HomeMy WebLinkAboutAgenda Report - August 5, 1992 (85)CITY OF LODE COUNCIL COMMUNICATION
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AGENDA TITLE: Approve Execution of the Combustion Turbine Project No. Two
Third -Phase Agreement
MEETING DATE: August 5, 1992
PREPARED BY: Electric Utility Director
RECOMMENDED ACTION: That the City Council adopt the attached resolution which
authorizes the execution of the Combustion Turbine
Project No. Two Third Phase Agreement (Agreement), for
construction and operation of an electric generating
plant, on file in the office of the City Clerk.
BACKGROUND INFORMATION: This project consists of a 49 megawatt Steam Injected Gas
Turbine (STIG) unit to be located in the city of Lodi.
This will be a highly efficient combustion turbine power
plant to be fueled by natural gas. An Environmental
Impact Report has been approved for the project and the required licenses and air
quality permits have been received. NCPA has now received bids for turnkey
construction which are competitively priced and NCPA staff is recommending that the
member participants proceed with the financing and construction of the project.
Proposals for new economic sources of power were solicited by NCPA approximately 3
years ago. NCPA anticipated need for new resources for its members beginning in
1990 and actively solicited bids and proposals from power project developers,
wholesale utility suppliers and independent power producers.
Following critical analysis of 103 proposals, 3 projects were selected for the
second phase investigation; first phase activity represents solicitation of a
bona -fide proposal and second phase is planning and developing the potential
project. Once a project is determined to be feasible (results from second phase
activity), final membership participation is determined and the third phase
construction/financing begins.
A second phase expenditure of $132,661 to cover investigation of the cost and
feasibility of construction of a 49 megawatt base load gas resource was approved by
the City Council by Resolution 90-112. This project had the highest ranked cost and
feasibility potential of the resources evaluated.
APPROVED
THOMAS A PETERSON
Qty Managor
CC -I
CC-CTb2/CO.COM
Apprave Execution of the Coi. ,stion Turbine Project No. Two rd-�hase Aqreement
August 5, 1992
Page two
Second phase evaluation considered siting the project at R Seville or Lodi.
di
Economic and other considerations resulted in adopting the Loite near the White
Slough Water Treatment Plant. The large volumes of gas requi d to ooerate this
base load power plant will be supplied from the nearby PG&E bac bone high pressure
gas line and the electric production will be intertied with the 230Kv transmission
system adjacent to the proposed site.
Following certification of the Environmental Impact Report nd the Mitigation
Monitoring Program in :!j,- :g9', requests for bids were releas d. Six bids were
obtained and evaluated; these bids exceeded staff and I participant cost
expectations. A second bid procedure was undertaken and therulting bids fell
comfortably within the expectations with the lowest bid below thlowest former bid
by almost S10 million.
Each project participant has full and unfettered rights to m
assignments and exchanges of entitlement. NCPA Counsel and
approved the Third -Phase Agreement for construction, operation
project.
Electric Department staff has evaluated the need for the caoac
the proposed Combustion Turbine Project No. 2 based on the l
loads and resources (including a low -load growth scena
consideration expected effects of conservation and demand-side
that the energy and peaking capacity were fully usable on the Ci
conditions. However, during the non -peak months, excess capacit,
for sale or exchange to other utilities. Because of this sitt
the City's meeting its 1995 Binding Forecast, staff has been
exchange agreement with the City of Alameda. Alameda is a Wir
with surplus capacity available in the summer - Lodi has a reN
Sumner Peaking utility. Alameda has agreed to provide Lodi 5 m
from its project participation during the 7 months of April tl
Sumner Peak Season) in exchange for one and one-half that amount
of November through March of each year through January 1, 2005.
exchange which benefits both Cities and utilizes some of their
seasonal capacity.
PROJECT COST
The low bid turnkey construction cost is $43.1 million and
con,truction cost is $3.6 million for the interconnection s
financial consequences include the commitment to pay annual
cost estimated to be approximately $2.1a million per year, be
30 -year financing at 7 percent interest. The melded costs
assumed 40 percent capacity factor would be $0.073 per kilowat
to a melded rate for PG&E wholesale power which is expec'
kilowatt-hour.
CC-CTM2/CO.COM
transfers, sales,
Commission have
financing of the
ty and energy from
test projection of
io), taking into
rograms, and fo-!nd
e's loads under all
would be available
tion and to assure
ursuing a seasonal
er Peaking utility
rse situation as a
lawatts of capacity
ough October (Lodi
luring the 5 months
This is a no -cost
respective surplus
other significant
ation. Long-term
ject debt service
ing 1995, assuming,
m the project at
ur. This compares
to be $0.091 per
Approve Execution of the Co. istzon Turbine Project No. Two ,rd -chase Agreement
Auqust 5, 1992
Page three
The only significant cost uncertainty at this point results from the fact that the
cost of energy from this project is dependent upon the price of natural gas. which
ECONOMICS
Staff evaluated the economic implications of participating in tflis project under a
number of possible future conditions. Alternatives to participeting in the power
plant were examined and market prices based on the projected cost of PG&E wholesale
power were assumed.
Lodi needs to meet its Binding Forecasts for 1994/1995 and looked to this project to
fulfill that requirement. The maximum participation available was approximately 20
megawatts which left a resource need of approximately 5 megawatts. This need
required staff to negotiate an exchange agreement with Alameda to exchange seasonal
capacity surplus, thus making both entities resource sufficient in their respective
peak seasons at no cost. The benefit -to -cost ratios are greatly enhanced as are the
dollar savings to each City by including seasonal exchange with the project - in
fact, with exchange. there are significant savings from the first year of project
operation.
FUNDING: None Required
c: City Attorney
CC -CT? -?/CO. COM
Henry J. Ricle
Electric Utility Director
RESOLUTION N0. 92-133
A RESOLUTICN OF THE M DI CITY COUNCIL'
APPROVING EXECUTION OF THE
COXBUSTION TURBINE PROJECT NUMBER TWO
THIRD -PHASE AGREEMENT
WHEREAS. the Northern California Power Agency INCPA) has
evaluated the possible construction of a 49 -megawatt rated, highly
efficient, combustion turbine generation facility to be located in
Lodi, California; and
WHEREAS, the results have been positive and I the project has
reached the state of development where each participa ing NCPA member.
including the City of Lodi, must make its determination whether or not
to Participate further in the project; and
WHEREAS, the NCPA Third -Phase Agreement providin� for NCPA member
participation in the construction, operation and financing of the
project and associated rights and obligations has been drafted; and
WHEREAS, NCPA Counsel and the NCPA Commission Dave reviewed the
Third -Phase Agreement and recommend its approval by the participants;
and
WHEREAS, the Electric Department's review of this matter
indicates that the participation level should be 39 5 percent, which
translates into approximately 20 meg- atts.
