MILFORD SOLAR PHASE II
POWER SALES AGREEMENT
BETWEEN
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
AND
THE CITY OF BURBANK
Dated as of January 30, 2025
ATTACHMENT 4
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TABLE OF CONTENTS
i
1. PARTIES .................................................................................................................................. 1
2. RECITALS, CONSTRUCTION AND PRELIMINARY MATTERS ..................................... 1
3. AGREEMENT ......................................................................................................................... 3
4. DEFINITIONS ......................................................................................................................... 3
4.1 Agreement .................................................................................................................... 3
4.2 Effective Date .............................................................................................................. 3
4.3 Cost of Acquisition ...................................................................................................... 3
4.4 Power Costs ................................................................................................................. 6
4.5 Monthly Costs .............................................................................................................. 9
5. PURCHASE AND SALE OF FACILITY PRODUCTS AND THE OBLIGATIONS OF SCPPA AND THE PURCHASER ................................................................................... 10
5.1 Purchase and Sale of Facility Products ...................................................................... 10
5.2 Facility Products and Deliverables ............................................................................ 10
5.3 Project Manager ......................................................................................................... 11
5.4 Adoption of Annual Budget ....................................................................................... 11
5.5 Reports ....................................................................................................................... 12
5.6 Records and Accounts ................................................................................................ 12
5.7 Provide Information ................................................................................................... 12
5.8 Consultants and Advisors Available .......................................................................... 12
5.9 Deposit of Insurance Proceeds ................................................................................... 12
5.10 Compliance with Federal Tax Law Requirements ..................................................... 13
5.11 Liquidated Damages .................................................................................................. 13
6. COORDINATING COMMITTEE ......................................................................................... 13
6.1 Establishment and Authorization of the Coordinating Committee ............................ 13
6.2 Coordinating Committee ............................................................................................ 13
6.3 Coordinating Committee Responsibilities ................................................................. 15
6.4 Management Decisions and the Role of the Board of Directors ................................ 19
6.5 Periodic Audits ........................................................................................................... 21
6.6 Additional Committees .............................................................................................. 21
6.7 Change in Representative .......................................................................................... 22
6.8 Costs of Consultants .................................................................................................. 22
6.9 Representative’s Expenses ......................................................................................... 22
6.10 Inaction by Committee ............................................................................................... 22
6.11 Compliance with Indenture ........................................................................................ 22
6.12 Delegation .................................................................................................................. 23
7. CHARGES AND BILLINGS................................................................................................. 23
7.1 Monthly Costs ............................................................................................................ 23
7.2 Billing Statements ...................................................................................................... 23
7.3 Adoption of Alternative Billing Statement Procedures ............................................. 24
7.4 Disputed Monthly Billing Statement ......................................................................... 24
7.5 Reconciliation of Monthly Costs ............................................................................... 24
7.6 Other or Additional Cost Reconciliation Mechanisms .............................................. 25
7.7 Interest on Late Payments .......................................................................................... 25 ATTACHMENT 4
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(continued)
ii
7.8 Prepayment of Monthly Costs ................................................................................... 26
7.9 Costs or Expenses Incurred for Sole Benefit of Purchaser ........................................ 26
7.10 Credit or other Payment Attributable to a Specific Project Participant ..................... 26
8. UNCONDITIONAL PAYMENT OBLIGATIONS; RATE COVENANT;
AUTHORIZATIONS; CONFLICTS; LITIGATION ............................................................ 27
8.1 Unconditional Payment Obligation ............................................................................ 27
8.2 Source of Payments .................................................................................................... 27
8.3 Rate Covenant ............................................................................................................ 27
8.4 Authorizations ............................................................................................................ 27
8.5 Conflicts ..................................................................................................................... 27
8.6 Litigation .................................................................................................................... 28
9. OTHER TERMS AND SERVICES ....................................................................................... 28
9.1 Delivery Procedures ................................................................................................... 28
9.2 Other Services and Transmission From Point of Delivery ........................................ 28
9.3 Energy Services ......................................................................................................... 28
9.4 Actions Respecting Facility Purchase ........................................................................ 29
9.5 Balancing Agent, Pseudo-Tie, and Dynamic Scheduling .......................................... 29
9.6 Transfer of Environmental Attributes to Project Participants .................................... 29
10. FEDERAL TAX LAW REQUIREMENTS ........................................................................... 29
10.1 Purchaser to Provide Information Relevant to Compliance with Federal Tax Law Requirements ..................................................................................................... 29
10.2 Compliance with Federal Tax Law Requirements ..................................................... 30
10.3 SCPPA to Issue Rules, Procedures and Protocols ..................................................... 30
11. PROJECT SPECIFIC MATTERS AND PURCHASER RIGHTS AND
OBLIGATIONS UNDER PROJECT AGREEMENTS ......................................................... 30
11.1 Rights and Obligations under the Project Agreements .............................................. 30
11.2 Acquisition of the Facility by SCPPA ....................................................................... 31
12. PLEDGE OF PAYMENTS .................................................................................................... 31
13. ISSUANCE OF BONDS ........................................................................................................ 32
13.1 Issuance of Bonds ...................................................................................................... 32
13.2 Additional Bonds ....................................................................................................... 32
13.3 Refunding Bonds ....................................................................................................... 32
13.4 Opinions of Counsel .................................................................................................. 32
13.5 Redemption or Payment of Bonds ............................................................................. 32
13.6 Bond-Related Documents .......................................................................................... 32
14. EXCESS BOND PROCEEDS ............................................................................................... 33
15. NONPERFORMANCE AND PAYMENT DEFAULT ......................................................... 33
15.1 Nonperformance by Project Participants ................................................................... 33
15.2 Notice of Payment Default ......................................................................................... 33
15.3 Cured Payment Default .............................................................................................. 34
15.4 Failure to Cure Payment Default ............................................................................... 34 ATTACHMENT 4
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(continued)
iii
15.5 Treatment of the Defaulting Project Participant’s Project Rights and Obligations upon Payment Default .......................................................................... 344
15.6 Elimination or Reduction of Payment Obligations .................................................... 36
15.7 Use of Operating Reserve Account ............................................................................ 36
15.8 Use and Replenishment of Debt Service Reserve Fund(s) ........................................ 37
15.9 Step-Up Invoices ........................................................................................................ 37
15.10 Application of Moneys Received from Step-Up Invoices ......................................... 38
15.11 Application of Moneys Received from a Default Invoice ......................................... 38
15.12 Application of Moneys Received from Compliance Payments ................................. 39
15.13 Application of Moneys Received from Sale of Facility Products.............................. 39
15.14 Limitation on Cure Period ......................................................................................... 39
16. CHARACTER, CONTINUITY OF SERVICE ..................................................................... 39
16.1 Outages, Interruptions and Curtailment of Energy Deliveries ................................... 39
16.2 Outages, Interruptions and Curtailment of Energy from the Facility ........................ 40
16.3 Uncontrollable Forces ................................................................................................ 40
17. LIABILITY ............................................................................................................................ 41
17.1 Project Participants’ Obligations Several .................................................................. 41
17.2 No Liability of SCPPA or Purchaser, Their Directors, Officers, Etc ........................ 41
17.3 Extent of Exculpation; Enforcement of Rights .......................................................... 42
17.4 Determination or Enforcement of Rights ................................................................... 42
17.5 No Relief From Insurer’s Obligations ....................................................................... 42
17.6 No General Liability of SCPPA ................................................................................. 42
17.7 Indemnification of Purchaser ..................................................................................... 42
17.8 Indemnification of Project Manager .......................................................................... 43
17.9 Separate Legal Capacities .......................................................................................... 43
18. RESTRICTIONS ON DISPOSITION ................................................................................... 44
18.1 Limitations Concerning Private Use .......................................................................... 44
18.2 Restrictions on Elimination of Payment Obligations ................................................. 44
18.3 Restrictions on Disposition of Purchaser’s Entire System ......................................... 44
18.4 Successors and Assigns .............................................................................................. 45
19. REIMBURSEMENT OF PROJECT DEVELOPMENT COSTS .......................................... 45
20. EFFECTIVE DATE, TERM AND EXPIRATION ................................................................ 45
20.1 Effective Date; Execution in Counterparts ................................................................ 45
20.2 Termination Conditions ............................................................................................. 46
20.3 Expiration ................................................................................................................... 46
20.4 Transfer of SCPPA Interest ....................................................................................... 46
20.5 Termination of Agreement before Expiration Date ................................................... 46
20.6 Termination of Agreement based on Termination of Power Purchase Agreement…47
20.7 Final Distribution of Reserve Fund ............................................................................ 47
21. RELATIONSHIP TO AND COMPLIANCE WITH OTHER INSTRUMENTS .................. 47
21.1 Agreement Subject to the Indenture........................................................................... 47 ATTACHMENT 4
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(continued)
iv
21.2 Comply With the Indenture ....................................................................................... 47
22. SEVERABILITY ................................................................................................................... 48
23. CONDITIONS TO TERMINATION, AMENDMENT OR EXTENSION OF INTIAL TERM ....................................................................................................................... 48
23.1 No Adverse Effect ...................................................................................................... 48
23.2 Rights Among Project Participants ............................................................................ 48
23.3 Continuing Compliance with Federal Tax Law Requirements .................................. 48
24. REPRESENTATION AND GOVERNING LAW ................................................................. 48
25. ARBITRATION AND ATTORNEYS’ FEES ....................................................................... 49
26. NOTICES ............................................................................................................................... 49
27. AMENDMENTS .................................................................................................................... 49
APPENDICES
A – DEFINITIONS ..................................................................................................................... A-1 B – SCHEDULE OF PROJECT PARTICIPANTS ENTITLEMENT SHARES AND PROJECT COST SHARES .................................................................................................. B-1 C – OPINION OF COUNSEL TO PURCHASER ..................................................................... C-1 D – OPINION OF COUNSEL TO SCPPA ................................................................................. D-1 E – POWER PURCHASE AGREEMENT BETWEEN SOUTHERN CALIFORNIA
PUBLIC POWER AUTHORITY AND MILFORD SOLAR PHASE II LLC
DATED AS OF JANUARY 30, 2025 .................................................................................. E-1
ATTACHMENT 4
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1 MILFORD SOLAR PHASE II
POWER SALES AGREEMENT
1. PARTIES. This Milford Solar Phase II Power Sales Agreement (this “Agreement”), is dated for convenience as of the 30th day of January, 2025 , by and between the SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY, a joint powers agency and a public entity organized under the laws of the State of California, hereinafter designated as “SCPPA,” created under the provisions of the Act, and the CITY OF BURBANK, a California municipality. The CITY OF BURBANK is also periodically designated in this Agreement as “ Burbank” or as “Purchaser.” Burbank and SCPPA are also sometimes herein referred to individually as a “Party” and together as the “Parties.”
2. RECITALS, CONSTRUCTION AND PRELIMINARY MATTERS . The Recitals set forth herein and the facts, which follow, are incorporated into this Agreement by reference for all purposes. The facts and the circumstances of the Parties contained in the Recitals, among others, represent the background and framework for this Agreement , the aim and purpose of this Agreement, and the intent of the Parties with respect thereto. This Agreement has been reviewed by attorneys for both Parties and shall not be interpreted with reference to the rules of construction providing for construction against a Party responsible for drafting or creating a particular provision or section, but should instead be interpreted in a manner which broadly carries forth the goals and objectives of the Parties as expressed herein. References to “Sections,” “Annexes,” “Appendices,” “Schedules,” and “Exhibits” shall be to Sections, Annexes, Appendices, Schedules, and Exhibits, as the case may be, of this Agreement unless otherwise specifically provided. Section headings in this Agreement are in cluded herein for convenience of reference only and shall not constitute a part of this Agreement for any other purpose nor given any substantive effect. Any of the terms defined herein may, unless the context otherwise requires, be used in the singular o r the plural, depending on the reference.
The use herein of the word “include” or “including”, when following any general statement, term, or matter, shall not be construed to limit such statement, term , or matter to the specific items or matters set fort h immediately following such word or to similar items or matters, whether or not nonlimiting language (such as “without limitation” or “but not limited to” or words of similar import) is used with reference thereto, but rather shall be deemed to refer to all other items or matters that fall within the broadest possible scope of such general statement, term, or matter. This Agreement is made with reference to the following facts among others:
2.1 SCPPA was created pursuant to provisions contained in the Joint Exercise of Powers Act found in Chapter 5 of Division 7 of Title 1 of the Government Code of California, as amended from time to time (the “Act” as defined in Appendix A), by its members, which are municipalities and an irrigation district that supply, among other things, electrical energy in the State of California, for the purpose of jointly and cooperatively undertaking the planning, financing, development, acquisition, construction, imp rovement, betterment, operation, and maintenance of projects for the generation or transmission of electric energy, including the development and implementation of systems and frameworks for the acquisition and delivery of secure, long -term, reliable supplies of renewable electric energy.
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2 2.2 Pursuant to the terms of the Act, SCPPA has the power, for the purpose of promoting, maintaining, and operating electric generation and transmission, to plan, develop, contract for, finance, acquire, design, undertake, own, construct, manage, operate, maintain , and administer projects involving systems, methodologies, and programs for the acquisition, supply , procurement, and delivery of secure, long -term, reliable supplies of renewable electric energy, including solar energy, and to cause such projects to be planned, developed, contracted for, financed, acquired, designed, undertaken, constructed, managed, operated, maintained, and administered and to provide by agreement for the performance and carrying out of any such activities.
2.3 Purchaser is a chartered California municipality which provides electric energy to its citizens through its municipally-owned electric system. Purchaser is one of the parties to the SCPPA Joint Powers Agreement and is one of the eleven founding member municipalities which formed SCPPA. Since the initial creation of SCPPA pursuant to the Joint Powers Agreement, Purchaser ha s acted, in part, through SCPPA’s Board of Directors to carry out generation, transmission, and other projects through SCPPA.
2.4 In pursuit of potential renewable electric resources to address SCPPA member renewable energy needs, SCPPA issued a request for proposals to acquire renewable energy resources. As a result of the response by Longroad Energy Holdings, LLC on behalf of its affiliate, Milford Solar Phase II, LLC, SCPPA and three of its members, Purchaser , the City of Glendale, and LADWP (“Glendale”, “LADWP” and, together with Burbank, the “Project Participants” and each, individually, a “Project Participant”), have identified and investigated the feasibility of a facility consisting of a photovoltaic solar energy generation resource to be located in Beaver County, Utah. The solar project denominated as Milford Solar Phase II is to be developed by Milford Solar Phase II, LLC.
2.5 The Project Participants have participated with SCPPA in the negotiation of an agreement and related arrangements for purchase of the electric output of Milford Solar Phase II (the “Project” as defined in Appendix A) , and SCPPA is to enter into a Power Purchase Agreement , which is incorporated herein by this reference, with Milford Solar Phase II LLC providing for purchase of the electric output and associated rights, benefits, and credits from the Project and also providing certain acquisition alternatives under which SCPPA may have opportunities to purchase and acquire ownership of the Project.
2.6 Purchaser has a need for a percentage of the electric output and associated rights, benefits, and credits of the Project which comply with environmental and energy procurement laws, and has determined to enter into this Power Sales Agreement with SCPPA to purchase its Entitlement Share of Facility Products and associated rights, benefits, and credits of the Project from SCPPA.
2.7 Purchaser has a need for an economical, reliable source of Energy and Environmental Attributes to meet the requirements of environmental and energy procurement laws, including renewables portfolio standard ATTACHMENT 4
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3 requirements, as well as the demands of its current and/or future customers in an environmentally responsible manner and, as such, has determined that it is desirable to enter into this Agreement to purchase a share of the Energy and Environmental Attributes of the Facility from SCPPA.
3. AGREEMENT. For and in consideration of the premises and the mutual covenants and agreements hereinafter set forth, and in order to pay SCPPA for its costs of Purchaser’s share of the Facility Products, the Parties agree as herein set forth.
4. DEFINITIONS. Appendix A to this Agreement sets forth definitions of certain terms used in this Agreement. The terms defined in Appendix A and this Section 4, whether in the singular or plural, unless specifically provided otherwise, when used herein or in the Appendices hereto and initially capitalized, shall have the meaning ascribed thereto in said Appendix A or as set out below:
4.1 Agreement. This Agreement, as it may be amended, modified, or supplemented from time to time.
4.2 Effective Date. The date described in Section 20.1 hereof.
4.3 Cost of Acquisition . The Cost of Acquisition shall equal the sum of the amounts described in Sections 4.3.1 through 4.3.18. SCPPA shall apply, as a credit against the Cost of Acquisition, receipts, revenues , and other moneys received by it from the sale, if any, of surplus equipment, materials , and supplies, all if and to the extent held in or paid into (without duplication) Funds, and as provided for in the Indenture, as well as such other payments or amounts to be applied as a credit against the Cost of Acquisition pursuan t to this Agreement.
4.3.1 All costs associated with Acquisition of the Facility or the ownership interests therein and its resources pursuant to the Power Purchase Agreement and acquiring the Facility and its associated resources pursuant to any purchase option or pursuant to the purchase of rights and interests in and to any applicable credit agreement or any other agreement, including, if applicable, any other agreement relating to any security interest in the Facility or any assignment or consent to assignment, including , the purchase of the Facility pursuant to any provisions in any of the Power Purchase and Security Agreements, including without limitation the following costs, as applicable: (i) the cost of acquiring the Facility pursuant to the Power Purchase and Security Agreements, (ii) the cost of planning, designing, acquiring, constructing, mitigating impacts, installing, and developing the Project including any Capital Improvements, ( iii) the cost of th e exercise of cure rights or enforcement of SCPPA’s rights with respect to any defaults by the Power Purchase Provider or any other counterparty under any agreements, deeds of trust, leases or other instruments relating to or affecting the Project, ( iv) the cost, where applicable, of contracting for and facilitating the delivery of the output of the ATTACHMENT 4
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4 Project at the prescribed Point of Delivery o r other prescribed location, (v) the cost, where applicable, of placing the Project into operation, concluding, terminating and decommissioning (as applicable) the Project, obtaining governmental approvals, certificates, permits, assurances, entitlements and licenses relating to the Project, including, where necessa ry, environmental entitlements, clearances or credits, heretofore or hereafte r paid or incurred by SCPPA, (v i) all costs, expenses, obligations and liabilities associated with exercising all performance rights, options, benefits, entitlements, duties, liabilities and obligations under the Project Agreements, ( vii) to the extent deemed appropriate by the Coordinating Committee , the cost of procurement of rights associated with interconnection,
transmission, dispatching, scheduling, storage (if any) and delivery of energy and for otherwise facilitating the sale, disposition, storage (if any), movement, taking and accounting for energy (including planning an d design costs) and ( viii) the cost of those measures taken for the benefit of, and in connection with, the Project that the Coordinating Committee determines shall be included within this Section 4.3.1.
4.3.2 All costs and expenses for investigation and development of the Project, for performance studies, for feasibility studies, economic studies, and meteorological modeling and planning, for
examination of legal, environmental, and regulatory issues and for securing of legal, environmental or regulatory approvals, services for energy cost modeling, project modeling or projections, economic analyses, diurnal, barometric, and meteorological forecasts and weather analyses, as well as costs for land, land rights, land options, resources, facilities, regulatory developments, geographic, diurnal, barometric and meteorological investigation and analysis, and, if applicable, engineering, consultants, experts’ fees, contractors’ fees, processing fees, labor, materials, equipment, utility services and supplies, and legal fees and financing costs relating to and in connection with the Project.
4.3.3 The costs and expenses incurred in the issuance and sale of bonds, notes, certificates of participation, commercial paper or other evidences of indebtedness (tax-exempt or taxable) which may from time to time be issued, the proceeds of which will have been used or will be required to be applied to one or more purposes for which Bonds could be issued, including, without limitation, legal, accounting, engineering, consulting, financing, technical, fiscal agent and underwriting costs, fees and expense s, bond d iscount, insurance, rating agency fees, and all other costs and expenses incurred in connection with the authorization, sale and issuance of the Bonds.
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5 4.3.4 Interest accruing in whole or in part on Bonds for such period as SCPPA may reasonably determine to be necessary in accordance with the provisions of the Indenture.
4.3.5 To the extent not included in Power Costs, the cost of any administrative, regulatory or judicial proceeding or any litigation associated with the Power Purchase and Security Agreements or other Project Agreement, or any aspect of the operation, management or administration of the Project or in connection therewith.
4.3.6 To the extent not included in Power Costs, all costs incurred by SCPPA related to the acquisition of resources, agreements, facilities and supplies for solar energy acquisition, procurement, interconnection, transmission, sale, dispatching, scheduling, movement and delivery and all other incidental costs necessary for and in connection with the Project.
