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HomeMy WebLinkAboutResolutions - No. 84-186 RESOLUTICN NJ. 84-186 RESOLUfICN APPROVI� .AGRE8.VlENT FIB 'IRANSFER OF RIGITS 'IO CAPACITI AND ENERGY OF GIDIBER\W.. GENERATIR:r PROJECT NU\'13ER 3 RESOLVED, that the City Cotmci 1 of the City of Lodi does hereby approve agreement for transfer of rights to Capacity and Energy of Geothermal Generating Project No. 3, a copy of which agreement is attached hereto marked Exhibit "A" and thereby made a part hereof. Dated: Decenber 5, 1984 I hereby certify that Resolution No. 84-186 was passed and adopted by the City Council of the City of Lodi in a regular meeting held Deceni>er 5, 1984 by the following vote: Ayes: Council I.Vert>ers -Hinchman, Olson, Reid, and Snider (Mayor) Noes: Comici I l\tlermers -Pinkerton Absent: Council Merrbers -None � p,. � Alice M. Reimche City Clerk 84-186 ,. AGREEMENT FOR TRANSFER OF RIGHTS TO CAPACITY AND ENERGY OF GEOTHERMAL GENERATING PROJECT NUMBER 3 .. Dated as of October 1, 1984 By a_nd Among City O•f Biggs City of Gridley City of Healdsburg City of Ledl City of Palo Alto City of Roseville City of Ukiah Plumas-Sierra Rural Electric Cooperative and Turlock Itrigation District 1. 2. 3 • 4. s. 6. 7. 8. 9. 10. 11. 12. 13.. 14. 15. 16. TABLE OF CONTENTS • Page Definitions •• •• •• •• •• •• • • •• • 2 Purpose . . . . . . . . •·. . . . . . . . . • 4 Construction and Operation of Project •••• 4 Transfer of Rights to Capacity and Energy of the Project •••••••••••••••• 4 Rates and Charges •••••••••••••• 5 Ann ual Budget and Billing Statement ••••• 6 Obligations in the Event of Default under this Agreement •••••••••••••••• 7 Obligations in Event of Default under the Third Phase Agreement ••••••• ••••• 8 Transfers, Sales and Assignments of Transferred East Block Entitlement Percentages ••••••••••••••••• 9 surplus Transferred East Block Entitlement Percentages ••••••••••••••••• 10 Direction and Review ••••••••••••• 11 Insurance and Indemnification •••••••• 11 Intention to Amend Third Phase Agreement ••• 11 Term • • • • • • • • • • • • . . ... • • • . .12 Termination and Amendments Miscellaneous • • • • • • • • • • •• •• • • • • • • • • • • •. 12 .12 APPENDIX A -Schedule of Transferring Participants and Transferred East Block Entitlement Percentages •••••••• 1 APPENDIX B - Form of Opinion of Counsel ••••••• 1 -i- • AGREEMENT FOR TRANSFER OF RIGHTS TO CAPACITY AND ENERGYOF GEOTP.ERl-'AL GENERATING PROJECT NUl1BER 3 This Agreement, dated as of October 1, 1984, by and among the Transferring Participants (capitalized terms used herein shall have the me a nings given such terms in Sectio n 1 hereof) and the Turl ock Irriga tion Dintrict, WITNESSETB : WHEREAS, each of the Tra nsferring Participants has entered into the Thi rd Pha se Agreement with NCPA pursuant to which NCPA· has agreed to provide, and each of the Tran sferring Participants has agreed to take or cause to be taken, their respective East Block Entitlement Percentages of the capacity and energy of the Preject1 and. WHEREAS, the Transferring Participants have determined to trans£ er a portion of their respect ive East Block Entitlement Percentages of the capacity and energy of the Project to the Di.strict on the terms and con ditions herein co ntained; and WHEREAS, NCPA has financed the cost of the Project through the issua nc e of the following Bonds:· $230,000,000 aggregate princi­pal amount of its Geothermal Project Numbe r 3 Revenue Bonds, 1983Series A, $90,000 ,.000 aggregate principal amount of its Geothermal Project Number 3 Short Term Commercial Paper Notes, Series A, and $400,000,000 aggregate principal amount of its Geothermal Project Number 3 Revenue Bonds, 1984 Series A, a portion of the preceeds of which wer e applied to the payment: of sueh Notes; a11e WHEREAS, the Third Phase Agreement provides that the Transferring Participants ar e required te make the payments relating to th eir respective East Block Entitlement Percentages of the capac­ity and energy of the Project specified in the Third Phase Agreement, includ ing payments with respect to Bonds, whether or not the Project is completed, operable r operating or retired and notwithstanding the susoension, interruotion, interference, reduction or curtailment of ProJect output or the capacity and energy contracted fer in whole or in part for any reason whatsoever: and WHEREAS, the District has agreed to acqu ire the Permanent Transferred East Block Entitlement Percentages of the capacity and energy of the Project on the terms and conditions contained herein, including the obliga tion to make payments with respect to suc h Perrr.ane nt Tr ansferred East Block En titlement Percentages to the extent tha t the Transferring Par tic ipants are obligated to make -1- ' payments for such rights to capacity and energj,· of the Project under the Third Phase Agreement: and WHEREAS, the District has agreed to acquire the Transfer red East Bloc k Entitlement Percentages of the capacity and energy of the Project in excess of the Permanent Trar.sf Prr&d East Block En titlement Percentages on the terms and conditions contained herein, including the obligation to make payments with respect to such 