Resolution No. 2026-006RESOLUTION NO. 2026-006
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF VERNON (I)
APPROVING AND AUTHORIZING THE EXECUTION AND DELIVERY OF
(A) A CLEAN ENERGY PURCHASE CONTRACT FOR PREPAID
RENEWABLE ENERGY AND (B) SUPPORTING AGREEMENTS,
CONSISTING OF SIX LIMITED ASSIGNMENTS OF EXISTING
RENEWABLE POWER PURCHASE AGREEMENTS, A CUSTODIAL
AGREEMENT, A PROJECT COORDINATION AND GOVERNANCE
AGREEMENT, AND A LETTER AGREEMENT; AND (II) AUTHORIZING
THE CITY OF VERNON’S PARTICIPATION IN THE TRANSACTIONS
CONTEMPLATED BY THE FOREGOING AGREEMENTS
SECTION 1. Recitals.
A. The City of Vernon (City) is a chartered municipal corporation of the State of
California that owns and operates a system for the generation, purchase, transmission,
distribution, and sale of electric capacity and energy.
B. The City has participated with other members of the Southern California Public
Power Authority (SCPPA) in examining alternative means by which to finance the
purchase of critically necessary renewable energy for compliance with the State’s
renewable energy requirements and to fulfill the City’s electric generation responsibilities
to its customers.
C. The City has examined and considered the advantages of utilizing a prepayment
structure through SCPPA for the financing of renewable energy.
D. The City and SCPPA each independently concluded their examinations of the
proposed renewable energy prepayment financing structure and selected a renewable
energy supplier, J. Aron & Company LLC (J. Aron), to implement the proposal.
E. In connection with such financing, the City intends to have SCPPA assign to J.
Aron certain rights and obligations, including the right and obligation to purchase
renewable energy, outlined in certain of its Power Purchase Agreements involving the
City pursuant to Power Sales Agreements between SCPPA and the City. These SCPPA
Power Purchase Agreements include the following: the Power Purchase Agreement
(Antelope DSR PPA) with Antelope DSR 1, LLC (Antelope DSR); the Power Purchase
and Sale Agreement (Astoria PPA) with Re Astoria 2 Solar LLC (Astoria); the Power
Purchase Agreement (Daggett Solar PPA) with Daggett Solar Power 2 LLC (Daggett
Solar); and the Power Purchase Agreement (Desert Harvest PPA) with Desert Harvest II
LLC (Desert Harvest). In addition, in connection with such financing, the City intends to
assign to SCPPA certain rights and obligations, including the right and obligation to
purchase renewable energy, outlined in the Confirmation Letter (BP Energy PPA)
between the City and BP Energy Company (BP Energy), and have SCPPA in turn assign
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such rights and obligations to J. Aron. The Antelope DSR PPA, the Astoria PPA, the
Daggett Solar PPA, the Desert Harvest PPA and the BP Energy PPA are collectively
referred to as the assigned PPAs.
F. A Clean Energy Purchase Contract (CPEC) between the City and SCPPA will
provide for terms under which the City will pay for and be entitled to the energy provided
by SCPPA relating to the assigned PPAs.
G. The City desires to participate in the proposed renewable energy prepayment
financing structure to finance the purchase of clean renewable energy, comply with the
State renewable energy requirements, and fulfill its responsibilities to provide reliable
electric energy and competitive rates to its customers, and desires to enter into the
Prepayment Agreements (as defined below).
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF VERNON AS FOLLOWS:
SECTION 2. The City Council of the City of Vernon hereby finds and determines
that the above recitals are true and correct.
SECTION 3. The City Council of the City of Vernon hereby finds that this action
is a purely administrative and financial transaction that would not cause either a direct
physical change in the environment or a reasonably foreseeable indirect physical
change in the environment, and therefore is not a “project” as defined in Section 21065
of the California Environmental Quality Act (CEQA) Guidelines and such activity is not
subject to CEQA under Section 15060(c)(2) and (c)(3) and Section 15378.
SECTION 4. The City Council of the City of Vernon hereby approves, in
substantially the same form, the following ten agreements (collectively, the Prepay
Agreements), each of which are on file with the City Clerk:
1. A Limited Assignment Agreement (Antelope DSR—Vernon) (Antelope
DSR LAA) among Antelope DSR, SCPPA, and J. Aron, providing for
SCPPA to assign certain of its rights and obligations to receive and pay
for renewable energy and associated resources under the Antelope
DSR PPA, which is attached hereto as Exhibit A.
2. A Limited Assignment Agreement (Astoria—Vernon) (Astoria LAA)
among Astoria, SCPPA, and J. Aron, providing for SCPPA to assign
certain of its rights and obligations to receive and pay for renewable
energy and associated resources under the Astoria PPA, which is
attached hereto as Exhibit B.
3. A Limited Assignment Agreement (Daggett—Vernon) (Daggett Solar
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LAA) among Daggett Solar, SCPPA, and J. Aron, providing for SCPPA
to assign certain of its rights and obligations to receive and pay for
renewable energy and associated resources under the Daggett Solar
PPA, which is attached hereto as Exhibit C.
4. A Limited Assignment Agreement (Desert Harvest) (Desert Harvest
LAA) among Desert Harvest, SCPPA, and J. Aron, providing for
SCPPA to assign certain of its rights and obligations to receive and pay
for renewable energy and associated resources under the Desert
Harvest PPA, which is attached hereto as Exhibit D.
5. A Limited Assignment Agreement (BP Energy—Vernon/SCPPA) (BP
Energy—Vernon/SCPPA LAA) among BP Energy, the City, and
SCPPA, assigning to SCPPA certain of the City's rights and obligations
to receive and pay for renewable energy and associated resources
under the BP Energy PPA, which is attached hereto as Exhibit E.
6. A Limited Assignment Agreement (BP Energy—SCPPA/J. Aron) (BP
Energy—SCPPA/J. Aron LAA) among BP Energy, SCPPA, and J.
Aron, assigning to J. Aron certain of SCPPA’s rights and obligations to
receive and pay for renewable energy credits under the BP Energy
PPA, which is attached hereto as Exhibit F.
7. A Clean Energy Purchase Contract with SCPPA by which SCPPA will
sell to the City at discounted prices the prepaid renewable energy and
associated resources generated by the assigned PPAs, which is
attached hereto as Exhibit G.
8. A Custodial Agreement with J. Aron and U.S. Bank Trust Company,
National Association, or selected financial institution as selected by J.
Aron, as custodian, for a term equal to the CEPC’s term, to establish
bank accounts for and administer payments to Antelope DSR, Astoria,
Daggett Solar, Desert Harvest, and BP Energy in satisfaction of
performance under their respective PPAs, which is attached hereto as
Exhibit H.
9. A Project Coordination and Governance Agreement with SCPPA and
three other participating SCPPA members (Burbank, Colton, and
Pasadena) by which SCPPA will administer this project and allocate
administrative direct costs associated with the transaction to all SCPPA
project participants, including Vernon Public Utilities, which is attached
hereto as Exhibit I.
10. A Letter Agreement with SCPPA for a term equal to the terms of the
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Antelope DSR LAA, the Astoria LAA, the Daggett Solar LAA, the Desert
Harvest LAA, and the BP Energy LAA (together, the “LAAs”), providing
that the parties may terminate the LAAs only upon certain specified
events, such as termination or suspension of performance under the
assigned PPAs or suspension or termination of performance under the
Clean Energy Purchase Contract, which is attached hereto as Exhibit
J.
SECTION 5. The City Council of the City of Vernon hereby authorizes the City
Administrator to (a) execute and deliver the Prepay Agreements to which the City is a
party in substantially the forms presented to City Council, with such changes as the City
Administrator deems necessary or advisable in furtherance of the purposes of this
resolution; (b) execute and deliver any related documents, such as amendments of any
of the Prepay Agreements or any agreements necessary to carry out the transactions
contemplated by the Prepay Agreements; and (c) take such actions as are necessary or
advisable to implement and administer the Prepay Agreements.
SECTION 6. All resolutions or parts of resolutions, not consistent with or in conflict
with this resolution, are hereby repealed.
SECTION 7. Severability. If any provision of this Resolution or the application
thereof to any person or circumstance is held invalid, such invalidity shall not affect other
provisions or applications, and to this end, the provisions of this Resolution are declared
to be severable.
SECTION 8. The City Clerk, or Deputy City Clerk, shall certify the passage and
adoption of this resolution and enter it into the book of original resolutions.
APPROVED AND ADOPTED March 3, 2026.
________________________
LETICIA LOPEZ, Mayor
ATTEST:
GENOVEVA ROCHA, City Clerk
APPROVED AS TO FORM:
ZAYNAH MOUSSA-MILWARD,
City Attorney
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CERTIFICATION
STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES ) ss.
CITY OF VERNON )
I do hereby certify that the attached is a true copy of Resolution No. 2026-006 that was
passed and adopted at the Regular Meeting held on March 3, 2026, by the following vote:
AYES: Merlo, Rivera, Ybarra, Lopez
NOES:
ABSENT: Larios
ABSTAIN:
__________________________
GENOVEVA ROCHA, City Clerk
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LIMITED ASSIGNMENT AGREEMENT
(ANTELOPE DSR VERNON)
This Limited Assignment Agreement (Antelope DSR Vernon) Assignment
Agreement Agreement [], 2025 by and among Antelope DSR 1,
LLC, a Delaware limited liability company PPA Seller Southern California Public Power
Authority, a joint powers agency and a public entity organized under the laws of the State of
California and created under the provisions of the Act and the Joint Powers Agreement PPA
Buyer J. Aron & Company LLC, a New York limited liability company ), and
PPA
as described on Appendix 1. Unless the context otherwise specifies or requires, capitalized terms
used but not defined in this Agreement have the meanings set forth in the PPA.
In consideration of the premises above and the mutual covenants and agreements herein set
forth, PPA Seller, PPA Buyer and J. Aron Parties Party
follows:
1. Limited Assignment and Delegation.
(a) PPA Buyer hereby assigns, transfers and conveys to J. Aron all right, title and interest in
and to the rights of PPA Buyer under the PPA to receive delivery of the products
Assigned Products
Assigned Product Rights All Assigned
Products shall be delivered pursuant to the terms and conditions of this Agreement during
the Assignment Period as provided in Appendix 1. All other rights of PPA Buyer under
the PPA are expressly reserved for PPA Buyer.
(b) PPA Buyer hereby delegates to J. Aron the obligation to pay the APC Contract Price for
all Assigned Products that are actually delivered to J. Aron pursuant to the Assigned
Delivered Product Payment
Obligation Assigned
Rights and Obligations
PPA are expressly retained by PPA Buyer and PPA Buyer shall be solely responsible for
any amounts due to PPA Seller that are not directly related to Assigned Products; and (ii)
the Parties acknowledge and agree that PPA Seller will only be obligated to deliver a
single consolidated invoice to PPA Buyer during the Assignment Period (with a copy to
J. Aron consistent with Section 1(d) hereof). To the extent J. Aron fails to pay the
Delivered Product Payment Obligation by the due date for payment set forth in the PPA,
notwithstanding anything in this Agreement to the contrary, PPA Buyer agrees that it
shall remain responsible for such payment and that it will be an event of Default pursuant
to Section 13.1(a) of the PPA if PPA Buyer does not make such payment within thirty
(30) days of receiving notice of such non-payment from PPA Seller.
(c) J. Aron hereby accepts and PPA Seller hereby consents and agrees to the assignment,
transfer, conveyance and delegation described in clauses (a) and (b) above. J. Aron
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hereby agrees to perform any such Assigned Rights and Obligations due from it during
the Assignment Period to the extent expressly set forth in this Agreement.
(d) All scheduling of Assigned Products and other communications related to the PPA shall
take place between PPA Buyer and PPA Seller pursuant to the terms of the PPA; provided
that during the Assignment Period (i) title to Assigned Products will pass from PPA Seller
to J. Aron upon delivery by PPA Seller of Assigned Product in accordance with the PPA;
(ii) PPA Buyer and its designee as Scheduling Coordinator under the PPA are each
hereby authorized by J. Aron to and shall act as J. Aron scheduling
Assigned Products; (iii) PPA Buyer will provide copies to J. Aron of any Force Majeure
Notice or notice of Default or default, breach or other occurrence that, if not cured within
the applicable grace period, could result in an Default contemporaneously upon delivery
thereof to PPA Seller and promptly after receipt thereof from PPA Seller; (iv) PPA Seller
will provide copies to J. Aron of the forecasts provided pursuant to Section 7.3 of the
PPA; (v) PPA Seller will provide copies to J. Aron of all invoices and supporting data
provided to PPA Buyer pursuant to Section 11.2(a) of the PPA, provided that any
payment adjustments or subsequent reconciliations to any invoice, including pursuant to
Section 11.3 of the PPA, will be resolved solely between PPA Buyer and PPA Seller and
therefore PPA Seller will not be obligated to deliver copies of any communications
relating thereto to J. Aron; and (vi) PPA Buyer and PPA Seller, as applicable, will provide
copies to J. Aron of any other information reasonably requested by J. Aron relating to
Assigned Products. Notwithstanding any other provision of this Assignment Agreement,
and solely as between PPA Buyer and J.Aron, PPA Buyer shall be entitled to retain for
its own account all amounts payable by CAISO associated with the delivery of the
Assigned Products to CAISO. Nothing in this Agreement modifies or amends any rights
or obligations of PPA Buyer and PPA Seller under the PPA with respect to CAISO
revenues and costs.
(e) PPA Seller acknowledges that (i) J. Aron intends to immediately transfer title to any
Assigned Products received from PPA Seller through one or more intermediaries such
that all Assigned Products will be ultimately delivered to the City of Vernon, and (ii) in
the event that the City of Vernon fails to pay the relevant intermediary entity for any such
Assigned Products, the receivables owed by the City of Vernon for such Assigned
City of Vernon Receivables
any such City of Vernon Receivables are transferred to J. Aron, J. Aron may transfer
such City of Vernon Receivables to PPA Seller and apply the face amount thereof as a
reduction to any Delivered Product Payment Obligation. Without prejudice to PPA
entitled to pursue collection on such City of Vernon Receivables directly against the City
of Vernon following the transfer of such City of Vernon Receivables by J. Aron to PPA
Seller; provided, however, that upon payment to PPA Seller of any such amounts by
either of PPA Buyer or the City of Vernon, PPA Seller shall have no further claim for
such amounts. J. Aron agrees to provide to PPA Seller any documentation reasonably
necessary for PPA Seller to pursue collection of such City of Vernon Receivables.
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(f) On or before the commencement of the Assignment Period, J. Aron shall cause The
Goldman Sachs Group, Inc. Guarantor to issue, in favor of PPA Seller, a guaranty
of J. Aron
form of Appendix 3 attached hereto (the Guaranty
(g) The Assigned Prepay Quantity set forth in Appendix 2 relates to obligations by and
between J. Aron and PPA Buyer and, except as otherwise expressly set forth herein, has
2. Assignment Early Termination.
(a) The Assignment Period may be terminated early upon the occurrence of any of the
following:
(1) delivery of a written notice of termination specifying a termination date by either
J. Aron or PPA Buyer to each of the other Parties hereto;
(2) delivery of a written notice of termination specifying a termination date by PPA
Seller to each of J. Aron and PPA Buyer following J. Aron
due any amounts owed to PPA Seller in respect of any Delivered Product Payment
Obligation and such payment is not made by J. Aron or PPA Buyer within thirty
(30) days following the later of receipt of written notice by J. Aron and PPA Buyer;
(3) delivery of a written notice by PPA Seller if any of the events described in the
definition of Bankruptcy in the PPA occurs with respect to J. Aron; or
(4) delivery of a written notice by J. Aron if any of the events described in the definition
of Bankruptcy in the PPA occurs with respect to PPA Seller.
(b) In the event of an early termination pursuant to Section 2(a), the Assignment Period will
end at the end of the last delivery hour on the date specified in the termination notice
provided pursuant to Section 2(a), which date shall not be earlier than the end of the last
day of the calendar month in which such notice is delivered if termination is pursuant to
clause 2(a)(1) or 2(a)(2) above. All Assigned Rights and Obligations shall revert from J.
Aron to PPA Buyer upon the early termination of the Assignment Period, provided that
(i) J. Aron shall remain responsible for the Delivered Product Payment Obligation with
respect to any Assigned Products delivered to J. Aron or for the benefit of J. Aron by
PPA Seller prior to the end of the Assignment Period, and (ii) any legal restrictions on
the effectiveness of such reversion (whether arising under bankruptcy law or otherwise)
shall not affect the early termination of the Assignment Period.
(c) The Assignment Period will automatically terminate upon the expiration or early
termination of the PPA. All Assigned Rights and Obligations shall revert from J. Aron to
PPA Buyer upon the expiration of or early termination of the PPA, provided that (i) J.
Aron shall remain responsible for the Delivered Product Payment Obligation with respect
to any Assigned Products delivered to J. Aron or for the benefit of J. Aron by PPA Seller
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prior to the end of the Assignment Period, and (ii) any legal restrictions on the
effectiveness of such reversion (whether arising under bankruptcy law or otherwise) shall
not affect the expiration or early termination of the Assignment Period.
(d) The Assignment Period will automatically terminate upon any termination of the
Guaranty. All Assigned Rights and Obligations shall revert from J. Aron to PPA Buyer
upon the termination of the Assignment Period, provided that (i) J. Aron shall remain
responsible for the Delivered Product Payment Obligation with respect to any Assigned
Products delivered to J. Aron or for the benefit of J. Aron by PPA Seller prior to the end
of the Assignment Period, and (ii) any legal restrictions on the effectiveness of such
reversion (whether arising under bankruptcy law or otherwise) shall not affect the
expiration or early termination of the Assignment Period.
3. Representations and Warranties. PPA Buyer and PPA Seller each represents and warrants
to J. Aron, with respect to itself only, that (a) the PPA is in full force and effect; (b) to the best of
its knowledge, no event or circumstance exists (or would exist with the passage of time or the
giving of notice) that would give PPA Buyer or PPA Seller the right to terminate the PPA or
suspend performance thereunder; and (c) all of its obligations under the PPA required to be
performed on or before the beginning of the Assignment Period have been fulfilled in all material
respects. PPA Seller further represents to PPA Buyer and J. Aron that it has the full power,
authority, and legal right to enter into this Assignment Agreement.
4. Notices. Any notice, demand, statement, invoice or request required or authorized by this
Assignment Agreement to be given by one Party to another Party shall be delivered in accordance
with Section 14.2 of the PPA and to the addresses of each of PPA Seller and PPA Buyer specified
in the PPA. PPA Buyer agrees to notify J. Aron of any updates to such notice information,
including any updates provided by PPA Seller to PPA Buyer. Notices to J. Aron shall be provided
to the following address, as such address may be updated by J. Aron from time to time by notice
to the other Parties:
J. Aron & Company LLC
200 West Street
New York, New York 10282-2198
Email: gs-prepay-notices@gs.com
5. Miscellaneous. Sections 12.1 (Representations and Warranties of Buyer), 14.11 (Entire
Agreement; Amendments), 14.14 (Execution in Counterparts), 14.16 (Waiver; Available
Remedies), 14.17 (Relationship of the Parties), 14.19 (Indemnification; Damage or Destruction;
Insurance; Condemnation; Limit of Liability), 14.20 (Severability), 14.21 (Confidentiality), and
14.22 (Mobile-Sierra) of the PPA are incorporated by reference into this Agreement, mutatis
mutandis, as if fully set forth herein.
6. U.S. Resolution Stay Provisions.
(a) As between J. Aron and PPA Buyer, J. Aron and PPA Buyer hereby confirm that they are
ISDA U.S. Stay Protocol
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the terms of the ISDA U.S. Stay Protocol are incorporated into and form a part of this
Assignment Agreement, and for the purposes of such incorporation, (i) J. Aron shall be
deemed to be a Regulated Entity, (ii) PPA Buyer shall be deemed to be an Adhering Party,
and (iii) this Assignment Agreement shall be deemed a Protocol Covered Agreement. In
the event of any inconsistencies between this Assignment Agreement and the ISDA U.S.
Stay Protocol, the ISDA U.S. Stay Protocol will prevail.
(b)As between J. Aron and PPA Seller:
(1) In the event that J. Aron becomes subject to a proceeding under (A) the Federal
Deposit Insurance Act and the regulations promulgated thereunder or (B) Title II
of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the
regulations promulgate U.S. Special Resolution Regime
transfer from J. Aron of this Agreement, and any interest and obligation in or under,
and any property securing, this Agreement, will be effective to the same extent as
the transfer would be effective under the U.S. Special Resolution Regime if this
Agreement, and any interest and obligation in or under, and any property securing,
this Agreement were governed by the laws of the United States or a state of the
United States.
(2) In the event that J. Aron or an Affiliate becomes subject to a proceeding under a
U.S. Special Resolution Regime, any Default Rights (as defined in 12 C.F.R. §§
Default Right
may be exercised against J. Aron are permitted to be exercised to no greater extent
than such Default Rights could be exercised under the U.S. Special Resolution
Regime if this Agreement were governed by the laws of the United States or a state
of the United States.
(3)
into Insolvency Proceedings. Notwithstanding anything to the contrary in this
Agreement, J. Aron and PPA Seller expressly acknowledge and agree that:
(i) PPA Seller shall not be permitted to exercise any Default Right with
respect to this Agreement or any Affiliate Credit Enhancement that is
related, directly or indirectly, to an Affiliate of J. Aron becoming subject
to receivership, insolvency, liquidation, resolution, or similar proceeding
Insolvency Proceeding
such Default Right would be permitted under the provisions of 12 C.F.R.
252.84, 12 C.F.R. 47.5 or 12 C.F.R. 382.4, as applicable; and
(ii) Nothing in this Agreement shall prohibit the transfer of any Affiliate
Credit Enhancement, any interest or obligation in or under such Affiliate
Credit Enhancement, or any property securing such Affiliate Credit
Enhancement, to a transferee upon or following an Affiliate of J. Aron
becoming subject to an Insolvency Proceeding, unless the transfer would
result in PPA Seller being the beneficiary of such Affiliate Credit
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Enhancement in violation of any law applicable to PPA Seller.
(4)U.S. Protocol. If PPA Seller adheres to the ISDA U.S. Stay Protocol, the terms of
the ISDA U.S. Protocol will supersede and replace the terms of this Section 6(b).
(5) Definitions. For purposes of this Section 6(b):
(i)Affiliate
U.S.C. § 1841(k); and
(ii)Credit Enhancement
arrangement in support of the obligations of J. Aron under or with respect
to this Agreement, including any guarantee, collateral arrangement
(including any pledge, charge, mortgage or other security interest in
collateral or title transfer arrangement), trust or similar arrangement, letter
of credit, transfer of margin or any similar arrangement.
7. Forward Contract. The Parties acknowledge and agree that this Agreement constitutes a
meaning of the United States Bankruptcy Code.
8. Costs and Expenses. The Parties will each pay their own costs and expenses (including legal
fees) incurred in connection with this Agreement and as a result of the negotiation, preparation,
and execution of this Agreement.
9. Governing Law, Jurisdiction, Waiver of Jury Trial.
(a)Governing Law. This Assignment Agreement and the rights and duties of the Parties
under this Assignment Agreement will be governed by and construed, enforced and
performed in accordance with the laws of the State of California, without regard to
conflicts of law principles.
(b)Jurisdiction. All judicial proceedings arising out of or relating to this Assignment
Agreement and involving J. Aron shall be brought exclusively in a federal court in the
County of Los Angeles in the State of California to the maximum extent permitted by
federal jurisdiction and otherwise in any court within the County of Los Angeles with
jurisdiction over the matter, and each Party consents to such jurisdiction.
All judicial proceedings arising out of or relating to this Assignment Agreement and
only involving PPA Buyer and PPA Seller shall be brought exclusively in a state or
federal court in the County of Los Angeles in the State of California, and each Party
consents to such jurisdiction.
The Parties irrevocably agree to submit to the exclusive jurisdiction of the respective
aforementioned courts in the State of California and waive any defense of forum non
conveniens.
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(c)Waiver of Right to Trial by Jury. Each Party waives, to the fullest extent permitted by
applicable law and provided in the PPA for disputes thereunder, any right it may have to
a trial by jury in respect of any suit, action or proceeding relating to this Assignment
Agreement.
[Remainder of Page Intentionally Blank]
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[Signature Page to Limited Assignment Agreement]
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IN WITNESS WHEREOF, the Parties have executed this Limited Assignment Agreement
(Antelope DSR Vernon) effective as of the date first set forth above.
ANTELOPE DSR 1, LLC
By:
Name:
Title:
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
By:
Name:
Title:
J. ARON & COMPANY LLC
By:
Name:
Title:
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Appendix 1
Assigned Rights and Obligations
PPA: The Power Purchase Agreement dated July 16, 2015 by and between Southern California
Public Power Authority and Antelope DSR 1, LLC, as amended from time to time.
APC Contract Price: []
Assigned Delivery Point: The Point of Delivery (as defined in the PPA).
Assignment Period means the period beginning on [] and extending until [], provided that
in no event shall the Assignment Period extend past the earlier of (i) the termination of the
Assignment Period pursuant to Section 2 of the Assignment Agreement and (ii) the end of the
Delivery Term under the PPA; provided that applicable provisions of this Agreement shall
continue in effect after termination of the Assignment Period to the extent necessary to enforce or
complete, duties, obligations or responsibilities of the Parties arising prior to the termination.
Assigned Prepay Quantity: As set forth in Appendix 2; provided that (i) all Assigned Products
shall be delivered pursuant to the Limited Assignment Agreement during the Assignment Period
as provided in Appendix 1 and (ii) the Assigned Prepay Quantity is defined for the convenience
of PPA Buyer and J. Aron and shall have no impact on the obligations of the Parties under the
Limited Assignment Agreement.
Assigned Products includes (1) 50% of Facility Energy during the Assignment Period; and (2)
Environmental Attributes associated with such 50% of Facility Energy transferred during the
Assignment Period; provided, however, that the following are expressly excluded from the
Assigned Products and any and all rights and obligations with respect to the following shall remain
with PPA Buyer: (i) 50% of Facility Energy not subject to this Agreement during the Assignment
Period, (ii) Environmental Attributes associated with such 50% of Facility Energy not subject to
this Agreement during the Assignment Period, (iii) Capacity Rights and (iv) any other products,
services and/or attributes (other than as provided in clauses (1) and (2) above) which are or can be
produced by or associated with the Facility.
Further Information: PPA Seller shall continue to transfer the WREGIS Certificates associated
with all Renewable Energy Credits corresponding to all Facility Energy under the PPA pursuant
to Section 8.4 of the PPA, provided that the transferee of such WREGIS Certificates may be
changed from time to time in accordance with the written instructions of both J. Aron and PPA
of the next calendar month, unless otherwise agreed. All Assigned Products delivered by PPA
Seller to J. Aron shall be a sale made at wholesale, with J. Aron reselling all such Assigned
Products.
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Appendix 2
Assigned Prepay Quantity
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Appendix 3
Form of GSG Guaranty
DATE
NAME
ADDRESS
Attention:
Ladies and Gentlemen:
organized under the laws of the State of Delaware, hereby unconditionally guarantees the
prompt and complete payment when due, whether by acceleration or otherwise, of all
obligations and liabilities, whether now in existence or hereafter arising, of J. Aron & Company
LLC, a subsidiary of the Guarantor and a limited liability company duly organized under the
Antelope DSR 1, LLC
arising out of or under the Limited Assignment Agreement (Antelope DSR Vernon) among the
Company, the Counterparty and Southern California Public Power Authority dated as of [],
2025. This Guaranty is one of payment and not of collection.
The Guarantor hereby waives notice of acceptance of this Guaranty and notice of any obligation
or liability to which it may apply, and waives presentment, demand for payment, protest, notice
of dishonor or non-payment of any such obligation or liability, suit or the taking of other action
by Counterparty against, and any other notice to, the Company, the Guarantor or others.
Counterparty may at any time and from time to time without notice to or consent of the
Guarantor and without impairing or releasing the obligations of the Guarantor hereunder:
(1) agree with the Company to make any change in the terms of any obligation or liability of the
Company to Counterparty, (2) take or fail to take any action of any kind in respect of any security
for any obligation or liability of the Company to Counterparty, (3) exercise or refrain from
exercising any rights against the Company or others, or (4) compromise or subordinate any
obligation or liability of the Company to Counterparty including any security therefor. Any other
suretyship defenses are hereby waived by the Guarantor.
This Guaranty shall continue in full force and effect until the opening of business on the fifth
business day after Counterparty receives written notice of termination from the Guarantor. It is
understood and agreed, however, that notwithstanding any such termination this Guaranty shall
continue in full force and effect with respect to the obligations and liabilities set forth above
which shall have been incurred prior to such termination.
The Guarantor may not assign its rights nor delegate its obligations under this Guaranty, in
whole or in part, without prior written consent of the Counterparty, and any purported
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assignment or delegation absent such consent is void, except for (i) an assignment and
Guarantor determines may be appropriate to a partnership, corporation, trust or other
and business and that assumes such obligations by contract, operation of law or otherwise, and
(ii) the Guarantor may transfer this Guaranty or any interest or obligation of the Guarantor in or
under this Guaranty, or any property securing this Guaranty, to another entity as transferee as
part of the resolution, restructuring or reorganization of the Guarantor upon or following the
Guarantor becoming subject to a receivership, insolvency, liquidation, resolution or similar
proceeding. Upon any such delegation and assumption or transfer of obligations, the Guarantor
shall be relieved of and fully discharged from all obligations hereunder, whether such
obligations arose before or after such delegation and assumption or transfer.
THIS GUARANTY SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK
WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAW.
GUARANTOR AGREES TO THE EXCLUSIVE JURISDICTION OF COURTS
LOCATED IN THE STATE OF NEW YORK, UNITED STATES OF AMERICA, OVER
ANY DISPUTES ARISING UNDER OR RELATING TO THIS GUARANTY.
In the event the Guarantor becomes subject to a proceeding under the Federal Deposit
Insurance Act or Title II of the Dodd-Frank Wall Street Reform and Consumer Protection
Act (together, the "U.S. Special Resolution Regimes"), the transfer of this Guaranty, and
any interest and obligation in or under, and any property securing, this Guaranty, from the
Guarantor will be effective to the same extent as the transfer would be effective under
such U.S. Special Resolution Regime if this Guaranty, and any interest and obligation in or
under this Guaranty, were governed by the laws of the United States or a state of the United
States. In the event the Company or the Guarantor, or any of their affiliates, becomes
subject to a U.S. Special Resolution Regime, default rights against the Company or the
Guarantor with respect to this Guaranty are permitted to be exercised to no greater extent
than such default rights could be exercised under such U.S. Special Resolution Regime if
this Guaranty was governed by the laws of the United States or a state of the United States.
Very truly yours,
THE GOLDMAN SACHS GROUP, INC.
By:
Authorized Officer
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FORM OF LIMITED ASSIGNMENT AGREEMENT
(ASTORIA [COLTON][VERNON])
This Limited Assignment Agreement (Astoria [Colton][Vernon]) Assignment
Agreement Agreement [], 2025, by and among Re Astoria 2 LLC, a
Delaware limited liability company PPA Seller Southern California Public Power Authority,
a joint powers agency and a public entity organized under the laws of the State of California and
created under the provisions of the Act and the Joint Powers Agreement PPA Buyer
J. Aron
PPA , among other parties, PPA Buyer and
PPA Seller as described on Appendix 1. Unless the context otherwise specifies or requires,
capitalized terms used but not defined in this Agreement have the meanings set forth in the PPA.
In consideration of the premises above and the mutual covenants and agreements herein set
Parties Party
follows:
1. Limited Assignment and Delegation.
(a) PPA Buyer hereby assigns, transfers and conveys to J. Aron all right, title and interest in
and to the rights of PPA Buyer under the PPA to receive delivery of the products
Assigned Products
Assigned Product Rights All Assigned
Products shall be delivered pursuant to the terms and conditions of this Agreement during
the Assignment Period as provided in Appendix 1. All other rights of PPA Buyer under
the PPA are expressly reserved for PPA Buyer.
(b) PPA Buyer hereby delegates to J. Aron the obligation to pay for all Assigned Products
that is actually delivered to J. Aron pursuant to the Assigned Product Rights during the
Delivered Product Payment Obligation
Assigned Rights and Obligations
provided that (i) all other obligations of PPA Buyer under the PPA are expressly retained
by PPA Buyer and PPA Buyer shall be solely responsible for any amounts due to PPA
Seller that are not directly related to Assigned Products; and (ii) the Parties acknowledge
and agree that PPA Seller will only be obligated to deliver a single consolidated invoice
to PPA Buyer during the Assignment Period (with a copy to J. Aron consistent with
Section 1(d) hereof). To the extent J. Aron fails to pay for any Assigned Products by the
due date for payment set forth in the PPA, PPA Buyer agrees that it will remain
responsible for such payment and that it will be a Default pursuant to Section 13.1(a) of
the PPA if PPA Buyer does not make such payment within thirty (30) days of receiving
notice of such non-payment from PPA Seller.
(c) J. Aron hereby accepts and PPA Seller hereby consents and agrees to the assignment,
transfer, conveyance and delegation described in clauses (a) and (b) above. J. Aron
hereby agrees to perform any such Assigned Rights and Obligations due from it during
the Assignment Period to the extent expressly set forth in this Agreement.
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(d) All scheduling of Assigned Products and other communications related to the PPA shall
take place pursuant to the terms of the PPA; provided that during the Assignment Period
(i) title to Assigned Products will pass from PPA Seller to J. Aron upon delivery by PPA
Seller of Assigned Products in accordance with the PPA; (ii) PPA Buyer and its designee
as Scheduling Coordinator under the PPA are each hereby authorized by J. Aron to and
shall act as J. Aron ; (iii) PPA Buyer
will provide copies to J. Aron of any Force Majeure Notice or notice of Default, or
default, breach or other occurrence that, if not cured within the applicable grace period,
could result in a Default contemporaneously upon delivery thereof to PPA Seller and
promptly after receipt thereof from PPA Seller; (iv) PPA Seller will provide copies to J.
Aron of forecasts provided pursuant to Section 7.3 of the PPA; (v) PPA Seller will
provide copies to J. Aron of all invoices and supporting data provided to PPA Buyer
pursuant to Section 11.2(a) of the PPA, provided that any payment adjustments or
subsequent reconciliations occurring after the date that is 10 days prior to the payment
due date for a monthly invoice, including pursuant to Section 11.3, will be resolved solely
between PPA Buyer and PPA Seller and therefore PPA Seller will not be obligated to
deliver copies of any communications relating thereto to J. Aron; and (vi) PPA Buyer
and PPA Seller, as applicable, will provide copies to J. Aron of any other information
reasonably requested by J. Aron relating to Assigned Products. [Notwithstanding any
other provision of this Assignment Agreement, PPA Buyer and its designee as
Scheduling Coordinator under the PPA each shall be entitled to retain for its own account
all amounts payable by CAISO to either of them associated with the delivery of the
Assigned Products to CAISO.]1
(e) PPA Seller acknowledges that (i) J. Aron intends to immediately transfer title to any
Assigned Products received from PPA Seller through one or more intermediaries such
that all Assigned Products will be ultimately delivered to [the City of Colton][the City of
Vernon], and (ii) in the event that [the City of Colton][the City of Vernon] fails to pay
the relevant intermediary entity for any such Assigned Products, the receivables owed by
[the City of Colton][the City of Vernon] [City of
Colton][City of Vernon] Receivables J. Aron. To the extent any
such [City of Colton][City of Vernon] Receivables are transferred to J. Aron, J. Aron
may transfer such [City of Colton] [City of Vernon] Receivables to PPA Seller and apply
the face amount thereof as a reduction to any Delivered Product Payment Obligation.
Section 1(b)
above, PPA Seller shall be entitled to pursue collection on such [City of Colton][City of
Vernon] Receivables directly against[City of Colton][the City of Vernon] following the
transfer of such [City of Colton][City of Vernon] Receivables by J. Aron to PPA Seller;
provided, however, that upon payment to PPA Seller of any such amounts by either of
PPA Buyer or [the City of Colton][the City of Vernon], PPA Seller shall have no further
claim for such amounts.
(f) The Assigned Prepay Quantity set forth in Appendix 2 relates to obligations by and
between J. Aron and PPA Buyer and, except as otherwise expressly set forth herein, has
1 NTD: This bracketed sentence is under review by J. Aron tax personnel.
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2. Assignment Early Termination.
(a) The Assignment Period may be terminated early upon the occurrence of any of the
following:
(1) delivery of a written notice of termination specifying a termination date by either
J. Aron or PPA Buyer to each of the other Parties;
(2) delivery of a written notice of termination specifying a termination date by PPA
due any amounts owed to PPA Seller in respect of any Delivered Product
Payment Obligation and such payment is not made by J. Aron or PPA Buyer
within thirty (30) days following the later of receipt of written notice by J. Aron
and PPA Buyer;
(3) delivery of a written notice by PPA Seller if any of the events described in the
definition of Bankruptcy in the PPA occurs with respect to J. Aron; or
(4) delivery of a written notice by J. Aron if any of the events described in the
definition of Bankruptcy in the PPA occurs with respect to PPA Seller.
(b) The Assignment Period will end at the end of last delivery hour on the date specified in
the termination notice provided pursuant to Section 2(a), which date shall not be earlier
than the end of the last day of the calendar month in which such notice is delivered if
termination is pursuant to clause 2(a)(1) or 2(a)(2) above. All Assigned Rights and
Obligations shall revert from J. Aron to PPA Buyer upon the early termination of the
Assignment Period, provided that (i) J. Aron shall remain responsible for the Delivered
Product Payment Obligation with respect to any Assigned Products delivered to J. Aron
or for the benefit of J. Aron by PPA Seller prior to the end of the Assignment Period, and
(ii) any legal restrictions on the effectiveness of such reversion (whether arising under
bankruptcy law or otherwise) shall not affect the expiration or early termination of the
Assignment Period
(c) The Assignment Period will automatically terminate upon the expiration or early
termination of the PPA. All Assigned Rights and Obligations shall revert from J. Aron to
PPA Buyer upon the expiration of or early termination of the PPA, provided that (i) J.
Aron shall remain responsible for the Delivered Product Payment Obligation with respect
to any Assigned Products delivered to J. Aron or for the benefit of J. Aron by PPA Seller
prior to the end of the Assignment Period, and (ii) any legal restrictions on the
effectiveness of such reversion (whether arising under bankruptcy law or otherwise) shall
not affect the expiration or early termination of the Assignment Period.
3. Representations and Warranties. PPA Seller and the PPA Buyer represent and warrant to
J. Aron, each with respect to itself only, that (a) the PPA is in full force and effect; (b) to the best
of its knowledge, no event or circumstance exists (or would exist with the passage of time or the
giving of notice) that would give either of them the right to terminate the PPA or suspend
performance thereunder; and (c) all of its obligations under the PPA required to be performed on
or before the Assignment Period Start Date have been fulfilled in all material respects. PPA Seller
further represents to PPA Buyer and J. Aron that it has secured all known consents to this
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Assignment Agreement that may be required by the PPA, any agreement referenced therein or any
assignment of its rights thereunder.
4. Notices. Any notice, demand, or request required or authorized by this Assignment Agreement
to be given by one Party to another Party shall be delivered in accordance with Section 14.2 of the
PPA and to the addresses of each of PPA Seller and PPA Buyer specified in the PPA. PPA Buyer
agrees to notify J. Aron of any updates to such notice information, including any updates provided
by PPA Seller to PPA Buyer. Notices to J. Aron shall be provided to the following address, as such
address may be updated by J. Aron from time to time by notice to the other Parties:
J. Aron & Company LLC
200 West Street
New York, New York 10282-2198
Email: gs-prepay-notices@gs.com
5. Miscellaneous. Sections 12.1 (Representations, Warranties and Covenants of Buyers), 14.11
(Entire Agreement; Amendments), 14.14 (Execution in Counterparts), 14.17 (Relationship of the
Parties), 14.19 (Indemnification; Damage or Destruction; Insurance; Condemnation; Limit of
Liability), 14.20 (Severability), 14.21 (Confidentiality), and 14.22 (Mobile-Sierra) of the PPA are
incorporated by reference into this Agreement, mutatis mutandis, as if fully set forth herein.
6. U.S. Resolution Stay Provisions.
(a) As between J. Aron and PPA Buyer, J. Aron and PPA Buyer hereby confirm that they
ISDA U.S. Stay
Protocol
part of this Assignment Agreement, and for the purposes of such incorporation, (i) J.
Aron shall be deemed to be a Regulated Entity, (ii) PPA Buyer shall be deemed to be an
Adhering Party, and (iii) this Assignment Agreement shall be deemed a Protocol Covered
Agreement. In the event of any inconsistencies between this Assignment Agreement and
the ISDA U.S. Stay Protocol, the ISDA U.S. Stay Protocol will prevail.
(b) As between J. Aron and PPA Seller:
(i) In the event that J. Aron becomes subject to a proceeding under (A) the Federal
Deposit Insurance Act and the regulations promulgated thereunder or (B) Title II of the
Dodd-Frank Wall Street Reform and Consumer Protection Act and the regulations
promulgate U.S. Special Resolution Regime
of this Agreement, and any interest and obligation in or under, and any property securing,
this Agreement, will be effective to the same extent as the transfer would be effective
under the U.S. Special Resolution Regime if this Agreement, and any interest and
obligation in or under, and any property securing, this Agreement were governed by the
laws of the United States or a state of the United States.
(ii) In the event that J. Aron or an Affiliate becomes subject to a proceeding under a
U.S. Special Resolution Regime, any Default Rights (as defined in 12 C.F.R. §§ 252.81,
Default Right
exercised against J. Aron are permitted to be exercised to no greater extent than such
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Default Rights could be exercised under the U.S. Special Resolution Regime if this
Agreement were governed by the laws of the United States or a state of the United States.
(iii)
into Insolvency Proceedings. Notwithstanding anything to the contrary in this
Agreement, J. Aron and PPA Seller expressly acknowledge and agree that:
(1) PPA Seller shall not be permitted to exercise any Default Right with respect
to this Agreement or any Affiliate Credit Enhancement that is related, directly
or indirectly, to an Affiliate of J. Aron becoming subject to receivership,
Insolvency
Proceeding
would be permitted under the provisions of 12 C.F.R. 252.84, 12 C.F.R. 47.5
or 12 C.F.R. 382.4, as applicable; and
(2) Nothing in this Agreement shall prohibit the transfer of any Affiliate Credit
Enhancement, any interest or obligation in or under such Affiliate Credit
Enhancement, or any property securing such Affiliate Credit Enhancement,
to a transferee upon or following an Affiliate of J. Aron becoming subject to
an Insolvency Proceeding, unless the transfer would result in PPA Seller
being the beneficiary of such Affiliate Credit Enhancement in violation of any
law applicable to PPA Seller.
(iv) U.S. Protocol. If PPA Seller adheres to the ISDA U.S. Stay Protocol, the terms of
the ISDA U.S. Protocol will supersede and replace the terms of this Section 6(b).
(v) For purposes of this Section 6(b):
(1) Affiliate
U.S.C. § 1841(k); and
(2)Credit Enhancement
arrangement in support of the obligations of J. Aron under or with respect
to this Agreement, including any guarantee, collateral arrangement
(including any pledge, charge, mortgage or other security interest in
collateral or title transfer arrangement), trust or similar arrangement, letter
of credit, transfer of margin or any similar arrangement.
7. Governing Law, Jurisdiction, Waiver of Jury Trial.
(a)Governing Law. This Assignment Agreement and the rights and duties of the Parties
under this Assignment Agreement will be governed by and construed, enforced and
performed in accordance with the laws of the State of California, without regard to
conflicts of law principles.
(b)Jurisdiction. All judicial proceedings arising out of or relating to this Assignment
Agreement and involving J. Aron shall be brought exclusively in a federal court in the
County of Los Angeles in the State of California to the maximum extent permitted by
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federal jurisdiction and otherwise in any court within the County of Los Angeles with
jurisdiction over the matter, and each Party consents to such jurisdiction.
All judicial proceedings arising out of or relating to this Assignment Agreement and only
involving PPA Buyer and PPA Seller shall be brought exclusively in a state or federal
court in the County of Los Angeles in the State of California, and each Party consents to
such jurisdiction.
The Parties irrevocably agree to submit to the exclusive jurisdiction of the respective
aforementioned courts in the State of California and waive any defense of forum non
conveniens.
(c)Waiver of Right to Trial by Jury. Each Party waives, to the fullest extent permitted by
applicable law and provided in the PPA for disputes thereunder, any right it may have to a
trial by jury in respect of any suit, action or proceeding relating to this Assignment
Agreement.
[Remainder of Page Intentionally Blank]
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IN WITNESS WHEREOF, the Parties have executed this Limited Assignment Agreement
(Astoria [Colton][Vernon]) effective as of the date first set forth above.
RE ASTORIA 2 SOLAR LLC
By:
Name:
Title:
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
By:
Name:
Title:
J. ARON & COMPANY LLC
By:
Name:
Title:
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Appendix 1
Assigned Rights and Obligations
PPA certain Power Purchase and Sale Agreement dated July 23, 2014, by and
between Re Astoria 2 LLC, Southern California Public Power Authority, Power and Water
Resources Pooling Authority, City of Lodi, City of Corona, City of Moreno Valley, and City of
Rancho Cucamonga, as amended from time to time.2
Assignment Period means the period beginning on [] and extending until [], provided that
in no event shall the Assignment Period extend past the earlier of (i) the termination of the
Assignment Period pursuant to Section 2 of the Assignment Agreement and (ii) the end of the
Delivery Term under the PPA; provided that applicable provisions of this Agreement shall
continue in effect after termination of the Assignment Period to the extent necessary to enforce or
complete, duties, obligations or responsibilities of the Parties arising prior to the termination.
Assigned Products includes (1) [9.3334%][39.9999%] of Facility Energy during the
Assignment Period; and (2) Environmental Attributes associated with such [9.3334%][39.9999%]
of Facility Energy transferred during the Assignment Period; provided, however that the following
are expressly excluded from the Assigned Products and any and all rights and obligations with
respect to the following shall remain with the PPA Buyer: (i) [90.6666%][60.0001%] of Facility
Energy not subject to this Agreement during the Assignment Period, (ii) Environmental Attributes
associated with such [90.6666%][60.0001%] of Facility Energy not subject to this Agreement
during the Assignment Period, (iii) Capacity Rights and (iv) any other capacity, products, services
and/or attributes (other than as provided in clauses (1) and (2) above) which are or can be produced
by or associated with the Facility.
