7.3 Indemnity Procedures. All claims for indemnification by any Indemnified Party under Section 7.2 shall be asserted and resolved as set forth in this Section 7.3. (a) In the event any claim or demand in respect of which an Indemnified Party might seek indemnity under Section 7.2 is asserted against or sought to be collected from such Indemnified Party by a Person other than Seller, Buyer or any Affiliate of Seller or Buyer (a Attachment Staff Report Item 16E
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“Third-Party Claim”), the Indemnified Party shall as soon as practical following the time at which the Indemnified Party discovered such claim deliver a Claim Notice to the Indemnifying Party, provided, however, the failure to promptly deliver such Claim Notice shall not be a waiver of the Indemnified Party’s rights under this Article VII except to the extent the Indemnifying Party is materially prejudiced by any delay in the delivery of such notice. The Indemnifying Party shall have the right to control the defense of such Third-Party Claim at its expense and through counsel of its choice by providing written notice of its election to assume such defense within twenty (20) days following the Indemnifying Party’s receipt of the notice of the Third Party Claim, and, except as otherwise provided herein, in which case the Indemnifying Party shall not be liable to the Indemnified Party for any fees of counsel or any other expenses with respect to the defense of such Third-Party Claim; provided that (i) if such Third Party Claim would reasonably be expected to result in injunctions or other equitable remedies in respect of the Indemnified Party or its business, then the Indemnified Party shall be entitled to retain its own counsel at the reasonable expense of the Indemnifying Party, (ii) if such Third Party Claim may reasonably result in criminal proceedings in respect of the Indemnified Party or any of its Affiliates, including any director, officer or employee of the Indemnified Party or any of its Affiliates, or in respect of the business of the Indemnified Party or any of Affiliates, then the Indemnified Party shall be entitled to retain its own counsel at the reasonable expense of the Indemnifying Party, (iii) if such Third Party Claim may reasonably be expected to result in Losses in excess of the monetary limitation of a party set forth in Section 7.2(c)(iii), then the Indemnified Party shall be entitled to retain its own counsel at the reasonable expense of the Indemnifying Party, (iv) if the Indemnified Party reasonably determines based upon the written advice of counsel that a conflict of interest exists that would make it inappropriate for the same counsel to represent both the Indemnified Party and the Indemnifying Party, then the Indemnified Party shall be entitled to retain its own counsel at the reasonable expense of the Indemnifying Party and (v) the Indemnified Party may, at its sole cost and expense, retain separate counsel to participate in, but not control, any defense or settlement of any Third-Party Claim, and the Indemnifying Party shall reasonably cooperate with such participation. If the Indemnifying Party elects to control the defense of any Third-Party Claim, the Indemnifying Party shall have the right to settle such Third-Party Claim if the Indemnified Party (or its Affiliates, if applicable) receive a full and unconditional release in favor of, and without the imposition of equitable relief or any other restriction of any kind on, or the admission of wrongdoing by, the Indemnified Party (or its Affiliates, if applicable); provided that if the proposed settlement provides for relief other than the payment of money damages, the Indemnifying Party may settle such Third-Party Claim only with the consent of the Indemnified Party, which consent shall not be unreasonably withheld, conditioned or delayed. The Indemnified Party shall reasonably cooperate with the Indemnifying Party and its counsel in contesting any Third-Party Claim, including in making any counterclaim against the Person asserting the Third-Party Claim, or any cross-complaint against any Person (other than the Indemnifying Party or any of its Affiliates). The party controlling the defense of a Third Party Claim shall in a timely manner keep the other party advised of the status of such Third Party Claim and the defense thereof and will consider in good faith recommendations made by such other party with respect thereto, but shall otherwise have full and exclusive control of the conduct of the defense of such Third Party Claim.
(b) In the event any Indemnified Party should have a claim under Section 7.2 against any Indemnifying Party that does not involve a Third-Party Claim, the Indemnified Party shall as soon as practical following the time at which the Indemnified Party discovered such claim Attachment Staff Report Item 16E
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promptly deliver an Indemnity Notice to the Indemnifying Party; provided the failure to promptly deliver such Indemnity Notice shall not be a waiver of the Indemnified Party’s rights under this Article VII except to the extent the Indemnifying Party is materially prejudiced by any delay in the delivery of such notice.
7.4 Tax Effect. Any amounts paid pursuant to this Article VII shall be considered an adjustment to the Purchase Price for Tax purposes to the extent allowed under applicable Law.
Buyer and Seller, and each of their respective Affiliates, shall prepare and file, and cause their Affiliates to prepare and file, Tax Returns consistent with the treatment described in the foregoing sentence.
7.5 Insurance Offset. The amount of any Loss for which indemnification is provided under this Article VII shall be determined net of any amounts recovered by an Indemnified Party or any of such Indemnified Party’s Affiliates under or pursuant to any insurance policy, title insurance policy, indemnity, reimbursement arrangement or contract pursuant to which or under which such Indemnified Party or such Indemnified Party’s Affiliates is a party or has rights; provided, however, that any amounts actually received pursuant to this Section 7.5 shall be reduced by any amounts incurred by the Indemnified Party or any of such Indemnified Party’s Affiliates in pursuing such recovery (except to the extent such amounts actually received include such amounts incurred in pursuing recovery).
