CUSTODIAL AGREEMENT
This Custodial Agreement (this “Agreement”) is made and entered into as of [____], 2024, by and among City of Anaheim , a municipal corporation organized and existing under the Laws of the State of California (“Participant”), J. Aron & Company LLC, a New York limited liability company (“J. Aron”), and U.S. Bank Trust Company, National Association, a national banking association, (the “Custodian” and together with Participant and J. Aron, the “Parties”).
RECITALS:
WHEREAS, in connection with the issuance of one or more series of bonds by Southern California Public Power Authority, a joint powers authority organized pursuant to the laws of the State of California (the “ Issuer”), J. Aron, Issuer and Participant will enter into a series of Assignment Agreements (the “Assignment Agreements”, which definition shall include any new Assignment Agreement identified by J. Aron’s delivery of an updated Exhibit A consistent with Section 3(c)) with the sellers under certain power purchase agreements (each, individually, a “PPA Seller” and collectively the “PPA Sellers ”, which definitions shall include any new PPA Seller identified by J. Aron’s delivery of an updated Exhibit A consistent with Section 3(c)), pursuant to which Participant will partially assign its rights and obligations under the Assigned PPAs (as defined in the Clean Energy Purchase Contract s) to Issuer, who will assign the same rights and obligations to J. Aron; and
WHEREAS, the Parties propose to enter into this Agreement in order to administer payments to be received by the PPA Sellers under the Assigned PPAs.
NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the P arties hereto agree as follows:
Section 1. Defined Terms; Interpretation.
(a) Any capitalized term used herein and not otherwise defined herein (including in the recitals) shall have the meaning assigned to such term in that certain Clean Energy Purchase Contract, dated as of [____], 2024. The following additional terms, when used in this Agreement (including the preamble or recitals to this Agreement) and identified by the capitalization of the first letter thereof, have the respective meanings set forth below, unless the context otherwise requires:
“Assigned Prepay Quantity” has the meaning specified in the Clean Energy Purchase Contracts; provided that, if the same Assigned PPA is assigned for redelivery pursuant to more than one Clean Energy Purchase Contract, the Assigned Prepay Quantity for the purpose of this Agreement shall mean the sum of the Assigned Prepay Quantities for such Assigned PPA under the relevant Clean Energy Purchase Contracts.
“C
lean Energy Purchase Contracts ” mean (i) that certain Clean Energy Purchase Contract, dated as of [____], 2024, by and between Participant and the Issuer and (ii) any subsequent Clean Energy Purchase Contract entered into by and between Participant and the Issuer after the date hereof.
2 “Electricity Sale and Service Agreement s” mean (i) that certain Electricity Purchase, Sale and Service Agreement, dated as of [____], 2024, by and between Aron Energy Prepay 2 3 LLC and J. Aron and (ii) any subsequent Electricity Purchase, Sale and Service Agreement entered into by J. Aron with a Prepay LLC concurrently with the execution of a subsequent Clean Energy Purchase Contract.
“J . Aron Fixed Payment ” means, in respect of each Assigned PPA and each Month in the Assignment Period specified in the Assignment Agreement therefor , the amount set forth for such Assigned PPA and Month on Exhibit B hereto.
