HomeMy WebLinkAboutRES 2003-01 - Board TRUCKEE DONNER
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Public Utility District
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Resolution No. 2003- 01
RESOLUTION OF THE BOARD OF DIRECTORS OF THE TRUCKEE
DONNER PUBLIC UTILITY DISTRICT FINANCING CORPORATION
AUTHORIZING THE EXECUTION AND DELIVERY OF NOT TO EXCEED
$30,000,000 REVENUE CERTIFICATES OF PARTICIPATION,
APPROVING THE EXECUTION AND DELIVERY OF CERTAIN
DOCUMENTS AND AUTHORIZING CERTAIN ACTIONS IN
CONNECTION THEREWITH
WHEREAS, the Truckee-Donner Public Utility District Financing Corporation is a nonprofit public
benefit corporation organized and existing under the laws of the State of California (the "Corporation")
with the authority to assist in financings and refinancing on behalf of the Truckee Donner Public Utility
District (the "District"); and
WHEREAS, the District has determined that it would be in the best interests of the District and citizens
of the community to authorize the execution and delivery of Revenue Certificates of Participation in an
aggregate principal amount not to exceed $30,000,000 (the "Certificates"), to. refinance a certain
settlement obligation of the District; and
WHEREAS, the District and the Corporation desire to enter into that certain Installment Purchase
., Agreement, by and between the District and the Corporation (the "Installment Purchase Agreement"),
the form of which is on file with the Corporation, that certain Trust Agreement, by and among the
Trustee named therein, as trustee (the "Trustee"), the District and the Corporation (the "Trust
Agreement"), the form of which is on file with the Corporation and that certain Assignment Agreement,
by and between the Corporation and the Trustee (the "Assignment Agreement"), the form of which is
on file with the Corporation; and
WHEREAS, the Certificates will be sold to Bear, Stearns & Co. Inc. (the "Underwriter") all as provided
in a Purchase Contract, by and between the District and the Underwriter and acknowledged by the
Corporation (the "Purchase Contract"), the form of which is on file with the Corporation;
NOW, THEREFORE, the Board of Directors of the Corporation does hereby resolve as follows:
Section 1. Certificates. This Board of Directors hereby authorizes the preparation, sale and
delivery of the Certificates in an aggregate principal amount not to exceed $30,000,000 in accordance
with the terms and provisions of the Trust Agreement. The purposes for which the proceeds of the
sale of the Certificates shall be expended are to refinance a certain settlement obligation of the
District, to find a reserve find and to pay the costs of the sale and delivery of the Certificates.
Section 2. Certificate Documents. The Installment Purchase Agreement, the Assignment
Agreement, the Trust Agreement and the Purchase Contract presented at this meeting are approved.
The President or Vice-President and the Secretary are authorized and directed to execute and deliver
the Installment Purchase Agreement, the Assignment Agreement and the Trust Agreement and the
President is authorized and directed to acknowledge said Purchase Contract. Such agreements and
contract shall be executed or acknowledged, as the case may be, in substantially the forms hereby
T
approved, with such additions thereto and changes therein
such agreements and contract, such approval to be lu are a
delivery or acknowledgment ther approved by the officers executing
conclusively
eof. evidenced by the execution and
Section 3. Other Actions. The President, Vice-Presid
of the Corporation are authorized and directed, actin ent or Secretary and such other officers
singly,
and deliver any and all documents which such officers acting to do any and all things and to execute
consummate the sale and delivery of the Certificates, and deem necessary or advisable in order to
Agreement, Assignment Agreement and Trust A r the delivery of the Installment Purchase
Contract and otherwise effectuate the purposes of this
and acknowledgment of the Purchase
by such officers are hereby ratified and confirmed. is Resolution, and such actions previous) taken
Y n
Section 4. Effect. This Resolution shall take effect imm
ediately.
PASSED AND ADOPTED by the Board of Director
District on the 5ch day of March, 2003 by the following r at a meeting duly called and held within th roll call vote: e g
AYES: Directors Aguera, Hemig, Maass, Sutton and Van Gundy
NOES: None
ABSENT: None
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
F NCI G CO PORATION
Nelson Van Gundy, Presi nt
ATTEST:
qJse Aguera, cretary
I, the undersigned, hereby certify: That I am the duly
Donner Public Utility District Financing Corporation appointed and acting Secretary of the Truckee
Directors of said District was held on March 5, 2003 t and that a special meeting of the Board of
of Directors were duly and regularly adopted b said a minutes of the regular meeting of the Board
rescinded or amended since the date of their adoption and Board, and that said minutes have not been
that they are now in full force and effect:
Dated: C,,3 .� , 2003
os ph guera, Secre y
ckee Donner Publi Utility District
Financing Corporation
Stradling Yocca Carlson&Rauth
Draft of 02/18/03
i
INSTALLMENT PURCHASE AGREEMENT
by and between
TRUCKEE-DONNER PUBLIC UTILITY DISTRICT
and
TRUCKEE-DONNER PUBLIC UTILITY DISTRICT FINANCING CORPORATION
Dated as of March 1,2003
relating to
TRUCKEE-DONNER PUBLIC UTILITY DISTRICT
REVENUE CERTIFICATES OF PARTICIPATION,SERIES 2003A
AND TAXABLE SERIES 2003B
DOC SSF\35477v7\22925.0006
Accountant's Report
The term "Accountant's Report" means a report signed by an Independent Certified Public
Accountant.
Adjusted Revenues
The term "Adjusted Revenues" mean, for any Fiscal Year, the Revenues during such Fiscal
Year, less, for purposes of determining compliance with Section 6.13 and conditions for the
execution of Bonds or Contracts, any Payment Agreement Receipts taken into account in calculating
Debt Service pursuant to the definition thereof, plus, for the purposes of determining compliance
with Section 6.13 hereof only, the amounts which the District has authorized to be deposited in the
Revenue Fund from the Rate Stabilization Fund as of the one hundredth day following the end of
such Fiscal Year or twelve month period to pay Operation and Maintenance Costs and/or Debt
Service.
Adjusted Net Revenues
The term "Adjusted Net Revenues" means, for any Fiscal Year, the Adjusted Revenues for
such Fiscal Year less Operation and Maintenance Costs for such Fiscal Year.
Agreement
The term "Agreement" means this Agreement, by and between the District and the
Corporation, dated as of March 1, 2003, as originally executed and as it may from time to time be
amended or supplemented in accordance herewith.
Assumed RBI-based Rate
The term "Assumed RBI-based Rate" means, as of any date of calculation, an assumed
interest rate equal to ninety percent(90%)of the average RBI during the twelve(12)calendar months
immediately preceding the month in which the calculation is made.
Bonds
The term"Bonds" means all bonds, notes or similar obligations (but not including Contracts).
of the District, the principal of and interest on which are payable from Net Revenues on a parity with
the Installment Payments.
Business Day
The term"Business Day"means a day other than: a Saturday or Sunday or a day on which(i)
banks located in the city in which the principal corporate trust office of the Trustee is located are not
required or authorized to remain closed, and (ii) on which The New York Stock Exchange is not
closed.
Certificates
The term "Certificates" means the $ aggregate principal amount of Truckee-
Donner Public Utility District Revenue Certificates of Participation, Series 2003A and Taxable
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provided that, as to any such Bonds or Parity Installment Payments bearing or comprising interest at
other than a fixed rate,the rate of interest used to calculate Debt Service shall, for all purposes,be
assumed to bear interest at a fixed rate equal to the higher of
(i) the actual rate on the date of calculation, or if the Bonds or Parity Installment
Payments are not yet outstanding,the initial rate(if established and binding),
(ii) if the Bonds or Parity Installment Payments have been outstanding for at least
twelve months, the average rate over the twelve months immediately
preceding the date of calculation, and
(iii) (1)if interest on the Bonds or Parity Installment Payments is excludable from
gross income under the applicable provisions of the Code, the most recently
published Bond Buyer 25 Bond Revenue Index (or comparable index if no
longer published) plus fifty (50) basis points, or (2)if interest is not so
excludable, the interest rate on direct United States Treasury obligations with
comparable maturities plus fifty(50)basis points;
and provided further that if any series or issue of such Bonds or Parity Installment Payments have
twenty-five percent (25%) or more of the aggregate principal amount of such series or issue due in
any one year, 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 Parity Installment Payments were
being paid from the date of incurrence thereof in substantially equal annual amounts over a period of
thirty(30)years from the date of calculation;
and provided further that, as to any such Bonds or Parity Installment Payments or portions thereof
bearing no interest but which are sold at a discount and which discount accretes with respect to such
Bonds or Parity Installment Payments 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 in each
preceding year until such amount is exhausted;
and provided further that Debt Service shall be reduced by an amount equal to earnings on any
reserve fund (including the Reserve Fund) transferred to the corresponding debt service fund
(including the Interest Fund created under the Trust Agreement);
and provided further that the amount of interest deemed to be payable on or with respect to any
Contract or Bond with respect to which a Payment Agreement is in force shall, so long as the
Qualified Counterparty thereto is not in default thereunder, be based on the net economic effect on
the District expected to be produced by the terms of such Contract or Bond and such Payment
Agreement, including but not limited to the effects that(i) such Contract or Bond would, but for such
Payment Agreement, be treated as an obligation bearing interest at a Variable Interest Rate instead
shall be treated as an obligation bearing interest at a fixed interest rate, and(ii)such Contract or Bond
would, but for such Payment Agreement, be treated as an obligation bearing interest at a fixed
interest rate instead shall be treated as an obligation bearing interest at a Variable Interest Rate; and
accordingly, the amount of interest deemed to be payable on any Contract or Bond with respect to
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r interest rate equal to the rate that is one hundred and five percent(105%) of the fixed
interest rate specified by the Payment Agreement to be paid by the District, and
payments by the Qualified Counterparty to the District will be based on a rate equal
to the Assumed RBI-based Rate as the variable interest rate deemed to apply to the
Variable Interest Rate Parity Obligation.
(4) Certain Payment Agreements May be Disregarded. Notwithstanding the
provisions of subparagraphs (1), (2) and (3) of this definition, the District shall not be
required to (but may at its option) take into account (for the purpose of determining Debt
Service) the effects of any Payment Agreement that has a remaining term of ten(10)years or
less.
District
The term "District" means Truckee-Donner Public Utility District, a public utility district,
duly organized and existing under and by virtue of the laws of the State of California, including the
Law.
Electric General Fund
"Electric General Fund"means the fund by such name established by the District.
Electric System
The term "Electric System" means all properties and assets, real and personal, tangible and
intangible, of the District now or hereafter existing, used or pertaining to the acquisition, .
transmission, distribution and sale of electricity, including all additions, extensions, expansions,
improvements and betterments thereto; provided, however, that to the extent the District is not the
sole owner of an asset or property or to the extent that an asset or property is used in part for the
above described electricity purposes,only the District's ownership interest in such asset or property
or only the part of the asset or property so used for electricity purposes shall be considered to be part
of the Electric System.
Electricity Service
The term "Electricity Service" means the electricity distribution service made available or
provided by the Electric System.
Event of Default
The term"Event of Default"means an event described in Section 8.1.
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 such year, or any other twelve-month period selected and designated as
the official Fiscal Year of the District.
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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.
Moodv's
The term"Moody's"means Moody's Investors Service,or any successor thereto.
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 "Operation and Maintenance Costs" means (1) costs spent or incurred for
maintenance and operation of the Electric System calculated in accordance with generally accepted
accounting principles, including (among other things), Purchased Power Costs, fuel expenses, the
expenses of management and repair and other expenses necessary to maintain and preserve the
Electric System in good repair and working order, and including administrative costs of the District,
salaries and wages of employees, employee retirement expenses, overhead, insurance, taxes (if any),
fees of auditors, accountants, attorneys or engineers and insurance premiums, and (2) all other
reasonable and necessary costs of the District or charges (other than Debt Service) required to be
paid by it to comply with the terms of this Agreement or any other Contract or of any resolution or
indenture authorizing the issuance of any Bonds or of such Bonds, but excluding in all cases
(a)depreciation, replacement and obsolescence charges or reserves therefor, (b)amortization of
intangibles or other bookkeeping entries of a similar nature, (c)costs of capital additions,
replacements, betterments, extensions or improvements to the Electric System which under generally
accepted accounting principles are chargeable to a capital account or to a reserve for depreciation,
and(d)charges for the payment of Bonds or Contracts.
Parity Project
The term "Parity Project" means any additions, betterments, extensions or improvements
designated by the Board of Directors of the District as a Parity Project, the acquisition and
construction of which is to be paid for with the proceeds of any Contracts or Bonds.
Participating Underwriter
The term "Participating Underwriter" shall have the meaning ascribed thereto in the
Continuing Disclosure Agreement.
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Rate Stabilization Fund
The term"Rate Stabilization Fund" means the fund by such name established by the District
pursuant to Resolution No. 9533 of the District.
Rating A eg ncy
The term "Rating Agency" means S&P and Moody's, or any other nationally recognized
securities rating agency as agencies rating the Certificates at the Written Request of the District
delivered to the Trustee.
RBI
"RBI" means the Bond Buyer Revenue Bond Index or comparable index of long-term
municipal obligations chosen by the District, or, if no comparable index can be obtained, eighty
percent (80%) of the interest rate on actively traded thirty (30) year United States Treasury
obligations.
Reserve Requirement
The term "Reserve Requirement" means, initially $ and thereafter shall be equal
to the lesser of such amount and maximum annual Installment Payments in the current or any future
Fiscal Year.
Revenue Fund
The term "Revenue Fund" means all revenue accounts maintained by the District as of the
date of this Agreement which hold Revenues, including accounts numbered 131.10-10 and 136.10-10
of the District but not including accounts numbered 131.10-20 and 136.10-20 of the District,together
with any revenue account created after the date of this Agreement and designated by the Treasurer of
the District as a part of the Revenue Fund.
Revenues
The term "Revenues" means all income, rents, rates; fees, charges and other moneys derived
from the ownership or operation of the Electric System, including, without limiting the generality of
the foregoing,
(1) all income, rents, rates, fees, charges or other moneys derived from the sale,
distribution, furnishing and supplying of electricity or other services,
facilities, and commodities sold, furnished or supplied through the facilities
of the Electric System including standby charges and facility fees allocable to
the Electric System,plus
(2) except as set forth in(z)below,taxes or assessments, if any,the imposition of
which is permitted by law,
(3) the earnings on and income derived from the investment of the amounts
described in clauses (1) and (2) above, the Rate Stabilization Fund and the
general unrestricted funds of the District, and
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Variable Interest Rate Parity Obligations if the net economic effect of interest rates on particular
payments of the Contracts or Bonds and interest rates on other payments of the same Contracts or
Bonds, as set forth in such Contracts or Bonds, or the net economic effect of a Payment Agreement
with respect to particular Contracts or Bonds, in either case, is to produce obligations that bear
interest at a fixed interest rate,and(ii)Contracts or Bonds with respect to which a Payment
Agreement is in force shall be treated as Variable Interest Rate Parity Obligations if the net economic
effect of the Payment Agreement is to produce obligations that bear interest at a Variable Interest
Rate.
Written Consent of the Corporation or District,Written Order of the Corporation or District,Written
Request of the Corporation or District,Written Requisition of the Corporation or District
The terms "Written Consent of the Corporation or District," "Written Order of the
Corporation or District," "Written Request of the Corporation or District," and "Written Requisition
of the Corporation or District" mean, respectively, a written consent, order, request or requisition
signed by or on behalf of( ) the Corporation by its Authorized Representative or (ii)the District by
the President of its Board of Directors or its General Manager or by the Secretary of its Board of
Directors or by any two persons (whether or not officers of the Board of Directors of the District)
who are specifically authorized by resolution of the District to sign or execute such a document on its
behalf.
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 duly organized and existing under and
pursuant to the laws of the State of California.
(b) The District has full legal right, power and authority to enter into this
Agreement and carry out its obligations hereunder, to carry out and consummate all other
transactions contemplated by this 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 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 Property under the
terms of this Agreement being included in the gross income of the Certificate Owners or its assigns
for purposes of federal or State of California 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 finance the Settlement Obligation in the
manner provided for in this Agreement.
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ARTICLE IV
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 effective 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 A hereto.
(c) The interest to accrue on the unpaid balance of such principal amount is as
specified in Section 4.2 and Exhibit A 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. Installment Payments. The District shall, subject to any 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 Installment Payment Dates as set forth in Exhibit A hereto.
Each Installment Payment shall be paid to the Corporation in lawful money of the United
States of America. In the event 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
Installment Payments if paid in accordance with their terms.
The obligation of the District to make the 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 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 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 are hereby irrevocably pledged to the payment of the Installment Payments as
provided herein and the Revenues shall not be used for any other purpose while any of the
Installment Payments remain unpaid; provided that out of the Revenues 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 lien on Revenues and, subject to
application of Revenues and all amounts on deposit therein as permitted herein,the Revenue Fund.
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on file with the District, shall have produced a sum equal to at least one hundred twenty percent
(120%)of the Debt Service for such Fiscal Year; or
(b) The estimated Adjusted Net Revenues 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 Parity Project to be financed from proceeds of such Contracts or
Bonds, as evidenced by both a certificate of the General Manager of the District on file with the
District and a special report prepared by an Independent Certified Public Accountant or an
Independent Financial Consultant, including (after giving effect to the completion of all such
uncompleted Parity Projects) an allowance for estimated Net Revenues 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 Electricity Service and which are economically feasible and reasonably
considered necessary based on projected operations for such period, as evidenced by a certificate of
the General Manager on file with the District and a special report prepared by an Independent
Certified Public Accountant or an Independent Financial Consultant, shall produce a sum equal to at
least one hundred twenty percent(120%)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 Parity 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 Parity Projects.
(c) This Section 5.3 notwithstanding, 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.
(d) Nothing herein shall preclude the District from issuing any Bonds or
executing and delivering any Contracts the payments under which are subordinate to any Bonds or
Contracts of the District.
Section 5.4. Investments. All moneys held by the District in the Revenue Fund shall be
invested in Permitted Investments and the investment earnings thereon shall remain on deposit in
such fund, except as otherwise provided herein.
Section 5.5. Allocation to Revenue Fund Instantaneous. Revenues received by the District
shall be deemed instantaneously allocated to the Revenue Fund not withstanding any delay with
respect to the District's accounting therefor.
ARTICLE VI
COVENANTS OF THE DISTRICT
Section 6.1. Compliance with Installment Purchase Agreement and AncillM Agreements.
The District will punctually pay the Installment Payments in strict conformity with the terms hereof,
and will faithfully observe and perform all the agreements, conditions, covenants and terms
contained herein required to be observed and performed by it, and will not terminate this Agreement
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Section 6.5. Tax Covenants. Notwithstanding any other provision of this Agreement,
absent an opinion of Special Counsel that the exclusion from gross income of interest with respect to
the 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 and specifically covenants, 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 Certificates or of any other moneys or
property which would cause the Certificates to be "private activity bonds" within the meaning of
Section 141 of the Code.
(b) Arbitrage. The District and the Corporation will make no use of the proceeds
of the Certificates or of any other amounts or property, regardless of the source, or take or omit to
take any action which would cause the 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 Certificates or take or omit to take any action that would cause the 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.
(e) Miscellaneous. The District and the Corporation will take no action
inconsistent with the expectations stated in any Tax Certificate. executed with respect to the
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 and the Corporation from issuing
Certificates, 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 and will
operate the Electric System in an efficient and economical manner and will 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 on any funds in the hands of the District or the Trustee
pledged to pay the Installment Payments or to the Owners prior or superior to the lien of the
Installment Payments or which might impair the security of the Installment Payments,but the District
shall not be required to pay such claims if the validity thereof shall be contested in good faith.
Section 6.8. Compliance with Contracts. The District will neither take nor omit to take
any action under any contract if the effect of such act or failure to act would in any manner impair or
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All policies of insurance required to be maintained herein shall provide that the Corporation
and the Trustee shall be given thirty (30) days written notice of any intended cancellation thereof or
reduction of coverage provided thereby.
Section 6.10. Accounting, Records; Financial Statements and Other Retorts. 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.
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 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. The District shall fix, prescribe and collect
rates and charges for the Electricity Service which will be at least sufficient to yield during each
Fiscal Year Adjusted Net Revenues equal to one hundred twenty percent (120%) of Debt Service for
such Fiscal Year. 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 Adjusted Net Revenues from such reduced rates and charges will at
all times be sufficient to meet the requirements of this section.
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 to pay the rates and charges applicable to the
Electricity Service and providing for the billing thereof and for a due date and a delinquency date for
each bill.
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 may be applied as follows:
(a) If (1) the District files with the Corporation and 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 Corporation and 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
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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 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 other
agreements or covenants required herein by it or in 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;
(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 during the continuance of such Event of Default specified in
clauses (c) and (d) above, the Corporation shall, with the written consent of the Bond Insurer so long
as the Bond Insurance Policy is in full force and effect, and for any other such Event of Default the
Corporation may with the written consent of the Bond Insurer so long as the Bond Insurance Policy
is in full force and effect, and in each and every such case the Corporation, at the written direction of
the Bond Insurer so long as the Bond Insurance Policy is in full force and effect by notice in writing
to the District, shall declare the entire principal amount of the unpaid 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 subsection however, is subject to the condition that if at any time after the
entire principal amount of the unpaid 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 Corporation a sum
sufficient to pay the unpaid principal amount of the Installment Payments and/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 Installment Payments or such Contract or Bond if paid
in accordance with their terms, and the reasonable expenses of the Corporation, and any and all other
defaults known to the Corporation (other than in the payment of the entire principal amount of the
unpaid 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 and the
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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
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 or the Bond Insurer, the District, the Bond Insurer 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.
If any remedial 'action is discontinued or abandoned, the Trustee, the Bond Insurer and
Certificate Owners shall be restored to their former positions.
r
ARTICLE IX
DISCHARGE OF OBLIGATIONS
Section 9.1. Discharge of Obligations.
(a) When all or any portion of the 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 Installment Payments shall have been filed with the Trustee; and
(b) there shall have been deposited with the Trustee at or prior to the Installment
Payment Dates or date (or dates) 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
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 Installment Payments to their respective 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,
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 Installment
Payments as have been so provided for, thereupon cease, terminate, become void and be completely
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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 this 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 this 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 Agreement and any rights hereunder may be assigned by
the Corporation, as a whole or in part, without the necessity of obtaining the prior consent of the
District.
Section 10.8. Net Contract. This 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.
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 mail to
the parry 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, CA 96160
Attention: General Manager
If to the Corporation: Truckee-Donner Public Utility District Financing
Corporation
c/o Truckee-Donner Public Utility District
11570 Donner Pass Road
Truckee, CA 96160
Attention: President
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(b) to cure, correct or supplement any ambiguous or defective provision
contained in this Agreement or in regard to questions arising under this Agreement, as the
Corporation or the District may deem necessary or desirable and which shall not adversely affect the
interests of the Owners of the Certificates; and
(c) to make such other amendments or modifications as may be in the best
interests of the Owners of the Certificates.
No amendment without consent of the Owners may modify any of the rights or obligations of
the Trustee without its written consent thereto or the rights or obligations of the Bond Insurer without
its written consent thereto.
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EXHIBIT A
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 Installment Payment Dates as follows:
Installment Amount Attributable to Amount Attributable to
Payment Date Principal Interest
5th Day Prior To:
A-1
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�r
Table of Contents
Page
ARTICLE I
DEFINITIONS
Section1.1. Definitions........................................................................................................ I
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1. Representations by the District.......................................................................12
Section 2.2. Representations and Warranties by the Corporation......................................13
ARTICLE III
SALE AND PURCHASE OF THE PROPERTY
Section 3.1. Sale and Purchase of the Property.................................................................. 13
Section 3.2. Purchase and Sale of the Property.................................................................. 13
Section3.3. Title................................................................................................................ 13
ARTICLE IV
INSTALLMENT PAYMENTS
Section 4.1. Purchase Price. ...............................................................................................14
Section 4.2. Installment Payments ..................................................................................... 14
ARTICLE V
SECURITY
Section 5.1. Pledge of Revenues........................................................................................ 14
Section 5.2. Allocation of Revenues..................................................................................15
Section 5.3. Additional Contracts and Bonds..................................................................... 15
Section5.4. Investments..................................................................................................... 16
Section 5.5. Allocation to Revenue Fund Instantaneous.................................................... 16
ARTICLE VI
COVENANTS OF THE DISTRICT
Section 6.1. Compliance with Installment Purchase Agreement and Ancillary Agreements16
Section 6.2. Against Encumbrances •••••• 17
Section 6.3. Against Sale or Other Disposition of Property............................................... 17
DOCSSF\35477v7\22925.0006
i
Table of Contents
(continued)
Page
Section 10.5. Article and Section Headings,Gender and References..................................26
Section10.6. Partial Invalidity.....................................................................4.......................26
Section10.7. Assignment...................................................................:.................................26
Section10.8. Net Contract...................................................................................................26
Section10.9. California Law................................................................................................26
Section10.10. Notices............................................................................................................26 .
Section10.11. Effective Date.................................................................................................27
Section 10.12. Execution in Counterparts.........................:....................................................
27
Section 10.13. Indemnification of Corporation..................................................:...................27
Section 10.14. Amendments Permitted..................................................................................27
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Table of Contents
(continued) Page
P - -
PT
Section 6.4. Against Competitive Facilities.......................................................................17
Section6.5. Tax Covenants................................................................................................18
Section 6.6. Maintenance and Operation of the Electric System............
Section 6.7. Payment of Claims..........................................................................................18
Section 6.8. Compliance with Contracts............................................................................ 18
Section6.9. Insurance. ....................................................................................................... 19
Section 6.10. Accounting Records; Financial Statements and Other Reports .....................20
Section 6.11. Protection of Security and Rights of the Corporation....................................20
Section 6.12. Payment of Taxes and Compliance with Governmental Regulations............20
Section 6.13. Amount of Rates and Charges........................................................................20
Section 6.14. Collection.of Rates and Charges....................................................................20
Section 6.15. Eminent Domain Proceeds.............................................................................20
Section 6.16. Further Assurances.........................................................................................21
Section 6.17. Continuing Disclosure....................................................................................21
ARTICLE VII
PREPAYMENT OF INSTALLMENT PAYMENTS
Section7.1. Prepayment.....................................................................................................21
Section 7.2. Method of Prepayment...................................................................................21 ,
ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES OF THE CORPORATION
Section 8.1. Events of Default and Acceleration of Maturities..........................................22
Section 8.2. Application of Funds Upon Acceleration...............................