7.6 Subrogation. Each Indemnified Party hereby waives any subrogation rights that its insurer may have with respect to any indemnifiable Losses. After any indemnification payment is made to any Indemnified Party pursuant to this Article VII, the Indemnifying Party shall, to the extent of such payment, be subrogated to all rights (if any) of the Indemnified Party against any third party in connection with the Losses to which such payment relates. Without limiting the generality of the preceding sentence, any Indemnified Party receiving an indemnification payment pursuant to the preceding sentence shall execute, upon the written request of the Indemnifying Party, any instrument reasonably necessary to evidence such subrogation rights.
7.7 Exclusivity. After the Closing, to the extent permitted by Law and except with respect to claims based on fraud, criminal activity, or willful misconduct and claims for equitable remedies (including specific performance), the indemnities set forth in this Article VII shall be the exclusive remedies of the Indemnified Parties for any inaccuracy in any representation or warranty, misrepresentation, breach of warranty or nonfulfillment or failure to be performed of any covenant or agreement contained in this Agreement.
7.8 Mitigation. Any Indemnified Party that becomes aware of a Loss for which it may seek indemnification under this Article VII shall use commercially reasonable efforts to mitigate the Loss to the extent reasonably practicable and shall consider any mitigating actions reasonably requested by the Indemnifying Party. Neither Party’s failure to mitigate shall limit an Indemnified Party’s right under this Article VII to file any claim for Losses or take any other action.
Attachment Staff Report Item 16E
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ARTICLE VIII
TERMINATION AND REPURCHASE OBLIGATION
8.1 Termination.
8.1.1 Notwithstanding anything contained in this Agreement to the contrary, this Agreement may be terminated at any time:
(a) by the mutual written consent of the Parties;
(b) by Seller on the one hand, or Buyer on the other, if there has been a breach of any representation, warranty, covenant or other agreement made by the other Party, which breach (i) cannot be cured or (ii) remains uncured for forty-five (45) days after notice of such breach is received by the breaching Party or such longer period as may be reasonably required to cure such breach, provided that the breaching Party is diligently working to cure such breach (such period not to exceed ninety (90) days);
(c) by either Party, if a Governmental Authority shall have issued a final and non-appealable order, injunction, judgment, decree or ruling permanently restraining, enjoining or otherwise prohibiting the consummation of the Transactions, or if there shall be any applicable Law that makes consummation of the Transactions illegal or otherwise prohibited (d) by Seller upon written notice to Buyer, upon the Bankruptcy of Buyer; or (e) by Buyer upon written notice to Seller, upon the Bankruptcy of Seller.
8.2 Notice of Termination. Any Party desiring to terminate this Agreement shall give written notice of such termination to the other Party.
8.3 Effect of Termination.
8.3.1 If this Agreement shall be terminated pursuant to Section 8.1 (prior to Closing), in addition to any other rights it may have under this Agreement or otherwise, all further obligations of the Parties under this Agreement (other than the provisions which by their terms are intended to survive the expiration or termination of this Agreement, including Article VII, Article VIII, Article IX and this Section 8.3) shall be terminated without further Liability of any Party to the other Party and the exercise of such right of termination will not be an election of remedies; provided, however, that nothing herein shall relieve any Party from Liability for fraud, willful misconduct or intentional breach of the terms or provisions of this Agreement.
8.3.2 Upon termination of this Agreement by a Party for any reason, Buyer shall, at Seller’s request, return or destroy all documents and other materials of Seller solely relating to the Project, Project Assets and the Transactions contemplated hereby. Each Party shall also, at the request of the other Party, return to the other Party or destroy any information relating to the Parties to this Agreement furnished by one Party to the other, whether obtained before or after the execution of this Agreement. Notwithstanding the foregoing, the provisions of this Section 8.3 shall not apply to (a) the extent that a Party preserves copies of such documents, materials or information in connection with such Party’s enforcement of its rights or remedies under this Attachment Staff Report Item 16E
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Agreement (b) any copies of documents or materials relating by a Party or its counsel if required law or for regulatory or compliance purposes (including any such information contained in board or committee papers) or (c) any documents or materials that are contained in an archived computer system backup in accordance with a Party’s or its counsel’s security and/or disaster recovery procedures.
ARTICLE IX
MISCELLANEOUS
9.1 Assignment. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and assigns. No assignment shall be made by any party without the prior written consent of the other Parties; provided, (i) any party may assign this Agreement to any Affiliate of such party without such consent and (ii) Buyer may assign this Agreement to any financial institution providing purchase money or other financing to Buyer from time to time as collateral security for such financing, provided, that in each case, no such assignment shall relieve the assigning party of any of its obligations hereunder. Any purported assignment in contravention of this Section 9.1 shall be null and void.
9.2 Limitation of Liability. NO PARTY SHALL BE LIABLE TO ANY OTHER
PARTY FOR ANY SPECIAL, INDIRECT, INCIDENTAL, CONSEQUENTIAL, EXEMPLARY
OR PUNITIVE DAMAGES OF ANY CHARACTER, RESULTING FROM, ARISING OUT OF,
IN CONNECTION WITH OR IN ANY WAY INCIDENT TO ANY ACT OR OMISSION OF A
PARTY RELATED TO THE PROVISIONS OF THIS AGREEMENT, IRRESPECTIVE OF
WHETHER CLAIMS OR ACTIONS FOR SUCH LOSSES ARE BASED UPON CONTRACT,
WARRANTY, NEGLIGENCE, STRICT LIABILITY OR ANY OTHER THEORY AT LAW OR EQUITY; PROVIDED, HOWEVER, THAT SUCH LIMITATION OF LIABILITY SHALL NOT
APPLY TO FRAUD OR THE INTENTIONAL MISREPRESENTATION OR WILLFUL MISCONDUCT OF A PARTY.