“J. Aron Prepay Payment ” means, in respect of each Monthly PPA Invoice, an amount determined by Participant as the lesser of (a) the J. Aron Fixed Payment for the relevant Month and Assigned PPA, and (b) the actual quantity of Assigned Product reflected in such Monthly PPA Invoice multiplied by the contract price then in effect for such Assigned Energy in the relevant Assigned PPA; provided that the J. Aron Prepay Payment shall be reduced by the face amount of any Receivable (as defined in the Electricity Sale and Service Agreement) that is delivered by J. Aron to the Custodian pursuant to Section 4(f); provided further that the J. Aron Prepay Payment will be determined without regard to any PPA Seller Payment Obligation. “J . Aron Resettlement Payment ” means, in respect of any Monthly PPA Invoice that (a) is delivered after the delivery of the Billing Statement under a Clean Energy Purchase Contract for such Month and (b) reflects a quantity of Product less than the Assigned Prepay Quantity was delivered in such Month under the relevant Assigned PPA, an amount equal to the product of (x) the Assigned Prepay Quantity for such Month minus the Assigned Quantity actually delivered under the relevant Assigned PPA, multiplied by (y) the applicable APC Contract Price. “M
aster Power Supply Agreement ” means (i) that certain Master Power Supply Agreement, dated as of [____], 2024, by and between Aron Energy Prepay 23 LLC and the Issuer and (ii) any subsequent Master Power Supply Agreement entered into by the Issuer with a Prepay LLC concurrently with the execution of a subsequent Clean Energy Purchase Contract. “M
onthly PPA Payment” means, in respect of any Monthly PPA Invoice, an amount determined by Participant as the total amount to be withdrawn from the Assigned PPA Payments Account by the Custodian and paid to the relevant PPA Seller in respect of such Monthly PPA Invoice, which shall equal the total net amount due to such PPA Seller in respect of such Monthly PPA Invoice and shall consist of the following components:
(a) The J. Aron Prepay Payment in respect of such Monthly PPA Invoice, which shall be deemed to be paid to such PPA Seller on behalf of J. Aron in respect of Assigned Energy for which such Monthly PPA Invoice is issued; and (b) the Participant Net Payment in respect of such Monthly PPA Invoice. “Monthly PPA Invoice” has the meaning specified in Section 3(a). “Participant Gross Payment” means, in respect of any Monthly PPA Invoice, an amount determined by Participant as the positive result, if any, of (a) all amounts owed to the relevant PPA Seller in respect of such Monthly PPA Invoice (determined without r egard to any 3 PPA Seller Payment Obligation), less (b) the J. Aron Prepay Payment in respect of such Monthly PPA Invoice; provided, for clarity, that the Participant Gross Payment in respect of any Monthly PPA Invoice (i) shall be deemed to be paid to the rel ated PPA Seller on behalf of J. Aron to the extent it relates to any Assigned PAYGO Energy and Assigned RECs, and (ii) otherwise shall be deemed to be paid to the relevant PPA Seller on behalf of Participant. “Participant Net Payment” means, in respect of any Monthly PPA Invoice, an amount determined by Participant as the positive result, if any, of (a) the Participant Gross Payment in respect of such Monthly PPA Invoice, less (b) the PPA Seller Payment Obligation in respect of such Monthly PPA Invoice.
“P
repay LLC ” means (i) Aron Energy Prepay 23 LLC and (ii) the “Seller” as defined in any subsequent Master Power Supply Agreement. “P PA Seller Payment Obligation” means, in respect of any Monthly PPA Invoice, an amount determined by Participant as the total amount owed by the relevant PPA Seller as reflected in such Monthly PPA Invoice, including any amounts that have been netted or set -off against amounts owed to such PPA Seller ; provided, for clarity, that the PPA Seller Payment Obligation shall be deemed to be paid to Participant and credited against the Participant Gross Payment thereby resulting in the Participant Net Payment required to be made by Participant hereunder.
“P PA Shortfall Lookback Summary” means, in respect of any Monthly PPA Invoice, a list that sets forth the following:
(i) which Months, if any, the relevant P PA Seller delivered less than the Assigned Prepay Quantity in the preceding 12 Months (any such Month, a “ Lookback Shortfall Month”) under the applicable Assigned PPA and whether such under -deliveries were a result of Force Majeure (as defined in the relevant Assigned PPA); (ii) the percentage of the Assigned Prepay Quantity actually delivered under the applicable Assigned PPA for each such Lookback Shortfall Month; and (iii) an indication of whether an increased Remarketing Fee (as defined in the Master Power Supply Agreement) is in effect consistent with the terms of Exhibits C and F of any Master Power Supply Agreement.
(b) Except where expressly provided otherwise, any reference herein to any agreement or document includes all amendments, supplements or restatements to and of such agreement or document as may occur from time to time in accordance with its terms and the terms hereof, and any reference to a party to any such agreement includes all successors and assigns of such party thereunder permitted by the terms hereof and thereof.
Section 2. Appointment of Custodian. Participant and J. Aron hereby appoint U.S.