Assigned Delivery Point: The Point of Delivery as defined in the PPA.
Assigned Prepay Quantity: As set forth in Appendix 2; provided that (i) all Assigned Products
shall be delivered pursuant to the Limited Assignment Agreement during the Assignment Period
as provided in Appendix 1 and (ii) the Assigned Prepay Quantity is defined for the convenience
of PPA Buyer and J. Aron and shall have no impact on the obligations of the Parties under the
Limited Assignment Agreement.
APC Contract Price: $[]/MWh
Further Information: PPA Seller shall transfer the WREGIS Certificates pursuant to Section
8.4 of the PPA, provided that the transferee of such WREGIS Certificates may be changed from
time to time in accordance with the written instructions of J. Aron and PPA Buyer upon twenty
( calendar
month after such notice period has expired, unless otherwise agreed. All Assigned Products
2 NTD: This Assignment Agreement will require the prior written consent of all the other buyers under the
PPA: PWR Pooling Authority, Lodi, Corona, Moreno Valley and Rancho Cucamonga.
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delivered by PPA Seller to J. Aron shall be a sale made at wholesale, with J. Aron reselling all such
Assigned Products.
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Appendix 2
Assigned Prepay Quantity
[NOTE: To be set forth in a monthly volume schedule.]
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4935-1631-1835v.11
LIMITED ASSIGNMENT AGREEMENT
(DAGGETT VERNON)
This Limited Assignment Agreement (Daggett Vernon) Assignment Agreement
Agreement [], 2026 by and among Daggett Solar Power 2 LLC, a
Delaware limited liability company PPA Seller Southern California Public Power
Authority, a public entity and joint powers authority formed and organized pursuant to the
California Joint Exercise of Powers Act (California Government Code Section 6500, et seq.)
PPA Buyer J. Aron & Company LLC, a New York limited liability company J.
Aron and relates to that certain Power Purchase Agreement PPA
and PPA Seller as described on Appendix 1. Unless the context otherwise specifies or requires,
capitalized terms used but not defined in this Agreement have the meanings set forth in the PPA.
In consideration of the premises above and the mutual covenants and agreements herein
set forth, PPA Seller, PPA Buyer and J. Aron (the Parties hereto; each is a Party agree as
follows:
1.Limited Assignment and Delegation.
(a) PPA Buyer hereby assigns, transfers and conveys to J. Aron all right, title and interest
in and to the rights of PPA Buyer under the PPA to receive delivery of the products
described on Appendix 1 Assigned Products
(as defined in Appendix 1), as such rights may be limited or further described in the
section on Appendix 1 (the Assigned Product Rights . All
other rights of PPA Buyer under the PPA are expressly reserved for PPA Buyer,
including the right to receive any additional quantities of products beyond the limits
set forth in Appendix 1.
(b) PPA Buyer hereby delegates to J. Aron the obligation to pay the APC Contract Price
for all Assigned Products that are actually delivered to J. Aron pursuant to the
Assigned Product Rights during the Assignment Period (the Delivered Product
Payment Obligation and together with the Assigned Product Rights, collectively
Assigned Rights and Obligations ; provided that (i) all other obligations of
PPA Buyer under the PPA are expressly retained by PPA Buyer and PPA Buyer shall
be solely responsible for any amounts due to PPA Seller that are not directly related
to the Assigned Products; and (ii) the Parties acknowledge and agree that (A) PPA
Seller will only be obligated to deliver a single consolidated invoice to PPA Buyer
during the Assignment Period (with a copy to J. Aron consistent with Section 1(d)
hereof) and (B) J. Aron and PPA
Period shall be administered by a custodian who will transfer to PPA Seller on each
payment due date the amounts paid by J. Aron and PPA Buyer with respect to each
invoice (and it is anticipated that the custodian will consolidate the amounts received
from J. Aron and PPA Buyer and make a single wire transfer to PPA Seller with
respect to each invoice). To the extent J. Aron fails to pay the Delivered Product
Payment Obligation by the due date for payment set forth in the PPA, notwithstanding
anything in this Agreement to the contrary, PPA Buyer agrees that it shall have the
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option to make such payment, and that it will be a Default pursuant to Section 13.1(a)
of the PPA if PPA Buyer does not make such payment, within twenty (20) days of
receiving notice of such non-payment from PPA Seller. Notwithstanding the
administration of payment obligations by a custodian, PPA Buyer and Limited
Assignee shall be liable for their respective payment obligations in accordance with
the terms and conditions of the PPA and this Agreement, including for any failure to
receive payment from such custodian by the applicable payment due date.1
(c)J. Aron hereby accepts and PPA Seller hereby consents and agrees to the assignment,
transfer, conveyance and delegation described in clauses (a) and (b) above.
(d) All scheduling of Assigned Products and other communications related to the PPA
shall take place pursuant to the terms of the PPA; provided that during the
Assignment Period (i) title to Assigned Products will pass from PPA Seller to J. Aron
upon delivery by PPA Seller of Assigned Products in accordance with the PPA; (ii)
PPA Buyer and its designee as Scheduling Coordinator under the PPA are each
scheduling Assigned Products; (iii) PPA Buyer will provide copies to J. Aron of any
notice of a Force Majeure event or event of Default or default, breach or other
occurrence that, if not cured within the applicable grace period, could result in an
event of Default contemporaneously upon delivery thereof to PPA Seller and
promptly after receipt thereof from PPA Seller; (iv) PPA Buyer will provide copies
to J. Aron of forecasts that PPA Buyer receives pursuant to Section 7.3 of the PPA;
(v) PPA Seller will provide copies to J. Aron of all invoices and supporting data
relating to the Assigned Products provided by PPA Seller pursuant to Section 11.3(a)
of the PPA; provided that any payment adjustments or subsequent reconciliations
occurring after the date that is ten (10) Business Days prior to the payment due date
for a monthly invoice, including pursuant to Section 11.4 of the PPA, will be resolved
solely between PPA Buyer and PPA Seller and therefore PPA Seller will not be
obligated to deliver copies of any communications relating thereto to J. Aron; and
(vi) PPA Buyer will provide copies to J. Aron of any other information reasonably
requested by J. Aron relating to Assigned Products. Notwithstanding any other
provision of this Assignment Agreement, PPA Buyer and its designee as Scheduling
Coordinator under the PPA each shall be entitled to retain for its own account all
amounts payable by CAISO to either of them associated with the delivery of the
Assigned Products to CAISO.
(e) PPA Seller acknowledges that (i) J. Aron intends to immediately transfer title to any
Assigned Products received from PPA Seller through one or more intermediaries
such that all Assigned Products will be ultimately delivered to the City of Vernon,
and (ii) in the event that the City of Vernon fails to pay the relevant intermediary
entity for any such Assigned Products, the receivables owed by the City of Vernon
City of Vernon Receivables
J.Aron. To the extent any such City of Vernon Receivables are transferred to J. Aron,
1 Note to Clearway: The deviations from Clearway precedent in this provision are necessary to conform with the
underlying PPA.
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J. Aron may transfer such City of Vernon Receivables to PPA Seller and apply the
face amount thereof as a reduction to any Delivered Product Payment Obligation.
above, PPA Seller shall be entitled to pursue collection on such City of Vernon
Receivables directly against the City of Vernon following the transfer of such City
of Vernon Receivables by J. Aron to PPA Seller; provided, however, that upon
payment to PPA Seller of any such amounts by either of PPA Buyer or the City of
Vernon, PPA Seller shall have no further claim for such amounts.2
(f)On or before the commencement of the Assignment Period, J. Aron shall cause The
Goldman Sachs Group, Inc., a Delaware corporation Guarantor , to issue, in
favor of PPA Seller, a guaranty of J. Aron payment obligations under this
Assignment Agreement, substantially in the form of Appendix 3 attached hereto (the
Guaranty
(g)The Assigned Prepay Quantity set forth in Appendix 2 relates to obligations by and
between J. Aron and PPA Buyer and, except as otherwise expressly set forth herein,
2.Assignment Early Termination.
(a) The Assignment Period may be terminated early upon the occurrence of any of the
following:
(1) delivery of a written notice of termination specifying a termination date by
either J. Aron or PPA Buyer to each of the other Parties;
(2) delivery of a written notice of termination specifying a termination date by PPA
Seller to each of J. Aron and PPA Buyer following J. Aron failure to pay
when due any amounts owed to PPA Seller in respect of any Delivered Product
Payment Obligation and such payment is not made by J. Aron or PPA Buyer
within twenty (20) days following the later of receipt of written notice by J.
Aron and PPA Buyer;3
(3) delivery of a written notice by PPA Seller if any of the events described in the
definition of Bankruptcy in the PPA occurs with respect to J. Aron or
Guarantor;4 or
(4) delivery of a written notice by J. Aron if any of the events described in the
definition of Bankruptcy in the PPA occurs with respect to PPA Seller or PPA
2 Note to Clearway: The deviations from Clearway precedent in this provision are necessary to revised to reflect that
the City of Vernon, and not SCPPA itself, will ultimately receive the Assigned Products under the LAA and pay for
such products pursuant to the prepay transaction.
3 Note to Clearway: The deviations from Clearway precedent in this provision are necessary to conform with the
underlying PPA.
4 Note to Clearway: The deviations from Clearway precedent in this provision are necessary to conform with the
underlying PPA.
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Buyer.5
(b) The Assignment Period will end at the end of the last delivery hour on the date
specified in the termination notice provided pursuant to Section 2(a), which date shall
not be earlier than the end of the last day of the calendar month in which such notice
is delivered if termination is pursuant to clause 2(a)(1) or 2(a)(2) above. All Assigned
Rights and Obligations shall revert from J. Aron to PPA Buyer upon the early
termination of the Assignment Period, provided that (i) J. Aron shall remain
responsible for the Delivered Product Payment Obligation with respect to any
Assigned Products delivered to J. Aron or for the benefit of J. Aron by PPA Seller
prior to the end of the Assignment Period, and (ii) any legal restrictions on the
effectiveness of such reversion (whether arising under bankruptcy law or otherwise)
shall not affect the expiration or early termination of the Assignment Period.6
(c) The Assignment Period will automatically terminate upon the expiration or early
termination of the PPA. All Assigned Rights and Obligations shall revert from J.
Aron to PPA Buyer upon the expiration of or early termination of the PPA, provided
that (i) J. Aron shall remain responsible for the Delivered Product Payment
Obligation with respect to any Assigned Products delivered to J. Aron or for the
benefit of J. Aron by PPA Seller prior to the end of the Assignment Period, and (ii)
any legal restrictions on the effectiveness of such reversion (whether arising under
bankruptcy law or otherwise) shall not affect the expiration or early termination of
the Assignment Period.
(d) The Assignment Period will automatically terminate upon delivery by Guarantor to
PPA Seller of a notice of any termination of the Guaranty. All Assigned Rights and
Obligations shall revert from J. Aron to PPA Buyer upon the termination of the
Assignment Period, provided that (i) J. Aron shall remain responsible for the
Delivered Product Payment Obligation with respect to any Assigned Products
delivered to J. Aron or for the benefit of J. Aron by PPA Seller prior to the end of the
Assignment Period, and (ii) any legal restrictions on the effectiveness of such
reversion (whether arising under bankruptcy law or otherwise) shall not affect the
expiration or early termination of the Assignment Period.
3. Representations and Warranties. PPA Seller and PPA Buyer represent and warrant to J.
Aron, each with respect to itself only, that (a) the PPA is in full force and effect; (b) to the best of
its knowledge, no event or circumstance exists (or would exist with the passage of time or the
giving of notice) that would give either of them the right to terminate the PPA or suspend
performance thereunder; and (c) all of its obligations under the PPA required to be performed on
or before the date hereof have been fulfilled. PPA Seller further represents to PPA Buyer and J.
Aron that it has secured all known consents to this Assignment Agreement that may be required
5 Note to Clearway: The deviations from Clearway precedent in this provision are necessary to conform with the
underlying PPA.
6 Note to Clearway: The added reversion language in this provision aligns with Sections 2(c) and 2(d).
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by the PPA, any agreement referenced therein or any assignment of its rights thereunder.7
4.Notices. Any notice, demand, or request required or authorized by this Assignment Agreement
to be given by one Party to another Party shall be delivered in accordance with Section 14.2 of the
PPA and to the addresses of each of PPA Seller and PPA Buyer specified in the PPA. PPA Buyer
agrees to notify J. Aron of any updates to such notice information. Notices to J. Aron shall be
provided to the following address, as such address may be updated by J. Aron from time to time
by notice to the other Parties:
J. Aron & Company LLC
200 West Street
New York, New York 10282-2198
Email: gs-prepay-notices@gs.com
5.Miscellaneous. Sections 12.1 (Representations and Warranties of Buyer), 14.11 (Entire
Agreement; Amendments), 14.14 (Execution in Counterparts), 14.17 (Relationship of the
Parties), 14.20 (Severability), 14.21 (Confidentiality), and 14.22 (Mobile-Sierra) of the PPA are
incorporated by reference into this Agreement, mutatis mutandis, as if fully set forth herein.8
6. U.S. Resolution Stay Provisions.
9
(a) As between J. Aron and PPA Buyer, J. Aron and PPA Buyer hereby confirm that they
ISDA U.S. Stay
Protocol
part of this Assignment Agreement, and for the purposes of such incorporation, (i) J.
Aron shall be deemed to be a Regulated Entity, (ii) PPA Buyer shall be deemed to be an
Adhering Party, and (iii) this Assignment Agreement shall be deemed a Protocol Covered
Agreement. In the event of any inconsistencies between this Assignment Agreement and
the ISDA U.S. Stay Protocol, the ISDA U.S. Stay Protocol will prevail.
(b) As between J. Aron and PPA Seller:
(i) In the event that J. Aron becomes subject to a proceeding under (A) the Federal
Deposit Insurance Act and the regulations promulgated thereunder or (B) Title II of the
Dodd-Frank Wall Street Reform and Consumer Protection Act and the regulations
U.S. Special Resolution Regime J. Aron
of this Agreement, and any interest and obligation in or under, and any property securing,
this Agreement, will be effective to the same extent as the transfer would be effective
under the U.S. Special Resolution Regime if this Agreement, and any interest and
obligation in or under, and any property securing, this Agreement were governed by the
laws of the United States or a state of the United States.
7 Note to Clearway: The representation regarding consent ensures that PPA Seller has obtained the necessary
permissions to enter into this Agreement.
8 Note to Clearway: The deviations from Clearway precedent in this provision are necessary to conform with the
underlying PPA.
9 Note to Clearway: J. Aron prefers to use the long-form U.S. Resolution Stay Provisions.
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(ii) In the event that J. Aron or an Affiliate becomes subject to a proceeding under a
U.S. Special Resolution Regime, any Default Rights (as defined in 12 C.F.R. §§ 252.81,
Default Right
exercised against J. Aron are permitted to be exercised to no greater extent than such
Default Rights could be exercised under the U.S. Special Resolution Regime if this
Agreement were governed by the laws of the United States or a state of the United States.
(iii)
into Insolvency Proceedings. Notwithstanding anything to the contrary in this
Agreement, J. Aron and PPA Seller expressly acknowledge and agree that:
(1) PPA Seller shall not be permitted to exercise any Default Right with respect
to this Agreement or any Affiliate Credit Enhancement that is related, directly
or indirectly, to an Affiliate of J. Aron becoming subject to receivership,
Insolvency
Proceeding
would be permitted under the provisions of 12 C.F.R. 252.84, 12 C.F.R. 47.5
or 12 C.F.R. 382.4, as applicable; and
(2) Nothing in this Agreement shall prohibit the transfer of any Affiliate Credit
Enhancement, any interest or obligation in or under such Affiliate Credit
Enhancement, or any property securing such Affiliate Credit Enhancement,
to a transferee upon or following an Affiliate of J. Aron becoming subject to
an Insolvency Proceeding, unless the transfer would result in PPA Seller
being the beneficiary of such Affiliate Credit Enhancement in violation of any
law applicable to PPA Seller.
(iv) U.S. Protocol. If PPA Seller adheres to the ISDA U.S. Stay Protocol, the terms of
the ISDA U.S. Protocol will supersede and replace the terms of this Section 6(b).
(v) For purposes of this Section 6(b):
(1) Affiliate
U.S.C. § 1841(k); and
(2)Credit Enhancement
arrangement in support of the obligations of J. Aron under or with respect
to this Agreement, including any guarantee, collateral arrangement
(including any pledge, charge, mortgage or other security interest in
collateral or title transfer arrangement), trust or similar arrangement, letter
of credit, transfer of margin or any similar arrangement.
7. Forward Contract. The Parties acknowledge and agree that this Agreement constitutes a
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meaning of the United States Bankruptcy Code.10
8. Costs and Expenses. The Parties will each pay their own costs and expenses (including legal
fees) incurred in connection with this Agreement and as a result of the negotiation, preparation,
and execution of this Agreement.11
9.Governing Law, Jurisdiction, Waiver of Jury Trial.12
(a)Governing Law. This Assignment Agreement and the rights and duties of the Parties
under this Assignment Agreement will be governed by and construed, enforced and
performed in accordance with the laws of the State of California, without regard to
conflicts of law principles. The Parties irrevocably agree to submit to the exclusive
jurisdiction of such courts in the State of California and waive any defense of forum non
conveniens.
(b)Jurisdiction. All judicial proceedings arising out of or relating to this Assignment
Agreement and involving J. Aron shall be brought exclusively in a federal court in the
County of Los Angeles in the State of California to the maximum extent permitted by
federal jurisdiction and otherwise in any court within the County of Los Angeles with
jurisdiction over the matter, and each Party consents to such jurisdiction.
All judicial proceedings arising out of or relating to this Assignment Agreement and
only involving PPA Buyer and PPA Seller shall be brought exclusively in a state or
federal court in the County of Los Angeles in the State of California, and each Party
consents to such jurisdiction.
The Parties irrevocably agree to submit to the exclusive jurisdiction of the respective
aforementioned courts in the State of California and waive any defense of forum non
conveniens.
(c)Waiver of Right to Trial by Jury. Each Party waives, to the fullest extent permitted by
applicable law and provided in the PPA for disputes thereunder, any right it may have to
a trial by jury in respect of any suit, action or proceeding relating to this Assignment
Agreement.
[Remainder of Page Intentionally Blank]
10 Note to Clearway: J. Aron prefers to keep this provision.
11 Note to Clearway: SCPPA prefers to keep this provision.
12 Note to Clearway: The deviations from Clearway precedent in this section are necessary to conform with the
underlying PPA.
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IN WITNESS WHEREOF, the Parties have executed this Limited Assignment Agreement
(Daggett Vernon) effective as of the date first set forth above.
DAGGETT SOLAR POWER 2 LLC
By:
Name:
Title:
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
By:
Name:
Title:
J. ARON & COMPANY LLC
By:
Name:
Title:
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4935-1631-1835v.11
Appendix 113
Assigned Rights and Obligations
PPA: The Power Purchase Agreement, dated June 24, 2022 by and between Southern California
Public Power Authority, a public entity and joint powers authority formed and organized pursuant
to the California Joint Exercise of Powers Act (California Government Code Section 6500, et seq.),
and Daggett Solar Power 2 LLC, a Delaware limited liability company as amended, amended and
restated, supplemented or otherwise modified from time to time.
Assignment Period means the period beginning on [] and extending until [], provided
that in no event shall the Assignment Period extend past the earlier of (i) the termination of the
Assignment Period pursuant to Section 2 of the Assignment Agreement and (ii) the end of the
Delivery Term under the PPA; provided that applicable provisions of this Agreement shall continue
in effect after termination of the Assignment Period to the extent necessary to enforce or complete,
duties, obligations or responsibilities of the Parties arising prior to the termination.
Assigned Products includes (1) 92.31% of Delivered Energy during the Assignment Period, and
(2) Environmental Attributes associated with such 92.31% of Delivered Energy transferred during
the Assignment Period; provided, however that the following are expressly excluded from the
Assigned Products and any and all rights and obligations with respect to the following shall remain
with the PPA Buyer: (i) 7.69% of Delivered Energy not subject to this Agreement during the
Assignment Period, (ii) Environmental Attributes associated with such 7.69% of Delivered Energy
not subject to this Agreement during the Assignment Period, (iii) Capacity Rights and (iv) any other
capacity, products, services and/or attributes (other than as provided in clauses (1) and (2) above)
which are or can be produced by or associated with the Facility.
Assigned Prepay Quantity: As set forth in Appendix 2; provided that (i) all Assigned Products shall
be delivered pursuant to the Assignment Agreement during the Assignment Period as provided in this
Appendix 1, and (ii) the Assigned Prepay Quantity is defined for the convenience of PPA Buyer and
J. Aron and shall have no impact on the obligations of the PPA Seller under the Assignment
Agreement.
Further Information: PPA Seller shall continue to transfer to PPA Buyer the WREGIS Certificates
associated with all Renewable Energy Credits corresponding to all Delivered Energy under the PPA
pursuant to Section 8.4 of the PPA. All Assigned Products delivered by PPA Seller to J. Aron shall
be a sale made at wholesale, with J. Aron reselling all such Assigned Products.
13 Note to Clearway: The deviations from Clearway precedent in this appendix are necessary to conform with the
underlying PPA.
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4935-1631-1835v.11
Appendix 2
Assigned Prepay Quantity
[NOTE: To be set forth in a monthly volume schedule.]
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4935-1631-1835v.11
Appendix 3
Form of GSG Guaranty
DATE
NAME
ADDRESS
Attention:
Ladies and Gentlemen:
under the laws of the State of Delaware, hereby unconditionally guarantees the prompt and complete
payment when due, whether by acceleration or otherwise, of all obligations and liabilities, whether
now in existence or hereafter arising, of J. Aron & Company LLC, a subsidiary of the Guarantor
and a limited liability company duly organized under the laws of the State of New York (the
Daggett Solar Power 2 LLC
Assignment Agreement (Daggett Vernon), by and among the Company, the Counterparty and the
Southern California Public Power Authority, dated as of ________ [], 2025. This Guaranty is one
of payment and not of collection.
The Guarantor hereby waives notice of acceptance of this Guaranty and notice of any obligation or
liability to which it may apply, and waives presentment, demand for payment, protest, notice of
dishonor or non-payment of any such obligation or liability, suit or the taking of other action by
Counterparty against, and any other notice to, the Company, the Guarantor or others.
Counterparty may at any time and from time to time without notice to or consent of the Guarantor
and without impairing or releasing the obligations of the Guarantor hereunder: (1) agree with the
Company to make any change in the terms of any obligation or liability of the Company to
Counterparty, (2) take or fail to take any action of any kind in respect of any security for any
obligation or liability of the Company to Counterparty, (3) exercise or refrain from exercising any
rights against the Company or others, or (4) compromise or subordinate any obligation or liability
of the Company to Counterparty including any security therefor. Any other suretyship defenses are
hereby waived by the Guarantor.
This Guaranty shall continue in full force and effect until the opening of business on the fifth (5th)
business day after Counterparty receives written notice of termination from the Guarantor. It is
understood and agreed, however, that notwithstanding any such termination this Guaranty shall
continue in full force and effect with respect to the obligations and liabilities set forth above which
shall have been incurred prior to such termination.
The Guarantor may not assign its rights nor delegate its obligations under this Guaranty, in whole
or in part, without prior written consent of the Counterparty, and any purported assignment or
delegation absent such consent is void, except for (i) an assignment and delegation of all of the
Resolution No. 2026-006
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appropriate to a partnership, corporation, trust or other organization in whatever form that succeeds
siness and that assumes such obligations
by contract, operation of law or otherwise, and (ii) the Guarantor may transfer this Guaranty or any
interest or obligation of the Guarantor in or under this Guaranty, or any property securing this
Guaranty, to another entity as transferee as part of the resolution, restructuring or reorganization of
the Guarantor upon or following the Guarantor becoming subject to a receivership, insolvency,
liquidation, resolution or similar proceeding. Upon any such delegation and assumption or transfer
of obligations, the Guarantor shall be relieved of and fully discharged from all obligations
hereunder, whether such obligations arose before or after such delegation and assumption or
transfer.
THIS GUARANTY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT GIVING
EFFECT TO PRINCIPLES OF CONFLICTS OF LAW. GUARANTOR AGREES TO THE
EXCLUSIVE JURISDICTION OF COURTS LOCATED IN THE STATE OF NEW YORK,
UNITED STATES OF AMERICA, OVER ANY DISPUTES ARISING UNDER OR
RELATING TO THIS GUARANTY.
In the event the Guarantor becomes subject to a proceeding under the Federal Deposit Insurance
Act or Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act (together,
the "U.S. Special Resolution Regimes"), the transfer of this Guaranty, and any interest and
obligation in or under, and any property securing, this Guaranty, from the Guarantor will be
effective to the same extent as the transfer would be effective under such U.S. Special
Resolution Regime if this Guaranty, and any interest and obligation in or under this Guaranty,
were governed by the laws of the United States or a state of the United States. In the event the
Company or the Guarantor, or any of their affiliates, becomes subject to a U.S. Special
Resolution Regime, default rights against the Company or the Guarantor with respect to this
Guaranty are permitted to be exercised to no greater extent than such default rights could be
exercised under such U.S. Special Resolution Regime if this Guaranty was governed by the
laws of the United States or a state of the United States.
Very truly yours,
THE GOLDMAN SACHS GROUP, INC.
By:
Authorized Officer
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LIMITED ASSIGNMENT AGREEMENT
(DESERT HARVEST [BURBANK][VERNON])
This Limited Assignment Agreement (Desert Harvest [Burbank][Vernon]) (this
Assignment Agreement Agreement [], 2025, by and among Desert
Harvest II LLC, a [] PPA Seller Southern California Public Power Authority, a joint powers
agency and a public entity organized under the laws of the State of California PPA Buyer
J. Aron
PPA
on Appendix 1. Unless the context otherwise specifies or requires, capitalized terms used but not
defined in this Agreement have the meanings set forth in the PPA.
In consideration of the premises above and the mutual covenants and agreements herein set
Parties Party
follows:
1. Limited Assignment and Delegation.
(a) PPA Buyer hereby assigns, transfers and conveys to J. Aron all right, title and interest in
and to the rights of PPA Buyer under the PPA to receive delivery of the products
described in Appendix 1 (the Assigned Products
Assigned Product Rights All Assigned
Products shall be delivered pursuant to the terms and conditions of this Agreement during
the Assignment Period as provided in Appendix 1. All other rights of PPA Buyer under
the PPA are expressly reserved for PPA Buyer.
(b) PPA Buyer hereby delegates to J. Aron the obligation to pay for all Assigned Products
that are actually delivered to J. Aron pursuant to the Assigned Product Rights during the
Delivered Product Payment Obligation
Assigned Rights and Obligations
provided that (i) all other obligations of PPA Buyer under the PPA are expressly retained
by PPA Buyer and PPA Buyer shall be solely responsible for any amounts due to PPA
Seller that are not directly related to Assigned Products; and (ii) the Parties acknowledge
and agree that PPA Seller will only be obligated to deliver a single consolidated invoice
to PPA Buyer during the Assignment Period (with a copy to J. Aron consistent with
Section 1(d) hereof). To the extent J. Aron fails to pay the Delivered Product Payment
Obligation by the due date for payment set forth in the PPA, notwithstanding anything in
this Agreement to the contrary, PPA Buyer agrees that it shall remain responsible for
payment and performance of all of its obligations under the PPA during the Assignment
Period, including in the event that J. Aron does not perform the Delivered Product
Payment Obligation as described above and such failure by either PPA Buyer or J. Aron
will be an Event of Default pursuant to have the option to make such payment and that it
will be a Default under Section 13.1(a) of the PPA if PPA Buyer does not make such
payment within thirty (30) days of receiving notice of such nonpayment of receiving
notice of such non-payment from PPA Seller.
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(c) J. Aron hereby accepts and PPA Seller hereby consents and agrees to the assignment,
transfer, conveyance and delegation described in clauses (a) and (b) above. J. Aron
hereby agrees to perform any such Assigned Rights and Obligations due from it during
the Assignment Period to the extent expressly set forth in this Agreement.
(d) All scheduling of Assigned Products and other communications related to the PPA shall
take place pursuant to the terms of the PPA; provided that during the Assignment Period
(i) title to Assigned Product will pass from PPA Seller to J. Aron upon delivery by PPA
Seller of Assigned Product at the Point of Delivery in accordance with the PPA; (ii) PPA
Buyer and its designee as Scheduling Coordinator under the PPA are each hereby
authorized by J. Aron to and shall act as J. Aron ng
Assigned Products; (iii) PPA Buyer will provide copies to J. Aron of any Force Majeure
Notice or Default or default, breach or other occurrence that, if not cured within the
applicable grace period, could result in a Default contemporaneously upon delivery
thereof to PPA Seller and promptly after receipt thereof from PPA Seller; (iv) PPA Seller
will provide copies to J. Aron of the forecasts of available capacity and Facility Energy
provided pursuant to Section 7.3(b) of the PPA; (iv) PPA Seller will provide copies to J.
Aron of all invoices and supporting data provided to PPA Buyer pursuant to Section
11.2(a) of the PPA, provided that any payment adjustments or subsequent reconciliations
occurring after the date that is 10 days prior to the payment due date for a monthly
invoice, including pursuant to Section 11.3 of the PPA, will be resolved solely between
PPA Buyer and PPA Seller and therefore PPA Seller will not be obligated to deliver
copies of any communications relating thereto to J. Aron; and (v) PPA Buyer and PPA
Seller, as applicable, will provide copies to J. Aron of any other information reasonably
requested by J. Aron relating to Assigned Products.
(e) PPA Seller acknowledges that (i) J. Aron intends to immediately transfer title to any
Assigned Products received from PPA Seller through one or more intermediaries such
that all Assigned Products will be ultimately delivered to [the City of Burbank][the City
of Vernon], and (ii) in the event that [the City of Burbank] [the City of Vernon] fails to
pay the relevant intermediary entity for any such Assigned Products, the receivables
owed by [the City of Burbank][the City of Vernon] [City
of Burbank][City of Vernon Receivables]J. Aron. To the
extent any such [City of Burbank][City of Vernon] Receivables are transferred to J. Aron,
J. Aron may transfer such [City of Burbank][City of Vernon] Receivables to PPA Seller
and apply the face amount thereof as a reduction to any Delivered Product Payment
Obligation.
Section 1(b) above, PPA Seller shall be entitled to pursue collection on such [City of
Burbank][City of Vernon] Receivables directly against [the City of Burbank][the City of
Vernon] following the transfer of such [City of Burbank][City of Vernon] Receivables
by J. Aron to PPA Seller; provided, however, that upon payment to PPA Seller of any
such amounts by either of PPA Buyer or [the City of Burbank][the City of Vernon], PPA
Seller shall have no further claim for such amounts.
(f) On or before the commencement of the Assignment Period, J. Aron shall cause The
Guarantor to issue, in favor of PPA Seller, a guaranty
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form of Appendix 3 attached hereto (the Guaranty
(g) Nothing in this Agreement modifies or amends any rights or obligations of PPA Buyer
and PPA Seller under the PPA with respect to CAISO revenues and costs. For additional
clarity and specifically and without limitation PPA Seller is entitled to retain all CAISO
revenues in its account and provide PPA Buyer with corresponding credit offsets
pursuant to Section 7.2 of the PPA.
(h) The Assigned Prepay Quantity set forth in Appendix 2 relates to obligations by and
between J. Aron and PPA Buyer and, except as otherwise expressly set forth herein, has
2. Assignment Early Termination.
(a) The Assignment Period may be terminated early upon the occurrence of any of the
following:
(1) delivery of a written notice of termination specifying a termination date by either
J. Aron or PPA Buyer to each of the other Parties;
(2) delivery of a written notice of termination specifying a termination date by PPA
due any amounts owed to PPA Seller in respect of any Delivered Product
Payment Obligation and such payment is not made by J. Aron or PPA Buyer
within thirty (30) days following the later of receipt of written notice by J. Aron
and PPA Buyer;
(3) delivery of a written notice by PPA Seller if any of the events described in the
definition of Bankruptcy in the PPA occurs with respect to J. Aron;
(4) delivery of a written notice by J. Aron if any of the events described in the
definition of Bankruptcy in the PPA occurs with respect to PPA Seller; or
(5) Guarantor disavows its obligations under the Guaranty or Guarantor fails to cause
the Guaranty to be maintained in full force and effect and such disavowal or
failure continues for thirty (30) days after receipt of written notice of such
disavowal or failure and J. Aron has not delivered to PPA Seller another guaranty,
bank bond or letter of credit in a form reasonably acceptable to PPA Seller to
replace the Guaranty.
(b) The Assignment Period will end at the end of the last delivery hour on the date specified
in the termination notice provided pursuant to Section 2(a), which date shall not be earlier
than the end of the last day of the calendar month in which such notice is delivered if
termination is pursuant to clause 2(a)(1) or 2(a)(2) above. All Assigned Rights and
Obligations shall immediately and automatically revert from J. Aron to PPA Buyer upon
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the early termination of the Assignment Period, provided that, as between J. Aron and
to PPA Buyer (including those
described in Section 1(b) above), (i) J. Aron shall remain responsible for the Delivered
Product Payment Obligation with respect to any Assigned Product delivered to J. Aron
or for the benefit of J. Aron by PPA Seller prior to the end of the Assignment Period, and
(ii) any legal restrictions on the effectiveness of such reversion (whether arising under
bankruptcy law or otherwise) shall not affect the expiration or early termination of the
Assignment Period.
(c) The Assignment Period will automatically terminate upon the expiration or early
termination of the PPA. All Assigned Rights and Obligations shall immediately and
automatically revert from J. Aron to PPA Buyer upon the expiration of or early
termination of the PPA, provided that, as between J. Aron and PPA Seller and without
clause 1(b)
above), (i) J. Aron shall remain responsible for the Delivered Product Payment
Obligation with respect to any Assigned Product delivered to J. Aron or for the benefit
of J. Aron by PPA Seller prior to the end of the Assignment Period, and (ii) any legal
restrictions on the effectiveness of such reversion (whether arising under bankruptcy law
or otherwise) shall not affect the expiration or early termination of the Assignment
Period.
(d) The Assignment Period will automatically terminate upon delivery by Guarantor of a
notice of termination of the Guaranty. All Assigned Rights and Obligations shall
immediately and automatically revert from J. Aron to PPA Buyer upon the termination
of the Assignment Period, provided that, as between J. Aron and PPA Seller and without
described in Section
1(b) above), (i) J. Aron shall remain responsible for the Delivered Product Payment
Obligation with respect to any Assigned Product delivered to J. Aron or for the benefit
of J. Aron by PPA Seller prior to the end of the Assignment Period, and (ii) any legal
restrictions on the effectiveness of such reversion (whether arising under bankruptcy law
or otherwise) shall not affect the expiration or early termination of the Assignment
Period.
3. Representations and Warranties. PPA Seller and the PPA Buyer represent and warrant to J.
Aron, each with respect to itself only, that (a) the PPA is in full force and effect; (b) to the best of
its knowledge, no event or circumstance exists (or would exist with the passage of time or the
giving of notice) that would give either of them the right to terminate the PPA or suspend
performance thereunder; and (c) all of its obligations under the PPA required to be performed on
or before the Assignment Period Start Date have been fulfilled in all material respects. PPA Seller
further represents to PPA Buyer and J. Aron that it has secured all known consents to this
Assignment Agreement that may be required by the PPA, any agreement referenced therein or any
assignment of its rights thereunder.
4. Notices. Any notice, demand, or request required or authorized by this Assignment Agreement
to be given by one Party to another Party shall be delivered in accordance with Section 14.2 of the
PPA and to the addresses of each of PPA Seller and PPA Buyer specified in the PPA. PPA Buyer
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agrees to notify J. Aron of any updates to such notice information, including any updates provided
by PPA Seller to PPA Buyer. Notices to J. Aron shall be provided to the following address, as such
address may be updated by J. Aron from time to time by notice to the other Parties:
J. Aron & Company LLC
200 West Street
New York, New York 10282-2198
Email: gs-prepay-notices@gs.com
5. Miscellaneous. Sections 12.1 (Representations and Warranties of Buyer), 14.11 (Entire
Agreement; Amendments), 14.14 (Execution in Counterparts), 14.17 (Relationship of the Parties),
14.19 (Indemnification; Damage or Destruction; Insurance; Condemnation; Limit of Liability),
14.20 (Severability), 14.21 (Confidentiality), and 14.22 (Mobile-Sierra) of the PPA are
incorporated by reference into this Agreement, mutatis mutandis, as if fully set forth herein.
6. U.S. Resolution Stay Provisions. As between J. Aron and PPA Buyer, J. Aron and PPA Buyer
hereby confirm that they are adherents to the ISDA 2018 U.S. Resolution ISDA
U.S. Stay Protocol
part of this Agreement, and for the purposes of such incorporation, (i) J. Aron shall be deemed to
be a Regulated Entity, (ii) PPA Buyer shall be deemed to be an Adhering Party, and (iii) this
Agreement shall be deemed a Protocol Covered Agreement. As between J. Aron and PPA Buyer,
in the event of any inconsistencies between this Agreement and the ISDA U.S. Stay Protocol, the
ISDA U.S. Stay Protocol will prevail.
7. Governing Law, Jurisdiction, Waiver of Jury Trial.
(a)Governing Law. This Assignment Agreement and the rights and duties of the Parties
under this Assignment Agreement will be governed by and construed, enforced and
performed in accordance with the laws of the State of California, without regard to
conflicts of law principles.
(b)Jurisdiction. All judicial proceedings arising out of or relating to this Assignment
Agreement and involving J. Aron shall be brought exclusively in a federal court in the
County of Los Angeles in the State of California to the maximum extent permitted by
federal jurisdiction and otherwise in any court within the County of Los Angeles with
jurisdiction over the matter, and each Party consents to such jurisdiction.
All judicial proceedings arising out of or relating to this Assignment Agreement and
only involving PPA Buyer and PPA Seller shall be brought exclusively in a state or
federal court in the County of Los Angeles in the State of California, and each Party
consents to such jurisdiction.
The Parties irrevocably agree to submit to the exclusive jurisdiction of the respective
aforementioned courts in the State of California and waive any defense of forum non
conveniens.
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(c)Waiver of Right to Trial by Jury. Each Party waives, to the fullest extent permitted by
applicable law and provided in the PPA for disputes thereunder, any right it may have to
a trial by jury in respect of any suit, action or proceeding relating to this Assignment
Agreement.
8. Forward Contract. The Parties acknowledge and agree that this Agreement constitutes a
the meaning of the United States Bankruptcy Code.
[Remainder of Page Intentionally Blank]
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IN WITNESS WHEREOF, the Parties have executed this Limited Assignment Agreement
(Desert Harvest [Burbank][Vernon]) effective as of the date first set forth above.
DESERT HARVEST II LLC
By:
Name:
Title:
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
By:
Name:
Title:
J. ARON & COMPANY LLC
By:
Name:
Title:
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Appendix 1
Assigned Rights and Obligations
PPA certain Power Purchase Agreement dated February 26, 2018, by and between
Desert Harvest II LLC and Southern California Public Power Authority, as amended from time to
time.
Assignment Period means the period beginning on [] and extending until [], provided that
in no event shall the Assignment Period extend past the earlier of (i) the termination of the
Assignment Period pursuant to Section 2 of the Assignment Agreement and (ii) the end of either
the Delivery Term under the PPA or the PPA; provided that applicable provisions of this
Agreement shall continue in effect after termination of the Assignment Period to the extent
necessary to enforce or complete, duties, obligations or responsibilities of the Parties arising prior
to the termination.
Assigned Product includes (1) [31.42857%][17.14286%] of Facility Energy during the
Assignment Period; and (2) Environmental Attributes associated with such
[31.42857%][17.14286%] of Facility Energy transferred during the Assignment Period; provided,
however that the following are expressly excluded from Assigned Products and any and all rights
and obligations with respect to the following shall remain with the PPA Buyer: (i)
[68.57143%][82.85714%] of Facility Energy not subject to this Agreement; (ii) Environmental
Attributes associated with such [68.57143%][82.85714%] of Facility Energy not subject to this
Agreement; (iii) Capacity Rights and (iv) any other capacity, products, services and/or attributes
which are or can be produced by or associated with the Facility.
Further Information: PPA Seller shall continue to transfer of the WREGIS Certificates
associated with all Renewable Energy Credits corresponding to all Facility Energy under the PPA
pursuant to Section 8.4 of the PPA, provided that the transferee of such WREGIS Certificates
may be changed from time to time in accordance with the written instructions of both J. Aron and
as of the first
day of the next calendar month, unless otherwise agreed. All Assigned Product delivered by PPA
Seller to J. Aron shall be a sale made at wholesale, with J. Aron reselling all such Assigned Product.
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Appendix 2
Assigned Prepay Quantity
[NOTE: To be set forth in a monthly volume schedule.]
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Appendix 3
Form of GSG Guaranty
DATE
NAME
ADDRESS
Attention:
Ladies and Gentlemen:
organized under the laws of the State of Delaware, hereby unconditionally guarantees the
prompt and complete payment when due, whether by acceleration or otherwise, of all
obligations and liabilities, whether now in existence or hereafter arising, of J. Aron & Company
LLC, a subsidiary of the Guarantor and a limited liability company duly organized under the
Desert Harvest II LLC
arising out of or under the Limited Assignment Agreement (Desert Harvest
[Burbank][Vernon]) among the Company, the Counterparty and Southern California Public
Power Authority dated as of [], 2025. This Guaranty is one of payment and not of collection.
The Guarantor hereby waives notice of acceptance of this Guaranty and notice of any obligation
or liability to which it may apply, and waives presentment, demand for payment, protest, notice
of dishonor or non-payment of any such obligation or liability, suit or the taking of other action
by Counterparty against, and any other notice to, the Company, the Guarantor or others.
Counterparty may at any time and from time to time without notice to or consent of the
Guarantor and without impairing or releasing the obligations of the Guarantor hereunder:
(1) agree with the Company to make any change in the terms of any obligation or liability of the
Company to Counterparty, (2) take or fail to take any action of any kind in respect of any security
for any obligation or liability of the Company to Counterparty, (3) exercise or refrain from
exercising any rights against the Company or others, or (4) compromise or subordinate any
obligation or liability of the Company to Counterparty including any security therefor. Any other
suretyship defenses are hereby waived by the Guarantor.
This Guaranty shall continue in full force and effect until the opening of business on the fifth
business day after Counterparty receives written notice of termination from the Guarantor. It is
understood and agreed, however, that notwithstanding any such termination this Guaranty shall
continue in full force and effect with respect to the obligations and liabilities set forth above
which shall have been incurred prior to such termination.
The Guarantor may not assign its rights nor delegate its obligations under this Guaranty, in
whole or in part, without prior written consent of the Counterparty, and any purported
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assignment or delegation absent such consent is void, except for (i) an assignment and
Guarantor determines may be appropriate to a partnership, corporation, trust or other
and business and that assumes such obligations by contract, operation of law or otherwise, and
(ii) the Guarantor may transfer this Guaranty or any interest or obligation of the Guarantor in or
under this Guaranty, or any property securing this Guaranty, to another entity as transferee as
part of the resolution, restructuring or reorganization of the Guarantor upon or following the
Guarantor becoming subject to a receivership, insolvency, liquidation, resolution or similar
proceeding. Upon any such delegation and assumption or transfer of obligations, the Guarantor
shall be relieved of and fully discharged from all obligations hereunder, whether such
obligations arose before or after such delegation and assumption or transfer.
THIS GUARANTY SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK
WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAW.
GUARANTOR AGREES TO THE EXCLUSIVE JURISDICTION OF COURTS
LOCATED IN THE STATE OF NEW YORK, UNITED STATES OF AMERICA, OVER
ANY DISPUTES ARISING UNDER OR RELATING TO THIS GUARANTY.
In the event the Guarantor becomes subject to a proceeding under the Federal Deposit
Insurance Act or Title II of the Dodd-Frank Wall Street Reform and Consumer Protection
Act (together, the U.S. Special Resolution Regimes ), the transfer of this Guaranty, and
any interest and obligation in or under, and any property securing, this Guaranty, from the
Guarantor will be effective to the same extent as the transfer would be effective under
such U.S. Special Resolution Regime if this Guaranty, and any interest and obligation in or
under this Guaranty, were governed by the laws of the United States or a state of the United
States. In the event the Company or the Guarantor, or any of their affiliates, becomes
subject to a U.S. Special Resolution Regime, default rights against the Company or the
Guarantor with respect to this Guaranty are permitted to be exercised to no greater extent
than such default rights could be exercised under such U.S. Special Resolution Regime if
this Guaranty was governed by the laws of the United States or a state of the United States.
Very truly yours,
THE GOLDMAN SACHS GROUP, INC.
By:
Authorized Officer
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LIMITED ASSIGNMENT AGREEMENT
(BP ENERGY COMPANY VERNON/SCPPA)
This Limited Assignment Agreement (BP ENERGY COMPANY Vernon/SCPPA) (this
Assignment Agreement [] by and among BP Eenrgy Company, a
Delaware corporation PPA Seller ; The City of Vernon, a chartered California municipal
corporation Vernon PPA Buyer ); and the Southern California Public Power Authority, a
public entity and joint powers authority formed and organized pursuant to the California Joint
Exercise of Powers Act (California Government Code section 6500, et seq.) SCPPA . This
Assignment Agreement relates to that certain Confirmation entered into
by and between Vernon and PPA Seller on September 16, 2025, as amended from time to time,
which supplements, forms a part of and is subject to that certain Western Systems Power Pool
Agreement, dated October 31, 2024, by and between PPA Buyer and PPA Seller, as amended from
time to time ) (the Confirmation and the Master Agreement, collectively
PPA , and to the Limited Assignment Agreement (BP Energy Company SCPPA/J. Aron)
of even date herewith SCPPA Assignment Agreement among PPA Seller, SCPPA and J.
J. Aron , further transferring
the rights and obligations assigned, transferred, and conveyed hereby. Unless the context
otherwise specifies or requires, capitalized terms used but not defined in this Assignment
Agreement have the meanings set forth in the PPA.