9.3 Confidentiality.
9.3.1 Buyer shall keep the Confidential Information strictly confidential and shall not use the Confidential Information for any purpose other than to evaluate, negotiate, and consummate the Transactions. Buyer shall not disclose or permit its Representatives to disclose any Confidential Information except: (a) if required by law, regulation, or legal or regulatory process; (b) to its Representatives, to the extent necessary to permit such Representatives to assist the Buyer in evaluating, negotiating, and consummating the Transactions; or (c) to any actual or potential sources of financing (debt, equity, or otherwise) who are or may be engaged to provide financing to the Buyer or its Affiliates. Buyer shall be responsible for any breach of this Agreement by any of its Representatives except for breaches committed by any such Representative that has executed its own confidentiality agreement with the Seller with respect to the Transactions.
9.3.2 Except for such disclosure as is necessary, in the written opinion of Buyer’s counsel, to not to be in violation of any applicable law, regulation, order, or other similar requirement of any governmental, regulatory, or supervisory authority, the parties shall not, and shall not permit any of their Representatives to, without the prior written consent of the other party, disclose to any Person: (a) the fact that the Confidential Information has been Made Available to Attachment Staff Report Item 16E
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the Buyer or its Representatives or that the Buyer or its Representatives has received or inspected any portion of the Confidential Information; (b) the existence or contents of this Agreement; (c) the fact that investigations, discussions, or negotiations are taking or have taken place concerning the Transactions, including the status thereof; or (d) any terms, conditions, or other matters relating to the Transactions.
9.3.3 If Buyer or any of its Representatives is required, in the written opinion of Buyer’s counsel, to disclose any Confidential Information, by law, regulation, or legal or regulatory process, the Buyer shall: (a) take all reasonable steps to preserve the privileged nature and confidentiality of the Confidential Information, including requesting that the Confidential Information not be disclosed to non-parties or the public; (b) give the Seller prompt prior written notice of such request or requirement so that the Seller may seek, at its sole cost and expense, an appropriate protective order or other remedy; and (c) reasonably cooperate with the Seller to obtain such protective order. In the event that such protective order or other remedy is not obtained, the Buyer (or such other Persons to whom such request is directed) will furnish only that portion of the Confidential Information which, on the advice of the Buyer’s counsel, is legally required to be disclosed and, upon the Seller’s request, use commercially reasonable efforts to obtain assurances that confidential treatment will be accorded to such information.
9.4 Public Announcements. No party hereto shall issue or make any public announcement, press release or other public disclosure regarding this Agreement or its subject matter without Seller’s prior written consent, in the case of any proposed disclosure by Buyer, or without Buyer’s prior written consent, in the case of any proposed disclosure by Seller, except for any such disclosure that is, in the opinion of the disclosing party’s counsel, required by applicable Law or the rules of any applicable stock exchange. In the event a party is, in the opinion of its counsel, required to make a public disclosure by applicable Law or the rules of any applicable stock exchange, such party shall, to the extent practicable, submit the proposed disclosure in writing to Seller, in the case of any proposed disclosure by Buyer, or the Buyer, in the case of any proposed disclosure by Seller, prior to the date of disclosure and provide Seller or Buyer, as applicable, a reasonable opportunity to comment thereon.
9.5 Expenses. Except as otherwise specified herein, each party shall bear its own expenses with respect to the Transactions.
9.6 Severability. If any provision of this Agreement is held to be illegal, invalid or unenforceable under present or future Laws effective during the term hereof, such provision shall be fully severable and this Agreement shall be construed and enforced as if such illegal, invalid or unenforceable provision never comprised a part hereof; and the remaining provisions hereof shall remain in full force and effect and shall not be affected by the illegal, invalid or unenforceable provision or by its severance herefrom. Furthermore, in lieu of such illegal, invalid or unenforceable provision, there shall be added automatically as part of this Agreement, a provision as similar in its terms to such illegal, invalid or unenforceable provision as may be possible and be legal, valid and enforceable.
9.7 No Third-Party Beneficiaries. This Agreement is for the sole benefit of the Parties and their permitted assigns and nothing herein, express or implied (including Article VII), shall Attachment Staff Report Item 16E
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give or be construed to give to any Person, other than the Parties and such permitted assigns, any legal or equitable rights hereunder.
9.8 Waiver. The failure of any party to enforce any part of this Agreement at any time shall not be construed as a waiver of that part, nor shall it forfeit any rights to future enforcement thereof. Any waiver hereunder shall be effective only if delivered to the other Parties in writing by the party making such waiver.
9.9 Governing Law. This Agreement shall be construed and enforced in accordance with and governed by the Laws of the State of New York without regard to the conflicts of Laws provisions thereof.
9.10 Jurisdiction. The Parties agree that any Action seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the Transactions shall be brought in the United States District Court for the Southern District of New York so long as such court shall have subject matter jurisdiction over such Action, or alternatively in any New York state court located in the County of New York if the aforesaid United States District Court does not have subject matter jurisdiction, and that any cause of action arising out of this Agreement shall be deemed to have arisen from a transaction of business in the State of New York, and each of the Parties hereby irrevocably consents to the jurisdiction of such court (and of the appropriate appellate courts therefrom) in any such Action and irrevocably waives, to the fullest extent permitted by Law, any objection that it may now or hereafter have to the laying of the venue of any such Action in any such court or that any such Action which is brought in such court has been brought in an inconvenient forum.
