceeds to any Person, to fund any activities of or business with any Person, that, at the time of such funding, is the subject of Sanctions, or in any other manner that will result in a violation by any Person (including any Person participating in the transaction, whether as Bank or otherwise) of Sanctions. (iii) The City shall not permit the Issuing and Paying Agent to use any proceeds of the Letter of Credit for any purpose which would breach the United States Foreign Corrupt Practices Act of 1977, the UK Bribery Act 2010 and other anti-corruption legislation in other jurisdictions.
ARTICLE VI
DEFAULTS
Section 6.01. Events of Default . If one or more of the following events (“ Events of Default”) shall have occurred and be continuing:
(a) the Authority shall fail to pay (i) any principal of or interest on any Drawing, Advance or the Bank Note when due (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise), or (ii) any Facility Fee or other amount payable hereunder and, with respect to clause (ii) only , such failure shall continue for a period of three (3) Business Days from the date such obligation was due;
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40 (b) the Authority or the City shall fail to perform or observe any covenant set forth in Sections 5.01(b), (c), (g), (l), (m), (n), (p), (q), (r), (v), (w), (x) and (y) and 5.02(b), (c), (g), (m), (n), (o), (p), (q), (r), (s), (t), (v), (w), and (x); (c) the Authority or the City shall fail to perform any term, covenant, condition or provision of this Agreement or any of the Related Documents to which it is a party (other than as specified in any other subsection of this Section), which failure continues for thirty (30) days or more after receipt by Authority or the City of written notice of such failure; (d) any representation or warranty made or deemed made by the Authority or the City in this Agreement, in any Related Document to which it is a party or in any certificate, financial statement or other statement furnished by or on behalf of the Authority or the City pursuant to this Agreement or any of the Related Documents shall prove to have been incorrect in any material respect when made or deemed to have been made; (e) the occurrence of an Event of Default under the Issuing and Paying Agent Agreement or the Installment Purchase Contract;
(f) default by the Authority or the City in the payment of any amount when due in respect of any Material Debt; or default under any Contract under or pursuant to which Material Debt payable from or secured by a Lien on Net System Revenues on a parity with or senior to the Installment Payments is incurred or issued, and continuance of such default beyond the period of grace, if any, allowed with respect thereto; or default under any Contract under or pursuant to which Material Debt payable from or secured by a Lien on Net System Revenues on a priority that is subordinate to the Installment Payments is incurred or issued, and continuance of such default beyond the period of grace, if any, allowed with respect thereto, which default results in such Material Debt becoming, or being capable of becoming, immediately due and payable; or the occurrence of any act or omission by the Authority or the City under any Contract under or pursuant to which Material Debt is incurred or issued which results in such Material Debt becoming, or being capable of becoming, immediately due and payable (or, with respect to any Interest Rate Swap Agreement that constitutes Material Debt, which results in such Interest Rate Swap Agreement being terminated early or being subject to early termination); (g) (i) The Authority or the City shall in writing claim, or repudiate its obligations under, or initiate any legal proceedings to seek an adjudication that, any of the provisions that provide for the payment of principal of or interest on the Bank Note or the Series A Notes or that establish the pledge of the Installment Payments to secure the Obligations, this Agreement , the Related Documents, the City Resolution, the Authority Resolution or the Master Resolution is not valid or binding on the Authority or the City, as applicable;
(ii) Any court of competent jurisdiction or other Governmental Authority with jurisdiction to rule on the validity of this Agreement or the Related Documents shall find or rule that any of the provisions that provide for the payment of principal of or interest on the Bank Note or the Series A Notes or that establish
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41 the pledge of the Installment Payments to secure the Obligations, this Agreement or the Related Documents is not valid or binding on the Authority or the City; or (iii) Except as provided in clauses (i) and (ii) above, any provision of this Agreement, the Fee Agreement, the Issuing and Paying Agent Agreement, the Installment Purchase Contract, the Bank Note or the Series A Notes shall cease to be valid and binding or shall be declared null and void; or the Authority, the City or any Governmental Authority shall contest any such provision; or the Authority, the City or any agent or trustee on behalf of the Authority or the City shall deny that it has any further liability under any provision of this Agreement or any of the other Related Documents to which it is a party; or the Authority or the City shall (A) claim that this Agreement or any of the other Related Documents to which it is a party is not valid or binding on it, (B) repudiate its obligations under this Agreement or any of the other Related Documents to which it is a party, and/or (C) initiate any legal proceedings to seek an adjudication that this Agreement or any of the other Related Documents to which it is a party or the Authority’s or the City’s obligation to repay any Material Debt is not valid or binding on it; (h) entry or filing of any final, non-appealable judgment or any similar process in an amount in excess of $20,000,000 against the Authority or the City payable from System Revenues and failure by the Authority or the City to stay the enforcement of such judgment or other process for a period of ninety ( 90) days or failure to pay or satisfy the same within ninety (90) days;
(i) an Event of Insolvency shall have occurred with respect to the Authority or the City;
(j) the Lien created by the Issuing and Paying Agent Agreement, at any time and for any reason (except as expressly permitted to be released by the terms of such governing document) shall not constitute a valid and perfected Lien or shall fail to have the priority required by this Agreement and the Related Documents, or the Authority or the City shall so assert in writing; or
(k) any Obligor Rating shall be withdrawn or suspended for credit related reasons or reduced below “BBB” (or its equivalent) by S&P, “BBB” (or its equivalent) by Fitch or “BBB”(or its equivalent) by Kroll.
Section 6.02. Rights and Remedies. Upon the occurrence of any Event of Default , the Bank may exercise any one or more of the following rights and remedies in addition to any other remedies herein or by law provided:
(a) subject to Section 6.03, by written notice to the Authority and the Issuing and Paying Agent, declare all outstanding Obligations to be immediately due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Authority; provided that upon the occurrence of an Event of Default under Section 6.01(i) hereof all outstanding Obligations shall be immediately due and payable without notice.
