Agenda packet — Central Coast Community Energy (3CE) Operations Board, March 13, 2024 (part 2 of 4)

21 Version 2.1 (modified 4/25/00)
©COPYRIGHT 2000 by the Edison Electric Institute and National Energy Marketers Association IN WITNESS WHEREOF, the Parties have caused this Master Agreement to be duly executed as of the Effective Date.

CITIGROUP ENERGY INC. CENTRAL COAST COMMUNITY ENERGY,
a California joint powers authority
By:

Name: Jeffrey A. Gollomp
Title: Director
Approved as to form:

By:

Name:

Title:

By:

Name:

Title:

Approved as to form:

By:

Name:

Title:

DISCLAIMER: This Master Power Purchase and Sale Agreement was prepared by a committee of representatives of Edison Electric Institute (“EEI”) and National Energy Marketers Association (“NEM”) member companies to facilitate orderly trading in and development of wholesale power markets. Neither EEI nor NEM nor any member company nor any of their agents, representatives or attorneys shall be responsible for its use, or any damages resulting therefrom. By providing this Agreement EEI and NEM do not offer legal advice and all users are urged to consult their own legal counsel to ensure that their commercial objectives will be achieved and their legal interests are adequately protected.

Page 102 of 438 ends

GENERAL TERMS AND CONDITIONS
ARTICLE ONE: GENERAL DEFINITIONS

1.1 “Affiliate” means, with respect to any person, any other person (other than an individual) that, directly or indirectly, through one or more intermediaries, controls, or is controlled by, or is under common control with, such person. For this purpose, “control” means the direct or indirect ownership of fifty percent (50%) or more of the outstanding capital stock or other equity interests having ordinary voting power.

1.2 “Agreement” has the meaning set forth in the Cover Sheet.

1.3 “Bankrupt” means with respect to any entity, such entity (i) files a petition or otherwise commences, authorizes or acquiesces in the commencement of a proceeding or cause of action under any bankruptcy, insolvency, reorganization or similar law, or has any such petition filed or commenced against it, (ii) makes an assignment or any general arrangement for the benefit of creditors, (iii) otherwise becomes bankrupt or insolvent (however evidenced), (iv) has a liquidator, administrator, receiver, trustee, conservator or similar official appointed with respect to it or any substantial portion of its property or assets, or (v) is generally unable to pay its debts as they fall due.

1.4 “Business Day” means any day except a Saturday, Sunday, or a Federal Reserve Bank holiday. A Business Day shall open at 8:00 a.m. and close at 5:00 p.m. local time for the relevant Party’s principal place of business. The relevant Party, in each instance unless otherwise specified, shall be the Party from whom the notice, payment or delivery is being sent and by whom the notice or payment or delivery is to be received.

1.5 “Buyer” means the Party to a Transaction that is obligated to purchase and receive, or cause to be received, the Product, as specified in the Transaction.

1.6 “Call Option” means an Option entitling, but not obligating, the Option Buyer to purchase and receive the Product from the Option Seller at a price equal to the Strike Price for the Delivery Period for which the Option may be exercised, all as specified in the Transaction.

Upon proper exercise of the Option by the Option Buyer, the Option Seller will be obligated to sell and deliver the Product for the Delivery Period for which the Option has been exercised.

1.7 “Claiming Party” has the meaning set forth in Section 3.3.

1.8 “Claims” means all third party claims or actions, threatened or filed and, whether groundless, false, fraudulent or otherwise, that directly or indirectly relate to the subject matter of an indemnity, and the resulting losses, damages, expenses, attorneys’ fees and court costs, whether incurred by settlement or otherwise, and whether such claims or actions are threatened or filed prior to or after the termination of this Agreement.

1.9 “Confirmation” has the meaning set forth in Section 2.3.

1.10 “Contract Price” means the price in $U.S. (unless otherwise provided for) to be paid by Buyer to Seller for the purchase of the Product, as specified in the Transaction.

Page 103 of 438 ends

1.11 “Costs” means, with respect to the Non-Defaulting Party, brokerage fees, commissions and other similar third party transaction costs and expenses reasonably incurred by such Party either in terminating any arrangement pursuant to which it has hedged its obligations or entering into new arrangements which replace a Terminated Transaction; and all reasonable attorneys’ fees and expenses incurred by the Non-Defaulting Party in connection with the termination of a Transaction.

1.12 “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 issues rating by S&P, Moody’s or any other rating agency agreed by the Parties as set forth in the Cover Sheet.

1.13 “Cross Default Amount” means the cross default amount, if any, set forth in the Cover Sheet for a Party.

1.14 “Defaulting Party” has the meaning set forth in Section 5.1.

1.15 “Delivery Period” means the period of delivery for a Transaction, as specified in the Transaction.

1.16 “Delivery Point” means the point at which the Product will be delivered and received, as specified in the Transaction.

1.17 “Downgrade Event” has the meaning set forth on the Cover Sheet.

1.18 “Early Termination Date” has the meaning set forth in Section 5.2.

1.19 “Effective Date” has the meaning set forth on the Cover Sheet.

1.20 “Equitable Defenses” means any bankruptcy, insolvency, reorganization and other laws affecting creditors’ rights generally, and with regard to equitable remedies, the discretion of the court before which proceedings to obtain same may be pending.

1.21 “Event of Default” has the meaning set forth in Section 5.1.

1.22 “FERC” means the Federal Energy Regulatory Commission or any successor government agency.

1.23 “Force Majeure” means an event or circumstance which prevents one Party from performing its obligations under one or more Transactions, which event or circumstance was not anticipated as of the date the Transaction was agreed to, which is not within the reasonable control of, or the result of the negligence of, the Claiming Party, and which, by the exercise of due diligence, the Claiming Party is unable to overcome or avoid or cause to be avoided. Force Majeure shall not be based on (i) the loss of Buyer’s markets; (ii) Buyer’s inability economically to use or resell the Product purchased hereunder; (iii) the loss or failure of Seller’s supply; or (iv) Seller’s ability to sell the Product at a price greater than the Contract Price. Neither Party may raise a claim of Force Majeure based in whole or in part on curtailment by a Transmission

Page 104 of 438 ends

24 Version 2.1 (modified 4/25/00)
©COPYRIGHT 2000 by the Edison Electric Institute and National Energy Marketers Association Provider unless (i) such Party has contracted for firm transmission with a Transmission Provider for the Product to be delivered to or received at the Delivery Point and (ii) such curtailment is due to “force majeure” or “uncontrollable force” or a similar term as defined under the Transmission Provider’s tariff; provided, however, that existence of the foregoing factors shall not be sufficient to conclusively or presumptively prove the existence of a Force Majeure absent a showing of other facts and circumstances which in the aggregate with such factors establish that a Force Majeure as defined in the first sentence hereof has occurred. The applicability of Force Majeure to the Transaction is governed by the terms of the Products and Related Definitions contained in Schedule P.

1.24 “Gains” means, with respect to any Party, an amount equal to the present value of the economic benefit to it, if any (exclusive of Costs), resulting from the termination of a Terminated Transaction, determined in a commercially reasonable manner.

1.25 “Guarantor” means, with respect to a Party, the guarantor, if any, specified for such Party on the Cover Sheet.

1.26 “Interest Rate” means, for any date, the lesser of (a) the per annum rate of interest equal to the prime lending rate as may from time to time be published in The Wall Street Journal under “Money Rates” on such day (or if not published on such day on the most recent preceding day on which published), plus two percent (2%) and (b) the maximum rate permitted by applicable law.

1.27 “Letter(s) of Credit” means one or more irrevocable, transferable standby letters of credit issued by a U.S. commercial bank or a foreign bank with a U.S. branch with such bank having a credit rating of at least A- from S&P or A3 from Moody’s, in a form acceptable to the Party in whose favor the letter of credit is issued. Costs of a Letter of Credit shall be borne by the applicant for such Letter of Credit.

1.28 “Losses” means, with respect to any Party, an amount equal to the present value of the economic loss to it, if any (exclusive of Costs), resulting from termination of a Terminated Transaction, determined in a commercially reasonable manner.

1.29 “Master Agreement” has the meaning set forth on the Cover Sheet.

1.30 “Moody’s” means Moody’s Investor Services, Inc. or its successor.

1.31 “NERC Business Day” means any day except a Saturday, Sunday or a holiday as defined by the North American Electric Reliability Council or any successor organization thereto. A NERC Business Day shall open at 8:00 a.m. and close at 5:00 p.m. local time for the relevant Party’s principal place of business. The relevant Party, in each instance unless otherwise specified, shall be the Party from whom the notice, payment or delivery is being sent and by whom the notice or payment or delivery is to be received.

1.32 “Non-Defaulting Party” has the meaning set forth in Section 5.2.

1.33 “Offsetting Transactions” mean any two or more outstanding Transactions, having the same or overlapping Delivery Period(s), Delivery Point and payment date, where

Page 105 of 438 ends

25 Version 2.1 (modified 4/25/00)
©COPYRIGHT 2000 by the Edison Electric Institute and National Energy Marketers Association under one or more of such Transactions, one Party is the Seller, and under the other such Transaction(s), the same Party is the Buyer.

1.34 “Option” means the right but not the obligation to purchase or sell a Product as specified in a Transaction.

1.35 “Option Buyer” means the Party specified in a Transaction as the purchaser of an option, as defined in Schedule P.

1.36 “Option Seller” means the Party specified in a Transaction as the seller of an option , as defined in Schedule P.

1.37 “Party A Collateral Threshold” means the collateral threshold, if any, set forth in the Cover Sheet for Party A.

1.38 “Party B Collateral Threshold” means the collateral threshold, if any, set forth in the Cover Sheet for Party B.

1.39 “Party A Independent Amount” means the amount , if any, set forth in the Cover Sheet for Party A.

1.40 “Party B Independent Amount” means the amount , if any, set forth in the Cover Sheet for Party B.

1.41 “Party A Rounding Amount” means the amount, if any, set forth in the Cover Sheet for Party A.

1.42 “Party B Rounding Amount” means the amount, if any, set forth in the Cover Sheet for Party B.

1.43 “Party A Tariff” means the tariff, if any, specified in the Cover Sheet for Party A.

1.44 “Party B Tariff” means the tariff, if any, specified in the Cover Sheet for Party B.

1.45 “Performance Assurance” means collateral in the form of either cash, Letter(s) of Credit, or other security acceptable to the Requesting Party.

1.46 “Potential Event of Default” means an event which, with notice or passage of time or both, would constitute an Event of Default.

1.47 “Product” means electric capacity, energy or other product(s) related thereto as specified in a Transaction by reference to a Product listed in Schedule P hereto or as otherwise specified by the Parties in the Transaction.

1.48 “Put Option” means an Option entitling, but not obligating, the Option Buyer to sell and deliver the Product to the Option Seller at a price equal to the Strike Price for the Delivery Period for which the option may be exercised, all as specified in a Transaction. Upon

Page 106 of 438 ends

26 Version 2.1 (modified 4/25/00)
©COPYRIGHT 2000 by the Edison Electric Institute and National Energy Marketers Association proper exercise of the Option by the Option Buyer, the Option Seller will be obligated to purchase and receive the Product.

1.49 “Quantity” means that quantity of the Product that Seller agrees to make available or sell and deliver, or cause to be delivered, to Buyer, and that Buyer agrees to purchase and receive, or cause to be received, from Seller as specified in the Transaction.

1.50 “Recording” has the meaning set forth in Section 2.4.

1.51 “Replacement Price” means the price at which Buyer, acting in a commercially reasonable manner, purchases at the Delivery Point a replacement for any Product specified in a Transaction but not delivered by Seller, plus (i) costs reasonably incurred by Buyer in purchasing such substitute Product and (ii) additional transmission charges, if any, reasonably incurred by Buyer to the Delivery Point, or at Buyer’s option, the market price at the Delivery Point for such Product not delivered as determined by Buyer in a commercially reasonable manner; provided, however, in no event shall such price include any penalties, ratcheted demand or similar charges, nor shall Buyer be required to utilize or change its utilization of its owned or controlled assets or market positions to minimize Seller’s liability. For the purposes of this definition, Buyer shall be considered to have purchased replacement Product to the extent Buyer shall have entered into one or more arrangements in a commercially reasonable manner whereby Buyer repurchases its obligation to sell and deliver the Product to another party at the Delivery Point.