9.11 Waiver of Jury Trial. EACH OF THE PARTIES HERETO WAIVES TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO
A TRIAL BY JURY WITH RESPECT TO ANY LITIGATION DIRECTLY OR INDIRECTLY
ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS. EACH OF THE PARTIES HERETO HEREBY: (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF THE OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER;
AND (B) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS
AGREEMENT AND THE TRANSACTIONS, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 9.11.
9.12 Headings. The headings of the sections and subsections of this Agreement are inserted for convenience only and shall not be deemed to constitute a part hereof.
9.13 Counterparts. The Parties may execute this Agreement in one or more counterparts, and each fully executed counterpart shall be deemed an original.
9.14 Notices. All communications, notices and Consents provided for herein shall be in writing and be given in person or by means of email, telex, facsimile or other means of wire transmission (with request for assurance of receipt in a manner typical with respect to communications of that type), by overnight courier or by mail, and shall become effective: (a) on Attachment Staff Report Item 16E
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delivery if given in person; (b) on the date of transmission if sent by email, telex, facsimile or other means of wire transmission; (c) one (1) Business Day after delivery to the overnight service; or (d) four (4) Business Days after being mailed, with proper postage and documentation, for first-class registered or certified mail, prepaid. Notices shall be addressed as follows:
If to Buyer, to:
[___________]
[___________]
[___________]
If to Seller, to:
[___________]
[___________]
[___________]
provided, however, that if any party shall have designated a different address by notice to the others, then to the last address so designated.
9.15 Construction. The language in all parts of this Agreement shall be construed, in all cases, according to its fair meaning. The Parties acknowledge that each party and its counsel have reviewed and revised this Agreement and that any rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement. Words in the singular shall be deemed to include the plural and vice versa and words of one gender shall be deemed to include the other gender as the context requires. The terms “hereof,” “herein,” and “herewith” and words of similar import shall, unless otherwise stated, be construed to refer to this Agreement as a whole (including all of the Disclosure Schedules hereto) and not to any particular provision of this Agreement. Article, Section and Disclosure Schedule references are to the Articles, Sections, and Disclosure Schedules to this Agreement unless otherwise specified. Unless otherwise stated, all references to any agreement shall be deemed to include the exhibits, schedules and annexes to such agreement. The word “including” and words of similar import when used in this Agreement shall mean “including, without limitation,” unless the context otherwise requires or unless otherwise specified. The word “or” shall not be exclusive.
Unless otherwise specified in a particular case, the word “days” refers to calendar days.
References herein to this Agreement shall be deemed to refer to this Agreement as of the date of such agreement and as it may be amended thereafter, unless otherwise specified. All references to “dollars” or “$” shall be deemed references to the lawful money of the United States of America.
9.16 Disclosure Schedule. Each exception set forth in the Disclosure Schedules is identified by reference to, or has been grouped under a heading referring to, a specific individual section or subsection of this Agreement; provided, however, that the inclusion of any item referenced in one section or subsection of the Disclosure Schedules shall be deemed to refer to any other section or subsection of the Disclosure Schedules (and accordingly to the applicable sections or subsections of this Agreement which contain references to the Disclosure Schedules), whether or not an explicit cross-reference appears, if the applicability of such item to the other section or subsection is reasonably apparent. The inclusion of any information in the Disclosure Schedules Attachment Staff Report Item 16E
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shall not be deemed to be an admission or evidence of the materiality of such item, nor shall it establish a standard of materiality for any purpose whatsoever.
9.17 Entire Agreement. This Agreement (including the Disclosure Schedules referred to herein) and the Confidentiality Agreement constitute the entire agreement among the Parties and supersedes any prior understanding, agreements, or representations by or among the Parties, written or oral to the extent they relate in any way to the subject matter hereof.
10.19 Amendment. This Agreement may be amended, supplemented or modified only by a written instrument duly executed by the Parties.
[SIGNATURE PAGES FOLLOW]
Attachment Staff Report Item 16E
[Signature Page to Asset Purchase Agreement]
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be duly executed and delivered by their duly authorized representatives as of the date first written above.
SELLER:
[SELLER]
By ______________________________________
Name: ________________________________
Title: _________________________________
BUYER:
[BUYER]
By ______________________________________
Name: ________________________________
Title: _________________________________
Attachment Staff Report Item 16E
A-1
EXHIBIT A
FORM OF BILL OF SALE AND ASSIGNMENT AND ASSUMPTION AGREEMENT This BILL OF SALE AND ASSIGNMENT AND ASSUMPTION AGREEMENT (this “Assignment Agreement”), dated as of [___] (the “Effective Date”), is made and entered into by and between [___], a [___] (“Assignor”), with a mailing address of [___], and [___], a [___] (“Assignee”) with a mailing address of [___]. Assignor and Assignee are referred to herein, individually, as a “Party,” and collectively, as the “Parties.”