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42 (b) may (i) deliver a Non -Issuance Notice which upon receipt shall prohibit , until such time, if any, as the Bank shall withdraw (in writing) such notice, the issuance of additional Series A Notes and (ii) reduce the Available Amount of the Letter of Credit to the amount of the then outstanding Series A Notes supported by the Letter of Credit and interest payable thereon at maturity of such Series A Notes and/or permanently reduce such Available Amount as the then outstanding Series A Notes are paid; (c) issue the Final Drawing Notice (the effect of which shall be to cause the Termination Date of the Letter of Credit to occur on the fifteenth (15th) day after the date of receipt thereof by the Issuing and Paying Agent);
(d) pursue any rights and remedies it may have under the Related Documents ; or
(e) pursue any other action available at law or in equity.
All remedies contained in this Agreement and any Related Document or by law afforded, including any remedies as subrogee , shall be cumulative and all shall be available to the Bank until the Obligations have been paid in full.
Section 6.03. Special Acceleration Terms for Certain Events of Default .
Notwithstanding the provisions of Section 6.02(a),
(a) solely in the case of an Event of Default under Sections 6.01(a)(i), (f), (g)(i), (g)(ii), (h), (j) or (k), an acceleration pursuant to Section 6.02( a) shall not be declared or directed by the Bank until seven (7) days after the occurrence of such Event of Default; and
(b) solely in the case of an Event of Default under any other subsection of Sections 6.01 other than those specifically enumerated in Section 6.03(a) above and Section 6.01(i), an acceleration pursuant to Section 6.02(a) shall require one hundred eighty (180) days’ prior written notice from the Bank to the Authority.
Notwithstanding the foregoing, (i) if any other holder, lender, credit enhancer, liquidity provider or insurer of Debt, secured by or payable from Net System Revenues has the right to cause such Debt to be immediately due and payable (whether by repurchase, mandatory tender, mandatory redemption, acceleration or otherwise) on a date earlier than or pursuant to a notice period which is shorter than the applicable date or notice period set forth in Section 6.03(a) or (b), as applicable, in connection with a similar type of default, then the period set forth in Section
6.03(a) or (b), as applicable, shall automatically be changed to reflect such shorter period or earlier date, or (ii) if any other holder, lender, credit enhancer, liquidity provider or insurer of such Debt or any counterparty to any Interest Rate Swap Agreement which, in either case, is secured by or payable from Net System Revenues causes any such Debt or obligations of the Authority or the City under such Interest Rate Swap Agreement to become immediately due and payable or an Event of Default under Section 6.01(i) occurs, then the Bank may immediately, without notice or delay, avail itself of the remedies set forth in Sections 6.02(a) and accelerate all obligations of the
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43 Authority under this Agreement and cause the acceleration of the Installment Payments under the Installment Purchase Contract.
Section 6.04. Suits at Law or in Equity and Mandamus . If any Event of Default shall occur, then and in every such case the Bank shall be entitled to proceed to protect and enforce its rights by such appropriate judicial proceeding as it may deem most effectual to protect and enforce any such right, either by suit, in equity, or by action at law, whether for the specific performance of any covenant or agreement contained in this Agreement , in aid of the exercise of any power granted in this Agreement , or to enforce any other legal or equitable right vested in the Bank on behalf of the Bank by this Agreement, the Bank Note or by law.
Section 6.05. Remedies Not Exclusive. No remedy herein conferred upon or reserved to the Bank is intended to be exclusive of any other remedy, and every such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing, at law or in equity or by statute or otherwise , and may be exercised at any time or from time to time, and as often as may be necessary, by the Bank.
Section 6.06. No Waiver of Remedies. No waiver of any breach of or default under any provision of any of the Related Documents shall constitute or be construed as a waiver by the Bank of any subsequent breach of or default under that or any other provision of any of the Related Documents.
ARTICLE VII
MISCELLANEOUS
Section 7.01. Amendments, Etc. No amendment or waiver of any provision of this Agreement, and no consent to any departure by the Authority or the City therefrom, shall be effective unless in writing signed by the Bank, the Authority and the City, and each such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. In the case of any such waiver or consent relating to any provision hereof , any Default or Event of Default so waived or consented to shall be deemed to be cured and not continuing, but no such waiver or consent shall extend to any other or subsequent Default or Event of Default or impair any right consequent thereto.
Section 7.02. Notices; Effectiveness; Electronic Communication. (a) Except in the case of notices and other communications expressly permitted to be given by telephone (and except as provided in subsection (b) below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent e -mail transmission as follows, and all notices and other communications expressly permitted hereunder to be given by telephone shall be made to the applicable telephone number, if to the Authority, the City or the Bank, to the address, e -mail address or telephone number specified for such Person on Schedule I. Notices and other communications sent by hand or overnight courier service, or mailed by certified or registered mail, s hall be deemed to have been given when received; notices and other communications sent by e-mail transmission shall be deemed to have been given when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next Business
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44 Day for the recipient). Notices and other communications delivered through electronic communications to the extent provided in subsection (b) below, shall be effective as provided in such subsection (c).
(b) Notices and other communications to the Bank hereunder may be delivered or furnished by electronic communication (including e -mail and Internet or intranet websites) pursuant to procedures approved by the Bank. The Bank, the Authority or the City, in its discretion, agrees to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it provided that the approval of such procedures may be limited to particular notices or communications. (c) Unless the Bank otherwise prescribes, (i) notices and other communications sent to an e- mail address shall be deemed received upon the sender ’s receipt of an acknowledgement from the intended recipient (such as by the “ return receipt requested” function, as available, return e-mail or other written acknowledgement), and (ii) notices or communications posted to an i nternet or intranet website shall be deemed received upon the deemed receipt by the intended recipient at its e- mail address as described in the foregoing clause (i) of notification that such notice or communication is available and identifying the website address therefor; provided that, for both clauses (i) and (ii), if such notice, email or other communication is not sent during the normal business hours of the recipient, such notice, email or communication shall be deemed to have been sent at the opening of business on the next business day for the recipient. (d) (d) Each of the Authority, the City and the Bank may change its address, fax number or telephone number or e -mail address for notices and other communications hereunder by notice to the other parties hereto.