4.3.7 Training and testing costs which are properly allocable to the cost of acquisition and development of the Project.
4.3.8 All costs of insurance, if any, applicable to the development of and in connection with the Project.
4.3.9 All costs relating to injury or damage claims or judgments paid by SCPPA in connection with the acquisition, development , or implementation of the Project, less proceeds of insurance, if any.
4.3.10 To the extent not included in Power Costs, legally required or permitted federal, state, and local taxes relating to the Project.
4.3.11 All other costs incurred by SCPPA and properly allocable to the planning, design, acquisition , and development of the Project, including, without limitation, all legal fees relating to the Project (including, but not limited to, legal fees incurred by SCPPA in the enforcement of any provision or provisions of the Project Agreements).
4.3.12 The working capital requirements and reserves in such amounts as shall be required during development of the Project and for placing the Project in operation as deemed reasonably necessary by the Board of Directors, and as may be provided or required in th e Indenture, and such additional amounts of working capital and reserves, as may be established pursuant to the Indenture.
4.3.13 Interest accrued in whole or in part on Bonds prior to and during development of the Project or during any time period as SCPPA may reasonably determine necessary for placing the Project or any ATTACHMENT 4
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6 component thereof in operation in accordance with the provisions of the Indenture.
4.3.14 The deposit or deposits from the proceeds of Bonds issued to finance such costs in any Fund established pursuan t to the Indenture to meet the Debt Service reserve requirements for the Bonds.
4.3.15 Without duplication with respect to amounts otherwise provided in this Section 4.3, the deposit or deposits from the proceeds of Bonds issued to finance such costs in any other Funds established pursuant to the Indenture which deposit or deposits are required or permitted by the Indenture.
4.3.16 The payment of principal, premium, if any, and interest when due (whether at the maturity of principal or at the due date of interest or upon redemption) of any note or other evidence of indebtedness, if any should exist, which is issued in anticipation of Bonds for the purpose of financing the Cost of Acquisition.
4.3.17 All costs required to be paid to the Project Manager pursuant to any applicable agreement for project management which are applied or are to be applied thereunder to the payment of the Cost of Acquisition.
4.3.18 Without duplication, all other costs (including incidental financing costs and the costs of issuance of Bonds) financed by the issuance of Bonds (i) pursuant to Section 13 of this Agreement, (ii) for procurement of rights associated with the acquisition, p roduction, generation, transmission, interconnecting, balancing, shaping, firming, and delivery and for otherwise facilitating the dispatching, scheduling, disposition, movement, and taking and accounting for Facility Products (including planning and design costs) relating to, or for the benefit of, the Project that the Board of Directors reasonably determines shall be included within this Section 4.3.18, (iii) for the acquisition of the Facility or the rights and interests under any of the Power Purchase and Security Agreements; and (iv) for any amounts required to be paid pursuant to section 148 of the Internal Revenue Code.
4.4 Power Costs. All of SCPPA’s costs to the extent not paid from the proceeds of Bonds, certificates of participation, commercial paper, notes , or other evidences of indebtedness issued in anticipation of Bonds, resulting from SCPPA’s contracting for, providing for, accommodating, acquiring, and facilitating the Project, and from its administration, ownership, operation and maintenance of, and renewal, replacement, and replenishment of any facility, service, or other element or component of the Project, including costs arising under any of the Power Purchase and Security Agreements or other Project Agreements. SCPPA shall apply, as a credit against Power Costs, any receipts, ATTACHMENT 4
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7 revenues, and other moneys received by SCPPA from surplus equipment, materials, supplies, or assets relating to the Project sold prior to the date of Commercial Operation for the benefit of SCPPA (not otherwise applied as a credit against the Cost of Acquis ition as provided in Section 4.3 ), as well as such other amounts to be applied as a credit against Power Costs pursuant to this Agreement or the Indenture. The term “Power Costs” shall consist of, as applicable (i) an Operating cost component (described in Section 4.4.1), (ii) a Supplementary Services cost component to the extent SCPPA incurs such costs (described in Section 4.4.2), (iii) a Reserve Fund cost component (described in Section 4.4.3), (iv) an Indenture cost component (de scribed in Section 4.4.4), and (v) a Power Purchase and Security Agreements cost component (described in Section 4.4.5), and shall include, but not be limited to, the items of cost and expense referred to in the Power Purchase and Security Agreements and t his Section 4.4 that a re accrued or paid by SCPPA during each Month of each Power Supply Year. In the event any Power Supply Year shall consist of fewer than twelve Months, the fr action set forth in Sections 4.4.1 and 4.4.4(c) shall be adjusted accordingly and, in the event of any revision of the Annual Budget after the commencement of any Power Supply Year, the amount determined pursuant to said Sections shall be appropriately adjusted so that any increase or decrease in the portion of the Annual Budget applicable to said Sect ions shall be evenly apportioned over the remaining Months of such Power Supply Year.
4.4.1 The Operating cost component of Power Costs for each Month shall, as applicable, consist of: one -twelfth of the costs of all Operating Work, operating expenses, and all costs relat ed to contracting for, providing for, managing, administering, producing, procuring, transporting , and delivering of the Facility Products during such Power Supply Year, including, but not limited to (i) ordinary operation and maintenance costs (including any Operating Insurance premiums and Taxes and any other operation and maint enance costs payable by SCPPA under the Power Purchase Agreement), costs of repairs, replacements,
replenishment, reconstitution, and reconstruction of the Project (that are not included in any Cost of Acquisition), administrative and general costs, legal fees, costs relating to litigation (including disbursements and other amounts paid as a result of such litigation), insurance cos ts (including amounts to fund any self -insurance program), overhead costs, Taxes required to be paid by SCPPA with respect to the Project, and any other costs payable by SCPPA in connection with Facility Products, (ii) all expenses incurred in enforcing the Power Purchase Agreement and other Power
Purchase and Security Agreements and the other Project
Agreements and the expenses of enforcing the applicable covenants and provisions of the easements, estates and other interests in real property, associated with the Facility, including all expenses of foreclosure or otherwise perfecting any property interests or security interest in the Facility, (iii) all costs of compliance by SCPPA with its indemnification obligations under Section 17.7 of this Agreement , (iv) all costs related to the conducting of the ATTACHMENT 4
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8 business of SCPPA with respect to the Project, including the applicable portion of salaries, fees for legal, engineering, financial, and other services, all other costs attributable to miscellaneous and incidental expenses in connection with the administration of the Project, all costs, expenses , and payment and performance obligations of SCPPA under the Milford Solar Phase II Agency Agreement, including without limitation, any and all payments, costs and expenses with respect to compliance with its
indemnification obligations under Section 17 of the Milford Solar Phase II Agency Agreement, or under any other agreement with the Project Manager, and all other expenses properly related to the conduct of such affairs of SCPPA and shall include all operating costs so incurred by SCPPA to provide the Facility Products.
4.4.2 The Supplementary Services cost component of Power Costs for a Month shall consist of all costs for such Month of SCPPA, if any, to the ex tent not included in Section 4.4.1, in connection with services for transmission, dispatching, scheduling, tagging, firming, balancing, swapping, exchanging , or delivery and for otherwise facilitating the disposition, movement, taking, receiving, crediting and accounting for the Facility Products provided for under this Agreement. The Supplementary Services cost
component of Power Costs shall also entail all monthly costs incurred by SCPPA, if any, which are necessary to move or otherwise handle delivery of Purchaser’s Entitlement Share from the Point of Delivery to one or more specified delivery point(s) as determined by Purchaser pursuant to Sections 9.2 and 9.5.
4.4.3 The Reserve Fund cost component of Power Costs for a Month shall consist of the cost for such Month that is necessary to establish and maintain the Reserve Funds at the level deemed reasonably prudent and appropriate by the Coordinating Committee and the Board of Directors; provided, however, that to the extent such a Reserve Fund cost component of Power Costs is paid by the Project Participants pursuant to the Indenture cost component of Power Costs, the Project Participants shall be credited for that amount of the monthly Reserve Fund cost component so paid by the Project Participants which is containe d in such monthly Indenture cost component.
4.4.4 The Indenture cost component of Power Costs shall consist of:
(a) The amount, without duplication, which SCPPA is required under the Indenture to pay with respect to Debt Service or to pay or deposit during such Month into Funds established by the Indenture for Debt Service and for any reserve requirements for the Bonds or reserve requirements recommended by the
Coordinating Committee and approved by Board of Directors, including replenishment (the timing of which shall be in ATTACHMENT 4
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9 accordance with the provisions of this Agreement and the Indenture) of any reserves drawn down as a result of any failure of a Project Participant to pay all or any portion of its share of Monthly Costs.
(b) The amount which SCPPA is required to pay or deposit during such Month into any F und or accou nt established by the Indenture for the payment of interest on notes or on other evidences of indebtedness issued in anticipation of the issuance of the Bonds.
(c) One-twelfth of the amount (not otherwise included un der any item in this Section 4.4.4 or in Section 4.4.1, 4.4.2, 4.4.3, or
4.4.5 hereof) which SCPPA is required under the Indenture to pay or deposit during such Power Supply Year into any other Fund established by the Indenture, including, without
limitation, any amounts required to make up a deficiency in any Fund required or permitted by the Indenture , whether or not resulting from a default in payments by a Project Participant of amounts due under a Power Sales Agreement.
(d) The amount of fees, expenses or other charges incurred or payable by SCPPA under the Indenture; and
(e) Any rebate amount owed to the United States government.
4.4.5 The Power Purchase and Security Agreements cost component of Power Costs shall consist of costs for a Month, to the extent not otherwise included under this Section 4.4 , associated with the Power Purchase and Security Agreements, including all costs for such Month incurred by SCPPA in connection with its enforcement of the Power Purchase and Security Agreements or the
performance required of SCPPA under any of the Power Purchase and Security Agreements. Power Purchase and Security
Agreement costs shall inc lude, without duplication, SCPPA’s monthly payment of any applicable associated ancillary costs under the Power Purchase and Security Agreements, and, to the extent not otherwise included under this Section 4.4, all Direct Reimbursable Costs and any costs SCPPA is required to pay for the Facility Products, including, where applicable, the costs of Startup and Test Energy and Excess Energy.
4.5 Monthly Costs. The costs payable by the Purchaser as described in Section 7.1 hereof in accordance with Purchaser’s Project Cost Share, as set forth in Appendix B hereto.
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10 5. PURCHASE AND SALE OF FACILITY PRODUCTS AND THE OBLIGATIONS OF SCPPA AND THE PURCHASER.
5.1 Purchase and Sale of Facility Products . In accordance with the terms and conditions of this Agreement, commencing on the earliest of (i) the date SCPPA is obligated to pay any portion of the costs of the Project, (ii) the date upon which SCPPA first incurs or accrues costs associated with the issuance of any Bonds, (iii) the effective date of the Power Purchase Agreement, or (iv) the date of the first delivery of energy to Purchaser pursuant to this Agreement, and continuing through the term of this Agreement, except as otherwise provided here in, SCPPA shall provide Purchaser its Entitlement Share of all products, rights, and benefits, whether tangible or intangible , received or obtained by SCPPA with respect to the Project, including without limitation Facility Products , or, if applicable, Replacement Energy, and Purchaser shall be responsible for and pay its Project Cost Share of any and all costs, liabilities , and obligations associated with the acquisition of such products, rights, and benefits, which shall include without limitation all cos ts, liabilities, and obligations associated with Facility Products or Replacement Energy, as applicable, under the Power Purchase Agreement and any other applicable Project Agreement, or associated with the purchase and operation of the Facility upon any purchase or acquisition of the Facility by SCPPA, including purchase or acquisition of any rights pursuant to the Power Purchase and Security Agreements and any other applicable Project Agreement, and all costs, credits, liabilities and obligations under th e Indenture , any Cost of Acquisition, or any Capital Improvements.
5.2 Facility Products and Deliverables. SCPPA shall provide and Purchaser shall purchase and receive its Entitlement Share of Facility Products or Replacement Energy pursuant to the terms of this Agreement. To the extent permitted by the Power Purchase and Security Agreements, the applicable Project Agreements, or otherwise determined by the Coordinating Committee or Board of Directors, SCPPA will endeavor to take such actions or implement such measures as may be necessary or desirable for the utilization, maintenance , or preservation of the rights and interests of the Project Participants in the Project including, if appropriate, such enforcement actions or other measures as the Coordinating Committee or Board of Directors deems to be in the Project Participants’ best interests. To the extent not inconsistent with the Power Purchase and Security Agreements or other applicable Project Agreements, SCPPA may also be reposed with responsibilities for planning, designing, financing, developing, acquiring, insuring, con tracting for, administering, operating, and maintaining the Project to effectuate the delivery and sale of the Facility Products to Purchaser in accordance with Purchaser’s Entitlement Share. To the extent such services are available and can be carried forth in accordance with the Power Purchase and Security Agreements or other applicable Project Agreements, SCPPA shall also provide such other services, as approved by the Coordinating Committee or Board of Directors, as may be deemed necessary to secure the ben efits and/or satisfy the obligations associated with the Power Purchase and Security Agreements or other applicable Project Agreements. SCPPA shall use its best efforts, on behalf of ATTACHMENT 4
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11 Purchaser and the other Project Participant , to secure the benefits of the transactions contemplated under the Power Purchase and Security Agreements or other applicable Project Agreements including , if applicable, SCPPA’s acquisition of the Facility and its associated resources, as well as the delivery of the Facility Products or Replacement Energy, as applicable, contemplated by this Agreement, and shall endeavor to maintain and secure the rights and benefits accruing to SCPPA through the Power Purchase a nd Security Agreements and the other applicable Project Agreements in accordance with Purchaser’s Entitlement Share . SCPPA is authorized to exercise the powers vested in SCPPA pursuant to the Act, its Joint Powers Agreement, and this Agreement, as agent for Purchaser to fully carry forth Purchaser’s objectives in the Project as set forth herein.
5.3 Project Manager . SCPPA shall initially appoint LADWP to act as Project Manager to administer the Project in accordance with the Milford Solar Phase II Agency Agreement or cause the Project to be administered through a project management or agency agreement with another agent on behalf of the Project Participants.
5.4 Adoption of Annual Budget. The Annual Budget and any amendments to the Annual Budget shall be prepared and approved in accordance with Sections 5.4.1 or 5.4.2, respectively.
5.4.1 SCPPA will prepare and submit to Purchaser a proposed Annual Budget at least 60 days prior to the beginning of each Power Supply Year. In connection with the preparation of the Annual Budget, SCPPA shall incorporate therein the Operating Budget (including an energy production costs budget)
and, where appropriate , a provision for the payment of costs of renewals, replacements, replenishment or other costs of acquisition and development which are not being financed by proceeds of Bonds or other sources) for such Power Supply Year as prepared by the Project Manager and approved by the Coordinating Committee. Purchaser and the other Project Participants may then submit to SCPPA, at any time until the Annual Budget is adopted, any matters or suggestions relating to the Annual Budget. SCPPA shall adopt the Annual Budget not less than 30 nor more than 60 days prior to the beginning of such Power Supply Year and shall cause copies of such adopted Annual Budget to be delivered to each Project Participant; provided, however, the Annual Budget for the first Power Supply Year shall be prepared, considered, adopted , and delivered in the most practicable manner available prior to Commercial Operation of the Facility. As required from time to time during any Power Supply Year after seven days written notice to each Project Participant, SCPPA may, pursuant to the foregoing provisions for adopting the Annua l Budget, adopt an amended Annual Budget for and applicable to such Power Supply Year for the remainder of such Power Supply Year. The Annual Budget ATTACHMENT 4
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12 shall establish the basis for monthly Billing Statements to be sent to the Project Participants, as provided in Section 7 hereof.
5.4.2 Any adjustment, and any other or further mechanism for adjustment, as may be required to address the variability of costs of operation of the Project at any time during the Power Supply Year or the variability of or addition to any other Annual Budget component, may be incorporated into the Annual Budget as provided above, or any amendment to an Annual Budget at any time during any Power Supply Year upon seven days ’ written notice each Project Participant as set forth in Section 5.4.1.
5.5 Reports. SCPPA will prepare and issue to Purchaser and the other Project Participants the following reports each quarter of a Power Supply Year:
5.5.1 Financial and operating statement relating to the Project.
5.5.2 Variance report comparing the costs in the Annual Budget versus actual costs, and the status of other cost-related issues with respect to the Project.
5.6 Records and Accounts. SCPPA will keep, or cause to be kept, accurate records and accounts of each of the properties and facilities comprising the Project as well as of the operations relating to the Project, all in a manner similar to accepted accounting methodologies associated with similar projects. All transactions of SCPPA relating to the Project with respect to each Fiscal Year shall be subject to an annual audit. Purchaser shall have the right at its own expense to examine and copy the records and accounts referred to above on reasonable notice during regular business hours.
5.7 Provide Information. Purchaser agrees to supply SCPPA, upon request, with such information, documentation and certifications as SCPPA shall reasonably determine to be requisite to and necessary or desirable for the design, financing, refinancing, development, operation, administration, maintenance and ongoing activities of the P roject, including information reasonably available to allow SCPPA to respond to requests for such information from any federal, state or local regulatory body or other authority.
5.8 Consultants and Advisors Available . SCPPA shall make available to the Coordinating Committee all consultants and advisors, including financial advisors and legal counsel including Bond Counsel and Tax Counsel, that are retained by SCPPA, and such consultants , counsel and advisors shall be authorized to consult with and advise the Coordinating Committee on Project matters.
5.9 Deposit of Insurance Proceeds . Except as otherwise may be required by any of the Project Agreements and unless otherwise provided by the Board of Directors, SCPPA promptly shall deposit with the Project Trustee or Lender any insurance proceeds received by SCPPA as a result of injury or damage to ATTACHMENT 4
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13 any insured interest attributable to any component or all or any portion of the Project. All insurance proceeds collectible by SCPPA as a result of an insured event affecting the Project shall be applied as directed by SCPPA (which directions shall be in accordance with any applicable provisions of the Indenture).
5.10 Compliance with Federal Tax Law Requirements . Notwithstanding anything to the contrary in this Agreement, SCPPA and Purchaser shall each take all actions necessary to comply in all respects with the Federal Tax Law Requirements applicable to any Bonds and shall refrain from taking any action that would result in or cause non -compliance with the Federal Tax Law Requirements applicable to any Bonds.
5.11 Liquidated Damages . Any amounts paid to SCPPA , or applied against payments otherwise due by SCPPA, by the Power Purchase Provider as and for Daily Delay Damages for failure, among others, to achieve any of the Key Milestones (as defined in the Power Purchase Agreement), including the Guaranteed Commercial Operation Date, or as and for Shortfall Liquidated Damages, including for failure to deliver the Guaranteed Delivered Energy or relating to any RPS Compliance Shortfall Energy as provided under the Power Purchase Agreement, shall be remitted or credited, as applicable, to the Project Participants in accordance with their respective Project Cost Shares.
6. COORDINATING COMMITTEE.
6.1 Establishment and Authorization of the Coordinating Committee . The Coordinating Committee is hereby established and duly authorized to act on behalf of the Project Participants as provided in this Section 6 for the purpose of (a) providing coordination among, and information to, the Project Participants and SCPPA, (b) the administration of the Project Agreements other than the Milford Solar Phase II Agency Agreement, (c) making any recommendations to the Board of Directors regarding the administration of the Project, and (d) execution of the Coordinating Committee r esponsibilities set forth in Section 6.3 hereof, including the various financial, administrative, and technical matters which may arise from time to time in connection with the Project or the administration thereof, and such further developments as may need to be addressed.
6.2 Coordinating Committee.
6.2.1 The Coordinating Committee shall consist of one representative from each Project Participant. Each Project Participant shall be entitled to cast a vote equal to its Project Cost Share as set forth in Appendix B hereof. SCPPA shall be entitled to one non -voting representative. Within thirty (30) days after SCPPA has entered into Power Sales Agreements with each Project Participant, SCPPA and each Project Participant shall provide notice to each other of such party’s representative on the Coordinating Committee. Alternate representatives may be appointed by similar ATTACHMENT 4
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14 written notice to act on the Coordinating Committee, or on any subcommittee established by the Coordinating Committee or by the Board of Directors, in the absence of the regular representative or to act on specified occasions with respect to specified matters. An alternate representative may attend all meetings of the Coordinating Committee but may vote only if the representative for whom she/he serves as alternate is absent. No Project Participant’s representative shall exercise any greater authority tha n permitted by the Project Participant which she/he represents. The chairperson of the Coordinating Committee (“Chairperson”) shall be a representative of the Project Manager. The Chairperson shall be responsible for calling and presid ing over meetings of the Coordinating Committee.