1.52 “S&P” means the Standard & Poor’s Rating Group (a division of McGraw-Hill, Inc.) or its successor.

1.53 “Sales Price” means the price at which Seller, acting in a commercially reasonable manner, resells at the Delivery Point any Product not received by Buyer, deducting from such proceeds any (i) costs reasonably incurred by Seller in reselling such Product and (ii) additional transmission charges, if any, reasonably incurred by Seller in delivering such Product to the third party purchasers, or at Seller’s option, the market price at the Delivery Point for such Product not received as determined by Seller in a commercially reasonable manner; provided, however, in no event shall such price include any penalties, ratcheted demand or similar charges, nor shall Seller be required to utilize or change its utilization of its owned or controlled assets, including contractual assets, or market positions to minimize Buyer’s liability. For purposes of this definition, Seller shall be considered to have resold such Product to the extent Seller shall have entered into one or more arrangements in a commercially reasonable manner whereby Seller repurchases its obligation to purchase and receive the Product from another party at the Delivery Point.

1.54 “Schedule” or “Scheduling” means the actions of Seller, Buyer and/or their designated representatives, including each Party’s Transmission Providers, if applicable, of notifying, requesting and confirming to each other the quantity and type of Product to be delivered on any given day or days during the Delivery Period at a specified Delivery Point.

1.55 “Seller” means the Party to a Transaction that is obligated to sell and deliver, or cause to be delivered, the Product, as specified in the Transaction.

Page 107 of 438 ends

1.56 “Settlement Amount” means, with respect to a Transaction and the Non-Defaulting Party, the Losses or Gains, and Costs, expressed in U.S. Dollars, which such party incurs as a result of the liquidation of a Terminated Transaction pursuant to Section 5.2.

1.57 “Strike Price” means the price to be paid for the purchase of the Product pursuant to an Option.

1.58 “Terminated Transaction” has the meaning set forth in Section 5.2.

1.59 “Termination Payment” has the meaning set forth in Section 5.3.

1.60 “Transaction” means a particular transaction agreed to by the Parties relating to the sale and purchase of a Product pursuant to this Master Agreement.

1.61 “Transmission Provider” means any entity or entities transmitting or transporting the Product on behalf of Seller or Buyer to or from the Delivery Point in a particular Transaction.

ARTICLE TWO: TRANSACTION TERMS AND CONDITIONS

2.1 Transactions. A Transaction shall be entered into upon agreement of the Parties orally or, if expressly required by either Party with respect to a particular Transaction, in writing, including an electronic means of communication. Each Party agrees not to contest, or assert any defense to, the validity or enforceability of the Transaction entered into in accordance with this Master Agreement (i) based on any law requiring agreements to be in writing or to be signed by the parties, or (ii) based on any lack of authority of the Party or any lack of authority of any employee of the Party to enter into a Transaction.

2.2 Governing Terms. Unless otherwise specifically agreed, each Transaction between the Parties shall be governed by this Master Agreement. This Master Agreement (including all exhibits, schedules and any written supplements hereto), , the Party A Tariff, if any, and the Party B Tariff, if any, any designated collateral, credit support or margin agreement or similar arrangement between the Parties and all Transactions (including any Confirmations accepted in accordance with Section 2.3) shall form a single integrated agreement between the Parties. Any inconsistency between any terms of this Master Agreement and any terms of the Transaction shall be resolved in favor of the terms of such Transaction.

2.3 Confirmation. Seller may confirm a Transaction by forwarding to Buyer by facsimile within three (3) Business Days after the Transaction is entered into a confirmation (“Confirmation”) substantially in the form of Exhibit A. If Buyer objects to any term(s) of such Confirmation, Buyer shall notify Seller in writing of such objections within two (2) Business Days of Buyer’s receipt thereof, failing which Buyer shall be deemed to have accepted the terms as sent. If Seller fails to send a Confirmation within three (3) Business Days after the Transaction is entered into, a Confirmation substantially in the form of Exhibit A, may be forwarded by Buyer to Seller. If Seller objects to any term(s) of such Confirmation, Seller shall notify Buyer of such objections within two (2) Business Days of Seller’s receipt thereof, failing which Seller shall be deemed to have accepted the terms as sent. If Seller and Buyer each send a Confirmation and neither Party objects to the other Party’s Confirmation within two (2) Business

Page 108 of 438 ends

28 Version 2.1 (modified 4/25/00)
©COPYRIGHT 2000 by the Edison Electric Institute and National Energy Marketers Association Days of receipt, Seller’s Confirmation shall be deemed to be accepted and shall be the controlling Confirmation, unless (i) Seller’s Confirmation was sent more than three (3) Business Days after the Transaction was entered into and (ii) Buyer’s Confirmation was sent prior to Seller’s Confirmation, in which case Buyer’s Confirmation shall be deemed to be accepted and shall be the controlling Confirmation. Failure by either Party to send or either Party to return an executed Confirmation or any objection by either Party shall not invalidate the Transaction agreed to by the Parties.

2.4 Additional Confirmation Terms. If the Parties have elected on the Cover Sheet to make this Section 2.4 applicable to this Master Agreement, when a Confirmation contains provisions, other than those provisions relating to the commercial terms of the Transaction (e.g., price or special transmission conditions), which modify or supplement the general terms and conditions of this Master Agreement (e.g., arbitration provisions or additional representations and warranties), such provisions shall not be deemed to be accepted pursuant to Section 2.3 unless agreed to either orally or in writing by the Parties; provided that the foregoing shall not invalidate any Transaction agreed to by the Parties.

2.5 Recording. 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 Master Agreement, and that any such Recordings will be retained in confidence, secured from improper access, and may be submitted in evidence in any proceeding or action relating 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. The Recording, and the terms and conditions described therein, if admissible, shall be the controlling evidence for the Parties’ agreement with respect to a particular Transaction in the event a Confirmation is not fully executed (or deemed accepted) by both Parties. Upon full execution (or deemed acceptance) of a Confirmation, such Confirmation shall control in the event of any conflict with the terms of a Recording, or in the event of any conflict with the terms of this Master Agreement.

ARTICLE THREE: OBLIGATIONS AND DELIVERIES

3.1 Seller’s and Buyer’s Obligations. With respect to each Transaction, Seller shall sell and deliver, or cause to be delivered, and Buyer shall purchase and receive, or cause to be received, the Quantity of the Product at the Delivery Point, and Buyer shall pay Seller the Contract Price; provided, however, with respect to Options, the obligations set forth in the preceding sentence shall only arise if the Option Buyer exercises its Option in accordance with its terms. Seller shall be responsible for any costs or charges imposed on or associated with the Product or its delivery of the Product up to the Delivery Point. Buyer shall be responsible for any costs or charges imposed on or associated with the Product or its receipt at and from the Delivery Point.

3.2 Transmission and Scheduling. Seller shall arrange and be responsible for transmission service to the Delivery Point and shall Schedule or arrange for Scheduling services with its Transmission Providers, as specified by the Parties in the Transaction, or in the absence thereof, in accordance with the practice of the Transmission Providers, to deliver the Product to

Page 109 of 438 ends

29 Version 2.1 (modified 4/25/00)
©COPYRIGHT 2000 by the Edison Electric Institute and National Energy Marketers Association the Delivery Point. Buyer shall arrange and be responsible for transmission service at and from the Delivery Point and shall Schedule or arrange for Scheduling services with its Transmission Providers to receive the Product at the Delivery Point.

3.3 Force Majeure. To the extent either Party is prevented by Force Majeure from carrying out, in whole or part, its obligations under the Transaction and such Party (the “Claiming Party”) gives notice and details of the Force Majeure to the other Party as soon as practicable, then, unless the terms of the Product specify otherwise, the Claiming Party shall be excused from the performance of its obligations with respect to such Transaction (other than the obligation to make payments then due or becoming due with respect to performance prior to the Force Majeure). The Claiming Party shall remedy the Force Majeure with all reasonable dispatch. The non-Claiming Party shall not be required to perform or resume performance of its obligations to the Claiming Party corresponding to the obligations of the Claiming Party excused by Force Majeure.

ARTICLE FOUR: REMEDIES FOR FAILURE TO DELIVER/RECEIVE

4.1 Seller Failure. If Seller fails to schedule and/or deliver all or part of the Product pursuant to a Transaction, and such failure is not excused under the terms of the Product or by Buyer’s failure to perform, then Seller shall pay Buyer, on the date payment would otherwise be due in respect of the month in which the failure occurred or, if “Accelerated Payment of Damages” is specified on the Cover Sheet, within five (5) Business Days of invoice receipt, an amount for such deficiency equal to the positive difference, if any, obtained by subtracting the Contract Price from the Replacement Price. The invoice for such amount shall include a written statement explaining in reasonable detail the calculation of such amount.

4.2 Buyer Failure. If Buyer fails to schedule and/or receive all or part of the Product pursuant to a Transaction and such failure is not excused under the terms of the Product or by Seller’s failure to perform, then Buyer shall pay Seller, on the date payment would otherwise be due in respect of the month in which the failure occurred or, if “Accelerated Payment of Damages” is specified on the Cover Sheet, within five (5) Business Days of invoice receipt, an amount for such deficiency equal to the positive difference, if any, obtained by subtracting the Sales Price from the Contract Price. The invoice for such amount shall include a written statement explaining in reasonable detail the calculation of such amount.

ARTICLE FIVE: EVENTS OF DEFAULT; REMEDIES

5.1 Events of Default. An “Event of Default” shall mean, with respect to a Party (a “Defaulting Party”), the occurrence of any of the following:
(a) the failure to make, when due, any payment required pursuant to this Agreement if such failure is not remedied within three (3) Business Days after written notice;
(b) any representation or warranty made by such Party herein is false or misleading in any material respect when made or when deemed made or repeated;

Page 110 of 438 ends

30 Version 2.1 (modified 4/25/00)
©COPYRIGHT 2000 by the Edison Electric Institute and National Energy Marketers Association (c) the failure to perform any material covenant or obligation set forth in this Agreement (except to the extent constituting a separate Event of Default, and except for such Party’s obligations to deliver or receive the Product, the exclusive remedy for which is provided in Article Four) if such failure is not remedied within three (3) Business Days after written notice; (d) such Party becomes Bankrupt;
(e) the failure of such Party to satisfy the creditworthiness/collateral requirements agreed to pursuant to Article Eight hereof; (f) such Party consolidates or amalgamates with, or merges with or into, or transfers all or substantially all of its assets to, another entity and, at the time of such consolidation, amalgamation, merger or transfer, the resulting, surviving or transferee entity fails to assume all the obligations of such Party under this Agreement to which it or its predecessor was a party by operation of law or pursuant to an agreement reasonably satisfactory to the other Party;
(g) if the applicable cross default section in the Cover Sheet is indicated for such Party, the occurrence and continuation of (i) a default, event of default or other similar condition or event in respect of such Party or any other party specified in the Cover Sheet for such Party under one or more agreements or instruments, individually or collectively, relating to indebtedness for borrowed money in an aggregate amount of not less than the applicable Cross Default Amount (as specified in the Cover Sheet), which results in such indebtedness becoming, or becoming capable at such time of being declared, immediately due and payable or (ii) a default by such Party or any other party specified in the Cover Sheet for such Party in making on the due date therefor one or more payments, individually or collectively, in an aggregate amount of not less than the applicable Cross Default Amount (as specified in the Cover Sheet);
(h) with respect to such Party’s Guarantor, if any:
(i) if any representation or warranty made by a Guarantor in connection with this Agreement is false or misleading in any material respect when made or when deemed made or repeated; (ii) the failure of a Guarantor to make any payment required or to perform any other material covenant or obligation in any guaranty made in connection with this Agreement and such failure shall not be remedied within three (3) Business Days after written notice; (iii) a Guarantor becomes Bankrupt;

Page 111 of 438 ends

31 Version 2.1 (modified 4/25/00)
©COPYRIGHT 2000 by the Edison Electric Institute and National Energy Marketers Association (iv) the failure of a Guarantor’s guaranty to be in full force and effect for purposes of this Agreement (other than in accordance with its terms) prior to the satisfaction of all obligations of such Party under each Transaction to which such guaranty shall relate without the written consent of the other Party; or
(v) a Guarantor shall repudiate, disaffirm, disclaim, or reject, in whole or in part, or challenge the validity of any guaranty.