'l'ransi:l:!'rred East B lock Entitlement Percentages to the extent t�at the Transferring Participants are obligated to make payments fer such rights to capac­ ity and energy of the Project under the Third Phase Agreement: pro­ v iced th at NCPA is able to contr actually arra nge for delivery of such capacity and energy to the Distric t on a firm basis, subject; to norma l tr ansmission emergency out ages and curtailment: and WHEREAS, the tr ansfer to the Disttict of the Transferred East Block Entitlement Percentages of the capacity and energy of the Project is authorized under the Third Phase Agreement and under the existing Bond Resolutio ns: NOW THEREFORE, the parties hereto do a.gree as follows: 1.Definitions. Terms used herein which are defined in the Third Phase Agreement shall have the same meaning.s herein as are given such terms in the Third Phase Agreement. In addition, the fol­lowing terms shall, for all purposes of this Agreement, have the fol­ lowing meanings: (a)•oist rict• means the Turlock Irrigation District. (b)"District Electric System" means all properties and assets, reAl and personal, tangible and intangible, of the District now or he1;eafter existing, used or pertaining tG> the gen eratie.n, tran smission, tr ansformati�n, distribution and sale of electric capacity and energy, including all additions, extensions, expansiens, improvements and bettex;-ments thereto and equippings thereof; pre­ vided, however, that to the extent the District is not the sole owner of an asset or pr operty or to the extent that an asset o.r property· is used in part for the above described electric purpos es, only the District's ownership interest in such asset or property or only the part of the asset or property so used for electric purposes shall be conside·red to be part of the D.i. strict Electric System. (c)"Di st rict Revenues" means all .income, rents, rates, fees, charges, and othe r moneys derived by the District from the ownership or· operation of the District Electric System, including, without li:niting the c;enerality of the foregoing, (i) all income, rents, rate s, fees, charges or other moneys derived from the sale, furnishing, and supplying of the electric capacity and energy and -2- • • ether ser vices, facilities, and commodities sold, furnished, or zuc-ol ied through th e fa cilities of the District Electric System, (ii) th�·e arnings on and inc ome derived from the in vestment of such income, rents, rates, fees, charges or other mone ys to the extent that the use of su ch ear nings and income is limited by or pursuant to law to the District Elect ric System and (iii) the pr oceeds derived by the Dist rict directly or indirectly from the sale, lease or other disposition of all or a �rt of the District Electric S}·stem as p>er­ mit �ed by this Agreement, but the ter:n "Distr ict Re venues " shall not in clude (y) customers' deposits or any other deposits subject to refund until such deposits have become the property of the District, or (z) contributi ons from customers for the payment of co sts of con­ struction of facilities to serve them. (d ) "P ermanent Tra nsferr ed Ea st Block Ent itlement Per centage " means, as of any date of determination and with respect to each Transferring Partic ipant, st:"·h Tr ansferring Par ticipant's East Block Ent i tleme-nt Percentage of the capacity and energy of the Project identified in Appendix A, as bt..ing the permanently trans­ fer red port i on of suc h Trans ferring Participant's East B1ock Entitlement Percentage, as such Appendix A shall be amended from time to time in accordan ce with Se ction s 8{a) and 13 hereof. (e)•Thi rd Phase Agreement• means the •Ag re ement forConstruction, Operation and Fir.ancing of Geothermal Generating Project Number 3" dated as of July 1, 1983, by and among NCPA and the Project Participants, as amended and supplemented. ( f)"Transfer red East Block Entitlement Percentages" means, as of any date of determination and with respect to eac h Transferring Partic ipant, such Transferring Participant's East Block Entitlement Percentage of the capacity and energy of the Project identified and set forth opp osite the name of su ch Transfer ring Participant in Appendix A hereto, as such Appendix A shall be ame:1ded from time to time in ac cordance with Sections 8 (a} and 13 hereof: provided, how­ ever, that, except for increases pursuant to Section 8(a) of this Agreement, the term "Trans ferred East Block Entitlement Percentages" shall not include any capacity and ene rgy of the Project in excess of 9. 309 percent if NCPA is unable to contractually arrange for delivery of such capacity and energy to the District on a firm basis subject to nor mal tr ansmissi on emergency outages and curtailment. TheTransfe·rring Parti cipants shall direct NCPA to provide support ser­ vices at cost to the District at the District's request during an y such outages or curt ailment. If th e Tr ansferred East B1oc k Entitlement Percentages are less than that set forth in Appendix Ahereto because of NCPA's i�ability to contractua lly arrange for transmi ssi on ser vice, ea ch of the Tr ansferring Parti c ipants' Transferred East Block Entitlement Percentages sha ll be re duced ,p.c_aLa.t.a or as otherwise agreed by the Transferring Participants. -3- , (g)"Tr an sfe rring Parti cipants" means those Pr oje ct Participants executing this Agree ment. 2.Purpose. The purpose of this Agreement is to provide for the tr ansfer of a portion of the Transferring Participants' East Block Ent itle:nent Percentages of the capacity and energy of the Project to th e District and to esta blish the terms and conditions o.f such transfer. 