Bank Trust Company, National Association as Custodian under this Agreement, with such rights and obligations as are specifically set forth herein. The Custodian hereby accepts such appointment under the terms and conditions set forth herein. 4 Section 3. Payment Instructions to Custodian; Assigned PPA Exhibits. (a) Monthly Statements . No later than five Business Days following receipt of an invoice from a PPA Seller in respect of any Month in an Assignment Period (a “Monthly PPA Invoice”), Participant shall deliver a statement (the “Monthly Statement”) showing each of the following in respect of such Monthly PPA Invoice (based on information provided by the relevant PPA Seller in the Monthly PPA Invoice) to each of the Parties hereto:
(i) the J. Aron Prepay Payment;
(ii) the J. Aron Resettlement Payment;
(iii) the Participant Gross Payment;
(iv) the PPA Seller Payment Obligation;
(v) the Participant Net Payment;
(vi) the Monthly PPA Payment;
(vii) the “Monthly PPA Invoice Payment Date”, which shall be the last Business Day on which payment on such Monthly PPA Invoice may be made before any incremental interest arises thereon or any default or breach arises under the relevant Assigned PPA; (viii) t he “Custodial Agreement Payment Date ,” which shall be one Business Day preceding such Monthly PPA Invoice Payment Date;
(ix) the PPA Shortfall Lookback Summary;
provided that Participant shall deliver an updated Monthly Statement in respect of such Monthly PPA Invoice within [seven] days following agreement by Participant and the applicable PPA Seller to an adjustment to such Monthly PPA Invoice to the extent that such adjustment is agreed upon prior to the date that is 10 days prior to such Monthly PPA Invoice Date; provided furthermore that the Parties acknowledge and agree that any adjustments agreed upon with respect to a Monthly PPA Invoice after the date specified in the foregoing provision shall be resolved solely between Participant and the relevant PPA Seller as provided in the Assignment Agreements. (b) Monthly Statement Verification. J. Aron shall notify Participant and the Custodian promptly, but in no event more than three (3) Business Days, following Participant’s delivery of a Monthly Statement if J. Aron believes any information included on such Monthly Statement is incorrect. Following receipt and verification of the information included in any such notice from J. Aron, Participant shall, to the extent appropriate and in consultation with J. Aron, issue a corrected Monthly Statement to all Parties. E ach Party hereto acknowledges and agrees that ( i) Participant is calculating the Monthly Statement s only for convenience of the Parties , (ii ) the purpose of this Agreement is solely to determine amounts to be paid by Participant and J. Aron under separate contracts, and (iii) none of Participant, J. Aron nor any other Party hereto will have any liability whatsoever with respect to any action taken or omitted by it under this Agreement (but without prejudice to an express payment obligation arising under another contract), including 5 as a result of any failure by Participant to timely or properly calculate any amount to be included in a Monthly Statement. Without limiting the foregoing, J. Aron acknowledges that it will have an opportunity to review and comment on each calculation and date included in a Monthly Statement (and shall be aware if such Monthly Statement has not been timely delivered) , and Participant will not be responsible in any way for any damages, costs, liabilities, loss of use or any other claims related to an insuff icient or late payment under an Assigned PPA as a result of any deficiencies in any Monthly Statement.
(c) Assigned PPAs Exhibit. Promptly following the execution of the initial Assignment Agreements, J. Aron shall deliver Exhibit A to the other Parties hereto, which will set forth certain information regarding the Assigned PPAs as of the date hereof , including, for each Assigned PPA, the Assignment Period, the PPA Seller thereunder and payment instructions for payments to the PPA Seller. Exhibit B to this Agreement sets forth the J. Aron Fixed Payments.
J. Aron shall deliver an updated Exhibit A or Exhibit B, as applicable, to each of the other Parties hereto to reflect any changes to the information set forth therein.
Section 4. A ssigned PPA Payments Account.
(a) Payments. With respect to certain payments required to be made by J. Aron and Participant to the PPA Sellers under the Assigned PPAs, there is hereby established the custodial account detailed below , bearing the Custodian’s Account No. [____] (the “Assigned PPA Payments Account”), and all payments made by J. Aron and Participant hereunder shall be wired to such Assigned PPA Payments Account:
[____]
ABA: [____]
FBO: [____]
Acct: [____]
FFC: [____]
(b) J. Aron Payments. J. Aron shall pay the J. Aron Prepay Payment and any J. Aron Resettlement Payment into the Assigned PPA Payments Account , in respect of each Monthly Invoice on or before the relevant Custodial Agreement Payment Date set forth in the related Monthly Statement. To the extent that (i) a J. Aron Prepay Payment and a J. Aron Resettlement Payment are due and (ii) J. Aron pays some portion of such amounts but less than the total amount due, J. Aron’s partial payment shall be applied first to the J. Aron Prepay Payment. In addition, the Custodian agrees to promptly notify Participant if it do es not receive the J. Aron Prepay Payment or any J. Aron Resettlement Payment from J. Aron on or before any Custodial Agreement Payment Date, and in such case Participant may elect in its sole discretion to make the J. Aron Prepay Payment to the Custodian for the purpose of satisfying the Monthly PPA Payment (in which case Participant will have a reimbursement claim against Issuer under [ Section 6.4] of the applicable Clean Energy Purchase Contract).