In consideration of the mutual covenants and agreements herein set forth, PPA Seller,
Vernon, and SCPPA Parties Party
1. Limited Assignment.
(a) Effective on the date on which this Assignment Agreement is fully executed by the Parties
, Vernon hereby assigns, transfers, and conveys to SCPPA, and SCPPA
hereby accepts and assumes, all of Vernon right, title and interest in and to its rights
under the PPA to receive delivery of the products described in Assigned
Products , as such rights are
further
1 Assigned Product Rights and subject to the following additional terms of this
Section 1.
(b) Vernon hereby delegates to SCPPA the obligation to purchase the Assigned Products and
pay the APC Contract Price (as defined in Appendix 1) for all Assigned Products that are
actually delivered to or for the account of SCPPA or its assigns pursuant to the Assigned
Product Rights during the Assignment Period Delivered Product Payment
Obligation Assigned
Rights and Obligations the CAISO Credit (as defined in the
Confirmation) shall be deemed credited to Vernon for SCPPA
delivered Assigned Products, and provided further that the Parties acknowledge and agree
that PPA Seller will be obligated to deliver a single, consolidated invoice to Vernon during
the Assignment Period and shall simultaneously deliver copies thereof to J. Aron and
SCPPA. Vernon expressly retains all of its other rights and obligations under the PPA.
Vernon agrees that it will remain responsible for all payments due to PPA Seller pursuant
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to the Delivered Product Payment Obligation within two (2) Business Days (as defined in
the Master Agreement) of receiving notice (as provided in Section 22.1(a) of the Master
Agreement) of non-payment from PPA Seller.
(c) All scheduling of Assigned Products under the PPA shall continue to take place between
Vernon and PPA Seller pursuant to the terms of the PPA; provided that (i) title to Assigned
Products will pass from PPA Seller to SCPPA or its assigns upon delivery
of Project Energy in accordance with the PPA; (ii) Vernon will provide copies to SCPPA
and its assigns of any notice of an Uncontrollable Force (as defined in the PPA) event or
an Event of Default or default, breach, or other occurrence that if not cured within the
applicable grace period could result in an Event of Default, which must be provided
contemporaneously with any delivery of such Notice to PPA Seller and, as applicable, any
collateral assignee or promptly after receipt thereof from PPA Seller; (iii) PPA Seller will
provide copies to SCPPA and its assigns of all invoices and supporting data that it provides
to Vernon pursuant to Section 9 of the Master Agreement and Sections 15, 26, and 28 of
the Confirmation, provided that any payment adjustments or subsequent reconciliations
occurring after the date that is ten (10) days prior to the payment due date for an invoice
will be resolved solely between Vernon and PPA Seller, and therefore PPA Seller will not
be obligated to deliver copies of any communications relating thereto to SCPPA or its
assigns; and (iv) Vernon and PPA Seller, as applicable, will provide copies to SCPPA and
its assigns of any other information reasonably requested by SCPPA or its assigns relating
to Assigned Products.
(d) PPA Seller hereby consents and agrees to the assignment, transfer, conveyance and
delegation described in clauses (a) and (b) above, and SCPPA accepts the same, subject
to the terms and limitations of this Assignment Agreement.
(e) The Assigned Prepay Quantity set forth in Appendix 2 relates to rights and obligations
by and among J. Aron, SCPPA, and Vernon and, except as otherwise expressly set forth
herein,
2. Assignment Early Termination.
(a) The Assignment Period shall terminate early upon the occurrence of any of the following:
(1) delivery of a written Notice of termination by either Vernon or SCPPA to each
of the other Parties hereto;
(2) delivery of a written Notice of termination by PPA Seller to Vernon, SCPPA, and
J. Aron following any failure to pay when due any amounts owed to PPA Seller
pursuant to the Delivered Product Payment Obligation, and such failure continues
for two (2) Business Days (as defined in the Master Agreement) following the
receipt of notice from PPA Seller pursuant to Section 22.1(a) of the Master
Agreement;
(3) delivery of a written Notice by PPA Seller or Vernon to each of the other Parties
to this Agreement and J. Aron if any of the events described in Section 22.1(c) of
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the Master Agreement occurs with respect to SCPPA or J. Aron as though SCPPA
or J. Aron were a party to the PPA; or
(4) delivery of a written Notice by SCPPA or Vernon to each of the other Parties to
this Agreement and J. Aron if any of the events described in Section 22.1(c) of
the Master Agreement occurs with respect to PPA Seller.
(b) In the event of an early termination pursuant to Section 2(a), the Assignment Period will
end at the end of the last delivery hour on the date specified in the termination Notice
provided pursuant to Section 2(a), which date shall not be earlier than the end of the last
day of the calendar month in which such Notice is delivered if termination is pursuant to
clause 2(a)(1) above. All Assigned Rights and Obligations shall immediately revert to
Vernon, without further action by the Parties, upon the early termination of the
Assignment Period, provided that (i) SCPPA and its assigns shall remain responsible for
the Delivered Product Payment Obligation with respect to any Assigned Products
delivered by PPA Seller prior to the end of the Assignment Period, and (ii) any legal
restrictions on the effectiveness of such reversion (whether arising under bankruptcy law
or otherwise) shall not affect the expiration or early termination of the Assignment Period.
(c) The Assignment Period will automatically terminate upon (i) the early termination of the
PPA or (ii) the termination of the SCPPA Assignment Agreement, and, in each case, all
Assigned Rights and Obligations shall immediately revert to Vernon, without further
action by the Parties, upon the early termination of the PPA or the SCPPA Assignment
Agreement, as applicable, provided that (i) SCPPA and its assigns shall remain
responsible for the Delivered Product Payment Obligation with respect to any Assigned
Products delivered by PPA Seller prior to the end of the Assignment Period, and (ii) any
legal restrictions on the effectiveness of such reversion (whether arising under bankruptcy
law or otherwise) shall not affect the expiration or early termination of the Assignment
Period.
3. Representations and Warranties. PPA Seller and Vernon represent and warrant to SCPPA
and its assigns that (a) the PPA is in full force and effect; (b) no known event or circumstance
presently exists that would give either PPA Seller or Vernon the right to terminate the PPA or
suspend performance thereunder; and (c) all of their respective obligations under the PPA
required to be performed on or before the date hereof have been fulfilled. PPA Seller further
represents to Vernon, SCPPA, and its assigns that it has secured all known consents to this
Assignment Agreement that may be required by the PPA, any agreement referenced therein,
or any assignment of its rights thereunder.
4. Miscellaneous. Sections 11 (Waivers), 21.1 (Liability and Damages), , 39 (Amendments)
(provided that no consent or approval by SCPPA shall be required in order to amend the PPA),
40 (Execution by Counterparts) of the Master Agreement and Section 18 of the Confirmation
(Governing Law) are incorporated by reference into this Assignment Agreement, mutatis
mutandis, as if fully set forth herein. For the avoidance of doubt, J.Aron shall be a SCPPA
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assign upon execution and delivery of the SCPPA Assignment Agreement for the duration of
the Assignment Period.
5. Notices. Any notice, demand, or request required or authorized by this Assignment Agreement
to be given by one Party to another Party shall be in writing and shall either be sent by email
transmission (to the extent the intended receiving Party has provided an email address for
notices sent pursuant to this Section 5), courier, or personal delivery (including overnight
delivery service) to each of the notice recipients and addresses (including email addresses, if
applicable) specified in this Section 5 for the receiving Party. Any such notice, demand, or
request shall be deemed to be given (a) when actually received if delivered by email
transmission or (b) when actually received if delivered by courier or personal delivery
(including overnight delivery service). Each Party shall have the right, upon ten (10)
prior written notice to the other Parties, to change its list of notice recipients and addresses set
forth below.
If to SCPPA:
Southern California Public Power Authority
Attention: Executive Director
1160 Nicole Court
Glendora, CA 91740
Email: ExecutiveDirector@scppa.org
If to J. Aron:
J. Aron & Company LLC
200 West Street
New York, New York 10282-2198
Email: gs-prepay-notices@gs.com
If to Vernon:
[]
If to PPA Seller:
[]
6. Governing Law, Jurisdiction, and Waiver of Jury Trial.
(a)Governing Law. This Assignment Agreement and the rights and duties of the Parties
under this Assignment Agreement shall be governed by and construed, enforced and
performed in accordance with the laws of the State of California, without regard to
conflicts of law principles.
(b)Jurisdiction. The Parties agree that any litigation arising out of or relating to this
Assignment Agreement shall be brought exclusively in a state or federal court located in
the County of Orange in the State of California, and each Party consents to such
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jurisdiction. The Parties irrevocably agree to submit to such exclusive jurisdiction and
waive any defense of forum non conveniens.
(c)Waiver of Right to Jury Trial. Each Party waives, to the fullest extent permitted by
applicable law and provided in the PPA for disputes thereunder, any right it may have to a
trial by jury in respect of any suit, action or proceeding relating to this Assignment
Agreement.
7. Further Assignments. Except as provided in the SCPPA Assignment Agreement, SCPPA and
J. Aron are prohibited from further transferring to third parties the rights and obligations
assigned, transferred, and conveyed hereby without first obtaining the express, written
approval of Pasedena and PPA Seller.
[Remainder of Page Intentionally Blank]
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IN WITNESS WHEREOF, the Parties have executed this Limited Assignment Agreement
(BP Energy Company Vernon/SCPPA) effective as of the date first set forth above.
BP ENERGY COMPANY
By:
Name:
Title:
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
By:
Name:
Title:
THE CITY OF VERNON
By:
Name:
Title:
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APPENDIX 1
Assignment Schedule
APC Contract Price: Energy Price + REC Price.
Assignment Period: The period beginning on the Effective Date of this Assignment Agreement
and extending through and until December 31, 2035, provided that in no event shall the
Assignment Period extend past the earlier of (i) the termination of the Assignment Period pursuant
to Section 2 of the Assignment Agreement and (ii) the end of the Delivery Term under the PPA;
provided that applicable provisions of this Assignment Agreement shall continue in effect after
termination of the Assignment Period to the extent necessary to enforce or complete, duties,
obligations, or responsibilities of the Parties arising prior to the termination.
Assigned Products: (1) Project Energy delivered during the Assignment Period; and (2) Green
Attributes (including but not limited to Portfolio Content Category 1 RECs) associated with such
Project Energy transferred during the Assignment Period.
Further Information/Limitations: PPA Seller shall continue to transfer WREGIS Certificates
associated with all Green Attributes corresponding to all Project Energy under the PPA to Vernon,
provided that the transferee of such WREGIS Certificates may be changed from time to time in
r written consent, which change shall be effective as of the
first day of the next calendar month, unless otherwise agreed. All Assigned Products delivered by
PPA Seller to SCPPA and its assigns shall be a sale made at wholesale, with SCPPA and its assigns
reselling all such Assigned Products.
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APPENDIX 2
Assigned Prepay Quantity
[NOTE: To be set forth in a monthly volume schedule.]
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LIMITED ASSIGNMENT AGREEMENT
(BP ENERGY COMPANY SCPPA/J. ARON)
This Limited Assignment Agreement (BP Energy Company SCPPA/J. Aron) (this
Assignment Agreement [] by and among BP Energy Company, a
Delaware corporation PPA Seller the Southern California Public Power Authority, a public
entity and joint powers authority formed and organized pursuant to the California Joint Exercise
of Powers Act (California Government Code section 6500, et seq.) SCPPA , and J. Aron &
J. Aron . This Assignment Agreement
relates to that certain confirmation letter Confirmation entered into by and between The City
of Vernon, a chartered California municipal corporation Vernon PPA Buyer ), and PPA
Seller on September 16, 2025, as amended from time to time, which supplements, forms a part of
and is subject to that certain Western Systems Power Pool Agreement, dated October 31, 2024, by
and between PPA Buyer and PPA Seller, as amended from time to time )
(the Confirmation and the Master Agreement, collectively PPA and to the Limited
Assignment Agreement (BP Energy Company Vernon/SCPPA) of even date herewith (the
Vernon Assignment Agreement , SCPPA and Vernon, transferring to
SCPPA the rights and obligations assigned, transferred, and conveyed hereby. Unless the context
otherwise specifies or requires, capitalized terms used but not defined in this Assignment
Agreement have the meanings set forth in the PPA.
In consideration of the mutual covenants and agreements herein set forth, PPA Seller,
SCPPA Parties Party
1. Limited Assignment.
(a) Effective on the date on which this Assignment Agreement is fully executed by the
Parties, SCPPA hereby assigns, transfers and conveys to J. Aron, and J. Aron hereby
, title and interest in and to its rights under the
Vernon Assignment Agreement to receive delivery of the products described in
Assigned Products during the Assignment Period (as defined in
Appendix 1), as such rights are limited and further described in Section 1 of the Vernon
Assignment Agreement and Appendix 1 to the Vernon Assigned
Product Rights All Assigned Products shall be delivered pursuant to the terms and
conditions of this Assignment Agreement during the Assignment Period as defined in
Appendix 1. All other rights of Vernon under the PPA are expressly reserved for Vernon
as provided in the Vernon Assignment Agreement.
(b) SCPPA hereby delegates to J. Aron, and J. Aron assumes, the obligation to purchase the
Assigned Products and pay the APC Contract Price (as defined in Appendix 1) for all
Assigned Products that are actually delivered to or for the account of J. Aron pursuant to
Delivered Product
Payment Obligation , together with the Assigned Product Rights, collectively the
Assigned Rights and Obligations , provided that the CAISO Credit (as defined in the
Confirmation) shall be deemed credited to SCPPA
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delivered Assigned Products, and provided further that the Parties acknowledge and
agree that PPA Seller will be obligated to deliver a single, consolidated invoice to Vernon
during the Assignment Period and shall deliver simultaneously copies thereof to J. Aron
and SCPPA. All other rights and obligations of Vernon under the PPA are expressly
retained by Vernon as provided in the Vernon Assignment Agreement. The Parties
acknowledge that, to the extent J. Aron fails to pay for any Assigned Products by the due
date for payment set forth in the PPA, Vernon has agreed in the Vernon Assignment
Agreement that it will remain responsible for all payments due to PPA Seller pursuant to
the Delivered Product Payment Obligation within two (2) Business Days (as defined in
the Master Agreement) of receiving notice (as provided in Section 22.1(a) of the Master
Agreement) of non-payment from PPA Seller.
(c) All scheduling of Assigned Products under the PPA shall continue to take place between
Vernon and PPA Seller pursuant to the terms of the PPA and the Vernon Assignment
Agreement; provided that (i) title to Assigned Products will pass from PPA Seller to J.
of Project Energy in accordance with the PPA; (ii)
Vernon will provide copies to J. Aron of any notice of an
Uncontrollable Force (as defined in the PPA) event or an Event of Default or default,
breach, or other occurrence that if not cured within the applicable grace period could
result in an Event of Default, which must be provided contemporaneously with any
delivery of such Notice to PPA Seller and, as applicable, any collateral assignee or
promptly after receipt thereof from PPA Seller; (iii) PPA Seller will provide copies to J.
Aron of all invoices and supporting data that it provides to Vernon pursuant to Section 9
of the Master Agreement and Sections 15, 26, and 28 of the Confirmation, provided that
any payment adjustments or subsequent reconciliations occurring after the date that is ten
(10) days prior to the payment due date for an invoice will be resolved solely between
Vernon and PPA Seller, and therefore PPA Seller will not be obligated to deliver copies
of any communications relating thereto to J. Aron; and (iv) Vernon and PPA Seller, as
applicable, will provide copies to J. Aron of any other information reasonably requested
by J. Aron relating to Assigned Products.
(d) PPA Seller acknowledges that (i) the Assigned Products will be re-delivered through one
or more intermediaries, including SCPPA, to Vernon; and (ii) in the event that Vernon
fails to pay SCPPA for any Assigned Products, the receivables owed by Vernon to
SCPPA Vernon Receivables
Aron. To the extent any such Vernon Receivables are transferred to J. Aron, J. Aron may
transfer such Vernon Receivables to PPA Seller and apply the face amount thereof as a
reduction to any Delivered Product Payment Obligation. Thereafter, PPA Seller shall be
entitled to pursue collection on such Vernon Receivables directly against Vernon.
Provided, however, that upon payment to PPA Seller of any such amounts by either J.
Aron, SCPPA or Vernon then PPA Seller shall no further claim for such amounts.
(e) Each of SCPPA and PPA Seller hereby consents and agrees to the assignment, transfer,
conveyance and delegation described in clauses (a) and (b) above, and J. Aron hereby
accepts the same, subject to the terms and limitations of this Assignment Agreement.
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(f)Assigned Prepay Quantity Appendix 2 relates to rights and
obligations by and among J. Aron, SCPPA, and Vernon and, except as otherwise
expressly set forth herein,
PPA.
2. Assignment Early Termination.
(a) The Assignment Period shall terminate early upon the occurrence of any of the following:
(1) delivery of a written Notice of termination by either J. Aron or SCPPA to each of
the other Parties hereto;
(2) delivery of a written Notice of termination by PPA Seller to J. Aron and SCPPA
following any failure to pay when due any amounts owed to PPA Seller pursuant
to the Delivered Product Payment Obligation, and such failure continues for two
(2) Business Days (as defined in the Master Agreement) following the receipt of
notice from PPA Seller pursuant to Section 22.1(a) of the Master Agreement;
(3) delivery of a written Notice by PPA Seller or SCPPA to each of the other Parties
to this Agreement if any of the events described in Section 22.1(c) of the Master
Agreement occurs with respect to SCPPA, J. Aron as though SCPPA, J. Aron
were a party to the PPA; or
(4) delivery of a written Notice by J. Aron or SCPPA to each of the other Parties to
this Agreement if any of the events described in Section 22.1(c) of the Master
Agreement occurs with respect to PPA Seller.
(b) In the event of an early termination pursuant to Section 2(a), the Assignment Period will
end at the end of the last delivery hour on the date specified in the termination Notice
provided pursuant to Section 2(a), which date shall not be earlier than the end of the last
day of the calendar month in which such Notice is delivered if termination is pursuant to
clause 2(a)(1) above. All Assigned Rights and Obligations shall immediately revert to
Vernon, without further action by the Parties, upon the early termination of the
Assignment Period, provided that (i) J. Aron shall remain responsible for the Delivered
Product Payment Obligation with respect to any Assigned Products delivered by PPA
Seller prior to the end of the Assignment Period, and (ii) any legal restrictions on the
effectiveness of such reversion (whether arising under bankruptcy law or otherwise) shall
not affect the expiration or early termination of the Assignment Period.
(c) The Assignment Period will automatically terminate upon (i) the early termination of the
PPA or (ii) the termination of the Vernon Assignment Agreement, and, in each case, all
Assigned Rights and Obligations shall immediately revert to Vernon, without further
action by the Parties, upon the early termination of the PPA or the SCPPA Assignment
Agreement, as applicable, provided that (i) J. Aron shall remain responsible for the
Delivered Product Payment Obligation with respect to any Assigned Products delivered
to J. Aron or for the benefit of J Aron by PPA Seller prior to the end of the Assignment
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Period, and (ii) any legal restrictions on the effectiveness of such reversion (whether
arising under bankruptcy law or otherwise) shall not affect the expiration or early
termination of the Assignment Period.
3. Representations and Warranties. PPA Seller represents and warrants to J. Aron that (a) the
PPA is in full force and effect; (b) no known event or circumstance presently exists that would
give either PPA Seller or Vernon the right to terminate the PPA or suspend performance
thereunder; and (c) all of its respective obligations under the PPA required to be performed on or
before the date hereof have been fulfilled. PPA Seller further represents to SCPPA and J. Aron
that it has secured all known consents to this Assignment Agreement that may be required by the
PPA, any agreement referenced therein, or any assignment of its rights thereunder.
4. Miscellaneous. Sections 11 (Waivers), 21.1 (Liability and Damages), 39 (Amendment)
(provided that no consent or approval by SCPPA or J. Aron shall be required in order to amend
the PPA), and 40 (Execution by Counterparts) of the Master Agreement and Section 18 of the
Confirmation (Governing Law) are incorporated by reference into this Assignment Agreement,
mutatis mutandis, as if fully set forth herein; provided that the incorporation of Section 21.1
(Liability and Damages
recover damages under any express indemnity provisions set forth in this Agreement.
5. Limited Obligation. Notwithstanding anything to the contrary herein, all obligations of SCPPA
under this Assignment Agreement, including without limitation all obligations to make payments
of any kind whatsoever, are special, limited obligations of SCPPA, payable solely from the Trust
Estate (as such term is defined in the Trust Indenture, dated as of [], between SCPPA and U.S.
Bank Trust Company, National Association, as trustee) as and to the extent provided in such Trust
Indenture, including with respect to Operating Expenses (as such term is defined in such Trust
Indenture). SCPPA shall not be required to advance any moneys derived from any source other
than the Revenues (as such term is defined in such Trust Indenture) and other assets pledged under
such Trust Indenture for any of the purposes in this Assignment Agreement or the PPA. Neither
the faith and credit of SCPPA nor the taxing power of the State of California or any political
subdivision thereof is pledged to payments pursuant to this Assignment Agreement or the PPA.
SCPPA shall not be directly, indirectly, contingently or otherwise liable for any costs, expenses,
losses, damages, claims or actions, of any conceivable kind on any conceivable theory, under or
by reasons of or in connection with this Assignment Agreement or the PPA, except solely to the
extent Revenues (as such term is defined in such Trust Indenture) are received for the payment
thereof and may be applied therefor pursuant to the terms of such Trust Indenture.
6. Notices. Any notice, demand, or request required or authorized by this Assignment Agreement
to be given by one Party to another Party shall be in writing and shall either be sent by email
transmission (to the extent the intended receiving Party has provided an email address for notices
sent pursuant to this Section 5), courier, or personal delivery (including overnight delivery service)
to each of the notice recipients and addresses (including email addresses, if applicable) specified
in this Section 5 for the receiving Party. Any such notice, demand, or request shall be deemed to
be given (a) when actually received if delivered by email transmission or (b) when actually
received if delivered by courier or personal delivery (including overnight delivery service). Each
Party shall have the right, upon ten (10)
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list of notice recipients and addresses set forth below. Notwithstanding the foregoing, any Party
may at any time notify the other Parties that any notice, demand or request to it must be provided
by email transmission for a specified period of time or until further notice, and any
communications delivered by means other than email transmission during the specified period of
time shall be ineffective
If to PPA Seller:
[]
If to SCPPA:
Southern California Public Power Authority
1160 Nicole Court
Glendora, CA 91740
Email: ExecutiveDirector@scppa.org
If to J. Aron:
J. Aron & Company LLC
200 West Street
New York, New York 10282-2198
Email: gs-prepay-notices@gs.com
7. U.S. Resolution Stay Provisions.
(a) As between J. Aron and SCPPA, J. Aron and SCPPA hereby confirm that they are
the terms of the ISDA U.S. Stay Protocol are incorporated into and form a part of this
Assignment Agreement, and for the purposes of such incorporation, (i) J. Aron shall be
deemed to be a Regulated Entity, (ii) SCPPA shall be deemed to be an Adhering Party,
and (iii) this Assignment Agreement shall be deemed a Protocol Covered Agreement. In
the event of any inconsistencies between this Assignment Agreement and the ISDA U.S.
Stay Protocol, the ISDA U.S. Stay Protocol will prevail.
(b) As between J. Aron and PPA Seller:
(i) In the event that J. Aron becomes subject to a proceeding under (A) the Federal
Deposit Insurance Act and the regulations promulgated thereunder or (B) Title II of the
Dodd-Frank Wall Street Reform and Consumer Protection Act and the regulations
U.S. Special Resolution Regime , the transfer from J. Aron
of this Agreement, and any interest and obligation in or under, and any property securing,
this Agreement, will be effective to the same extent as the transfer would be effective
under the U.S. Special Resolution Regime if this Agreement, and any interest and
obligation in or under, and any property securing, this Agreement were governed by the
laws of the United States or a state of the United States.
(ii) In the event that J. Aron or an Affiliate becomes subject to a proceeding under a
U.S. Special Resolution Regime, any Default Rights (as defined in 12 C.F.R. §§ 252.81,
Default Right
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against J. Aron are permitted to be exercised to no greater extent than such Default Rights
could be exercised under the U.S. Special Resolution Regime if this Agreement were
governed by the laws of the United States or a state of the United States.
(iii)
into Insolvency Proceedings. Notwithstanding anything to the contrary in this Agreement,
J. Aron and PPA Seller expressly acknowledge and agree that:
(1) PPA Seller shall not be permitted to exercise any Default Right with respect
to this Agreement or any Affiliate Credit Enhancement that is related, directly or indirectly,
to an Affiliate of J. Aron becoming subject to receivership, insolvency, liquidation,
re Insolvency Proceeding
the exercise of such Default Right would be permitted under the provisions of 12 C.F.R.
252.84, 12 C.F.R. 47.5 or 12 C.F.R. 382.4, as applicable; and
(2) Nothing in this Agreement shall prohibit the transfer of any Affiliate Credit
Enhancement, any interest or obligation in or under such Affiliate Credit Enhancement, or
any property securing such Affiliate Credit Enhancement, to a transferee upon or following
an Affiliate of J. Aron becoming subject to an Insolvency Proceeding, unless the transfer
would result in PPA Seller being the beneficiary of such Affiliate Credit Enhancement in
violation of any law applicable to PPA Seller.
(iv) U.S. Protocol. If PPA Seller adheres to the ISDA U.S. Protocol after the date of this
Agreement, the terms of the ISDA U.S. Protocol will supersede and replace the terms of
this Section 6(b).
(v) For purposes of this Section 6(b):
(1)Affiliate
U.S.C. § 1841(k); and
(2)Credit Enhancement
arrangement in support of the obligations of J. Aron under or with respect to this
Agreement, including any guarantee, collateral arrangement (including any pledge, charge,
mortgage or other security interest in collateral or title transfer arrangement), trust or
similar arrangement, letter of credit, transfer of margin or any similar arrangement.
7. Governing Law, Jurisdiction; Waiver of Jury Trial; Limited Obligation.
(a)Governing Law. This Assignment Agreement and the rights and duties of the Parties
under this Assignment Agreement shall be governed by and construed, enforced and
performed in accordance with the laws of the State of California, without regard to
conflicts of law principles.
(b)Jurisdiction. All judicial proceedings arising out of or relating to this Assignment
Agreement and involving J. Aron shall be brought exclusively in a federal court in the
County of Orange in the State of California to the maximum extent permitted by federal
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jurisdiction and otherwise in any court within the County of Orange with jurisdiction over
the matter, and each Party consents to such jurisdiction.
All judicial proceedings arising out of or relating to this Assignment Agreement and only
involving SCPPA and PPA Seller shall be brought in the Superior Court for the county of
Orange, California.
The Parties irrevocably agree to submit to the exclusive jurisdiction of such courts in the
State of California and waive any defense of forum non conveniens.
(c)Waiver of Right to Jury Trial. Each Party waives, to the fullest extent permitted by
applicable law and provided in the PPA for disputes thereunder, any right it may have to a
trial by jury in respect of any suit, action or proceeding relating to this Assignment
Agreement.
9. Further Assignments. Except as provided in this Assignment Agreement, SCPPA and J. Aron
are prohibited from further transferring to third parties the rights and obligations assigned,
transferred, and conveyed hereby without first obtaining the express, written approval of
Vernon and PPA Seller.
[Remainder of Page Intentionally Blank]
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IN WITNESS WHEREOF, the Parties have executed this Limited Assignment Agreement
(BP Energy Company SCPPA/J. Aron) effective as of the date first set forth above.
BP ENERGY COMPANY
By:
Name:
Title:
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
By:
Name:
Title:
J. ARON & COMPANY LLC
By:
Name:
Title:
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APPENDIX 1
Assignment Schedule
APC Contract Price: Energy Price + REC Price.
Assignment Period: The period beginning on the Effective Date of this Assignment Agreement]
and extending through and until December 31, 2035, provided that in no event shall the
Assignment Period extend past the earlier of (i) the termination of the Assignment Period pursuant
to Section 2 of the Assignment Agreement and (ii) the end of the Delivery Term under the PPA;
provided that applicable provisions of this Assignment Agreement shall continue in effect after
termination of the Assignment Period to the extent necessary to enforce or complete, duties,
obligations, or responsibilities of the Parties arising prior to the termination.
Assigned Products: (1) Project Energy delivered during the Assignment Period; and (2) Green
Attributes (including but not limited to Portfolio Content Category 1 RECs) associated with such
Project Energy transferred during the Assignment Period.
Further Information/Limitations: PPA Seller shall continue to transfer WREGIS Certificates
associated with all Green Attributes corresponding to all Project Energy under the PPA to Vernon,
provided that the transferee of such WREGIS Certificates may be changed from time to time in
accordance with written instructions from Vernon
first day of the next calendar month, unless otherwise agreed. All Assigned Products delivered by
PPA Seller to SCPPA and its assigns shall be a sale made at wholesale, with SCPPA and its assigns
reselling all such Assigned Products.
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APPENDIX 2
Assigned Prepay Quantity
[NOTE: To be set forth in a monthly volume schedule.]
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SM Draft 26 January 2026
CLEAN ENERGY PURCHASE CONTRACT1
between
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
and
[____]
Dated as of [_____], 2026
1 NTD: To streamline negotiations, we have created a generic form for review and comment by the working
group. Once agreed upon, we will replicate this for each of the four Project Participants.
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TABLE OF CONTENTS
Page
ARTICLE I. DEFINITIONS ........................................................................................................2
Section 1.1 Defined Terms ................................................................................................2
Section 1.2 Definitions; Interpretation .............................................................................13
ARTICLE II. DELIVERY PERIOD; NATURE OF CLEAN ENERGY PROJECT
II; CONDITION PRECEDENT ...................................................................13
Section 2.1 Delivery Period .............................................................................................13
Section 2.2 Condition Precedent ......................................................................................14
Section 2.3 Pledge of this Agreement ..............................................................................14
ARTICLE III. SALE AND PURCHASE; PRICING ...............................................................14
Section 3.1 Sale and Purchase of Product ........................................................................14
Section 3.2 Purchaser Payments ......................................................................................14
Section 3.3 Annual Refund ..............................................................................................15
Section 3.4 Reset Period Remarketing.............................................................................16
Section 3.5 Limited Obligation to Take Base Quantities ................................................17
Section 3.6 Partial Suspension of Issuer Assigned PPA PSAs ........................................17
ARTICLE IV. FAILURE TO SCHEDULE PRODUCT .........................................................17
Section 4.1
Majeure) ........................................................................................................17
Section 4.2
Due to Force Majeure) ..................................................................................18
Section 4.3 Assigned Product ..........................................................................................18
Section 4.4 Sole Remedies ...............................................................................................18
ARTICLE V. DELIVERY POINTS; SCHEDULING .............................................................18
Section 5.1 Delivery Points..............................................................................................18
Section 5.2 Transmission and Scheduling .......................................................................19
Section 5.3 Title and Risk of Loss ...................................................................................19
Section 5.4 Communications Protocol .............................................................................19
Section 5.5 Deliveries within CAISO or another Balancing Authority ...........................20
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Section 5.6 Assigned Products .........................................................................................20
ARTICLE VI. ASSIGNMENT OF POWER PURCHASE AGREEMENTS ........................20
Section 6.1 Assignments Generally .................................................................................20
Section 6.2 Failure to Obtain EPS Compliant Energy .....................................................22
Section 6.3 Early Termination of Assignment Periods and Updates to Exhibits ............22
Section 6.4 J. Aron Non-Payment to APC Party .............................................................23
ARTICLE VII. USE OF PRODUCT .........................................................................................24
Section 7.1 Tax Exempt Status of the Bonds ...................................................................24
Section 7.2 Priority Products ...........................................................................................24
Section 7.3 Assistance with Sales to Third Parties ..........................................................24
Section 7.4 Qualifying Use ..............................................................................................25
Section 7.5 Remediation ..................................................................................................25
Section 7.6 Remediation; Ledger Entries; Redemption ...................................................26
ARTICLE VIII. REPRESENTATIONS AND WARRANTIES; ADDITIONAL
COVENANTS ................................................................................................27
Section 8.1 Representations and Warranties ....................................................................27
Section 8.2 Warranty of Title...........................................................................................28
Section 8.3 Disclaimer of Warranties ..............................................................................28
Section 8.4 Continuing Disclosure ..................................................................................28
ARTICLE IX. TAXES.................................................................................................................28
ARTICLE X. JURISDICTION ..................................................................................................29
ARTICLE XI. FORCE MAJEURE ...........................................................................................29
Section 11.1 Applicability of Force Majeure .....................................................................29
Section 11.2 Settlement of Labor Disputes........................................................................30
ARTICLE XII. GOVERNMENTAL RULES AND REGULATIONS ...................................30
Section 12.1 Compliance with Laws .................................................................................30
Section 12.2 Contests .........................................................................................................30
Section 12.3 Defense of Agreement ..................................................................................30
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ARTICLE XIII. ASSIGNMENT ................................................................................................30
ARTICLE XIV. PAYMENTS.....................................................................................................31
Section 14.1 Monthly Statements ......................................................................................31
Section 14.2 Payments .......................................................................................................32
Section 14.3 Payment of Disputed Amounts .....................................................................33
Section 14.4 Late Payment ................................................................................................33
Section 14.5 Audit; Adjustments .......................................................................................33
Section 14.6 Netting; No Set-Off.......................................................................................34
Section 14.7 ...................................................................34
Section 14.8 Rate Covenant ...............................................................................................34
Section 14.9 Pledge of Utility Revenues ...........................................................................35
Section 14.10 Financial Responsibility................................................................................35
ARTICLE XV. [RESERVED] ....................................................................................................35
ARTICLE XVI. NOTICES .........................................................................................................35
ARTICLE XVII. DEFAULT; REMEDIES; TERMINATION ...............................................36
Section 17.1 Issuer Default ................................................................................................36
Section 17.2 Purchaser Default ..........................................................................................36
Section 17.3 Remedies Upon Default ................................................................................37
Section 17.4 Termination of Master Power Supply Agreement; Failed Bond
Remarketing ..................................................................................................38
Section 17.5 Limitation on Damages .................................................................................38
ARTICLE XVIII. MISCELLANEOUS .....................................................................................39
Section 18.1 Indemnification Procedure. ...........................................................................39
Section 18.2 Deliveries ......................................................................................................39
Section 18.3 Entirety; Amendments ..................................................................................40
Section 18.4 Governing Law .............................................................................................40
Section 18.5 Non-Waiver...................................................................................................40
Section 18.6 Severability ...................................................................................................40
Section 18.7 Exhibits .........................................................................................................40
Section 18.8 Winding Up Arrangements ...........................................................................40
Section 18.9 Relationship of Parties ..................................................................................41
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Section 18.10 Immunity .......................................................................................................41
Section 18.11 Rates and Indices ..........................................................................................41
Section 18.12 Limitation of Liability...................................................................................41
Section 18.13 Counterparts ..................................................................................................41
Section 18.14 Third Party Beneficiaries; Rights of Trustee ................................................41
Section 18.15 Waiver of Defenses .......................................................................................42
Section 18.16 Rate Changes ................................................................................................42
Exhibit A-1 Base Quantities; Base Delivery Points; Commodity Reference Prices
Exhibit A-2 Assigned Rights and Obligations
Exhibit B Notices
Exhibit C Remarketing Election Notice
Exhibit D Form of Federal Tax Certificate
Exhibit E of Counsel
Exhibit F Forms of Issuer Assignment Agreement and Purchaser Assignment Agreement
Exhibit G Communications Protocol
Exhibit H Pricing and Other Terms
Exhibit I Form of Remediation Certificate
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CLEAN ENERGY PURCHASE CONTRACT
Agreement
as of [_____], 2026 Execution Date
Authority, a joint powers authority organized pursuant to the laws of the State of California
Issuer [____], [___________] Purchaser
W I T N E S S E T H:
Clean Energy Project
II -term supplies of Product from Aron Energy Prepay 51 LLC, a Delaware
Prepay LLC
a wholly-owned subsidiary of The Goldman Sachs Group, Inc., pursuant to a Master Power Supply
Agreement, dated as of [_____], 2026 Master Power Supply Agreement
of the Product supply requirements of Purchaser;
WHEREAS, Purchaser desires to enter into an agreement with Issuer for the
purchase of Product acquired by the Issuer under the Clean Energy Project II;
WHEREAS, Issuer will finance its payment for Product under, and the other costs
of, the Clean Energy Project II by issuing Bonds;
WHEREAS, Purchaser owns and operates an electric utility under authority of the
laws of the State of California for the transmission, distribution, sale, and delivery of Product to
retail electric consumers within its service area;
WHEREAS, Purchaser is agreeable to purchasing a portion of its Product
requirements from Issuer under the terms and conditions set forth in this Agreement, and Issuer is
agreeable to selling to Purchaser such supplies of Product under the terms and conditions set forth
in this Agreement;
WHEREAS, in connection herewith and subject to the terms hereof, Issuer at the
request of Purchaser is assigning and in the future may assign to J. Aron (as defined below) certain
Assigned Rights and Obligations (as defined below), including the right to receive Assigned
Product (as defined below), which Assigned Product will be resold to Prepay LLC under the
Electricity Sale and Service Agreement, then resold to Issuer under the Master Power Supply
Agreement, and then resold to Purchaser hereunder; and
under this Agreement, Issuer shall have entered into the Master Power Supply Agreement and shall
have issued the Bonds.
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NOW, THEREFORE, in consideration of the premises above and the mutual
Parties
Party
ARTICLE I.
DEFINITIONS
Section 1.1 Defined Terms. The following terms, when used in this Agreement
(including the preamble or recitals to this Agreement) and identified by the capitalization of the
first letter thereof, have the respective meanings set forth below, unless the context otherwise
requires:
Administrative Fee the amount per MWh specified as such in Exhibit H.
Affiliate Issuer, any entity which is a direct or indirect
parent or subsidiary of such Party or which directly or indirectly (i) owns or controls Issuer, (ii) is
owned or controlled by Issuer, or (iii) is under common ownership or control with Issuer. For
control
(a) vote 50% or more of the securities having ordinary voting power for the election of directors
or Persons performing similar functions or (b) direct or cause the direction of the management and
policies, whether by contract or otherwise.
Agreement and shall include exhibits,
recitals and attachments referenced herein and attached hereto.
Alternate Delivery Point Section 5.1(a).
Annual Refund to be provided to the Purchaser
and calculated pursuant to the procedures specified in Section 3.3.
APC Contract Price for Assigned Prepay Quantities to be delivered under any
Assigned PPA means (i) the fixed prices specified in Exhibit A-2 as of the date hereof with respect
to such Assigned PPA for the Initial Assignment Period therefor and (ii) the Day-Ahead Average
Price if the Assignment Period for such Assigned PPA is not an Initial Assignment Period.
APC Party means, for any Assigned Product, the seller of such Assigned Product
under an Assigned PPA.
Assignable Power Contract Section 6.1.
Assigned Delivery Point Assigned Energy, the
Assigned Delivery Point as set forth in the relevant Assignment Agreement.
Assigned Energy means any Energy, including Energy associated with PCC1
Product and Long-Term PCC1 Product, to be delivered to J. Aron or any successor thereto
pursuant to any Assigned Rights and Obligations.
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Assigned PAYGO Product Month with respect to an Assigned
PPA, the amount, if any, by which the total quantity of Assigned Product delivered under such
Assigned PPA in such Month exceeds the Assigned Prepay Quantity for such Assigned PPA for
such Month. For further clarity, any Assigned Products delivered during an Assignment Period
that are associated with Energy delivered under the applicable Assigned PPA prior to the
Assignment Period shall constitute Assigned PAYGO Product.
Assigned PPA means any power purchase agreement (or the limited interests
thereunder) that is assigned by Issuer to J. Aron pursuant to an Issuer Assignment Agreement in
accordance with the terms of this Agreement. For the avoidance of doubt, if only a portion of
Assigned PPA
such rights and obligations so assigned.
Assigned Prepay Quantity means, for any Month and any Assigned PPA, the
quantity of Product prepaid for such Assigned PPA for such Month as set forth in Exhibit A-2
(which Exhibit A-2 is subject to adjustment under the circumstances specified in Section 6.3 and
Section 7.5(c), as applicable). For the avoidance of doubt, the Parties may mutually agree in
writing to modify the Assigned Prepay Quantity for an Assigned PPA for purposes of this
Agreement, the Master Power Supply Agreement and the Electricity Sale and Service Agreement,
(x) with the written agreement of the parties to the Master Power Supply Agreement and the
Electricity Sale and Service Agreement and (y) without the agreement of the relevant APC Party
and without any amendment to the related Issuer Assignment Agreement or Purchaser Assignment
Agreement, as applicable.
Assigned Product means, as applicable, PCC1 Product, Long-Term PCC1
Product, Assigned Energy, Assigned RECs and any other Product included in an Assignment
Agreement, provided that Assigned Products may not in any case include capacity.
Assigned Quantity means, with respect to each Assigned PPA and each Month
during the Assignment Period therefor, the quantity of Assigned Energy delivered pursuant to such
Assigned PPA consistent with the terms of the applicable Assigned Rights and Obligations in
connection with the Assigned Product during such Month.
Assigned RECs means any RECs associated with PCC1 Product or Long-Term
PCC1 Product to be delivered to J. Aron or any successor thereto pursuant to any Assigned Rights
and Obligations.
Assigned Rights and Obligations Section 6.1.
Assignment Period for any Assigned Rights and Obligations and Assigned PPA
has the meaning specified in the applicable Issuer Assignment Agreement.
Available Discount Percentage he meaning specified in the Re-Pricing
Agreement Re-Pricing
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Agreement includes the Monthly Discount Percentage, as well as additional discounting expected
to be made available through the Annual Refund.
Balancing Authority
Base Delivery Point means (i) the CAISO delivery point set forth in Exhibit A-1
Primary Delivery Point or (ii) any other CAISO delivery Alternate Delivery
Point
Power Sale Agreement and by Purchaser hereunder.
Base Product means Firm (LD) Energy delivered to the Base Delivery Point.
Base Quantity means, with respect to each Delivery Hour during the Delivery
Period, the Base Unadjusted Quantity for such Delivery Hour less the total of the Base Quantity
Reductions for such Delivery Hour, each as set forth on Exhibit A-1, as Exhibit A-1 may be revised
pursuant to Article VI; provided that, for the avoidance of doubt, there shall be no Base Quantities
under this Agreement following the end of the Delivery Period.
Base Quantity Reduction attributable to an Assigned PPA means, with respect to
each Delivery Hour during the Delivery Period, of Base Product
(in MWh) for such Assigned PPA set forth for such Delivery Hour on Exhibit A-1, as Exhibit A-
1 may be revised pursuant to Article VI.
Base Unadjusted Quantity means, with respect to each Delivery Hour during the
Delivery Period, the uantity (in MWh) set forth for such Delivery Hour on
Exhibit A-1.
Bond Closing Date Bonds are first issued pursuant to
the Bond Indenture.
Bond Indenture means (i) the Trust Indenture to be entered into prior to the
commencement of the Delivery Period between Issuer and the Trustee, and (ii) any trust indenture
entered into in connection with the commencement of any Interest Rate Period after the initial
Interest Rate Period between Issuer and the Trustee containing substantially the same terms as the
indenture described in clause (i) and which is intended to replace the indenture described in clause
(i) as of the commencement of such Interest Rate Period.
Bonds bonds issued pursuant to the Bond Indenture.
Business Day means any day other than (i) a Saturday or Sunday, (ii) a Federal
Reserve Bank Holiday, (iii) any other day on which commercial banks generally in either New
York, New York or the State of California are authorized or required by Law to close, or (iv) any
CAISO
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CAISO Tariff means -approved tariff, as modified, amended or
supplemented from time to time.
Calculation Agent -Pricing Agreement.
California Long-Term Contracting Requirements -term
contracting requirement set forth in the Clean Energy and Pollution Reduction Act of 2015 (SB
350), as may be modified by subsequent decision of the California Energy Commission or by other
Law.
CEC
Commission, also known as the California Energy Commission, and any successor agency thereto.
Claiming Party Section 11.1.
Claims means all claims or actions, threatened or filed, that directly or indirectly
se, and whether such
claims or actions are threatened or filed prior to or after the termination of this Agreement.
Clean Energy Project II .
Code means the Internal Revenue Code of 1986, as amended.
Commercially Reasonable Commercially Reasonable Efforts
respect to any purchase or sale or other action required to be made, attempted or taken by a Party
under this Agreement, such efforts as a reasonably prudent Person would undertake for the
protection of its own interest under the conditions affecting such purchase or sale or other action,
including without limitation, the amount of notice of the need to take such action, the duration and
type of the purchase or sale or other action, the competitive environment in which such purchase
or sale or other action occurs, and the risk to the Party required to take such action.
Commodity Reference Price (i) the Day-Ahead Market Price, or
(ii) the Real-Time Market Price, as applicable.
Contract Price means (i) with respect to the Base Product and any Delivery Hour,
(A) the Day-Ahead Market Price for such Delivery Hour at the Base Delivery Point less (B) the
product of the Fixed Price for Base Quantities multiplied by the Monthly Discount Percentage; (ii)
with respect to Assigned Prepay Quantities during the Initial Assignment Periods, (A) the
applicable APC Contract Price(s) multiplied by (B) the result of 100% less the Monthly Discount
Percentage, (iii) with respect to Assigned Prepay Quantities outside of the Initial Assignment
Periods, (A) the APC Contract Price less (B) the product of the (x) the difference between (I) the
Fixed Price for Assigned Prepay Quantities outside of the Initial Assignment Periods and (II)
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$[____]/MWh2, multiplied by (y) the Monthly Discount Percentage; and (iii) with respect to
Assigned PAYGO Product delivered pursuant to an Assigned PPA, the applicable contract price(s)
then in effect under the applicable Assigned PPA(s) with respect to Energy.
Day means each period of 24 consecutive Hours commencing at the Hour ending
at 01:00 (LPT) through the Hour ending at 24:00 (LPT).
Day-Ahead Average Price means, for any Assigned Products after the Initial
Assignment Periods, the result of (i) (x) the sum of the Day-Ahead Market Prices for each Pricing
Interval in a Month, divided by (y) the number of Pricing Intervals in such Month; plus (ii)
$[____]/MWh.
CAISO establishes a separate price.
Day-Ahead Market Price has the meaning specified on Exhibit A-1 for each
Delivery Point.
Default Rate the sum of
(i) the rate of interest per annum quoted in The Wall Street Journal (Eastern Edition) under the
two percent
per annum, or (b) if a lower maximum rate is imposed by applicable Law, such maximum lawful
rate.