5.2 Declaration of an Early Termination Date and Calculation of Settlement Amounts. If an Event of Default with respect to a Defaulting Party shall have occurred and be continuing, the other Party (the “Non-Defaulting Party”) shall have the right (i) to designate a day, no earlier than the day such notice is effective and no later than 20 days after such notice is effective, as an early termination date (“Early Termination Date”) to accelerate all amounts owing between the Parties and to liquidate and terminate all, but not less than all, Transactions (each referred to as a “Terminated Transaction”) between the Parties, (ii) withhold any payments due to the Defaulting Party under this Agreement and (iii) suspend performance. The Non-Defaulting Party shall calculate, in a commercially reasonable manner, a Settlement Amount for each such Terminated Transaction as of the Early Termination Date (or, to the extent that in the reasonable opinion of the Non-Defaulting Party certain of such Terminated Transactions are commercially impracticable to liquidate and terminate or may not be liquidated and terminated under applicable law on the Early Termination Date, as soon thereafter as is reasonably practicable).

5.3 Net Out of Settlement Amounts. The Non-Defaulting Party shall aggregate all Settlement Amounts into a single amount by: netting out (a) all Settlement Amounts that are due to the Defaulting Party, plus, at the option of the Non-Defaulting Party, any cash or other form of security then available to the Non-Defaulting Party pursuant to Article Eight, plus any or all other amounts due to the Defaulting Party under this Agreement against (b) all Settlement Amounts that are due to the Non-Defaulting Party, plus any or all other amounts due to the Non-Defaulting Party under this Agreement, so that all such amounts shall be netted out to a single liquidated amount (the “Termination Payment”) payable by one Party to the other. The Termination Payment shall be due to or due from the Non-Defaulting Party as appropriate.

5.4 Notice of Payment of Termination Payment. As soon as practicable after a liquidation, notice shall be given by the Non-Defaulting Party to the Defaulting Party of the amount of the Termination Payment and whether the Termination Payment is due to or due from the Non-Defaulting Party. The notice shall include a written statement explaining in reasonable detail the calculation of such amount. The Termination Payment shall be made by the Party that owes it within two (2) Business Days after such notice is effective.

5.5 Disputes With Respect to Termination Payment. If the Defaulting Party disputes the Non-Defaulting Party’s calculation of the Termination Payment, in whole or in part, the Defaulting Party shall, within two (2) Business Days of receipt of Non-Defaulting Party’s calculation of the Termination Payment, provide to the Non-Defaulting Party a detailed written explanation of the basis for such dispute; provided, however, that if the Termination Payment is

Page 112 of 438 ends

32 Version 2.1 (modified 4/25/00)
©COPYRIGHT 2000 by the Edison Electric Institute and National Energy Marketers Association due from the Defaulting Party, the Defaulting Party shall first transfer Performance Assurance to the Non-Defaulting Party in an amount equal to the Termination Payment.

5.6 Closeout Setoffs.

Option A: After calculation of a Termination Payment in accordance with Section 5.3, if the Defaulting Party would be owed the Termination Payment, the Non-Defaulting Party shall be entitled, at its option and in its discretion, to (i) set off against such Termination Payment any amounts due and owing by the Defaulting Party to the Non-Defaulting Party under any other agreements, instruments or undertakings between the Defaulting Party and the Non-Defaulting Party and/or (ii) to the extent the Transactions are not yet liquidated in accordance with Section

5.2, withhold payment of the Termination Payment to the Defaulting Party. The remedy provided for in this Section shall be without prejudice and in addition to any right of setoff, combination of accounts, lien or other right to which any Party is at any time otherwise entitled (whether by operation of law, contract or otherwise).

Option B: After calculation of a Termination Payment in accordance with Section 5.3, if the Defaulting Party would be owed the Termination Payment, the Non-Defaulting Party shall be entitled, at its option and in its discretion, to (i) set off against such Termination Payment any amounts due and owing by the Defaulting Party or any of its Affiliates to the Non-Defaulting Party or any of its Affiliates under any other agreements, instruments or undertakings between the Defaulting Party or any of its Affiliates and the Non-Defaulting Party or any of its Affiliates and/or (ii) to the extent the Transactions are not yet liquidated in accordance with Section 5.2, withhold payment of the Termination Payment to the Defaulting Party. The remedy provided for in this Section shall be without prejudice and in addition to any right of setoff, combination of accounts, lien or other right to which any Party is at any time otherwise entitled (whether by operation of law, contract or otherwise).

Option C: Neither Option A nor B shall apply.

5.7 Suspension of Performance. Notwithstanding any other provision of this Master Agreement, if (a) an Event of Default or (b) a Potential Event of Default shall have occurred and be continuing, the Non-Defaulting Party, upon written notice to the Defaulting Party, shall have the right (i) to suspend performance under any or all Transactions; provided, however, in no event shall any such suspension continue for longer than ten (10) NERC Business Days with respect to any single Transaction unless an early Termination Date shall have been declared and notice thereof pursuant to Section 5.2 given, and (ii) to the extent an Event of Default shall have occurred and be continuing to exercise any remedy available at law or in equity.

ARTICLE SIX: PAYMENT AND NETTING

6.1 Billing Period. Unless otherwise specifically agreed upon by the Parties in a Transaction, the calendar month shall be the standard period for all payments under this Agreement (other than Termination Payments and, if “Accelerated Payment of Damages” is specified by the Parties in the Cover Sheet, payments pursuant to Section 4.1 or 4.2 and Option premium payments pursuant to Section 6.7). As soon as practicable after the end of each month,

Page 113 of 438 ends

33 Version 2.1 (modified 4/25/00)
©COPYRIGHT 2000 by the Edison Electric Institute and National Energy Marketers Association each Party will render to the other Party an invoice for the payment obligations, if any, incurred hereunder during the preceding month.

6.2 Timeliness of Payment. Unless otherwise agreed by the Parties in a Transaction, all invoices under this Master Agreement shall be due and payable in accordance with each Party’s invoice instructions on or before the later of the twentieth (20th) day of each month, or tenth (10th) day after receipt of the invoice or, if such day is not a Business Day, then on the next Business Day. Each Party will make payments by electronic funds transfer, or by other mutually agreeable method(s), to the account designated by the other Party. Any amounts not paid by the due date will be deemed delinquent and will accrue interest at the Interest Rate, such interest to be calculated from and including the due date to but excluding the date the delinquent amount is paid in full.

6.3 Disputes and Adjustments of Invoices. A Party may, in good faith, dispute the correctness of any invoice or any adjustment to an invoice, rendered under this Agreement or adjust any invoice for any arithmetic or computational error within twelve (12) months of the date the invoice, or adjustment to an invoice, was rendered. In the event an invoice or portion thereof, or any other claim or adjustment arising hereunder, is disputed, payment of the undisputed portion of the invoice shall be required to be made when due, with notice of the objection given to the other Party. Any invoice dispute or invoice adjustment shall be in writing and shall state the basis for the dispute or adjustment. Payment of the disputed amount shall not be required until the dispute is resolved. Upon resolution of the dispute, any required payment shall be made within two (2) Business Days of such resolution along with interest accrued at the Interest Rate from and including the due date to but excluding the date paid. Inadvertent overpayments shall be returned upon request or deducted by the Party receiving such overpayment from subsequent payments, with interest accrued at the Interest Rate from and including the date of such overpayment to but excluding the date repaid or deducted by the Party receiving such overpayment. Any dispute with respect to an invoice is waived unless the other Party is notified in accordance with this Section 6.3 within twelve (12) months after the invoice is rendered or any specific adjustment to the invoice is made. If an invoice is not rendered within twelve (12) months after the close of the month during which performance of a Transaction occurred, the right to payment for such performance is waived.

6.4 Netting of Payments. The Parties hereby agree that they shall discharge mutual debts and payment obligations due and owing to each other on the same date pursuant to all Transactions through netting, in which case all amounts owed by each Party to the other Party for the purchase and sale of Products during the monthly billing period under this Master Agreement, including any related damages calculated pursuant to Article Four (unless one of the Parties elects to accelerate payment of such amounts as permitted by Article Four), interest, and payments or credits, shall be netted so that only the excess amount remaining due shall be paid by the Party who owes it.

6.5 Payment Obligation Absent Netting. If no mutual debts or payment obligations exist and only one Party owes a debt or obligation to the other during the monthly billing period, including, but not limited to, any related damage amounts calculated pursuant to Article Four, interest, and payments or credits, that Party shall pay such sum in full when due.

Page 114 of 438 ends

6.6 Security. Unless the Party benefiting from Performance Assurance or a guaranty notifies the other Party in writing, and except in connection with a liquidation and termination in accordance with Article Five, all amounts netted pursuant to this Article Six shall not take into account or include any Performance Assurance or guaranty which may be in effect to secure a Party’s performance under this Agreement.

6.7 Payment for Options. The premium amount for the purchase of an Option shall be paid within two (2) Business Days of receipt of an invoice from the Option Seller. Upon exercise of an Option, payment for the Product underlying such Option shall be due in accordance with Section 6.1.

6.8 Transaction Netting. If the Parties enter into one or more Transactions, which in conjunction with one or more other outstanding Transactions, constitute Offsetting Transactions, then all such Offsetting Transactions may by agreement of the Parties, be netted into a single Transaction under which:
(a) the Party obligated to deliver the greater amount of Energy will deliver the difference between the total amount it is obligated to deliver and the total amount to be delivered to it under the Offsetting Transactions, and (b) the Party owing the greater aggregate payment will pay the net difference owed between the Parties.

Each single Transaction resulting under this Section shall be deemed part of the single, indivisible contractual arrangement between the parties, and once such resulting Transaction occurs, outstanding obligations under the Offsetting Transactions which are satisfied by such offset shall terminate.

ARTICLE SEVEN: LIMITATIONS

7.1 Limitation of Remedies, Liability and Damages. EXCEPT AS SET FORTH

HEREIN, THERE IS NO WARRANTY OF MERCHANTABILITY OR FITNESS FOR A

PARTICULAR PURPOSE, AND ANY AND ALL IMPLIED WARRANTIES ARE DISCLAIMED. THE PARTIES CONFIRM THAT THE EXPRESS REMEDIES AND

MEASURES OF DAMAGES PROVIDED IN THIS AGREEMENT SATISFY THE ESSENTIAL PURPOSES HEREOF. FOR BREACH OF ANY PROVISION FOR WHICH AN

EXPRESS REMEDY OR MEASURE OF DAMAGES IS PROVIDED, SUCH EXPRESS

REMEDY OR MEASURE OF DAMAGES SHALL BE THE SOLE AND EXCLUSIVE REMEDY, THE OBLIGOR’S LIABILITY SHALL BE LIMITED AS SET FORTH IN SUCH

PROVISION AND ALL OTHER REMEDIES OR DAMAGES AT LAW OR IN EQUITY ARE WAIVED. IF NO REMEDY OR MEASURE OF DAMAGES IS EXPRESSLY PROVIDED HEREIN OR IN A TRANSACTION, THE OBLIGOR’S LIABILITY SHALL BE LIMITED

TO DIRECT ACTUAL DAMAGES ONLY, SUCH DIRECT ACTUAL DAMAGES SHALL

BE THE SOLE AND EXCLUSIVE REMEDY AND ALL OTHER REMEDIES OR DAMAGES AT LAW OR IN EQUITY ARE WAIVED. UNLESS EXPRESSLY HEREIN

PROVIDED, NEITHER PARTY SHALL BE LIABLE FOR CONSEQUENTIAL,

INCIDENTAL, PUNITIVE, EXEMPLARY OR INDIRECT DAMAGES, LOST PROFITS OR

Page 115 of 438 ends

OTHER BUSINESS INTERRUPTION DAMAGES, BY STATUTE, IN TORT OR CONTRACT, UNDER ANY INDEMNITY PROVISION OR OTHERWISE. IT IS THE

INTENT OF THE PARTIES THAT THE LIMITATIONS HEREIN IMPOSED ON REMEDIES

AND THE MEASURE OF DAMAGES BE WITHOUT REGARD TO THE CAUSE OR

CAUSES RELATED THERETO, INCLUDING THE NEGLIGENCE OF ANY PARTY,

WHETHER SUCH NEGLIGENCE BE SOLE, JOINT OR CONCURRENT, OR ACTIVE OR PASSIVE. TO THE EXTENT ANY DAMAGES REQUIRED TO BE PAID HEREUNDER

ARE LIQUIDATED, THE PARTIES ACKNOWLEDGE THAT THE DAMAGES ARE

DIFFICULT OR IMPOSSIBLE TO DETERMINE, OR OTHERWISE OBTAINING AN

ADEQUATE REMEDY IS INCONVENIENT AND THE DAMAGES CALCULATED

HEREUNDER CONSTITUTE A REASONABLE APPROXIMATION OF THE HARM OR LOSS.