(c) P
articipant Payments. Participant shall pay the Participant Net Payment into the Assigned PPA Payments Account in respect of each Monthly Invoice on the relevant Custodial Agreement Payment Date set forth in the related Monthly Statement. 6 (d) Application of Payments. The Custodian shall withdraw and apply amounts received under this Section 4 as follows:
(i) any J. Aron Prepay Payment received from J. Aron (including any payment by Participant on J. Aron’s behalf pursuant to the last sentence of Section 4(b) ) and any Participant Net Payment received from Participant shall be applied to the payment of the Monthly PPA Payment to each PPA Seller in respect of each Monthly Invoice on the relevant Monthly PPA Invoice Payment Date pursuant to the payment instructions set forth on Exhibit A; provided that if amounts on deposit in the Assigned PPA Payment Account are insufficient to pay the entire Monthly PPA Payment on such date, the Custodian shall (i) withdraw and pay to such PPA Seller the entire remaining balance of the Assigned PPA Payment Account and (ii) notify such PPA Seller of the amounts received for such Month from each of J. Aron and Participant consistent with such PPA Seller’s contact information provided in Exhibit A ; provided furthermore that, if the J. Aron Prepay Payment for any Month exceeds the Monthly PPA Payment, then the excess of the J. Aron Prepay Payment over the Monthly PPA Payment shall be remitted to Participant on the relevant Monthly PPA Invoice Payment Date pursuant to Participant’s payment instructions set forth on Exhibit C; and
(ii) any J. Aron Resettlement Payment received from J. Aron shall be remitted to Participant on the relevant Monthly PPA Invoice Payment Date pursuant to Participant’s payment instructions set forth on Exhibit C.
(e) Amounts Held in Trust . Amounts deposited in the Assigned PPA Payments Account shall be held in trust for the benefit of Participant until applied as set forth in Section 4(d) and Section 12, as applicable, and there is hereby granted to Participant a lien on and security interest in the Assigned PPA Payments Account pending such application. The Custodian shall not be required to comply with any orders, demands, or other instructions from Participant with respect to the Assigned PPA Payments Account, including, without limitation, items presented for payment, or any order or instruction directing the disposition of funds or other assets held in or credited to the Assigned PPA Payments Account, and Participant agrees that prior to the termination of this Agreement in accordance with the terms hereof, it shall have no right to direct the disposition of funds or other assets held in or credited to the Assigned PPA Payments Account other than by issuing Monthly Statements, or to withdraw or otherwise obtain funds or other assets held in or credited to the Assigned PPA Payments Account, whether by order or instruction to the Custodian or otherwise.
(f) T
ransfer of Receivables. With respect to each Monthly Statement, to the extent J.
Aron has purchased Receivables (as defined in the Electricity Sale and Service Agreement ) for amounts owed by Participant for the Month to which such Monthly Statement relates, J. Aron may, at its option, (i) notify the Custodian that it intends to transfer all or any portion of such Receivables to the applicable PPA Seller, and (ii) reduce the J. Aron Prepay Payment in respect of the Monthly Invoice from such PPA Seller by t he face amount of such Receivables to be transferred. To the extent J. Aron has notified the Custodian of its intent to transfer any such Receivables to a PPA Seller, J. Aron shall cause such Receivables to be transferred to such PPA Seller not later than the relevant Custodial Agreement Payment Date.