(e) The Bank shall be entitled to rely and act upon any notices (including telephonic or electronic notices) purportedly given by or on behalf of the Authority and the City even if (i) such notices were not made in a manner specified herein, were incomplete or were not preceded or followed by any other form of notice specified herein, or (ii) the terms thereof, as understood by the recipient , varied from any confirmation thereof . All telephonic notices to and other telephonic communications with the Bank may be recorded by the Bank, and each of the parties hereto hereby consents to such recording.
Section 7.03. Costs and Expenses; Damage Waiver. (a) The Authority and the City will promptly pay (i) the reasonable fees and expenses of the Bank (including, without limitation the reasonable fees and expenses of special counsel to the Bank) , incurred in connection with the preparation, execution and delivery of this Agreement and the Letter of Credit; (ii) the reasonable fees and disbursements of counsel to the Bank with respect to advising the Bank as to the rights and responsibilities under this Agreement after the occurrence of an Event of Default; and (iii) all reasonable costs and expenses, if any, in connection with the enforcement of this Agreement and any other documents which may be delivered in connection herewith, including in each case the fees and disbursements of counsel to the Bank. In addition, the Authority and the City agree to pay, after the occurrence of an Event of Default, all costs and expenses (including attorneys’ fees and costs of settlement) incurred by the Bank in enforcing any obligations or in collecting any payments due from the Authority and the City hereunder by reason of such Event of Default or in
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45 connection with any refinancing or restructuring of the credit arrangements provided under this Agreement in the nature of a “workout” or of any insolvency or bankruptcy proceedings. (b) Indemnification by the Authority . (i) In addition to any and all rights of reimbursement, indemnification, subrogation or any other rights pursuant hereto or under law or equity, the Authority hereby agrees (to the extent permitted by law) to indemnify and hold harmless the Bank and its office rs, directors and agents (each, an “ Indemnitee”) from and against any and all claims, damages, losses, liabilities, reasonable costs or expenses whatsoever (including reasonable attorneys’ fees) which may be incurred by or which may be claimed against an Indemnitee by any Person (collectively, the “Liabilities”) by reason of or in connection with ( A) the execution or delivery of this Agreement, any other Related Document or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto of their respective obligations hereunder or thereunder, the consummation of the transactions contemplated hereby or thereby; (B) any Drawing or the use or proposed use of the proceeds therefrom; and ( C) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by a third party or by the Authority, and regardless of whether the Bank is a party thereto; provided that the Authority shall not be required to indemnify an Indemnitee for any claims, damages, losses, liabilities, costs or expenses to the extent, but only to the extent, caused by the willful misconduct or gross negligence of such Indemnitee, as determined by a court of competent jurisdiction in a final and nonappealable judgment. If any proceeding shall be brought or threatened against an Indemnitee by reason of or in connection with the events described in clause ( A), ( B) or ( C) as a condition of indemnity hereunder each Indemnitee shall promptly notify the Authority in writing and the Authority shall assume the defense thereof, including the employment of counsel reasonably satisfactory to such Indemnitee and the payment of all reasonable costs of litigation. Notwithstanding the preceding sentence, each Indemnitee shall have the right to employ its own counsel and to determine its own defense of such action in any such case, but the fees and expenses of such counsel shall be at the expense of such Indemnitee unless (X) the employment of such counsel shall have been authorized in writing by the Authority, or (Y) the Authority, after due notice of the action, shall not have employed counsel reasonably satisfactory to such Indemnitee to have charge of such defense, in either of which events the reasonable fees and expenses of counsel for such Indemnitee shall be borne by the Authority. The Authority shall not be liable for any settlement of any such action effected without its consent. Nothing under this Section is intended to limit the Authority’s payment of the Obligations. (ii) The Authority assumes all risks of the acts or omissions of the Issuing and Paying Agent with respect to the use of the Letter of Credit ; provided that this assumption with respect to the Bank is not intended to and shall not preclude the Authority from pursuing such rights and remedies as it may have against the Issuing and Paying Agent under any other agreements. Neither the Bank nor any of its officers or directors shall be liable or responsible for ( A) the use of the proceeds of the Drawings or the Bank Note or the transactions contemplated hereby and by the Related Documents or for any acts or omissions of the Issuing and Paying Agent or the Dealer s, (B) the validity , sufficiency, or genuineness of any documents determined in good faith by the Bank to be valid , sufficient or
DRAFT--Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.
46 genuine, even if such documents shall , in fact, prove to be in any or all respects invalid, fraudulent, forged or insufficient , (C ) payments by the Bank against presentation of requests for Drawings for which the Bank in good faith has determined to be valid, sufficient or genuine and which subsequently are found not to comply with the terms of Letter of Credit, or ( D) any other circumstances whatsoever in making or failing to make payment hereunder ; provided that the Authority shall not be required to indemnify the Bank for any claims , losses, liabilities, costs or expenses to the extent, but only to the extent, caused by the gross negligence or willful misconduct of the Bank, as determined by a court of competent jurisdiction in a final and nonappealable judgment. (c) Payments. All amounts due under this Section shall be payable not later than thirty (30) days after demand therefor.
(d) Survival. The agreements in this Section shall survive the termination of this Agreement, the cancellation of the Letter of Credit and the repayment , satisfaction or discharge of all the other Obligations.
