HomeMy WebLinkAbout10 Attachment 5 Electric - Installment Purchase Agreement Truckee Donner PUD 2022 Electric COPsStradling Yocca Carlson & Rauth
Draft of 5110122
INSTALLMENT PURCHASE AGREEMENT
by and between
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
and
TRUCKEE DONNER PUBLIC UTILITY DISTRICT FINANCING CORPORATION
Dated as of July 1, 2022
Relating to
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
ELECTRIC SYSTEM REVENUE CERTIFICATES OF PARTICIPATION, SERIES 2022A
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Table of Contents
Page
ARTICLE I
DEFINITIONS
Section1.1. Definitions..................................................................................................................... I
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1. Representations by the District..................................................................................... 8
Section 2.2. Representations and Warranties by the Corporation..................................................... 8
ARTICLE III
ACQUISITION OF THE 2022 PROJECT
Section 3.1. Acquisition and Construction of the 2022 Project........................................................ 9
Section 3.2. Changes to the 2022 Project.........................................................................................9
Section3.3. [Reserved]..................................................................................................................... 9
Section 3.4. Purchase and Sale of the 2022 Project.......................................................................... 9
Section3.5. Title............................................................................................................................... 9
Section3.6. Acquisition Fund........................................................................................................... 9
ARTICLE IV
SERIES 2022 INSTALLMENT PAYMENTS
Section4.1. Purchase Price.............................................................................................................10
Section 4.2. Series 2022 Installment Payments..............................................................................10
ARTICLE V
SECURITY
Section 5.1. Pledge of Revenues.....................................................................................................11
Section 5.2. Allocation of Revenues............................................................................................... I I
Section 5.3. Additional Contracts and Bonds.................................................................................12
Section5.4. Investments.................................................................................................................13
Section 5.5. Rate Stabilization Fund...............................................................................................14
ARTICLE VI
COVENANTS OF THE DISTRICT
Section 6.1. Compliance with Installment Purchase Agreement and Ancillary Agreements .........14
Section 6.2. Against Encumbrances................................................................................................15
Section 6.3. Against Sale or Other Disposition of Property...........................................................15
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Table of Contents
(Continued)
Section 6.4.
Against Competitive System.......................................................................................15
Section 6.5.
Tax Covenants............................................................................................................15
Section 6.6.
Maintenance and Operation of the Electric System....................................................16
Section6.7.
Payment of Claims......................................................................................................16
Section 6.8.
Compliance with Contracts.........................................................................................16
Section6.9.
Insurance.....................................................................................................................17
Section 6.10.
Accounting Records; Financial Statements and Other Reports..................................17
Section 6.11.
Protection of Security and Rights of the Corporation.................................................18
Section 6.12.
Payment of Taxes and Compliance with Governmental Regulations .........................18
Section 6.13.
Amount of Rates and Charges....................................................................................18
Section 6.14.
Collection of Rates and Charges.................................................................................18
Section 6.15.
Eminent Domain Proceeds..........................................................................................18
Section 6.16.
If all or any part of the Electric System shall be taken by eminent domain
proceedings, the Net Proceeds thereof will be applied as follows: .............................
19
Section 6.17.
Further Assurances......................................................................................................19
Section 6.18.
Enforcement of Contracts...........................................................................................
20
ARTICLE VII
PREPAYMENT OF SERIES 2022 INSTALLMENT PAYMENTS
Section7.1. Prepayment................................................................................................................. 20
Section 7.2. Method of Prepayment................................................................................................ 20
ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES OF THE CORPORATION
Section 8.1. Events of Default and Acceleration of Maturities...................................................... 20
Section 8.2. Application of Funds Upon Acceleration................................................................... 22
Section 8.3. Other Remedies of the Corporation............................................................................ 22
Section8.4. Non-Waiver................................................................................................................. 22
Section 8.5. Remedies Not Exclusive............................................................................................. 23
Section 8.6. Exercise of Remedies.................................................................................................. 23
ARTICLE IX
DISCHARGE OF OBLIGATIONS
Section 9.1. Discharge of Obligations............................................................................................ 23
ARTICLE X
MISCELLANEOUS
Section 10. l . Liability of District Limited........................................................................................ 24
Section 10.2. Benefits of Installment Purchase Agreement Limited to Parties ................................ 25
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Table of Contents
(Continued)
Section 10.3.
Successor Is Deemed Included in all References to Predecessor ...............................
25
Section 10.4.
Waiver of Personal Liability.......................................................................................
25
Section 10.5.
Article and Section Headings, Gender and References ..............................................
25
Section10.6.
Partial Invalidity..........................................................................................................25
Section10.7.
Assignment.................................................................................................................
25
Section10.8.
Net Contract................................................................................................................25
Section10.9.
California Law............................................................................................................
26
Section10.10.
Notices........................................................................................................................
26
Section 10.11.
Effective Date.............................................................................................................
26
Section 10.12.
Execution in Counterparts...........................................................................................
26
Section 10.13.
Indemnification of Corporation..................................................................................
27
Section 10.14.
Amendments Permitted...............................................................................................
27
Section 10.15.
Paired Obligation Provider Guidelines.......................................................................
28
Exhibit A Description of 2022 Project......................................................................................A-1
Exhibit B Form of Requisition for Disbursement from Acquisition Fund ............................... B-1
ExhibitC Purchase Price.......................................................................................................... C-1
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INSTALLMENT PURCHASE AGREEMENT
This INSTALLMENT PURCHASE AGREEMENT is made and entered into and dated as of
July 1, 2022, by and between TRUCKEE DONNER PUBLIC UTILITY DISTRICT, a public utility
district that is duly organized and existing under and by virtue of the laws of the State of California
(the "District"), and TRUCKEE DONNER PUBLIC UTILITY DISTRICT FINANCING
CORPORATION, a nonprofit public benefit corporation that is duly organized and existing under
and by virtue of the laws of the State of California (the "Corporation').
RECITALS
A. The District proposes to finance the acquisition and construction of certain capital
improvements, betterments, renovations and expansions of facilities within its Electric System, as
described in Exhibit A (collectively, the "2022 Project").
B. The Corporation has agreed to assist the District in financing the 2022 Project.
C. The District is authorized under Chapter 4 of Division 7 of the Public Utility Code of
the State of California, including but not limited to Articles 2 and 3 thereof, to acquire and construct
capital improvements, betterments, renovations and expansions of facilities within its Electric
System.
D. The District and the Corporation have duly authorized the execution of this
Installment Purchase Agreement.
E. All acts, conditions and things required by law to exist, to have happened and to have
been performed precedent to and in connection with the execution and delivery of this Installment
Purchase Agreement do exist, have happened and have been performed in regular and due time, form
and manner as required by law, and the parties hereto are now duly authorized to execute and enter
into this Installment Purchase Agreement.
ARTICLE I
DEFINITIONS
Section 1.1. Definitions. Unless the context otherwise requires, the terms that are defined
in this section shall for all purposes hereof and of any amendment hereof or supplement hereto and of
any report or other document that is mentioned herein or therein have the meanings defined herein,
the following definitions to be equally applicable to both the singular and plural forms of any of the
terms defined herein. All capitalized terms that are used herein and not defined herein shall have the
meanings which are ascribed thereto in the Trust Agreement.
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Acquisition Fund
The term "Acquisition Fund" means the fund by that name established under Section 3.6.
Bonds
The term "Bonds" means the 2015 Bonds and all other revenue bonds or notes of the District
authorized, executed, issued and delivered by the District, the payments of which are on a parity with
the Series 2022 Installment Payments and which are secured by a pledge of and lien on the Revenues
and payable from Net Revenues.
Contracts
The term "Contracts" means this Installment Purchase Agreement and any amendments and
supplements hereto, and all other contracts of the District authorized and executed by the District, the
Installment Payments under which are on a parity with the Series 2022 Installment Payments and
which are secured by a pledge and lien on the Revenues and payable from Net Revenues.
Corporation
The term "Corporation" means Truckee Donner Public Utility District Financing
Corporation, a nonprofit public benefit corporation that is duly organized and existing under and by
virtue of the laws of the State of California.
Debt Service
The term "Debt Service" means, for any period of calculation, the sum of:
(1) the interest accruing during such Fiscal Year on all outstanding Bonds,
assuming that all outstanding serial Bonds are retired as scheduled and that all outstanding term
Bonds are prepaid or paid from sinking fund payments as scheduled (except to the extent that such
interest is capitalized or is reasonably anticipated to be reimbursed to the District by the United
States of America pursuant to Section 54AA of the Code (Section 1531 of Title I of Division B of the
American Recovery and Reinvestment Act of 2009 (Pub. L. No. 111-5, 23 Stat. 115 (2009), enacted
May 157, 2009)), or any future similar program);
(2) that portion of the principal amount of all outstanding serial Bonds maturing
in such Fiscal Year or maturing in the next succeeding Fiscal Year accruing during such Fiscal Year
in each case computed as if such principal amounts were deemed to accrue daily during such Fiscal
Year in equal amounts, but excluding Excluded Principal;
(3) that portion of the principal amounts of all outstanding term Bonds required
to be prepaid or paid in such Fiscal Year or during the next succeeding Fiscal Year in each case
computed as if such principal amounts were deemed to accrue daily during such Fiscal Year in equal
amounts, but excluding Excluded Principal; and
(4) that portion of the Installment Payments required to be made during such
Fiscal Year or the next succeeding Fiscal Year in each case computed as if such Installment
Payments were deemed to accrue daily during such Fiscal Year in equal amounts (except to the
extent that the interest portion of such Installment Payments is capitalized or is reasonably
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anticipated to be reimbursed to the District by the United States of America pursuant to Section
54AA of the Code (Section 1531 of Title I of Division B of the American Recovery and
Reinvestment Act of 2009 (Pub. L. No. 111-5, 23 Stat. 115 (2009), enacted May 157, 2009)), or any
future similar program), but excluding Excluded Principal;
provided that, as to any such Bonds or Installment Payments bearing or comprising interest at other
than a fixed rate, the rate of interest used to calculate Debt Service shall be assumed to bear interest
at a fixed rate equal to the higher of
(i) the then -current variable interest rate borne by such Bonds or Contracts plus
1 %; and
(ii) if such Bonds or Contracts have been outstanding for at least twelve months,
the average rate over the twelve months immediately preceding the date of calculation, or if such
Bonds or Contracts have not been outstanding for the twelve prior months, the average rate borne by
reference to an index comparable to that to be utilized in determining the interest rate for the Bonds
to be issued or the Contracts to be executed;
provided further that if any series or issue of such Bonds or Installment Payments have twenty-five
percent (25%) or more of the aggregate principal amount of such series or issue due in any one year
(and such principal is not Excluded Principal), Debt Service shall be determined for the Fiscal Year
of determination as if the principal of and interest on such series or issue of such Bonds or
Installment Payments were being paid from the date of incurrence thereof in substantially equal
annual amounts over a period of twenty-five (25) years from the date of calculation; and
provided further that, as to any such Bonds or Contracts or portions thereof bearing no interest but
which are sold at a discount and which discount accretes with respect to such Bonds or Contracts or
portions thereof, such accreted discount shall be treated as interest in the calculation of Debt Service;
and
provided further that the amount on deposit in a debt service reserve fund on any date of calculation
of Debt Service shall be deducted from the amount of principal due at the final maturity of the Bonds
and Contracts for which such debt service reserve fund was established and to the extent the amount
in such debt service reserve fund is in excess of such amount of principal, such excess shall be
applied to the full amount of principal due, in each preceding year, in descending order, until such
amount is exhausted; and
provided further that if the Bonds or Contracts constitute Paired Obligations, the interest rate on such
Bonds or Contracts shall be the resulting linked rate or the effective fixed interest rate to be paid by
the District with respect to such Paired Obligations.
