HomeMy WebLinkAbout2022-01-13; Clean Energy Alliance JPA; ; Consideration of Adoption of Resolution No. 2022-001 Approving Credit Agreement Amendment with JPMorgan Increasing the Line of Credit from $6MM to $15MM~
CLEAN ENERGY ALLIANCE
DATE:
TO:
FROM:
ITEM 1:
Staff Report
January 13, 2022
Clean Energy Alliance Board of Directors
Barbara Boswell, Chief Executive Officer
Consideration of Adoption of Resolution No. 2022-001 Approving Credit Agreement
Amendment with JPMorgan Increasing the Line of Credit from $6MM to $1SMM
RECOMMENDATION:
1) Adopt Resolution No.2022-001 approving credit agreement amendment with JPMorgan, in a form
substantially as attached, increasing the line of credit from $6MM to $1SMM and authorize the Chief
Executive Officer to execute all documents, subject to Specia l and General Counsel approval; and
2) Approve related Fee Agreement with JPMorgan and authorize the Chief Executive Officer to execute
all documents, subject to Special and General Counsel approval.
BACKGROUND AND DISCUSSION:
At its regular meeting on January 21, 2021, the Clean Energy Alliance (CEA) Board approved Resolution
No. 2021-004, approving a credit agreement with JPMorgan for $6MM to fund start-up costs and initial
cash flow needs for CEA. As of January 2022, CEA will have drawdown the full $6MM.
Since initiating its power supply procurement in spring 2021, CEA has experienced rising power supply
costs. These increased costs are resulting in power supply costs that exceed estimates in Fiscal Year (FY)
2021/22. At its meeting on December 30, 2021, the CEA Board adopted an amended rate schedule that
results in sufficient revenue being generated in fiscal years beginning 2022/23 and beyond, however the
shortfall for the remainder of FY 2021/22 remains.
CEA staff has undergone discussions with JPMorgan regarding increasing the line of credit to meet the FY
2021/22 cash flow needs. Based on discussions between CEA and JPMorgan, JPMorgan has proposed the
following amendments to existing terms and new terms to the existing credit agreement, which are
reflected in the attached red lined Revolving Credit Agreement (Attachment C), to be attached as Annex A
to the Second Amendment to Revolving Credit Agreement (Attachment B) upon finalization of the
documents.
Amendments to Existing Term
1. Increase to $15,000,000 on the new Effective Date (defined as January 14, 2022).
January 13, 2022
Credit Agreement Amendment
with JPMorgan
Page 2 of 7
2. Quarterly and annual reporting to be expanded to include a Debt Service Coverage Ratio
("DSCR") calculation, a Days Liquidity on Hand calculation (as defined below), and any updates
to the annual budget.
3. Monthly reporting to be expanded to include a monthly liquidity report disclosing available
liquidity, unrestricted cash and a summary report of hedging transactions.
4. Requirement to report to JPMorgan within 5 business days of Board adoption, adjustments to
CEA generation rates when the adjustment is 5% or greater and to include an updated 12-month
financial projection.
5. DSCR quarterly testing start date changed from quarter ended 6/30/2022 to 6/30/2023. If DSCR
is below 1.40x for any testing period, but Days Liquidity on Hand, (defined as: the quotient, in
number of days, obtained by dividing (i) sum of unrestricted cash and cash equivalents and the
unutilized portion of the line of credit on such date of determination by (ii) the product of (A)
the sum of operating and interest expenses for the four consecutive fisca l quarter period ended
on or immediately prior to such date of determination and (B) 1/365) as of the last day of such
testing period exceeds 30 days for FY 2022/23 and 50 days in any testing period thereafter, then
DSCR will not be considered to be breached. The Liquidity on Hand cure may only be applied
two times in aggregate in any four quarter consecutive periods.
New Terms
6. Effective date shall mean January 14, 2022.
7. A requirement that CEA must repay $5,000,000 of the line of credit by no later than 12/31/2023.
Amounts repaid may be re-borrowed after 30 days.
8. Introduction of a rolling hedge requirement (inclusive of Escondido and San Marcos) for the
following levels:
ANNUAL REQUIREMENTS HEDGING REQUIREMENT
CY 2022 Minimum 80% hedged
CY 2023 Minimum 60% hedged
CY 2024 Minimum 40% hedged
Roll forward of the hedge requirements will be subject to JPMorgan's discretion, in its
reasonable judgement based on an annual meeting between CEA and JPMorgan, and a roll
forward of the schedule shall not be required by JPMorgan for a particular year (or JP Morgan
may require lower hedging percentages) if CEA provides JPMorgan information demonstrating
that a roll forward would be contrary to market conditions then existing for power purchases
and adverse to CEA's financial position.
January 13, 2022
Credit Agreement Amendment
with JPMorgan
Page 3 of7
9. CEA Board approve rate increase effective January 1, 2022 (Board approved December 30,
2021).
10. Line of credit converted from LIBOR based interest to SOFR due to elimination of LIBOR. The
applicable interest rate to be calculated by the sum of the Term SOFR Rate plus 0.10%, plus
3.45%, provided that if the Adjusted Term SOFR Rate is less than zero, then the rate shall be
determined to be zero for calculating the interest rate. For example, if the 1-Month Term SOFR
is 0.05%, the adjusted SOFR rate is 0.15%, and loans will be charged 3.60% (3.45% + 0.15%).
The term of the line of credit remains unchanged with the full amount to be repaid by January 31, 2026.
Staff and its legal and technical team have reviewed and vetted the amended and new terms proposed
by JPMorgan, and have determined them to be acceptable and achievable.
The increase of $9.00MM (from $6.0MM to $15.0MM) is projected to fund projected cash needs
through June 30, 2022, of $6.0MM and an additional $3.0MM to fund unanticipated costs related to
service expansion to Escondido and San Marcos.
Cost Estimates
Cost estimates, based on scenarios of utilizing 38% (current drawn amount), 50% and 100% of the
increased line of credit amount of $15 million, are reflected below:
January 13, 2022
Credit Agreement Amendment
with JPMorgan
Page 4 of 7
Clean Energy Alliance -Cost Estimates
As of January 6, 2022
Scenario 1: Current Drawn Size Unchanged
Line of Credit Commitment Amount ._I $ ______ 1s_,_oo_o_,_oo.,..o_
Ooslng Date 1/14/22
Maturity Date 2/2/26
Years Faclllty In Place: 4.05
Working Capital Loan
Average Utilization (% of Amount)*
1-Month SOFR (asofl/6/2022)
Credit Spread Adjustment
Applicable Margin
Un drawn Fee(% of Un drawn Amount)
StandbyLOC
Standby LOC Utilization(% of Amount)
Standby LOC Fee(% of Drawn Amount)
1-Year LOC Fee
2-Year LOC Fee
3-Year LOC Fee
4-Year LOC Fee
5-Year LOC Fee
Standby LOC Draw Fee(per LOC)
Amendment Fee
Documentation Fee
Amendment Fee
Commitment Fee**:
Interest on Outstanding Balances**:
Standby LOC Fees:
Bank Counsel Fees:
Total Cost over the Remaining Life ofFacillty:
Interest Only Costs:
Utilization Amount (Draws):
Standby LOC Amount:
Total Utilization:
*Utilization based on current drawn amount
**Calculated on act/360 basis
38%
0.055%
0.100%
3.450%
2.150%
0%
3.25%
3.30%
3.34%
3.40%
3.45%
$500
$10,000
$0
$10,000
$816,630
$851,288
$0
$20,000
$1,697,918
$1,667,918
$5,750,000
$0
$5,750,000
38"
Assuming a 38% utilization (current drawn amount), the total costs (interest plus fees) through the life
of the credit facility are $1,697,918 and interest only costs for the remaining life are $1,667,918.
January 13, 2022
Credit Agreement Amendment
with JPMorgan
Page 5 of 7
Clean Energy Alliance -Cost Estimates
As of January 6, 2022
Scenario 2: 50% Utilization
Line of Credit Commitment Amount
Cosing Date
Maturity Date
Years Facility in Place:
Worldnc Capital Loan
Average Utilization (% of Amount)•
1-Month SOFR (as ofl/6/2022)
Credit Spread Adjustment
Applicable Margin
Un drawn Fee(% of Un drawn Amount)
StandbyLOC
Standby LOC Utilization(% of Amount)
Standby LOC Fee(% of Drawn Amount)
1-Year LOC Fee
2-Year LOC Fee
3-Year LOC Fee
4-Year LOC Fee
5-Year LOC Fee
Standby LOC Draw Fee (per LOC)
Amendment Fee
Documentation Fee
Amendment Fee
Commitment Fee .. :
Interest on Outstanding Balances .. :
Standby LOC Fees:
Bank Counsel Fees:
Total Cost over the Remainin1 Life of facility:
Interest Only Costs:
Utilization Amount (Draws):
Standby LDC Amount:
Total Utilimtion:
•utilization a manual input
••calculated on act/360 basis
IS 15,000,000
1/14/22
2/2/26
4 .05
50%
0.055%
0.100%
3.450%
2.150%
0%
3.25%
3.30%
3.34%
3.40%
3.45%
$500
$10,000
$0
$10,000
$662,133
$1,110,375
$0
$20,000
$1,802,508
$1,nZ,508
$7,500,000
$0
$7,500,000
50%
Assuming a 50% utilization of the increased capacity, the total costs (interest plus fees) through the life
of the credit facility are $1,802,508 and interest only costs for the remaining life are $1,772,508.
January 13, 2022
Credit Agreement Amendment
with JPMorgan
Page 6 of 7
Clean Energy Alliance -Cost Estimates
As of January 6, 2022
Scen•io 3: 100% Utilization
Line of Credit Commitment Amount ._I $;__ _____ 1_s,'-o_o_o,'-oo_o
Closing Date 1/14/22
Maturity Date 2/2/26
Yearsfacilityin Place: 4 .05
Working Capital Loan
Average Utilization (% of Amount)•
1-Month SOFR (asofl/6/2022)
Credit Spread Adjustment
Applicable Margin
Un drawn Fee(% of Undrawn Amount)
StandbyLOC
Standby LOC Utilization(% of Amount)
Standby LOC Fee(% of Drawn Amount)
1-Year LOC Fee
2-Year LOC Fee
3-Year LOC Fee
4-Year LOC Fee
5-Year LOC Fee
Standby LOC Draw Fee (per LOC)
Amendment Fee
Documentation Fee
Amendment Fee
Commitment Fee••:
Interest on Outstanding Balances••:
Standby LOC Fees:
Bank Counsel Fees:
Total Cost over the Remaining Life of Facility:
Interest Only Costs:
Utilization Amount (Draws):
Standby LOC Amount:
Total Utilization:
•utilization a manual input
••calculated on act/360 basis
100%
0.055%
0.100%
3.450%
2.150%
0%
3.25%
3.30%
3.34%
3.40%
3.45%
$500
$10,000
$0
$10,000
$0
$2,220,750
$0
$20,000
$2,250,750
$2,220,750
$15,000,000
$0
$15,000,000
100%
Assuming a 100% utilization, the total costs (interest plus fees) through the life of the credit facility are
$2,250,750 and interest only costs for the remaining life are $2,220,750.
January 13, 2022
Credit Agreement Amendment
with JPMorgan
Page 7 of 7
The Second Amendment to Revolving Credit Agreement (Attachment B) includes the closing conditions
and documents, including CEA's representations and warranties, required to finalize the proposed
amendment, and reflects the proposed amendments as a marked copy of the Credit Agreement to be
attached as Annex A to the Second Amendment.
The Amended Credit Agreement (Attachment C) reflects the amended and new terms as listed above,
and upon finalization, will be attached as Annex A to the Second Amendment described above.
The Fee Agreement (Attachment D) before the Board memorializes the terms and conditions of the fees
associated with the credit facility amendment consistent with the term sheet. It establishes calculation
methodologies of fees including Undrawn Fees, Letter of Credit Fees, Issuance or Drawing Fees and
other related fees for the Line of Credit. The document has been reviewed and approved by Nixon
Peabody and CEA's General Counsel.
FISCAL IMPACT
Costs related to the credit agreement increase include a JPMorgan fee of $10,000, JPMorgan legal fees
capped at $20,000 and CEA legal fees estimated at $20,000. Current CEA rates are sufficient to cover
annual interest expenses, the required $5.0MM repayment by December 31, 2023, and full repayment
by January 31, 2026.
ATTACHMENTS:
Attachment A -Resolution 2022-001 Approving Credit Agreement Amendment with JPMorgan
Attachment B -Second Amendment to Revolving Credit Agreement
Attachment C-Annex A to Second Amendment (redlined JP Morgan Credit Agreement)
Attachment D-JPMorgan Fee Agreement
DocuSign Envelope ID: 647748A1-ECD4-4FCF-A2B7-35FCD4D9E690
CLEAN ENERGY ALLIANCE
RESOLUTION NO. 2022-001
A RESOLUTION OF THE BOARD OF DIRECTORS OF
CLEAN ENERGY ALLIANCE APPROVING AND AUTHORIZING
AN AMENDMENT TO THE REVOLVING CREDIT AGREEMENT WITH
JPMORGAN CHASE BANK, N.A., INCLUDING AN INCREASE IN THE
COMMITMENT AVAILABLE THEREUNDER, A NEW FEE AGREEMENT AND
CERTAIN MATTERS RELATED THERETO
WHEREAS, Clean Energy Alliance ("CEA") is a joint powers authority established on
November 4, 2019, and organized under the Joint Exercise of Powers Act (Government Code
Section 6500 et seq.); and
WHEREAS, CEA now currently includes the following members: the City of Carlsbad,
the City of Del Mar, the City of Solana Beach, the City of Escondido, and the City of San Marcos;
and
WHEREAS, CEA and JPMorgan Chase Bank, N.A. ("JPMorgan") have previously
entered into a Revolving Credit Agreement, dated as of February 3, 2021, as amended by that
certain First Amendment to Revolving Credit Agreement, dated as of February 26, 2021(the
"Revolving Credit Agreement"), including the fee agreement related thereto (the "Prior Fee
Agreement"), which Revolving Credit Agreement is available for general agency purposes and to
provide credit support for future power purchase contracts, and which Revolving Credit
Agreement and Prior Fee Agreement currently allows CEA to borrow cash or to request the
issuance of letters of credit in an aggregate principal amount not to exceed $6,000,000; and
WHEREAS, CEA staff and JPMorgan have been and are negotiating the terms of an
increase in the commitment available under the Revolving Credit Agreement to allow CEA to
borrow cash or to request the issuance of letters of credit in an aggregate principal amount not to
exceed $15,000,000 pursuant to an amendment (the "Amendment") and a new fee agreement (the
"New Fee Agreement") thereto, copies of which Amendment and New Fee Agreement are on file
with the Board of Directors of CEA; and
WHEREAS, the good faith estimates required to be obtained and disclosed with respect
to the increase in the commitment available under the Revolving Credit Agreement and New Fee
Agreement in accordance with Government Code Section 5852.1 are set forth in the report
accompanying this Resolution; and
NOW, THEREFORE, BE IT RESOLVED, by the Board of Directors of Clean
Energy Alliance, as follows:
Section 1. The foregoing recitals are true and correct.
Section 2. The Board of Directors (the "Board") of the Clean Energy Alliance ("CEA")
hereby approves the Chief Executive Officer, the Chief Financial Officer/freasurer (including the
4868-5224-8325.4
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Interim Chief Financial Officerffreasurer) and their designees as authorized representatives of
CEA (each an "Authorized Representative" and collectively, the "Authorized Representatives") in
connection with the negotiation and execution of the Amendment to increase the amount of the
commitment available under the Revolving Credit Agreement as amended by the Amendment (the
"Amended Revolving Credit Agreement") to $15,000,000, and the New Fee Agreement related
thereto, including such related amendments deemed necessary or advisable by the Authorized
Representative executing the Amendment and the New Fee Agreement to implement the terms of
increase, and any ancillary documents relating thereto.
Section 3. The Board hereby approves each Authorized Representative, acting singly, to
execute and deliver the Amendment, the New Fee Agreement and any related ancillary documents
in substantially the same form presented to the Board of Directors of CEA, with such
modifications, changes, insertions and omissions as may be approved by such Authorized
Representative as in the best interests of CEA, the execution thereof to be conclusive evidence of
such approval.
Section 4. The Board hereby approves each Authorized Representative, acting singly, to
borrow and authorize advances or the issuance of letters of credit from time to time under the
Amended Revolving Credit Agreement in such amounts as in their judgment should be borrowed
and to provide security for the obligations of CEA under the Amended Revolving Credit
Agreement, including, without limitation, a pledge of the net revenues of CEA, and to execute and
deliver any requests or other documents and agreements as such Authorized Representative may,
in her or his discretion, deem reasonably necessary or proper in order to carry into effect the
provisions of the Amended Revolving Credit Agreement and the New Fee Agreement.
Section 5. The Board hereby affirms the prior appointment of Nixon Peabody LLP to act
as special counsel to CEA in connection with the negotiation and execution of the Amended
Revolving Credit Agreement, the New Fee Agreement, and the ancillary documents.
Section 6. The Authorized Representatives, the Interim Board Secretary, and the Interim
Board Clerk and all other appropriate officials of the CEA are hereby authorized and directed to
execute such other agreements, documents and certificates as may be necessary to effect the
purposes of this resolution.
Section 7. The Board hereby approves that all acts, transactions or agreements undertaken,
prior to the adoption of these resolutions by any of the officers of CEA, or their designees, in its
name and for its account in connection with the foregoing matters, are hereby ratified, confirmed
and adopted by CEA.
Section 8. This Resolution shall take effect immediately upon its adoption.
2
4868-5224-8325.4
DocuSign Envelope ID: 647748A1-ECD4-4FCF-A2B7-35FCD4D9E690
The foregoing Resolution was approved and adopted this 13th day of January 2022, by the
following vote:
AYES: Inscoe, Acosta, Musgrove, Becker
NOES: None
ABSENT: None
RECUSED: Druker
APPROVED:
l,DocuSlgned by:
~!2E:!~.
Kristi Becker, Chair
ATTEST:
~
DocuSlgned by:
SkL.~.~
087CF7887878478 ...
Sheila Cobian, Interim Board Secretary
3
4868-5224-8325.4
Attachment B
CHAPMAN AND CUTLER LLP
DRAIT OF 1/7/22
SECOND AMENDMENT TO REVOLVING CREDIT AGREEMENT
This SECOND AMENDMENT TO REVOL YING CREDIT AGREEMENT ( this "Amendment") dated
as of January (14), 2022 (the "Effective Date"), is by and between CLEAN ENERGY ALLIANCE, a
public agency formed under the provisions of the Joint Exercise of Powers Act of the State of
Cali fornia, Government Code Section 6500 et. seq. (together with its successors and assigns,
"Borrower" or "CEA"), and JPMORGAN CHASE BANK, N.A. (together with its successors and
assigns, the "Lender"). All capitalized terms herein and not defined herein shall have the
respective meanings set forth in the hereinafter defined Agreement.
WITNES SE TH
WHEREAS, CEA and the Lender have entered into that certain Revolving Credit Agreement
dated as of February 3, 202 I, as amended by that certain First Amendment to Revolving Credit
Agreement, dated February 26, 2021 (together, the "Agreement "), relating to the advance of
revolving loans and the issuance of letters of credit by the Lender;
WHEREAS, CEA has requested that the Lender amend certain provisions of the Agreement
and the Lender is willing to amend such provisions pursuant to the terms and conditions provided
for herein;
WHEREAS, pursuant to Section 7.1 of the Agreement, the Agreement may be amended by
a written amendment thereto executed by the Lender and CEA;
Now THEREFORE, in consideration of the premises, the parties hereto hereby agree as
follows:
1. AMENDMENTS.
Subject to the satisfaction or waiver of the conditions precedent set forth in Section 2
below, the Agreement shall be and hereby is amended to delete the stricken text (indicated textually
in the same manner as the following example: stricken text) and to add the underlined text
(indicated textually in the same manner as the following example: underlined te as set forth in
the pages of the Agreement attached hereto as Annex A.
2. CONDITIONS PRECEDENT.
This Amendment shall become effective on the Effective Date, subject to the satisfaction
of or waiver by the Lender of all of the following conditions precedent:
2.01. Delivery by CEA and the Lender of an executed counterpart of this Amendment.
2.02. Delivery by CEA to the Lender of (i) the authorizing resolution of the Borrower
approving the execution and delivery of this Amendment and the Amended and Restated Fee
Agreement, dated the date hereof (the "Fee Agreement"), by and between the Borrower and the
Attachment B -2nd Amendment to Revolving Credit Agmt (JPM-CEA)[21007]
4343067
Lender, and performance of its obligations hereunder, (ii) opinions of (a) Nixon Peabody LLP,
special counsel to the Borrower, and (b) Richards, Watson & Gershon, a Professional Corporation,
general counsel to the Borrower, each dated the Effective Date and each addressed to the Lender
in the form satisfactory to the Lender and its counsel and (iii) a customary certificate executed by
the appropriate officers of the Borrower including the incumbency and signature of the officer of
the Borrower executing this Amendment and the Fee Agreement.
2.03. Delivery by CEA to the Lender of evidence of (i) CEA's January 2022 rate increase
and (ii) CEA's approval of the Cities of San Marcos and Escondido to become members of CEA,
each in form satisfactory to the Lender and its counsel.
2.04. Payment of all fees and expenses of the Lender, including the Lender's $10,000
amendment fee and the Lender's reasonable legal fees, incurred in connection with the preparation
of this Amendment.
2.05. All other legal matters pertaining to the execution and delivery of this Amendment
shall be reasonably satisfactory to the Lender and its counsel.
3. REPRESENTATIONS AND WARRANTIES
3.01. Borrower represents and warrants to the Lender as follows:
(a) the undersigned (i) is, on and as of the Effective Date, the duly appointed,
qualified and acting Chief Executive Officer of CEA and (ii) has been and is duly
authorized to execute and deliver, in the name of, for and on behalf of CEA, this
Amendment;
(b) the representations and warranties of CEA contained in the Agreement and
each of the Basic Documents are true and correct on and as of the Effective Date as though
made on and as of each such date; and
(c) no Default or Event of Default has occurred and is continuing or would result
from the execution of this Amendment.
3.02. In addition to the representations given in the Agreement, the Borrower hereby
ratifies and affim1s that, both before and after giving effect to this Amendment:
(a) The Net Revenues are pledged by the Borrower to the payment of the
Obligations without priority or distinction of one Obligation over another Obligation. The
pledge of Net Revenues is valid and binding in accordance with the terms of the Act, the
Joint Powers Agreement and the Resolution, and the Net Revenues shall immediately be
subject to the pledge, and the pledge shall constitute a lien and security interest which shall
immediately attach to the Net Revenues and be effective, binding, and enforceable against
the Borrower, its successors, creditors, and all others asserting the rights therein, to the
extent set forth in the Agreement, and in accordance with the Act, the Joint Powers
Agreement and the Resolution, irrespective of whether those parties have notice of the
-2 -
4.
pledge and without the need for any physical delivery, recordation, filing, or further act.
The pledge of the Net Revenues made in the Agreement shall be irrevocable w1til the
Commitment has expired or been terminated and the principal of and interest on each Loan
and all fees payable hereunder shall have been paid in full and all Letters of Credit shall
have expired or terminated, in each case, without any pending draw, and all LC
Disbursements shall have been reimbursed. Notwithstanding any other provision of the
Agreement to the contrary, all Obligations are limited obligations of the Borrower payable
solely from Net Revenues. The pledge of the Net Revenues made in the Agreement shall
be senior to any pledge of the Net Revenues made with respect to any Subordinate Debt.
MISCELLANEOUS.
Except as specifically amended herein, the Agreement shall continue in full force and effect
in accordance with its terms. Reference to this Amendment need not be made in any note,
document, agreement, letter, certificate, the Agreement or any communication issued or made
subsequent to or with respect to the Agreement, it being hereby agreed that any reference to the
Agreement shall be sufficient to refer to, and shall mean and be a reference to, the Agreement, as
hereby amended. In case any one or more of the provisions contained herein should be invalid,
illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining
provisions contained herein shall not in any way be affected or impaired hereby. All capitalized
terms used herein without definition shall have the same meanings herein as they have in the
Agreement. THIS AMENDMENT ANO THE AGREEMENT, AS AMENDED HEREBY' SHALL BE DEEMED TO
BE A CONTRACT UNDER, AND FOR ALL PURPOSES SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED TN ACCORDANCE WITH, THE LAWS OF THE STATE OF CALTFORNIA WITHOUT GIVING
EFFECT TO CONFLICTS OF LAWS PROVISIONS; PROVIDED, THAT THE OBLIGATIONS OF THE LENDER
HEREUNDER SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING
EFFECT TO CONFLICTS OF LA ws PROVISIONS. Section 7 .14 of the Agreement is incorporated herein
by reference.
This Agreement may be executed in counterparts (and by different parties hereto on
different counterparts), each of which shall constitute an original, but all of which when taken
together shall constitute a single contract;provided that such execution shall be in accordance with
Section 7 .11 of the Agreement, which Section 7 .11 is incorporated herein by reference.
[STGNATUREP AGE TO F OLLOW]
-3 -
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed
and delivered by their respective officers hereunto duly authorized as of the Effective Date.
CLEAN ENERGY ALLIANCE
By:
Name: Barbara Boswell
Title: Chief Executive Officer
JPMORGAN CHASE BANK, N.A.
By:
Name: Allyson Goetschius
Title: Executive Director
Signature Page to Second Amendment to Revolving Credit Agreement (JPM-CEA)
ANNEX A TO SECOND AMENDMENT TO
REVOL VTNG CREDIT AGREEMENT
(ATTACHED)
REVOLVING CREDIT AGREEMENT
Dated as of Febrnary 3, 2021
by and between
CLEAN ENERGY ALLIANCE,
as Borrower
and
JPMORGAN CHASE BANK, N.A.,
as Lender
Attachment C
EXECUTION VERSION
Annex A -ttt2nd Amendment to Revolving Credit Agreement (JPMorgan-CEA 2021) 4833 2149 44914885-7456-9224 v5.docx
4343067
SECTION
ARTICLE 1
Section l . I .
Section 1.2.
Section 1.3.
Section 1.4.
ARTICLE2
Section 2.1.
Section 2.2.
Section 2.3.
Section 2.4.
Section 2.5.
Section 2.6.
Section 2.7.
Section 2.8.
Section 2.9.
Section 2.10.
Section 2.11.
Section 2.12.
Section 2.13.
Section 2. I 4.
Section 2.15.
Section 2. 16.
Section 2.17.
Section 2.18.
ARTICLE3
Section 3 .1.
Section 3.2.
Section 3.3.
ARTICLE4
Section 4.1.
Section 4.2.
Section 4.3.
Section 4.4.
Section 4.5.
Section 4.6.
Section 4.7.
Section 4.8.
TABLE OF CONTENTS
HEADING PAGE
DEFINITIONS ............................................................................................. 1
Definitions .......................................................................................... I
Terms Generally ........................................................................... ¼11
Accounting Terms; GAAP ............................................................ ¼11
Interest Rates; LIBORBenchmark Notification ............................. +618.
THE CREDITS ...................................................................................... +618.
Commitments ............................................................................... +618
Loans and Borrowings .................................................................. tt 18
Requests for Revolving Borrowings .............................................. tt 12
Letters of Credit. ........................................................................... tt 1.2
Interest Elections .......................................................................... :2,022
Termination and Reduction of Commitment ................................. P-23
Repayment of Loans; Evidence ofDebt.. ...................................... P-24
Prepayment of Loans .................................................................... P-24
Fees .............................................................................................. ~24
Interest. ......................................................................................... ~25
Alternate Rate of Interest; Illegality .............................................. ~.26
Increased Costs ............................................................................. U 2.1
Break Funding Payments .............................................................. ~2.8.
Payments Free of Taxes ................................................................ ~.22
Payments Generally ...................................................................... ~lQ
Mitigation Obligation ................................................................... ;!-931
Extension of Maturity Date ........................................................... ;!-93.l
Pledge; Security of Obligations ..................................................... ;!-931
CONDITIONS ........................................................................................ W32
Conditions Precedent to Effectiveness .......................................... Wl2
Conditions Precedent to each Credit Event... ................................. U .13.
Condition Subsequent to Closing Date .......................................... ~ll
REPRESENTATIONS AND WARRANTIES ................................................. ~34
Organization, Powers, Etc ............................................................. ~3.4
Authorization, Absence of Conflicts, Etc ...................................... ~l4
Binding Obligations ...................................................................... ~3.4
Governmental Consent or Approval .............................................. 3-3-11
Absence of Material Litigation ...................................................... 3-3-.15.