ARTICLE EIGHT: CREDIT AND COLLATERAL REQUIREMENTS

8.1 Party A Credit Protection. The applicable credit and collateral requirements shall be as specified on the Cover Sheet. If no option in Section 8.1(a) is specified on the Cover Sheet, Section 8.l(a) Option C shall apply exclusively. If none of Sections 8.1(b), 8.1(c) or

8.1(d) are specified on the Cover Sheet, Section 8.1(b) shall apply exclusively. (a) Financial Information. Option A: If requested by Party A, Party B shall deliver (i) within 120 days following the end of each fiscal year, a copy of Party B’s annual report containing audited consolidated financial statements for such fiscal year and (ii) within 60 days after the end of each of its first three fiscal quarters of each fiscal year, a copy of Party B’s quarterly report containing unaudited consolidated financial statements for such fiscal quarter.

In all cases the statements shall be for the most recent accounting period and prepared in accordance with generally accepted accounting principles; provided, however, that should any such statements not be available on a timely basis due to a delay in preparation or certification, such delay shall not be an Event of Default so long as Party B diligently pursues the preparation, certification and delivery of the statements.

Option B: If requested by Party A, Party B shall deliver (i) within 120 days following the end of each fiscal year, a copy of the annual report containing audited consolidated financial statements for such fiscal year for the party(s) specified on the Cover Sheet and (ii) within 60 days after the end of each of its first three fiscal quarters of each fiscal year, a copy of quarterly report containing unaudited consolidated financial statements for such fiscal quarter for the party(s) specified on the Cover Sheet. In all cases the statements shall be for the most recent accounting period and shall be prepared in accordance with generally accepted accounting principles; provided, however, that should any such statements not be available on a timely basis due to a delay in preparation or certification, such delay shall not be an Event of Default so long as the relevant entity diligently pursues the preparation, certification and delivery of the statements.

Option C: Party A may request from Party B the information specified in the Cover Sheet.

Page 116 of 438 ends

36 Version 2.1 (modified 4/25/00)
©COPYRIGHT 2000 by the Edison Electric Institute and National Energy Marketers Association (b) Credit Assurances. If Party A has reasonable grounds to believe that Party B’s creditworthiness or performance under this Agreement has become unsatisfactory, Party A will provide Party B with written notice requesting Performance Assurance in an amount determined by Party A in a commercially reasonable manner. Upon receipt of such notice Party B shall have three (3) Business Days to remedy the situation by providing such Performance Assurance to Party A. In the event that Party B fails to provide such Performance Assurance, or a guaranty or other credit assurance acceptable to Party A within three (3) Business Days of receipt of notice, then an Event of Default under Article Five will be deemed to have occurred and Party A will be entitled to the remedies set forth in Article Five of this Master Agreement. (c) Collateral Threshold. If at any time and from time to time during the term of this Agreement (and notwithstanding whether an Event of Default has occurred), the Termination Payment that would be owed to Party A plus Party B’s Independent Amount, if any, exceeds the Party B Collateral Threshold, then Party A, on any Business Day, may request that Party B provide Performance Assurance in an amount equal to the amount by which the Termination Payment plus Party B’s Independent Amount, if any, exceeds the Party B Collateral Threshold (rounding upwards for any fractional amount to the next Party B Rounding Amount) (“Party B Performance Assurance”), less any Party B Performance Assurance already posted with Party A. Such Party B Performance Assurance shall be delivered to Party A within three (3) Business Days of the date of such request. On any Business Day (but no more frequently than weekly with respect to Letters of Credit and daily with respect to cash), Party B, at its sole cost, may request that such Party B Performance Assurance be reduced correspondingly to the amount of such excess Termination Payment plus Party B’s Independent Amount, if any, (rounding upwards for any fractional amount to the next Party B Rounding Amount). In the event that Party B fails to provide Party B Performance Assurance pursuant to the terms of this Article Eight within three (3) Business Days, then an Event of Default under Article Five shall be deemed to have occurred and Party A will be entitled to the remedies set forth in Article Five of this Master Agreement.

For purposes of this Section 8.1(c), the calculation of the Termination Payment shall be calculated pursuant to Section 5.3 by Party A as if all outstanding Transactions had been liquidated, and in addition thereto, shall include all amounts owed but not yet paid by Party B to Party A, whether or not such amounts are due, for performance already provided pursuant to any and all Transactions.
(d) Downgrade Event. If at any time there shall occur a Downgrade Event in respect of Party B, then Party A may require Party B to provide Performance Assurance in an amount determined by Party A in a commercially reasonable manner. In the event Party B shall fail to provide such Performance Assurance or a guaranty or other credit assurance acceptable to Party A within three (3) Business Days of receipt of notice, then an Event of Default shall be deemed to have occurred and Party A will be entitled to the remedies set forth in Article Five of this Master Agreement.
(e) If specified on the Cover Sheet, Party B shall deliver to Party A, prior to or concurrently with the execution and delivery of this Master Agreement a guarantee in an amount not less than the Guarantee Amount specified on the Cover Sheet and in a form reasonably acceptable to Party A.

Page 117 of 438 ends

8.2 Party B Credit Protection. The applicable credit and collateral requirements shall be as specified on the Cover Sheet. If no option in Section 8.2(a) is specified on the Cover Sheet, Section 8.2(a) Option C shall apply exclusively. If none of Sections 8.2(b), 8.2(c) or

8.2(d) are specified on the Cover Sheet, Section 8.2(b) shall apply exclusively. (a) Financial Information. Option A: If requested by Party B, Party A shall deliver (i) within 120 days following the end of each fiscal year, a copy of Party A’s annual report containing audited consolidated financial statements for such fiscal year and (ii) within 60 days after the end of each of its first three fiscal quarters of each fiscal year, a copy of such Party’s quarterly report containing unaudited consolidated financial statements for such fiscal quarter. In all cases the statements shall be for the most recent accounting period and prepared in accordance with generally accepted accounting principles; provided, however, that should any such statements not be available on a timely basis due to a delay in preparation or certification, such delay shall not be an Event of Default so long as such Party diligently pursues the preparation, certification and delivery of the statements.

Option B: If requested by Party B, Party A shall deliver (i) within 120 days following the end of each fiscal year, a copy of the annual report containing audited consolidated financial statements for such fiscal year for the party(s) specified on the Cover Sheet and (ii) within 60 days after the end of each of its first three fiscal quarters of each fiscal year, a copy of quarterly report containing unaudited consolidated financial statements for such fiscal quarter for the party(s) specified on the Cover Sheet. In all cases the statements shall be for the most recent accounting period and shall be prepared in accordance with generally accepted accounting principles; provided, however, that should any such statements not be available on a timely basis due to a delay in preparation or certification, such delay shall not be an Event of Default so long as the relevant entity diligently pursues the preparation, certification and delivery of the statements.

Option C: Party B may request from Party A the information specified in the Cover Sheet.
(b) Credit Assurances. If Party B has reasonable grounds to believe that Party A’s creditworthiness or performance under this Agreement has become unsatisfactory, Party B will provide Party A with written notice requesting Performance Assurance in an amount determined by Party B in a commercially reasonable manner. Upon receipt of such notice Party A shall have three (3) Business Days to remedy the situation by providing such Performance Assurance to Party B. In the event that Party A fails to provide such Performance Assurance, or a guaranty or other credit assurance acceptable to Party B within three (3) Business Days of receipt of notice, then an Event of Default under Article Five will be deemed to have occurred and Party B will be entitled to the remedies set forth in Article Five of this Master Agreement. (c) Collateral Threshold. If at any time and from time to time during the term of this Agreement (and notwithstanding whether an Event of Default has occurred), the Termination Payment that would be owed to Party B plus Party A’s Independent Amount, if any, exceeds the Party A Collateral Threshold, then Party B, on any Business Day, may request that Party A provide Performance Assurance in an amount equal to the amount by which the Termination Payment plus Party A’s Independent Amount, if any, exceeds the Party A Collateral

Page 118 of 438 ends

38 Version 2.1 (modified 4/25/00)
©COPYRIGHT 2000 by the Edison Electric Institute and National Energy Marketers Association Threshold (rounding upwards for any fractional amount to the next Party A Rounding Amount) (“Party A Performance Assurance”), less any Party A Performance Assurance already posted with Party B. Such Party A Performance Assurance shall be delivered to Party B within three (3) Business Days of the date of such request. On any Business Day (but no more frequently than weekly with respect to Letters of Credit and daily with respect to cash), Party A, at its sole cost, may request that such Party A Performance Assurance be reduced correspondingly to the amount of such excess Termination Payment plus Party A’s Independent Amount, if any, (rounding upwards for any fractional amount to the next Party A Rounding Amount). In the event that Party A fails to provide Party A Performance Assurance pursuant to the terms of this Article Eight within three (3) Business Days, then an Event of Default under Article Five shall be deemed to have occurred and Party B will be entitled to the remedies set forth in Article Five of this Master Agreement.

For purposes of this Section 8.2(c), the calculation of the Termination Payment shall be calculated pursuant to Section 5.3 by Party B as if all outstanding Transactions had been liquidated, and in addition thereto, shall include all amounts owed but not yet paid by Party A to Party B, whether or not such amounts are due, for performance already provided pursuant to any and all Transactions.
(d) Downgrade Event. If at any time there shall occur a Downgrade Event in respect of Party A, then Party B may require Party A to provide Performance Assurance in an amount determined by Party B in a commercially reasonable manner. In the event Party A shall fail to provide such Performance Assurance or a guaranty or other credit assurance acceptable to Party B within three (3) Business Days of receipt of notice, then an Event of Default shall be deemed to have occurred and Party B will be entitled to the remedies set forth in Article Five of this Master Agreement.
(e) If specified on the Cover Sheet, Party A shall deliver to Party B, prior to or concurrently with the execution and delivery of this Master Agreement a guarantee in an amount not less than the Guarantee Amount specified on the Cover Sheet and in a form reasonably acceptable to Party B.

8.3 Grant of Security Interest/Remedies. To secure its obligations under this Agreement and to the extent either or both Parties deliver Performance Assurance hereunder, each Party (a “Pledgor”) hereby grants to the other Party (the “Secured Party”) a present and continuing security interest in, and lien on (and right of setoff against), and assignment of, all cash collateral and cash equivalent collateral and any and all proceeds resulting therefrom or the liquidation thereof, whether now or hereafter held by, on behalf of, or for the benefit of, such Secured Party, and each Party agrees to take such action as the other Party reasonably requires in order to perfect the Secured Party’s first-priority security interest in, and lien on (and right of setoff against), such collateral and any and all proceeds resulting therefrom or from the liquidation thereof. Upon or any time after the occurrence or deemed occurrence and during the continuation of an Event of Default or an Early Termination Date, the Non-Defaulting Party may do any one or more of the following: (i) exercise any of the rights and remedies of a Secured Party with respect to all Performance Assurance, including any such rights and remedies under law then in effect; (ii) exercise its rights of setoff against any and all property of the Defaulting Party in the possession of the Non-Defaulting Party or its agent; (iii) draw on any outstanding

Page 119 of 438 ends

39 Version 2.1 (modified 4/25/00)
©COPYRIGHT 2000 by the Edison Electric Institute and National Energy Marketers Association Letter of Credit issued for its benefit; and (iv) liquidate all Performance Assurance then held by or for the benefit of the Secured Party free from any claim or right of any nature whatsoever of the Defaulting Party, including any equity or right of purchase or redemption by the Defaulting Party. The Secured Party shall apply the proceeds of the collateral realized upon the exercise of any such rights or remedies to reduce the Pledgor’s obligations under the Agreement (the Pledgor remaining liable for any amounts owing to the Secured Party after such application), subject to the Secured Party’s obligation to return any surplus proceeds remaining after such obligations are satisfied in full.