6.2.2 The Chairperson or SCPPA shall promptly call a meeting of the Coordinating Committee at the request of any representative in a manner and to the extent permitted by law. For purposes of conducting meetings, a quorum shall exist so long as SCPPA’s representative and the representative of at least a majority of the Project Participants shall be present. Except as may otherwise be provided in an agreement to which all of the Project Participants agree, all actions taken by the Coordinating Committee shall require an affirmative vote of Project Participants having Project Cost Shares aggregating at least eighty percent (80%) of the total Project Cost Shares. Notwithstanding the forgoing, however, (i) if a proposed action before the Coordinating Committee or the Board of Directors relates solely to the interests of one or more Project Participants (other than Purchaser) and Purchaser determines, in good faith, that such proposed action will not adversely affect, economically or otherwise, its interests, Purchaser agrees that it shall not unreasonably withhold its affirmative vote with respect to such proposed action ; and (ii) any recommendation by the Coordinating Committee to the Board of Directors to exercise a Project Purchase Option shall require an affirmative vote of Project Participants having Project Cost Shares aggregating one hundred percent (100%) of the total Project Cost Shares; provided, however, that any Project Participant(s) who does not wish to participate in such Project Purchase Option will cooperate in good faith with the Project Participant(s) desiring to participate in the Project Purchase Option to facilitate the Project Purchase Option ; and provided further, that any Project Participant(s) who does wish to participate in such Project Purchase Option will cooperate in good faith with the Project Participant(s) not desiring to participate in the Proje ct Purchase Option to facilitate an equitable resolution of all of the rights and responsibilities of the Project Participants with respect to the exercise of such Project Purchase Option. Unless the Board of Directors shall otherwise determine to require a majority vote pursuant to the terms of the Joint Powers Agreement, all actions with respect to the Project taken by the Board of Directors shall ATTACHMENT 4
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15 require an affirmative vote of at least eighty percent (80%) of the Project Votes (as defined in the Joint Powers Agreement) cast thereon. Purchaser acknowledges and agrees that SCPPA, with the approval of the Coordinating Committee or the Board of Directors, as applicable, may enter into future Project Agreements or amendments to the existing Project Agreements (in accordance with their respective terms). Except as provided herein or in the Project Agreements or as otherwise provided by resolution of the Board of Directors or required by law, SCPPA will not be required to obtain the consent or approval of Purchaser in connection with any such new Project Agreement or amendment. Conducting of Coordinating Committee meetings and actions taken by the Coordinating Committee may be taken by vote given in an assembled meeting or by telephone, video conferencing, letter, e - mail or by any combination thereof, to the extent permitted by law.
6.3 Coordinating Committee Responsibilities. In addition to those responsibilities described in Section 6.1, the Coordinating Committee shall have the following responsibilities:
6.3.1 Provide liaison between SCPPA and the Project Participants at the management or other levels with respect to the Project, maintain a liaison between the Project Participants and all other SCPPA members with respect to the Project, and where the Coordinating Committee deems it appropriate, maintain a liaison with the counterparties to any Project Agreements and with any other entities or utilities engaged in or in connection with other renewable energy projects.
6.3.2 Exercise general supervision over any subcommittee established pursuant to Section 6.6.
6.3.3 If any Project design, feasibility or planning studies or activities which are to be completed by SCPPA have not been completed by the Effective Date of this Agreement, oversee, as appropriate, the continuation and completion of such Project design, feasibility or planning studies or activities.
6.3.4 Review, develop and, if appropriate, recommend , modify, or approve all budgets and revisions thereof prepared and submitted by SCPPA or the Project Manager pursuant to any applicable agreement.
6.3.5 Review, develop, and, if appropriate, recommend, modify, approve, or otherwise act upon any systems or procedures for adjustment of the Annual Budget or any alternative methodologies for budgeting or billing as set forth in Section 5 and Section 7 of this Agreement.
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16 6.3.6 Carry out all other actions reposed in the Coordinating Committee with respect to budgeting and billing as set forth in Section 5 and Section 7 of this Agreement.
6.3.7 Review, discuss, and attempt to resolve any disputes among the Project Participants or the parties to any Project Agreements including, without limitation, the Power Purchase Provider or any other counterparty to any Project Agreement.
6.3.8 Make recommendations to the Project Manager, the Board of Directors, the Project Participants, or to the counterparties to any of the Project Agreements, as appropriate, with respect to the development, operation, and ongoing administration of the Project.
6.3.9 Review, develop, and , if appropriate, modify and approve rules, procedures, and protocols for the administration of the Project or Project Agreements, including rules, procedures, and protocols for the management of the costs of the Facility and the scheduling, handling, tagging, dispatching and crediting of Facility Products, and the handling and crediting of Environmental Attributes associated with the Facility or Replacement Energy under the Power Purchase Agreement.
6.3.10 Review, develop, and , if appropriate, modify and approve rules, procedures and protocols for the monitoring, inspection and the exercise of due diligence activities in connection with the Acquisition relating to the Project and the operation of the Facility.
6.3.11 Review, and, if appropriate, modify , approve, or otherwise act upon, the form or content of any written statistical, administrative, or operational reports, solar energy related data, electric generation information, solar energy production data, diurnal, barometric and meteorological information, solar photovoltaic , metallurgic, chemical and technical information, facility reliability data, transmission information, forecasting , scheduling, dispatching, tagging, parking, firming, exchanging, balancing, movement, or other delivery information, climate and weather related matters, cloud conditions, regulatory matters or requirements, and other information and other similar records or matters pertaining to the Project which are furnished to the Coordinating Committee by the Project Manager , the counterparties to Project Agreements, experts, consultants or others.
6.3.12 In coordination with the Board of Directors, review, and, if appropriate, recommend, modify or approve rules, procedures, and protocols as provided in Section 10.3.
6.3.13 Review, formulate and, if appropriate, modify, or otherwise act upon, practices and procedures to be followed by Purchaser for, ATTACHMENT 4
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17 among other things, the production, scheduling, tagging, transmission, delivery, firming, balancing, exchanging, crediting, tracking, monitoring, remarketing, sale or disposition of Facility Products.
6.3.14 Act upon such changes as appropriate as set forth in Section 1 5.5 of the Power Sales Agreements. Such changes as may occur in accordance with Section 15.5 with respect to Appendices A and B herein shall be considered an element of the administration of this Agreement and shall not be deemed an amendment of this
Agreement requiring the consent of the Parties hereto.
6.3.15 Review, formulate, modify and approve, if necessary, the schedule of planned activities or practices and procedures formulated by the Project Manager or the applicable counterparty with respect to the performance of any Project Agreement, including the policies for selection and utilization of contractors and consultants included in the budgets with respect to the Project. In formulating and approving such schedules, consideration may be given, if possible, to each Project Participant’s electric system conditions, which may prevail during such planned activities.
6.3.16 Review, and if appropriate, recommend, or otherwise act upon any matters or issues associated with Operating Work and any other matters or issues which may arise in the operation, maintenance, or administration of the Project.
6.3.17 Review and act upon any matters involving any arrangements and instruments entered into by the Power Purchase Provider or any affiliate thereof to, among other things, secure certain performance requirements, including, but not limited to, the Project Agreements, the Development Security or the Performance Security and any other letter of credit delivered to or for the benefit of SCPPA by the Power Purchase Provider or any other counterparty to any Project Agreement in connection with the Project and take such actions or make such recommendations as may be appropriate or desirable in connection therewith.
6.3.18 Review, and, if appropriate, recommend, modify, or approve policies or programs formulated by the Project Manager or any counterparty under any Project Agreement for determining or estimating solar energy or the values, quantities, volumes or costs of renewable energy from the Facility.
6.3.19 Review, modify , or approve recommendations of the Project Manager or counterparties made pursuant to the provisions of any Project Agreement.
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18 6.3.20 Review, and, if appropriate, recommend Cost of Acquisition and costs of Operating Work and submit to the Board of Directors any budget revisions or other provisions for the payment or financing thereof.
6.3.21 Review, and, if appropriate, recommend SCPPA’s insurance program with respect to the Project (as applicable) including, without limitation, the establishment of any self-insurance program and the maximum amount or amounts of any uninsured claim that the Project Manager may settle without the prior approval of the Coordinating Committee.
6.3.22 Review, and where appropriate, recommend the implementation of metering technologies and methodologies appropriate for the delivery, accounting for, transferring , and crediting of Facility Products to the Point of Delivery or other points or destinations, as applicable.
6.3.23 Review, examine, modify, and where appropriate, recommend or approve the implementation of methods for addressing
curtailments or other interruptions having a tendency to cause Deemed Delivered Energy.
6.3.24 Review, modify and, where appropriate, recommend or approve the implementation of practices and procedures to carry forth the provisions of Section 9 herein, as may be applicable to any of the Project Participants; provided, that the Coordinating Committee shall take no action with respect to the possible provision of Supplementary Services unless and until a Project Participant makes a specific request that SCPPA provide such Supplementary Services.
6.3.25 Identify, or develop criteria to identify, contracts or agreements relating to work or Operating Work that shall be deemed to be Major Contracts under any applicable project management or operating agreement.
6.3.26 Review, and to the extent permitted by this Agreement or any other relevant agreement relating to the Project, modify and approve or disapprove the specifications, vendors’ proposals, bid evaluations, form of final agreement, or any other matters with respect to Major Contracts.
6.3.27 Review, and make recommendations with respect to actions, disposition or use, if any, relating to Acquisition activities , including with respect to the exercise of a Project Purchase Option.
The Coordinating Committee must meet and consider a
recommendation to the Board of Directors regarding the exercise of a Project Purchase Option before the exercise of such Project ATTACHMENT 4
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19 Purchase Option is presented to the Board of Directors for a Project Vote (as defined in the Joint Powers Agreement).
6.3.28 Make recommendations to the Board of Directors with respect to the application of the payments, if any, received by SCPPA from the Development Security and Performance Security and the amounts, if any, received by SCPPA as a result of a Default by the Power Purchase Provider under the Power Purchase Agreement, provided that, subject to compliance with the terms and provisions of the Indenture, such payments or amounts shall, in any event, be applied to one or more of the following purposes: (i) the payment, redemption or defeasance of Bonds, (ii) the payment of or a credit against the Cost of Acquisition, (iii) a credit against Power Costs, or (iv) the distribution to Purchaser.
6.3.29 Perform such other functions and duties as may be provided for under this Agreement, the Power Purchase Agreement, the Power Purchase and Security Agreements, the Ancillary Documents, or any other applicable Project Agreement, or as may otherwise be appropriate or beneficial to the Project or the Project Participants.
6.4 Management Decisions and the Role of the Board of Directors. The rights and obligations of SCPPA under the Project Agreements shall be subject to the ultimate control at all times of the Board of Directors. The Project Participants shall be entitled to participate in the decisions of the Board of Directors with respect to SCPPA’s rights and interests in the Facility and the Project , as described herein . SCPPA, through the Board of Directors , shall have, in addition to the duties and responsibilities set forth elsewhere in this Agreement, the following duties and responsibilities, among others:
6.4.1 Future Matters Liaison . The Board of Directors shall provide liaison between the Project Participants at the management level with respect to the administration of the Project and other future matters arising out of the Project Agreements.
6.4.2 Dispute Resolution . The Board of Directors shall endeavor to review, discuss and attempt to resolve any disputes among SCPPA, any of the Project Participants and the counterparties under the Project Agreements relating to the Project, the operation and management of the Facility and SCPPA rights and interests in the Facility.
6.4.3 Scheduling Procedures. When recommended by the Coordinating Committee, or when otherwise appropriate, the Board of Directors shall act upon and approve or modify the practices and procedures for the scheduling, delivering, controlling and allocating Facility Products.
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20 6.4.4 Project Agreements . The Board of Directors shall have the authority to approve the Project Agreements and to review modify and approve, as appropriate, all amendments, modifications and supplements to the Project Agreements.
6.4.5 Capital Improvements . The Board of Directors shall review, modify and approve, if appropriate, all Capital Improvements and Acquisitions undertaken with respect to the Project and all financing arrangements for such Capital Improvements or Acquisitions. The Board of Directors shall approve those budgets or other provisions for the payments associated with the Project and the financing for any development or Acquisitions associated with the Project.
6.4.6 Bond I ssuance. The Board of Directors shall have authority to approve any and all of the following: (1) each issuance of SCPPA indebtedness relating to the Project, (2) each supplement or amendment to the Indenture relating to the Project, (3) the Bonds issued to fin ance the purchase or acquisition of the Facility or Capital Improvements of the Facility or costs related to the exercise or enforcement by SCPPA of its rights with respect to any agreements, deeds of trust, leases or other Power Purchase and Security Agreements relating to or affecting the Project, or the purchase of rights and interests under the Power Purchase and Security Agreements, or other Acquisitions to carry out the objectives of the Project, (4) the selection of underwriters for each series of Bonds, (5) the manner and timing of marketing (including of the manner of sale), amount, interest rates and other terms and conditions of each series of SCPPA indebtedness associated with the Project, and (6) any other action necessary or approp riate to carry forth Section 13 of this Agreement.
6.4.7 Committees. The Board of Directors shall exercise such review, direction or oversight as may be appropriate with respect to the Coordinating Committee and any other committees established pursuant to the Project Agreements.
6.4.8 Budgeting. The Board of Directors shall review, modify and approve each Annual Budget and the revisions thereto in accordance with Section 5.4 of this Agreement.
6.4.9 Federal Tax Law Requirements . With respect to any Bonds, the Board of Directors, in consultation with Bond Counsel or Tax Counsel, shall develop and promulgate rules, procedures, and protocols, including the development and maintenance of relevant information and reporting procedure s, and shall provide direction to Purchaser with respect to the Federal Tax Law Requirements.
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21 6.4.10 Application of Certain Payments Under the Power Purchase Agreement. The Board of Directors shall review, modify and approve the recommendations of the Coordinating Committee , made pursuant to Section 6. 3.28 of this Agreement , as to the application of any payments or amounts received by SCPPA from the Development Security and Performance Security or as a result of a Default by the Power Purchase Provider under the Power Purchase Agreement; provided that, subject to compliance with the terms and provisions of the Indenture, such payments and amounts shall be applied to one or more of the purposes set forth in Section
6.3.28. 6.4.11 Supervening Authority of the Board . The Board of Directors is reposed with complete and plenary supervening power and authority to act upon any matter which is capable of being acted upon by the Coordinating Committee or which is specified as being within the authority of the Coordinating Committee pursuant to the provisions of this Agreement, including those matters enumerated in Section 6.1 and Section 6.3 of this Agreement.
6.4.12 Other Matters. The Board of Directors is authorized to perform such other functions and duties, including oversight of those matters and responsibilities addressed by the Coordinating Committee, as may be provided for under this Power Sales Agreement and under the other Project Agreements, or as may otherwise be appropriate.
6.5 Periodic Audits. The Board of Directors or the Coordinating Committee may arrange for the annual audit under Section 5.6 of this Agreement by certified accountants, selected by SCPPA and experienced in electric generation or electric utility accounting, of the books and accounting records of SCPPA, and where deemed appropriate t he Project Manager (if other than SCPPA), the Power Purchase Provider (to the extent provided under any of the Power Purchase and Security Agreements) and any other counterparty under any Project Agreement to the extent allowable, and any cost reimbursable consultant or cost reimbursable contractor relevant to the Acquisition, development, administration or operation of the Project, and such audit shall be completed and submitted to SCPPA as soon as reasonably practicable after the close of the Fiscal Year. SCPPA shall promptly furnish to the Project Participants copies of all audits. No more frequently than once every calendar year, Purchaser may, at its sole cost and expense, audit or cause to b e audited the books and cost records of SCPPA, the Project Manager (if other than SCPPA), the counterparty under any Project Agreement to the extent so provided in the applicable Project Agreement, and any cost reimbursable consultant or cost reimbursable contractor relevant to the Acquisition, development, administration or operation of the Project.
6.6 Additional Committees. The Coordinating Committee may establish as needed subcommittees including, but not limited to, auditing, legal, financial, ATTACHMENT 4
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22 engineering, mechanical, weather, geologic, diurnal, barometric , meteorological, operating, insurance, governmental relations, environmental and public information subcommittees. The authority, membership, and duties of any subcommittee shall be established by the Coordinating Committee ; provided, however, such authority, membership or duties shall not conflict with the provisions of any of the Project Agreements. Each such subcommittee shall be initially responsible to the Coordinating Committee.
6.7 Change in Representative . Purchaser shall promptly give written notice concurrently to the other Project Participants and SCPPA of any changes in the designation of its representative on the Coordinating Co mmittee or any subcommittee, and SCPPA shall promptly give written notice concurrently to Purchaser and the other Project Participants of any changes in the designation of its representative on the Coordinating Committee or any subcommittee.
6.8 Costs of Consultants. Costs (or the applicable portion thereof) of consultants and others employed or appointed by the Coordinating Committee to perform the duties required hereunder , to the extent the Coordinating Committee is authorized to so employ or appoint, shall be included in the Cost of Acquisition or Power Costs, as appropriate, and shall be billed to SCPPA or the Project Manager (if other than SCPPA).
6.9 Representative’s Expenses. Any expenses incurred by any representative of any Project Participant or group of Project Participants serving on the Coordinating Committee or any other committee in connection with his/her duties on such committee shall be the responsibility of the Project Participant which he/she represents and sha ll not be an expense payable under this Agreement.
6.10 Inaction by Committee. It is recognized by SCPPA and Purchaser that if the Coordinating Committee is unable or fails to agree with respect to any matter or dispute which it is authorized to determine, resolve, approve, disapprove or otherwise act upon after a reasonable opportunity to do so, or within the time specified herein or in any other applicable Project Agreement, then SCPPA may take such action as in its discretion is necessary for its timely performance under any Project Agreement pending the resolution of any such i nability or failure to agree, but nothing herein shall be construed to allow SCPPA to act in violation of the express terms of any Project Agreement.
6.11 Compliance with Indenture. It is recognized by SCPPA and Purchaser that the planning, financing, development, acquisition, operation and maintenance of, and insurance programs relating to, the Project must comply in all respects with requirements of the Indenture and all licenses, permits and regulatory provisions necessary for su ch planning, financing, development, acquisition, operation and maintenance and it is therefore agreed that, notwithstanding any provision of this Agreement, no action by the Coordinating Committee or the Project Manager (if a designee other than SCPPA) shall require SCPPA to act in any manner inconsistent with any such requirements or to refrain from acting as required by this Agreement and the Power Purchase Agreement and if the ATTACHMENT 4
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23 Project Manager (if a designee other than SCPPA) shall fail to make recommendations or act with respect to any matter in connection with an action that is required to be taken pursuant to any of the foregoing, SCPPA shall take such action as is appropriate to assure compliance with the foregoing.
6.12 Delegation. To secure the effective cooperation and interchange of information in a timely manner in connection with various administrative, technical and other matters which may arise from time to time in connection with administration of the Project Agreements, in appropriate cases, duties and responsibilities of the Board of Direc tors or the Coordinating Committee, as the case may be under this Section 6, may be delegated to SCPPA’s Executive Director by the Board of Directors upon notice to the Project Participants.
7. CHARGES AND BILLINGS.
7.1 Monthly Costs . The amount of Monthly Costs which shall be paid by Purchaser for a particular Month shall be the sum of the following:
7.1.1 Purchaser’s Project Cost Share multiplied by t he Operating cost component of Power Costs (as provided in Section 4.4.1 hereof) for such Month.
7.1.2 Purchaser’s share of the Supplementary Services cost component of Power Costs (as provided in and subject to the limitations set forth in Section 4.4.2 hereof) for such Month based on Purchaser’s allocated share of any such services procured by SCPPA on behalf of Purchaser.
7.1.3 Purchaser’s Project Cost Share multiplied by the Reserve Fund cost component of Power Costs (as provided in Section 4.4.3 hereof) for such Month.
7.1.4 Purchaser’s Project Cost Share multiplied by t he Indenture cost component of Power Costs (as provided in Section 4.4.4 hereof) for such Month as the Indenture cost component has been reduced by interest earned on investments of amounts held under the Indenture if and to the extent not credited against the Cost of Acquisition or has been off -set or reduced by other amoun ts made available therefor as provided in the Indenture.
7.1.5 Purchaser’s Project Cost Share multiplied by t he Power Purchase and Security Agreements cost component of Power Costs (as provided in Section 4.4.5 hereof) for such Month.