7 Section 5. Custodian; Fees.
(a) Limitation on Liability . The Custodian shall have ( i) no liability under any agreement other than this Agreement and ( ii) no duty to inquire as to the provisions of any agreement other than this Agreement and the Assigned PPAs. The Custodian may rely upon and shall not be liable for acting or refraining from acting upon any written notice, document, instruction or request furnished to it hereunder in accordance with the terms hereof and believed by it to be genuine and to have been signed or presented by the proper Party or Parties. The Custodian shall be under no duty to inquire into or investigate the validity, accuracy or content of any such document, notice, instruction or request. The Custodian shall have no duty to solicit or compel any payments which may be due to it, or to take any action to compel J. Aron or Participant to make the deposits required under
Section 4. The Custodian shall not be liable for any action taken or omitted by it in good faith except to the extent that a court of competent jurisdiction determines that the Custodian’s gross negligence or willful misconduct was the primary cause of any loss to any other Party hereto. In connection with the execution of any of its powers or the performance of any of its duties hereunder, the Custodian may consult with counsel, accountants and other skilled persons selected and retained by it. The Custodian shall not be liable for anything done, suffered or omitted in good faith by it in accordance with the advice or opinion of any such counsel, accountants or other skilled persons, provided the Custodian exercised due care and good faith in the selection of such person. Any permissive right or power granted to the Custodian to take actions enumerated under this Agreement shall not be construed as a duty to act. In the event that the Custodian shall be uncertain as to its duties or rights hereunder or shall receive instructions, claims or demands from any Party hereto which, in its opinion, conflict with any of the provisions of this Agreement, it shall be entitled to refrain from taking any action and its sole obligation shall be to keep safely all property held in escrow until it shall be directed otherwise in writing by all of the other Parties hereto or by a final order or judgment of a court of competent jurisdiction. The Custodian may interplead all of the assets held hereunder into a court of competent jurisdiction or may seek a declaratory judgment with respect to certain circumstances, and thereafter be fully relieved from any and all liability or obligation with respect to such interpleaded assets or any action or non -action based on such declaratory judgment. Anything in this Agreement to the contrary notwithstanding, in no event shall the Custodian be liable for special, indirect, incidental or consequential damages, losses or penalties of any kind whatsoever (including but not limited to lost profits), regardless of the form of action . The Custodian may engage and act through agents and attorneys and shall not be liable for the misconduct or negligence of any such agent or attorney appointed with due care. The Custodian shall be responsible only for funds actually received by it for deposit into the Assigned PPA Payments Account, and the Custodian shall not be obliged to advance or risk its own funds to make any payments required hereunder. The Custodian shall have only those duties expressly set forth in this Agreement and no implied duties shall be read into this Agreement against the Custodian. The Parties hereto acknowledge and agree that the Custodian is not a fiduciary by virtue of accepting and carrying out its obligations under this Agreement and has not accepted any fiduciary duties, responsibilities or liabilities with respect to its services hereunder. The Custodian shall not be responsible for the perfection of any security interest granted hereunder.
(b) C
ustodian Fee. Purchaser agrees to (i) pay the Custodian reasonable compensation for the services to be rendered hereunder, which compensation shall be $[____] for each year that this Agreement is in effect, and (ii) pay or reimburse the Custodian upon request for all expenses, 8 disbursements and advances, including reasonable attorney’s fees and expenses, incurred or made by it in connection with the preparation, execution, performance, delivery, modification and termination of this Agreement. The parties hereto acknowledge that this provision shall survive the resignation or removal of the Custodian or the termination of this Agreement.
Section 6. Succession. The Custodian may resign and be discharged from its duties or obligations hereunder by giving not less than 45 days’ advance notice in writing of such resignation to the other Parties hereto specifying a date when such resignation shall take effect; and such resignation shall take effect upon the day specified in such notice unless a successor shall not have been appointed by the other Parties hereto on such date, in which event such resignation shall not take effect until a successor is appointed. The other Parties hereto shall use their commercially reasonable efforts to make such appointment in a timely fashion, provided that any custodian appointed in succession to the Custodian shall be a bank or trust company organized under the laws of any state or a national banking association and shall have capital stock, surplus and undivided earnings aggregating at least $50,000,000 and shall be a bank with trust powers or trust company willing and able to accept the office on reasonable and customary terms and authorized by law to perform all the duties imposed upon it by this Agreement. Any corporation or association into which the Custodian may be merged or converted or with which it may be consolidated, or any corporation or association to which all or substantially all of the Custodian’s corporate trust line of business may be transferred, shall be the Custodian under this Agreement without further act. Notwithstanding the foregoing, if no appointment of a successor Custodian shall be made pursuant to the foregoing provisions of this
Section 6 within 45 days after the Custodian has given
written notice to the other Parties of its resignation as provided in this Section 6, the Custodian may, in its sole discretion, apply to any court of competent jurisdiction to appoint a successor Custodian. Said court may thereupon, after such notice, if any, as such court may deem proper, appoint a successor Custodian.