Financial Condition ...................................................................... 3-3-.15.
Incorporation of Representations and Warranties .......................... 3-3-35
Accuracy and Completeness oflnformation .................................. M-3..5.
-1-
Section 4.9.
Section 4.10.
Section 4.11.
Section 4.12.
Section 4.13.
Section 4.14.
Section 4.15.
Section 4.16.
Section 4.17.
Section 4.18.
Section 4.19.
Section 4.20.
ARTICLES
Section 5.1.
Section 5 .2.
ARTICLE6
Section 6.1.
Section 6.2.
ARTICLE 7
Section 7 .1 .
Section 7.2.
Section 7.3.
Section 7.4.
Section 7.5.
Section 7.6.
Section 7.7.
Section 7.8.
Section 7.9.
Section 7 .10.
Section 7.11.
Section 7 .12.
Section 7.13.
Section 7 .14.
Section 7.15.
Section 7 .16.
Section 7.17.
Section 7.18.
Section 7.19.
Section 7.20.
No Default .................................................................................... 343..6
No Proposed Legal Changes ......................................................... 343..6
Compliance with Laws, Etc .......................................................... 34J.Q
Environmental Matters .................................................................. 3416
Regulation U ................................................................................ 34l2
Liens ............................................................................................. 3436
Sovereign Immunity ..................................................................... ~16
Usury ............................................................................................ ~31
Insurance ...................................................................................... ~3..1
ERISA .......................................................................................... ~ll
Sanctions Concerns and Anti-Corruption Laws ............................. ~31
System Debt ................................................................................. ~3 7
COVENANTS ........................................................................................ ~11
Affirmative Covenants .................................................................. ~3..1
Negative Covenants ...................................................................... 4-l-44
D EFAULTS ........................................................................................... 434_6
Events of Default and Remedies ................................................... 4346
Remedies ...................................................................................... 451.8.
MISCELLANEOUS ................................................................................. 4 61.2
Amendments, Waivers, Etc ........................................................... 46:l.2.
Notices ......................................................................................... 461.2
Survival of Covenants; Successors and Assigns ............................ 4'.7.5{1
No Recourse Against Constituent Members of CEA ..................... 4851
Liability of Lender; Indemnification ............................................. 485 I
Expenses ....................................................................................... 4952
No Waiver; Conflict ..................................................................... 4952
Modification, Amendment Waiver, Etc ......................................... 4953
Dealings ....................................................................................... 4953.
Severability .................................................................................. -SG5,1
Counterparts; Integration; Effectiveness; Electronic Execution ..... -SG53
Table of Contents; Headings ......................................................... M-.5..4
Entire Agreement. ......................................................................... ~54
Governing Law Waiver of Jury Trial ............................................ ~54
Reserved ....................................................................................... £.5..5.
USA PATRIOT Act. ..................................................................... £55
Reserved ....................................................................................... £.5.5.
Assignment to Federal Reserve Bank ............................................ £55
Reserved ....................................................................................... £.5.5.
Arm's Length Transaction ............................................................ £.5.5.
-11-
EXHIBITS
Exhibit A
Exhibit B
Exhibit C
Exhibit D-1
Exhibit D-2
Exhibit D-3
Exhibit E
Exhibit F
Exhibit G
Form of Opinion of Nixon Peabody LLP
Form of Compliance Certificate
Form of Borrowing Request
Form of Letter of Credit Request
Short Form Letter of Credit Application
Form of Continuing Agreement for Commercial and Standby Letters of Credit
Form of Account Control Agreement
Form of Intercreditor and Collateral Agency Agreement
Form of Security Agreement
-Ill-
REVOL VTNG CREDIT AGREEMENT
THIS REVOLVING CREDIT AGREEMENT, dated as of Febrnary 3, 2021 (together with all
amendments and supplements hereafter, this "Agreement") is by and between CLEAN ENERGY
ALLIANCE, a public agency formed under the provisions of the Joint Exercise of Powers Act of the
State of California, Government Code Section 6500 et. seq. (together with its successors and
assigns, "Borrower" or "CEA"), and JPMORGAN CHASE BANK, N.A. (together with its successors
and assigns, the "Lender").
WI TN E S SET H:
WHEREAS, Borrower has requested, and Lender has agreed to make available to Borrower,
a revolving credit facility upon and subject to the terms and conditions set forth in this Agreement;
Now THEREFORE, in consideration of the ·premises and the mutual agreements herein
contained, the Borrower and the Lender agree as follows:
ARTICLE 1
DEFINITIONS
Section 1.1. Definitions. As used in this Agreement:
"Account Control Agreement" means the Account Control Agreement, substantially in the
form attached hereto as Exhibit E, as amended and supplemented in accordance with the terms
hereof, by and among by and among (i) River City Bank, a California corporation, (ii) CEA and
(iii) River City Bank, a California corporation, not in its individual capacity, but solely as
collateral agent.
"Act " means the Joint Exercise of Powers Act of the State of California, Government Code
Section 6500 et. seq.
"Adjusted bll).f)Term SOFR Rate" means, with respect to any EtHodollar B01Towing
Loan for any Interest Period, an interest rate per annum (rounded up'Nards, if necessary, to ti
1/16 of 1° · -~-"""'="'=~ · t for such Interest P · lti lied
te_d
b.e
"Affiliate" means, with respect to a specified Person, another Person that directly, or
indirectly through one or more inte,mediaries, Controls or is Controlled by or is under common
Control with the Person specified.
"Agreement" has the meaning set forth in the introductory paragraph hereof.
~ternate RatL hasJh~_meaningJlssiw,.d to such te1111 in Section 2J_U...(,u
"Annual Debt Service" means, as of any date of calculation, for any Fiscal Year or other
designated four fiscal quarter period, the sum of (a) all interest and fees (including facility fees,
undrawn fees and commitment fees) due and payable on the Loans, other Parity Debt and other
Subordinate Debt (or, in the case of projected Annual Debt Service, projected to be due and
payable) in such Fiscal Year or other designated four fiscal quarter period and (b) the quotient
obtained by dividing the average daily outstanding principal balance of the Loans, other Parity
Debt and Subordinate Debt during such Fiscal Year or other designated four fiscal quarter period
by 5.
"Anti-Corruption Laws" means all laws, rules, and regulations of any jurisdiction
applicable to the Borrower from time to time concerning or relating to bribery or corruption.
"Applicable Law" means (i) all applicable common law and principles of equity and (ii) all
applicable provisions of all (A) constitutions, statutes, rules, regulations and orders of all
governmental and non-governmental bodies, (B) Governmental Approvals and (C) orders,
decisions, judgments and decrees of all courts (whether at law or in equity) and arbitrators.
"Applicable Margin" has the meaning set forth in the Fee Agreement.
"Audited Financial Statements" has the meaning set forth in Section 4.6.
"Authorized Representative" means an "Authorized Representative" as defined in the
Resolution, and any other individual designated from time to time as an "Authorized
Representative" in a certificate executed by the Borrower and delivered to the Lender.
t.0...secure aOY Debt of the Borr · -·nsurn~nd c · insui:ao.cJ~_.funds: (5) anv
pension..,a11d retirementfunds: et ... Y~iliL<~_QilQlla QS.ted o~...irte_a
te.m1inatio!L a rnc_nts under an
"Availability Period" means the period from and including the Closing Date to but
excluding the earlier of the Maturity Date and the date of termination of the Commitment.
"Bank Agreement" means any credit agreement, liquidity agreement, standby bond
purchase agreement, reimbursement agreement, direct purchase agreement, bond purchase
agreement, or other agreement or instrument (or any amendment, supplement or other
modification thereof} under which, directly or indirectly, any Person or Persons undertake(s) to (x)
make or provide funds to make payment of, or to purchase or provide credit enhancement for,
bonds or notes of the Borrower or (y) extend credit to the Borrower.
"Base Rate" means, for any day, a rate per annum equal to the greatest of (a) the Prime
--2--
Rate in effect on such day, (b) the NYFRB Rate in effect on such day plus 0.5% per annum, and (c)
the Adjusted LI-BGTur.m SOFR Rate for a one month Interest Period ooas published two lL.S....
1~t ecur_tle us·nes a~prior to such day (or if such day is not a Business Day, the
immediately preceding Business Day) plus 1 %; pro'ilid-ed that for the purpose of this definition, the
Adjusted LIBO Rate for any day shall be based on the LIBO Screen R1tte (or if the LlBO Screen
Rate is not a1,cailable for such one month Interest Period, the Interpolated Rate) at approximately
l l :00 a.m. London time on such day. Any change in the Base Rate due to a change in the Prime
Rate, the NYFRB Rate or the Adjusted LI-BGTum SOFR Rate shall be effective from and
including the effective date of such change in the Prime Rate, the NYFRB Rate or the
LI-BG d "u&e.1 T r Rate, respectively. If the Base Rate is being used as an alternate rate
of interest pursuant to Section 2. I 1 hereof, then the Base Rate shall be the greater of elattsecla.uses
(a) and (b) above and shall be determined without reference to clause (c) above. For the avoidance
of doubt, if the Base Rate sha-llfls...d_~ine_d_ ursuant t the Q[_e o · n ould be less than one
~t (1.0%), such rate shall be deemed to be one percent (1.0%) for purposes of this Agreement.
"Base Rate Borrowing ", when used in reference to any Loan or Borrowing of a Loan,
refers to whether such Loan or Borrowing bears interest at a rate determined by reference to the
Base Rate.
"Basic Documents" means, at any time, each of the following documents and agreements
as in effect or as outstanding, as the case may be, at such time: (a) this Agreement, including
schedules and exhibits hereto, (b) the Fee Agreement, and (c) and any other documents executed
and delivered by Borrower in connection with this Agreement or the Fee Agreement, if any. For
the avoidance of doubt, PP As are not Basic Documents.
"Benchmark Transition Event" means the occurrence of one or more of the following
events w ith respect to the Y-BGTuan-.S_OFR Rate:
(+i)-=a public statement or publication of information by or on behalf of the
I,enn_SOFR Admi · · · · administrator of the LIBO Screen
SOFR Rate or the in the cal ul_ation thereo announcing that
such administrator rato has ceased or will cease to provide the
LIBO ScreenTerm onent thereo , permanently or indefinitely,
provided that, at the time of such statement or publication, there is no successor
administrator that will continue to provide the LIBO Screen:Torm SOER Rate (or such
compo~nt tllere_oD; or
c1·· -_a public statement or publication of information by the Nl;.l.a!,,A,,o!~>..l;!.~~=i:!.';
R~er~e_B ard. Qr a li_c_a I tb regulatory supervisor for the administrator of the
LIBO Screen Rate, the U.S. Federal Resen•e SystemCME Term SOFR Administrator, an
insolvency official with jurisdiction over the administrator for the 61B0 Screen Rate ME
-3-
Term SOFR Administrator, a resolution authority with jurisdiction over the administrator
for the LlBO Sereea RateCME Term.. SOFR Administrator. or a court or an entity with
similar insolvency or resolution authority over the administrator for the LIBO Sereea Rate,
ME T rm FR Admini trat r in ea h ca e which states that the CME Term SOFR
drninistrator or an s ccessor administrator of the LIBO SereenTe1m SOFR Rate, or the
pJili.lished component used in the calculation thereof) has ceased or will cease to provide
the LIBO Sereen'.I.erm S _ER Rate (or such component there,Qf), permanently or
indefinitely, provided that, at the time of such statement or publication, there is no
successor administrator that will continue to provide the LIBO SereenTerm SOFR Ratel,QJ;
such component thereof}; or
(J.ili)-=a public statement or publication of information by the Federal Reserve
.Bmm:I he NYFRB the ME Term SOFR A mini trat r r the regulatory supervisor for
the CME Term SOFR Administrator <or any successor administrator of the bIBG
SereenTe m FR Rate Q.Lth~ JJ.hlished_com onent used in the cak._u_LaJi.on.Jh~~
announcing that the LlBO SereenTerm SOFR Rate (or such component thereof) is no
longer r a fa ecified futw-e date ill _Q_LQn e · e representative.
For tM.,J1Yoidance_of __ .d0.1J.b.t, a "Benchmark Transition Eve11-C_will be d __ ee,me __ d to have
occurred with respect to the Term SOFR Rate if a public statement or publication of infonnation
set forth above has occurred with respect to each then-cmTen.La.Yailable tenor of the Term SOFR
~
"Board" means the Board of Directors of the Borrower.
"Borrower" has the meaning set forth in the introductory paragraph hereof.
"Borrowing" means the making, conversion or continuation of a Loan.
"Borrowing Request" means a request by the Borrower for a Borrowing in accordance
with Section 2.3 and in the form of Exhibit C hereto.
"Business Day" means any day that is not a Satw-day, Sunday or other day on which
commercial banks in New York City_, Chicago or San Diego are authorized or required by law to
remain closed; provided that, when used in connection with a EurodollarSOFR Loan, the term
"Business Day" shall also exclude any day on which banks are not opea for dealings in dollar
deposits in the London interbank marketthe Securities Industry and Financial Markets Association
recommends that the fixed income departments of its members be closed for the entire day for
purposes of trading in United States government securities.
"Cash Collateral Loan" means a Loan (or a portion of a Loan) the proceeds of which are
deposited with a Person other than the Borrower in order to secure the Borrower's payment
obligations under one or more PP As or to make a termination payment under PP As.
"Change in Law" means the occurrence after the date of this Agreement of (a) the adoption
of or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rnle, regulation
-4-
or treaty or in the interpretation or application thereof by any Governmental Authority or (c)
compliance by the Lender (or, for purposes of Section 2.12(b), by any lending office of the Lender
or its holding company, if any) with any request, guideline or directive (whether or not having the
force of law) of any Governmental Authority made or issued after the date of this Agreement;
provided that, notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street
Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or
issued in connection therewith and (y) all requests, rules, guidelines or directives promulgated by
the Lender for International Settlements, the Basel Committee on Banking Supervision ( or any
successor or similar authority) or the United States or foreign regulatory authorities, in each case
pursuant to Basel III, shall be deemed to be a "Change in Law," regardless of the date enacted,
adopted or issued.
"Closing Date" means the first date on which the conditions precedent set forth in Section
3.1 hereof are satisfied and/or waived in writing by the Lender.
"Code" means the Internal Revenue Code of 1986, as amended from time to time,
including regulations, rulings and judicial -decisions promulgated thereunder.
"Commitment" means the commitment of the Lender to make Loans and to issue Letters of
Credit, expressed as an amount representing the maximum aggregate amount of the Lender's
Revolving Credit Exposure hereunder, as such commitment may be reduced from time to time
pursuant to Section 2.8. The initial amount of the Commitment is $6,000,000. t e
~ m ndm nt ffi ti D the arnrum.LQfJ.he Commitm n i 1 00 Q
"Connection Income Taxes" means Other Connection Taxes that are imposed on or
measured by net income (however denominated) or that are franchise Taxes or branch profits
Taxes.
"Control" means the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of a Person, whether through the ability to exercise voting
power, by contract or otherwise, "Controlling" and "Controll ed" have meanings correlative
thereto.
"Credit Swead A_dj_ustment" means 0.10% per annum.
er
QLlia_ys,-.0.btaiD.kd by dividing (j) sum of Available Liguidity and the.J.1..o.utili~ Co,m__mitment (as . . . ..
or
"Debt " of any Person means, at any date, without duplication, (a) all obligations of such
-5-
Person for borrowed money, (b) all obligations of such Person evidenced by bonds, debentures,
notes or other similar instruments, (c) all obligations of such Person to pay the deferred purchase
price of property or services, except trade accounts payable arising in the ordinary course of
business, (d) all obligations of such Person as lessee under capital leases, (e) all debt of others
secured by a Lien on any asset of such Person, whether or not such debt is assumed by such Person,
(f) all Guarantees by such Person of debt of other Persons, (g) the net obligations of such Person
under any Swap Agreement and (h) all obligations of such Person to reimburse or repay any bank
or other Person in respect of amounts paid or advanced under a letter of credit, credit agreement,
liquidity facility or other instrument. The amount of any net obligation under any Swap
Agreement on any date shall be deemed to be the Swap Termination Value thereof as of such date.
"Debt Service Coverage Ratio" means, for any fiscal quarter of the Borrower, the quotient
obtained by dividing Net Revenues by Annual Debt Service, in each case as determined for the
four consecutive fiscal quarter periods ended on the last date of such fiscal quarter.
"Debt Service Coverage Ratio Notice" has the meaning set forth in Section 5.1(q) hereof.
"Default" means any condition or event which with the giving of notice or lapse of time or
both would, unless cured or waived, become an Event of Default.
"Default Rate" has the meaning set forth in the Fee Agreement.
"Direction Letter" has the meaning set forth in the Security Agreement.
"dollars" or "$" refers to lawful money of the United States of America.
"EEi Master Agreement" means the EEI Master Power Purchase and Sale Agreement,
version 2.1 (modified 4/25/00), created by the Edison Electric Institute and National Energy
Marketers Association.
"Electronic System" means any electronic system, including e-mail, e-fax, web portal
access for the Borrower, and any other Internet or extranet-based site, whether such electronic
system is owned, operated or hosted by the Lender and any of its respective Related Parties or any
other Person, providing for access to data protected by passcodes or other security system.
"Electronic Signature" means an electronic sound, symbol, or process attached to, or
associated with, a contract or other record and adopted by a person with the intent to sign,
authenticate or accept such contract or record.
"Employee Plan " means an employee benefit plan covered by Title W of ERISA and
maintained for employees of the Borrower.
"Environmental Laws" means any and all federal, state and local statutes, laws,
regulations, ordinances, rules,judgments, orders, decrees, permits, concessions, grants, franchises,
licenses, agreements or other governmental restrictions relating to the environment or to
emissions, discharges or releases of pollutants, contaminants, petroleum or petroleum products,
-6-
chemicals or industtial, toxic or hazardous substances or wastes into the environment including,
without limitation, ambient air, surface water, ground water or land, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of
pollutants, contaminants, petroleum or petroleum products, chemicals or industrial, toxic or
hazardous substances or wastes or the clean-up or other remediation thereof.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended, or
any successor statute thereto.
"Eurndelle1·" •uhee used ie refere0ee to afly Loafl or Borro:\vieg of a Loan, refers to
whether S\:leh LoaA, or the Loan comprising S\:leh BorrowiAg, bears iAtcrest at a rate determiAed by
refereece to the Adjusted LIBO Rate.
"Event of Default" has the meaning set forth in Section 6.1 hereof.
"Excluded Taxes" means, with respect to the Lender or any Participant, (a) taxes imposed
on or measured by its overall net income (however denominated), and franchise taxes imposed on
it (in lieu of net income taxes), by the jurisdiction (or any political subdivision thereof) under the
laws of which the Lender or such Participant is organized or in which its principal office is located
and (b) any branch profits taxes imposed by the United States or any similar tax imposed by any
other jurisdiction in which the Borrower is located.
"Existing Debt" means (i) that certain Agreement, dated June 1, 2020, between the
Borrower and Calpine, including that certain Promissory Note, issued in connection therewith by
Borrower to Calpine, currently outstanding in the aggregate principal amount of $400,000, and (ii)
that certain Agreement, dated June 1, 2020, between the Borrower and Calpine, including that
certain Promissory Note 2, issued in connection therewith by Borrower to Calpine, currently
outstanding in the aggregate principal amount of $250,000.
"FATCA " means Sections 1471 through 1474 of the Code, as of the date of this Agreement
( or any amended or successor version that is substantively comparable and not materially more
onerous to comply with), any cutTent or future regulations or official interpretations thereof and
any agreement entered into pursuant to Section 1471 (b )(1) of the Code.
"Federal Funds Effective Rate" means, for any day, the rate calculated by the NYFRB
based on such day's federal funds transactions by depositary institutions, as determined in such
manner as shall~ set forth on NYFR1ltb~_l:. rat es..erve Bank of e Y rk's Website from
time to time, and published on the next succeeding Business Day by the NYFRB as the effective
federal funds rate, provided that, if the Federal Funds Effective Rate as so determined would be
less than zero (0.0%), such rate shall be deemed to be zero (0.0%) for the pmposes of this
Agreement.
http://www.newyorkfeJ:l.o.rg..,Q.cany successor rnce.
"Federal Reserve Board" means the Board of Governors of the Federal Reserve System of
-7-
the United States of America.
"Fee Agreement" means the_Amended and estat d Fee Agreement ofe¥et1 date herewith~
.dated the ec nd Am_endm nt EffuG_ti e Date1 between the Borrower and the Lender, as
supplemented, amended, restated or otherwise modified from time to time.
"Fiscal Year" means each twelve-month period commencing on July 1 of a calendar year
and ending on June 30 of the fo llowing calendar year.
doubLtl
"GAAP" means generally accepted accounting principles in the Un ited States of America
from time to time as set forth in (a) the opinions and pronouncements of the Accounting Principles
Board and the American Institute of Certified Public Accountants and (b) statements and
pronouncements of the Government Accounting Standards Board, as modified by the opinions,
statements and pronouncements of any similar accounting body of comparable standing having
authority over accounting by governmental entities.
"Governmental Approval" means an authorization, consent, approval, license or
exemption of, registration or filing with, or report to, any Governmental Authority.
"Governmental Authority" means the government of the United States or any other nation
or any political subdivision thereof or any governmental or quasi-governmental entity, including
any court, department, commission, board, bureau, agency, administration, central bank, service,
district or other instrumentality of any governmental entity or other entity exercising executive,
legislative, judicial, taxing, regulatory, fiscal, monetary or administrative powers or functions of or
pertaining to government, or any arbitrator, mediator or other Person with authority to bind a party
at law.
"Guarantees" means, for any Person, all guarantees, endorsements ( other than for
collection or deposit in the ordinary course of business) and other contingent obligations of such
Person to purchase, to provide funds for payment, to supply funds to invest in any other Person or
otherwise to assure a creditor of another Person against loss.
"Im-peeled Interest Peried" has the meaning assigned to it in the definition of "LIBO
~
"Indemnified Taxes" means (a) Taxes other than Excluded Taxes and (b) to the extent not
otherwise described in (a) hereof, Other Taxes.
"fntercreditor and Collateral Agency Agreement" means the Tntercreditor and Collateral
Agency Agreement, substantially in the form attached hereto as Exhibit F, as amended and
supplemented in accordance with the terms hereof, is entered into by and among (i) River City
-8-
Bank, a California corporation, not in its individual capacity, but solely in its capacity as collateral
agent, (ii) each of the creditors from time to time signatory thereto that are party to a PPA, and (iii)
CEA.
"Interest Election Request" means a request by the Borrower to convert or continue a
Revolving Borrowing (other than a Base Rate Borrowing of a Reimbursement Loan) in
accordance with Section 2.5.
"Interest Payment Date" means, (a) with respect to any Base Rate Loan, the first Business
Day of the mont and the atuJiJ are and (b) with respect to any Eurodollar Loan, the
last day of the Interest Period applicable to the Borrowing of which such Loan is a part n.d..Jhe
Maturi Date.
"Interest Period" means, with respect to any Eurodollar BorrowiHgSOFR Loans, the
period commencing on the date of such Eurodollar Borrowing and ending on the numerically
corresponding day in the calendar month that is one or three months thereafter, as the Borrower
may elect; provided, that (t~ if any Interest Period would end on a day other than ic is not a
Business Day, such Interest Period shall be extended to the next succeeding Business Day unless
such next succeeding Business Day would fall in the next calendar month, in which case such
Interest Period shall end on the next preceding Business Day-arui~ (tth) any Interest Period that
commences on the last Business Day of a calendar month ( or on a day for which there is no
numerically con-esponding day in the last calendar month of such Interest Period) shall end on the
last Business Day of the last calendar month of such Interest Perio a d !lQ.Jnte ·es..t...£~ciQd..lna
e tend e 1d the a ate. For purposes hereof, the date of a Borrowing initially shall be
the date on which such Borrowing is made and, in the case of a Revolving Borro-.ving, thereafter
shall be the effective date of the most recent conversion or continuation of such Borrowing.
"lnle~pokited Rete" means, at any time, for any Interest Period, the rate per annwn
(roU:Aded to the same number of decimaJ places as the LIBO Screen Rate) determined by the
Lender (which determination shall be conclusive and binding absent manifest error) to be equal to
the rate that results from interpolating on a linear basis between: (a) the LIBO Screen Rate for the
longest period for which the LIBO Screen Rate is available that is shorter thB-fl the Impacted
Interest Period; and (b) the LIBO Screen Rate for the shortest period (for which that LIBO Screen
Rate is available that exceeds the Impacted Interest Period, in eacll case, at such time.
"Investment Policy" means the investment guidelines of the Borrower as in effect on the
date hereof, as such investment guidelines may be amended from time to time in accordance with
State laws.
"Joint Powers Act" means the Joint Exercise of Powers Act of the State of California
(Government Code Section 6500, et. seq.)
"Joint Powers Agreement" means the Joint Powers Agreement of Bon-ower effective as of
November 4, 20 I 9, and as amended from time to time.
"Law" means any treaty or any Federal, regional, state and local law, statute, rule,
-9-
ordinance, regulation, code, license, authorization, decision, injunction, interpretation, policy,
guideline, supervisory standard, order or decree of any court or other Governmental Authority.
"LC Collateral Account" has the meaning set forth in Section 2.4(h).
"LC Disbursement" means a payment made by the Lender pursuant to a Letter of Credit.
"LC Exposure" means, at any time, the sum of (a) the aggregate undrawn amount of all
outstanding Letters of Credit at such time, plus (b) the aggregate amount of all LC Disbursements
that have not yet been reimbursed by or on behalf of the Borrower at such time.
"Letter of Credit " means any letter of credit issued pursuant to this Agreement.
"Letter of Credit Fees" has the meaning set forth in the Fee Agreement.
"Letter of Credit Request" means a request by the Borrower for a Letter of Credit in
accordance with Section 2.4(a) and in the form of Exhibit D-1 hereto.
"Letter of Credit Sublimit" means $0 or, subject to the terms and conditions set fo1th
herein, such greater amount as may be agreed upon by the Lender in writing from time to time.
"Lender" has the meaning set forth in the introductory paragraph hereof.
"Liabilities" mean all claims (including intraparty claims), actions, suits, judgments,
damages, losses, liability, obligations, responsibilities, fines, penalties, sanctions, costs, fees,
Taxes, commissions, charges, disbursements and expenses (including those incurred upon any
appeal or in connection with the preparation for and/or response to any subpoena or request for
document production relating thereto), in each case of any kind or nature (including interest
accrued thereon or as a result thereto and fees, charges and disbursements of financial, legal and
other advisors and consultants), whether joint or several, whether or not indirect, contingent,
consequential, actual, punitive, treble or otherwise.
"LIBO Retc" means, with respect to any Eurodollar Borrowing for any applicable Interest
Period, the LIBO Screen Rate at approximately 11:00 a.m., London time, t\vo (2) Business Days
prior to the commencement of such Interest PerioEI; prMided that if the LlBO Screen Rate shall not
be available at such time for such Interest Period (an "Impeetcd Interest Period") then the LIBO
Rate shall be the Interpolated Rate.
"LIBO Se~·een Re.te" meafls, for any Elay and time, with respect to any El:lfodollar
Borrov,ring for any Interest Period, the London interbank offered rate as administered by ICE
Benchmark Administration (or any other Person Hlat takes over the administration of such rate, for
Dollars for a period equal in length to such Interest Period as displayed on such day and time on
pages LIBOR0l or LIBOR02 of the Reuters screen that displays such rate (or, in the event such
rate does not appear on a Reuters page or screen, on any successor or substitute page on such
screen that displays such rate, or oa the appropriate page of such other informatioa service that
publishes such rate from time to time as selected by the LeRder in its reasonable discretioR,
pm'r'ided that if the LIBO Screen Rate as so determined would be less than twenty five basis points
(0.250%), such rate shall be deemed to t\venty five basis poiets (0.250%) for the purposes of this
Agreement.
"Lien" means, with respect to any asset, (a) any lien, charge, claim, mortgage, security
interest, pledge or assignment of revenues of any kind in respect of such asset or (b) the interest of
a vendor or lessor under any conditional sale agreement, capital lease or other ti tle retention
agreement relating to such asset.
"Loans" means the loans made by the Lender to the Borrower pursuant to this Agreement,
including, without limitation, Cash Collateral Loans, the Working Capital Loans and the
Reimbursement Loans.
"Lockbox Security Document(s)" means, individually or collectively, as applicable, the
Security Agreement, the Account Control Agreement, the Intercreditor and Collateral Agency
Agreement and the Direction Letter.
