SCHEDULE to the
2002 ISDA MASTER AGREEMENT
dated as of April __, 2025
between
AVA COMMUNITY ENERGY,
a California joint powers authority
(“Party A”),
and
MRP PACIFICA MARKETING III LLC,
a Delaware limited liability company
(“Party B”)
Part 1. Termination Provisions.
(a) “Specified Entity” means,
In relation to Party A, for purposes of:
Section 5(a)(v), Default Under Specified Transaction: not applicable Section 5(a)(vi), Cross Default: not applicable
Section 5(a)(vii), Bankruptcy: not applicable
Section 5(b)(v), Credit Event Upon Merger: not applicable and in relation to Party B for purposes of:
Section 5(a)(v), Default Under Specified Transaction: not applicable Section 5(a)(vi), Cross Default: not applicable
Section 5(a)(vii), Bankruptcy: not applicable
Section 5(b)(v), Credit Event Upon Merger: not applicable (b) “Specified Transaction” has the meaning specified in Section 14 of this Agreement. (c) The “Cross Default” provisions of Section 5(a)(vi) will not apply to either party. (d) The “Credit Event Upon Merger” provisions of Section 5(b)(v) will not apply to either Attachment Staff Report Item 11G
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party.
(e) The “Automatic Early Termination” provisions of Section 6(a) will not apply to either party.
(f) “Termination Currency” means United States Dollars.
Part 2. Tax Representations.
(a) Payer Tax Representations. For the purpose of Section 3(e), Party A and Party B each make the following representations:
It is not required by any applicable law, as modified by the practice of any relevant governmental revenue authority, of any Relevant Jurisdiction to make any deduction or withholding for or on account of any Tax from any payment (other than interest under Section 6(d)(ii), 6(e) or 9(h) of this Agreement) to be made by it to the other party under this Agreement. In making this representation, it may rely on (i) the accuracy of any representations made by the other party pursuant to Section 3(f) of this Agreement, (ii) the satisfaction of the agreement contained in Sections 4(a)(i) or 4(a)(iii) of this Agreement, and the accuracy and effectiveness of any document provided by the other party pursuant to Sections 4(a)(i) or 4(a)(iii) of this Agreement, and (iii) the satisfaction of the agreement of the other party contained in Section 4(d) of this Agreement; provided that it shall not be a breach of this representation where reliance is placed on clause (ii) and the other party does not deliver a form or document under Section 4(a)(iii) by reason of material prejudice to its legal or commercial position.
(b) Party A Payee Tax Representations. For the purpose of Section 3(f), Party A makes the following representations:
Party A represents it is a “U.S. person” (as that term is used in section 1.1441-4(a)(3)(ii) of United States Treasury Regulations) for United States federal income tax purposes. (c) Party B Payee Tax Representations. For the purpose of Section 3(f), Party B makes the following representations:
Party B is a U.S. limited liability company duly organized under the laws of the State of Delaware and it is disregarded as an entity separate from its sole owner for U.S. income tax purposes. The sole owner is a “U.S. Person” within the meaning of Section 7701(a)(30) of the Internal Revenue Code of 1986, as amended.
Part 3. Agreement to Deliver Documents.
For the purpose of Sections 4(a)(i) and 4(a)(ii) of this Agreement, each party agrees to deliver the following documents, as applicable:
(a) Tax forms, documents or certificates to be delivered are:
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(i) Party A agrees to deliver a complete and accurate United States Internal Revenue Service Forms W-9 (or any successor applicable forms), in a manner reasonably satisfactory to the other party, upon execution of this Agreement and promptly upon written request from the other party.
(ii) Party B agrees to deliver a complete and accurate United States Internal Revenue Service Forms W-9 (or any successor applicable forms), in a manner reasonably satisfactory to the other party, upon execution of this Agreement and promptly upon written request from the other party.
(b) Other documents to be delivered are:
Party required
to deliver
Form / Document /
Certificate
Date by which to be
delivered
Covered by
Section 3(d)
Representation
Party A and
Party B
Certified resolutions,
unanimous written consents
or equivalent documents
evidencing necessary
corporate, member or
partnership, as the case may
be, authority and approvals
with respect to the
execution, delivery and
performance of this
Agreement.
Upon execution of this
Agreement and, with
respect to a Confirmation,
promptly upon the other
party’s reasonable request.
Yes
Party A and
Party B
Certificate of authority and
specimen signatures of the
individuals executing this
Agreement.
Upon execution of this
Agreement and, with
respect to a Confirmation,
promptly upon the other
party’s reasonable request.
Yes
Party A Audited annual financial
statements of Party A for
each fiscal year certified by
independent certified public
accountants and prepared in
accordance with relevant
generally accepted
accounting principles.
Within 180 days following
the fiscal year end, if
unavailable on the SEC
website or such entity’s
website.
Yes
Party B Audited annual financial
statements of Party B, for
each fiscal year certified by
independent certified public
accountants and prepared in
accordance with relevant
generally accepted
accounting principles.
Within 180 days following
the fiscal year end, if
unavailable on the SEC
website or such entity’s
website.
Yes
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Party required
to deliver
Form / Document /
Certificate
Date by which to be
delivered
Covered by
Section 3(d)
Representation
The obligations of a party under this Agreement to deliver any form, document or certificate (including those listed in Part 3 of this Schedule) shall be satisfied if such party shall have provided the other party with access to an internet or intranet website from which such form, document or certificate can be readily obtained using a commonly used web browser and the obligations of a party under this Agreement to deliver financial statements due to a delay in the preparation or certification of same shall not be an Event of Default so long as the relevant party diligently pursues the preparation, certification and delivery of the such financial statements.
Part 4. Miscellaneous.
(a) Addresses for Notices. Notwithstanding anything to the contrary in Section 12(a) of this Agreement, parties may communicate by e-mail for informational purposes only, but e-mail does not constitute a binding legal notice for the purpose of Section 12(a) of this Agreement. For the purposes of Section 12(a) of this Agreement:
(i) Address for notices or communications to Party A (other than with respect to confirmations and/or payments):
Address:
Attention:
Phone:
E-mail:
With additional Notices of an Event of Default to:
Attention:
Phone:
Email:
Specific Instructions:
Confirmations to Party A:
Attention:
Phone:
Email:
Payments to Party A:
Attention:
Phone:
Email:
Contact Information for Dodd-Frank for Party A:
Name:
Title:
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Phone:
Email:
(ii) Address for notices or communications to Party B (other than with respect to confirmations and/or payments):
Address:
Attention:
Phone:
Email:
With additional Notices of an Event of Default to:
Attention:
Phone:
Email:
Specific Instructions:
Confirmations to Party B:
Attention:
Phone:
Email:
Payments to Party B:
Attention:
Phone:
Email:
Contact Information for Dodd-Frank for Party B:
Name:
Title:
Phone:
Email:
(b) Process Agent. For the purpose of Section 13(c):
Party A appoints as its Process Agent: Not applicable.
Party B appoints as its Process Agent: Not applicable.
(c) Offices. The provisions of Section 10(a) will not apply to this Agreement. (d) Multibranch Party. For the purpose of Section 10(c):
Party A is not a Multibranch Party.
Party B is not a Multibranch Party.
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(e) Calculation Agent. The Calculation Agent is Party B unless an Event of Default has occurred and is continuing with respect to Party B, in which case the Calculation Agent is Party A or an unaffiliated dealer in the relevant market selected by Party A in good faith and in a commercially reasonable manner until such time as Party B is no longer a Defaulting Party. All calculations made by the Calculation Agent shall be made in good faith and in a commercially reasonable manner. In the event that the amount owed by either party is disputed in good faith, the undisputed portion of such amount then due shall be immediately paid by the relevant party. The parties shall endeavor to resolve the disputed portion promptly in good faith. If the parties are unable to resolve such dispute within three (3) Local Business Days, the parties shall each select an independent dealer which is not an Affiliate of either party in the relevant market to act as Calculation Agent, and those two (2) dealers will select a third similarly qualified dealer to supply the calculation in dispute and the third Calculation Agent will use the arithmetic average of the three (3) calculations from each of the three Calculation Agents to resolve the dispute. The parties shall share equally the costs reasonably invoiced by each of such Calculation Agents for performing these calculations. No failure by a party to perform any duties of the Calculation Agent under this Agreement shall be construed as an Event of Default or Termination Event under Sections 5(a) or (b) of this Agreement. (f) Credit Support Document. Credit Support Document means:
(i) in relation to Party A: None; and
(ii) in relation to Party B: None.
(g) Credit Support Provider. Neither Party A nor Party B will have a Credit Support Provider.