Section 7. R
eimbursement. J. Aron and Participant agree, jointly and severally (subject to the second proviso of this Section 7), to reimburse the Custodian and its directors, officers, agents and employees for any and all loss, liability or expense (including the fees and expenses of in-house or outside counsel and experts and their staffs and all expense of document location, duplication and shipment) arising out of or in connection with (a) its acting as the Custodian under this Agreement, except to the extent that such loss, liability or expense is finally adjudicated to have been caused primarily by the negligence of the Custodian or such director, officer, agent or employee seeking reimbursement, or (b) its following any instructions or other directions from J. Aron or Participant, except to the extent that its following any such instruction or direction is expressly forbidden by the terms hereof; provided, however, that any amounts due under this
Section 7 (x) shall not duplicate any other amounts due under this Agreement, including without limitation amounts due under Section 13 hereof and (y) as between J. Aron and Participant (but without affecting the joint and several nature of the obligation to the Custodian), shall be paid equally by each of J. Aron and Participant (i.e., 50% by J. Aron and 50% by Participant) , subject to the second proviso of this Section 7; provided further, however, that, notwithstanding the joint and several nature of the obligations under this Section 7, any amounts due under clause (b) of this sentence resulting from instructions or directions that are not expressly provided for in this Agreement and are given to the Custodian by only one Party shall be the sole obligation of such Party. The Parties hereto acknowledge that this provision shall survive the resignation or removal of the Custodian or the termination of this Agreement.
9 Section 8. Taxpayer Identification Numbers; Tax Matters . J. Aron and Participant represent that their correct taxpayer identification numbers assigned by the Internal Revenue Service or any other taxing authority is set forth on the signature page hereof. Any tax returns or reports required to be prepared and filed in connection with the Assigned PPA Payments Account will be prepared and filed by Participant , and the Custodian shall have no responsibility for the preparation and/or filing of any tax return with respect to any income earned on the Assigned PPA Payments Account. In addition, any tax or other payments required to be made pursuant to such tax return or filing shall be paid by Participant . The Custodian shall have no responsibility for making such payment unless directed to do so by the appropriate authorized Party.
Section 9. N
otices. Any notice, demand, statement or request required or authorized by this Agreement to be given by one Party to another Party shall be in writing and shall be sent by courier, or personal delivery (including overnight delivery service) to each of the notice recipients and addresses specified in Exhibit C for the receiving Party. Any such notice, demand, or request shall be deemed to be given when actually received if delivered by courier or personal delivery (including overnight delivery service). Each Party shall have the right, upon 10 days’ prior written notice to the other Party, to change its list of notice recipients and addresses in Exhibit C. The Parties may mutually agree in writing at any time to deliver notices, demands or requests through alternate or additional methods, such as electronic mail; provided that the Parties acknowledge and agree that Monthly Statements and Billing Statements and any communications under this Agreement relating thereto may be delivered via electronic email to the email addresses specified for each Party in Exhibit C.
Section 10. Miscellaneous.
(a) Amendments. The provisions of this Agreement may be waived, altered, amended or supplemented, in whole or in part, only by a writing signed by all of the Parties hereto. (b) A ssignments . Neither this Agreement nor any right or interest hereunder may be assigned in whole or in part by any Party, except as provided in Section 5, without the prior written consent of the other Parties.
(c) G overning Law. This Agreement and the rights and duties of the Parties hereunder shall be governed by and construed, enforced, and performed in accordance with the laws of the State of California, without regard to any conflicts of law principle that would direct the application of the laws another jurisdiction; provided, however, that the authority of Participant to enter into and perform its obligations under this Agreement shall be determined in accordance with the laws of the State of California.