"Material Adverse Change" means any material or adverse change in the business,
operations, properties, assets, liability, condition (financial or otherwise) or prospects of the
Borrower which, in the reasonable determination of the Lender, calls into question the Borrower's
ability to perform Borrower's Obligations hereunder.
"Material Adverse Effect" means (a) a Material Adverse Change in, or a material adverse
effect on, the operations, business, assets, properties, liabilities (actual or contingent), condition
(financial or otherwise) or prospects of the Borrower; (b) a material impairment of the rights and
remedies of any Lender under this Agreement or any other Basic Document, or of the ability of the
Borrower to perform its Borrower's Obligations under this Agreement and any other Basic
Document to which it is a party; or (c) a material adverse effect upon the legality, validity, binding
effect or enforceability of Bonower's Obligations under this Agreement or any other Basic
Document to which Borrower is a party.
"Material Litigation" shall have the meaning assigned to such term in Section 4.5.
"Maturity Date" means the date on which Commitment is scheduled to expire pursuant to
its terms, initially 5:00 p.m. (New York time) on February 2, 2026, or such later date to which the
Maturity Date may be extended pursuant to Section 2.17 and, if any such date is not a Business
Day, the next preceding Business Day.
"Maximum Rate" means the maximum non-usurious interest rate that may, under
applicable federal law and applicable state law, be contracted for, charged or received under such
laws.
"Member" or "Members " means, individually or collectively, as applicable, (i) the City of
Carlsbad, California (ii) the City of Del Mar, California and (iii) the City of Solana Beach,
California.
-11-
"Member Capital Advances" means the capital contributions (whether cash or in kind)
made by the Members prior to the Closing Date and outstanding in the aggregate amount of
$450,000.
"Net Revenues" means, for any period and as of any date of determination, the amount
obtained by subtracting Operating and Maintenance Costs from Revenues, in each case for such
period as of such date. Net Revenues does not include the "Collateral" as defined under the
Security Agreement.
"NYFRB" means the Federal Reserve Bank of New York.
"NYFRB Rate" means, for any day, the greater of (a) the Federa_l Funds Effective Rate in
effect on such day and (b) the Overnight Bank Funding Rate in effect on such day ( or for any day
that is not a Business Day, for the immediately preceding Business Day); provided that if none of
such rates are published for any day that is a Business Day, the term "NYFRB Rate" means the rate
for a federal funds transaction quoted at 11 :00 a.m. on such day received by the Lender from a
FederaJfr_deral funds broker of recognized standing selected by it; provided, further, that if any of
the aforesaid rates Stta-1-l-as so determined would be less than zeroJ_Q .. .0.%1, such rate shall be deemed
to be zero (0.0%) for purposes of this Agreement.
'',h/YFRB 's W~hsite" meafls the \vebsite of the NYFRB at http:tlwv,a.v.nev.ryorkfed.org, or
a!lY successor sow·ce.
"Obligations" means all obligations of the Borrower to the Lender or any Participant
arising under or in relation to this Agreement and the Fee Agreement, including all unpaid
principal of and accrued and unpaid interest on the Loans, all LC Exposure, all accrued and unpaid
fees (including, without limitation, the Undrawn Fee and the Letter of Credit Fees) and all
expenses, reimbursements, indemnities and other obligations and indebtedness (including interest
and fees accruing during the pendency of any bankruptcy, insolvency, receivership or other similar
proceeding, regardless of whether allowed or allowable in such proceeding), obligations and
liabilities of the Borrower to the Lender or any indemnified party, individually or collectively,
existing on the EffeetiveClo.sing Date or arising thereafter, direct or indirect, joint or several,
absolute or contingent, matured or unmatured, liquidated or unliquidated, secured or unsecured,
arising by contract, operation of law or otherwise, arising or incurred under this Agreement or any
of the other Basic Documents or in respect of any of the Loans made or reimbursement or other
obligations incurred or any of the Letters of Credit or other instruments at any time evidencing any
thereof.
"Operating and Maintenance Costs" shall be determined in accordance with the accrual
basis of accounting in accordance with GAAP and shall mean the reasonable and necessary costs
paid or incurred by Borrower for maintaining and operating the System, including costs of electric
energy and power generated or purchased, costs of transmission and fuel supply, and including all
reasonable expenses of management and repair and other expenses necessary to maintain and
preserve the System in good repair and working order, and including all administrative costs of
Borrower that are charged directly or apportioned to the maintenance and operation of the System,
such as salaries and wages of employees, overhead, insurance, taxes (if any) and insurance
-12-
premiums, and including all other reasonable and necessary costs of Borrower such as fees and
expenses of an independent certified public accountant, and including Borrower's share of the
foregoing types of costs of any electric properties co-owned with others, excluding in all cases
depreciation, replacement and obsolescence charges or reserves therefore and amortization of
intangibles and extraordinary items computed in accordance with GAAP or other bookkeeping
entries of a similar nature. Maintenance and Operation Costs shall include all amounts required to
be paid by Borrower under take or pay contracts.
"Operating Reserve" means a reserve fund established by the Borrower to provide a
reserve that can be utilized by the Borrower to pay Operating and Maintenance Costs (including
power costs) when Revenues are insufficient.
"Other Connection Taxes" means, with respect to the Lender, Taxes imposed as a result of
a present or former connection between the Lender and the jurisdiction imposing such Tax ( other
than connections arising from the Lender having executed, delivered, become a party to,
performed its obligations under, received payments under, received or perfected a security interest
under, engaged in any other transaction pursuant to or enforced any Basic Document, or sold or
assigned an interest in any Loan or Basic Document).
"Other Taxes" means all present or future stamp, court or documentary, intangible,
recording, filing or similar Taxes that arise from any payment made under, from the execution,
delivery, performance, enforcement or registration of, from the receipt or perfection of a security
interest under, or otherwise with respect to, any Basic Document, except any such Taxes that are
Other Connection Taxes imposed with respect to an assignment.
"Overnight Lender Funding Rate" means, for any day, the rate comprised of both
overnight federal funds and overnight Eurodollar borrmvingseurodollar transactions denominated
in Dollars by U.S.-;managed banking offices of depository institutions, (as such composite rate
shall be determined by the NYFRB as set forth on the NYFRBFederal Reserve Bank of New
York's Website from time to time,:l and published on the next succeeding Business Day by the
NYFRB as an overnight bank funding rate.
"Parity Debt " means any System Debt issued or incurred by the Bonower (i) the payment
of which is on parity with the Borrower's payment Obligations under this Agreement and (ii) that
is subject to an intercreditor agreement in form and substance satisfactory to the Lender.
"Participant" has the meaning set forth in Section 7.3(b) hereof.
"Participation" has the meaning set forth in Section 7.3(b) hereof.
"Person" means an individual, a firm, a corporation, a partnership, a limited liability
company, an association, a trust or any other entity or organization, including a government or
political subdivision or any agency or instrumentality thereof.
"PPA" means a power purchase agreement executed between the Borrower and a PPA
Counterparty. For purposes of notices, "PPA" includes EET Master Agreements, but does not
-13-
include individual transaction confirmations executed under an EEi Master Agreement or WSPP
Agreement.
"P PA Counterparty" means a party to a PP A other than the Borrower.
"Prime Rate" means the rate of interest last quoted by The Wall Street Journal as the
"Prime Rate" in the U.S. or, if The Wall Street Journal ceases to quote such rate, the highest per
annum interest rate published by the Federal Reserve Board in Federal Reserve Statistical Release
H.15 ( 519) (Selected Interest Rates) as the "bank prime loan" rate or, if such rate is no longer
quoted therein, any similar rate quoted therein (as determined by the Lender) or any similar release
by the Federal Reserve Board (as determined by the Lender).-Each change in the Prime Rate shall
be effective from and including the date such change is publicly announced or quoted as being
effective.
"Product" means any of the following: energy, renewable energy attributes, capacity
attributes, resource adequacy benefits, or any other similar or related products contemplated in the
PPAs.
"Property" means any interest in any kind of property or asset, whether real, personal or
mixed, or tangible or intangible, whether now owned or hereafter acquired.
"Reimbursement Loan" has the meaning assigned to such term in Section 2.4(d).
"Reimbursement Loan Amortization Payment Amount" means, with respect to a
Reimbursement Loan, the principal amount of such Reimbursement Loan on the applicable
Reimbursement Loan Start Date divided by the number of Reimbursement Loan Payment Dates in
the applicable Reimbursement Loan Amortization Period.
"Reimbursement Loan Amortization Period" means, with respect to a Reimbursement
Loan, the period commencing on the applicable Reimbursement Loan Start Date and ending on the
applicable Reimbursement Loan Maturity Date.
"Reimbursement Loan Maturity Date" means, with respect to a Reimbursement Loan, (the
Maturity Date.
"Reimbursement Loan Payment Date" means, with respect to a Reimbursement Loan, the
first Business Day of each calendar quarter during the applicable Reimbursement Loan
Amortization Period and the Reimbursement Loan Maturity Date.
"Reimbursement Loan Start Date" means, with respect to a Reimbursement Loan, the date
such Reimbursement Loan is made.
"Reimbursement Obligations" means any and all obligations of the Borrower to reimburse
the Lender for LC Disbursements under Letters of Credit and all obligations to repay the Lender
for any Loan relating thereto, including in each instance all interest accrned thereon.
-14-
"Related Parties" means, with respect to any specified Person, such Person's Affiliates
and the respective directors, officers, employees, agents and advisors of such Person and such
Person's Affiliates.
"Relevant Governmental Body" means the Federal Reserve Boardz-W· the NYFRB, th~
CME Te1m SOFR Administrator, as applicable, or a committee officiall y endorsed or convened by
~Jier.al Reserve Board or the NYFRB, or, in each c~. any successor thereto.
"Requirement of Law" means, with respect to any Person, (a) the charter, articles or
certificate of organization or incorporation and bylaws or operating, management or partnership
agreement, or other organizational or governing documents of such Person and (b) any statute, law
(including common law), treaty, rule, regulation, code, ordinance, order, decree, writ, judgment,
injunction or determination of any arbitrator or court or other Governmental Authority (including
Environmental Laws), in each case applicable to or binding upon such Person or any of its
property or to which such Person or any of its property is subject.
"Reserve Funds Notice" has the meaning set forth in Section 5.1 (r) hereof.
"Reserve Policy" means the Financial Reserve Policy (CEA-09) of the Borrower, adopted
by CEA on January 21 , 2021.
"Resolution" means Resolution No. 2021-004, adopted by CEA on January 21, 2021.
"Revenues" means all revenues, rates and charges received and accrued by the Borrower
for electric power and energy and other services, facilities and commodities sold, furnished or
supplied by the System, together with income,· earnings and profits therefrom, as determined in
accordance with GAAP.
"Revolving Borrowing" means a Loan hereunder other than a Loan for which the proceeds
thereof are used to repay Reimbursement Obligations.
"Revolving Credit Exposure" means, with respect to the Lender at any time, the sum of the
outstanding principal amount of the Loans and its LC Exposure at such time.
"Sanctioned Country" means, at any time, a country, region or territory which is the
subject or target of any Sanctions ( at the time of this Agreement, Crimea, Cuba, Iran, North Korea,
and Syria).
"Sanctioned Person" means, at any time, (a) any Person listed in any Sanctions-related
list of designated Persons maintained by the Office of Foreign Assets Control of the U.S.
Department of the Treasury, the U.S. Department of State, or by the United Nations Security
Council, the European Union, any European Union member state, Her Majesty's Treasury of the
United Kingdom or other relevant sanctions authority, (b) any Person operating, organized or
resident in a Sanctioned Country, (c) any Person owned or controlled by any such Person or
Persons described in the foregoing clauses (a) or (b), or (d) any Person otherwise the subject of any
Sanctions.
-15-
"Sanctions" means all economic or financial sanctions or trade embargoes imposed,
ad.ministered or enforced from time to time by (a) the U.S. government, including those
administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury or the
U.S. Department of State, or (b) the United Nations Security Council, the European Union, any
European Union member state or Her Majesty's Treasury of the United Kingdom or other relevant
sanctions authority.
~Second Amendme tive DalLl..nms..lanua tl1e...Effec1iY.e _a1_
oft enuo Revolving Credit Agre~.J__ated.h®azy f 141. 2022. be.tw.een.Jhe
Len er
"Security Agreement" means the Security Agreement, substantially in the form attached
hereto as Exhibit G, as amended and supplemented in accordance with the terms hereof, by and
among CEA, and River City Banl<, a California corporation, not in its individual capacity, but
solely as collateral agent, for the benefit of the each seller of Product under a PPA that is made a
party to the Intercreditor Agreement, and its respective successors and assigns.
"Senior Debt" means any System Debt issued or incurred by the Borrower, whether
secured or unsecured, the payment of which is senior to the payment in full of the Borrower's
payment Obligations under this Agreement.
ht finan_cin
ight finan.c.iDg__rntet
"SOFR Borrowin'l" means any Borrowing bearing inte~t the Adius..ted.Irn.SO.ER
ate
earin in.ten: t at the.Ad. t d___Ierrn SOFR Rate
"State" means the State of California.
"Stattttmy Rcscn;c Rate" meaHs a fraction (expressed as a decimal), the numerator of
v,hich is the number one and the denominator of vthich is the number one minus the aggregate of
the maximum reserve percentage (including any marginal, special, emergency or supplemental
reseIVes) established by the Federal Reser11e Board to which the Lender is subject with respect to
the Adjusted LIBO R11:te, for eurocw=rency fUHding (currently referred to as "Eurocurr'ctwy
liabilities" in Regulation D). Such resen1e percentage shall include those imposed pursuant to
such Regulation D of the Federal Resen1e Board. Eurodollar Loans shall be deemed to constitute
euroc\:ln-eAcy funding and to be subject to such reser.1e requirements •.vitho\:lt benefit of or credit
for proration, exemptions or offsets that may be ai,ailable from time to time to the Lender under
RegulatioA D of the Federal Reserve Board or any eomparable regulation. The Statutory Reserve
Rate shall be adjusted automatically on and as of the effective date of afly change in any reserve
percentage.
"Subordinate Debt" means any unsecured System Debt issued or incurred by the
Borrower, the payment of which is subordinate to the payment in fuJI of the Borrower's payment
-16-
Obligations under this Agreement in form and substance satisfactory to the Lender.
"Swap Agreement" means any agreement with respect to any swap, forward, spot, future,
credit default or derivative transaction or any option or similar agreement involving, or settled by
reference to, one or more rates, currencies, commodities, equity or debt instruments or securities,
or economic, financial or pricing indices or measures of economic, financial or pricing risk or
value or any similar transaction or any combination of these transactions; provided that no
phantom stock or similar plan providing for payments only on account of services provided by
current or former directors, officers, employees or consultants of the Borrower or the Subsidiaries
shall be a Swap Agreement.
"Swap Termination Value" means, in respect of any one or more Swap Agreements, after
taking into account the effect of any legally enforceable netting agreement relating to such Swap
Agreements, (a) for any date on or after the date such Swap Agreements have been closed out and
termination value(s) determined in accordance therewith, such termination value(s), and (b) for
any date prior to the date referenced in clause (a), the amount(s) determined as the mark-to-market
value(s) for such Swap Agreements, as determined based upon one or more mid-market or other
readily available quotations provided by any recognized dealer in such Swap Agreements (which
may include the Lender or any Affiliate of the Lender).
"System" means (i) all facilities, works, properties, structures and contractual rights to
distribution, metering and billing services, electric power, scheduling and coordination,
transmission capacity, and fuel supply of Bon-ower for the generation, transmission and
distribution of electric power, (ii) all general plant facilities, works, properties and structures of
Borrower, and (iii) all other facilities, properties and structures of Bon-ower, wherever located,
reasonably required to carry out any lawful purpose of Borrower. The term shall include all such
contractual rights, facilities, works, properties and structures now owned or hereafter acquired by
Borrower.
"System Debt" means Debt of the Borrower.
"Taxes" means all present or future taxes, levies, imposts, duties, deductions,
withholdings (including backup withholding), value added taxes, or any other goods and services,
use or sales taxes, assessments, fees or other charges imposed by any Governmental Authority,
including any interest, additions to tax or penalties applicable thereto.
"Term SOFR Rate" means,.,..with respect to any SOFR Borrowing. such reference rate as is
ublished b the CME Term SOFR Adminjstrator at a roximatel 5:0(la.m. Chica0 o time two
Business Da _s_ i r to th commencement of sJLch tenor com ara le t the a licable Interest
Period: such rate being the rate per annum determined by the Lender as the forward-looking term
rate based on SOFR~provided tbat if the Term SOFR Rate..-a.s_s_o__tlrtermined would be less thanJb.e.
Floor, such rate shall be deemed to be the floor for the purposes of this Agreement.
"2020 Audited Financial Statements" means the statement of net position of the System at
June 30, 2020, the statement of revenues, expenses and changes in net position of the System for
the year ended June 30, 2020, and the statement of cash flows of the System for the fiscal year
-17-
ended June 30, 2020, together with unqualified audit opinion of Lance, Soll & Lunghard, LLP.
"Type", when used in reference to any Loan or Bonowing, refers to whether the rate of
interest on such Loan, or on the Loans comprising such Borrowing, is determined by reference to
the Adjusted bmGTerm OF Rate or the Base Rate.
"Undrawn Fee" has the meaning set forth in the Fee Agreement.
"Working Capital Loan" means any Loan other than a Cash Collateral Loan or a
Reimbursement Loan.
"WSPP Agreement" means the WSPP Agreement created by WSPP Inc. and filed with the
Federal Energy Regulatory Commission, as revised by the WSPP Inc. from time to time.
Section 1.2. Terms Generally. The definitions of terms herein shall apply equally to the
singular and plural forms of the terms defined. Whenever the context may require, any pronoun
shall include the corresponding masculine, feminine and neuter forms. The words "include",
"includes" and "including" shall be deemed to be followed by the phrase "without limitation".
The word "will" shall be construed to have the sam e meaning and effect as the word "shall".
Unless the context requires otherwise (a) any definition of or reference to any agreement,
instrument or other document herein shall be construed as refening to such agreement, instrument
or other document as from time to time amended, supplemented or otherwise modified (subject to
any restrictions on such amendments, supplements or modifications set forth herein), (b) any
reference herein to any Person shall be construed to include such Person's successors and assigns,
(c) the words "herein", "hereof and "hereunder", and words of similar import, shall be construed
to refer to this Agreement in its entirety and not to any particular provision hereof, (d) all
references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to
Articles and Sections of, and Exhibits and Schedules to, this Agreement and (e) the words "asset"
and "property" shall be construed to have the same meaning and effect and to refer to any and all
tangible and intangible assets and properties, including cash, securities, accounts and contract
rights.
Section 1.3. Accounting Terms; GAAP. Except as otherwise expressly provided herein,
all terms of an accounting or financial nature shall be construed in accordance with GAAP, as in
effect from time to time; provided that, if the Borrower notifies the Lender that the Borrower
requests an amendment to any provision hereof to eliminate the effect of any change occurring
after the date hereof in GAAP or in the application thereof on the operation of such provision ( or if
the Lender requests an amendment to any provision hereof for such purpose), regardless of
whether any such notice is given before or after such change in GAAP or in the application thereof,
then such provision shall be interpreted on the basis of GAAP as in effect and applied immediately
before such change shall have become effective until such notice shall have been withdrawn or
-18-
such provision amended in accordance herewith.
Section 1.4. Interest Rates; LlBORBenchmark Notification. The interest rate on
Eurodollar Loans is determined by reference to the LIBO Rate, which is derii.,ed from the London
interbank offered rate ( "L 1BOR "). LIBOR is intended to represent the rate at which contributing
banks may obtain sl~ort term bon-o,vings from each other in the London interbank market. In July
2017, the U.K. Financial Conduct Authority annoW1ced that, after the end of 2021, it would no
longer persuade or compel contributing banks to make rate submissions to the ICB Benchmark
Administration (together with any successor to the ICE Beechmark Admiaistrator, the "IBA ") for
purposes of the IBA setting LIBOR. As a result, it is possible that commencing in 2022, LIBOR
may no longer be available or may no longer be deemed an appropriate reference rate upon which
to determine thea a1 ma be de_riv~ frQ!l1 an interest rate on Ew·odollar Loans. In light of this
eventuality, public and private sector industry initiatives are cmTently underway to ide0tify new or
alternative reference rates to be used in place of LlBORb..e.n. mark that ma e diS.C.O t' ed o · i
or ma in th_e ture e..come the sub· ec of e ulato i:_efo1 . -In.!,,!rum. the eventoccurrcnce,_oJ a
Benchmark Transition Event occurs, Section 2.1 l (c) of this Agreemeet provides a mechanism for
determining an alternative rate of interest._ The Lender ·.vill Ratify the Borrov,er, pU:Fsuant to
Section 2.11 (c), iA advance of any change to the reference rate upon which the interest rate of
Eurodollar Loans is based. However, the Lender does not warrant or accept any responsibility for,
and shall not have any liability with respect to, the administration, submission _erfunnance or any
other matter related to LIBOR or other rates in the definitioA of "LIBO Rate"an ·1 t e t te u ed
·n thi re~ment or with respect to any alternative,.ru; successor rate thereto, or replacement rate
thereof, including without limitation, whether the composition or characteristics of any such
alternative, successor or replacement reference rate will be similar to, or produce the same value or
economic equivalence of~ the LIBO Rat~i ti interest ·a I ce_d or have the same
volume or liquidity as did LIBORan e 1stm discontinuance or
unavailability. e ender a ·ts_affiliat
transact· n th t affi ct the calculation of an in_ter t
ad·u t111.ents.J;he_r.eJQ in e.ach...Q!.s..e in_a______ e_cJ
in i · · · le discretion to ascert · · te used in this
A r erenced.Jn_____t_h..e_d in_e.ach.....ca__s_e
· · · · any other
ARTICLE 2
THE CREDITS
Section 2.1. Commitments. Subject to the terms and conditions set forth herein, the
Lender agrees to make Loans to the Borrower from time to time during the Availability Period in
an aggregate principal amount that will not result (after giving effect to any application of proceeds
-19-
of such Borrowing pursuant to Section 2.7) in the Revolving Credit Exposure exceeding the
Commitment. Within the foregoing limits and subject to the terms and conditions set forth herein,
the Borrower may borrow, prepay and reborrow Loans.
Section 2.2. Loans and Borrowings. (a) Subject to Section 2.4(d), Section 2.5(d) and
Section 2.11, at the time of each Borrowing, the Borrower may elect to incur a Loan as a Base Rate
Loan or a EurodoUarSOFR Loan.
(b) At the commencement of each Interest Period for any Eurodollars.DER Borrowing,
such Borrowing shall be in an aggregate amount that is an integral multiple of $100,000. At the
time that each Base Rate Borrowing is made, such Borrowing shall be in an aggregate amount that
is an integral multiple of $25,000 and not less than $100,000; provided that a Base Rate Borrowing
may be in an aggregate amount that is equal to the entire unused balance of the Commitment or
that is required to finance the reimbursement of an LC Disbursement as contemplated by Section
2.4(d).
(c) Notwithstanding any other provision of this Agreement, the Borrower shall not be
entitled to request, or to elect to convert or continue, any Borrowing if the Interest Period requested
with respect thereto would end after the Maturity Date.
Section 2. 3. Requests for Revolving Borrowings. To request a Borrowing, the Borrower
shall notify the Lender of such request by telephone (a) in the case of a Eurodollar£QER
Borrowing, not later than 10:00 a.m., New York City time, three (3) Business Days before the date
of the proposed Borrowing or (b) in the case of a Base Rate Borrowing, not later than 10:00 a.m.,
New York City time, one Business Day before the date of the proposed Borrowing. Each such
telephonic Borrowing Request shall be irrevocable and shall be confirmed promptly by electronic
means to the Lender of a written Borrowing Request in a form attached hereto as Exhibit C and
signed by the Borrower. Each such telephonic and written Borrowing Request shall specify the
information set forth in Exhibit C hereto.
If no election as to the Type of Borrowing is specified, then the requested Borrowing shall
be a Base Rate Borrowing. If no Interest Period is specified with respect to any requested
EurodollarSQER Borrowing, then the Borrower shall be deemed to have selected an Interest
Period of one month's duration. Subject to satisfaction of the terms and conditions of Section 3 .2,
the Lender shall make available to, or for the account of, the Borrower the amount of each
Borrowing no later than 2:00 p.m., New York City time, on date of the applicable Borrowing.
Section 2. 4. Letters of Credit.
(a) General. Subject to the terms and conditions set forth herein, the Borrower may
request the issuance of Letters of Credit as the applicant thereof for the support of its PP A payment
obligations, in the form of a Letter of Credit Request set forth in Exhibit D-1 hereto at any time and
from time to time during the Avai lability Period; provided, however, that prior to the issuance of
the initial Letter of Credit hereunder, the Borrower and the Lender shall execute a Continui ng
Agreement for Commercial and Standby Letters Of Credit in the form of Exhibit D-3 hereto. In
the event of any inconsistency between the te1ms and conditions of this Agreement and the te1ms
-20-
and conditions of any form of letter of credit application or other agreement submitted by the
Borrower to, or entered into by the Borrower with, the Lender relating to any Letter of Credit, the
terms and conditions of this Agreement shall control.
(b) Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions. To request
the issuance of a Letter of Credit ( or the amendment, renewal or extension of an outstanding Letter
of Credit), the Borrower shall hand deliver or fax ( or transmit through an Electronic System, if
arrangements for doing so have been approved by the Lender) to the Lender (reasonably in
advance of the requested date of issuance, amendment, renewal or extension, but in any event no
less than five (5) Business Days) a notice requesting the issuance of a Letter of Credit, or
identifying the Letter of Credit to be amended, renewed or extended, and specifying the date of
issuance, amendment, renewal or extension (which shall be a Business Day), the date on which
such Letter of Credit is to expire (which shall comply with paragraph (c) of this Section), the
amount of such Letter of Credit, the name and address of the beneficiary thereof and such other
information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. If
requested by the Lender, the Borrower also shall submit a letter of credit application on the
Lender's standard form in connection with any request for a Letter of Credit. A Letter of Credit
shall be issued, amended, renewed or extended only if (and upon issuance, amendment, renewal or
extension of each Letter of Credit the Borrower shall be deemed to represent and warrant that),
after giving effect to such issuance, amendment, renewal or extension (i) the Revolving Credit
Exposure shall not exceed the Commitment and (ii) the LC Exposure shall not exceed the Letter of
Credit Sublimit.
The Lender shall not be under any obligation to issue any Letter of Credit if:
(i) any order, judgment or decree of any Governmental Authority or arbitrator
shall by its terms purport to enjoin or restrain the Lender from issuing such Letter of Credit,
or any Requirement of Law relating to the Lender or any request or directive (whether or
not having the force of law) from any Governmental Authority with jurisdiction over the
Lender shall prohibit, or request that the Lender refrain from, the issuance of letters of
credit generally or such Letter of Credit in particular or shall impose upon the Lender with
respect to such Letter of Credit any restriction, reserve or capital requirement (for which
the Lender is not otherwise compensated hereunder) not in effect on the ~g
Date, or shall impose upon the Lender any unreimbursed loss, cost or expense which was
not applicable on the EffeetiveClosing Date and which the Lender in good faith deems
material to it, or
(ii) the issuance of such Letter of Credit would violate one or more policies of
the Lender applicable to letters of credit generally.
(c) Expiration Date. Unless otherwise expressly agreed to by the Lender, each Letter of
Credit shall expire ( or be subject to termination by notice from the Lender to the beneficiary
thereof) at or prior to the close of business on the date that is five (5) Business Days prior to the
Maturity Date.
( d) Reimbursement. If the Lender shall make any LC Disbursement in respect of a Letter
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of Credit, the Borrower shall reimburse such LC Disbursement by paying to the Lender an amount
equal to such LC Disbursement not later than 1 l :00 a.m., New York City time, on the date that
such LC Disbursement is made, if the Borrower shall have received notice of such LC
Disbursement prior to 9:00 a.m., New York City time, on such date, or, if such notice has not been
received by the Borrower prior to such time on such date, then not later than 11 :00 a.m., New York
City time, on the Business Day immediately following the day that the Borrower receives such
notice, if such notice is not received prior to such time on the day of receipt; provided that, if such
LC Disbursement is not less than $100,000, and no Default or Event of Default shall have
occurred, the Borrower may, subject to the conditions to borrowing set forth herein, request in
accordance with Section 2.3 that such payment be financed with a Base Rate Revolving Borrowing
in an equivalent amount and, to the extent so financed, the Borrower's obli gation to make such
payment shall be discharged and replaced by the resulting Base Rate Borrowing (such Base Rate
Borrowing, a "Reimbursement Loan").