District
The term "District" means Truckee Donner Public Utility District, a public utility district that
is duly organized and existing under and by virtue of the laws of the State of California, including the
Law.
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Electric Service
The term "Electric Service" means the electric distribution service made available or
provided by the Electric System.
Electric System
The term `Electric System" means all electric generation, transmission and distribution
facilities and all general plant facilities related thereto now owned by the District and all other
properties, structures or works for the generation, transmission and distribution of electricity and all
rights to obtain, control or receive output, capacity or other electrical services heretofore or hereafter
acquired or constructed by the District, together with all additions, betterments, extensions or
improvements to such facilities, properties, structures or works or any part thereof hereafter acquired
and constructed.
Event of Default
The term "Event of Default" means an event described in Section 8.1.
Excluded Principal
The term "Excluded Principal" means each payment of principal of any Bond or Contract for
which there is on file with the Trustee: (1) a certificate of an Independent Municipal Advisor to the
effect that such Bond or Contract is commercial paper or otherwise of a revolving or short-term
nature and has a maturity of less than 42 months; and (2) a certificate of an authorized representative
of the District to the effect that the District intends to pay such principal from the proceeds of Bonds
or Contracts or other bonds, notes or other obligations of the District. No such determination shall
affect the security for such Bonds or Contracts or the obligation of the District to pay such Bonds or
Contracts from Net Revenues.
Fiscal Year
The term "Fiscal Year" means the period beginning on January 1 of each year and ending on
the last day of December of the next succeeding year, or any other twelve-month period selected and
designated as the official Fiscal Year of the District.
Independent Certified Public Accountant
The term "Independent Certified Public Accountant" means any firm of certified public
accountants appointed by the District, and each of whom is independent pursuant to the Statement on
Auditing Standards No. 1 of the American Institute of Certified Public Accountants.
Independent Municipal Advisor
The term "Independent Municipal Advisor" means a financial consultant or firm of such
consultants appointed by the District, which may, for purposes of the certification described in the
definition of "Paired Obligations" be an interest rate swap advisor, and who, or each of whom: (1) is
in fact independent and not under domination of the District; (2) does not have any substantial
interest, direct or indirect, with the District; (3) is an Independent Registered Municipal Advisor
under Section 15B of the Securities Exchange Act of 1934; and (4) is not connected with the District
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as an officer or employee of the District, but who may be regularly retained to make reports to the
District.
Installment Payment Date; Series 2022 Installment Payment Date
The term "Installment Payment Date" means any date on which Installment Payments are
scheduled to be paid by the District under and pursuant to any Contract. The term "Series 2022
Installment Payment Date" means the second Business Day preceding each Payment Date pursuant
to the Trust Agreement.
Installment Payments; Series 2022 Installment Payments
The term "Installment Payments" means the payments scheduled to be paid by the District
under and pursuant to the Contracts. The term "Series 2022 Installment Payments" means the
Installment Payments scheduled to be paid by the District hereunder and pursuant hereto.
Installment Purchase Agreement
The term "Installment Purchase Agreement" means this Installment Purchase Agreement,
dated as of July 1, 2022, by and between the District and the Corporation, as originally executed and
as it may from time to time be amended or supplemented in accordance herewith.
Law
The term "Law" means, the Public Utility District Act of the State of California (being
Division 7 of the Public Utility Code of the State of California), including all laws amendatory
thereof or supplemental thereto.
Manager
The term "Manager" means the General Manager of the District, or any other person
designated by the General Manager to act on behalf of the General Manager.
Net Proceeds
The term "Net Proceeds" means, when used with respect to any casualty insurance or
condemnation award, the proceeds from such insurance or condemnation award remaining after
payment of all expenses (including attorneys' fees) incurred in the collection of such proceeds.
Net Revenues
The term "Net Revenues" means, for any Fiscal Year, the Revenues for such Fiscal Year less
the Operation and Maintenance Costs for such Fiscal Year.
Operation and Maintenance Costs
The term "Maintenance and Operation Costs" means all costs paid or incurred by the District
for maintaining and operating the Electric System, including, but not limited to, (a) all costs of
electric energy and power generated or purchased by the District for resale, costs of transmission,
fuel supply and water supply in connection with the foregoing, (b) all reasonable expenses of
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management and repair and other expenses necessary to maintain and preserve the Electric System in
good repair and working order, (c) all administrative costs of the District that are charged directly or
apportioned to the operation of the Electric System, such as salaries and wages of employees,
overhead, taxes (if any) and insurance premiums, (d) all other reasonable and necessary costs of the
District or charges required to be paid by it to comply with the terms of the Agreement or any
resolution authorizing the execution of any Parity Obligations or of such Parity Obligations, such as
compensation, reimbursement and indemnification of the trustee, remarketing agent or surety costs
for any such Parity Obligations, letter of credit fees for any such Parity Obligations, fees and
expenses of Independent Certified Public Accountants and consulting engineers, and (e) all amounts
required to be paid by the District under contracts with a joint powers agency for the purchase of
capacity, energy, transmission capability or any other commodity or service in connection with the
foregoing, which contract requires payments by the District to be made thereunder to be treated as
Maintenance and Operation Costs; but excluding in all cases depreciation, replacement and
obsolescence charges or reserves therefore and amortization of intangibles.
Paired Obligation Provider
The term "Paired Obligation Provider" means a party to a Paired Obligation other than the
District.
Paired Obligations
The term "Paired Obligations" means any Bond or Contract (or portion thereof) designated as
Paired Obligations in the resolution, indenture or other document authorizing the issuance or
execution and delivery thereof, which are simultaneously issued or executed and delivered: (i) the
principal of which is of equal amount maturing and to be redeemed or prepaid (or cancelled after
acquisition thereof) on the same dates and in the same amounts; and (ii) the interest rates which,
taken together, are reasonably expected to result in a fixed interest rate obligation of the District for
the term of such Bond or Contract, as certified by an Independent Municipal Advisor in writing, and
which complies with the provisions of Section 10.15.
Project; 2022 Project
The term "Project" means any additions, betterments, extensions or improvements to the
District's Electric System designated by the Board of Directors of the District as a Project, the
acquisition and construction of which has been or will be paid for with the proceeds of any Contracts
or Bonds. The term "2022 Project" means the additions, betterments, extensions and improvements
to the Electric System described as such in Exhibit A.
Purchase Price
The term "Purchase Price" means the principal amount plus interest thereon owed by the
District to the Corporation under the terms hereof as provided in Section 4.1.
Rate Stabilization Fund
The term "Rate Stabilization Fund" means the fund by that name established and held by the
District pursuant to Section 5.5.
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Revenues
The term "Revenues" means all income, rents, rates, fees, charges and other moneys derived
from or attributable to the ownership or operation of the Electric System, including, without limiting
the generality of the foregoing, all income, rents, rates, fees, charges, business interruption insurance
proceeds or other moneys derived by the District from the sale, furnishing and supplying of
electricity, or other services, facilities and commodities sold, furnished or supplied through the
facilities of or in the conduct or operation of the business of the Electric System, including the
earnings on and income derived from the investment of the amounts described in clauses (1) through
(3) hereof, and on [Electric System Revenue Fund} reserves and amounts on deposit in the Rate
Stabilization Fund, and all amounts transferred from the Rate Stabilization Fund to the [Electric
System Revenue Fund] during any Fiscal Year in accordance with Section 5.5;but excluding in all
cases: (i) any amounts transferred from the Revenue Fund to the Rate Stabilization Fund during any
Fiscal Year in accordance with Section 5.2(d); (ii) customer deposits or any other deposits or
advances subject to refund until such deposits or advances have become the property of the District;
and (iii) any proceeds of taxes restricted by law to be used by the District to pay obligations of the
District hereafter issued.
Revenue Fund
The term "Revenue Fund" means those District accounts designated by the District, together
with other accounts created in the future and designated by action of the Board of Directors, as a part
of the [Electric System Revenue Fund] established pursuant to Section 5.2, and excludes any account
into which ad valorem taxes levied by the District are deposited.
Subordinate Obligations
The term "Subordinate Obligations" means all revenue bonds or notes of the District and all
contracts of the District payable from Revenues, which are secured by a pledge and lien on the
Revenues subordinate to the pledge of and lien on the Revenues described in Section 5.1 hereof and
which are payable from Net Revenues on a subordinate basis to the Installment Payments.
Trust Agreement
The term "Trust Agreement" means the Trust Agreement, dated as of July 1, 2022, by and
among the District, the Corporation and the Trustee, as originally executed and as it may from time
to time be amended or supplemented in accordance with its terms.