RECITALS
WHEREAS, Assignor and Assignee are parties to that certain Asset Purchase Agreement of even date herewith (the “Purchase Agreement”) and hereby desires to sell, contribute, assign, transfer, convey and deliver the Project Assets to Assignee; WHEREAS, Assignee desires to assume and accept from Assignor the Project Assets in each case upon the terms and subject to the conditions of this Assignment Agreement; WHEREAS, Capitalized terms used herein but not otherwise defined shall have the meaning set forth in the Purchase Agreement; and
WHEREAS, the Parties desire to carry out the intent and purpose recited herein by each Party’s execution and delivery to the other Party of this Assignment Agreement evidencing the vesting in Assignee of the Project Assets.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth in this Assignment Agreement and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
Section 1. Transfer of Project Assets. Effective as of the Effective Date, Assignor does hereby irrevocably sell, assign, transfer, convey, deliver and contribute to Assignee, and Assignee does hereby purchase, acquire, take and accept from Assignor, all of Assignor’s right, title and interest in and to the Project Assets, free and clear of all liens, encumbrances, liabilities, and obligations of every nature and description. All Project Assets hereby contributed and assigned to the Assignee shall be deemed to have been contributed and assigned effective as of the date first written above, except to the extent that any consents are required for such assignment, in which case such Project Assets shall be deemed to be assigned automatically upon obtaining such consent.
Section 2. Assumption of Liabilities. As part of the consideration for the transfer of the Project Assets, effective as of the Effective Date, Assignee does hereby assume from the Assignor, all burdens, obligations and liabilities in connection with the Assumed Liabilities and agrees to observe and perform all of the duties, obligations, terms, provisions and covenants, and Attachment Staff Report Item 16E
A-2
to pay and discharge all of the liabilities of the Assignor to be observed, performed, paid or discharged, in connection with the Assignment.
Section 3. Facsimile Signature; Counterparts. This Assignment Agreement may be executed in any number of counterparts (including by means of facsimile or portable document format (PDF)), each of which, when executed, shall be deemed to be an original and all of which together will be deemed to be one and the same instrument binding upon all Parties notwithstanding the fact that not all Parties are signatory to the original or the same counterpart.
Delivery of an executed counterpart of a signature page to this Assignment Agreement by facsimile or portable document format (PDF) shall be effective as delivery of a manually executed counterpart of this Agreement.
Section 4. Governing Law. This Assignment Agreement shall be governed by and construed in accordance with, and all disputes (whether for breach of contract or a tort) arising out of this Assignment Agreement or the transactions contemplated hereby shall be governed by, the laws of the State of New York without reference to any choice of law principles or rules thereof (including any borrowing statute) that would cause the application of the laws of another jurisdiction.
Section 5. Successors and Assigns. This Assignment Agreement and the rights hereunder are not assignable unless such assignment is consented to in writing by all Parties.
Subject to the preceding sentence, this Assignment Agreement and all the provisions hereof shall be binding upon and shall inure to the benefit of the Parties and their respective successors and permitted assigns.
Section 6. Amendments; Waivers, Etc. Neither this Agreement nor any term hereof may be amended, changed, waived, discharged or terminated other than by an instrument in writing, signed by the party against which enforcement of such amendment, change, waiver, discharge or termination is sought.
Section 7. Interpretations. The headings of the sections contained in this Agreement are solely for convenience of reference and shall not affect the meaning or interpretation of this Agreement.
Section 8. Modification. This Agreement constitutes the entire understanding of the parties, and supersedes any and all agreements or understandings of any of the parties with respect to the subject matter set forth herein, and may not be modified or otherwise changed orally, but only by a writing signed by the party against whom enforcement of any such waiver, change, modification, extension, or discharge is sought.
[Remainder of Page Intentionally Left Blank]
Attachment Staff Report Item 16E
A-3
IN WITNESS WHEREOF, this Assignment is executed as of the Effective Date.
ASSIGNOR:
[SELLER]
By ______________________________________
Name: ________________________________
Title: _________________________________
ASSIGNEE:
[BUYER]
By ______________________________________
Name: ________________________________
Title: _________________________________
Attachment Staff Report Item 16E
B-1
EXHIBIT B
PROJECT MANAGEMENT SERVICES
Not applicable.
Attachment Staff Report Item 16E
2 EXHIBIT C
FORM OF ENGINEERING, PROCUREMENT AND CONSTRUCTION
Attachment Staff Report Item 16E
3 EXHIBIT D
FORM OF ESTOPPEL
Attachment Staff Report Item 16E
4 EXHIBIT E
FORM OF POWER PURCHASE AGREEMENT
Attachment Staff Report Item 16E
5 EXHIBIT F
PROJECT INFORMATION SUMMARY
PROJECT INFORMATION
Base Purchase Price ($):
NTP Fee Payment:
Solar – Mounting [Roof or Ground or Canopy]:
Solar – System Capacity (kW DC STC):
Solar – Estimated Annual Generation (kWh):
Battery – Description of System to be Installed:
EV – Quantity of EVSEs to be Installed:
Mechanical Completion Deadline:
Substantial Completion Deadline:
Estimated Placed-in-Service Date (Permission to Operate Date):
MATERIAL CONTRACTS
[Power Purchase Agreement dated as of ______ by and among ____ and ____] [Engineering, Procurement and Constructions Terms and Conditions, by and between the _____ and ____]