NOW, THEREFORE, BE IT RESOLVED that the City council hereby
authorizes a 39.5 percent participation in the Combustion Turbine
Project Number Two and approves the NCPA Third -Phase Agreement.
BE IT FURTHER RESOLVED that the City Manager Iis authorized to
execute the Combustion Turbine Project Number Two Agree�ent.
Dated: August 5, 1992
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hereby certify that Resolution No. 92-133 was passed and
adopted by the Lodi City Council in a regular meeting held August 5,
1992 by the following vote:
Ayes: Council Members -
Noes: Council Members -
Absent: Council Members -
Alice M. Reimche
City Clerk
92-133
RES92133/TXTA.OIV
RESOLUTION NO. 92-133
A RESOLUTION OF THE M D I CITY COLNC I L
APPROVING EXECUTION OF TETE {
COMBUSTION'7T3RBINE PROJECT NUMBER Two
THIRD -PHASE AGREEMENT
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W H E W the Northern California Power Ag�ncy (NCPA) has
evaluated the possible construction of a 49 -megawatt rated, highly
efficient. combustion turbine generation facility to be located in
Lodi. Califc.rnia; and
WHEREAS. the results have been positive and the project has
reached the state of development where each participi ing NCPA member.
including the City of Lodi, must make its determination whether or cot
to participate further in the project; and
i
WHEREAS, the NCPA Third -Phase Agreement providin4 for NCPA member
participation in the construction, operation and financing of the
project and associated rights and obligations has been drafted; and
W H E W , NCPA Counsel and the NCPA Commission lave reviewed the
Third -Phase Agreement and recommend its approval by the participants;
and
VJWREAS, the Electric Department's review of this matter
indicates that the participation level should be 39 5 percent, which
translates into approximately 20 megawatts.
r
NOW, THEREFORE, BE IT RESOLVED that the City Council hereby
authorizes a 39.5 percent participation in the Combustion Turbine
Project Number Two and apprcves the NCPA Third -Phase Agreement.
BE IT FURTHER RESOLVED that the City Manager €is authorized to
execute the Combustion Turbine Project Number Two Agree�ent_
Dated: August 5, 1992
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I hereby certify that Revolution No. 92-133 was passed and
adopted by the Lodi City council in a regular meeti g held August 5,
1992 by the following vote:
Ayes: Council Members - Hinchman, Sieglock, Sider and
Pinkerton (Mayor)
Noes: Council Members - None
Absent: Council Members - None
Abstain: Council Members - Pennino `]� ��,
AW M F?��
City Clerk �`�,�1
RES92133/TX'TA.02J
AGREEMENT FOR CONSTRUCTION, OPERATION AND FINNNCING
OF COMBUSTION TURBINE PROJECT N"RER TUO
Dated as of A1911st 5 , 1992
By and Among
NORTHERN CALIFORNIA POWER AGENCY
and
CITY OF ALAM ") A
CITY OF LODI I
CITY OF LOiiPOC
CITY OF ROSEVILLE �
L.1-9219.6
TABLE OF CONTM;T5
section
cP
1.
Definitions . . . . . . . . . . .
I
2.
Purpose .. . . . . . . . . . . . . . . . .
4
3.
Construction and Financing of the ProjPc�
4
4.
Obligation to Make Project Capacity and
Energy Available . . . . . . . . . . . . .
5
5.
Rates and Charges . . . . . . . . . . . . .
. . . 5
6.
Budgets and Billing Statements . . . . . , .
. . . 7
7.
Obligations in the Event of Default . . . f .
. . . 7
8.
Transfers, Sales and Assignments . . . . f
9
9.
Surplus Capacity and Energy . . . . . . . r
9
10.
Insurance and Indemnification . . . . . . .
. . . 10
11.
Project Participant Direction and Review �.
. . . . I0
12.
Term . . . . . . . . . . . . . . . . . . .I
11
13.
Tp rmri nat lon and Amendments . . . . . . . .
. . . . 12
14.
I
Member Service Agreement . . . . . . .
_ 12
15.
Second Phase Agreement . . . . . . . .. .
. . . . 12
16.
Conditional Repayment to Project
Participants . . . . . . . . . . . . . .
12
17.
Tax Ccrrenant . . . . . . . . . . . . ..
A>
18.
Notices . . . . . . . . . . . . . . . . .
13
19.
Records and Ac c oisn r_ s . . . . . . . .
. . . . 13
20.
Reports to Other Ago ncies . . . . . . . .
14
21.
E
Reports to Project Pa-rticipants .
. . . . 14
22.
Headings . . . . . . . . . . . . . . . • I
14
23.
Opinions of Counsel . . . . . . . . . . .:.
14
24.
Construction . . . . . . . . . . . . . . .
. . . . 14
i.A1-9739.6
i .
41WIL7-FSc4510519:
25. Severability . . . . . . . . . . . . . . _ _ _ . 14
Z6 _ Counterparts _ _ _ _ _ _
APPENDIX A - Schedule of Project Participation
Percentages . . . . . . . . . . . . . . ! . . . . A-1
APPENDIX B _ Form of Opinion of Counsel . . . . . I B-'
L 4,L.mg3 6 ii. I 4JW96.•F,JCWJ05M
AGREEMENT FOR CONSTRUCTION, OPERATION AND FI42ANCING
OF COMBUSTION TURBINE PROJECT NUMBER TWO
This Agreement, dated as of august 5 1992, by and
among Northern California Power Agency, a joint pow rs aaencv of
the State of California (hereinafter called ^ �IC;,A" ) and the NCPA
members executing this Agreement (collectively,the'Project
Participants" and, individually, a "Project Partici ant"),
WITNESSETH=
WHEREAS, NCPA proposes to acquire and con6trvct or
cause to be acquired and constructed, and to operate or cause to
be operated, the Project (capitalized te =z used herein shall
have the meanings given such tein Section 1 hereof) as
described herein; and
�S, NCPA and certain of its members!ntered into
an 'Agreement for Financing of Planning and Cetrelo ent
Activities for Construction of Combustion Turbine Project No.