Trustee
The term "Trustee" means The Bank of New York Mellon Trust Company, N.A., acting in its
capacity as Trustee under and pursuant to the Trust Agreement, and its successors and assigns.
2022A Certificates
The term "2022A Certificates" means the Truckee Donner Public Utility District Electric
System Revenue Certificates of Participation, Series 2022A executed and delivered pursuant to the
Trust Agreement.
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ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1. Representations by the District. The District makes the following
representations:
(a) The District is a public utility district that is duly organized and existing
under and pursuant to the laws of the State of California, including the Law.
(b) The District has full legal right, power and authority to enter into this
Installment Purchase Agreement and carry out its obligations hereunder, and to carry out and
consummate all other transactions contemplated by this Installment Purchase Agreement, and the
District has complied with the provisions of the Law in all matters relating to such transactions.
(c) By proper action, the District has duly authorized the execution, delivery and
due performance of this Installment Purchase Agreement.
(d) The District will not take or, to the extent within its power, permit any action
to be taken which results in the interest paid for the installment purchase of the 2022 Project under
the terms of this Installment Purchase Agreement being included in the gross income of the
Corporation or its assigns for purposes of federal or State of California personal income taxation.
(e) The District has determined that it is necessary and proper for District uses
and purposes within the terms of the Law that the District acquire the 2022 Project in the manner
provided for in this Installment Purchase Agreement.
Section 2.2. Representations and Warranties by the Corporation. The Corporation makes
the following representations and warranties:
(a) The Corporation is a nonprofit public benefit corporation that is duly
organized and in good standing under the laws of the State of California, has full legal right, power
and authority to enter into this Installment Purchase Agreement and to carry out and consummate all
transactions contemplated by this Installment Purchase Agreement and by proper action has duly
authorized the execution and delivery and due performance of this Installment Purchase Agreement.
(b) The execution and delivery of this Installment Purchase Agreement and the
consummation of the transactions herein contemplated will not violate any provision of law, any
order of any court or other agency of government, or any indenture, material agreement or other
instrument to which the Corporation is now a party or by which it or any of its properties or assets is
bound, or be in conflict with, result in a breach of or constitute a default (with due notice or the
passage of time or both) under any such indenture, agreement or other instrument, or result in the
creation or imposition of any prohibited lien, charge or encumbrance of any nature whatsoever upon
any of the properties or assets of the Corporation.
(c) The Corporation will not take or permit any action to be taken which results
in interest paid for the installment purchase of the 2022 Project under the terms of this Installment
Purchase Agreement being included in the gross income of the Corporation or its assigns for
purposes of federal or State of California personal income taxation.
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ARTICLE III
ACQUISITION OF THE 2022 PROJECT
Section 3.1. Acquisition and Construction of the 2022 Project. The Corporation hereby
agrees to cause the 2022 Project, and any additions or modifications thereto to be constructed,
acquired or installed by the District as its agent, and the District shall enter into contracts and provide
for, as agent of the Corporation, the complete acquisition of the 2022 Project. The District hereby
agrees that it will cause the construction, acquisition and installation of the 2022 Project to be
diligently performed after the deposit of funds with the District pursuant to the Trust Agreement,
upon satisfactory completion of design work and compliance with the California Environmental
Quality Act and approval by the Board of Directors of the District, unforeseeable delays beyond the
reasonable control of the District only excepted. It is hereby expressly understood and agreed that
the Corporation shall be under no liability of any kind or character whatsoever for the payment of
any cost of the 2022 Project and that all such costs and expenses shall be paid by the District,
regardless of whether the funds deposited in the Acquisition Fund are sufficient to cover all such
costs and expenses.
Section 3.2. Changes to the 2022 Project. The District may substitute other improvements
for those listed as components of the 2022 Project in Exhibit A, but only if the District first files with
the Corporation and the Trustee a statement of the District: (a) identifying the improvements to be
substituted and the improvements to District facilities they replace in the 2022 Project; and (b) stating
that the estimated costs of construction, acquisition and installation of the substituted improvements
are not less than such costs for the improvements previously planned. The Trustee shall not be
required to review and shall not be deemed to have knowledge of the contents of such statement, it
being understood that such statement is to held by the Trustee as repository for, and may upon
request be made available to any Owner of the Series 2022A Certificates for examination and
copying at such Owner's expense.
Section 3.3. rReservedl.
Section 3.4. Purchase and Sale of the 2022 Project. In consideration for the Series 2022
Installment Payments as set forth in Section 4.2, the Corporation agrees to sell, and hereby sells, to
the District, and the District agrees to purchase, and hereby purchases, from the Corporation, the
2022 Project at the purchase price specified in Section 4.1 hereof and otherwise in the manner and in
accordance with the provisions of this Installment Purchase Agreement.
Section 3.5. Title. All right, title and interest in the 2022 Project shall vest in the District
immediately upon construction or acquisition of each component of the 2022 Project. Such vesting
shall occur without further action by the Corporation or the District, and the Corporation shall, if
requested by the District or if necessary to assure such automatic vesting, deliver any and all
documents which are required to assure such vesting.
Section 3.6. Acquisition Fund. There is hereby established with the District a fund known
as the "Acquisition Fund," which the District shall maintain and hold in trust separate and apart from
other funds held by it. The moneys in the Acquisition Fund shall be applied to the payment of the
costs of acquisition of the 2022 Project and of expenses incidental thereto. Before any payment is
made from the Acquisition Fund, the Manager shall cause to be filed with the Chief Financial Officer
of the District a Written Requisition in the form set forth in Exhibit B. Upon receipt of such Written
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Requisition, the Chief Financial Officer of the District will pay the amount set forth therein. The
Chief Financial Officer of the District need not make any such payment if he or she has received
notice of any lien, right to lien or attachment upon, or claim affecting the right to receive payment of,
any of the moneys so to be paid, which has not been released and will not be released simultaneously
with such payment.
When the 2022 Project shall have been constructed and acquired in accordance with this
Installment Purchase Agreement, a statement of the District stating the fact and date of such
acquisition, construction and acceptance and stating that all of such costs of acquisition and
incidental expenses have been determined and paid (or that all of such costs and expenses have been
paid less specified claims which are subject to dispute and for which a retention in the Acquisition
Fund is to be maintained in the full amount of such claims until such dispute is resolved), shall be
delivered to the Chief Financial Officer of the District and the Trustee by the Manager. Upon the
receipt of such statement, the Chief Financial Officer of the District shall transfer any remaining
balance in the Acquisition Fund not needed for Acquisition Fund purposes (but less the amount of
any such retention, which amount shall be certified to the Chief Financial Officer of the District by
the Manager) to the Trustee, which shall transfer such amounts to the Certificate Payment Fund.
ARTICLE IV
SERIES 2022 INSTALLMENT PAYMENTS
Section 4.1. Purchase Price.
(a) The Purchase Price to be paid by the District hereunder to the Corporation is
the sum of the principal amount of the District's obligations hereunder plus the interest to accrue on
the unpaid balance of such principal amount from the date hereof over the term hereof, subject to
prepayment as provided in Article VII.
(b) The principal amount of the payments to be made by the District hereunder is
set forth in Exhibit C hereto.
(c) The interest to accrue on the unpaid balance of such principal amount is as
specified in Section 4.2 and Exhibit C hereto, and shall be paid by the District as and constitute
interest paid on the principal amount of the District's obligations hereunder.
Section 4.2. Series 2022 Installment Payments. The District shall, subject to its rights of
prepayment provided in Article VII, pay the Corporation the Purchase Price in installment payments
of interest and principal in the amounts and on the Series 2022 Installment Payment Dates as set forth
in Exhibit C hereto.
Each Series 2022 Installment Payment shall be paid to the Corporation in lawful money of
the United States of America. In the event that the District fails to make any of the payments
required to be made by it under this section, such payment shall continue as an obligation of the
District until such amount shall have been fully paid, and the District agrees to pay the same with
interest accruing thereon at the rate or rates of interest then applicable to the remaining unpaid
principal balance of the Series 2022 Installment Payments if paid in accordance with their terms.
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The obligation of the District to make the Series 2022 Installment Payments is absolute and
unconditional, and until such time as the Purchase Price shall have been paid in full (or provision for
the payment thereof shall have been made pursuant to Article IX), the District will not discontinue or
suspend any Series 2022 Installment Payments required to be made by it under this section when due,
whether or not the Electric System or any part thereof is operating or operable or has been
completed, or its use is suspended, interfered with, reduced or curtailed or terminated in whole or in
part, and such payments 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.
ARTICLE V
SECURITY
Section 5.1. Pledge of Revenues. All Revenues and all amounts on deposit in the
Revenue Fund and the Rate Stabilization Fund are hereby irrevocably pledged to the payment of the
Series 2022 Installment Payments as provided herein, and the Revenues shall not be used for any
other purpose while any of the Series 2022 Installment Payments remain unpaid; provided that out of
the Revenues and amounts on deposit in the Revenue Fund there may be apportioned such sums for
such purposes as are expressly permitted herein. This pledge, together with the pledge created by all
other Contracts and Bonds, shall constitute a first lien on Revenues, the Revenue Fund, the Rate
Stabilization Fund and all amounts on deposit in such funds as permitted herein and subject to the
application of Revenues in accordance with the terms hereof.
Section 5.2. Allocation of Revenues. In order to carry out and effectuate the pledge and
lien contained herein, the District agrees and covenants that all Revenues shall be received in the
"Revenue Fund," which fund is hereby established and which fund the District agrees and covenants
to maintain and to hold separate and apart from other funds so long as any Installment Payments or
Bonds remain unpaid. Moneys in the Revenue Fund shall be used and applied by the District as
provided in this Installment Purchase Agreement.