Section 7.04. Obligations Absolute . Payment obligations of the Authority under this Agreement shall be unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Agreement under all circumstances , including, without limitation , the following circumstances: (a) any lack of validity or enforceability of the Letter of Credit or any of the other Related Documents; (b) any amendment or waiver of or any consent to departure from all or any of the Related Documents (unless consented to in writing by the Bank) ; (c) the existence of any claim, set-off, defense (other than the defense of payment) or other right which the Authority may have at any time against the Issuing and Paying Agent or any other beneficiary, or any transferee, of the Letter of Credit (or any persons or entities for whom the Issuing and Paying Agent, any such beneficiary or any such transferee may be acting), the Bank, or any other person or entity, whether in connection with this Agreement , the transactions contemplated herein or in the Related Documents, or any unrelated transaction; (d) any statement or any other document presented under the Letter of Credit proving to be forged , fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; or (e) payment by the Bank under the Letter of Credit against presentation of a draft or certificate which does not comply with the terms of the Letter of Credit.
Section 7.05. Successors and Assigns.
(a) Successors and Assigns Generally. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that the Authority and the City may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of the Bank and the Bank may not assign its rights or obligations hereunder without the prior written consent of the Authority and the City, subject to the terms of Sections
7.05(b) and (c).
(b) Participations. The Bank may at any time, without the consent of, or notice to, the Authority, sell participations to any Person (other than a natural person or the
DRAFT--Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.
47 Authority or any of the Authority’s Affiliates) (each, a “Participant”) in all or a portion of the Bank’s rights and/or obligations under this Agreement; provided that (i) the Bank’s obligations under this Agreement and the Letter of Credit shall remain unchanged, (ii) the Bank shall remain solely responsible to the other parties hereto for the performance of such obligations, (iii) the Authority and the City shall continue to deal solely and directly with the Bank in connection with the Bank’s rights and obligations under this Agreement and the Letter of Credit, and (iv) the Authority’s and the City’s liability to any Participant shall not in any event exceed that l iability which the Authority or the City would owe to the Bank but for such participation. Any agreement or instrument pursuant to which the Bank sells such a participation shall provide that the Bank shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that the Bank will not, without the consent of the Participant, agree to any amendment, waiver or other modification that affects such Participant.
(c) Certain Pledges. The Bank may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement and the Related Documents to secure obligations of the Bank or an Affiliate of the Bank, including, without limitation, any pledge or assignment to secure obligations to a Federal Reserve Bank or any state or local government entity with respect to public deposits; provided that no such pledge or assignment shall release the Bank from any of its obligations hereunder or under the Letter of Credit or substitute any such pledgee or assignee for the Bank as a party hereto; provided, further, that the Authority shall not be obligated to pay any additional fees, Taxes, charges or other amounts as a result of such pledge or grant.
Section 7.06. Treatment of Certain Information; Confidentiality. The Bank agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its Affiliates and to its Related Parties (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential) , (b) to the extent required or requested by any regulatory authority purporting to have jurisdiction over such Person or its Related Parties (including any self -regulatory authority, such as the National Association of Insurance Commissioners), (c) to the extent required by applicable laws or regulations or by any subpoena or similar legal process , (d) to any other party hereto, (e) in connection with the exercise of any remedies hereunder or under any other Related Document or any action or proceeding relating to this Agreement or any other Related Document or the enforcement of rights hereunder or thereunder, (f) subject to an agreement containing provisions substantially the same as those of this Section, to (i) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights and obligations under this Agreement or (ii) any actual or prospective party (or its Related Parties) to any swap , derivative or other transaction under which payments are to be made by reference to the Authority or the City and their obligations, this Agreement or payments hereunder, (g) on a confidential basis to (i) any Rating A gency in connection with rating the Authority, the City or the credit facilities provided hereunder or (ii) the CUSIP Service Bureau or any similar agency in connection with the issuance and monitoring of CUSIP numbers or other market identifiers with respect to the credit facilities provided hereunder , (h) with the consent of the Authority or the City or (i) to the extent such Information (x) becomes publicly available other than as a result of a breach of this Section or (y) becomes available to the Bank or any of its
DRAFT--Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.
48 Affiliates on a nonconfidential basis from a source other than the Authority or the City. For purposes of this Section, “Information” means all information received from the Authority and the City relating to the Authority, the City or any of their respective businesses , other than any such information that is available to the Bank or the Issuing and Paying Agent on a nonconfidential basis prior to disclosure by the Authority and the City, provided that, in the case of information received from the Authority or the City after the date hereof, such information is clearly identified at the time of delivery as confidential. Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.
Section 7.07. Counterparts; Integration; Effectiveness. This Agreement may be executed in counterparts (and by different parties hereto in different counterparts) , each of which shall constitute an original, but all of which when taken together shall constitute a single contract.
This Agreement and the other Related Documents constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. Except as provided in Section
3.01, this Agreement shall become effective when it shall have been executed by the Bank and when the Bank shall have received counterparts hereof that , when taken together , bear the signatures of each of the other parties hereto . Delivery of an executed counterpart of a signature page of this Agreement by fax transmission or e -mail transmission (e .g. “pdf” or “tif”) shall be effective as delivery of a manually executed counterpart of this Agreement. Without limiting the foregoing, to the extent a manually executed counterpart is not specifically required to be delivered under the terms of any Related Document, upon the request of any party, such fax transmission or e-mail transmission shall be promptly followed by such manually executed counterpart.
Section 7.08. Survival of Representations and Warranties . All representations and warranties made hereunder and in any other Related Document or other document delivered pursuant hereto or thereto or in connection herewith or therewith shall survive the execution and delivery hereof and thereof. Such representations and warranties have been or will be relied upon by the Bank, regardless of any investigation made by the Bank or on its behalf and notwithstanding that the Bank may have had notice or knowledge of any Default at the time of any issuance of the Letter of Credit , or the making of any Advance hereunder , and shall continue in full force and effect as long as any Advance or any other Obligation hereunder shall remain unpaid or unsatisfied or the Letter of Credit shall remain outstanding.