(e) Obligations Absolute. The Borrower's obligation to reimburse LC Disbursements as
provided in paragraph (d) of this Section shall be absolute, unconditional and irrevocable, and
shall be performed strictly in accordance with the terms of this Agreement under any and all
circumstances whatsoever and irrespective of (i) any lack of validity or enforceability of any Letter
of Credit or this Agreement, or any term or provision therein, (ii) any draft _or other document
presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any
statement therein being untrue or inaccurate in any respect, (iii) payment by the Lender under a
Letter of Credit against presentation of a draft or other document that does not comply with the
terms of such Letter of Credit, or (iv) any other event or circumstance whatsoever, whether or not
similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal
or equitable discharge of, or provide a right of setoff against, the Borrower's obligations
hereunder. Neither the Lender nor any of its Related Parties, shall have any liability or
responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit,
any payment or failure to make any payment thereunder (irrespective of any of the circumstances
refened to in the preceding sentence), or any error, omission, interruption, loss or delay in
transmission or delivery of any draft, notice or other communication under or relating to any Letter
of Credit (including any document required to make a drawing thereunder), any error in
interpretation of technical terms, any error in translation or any consequence arising from causes
beyond the control of the Lender; provided that the foregoing shall not be construed to excuse the
Lender from liability to the Borrower to the extent of any direct damages (as opposed to special,
indirect, consequential or punitive damages, claims in respect of which are hereby waived by the
Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by
the Lender's failure to exercise care when determining whether drafts and other documents
presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly
agree that, in the absence of gross negligence or willful misconduct on the part of the Lender (as
finally detennined by a court of competent jurisdiction), the Lender shall be deemed to have
exercised care in each such determination. In furtherance of the foregoing and without limiting the
generality thereof, the parties agree that, with respect to documents presented which appear on
their face to be in substantial compliance with the terms of a Letter of Credit, the Lender may, in its
sole discretion, either accept and make payment upon such documents without responsibility for
further investigation, regardless of any notice or information to the contrary, or refuse to accept
and make payment upon such documents if such documents are not in strict compliance with the
-22-
tenns of such Letter of Credit
(t) Disbursement Procedures. The Lender shall, promptly following its receipt thereof,
examine all documents purporting to represent a demand for payment under a Letter of Credit.
The Lender shall promptly after such examination notify the Borrower by telephone ( confirmed by
fax or through an Electronic System) of such demand for payment if the Lender has made or will
make an LC Disbursement thereunder; provided that any failure to give or delay in giving such
notice shall not relieve the Borrower of its obligation to reimburse the Lender with respect to any
such LC Disbursement.
(g) Interim Interest. If the Lender shall make any LC Disbursement, then, unless the
Borrower shall reimburse such LC Disbursement in full on the date such LC Disbursement is
made, the unpaid amount thereof shall bear interest, for each day from and including the date such
LC Disbursement is made to but excluding the date that the reimbursement is due and payable at
the rate per annum set forth in Section 2.10( d) for Base Rate Loans and such interest shall be due
and payable on the date when such reimbursement is payable.
(h) Cash Co/lateralization. If any Event of Default shall occur and be continuing, on the
Business Day that the Borrower receives notice from the Lender demanding the deposit of cash
collateral pursuant to this paragraph, the Borrower shall deposit in an account with the Lender, in
the name and for the benefit of the Lender (the "f.:C Collateral Account"), an amount in cash equal
to 105% of the amount of the LC Exposure as of such date plus accrned and unpaid interest
thereon; provided that the obligation to deposit such cash collateral shall become effective
immediately, and such deposit shall become immediately due and payable, without demand or
other notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower
described in Section 6.0l(e) or Section 6.0l(f) hereof. The Lender shall have exclusive dominion
and control, including the exclusive right of withdrawal, over the LC Collateral Account and the
Borrower hereby grants the Lender a security interest in the LC Collateral Account and all moneys
or other assets on deposit therein or credited thereto. Other than any interest earned on the
investment of such deposits, which investments shall be made at the option and sole discretion of
the Lender and at the Borrower's risk and expense, such deposits shall not bear interest. Interest or
profits, if any, on such investments shall accumulate in such account. Moneys in such account
shall be applied by the Lender for LC Disbursements for which it has not been reimbursed,
together with related fees, costs, and customary processing charges, and, to the extent not so
applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the
LC Exposure at such time or, if the maturity of the Loans has been accelerated, be applied to
satisfy other Obligations. If the Borrower is required to provide an amount of cash collateral
hereunder as a result of the occunence of an Event of Default, such amount (to the extent not
applied as aforesaid) shall be returned to the Borrower within three (3) Business Days after all such
Events of Default have been cured or waived as confirmed in writing by the Lender.
Section 2.5. Interest Elections. (a) Each Borrowing initially shaJI be of the Type specified
in the applicable Borrowing Request and, in the case of a Bw:odollarS Borrowing, shall have
an initial Interest Period as specified in such Borrowing Request. Thereafter, the Borrower may
elect to convert such Borrowing ( other than a Base Rate Borrowing of a Reimbursement Loan) to
a different Type or to continue such Borrowing and, in the case of a EurodollarSOFR Borrowing,
-23 -
may elect Interest Periods therefor, all as provided in this Section. The Borrower may elect
different options with respect to different portions of the affected Borrowing (other than a Base
Rate Borrowing of a Reimbursement Loan) and the Loan comprising each such portion shall be
considered a separate Borrowing.
(b) To make an election pursuant to this Section, the Borrower shall notify the Lender of
such election by telephone by the time that a Borrowing Request would be required under Section
2.3 if the Borrower were requesting a Borrowing of the Type resulting from such election to be
made on the effective date of such election. Each such telephonic Interest Election Request shall
be irrevocable and shall be confirrned promptly by electronic copy to the Lender of a written
Interest Election Request in a form approved by the Lender and signed by the Borrower.
(c) Each telephonic and written Interest Election Request shall specify the following
information in compliance with Section 2.2:
(i) the Borrowing to which such Interest Election Request applies and, if
different options are being elected with respect to different portions thereof, the portions
thereof to be allocated to each resulting Borrowing (in which case the information to be
specified pursuant to clauses (iii) and (iv) below shall be specified for each resulting
Borrowing);
(ii) the effective date of the election made pursuant to such Interest Election
Request, which shall be a Business Day;
(iii) whether the resulting Borrowing is to be a Base Rate Borrowing or a
Eurodollar,S.QER Borrowing; and
(iv) if the resulting Borrowing is a EurodollarSOFR Borrowing, the Interest
Period to be applicable thereto after giving effect to such election, which shall be a period
contemplated by the definition of the term "Interest Period".
Tf any such Interest Election Request requests a EurodollarSOFR Borrowing but does not
specify an Interest Period, then the Borrower shall be deemed to have selected an Interest Period of
one month's duration.
(d) If the Borrower fails to deliver a timely Interest Election Request with respect to a
EurodollarSOFR Borrowing prior to the end of the Interest Period applicable thereto, then, unless
such Borrowing is repaid as provided herein, at the end of such Interest Period such Borrowing
shall be converted to a Base Rate Borrowing. Notwithstanding any contrary provision hereof, if an
Event of Default has occurred and is continuing and the Lender so notifies the Borrower, then, so
long as an Event of Default is continuing (i) no outstanding Borrowing may be conve1ted to or
continued as a EurodollarSQER Borrowing and (ii) unless repaid, each EurodollarSQER
Borrowing shall be converted to a Base Rate Borrowing at the end of the Interest Period applicable
thereto; provided, however, that the actions specified in clauses (i) and (ii) immediately above
shall apply automatically without notice from the Lender if the Event of Default that has occurred
and is continuing is an Event of Default described in Section 6.1 ( e) or Section 6.1 (t).
-24-
Section 2.6. Termination and Reduction of Commitment. (a) Unless previously
terminated, the Commitment shall terminate automatically on the Maturity Date.
(b) Subject to the provisions of the Fee Agreement, the Borrower may at any time
terminate, or from time to time reduce, the Commitment; provided that (i) each reduction of the
Commitment shall be in an amount that is an integral multiple of $100,000 and not less than
$500,000 and (ii) the B01rower shall not terminate or reduce the Commitment if, after giving effect
to any concurrent prepayment of the Loans in accordance with Section 2.8, the Revolving Credit
Exposure would exceed the Commitment.
(c) The Borrower shall notify the Lender of any election to terminate or reduce the
Commitments under paragraph (b) of this Section at least three (3) Business Days prior to the
effective date of such termination or reduction, specifying such election and the effective date
thereof. Each notice delivered by the Borrower pursuant to this Section shall be irrevocable;
provided that a notice of termination of the Commitment delivered by the Borrower may state that
such notice is conditioned upon the effectiveness of other credit facilities, in which case such
notice may be revoked by the Borrower (by notice to the Lender on or prior to the specified
effective date) if such condition is not satisfied. Any termination or reduction of the Commitment
shall be permanent.
Section 2. 7. Repayment of Loans; Evidence of Debt. (a) The Borrower hereby
unconditionally promises to pay to the Lender the then unpaid principal amount of each Loan on
the Maturity Date.
(b) The Lender shall maintain in accordance with its usual practice an account or
accounts evidencing the indebtedness of the Borrower to the Lender resulting from each Loan
made by the Lender, the Type of each Loan and the Interest Period, if any, applicable thereto and
the amounts of principal and interest payable and paid to the Lender from time to time hereunder.
The entries made in such account or accounts shall be prima facie evidence of the existence and
amounts of the obligations recorded therein; provided that the failure of the Lender to maintain
such account or accounts or any error therein shall not in any manner affect the obligation of the
Borrower to repay the Loans in accordance with the terms of this Agreement.
(c) The Lender may request that Loans made by it be evidenced by a promissory note. In
such event, the Borrower shall prepare, execute and deliver to the Lender a promissory note
payable to the Lender and in a fonn approved by the Lender. Thereafter, the Loans evidenced by
such promissory note and interest thereon shall at all times (including after assignment pursuant to
Section 7.3) be represented by one or more promissory notes in such form.
Section 2.8. Prepayment of Loans. (a) The Borrower shall have the right at any time and
from time to time to prepay any Borrowing in whole or in part, subject to prior notice in
accordance with paragraph (b) of this Section and in accordance with any amounts due and owing
pursuant to Section 2.13 of this Agreement.
(b) The Borrower shall notify the Lender by telephone (confirmed by fax) or through
Electronic System, if atTangements for doing so have been approved by the Lender, of any
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prepayment hereunder (i) in the case of prepayment of a EurodollarSOFR Borrowing, not later
than 10:00 a.m., New York City time, three Business Days before the date of prepayment, or (ii) in
the case of prepayment of a Base Rate Borrowing, not later than 10:00 a.m., New York City time,
one Business Day before the date of prepayment. Each such notice shall be irrevocable and shall
specify the prepayment date and the principal amount of each Borrowing or portion thereof to be
prepaid; provided that, if a notice of prepayment is given in connection with a conditional notice of
termination of the Commitments as contemplated by Section 2.6, then such notice of prepayment
may be revoked if such notice of termination is revoked in accordance with Section 2.6. Each
partial prepayment of any Borrowing shall be in an amount that would be permitted in the case of
an advance of a Borrowing of the same Type as provided in Section 2.2. Prepayments shall be
accompanied by accrued interest to the extent required by Section 2.10.
Section 2.9. Fees. The Borrower agrees to pay to the Lender the fees and other amounts
set forth in the Fee Agreement at the time and in the manner set forth in the Fee Agreement,
including, but not limited to, the Undrawn Fee and the Letter of Credit Fees. The Fee Agreement
is, by this reference, incorporated herein in its entirety as if set forth herein in full. All fees and
other amounts payable under the Fee Agreement shall be paid in immediately available funds.
Fees paid shall not be refundable under any circumstances.
Section 2.10. Interest. (a) The Loans comprising each Base Rate Borrowing (other than
Reimbursement Loans) shall bear interest at the Base Rate plus the Applicable Margin.
(b) The Loans comprising each EurodollarSOFR Borrowing shall bear interest at the
Adjusted l:JBGTenn SOFR Rate for the Interest Period in effect for such Borrowing plus the
Applicable Margin.
(c) The Reimbursement Loans shall bear interest at the Base Rate plus the Applicable
Margin.
(d) Upon the occurrence and continuance of an Event of Default hereunder, the Default
Rate shall apply to all Loans and Letters of Credit. Interest and fees for Letters of Credit accruing
at the Default Rate shall be payable on demand of the Lender. Notwithstanding the foregoing, if
any principal of or interest on any Loan or any fee or other amount payable by the Borrower
hereunder or under the Fee Agreement is not paid when due, whether at stated maturity, upon
acceleration or otherwise, such overdue amount shall bear interest, after as well as before
judgment, at a rate per annum equal to (i) in the case of overdue principal of any Loan, 3% plus the
rate otherwise applicable to such Loan as provided in the preceding paragraphs of this Section, (ii)
in the case of the undrawn amount of all outstanding Letters of Credit at such time, 3% plus the LC
Facility Fee (as defined in the Fee Agreement) and (iii) in the case of any other amount, 3% plus
the rate applicable to Base Rate Loans as provided in paragraph (a) of this Section.
(e) Accrued interest on each Loan shall be payable in arrears on each Interest Payment
Date for such Loan and upon termination of the Commitment; provided that (i) interest accrued
pursuant to paragraph (d) of this Section shall be payable on demand, (ii) in the event of any
repayment or prepayment of any Loan ( other than a prepayment of a Base Rate Loan prior to the
end of the Availability Period), accrued interest on the principal amount repaid or prepaid shall be
-26-
payable on the date of such repayment or prepayment and (iii) in the event of any conversion of
any EurodollarSQER Loan prior to the end of the current Interest Period therefor, accrued interest
on such Loan shall be payable on the effective date of such conversion.
(f) All interest hereunder shall be computed on the basis of a year of 360 days and the
actual number of days elapsed, except that interest computed by reference to the Base Rate at times
when the Base Rate is based on the Prime Rate shall be computed on the basis of a year of 365 days
and in each case shall be payable for the actual number of days elapsed (including the first day but
excluding the last day). The applicable Base Rate, Adjusted HBGTunn SOFR Rate or LIBO~
Tenn SOFR Rate shall be determined by the Lender, and such determination shall be conclusive
absent manifest error.
(g) Anything herein to the contrary notwithstanding, the amount of interest payable
hereunder for any interest period shall not exceed the Maximum Rate. Iffor any interest period the
applicable interest rate would exceed the Maximum Rate, then (i) such interest rate will not exceed
but will be capped at such Maximum Rate and (ii) in any interest period thereafter that the
applicable interest rate is less than the Maximum Rate, any Obligation hereunder will bear interest
at the Maximum Rate until the earlier of (x) payment to the Lender of an amount equal to the
amount which would have accrued but for the limitation set forth in this Section and (y) the
Maturity Date. Upon the Maturity Date or, if no Revolving Credit Exposure is outstanding, on the
date the Commitment is permanently terminated, in consideration for the limitation of the rate of
interest otherwise payable hereunder, to the extent permitted by Applicable Law, the Borrower
shall pay to the Lender a fee in an amount equal to the amount which would have accrued but for
the limitation set forth in this Section 2.1 0(g) that has not previously been paid to the Lender in
accordance with the immediately preceding sentence.
Section 2.11. Alternate Rate of Interest; Illegality. (a) Subject to clause (c) of this
Section 2.11 , if prior to the commencement of any Interest Period for a Eurodollru:SQER
Borrowing:
(i) the Lender determines (which determination shall be conclusive and binding
absent manifest error) that adequate and reasonable means do not exist for ascertaining the
Adjusted l:JBGTerm SOFR Rate or the HBGTe1m SOFR Rate, as applicable (including,
without limitation, by means of an Interpolated Ra-te or because the LIBO Screen Rate is
not available or published on a current basis). for such Interest Period; or
(ii) the Lender determines the Adjusted l:JBGTerm SQER Rate or the
HBGTenn. SOFR Rate, as applicable, for such Interest Period will not adequately and
fairly reflect the cost to the Lender of making or maintaining its Loans ( or Loan) included
in such Borrowing for such Interest Period;
then the Lender shall give notice thereof to the Borrower by telephone, fax or through an
Electronic System as provided in Section 7.2 as promptly as practicable thereafter and, until_w the
Lender notifies the Borrower that the circumstances giving rise to such notice no longer exist and
{y) the Borrower delivers a new Interest Election Request in accordance with the terms of Section
2.5 or a new Borrowin R ue t in c r ance with the terms of Secti n 2 3, (A) any Interest
-27-
Election Request that requests the conversion of any Borrowing to, or continuation of any
Borrowing as, a EurodollarSQER Borrowing shall be ineffective and any such Ew=odollarSOFR
Borrowing shall be repaid or converted into a Base Rate Borrowing on the last day of the then
current Interest Period applicable thereto, and (B) if any Borrowing Request requests a
Eurodollar FR Borrowing, such Borrowing shall be made as a Base Rate Borrowing.
(b) If the Lender determines that any Requirement of Law has made it unlawful, or if
any Governmental Authority has asserted that it is unlawful, for the Lender or its applicable
lending office to make, maintain, fund or continue any Ellfodol:l.arfillf.B. Borrowing, or any
Governmental Authority has imposed material restrictions on the authority of the Lender to
purchase or sell, or to take deposits of, dollars in the London interbank offering market, then, on
notice thereof by the Lender to the Borrower, any obligations of the Lender to make, maintain,
fund or continue Bw=odollars,QFB. Loans or to convert Base Rate Borrowings to EuredollarS FR
Borrowings will be suspended until the Lender notifies the Borrower that the circwnstances giving
rise to such determination no longer exist. Upon receipt of such notice, the Borrower will upon
demand from the Lender, either prepay or convert all EurodollarSQER Borrowings of the Lender
to Base Rate Bo1TOwings, either on the last day of the Interest Period therefor, if the Lender may
lawfully continue to maintain such Eurodollar~ Borrowings to such day, or immediately, if
the Lender may not lawfully continue to maintain such Loans. Upon any such prepayment or
conversion, the Borrower will also pay accrued interest on the amount so prepaid or converted.
·thstandin
2. lli.c.)).jf a Benchmark Transition Event occurs, then thehas occuned. Lender may, by notice to
Borrower, sel-eetamend th rate of interest for the
R.ateBe1 chmark that ive
echani
-lving or prevailing market convention for determining a
· loans in US Dollarsas a re cnt fo the the enchmark
at such-time (the "Alternate Rate"); Borrower acknowledges that the Alternate Rate may include
a mathematical adjustment using any then-evolving or prevailing market convention or method for
determining a spread adjustment for the replacement of the UBO Rate. For avoidance of doubt, all
references to the LIBO Rate shall be deemed to be references to the Alternate Rate when the
Alternate Rate becomes effective in accordance v,ith this section. In addition, the Lender will have
the right, from time to time a de · a _eru.;J1ma · d_ L_COll.truJlS
such a s read addin that read to the Alternate Rate . The ender may further amend this
A reem@t by uch notice to Borrower to make technical, administrative or operational changes
(including, without limitation, changes to the definition of "Base Rate", the definition of"Jnterest
Period", timing and frequency of determining rates and making payments of interest thilimi of
pr.epay_;~t or conversion....no_ti_c_es. thLI.@gtb.~of lookback,J1e.ri,_qds_,___tne_applicabili,ty of breakage
provisions and other technical.__administrative ra.ti.o_na.Lmatters) that-the Lender decides in its
reasonable discretion may be appropriate to reflect the adoption and implementation of the
Alternate Rate. The Alternate Rate, together with all such technical, administrative and operational
changes as specified in any notice, shall become effective at the later of (i) the fifth Business Day
after ~Lender bas provided notice includin without limitation for this ose b electronic
me_a~n to the Borrower (the "Ne#eeObiec)ioa Date") and (ii) a date specified by-the Lender in the
-28-
notice, without any further action or consent of the Borrower, so long as Lender has not received,
by 5:00 ~IID1 Eastern time on the Neti-eeQhie.cti.on Date, written notice of objection to the
Alternate Rate from the Borrower. A.fly determiAatioA, decisiofl, or election that may be made by
the Lenderlf on the_dat the Ben hmark actuall ome ennanent tlilll ail.able pursuant to
this sectiofl, including any determi:natioR v,ith respect to a rate or adjustment or the occurrence or
non occurrence of an e'✓ent, circumstaAce or date, and any decision to take or refrain from taking
any action, •Nill.a...Be.ru ™ _ ansition ..... E.Y! t an_A te..mate_Rate_ba llQ.! een~blish.ed in this
mann dyan_c..e ii ntil an Alternate Rate is so estab.lis.hro aLinterm..auhu3_Jl e atLill
no event shall the Alternate Rate bel.e£sJlllln....th.e Floor.
ete ·mi ati L ~n.d..er this S_ection 2. a be conclusive and
binding absent manifest error and may be made in its sole discretion and without consent from the
Borrower. Until an Alternate Rate shall be determiAed in accordance with this section, the interest
rate shall be equal to the sum of (a) the greater of (x) Prime Rate and (y) 2.50%, plus (b) the
Applicable Margin. In no e'✓ent shall the Alternate Rate be less thafl 0.00%.a.. other art t this
Ag™n.t or any other Loan Document. ex~pt. in eaclL~'=as_e.xpre..s.,sJy..Eill!ir._ed p_ullilfillt t.o
this Section 2. U .
Section 2.12. In creased Costs. (a) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special deposit, liquidity or
similar requirement (including any compulsory loan requirement, insurance charge or
other assessment) against assets of, deposits with or for the account of, or credit extended
by, the Lender ( except any such reserve requirement reflected in the Adjusted blOO e
£.Q.E Rate); or
(ii) impose on the Lender or the London interbank market any other condition,
cost or expense (other than Taxes) affecting this Agreement or Loans made by the Lender
or any Letter of Credit; or
(iii) subj ect the Lender to any Taxes (other than (A) Indemnified Taxes, (B)
Taxes described in clauses (b) through (d) of the definition of Excluded Taxes and (C)
Connection Income Taxes) on its loans, loan principal, letters of credit, commitments, or
other obligations, or its deposits, reserves, other liabilities or capital attributable thereto;
and the result of any of the foregoing shall be to increase the cost to the Lender of making,
continuing, converting into or maintaining any Loan (or of maintaining its obligation to make any
such Loan) or to increase the cost to the Lender of issuing or maintaining any Letter of Credit or to
reduce the amount of any sum received or receivable by the Lender hereunder (whether of
principal, interest or otherwise), then the Borrower will pay to the Lender such additional amount
or amounts as will compensate the Lender for such additional costs incurred or reduction suffered.
(b) If the Lender determines that any Change in Law regarding capital or liquidity
requirements has or would have the effect ofreducing the rate of return on the Lender's capital or
on the capital of the Lender's holding company, as a consequence of this Agreement, the
Commitment of or the Loans made by, or the Letters of Credit issued by, the Lender, to a level
-29-
below that which the Lender or the Lender's holding company could have achieved but for such
Change in Law (taking into consideration the Lender's policies and the policies of the Lender's
holding company with respect to capital adequacy and liquidity), then from time to time the
Borrower will pay to the Lender such additional amount or amounts as will compensate the Lender
or the Lender's holding company for any such reduction suffered.
( c) A certificate of the Lender setting forth the amount or amounts necessary to
compensate the Lender or its holding company, as the case may be, as specified in paragraph (a) or
(b) of this Section shall be delivered to the Borrower and shall be conclusive absent manifest error.
The Borrower shall pay the Lender the amount shown as due on any such certificate within ten
( I 0) days after receipt thereof.
(d) Failure or delay on the part of the Lender to demand compensation pursuant to this
Section shall not constitute a waiver of the Lender's right to demand such compensation; provided
that the Borrower shall not be required to compensate the Lender pursuant to this Section for any
increased costs or reductions incurred more than 270 days prior to the date that the Lender notifies
the Borrower of the Change in Law giving rise to such increased costs or reductions and of the
Lender's intention to claim compensation therefor; provided further that, if the Change in Law
giving rise to such increased costs or reductions is retroactive, then the 270-day period referred to
above shall be extended to include the period of retroactive effect thereof.
Section 2.13. Break Funding Payments. In the event of (a) the payment of any principal of
any EurodollMSQER Loan other than on the last day of an Interest Period applicable thereto
(including as a result of an Event of Default or as a result of any prepayment pursuant to Section
2.8 hereof), (b) the conversion of any EurodollarSOFR Loan other than on the last day of the
Interest Period applicable thereto_. or ( c) the failure to borrow, convert, continue or prepay any
EurodollarSOER Loan on the date specified in any notice delivered pursuant hereto (regardless of
whether such notice may be revoked under Section 2.8(b) and is revoked in accordance therewith),
then, in any such event, the 801Tower shall compensate the Lender for the loss, cost and expense
attributable to such event. In the case of a EurodollarSOFR Loan, such loss, cost or expense to the
Lender shall be deemed to include an amount determined by the Lender to be the excess, if any, of
(i) the amount of interest which would have accrued on the principal amount of such SOFR Loan
had such event not occurred, at the Adjusted blOOTerm SOFR Rate that would have been
applicable to such SOFR Loan, for the period from the date of such event to the last day of the then
current Interest Period therefor ( or, in the case of a failure to borrow, convert or continue, for the
period that would have been the Interest Period for such SOFR Loan), over (ii) the amount of
interest which would accrue on such principal amount for such period at the interest rate which the
Lender would bid were it to bid, at the commencement of such period, for dollar deposits of a
comparable amount and period from other banks in the eurodollar.applicable interbank market¼
.whether or not such SQE.R_Loan was in fact_fund.e.d.-A certificate of the Lender setting forth any
amount or amounts that the Lender is entitled to receive pursuant to this Section shall be delivered
to the Borrower and shall be conclusive absent manifest error. The Borrower shall pay the Lender
the amount shown as due on any such certificate within thirty (30) days after receipt thereof.
Section 2.14. Payments Free of Taxes. (a) Any and all payments by or on account of any
obligation of the BotTower under any Basic Document shall be made without deduction or
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withholding for any Taxes, except as required by applicable law. If any applicable law (as
determined in the good faith discretion of the Borrower) requires the deduction or withholding of
any Tax from any such payment by the Borrower, then the Borrower shall be entitled to make such
deduction or withholding and shall timely pay the full amount deducted or withheld to the relevant
Governmental Authority in accordance with applicable law and, if such Tax is an Indemnified
Tax, then the sum payable by the Borrower shall be increased as necessary so that after such
deduction or withholding has been made (including such deductions and withholdings applicable
to additional sums payable under this Section 2.14) the Lender receives an amount equal to the
sum it would have received had no such deduction or withholding been made.
(b) The Borrower shall timely pay to the relevant Governmental Authority in accordance
with applicable law, or at the option of the Lender timely reimburse the Lender for, Other Taxes.
(c) As soon as practicable after any payment of Taxes by the Borrower to a
Governmental Authority pursuant to this Section 2.14, the Borrower shall deliver to the Lender the
original or a certified copy of a receipt issued by such Governmental Authority evidencing such
payment, a copy of the return reporting such payment or other evidence of such payment
reasonably satisfactory to the Lender.
(d) The Borrower shall indemnify the Lender, within 30 days after demand therefor, for
the full amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or
attributable to amounts payable under this Section) payable or paid by the Lender or required to be
withheld or deducted from a payment to the Lender and any reasonable expenses arising therefrom
or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed
or asserted by the relevant Governmental Authority. A certificate as to the amount of such
payment or liability delivered to the Borrower by the Lender shall be conclusive absent manifest
error.
(e) If the Lender determines, in its sole discretion exercised in good faith, that it has
received a refund of any Taxes as to which it has been indemnified pursuant to this Section 2.14
(including by the payment of additional amounts pursuant to this Section 2.14), it shall pay to the
Borrower an amount equal to such refund (but only to the extent of indemnity payments made
under this Section 2.14 with respect to the Taxes giving rise to such refund), net of all
out-of-pocket expenses (including Taxes) of the Lender and without interest (other than any
interest paid by the relevant Governmental Authority with respect to such refund). The Borrower,
upon the request of the Lender, shall repay to the Lender the amount paid over pursuant to this
paragraph (e) (plus any penalties, interest or other charges imposed by the relevant Governmental
Authority) in the event that the Lender is required to repay such refund to such Governmental
Authority. Notwithstanding anything to the contrary in this paragraph (e), in no event will the
Lender be required to pay any amount to the Borrower pursuant to this paragraph (e) the payment
of which would place the Lender in a less favorable net after-Tax position than the Lender would
have been in if the Tax subject to indemnification and giving rise to such refund had not been
deducted, withheld or otherwise imposed and the indemnification payments or additional amounts
with respect to such Tax had never been paid. This paragraph shall not be construed to require the
Lender to make available its Tax returns (or any other information relating to its Taxes that it
deems confidential) to the BotTower or any other Person.