7.2 Billing Statements. By the fifth calendar day of each Month during each Power Supply Year, SCPPA shall bill Purchaser for the amount of Monthly Costs to be paid by Purchaser for the current Month by providing Purchaser with a Billing Statement in accordance with the charges established pursuant to the provisions of this Agreement; provided, however, that such Billing Statement, ATTACHMENT 4
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24 with respect to Debt Service and other obligations payable from the Debt Service Fund under the Indenture, shall instead include the amount, if any, to be paid by Purchaser with respect to the applicable Bonds and the other obligations payable from the Debt Service Fund that is due and payable in the immediately succeeding Month or as otherwise provided under the Indenture, and provided further, that such Billing Statement, with respect to the cost of Facility Products provided by SCPPA to Purchaser under this Agreement, shall also include with respect to the performance by SCPPA or the counterparty under and pursuant to applicable Project Agreements, a charge or credit to Purchaser, in accordance with Purchaser’s Project Cost Share or Entitlement Share, as applicable, with respect to the costs or revenues attributable to the Project Participants pursuant to and under any applicable Project Agreement.
Such Billing Statement shall detail the costs described in Section 7.1 hereof and shall set forth, among oth er things, the amounts due for such Month by Purchaser with respect to the items of Monthly Costs set forth in Section 7.1, as such Monthly Costs may be adjusted from time to time in accordance with Section 5 and this Section 7. Such Billing Statement shall be paid by Purchaser on or before 20 days after receipt of such Billing Statement.
7.3 Adoption of Alternative Billing Statement Procedures . The Coordinating Committee may recommend the adoption of an alternative Billing Statement billing methodology in connection with each Project Participant’s Billing Statement with respect to the Power Costs and the costs associated with any Project Agreement. Such alternative Billing Statement procedures may be placed into effect with the approval of the same by resolution of the Board of Directors. Any such alternative Billing Statement billing metho dology shall satisfy all requirements of the Indentur e and shall be fiscally prudent, financially sound and shall assure coverage of all potential and actual costs and obligations of SCPPA.
7.4 Disputed Monthly Billing Statement . In case any portion of any Billing Statement received by Purchaser from SCPPA shall be in bona fide dispute, Purchaser shall pay SCPPA the full amount of such Billing Statement and, upon determination of the correct amount, the difference between such correct amount and such full amount, if any, including interest at the rate received by SCPPA on any overpayment, will be credited to Purchaser by SCPPA after such determination; provided, however, that such interest shall not accrue on any overpayment that is acknowledged by SCPPA and returned to Purchaser by the fifth calendar day following the receipt by SCPPA of the disputed overpayment. In the event such Billing Statement is in dispute, SCPPA will give consideration to such dispute and will advise Purc haser with regard to SCPPA’s position relative thereto within 30 days following receipt of written notification by Purchaser of such dispute.
7.5 Reconciliation of Monthly Costs.
7.5.1 As soon as practicable after the end of each Power Supply Year, SCPPA will submit to the Project Participants a detailed statement of the actual aggregate Monthly Costs and other amounts payable ATTACHMENT 4
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25 hereunder, including any credits thereto, for all of the Months of such Power Supply Year, and the adjustments of the aggregate Monthly Costs and other amounts payable hereunder, if any, for any prior Power Supply Year, based on the annual audit of accounts provided for in Section 6.5. If, on the basis of the statement submitted as provided in this Section 7.5.1, the actual aggregate Monthly Costs and other amounts payable by the Purchaser or the other Project Participant s for any Power Supply Year exceed the amount thereof which the Purchaser or the other Project Participant, as applicable, has been billed, the Purchaser or the other Project Participant, as applicable, shall pay SCPPA, within 20 days of receipt of SCPPA’s invoice requesting payment of such incremental amount, the amount to which SCPPA is entitled. If, on the basis of the statement submitted pursuant to this Section 7.5.1, the actual aggregate Monthly Costs or other amounts payable by the Purchaser or the other Project Participant s for any Power Supply Year are less than the amount for which the Purchaser or any other Project Participant has been billed, SCPPA shall, unless otherwise directed by the Purchaser or any other Project Participant with respect to moneys owed to each, credit such excess against Purchaser’s and/or the other Project Participant’s , as applicable, next monthly Billing Statement.
7.5.2 In the event that the failure of Purchaser to make its payments in accordance with this Agreement shall have resulted in the application of amounts in any Reserve Fund under this Agreement to the payment of costs payable from such Reserve Fund and such other Project Participants shall have made up the deficiency created by such application or paid additional amounts as a result of a draw on such Reserve Fund, amounts thereafter paid to SCPPA by Purchaser for application to such past due payments including interest shall be credit ed on the Billing Statements of the other Project Participants in the next Month or Months as provided in the applicable provisions of Section 11.
7.6 Other or Additional Cost Reconciliation Mechanisms. The Board of Directors may, by resolution, authorize or prescribe other billing, payment, costing, and cost reconciliation mechanisms to address such billing, payment, costing, and cost reconciliation issues as may from time to time arise with respect to the Project.
7.7 Interest on Late Payments. If Purchaser fails to pay any Billing Statement when due, interest shall accrue, to the extent permitted by law, at a rate equal to the lesser of (i) one percent per Month (12% per annum) on the unpaid amount of the bill or (ii) the monthly equivalent of the “prime” rate of interest as noticed in the Federal Reserve’s HR 15 weekly bulletin (or the subsequent equivalent thereof) as of the date of nonpayment on the unpaid amount of the bill, until such Billing Statement is paid.
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26 7.8 Prepayment of Monthly Costs . Purchaser may, at any time, pay moneys to SCPPA or utilize any credits due or amounts owed by SCPPA to Purchaser with respect to the Project for the purpose of prepaying its monthly Billing Statement. Such moneys and amounts owed by SCPPA under any Project Agreement shall be deposited into an account established by, or at the direction of, SCPPA. Consistent with SCPPA’s investment policy, moneys in such account shall be invested pursuant to instructions provided to SCPPA by Purchaser and all investment income shall be credited to such account. Payment of the amount of any monthly Billing Statement or Default Invoice shall be made from moneys available in such account to the extent set forth in written directions from Purchaser to SCPPA received at least five business days prior to the due date of such payment. Any credit or prepayment with respect to its monthly Billing Statement shall not relieve or reduce Purchaser’s other obligations under this Agreement.
7.9 Costs or Expenses Incurred for Sole Benefit of Purchaser . Notwithstanding anything to the contrary in this Agreement, if a particular cost or expense is incurred by SCPPA for the sole benefit of Purchaser, unless otherwise determined by the Coordinating Committee, then such cost or expense shall be allocated only to Purchaser, i n which event only Purchaser (and no other Project Participant) shall be responsible for the payment thereof under this Agreement. Any such cost or expense incurred by SCPPA for the sole benefit of Purchaser shall be deemed to be paid from amounts paid by Purchaser from the payment of its Billing Statements.
7.10 Credit or other Payment Attributable to a Specific Project Participant. Subject to Section 5.12 of this Agreement, s hould any Project Participant make or provide, through any type of payment mechanism, for a separate payment or prepayment for Facility Products or other Project purpose which results in a credit or reduction in SCPPA's obligation being credited to the pur chase of Facility Products, or a reduced cost of power or otherwise credited under the Power Purchase Agreement or other Project Agreement, then, to the extent that such credit is credited to an obligation of SCPPA under the Power Purchase Agreement or such other Project Agreement, such credit shall be passed through or credited to the applicable Project Participant under such Project Participant’s Power Sales Agreement. Such a credit may, at the request of the applicable Project Participant, be credited on the Project Participant’s subsequent Billing Statements or handled pursuant to a Billing Statement methodology which bills for and places an amount which is the equivalent of the credit into the Project Part icipant’s project stabilization account or such a credit may be otherwise handled in such manner as the applicable Project Participant may reasonably request. The provisions of this Section 7.10 shall be in addition to the terms and provisions of Section 12 and shall not be applicable to any circumstances, conditions or matters that are within the scope of Section 12.
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27 8. UNCONDITIONAL PAYMENT OBLIGATIONS; RATE COVENANT; AUTHORIZATIONS; CONFLICTS; LITIGATION.
8.1 Unconditional Payment Obligation. Beginning with the earliest of (i) the date SCPPA is obligated to pay any portion of the costs of the Project, (ii) the date upon which SCPPA first incurs or accrues costs associated with the issuance of the Bonds, (iii) the date of Commercial Operation, or (iv) the date of the first delivery of Facility Products to Purchaser and continuing through the term of this Agreement, Purchaser shall pay SCPPA the amounts of Monthly Costs set forth in the Billing Statements submitted by or on behalf of SCPPA to Purchaser in accordance with the provisions of Section 7 hereof and, without duplication, any amount set forth in any Step-Up Invoice and Default Invoice received by Purchaser as a result of the operation of Section 15 hereof, whether or not this Agreement has been terminated, or the Project or any part thereof has been completed, is functioning, producing, operating or operable or its output are suspended, interrupted, interfered with, reduced or curtailed or terminated in whole or in part, and such payment s shall not be subject to reduction whether by offset or otherwise and shall not be conditional upon the performance or nonperformance by any party of any agreement for any cause whatsoever.
8.2 Source of Payments . Purchaser hereby represents and warrants that the obligations of Purchaser to make the payments to SCPPA under this Agreement shall constitute a cost of purchased power and an operating expense of Purchaser payable solely from its power revenue fund, including any and all legally available power system reserves. Purchaser will annually in each and every fiscal year of Purchaser during the term of this Agreement include in its power system budget, whether or not any other items are included, an appropriation from the revenues of its power system (including moneys derived from sales to third parties) sufficient to satisfy all the payments required to be made in such year under this Agreement until all payments required under this Agreement have been paid in full.
8.3 Rate Covenant . Purchaser will establish, maintain , and collect rates and charges for the electric service of its power system each year so as to provide revenues sufficient, together with any legally available power system reserves, to enable Purchaser to pay to SCPPA all amounts payable when due under this Agreement and to pay all other amounts payable from, and all lawful charges against or liens on, the revenues of its power system.
8.4 Authorizations. Purchaser hereby represents and warrants that no order, approval, consent , or authorization of any governmental or public agency, authority or person, is required on the part of Purchaser for the execution and delivery by Purchaser of this Agreement, or the performance by Purchaser of its obligations under this Agreement except for such as have been obtained.
8.5 Conflicts. Purchaser represents and warrants to SCPPA as of the Effective Date and as of the date of the opinion of counsel referenced in Section 13.4, that, to Purchaser’s knowledge, the execution and delivery of this Agreement ATTACHMENT 4
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28 by Purchaser, and Purchaser’s performance hereunder will not constitute a default under any agreement or instrument to which it is a party, or any order, judgment, decree or ruling of any court that is binding on Purchaser, or a violation of any applicable law of any governmental authority, which default or violation would have a material adverse effect on the financial condition of Purchaser’s power revenue fund.
8.6 Litigation. Purchaser represents and warrants to SCPPA as of the Effective Date and as of the date of the opinion of counsel referenced in Section 13.4 that, to Purchaser’s knowledge, except as disclosed, there are no actions, suits or proceedings pending against Purchaser (service of process on Purchaser having been made) in any court that questions the validity of the authorization, execution or delivery by Purchaser of this Agreement, or the enforceability on Purchaser of this Agreement.
9. OTHER TERMS AND SERVICES.
9.1 Delivery Procedures. Prior to the time at which any Energy will be delivered to Purchaser from the Facility, Purchaser will schedule and shall be obligated to take delivery of its Entitlement Share of the Energy to be delivered under this Agreement . The Facility Products generated and produced from the Project shall be scheduled and delivered to the Project Participants at the Point of Delivery under the practices and procedures approved pursuant to Section
6.3, as applicable.
9.2 Other Services and Transmission From Point of Delivery . It is the obligation of Purchaser to receive its share of the Energy from the Facility and to arrange for delivery of such Energy to its ultimate destination or destinations after having reached the Point of Delivery, as determined by Purchaser. However, to the extent specified by Purchaser, and to the extent practicable for SCPPA to do so, SCPPA shall assist in arranging for Supplementary Services and for such additional transmission, interconnection arrangements, energy management, firming, shaping, swaps, exchanges, or other services associated with the transmission, use, or disposition of Facility Products to be utilized by Purchaser and to provide for delivery, accounting for, transferring , and crediting the ownership and transfer of Facility Products from the Point of Delivery to any other points or destinations, as determined by Purchaser.
9.3 Energy Services. Except as otherwise provided in this Agreement and subject to Section 18.1, nothing herein shall prevent or restrict Purchaser from providing for its own transmission, energy management services, firming, balancing, or exchanging services or otherwise using or dispatching its Energy under this Agreement; provided, however, that such services, use, or activities shall not affect any of the obligations of Purchaser under this Agreement or, if applicable, result in or cause non -compliance with the Federal T ax Law Requirements, and shall at all times conform to the applicable requirements of Section 10 of this Agreement.
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29 9.4 Actions Respecting Facility Purchase . SCPPA shall endeavor to take those actions and carry forth those measures necessary to maintain and preserve SCPPA’s rights with respect to any purchase obligation or purchase or purchase option contained in the Power Purchase and Security Agreements and, if so determined pursuant to the terms of this Agreement, to facilitate any such purchase or acquisition of the Facility pursuant to the terms of the Power Purchase and Security Agreements or und er or pursuant to any consents, assignments, or any agreem ents relating thereto. SCPPA’s services in connection with any such purchase obligation or purchase option may include but is not limited to determining the advisability of such purchase, preparing such documents and instruments , carrying forth any diurnal, barometric meteorological or similar reporting, prepare any facility efficiency reports, economic, modeling or appraisal studies as may be desirable to facilitate any proposed transaction and to obtain any necessary or appropriate information in connection with any such potential purchase or acquisition of the Facility.
9.5 Balancing Agent, Pseudo-Tie, and Dynamic Scheduling. Upon the request of Purchaser, and to the extent practicable for SCPPA to do so, SCPPA shall either (a) retain an agent to maintain and balance Purchaser’s hourly Energy schedules in accordance with WECC protocols (“Balancing Agent”), including the provision or absorption of imbalance energy to accommodate intra -hour fluctuations of Facility Products as compared to Purchaser’s Energy schedule and maintaining a balancing account of accumulated imbalance energy to be settled by adjusting future Purchaser Energy schedules or (b) arrange for Pseudo-Tie or Dynamic Scheduling from the Point of Delivery to Purchaser’s control area or electric system, including the procurement and installation of scheduling hardware, software, and communications equipment necessary to effectuate Pseudo-Tie or Dynamic Scheduling (if such a scheduling methodology is deemed appropriate, applicable and/or otherwise feasible). In the event that a Pseudo-Tie or Dynamic Scheduling is implemented, SCPPA and the Project Participants shall collectively cooperate to do all t hings necessary and appropriate to deliver to the Point of Delivery each Project Participant’s capacity (as set forth in Appendix B of the Power Sales Agreements) in accordance with the Project Participants’ respective Entitlement Shares. Upon the request of Purchaser, and to the extent practicable for SCPPA to do so, SCPPA shall also (x) procure, contract for, or otherwise arrange for any available integration services to address any of the above referenced imbalances, fluctuations, variability, intermitte ncy, or like conditions or ( y) address the costs, charges , or consequences of such imbalances, fluctuations, variability, intermittency, or like conditions th rough other mechanisms or methodologies which are mutually agreeable to Purchaser and SCPPA.
9.6 Transfer of Environmental Attributes to P roject Participants . SCPPA shall transfer all Environmental Attributes received by SCPPA either under the Power Purchase Agreement or with respect to Facility Products following its purchase or acquisition of the Facility to the Project Participants in accordance with their respective Entitlement Shares in the same manner by which SCPPA ATTACHMENT 4
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30 receives Environmental Attributes under the Power Purchase Agreement or otherwise as may be determined by the Coordinating Committee.
10. FEDERAL TAX LAW REQUIREMENTS.
10.1 Purchaser to Provide Information Relevant to Compliance with Federal Tax Law Requirements. At such times and through such means as prescribed by the rules, procedures , and protocols promulgated by SCPPA to address compliance with the applicable Federal Tax Law Requirements with respect to any Bonds, or pursuant to any request by SCPPA, Purchaser shall provide SCPPA with a tax certificate relating to such Bonds, and such additional information and representations as necessary to establish Purchaser’s compliance with the Federal Tax Law Requirements, including, to the extent applicable, information and representations concerning the disposition or use of electric energy provided under this Agreement or the disposition or use of any assets acquired with the proceeds of such Bonds.
10.2 Compliance with Federal Tax Law Requirements. With respect to any Bonds, Purchaser agrees that it will promptly act in accordance with written instructions which SCPPA may reasonably require from time to time in connection with the Federal Tax Law Requirements, and in addition Purchaser will not at any time take any action, or fail to take any action, if such action or failure to take action would result in or cause non-compliance with Federal Tax Law Requirements. Purchaser agrees to execute new or revised tax certificates or provide such informat ion or other assurance respecting past and future compliance with the Federal Tax Law Requirements applicable to any Bonds as may be reasonably requested by SCPPA. In connection therewith, Purchaser shall cooperate with and provide to SCPPA such other inf ormation, representations, and certifications as necessary for Bond Counsel or Tax Counsel to render an opinion or advise to the effect that any applicable Federal Tax Law Requirements are met.
10.3 SCPPA to Issue Rules, Procedures and Protocols . SCPPA shall develop and promulgate such reasonable rules, procedures and protocols, together with amendments thereto, as necessary, in consultation with Bond Counsel or Tax Counsel, to ensure compliance with any applicable Federal Tax Law Requirements, including to establish expectations regarding future compliance under applicable laws and regulations existing from time to time with respect to any Bonds, and shall include, without limitation, the appropriate reporting, documentation, and certifications to establish and maintain compliance with the provisions of this Section 10.
11. PROJECT SPECIFIC MATTERS AND PURCHASER RIGHTS AND OBLIGATIONS UNDER PROJECT AGREEMENTS.
11.1 Rights and Obligations under the Project Agreements . Notwithstanding anything to the contrary contained herein: (i) the obligation of SCPPA to ATTACHMENT 4
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31 deliver Purchaser’s Entitlement Share of Facility Products during the Delivery Term of this Agreement is limited to the Facility Products which SCPPA receives from the Facility (or the Power Purchase Provider, as applicable) at the Point of Delivery for redelivery to Purchaser hereunder during such time; (ii) the obligation of SCPPA to pay any amount to Purchaser hereunder or to give credits against amounts due from Purchaser hereunder is limited to amounts SCPPA receives in connection with the transa ction to which the payment or credit relates (or is otherwise available to SCPPA in connection with this Agreement for which such payment or credit relates); (iii) any purchase costs, operating costs, energy costs, capacity costs, environmental attribute costs, transmission costs, tax costs, insurance costs, indemnifications, other costs or other charges for which SCPPA is responsible under the Project Agreements shall be considered purchase costs, operating costs, energy costs, capacity costs, environmental attr ibute costs, transmission costs, tax costs, insurance costs, indemnifications, other costs or other charges incurred by SCPPA and payable by Project Participants as provided in this Agreement; and (iv) any Force Majeure under the Power Purchase Agreement or other event of force majeure affecting the delivery of energy pursuant to applicable provisions of the Project Agreements shall be considered an event caused by Uncontrollable Forces affecting SCPPA with respect to the delivery of energy, and/or environmental attributes hereunder and SCPPA forwarding to Purchaser notices and information from the Power Purchase Provider concerning an event of Force Majeure upon receipt thereof shall be sufficient to constitute a notice that Uncontrollable Forces have occur red pursuant to Section 16.3 of this Agreement. Any net proceeds received by SCPPA from the sale of Facility Products by the Power Purchase Provider to any third -party purchaser as a result of a Force Majeure event or failure by SCPPA to accept delivery of Energy pursuant to the Power Purchase Agreement and any reimbursement received by SCPPA for purchase of Replacement En ergy shall be remitted by SCPPA to the Project Participants in accordance with their respective Entitlement Shares.
11.2 Acquisition of the Facility by SCPPA. The Parties mutually acknowledge and agree that SCPPA may, under certain circumstances, acquire ownership of the Facility and succeed to the rights and obligations associated with ownership of the Facility pursuant to the provisions of the Power Purchase and Security Agreements, at such time and under such terms as provided in the Power Purchase and Security Agreements or on such other terms as may be agreed upon between SCPPA and the Power Purchase Provider , or otherwise. The Parties also anticipate th at any acquisition of the Facility may be carried out with SCPPA financing. Any such acquisition of the Facility shall require the prior consideration or approval of the Burbank City Council . If SCPPA purchases the Facility pursuant to the Power P urchase and Security Agreements, SCPPA may finance the associated Cost of Acquisition through the issuance of Bonds.