Delivery Hour Exhibit A-1.
Delivery Period has the meaning specified in Exhibit H.
Delivery Point Base Delivery Point or an Assigned Delivery Point, as
applicable.
Disqualified Sale Proceeds has the meaning specified in Section 7.6.
Disqualified Sale Units has the meaning specified in Section 7.6.
Electricity Sale and Service Agreement Master
Power Supply Agreement.
Eligible Renewable Energy Resource
Public Utilities Code Section 399.12 as such code provision is amended or supplemented from
time to time.
2 NTD: This will be a $/MWh amount that adjusts for swap fees incurred as a result of activation of the
swaps.
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Energy -phase, 60-cycle alternating current electric energy,
expressed in megawatt hours.
EPS
Sections 8340 and 8341 of the California Public Utilities Code, as implemented and amended from
time to time, and any successor Law.
EPS Compliant Energy means Energy that Purchaser can contract for and
purchase in compliance with EPS requirements that are applicable to Purchaser.
EPS Energy Period means any Assignment Period or J. Aron EPS Energy Period.
Execution Date .
Federal Tax Certificate means the executed Federal Tax Certificate delivered by
Purchaser in the form attached as Exhibit D.
FERC or any successor
thereto.
Firm (LD) means, sell and deliver or
purchase and receive, that failure to meet such obligation shall only
be excused to the extent that, and for the period during which, such performance is prevented by
Force Majeure, and that in the absence of Force Majeure, the Party to which performance of such
obligation is owed shall be entitled to receive from the Party which failed to deliver/receive an
amount determined pursuant to Article IV.
Fixed Price means $[____]/MWh with respect to Base Quantities and
$[____]/MWh with respect to Assigned Prepay Quantities attributable to an Assigned PPA outside
of the Initial Assignment Period therefor, which are the fixed prices under the Buyer Swap (as
defined in the Master Power Supply Agreement) for such Product.
Force Majeure means an event or circumstance which prevents one Party from
performing its obligations under this Agreement, which event or circumstance was not anticipated
as of the date this Agreement was executed, which is not within the reasonable control of, or the
result of the negligence of, the Claiming Party, and which, by the exercise of due diligence, the
Claiming Party is unable to overcome or avoid or cause to be avoided; provided that, for the
avoidance of doubt, (x) n Assigned
PPA or (y) an APC Party otherwise being unable to deliver any portion of the Assigned Prepay
Quantity in respect of its Assigned PPA due to an event that would be considered Force Majeure
under this Agreement if it affected Issuer directly, in each case, shall constitute Force Majeure
hereunder. Force Majeure shall include, provided the criteria in the first sentence are met, riot,
insurrection, war, labor dispute, natural disaster, epidemic, vandalism, terrorism, sabotage. Force
Majeure shall not be based on (i) the loss of Purchaser Purchaser
economically to use or resell the Product purchased hereunder; or (iii) the delay, loss or failure of
supply other than due to force majeure declared under the Master Power Supply
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Agreement or as provided in (x) or (y) above; or (iv) ability to sell the Product at a higher
price. Neither Party may raise a claim of Force Majeure based in whole or in part on curtailment
by a Transmission Provider unless (x) such Party has contracted for firm transmission with a
Transmission Provider for the Product to be delivered to or received at the applicable Delivery
Point and (y) such curtailment is
as defined under the Transmission Provider
foregoing factors shall not be sufficient to conclusively or presumptively prove the existence of a
Force Majeure absent a showing of other facts and circumstances which in the aggregate with such
factors establish that a Force Majeure as defined in the first sentence hereof has occurred. Force
Majeure invoked by Prepay LLC under the Master Power Supply Agreement shall constitute Force
Majeure hereunder in respect of Issuer to the extent the conditions set forth above have been
satisfied with respect to Prepay LLC. To the extent that an Issuer Assignment Agreement is
terminated early, such termination shall constitute Force Majeure with respect to Issuer hereunder
until the effectiveness of the updates to Exhibit A-1 or Exhibit A-2, as applicable, pursuant to
Section 6.2.
Government Agency
municipality, or any local jurisdiction, or any political subdivision of any of the foregoing,
including, but not limited to, courts, administrative bodies, departments, commissions, boards,
bureaus, agencies, or instrumentalities.
Governmental Approval means any authorization, consent, approval, license,
ruling, permit, exemption, variance, order, judgment, registration, filing, giving of notice to,
decree, declaration of or regulation by any Government Agency relating to the valid execution,
delivery or performance of this Agreement or the consummation of any of the transactions
contemplated hereby.
Hour -minute period commencing at 00:00 (LPT) on first Day of
the Delivery Period and ending at 01:00 (LPT) on the first Day of the Delivery Period, and each
60-minute interval thereafter.
Initial Assigned Rights and Obligations means the Assigned Rights and
Obligations set forth in Exhibit A-2 hereto that have been assigned by Issuer to J. Aron in
connection with the execution of this Agreement.
Initial Assignment Periods means the Assignment Periods for the Initial Assigned
Rights and Obligations specified in Exhibit A-2 hereto as of the date hereof.
Initial Reset Period has the meaning specified in Exhibit H.
Interest Rate Period
Issuer .
Issuer Assigned PPA means a power purchase agreement (x) pursuant to which
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redelivery to Purchaser and (y) that is assigned by Issuer to J. Aron pursuant to an Issuer
Assignment Agreement in accordance with the terms of this Agreement.
Issuer Assigned PPA PSA means any power sales agreement by and between
Issuer and Purchaser that relates to an Issuer Assigned PPA.
Issuer Assignment Agreement
an agreement among Issuer, J. Aron and the APC Party, in the form attached hereto as Exhibit F-
1 (with such changes thereto as may be mutually agreed upon by J. Aron, the APC Party, and
Issuer, each in its sole discretion).
Issuer Default Section 17.1.
Issuer PPA Custodial Agreement means that certain Custodial Agreement, dated
as of [____], by and among Issuer, J. Aron, and the PPA Custodian.
ISTs Section 5.1(a).
J. Aron means J. Aron & Company LLC, a New York limited liability company,
and its permitted successors and assigns under an Issuer Assignment Agreement.
J. Aron EPS Energy Period Section 6.1(c).
Law means any statute, law, rule or regulation or any written judicial or
administrative decision, ruling or interpretation with respect thereto or thereof having the effect of
the foregoing enacted, promulgated, or issued by a Government Agency whether in effect as of the
Execution Date or at any time during the term of this Agreement.
Long-Term PCC1 Product means bundled renewable energy and RECs meeting
the requirements of Portfolio Content Category 1, and the California Long-Term Contracting
Requirements, to be delivered to J. Aron or any successor thereto pursuant to any Assigned Rights
and Obligations.
LPT
Master Power Supply Agreement .
Minimum Discount Percentage has the meaning specified in Exhibit H.
Month means a period beginning on the first Day of a calendar month and ending
immediately prior to the commencement of the first Day of the next calendar month.
Monthly Discount Percentage has the meaning specified in Exhibit H.
Municipal Utility Person that (i) is a governmental person as
defined in the implementing regulations under Section 141 of the Code and any successor
provision, (ii) owns either or both a gas distribution utility or an electric distribution utility (or
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provides natural gas or electricity at wholesale to, or that is sold to entities that provide natural gas
or electricity at wholesale to, governmental Persons that own such utilities), and (iii) agrees in
writing to use the gas or electricity purchased by it (or cause such gas or electricity to be used) for
a qualifying use as defined in U.S. Treas. Reg. § 1.148-1(e)(2)(iii).
MWh -hour.
Non-Priority Products any Products that are not Priority Products.
Party .
PCC1 Product means bundled renewable energy and RECs meeting the
requirements of Portfolio Content Category 1 to be delivered to J. Aron or any successor thereto
pursuant to any Assigned Rights and Obligations.
Person
unincorporated organization, or Government Agency.
Portfolio Content Category 1 PCC1 means any Renewable Energy Credit
associated with the generation of electricity from an Eligible Renewable Energy Resource
consisting of the portfolio content set forth in the California Code of Regulations, Title 20, Section
3203, as may be amended from time to time or as further defined or supplemented by Law.
Potential Remarketing Event Section 3.4(b).
PPA Custodial Agreements means each of the Issuer PPA Custodial Agreement
and the Purchaser PPA Custodial Agreement.
PPA Custodian means [_______].
[PPA Gross Payment means a Participant Gross Payment as defined in the
Purchaser PPA Custodial Agreement.]
Primary Delivery Point Section 5.1(a).
Prepay LLC
Priority Products means the Base Quantity and Assigned Products to be
purchased by Purchaser under this Agreement, together with Products that (i) Purchaser is
obligated to take under a long-term agreement, which Products either have been purchased by
Purchaser or a joint action agency pursuant to a long-term prepaid power purchase agreement using
the proceeds of bonds, notes, or other obligations, the interest on which is excluded from income
for federal income tax purposes, or (ii) with respect to Energy, Energy that is generated using
capacity that was constructed using the proceeds of bonds, notes, or other obligations, the interest
on which is excluded from income for federal income tax purposes (provided that, for the
avoidance of doubt, Priority Products shall not include Energy that is generated using capacity that
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was wholly or partially financed through the monetization of renewable tax credits, whether such
monetization is accomplished through a tax equity investment or otherwise).
Product means Energy and, to the extent specified as an Assigned Product in
Assignment Agreement, associated RECs or other products related to the foregoing.
Project Agreement Coordination and Governance Agreement
(SCPPA Clean Energy II Project), dated as [____], 2026, by and among Seller, Purchaser and the
other Project Participants, providing for joint governance of the Clean Energy Project II and related
matters.
Purchaser .
Purchaser Assigned PPA means a power purchase agreement (x) pursuant to
Energy and (y) that is assigned (I) by Purchaser to Issuer pursuant to a Purchaser Assignment
Agreement in accordance with the terms of this Agreement and (II) by Issuer to J. Aron pursuant
to an Issuer Assignment Agreement in accordance with the terms of this Agreement.
Purchaser Assignment Agreement means, for any Assigned Rights and
Obligations arising under an Assigned PPA to which Purchaser is a party, an agreement among
Issuer, Purchaser and the APC Party, in the form attached hereto as Exhibit F-2 (with such changes
thereto as may be mutually agreed upon by Purchaser, the APC Party, and Issuer, each in its sole
discretion).
Purchaser Default Section 17.2.
[Purchaser PPA Custodial Agreement means that certain Custodial Agreement,
dated as of [____], by and among Purchaser, J. Aron, and the PPA Custodian.]
Qualifying Use Requirements
under this Agreement, such Product
Reg. § 1.148-
the meaning of Section 141 of the Code, and (iii) in a manner that is consistent with the Federal
Tax Certificate attached as Exhibit D.
Re-Pricing Agreement Re-Pricing Agreement, dated as of the Bond
Closing Date (as defined in the Bond Indenture), by and between Prepay LLC and Issuer.
Real-Time Market Price has the meaning specified on Exhibit A-1 for each
Delivery Point.
Remarketing Election Deadline Reset Period, the last date and
time by which the Purchaser may provide a Remarketing Election Notice as set forth in the
applicable Reset Period Notice.
Remarketing Election Notice Section 3.4(b).
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Renewable Energy Credit REC means a certificate of proof associated with
the generation of electricity from an eligible renewable energy resource, which certificate is issued
through the accounting system established by the CEC pursuant to RPS Law, evidencing that one
(1) MWh of energy was generated and delivered from such eligible renewable energy resource
he owner of the REC can prove that it has
purchased renewable energy.
Replacement Assigned Rights and Obligations means any Assigned Rights and
Obligations other than the Initial Assigned Rights and Obligations.
Replacement Price means, with respect to any Shortfall Quantity of Base
Quantities and Delivery Hour and Delivery Point, the price at which Purchaser, acting in a
Commercially Reasonable manner, purchases at the applicable Delivery Point Replacement
Product for such Shortfall Quantity, plus (i) costs reasonably incurred by Purchaser in purchasing
Replacement Product, and (ii) additional transmission charges, if any, reasonably incurred by
Purchaser to the applicable Delivery Point, or at option, the market price at the
Delivery Point for such Product not delivered as determined by Purchaser in a Commercially
Reasonable manner. The Replacement Price for any Shortfall Quantity shall not include any
administrative or other internal costs incurred by Purchaser and shall be limited to a price that is
Commercially Reasonable with respect to the timing and manner of purchase. In no event shall the
Replacement Price include any penalties, ratcheted demand or similar charges, nor shall Purchaser
be required to utilize or change its utilization of its owned or controlled assets or market positions
.
Replacement Product
Shortfall Quantity at the Delivery Point where such Shortfall Quantity occurred; provided that
such Energy is purchased for delivery in the Delivery Hour to which such Shortfall Quantity
relates.
Reset Period Reset Period Re-Pricing Agreement.
Reset Period Notice Section 3.4(a).
RPS Law California Renewable Energy Resources Act, as
implemented and amended from time to time, and any successor Law.
Schedule Scheduled Scheduling Issuer, Purchaser
and/or their designated representatives, including each Party Transmission Providers, if
applicable, of notifying, requesting and confirming to each other the quantity and type of Product
to be delivered during any given portion of the Delivery Period at a specified Delivery Point.
Shortfall Quantity in Section 4.1(a).
Transmission Provider
the Product on behalf of Issuer or Purchaser to or from the Delivery Point.
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Trustee [______], and its successors as trustee under the Bond Indenture.
Utility Revenues means all charges received for, and all other income and
electric utility system, or arising
electric utility system, including income derived from the sale or use of electric
electric utility system,
electric
utility system or incidental to the operation of P electric utility system or from any
electric utility
electric utility system, but exclusive in every case of any moneys derived from the levy or
collection of taxes upon any taxable property within the jurisdictional boundaries of Purchaser.
Voided Remarketing Election Notice Section 3.4(b).
Western EIM
under the CAISO Tariff.
WREGIS means the Western Renewable Energy Generation Information System
or its successor.
Section 1.2 Definitions; Interpretation Articles Sections
Schedules Exhibits Articles, Sections, Schedules and Exhibits, as the case may
be, of this Agreement unless otherwise specifically provided. Section headings in this Agreement
are included herein for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect. Any of the terms defined
herein may, unless the context otherwise requires, be used in the singular or the plural, depending
statement, term or matter, shall not be construed to limit such statement, term or matter to the
specific items or matters set forth immediately following such word or to similar items or matters,
without limitation but not limited to
of similar import) is used with reference thereto, but rather shall be deemed to refer to all other
items or matters that fall within the broadest scope of such general statement, term or matter.
Except where expressly provided otherwise, any reference herein to any agreement or document
includes all amendments, supplements or restatements to and of such agreement or document as
may occur from time to time in accordance with its terms and the terms hereof, and any reference
to a party to any such agreement includes all successors and assigns of such party thereunder
permitted by the terms hereof and thereof.
ARTICLE II.
DELIVERY PERIOD; NATURE OF CLEAN ENERGY PROJECT II; CONDITION
PRECEDENT
Section 2.1 Delivery Period. Subject to Section 2.2, delivery of Product by Issuer to
Purchaser shall commence at the beginning of the Delivery Period and, except for any Reset Period
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for which a Remarketing Election Notice is in effect as provided in Section 3.4(b), shall continue
throughout the Delivery Period.
Section 2.2 Condition Precedent. Notwithstanding anything to the contrary herein,
commencement of deliveries and the rights and obligations of Issuer and Purchaser hereunder are
subject to the condition precedent that Issuer shall have entered into the Master Power Supply
Agreement and shall have issued the Bonds.
Section 2.3 Pledge of this Agreement. Purchaser acknowledges and agrees that Issuer
will pledge its right, title and interest under this Agreement during the Delivery Period and the
revenues to be received under this Agreement during the Delivery Period
obligations under the Bond Indenture.
ARTICLE III.
SALE AND PURCHASE; PRICING
Section 3.1 Sale and Purchase of Product. Issuer shall sell and deliver or cause to be
delivered to Purchaser, and Purchaser shall purchase and receive from Issuer, the applicable
Product in the quantities, at the times and places, subject to the terms and conditions set forth in
this Agreement. The quantities of Product to be sold and delivered and purchased and received
pursuant to the terms and conditions set forth in this Agreement shall be equal to (a) the Base
Quantity, if any, for each Delivery Hour and (b) the Assigned Products delivered in each Month
of the Delivery Period to or for the account of J. Aron pursuant to an Issuer Assignment
Agreement. The Base Quantity shall be delivered and received at the Base Delivery Point, and the
Assigned Quantity to be delivered in accordance with each Issuer Assignment Agreement shall be
delivered and received at the Assigned Delivery Point specified in such Issuer Assignment
Agreement.
Section 3.2 Purchaser Payments.
(a) For each Month for which an EPS Energy Period is in effect during the
Delivery Period:
(i) Purchaser shall pay Issuer the sum, for all Assigned PPAs,
of the product of the Assigned Prepay Quantities set forth in Exhibit A-2
hereto for each Month and the applicable Contract Price therefor, provided
that Issuer shall owe a payment to Purchaser to the extent that the Contract
Price for Assigned Prepay Quantities is negative;
(ii) Purchaser shall pay Issuer the product, for each Assigned
PPA, of (A) the Assigned PAYGO Product delivered pursuant to such
Assigned PPA and received by Purchaser in such Month and (B) the
Contract Price for such Assigned PAYGO Product; provided that, solely
with respect to Assigned PAYGO Product delivered pursuant to Purchaser
Assigned PPAs, Purchaser shall owe a separate PPA Gross Payment for
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each Purchaser Assigned PPA consistent with the terms of the Purchaser
PPA Custodial Agreement, and, upon satisfying its obligations under the
Purchaser PPA Custodial Agreement in respect of such amount (after taking
into consideration any [PPA Seller Payment Obligation (as such term is
defined in the PPA Custodial Agreement)] credited to Purchaser in respect
thereof)], any portion of such amount attributable to Assigned PAYGO
Product shall be deemed to be paid by Purchaser to the applicable APC
Party on behalf of J. Aron and shall satisfy the obligations of the respective
parties under each of the Electricity Sale and Service Agreement, the Master
Power Supply Agreement, and this Agreement to pay for such Assigned
PAYGO Product; and
(iii) to the extent that Base Quantities are delivered hereunder in
any Delivery Hour in any Month during the Delivery Period, Purchaser shall
pay Issuer the applicable Contract Price therefor multiplied by the Base
Quantities actually delivered.
(b) The Contract Price for Assigned Energy is inclusive of any amounts due in
respect of other Assigned Products; provided that, to the extent an Assigned PPA provides for the
separate settlement of amounts due thereunder for (i) Assigned Energy and (ii) other Assigned
Products under such Assigned PPA, such amounts will be separately settled under this Agreement
and the PPA Custodial Agreements consistent with the settlement terms of the applicable Assigned
PPA. For example, if (A) an Assigned PPA provides that (I) the portion of the APC Contract Price
attributable to Assigned Energy is payable in the Month following delivery of such Assigned
Energy and (II) the portion of the APC Contract Price attributable to Assigned RECs is payable in
the Month following the delivery of the certificates that are associated with the Assigned RECs,
and (B) such Assigned RECs and their associated certificates are delivered one or more Months
after delivery of the associated Assigned Energy, then separate payments for such Assigned
Energy and the associated Assigned RECs shall be made under this Agreement and the PPA
Custodial Agreements in the respective Months following the delivery of the Assigned Energy and
the associated Assigned RECs.
Section 3.3 Annual Refund. In addition to any Monthly Discount Percentage applied
to Energy Scheduled hereunder, Issuer shall credit such Annual Refund to Purchaser as may be
available for distribution by Issuer pursuant to Section 5.12(b) of the Bond Indenture during the
Delivery Period, subject to the provisions of this Section 3.3 and in accordance with the Project
Agreement. Such Annual Refund, if any, shall be credited to the next amount due from Purchaser
following the release of funds for such purpose to Issuer under the terms of the Bond Indenture.
In determining the amount of such Annual Refund, if any, to be credited to Purchaser, Issuer may
reserve such funds (i) as may be required under the terms of the Bond Indenture or (ii) as it deems
reasonably necessary and appropriate, including but not limited to amounts required (a) to fund or
maintain the Minimum Discount Percentage for any future Reset Period, (b) to fund or maintain
any rate stabilization or working capital reserve, (c) to reserve or account for unfunded liabilities
and expenses, including future sinking fund or other principal amortization of the Bonds, or (d)
for other costs of the Clean Energy Project II.
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Section 3.4 Reset Period Remarketing.
(a) Reset Period Notice. For each Reset Period, Issuer shall provide to
Purchaser, at least ten (10) days prior to the Remarketing Election Deadline, written notice (a
Reset Period Notice setting forth (i) the duration of such Reset Period, (ii) the estimated
Available Discount Percentage for such Reset Period, and (iii) the applicable Remarketing Election
Deadline. Issuer may thereafter update such notice at any time prior to the Remarketing Election
Deadline and in any such update may extend the Remarketing Election Deadline in its sole
discretion.
(b) Remarketing Election. If the Reset Period Notice (or any update thereto)
for any Reset Period indicates that the estimated Available Discount Percentage specified in such
notice is not at least equal to the Minimum Discount Percentage for such Reset Period, then: (i) a
Potential Remarketing Event Purchaser may, not later than the
Remarketing Election Deadline, issue a written notice in the form attached hereto as Exhibit C (a
Remarketing Election Notice Issuer, Prepay LLC and the Trustee electing for all Base
Quantities with respect to such Reset Period to be remarketed; provided, however, if the actual
Available Discount Percentage, as finally determined under the Re-Pricing Agreement, is equal to
or greater than the Minimum Discount Percentage, then Issuer may, in its sole discretion, elect by
Voided Remarketing Election Notice to Purchaser to treat such Remarketing
Election Notice as void. If Purchaser issues a valid Remarketing Election Notice (other than a
Voided Remarketing Election Notice) in accordance with this Section 3.4(b) for any Reset Period,
then (x) Purchaser shall have no rights or obligations to pay for or receive any Product hereunder
during such Reset Period or to receive any Annual Refund attributable to such Reset Period and
(y) Issuer shall exercise its right to terminate any Issuer Assignment Agreements and Purchaser
Assignment Agreements, as applicable, effective as of the end of the Month immediately preceding
any Reset Period for which Purchaser has issued a valid Remarketing Election Notice.
(c) Final Determination of Available Discount Percentage. The Parties
acknowledge and agree that the final Available Discount Percentage for any Reset Period
following the Initial Reset Period will be determined on the Re-pricing Date (as defined in the Re-
Pricing Agreement) for such Reset Period, and that such Available Discount Percentage may differ
from the estimate or estimates of such Available Discount Percentage last provided to Purchaser
prior to the Remarketing Election Deadline for such Reset Period; provided that the Available
Discount Percentage for any Reset Period will not be less than the lower of (i) the last estimated
Available Discount Percentage set forth in the Reset Period Notice for such Reset Period (or any
update thereof) sent to Purchaser by Issuer and (ii) the Minimum Discount Percentage for Reset
Period.
(d) Obligations Following a Remarketing Election. Notwithstanding the
issuance of any Remarketing Election Notice for a Reset Period, (i) Purchaser will remain
obligated to purchase the Base Quantities (and any Assigned Products assigned pursuant to Issuer
Assignment Agreements) hereunder for each subsequent Reset Period, unless Purchaser issues a
new valid Remarketing Election Notice (other than a Voided Remarketing Election Notice) for
such subsequent Reset Period in accordance with this Section 3.4; and (ii) Purchaser shall not make
any new commitment to purchase Priority Products during such Reset Period if Purchaser
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reasonably expects such commitment to cause, during any portion of the Delivery Period after
such Reset Period, ducts (including its
obligation to purchase Priority Products hereunder) to exceed
requirements for Products that will be used (A reas.
Reg. § 1.148-1(e)(2)(iii) and (B
within the meaning of Section 141 of the Code. Unless Purchaser issues a new Remarketing
Election Notice (other than a Voided Remarketing Election Notice) for any subsequent Reset
Period in accordance with this Section 3.4, Purchaser will cooperate with J. Aron in good faith and
exercise Commercially Reasonable Efforts, in each case pursuant to Section 6.1 hereof, to locate
EPS Compliant Energy for redelivery hereunder in any such Reset Period.
Section 3.5 Limited Obligation to Take Base Quantities. Notwithstanding anything to
the contrary in this Agreement, Purchaser shall not be required to purchase and receive any Base
Quantities hereunder, and, unless otherwise mutually agreed upon by the Parties in writing, Issuer,
with respect to any Base Quantities that otherwise would be delivered hereunder, shall cause
Prepay LLC to remarket such Base Quantities pursuant to the provisions of Exhibit C to the Master
Power Supply Agreement.
Section 3.6 Partial Suspension of Issuer Assigned PPA PSAs. The Parties hereby
acknowledge and agree that any Issuer Assigned PPA PSAs shall remain in full force and effect
during the Assignment Period for each relevant Assigned PPA, provided that the portion of their
rights and obligations thereunder that constitute Assigned Rights and Obligations shall be
during the Assignment Period for each Relevant Assigned PPA.
ARTICLE IV.
FAILURE TO SCHEDULE PRODUCT
Section 4.1 .
(a) Shortfall Quantity. If, for any Delivery Hour during the Delivery Period,
Issuer breaches its obligation to Schedule or deliver all or any portion of the Base Quantity, after
giving effect to reductions for Assigned Energy in accordance with Article VI, at any Delivery
Point pursuant to the terms of this Agreement and such breach is not excused by the provisions of
Article XI, then the portion of the Base Quantity that Issuer failed to Schedule or deliver shall be
Shortfall Quantity
(b) Issuer Cover Damage Payments. Issuer shall pay to Purchaser, for each
Shortfall Quantity that Issuer fails to Schedule or deliver in a Delivery Hour at the applicable
Delivery Point, the result determined by the following formula:
P = Q x (RP - CP + AF)
Where:
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P = The amount payable by Issuer under this Section 4.1(b) for such
Shortfall Quantity, Delivery Hour and Delivery Point;
Q = Such Shortfall Quantity and Delivery Point for such Delivery
Hour;
RP = The Replacement Price for such Shortfall Quantity, Delivery Hour
and Delivery Point;
CP = The Contract Price for the Shortfall Quantity of Base Product and
such Delivery Hour and Delivery Point; and
AF = The Administrative Fee.
(c) Purchaser Obligation to Mitigate. Purchaser shall exercise Commercially
Section 4.2
Force Majeure). If, for any Delivery Hour during the Delivery Period, Purchaser breaches its
obligation to Schedule or receive all or any portion of the Base Quantity at any Delivery Point
pursuant to the terms of this Agreement and such breach is not excused by the provisions of Article
XI, then Purchaser shall remain obligated to pay Issuer the Contract Price for such Base Quantity.
revenues Issuer receives from Prepay LLC under
the Master Power Supply Agreement in connection with the ultimate sale of any such Product by
Prepay LLC to other Municipal Utilities, up to the Contract Price.
Section 4.3 Assigned Product. Except as otherwise set forth herein, neither Purchaser
nor Issuer shall have any liability or other obligation to one another for any failure to Schedule,
receive, or deliver Assigned Product.
Section 4.4 Sole Remedies. Except with respect to termination of this Agreement
pursuant to Article XVII, the remedies set forth in this Article IV
exclusive remedies against the other Party for any failure by the other Party to Schedule, deliver
or receive Product, as applicable, pursuant to this Agreement.
ARTICLE V.
DELIVERY POINTS; SCHEDULING
Section 5.1 Delivery Points.
(a) Base Delivery Points. All Base Product delivered under this Agreement
shall be Scheduled for delivery and receipt at (i) the Delivery Point set forth in Exhibit A-1 (the
Primary Delivery Point Alternate Delivery Point
mutually agreed by Issuer, Purchaser and Prepay LLC (the Primary Delivery Point or, to the extent
Base Delivery Point Energy to
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Purchaser at the Primary Delivery Point shall be facilitated through submission of Inter-SC Trades,
as defined in the CAISO Tariff ISTs
the CAISO market for this purpose as specified in Exhibit G.
(b) Alternate Base Market Prices. The Day-Ahead Market Price and Real-Time
Market Price for each Alternate Delivery Point, as applicable, shall be the price mutually agreed
and identified by the Parties, or if no such price is identified for such Alternate Delivery Point, the
Day-Ahead Market Price and Real-Time Market Price, as applicable, specified on Exhibit A-1 for
the Primary Delivery Point from which quantities are being shifted to such Alternate Delivery
Point.
(c) Assigned Energy Delivery Points. Assigned Energy delivered under this
Agreement shall be Scheduled for delivery and receipt at the applicable Assigned Delivery Point
specified in the applicable Assigned PPA. All other Assigned Product shall be delivered consistent
with the terms of the applicable Issuer Assignment Agreement.
Section 5.2 Transmission and Scheduling. Issuer shall Schedule or arrange for
Scheduling services with CAISO in accordance with the CAISO Tariff, to deliver the Base Product
to the Base Delivery Point. Purchaser shall Schedule or arrange for Scheduling services with
CAISO in accordance with CAISO Tariff, to receive the Base Product at the Base Delivery Point.
If Prepay LLC Schedules or arranges for Scheduling services, to deliver Base Product to the Base
Delivery Point, then obligations under this Section shall be relieved pro tanto. Scheduling
of Assigned Energy shall be in accordance with the applicable Assignment Agreement.
Section 5.3 Title and Risk of Loss. Title to and risk of loss of the Product delivered
under this Agreement shall pass from Issuer to Purchaser at the applicable Delivery Point. The
transfer of title and risk of loss for all Assigned Product shall be in accordance with the applicable
Issuer Assignment Agreement and Purchaser Assignment Agreement, if any; provided that all
Issuer Assignment Agreements and Purchaser Assignment Agreements shall provide for the
transfer of Renewable Energy Credits in accordance with WREGIS. Subject to Section 18.1, each
Party shall indemnify, defend and hold harmless the other Party from and against any Claims made
by a third party arising from or out of any event, circumstance, act or incident related to the Product
delivered hereunder first occurring or existing during the period when control and title to Base
Product or Assigned Product is vested in the indemnifying Party as provided in this Section;
provided that, notwithstanding the foregoing, (a) Issuer shall have no obligation to indemnify,
defend or hold harmless Purchaser for any such Claims relating to replacement costs, cover
damages or similar liabilities that are payable to any Person because of Purchaser
deliver any Product to such Person and (b) no obligation to indemnify, defend or hold harmless
shall supplant or control the provisions of this Agreement relating to Force Majeure.
Notwithstanding anything to the contrary herein, no Party shall have any obligation to indemnify,
defend or hold harmless the other Party in respect of any Claims relating to any Assigned Product.
Section 5.4 Communications Protocol. With respect to the Scheduling and delivery of
Base Quantities, Issuer and Purchaser shall comply with the communications protocol set forth in
Exhibit G. Scheduling and transmission of Assigned Energy shall be in accordance with the
applicable Issuer Assignment Agreement and Purchaser Assignment Agreement, if any, pursuant
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to which (x) Issuer or its designee shall act as the scheduling coordinator with respect to any Issuer
Assigned PPA and (y) Purchaser or its designee shall act as the scheduling coordinator with respect
to any Purchaser Assigned PPA.
Section 5.5 Deliveries within CAISO or another Balancing Authority. The Parties
acknowledge that Energy delivered by Issuer at a Delivery Point within CAISO or another
Balancing Authority (including a Balancing Authority operating within the Western EIM) will be
delivered in accordance with the CAISO Tariff and rules of the Balancing Authority as applicable.
Scheduling such Energy in accordance with the requirements of the applicable Product into the
applicable Balancing Authority shall constitute delivery of such Product to Purchaser hereunder,
provided that any associated Renewable Energy Credits and other Assigned Product are also
delivered to Purchaser.
Section 5.6 Assigned Products. Notwithstanding anything to the contrary herein,
except as provided in Section 5.3, Issuer shall have no liability under this Article V with respect
to any Assigned Products.
ARTICLE VI.
ASSIGNMENT OF POWER PURCHASE AGREEMENTS
Section 6.1 Assignments Generally.
(a) Initial Assigned Rights and Obligations. Concurrently with the
execution of this Agreement, Issuer has assigned the Initial Assigned Rights and
Obligations to J. Aron.
(b) Assignments of Replacement Assigned Rights and Obligations.
(i) Commencing one year prior to the expiration of any EPS
Energy Period or otherwise immediately upon the early termination or
anticipated early termination of an EPS Energy Period, Issuer and Purchaser
shall exercise Commercially Reasonable Efforts and cooperate with J. Aron
in good faith to assign to J. Aron all or a portion of
as applicable, rights and obligations (together with the Initial Assigned
Rights and Obligations, Assigned Rights and Obligations under (x)
one or more Issuer Assigned PPAs or (y) one or more Purchaser Assigned
PPAs (any such power purchase agreement under clause (x) or (y), an
Assignable Power Contract . For added clarity, the Parties acknowledge
and agree that (I) only an Issuer Assignment Agreement shall be required
for an Issuer Assigned PPA described in clause (x) of the preceding
sentence and no Purchaser Assignment Agreement shall be required with
respect thereto; (II) both an Issuer Assignment Agreement and a Purchaser
Assignment Agreement shall be required with respect to a Purchaser
Assigned PPA described in clause (y) of the preceding sentence; and (III)
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an Issuer Assignment Agreement for the redelivery of Assigned Rights and
Obligations under this Agreement.
(ii) The Parties recognize that, in the case of such an assignment,
J. Aron will be obligated to sell and deliver Assigned Product it receives
under all Assigned Rights and Obligations to Prepay LLC under the terms
of the Electricity Sale and Service Agreement, and Prepay LLC will be
obligated to deliver such Product to Issuer under the terms of the Master
Power Supply Agreement. To be effective hereunder, any assignment of
Replacement Assigned Rights and Obligations must be agreed and
consented to by J. Aron. For all Assignment Periods following the Initial
Assignment Periods, the APC Contract Price under each Issuer Assignment
Agreement shall be the Day-Ahead Average Price, unless Issuer, Purchaser,
Prepay LLC and J. Aron agree to appropriate amendments to the relevant
documents to accommodate a different price.
(c) J. Aron Procurement of EPS Compliant Energy. Under certain
circumstances specified in Section 6.1(c) of the Electricity Sale and Service
Agreement, J. Aron is obligated to exercise Commercially Reasonable Efforts to
obtain EPS Compliant Energy for ultimate redelivery to Purchaser hereunder, and,
in such case, Purchaser shall cooperate in good faith with J. Aron in connection
therewith, provided that:
(i)
written consent, with such consent not to be unreasonably withheld,
provided, for the avoidance of doubt, that it shall be reasonable for
Purchaser to withhold its consent based on (x) the requirements of the EPS
or other regulatory requirements or (y) proposed pricing terms;
(ii) Issuer and Purchaser may agree upon appropriate
amendments to this Agreement to facilitate the delivery of such EPS
Compliant Energy, including with respect to the Delivery Point,
consequences of failing to deliver or receive and scheduling matters;
(iii) the period of delivery for any such EPS Compliant Energy
J. Aron EPS Energy Period
length, as applicable, of (A) the then-current Reset Period if such EPS
Compliant Energy is obtained for delivery for the remainder of a Reset
Period and (B) the length of the next succeeding Reset Period if such EPS
Compliant Energy is obtained for delivery commencing in such succeeding
Reset Period; and
(iv) during a J. Aron EPS Energy Period, if requested by J. Aron,
Issuer and Purchaser shall continue to exercise Commercially Reasonable
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Efforts and cooperate with J. Aron in good faith to assign Assigned Rights
and Obligations to J. Aron under an Assignable Power Contract.
(d) Amendments. Purchaser and Issuer agree to seek the written
consent of J. Aron prior to any amendment to this Article VI or Exhibit F hereto.
(e) Present Assignment of Assigned PPA Damages to Purchaser. The
Parties hereto acknowledge that the terms of the Issuer Assignment Agreements
shall not entitle J. Aron to damages from an APC Party under an Assigned PPA for
Assigned PPA Damages
Nonetheless, (i) the Parties acknowledge that, pursuant to the Electricity Sale and
Service Agreement, J. Aron has presently assigned and transferred to Prepay LLC
all right, title and interest in and to any Assigned PPA Damages that J. Aron may
become entitled to receive, and pursuant to the Master Power Supply Agreement,
Prepay LLC has presently assigned and transferred to Issuer all right, title and
interest in and to any Assigned PPA Damages that Prepay LLC may become
entitled to receive; and (ii) Issuer hereby presently transfers and assigns to
Damages that Issuer may become entitled to receive.
Section 6.2 Failure to Obtain EPS Compliant Energy. To the extent an EPS Energy
Period terminates or expires and Purchaser and J. Aron have been unable to obtain EPS Compliant
Energy for delivery hereunder pursuant to the provisions of Section 6.1, then, until EPS Compliant
Energy is obtained for delivery hereunder, the Parties acknowledge that Prepay LLC shall remarket
Agreement, subject to the following:
(a) the requirements set forth in Section 6.1 shall continue to apply; and
(b) Purchaser shall not make any new commitment to purchase Priority
Products during such a remarketing.
Section 6.3 Early Termination of Assignment Periods and Updates to Exhibits.
(a) The reduction in Base Quantity for each Delivery Hour during an
Assignment Period after giving effect to an Issuer Assignment Agreement (each, a
Base Quantity Reduction shall be calculated in accordance with this Section
6.3(a). For the Initial Assignment Periods, the Base Quantity Reductions have been
calculated as follows: the Base Quantity Reduction for each Delivery Hour of the
Initial Assignment Periods equal (i) the Assigned Prepay Quantity for each such
Delivery Hour (which will be determined by dividing the Assigned Prepay Quantity
for the applicable Month by the number of Delivery Hours in such Month),
multiplied by (ii) the result of (A) the APC Contract Price applicable for such Hour,
divided by (B) [NOTE: To list the result of the following formula as determined
at pricing: Front End Fixed Price for Base Quantities + (Active Swap Fee
Standby Swap Fee).]. For any Assignment Period other than the Initial Assignment
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Periods, the Base Quantity Reduction for each Delivery Hour of the relevant
Assignment Period shall equal (i) the Assigned Prepay Quantity for each such
Delivery Hour (which will be determined by dividing the Assigned Prepay Quantity
for the applicable Month by the number of Delivery Hours in such Month),
multiplied by (ii) the result of (A) Fixed Price for Assigned Prepay Quantities
outside of the Initial Assignment Periods divided by (B) the Fixed Price for Base
Quantities; provided that if the Base Quantity Reduction for any Delivery Hour
would result in a Base Quantity of less than zero, then the Assigned Prepay Quantity
for such Delivery Hour will be reduced to the closest whole MWh such that the
Base Quantity is not reduced below zero.
(b) Effective upon the first day of the second Month following the early
termination of an Assignment Period for any reason, Issuer shall revise Exhibits A-
1 and A-2 to (i) reverse the Base Quantity Reductions associated with the
Assignment Period that terminated for all remaining Hours in the Delivery Period
and (ii) update the Base Quantity Reductions with the applicable formula set forth
in Section 6.3(a). In the case of any other commencement of a subsequent
Assignment Period, Issuer shall revise (A) the Base Quantity in Exhibit A-1 with
the applicable formula set forth in Section 6.3(a) and (B) Exhibit A-2 to reflect the
details for such Assignment Period. In making any revisions to Exhibit A-1 and
Exhibit A-2 as contemplated by this Section 6.3, all such revisions shall be made
in the same amount and in the same direction as, and at the same time as, any
corresponding adjustments under the Master Power Supply Agreement, so that any
adjustment to exhibits under the Prepaid Agreement remain fully aligned with
adjustments made under this Agreement.
Section 6.4 J. Aron Non-Payment to APC Party.
(a) To the extent that (a) J. Aron fails to pay when due any [J. Aron
Prepay Payment] (as defined in the PPA Custodial Agreements) and (b) Purchaser
makes a payment for such amount to the applicable APC Party, Purchaser shall
provide notice thereof to Issuer and Issuer shall make a payment to Purchaser in
the amount of such non-payment from and to the extent of funds available for such
purpose under the Indenture.
(b) The Parties acknowledge that Issuer has the right to appoint a
Issuer-Appointed Director Prepay LLC,
and the Issuer-
Amended & Restated Limited Liability Company Agreement, dated [____], shall
have sole decision-making authority with respect to enforcement by Prepay LLC
of the GSG Guaranty (as defined in the Electricity Sale and Service Agreement) of
Issuer
agrees that it shall instruct the Issuer-Appointed Director to exercise such voting
rights in favor of Prepay LLC promptly enforcing its right to payment of any
amounts that are due from but unpaid by J. Aron under [Section 6.4] of the
Electricity Sale and Service Agreement.
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ARTICLE VII.
USE OF PRODUCT
Section 7.1 Tax Exempt Status of the Bonds. Purchaser acknowledges that the Bonds
will be issued with the intention that the interest thereon will be exempt from federal taxes under
Section 103 of the Code. Accordingly, Purchaser agrees that it will (a) provide such information
with respect to its utility system as may be requested by Issuer in order to establish the tax-exempt
status of the Bonds, and (b) act in accordance with such written instructions as Issuer may provide
from time to time in order to maintain the tax-exempt status of the Bonds. Purchaser further agrees
that it will not at any time take any action, or fail to take any action, that, if taken or omitted,
respectively, would adversely affect the tax-exempt status of the Bonds. The Parties further
acknowledge that, effective as of the commencement date of any Reset Period, the Base Quantity
and Assigned Quantity may be reduced upon written notice of Issuer to Purchaser to a level
(including to zero aggregate Base Quantity and Assigned Quantity for such Reset Period) that
enables Special Tax Counsel, in its sole discretion, to deliver any opinion required from Special
Tax Counsel to remarket the Bonds or issue refunding bonds as obligations the interest on which
is excluded from gross income under Section 103 of the Code; provided furthermore that, in the
case of a reduction of the aggregate Base Quantity and Assigned Quantity for a Reset Period to
zero, the Issuer shall exercise its right to terminate any Issuer Assignment Agreements and
Purchaser Assignment Agreements, as applicable, as of the end of the immediately preceding Reset
Period.
Section 7.2 Priority Products. Purchaser agrees to purchase and receive the Base
Quantities and Assigned Quantities to be delivered under this Agreement (a) in priority over and
in preference to all other Products available to Purchaser that are not Priority Products; and (b) on
at least a pari passu and non-discriminatory basis with other Priority Products.
Section 7.3 Assistance with Sales to Third Parties. If (a) (i) a quantity of Assigned
Product less than the Assigned Prepay Quantity under an Assigned PPA is delivered in any Month
during an Assignment Period for any reason other than Force Majeure or (ii) an Assigned PPA FM
Remarketing Event has occurred and is in effect (as defined in Exhibit F to the Master Power
Supply Agreement) (in which case such Purchaser will be deemed to have been unable to receive
such Product), (b) Issuer is required under Section 3.5 to cause Base Quantities that otherwise
would be delivered hereunder to be remarketed or (c)
with Section 7.1, Purchaser does not require all or any portion of the Assigned Prepay Quantities
to meet its requirements for Energy for any Hour or Month that it is obligated to purchase under
this Agreement as a result of (i) insufficient
in Law, Purchaser may, with reasonable notice issued in a remarketing notice similar in form to
Attachment 2 to Exhibit G, request (and, in the case of clauses (a) and (b), shall be deemed to
request) that Prepay LLC, as permitted by the Master Power Supply Agreement, sell such portion
of such Base Quantities or Assigned Energy (A) to another Municipal Utility, or (B) if necessary,
to another purchaser. Any remarketing notice issued under clause (c)(ii) above shall constitute a
Structural Remarketing Notice (as defined in the Master Power Supply Agreement) and shall be
subject to the requirements set forth in the Master Power Supply Agreement. If Prepay LLC makes
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such a sale under Exhibit C to the Master Power Supply Agreement, Issuer shall credit against the
amount owed by Purchaser to Issuer hereunder the amount received by Issuer from Prepay LLC
for such sales less all costs and expenses directly incurred by Issuer, including but not limited to
remarketing administrative charges paid by it to Prepay LLC under the Master Power Supply
Agreement, but in no event shall the amount of such credit be more than the Contract Price for the
Energy so sold.
Section 7.4 Qualifying Use
Article VII, Purchaser agrees that, subject to Section 7.5, it will use all of the Product purchased
under this Agreement in compliance with the Qualifying Use Requirements. Purchaser agrees that
it will provide such additional information, records and certificates as Issuer may reasonably
request to confirm Pur Section 7.4.
Section 7.5 Remediation.
(a) The Parties acknowledge that Purchaser may at times inadvertently
remarket Products received hereunder in a manner that does not comply with
Qualifying Use Requirements due to daily and Hourly
Product needs. To the extent Purchaser does so, Purchaser shall (a) exercise
Commercially Reasonable Efforts to use any Disqualified Sale Proceeds of such
remarketing to purchase Products (other than Priority Products) that Purchaser then
uses in compliance with the Qualifying Use Requirements and (b) reserve funds in
an amount equal to any Disqualified Sale Proceeds until such Disqualified Sale
Proceeds are remediated or transferred to the Trustee pursuant to Section 7.6(b)
below.
(b) To the extent that all or a portion of any Base Quantities or Assigned
Prepay Quantities are remarketed under Section 7.3 and any such remarketing
results in a Ledger Entry (as defined in the Master Power Supply Agreement),
Purchaser agrees that it shall (i) exercise Commercially Reasonable Efforts to use
an amount equivalent to the remarketing proceeds associated with any such Ledger
Entry to purchase Non-Priority Products and use such Non-Priority Products in
compliance with the Qualifying Use Requirements in order to remediate such
Ledger Entries; and (ii) apply its purchases of Non-Priority Products to remediate
any such proceeds under the Master Power Supply Agreement prior to remediating
such proceeds under any other contract that provides for the purchase of Priority
Energy. To this Section
7.5(b), Purchaser shall deliver a remediation certificate in the form of Exhibit I to
Issuer and Prepay LLC by the twentieth day of the Month subsequent to any
relevant Non-Priority Products purchases (which may include purchases of Energy
from CAISO to the extent such Energy is used in compliance with the Qualifying
Use Requirements); provided that the Parties acknowledge and agree that any
purchases of Assigned PAYGO Products (commencing with purchases of Assigned
PAYGO Products in the Month in which any such Ledger Entry occurs) shall be
applied to remediate any such Ledger Entries. For Ledger Entries remediated under
this Section 7.5(b) that have not otherwise been remediated by Prepay LLC
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pursuant to the remarketing provisions of the Master Power Supply Agreement,
Issuer shall pay Purchaser any portion of the Monthly Discount Percentage
associated with such Ledger Entries that is available under the Bond Indenture on
or before the last Business Day of the Month in which Purchaser provides a
certificate under this Section 7.5(b) evidencing such remediation.
