Agmt08 South Bayside System Authority AKA Silicon Valley Clean Water

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revolving loan fund program for the purpose of providing financing for the Project, inasmuch as the State Board has agreed to provide financing for the Project without requiring the security provisions and covenants contained in the Financing Agreement. A GREEMENT. In consideration of the foregoing and the material covenants hereinafter contained, the City and the Authority formally agree as follows: Section 1 . Defined Terms. All capitalized terms used in this First Amendment and not otherwise defined herein shall have the respective meanings given such terms in the Financing Agreement. Section 2. Amendment of Financing Agreement. The Financing Agreement is hereby amended by amending the defined terms uBonds 'Operation and Maintenance Costs" and "Parity Debt" set forth in Appendix A thereof, which terms shall read as follows: "Bonds" means any bonds, notes or other obligations issued by the Authority in accordance with the Joint Powers Agreement to provide financing for the Project which are expressly secured by SBSA Bond Payments, excluding any loan made to the Authority by the State Water Resources Control Board under its revolving loan fund program. "Operation and Maintenance Costs" means the reasonable and necessary costs paid or incurred by the City for maintaining and operating the Wastewater System, determined in accordance with generally accepted accounting principles, including but not limited to (a) all reasonable expenses of management and repair and other expenses necessary to maintain and preserve the Wastewater System in good repair and working order, (b) amounts payable for operation and maintenance under the Joint Powers Agreement, and (c) all administrative costs of the City that are charged directly or apportioned to the operation of the Wastewater System, such as salaries and wages of employees, overhead, taxes (if any) and insurance premiums. "Operating and Maintenance Costs" does not include (i) payments of debt service on bonds, notes or other obligations issued by the City with respect to the Wastewater System, (ii) payments made by the City under the Joint Powers Agreement in respect of debt service on notes, bonds or other obligations issued by the Authority to finance the project, (iii) depreciation, replacement and obsolescence charges or reserves therefor, and (iv) amortization of intangibles or other bookkeeping entries of a similar nature. "Parity Debt" means any bonds, notes, leases, installment sale agreements or other obligations of the City payable from and secured by a pledge of and lien upon any of the Net Revenues on a parity with the SBSA Bond Payments, entered into or issued under and in accordance with Section 8. The term "Parity Debt" does not include any obligations of the Authority which are payable to the California State Water Resources -2-