ARTICLE NINE: GOVERNMENTAL CHARGES

9.1 Cooperation. Each Party shall use reasonable efforts to implement the provisions of and to administer this Master Agreement in accordance with the intent of the parties to minimize all taxes , so long as neither Party is materially adversely affected by such efforts.

9.2 Governmental Charges. Seller shall pay or cause to be paid all taxes imposed by any government authority(“Governmental Charges”) on or with respect to the Product or a Transaction arising prior to the Delivery Point. Buyer shall pay or cause to be paid all Governmental Charges on or with respect to the Product or a Transaction at and from the Delivery Point (other than ad valorem, franchise or income taxes which are related to the sale of the Product and are, therefore, the responsibility of the Seller). In the event Seller is required by law or regulation to remit or pay Governmental Charges which are Buyer’s responsibility hereunder, Buyer shall promptly reimburse Seller for such Governmental Charges. If Buyer is required by law or regulation to remit or pay Governmental Charges which are Seller’s responsibility hereunder, Buyer may deduct the amount of any such Governmental Charges from the sums due to Seller under Article 6 of this Agreement. Nothing shall obligate or cause a Party to pay or be liable to pay any Governmental Charges for which it is exempt under the law.

ARTICLE TEN: MISCELLANEOUS

10.1 Term of Master Agreement. The term of this Master Agreement shall commence on the Effective Date and shall remain in effect until terminated by either Party upon (thirty) 30 days’ prior written notice; provided, however, that such termination shall not affect or excuse the performance of either Party under any provision of this Master Agreement that by its terms survives any such termination and, provided further, that this Master Agreement and any other documents executed and delivered hereunder shall remain in effect with respect to the Transaction(s) entered into prior to the effective date of such termination until both Parties have fulfilled all of their obligations with respect to such Transaction(s), or such Transaction(s) that have been terminated under Section 5.2 of this Agreement.

10.2 Representations and Warranties. On the Effective Date and the date of entering into each Transaction, each Party represents and warrants to the other Party that:
(i) it is duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation;

Page 120 of 438 ends

40 Version 2.1 (modified 4/25/00)
©COPYRIGHT 2000 by the Edison Electric Institute and National Energy Marketers Association (ii) it has all regulatory authorizations necessary for it to legally perform its obligations under this Master Agreement and each Transaction (including any Confirmation accepted in accordance with Section 2.3); (iii) the execution, delivery and performance of this Master Agreement and each Transaction (including any Confirmation accepted in accordance with Section 2.3) are within its powers, have been duly authorized by all necessary action and do not violate any of the terms and conditions in its governing documents, any contracts to which it is a party or any law, rule, regulation, order or the like applicable to it;
(iv) this Master Agreement, each Transaction (including any Confirmation accepted in accordance with Section 2.3), and each other document executed and delivered in accordance with this Master Agreement constitutes its legally valid and binding obligation enforceable against it in accordance with its terms; subject to any Equitable Defenses. (v) it is not Bankrupt and there are no proceedings pending or being contemplated by it or, to its knowledge, threatened against it which would result in it being or becoming Bankrupt;
(vi) there is not pending or, to its knowledge, threatened against it or any of its Affiliates any legal proceedings that could materially adversely affect its ability to perform its obligations under this Master Agreement and each Transaction (including any Confirmation accepted in accordance with Section 2.3);
(vii) no Event of Default or Potential Event of Default with respect to it has occurred and is continuing and no such event or circumstance would occur as a result of its entering into or performing its obligations under this Master Agreement and each Transaction (including any Confirmation accepted in accordance with Section 2.3);
(viii) it is acting for its own account, has made its own independent decision to enter into this Master Agreement and each Transaction (including any Confirmation accepted in accordance with Section 2.3) and as to whether this Master Agreement and each such Transaction (including any Confirmation accepted in accordance with Section 2.3) is appropriate or proper for it based upon its own judgment, is not relying upon the advice or recommendations of the other Party in so doing, and is capable of assessing the merits of and understanding, and understands and accepts, the terms, conditions and risks of this Master Agreement and each Transaction (including any Confirmation accepted in accordance with Section 2.3);
(ix) it is a “forward contract merchant” within the meaning of the United States Bankruptcy Code;

Page 121 of 438 ends

41 Version 2.1 (modified 4/25/00)
©COPYRIGHT 2000 by the Edison Electric Institute and National Energy Marketers Association (x) it has entered into this Master Agreement and each Transaction (including any Confirmation accepted in accordance with Section 2.3) in connection with the conduct of its business and it has the capacity or ability to make or take delivery of all Products referred to in the Transaction to which it is a Party;
(xi) with respect to each Transaction (including any Confirmation accepted in accordance with Section 2.3) involving the purchase or sale of a Product or an Option, it is a producer, processor, commercial user or merchant handling the Product, and it is entering into such Transaction for purposes related to its business as such; and
(xii) the material economic terms of each Transaction are subject to individual negotiation by the Parties.

10.3 Title and Risk of Loss. Title to and risk of loss related to the Product shall transfer from Seller to Buyer at the Delivery Point. Seller warrants that it will deliver to Buyer the Quantity of the Product free and clear of all liens, security interests, claims and encumbrances or any interest therein or thereto by any person arising prior to the Delivery Point.

10.4 Indemnity. Each Party shall indemnify, defend and hold harmless the other Party from and against any Claims arising from or out of any event, circumstance, act or incident first occurring or existing during the period when control and title to Product is vested in such Party as provided in Section 10.3. Each Party shall indemnify, defend and hold harmless the other Party against any Governmental Charges for which such Party is responsible under Article Nine.

10.5 Assignment. Neither Party shall assign this Agreement or its rights hereunder without the prior written consent of the other Party, which consent may be withheld in the exercise of its sole discretion; provided, however, either Party may, without the consent of the other Party (and without relieving itself from liability hereunder), (i) transfer, sell, pledge, encumber or assign this Agreement or the accounts, revenues or proceeds hereof in connection with any financing or other financial arrangements, (ii) transfer or assign this Agreement to an affiliate of such Party which affiliate’s creditworthiness is equal to or higher than that of such Party, or (iii) transfer or assign this Agreement to any person or entity succeeding to all or substantially all of the assets whose creditworthiness is equal to or higher than that of such Party; provided, however, that in each such case, any such assignee shall agree in writing to be bound by the terms and conditions hereof and so long as the transferring Party delivers such tax and enforceability assurance as the non-transferring Party may reasonably request.

10.6 Governing Law. THIS AGREEMENT AND THE RIGHTS AND DUTIES OF

THE PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED,

ENFORCED AND PERFORMED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. EACH

PARTY WAIVES ITS RESPECTIVE RIGHT TO ANY JURY TRIAL WITH RESPECT TO ANY LITIGATION ARISING UNDER OR IN CONNECTION WITH THIS AGREEMENT.

Page 122 of 438 ends

10.7 Notices. All notices, requests, statements or payments shall be made as specified in the Cover Sheet. Notices (other than scheduling requests) shall, unless otherwise specified herein, be in writing and may be delivered by hand delivery, United States mail, overnight courier service or facsimile. Notice by facsimile or hand delivery shall be effective at the close of business on the day actually received, if received during business hours on a Business Day, and otherwise shall be effective at the close of business on the next Business Day. Notice by overnight United States mail or courier shall be effective on the next Business Day after it was sent. A Party may change its addresses by providing notice of same in accordance herewith.

10.8 General. This Master Agreement (including the exhibits, schedules and any written supplements hereto), the Party A Tariff, if any, the Party B Tariff, if any, any designated collateral, credit support or margin agreement or similar arrangement between the Parties and all Transactions (including any Confirmation accepted in accordance with Section 2.3) constitute the entire agreement between the Parties relating to the subject matter. Notwithstanding the foregoing, any collateral, credit support or margin agreement or similar arrangement between the Parties shall, upon designation by the Parties, be deemed part of this Agreement and shall be incorporated herein by reference. This Agreement shall be considered for all purposes as prepared through the joint efforts of the parties and shall not be construed against one party or the other as a result of the preparation, substitution, submission or other event of negotiation, drafting or execution hereof. Except to the extent herein provided for, no amendment or modification to this Master Agreement shall be enforceable unless reduced to writing and executed by both Parties. Each Party agrees if it seeks to amend any applicable wholesale power sales tariff during the term of this Agreement, such amendment will not in any way affect outstanding Transactions under this Agreement without the prior written consent of the other Party. Each Party further agrees that it will not assert, or defend itself, on the basis that any applicable tariff is inconsistent with this Agreement. This Agreement shall not impart any rights enforceable by any third party (other than a permitted successor or assignee bound to this Agreement). Waiver by a Party of any default by the other Party shall not be construed as a waiver of any other default. Any provision declared or rendered unlawful by any applicable court of law or regulatory agency or deemed unlawful because of a statutory change (individually or collectively, such events referred to as “Regulatory Event”) will not otherwise affect the remaining lawful obligations that arise under this Agreement; and provided, further, that if a Regulatory Event occurs, the Parties shall use their best efforts to reform this Agreement in order to give effect to the original intention of the Parties. The term “including” when used in this Agreement shall be by way of example only and shall not be considered in any way to be in limitation. The headings used herein are for convenience and reference purposes only. All indemnity and audit rights shall survive the termination of this Agreement for twelve (12) months. This Agreement shall be binding on each Party’s successors and permitted assigns.

10.9 Audit. Each Party has the right, at its sole expense and during normal working hours, to examine the records of the other Party to the extent reasonably necessary to verify the accuracy of any statement, charge or computation made pursuant to this Master Agreement. If requested, a Party shall provide to the other Party statements evidencing the Quantity delivered at the Delivery Point. If any such examination reveals any inaccuracy in any statement, the necessary adjustments in such statement and the payments thereof will be made promptly and shall bear interest calculated at the Interest Rate from the date the overpayment or underpayment was made until paid; provided, however, that no adjustment for any statement or payment will be

Page 123 of 438 ends

43 Version 2.1 (modified 4/25/00)
©COPYRIGHT 2000 by the Edison Electric Institute and National Energy Marketers Association made unless objection to the accuracy thereof was made prior to the lapse of twelve (12) months from the rendition thereof, and thereafter any objection shall be deemed waived.

10.10 Forward Contract. The Parties acknowledge and agree that all Transactions constitute “forward contracts” within the meaning of the United States Bankruptcy Code.

10.11 Confidentiality. If the Parties have elected on the Cover Sheet to make this Section 10.11 applicable to this Master Agreement, neither Party shall disclose the terms or conditions of a Transaction under this Master Agreement to a third party (other than the Party’s employees, lenders, counsel, accountants or advisors who have a need to know such information and have agreed to keep such terms confidential) except in order to comply with any applicable law, regulation, or any exchange, control area or independent system operator rule or in connection with any court or regulatory proceeding; provided, however, each Party shall, to the extent practicable, use reasonable efforts to prevent or limit the disclosure. 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.

Page 124 of 438 ends

SCHEDULE M
(THIS SCHEDULE IS INCLUDED IF THE APPROPRIATE BOX ON THE COVER

SHEET IS MARKED INDICATING A PARTY IS A GOVERNMENTAL ENTITY OR

PUBLIC POWER SYSTEM)
A. The Parties agree to add the following definitions in Article One. “Act” means ______________________________.1
“Governmental Entity or Public Power System” means a
municipality, county, governmental board, public power authority, public utility district, joint action agency, or other similar political subdivision or public entity of the United States, one or more States or territories or any combination thereof.
“Special Fund” means a fund or account of the Governmental Entity or Public Power System set aside and or pledged to satisfy the Public Power System’s obligations hereunder out of which amounts shall be paid to satisfy all of the Public Power System’s obligations under this Master Agreement for the entire Delivery Period.

