vyEPA
[Template Term Sheet - Public Systems]
WIFIA
PROGRAM
TEMPLATE TERM SHEET
SUMMARY
The following Template Term Sheet has been prepared by the U.S. Environmental Protection Agency
(EPA) for prospective public system borrowers that might obtain financing from the EPA's Water
Infrastructure Finance and Innovation Act (WIFIA) program. This Template Term Sheet is intended to
provide reference as to the potential terms and conditions that may be applicable in a WIFIA
transaction with public system borrowers, including the various options that the WIFIA program can
offer. The final terms and conditions of a transaction will take into account the specific credit, legal
and technical analyses relevant to the actual borrower and project.
THIS TEMPLATE TERM SHEET INCLUDES THE FOLLOWING SECTIONS:
• Parties to the WIFIA transaction
• Project description
• WIFIA loan amount
• Interest rate and payment dates
• Dedicated source of repayment
• Security and lien priority
• Key dates (e.g. projected substantial completion date; final maturity date)
• Prepayment
• Conditions precedent to effectiveness and disbursement of the WIFIA loan
• Representations and warranties
• Covenants
• Events of default and potential remedies
• Governing law
THIS TEMPLATE TERM SHEET IS NOT A CONTRACT OR AN OFFER TO ENTER INTO A CONTRACT. IT HAS NOT BEEN APPROVED BY
THE ENVIRONMENTAL PROTECTION AGENCY ("USEPA") AND DOES NOT INDICATE A COMMITMENT BY USEPA TO PARTICIPATE IN
ANY TRANSACTION OR TO BE BOUND IN ACCORDANCE WITH ANY TERM OR CONDITION SET FORTH HEREIN. ANY
REPRESENTATION TO THE CONTRARY IS VOID. THIS TEMPLATE TERM SHEET IS BEING PROVIDED FOR REFERENCE PURPOSES ONLY
AND IS SUBJECT TO CHANGE AT ANY TIME AT THE SOLE DISCRETION OF THE USEPA. IT MAY NOT BE RELIED UPON BY ANY PERSON
OR ENTITY. ONLY A DOCUMENT AS EXECUTED BY USEPA WILL CONTAIN THE TERMS THAT BIND IT.
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[Template Term Sheet - Public Systems]
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
[Date]
[Borrower name\
[Borrower address]
RE: WIFIA Loan Term Sheet for the [Project name\ (WIFIA Project No. [ ])
Ladies and Gentlemen:
This WIFIA Loan Term Sheet (this "Term Sheet") constitutes (a) the approval of the
United States Environmental Protection Agency, acting by and through the Administrator of the
Environmental Protection Agency (hereinafter, the "USEPA"), of the application for credit
assistance of the Borrower (as defined below) dated [ ] (the "Application") and (b) the
agreement of USEPA to provide financing for the above-referenced project (as further described
below, the "Project") in the form of a secured loan (the "WIFIA Loan"), pursuant to the Water
Infrastructure Finance and Innovation Act ("WIFIA"), § 5021 et seq. of Public Law 113-121 (as
amended by Public Law 114-94 and Public Law 114-322) (the "Act"), codified as 33 U.S.C. §§
3901-3914, subject in all respects to the terms and conditions contained herein and the execution
of the WIFIA loan agreement, to be entered into on or after the date hereof (the "WIFIA Loan
Agreement"), and the terms and conditions contained therein. Capitalized terms used but not
otherwise defined herein shall have the meanings ascribed to such terms in the [WIFIA Loan
Agreement]1.
USEPA's agreement to provide WIFIA credit assistance to the Project is based upon the
Application and the supplemental information and documents, including the base case financial
model, provided to USEPA. This Term Sheet is an agreement of USEPA only to the terms
specified herein, which may be modified or supplemented by USEPA in its discretion at any time
and from time to time during the course of its due diligence and credit approval process. In
addition, WIFIA credit assistance is subject in all respects to the execution of the WIFIA Loan
Agreement on terms and conditions acceptable to USEPA.
By executing this Term Sheet, the Borrower confirms its agreement to reimburse USEPA
for any and all fees and expenses that USEPA incurs for legal counsel, financial advice, and other
consultants in connection with the evaluation of the Project and the negotiation and preparation of
the WIFIA Loan Agreement and related documents, whether or not such agreement is ultimately
executed.
1 Reference to appropriate document to be adjusted if the term sheet is executed prior to execution of the WIFIA Loan
Agreement. Solely for purposes of this template, defined terms have been set out in Annex A for reference.