3.Construction and Operation of Project. The District ackno.:ledges that, pursuant to the Third Phase Agreement, NCPA has agreed to use its best efforts to cause or accomplish the eonstruc­tion, operation and financing of the Pr oject, the obtaining of all necessary authority and rights, and the perf ormance of all things necessary and convenient therefor. The District will cooperate with NCPA to that end. The District hereby c:onsents to the pledge and assignment to NC PA , and to any Trqs tee for any Bo n ds, of all of each Transferr ing Participant's right� title and interest in, to and under this Agreement , including all or any portion of the payments received or to be received hereunder from the District. Upon no tice from a Transferring Participant, NCPA or any Trustee who is an assignee of such rights, the Dis trict shall make payments due by it hereu,nder directly to any such Trustee. Such pledge and assignment shall be made effec tive for such time as the as signing Trans ferrin9 Participant shall de termine and provide or as to assignments made by NCPA, as NCPA shall determine and provide. 4.Tran sf er of Rights to Capacity and Energy of the Project. (a)Subject to the terms and conditions of this- Agreement, each Transferrir.9 Participant hereby sells , transfers, assigns and conveys, and the District hereby accepts and agrees to take, or cause to be taken, each Transferring Partj.cipant's Transferred East Block Entitlement Percentage to the capacity and energy of the Preject. (b)Ea ch Transfe rring Participant shall direct NCPA to deli ver such Transfer ring Pa rticipant•s Transferred East Rlock Ent::.tlernent Percentage to or for the District, subject to the teons of this··Agreement and the Third Phase Agreement. Such delivery shall be at points mutually agreed upon by NCPA and the District. Such agreecent shall not be unreasonably withheld by the District and each Tr ansferring Part icipant will direct that such agreement is not unreasonably· wit hheld by NCPA. The Tr ansfer ring Part icipants shall direct NCPA to remain available tv make or cause to be made all necessary and possible ar ranc;ements for transmission and support of the Transfe rred East Block Entitlement Percentages tc such point s -4- • over the lines of NCPA or othe rs. Wheeling or delivery service s provided by NCPA for the District with respect to capacity and energy sales related to the Transf erred Ea st Block Entitl��ent Percentages shall be as provided in service schedules as provided in Article III of the Kember Servi ce Aareement with resoect to the Transferring Participants and each Tr.an sf erring Par ticipant will direct NCPA to re�ain available to make or cause to be made all necessary and possi­ble arrangements for transmission and support to the Distri ct of its Transferred Ea st Block Entit lement Percentages relating to such capacity and ener gy sales. S.Rates and Charges. (a) The District shall pay for theTransferred East Block Entitlement Percentages acquired by it pursu­ant to this Agreement, in accordance with the prov isions of Section 6 hereof, such amounts as the Tran sf erring Part icipants are oGligated to pay with respect to the Trans fer red East Block Entitlement Percen tages under the Third Phase Agreeme nt. In the event any Trans fer ring Participant pays any amount under the Third Phase Agreem ent with respect to the Transferr ed East Block Entitlement Pe rce ntag es , the Distri ct shall reJJ>ay such amounts to the Transferring Participant, together with interest thereon from the date of payment, to the extent permitted by law, at an aMual rate to be estab lis hed by the Commission of NCPA at the time of the adoption of the then most recent annual budget. (b)The District shall make payments under this Agreementsolely from the District Revenues and as an operating expense of the Di s trict Electric System. Nothing herein shall be c0nstrued as pro­hi biting the District from using any other funds an d revenues for purpo ses of satisfying any provisions of this Agreement. (c)The District shall make pa yments under this Agreementwhether or not the Project is completed, operable, operating or re tired and notwithstanding the suspens ion, interruption, interfer­ence, reduction or curtailment of Project output or the capacity and en ergy cont racted for in whole or in part for any reason whatsoever. Such paym ents are not subject to any reduction, whether by off set or ot herwise, and are not conditioned upon perfo rmance by NCPA or any Project Partic ipant, including any Trans ferring Participant, under this Agreement, the Third Phas� Agreement or any other agr eeme nt. ·· {d) The Di stri ct covenants and agrees to establish and col­lect fees and cha rges for