B. The following sentence shall be added to the end of the definition of “Force Majeure” in Article One.

If the Claiming Party is a Governmental Entity or Public Power System, Force Majeure does not include any action taken by the Governmental Entity or Public Power System in its governmental capacity.

C. The Parties agree to add the following representations and warranties to Section 10.2:

Further and with respect to a Party that is a Governmental Entity or Public Power System, such Governmental Entity or Public Power System represents and warrants to the other Party continuing throughout the term of this Master Agreement, with respect to this Master Agreement and each Transaction, as follows: (i) all acts necessary to the valid execution, delivery and performance of this Master Agreement, including without limitation, competitive bidding, public notice, election, referendum, prior appropriation or other required procedures has or will be taken and performed as required under the Act and the Public Power System’s ordinances, bylaws or other regulations, (ii) all persons making up the governing body of Governmental Entity or Public Power System are the duly elected or appointed incumbents in their positions and hold such 1 Cite the state enabling and other relevant statutes applicable to Governmental Entity or Public Power System.

Page 125 of 438 ends

45 Version 2.1 (modified 4/25/00)
©COPYRIGHT 2000 by the Edison Electric Institute and National Energy Marketers Association positions in good standing in accordance with the Act and other applicable law, (iii) entry into and performance of this Master Agreement by Governmental Entity or Public Power System are for a proper public purpose within the meaning of the Act and all other relevant constitutional, organic or other governing documents and applicable law, (iv) the term of this Master Agreement does not extend beyond any applicable limitation imposed by the Act or other relevant constitutional, organic or other governing documents and applicable law, (v) the Public Power System’s obligations to make payments hereunder are unsubordinated obligations and such payments are (a) operating and maintenance costs (or similar designation) which enjoy first priority of payment at all times under any and all bond ordinances or indentures to which it is a party, the Act and all other relevant constitutional, organic or other governing documents and applicable law or (b) otherwise not subject to any prior claim under any and all bond ordinances or indentures to which it is a party, the Act and all other relevant constitutional, organic or other governing documents and applicable law and are available without limitation or deduction to satisfy all Governmental Entity or Public Power System’ obligations hereunder and under each Transaction or (c) are to be made solely from a Special Fund, (vi) entry into and performance of this Master Agreement and each Transaction by the Governmental Entity or Public Power System will not adversely affect the exclusion from gross income for federal income tax purposes of interest on any obligation of Governmental Entity or Public Power System otherwise entitled to such exclusion, and (vii) obligations to make payments hereunder do not constitute any kind of indebtedness of Governmental Entity or Public Power System or create any kind of lien on, or security interest in, any property or revenues of Governmental Entity or Public Power System which, in either case, is proscribed by any provision of the 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.

D. The Parties agree to add the following sections to Article Three:

Section 3.4 Public Power System’s Deliveries. On the Effective Date and as a condition to the obligations of the other Party under this Agreement, Governmental Entity or Public Power System shall provide the other Party hereto (i) certified copies of all ordinances, resolutions, public notices and other documents evidencing the necessary authorizations with respect to the execution, delivery and performance by Governmental Entity or Public Power System of this Master Agreement and (ii) an opinion of counsel for Governmental Entity or Public Power System, in form and substance reasonably satisfactory to the Other Party, regarding the validity, binding effect and enforceability of this Master Agreement against Governmental Entity or Public Power System in

Page 126 of 438 ends

46 Version 2.1 (modified 4/25/00)
©COPYRIGHT 2000 by the Edison Electric Institute and National Energy Marketers Association respect of the Act and all other relevant constitutional organic or other governing documents and applicable law.

Section 3.5 No Immunity Claim. Governmental Entity or Public Power System warrants and covenants that with respect to its contractual obligations hereunder and performance thereof, it will not claim immunity on the grounds of sovereignty or similar grounds with respect to itself or its revenues or assets from (a) suit, (b) jurisdiction of court (including a court located outside 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.

E. If the appropriate box is checked on the Cover Sheet, as an alternative to selecting one of the options under Section 8.3, the Parties agree to add the following section to Article Three:

Section 3.6 Governmental Entity or Public Power System
Security. With respect to each Transaction, Governmental Entity or Public Power System shall either (i) have created and set aside a Special Fund or (ii) upon execution of this Master Agreement and prior to the commencement of each subsequent fiscal year of Governmental Entity or Public Power System during any Delivery Period, have obtained all necessary budgetary approvals and certifications for payment of all of its obligations under this Master Agreement for such fiscal year; any breach of this provision shall be deemed to have arisen during a fiscal period of Governmental Entity or Public Power System for which budgetary approval or certification of its obligations under this Master Agreement is in effect and, notwithstanding anything to the contrary in Article Four, an Early Termination Date shall automatically and without further notice occur hereunder as of such date wherein Governmental Entity or Public Power System shall be treated as the Defaulting Party. Governmental Entity or Public Power System shall have allocated to the Special Fund or its general funds a revenue base that is adequate to cover Public Power System’s payment obligations hereunder throughout the entire Delivery Period.

F. If the appropriate box is checked on the Cover Sheet, the Parties agree to add the following section to Article Eight:

Section 8.4 Governmental Security. As security for payment and performance of Public Power System’s obligations hereunder, Public Power System hereby pledges, sets over, assigns and grants to the other Party a security interest in all of Public Power System’s right, title and interest in and to [specify collateral].

Page 127 of 438 ends

47 Version 2.1 (modified 4/25/00)
©COPYRIGHT 2000 by the Edison Electric Institute and National Energy Marketers Association G. The Parties agree to add the following sentence at the end of Section 10.6 - Governing Law:

NOTWITHSTANDING THE FOREGOING, IN RESPECT OF THE

APPLICABILITY OF THE ACT AS HEREIN PROVIDED, THE LAWS
OF THE STATE OF _____________2 SHALL APPLY.
2 Insert relevant state for Governmental Entity or Public Power System.

Page 128 of 438 ends

48 Version 2.1 (modified 4/25/00)
©COPYRIGHT 2000 by the Edison Electric Institute and National Energy Marketers Association SCHEDULE P: PRODUCTS AND RELATED DEFINITIONS
“Ancillary Services” means any of the services identified by a Transmission Provider in its transmission tariff as “ancillary services” including, but not limited to, regulation and frequency response, energy imbalance, operating reserve-spinning and operating reserve-supplemental, as may be specified in the Transaction. “Capacity” has the meaning specified in the Transaction. “Energy” means three-phase, 60-cycle alternating current electric energy, expressed in megawatt hours.
“Firm (LD)” means, with respect to a Transaction, that either Party shall be relieved of its obligations to sell and deliver or purchase and receive without liability only to the extent that, and for the period during which, such performance is prevented by Force Majeure. In the absence of Force Majeure, the Party to which performance is owed shall be entitled to receive from the Party which failed to deliver/receive an amount determined pursuant to Article Four. “Firm Transmission Contingent - Contract Path” means, with respect to a Transaction, that the performance of either Seller or Buyer (as specified in the Transaction) shall be excused, and no damages shall be payable including any amounts determined pursuant to Article Four, if the transmission for such Transaction is interrupted or curtailed and (i) such Party has provided for firm transmission with the transmission provider(s) for the Product in the case of the Seller from the generation source to the Delivery Point or in the case of the Buyer from the Delivery Point to the ultimate sink, and (ii) such interruption or curtailment is due to “force majeure” or “uncontrollable force” or a similar term as defined under the applicable transmission provider’s tariff. This contingency shall excuse performance for the duration of the interruption or curtailment notwithstanding the provisions of the definition of “Force Majeure” in Section 1.23 to the contrary.
“Firm Transmission Contingent - Delivery Point” means, with respect to a Transaction, that the performance of either Seller or Buyer (as specified in the Transaction) shall be excused, and no damages shall be payable including any amounts determined pursuant to Article Four, if the transmission to the Delivery Point (in the case of Seller) or from the Delivery Point (in the case of Buyer) for such Transaction is interrupted or curtailed and (i) such Party has provided for firm transmission with the transmission provider(s) for the Product, in the case of the Seller, to be delivered to the Delivery Point or, in the case of Buyer, to be received at the Delivery Point and (ii) such interruption or curtailment is due to “force majeure” or “uncontrollable force” or a similar term as defined under the applicable transmission provider’s tariff. This transmission contingency excuses performance for the duration of the interruption or curtailment, notwithstanding the provisions of the definition of “Force Majeure” in Section 1.23 to the contrary. Interruptions or curtailments of transmission other than the transmission either immediately to or from the Delivery Point shall not excuse performance “Firm (No Force Majeure)” means, with respect to a Transaction, that if either Party fails to perform its obligation to sell and deliver or purchase and receive the Product, the Party to which performance is owed shall be entitled to receive from the Party which failed to perform an

Page 129 of 438 ends

49 Version 2.1 (modified 4/25/00)
©COPYRIGHT 2000 by the Edison Electric Institute and National Energy Marketers Association amount determined pursuant to Article Four. Force Majeure shall not excuse performance of a Firm (No Force Majeure) Transaction.
“Into ______________ (the “Receiving Transmission Provider”), Seller’s Daily Choice” means that, in accordance with the provisions set forth below, (1) the Product shall be scheduled and delivered to an interconnection or interface (“Interface”) either (a) on the Receiving Transmission Provider’s transmission system border or (b) within the control area of the Receiving Transmission Provider if the Product is from a source of generation in that control area, which Interface, in either case, the Receiving Transmission Provider identifies as available for delivery of the Product in or into its control area; and (2) Seller has the right on a daily prescheduled basis to designate the Interface where the Product shall be delivered. An “Into” Product shall be subject to the following provisions:

1. Prescheduling and Notification. Subject to the provisions of Section 6, not later than the prescheduling deadline of 11:00 a.m. CPT on the Business Day before the next delivery day or as otherwise agreed to by Buyer and Seller, Seller shall notify Buyer (“Seller’s Notification”) of Seller’s immediate upstream counterparty and the Interface (the “Designated Interface”) where Seller shall deliver the Product for the next delivery day, and Buyer shall notify Seller of Buyer’s immediate downstream counterparty.

2. Availability of “Firm Transmission” to Buyer at Designated Interface; “Timely Request for Transmission,” “ADI” and “Available Transmission.” In determining availability to Buyer of next-day firm transmission (“Firm Transmission”) from the Designated Interface, a “Timely Request for Transmission” shall mean a properly completed request for Firm Transmission made by Buyer in accordance with the controlling tariff procedures, which request shall be submitted to the Receiving Transmission Provider no later than 30 minutes after delivery of Seller’s Notification, provided, however, if the Receiving Transmission Provider is not accepting requests for Firm Transmission at the time of Seller’s Notification, then such request by Buyer shall be made within 30 minutes of the time when the Receiving Transmission Provider first opens thereafter for purposes of accepting requests for Firm Transmission.

Pursuant to the terms hereof, delivery of the Product may under certain circumstances be redesignated to occur at an Interface other than the Designated Interface (any such alternate designated interface, an “ADI”) either (a) on the Receiving Transmission Provider’s transmission system border or (b) within the control area of the Receiving Transmission Provider if the Product is from a source of generation in that control area, which ADI, in either case, the Receiving Transmission Provider identifies as available for delivery of the Product in or into its control area using either firm or non-firm transmission, as available on a day-ahead or hourly basis (individually or collectively referred to as “Available Transmission”) within the Receiving Transmission Provider’s transmission system.