THIS TEMPLATE TERM SHEET IS NOT A CONTRACT OR AN OFFER TO ENTER INTO A CONTRACT. IT HAS NOT BEEN APPROVED BY
THE ENVIRONMENTAL PROTECTION AGENCY ("USEPA") AND DOES NOT INDICATE A COMMITMENT BY USEPA TO PARTICIPATE IN
ANY TRANSACTION OR TO BE BOUND IN ACCORDANCE WITH ANY TERM OR CONDITION SET FORTH HEREIN. ANY
REPRESENTATION TO THE CONTRARY IS VOID. THIS TEMPLATE TERM SHEET IS BEING PROVIDED FOR REFERENCE PURPOSES ONLY
AND IS SUBJECT TO CHANGE AT ANY TIME AT THE SOLE DISCRETION OF THE USEPA. IT MAY NOT BE RELIED UPON BY ANY PERSON
OR ENTITY. ONLY A DOCUMENT AS EXECUTED BY USEPA WILL CONTAIN THE TERMS THAT BIND IT.
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This Term Sheet shall be governed by the federal laws of the United States of America if
and to the extent such federal laws are applicable, and the internal laws of the State of [ ], if and
to the extent such federal laws are not applicable.
INDICATIVE TERMS OF THE WIFIA LOAN
WIFIA LENDER
United States Environmental Protection Agency, an agency of the
United States of America, acting by and through the
Administrator of the Environmental Protection Agency (the
"WIFIA Lender")
BORROWER
[Borrower name], a \type of entity] organized and existing under
[specify U.S. state or territory of organization] (the "Borrower").
PROJECT
The project consists of the [project description], located in
[,location of project] (the "Project").
WIFIA LOAN AMOUNT
A maximum principal amount (sum of disbursements) not to
exceed %[amount]\ provided that (a) the maximum principal
amount of the WIFIA Loan, together with the amount of any other
credit assistance provided under the Act, shall not exceed forty-
nine percent (49%) of reasonably anticipated Eligible Project
Costs, [and] (b) the total federal assistance for the Project,
including but not limited to the original principal amount of the
WIFIA Loan and all federal direct and indirect grants, shall not
exceed eighty percent (80%) of Total Project Costs[.][, and (c)
such amount does not include any interest that may be capitalized
in accordance with the WIFIA Loan Agreement and added to the
principal amount of the WIFIA Loan.]
INTEREST RATE;
PAYMENT DATES
The WIFIA Loan shall bear interest at a fixed rate, calculated by
adding one basis point (0.01%) to the rate of securities of a similar
maturity (based on the weighted-average life of the WIFIA Loan)
as published, on the execution date of the WIFIA Loan
Agreement, in the United States Treasury Bureau of Public Debt's
daily rate table for State and Local Government Series (SLGS)
securities, currently located on the Internet at
https://www.treasurydirect.gov/GA-SL/SLGS/selectSLGSDate.htm.
Interest shall accrue and be computed on the basis of a 360-day
year of twelve (12) thirty (30) day months, and will be
compounded semi-annually.
The WIFIA Loan shall also bear default interest at a rate of 200
basis points above the otherwise applicable interest rate, at such
THIS TEMPLATE TERM SHEET IS NOT A CONTRACT OR AN OFFER TO ENTER INTO A CONTRACT. IT HAS NOT BEEN APPROVED BY
THE ENVIRONMENTAL PROTECTION AGENCY ("USEPA") AND DOES NOT INDICATE A COMMITMENT BY USEPA TO PARTICIPATE IN
ANY TRANSACTION OR TO BE BOUND IN ACCORDANCE WITH ANY TERM OR CONDITION SET FORTH HEREIN. ANY
REPRESENTATION TO THE CONTRARY IS VOID. THIS TEMPLATE TERM SHEET IS BEING PROVIDED FOR REFERENCE PURPOSES ONLY
AND IS SUBJECT TO CHANGE AT ANY TIME AT THE SOLE DISCRETION OF THE USEPA. IT MAY NOT BE RELIED UPON BY ANY PERSON
OR ENTITY. ONLY A DOCUMENT AS EXECUTED BY USEPA WILL CONTAIN THE TERMS THAT BIND IT.
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times and upon such terms as [shall be] provided in the WIFIA
Loan Agreement.
Principal of the WIFIA Loan shall be repaid in [specify number]
[semi-][annual] installments on [[date] and] [dale] of each year,
beginning on [first principal payment date].
Interest shall be paid in arrears on [date] and [date] of each year,
beginning on [first interest payment date]2
[Subject to the terms and conditions of the WIFIA Loan
Agreement, no principal or interest shall be paid during the
capitalized interest period.]