The District shall, from the moneys in the Revenue Fund, pay all Operation and Maintenance
Costs (including amounts reasonably required to be set aside in contingency reserves for Operation
and Maintenance Costs, the payment of which is not then immediately required) as such Operation
and Maintenance Costs become due and payable. All remaining moneys in the Revenue Fund shall
be set aside by the District at the following times in the following respective special funds in the
following order of priority and all moneys in each of such funds shall be held in trust and shall be
applied, used and withdrawn only for the purposes hereinafter authorized in this Section:
(a) Certificate Payment Fund. On or before each Series 2022 Installment
Payment Date, the District shall, from the moneys in the Revenue Fund, transfer to the Trustee for
deposit in the Certificate Payment Fund a sum equal to the Series 2022 Installment Payment coming
due on such Series 2022 Installment Payment Date. The District shall also, from the moneys in the
Revenue Fund, transfer to the applicable trustee or payee for deposit in the applicable payment fund,
without preference or priority, and in the event of any insufficiency of such moneys ratably without
any discrimination or preference, any other Debt Service in accordance with the provisions of the
Contract, resolution or indenture relating thereto.
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No deposit need be made in the Certificate Payment Fund as Series 2022 Installment
Payments if the amount in the Certificate Payment Fund is at least equal to the amount of the Series
2022 Installment Payment due and payable on the next succeeding Series 2022 Installment Payment
Date.
All money in the Certificate Payment Fund shall be used and withdrawn by the Trustee in
accordance with the Trust Agreement.
(b) Reserve Funds. On or before each Series 2022 Installment Payment Date the
District shall, from the remaining moneys in the Revenue Fund, thereafter, without preference or
priority and in the event of any insufficiency of such moneys ratably without any discrimination or
preference, transfer to the applicable trustee for such reserve funds and/or accounts, if any, as may
have been established in connection with Bonds or Contracts, that sum, if any, necessary to restore
such funds or accounts to an amount equal to the reserve requirement with respect thereto.
(c) Subordinate Obligations. On or before the payment of principal or interest is
due with respect to any Subordinate Obligations, the District shall, from moneys in the Revenue
Fund, transfer to the applicable trustee or payee for deposit in the applicable payment fund, without
preference or priority, and in the event of any insufficiency of such moneys ratably without
discrimination or preference, payment on such Subordinate Obligations, in accordance with the
provisions of such Subordinate Obligation.
(d) Surplus. Moneys on deposit in the Revenue Fund on each Installment
Payment Date not required to make any of the payments required above may be expended by the
District at any time for any purpose permitted by law, including but not limited to transfers to the
Rate Stabilization Fund.
Section 5.3. Additional Contracts and Bonds. The District may at any time execute any
Contract or issue any Bonds, as the case may be, in accordance herewith; provided:
(a) The Net Revenues (not including amounts transferred from the Rate
Stabilization Fund pursuant to Section 5.5 to the Revenue Fund in excess of twenty-five percent
(25%) of Debt Service for such Fiscal Year) for the most recent audited Fiscal Year preceding the
date of adoption by the Board of Directors of the District of the resolution authorizing the issuance
of such Bonds or the date of the execution of such Contract, as the case may be, as evidenced by
both a calculation prepared by the District and a special report prepared by an Independent Certified
Public Accountant or an Independent Municipal Advisor on such calculation on file with the
District, shall have produced a sum equal to at least one hundred twenty-five percent (125%) of the
Debt Service for such Fiscal Year; and
(b) The Net Revenues (not including amounts transferred from the Rate
Stabilization Fund pursuant to Section 5.5 to the Revenue Fund in excess of twenty-five percent
(25%) of Debt Service for such Fiscal Year) for the most recent audited Fiscal Year preceding the
date of the execution of such Contract or the date of adoption by the Board of Directors of the
District of the resolution authorizing the issuance of such Bonds, as the case may be, including
adjustments to give effect as of the first day of such Fiscal Year: (i) to increases or decreases in rates
and charges for the Electric Service approved and in effect as of the date of calculation, as
evidenced by a calculation prepared by the District; and (ii) to each new connection to the Electric
System that, during all or any part of such Fiscal Year, was not in existence and that would have
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been derived from such connection if it had been made prior to the beginning of such Fiscal Year,
shall have produced a sum equal to at least one hundred twenty-five percent (125%) of. (1) the Debt
Service for such Fiscal Year; plus (2) the Debt Service which would have accrued on any Contracts
executed or Bonds issued since the end of such Fiscal Year, assuming that such Contracts had been
executed or Bonds had been issued at the beginning of such Fiscal Year; plus (3) the Debt Service
which would have accrued had such proposed additional Contract been executed or such proposed
additional Bonds been issued at the beginning of such Fiscal Year; and
(c) The estimated Net Revenues (not including amounts transferred from the
Rate Stabilization Fund pursuant to Section 5.5 to the Revenue Fund in excess of twenty-five
percent (25%) of Debt Service for such Fiscal Year) for the then current Fiscal Year and for each
Fiscal Year thereafter to and including the first complete Fiscal Year after the latest date of
operation of any uncompleted Project, as evidenced by a certificate of the Manager on file with the
District, including (after giving effect to the completion of all such uncompleted Projects) an
allowance for estimated Net Revenues (not including amounts transferred from the Rate
Stabilization Fund pursuant to Section 5.5 to the Revenue Fund in excess of twenty-five percent
(25%) of Debt Service for such Fiscal Year) for each of such Fiscal Years arising from any increase
in the income, rents, fees, rates and charges estimated to be fixed, prescribed or received for the
Electric Service and which are economically feasible and reasonably considered necessary based on
projected operations for such period, as evidenced by a certificate of the Manager on file with the
District, shall produce a sum equal to at least one hundred twenty-five percent (125%) of the
estimated Debt Service for each of such Fiscal Years, after giving effect to the execution of all
Contracts and the issuance of all Bonds estimated to be required to be executed or issued to pay the
costs of completing all uncompleted Projects within such Fiscal Years, assuming that all such
Contracts and Bonds have maturities, interest rates and proportionate principal repayment
provisions similar to the Contract last executed or then being executed or the Bonds last issued or
then being issued for the purpose of acquiring and constructing any of such uncompleted Projects;
and
Notwithstanding the foregoing, Bonds or Contracts may be issued or incurred to refund
outstanding Bonds or Contracts if, after giving effect to the application of the proceeds thereof, total
Debt Service will not be increased in any Fiscal Year in which Bonds or Contracts (outstanding on
the date of issuance or incurrence of such refunding Bonds or Contracts, but excluding such
refunding Bonds or Contracts) not being refunded are outstanding.
Notwithstanding satisfaction of the other conditions to the execution of any Contract or the
issuance of Bonds set forth in this section, no such execution or issuance may occur if an Event of
Default (or any event which, once all notice or grace periods have passed, would constitute an Event
of Default) exists, unless such Event of Default shall be cured upon such execution or issuance.
Nothing in this section shall prohibit the District from issuing or entering into Subordinate
Obligations.
Section 5.4. Investments. All moneys held by the District in the Revenue Fund, the Rate
Stabilization Fund and the Acquisition Fund shall be invested in Permitted Investments and the
investment earnings thereon shall remain on deposit in such funds, except as otherwise provided
herein.
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Section 5.5. Rate Stabilization Fund. There is hereby established with the District a fund
called the "Rate Stabilization Fund (Electric)." The District hereby agrees and covenants to maintain
the Rate Stabilization Fund so long as any 2022A Certificates remain outstanding. There is $0 on
deposit in the Rate Stabilization Fund as of the date of the initial execution and delivery of the 2022A
Certificates. The District may withdraw and deposit amounts therein from time to time in its sole
discretion.
Amounts in the Rate Stabilization Fund will be disbursed, allocated and applied by the
District solely to the uses and purposes hereinafter described in this Installment Purchase Agreement,
and the Rate Stabilization Fund shall be accounted for separately and apart from all other accounts,
funds, money or other resources of the District.
The Rate Stabilization Fund and all amounts on deposit therein are hereby irrevocably
pledged to the payment of the Bonds and Contracts as provided herein; provided that amounts on
deposit in the Rate Stabilization Fund may be apportioned for such purposes as are expressly
permitted herein. This pledge shall constitute a first lien on amounts on deposit in the Rate
Stabilization Fund for the payment of Contracts and Bonds in accordance with the terms hereof.
The District may withdraw all or any portion of the amounts on deposit in the Rate
Stabilization Fund from time to time and transfer such amounts to the Revenue Fund for application
in accordance with Section 5.2 hereof. Amounts transferred from the Rate Stabilization Fund to the
Revenue Fund pursuant to this Section during or within 270 days after the end of a Fiscal Year may
be taken into account as Revenues for purposes of the calculations in Sections 5.3 and 6.13 for such
Fiscal Year to the extent provided in the definition of "Revenues" in Section 1.1.
ARTICLE VI
COVENANTS OF THE DISTRICT
Section 6.1. Compliance with Installment Purchase Agreement and Ancillary Agreements.
The District will punctually pay the Series 2022 Installment Payments in strict conformity with the
terms hereof, and will faithfully observe and perform all of the agreements, conditions, covenants
and terms contained herein which are required to be observed and performed by it, and will not
terminate this Installment Purchase Agreement for any cause including, without limiting the
generality of the foregoing, any acts or circumstances that may constitute failure of consideration,
destruction of or damage to the 2022 Project, commercial frustration of purpose, any change in the
tax or other laws of the United States of America or of the State of California or any political
subdivision of either or any failure of the Corporation to observe or perform any agreement,
condition, covenant or term contained herein required to be observed and performed by it, whether
express or implied, or any duty, liability or obligation arising out of or connected herewith or the
insolvency, or deemed insolvency, or bankruptcy or liquidation of the Corporation or any force
majeure, including acts of God, tempest, storm, earthquake, war, rebellion, riot, civil disorder, acts of
public enemies, blockade or embargo, strikes, industrial disputes, lockouts, lack of transportation
facilities, fire, explosion or acts or regulations of governmental authorities.
The District will faithfully observe and perform all of the agreements, conditions, covenants
and terms contained in the Trust Agreement required to be observed and performed by it, and it is
expressly understood and agreed by and among the parties to this Installment Purchase Agreement
and the Trust Agreement that, subject to Section 10.6 hereunder, each of the agreements, conditions,
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covenants and terms contained in each such agreement is an essential and material term of the
purchase of and payment for the 2022 Project by the District pursuant to, and in accordance with, and
as authorized under the Law.
The District will faithfully observe and perform all of the agreements, conditions, covenants
and terms required to be observed and performed by it pursuant to all outstanding Contracts and
Bonds as such may from time to time be executed or issued, as the case may be.