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(f) Each party's obligations under this Section 2.14 shall survive any assignment of
rights by the Lender, the termination of the Commitment and the repayment, satisfaction or
discharge of all obligations under any Basic Document.
(g) For purposes of this Section 2.14, the term "applicable law" includes FA TCA.
Section 2. 15. Payments Generally. (a) The Borrower shall make each payment required to
be made by it hereunder or under the Fee Agreement (whether of principal, interest, fees or
reimbursement of LC Disbursements, or of amounts payable under Section 2.12, 2.13 or 2.14, or
otherwise) prior to 12:00 noon, New York City time, on the date when due, in immediately
available funds, without set off or counterclaim. Any amounts received after such time on any date
may, in the discretion of the Lender, be deemed to have been received on the next succeeding
Business Day for purposes of calculating interest thereon. All such payments shall be made to the
Lender at its offices at 270 Park A venue, New York, New York, except that payments pursuant to
Sections 2.12, 2.13, 2.14 and 7.5 shall be made directly to the Persons entitled thereto. If any
payment hereunder shall be due on a day that is not a Business Day, the date for payment shall be
extended to the next succeeding Business Day, and, in the case of any payment accruing interest,
interest thereon shall be payable for the period of such extension. All payments hereunder shal I be
made in dollars.
(b) If at any time insufficient funds are received by and available to the Lender to pay
fully all amounts of principal, unreimbursed LC Disbw-sements, interest and fees then due
hereunder, such funds shall be applied (i) first, towards payment of interest and fees then due
hereunder, and (ii) second, ratably towards payment of principal and unreimbursed LC
Disbursements then due hereunder.
Section 2.16. Mitigation Obligation. If the Lender requests compensation under Section
2.12, or if the Borrower is required to pay any Indemnified Taxes or additional amounts to the
Lender or any Governmental Authority for the account of the Lender pursuant to Section 2.14,
then the Lender shall use reasonable efforts to designate a different lending office for funding or
booking its Loans hereunder or to assign its rights and obligations hereunder to another of its
offices, branches or affiliates, if, in the judgment of the Lender, such designation or assignment (i)
would eliminate or reduce amounts payable pursuant to Sections 2.12 or 2.14, as the case may be,
in the future and (ii) would not subject the Lender to any unreimbursed cost or expense and would
not otherwise be disadvantageous to the Lender. The Borrower hereby agrees to pay all reasonable
costs and expenses incurred by the Lender in connection with any such designation or assignment.
Section 2. 17. Extension of Maturity Date. The Maturity Date may be extended an
unlimited number of times, in each case in the manner set forth in this Section 2.17. Upon receipt
of written request of the Borrower to extend the Maturity Date, received no more than one hundred
twenty (120) days and no less than sixty (60) days prior to the then current Maturity Date, the
Lender will use its commercially reasonable efforts to notify the Borrower of its response within
thirty (30) days of receipt of the request therefor (the Lender's decision to be made in its sole and
absolute discretion and on such terms and conditions as to which the Lender and the Borrower may
agree); provided, however, that the failure of the Borrower to receive a written confirmation from
the Lender within the time established therefor shall be deemed a denial of such request. Any
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extension of the Maturity Date will be deemed to be on the existing terms of this Agreement unless
the Lender and the Borrower have entered into a written agreement confirming a change in any
term of this Agreement.
Section 2.18. Pledge; Security of Obligations. The Net Revenues are hereby pledged by
the Borrower to the payment of the Obligations without priority or distinction of one Obligation
over another Obligation. The pledge of Net Revenues is valid and binding in accordance with the
tenns of the Act, the Joint Powers Agreement and the Resolution, and the Net Revenues shall
immediately be subject to the pledge, and the pledge shall constitute a lien and security interest
which shall immediately attach to the Net Revenues and be effective, binding, and enforceable
against the Borrower, its successors, creditors, and all others asserting the rights therein, to the
extent set forth in this Agreement, and in accordance with the Act, the Joint Powers Agreement
and the Resolution, irrespective of whether those paiiies have notice of the pledge and without the
need for any physical delivery, recordation, filing, or further act. The pledge of the Net Revenues
herein made shall be irrevocable until the Commitment has expired or been terminated and the
principal of and interest on each Loan and all fees payable hereunder shall have been paid in full
and all Letters of Credit shall have expired or tenninated, in each case, without any pending draw,
and all LC Disbursements shall have been reimbursed. Notwithstanding any other provision of
this Agreement to the contrary, all Obligations are limited obligations of the Borrower payable
solely from Net Revenues. The pledge of the Net Revenues herein made shall be senior to any
pledge of the Net Revenues made with respect to any Subordinate Debt.
ARTICLE3
CONDJTIONS
Section 3.1. Conditions Precedent to Effectiveness. The obligation of the Lender to make
Loans and to issue Letters of Credit hereunder shall not become effective until the date on wh.ich
each of the foll owing conditions is satisfied:
(a) Opinions. The Lender has received an opinion of Nixon Peabody LLP,
special counsel to the Borrower, dated the Closing Date and addressed to the Lender in the
form attached hereto as Exhibit A.
(b) Documents. (i) The Lender has received executed copies of the Basic
Documents executed by the Borrower on the Closing Date or prior to the Closing Date if
certified by the Secretary of the Borrower, the Clerk of the Board or any Authorized
Representative or the Board, as applicable, as being complete and in full force and effect on
and as of the Closing Date.
(ii) The Lender has received a certified copy of the Joint Powers Agreement.
(c) Defaults; Representations and Warranties. On and as of the Closing Date,
the representations of the Borrower set forth in Article Four hereof are true and correct in
all material respects on and as of the Closing Date with the same force and effect as if made
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on and as of such date and no Default or Event of Default has occurred and is continuing or
would result from the execution and delivery of this Agreement and the Fee Agreement.
(d) No Litigation. No action, suit, investigation or proceeding is pending or, to
the knowledge of the Borrower, threatened (i) in connection with the Basic Documents or
any transactions contemplated thereby or (ii) against or affecting the Borrower, the result
of which could have a Material Adverse Effect.
(e) No Material Adverse Change. Since the date of the 2020 Audited Financial
Statements, (i) no Material Adverse Change has occurred in the status of the business,
operations or condition (financial or otherwise) of the Borrower or its ability to perform its
obligations under the Basic Docwnents and (ii) to the best of its knowledge, no law,
regulation, ruling or other action (or interpretation or administration thereof) of the United
States, the State of California or any political subdivision or authority therein or thereof is
in effect or has occurred, the effect of which would be to prevent the Lender from fulfilling
its obligations under this Agreement or the Letters of Credit.
(f) Certificate. The Lender has received (i) certified copies of all proceedings
of the Borrower authorizing the execution, delivery and performance of the Basic
Documents and the transactions contemplated thereby and (ii) a certificate or certificates of
one or more Authorized Representatives dated the Closing Date certifying the accuracy of
the statements made in Section 3.l(c), (d), (e) and (i) hereof and further ce1tifying the
name, incumbency and signature of each individual authorized to sign this Agreement, the
Fee Agreement and the other documents or certificates to be delivered by the Borrower
pursuant hereto or thereto, on which certification the Lender may conclusively rely until a
revised certificate is similarly delivered, and that the conditions precedent set forth in this
Section 3.1 have been satisfied.
(g) Payment of Fees. The Lender has received all fees and expenses due and
payable to the Lender and/or its legal counsel pursuant to the Fee Agreement.
(h) Financial Statements. The Lender has received the 2020 Audited Financial
Statements, internally prepared quarterly budget reports of the Borrower for the most
recent fiscal quarter end, if not previously provided.
(i) Rates. The Lender has received satisfactory evidence that rates charged by
the Borrower for its services will be reasonably competitive to the rates of the San Diego
Gas & Electric Company.
(j) Other Matters. The Lender has received such other statements, certificates,
agreements, documents and information with respect to the Borrower and matters
contemplated by this Agreement as the Lender may have requested.
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Section 3.2. Conditions Precedent to each Credit Event. The obligation of the Lender to
make a Loan on the occasion of any Borrowing, and of the Lender to issue, amend, renew or
extend any Letter of Credit, is subject to the satisfaction of the following conditions:
(a) The Borrower shall have filed the necessary notices and filings with and
provided for payment to the California Debt Issuance Advisory Commission of any fee
related thereto.
(b) The representations and warranties of the Borrower set forth in this
Agreement shall be true and correct on and as of the date of such Borrowing or the date of
issuance, amendment, renewal or extension of such Letter of Credit, as applicable.
(c) At the time of and immediately after giving effect to such Borrowing or the
issuance, amendment, renewal or extension of such Letter of Credit, as applicable, no
Default or Event of Default shall have occuITed and be continuing.
(d) It has provided the Lender with a completed Borrowing Request
substantially in the form of Exhibit C hereto or a Letter of Credit Request substantially in
the form of Exhibit D-1 hereto, as applicable.
Each Borrowing and each issuance, amendment, renewal or extension of a Letter of Credit
shall be deemed to constitute a representation and warranty by the Borrower on the date thereof as
to the matters specified in paragraphs (a) and (b) of this Section.
Section 3.3. Condition Subsequent to Closing Date. Within five (5) Business Days of
the Closing Date, the Borrower shall provide written evidence that the Existing Debt has been paid
in full in immediately available funds, and such Existing Debt and the documents thereto shall
have been terminated to the satisfaction of the Lender. Failure to comply with this Section 3.3
shall constitute an Event of Default under Section 6.1 hereunder.
ARTICLE4
REPRESENT A TIO NS AND W ARRANTTES
In order to induce the Lender to make Loans and issue the Letters of Credit, the Borrower
represents and warrants to the Lender as follows:
Section 4.1. Organization, Powers, Etc. The Borrower (a) is a public agency formed
under the provisions of the Joint Powers Act that is qualified to be a community choice aggregator
pursuant to California Public Utilities Code Section 366.2 and; (b) bas full and adequate power to
own its Property and conduct its business as now conducted, and is duly licensed or qualified in
each jurisdiction in which the nature of the business conducted by it or the nature of the Property
owned or leased by it requires such licensing or qualifying unless the failure to be so licensed or
qualified could not reasonably be expected to have a Material Adverse Effect. The Borrower has
the agency power to (i) execute, deliver and perform its obligations under the Basic Documents;
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(ii) provide for the security of this Agreement and the Fee Agreement pursuant to the Joint Powers
Act; and (iii) has complied with all Laws in all matters related to such actions of the Borrower as
are contemplated by the Basic Documents.
Section 4.2. Authorization, Absence of Conflicts, Etc. The execution, delivery and
performance by the Borrower of the Basic Documents (a) have been duly authorized by all
necessary action on the part oftbe Borrower, (b) do not conflict with, or result in a violation of, any
Laws, including the Joint Powers Agreement, or any order, writ, rule or regulation of any court or
governmental agency or instrumentality binding upon or applicable to the Borrower which
violation would result in a Material Adverse Effect and ( c) do not conflict with, result in a violation
of, or constitute a default under, any resolution, agreement or instrument to which the Borrower is
a party or by which the Borrower or any of its property is bound which, in any case, would result in
a Material Adverse Effect.
Section 4.3. Binding Obligations. The Basic Documents are valid and binding
obligations of the Borrower (assuming due authorization, execution and delivery by the other
parties thereto) enforceable against the Borrower in accordance with their respective terms, except
to the extent, if any, that the enforceability thereof may be limited by (i) any applicable
bankruptcy, insolvency, reorganization, moratorium or other similar law of the State or Federal
government affecting the enforcement of creditors' rights generally heretofore or hereafter
enacted, (ii) the fact that enforcement may also be subject to the exercise of judicial discretion in
appropriate cases and (iii) the limitations on legal remedies against public agencies of the State.
Section 4.4. Governmental Consent or Approval. No consent, approval, permit,
authorization or order of, or registration or filing with, any court or government agency, authority
or other instrumentality not already obtained, given or made is required on the part of the Borrower
for execution, delivery and performance by the Borrower of the Basic Documents.
Section 4.5. Absence of Material Litigation. There is no action, suit, proceeding, inquiry
or investigation, at law or in equity, before or by any court, arbitrator or governmental or other
board, body or official pending or, to the best knowledge of the Borrower, threatened against or
affecting the Borrower questioning the validity of the Joint Powers Agreement, the execution,
delivery and performance by the Borrower of the Basic Documents or any proceeding taken or to
be taken by the Borrower or the Board in connection therewith, or seeking to prohibit, restrain or
enjoin the execution, delivery and performance by the Borrower of the Basic Documents, or which
could reasonably be expected to result in any Material Adverse Effect, or wherein an unfavorable
decision, ruling or finding would in any way materially adversely affect the transactions
contemplated by the Basic Documents (any such action or proceeding being herein referred to as
"Material Litigation ").
Section 4. 6. Financial Condition. The most recent audited financial statements of the
System delivered ( or deemed delivered) to the Lender (the "Audited Financial Statements") were
prepared in accordance with GAAP applied on a consistent basis throughout the periods involved
and were subject to certification by independent certified public accountants of nationally
recognized standing or by independent certified public accountants otherw'ise acceptable to the
Lender. The most recent unaudited financial statements of the System delivered (or deemed
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delivered) to the Lender were prepared on a consistent basis and in accordance with GAAP. The
data on which such financial statements and budget reports are based were true and correct in all
material respects. The Audited Financial Statements and the budget reports present fairly the net
position of the System as of the date they purport to represent and the revenues, expenses and
changes in fund balances and in net position for the periods then ended. Since the date of the most
recent Audited Financial Statements delivered to the Lender, no Material Adverse Effect has
occurred.
Section 4. 7. Incorporation of Representations and Warranties. The representations and
warranties of the Borrower set forth in the Basic Documents ( other than this Agreement and the
Fee Agreement) are true and accurate in all material respects on the Closing Date, as fully as
though made on the Closing Date. The Borrower makes, as of the Closing Date, each of such
representations and wan-anti es to, and for the benefit of, the Lender, as if the same were set forth at
length in this Section 4. 7 together with all applicable definitions thereto. No amendment,
modification or termination of any such representations, warranties or definitions contained in the
Basic Docwnents (other than this Agreement and the Fee Agreement) will be effective to amend,
modify or terminate the representations, warranties and definitions incorporated in this Section 4. 7
by this reference, without the prior written consent of the Lender.
Section 4.8. Accuracy and Completeness of Information. The Basic Documents and all
certificates, financial statements, documents and other written information furnished to the Lender
by or on behalf of the Borrower in connection with the transactions contemplated hereby were, as
of their respective dates, complete and correct in all material respects to the extent necessary to
give the Lender true and accurate knowledge of the subject matter thereof and did not contain any
untrue statement of a material fact.
Section 4.9. No Default. (a) No Default or Event of Default under this Agreement has
occurred and is continuing.
(b) No "event of default" has occurred and is continuing under any other material
mortgage, indenture, contract, agreement or undertaking respecting the System (including, but not
limited to, any PPA) to which the Bonower is a party or which purports to be binding on the
Borrower or on any of the property of the System.
Section 4.10. No Proposed Legal Changes. There is no amendment or, to the knowledge
of the Borrower, proposed amendment to the Constitution of the State, any State law or the Joint
Powers Agreement or any administrative interpretation of the Constitution of the State, any State
law, or the Joint Powers Agreement, or any judicial decision interpreting any of the foregoing, the
effect of which could reasonably be expected to have a Material Adverse Effect.
Section 4.11. Compliance with Laws, Etc. The Borrower is in compliance with the
Investment Policy and all Laws applicable to the Borrower, non-compliance with which could
reasonably be expected to have a Material Adverse Effect. In addition, no benefit plan maintained
by the Borrower for its employees is subject to the provisions of ERISA, and the Borrower is in
compliance with all Laws in respect of each such benefit plan.
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Section 4.12. Environmental Matters. In the ordinary course of its business, the Borrower
conducts an ongoing review of Environmental Laws on the business, operations and the condition
of its property, in the course of which it identifies and evaluates associated liabilities and costs
(including, but not limited to, any capital or operating expenditures required for clean-up or
closure of properties currently or previously owned or operated, any capital or operating
expenditures required to achieve or maintain compliance with environmental protection standards
imposed by law or as a condition of any license, permit or contract, any related constraints on
operating activities, including any periodic or permanent shutdown of any facility or reduction in
the level of or change in the nature of operations conducted thereat and any actual or potential
liabilities to third parties, including employees, and any related costs and expenses). On the basis
of such review, the Borrower does not believe that Environmental Laws are likely to have a
Material Adverse Effect.
Section 4.13. Regulation U. The Borrower is not engaged in the business of extending
credit for the purpose of purchasing or carrying margin stock (within the meaning of Regulation U
issued by the Board of Governors of the Federal Reserve System).
Section 4.14. Liens. This Agreement creates a valid Lien on and pledge of the Net
Revenues to secure the payment and performance of the Borrower's obligations under this
Agreement and the Fee Agreement, and no fi lings, recordings, registrations or other actions are
necessary on the part of the Borrower, the Lender or any other Person to create or perfect such
Lien. Except for the Lien over Net Revenues contained in this Agreement, there is no pledge of or
Lien on Net Revenues.
Section 4.15. Sovereign immunity. The Borrower is not entitled to claim immunity on the
grounds of sovereignty or other similar grounds (including, without limitation, governmental
immunity) with respect to itself or its revenues (irrespective of their use or intended use) from (i)
any action, suit or other proceeding arising under or relating to this Agreement or any other Basic
Document, (ii) relief by way of injunction, order for specific performance or writ of mandamus or
for recovery of property or (iii) execution or enforcement of any judgment to which it or its
revenues might otherwise be made subject in any action, suit or proceeding relating to this
Agreement or any other Basic Document, and no such immunity (whether or not claimed) may be
attributed to the Borrower or its revenues.
Section 4.16. Usury. The terms of the Basic Documents regarding the calculation and
payment of interest and fees do not violate any applicable usury laws.
Section 4.17. Insurance. As of the Closing Date, the Borrower maintains such insurance,
including self-insurance, as is required by Section 5. l(k) hereof.
Section 4.18. ERJSA. The Borrower does not maintain or contribute to, and has not
maintained or contributed to, any Employee Plan that is subject to Title IV ofERISA.
Section 4.19. Sanctions Concerns and Anti-Corruption Laws. The Borrower and its
respective officers and directors and to the knowledge of the Borrower, its employees and agents,
are in compliance with Anti-Corruption Laws and applicable Sanctions in all material respects.
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None of (a) the Borrower, any of its directors or officers or employees, or (b) to the knowledge of
the Borrower, any agent of the Borrower that will act in any capacity in connection with or benefit
from the credit facili ty established hereby, is a Sanctioned Person. No Borrowing or Letter of
Credit, use of proceeds, Transaction or other transaction contemplated by this Agreement or the
other Basic Documents will violate Anti-Corruption Laws or applicable Sanctions.
Section 4. 20. System Debt. The Borrower has not incurred or issued any System Debt
other than the System Debt created under this Agreement and the Member Capital Advances.
ARTICLE 5
COVENA TS
Section 5.1. Affirmative Covenants. Until the Commitment has expired or been
terminated and the principal of and interest on each Loan and all fees payable hereunder shall have
been paid in full and all Letters of Credit shall have expired or terminated, in each case, without
any pending draw, and all LC Disbursements shall have been reimbursed, the B01Tower covenants
and agrees with the Lender that:
(a) Accounting and Reports. The Borrower shall maintain a standard system of
accounting in accordance with GAAP consistently applied and furnish to the Lender:
(i) as soon as available, and in any event within sixty (60) days after the
close of each of the first three (3) fiscal quarters of each Fiscal Year, an unaudited
balance sheet of Borrower, including the specific amow1t in the Operating Reserve,
as of the last day of the quarterly period then ended and the statements of income,
retained earnings and cash flows of Borrower for the quarterly period then ended,
prepared in accordance with GAAP and in a form acceptable to Lender;
(ii) as soon as available, and in any event within six (6) months after the
close of each Fiscal Year of Borrower, a copy of the audited balance sheet of
Borrower, including the specific amow1t in the Operating Reserve, as of the last day
of the Fiscal Year then ended and the statements of income, retained earnings and
cash flows of Borrower for the Fiscal Year then ended, and accompanying notes
thereto, each in reasonable detail showing in comparative form the figures for the
previous Fiscal Year, accompanied by an unqualified opinion thereon of
Borrower's independent public accountants, to the effect that the financial
statements have been prepared in accordance with GAAP and present fairly in
accordance with GAAP the financial condition of Borrower as of the close of such
Fiscal Year and the results of its operations and cash flows for the Fiscal Year then
ended and that an examination of such accounts in connection with such financial
statements has been made in accordance with generally accepted auditing standards
and, accordingly, such examination included such tests of the accounting records
and such other auditing procedures as were considered necessary in the
circumstances;
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(iii) promptly after receipt thereof, any additional written reports,
management letters or other detailed information contained in writing concerning
significant aspects of Borrower's operations and financial affairs given to it by its
independent public accountants;
(iv) promptly after knowledge thereof shall have come to the attention of
any responsible officer of Borrower, written notice of any litigation threatened in
writing or any pending litigation or governmental proceeding or labor controversy
against Borrower which, if adversely determined, could reasonably be expected to
have a Material Adverse Effect or result in the occurrence of any Default or Event
of Default hereunder;
(v) as soon as available, and in any event within 30 days of adoption,
the Borrower shall provide the Lender its annual budget;
(vi) as soon as available, and in any event within 30 days of the end of
each month, the monthly operating information of the Borrower, substantially in
the form agreed upon between CEA and the Lender, which shall include customer
enrollments, opt-outs, ana-total revenues and a summary report of all hedgin_g
transactions described in Section 5. Hu) hereof;
substance satisfactory to the .8.ank;
===(yjj=v==i....,ii) promptly after receipt thereof, copies of each PPA entered into by
the Borrower; and
(¥i-i-iW promptly after the request therefor, all such other information as
Lender may reasonably request.
Each of the financial statements furnished to Lender pursuant to subsection (a)(i)
and (ii) of this Section 5.1 shall be accompanied by a compliance certificate, substantially
in the form of Exhibit B hereto, signed by an Authorized Representativeii) stating that no
Event of Default or Default has occurred or if any Event of Default or Default has occurred,
specifying the nature of such Event of Default or Default, the period of its existence, the
nature and status thereof and any remedial steps taken or proposed to correct such Event of
Default or Default, and such compliance certificate shall also include the Debt Service
Coverage Ratio test requifed by Section 5. l(q) hereof and the (ii) including (A) a
a abl ,ded calculati.Q!.L( t e amoJ.Int o the a· le · idi · clud.i.n
amounts in each individual reserve fund of the Borrower) as of the end of such fi cal
uarter or Fiscal Year as a licable B a ce1tification of com liance with Sectio 1 5 1
b_er_eQ[_an_d_the related Debt Service Da Li uid.
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~tiQns_,j__c) the amount set forth in the Operating Reserve_and (D) aUY...Updates--1QJb.e.
n10.s.tre_cent.anrtuaLbudget_pr.orideJip_µIS11a11UQS.ection 5.1(,nlhereof.
(b) Access to Records. At any reasonable time and from time to time, during
normal business hours and, so long as no Event of Default has occurred and is continuing,
on at least five (5) Business Days' notice, the Borrower shall permit the Lender or any of its
agents or representatives to visit and inspect any of the properties of the Borrower and the
other assets of the Borrower, to examine the books of account of the Borrower (and to
make copies thereof and extracts therefrom), and to discuss the affairs, finances and
accounts of the Borrower with, and to be advised as to the same by, its officers, aJI at such
reasonable times and intervals as the Lender may reasonably request.
(c) Compliance with Basic Documents; Operation and Maintenance of System.
(i) The Borrower shall perform and comply with each covenant set forth in the Basic
Documents and any other agreements, instrum ents or documents evidencing Parity Debt or
Subordinate Debt. By the terms of this Agreement, the Lender is hereby made a third party
beneficiary of the covenants set forth in each of the Basic Documents ( other than this
Agreement and the Fee Agreement), and each such covenant, together with the related
definitions of terms contained therein, is incorporated by reference in this Section 5.1( c)
with the same effect as if it were set forth herein in its entirety. Except as otherwise set
forth in paragraph (ii) below and in Section 5.2(a) hereof, the Borrower will not amend,
supplement or otherwise modify (or permit any of the foregoing), or request or agree to any
consent or waiver under, or effect or permit the cancellation, acceleration or termination of,
or release or permit the release of any collateral held under any of the Basic Documents in
any manner without the prior written consent of the Lender, and the Borrower shall take, or
cause to be taken, all such actions as may be reasonably requested by the Lender to strictly
enforce the obi igations of the other parties to any of the Basic Documents, as well as each
of the covenan ts set forth therein. The Borrower shall give prior written notice to the
Lender of any action referred to in this subparagraph (i).
(ii) The Borrower covenants that it will maintain and preserve the System in
good repair and working order at all times from the Revenues available for such purposes,
in conformity with standards customarily followed for municipal power systems of like
size and character. T he Borrower will from time to time make aJI necessary and proper
repairs, renewals, replacements and substitutions to the properties of the System, so that at
all times business carried on in connection w ith the System shall and can be properly and
advantageously conducted in an efficient manner and at reasonable cost, and will operate
the System in an efficient and economical manner and shall not commit or allow any waste
with respect to the System.
( d) Defaults. The Borrower shall notify the Lender of any Default or Event of
Default of which the Borrower has knowledge, as soon as possible and, in any event,
within three (3) Business Days of acquiring knowledge thereof, setting forth the details of
such Default or Event of Default and the action which the Borrower has taken and proposes
to take with respect thereto.
-41-
( e) Compliance with Laws. The Borrower shall comply in all material respects
with all Laws binding upon or applicable to the Borrower (including Environmental Laws)
and material to the Basic Documents. The Borrower will maintain in effect and enforce
policies and procedures designed to ensure compliance by the Borrower and its respective
directors, officers, employees and agents with Anti-Corruption Laws and applicable
Sanctions. The Borrower will not use or allow any tenants or subtenants to use its Property
for any business activity that violates any federal or state law or that supports a business
that violates any federal or state law.
(f) Investment Policy and Guidelines. The Borrower shall promptly notify the
Lender in writing, not less than thirty (30) days after the Borrower receives notice of the
formal consideration thereof, of any change proposed to the Investment Policy, which
proposed change would increase the types of investments permitted thereby as of the
Closing Date.
(g) Notices. The Borrower shall promptly give notice to the Lender of any
action, suit or proceeding actually known to it at law or in equity or by or before any court,
governmental instrumentality or other agency which, if adversely determined, would
materially impair the ability of the Borrower to perform its obligations under any Basic
Document.
(h) Bank Agreements. In the event that Borrower shall enter into or otherwise
consent to any amendment, supplement or other modification of any Bank Agreement after
the Closing Date which Bank Agreement contains additional or more restrictive covenants
or additional or more restrictive events of default or additional or improved remedies
( "Improved Provisions, " which for the avoidance of doubt does not include pricing,
termination fees and provisions related to interest rates but does include improved term-out
provisions), then the Borrower shall provide the Lender with a copy of such Bank
Agreement and the Improved Provisions shall automatically be deemed incorporated into
this Agreement and the Lender shall have the benefit of the Improved Provisions until such
time as the Bank Agreement containing such Improved Provisions terminates. The
Borrower shall promptly cooperate with the Lender to enter into an amendment of this
Agreement to include such Improved Provisions.
(i) Further Assurances. The Borrower shall execute, acknowledge where
appropriate and deliver, and cause to be executed, acknowledged where appropriate and
delivered, from time to time, promptly at the request of the Lender, all such instruments
and documents as are usual and customary or advisable to carry out the intent and purpose
of the Basic Documents.