Section 8.3. Other Remedies of the Corporation................................ ...............................23
Section 8.4. Non-Waiver...................................................................
Section 8.5. Remedies Not Exclusive ................................................................................24
ARTICLE IX
DISCHARGE OF OBLIGATIONS
Section 9.1. Discharge of Obligations.............................................
ARTICLE X
MISCELLANEOUS
Section 10.1. Liability of District Limited to Revenues.......................................................25
Section 10.2. Benefits of Installment Purchase Agreement Limited to Parties....................25
Section 10.3. Successor Is Deemed Included in all References to Predecessor...................25
Section 10.4. Waiver of Personal Liability..........................................................................25
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EXHIBIT B
DESCRIPTION OF THE PROPERTY
The Property consists of the components of the Electric System described below:
Component Approximate Value
Overhead constructed facilities including but not limited to transmission $25131%700
lines,utility poles and transformers
Underground constructed facilities including but not limited to 18,886,300
transmission lines
Donner Lake Substation 1,500,000
Tahoe Donner Substation 2,000,000
Truckee Substation 2,0009000
Martis Valley Substation 29000,000
SCADA System 500,000
TOTAL $52,206,000
DOCSSF135477v7122925.0006
IN WITNESS WHEREOF, the parties hereto have executed and attested this Agreement by
their officers thereunto duly authorized as of the day and year first written above.
TRUCKEE-DONNER PUBLIC UTILITY DISTRICT
President
Clerk
TRUCKEE-DONNER PUBLIC UTILITY DISTRICT
FINANCING CORPORATION
President
Secretary
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DOCSSF135477v7122925.0006
If to the Bond Insurer:
Section 10.11. Effective Date. This 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).
Section 10.12. Execution in Counterparts. This 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.
Section 10.13. Indemnification of Corporation. The District hereby agrees to indemnify and
hold harmless the Corporation 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 and under the Trust Agreement; provided
that no indemnification will be made for willful misconduct, negligence or breach of an obligation
hereunder or under the Trust Agreement by the Corporation.
Section 10.14. Amendments Permitted. This Agreement and the rights and obligations of
the Corporation, the District, the Owners of the Certificates and of the Trustee may be modified or
amended at any time by an amendment hereto which shall become binding when the written consents
of the Owners of a majority in'aggregate principal amount of the Certificates then Outstanding,
exclusive of Certificates disqualified as provided in the Trust Agreement, shall have been filed with
the Trustee and, so long as the Bond Insurance Policy is in full force and effect,with the prior written
consent of the Bond Insurer. No such modification or amendment shall (1) extend the stated
maturities of the Certificates, or reduce the rate of interest represented thereby,or-change the method
of computing the rate of interest with respect thereto, 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 Certificate so affected, or (2) reduce
the aforesaid percentage of Owners of Certificates whose consent is required for the execution of any
amendment or modification of this Agreement without the consent of the Owners of all Certificates
then Outstanding, or(3)modify any of the rights or obligations of the Trustee,the Corporation or the
Bond Insurer without its respective written consent thereto.
This Agreement and the rights and obligations of the Corporation, the District and of the
Owners of the Certificates may also be modified or amended at any time by an amendment hereto
which shall become binding upon adoption, without the consent of the Owners of any Certificates,
but only to the extent permitted by law and only for any one or more of the following purposes-
(a) to add to the covenants and agreements of the Corporation or the District
contained in this 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 adversely affect the interests of the Owners of the Certificates;
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DOCSSF135477v7\22925.0006
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 Installment Payments).
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 and
shall execute and deliver to the District all such instruments as may 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 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
Installment Payments, which moneys and Permitted Investments shall continue to be held by the
Trustee in trust for the payment of the Installment Payments and shall be applied by the Trustee to
the payment of the Installment Payments of the District.
ARTICLE X
MISCELLANEOUS
Section 10.1. Liability of District Limited to Revenues. Notwithstanding anything
contained herein; the District shall not be required to advance any moneys derived from any source
of income other than the Revenues and the Revenue Fund for the payment of amounts due hereunder
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 Installment Payments is a special obligation of the
District payable solely from the Net Revenues, and does not constitute a debt of the District or,of the
State of California or of any political subdivision thereof in contravention of any constitutional or
statutory debt limitation or restriction.
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, the
Bond Insurer or the Corporation 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 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.
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Bond Insurer or provision deemed by the Corporation and the Bond Insurer to be adequate shall have
been made therefor, then and in every such case the Corporation and the Bond Insurer, 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.
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 shall be applied in the
following order-
First, to the payment, without preference or priority, and in the event of any insufficiency of
such Revenues ratably without any discrimination or preference, of the fees, costs and
expenses of the Corporation and Trustee, if any, including reasonable compensation to its
accountants and counsel;
Second,to the payment of the Operation and Maintenance Costs; and
Third, to the payment of the entire principal amount of the unpaid 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 Installment
Payments and such Bonds and Contracts if paid in accordance with their respective terms.
Section 8.3. Other Remedies of the Corporation. The Corporation shall have the right
with the written consent of the Bond Insurer so long as the Bond Insurance Policy is in full force and
effect and shall at the direction of the Bond Insurer so long as the Bond Insurance Policy is in full
force and effect:
(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 Property, the Electric System or other assets of the District, and no default
hereunder shall result in the loss of the Property,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
Installment Payments to the Corporation at the respective due dates or upon prepayment from the Net
Revenues, the Revenue 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. x
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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 Revenue Fund.
(b) If the foregoing conditions are not met, then such Net Proceeds may be
applied by the District in part to the prepayment of 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 Installment
Payments then bears to the aggregate unpaid principal amount of such Bonds and Contracts.
Section 6.16. 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.
Section 6.17. Continuing Disclosure. The District hereby covenants and agrees that it will
comply with and carry out all of the provisions of the Continuing Disclosure Agreement.
Notwithstanding any other provision of this Agreement, failure of the District to comply with the
Continuing Disclosure Agreement shall not be considered an Event of Default;however, any Owner
of Certificates or Beneficial Owner may take such actions as may be necessary and appropriate,.
including seeking mandate or specific performance by court order, to cause the District to comply
with its obligations under this Section. For purposes of this Section, "Beneficial Owner"means any
person which(a)has the power, directly or indirectly,to vote or consent with respect to,or to dispose
of ownership of, any Certificates (including persons holding Certificates through nominees,
depositories or other intermediaries), or (b) is treated as the owner of any Certificates for federal `
income tax purposes."
ARTICLE VII
PREPAYMENT OF INSTALLMENT PAYMENTS
Section 7.1. Prepayment. The District may or shall, as the case may be, prepay from the
Net Proceeds as provided herein on any date, all or any part on any Installment Payment Date, of the
principal amount of the unpaid Installment Payments at a prepayment price equal to the sum of the
principal amount prepaid plus accrued interest thereon to the date of prepayment.
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).
Section 7.2. Method of Prepayment. Before making any prepayment pursuant to
Section 7.1, the District may, within five (5) days following the event permitting the exercise of such
right to prepay or creating such obligation to prepay, give written notice to the Corporation and the
Trustee describing such event and specifying the date on which the prepayment of the Certificates
will be paid, which date shall be not less than sixty (60) days from the date such notice is given,
unless such prepayment must occur on an Interest Payment Date, in which case such date shall be the
next Interest Payment Date with respect to which notice of prepayment may be timely given pursuant
to the Trust Agreement.
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adversely affect the ability of the District to pay Installment Payments; and 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 other contracts affecting or involving the Electric
System,to the extent that the District is a parry thereto.
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 facilities similar to the Electric System so long as such insurance is.available from
reputable insurance companies and such coverage is available 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 be applied in part to the --
prepayment of 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 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
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 may be applied to the prepayment of 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 and the interests of the Corporation, which insurance
shall afford protection in such amounts and against such risks as are usually covered in connection
with municipal 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 Insurance Consultant,actuarially sound.
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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 Electric System,
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, lock outs, lack of transportation facilities, fire, explosion, or acts or
regulations of govenunental authorities.
It is expressly understood and agreed by and.among the parties to this Agreement that,
subject to Section 10.6 hereof, each of the agreements, conditions, covenants and terms contained in
this Agreement is an essential and material term of the purchase of and payment for the Property and
by the District pursuant to, and in accordance with, and as authorized under the Law.
The District will faithfully observe and perform all 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 or the moneys in the Revenue Fund except as permitted hereby. The District
may at any time, or from time to time, issue Contracts and Bonds as permitted herein,or may issue or
incur evidences of indebtedness or incur other obligations, 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 Property. The District will not enter into
any agreement or lease which impairs the operation of the Electric System or any part thereof
necessary to secure adequate Net Revenues for the payment of the Installment Payments, or which
would otherwise impair the rights of the Corporation hereunder or the operation of the Electric
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
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 Facilities . To the extent permitted by existing law,the
District covenants that it will not acquire, construct, maintain or operate and will not permit any other
public or private agency, corporation, district or political subdivision or any person whomsoever to
acquire, construct, maintain or operate within the boundaries of the District any electric system
competitive with the Electric System.
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DOCSSF\35477v7122925.0006
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 by the
District in trust hereunder and shall be deposited when and as received in a special fund designated as
the "Revenue Fund," which fund includes the accounts described in the definition thereof and which
fund the District agrees and covenants to maintain and to hold separate and apart from other funds so
long as any Contracts or Bonds remain unpaid. Moneys in the Revenue Fund shall be used and
applied by the District as provided in this 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
thereafter shall be set aside by the District at the following times for the transfer to 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 set forth in this
Section.
(a) Installment Payments. Not later than each Installment Payment Date, the
District shall, from the moneys in the Revenue Fund, transfer to the Trustee the Installment Payment
due and payable on that Installment Payment Date. Not later than each Parity Installment Payment
Date, the District shall, from moneys in the Revenue Fund, transfer to the applicable trustee the
Parity Installment Payment due and payable on that Parity Installment Payment Date. The District
shall also, from the moneys in the Revenue Fund, transfer to the applicable trustee for deposit in the
respective 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 any Bond or Contract.
(b) Reserve Funds. On or before each 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 Trustee for deposit in the Reserve Fund and to the applicable trustee for such other
reserve funds and/or accounts, if any, as may have been established in connection with Bonds or
Contracts other than this Agreement, that sum, if any, necessary to restore the Reserve Fund to an
amount equal to the Reserve Requirement; provided, however, that the District may provide for the
Reserve Fund by means other than cash and Permitted Investments pursuant to Section 5.4 of the
Trust Agreement.
(c) Surplus. Moneys on deposit in the Revenue Fund on each Installment
Payment Date not necessary to make any of the payments required above may be expended by the
District at any time for any purpose permitted by law.
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 Adjusted Net Revenues 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 Financial Consultant on such calculation
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DOCSSF135477v7\22925.0006
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 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 Agreement and to carry out and consummate all transactions contemplated by this
Agreement and by proper action has duly authorized the execution and delivery and due performance
of this Agreement.
(b) The execution and delivery of this 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 Property under the terms of this Agreement being
included in the gross income of the Certificate Owners or its assigns for purposes of federal or State
of California income taxation.
ARTICLE III
SALE AND PURCHASE OF THE PROPERTY
Section 3.1. Sale and Purchase of the Property. In consideration for the Corporation's
assistance in financing the Settlement Obligation,the District agrees to sell, and hereby sells, to the
Corporation, and the Corporation agrees to purchase and hereby purchases, from the District, the
Property at the purchase price specified in Section 4.1 hereof and otherwise in the manner and in
accordance with the provisions of this Agreement.
Section 3.2. Purchase and Sale of the Property. In consideration for the 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 Property at the
purchase pricespecified in Section 4.1 hereof and otherwise in the manner and in accordance with
the provisions of this Agreement.
Section 3.3. Title. All right, title and interest in each component of the Property shall be
vested in the District upon execution and delivery of this Agreement.
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DOCSSF135477v7122925.0006
(4) Payment Agreement Receipts,
but excluding in all cases
(x) connection fees;
(y) customers' deposits or any other deposits subject to refund until such
deposits have become the property of the District,and
(z) reserves, taxes or assessments specifically pledged to the payment of
debt service with respect to notes, bonds or other obligations of the
District and which reserves, taxes or assessment are not available for
any other purpose of the District.
S&P
The term"S&P"means Standard&Poor's Ratings Group,or any successor thereto.
Settlement Obli ag. tion
The term"Settlement Obligation" shall have the meaning given to such term in the recitals to
the Installment Purchase Agreement.
Trust Agreement
The term "Trust Agreement" means the Trust Agreement, dated as of March 1, 2003,by and
between the District, the Corporation and the Trustee, relating to the Certificates, 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 BNY Western Trust Company, acting in its capacity as Trustee
under and pursuant to the Trust Agreement,and its successors and assigns.
Variable Interest Rate
"Variable Interest Rate" means any variable interest rate or rates to be paid under any
Contract or Bond, the method of computing which variable interest rate shall be as specified in the
applicable Contract or Bond, which Contract or Bond shall also specify either(i)the payment period
or periods or time or manner of determining such period or periods or time for which each value of
such variable interest rate shall remain in effect, and (ii) the time or times based upon which any
change in such variable interest rate shall become effective, and which variable interest rate may,
without limitation, be based on the interest rate on certain bonds or may be based on interest rate,
currency, commodity or other indices.
Variable Interest Rate Parity Obligations
"Variable Interest Rate Parity Obligations"mean,for any period of time, all in accordance
with the definition of Debt Service" set forth in this Section 1.1, any Contract or Bond that bear a
Variable Interest Rate during such period,except that(i)Contracts or Bonds shall not be treated as
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DOCSSF\35477v7\22925.0006
Payment Agreement
"Payment Agreement" means a written agreement for the purpose of managing or reducing
the District's exposure to fluctuations in interest rates or for any other interest rate, investment, cash
flow, asset or liability managing purposes, entered into either on a current or forward basis by the
District and a Qualified Counterparty in connection with, or incidental to,the issuance or incurrence
of any Contract or Bond, that provides for an exchange of payments based on interest rates, ceilings
or floors on such payments, options on such payments, or any combination thereof or any similar
device.
Payment Agreement Payments
"Payment Agreement Payments" mean the amounts required to be paid periodically by the
District to the Qualified Counterparty pursuant to a Payment Agreement.
Payment Agreement Receipts
"Payment Agreement Receipts" mean the amounts required to be paid periodically by the
Qualified Counterparty to the District pursuant to a Payment Agreement.
PMelly
The term"Property"means the property described in Exhibit B hereto.
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.
Purchased Power Costs
The term "Purchased Power Costs" means (1) costs associated with any power purchase
contract for capacity and/or energy with respect to the Electric System, excluding any termination
payments due pursuant to any such contract; (2) all costs associated with the transmission of energy
to the Electric System; (3) all costs to schedule energy with respect to the Electric System; and (4)
net payments due under any hedging contract executed by the District to reduce energy or fuel price
risk, excluding any termination payments due pursuant to any such hedging contract.
Qualified Counterparts
"Qualified Counterparty" means a party (other than the District) who is the other party to a
Payment Agreement and(1) (a)whose senior debt obligations are rated in one of the three(3)highest
rating categories of each of the Rating Agencies then rating the Certificates (without regard to any
gradations within a rating category), or (b) whose obligations under the Payment Agreement are
guaranteed for the entire term of the Payment Agreement by a bond insurer or other institution which
has been or whose debt service obligations have been assigned a credit rating in one of the three
highest rating categories of each of the Rating Agencies then rating the Certificates (without regard
to any gradations within a rating category), and (2) who is otherwise qualified to act as the other
party to a Payment Agreement with the District under any applicable laws.
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DOCSSF\35477v7\22925.0006
r
Independent Certified Public Accountant
The term "Independent Certified Public Accountant" means any firm of certified public
accountants appointed by the District, each of whom is independent of the District and the
Corporation pursuant to the Statement on Auditing Standards No. 1 of the American Institute of
Certified Public Accountants.
Independent Financial Consultant
The term "Independent Financial Consultant" means a financial consultant or firm of such
consultants appointed by the District, 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; and (3) is not connected with the District as an officer or employee thereof,but who may be
regularly retained to make reports thereto.
Installment Payment Date;Parity Installment Payment Date
The term "Installment Payment Date" means the fifth day prior to each Interest Payment
Date, or if said date is not a Business Day, then the preceding Business Day. The term "Parity
Installment Payment Date" means each date on which Parity Installment Payments are scheduled to
be paid by the District under and pursuant to any Contract.
Installment Payments; Parity Installment Payments
The term "Installment Payments" means the Installment Payments scheduled to be paid by
the District under and pursuant hereto. The term "Parity Installment Payments"means the payments
scheduled to be paid by the District under and pursuant to the Contracts.
Insurance Consultant.
The term "Insurance Consultant" means any insurance consultant or firm of insurance
consultants generally recognized to be well qualified in insurance consulting matters relating to
electric utility and other municipal systems, appointed and paid by the District, and who or each of
whom (1) is in fact independent and not under the domination of the District; (2) does not have a
substantial financial interest, direct or indirect, in the operations of the District; (3) and is not
connected with the District as a board member, officer, or employee of the District, but may be
regularly retained to make reports to the District.
Interest Payment Date
The term "Interest Payment Date" means January 1 and July 1 of each year, commencing
July 1,2003.
Law
The term "Law" means the Public Utility District Act of the State of California (being
Division 7 of the Public Utilities Code of the State of California, as amended) and all laws
amendatory thereof or supplemental thereto.
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DOCSSF135477v7\22925.0006
which a Payment Agreement is in force shall, so long as the Qualified Counterparty thereto is not in
default thereunder, be an amount equal to the amount of interest that would be payable at the rate or
rates stated in such Contract or Bond plus the Payment Agreement Payments minus the Payment
Agreement Receipts, and for the purpose of calculating Payment Agreement Receipts and Payment
Agreement Payments under such Payment Agreement,the following assumptions shall be made:
(1) Countea2artv Obligated to Pay Actual Variable Interest Rate on Variable
Interest Rate Parity Obligations. If the Payment Agreement obligates a Qualified
Counterparty to make payments to the District on the actual Variable Interest Rate on a
Contract or Bond that would, but for the Payment Agreement, be treated as a Variable
Interest Rate Parity Obligation and obligates the District to make payments to the Qualified
Counterparty based on a fixed rate, payment by the District to the Qualified Counterparty
shall be assumed to be made at the fixed rate specified by the Payment Agreement and
payments by the Qualified Counterparty to the District shall be assumed to be made at the
actual Variable Interest Rate on such Contract or Bond, without regard to the occurrence of
any event that, under the provisions of the Payment Agreement, would permit the Qualified
Counterparty to make payments on any basis other than the actual Variable Interest Rate on
such Contract or Bond, and such Contract or Bond shall set forth a debt service schedule
based on that assumption;
(2) Variable Interest Rate Parity Obligations and Payment Agreements Having
the Same Variable Interest Rate Component. If both a Payment Agreement and the related
Contract or Bond that would, but for the Payment Agreement, be treated as a Variable
Interest Rate Parity Obligation include a variable interest rate payment component that is
required to be calculated on the same basis (including, without limitation, on the basis of the
same variable interest rate index), it shall be assumed that the variable interest rate payment
component payable pursuant to the Payment Agreement is equal in amount to the variable
interest rate component payable on such Contract or Bond;
(3) Variable Interest Rate Partly Obligations and Payment Agreements Haves
the Different Variable Interest Rate Component. If a Payment Agreement obligates either the
District or the Qualified Counterparty to make payments of a variable interest rate payment
component on a basis different(including, without limitation, on a different variable interest
rate index), from the basis that is required to be used to calculate interest on the Contract or
Bond that would, but for the Payment Agreement, be treated as a Variable Interest Rate
Parity Obligation it shall be assumed:
(a) District Obligated to Make Payments Based on Variable Interest Rate
Index. If payments by the District under the Payment Agreement are based on a
variable interest rate index and payments by the Qualified Counterparty are based on
a fixed interest rate, payments by the District to the Qualified Counterparty will be
based upon an interest rate equal to the Assumed RBI-based Rate, and payments by
the Qualified Counterparty to the District will be based on the fixed rate specified by
the Payment Agreement; and
(b) District Obligated to Make Payments Based on Fixed Interest Rate. If
payments by the District under the Payment Agreement are based on a fixed interest
rate and payments by the Qualified Counterparty are based on a variable interest rate
index, payments by the District to the Qualified Counterparty will be based on an
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DOCSSF\35477v7\22925.0006
Series 2003B, executed and delivered on behalf of the District and at any time Outstanding pursuant
to the Trust Agreement.
Continuing Disclosure Agreement
The term "Continuing Disclosure Agreement" shall mean that certain Continuing Disclosure
Agreement between the District and the dissemination agent named therein dated the date of
execution and delivery of the Certificates, as originally executed and as it may be amended from time
to time in accordance with the terms thereof.
Con_
The term "Contracts" means this Installment Purchase Agreement and all contracts of the
District the Parity Installment Payments under which are payable from Net Revenues on a parity with
the obligations of the District to make payments under this Agreement excluding contracts entered
into for operation and maintenance of the Electric System.
Corporation
The term "Corporation" means the Truckee-Donner Public Utility District Financing
Corporation, a nonprofit public benefit corporation duly organized and existing under and by virtue
of the laws of the State of California.
Date of Operation
The term "Date of Operation" means, with respect to any uncompleted component Parity
Project, the estimated date by which such uncompleted component Parity Project will have been
completed and, in the opinion of an engineer, will be ready for operation by or on behalf of the
District.
Debt Service
The term"Debt Service"means, for any Fiscal Year,the sum of:
(1) the interest on all outstanding Bonds, payable during such Fiscal Year (except to the
extent that such interest is capitalized);
(2) that portion of the principal amounts of all outstanding serial Bonds maturing in such
Fiscal Year;
(3) that portion of the principal amounts of all outstanding term Bonds required to be
prepaid or paid in such Fiscal Year; and
(4) that portion of the Parity Installment Payments required to be made during such
Fiscal Year (except to the extent the interest evidenced and represented thereby is
capitalized);
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DOCSSF135477v7\22925.0006
•
INSTALLMENT PURCHASE AGREEMENT
This INST
ALLMENT PURCHASE AGREEMENT, made and entered into as of March 1,
2003 by and between TRUCKEE-DONNER PUBLIC UTILITY DISTRICT, a public utility district
duly organized and existing under and by virtue of the laws of the State of Californian the"D , a
and TRUCKEE-DONNER PUBLIC UTILITY DISTRICT FINANCING CORPORATION
public benefit corporation duly organized and existing under and by virtue of the laws of
nonprofit P
the State of California(the"Corporation").
WITNESSETH.
WHEREAS, the District proposes to refinance a certain settlement obligation of the District
owing to Idacorp Energy L.P. in the amount of$26 million(the Settlement Obligation!');
WHEREAS, the Corporation has agreed to assist the District in refinancing the Settlement
Obligation;
WHEREA
S the District is authorized by Division 7 of the Public Utilities Code of the State
,
of California,including but not limited to Section 16431 to dispose of and acquire property;
WHEREAS, the District and the Corporation propose to provide for the refinancing of the
Settlement Obligation by entering into this Installment Purchase Agreement and authorizing in
directing the execution and delivery of certificates of participation evidencing fractional interests
the installment payments to be made by the District to the Corporation hereunder,
WHEREAS, the District and the Corporation have duly authorized the execution of this
Agreement;
WHEREAS, all acts, conditions and things required by law to exist,to have happened and to
s
have been performed precedent to and in connection with the execution and delivery o
g
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;
NOW THEREFORE, IN CONSIDERATION OF THESE PREMISES AND OF THE
MUTUAL AGREEMENTS AND COVENANTS CONTAINED HEREIN AND FOR OTHER
VALUABLE CONSIDERATION, THE PARTIES HERETO DO HEREBY AGREE AS
FOLLOWS:
ARTICLE I
DEFINITIONS
ons. Unless the context otherwise requires, the terms defined in this
Sec
tion 1.1. Definiti
endment hereof or supplement hereto an
section shall for all purposes hereof and of any amrel of the
P
re ort or other document mentioned herein or therein have the meanings defined h ,
following definitions to be equally applicable to both the singular and plural forms of any o e
terms defined herein. Unless the context otherwise requires, all capitalized terms used herein and not
defined herein shall have the meanings ascribed thereto in the Trust Agreement.
DOCSSF\35477v7\22925.0006
Stradling Yocca Carlson& Rauth
Draft of 02/18/03
ASSIGNMENT AGREEMENT
by and between
TRUCKEE-DONNER PUBLIC UTILITY DISTRICT FINANCING CORPORATION
and
BNY WESTERN TRUST COMPANY
,x
as Trustee
Dated as of March 1,2003
relating to
TRUCKEE-DONNER PUBLIC UTILITY DISTRICT
REVENUE CERTIFICATES OF PARTICIPATION, SERIES 2003A
AND TAXABLE SERIES 2003B
DOCSSF\36115v2\22925.0006
sj
ASSIGNMENT AGREEMENT
This Assignment Agreement is made and entered into as of March 1, 2003 by and between
the Truckee-Donner Public Utility District Financing Corporation, a nonprofit public benefit
corporation duly organized and existing under the laws of the State of California(the"Corporation")
and BNY Western Trust Company,a national banking association duly organized and existing under
the laws of the United States of America as trustee (the"Trustee");
NOW, THEREFORE, IN CONSIDERATION OF THE MUTUAL AGREEMENTS AND
COVENANTS CONTAINED HEREIN AND FOR OTHER VALUABLE CONSIDERATION, THE
PARTIES HERETO DO HEREBY AGREE AS FOLLOWS:
Section 1. Assignment
The Corporation, for good and valuable consideration in hand received, does hereby sell,
assign and transfer to the Trustee without recourse, for the benefit of the owners of the Revenue
Certificates of Participation, Series 2003A and Series 2003B (the"Certificates"),to be executed and
delivered by the Trustee pursuant to the Trust Agreement, dated as of March 1, 2003 (the"Trust
Agreement"),by and among the Truckee-Donner Public Utility District(the "District"),the
Corporation and the Trustee, all of its rights,title, and interest in the Installment Purchase
Agreement, dated as of March 1, 2003 (the"Installment Purchase Agreement"),by and between the
District and the Corporation including the right to receive all Installment Payments from the District
under the Installment Purchase Agreement(but not including the right to be indemnified and the right
to receive notices pursuant to the Installment Purchase Agreement),together with any and all of the
other rights of the Corporation under the Installment Purchase Agreement as may be necessary to
enforce payment of such Installment Payments when due or otherwise to protect the interests of the
owners of the Certificates. The assignment herein is absolute and presently effective.