Section 6.2. Against Encumbrances. The District will not make any pledge of or place
any lien on Revenues, the Revenue Fund, the Rate Stabilization Fund or the moneys in the Revenue
Fund and the Rate Stabilization Fund except as provided herein. The District may at any time, or
from time to time, issue evidences of indebtedness or incur other obligations for any lawful purpose
which are payable from and secured by a pledge of and lien on Revenues or any moneys in the
Revenue Fund or the Rate Stabilization Fund as may from time to time be deposited therein,
provided that such pledge and lien shall be subordinate in all respects to the pledge of and lien
thereon provided herein.
Section 6.3. Against Sale or Other Disposition of PropertX. The District will not enter into
any agreement or lease which impairs the operation of the Electric System or any part thereof which
is necessary to secure adequate Revenues for the payment of the Series 2022 Installment Payments,
or which would otherwise impair the rights of the Corporation hereunder or the operation of the
Water System. Any real or personal property which has become nonoperative or which is not needed
for the efficient and proper operation of the Electric System, or any material or equipment which has
become worn out, may be sold if such sale will not impair the ability of the District to pay the Series
2022 Installment Payments and if the proceeds of such sale are deposited in the Revenue Fund.
Nothing herein shall restrict the ability of the District to sell any portion of the Electric
System if such portion is immediately repurchased by the District and if such arrangement cannot by
its terms result in the purchaser of such portion of the Electric System exercising any remedy which
would deprive the District of or otherwise interfere with its right to own and operate such portion of
the Electric System.
Section 6.4. Against Competitive System. To the extent that it can so legally obligate
itself, the District covenants that it will not acquire, construct, maintain or operate and will not, to the
extent permitted by law and within the scope of its powers, permit any other public or private agency,
corporation, district or political subdivision or any person whomsoever to acquire, construct,
maintain or operate within the District any Electric System competitive with the Electric System.
Section 6.5. Tax Covenants. Notwithstanding any other provision of this Installment
Purchase Agreement, absent an opinion of Special Counsel that the exclusion from gross income of
interest with respect to the 2022A Certificates will not be adversely affected for federal income tax
purposes, the District and the Corporation covenant to comply with all applicable requirements of the
Code necessary to preserve such exclusion from gross income with respect to the 2022A Certificates
and specifically covenant, without limiting the generality of the foregoing, as follows:
(a) Private Activity. The District and the Corporation will not take or omit to
take any action or make any use of the proceeds of the 2022A Certificates or of any other moneys or
property which would cause the 2022A Certificates to be "private activity bonds" within the meaning
of Section 141 of the Code.
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(b) Arbitrage. The District and the Corporation will make no use of the proceeds
of the 2022A Certificates or of any other amounts or property, regardless of the source, or take or
omit to take any action which would cause the 2022A Certificates to be "arbitrage bonds" within the
meaning of Section 148 of the Code.
(c) Federal Guarantee. The District and the Corporation will make no use of the
proceeds of the 2022A Certificates or take or omit to take any action that would cause the 2022A
Certificates to be "federally guaranteed" within the meaning of Section 149(b) of the Code.
(d) Information Reporting. The District and the Corporation will take or cause to
be taken all necessary action to comply with the informational reporting requirements of Section
149(e) of the Code necessary to preserve the exclusion of interest with respect to the 2022A
Certificates pursuant to Section 103(a) of the Code.
(e) Hedge Bonds. The District and the Corporation will make no use of the
proceeds of the 2022A Certificates or any other amounts or property, regardless of the source, or take
any action or refrain from taking any action that would cause the 2022A Certificates to be considered
"hedge bonds" within the meaning of Section 149(g) of the Code unless the District and the
Corporation take all necessary action to assure compliance with the requirements of Section 149(g)
of the Code to maintain the exclusion from gross income of interest for federal income tax purposes
with respect to the 2022A Certificates.
(f) Miscellaneous. The District and the Corporation will take no action, or omit
to take any action, inconsistent with the expectations stated in any Tax Certificate executed with
respect to the 2022A Certificates and will comply with the covenants and requirements stated therein
and incorporated by reference herein.
This Section and the covenants set forth herein shall not be applicable to, and nothing
contained herein shall be deemed to prevent the District from issuing Bonds or executing and
delivering Contracts, the interest with respect to which has been determined by Special Counsel to be
subject to federal income taxation.
Section 6.6. Maintenance and Operation of the Electric System. The District will
maintain and preserve the Electric System in good repair and working order at all times, operate the
Electric System in an efficient and economical manner and pay all Operation and Maintenance Costs
as they become due and payable.
Section 6.7. Payment of Claims. The District will pay and discharge any and all lawful
claims for labor, materials or supplies which, if unpaid, might become a lien on the Revenues or the
funds or accounts created hereunder or under the Trust Agreement or on any funds in the hands of
the District pledged to pay the Series 2022 Installment Payments or to the Owners prior or superior to
the lien of the Series 2022 Installment Payments or which might impair the security of the Series
2022 Installment Payments.
Section 6.8. Compliance with Contracts. The District will comply with, keep, observe and
perform all agreements, conditions, covenants and terms, express or implied, required to be
performed by it contained in all contracts for the use of the Electric System and all other contracts
affecting or involving the Electric System, to the extent that the District is a party thereto.
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Section 6.9. Insurance.
(a) The District will procure and maintain or cause to be procured and
maintained insurance on the Electric System with responsible insurers in such amounts and against
such risks (including damage to or destruction of the Electric System) as are usually covered in
connection with water systems similar to the Electric System so long as such insurance is available
from reputable insurance companies on commercially reasonable terms.
In the event of any damage to or destruction of the Electric System caused by the perils
covered by such insurance, the Net Proceeds thereof shall be applied to the reconstruction, repair or
replacement of the damaged or destroyed portion of the Electric System. The District shall begin
such reconstruction, repair or replacement promptly after such damage or destruction shall occur, and
shall continue and properly complete such reconstruction, repair or replacement as expeditiously as
possible, and shall pay out of such Net Proceeds all costs and expenses in connection with such
reconstruction, repair or replacement so that the same shall be completed and the Electric System
shall be free and clear of all claims and liens.
If such Net Proceeds exceed the costs of such reconstruction, repair or replacement portion of
the Electric System and/or the cost of the construction of additions, betterments, extensions or
improvements to the Electric System, then the excess Net Proceeds may, at the option of the District,
be applied in part to the prepayment of Series 2022 Installment Payments as provided in Article VII
and in part to such other fund or account as may be appropriate and used for the retirement of Bonds
and Contracts in the same proportion which the aggregate unpaid principal balance of the Series 2022
Installment Payments then bears to the aggregate unpaid principal amount of such Bonds and
Contracts. If such Net Proceeds are sufficient to enable the District to retire the entire obligation
evidenced hereby prior to the final due date of the principal and interest on the Series 2022
Installment Payments as well as the entire obligations evidenced by Bonds and Contracts then
remaining unpaid prior to their final respective due dates, the District may elect not to reconstruct,
repair or replace the damaged or destroyed portion of the Electric System and/or not to construct
other additions, betterments, extensions or improvements to the Electric System; and thereupon such
Net Proceeds shall be applied to the prepayment of principal and interest on the Series 2022
Installment Payments as provided in Article VII and to the retirement of such Bonds and Contracts.
(b) The District will procure and maintain such other insurance as it shall deem advisable
or necessary to protect its interests, which insurance shall afford protection in such amounts and
against such risks as are usually covered in connection with electric systems similar to the Electric
System.
(c) Any insurance required to be maintained by paragraph (a) above and, if the District
determines to procure and maintain insurance pursuant to paragraph (b) above, such insurance, may
be maintained under a self-insurance program so long as such self-insurance is maintained in the
amounts and manner usually maintained in connection with electric systems similar to the Electric
System and is, in the opinion of an accredited actuary, actuarially sound.
Section 6.10. Accounting Records; Financial Statements and Other Reports. The District
will keep appropriate accounting records in which complete and correct entries shall be made of all
transactions relating to the Electric System, which records shall be available for inspection by the
Corporation and the Trustee at reasonable hours and under reasonable conditions. The Trustee shall
have no duties to inspect such records.
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Section 6.11. Protection of Security and Rights of the Corporation. The District will
preserve and protect the security hereof and the rights of the Corporation to the Series 2022
Installment Payments hereunder and will warrant and defend such rights against all claims and
demands of all persons.
Section 6.12. Payment of Taxes and Compliance with Governmental Regulations. The
District will pay and discharge all taxes, assessments and other governmental charges which may
hereafter be lawfully imposed upon the Electric System, or any part thereof or upon the Revenues
when the same shall become due. The District will duly observe and conform with all valid
regulations and requirements of any governmental authority relative to the operation of the Electric
System, or any part thereof, but the District shall not be required to comply with any regulations or
requirements so long as the validity or application thereof shall be contested in good faith.
Section 6.13. Amount of Rates and Charges.
(a) To the fullest extent permitted by law, the District shall fix and prescribe, at
the commencement of each Fiscal Year, rates and charges for the Electric Service provided by the
Electric System which are reasonably expected to be at least sufficient to yield during each Fiscal
Year Net Revenues equal to one hundred twenty-five percent (125%) of Debt Service payable in
such Fiscal Year; provided, however, that for purposes of this Section, Revenues in such Fiscal Year
shall not include any amount transferred from the Rate Stabilization Fund to the Revenue Fund in
excess of twenty-five percent (25%) of Debt Service payable in such Fiscal Year.
(b) The District may make adjustments from time to time in such rates and
charges and may make such classification thereof as it deems necessary, but shall not reduce the rates
and charges then in effect unless the Net Revenues, from such reduced rates and charges are
reasonably expected to be sufficient to meet the requirements of this section.
(c) So long as the District has complied with its obligations set forth in clauses
(a) and (b) above, the failure of Net Revenues to equal one hundred twenty-five percent (125%) of
Debt Service at the end of a Fiscal Year shall not constitute a default or an Event of Default
hereunder.