(c) To the extent that Issuer effects a partial redemption of the Bonds in
order to avoid a Ledger Event under and as defined in the Master Power Supply
Agreement, Issuer may reduce the quantities of Product to be delivered hereunder
by written notice to Purchaser; provided that such reduced quantities of Product
will be reflected in an amendment to Exhibits A-1 and A-2 to this Agreement;
provided furthermore that, in the case of a reduction of the aggregate Base Quantity
and Assigned Quantity under this Agreement to zero, the Issuer shall exercise its
right to terminate any Issuer Assignment Agreements and Purchaser Assignment
Agreements, as applicable.
Section 7.6 Remediation; Ledger Entries; Redemption.
(a) Remediation. To track compliance with the requirements of Section 7.5(a),
Purchaser will provide a quarterly report to Issuer (delivered not later than the 25th day of each
April, July, October and January until the end of the Delivery Period) showing the following: the
total quantity of proceeds from sales of Products received hereunder that (i) were sold by Purchaser
to any Person in a transaction that does not comply with the Qualifying Use Requirements and (ii)
have not been remediated by Purchaser by applying such proceeds to purchase Products that are
used in compliance with the Qualifying Use Requirements (the quantities of Product producing
Disqualified Sale Units received, Disqualified Sale
Proceeds .
(b) Ledger Entries. Issuer shall report such unremediated Disqualified Sale
Proceeds and the associated Disqualified Sale Units to Prepay LLC for addition to the remarketing
ledgers maintained by Prepay LLC under the Master Power Supply Agreement, with the ledger
entries to be dated as of the end of the first month of the relevant quarter.
(c) Transfers to Trustee. Purchaser shall transfer (to the extent such
unremediated Disqualified Sales Proceeds and associated Disqualified Sale Units remain reflected
on the remarketing ledger described under Section 7.6(b) at the time such transfer is required by
this Section 7.6(c)) any such unremediated Disqualified Sale Proceeds and any other required
funds (i.e., all additional funds necessary for redemption of the Bonds referred to in this
Section 7.6(c)) to the Trustee at least 95 days prior to the second anniversary of the date on which
such unremediated Disqualified Sale Proceeds and the associated Disqualified Sale Units were
first reflected on the remarketing ledgers in accordance with Section 7.6(b), with such funds to be
deposited in the Debt Service Account (as defined in the Bond Indenture) and applied to the
redemption of Bonds as directed by Issuer and approved by Special Tax Counsel (as defined in the
Bond Indenture) as preserving the tax-exempt status of the Bonds.
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ARTICLE VIII.
REPRESENTATIONS AND WARRANTIES; ADDITIONAL COVENANTS
Section 8.1 Representations and Warranties. As a material inducement to entering into
this Agreement, each Party, with respect to itself, hereby represents and warrants to the other Party
as of the Execution Date as follows:
(a) in the case of Issuer as the representing Party, Issuer is a joint powers
authority, duly organized and validly existing under the Laws of the State of California,
(b) in the case of Purchaser as the representing Party, Purchaser is a public
agency of the State of California, duly organized and validly existing under the Laws of the State
of California;
(c) it has all requisite power and authority, corporate or otherwise, to own its
material properties, carry on its material business as now being conducted, enter into, deliver and
to perform its obligations under this Agreement and to carry out the terms and conditions hereof
and the transactions contemplated hereby;
(d) there is no litigation, action, suit, proceeding with service of process
knowledge, threatened, in each case before or by any Government Agency and, in each case, which
could reasonably be anticipated to materially and adversely affect such Party
its obligations under this Agreement or that questions the validity, binding effect or enforceability
hereof, any action taken or to be taken by such Party pursuant hereto, or any of the transactions
contemplated hereby;
(e) the execution, delivery and performance of this Agreement by such Party
have been duly authorized by all necessary action on the part of such Party and its governing body
and do not require any approval or consent of any security holder of such Party or any holder (or
any trustee for any holder) of any indebtedness or other obligation of such Party;
(f) this Agreement has been duly executed and delivered on behalf of such
Party by an appropriate officer or authorized Person of such Party and constitutes the legal, valid
and binding obligation of such Party, enforceable against it in accordance with its terms, as such
enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
except possibly for Sections 12.2 and 12.3;
(g) the execution, delivery and performance of this Agreement by such Party
shall not violate any provision of any Law, order, writ, judgment, decree or other legal or
regulatory determination applicable to it;
(h) the execution, delivery and performance by such Party of this Agreement,
and the consummation of the transactions contemplated hereby, including the incurrence by such
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Party of its financial obligations under this Agreement, shall not result in any violation of any term
of any material contract or agreement applicable to it, or any of its charter or bylaws or of any
license, permit, franchise, judgment, writ, injunction or regulation, decree, order, charter, Law,
ordinance, rule or regulation applicable to it or any of its properties or to any obligations incurred
by it or by which it or any of its properties or obligations are bound or affected, or of any
determination or award of any arbitrator applicable to it, and shall not conflict with, or cause a
breach of, or default under, any such term or result in the creation of any lien upon any of its
properties or assets, except with respect to Issuer, the lien of the Bond Indenture;
(i) no Governmental Approval is required in connection with the valid
authorization, execution, delivery and performance by such Party of this Agreement or the
consummation of any of the transactions contemplated hereby other than those Governmental
Approvals that have been obtained; and
(j) it enters this Agreement as a bona-fide, arms-length transaction involving
the mutual exchange of consideration and, once executed by both Parties, considers this Agreement
a legally enforceable contract.
Section 8.2 Warranty of Title. Issuer warrants that it will deliver to Purchaser (a) all
Base Product free and clear of all liens, security interests, claims and encumbrances or any interest
therein or thereto by any Person arising prior to the Delivery Point, and (b) all Assigned Product
free and clear of all liens, security interests, claims and encumbrances or any interest therein or
thereto by any Person that are imposed on such Assigned Product solely as a result of
Prepay LLC
Section 8.3 Disclaimer of Warranties. EXCEPT FOR THE WARRANTIES
EXPRESSLY MADE BY ISSUER IN THIS Article VIII, ISSUER HEREBY DISCLAIMS ALL
WARRANTIES, EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
Section 8.4 Continuing Disclosure. Purchaser agrees to provide to Issuer: (a) such
financial and operating information as may be requested by Issuer, including most
recent audited financial statements, for use in Issuer Bonds; and (b)
annual updates to such information and statements to enable Issuer to comply with its undertakings
to enable the underwriters of the offerings of the Bonds to comply with the continuing disclosure
provisions of Rule 15c2-12 of the United States Securities and Exchange Commission. Failure by
Purchaser to comply with its agreement to provide such annual updates shall not be a default under
this Agreement, but any such failure shall entitle Issuer or an owner of the Bonds to take such
actions and to initiate such proceedings as may be necessary and appropriate to cause Purchaser to
comply with such agreement, including without limitation the remedies of mandamus and specific
performance.
ARTICLE IX.
TAXES
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As between Issuer and Purchaser, Issuer shall (i) be responsible for, and pay or
cause to be paid, all ad valorem, excise, severance, production and other taxes assessed with
respect to Product (other than any Assigned Product) delivered pursuant to this Agreement arising
prior to the applicable Delivery Point and (ii) indemnify Purchaser for any such taxes paid by
Purchaser, in each case to the extent Issuer is reimbursed or indemnified for such taxes by Prepay
LLC. As between Issuer and Purchaser, Purchaser shall (i) be responsible for all taxes with respect
to Product received pursuant to this Agreement assessed at or from the applicable Delivery Point
(other than ad valorem, franchise or income taxes which are related to the sale of Product other
than Assigned Energy and, therefore, the responsibility of Issuer) and all ad valorem, excise,
severance, production and other taxes assessed with respect to Product delivered pursuant to this
Agreement assessed against Issuer and not reimbursed or indemnified by Prepay LLC, and (ii)
indemnify Issuer and its Affiliates for any such taxes paid by Issuer or its Affiliates. Nothing shall
obligate or cause a Party to pay or be liable for any tax for which it is exempt under Law.
ARTICLE X.
JURISDICTION
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST EITHER PARTY ARISING
OUT OF OR RELATING HERETO SHALL BE BROUGHT EXCLUSIVELY IN THE COURTS
OF THE STATE OF CALIFORNIA OR OF THE UNITED STATES OF AMERICA, IN EITHER
CASE LOCATED IN LOS ANGELES COUNTY, CALIFORNIA. BY EXECUTING AND
DELIVERING THIS AGREEMENT, EACH PARTY, FOR ITSELF AND IN CONNECTION
WITH ITS PROPERTIES, IRREVOCABLY ACCEPTS GENERALLY AND
UNCONDITIONALLY THE EXCLUSIVE JURISDICTION AND VENUE OF SUCH
COURTS; WAIVES ANY DEFENSE OF FORUM NON CONVENIENS; AGREES THAT
SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH COURT MAY
BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO
THE PARTY AT ITS ADDRESS PROVIDED IN ACCORDANCE WITH ARTICLE XVI; AND
AGREES THAT SERVICE AS PROVIDED ABOVE IS SUFFICIENT TO CONFER
PERSONAL JURISDICTION OVER THE PARTY IN ANY SUCH PROCEEDING IN ANY
SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND BINDING SERVICE
IN EVERY RESPECT.
ARTICLE XI.
FORCE MAJEURE
Section 11.1 Applicability of Force Majeure. To the extent either Party is prevented by
Force Majeure from carrying out, in whole or part, its obligations under this Agreement and such
Party Claiming Party Force Majeure to the other Party as
soon as practicable, then the Claiming Party shall be excused from the performance of its
obligations with respect to this Agreement (other than the obligation to make payments then due
or becoming due with respect to performance prior to the Force Majeure). The Claiming Party
shall remedy the Force Majeure with all reasonable dispatch. For the duration of the Claiming
-performance (and only for such period), the non-Claiming Party shall not be required
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to perform or resume performance of its obligations to the Claiming Party corresponding to the
obligations of the Claiming Party excused by Force Majeure.
Section 11.2 Settlement of Labor Disputes. Notwithstanding anything to the contrary
herein, the Parties agree that the settlement of strikes, lockouts or other industrial disturbances
shall be within the sole discretion of the Party experiencing such disturbance, and the failure of a
Party to settle such strikes, lockouts or other industrial disturbances shall not prevent the existence
of Force Majeure or of reasonable dispatch to remedy the same.
ARTICLE XII.
GOVERNMENTAL RULES AND REGULATIONS
Section 12.1 Compliance with Laws. This Agreement shall be subject to all present and
future Laws of any Government Agency having jurisdiction over this Agreement or the
transactions to be undertaken hereunder, and neither Party has knowingly undertaken or will
knowingly undertake or knowingly cause to be undertaken any activity that would conflict with
such Laws; provided, however, that nothing herein shall be construed to restrict or limit either
Party Law, or its application to this Agreement or the
transactions undertaken hereunder, and neither acquiescence therein or compliance therewith for
any period of time shall be construed as a waiver of such right.
Section 12.2 Contests. Excluding all matters involving a contractual dispute between the
Parties, no Party shall contest, cause to be contested or in any way actively support the contest of
the equity, fairness, reasonableness or lawfulness of any terms or conditions set forth or established
pursuant to this Agreement, as those terms or conditions may be at issue before any Government
Agency in any proceeding, if the successful result of such contest would be to preclude or excuse
the performance by either Party of this Agreement or any provision hereunder.
Section 12.3 Defense of Agreement. Excluding all matters involving a contractual
dispute between the Parties, each Party shall hereafter defend and support this Agreement before
any Government Agency in any proceeding, if the substance, validity or enforceability of all or
any part of this Agreement is hereafter directly challenged or if any proposed changes in regulatory
practices or procedures would have the effect of making this Agreement invalid or unenforceable
or would subject either Party to any greater or different regulation or jurisdiction that materially
affects the rights or obligations of the Parties under this Agreement.
ARTICLE XIII.
ASSIGNMENT
The terms and provisions of this Agreement shall extend to and be binding upon
the Parties and their respective successors, assigns, and legal representatives; provided, however,
that, subject to Section 18.14, neither Party may assign this Agreement or its rights and interests,
in whole or in part, under this Agreement without the prior written consent of the other Party;
provided furthermore that, for the avoidance of doubt, Issuer agrees that it shall terminate any
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applicable Issuer Assignment Agreements and Purchaser Assignment Agreements concurrently
with the assignment of this Agreement. Prior to assigning this Agreement, Purchaser shall deliver
to Issuer written confirmation from each Rating Agency (as defined in the Bond Indenture),
provided that such agency has rated and continues to rate the Bonds, that the assignment will not
result in a reduction, qualification, or withdrawal of the then-current ratings assigned by such
Rating Agency to the Bonds. Whenever an assignment or a transfer of a Party this
Agreement is requested to be made with the written consent of the other Party, the assigning or
transferring Party
obligations under this Agreement of the assigning or transferring Party. Upon the agreement of a
Party to any such assignment or transfer, the assigning or transferring Party shall furnish or cause
to be furnished to the other Party a true and correct copy of such assignment or transfer and
assumption of duties and obligations.
ARTICLE XIV.
PAYMENTS
Section 14.1 Monthly Statements.
(a)s. No later than the 10th day of each Month during
the Delivery Period (excluding the first Month of the Delivery Period) and the first Month
following the end of the Delivery Period, Purchaser shall deliver to Issuer a statement (a
Shortfall Quantity in the prior Month, the
Replacement Price applicable to such Shortfall Quantity, and (ii) any other amounts due to
Purchaser in connection with this Agreement with respect to the prior Months.
(b) Billing Statements. For any Month during the Delivery Period for which
Purchaser has not issued a valid Remarketing Election Notice, Issuer shall deliver billing
statements (each, a Billing Statement
(i) With respect to any amounts due from Purchaser hereunder with respect to
Assigned Products under any Issuer Assigned PPAs: no later than the [5th] day of each
Month during the Delivery Period (including the first Month of the Delivery Period), Issuer
shall deliver a Billing Statement to Purchaser, which for the avoidance of doubt (x) will be
calculated based on projected costs consistent with the terms of the relevant Issuer
Assigned PPA PSA(s) and (y) shall provide for payment at a minimum of an amount equal
to the Contract Price Assigned Prepay Quantity set forth in Exhibit A-2 to this Agreement
for each such Issuer Assigned PPA. For added clarity: the Parties acknowledge and agree
that Billing Statements delivered under this Section 14.1(b)(i) shall be delivered in the
Month of the relevant Product deliveries.
(ii) With respect to any amounts due from Purchaser hereunder other than with
respect to Assigned Products under Issuer Assigned PPAs: no later than the 20th day of
each Month during the Delivery Period (excluding the first Month of the Delivery Period)
Billing Date
deliver a Billing Statement to Purchaser indicating (A) the total amount due to Issuer for
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Product delivered hereunder in the prior Month, (B) any other amounts due to Issuer or
Purchaser in connection with this Agreement with respect to the prior Months, and (C) the
net amount due to Issuer or Purchaser
Statement to Issuer and Purchaser pursuant to and as defined in the Master Power Supply
hereunder; provided furthermore that invoicing for all Assigned PAYGO Products shall
occur under the PPA Custodial Agreements. For each Month of any Assignment Period
for a Purchaser Assigned PPA, the Billing Statement prepared by Issuer shall assume that
all Assigned Projected Quantities under each Purchaser Assigned PPA were delivered for
such Month. For added clarity: the Parties acknowledge and agree that Billing Statements
delivered under this Section 14.1(b)(ii) shall be delivered in the Month following the
relevant Product deliveries.
(iii) To the extent that a Monthly Statement (as defined in the PPA Custodial
Agreements) subsequently delivered under a PPA Custodial Agreement reflects that less
than the Assigned Prepay Quantities were actually delivered under an Assigned PPA, then
(A)the previously delivered Billing Statement shall be deemed to be updated in accordance
with such Billing Statement; and (B) Issuer shall owe a resettlement payment to Purchaser
in an amount equal to the resettlement payment owed by Prepay LLC to Issuer under
[Section 14.1(b)(ii)] of the Master Power Supply Agreement. The Parties acknowledge
and agree that J. Aron shall have a separate resettlement payment obligation with respect
to the amounts described in the clause (B) of the preceding sentence under the Electricity
Sale and Serv [J. Aron Resettlement Amount]
as defined in and pursuant to the PPA applicable Custodial Agreement shall satisfy the
corresponding obligations of the respective parties under each of the Electricity Sale and
Service Agreement, the Master Power Supply Agreement and this Agreement.
(c) Supporting Documentation. Upon request by either Party, the other Party
shall deliver such supporting documentation of the foregoing statements and information described
in this Section 14.1 as such requesting Party may reasonably request.
Section 14.2 Payments.
(a) Payments Due.
(i) If a Billing Statement delivered under Section 14.1(b)(i)
indicates an amount due from Purchaser for any Month during the Delivery
Period, then Purchaser shall remit such amount to Issuer by wire transfer
(pursuant to the Issuer
before the [25th] day of the Month to which such Billing Statement relates,
or if such day is not a Business Day, the preceding Business Day.
(ii) If a Billing Statement delivered under Section 14.1(b)(ii)
indicates an amount due from Purchaser for any Month during the Delivery
Period for which Purchaser has not issued a valid Remarketing Election
Notice, then Purchaser shall remit such amount to Issuer by wire transfer
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(pursuant to the Trustee
or before the 20th day of the Month following the most recent Month to
which such Billing Statement relates, or if such day is not a Business Day,
the preceding Business Day. If a Billing Statement delivered under Section
14.1(b)(ii) indicates an amount due from Issuer, then Issuer shall remit such
in immediately available funds, on or before the 28th day of the Month
following the most recent Month to which such Billing Statement relates,
or if such day is not a Business Day, the following Business Day.
(iii) Notwithstanding the foregoing, payments due from
Purchaser for Assigned PAYGO Product under Purchaser Assigned PPAs
shall be due the payment date specified in
the Purchaser Assigned PPA; provided that payments due from Purchaser
for Assigned PAYGO Product shall compliance
with Section 3.2(a)(ii) and Section 3.2(a)(ii) in respect of such Assigned
PAYGO Product.
(iv) For added clarity: the Parties acknowledge and agree that the
payment instructions may be different for amounts payable by Purchaser
under Section 14.1(b)(i) and Section 14.1(b)(ii), respectively.
(b) No Duty to Estimate. If Purchaser fails to issue a Statement
with respect to any Month, Issuer shall not be required to estimate any amounts due to Purchaser
for such Month, provided that Purchaser may include any such amount on subsequent
Statements issued within the next sixty (60) days. The sixty (60)-day deadline in this subsection
(b) replaces the two (2) year deadline in Section 14.5 with respect to any claim by any non-
delivering Party of inaccuracy in any estimated invoice issued or payment made pursuant to this
subsection (b).
Section 14.3 Payment of Disputed Amounts. If Purchaser disputes any amounts included
in a Billing Statement, Purchaser shall (except in the case of manifest error) nonetheless pay any
amount required by the Billing Statement in accordance with Section 14.2 without regard to any
right of set-off, counterclaim, recoupment or other defenses to payment that Purchaser may have;
provided, however, that Purchaser shall have the right, after payment, to dispute any amounts
included in a Billing Statement or otherwise used to calculate payments due under this Agreement
pursuant to Section 14.5. If Issuer disputes any amounts included in the ,
Issuer may withhold payment to the extent of the disputed amount; provided, however, that interest
shall be due at the Default Rate for any withheld amount later found to have been properly due.
Section 14.4 Late Payment. If Purchaser fails to remit the full amount payable within
one Business Day when due, interest on the unpaid portion shall accrue from the date due until the
date of payment at the Default Rate.
Section 14.5 Audit; Adjustments.
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(a) Right to Audit. A Party shall have the right, at its own expense, upon
reasonable notice to the other Party and at reasonable times, to examine and audit and to obtain
copies of the relevant portion of the books, records, and telephone recordings of the other Party to
the extent reasonably necessary, but only to such extent, to verify the accuracy of any statement,
charge, payment, or computation made under this Agreement. This right to examine, audit, and
obtain copies shall not be available with respect to proprietary information not directly relevant to
transactions under this Agreement.
(b) Deadline for Objections tatement and each Billing
Statement shall be conclusively presumed final and accurate, and all associated claims for under-
or overpayments shall be deemed waived unless such tatement
is objected to in writing, with adequate explanation and/or documentation, within two (2) years
after the applicable Month of Product delivery.
(c) Payment of Adjustments. All retroactive adjustments shall be paid in full
by the Party owing payment within 30 days of notice and mutually agreed upon substantiation of
such inaccuracy. If the Parties are unable to agree upon any retroactive adjustments requested by
either Party within the time period specified in Section 14.5(b), then either Party may pursue any
remedies available with respect to such adjustments at law or in equity. Retroactive adjustments
for shall bear
interest at the Default Rate from the date such payment was made.
Section 14.6 Netting; No Set-Off. The Parties shall net all amounts due and owing,
including any past due amounts (which, for the avoidance of doubt, shall include any accrued
interest), arising under this Agreement such that the Party owing the greater amount shall make a
single payment of the net amount to the other Party in accordance with this Article XIV.
Notwithstanding the foregoing, no Party shall be entitled to net any amounts that are in dispute,
and payment for all amounts set forth in a Billing Statement provided to Purchaser shall be made
without set-off or counterclaim of any kind.3
Section 14.7 . Purchaser covenants and agrees to make
payments due hereunder from Utility Revenues, and only from such Utility Revenues, as an
operating expense of its utility system; provided, however, that Purchaser may apply any legally
available monies to the payment of amounts due hereunder.
Section 14.8 Rate Covenant. Purchaser hereby covenants and agrees that it will establish,
fix, prescribe, maintain, and collect rates, fees, and charges from the customers of its utility system
so as to provide Utility Revenues sufficient to enable Purchaser to pay Issuer all amounts payable
under this Agreement and to pay all other amounts payable from Utility Revenues, and to maintain
3 NTD: SCPPA reviewing to confirm that SCPPA accounting is set up for this.
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it shall not furnish or supply services free of charge to any Person, except any such service free of
charge that Purchaser is supplying on the date hereof as has been specifically identified by
Purchaser to Issuer in writing, and it shall promptly enforce the payment of any and all accounts
owing to Purchaser for the sale of Product or the provision of distribution or other services to its
customers. Purchaser further covenants and agrees that in any future bond issue undertaken by
Purchaser, or in connection with any other financing or financial transaction, Purchaser shall
provide that the amounts payable by it under this Agreement constitute a cost of purchased power
and an operating expense of its electric system payable, together with all other operating expenses,
from a first charge on Utility Revenues. Purchaser further covenants that it shall not take any
action that would give rise to an event under Section 17.2(b) with respect to Purchaser.
Section 14.9 Pledge of Utility Revenues. Purchaser shall not grant any lien on or security
interest in, or otherwise pledge or encumber, the Utility Revenues if the terms or effect of such
lien, pledge or other encumbrance results in such lien, pledge or other encumbrance having priority
over the obligations of Purchaser to pay the Contract Price, which obligations constitute operating
expenses of Purchaser.
Section 14.10 Financial Responsibility. When reasonable grounds for insecurity of
payments due under this Agreement arise, Issuer may demand, and Purchaser shall provide within
two (2) Business Days if demanded, adequate assurance of performance. Reasonable grounds
include but are not limited to the occurrence of an insolvency or liquidation proceeding with
investment grade, or such facts and circumstances which would constitute reasonable grounds for
insecurity under applicable Law. Adequate assurance shall mean sufficient security in the form
and for a term reasonably specified by Issuer, including but not limited to a standby irrevocable
letter of credit, a prepayment, a deposit to an escrow account, or a performance bond or guaranty
by a creditworthy entity. The Parties agree that in the event Purchaser fails to provide such
adequate assurance as demanded, Issuer shall have the right to suspend its performance under this
Agreement, including the making of deliveries of Product to Purchaser, on one (1) day written
notice and shall not be obligated to restore such performance until the later of (i) the first day of
the Month after such demand has been satisfied, and (ii) the completion of the term of deliveries
to any replacement sales customer to which Prepay LLC has remarketed the Product on behalf of
Issuer.
ARTICLE XV.
[RESERVED]
ARTICLE XVI.
NOTICES
Any notice, demand, statement or request required or authorized by this Agreement
to be given by one Party to the other Party (or to any third party) shall be in writing and shall either
be sent by courier or personal delivery (including overnight delivery service) to each of the notice
recipients and addresses specified in Exhibit B for the receiving Party. Any such notice, demand,
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or request shall be deemed to be given when actually received (including overnight delivery
change its list of notice recipients and addresses in Exhibit B. The Parties may mutually agree in
writing at any time to deliver notices, demands or requests through alternate or additional methods.
ARTICLE XVII.
DEFAULT; REMEDIES; TERMINATION
Section 17.1 Issuer Default. Each of the following events shall constitute an Issuer
Default Agreement:
(a) any representation or warranty made by Issuer in this Agreement shall prove
to have been incorrect in any material respect when made; or
(b) Issuer shall have failed to perform, observe or comply with any covenant,
agreement or term contained in this Agreement, and such failure continues for more than thirty
(30) days following receipt by Issuer of written notice thereof.
Section 17.2 Purchaser Default. Each of the following events shall constitute a
Purchaser Default Agreement:
(a) Purchaser fails to pay when due any amounts owed to Issuer pursuant to this
Agreement and such failure is not remedied within three days following receipt by Purchaser of
written notice thereof;
(b) Purchaser (i) is dissolved (other than pursuant to a consolidation,
amalgamation or merger); (ii) becomes insolvent or is unable to pay its debts or fails or admits in
writing its inability generally to pay its debts as they become due; (iii) makes a general assignment,
arrangement or composition with or for the benefit of its creditors; (iv) institutes or has instituted
against it a proceeding seeking a judgment of insolvency or bankruptcy or any other relief under
any bankruptcy or insolvency Law or other similar Law is
presented for its winding-up or liquidation, and, in the case of any such proceeding or petition
instituted or presented against it, such proceeding or petition (A) results in a judgment of
insolvency or bankruptcy or the entry of an order for relief or the making of an order for its
winding-up or liquidation or (B) is not dismissed, discharged, stayed or restrained, in each case
within 30 days of the institution or presentation thereof; (v) has a resolution passed for its winding-
up, official management or liquidation (other than pursuant to a consolidation, amalgamation or
merger); (vi) seeks or becomes subject to the appointment of an administrator, provisional
liquidator, conservator, receiver, trustee, custodian or other similar official for it or for all or
substantially all of its assets; (vii) has a secured party take possession of all or substantially all of
its assets or has a distress, execution, attachment, sequestration or other legal process levied,
enforced or sued on or against all or substantially all its of assets and such secured party maintains
possession, or any such process is not dismissed, discharged, stayed or restrained, in each case
within 30 days thereafter; (viii) causes or is subject to any event with respect to it which, under the
applicable Laws of any jurisdiction, has an analogous effect to any of the events specified in
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clauses (i) through (vii); or (ix) takes any action in furtherance of, or indicating its consent to,
approval of, or acquiescence in, any of the foregoing acts;
(c) any representation or warranty made by Purchaser in this Agreement proves
to have been incorrect in any material respect when made;
(d) Purchaser shall have failed to perform, observe or comply with any
covenant, agreement or term contained in this Agreement, and such failure continues for more than
15 days following the earlier of receipt by Purchaser of notice thereof; or
(e) Purchaser shall have failed to establish, maintain, or collect rates or charges
adequate to provide Utility Revenues sufficient to enable Purchaser to pay all amounts due to
Issuer under this Agreement.
Section 17.3 Remedies Upon Default.
(a) Termination. If at any time an Issuer Default or a Purchaser Default has
occurred and is continuing, then the non-defaulting Party may do any or all of the following (i) by
notice to the defaulting Party specifying the relevant Issuer Default or Purchaser Default, as
applicable, terminate this Agreement effective as of a day not earlier than the day such notice is
deemed given under Article XVI and/or (ii) declare all amounts due to the non-defaulting Party
under this Agreement or any part thereof immediately due and payable, and the same shall
thereupon become immediately due and payable, without notice, demand, presentment, notice of
dishonor, notice of intent to demand, protest or other formalities of any kind, all of which are hereby
expressly waived by the defaulting Party; provided, however, this Agreement shall automatically
terminate, and all amounts due to the non-defaulting Party hereunder shall immediately become
due and payable as of the time immediately preceding the institution of the relevant proceeding or
the presentation of the relevant petition giving rise to a Purchaser Default specified in Section
17.2(b)(iv) or, to the extent analogous thereto, Section 17.2(b)(viii). In addition, during the
existence of an Issuer Default or a Purchaser Default, as applicable, the non-defaulting Party may
exercise all other rights and remedies available to it at Law or in equity, including without limitation
mandamus, injunction and action for specific performance, to enforce any covenant, agreement or
term of this Agreement.
(b) Additional Remedies. In addition to the remedies set forth in Section
17.3(a) (and without limiting any other provisions of this Agreement), during the existence of any
Purchaser Default, Issuer may suspend its performance hereunder and discontinue the supply of all
or any portion of the Product otherwise to be delivered to Purchaser by it under this Agreement. If
Issuer exercises its right to suspend performance under this Section 17.3(b), Purchaser shall remain
fully liable for payment of all amounts in default and shall not be relieved of any of its payment
obligations under this Agreement. Deliveries of Product may only be reinstated, at a time to be
determined by Issuer, upon (i) payment in full by Purchaser of all amounts then due and payable
under this Agreement and (ii) unless otherwise agreed by Issuer, payment in advance by Purchaser
at the beginning of each Month of amounts estimated by Issuer to be due to Issuer for the future
delivery of Product under this Agreement for such Month. Issuer may continue to require payment
in advance from Purchaser after the reinstatement of Issuer Agreement
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for such period of time as Issuer in its sole discretion may determine is appropriate. In addition,
and without limiting any other provisions of or remedies available under this Agreement, if
Purchaser fails to accept from Issuer any Product tendered for delivery under this Agreement, Issuer
shall have the right to sell such Product to third parties on any terms that Issuer, in its sole discretion,
determines are appropriate.
(c) Effect of Early Termination. As of the effectiveness of any termination date
in accordance with clause (i) of Section 17.3(a), (i) the Delivery Period shall end, (ii) the obligation
of Issuer to make any further sales and deliveries of Product to Purchaser under this Agreement
shall terminate, (iii) the obligation of Purchaser to purchase and receive deliveries of Product from
Issuer under this Agreement will terminate and (iv) the Parties shall exercise their right to terminate
any Issuer Assignment Agreements and Purchaser Assignment Agreements effective as of the end
of the Delivery Period hereunder. Neither this Agreement nor the Delivery Period may be
terminated for any reason except as specified in this Article XVII. Without prejudice to any
payment obligation in respect of periods prior to termination, no payments will be due from either
Party in respect of periods occurring after the effective termination date of this Agreement.
Section 17.4 Termination of Master Power Supply Agreement; Failed Bond
Remarketing. Purchaser acknowledges and agrees that (i) in the event the Master Power Supply
Agreement terminates prior to the end of the primary term of this Agreement, this Agreement shall
terminate on the effective date of early termination of the Master Power Supply Agreement (which
date shall be the last date upon which deliveries are required thereunder, subject to all winding up
arrangements), (ii) Issuer Product under this Agreement shall terminate
upon the termination of deliveries of Product to Issuer under the Master Power Supply Agreement
and (iii) in either such event, Issuer shall exercise its right to terminate any Issuer Assignment
Agreements and Purchaser Assignment Agreements in effect. Issuer shall provide notice to
Purchaser of any early termination date of the Master Power Supply Agreement. The Parties
recognize and agree that, in the event that the Master Power Supply Agreement terminates because
of a Failed Remarketing (as defined in the Bond Indenture) of the Bonds that occurs in the first
Month of a Reset Period, Issuer shall deliver Product under this Agreement for the remainder of
such first Month, and, notwithstanding anything in this Agreement to the contrary, no Monthly
Discount Percentage or Annual Refunds shall be associated with such deliveries and the Contract
Price shall be adjusted accordingly.
Section 17.5 Limitation on Damages. THE PARTIES CONFIRM THAT THE
EXPRESS REMEDIES AND MEASURES OF DAMAGES PROVIDED IN THIS
AGREEMENT SATISFY THE ESSENTIAL PURPOSES HEREOF. EXCEPT WHERE
EXPRESSLY PROVIDED OTHERWISE, FOR BREACH OF ANY PROVISION FOR WHICH
AN EXPRESS REMEDY OR MEASURE OF DAMAGES IS HEREIN PROVIDED, SUCH
EXPRESS REMEDY OR MEASURE OF DAMAGES SHALL BE THE SOLE AND
FORTH IN SUCH PROVISION, AND ALL OTHER REMEDIES OR DAMAGES AT LAW OR
IN EQUITY ARE WAIVED. NEITHER PARTY SHALL BE LIABLE FOR
CONSEQUENTIAL, INCIDENTAL, PUNITIVE, EXEMPLARY, OR INDIRECT DAMAGES,
LOST PROFITS OR OTHER BUSINESS INTERRUPTION DAMAGES, BY STATUTE, IN
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TORT OR CONTRACT, UNDER ANY INDEMNITY PROVISION, OR OTHERWISE. IT IS
THE INTENT OF THE PARTIES THAT THE LIMITATIONS HEREIN IMPOSED ON
REMEDIES AND THE MEASURE OF DAMAGES BE WITHOUT REGARD TO THE CAUSE
OR CAUSES RELATED THERETO, INCLUDING WITHOUT LIMITATION THE
NEGLIGENCE OF EITHER PARTY, WHETHER SUCH NEGLIGENCE BE SOLE, JOINT OR
CONCURRENT, OR ACTIVE OR PASSIVE. TO THE EXTENT ANY DAMAGES
REQUIRED TO BE PAID UNDER THIS AGREEMENT ARE LIQUIDATED, THE PARTIES
ACKNOWLEDGE THAT THE DAMAGES ARE DIFFICULT OR IMPOSSIBLE TO
DETERMINE, OTHERWISE OBTAINING AN ADEQUATE REMEDY IS INCONVENIENT,
AND THE LIQUIDATED DAMAGES CONSTITUTE A REASONABLE APPROXIMATION
OF THE HARM OR LOSS. IN DETERMINING THE APPROPRIATE MEASURE OF
DAMAGES THAT WOULD MAKE THE PARTIES WHOLE, THE PARTIES HAVE
THOROUGHLY CONSIDERED, INTER ALIA, THE UNCERTAINTY OF FLUCTUATIONS
IN PRODUCT PRICES, THE ABILITY AND INTENTION OF THE PARTIES TO HEDGE
SUCH FLUCTUATIONS, THE BARGAINED-FOR ALLOCATION OF RISK, THE
KNOWLEDGE, SOPHISTICATION AND EQUAL BARGAINING POWER OF THE
PARTIES, THE ARMS-LENGTH NATURE OF THE NEGOTIATIONS, THE SPECIAL
CIRCUMSTANCES OF THIS TRANSACTION, THE ACCOUNTING AND TAX
TREATMENT OF THE TRANSACTION BY THE PARTIES, AND THE ENTERING INTO OF
OTHER TRANSACTIONS IN RELIANCE ON THE ENFORCEABILITY OF THE
LIQUIDATED DAMAGES PROVISIONS CONTAINED HEREIN.
ARTICLE XVIII.
MISCELLANEOUS
Section 18.1 Indemnification Procedure. With respect to each indemnification included
in this Agreement, the indemnity is given to the fullest extent permitted by applicable Law, and
the following provisions shall be applicable. The indemnified Party shall promptly notify the
indemnifying Party in writing of any Claim, and the indemnifying Party shall have the right to
assume its investigation and defense, including employment of counsel, and shall be obligated to
fees and to post any appeals bonds; provided,
however, that the indemnified Party shall have the right to employ at its expense separate counsel
and participate in the defense of any Claim. The indemnifying Party shall not be liable for any
settlement of a Claim without its express written consent thereto. In order to prevent double
recovery, the indemnified Party shall reimburse the indemnifying Party for reasonable payments
or costs incurred in respect of an indemnity with the proceeds of any judgment, insurance, bond,
surety or other recovery made by the indemnified Party with respect to a covered event.
Section 18.2 Deliveries. Contemporaneously with this Agreement (unless otherwise
specified),
(a) each Party shall deliver to the other Party evidence reasonably satisfactory
to it of (i) such Party , deliver and perform its obligations under this
Agreement and (ii) the appropriate individuals who are authorized to sign this Agreement on
behalf of such Party;
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(b) on the Bond Closing Date, Purchaser shall deliver to Issuer a fully executed
Federal Tax Certificate in the form attached hereto as Exhibit D; and
(c) on the Bond Closing Date, Purchaser shall deliver to Issuer an opinion of
counsel to Purchaser in the form attached hereto as Exhibit E.
Section 18.3 Entirety; Amendments. This Agreement, including the exhibits and
attachments hereto, constitutes the entire agreement between the Parties and supersedes all prior
discussions and agreements between the Parties with respect to the subject matter hereof. There
are no prior or contemporaneous agreements or representations affecting the same subject matter
other than those expressed herein. Except for any matters that, in accordance with the express
provisions of this Agreement, may be resolved by oral agreement between the Parties, no
amendment, modification, supplement, or change hereto shall be enforceable unless reduced to
writing and executed by both Parties.
Section 18.4 Governing Law. THIS AGREEMENT AND THE RIGHTS AND DUTIES
OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED, ENFORCED AND PERFORMED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF CALIFORNIA, WITHOUT REGARD TO ANY CONFLICTS OF LAW
S
LAW.
Section 18.5 Non-Waiver. No waiver of any breach of any of the terms of this
Agreement shall be effective unless such waiver is in writing and signed by the Party against whom
such waiver is claimed. No waiver of any breach or breaches shall be deemed a waiver of any
other subsequent breach.
Section 18.6 Severability. If any provision of this Agreement, or the application thereof,
shall for any reason be invalid or unenforceable, then to the extent of such invalidity or
unenforceability, the remainder of this Agreement and the application of such provision to other
Persons or circumstances shall not be affected thereby, but rather shall be enforced to the maximum
extent permissible under applicable Law, so long as the economic and legal substance of the
transactions contemplated hereby is not affected in any materially adverse manner as to either
Party.
Section 18.7 Exhibits. Any and all Exhibits and attachments referenced in this
Agreement are hereby incorporated herein by reference and shall be deemed to be an integral part
hereof.
Section 18.8 Winding Up Arrangements. All indemnity and confidentiality obligations,
audit rights, and other provisions specifically providing for survival shall survive the expiration or
termination of this Agreement. The expiration or termination of this Agreement shall not relieve
either Party of (a) any unfulfilled obligation or undischarged liability of such Party on the date of
such termination or (b) the consequences of any breach or default of any warranty or covenant
contained in this Agreement. All obligations and liabilities described in the preceding sentence of
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this Section 18.8, and applicable provisions of this Agreement creating or relating to such
obligations and liabilities, shall survive such expiration or termination.
Section 18.9 Relationship of Parties. The Parties shall not be deemed to be in a
relationship of partners or joint venturers by virtue of this Agreement, nor shall either Party be an
agent, representative, trustee or fiduciary of the other. Neither Party shall have any authority to
bind the other to any agreement. This Agreement is intended to secure and provide for the services
of each Party as an independent contractor.
Section 18.10 Immunity. Each Party represents and covenants to and agrees with the other
Party that it is not entitled to claim immunity on the grounds of sovereignty or other similar
grounds with respect to itself from (i) suit or (ii) jurisdiction of any court because of its status as a
political subdivision of the State of California; provided that the foregoing relates only to
contractual claims and not to any claim based in tort.
Section 18.11 Rates and Indices. If the source of any publication used to determine the
index or other price used in the Contract Price should cease to publish the relevant prices or should
cease to be published entirely, an alternative index or other price will be used based on the
determinations made by Issuer and Prepay LLC under Section 18.11 of the Master Power Supply
Agreement. Issuer shall provide Purchaser the opportunity to provide its recommendations and
other input to Issuer for Issuer for selecting such alternative index or other
price under Section 18.11 of the Master Power Supply Agreement.
Section 18.12 Limitation of Liability. During the Delivery Period, the obligations of
Issuer under this Agreement are special and limited obligations payable solely from the revenues,
income and funds of its Clean Energy Project II that are pledged pursuant to the Bond Indenture.
Section 18.13 Counterparts. This Agreement may be executed and acknowledged in
multiple counterparts and by the Parties in separate counterparts, each of which shall be an original
and all of which shall be and constitute one and the same instrument.
Section 18.14 Third Party Beneficiaries; Rights of Trustee. Purchaser acknowledges and
agrees that (a) Issuer will pledge and assign its rights, title and interest in and to this Agreement
and the amounts payable by Purchaser under this Agreement to secure Issuer
the Bond Indenture; (b) the Trustee shall be a third-party beneficiary of this Agreement with the
right to enforce Purchaser Agreement; (c) J. Aron shall
be a third-party beneficiary of this Agreement with the right to enforce the provisions of Article
VI; (d) the Trustee or any receiver appointed under the Bond Indenture shall have the right to
perform all obligations of Issuer under this Agreement; and (e) in the event of any Purchaser
Default under Section 17.2(a), (i) Prepay LLC may, to the extent provided for in, and in accordance
with, the Receivables Purchase Exhibit to the Master Power Supply Agreement, take assignment
from Issuer of receivables owed by Purchaser to Issuer under this Agreement, and Prepay LLC or
any third party transferee who purchases and takes assignment of such receivables from Prepay
LLC shall thereafter have all rights of collection with respect to such receivables (provided that, if
such insurance provider shall have the same rights under this Section 18.14 as Prepay LLC), and
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(ii) if such receivables are not so assigned, the Swap Counterparty (as defined in the Master Power
Supply Agreement) shall have the right to pursue collection of such receivables to the extent any
non-payment by Issuer to any Swap Counterparty was caused by Purchaser
Pursuant to the terms of the Bond Indenture, Issuer has irrevocably appointed the Trustee as its
agent to issue notices and, as directed under the Bond Indenture, to take any other actions that
Issuer is required or permitted to take under this Agreement. Purchaser may rely on notices or
other actions taken by Issuer or the Trustee, and Purchaser has the right to exclusively rely on any
notices delivered by the Trustee, regardless of any conflicting notices that it may receive from
Issuer.
Section 18.15 Waiver of Defenses. Each Party waives all rights to set-off, counterclaim,
recoupment and any other defenses that might otherwise be available to it with regard to its
obligations pursuant to the terms of this Agreement.
Section 18.16 Rate Changes.
(a) Standard of Review. Absent the agreement of the Parties to the proposed
change, the standard of review for changes to any rate, charge, classification, term or condition of
this Agreement, whether proposed by a Party (to the extent that any waiver in Section 18.16(b)
below is unenforceable or ineffective as to such Party), a non-party or FERC acting sua sponte,
standard of review set
forth in United Gas Pipe Line Co. v. Mobile Gas Service Corp., 350 U.S. 332 (1956) and Federal
Power Commission v. Sierra Pacific Power Co., 350 U.S. 348 (1956) and clarified by Morgan
Stanley Capital Group Inc. v. Public Util. Dist. No. 1 of Snohomish, 554 U.S. 527 (2008).
(b) Waiver. In addition, and notwithstanding Section 18.16(a), to the fullest
extent permitted by applicable Law, each Party, for itself and its successors and assigns, hereby
expressly and irrevocably waives any rights it can or may have, now or in the future, whether under
Section 205 and/or 206 of the Federal Power Act or otherwise, to seek to obtain from FERC by
any means, directly or indirectly (through complaint, investigation or otherwise), and each hereby
covenants and agrees not at any time to seek to so obtain, an order from FERC changing any
section of this Agreement specifying the rate, charge, classification, or other term or condition
agreed to by the Parties, it being the express intent of the Parties that, to the fullest extent permitted
by applicable Law, neither Party shall unilaterally seek to obtain from FERC any relief changing
the rate, charge, classification, or other term or condition of this Agreement, notwithstanding any
subsequent changes in applicable Law or market conditions that may occur. In the event it were
to be determined that applicable Law precludes the Parties from waiving their rights to seek
changes from FERC to their market-based power sales contracts (including entering into covenants
not to do so) then this Section 18.16(b) shall not apply, provided that, consistent with Section
18.16(a), neither Party shall seek any such changes excep
standard of review and otherwise as set forth in Section
18.16(a).
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IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly
executed and delivered by their respective officers thereunto duly authorized as of the date first
above written.
[Separate Signature Page(s) Attached]
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Signature Page to the Clean Energy Purchase Contract
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
By: ____________________________________
Name:______________________________
Title:_______________________________
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Signature Page to the Clean Energy Purchase Contract
[____]
By:
Name:______________________________
Title:_______________________________
Resolution No. 2026-006
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A-1
EXHIBIT A-1
BASE QUANTITIES; BASE DELIVERY POINTS; COMMODITY REFERENCE PRICES
[To be attached.]
[Primary Delivery Point: [____]]
Delivery Hours: [____]
Commodity Reference Prices: [____]
FLOW DATE BASE
UNADJUSTED
QUANTITIES
(MWH/DELIVERY
HOUR)
BASE QUANTITY
REDUCTION
MWH/DELIVERY
HOUR
BASE QUANTITY
MWH/DELIVERY
HOUR
[EXPLANATION: Exhibit A-1 lists the quantities of MWh of Base Energy, which we expect to be zero at all times
pursuant to the Base Quantity Reductions resulting from PPA assignments.]
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A-2
EXHIBIT A-2
ASSIGNED RIGHTS AND OBLIGATIONS
[To be attached.]