3. Rights of Buyer and Seller Depending Upon Availability of/Timely Request for Firm Transmission.

A. Timely Request for Firm Transmission made by Buyer, Accepted by the Receiving Transmission Provider and Purchased by Buyer. If a Timely Request for Firm Transmission is made by Buyer and is accepted by the Receiving Transmission Provider

Page 130 of 438 ends

50 Version 2.1 (modified 4/25/00)
©COPYRIGHT 2000 by the Edison Electric Institute and National Energy Marketers Association and Buyer purchases such Firm Transmission, then Seller shall deliver and Buyer shall receive the Product at the Designated Interface.
i. If the Firm Transmission purchased by Buyer within the Receiving Transmission Provider’s transmission system from the Designated Interface ceases to be available to Buyer for any reason, or if Seller is unable to deliver the Product at the Designated Interface for any reason except Buyer’s non-performance, then at Seller’s choice from among the following, Seller shall: (a) to the extent Firm Transmission is available to Buyer from an ADI on a day-ahead basis, require Buyer to purchase such Firm Transmission from such ADI, and schedule and deliver the affected portion of the Product to such ADI on the basis of Buyer’s purchase of Firm Transmission, or (b) require Buyer to purchase non-firm transmission, and schedule and deliver the affected portion of the Product on the basis of Buyer’s purchase of non-firm transmission from the Designated Interface or an ADI designated by Seller, or (c) to the extent firm transmission is available on an hourly basis, require Buyer to purchase firm transmission, and schedule and deliver the affected portion of the Product on the basis of Buyer’s purchase of such hourly firm transmission from the Designated Interface or an ADI designated by Seller.
ii. If the Available Transmission utilized by Buyer as required by Seller pursuant to Section 3A(i) ceases to be available to Buyer for any reason, then Seller shall again have those alternatives stated in Section 3A(i) in order to satisfy its obligations.
iii. Seller’s obligation to schedule and deliver the Product at an ADI is subject to Buyer’s obligation referenced in Section 4B to cooperate reasonably therewith. If Buyer and Seller cannot complete the scheduling and/or delivery at an ADI, then Buyer shall be deemed to have satisfied its receipt obligations to Seller and Seller shall be deemed to have failed its delivery obligations to Buyer, and Seller shall be liable to Buyer for amounts determined pursuant to Article Four.
iv. In each instance in which Buyer and Seller must make alternative scheduling arrangements for delivery at the Designated Interface or an ADI pursuant to Sections 3A(i) or (ii), and Firm Transmission had been purchased by both Seller and Buyer into and within the Receiving Transmission Provider’s transmission system as to the scheduled delivery which could not be completed as a result of the interruption or curtailment of such Firm Transmission, Buyer and Seller shall bear their respective transmission expenses and/or associated congestion charges incurred in connection with efforts to complete delivery by such alternative scheduling and delivery arrangements. In any instance except as set forth in the immediately preceding sentence, Buyer and Seller must make alternative scheduling arrangements for delivery at the Designated Interface or an ADI under Sections 3A(i) or (ii), Seller shall be responsible for any additional transmission purchases and/or associated congestion charges incurred by Buyer in connection with such alternative scheduling arrangements.

Page 131 of 438 ends

51 Version 2.1 (modified 4/25/00)
©COPYRIGHT 2000 by the Edison Electric Institute and National Energy Marketers Association B. Timely Request for Firm Transmission Made by Buyer but Rejected by the Receiving Transmission Provider. If Buyer’s Timely Request for Firm Transmission is rejected by the Receiving Transmission Provider because of unavailability of Firm Transmission from the Designated Interface, then Buyer shall notify Seller within 15 minutes after receipt of the Receiving Transmission Provider’s notice of rejection (“Buyer’s Rejection Notice”). If Buyer timely notifies Seller of such unavailability of Firm Transmission from the Designated Interface, then Seller shall be obligated either (1) to the extent Firm Transmission is available to Buyer from an ADI on a day-ahead basis, to require Buyer to purchase (at Buyer’s own expense) such Firm Transmission from such ADI and schedule and deliver the Product to such ADI on the basis of Buyer’s purchase of Firm Transmission, and thereafter the provisions in Section 3A shall apply, or (2) to require Buyer to purchase (at Buyer’s own expense) non-firm transmission, and schedule and deliver the Product on the basis of Buyer’s purchase of non-firm transmission from the Designated Interface or an ADI designated by the Seller, in which case Seller shall bear the risk of interruption or curtailment of the non-firm transmission; provided, however, that if the non-firm transmission is interrupted or curtailed or if Seller is unable to deliver the Product for any reason, Seller shall have the right to schedule and deliver the Product to another ADI in order to satisfy its delivery obligations, in which case Seller shall be responsible for any additional transmission purchases and/or associated congestion charges incurred by Buyer in connection with Seller’s inability to deliver the Product as originally prescheduled. If Buyer fails to timely notify Seller of the unavailability of Firm Transmission, then Buyer shall bear the risk of interruption or curtailment of transmission from the Designated Interface, and the provisions of Section 3D shall apply.

C. Timely Request for Firm Transmission Made by Buyer, Accepted by the Receiving Transmission Provider and not Purchased by Buyer. If Buyer’s Timely Request for Firm Transmission is accepted by the Receiving Transmission Provider but Buyer elects to purchase non-firm transmission rather than Firm Transmission to take delivery of the Product, then Buyer shall bear the risk of interruption or curtailment of transmission from the Designated Interface. In such circumstances, if Seller’s delivery is interrupted as a result of transmission relied upon by Buyer from the Designated Interface, then Seller shall be deemed to have satisfied its delivery obligations to Buyer, Buyer shall be deemed to have failed to receive the Product and Buyer shall be liable to Seller for amounts determined pursuant to Article Four.

D. No Timely Request for Firm Transmission Made by Buyer, or Buyer Fails to Timely Send Buyer’s Rejection Notice. If Buyer fails to make a Timely Request for Firm Transmission or Buyer fails to timely deliver Buyer’s Rejection Notice, then Buyer shall bear the risk of interruption or curtailment of transmission from the Designated Interface. In such circumstances, if Seller’s delivery is interrupted as a result of transmission relied upon by Buyer from the Designated Interface, then Seller shall be deemed to have satisfied its delivery obligations to Buyer, Buyer shall be deemed to have failed to receive the Product and Buyer shall be liable to Seller for amounts determined pursuant to Article Four.

Page 132 of 438 ends

4. Transmission.

A. Seller’s Responsibilities. Seller shall be responsible for transmission required to deliver the Product to the Designated Interface or ADI, as the case may be. It is expressly agreed that Seller is not required to utilize Firm Transmission for its delivery obligations hereunder, and Seller shall bear the risk of utilizing non-firm transmission. If Seller’s scheduled delivery to Buyer is interrupted as a result of Buyer’s attempted transmission of the Product beyond the Receiving Transmission Provider’s system border, then Seller will be deemed to have satisfied its delivery obligations to Buyer, Buyer shall be deemed to have failed to receive the Product and Buyer shall be liable to Seller for damages pursuant to Article Four.

B. Buyer’s Responsibilities. Buyer shall be responsible for transmission required to receive and transmit the Product at and from the Designated Interface or ADI, as the case may be, and except as specifically provided in Section 3A and 3B, shall be responsible for any costs associated with transmission therefrom. If Seller is attempting to complete the designation of an ADI as a result of Seller’s rights and obligations hereunder, Buyer shall co-operate reasonably with Seller in order to effect such alternate designation.

5. Force Majeure. An “Into” Product shall be subject to the “Force Majeure” provisions in Section 1.23.

6. Multiple Parties in Delivery Chain Involving a Designated Interface. Seller and Buyer recognize that there may be multiple parties involved in the delivery and receipt of the Product at the Designated Interface or ADI to the extent that (1) Seller may be purchasing the Product from a succession of other sellers (“Other Sellers”), the first of which Other Sellers shall be causing the Product to be generated from a source (“Source Seller”) and/or (2) Buyer may be selling the Product to a succession of other buyers (“Other Buyers”), the last of which Other Buyers shall be using the Product to serve its energy needs (“Sink Buyer”). Seller and Buyer further recognize that in certain Transactions neither Seller nor Buyer may originate the decision as to either (a) the original identification of the Designated Interface or ADI (which designation may be made by the Source Seller) or (b) the Timely Request for Firm Transmission or the purchase of other Available Transmission (which request may be made by the Sink Buyer).

Accordingly, Seller and Buyer agree as follows:

A. If Seller is not the Source Seller, then Seller shall notify Buyer of the Designated Interface promptly after Seller is notified thereof by the Other Seller with whom Seller has a contractual relationship, but in no event may such designation of the Designated Interface be later than the prescheduling deadline pertaining to the Transaction between Buyer and Seller pursuant to Section 1.

B. If Buyer is not the Sink Buyer, then Buyer shall notify the Other Buyer with whom Buyer has a contractual relationship of the Designated Interface promptly after Seller notifies Buyer thereof, with the intent being that the party bearing actual responsibility to secure transmission shall have up to 30 minutes after receipt of the Designated Interface to submit its Timely Request for Firm Transmission.

Page 133 of 438 ends

53 Version 2.1 (modified 4/25/00)
©COPYRIGHT 2000 by the Edison Electric Institute and National Energy Marketers Association C. Seller and Buyer each agree that any other communications or actions required to be given or made in connection with this “Into Product” (including without limitation, information relating to an ADI) shall be made or taken promptly after receipt of the relevant information from the Other Sellers and Other Buyers, as the case may be.

D. Seller and Buyer each agree that in certain Transactions time is of the essence and it may be desirable to provide necessary information to Other Sellers and Other Buyers in order to complete the scheduling and delivery of the Product.

Accordingly, Seller and Buyer agree that each has the right, but not the obligation, to provide information at its own risk to Other Sellers and Other Buyers, as the case may be, in order to effect the prescheduling, scheduling and delivery of the Product “Native Load” means the demand imposed on an electric utility or an entity by the requirements of retail customers located within a franchised service territory that the electric utility or entity has statutory obligation to serve.
“Non-Firm” means, with respect to a Transaction, that delivery or receipt of the Product may be interrupted for any reason or for no reason, without liability on the part of either Party. “System Firm” means that the Product will be supplied from the owned or controlled generation or pre-existing purchased power assets of the system specified in the Transaction (the “System”) with non-firm transmission to and from the Delivery Point, unless a different Transmission Contingency is specified in a Transaction. Seller’s failure to deliver shall be excused: (i) by an event or circumstance which prevents Seller from performing its obligations, which event or circumstance was not anticipated as of the date the Transaction was agreed to, which is not within the reasonable control of, or the result of the negligence of, the Seller; (ii) by Buyer’s failure to perform; (iii) to the extent necessary to preserve the integrity of, or prevent or limit any instability on, the System; (iv) to the extent the System or the control area or reliability council within which the System operates declares an emergency condition, as determined in the system’s, or the control area’s, or reliability council’s reasonable judgment; or (v) by the interruption or curtailment of transmission to the Delivery Point or by the occurrence of any Transmission Contingency specified in a Transaction as excusing Seller’s performance. Buyer’s failure to receive shall be excused (i) by Force Majeure; (ii) by Seller’s failure to perform, or (iii) by the interruption or curtailment of transmission from the Delivery Point or by the occurrence of any Transmission Contingency specified in a Transaction as excusing Buyer’s performance.

In any of such events, neither party shall be liable to the other for any damages, including any amounts determined pursuant to Article Four.
“Transmission Contingent” means, with respect to a Transaction, that the performance of either Seller or Buyer (as specified in the Transaction) shall be excused, and no damages shall be payable including any amounts determined pursuant to Article Four, if the transmission for such Transaction is unavailable or interrupted or curtailed for any reason, at any time, anywhere from the Seller’s proposed generating source to the Buyer’s proposed ultimate sink, regardless of whether transmission, if any, that such Party is attempting to secure and/or has purchased for the Product is firm or non-firm. If the transmission (whether firm or non-firm) that Seller or Buyer is attempting to secure is from source to sink is unavailable, this contingency excuses performance for the entire Transaction. If the transmission (whether firm or non-firm) that Seller

Page 134 of 438 ends

54 Version 2.1 (modified 4/25/00)
©COPYRIGHT 2000 by the Edison Electric Institute and National Energy Marketers Association or Buyer has secured from source to sink is interrupted or curtailed for any reason, this contingency excuses performance for the duration of the interruption or curtailment notwithstanding the provisions of the definition of “Force Majeure” in Article 1.23 to the contrary.
“Unit Firm” means, with respect to a Transaction, that the Product subject to the Transaction is intended to be supplied from a generation asset or assets specified in the Transaction. Seller’s failure to deliver under a “Unit Firm” Transaction shall be excused: (i) if the specified generation asset(s) are unavailable as a result of a Forced Outage (as defined in the NERC Generating Unit Availability Data System (GADS) Forced Outage reporting guidelines) or (ii) by an event or circumstance that affects the specified generation asset(s) so as to prevent Seller from performing its obligations, which event or circumstance was not anticipated as of the date the Transaction was agreed to, and which is not within the reasonable control of, or the result of the negligence of, the Seller or (iii) by Buyer’s failure to perform. In any of such events, Seller shall not be liable to Buyer for any damages, including any amounts determined pursuant to Article Four.