Section 6.14. Collection of Rates and Charges. The District will have in effect at all times
by-laws, rules and regulations requiring each customer of the Electric System to pay the rates and
charges applicable to the Electric Service and providing for the billing thereof and for a due date and
a delinquency date for each bill. In each case where such bill remains unpaid in whole or in part after
it becomes delinquent, the District may disconnect such purchaser from the Electric System, and
such purchaser shall not thereafter be reconnected to the Electric System except in accordance with
District by-laws or rules and regulations governing such situations of delinquency.
Section 6.15. Eminent Domain Proceeds. If all or any part of the Electric System shall be
taken by eminent domain proceedings, the Net Proceeds thereof shall be applied as follows:
(a) If. (1) the District files with the Trustee a certificate showing: (i) the
estimated loss of annual Net Revenues, if any, suffered or to be suffered by the District by reason of
such eminent domain proceedings; (ii) a general description of the additions, betterments, extensions
or improvements to the Electric System proposed to be acquired and constructed by the District from
such Net Proceeds; and (iii) an estimate of the additional annual Net Revenues to be derived from
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such additions, betterments, extensions or improvements; and (2) the District, on the basis of such
certificate filed with the Trustee, determines that the estimated additional annual Net Revenues will
sufficiently offset the estimated loss of annual Net Revenues resulting from such eminent domain
proceedings so that the ability of the District to meet its obligations hereunder will not be
substantially impaired (which determination shall be final and conclusive), then the District shall
promptly proceed with the acquisition and construction of such additions, betterments, extensions or
improvements substantially in accordance with such certificate and such Net Proceeds shall be
applied to the payment of the costs of such acquisition and construction, and any balance of such Net
Proceeds not required by the District for such purpose shall be deposited in the Revenue Fund as
directed by the District.
(b) If the foregoing conditions are not met, then such Net Proceeds shall be
applied by the District in part to the prepayment of the Series 2022 Installment Payments as provided
in Article VII and in part to such other fund or account as may be appropriate and used for the
retirement of Bonds and Contracts in the same proportion which the aggregate unpaid principal
balance of principal and Interest due on the Series 2022 Installment Payments then bears to the
aggregate unpaid principal amount of such Bonds and Contracts.
Section 6.16. If all or any part of the Electric System shall be taken by eminent domain
proceedings, the Net Proceeds thereof will be applied as follows:
(a) I£ (1) the District files with the Trustee a certificate showing: (i) the
estimated loss of annual Net Revenues, if any, suffered or to be suffered by the District by reason of
such eminent domain proceedings; (ii) a general description of the additions, betterments, extensions
or improvements to the Electric System proposed to be acquired and constructed by the District from
such Net Proceeds; and (iii) an estimate of the additional annual Net Revenues to be derived from
such additions, betterments, extensions or improvements, and (2) the District, on the basis of such
certificate filed with the Trustee, determines that the estimated additional annual Net Revenues will
sufficiently offset the estimated loss of annual Net Revenues resulting from such eminent domain
proceedings so that the ability of the District to meet its obligations hereunder will not be
substantially impaired (which determination shall be final and conclusive), then the District shall
promptly proceed with the acquisition and construction of such additions, betterments, extensions or
improvements substantially in accordance with such certificate and such Net Proceeds shall be
applied for the payment of the costs of such acquisition and construction, and any balance of such
Net Proceeds not required by the District for such purpose shall be deposited in the Electric System
Revenue Fund as directed by the District.
(b) If the foregoing conditions are not met, then such Net Proceeds shall be
applied by the District in part to the prepayment of the 2022A Certificates as provided in Article IV
and in part to such other fund or account as may be appropriate and used for the retirement of Bonds
and Contracts in the same proportion which the aggregate unpaid principal balance of principal and
Interest due on the 2022A Certificates then bears to the aggregate unpaid principal amount of such
Bonds and Contracts.
Section 6.17. Further Assurances. The District will adopt, deliver, execute and make any
and all further assurances, instruments and resolutions as may be reasonably necessary or proper to
carry out the intention or to facilitate the performance hereof and for the better assuring and
confirming unto the Corporation of the rights and benefits provided to it herein.
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Section 6.18. Enforcement of Contracts. The District will not voluntarily consent to or
permit any rescission of, nor will it consent to any amendment to or otherwise take any action under
or in connection with any contracts previously or hereafter entered into if such rescission or
amendment would in any manner impair or adversely affect the ability of the District to pay the
Series 2022 Installment Payments.
ARTICLE VII
PREPAYMENT OF SERIES 2022 INSTALLMENT PAYMENTS
Section 7.1. Prepayment. The District may prepay the Series 2022 Installment Payments,
as a whole or in part, in the order of payment date as directed by the District, on the date and at the
prepayment price (expressed as a percentage of the principal amount of the Series 2022 Installment
Payments to be prepaid) plus accrued interest thereon to the date of prepayment, as set forth in
Section 4.1 of the Trust Agreement.
Notwithstanding any such prepayment, the District shall not be relieved of its obligations
hereunder, including its obligations under Article IV, until the Purchase Price shall have been fully
paid (or provision for payment thereof shall have been provided to the written satisfaction of the
Corporation and the Trustee) and the requirements of Article IX hereof shall have been satisfied.
Section 7.2. Method of Prepayment. Before making any prepayment pursuant to
Section 7.1, the District shall, within five (5) days following the event permitting the exercise of such
right to prepay or creating such obligation to prepay or a determination to prepay, give written notice
to the Corporation and the Trustee describing such event and specifying the date on which the
prepayment will be paid, which date shall be not less than sixty (60) nor more than seventy-five (75)
days from the date such notice is given.
ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES OF THE CORPORATION
Section 8.1. Events of Default and Acceleration of Maturities. If one or more of the
following Events of Default shall happen, that is to say:
(a) if default shall be made by the District in the due and punctual payment of
any Series 2022 Installment Payment or any Contract or Bond when and as the same shall become
due and payable;
(b) if default shall be made by the District in the performance of any of the
agreements or covenants required herein or in connection with any Contract or Bond to be performed
by it, and such default shall have continued for a period of sixty (60) days after the District shall have
been given notice in writing of such default by the Corporation; provided, however, that if in the
reasonable opinion of the District the default stated in the notice can be corrected, but not within such
sixty (60) day period, and corrective action is instituted by the District within such sixty (60) day
period and diligently pursued in good faith until the default is corrected, such default shall not be an
Event of Default hereunder;
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(c) if the District shall file a petition or answer seeking arrangement or
reorganization under the federal bankruptcy laws or any other applicable law of the United States of
America or any state therein, or if a court of competent jurisdiction shall approve a petition filed with
or without the consent of the District seeking arrangement or reorganization under the federal
bankruptcy laws or any other applicable law of the United States of America or any state therein, or
if under the provisions of any other law for the relief or aid of debtors any court of competent
jurisdiction shall assume custody or control of the District or of the whole or any substantial part of
its property; or
(d) if payment of the principal of any Contract or Bond is accelerated in
accordance with its terms;
then and in each and every such case upon the occurrence of such Event of Default specified in
clauses (c) and (d) above, without any notice to the District or any other act by any person, the entire
principal amount of the unpaid Series 2022 Installment Payments and the accrued interest thereon
shall be immediately due and payable, and for any other Event of Default the Corporation may, by
notice in writing to the District declare the entire principal amount of the unpaid Series 2022
Installment Payments and the accrued interest thereon to be due and payable immediately, and upon
any such declaration the same shall become immediately due and payable, anything contained herein
to the contrary notwithstanding.
This section, however, is subject to the condition that if at any time after the entire principal
amount of the unpaid Series 2022 Installment Payments and the accrued interest thereon shall have
been so declared due and payable and before any judgment or decree for the payment of the moneys
due shall have been obtained or entered the District shall deposit with the Trustee a sum sufficient to
pay the unpaid principal amount of the Series 2022 Installment Payments or the unpaid payment of
any other Contract or Bond referred to in clause (a) above due prior to such declaration and the
accrued interest thereon, with interest on such overdue installments, at the rate or rates applicable to
the remaining unpaid principal balance of the Series 2022 Installment Payments or such Contract or
Bond if paid in accordance with their terms, and the reasonable expenses of the Corporation and the
Trustee, and any and all other defaults known to the Corporation (other than in the payment of the
entire principal amount of the unpaid Series 2022 Installment Payments and the accrued interest
thereon due and payable solely by reason of such declaration) shall have been made good or cured to
the satisfaction of the Corporation, if appropriate, or provision deemed by the Corporation, if
appropriate, to be adequate shall have been made therefor, then and in every such case the
Corporation, if appropriate by written notice to the District, may rescind and annul such declaration
and its consequences; but no such rescission and annulment shall extend to or shall affect any
subsequent default or shall impair or exhaust any right or power consequent thereon.
The District shall give prompt written notice to the Corporation and the Trustee upon
becoming aware of the occurrence of any default or Event of Default hereunder; and the Corporation
shall give prompt written notice to the Trustee upon becoming aware of any default or Event of
Default hereunder.
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Section 8.2. Application of Funds Upon Acceleration. Upon the date of the declaration of
acceleration as provided in Section 8.1, all Revenues thereafter received by the District shall be
applied in the following order:
First, to the payment, without preference or priority, and in the event of any insufficiency
ratably without any discrimination or preference, of the fees, costs and expenses (including legal fees
and expenses) of the Trustee in all of its capacities, if any, in carrying out or enforcing the provisions
of the Installment Purchase Agreement and the Trust Agreement, until paid in full, and then to the
fees, costs and expenses (including legal fees and expenses) of the Corporation, if any, in carrying
out the provisions of the Installment Purchase Agreement and the Trust Agreement, including
reasonable compensation to their respective accountants and counsel;
Second, to the payment of the Operation and Maintenance Costs;
Third, to the payment of the entire principal amount of the unpaid Series 2022 Installment
Payments and the unpaid principal amount of all Bonds and Contracts and the accrued interest
thereon, with interest on the overdue installments at the rate or rates of interest applicable to the
Series 2022 Installment Payments and such Bonds and Contracts if paid in accordance with their
respective terms; and
Fourth, to the payment of Subordinate Obligations in accordance with the terms thereof.