DEDICATED SOURCE OF
REPAYMENT
The dedicated source of repayment for the WIFIA Loan shall be
[describe dedicated revenue source, e.g. system revenues]3
SECURITY AND LIEN
PRIORITY[; WIFIA
SPRINGING LIEN]4
The WIFIA Loan shall be secured by [description of pledged
collateral]. The debt obligation of the Borrower under the WIFIA
Loan shall be evidenced through the issuance by the Borrower of
the WIFIA bond5.
The Borrower's [dedicated revenue source] shall be deposited
into [designated revenue account] and applied in the following
order of priority: [describe flow of funds].
PROJECTED
SUBSTANTIAL
COMPLETION DATE
[Date that Project is expected to achieve substantial completion].
2 Debt service payment commencement date shall in no event be later than five (5) years after the Substantial
Completion Date of the Project (unless the Borrower is a state infrastructure financing authority, in which case such
date shall be no later than five (5) years after the date of initial disbursement of the WIFIA Loan).
3 Pursuant to the WIFIA statute (33 USC §3907(a)(3) and regulations (40 CFR 35.10045(a)(4)), this dedicated revenue
source should also secure the other project obligations of the Project.
4 If after discussions between the WIFIA Lender and the Borrower, the parties agree that the WIFIA Loan will be a
subordinate debt obligation the WIFIA Loan Agreement will require springing lien language as follows: "Upon the
occurrence of a Bankruptcy Related Event with respect to the Borrower, the WIFIA Loan shall be secured by a first
priority security interest in the \pledged collateral] and shall be pari passu with the Borrower's other senior
obligations, automatically and without the need for any notice to or from any Person, physical delivery, recordation
filing or further act."
5 The type of evidence of the Borrower's debt obligation may be adjusted depending on the Borrower's existing debt
structures and discussions with the WIFIA Lender, e.g. bond vs. promissory note vs. direct loan.
THIS TEMPLATE TERM SHEET IS NOT A CONTRACT OR AN OFFER TO ENTER INTO A CONTRACT. IT HAS NOT BEEN APPROVED BY
THE ENVIRONMENTAL PROTECTION AGENCY ("USEPA") AND DOES NOT INDICATE A COMMITMENT BY USEPA TO PARTICIPATE IN
ANY TRANSACTION OR TO BE BOUND IN ACCORDANCE WITH ANY TERM OR CONDITION SET FORTH HEREIN. ANY
REPRESENTATION TO THE CONTRARY IS VOID. THIS TEMPLATE TERM SHEET IS BEING PROVIDED FOR REFERENCE PURPOSES ONLY
AND IS SUBJECT TO CHANGE AT ANY TIME AT THE SOLE DISCRETION OF THE USEPA. IT MAY NOT BE RELIED UPON BY ANY PERSON
OR ENTITY. ONLY A DOCUMENT AS EXECUTED BY USEPA WILL CONTAIN THE TERMS THAT BIND IT.
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FINAL MATURITY DATE
[Date]; provided that the Final Maturity Date shall be no later than
the date that is thirty-five (35) years following the Substantial
Completion Date.6
PREPAYMENT
[The WIFIA Loan shall be subject to mandatory prepayment,
without prepayment premium, (a) upon delivery to the Borrower
by the WIFIA Lender of a Project Event of Default notice or (b)
from net loss insurance proceeds.]
The Borrower may prepay the WIFIA Loan in whole or in part, at
any time, without penalty or premium; provided that any such
prepayment shall be in a minimum principal amount of
$1,000,000 or any integral multiple of $1.00 in excess thereof, and
otherwise in accordance with the WIFIA Loan Agreement.
CONDITIONS
PRECEDENT TO
CLOSING
The WIFIA Loan Agreement shall include usual and customary
conditions precedent to effectiveness for loans of this nature or
that are otherwise appropriate in the judgment of the WIFIA
Lender, including, without limitation:
• Borrower's organization, power and authority, including
evidence of authorizing resolution or ordinance
• Copies of Borrower's existing indenture(s), principal
project contracts and related security instruments
• Governmental approvals, including necessary
construction/operating permits (as applicable),
compliance with the National Environmental Policy Act
of 1969 (as amended), procurement of Federal Employer
Identification Number and Data Universal Numbering
System ("DUNS") number and registration with federal
System for Award Management ("SAM")
• Borrower certificates (e.g. officer's, incumbency, non-
debarment) and report (e.g. estimated savings, benefits)
• Legal opinions
• Two final investment grade rating letters
• Base case financial model and Project budget, including
development of plan and identification of revenues to
operate, maintain and repair the Project over its useful life
• Sufficiency of committed source of funds
6 If the useful life of the Project is less than 35 years, the final maturity date may not be later than the useful life of the
Project. If the Borrower is a state infrastructure financing authority, the Final Maturity Date shall not be later than
35 years after the date on which WIFIA loan amounts are first disbursed.