(i) Notices. The Borrower shall promptly furnish, or caus~ to be furnished, to
the Lender (i) notice of the occurrence of any "default" or "event of default" or
"termination event" under any Basic Document (other than this Agreement and the Fee
Agreement) or any PPA, (i i) copies of any communications received from any
Governmental Authority with respect to the transactions contemplated by the Basic
Documents or any other System Debt which are not restricted or prohibited from being
-42-
shared with the Lender under the law or the direction of a court of competent jurisdiction or
other Governmental Authority, (iii) notice of any proposed modification to any Lockbox
Security Document, (iv) copies of all PP As and modifications thereto, promptly following
the execution thereof; provided, however, that to the extent any such PP A is subject to a
confidentiality agreement, pricing, credit-specific, and other commercially sensitive
provisions may be redacted by the Borrower in order to comply with such confidentiality
agreement, (v) notice of any proposed substitution of any Letter of Credit, and (vi) notice
of the passage of any state or local Law not of general applicability to all Persons of which
the Borrower has knowledge, which could reasonably be expected to have a Material
Adverse Effect.
(k) Maintenance of Insurance. The Borrower shall maintain, or cause to be
maintained, at all times, insurance on and with respect to its properties with responsible
and reputable insurance companies; provided, however, that the Borrower may maintain
self-insurance general liability on its properties not covered by the public entity property
insurance program policy, for worker's compensation and vehicle liability and, with the
consent of the Lender, such other self-insurance as it deems prudent. Such insurance must
include casualty, liability and workers' compensation and be in amounts and with
deductibles and exclusions customary and reasonable for governmental entities of similar
size and with similar operations as the Borrower. The Borrower shall, upon request of the
Lender, furnish evidence of such insurance to the Lender. The Borrower shall also procure
and maintain at all times adequate fidelity insurance or bonds on all officers and employees
handling or responsible for any Revenues or funds of the System, such insurance or bond to
be in an aggregate amount at least equal to the maximum amount of such Revenues or
funds at any one time in the custody of all such officers and employees or in the amount of
one million dollars ($1,000,000), whichever is less. The insurance described above may be
provided as part of any comprehensive fidelity and other insurance and not separately for
the System.
(l) Preservation of Security. The Borrower shall take any and all actions
necessary to preserve and defend the pledge of Net Revenues set forth in this Agreement.
(m) Rates. The Borrower shall fix, establish, maintain and collect rates and
charges for electric power and energy and other services, facilities and commodities sold,
furnished or supplied through the facilities of the System, which shall be fair and
nondiscriminatory and adequate to provide the Borrower with Revenues in each Fiscal
Year sufficient to-fi) pay, to the extent not paid from other available moneys, any and all
amounts the Borrower is obligated to pay or set aside from Revenues by law or contract in
such Fiscal Year and (ii) maintain on a historical a-Bd _projected basis a Debt Service
Coverage Ratio of not less than 1.40 for each Fiscal Year. If the Borrower adjusts rates and
charges as described in the prec.eding sentence and th~ulative integer of such
filijustments is 5% or greater than the budgeted rates and chaws set forth in the most
e e a_nu_u__ b..u.d0 e d_di.Y..e ed ur u nt to ectio e eof t e owe · i l e
required to promptly notify the Bank and provide the Bank with an updated twelve ( 12)
month financial ro·ection of Revenues.
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(n) Budget. The Bon-ower shall include in each annual budget of the Borrower
all amounts reasonably anticipated to be necessary to pay all obligations due to the Lender
hereunder and under the Fee Agreement. If the amounts so budgeted are not adequate for
the payment of the obligations due hereunder and under the Fee Agreement, the Borrower
shall take such action as may be necessary to cause such annual budget to be amended,
corrected or augmented so as to include therein the amounts required to be paid to the
Lender during the course of the Fiscal Year to which such annual budget applies.
( o) Payment of Taxes, Etc. The Borrower shall pay and discharge, or cause to
be paid and discharged, all taxes, assessments and other governmental charges which may
hereafter be lawfull y imposed upon the Borrower on account of the System or any portion
thereof and which, if unpaid, might impair the security of this Agreement and the Fee
Agreement, but nothing herein contained will require the Borrower to pay any such tax,
assessment or charge so long as it in good faith contests the validity thereof. The Borrower
shall duly observe and comply with all valid material requirements of any Governmental
A uthority relative to the System or any part thereof.
(p) Lockbox Security Documents and PPAs. The Borrower shall perform and
comply with all its agreements and covenants set forth in the Lockbox Security Documents
and the PPAs. The Borrower will not amend, supplement or otherwise modify (or permit
any of the foregoing) any Lockbox Security Document in any manner that could
reasonably be expected to have a materially adverse effect on the interests of the Lender
without the prior written consent of the Lender, and the Borrower shall take, or cause to be
taken, all such actions as may be reasonably requested by the Lender to strictly enforce the
obligations of the other parties to any of the Lockbox Security Documents, as well as each
of the covenants set forth therein. The Borrower shall give prior written notice to the
Lender of any proposed action referred to in this subparagraph (p).
( q) Debt Service Coverage. The Borrower shall maintain a Debt Service
Coverage Ratio of not less than 1 .40 for each fiscal quarter of the Borrower, commencing
with the fiscal quarter ended June 30, ~2023. The Debt Service Coverage Ratio shall be
tested on a rolling last twelve month basis and forward for the following twelve months as
of the last day of each fiscal quarter commencing with the fiscal quarter ended June 30,
~2 2--3. The Borrower shall determine the Debt Service Coverage Ratio at each fiscal
quarter and provide written notice thereof together with supporting calculations in
reasonable detail to the Lender as soon as practicable following the end of a fiscal quarter
and in any event no later than forty-five ( 45) calendar days following the end of such fiscal
quarter ( each such notice, a "Debt Service Coverage Ratio N. · " · · the
fure hichJhill.eb.LSer ha_n
1.40 for suclLfi&.ealq.µacter.Jhe..B,orm.w_e.r__s.halLbave been deemed to have cured its failure
t.o...m_aio.tain...a.Debt S..ervice CoY.exa~atiQ,of 1 .40 (the "Days Liquidity on Hand_C_ure ") if . . . . . . .
. ~
ending Ju · · · as of
th_e la t da than
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1 .40 for such fiscal quarter: provided that the DaysLjguidity on Hand Cure may only be
.apoli · · aggregate for any consecutive rs or such
fa_il_ur ervice Covera e atio of not !es deemed to
be a breach of this Section 5. l(g).
(r) Reserve Policy. (i) The Borrower shall comply w ith the terms of its Reserve
Policy in all respects and shall not amend such Reserve Policy without the prior written
consent of the Lender.
(ii) As of the end of each Fiscal Year (commencing with Fiscal Year ending
June 30, 2022), as shown in the audited balance statement of the Borrower delivered
pursuant to Section 5.1 (a)(ii) hereof for such Fiscal Year, the Borrower shall maintain an
Operating Reserve in an amount equal to at least five percent (5%) of Revenues to cover
unexpected revenue losses, extraordinary payments and other contingencies, and to
provide liquidity in connection with the Borrower's outstanding Debt.
(s) Use of Proceeds. (i) The proceeds of the Loans will be used only for
working capital purposes to repay LC Disbursements, to cash collateralize PPA obligations
or, through September 30, 2021, to pay interest accrued on any Loans herew1der or any
fees owing hereunder or under the Fee Agreement. No part of the proceeds of any Loan
and no Letter of Credit will be used, whether directly or indirectly, for any purpose that
entails a violation of any of the regulations of the Federal Reserve Board, including
Regulations T, U and X. Letters of Credit will be issued only to support collateral posting
requirements under PP As.
(ii) The Borrower will not request any Borrowing or Letter of Credit, and the
Borrower shall not use, and shall procure that its directors, officers, employees and agents
shall not use, the proceeds of any Borrowing or Letter of Credit (A) in furtherance of an
offer, payment, promise to pay, or authorization of the payment or giving of money, or
anything else of value, to any Person in violation of any Anti-Corruption Laws, (B) for the
purpose of funding, financing or facilitating any activities, business or transaction of or
with any Sanctioned Person, or in any Sanctioned Country, except to the extent permitted
for a Person required to comply with Sanctions, or (c) in any manner that would result in
the violation of any Sanctions applicable to any party hereto .
.amount of Loans on or before December 31. 2023 and may not reborrow such amount for
at least thirty (30) consecutiye days.
all times thereafter, the Borrower will maintain one or more hedging __ Jr.ansactions in co . . . . . . . . . .
lon
San Marcos and any ot~r a_p_nr__oye_d new Members) of the Borrower during each related
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period specified below:
Period
I/ l/22 through 12/3 1/22
1/1/23 through 12fil/2_3_
l / l/24 through L 2/3 1/24
Re..q_uir..e.d Percentage of Proiected Load
&quirements Hedged
Without limiting the foregoing, the Lender may in its reasonable discretion, by written
notice to the Borrower, adjust the periods and percentages (but in any event not greater
than the res ective ercen es s _e_cifie_d_a_b...QY_e for an three-ear con~cuJjve eriod
specified in this clause (u) (including, without limitation. a "roll forward" of such
r.e uirements it bein understood that an such ad·ustment shall i not occur more than
once per fiscal year, (ii) not occur until after the annual meeting between the B01rower and
the Lender to discuss such requirements (which both parties agree to hold at least once w
y__~arLand (iii) give due regard to then pre_y_ail_in_g__macket conditi@s for power purchases
and CEA's financial condition at the ti1~ of any such adjustment, the Lender hereby
e ino to consider such facto~m~d_i!l this cl use iii in ood faith in connection
with any such adjustment.
Section 5.2. Negative Covenants. Until the Commitment has expired or been terminated
and the principal of and interest on each Loan and all fees payable hereunder shall have been paid
in full and all Letters of Credit shall have expired or terminated, in each case, without any pending
draw, and all LC Disbursements shall have been reimbursed, the Borrower covenants and agrees
with the Lender that it will not:
(a) No Impairment. Take any action that would have an adverse effect on (i)
the ability of the Borrower to pay when due amounts owing to the Lender or any
Participant under this Agreement or the Fee Agreement; (ii) the pledge of Net Revenues or
the priority of payments from Net Revenues provided in this Agreement; or (iii) the rights
or remedies of the Lender under the Basic Documents.
(b) Merger, Disposition of Assets. Consolidate or merge with or into any
Person or sell, lease or otherwise transfer all or substantially all of its assets to any Person.
( c) Abandon. Take any action to abandon the System or any significant portion
thereof.
(d) Preservation of Corporate Existence, Etc. Take any action to terminate its
existence as a public agency under the Joint Powers Act or its rights and privileges as such
entity within the State.
(e) Liens. Create or suffer to exist or permit any Lien on the Revenues or the
proceeds thereof other than the Liens (i) created by this Agreement, and (ii) created by the
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Security Agreement.
(t) Sovereign Immunity. To the fullest extent permitted by applicable law, with
respect to its obligations arising under this Agreement or any other Basic Document, the
Borrower irrevocably agrees that it will not assert or claim any immunity on the grounds of
sovereignty or other similar grounds (including, without limitation, governmental
immunity) from (i) any action, suit or other proceeding arising under or relating to this
Agreement or any other Basic Document, (ii) relief by way of injunction, order for specific
performance or writ of mandamus or (iii) execution or enforcement of any judgment to
which it or its revenues might otherwise be entitled in any such action, suit or other
proceeding, and the Borrower hereby irrevocably waives, to the fullest extent permitted by
applicable law, with respect to itself and its revenues (irrespective of their use or intended
use), all such immunity.
(g) System. Construct, operate or maintain any system or utility competitive
with the System. The Borrower shall have in effect, or cause to have in effect, at all times
an ordinance or resolution requiring all customers of the System to pay the fees, rates and
charges applicable to the services and facilities furnished by the System. The Borrower
shall not provide any service of the System free of charge to any Person, except (i) to the
extent that any such free use is required by the terms of any existing contract or agreement
and (ii) for incidental insignificant free use so long as such free use does not prevent the
Borrower from satisfying the other covenants of this Agreement.
(h) Preservation of Existence, Etc. Take any action to accomplish a merger,
consolidation or combination of the System with any other entity or enterprise.
(i) Use of Proceeds. Use the Letters of Credit for any purpose other than to
secure the Borrower's obligations under PPAs. Use the proceeds of any Loan, whether
directly or indirectly, and whether immediately, incidentally or ultimately, to purchase or
carry margin stock (within the meaning of Regulation U of the Board of Governors of the
Federal Reserve System) or to extend credit to others for the purpose of purchasing or
carrying margin stock or to refund indebtedness originally incurred for such purpose, in
each case in violation of, or for a purpose which violates, or would be inconsistent with,
Regulation T, U or X of the Board of Governors of the Federal Reserve System. Use the
proceeds for any Loan for any purposes other than (i) to provide cash collateral to secure
the Borrower's obligations under PPAs, (i i) to repay in whole or in part any LC
Disbursement, (iii) for general corporate purposes, or (iv) capital expenditures related to
the development or acquisition of new assets related to the System subject to prior written
approval by the Lender, which such approval shall not be unreasonably be withheld. For
the avoidance of doubt, Loan Proceeds may not be used for other long-term expenditures or
for funding the Operating Reserve. Use the proceeds of any Loan or any Letter of Credit in
violation of any Sanctions or Anti-Corruption Laws.
(i) System Debt. Not issue, incur or assume to exist any Senior Debt, Parity
Debt or Subordinate Debt except for (i) Debt existing under this Agreement and (ii)
Member Capital Advances in an amount not to exceed $450,000.
-47-
(k) Excess Revenues. Not use excess revenues for any purpose other than: (i)
payment of Operating and Maintenance Costs; (ii) payment of Obligations; (iii) funding
and replenishment of the Operating Reserve; (iv) capital expenditures in connection with
assets that will become part of the System; (v) rebates to System customers; and (vi) any
other lawful purpose that inures to the direct benefit of the System.
(1) Swap Agreements. Not enter into any Swap Agreement, except (a) Swap
Agreements entered into to hedge or mitigate risks to which the Borrower has actual
exposure, and (b) Swap Agreements entered into in order to effectively cap, collar or
exchange interest rates (from floating to fixed rates, from one floating rate to another
floating rate or otherwise) with respect to any interest-bearing liability or investment of the
Borrower.
(m) Repayment of Member Capital Advances. Not to repay the Member Capital
Advances without prior written consent of the Lender unless (i) such repayment is made on
or after the third (3rd) anniversary of the date the System commences providing utility
services to customers, (ii) on the date of such repayment, no Default or Event of Default
has occurred and is continuing hereunder and (iii) the Borrower shall have provided to
Lender a certificate, together with reasonably detailed calculations, demonstrating that
Borrower has maintained and continues to maintain on a historical and projected basis a
Debt Service Coverage Ratio of not less than 1.50 for each Fiscal Year.
ARTICLE 6
DEFAULTS
Section 6.1. Events of Default and Remedies. If any of the following events occur, each
such event will be an "Event of Default":
(a) the Borrower fails to pay, or cause to be paid, as and when due, (i) any
principal of or any interest on any Loan or Reimbursement Obligation or (ii) any other
Obligation hereunder or under the Fee Agreement and, in the case of clause (ii), such
failure continues for three (3) Business Days.
(b) any representation or warranty made by or on behalf of the Borrower in this
Agreement or in any other Basic Document or in any certificate or statement delivered
hereunder or thereunder is incorrect or untrue in any material respect when made or
deemed to have been made or delivered;
( c) the Borrower defaults in the due performance or observance of any of the
covenants set forth in Section 5.l(a), 5.l(c), 5.l(d), 5.l(g), 5.l(k), 5.1(1), 5.l(m), 5.l(q),
5.l(r)(i), 5.l(s) or 5.2 hereof;
( d) the Borrower defaults in the due performance or observance of any other
term, covenant or agreement contained in this Agreement or any other Basic Document
-48-
and such default remains unremedied for a period of thirty (30) days after the occurrence
thereof;
(e) the Borrower, directly or indirectly, (i) has entered involuntarily against it
an order for relief under the United States Bankruptcy Code, as amended, (ii) becomes
insolvent or does not pay, or is unable to pay, or admits in writing its inability to pay, its
debts generally as they become due, (iii) makes an assignment for the benefit of creditors,
(iv) applies for, seeks, consents to, or acquiesces in, the appointment of a receiver,
custodian, trustee, examiner, liquidator or similar official for it or any substantial part of its
Property, (v) institutes any proceeding seeking to have entered against it an order for relief
under the United States Bankruptcy Code, as amended, to adjudicate it insolvent or seeking
dissolution, winding up, liquidation, reorganization, arrangement, marshalling of assets,
adjustment or composition of it or its debts under any law relating to bankruptcy,
insolvency or reorganization or relief of debtors or fails to file an answer or other pleading
denying the material allegations of any such proceeding filed against it, (vi) takes any
corporate action in furtherance of any matter described in clauses (i) through (v) above or
(vii) fails to contest in good faith any appointment or proceeding described in Section
6. l(f) of this Agreement;
(f) a custodian, receiver, trustee, examiner, liquidator or similar official is
appointed for the Borrower or any substantial part of its Property, or a proceeding
described in Section 6.l(e)(v) is instituted against the Borrower and such proceeding
continues undischarged, undismissed and unstayed for a period of thirty (30) days;
(g) a debt moratoriun1, debt restructuring, debt adjustment or comparable
restriction is imposed on the repayment when due and payable of the principal of or interest
on any Debt of the Bonower by the Borrower or any Governmental Authority with
appropriate jurisdiction;
(b) any material provision of this Agreement, the Joint Powers Agreement or
any other Basic Document at any time for any reason ceases to be valid and binding on the
Borrower as a result of any legislative or administrative action by a Governmental
Authority with competent jurisdiction or is declared in a final non-appealable judgment by
any court with competent jurisdiction to be null and void, invalid or unenforceable, or the
validity or enforceability thereof is publicly contested by the Borrower, or the Borrower
publicly contests the validity or enforceability of any obligation to pay System Debt, or any
Authorized Representative publicly repudiates or otherwise denies in writing that it has
any further liability or obligation under or with respect to any provision of this Agreement,
the Joint Powers Agreement, any other Basic Document or any operative document related
to System Debt;
(i) dissolution or termination of the existence of the Borrower;
U) the Borrower (i) defaults on the payment of the principal of or interest on
any System Debt beyond the period of grace, if any, provided in the instrument or
agreement under which such System Debt was created or incurred or (ii) defaults in the
-49-
observance or performance of any agreement or condition relating to any System Debt,
including, without limitation, any Bank Agreement, or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other default, event of default or
similar event occurs or condition exists, the effect of which default, event of default or
similar event or condition is to permit ( determined without regard to whether any notice is
required) any such System Debt to become immediately due and payable in full as the
result of the acceleration, mandatory redemption or mandatory tender of such System
Debt;
(k) any final, nonappealable judgment or judgments, writ or writs or warrant or
warrants of attachment, or any similar process or processes, in an aggregate amount not
less than $250,000 are entered or filed against the Borrower or against any of its Property
and remain unpaid, unvacated, unbonded and unstayed for a period of sixty (60) days;
(l) Reserved;
(m) the passage of any Law has occurred which could reasonably be expected to
have a Material Adverse Effect.
Section 6.2. Remedies. Upon the occurrence of any Event of Default ( other than an Event
of Default described in Section 6.1( e) or 6. l(f)), and at any time thereafter during the continuance
of such event, the Lender may by notice to the Borrower, take either or both of the following
actions, at the same or different times: (i) terminate the Commitment, and thereupon the
Commitment shall terminate immediately, (ii) require cash collateral for the LC Exposure in
accordance with Section 2.4(h) hereof and (iii) declare all Obligations then outstanding to be due
and payable in whole ( or in part, in which case any principal not so declared to be due and payable
may thereafter be declared to be due and payable), and thereupon the principal of the Loans so
declared to be due and payable, together with accrued interest thereon and all fees and other
obligations of the Borrower accmed hereunder, shall become due and payable immediately,
without presentment, demand, protest or other notice of any kind, all of which are hereby waived
by the Borrower; and in case of any Event of Default described in Section 6.l(e) or 6.l(f), the
Commitment shall automatically terminate and the principal of the Loans then outstanding, and
cash collateral for the LC Exposure, together with accmed interest thereon and all fees and other
obligations of the Borrower accrued hereunder, shall automatically become due and payable,
without presentment, demand, protest or other notice of any kind, all of which are hereby waived
by the Borrower.
ARTICLE 7
MISCELLANEOUS
Section 7.1. Amendments, Waivers, Etc. No amendment or waiver of any provision of
this Agreement, or consent to any departure by the Borrower therefrom, will in any event be
effective unless the same is in writing and signed by the Lender and an Authorized Representative
of the Borrower, and then such waiver or consent is effective only in the specific instance and for
-50-
the specific purpose for which given.
Section 7.2. Notices. All notices and other communications provided for hereunder must
be in writing (including required copies) and sent by courier (including Federal Express or other
receipted courier service), facsimile transmission or regular mail, as follows:
( a) if to the Borrower:
Clean Energy Alliance
1200 Carlsbad Village Drive
Carlsbad, California 92008
Attention: Chief Executive Officer
Email: CEO@thecleanenergyalliance.org
with a copy to:
Nixon Peabody LLP
300 South Grand Avenue, Suite 4100
Los Angeles, CA 9007
Attention: Rudy S. Salo
Telephone: (213) 629-6069
Facsimile: (866) 817-1940
Email: rsalo@nixonpeabody.com
(b) if to the Lender:
JPMorgan Chase Bank, N .A.
383 Madison Avenue, 3rd Floor
New York, New York 10179
Mail Code: NY1-M076
Attention:
Telephone:
Facsimile:
Email:
Allyson Goetschius or Janice Fong
(212) 270-0335 or (212) 270-3762
(917) 849-0272
Allyson.l.goetschius@jpmorgan.com or
Janice.r.fong@jpmorgan.com
with a copy to:
JPMorgan Chase Bank, National Association
JPM-Delaware Loan Operations
500 Stanton Christiana Road, NCC5, Floor 01
Newark, DE 19713-2107
Attention: PFG Servicing
Telephone: (302) 634-9627
Email/Fax: PFG_Servicing@jpmorgan.com
-51-
And, for compliance-related items, with a copy to:
public.finance.notices@jpmchase.com
or, as to each Person named above, at such other address or telephone or telecopy number as is
designated by such Person in a written notice to the parties hereto. All such notices and other
communications will, when delivered, sent by facsimile transmission or mailed, be effective when
deposited with the courier, sent by facsimile transmission or mailed, respectively, addressed as
aforesaid, except that requests for LC Disbursements submitted to the Lender will not be effective
until received by the Lender.
Section 7.3. Survival of Covenants; Successors and Assigns. (a) All covenants,
agreements, representations and wananties made herein and in the certificates delivered pursuant
hereto will survive the malting of any Loan, and will continue in full force and effect until all of the
Obligations hereunder are paid in full. Whenever in this Agreement any of the parties hereto is
referred to, such reference will, subject to the last sentence of this Section, be deemed to include
the successors and assigns of such party, and all covenants, promises and agreements by or on
behalf of the Borrower which are contained in this Agreement will inure to the benefit of the
successors and assigns of the Lender. The Borrower may not transfer its rights or obligations under
this Agreement without the prior written consent of the Lender. The Lender may transfer or assign
some or all of its rights and obligations under this Agreement and the Fee Agreement with, so long
as no Event of Default has occurred and is continuing, the prior written consent of the Borrower
(which consent may not be withheld unreasonably); provided that the Lender shall be responsible
for all costs solely relating to such transfer or assignment. This Agreement is made solely for the
benefit of the Borrower and the Lender, and no other Person (including, without limitation, any
PPA Counterparty) will have any right, benefit or interest under or because of the existence of this
Agreement.
(b) Notwithstanding the foregoing, the Lender will be permitted to grant to one or more
financial institutions (each a "Participant") a participation or participations in all or any part of the
Lender's rights and benefits and obligations under this Agreement, the Fee Agreement, the Loans
and the Letters of Credit on a participating basis but not as a party to this Agreement (a
"Participation") without the consent of the Borrower. In the event of any such grant by the Lender
of a Participation to a Participant, the Lender shall remain responsible for the performance of its
obligations hereunder and under the Letters of Credit, and the Borrower may continue to deal
solely and directly with the Lender in connection with the Lender 's rights and obligations under
this Agreement, under the Fee Agreement and under the Letters of Credit. The Borrower agrees
that each Participant will, to the extent of its Participation, be entitled to the benefits of this
Agreement as if such Pa1ticipant were the Lender; provided that no Participant will have the right
to declare, or to take actions in response to, an Event of Default under Section 6.1 hereof; and
provided, further, that the Borrower's liability to any Participant (including, without limitation,
amounts payable pursuant to Sections 2.12, 2.13 and 2.14) will not in any event exceed that
liability which the Borrower would owe to the Lender but for such participation.
Section 7.4. No Recourse Against Constituent Members of CEA. CEA is organized as a
Joint Powers Authority in accordance with the Joint Powers Act of the State of California
-52-
(Government Code Section 6500 et seq.) pursuant to a Joint Powers Agreement dated November
4, 2019, and is a public entity separate from its constituent members. CEA shall solely be
responsible for all debts, obligations and liabilities accruing and arising out of this Agreement.
The Lender shall not make any claims, take any actions or assert any remedies against any of
CEA's constituent members arising solely as a result of CEA's breach of this Agreement.
Section 7.5. Liability of Lender; Indemnification. (a) To the extent permitted by the laws
of the State, the Borrower assumes all risks of the acts or omissions of the PP A Counterparties with
respect to the use of the Letters of Credit or the use of proceeds thereunder; provided that this
provision is not intended to and will not preclude the Borrower from pursuing such rights and
remedies as it may have against the PPA Counterparties under any other agreements. Neither the
Lender nor any of its respective officers or directors will be liable or responsible for (i) the use of
any Letter of Credit, the LC Disbursements or the Loans or the transactions contemplated hereby
and by the other Basic Documents or for any acts or omissions of any PPA Counterparty, (ii) the
validity, sufficiency or genuineness of any documents determined in good faith by the Lender to be
valid, sufficient or genuine, even if such documents, in fact, prove to be in any or all respects
invalid, fraudulent, forged or insufficient, (iii) payments by the Lender against presentation of
requests for LC Disbursements or requests which the Lender in good faith has determined to be
valid, sufficient or genuine and which subsequently are found not to comply with the terms of this
Agreement or (iv) any other circumstances whatsoever in making or failing to make payment
hereunder; provided that the Borrower is not required to indemnify the Lender for any claims,
losses, liabilities, costs or expenses to the extent, but only to the extent that a court of competent
jurisdiction has determined by a final, non-appealable judgment were caused by the gross
negligence or willful misconduct of the Lender.
(b) To the extent permitted by the laws of the State, the Bonower indemnifies and holds
harmless the Lender from and against any and all direct, as opposed to consequential, claims,
damages, losses, liabilities, costs and expenses (including specifically reasonable attorneys' fees)
which the Lender may incur ( or which may be claimed against the Lender by any Person
whatsoever) by reason of or in connection with the execution, delivery and performance of the
Basic Documents, the Letters of Credit and the transactions contemplated thereby; provided that
the Borrower is not required to indemnify the Lender to the extent, but only to the extent, any such
claim, damage, loss, liability, cost or expense is caused by the Lender's willful misconduct or
gross negligence as determined by a final order of a court of competent jurisdiction. The Lender is
expressly authorized and directed to honor any demand for payment which is made under any
Letter of Credit without regard to, and without any duty on its part to inquire into the existence of,
any disputes or controversies between the Borrower, any PPA Counterparty or any other Person or
the respective rights, duties or liabilities of any of them or whether any facts or occurrences
represented in any of the documents presented under any Letter of Credit are true and correct.
(c) To the fullest extent permitted by Applicable Law, the Borrower shall not assert, and
waives, any claim against the Lender, on any theory ofliability, for special, indirect, consequential
or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or
as a result of, any Basic Document or any agreement or instrument contemplated thereby, the
transactions contemplated thereby or the use of the proceeds thereof.
-53-
( d) The obligations of the Borrower under this Section 7 .5 will survive the termination of
this Agreement.
Section 7.6. Expenses. Upon receipt of a written invoice, the Borrower shall promptly
pay (i) the reasonable fees and expenses of counsel to the Lender incurred in connection with the
preparation, execution and delive1y and administration of this Agreement, the Letters of Credit,
the Fee Agreement and the other Basic Documents as set forth in the Fee Agreement, (ii) the
reasonable out-of-pocket expenses of the Lender incurred in connection with the preparation,
execution and delivery and administration of this Agreement, the Letters of Credit, the Fee
Agreement and the other Basic Docwnents, (iii) the fees and disbursements of counsel to the
Lender with respect to advising the Lender as to its rights and responsibilities under the Basic
Documents after the occurrence of a Default or an Event of Default and (iv) all costs and expenses,
if any, in connection with the administration and enforcement of the Basic Documents, including
in each case the fees and disbursements of counsel to the Lender. In addition, and notwithstanding
the foregoing, the Borrower agrees to pay, after the occurrence of an Event of Default, all costs and
expenses (including attorneys' fees and costs of settlement) incurred by the Lender in enforcing
any obligations or in collecting any payments due from the Borrower hereunder or under the Fee
Agreement by reason of such Event of Default or in connection with any refinancing or
restructuring of the credit arrangements provided under this Agreement in the nature of a
''workout" or of any insolvency or bankruptcy proceedings. The obligations of the Borrower under
this Section 7.6 will survive the termination of this Agreement.