[Interconnection Agreement dated as of ______ by and among ____ and ____] [Net Energy Metering Agreement dated as of ______ by and among ____ and ____] [Rooftop Solar Lease dated as of ______ by and among ____ and ____]
REAL PROPERTY AGREEMENTS
[Land Lease Option and Lease Agreement dated as of ______ by and among ____ and ____]
Attachment Staff Report Item 16E
6 [Land Lease Option Assignment Agreement dated as of ______ by and among ____ and ____]
[Land Lease Amendment dated as of ______ by and among ____ and ____]
PERMITS
[Land Use Approval]
[Zoning/Planning Board Approval]
[Fire Department Approval]
REPORTS
[Phase I Environmental Site Assessment (ESA), dated as of ___] [Phase I ESA Reliance Letter, dated as of ___]
[Wetland Delineation Report, dated as of ___]
[Geotechnical Report, dated as of ___]
INSURANCE POLICIES
[Insert]
BANK ACCOUNTS
[Insert]
Attachment Staff Report Item 16E
7 Schedule 1.1(a)
Knowledge of Buyer
Attachment Staff Report Item 16E
8 Schedule 1.1(b)
Knowledge of Seller
Attachment Staff Report Item 16E
9 Schedule 1.1(c)
Project Assets
Attachment Staff Report Item 16E
10 Schedule 3.3(e)
Required Permits
Attachment Staff Report Item 16E
11 Schedule 4.4
Required Approvals
Attachment Staff Report Item 16E
12 Schedule 4.5
Litigation
Attachment Staff Report Item 16E
13 Schedule 4.7
Taxes
Attachment Staff Report Item 16E
14 Schedule 4.8.4
Breach or Default of any Real Property Agreements
Attachment Staff Report Item 16E
15 Schedule 4.8.5
Real Property Agreements Not Yet Recorded
Attachment Staff Report Item 16E
16 Schedule 4.8.7
Other Project Assets
Attachment Staff Report Item 16E
17 Schedule 4.9
Material Breach or Default of Material Contracts
Attachment Staff Report Item 16E
18 Schedule 4.10
Reserved
Attachment Staff Report Item 16E
19 Schedule 4.11
Brokers
Attachment Staff Report Item 16E
20 Schedule 4.18
Actions with respect to Insurance Policies
Attachment Staff Report Item 16E
21 Schedule 4.19
Bank Accounts
Attachment Staff Report Item 16E
22 Schedule 4.21
Credit Support Obligations
Attachment Staff Report Item 16E
23 Schedule 8.1
Encumbrances
Attachment Staff Report Item 16E
Critical Municipal Facilities:
Request for Approval
November 20, 2024
Attachment Staff Report Item 16F
Agenda
2 1. Overview
2. CMF Program Structure
3. Key Counterparties
4. Next Steps
Attachment Staff Report Item 16F
1. Transaction Overview
3 Attachment Staff Report Item 16F
Executive Summary / Request for Consent
• Ava is working with a renewable energy developer,
GreenBridge, to design, construct, and operate solar and storage systems across 34 municipal sites by entering
power purchase agreements (“PPAs”) with 6 participating cities.
• City project portfolios are designed to deliver energy savings over the contract terms, as well as resiliency
benefits to protect against grid outages and extreme
weather events.
• Projects to be constructed in phases to achieve
commercial operation on varying timelines in 2025-2027. • Ava working towards execution of a master PPA with
Green Bridge by early December to enable early-phase
projects to kickoff development to support NEM2.0
qualification deadlines.
• Nov Board Approval Requests:
1) Negotiate and execute Developer PPA and Asset
Transfer Agreements with GreenBridge LLC
2) Negotiate and execute PPAs with Cities and provide
Solar and Storage incentives to Cities
4 Participating Cities
•Berkeley
•Fremont
•Hayward
•Livermore
•Oakland
•San Leandro
Attachment Staff Report Item 16F
Microgrid Description
5 Microgrid Layout Berkeley Live Oak Rec Center
Attachment Staff Report Item 16F
2. CMF Program Structure
6 Attachment Staff Report Item 16F
Developer & City PPA Overview
Ava to enter long-term energy service agreements with each participating city, which go “back-to-back” with master agreement Ava enters with experienced project developer. 7 • Developer PPA: Ava to enter master purchase agreement (“PPA”) with Green Bridge (experienced C&I-scale developer) which will construct, operate, and own the systems and sell the site energy generation and optimization services to Ava. • City PPAs: Ava to separately enter individual PPAs with each city that passes through rights / obligations of the master PPA:
▪ Ava to sell energy generation and energy services (e.g. use of battery energy storage system and optimization software) to Cities
▪ Ava to deliver construction, operation, and system maintenance (directly or indirectly via Developer’s obligations in the master PPA)
• Benefits to Cities:
▪ Multi-city initiative enables scale-based benefits in commercial terms for Cities relative to single-project financing, e.g. Lower costs/ increased savings, higher quality contractual terms, etc. ▪ Ava (trusted entity) transacts with Cities directly to close and administer the services ▪ Ava holds ability to deliver ancillary services and incentives to Cities Attachment Staff Report Item 16F
Transaction Diagram
8 GreenBridge
Developer & DER
Owner
Ava
Community
Energy
Participating
Cities
(multiple)
Developer PPA City PPA
(Various)
Energy delivery, energy
services
Energy delivery & services
energy services
Monthly payment ($) Monthly payment ($)
Gridscape
EPC Subcontractor
Engineering,
procurement, &
construction
services
System
cost $
Battery optimization
software service
provider
Financing
Parties
Interest in ITCs, project
revenues, and asset
ownership
Working
capital
($)
Payment ($) Battery
software
services
Lunar
Prospective grid
services platform
MSA
Platform &
capacity
fees ($)
VPP-enabling
software
services
[Prospective grid services
agreement]
DER capacity commitment
Payment / incentive ($)
Structural Summary
1. Developer and Ava enter master Developer PPA.
Developer constructs & owns DERs; Ava pays for
energy services.
2. Ava enters passthrough PPA (“City PPA”) with
each participating City as final offtaker.
3. Ava maintains optionality to enter future grid
services arrangements with Cities.
EPCA
Ava managing high degree of complexity while streamlining the development process on behalf of Cities.