Section 2. Acceptance.
The Trustee hereby accepts the foregoing assignment for the purpose of securing the right
assigned to it to receive all such installment payments from the District under the Installment
Purchase Agreement and the other rights assigned to it, subject to the terms and provisions of the
Trust Agreement, and all such installment payments shall be applied and the rights so assigned shall
be exercised by the Trustee as provided in the Trust Agreement.
Section 3. Conditions.
This Assignment Agreement shall confer no rights or impose no obligations upon the Trustee
beyond those expressly provided in the Trust Agreement. This Assignment Agreement shall
constitute a complete assignment by the Corporation of all of its rights under and pursuant to the
Installment Purchase Agreement, except as otherwise provided herein.
DOCSSF\36115 v2\22925.0006
IN WITNESS WHEREOF,the parties hereto have executed this Assignment Agreement by
their officers thereunto duly authorized as of the day and year first written above.
TRUCKEE-DONNER PUBLIC UTILITY DISTRICT
FINANCING CORPORATION
By:
Its: President
BNY WESTERN TRUST COMPANY,
as Trustee
By:
Its: Authorized Officer
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DOCSSF\36115v2\22925.0006
Stradling Yocca Carlson & Rauth
JF"� 11
Draft of 02/18/03
TRUST AGREEMENT
by and among
BNY WESTERN TRUST COMPANY,
as Trustee
and
TRUCKEE-DONNER PUBLIC UTILITY DISTRICT FINANCING CORPORATION,
as Corporation
and
TRUCKEE-DONNER PUBLIC UTILITY DISTRICT,
as District
Dated as of March 1,2003
Relating to
TRUCKEE-DONNER PUBLIC UTILITY DISTRICT
REVENUE CERTIFICATES OF PARTICIPATION, SERIES 2003A
AND TAXABLE SERIES 2003B
DOCSSF\35478v4\22925.0006
Delivery Cost Fund. The term "Delivery Cost Fund" means the fund by that name
established in Section 3.4 hereof.
Delivery Costs. The term "Delivery Costs" means all items of expense directly or indirectly
payable by or reimbursable to the District and related to the authorization, execution, sale and
delivery of the Certificates, including but not limited to costs of preparation and reproduction of
documents, printing expenses, filing and recording fees, initial fees and charges of the Trustee and
counsel to the Trustee, legal fees and charges, fees and disbursements of consultants and
professionals, rating agency fees, title insurance premiums, letter of credit fees and bond insurance
premiums (if any), fees and charges for preparation, execution and safekeeping of the Certificates
and any other cost, charge or fee in connection with the original execution and delivery of the
Certificates.
Depository or DTC. The term "Depository" or "DTC" means The Depository Trust
Company, New York, New York, a limited purpose trust company organized under the laws of the
State of New York in its capacity as securities depository for the Certificates.
Information Services. The term "Information Services" means national information services
that disseminate securities redemption notices; or, in accordance with then-current guidelines of the
Securities and Exchange Commission, such other services providing information with respect to
called bonds as the District may specify in a Written Request to the District and the Trustee as the
Trustee may select.
Installment Payments. The term "Installment Payments" means the installment payments
payable by the District pursuant to the Installment Purchase Agreement and in the amounts and at the
times set forth in the Installment Purchase Agreement.
Installment Payment Date. The term "Installment Payment Date" means each date on which
Installment Payments are scheduled to be paid by the District pursuant to the Installment Purchase
Agreement.
Installment Purchase Agreement. The term "Installment Purchase Agreement" means the
Installment Purchase Agreement, dated as of March 1, 2003, by and between the District and the
Corporation, as originally executed or as it may from time to time be amended or supplemented in
accordance with its terms.
Interest Account. The term "Interest Account" means the account within the Certificate
Payment Fund by that name established in Section 5.2 hereof.
Letter of Representations. The term "Letter of Representations" means the letter of the
District delivered to and accepted by the Depository on or prior to delivery of the Certificates as
book-entry certificates setting forth the basis on which the Depository serves as depository for such
book-entry certificates, as originally executed or as it may be supplemented or revised or replaced by
a letter from the District delivered to and accepted by the Depository.
Mood. The term"Moody's"means Moody's Investors Service, or its successors.
Nominee. The term "Nominee" means the nominee of the Depository, which may be the
Depository, as determined from time to time pursuant to Section 2.10 hereof.
2
DOCSSF\35478v4\222925.0006
States of America or of any agency, instrumentality or local governmental unit of any such state
which are not callable at the option of the obligor prior to maturity or as to which irrevocable
instructions have been given by the obligor to call on the date specified in the notice and which are
rated, based on the escrow, in the highest rating category of S&P and Moody's or any successor
thereto; (7) the Local Agency Investment Fund; and (8) other forms of investments approved in
writing by the Bond Insurer with notice to S&P.
Prepayment Account. The term "Prepayment Account" means the account within the
Certificate Payment Fund by that name established in Section 5.2 hereof.
Prepayment Price. The term "Prepayment Price" means the principal amount with respect to
such Certificate (or portion thereof) plus the applicable premium, if any, payable upon prepayment
thereof pursuant to the provisions of such Certificate and this Agreement.
Principal Corporate Trust Office. The term "Principal Corporate Trust Office" means the
principal corporate trust office of the Trustee in San Francisco, California, or such other office as the
Trustee may from time to time designate in writing to the District,the Corporation and the Owners.
Principal Account. The term "Principal Account" means the account within the Certificate
Payment Fund by that name established in Section 5.2 hereof.
Rebate Fund. The term "Rebate Fund" means the fund by that name established in
Section 5.6 hereof.
Record Date. The term "Record Date" means, with respect to any Payment Date for a
Certificate,the fifteenth day of the calendar month prior to such Payment Date.
Reserve Fund. The term "Reserve Fund" means the fund by that name established in
Section 5.2 hereof.
S&P. The term"S&P"means Standard &Poor's Ratings Group, or its successors.
Series 2003A Certificates. The term"Series 2003A Certificates"means the Revenue
Certificates of Participation, Series 2003A executed and delivered by the Trustee pursuant to this
Agreement.
Series 2003A Reserve Account. The term"Series 2003A Reserve Account"means the
account within the Reserve Fund by that name established in Section 5.2 hereof.
Series 2003B Taxable Certificates. The term"Series 2003B Taxable Certificates"means the
Revenue Certificates of Participation, Taxable Series 2003B executed and delivered by the Trustee
pursuant to this Agreement.
Securities Depositories. The term "Securities Depositories" means The Depository Trust
Company 711 Stewart Avenue, Garden City, N-.w York 11530, Fax 516/227-4039 or 4190 or, in
accordance with then-current guidelines of the Securities and Exchange Commission, such other
securities depositaries, or no such depositaries as the Corporation or the District may designate in a
Written Request of the Corporation or a Written Request of the District, as the case may be, to the
Trustee.
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upon which the statements or opinions contained in such statement or opinion are based; (c) a
statement that, in the opinion of the signers, they have made or caused to be made such examination
or investigation as is necessary to enable them to express an informed opinion as to whether or not
such covenant or condition has been complied with; and (d) a statement as to whether, in the opinion
of the signers, such condition or covenant has been complied with.
Any such statement or opinion made or given by an officer of the Corporation or the District
may be based, insofar as it relates to legal or accounting matters, upon a statement or opinion of or
representations by counsel, accountants or consultants, unless such officer knows, or in the exercise
of reasonable care should have known, that the statement or opinion or representations with respect
to the matters upon which his statement or opinion may be based, as aforesaid, are erroneous. Any
such statement or opinion made or given by counsel, accountants or consultants may be based,
insofar as it relates to factual matters, upon information with respect to which is in the possession of
the Corporation or the District, or upon the statement or opinion of or representations by an officer or
officers of the Corporation or the District, unless such counsel, accountant or consultant knows, or in
the exercise of reasonable care should have known, that the statement or opinion or representations
with respect to the matters upon which his opinion may be based as aforesaid are erroneous.
Section 1.4. Recitals.
(a) Installment Purchase Agreement. The Corporation and the District have
entered into the Installment Purchase Agreement whereby the Corporation has agreed to assist the
District in financing the Project and the District has agreed to purchase the Project from the
Corporation.
(b) Installment Payments. Under the Installment Purchase Agreement, the
District is obligated to pay to the Corporation or its assigns Installment Payments for the purchase of
the Project.
(c) Assignment Agreement. For the purpose of obtaining the moneys required to
be deposited by the Corporation with the Trustee, and for the purpose of securing the obligations of
the Corporation hereunder, the Corporation has assigned and transferred certain of its rights under the
Installment Purchase Agreement to the Trustee, pursuant to the Assignment Agreement; and in
consideration of such assignment and the execution of this Agreement, the Trustee has agreed to
execute and deliver certificates of participation, each evidencing an interest in the Installment
Payments in an aggregate amount equal to the aggregate principal amount of certificates of
participation so executed and delivered.
(d) Conditions Precedent Satisfied. The District and the Corporation hereby
certify that all acts, conditions and things required by law to exist, happen and be performed
precedent to and in connection with the execution and entering into of this Agreement 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 empowered to execute and enter into this Agreement.
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Section 2.3. Payment of Principal and Interest with Respect to Certificates. The Series
2003A Certificates shall become payable on January 1 in the years, in the amounts and at the rates,as
follows:
Payment Date
(January 1) Principal Amount Interest Rate
2003
2004
2005
2006
2007
2008
2009
2010
The Series 2003B Taxable Certificates shall become payable on January 1 in the years, in the
amounts and at the rates, as follows:
Payment Date
(January 1) Principal Amount Interest Rate
2011
2012
Section 2.4. Form of Certificates. The Certificates and the form of assignment to appear
thereon shall be in substantially the form set forth in Exhibit A hereto with necessary or appropriate
variations, omissions and insertions as permitted or required by this Agreement.
Section 2.5. Execution. The Certificates shall be executed by and in the name of the
Trustee, as trustee under this Agreement, by the manual signature of an authorized officer or
signatory of the Trustee.
Section 2.6. Transfer of Certificates. Any Certificate may, in accordance with its terms,
be transferred, upon the books required to be kept pursuant to the provisions of Section 2.8, by the
person in whose name it is registered, in person or by such person's duly authorized attorney, upon
surrender of such Certificate for cancellation at the Principal Corporate Trust Office of the Trustee,
accompanied by delivery of a duly executed written instrument of transfer in a form approved by the
Trustee.
Whenever any Certificate or Certificates shall be surrendered for transfer, the Trustee shall
execute and deliver a new Certificate or Certificates of the same maturity, for a like aggregate
principal amount and of authorized denomination or denominations. The Trustee may charge a sum
for each new Certificate executed and delivered upon any transfer. The Trustee may require the
payment by any Certificate Owner requesting any such transfer of any tax or other governmental
charge required to be paid with respect to such transfer. Following any transfer of Certificates she
Trustee shall cancel and destroy the Certificates it has received.
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stolen and which has matured or has been selected for prepayment, the Trustee may make payment of
such Certificate upon receipt of indemnity satisfactory to the Trustee.
Section 2.10. Book-Entry System.
(a) Election of Book-Entry System. Prior to the execution and delivery of the
Certificates, the District may provide that such Certificates shall be initially executed and delivered
as book-entry Certificates. If the District shall elect to deliver any Certificates in book-entry form,
then the District shall cause the delivery of a separate single fully registered certificate (which may
be typewritten) for each maturity date of such Certificates in an authorized denomination
corresponding to that total principal amount of the Certificates designated to mature on such date.
Upon initial execution and delivery, the ownership of each such Certificate shall be registered in the
Certificate registration books in the name of the Nominee, as nominee of the Depository and
ownership of the Certificates, or any portion thereof may not thereafter be transferred except as
provided in Section 2.10(e).
With respect to book-entry Certificates, the District and the Trustee shall have no
responsibility or obligation to any Participant or to any person on behalf of which such a Participant
holds an interest in such book-entry Certificates. Without limiting the immediately preceding
sentence, the District and the Trustee shall have no responsibility or obligation with respect to (i) the
accuracy of the records of the Depository, the Nominee, or any Participant with respect to any
ownership interest in book-entry Certificates, (ii) the delivery to any Participant or any other person,
other than an Owner as shown in the Certificate registration books, of any notice with respect to
book-entry Certificates, including any notice of prepayment, (iii) the selection by the Depository and
its Participants of the beneficial interests in book-entry Certificates to be prepaid in the event the
District prepays the Certificates in part, or (iv) the payment by the Depository or any Participant or
any other person, of any amount with respect to principal, premium, if any, or interest with respect to
book-entry Certificates. The District and the Trustee may treat and consider the person in whose
name each book-entry Certificate is registered in the Certificate registration books as the absolute
Owner of such book-entry Certificate for the purpose of payment of principal, premium, if any, and
interest with respect to such Certificate, for the purpose of giving notices of prepayment and other
matters with respect to such Certificate, for the purpose of registering transfers with respect to such
Certificate, and for all other purposes whatsoever. The Trustee shall pay all principal, premium, if
any, and interest with respect to the Certificates only to or upon the order of the respective Owner, as
shown in the Certificate register, or his respective attorney duly authorized in writing, and all such
payments shall be valid and effective to fully satisfy and discharge the District's obligations with
respect to payment of principal of, premium, if any, and interest evidenced and represented by the
Certificates to the extent of the sum or sums so paid. No person other than an Owner, as shown in
the Certificate registration books, shall receive a Certificate evidencing the obligation to make
payments of principal, premium, if any, and interest evidenced and represented by the Certificates.
Upon delivery by the Depository to the Owner and the Trustee, of written notice to the effect that the
Depository has determined to substitute a new nominee in place of the Nominee, and subject to the
provisions herein with respect to Record Dates, the word Nominee in this Trust Agreement shall
refer to such nominee of the Depository.
(b) Delivery of Letter of Representations. In order to qualify the book-entry
Certificates for the Depository's book-entry system, the District shall execute and deliver to the
Depository a Letter of Representations. The execution and delivery of a Letter of Representations
shall not in any way impose upon the District or the Trustee any obligation whatsoever with respect
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... or (2) a determination by the District that DTC or its successor (or Substitute Depository or its
successor) is no longer able to carry out its functions as depository.
(ii) In the case of any transfer pursuant to clause (A) or clause (B) of
subsection (i) of this Section 2.10(e), upon receipt of all Outstanding Certificates by the Trustee,
together with a written request of the District to the Trustee designating the Substitute Depository, a
single new Certificate, which the District shall prepare or cause to be prepared, shall be executed and
delivered for each maturity of Certificates then Outstanding, registered in the name of such successor
or such Substitute Depository or their Nominees, as the case may be, all as specified in such written
request of the District. In the case of any transfer pursuant to clause (C) of subsection (i) of this
Section 2.10(e), upon receipt of all Outstanding Certificates by the Trustee, together with a written
request of the District to the Trustee, new Certificates, which the District shall prepare or cause to be
prepared, shall be executed and delivered in such denominations and registered in the names of such
persons as are requested in such written request of the District, subject to the limitations of Section
2.1 hereof, provided that the Trustee shall not be required to deliver such new Certificates within a
period of less than sixty (60) days from the date of receipt of such written request from the District.
(iii) In the case of a partial prepayment or an advance refunding of any
Certificates evidencing a portion of the principal maturing in a particular year, DTC or its successor
(or any Substitute Depository or its successor) shall make an appropriate notation on such
Certificates indicating the date and amounts of such reduction in principal, in form acceptable to the
Trustee, all in accordance with the Letter of Representations. The Trustee shall not be liable for such
Depository's failure to make such notations or errors in making such notations.
(iv) The District and the Trustee shall be entitled to treat the person in
whose name any Certificate is registered as the Owner thereof for all purposes of this Trust
Agreement and any applicable laws, notwithstanding any notice to the contrary received by the
Trustee or the District; and the District and the Trustee shall not have responsibility for transmitting
payments to, communicating with, notifying, or otherwise dealing with any beneficial owners of the
Certificates. Neither the District nor the Trustee shall have any responsibility or obligation, legal or
otherwise, to any such beneficial owners or to any other party, including DTC or its successor (or
Substitute Depository or its successor), except to the Owner of any Certificates, and the Trustee may
rely conclusively on its records as to the identity of the Owners of the Certificates.
ARTICLE III
DELIVERY OF CERTIFICATES; DELIVERY COST FUND
Section 3.1. Delivery of Certificates. The Trustee is hereby authorized to execute and
deliver Certificates in an aggregate principal amount of$ , upon the Written Order of the
District.
Section 3.2. Application of Proceeds of Certificates and Certain Other Moneys. The
proceeds received from the sale of the Certificates being $ , which represents
$ face amount of the Certificates, less original issue discount of$ and less
Underwriter's discount of$ , and after$ is paid by the initial purchasers of
the Certificates directly to the Bond Insurer, shall be deposited with the Trustee, who shall deposit
the sum of $ in the Series 2003A Reserve Account, shall deposit $ in the
Taxable Series 2003B Reserve Account, shall deposit the sum of $ in the Delivery Cost
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r
any, and, if less than all Certificates of any such maturity are to be prepaid, the serial numbers of the
Certificates of such maturity to be prepaid by giving the individual number of each Certificate or by
stating that all Certificates between two stated numbers, both inclusive, have been called for
prepayment and, in the case of Certificates to be prepaid in part only, the portions thereof to be
prepaid. Each such notice shall also state that on said date there will become due and payable on each
of said Certificates the Prepayment Price thereof or of said specified portion of the principal
represented thereby in the case of a Certificate to be prepaid in part only, together with interest
accrued with respect thereto to the prepayment date, and that (provided that moneys for prepayment
have been deposited with the Trustee) from and after such prepayment date interest with respect
thereto shall cease to accrue, and shall require that such Certificates be then surrendered to the
Trustee. Any defect in the notice or the mailing thereof will not affect the validity of the prepayment
of any Certificate.
Notice of prepayment of Certificates shall be given by the Trustee on behalf of and at the
expense of the District.
Section 4.4. Partial Prepayment of Certificate. Upon surrender of any Certificate prepaid
in part only,the Trustee shall execute and deliver to the Owner thereof, at the expense of the District,
a new Certificate or Certificates of authorized denominations equal in aggregate principal amount to
the unprepaid portion of the Certificate surrendered and of the same maturity.
Section 4.5. Effect of Prepayment. When notice of prepayment has been duly given as
aforesaid, and moneys for payment of the Prepayment Price of, together with interest accrued to the
prepayment date with respect to, the Certificates (or portions thereof) so called for prepayment are
held by the Trustee, the Certificates (or portions thereof) so called for prepayment shall, on the
prepayment date designated in such notice, become due and payable at the Prepayment Price
specified in such notice and interest accrued thereon to the prepayment date; and from and after the
prepayment date interest represented by the Certificates so called for prepayment shall cease to
accrue, said Certificates (or portions thereof) shall cease to be entitled to any benefit or security
under this Agreement, and the Owners of said Certificates shall have no rights in respect thereof
except to receive payment of said Prepayment Price and accrued interest.
All Certificates prepaid pursuant to the provisions of this Article shall be canceled upon
surrender thereof and destroyed by the Trustee.
ARTICLE V
INSTALLMENT PAYMENTS
Section 5.1. Pledge and Deposit of Installment Payments. The Installment Payments are
hereby irrevocably pledged to, and shall be used for,the punctual payment of the Certificates, and the
Installment Payments shall not be used for any other purpose while any of the Certificates remain
Outstanding. This pledge shall constitute a first and exclusive lien on the Installment Payments in
accordance with the terms hereof.
All Installment Payments to which the Corporation may at any time be entitled (including
income or profit from investments pursuant to Section 5.3) shall be paid directly to the Trustee
pursuant to the terms of the Assignment Agreement, and if received by the Corporation at any time
shall be deposited by the Corporation with the Trustee within one business day after the receipt
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Prepayment Account on the prepayment date specified in the Written Request of the District filed
with the Trustee pursuant to Section 7.2 of the Installment Purchase Agreement. Said moneys shall
be set aside in the Prepayment Account solely for the purpose of prepaying the Certificates in
advance of their respective stated maturities and shall be applied on or after the date specified for
prepayment pursuant to Section 4.1 hereof to the payment of the Prepayment Price with respect to the
Certificates to be prepaid upon presentation and surrender of such Certificates.
Section 5.3. Investment of Moneys in Special Funds. Any moneys in the Delivery Cost
Fund, the Certificate Payment Fund and the Reserve Fund shall be invested upon the Written Request
of the District, by the Trustee, in Permitted Investments which will mature on or before the dates
when such moneys are scheduled to be needed for payment from such fund. Securities acquired as an
investment of moneys in a fund shall be credited to such fund.
In the absence of written investment direction from the District, the Trustee shall invest
moneys held by it solely in Permitted Investments specified in clause(b)(5) of the definition thereof.
Any interest, profit or other income on such investments will be deposited when received by
the Trustee in the Reserve Fund to the extent the amount available and contained therein is less than
the Reserve Requirement and thereafter in the Certificate Payment Fund established hereunder.
Subject to the further provisions of Section 6.3 hereof, the Trustee may sell or present for
prepayment any obligations so purchased at the direction of the District whenever it shall be
necessary in order to provide moneys to meet any payment, and the Trustee shall not be liable or
responsible for any loss resulting from such investment. The Trustee or an affiliate may act as
principal or agent in the acquisition or disposition of any investment and should be entitled to its
customary fee therefor. The Trustee may commingle any of the funds or accounts established
pursuant to this Agreement into a separate fund or funds for investment purposes only; provided,
however, that all funds or accounts held by the Trustee hereunder shall be accounted for separately
notwithstanding such commingling.
Section 5.4. Reserve Fund. The Trustee shall deposit in the Reserve Fund the amounts
required to be deposited therein pursuant to the Installment Purchase Agreement and this Agreement
and apply moneys in the Reserve Fund in accordance with this Section.
If one business day prior to any Payment Date the moneys in the Certificate Payment Fund
are insufficient to make the payments required by this Agreement with respect to Certificates on such
Payment Date, the Trustee shall transfer from the Reserve Fund to the Certificate Payment Fund the
amount of such insufficiency. In the event that the Trustee has transferred moneys from the Reserve
Fund to the Certificate Payment Fund in accordance with this Section, upon receipt of the moneys
from the District to increase the balance in the Reserve Fund to the Reserve Requirement,the Trustee
shall deposit such moneys in the Reserve Fund. Any transfers from the Reserve Fund made pursuant
to this paragraph shall be made from the Series 2003A Reserve Account and the Taxable Series
2003B Reserve Account on a pro-rata basis.
If the amount available and contained in the Reserve Fund exceeds an amount equal to the
Reserve Requirement and if the District is not then in default under the Installment Purchase
Agreement, the Trustee shall semiannually on or before each Payment Date withdraw the amount of
such excess from the Reserve Fund and shall deposit such amount in the Certificate Payment Fund,
and for this determination the Trustee shall make a valuation of the Reserve Fund as often as it may
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compliance by the District with the terms of the Tax Certificate, and (Ili)may rely conclusively on
the District's calculations and detenninations and certifications relating to rebate matters, and
(iv) shall have no responsibility to independently make any calculations or determinations or to
review the District's calculations or determinations thereunder.
(i) Annual Computation. Within 55 days of the end of each Certificate
Year (as such term is defined in the Tax Certificate), the District shall calculate or cause to be
calculated the amount of rebatable arbitrage, in accordance with Section 148(f)(2) of the Code and
Section 1.148-3 of the Treasury Regulations (taking into account any applicable exceptions with
respect to the computation of the rebatable arbitrage, described, if applicable, in the Tax Certificate
(e.g., the temporary investments exceptions of Section 148(f)(4)(B) and (C) of the Code), and taking
into account whether the election pursuant to Section 148(0(4)(C)(vii) of the Code (the "11/2%
Penalty") has been made), for this purpose treating the last day of the applicable Certificate Year as a
computation date, within the meaning of Section 1.148-1(b) of the Treasury Regulations (the
"Rebatable Arbitrage"). The District shall obtain expert advice as to the amount of the Rebatable
Arbitrage to comply with this Section.
(ii) Annual Transfer. Within 55 days of the end of each Certificate Year,
upon the written Request of the District, an amount shall be deposited to the Rebate Fund by the
Trustee from any Revenues legally available for such purpose (as specified by the District in the
aforesaid written Request), if and to the extent required so that the balance in the Rebate Fund shall
equal the amount of Rebatable Arbitrage so calculated in accordance with (i) of this Subsection (a).
In the event that immediately following the transfer required by the previous sentence, the amount
then on deposit to the credit of the Rebate Fund exceeds the amount required to be on deposit therein,
upon written Request of the District, the Trustee shall withdraw the excess from the Rebate Fund and
then credit the excess to the Revenue Fund.
(iii) Payment to the Treasury. The Trustee shall pay, as directed by
Request of the District,to the United States Treasury, out of amounts in the Rebate Account,
(1) Not later than 60 days after the end of(X)the fifth Certificate
Year, and(Y)each applicable fifth Certificate Year thereafter, an amount equal to at least 90% of the
Rebatable Arbitrage calculated as of the end of such Certificate Year; and
(2) Not later than 60 days after the payment of all the Series
2003A Certificates, an amount equal to 100% of the Rebatable Arbitrage calculated as of the end of
such applicable Certificate Year, and any income attributable to the Rebatable Arbitrage, computed
in accordance with Section 148(f) of the Code.