PPA: [PPA
Seller]
[PPA
Seller]
[PPA
Seller]
[PPA
Seller]
[PPA
Seller]
[PPA
Seller]
[PPA
Seller]
Purchaser
Percentage of
PPA Output:
[____]% [____]% [____]% [____]% [____]% [____]% [____]%
Assigned
Delivery
Point:
[____] [____] [____] [____] [____] [____] [____]
APC Contract
Price
[Fixed
Price]
[Fixed
Price]
[Fixed
Price]
[Fixed
Price]
[Fixed
Price]
[Fixed
Price]
[Fixed
Price]
Assignment
Period
[____],
20[_] -
[____],
20[_]
[____],
20[_] -
[____],
20[_]
[____],
20[_] -
[____],
20[_]
[____],
20[_] -
[____],
20[_]
[____],
20[_] -
[____],
20[_]
[____],
20[_] -
[____],
20[_]
[____],
20[_] -
[____],
20[_]
Commodity
Month
Assigned
Prepay
Quantities
Assigned
Prepay
Quantities
Assigned
Prepay
Quantities
Assigned
Prepay
Quantities
Assigned
Prepay
Quantities
Assigned
Prepay
Quantities
Assigned
Prepay
Quantities
[____], 2026 [____]
MWh
[____]
MWh
[____]
MWh
[____]
MWh
[____]
MWh
[____]
MWh
[____]
MWh
[EXPLANATION: Exhibit A-2 lists the Assigned PPA volumes for redelivery to Purchaser under this Agreement.]
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B-1
EXHIBIT B
NOTICES
IF TO ISSUER: Southern California Public Power Authority
Attention: Executive Director
1160 Nicole Court
Glendora, CA 91740
Email: ExecutiveDirector@scppa.org
IF TO PURCHASER: [____]
[____]
[____]
[____]
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EXHIBIT C
REMARKETING ELECTION NOTICE
Southern California Public Power Authority
1160 Nicole Court
Glendora, CA 91740
Aron Energy Prepay 51 LLC
c/o J. Aron & Company LLC
200 West Street
New York, NY 10282
[Trustee]
[_____]
[_____]
[_____]
To the Addressees:
The undersigned, duly authorized representative of [____] (the Purchaser ), is providing this
Remarketing Election Notice Clean Energy Purchase Contract, dated
as of [_____], 2026 Clean Energy Purchase Contract ), between Southern California Public
Power Authority and Purchaser. Capitalized terms used herein shall have the meanings set forth
in the Clean Energy Purchase Contract.
Pursuant to Section 3.4(b) of the Clean Energy Purchase Contract, the Purchaser has elected to
have its Base Quantity, for each Hour of the Reset Period commencing __________ and extending
to and including ______________, remarketed beginning as of the commencement of such Reset
Period. The resumption of deliveries of Base Quantities in any future Reset Period shall be in
accordance with Section 3.4(b) of the Clean Energy Purchase Contract.
Given this [___] day of [_________], 20[__].
[____]
By: __________________________
Name: ________________________
Title: _________________________
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EXHIBIT D
FORM OF FEDERAL TAX CERTIFICATE
This Federal Tax Certificate is executed in connection with the Clean Energy Purchase
Contract dated as of [______], 2026 Clean Energy Purchase Contract
Southern California Public Power Authority Issuer [____] Power Purchaser
Capitalized terms used and not otherwise defined herein shall have the meanings given to them in
the Clean Energy Purchase Contract, in the Tax Certificate and Agreement, or in the Bond
Indenture.
WHEREAS Power Purchaser acknowledges that Issuer is issuing the Bonds to fund the
prepayment price under the Master Power Supply Agreement; and
WHEREAS the Bonds are intended to qualify for tax exemption under Section 103 of the
Internal Revenue Code of 1986, as amended; and
qualification for such tax exemption.
NOW, THEREFORE, POWER PURCHASER HEREBY CERTIFIES AS FOLLOWS:
1. Power Purchaser is a municipal corporation organized and existing under the Laws of the
State of California.
2. Power Purchaser will resell all of the Energy acquired pursuant to the Clean Energy
Purchase Contract to its retail Energy customers within its service area, with retail sales in all cases
being made pursuant to regularly established and generally applicable tariffs or under authorized
l customers, provided power transmission or distribution
service at all times during the 5-year period ending on [______], and from then until the date of
Power Purchaser under state or federal law.
3. The annual average amount during the testing period of Energy purchased (other than for
resale) by customers of Power Purchaser who are located within the service area of Power
Purchaser is [________] MWh. The maximum annual amount of Energy in any year being
acquired pursuant to the Clean Energy Purchase Contract is [_______] MWh. The annual average
amount of Energy which Power Purchaser otherwise has a right to acquire as of the Closing Date
(including rights to capacity to generate electricity, whether owned, leased or otherwise contracted
for) is [________] MWh. The sum of (a) the maximum amount of Energy in any year being
acquired pursuant to the Clean Energy Purchase Contract, and (b) the amount of Energy that Power
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D-2
Purchaser otherwise has a right to acquire (including rights to capacity to generate electricity,
whether owned, leased or otherwise contracted for) in the year described in the foregoing clause
(a), is [________] MWh. Accordingly, the amount of Energy to be acquired under the Clean
Energy Purchase Contract by Power Purchaser, supplemented by the amount of Energy otherwise
available to Power Purchaser as of the Closing Date, during any year does not exceed the sum of
(i) [___]% of the annual average amount during the testing period of Energy purchased (other than
for resale) by customers of Power Purchaser who are located within the service area of Power
Purchaser; and (ii) the amount of Energy to be used to transport the Energy purchased pursuant to
the Master Power Supply Agreement to Power Purchaser during such year. For purposes of this
paragraph 3, the term "testing period" means the 5 calendar years ending [______], and the term
"service area" means (x) the area throughout which Power Purchaser provided power transmission
or distribution service at all times during the testing period, (y) any area within a county contiguous
to the area described in (x) in which retail customers of Power Purchaser are located if such area
is not also served by another utility providing power services, and (z) any area recognized as the
service area of Power Purchaser under state or federal law.
4. Power Purchaser expects to pay for Energy acquired pursuant to the Clean Energy Purchase
Contract solely from funds derived from its power distribution operations. Power Purchaser
expects to use its current net revenues to pay for current Energy acquisitions. There are no funds
or accounts of Power Purchaser or any person who is a related Person to Power Purchaser in which
monies are invested and which are reasonably expected to be used to pay for Energy acquired more
than one year after it is acquired. No portion of the proceeds of the Bonds will be used directly or
indirectly to replace funds of Power Purchaser or any persons who are related Persons to Power
Purchaser that are or were intended to be used for the purpose for which the Bonds were issued.
_______________, 2026
[____]
By: __________________________
Name: ________________________
Title: _________________________
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EXHIBIT E
OPINION OF COUNSEL
Southern California Public Power Authority
Glendora, CA
Aron Energy Prepay 51 LLC
New York, NY
[Trustee]
[City, State]
Goldman Sachs & Co. LLC
New York, NY
[Commodity Swap Counterparty]
[City, State]
Re: Clean Energy Purchase Contract between [____] and Southern California
Public Power Authority, dated as of [_____], 2026
Ladies and Gentlemen:
I am [_______] to [____]
the Clean Energy Purchase Contract between the Southern California Public Power Authority
[____], 2026
Unless otherwise specified herein, all terms used but not defined in this opinion shall have the
same meaning as is ascribed to them in the Clean Energy Purchase Contract.
In connection with this opinion, I have examined originals or copies, certified or otherwise
identified to my satisfaction, of the following:
(a) The Constitution and laws of the State of California
applicable, acts, ordinances, certificates, articles, charters, bylaws, and agreements
pursuant to which Purchaser was created and by which it is governed;
(b) Resolution No. [__], duly adopted by Purchaser on [_______]
and certified as true and correct by certificate, authorizing Purchaser to execute and
deliver the Clean Energy Purchase Contract;
(c) A copy of the Clean Energy Purchase Contract executed by Purchaser; and
(d) All outstanding instruments relating to bonds, notes, or other indebtedness of or
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E-2
I have also examined and relied upon originals or copies, certified or otherwise authenticated to
my satisfaction, of such records, documents, certificates, and other instruments, and made such
investigations of law, as in my judgment I have deemed necessary or appropriate to enable me to
render the opinions expressed below.
Based upon the foregoing, I am of the opinion that:
1. Purchaser is a public agency of the State of California, duly organized and validly
existing under the laws of the State and has the power and authority to own its properties, to carry
on its business as now being conducted, and to enter into and to perform its obligations under the
Clean Energy Purchase Contract.
2. The execution, delivery, and performance by Purchaser of the Clean Energy
Purchase Contract have been duly authorized by the governing body of Purchaser and do not and
will not require, subsequent to the execution and delivery of the Clean Energy Purchase Contract
by Purchaser, any further consent or approval of the governing body or any officers of Purchaser.
3.
Clean Energy Purchase Contract is the legal, valid, and binding obligation of Purchaser,
enforceable in accordance with its terms, except as such enforceability may be subject to (i) the
exercise of judicial discretion in accordance with general principles of equity and (ii) bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratoria, and other similar laws affecting
ed, to the extent constitutionally applicable.
4. Other than those approvals, consents, and/or authorizations that have already been
obtained, no approval, consent, or authorization of any governmental or public agency, authority,
commission or person, or, to my knowledge, of any holder of any outstanding bonds or other
indebtedness of Purchaser , is required with respect
to the execution, delivery, and performance by Purchaser of the Clean Energy Purchase Contract
ctions contemplated thereby.
5. The authorization, execution, and delivery of the Clean Energy Purchase Contract
and compliance with the provisions thereof (a) to my knowledge will not conflict with or constitute
a breach of, or default under, (i) any instrument relating to the organization, existence, or operation
of Purchaser, (ii) any ruling, regulation, ordinance, judgment, order, or decree to which Purchaser
(or any of its officers in their respective capacities as such) is subject or (iii) any provision of the
laws of the State relating to Purchaser and its affairs, and (b) to my knowledge will not result in,
or require the creation or imposition of, any lien on any of the properties or revenues of Purchaser
pursuant to any of the foregoing, in each case described in clauses (a) and (b) above solely with
.
6.
Purchase Contract will not result in the breach of or default under any applicable constitutional
provision or any law or administrative regulation of the State or the United States or any applicable
judgment or decree or any loan or other agreement, resolution, indenture, bond, note, resolution,
agreement or other instrument to which Purchaser is a party or to which Purchaser or any of its
property or assets is otherwise subject.
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E-3
7. Payments to be made by Purchaser under the Clean Energy Purchase Contract shall
of purchased
electricity.
8. As of the date of this opinion, to the best of my knowledge, after due inquiry, there
is no pending or threatened action or proceeding at law or in equity or by any court, government
agency, public board, or body affecting or questioning the existence of Purchaser or the titles of
its officers to their respective offices or affecting or questioning the legality, validity, or
enforceability of the Clean Energy Purchase Contract, nor to my knowledge is there any basis
therefor.
knowledge of the presence or absence of such facts has come to my attention, and I advise you
that I have not undertaken any independent investigation with regard thereto.
The opinions expressed herein are based upon the law and other matters in effect on the
date hereof. The opinions expressed are matters of professional judgment and are not a warranty,
assurance, or guaranty of result. I assume no obligation to revise or supplement this opinion
should such law be changed by legislative action, judicial decision, or otherwise, or should any
facts or other matters upon which I have relied change.
The opinions expressed herein are limited to the laws of the State and applicable federal
laws of the United States. No opinion is being expressed with respect to New York law.
This opinion is rendered solely for the use and benefit of the addressees listed above in
connection with the Clean Energy Purchase Contract and may not be relied upon other than in
connection with the transactions contemplated by the Clean Energy Purchase Contract or by any
other person or entity for any purpose whatsoever, nor may this opinion be quoted in whole or in
part or otherwise referred to in any document or delivered to any other person or entity, without
the prior written consent of the undersigned.
Very truly yours,
[_________]
[_________]
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EXHIBIT F-1
FORM OF ISSUER ASSIGNMENT AGREEMENT
[To be attached.]
[EXPLANATION: Once in agreed form, the unpopulated form of Issuer Assignment Agreement will be
pasted into this exhibit for future reference.]
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EXHIBIT F-2
FORM OF PURCHASER ASSIGNMENT AGREEMENT
[To be attached.]
[EXPLANATION: Once in agreed form, the unpopulated form of Purchaser Assignment Agreement will
be pasted into this exhibit for future reference.]
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EXHIBIT G
COMMUNICATIONS PROTOCOL FOR BASE QUANTITIES
This Exhibit G Communications Protocol addresses the Scheduling of Base Quantities to be
delivered and received at the Base Delivery Point. It is intended to be attached to both the Master
Power Supply Agreement and the Clean Energy Purchase Contract, each as defined below.
1. ADDITIONAL DEFINED TERMS
In addition to the terms defined in Article I of this Agreement, the following terms used in this
Communications Protocol shall have the following meanings:
1.1. Agreement Communications Protocol is attached to the Master
Power Supply Agreement, the Master Power Supply Agreement and (ii) when this
Communications Protocol is attached to the Clean Energy Purchase Contract, the Clean
Energy Purchase Contract.
1.2. Clean Energy Purchase Contract Clean Energy Purchase Contract
dated as of [______], 2026 by and between Issuer and Project Participant.
1.3. Delivery Scheduling Entity means Prepay LLC or a Person designated by Prepay LLC,
as set forth in Attachment 4 hereto or in a subsequent written notice to Issuer and the
Project Participant.
1.4. Issuer Southern California Public Power Authority, a joint powers authority
organized pursuant to the laws of the State of California.
1.5. Master Power Supply Agreement Master Power Supply Agreement
dated as of [______], 2026 by and between Prepay LLC and Issuer that is specified as
relating to the Clean Energy Purchase Contract with Project Participant.
1.6. Operational Nomination has the meaning specified in Section 4.1.1.
1.7. Prepay LLC Energy Prepay 51 LLC, a Delaware limited liability
company.
1.8. Project Participant means [____], [__________].
1.9. Receipt Scheduling Entity means, with respect to any Base Quantities to be delivered
under the Master Power Supply Agreement, the Project Participant, unless the Clean
Energy Purchase Contract has been suspended or terminated, in which case the Receipt
Scheduling Entity will be Issuer or a Person designated by Issuer for such Delivery Point
in accordance with this Communications Protocol.
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1.10. Relevant Contract
Purchase Contract.
1.11. Relevant Party
1.12. Relevant Third Party means any Person that is (i) a Transmission Provider that will or
is intended to transport Product to be delivered or received under the Agreement, (ii) an
independent system operator or control area that coordinates the Scheduling of Product
at the Base Delivery Point, (iii) Scheduling receipt of Product by Issuer or for the account
of Issuer to the extent such Product has been delivered to Issuer or for the account of
Issuer under the Master Power Supply Agreement, and (iv) delivering Product to Issuer
or for the account of Issuer to the extent such Product is intended to be re-delivered
ultimately to the Project Participant or for the account of the Project Participant under
the Clean Energy Purchase Contract.
1.13. Scheduling Entities means the Receipt Scheduling Entity and the Delivery Scheduling
Entity.
2. AGREEMENTS OF RELEVANT PARTIES
Each Relevant Party that is a party to Relevant Contract to which this Communications
Protocol is attached acknowledges that this Communications Protocol sets forth certain
obligations that may be delegated to other Relevant Parties that are not parties to such
Relevant Contracts. In connection therewith:
2.1 Reliance on Scheduling Entity. Each Relevant Party shall be entitled to rely
exclusively on any communications or directions given by a Delivery Scheduling
Entity or Receipt Scheduling Entity, in each case to the extent such communications
are permitted hereunder.
2.2 Performance of Communications Protocol. Each Relevant Party to a Relevant
Contract shall cause its counterparty to each other Relevant Contract to comply
with the provisions of this Communications Protocol as the provisions apply to such
counterparty to the extent required to perform the obligations of the Relevant Party
under the Relevant Contract.
2.3 Third Party Beneficiaries. To the extent this Communications Protocol purports
to give any Relevant Party (a Beneficiary ) rights vis-à-vis any other Relevant
Party (a Burdened Party ) with whom such Beneficiary does not have privity
under a Relevant Contract, such Beneficiary shall be deemed to be a third party
beneficiary of each Relevant Contract to which the Burdened Party is a party to the
extent necessary or convenient to enforce the obligations of the Burdened Party
under this Communications Protocol.
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2.4 Amendment of Relevant Contracts. No Relevant Party shall amend, waive or
otherwise modify any provision of any Relevant Contract to which it is a party
without the consent of each other Relevant Party whose rights or obligations would
be materially and adversely affected by such amendment, waiver or modification
as it relates to this Communications Protocol.
2.5 Amendment of Communications Protocol. No Relevant Party shall amend any
provision of this Communications Protocol in a Relevant Contract without the
consent of each other Relevant Party.
2.6 Waiver of Communications Protocol. No Relevant Party shall waive any
provision of this Communications Protocol in a Relevant Contract without the
consent of each other Relevant Party whose rights or obligations would be
materially and adversely affected by such waiver.
3 DESIGNATION AND REPLACEMENT OF SCHEDULING ENTITIES
3.1 Designation of Delivery Scheduling Entity. Prepay LLC may designate a new
Delivery Scheduling Entity upon thirty (30) days written notice to Issuer
substantially in the form of Attachment 4. Any Scheduling Entity designated in
accordance with this Section 3.1 shall commence service at the beginning of a
Month, unless mutually agreed in writing between Prepay LLC and Issuer.
3.2 Assumption by Receipt Scheduling Entity. If any Delivery Scheduling Entity
(other than Prepay LLC) persistently fails to perform its obligations as
contemplated under this Communications Protocol, the Receipt Scheduling Entity
may, by notice to Prepay LLC, require that Prepay LLC deal directly with the
Receipt Scheduling Entity until a new Delivery Scheduling Entity is designated in
accordance with this Section 3.1.
3.3 Scheduling Coordinator. Each Project Participant, as applicable, shall designate
a scheduling coordinator for the purposes of accepting Base Product delivery
under its Clean Energy Purchase Contract at the Base Delivery Point through the
scheduling of ISTs.
4 INFORMATION EXCHANGE AND COMMUNICATION BETWEEN ISSUER AND
PREPAY LLC
4.1 Communication of Operational Nomination Details.
4.1.1 Not later than three Days prior to each Day during which Base Product is
required to be delivered under the Agreement, the Receipt Scheduling
Entity for such Delivery Point may deliver an operational nomination in
Operational Nomination
Participant to receive all of its Base Quantities during such Day, which
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G-4
Operational Nomination
under the Relevant Contracts for failure to receive Base Quantities. If no
changes to Base Quantities are so submitted, the Operational Nomination
shall be deemed to nominate the full Base Quantities required to be
delivered on a Day.
4.1.2 Not later than three Days prior to each Day during which Base Product is
required to be delivered under the Agreement, the Delivery Scheduling
Entity for such Delivery Point may revise the Operational Nomination to
indicate any inability of Prepay LLC to deliver all Base Quantities during
such Day, which revised Operational Nomination shall be without prejudice
Relevant Contracts for failure to deliver Base
Quantities.
4.2 Event-specific Communications.
4.2.1 Remarketing Notices issued by Issuer under the Master Power Supply
Agreement (including in response to a Remarking Election Notice issued
by any Project Participant under its Clean Energy Purchase Contract) shall
be substantially in the form of Attachment 2 hereto. Any such notices to
remarket must be delivered directly to Prepay LLC and the Delivery
Scheduling Entity.
4.2.2 Each Scheduling Entity shall notify Prepay LLC, Issuer and the Project
Participant as soon as practicable in the event of: (i) any deficiencies in
Scheduling related to such Scheduling Entity; (ii) any deficiencies in
Scheduling related to the other such Scheduling Entity; and (iii) any issues
with Relevant Third Parties that that would reasonably be expected to create
issues related to Product Scheduling under the Relevant Contract.
5 ACCESS AND INFORMATION
5.1 Verification of Product Scheduled. In addition to the delivery of and access to the
records and data required pursuant to the Agreement, each Relevant Party agrees to
provide relevant records from itself and other Relevant Third Parties necessary to
document and verify Product Scheduled within and after the Month as needed to
facilitate the Relevant Contracts.
5.2 View Rights. To the extent requested by a Delivery Scheduling Entity or Prepay LLC,
the Receipt Scheduling Entities will use Commercially Reasonable Efforts to cooperate
with the Delivery Scheduling Entity and Prepay LLC to ensure that Delivery
Scheduling Entity and Prepay LLC has sufficient agency view rights from each such
Scheduling Entity to allow Prepay LLC to view Base Product Scheduling at the Base
Delivery Point.
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6 NOTICES
Any notice, demand, request or other communication required or authorized by this
Communications Protocol to be given by one Relevant Party to another Relevant Party
shall be in writing, except as otherwise expressly provided herein. It shall either be
sent by facsimile (with receipt confirmed by telephone and electronic transmittal
receipt), courier, or personally delivered (including overnight delivery service) to the
representative of the other Relevant Party designated in Attachment 1 hereto. Any such
notice, demand, or request shall be deemed to be given (i) when sent by facsimile
confirmed by telephone and electronic transmittal receipt or (ii) when actually received
if delivered by courier or personal delivery (including overnight delivery service).
Each Relevant Party shall have the right, upon written notice to the other Relevant
Parties, to change its address at any time, and to designate that copies of all such notices
be directed to another Person at another address.
7 NO IMPACT ON CONTRACTUAL OBLIGATIONS
Except as expressly set forth herein or in an applicable Relevant Contract, nothing in this
Communications Protocol nor any Relevant Party s actions or inactions hereunder shall
have any impact on any Relevant Party s rights or obligations under the Relevant
Contracts.
8 ATTACHMENTS
Attachment 1 - Key Personnel
Attachment 2 - Remarketing Notice Form
Attachment 3 - Designation of Alternate Base Delivery Points Form
Attachment 4 - Designation of Scheduling Entities Form
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Attachment 1
Key Personnel
Prepay LLC Marketing Personnel:
Timothy Capuano
Sales and Trading
Telephone: (212) 357-2542
gs-prepay-notices@gs.com
Prepay LLC Scheduling Personnel:
Scheduling Team
Email: ficc-jaron-powerops@ny.email.gs.com
Direct Phone: (212) 855-6188
Fax: (212) 493-9847
Other Prepay LLC Personnel:
Telephone: (212) 855-0880
ficc-struct-sett@gs.com
Andres E. Aguila
General Notices
Telephone: (212) 855-0608
Fax: (212) 291-2124
gs-prepay-notices@gs.com
Issuer Personnel:
Attention: Executive Director
Telephone: (626) 793-9364
Fax: (626) 793-9461
Email: bcarnahan@scppa.org
Project Participant Personnel:
[____]
[____]
[____]
[____]4
4 NTD: To be populated for each project participant once scheduling information is provided.
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Attachment 2
Remarketing Notice Form
Date: [_____________]
To: Prepay LLC Scheduling
From: Project Participant Scheduling
This notice is being delivered pursuant to that certain Master Power Supply Agreement (the
ated as of [______], 2026 by and between Aron Energy Prepay 51 LLC
Southern California Public Power Authority, a joint powers authority
organized pursuant to the laws of the State of California , and relates to the Clean Energy
[______], 2026 by and
between Issuer and [____] Capitalized terms not defined herein are
defined in the Prepaid Agreement.
Check the box to indicate type of Remarketing Notice (P
A
Delivery Points set forth in Exhibit A-1 of the Agreement, or as may be designated by the Parties
from time to time):
Monthly Remarketing Notice:
Month(s) for which remarketing is requested: _____________________, 20__ through
_______________________, 20__.
Pursuant to Section 3(b) of Exhibit C of the Master Power Supply Agreement, Project Participant
requests that Prepay LLC remarket in such Month(s) the following Base Quantities of Product
required to be delivered at the following Delivery Points:
Delivery Point (P/A, #) MWh/ Hour for each Hour in the Month
Daily Remarketing Notice:
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Hours for which remarketing is requested: _____________________, 20__ through
_______________________, 20__.
Pursuant to Section 3(c) of Exhibit C of the Master Power Supply Agreement, Project Participant
requests that Prepay LLC remarket for such Hours the following Base Quantities of Product
required to be delivered at the following Delivery Point:
Delivery Point (P/A, #) MWh/Hour
Submitted by Project Participant:
[____]
By: _________________________
Name: _______________________
Title: ________________________
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Attachment 3
Designation of Alternate Base Delivery Points Form
This designation is delivered pursuant to that certain Master Power Supply Agreement (the
ated as of [______], 2026 by and between Aron Energy
Prepay 51 Southern California Public Power Authority, a joint powers
authority organized pursuant to the laws of the State of California
[______], 2026 by and
between Issuer and [____] Capitalized terms not defined herein are
defined in the Master Power Supply Agreement and the Clean Energy Purchase Contract. Project
Participant and/or Issuer hereby proposes the following Alternate Delivery Points for deliveries of
Energy that would otherwise be made at the specified Primary Delivery Point:
ALTERNATE
DELIVERY POINT
PRIMARY
DELIVERY POINT
AFFECTED
COMMODITY
REFERENCE PRICE
PRICING POINT
ADDITIONAL
RESTRICTIONS
1 [e.g.
2 Vol. Limit:____
3 Time Limit:]___
(etc.)
Unless otherwise agreed among Prepay LLC, Issuer and Project Participant, an Alternate Delivery
Point shall utilize the same Commodity Reference Price as the Primary Delivery Point it replaces
or otherwise affects. Project Participant is not required to agree or accept this designation (or any
change to the Commodity Reference Price) if it is being submitted by Issuer pursuant to the Master
Power Supply Agreement only.
AGREED AND
ACCEPTED BY PREPAY
LLC:
(if required) AGREED TO
AND ACCEPTED BY
PROJECT
PARTICIPANT:
(if required) AGREED TO
AND ACCEPTED BY
ISSUER:
By:
Name:
Title:
By:
Name:
Title:
By:
Name:
Title:
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Attachment 4
Designation of Scheduling Entities Form
This designation is being delivered pursuant to that certain Master Power Supply Agreement (the
ated as of [______], 2026 by and between Aron Energy
Prepay 51 Southern California Public Power Authority, a joint powers
authority organized pursuant to the laws of the State of California
[______],
2026 by and between Issuer and [____]
herein are defined in the Master Power Supply Agreement and Clean Energy Purchase Contract.
[If delivered by Project Participant:
Receipt Scheduling Entity:
Delivery Point: ________________________
Effective Date(s) of Service of Receipt Scheduling Entity (full Months only):
________________, ______ to ________________, ______, if applicable
Notice Information for Receipt Scheduling Entity:
Name: ______________________________
Attention: ______________________________
Address: ______________________________
______________________________
Telephone: ______________________________
Fax: ______________________________]
[If delivered by Prepay LLC:
Delivery Scheduling Entity:
Delivery Point: ________________________
Effective Date(s) of Service of Delivery Scheduling Entity (full Months only):
________________, ______ to ________________, ______, if applicable
Notice Information for Delivery Scheduling Entity:
Name: ______________________________
Attention: ______________________________
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Address: ______________________________
______________________________
Telephone: ______________________________
Fax: ______________________________]
Submitted by:
[Project Participant or Prepay LLC]
By: _____________________________
Name: _____________________________
Title: _____________________________
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EXHIBIT H
PRICING AND OTHER TERMS
Administrative Fee: $[____]/MWh
Delivery Period: The period beginning on and including [______], 2026 and
ending at the end of the Day before [_______]; provided that
the Delivery Period shall end immediately upon the
termination of deliveries of Product under the Master Power
Supply Agreement pursuant to Article XVII thereof or the
early termination of the Clean Energy Purchase Contract
pursuant to Article XVII hereof.
Initial Reset Period: The period beginning at the beginning of the Day on [______]
and ending at the end of the Day of [______], provided that
the Initial Reset Period shall end immediately upon the
termination of deliveries of Product under the Master Power
Supply Agreement pursuant to Article XVII thereof or the
early termination of the Clean Energy Purchase Contract
pursuant to Article XVII hereof.
Minimum Discount
Percentage:
An Available Discount Percentage as determined under the
Re-Pricing Agreement of [___]% for each Reset Period after
the Initial Reset Period.
Monthly Discount Percentage: For each Month of the Initial Reset Period, [___]%, and for
each Month of any other Reset Period, the percentage
determined by the Calculation Agent pursuant to the Re-
Pricing Agreement, exclusive of any Annual Refund.
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EXHIBIT I
FORM OF REMEDIATION CERTIFICATE
[DATE]
Southern California Public Power Authority Issuer
Attention: Executive Director
1160 Nicole Court
Glendora, CA 91740
Email: ExecutiveDirector@scppa.org
Aron Energy Prepay 51 Prepay LLC
c/o J. Aron & Company LLC
[200 West Street
New York, NY 10282
Email: gs-prepay-notices@gs.com]
Re: Remediation Certificate for the Clean Energy Purchase Contract, dated [____], between [Participant]
and Issuer Clean Energy Purchase Contract
To the addressees:
The undersigned, duly authorized representative of [Participant], a [____] Purchaser
certifies as follows in connection with the remediation of Disqualified Remarketing Proceeds (as
defined below). Capitalized terms used herein shall have the meanings set forth in the Clean Energy
Purchase Contract.
1. Remarketing Request. Pursuant to Section 7.5 of the Clean Energy Purchase Contract, the
Contract Quantities listed below have been remarketed in a Private Business Sale as defined
in and pursuant to the remarketing provisions of the Prepaid Agreements (the proceeds of any
Disqualified Remarketing Proceeds
Remarketing
Date(s)
Remarketed
Quantities
(MWh)
Remarketing
Price ($/MWh)
Disqualified
Remarketing
Proceeds ($)
2. Remarketing and Remediation. Purchaser hereby certifies as follows in connection with the
remediation of the Disqualified Remarketing Proceeds described in Section 1 above:
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I-2
a. Set forth as Attachment 1 hereto is a copy of one or more invoices or statements for
the purchase of Product under [NOTE: Insert contract description] by Purchaser
which Purchaser agrees to apply to the remediation of the Disqualified Remarketing
Proceeds set forth in Section 1.
Remediation
Purchase
Date(s)
Remediation
Quantities
(MWh)
Remediation
Price ($/MWh)
Remediation
Dollar Amounts
($)
b. Purchaser represents and warrants that (i) all of such Product was used (A) for a
-1(e)(2)(iii), and (B) in a
141 of the Internal Revenue Code of 1986, as amended, 26 U.S.C. §1 et seq, and (ii)
none of such Product (A) is Priority Product or (B) has been or will be utilized to
remediate any remarketing proceeds for Priority Products other than the Disqualified
Remarketing Proceeds identified in Section 1.
[Signature Page Follows]
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In witness whereof the undersigned has executed this Remediation Certificate on and as of
the date first written above.
[PARTICIPANT]
By:
Name:
Title:
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SM Draft 11 December 2025
CUSTODIAL AGREEMENT1
This Custodial Agreement Agreement as of [______],
2026, by and among [____] Participant J. Aron & Company LLC, a New York limited liability
J. Aron and [____] (Custodian and together with Participant and J. Aron, the
Parties ).
RECITALS:
WHEREAS, in connection with the issuance by Southern California Public Power
Authority, a joint powers authority organized pursuant to the laws of the State of California (the
Issuer , of its [Clean Energy Project Revenue Bonds, Series 2026], J. Aron, Issuer and
Participant are entering into Assignment Agreements described and to be described in Exhibit A
Assignment Agreements
Exhibit A consistent with Section 3(b)) with the
sellers described and to be described in Exhibit A PPA Seller
PPA Sellers which definitions shall include any new PPA Seller identified by
Exhibit A consistent with Section 3(b)) under power purchase
agreements described as Purchaser Assigned PPAs in Exhibit B Purchaser Assigned PPAs ,
which definition shall include any new Purchaser Assigned
of an updated Exhibit A consistent with Section 3(b)), pursuant to which Participant partially
assigns its rights and obligations under Purchaser Assigned PPAs to Issuer and Issuer (pursuant to
Assignment Agreements referred to herein as Issuer Assignment Agreements) assigns the same
rights and obligations to J. Aron; and
WHEREAS, the Parties propose to enter into this Agreement in order to administer
payments to be received by the PPA Sellers under the Purchaser Assigned PPAs.
NOW, THEREFORE, in consideration of the foregoing and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto
agree as follows:
Section 1. Defined Terms; Interpretation.
(a) Any capitalized term used herein and not otherwise defined herein (including in the
recitals) shall have the meaning assigned to such term in that certain Clean Energy Purchase
Contract, dated as of [________], 2026. The following additional terms, when used in this
Agreement (including the preamble or recitals to this Agreement) and identified by the
capitalization of the first letter thereof, have the respective meanings set forth below, unless the
context otherwise requires:
1 NTD: To streamline negotiations, we have created a generic form for review and comment by the working
group. Once agreed upon, we will replicate this for each Project Participant.
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2
Assigned Product Price is the price payable by J. Aron under an Issuer
Assignment Agreement and shall be set forth in Exhibit A, as may be updated from time to time
consistent with the terms hereof.
Clean Energy Purchase Contract s that certain Clean Energy Purchase
Contract, dated as of [________], 2026, by and between Participant and the Issuer, as amended
from time to time in accordance with its terms.
Electricity Sale and Service Agreement s that certain Electricity Purchase,
Sale and Service Agreement, dated as of [________], 2026, by and between Prepay LLC and J.
Aron, as amended from time to time in accordance with its terms.
J. Aron Fixed Payment means, in respect of each Purchaser Assigned PPA and
each Month in the Assignment Period specified in the Assignment Agreement therefor, the amount
set forth for such Purchaser Assigned PPA and Month on Exhibit B hereto. Notwithstanding the
foregoing, there shall be no J. Aron Fixed Payment for an Assignment Agreement that provides
for payment by J. Aron to the relevant PPA Seller of a floating price for Assigned Products
delivered during the Assignment Period.
J. Aron Prepay Payment means, in respect of each Monthly PPA Invoice, an
amount determined by Participant as (a) with respect to any Purchaser Assigned PPA that has a J.
Aron Fixed Payment, the J. Aron Fixed Payment for the relevant Month and Purchaser Assigned
PPA, and (b) with respect to any Purchaser Assigned PPA that does not have a J. Aron Fixed
Payment, the Assigned Prepay Quantity for the relevant Purchaser Assigned PPA for the relevant
Month multiplied by the Assigned Product Price; provided that the J. Aron Prepay Payment shall
be reduced by (i) the face amount of any Receivables (as defined in the Electricity Sale and Service
Agreement) that is delivered by J. Aron to the Custodian pursuant to Section 4(f) and (ii) any
Remarketing Fee Amount relating to the Assigned Prepay Quantity remarketed for the relevant
Purchaser Assigned PPA; provided further that the J. Aron Prepay Payment will be determined
without regard to any PPA Seller Payment Obligation.
J. Aron Resettlement Amount means, in respect of any Monthly PPA Invoice that
reflects that a quantity of Product less than the Assigned Prepay Quantity was delivered in such
Month under the relevant Purchaser Assigned PPA, an amount equal to (i) the product of (x) the
portion of such Assigned Prepay Quantity actually delivered thereunder multiplied by (y) the
result of the APC Contract Price for such Purchaser Assigned PPA minus (ii) any Remarketing
Fee Amount relating to the Assigned Prepay Quantity remarketed for the relevant Purchaser
Assigned PPA..
Master Power Supply Agreement
Agreement, dated as of [________], 2026, by and between Prepay LLC and the Issuer, as amended
from time to time in accordance with its terms.
Monthly PPA Payment
amount determined by Participant as the total amount to be withdrawn from the Purchaser
Assigned PPA Payments Account by the Custodian and paid to the relevant PPA Seller in respect
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3
of such Monthly PPA Invoice, which shall equal the total net amount due to such PPA Seller in
respect of such Monthly PPA Invoice and shall consist of the following components:
(a) The J. Aron Prepay Payment in respect of such Monthly PPA Invoice, which shall
be deemed to be paid to such PPA Seller on behalf of J. Aron in respect of Assigned
Products for which such Monthly PPA Invoice is issued; and
(b) the Participant Net Payment, if any, in respect of such Monthly PPA Invoice.
Monthly PPA Invoice Section 3(a).
Participant Assigned PPA Payment Account
Section 4(a).
Participant Gross Payment
amount determined by Participant as the positive result, if any, of (a) all amounts owed to the
relevant PPA Seller in respect of such Monthly PPA Invoice (determined without regard to any
offsetting PPA Seller Payment Obligation), less (b) the J. Aron Prepay Payment in respect of such
Monthly PPA Invoice; provided, for clarity, that the Participant Gross Payment in respect of any
Monthly PPA Invoice (i) shall be deemed to be paid to the related PPA Seller on behalf of J. Aron
to the extent it relates to any Assigned PAYGO Products, and (ii) otherwise shall be deemed to be
paid to the relevant PPA Seller on behalf of Participant.
Participant Net Payment
amount determined by Participant as the positive result, if any, of (a) the Participant Gross Payment
in respect of such Monthly PPA Invoice less (b) the PPA Seller Payment Obligation in respect of
such Monthly PPA Invoice. The Participant Net Payment shall satisfy any obligations under a
Purchaser Assigned PPA with respect to (i) any Assigned PAYGO Products and (ii) any residual
obligations of SCPPA thereunder.
PPA Seller Payment Obligation
an amount determined by Participant as the total amount owed by the relevant PPA Seller as
reflected in such Monthly PPA Invoice, including any amounts that have been netted or set-off
against amounts owed to such PPA Seller; provided, for clarity, that the PPA Seller Payment
Obligation in respect of any Monthly PPA Invoice shall be deemed to be paid to Participant and
credited against the Participant Gross Payment in respect of such Monthly PPA Invoice, thereby
resulting in the Participant Net Payment in respect of such Monthly PPA Invoice required to be
deposited by Participant hereunder.
PPA Shortfall Lookback Summary
Invoice, a list that sets forth the following:
(i) in which Months, if any, the relevant PPA Seller delivered less than the
Assigned Prepay Quantity in the preceding 12 Months Lookback
Shortfall Month the applicable Purchaser Assigned PPA and whether such under-
deliveries were a result of Force Majeure (as defined in the relevant Purchaser Assigned
PPA);
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(ii) the percentage of the Assigned Prepay Quantity under the applicable
Purchaser Assigned PPA actually delivered for each such Lookback Shortfall Month; and
(iii) an indication of whether an increased Remarketing Fee (as defined in
the Master Power Supply Agreement) is in effect with respect to the relevant Purchaser
Assigned PPA consistent with the terms of Exhibits C and F of the Master Power Supply
Agreement.
Purchaser Assigned PPA
Contract.
Remarketing Fee Amount means, in respect of any Assigned Prepay Quantity
remarketed in any Month under the remarketing provisions of the Master Power Supply
Agreement, an amount equal to the product of (a) the Assigned Prepay Quantity so remarketed in
such Month multiplied by (b) any Remarketing Fee applicable under the Master Power Supply
Agreement.
(b) Except where expressly provided otherwise, any reference herein to any agreement
or document includes all amendments, supplements or restatements to and of such agreement or
document as may occur from time to time in accordance with its terms and the terms hereof, and
any reference to a party to any such agreement includes all successors and assigns of such party
thereunder permitted by the terms hereof and thereof.
Section 2. Appointment of Custodian. Participant and J. Aron hereby appoint
[______________] as Custodian under this Agreement, with such rights and obligations as are
specifically set forth herein. The Custodian hereby accepts such appointment under the terms and
conditions set forth herein.
Section 3. Payment Instructions to Custodian; Purchaser Assigned PPA Exhibits.
(a) Monthly Statements. No later than five Business Days following receipt of an
invoice from a PPA Seller in respect of a Purchaser Assigned PPA and any Month in the
Assignment Period therefor Monthly PPA Invoice , Participant shall deliver a statement (the
Monthly Statement showing each of the following in respect of such Monthly PPA Invoice
(based on information provided by the relevant PPA Seller in such Purchaser Assigned PPA and
Monthly PPA Invoice) to each of the Parties hereto:
(i) the J. Aron Fixed Payment;
(ii) the J. Aron Prepay Payment;
(iii) the J. Aron Resettlement Amount;
(iv) the Participant Gross Payment;
(v) the PPA Seller Payment Obligation;
(vi) the Participant Net Payment;
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(vii) the Monthly PPA Payment;
(viii) Monthly PPA Invoice Payment Date Business
Day on which payment on such Monthly PPA Invoice may be made before any incremental
interest arises thereon or any default or breach arises under the relevant Purchaser Assigned
PPA;
(ix) Custodial Agreement Payment Date one Business Day
preceding such Monthly PPA Invoice Payment Date; and
(x) the PPA Shortfall Lookback Summary;
provided that Participant shall deliver an updated Monthly Statement in respect of such Monthly
PPA Invoice within seven days following agreement by Participant and the applicable PPA Seller
to an adjustment to such Monthly PPA Invoice to the extent that such adjustment is agreed upon
prior to the date that is 10 days prior to such Monthly PPA Invoice Date; provided furthermore
that the Parties acknowledge and agree that any adjustments agreed upon with respect to a Monthly
PPA Invoice after the date specified in the foregoing provision shall be resolved solely between
Participant and the relevant PPA Seller as provided in the Assignment Agreements.
(b) Monthly Statement Verification. J. Aron shall notify Participant and the Custodian
promptly, but in no event more than three (3) Business Days, following Participant
Monthly Statement if J. Aron believes any information included on such Monthly Statement is
incorrect. Following receipt and verification of the information included in any such notice from
J. Aron, Participant shall, to the extent appropriate and in consultation with J. Aron, issue a
corrected Monthly Statement to all Parties. Each Party hereto acknowledges and agrees that (i)
Participant is calculating the Monthly Statements only for convenience of the Parties, (ii) the
purpose of this Agreement is solely to determine amounts to be paid by Participant and J. Aron
under separate contracts, and (iii) none of Participant, J. Aron nor any other Party hereto will have
any liability whatsoever with respect to any action taken or omitted by it under this Agreement
(but without prejudice to an express payment obligation arising under another contract), including
as a result of any failure by Participant to timely or properly calculate any amount to be included
in a Monthly Statement. Without limiting the foregoing, J. Aron acknowledges that it will have
an opportunity to review and comment on each calculation and date included in a Monthly
Statement (and shall be aware if such Monthly Statement has not been timely delivered), and
Participant will not be responsible in any way for any damages, costs, liabilities, loss of use or any
other claims related to an insufficient or late payment under a Purchaser Assigned PPA as a result
of any deficiencies in any Monthly Statement.
(c) Purchaser Assigned PPAs Exhibit. [Promptly following the execution of the initial
Assignment Agreements, ]J. Aron shall deliver Exhibit A to the other Parties hereto, which will
set forth certain information regarding the Purchaser Assigned PPAs as of the date hereof,
including, for each Purchaser Assigned PPA, the Assignment Period, the Assigned Product Price,
the PPA Seller thereunder, the date thereof, and payment instructions for payments to the PPA
Seller. Exhibit B to this Agreement sets forth the J. Aron Fixed Payments for the relevant
Purchaser Assigned PPAs. J. Aron shall deliver an updated Exhibit A or Exhibit B, as applicable,
to each of the other Parties hereto to reflect any changes to the information set forth therein.
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(d)
PAYGO Products
PAYGO Products shall be applied to the remediation of remarketing proceeds, if any, under the
Master Power Supply Agreement in accordance with the terms thereof, provided that for the
avoidance of doubt Assigned PAYGO Products may only be applied to remediate remarketing
proceeds that arose either in or prior to the Month in which such Assigned PAYGO Products were
purchased.
(e) Payments Following the End of an Assignment Period. Participant agrees that it
shall be solely responsible for payment under a Purchaser Assigned PPA for any Assigned
Products delivered thereunder following the end of an Assignment Period, including without
limitation any Assigned Products that are associated with Assigned Energy delivered during the
relevant Assignment Period, but payable separately from such Assigned Energy and not delivered
pursuant to the terms of the Purchaser Assigned PPA until after the end of the Assignment Period.
Additionally, Participant shall be solely responsible for payment for any Assigned Products that
are associated with Assigned Energy delivered during the relevant Assignment Period, but payable
separately from such Assigned Energy and not delivered pursuant to the terms of the Purchaser
Assigned PPA until after the end of the Assignment Period, and any such amounts will be payable
by Participant directly to PPA Seller under any such Purchaser Assigned PPA.
Section 4. Participant Assigned PPA Payments Account.
(a) Payments. With respect to certain payments required to be made by J. Aron and
Participant to the PPA Sellers under the Purchaser Assigned PPAs, there is hereby established the
custodial account detailed below [____] Participant
Assigned PPA Payments Account , and all payments and deposits made by J. Aron and
Participant hereunder shall be wired to such Participant Assigned PPA Payments Account:
[________]
ABA: [________]
FBO: [________]
Acct: [________]
FFC: [________]
Address: [________]
[________]
(b) J. Aron Payments. J. Aron shall pay the J. Aron Prepay Payment in respect of each
Monthly PPA Invoice into the Participant Assigned PPA Payments Account on or before the
relevant Custodial Agreement Payment Date set forth in the related Monthly Statement. To the
extent that (i) a J. Aron Resettlement Amount is due with respect to a Purchaser Assigned PPA
and (ii) J. Aron pays some portion of the J. Aron Prepay Payment for such Purchaser Assigned
PPA but less than the total amount of the J. Aron Prepay Payment
shall be applied first to the payment of the Monthly PPA Payment to the relevant PPA Seller. In
addition, the Custodian agrees to promptly notify Participant if it does not receive the J. Aron
Prepay Payment from J. Aron on or before any Custodial Agreement Payment Date, and in such
case Participant may elect in its sole discretion to make the J. Aron Prepay Payment to the
Custodian for the purpose of satisfying the Monthly PPA Payment.
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(c) Participant Deposits. Participant shall deposit the Participant Net Payment in
respect of each Monthly PPA Invoice into the Participant Assigned PPA Payments Account on the
relevant Custodial Agreement Payment Date set forth in the related Monthly Statement.
