Morgan Stanley agrees to reimburse the Project Participant or CCCFA, as appropriate. To the extent CCCFA incurs any SPO Fee if the bonds are not issued as a result of the Project Participant’s unwillingness or inability to proceed, other than due to an inability to achieve a minimum established target discount, the Project Participant agrees that it will be liable for such SPO Fee and make direct payment to Kestrel therefor, or to CCCFA if the SPO Fee was already paid by CCCFA.
Morgan Stanley shall have no responsibility for any fees or expenses incurred by CCCFA or the Project Participant, or their agents, employees, advisors or counsel, in connection with the issuance of the Bonds and the purchase of the Prepaid Energy, other than the Rating Agency Fee and SPO Fee as described in this MOU and as further described in the Bond Purchase Agreement (as defined herein).
Miscellaneous
CCCFA and Project Participant each acknowledge and agree that: (i) the transaction contemplated by this MOU is, in each case, an arm’s length, commercial transaction between the CCCFA and Morgan Stanley (in its role as “Underwriter” and/or the “Energy Supplier”, as applicable) in which the Underwriter and the Energy Supplier are each acting solely as a principal and not acting as a municipal advisor, financial advisor or fiduciary to CCCFA or the Project Participant; and (ii) CCCFA and the Project Participant will consult their own legal, accounting, tax, financial and other advisors, as applicable, to the extent each has deemed appropriate.
CCCFA acknowledges and agrees that Morgan Stanley is not making a commitment to extend credit, make a loan or otherwise fund the Bonds beyond the obligations contained in a mutually satisfactory bond purchase agreement (the “Bond Purchase Agreement”). CCCFA acknowledges that the services provided under this MOU involve professional judgment on Morgan Stanley’s part and that the results cannot be, and are not, guaranteed.
Nothing contained herein shall preclude the Underwriter from carrying on its customary and usual business activities. The Underwriter specifically reserves the right, but is not obligated, to bid for and maintain secondary markets on any of CCCFA’s outstanding bonds subject to appropriate information barriers. Services provided by the Underwriter in connection with this MOU shall not limit the Underwriter from providing services for CCCFA or the Project Participant in conjunction with other services requested by CCCFA or the Project Participant except as limited by rule of law or regulation.
In connection with the services agreed to herein, it is understood that the Underwriter will render professional services as an independent contractor. Neither the Underwriter nor any of its agents or employees shall be deemed an employee of CCCFA or the Project Participant for any purpose.
Except as described in this paragraph, this MOU is intended to be, and shall be construed only as, a non-binding MOU, intent on summarizing and evidencing discussions between CCCFA, the Project Participant, and Morgan Stanley, as of the date hereof. Except as described below, any legally binding obligation of the parties with respect to the transaction described herein shall exist only upon the execution and delivery of definitive agreements related thereto, into which this MOU and all prior discussions shall merge. It is expressly understood that this MOU is not a contract Attachment Staff Report Item 15R
Memorandum of Understanding
[______________]
to execute any definitive agreements or to otherwise consummate the transactions described herein. The parties will cooperate in negotiating definitive agreements providing for the transactions contemplated by this MOU, but each party reserves the right of final approval or disapproval, for any reason, of the documentation relating to such agreements. Notwithstanding the foregoing, the provisions above under the headings “Rating Agency Fee and SPO Fee” shall be binding upon the parties.
Sincerely,
_________________________
Grant Fraunfelder, Executive Director
MORGAN STANLEY & CO. LLC
ACCEPTED AND AGREED:
AVA COMMUNITY ENERGY
By: ____________________________
Name: Russell Mills
Title: Senior Vice President and Chief Financial Officer Date: __________________
CALIFORNIA COMMUNITY CHOICE FINANCING AUTHORITY
By: ____________________________
Name: Garth Salisbury
Title: Treasurer – Controller
Date: __________________
Attachment Staff Report Item 15R
MEMORANDUM OF UNDERSTANDING (“MOU”)
Date: [_____________]
To: Garth Salisbury
Treasurer/Controller
California Community Choice Financing Authority
[email protected]
(707) 535-9779
From: Ava Community Energy
Re: California Community Choice Financing Authority Energy Prepayment Financing on behalf of Ava Community Energy
Overview
The California Community Choice Financing Authority (“CCCFA” or the “Issuer”) seeks to procure a 30-year supply of energy, through the issuance of Clean Energy Project Revenue Bonds (the "Bonds") to be issued by CCCFA. CCCFA will sell all the Prepaid Energy acquired from this transaction to Ava Community Energy (“Ava”), the “Project Participant.” Rating Agency Fee and Green Bond Second Party Opinion Fee The rating agency fee and expenses (“Rating Agency Fee”) is paid from the proceeds of the Bonds. However, unlike most of the other fees associated with the issuance of the Bonds, payment of the Rating Agency Fee is not contingent upon the issuance of the Bonds.
In the event the Bonds are not issued, and there remains a Rating Agency Fee payable to Moody’s Investors Service (the “Rating Agency”), the Project Participant agrees that it will be liable for the cost such Rating Agency Fee and make direct payment to the Rating Agency for such fee.
In the event a Green Bond Second Party Opinion (“SPO”) is obtained, and the Bonds are not issued, the fee payable to the SPO provider (the “SPO Fee”) shall be incurred by the Project Participant and in such event, to the extent the SPO Fee was already paid by CCCFA, the Project Participant agrees to reimburse CCCFA.
Attachment Staff Report Item 15S
Memorandum of Understanding
[______________]
Sincerely,
AVA COMMUNITY ENERGY
__________________________
Russell Mills
Senior Vice President and Chief Financial Officer
Date: ________________
ACCEPTED AND AGREED
CALIFORNIA COMMUNITY CHOICE FINANCING AUTHORITY
By: __________________________
Name: Garth Salisbury, Treasurer/Controller
Date: ________________
Attachment Staff Report Item 15S