,rwo" dated as of July 23, 1990, providing fcr the financing of
certain planning and development activities in connection with
the Project (said Agreement, as it may be amanded and
supplemented from time to time, being hereinafter called the
"Second Phase Agreement"); and
W SRSSM, this Agreement is the "Third QhAse Agreement'
contemplated in the Second Phase Agreement; and
WHEREAS, NCPA and its members have entered into one of
three Member Service Agreements, effective February 12, 1981
(said Agreements, as they may be amended and supplemented from
time to time, and any successor agreements such as the Facilities
Agreement, being hereinafter called the "Member Seiiice
Agreement") , which provide for set -,rices which LN,-? , shall perform
for its members. and for the provisions to be coLit ined in second
and third phase agreements, such as the Second Phase Agreement
and this Agreement; and
WHEREAS, NCPA and the Project Parti,cipar s now wish to
enter into this Agreement to provide further for the
construction, operation and financing of the Project, the sale by
NCPA of capacity and energy of the Project to the Project
Participants, and the security for the Bonds to be issued to
finance the Project;
NOW THEREFORE, the parties hereto do ag�ee as follows:
1. Definitions. The following terns shall, for all
purposes of this Agreement, have the following meanings:
Uf-9279.6
(a) "Bond Resolution" means anizst 3me�c Prov -ding
for the issuance of aonds and the terms thereof and 4y be a
resolution, indenture of gust, order, agreement, ori other
instrument.
(b) "Bonds" means bonds, notes or other e�idences of
indebtedness of NCPA (including, without limit inn t3oIrntracts
relating to letters of credit or other credit enhancbment
devises, interest rate swap and other agreements relating to
interest rate or other cash-flow exchanges such as thsse
authorized by the Public Finance Contracts Law, and ctr�r
contracts which are characterized as debt by NC?A ate or prior to
the execution thereof) issued to finance or rQEirano'e the Project
and to finance or refinance any contributions- in-aid•of-
construction for construction necessary for the adjacent electric
system to interconnect with the Project and includes additional
bonds to complete the Project. For purposes of this Agreement,
Bonds shall be considered outstanding as of any date if such
Bonds have not been paid or if provision for the payment of the
principal, prsmium, if any, and interest on such Sands has not
been made in accordance with the Bond Resolution pursuant to
which such Bonds have been authorized.
(c) "Code" means the Internal Revenue Co e of 1986, as
amended, and the applicable regulations thereunder and shall
include any successors to such statute and regulations.
(d) 'CommissiW means the Commission wh�ch .is the
governing body of NCPA established pursuant to the Joint Powers
Agreement.
( e ) "Comissionerm means the represehr-atLve of a
member of NCPA on the Commission and shall include any alternate
designated by such member while acting as the member's
representative on the Commission.
(f) "Debt Service" means, with respect t<b any period,
the aggregate of the amounts required by each Bond Resolution to
be paid during said period into any fund or account created by
the Bond Resolution for the sole purpose of payinglor providing
ra
se r ,-e 9 f or paying the principal ( including s i nk i rig fund
installments) of and premium, if any, and interest on all the
Bonds from time to time outstanding.
(g) "Electric System" means, with respe�t to each
Project Participant, all properties and assets, real and
personal, tangible and intangible, of the Project Participant now
or hereafter existing, used or pertaining to the generation,
transmission, rransformation, distribution. and sale of electric
capacity and energy, including all additions, extensions,
expansions, improvements and betterments thereto and equipment
thereof; provided, however, that to the extent the Projecc
participant is not the Sole owner of an asset or or to
LAI -9Z39.6 4.11009 :•FJC-0S+OSr92
the extent that an asset or property is used in cart :or the
above described electric purposes, only t5e Project Partici-antis
ownership interest in such asset or property or cnl tha par: of
the asset or property so used for electric purzpcses , shallbe
considered to be part of its Electric System.
Ih) "Facilities Agreement' means 1e 1nrAt:;M
Facilities Agreement. dated as of June 27, 1991,amang the cities
of Alameda, Biggs. Gridley, Healdsburg, Lodi, Lompoc, Palo Alto,
Roseville, Santa Clara and Ukiah, the Plumas-SiennaRural
Electric Cooperative and the Turlock Irrigation DiS�ricc, as
amended and supplemented from time to time, and includes any
successor agreement.
W "Fiscal Year" means the then currenttfiscal year
of NCPA. which on the date of this Agreement is the ;period frcm
July 1 to the next succeeding June 30.
(J) "Full Operation Date" means the f irs� date when
the Project is capable of producing and delivering capacity and
energy in commercial operation, as shall be determined by the
Cormniss ion of NCPA in accordance with prudent utility practices.
(k) "Interconnection Agreement" means th4k
Interconnection Agreement among Pacific Gas and Electric Company,
NCPA, and certain members of NCPA. as the same may be amended and
suppl,tmentad from time to time, and including any successor
agreement.
(1) "Joint Powers Agraemenrll means the Joint Exercise
of Powers Agreement - Northern California Power Agency, dated as
of July 19, 1968, as amended, among the cities of klarmeda , Biggs,
Gridley, Realdsburg, Lodi, Lompoc, Palo Alto, R-edditig, Roseville,
Ganta Clara and Ukiah. the Plumas-Sierra Dural. Electric
cooperative, the Turlock Irrigation District and the Truckee
Donner Public Utility District, establishing NCPA.
(m) "Project" means a combustion turbine electric
generating resource with a nameplate capacity of approximately 49
megawatts located in the City of Lodi, California and related
facilities and interestu, including electric facilities necessary
for the Project to interconnect with the adjacent electric system
and all rights, properties and improvements necessary therefor,
including fuel and water facilities and resources and rights
thereto or therein, and capital improvements thereto (including
replacement of the generating unit presently included in the
Project but excluding any additional generating units unless
specifically approved by each of the Proje(:c Participants) that
may be constructed from time xo time.
(n) "Project Participation Percentage" means, with
respect to each Project Participant, the percentage of the total
capacity of the Project. and the energy associated with such
LAI -9239 6
3
41009-2 EJC-MI05,97
I
capacity, to which such Project ?arr.ici.p.ant is enti` 4 pursuanc
to the t>-_r<ns of this Agreement. The Project Particiaatior,
Percentage for each Project participant shall be ie p�?centage
set forth opposi,1e the name of such Project Paryicipant in
Appendix A hereto, as such Appendix A shall be amended; f:::m time
to time in accordance with this Agreement.
(a) "Project Participant" means Bach of theJNCPA
members executing this Agreement, together in each cas with
their respective successors or assigns.
(p) "Public Ficance Contracts Law" means Chapter 12 DC
Division 6 of Title 1 of the Government "ode of the State of
California, as the same may be amended and suoolemented from time
to time, and shall include any successors to such statute.