(h) Governing Law. This Agreement will be governed by and construed in accordance with the laws of the State of California (without reference to choice of law doctrine). To the extent enforceable at such time, each party waives its respective right to any jury trial with respect to any litigation arising under or in connection with this Agreement. (i) Jurisdiction. Section 13(b) is hereby amended by:
(i) deleting subparagraph (i) and replacing it with the following:
“submits to the exclusive jurisdiction of the state courts of the State of California and the United States District Court located in San Francisco, California; provided however that, upon the agreement of both parties, any dispute, claim or controversy arising out of or relating to this Agreement or the breach, termination, enforcement, interpretation or validity thereof, shall be determined by final, non-appealable binding arbitration in San Francisco, California before three (3) arbitrators. The arbitration shall be administered by Judicial Arbitration and Mediation Services, Inc. (“JAMS”) pursuant to its Comprehensive Arbitration Rules and Procedures.
Within fifteen (15) days after the commencement of arbitration, each party shall select one person to act as arbitrator, and the two so-selected arbitrators shall select a third arbitrator (the “chairperson”) within thirty (30) days of the commencement Attachment Staff Report Item 11G
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of the arbitration. If either party is unable or fails to select one person to act as arbitrator, such arbitrator shall be appointed by JAMS. If the arbitrators selected by either party are unable or fail to agree upon a chairperson, the chairperson shall be appointed by JAMS. The chairperson shall be a person who has experience in renewable energy-related transactions, and none of the arbitrators shall have been previously employed by any party or have any direct pecuniary interest in any party or the subject matter of the arbitration, unless such conflict is expressly acknowledged and waived in writing by all of the parties. The parties shall maintain the confidential nature of the arbitration proceeding and any award, including any hearing(s), except as may be necessary to prepare for or conduct the arbitration hearing on the merits, or except as necessary in connection with a court application for a preliminary remedy, a judicial challenge to an award or its enforcement, or unless otherwise required by law or judicial decision. Any arbitration proceedings, decision or award rendered hereunder and the validity, effect and interpretation of this arbitration provision shall be governed by the Federal Arbitration Act. The arbitrator(s) shall have no authority to award consequential, treble, exemplary, or punitive damages of any type or kind regardless of whether such damages may be available under any law or right, with the parties hereby affirmatively waiving their rights, if any, to recover or claim such damages. The responsibility for compensation and expenses of the three arbitrators and all other expenses charged by JAMS shall be equally split by the parties. Notwithstanding the foregoing, any costs incurred by a party in seeking judicial enforcement of any written decision of the arbitrators shall be chargeable to and borne exclusively by the party against whom such court order is obtained. The award shall be final and binding on the parties and judgment upon any award may be entered in any court of competent jurisdiction;”
(ii) deleting subparagraph (iii) and replacing it with the following:
“agrees that nothing in this Agreement precludes either party from bringing Proceedings in any other jurisdiction in order to enforce any judgment obtained in any Proceedings referred to in the preceding sentence, nor will the bringing of such enforcement Proceedings in any one or more jurisdictions preclude the bringing of enforcement Proceedings in any other jurisdiction.”
(j) Netting of Payments. “Multiple Transaction Payment Netting” will not apply for the purpose of Section 2(c) of this Agreement.
(k) “Affiliate” will have the meaning specified in Section 14 of this Agreement. (l) Absence of Litigation. For the purpose of Section 3(c):
“Specified Entity” means in relation to Party A, none.
“Specified Entity” means in relation to Party B, none.
(m) No Agency. The provisions of Section 3(g) will apply to this Agreement.
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(n) Additional Representations will apply. For the purpose of Section 3 of this Agreement, each of the following will constitute an Additional Representation:
(i) Relationship Between Parties. Each party will be deemed to represent to the other party on the date on which it enters into a Transaction that (absent a written agreement between the parties that expressly imposes affirmative obligations to the contrary for that Transaction):
(1) Non-Reliance. It is acting for its own account, and it has made its own independent decisions to enter into that Transaction and as to whether that Transaction is 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 party as investment advice or as a recommendation to enter into that Transaction, it being understood that information and explanations related to the terms and conditions of a Transaction will not be considered investment advice or a recommendation to enter into that Transaction. No communication (written or oral) received from the other party will be deemed to be an assurance or guarantee as to the expected results of that Transaction. (2) 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 that Transaction. It is also capable of assuming, and assumes, the risks of that Transaction.
(3) Status of Parties. The other party is not acting as a fiduciary for or an adviser to it in respect of that Transaction.
(ii) No Immunity. Party A represents, warrants and covenants to Party B (which representation will be deemed to be repeated by Party A on the date on which a Transaction is entered into) that, with respect to the contractual obligations of Party A and its Credit Support Provider, if applicable, it and its Credit Support Provider, if applicable, will not claim and waives any rights to immunity on the grounds of sovereignty or similar grounds with respect to this Agreement or any credit support provided with respect to this Agreement from (a) suit, (b) jurisdiction of court (including a court located outside of the jurisdiction of its organization), (c) relief by way of injunction, order for specific performance or recovery of property, (d) attachment of assets, or (e) execution or enforcement of any judgment; provided, however, that nothing in this Agreement shall waive the obligations and/or rights set forth in the California Government Claims Act (Government Code Section 810 et seq.).
(iii) Powers Act Compliance. Party A represents and warrants to Party B continuously from and after the date hereof, with respect to this Agreement and each Transaction, as follows: (i) all acts necessary to the valid execution, delivery and performance of this Agreement, including without limitation, competitive bidding, public notice, Attachment Staff Report Item 11G
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election, referendum, or other required procedures has or will be taken and performed as required under the Powers Act and Party A’s ordinances, bylaws or other regulations, (ii) all persons making up the governing body of Party A are the duly elected or appointed incumbents in their positions and hold such positions in good standing in accordance with the Powers Act and other applicable law, (iii) entry into and performance of this Agreement by Party A are for a proper public purpose within the meaning of the Powers Act and all other relevant constitutional, organic or other governing documents and applicable law, (iv) the term of this Agreement does not extend beyond any applicable limitation imposed by the Powers Act or other relevant constitutional, organic or other governing documents and applicable law, (v) entry into and performance of this Agreement and each Transaction by Party A will not adversely affect the exclusion from gross income for federal income tax purposes of interest on any obligation of Party A otherwise entitled to such exclusion, and (vi) obligations to make payments hereunder do not constitute any kind of indebtedness of Party A or create any kind of lien on, or security interest in, any property or revenues of Party A which, in either case, is proscribed by any provision of the Powers Act or any other relevant constitutional, organic or other governing documents and applicable law, any order or judgment of any court or other agency of government applicable to it or its assets, or any contractual restriction binding on or affecting it or any of its assets. For purposes hereof, the term “Powers Act” means the Joint Exercise of Powers Act of California (Government Code Section 6500 et seq.).
(iv) Eligible Contract Participant. Each party represents to the other party (which representation will be deemed to be repeated by each party on the date on which a Transaction is entered into) that it and its Credit Support Provider, if applicable, are “eligible contract participants” as defined in Section 1a(18) of the Commodity Exchange Act, as amended.
(v) Bankruptcy Representations. Without limiting the applicability of any of the provisions of the United States Bankruptcy Code, as amended (the “Bankruptcy Code”) (including, without limitation, Sections 362, 546, 553, 556, 560, 561 and 562 thereof and the applicable definitions in Section 101 thereof), the parties intend that:
(1) all Transactions under this Agreement constitute “forward contracts” or “swap agreements” within the meaning of the Bankruptcy Code; (2) all payments made or to be made by one party to the other party pursuant to this Agreement constitute “settlement payments” within the meaning of the Bankruptcy Code;
(3) all margin or collateral provided by one party to the other party under any margin, collateral, security or similar arrangement related to this Agreement, including but not limited to the Credit Support Annex, constitute “margin payments” within the meaning of the Bankruptcy Code; Attachment Staff Report Item 11G
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(4) this Agreement constitutes a “master netting agreement” within the meaning of the Bankruptcy Code;
(5) each party is a “forward contract merchant” or “swap participant” each within the meaning of the Bankruptcy Code with respect to any Transactions that constitute “forward contracts” or “swap agreements”, respectively; and
(6) each party’s rights under Section 6 “Early Termination” of this Agreement constitutes a “contractual right to liquidate” the Transactions within the meaning of the Bankruptcy Code;
(7) electricity delivered hereunder constitutes a “good” under Section 503(b)(9) of the Bankruptcy Code;
(8) for purposes of this Agreement, the other party is not a “utility” as such term is used in 11 U.S.C. Section 366, and each party waives and agrees not to assert the applicability of the provisions of 11 U.S.C. Section 366 in any bankruptcy proceeding wherein such party is a debtor. In any such proceeding, each party further waives the right to assert that the other party is a provider of last resort;
(9) the parties are entities entitled to the rights under and protections afforded by Sections 362, 546, 553, 556, 560, 561, and 562 of the Bankruptcy Code; and
(10) nothing herein shall be deemed to limit, exclude or otherwise impair any party’s rights under the Bankruptcy Code as relating to forward contracts, forward agreements, master netting agreements, or swap agreements. (o) Recordings. Unless a party expressly objects to a Recording (defined below) at the beginning of a telephone conversation, each party consents to the creation of a tape or electronic recording (“Recording”) of all telephone conversations between the parties to this Agreement, and that any such Recordings will be retained in confidence and secured from improper access; provided, however, that both parties acknowledge and agree that any such Recording may not be submitted as evidence in any Proceeding or action related to this Agreement. Each party waives any further notice of such monitoring or recording, and agrees to notify its officers and employees of such monitoring or recording and to obtain any necessary consent of such officers and employees. (p) Amendments.