12. PLEDGE OF PAYMENTS . All or any portion of the payments required to be made by Purchaser in accordance with or pursuant to any provision of this Agreement may be pledged by SCPPA to secure the payment of the Bonds, and interest thereon, subject to the application ATTACHMENT 4
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32 thereof to such purposes and on such terms as provided in the Indenture, and as required by the Act. SCPPA may assign, among other rights and security, to the Project Trustee or Lender its rights to receive from Purchaser all or any portion of the payment s to be made by Purchaser pursuant to this Agreement. SCPPA may direct Purchaser to make all or any portion of such payments directly to the Project Trustee or Lender for application by the Project Trustee or Lender under the Indenture. Notwithstanding t he foregoing or any other provision of this Agreement, SCPPA shall not acquire the Facility unless there shall be compliance with the applicable provisions of Section 10 and with the provisions of the Indenture applicable to the acquisition of the Facility.
13. ISSUANCE OF BONDS.
13.1 Issuance of Bonds . Bonds will be issued by SCPPA in accordance with this Agreement, the provisions of the Indenture , and the Act for the purpose of financing the Cost of Acquisition, which may entail, among other things , the purchase or acquisition of the Facility and all associated assets, rights and interests under or pursuant to the Power Purchase and Security Agreements, all other Acquisitions and all Capital Improvements.
13.2 Additional Bonds. Additional Bonds may be issued by SCPPA in accordance with this Agreement, the provisions of the Indenture , and the Act at any time and from time to time in the event funds are required for completion of the Project or for the purpose of financing any further Cost of Acquisition or other Acquisitions or Capital Improvements, including without limitation the cost of acquiring the Facility or the rights and interests otherwise described in Section 11.2, and upon approval of the Board of Directors, SCPPA shall use its best efforts to issue such additional Bonds.
13.3 Refunding Bonds. In the event that Monthly Costs may be reduced by the refunding of any of the Bonds or in the event it shall otherwise for the Project Participants be advantageous, in the opinion of SCPPA, to refund any Bonds, SCPPA may issue and sell refunding Bonds in accordance with the Indenture and the Act.
13.4 Opinions of Counsel . In connection with the issuance of Bonds, additional Bonds or Refunding Bonds for the purposes described in this Section 13, Purchaser shall provide an opinion of an attorney or firm of attorneys, or the equivalent thereof, in substantially the form as attached hereto as Appendix C as may be reasonably necessary to facilitate the issuance of such Bonds.
13.5 Redemption or Payment of Bonds . SCPPA may issue such bonds, notes, certificates of participation, commercial paper, other evidences of indebtedness or other instruments, in accordance with the Indenture and the Act, as it may deem appropriate to facilitate the redemption or payment of Bonds.
13.6 Bond-Related Documents. Purchaser agrees to supply SCPPA, upon written request, with such additional information and documentation as SCPPA shall reasonably determine to be necessary or desirable to facilitate the issuance of Bonds, additional Bonds or refunding Bonds for the purposes described in this ATTACHMENT 4
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33 Section 13 and to comply with Federal Tax Law Requirements and continuing disclosure requirements including, but not limited to, requirements under the United States Securities and Exchange Commission Rule 15c2-12.
14. EXCESS BOND PROCEEDS. In the event the proceeds derived from the sale of any Bonds exceed the aggregate amount required for the purposes for which such Bonds were issued, the amount of such excess shall be used, after prior consultation with Bond Counsel or Tax Counsel, to make up any deficiency existing in any Funds under the Indenture in the manner therein provided, and any balance shall (i) be used to retire, by purchase or redemption, Bonds in advance of maturity, (ii) be deposited in any applicable account established in accordance with Section 7.8 hereof, (iii) reduce the payments by the Project Participants required pursuant to Section 7 hereof, and in such event SCPPA will reduce the monthly Billing Statements of the Project Participants as necessary and appropriate, or (iv) be used for other lawful Project expenses or purposes.
15. NONPERFORMANCE AND PAYMENT DEFAULT.
15.1 Nonperformance by Project Participants. If a Project Participant shall fail to perform any covenant, agreement or obligation under this Agreement or shall cause SCPPA to be in default with respect to any undertaking entered into for the Project or to be in default under the Power Purchase Agreement, or any other Project Agreement, as applicable, or cause a default to occur pursuant to such agreements, SCPPA may, in the event the performance of any such obligation remains unsatisfied after 30 days’ prior written notice thereof to such Project Participant and a demand to so perform, take any action permitted by law to enforce its rights under such Project Participant’s Power Sales Agreement, including but not limited to termination of such Project Participant’s Power Sales Agreement, and/or (unless SCPPA has already taken action pursuant to the immediately following sentence) bring any suit, action or proceeding at law or in equity as may be necessary or appropriate to recover damages and/or enforce any covenant, agreement or obligation against such Project Participant with regard to its failure to so perform. In addition to any other rights SCPPA may have under the Power Sales Agreements as a result of nonpayment by a Project Participant, if a Project Participant fails to pay Debt Service in accordance with this Agreement and the result is that SCPPA defaults on the payment of principal of or interest on any Bond or other obligations payable from the Debt Service Fund under the Indenture, SCPPA may, immediately an d without delay, take any action p ermitted by law to enforce its rights under such Project Participant’s Power Sales Agreement and/or bring any suit, action , or proceeding at law or in equity as may be necessary or appropriate to recover damages and/or enforce any covenant, agreement, or obligation against such Project Participant with regard to its failure to so perform.
15.2 Notice of Payment Default . On or promptly following the Initial Payment Default Date by a Project Participant, SCPPA shall issue a Default Invoice and shall provide written notice to such Project Participant that as a result of a Payment Default it is in default under this Agreement and has assumed the status of the Defaulting Project Participant and that such Project Participant’s ATTACHMENT 4
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34 Project Rights are subject to discontinuance, termination and disposal in accordance with Sections 15.4 and 15.5 of this Agreement. Notice of such Payment Default shall be provided promptly by SCPPA to the other Project Participants and the Project Trustee or Lender. In addition to the foregoing, the notice of Payment Default shall specify that five days after the issuance of the written notice of Payment Default by SCPPA, deliveries of Facility Products to the Defaulting Project Participant pursuant to such Project Participant’s Power Sales Agreement shall be thereafter suspended until such time as such Defaulting Project Participant is in Compliance. SCPPA may take any action through or in conjunction with the Power Purchase Provider or any other counterparty under a Project Agreement or with the Project Manager, if applicable, to expeditiously carry forth the provisions of this Section 15.
15.3 Cured Payment Default. Except for a Payment Default which causes SCPPA to default on the payment of principal of or interest on Bonds or other obligations payable from the Debt Service Fund under the Indenture, which shall be subject to and addressed as provided in Section 15.4 and the other applicable sections of this Agreement, and except as provided in Sections 15.2 and 15.12, if after a Payment Default, the Defaulting Project Participant cures such Payment Default within 30 days (the Cure Period) its Project Rights shall not be subject to discontinuance, termination or disposal as provided for in Sections 15.4 and 15.5 of such Project Participant’s Power Sales Agreement as a result of any Payment Default associated with such Cured Payment Default.
15.4 Failure to Cure Payment Default . If at any time 30 days after an uncured Payment Default by a Defaulting Project Participant , such Defaulting Project Participant fails to be in Compliance, or if at any time SCPPA defaults on the payment of principal of or interest on any Bond, or other obligations payable from the Debt Service Fund under the Indenture, due to the failure of such Defaulting Project Participant to pay its share of Debt Service in a timely manner in accordance with such Project Participant’s Power Sales Agreement, such Def aulting Project Participant’s Project Rights shall immediately be discontinued and terminated and its Project Rights and Obligations shall be disposed of by SCPPA in accordance with Section 15.5 of such Project Participant’s Power Sales Agreement ; provided, however, the Defaulting Project Participant ’s obligation to make payments under such Project Participant’s Power Sales Agreement shall not be eliminated or reduced except to the extent provided in Section 15.6. SCPPA shall provide to the Defaulting Project Participant a separate monthly invoice of any such payment obligations under such Project Participant’s Power Sales Agreement . SCPPA shall immediately notify the Project Manager, the other Project Participant, the Project Trustee or Lender, and such others as SCPPA deems appropriate, of such discontinuance and termination of the Defaulting Project Participant ’s Project Rights.
15.5 Treatment of the Defaulting Project Participant ’s Project Rights and Obligations upon Payment Default . In the event a Defaulting Project Participant’s Project Rights are discontinued and terminated pursuant to Section 15.4 of such Project Participant’s Power Sales Agreement , SCPPA ATTACHMENT 4
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35 shall undertake or cause to be undertaken the following actions in the order indicated:
15.5.1 SCPPA shall, to the extent permitted under the Project Agreements, offer to convey, transfer and assign , on a temporary or permanent basis as determined by SCPPA to (i) all requesting non-defaulting Project Participants the amount of Project Rights and Obligations requested if the aggregate of such requests does not exceed the amount of the Project Rights and Obligations of the Defaulting Project Participant, or (ii) all requesting non -defaulting Project Participants on a pro-rata basis (based upon the amount requested) if the aggregate of such requests equals or exceeds the amount of the Project Rights and Obligations of the Defaulting Project Participant. Each such requesting non -defaulting Project Participant shall assume all, but not less than all, Project Rights and Obligations so conveyed, transferred, and assigned to it by SCPPA.
15.5.2 If all of the Defaulting Project Participant ’s Project Rights and Obligations are not conveyed, transferred, and assigned to the non- defaulting Project Participant s as provided in Section 15.5.1, SCPPA shall, to the extent permitted under the Project Agreements and to the extent SCPPA in its discretion determines it appropriate, offer to convey, transfer, and assign, on a temporary or permanent basis as determined by SCPPA, the remaining (or all, if applicable) Project Rights and Obligations of the Defaulting Project Participant to third parties, all in accordance with applicable law; provided, however, that SCPPA shall not offer or permit the conveyance, transfer or assignment of the Defaulting Pro ject Participant ’s Project Rights and Obligations in such a manner or in such an amount as would, in the opinion of Bond Counsel or Tax Counsel, result in or cause non -compliance with the Federal Tax Law Requirements relating to (if applicable) the Bonds. Each such third party transferee shall assume all, but not less than all, Project Rights and Obligations so conveyed, transferred and assigned to it by SCPPA. If such third party is a SCPPA member but not a Project Participant as defined herein, such SC PPA member, upon accepting such conveyance, transfer, and assignment on a permanent basis, shall be deemed a Project Participant.
15.5.3 If, at any time or from time to time, any of the Project Rights and Obligations of the Defaulting Project Participant are not conveyed, transferred, and assigned as provided in Sections 15.5.1 and 15.5.2, SCPPA shall use its best efforts, to the extent reasonably possible and economically beneficial, to offer all non -defaulting Project Participants and third parties for long-term or short -term sale as determined by SCPPA, Facility Products associated with such Project Rights and Obligations or to remarket or resell such Facility Products, or cause the same to be remarketed or resold; provided, however, that SCPPA shall not offer or permit the sale or ATTACHMENT 4
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36 remarketing of such Facility Products associated with a Defaulting Project Participant’s Project Rights in such a manner or in such an amount as would, in the opinion of Bond Counsel or Tax Counsel, result in or cause non -compliance with the Federal Tax Law Requirements relating to (if applicable) the Bonds; and provided further, however, that without eliminating the Defaulting Project Participant’s obligation to make payments under this Power Sales Agreement (notwithstanding anything to the contrary herein) , including payment of SCPPA’s costs and expenses related to such default and sale, such payment obligation shall be satisfied to the extent that payments are received by SCPPA from the remarketing or sale of Facility Products associated with such Defaulting Project Participant’s Project Rights. If at the time of any Coordinating Committee meeting or Board of Directors meeting, any of the Defaulting Project Participant’s Project Rights and Obligations are not conveyed, transferred and assigned as provided in Sections
15.5.1 or 15.5.2, the associated voting rights with respect to such Defaulting Project Participant ’s Project Rights and Obligations shall be redistributed pro rata among the non-defaulting Project Participants, based upon the Entitlement Share of each such Project Participant, such that that total voting rights remain at one hundred percent (100%).
Except as provided in this Section 15.5, if Purchaser is a Defaulting Project Participant, or otherwise in this Agreement, SCPPA may not convey, transfer, or assign any of Purchaser’s Project Rights and Obligations without Purchaser’s prior written consent.
15.6 Elimination or Reduction of Payment Obligations . Upon termination of a Defaulting Project Participant’s Project Rights pursuant to Section 15.5 and the conveyance, transfer, or assignment of such Defaulting Project Participant’s Project Rights and Obligations pursuant to Sections 15.5.1 and/or 15.5.2, such Defaulting Project Participant ’s obligation to make payments under this Agreement (notwithstanding anything to the contrary herein) shall not be eliminated or reduced except to the extent of moneys received by SCPPA as a result of the conveyance, transfer and assignment of such Defaulting Project Participant’s Project Rights and Obligations, less SCPPA’s related costs and expenses; provided, however, such payment ob ligations for the Defaulting Project Participant may be eliminated or reduced to the extent permitted by law, if and to the extent costs incurred by SCPPA have been fully paid, and (a) no Bonds are outstanding or adequate provision for the payment thereof has been made in accordance with the applicable provisions of the Indenture and (b) the Board of Directors, by resolution, determines to eliminate or reduce such payment obligation s, which determination shall not be unreasonably withheld.
15.7 Use of Operating Reserve Account . With respect to a Payment Default by a Defaulting Project Participant, funds in the operating reserve account, if any, whether held by SCPPA or held under the Indenture may be used, to the extent necessary and to the extent available and consistent with the Indenture, to cover ATTACHMENT 4
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37 any deficiency with respect to any payment due by SCPPA attributable to such Defaulting Project Participant’s participation in the Project under the Indenture during the period prior to the Operating Reserve Depletion Date. Any replenishing of the operating reserve account under the Indenture shall be in accordance with the Indenture. The replenishing of any operating reserve account held by SCPPA shall be in accordance with the rules and protocols promulgated by SCPPA.
15.8 Use and Replenishment of Debt Service Reserve Fund(s) . SCPPA may maintain Debt Service Reserve Fund(s) which shall be funded and maintained in the amount(s) specified in the Indenture. With respect to a Payment Default by a Defaulting Project Participant, funds (or any surety bond, credit facility or similar instrument) in the Debt Service Reserve Fund(s) under the Indenture shall be used, to the extent necessary and to the extent available, to cover any shortfall in the Debt Service account(s) relating to the Indenture to pay for Debt Service (but, unless otherwise provided in the Indenture, not the payment of other obligations payable from amounts deposited in the Debt Service Fund).
The replenishment of the Debt Service Reserve Fund(s) shall be in accordance with the Indenture.
15.9 Step-Up Invoices. Step-Up Invoices shall be issued in accordance with the provisions set forth below.
15.9.1 In the event of a Payment Default by one or more Defaulting Project Participants, SCPPA shall provide by the fifth (5th) day of the Month following such Payment Default a separate Step-Up Invoice to each non -defaulting Project Participant that specifies such non-defaulting Project Participant’s pro rata share, based on the Project Cost Share of each such non-defaulting Project Participant, of the amount of the Payment Default with respect to the Indenture cost component (described in Section 4.4.4 hereof) set forth in the Billing Statement for the Defaulting Project Participant(s). Notwithstanding the previous sentence, (i) the amount of a Step-Up Invoice provided to a Project Participant that is not a Defaulting Project Participant under this Section 15.9.1 shall not exceed one hundred percent (100%) of the amount that such Project Participant was billed for the Indenture cost component in its Billing Statement for the Month preceding such monthly Step-Up Invoice and (ii) following the Operating Reserve Depletion Date, the provisions of Section 15.9.2 hereof shall apply and no additional Step-Up Invoices shall be issued pursuant to this Section 15.9.1 with respect to such Payment Default.
15.9.2 In the event of a Payment Default by one or more Defaulting Project Participants, which is in existence following the Operating Reserve Depletion Date, SCPPA shall provide by the fifth (5th) day of the Month following such Operating Reserve Depletion Date, a separate Step-Up Invoice to each non-defaulting Project Participant that includes a charge equal to such non-defaulting Project ATTACHMENT 4
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38 Participant’s pro rata share, based upon the Project Cost Share of all non -defaulting Project Participant s, of the amount of Power Costs included in the unpaid Billing Statements for the previous Month for the Defaulting Project Participant (s). Notwithstanding the foregoing, the amount of each monthly Step -Up Invoice provided to each non -defaulting Project Participant shall not exceed one hundred percent (100%) of the aggregate amount that such non-defaulting Project Participant was billed with respect to the Power Costs in its Billing Statement for the Month preceding such monthly Step-Up Invoice.
15.9.3 Step-Up Invoices shall be due and payable within twenty (20) days of the receipt thereof, and payments to SCPPA with respect to Step- Up Invoices shall be separate from any other payments due under each Project Participant’s Power Sales Agreement, including , but not limited to, monthly Billing Statement payments.
15.10 Application of Moneys Received from Step -Up Invoices. Payments received by or on behalf of SCPPA from Step-Up Invoices relating to a Payment Default of a Project Participant shall be applied in the following manner:
15.10.1 Moneys received from a Project Parti cipant that is not the Defaulting Project Participant with respect to the Indenture cost component of Power Costs, as set forth in the Step-Up Invoices, to the extent such moneys relate to Debt Service, shall be forwarded to the Project Trustee or Lender f or deposit directly into the Debt Service Reserve Fund(s) under the Indenture, and to the extent such moneys relate to any other portion of the Indenture cost component, shall be forwarded to the Project Trustee or Lender for deposit into such other Funds as are appropriate under the Indenture.
15.10.2 Moneys received from a Project Participant that is not the Defaulting Project Participant with respect to the amount of Power Costs, other than the Indenture cost component of Power Costs, as set forth in the Step-Up Invoices shall be forwarded to the Project Trustee or Lender for deposit into the Revenue Fund under the Indenture, as appropriate, or into such other Funds as are appropriate under the Indenture.
15.10.3 In the event a Project Participant that is not the Defaulting Project Participant pays less than the total amount of its Step -Up Invoice, such Project Participant shall become a Defaulting Project Participant and its partial payment shall be allocated in the following order: (i) toward all Power Costs, except the Indenture cost component, and (ii) toward the Indenture cost component of Power Costs.
15.11 Application of Moneys Received from a Default Invoice. Moneys received by or on behalf of SCPPA from a Defaulting Project Participant’s payment of a ATTACHMENT 4
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39 Default Invoice shall be credited on each of the non-defaulting Project Participant’s next monthly Billing State ment(s) in an amount equal to the aggregate amount such non-defaulting Project Participant paid as a result of Step-Up Invoices with respect to such Default Invoice, plus a pro rata share, based upon the Project Cost Shares of such non-defaulting Project Participants, of the amount SCPPA received regarding late payment interest charges. In the event that a Defaulting Project Participant pays less than the full amount of its Default Invoice, the credit to each non -defaulting Project Participant shall be adjusted proportionately.
15.12 Application of Moneys Received from Compliance Payments . Moneys received by or on behalf of SCPPA from a Defaulting Project Participant, as payment to remain in Compliance with respect to a Payment Default , shall be credited on the other Project Participant’s next monthly Billing Statement(s) in an amount equal to the aggregate amount such other Project Participant s paid as a result of Step-Up Invoices with respect to such Compliance payment, plus a pro rata share, based upon the Project Cost Share of such other Project Participant, of the amount SCPPA received regarding late payment interest charges.
15.13 Application of Moneys Received from Sale of Facility Products . Moneys received by or on behalf of SCPPA from the sale of Facility Products related to a Defaulting Project Participant ’s Project Rights and Obligation s, as provided in Section 15.5.3 hereof, shall be applied in the following manner in order:
15.13.1 SCPPA shall credit on the next monthly Billing Statement(s) of each of the non-defaulting Project Participants an amount up to, but not in excess of, the aggregate amount paid to SCPPA by such non- defaulting Project Participant with respect to each such Project Participant’s Step-Up Invoices.
15.13.2 SCPPA shall forward or cause to be forwarded to the applicable Project Trustee or Lender for deposit into the Revenue Fund of the Indenture, as appropriate, or into such other Funds as are appropriate under the Indenture, the applicable portion of such moneys.
15.13.3 Following consultation with the non-defaulting Project Participants, SCPPA shall determine the disposition of any moneys received that are in excess of the aggregate amount of related Step- Up Invoices paid by non-defaulting Project Participants. Except as otherwise required by law, the Defaulting Project Participant shall have no claim or right to any such moneys.
15.14 Limitation on Cure Period . Notwithstanding anything to the contrary in this Agreement, there shall be no Cure Period with respect to a Project Participant’s failure to pay those costs constituting Debt Service in a timely manner in ATTACHMENT 4
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40 accordance with this Agreement, and any such Debt Service not paid by a Project Participant when due shall be immediately due and payable to SCPPA.