(q) "Revenues" means, with respect to each Project
Participant, all income, rents, rates, fees, charges, end other
moneys derived by the Project Participant from the ownership or
operation of its Electric System, including, without limiting the
generality of the foregoing, (i.) all income, rencs. rates, fees,
charges or other moneys derived from the sale, furnishing, and
supplying of electric capacity and energy and other services,
facilities, and commodities sold, furnished, or supplied through
the facilities of its Electric System, (ii) the earnings on and
Laccimp, derived from the investment of such income, rents, rates,
fees, charges or other moneys to tue extent that the use of such
earnings and income is limited by or pursuant to law to its
Electric System and (%ii) the proceeds derived by the Project
participant directly or indirectly from the sale, lease or other
disposition of all or a part of the Electric System as permitted
hereby, but the term "Revenues" shall not include (y) customers'
deposits or any other deposits subject to refund unti� such
deposits have become the property of the Project Partil�Cipant or
(z) contributions from customers for the payment of costs of
construction of facilities to serge them.
(r) "Trustsel means the entity or entities'�esignated
by NCPA as the Trustee under any Bond Resolution.
2. Purpose. The purpose of this Agreement is to
provide the terms and conditions of the financing, coHstrvcti,on
and operation of the Project by NCPA and the sale by NCPA, and
the purchase by the Project Participants, of the capacity and
associated energy of the Project.
e
3. Construction and Financing of the ProjAct. NCPA
will use its best efforts to cause or accomplish the construction
and financing of the Project, including obtaining all,necessazy
authority and rights therefor and performing all things necessary
or convenient in connection therewith. Each Project Participant
will cooperate with NCPA to that end and will give any and all
clarifying assurances by e:<Acu-�ing supplemental agreements that
may be requested by NCPA' s legal Counsel to make th chi g.3c �cns
herein more specific, to satisfy legal rec-uirements provide
secur i [.y for the Bonds.
4. Obligation to Make Project Capacity aid Energy
Available. (a) Pursuant to the terms of chis Aare^ -rot, "CPA
shall make available or cause to be made available, and each
Po�ciat isconhPcatiePrctv.�h_ahQ�-raripnPp7ectshall
Percentage ecaw.J of
the Project and the enerqy associated wi-ih such capacity.
Subject to the terms of this Agreement, and any directions of the
Project Participants pursuant to Section 11 hereof. NC?A shall
operate the Project, or cause the Project u<:) be operated, in
accordance with the principles contained in the Facilities
Agreement, as the same may be amended and suoplemenr:ed from time
to time.
(b) NCPA will remain available to do allthings
necessary and practical to deliver or cause to be d livered to or
for each Project Participant, such Project Participant's Projec:
Participation Percentage. of the Capacity of the Project and the
energy related thereo. Such delivery shall be at points mutually
agreed upon by NCPA and each Project Participant. Such agreement
shall not be unreasonably withheld by either NCPA or a ?reject
Participant. NCPA will remain available to make or cause to be
made all necessary and practical arrangements for tiansmission of
such capacity and energy to such points over the lines of NCPA or
others. Wheeling or delivery services by NCPA with i respect to
the delivery of Project energy to the Project Participants shall
be as provided in service schedules as set forth in;,Azticle LII
of the Member Service Agreement applicable to the respective
Project Participants. 1,
5. Rates and Charges. (a) Commencing Oh the Full
Operation Date, NCPA shall fix charges to the Project
Participants under this Agreement in accordance with this Section
to produce revenues to NCPA for capacity and energy of the
Project equal to the amounts needed by NCPA to meet the total
costs of NCPA to provide capacity and energy from e Project,
including but not limited to: (i) Debt Service on the Bonds and
other payments required under the Bond Resolutions other than the
payments described in [ U) and (iii) below; E i i ) any other
operation, maintenance and replacement costs of the,Project,
including the cost of fuel, a reasonable reserve Eos
contingencies, and all ocher Project costs not described in (i)
above or (iii) below; and (iii) the costs and expenses of AICPA
for delivering Project capacity and enerqy pursuantto Section
4 fib) hereof. NCPA shall fix charges to the Project: Qarticioaslts
to produce revenues to NCPA from the Project to meed the costs
described in (i above based pn PrQject,?articipaei n
Percentages. The costs described in (i-) above wil be divided
between capacity charges and energy charges as prov�d¢d in the
Facilities Agreement. Capacit./ chanes for the costs described
LAI -9239.6 I 41 W9•2- EFC,031U379:
in (ii) above shall be based on P_:Djec-- Participation rercentag¢s
applied to such costs. E'znergv charges fog the costs described in
( ii) above shall be based on actual energy deliveries too each
Project Participant from the Froject. If NCPA delivers Project
capacity and energy to or for any Project Participant pursuant to
Section 4(b) hereof, NCPA shall w.x cha_aes to each such Projecr.
Participant so that such Project Participant shall pay;only the
costs descried in (iii) above which are attributable do such
Project Participant.
(b) To the extent that the funds provided ulder
Section 5(a) of this Agreement at any tine and for any reason,
including without limitation that the Full Operation Date has not
occurred, are not sufficient for such purposes, each Project
Participant shall pay to NCPA an amount equal to such Project
Participant's Project Participation Percentage of the Debt
Service on the Bonds and all other payments required to be made
under the Bond Resolutions. The obligations under this Section
5(b) are incurred by each Project Participant for the benefit of
future holders of Bonds, shall co=ence and continue to exist and
by honored by the Project Participants',whet.her or not capacity
and energy from the Project is made available or Eurni�3hed to
them at all times or at all and constitutes ax obligation to pay
all such costs whether or not capacity and energy from the
Project is made available or delivered or provided.
(C) Notwithstanding that NCPA may utilize skrvices
under the Interconnection Agreement in complying with Section
4(b) hereof, any payments required to be made by, or costs
incuried by, NCPA or a Project Participant pursuant to Section
9.5 of the lntercornnectiQn Agreement shall not be made under this
Agreement.
(d) Each Project Participant is obligated do make
payments under this Agreement solely from the Revenues of, and as
an operating expense of, its Electric System. Nothing herein
shall be construed as Prohibiting any Project Participant from
using any other funds and revenues for purposes of satisfying any
provisions of this Agreement.
(e) Each Project Partici.r,)ant shall make pa�nents under
this Agreement whether or not the Project or any part thereof is
completed, operable, operating or retired and notwithstanding the
suspension, interruption, interference, reduction or curtailment
of Project output or the Project capacity and energy Contracted
for in whole or in part for any reason whatsoever. Such payments
are not subject to any reduction, whether by offset or otherwise,
and are not conditioned upon oe �formanc'e by NCPA or any other
Project Participant under this Agreement or any other agreement.