(i) Section 2(a)(iii) is amended to remove the phrase “or Potential Event of Default” therefrom.
(ii) Section 3(b) is amended to remove the phrase “or Potential Event of Default” therefrom.
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(iii) Section 5(a)(i) is amended to replace the phrase “the first Local Business Day in the case of any such payment or the first Local Delivery Day in the case of any such delivery after, in each case,” with the phrase “the thirtieth (30th) day after”. (iv) Section 5(a)(iv) is amended by adding the phrase “and such misrepresentation is not remedied within thirty (30) days after notice thereof”. (v) Section 9(b) is amended to remove the words “or confirmed by an exchange of telexes or by an exchange of electronic messages on an electronic messaging system”. (vi) Section 9(h)(i)(3) is amended to remove the phrase “or Potential Event of Default” therefrom.
Part 5. Other Provisions.
(a) Limitation of Liability. NO PARTY SHALL BE REQUIRED TO PAY OR BE
LIABLE FOR INCIDENTAL, CONSEQUENTIAL, OR INDIRECT DAMAGES (WHETHER OR NOT ARISING FROM ITS NEGLIGENCE) TO ANY OTHER PARTY; PROVIDED, HOWEVER, THAT NOTHING IN THIS PROVISION SHALL AFFECT THE ENFORCEABILITY OF SECTION 6(e) OF THIS AGREEMENT. IF AND TO THE EXTENT ANY PAYMENT REQUIRED TO BE
MADE PURSUANT TO THIS AGREEMENT IS DEEMED TO CONSTITUTE
LIQUIDATED DAMAGES, THE PARTIES ACKNOWLEDGE AND AGREE
THAT SUCH DAMAGES ARE DIFFICULT OR IMPOSSIBLE TO DETERMINE
AND THAT SUCH PAYMENT IS INTENDED TO BE A REASONABLE
APPROXIMATION OF THE AMOUNT OF SUCH DAMAGES AND NOT A
PENALTY.
(b) ISDA Definitions. This Agreement is subject to the 2021 ISDA Interest Rate Definitions (the “Swap Definitions”), as published by the International Swaps and Derivatives Association, Inc. (“ISDA”), and the 2005 ISDA Commodity Definitions, as published by ISDA, as amended and supplemented from time to time (the “Commodity Definitions”) and will be governed in all respects by the Swap Definitions and the Commodity Definitions. The Swap Definitions and the Commodity Definitions are incorporated by reference in, and made part of, this Agreement and each Confirmation for a Transaction in respect of one of more Commodities (each a “Commodity Transaction”), as applicable, as if set forth in full in this Agreement and such Confirmations. (c) Inconsistency. In the event of any inconsistency between any of the following, the relevant item first listed below shall govern: (i) a mutually executed Confirmation; (ii) the Schedule; (iii) the Commodity Definitions, (iv) the Swap Definitions; and (v) the printed form of ISDA Master Agreement. In the event of any inconsistency between provisions contained in the Swap Definitions and the Commodity Definitions, the Commodity Definitions shall prevail.
(d) Counterparts and Confirmations. The provisions of Section 9(e) of this Agreement shall be deleted and replaced in its entirety with the following:
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“(i) This Agreement (and each amendment, modification, and waiver in respect of it) may be executed and delivered in counterparts (including delivery by electronic exchange), each of which will be deemed an original. In no case may a Confirmation be deemed accepted, executed or delivered by an exchange of electronic instant messages on an electronic messaging system nor by an exchange of e-mails unless such electronic exchange contains a counterpart of such Confirmation bearing manual signatures and/or electronic signatures of the parties.
(ii) The parties are legally bound by the terms of each Transaction once the parties agree to such terms and have documented such agreement in a written Confirmation signed by and delivered to both parties. No oral agreement will be binding on the parties until such agreement has been documented by the exchange of a Confirmation signed by both parties. (iii) For purposes hereof, the meaning of the words “executed” or “signed” shall include counterparts of documents with images (including, without limitation, pdf, tif, or jpg format) of manually executed signatures and electronic signatures (including, without limitation, DocuSign or any similar electronic signature platform designed to ensure the integrity, authenticity, authorship and legal validity of the documents signed through such platform) transmitted by an exchange of electronic messages, which shall have the same legal, valid, enforceable, and binding effect as a manually executed “wet” signature or use of a paper-based record keeping system to the full extent permitted by applicable law.” (e) Confidentiality. The contents of this Agreement and all other documents relating to this Agreement, and any information made available by one party or its Credit Support Provider to the other party or its Credit Support Provider with respect to this Agreement is confidential and shall not be disclosed to any third party, except for such information (i) as may become generally available to the public other than due to breach of this clause (d), (ii) as may be required or appropriate in response to any summons, subpoena, or otherwise in connection with any litigation or to comply with any applicable law, order, regulation, ruling, or accounting disclosure rule or standard, (iii) as may be obtained from a non-confidential source that disclosed such information in a manner that did not violate its obligations to the non-disclosing party or its Credit Support Provider in making such disclosure, (iv) as is disclosed to regulators, other governmental authorities or examiners or (v) as may be furnished to the receiving party and to its Affiliates, and to each of their respective auditors, attorneys, advisors, investors, capital providers, hedging counterparties or lenders which are obligated to keep the information that is disclosed in confidence and provided, further, that a party may disclose any one or more of the commercial terms of a Transaction (other than the name of the other party unless otherwise agreed to in writing by the parties) to any industry price source for the purpose of aggregating and reporting such information in the form of a published energy price index. Each of the parties shall be entitled to all remedies available at law or in equity to enforce, or seek relief in connection with, this confidentiality obligation. This confidentiality provision is in addition to, and not in substitution for, any other written assurances of non-disclosure between the parties. With respect to information provided with respect to a Transaction, this obligation shall survive for a period of five (5) years following the expiration or termination of such Transaction. With respect to information made available pursuant to this Agreement, this obligation shall survive for a period of five (5) years following the Attachment Staff Report Item 11G
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delivery of such information. With respect to the contents of this Agreement, this obligation shall survive for a period of five (5) years following the expiration or termination of this Agreement.
Party A and Party B further acknowledge and agree that the Master Agreement and any Confirmations executed in connection therewith may be subject to the requirements of the California Public Records Act (Government Code Section 7920 et seq.) to the extent applicable to Party A. Each party acknowledges that the other party may submit information to that such other party considers confidential, proprietary, or trade secret information pursuant to the Uniform Trade Secrets Act (Cal. Civ. Code section 3426 et seq.) or its equivalent under the laws applicable to the parties hereto, or is otherwise protected from disclosure pursuant to an exemption to the California Public Records Act.
In order to designate information as confidential, the disclosing party (“Disclosing Party”) must clearly stamp and identify the specific portion of the material designated with the word “Confidential”. The parties agree not to over-designate material as confidential.
Over-designation would include stamping whole agreements, entire pages or series of pages as Confidential that clearly contain information that is not confidential. Upon request or demand of any third person or entity not a party to this Agreement (each, a “Requestor”) for production, inspection and/or copying of information designated by a party as confidential information (such designated information, the “Confidential Information”), the party receiving such request (the “Receiving Party”) as soon as practical, shall notify the Disclosing Party that such request has been made as specified in Section 12 of this Agreement. The Disclosing Party shall be solely responsible for taking whatever legal steps are necessary to protect information deemed by it to be Confidential Information and to prevent release of information to the Requestor by the Receiving Party.
If the Disclosing Party takes no such action after receiving the foregoing notice from the Receiving Party, the Receiving Party shall be permitted to comply with the Requestor’s demand and is not required to defend against it.
Notwithstanding anything to the contrary in this clause (d), Confidential Information may be disclosed by Party B to any actual or potential Financing Party or any of its Affiliates, and Party B’s actual or potential agents, advisors, actual or potential investors, consultants, contractors, or trustees, so long as such person or entity (other than a person or entity that has an ethical duty to Party B) to whom Confidential Information is disclosed agrees in writing to be bound by confidentiality provisions no less stringent than those in this clause (d) (subject to customary survival terms).
Neither party shall issue (or cause its Affiliates to issue) a press release regarding the transactions contemplated by this Agreement unless both parties have agreed upon the contents of any such public statement. A party’s consent shall not be unreasonably withheld, conditioned or delayed.