el e ctric capacity and energy fur nished through facilities of the District Electric Syst�� suffici ent to pro­vide District Revenues adequate to meet its obligations under this Agreement and to pay any and all other ��cunts payable from or con­stituting a charge or lien upon any or all the Distri ct Revenues. (e)The Di strict cover.ants and agrees that it shall, at alltimes, ope rate the properties of the District Electric System, and the business in connecti on therewith, in an efficient manner and at -5- .. ""' • ' 1 reas onable cost and sh.:-11 maintain the District El ect ric System in good repair, working order and condition. (f)With regar d to any capa c ity and energy of the Project in excess of the Pe rmanent Transferred East Block Entitl�menl Percentages, no twithstanding the District's obli�ation uncler Section S(a) hereof, the District shall not be required to pay the costs of any capital additions to the Project which are not necessary to pro­ v lee such capacity and energy to the District. To the extent not included in am ounts due under Section S(a) hereof, the District agrees to pay an equitable sh are of the cc.sts of any capital aciii­ tions to the Project whicr. are necessary to provide capacity and energy in excess of the Permanent Transferred East. Bloc k Entitl�ent Percentages to the Discrict. 6.Annual Budget an d Billing Stateme�t. The Transferring Participants and the District acknow�edge that the Third Phase Agreement pro vides that, prior to the beg inning of each NCPA f i seal year, t •. e Cornmi ssi on of NCPA will adopt an annual budget for such fiscal year for costs and expenses relating to the Project and nhall prom ptly give notice to each P:oje cc Participant of its projected sht.·re of such costs and expenses. Ea ch Transferring Participant will di rect NCPA to give notice to the District of th e proj ected shar(\ of such costs and exp enses related to the Trans ferred Ea st 3lo ck Ent i tlem�nt Per .::entages and to prepa re a bil ling statement, b..'\sed on estimates, to be sent to the District not la ter than the fifteenth (l�t.i'-!) day of each calendar month showing t 'le amount payable by tl.e District of costs payable under Section 5 (a) of this Agr eement by th,!? .Dist�ict for th� second succeedin� calendar month, and the amount cf any cred­ its or debits as a res·Jl t of any appropriate a.dj ustments. · Ameunts shown on the billing statement are due and payable thirty (30) days after the date vf t::e billing statement.. Any amount due and not paid by the District within ttlrty (30) days after the date of the billing st.,tement shall bear intet�st frcm th� due date until paiJ at an dnn�al rate to be established by the Co�mission of NCPA at the time of aJoption of the then most recent annual budget. On or before the day five (5) calendat months af ter the end of ea ch NCPJ\ fiscal year, the Transferring Partic.::.pant5 sh all direct NCPA to··submit to the District a statement of the aggr egate monthly cost s of the Transferred East Block Entitlement PercentP3es for such fiscal year. If the act uai aggregate mont hly costs and other amounts payable for any fiscal year with respe ct to the Tra�sferred East slock Entitlement Percent ages exc eed the billings to the District, the deficiency shaJ 1 be added to the District's immediatE'.ly s;.iccec.,_ ing billirg state�ent. If the actual aggregate monthly cost s and the District'3 0bl�g3tions with respect to the Transferred East Block Enti�lem ent Percentages, and any adjustm ent of or credit to the District's cbl igations with respe=t to the Transferred East Block -6- • Entitlement Perce ntages or other amounts payable for any fiscal year, are l ess than the billings to the District, such excess shall be c:eci ted to the Dist rict's billing sta tement for such period (not to exceed the immediately succeeding six months) and in such ��ounts as shall be de termined by NCPA. If th e District qu estions or disputes the correctness of any billing statement by NCPA, it shall pay th'=: ar.iount claimed when cue and shall within thirty (30) days of the r,�ceipt of such bil1ing sta�ement request an explanation fr om NCPA. If the bill is deter­mined to be incorrect, the Tr ansferring Participants shall direct NC PA to issue a corrected bill and refund any amoi.:nt which ma y be due the Distr ict, which refund shall bear interest from the date NCPA rec eived payment until the date of the refund at an annual ra te to be est ablished by the Commission of NCPA at the time of ad optio:1 of the th�� most recent annual budget. If NCPA and the District fail to agr ee ·:rn the correctness of a bi ll within thirty (30) days after. the District has requested an explana tion, the District agrees to, and th'! Transfe rring Participants shall cause NCPA to, promptly submit the dispute to arbit ration under section 1280 .e.t. �-of the Code of C;i.v il Ptocedure. 