(f} No Project Parri.cioant shall be liableiunder this
Agreement for the obligations of any other Project Pa�t.icipant.
Each Project Participant shall be solely responsible end liable
LAI -9U9.6 6 Ifl09•'.• F1C�StQSi 9:
for performance of its obligacicns ender Ails Agreement and .for
the maintenance and operation of ins rescective viec4ric System.
?he obligation of each Project Participant to ;Hake oayr encs under
this Agreement is a several obligation and nnr a joint; obligat i+gin
with those of the other Project ?artzcia:,ts,
E
(g) Each Project Part covenants and Jagrees that
it shall, at all times, operate the properties of its=lec:.ric
System and the business in connection therewith 4.n ane_"C ent
manner and at reasonable cost and shall :r�ai.ntain its �' �c Pic
System in good repair, working order and condition.
(h) Each Project Participant covenants an,�cacity
agrees to
establish and collect fees and charges for electric and
energy furnished through facilities of its Electric System
sufficient to provide Revenues adequate to meet its cbligations
under this Agreement and to pay any and all other amounts payable
from or constituting a charge, lien, or encumbrance upon any or
all such Revenues; provided that the obligation of the Project
Participant to make payments under this Section 5 shall not
constitute a legal or equitable pledge, lien or encumbrance upon
any property of the Project Participant or upon any of its
income, receipts or revenues; and further provided that neither
the Project Participants nor the State of California(�r any
agency or political subdivision thereof shall ever be:obligated
or compelled to levy ad valorem taxes to make the payments
provided for in this Section 5.
6. Budgets and Billing Statements. (a) P�ior to the
beginning of each Fiscal Year, the Commission of NCPAwill adopt
an annual budget for such Fiscal Year for costs and ezenses
relating to the Project which may be part of a multi-year budget
containing such information. NCPA shall prcmocly give notice to
each Project Participant of its projected share of such costs and
expenses.
(b) NCPA shall prepare and send out billi.n4 statements
for amounts payable by the Project Participants pursuant to
Section 5(a) of this Agreement as provided in the Facilities
Agreement and such billing statemerts shall be subject to the
applicable terms and conditions of the Facilities Agreement;
provided, however, that, notwithscanding anything herein or in
the Facilities Agreement to the contrary, NCPA shall bill each
Project Participant for amounts due pursuant to Section 5(a) of
this Agreement at such times and in such amounts that NCPA will
receive moneys in time to make all payments required � the Bond
Resolutions when die.
7. Obligations in the Event of Default. (a) Moon the
failure of any Project !?arc_ is ipan: to make any paymen in full
when due under this Agreement, NCPA shall make writteh demand
upon such Project Parr_ic i parr -, and if said failure is`` not
U1 -9M9.5 7 1 x1009-:- EJC -OW5j9'_
i
remedied within thirty ( 3 o ) days am the date of such de -,a ^d ,
such failure shall constitute a default at the !
expiration of sucl thirty (30) day period. Notice of uch demand
shall be provided to each other Project Partici art b NCPA,
(b) Upon the failure o= any Project Participant to
perform any of its obligations'hereunder, except for t,ne
obligation to make any payment in f u I I when due under `this
Agreement, NCPA Shall give such Project Participant w�it[e
notice of such failure and iw such failure is not remedied within
sixty (60) days from the date of such notice. such failure shall
constitute a default at the expiration of such sixty (60) day
period. A copy of any such notice shall be provided to each
other Project Participant by NCPA.
E
(c) In addition to the rights and remedies lavailable
to NCPA pursuant to subsection (d) of this Section, may
protect and enforce its rights hereunder by suit or suits in
equity or at law, whether for the specific performance of acy
covenant herein or for damages or in aid of the execution of any
power granted herein or any other remedy available under any
provision of applicable law. No remedy by the terms of this
Agreement conferred upon or reserved to NCPA is intended to be
exclusive of any other remedy, but each and every such remedy
s?ull be cumulative and shall be in addition to ev8n1 .other
remedy given under this Agreement or existing at law cr in equity
or by statute on or after the effective date of this Agreement.
(d) Upon the failure of any Project Participact to
make any payment which failure constitutes a default under
subsection (a) of this Section, each Project Participant
severally agrees that, (i.) the Project Participation Percentage
of each nondefaulting Project Participant shall be automatically
increased by a pro rata share (based on the Project Farticipation
Percentages of all nondefaulting Project participants) of the
defaulting Project Participant's Project Entitlement Percentage
for the remaining term of this Agreement and (ii.) theidefaulting
Project Participant's Project Participation Percentage shall be
reduced correspondingly; provided, however, that the sum of such
increases for any nondefaulting Project Participant shall not
exceed, without written consent of such nondefaulting Project
Participant, an accumulated maximum of twenty-five pe�cent (250)
of the nondefaulting Project Participant's original Project
participation Percentage, as set forth in Appendix A hereto as
such Appendix A may be revised pursuant to subsectioni(c) of
Section 12 of this Agreement.
(e) Each nondefaulting Project Participant which has
its Project Participaticn Percentage increased pursuit to
subsection (d) of this Section, shall be entitled to the rich; s
which the defaulting Project Participant loses upon the default
with respect _a such pro}ect Participation Percentage, and shall
assu.mp, subject to subset _ion it', of this Section. 31� of e
Ul-92MA 9 1 41()09_.-
' E:C-II3:a3M.
i
I
cbligations of the defaulting Project iar _ _ oars •quit . respe-c_ to
such Project Participation Percentage 'Lereu2d er, I^c;ease5
the Project Particic.at on Percentages o; the nonde au.ci:^g
Project Participants shall be applicable c,� any pay-memts due and
not paid by the defaulting Project Far e is i pan-. at tire of C -;e
increase and all subsequent payments due and not paid1by c e
.defaultingProject Participant. L
(f) If any Project Pa rr is ipant' s Project
Percentage is increased pursuant to subsection (d) othis
Section, the defaulting Project Participant shall not be relieved
of any of its obligations or liabilities under this A :' emen,. and
each Project Participant whose Project Par=icipat:on Percentage
is so increased shall have a right of recovery from the
defaulting Project Participant to the extent of acy damaQ es
sustained as a result of such default and the respective zncrease
in Project Participation Percentage caused by the defaulting
Project Participant.