THIS TEMPLATE TERM SHEET IS NOT A CONTRACT OR AN OFFER TO ENTER INTO A CONTRACT. IT HAS NOT BEEN APPROVED BY
THE ENVIRONMENTAL PROTECTION AGENCY ("USEPA") AND DOES NOT INDICATE A COMMITMENT BY USEPA TO PARTICIPATE IN
ANY TRANSACTION OR TO BE BOUND IN ACCORDANCE WITH ANY TERM OR CONDITION SET FORTH HEREIN. ANY
REPRESENTATION TO THE CONTRARY IS VOID. THIS TEMPLATE TERM SHEET IS BEING PROVIDED FOR REFERENCE PURPOSES ONLY
AND IS SUBJECT TO CHANGE AT ANY TIME AT THE SOLE DISCRETION OF THE USEPA. IT MAY NOT BE RELIED UPON BY ANY PERSON
OR ENTITY. ONLY A DOCUMENT AS EXECUTED BY USEPA WILL CONTAIN THE TERMS THAT BIND IT.
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• Compliance with maximum caps of WIFIA Loan
constituting no more than 49% of Eligible Project Costs
and total federal assistance constituting no more than 80%
of Total Project Costs
• Records of Eligible Project Costs incurred prior to closing
• Evidence of insurance
• Payment of fees
• True, correct and complete representations and warranties
CONDITIONS
PRECEDENT TO
DISBURSEMENT
The WIFIA Loan Agreement shall include usual and customary
conditions precedent to disbursement for loans of this nature or
that are otherwise appropriate in the judgment of the WIFIA
Lender, including, without limitation:
• Updated financial plan or model
• Copies of any additional indenture(s), principal project
contracts and related security instruments
• Governmental approvals necessary at disbursement date
• Aggregate disbursements not in excess of Eligible Project
Costs
• Sufficiency of committed source of funds
• No default or event of default
• Insurance in full force and effect
• True, correct and complete representations and warranties
• No Material Adverse Effect
• Disbursement request with required documentation
• Payment of fees
REPRESENTATIONS
~
The WIFIA Loan Agreement shall include usual and customary
representations and warranties for loans of this nature or that are
otherwise appropriate in the judgment of the WIFIA Lender,
including, without limitation:
• Borrower's organization, power and authority
• Due execution and enforceability of Borrower documents
• Non-contravention
• Consents and approvals
• Litigation
• Security and pledge
• No debarment
• Compliance with law, including the Office of Foreign
Assets Control of the United States Department of the
THIS TEMPLATE TERM SHEET IS NOT A CONTRACT OR AN OFFER TO ENTER INTO A CONTRACT. IT HAS NOT BEEN APPROVED BY
THE ENVIRONMENTAL PROTECTION AGENCY ("USEPA") AND DOES NOT INDICATE A COMMITMENT BY USEPA TO PARTICIPATE IN
ANY TRANSACTION OR TO BE BOUND IN ACCORDANCE WITH ANY TERM OR CONDITION SET FORTH HEREIN. ANY
REPRESENTATION TO THE CONTRARY IS VOID. THIS TEMPLATE TERM SHEET IS BEING PROVIDED FOR REFERENCE PURPOSES ONLY
AND IS SUBJECT TO CHANGE AT ANY TIME AT THE SOLE DISCRETION OF THE USEPA. IT MAY NOT BE RELIED UPON BY ANY PERSON
OR ENTITY. ONLY A DOCUMENT AS EXECUTED BY USEPA WILL CONTAIN THE TERMS THAT BIND IT.