In the event that, prior to the time of any payment required to be made from the Rebate Fund,
the amount in the Rebate Fund is not sufficient to make such payment when such payment is due, the
District shall calculate or cause to be calculated the amount of such deficiency and deposit an amount
received from any legally available source equal to such deficiency prior to the time such payment is
due. Each payment required to be made pursuant to this Subsection(a) shall be made to the Internal
Revenue Service Center, Ogden, Utah 84201 on or before the date on which such payment is due,
and shall be accompanied by Internal Revenue Service Form 8038-T, or shall be made in such other
manner as provided under the Code.
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would cause the Series 2003A Certificates to be "private activity bonds" within the meaning of
Section 141 of the Code.
(b) Arbitrage. The District will make no use of the proceeds of the Series 2003A
Certificates or of any other amounts or property, regardless of the source, or take or omit to take any
action which would cause the Series 2003A Certificates to be "arbitrage bonds" within the meaning
of Section 148 of the Code.
(c) Federal Guarantee. The District will make no use of the proceeds of the
Series 2003A Certificates or take or omit to take any action that would cause the Series 2003A
Certificates to be "federally guaranteed"within the meaning of Section 149(b)of the Code.
(d) Information Reporting. The District will take or cause to be taken all
necessary action to comply with the informational reporting requirement of Section 149(e) of the
Code.
(e) Miscellaneous. The District will take no action inconsistent with its
expectations stated in any Tax Certificate executed with respect to the Series 2003A 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 causing the Trustee to execute and
deliver, Series 2003A Certificates the interest with respect to which has been determined by Special
Counsel to be subject to federal income taxation.
Section 6.4. Accounting Records and Reports. The Trustee shall keep or cause to be kept
proper books of record and account in which complete and correct entries shall be made of all
transactions made by it relating to the receipts, disbursements, allocation and application of the
Installment Payments, and such books shall be available upon reasonable prior notice for inspection
by the District and by any Owner of Certificates, or his agent or representative, at reasonable hours
and under reasonable conditions. Each month, so long as the Certificates are Outstanding,the Trustee
shall furnish to the District a statement covering receipts, disbursements, allocation and application
of amounts on deposit in the funds and accounts created hereunder held by it.
Section 6.5. Compliance with Trust Agreement. The Trustee will not execute, or permit
to be executed, any Certificates in any manner other than in accordance with the provisions of this
Agreement, and the District will not suffer or permit any default by it to occur under this Agreement,
but will faithfully observe and perform all the covenants, conditions and requirements hereof.
Section 6.6. Observance of Laws and Regulations. To the extent necessary to assure their
performance hereunder, the Corporation and the District will well and truly keep, observe and
perform all valid and lawful obligations or regulations now or hereafter imposed on them by contract,
or prescribed by any law of the United States of America, or of the State, or by any officer, board or
commission having jurisdiction or control, as a condition of the continued enjoyment of any and
every right, privilege or franchise now owned or hereafter acquired by the Corporation or the
District, respectively, including its right to exist and carry on its business, to the end that such
contracts, rights and franchises shall be maintained and preserved, and shall not become abandoned,
forfeited or in any manner impaired.
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Section 6.10. Eminent Domain. If all or any part of the Electric System shall be taken by
eminent domain proceedings (or sold to a government threatening to exercise the power of eminent
domain), the Net Proceeds therefrom may be applied in the manner specified in Section 6.15 of the
Installment Purchase Agreement.
Section 6.11. Further Assurances. Whenever and so often as requested so to do by the
Trustee or any Certificate Owner, the Corporation and the District will promptly execute and deliver
or cause to be executed and delivered all such other and further instruments, documents or
assurances, and promptly do or cause to be done all such other and further things, as may be
necessary or reasonably required in order to further and more fully vest in the Trustee and the
Certificate Owners all rights, interest, powers, benefits, privileges and advantages conferred or
intended to be conferred upon them by this Agreement.
Section 6.12. Continuing Disclosure. The District hereby covenants and agrees that it will
comply with and carry out all of its obligations under the continuing disclosure certificate to be
executed and delivered by the District in connection with the delivery of the Certificates.
Notwithstanding any other provision of this Agreement, failure of the District to comply with the
continuing disclosure certificate shall not be considered an Event of Default; however, any Owner or
Beneficial Owner may take such actions as may be necessary and appropriate, including seeking
mandate or specific performance by court order, to cause the District to comply with its obligations
under this Section 6.12. For purposes of this Section, "Beneficial Owner" means any person which
has or shares the power, directly or indirectly,to make investment decisions concerning ownership of
any Certificates (including persons holding Certificates through nominees, depositories or other
intermediaries).
ARTICLE VII
DEFAULT AND LIMITATION OF LIABILITY
Section 7.1. Notice of Non-Payment. In the event of delinquency in the payment of any
Installment Payments due by the District pursuant to the Installment Purchase Agreement, the
Trustee shall, after one business day following the date upon which such delinquent Installment
Payment was due, as soon as practicable give written notice of the delinquency and the amount of the
delinquency to the District and the Corporation.
Section 7.2. Action on Default or Termination. Upon the occurrence of an Event of
Default (as that term is defined in the Installment Purchase Agreement), which event shall constitute
a default hereunder, and in each and every such case during the continuance of such Event of
Default, the Trustee or the Owners of not less than a majority in aggregate principal amount of
Certificates at the time Outstanding shall be entitled, with the written consent of the Bond Insurer so
long as the Bond Insurance Policy is in full force and effect, upon notice in writing to the District, to
exercise the remedies provided to the Corporation in the Installment Purchase Agreement.
Upon declaration of the entire principal amount of the unpaid Installment Payments and the
accrued interest thereon to be due and payable immediately and provided such declaration is not
rescinded or annulled, all in accordance with Section 8.1 of the Installment Purchase Agreement, the
Trustee shall apply all moneys received as Installment Payments and all moneys held in any fund or
account hereunder to the payment of the entire principal amount of the Certificates and the accrued
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DOCSSF\35478v4\22925.0006
., in aggregate principal amount of the Certificates Outstanding hereunder shall, upon tender to the
Trustee of reasonable indemnity against the costs, expenses and liabilities to be incurred in
compliance with such direction, have the right to direct the method and place of conducting all
remedial proceedings by the Trustee,provided such direction shall be in accordance with law and the
provisions of this Trust Agreement and that the Trustee shall have the right to decline to follow any
such direction which in the opinion of the Trustee would be unjustly prejudicial to Certificate-owners
not parties to such a direction.
Section 7.8. Power of Trustee to Control Proceedings. In the event that the Trustee, upon
the happening of an Event of Default, shall have taken any action, by judicial proceedings or
otherwise, pursuant to its duties hereunder, whether upon its own discretion or upon the request of
the Owners of a majority in aggregate principal amount of the Certificates then outstanding pursuant
to Section 7.7 hereof, it shall have full power, in the exercise of its discretion for the best interests of
the Owners of the Certificates, with respect to the continuance, discontinuance, withdrawal,
compromise, settlement or other disposal of such action; provided, however, that the Trustee shall
not, unless there no longer continues an Event of Default hereunder, discontinue, withdraw,
compromise or settle, or otherwise dispose of, any litigation pending at law or in equity, if at the time
there has been filed with it a written request signed by the Owners of at least a majority in principal
amount of the Certificates Outstanding hereunder opposing such discontinuance, withdrawal,
compromise, settlement or other disposal of such litigation.
Section 7.9. Limitation on Certificate-owners' Rip-ht to Sue. No Owner of any Certificate
executed and delivered hereunder shall have the right to institute any suit, action or proceeding at law
or in equity, for any remedy under or upon this Agreement, unless (a) such Owner shall have
previously given to the Trustee written notice of the occurrence of an Event of Default hereunder; (b)
the Owners of at least a majority in aggregate principal amount of all the Certificates then
Outstanding shall have made written request upon the Trustee to exercise the powers hereinbefore
granted or to institute such action, suit or proceeding in its own name; (c) said Owners shall have
tendered to the Trustee reasonable indemnity against the costs, expenses and liabilities to be incurred
in compliance with such request; and (d) the Trustee shall have refused or omitted to comply with
such request for a period of sixty (60) days after such written request shall have been received by,
and said tender of indemnity shall have been made to,the Trustee.
Such notification, request, tender or indemnity and refusal or omission are hereby declared,
in every case, to be conditions precedent to the exercise by any Owner of Certificates of any remedy
hereunder; it being understood and intended that no one or more Owners of Certificates shall have
any right in any manner whatever by his or their action to enforce any right under this Agreement,
except in the manner herein provided, and that all proceedings at law or in equity to enforce any
provision of this Agreement shall be instituted, had and maintained in the manner herein provided
and for the equal benefit of all owners of the Outstanding Certificates.
The right of any Owner of any Certificate to receive payment of the principal of (and
premium, if any) and interest with respect to such Certificate, as herein provided, on and after the
respective die dates expressed in such Certificate, or to institute suit for the enforcement of any such
payment on or after such respective dates, shall not be impaired or affected without the consent of
such Owner, notwithstanding the foregoing provisions of this Section or Section 7.10 or any other
provision of this Agreement.
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DOCSSF\35478v4\22925.0006
Section 8.2. Acceptance of Employment. In consideration of the compensation herein
provided for, the Trustee accepts the employment above referred to subject to the terms and
conditions of this Agreement.
Section 8.3. Trustee: Duties, Removal and Resignation._ By executing and delivering this
Agreement, the Trustee accepts the duties and obligations of the Trustee provided in this Agreement,
but only upon the terms and conditions set forth in this Agreement.
The District may, by written request to the Trustee, remove the Trustee and appoint a
successor Trustee; provided, however, that if the District is in default under the Installment Purchase
Agreement, the Owners of a majority in aggregate principal amount of all Certificates Outstanding
may,by written request to the Trustee,remove the Trustee and appoint a successor Trustee. Any such
successor shall be a bank or trust company doing business and having a corporate trust office in
California, which has (or the parent holding company of which has) a combined capital (exclusive of
borrowed capital) and surplus of at least twenty million dollars ($20,000,000) and subject to
supervision or examination by federal or state authorities. If such bank or trust company publishes a
report of condition at least annually, pursuant to law or to the requirements of any supervising or
examining authority above referred to, then for the purposes of this Section the combined capital and
surplus of such bank or trust company shall be deemed to be its combined capital and surplus as set
forth in its most recent report of condition so published.
The Trustee may at any time resign by giving written notice to the District and by giving to
the Certificate Owners notice of such resignation by mail at the addresses shown on the registration
books maintained by the Trustee. Upon receiving such notice of resignation, the District shall
promptly appoint a successor Trustee by an instrument in writing; provided, however, that in the
event that the District does not appoint a successor Trustee within thirty (30) days following receipt
of such notice of resignation, the resigning Trustee may at the expense of the District petition the
appropriate court having jurisdiction to appoint a successor Trustee. Any resignation or removal of
the Trustee and appointment of a successor Trustee shall become effective upon written acceptance
of appointment by the successor Trustee.
Section 8.4. Compensation of the Trustee. The District shall from time to time, subject to
any agreement in effect with the Trustee, pay to the Trustee reasonable compensation for its services
and shall reimburse the Trustee (including all of its employees, officers and directors) for all its
advances and expenditures, including but not limited to advances to and fees and expenses of
independent appraisers, accountants, consultants, counsel, agents and attorneys-at-law or other
experts employed by it in the exercise and performance of its powers and duties hereunder. Such
compensation and reimbursement shall be paid by the District; provided, however, that the Trustee
shall not otherwise have any claims, except in accordance with Section 7.13 hereof and Section 8.2
of the Installment Purchase Agreement, or lien for payment of compensation for its services against
any moneys held by it in the funds or accounts established hereunder but may take whatever legal
actions are lawfully available to it directly against the District. The obligations of the District under
this Section shall survive resignation or removal of the Trustee and payment of the Certificates and
discharge of this Agreement.
Section 8.5. Protection of the Trustee. The Trustee shall be protected and shall incur no
liability whatsoever in acting or refraining from acting or proceeding in good faith upon any
resolution, notice, telegram, request, consent, waiver, certificate, statement, affidavit, voucher, bond,
requisition or other paper or document which it shall in good faith believe to be genuine and to have
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DOCSSF\35478v4\22925.0006
reasonable grounds for believing that repayment of such.funds or adequate.indemnity against such
risk or liability is not assured to it.
In accepting the trust hereby created, the Trustee acts solely as Trustee for the Owners and
not in its individual capacity and all persons, including without limitation the Owners and the District
or the Corporation having any claim against the Trustee arising from this Agreement shall look only
to the funds and accounts held by the Trustee hereunder for payment except as otherwise provided
herein. Under no circumstances shall the Trustee be liable in its individual capacity for the
obligations evidenced by the Certificates.
The Trustee makes no representation or warranty, express or implied as to the title, value,
design, compliance with specifications or legal requirements, quality, durability, operation,
condition, merchantability or fitness for any particular purpose or fitness for the use contemplated by
the District or the Corporation of the Project. In no event shall the Trustee be liable for incidental,
indirect, special or consequential damages in connection with or arising from the Installment
Purchase Agreement or this Agreement for the existence, furnishing or use of the Project.
The Trustee shall not be deemed to have knowledge of any Event of Default hereunder or
under the Installment Purchase Agreement unless and until it shall have actual knowledge thereof or
have received notice thereof at its corporate trust office at the address set forth in Section 11.11
hereof. The Trustee shall, during the existence of any Event of Default (which has not been cured)
use the same degree of care and skill in their exercise, as a prudent person would exercise or use
under the circumstances in the conduct of his or her own affairs.
The Trustee shall not be accountable for the use or application by the District, or the
Corporation or any other party of any funds which the Trustee has released in accordance with the
terms of this Agreement.
Section 8.6. Merger or Consolidation. Any company into which the Trustee may be
merged or converted or with which it may be consolidated or any company resulting from any
merger, conversion or consolidation to which it shall be a party or any company to which the Trustee
may sell or transfer all or substantially all of its corporate trust business (provided such company is
eligible under Section 8.3 hereof), shall be the successor to the Trustee without the execution or
filing of any paper or further act, anything herein to the contrary notwithstanding.
ARTICLE IX
AMENDMENT OF TRUST AGREEMENT
Section 9.1. Amendments Permitted.
(a) This Agreement and the rights and obligations of the District and of the
Owners of the Certificates and of the Trustee may be modified or amended at any time by an
amendment hereto which shall become binding when the written consents of the Owners of a
majority in aggregate principal amount of the Certificates then Outstanding, exclusive of Certificates
disqualified as provided in Section 11.4 hereof, shall have been filed, together with the written
consent of the Bond Insurer so long as the Bond Insurance Policy is in full force and effect, with the
Trustee.No such modification or amendment shall (1) extend the stated maturities of the Certificates,
or reduce the rate of interest or yields-to-maturity, as the case may be, represented thereby, or extend
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ARTICLE X
DEFEASANCE
Section 10.1. Discharge of Trust Agreement. When the obligations of the District under the
Installment Purchase Agreement shall cease pursuant to Article IX of the Installment Purchase
Agreement (except for the right of the Trustee and the obligation of the District to have the money
and Permitted Investments mentioned therein applied to the payment of Installment Payments as
therein set forth and the obligation to apply moneys on deposit in the Rebate Fund as provided in
Section 5.6), then and in that case the obligations created by this Agreement shall thereupon cease,
tenninate and become void except for the obligation of the District to direct the Trustee to apply
money on deposit in the Rebate Fund as provided herein which shall continue until such moneys are
so applied and the right of the Owners to have applied and the obligation of the Trustee to apply such
moneys and Permitted Investments to the payment of the Certificates as herein set forth; and subject
to application of moneys on deposit in the Rebate Fund as provided in Section 5.6, the Trustee shall
turn over to the District, after provision for payment of amounts due the Trustee hereunder, as an
overpayment of Installment Payments, any surplus in the Certificate Payment Fund and all balances
remaining in any other funds or accounts other than moneys and Permitted Investments held for the
payment of the Certificates at maturity or on prepayment, which moneys and Permitted Investments
shall continue to be held by the Trustee in trust for the benefit of the Owners and shall be applied by
the Trustee to the payment, when due, of the principal or interest and premium, if any,represented by
the Certificates, and after such payment,this Agreement shall become void.
If moneys or securities described in clause (a) of the definition of Permitted Investments are
deposited with and held by the Trustee as hereinabove provided, the Trustee shall within thirty (30)
days after such moneys or Permitted Investments shall have been deposited with it, mail a notice,
first class postage prepaid, to the Owners at the addresses listed on the registration books kept by the
Trustee pursuant to Section 2.8, setting forth (a) the date fixed for prepayment of the Certificates, (b)
a description of the moneys or securities described in clause (a) of the definition of Permitted
Investments so held by it, and (c) that this Agreement has been released in accordance with the
provisions of this Section.
Section 10.2. Deposit of Money or Securities with Trustee. Whenever in this Agreement or
the Installment Purchase Agreement it is provided or permitted that there be deposited with or held in
trust by the Trustee money or securities in the necessary amount to pay or prepay any Certificates,
the money or securities to be so deposited or held may include money or 'securities held by the
Trustee in the funds and accounts established pursuant to this Agreement and shall be—
(a) lawful money of the United States of America in an amount equal to the
principal amount represented by such Certificates and all unpaid interest represented thereby to
maturity, except that, in the case of Certificates which are to be prepaid prior to maturity and in
respect of which notice of such prepayment shall have been given as in Article IV provided or
provision satisfactory to the Trustee shall have been made for the giving of such notice, the amount
to be deposited or held shall be the principal amount or Prepayment Price and all unpaid interest to
such date of prepayment if any, represented by such Certificates; or
(b) non-callable securities described in clause (a) of the definition of Permitted
Investments which will provide money sufficient to pay the principal at maturity or upon prepayment
plus all accrued interest to maturity or to the prepayment date, as the case may be, represented by the
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DOCS SF\35478v4\22925.0006
deeds to be recorded in the state or territory in which he or she purports to act that the person signing
such declaration, request or other instrument or writing acknowledged to him or her the execution
thereof, or by an affidavit of a witness of such execution duly sworn to before such notary public or
other officer, or by such other proof as the Trustee may accept which it may deem sufficient.
The ownership of any Certificates and the arhount, payment date, number and date of owning
the same may be proved by the books required to be kept by the Trustee pursuant to the provisions of
Section 2.8.
Any declaration, request or other instrument in writing of the Owner of any Certificate shall
bind all future Owners of such Certificate with respect to anything done or suffered to be done by the
District or the Trustee in good faith and in accordance therewith.
Section 11.4. Disqualified Certificates. Certificates owned or held by or for the account of
the Corporation or the District (but excluding Certificates held in any pension or retirement fund)
shall not be deemed Outstanding for the purpose of any consent or other action or any calculation of
Outstanding Certificates provided for in this Agreement, and shall not be entitled to consent to or
take any other action provided for in this Agreement.
The Trustee may adopt appropriate regulations to require each Owner of Certificates, before
his or her consent provided for in this Agreement shall be deemed effective, to reveal if the
Certificates as to which such consent is given are disqualified as provided in this Section.
Section 11.5. Waiver of Personal Liability. No director, officer.or employee of the District
or the Corporation shall be individually or personally liable for the payment of the interest, principal
or the prepayment premiums, if any, represented by the Certificates, but nothing contained herein
shall relieve any director, officer or employee of the District or Corporation from the performance of
any official duty provided by any applicable provisions of law or by the Installment Purchase
Agreement or hereby.
Section 11.6. Acquisition of Certificates by the District; Destruction of Certificates. All
Certificates acquired by the District, whether by purchase or gift or otherwise shall be surrendered to
the Trustee for cancellation. Whenever in this Agreement provision is made for the cancellation by
the Trustee of any Certificates, the Trustee shall destroy such Certificates and upon written request
deliver a certificate of such destruction to the District.
Section 11.7. Headings. Headings preceding the text of the several Articles and Sections
hereof, and the table of contents, are solely for convenience of reference and shall not constitute a
part of this Agreement or affect its meaning, construction or effect.
All references herein to "Articles," "Sections" and other subdivisions are to the
corresponding Articles, Sections or subdivisions of this Agreement; and the words "herein,"
"hereof," "hereunder" and other words of similar import refer to this Agreement as a whole and not
to any particular Article, Section or subdivision hereof.
Section 11.8. Funds and Accounts. Any fund required by this Agreement to be established
and maintained by the Trustee may be established and maintained in the accounting records of the
Trustee either as a fund or an account, and may, for the purposes of such records, any audits thereof
and any reports or statements with respect thereto, be treated either as a fund or as an account; but all
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IN WITNESS WHEREOF, the parties have executed and attested this Agreement by their
officers hereunto duly authorized as of the date and year first written above.
BNY WESTERN TRUST COMPANY, as Trustee
By:
Authorized Officer
TRUCKEE-DONNER PUBLIC UTILITY DISTRICT
FINANCING CORPORATION
By:
President
By:
Secretary
TRUCKEE-DONNER PUBLIC UTILITY DISTRICT
By:
President
By:
Clerk
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DOCS SF\35478v4\22925.0006
. .. Interest with respect to this Certificate shall be paid on January 1 and July 1 in each year,
commencing July 1, 2003 (each, an "Interest Payment Date"), and continuing to and including the
Certificate Payment Date or the date of prior prepayment hereof, whichever is earlier. Interest with
respect to this Certificate shall be calculated on the basis of a 360-day year of twelve 30-day months.
The principal with respect hereto and prepayment premiums, if any, are payable in lawful money of
the United States of America upon presentation and surrender at the principal corporate trust office of
the Trustee in Los Angeles, California or such other office as the Trustee may from time to time
designate in writing to the District, the Corporation and the registered owners (the "Principal
Corporate Trust Office"). Interest with respect hereto is payable by check or draft of the Trustee
mailed by first class mail on each Interest Payment Date to the Registered Owner hereof as of the
close of business on the fifteenth day of the calendar month prior to such Interest Payment Date (the
"Record Date") at the address shown on the books maintained by the Trustee or, upon the written
request received by the Trustee of an Owner of at least $1,000,000 in aggregate principal amount of
Certificates, by wire transfer of immediately available funds to an account in the United States
designated by such Owner prior to the applicable Record Date, except, in each case that, if and to the
extent that there is a default in the payment of the interest due on such Interest Payment Date, such
defaulted interest shall be paid to the owner in whose name this Certificate is registered at the close
of business on a special record date as determined by the Trustee.
This Certificate has been executed by the Trustee pursuant to the terms of the Trust
Agreement. Copies of the Trust Agreement and the Installment Purchase Agreement are on file at
the corporate trust office of the Trustee in Los Angeles, California, and reference is made to the Trust
Agreement and the Installment Purchase Agreement and any and all amendments thereto for a
description of the pledges and covenants securing the Certificates, the nature, extent and manner of
enforcement of such pledges, the rights and remedies of the registered owners of the Certificates with
respect thereto and the other terms and conditions upon which the Certificates are delivered
thereunder.
The Certificates are payable from Installment Payments payable by the District and other
amounts on deposit in certain funds and accounts held under the Trust Agreement, including but not
limited to the Reserve Fund, all in accordance therewith. All Revenues and all amounts on deposit in
the Revenue Fund (as such terms are defined in the Installment Purchase Agreement) are irrevocably
pledged to the payment of the Installment Payments and the Revenues shall not be used for any other
purpose while any of the Installment Payments remain unpaid; provided that out of Revenues there
may be apportioned such sums for such purposes as are expressly permitted in the Installment
Purchase Agreement. This pledge,together with the pledge created by all other Contracts and Bonds
(as such terms are defined in the Installment Purchase Agreement) constitutes a first lien on
Revenues, subject to application of Revenues and all amounts on deposit in the Revenue Fund as
permitted in the Installment Purchase Agreement, and the Revenue Fund for the payment of the
Installment Payments and all other Contracts and Bonds in accordance with the terms of the
Installment Purchase Agreement.
The obligation of the District to make Installment Payments is a special obligation of the
District payable solely from Net Revenues (as defined in the Installment Purchase Agreement) on a
parity with certain outstanding Contracts as described in the Installment Purchase Agreement and
does not constitute a debt of the District or of the State of California or of any political subdivision
thereof in contravention of any constitutional or statutory debt limitation or restriction. The District
may at any time incur Contracts or issue Bonds, the payments of which are on a parity with the
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DOCSSF\35478v4\222925.0006
amount of the Certificates then outstanding, but no such modification or amendment shall (1) extend
the stated maturities of the Certificates, or reduce the rate of interest or yield-to-maturity 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
registered owner of each Certificate so affected, or(2) reduce the percentage of registered owners of
Certificates whose consent is required for the execution of any amendment or modification of the
Trust Agreement or the Installment Purchase Agreement, or (3) modify any of the rights or
obligations of the Trustee or the Corporation without its written consent thereto.
To the extent and in the manner permitted by the terms of the Trust Agreement and the
Installment Purchase Agreement, as the case may be, the Trust Agreement and the rights and
obligations of the Corporation and the District and of the registered obligations of the Corporation
and the District and of the registered owners of the Certificates or the Installment Purchase
Agreement and the rights and obligations of the Corporation and the District also be modified or
amended, without the consent of the registered owners of any 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
the Trust Agreement or the Installment Purchase Agreement other covenants and
agreements thereafter to be observed or to surrender any right or power in the Trust
Agreement or the Installment Purchase Agreement reserved to or conferred upon the
Corporation or the District, and which shall not adversely affect the interests of the
registered owners of the Certificates;
(2) to cure, correct or supplement any ambiguous or defective provision contained in the
Trust Agreement or the Installment Purchase Agreement or in regard to questions arising
under the Trust Agreement or the Installment Purchase Agreement, as the Corporation or
the District may deem necessary or desirable and which shall not adversely affect the
interests of the registered owners of the Certificates; and
(3) to make such other amendments or modifications as may be in the best interests of the
registered owners of the Certificates.
