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7.1.F. - Page 34 <br /> inasmuch as the State Board has agreed to provide financing for the Project without <br /> requiring the security provisions and covenants contained in the Financing Agreement. <br /> AGREEMENT: <br /> In consideration of the foregoing and the material covenants hereinafter <br /> contained, the City and the Authority formally agree as follows: <br /> Section 1. Defined Terms. All capitalized terms used in this First Amendment <br /> and not otherwise defined herein shall have the respective meanings given such terms <br /> in the Financing Agreement. <br /> Section 2. Amendment of Financing Agreement. The Financing Agreement <br /> is hereby amended by amending the defined terms "Bonds," "Operation and <br /> Maintenance Costs" and "Parity Debt" set forth in Appendix A thereof, which terms shall <br /> read as follows: <br /> "Bonds" means any bonds, notes or other obligations issued by <br /> the Authority in accordance with the Joint Powers Agreement to provide <br /> financing for the Project, excluding any loan made to the Authority by the <br /> State Water Resources Control Board under its revolving loan fund <br /> program. <br /> "Operation and Maintenance Costs" means the reasonable and <br /> necessary costs paid or incurred by the City for maintaining and <br /> operating the Wastewater System, determined in accordance with <br /> generally accepted accounting principles, including but not limited to (a) <br /> all reasonable expenses of management and repair and other expenses <br /> necessary to maintain and preserve the Wastewater System in good <br /> repair and working order, (b) amounts payable for operation and <br /> maintenance under the Joint Powers Agreement, and (c) all <br /> administrative costs of the City that are charged directly or apportioned to <br /> the operation of the Wastewater System, such as salaries and wages of <br /> employees, overhead, taxes (if any) and insurance premiums. <br /> "Operating and Maintenance Costs" does not include (i) payments of debt <br /> service on bonds, notes or other obligations issued by the City with <br /> respect to the Wastewater System, (ii) payments made by the City under <br /> the Joint Powers Agreement in respect of debt service on notes, bonds or <br /> other obligations issued by the Authority to finance the project, (iii) <br /> depreciation, replacement and obsolescence charges or reserves <br /> therefor, and (iv) amortization of intangibles or other bookkeeping entries <br /> of a similar nature. <br /> "Parity Debt" means any bonds, notes, leases, installment sale <br /> agreements or other obligations of the City payable from and secured by <br /> a pledge of and lien upon any of the Net Revenues on a parity with the <br /> SBSA Bond Payments, entered into or issued under and in accordance <br /> with Section 8. The term "Parity Debt" does not include any obligations of <br /> the Authority which are payable to the California State Water Resources <br /> ATTY/AGR/2014/AMENDMENTS/AMEND NO. 1 FINANCING AGREEMENT WITH SBSA <br /> REV:01-17-14 PT <br /> Page 2 of 6 <br />