(g) NCPA may pledge and assign this Agre"nt and any
or all of its right, title and interest in, to and under this
,agreement, including without limitation HCPA.'s rights to receive
all or any portion of the payments hereunder from Project
Participants, to secure the payment of Bonds, Notwithstanding
any other provision of this Agreement, upon notice from NCPA each
Project Participant shall make pay-,nQ n c s due by it hereunder
directly to a Trustee for Bonds specified in such notice. Such
pledge and assignment by NCPA shall be made effective for such
time shall be provided in the applicable Bond Resolution.
(h) In addition to any rights which a Tro�tee may have
as an assignee pursuant to subsection (g) of this Section, each
Trustee shall be a third party beneficiary hereof and shall have
the right as a third party beneficiary to initiate and maintain
suit to enforce this Agreement to the extent provided in the
applicable Bond Resolution.
8. Transfers, Sales and Assignments. Eawh Project
participant has full and unfettered rights to make transfers,
sales, ass,igrmants and exchanges (collectively "transfers") of
such Project Participant's Project Participation Percentage of
Project capacity and/or the energy associated therewith and
rights thereto except as expressly provided otherwise in the
Facilities Agreement and this Agreement. Except as provided in
subsection (b) of Section 9 of this Agreement, such transfers
shall not affect any of the cbligations of the Project
Participant under this Agreement.
9. Surplus Capacity and Energy. (a) Whe6 a Project
Participant has surplus capacity and/or energy frcm the Project,
NCPA shall, if requested by such Project Parcictpantico do so,
use its best efforts co sell such su=, lus capacity akd/or eneru;r
on behalf of such Project Par;.icipan,.; provided, orh -
LA i -M9.6 9
Project Participants shall have a right of fizst re;ulal to such
surplus capacity and/or energy in proportion to -,he-'(Irespective
Project Participation Percentages, and other .DCPA memlers Which
are parties to the Facilities Agree-msnt shall have th+ second
right of refusal to such surplus capacity and/or ener,Zy, and
other NCPA members shall have the third right of refusal to such
surplus capacity and/or energy. The sales price for any such
surplus capacity and/or energy shall be as detetnnined;by the
buyer and seller of such surplus capacity and/or ene_-J-,i.
(b) Notwithstanding the sale by NCPA of all or a
portion of a Project Participant's surplus Project ca�acit_y
and/or energy, the Project Participant shall rerRain liable to
NCPA to pay the full amount of its share of Project costs,
determined as provided in this Agreement; -as if such sale had not
been made, except that -such liability shall be -reduced to the
extent that NCPA shall receive payment from the purchaser of such
surplus Project capacity and/or energy.
10. Insurance and Indemnification. NCPA shall obtain
and continue in force, or cause to be obtained and continued in
force, property'insurance- for the Project and liability insurance
with respect to the Project, covering such risks (including
earthquakes), in such amount's and with such deductibles as shall
be determined by NCPA. NCPA shall indemnify and hold harm_Less
each Project Participant from any liability for persohal injury
or property damage resulting from any accident or occurrence
arising out of or in any way related to the construction or
operation of the Project: provided, however, that such
indemnification by NCPA shall be limited to the extent the
proceeds of insurance and other moneys are available to NCPA for
such purposes.
11. Project Participant Direction and Rey,i�w.
(a) NCPA shall comply with all lawful directions of the Project
Participants with respect to the Project, while not stayed or
nullified, to the fullest authorized by law and to the
extent such directions are not inconsistent with, and do not
impair NCPA's ability to perform its obligations under, any Bond
Resoiution.
(b) While NCPA shall own, operate and maintain the
Project in accordance with this Agreement, in recognition of the
Project Participants' interest in the Project, NCPA agrees that
it shall take no action with respect to the Project pursuant to
the authorization or aoproval of its Commission if a Commissioner
representing a Project Participant requests that suchE
authorization Or approval be based upon Project Participation
Percentages and such authorization or approval does nbt receive
the affirmative vote of Commissyoners representing Prbject
Participants then having a rcrnrned Project Participation
Percentage of at least 55 .
[AI.9239 610I -.1W9-:•EJC-M0Sr1r7
(c) Any Project Part:cimant nay veto any puthorizat.ion
or approva of the Commissicn reiat4nc to 1,e Projec tna�. was
not taken by a 650 or greater rrcj;-cv art_c acion ?ercbntage
vote within 10 days fallowing the mailing of notice 6f such
Commission action, by delivering written notice of v6 to to NCPA.
unless at a meeting of the Ccmmission called for they purpose of
considering the veto and held within 30 days after dL- li;rer-f of
such written notice of veto, the Commissioners representing
Project Participants having a combined Project Participation
Percentage of at least 651,; at such time shall vote tb override
the veto.
(d) The 65# of Project Participaticn Perc6ntage
specified in subsections (b) and (c) of chis Section shall be
reduced by the amount that the Project Percentage
of any Project Participant shall exceed 35% but su65o shall
not be reduced below of MAJOR i 1")e iN ipv73'oc£,si, Ii
12, Term. (a) Subject to subsection (b)this
Section, this Agreement shall take effect when it ha been duly
executed and delivered to NCPA by Project Participants the
initial Project Participation Percentages of which, in the
aggregate, equal one hundred percent (300°s),
(b) Notwithstanding the provisions of sub�ect:.on (a)
of this Section, it is agreed by all signatories hereto that in
consideration for HCPA's signature hereto, and for its commiment
to use its best efforts to obtain the signatures of other NCPA
members hereto, each Project Participant which executes and
delivers this Agreement to NCPA prior to the effectiveness o�
this Agreement agress not to take any action to withdraw from
this Agreement or otherwise affect its status as a Project
Participant hereunder before July 23, 1992. Upon the
effectiveness of this Agreement pursuant to subsection (a) of
this Section, no Project Participant shall have any right to
withdraw firxll this Agreement or otherwise affect itsistatus as a
Project Participant hereunder.
(c) The term of this Agreement shall contknue until
the later of (i) the expiration of the useful life of the Project
or (ii) the date on which no Bonds remain outstanding; provided,
however, that in no event shall the Germ of this Agreement with
NCPA as a party extend beyond the date of termination of NCPA,
I n the event of the termination of the existence of NCPA it is
the intent of the Project Partiripanrs that this Agreement be
construed as an agreement among the Project Participants.
(d) Upon the cermination of this Agreement and at the
req,lest of any Project Participant. all Project Part'icioants
desiring to partake shall be entitled to an equitable
distribution of, or an equitable o-wnershio interest Vin, the
Project, based upon their respective Project Pa:Cic=aeion
Percentages, upon the payment to NCPA of the sum of one dollar.