(d) J
urisdiction . Each Party hereto irrevocably waives any objection on the grounds of venue, forum non- conveniens or any similar grounds and irrevocably consents to service of process by mail or in any other manner permitted by applicable law and consents to the jurisdiction of (A) the courts of the State of California located in Los Angeles County and (B) the federal courts of the United States of America for the Central District of California. To the extent permitted by law, the Parties further hereby waiv e any right to a trial by jury with respect to any lawsuit or judicial proceeding arising or relating to this Agreement. 10 (e) Force Majeure. No Party to this Agreement shall be liable to any other Party hereto for losses due to, or if it is unable to perform its obligations under the terms of this Agreement because of, acts of God, fire, war, terrorism, epidemic, pandemic, floods, strikes, electrical outages, equipment or transmission failure, or other causes reasonably beyond its control ; provided that a party affected by any such event shall exercise commercially reasonable efforts to resume performance as quickly as possible.
(f) C ounterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. All signatures of the Parties to this Agreement may be transmitted by facsimile or by digital pdf transmission, and such facsimile or pdf will, for all purposes, be deemed to be the original signature of such Party whose signature it reproduces, and will be binding upon such Party.
The Parties agree that the electronic signature of a Party to this Agreement, including all acknowledgements, authorizations, directions, waivers and consents thereto (or any amendment or supplement thereto) shall be as valid as an original signature of such Party and shall be effective to bind such Party to this Agreement. The Parties agree that any electronically signed document (including this Agreement) shall be deemed (i) to be “ written” or “in writing,” (ii) to have been signed, and (iii) to constitute a record established and maintained in the ordinary course of business and an original written record when printed from electronic files. For purposes hereof, “electronic signature” means a manually signed original signature that is then transmitted by electronic means; “transmitted by electronic means” means sent in the form of a facsimile or sent via the Internet as a pdf (portable document format) or other replicating image attached to an e -mail message; and, “electronically signed document” means a document transmitted by electronic me ans and containing, or to which there is affixed, an electronic signature. Paper copies or “printouts”, if introduced as evidence in any judicial, arbitral, mediation or administrative proceeding, will be admissible as between the Parties to the same extent and under the same conditions as other original business records created and maintained in documentary form. Neither Party shall contest the admissibility of true and accurate copies of electronically signed documents on the basis of the best evidence rule or as not satisfying the business records exception to the hearsay rule. (g) N
o Obligation to Invest. The Custodian shall not be under any obligation to invest or pay interest on amounts held in the Assigned PPA Payments Account from time to time.
Section 11. C ompliance with Court Orders. In the event that any amount held by the Custodian hereunder shall be attached, garnished or levied upon by any court order, or the delivery thereof shall be stayed or enjoined by an order of a court, or any order, judgment or decree shall be made or entered by any court affecting the property deposited under this Agreement , the Custodian is hereby expressly authorized, in its sole discretion, to obey and comply with all writs, orders or decrees so entered or issued, which it is advised by legal counsel of its own choosing are binding upon it, whether with or without jurisdiction, and in the event that the Custodian obeys or complies with any such writ, order or decree it shall not be liable to any of the Parties hereto or to any other person, firm or corporation, by reason of such compliance notwithstanding that such writ, order or decree may be subsequently reversed, modified, annulled, set aside or vacated.
Section 12. T
erm; Winding Up. This Agreement will expire concurrently with the receipt of written notice from Participant, with a copy to the other Parties, that each Clean Energy Purchase Contract has terminated in accordance with its terms . Following the Custodian’s 11 payment of any Monthly PPA Payments due in respect of the final month of commodity deliveries prior to such a termination, any remaining balance in the Assigned PPA Payments Account shall be paid to Participant.
Section 13. Indemnification. J. Aron and Participant, jointly and severally, agree to protect, indemnify, defend and hold harmless, the Custodian, and affiliates, and each person who controls the Custodian (and each of their respective directors, officers, agents and employees) from and against all claims, losses, liabilities, actions, suits, costs, judgments and expenses (including, without limitation, court costs and reasonable attorneys’ fees) arising from its acting as Custodian hereunder (including, for the avoidance of doubt, any costs, expenses and reasonable attorneys’ fees incurred in enforcing any payment obligation of an indemnifying Party), except for any claim, damage or loss resulting primarily from the negligence of the Custodian; provided, however, that any amounts due under this
Section 13 (x) shall not duplicate any other amounts due under this Agreement, including without limitation amounts due under Section 7 hereof, and (y) as between J. Aron and Participant (but without affecting the joint and several nature of the obligation to the Custodian) shall be paid equally by each of the J. Aron and Participant (i.e., 50% by J. Aron and 50% by Participant). The obligations of this Section 13 shall survive any resignation or removal of the Custodian and the termination of this Agreement.