Upon acceleration, the Installment Payments and the Certificates shall become due and
payable immediately from the sources described in the Installment Purchase Agreement and the Trust
Agreement, respectively.
The Trustee has no obligation or liability to the registered owners of the Certificates for the
payment of interest, principal or prepayment premium, if any, with respect to the Certificates out of
the Trustee's own funds; the Trustee's sole obligations are those described in the Trust Agreement.
The recitals of facts herein shall be taken as statements of the District and the Corporation and the
Trustee does not have any responsibility for the accuracy thereof.
The District has certified that all acts, conditions and things required by the Constitution and
statutes of the State of California and the Trust Agreement to exist, to have happened and to have
been performed precedent to and in the delivery of this Certificate, do exist, have happened and have
been performed in due time, form and manner as required by law.
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DOCSSF\35478v4\22925.0006
[FORM OF ASSIGNMENT]
ASSIGNMENT
For value received the undersigned do(es) hereby sell, assign and transfer unto
the within mentioned Certificate and
hereby irrevocably constitute(s) and appoint(s)
attorney, to transfer the same on the Certificate register of the Trustee with full power of substitution
in the premises.
Dated:
Note: The signature(s) to this Assignment
must correspond with the name(s) as written
on the face of the within Certificate in every
particular, without alteration or enlargement or
any change whatsoever.
Signature Guaranteed:
Note: Signature(s)must be guaranteed by an
eligible guarantor institution.
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Table of Contents
(continued)
Page
ARTICLE V
INSTALLMENT PAYMENTS
Section 5.1. Pledge and Deposit of Installment Payments.............................................................. 14
Section 5.2. Certificate Payment Fund........................................................................................... 15
Section 5.3. Investment of Moneys in Special Funds..................................................................... 16
Section5.4. Reserve Fund.............................................................................................................. 16
Section 5.5. Pledge of Moneys in Funds......................................................................................... 17
Section5.6. Rebate Fund....................................................... ...................................................... 17
Section 5.7. Payments under the Bond Insurance Policy................................................................ 19
ARTICLE VI
COVENANTS
Section 6.1. Corporation and District to Perform Under Installment Purchase Agreement........... 19
Section 6.2. Budgets................................................................................ .... 19
...................................
Section 6.3. Tax Covenants............................................................................................................ 19
Section 6.4. Accounting Records and Reports................................................................................20
Section 6.5. Compliance with Trust Agreement.............................................................................20
Section 6.6. Observance of Laws and Regulations.........................................................................20
Section 6.7. Compliance with Contracts.........................................................................................21
Section 6.8. Prosecution and Defense of Suits ...............................................................................21
Section 6.9. Recordation and Filing................................................................................................21
Section6.10. Eminent Domain.........................................................................................................22
Section 6.11. Further Assurances .....................................................................................................22
Section 6.12. Continuing Disclosure................................................................................................22
ARTICLE VII
DEFAULT AND LIMITATION OF LIABILITY
Section 7.1. Notice of Non-Payment..............................................................................................22
Section 7.2. Action on Default or Termination...............................................................................22
Section 7.3. Other Remedies of the Trustee ...................................................................................23
Section 7.4. Non-Waiver................................................................................................................
23
Section 7.5. Remedies Not Exclusive.............................................................................................23
Section 7.6. No Obligation by the District to Owners....................................................................23
Section 7.7. Trustee Appointed Agent for Certificate-owners: Direction of Proceedings ............23
Section 7.8. Power of Trustee to Control Proceedings...................................................................24
Section 7.9. Limitation on Certificate-owners' Right to Sue..........................................................24
Section 7.10. No Obligation with Respect to Performance by Trustee............................................25
Section 7.11. No Liability to Owners for Payment...........................................................................25
Section 7.12. No Responsibility for Sufficiency..............................................................................25
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Table of Contents
(continued) .
Page
Section 7.13. Indemnification of Trustee..........................................................................................25
ARTICLE VIII
THE TRUSTEE
Section 8.1. Employment of Trustee...............................................................................................25
Section 8.2. Acceptance of Employment........................................................................................26
Section 8.3. Trustee: Duties, Removal and Resignation................................................................26
Section 8.4. Compensation of the Trustee......................................................................................26
Section 8.5. Protection of the Trustee.............................................................................................26
Section 8.6. Merger or Consolidation.............................................................................................28
ARTICLE IX
AMENDMENT OF TRUST AGREEMENT
Section 9.1. Amendments Permitted...............................................................................................28
Section 9.2. Endorsement or Replacement of Certificates After Amendment or Supplement.......29
Section 9.3. Amendment of Particular Certificates ........................................................................29
ARTICLE X
DEFEASANCE
Section 10.1. Discharge of Trust Agreement..................
Section 10.2. Deposit of Money or Securities with Trustee.............................................................30
Section 10.3. Unclaimed Moneys.....................................................................................................31
ARTICLE XI
MISCELLANEOUS
Section 11.1. Benefits of Trust Agreement Limited to Parties.........................................................31
Section 11.2. Successor Deemed Included in all References to Predecessor...................................31
Section 11.3. Execution of Documents by Owners..........................................................................31
Section 11.4. Disqualified Certificates.............................................................................................32
Section 11.5. Waiver of Personal Liability.......................................................................................32
Section 11.6. Acquisition of Certificates by the District; Destruction of Certificates......................32
Section11.7. Headings .....................................................................................................................32
Section 11.8. Funds and Accounts....................................................................................................32
Section 11.9. Partial Invalidity ...........
Section 11.10. California Law............................................................
Section11.11. Notices........................................................................................................................33
Section 11.12. Execution in Counterparts............................................................ .......33
DOCS S F135478v4\22925.0006
Table of Contents T
Page
ARTICLE I
DEFINITIONS; RULES OF CONSTRUCTION; CONTENTS OF CERTIFICATES AND
OPINIONS; RECITALS
SectionI.I. Definitions .................................................................................................................... I
Section 1.2. Rules of Construction...................................................................................................5
Section 1.3. Content of Statements and Opinions.............................................................................5
Section1.4. Recitals..........................................................................................................................6
ARTICLE II
CERTIFICATES; TERMS AND PROVISIONS
Section 2.1. Preparation of Certificates............................................................................................7
Section 2.2. Denominations; Medium and Place of Payment; Dating..............................................7
Section 2.3. Payment of Principal and Interest with Respect to Certificates....................................8
Section 2.4. Form of Certificates......................................................................................................8
Section2.5. Execution......................................................................................................................8
Section 2.6. Transfer of Certificates.................................................................................................8
Section 2.7. Exchange of Certificates...............................................................................................9
Section 2.8. Certificate Registration Books......................................................................................9
Section 2.9. Certificates Mutilated, Lost, Destroyed or Stolen........................................................9
Section 2.10. Book-Entry System..................................................................................................... 10
ARTICLE III
DELIVERY OF CERTIFICATES; DELIVERY COST FUND
Section 3.1. Delivery of Certificates............................................................................................... 12
Section 3.2. Application of Proceeds of Certificates and Certain Other Moneys........................... 12
Section 3.3. Validity of Certificates................................................................................................ 13
Section 3.4. Delivery Cost Fund..................................................................................................... 13
ARTICLE IV
PREPAYMENT OF CERTIFICATES `
Section4.1. Terms of Prepayment.................................................................................................. 13
Section 4.2. Selection of Certificates for Prepayment.................................................................... 13
Section 4.3. Notice of Prepayment................................................................................................. 13
Section 4.4. Partial Prepayment of Certificate................................................................................ 14
Section 4.5. Effect of Prepayment.................................................................................................. 14
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DOCSSF\35478v4\22925.0006
IN WITNESS WHEREOF, this Certificate has been executed by the manual signature of an
authorized signatory of the Trustee, all as of the date set forth below.
Execution date: BNY WESTERN TRUST COMPANY,
as Trustee
By:
Authorized Signatory
[FORM OF STATEMENT OF INSURANCE]
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DOCSSF\35478v4\22925.0006
Installment Payments and which are secured by a pledge of and lien on the Revenues in accordance
with the Installment Purchase Agreement.
The Certificates are authorized to be executed and delivered in the form of fully registered
Certificates in the denomination of $5,000 each or any integral multiple thereof; provided that no
Certificate shall have principal represented thereby maturing in more than one year. Subject to the
limitations and conditions and upon payment of the taxes and governmental charges provided in the
Trust Agreement, Certificates may be exchanged for a like aggregate principal amount of Certificates
of the same Certificate Payment Date of other authorized denominations at the Principal Corporate
Trust Office of the Trustee.
This Certificate is transferable by the Registered Owner hereof, in person or by such person's
duly authorized attorney, but only in the manner, subject to the limitations and conditions and upon
payment of the taxes and governmental charges provided in the Trust Agreement, and upon surrender
of this Certificate for cancellation at the Principal Corporate Trust Office of the Trustee,
accompanied by delivery of a duly executed written instrument of transfer, in a form approved by the
Trustee. Upon such transfer a new Certificate or Certificates of the same Certificate Payment Date
and of authorized denomination or denominations, for a like aggregate principal amount will be
delivered to the transferee in exchange herefor.
The Trustee may treat the Registered Owner hereof as the absolute owner hereof for all
purposes, and the Trustee shall not be affected by any notice to the contrary.
The Trustee shall not be required to register the transfer or exchange of any Certificate
(i)within 15 days preceding selection of Certificates for prepayment or(ii) selected for prepayment.
The Certificates are subject to prepayment prior to their respective stated maturities, as a
whole or in part on any date in the order of maturity as directed by the District in a written request to
the Trustee and by lot within each maturity in integral multiples of$5,000, from prepaid Installment
Payments made by the District from Net Proceeds (as defined in the Installment Purchase
Agreement), under the circumstances and upon the terms prescribed in the Trust Agreement and the
Installment Purchase Agreement, at a prepayment price equal to the principal amount thereof plus
accrued interest evidenced and represented thereby to the date fixed for prepayment, without
premium.
As provided in the Trust Agreement, notice of prepayment hereof shall be mailed, first class
postage prepaid, not less than 30 days nor more than 60 days prior to the prepayment date, to the
Registered Owner of this Certificate at the address thereof appearing on the Certificate registration
books. If this Certificate is called for prepayment and payment is duly provided therefor as specified
in the Trust Agreement, interest represented hereby shall cease to accrue from and after the date fixed
for prepayment. Any defect in the notice or the mailing thereof will not affect the validity of the
prepayment of this Certificate.
To the extent and in the manner permitted by the terms of the Trust Agreement and the
Installment Purchase Agreement, as the case may be, the Trust Agreement and the rights and
obligations of the District and of the registered owners of the Certificates and of the Trustee or the
Installment Purchase Agreement and the rights and obligations of the Corporation and the District
and the registered owners of the Certificates and the Trustee, respectively, may be modified or
amended with the written consents of the registered owners of a majority in aggregate principal
DOCSSF\35478v4\22925.0006
EXHIBIT A
[FORM OF CERTIFICATE OF PARTICIPATION]
TRUCKEE-DONNER PUBLIC UTILITY DISTRICT
REVENUE CERTIFICATE OF PARTICIPATION, SERIES 2003A [TAXABLE SERIES 2003B]
Evidencing an Interest of the Owner Hereof
in Installment Payments to be Made by the
TRUCKEE-DONNER PUBLIC UTILITY DISTRICT
CERTIFICATE
INTEREST RATE PAYMENT DATE DATED CUSIP
% 52003
REGISTERED OWNER:
PRINCIPAL AMOUNT: AND NO/100 DOLLARS
THIS IS TO CERTIFY that the Registered Owner (specified above) of this Certificate of
Participation (herein called the "Certificate") is the owner of an undivided interest in the right to
receive certain Installment Payments (as that term is defined in the Trust Agreement hereinafter
mentioned) under that certain Installment Purchase Agreement (the "Installment Purchase
Agreement"), dated as of March 1, 2003, by and between Truckee-Donner Public Utility District
Financing Corporation (the "Corporation") and the Truckee-Donner Public Utility District (the
"District"). The Installment Payments to be made thereunder have been assigned to BNY Western
Trust Company, as trustee (the "Trustee"), having a corporate trust office in Los Angeles, California.
The Trustee has executed and delivered$ aggregate principal amount of Certificates.
The Registered Owner of this Certificate is entitled to receive, subject to the terms of the
Installment Purchase Agreement and the Trust Agreement, dated as of March 1, 2003, by and among
the Trustee, the Corporation and the District (the "Trust Agreement") on the Certificate Payment
Date (specified above) the Principal Amount (specified above) representing a portion of the
Installment Payments designated as principal coming due on the Certificate Payment Date, and to
receive an interest component on such principal component at the interest rate per annum specified
above, from the Interest Payment Date (as hereinafter defined)preceding the date of execution hereof
by the Trustee, unless such date of execution is after a Record Date (as hereinafter defined)and on or
before the succeeding Interest Payment Date, in which case interest shall be payable from such
Interest Payment Date, or unless such date of execution is on or before the first Record Date, in
which case interest shall be payable from , 2003; provided, however, that if, as shown
by the records of the Trustee, interest represented by this Certificate is in default, Certificates
executed in exchange for this Certificate surrendered for transfer or exchange shall represent interest
from the last date to which interest has been paid in full or duly provided for with respect to this
Certificate, or, if no interest has been paid or duly provided for with respect to this Certificate, from
, 2003.
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DOCS SF\35478v4\22925.0006
such records with respect to all such funds shall at all times be maintained in accordance with sound
industry practices and with due regard for the protection of the security of the'Certificates and the
rights of every Owner thereof.
Section 11.9. Partial Invalidity. If any one or more of the agreements, conditions,
covenants or terms required herein to be observed or performed by or on the part of the District, the
Corporation or the Trustee shall be contrary to law, then such agreement or agreements, such
condition or conditions, such covenant or covenants or such term or terms shall be null and void and
shall be deemed separable from the remaining agreements, conditions, covenants and terms hereof
and shall in no way affect the validity hereof or of the Certificates, and the Owners shall retain all the
benefit,protection and security afforded to them under any applicable provisions of law. The District,
the Corporation and the Trustee hereby declare that they would have executed this Agreement, and
each and every other article, section, paragraph, subdivision, sentence, clause and phrase hereof and
would have authorized the execution and delivery of the Certificates pursuant hereto 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 circumstances may be held to be
unconstitutional,unenforceable or invalid.
Section 11.10. California Law. THIS AGREEMENT SHALL BE CONSTRUED AND
GOVERNED IN ACCORDANCE WITH THE LAWS OF THE STATE.
Section 11.11. Notices. All written notices to be given under this Agreement to the parties
hereto shall be given by mail or personal delivery to the party entitled thereto at its address set forth
below, or at such address as the party may provide to the other parties in writing from time to time.
If to the District: Truckee-Donner Public Utility District
11570 Donner Pass Road
Truckee, CA 96160
Attention: General Manager
If to the Corporation: Truckee-Donner Public Utility District Financing Corporation
c/o Truckee-Donner Public Utility District
11570 Donner Pass Road
Truckee, CA 96160
Attention: President
If to the Trustee: BNY Western Trust Company
700 South Flower Street, Suite 200
Los Angeles, CA 90017-4104
Attention: Corporate Trust
If to the Bond Insurer:
Section 11.12. Execution in Counterparts. This 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.
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Certificates to be paid or prepaid, as such amounts become due, plus premium, if any, provided that,
in the case of Certificates which are to be prepaid prior to the maturity thereof, notice of such
prepayment shall have been given as in Article IV provided or provision satisfactory to the Trustee
shall have been made for the giving of such notice;
provided, in each case, that the Trustee shall have been irrevocably instructed (by the terms of this
Agreement and the Installment Purchase Agreement or by Written Request of the District) to apply
such money or securities to the payment of such principal or Prepayment Price and interest
represented by such Certificates.
Section 10.3. Unclaimed Moneys. Anything contained herein to the contrary
notwithstanding, any moneys held by the Trustee in trust for the payment and discharge of the
interest, principal or Prepayment Price represented by any of the Certificates which remain
unclaimed for two years after the date of deposit of such moneys if deposited with the Trustee after
the date when the interest, principal or Prepayment Price represented by such Certificates have
become payable, shall at the Written Request of the District be repaid by the Trustee to the District as
its absolute property free from trust, and the Trustee shall thereupon be released and discharged with
respect thereto and the Owners shall look only to the District for the payment of the interest and
principal or Prepayment Price represented by much Certificates; provided, however, that before
being required to make any such payment to the District, the Trustee shall, at the written request and
expense of the District, first mail a notice to the owners of the Certificates so payable that such
moneys remain unclaimed and that after a date named in such notice, which date shall not be less
than thirty (30) days after the date of the mailing of such notice, the balance of such moneys then
unclaimed will be returned to the District.
ARTICLE XI
MISCELLANEOUS
Section 11.1. Benefits of Trust Agreement Limited to Parties. Nothing contained herein,
expressed or implied, is intended to give to any person other than the District, the Trustee, the
Corporation and the Owners any claim,remedy or right under or pursuant hereto, and any agreement,
condition, covenant or term required herein to be observed or performed by or on behalf of the
District shall be for the sole and exclusive benefit of the Trustee,the Corporation and the Owners.
Section 11.2. Successor Deemed Included in all References to Predecessor. Whenever
either the District, the Corporation or the Trustee or any officer thereof 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, the Corporation or the Trustee or such officer, and all
agreements, conditions, covenants and terms required hereby to be observed or performed by or on
behalf of the District, the Corporation or the Trustee or any officer thereof shall bind and inure to the
benefit of the respective successors thereof whether so expressed or not.
Section 11.3. Execution of Documents by Owners. Any declaration, request or other
instrument which is permitted or required herein to be executed by Owners may be in one or inore
instruments of similar tenor and may be executed by Owners in person or by their attorneys
appointed in writing. The fact and date of the execution by any Owner or such Owner's attorney of
any declaration, request or other instrument or of any writing appointing such attorney may be
proved by the certificate of any notary public or other officer authorized to take acknowledgments of
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DOCSSF\35478v4\22925.0006
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 Certificate so
affected, or (2) reduce the aforesaid percentage of Owners of Certificates whose consent is required
for the execution of any amendment or modification of this Agreement, or (3) modify any of the
rights or obligations of the Trustee or the Corporation without its written consent thereto.
(b) This Agreement and the rights and obligations of the Corporation and the
District and of the Owners of the Certificates may also be modified or amended at any time by an
amendment hereto which shall become binding upon adoption, without the consent of the Owners of
any Certificates, but only to the extent permitted by law and only for any one or more of the
following purposes—
(i) to add to the covenants and agreements of the Corporation or the
District contained in this 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 adversely affect the interests of the Owners of the Certificates;
(ii) to cure, correct or supplement any ambiguous or defective provision
contained in this Agreement or in regard to questions arising under this Agreement, as the
Corporation or the District may deem necessary or desirable and which shall not adversely affect the
interests of the Owners of the Certificates; and
(iii) to make such other amendments or modifications as may be in the
best interests of the Owners of the Certificates.
The Trustee shall promptly upon execution and delivery of any amendment pursuant to
clause (b) above send by first class mail a copy of such amendment to the Bond Insurer.
Section 9.2. Endorsement or Replacement of Certificates After Amendment or
Supplement. After the effective date of any action taken as hereinabove provided, the Trustee may
determine that the Certificates may bear a notation by endorsement in form approved by the Trustee
as to such action, and in that case upon demand of the Trustee to the Owner of any Outstanding
Certificate and presentation of such Owner's Certificate for such purpose at the principal corporate
trust office of the Trustee a suitable notation as to such action shall be made on such Certificate. If
the Trustee shall so determine, new Certificates so modified as in the opinion of the Trustee shall be
necessary to conform to such action shall be prepared, and in that case upon demand of the Trustee to
the Owner of any Outstanding Certificates such new Certificates shall be exchanged at the principal
corporate trust office of the Trustee without cost to each Owner for Certificates then Outstanding
upon surrender of such Outstanding Certificates.
Section 9.3. Amendment of Particular Certificates. The provisions of this article shall not
prevent any Owner from accepting any amendments to the particular Certificates held by him or her,
provided that due notation thereof is made on such Certificates.
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been adopted, executed or delivered by the proper party or pursuant to any of the provisions of this
Agreement, and the Trustee shall be under no duty to make any investigation or inquiry as to any
statements contained or matters referred to in any such instrument, but may accept and rely upon the
same as conclusive evidence of the truth and accuracy of such statements. The Trustee shall not be
bound to recognize any person as an Owner of any Certificate or to take any action at the request of
any such person unless such Certificate shall be deposited with the Trustee or satisfactory evidence
of the ownership of such Certificate shall be furnished to the Trustee. The Trustee may consult with
counsel, who may be counsel to the Corporation or the District, with regard to legal questions, and
the opinion of such counsel shall be full and complete authorization and protection in respect of any
action taken or suffered by it hereunder in good faith in accordance therewith.
Whenever in the administration of its duties under this Agreement, the Trustee shall deem it
necessary or desirable that a matter be proved or established prior to taking or suffering any action
hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed)
shall be deemed to be conclusively proved and established by a certificate of the Corporation or the
District and such certificate shall be full warranty to the Trustee for any action taken or suffered
under the provisions of this Agreement upon the faith thereof, but in its discretion the Trustee may
(but shall have no duty), in lieu thereof, accept other evidence of such matter or may require such
additional evidence as to it may seem reasonable.
The Trustee may buy, sell, own, hold and deal in any of the Certificates provided pursuant to
this Agreement, and may join in any action which any Owner may be entitled to take with like effect
as if the Trustee were not a party to this Agreement. The Trustee, either as principal or agent, may
also engage in or be interested in any financial or other transaction with the District or the
Corporation, and may act as depository, trustee, or agent for any committee or body of Owners of
Certificates or of obligations of the Corporation or the District as freely as if it were not Trustee
hereunder.
The Trustee may, to the extent reasonably necessary, execute any of the trusts or powers
hereof and perform the duties required of it hereunder by or through attorneys, agents, or receivers,
and shall be entitled to advice of counsel concerning all matters of trust and its duties hereunder, and
the Trustee shall not be answerable for the default or misconduct of any such attorney, agent or
receiver selected by it with reasonable care. The Trustee shall not be answerable for the exercise of
any discretion or power under this Agreement or in the performance of its duties hereunder or for
anything whatever in connection with the funds and accounts established hereunder, except only for
its own willful misconduct or negligence.
The recitals, statements and representations by the District or the Corporation contained in
this Agreement or in the Certificates shall be taken and construed as made by and on the part of the
District or Corporation and not by the Trustee and the Trustee does not assume, and shall not have,
any responsibility or obligations for the correctness of any thereof.
The Trustee undertakes to perform such duties, and only such duties as are specifically set
forth in this Agreement and no implied duties or obligations shall be read into this Agreement against
the Trustee.
No provision in this Agreement shall require the Trustee to risk or expend its own funds or
otherwise incur any financial liability in the performance of any of its duties hereunder if it shall have
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DOC SSF\35478v4\22925.0006
Section 7.10. No Obligation with Respect to Performance by Trustee. Neither the District
nor the Corporation shall have any obligation or liability to any of the other parties hereto or to the
Owners of the Certificates with respect to the performance by the Trustee of any duty imposed upon
it under this Agreement.
Section 7.11. No Liability to Owners for Payment. The Corporation shall not have any
obligation or liability to the Owners of the Certificates with respect to the payment of the Installment
Payments by the District when due, or with respect to the performance by the District of any other
covenant made by it in the Installment Purchase Agreement or herein. Except as provided in this
Agreement, the Trustee shall not have any obligation or liability to the Owners of the Certificates
with respect to the payment of the Installment Payments by the District when due, or with respect to
the performance by the District of any other covenant made by it in the Installment Purchase
Agreement or herein.
Section 7.12. No Responsibility for Sufficiency_. The Trustee shall not be responsible for
the sufficiency of this Agreement, the Installment Purchase Agreement, or of the assignment made to
it by the Assignment Agreement of rights to receive Installment Payments pursuant to the Installment
Purchase Agreement, or the value of or title to the Project. The Trustee shall not be responsible or
liable for selection or liquidation of investments or any loss suffered in connection with any
investment of funds made by it under the terms of and in accordance with this Agreement.
Section 7.13. Indemnification of Trustee. The District shall indemnify the Trustee
(including all of its employees, officers and directors) and hold it harmless against any loss, liability,
expenses or advances, including but not limited to fees and expenses of counsel and other experts,
incurred or made without negligence or willful misconduct on the part of the Trustee, (i) in the
exercise and performance of any of the powers and duties hereunder or under the Installment
Purchase Agreement by the Trustee, (ii) relating to or arising out of the Project, or the conditions,
occupancy, use, possession, conduct or management of; or work done in or about, or from the
planning, design, acquisition, installation or construction of the Project or any part thereof, or (iii)
arising out of or relating to any untrue statement or alleged untrue statement of any material fact or
omission or alleged omission to state a material fact necessary to make the statements made, in light
of the circumstances under which they were made, not misleading in any official statement or other
offering circular utilized in connection with the sale of the Certificates, including the costs and
expenses of defending itself against any claim of liability arising under this Agreement. Such
indemnity shall survive payment of the Certificates and discharge of this Agreement or resignation or
removal of the Trustee.
ARTICLE VIII
THE TRUSTEE
Section 5.1. Employment of Trustee. In consideration of the recitals hereinabove set forth
and for other valuable consideration, the District hereby agrees to employ the Trustee to receive,
hold, invest and disburse the moneys received pursuant to the Installment Purchase Agreement for
credit to the various funds and accounts established by this Agreement; to execute, deliver and
transfer the Certificates; and to apply and disburse the Installment Payments received from the
District to the Owners of Certificates; and to perform certain other functions; all as herein provided
and subject to the terms and conditions of this Agreement. .w
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DOCSSF\35478v4\22925.0006
interest with respect thereto, with interest on the overdue Certificates at the rate or rates of interest or
yields-to-maturity applicable to the Certificates if paid in accordance with their terms.