Section 7.09. Severability. If any provision of this Agreement or the other Related Documents is held to be illegal , invalid or unenforceable , (a) the legality , validity and enforceability of the remaining provisions of this Agreement and the other Related Documents shall not be affected or impaired thereby and (b) the parties shall endeavor in good faith negotiations to replace the illegal, invalid or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the illegal, invalid or unenforceable provisions. The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
Section 7.10. Governing Law; Jurisdiction; Jury Trial. (a) THIS
AGREEMENT AND
THE OTHER RELATED DOCUMENTS AND ANY CLAIMS, CONTROVERSY, DISPUTE OR
DRAFT--Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.
49 CAUSE OF ACTION (WHETHER IN CONTRACT OR TORT OR OTHERWISE) BASED
UPON, ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER
RELATED DOCUMENT (EXCEPT, AS TO ANY OTHER RELATED DOCUMENT, AS
EXPRESSLY SET FORTH THEREIN) AND THE TRANSACTIONS CONTEMPLATED
HEREBY AND THEREBY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF CALIFORNIA.
(b) EACH PARTY HERETO CONSENTS TO THE JURISDICTION OF A
CALIFORNIA FEDERAL OR STATE COURT HAVING JURISDICTION OVER THE MATTER, SUBJECT TO THE FURTHER PROVISIONS OF SUBSECTIONS (c) AND (d) OF THIS SECTION.
(c) EACH PARTY HERETO WAIVES ITS RIGHT TO A JURY TRIAL OF
ANY AND ALL CLAIMS OR CAUSES OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT AND THE OTHER RELATED DOCUMENTS. IT IS HEREBY
ACKNOWLEDGED THAT THE WAIVER OF A JURY TRIAL IS A MATERIAL
INDUCEMENT FOR THE BANK TO EXTEND THE LETTER OF CREDIT AND HOLD
THE BANK NOTE AND THAT THE EXECUTION AND DELIVERY OF THIS
AGREEMENT BY THE AUTHORITY, THE CITY AND THE BANK IS MADE IN RELIANCE UPON SUCH WAIVER. EACH PARTY HERETO FURTHER
WARRANTS AND REPRESENTS THAT SUCH WAIVER HAS BEEN KNOWINGLY
AND VOLUNTARILY MADE FOLLOWING CONSULTATION WITH ITS
RESPECTIVE LEGAL COUNSEL.
(d) I F AND TO THE EXTENT THAT THE FOREGOING WAIVER OF THE
RIGHT TO JURY TRIAL IS UNENFORCEABLE FOR ANY REASON IN THE STATE
OF CALIFORNIA, EACH OF THE PARTIES HERETO HEREBY CONSENTS TO THE
ADJUDICATION OF ALL CLAIMS PURSUANT TO JUDICIAL REFERENCE AS PROVIDED IN CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 638, AND
THE JUDICIAL REFEREE SHALL BE EMPOWERED TO HEAR AND DETERMINE ALL ISSUES IN SUCH REFERENCE, WHETHER FACT OR LAW.
(e) The covenants and waivers made pursuant to this Section 7. 10 shall be irrevocable and unmodifiable, whether in writing or orally, and shall be applicable to any subsequent amendments, renewals, supplements or modifications of this Agreement.
Section 7.11. No Advisory or Fiduciary Relationship. In connection with all aspects of each transaction contemplated hereby (including in connection with any amendment , waiver or other modification hereof or of any other Related Document) , the Authority and the City acknowledge and agree, and acknowledges its Affiliates’ understanding, that: (a) (i) the services regarding this Agreement provided by the Bank and any Affiliate thereof are arm ’s-length commercial transactions between the Authority and the City, on the one hand, and the Bank and its Affiliates, on the other hand, (ii) the Authority and the City have consulted their own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate , and (iii) the Authority and the City are capable of evaluating, and understands and accepts, the terms, risks and conditions of the transactions contemplated hereby and by the other Related Documents ; (b) (i) the Bank and its Affiliates each is and has been acting solely as a principal and, except as expressly
DRAFT--Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.
50 agreed in writing by the relevant parties, has not been, is not, and will not be acting as an advisor, agent or fiduciary, for the Authority or the City, or any other Person and (ii) neither the Bank nor any of its Affiliates has any obligation to the Authority or the City with respect to the transactions contemplated hereby except those obligations expressly set forth herein and in the other Related Documents; and (c) the Bank and its Affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Authority and the City, and neither the Bank nor any of its Affiliates has any obligation to disclose any of such interests to the Authority or the City.
To the fullest extent permitted by law , the Authority and the City, hereby waive and release any claims that it may have against the Bank or any of its Affiliates with respect to any breach or alleged breach of agency or fiduciary duty in connection with any aspect of any transactions contemplated hereby.
Section 7.12. Electronic Execution of Certain Documents . The words “ execute,” “execution,” “signed,” “signature,” and words of like import in any Related Document (including waivers and consents) shall be deemed to include electronic signatures, the electronic matching of assignment terms and contract formations on electronic platforms approved by the Bank, or the keeping of records in electronic form , each of which shall be of the same legal effect , validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law , including the Federal Electronic Signatures in Global and National Commerce Act , the New York State Electronic Signatures and Records Act , or any other similar state laws based on the Uniform Electronic Transactions Act.
Section 7.13. USA PATRIOT Act Notice. The Bank hereby notifies the Authority and the City that pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107–56 (signed into law October 26, 2001)) (the “ Patriot Act”), it is required to obtain, verify and record information that identifies the Authority and the City, which information includes the name and address of the Authority and the City and other information that will allow the Bank to identify the Authority and the City in accordance with the Patriot Act. The Authority and the City shall, promptly following a request by the Bank, provide all such other documentation and information that the Bank requests in order to comply with its ongoing obligations under applicable “know your customer” and anti-money laundering rules and regulations, including the Patriot Act.