(f) Severability. If any one or more of the provisions contained in this Agreement should be held invalid, illegal, or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby. The parties shall endeavor in good faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of Attachment Staff Report Item 11G
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which comes as close as possible to that of the invalid, illegal or unenforceable provisions. (g) Transfer. The following amendments are hereby made to Section 7:
(i) in the third line, insert the words “which consent will not be arbitrarily or unreasonably withheld, conditioned or delayed,” immediately before the word “except”; (ii) in clause (a), insert the words “or reorganization, incorporation, reincorporation, or reconstitution into or as,” immediately before the word “another”; and (iii) add after clause (b) the following clauses (c) and (d):
“(c) Party B may assign or transfer or assign this Agreement to an Affiliate of such party so long as (x) such Affiliate’s creditworthiness is equal to or higher than that of such party, or (y) Party B either (1) notifies Party A in writing that Party B remains jointly and severally liable for the obligations of such Affiliate or (2) the obligations of such Affiliate are guaranteed by such party in accordance with a guaranty agreement in form and substance satisfactory to the other party.
(d) Notwithstanding anything to the contrary in the Agreement, Party B may collaterally assign this Agreement to a Financing Party. As used in this Agreement, “Financing Party” means, collectively, any person or entity (i) providing senior or subordinated construction, interim, back leverage and/or long-term debt, equity or tax equity financing or refinancing to Party B or its Affiliates, whether that financing or refinancing takes the form of private debt (including back-leverage debt), equity (including tax equity), public debt or any other form (including financing or refinancing provided to a member or other direct or indirect owner of Party B), including any equity or tax equity investor directly or indirectly providing financing or refinancing or purchasing equity ownership interests of Party A or its Affiliates, and any trustee or agent or similar representative acting on their behalf, (ii) providing interest rate or commodity protection under an agreement hedging or otherwise mitigating the cost of any of the foregoing obligations or (iii) participating in a lease financing (including a sale leaseback or leveraged leasing structure). In connection with any such collateral assignment, upon request of Party B, Party A shall in good faith work with Party B and the applicable Financing Party to agree upon a consent to collateral assignment of this Agreement (“Collateral Assignment Agreement”). The Collateral Assignment Agreement shall include the following provisions:
(1) Party A shall give written notice of an Event of Default by Party A to the person(s) to be specified by the Financing Party in the Collateral Assignment Agreement, before exercising its right to terminate this Agreement as a result of such Event of Default; provided that such notice shall be provided to the Financing Party at the time such notice is provided to Party B and the additional cure period of the Financing Party agreed to in the Collateral Assignment Agreement shall not commence until the Financing Party has received the written notice of such Event of Default;
(2) Following an Event of Default by Party B under this Agreement, Party A Attachment Staff Report Item 11G
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may require Party B or the Financing Party to provide to Party A a report concerning:
(A) The status of efforts by Party B or the Financing Party to develop a plan to cure the Event of Default;
(B) Impediments to the cure plan or its development;
(C) If a cure plan has been adopted, the status of the cure plan’s implementation (including any modifications to the plan as well as the expected timeframe within which any cure is expected to be implemented);
(D) Any other information which Party A may reasonably require related to the development, implementation and timetable of the cure plan; and (E) Party B or the Financing Party must provide the report to Party A within ten (10) Business Days after notice from Party A requesting the report. Party A will have no further right to require the report with respect to a particular Event of Default after that Event of Default has been cured; (3) The Financing Party will have the right to cure an Event of Default on behalf of Party B, only if the Financing Party sends a written notice to Party A before the later of (i) the expiration of any cure period, and (ii) fifteen (15) Business Days after the Financing Party’s receipt of notice of such Event of Default from Party A, indicating Financing Party’s intention to cure. The Financing Party must remedy or cure the Event of Default within the cure period under this Agreement and any additional cure periods agreed in the Collateral Assignment Agreement, which shall not exceed a maximum of one hundred twenty (120) days (or one hundred eighty (180) days in the event of a bankruptcy of Party B, or any foreclosure or similar proceeding if required by the Financing Party to cure any Event of Default); (4) The Financing Party will have the right to consent before any termination of this Agreement which does not arise out of an Event of Default; (5) The Financing Party will receive prior written notice of and the right to approve material amendments to this Agreement, which approval will not be unreasonably withheld, delayed or conditioned;
(6) Subject to the Financing Party’s cure of any Party B Events of Defaults under the Agreement, if (i) the Agreement is rejected in Party B’s bankruptcy or otherwise terminated in connection therewith, the Financing Party shall have the right to elect within one hundred eighty (180) days after such rejection or termination, to cause Party A to enter into a replacement agreement with Party B having the same terms as this Agreement for the remaining term thereof, or (ii) if the Financing Party or its designee, directly or indirectly, takes possession of, or title to, this Agreement or any Transactions hereunder (including possession by a Attachment Staff Report Item 11G
DRAFT
receiver or title by foreclosure or deed in lieu of foreclosure) after any such rejection or termination of this Agreement, promptly after Party A’s written request, the Financing Party must itself or must cause its designee to promptly enter into a new agreement with Party A having the same terms as this Agreement for the remaining term thereof, provided that in the event a designee of the Financing Party, directly or indirectly, takes possession of, or title to, the this Agreement or any Transactions hereunder (including possession by a receiver or title by foreclosure or deed in lieu of foreclosure), such designee shall be approved by Party A, not to be unreasonably withheld, conditioned or delayed.
(7) In addition, Party A agrees to otherwise cooperate in a timely manner with the due diligence efforts of any such Financing Party and to deliver reasonable and customary estoppel certificates to the extent requested or required by a Financing Party from time to time.”
(h) Form of Agreement. The parties hereby agree that the text of the body of the Agreement is intended to be the printed form of 2002 ISDA Master Agreement as published and copyrighted by the International Swaps and Derivatives Association, Inc. (i) Incorporation of 2002 Master Agreement Protocol Terms. The parties agree that the definitions and provisions contained in Annexes 1 to and including 18 and Section 6 of the 2002 Master Agreement Protocol published by the International Swaps and Derivatives Association, Inc. on 15th July 2003 are incorporated into and apply to this Agreement.
References in those definitions and provisions to any “ISDA Master Agreement” will be deemed to be references to this Agreement and the term “the parties” as used therein shall be construed as referring to Party A and Party B.
(j) Termination of Agreement. If there are no Transactions (or any present or future payment obligations, contingent or otherwise, thereunder) outstanding under this Agreement, either party may, upon thirty (30) Local Business Days’ notice to the other, terminate this Agreement. Such termination shall not prejudice any rights or obligations that may have accrued prior to such termination.
(k) UCC Waiver. Each party agrees that notwithstanding any provisions of law relating to insecurity or adequate assurance of future performance or any similar right or claim, including without limitation Article 2-609 of the UCC, and further including without limitation any claim under common law or equity, the parties shall only be entitled to request adequate assurance, collateral, prepayment, credit support, or any amount as may be specifically and expressly provided in this Agreement, including any Confirmation.
Otherwise, each party hereby expressly waives any right to claim any credit support, collateral, prepayment, or other form of adequate assurance, collateral, prepayment, or credit support with respect to this Agreement or any Transaction hereunder. For purposes of the foregoing, UCC means the Uniform Commercial Code as adopted by the jurisdiction governing the parties and the Transactions. Section references are to the Model Uniform Commercial Code and are intended to correspond to the same substantive provisions contained in the specific codes adopted in the controlling jurisdictions, to the extent that section references differ.
Attachment Staff Report Item 11G
DRAFT
(l) Non-covered Transactions. Any and all transactions (including Specified Transactions and other transactions of a type that are similar to a Specified Transaction) executed by the parties subject to other master agreements (whether before or after the execution of this Agreement), together with all transactions agreed to by the parties prior to the effectiveness of this Agreement, are not Transactions hereunder and shall not be subject to the terms and conditions of this, unless otherwise agreed in writing by the parties in the definitive documentation governing such transactions.
Part 6. Additional Provisions with respect to Commodity Transactions. (a) The “Disruption Fallbacks” specified in Section 7.5(d) of the Commodity Definitions shall apply, provided that
(i) For purposes of this provision, in respect of “Fallback Reference Dealers” (a) the word “and” shall be inserted before Section 7.5(d)(i)(C); (b) each party will select and obtain quotes from two unaffiliated Fallback Reference Dealers; and (c) the parenthetical in 7.5(d)(i)(C) is deleted and replaced with “(which shall repeat if an adequate number of quotations are not provided within three (3) Business Days after “Negotiated Fallback” ceases its concurrent operation pursuant to subparagraph (iii)(B) below and after expiry of any subsequent three (3) Business Day period thereafter until a result is obtained pursuant to this section)”; and (ii) The words “and (D) “No Fault Termination”;” shall be deleted.