7.Obligations in the Event of Default under this AgrE'�ent. (a) Upon failure of the District to make any payment in fu ll when du e under this Agre ement , NCPA or a Transferring Par ticipant shall make written demand upon the District, and if said failure is not rernedied within thirty {30) days fro m the da�e of such demand, such fa ilure shall constitute a default at the expiratir>n of such period. Notice of such den.and shall be provide d to NCPA ant.l to each other Transferring Participant by th� Transferring Participant making such written demand. (b; Opon the fai lure \lf the District to make any payment, whi ch failu re constitute s a de fa ult und er this Agreement, the Transferrin g Participants shall cause NCPA to sell and transfer for the District's account all or a portion of the District's riy�a:s to the Transfer red East Block Enti tlenent Percentages for all or a por­ tior. of the remainder of lhe term of this Agreement, incl uding, if so directed by the Transferring Participants, such a sal e to arry or all of the Transferring Participa nts. The Transf erring Participants shall not permit NCPA to sell such rights to the Transferred East Block E:.'nt i tlcment Perc entages , direct ly or indirectly, in any manner, and shall not take or rermit to be taken any other action or actions, which would result in any of the Bonds be ing t:eated as an obligation not described in Section 103(a) of the Int ernal Revenue Code of 1954, as ame nd ed, by reason of class ifi cation of such Bond as an "industr ial develo�ent bond" wi thin the meaning of Sect ion 103 (b) o.f said Code. Not..,·ithstanding that all or any portion of the District's rishts to the Transferred East Block Entitlement Pe rcentages is so sold or transferred, the District shall remain liable to pay the full amount of its obligations under Sect ion 5 her eof as if such sale or -7- ,.\. n " ·transfer had not been made, except that such lia bility shall be discharged to the exte,t that NCPA sha!l rece ive fayment from thepurc�aser or transferee thereof. (c)Upo n the failure o! the District to ma�e any pay�&nt which failure constitutes a default under this Agreement and causes NCPJ.. to be in default under the Stearn Sal.es Agreement, the Project No. 2 St eam Sales Agreement or any '1ond Resolution, the Transfer ring Participants may ( in additi on to the remedy pro\· ided by subsection (b)of this Section 7) terminate th£. provis i ons of this Agreement in sof ar as the same en title the Di st r ict to its rights to the Transferred East Block Entitle.-nent Percentages. Irrespective of such terminatio n, the obligat ions of the District under this Agreement shall continue ln full force and effect. (d)If NCPA fails to act in acc ordance with the airection of the Tran sferring Participants, the Tra.nsf erring Participants shall consent to the District initiating and maintaining a suit directly against �CPA to enforce this Agreement . 8.Obligations i,.-, Event of Default under the Third Phase Agreement. (a)To the extent that any Transferri�g Participant's East Block Ent itlement Percentage is ir.creased pursuant to Section 7 (d) of the Thi rd Phase Agreement, sl:ch Tr ansferring Partic.ipant' s Permanent Transferred East Block Entitlement Perrenta ge tr&nsferred to the District hereunder shall be increased by the amount of each increase in the Tran sf errin-1 Participant's East Block Entitlement Percentage mu ltiplied by a fraction the numera.;or of which is such Transferring Participa�t' s Permanent Transferred East Block Sn�itlement Percentage a�d the denominat or of which is the Tran sferring Participant's East Block Entitlement Percenta,;;e each determined as of the time im..'lledi­ate ly prior to such in crease; pr ovided, however, that the sum of auch increases for the District shall not exceed , without written consent of the Di st r ict, an ar;cumulated maximum of 25% of the aggregate arao unt of the Perman ent Tran sferred Ea st Block Entit:ement Percentages tr ansferred hereby, as initi ally set fo rt..'1 in Appendix A. (b)The Thi rd Phase Agree�ent prov ides that if a Project Participant shall fail o;: refuse to pay any amounts due to NCPA, the fact that the ot her Project Participants hav� in creased their obliga­ tion to NCPA ours uant to Section 7 of the Third Phase Agreement shall not relieve the defaulting Project Pa rticipant of its liability under the Third Phase Agr eerrent and ttat the nondefa ulting Project Particica nts ::iay rec over fro:n such d�faulting Proj ect Participant any increased obligatior.s resulting fr0::i such default. Each Trar'.sferring Participant hereby assi gns to the District all of its right of recovery from a defaultin g Prcje�t Parti c ipant with resFect to its Transferred East Bloc k Entitlement Percentage to the extent of any -8- increa se in the Distric t's obligations hereunder ca used by the default:ng Project Pa rticipa nt. (c)If the Transferring Pa rticipants' rights unde r this Ag ree::1er.t are assigned to NCPA or a Tr ustee for any Bonds, NCPA, or to the extent provided L1 the related Bond Resolution, such Trustee, shall have the right to i ni tia te and maintain suit tr, enforce thisAc; .reement. 