Section 7.14. Time of the Essence. Time is of the essence of the Related Documents.
Section 7.15. Further Assurances. From time to time upon the request of either party hereto, the other shall promptly and duly execute, acknowledge and deliver any and all such further instruments and documents as the requesting party may in its reasonable discretion deem necessary or desirable to conform this Agreement, and the other Related Documents, to carry out the purpose and intent hereof and thereof or to enable the requesting party to enforce any of its rights hereunder or thereunder. At any time, and from time to time, upon request by the Bank, the Authority and the City will, at the Authority’s and the City’s expense, correct any defect, error or omission which may be discovered in the form or content of any of the Related Documents . In addition , at any time, and from time to time , upon request by the Bank or the Issuing and Paying Agent , the Authority will, at the Authority’s expense, provide any and all further instruments, certificates and other documents as may, in the opinion of the Bank or the Issuing and Paying Agent, be necessary
DRAFT--Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.
51 or desirable in order to verify the Authority’s identity and background in a manner satisfactory to the Bank or the Issuing and Paying Agent, as the case may be.
Section 7.16. No Third-Party Rights. Nothing in this Agreement , whether express or implied, shall be construed to give to any Person other than the parties hereto any legal or equitable right, remedy or claim under or in respect of this Agreement , which is intended for the sole and exclusive benefit of the parties hereto.
Section 7.17. EMMA Postings. In the event the Authority or the City files with EMMA this Agreement, any Related Documents or any description of the material terms thereof or notice of any agreement to covenants, events of default, remedies, priority rights or other similar terms, either voluntarily or as required pursuant a continuing disclosure agreement or Rule 15c2-12 promulgated pursuant to the Securities and Exchange Act of 1934, as amended (the “Rule”) (each such posting, an “EMMA Posting”), the Authority and the City shall (i) provide the Bank with a copy of each EMMA Posting prior to submitting or posting on EMMA and (ii) shall not file or permit the filing of any EMMA Posting that includes Confidential Information. The Authority or the City acknowledge and agree that although the Bank may request review, edits or redactions of such materials prior to filing , the Bank is not responsible for the Authority’s or the City’ s or any other entity’s (including, but not limited to, any broker-dealer’s) compliance or noncompliance (or any claims, losses or liabilities arising therefrom) with any continuing disclosure agreement or any applicable securities or other laws, including, but not limited to, those relating to the Rule.
Section 7.18. Acknowledgement Regarding Any Supported QFCs. To the extent that the Related Documents provide support, through a guarantee or otherwise, for any Interest Rate Swap Agreement or any other agreement or instrument that is a QFC (such support, “QFC Credit Support”, and each such QFC, a “Supported QFC”), the parties acknowledge and agree as follows with respect to the resolution power of the Federal Deposit Insurance Corporation under the Federal Deposit Insurance Act and Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act (together with the regulations promulgated thereunder, the “U.S. Special Resolution Regimes”) in respect of such Supported QFC and QFC Credit Support (with the provisions below applicable notwithstanding that the Related Documents and any Supported QFC may in fact be stated to be governed by the laws of the State of New York and/or of the United States or any other state of the United States). In the event a Covered Entity that is party to a Supported QFC (each, a “Covered Party”) becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer of such Supported QFC and the benefit of such QFC Credit Support (and any interest and obligation in or under such Supported QFC and such QFC Credit Support, and any ri ghts in property securing such Supported QFC or such QFC Credit Support) from such Covered Party will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if the Supported QFC and such QFC Credit Support (and any such interest, obligation and rights in property) were governed by the laws of the United States or a state of the United States.
In the event a Covered Party or a BHC Act Affiliate of a Covered Party becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights under the Related Documents that might otherwise apply to such Supported QFC or any QFC Credit Support that may be exercised against such Covered Party are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if the Supported QFC and the Related Documents were governed by the laws of the United States or a state of the United States.
DRAFT--Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.
52 Section 7.19. Limited Liability of Authority and the City . The obligations of the Authority and the City under this Agreement, the Fee Agreement and the Bank Note shall not be deemed to constitute a debt or liability of the State of California or of any political subdivision thereof other than the Authority or the City or a pledge of the faith and credit of the State of California or of any political subdivision thereof, but shall be payable solely from the funds provided pursuant to the Issuing and Paying Agent Agreement and the Installment Purchase Contract. None of the State of California, any political subdivision thereof, the Authority or the City shall be obligated to pay any amount under this Agreement, the Fee Agreement or the Bank Note except from the Installment Payments and the other amounts provided pursuant to the Issuing and Paying Agent Agreement and neither the faith and credit nor the taxing power of the State of California or of any political subdivision thereof is pledged to the payment of any amount under this Agreement, the Fee Agreement or t he Bank Note. The execution and delivery of this Agreement, the Fee Agreement and the Bank Note shall not directly or indirectly or contingently obligate the State of California or any political subdivision thereof to levy or to pledge any form of taxation whatever therefor or to make any appropriation for their payment. Notwithstanding anything in this Agreement, the Fee Agreement or the Bank Note contained, the Authority and the City shall have no pecuniary liability under the Bank Note, this Agreement or the Fee Agreement except that which can be satisfied from the Installment Payments and the other amounts provided pursuant to the Issuing and Paying Agent Agreement, and the Authority and the City shall not be required to advance any moneys derived from any source other than the Installment Payments and the other amounts provided pursuant to the Issuing and Paying Agent Agreement for any of the purposes in this Agreement, the Fee Agreement or the Bank Note mentioned, whether for the payment of the Bank Note or any other amount under this Agreement or the Fee Agreement or for any other purpose of this Agreement, the Fee Agreement or the Bank Note. Nevertheless, the Authority and the City may, but shall not be required to, advance for any of the purposes hereof any funds of the Authority or the City which may be made available to it for such purposes.