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Treasury ("OFAC"), anti-corruption, anti-laundering,
securities and other federal requirements
• Credit ratings
• No defaults
• Principal project contracts
• Accuracy of representations and warranties and
information
• Environmental matters
• Sufficient rights and utilities
• Insurance
• Title; no liens
• Financial statements
• Taxes
• Sufficient funds
• Sovereign immunity
• No federal debt
• Operation and maintenance
COVENANTS
The WIFIA Loan Agreement shall include usual and customary
covenants for loans of this nature or that are otherwise appropriate
in the judgment of the WIFIA Lender, including, without
limitation:
• Use of proceeds
• Prosecution of work; federal verification requirements
• Operations and maintenance
• Insurance; loss proceeds
• Legal structure
• System accounts; permitted investments
• Rate covenant or debt service coverage ratio
• Compliance with law and federal requirements; SAM
registration; DUNS number; anti-money laundering;
OFAC
• Taxes
• Hedging
• Sovereign immunity
• Additional bonds/indebtedness tests
• Permitted debt; permitted liens
• No adverse amendments
• Restricted payments and transfers
• Sales, leases or assignments; mergers and acquisitions
• No defeasance of WIFIA bond
THIS TEMPLATE TERM SHEET IS NOT A CONTRACT OR AN OFFER TO ENTER INTO A CONTRACT. IT HAS NOT BEEN APPROVED BY
THE ENVIRONMENTAL PROTECTION AGENCY ("USEPA") AND DOES NOT INDICATE A COMMITMENT BY USEPA TO PARTICIPATE IN
ANY TRANSACTION OR TO BE BOUND IN ACCORDANCE WITH ANY TERM OR CONDITION SET FORTH HEREIN. ANY
REPRESENTATION TO THE CONTRARY IS VOID. THIS TEMPLATE TERM SHEET IS BEING PROVIDED FOR REFERENCE PURPOSES ONLY
AND IS SUBJECT TO CHANGE AT ANY TIME AT THE SOLE DISCRETION OF THE USEPA. IT MAY NOT BE RELIED UPON BY ANY PERSON
OR ENTITY. ONLY A DOCUMENT AS EXECUTED BY USEPA WILL CONTAIN THE TERMS THAT BIND IT.
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• Organizational documents; fiscal year
• Notices
• Other reporting requirements, including but not limited to:
o Updated financial model or plan
o Audited financial statements (accompanied by an
officer's certificate)
o Quarterly construction progress reports
o Borrower's report (e.g. estimated savings, jobs,
environmental benefits of Project)
EVENTS OF DEFAULT;
REMEDIES
The WIFIA Loan Agreement shall include usual and customary
events of default for loans of this nature or that are otherwise
appropriate in the judgment of the WIFIA Lender, including,
without limitation:
• Payment default
• Covenant default
• Misrepresentation default
• Cross-default/acceleration under the Borrower's other
financing documents
• Judgments
• Failure to maintain existence
• Occurrence of a Bankruptcy Related Event
• Invalidity of WIFIA loan documentation
• Development Default
• Cross-default under or termination of principal project
contracts
• Project abandonment or cessation of project operations
Remedies upon an Event of Default may include but are not
limited to the following:
• Suspension or termination of WIFIA Lender's obligations
to disburse WIFIA Loan amounts
• Cessation of permitted capitalized interest on the WIFIA
Loan
• Declaration of the unpaid principal amount of, and interest
accrued on, the WIFIA Loan and all fees and other
amounts payable under the WIFIA Loan Agreement to be
immediately due and payable
• Mandatory prepayment of the WIFIA Loan
• Application of default interest rate on the WIFIA Loan
• Suspension or debarment of the Borrower
THIS TEMPLATE TERM SHEET IS NOT A CONTRACT OR AN OFFER TO ENTER INTO A CONTRACT. IT HAS NOT BEEN APPROVED BY
THE ENVIRONMENTAL PROTECTION AGENCY ("USEPA") AND DOES NOT INDICATE A COMMITMENT BY USEPA TO PARTICIPATE IN
ANY TRANSACTION OR TO BE BOUND IN ACCORDANCE WITH ANY TERM OR CONDITION SET FORTH HEREIN. ANY
REPRESENTATION TO THE CONTRARY IS VOID. THIS TEMPLATE TERM SHEET IS BEING PROVIDED FOR REFERENCE PURPOSES ONLY
AND IS SUBJECT TO CHANGE AT ANY TIME AT THE SOLE DISCRETION OF THE USEPA. IT MAY NOT BE RELIED UPON BY ANY PERSON
OR ENTITY. ONLY A DOCUMENT AS EXECUTED BY USEPA WILL CONTAIN THE TERMS THAT BIND IT.
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• Right to institute any actions or proceedings at law or in
equity for the collection of any sums due and unpaid under
the WIFIA Loan Agreement
In addition, upon the occurrence of a Bankruptcy Related Event
relating to the Borrower, all obligations of the WIFIA Loan shall
automatically be terminated, and the outstanding balance of the
WIFIA Loan, all accrued interest, and all fees, costs, expenses,
indemnities and other amounts payable in connection with the
WIFIA Loan, shall automatically become immediately due and
payable, without presentment, demand, notice, declaration,
protest or other requirements of any kind, all of which will be
expressly waived.7
WIFIA LOAN
DOCUMENTATION
The WIFIA Loan shall be subject to the preparation, execution
and delivery of the WIFIA Loan Agreement and any other loan
documentation required by the WIFIA Lender in connection
therewith, in each case acceptable to the WIFIA Lender and the
Borrower.