Section 14. Patriot Act. J. Aron and Participant acknowledge that the Custodian is subject to federal laws, including the Customer Identification Program (“CIP”) requirements under the USA PATRIOT Act and its implementing regulations, pursuant to which the Custodian must obtain, verify and record information that allows the Custodian to identify J. Aron and Participant.
Accordingly, prior to opening the Assigned PPA Payments Account described in Section 3 of this
Agreement, the Custodian will ask J. Aron and Participant to provide certain information including but not limited to name, physical address, tax identification number and other information that will help the Custodian identify and verify J. Aron’s and Participant’s identities, such as organizational documents, certificate of good standing, license to do business, or other pertinent identifying information. J. Aron and Participant agree that the Custodian cannot open any account hereunder unless and until the Custodian verifies J. Aron’s and Participant’s identities in accordance with its CIP.
[Signature Pages Follow]
Signature Page to Custodial Agreement
IN WITNE SS WHEREOF, the Parties hereto have caused this Agreement to be duly executed and delivered by their respective duly authorized officers as of the date first written above.
ATTEST:
By: ___________________________
Name: Theresa Bass
Title: City Clerk
CITY OF ANAHEIM
By: ___________________________
Name: Dukku Lee
Title: Public Utilities General Manager
Taxpayer ID:
_______________________
APPROVED AS TO FORM:
ANAHEIM CITY ATTORNEY’S OFFICE
By: ___________________________
Name: Andrew Lee
Title: Deputy City Attorney
J. ARON & COMPANY LLC
By: __________________________________
Name: ____________________________
Title: _____________________________
Taxpayer ID Number: ________________
U.S. BANK TRUST COMPANY, NATIONAL
ASSOCIATION
By: __________________________________
Name: ____________________________
Title: _____________________________
A-1
EXHIBIT A
ASSIGNED PPAS
Purchaser Assignment Agreements Issuer Assignment Agreements
1. Limited Assignment Agreement dated
[____], by and among Purchaser, the Issuer
and [PPA Seller]
Assigned PPA: [____]
Assignment Period:
PPA Seller:
PPA Seller Payment Instructions:
1. Limited Assignment Agreement dated
[____], by and among J. Aron, the Issuer
and [PPA Seller]
2. Limited Assignment Agreement dated
[____], by and among Purchaser, the Issuer
and [PPA Seller]
Assigned PPA: [____]
Assignment Period:
PPA Seller:
PPA Seller Payment Instructions:
2. Limited Assignment Agreement dated
[____], by and among J. Aron, the Issuer
and [PPA Seller]
B-1
EXHIBIT B
J. ARON FIXED PAYMENTS
Month J. Aron Fixed Payments
1/1/2025
2/1/2025
3/1/2025
4/1/2025
5/1/2025
6/1/2025
7/1/2025
8/1/2025
9/1/2025
10/1/2025
11/1/2025
12/1/2025
1/1/2026
2/1/2026
3/1/2026
4/1/2026
5/1/2026
6/1/2026
7/1/2026
8/1/2026
9/1/2026
10/1/2026
11/1/2026
12/1/2026
C-1
EXHIBIT C
NOTICE INFORMATION
J. Aron:
J. Aron & Company LLC
200 West Street
New York, NY 10282
Email: [email protected]
Participant:
Invoicing/Payments :
Scott Shimoda
201 S. Anaheim Blvd., Mail Stop 902
Anaheim, California 92805
(714) 765-5036 or (714) 765-5279
E-mail: [email protected]; [email protected]; [email protected]
Statements:
Scott Shimoda
201 S. Anaheim Blvd., Mail Stop 902
Anaheim, California 92805
(714) 765-5036 or (714) 765-5279
E-mail: [email protected]; [email protected]; [email protected]
General Notices:
City Clerk
200 S. Anaheim Blvd., Mail Stop 217
Anaheim, California 92805
(714) 765-5166
Copy to:
Public Utilities General Manager
201 S. Anaheim Blvd., Mail Stop 1101
Anaheim, California 92805
(714) 765-5173
Participant Wire Instructions:
[____]
[____]
[____]
C-2
Custodian:
U.S. Bank Trust Company, National Association
2 Concourse Parkway, Suite 800
Atlanta, Georgia 30328
Attention: Mark Hallam
Email: [email protected]