Section 7.20. Waiver of Personal Liability . No member, officer, official, agent or employee of the Authority or the City shall be individually or personally liable for the payment of the Bank Note or any other amount under this Agreement or the Fee Agreement or be subject to any personal liability or accountability by reason of the execution and delivery of this Agreement, the Fee Agreement or the Bank Note; but nothing herein contained shall relieve any such member, officer, official, agent or employee of the Authority or the City from the perfor mance of any official duty provided by law or by this Agreement.
[SIGNATURE
PAGES FOLLOW]
DRAFT--Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.
Signature Page to Reimbursement Agreement
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the Effective Date.
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 Reimbursement 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 Reimbursement 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.
A-1
EXHIBIT A
FORM OF BANK NOTE
$[__________] Dated: [October __, 2026]
FOR VALUE RECEIVED, the undersigned, the CITY OF SAN JOSE FINANCING AUTHORITY (the “Authority”), HEREBY PROMISES TO PAY to the order of BANK OF AMERICA, N.A. (the “Bank”), (i) the principal sum of [__________] DOLLARS ($[__________]) or, if less, the aggregate unpaid principal amount of all Advances (as such term is defined in the Reimbursement Agreement hereinafter defined) made by the Bank to the Authority, payable at such times as are specified in the Reimbursement Agreement , and (ii) interest on the unpaid principal amount of each Advance made by the Bank, from the date of each such Advance until such principal amount is paid in full, at such interest rates, and payable at such times, as are specified in the Reimbursement Agreement; provided, however, all principal of, and all earned interest then accrued on , this Bank Note shall be fully and finally due and payable on the Amortization End Date (as defined in the Reimbursement Agreement) . All capitalized terms used herein and not defined herein shall have the meanings set forth in the Reimbursement Agreement.
Both principal and interest are payable in lawful money of the United States of America and in immediately available funds as specified in the Reimbursement Agreement. All payments and prepayments on the account of the principal of and interest on the Bank Note shall be recorded by the Bank on its books and records , which books and records shall , absent manifest error, be conclusive as to amounts due and owing by the Authority. Notwithstanding any other provision of this Bank Note, interest paid or becoming due hereunder shall in no event exceed the maximum rate permitted by applicable law.
This note is the Bank Note referred to in, and is entitled to the benefits of , the Reimbursement Agreement, dated as of [October 1, 2026] (as amended, restated or otherwise modified from time to time, the “Reimbursement Agreement”), among the Authority, the City of San José and the Bank and the Issuing and Paying Agent Agreement, dated as of [October 1, 2026] (as amended, restated or otherwise modified from time to time , the “ Issuing and Paying Agent Agreement ”), between the Authority and the Issuing and Paying Agent . The Reimbursement Agreement, among other things , provides for the making of Advances by the Bank to the Authority from time to time in an aggregate amount not to exceed at any time outstanding the U .S. dollar amount first above mentioned, the indebtedness of the Authority to the Bank resulting from each such Advance being evidenced by this Bank Note. This Bank Note is subject to mandatory prepayment by the Authority as provided in the Reimbursement Agreement.
THIS BANK NOTE SHALL BE CONSTRUED UNDER AND GOVERNED BY THE LAWS OF THE STATE OF CALIFORNIA.
DRAFT--Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.
A-2
This Bank Note is a limited obligation of the Authority and is payable as to both principal and interest solely from the amounts pledged by the Authority pursuant to the Issuing and Paying Agent Agreement and described below. Subject only to the provisions of the Issuing and Paying Agent Agreement permitting the application thereof for the purposes and on the terms and conditions set forth therein, the Authority, pursuant to the Issuing and Paying Agent Agreement, has granted, bargained, sold, released, conveyed, assigned, transferred and pledged, and granted a lien on and security interest in, to secure the payment of the principal of and the interest on this Bank Note, the payment of the related Payment Obligations, and the performance and observance of all the covenants and conditions set forth in the Reimbursement Agreement, for the benefit of the Bank, (i) all of the Installment Payments and (ii) all amounts held by the Issuing and Paying Agent under the Issuing and Paying Agent Agreement (except as provided in the Issuing and Paying Agent Agreement). Said pledge shall be perfected and be valid and binding from the date of execution and delivery of the Issuing and Paying Agent Agreement without any physical delivery thereof or further act. All capitalized terms used in this paragraph and not defined herein shall have the meanings set forth in the Issuing and Paying Agent Agreement.
It is hereby certified and recited that all acts, conditions and things required to exist, to happen and to be performed, precedent to and in the incurring of the indebtedness evidenced by this Bank Note and in the issuing of this Bank Note, do exist, have happened and have been performed in due time, form and manner, as required by the Constitution and statutes of the State of California, and that this Bank Note, is within every debt and other limit prescribed by the Constitution and the statutes of the State of California, and is not in excess of the amount permitted to be issued under the Issuing and Paying Agent Agreement or the laws of the State of California.
[S
IGNATURE PAGE FOLLOW]
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A-3
IN WITNESS WHEREOF, the Authority has caused this Bank Note to be signed in its name and this Bank Note to be dated the date and year first above written.
CITY OF SAN JOSE FINANCING
AUTHORITY
By:
Name: Maria Öberg
Title: Treasurer
DRAFT--Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.
B-1
EXHIBIT B
NOTICE OF NON-ISSUANCE INSTRUCTION
[Date]
U.S. Bank Trust Company, National Association,
as Issuing and Paying Agent
100 Wall Street, 20th Floor
New York, NY 10005
Attention: Global Corporate Trust – IPA Administration City of San José Financing Authority
200 East Santa Clara Street, 13th Floor
San José, CA 95113
Attention: Debt Management
Dear Sir or Madam:
Reference is made to (i) the Reimbursement Agreement, dated as of [October 1, 2026] (as amended, restated or otherwise modified from time to time, the “Reimbursement Agreement” ), among the City o f San José Financing Authority (the “ Authority”), the City of San José (the “City”) and Bank of America, N.A. (the “Bank”); and (ii) the Issuing and Paying Agent Agreement, dated as of [October 1, 2026] (as amended, restated or otherwise modified from time to time, the “ Issuing and Paying Agent Agreement ”), between the Authority and [__________], as Issuing and Paying Agent. All capitalized terms herein have the meanings ascribed thereto in the Reimbursement Agreement.