GOVERNING LAW
Federal laws of the United States of America, if and to the extent
such federal laws are applicable, and the internal laws of the State
of [specify U.S. state or territory], if and to the extent such federal
laws are not applicable.
COUNTERPARTS
This Term Sheet, and any amendments, waivers, consents or
supplements hereto may be executed in any number of
counterparts and by the parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed
an original, but all such counterparts together shall constitute but
one and the same instrument. Signature pages may be detached
from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to
the same document.
7 If the WIFIA Loan is subordinate debt, remedies upon a Bankruptcy Related Event relating to the Borrower shall
include that the springing lien relating to a first priority security interest shall become automatically effective for the
WIFIA Loan and that the WIFIA Lender shall have the right to inspect records relating to transfers of funds to ensure
that the WIFIA Loan is being treated as a senior obligation in all respects, including relating to priority of payments.
THIS TEMPLATE TERM SHEET IS NOT A CONTRACT OR AN OFFER TO ENTER INTO A CONTRACT. IT HAS NOT BEEN APPROVED BY
THE ENVIRONMENTAL PROTECTION AGENCY ("USEPA") AND DOES NOT INDICATE A COMMITMENT BY USEPA TO PARTICIPATE IN
ANY TRANSACTION OR TO BE BOUND IN ACCORDANCE WITH ANY TERM OR CONDITION SET FORTH HEREIN. ANY
REPRESENTATION TO THE CONTRARY IS VOID. THIS TEMPLATE TERM SHEET IS BEING PROVIDED FOR REFERENCE PURPOSES ONLY
AND IS SUBJECT TO CHANGE AT ANY TIME AT THE SOLE DISCRETION OF THE USEPA. IT MAY NOT BE RELIED UPON BY ANY PERSON
OR ENTITY. ONLY A DOCUMENT AS EXECUTED BY USEPA WILL CONTAIN THE TERMS THAT BIND IT.
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ANNEX A
DEFINITIONS8
"Act" means the Water Infrastructure Finance and Innovation Act, as amended by Section 1445
of the Fixing America's Surface Transportation Act of 2015, as further amended by Section 5008
of the Water Infrastructure Improvements For the Nation Act of 2016 and as may be further
amended from time to time, and codified as 33 U.S.C. §§ 3901-3914.
"Bankruptcy Related Event" means, with respect to any Person, (a) an involuntary proceeding
shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, reorganization
or other relief in respect of such Person or any of its debts, or of a substantial part of the assets
thereof, under any insolvency laws, or (ii) the appointment of a receiver, trustee, liquidator,
custodian, sequestrator, conservator or similar official for such Person or for a substantial part of
the assets thereof and, in any case referred to in the foregoing subclauses (i) and (ii), such
proceeding or petition shall continue undismissed for sixty (60) days or an order or decree
approving or ordering any of the foregoing shall be entered; (b) such Person shall (i) apply for or
consent to the appointment of a receiver, trustee, liquidator, custodian, sequestrator, conservator
or similar official therefor or for a substantial part of the assets thereof, (ii) generally not be paying
its debts as they become due unless such debts are the subject of a bona fide dispute, or become
unable to pay its debts generally as they become due, (iii) solely with respect to the Borrower, fail
to make a payment of WIFIA debt service in accordance with the WIFIA Loan Agreement and
such failure is not cured within thirty (30) days following notification by the WIFIA Lender of
failure to make such payment, (iv) make a general assignment for the benefit of creditors, (v)
consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding
or petition with respect to it described in clause (a) of this definition, (vi) commence a voluntary
proceeding under any insolvency law, or file a voluntary petition seeking liquidation,
reorganization, an arrangement with creditors or an order for relief under any insolvency law, (vii)
file an answer admitting the material allegations of a petition filed against it in any proceeding
referred to in the foregoing subclauses (i) through (v), inclusive, of this clause (b), or (viii) take
any action for the purpose of effecting any of the foregoing, including seeking approval or
legislative enactment by any governmental authority to authorize commencement of a voluntary
proceeding under any insolvency law; (c) solely with respect to the Borrower, (i) the [trustee]
shall commence a process pursuant to which all or a substantial part of the [trust estate] may be
sold or otherwise disposed of in a public or private sale or disposition pursuant to a foreclosure of
the liens thereon securing the senior obligations of the Borrower, or (ii) the [trustee] shall
commence a process pursuant to which all or a substantial part of the [trust estate] may be sold or
otherwise disposed of pursuant to a sale or disposition of such trust estate] in lieu of foreclosure;
or (d) solely with respect to the Borrower, the [trustee] shall transfer, pursuant to directions issued
by the bondholders, funds on deposit in any of the system accounts of the Borrower upon the
occurrence and during the continuation of a System Event of Default under the WIFIA Loan