Section 7.3. Other Remedies of the Trustee. The Trustee shall have the right with the
written consent of the Bond Insurer so long as the Bond Insurance Policy is in full force and effect, --
(a) by mandamus or other action or proceeding or suit at law or in equity to
enforce its rights against the District or any board member, officer or employee thereof, and to
compel the District or any such board member, officer or employee to perform or carry out its or his
duties under 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 Trustee; or
(c) by suit in equity upon the happening of any default hereunder to require the
District and its directors, officers and employees to account as the trustee of an express trust.
Section 7.4. Non-Waiver. A waiver of any default or breach of duty or contract by the
Trustee 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
Trustee to 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 Trustee by
law or by this article may be enforced and exercised from time to time and as often as shall be
deemed expedient by the Trustee.
If any action, proceeding or suit to enforce any right or to exercise any remedy is abandoned
or determined adversely to the Trustee, the Trustee and the District shall be restored to their former
positions, rights and remedies as if such action, proceeding or suit had not been brought or taken.
Section 7.5. Remedies Not Exclusive. No remedy herein conferred upon or reserved to
the Trustee 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 any law.
Section 7.6. No Obligation by the District to Owners. Except for.the payment of
Installment Payments when due in accordance with the Installment Purchase Agreement and the
performance of the other covenants and agreements of the District contained in said Installment
Purchase Agreement and herein, the District shall have no obligation or liability to the Owners of the
Certificates with respect to this Agreement or the execution, delivery or transfer of the Certificates,
or the disbursement of Installment Payments to the Owners by the Trustee; provided however that
nothing contained in this Section shall affect the rights, duties or obligations of the Trustee expressly
set forth herein.
Section 7.7. Trustee Appointed Agent for Certificateowners; Direction of Proceedings.
The Trustee is hereby appointed the agent and attorney of the Owners of all Certificates outstanding
hereunder for the purpose of filing any claims relating to the Certificates. The Owners of a majority
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DOCSSF\35478v4\22925.0006
Section 6.7. Compliance with Contracts. The District shall comply with the terms,
covenants and provisions, express or implied, of all contracts for the use of the Project by the
District, and all other contracts and agreements affecting or involving the Project to the extent that
the District is a party thereto.
Section 6.8. Prosecution and Defense of Suits. The District shall promptly, upon request
of the Trustee or any Certificate Owner, from time to time take such action as may be necessary or
proper to remedy or cure any defect in or cloud upon the title to the Electric System or any part
thereof, whether now existing or hereafter developing, shall prosecute all such suits, actions and
other proceedings as may be appropriate for such purpose and shall indemnify and save the Trustee
(including all of its employees, officers and directors), the Corporation and every Certificate Owner
harmless from all loss, cost, damage and expense, including attorneys' fees, which they or any of
them may incur by reason of any such defect, cloud, suit, action or proceeding.
The District shall defend against every suit, action or proceeding at any time brought against
the Trustee (including all of its employees, officers and directors), the Corporation or any Certificate
Owner upon any claim arising out of the receipt, application or disbursement of any of the
Installment Payments or involving the rights of the Trustee,the Corporation or any Certificate Owner
under this Agreement; provided that the Trustee, the Corporation or any Certificate Owner at such
parry's election may appear in and defend any such suit, action or proceeding. The District shall
indemnify and hold harmless the Trustee,the Corporation and the Certificate Owners against any and
all liability claimed or asserted by any person, arising out of such receipt, application or
disbursement, and shall indemnify and hold harmless the Certificate Owners against any attorneys'
fees or other expenses which any of them may incur in connection with any litigation (including pre-
litigation activities)to which any of them may become a parry by reason of ownership of Certificates.
The District shall promptly reimburse the Corporation or any Certificate Owner in the full amount of
any attorneys' fees or other expenses which the Corporation or such Owner may incur in litigation or
otherwise in order to enforce such partying rights under this Agreement or the Certificates, provided
that such litigation shall be concluded favorably to such parry's contentions therein.
Section 6.9. Recordation and Filing. The Trustee, upon written direction of the District,
shall record, register, file, renew, refile and re-record all such documents, including financing
statements, as may be required by law in order to maintain a security interest in this Agreement and
the Assignment Agreement, all in such manner, at such times and in such places as may be required
by, and to the extent permitted by, law in order fully to preserve, protect and perfect the security of
the Certificate Owners and the rights and security interests of the Trustee. The Trustee, upon written
direction of the District, shall (subject to Section 8.5 hereof) do whatever else may be necessary or be
reasonably required in order to perfect and continue the lien of this Agreement and the Assignment
Agreement.
Notwithstanding anything to the contrary above, the Trustee shall have no duty or liability
whatsoever to monitor or notify any party with respect to the timeliness, sufficiency or validity of
any such recording, re-recording, filing, filing of continuation statements and the like with respect to
this Agreement; it being expressly understood and agreed that the Trustee's duties under this Section
shall be exclusively limited to following the express written filing or recording instructions of the
District, from time to time with respect to the above described actions so long as the District shall
supply said recording or filing instruments.
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DOCSSF\35478v4\22925.0006
(b) Disposition of Unexpended Funds. Any funds remaining in the Rebate Fund
after prepayment and payment of the Series 2003A Certificates and the payments described in
Subsection(a) above being made may be withdrawn by the District and utilized in any manner by the
District.
(c) Survival of Defeasance. Notwithstanding anything in this Section to the
contrary, the obligation to comply with the requirements of this Section shall survive the defeasance
or payment in full of the Series 2003A Certificates.
Section 5.7. Payments under the Bond Insurance Policy. [TO COME]
ARTICLE VI
COVENANTS
Section 6.1. Corporation and District to Perform Under Installment Purchase Agreement.
The Corporation and District covenant and agree with the Owners of the Ce Lificates to perform all
obligations and duties imposed on them under the Installment Purchase Agreement and, together
with the Trustee, to enforce such Installment Purchase Agreement against the other party thereto in
accordance with its terms.
The Corporation and the District will in all respects promptly and faithfully keep, perform
and comply with all the terms, provisions, covenants, conditions and agreements of the Installment
Purchase Agreement to be kept,performed and complied with by it.
w
The Corporation and the District agree not to do or permit anything to be done, or omit or
refrain from doing anything, in any case where any such act done or permitted to be done, or any
such omission of or refraining from action, would or might be a ground for cancellation or
termination of the Installment Purchase Agreement.
Section 6.2. Budgets. On or prior to the fifteenth day of each Fiscal Year, the District
shall certify to the Trustee that the amounts budgeted for payment of Installment Payments are fully
adequate for the payment of all Installment Payments due under the Installment Purchase Agreement
for such Fiscal Year. If the amounts so budgeted are not adequate for the payment of Installment
Payments due under the Installment Purchase Agreement,the District will take such action as may be
necessary to cause such annual budget to be amended, corrected or augmented so as to include
therein the amounts required to be raised by the District in the then ensuing Fiscal Year for the
payment of Installment Payments due under the Installment Purchase Agreement and will notify the
Trustee of the proceedings then taken or proposed to be taken by the District.
Section 6.3. Tax Covenants. Notwithstanding any other provision of this Agreement,
absent an opinion of Special Counsel that the exclusion from gross income of interest with respect to
the Series 2003A Certificates will not be adversely affected for federal income tax purposes, the
District covenants to comply with all applicable requirements of the Code necessary to preserve such
exclusion from gross income and specifically covenants, without limiting the generality of the
foregoing, as follows:
(a) Private Activity. The District will not take or omit to take any action or make
any use of the proceeds of the Series 2003A Certificates or of any other moneys or property which
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deem appropriate, and in any event on or before each Payment Date in each year. In addition, the
Trustee shall, on the date all or any portion of the Certificates are discharged in accordance with
Section 10.2 hereof, value the Reserve Fund in accordance with this Section and withdraw the
excess, if any, on deposit in the Reserve Fund and transfer such amount to or in accordance with the
written direction of the District. Except for such withdrawals, all moneys in the Reserve Fund shall
be used and withdrawn by the Trustee solely for the purpose of paying principal, Prepayment Price
and interest with respect to the Certificates in the event that no other moneys of the District are
available therefor.
For the purpose of determining the amount in the Reserve Fund, all Permitted Investments
credited to the Reserve Fund shall be valued at the lower of cost (inclusive of all interest accrued but
not paid), or market value.
The District may substitute a municipal bond debt service reserve fund policy or a surety
bond or a letter of credit (a "Reserve Insurance Policy") for any Reserve Insurance Policy or money
held by the Trustee in the Reserve Fund; provided, that (i) in the case of a municipal bond debt
service reserve fund policy or a surety bond, bonds which are insured by the issuer thereof are rated
in the highest rating category by S&P and Moody's, or, in the case of a letter of credit,the unsecured
debt obligations of the issuing bank thereof are rated in the highest short-term rating category by
S&P and Moody's; (ii) the sum of the money and face amount of any Reserve Insurance Policy in
effect after such substitution will be equal to the Reserve Requirement; and (iii) in the case of the
substitution of a new Reserve Insurance Policy for money or an existing Reserve Insurance Policy,
the Trustee receives an opinion of Special Counsel to the effect that such substitution will not
adversely affect the exclusion from gross income for federal income tax purposes of interest with
respect to the Certificates.
Section 5.5. Pledge of Moneys in Funds. All amounts on deposit in the Delivery Cost
Fund, the Certificate Payment Fund and the Reserve Fund are hereby irrevocably pledged to the
Owners of the Certificates as provided herein. This pledge shall constitute a first and exclusive lien
on the Delivery Cost Fund, the Certificate Payment Fund and the Reserve Fund for the benefit of the
Owners of the Certificates in accordance with the terms hereof and of the Installment Purchase
Agreement.
Section 5.6. Rebate Fund.
(a) Establishment. The Trustee shall establish a separate fund for the Series
2003A Certificates designated the "Rebate Fund." Absent an opinion of Special Counsel that the
exclusion from gross income for federal income tax purposes of interest with respect to the Series
2003A Certificates will not be adversely affected, the District shall cause to be deposited in the
Rebate Fund such amounts as are required to be deposited therein pursuant to this Section and the
Tax Certificate. All money at any time deposited in the Rebate Fund shall be held by the Trustee in
trust for payment to the United States Treasury. All amounts on deposit in the Rebate Fund for the
Series 2003A Certificates shall be governed by this Section and the Tax Certificate for the Series
2003A Certificates, unless and to the extent that the District delivers to the Trustee an opinion of
Special Counsel that the exclusion from gross income for federal income tax purposes of interest
with respect to the Series 2003A Certificates will not be adversely affected if such requirements are
not satisfied. Notwithstanding anything to the contrary contained herein or in the Tax Certificate, the
Trustee (i) shall be deemed conclusively to have complied with the provisions thereof if it follows all
Written Requests of the District, and (ii) shall have no liability or responsibility to enforce
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thereof, and the Trustee shall deposit all Installment Payments as and when received in the
Certificate Payment Fund. All moneys at any time deposited in the Certificate Payment Fund shall be
held by the Trustee in trust for the benefit of the Owners from time to time of the Certificates, but
shall nevertheless be disbursed, allocated and applied solely for the uses and purposes herein set
forth.
Section 5.2. Certificate Payment Fund. There is hereby established with the Trustee
Certificate Payment Fund (with a Principal Account, an Interest Account and a Prepayment Account
therein) and the Reserve Fund (with a Series 2003A Reserve Account and a Taxable Series 2003B
Reserve Account therein) each of which the Trustee covenants to maintain and hold in trust separate
and apart from other funds held by it so long as any Installment Payments remain unpaid. All moneys
on deposit in the Certificate Payment Fund (including income or profit from investments) shall be
retained therein except as expressly provided herein.
The Trustee shall transfer from the Certificate Payment Fund the following amounts at the
times and in the manner hereinafter provided, and shall deposit such amounts in one or more of the
following respective funds, each of which the Trustee shall establish and maintain and hold in trust
separate and apart from other funds held by it, and each of which shall be disbursed and applied only
as hereinafter authorized. Such amounts shall be so transferred to and deposited in the following
respective funds in the following order of priority, the requirements of each such fund at the time of
deposit to be satisfied before any transfer is made to any fund subsequent in priority:
(a) Interest Account. The Trustee, on the last business day before each Interest
Payment Date (commencing on the last business day of June 2003), shall deposit in the Interest
Account an amount representing the portion of the Installment Payments designated as interest
coming due on the next succeeding January 1 or July 1, as the case may be. No deposit need be
made into the Interest Account so long as there shall be in such fund moneys sufficient to pay the
interest portion of Certificates then Outstanding due, if any, on the next January 1 or July 1, as the
case may be.
Except as hereinafter provided, moneys in the Interest Account shall be used and
withdrawn by the Trustee solely for the purpose of paying the interest with respect to the Certificates
when due and payable (including accrued interest on any Certificates prepaid prior to maturity
pursuant to this Agreement).
(b) Principal Account. The Trustee, on the last business day before each
January 1 (commencing on the last business day of December 2003), shall deposit in the Principal
Account an amount equal to the principal coming due with respect to the Certificates on the next
succeeding January 1. No deposit need be made into the Principal Account so long as there shall be
in such fund moneys sufficient to pay the portion of all Certificates then Outstanding designated as
principal, and coming due on the next succeeding January 1.
Except as hereinafter provided, moneys in the Principal Account shall be used and
withdrawn by the Trustee solely for the purpose of paying the principal with respect to the
Certificates when due and payable.
(c) Prepayment Account. Moneys to be used for prepayment pursuant to Section
4.1 hereof and paid by the District pursuant to Section 7.1 of the Installment Purchase Agreement ..
shall be transferred by the Trustee from the Certificate Payment Fund and deposited in the
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Fund and shall transfer the remaining proceeds, being $26,000,000, to the District for payment of the
Settlement Obligation.
Section 3.3. Validity of Certificates. The validity of the execution and delivery of the
Certificates is not dependent on and shall not be affected in any way by any proceedings taken by the
District, the Corporation or the Trustee with respect to or in connection with the Installment Purchase
Agreement. The recital contained in the Certificates that all acts, conditions and things required by
the Constitution and statutes of the State of California and this Agreement to exist, to have happened
and to have been performed precedent to and in the delivery thereof do exist, have happened and
have been performed in due time, form and manner as required by law shall be conclusive evidence
of their validity and of compliance with the provisions of law in their delivery.
Section 3.4. Delivery Cost Fund. There is hereby established with the Trustee the
Delivery Cost Fund which the Trustee shall establish and maintain and hold in trust separate and
apart from other funds held by it. The moneys in the Delivery Cost Fund shall be used and withdrawn
by the Trustee to pay Delivery Costs upon submission of Written Requisitions of the District stating
the person to whom payment is to be made, the amount to be paid, the purpose for which the
obligation was incurred, that such payment is a proper charge against said fund and that payment for
such charge has not previously been made. On September 1, 2003, or upon the earlier Written
Request of the District, all amounts remaining in the Delivery Cost Fund shall be transferred by the
Trustee to the District for deposit in the Certificate Payment Fund.
ARTICLE IV
PREPAYMENT OF CERTIFICATES
Section 4.1. Terms of Prepayment. The Certificates shall be subject to extraordinary
prepayment prior to their respective stated maturities, as a whole or in part on any date in the order of
maturity as directed by the District in a Written Request provided to the Trustee at least 60 days prior
to such date and by lot within each maturity in integral multiples of$5,000 from prepaid Installment
Payments made by the District from Net Proceeds,upon the terms and conditions of, and as provided
for in, Section 6.10 of this Agreement, and Sections 6.9 and 6.15 of the Installment Purchase
Agreement, at a Prepayment Price equal to the principal amount thereof plus accrued interest
evidenced and represented thereby to the date fixed for prepayment,without premium.
Section 4.2. Selection of Certificates for Prepay. Whenever less than all of the
Certificates are called for prepayment, the Trustee shall.select the Certificates or portions thereof to
be prepaid from the Outstanding Certificates in accordance with Section 4.1 hereof. The Trustee shall
promptly notify the District in writing of the numbers of the Certificates or portions thereof so
selected for prepayment.
Section 4.3. Notice of Prepayment. Notice of prepayment shall be mailed, first class
postage prepaid, to the respective Owners of any Certificates designated for prepayment at their
addresses appearing on the Certificate registration books and to the Information Services and by
registered or certified or overnight mail to the Securities Depositories at least 30 days but not more
than 60 days prior to the prepayment date.
Each notice of prepayment shall state the date of notice, the prepayment date, the place or �
places of prepayment and the Prepayment Price, shall designate the maturities, CUSIP numbers, if
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DOCSSF\35478v4\22925.0006
to persons having interests in such book-entry Certificates other than the Owners, as shown on the
Certificate registration books. By executing a Letter of Representations, the Trustee shall agree to
take all action necessary at all times so that the District will be in compliance with all representations
of the District in such Letter of Representations. In addition to the execution and delivery of a Letter
of Representations, the District and the Trustee shall take such other actions, not inconsistent with
this Trust Agreement, as are reasonably necessary to qualify Book-Entry Certificates for the
Depository's book-entry program.
(c) Selection of Depository. In the event (i) the Depository determines not to
continue to act as securities depository for book-entry Certificates, or(ii) the District determines that
continuation of the book-entry system is not in the best interest of the beneficial owners of the
Certificates or the District, then the District will discontinue the book-entry system with the
Depository. If the District determines to replace the Depository with another qualified securities
depository, the District shall prepare or direct the preparation of a new single, separate, fully
registered Certificate for each of the maturity dates of such book-entry Certificates, registered in the
name of such successor or substitute qualified securities depository or its Nominee as provided in
subsection(e) hereof. If the District fails to identify another qualified securities depository to replace
the Depository, then the Certificates shall no longer be restricted to being registered in such
Certificate register in the name of the Nominee, but shall be registered in whatever name or names
the Owners transferring or exchanging such Certificates shall designate, in accordance with the
provisions of Sections 2.6 and 2.7 hereof.
(d) Payments To Depository. Notwithstanding any other provision of this
Agreement to the contrary, so long as all Outstanding Certificates are held in book-entry form and
registered in the name of the Nominee, all payments with respect to principal, prepayment premium,
if any, and interest with respect to such Certificate and all notices with respect to such Certificate
shall be made and given, respectively to the Nominee, as provided in the Letter of Representations or
as otherwise instructed by the Depository and agreed to by the Trustee notwithstanding any
inconsistent provisions herein.
(e) Transfer of Certificates to Substitute Depository.
(i) The Certificates shall be initially executed and delivered as provided
in Section 2.1 hereof. Registered ownership of such Certificates, or any portions thereof, may not
thereafter be transferred except:
(1) to any successor of DTC or its nominee, or of any substitute
depository designated pursuant to clause (B) of subsection (i) of this Section 2.10(e) ("Substitute
Depository"); provided that any successor of DTC or Substitute Depository shall be qualified under
any applicable laws to provide the service proposed to be provided by it;
(2) to any Substitute Depository, upon (1)the resignation of DTC
or its successor (or any Substitute Depository or its successor) from its functions as depository, or
(2) a determination by the District that DTC (or its successor) is no longer able to carry out its
functions as depository; provided that any such Substitute Depository shall be qualified under any
applicable laws to provide the services proposed to be provided by it; or
(3) to any person as provided below, upon (1) the resignation of
DTC or its successor(or any Substitute Depository or its successor) from its functions as depository,
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Section 2.7. Exchange of Certificates. Certificates may be exchanged at the Principal
Corporate Trust Office of the Trustee, for a like aggregate principal amount of Certificates of other
authorized denominations of the same maturity. The Trustee may charge a sum for each new
Certificate executed and delivered upon any exchange except in the case of any exchange of
temporary Certificates for definitive Certificates. The Trustee may require the payment by the Owner
requesting such exchange of any tax or other governmental charge required to be paid with respect to
such exchange. Following any exchange of Certificates the Trustee shall cancel and destroy the
Certificates it has received.
The Trustee shall not be required to register the exchange, or transfer pursuant to Section 2.6
hereof, of any Certificate (i) within 15 days preceding selection of Certificates for prepayment or(ii)
selected for prepayment.
Section 2.8. Certificate Registration Books. The Trustee will keep or cause to be kept, at
the office of the Trustee in San Francisco, California, sufficient books for the registration and transfer
of the Certificates, which shall upon reasonable prior notice and at all reasonable times be open to
inspection by the Corporation or the District; and, upon presentation for such purpose, the Trustee
shall, under such reasonable regulations as it may prescribe, register or transfer or cause to be
registered or transferred, on said books, Certificates as hereinbefore provided.
The person in whose name any Certificate shall be registered shall be deemed the Owner
thereof for all purposes hereof, and payment of or on account of the interest with respect to and
principal of and Prepayment Price represented by such Certificate shall be made only to or upon the
order in writing of such registered Owner, which payments shall be valid and effectual to satisfy and
discharge liability upon such Certificate to the extent of the sum or sums so paid.
Section 2.9. Certificates Mutilated, Lost, Destroved or Stolen. If any Certificate shall
become mutilated, the Trustee shall execute and deliver a new Certificate of like series, tenor,
maturity and principal amount in exchange and substitution for the Certificate so mutilated, but only
upon surrender to the Trustee of the Certificate so mutilated.
Every mutilated Certificate so surrendered to the Trustee shall be canceled by it and
destroyed. If any Certificate shall be lost, destroyed or stolen, evidence of such loss, destruction or
theft may be submitted to the Trustee, and, if such evidence is satisfactory to the Trustee and
indemnity satisfactory to the Trustee shall be given indemnifying the Trustee, the Corporation and
the District, the Trustee, at the expense of the Certificate Owner, shall execute and deliver a new
Certificate of like series, tenor and maturity, and numbered as the Trustee shall determine, in lieu of
and in substitution for the Certificate so lost, destroyed or stolen. The Trustee may require payment
of a sum not exceeding the actual cost of preparing each new Certificate executed under this Section
and of the expenses which may be incurred by the Trustee under this Section. Any Certificate
executed under the provisions of this Section in lieu of any Certificate alleged to be lost, destroyed or
stolen shall be equally and proportionately entitled to the benefits of this Agreement with all other
Certificates secured by this Agreement. The Trustee shall not be required to treat both the original
Certificate and any replacement Certificate as being Outstanding for the purpose of determining the
principal amount of Certificates which may be executed hereunder or for the purpose of determining
any percentage of Certificates Outstanding hereunder, but both the original and replacement
Certificate shall be treated as one and the same. Notwithstanding any other provision of this Section,
in lieu of delivering a new Certificate for a Certificate which has been mutilated, lost, destroyed or
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DOCSSF\35478v4122925.0006
ARTICLE II
CERTIFICATES; TERMS AND PROVISIONS
Section 2.1. Preparation of Certificates. The Trustee is hereby authorized to execute
certificates of participation, to be denominated "Revenue Certificates of Participation, Series 2003A"
in an aggregate principal amount of$ and "Revenue Certificates of Participation, Taxable
Series 2003B" in an aggregate principal amount of $ evidencing undivided interests in
Installment Payments to be paid by the District under the Installment Purchase Agreement.
Section 2.2. Denominations; Medium and Place of Payment; Dating. The Certificates
shall be delivered in the form of fully registered Certificates, in the denomination of$5,000 each or
any integral multiple thereof; provided that no Certificate shall have principal represented thereby
maturing in more than one year.
The principal and Prepayment Price with respect to the Certificates shall be payable in lawful
money of the United States of America upon presentation and surrender thereof at the Principal
Corporate Trust Office of the Trustee. Interest with respect to the Certificates shall be payable by
check or draft of the Trustee mailed by first class mail on each Payment Date of such Certificates to
the respective Certificate Owners of record thereof as of the close of business on the Record Date at
the addresses shown on the books required to be kept pursuant to Section 2.8 or, upon the written
request received by the Trustee of an Owner of at least $1,000,000 in aggregate principal amount of
Certificates, by wire transfer of immediately available funds to an account in the United States
designated by such Owner prior to the applicable Record Date.
The Certificates shall be dated their date of delivery. Interest with respect to the Certificates
shall be payable from the Payment Date preceding their date of execution, unless such date shall be
after a Record Date and on or before the succeeding Payment Date, in which case interest shall be
payable from such Payment Date or unless such date shall be on or before the first Record Date, in
which case interest shall be payable from , 2003, provided, however, that if, as shown
by the records of the Trustee, interest represented by the Certificates shall be in default, Certificates
executed in exchange for Certificates surrendered for transfer or exchange shall represent interest
from the last date to which interest has been paid in full or duly provided for with respect to the
Certificates, or, if no interest has been paid or duly provided for with respect to the Certificates, from
, 2003. Interest represented by the Certificates shall be calculated on the basis of a 360-day
year of twelve 30-day months.
DOCS SF\35478v4\22925.0006
Special Counsel. The term "Special Counsel" means any attorney at law or firm of attorneys
selected by the District, of nationally-recognized standing in matters pertaining to the federal tax
exemption of interest on bonds issued by states and political subdivisions, and duly admitted to
practice law before the highest court of any state of the United States of America.
State. The term"State"means the State of California.
Statement of the Corporation or District. The term"Statement of the Corporation or District"
means a statement signed by or on behalf of(i) the Corporation by its President or a Vice President
or (ii) the District by the President and by the Secretary or by any two persons (whether or not
members of the Board of Directors) who are specifically authorized by resolution of the District to
sign or execute such a document on its behalf. If and to the extent required by the provisions of
Section 1.3, each Statement of the Corporation or District shall include the statements provided for in
Section 1.3.
Tax Certificate. The Term "Tax Certificate" means the Tax Certificate dated March_,
2003, concerning certain matters pertaining to the use and investment of proceeds of the Certificates
executed by and delivered to the District on the date of execution and delivery of the Certificates,
including any and all exhibits attached thereto.
Taxable Series 2003B Reserve Account. The term "Taxable Series 2003B Reserve Account"
means the account within the Reserve Fund by that name established in Section 5.2 hereof.
Trustee. The term "Trustee" means BNY Western Trust Company, a state banking
corporation duly organized and existing under and by virtue of the laws of the State of California .....
having a principal corporate trust office in San Francisco, California, or such other office as the
Trustee may from time to time designate in writing to the District, the Corporation and the Owners,
or its successor as Trustee hereunder.
Written Consent of the Corporation or District Written Order of the Corporation or District.
Written Request of the Corporation or District, Written Requisition of the Corporation or District.