Attachment Staff Report Item 16F
Asset Purchase Agreement
• In advance of Developer PPA execution, Ava entered
Consulting Services Agreement (“CSA”) with Gridscape
to conduct and pay up to $1.8M for preliminary design,
development, and interconnection application work for
NEM2.0 projects
• CSA was critical to support development ahead of
NEM2.0 cliff dates and requisite PG&E approval
milestones
• Ava to simultaneously execute Asset Purchase
Agreement (“APA”) with Green Bridge to assign Ava’s
development assets to Green Bridge for ongoing project
development
▪ Under APA, Green Bridge to pay Ava for any development assets undertaken by Ava for projects
▪ Ava will retain the costs of development for work related to projects deemed non-viable or terminated prior to NTP
9 Ava
Community
Energy
GreenBridge
Developer & DER
Owner
Gridscape
EPC Subcontractor
Development
assets
Development
assets
Fee payment ($)
Fee payment ($) CSA
APA
Attachment Staff Report Item 16F
Labor Commitments
10 Ava working with Developer to ensure construction labor is paid at prevailing wages and contracts with local, union labor.
• Commitment to Local: Developer committing to hire construction contractors and subcontractors residing in Alameda or San Joaquin county (“Local Hires”).
• Prevailing wages: Commitment to pay prevailing wages at local level across each City.
• Use of union labor: Developer committing to use union labor where it is possible to (i) use Local Hires, (ii) meet project development timelines, and (iii) meet cost neutrality requirements of the Cities.
• In the event that the Developer cannot find union labor that can meet all items above, it will provide advance notice to Ava and provide an alternative proposal that meets (i)-(iii).
Attachment Staff Report Item 16F
City Portfolios
11 Portfolio Profile by City
Site list and capacity figures pending finalization
Site Types
*Parking lot does not have storage
Attachment Staff Report Item 16F
PPA Pricing to Ensure City Savings
• City portfolios must meet cost neutrality over PPA term • Developer commits to design and price each City portfolio to meet cost neutrality • Developer agrees to limitations on price changes for NEM3.0 projects • Each City has 2 separate PPA rates applicable to its (i) NEM2.0 and (ii) NEM3.0 project cohorts ▪ NEM2.0 projects: Pricing is locked at PPA execution
▪ NEM3.0 projects: Pricing may change due to design changes, but only to extent that City portfolio remains cost-neutral • If pricing changes impair cost neutrality, then Ava/City has right to remove minimum projects to achieve cost neutrality ▪ City-specific pricing and savings figures to be shared with Cities shortly after 11/6 • Ava collecting 2.5% surcharge to collect for: Administration, legal expenses, extra-ordinary charges and potential removal fee
12 Developer commits to a pricing construct that (i) ensures each City achieves portfolio savings, (ii) locks pricing for early-stage projects, and (iii) sets guardrails on pricing changes for late-stage projects.
City Savings Calculation
Estimated site utility costs during term without projects (-) Estimated site utility costs during term with projects = Estimated City utility bill savings
(-) cumulative PPA payments for the projects
= Cumulative net energy bill savings to City
Attachment Staff Report Item 16F
Ava Providing Solar and Storage Incentives
13 • Ava requesting permission apply approved CMF budget of $7M towards Solar & Storage incentives structured like the upcoming publicly available Community Resilience Hub
incentives
• All projects will receive an incentive of $2/month/kWh of aggregate BESS nameplate capacity for 5 years. NEM3.0
projects will also receive an upfront incentive of $400/kWh to account for lower bill savings.
• Current projects forecast to use $2.5M of incentives, leaving remaining funds for future projects
• Incentive to be passed to Cities as a monthly bill credit on City PPA invoices from Ava for a 5-year credit term
• Ava retains option to use the upfront incentive via an optional prepayment of the Developer PPA if the pre-payment delivers additional savings to the Cities
Attachment Staff Report Item 16F
3. Key Counterparties
14 Attachment Staff Report Item 16F
RFO Process
• Initial RFO in July 2022, for projects with 4 Cities and selected SunWealth LLC as Asset Owner and received approval from BoD to negotiate and execute agreement in January 2023.