16. CHARACTER, CONTINUITY OF SERVICE.
16.1 Outages, Interruptions and Curtailment of Energy Deliveries . The Power Purchase Provider or other counterparty may under certain conditions set forth in the applicable provisions of a Project Agreement or other applicable operating agreement, interrupt or curtail deliveries of Facility Products to SCPPA which SCPPA was to deliver to the Project Participants. Should such an interruption or curtailment occur, each Project Participant shall be credited with such revenues as are credited or paid to SCPPA on such Project Participant’s behalf, in accordance with such Project Participant’s Entitlement Share, and shall be obligated to pay any costs incurred by SCPPA attributable to such Project Participant, in accordance with such Project Participant’s Project Cost Share, which are payable by SCPPA pursuant to the Power Purchase Agreement, other applicable Project Agreement or other applicable operating agreement. SCPPA or the Project Manager (if other than SCPPA) or SCPPA’s agent will use its best efforts to apprise the Project Participants of potential outages, interrup tions, or curtailments, the reason therefor and the probable duration thereof, when such outages, interruptions , or curtailments can be deemed likely to occur.
16.2 Outages, Interruptions and Curtailment of Energy from the Facility. Following SCPPA’s purchase or acquisition of the Facility, SCPPA or its agent or the Project Manager, as applicable, may temporarily interrupt or curtail deliveries of Facility Products to the Project Participants if SCPPA or its agent or the Project Manager, as applicable, shall determine that such interruption or curtailment is necessary in the case of an emergency or in order to take out of service the Facility or any portion thereof; or to install equipment in or make repairs to or replacements, inve stigations, and inspections of or to perform other maintenance work on the Facility or any portion thereof; provided, however, that such interruption or curtailment shall not relieve the Project Participants of their obligations to make payments under their respective Power Sales Agreements. After informing the Project Participants regarding any such planned interruption or curtailment, giving the reason therefor, and stating the probable duration thereof, SCPPA, its agent or the Project Manager, as applicable, will to the best of its ability schedule such interruption or curtailment at a time which will cause the least interference with the system operations of the Project Participants.
16.3 Uncontrollable Forces. SCPPA shall not be required to provide, and SCPPA shall not be liable for failure to provide, Facility Products , Replacement Energy, or other service under this Agreement when such failure or the cessation or curtailment of or interference with the service is caused by Uncontrollable Forces or by the inability of SCPPA, the Power Purchase Provider (to the extent allowed under the Power Purchase Agreement) or other applicable counterparty to obtain any required governmental permits, licenses, or approvals to enable SCPPA or the Power Purchase Provider, as applicable, ATTACHMENT 4
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41 to acquire, administer , or operate the Project; provided, however, that the Project Participants shall not thereby be relieved of their obligations to make payments under their respective Power Sales Agreements except to the extent SCPPA is so relieved pursuant to the Indenture and/or other applicable Project Agreements.
17. LIABILITY.
17.1 Project Participants’ Obligations Several . The Project Participants shall be severally responsible and liable for performance under their respective Power Sales Agreements. The obligation of Purchaser to make payments under this Agreement is a several obligation and not a joint obligation with those of the other Project Participants under each of the other Power Sales Agreement s to which each of the other Project Participants is a party.
17.2 No Liability of SCPPA or Purchaser, Their Directors, Officers, Etc .; SCPPA, Purchaser’s and Project Manager’s Directors, Officers, Employees Not Individually Liable. Both Parties agree that neither SCPPA, Purchaser, the Project Manager, nor any of their past, present or future directors, officers, employees, board members, agents, attorneys or advisors (collectively, the “Released Parties”) shall be liable to any other of the Released Parties for any and all claims, demands, liabilities, obligations, losses, damages (whether direct, indirect or consequential), penalties, actions, loss of profits, judgments, orders, suits, costs, expenses ( including attorneys’ fees and expenses) , or disbursements of any kind or nature whatsoever in law, equity , or otherwise (including, without limitation, death, bodily injury , or personal injury to any person or damage or destruction to any property of Purchaser, SCPPA, the Project Manager or third persons) suffered by any Released Party as a result of the action or inaction or performance or non -performance by the Power Purchase Provider under the Power Purchase and Security Agreements or any of the Released Parties under this Agreement or any Project Agreement (excluding gross negligence and willful misconduct, which, unless otherwise agreed to by the Parties, are both to be determined and established by a court of competent jurisdiction in a final, non -appealable order). Each Party shall release each of the other Released Parties from any claim or liability that such Party may have cause to assert as a result of any actions or inactions or performance or non -performance by any of the other Released Parties under this Agreement or any Project Agreement (excluding gross negligen ce and willful misconduct, which, unless otherwise agreed to by the Parties, are both to be determined and established by a court of competent jurisdiction in a final, non-appealable order). Notwithstanding the foregoing, no such action or inaction or performance or non -performance by any of the Released Parties shall relieve SCPPA or Purchaser from their respective obligations under this Agreement, including, without limit ation, Purchaser’s obligation to make payments required under Section 8.1 of this Agreement and SCPPA’s obligation to make payments under Section 17. 7 of this Agreement, or under any other Project Agreement. The provisions of this Section 17.2 shall not be construed so as to relieve the Project Manager or the Power Purchase Provider from any obligation (or liability in the case of the Power Purchase Provider) ATTACHMENT 4
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42 under this Agreement, the Power Purchase Agreement and Security Agreements, or any other applicable Project Agreement. It is also hereby recognized and agreed that no member of the Board of Directors, the Project Manager or Purchaser, nor their officers, employees, board members, agents, attorneys or advisors, or member of SCPPA in its capacity as a member of SCPPA, shall be individually liable in respect of any undertakings by any of the Released Parties under this Agreement or any Project Agreement. Nothing in this Se ction 17.2 or in any other provision of this Agreement shall affect Purchaser’s obligation to make any payment in accordance with Section 8.1 or any other provision of this Agreement or to pay any other amounts or costs required to be paid by it under this Agreement.
17.3 Extent of Exculpation; Enforcement of Rights. The exculpation provision set forth in Section 17.2 hereof shall apply to all types of claims or actions including, but not limited to, claims or actions based on contract or tort.
Notwithstanding the foregoing, either Party may protect and enforce its rights under this Agreement by a suit or suits in equ ity for specific performance of any obligations or duty of the other Party, and each Party shall at all times retain the right to recover, by appropriate legal proceedings, any amount determined to have been an overpayment, underpayment or other monetary damages owed by the other Party in accordance with the terms of this Agreement.
17.4 Determination or Enforcement of Rights . Notwithstanding Sections 17.2 and
17.3 hereof, Purchaser or SCPPA may determine, protect, and enforce its rights under this Agreement or any Project Agreement by a suit(s) in equity for specific performance of, or declaratory action with respect to, any obligation or duty hereunder or thereunder.
17.5 No Relief From Insurer’s Obligations . Notwithstanding any provision in this Agreement to the contrary, including but not limited to the provisions in this Section 17, the provisions of this Section 17 shall not be construed or applied so as to relieve any insurer of its obligation to pay any insurance claims in accordance with any applicable insurance policy.
17.6 No General Liability of SCPPA . The undertakings under this Agreement by SCPPA, or the Project Manager in its capacity as such, shall never constitute a debt or indebtedness of SCPPA or the Project Manager within the meaning of any provision or limitation of the Constitution or statutes of the State of California, and shall not constitute or give rise to a charge against its general credit.
17.7 Indemnification of Purchaser . SCPPA undertakes and agrees, to the extent permitted by law, to indemnify and hold harmless Purchaser, its directors, board members, officers, employees, agents, attorneys and advisors, past, present or future (collectively, “Purchaser Indemnitees”), from and against any and all claims, demands, liabilities, obligations, losses, damages (whether direct, indirect or consequential), penalties, actions, loss of profits, judgments, orders, suits, costs, expenses (including attorneys’ fees and expenses ,) or disbursements of any kind or nature whatsoever in law, equity , or otherwise ATTACHMENT 4
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43 (collectively, “ Losses”), which Loss es include , without limitation, death, bodily injury, or personal injury to any person or damage or destruction to any property of Purchaser, SCPPA or third persons , that may be imposed on, incurred by or asserted against Purchaser arising by manner of any breach of this Agreement by SCPPA, or the negligent acts, errors, omissions , or willful misconduct incident to the performance of this Agreement on the part of SCPPA or any of SCPPA’s directors, board members, officers, employees, agents, and advisors, past, present , or future. At Purchaser’s option, SCPPA shall defend Purchaser Indemnitees from and against any and all Losses. If SCPPA, with Purchaser’s consent, defends any Purchaser Indemnitee, Purchaser and Purchaser’s City Attorney shall approve the selection of counsel, and Purchaser shall further approve any settlement or disposition, such approval not to be unreasonably withheld. Nothing in this Section 17. 7 or in any other provision of this Agreement shall affect Purchaser’s obligation to make any payment in accordance with Section 8.1 of this Agreement or to pay any other amounts or costs required to be paid by it under this Agreement.
17.8 Indemnification of Project Manager. The Parties acknowledge that SCPPA is obligated, as provided under Section 17 of the Milford Solar Phase II Agency Agreement, to indemnify and hold harmless LADWP, as Project Manager, the LADWP Board of Water and Power Commissioners and LADWP’s officers, employees, agents, and advisors, past, present , or future, when acting for LADWP as Project Manager (collectively, the “ Project Manager Indemnitees”), from and against any and all Losses, which Losses include , without limitation, death, bodily injury , or personal injury to any person or damage or destruction to any property of LADWP, SCPPA , or third persons, arising by reason of any actions, inactions, errors, or omissions incident to the performance of the Milford Solar Phase II Agency Agreement (excluding gross negligence and willful misconduct , which, unless otherwise agreed by the Parties, are both to be determined and established by a court of competent jurisdiction in a final, non -appealable order) on the part of any of the Project Manager Indemnite es, when acting for LADWP as Project Manager. It is further acknowledged by the Parties that all payments, costs and expenses of SCPPA with respect to compliance with such indemnification obligations under Section 17 of the Milford Solar Phase II Agency Agreement shall be payable as Monthly Costs by the Project Participants in accordance with the terms of their respective Power Sales Agreements . Notwithstanding any provision of this Agreement which might be construed to the contrary, nothing in this Secti on 17.8 or in any other provision of this Agreement shall affect LADWP’s obligation, as Purchaser under this Agreement, or the obligations of each other Project Participant under its Power Sales Agreement, to make any payment or to pay any cost required of it in accordance with each such Project Participant’s Power Sales Agreement , or SCPPA’s obligation to make any payment or to pay any cost required of it under the Milford Solar Phase II Agency Agreement.
17.9 Separate Legal Capacities. The Parties acknowledge that LADWP, as Project Manager under the Milford Solar Phase II Agency Agreement, acts in a legal capacity that is separate from its capacity as Purchaser and a Party under this ATTACHMENT 4
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44 Agreement. Accordingly, for purposes of this Agreement and applicable Project Agreements, the rights, entitlements, obligations and liabilities of LADWP, as Purchaser and a Party under this Agreement, shall not apply to or otherwise be affected by, and sh all be legally separate from, the rights, entitlements, obligations and liabilities of LADWP in its capacity as Project Manager.
18. RESTRICTIONS ON DISPOSITION.
18.1 Limitations Concerning Private Use. Purchaser recognizes that certain Federal Tax Law Requirements, if applicable, limit the arrangements permitted with respect to the purchase, sale, assignment , or other disposition of Purchaser’s Project Rights and Obligations. Purchaser shall comply with the rules, procedures, and protocols promulgated by SCPPA pursuant to Section 10.3 with respect to compliance with the Federal Tax Law Requirements applicable to any Bonds. Except as provided in Section 15 hereof, no sale, assignment, or other disposi tion of all or any portion of Purchaser’s Project Rights and Obligations, including Purchaser’s Entitlement Share of the Facility Products, shall be effective until (i) Purchaser shall have given prior written notice thereof to SCPPA, and (ii) unless waived by the Board of Directors after consultation with Bond Counsel or Tax Counsel, Bond Counsel or Tax Counsel shall have rendered an opinion that such sale, assignment, or other disposition will not result in or cause non-compliance with any applicable Federal Tax Law Requirements and will not be inconsistent with this Agreement .
Notwithstanding the immediately preceding sentence, Purchaser may (without giving such notice or obtaining such opinion) contract to provide or otherwise sell or dispose of its Entitlement Share of the Facility Products in a transaction which complies with guidelines established by SCPPA and approved by SCPPA’s Bond Counsel or Tax Counsel from time to time.
18.2 Restrictions on Elimination of Payment Obligations . No sale, assignment, or other disposition of Purchaser’s Project Rights and Obligations to any Person (“Assignee”) that occurs when any Bonds are outstanding shall release Purchaser from its payment obligations under this Agreement; provided, however, such payment obligations may be eliminated or reduced if no Bonds are outstanding or adequate provisions for the payment thereof have been made in accordance with the provisions of the Indenture if (i) such Assignee shall assume and agree to fully perform a nd discharge the Project Rights and Obligations under this Agreement, (ii) such Assignee shall have a corporate or long-term senior unsecured credit rating of “A-“ or higher by S&P or “A3” or higher by Moody’s, and (iii) the Board of Directors, by resolution, determines to eliminate or reduce such payment obligations, which determination shall not be unreasonably withheld.
18.3 Restrictions on Disposition of Purchaser’s Entire System. Purchaser shall not sell, lease or otherwise dispose of all or substantially all of its electric system to any Person (“ Acquiring Entity”) unless the following conditions shall be met: (A) in the event that Bonds are outstanding then (i) Purchaser shall assign its Project Rights and Obligations hereunder to such Acquiring Entity and such ATTACHMENT 4
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45 Acquiring Entity shall assume and agree to fully perform and discharge the Project Rights and Obligations under this Agreement, (ii) such sale, lease or other disposition shall not, in and of itself, cause the rating of any Bonds to be downgraded, suspended, or withdrawn (which fact shall be evidenced by letters of the rating agencies then rating the Bonds), and (iii) such sale, lease or other disposition will not adversely affect the value of this Agreement as security for the payment of the Indenture cost component; (B) in the event that no Bonds are outstanding or adequate provisions for the payment thereof have been made in accordance with the provisions of the Indenture then (i) such Acquiring Entity shall assume and agree to fully perform and discharge the Project Rights and Obligations under this Agreement, and (ii) such Acquiring Entity shall have a corporate or long -term senior unsecured credit rating not less than investment grade; and (C) in all cases, unless waived by SCPPA after consultation with Bond Counsel or Tax Counsel, Bond Counsel or Tax Counsel shall have rendered an opinion that such sale, lease or other disposition will not result in or cause non -compliance with any applicable Federal Tax Law Requirements with respect to any Bonds.
18.4 Successors and Assigns. Subject in all respects to Sections 15 and 18 hereof, the Project Rights and Obligations under this Agreement shall inure to the benefit of and shall be binding upon the respective successors and assigns of the Parties to this Agreement.
19. REIMBURSEMENT OF PROJECT DEVELOPMENT COSTS. Within 90 days after the issuance of the first Bonds , all of the following project development costs and expenses and other applic able costs for Development Work paid by Purchaser prior to the date of such issuance, to the extent reimbursable under applicable tax law and regulations, shall be reimbursed to Purchaser by SCPPA from the proceeds of the Bonds (in an amount determined to be reasonable by the Coordinating Committee or Board of Directors, as appropriate): costs of planning and development of the Project; costs relating t o any acquisition of the Project; costs of investigation and feasibility studies; technical, legal and financing expenses; legal costs including but not limited to the costs of Bond Counsel, Tax Counsel, electric utility counsel, secured transaction and re al estate specialists, solar energy counsel, environmental counsel, bankruptcy counsel, and counsel experienced in securing and facilitating this transaction under California and Federal law, costs of obtaining permits, clearances, licenses, entitlements, and approvals or other governmental authorizations, options or rights therein; costs of preparing agreements or other documents; and other costs relating to the Project in amounts determined to be reasonable by the Board of Directors.
20. EFFECTIVE DATE, TERM AND EXPIRATION.
20.1 Effective Date; Execution in Counterparts . This Agreement shall become effective on the first day when each and all of the following shall have occurred: (i) this Agreement shall have been duly executed and delivered by SCPPA and Purchaser, (ii) the Power Purchase Agreement shall have been duly executed and delivered by SCPPA and the Power Purchase Provider, and (iii) the Power Sales Agreement between SCPPA and each other Project Participant shall have been duly executed and delivered by the parties thereto.
Once the Power Purchase Agreement has been executed and delivered as set ATTACHMENT 4
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46 forth above, SCPPA shall deliver a copy of the same to Purchaser. This Agreement may be executed in any number of counterparts, each of which shall constitute an original.
20.2 Termination Conditions. This Agreement shall be effective upon satisfaction of the conditions set forth in Section 20.1 and shall extend for the term specified in Section 20.3 unless earlier terminated pursuant to an express provision of this Agreement, or by operation of the Indenture or of law; provided, however, that (i) any obligation to make payments to SCPPA or any outstanding liability of Purchaser hereunder which either exists or may exist as of the date of termination of this Agreement, or which comes into existence at any future time as a result of any activity or transaction carried forth under this Agreement, shall survive such termination and (ii) any obligation of SCPPA or Purchaser hereunder to comply with the Federal Tax Law Requirements shall continue until such time as provided in Section 23.2.
20.3 Term/Expiration. The term of this Agreement shall begin on the day this Agreement becomes effective pursuant to Section 20.1 hereof. Unless terminated earlier pursuant to Sections 20.4 , 20.5, or 20.6 and subject to Sections 20.2 and 23 hereof, the term of this Agreement shall expire on the later of: (i) the date SCPPA’s Joint Powers Agreement (including any extensions thereof) expires or (ii) the date on which all Bonds and the interest thereon shall have been paid in full or adequat e provision for such payment shall have been made and the Bonds are no longer outstanding (the “Expiration Date”); provided, however, that in no event shall the term of this Agreement expire so long as the Power Purchase Agreement is of any force or effect.
20.4 Transfer of SCPPA Interest . Except as provided in Section 20.5 hereof, and subject to any applicable provisions of any associated operating agreements, upon the expiration of the term of this Agreement pursuant to Section 20.3 hereof, in the event SCPPA shall have purchased or acquired the Facility, SCPPA shall transfer to the Project Participants and each Project Participant shall assume its pro rata share of any right, title and interest in the Facility (including all rights and obligations of SCPPA under any Project Agreement), as evidenced by a participation agreement developed by SCPPA and the Project Participants, unless otherwise agreed to by SCPPA and the Project Participants.
The purchase price and consideration to be paid to SCPPA by Purchaser for such transfer shall consist of the payments made by Purchaser pursuant to this Agreement prior to the date of such transfer plus any remaining costs or obligations incurred by SCPPA in connection with the Project.
20.5 Termination of Agreement before Expiration Date . Notwithstanding the Expiration Date set forth in Section 20.3 hereof, this Agreement shall terminate, subject to Sections 20.2 and 23 hereof, on the date, if any, by which each and all of the following have occurred:
20.5.1 All Bonds and the interest thereon shall have been paid in full or adequate provision for such payment shall have been made and the Bonds are no longer outstanding under the Indenture;
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47 20.5.2 SCPPA notifies Purchaser that all Power Sales Agreements are superseded as a result of each of the Project Participants having (i) succeeded to SCPPA’s rights through another agreement or agreements, or (ii) entered into a replacement power sales agreement or other agreement with SCPPA . The purchase price and consideration to be paid to SCPPA by Purchaser with respect to any such superseding arrangement shall consist of the payments and satisfaction of all obligations by Purchaser under and pursuant to this Agreement prior to the effect ive date of the superseding arrangement plus any remaining costs or obligations incurred by SCPPA in connection with the Facility; and
20.5.3 The Power Purchase Agreement shall no longer be of any force or effect.
20.6 Termination of Agreement Based on Termination of Power Purchase Agreement. Notwithstanding the Expiration Date set forth in Section 20.3 hereof, this Agreement shall terminate, subject to Sections 20.2 and 23 hereof, on the date, on which the Power Purchase Agreement is terminated and all of Project Participants’ obligation(s) under the Project Agreements have been fully satisfied or otherwise adequate provision for satisfaction for such obligation(s) have been made and no other such obligation(s) under the Project Agreements are outstanding.
20.7 Final Distribution of Reserve Fund . Following the expiration or earlier termination of all Power Sales Agreements, and upon payment and satisfaction of any and all liabilities and obligations to make payments of the Project Participants under their respective Power Sales Agreements and upon satisfaction of all remaining costs and obligations of SCPPA under the Project Agreements and in connection with the Facility, any amounts then remaining in the Reserve Fund shall be paid to the Project Participants pro rata in accordance with their respective Project Cost Shares.