8 Solely for reference purposes for this template term sheet.
THIS TEMPLATE TERM SHEET IS NOT A CONTRACT OR AN OFFER TO ENTER INTO A CONTRACT. IT HAS NOT BEEN APPROVED BY
THE ENVIRONMENTAL PROTECTION AGENCY ("USEPA") AND DOES NOT INDICATE A COMMITMENT BY USEPA TO PARTICIPATE IN
ANY TRANSACTION OR TO BE BOUND IN ACCORDANCE WITH ANY TERM OR CONDITION SET FORTH HEREIN. ANY
REPRESENTATION TO THE CONTRARY IS VOID. THIS TEMPLATE TERM SHEET IS BEING PROVIDED FOR REFERENCE PURPOSES ONLY
AND IS SUBJECT TO CHANGE AT ANY TIME AT THE SOLE DISCRETION OF THE USEPA. IT MAY NOT BE RELIED UPON BY ANY PERSON
OR ENTITY. ONLY A DOCUMENT AS EXECUTED BY USEPA WILL CONTAIN THE TERMS THAT BIND IT.
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Agreement or an event of default under the Borrower's other financing documents for application
to the prepayment or repayment of any principal amount of the Borrower's senior obligations other
than in accordance with the provisions of such other financing documents.
"Development Default" means (a) the Borrower fails to diligently pursue the work related to the
Project or (b) the Borrower fails to achieve Substantial Completion of the Project within [specified
time period] following the projected substantial completion date of the Project.
"Eligible Project Costs" means amounts in the Project Budget approved by the WIFIA Lender,
which are paid by or for the account of the Borrower in connection with the Project (including, as
applicable, Project expenditures incurred prior to the receipt of WIFIA credit assistance),9 which
shall arise from the following:
(a) development-phase activities, including planning, feasibility analysis
(including any related analysis necessary to carry out an eligible project), revenue
forecasting, environmental review, permitting, preliminary engineering and design work
and other preconstruction activities;
(b) construction, reconstruction, rehabilitation, and replacement activities;
(c) the acquisition of real property or an interest in real property (including
water rights, land relating to the Project and improvements to land), environmental
mitigation (including acquisitions pursuant to Section 3905(8) of Title 33 of the United
States Code), construction contingencies, and acquisition of equipment; or
(d) capitalized interest (with respect to obligations of the Borrower other than
the WIFIA Loan) necessary to meet market requirements, reasonably required reserve
funds, capital issuance expenses, and other carrying costs during construction;
provided, that Eligible Project Costs must be consistent with all other applicable federal law,
including the Act.
"Governmental Authority" means any federal, state, provincial, county, city, town, village,
municipal or other government or governmental department, commission, council, court, board,
bureau, agency, authority or instrumentality (whether executive, legislative, judicial,
administrative or regulatory), of or within the United States of America or its territories or
possessions, including the State and its counties and municipalities, and their respective courts,
agencies, instrumentalities and regulatory bodies, or any entity that acts "on behalf of' any of the
foregoing, whether as an agency or authority of such body.
9 Inclusion of costs incurred before receipt of credit assistance will be determined on a case by case basis. In no event
will costs that are not federally eligible be included.
THIS TEMPLATE TERM SHEET IS NOT A CONTRACT OR AN OFFER TO ENTER INTO A CONTRACT. IT HAS NOT BEEN APPROVED BY
THE ENVIRONMENTAL PROTECTION AGENCY ("USEPA") AND DOES NOT INDICATE A COMMITMENT BY USEPA TO PARTICIPATE IN
ANY TRANSACTION OR TO BE BOUND IN ACCORDANCE WITH ANY TERM OR CONDITION SET FORTH HEREIN. ANY
REPRESENTATION TO THE CONTRARY IS VOID. THIS TEMPLATE TERM SHEET IS BEING PROVIDED FOR REFERENCE PURPOSES ONLY
AND IS SUBJECT TO CHANGE AT ANY TIME AT THE SOLE DISCRETION OF THE USEPA. IT MAY NOT BE RELIED UPON BY ANY PERSON
OR ENTITY. ONLY A DOCUMENT AS EXECUTED BY USEPA WILL CONTAIN THE TERMS THAT BIND IT.
WIFIA
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[Template Term Sheet - Public Systems]
"Person" means and includes an individual, a general or limited partnership, a joint venture, a
corporation, a limited liability company, a trust, an unincorporated organization and any
Governmental Authority.
"Substantial Completion" means, with respect to the Project, the stage at which the Project is
able to perform the functions for which the Project is designed.