You are hereby notified that (a) [an Event of Default under the Reimbursement Agreement has occurred and is now continuing] -or- [one or more of the representations and warranties of the Authority or the City set forth in the Reimbursement Agreement, is/are no longer true and correct in all material respects]; and (b) upon receipt of this notice, (1) no new Series A Notes, as defined in the Reimbursement Agreement, shall be issued or authenticated upon delivery by the Bank to the Issuing and Paying Agent of a completed Annex G to the Letter of Credit , (2) the Available Amount of the Letter of Credit shall be [reduced][ permanently reduced] to the principal amount of Series A Notes currently outstanding on the date thereof and interest thereon , and shall be further [reduced][permanently reduced] following the maturity of any such Series A Notes, and (3) the Available Amount shall no longer be reinstated following payment by the Bank of any Drawings. A Non-Issuance Notice received by the Issuing and Paying Agent at or after 9:30 a.m. (New York City time), on any day on which Series A Notes are being issued shall be effective on the next succeeding day.
You are hereby instructed to cease issuing Series A Notes under the Issuing and Paying Agent Agreement until such time, if any, as we have notified you in writing that you may resume issuing Series A Notes.
DRAFT--Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.
B-2
IN WITNESS WHEREOF , the Bank has executed and delivered this Notice of Non- Issuance Instruction as of this __ day of __________, 20__.
Sincerely,
BANK OF AMERICA, N.A.
By:
Name:
Title:
cc: Barclays Capital Inc.
Morgan Stanley & Co. LLC
TD Financial Products LLC
Moody’s Investors Service, Inc.
S&P Global Ratings
DRAFT--Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.
C-1
4935-0838-0872.4
EXHIBIT C
FORM OF COMPLIANCE CERTIFICATE
Financial Statement Date: __________,
Bank of America, N.A.
333 South Hope Street, Suite 3820
CA9-193-38-01
Los Angeles, California 90071-1406
Attention: Greg Bailey and Lily Azhari
Ladies and Gentlemen:
Reference is made to that 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”).
The undersigned Authorized Officer hereby certifies as of the date hereof that he/she is the __________ of the City, and that, as such, he/she is authorized to execute and deliver this Certificate to the Bank on the behalf of the City, and that:
1. Attached hereto as Schedule 1 are the year -end audited financial statements required by Section 5.02(a)(i) of the Reimbursement Agreement for the fiscal year of the City ended as of the above date, together with the report and opinion of an independent certified public accountant required by such section.
2. The undersigned has reviewed and is familiar with the terms of the Reimbursement Agreement and has made, or has caused to be made under his/her supervision, a review of the transactions and condition (financial or otherwise) of the City during the accounting period covered by the attached financial statements.
3. A review of the activities of the City during such fiscal period has been made under the supervision of the undersigned with a view to determining whether during such fiscal period the Authority and the City performed and observed all their respective obligations under the Related Documents to which they are a party, and
[select one:]
[to the best knowledge of the undersigned during such fiscal period, the Authority and the City performed and observed each covenant and condition of the Related Documents applicable to it, and no Default or Event of Default has occurred and is continuing.] --or--
DRAFT--Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.
C-2
4935-0838-0872.4
[the following covenants or conditions have not been performed or observed and the following is a list of each such Default or Event of Default and its nature and status:]
4. The representations and warranties of the Authority and the City contained in Article IV of the Reimbursement Agreement are true and correct on and as of the date hereof, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they are true and correct as of such earlier date, and except that for purposes of this Certificate, the representations and warranties contained in Article IV of the Agreement shall be deemed to refer to the most recent statements furnished pursuant to Section 5.02(a)(i) of the Reimbursement Agreement, including the statements in connection with which this Certificate is delivered.
IN WITNESS WHEREOF, the undersigned has executed this Certificate as of __________ __, ____.
CITY
OF SAN JOSE
By:
Name:
Title:
DRAFT--Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.
APPENDIX I
[To be attached.]
DRAFT--Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.
Schedule I
SCHEDULE I
NOTICES
Bank, with respect to credit matters:
Bank of America, N.A.
333 South Hope Street, Suite 3820
CA9-193-38-01
Los Angeles, California 90071-1406
Attention: Greg Bailey
Telephone: (213) 621-7131
Email: [email protected]
With a copy to:
Bank of America, N.A.
333 South Hope Street, Suite 3820
Los Angeles, California 90071-1406
Attention: Lily Azhari
Telephone: (213) 345-3169
Email: [email protected]
and, with respect to Drawings under the Letter of Credit:
Bank of America, N.A.
1 Fleet Way
PA6-580-02-30
Scranton, Pennsylvania 18507
Attention: Letter of Credit Department
Telephone: (800) 370-7519, option 1
Facsimile: (800) 755-8743
Authority:
City of San José Financing Authority
200 East Santa Clara Street, 13th Floor
San José, California 95113
Attention: Debt Management
Telephone: (408) 535-7010
Email: [email protected]
DRAFT--Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.
Schedule I
City:
City of San José – Finance Department
200 East Santa Clara Street, 13th Floor
San José, California 95113
Attention: Debt Management
Telephone: (408) 535-7010
Email: [email protected]
Issuing and Paying Agent:
U.S. Bank Trust Company, National Association
100 Wall Street, 20th Floor
New York, NY 10005
Attention: Global Corporate Trust – IPA Administration Telephone: (646) 971-4954
Email: [email protected]
DRAFT--Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.