21. RELATIONSHIP TO AND COMPLIANCE WITH OTHER INSTRUMENTS.
21.1 Agreement Subject to the Indenture. It is recognized by the Parties hereto that SCPPA, in undertaking the planning and financing, development, acquisition, operation, and maintenance of the Project, must comply with the requirements of the Indenture and all conditions, permits and approvals or other governmental authorizations necessary for such planning, financing, development, acquisition, operation, and maintenance and it is therefore agreed that this Agreement is made subject to the provisions of the Indenture and all such conditions, permits, approvals, and governmental authorizations.
21.2 Comply With the Indenture . SCPPA covenants and agrees for the benefit of Purchaser to comply in all material respects with all terms, conditions , and covenants of the Indenture and all conditions, permits, approvals , and governmental authorizations relating to the Project, provided that SCPPA shall not be prevented from contesting the validity or applicability of any such ATTACHMENT 4
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48 conditions, permits, approvals, and governmental authorizations in good faith by appropriate proceedings.
22. SEVERABILITY. In case any one or more of the provisions of this Agreement shall for any reason be held to be illegal or invalid by a court of competent jurisdiction, it is the intention of each of the Parties hereto that such illegality or invalidity shall not affect any other provision hereof, but this Agreement shall be construed and enforc ed as if such illegal or invalid provision had not been contained herein unless a court holds that the provisions are not separable from all other provisions of this Agreement.
23. CONDITIONS TO TERMINATION , AMENDMENT OR EXTENSION OF INTIAL TERM.
23.1 No Adverse Effect . So long as any of the Bonds are outstanding under the Indenture, this Agreement shall not be terminated, amended, modified , or otherwise altered in such a manner (i) as will materially reduce the payments pledged as security for the Bonds or extend the time of such payments provided herein, (ii) as will materially impair or materially adversely affect the rights of the owners from time to time of any Bonds, or (iii) as would be prohibited by any applicable provision of the Indenture.
23.2 Rights Among Project Participants. None of the Power Sales Agreements may be terminated as to any one or more of the Project Participants, or be amended as to any one or more of the Project Participants so as to provide terms and conditions materially different from those contained therein, except, subject to the provisions of Section 23.1 and consistent with the Indenture, upon written notice to and written consent or waiver by the other Project Participant, and upon similar amendment, if appropriate, being made to the Power Sales Agreement of the Project Participant requesting such amendment after receipt by such Project Participant of written notice of such amendment.
23.3 Continuing Compliance with Federal Tax Law Requirements .
Notwithstanding anything contained in the Power Sales Agreements to the contrary, all obligations of SCPPA and the Project Participants with respect to compliance with Federal Tax Law Requirements with respect to any Bonds shall survive any termination of the Power Sales Agreements until such time as all Bonds to which such Federal Tax Law Requirements shall apply shall have been fully paid or redeemed and discharged , or such earlier time as SCPPA shall determine upon consultation with Bond Counsel or Tax Counsel, or Bond Counsel or Tax Counsel shall have rendered an opinion to the effect that such Federal Tax Law Requirements shall no longer be applicable.
24. REPRESENTATION AND GOVERNING LAW. The Parties acknowledge that each Party was represented by counsel in the negotiation and execution of this Agreement. This Agreement was made and entered into in the County of Los Angeles and shall be governed by, interpreted, and enforced in accordance with the laws of the State of California. All litigation arising out of, or relating to this Agreement, shall be brought in a State or Federal court in the County of Los Angeles in the State of California. The Parties irrevoca bly agree to submit to ATTACHMENT 4
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49 the exclusive jurisdiction of such courts in the State of California and waive any defense of forum non conveniens.
25. ARBITRATION AND ATTORNEYS’ FEES. If a dispute arises between the Parties which the Coordinating Committee or the Board of Directors is unable to resolve, the Parties may by mutual agreement submit the dispute to mediation or non-binding arbitration. With respect to any such dispute the Parties agree that each Party shall bear its own attorneys’ fees and costs.
Notwithstanding the foregoing, Purchaser and SCPPA recognize and agree that SCPPA’s attorneys’ fees associated with any matter relating to the Project or this Agreement, includi ng any dispute relating thereto, shall constitute a Project cost which shall be allocated and billed as set forth in Sections 4 and 7 of this Agreement.
26. NOTICES. Any notice, demand or request provided for in this Agreement shall be in writing and shall be deemed properly served, given, or made if delivered in person or sent by registered or certified mail, postage prepaid, to the persons specified below:
Southern California Public Power Authority
Attention: Executive Director
1160 Nicole Court
Glendora, California 91740
City of Burbank
Attention: General Manager
Burbank Water & Power
320 North Lake Avenue
Burbank, California 91502
27. AMENDMENTS. The Parties acknowledge and agree that any amendment to this Agreement shall be in writing and duly executed by the Parties.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the Parties hereto have duly caused this Agreement to be executed on their respective behalves by their duly authorized representatives.
SOUTHERN CALIFORNIA PUBLIC
POWER AUTHORITY
r
By:
Attest: <-)-\,--
Assistant Secretary
Approved as to legal form
General Counsel
By
CITY OF BURBANK
By
Date
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APPENDIX A
DEFINITIONS
The following terms, whether in the singular or the plural, and initially capitalized, shall have the meanings specified below:
1. Acquiring Entity. “Acquiring Entity” shall have the meaning set forth in Section 18.3.
2. Acquisition. Acquisition shall entail the procurement of SCPPA’s rights and obligations pursuant to the Power Purchase Agreement and applicable Project Agreements, any purchase of the Facility, including the purchase of rights and interests under any of the Power Purchase and Security Agreements, SCPPA financing arrangements for the foregoing, and all rights and entitlements associated with the acquisition, development and implementation of the Project, including those resources, contracts, rights, benefits, entitlements and arrangements as may be necessary, desirable or appropriate to the Project to further SCPPA’s and the Project Participants’ goals and those associated structures and services procured, retained or acquired by and on behalf of the Project Participants as part of the Project and which have been approved by the Coordinating Committee and , where applicable, the Board of Directors. Acquisition also includes the rights and interests under any consents to assignment and related agreements, and taking foreclosure action (or a deed in -lieu-of foreclosure) under and pursuant to any of the Power Purchase and Security Agreements, and, if and as applicable, associated financing, and all rights and entitlements of SCPPA under the Power Purchase and Security Agreements or other Project Agreements associated with the development and implementation of the Project.
3. Act. All of the provisions contained in the California Joint Exercise of Powers Act found in Chapter 5 of Division 7 of Title 1 of the Government Code of the State of California, beginning at California Government Code Section 6500 et seq., as amended from time to time.
4. Ancillary Documents. “Ancillary Documents” shall have the definition set forth in the Power Purchase Agreement.
5. Annual Budget. The budget approved by the Coordinating Committee and adopted by SCPPA pursuant to Section 5.4.1 of this Agreement not less than 30 days nor more than 60 days prior to the beginning of each Power Supply Year, including any amendments thereto, which shall show a detailed estimate of Power Costs under th e Power Sales Agreements and all credits, charges, revenues, income, or other funds to be applied to such costs, for and applicable to such Power Supply Year.
6. Assignee. “Assignee” shall have the meaning set forth in Section 18.2.
7. Balancing Agent. “Balancing Agent” shall have the meaning set forth in Section 9.5.
8. Billing Statement. The written statement prepared or caused to be prepared each Month by, or on behalf of, SCPPA which shall be based upon certain of the information in the Annual Budget ATTACHMENT 4
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and shall show for such Month the amount to be paid to SCPPA by a Project Participant in accordance with the provisions of Section 7 of its Power Sales Agreement.
9. Board of Directors. The Board of Directors of the Southern California Public Power Authority.
10. Bond Counsel. Nationally recognized legal counsel having background and experience in the issuance of municipal bonds, including the Federal Tax Law Requirements relating thereto, and selected by SCPPA to evaluate and advise regarding the Bonds with respect to specif ied cases, transactions and matters from time to time.
11. Bonds. The bonds, notes, bond anticipation notes, certificates of participation, commercial paper or other evidences of indebtedness issued or incurred by SCPPA and outstanding pursuant to the provisions of the Indenture to finance or refinance the Cost of Acquisition and any Capital Improvements and, where applicable, the purchase of the Facility or any part, portion or component thereof, including purchase of the rights and interests under any applicable Project Agreement. Bonds shall include but not be limited to the taxable and/or tax- exempt bonds, notes, bond anticipation notes, certificates of participation, commercial paper or other evidences of indebtedness issued or incurred by SCPPA to finance any purchase of the Facility, including purchase of the rights and interests under any applicable Project Agreement, or bonds, notes, certificates of participation, commercial paper or other evidences of indebtedness issued to redeem or refund such bonds, notes, certificates of participation, commercial pape r or evidences of indebtedness, and any and all other obligations which SCPPA issues or incurs relating to the Project. Bonds shall also include any additional Bonds authorized by the Indenture or any supplement thereto and issued or incurred pursuant to the provisions of Section 13.2 of the Power Sales Agreements and any refunding of Bonds issued pursuant to the provisions of Sections 13.3 or 13.5 thereof. Bonds may constitute other categories of bonds eligible for certain tax benefits under the Internal Revenue Code, including but not limited to tax-exempt bonds, tax credit bonds, or direct payment bonds.
12. Burbank. The City of Burbank, a California municipality.
13. Capacity. The ability or potential to generate, produce or transfer electricity, expressed in kilowatts (“kW”) or megawatts (“MW”), including, when feasible, ancillary, or regulating services or other valuable non-energy products or services from a generating facility.
14. Capacity Rights. “Capacity Rights” shall have the definition set forth in the Power Purchase Agreement.
15. Capital Improvements . Any unit of property, property right, land or land right which is a replacement, repair, addition, improvement , or betterment to the Project or any transmission facilities relating to, or for the benefit of, the Project, the betterment of land or land rights or the enlargement or betterment of any such unit of property constituting a part of the Project or related transmission facilities which is (i) consistent with Prudent Utility Practices and determined necessary and/or desirable by the Board of Directors or (ii) required by any governmental agency having jurisdiction over the Project.
16. Chairperson. “Chairperson” is defined in Section 6.2.1.
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17. Commercial Operation . “Commercial Operation” shall have the definition set forth in the Power Purchase Agreement.
18. Compliance. Following a Payment Default, the Defaulting P roject Participant shall be in compliance with its payment obligations under its Power Sales Agreement if it (i) no later than the last day of the Cure Period fully pays all amounts owed as reflected in any Default Invoice; (ii) pays any monthly Billing Statement which comes due during the Cure Period; and (iii) replenishes any reduction made to the applicable operating reserve account, Debt Service reserves or other Reserve Fund as a result of any Payment Default.
19. Consent and Agreement. “Consent and Agreement” shall have the definition set forth in the Power Purchase Agreement.
20. Coordinating Committee . The Coordinating Committee established in accordance with Section 6 of this Agreement.
21. Cost of Acquisition. “Cost of Acquisition” is defined in Section 4.3.
22. Cure Period. That period of time beginning on the date of a Payment Default and concluding thirty (30) days thereafter.
23. Cured Payment Default . A Payment Default which has been cured in accordance with Section 15.3 of this Agreement. If at any time during the Cure Period the Defaulting Purchaser is in Compliance, then the requirements of a Cured Payment Default shall be deemed to have been satisfied as of the date of receipt of such payments by SCPPA and the Cure Period shall expire.
24. Daily Delay Damages. “Daily Delay Damages” shall have the definition set forth in the Power Purchase Agreement.
25. Debt Service. The debt service payable with respect to the Indenture pertaining to any category of Bonds, any Bonds issued pursuant to Section 13 of this Agreement, or other applicable series of Bonds, as determined by the context; provided that in the case of any Bo nds, Debt Service may, to the extent provided in the Indenture, be reduced by the amount of any applicable cash grant or rebate payable by the Federal Government to SCPPA (or to the trustee under the Indenture) with respect to interest on such Bonds. Debt Service shall also include any payments required to be deposited into the Debt Service Fund under the Indenture to pay, for example, amounts due under any interest rate swap agreements or other derivative agreements.
26. Debt Service Fund. The Debt Service Fund or account, or similar fund or account, established by the Indenture to pay Debt Service. The Debt Service Fund shall not include the Debt Service Reserve Fund(s) under the Indenture.
27. Deemed Delivered Energy. “Deemed Delivered Energy” shall have the definition set forth in the Power Purchase Agreement.
28. Default. “Default” shall have the definition set forth in the Power Purchase Agreement.
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29. Default Invoice. An invoice during the Payment Default Period and the Cure Period issued to the Defaulting Project Participant pursuant to Section 15 of this Agreement that identifies the total defaulted amount owed, including late payment interest, to achieve a Cured Payment Default. During the Cure Period, the Default Invoice shall also include the amount that must be paid to achieve Compliance.
30. Defaulting Project Participant. A Project Participant that causes a Payment Default which has not been remedied and where the Defaulting Project Participant has not effected a Cured Payment Default.
31. Delivery Term of the Power Purchase Agreement. The time period for the delivery of Energy pursuant to the Power Purchase Agreement as set forth therein.
32. Development Security. “Development Security” shall have the definition set forth in the Power Purchase Agreement.
33. Development Work. All work and activities in connection with the development of the Project, including, without limitation, all planning, designing, acquiring (by purchase or otherwise), mitigating impacts, constructing, installing, investigating, cost monitoring and con trol activities, negotiating and administering contracts, purchasing, environmental monitoring, scheduling, protecting, erecting, supervising, expediting inspecting, testing and training activities, recruitment and training of technical, op erational and administrative personnel, insuring, accounting, budgeting, public information services and activities, services of consultants and legal counsel, preparing of manuals and reports, and activities relating to securing requisite actions, permits , licenses, approvals , and certificates from governmental agencies and authorities.
34. Direct Reimbursable Costs. “Direct Reimbursable Costs” shall include Operating Insurance premiums and Taxes.
35. Dynamic Scheduling. “Dynamic Scheduling” shall mean the automated scheduling of Energy from the Point of Delivery to a Project Participant’s control area or electric system, provided that such dynamic schedules adjust at four-second intervals, or other intervals as specified by WECC, to match the amount of Energy actually delivered to the Point of Delivery with respect to such Project Participant.
36. Energy. “Energy” shall include both Energy and any Replacement Energy, as those terms are defined in the Power Purchase Agreement.
37. Entitlement Share. The percentage entitlement of each Project Participant to the Project and Facility Products in any Power Supply Year, as set forth in Appendix B of each of the Power Sales Agreements (entitled “Schedule of Project Participants Entitlement Shares and Project Cost Shares”) attributable to each such Project Participant, as amended from time to time so long as such amendments are in compliance with the Power Sal es Agreements and any applicable provisions of the Indenture. Revisions to Appendix B pursuant to Section 15 herein shall be considered an element of the administration of this Power Sales Agreement and shall not require the consent of the Parties hereto.
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38. Environmental Attributes. “Environmental Attributes” shall have the definition set forth in the Power Purchase Agreement.
39. Excess Energy. “Excess Energy” shall have the definition set forth in the Power Purchase Agreement.
40. Facility. “Facility” means all of the facilities and real and personal properties and resources and rights and interests, all as described or defined as the Facility in the Power Purchase Agreement and all of the Acquisitions, related assets and accompanying rights and obligations associated therewith and all rights, interests and obligations associated with such facilities, including the rights interests and obligations under the Ancillary Documents and shall also include all Capital Improvements.
41. Facility Products. All solar energy output, rights, and other tangible or intangible benefits derived from the Facility whatsoever, including without limitation all Energy (including Replacement Energy as defined in the Power Purchase Agreement), Capacity Rights and Environmental Attributes whether received by SCPPA under or pursuant to the Power Purchase Agreement or other applicable Project Agreement or derived from the Facility by SCPPA as owner following SCPPA’s purchase of the Facility.
42. Federal Tax Law Requirements. “Federal Tax Law Requirements” shall mean, with respect to the issuer of Bonds, any and all requirements and limitations to which any specified type or category of Bonds are subject under the Internal Revenue Code or related Treasury regulations in order that such specified Bonds initially qualify and maintain qualification as that type or category of Bonds.
43. Financing Agreement. “Financing Agreement” shall have the definition set forth in the Power Purchase Agreement.
44. Fiscal Year. The twelve-month period commencing at 12:01 a.m. on July 1 of each year and ending at 12:01 a.m. on the following July 1, or such other time frame as determined by the Coordinating Committee or Board of Directors.
45. Force Majeure . “Force Majeure” shall have the definition set forth in the Power Purchase Agreement.
46. Fund or Funds. Any fund or account created under the Indenture.
47. Glendale. The City of Glendale, a California municipality.
48. Guaranteed Commercial Operation Date. “Guaranteed Commercial Operation Date” shall have the definition set forth in the Power Purchase Agreement.
49. Guaranteed Delivered Energy. “Guaranteed Delivered Energy” shall have the definition set forth in the Power Purchase Agreement.
50. Indenture. The indenture of trust, trust agreement, credit or loan agreement and other similar agreements with respect to the Bonds, between SCPPA and a Project Trustee or Lender, as ATTACHMENT 4
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from time to time amended and supplemented in conformity with its provisions and of this Agreement. Under such agreements, SCPPA may enter into, or authorize the entering into of, interest rate swap agreements, other derivative agreements, and such other a greements as are authorized or permitted under such agreements. Indenture shall include, but not be limited to, any and all indentures in connection with any bridge loans, bond anticipation notes or other notes, or draw down bonds or with respect to any ot her type of bonds, and the indentures of trust, trust agreements or other similar agreements entered into between SCPPA and the Project Trustee or Lender to effect the redemption or refunding of any bridge loans, bond anticipation notes or other notes, dra w down bonds or other bonds, as from time to time amended and supplemented in conformity with their provisions and the provisions of this Agreement.
51. Indenture cost component. “Indenture cost component” is defined in Section 4.4.4.
52. Initial Payment Default Date . The earlier of (i) the end of the fifth day following the first Payment Default for that no remedy in payment has occurred and been received by SCPPA, or (ii) the last day of the Month in which the first Payment Default has occurred for which no remedy in payment has occurred and been received by SCPPA.
53. Interconnection Agreements. “Interconnection Agreements” shall have the meaning set forth in the Power Purchase Agreement.
54. Internal Revenue Code. The Internal Revenue Code of 1986, as amended.
55. Joint Powers Agreement . The “Southern California Public Power Authority Joint Powers Agreement” dated as of November 1, 1980, as amended and modified from time to time, entered into pursuant to the provisions of the Act, among SCPPA and its members.
56. Key Milestones. “Key Milestones” shall have the meaning set forth in the Power Purchase Agreement.
57. LADWP. The City of Los Angeles acting by and through the Department of Water and Power.
58. Losses. “Losses” shall have the meaning set forth in Section 17.7.
59. Major Contracts. The Project Agreements and, to the extent not finalized or effective on the Effective Date of this Agreement, any other contract or agreement so identified by the Coordinating Committee or the Board of Directors, as such contracts or agreements may be amended or supplemented from time to time.
60. Milford Solar Phase II Agency Agreement. “Milford Solar Phase II Agency Agreement” shall have the definition set forth in this Appendix A under the definition of “Project Manager.”
61. Milford Solar Phase II LLC. “Milford Solar Phase II” means the limited liability company so named and that is organized and existing under the laws of the State of Delaware, or its successor or successors.
62. Month. A calendar month.
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63. Monthly Costs. “Monthly Costs” is defined in Section 7.1.
64. Moody’s. “Moody’s” shall mean Moody’s Investor Services, Inc.
65. Operating Budget. The operating budget approved by the Board of Directors which shall show a detailed estimate of all Project operating costs, including all revenues, income, or other funds to be applied to such operating costs for and applicable to a Power Supply Year.
66. Operating cost component. “Operating cost component” is defined in Section 4.4.1.
67. Operating Insurance. “Operating Insurance” shall have the meaning set forth in the Power Purchase Agreement.
68. Operating Reserve Depletion Date . The date that is two Months prior to the date on which SCPPA anticipates, assuming continued Payment Defaults by one or more Defaulting Project Participants, that the moneys in the operating reserve account of the Indenture will be fully depleted; provided, however, if as of the date on which a Payment Default occurs SCPPA determines that the moneys in the operating reserve account will be fully depleted in less than two Months (or currently are fully depleted), then the Operating Reserve Depletion Date shall be deemed to have occurred when such a Payment Default occurs.