• Ava and SunWealth were unable to successfully agree on PPA • Ava re-issued RFO with 8 participating Cities in November of 2023 and received four bids. After initial review 2 bidders were shortlisted • Greenbridge was selected as final counterparty progress with PPA negotiations
15 Attachment Staff Report Item 16F
Financing Partner: Green Bridge
• North Carolina-based commercial and utility-scale renewable energy financing and development platform
• Founded in 2020 by legacy GE Capital leadership, with over 38 years of renewables and energy financing and development experience • Has funded over $1B of projects to date, with pipeline of over $250M in development
• Uses institutional tax equity and debt financing capital to deliver competitive PPA pricing
• Lever relationships with best-in-class operational service providers to support its operational services
16 Attachment Staff Report Item 16F
Engineering, Procurement, & Construction (EPC):
Gridscape
Gridscape
▪ Headquartered in Fremont
▪ Portfolio includes 19 municipal solar and/or storage microgrid projects in California
▪ Deep capabilities in microgrid solar and storage design, engineering, procurement, installation, interconnection, and operation & maintenance
▪ Levers network of subcontractors as boots-on-the-ground for project construction
17 Attachment Staff Report Item 16F
4. Next Steps
18 Attachment Staff Report Item 16F
Next Steps & Timing
Next two months
• Mid-November: Finalize Developer PPA form; deliver pricing to Cities • Ava 11/20 Board Meeting: Authorize CEO to negotiate and execute • Early Dec: Execute Developer PPA
• EOM Dec: Execute City PPA with all Cities
• Jan 2025: NEM2.0 design finalization & long-lead equipment orders placed • 2025-2027: Projects constructed, interconnected, & operationalized in phases 19 Nov 2024:
Negotiate final
Developer PPA
Nov 2024: Board
consent to execute
Developer / City PPAs
Dec 2024:
Execute
Developer
PPA
Dec 2024:
Execute City
PPAs
Jan 2025: EPC order
long-lead items &
finalizes designs for
NEM2.0 projects
2025: Project
permitting,
construction, and
interconnection for
project portfolio
Q1 2026: Target
commercial operation
start for NEM2.0
projects
Q1 2027: Target
commercial operation
start for SBP projects
CMF Timeline
City City Council
Approval Date
Berkeley 11/12
Fremont 12/3
Hayward 10/15
Livermore 11/25 & 12/9
Oakland 11/12
San Leandro 12/2
City Calendar for Approval to Execute
Attachment Staff Report Item 16F
Appendix
20 Attachment Staff Report Item 16F
Equipment, Operations, & Warranties
• Major Equipment
▪ All equipment vetted by GreenBridge’s independent engineer and supported by manufacturer’s warranty on performance and functionality:
• Solar modules: Minimum 25 year warranty
• Battery energy storage systems: Minimum 10 year warranty • Inverters: Minimum 5 year warranty
• Installer warranties:
▪ Workmanship warranty: 3 years
▪ Roof warranty: 10 years
• Operations & Maintenance: Gridscape
▪ As original EPC, maintenance benefitted by Gridscape warranties and project familiarity
21 Attachment Staff Report Item 16F
Third-Party Advisors
• Outside counsel: Ava representation and transaction
document drafting by Wilson Sonsini, a leading renewable energy and clean technology law firm.
• Energy modeling: Project site assessment verification services provided by EcoMotion, an experienced
consultancy with specialty in microgrid resiliency projects. 22 Program structure and project consultation has been supported by best-in-class advisory.
Attachment Staff Report Item 16F
Ava’s Responsibilities & Risk Mitigants
23 Issue Risk(s) Mitigation
Billing • Risk of Ava coming out of pocket to make monthly PPA payments to Developer
• Ava collects City payments through City PPA and passes them through to Developer under Developer PPA
• Monthly Payment sized on same reported energy metrics to ensure City payment covers Ava’s payment
• Billing cycle: City pays Ava before Ava pays Developer Equipment
Performance
• Poor solar or battery performance result in reduced
energy savings delivered to the site
• solar performance guarantee, with damages payable to Cities if not met to incentive
• Developer backstops BESS performance triggers for BESS availability, efficiency, and capacity with EOD ramifications
Project Operation &
Maintenance
• Solar or BESS equipment fails or underperforms
during contract term
• System owner fails to maintain system to prudent
operating standards
• Developer bears cost & responsibility of project O&M services to Ava, which Ava passes along to Cities
• Original installer (Gridscape) serving as O&M provider, with support of their workmanship & roof warranties
• Developer posts replenishable performance security as reserve for project maintenance and system removal throughout term
Development Timing • Project construction and commissioning runs late, causing certain projects to miss NEM2.0 deadline
and/or inconvenience at project sites
• Developer owes damages passed through to Cities in event project does not meet target operation start date
• City has project termination rights if COD is delayed greater than 45 days (for NEM2.0 projects) or 120 days (for SBP projects).
Equipment Selection &
Procurement
• Equipment does not meet industry standards around
performance and/or warranty
• Sourcing practices conflict with federal/state/local
regulations
• Developer approved vendor requires technical opinion by reputable third-party independent engineer • Major components supported by fulsome manufacturer’s warranty. • Developer required to comply with trade regulations, including UFLPA & modern slavery
Program has been designed to offer cost-neutral renewable-based energy resiliency for Cities. Ava directly provides services to Cities, while mitigating risk to Ava though Developer’s ownership.
Attachment Staff Report Item 16F
24 Issue Risk Mitigation
Project Insurance • Unforeseen installer liability during construction • Disaster, wildfire, extreme weather, or other insurable event results in system loss during operation
• Developer required to maintain fulsome construction all-risk and operating all-risk insurance
• Force majeure language limits performance obligation
Project Removal • Cities left bearing the responsibility and expense of removing systems from their sites at end of term
• Developer required to perform and pay for end-of-term project removals
• Developer posts replenishable performance security to support end-of-term project removal • Ava bears obligation to pay for end-of-term project removals if not covered by Developer
• In event Ava loses investment grade status, Ava to post cash or LC security at City’s benefit for use in system removals
Project / Portfolio
Termination Rights
• Project terminations or default by City leave Ava at risk of performing PPA buyer obligations to Developer
• Project termination or default by Developer leave Ava at risk of performing seller obligations to City
• Agreements designed to cross-terminate at project & portfolio level • In event of post-construction City early termination, City makes termination payment that passes through to Developer
Developer Risk • Developer is unable to perform its obligations through the end of the term due to financial distress or
changes to its business model
• Developer’s use of traditional renewable project financing creates likelihood of ownership assignment to reputable asset managers in event of Developer insolvency
• In a severe downside scenario, Ava has buyout rights and manager transition rights to step into Developer obligations to the projects Ava’s Responsibilities & Risk Mitigants (cont.)
Attachment Staff Report Item 16F