9.Transfers, Sales and Assignments of Transferred East Block E ntitlement Percentages. The District has full and unfet­ tered rights to make sales, transfers and exchanges (collectively "assig��ents") of its ri g hts to Transferred East Block Entitl��ent Percentages except as exp ressly pr ovided oth erw ise in this Agreement. {a) The District shall not assign ownership of all or sub­ stantially all of the District Electric System to another entity until it ha s first complied with the provisions of this subsectien (a ). A consolidation with another governmental entity or chancge in governmenta l form is not deemed a transfer of ownership. (1)Suc h dispo sition or assignment sball be underterms and conditions that pro vide assurance that the obli­ gations of the District under this Agreement, and that the Transferring Par t icipants' obligations under the Third Phase Ag.ree��n t and under other agreements made o� to be made by the Transferring Participants to carr y out the Project, .::.:; the same relate to the Transferred East Block Entitlement Percentages will be pro mptly and adequately met. The Transferring Participants or NCPA may requir e that suff icie nt moneys of the District to discharge such obligations be irrevoca bly set aside and maintained. in a tr ust account , as a condition to the tr ansfer of the District Electric System, if no ot.�er adequate assurance is ava ilabl e. (2)The District shall give ninety (90) days advance written notice to the Transferring Participants and NCPA of any proposed tran sfer pursuant to this subsection (a). Appendix A to this Agreement shall be amended as appropri­ ate·· to reflect any tr ansaction pursuant to this subsection (a)• (b)Notwiths tanding any other provision of this Agr eement, the Di strict sh all not assign, se ll, transfer or exchange any portion of its rights to Transferred East Block Entitlement Percentage s, di rectly or ;.ndi:-ectly, in any manner, and sh all not take or permitto be taken any other action or actions, which would result in any of the Bonds being tr eated as an obl iga tion not desc r ibed in Section l03(a) of the Inte rn ol Revenue Code of 1954, as amended, by -9- reason of classifica tion of suc h Bond as an "industrial develoEJnent bond" within the mea�ing of Section 103(bj of said Code. 10.Su rplus Transf erred Ea st Blo ck Entitlemen tPer cer.,tages. (a)When NCPA offers surplus capacity and energy· of the Proje ct :o the Transferring Participants as provided in the T"hird Pha !;e Agreer.ient, the Transferring Participants shall, if directed by the District to do so, take and sell to the District such sur plus cap-aci ty and energy. In the event thet� are more requests for sur­ plus than there is surplus available, each Transferring Participant shall of f er the District a po1:t1on of such surp lus capacity and energy equ al to the surpl us ca·.pacity a.nd energy o r tered to such Transferring Partic ipant multip1.ied by a fracti on t .e numerator of whi ch is such Tran sferrin� Participant's Transferre d East Block Enti clem ent Percentage and the de nomi nato r of which is the Tran sf er ring Participant's East Block Entitlement Perce ntage each determined as of th e time such of fer of surplus capacity and energy is made. {b) When the District has surplus rights t� capacity and energy of the Project, the Transferring Parti clr:,ants shall direct NCPA, if requested by the District to do so, to sell such surplus rights to Transferred East Block Entitlement Percentages on behalf of the District in the following manner: ( 1)NCPA sl,all use its b,est efforts to sell such surplus rights to Tr ansfer red East Block Enti t lement Per centages at a price at least equal to the District's cost therefor. (2)Transferring Participa;1ts shall have a right of first refusal, other Pr oje\;t Participants shall have the right of second refusal, and other NCPA members shall have the right o f third ref usal, at the sales prices se t forth in su bsections (c) dnd (d) of this Section 10. (3) If NCPA can purchase equivalent capc'lcity and/or energy from other so urces for less than the District's cost for capacit y and/or energy from the Project, as the case may··be, the sales price of suc h capacity and/or ener gy to a Transferring Pa rtic ipant, Project Participant or NCPA member shall be equal to the cost of purchasing the capac­ ity and/or energy from such other source. (4)If the alternative cost of purchasing capaci ty and/or energy fo r Transf erring Partic ipants, Projec t Participants or members of ?-'CPA is more than the Dist rict's cost for capa city and/or energy fran the Project, then the sales price shall be the District's cost from the Project -10- • • I� � plus one-half the difference betwee n the District's cost frow the rroject and the cost of capacity and/or energy fro� such alterna tive source. (5)NCPA shall not sell such rights to Tran sferred £a st Block Entitlement Per centa ges, direr-tly or incirectly, in any manner, and shall not take or permit to be taken any other action o:-actions, which would result in any of the Bo�ds being treated as an oblig ation not des cribed in Se c�ion 103(a) of the Internal Revenue Code of 1954, as amended, by reason of clas sification of such Bond as an Ri ndustri�l developme nt bon d" within the meaning of Section 103�b) of said Code. 11.Direction and Review. All di rections to NCPA with:espect to the Project and all me etings of NCPA in connec tion tbere­...