IN WITNESS WHEREOF, the parties have executed this document with effect from the date specified on the first page of this document.
AVA COMMUNITY ENERGY MRP PACIFICA MARKETING III LLC
By: By:
Name: Name:
Title: Title:
Attachment Staff Report Item 11G
Draft
CONFIRMATION
FINANCIAL HEDGE SETTLEMENT
COVER SHEET
(Thermal Resource)
This Financial Hedge Settlement Confirmation (“Confirmation”) is entered into by and between Ava Community Energy (formerly East Bay Community Energy Authority), a California joint powers authority (“Party A” or “Buyer”), and MRP Pacifica Marketing III LLC, a Delaware limited liability company (“Party B” or “Seller”), each individually a “Party” and together the “Parties,” dated as of [_____], 2025 (the “Effective Date”). This Confirmation constitutes a “Confirmation” as referred to in the 2002 ISDA Master Agreement and Schedule thereto, each dated March [_____], 2025, between the Parties, as amended from time to time (the “ISDA Master Agreement”), and is governed by, constitutes part of, and is subject to the terms and provisions of the ISDA Master Agreement. This Confirmation governs the terms for a financial settlement Transaction based on the value of the Hedge Contract Quantity (as set forth below), without any obligation for the physical delivery of energy or any other Product to Buyer (the “Transaction”).
The ISDA Master Agreement and this Confirmation, including any appendices, exhibits or amendments thereto, shall collectively be referred to herein as the “Agreement” and shall constitute a single agreement between the Parties with respect to the Transaction.
Calculation Agent: Party B
Hedge Contract Quantity: 100 MW
Contract Price: $
Settlement Point:
Heat Rate: ___ MMBtu/MWh
Variable O&M Rate: ___/MWh
Start Date: 1/1/2027
Start Fuel Quantity: (i) where the number of hours between a Shutdown Hour and the immediately following Start-Up Hour is less than or equal to eight (8) hours, the Start Fuel Quantity shall equal 333 MMBtu, (ii) where the number of hours between a Shutdown Hour and the immediately following Start-Up Hour is greater than eight (8) hours and less than or equal to twenty-five (25) hours, the Start Fuel Quantity shall equal 767 MMBtu, and (iii) where the number of hours between a Shutdown Hour and the immediately following Start-Up Hour is greater than twenty-five (25) hours, the Start Fuel Quantity shall equal 1,333 MMBtu.
Start-Up Payment: Start Charge + (Start Fuel Quantity × (Gas Index Price + Gas Transportation Charges + (GHG Price × GHG Conversion Rate)))
Settlement Term: Fifteen (15) years following the Start Date.
Attachment Staff Report 11H
2 Product: As this is a financially settled transaction, in no event shall Party B have any obligation to sell or deliver to Party A under this Transaction any product, commodity or attribute.
Performance Security:
Attachment Staff Report 11H
i
TABLE OF CONTENTS
[TOC to be incorporated] Page
Exhibits:
Exhibit A Notices
Exhibit B Notice of Fixed Price Power Conversion Order
Exhibit C Form of Fixed Price Power Conversion Agreement Exhibit D Form of Letter of Credit
Attachment Staff Report 11H
ARTICLE 1
DEFINITIONS
1.1 Contract Definitions. By this reference, the definitions set forth in the ISDA Master Agreement are hereby incorporated into this Confirmation. In addition, the following terms, when used herein with initial capitalization, shall have the meanings set forth below. In the event of a conflict between the ISDA Master Agreement and the defined terms herein, the defined terms in this Confirmation shall govern.
“Cap-and-Trade Cost Exemption Credit” has the meaning set forth in the CAISO Tariff. “Contract Price” has the meaning set forth on the Cover Sheet. “Contract Term” has the meaning set forth in Section 2.1 of this Confirmation. “Credit Rating” means, with respect to any entity, the rating then assigned to such entity’s unsecured, senior long-term debt obligations (not supported by third party credit enhancements) or if such entity does not have a rating for its senior unsecured long-term debt, then the rating then assigned to such entity as an issuer rating by S&P or Moody’s. If ratings by S&P and Moody’s are not equivalent, the lower rating shall apply.
“Day” or “Daily” means each calendar day starting at 00:00:00 and ending at 23:59:59. “Day-Ahead” has the meaning set forth in the CAISO Tariff. “Day-Ahead Market” has the meaning set forth in the CAISO Tariff. “Day-Ahead Price” means the CAISO Day-Ahead Market Locational Marginal Price in each applicable Settlement Period (including the energy, congestion, and losses components) at the Settlement Point.
“Daily Exercise Price” means either (i) the following sum, which is calculated on a cumulative basis each Day for all Settlement Periods:
(a) the Variable O&M Rate, plus
(b) the product of (1) the Heat Rate multiplied by (2) the sum of (A) the Gas Index Price, plus (B) the Gas Transportation Charges, plus (C) the product of (I) the GHG Conversion Rate multiplied by (II) the GHG Price;
or (ii) if established pursuant to Section 4.2 of this Confirmation, the Fixed Daily Exercise Price.
“Hedge Contract Quantity” has the meaning set forth on the Cover Sheet. “Hedge Settlement” has the meaning set forth in Section 4.1(a) of this Confirmation. “Hedge Settlement Quantity” means (i) with respect to an ON-Settlement Period, 100 MW and (ii) with respect to an OFF-Settlement Period, 0 MW.
Attachment Staff Report 11H
2 “ES Payment” has the meaning set forth in Section 4.1(a) of this Confirmation. “Fixed Daily Exercise Price” means the Daily Exercise Price that has been fixed pursuant to Section 4.2 of this Confirmation.
“Fixed Price Agreement” has the meaning set forth in Exhibit C. “Fixed Price Hours” means the specific set of hours per Day during which the Fixed Daily Exercise Price applies, which shall be considered ON-Settlement Period hours, which shall not be less than two (2) consecutive hours over a period of not less than one (1) month and such Daily hours shall be the same for each day of the applicable month. “Fixed Price Notice” has the meaning set forth in Exhibit B. “Force Majeure Event” has the meaning set forth in Section 6.1(a) of this Confirmation. “Gas Index Price” means the price (in $/MMBtu) of natural gas for delivery on the applicable Day, as determined by Seller, of the Settlement Term, as published in the table entitled “Final Daily Price Survey ($/MMBtu)” for “PG&E City-Gate” under the heading “Midpoint” by S&P Global Platts Gas Daily, or if not published therein, upon mutual agreement of the Parties. “Gas Transportation Charges” means the PG&E Gas Schedule G-EG (Gas Transportation Service to Electric Generation) Backbone Level rate with the Cap-and-Trade Cost Exemption Credit, which Seller may revise within its reasonable discretion and as of the Effective Date, shall be ($2.2964 - $1.9678)/MMBtu = $0.3286/MMBtu. “GHG Conversion Rate” means 0.05302 metric tons of CO2e per MMBtu. “GHG Price” means the Greenhouse Gas Allowance Price.
“Greenhouse Gas Allowance Price” has the meaning set forth in the CAISO Tariff. “Heat Rate” has the meaning set forth on the Cover Sheet. “Interest Rate” means the 3-month prime rate (or any equivalent successor rate accepted by a majority of major financial institutions) published on the date of the invoice in The Wall Street Journal (or, if The Wall Street Journal is not published on that day, the next succeeding date of publication), plus two percent (2%).
“Letter(s) of Credit” means one or more irrevocable, standby letters of credit issued by a U.S. commercial bank, or U.S. branch of a foreign bank, with such bank having a Credit Rating of at least A- with an outlook designation of “stable” from S&P or A3 with an outlook designation of “stable” from Moody’s, in a form substantially similar to the letter of credit set forth in Exhibit D.
“Locational Marginal Price” has the meaning set forth in the CAISO Tariff. “MMBtu” means millions of British thermal units.
Attachment Staff Report 11H
3 “Monthly Product Payment” has the meaning set forth in Section 4.1(c) of this Confirmation.
“Monthly Settlement Amount” has the meaning set forth in Section 4.1(c) of this Confirmation.
“Monthly Settlement Payment” has the meaning set forth in Section 4.1(c) of this Confirmation.
“Moody’s” means Moody’s Investors Service, Inc.
“MWh” means megawatt-hour measured in alternating current, unless expressly stated in terms of direct current.
“OFF-Settlement Period” has the meaning set forth in Section 4.1(b) of this Confirmation.
“ON-Settlement Period” has the meaning set forth in Section 4.1(b) of this Confirmation. “Performance Security” means (i) cash, (ii) a Letter of Credit or (iii) guaranty in form and substance acceptable to Buyer, acting reasonably and in good faith, in each case in the amount set forth on the Cover Sheet for “Performance Security”. “Pricing Period” means a period of consecutive Settlement Periods commencing with a Start-Up Hour and ending with a Shutdown Hour.