The terms "Written Consent of the Corporation or District," "Written Order of the Corporation or
District," "Written Request of the Corporation or District," and "Written Requisition of the
Corporation or District"mean, respectively, a written consent, order, request or requisition signed by
or on behalf of (i) the Corporation by its President or a Vice President or (ii) the District by the
President or General Manager or by the Secretary or by any two persons (whether or not members of
the Board of Directors) who are specifically authorized by resolution of the District to sign or
execute such a document on its behalf.
Section 1.2. Rules of Construction. Words of any gender shall be deemed and construed
to include all genders, and words importing persons shall include corporations and associations,
including public bodies, as well as natural persons. Unless the context otherwise indicates, words
importing the singular number shall include the plural number and vice versa.
Section 1.3. Content of Statements and Opinions. Every statement or opinion with respect
to compliance with a condition or covenant provided for in this Agreement, including each Statement
of the Corporation or the District, shall include (a) a statement that the person or persons making or
giving such statement or opinion have read such covenant or condition and the definitions herein
relating thereto; (b) a brief statement as to the nature and scope of the examination or investigation
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DOCSSF\35478v4122925.0006
Outstandiniz. The term "Outstanding," when used as of any particular time with reference to
Certificates, means (subject to the provisions of Section 11.4) all Certificates except: (1) Certificates '
canceled by the Trustee or delivered to the Trustee for cancellation; (2) Certificates paid or deemed
to have been paid within the meaning of Section 10.1; and (3) Certificates in lieu of or in substitution
for which other Certificates shall have been executed and delivered by the Trustee pursuant to
Section 2.10.
Owner. The term "Owner" or"Certificate Owner" or"Owner of Certificates" or any similar
term, when used with respect to the Certificates, means any person who shall be the registered owner
of any Outstanding Certificate.
Participants. The term "Participants" means those broker-dealers, banks and other financial
institutions from time to time for which the Depository holds book-entry certificates as securities
depository.
Payment Dates; Payment Date. The term "Payment Dates" means January 1 and July 1 in
each year commencing July 1, 2003 and any date on which the unpaid Installment Payments are
declared to be due and payable immediately and provided such declaration is not rescinded or
annulled, all in accordance with Section 8.1 of the Installment Purchase Agreement.
Permitted Investments. The term "Permitted Investments" means any of the following which
at the time of investment are legal investments under the laws of the State for the moneys proposed
to be invested therein:
(a) for all purposes, including but not limited to defeasance investments in refunding ,
escrow accounts: (1) cash (insured at all times by the Federal Deposit Insurance Corporation or
otherwise collateralized with obligations described in paragraph (2) below), or (2) direct obligations
of(including obligations issued or held in book entry form on the books of) the Department of the
Treasury of the United States of America; and
(b) for all purposes other than defeasance investments in refunding escrow accounts:
(1) obligations of any of the following federal agencies which obligations represent full faith and
credit of the United States of America, including the Export - Import Bank; Farmers Home
Administration; General Services Administration; U.S. Maritime Administration; Small Business
Administration; Government National Mortgage Association (GNMA); U.S. Department of Housing
& Urban Development (PHA's); and Federal Housing Administration; (2)bonds, notes or other
evidences of indebtedness rated "AAA" and "Aaa" by the applicable Rating Agency issued by the
Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation with
remaining maturities not exceeding three years; (3) U.S. dollar denominated deposit accounts,
certificates of deposit, federal funds and banker's acceptances with domestic commercial banks
(including the Trustee) which are either insured by the Federal Deposit Insurance Corporation or
have a rating on their short term certificates of deposit on the date of purchase of"A-1"or"A-1+"by
S&P and "P-1" by Moody's and maturing no more than 360 days after the date of purchase (ratings
on holding companies are not considered as the rating of the bank); (4) commercial paper which is
rated at the time of purchase in the single highest classification, "A-1+" by S&P and "P-1" by
Moody's and which matures not more than 270 days after the date of purchase; (5) investments in a
money market fund rated "AAAm" or"AAAm-G" or better by S&P, including such funds for which
the Trustee or an affiliate acts as investment advisor or provides other services; (6) pre-refunded
municipal obligations defined as follows: any bonds or other obligations of any state of the United
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DOCSSF\35478v4\22925.0006
L
TRUST AGREEMENT
THIS TRUST AGREEMENT, made and entered into as of March 1, 2003 (the
"Agreement"), by and among BNY Western Trust Company, as trustee (the "Trustee"), a state
banking corporation duly organized and existing under the laws of the State of California, and
TRUCKEE-DONNER PUBLIC UTILITY DISTRICT FINANCING CORPORATION, a nonprofit
public benefit corporation duly organized and existing under the laws of the State of California (the
"Corporation"), and TRUCKEE-DONNER PUBLIC UTILITY DISTRICT, a public utility district
duly organized and existing under the laws of the State of California (the"District");
WI TNESSE TH.-
In consideration of the mutual covenants herein contained and for other valuable
consideration, the parties hereto do hereby agree as follows:
ARTICLE I
DEFINITIONS; RULES OF CONSTRUCTION; CONTENTS OF
CERTIFICATES AND OPINIONS; RECITALS
Section 1.1. Definitions. Unless the context otherwise requires, the terms defined in this
section shall for all purposes hereof and of any amendment hereof or supplement hereto and of any
report or other document 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 used herein and not defined herein shall have the --
meanings ascribed thereto in the Installment Purchase Agreement:
Agreement. The term"Agreement"means this Trust Agreement, as originally executed or as
it may from time to time be amended or supplemented as provided for herein.
Assignment Agreement. The term "Assignment Agreement" means that certain Assignment
Agreement, by and between the Corporation and the Trustee, dated as of March 1, 2003 as originally
executed or as it may from time to time be amended or supplemented in accordance with its terms.
Bond Insurance Policy. The term `Bond Insurance Policy" means the municipal bond
insurance policy issued by the Bond Insurer insuring payment when due of the principal of and
interest with respect to the Certificates as provided therein.
Bond Insurer. The term"Bond Insurer"means
Certificate Payment Fund. The term "Certificate Payment Fund" means the fund by that
name established in Section 5.2 hereof.
Certificates. The term "Certificates" means the Series 2003A Certificates and the Taxable
Series 2003B Certificates.
Code. The term "Code" means the Internal Revenue Code of 1986, as amended, and the
United States Treasury Regulations in effect with respect thereto.
DOCSSF\35478v4\22925.0006
x
SAB&W LLP
Draft of 2/26/03
REVENUE CERTIFICATES OF PARTICIPATION, SERIES 2003
Evidencing the Interests of the Owners Thereof
in Installment Payments to be Made by the
TRUCKEE-DONNER PUBLIC UTILITY DISTRICT
Series 2003A Taxable Series 2003B
PURCHASE CONTRACT
32003
Board of Directors
Truckee-Donner Public Utility District
Truckee, California
Ladies and Gentlemen:
The undersigned, Bear, Stearns & Co. Inc. (the "Underwriter"), hereby offers to enter
into this Purchase Contract (the "Purchase Contract") with you, the Truckee-Donner Public
Utility District(the"District"), which upon the District's acceptance of this offer,will be binding
upon the District and the Underwriter. This offer is made subject to acceptance by you prior to
11:59 P.M., California time, on the date hereof. If this offer is not so accepted, this offer will be
subject to withdrawal by the Underwriter upon notice delivered to you at any time prior to
acceptance. Upon acceptance, this Purchase Contract shall be in full force and effect in
accordance with its terms and shall be binding upon the District and the Underwriter. All
capitalized terms used herein and not otherwise defined shall have the respective meanings
ascribed thereto in the Official Statement (as hereinafter defined).
1. Purchase, Sale and Delivery of the 2003 Certificates.
(a) Subject to the terms and conditions and in reliance upon the
representations, warranties and agreements set forth herein, the Underwriter hereby
agrees to purchase and the District agrees to cause the Trustee (as defined below) to
execute and deliver to the Underwriter all (but not less than all) of$ aggregate
principal amount of Truckee-Donner Public Utility District Revenue Certificates of
Participation, Series 2003A (the "2003A Certificates") and $ aggregate principal
LA1 480126v2
A Professional Corporation, 44 Montgomery Street, Suite 4200, San Francisco,
California 94104, or at such other place as shall have been mutually agreed upon by the
District and the Underwriter, the other documents mentioned herein. The Underwriter
will accept such delivery and pay the purchase price of the 2003 Certificates as set forth
in subparagraph (b) above in immediately available funds (such delivery and payment
being herein referred to as the "Closing") to the order of the Trustee in an amount equal
to the purchase price.
(d) The Underwriter agrees to make a bona fide public offering of the
2003 Certificates at the initial offering prices set forth in the Official Statement, which
prices may be changed from time to time by the Underwriter after such offering.
(e) The District will undertake pursuant to a Continuing Disclosure
Agreement, to provide certain annual financial information and operating data and
notices of the occurrence of certain events, if material. A description of this undertaking
is set forth in Preliminary Official Statement (as hereinafter defined) and will also be set
forth in the final Official Statement (as hereinafter defined).
2. Use and Preparation of Preliminary Official Statement.
The District hereby ratifies, confirms and approves of the use and distribution by the
Underwriter prior to the date hereof of the Preliminary Official Statement dated 92003
relating to the 2003 Certificates (which, including the cover page and all appendices thereto, is
referred to herein as the "Preliminary Official Statement"). The District has deemed final the
Preliminary Official Statement as of its date for purposes of Rule 15c2-12 promulgated under the
Securities Exchange Act of 1934 ("Rule 15c2-12"), except for information permitted to be
omitted therefrom by Rule 15c2-12. The District hereby acknowledges that the Preliminary
Official Statement has been made available to investors on the internet at the [Thomson
Prospectus] website. The District hereby agrees to cause to be delivered to the Underwriter,
within seven (7)business days of the date hereof, copies of the final Official Statement, dated the
date hereof(including any amendments or supplements to such Official Statement as have been
approved by the District and the Underwriter) (the "Official Statement"). The District hereby
agrees to deliver or cause to be delivered to the Underwriter copies of the Official Statement in
sufficient quantity to enable the Underwriter to comply with applicable rules of the Municipal
Securities Rulemaking Board ("MSRB"). The Underwriter hereby agrees to deliver a copy of
the Official Statement to a national repository as soon as practicable after the date hereof and to
each investor that purchases any of the 2003 Certificates. The Underwriter shall advise the
District of the date and repository of such filing.
3. Representations, Warranties and Agreements of the District.
The District hereby represents and agrees with the Underwriter as follows:
(a) The District is, and will be on the Closing Date, a public utility district of
the State of California organized and operating pursuant to the laws of the State of
California with the full power and authority to execute and deliver the Official Statement
and to enter into the Trust Agreement, the Installment Purchase Agreement, the
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LA 148012bv2
as described in or contemplated by the Official Statement, all authorizations, approvals,
licenses, permits, consents and orders of any governmental authority, board, agency or
commission having jurisdiction of the matter which are required for the due authorization
by, or which would constitute a condition precedent to or the absence of which would
materially adversely affect the due performance by, the District of its obligations under
the Legal Documents have been duly obtained;
(f) The District will furnish such information, execute such instruments and
take such other action in cooperation with the Underwriter as the Underwriter may
reasonably request in order(i)to qualify the 2003 Certificates for offer and sale under the
Blue Sky or other securities laws and regulations of such states and other jurisdictions of
the United States as the Underwriter may designate and (ii)to determine the eligibility of
the 2003 Certificates for investment under the laws of such states and other jurisdictions,
and will use its best efforts to continue such qualification in effect so long as required for
distribution of the 2003 Certificates; provided, however, that in no event shall the District
be required to take any action which would subject it to service of process in any
jurisdiction in which it is not now so subject;
(g) As of the date thereof, the Preliminary Official Statement did not contain
any untrue statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made,not misleading;
(h) As of the date thereof and at all times subsequent thereto to and including
the date which is 25 days following the End of the Underwriting Period (as such term is
hereinafter defined) for the 2003 Certificates, the Official Statement did not and will not
contain any untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made,not misleading;
(i) If between the date thereof and the date which is 25 days following the
End of the Underwriting Period for the 2003 Certificates, an event occurs which might or
would cause the information contained in the Official Statement, as then supplemented or
amended, to contain an untrue statement of a material fact or to omit to state a material
fact required to be stated therein or necessary to make such information therein, in the
light of the circumstances under which it was presented, not misleading, the District will
notify the Underwriter, and, if.iri the opinion of the District, the Underwriter or their
respective counsel, such event requires the preparation and publication of a supplement
or amendment to the Official Statement, the District will forthwith prepare and furnish to
the Underwriter (at the expense of the District) a reasonable number of copies of an
amendment of or supplement to the Official Statement (in form and substance reasonably
satisfactory to the Underwriter). For the purposes of this subsection, between the date of
the Official Statement and the date which is 25 days following the End of the
Underwriting Period, the District will furnish such information with respect to itself as
the Underwriter may from time to time reasonably request;
5
L,A i 480126v2
Closing Date. Accordingly, the Underwriter's obligations under this Purchase Contract to
purchase, to accept delivery of and to pay for the 2003 Certificates shall be subject, at the option
of the Underwriter, to the accuracy in all material respects of the representations of the District
contained herein as of the date hereof and as of the Closing Date, to the accuracy-in all material-
respects of the statements of the officers and other officials of the District made in any certificate
or other document furnished pursuant to the provisions hereof, to the performance by the District
of its obligations to be performed hereunder and under such documents and instruments at or
prior to the Closing Date, and also shall be subject to the following additional conditions:
(a) The Underwriter shall receive, within seven (7) business days of the date
hereof, copies of the Official Statement and any amendments or supplements as have
been approved by the Underwriter, in such reasonable quantity as the Underwriter shall
have requested;
(b) The representations and warranties of the District contained herein shall be
true and correct in all material respects on the date hereof and on the Closing Date, as if
made on and at the Closing Date;
(c) At the Closing Date, the Legal Documents shall have .been duly
authorized, executed and delivered by the respective parties thereto, and the Official
Statement shall have been duly authorized, executed and delivered by the District, as
applicable, all in substantially the forms heretofore submitted to the Underwriter, with
only such changes as shall have been agreed to in writing by the Underwriter, and shall
be in full force and effect; and there shall be in full force and effect such resolution or
resolutions of the board of directors of the District as, in the opinion of Stradling Yocca
Carlson & Rauth, A Professional Corporation, San Francisco, California ("Special
Counsel"), shall be necessary or appropriate in connection with the transactions
contemplated hereby;
(d) Between the date hereof and the Closing Date, the market price or market-
ability of the 2003 Certificates shall not have been materially adversely affected, in the
reasonable judgment of the Underwriter (evidenced by a written notice to the District
terminating the obligation of the Underwriter to accept delivery of and make any
payment for the 2003 Certificates),by reason of any of the following:
(1) an amendment to the Constitution of the United States or the State
of California shall have been passed or legislation shall have been introduced in
or enacted by the Congress of the United States or the legislature of the State of
California or legislation pending in the Congress of the United States shall have
been amended or legislation shall have been recommended to the Congress of the
United States or otherwise endorsed for passage (by press release, other form of
notice or otherwise) by the President of the United States, the. Treasury
Department of the United States, the Internal Revenue Service or the Chairman or
ranking minority member of the Committee on Finance of the United States
Senate or the Committee on Ways and Means of the United States House of
Representatives, or legislation shall have been proposed for consideration by
either such Committee by any member thereof or presented as 'an *option. for
7
LA1 480126v2
of any such restrictions now in force, including those relating to the extension of
credit by, or the charge to the net capital requirements of,the Underwriter;
(6) an order, decree or injunction of any court of competent jurisdic-
tion, or order, ruling, regulation or official statement by the Securities and
Exchange Commission, or any other governmental agency having jurisdiction of
the subject matter, issued or made to the effect that the issuance, offering or sale
of obligations of the general character of the 2003 Certificates, or the issuance,
offering or sale of the 2003 Certificates, including any or all underlying
obligations, as contemplated hereby or by the Official Statement, is or would be
in violation of the federal securities laws as amended and then in effect;
(7) the withdrawal or downgrading of any rating of the
2003 Certificates by any rating agency then rating the 2003 Certificates; or
.(8) any event occurring, or information becoming known which in the
reasonable judgment of the Underwriter, makes untrue in any material respect any
statement or information contained in the Official Statement, or has the effect that
the Official Statement contains any untrue statement of material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were made,
not misleading;
(e) Prior to or simultaneous with the execution of this Purchase Contract, the
Underwriter shall have received from the District a letter, dated the date of the
Preliminary Official Statement, addressed to the Underwriter, consenting to the posting
of the Preliminary Official Statement on the [Thomson Prospectus] website, substantially
in the form attached hereto as Exhibit D;
(f) At or prior to the Closing Date, the Underwriter shall have received the
following documents, in each case satisfactory in form and substance to the Underwriter:
(1) The Official Statement and each supplement or amendment, if any
thereto, executed on behalf of the District;
(2) Copies of the Legal Documents, duly executed and delivered by
the respective parties thereto;
(3) The-approving opinion of Special Counsel, dated the Closing Date
and addressed to the District, in substantially the form attached to the Official
Statement as Appendix G thereto;
(4) The supplemental opinion of Special Counsel, dated the Closing
Date and addressed to the Underwriter in substantially the form attached hereto as
Exhibit B;
9
LA 1 480126v2
relating to the Insurer and its Policy, DTC and the book-entry system and the
financial statements and the statistical data included in the Official Statement and
the appendices thereto, as to which no opinion need be expressed), as of the date
thereof and the Closing Date, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under which they were
made, not misleading;
(9) A certificate or certificates, dated the Closing Date, signed by a
duly authorized official of the District satisfactory to the Underwriter, in form and
substance satisfactory to the Underwriter, to the effect that (i) the representations
of the District contained in this Purchase Contract are true and correct in all
material respects on and as of the Closing Date with the same effect as if made on
the Closing Date; (ii)there is no action, suit, proceeding, inquiry or investigation,
to the best knowledge of such official, pending or threatened (a)to restrain or
enjoin the execution or delivery of the 2003 Certificates, (b)in any way
contesting or affecting the validity of the 2003 Certificates or the Legal
Documents or (c) in any way contesting the existence or powers of the District,
nor to the best knowledge of such official after reasonable investigation, is there
any basis for any such action, suit, proceeding, inquiry or investigation, wherein
an unfavorable decision, ruling or finding would make invalid or materially
adversely affect the authorization, execution, delivery or performance by the
n
District of the foregoing; and (iii)no event affecting the District has occurred
since the date of the Official Statement which either makes untrue or incorrect in
any material respect as of the Closing Date any statement or information
contained in the Official Statement relating to the District or is not reflected in the
Official Statement but should be reflected therein in order to make the statements
and information therein relating to the District not misleading in any material
respect; and (iv) since December 31, 2001, except as referred to in or as
contemplated by the Official Statement, with respect to its Electric System, the
District has not incurred any financial liabilities, direct or contingent, or entered
into any transactions and there has not been any adverse change in the condition,
financial or physical, of the Electric System, in any case that would materially and
adversely affect the ability of the District to meet its obligations under the
Installment Purchase Agreement;
(10) A certificate or certificates, dated the Closing Date, signed by a
duly authorized official of the Corporation satisfactory to the Underwriter, in form
and substance satisfactory to the Underwriter, to the effect that(i)the Corporation
is, and was at all relevant times, a California corporation duly organized and
validly existing under the laws of the State of California; (ii)the Installment
Purchase Agreement and the Trust Agreement were duly executed and delivered
in the name and on behalf of the Corporation by officers of the Corporation duly
authorized to execute, attest and deliver such agreements on behalf of the
Corporation, and constitute the legal, valid and binding obligations of the
Corporation enforceable against the Corporation in accordance with their terms,
except as limited by applicable reorganization, insolvency, liquidity, readjustment
11
LA 1 480126v2
(17) A copy of any Preliminary Blue Sky Survey and Legal Investment
Survey with respect to the 2003 Certificates,prepared by Underwriter's Counsel;
(18) A copy of the audited financial statements of the District included
as Appendix A to the Official Statement;
(19) Arbitrage certifications by the District with respect to the
2003 Certificates in form satisfactory to Special Counsel; and
(20) Such additional legal opinions, certificates, proceedings, instru-
ments, insurance policies or evidences thereof and other documents as the
Underwriter, Underwriter's Counsel or Special Counsel may reasonably request
to evidence the truth and accuracy, as of the date hereof and as of the Closing
Date, of the representations of the District herein.and of the statements and
information contained in the Official Statement, and the due performance or
satisfaction by the District at or prior to the Closing of all agreements-then to be
performed and all conditions then to be satisfied by the District in connection with
the transactions contemplated hereby and by the Legal Documents and the
Official Statement.
If the District shall be unable to satisfy the conditions to the Underwriter's obligations
contained in this Purchase Contract or if the Underwriter's obligations shall be terminated for
any reason permitted herein, all obligations of the Underwriter hereunder may be terminated by
the Underwriter at, or at any time prior to, the Closing Date by written notice to the District and
neither the Underwriter nor the District shall have any further obligations hereunder. In the
event that the Underwriter fails (other than for a reason permitted by this Purchase Contract) to
accept and pay for the 2003 Certificates at the Closing, the amount of one percent (1%) of the
principal amount of the 2003 Certificates will be accepted as liquidated damages for such failure
and for any and all defaults hereunder on the part of the Underwriter and the acceptance of such
amount shall constitute a full release and discharge of all claims and rights of the District against
the Underwriter.
5. Expenses.
All expenses and costs incident to the authorization, execution, delivery and sale of the
2003 Certificates to the Underwriter, including the costs of preparing and printing of the
2003 Certificates, the Preliminary Official Statement and the Official Statement (in reasonable
quantities), any bond insurance premiums, the fees of accountants, financial advisors and
consultants, the initial fees'of the Trustee and its counsel, the initial fees and expenses of the
Corporation and its counsel in connection with the. execution and delivery of the
2003 Certificates and the fees and expenses of Special Counsel shall be paid from the proceeds
of the 2003 Certificates. In the event that the 2003 Certificates for any reason are not executed
and delivered, or to the extent proceeds of the 2003 Certificates are insufficient or unavailable
therefor, any such fees, costs and expenses owed by the District, which otherwise would have
been paid from the. proceeds of the. 2003 Certificates, shall be paid by the District. All
out-of-pocket expenses of the Underwriter, including traveling and other expenses,the California
13
LA1 480126v2
11. Governing Law.
This Purchase Contract shall be construed in accordance with the laws of the State of
California.
Very truly yours,
BEAR, STEARNS &CO. INC., as Underwriter
By:
Title: Senior Managing Director
ACCEPTED:
TRUCKEE-DONNER PUBLIC UTILITY
DISTRICT
By:
Title: General Manager
15
LA 1 480126v2
t
EXHIBIT B
FORM OF OPINION OF
STRADLING YOCCA CARLSON &RAUTH
Bear, Stearns& Co. Inc.
1999 Avenue of the Stars, 32nd Floor
Los Angeles, California 90067-6100
Re: REVENUE CERTIFICATES OF PARTICIPATION,SERIES 2003
Evidencing the Interests of the Owners Thereof
in Installment Payments to be Made by the
TRUCKEE-DONNER PUBLIC UTILITY DISTRICT
Ladies and Gentlemen:
This letter is addressed to you as the Underwriter (the "Underwriter") pursuant to
Section 4(f)(4) of the Purchase Contract dated , 2003 (the "Purchase Contract"),
between you and the Truckee-Donner Public Utility District (the "District") providing for the
purchase of$ principal amount of Revenue Certificates of Participation, Series 2003A
(the "2003A Certificates") and $ principal amount of Revenue Certificates of
Participation, Taxable Series 2003 B (the "2003 B Certificates" and together with the 2003A
Certificates, the 2003 Certificates") evidencing interests of the Owners thereof in Installment
Payments to be made by the District). The 2003 Certificates are being executed and delivered
pursuant to a Trust Agreement (the "Trust Agreement") dated as of , 2003, by and
among the District, the Truckee-Donner Public Utility District Financing Corporation (the
"Corporation") and BNY Western Trust Company, as trustee. Capitalized terms not otherwise
defined herein shall have the meanings ascribed thereto in the Trust Agreement or, if not defined
in the Trust Agreement, in the Purchase Contract.
In addition to the opinions set forth in our final legal opinion concerning the validity of
the 2003 Certificates and certain other matters, dated the date hereof and addressed to, the
Corporation (but which may be relied upon by yourselves to the same extent as if such opinion
were addressed to you), as of the date hereof, we are of the following opinions or conclusions:
1. The 2003 Certificates are not subject to the registration requirements of the
Securities Act of 1933, as amended, and the Trust Agreement is exempt from qualification
pursuant to the Trust Indenture Act of 1939, as amended.
2. The Official Statement dated , 2003, with respect to the 2003 Certificates
(the"Official Statement") and the execution and delivery thereof have been duly approved by the
District.
B-1
LA 1 480126v2
EXHIBIT C
FORM OF OPINION OF DISTRICT COUNSEL
Bear, Stearns & Co. Inc.
1999 Avenue of the Stars, 32nd Floor
Los Angeles, California 90067-6100
Re: REVENUE CERTIFICATES OF PARTICIPATION, SERIES 2003
Evidencing the Interests of the Owners Thereof
in Installment Payments to be Made by the
TRUCKEE-DONNER PUBLIC UTILITY DISTRICT
Ladies and Gentlemen:
I am General Counsel to the Truckee-Donner Public Utility District (the "District"), a
public utility district organized and existing pursuant to Division 7 of the Public Utilities Code of
the State of California, as amended. This opinion is rendered in connection with-the execution,
sale and delivery of$ principal amount of Revenue Certificates of Participation, Series
2003A (the "2003A Certificates") and $ principal amount of Revenue Certificates of.
Participation, Taxable Series 2003B (the "2003B Certificates" and together with the
2003A Certificates, the "2003 Certificates") evidencing interests of the' Owners thereof in
Installment Payments to be made by the District. Capitalized terms used herein not otherwise
defined shall have the meanings ascribed thereto in the hereinafter referenced Trust Agreement.