Section 7. 7. No Waiver; Conflict. Neither any failure nor any delay on the part of the
Lender in exercising any right, power or privilege hereunder, nor any course of dealing with
respect to any of the same, will operate as a waiver thereof or preclude any other or further exercise
thereof, nor w ill a single or partial exercise thereof, preclude any other or further exercise thereof
or the exercise of any other right, power or privilege. The remedies herein provided are cumulative
and not exclusive of any remedies provided by law. To the extent of any conflict between this
Agreement and any other Basic Documents, this Agreement will control solely as between the
Borrower and the Lender.
Section 7.8. Modification, Amendment Waiver, Etc. No modification, amendment or
waiver of any provision of this Agreement will be effective unless the same is in writing and
signed in accordance with Section 7.1 hereof.
Section 7.9. Dealings. The Lender and its affiliates may accept deposits from, extend
credit to and generally engage in any kind of banking, trust or other business with the Borrower
and/or any PP A Counterparty regardless of the capacity of the Lender hereunder or under any
Letter of Credit.
Section 7.10. Severability. Any prov1s1on of this Agreement which is prohibited or
unenforceable in any jurisdiction will, as to such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions hereof or affecting
the validity or enforceability of such provision in any other jurisdiction, and all other remaining
provisions hereof will be construed to render them enforceable to the fullest extent permitted by
law. The parties shall endeavor in good faith negotiations to replace the invalid, illegal or
-54-
unenforceable provisions with valid provisions the economic or legal effect of which comes as
close as possible to that of the invalid, illegal or unenforceable provisions.
Section 7.11. Counterparts; Integration; Effectiveness; Electronic Execution. (a) This
Agreement may be executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which when taken together shall
constitute a single contract. This Agreement, the other Basic Docwnents and any separate letter
agreements with respect to fees payable to the Lender constitute the entire contract among the
parties relating to the subject matter hereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof. Except as provided in Section
3.1, this Agreement shall become effective w hen it shall have been executed by the Lender and
when the Lender shall have received counterparts hereof which, when taken together, bear the
signatures of each of the other parties hereto, and thereafter shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns.
(b) Delivery of an executed counterpart of a signature page of (x) this Agreement, (y)
any other Basic Document and/or (z) any document, amendment, approval, consent, information,
notice (including, for the avoidance of doubt, any notice delivered pursuant to Section 7.2),
certificate, request, statement, disclosure or authorization related to this Agreement, any other
Basic Document and/or the transactions contemplated hereby and/or thereby ( each an "Ancillary
Document") that is an Electronic Signature transmitted by telecopy, emailed pdf. or any other
electronic means that reproduces an image of an actual executed signature page shall be effective
as delivery of a manually executed counterpart of this Agreement, such other Basic :)ocument or
such Ancillary Document, as applicable. The words "execution," "signed," "signature,"
"delivery," and words of like import in or relating to this Agreement, any other Basic Document
and/or any Ancillary Document shall be deemed to include Electronic Signatures, deliveries or the
keeping of records in any electronic fonn (including deliveries by telecopy, emailed pdf. or any
other electronic means that reproduces an image of an actual executed signature page), each of
which shall be of the same legal effect, validity or enforceability as a manually executed signature,
physical delivery thereof or the use of a paper-based recordkeeping system, as the case may be;
provided that nothing herein shall require the Lender to accept Electronic Signatures in any form
or format without its prior written consent and pursuant to procedures approved by it; provided,
further, without limiting the foregoing, (i) to the extent the Lender has agreed to accept any
Electronic Signature, the Lender shall be entitled to rely on such Electronic Signature purportedly
given by or on behalf of the Borrower without further verification thereof and without any
obligation to review the appearance or fo1m of any such Electronic Signature and (ii) upon the
request of the Lender, any Electronic Signature shall be promptly followed by a manually
executed counterpart. Without limiting the generality of the foregoing, the Borrower hereby (A)
agrees that, for all purposes, including without limitation, in connection with any workout,
restructuring, enforcement of remedies, bankruptcy proceedings or litigation among the Lender
and the Borrower, Electronic Signatures transmitted by telecopy, emailed pdf. or any other
electronic means that reproduces an image of an actual executed signature page and/or any
electronic images of this Agreement, any other Basic Document and/or any Ancillary Document
shall have the same legal effect, validity and enforceability as any paper original, (B) the Lender
may, at its option, create one or more copies of this Agreement, any other Basic Document and/or
any Ancillary Document in the form of an imaged electronic record in any format, which shall be
-55-
deemed created in the ordinary course of such Person's business, and destroy the original paper
document (and all such electronic records shall be considered an original for all purposes and shall
have the same legal effect, validity and enforceability as a paper record), (C) waives any argument,
defense or right to contest the legal effect, validity or enforceability of this Agreement, any other
Basic Document and/or any Ancillary Document based solely on the lack of paper original copies
of this Agreement, such other Basic Document and/or such Ancillary Document, respectively,
including with respect to any signature pages thereto and (D) waives any claim against any
Lender-Related Person for any Liabilities arising solely from the Lender's reliance on or use of
Electronic Signatures and/or transmissions by telecopy, emailed pdf. or any other electronic means
that reproduces an image of an actual executed signature page, including any Liabilities arising as
a result of the failure of the Borrower to use any available security measures in connection with the
execution, delivery or transmission of any Electronic Signature.
Section 7. 12. Table of Contents; Headings. The table of contents and the section and
subsection headings used herein have been inserted for convenience of reference only and do not
constitute matters to be considered in interpreting this Agreement.
Section 7.13. Entire Agreement. This Agreement and the Fee Agreement represents the
final agreement between the parties hereto with respect to the subject matter hereof and may not be
contradicted by evidence of prior, contemporaneous or subsequent oral agreements of the parties
hereto as to such subject matter.
Section 7.14. Governing Law Waiver of Jury Trial. (a) THIS AGREEMENT SHALL BE
DEEMED TO BE A CONTRACT UNDER, AND FOR ALL PURPOSES SHALL BE GOVERNED BY, AND
CONSTRUED AND rNTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF CALIFORNIA
WJTHOUT GIVING EFFECT TO CONFLJCTS OF LAWS PROVISIONS; PROVIDED, THAT THE OBLIGATIONS
OF THE L ENDER HEREUNDER SHALL BE GOVERNED BY THE LAWS OF THE ST ATE OF NEW YORK
WJTHOUT GfVING EFFECT TO CONFLICTS OF LAWS PROVISIONS.
(b) TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OF THE PARTIES HERETO
WAIVES ITS RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING
OUT OF THE BASIC DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREBY,
INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREAC H OF DUTY CLAIMS, AND ALL OTHER COMMON
LAW OR ST A TUTORY CLAIMS. IF AND TO THE EXTENT THAT THE FOREGOING WANER OF THE RIGHT TO
A JURY TRIAL IS UNENFORCEABLE FOR ANY REASON IN SUCH FORUM, EACH OF THE PARTIES HERETO
CO SENTS TO THE ADJUDICATION OF ALL CLAIMS PURSUANT TO JUDICIAL REFERENCE AS PROVIDED
TN CALIFORNIA CODE OF C IVIL PROCEDURE S ECTION 638, AND THE JUDICIAL REFEREE IS
EMPOWERED TO HEAR AND DETERMINE ALL ISSUES IN SUCH REFERENCE, WHETHER FACT OR LAW.
EACH OF THE PARTIES HERETO REPRESENTS THAT IT HAS REVIEWED THIS WAIVER AND CONSENT
AND, FOLLOWING CONSULTATION WITH LEGAL COUNSEL ON SUCH MATTERS, .KNOWINGLY AND
VOLUNTARILY WANES ITS JURY TRIAL RJGHTS AND CONSENTS TO JUDICIAL REFERENCE. TN THE
EVENT OF LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A
TRIAL BY THE COURT OR TO JUDICIAL REFERENCE UNDER CALIFORNIA CODE OF CIVIL PROCEDURE
S ECTION 638 AS PROVIDED HEREIN.
( c) The covenants and waivers made pursuant to this Section 7 .14 are irrevocable and
-56-
unmodifiable, whether in writing or orally, and are applicable to any subsequent amendments,
renewals, supplements or modifications of this Agreement. In the event of litigation, this
Agreement may be filed as a written consent to a trial by the court.
Section 7.15. Reserved.
Section 7.16. USA PATRIOT Act. The Lender notifies the Borrower that, pursuant to the
requirements of the USA Patriot Act (Title lll of Pub. L. 107-56 (signed into law October 26,
2001 )) (the "Act"), it is required to obtain, verify and record information that identifies the
Borrower, which information includes the name and address of the Borrower and other
information that will allow the Lender to identify the Borrower in accordance with the Act. The
Borrower agrees to provide such documentary and other evidence of the Borrower's identity as
may be requested by the Lender at any time to enable the Lender to verify the Borrower's identity
or to comply with any Applicable Law or regulation, including, without limitation, the Act.
Section 7.17. Reserved.
Section 7.18. Assignment to Federal Reserve Bank. The Lender may assign and pledge all
or any portion of the obligations owing to it hereunder to any Federal Reserve Bank or the United
States Treasury as collateral security pursuant to Regulation A of the Board of Governors of the
Federal Reserve System and any Operating Circular issued by such Federal Reserve Bank,
provided that any payment in respect of such assigned obligations made by the Borrower to the
Lender in accordance with the terms of this Agrf!ement will satisfy the Borrower's obligations
hereunder in respect of such assigned obligation to the extent of such payment. No such
assignment will release the Lender from its obligations hereunder.
Section 7.19. Reserved.
Section 7.20. Arm's Length Transaction. The transaction described in this Agreement is an
arm's length, commercial transaction between the Borrower and the Lender in which: (i) the
Lender is acting solely as a principal (i.e., as a lender) and for its own interest; (ii) the Lender is not
acting as a municipal advisor or financial advisor to the Borrower; (iii) the Lender has no fiduciary
duty pursuant to Section 15B of the Securities Exchange Act of 1934 to the Borrower with respect
to this transaction and the discussions, undertakings and procedures leading thereto (irrespective
of whether the Lender or any of its affiliates has provided other services or is currently providing
other services to the Borrower on other matters); (iv) the only obligations the Lender has to the
Borrower with respect to this transaction are set forth in this Agreement, the Fee Agreement and
the Letters of Credit; and (v) the Lender is not recommending that the Borrower take an action
with respect to the transaction described in this Agreement and the other Basic Documents, and
before taking any action with respect to the this transaction, the Borrower should discuss the
information contained herein with the Borrower's own legal, accounting, tax, financial and other
advisors, as the Borrower deems appropriate.
[S1GNATURE PAGES FOLLOW]
-57-
IN WITNESS WHEREOF, the Borrower and the Lender have duly executed this Agreement as
of the date first written above.
C LEAN ENERGY ALLIANCE
By: _______________ _
Name: -------------Title: --------------
JPMORGAN CHASE B ANK, N.A.
By: _______________ _
Name: -------------Title: --------------
Signature Page to Revolving Credit Agreement
EXHIBIT A
FORJ\1 OF OPINION OF NIXON PEABODY LLP
[See Index No. 4 of the Closing Transcript]
ExmBITB
FORM OF COMPUANCE CERTIFICATE
This Compliance Certificate (this "Certificate") is furnished to JPMorgan Chase Bank,
N.A. (including its successors and assigns, the "Lender") pursuant to the Revolving Credit
Agreement, dated as of February 3, 2021 (together with all amendments and supplements thereto,
the "Agreement"), by and between the Clean Energy Alliance (including its successors and
assigns, the "Bon·ower") and the Lender. Unless otherwise defined herein, the terms used in this
Certificate have the meanings assigned thereto in the Agreement.
e.rtific.atLis_bein de~d_j_ n~cJi.Qn....witb_ aQn_ua a_y_dite_d
financials for the Fiscal Year ended , 20 l [unaudited financial statements for
the fiscal quarter ended , 20 J
THE UNDERSTGNED HEREBY CERTTFTES THAT:
1. I am an Authorized Representative of the Borrower;
2. I have reviewed the terms of the Agreement and I have made, or have
caused to be made under my supervision, a detailed review of the transactions and
conditions of the Borrower during the accounting period covered by the attached financial
statements;
3. The examjnations described in paragraph 2 did not disclose, and I have no
knowledge of, the existence of any condition or the occurrence of any event which
constitutes a Default or Event of Default during or at the end of the accounting period
covered by the attached financial statements or as of the date of this Certificate, except as
set forth below; and
4. To the best of my knowledge the financial statements required by Section
5.1 (a) of the Agreement and being furnished to you concurrently with tru s certificate fairly
represent the consolidated financial condition of the Clean Energy Alliance System in
accordance with GAAP as of the date and for the period covered thereby.
[Describe below the exceptions, if any, to paragraph 3 by listing, in detail, the
nature of the condition or event, the period during which it has existed and the action
which the Borrower has taken, is taking, or proposes to take with respect to each
such condition or event:
~he_runIDmt of Available Liquidity as_of the end of the [fiscal
YearJ [fiscal q uarier.lfor_ which this cmitic_ate_i_s_b_ejng_,_cleli.Y.etedis · 1
date hereof, as evi_denced v the Debt Service Coverage Ratio calculation pursuant to
Section 5. l(q)anilla n__lia~alrulatiws set.fort) on_A ndix he.@_Q.
6 . Amounts held in the Operating Reserve are as follows: $ _____ _
9. The undersigt@i, on behalf oLthe Borrower, hereby re12,resents that the
BoJI.Q er has fixed e tablis_hed maintained and c.cl.Le..c..~rate _an_d__c_h_ar es for elec1ri.c
ower and e e and other services. facilities and comm_o_dities sold, fumi e r
facilitie of the stem which are fair d n · · · and
ave be~
.1 n o th Attached hereto as A endix 11 are
[describe updates to budget].]
[Remainder of page intentionally left blank]
ro_yid_e_~sQn iled calcu)a.tio1)
2
B rrow ' t ntly adopte<Lannual budget), the B · · · · tank
n ble and ·n n vent ater than fi the
Commission shall provide the Bank wi th an updated twelve ( 12) month projection of Revenues.
-2-
The foregoing certifications and the financial statements delivered with this Certificate in
support hereof, are made and delivered this __ day of _____ __, 20_.
CLEAN ENERGY ALLIANCE
By: _______________ _
Name: -------------Title: --------------
-3-
APPENDIX PLIANCE CEJUTF-1CAIE
!FOR ANY FISCAL QUARTER IN FISCAL YEAR ENDED JuNE 30. 2023:l
(A. Days Liquidity on Hand <Section 5.1 <q)}
1.
2.
3.
4,
5.
6.
7,
Available Liquidity and Unutilized Commitment
Sum of operating and interest expense for the four
consecutive fiscal quarter period ended on or
immediately prior to such date of determination
Line A2 times 1/365
Line Al divided by Line A3
Days Liquidity on Hand based on Line A4
Line A5 must not be less than
The Borrower is in compliance (circle one}
$
$
Days
30 Days
Yes/No)
[FOR ANY FISCAL QUARTER IN FISCAL YEAR ENDED JUNE 30. 2024 OR JHEREAITER:l
(A, Days Liquidity on Hand <Section 5,1 <q)}
].
2.
3,
4,
5.
6,
7,
l.
2_.
Available Liquidity and UnutiHzed Commitment
Sum of operating and interest expense for the
consecutive fiscal quarter period ended on
immediately prior to such date of determination
Line A2 times 1 /365
Line A I divided by Line A3
Days Liquidity on Hand based on Line A4
Line A5 must not be less than
The Borrower is in compliance <circle one}
four
or
Net Revenues as determined for the four consecutive fiscal
riod~.oo_on th lastdat~uch fis~ .uarter
$
$
$
=
$
=
50 Days
Yes/No)
3. Ratio of Line B 1 to B2
~3 must not be less than
5. The Borrower is in compliance (circle one)
-2-
1.40: 1.00
Yes/No
( ATIA_Q:IEDJ
EXHTBITC
FORM OF BORROWING REQUEST
______ ,20_
JPMorgan Chase Bank, N.A.
383 Madison Avenue, 3rd Floor
New York, New York 10179
Mail Code: NY1-M076
Attention: ------
Ladies and Gentlemen:
The undersigned refers to the Revolving Credit Agreement, dated as of February 3, 2021
(together with any amendments or supplements thereto, the "Agreement"), by and between Clean
Energy Alliance (with its successors and assigns, the "Borrower") and JPMorgan Chase Bank,
N.A. (with its successors and assigns, the "Lender ") (the terms defined therein being used herein
as therein defined) and hereby requests, pursuant to Section 2.3 of the Agreement, that the Lender
make a Loan under the Agreement and disburse such funds as set forth in #6 below, and in that
connection sets forth below the following infonnation relating to such Loan (the "Proposed
Loan"):
*
1. The Business Day of the Proposed Loan 1s _____ , 20_ (the
"Issuance Date").
2. The principal amount of the Proposed Loan is $ ______ , which is
not greater than the Revolving Credit Exposure or the Loan Sublimit as of the Issuance
Date set forth in 1 above. After giving effect to the Proposed Loan, the aggregate principal
amount of all Loans outstanding under the Agreement will not exceed the Loan Sublimit as
of the Issuance Date, and the aggregate principal amount of all Loans and LC Exposure
outstanding under the Agreement will not exceed the Revolving Credit Exposure as of the
Issuance Date.
3. The interest rate with respect to the Proposed Loan shall be a [Base Rate
Loan *l[EurodoUarSOFR Loan l[. l[; [IN THE CASE OF A EUROD0LLARSOFR
BORROWING] the initial Interest Period shall be for [one month][three months].]
4. The undersigned hereby certifies that the following statements are true on
the date hereof, and will be true on the Issuance Date, before and after giving effect to the
Proposed Loan:
(a) The representations and wananties of the Borrower set forth in
Reimbursement Loans may only be Base Rate Loans, not Eurodollar Loans.
Article IV of the Agreement (other than in Section 4. 7 thereof) are true and correct
in all material respects ( or in the case of any representation qualified by materiality,
in all respects) on the date hereof, as if made on the date hereof;
(b) No Event of Default has occurred and is continuing; and
(c) No event or change shall be in effect or shall have occurred that
could reasonably be expected to have a Material Adverse Effect.
5. The proceeds for Proposed Loan are being used for the following purposes:
(a) To provide cash collateral to secure the Borrower's obligations
under PPAs,
(b) to repay in whole or in part any LC Disbursement under Section
2.4(d) in the case of a Reimbursement Loan*,
(c) for general corporate purposes,
(d) to pay interest accrued on any Obligations through September 30,
2021, or
(e) capital expenditures related to the development or acquisition of
new assets related to the System.
6. The Proposed Loan shall be made by the Lender by wire transfer of
immediately available funds or deposited [in the amount of $ I into Borrower's
account at the Lender in accordance with the instructions set forth in the Agreement or to or
on behalf of the Borrower in accordance with the instructions set forth below and the
Borrower hereby confirms that the Lender is authorized to make said disbursements:
[Insert wire instructions and amounts]
CLEAN ENERGY ALLIANCE
By: _______________ _
Name: --------------Title: ---------------
Reimbursement Loans may only be Base Rate Loans, not Eurodollar Loans
Approved by the Lender:
JPMORGAN CHASE BANK, N.A.
By: _____________ _
Name: -----------Title: ------------
ExmBITD-1
FORM OF LETTER OF CREDIT REQUEST
JPMorgan Chase Bank, N.A.
383 Madison Avenue, 3rd Floor
NewYork,NewYork 101 79
Mail Code: NY1-M076
Attention: ------
Ladies and Gentlemen:
______ ,20_
The undersigned refers to the Revolving Credit Agreement, dated as of February 3, 2021
(together with any amendments or supplements thereto, the "Agreement"), by and between Clean
Energy Alliance (with its successors and assigns, the "Borrower") and JPMorgan Chase Bank,
N.A. (with its successors and assigns, the "Lender") (the terms defined therein being used herein
as therein defined) and hereby requests, pursuant to Section 2.4 of the Agreement, that the Lender
issue a Letter of Credit under the Agreement, and in that connection sets forth below the following
information relating to such Letter of Credit (the "Proposed Letter of Credit"):
1. The Business Day of the Proposed Letter of Credit is _____ , 20_
(the "Issuance Date").
2. The principal amount of the Proposed Letter of Credit is
$ ______ , which is not greater than the Revolving Credit Exposure or the Letter
of Credit Sublimit as of the Issuance Date set forth in I above. After giving effect to the
Proposed Letter of Credit, the aggregate principal amount of all Letters of Credit
outstanding under the Agreement will not exceed the Letter of Credit Sublimit as of the
Issuance Date set forth in 1 above, and the aggregate principal amount of aU Loans and
Letters of Credit outstanding under the Agreement will not exceed the Revolving Credit
Exposure as of the Issuance Date set forth in 1 above.
3. The tenor of the Proposed Letter of Credit shall be ._[ ____ _,].
4. The undersigned hereby certifies that the following statements are true on
the date hereof, and will be true on the Issuance Date, before and after giving effect thereto:
(a) The representations and warranties of the Borrower set forth in
Article IV of the Agreement ( other than in Section 4. 7 thereof) are true and correct
in all material respects on the date hereof, as if made on the date hereof;
(b) No Event of Default has occurred and is continuing;
(c) No event or change shall be in effect or shall have occurred that
could reasonably be expected to have a Material Adverse Effect.
5. The undersigned hereby confirms that the Borrower has submitted a
Standby Letter of Credit Application, a form of which is on file with the Borrower and the
Lender.
CLEAN ENERGY ALLIANCE
By: _______________ _
Name: --------------Title: --------------
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EXHTBTTD-2
SHORT FORM LETTER OF CREDIT APPLICATION
TO BE PROVIDED UNDER SEPARATE COVER BY THE LENDER.
EXHTBITD-3
FORM OF COMMERCIAL & STANDBY LETTERS OF CREDIT
BETWEEN CLEAN ENERGY ALLlANCE AND JPMORGAN CHASE BANK, N.A.
(FOR CREDITS ISSUED UNDER A CREDIT AGREEMENT)
To induce JPMorgan Chase Bank, N.A. and/or any of its domestic or foreign subsidiaries
or affiliates (individually and collectively, "Bank"), to issue for the account of Applicant or for the
account of the Account Party named in the Application, one or more standby or commercial letters
of credit or other independent undertakings, from time to time at the request of the undersigned
(individually and collectively, "Applicant"; jointly and severally, if more than one), Applicant
agrees as to each letter of credit or undertaking (together with any replacements, extensions or
modifications, a "Credit, "collectively, "Credits") as follows:
All Credits issued pursuant to this Continuing Agreement (as amended, supplemented or
otherwise modified, the "Agreement") are issued under and pmsuant to the terms and conditions
of the Revolving Credit Agreement (as amended, extended, restated or otherwise modified from
time to time, and including any successor agreement to which the Bank is a party ( as a letter of
credit issuing bank) which refinances or otherwise governs the Credits, the "Credit Agreement")
dated as of among Clean Energy Alliance and JPMorgan Chase Bank, N.A. as Lender. Capitalized
terms used herein and not otherwise defined have the meaning assigned to them in the Credit
Agreement. If the Credit Agreement is terminated or expires, references in this Agreement to the
Credit Agreement shall refer to the Credit Agreement in the form it was in immediately prior to
such termination or expiration, unless otherwise agreed by Bank and Applicant. In the event of
any inconsistency between the terms and conditions of the Credit Agreement and the terms and
conditions of this Agreement, the terms and conditions of the Credit Agreement shall control,
except that provisions relating to indemnification and limitation of Bank's liability as set forth in
this Agreement shall also apply.
S ECTION 1. DEFINITIONS.
The following terms shall have the meanings set forth below:
"Application" means an in-evocable request to issue a Credit, in a form acceptable to the
Bank.
"Costs " means any and all claims, suits, judgments, costs, losses, fines, penalties,
damages, liabilities, and expenses, including reasonable and documented expert witness fees and
legal fees, charges and disbursements of any counsel for any Indemnified Person.
"Drawing Document" means any document presented for purposes of drawing under a
Credit.
"Good Faith" means honesty in fact in the conduct of the transaction concerned.
"Instructions" means each Application, any inquiries, communications and instructions
(in any form, whether oral, telephonic, written, electronic mail or transmission or facsimile)
regarding a Credit. Bank's records of the content of any Instruction shall be conclusive absent
manifest error.
"ISP" means International Standby Practices 1998 (International Chamber of Commerce
Publication No. 590) and any subsequent revision thereof adhered to by Bank on the date such
Credit is issued.
"LO ls" means steamship guarantees, releases or letters of indemnity in favor of a carrier
issued by Bank upon Instruction of Applicant as set forth on Annex I.
"Obligations" means all obligations and liabilities of Applicant to Bank in respect of any
and all Credits and LOis issued hereunder (if any), whether matured or unmatured, absolute or
contingent, now existing or hereafter incurred.
"Property" means all property of any kind whatsoever (now ex1stmg or hereafter
acquired) referred to, or relating to, an applicable Credit including, without limitation, any and all
right, title and interest of Applicant in any goods, equipment, inventory, money, documents, letters
of credit, warehouse receipts, instruments, securities, security entitlements, financial assets,
investment property, precious and base metals, chattel paper, electronic chattel paper, accounts,
commercial tort claims, deposit accounts, general intangibles (including any claims for breach of
contract, breach of warranty claims and any insurance policies and proceeds), letter of credit
rights, choses in action and the proceeds of any and all thereof (including any and all of the
aforesaid referred to in any Credit or the Drawing Documents relating thereto).
"Released Merchandise" means, with respect to a Credit, all Property released (including
pursuant to a forwarders cargo receipt or by any other means whatsoever) or consigned to
Applicant or any Person designated by Applicant in connection with such Credit or related LOI.
"Standard Letter of Credit Practice " means, for Bank, any domestic or foreign law or
letter of credit practices applicable in the city in which Bank issued the applicable Credit or for its
branch or correspondent, such laws and practices applicable in the city in which it has advised,
confirmed or negotiated such Credit, as the case may be. Such practices shall be (i) of banks that
regularly issue Credits in the particular city and (ii) required or permitted under the UCP or the
ISP, as chosen in the applicable Credit.
"UCP " means Uniform Customs and Practice for Documentary Credits 2007 Revision,
International Chamber of Commerce Publication No. 600 and any subsequent revision thereof
adhered to by Bank on the date such Credit is issued.
"UN Convention" means the United Nations Convention on Independent Guarantees and
Standby Letters of Credit.
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SECTION 2. LIMITATION OF LIABILITY; INDEMNIFICATION.
(a) Without limiting any provision of the Credit Agreement covering the limitation of
liability of the issuing bank (including any exception set forth therein), Bank and each other
Indemnitee shall not be responsible to Applicant for, and Bank's rights and remedies against
Applicant and Applicant's obligation to reimburse Bank under the Credit Agreement shall not be
impaired by: (i) honor of a presentation under any Credit which on its face substantially complies
with the terms of such Credit; (ii) honor of a presentation of any Drawing Documents which
appear on their face to have been signed, presented or issued (X) by any purported successor or
transferee of any beneficiary or other party required to sign, present or issue the Drawing
Documents or (Y) under a new name of the beneficiary; (iii) acceptance as a draft of any written or
electronic demand or request for payment under a Credit, even if nonnegotiable or not in the form
of a draft, and may disregard any requirement that such draft, demand or request bear any or
adequate reference to the Credit; (iv) the identity or authority of any presenter or signer of any
Drawing Document or the form, accuracy, genuineness, or legal effect of any presentation under
any Credit or of any Drawing Documents; (v) disregard of any non-documentary conditions stated
in any Credit; (vi) acting upon any Instruction which it, in Good Faith, believes to have been given
by a Person or entity authorized to give such Instruction; (vii) any errors, omissions, interruptions
or delays in transmission or delivery of any message, advice or document (regardless of how sent
or transmitted) or for errors in interpretation of technical terms or in translation; (viii) any delay in
giving or failing to give any notice; (ix) any acts, omissions or fraud by, or the solvency of, any
beneficiary, any nominated Person or any other Person; (x) any breach of contract between the
beneficiary and Applicant or any of the parties to the underlying transaction; (xi) assertion or
waiver of any provision of the UCP or ISP which primarily benefits an issuer of a letter of credit,
including, any requirement that any Drawing Document be presented to it at a particular hour or
place; (xii) payment to any paying or negotiating bank (designated or permitted by the terms of the
applicable Credit) claiming that it rightfully honored or is entitled to reimbursement or indemnity
under the Standard Letter of Credit Practice applicable to it; or (xiii) acting or failing to act as
required or permitted under Standard Letter of Credit Practice ( or in the case of other independent
undertakings or guarantees, the UN Convention) applicable to where it has issued, confirmed,
advised or negotiated such Credit, as the case may be.