69. Operating Work. All work and activities in connection with the administration, operation and maintenance of the Project, including without limitation, negotiating and administering contracts, planning, mitigating impacts, purchasing, repairing, inspecting, maintaining, investigating a nd monitoring all aspects of the Project, performing modeling functions, economic analysis, quality control, testing and evaluating, recruitment and training of operating entities and personnel, electric energy and environment al attribute procurement, regulatory efforts, tagging, interconnecting, transmission, storing, dispatching, firming, balancing, exchanging and scheduling activities, the scheduling, facilitation, receipt, supervising, expediting, budgeting, insuring, accou nting, tracking, registering, protecting, operating and managing activities, public information services and services of consultants, operators, engineers, contactors and legal counsel, renewals, replacements, reconstruction, and improvements, and activiti es related to securing requisite permits, franchises, licenses, approvals, entitlements, credits, and certificates from governmental agencies and authorities.
70. Option Agreement . “Option Agreement” shall have the definition set forth in the Power Purchase Agreement.
71. Payment Default. A failure by a Project Participant to pay when due all of its Billing Statement for any Month.
72. Payment Default Period. That period of time during which a Payment Default exists.
73. Performance Security. “Performance Security” shall have the definition set forth in the Power Purchase Agreement.
74. Permit. “Permit” shall have the definition set forth in the Power Purchase Agreement.
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75. Person. “Person” means any individual, corporation, partnership, joint venture, limited liability company, association, joint stock company, trust, unincorporated organization, entity, government or other political subdivision.
76. Point of Delivery . The point at which Energy is to be delivered to the Project Participants pursuant to the Power Purchase Agreement or any other agreement with the Power Purchase Provider or, if SCPPA shall purchase or acquire the Facility, the same point of delivery of the Energy or such other point of delivery as authorized and determined by the Coordinating Committee or the Board of Directors.
77. Power Costs. “Power Costs” has the meaning described in Section 4.4.
78. Power Purchase Agreement . The Power Purchase Agreement between Southern California Public Power Authority and Milford Solar Phase II LLC, dated as of January 30, 2025, attached hereto as Appendix E, as the same may be amended from time to time.
79. Power Purchase and Security Agreements . The Power Purchase Agreement, the Option Agreement, the Ancillary Documents, the Consent and Agreement, the Financing Agreement, and all other agreements associated with the Facility, and any other consent to assignment or other agreement with any finan cial institution or Person relating to the Project or any loan or other credit agreement associated with the Facility, or any other agreement under which SCPPA might acquire or otherwise purchase or obtain the Facility or related resources and assets or the Facility Products or carry forth any Acquisition all as and to the extent applicable to any particular Project matter or matters. The Power Purchase and Security Agreements shall also include any instrument or form of security which affords any opportunity for the purchase of the Facility or Acquisition, whether through foreclosure or otherwise, including any deed or deed of trust, mortgage, lease, assignment, beneficial interest, collateral instrument or other device or mechanism providing for the ability to acquire the Facility.
80. Power Purchase and Security Agreements cost component . “Power Purchase and Security Agreements cost component” is defined in Section 4.4.5.
81. Power Purchase Provider. Milford Solar Phase II LLC, as the counterparty to SCPPA under the Power Purchase Agreement, and any other entity named under any applicable operating agreement to operate or otherwise run or manage the Facility along with each of their successors, or any successors or assigns to the rights of these entities.
82. Power Sales Agreements. This Agreement and th ose certain Power Sales Agreements, dated for convenience as of January 30, 2025, by and between (i) SCPPA and LADWP and (ii) SCPPA and Glendale, as the same may hereafter be amended from time to time, entered into for, among other things, the acquisition of the Entitlement Shares.
83. Power Supply Year. The Fiscal Year, except that the first Power Supply Year shall begin on the first to occur of (i) the date SCPPA is obligated to pay any portion of the costs of the Project, (ii) the date upon which SCPPA first incurs or accrues costs associated with the issuance of the Bonds, (iii) 90 days before the scheduled date for issuance of the Bonds, (iv) the date of Commercial Operation of the Facility, or (v) the date of the first delivery of Energy to ATTACHMENT 4
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Purchaser pursuant to this Agreement. Further, the first Power Supply Year shall end on the last day of the then current Fiscal Year.
84. Project or Milford Solar Phase II . The term “Project” or “ Milford Solar Phase II ” shall be broadly construed to entail the aggregate of rights, liabilities, interests and obligations of SCPPA pursuant to the Power Purchase Agreement, the Power Purchase and Security Agreements and the other Project Agreements, including but not limited to all rights, liabilities, interests and obligations associated with the Facility Products, or, upon purchase or acquisition by SCPPA, all rights, liabilities, interests and obligations associated with the Facility, and including all aspects of the operation and administration of the Facility and the Project Agreements and the rights, liabilities, interests and obligations associated therewith. The term Project shall also in clude those rights, liabilities, interests, or obligations necessary or appropriate to carry out the functions specified in Section 6 and to utilize or deliver the energy of the Facility as specified in Section 9.
85. Project Agreements . Any project management agreement, the Indenture, th e Power Sales Agreements, each of the Power Purchase and Security Agreements, Real Property Agreements (as defined in the Power Purchase Agreement), the Interconnection Contracts, the Ancillary Documents, the Milford Solar Phase II Agency Agreement or any other agreement of SCPPA with the Project Manager, other contracts and leases, easements, rights of way and other real property arrangements or agreements associated with the Facility, if any, any other Acquisition agreement or agreement for the purchase, procurement, delivery or transmission of Facility Products, including all agreements connected or associated with any purchase of the Facility or passing to SCPPA in connection with any purchase of the Facility, and including the rights and interests under the Financing Agreement or any other consents to assignme nts or agreements for assignment, any operating agreements, any maintenance agreements, any warranty agreements, any participa tion agreements, any agreements for scheduling, dispatching, exchanging, tagging, movement or transmission, any agreements relating to any Capital Improvements and the agreements to which SCPPA is a party relating to the project design, development, administration, management or operation of the Facility and for placing of the Facility into operation or maintaining its operation.
86. Project Cost Share. For any Power Supply Year and as to any particular Project Participant, the share (expressed as a percentage) set forth in Appendix B of this Agreement (entitled “Schedule of Project Participants Entitlement Shares and Project Cost Shares”) attributable to such Project Participant with respect to costs, other than financing and refinancing related costs, associated with the Project, as amended from time to time so long as such amendments are in compliance with both of the Power Sales Agreements and any applicable provisions of the Indenture. Revisions to Appendix B pursuant to Section 15 herein shall be considered an element of the administration of this Agreement and shall not require the consent of the Parties hereto.
87. Project Determination . “Project Determination” means any matter involving a question pertinent to the studying, investigating, planning, financing, developing, acquiring, constructing, reconstructing, operating, maintaining, administering, managing, improving, enlarging, or bettering of the Project.
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88. Project Manager. LADWP, in its capacity as agent for and on behalf of SCPPA under the Milford Solar Phase II Agency Agreement, dated as of January 30, 2025 , between LADWP and SCPPA (the “Milford Solar Phase II Agency Agreement” or “Agency Agreement”) or if the Milford Solar Phase II Agency Agreement shall no longer be in force and effect, SCPPA or a designee or designees appointed by SCPPA to assist SCPPA to carry out SCPPA’s responsibilities under the Power Sales Agreements.
89. Project Manager Indemnitees. “Project Manager Indemnitees” shall have the meaning set forth in Section 17.8.
90. Project Participants. Those entities executing Power Sales Agreements with SCPPA, together in each case with each entity’s successors or assigns, identified as “Project Participants” in Appendix B of the Power Sales Agreements (entitled “Schedule of Project Participants Entitlement Shares and Project Cost Shares”).
91. Project Purchase Option. “Project Purchase Option” shall have the definition set forth in Power Purchase Agreement.
92. Project Rights . All rights and privileges of a Project Participant under its Power Sales Agreement, including but not limited to its Entitlement Share, its right to receive Facility Products from the Facility, and its right to vote on Coordinating Committee matters.
93. Project Rights and Obligations. Purchaser’s Project Rights and obligations under the terms of this Agreement.
94. Project Trustee or Lender. Any bank or other financial firm or institution at any time serving as trustee under the Indenture or any bank or financial firm party to the Indenture as a lender or as agent for a lender or lenders thereunder.
95. Prudent Utility Practices. “Prudent Utility Practices” shall have the meaning provided in the Power Purchase Agreement.
96. Pseudo-Tie. “Pseudo Tie” shall mean the definition of “Pseudo-Tie” approved by the Federal Energy Regulatory Commission and set forth in the publication entitled: “Glossary of Terms used in NERC Reliability Standards”, as may be amended from time to time.
97. Purchaser Indemnitees. “Purchaser Indemnitees” shall have the meaning set forth in Section
17.7. 98. Released Parties. “Released Parties” shall have the meaning set forth in Section 17.2.
99. Replacement Energy. “Replacement Energy” shall have the definition set forth in the Power Purchase Agreement.
100. Reserve Fund cost component. “Reserve Fund cost component” is defined in Section 4.4.3. 101. Reserve Fund(s). Those reserve accounts deemed appropriate to afford a reliable source of funds for the payment obligations of the Project and, taking into account the variability of costs ATTACHMENT 4
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associated with the Project for the purpose of providing a reliable payment mechanism to address the ongoing costs associated with the Project.
102. RPS Compliance Shortfall Energy . “RPS Compliance Shortfall Energy” shall have the definition set forth in the Power Purchase Agreement.
103. S&P. “S&P” shall mean Standard & Poor’s Financial Services LLC. 104. Shortfall Liquidated Damages. “Shortfall Liquidated Damages” shall have the definition set forth in the Power Purchase Agreement
105. Startup and Test Energy. “Startup and Test Energy” shall have the definition set forth in the Power Purchase Agreement.
106. Step-Up Invoice . An invoice sent to a Project Participant that is not a Defaulting Project Participant as a result of one or more Payment Defaults, which invoice shall separately identify any amount owed with respect to the monthly Billing Statement of the Defaulting Pr oject Participant for, as the case may be, pursuant to Section s 15.9.1 or 15.9.2 hereof, either the Indenture cost component of the Defaulting Project Participant’s unpaid monthly Billing Statement or the total Monthly Costs reflected in the Defaulting Project Participant’s unpaid monthly Billing Statement.
107. Supplementary Services. Those services in connection with the delivery of Energy involving additional transmission, interconnection arrangements, energy management, firming, shaping, energy balancing, dispatching, tagging, scheduling, transmitting, interconnecting, swapping, exchanging, or other services associated with the transmission, use , or disposition of Facility Products to be utilized by the Project Participants under the Power Sales Agreements, and to otherwise provide for delivery and facilitate the disposition, movement, taking, receiving, accounting for, transferring, and crediting the ownership and transfer of Facility Products from the Point of Delivery to any other points or destinations, as determined by the Project Participants. Supplementary Services include but are not limited to delivery point swaps, stranded energy/transmission curtailments, tiepoint liquidity improvement, transmission loss savings, tiepoint price spread optimization, on -peak/off-peak exchanges, peak shifti ng exchanges, seasonal exchanges, and both simultaneous or non -simultaneous green energy exchanges.
108. Supplementary Services cost component . “Supplementary Services cost component” is defined in Section 4.4.2.
109. Tax Counsel. Nationally recognized legal counsel having background and experience in tax - exempt financing and selected by SCPPA to evaluate and advise regarding the Federal Tax Law Requirements with respect to specified cases, transactions and matters from time to time. 110. Taxes. “Taxes” shall have the meaning set forth in the Power Purchase Agreement. 111. Transmission System. “Transmission System” shall have the meaning set forth in the Power Purchase Agreement.
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112. Uncontrollable Forces. Any Force Majeure event and any cause beyond the control of any Party, which by the exercise of due diligence such Party is unable to prevent or overcome, including but not limited to, failure or refusal of any other Person to comply with then existing contracts, an act of God, fire, flood, explosion, earthquake, strike, sabotage, pestilence, an act of the public enemy (including terrorism), civil or military authority including court orders, injunctions and orders of governmental agencies with proper jurisdiction or the failure of such agencies to act, insurrection or riot, an act of the elements, failure of equipment, a failure of any governmental entity to issue a requested order, license, or permit, inability of any Party or any Person engaged in work on the Project to obtain or ship materials or equipment because of the effect of similar causes on suppliers or carriers, or inability of SCPPA to sell or issue its Bonds. Notwithstanding the foregoing, Uncontrollable Forces as define d herein shall also include events of Force Majeure pursuant to the Power Purchase Agreement, as defined therein. 113. WECC. The Western Electricity Coordinating Council, or its successor.
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APPENDIX B
SCHEDULE OF PROJECT PARTICIPANT ENTITLEMENT SHARES AND PROJECT
COST SHARES
Project Participants Capacity (MW) Entitlement Shares Project Cost Shares
Burbank 40 13.3% 13.3%
Glendale
25 8.3% 8.3%
LADWP 235 78.4% 78.4%
Total 300 100% 100%
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APPENDIX C
OPINION OF COUNSEL TO PURCHASER
[Date]
Southern California Public Power Authority
c/o Executive Director
1160 Nicole Court
Glendora, California 91740
[Underwriters for the Bonds]
[Bond Insurer or credit enhancement entity]
Ladies and Gentlemen:
We have acted as counsel to the City of Burbank, acting by and through the Department of Water and Power, as Purchaser (the “Purchaser”) under the Milford Solar Phase II Project Power Sales Agreement, dated for convenience as of January 30, 2025 (the “Power Sales Agreement”) , between Purchaser and Southern California Public Power Authority (“SCPPA”).
We have examined originals or copies of those records and documents we considered appropriate for purposes of this opinion. As to relevant factual matters, we have relied upon, among other things, Purchaser’s factual representations.
We have assumed the genuineness of all signatures (other than the signatures of persons signing the Power Sales Agreement on behalf of Purchaser), the authenticity of all documents submitted to us as originals and the conformity with originals of all documents submitted to us as copies. To the extent Purchaser’s obligations depend on the enforceability of the Power Sales Agreement against SCPPA, we have assumed that the Power Sales Agreement is enforceable against SCPPA.
From such examination, on the basis of our reliance upon the assumptions in this opinion and our consideration of those questions of law we considered relevant, and subject to the limitations and qualifications in this opinion, we are of the opinion that:
1. Purchaser is a municipal corporation organized and existing under the laws of the State of California and authorized under the Burbank City Charter to furnish retail electricity within its service area.
2. Purchaser is empowered under the Burbank City Charter to enter into the Power Sales Agreement and to perform its obligations thereunder.
3. The Power Sales Agreement has been duly authorized, executed and delivered by Purchaser and, assuming due authorization, execution and delivery by SCPPA of such Power Sales Agreement, constitutes the legal, valid and binding obligation of Purchaser enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization and ATTACHMENT 4
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other similar laws affecting creditors’ rights generally and to general principles of equity, to the exercise of judicial discretion in appropriate cases, and to the limitations on legal remedies against municipal corporations in the State of California.
Our opinion in paragraph 3 as to enforceability is subject to the unenforceability of provisions waiving a right to jury trial. Also, a court may refuse to enforce a provision of the Power Sales Agreement if it deems that such provision is in violation of public policy.
We express no opinion with respect to your ability to collect attorneys’ fees and costs in an action if you are not the prevailing party in that action (we call your attention to the effect of Section 1717 of the California Civil Code, which provides that where a contract permits one party thereto to recover attorneys’ fees, the prevailing party in any action to enforce any provision of the contract shall be entitled to recover its reasonable attorneys’ fees).
We express no opinion as to any provision requiring written amendments or waivers insofar as it suggests that oral or other modifications, amendments or waivers could not be effectively agreed upon by the parties or that the doctrine of promissory estoppel might not apply.
It is our opinion that no person, other than SCPPA, has setoff rights against payments due from Purchaser. We express no opinion with respect to any indemnification, contribution, penalty, choice of law, choice of forum, choice of venue, severability or waiver provisions contained in the Power Sales Agreement.
We express no opinion as to any agreement or document referred to in the Power Sales Agreement or incorporated into the Power Sales Agreement by reference, or any agreement other than the Power Sales Agreement itself, or the effect of any such agreement or do cument on the opinions herein stated.
The opinions expressed are matters of professional judgment and are not a guarantee of result. The law covered by this opinion is limited to the present law of the State of California. We express no opinion as to the laws of any other jurisdiction.
This opinion may be relied upon only by the addressees hereto in connection with the issuance of the Bonds (as described in the Power Sales Agreement). It may not be used or relied upon for any other purpose or by any other person, nor may copies be delivered to any other person, without in each instance our prior written consent, except that this opinion may be included in the closing binder memorializing the Power Sales Agreement.
This opinion is expressly limited to the matters set forth above, and we render no opinion, whether by implication or otherwise, as to any other matters. This letter speaks only as of the date hereof and we assume no obligation to update or supplement thi s opinion to reflect any facts or circumstances that arise after the date of this opinion and come to our attention, or any future changes in laws.
Very truly yours,
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APPENDIX D
OPINION OF COUNSEL TO SCPPA
[Date]
[Purchaser]
[Underwriters of the Bonds]
[Bond Insurer or credit enhancement entity]
Ladies and Gentlemen:
I am acting as counsel to the Southern California Public Power Authority (“SCPPA”) under the Milford Solar Phase II Project Power Sales Agreement, dated for convenience as of January 30, 2025, between the City of Burbank and SCPPA (the “Power Sales Agreement”), and I have acted as counsel to SCPPA in connection with the matters referred to herein. As such counsel , I have examined and am familiar with (i) those documents relating to the existence, organization and operation of SCPPA, (ii) all necessary documentation of SCPPA relating to the authorization, execution and delivery of the Power Sales Agreement, and (iii) the Power Sales Agreement.
Capitalized terms used herein not otherwise defined shall have the respective meanings ascribed thereto in the Power Sales Agreement.
I am of the opinion that:
1. SCPPA is a joint powers authority duly organized and validly existing under the Act, as amended, and the Joint Powers Agreement dated as of November 1, 1980, among SCPPA’s members, as amended, and has full legal right, power and authority to execute and deliver, and to perform its obligations under, the Power Sales Agreement.
2. The Power Sales Agreement has been duly authorized, executed, and delivered by SCPPA, and, assuming due authorization, execution and delivery by the parties thereto , other than SCPPA, the Power Sales Agreement constitutes the legal, valid and binding obligation of SCPPA, enforceable against SCPPA in accordance with its terms.
3. To the best of my knowledge, SCPPA is not in material breach of or default under, and the authorization, execution and delive ry of the Power Sales Agreement and compliance with the provisions thereof will not conflict with or constitute a breach of, or default under: (i) any instrument relating to the organization existence or operation of SCPPA; (ii) any loan agreement, lease agreement, indenture, bond, note, resolution, commitment, agreement or other instrument to which SCPPA is a party or by which it or its property or assets is bound or affected, and no event has occurred and is occurring which with the passage of time or the giving of notice, or both, would constitute a material default or event of default under any such instrument, which breach or default would have a material adverse impact on the Power Sales Agreement or the ability of SCPPA to comply with its obligations under the Power Sales Agreement; or (iii) any applicable constitutional provision, law, ruling, administrative ATTACHMENT 4
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regulation, ordinance, judgment, order or decree to which SCPPA (or any of its officers in their respective capacities as such) is subject.
4. To the best of my knowledge, as of the date hereof, there is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, government agency, public board or body, pending or, to the best of my knowledge, threatened against or affecting SCPPA or any of its officers in their respective capacities as such (nor to the best of my knowledge is there any basis therefor), which questions the right, power or authority of SCPPA referred to in paragraph 2 above or the validity of the proceedings taken by SCPPA in connection with the authorization, execution or delive ry of the Power Sales Agreement , or wherein any unfavorable decision, ruling or finding would materially adversely affect the transactions contemplat ed by the Power Sales Agreement , or which, in any way, would adversely affect the validity or enforceabili ty of the Power Sales Agreement or the ability of SCPPA to comply with its obligations thereunder.
Insofar as the foregoing opinions relate to the legal, valid and binding effect, and the enforceability, of any instrument, such opinions are subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally, and are subje ct, as to enforceability, to judicial discretion and to general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law). Also, a court may refuse to enforce a provision if it deems that such provision is in violation of public policy.
The opinions expressed herein are based upon the law and other matters in effect on the date hereof. The opinions expressed are matters of professional judgment and are not a guarantee of result. I assume no obligation to revise or supplement this opinion should such law or other matters be changed by legislative action, judicial decision, or otherwise, or should any facts or other matters upon which I have relied change.
The opinions which are set forth or which are expressed herein are limited to the laws of the State of California.
This opinion is furnished exclusively for the benefit of the recipients to which it is addressed. This opinion may not be provided to, made available to, or relied upon by, any other party without prior written consent, except that this opinion may be included in the closing binder memorializing the transaction.
Very truly yours,
General Counsel
Southern California Public Power Authority
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APPENDIX E
POWER PURCHASE AGREEMENT
BY AND BETWEEN
MILFORD SOLAR PHASE II LLC
AND
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
DATED AS OF JANUARY 30, 2025
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