"Substantial Completion Date" means the date on which the Borrower certifies to the WIFIA
Lender, with evidence satisfactory to the WIFIA Lender, that Substantial Completion has occurred.
"Total Project Costs" means (a) the costs paid or incurred or to be paid or incurred by the
Borrower in connection with or incidental to the acquisition, design, construction and equipping
of the Project, including legal, administrative, engineering, planning, design, insurance and costs
of issuance; (b) amounts, if any, required by the Borrower's indenture documents or the WIFIA
Loan documents to be paid into any fund or account upon the incurrence of the WIFIA Loan or
any senior obligations of the Borrower; (c) payments when due (whether at the maturity of
principal, the due date of interest, or upon optional or mandatory prepayment) during the
construction period of the Project in respect of any indebtedness of the Borrower or any credit
facility maintained by the Borrower, in each case in connection with the Project (other than the
WIFIA Loan); and (d) costs of equipment and supplies and initial working capital and reserves
required by the Borrower for the commencement of operation of the Project, including general
THIS TEMPLATE TERM SHEET IS NOT A CONTRACT OR AN OFFER TO ENTER INTO A CONTRACT. IT HAS NOT BEEN APPROVED BY
THE ENVIRONMENTAL PROTECTION AGENCY ("USEPA") AND DOES NOT INDICATE A COMMITMENT BY USEPA TO PARTICIPATE IN
ANY TRANSACTION OR TO BE BOUND IN ACCORDANCE WITH ANY TERM OR CONDITION SET FORTH HEREIN. ANY
REPRESENTATION TO THE CONTRARY IS VOID. THIS TEMPLATE TERM SHEET IS BEING PROVIDED FOR REFERENCE PURPOSES ONLY
AND IS SUBJECT TO CHANGE AT ANY TIME AT THE SOLE DISCRETION OF THE USEPA. IT MAY NOT BE RELIED UPON BY ANY PERSON
OR ENTITY. ONLY A DOCUMENT AS EXECUTED BY USEPA WILL CONTAIN THE TERMS THAT BIND IT.
WIFIA
-------
If the foregoing terms are acceptable, please countersign this letter in the space indicated
below.
Sincerely,
UNITED STATES ENVIRON TAL
PROTECTION AGENCY, act i and
through the Administrator of the id States
Environmental Protection Agenc
[Signature page to [Project name] — WIFIA Term Sheet]
THIS TEMPLATE TERM SHEET IS NOT A CONTRACT OR AN OFFER TO ENTER INTO A CONTRACT. IT HAS NOT BEEN APPROVED BY
THE ENVIRONMENTAL PROTECTION AGENCY ("USEPA") AND DOES NOT INDICATE A COMMITMENT BY USEPA TO PARTICIPATE IN
ANY TRANSACTION OR TO BE BOUND IN ACCORDANCE WITH ANY TERM OR CONDITION SET FORTH HEREIN. ANY
REPRESENTATION TO THE CONTRARY IS VOID. THIS TEMPLATE TERM SHEET IS BEING PROVIDED FOR REFERENCE PURPOSES ONLY
AND IS SUBJECT TO CHANGE AT ANY TIME AT THE SOLE DISCRETION OF THE USEPA. IT MAY NOT BE RELIED UPON BY ANY PERSON
OR ENTITY. ONLY A DOCUMENT AS EXECUTED BY USEPA WILL CONTAIN THE TERMS THAT BIND IT.
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ACKNOWLEDGED AND AGREED:
[BORROWER NAME], by its authorized representative
By:
Name:
Title:
0^
4>
[Signature page to [Project name] — WIFIA Term Sheet]
THIS TEMPLATE TERM SHEET IS NOT A CONTRACT OR AN OFFER TO ENTER INTO A CONTRACT. IT HAS NOT BEEN APPROVED BY
THE ENVIRONMENTAL PROTECTION AGENCY ("USEPA") AND DOES NOT INDICATE A COMMITMENT BY USEPA TO PARTICIPATE IN
ANY TRANSACTION OR TO BE BOUND IN ACCORDANCE WITH ANY TERM OR CONDITION SET FORTH HEREIN. ANY
REPRESENTATION TO THE CONTRARY IS VOID. THIS TEMPLATE TERM SHEET IS BEING PROVIDED FOR REFERENCE PURPOSES ONLY
AND IS SUBJECT TO CHANGE AT ANY TIME AT THE SOLE DISCRETION OF THE USEPA. IT MAY NOT BE RELIED UPON BY ANY PERSON
OR ENTITY. ONLY A DOCUMENT AS EXECUTED BY USEPA WILL CONTAIN THE TERMS THAT BIND IT.
13
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