W -M9.6 i i I -IIW9-:•EJC-WIQ5;7:
13. Te=inatioa and kmAnd.mento, (a) This lgre,�-rnen--
shall not be subject �:c termination by any party under any
circumstances prior to the tern specified in subsecc-'cn (c) :�t
Section 12 hereof, whether based upon the default of any oc?ier
party under this Agreemenr_, the release of any party Qt any o
its obligations hereunder or for any other cause what$oexrer.
(b) So long as any Bonds are octstanding, his
Agreement shall not be amended, modified or other.: changed or
rescinded by afire manc of the parties without the con enc of each
Trustee for Bonds whose consent is required under the applicable
Bond Resolution; provided that no amendment to Appendix A hereto
pursuant to subsection (d) of Section 7 hereof shall require Ye
consent of any Trustee to become effective.
14. Member Ger-rice Agreement. This Agreei nt is a
service schedule and a third phase agreement attached c.c and
incorporated into the Member Service Agreement. This Agreement
shall be construed in accordance with the more speci¢ic terms.
governing the general relationship between the NCPA and its
members set out in the Member Service Agreement in connection
with the ?roject,
1.5. Second Phase Agreement. The Second Pdase
Agre spent., as it relates to the Project Participants, is
superseded by this Agreement. ,
16. Conditional Repayment to Project Participants.
All payments and advances heretofore made by Project Participants
with respect Go the Project, excluding interest paidlon
delinquent payments, shall be repaid to each of the Project
Participants making such payments and advances out of the
proceeds of the first issuance of Bonds which can economically
prcvi.de therefor, or as and when there are sufficient funds
available from partial sale of Bonds, if Bonds are issued to
finance the Project. Such reimbursements shall be Tade within 60
days following the sale of any Bonds and shall include interest
com-p�%t8d monthly at a rate equivalent to the end of the month
reference rate of the F•ank of America `I'T&SA. Any interest due
under the third paragraph of section 1 of the Second Phase
Agreement and unpaid shall be deemed due pursuant to this Lection
16 and deducted. from the repayment. If NCPA d e t e ,rnl4 n e s to
complete the Project, but is not successful in obtaining all
necessary approvals and financing therefor, there shall be no
reimbursement except out of unused Project funds including those
then in the working capital fund, along with all other recei.ots
to which NCPA is entitled in connection with the Project.
17. Tax Covenant. Notwithstanding any n�her provision
of this Agreement, neither NCPA nor any Project Participant shall
transfer, assign. sell or exchange r,ny portion of the capacit;/
and/or energy of the Project, or any other iilt?resc' 'n the
Project or the capacity and/or energy thereof, directly or
LA -92396 1.� 41009-:.FJC 05M19:
I
indirectly. in any manner, o: shall take, or to r -he e<tetnt i can
control the same permit to be talon, any other ac�,ion or actions,
which would adversely a f e e t t he exclusion of the L nt-e re s t on any
of the Eonds fromgross i^come for federal inccma tax out-ooses
under Section 103 of the Code, including without Iimtcation, by
reason ofi classification of any of such Bonds as a "private
activity bond* within the meaning of said Code.
18. Notices. Any notice, demand or reovesit required
or authorized by this Agre--ment to be given shall be in W-. iz.::g,
and shall either be personally delivered to the reo%sentative of
the Project Participant on the Commission. if to a ProjQcc.
Participant, or to the General Manager of NCPA, if to NCPA, or
transmitted by tel,ecopy, facsimile or other elec,-ronic means tc
NCPA or the Project Participant at the address shown ion the
signature pages hereof addressed to such parties. T;,e designaced
party and any such address may be changed at any tine by written
notice given to the Secretary of the Commission who shall
thereupon give written notice of such change to each. Project
Participant. Any such notice. demand or request shall be deemed
to be given when so delivered.
19. Records and Accounts. (a) NCPA shall keep
accurate records and accounts for the Project, for ch
identifiable service which it supplies to any Project Participant
through this Agreement and for other transactions of NCPA related
to the Project. Such records and accounts shall be kept in
general accordance with the Uniform System of Accounts, Prescribed
for public Utilities and Licensees Subject to the Provisions of
the Federal Power Act (18 CF?, 101) , as prescribed by the Federal
Energy Regulatory Commission, as amended from time to time. NCPA
shall cause those records and accounts to be audited annually by
a Firm of independent certified public accountants experienced in
electric utility accounting and of national reputation. All
ocrPatasccornisecioetaaaresooierjetParticipants nsPtnnYannabletm. A
copy of the annual auditor's report shall be submiteed to the
Project Participants not later than four months after the end of
each Fiscal Year. All records are su_bj,--ct to audi: at the
request of any Project Participant provided that sudh audits
shall be conducted at the expense of the Project Parcic,ipant (s)
requesting them.
20. Reports to Other Agencies. NCPA shall submit such
reports and records which are required by the CaliFtrnia Energy
Commission. the Federal Energy Regulatory Commission or any other
Local, state or federal agencies having jurisdiction in
connection with the Project,
21. Reports to Project Participants. Fo�lowing the
Full operation Date NCPA shall prepare and issue to; -e Project
participants the tollowirg reports monthly:
LA t-9.39.6 13 1 .41 oov.:. EJc�M1a5A1
(a) Project Operating Reports.
(b) Project Financial Operating Statement.
(c) Status of the Project budget
(d) Such additional reports as are request4d by the
Project Participants,
22. Headings. The headings of the s e c t i onJ hereof are
inserted for convenience only and shall not be deemed;a part of
this Agre-ement .
E
23. Opinions of Counsel. Each Project Par�ic=pant
shall, if requested by NCPA in conr,ectaon with the issuance of
any Bonds, cause an opinion or opinions in substantially the form
attached hereto as Appendix 3 to be delivered by an attorney or
firm of attorneys acting as counsel for such Project Participant.
24. Construction. This Agreement shall bei construed
in accordance with the laws of the State of Californih.
25. Severability. If any one or more of the covenants
or agreements provided in this Agreement to be perfo med should
be determined to be invalid or contrary to law, such covenant or
agreement shall be deemed and construed to be severable from the
remaining covenants and agreements herein contained and shall in
Lo way affect the validity of the remaining pzovisions,of this
Agreement.