-i th shall be as provided in SEct ion 11 of the Third Phase Agreement and for such purpose s, the Transferring Participants agre e that the Distri ct may vote at meetings of the Project Participa nts pursuant to Section 11 of the Third Pha se Agreement as if it had the East Block Entit lem ent Pe rcentage equ al to th� Tran�ferred Ea st Block Entitlement Percentages, and the voting rights of the Tr ansferring Pa rticipan ts shall be reduc ed accor dingly, unl ess the Preject Par ti cipants agr�e at such meeting that voting will be on a one member one vote basis, with a majority vote of those present required for actio n, in which case the District shall be entitled to one vote; provided that the Transferring Participants shall not agree that voting shall be on a one member one vote basis unless the District direct s the Trans ferri ng Par ticipants to do so. 12.Insurance and Indemnification. The Tr ansfe r riagParticipaHts shall indemnify and hold harmless the District from any 1 ia bi l i ty for personal injury or property damage re sulting f ran an y accident or occurrence arising out of or in any wa y related to theconstruction or op eration of the Project, prov ided, however, that such liabilit y o: the Tran sferring Participants shall be limited to the extent the proceeds of insurance and other moneys available to the Transferri ng Participants under Section 10 of the Third Phase Agreement are av ailable therefor. 13. Intention to Amend Third Phase Agreement. I t i s the int-ent.ion cf the parties to this Agr eement that the Third Phase Agre e::1ent shall be amended to include the District as a Pr oject Participant and to am end the East Bock Entitlement Percen tages to grant the District an East Block Entitler.1ent Percentage equal to thePer�anent Transferred East Block Entit lement Percentages, if and to the exter.t permitted thereunder and t1nder any Bond Resolution.. In the event of s..ich a.-nend:-7',e�t of the Third Phase Aaree.ilent, unless oth­e rw i £e agreed to among the parties hereto, this Agreeme nt shall remain in full force and effect but shall be co nstrued to app ly only to the Transferred East Block Entitlement Percenta ges in excess of -11- ·-, , ; the Permanent Transterred East Block Entitlement Percentages from the effective date of su ch amendment of the Th ird Phase Agreement. 14.Term.(a)This Agreement shall becane effective forall purposes upon the execution hereof by the Distri ct and the Transferr ing Parti c ipants and deliv ery to the Tr ansf erri ng F:?r �:..ci?ants of an opinion of an attorney or fim of attorne ys acting as counsel to the District in substantially the form attached hereto as J.fpendix B •. (b)The term of this Agreement shall continue until the ternination of the Third Phase Agreement. 15.Terminatian and Amendments. This Agreement shall not be subject to termination by any party under any circumstances , wheth er based upo n th e de fault of any other party under this Agreement, or any other instrument, or otherwise, except as specifi­ cally provided he rein. 16. Miscellaneous. The headings of the sections hereof are inser ted for convenience only and shall not be deemed a part ef this Agreement. If any one or more of the covenants or ag reements provided in this Agreement to be performed should be determined to be invalid or cont rary to law, such covenant or agreement shall be deemed and constr 1Jed to be se•:erable fran the remaining covenants and agreements herein co nt ained and shall in no way affect the validity of the remaining provisions of this Agreement:.. This Agreement may be executed in se veral counterparts, all or an y of which sh all be regarded for all purposes as one original and shall constitute and be but one and the same instrument • .. -12- '.: { . ' ' \ ·. IN WITNESS WHEREOF each Tran sferring Participant has exe­ cuted this A<,;reer.1ent by its duly authorized officers, and caused its official seal to be affixed hereto, and the District has executed this Agreement in accordance with the authorization of its Board as of the date first above written. CITY OF BIGGS By ___________ _ And __________ _ [SEAL] CITY OF GRIDLEY By __________ _ And __________ _ (SEAL] BEALDSBORG By ___________ _ And. __________ _ [SEAL] CITY 3f. L,ODI1_::,:7 � B <)&di-(, V< 0,-:,,ti(�� Ly �, Nt �Q llnu ir Oft ·nUL( , . ayor :J1,A{.h .,. City C!crl< [SEAf,.] CITY OF PALO ALTO By ___________ _ And ____________ _ [SEAL] CITY OF ROSEVILLE By ____________ _;__ And ------------------ [SEAL] CITY OF UKIAH By....,.. __________ _ And,_. -------·------ [SEAL] PLUMAS-SIERRA RURAL ELECTRIC COOPERATIVE By An�d_------------ [SEAL] TO�OCK IRRIGATION DIS�Icr By--:-______ _., ____ _ And ____________ _ ' •, .. -13- _. ..... 