(d) Application of Payments. The Custodian shall withdraw and apply amounts
received under this Section 4 as follows:
(i) any J. Aron Prepay Payment in respect of a Monthly PPA Invoice received
from J. Aron (including any payment by Participant
sentence of Section 4(b)) and any Participant Net Payment in respect of a Monthly PPA
Invoice received from Participant shall be applied first to the payment of the Monthly PPA
Payment in respect of such Monthly PPA Invoice to the relevant PPA Seller on the relevant
Monthly PPA Invoice Payment Date pursuant to the payment instructions set forth on
Exhibit A; provided that if amounts on deposit in the Purchaser Assigned PPA Payment
Account are insufficient to pay the entire Monthly PPA Payment in respect of any Monthly
PPA Invoice on such date, the Custodian shall (i) withdraw and pay to the relevant PPA
Seller the entire remaining balance of the Purchaser Assigned PPA Payment Account
(provided that, to the extent that more than one Monthly PPA Invoice is due on such date,
the Custodian shall make payment of the available amounts on a pro-rated basis to the
payment of the relevant Monthly PPA Invoices on a percentage basis with payment to each
relevant PPA Seller of (x) a percentage of the available funds based on (y) the percentage
of each relevant Monthly PPA Payment of the aggregate amount of the Monthly PPA
Payments due on such date) and (ii) notify such PPA Seller of the amounts received for
such Month from each of J. Aron and Participant consistent with such
information provided in Exhibit A; provided furthermore that, if the J. Aron Prepay
Payment in respect of any Monthly PPA Invoice exceeds the Monthly PPA Payment in
respect of such Monthly PPA Invoice, then the excess of such J. Aron Prepay Payment
over such Monthly PPA Payment shall be remitted to Participant on the relevant Monthly
PPA Invoice Payment Date pursuant to Participant
Exhibit C; and
(ii) following the application of payments pursuant to Section 4(d)(i), any J.
Aron Resettlement Amount in respect of a Monthly PPA Invoice received from J. Aron
shall be remitted to Participant on the relevant Monthly PPA Invoice Payment Date
pursuant to Participant Exhibit C.
(e) Amounts Held in Trust. Amounts deposited in the Participant Assigned PPA
Payments Account shall be held in trust for the benefit of Participant until applied as set forth in
Section 4(d) and Section 12, as applicable, and there is hereby granted to Participant a lien on and
security interest in the Participant Assigned PPA Payments Account pending such application.
The Custodian shall not be required to comply with any orders, demands, or other instructions
from Participant with respect to the Participant Assigned PPA Payments Account, including,
without limitation, items presented for payment, or any order or instruction directing the
disposition of funds or other assets held in or credited to the Participant Assigned PPA Payments
Account, and Participant agrees that prior to the termination of this Agreement in accordance with
the terms hereof, it shall have no right to direct the disposition of funds or other assets held in or
credited to the Participant Assigned PPA Payments Account other than by issuing Monthly
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Statements, or to withdraw or otherwise obtain funds or other assets held in or credited to the
Participant Assigned PPA Payments Account, whether by order or instruction to the Custodian or
otherwise.
(f) Transfer of Receivables. With respect to each Monthly Statement, to the extent J.
Aron has purchased Receivables (as defined in the Electricity Sale and Service Agreement) for
amounts owed by Participant for the Month to which such Monthly Statement relates, J. Aron may,
at its option and subject to the terms of the relevant Issuer Assignment Agreement (including the
terms thereof that limit the transfer of Receivables by J. Aron to a PPA Seller to the portion of any
Receivables that relate to Assigned Products delivered under the applicable Issuer Assignment
Agreement), (i) notify the Custodian that it intends to transfer all or any portion of such
Receivables to the applicable PPA Seller, and (ii) reduce the J. Aron Prepay Payment(s) in respect
of the Monthly PPA Invoice from such PPA Seller by the face amount of such Receivables to be
transferred. To the extent J. Aron has notified the Custodian of its intent to transfer any such
Receivables to a PPA Seller, J. Aron shall cause such Receivables to be transferred to such PPA
Seller not later than the relevant Custodial Agreement Payment Date.
Section 5. Custodian; Fees.
(a) Limitation on Liability. The Custodian shall have (i) no liability under any
agreement other than this Agreement and (ii) no duty to inquire as to the provisions of any
agreement other than this Agreement and the Purchaser Assigned PPAs. The Custodian may rely
upon and shall not be liable for acting or refraining from acting upon any written notice, document,
instruction or request furnished to it hereunder in accordance with the terms hereof and believed
by it to be genuine and to have been signed or presented by the proper Party or Parties. The
Custodian shall be under no duty to inquire into or investigate the validity, accuracy or content of
any such document, notice, instruction or request. The Custodian shall have no duty to solicit or
compel any payments which may be due to it, or to take any action to compel J. Aron or Participant
to make the deposits required under Section 4. The Custodian shall not be liable for any action
taken or omitted by it in good faith except to the extent that a court of competent jurisdiction
any loss to any other Party hereto. In connection with the execution of any of its powers or the
performance of any of its duties hereunder, the Custodian may consult with counsel, accountants
and other skilled persons selected and retained by it. The Custodian shall not be liable for anything
done, suffered or omitted in good faith by it in accordance with the advice or opinion of any such
counsel, accountants or other skilled persons, provided the Custodian exercised due care and good
faith in the selection of such person. Any permissive right or power granted to the Custodian to
take actions enumerated under this Agreement shall not be construed as a duty to act. In the event
that the Custodian shall be uncertain as to its duties or rights hereunder or shall receive instructions,
claims or demands from any Party hereto which, in its opinion, conflict with any of the provisions
of this Agreement, it shall be entitled to refrain from taking any action and its sole obligation shall
be to keep safely all property held in escrow until it shall be directed otherwise in writing by all of
the other Parties hereto or by a final order or judgment of a court of competent jurisdiction. The
Custodian may interplead all of the assets held hereunder into a court of competent jurisdiction or
may seek a declaratory judgment with respect to certain circumstances, and thereafter be fully
relieved from any and all liability or obligation with respect to such interpleaded assets or any
action or non-action based on such declaratory judgment. Anything in this Agreement to the
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contrary notwithstanding, in no event shall the Custodian be liable for special, indirect, incidental
or consequential or punitive damages, losses or penalties of any kind whatsoever (including but
not limited to lost profits), regardless of the form of action. The Custodian may engage and act
through agents and attorneys and shall not be liable for the misconduct or negligence of any such
agent or attorney appointed with due care. Nothing herein shall obligate or be construed to obligate
the Custodian to advance its own funds, or to expend or risk its own funds. The Custodian shall
be responsible only for funds actually received by it for deposit into the Participant Assigned PPA
Payments Account, and the Custodian shall not be obliged to advance or risk its own funds to make
any payments required hereunder. The Custodian shall have only those duties expressly set forth
in this Agreement and no implied duties shall be read into this Agreement against the Custodian.
The Parties hereto acknowledge and agree that the Custodian is not a fiduciary by virtue of
accepting and carrying out its obligations under this Agreement and has not accepted any fiduciary
duties, responsibilities or liabilities with respect to its services hereunder. The Custodian shall not
be responsible for the perfection of any security interest granted hereunder.
(b) Custodian Fee. Participant agrees to (i) pay the Custodian reasonable compensation
for the services to be rendered hereunder, which compensation shall be $[_______] for each year
that this Agreement is in effect, and (ii) pay or reimburse the Custodian upon request for all
expenses, disbursements and advances, including reasonable attorneys fees and expenses,
incurred or made by it in connection with the preparation, execution, performance, delivery,
modification and termination of this Agreement. The parties hereto acknowledge that this
provision shall survive the resignation or removal of the Custodian or the termination of this
Agreement.
Section 6. Succession. The Custodian may resign and be discharged from its duties or
obligations hereunder by giving not less than 45
to the other Parties hereto specifying a date when such resignation shall take effect; and such
resignation shall take effect upon the day specified in such notice unless a successor shall not have
been appointed by the other Parties hereto on such date, in which event such resignation shall not
take effect until a successor is appointed. The other Parties hereto shall use their commercially
reasonable efforts to make such appointment in a timely fashion, provided that any custodian
appointed in succession to the Custodian shall be a bank or trust company organized under the
laws of any state or a national banking association and shall have capital stock, surplus and
undivided earnings aggregating at least $50,000,000 and shall be a bank with trust powers or trust
company willing and able to accept the office on reasonable and customary terms and authorized
by law to perform all the duties imposed upon it by this Agreement. Any corporation or association
into which the Custodian may be merged or converted or with which it may be consolidated, or
line of business may be transferred, shall be the Custodian under this Agreement without further
act. Notwithstanding the foregoing, if no appointment of a successor Custodian shall be made
pursuant to the foregoing provisions of this Section 6 within 45 days after the Custodian has given
written notice to the other Parties of its resignation as provided in this Section 6, the Custodian
shall be entitled to apply to any court of competent jurisdiction to appoint a successor Custodian.
Said court may thereupon, after such notice, if any, as such court may deem proper, appoint a
successor Custodian. Any corporation or association into which the Custodian may be merged or
converted or with which it may be consolidated, or any corporation or association to which all or
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Custodian under this Agreement without further act.
Section 7. Reimbursement. J. Aron and Participant agree, jointly and severally
(subject to the second proviso of this Section 7), to reimburse the Custodian and its directors,
officers, agents and employees for any and all loss, liability or expense (including the fees and
expenses of in-house or outside counsel and experts and their staffs and all expense of document
location, duplication and shipment) arising out of or in connection with (a)
execution and performance of this Agreement, except to the extent that such loss, liability or
expense is finally adjudicated to have been caused primarily by the negligence of the Custodian or
such director, officer, agent or employee seeking reimbursement, or (b) its following any
instructions or other directions from J. Aron or Participant, except to the extent that its following
any such instruction or direction is expressly forbidden by the terms hereof; provided, however,
that any amounts due under this Section 7 (x) shall not duplicate any other amounts due under this
Agreement, including without limitation amounts due under Section 13 hereof and (y) as between
J. Aron and Participant (but without affecting the joint and several nature of the obligation to the
Custodian), shall be paid equally by each of J. Aron and Participant (i.e., 50% by J. Aron and 50%
by Participant), subject to the second proviso of this Section 7; provided further, however, that,
notwithstanding the joint and several nature of the obligations under this Section 7, any amounts
due under clause (b) of this sentence resulting from instructions or directions that are not expressly
provided for in this Agreement and are given to the Custodian by only one Party shall be the sole
obligation of such Party. The Parties hereto acknowledge that this provision shall survive the
resignation or removal of the Custodian or the termination of this Agreement.
Section 8. Taxpayer Identification Numbers; Tax Matters. J. Aron and Participant
represent that their correct taxpayer identification numbers assigned by the Internal Revenue
Service or any other taxing authority is set forth on the signature page hereof. Any tax returns or
reports required to be prepared and filed in connection with the Participant Assigned PPA
Payments Account will be prepared and filed by Participant, and the Custodian shall have no
responsibility for the preparation and/or filing of any tax return with respect to any income earned
on the Participant Assigned PPA Payments Account. In addition, any tax or other payments
required to be made pursuant to such tax return or filing shall be paid by Participant. The
Custodian shall have no responsibility for making such payment unless directed to do so in writing
by the appropriate authorized Party .
Section 9. Notices. Any notice, demand, statement or request required or authorized
by this Agreement to be given by one Party to another Party shall be in writing and shall be sent
by courier, or personal delivery (including overnight delivery service) to each of the notice
recipients and addresses specified in Exhibit C for the receiving Party. Any such notice, demand,
or request shall be deemed to be given when actually received if delivered by courier or personal
delivery (including overnight delivery service). Each
prior written notice to the other Party, to change its list of notice recipients and addresses in Exhibit
C. The Parties may mutually agree in writing at any time to deliver notices, demands or requests
through alternate or additional methods, such as electronic mail; provided furthermore that the
Parties acknowledge and agree that Monthly Statements and any communications under this
Agreement relating thereto may be delivered via email to the email addresses specified for each
Party in Exhibit C.
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Section 10. Miscellaneous.
(a) Amendments. The provisions of this Agreement may be waived, altered, amended
or supplemented, in whole or in part, only by a writing signed by all of the Parties hereto.
(b) Assignments. Neither this Agreement nor any right or interest hereunder may be
assigned in whole or in part by any Party, except as provided in Section 6, without the prior written
consent of the other Parties.
(c) Governing Law. This Agreement and the rights and duties of the Parties hereunder
shall be governed by and construed, enforced, and performed in accordance with the laws of the
State of New York, without regard to any conflicts of law principle that would direct the
application of the laws another jurisdiction; provided, however, that the authority of Participant to
enter into and perform its obligations under this Agreement shall be determined in accordance with
the laws of the State of California.
(d) Jurisdiction. Each Party hereto irrevocably waives any objection on the grounds of
venue, forum non-conveniens or any similar grounds and irrevocably consents to service of
process by mail or in any other manner permitted by applicable law and consents to the exclusive
jurisdiction of (A) the courts of the State of New York located in the Borough of Manhattan, or of
the United States District Court located in the Borough of Manhattan. The Parties further hereby
waive any right to a trial by jury with respect to any lawsuit or judicial proceeding arising or
relating to this Agreement.
(e) Force Majeure. No Party to this Agreement shall be liable to any other Party hereto
for losses due to, or if it is unable to perform its obligations under the terms of this Agreement
because of, acts of God, fire, war, terrorism, epidemic, pandemic, floods, strikes, electrical outages,
equipment or transmission failure, or other causes reasonably beyond its control; provided that a
party affected by any such event shall exercise commercially reasonable efforts to resume
performance as quickly as possible.
(f) Counterparts. This Agreement may be executed in one or more counterparts, each
of which shall be deemed an original, but all of which together shall constitute one and the same
instrument. All signatures of the Parties to this Agreement may be transmitted by facsimile or by
digital pdf transmission, and such facsimile or pdf will, for all purposes, be deemed to be the
original signature of such Party whose signature it reproduces, and will be binding upon such Party.
The Parties agree that the electronic signature of a Party to this Agreement, including all
acknowledgements, authorizations, directions, waivers and consents thereto (or any amendment
or supplement thereto) shall be as valid as an original signature of such Party and shall be effective
to bind such Party to this Agreement. The Parties agree that any electronically signed document
(including this Agreement) shall be deemed (i) to be
signed, and (iii) to constitute a record established and maintained in the ordinary course of business
means sent in the form of a facsimile or sent via the Internet as
a pdf (portable document format) or other replicating image attached to an e-mail message; and,
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introduced as evidence in any judicial, arbitral, mediation or administrative proceeding, will be
admissible as between the Parties to the same extent and under the same conditions as other
original business records created and maintained in documentary form. Neither Party shall contest
the admissibility of true and accurate copies of electronically signed documents on the basis of the
best evidence rule or as not satisfying the business records exception to the hearsay rule.
(g) No Obligation to Invest. The Custodian shall not be under any obligation to invest
or pay interest on amounts held in the Participant Assigned PPA Payments Account from time to
time.
(h) Allocation of Payments. Nothing in this Agreement is intended to create any
liabilities between Participant and J. Aron. This Agreement is intended solely to allocate payments
that are actually made by J. Aron and Participant in respect of amounts owed for physically settled
energy under the Purchaser Assigned PPAs that is redelivered under the Electricity Sale and
Service Agreement, the Master Power Supply Agreement and the Clean Energy Purchase Contract.
Section 11. Compliance with Court Orders. In the event that any amount held by the
Custodian hereunder shall be attached, garnished or levied upon by any court order, or the delivery
thereof shall be stayed or enjoined by an order of a court, or any order, judgment or decree shall
be made or entered by any court affecting the property deposited under this Agreement, the
Custodian is hereby expressly authorized, in its sole discretion, to obey and comply with all writs,
orders or decrees so entered or issued, which it is advised by legal counsel of its own choosing are
binding upon it, whether with or without jurisdiction, and in the event that the Custodian obeys or
complies with any such writ, order or decree it shall not be liable to any of the Parties hereto or to
any other person, firm or corporation, by reason of such compliance notwithstanding that such
writ, order or decree may be subsequently reversed, modified, annulled, set aside or vacated.
Section 12. Term; Winding Up. This Agreement will expire concurrently with the
receipt of written notice from Participant, with a copy to the other Parties, that the Clean Energy
Purchase Contract has terminated in accordance with its terms.
payment of any Monthly PPA Payments due in respect of the final month of commodity deliveries
prior to such a termination, any remaining balance in the Participant Assigned PPA Payments
Account shall be paid to Participant.
Section 13. Indemnification. J. Aron and Participant, jointly and severally, agree to
protect, indemnify, defend and hold harmless, the Custodian, and affiliates, and each person who
controls the Custodian (and each of their respective directors, officers, agents and employees) from
and against all claims, damages, losses, liabilities, actions, suits, costs, judgments and expenses
(including, without limitation,
as Custodian hereunder (including, for the avoidance of doubt, any costs, expenses and reasonable
Party), except for
any claim, damage or loss resulting from the negligence of the Custodian; provided, however, that
any amounts due under this Section 13 (x) shall not duplicate any other amounts due under this
Agreement, including without limitation amounts due under Section 7 hereof, and (y) as between
J. Aron and Participant (but without affecting the joint and several nature of the obligation to the
Custodian) shall be paid equally by each of the J. Aron and Participant (i.e., 50% by J. Aron and
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50% by Participant). The obligations of this Section 13 shall survive any resignation or removal
of the Custodian and the termination of this Agreement.
Section 14. Patriot Act. J. Aron and Participant acknowledge that the Custodian is
CIP
the USA PATRIOT Act and its implementing regulations, pursuant to which the Custodian must
obtain, verify and record information that allows the Custodian to identify J. Aron and Participant.
Accordingly, prior to opening the Participant Assigned PPA Payments Account described in
Section 4 of this Agreement, the Custodian will ask J. Aron and Participant to provide certain
information including but not limited to name, physical address, tax identification number and
other information that will help the Custodian identify and verify J. Aron and Participant
identities, such as organizational documents, certificate of good standing, license to do business,
or other pertinent identifying information. J. Aron and Participant agree that the Custodian cannot
open any account hereunder unless and until the Custodian verifies J. Aron and Participant
identities in accordance with its CIP.
[Signature Pages Follow]
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Signature Page to Participant PPA Payment Custodial Agreement
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be duly
executed and delivered by their respective duly authorized officers as of the date first written
above.
[PARTICIPANT]
By: ___________________________________
Name: _____________________________
Title: ______________________________
Taxpayer ID Number: _________________
J. ARON & COMPANY LLC
By: ___________________________________
Name: _____________________________
Title: ______________________________
Taxpayer ID Number: _________________
[CUSTODIAN]
By: ___________________________________
Name: _____________________________
Title: ______________________________
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Exhibit A
EXHIBIT A
ASSIGNED PPAS
Purchaser Assignment Agreements Issuer Assignment Agreements
1. Limited Assignment Agreement dated
[____], by and among Purchaser, the Issuer
and [PPA Seller]
Assigned PPA: [____]
Assigned Product Price:
Assignment Period:
PPA Seller:
PPA Seller Payment Instructions:
1. Limited Assignment Agreement dated
[____], by and among J. Aron, the Issuer
and [PPA Seller]
2. Limited Assignment Agreement dated
[____], by and among Purchaser, the Issuer
and [PPA Seller]
Assigned PPA: [____]
Assigned Product Price:
Assignment Period:
PPA Seller:
PPA Seller Payment Instructions:
2. Limited Assignment Agreement dated
[____], by and among J. Aron, the Issuer
and [PPA Seller]
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Exhibit B
EXHIBIT B
J. ARON FIXED PAYMENTS
Month J. Aron Fixed Payment for
[PPA 1]
J. Aron Fixed Payment for
[PPA 2]
1/1/2026
2/1/2026
3/1/2026
4/1/2026
5/1/2026
6/1/2026
7/1/2026
8/1/2026
9/1/2026
10/1/2026
11/1/2026
12/1/2026
1/1/2026
2/1/2026
3/1/2026
4/1/2026
5/1/2026
6/1/2026
7/1/2026
8/1/2026
9/1/2026
10/1/2026
11/1/2026
12/1/2026
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Exhibit C
EXHIBIT C
NOTICE INFORMATION
J. Aron:
J. Aron & Company LLC
200 West Street
New York, NY 10282
Email: gs-prepay-notices@gs.com
Participant:
[______________]
[______________]
[______________]
Attention: [______________]
Email: [______________]
Custodian:
[______________]
[______________]
[______________]
Attention: [______________]
Email: [______________]
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1/23/2026 Draft
i
300506100.4
PROJECT COORDINATION AND GOVERNANCE AGREEMENT
(SCPPA CLEAN ENERGY II PROJECT)
BY AND AMONG
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY,
CITY OF BURBANK,
CITY OF COLTON,
CITY OF PASADENA
AND
CITY OF VERNON
Dated as of ___________, 2026
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40643083.2
ii
300506100.4
Table of Contents
Page
1. AGREEMENT ................................................................................................................... 2
2. DEFINITIONS ................................................................................................................... 2
3. RESPONSIBILITIES OF PROJECT COORDINATING COMMITTEE ...................... 11
4. DUTIES OF PROJECT MANAGER .............................................................................. 23
5. RESPONSIBILITIES OF SCPPA; ANNUAL BUDGET ............................................... 24
6. PROJECT PARTICIPANT OBLIGATIONS; PAYMENT OF COSTS ......................... 28
7. LIABILITY ...................................................................................................................... 35
8. RELATIONSHIP OF THE PARTIES ............................................................................. 40
9. INDEMNITY ................................................ ERROR! BOOKMARK NOT DEFINED.
10. DISPUTES ....................................................................................................................... 40
11. GOVERNING LAW ........................................................................................................ 42
12. REPRESENTATION AND NOTICES ........................................................................... 42
13. SEVERABILITY. ............................................................................................................ 44
14. AMENDMENTS ............................................................................................................. 44
Appendix A Percentages of Aggregate Assigned Energy
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PROJECT COORDINATION AND GOVERNANCE AGREEMENT
(SCPPA CLEAN ENERGY II PROJECT)
This Project Coordination and Governance Agreement (SCPPA Clean Energy II Project)
Agreement
CALIFORNIA PUBLIC POWER AUTHORITY, a joint powers agency and a public entity
SCPPA
municipal corporation organized and existing under the laws of the State of California
e
VERNON, a municipal corporation organized and existing under the laws of the State of California
urbank, Colton, Pasadena and Vernon are each sometimes referred to
herein individually Party, the Parties
RECITALS
has adopted its Resolution No.
2026-____, establishing the Clean Energy II
.
$_______________ Southern California Public Power Authority Clean Energy Project Revenue
-year supply of renewable
energy to be sold to the Project Participants.
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In connection with the Project and the issuance of the Bonds, SCPPA has entered into a
Clean Energy Purchase Contract with each of the Project Participants, providing for the sale to
each Project Participant of a specified portion of the renewable energy prepaid with proceeds of
the Bonds.
In order to provide for joint coordination and governance of the Project and the appropriate
allocation of costs and refunds among the Project Participants, the Parties desire to enter into this
Agreement.
1. AGREEMENT
For and in consideration of the premises and the mutual covenants and agreements
hereinafter set forth and other good and valuable consideration, it is agreed by and among the
Parties as hereinafter set forth. This Agreement shall take effect on the date when each Clean
Energy Purchase Contract has been executed and delivered by SCPPA and the Project Participant
party thereto.
2. DEFINITIONS
The following defined terms shall have the meanings set forth below.
A ll of the provisions contained in the California Joint Exercise of Powers Act
found in Chapter 5 of Division 7 of Title 1 of the Government Code of the State of California,
beginning at California Government Code Section 6500 et seq., as amended from time to time.
under all of the Clean Energy Purchase Contracts.
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means the budget approved by the Project Coordinating Committee and
adopted by the Board of Directors pursuant to Section 5 of this Agreement not less than 30 days
nor more than 60 days prior to the beginning of each Fiscal Year, including any amendments
thereto, which shall show a detailed estimate of Project Costs for such Fiscal Year and all credits,
charges, revenues, income, or other funds to be applied to such costs, for and applicable to such
Fiscal Year.
Contract.
Contract.
he written statement prepared or caused to be prepared each
calendar month by, or on behalf of, SCPPA which shall be based upon certain of the information
in the Annual Budget and shall show for such month the amount to be paid to SCPPA by a Project
Participant in accordance with the provisions of its Clean Energy Purchase Agreement.
of Directors shall have the meaning set forth in the Recitals.
law firm specializing in public finance, selected by SCPPA to serve as Bond Counsel in accordance
with the Bond Indenture.
(i) the Trust Indenture, dated as of ___________, 2026, between
SCPPA and the Trustee, and (ii) any trust indenture entered into in connection with the
commencement of any Interest Rate Period after the initial Interest Rate Period between SCPPA
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and the Trustee containing substantially the same terms as the indenture described in clause (i) and
which is intended to replace the indenture described in clause (i) as of the commencement of such
Interest Rate Period.
dated as of _________, 2026, between SCPPA and Burbank.
___________, 2026, among Burbank, J. Aron and the PPA Custodian.
4 hereof.
Purchase Contract, the Colton Clean Energy Purchase Contract, the Pasadena Clean Energy
Purchase Contract and the Vernon Clean Energy Purchase Contract.
dated as of _________, 2026, between SCPPA and Colton.
3.2 hereof.
Agreement, dated as of __________, 2026, between J. Aron and Prepay LLC.
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requirements and limitations to which the Bonds are subject under the Internal Revenue Code or
related Treasury Regulations in order that the Bonds initially qualify and maintain qualification as
federally tax-exempt.
the twelve-month period commencing at 12:01 a.m. on July 1 of each
year and ending at 12:01 a.m. on the following July 1, or such other time frame as determined by
the Project Coordinating Committee or the Board.
__________, 2026, among SCPPA, J. Aron and the PPA Custodian.
1, 1980, as amended and modified from time to time,
entered into pursuant to the provisions of the Act, among SCPPA and its members.
Section 9(c) of Exhibit C to the Master
Power Supply Agreement.
of ___________, 2026, between Prepay LLC and SCPPA.
dated as of ___________, 2026, between SCPPA and Pasadena.
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___________, 2026, among Pasadena, J. Aron and the PPA Custodian.
Percentages of Aggregate Assigned s for all Project
Participants set forth in Appendix A hereto (as such Appendix A may be revised from time to time
by SCPPA to reflect the then current interests of the Project Participants in Aggregate Assigned
Energy under the Prepay Documents pursuant to Section 3.3 hereof).
and the Purchaser PPA Custodial Agreements.
under the PPA Custodial Agreements.
Electricity Sale and Service Agreement, the Master Power Supply Agreement and the PPA
Custodial Agreements, and each agreement referenced in any of the foregoing that relates to the
Project.
s the committee of Project Participants established
pursuant to Section 3.1 hereof.
Project Costs all costs associated with the Project, including without limitation
the following costs, as applicable:
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(i)
accommodating or facilitating the Project, and from its
administration and operation of the Project or any component
thereof, including any costs arising under the Prepay Documents or
this Project Agreement;
(ii) all costs related to the conducting of the business of SCPPA with
respect to the Project, including overhead costs, administrative and
general costs such as the applicable portion of salaries, fees for legal,
engineering, financial, and other services, all other costs attributable
to miscellaneous and incidental expenses in connection with the
administration of the Project;
(iii)
rights with respect to any defaults by any counterparty under any
Prepay Documents to which it is a party or any other agreements or
other instruments relating to or affecting the Project;
(iv) the cost, where applicable, of contracting for and facilitating the
delivery of the Assigned Product, including delivery of the Assigned
Energy at the prescribed Point of Delivery or other prescribed
location, including but not limited to cost related to transmission,
interconnecting, balancing, shaping, firming and delivery and for
otherwise facilitating the dispatching, scheduling, disposition,
movement, taking, receiving, crediting and accounting for Assigned
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Product that the Board of Directors reasonably determines shall be
included as a Project Cost;
(v) all costs, expenses, obligations and liabilities associated with
exercising all performance rights, options, benefits, entitlements,
duties, liabilities and obligations of SCPPA under the Prepay
Documents;
(vi) the cost of those measures taken for the benefit of, and in connection
with, the Project that the Project Coordinating Committee
determines shall be included as a Project Cost;
(vii) All costs and expenses for examination of legal and regulatory
issues and for securing of legal or regulatory approvals, services
fees, processing fees and legal fees
and financing costs relating to and in connection with the Project;
(viii) All costs and expenses incurred in connection with the issuance and
sale of the Bonds and any remarketing of the Bonds;
(ix) All fees and expenses of the Trustee, Bond Counsel, Special Tax
Counsel and other legal counsel for the Bonds or the Project,
accountants, auditors, rebate analysts and other consultants with
respect to the Bonds or the Project;
(x)
(xi) The cost of any administrative, regulatory or judicial proceeding or
any litigation associated with the Prepay Documents, or any aspect
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of the operation, management or administration of the Project or in
connection therewith;
(xii) All costs of insurance, if any, in connection with the Project,
including amounts to fund any self-insurance program;
(xiii) All costs relating to litigation, including disbursements or other
amounts paid as a result of such litigation, or injury or damage
claims or judgments paid by SCPPA in connection with the Project,
less proceeds of insurance, if any;
(xiv) All costs of compliance by SCPPA with its indemnification and
defense obligations, including but not limited to obligations under
Sections 7.4 and 7.5 of this Agreement or under any Prepay
Document;
(xv) Legally required or permitted federal, state, and local taxes relating
to the Project;
(xvi) All legal fees relating to the Project (including, but not limited to,
legal fees incurred by SCPPA in the enforcement of any provision
or provisions of the Prepay Documents);
(xvii) Reserves in such amounts as deemed reasonably necessary by the
Board of Directors, and as may be provided or required in the Bond
Indenture, and such additional amounts of reserves, as may be
established pursuant to the Bond Indenture;
(xviii) Without duplication with respect to amounts otherwise provided in
this definition, the deposit or deposits from the proceeds of Bonds
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300506100.4
issued to finance such costs in any funds established pursuant to the
Bond Indenture which deposit or deposits are required or permitted
by the Bond Indenture;
(xix) Any amounts required to be paid pursuant to section 148 of the
Internal Revenue Code; and
(xx) All costs required to be paid to the Project Manager pursuant to any
applicable agreement for project management for the Project or to
an agent pursuant to any agency agreement pertaining to the Project.
one or more designees appointed by SCPPA to assist
with the performance of responsibilities under the Clean Energy Purchase Contracts and
this Agreement.
Agreement, the Pasadena PPA Custodial Agreement and the Vernon PPA Custodial Agreement.
governing board of Prepay LLC pursuant to its operating agreement.
recognized law firm specializing in public finance, selected by SCPPA to serve as Special Tax
Counsel in accordance with the Bond Indenture.
Indenture.
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300506100.4
dated as of ____________, 2026, between SCPPA and Vernon.
___________, 2026, among Vernon, J. Aron and the PPA Custodian.
The meaning of capitalized terms in this Agreement not otherwise defined in context shall
be as defined in each Clean Energy Purchase Contract, which are incorporated herein by this
reference.
3. RESPONSIBILITIES OF PROJECT COORDINATING COMMITTEE
3.1 Establishment and Authorization of Project Coordinating Committee. The
Project Coordinating Committee is hereby established and duly authorized
to act on behalf of the Project Participants as provided in this Section 3 for
the purpose of (a) providing coordination among, and information to, the
Project Participants and SCPPA, (b) the administration of the Prepay
Documents to which SCPPA is a party, (c) making any recommendations
to the Board of Directors regarding the administration of the Project, and
(d) execution of the Project Coordinating Committee responsibilities set
forth in Section 3.6 hereof, including the various financial, administrative,
and technical matters which may arise from time to time in connection with
the Project or the administration thereof, and such further developments as
may need to be addressed.
3.2 Committee Representatives; Committee Votes. The Project Coordinating
Committee
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Representative a Committee Representative from
Burbank, (b) a Committee Representative from Colton, (c) a Committee
Representative from Pasadena, (d) a Committee Representative from
Vernon, and (e) a non-voting Committee Representative from SCPPA.
Each such Committee Representative shall be entitled to cast a vote (a
Committee Vote :
(i) The Committee Representative from Burbank shall be entitled to
cast its Committee Vote equal to the Percentage of Aggregate
Assigned Energy for Burbank as set forth in Appendix A;
(ii) The Committee Representative from Colton shall be entitled to cast
its Committee Vote equal to the Percentage of Aggregate Assigned
Energy for Colton as set forth in Appendix A;
(iii) The Committee Representative from Pasadena shall be entitled to
cast its Committee Vote equal to the Percentage of Aggregate
Assigned Energy for Pasadena as set forth in Appendix A; and
(iv) The Committee Representative from Vernon shall be entitled to cast
its Committee Vote equal to the Percentage of Aggregate Assigned
Energy for Vernon as set forth in Appendix A.
3.3 Revisions to Percentages of Aggregate Assigned Energy. SCPPA shall
revise Appendix A from time to time to reflect any changes in the
Percentages of Aggregate Assigned Energy pursuant to the Prepay
Documents, and the Parties hereto agree that any such revision shall be
considered an element of the administration of this Agreement and shall not
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300506100.4
be deemed an amendment to this Agreement that requires any action or
approval by any of the Parties hereto. SCPPA shall provide each Project
Participant with prompt notice in writing of any revision to Appendix A.
revision to Appendix A shall take effect upon written notice
thereof to all Project Participants.
3.4 Notice of Committee Representatives; Alternates; Chairperson. Each of the
Parties hereto shall, within 30 days after issuance of the Bonds, give written
notice to each of the other Parties of its Committee Representative on the
Project Coordinating Committee. An alternate Committee Representative
may be appointed to act on behalf of any Committee Representative by
similar written notice in the absence of the regular Committee
Representative. An alternate Committee Representative may attend all
meetings of the Project Coordinating Committee but may vote only if the
Committee Representative entitled to vote and for whom she/he serves as
an alternate is absent. -voting Committee Representative shall
Chairperson Project Coordinating Committee.
Upon any Project Participant providing its written proxy to SCPPA,
authorized in the absence of such Project Participant to vote by proxy for
such Project Participant on the Project Coordinating Committee. Such a
proxy shall be valid only for the meeting or meetings for which it is given.
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3.5 Meetings of Project Coordinating Committee. The Chairperson shall
promptly call a meeting of the Project Coordinating Committee at the
request of any representative in a manner and to the extent permitted by law.
For purposes of conducting meetings, a quorum shall exist so long as
Project Participants shall be present. Except as may otherwise be provided
in an agreement to which all of the Project Participants agree, all actions
taken by the Project Coordinating Committee shall require an affirmative
vote of Project Participants having Percentages of Aggregate Assigned
Energy aggregating at least [eighty percent (80%)] of the total Aggregate
Assigned Energy; provided, however, that notwithstanding the foregoing, if
a proposed action before the Project Coordinating Committee relates solely
to the interests of one or more Project Participants, then each Project
Participant not having an interest in the proposed action (as determined in
good faith by such disinterested Project Participant) agrees that it shall not
unreasonably withhold its affirmative vote with respect to such proposed
action. Unless the Board of Directors shall otherwise determine to require
a majority vote pursuant to the terms of the Joint Powers Agreement, all
actions with respect to the Project taken by the Board of Directors shall
require an affirmative vote of at least [eighty percent (80%)] of the Project
Votes (as defined in the Joint Powers Agreement) cast thereon. Conduct of
Project Coordinating Committee meetings and actions taken by the Project
Coordinating Committee may be taken by vote given in an assembled
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300506100.4
meeting or by telephone, video conferencing, letter, e-mail or by any
combination thereof, to the extent permitted by law.
3.6 Project Coordinating Committee Responsibilities. In addition to those
responsibilities described in Section 3.1, the Project Coordinating
Committee shall have the following responsibilities:
(i) Provide liaison between SCPPA and the Project Participants at the
management or other levels with respect to the Project, maintain a
liaison between the Project Participants and all other SCPPA
members with respect to the Project, and where the Project
Coordinating Committee deems it appropriate, maintain with the
counterparties to any Prepay Documents and with any other entities
or utilities engaged in or in connection with other renewable energy
projects.
(ii) Exercise general supervision over any subcommittee established
pursuant to Section 3.9 hereof.
(iii) Review, develop and, if appropriate, recommend, modify, or
approve all budgets and revisions thereof prepared and submitted by
SCPPA or the Project Manager pursuant to any applicable
agreement.
(iv) Review, develop, and, if appropriate, recommend, modify, approve,
or otherwise act upon any systems or procedures for adjustment of
the Annual Budget or any alternative methodologies for budgeting
or billing as set forth in Sections 5 and 6 hereof.
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(v) Carry out all other actions reposed in the Project Coordinating
Committee with respect to budgeting and billing as set forth in
Sections 5 and 6 hereof.
(vi) Review, discuss, and attempt to resolve any disputes among the
Project Participants or the counterparties to any of the Prepay
Documents.
(vii) Make recommendations to the Project Manager, the Board of
Directors, the Project Participants or the counterparties to any of the
Prepay Documents, as appropriate, with respect to the operation and
ongoing administration of the Project.
(viii) Review, develop, and, if appropriate, modify and approve rules,
procedures, and protocols for the administration of the Project or
Prepay Documents, including rules, procedures, and protocols for
the scheduling, handling, tagging, dispatching and crediting of
Assigned Energy, and the handling and crediting of Environmental
Attributes associated with the Assigned Energy under the Clean
Energy Purchase Contracts.
(ix) Review, modify, or approve recommendations of the Project
Manager made pursuant to this Agreement.
(x) Review, examine, modify, and where appropriate, recommend or
approve the implementation of methods for addressing curtailments
or other interruptions involving Assigned Energy.
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(xi) Perform such other functions and duties as may be provided for
under this Agreement or any Prepay Document, or as may otherwise
be appropriate or beneficial to the Project or the Project Participants.
3.7 Management Decisions and the Role of the Board of Directors. The rights
and obligations of SCPPA under the Prepay Documents to which it is a party
shall be subject to the ultimate control at all times of the Board of Directors.
The Project Participants shall be entitled to participate in the decisions of
Project, as described herein. SCPPA, through the Board of Directors, shall
have, in addition to the duties and responsibilities set forth elsewhere in this
Agreement, the following duties and responsibilities, among others:
(i) Future Matters Liaison. The Board of Directors shall provide
liaison between the Project Participants at the management level
with respect to the administration of the Project and other future
matters arising out of the Prepay Documents.
(ii) Dispute Resolution. The Board of Directors shall endeavor to
review, discuss and attempt to resolve any disputes among SCPPA,
any of the Project Participants and the counterparties under the
Prepay Documents relating to the Project, the operation and
management of the Project and SCPPA rights and interests in the
Project.
(iii) Prepay Documents. The Board of Directors shall have the authority
to review modify and approve, as appropriate, all amendments,
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300506100.4
modifications and supplements to the Prepay Documents to which
SCPPA is a party.
(iv) Bond Remarketing. The Board of Directors shall have authority to
approve any and all of the following: (1) each issuance and
remarketing of Bonds, and the terms thereof, (2) each supplement or
amendment to the Bond Indenture, (3) the costs related to the
exercise or enforcement by SCPPA of its rights with respect to any
agreements relating to or affecting the Project, (4) the selection of
underwriters and remarketing agents for the Bonds, and (5) any
other action necessary or appropriate to carry forth its duties this
Agreement.
(v) Committees. The Board of Directors shall exercise such review,
direction or oversight as may be appropriate with respect to the
Project Coordinating Committee and any other committees
established pursuant to this Agreement.
(vi) Budgeting. The Board of Directors shall review, modify and
approve each Annual Budget and the revisions thereto in accordance
with Section 5.1(vii) of this Agreement.
(vii) Federal Tax Law Requirements. With respect to any Bonds, the
Board of Directors, in consultation with Bond Counsel or Special
Tax Counsel, shall develop and promulgate rules, procedures, and
protocols, including the development and maintenance of relevant
information and reporting procedures, and shall provide direction to
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the Project Coordinating Committee with respect to the Federal Tax
Law Requirements.
(viii) Supervening Authority of the Board of Directors. The Board of
Directors is reposed with complete and plenary supervening power
and authority to act upon any matter which is capable of being acted
upon by the Project Coordinating Committee or which is specified
as being within the authority of the Project Coordinating Committee
pursuant to the provisions of this Agreement.
(ix) Other Matters. The Board of Directors is authorized to perform
such other functions and duties, including oversight of those matters
and responsibilities addressed by the Project Coordinating
Committee, as may be provided for under this Agreement and under
the Prepay Documents, or as may otherwise be appropriate.
3.8 Periodic Audits. The Board of Directors or the Project Coordinating
Committee may arrange for the annual audit under Section 5.1(viii) of this
Agreement by certified accountants, selected by SCPPA and experienced in
electric generation or electric utility accounting, of the books and
accounting records of SCPPA, and where deemed appropriate the Project
Manager (if other than SCPPA), and any cost reimbursable consultant or
cost reimbursable contractor relevant to the administration or operation of
the Project, and such audit shall be completed and submitted to SCPPA as
soon as reasonably practicable after the close of the Fiscal Year. SCPPA
shall promptly furnish to the Project Participants copies of all audits. No
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300506100.4
more frequently than once every calendar year, a Project Participant may,
at its sole cost and expense, audit or cause to be audited the books and cost
records of SCPPA, the Project Manager (if other than SCPPA), and any cost
reimbursable consultant or cost reimbursable contractor relevant to the
administration or operation of the Project.
3.9 Additional Subcommittees. The Project Coordinating Committee may
establish as needed subcommittees including, but not limited to, auditing,
legal, financial, operating, insurance, governmental relations,
environmental and public information subcommittees. The authority,
membership, and duties of any subcommittee shall be established by the
Project Coordinating Committee; provided, however, such authority,
membership or duties shall not conflict with the provisions of
this Agreement or any Prepay Document. Each such subcommittee shall be
initially responsible to the Project Coordinating Committee.
3.10 Change in Committee Representative. Each Project Participant shall
promptly give written notice concurrently to the other Project Participants
and SCPPA of any changes in the designation of its Committee
Representative on the Project Coordinating Committee or any
subcommittee, and SCPPA shall promptly give written notice concurrently
to each Project Participants of any changes in the designation of its
representative on the Project Coordinating Committee or any
subcommittee.
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3.11 Costs of Consultants. Costs (or the applicable portion thereof) of
consultants and others employed or appointed by the Project Coordinating
Committee to perform the duties required hereunder, to the extent the
Project Coordinating Committee is authorized to so employ or appoint, shall
be included in the Project Costs, as appropriate, and shall be billed to
SCPPA or the Project Manager (if other than SCPPA).
3.12 . Any expenses incurred by any representative
of any Project Participant or group of Project Participants serving on the
Project Coordinating Committee or any other committee in connection with
his/her duties on such committee shall be the responsibility of the Project
Participant which he/she represents and shall not be an expense payable
under this Agreement.
3.13 Inaction by Committee. It is recognized by the Parties that if the Project
Coordinating Committee is unable or fails to agree with respect to any
matter or dispute which it is authorized to determine, resolve, approve,
disapprove or otherwise act upon after a reasonable opportunity to do so, or
within the time specified herein or in any applicable Prepay Document, then
SCPPA may take such action as in its discretion is necessary for its timely
performance under any Prepay Document to which it is a party pending the
resolution of any such inability or failure to agree, but nothing herein shall
be construed to allow SCPPA to act in violation of the express terms of any
Prepay Document to which it is a party.
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3.14 Compliance with Bond Indenture. It is recognized by the Parties that the
operation and administration of the Project must comply in all respects with
requirements of the Bond Indenture and it is therefore agreed that,
notwithstanding any provision of this Agreement, no action by the Project
Coordinating Committee or the Project Manager (if a designee other than
SCPPA) shall require SCPPA to act in any manner inconsistent with any
such requirements or to refrain from acting as required by this Agreement
and the Prepay Documents to which it is a party and if the Project Manager
(if a designee other than SCPPA) shall fail to make recommendations or act
with respect to any matter in connection with an action that is required to
be taken pursuant to any of the foregoing, SCPPA shall take such action as
is appropriate to assure compliance with the foregoing.
3.15 Delegation. To secure the effective cooperation and interchange of
information in a timely manner in connection with various administrative,
technical and other matters which may arise from time to time in connection
with administration of the Project, in appropriate cases, duties and
responsibilities of the Board of Directors or the Project Coordinating
Committee, as the case may be under this Section 3, may be delegated to
Project Participants.
3.16 Instructions to SCPPA Director on Board of Prepay LLC. The Project
Coordinating Committee, subject to the plenary power of the Board of
Directors pursuant to Section 3.7 hereof, when required under the Prepay
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Documents, shall instruct the SCPPA Director to take any action or not to
take any action as a director of the governing board of Prepay LLC.
4. DUTIES OF PROJECT MANAGER
4.1 SCPPA initially shall serve as Project Manager to administer the Project,
and shall have the power from time to time to cause the Project to be
administered through a project management or agency agreement with an
agent on behalf of the Project Participants serving as Project Manager, and
in such capacity the Project Manager shall, unless otherwise provided in a
project management agreement or agency agreement with an agent serving
as Project Manager, undertake the following:
(i) Providing administrative services relating to the rights or obligations
of the Project Participants under their respective Clean Energy
Purchase Contracts, the PPA Custodial Agreements or the Bond
Indenture.
(ii) Making available to the Project Coordinating Committee all
consultants and advisors, including financial advisors, municipal
advisors and legal counsel, including Bond Counsel and Special Tax
Counsel, that are retained to provide advice and assistance with
respect to Project matters, and such consultants, advisors and
counsel shall be authorized to consult with and advise the Project
Coordinating Committee on Project matters.
(iii) Contracting and coordinating with a firm of certified public
accountants to provide auditing and accounting services in
connection with annual audits and financial reporting for the Project,
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with such audits to be completed and submitted to SCPPA as soon
as reasonably practicable after the close of the Fiscal Year.
(iv) Contracting and coordinating with qualified firms to provide
accounting and related services to Project Participants with respect
to Renewable Energy Credits associated with the Project.
(v) Allocation of any annual refund received by SCPPA to Project
Participants pursuant to Section 5.12(b) of the Bond Indenture and
Section 3.3 of each Clean Energy Purchase Contract.
(vi) Coordinating with Project Participants to facilitate the remediation
of any Ledger Entries that may occur.
(vii) Coordinating with Project Participants to assist with the replacement
and substitution of Power Purchase Agreements assigned in
accordance with the Prepay Documents.
(vii) Keeping, or causing to be kept, accurate records and accounts of the operations relating to
the Project, in a manner similar to accepted accounting methodologies associated with similar
projects.
5. RESPONSIBILITIES OF SCPPA; ANNUAL BUDGET
5.1 SCPPA shall have and carry out the following duties and responsibilities
under this Agreement:
(i) Actions under Prepay Documents. Except as provided otherwise
under this Agreement, SCPPA shall, in accordance with the
reasonable determination by SCPPA as to compliance with its
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obligations under the Prepay Documents, take (or not take) such
actions as are reposed in SCPPA pursuant to the Prepay Documents
to which it is a party.