26. Counterparts. This Agreement may be �xecuted in
any number of counterparts, and each executed counterpart shall
have the same force and effect as an original instrument and as
if NCPA and all the Project Participants to all of the
counterparts had signed the same instrument. Any signature page
of this Agreement may be detached from any counterpart of this
Agreement without impairing the legal effect of any signatures
thereon, and may be attached to another counterpart of this
Agreement identical in fo r.rk thereto but having attached Co it one
or more signature pages.
IN WITNESS WHEREOF, each Project Participaht has
executed a counterpart of this Agreement with the approval of its
governing body, and represents and warrants that the Project
Participant has all requisite authority, and has duly agreei to
be bound by all of the terms and conditions of this Agreement,
and NCRA has executed each counterpart of this Agreement in
accordance with the authorization of its Commiision,
NOR7HSF.N CALIF0,1U#TA POWER,
AGENCY
ADDRESSES FOR NOTICES
Northern California Pdwer Agency
1:30 Cirby Way
L.I-M94 14 1 +1004-.-EJC*5ro5l9:
i
Roseville, CA 95678
By Attention: General Maaiaaer
Telecopy: (916) 783-7693
And
CITY OF ALAMEDA
By
Arid
City of Alameda
Bureau of E-lectricity
2000 Grand Avenue
Alameda, CA 94501
Attention:
Telecopy:
CITY 0 L,ODI City of Lodi
221 west Pine Street
Lodi, CA 95241
Attention:
Telecopy:
r
CITY OF LOMPOC
By,
And
3
CITY OF ROSEVILLE
By.
And
LA 1-4239.6
City of LOMPOC
100 Civic Center Plaz
Lompoc, CA 93438
Attention:
Telecopy:
City of Roseville
2090 Hilltop Circle
Roseville, CA 95678
Attention:
Telecopy:
15 +toosa-rJc-auos.VZ
SCHEDULE OF PROJECT PARTICIPATION PERCENTA�
Project
Panic mint
City of Alameda
8�
City of Lodi
City of LOMPOC
city of Roseville
TOTAL
LAX -9M.6
APPMMIX A
Proj4ct
Entitlement
MY. C0UNCIL
I&WE W. PINKER1C W, Maya
PHILIP A. PENN[No
Mayor Pro TemPom
DAVID IM HINCHMAN
JACK A. SIEGLOCK
JOHN R. IMUKlyl SNIDER
July 31, 1992
CITY OF LODI
CITY HALL, 221 WEST PINE STREET
P.O BOX 3006
LODI. CALI FORNIA 95241-1910
(2041334-5634
FAX in% 31)6795
Northern California Power Agency
180 Cirby Way
Roseville, California 95678
Ladies and Gentlemen:
TV'K)%V%5 A ?tT1R';0r
C tm. %14nagrr
SLICE &I. KEm1Ct<E
C+tv C:cri
Boo %u%NST
COV ACFMrwv
I am acting as counsel to the City of Lodi, a munici�al corporation
(the "Project Participant"), under the Agreement for Construction.
operation and Financing of Combustion Turbine Project NUmbet Two, dated as
of July 23, 1990 (the"AgrettIent") among the Project Participant, Northern
California Power Agency (the "Agaxy') and certain othet entities (the
"Project Participants"), and I have acted as counsel to the Project
Participant in connection with the matters referred to herein. As such
counsel, I have examined and am familiar with M those documents relating
to the existence, organization and operation of the Project Participant,
(ii) all necessary documentation of the Project Participant relating to the
authorization, execution and delivery of the Agreement, and (iii) an
executed counterpart of the Agreement.
Based upon the foregoing and an examination of law and such other
information. papers and documents as I deem necessary r advisable to
enable ate to render this opinion, including the Constitution and laws of
the State of California, together with other governing instruments,
ordinances and public proceedings of the Project Participant. I am of the
opinion that:
1. The Project Participant is a municipal corporation, duly
created. organized and existing under the laws of the State of
California and duly qualified to furnish electric service within the
state of California.
2. The Project Participant has full legal right, power and
authority to enter into the Agreement and to carry out and
Consummate all transactions contemplated thereby, and the Project
participant has complied with the provisions of applicable law in all
matters relating to such transactions.
3. The Agreement ha6 been duly authorizeb, executed ani
delivered by the Project Participant, is in full force and effect as
to the Project Participant in accordance with its terms and, assuming
that the Agency has all the requisite power and authority. and has
taken all necessary action. to execute and deliver such Agreement,
constitutes the legal, valid and binding obligation of the Project
Participant enforceable in accordance with it5 terms. .
4. Payments by the Project Participant "er the Agreement
will constitute an operating expense of the Project Participant and
are to be made solely from the Revenues of its Electric system as
provided in Section Sid) of the Agreement.
5. No approval. consent or authoriaatio� of any other
governotental or public agency, authority or persoh is required for
the execution and delivery by the Project Participant of the
Agreement, or the performance by the Project Participant of its
obligations thereunder.
G. The authorization. execution and delivery of the Agreement
and compliance with the provisions thereof will not Conflict with or
constitute a breach of, or default under, any inst ent relating to
the organization, existence or operation of the Project Participant,
or any comnitment, agreement or other instrument to which the Project
Participant is a party or by which it or its property is bound or
affected, or any ruling, regulation, ordinance, judgment. order or
decree to which the Project Participant for any of its officers in
their respective capacities as such) is subject or.any provision of
the laws of the State of California relating Ito the Project
Participant or its affairs.
7. There is no action, suit, proceeding, inquiry or
investigation at law or in equity, or before any court, public board
or body, pending or, to my knowledge, threatened against or affecting
the Project Participant or any entity affiliated with the Project
participant or any of its officers in their respective capacities as
sucb [nor to the best of my knowledge is there any basis therefor),
which questions the powers of the Project ParticipaAt referred to in
paragraph 2 above or the validity of the proceedings taken by the
Project Participant in connection with the authorization, execution
or delivery of the Agreement, or wherein any unfavorable decision.
ruling or finding would materially adversely affect the transactions
contemplated by the Agreement, or which, in any way` would adversely
affect the validity or enforceability of the Agreemeen4.
The opinion expressed in paragraph 3 above is qualified to the extent
that the enforceability of the Agreement may be limited by any applicable
bankruptcy, insolvency. debt adjustment, moratorium, reorganization. other
similar laws affecting creditors' rights generally and to the availability
of any particular remedy.
Thia opinion is rendered only with respect to the
of California and the United States of America, and is
the Agency. No other person is entitled to rely on thi
you rely on it in connection with any transactions
described herein.
Sincerely,
BOB W. MCHATT
City Attorney
BK:vc
LUL of the State
addressed only to
opinion, nor may
lather than those