(b) Without limiting any provision in the Credit Agreement covering the indemnification
of the issuing bank by the Applicant (including any limitation or exception set forth therein)
( "Indemnity Provisions"), such Indemnity Provisions shall apply to Bank and each related
Indemnitee notwithstanding the occurrence of any of the events specified in clause (a) of this
Section 2.
(c) If a Credit is to be governed by a law other than that of the State of New York, Bank
shall not be liable for any Costs resulting from any act or omission by Bank in accordance with the
UCP or the ISP, as applicable, and Applicant shall indemnify Bank for all such Costs.
SECTION 3. FOREIGN CURRENCY.
Unless otherwise previously agreed by the Bank, if an amount drawn under any Credit is in
non-United States dollar ( 'foreign currency"), Applicant shall reimburse Bank, on demand, the
-3-
United States dollar equivalent of such drawn amount based on the Bank's actual cost of
settlement of its obligation. Applicant's obligation to make payments in any currency (the
"Contract Currency") shall not be discharged or satisfi ed by any tender, or any recovery pursuant
to any judgment or otherwise, that is expressed in or converted into any currency other than the
Contract Currency, except to the extent that such tender or recovery results in the actual receipt by
Bank at its designated office of the full amount of the Contract Currency specified to be payable
hereunder. Applicant's obligation to make payments in the Contract Currency shall be
enforceable as an alternative or additional cause of action to the extent that such actual receipt is
less than the full amount of the Contract Currency specified to be payable hereunder, and shall not
be affected by judgment being obtained for other sums due hereunder. Applicant shall indemnify
Bank for any shortfall in such actual receipt.
SECTION 4. REPRESENTATIONS AND WARRANTIES.
Applicant hereby represents and warrants on and as of the date hereof, and the date of each
issuance, amendment, renewal and extension of a Credit, as applicable, that (i) this Agreement
constitutes the legal, valid and binding obligation of Applicant enforceable against it in accordance
with its terms; (ii) the representations and warranties set forth in the Credit Agreement are true and
con-ect; and (iii) if applicable, no goods or vessels used to transport goods related to such Credit
will be the subject of any Sanctions.
SECTION 5. REMEDIES.
If at any time there shall occur and be continuing any action for a temporary restraining
order, preliminary or permanent injunction, beneficiary wrongful dishonor action or the issuance
or commencement of any similar order, action or event in connection with any Credit or any
Drawing Document or this Agreement, which order, action or event may apply, directly or
indirectly, to Bank or which otherwise threatens to extend or increase Bank's contingent liability
beyond the time, amount or other limit provided in such Credit or this Agreement then, Applicant
shall, upon Bank's demand, deliver to Bank, as additional security for the Obligations, cash in an
amount required by Bank.
SECTION 6. ASSERTION OF RIGHTS
To the extent Bank honors a presentation for which Bank remains unpaid, Bank may assert
rights of Applicant and Applicant shall cooperate with Bank in its assertion of Applicant's rights,
if any, against the beneficiary, the beneficiary's rights against Applicant and any other rights that
Bank may have by subordination, subrogation, reimbursement, indemnity or assignment.
SECTION 7. NOTICES, S.W.I.F.T., ELECTRONIC TRANSMISSIONS.
(a) Notices. Unless otherwise provided in the Credit Agreement, notices to Bank shall be
sent to the address of Bank as set forth in the Credit and shall be delivered by hand, overnight
courier or certified mail, return receipt requested. Notices to Applicant shall be sent to the address
set forth in the Application unless advised otherwise in writing.
-4-
(b) S. W.J.F.T Bank may transmit a Credit and any amendment thereto by S.W.I.F.T.
message and thereby bind Applicant directly and as indemnitor to the S.W.l.F.T. rules.
(c) Electronic Transmissions. Bank is authorized to accept and process any Application
and any amendments, transfers, assignments of proceeds, Instructions, consents, waivers and all
documents relating to the Credit or the Application which are sent by electronic transmission using
the system provided by Bank, including S.W.l.F.T., electronic mail, facsimile or other computer
generated telecommunications ( "Electronic Transmission") and such E lectronic Transmission
shall have the same legal effect as an original and shall be binding upon and enforceable against
Applicant. Bank may, but shall not be obligated to, require authentication of such Electronic
Transmission or receipt of original documents prior to acting on such Electronic Transmission. If
it is a condition of the Credit that payment may be made upon receipt by Bank of an Electronic
Transmission advising negotiation, Applicant hereby agrees to reimburse Bank on demand for the
amount indicated in such Electronic Transmission advice, and further agrees to hold Bank
harmless if the documents fail to an·ive, or if, upon the arrival of the documents, Bank should
determine that the documents do not comply with the terms and conditions of the Credit.
SECTION 8. COMMERCIAL CREDITS.
(a) Pledge of Underlying Goods and Title Documents. As security for the payment and
performance of all obligations and liabilities of Applicant to Bank in respect of any and all
commercial Credits and LOis issued hereunder (if any) and under this Agreement, Applicant
hereby grants to Bank a continuing lien and security interest in all of Applicant's right, title and
interest in, to and under all the underlying goods relating to the commercial Credits and the title
documents evidencing such goods and all products and proceeds of the foregoing (whether now
existing or hereafter created or acquired) which have been or at any time shall be delivered to,
received by or otherwise come into the possession or control of Bank, its correspondents or
Applicant in connection with each Credit.
(b) Acceptance of Drawing Documents; No Waiver. Applicant's acceptance or retention
of a Drawing Document presented under or in connection with any Credit (whether or not the
document is genuine) or of any Released Merchandise shall ratify Bank's honor of the presentation
and preclude Applicant from raising a defense, set-off or claim with respect to Bank's honor of
such Credit. Bank shall not be required to seek any waiver of discrepancies from Applicant or to
grant any waiver of discrepancies which Applicant approves or requests.
(c) Possession of Drawing Documents. If Bank shall agree to honor (accept) Drawing
Documents under a Credit on a time draft or deferred payment basis, Applicant shall not take
possession of the Drawing Documents or the underlying Property except for the purpose of
loading, unloading, storing, shipping, transshipping, manufacturing, processing or otherwise
dealing with such Property in a manner preliminary to its sale or exchange. An Instruction to
release any such Drawing Document or Property shall be deemed a representation by Applicant to
Bank that Applicant seeks such release for one of said pmposes. In each such case, Applicant shall
apply the proceeds of Property to the Obligations relating to the applicable Credit.
(d) Absence of Written Instructions. In the absence of written instructions to the
-5-
contrary, Applicant agrees that (i) if the Credit authorizes drawings and/or shipments in
installments and any installment is not drawn and/or shipped within the period allowed for that
installment but Applicant waives such discrepancy, Bank is authorized to honor any subsequent
installments so long as documents for such installments are presented within the period allowed
for such installments; and (ii) each negotiated Credit shall expire at the counters of the nominated
person even if notice of the presentation or any documents contained in the presentation is not
received by Bank until after the expiry date of the Credit or any installment thereof.
( e) Release of Documents or Claiming of Goods from the Carrier. In the event Bank,
upon Applicant's request, agrees to deliver to Applicant, a customs broker or any other person
designated by Appli cant, any of the documents of title relating to the Credit, prior to having
received payment in full of all the Obligations, Applicant agrees to obtain possession of any goods
represented by such documents within twenty-one days after the date of delivery of such
documents, and if Applicant fails to do so, Applicant agrees to return such documents or to have
them returned to Bank prior to the expiration of the twenty-one day period. Applicant further
agrees to execute and deliver to Bank ·receipts for such documents and the goods represented
thereby identifying and describing such documents and goods. If Applicant claims from the
carrier any goods identified in the shipping documents required under the Credit (by virtue of a
steamship release, air release, letter of indemnity or any other means), with or without the
assistance of Bank, and such goods have been released to Applicant or a customs broker or agent
acting on Applicant's behalf, Applicant hereby authorizes Bank to immediately, and without
further inquiry and consideration, debit any account of Applicant in an amount equal to the fair
market value of such goods, that have been released, together with any out-of-pocket charges or
expenses owing to Bank.
S ECTION 9. STANDBY CREDITS.
(a) Installments. If the Credit is issued subject to UCP 600, unless otherwise agreed, in
the event that any installment of the Credit is not drawn within the period allowed for that
installment, the Credit may continue to be available for any subsequent installments in the sole
discretion of Bank, notwithstanding Alticle 32 of UCP 600.
(b) Auto Extend Notice. If the Credit provides for automatic extension without
amendment, Applicant agrees that it will notify Bank in writing at least thirty (30) days prior to the
last day specified in the Credit by which Bank must give notice of nonextension if Applicant
wishes the Credit not to be extended. Any decision to extend or not extend the Credit shall be in
Bank's sole discretion and judgment. Applicant hereby acknowledges that in the event Bank
notifies the beneficiary of the Credit that it has elected not to extend the Credit and the beneficiary
draws on the Credit after receiving the notice of non-extension, Applicant acknowledges and
agrees that Applicant shall have no claim or cause of action against Bank or defense against
payment under the Agreement for Bank's discretionary decision to extend or not extend the Credit.
(c) Pending Expi1y Notice. If a Credit's terms and conditions provide that Bank give
beneficiary a notice of pending expiration, Applicant agrees that it will notify Bank in writing at
least thirty (30) days prior to the last day specified in the Credit by which Bank must give such
notice of the pending expiration date. In the event Applicant fails to so notify Bank and the Credit
-6-
is extended, Applicant's Obligations under this Agreement shall continue in effect and be binding
on Applicant with regard to the Credit as so extended.
SECTION 10. W AlVER OF DEFENSE; JOINT AND SEVERAL LIABILITY.
Applicant waives any defense whatsoever which might constitute a defense available to, or
discharge of, a surety or a guarantor. If more than one Person signs this Agreement or an
Application hereunder, each of them shall be jointly and severally liable hereunder and thereunder
and all the terms and provisions regarding liabilities, obligations and Property of such Persons
shall apply to any liabilities, obligations and Property of any and all of them.
SECTION 11. TERMINATION.
This Agreement is a continuing agreement and may not be terminated by Applicant except
upon (i) thirty (30) days' prior written notice of such termination by Applicant to Bank at the
address of Bank set fotth on the most recent Credit issued hereunder, (ii) payment of all
Obligations and (iii) the expiration or cancellation of all Credits issued hereunder.
Notwithstanding the foregoing sentence, if a Credit is issued in favor of a sovereign or commercial
entity, which is to issue a guarantee or undertaking on Applicant's behalf in connection therewith,
or is issued as support for such a guarantee, Applicant shall remain liable with respect to such
Credit until Bank is fully released in writing by such entity.
SECTION 12. AMENDMENT; W AlVER.
Bank shall not be deemed to have amended or modified any term hereof, or waived any of
its rights unless Bank consents .in writing to such amendment, modification or waiver. No such
waiver, unless expressly stated therein, shall be effective as to any transaction which occurs
subsequent to such waiver, nor as to any continuance of a breach after such waiver. Bank's
consent to any amendment, modification or waiver does not mean that Bank shall consent or has
consented to any other or subsequent Instruction to amend, modify, or waive a term of this
Agreement or any Credit.
SECTION 13. COMMENCEMENT OF ACTION.
Any action or proceeding in respect of any matter arising under or in connection with
Credits, the Applications or this Agreement must be brought by Applicant against Bank within the
time period specified in Section 5-115 of the Uniform Commercial Code.
SECTION 14. JURTSDTCTTON; WAIVER OF JURY TRIAL; GOVERNING LAW.
Applicant agrees to be bound by the provisions in the Credit Agreement relating to
jurisdiction, venue, and waiver of jury trial and that such provisions shall also apply to this
Agreement. This Agreement shall be construed in accordance with and governed by the laws of
the State ofNew York.
-7-
SECTION 15. SUCCESSORS AND ASSIGNS.
The provisions of this Agreement shall be binding upon and inure to the benefit of Banlc
and Applicant and their respective successors and assigns permitted hereby, except that Appli cant
may not assign or otherwise transfer any of its rights or obligations hereunder without the prior
written consent of Bank. Nothing in this Agreement, expressed or implied, shall be construed to
confer any right or benefit upon any Person ( other than the parties hereto, the Indemnified Persons
and their respective successors and permitted assigns).
SECTION 16. COUNTERPARTS; INTEGRATION; ELECTRONIC EXECUTION.
This Agreement may be executed in counterparts (and by different parties hereto on
different counterparts), each of which shall constitute an original, but all of which when taken
together shall constitute a single contract. This Agreement and the Credit Agreement constitute
the entire contract and final agreement among the parties relating to the subj ect matter and may not
be contradicted by evidence of prior, contemporaneous, or subsequent oral agreements of the
parties. Delivery of an executed counterpart of a signature page of this Agreement by telecopy,
emailed .pdf or any other electronic means that reproduces an image of the actual executed
signature page shall be effective as delivery of a manually executed counterpart of this Agreement.
SECTION 17. SURVIVAL.
The provisions of Sections 2, 8(a), I I, 14 and 17 shall survive and remain in full force and
effect regardless of the consummation of any transactions contemplated hereby, the
reimbursement or repayment of any drawings or Obligations, the expiration or termination of the
Credits or LO ls or the termination of this Agreement or any provision hereof.
IN WITNESS WHEREOF, the Applicant hereto has caused this Agreement to be duly executed
and delivered by its respective authorized officer as of the day and year written below.
APPLICANT/OBLJGOR:
CLEAN ENERGY ALLIANCE
By: _______________ _
Name: --------------Title: --------------
-8-
ANNEX I TO CONTINUING AGREEMENT
If Bank issues an LOI or endorses a bill of lading at the instruction of Applicant or
otherwise pursuant hereto, Applicant agrees as follows:
Except as otherwise set forth in this Annex I or expressly set forth elsewhere in this
Agreement, an LOI shall be deemed issued by Bank subject to the same terms and conditions set
forth herein for Credits, including, without limitation, payment obligations, indemnification
provisions and limitations of liability benefiting Bank and other Indemnified Persons. Applicant
shall be liable for payments made under any LOI on demand and otherwise in accordance with its
absolute obligation to reimburse the Bank set forth in the Credit Agreement. Bank shall have the
right in its sole discretion and without notice to or approval of Applicant, to pay, settle or adjust
any claim or demand made against or upon Bank in connection therewith without inquiry or
detennination, on Bank's part, of the circumstances, merits or validity of any claim or demand.
Applicant shall take whatever steps are necessary to obtain the shipping documents concerning the
Released Merchandise. Upon Applicant's receipt of such shipping documents, Applicant shall
deliver them to the carrier, duly endorsed by all parties whose endorsement is required by the
carrier, and obtain from the carrier and deliver to Bank, the LOI and a release of Bank's liability to
the carrier. Bank may make payments against any drawing under the Credit related to an LOI,
whether or not the drawing shall comply with the terms and conditions of such Credit, without any
liability whatsoever to Bank. Applicant expressly acknowledges that Applicant may be required
to reimburse Bank for payments made by Bank under both the LOI and such Credit with respect to
the same Released Merchandise. Applicant shall account by delivering to Bank, immediately
upon the receipt thereof by Applicant, the proceeds of the sale of the Released Merchandise or the
documents related thereto in whatever form received (with Applicant's endorsement where
necessary) to be applied by Bank to the payment of any drawing under the Credit. If any proceeds
shall be notes, accounts, acceptances, or in any form other than cash, they shall not be applied by
Bank until paid in cash. Bank shall have the option at any time to sell or discount these items and
so apply the net proceeds, conditionally upon final payment of these items. Applicant shall pay all
charges in connection with the Released Merchandise and shall at all times hold it separate and
apart from the Property of Applicant and shall definitively show such separation in all its records
and entries. Applicant shall at all times keep the Released Merchandise fully insured at
Applicant's expense in favor of, and to the satisfaction of, Bank against loss by fire, theft, and any
other risk to which it may be subject. Applicant shall deposit the insurance policies with Bank
upon its demand. If for any reason any of such policies fail to provide for payment of the loss
thereunder to Bank as its interest may appear, Applicant hereby ( 1) assigns and makes the loss
payable under any of such policies payable to Bank as its interest may appear, (2) assigns to Bank
all of the avails and proceeds of any and all of such policies, and (3) agrees to accept such avails
and proceeds in trust for Bank and to forthwith deliver the same to Bank in the exact form received
(with the endorsement of Applicant where necessary). Bank shall have no responsibility for the
existence, quantity, quality, condition, value or delivery of any Released Merchandise or the
correctness, validity or genuineness of the documents purporting to represent Released
Merchandise.
EXHIBIT E
FORM OF ACCOUNT CONTROL AGREEMENT
EXHIBITF
FORM OF INTERCREDITORAND COLLATERAL AGENCY AGREEMENT
EXHTBITG
FORM OF SECURITY AGREEMENT
Attachment D
CHAPMAN AND CUTLER LLP
DRAFT OF l /7 /2022
AMENDED AND RESTATED FEE AGREEMENT
This AMENDED AND RESTATED FEE AGREEMENT dated January [14], 2022 (as amended,
modified or restated from time to time, this "Fee Agreement"), is by and between the CLEAN
ENERGY ALLIANCE, a public agency fom1ed under the provisions of the Joint Exercise of Powers
Act of the State of California, Government Code Section 6500 et. seq. (together with its successors
and assigns, "Borrower"), and JPMORGAN CHASE BANK, N.A. (together with its successors and
assigns, the "Lender").
Reference is made to (i) the Revolving Credit Agreement, dated as of February 3, 2021 (as
amended, modified, extended or restated from time to time, the "Agreement"), including as
amended by the First Amendment to Revolving Credit Agreement, dated as of February 26, 2021,
and the Second Amendment to Revolving Credit Agreement, dated as of January [14], 2022 (the
"Amendment"), each entered into between the Borrower and the Lender and (ii) the Fee
Agreement, dated February 3, 2021 (the "Existing Fee Agreement"), by and between the Borrower
and the Lender. Capitalized terms not otherwise defined herein have the meanings set forth in the
Agreement.
The Borrower has requested that the Bank make certain modifications to the Existing Fee
Agreement and, for the sake of clarity and convenience, the Bank and the Bonower wish to amend
and restate the Existing Fee Agreement in its entirety, and this Fee Agreement amends and restates
the Existing Fee Agreement in its entirety. The BotTower acknowledges and agrees that all fees
previously paid to the Bank under the Existing Fee Agreement were fully earned and
nonrefundable. This Fee Agreement is the Fee Agreement referenced in the Agreement and the
terms of this Fee Agreement are incorporated by reference into the Agreement. This Fee
Agreement and the Agreement are to be construed as one agreement between the Bonower and
the Lender, and all obligations hereunder are to be construed as obligations thereunder. A ll
references to amounts due and payable under the Agreement will be deemed to include all amounts,
fees and expenses payable under this Fee Agreement.
ARTICLE I
FEES
Section I .I. Undrawn Fees. The Borrower agrees to pay to the Lender, in immediately
available funds, for the period from and including the Closing Date to and including the earlier of
the Maturity Date and the date the Commitment is terminated in full (the "Commitment End
Date"), and in arrears on the first Business Day of each April , July, October and January occurring
thereafter to the Commitment End Date, and on the Commitment End Date ( each, a "Payment
Date"), a non-refundable undrawn fee (the "Undrawn Fee") in an amount equal for each day
during such calculation period to the product of (x) two hundred fifteen basis points (2.150%) per
annum (the "Undrawn Fee Rate"), (y) the Unutilized Commitment (as defined below) for such
day and (z) a fraction the numerator of which is land denominator of which is 360.
Attachment D A''0R Fee Agreement (JPMorgan-CEA 2022) (5)
4343067
The term "Unutilized Commitment" as used in this Fee Agreement means, for any day, the
number obtained by subtracting the Revolving Credit Exposure as of 5:00 p.m. New York City
time on such day from the Commitment in effect at as of 5:00 p.m. New York City time on such
day.
The Undrawn Fee shall be calculated from and including one Payment Date (or, in the case
of the first Undrawn Fee payment, the Closing Date) to but excluding the next Payment Date ( each,
a "Payment Period"), and the Lender shall provide the Borrower with an invoice for each
Undrawn Fee; provided, however, that the failure of the Lender to do so shall not relieve the
Borrower from its obligation to pay such Undrawn Fee.
Section 1.2. Letter of Credit Fees. The Borrower agrees to pay to the Lender, in
immediately available funds, for the period from and including the date of issuance of each Letter
of Credit to but excluding the date such Letter of Credit is terminated (the "LC Termination
Date"), and in arrears on the first Business Day of each April, July, October and January occurring
thereafter to the LC Termination Date, and on the LC Termination Date (each, a "LC Payment
Date"), a non-refundable undrawn fee (the "LC Facility Fee") in an amount equal for each day
during such calculation period to the product of (x) a percentage to be agreed upon in writing
between the Borrower and the Lender, (y) the stated amount of such Letter of Credit as of 5:00
p.m. New York City time on such day and (z) a fraction the numerator of which is 1 and
denominator of which is 360.
The LC Facility Fee shall be calculated from and including one LC Payment Date (or, in
the case of the initial LC Facility Fee payment in respect of a Letter of Credit, the date such Letter
of Credit is issued (unless such date of issuance is a LC Payment Date)) to but excluding the next
LC Payment Date ( each, a "LC Payment Period"), and the Lender shall provide the Borrower with
an invoice for each LC Facility Fee;provided, however, that the fai lure of the Lender to do so shall
not relieve the Borrower from its obligation to pay such LC Facility Fee.
Section 1.3. Issuance or Drawing Fees. The Borrower agrees to pay to the Lender a
non-refundable fee of $500 for each issuance or drawing under a Letter of Credit, which fee shall
be earned on the issuance or drawing date and shall be payable upon invoice on the next LC
Payment Date (or, if there is no further LC Payment Date, the LC Termination Date).
Section 1.4. Amendment Waiver or Consent Fees. The Borrower agrees to pay to the
Lender on the date on which the Borrower requests from the Lender (i) an amendment, supplement
or modification to the Agreement or any other Basic Document, (ii) a consent under, or a waiver
of any provision of, the Agreement or any other Basic Document or (iii) the transfer of any Letter
of Credit, a non-refundable fee to be dete1mined by the Lender at the time of such amendment,
supplement or modification or waiver or consent or transfer, but in any event at a minimum of
$3,000, plus, in each case, the reasonable fees and expenses of legal counsel to the Lender;
provided, however, that in the case of a simple extension with no modifications to any Basic
Document, there shall be no fee of the Lender required hereunder, though reasonable fees and
expenses of legal counsel to the Lender shall still be applicable.
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Section 1.5. Termination Fee; Reduction Fee. (a) The Borrower hereby agrees to pay to
the Lender a termination fee in connection with any termination of the Commitment by the
Borrower prior to the second anniversary of the Second Amendment Effective Date, in an amount
equal to the product of ( l) the Undrawn Fee Rate in effect on the date of such termination, (2) the
Commitment (without regard to any outstanding Loans, Letters of Credit or LC Disbursements)
and (3) a fraction, the numerator of which is equal to the number of days from and including the
date of such termination to but excluding the second anniversary of the Second Amendment
Effective Date, and the denominator of which is 360 (the "Termination Fee"), which Termination
Fee shall be paid on or before the date of such termination. No termination in full of the
Commitment shall become effective unless and until all amounts payable by the Borrower to the
Lender under the Agreement and this Fee Agreement (including without limitation the amount
payable, if any, pursuant to this Section l.5(a)) have been paid in full.
(b) The Borrower agrees not to permanently reduce the Commitment below the
Commitment in effect as of the Closing Date prior to the second anniversary of the Second
Amendment Effective Date, without the payment by the Borrower to the Lender of a reduction fee
(the "Reduction Fee ") in connection with each and every permanent reduction of the Commitment
in an amount equal to the product of (I) the Undrawn Fee Rate in effect on the date of such
permanent reduction, (2) the amount of the permanent Commitment reduction and (3) a fraction,
the numerator of which is equal to the number of days from and including the date of such
reduction to the second anniversary of the Second Amendment Effective Date, and the
denominator of which is 360. Under no circumstances shall the Borrower pe1manently reduce the
Commitment below the Revolving Credit Exposure unless in connection with such permanent
reduction the Borrower reduces the Revolving Credit Exposure (whether by prepayment of Loans
or return and cancellation of Letters of Credit) so that after giving effect to such permanent
reduction the Revolving Credit Exposure is not greater than the reduced Commitment.
Section 1.6. Applicable Margin. As used in the Agreement and this Fee Agreement, the
"Applicable Margin" means (i) with respect to a Base Rate Borrowing, two hundred forty-five
basis points (2.450%) and (ii) with respect to any other Borrowing, three hundred forty-five basis
points (3.450%).
Section 1. 7. Def ault Rate. For purposes of this Fee Agreement and the Agreement,
"Default Rate " means, with respect to any Loans (but not Letters of Credit), the then applicable
Adjusted Term SOFR Rate or Base Rate plus the Applicable Margin plus three percent (3%), and
with respect to any Letter of Credit that has not triggered a Reimbursement Loan, the then
applicable LC Facility Fee Rate plus three percent (3%).
ARTICLE II
MISCELLANEOUS
Section 2.1. Legal Fees. On the Second Amendment Effective Date, the Borrower shall
pay the reasonable legal fees and expenses of the Lender incurred in connection with the
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preparation and negotiation of the Amendment m an amount not to exceed $20,000 plus
disbursements.
Section 2.2. Amendments. No amendment to this Fee Agreement will become effective
without the prior consent of the Borrower and the Lender, which consent must be in writing and
signed by the Lender and an Authorized Representative of the Borrower.
Section 2. 3. Governing Law. THIS FEE AGREEMENT SHALL BE DEEMED TO BE A CONTRACT
UNDER, AND FOR ALL PURPOSES SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF CALIFORNIA WITHOUT GIVING EFFECT TO
CONFLICTS OF LAWS PROVISCONS; PROVIDED, THAT THE OBLIGATIONS OF THE LENDER HEREUNDER
SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO
CONFLICTS OF LAWS PROVlSIONS.
Section 2. 4. Counterparts. This Fee Agreement may be executed in counterparts in
accordance with Section 7 .11 of the Agreement, which Section 7 .11 is incorporated herein by
reference.
Section 2.5. Severability. Any provision of this Fee Agreement which is prohibited,
unenforceable or not authorized in any jurisdiction will, as to such jurisdiction, be ineffective to
the extent of such prohibition, unenforceability or non-authorization without invalidating the
remaining provisions hereof or affecting the validity, enforceability or legality of such provision
in any other jurisdiction.
Section 2.6. Amendment and Restatement. This Fee Agreement amends and restates in its
entirety the Existing Fee Agreement but is not intended to be or operate as a novation or an accord
and satisfaction of the Existing Fee Agreement or the indebtedness, obligations and liabilities of
the Borrower evidenced or provided for thereunder. The parties hereto agree that this Fee
Agreement does not extinguish or discharge the obligations of the Borrower under the Existing
Fee Agreement. Reference to this specific Fee Agreement need not be made in any agreement,
document, instrument, letter or certificate, the Existing Fee Agreement itself or any
communication issued or made pursuant to or with respect to the Existing Fee Agreement, any
reference to the Existing Fee Agreement being sufficient to refer to the Existing Fee Agreement
as amended and restated hereby, and more specifically, on or after the Second Amendment
Effective Date, any and all references to the Fee Agreement in the Agreement shall mean this Fee
Agreement.
(Signature Pages To Follow]
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IN WITNESS WHEREOF, the parties hereto have caused this Fee Agreement to be duly
executed and delivered by their respective officers or representatives thereunto duly authorized on
the date first set forth above.
CLEAN ENERGY ALLIANCE
By: _______________ _
Name: --------------Title: --------------
JPMORGAN CHASE BANK, N.A.
By: ______________ _
Name:
Title:
Allyson Goetschius
Executive Director
Signature Page to Amended and Restated Fee Agreement