(ii) Preserve Interests of Project Participants. To the extent permitted
by the Prepay Documents to which it is a party, or otherwise
determined by the Project Coordinating Committee or Board of
Directors, SCPPA will endeavor to take such actions or implement
such measures as may be necessary or desirable for the utilization,
maintenance or preservation of the rights and interests of the Project
Participants in the Project including, if appropriate, such
enforcement actions or other measures as the Project Coordinating
Committee or Board of Directors deems to be in the Project
.
(iii) Other Services. To the extent such services are available and can be
carried forth in accordance with Prepay Documents to which it is a
party, SCPPA shall also provide such other services, as approved by
the Project Coordinating Committee or Board of Directors, as may
be deemed necessary to secure the benefits and/or satisfy the
obligations associated with the Prepay Documents, or otherwise
pertaining to the matters to be considered by the Project
Coordinating Committee.
(iv) Provide Information. SCPPA shall promptly provide the Project
Coordinating Committee and each of the Committee
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Representatives and their designated alternates with any information
that may materially affect or which shall have materially affected
the matters referred to in Section 4 or in this Section 6 of this
Agreement, and shall provide the Project Participants with copies of
material notices, reports and other materials received by SCPPA
from Prepay LLC or J. Aron pursuant to any Prepay Document.
SCPPA shall provide to any Project Participants copies of all such
notices, reports and other materials upon reasonable request of such
Project Participant.
(v) Services to Project Coordinating Committee. SCPPA shall arrange
for and provide to the Project Coordinating Committee any available
services as requested by the Project Coordinating Committee in
connection with its consideration of any of the matters referred to in
Section 4 of this Agreement.
(vi) SCPPA May Use Own Employees or Contract for Services. SCPPA,
in performing its activities under this Agreement and the Prepay
Documents to which it is a party may use its own employees and
facilities or arrange and reasonably contract for the performance
thereof by other entities.
(vii) Annual Budget. SCPPA will prepare and submit to the Project
Coordinating Committee a proposed Annual Budget at least 60 days
prior to the beginning of each Fiscal Year. In connection with the
preparation of the Annual Budget, the Project Participants may then
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submit to SCPPA, at any time until the Annual Budget is adopted,
any matters or suggestions relating to the Annual Budget. SCPPA
shall adopt the Annual Budget not less than 30 nor more than 60
days prior to the beginning of such Fiscal Year and shall cause
copies of such adopted Annual Budget to be delivered to each
Project Participant; provided, however, the Annual Budget for the
first Fiscal Year shall be prepared, considered, adopted, and
delivered in the most practicable manner available following initial
issuance of the Bonds. As required from time to time during any
Fiscal Year after seven days written notice to each Project
Participant, SCPPA may, pursuant to the foregoing provisions for
adopting the Annual Budget, adopt an amended Annual Budget for
and applicable to such Fiscal Year for the remainder of such Fiscal
Year. The Annual Budget shall establish the basis for monthly
Billing Statements to be sent to the Project Participants, as provided
in Section 6.1 hereof. Any adjustment, and any other or further
mechanism for adjustment, as may be required to address the
variability of costs of operation of the Project at any time during the
Fiscal Year or the variability of or addition to any other Annual
Budget component, may be incorporated into the Annual Budget as
provided above, or any amendment to an Annual Budget at any time
during any Fiscal
Participant as set forth in this paragraph (vii).
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(viii)Annual Audit. All transactions of SCPPA relating to the Project with
respect to each Fiscal Year shall be subject to an annual audit, in
accordance with Section 5.1(iii). SCPPA shall promptly furnish to
the Project Participants copies of all audits. Each Project Participant
shall have the right, no more frequently than once each calendar
year, at its sole cost and expense to examine and copy the records
and accounts referred to above on reasonable notice during regular
business hours.
5.2 Notwithstanding anything herein to the contrary, the rights and obligations
of SCPPA hereunder and under the Prepay Documents to which it is a party
shall to subject to the ultimate control at all times of the Board of Directors.
The Project Participants shall be entitled to participate in the decisions of
the Board of Directors
Project, as described herein.
6. PROJECT PARTICIPANT OBLIGATIONS; PAYMENT OF COSTS
6.1 Billing Statements. Each calendar month, by the fifth day of such month,
SCPPA shall submit to each Project Participant a Billing Statement for
payment by such Project Participant of its proportionate share, based on its
Percentage of Aggregate Assigned Energy, of Project Costs for the current
month, consisting of one-twelfth of the Project Costs set forth in the Annual
Budget, plus any costs under Section 6.6. hereof Each Project Participant
shall pay or cause to be paid the amount of such Billing Statement within
20 days of receipt thereof. If a Project Participant fails to pay any such
Billing Statement when due, interest shall accrue, to the extent permitted by
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law, at a rate equal to the Default Rate as defined in the applicable Clean
Energy Purchase Contract until payment is made.
6.2 Adoption of Alternative Billing Statement Procedures. The Project
Coordinating Committee may recommend the adoption of an alternative
Billing Statement billing methodology in connection with each Project
. Such alternative Billing Statement
procedures may be placed into effect with the approval of the same by
resolution of the Board of Directors. Any such alternative Billing Statement
billing methodology shall satisfy all requirements of the Bond Indenture and
shall be fiscally prudent, financially sound and shall assure coverage of all
potential and actual costs and obligations of SCPPA.
6.3 Disputed Monthly Billing Statement. In case any portion of any Billing
Statement received by a Project Participant from SCPPA is in bona fide
dispute, such Project Participant shall pay the full amount of such Billing
Statement, and, upon determination of the correct amount, the difference
between such correct amount and such full amount, if any, including interest
at the rate received by SCPPA on any overpayment, will be credited to such
Project Participant by SCPPA after such determination; provided, however,
that such interest shall not accrue on any overpayment that is acknowledged
by SCPPA and returned to such Project Participant by the fifth calendar day
following the receipt by SCPPA of the disputed overpayment. In the event
such Billing Statement is in dispute, SCPPA will give consideration to such
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position relative thereto within 30 days following receipt of written
notification by such Project Participant of such dispute.
6.4 Reconciliation of Monthly Costs. As soon as practicable after the end of
each Fiscal Year, SCPPA will submit to the Project Participants a detailed
statement of the actual aggregate Project Costs and other amounts payable
hereunder, including any credits thereto, for all of the months of such Fiscal
Year, and the adjustments of the aggregate Project Costs and other amounts
payable hereunder, if any, for any prior Fiscal Year, based on the annual
audit of accounts provided for in Section 5.1(viii). If, on the basis of the
statement submitted as provided in this Section 6.4, the actual aggregate
Project Costs and other amounts payable by any Project Participant for any
Fiscal Year exceed the amount thereof which such Project Participant has
been billed, such Project Participant shall pay SCPPA, within 20 days of
requesting payment of such incremental
amount, the amount to which SCPPA is entitled. If, on the basis of the
statement submitted pursuant to this Section 6.4, the actual aggregate
Project Costs or other amounts payable by any Project Participant for any
Fiscal Year are less than the amount for which such Project Participant has
been billed, SCPPA shall, unless otherwise directed by such Project
Participant with respect to moneys owed to it, credit such excess against
such next monthly Billing Statement.
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6.5 Other or Additional Cost Reconciliation Mechanisms. The Board of
Directors may, by resolution, authorize or prescribe other billing, payment,
costing and cost reconciliation mechanisms to address such billing,
payment, costing and cost reconciliation issues as may from time to time
arise with respect to the Project.
6.6 Costs Incurred for Sole Benefit of Specific Project Participant.
Notwithstanding anything to the contrary in this Agreement, if a particular
cost or expense is incurred by SCPPA for the sole benefit of a specific
Project Participant, unless otherwise determined by the Project
Coordinating Committee, then such cost or expense shall be allocated and
billed only to such Project Participant, in which event only such Project
Participant (and no other Project Participant) shall be responsible for the
payment thereof under this Agreement within 20 days of receipt of a Billing
Statement therefor.
6.7 Unconditional Payment Obligation. Each Project Participant hereby agrees
to pay each Billing Statement it receives on a timely basis, whether or not
this Agreement has been terminated, or the Project is functioning,
producing, operating or operable or its output are suspended, interrupted,
interfered with, reduced or curtailed or terminated in whole or in part, and
such payments shall not be subject to reduction whether by offset or
otherwise and shall not be conditional upon the performance or
nonperformance by any party of any agreement for any cause whatsoever.
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6.8 Source of Payments. Each Project Participant hereby represents and
warrants that the obligations of such Project Participant to make payments
to SCPPA under this Agreement shall constitute a cost of purchased power
and an operating expense of such Project Participant payable solely from its
power revenue fund, including any and all legally available power system
reserves. Each Project Participant will annually in each and every fiscal year
of such Project Participant during the term of this Agreement include in its
power system budget, whether or not any other items are included, an
appropriation from the revenues of its power system (including moneys
derived from sales to third parties) sufficient to satisfy all the payments
required to be made in such year under this Agreement until all payments
required under this Agreement have been paid in full.
6.9 Rate Covenant. Each Project Participant hereby covenants and agrees that
it shall establish, maintain and collect rates and charges for the electric
service of its power system each year so as to provide revenues sufficient,
together with any legally available power system reserves, to enable such
Project Participant to pay SCPPA all amounts payable when due under this
Agreement and to pay all other amounts payable from, and all lawful
charges against or liens on, the revenues of its power system.
6.10 Authorizations. Each Project Participant hereby represents and warrants
that no order, approval, consent or authorization of any governmental or
public agency, authority or person, is required on the part of such Project
Participant for the execution and delivery by such Project Participant of this
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Agreement or any Prepay Document to which it is a party, or the
performance by such Project Participant of its obligations under this
Agreement or any Prepay Document to which it is a party, except for such
as have been obtained.
6.11 Conflicts. Each Project Participant hereby represents and warrants to
SCPPA, as of the date of any opinion of counsel referenced in Section 6.15,
this Agreement and each Prepay Document to which it is a party, and its
performance hereunder and thereunder will not constitute a default under
any agreement or instrument to which it is a party, or any order, judgment,
decree or ruling of any court that is binding on it, or a violation of any
applicable law of any governmental authority, which default or violation
would have a material adverse effect on the financial condition of such
Project Participant .
6.12 Litigation. Each Project Participant hereby represents and warrants to
SCPPA, as of the date of any opinion of counsel referenced in Section 6.15,
no actions, suits or proceedings pending against it (service of process on it
having been made) in any court that questions the validity of the
authorization, execution or delivery by such Project Participant of this
Agreement or any Prepay Document to which it is a party, or the
enforceability on such Project Participant of this Agreement or any Prepay
Document to which it is a party.
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6.13
6.14 Federal Tax Law Requirements. Notwithstanding anything to the contrary
in this Agreement, each Project Participant shall take all actions necessary
to comply in all respects with the Federal Tax Law Requirements with
respect to the Bonds and shall refrain from taking any action that would
result in or cause non-compliance with the Federal Tax Law Requirements
with respect to the Bonds At such times and through such means as
prescribed by the rules, procedures and protocols promulgated by SCPPA
to address compliance with the Federal Tax Law Requirements with respect
to the Bonds, or pursuant to any request by SCPPA, each Project Purchaser
hereby agrees to provide SCPPA with a tax certificate relating to the Bonds,
and such additional information and representations as necessary to
establish its compliance with the Federal Tax Law Requirements. Each
Project Purchaser agrees to execute new or revised tax certificates or
provide such information or other assurance respecting past and future
compliance with the Federal Tax Law Requirements as may be reasonably
requested by SCPPA. In connection therewith, each Project Participant
hereby agrees to cooperate with and provide to SCPPA such other
information, representations and certifications necessary for Bond Counsel
or Special Tax Counsel to render an opinion or advise to the effect that any
applicable Federal Tax Law Requirements are met. SCPPA shall develop
and promulgate such reasonable rules, procedures and protocols, together
with amendments thereto, as necessary, in consultation with Bond Counsel
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or Special Tax Counsel, to ensure compliance with any applicable Federal
Tax Law Requirements.
6.15 Information to SCPPA. Each Project Participant hereby agrees to supply
SCPPA, upon request, with such information, documentation and
certifications as SCPPA shall reasonably determine to be necessary or
desirable for the operation and administration of the Project, including
information reasonably available to allow SCPPA to respond to request for
such information from any federal, state or local regulatory body or other
authority, and including information required to be timely provided under
the related Continuing Disclosure Undertaking (as defined in the Bond
Indenture).
6.16 Legal Opinions. In connection with the issuance of the Bonds and
subsequent remarketings thereof, each Project Participant shall provide an
opinion of an attorney or firm of attorneys, or the equivalent thereof, in
substantially the form attached to the Bond Purchase Agreement relating to
the Bonds or as otherwise reasonably requested by SCPPA, as may be
reasonably necessary to facilitate the issuance or remarketing, as the case
may be, of the Bonds.
7. LIABILITY
7.1 No Liability of SCPPA or Project Participants, their Directors, Officers,
Etc.; SCPPA,
Officers, Employees Not Individually Liable. The Parties hereto agree that
none of SCPPA, the Project Participants, the Project Manager or any of their
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past, present or future directors, officers, employees, board members,
Released Parties
liable to any other of the Released Parties for any and all claims, demands,
liabilities, obligations, losses, damages (whether direct, indirect or
consequential), penalties, actions, loss of profits, judgments, orders, suits,
costs, expenses (
of any kind or nature whatsoever in law, equity, or otherwise (including,
without limitation, death, bodily injury, or personal injury to any person or
damage or destruction to any property of any Project Participant, SCPPA,
the Project Manager or third persons) suffered by any Released Party as a
result of the action or inaction or performance or non-performance by the
counterparties under the Prepay Documents or any of the Released Parties
under this Agreement or any of the Prepay Documents (excluding gross
negligence and willful misconduct, which, unless otherwise agreed to by
the Parties, are both to be determined and established by a court of
competent jurisdiction in a final, non-appealable order). Each Party shall
release each of the other Released Parties from any claim or liability that
such Party may have cause to assert as a result of any actions or inactions
or performance or non-performance by any of the other Released Parties
under this Agreement or any Prepay Document (excluding gross negligence
and willful misconduct, which, unless otherwise agreed to by the Parties,
are both to be determined and established by a court of competent
jurisdiction in a final, non-appealable order). Notwithstanding the
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foregoing, no such action or inaction or performance or non-performance
by any of the Released Parties shall relieve SCPPA or any Project
Participant from their respective obligations under this Agreement,
including, without limitation, obligation to make
payments required under Section 6.6 of this Agreement or under any Prepay
Document Section 7.5 of this Agreement.
The provisions of this Section 7.2 shall not be construed so as to relieve the
Project Manager or Prepay Document counterparty from any obligation or
liability under this Agreement or any Prepay Document. It is also hereby
recognized and agreed that no member of the Board of Directors, the Project
Manager or any Project Participant, nor their officers, employees, board
members, agents, attorneys or advisors, or member of SCPPA in its capacity
as a member of SCPPA, shall be individually liable in respect of any
undertakings by any of the Released Parties under this Agreement or any
Prepay Document. Nothing in this Section 7.2 or in any other provision of
this Agreement shall affect any Project Participant
payment in accordance with Section 6 or any other provision of this
Agreement or to pay any other amounts or costs required to be paid by it
under this Agreement.
7.2 Suits for Specific Performance. The exculpation provisions set forth in
Section 7.2 hereof shall apply to all types of claims and actions including,
but not limited to, claims or actions based on contract or tort.
Notwithstanding the foregoing, any Party may protect and enforce its rights
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under this Agreement by a suit or suits in equity for specific performance
of, or declaratory action with respect to, any obligations or duty of any other
Party, and each Party shall at all times retain the right to recover, by
appropriate legal proceedings, any amount determined to have been an
overpayment, underpayment or other monetary damages owed by any other
Party in accordance with the terms of this Agreement.
7.3 Undertakings Not Indebtedness. The undertakings under this Agreement
by SCPPA, or the Project Manager in its capacity as such, shall never
constitute a debt or indebtedness of SCPPA or the Project Manager within
the meaning of any provision or limitation of the Constitution or statutes of
the State of California, and shall not constitute or give rise to a charge
against its general credit.
7.4 Indemnification of Project Participants. SCPPA undertakes and agrees, to
the extent permitted by law, to indemnify and hold harmless each Project
Participant, its directors, board members, officers, employees, agents,
articipant
obligations, losses, damages (whether direct, indirect or consequential),
penalties, actions, loss of profits, judgments, orders, suits, costs, expenses
which Losses include, without limitation, death, bodily injury, or personal
injury to any person or damage or destruction to any property of any Project
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Participant, SCPPA or third persons, that may be imposed on, incurred by
or asserted against a Project Participant arising by manner of any breach of
this Agreement by SCPPA, or the negligent acts, errors, omissions, or
willful misconduct incident to the performance of this Agreement on the
employees, agents, and advisors, past, present, or future. At each Project
option, SCPPA shall defend Participant Indemnitees from and
against any and all Losses. If SCPPA, with the relevant Project
Participant such Project
Participant and its City Attorney shall approve the selection of counsel, and
such Project Participant shall further approve any settlement or disposition,
such approval not to be unreasonably withheld. Nothing in this Section 7.5
or in any other provision of this Agreement shall affect any Project
Participant 6
hereof or to pay any other amounts or costs required to be paid by it under
this Agreement.
7.6 Indemnification of Project Manager. The Parties acknowledge that SCPPA may
from time to time cause the Project to be administered through a project
management or agency agreement with an agent on behalf of the Project
Participants as provided in Section 4.1 hereof, and that such project management
or agency agreement may obligation SCPPA to indemnify, defend, and hold
harmless such Project Manager or agent and its officers, employees, agents, and
advisors (Project Manager Indemnitees ) in connection with one or more Project
actions, inactions, errors, or omissions incident to the
performance of such agency agreement or project management agreement. It is
further acknowledged by the Parties that all payments, costs, and expenses of
SCPPA with respect to compliance with such indemnification obligations under
such project management agreement or agency agreement shall be payable as
Power Costs by the Project Participants in accordance with the terms of this
Agreement.
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8. RELATIONSHIP OF THE PARTIES
8.1 Obligations Several and Not Joint. The covenants, obligations and
liabilities of the Parties are intended to be several and not joint or collective
and nothing herein contained shall ever be construed to create an
association, joint venture, trust, partnership or other legal entity, or to
impose a trust or partnership covenant, obligation or liability on or with
regard to any of the Parties. Each Party shall be individually responsible for
its own covenants, obligations and liabilities under this Agreement. The
Project Participants shall be severally responsible and liable for
performance under their respective Clean Energy Purchase Contracts. The
obligation of any Project Participant to make payments under this
Agreement is a several obligation and not a joint obligation with those of
the other Project Participants under the Clean Energy Purchase Contracts to
which each of the other Project Participants is a party.
8.2 No Third-Party Beneficiaries. This Agreement is solely for the benefit of
the Parties hereto. There are no third-party beneficiaries of this Agreement.
9. DISPUTES
9.1 Dispute or Claim. Any action, claim or dispute which any Party may have
against another Party or Parties arising out of or relating to this Agreement
or the transactions contemplated hereunder, or the breach, termination or
validity thereof (a
Parties. The written submission of any Dispute shall include a concise
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300506100.4
statement of the question or issue in dispute together with a statement listing
the relevant facts and documentation that support the claim.
9.2 Good Faith Resolution. The Parties agree to cooperate in good faith to
attempt to achieve an expeditious resolution of a Dispute. Pending
resolution of a Dispute, unless otherwise provided for under this
Agreement, the Parties shall proceed diligently with the performance of
their respective obligations pursuant to the terms of this Agreement.
9.3 Informal Negotiation. The disputing Parties shall first attempt in good faith
to resolve any Dispute through informal negotiations which may be
coordinated by the Chairperson
9.4 Arbitration. In the event the disputing Parties are unable to resolve the
Dispute through informal negotiations as described above, the disputing
Parties may elect to pursue the mediation of the Dispute by a mutually
agreeable mediator. If the disputing Parties so choose the Parties may elect
to voluntarily pursue arbitration pursuant to the rules of the Judicial
Arbitration and Mediation Service (JAMS) or American Arbitration
Association (AAA), or any other method chosen by the disputing Parties,
subject to the express prior written agreement of each of the disputing
Parties. Such written agreement may include the guidelines agreed upon by
the disputing Parties to be followed by such Parties in such arbitration or
dispute resolution prior to the commencement of such arbitration. No Party
shall be obligated to pursue arbitration over any other method of dispute
resolution.
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9.5 Litigation Rights. In the event the disputing Parties are unable to
satisfactorily resolve the Dispute within 30 days from the receipt of notice
of the Dispute, subject to any extensions of time as may be mutually agreed
upon in writing, or any arbitration or other agreement, any Party to the
Dispute may initiate litigation in a court of law with jurisdiction located in
Los Angeles County, California, which shall be the exclusive venue to
litigate Disputes.
9.6 No Attorneys Fees. In the event any action is brought at law or in equity in
any court or through any alternative dispute resolution process to enforce
any provision of this Agreement, or for damages by reason of any alleged
breach of this Agreement, the Parties mutually agree that each Party to this
Agreement shall bear its own attorneys fees and costs.
10. GOVERNING LAW
This Agreement was made and entered into in the State of California and shall be governed
by, interpreted and enforced in accordance with the laws of the State of California, without regard
to conflict of law principles.
11. REPRESENTATION AND NOTICES
11.1 Each Party Represented by Counsel. The Parties acknowledge that each
Party was represented by counsel in the negotiation and execution of this
Agreement, and any uncertainty or ambiguity in this Agreement shall not
be interpreted against a Party on the basis that the Party drafted the
language, but shall be interpreted according to the application of the rules
on interpretation of contracts.
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11.2 Notices. Any notice, demand, requisition or request shall be in writing and
shall be deemed properly served, given or made if delivered in person or
sent by overnight delivery service, by registered or certified mail, postage
prepaid, or by electronic mail, to the persons specified below:
Southern California Public Power Authority
1160 Nicole Court
Glendora, CA 91740
Attention: Executive Director
Telephone: (626) 793-9364
Email: ExecutiveDirector@scppa.org
City of Burbank
____________________________
____________________________
Attention: ___________________
Telephone: __________________
Email: ______________________
City of Colton
____________________________
____________________________
Attention: ___________________
Telephone: __________________
Email: ______________________
City of Pasadena
____________________________
____________________________
Attention: ___________________
Telephone: __________________
Email: ______________________
City of Vernon
____________________________
____________________________
Attention: ___________________
Telephone: __________________
Email: ______________________
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12. SEVERABILITY.
In case any one or more of the provisions of this Agreement shall for any reason be held to
be illegal or invalid by a court of competent jurisdiction, it is the intention of each of the Parties
hereto that such illegality or invalidity shall not affect any other provision hereof, but this
Agreement shall be construed and enforced as if such illegal or invalid provision had not been
contained herein unless a court holds that the provisions are not separable from all other provisions
of this Agreement.
13. AMENDMENTS
The Parties acknowledge and agree that any amendment to this Agreement shall be in
writing and duly executed by the Parties.
[Signatures on next page.]
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IN WITNESS WHEREOF, the Parties hereto have duly caused this Agreement to be
executed on their behalf by their duly authorized representatives.
SOUTHERN CALIFORNIA PUBLIC
POWER AUTHORITY
Dated: ____________________ By:
Title:
CITY OF BURBANK
Dated: ____________________ By:
Title:
CITY OF COLTON
Dated: ____________________ By:
Title:
CITY OF PASADENA
Dated: ____________________ By:
Title:
CITY OF VERNON
Dated: ____________________ By:
Title:
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Appendix A
Percentages of Aggregate Assigned Energy
Resolution No. 2026-006
Page 209 of 216
____________________
SM Draft 11 December 2025
1
[_______], 2026
[PARTICIPANT]
[____]
[____]
confirms our mutual agreement with
respect to the matters set forth below and relates
which definition shall include any new Assignment Agreements identified by
delivery of an updated Exhibit A consistent with Section 2 , with each of the PPA Sellers
identified in Exhibit A PPA Seller PPA Sellers
which definitions shall include any new PPA Seller identified by delivery of an updated
Exhibit A consistent with Section 2).
1.
(a)
the suspension of performance under or expiration or termination of the relevant
PPA by either or the applicable PPA Seller; (ii) of the termination or suspension of
deliveries for any reason other than force majeure under (A) the
(including, for the avoidance of doub
under the Clean Energy Purchase Contract or the reduction of the aggregate Base Quantity and
Assigned Quantity under a Clean Energy Purchase Contract to zero pursuant to the terms thereof),
(B) that certain Electricity Purchase, Sale and Service Agreement, dated as of by
and between J. Aron & Company LLC and Aron Energy Prepay 51 Electricity Sale and
Service Agreement , (C) that certain Master Power Supply Agreement, dated as of
, by and between SCPPA and Aron Energy Prepay 51 LLC or (D) an Issuer Assigned PPA
PSA relating to the relevant Assigned PPA; (iii) that the California Renewable Portfolio Standard
Portfolio Content Category designation of the renewable energy assigned under the Assignment
1 NTD: To streamline negotiations, we have created a generic form for review and comment by the working
group. Once agreed upon, we will replicate this for each Project Participant.
Resolution No. 2026-006
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2
Agreements is altered, reclassified, or invalidated as a direct or indirect result of the transaction
contemplated by the Assignment Agreements or the Clean Energy Purchase Contract; (iv) that the
relevant Assignment Agreement is subject to termination due to the bankruptcy or insolvency of
the PPA Seller, however defined therein; or (v)
(b) SCPPA
(c) Either Party may deliver a notice of termination of an Assignment Agreement to
the extent that the Parties have mutually agreed upon an assignment of Replacement Assigned
Rights and Obligations (as defined in the Clean Energy Purchase Contract) that will replace the
Assigned Rights and Obligations under such Assignment Agreement immediately following the
termination thereof; provided that such notice is conditioned on the execution and delivery of such
Assignment Agreement.
For the avoidance of doubt, each of the Parties agrees that it shall not terminate an Assignment
Agreement pursuant to the at will termination provision thereof except in the circumstances set
forth immediately above. The at will termination provision referenced in the immediately
preceding sentence (x) is set forth in [Section 2(a)(1)] of the form of Purchaser Assignment
Agreement attached to the Clean Energy Purchase Contract and (y) shall refer to any such
provision set forth in an Assignment Agreement entered into by the Parties consistent with the
terms of the Clean Energy Purchase Contract and the Electricity Sale and Service Agreement.
2. Exhibit A. Promptly following execution of the Assignment Agreements with
respect to the Initial Assigned Rights and Obligations, SCPPA shall deliver an Exhibit A that lists
such Assignment Agreements. SCPPA shall deliver an updated Exhibit A to this Agreement to
reflect any changes to the information set forth therein in connection with the termination,
expiration or replacement of an Assignment Agreement consistent with the terms of the Clean
Energy Purchase Contract.
3. Representations, Warranties and Covenants.
(a) agrees that it shall provide a true, complete, and correct copy to SCPPA
of any PPA to be assigned pursuant to an Assignment Agreement.
(b) Each Party represents to the other:
(i) Status. It is duly organized and validly existing under the laws of the jurisdiction
of its organization or incorporation and, if relevant under such laws, in good
standing.
(ii) Powers. It has the power to execute, deliver and perform its obligations under this
Letter Agreement, the Assignment Agreements and any other documentation to
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3
which it is a party relating to this Letter Agreement and any Assignment
Agreement, and it has taken all necessary action to authorize such execution,
delivery and performance.
(iii)No Violation or Conflict. Such execution, delivery and performance of this Letter
Agreement and the Assignment Agreements and the consummation of the
transactions contemplated hereby and thereby, including the incurrence by such
Party of its obligations under this Letter Agreement and the Assignment
Agreements, will not result in any violation of or conflict with: (i) any term of any
material contract or agreement applicable to it; (ii) any of its charter, bylaws, or
other constitutional documents; (iii) any determination or award of any arbitrator
applicable to it; or (iv) any license, permit, franchise, judgment, writ, injunction or
regulation, decree, order, charter, law, ordinance, rule or regulation of any
government agency, applicable to it or any of its assets or properties or to any
obligations incurred by it or by which it or any of its assets or properties or
obligations are bound or affected, and shall not cause a breach of, or default under,
any such term or result in the creation of any lien upon any of its properties or
assets.
(iv) Consents. All consents, approvals, orders or authorizations of; registrations,
declarations, filings or giving of notice to; obtaining of any licenses or permits
from; or taking of any other action with respect to, any Person or Government
Agency, that are required to have been obtained or made by such Party with respect
to this Letter Agreement and Assignment Agreements and the transactions
contemplated hereby and thereby, including the due authorization of such Party and
its governing body and any approval or consent of any security holder of such Party
or any holder (or any trustee for any holder) of any indebtedness or other obligation
of such Party, have been obtained and are in full force and effect and all conditions
of any such consents have been complied with.
(v)Obligations Binding. Its obligations under this Letter Agreement and the
Assignment Agreements constitute its legal, valid and binding obligations,
enforceable in accordance with their respective terms (subject to applicable
bankruptcy, reorganization, insolvency, moratorium or similar laws affecting
forceability, to equitable principles
of general application (regardless of whether enforcement is sought in a proceeding
in equity or at law)).
(vi) Non-Reliance. It is acting for its own account, and it has made its own independent
decisions to enter into this Letter Agreement and the Assignment Agreements and
as to whether this Letter Agreement and the Assignment Agreements are
appropriate or proper for it based upon its own judgment and upon advice from
such advisers as it has deemed necessary. It is not relying on any communication
(written or oral) of the other Parties as investment advice or as a recommendation
to enter into this Letter Agreement or the Assignment Agreements, it being
understood that information and explanations related to the terms and conditions of
Resolution No. 2026-006
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4
this Letter Agreement and the Assignment Agreements shall not be considered
investment advice or a recommendation to enter into this Letter Agreement. It is
entering into this Letter Agreement and the Assignment Agreements as a bona-fide,
-length transaction involving the mutual exchange of consideration and, once
executed by the applicable parties, considers this Letter Agreement and the
Assignment Agreements to be legally enforceable contracts. No communication
(written or oral) received from any of the other Parties shall be deemed to be an
assurance or guarantee as to the expected results of this Letter Agreement or the
Assignment Agreements.
(vii)Assessment and Understanding. It is capable of assessing the merits of and
understanding (on its own behalf or through independent professional advice), and
understands and accepts, the terms, conditions and risks of this Letter Agreement
and the Assignment Agreements. It is also capable of assuming, and assumes, the
risks of this Letter Agreement and the Assignment Agreements.
(viii)Status of Parties. Neither Party is acting as a fiduciary for or an adviser to
the other in respect of this Letter Agreement or the Assignment Agreements.
4.Miscellaneous
(a)Governing Law. This Letter Agreement and the rights and duties of the Parties
will be governed by and construed, enforced and performed in accordance with the laws of the
State of California, without reference to any conflicts of laws provisions that would direct the
(b)Jurisdiction. Each Party submits to the exclusive jurisdiction of the courts of the
State of California or of the United States of America, in either case located in Los Angeles
County, California.
(c)Waiver of Right to Trial by Jury. Each Party waives, to the fullest extent permitted
by applicable law, any right it may have to a trial by jury in respect of any suit, action or proceeding
relating to this Letter Agreement.
(d)Third Party Beneficiary. Any P
pursuant to an Issuer Assignment Agreement (as defined in the Clean Energy Purchase Contract)
shall be a third-party beneficiary of this Letter Agreement with right to enforce the terms hereof.
(e)Limited Obligation. Notwithstanding anything to the contrary herein, all
obligations of SCPPA under this Letter Agreement, including without limitation all obligations to
make payments of any kind whatsoever, are special, limited obligations of SCPPA, payable solely
from the Trust Estate (as such term is defined in the Trust Indenture, dated as of ,
between SCPPA and [_______], as trustee) as and to the extent provided in such Trust Indenture,
including with respect to Operating Expenses (as such term is defined in such Trust Indenture).
SCPPA shall not be required to advance any moneys derived from any source other than the
Revenues (as such term is defined in such Trust Indenture) and other assets pledged under such
Trust Indenture for any of the purposes in this Letter Agreement. Neither the faith and credit of
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SCPPA nor the taxing power of the State of California or any political subdivision thereof is
pledged to payments pursuant to this Letter Agreement. SCPPA shall not be directly, indirectly,
contingently or otherwise liable for any costs, expenses, losses, damages, claims or actions, of any
conceivable kind on any conceivable theory, under or by reasons of or in connection with this
Letter Agreement, except solely to the extent Revenues (as such term is defined in such Trust
Indenture) are received for the payment thereof and may be applied therefor pursuant to the terms
of such Trust Indenture.
Resolution No. 2026-006
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Signature Page to Letter Agreement
SCPPA
SOUTHERN CALIFORNIA PUBLIC POWER
AUTHORITY
By:
Name:
Title:
ACKNOWLEDGED, ACCEPTED AND AGREED TO as of the date first set forth
above:
PARTICIPANT
[PARTICIPANT]
By:
Name:
Title:
Resolution No. 2026-006
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Exhibit A
ASSIGNMENT AGREEMENTS
Purchaser Assignment Agreements Issuer Assignment Agreements
1. Limited Assignment Agreement dated
[____], by and among Purchaser, the Issuer
and [PPA Seller]
Assigned PPA: [____]
Assigned Product Price:
Assignment Period:
PPA Seller:
PPA Seller Payment Instructions:
1. Limited Assignment Agreement dated
[____], by and among J. Aron, the Issuer
and [PPA Seller]
2. Limited Assignment Agreement dated
[____], by and among Purchaser, the Issuer
and [PPA Seller]
Assigned PPA: [____]
Assigned Product Price:
Assignment Period:
PPA Seller:
PPA Seller Payment Instructions:
2. Limited Assignment Agreement dated
[____], by and among J. Aron, the Issuer
and [PPA Seller]
Resolution No. 2026-006
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City Council Agenda Report
Meeting Date:March 3, 2026
From:Todd Dusenberry, General Manager of Public Utilities
Department:Public Utilities
Submitted by:Adriana Ramos, Principal Management Analyst
Subject
Clean Energy Savings Plan for Renewable Energy and Supporting Agreements
Recommendation
A. Find that the proposed action is exempt from the California Environmental Quality Act (CEQA),
in accordance with CEQA Guidelines Section 15061(B)(3), the general rule that CEQA only
applies to projects that may have a significant effect on the environment; and
B. Adopt Resolution No. 2026-006 approving and authorizing the City Administrator to (a)
execute and deliver those interrelated agreements (Prepay Agreements) to which the City is a
party for participation in a clean energy savings renewable energy transaction, in substantially
the same form as submitted, with such changes as the City Administrator deems necessary or
advisable in furtherance of the purposes of this resolution; (b) execute and deliver any related
documents, such as amendments of any of the Prepay Agreements or any agreements
necessary to carry out the transactions contemplated by the Prepay Agreements; and (c) take
such actions as are necessary or advisable to implement and administer the Prepay Agreements.
The Prepay Agreements include:
1. A Limited Assignment Agreement (Antelope DSR—Vernon) (the Antelope DSR LAA) among
Antelope DSR 1, LLC (Antelope DSR), the Southern California Public Power Authority (SCPPA)
and J. Aron & Company (J. Aron), providing for SCPPA to assign certain of its rights and
obligations to receive and pay for renewable energy and associated resources under the Power
Purchase Agreement, dated as of July 16, 2015 (the Antelope DSR PPA), between Antelope
DSR and SCPPA, which rights and obligations relate to the Power Sales Agreement, dated as
of July 16, 2015, between SCPPA and the City;
2. A Limited Assignment Agreement (Astoria—Vernon) (the Astoria LAA) among Re Astoria 2
Solar LLC (Astoria), SCPPA and J. Aron, providing for SCPPA to assign certain of its rights and
obligations to receive and pay for renewable energy and associated resources under the Power
Purchase and Sale Agreement, dated as of July 23, 2014 (the Astoria PPA), among Astoria,
SCPPA, Power and Water Resources Pooling Authority, City of Lodi, City of Corona, City of
Moreno Valley and City of Rancho Cucamonga, which rights and obligations relate to the Power
Sales Agreement, dated as of July 23, 2014, between SCPPA and the City;
3. A Limited Assignment Agreement (Daggett—Vernon) (the Daggett Solar LAA) among Daggett
Solar Power 2 LLC (Daggett Solar), SCPPA and J. Aron, providing for SCPPA to assign certain
of its rights and obligations to receive and pay for renewable energy and associated resources
under the Power Purchase Agreement, dated as of June 24, 2022 (the Daggett Solar PPA),
between Daggett Solar and SCPPA, which rights and obligations relate to the Power Sales
Agreement, dated as of June 24, 2022, between SCPPA and the City;
4. A Limited Assignment Agreement (Desert Harvest—Vernon) (the Desert Harvest LAA) among
Desert Harvest II LLC (Desert Harvest), SCPPA and J. Aron, providing for SCPPA to assign
certain of its rights and obligations to receive and pay for renewable energy and associated
resources under the Power Purchase Agreement, dated as of December 21, 2017 (Desert
Harvest PPA), between Desert Harvest and SCPPA, which rights and obligations relate to the
Power Sales Agreement, dated as of December 21, 2017, between SCPPA and the City;
5. A Limited Assignment Agreement (BP Energy—Vernon/SCPPA) (the BP Energy—
Vernon/SCPPA LAA) between the City and SCPPA, assigning to SCPPA certain of the City’s
rights and obligations to receive and pay for renewable energy credits under the City’s
Confirmation Letter outlining the general terms and conditions of the agreement between the City
and BP Energy Company (BP Energy), whose terms are subject to the WSPP Agreement dated
October 21, 2024, as amended from time to time (collectively, the BP Energy PPA);
6. A Limited Assignment Agreement (BP Energy—SCPPA/J. Aron) (the BP Energy—SCPPA/J.
Aron LAA) and together with the BP Energy—Vernon/SCPPA LAA, the BP Energy LAA), among
SCPPA, J. Aron, and the City, assigning to J. Aron certain of SCPPA’s rights and obligations to
receive and pay for renewable energy credits under the BP Energy PPA;
7. A Clean Energy Purchase Contract (CEPC) with SCPPA by which SCPPA will sell to VPU at
discounted prices the prepaid renewable energy and associated resources generated by the
assigned Antelope DSR PPA, Astoria PPA, Daggett Solar PPA, Desert Harvest PPA, BP Energy
PPA (together, the PPAs) for a term of up to 30 years;
8. A Custodial Agreement with J. Aron and U.S. Bank Trust Company, National Association, or
selected financial institution as selected by J. Aron, as custodian, for a term equal to the CEPC’s
term, to establish bank accounts for and administer payments to Antelope DSR, Astoria, Daggett
Solar, Desert Harvest and BP Energy in satisfaction of performance under their respective PPAs;
9. A Project Coordination and Governance Agreement with SCPPA and the three other
participating SCPPA members (Burbank, Colton, and Pasadena) by which SCPPA will
administer this project and allocate administrative direct costs associated with the transaction to
all SCPPA project participants, including Vernon Public Utilities (VPU); and
10. A Letter Agreement with SCPPA for a term equal to the terms of the Antelope DSR LAA, the
Astoria LAA, the Daggett Solar LAA, the Desert Harvest LAA, and the BP Energy LAA (together,
the “LAAs”), providing that the parties may terminate the LAAs only upon certain specified events,
such as termination or suspension of performance under the assigned PPAs or suspension or
termination of performance under the Clean Energy Purchase Contract.
Background
Vernon Public Utilities (VPU) continues to progress toward meeting the Senate Bill 100 (SB 100)
goal of sourcing 100% carbon-free resources by 2045, while increasing renewable power
supplies in a cost-effective manner. VPU proposes to assign existing renewable resources to the
Southern California Public Power Authority (SCPPA) for the purpose of leveraging its tax-exempt
status to achieve cost savings of approximately $2 million per year. SCPPA is a twelve-member
Joint Powers Authority (JPA) comprised of eleven municipal utilities and one irrigation district and
has previously undertaken similar financings for renewable power resources.
To achieve the anticipated savings, SCPPA proposes to issue Clean Energy Project Revenue
Bonds as the tax-exempt financing mechanism, as permitted by the Internal Revenue Service
(IRS), to finance a one-time prepayment to an affiliate of J. Aron. Under the Clean Energy
Savings Plan, VPU will assign renewable energy products to SCPPA, and SCPPA will, in turn,
assign the renewable energy products (including those assigned by VPU, as well as renewable
energy products under its own direct PPAs) to J. Aron. VPU will agree to purchase back the
renewable energy products from SCPPA pursuant to a Clean Energy Purchase Contract (CEPC)
at a discounted price per megawatt-hour (MWh) relative to the prices under the existing PPAs.
Risk mitigation terms have been fully reviewed through the City Attorney’s Office, VPU’s outside
law firm, which has extensive experience in these transactions, VPU staff, SCPPA’s external
advisors and legal counsel, and incorporated into the prepay energy transaction documents to
protect VPU’s customers. If an adverse event occurs, such as a counterparty’s bankruptcy, the
existing PPAs and all their respective terms would revert back to VPU.
February 17, 2026 Council Discussion
Participation in the Clean Energy Savings Plan was presented to City Council for approval at
their meeting on February 17, 2026 (Attachment 2). The discussion before Council provided an
overview of the Clean Energy Savings Plan, the differences between it and the 2006 natural gas
prepay transaction, and Vernon’s ability to opt out if the discount available in a future bond reset
period is less than an established minimum discount. Ultimately, City Council tabled the item for
further discussion at the March 3, 2026. The following summarizes the discussions before the
City Council on February 17, 2026, regarding the Clean Energy Savings Plan, and identifies the
“worst case outcome” from that program.
Overview
The Clean Energy Savings Plan uses Vernon and SCPPA’s tax-exempt status to create a
discount on Vernon’s existing clean energy purchase agreements. The structure provides a
discount by having SCPPA issue bonds to fund energy generated by renewable energy projects
and agreements during the 30-year term of the Clean Energy Savings Plan. The tax-exempt
bonds create a discount on Vernon’s energy purchases under its existing agreements. The right
to purchase renewable energy products under the existing agreements are assigned to J Aron &
Company, LLC, which will supply the energy to its subsidiary, J Aron Energy Prepay 51, LLC,
under an Electricity Purchase Sale & Service Agreement, which will sell the energy to SCPPA
under a Master Power Supply Agreement. SCPPA will then sell the energy products to Vernon
under the Clean Energy Purchase Contract. The PPA seller will continue to receive the original
full PPA price, with Vernon paying the discounted price (e.g., 95%), and the bonds funding the
balance of the PPA price (e.g., 5%) to the PPA seller.
Vernon currently procures energy from four renewable projects: Antelope, Astoria, Daggett, and
Desert Harvest. In each case, SCPPA serves as the purchaser from the project owner, and
Vernon purchases the renewable energy products from SCPPA. Vernon has negotiated one
direct renewable energy product purchase agreement with BP Energy. The right to purchase
energy under all five of those agreements will be assigned to J Aron, so Vernon can receive a
discount on the purchase price.
Differences from the 2006 transaction
In the 2006 natural gas prepay transaction, Vernon issued bonds to fund a prepayment for a
long-term natural gas supply agreement. To comply with tax laws, Vernon was required to
continue purchasing the prepaid quantity of natural gas and using it to serve Vernon municipal
utility retail customers during the full term of the bonds. Problems arose when Vernon sold its
natural gas–fired electric generation plant after the prepay was executed, which substantially
reduced Vernon’s natural gas load because the plant was sold to a private entity. Despite the
reduced load, Vernon remained responsible for the debt service obligations and was required to
secure an alternative “qualifying use” as required by IRS regulations (i.e., a municipal utility).
Vernon satisfied this requirement by selling the gas to Sacramento Municipal Utility District
(SMUD), another municipal utility.
There are three primary differences between the 2006 prepay transaction and the 2026 Clean
Energy Savings Plan. First, SCPPA is issuing bonds to fund the prepay, not Vernon. Vernon has
no obligation under the bonds. Second, the Clean Energy Savings Plan uses Vernon’s existing
renewable energy products rather than creating new purchase obligations. Vernon’s existing
agreements are aligned with Vernon’s SB 100 requirements. Lastly, if Vernon experiences a
permanent reduction in electric load, the Clean Energy Savings Plan includes a mechanism to
reduce Vernon’s purchase obligations to reflect its lower load.
Opt-Out of Discount Program
The discount Vernon receives at the beginning of the transaction will continue through the first
bond reset period (likely 10 years). The Clean Energy Savings Plan documents will set a
minimum savings threshold for future bond reset periods (e.g., 5%). If savings in any future bond
reset period fall below the minimum savings threshold, Vernon has the option of accepting the
lower discount or Vernon can make a remarketing election, in which case the Prepay Supplier
remarkets Vernon energy entitlement under the Program, Vernon’s Limited Assignment
Agreements would terminate, and Vernon’s PPAs will revert to their original contractual
relationships, with Vernon receiving the energy from SCPPA or the PPA seller at the original
undiscounted contract price.
Thirty (30) Year Term and Potential for Early Termination
The 2026 Clean Energy Savings Plan transaction is structured to ensure that Vernon is in no
worse risk position than it is today if the transaction terminates early for any reason. The Clean
Energy Savings Plan has a 30-year term. The City is committed to the full 30-year term but can
opt out during each bond reset period (every 10 years) if the Plan does not provide the minimum
guaranteed discount. The entire Plan can be terminated if a majority of participants opt out during
a reset period. If the transaction terminates, then the Limited Assignment Agreements (LAAs)
will terminate, and Vernon’s PPAs will revert to their original contractual relationships. There will
be no adjustment to the price of the PPAs from what was previously negotiated and approved by
the City Council. Vernon returns to the same financial, risk, and contractual position that it is in
today. However, with the termination of the Clean Energy Savings Plan, Vernon would lose its
expected savings because it would revert to paying the originally agreed full contract price.
Next Steps
If Council approves the City’s participation in the Clean Energy Savings Plan, VPU will continue
to work with the City Attorney’s Office and outside legal counsel to finalize the necessary
contracts and agreements. VPU anticipates the SCPPA Board will take up the item for approval
at their March 19, 2026 meeting.
Fiscal Impact
The savings is estimated at $2 million per year. Savings will be used to offset expenses in the
Electric Fund, Resource Management, Renewable Energy Credit, Account Number 055-050-
590-520154 for the current fiscal year and subsequent years.
Attachments
1. Resolution No. 2026-06
2. Agenda Report - February 17, 2026