“Product” has the meaning set forth on the Cover Sheet. “S&P” means the Standard & Poor’s Financial Services, LLC (a subsidiary of The McGraw-Hill Companies, Inc.).
“Seller” has the meaning set forth on the Cover Sheet.
“Settlement Period” has the meaning set forth in the CAISO Tariff. “Settlement Point” has the meaning set forth on the Cover Sheet. “Settlement Term” has the meaning set forth on the Cover Sheet. “Shutdown Hour” means the last Settlement Period within a Pricing Period designated as an ON-Settlement Period.
“Start Charge” has the meaning set forth on the Cover Sheet. “Start Date” has the meaning set forth on the Cover Sheet. “Start Fuel Quantity” has the meaning set forth on the Cover Sheet.
Attachment Staff Report 11H
4 “Start-Up Hour” means the first ON-Settlement Period that immediately follows an OFF-Settlement Period; provided, however, that a Start-Up Hour (i) shall not be any Settlement Period that is less than two (2) hours following the immediately preceding Shutdown Hour, and (ii) must be followed by at least one (1) additional ON-Settlement Period. “Start-Up Payment” has the meaning set forth on the Cover Sheet. “Transaction” has the meaning set forth in the ISDA Master Agreement. “Variable O&M Rate” has the meaning set forth on the Cover Sheet.
ARTICLE 2
TERM
2.1 Contract Term.
(a) The term of this Transaction shall commence on the Effective Date and shall remain in full force and effect until the conclusion of the Settlement Term, provided that this Confirmation shall thereafter remain in effect until the Parties have fulfilled all obligations arising under this Confirmation, including any ES Payments during the Settlement Term, subject to any early termination provisions and any contract term extension provisions set forth in this Confirmation (“Contract Term”).
(b) Applicable provisions of this Confirmation shall continue in effect after termination, including early termination, to the extent necessary to enforce or complete the duties, obligations or responsibilities of the Parties arising prior to termination. The confidentiality obligations of the Parties under Part 5[(e)] of the Schedule and all indemnity and audit rights shall remain in full force and effect for five (5) years following the last day of the Contract Term.
ARTICLE 3
PERFORMANCE SECURITY
3.1 Seller’s Performance Security.
(a) To secure its obligations under this Confirmation, Seller shall deliver Performance Security to Buyer within thirty (30) days of the Effective Date. Seller shall maintain the Performance Security in full force and effect, and Seller shall within ten (10) Business Days after any draw thereon replenish the Performance Security in the event Buyer properly collects or draws down any portion of the Performance Security for any reason permitted under this Confirmation, until the following have occurred: (A) the Contract Term has expired or terminated early; and (B) all payment obligations of the Seller then due and payable under this Confirmation (other than indemnities and other contingent obligations not then due and payable with respect to which a claim has not been made), including compensation for penalties, Early Termination Amount, indemnification payments or other damages are paid in full (whether directly or indirectly such as through set-off or netting). Following the occurrence of both events, Buyer shall promptly return to Seller the unused portion of the Performance Security. If the Performance Security is a Letter of Credit and the issuer of such Letter of Credit (i) fails to maintain the minimum Credit Rating set forth in the definition of Letter of Credit, (ii) indicates its intent not to renew such Letter Attachment Staff Report 11H
5 of Credit and such Letter of Credit expires without being renewed prior to the end of the Contract Term, or (iii) fails to honor Buyer’s properly documented request to draw on such Letter of Credit by such issuer, Seller shall have ten (10) Business Days to either post cash or deliver a substitute Letter of Credit that meets the requirements set forth in the definition of Performance Security. (b) To secure its obligations under this Confirmation, and until released as provided herein, Seller hereby grants to Buyer a present and continuing first-priority security interest in, and lien on (and right to net against), and assignment of the Performance Security to the extent provided in the form of cash, and any other cash collateral and cash equivalent collateral posted pursuant to Section 3.1(a) of this Confirmation and any and all interest thereon or proceeds resulting therefrom or from the liquidation thereof, whether now or hereafter held by, on behalf of, or for the benefit of Buyer, and Seller agrees to take all action as Buyer reasonably requires in order to perfect Buyer’s security interest granted under this Section 3.1(b) in, and lien on (and right to net against), such collateral and any and all proceeds resulting therefrom or from the liquidation thereof.
3.2 Use of Financial Security. Upon or any time after the occurrence of an Event of Default caused by Seller, an Early Termination Date resulting from an Event of Default caused by Seller, or an occasion provided for in this Confirmation where Buyer is authorized to retain all or a portion of the Performance Security provided by Seller, Buyer may do any one or more of the following (in each case subject to the final sentence of this Section 3.2):
(a) Exercise any of its rights and remedies with respect to the Performance Security, including any such rights and remedies under Law then in effect; (b) Draw on any outstanding Letter of Credit issued for its benefit and retain any cash held by Buyer as Performance Security; and
(c) Liquidate the applicable Performance Security then held by or for the benefit of Buyer free from any claim or right of any nature whatsoever of Seller, including any equity or right of purchase or redemption by Seller.
Buyer shall apply the proceeds of the collateral realized upon the exercise of any such rights or remedies to reduce the Seller’s obligations under this Confirmation and Seller shall remain liable for any amounts owing to Buyer after such application, subject to Buyer’s obligation to return any surplus proceeds remaining after these obligations are satisfied in full.
3.3 Limited Recourse. The Performance Security provided in connection with this Transaction is solely available to be used to satisfy Party B’s obligations under this Transaction and not any other Transactions under the Agreement, and only to the extent of Party B’s liabilities under this Confirmation. Party A’s sole and exclusive recourse for any breach of the Agreement with respect to this Transaction by Party B, its Credit Support Provider or any applicable Specified Entity of Party B and any liabilities of Party B with respect thereto shall be against the Performance Security, and Party B’s liability under this Transaction, will not exceed, in the aggregate, an amount equal to the Performance Security then available to Party A at such time. Without limiting the generality of the foregoing, under no circumstance shall any Financing Party or its successor(s), assignee(s) and/or designee(s), be deemed to have assumed any of the obligations or liabilities of Attachment Staff Report 11H
6 this Agreement solely by virtue of having undertaken to cure a default, notwithstanding such action may prove to be in whole, or in part, inadequate or invalid, and the sole recourse of Party A against any such Financing Party, successor, assignee and/or designee in seeking enforcement of the obligations of Party B under the Agreement, shall be limited to the interest of such Financing Party, successor, assignee and/or designee in the Performance Security.
ARTICLE 4
HEDGE SETTLEMENT
4.1 Hedge Financial Settlement.
(a) Subject to the terms and conditions of this Confirmation, for each Day during the Settlement Term, Seller shall calculate, on a monthly basis, financial settlements with respect to the Hedge Contract Quantity (the “Hedge Settlement”) based on the Day-Ahead hourly energy margin for the applicable Settlement Period, the full price calculation associated with which is set forth below (the “ES Payment”):
ES Payment = ∑ 𝐻𝐸𝑀𝑖
𝑛
𝑖=1
[− Start-Up Payment]*
* bracketed language applies to any Start-Up Hour
Σ = the sum from i=1 to n, and n = the number of hours in month m HEMi = (Day-Ahead Price – Daily Exercise Price) × Hedge Settlement Quantity (b) Following each month during the Settlement Term, Buyer shall provide Notice to Seller on or before the fifth (5th) day of the month in a form reasonably acceptable to each Party designating each Settlement Period during the prior month as either “ON” (each, an “ON-Settlement Period”) or “OFF” (each, an “Off-Settlement Period”); provided, however, that each Settlement Period designated as an ON-Settlement Period must be consecutive to at least one other Settlement Period that is designated as an ON-Settlement Period (other than a Start-Up Hour).
(c) For each month during the Settlement Term, Buyer shall pay to Seller an amount equal to the product of (i) the Hedge Contract Quantity multiplied by (ii) the Contract Price (the “Monthly Product Payment”).
(d) For each month during the Settlement Term, Seller shall calculate an amount (the “Monthly Settlement Amount”) equal to (i) the Monthly Product Payment minus (ii) the ES Payment. If the Monthly Settlement Amount is positive, Buyer shall remit payment to Seller, and if the Monthly Settlement Amount is negative, Seller shall remit payment to Buyer for such amount, (the “Monthly Settlement Payment”), in each case paid in accordance with Section
5.2 of this Confirmation. If the Monthly Settlement Amount equals zero, no amount shall be payable by either Party.
Attachment Staff Report 11H
7 4.2 Fixed Price Power Conversion. No less than sixty (60) days prior to any month, Buyer may provide a Fixed Price Notice to Seller, requesting the Daily Exercise Price to become the Fixed Daily Exercise Price during the Fixed Price Hours as specified in the Fixed Price Notice.