In rendering this opinion, I have examined the following documents: (i)the Trust
Agreement dated as of , 2003 (the "Trust Agreement"),by and among the District,
the Truckee-Donner Public Utility District Financing Corporation (the "Corporation") and BNY
Western Trust Company, as trustee (the "Trustee"); (ii)the Installment Purchase Agreement
dated as of , 2003 (the "Installment Purchase Agreement"), by and between the
District and the Corporation; (iii) the Purchase Contract dated , 2003 (the
"Purchase Contract"), by and between the District and you, the Underwriter; (iv)the Continuing
Disclosure Agreement dated as of , 2003 (the "Continuing Disclosure
Agreement"), by and between the District and the Trustee; and (v)the Official Statement dated
2003 (the "Official Statement"), relating to the 2003 Certificates. In addition, I
have examined such other documents and instruments, including certificates of public officials,
and have made such investigations of law and of fact as I have deemed necessary or appropriate
for the purpose of rendering the opinions set forth herein.
Based on the foregoing, I am of the opinion that:
1. The District is, and was at all relevant times, a public utility district duly
organized and validly existing under the laws of the State of California.
2. The resolution or resolutions of the District approving and authorizing the
execution and delivery of the Trust Agreement, the Installment Purchase Agreement, the
C-1
LA 1 480126v2
the information made available to me in the course of my participation in the preparation of the
Official Statement as General Counsel for the District, nothing has come to my attention which
would cause .me to believe that the Official Statement (excluding therefrom the information
concerning the Insurer and its Policy, DTC and the book-entry system and the financial
statements and the statistical data included in the Official Statement, as to which no opinion is
expressed), as of the date thereof and the Closing Date, contained an untrue statement of a
material fact or omitted to state a material fact required*to be stated therein or necessary to make
the statements therein, in the light of the circumstances under which they were made, not
misleading.
8. Under the laws of the State of California, the District has the authority to fix and
collect rates and charges for electric service and is not presently subject to the regulatory
jurisdiction of any state, regional or local governmental regulatory authority in connection with
fixing and collecting such charges, and, to my current actual' knowledge after reasonable
investigation, no legislation is proposed or pending to restrict or limit such rates and charges
except as set forth in the Official Statement.
9. The-Net Revenues of the Electric System (as defined in the Official Statement)
are free and clear of and from any and all liens and encumbrances other than as set forth in the
Official Statement.
This letter is furnished by me as General Counsel to the District. No attorney-client
relationship has existed or exists between me and yourselves in connection with the delivery of
the 2003 Certificates or by virtue of this letter. This letter is delivered to you as Underwriter of
the 2003 Certificates and is solely for your benefit as such Underwriter and is not to be used,
circulated, quoted or otherwise referred to or relied upon for any other purpose or by any other
person.
Respectfully submitted,
C-3
LA1 480126v2
EXHIBIT D
FORM OF LETTER TO UNDERWRITER
12003
Bear Stearns & Co. Inc.
Los Angeles, California
Ladies and Gentlemen:
With respect to the proposed sale to you of its Revenue Certificates of Participation,
Series 2003A and Taxable Series 2003B (collectively, the "2003 Certificates") evidencing
interests of the Owners thereof in Installment Payments to be made by the Truckee-Donner
Public Utility.District (the "District")), the District has delivered to you a Preliminary Official
Statement, dated 2003, relating to the 2003 Certificates (the "Preliminary.
Official Statement"). The District, for purposes of compliance with Rule 15c2-12 of the
Securities and Exchange Commission, deems the Preliminary Official Statement to be final as of
its date, except for the omission of no more than the following information: the offering prices,
interest rates, selling compensation, aggregate principal amount, principal amount per maturity,
dates of mandatory sinking fund payments, delivery date, ratings, and any other terms of the
2003 Certificates relating to such matters.
The District hereby approves the use and the distribution by the Underwriter of the
Preliminary Official Statement and the posting and distribution of the Preliminary Official
Statement through the [Thomson Prospectus] website.
Sincerely,
TRUCKEE-DONNER PUBLIC UTILITY
DISTRICT
By:
Name:
Title:
D-1
LA 1480126v2
.
Purchase Contract and the Continuing Disclosure Agreement by the District (the "District
Resolutions") were duly adopted at meetings of the Board of Directors of the District, which
were called and held pursuant to law and with all public notice required by law and at which a
quorum was present and acting throughout.
3. There is no action, suit, proceeding or investigation at law or in equity before or
by any court, public board or body, pending (with service of process having been accomplished)
or, to my current actual knowledge after reasonable investigation, threatened against or affecting
the District to restrain or enjoin the Installment Payments under the Installment Purchase
Agreement, in any way contesting or affecting the validity of the 2003 Certificates, the Trust
Agreement, the Installment Purchase Agreement, the Continuing Disclosure Agreement or the
Purchase Contract.
4. The adoption of the District Resolutions and the execution and delivery by the
District of the Trust Agreement, the Installment Purchase Agreement, the Continuing Disclosure
Agreement, the Purchase Contract and the Official Statement, and compliance by the District
with the provisions of the foregoing, as appropriate, under the circumstances contemplated
thereby, does not and will not in any material respect conflict with or constitute on the part of the
District a breach or default under any agreement or other instrument to which the District is a
party (and of which I have current actual knowledge after reasonable investigation) or by which
it is bound (and of which I have current actual knowledge after reasonable investigation) or any
existing law, regulation, court order or consent decree to which the District is subject.
5. The Official Statement, the Trust Agreement, the Installment Purchase
Agreement, the Continuing Disclosure Agreement and the Purchase Contract have been duly
authorized, executed.and delivered by the District and, assuming due authorization, execution
and delivery by other parties thereto, the Trust Agreement, the Installment Purchase Agreement,
the Continuing Disclosure Agreement and the Purchase Contract constitute legal, valid and
binding agreements of the District, enforceable in accordance with their respective terms, subject
in each case to laws relating to bankruptcy, insolvency or other laws affecting the enforcement of
creditors' rights generally and the application of equitable. principles if equitable remedies are
sought. The enforceability of the foregoing agreements may be subject or limited by the
unenforceability under certain circumstances of provisions imposing penalties, forfeitures or late
payment charges upon delinquency in payment or occurrence of a default, and no opinion is
expressed as to any indemnification provisions contained therein.
6. Except as described in the Official Statement, no authorization, approval, consent,
or other order of the State of California or any other governmental authority or agency within the
State of California having jurisdiction over the District is required for the adoption of the District
Resolutions and for the valid authorization, execution, delivery and performance by the District
of the Official Statement, the Trust Agreement, the Installment Purchase Agreement, the
Continuing Disclosure Agreement or the Purchase Contract which has not been obtained,
provided that no opinion is expressed with respect to qualification under Blue Sky or other state
securities laws.
7. Without having undertaken to determine independently the accuracy,
completeness or fairness of the statements contained in the Official Statement and based upon
C-2
LA 1 480126v2
3. The Purchase Contract and the Continuing Disclosure Agreement have been duly
authorized, executed and delivered by the District and (assuming due authorization, execution
and delivery by and validity against the other parties thereto) are valid and binding agreements of
the District. We call attention to the fact that the rights and obligations under the Purchase
Contract and the Continuing Disclosure Agreement and their enforceability may be subject to
bankruptcy, insolvency, reorganization, assignment, fraudulent conveyance, moratorium and
other laws relating to or affecting creditors' rights, to the application of equitable principles, to
the exercise of judicial discretion in appropriate cases and to the limitations or legal remedies
against public entities in the State of California. We express no opinion with respect to any
indemnification, contribution, choice of law, choice of forum or waiver provisions contained in
the Purchase Contract or the Continuing Disclosure Agreement.
4. The statements contained in the Official Statement under the captions "THE
2003 CERTIFICATES", "SECURITY AND SOURCES OF PAYMENT FOR THE
2003 CERTIFICATES", "TAX MATTERS", "APPENDIX E - SUMMARY OF PRINCIPAL
LEGAL DOCUMENTS", and "APPENDIX F — PROPOSED FOF.N4 OF CONTINUING
DISCLOSURE AGREEMENT" and "APPENDIX G — PROPOSED FORM OF OPINION OF
SPECIAL COUNSEL,"insofar as such statements expressly summarize certain provisions of the
Trust Agreement, the Installment Purchase Agreement and the Continuing Disclosure
Agreement, and our opinion concerning certain federal tax matters relating to the Certificates,
are accurate in all material respects.
This letter is furnished by us as Special Counsel. No attorney-client relationship has
existed or exists between our firm and you in connection with the 2003 Certificates or by virtue
of this letter. We disclaim any obligation to update this letter. This letter is delivered to you as
Underwriter of the 2003 Certificates, is solely for your benefit as such Underwriter and is not to
be used, circulated, quoted or otherwise referred to or relied upon for any other purpose or by
any other person. This letter is not intended to, and may not, be relied upon by owners of the
2003 Certificates or by any other party to whom it is not specifically addressed.
Very truly yours,
B-2
LA 1 480126v2
EXHIBIT A
2003 Certificates Payment Schedules
$ 2003A Certificates
Payment
Date Principal Interest Price or
(July 1) Amount Rate Yield
$ 2003B Certificates
Payment
Date Principal Interest Price or
(July 1) Amount Rate Yield
A-1
LA i 480126v2
Debt and Investment Advisory Commission fee and the fees and expenses of Underwriter's
Counsel, shall be paid by the Underwriter.
6. Notices.
Any notice or other communication to be given under this Purchase Contract may be
given by delivering the same in writing to the respective parties at the following address:
Underwriter: Bear, Stearns & Co. Inc.
1999 Avenue of the Stars, 32nd Floor
Los Angeles, California 90067-6.100
Attention: Public Finance, Senior Managing Director
District: Truckee-Donner Public Utility District
11570 Donner Pass Road
Truckee, California 96160
Attention: General Manager
7. Survival of Representations and Warranties.
The representations and warranties of the District set forth in or made pursuant to this
Purchase Contract shall not be deemed to have been discharged, satisfied or otherwise rendered
void by reason of the Closing or termination of this Purchase .Contract regardless of any
investigations or statements as to the results thereof made by or on behalf of the Underwriter and -«
regardless of delivery of and payment for the 2003 Certificates.
8. Effectiveness and Counterpart Signatures.
This Purchase Contract shall become effective and binding upon the respective parties
hereto upon the execution hereof by a duly authorized officer of the District and shall be valid
and enforceable as of the time of such execution. This Purchase Contract may be executed by
the parties hereto in separate counterparts, each of which when so executed and delivered shall
be an original, but all such counterparts shall together constitute but one and the same
instrument.
9. Parties in Interest.
This Purchase Contract is made solely for the benefit of the District and the Underwriter
(including the successors or assigns of the Underwriter) and no other person shall acquire or
have.any right hereunder or by virtue hereof. No assignment of this Purchase Contract shall be
made by the Underwriter without the consent of the District.
10. Headings.
The headings of the sections of this Purchase Contract are inserted for convenience only
and shall not be deemed to be a part hereof.
14
LA 1 480126v2
of debt or other laws affecting the enforcement of the rights of creditors of the
Corporation and by general- principles of equity; (iii)the Corporation has
complied with all the terms of the Trust Agreement and the Installment Purchase
Agreement to be complied with by the Corporation prior to or concurrently with
the Closing and such documents are in full force and effect as to the Corporation;
and (iv)the information in the Official Statement under the caption "THE
CORPORATION"is true and correct;
(11) A certificate, dated the Closing Date, signed by a duly authorized
officer.of the Trustee, satisfactory in form and substance to the Underwriter, to
the effect that (i)the Trustee is a banking corporation duly organized and existing
under and by virtue of the laws of the State of California, having the full power
and being qualified to enter into and perform its duties under the Trust Agreement
and the Continuing Disclosure Agreement; (ii)to the best of such officer's
knowledge, the execution and delivery of the Trust Agreement and the Continuing
Disclosure Agreement and compliance with the provisions on the Trustee's part
contained therein, will not conflict with or constitute a breach of or default under
any law, administrative regulation, judgment, decree, loan agreement, indenture,
bond, note, resolution, agreement or other instrument to which the Trustee is a
party or is otherwise subject; (iii) to the best of such officer's knowledge, the-
Trustee has not been served with any action, suit, proceeding, inquiry or
investigation, at law or in equity, before or by any court, governmental agency,
public board or body, nor is any such action- threatened against the Trustee, as
such but not in its individual capacity, affecting the existence of the Trustee, or
the titles of its officers to their respective offices, or contesting or affecting the
validity or enforceability of the Trust Agreement and the Continuing Disclosure
Agreement against the- Trustee, or contesting the powers of the Trustee or its
authority to enter into, adopt or perform its obligations under the foregoing,
wherein an unfavorable decision, ruling or finding would materially adversely
affect the validity or enforceability of the Trust Agreement and the Continuing
Disclosure Agreement against the Trustee;
(12) A specimen of the Policy issued by the Insurer;
(13) The opinion of counsel to the Insurer, dated the Closing Date,
addressed to the Corporation and the Underwriter, in the form previously
submitted to the Underwriter;
(14) Certified copies of the resolutions of the District authorizing the
execution and delivery of the Legal Documents and the Official Statement;
(15) Certified copies of the resolutions of the Corporation authorizing.
the execution and delivery of the Trust Agreement and the Installment Purchase
Agreement;
(16) Evidence that any ratings on the 2003 Certificates described in the
Official Statement are in full force and effect as of the Closing Date;
12
LA 480126v2
(5) The opinion of General Counsel of the District, dated the Closing
Date and addressed to the Underwriter, in substantially the form attached hereto
as Exhibit C;
(6) The opinion of counsel to the Corporation, dated the Closing Date
and addressed to the District and the Underwriter, to the effect that (i) the
Corporation is a California corporation duly organized and validly existing
pursuant to the laws of the State of California; (ii)the Trust Agreement and the
Installment Purchase Agreement have been duly authorized, executed and
delivered by the Corporation and, assuming due authorization, execution and
delivery by the other parties thereto, constitute legal, valid and binding
agreements of the Corporation enforceable in accordance with their respective
terms, subject to laws relating to bankruptcy, insolvency or other laws affecting
the enforcement of creditors' rights generally and the application of equitable
principles if equitable remedies are sought; and (iii) assuming due execution and
delivery thereof by the Trustee and the District, the execution and delivery of the
Trust Agreement by the Corporation is effective and sufficient to transfer all right,
title and interest of the Corporation in the Installment Purchase Agreement as are
purported to be transferred thereby (including the Installment Payments) to the
Trustee;
(7) The opinion of counsel to the Trustee, dated the Closing Date and
addressed to the District and the Underwriter, to the effect that (i)the Trustee is a
banking corporation duly organized, validly existing and in good standing under `
the laws of the State of California and has full power and authority to execute and
deliver the Trust Agreement and the Continuing Disclosure Agreement and to
perform its obligations thereunder; (ii)the Trust Agreement and the Continuing
Disclosure Agreement have been duly authorized, executed and delivered by the
Trustee and constitute the valid and binding obligations of the Trustee enforceable
against the Trustee in accordance with their terms, except insofar as the validity,
binding nature and enforceability of the Trustee's obligations thereunder may be
limited by the effect of(a) insolvency, reorganization, arrangement, moratorium,
fraudulent transfer and other similar laws, (b)the discretion of any court of
competent jurisdiction in awarding equitable remedies, including, without
limitation, specific performance or injunctive relief and (c) the effect of general
principles of equity;
(8) . The opinion of Sidley Austin Brown & Wood.LLP, Los Angeles,
California, Underwriter's Counsel, dated the Closing Date and addressed to the
Underwriter, to the effect that (i) the 2003 Certificates are exempt from
registration under the Securities Act of 1933, as amended, and the Trust
Agreement is exempt from qualification under the Trust Indenture Act of 1939, as
amended; and (ii)based upon their participation in the preparation of the Official
Statement as Underwriter's Counsel and without having undertaken to determine
independently the accuracy, completeness or fairness of the statements contained
in the Official Statement, nothing has come to their attention which would cause
them to believe that the Official Statement (excluding therefrom the information
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LA 1480126v2
consideration by either such Committee by the staff of such Committee or by the
staff of the Joint Committee on Taxation of the Congress of the United States, or
legislation shall have been favorably reported for passage to either House.of the
Congress of the United States by a Committee of such House to which such
legislation has been referred for consideration, or a decision shall have been
rendered by a court of the United States or of the State of California or the Tax
Court of the United States, or a ruling shall have been made or a regulation or
temporary regulation shall have been proposed or made or any other release or
announcement shall have been made by the Treasury Department of the United
States, the Internal Revenue Service or other federal or State of California
authority, with respect to federal or State of California taxation upon Revenues of
the District's Electric System or other income of the general character to be
derived by the District or upon interest received with respect to obligations of the
general character of the 2003A Certificates which, in the reasonable judgment of
the Underwriter, may have the purpose or effect, directly or indirectly, of
affecting the tax status of the District, its property or income, its securities
(including the 2003 Certificates) or the interest thereon, or any tax exemption
granted or authorized by State of California legislation or, in the reasonable
judgment of the Underwriter, materially and adversely affecting the market for the
2003 Certificates or the market price generally of obligations of the general
character of the 2003 Certificates;
(2) legislation enacted, introduced in the Congress or recommended
for passage by the President of the United States, or a decision rendered by a court
established under Article III of the Constitution of the United States or by the Tax
Court of the United States, or an order, ruling, regulation (final, temporary or
proposed) or official statement issued or made by or on behalf of the Securities
and Exchange Commission, or any other governmental agency having jurisdiction
of the subject matter shall have been made or issued to the effect that obligations
of the general character of the 2003 Certificates, or the 2003 Certificates are not
exempt from registration under the Securities Act of 1933, as amended, or that the
Trust Agreement is not exempt from qualification under the Trust Indenture Act
of 1939, as amended;
(3) the declaration of war or engagement in major military hostilities
by the United States or the occurrence of any other national emergency or
calamity relating to the effective operation of the government of, or the financial
community in, the United States;
(4) the declaration of a general banking moratorium by federal, New
York or California authorities, or the general suspension of trading on any
national securities exchange;
(5) the imposition by the New York Stock Exchange or other national
securities exchange, or any governmental authority, of any material restrictions
not now in force with respect to the 2003 Certificates or obligations of the general
character of the 2003 Certificates or securities generally, or the material increase
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LA1 480126v2
(j) If the information contained in the Official Statement is amended or
supplemented pursuant to paragraph(i) hereof, at the time of each supplement or
amendment thereto and (unless subsequently again supplemented or amended pursuant to
such subparagraph) at all times subsequent thereto up to and including the date which is
25 days following the End of the Underwriting Period, the portions of the Official
Statement so supplemented or amended will not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or necessary to
make such information therein, in the light of the circumstances under which it was
presented,not misleading;
(k) After the Closing, the District will not participate in the issuance*of any
amendment of or supplement to the Official Statement to which, after being furnished
with a copy, the Underwriter shall reasonably object in writing or which should be
disapproved by counsel for the Underwriter;
(1) Between the date of this Purchase Contract and the Closing Date, except
as disclosed in the Official Statement, the District will not, without the prior written
consent of the Underwriter, offer or issue any bonds, notes or other obligations for
borrowed money, or incur any material liabilities direct or contingent, payable from .
Revenues of its Electric System, other than in the ordinary course of its business;
(m) As used herein and for.the purposes of the foregoing, the term "End of the
Underwriting Period" for the 2003 Certificates shall mean the earlier of (i)the Closing
Date unless the District shall have been notified in writing to the contrary by the
Underwriter on or prior to the Closing Date, or (ii)the date on which the End of the
Underwriting Period for the 2003 Certificates has occurred under Rule 15c2-12;
provided, however, that the District may treat as the End of the Underwriting Period for
the 2003 Certificates the date specified as such in a notice from the Underwriter stating
the date which is the End of the Underwriting Period;
(n) The audited financial statements of the District contained in Appendix A
to the Official Statement and the unaudited financial statements of the District contained
in Appendix B to the Official Statement do and will fairly present the financial position
and results of operations of the District as of the dates and for the periods therein set forth
in accordance with generally accepted accounting principles applied consistently;
(o) Any certificate signed by any .authorized official of the District and
delivered to the Underwriter in connection with the execution and delivery of the
2003 Certificates, shall be deemed a representation and warranty by the District to the
Underwriter as to the statements made therein.
4. Conditions to the Obligations of the Underwriter.
The Underwriter hereby enters into this Purchase Contract in reliance .upon the
representations and warranties of the District contained herein and the representations to be
contained in the documents and instruments to be delivered at the Closing and upon the
performance by the District of its obligations both on and as of the date hereof and as of the
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LA 1 480126v2
Continuing Disclosure Agreement and this Purchase Contract (collectively, the "Legal
Documents");
(b) By all necessary official action of the District prior to or concurrently with
the acceptance hereof, the District has duly approved, ratified and confirmed the
execution, delivery and distribution of the Official Statement, and has duly authorized
and approved the execution and delivery of, and the performance by the District of the
obligations on its part contained in, the Legal Documents;
(c) The District is not in any material respect in breach of or default under any
applicable constitutional provision,.law or administrative regulation to which it is subject
or any applicable judgment or decree or any loan agreement, indenture, bond, note,
resolution, agreement or other instrument to which the District is a party or to which the
District or any of its property or assets is otherwise subject, and no event has occurred
and is continuing which with the passage of time or the giving of notice, or both, would
constitute such a default or event of default in any material respect under any such
instrument; and the execution and delivery of the Legal Documents, and compliance with
the provisions on the District's part contained herein and therein, will not in any material
respect conflict with or constitute a breach of or-default under any law, administrative
regulation, judgment, decree, loan agreement, indenture, bond, note, resolution,
agreement or other instrument to which the District is a party or is otherwise subject, nor
will any such execution, delivery, adoption or compliance result in the creation or
imposition of any lien, charge or other security interest or encumbrance of any material
nature whatsoever upon any of the properties or assets of the District under the terms of
any such law, administrative regulation, judgment, decree, loan agreement, indenture,
bond, note, resolution, agreement or other instrument, except as provided in the Trust
Agreement or the Installment Purchase Agreement;
(d) There is no action, suit, proceeding, inquiry or investigation, *at law or in
equity, before or by any court, governmental agency, public board or body, to the best
knowledge of the District, after reasonable investigation, pending or threatened against
the District in any material respect affecting the existence of the District or the titles of its
officers to their respective offices or contesting or affecting, as to the District, the validity
or enforceability of the Legal Documents or contesting the powers of the District or its
authority to enter into, adopt or perform its obligations under any of the foregoing, or
contesting in any way the completeness or accuracy of the Official Statement, or any
amendment or supplement thereto, wherein an unfavorable decision, ruling or finding
would materially adversely affect the validity or enforceability of the Legal Documents;
(e) All authorizations, approvals, licenses,permits, consents and orders of any
governmental authority, legislative body, board, agency or commission having
jurisdiction of the matter which are required for the due authorization by, or which would
constitute a condition precedent to or the absence of which would.materially adversely
affect the due performance by, the District of its obligations in connection with the
execution and delivery of the 2003 Certificates have been duly obtained, except for such
approvals, consents and orders as may be required under the Blue Sky or securities laws
of any state in connection with the offering and sale of the 2003 Certificates, and, except
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LA 1 480126v2
amount of Revenue Certificates of Participation, Taxable Series 2003B (the
"2003B Certificates" and collectively -with the 2003A Certificates, the
"2003 Certificates"). The 2003 Certificates are being delivered to provide funds (i)to
pay a termination payment to be made by the District in connection with the termination
of a power purchase agreement (the "Settlement Obligation"), (ii)to fund a reserve fund
for the'2003 Certificates, and (iii)to pay costs of delivery of the .2003 Certificates, as
further described in the Official Statement.
Pursuant to an Installment Purchase Agreement, dated as of 1, 2003 (the
"Installment Purchase Agreement"), by and between the District and the Truckee-Donner
Public Utility District Financing Corporation (the "Corporation"), in consideration for the
Corporation's assistance in financing the Settlement Obligation, the District sells to the
Corporation and the Corporation purchases from the District certain assets and facilities
comprising a portion of the Electric System (the "Property") to be purchased back by the
District from the Corporation pursuant to the Installment Purchase Agreement. The
2003 Certificates evidence the interests of the owners thereof in installment payments
(the "Installment Payments") to be made by the District.
The 2003 Certificates shall be delivered pursuant to a Trust Agreement, dated as
of , 2003 (the "Trust Agreement"), by and among the District, the Corporation
and BNY Western Trust Company, as trustee (the "Trustee'). The Corporation will
assign certain of its interests in the Installment Purchase Agreement to the Trustee
pursuant to the [Trust Agreement.] The 2003 Certificates shall be dated the date of
delivery thereof. The 2003 Certificates shall mature in the amounts and on the dates and ~
will accrue interest at the rates set forth in Exhibit A hereto. The 2003 Certificates shall
be substantially in the form described in, and shall be issued and secured under, the
provisions of the Trust Agreement.
Payment of principal and interest with respect to the 2003 Certificates when due
(not including acceleration or prepayment) will be insured under separate municipal bond
insurance policies (collectively, the "Policy") to be issued simultaneously with the
delivery of the 2003 Certificates by (the "Insurer").
(b) The purchase price for the 2003A Certificates shall be $
(representing the $ aggregate principal amount of the 2003A Certificates less
$ of Underwriter's discount and [plus $ original issue premium]) and
the purchase price for the 2003B Certificates shall be $ (representing the
$ aggregate principal amount of the 2003B Certificates less $ of
underwriter's discount and [plus $ original issue premium]).
(c) At 8:00 o'clock A.M., California time, on , 2003, or at such other
time or on such other date as the District and the Underwriter mutually agree upon (the
"Closing Date"), the Trustee will, subject to the terms and conditions hereof, deliver or
cause to be-delivered to the Underwriter, at a location or locations to be designated by the
Underwriter in New York, New York, the 2003 Certificates (delivered through the
book-entry system of The Depository Trust Company), duly executed, and the parties
will deliver or cause to be delivered, at the offices of Stradling Yocca Carlson & Rauth,
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LA1 480126v2