Section 8.3. Other Remedies of the Corporation. The Corporation shall have the right:
(a) by mandamus or other action or proceeding or suit at law or in equity to
enforce its rights against the District or any director, officer or employee thereof, and to compel the
District or any such director, officer or employee to perform and carry out its or his duties under the
Law and the agreements and covenants required to be performed by it or him contained herein;
(b) by suit in equity to enjoin any acts or things which are unlawful or violate the
rights of the Corporation; or
(c) by suit in equity upon the happening of an Event of Default to require the
District and its directors, officers and employees to account as the trustee of an express trust.
Notwithstanding anything contained herein, the Corporation shall have no security interest in
or mortgage on the 2022 Project, the Electric System or other assets of the District and no default
hereunder shall result in the loss of the 2022 Project, the Electric System or other assets of the
District.
Section 8.4. Non -Waiver. Nothing in this article or in any other provision hereof shall
affect or impair the obligation of the District, which is absolute and unconditional, to pay the Series
2022 Installment Payments to the Corporation at the respective due dates or upon prepayment from
the Net Revenues, the Revenue Fund, the Rate Stabilization Fund and the other funds herein pledged
for such payment, or shall affect or impair the right of the Corporation, which is also absolute and
unconditional, to institute suit to enforce such payment by virtue of the contract embodied herein.
A waiver of any default or breach of duty or contract by the Corporation shall not affect any
subsequent default or breach of duty or contract or impair any rights or remedies on any such
subsequent default or breach of duty or contract. No delay or omission by the Corporation to
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exercise any right or remedy accruing upon any default or breach of duty or contract shall impair any
such right or remedy or shall be construed to be a waiver of any such default or breach of duty or
contract or an acquiescence therein, and every right or remedy conferred upon the Corporation by the
Law or by this article may be enforced and exercised from time to time and as often as shall be
deemed expedient by the Corporation.
If any action, proceeding or suit to enforce any right or exercise any remedy is abandoned or
determined adversely to the Corporation, the District and the Corporation shall be restored to their
former positions, rights and remedies as if such action, proceeding or suit had not been brought or
taken.
Section 8.5. Remedies Not Exclusive. No remedy herein conferred upon or reserved to
the Corporation is intended to be exclusive of any other remedy, and each such remedy shall be
cumulative and shall be in addition to every other remedy given hereunder or now or hereafter
existing in law or in equity or by statute or otherwise and may be exercised without exhausting and
without regard to any other remedy conferred by the Law or any other law.
Section 8.6. Exercise of Remedies. Notwithstanding any other provision of this Article
VIII: (a) this Installment Purchase Agreement and all rights and remedies of the Corporation
hereunder have been assigned as of the date hereof by the Corporation to the Trustee; (b) the exercise
by the Trustee of such rights and remedies shall be subject to the provisions of Section 7.13 of the
Trust Agreement, which is incorporated herein by this reference and made a part hereof, and (c) in
taking any action (or forbearance from action) under or pursuant to this Installment Purchase
Agreement, including without limitation the enforcement or exercise of rights or remedies pursuant
to this Article VIII, and otherwise with respect to matters arising hereunder, the Trustee shall have
and enjoy the rights and protections set forth in the Trust Agreement in addition to those set forth
herein.
ARTICLE IX
DISCHARGE OF OBLIGATIONS
Section 9.1. Discharge of Obligations. When:
(a) all or any portion of the Series 2022 Installment Payments shall have become
due and payable in accordance herewith or a written notice of the District to prepay all or any portion
of the Series 2022 Installment Payments shall have been filed with the Trustee; and
(b) there shall have been deposited with the Trustee at or prior to the Series 2022
Installment Payment Date or date specified for prepayment, in trust for the benefit of the Corporation
or its assigns and irrevocably appropriated and set aside to the payment of all or any portion of the
Series 2022 Installment Payments, sufficient moneys and non -callable Permitted Investments, issued
by the United States of America and described in clause (A) of the definition thereof, the principal of
and interest on which when due will provide money sufficient to pay all principal, prepayment
premium, if any, and interest of such Series 2022 Installment Payments to their respective Series
2022 Installment Payment Dates or prepayment date or dates as the case may be; and
(c) provision shall have been made for paying all fees and expenses of the
Trustee,
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then and in that event, the right, title and interest of the Corporation herein and the obligations of the
District hereunder shall, with respect to all or such portion of the Series 2022 Installment Payments
as have been so provided for, thereupon cease, terminate, become void and be completely discharged
and satisfied (except for the right of the Trustee and the obligation of the District to have such
moneys and such Permitted Investments applied to the payment of such Series 2022 Installment
Payments); provided that such termination, discharge and satisfaction shall not apply to the
obligations of the District pursuant to Section 10.13 hereof, which shall survive.
Any deposit described in this Section 9.1 that includes Permitted Investments shall be
accompanied by delivery by the District to the Trustee of a report of an Independent Certified Public
Accountant verifying the sufficiency of the amounts, if any, described in this Section 9.1 to ensure
payment of the Series 2022 Installment Payments being defeased as provided above (a "Verification
Report").
In such event, upon request of the District, the Trustee shall cause an accounting for such
period or periods as may be requested by the District to be prepared and filed with the District,
subject to its receipt from the District of a Verification Report and an opinion of counsel to the effect
that the conditions for such discharge and satisfaction set forth in this Installment Purchase
Agreement have been satisfied, shall execute and deliver to the District all such instruments as may
reasonably be necessary or desirable to evidence such total or partial discharge and satisfaction, as
the case may be, and, in the event of a total discharge and satisfaction, the Trustee shall pay over to
the District, after payment of all amounts due the Trustee pursuant to the Trust Agreement as an
overpayment of Series 2022 Installment Payments, all such moneys or such Permitted Investments
held by it pursuant hereto other than such moneys and such Permitted Investments, as are required
for the payment or prepayment of the Series 2022 Installment Payments, which moneys and
Permitted Investments shall continue to be held by the Trustee in trust for the payment of the Series
2022 Installment Payments and shall be applied by the Trustee to the payment of the Series 2022
Installment Payments of the District.
ARTICLE X
MISCELLANEOUS
Section 10.1. Liability of District Limited. Notwithstanding anything contained herein,
except with respect to the District's indemnification obligations to the Trustee and the Corporation
hereunder and under the Trust Agreement, the District shall not be required to advance any moneys
derived from any source of income other than the Net Revenues and the other funds provided herein
and in the Trust Agreement for the payment of the Series 2022 Installment Payments or for the
performance of any agreements or covenants required to be performed by it contained herein. The
District may, however, advance moneys for any such purpose so long as such moneys are derived
from a source legally available for such purpose and may be legally used by the District for such
purpose.
The obligation of the District to make the Series 2022 Installment Payments is a special
obligation of the District payable solely from such Net Revenues and other funds described herein,
and does not constitute a debt of the District or of the State of California or of any political
subdivision thereof within the meaning of any constitutional or statutory debt limitation or
restriction.
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Section 10.2. Benefits of Installment Purchase Agreement Limited to Parties. Nothing
contained herein, expressed or implied, is intended to give to any person other than the District or the
Corporation and its assigns (including, for the avoidance of doubt, as provided in Section 10.7
hereof) any right, remedy or claim under or pursuant hereto, and any agreement or covenant required
herein to be performed by or on behalf of the District or the Corporation shall be for the sole and
exclusive benefit of the other party.
Section 10.3. Successor Is Deemed Included in all References to Predecessor. Whenever
either the District or the Corporation is named or referred to herein, such reference shall be deemed
to include the successor to the powers, duties and functions that are presently vested in the District or
the Corporation, and all agreements and covenants required hereby to be performed by or on behalf
of the District or the Corporation shall bind and inure to the benefit of the respective successors
thereof whether so expressed or not.
Section 10.4. Waiver of Personal Liability. No director, officer or employee of the District
shall be individually or personally liable for the payment of the Series 2022 Installment Payments,
but nothing contained herein shall relieve any director, officer or employee of the District from the
performance of any official duty provided by any applicable provisions of law or hereby.
Section 10.5. Article and Section Headings, Gender and References. The headings or titles
of the several articles and sections hereof and the table of contents appended hereto shall be solely
for convenience of reference and shall not affect the meaning, construction or effect hereof, and
words of any gender shall be deemed and construed to include all genders. All references herein to
"Articles," "Sections" and other subdivisions or clauses are to the corresponding articles, sections,
subdivisions or clauses hereof, and the words "hereby," "herein," "hereof," "hereto," "herewith" and
other words of similar import refer to the Installment Purchase Agreement as a whole and not to any
particular article, section, subdivision or clause hereof.
Section 10.6. Partial Invalidity. If any one or more of the agreements or covenants or
portions thereof required hereby to be performed by or on the part of the District or the Corporation
shall be contrary to law, then such agreement or agreements, such covenant or covenants or such
portions thereof shall be null and void and shall be deemed separable from the remaining agreements
and covenants or portions thereof and shall in no way affect the validity hereof. The District and the
Corporation hereby declare that they would have executed the Installment Purchase Agreement, and
each and every other article, section, paragraph, subdivision, sentence, clause and phrase hereof
irrespective of the fact that any one or more articles, sections, paragraphs, subdivisions, sentences,
clauses or phrases hereof or the application thereof to any person or circumstance may be held to be
unconstitutional, unenforceable or invalid.
Section 10.7. Assignment. This Installment Purchase Agreement and all right, title and
interest of the Corporation hereunder, including without limitation its right to receive the Series 2022
Installment Payments and its right to accelerate the Series 2022 Installment Payments pursuant to
Section 8.1 hereof, shall be assigned by the Corporation to the Trustee, pursuant to the Assignment
Agreement with the express consent of the District.
Section 10.8. Net Contract. The Installment Purchase Agreement shall be deemed and
construed to be a net contract, and the District shall pay absolutely net during the term hereof the
Installment Payments and all other payments required hereunder, free of any deductions and without
abatement, diminution or set-off whatsoever.
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Section 10.9. California Law. THE INSTALLMENT PURCHASE AGREEMENT
SHALL BE CONSTRUED AND GOVERNED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF CALIFORNIA.
Section 10.10. Notices. All written notices to be given hereunder shall be given by
electronic transmission or mail to the party entitled thereto at its address set forth below, or at such
other address as such party may provide to the other party in writing from time to time, namely:
If to the District: Truckee Donner Public Utility District
11570 Donner Pass Road
Truckee, California 96161
Attention: General Manager
If to the Corporation: Truckee Donner Public Utility District
Financing Corporation
11570 Donner Pass Road
Truckee, California 96161
Attention: Chair
If to the Trustee: The Bank of New York Mellon Trust Company, N.A.