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FORM OF OPINION OF COONSEL Nor-thern California Power Agency 8421 Auburn Bouleva rd Suite 160 Citrus Eeights, California JS610 City of Bi ggs City of Gridley City of Healdsburg City of Lodi City· of Palo Al to City of Roseville City of Ukiah Plwnas-Sierra Rural Electric Cooperative Dear Sirs: APPEND:IX B • I am ac ting as counsel to the District (the "District") under the Agreement for Transfer of Rights to capacity and Energy of Geothermal Generating Project Number 3, dated as of October 1, 1984 {the "Agreement"), among the District and certain other entities {the "T ransferriJ"lg Participants"), and I have aeted as counsel to the Di strict in connection with the matters refe�red to herein. As such counsel I have ex amined and am familiar with (i) those: documents relatirlg to the existence , orga nization and operation of the District, (ii) all neces sary documentation of the District relating to the authorization, execution :incl delivery of the Agreement, and {i ii}an executed counter;>art of the Agreeme nt. Ba sed upon the foregoing and such examination of law and suc h ot her information, papers and documents as I deem necessary or adv isable to enable me to render this opinion, including the Constitution and laws of the State of California, together with the [charter or other governing instnnnents], ordinances and public pro­ ceedings of the District, I am of the opinion that: 1. •. The Dis trict is [state form of or ganization)_____ , duly created, organized and existing under the la�s of the State of California and fuly qualified to fur­ nish electric service withi n said St�te. B-1 �- --2.The Dist rict ha s full le gal right, power and authority to enter into the Agre��ent and to carry out and consu.:-..�ate all transactions co ntemplated thereb y, and the Distr ict has com plied with the prov isions of applicable law in all matters relating to such transact ions. 3.The Agreement has been duly authoriz�d, executed and delivered by the Di strict, is in full force and effect as to the District in accordance with its terms and, assum­ ing tha t the Transf erring Participants have all the requL­ si te po wer an d authority, and have taken all necessary action, to execute and deliver such Agreement, constitutes the leg al, va lid and binding obliga tion of the District enforceable in acc ordance with it s terms . 4.Payments by the District under the Agreement will constitute an opera ting expense of the District and are t.o be made solely from the District Revenues of the Distrizt El ectr ic Sys tem as provided in s�cti on S{c) of the Agreement. 5.No approval, co nsent or authorization of any gov­ ernmental or public agency, authority or person is required for th e execution and deliv ery by the Di strict of the Agreement, or the perfo rmance by the District of its obli­ gation s thereunder. 6.The authori zatio n, execution and delivery of t41e Agreement and compliance with the provi sions thereof will no t co nflict with or constitute a breach of, or default under, any instrument relating to the organization, ex·is­tence or operation of the District, MlY commitment, agree­ ment or other instrument to which the Di strict is a party or by which it or its property is bound or affected, or any ruling, regulation, ordinance, judgment, order c: decree to which th e District (or any of it s off ice rs in their respec­ tive capacities as such) is subject or any provision of the laws of the State of California relating ta the District and its affairs. 7.There is no actio n, suit, proceeding, inquiry or inv-·est iga tion at law or in equity, or before any co urt, public board or bo dy, pending or, to my knowledge, threat­ ened against or af fecting the District or any entity affil­ iated with the District or any of its officers in their resoective capacities as such (nor to the best of my knowl­edoe is there any basis theref or), which questions the po�ers of the Distri�t referred to in ?aragraph 2 above or the validity of the proceedings taken by the District in connection with the author izatio:1, execution or delivery of the Agreement, or w�erein any unfavorable decision, ruling B-2 '· • or fi ndin g would mate rially adver sely affec t th etransactions co ntemplated by the Ag r eement, or which, in any wa y, would adversely affect the validity or enforce­ability of the Agreement. The opini on expressed in pa ragraph 3 above is qualified to the extent that the enforceability of the Agreement rnay be limited by ar:�· a??l icable ba nkru ptcy , insolvency, debt adjustment, moratorium, reorganization , or other similar laws affecting creditors' right s ger.erally or as to the availability of any particular rem edy. This opinion is rendered only wi th respect to the laws of the State of California and the United States of Amer ica, and is addressed onl y to the Northe rn California Power Agency ("NCPA" )" and the Transferring Part icipants. No other person is entitled to rely on this opinion, nor may you rely on it in connection with any trans­ actions other than those described herein. [Note: If it shall be necessary for the District to obtain th e authorization or approval of a Federal, state or local regulatory authority relating to the District's performance under the Agreement, th e form of opinions set forth in paragraphs 2, 5 and 6 hereof may be appropriately adjusted to reflect the necessity for such authoriza­tion or approval and paragrapt 5 hereof shall be adjusted to include th erein an exception thereto specifically describing the requisite authorization or approval and stating that it has been duly given or obtained and is in full force and eff�ct.J Very truly yours, B-3