For any Day that the Fixed Daily Exercise Price is applicable, the Daily Exercise Price shall apply for any ON-Settlement Period hours that are not Fixed Price Hours. Within five (5) Business Days of receiving the Fixed Price Notice, Seller shall provide a Fixed Price Agreement, in substantially the form set forth in Exhibit C, which shall include the Gas Index Price, the Gas Transportation Charges and the GHG Price to be used for the calculation of the Fixed Daily Exercise Price during the term specified in the Fixed Price Notice. Within one (1) Business Day of receipt the Fixed Price Agreement, Buyer shall either (a) reject in writing the Fixed Price Agreement, or (b) countersign the Fixed Price Agreement. The Fixed Daily Exercise Price shall become effective upon Buyer’s countersignature and shall apply during the Fixed Price Hours as specified in the Fixed Price Notice.
ARTICLE 5
INVOICING AND PAYMENT; CREDIT
5.1 Statements and Invoicing. Commencing in the first month of the Settlement Term, Seller shall deliver an invoice to Buyer on or before the tenth (10th) day of each month. Each invoice shall be in a format reasonably acceptable to Buyer, covering the preceding month of the Settlement Term determined in accordance with the applicable provisions of this Confirmation.
The invoice shall be delivered by electronic mail in accordance with Exhibit A.
5.2 Payments. Each month in which Seller submits an invoice to Buyer, the Party owing the Monthly Settlement Payment shall make such payment (and any other amounts due and owing pursuant to this Confirmation) to the other Party, by wire transfer or ACH payment to the bank account provided by such Party. Any Party owing an amount to the other Party shall pay the undisputed amounts by the later of (a) ten (10) Business Days after such Party’s receipt of the invoice from the other Party, and (b) the last day of the month after the month for which such invoice was rendered; provided, if such due date falls on a weekend or legal holiday, such due date shall be the next Business Day. Payments made after the due date will be considered late and will bear interest on the unpaid balance. If the amount due is not paid on or before the due date or if any other payment that is due and owing from one Party to another is not paid on or before its applicable due date, a late payment charge shall be applied to the unpaid balance and shall be added to the next billing statement. Such late payment charge shall be calculated based on the Interest Rate. If the due date occurs on a day that is not a Business Day, the late payment charge shall begin to accrue on the next succeeding Business Day.
5.3 Invoice Adjustments. Invoice adjustments shall be made if (a) there have been good faith inaccuracies in invoicing or payment that are not otherwise disputed, (b) an adjustment to an amount previously invoiced or paid is required due to a correction of data by the CAISO. If the required adjustment is in favor of Buyer, Buyer’s next monthly payment shall be credited in an amount equal to the adjustment. If the required adjustment is in favor of Seller, Seller shall add the adjustment amount to Buyer’s next monthly invoice. Unless otherwise agreed by the Parties, no adjustment of invoices shall be permitted after twelve (12) months from the date of the invoice.
Attachment Staff Report 11H
8 ARTICLE 6
FORCE MAJEURE
6.1 Definition.
(a) “Force Majeure Event” means any act or event that delays or prevents a Party from timely performing all or a portion of its obligations under this Confirmation or from complying with all or a portion of the conditions under this Confirmation if such act or event, despite the exercise of reasonable efforts, cannot be avoided by and is beyond the reasonable control (whether direct or indirect) of and without the fault or negligence of the Party relying thereon as justification for such delay, nonperformance, or noncompliance. (b) Without limiting the generality of the foregoing, so long as the following events, despite the exercise of reasonable efforts, cannot be avoided by, and are beyond the reasonable control (whether direct or indirect) of and without the fault or negligence of the Party relying thereon as justification for such delay, nonperformance or noncompliance, a Force Majeure Event may include an act of God or the elements, such as flooding, lightning, hurricanes, tornadoes, or ice storms; explosion; fire; volcanic eruption; flood; landslide; mudslide; sabotage; terrorism; earthquake; or other cataclysmic events; an act of public enemy; war; blockade; civil insurrection; riot; civil disturbance; epidemic; pandemic; or strikes or other labor difficulties caused or suffered by a Party or any third party except as set forth below. (c) Notwithstanding the foregoing, the term “Force Majeure Event” does not include (i) economic conditions that render a Party’s performance of this Confirmation unprofitable or otherwise uneconomic (including an increase in component costs for any reason, including foreign or domestic tariffs, or Buyer or Seller’s ability to enter into a financial settlement at a more favorable price than under this Confirmation); or (ii) the inability of a Party to make payments when due under this Agreement, unless such inability is the direct result of a Force Majeure Event.
6.2 Termination Following Force Majeure Event. If a Force Majeure Event has occurred after the Start Date that has caused either Party to be wholly or partially unable to perform its obligations hereunder, and the impacted Party has claimed and received relief from performance of its obligations for a consecutive twelve (12) month period, then either Party may terminate this Transaction upon written notice to the other Party. Upon any such termination, neither Party shall have any liability to the other Party, save and except for those obligations specified in Section
2.1(b) of this Confirmation. Notwithstanding the foregoing, the occurrence and continuation of a Force Majeure Event shall not suspend or excuse the obligation of a Party to make any payments due hereunder.
6.3 Notice for Force Majeure. Within two (2) Business Days of the Party becoming aware of that a Force Majeure Event will impact the Party’s performance under this Confirmation, the claiming Party shall provide the other Party with oral notice of the Force Majeure Event, and within two (2) weeks thereafter the claiming Party shall provide the other Party with notice in the form of a letter describing in detail the occurrence giving rise to the Force Majeure Event, including the nature, cause, estimated date of commencement thereof, and the anticipated extent of any delay or interruption in performance. Failure to provide timely notice shall not constitute a Attachment Staff Report 11H
9 waiver of the Force Majeure Event, but the relief granted shall be based on the date notice is provided rather than the date of the Force Majeure Event. Upon written request from Buyer, Seller shall provide documentation demonstrating to Buyer’s reasonable satisfaction that each day of the claimed delay was the result of a Force Majeure Event and did not result from Seller’s actions or failure to exercise due diligence or take reasonable actions. The claiming Party shall promptly notify the other Party in writing of the cessation or termination of such Force Majeure Event, all as known or estimated in good faith by the affected Party. The suspension of performance due to a claim of a Force Majeure Event must be of no greater scope and of no longer duration than is required by the Force Majeure Event.
6.4 Section 5(b)(vi) of the Master Agreement (Force Majeure Event) shall not apply to this Transaction.
[Signatures on following page]
Attachment Staff Report 11H
10 IN WITNESS WHEREOF, the Parties have caused this Confirmation to be duly executed as of the Effective Date.
MRP PACIFICA MARKETING III LLC,
a Delaware limited liability company
By:
Name:
Title:
AVA COMMUNITY ENERGY, a California
joint powers authority
By:
Name:
Title:
APPROVED AS TO FORM:
Attachment Staff Report 11H
Exhibit A-1
EXHIBIT A
NOTICES
MRP Pacifica Marketing III LLC Ava Community Energy
All Notices:
Street:
City:
Attn:
Phone:
Email:
All Notices:
Attn:
Phone:
Email:
Reference Numbers:
Federal Tax ID Number:
Reference Numbers:
Duns:
Federal Tax ID Number:
Invoices:
Attn: Accounts Payable
Phone:
Email:
Invoices:
Attn: Phone:
Email:
Scheduling:
Attn:
Phone:
Email:
Scheduling:
Attn:
Phone:
Email:
Confirmations:
Attn:
Phone:
Email:
Confirmations:
Attn:
Phone:
Email:
Payments:
Attn: Accounts Payable
Phone:
Email:
Payments:
Attn:
Phone:
Email:
Wire Transfer:
BNK:
ABA:
ACCT:
Wire Transfer:
BNK:
ABA:
ACCT:
Attachment Staff Report 11H
Exhibit A-2
MRP Pacifica Marketing III LLC Ava Community Energy
Credit and Collections:
Attn:
Email:
Phone:
Credit and Collections:
Attn: Phone:
Email:
Emergency Contact:
Attn:
Phone:
Email:
Emergency Contact:
Attn: Phone:
Email:
Attachment Staff Report 11H
Exhibit B-1
EXHIBIT B
FORM OF NOTICE OF FIXED PRICE POWER CONVERSION ORDER
This NOTICE OF FIXED PRICE POWER CONVERSION ORDER (“Fixed Price Notice”) is delivered by Ava Community Energy, to MRP Pacifica Marketing III LLC in accordance with the terms of that certain Confirmation – Financial Settlement Cover Sheet (Thermal Resource) by and between Ava Community Energy, as Buyer, and MRP Pacifica Marketing III LLC, as Seller, dated as of [ ____] (the “Confirmation”). All capitalized terms used in this Fixed Price Notice but not otherwise defined herein shall have the respective meanings assigned to such terms in the Confirmation.