333 South Hope Street, Suite 2525
Los Angeles, California 90071
Attention: Corporate Trust
Reference: Truckee Donner Public Utility District 2022A
Certificates
The Trustee shall not be liable for any losses, costs or expenses arising directly or indirectly
from the Trustee's reliance upon and compliance with such instructions, notwithstanding the fact that
such instructions conflict or are inconsistent with a subsequent written instruction. The party
providing electronic instructions agrees to assume all risks arising out of the use of such electronic
methods to submit instructions and directions to the Trustee, including without limitation the risk of
the Trustee acting on unauthorized instructions, and the risk of interception and misuse by third
parties.
Section 10.11. Effective Date. The Installment Purchase Agreement shall become effective
upon its execution and delivery, and shall terminate when the Purchase Price shall have been fully
paid (or provision for the payment thereof shall have been made to the written satisfaction of the
Corporation and the Trustee).
Section 10.12. Execution in Counterparts. The Installment Purchase Agreement may be
executed in several counterparts, each of which shall be deemed an original, and all of which shall
constitute but one and the same instrument. The exchange of copies of this Installment Purchase
Agreement and of signature pages by facsimile or PDF transmission, or by any electronic signature
complying with the U.S. federal ESIGN Act of 2000 (including without limitation Orbit, Adobe
Sign, DocuSign, or any other similar platform), shall constitute effective execution and delivery of
this Installment Purchase Agreement as to the parties hereto and may be used in lieu of the original
Agreement and signature pages for all purposes.
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Section 10.13. Indemnification of Corporation. The District hereby agrees to indemnify and
hold harmless the Corporation and its directors, officers and employees if and to the extent permitted
by law, from and against all claims, advances, damages and losses, including legal fees and expenses,
arising out of or in connection with the acceptance or the performance of its duties hereunder, under
the Trust Agreement and under the Assignment Agreement; provided that no indemnification will be
made for willful misconduct, negligence or breach of an obligation hereunder, under the Trust
Agreement or the Assignment Agreement by the Corporation.
Section 10.14. Amendments Permitted.
(a) This Installment Purchase Agreement and the rights and obligations of the
Corporation and the District and of the Owners of the 2022A Certificates and of the Trustee may be
modified or amended at any time by an amendment hereto which shall become binding when the
written consent of the Owners of a majority in aggregate principal amount of the 2022A Certificates
then Outstanding, exclusive of 2022A Certificates disqualified as provided in Section 11.4 of the
Trust Agreement, shall have been filed with the Trustee. Notwithstanding the foregoing, no such
modification or amendment shall: (1) extend the stated maturities of the 2022A Certificates, or
reduce the rate of interest represented thereby, or extend the time of payment of interest, or reduce
the amount of principal represented thereby, or reduce any premium payable on the prepayment
thereof, without the consent of the owner of each 2022A Certificate so affected; or (2) reduce the
aforesaid percentage of Owners of 2022A Certificates whose consent is required for the execution of
any amendment or modification of this Installment Purchase Agreement; or (3) modify any of the
rights or obligations of the Trustee or the Corporation without its written consent thereto.
(b) This Installment Purchase Agreement and the rights and obligations of the
Corporation and the District and of the Owners of the 2022A Certificates may also be modified or
amended without the consent of the Owners of any 2022A Certificates, but only to the extent
permitted by law and only for any one or more of the following purposes:
(1) to add to the covenants and agreements of the Corporation or the
District contained in this Installment Purchase Agreement other covenants and agreements thereafter
to be observed or to surrender any right or power herein reserved to or conferred upon the
Corporation or the District, and which shall not materially adversely affect the interests of the
Owners of the 2022A Certificates;
(2) to cure, correct or supplement any ambiguous or defective provision
contained in this Installment Purchase Agreement or in regard to questions arising under this
Installment Purchase Agreement, as the Corporation or the District may deem necessary or desirable
and which shall not materially adversely affect the interests of the Owners of the 2022A Certificates;
(3) to make such other amendments or modifications as may be in the
best interests of the Owners of the 2022A Certificates; and
(4) to make any amendments or supplements as are necessary or
appropriate to preserve or protect the exclusion of interest with respect to the 2022A Certificates
from gross income for federal income tax purposes under the Code or the exemption of interest with
respect to the 2022A Certificates from State personal income taxes.
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No amendment may modify any of the rights or obligations of the Trustee without the written
consent of the Trustee thereto.
(c) In executing or accepting any amendment pursuant to this Article IX, the
Trustee (as assignee of Corporation pursuant to the Assignment Agreement) shall be entitled to
receive, and shall be fully protected in relying upon (i) an opinion of counsel stating that the
execution of such amendment is authorized or permitted by this Agreement and all conditions
precedent under this Agreement applicable to such amendment have been satisfied, and (ii) in the
case of any amendment pursuant to Section 9.1(b)(1) or (2), also an opinion of counsel as to whether
the interests of any Owner of the Certificates would be materially and adversely affected. Any such
opinion may be supported as to factual and business matters by any relevant certificates and other
documents deemed necessary or advisable in the judgment of counsel delivering the opinion.
Section 10.15. Paired Obligation Provider Guidelines. For purposes of Sections 5.3 and
6.13, Paired Obligations shall comply with the following conditions:
(a) A Paired Obligation Provider shall initially have a long-term rating of A- or
better by S&P and A3 or better by [Moody's] [S&P 1.
(b) So long as the long-term rating of the Paired Obligation Provider is not
reduced below BBB by S&P or Baa2 by Moody's, [S&P?]the interest rate of such Paired Obligation
shall be deemed to be equal to the irrevocable fixed interest rate attributable thereto for purposes of
Sections 5.3 and 6.13.
In the event that a Paired Obligation Provider does not maintain one or more ratings as
described in subsection (b) and the District does not replace such Paired Obligation Provider with
another Paired Obligation Provider which maintains one or more ratings as described in subsection
(a) within ten (10) Business Days of notice that the Paired Obligation Provider has not maintained
one or more of the ratings as described in subsection (b), interest with respect to such Paired
Obligations shall be computed for purposes of Sections 5.3 and 6.13 without regard to payments to
be received from the Paired Obligation Provider.
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IN WITNESS WHEREOF, the parties hereto have executed and attested this Installment
Purchase Agreement by their officers thereunto duly authorized as of the day and year first written
above.
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
General Manager
Attest:
District Clerk
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
FINANCING CORPORATION
itz
Attest:
Secretary
Chair
S-1
4853-8168-9625/022925-0111
EXHIBIT A
DESCRIPTION OF 2022 PROJECT
The 2022 Project comprises the following described components.
[DISTRICT TO PROVIDE]
A-1
4853-8168-9625/022925-0111
EXHIBIT B
FORM OF REQUISITION NO. FOR
DISBURSEMENT FROM ACQUISITION FUND
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
ELECTRIC SYSTEM REVENUE CERTIFICATES OF PARTICIPATION, SERIES 2022A
The undersigned hereby states and certifies to the Chief Financial Officer of the Truckee
Donner Public Utility District:
(i) that s/he is the duly appointed, qualified and acting General Manager of the Truckee
Donner Public Utility District, a public utility district that is duly organized and existing under and
by virtue of the laws of the State of California (the "District"), and as such, is familiar with the facts
herein certified and is authorized to certify the same;
(ii) that, pursuant to Section 3.6 of that certain Installment Purchase Agreement, dated as
of July 1, 2022 (the "Installment Purchase Agreement"), by and between the Truckee Donner Public
Utility District Financing Corporation and the District, the undersigned hereby requests that the Chief
Financial Officer of the District disburse, on the date hereof, the following amounts from the
Acquisition Fund established under the Installment Purchase Agreement, to the payees designated on
the attached Exhibit A;
(iii) that each obligation mentioned herein has been incurred by the District and is a
proper charge against the Acquisition Fund;
(iv) that any approval required under the California Environmental Quality Act, as
amended (Division 13 of the California Public Resources Code), prior to the expenditure of such
amount for the purpose set forth on the attached Exhibit A has been received and is final;
(v) that there has not been filed with or served upon the District notice of any lien, right
to lien or attachment upon, or claim affecting the right to receive payment of, any of the moneys
payable to any of the payees named on the attached Exhibit A, which has not been released or will
not be released simultaneously with the payment of such obligation, other than materialmen's or
mechanics' liens accruing by mere operation of law.
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
General Manager
B-1
4853-8168-9625/022925-0111
EXHIBIT A
ACQUISITION FUND DISBURSEMENTS
Item Purpose of
Number Payee Name and Address Obligation Amount
B-2
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EXHIBIT C
PURCHASE PRICE
1. The principal amount of payments to be made by the District hereunder is $
2. The installment payments of principal and interest are payable in the amounts and on
the Series 2022 Installment Payment Dates as follows:
Series 2022 Amount
Installment Attributable to
Payment Date Principal
Second Business Day
Prior To:
November 15, 2022 $
May 15, 2023 -
November 15, 2023
May 15, 2024 -
November 15, 2024
May 15, 2025 -
November 15, 2025
May 15, 2026 -
November 15, 2026
May 15, 2027 -
November 15, 2027
May 15, 2028 -
November 15, 2028
May 15, 2029 -
November 15, 2029
May 15, 2030 -
November 15, 2030
May 15, 2031 -
November 15, 2031
May 15, 2032 -
November 15, 2032
May 15, 2033 -
November 15, 2033
May 15, 2034 -
November 15, 2034
May 15, 2035 -
November 15, 2035
May 15, 2036 -
November 15, 2036
May 15, 2037 -
November 15, 2037
May 15, 2038 -
C-1
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Amount
Attributable to
Interest Total
Series 2022 Amount
Installment Attributable to
Payment Date Principal
November 15, 2038
May 15, 2039 -
November 15, 2039
May 15, 2040 -
November 15, 2040
LONGER? 2052?
TOTAL $
C-2
4853-8168-9625/022925-0111
Amount
Attributable to
Interest
Total