Pursuant to Section 4.2 of the Confirmation, Buyer elects a Fixed Price Power Conversion Order as follows:
Start Date: [Specify the first day of a calendar month] End Date: [Specify the last day of a calendar month]
First Start-Up Hour: [Specify the Settlement Period each Day for the first Pricing Period to commence. Must be no less than two (2) hours after the immediately preceding Shutdown Hour.]
First Shutdown Hour: [Specify the Settlement Period each Day for the first Pricing Period to end. Must be no less than two (2) hours after the first Start-Up Hour of each Day.] Second Start-Up Hour: [Specify the Settlement Period each Day for the second Pricing Period to commence. Must be no less than two (2) hours after the immediately preceding Shutdown Hour.]
Second Shutdown Hour: [Specify the Settlement Period each Day for the second Pricing Period to end. Must be no less than two (2) hours after the second Start-Up Hour of each Day.]
Buyer has caused this Fixed Price Notice to be duly executed and delivered by a duly authorized representative on the date written below.
AVA COMMUNITY ENERGY, a California joint powers authority By:
Name:
Title:
Date:
Attachment Staff Report 11H
Exhibit C-1
EXHIBIT C
FORM OF FIXED PRICE POWER CONVERSION AGREEMENT
This FIXED PRICE POWER CONVERSION AGREEMENT (“Fixed Price Agreement”) is delivered by MRP Pacifica Marketing III LLC to Ava Community Energy (formerly East Bay Community Energy Authority), a California joint powers authority, in accordance with the terms of that certain Confirmation – Financial Settlement Cover Sheet (Thermal Resource) by and between Ava Community Energy, as Buyer, and MRP Pacifica Marketing III LLC, as Seller, dated as of [ ____] (the “Confirmation”). All capitalized terms used in this Response to the Fixed Price Notice but not otherwise defined herein shall have the respective meanings assigned to such terms in the Confirmation.
Pursuant to Section 4.2 of the Confirmation and Buyer’s Fixed Price Notice dated [ ____] for the period commencing [Start Date] and ending [End Date] (the “Fixed Price Period”), the Parties agree to fix the amount of the Gas Index Price, Gas Transportation Charges and GHG Price during the Fixed Price Period as follows:
Gas Index Price:
Gas Transportation Charges:
GHG Price:
Seller has caused this Fixed Price Agreement to be duly executed and delivered by a duly authorized representative of Seller on the date written below.
MRP PACIFICA MARKETING III LLC
By:
Name:
Title:
Date:
Attachment Staff Report 11H
Exhibit C-1
Buyer accepts and agrees to the Fixed Price Agreement, which has been duly executed and delivered by an authorized representative of Buyer on the date written below.
AVA COMMUNITY ENERGY, a California joint
powers authority
By: ________________________________________
Name: ______________________________________
Title: _______________________________________
Date: _______________________________________
Attachment Staff Report 11H
Exhibit D - 1
EXHIBIT D
FORM OF LETTER OF CREDIT
[Issuing Bank Letterhead and Address]
IRREVOCABLE STANDBY LETTER OF CREDIT NO. [XXXXXXX]
Date:
Bank Ref.:
Amount: US$[XXXXXXXX]
Expiration Date:
Beneficiary:
Ava Community Energy
[Address]
[Address]
Attn: Chief Financial Officer
Ladies and Gentlemen:
By the order of [________________] (“Applicant”), we, [insert bank name and address] (“Issuer”) hereby issue our Irrevocable Standby Letter of Credit No. [XXXXXXX] (the “Letter of Credit”) in favor of Ava Community Energy, a California joint powers authority (“Beneficiary”), for an amount not to exceed the aggregate sum of U.S. $[XXXXXX] (United States Dollars [XXXXX] and 00/100), pursuant to that certain Dispatchable Energy and Energy Storage Agreement dated as of ______ and as amended (the “Agreement”) between Applicant and Beneficiary. This Letter of Credit shall become effective immediately and shall expire on [Insert Date] which is one year after the issue date of this Letter of Credit, or any expiration date extended in accordance with the terms hereof (the “Expiration Date”).
Funds under this Letter of Credit are available to Beneficiary by valid presentation on or before the Expiration Date of a dated statement purportedly signed by your duly authorized representative, in the form attached hereto as Exhibit A, containing one of the two alternative paragraphs set forth in paragraph 2 therein, referencing our Letter of Credit No. [XXXXXXX] (“Drawing Certificate”).
The Drawing Certificate may be presented by (a) physical delivery, (b) as a PDF attachment to an e-mail to [bank email address] or (c) facsimile to [bank fax number] confirmed by [e-mail to [bank email address]]. Transmittal by facsimile or email shall be deemed delivered when received.
The original of this Letter of Credit (and all amendments, if any) is not required to be presented in connection with any presentment of a Drawing Certificate by Beneficiary hereunder in order to receive payment.
We hereby agree with the Beneficiary that all documents presented under and in compliance with the terms of this Letter of Credit will be duly honored upon presentation to the Issuer on or before Attachment Staff Report 11H
Exhibit D - 2
the Expiration Date. All payments made under this Letter of Credit shall be made with Issuer’s own immediately available funds by means of wire transfer in immediately available United States dollars to Beneficiary’s account as indicated by Beneficiary in its Drawing Certificate or in a communication accompanying its Drawing Certificate.
Partial draws are permitted under this Letter of Credit, and this Letter of Credit shall remain in full force and effect with respect to any continuing balance.
It is a condition of this Letter of Credit that the Expiration Date shall be deemed automatically extended without an amendment for a one year period beginning on the present Expiration Date hereof and upon each anniversary for such date, unless at least one hundred twenty (120) days prior to any such Expiration Date we have sent to you written notice by overnight courier service that we elect not to extend this Letter of Credit, in which case it will expire on the date on the then current Expiration Date, or such later date as may be specified in such notice. No presentation made under this Letter of Credit after such Expiration Date (as may be extended in such notice) will be honored.
This Letter of Credit is issued subject to the rules of the ‘International Standby Practices 1998’, International Chamber of Commerce Publication No. 590 (“ISP98”) and, as to matters not addressed by ISP98, shall be governed and construed in accordance with the laws of state of California.
Notwithstanding any reference in this Letter of Credit to any other documents, instruments or agreements (other than as set forth in the immediately prior paragraph), this Letter of Credit contains the entire agreement between Beneficiary and Issuer relating to the obligations of Issuer hereunder.
Please address all correspondence regarding this Letter of Credit to the attention of the Letter of Credit Department at [insert bank address information], referring specifically to Issuer’s Letter of Credit No. [XXXXXXX]. For telephone assistance, please contact Issuer’s Standby Letter of Credit Department at [XXX-XXX-XXXX] and have this Letter of Credit available.
All notices to Beneficiary shall be in writing and are required to be sent by certified letter, overnight courier, or delivered in person to: Ava Community Energy, Attn: Chief Financial Officer, 70 Garden Court, Suite 300, Monterey, CA 93940. Only notices to Beneficiary meeting the requirements of this paragraph shall be considered valid. Any notice to Beneficiary which is not in accordance with this paragraph shall be void and of no force or effect. [Bank Name]
___________________
[Insert officer name]
[Insert officer title]
Attachment Staff Report 11H
Exhibit D-1
Exhibit A
Drawing Certificate
(DRAW REQUEST SHOULD BE ON BENEFICIARY’S LETTERHEAD)
[Insert Bank Name and Address]
Ladies and Gentlemen:
The undersigned, a duly authorized representative of Ava Community Energy, a California joint powers authority, 70 Garden Court, Suite 300, Monterey, CA 93940, as beneficiary (the “Beneficiary”) of the Irrevocable Letter of Credit No. [XXXXXXX] (the “Letter of Credit”) issued by [insert bank name] (the “Bank”) by order of [_________], a [________] (the “Applicant”), hereby certifies to the Bank as follows:
1. Applicant and Beneficiary are party to that certain Dispatchable Energy and Energy Storage Agreement dated as of ___________, 20__ (the “Agreement”).
2. Beneficiary is making a drawing under this Letter of Credit in the amount of U.S. $___________ because a Buyer Default (as such term is defined in the Agreement) has occurred or other occasion provided for in the Agreement where Beneficiary is authorized to draw on the Letter of Credit has occurred.
OR
Beneficiary is making a drawing under this Letter of Credit in the amount of U.S. $___________, which equals the full available amount under the Letter of Credit, because Applicant is required to maintain the Letter of Credit in force and effect beyond the Expiration Date of the Letter of Credit but has failed to provide Beneficiary with a replacement Letter of Credit or other acceptable instrument within thirty (30) days prior to such Expiration Date.
3. The undersigned is a duly authorized representative of Ava Community Energy and is authorized to execute and deliver this Drawing Certificate on behalf of Beneficiary.
You are hereby directed to make payment of the requested amount to Ava Community Energy by wire transfer in immediately available funds to the following account: [Specify account information]
Ava Community Energy
_______________________________
Name and Title of Authorized Representative
Date___________________________
Attachment Staff Report 11H