Page 135 of 438 ends

EXHIBIT A

MASTER POWER PURCHASE AND SALE AGREEMENT

CONFIRMATION LETTER
This confirmation letter shall confirm the Transaction agreed to on ___________, ___ between __________________________ (“Party A”) and _____________________ (“Party B”) regarding the sale/purchase of the Product under the terms and conditions as follows:

Seller:

Buyer:

Product:
[] Into _________________, Seller’s Daily Choice
[] Firm (LD)
[] Firm (No Force Majeure)
[] System Firm
(Specify System: )
[] Unit Firm
(Specify Unit(s): )
[] Other
[] Transmission Contingency (If not marked, no transmission contingency) [] FT-Contract Path Contingency [] Seller [] Buyer
[] FT-Delivery Point Contingency [] Seller [] Buyer
[] Transmission Contingent [] Seller [] Buyer
[] Other transmission contingency
(Specify: )
Contract Quantity:

Delivery Point:

Contract Price:

Energy Price:

Other Charges:

Page 136 of 438 ends

Page 2 ends

Delivery Period:

Special Conditions:

Scheduling:

Option Buyer:

Option Seller:

Type of Option:

Strike Price:

Premium:

Exercise Period:

This confirmation letter is being provided pursuant to and in accordance with the Master Power Purchase and Sale Agreement dated ______________ (the “Master Agreement”) between Party A and Party B, and constitutes part of and is subject to the terms and provisions of such Master Agreement. Terms used but not defined herein shall have the meanings ascribed to them in the Master Agreement.
[Party A] [Party B]
Name: Name:

Title: Title:

Phone No: Phone No:

Fax: Fax:

Page 137 of 438 ends

1 COLLATERAL ANNEX
This Collateral Annex, together with the Paragraph 10 Elections, (the “Collateral Annex”) supplements, forms a part of, and is subject to, the EEI Master Power Purchase and Sale Agreement, dated February 28, 2024, including the Cover Sheet and any other annexes thereto between Citigroup Energy Inc. ("Party A") and Central Coast Community Energy ("Party B").

Capitalized terms used in this Collateral Annex but not defined herein shall have the meanings given such terms in the Agreement.

The obligations of each Party under the Agreement shall be secured in accordance with the provisions of this Collateral Annex, which, except as provided below, sets forth the exclusive conditions under which a Party will be required to Transfer Performance Assurance in the form of Cash, a Letter of Credit or other property as agreed to by the Parties, as well as the exclusive conditions under which a Party will release such Performance Assurance. This Collateral Annex supercedes and replaces in its entirety Sections 8.1(c), 8.2(c) and 8.3 of the Agreement and the defined terms used therein to the extent that such terms are otherwise defined and used in this Collateral Annex. In addition, to the extent that the Parties have specified on the Cover Sheet that Sections 8.1(b), 8.1(d), 8.2(b) or 8.2(d) of the Agreement are applicable, then the definition of Performance Assurance as used in this Collateral Annex shall apply and Paragraphs 2, 6, 7 and 9 of this Collateral Annex shall apply to any such Performance Assurance posted under such provisions, it being understood that nothing contained in this Collateral Annex shall change any election that the Parties have specified on the Cover Sheet with respect to Sections 8.1(b), 8.1(d),

8.2(b) or 8.2(d) of the Agreement, which provisions require a Party to Transfer Performance Assurance under certain circumstances not contemplated by this Collateral Annex.

Paragraph 1. Definitions.

For purposes of this Collateral Annex, the following terms have the respective definitions set forth below:
“Calculation Date" means any Local Business Day on which a Party chooses or is requested by the other Party to make the determinations referred to in Paragraphs 3, 4, 5 or 8 of this Collateral Annex.
“Cash” means U.S. dollars held by or on behalf of a Party as Performance Assurance hereunder.
"Collateral Account" shall have the meaning attributed to it in Paragraph 6(a)(ii)(B). "Paragraph 10 Cover Sheet" means the Cover Sheet attached to this Collateral Annex setting forth certain elections governing this Collateral Annex. "Collateral Requirement" shall have the meaning attributed to it in Paragraph 3(b).

Page 138 of 438 ends

2 "Collateral Threshold" means, with respect to a Party, the collateral threshold, if any, set forth in the Paragraph 10 Cover Sheet for a Party.
"Collateral Value" means (a) with respect to Cash, the face amount thereof; (b) with respect to Letters of Credit, the Valuation Percentage multiplied by the stated amount then available under the Letter of Credit to be unconditionally drawn by the beneficiary thereof; and (c) with respect to other forms of Performance Assurance, the Valuation Percentage multiplied by the fair market value on any Calculation Date of each item of Performance Assurance on deposit with, or held by or for the benefit of, a Party pursuant to this Collateral Annex as determined by such Party in a commercially reasonable manner. "Credit Rating" means with respect to any entity, on any date of determination, the respective ratings then assigned to such entity’s unsecured, senior long-term debt or deposit obligations (not supported by third party credit enhancement) by S&P, Moody’s or other specified rating agency or agencies or if such entity does not have a rating for its unsecured, senior long-term debt or deposit obligations, then the rating assigned to such entity as its “corporate credit rating” by S&P.
“Credit Rating Event" shall have the meaning attributed to it in Paragraph 6(a)(iii). "Current Mark-to-Market Value" of an outstanding Transaction, on any Calculation Date, means the amount, as calculated in good faith and in a commercially reasonable manner, which a Party to the Agreement would pay to (a negative Current Mark-to-Market Value) or receive from (a positive Current Mark-to-Market Value) the other Party as the Settlement Amount (calculated at the mid-point between the bid price and the offer price) for such Transaction. "Custodian" shall have the meaning attributed to it in Paragraph 6(a)(i). "Downgraded Party" shall have the meaning attributed to it in Paragraph 6(a)(i). "Eligible Collateral" means, with respect to a Party, the Performance Assurance specified for such Party on the Paragraph 10 Cover Sheet.
"Exposure" of one Party (“Party X”) to the other Party (“Party Y”) for each Transaction means (without duplication) as of any Calculation Date the sum of the following:
(a) the aggregate of all amounts in respect of such Transaction that are owed or otherwise accrued and payable (regardless of whether such amounts have been or could be invoiced) to Party X and that remain unpaid as of such Calculation Date minus the aggregate of all amounts in respect of such Transaction that are owed or otherwise accrued and payable (regardless of whether such amounts have been or could be invoiced) to Party Y and that remain unpaid as of such Calculation Date; plus
(b) the Current Mark-to-Market Value of such Transaction to Party X. "Exposure Amount" shall have the meaning set forth in Paragraph 3(a).

Page 139 of 438 ends

3 "Independent Amount" means, with respect to a Party, the amount, if any, set forth in the Paragraph 10 Cover Sheet for such Party (which amount, if designated, shall either be a Fixed Independent Amount, a Full Floating Independent Amount or a Partial Floating Independent Amount, in each case, as designated on the Paragraph 10 Cover Sheet), or if no amount is specified, zero, or with respect to either Party, an additional or reduced amount agreed to as such for that Party in respect of a Transaction.
"Interest Amount" means with respect to a Party and an Interest Period, the sum of the daily interest amounts for all days in such Interest Period; each daily interest amount to be determined by such Party as follows: (a) the amount of Cash held by such Party on that day; multiplied by (b) the Interest Rate for that day, divided by (c) 360. "Interest Period" means the period from (and including) the last Local Business Day on which an Interest Amount was Transferred by a Party (or if no Interest Amount has yet been Transferred by such Party, the Local Business Day on which Cash was Transferred to such Party) to (but excluding) the Local Business Day on which the current Interest Amount is to be Transferred.
"Interest Rate" means, in respect of a Party holding Cash, the rate specified for such Party in the Paragraph 10 Cover Sheet.
"Letter of Credit" means an irrevocable, transferable, standby letter of credit, issued by a major U.S. commercial bank or the U.S. branch office of a foreign bank with, in either case, a Credit Rating of at least (a) "A-" by S&P and "A3" by Moody's, if such entity is rated by both S&P and Moody’s or (b) "A-" by S&P or "A3" by Moody's, if such entity is rated by either S&P or Moody’s but not both, substantially in the form set forth in Schedule 1 attached hereto, with such changes to the terms in that form as the issuing bank may require and as may be acceptable to the beneficiary thereof.
"Letter of Credit Default" means with respect to a Letter of Credit, the occurrence of any of the following events: (a) the issuer of such Letter of Credit shall fail to maintain a Credit Rating of at least (i) "A-" by S&P or "A3" by Moody’s, if such issuer is rated by both S&P and Moody’s, (ii) “A-“ by S&P, if such issuer is rated only by S&P, or (iii) "A3" by Moody’s, if such issuer is rated only by Moody’s; (b) the issuer of the Letter of Credit shall fail to comply with or perform its obligations under such Letter of Credit; (c) the issuer of such Letter of Credit shall disaffirm, disclaim, repudiate or reject, in whole or in part, or challenge the validity of, such Letter of Credit; (d) such Letter of Credit shall expire or terminate, or shall fail or cease to be in full force and effect at any time during the term of the Agreement, in any such case without replacement; or (e) the issuer of such Letter of Credit shall become Bankrupt; provided, however, that no Letter of Credit Default shall occur or be continuing in any event with respect to a Letter of Credit after the time such Letter of Credit is required to be canceled or returned to a Party in accordance with the terms of this Collateral Annex. “Local Business Day” means, a day on which commercial banks are open for business (a) in relation to any payment, in the place where the relevant account is located and (b) in relation to any notice or other communication, in the city specified in the address for notice provided by the recipient.

Page 140 of 438 ends

4 "Minimum Transfer Amount" means, with respect to a Party, the amount, if any, set forth in the Paragraph 10 Cover Sheet for such Party.
"Net Exposure" shall have the meaning attributed to it in Paragraph 3(a). “Notification Time” means 11:00, New York time, on any Calculation Date or any different time specified in the Paragraph 10 Cover Sheet. "Obligations" shall have the meaning attributed to it in Paragraph 2. "Performance Assurance" means all Eligible Collateral, all other property acceptable to the Party to which it is Transferred, and all proceeds thereof, that has been Transferred to or received by a Party hereunder and not subsequently Transferred to the other Party pursuant to Paragraph 5 or otherwise received by the other Party. Any Interest Amount or portion thereof not Transferred pursuant to Paragraph 6(a)(iv) and any Cash received and held by a Party after drawing on any Letter of Credit will constitute Performance Assurance in the form of Cash, until all or any portion of such Cash is applied against Obligations owing to such Party pursuant to the provisions of this Collateral Annex. Any guaranty agreement executed by a Guarantor of a Party shall not constitute Performance Assurance hereunder.
“Pledging Party” shall have the meaning attributed to it in Paragraph 3(b). “Qualified Institution” means a commercial bank or trust company organized under the laws of the United States or a political subdivision thereof, with (i) a Credit Rating of at least (a) "A-" by S&P and "A3" by Moody's, if such entity is rated by both S&P and Moody’s or (b) "A-" by S&P or "A3" by Moody's, if such entity is rated by either S&P or Moody’s but not both, and (ii) having a capital and surplus of at least $1,000,000,000. “Reference Market-maker” means a leading dealer in the relevant market selected by a Party determining its Exposure in good faith from among dealers of the highest credit standing which satisfy all the criteria that such Party applies generally at the time in deciding whether to offer or to make an extension of credit.
"Rounding Amount" means, with respect to a Party, the amount, if any, set forth in the Paragraph 10 Cover Sheet for such Party.
“Secured Party” shall have the meaning attributed to it in Paragraph 3(b). "Transfer" means, with respect to any Performance Assurance or Interest Amount, and in accordance with the instructions of the Party entitled thereto:
(a) in the case of Cash, payment or transfer by wire transfer into one or more bank accounts specified by the recipient;
(b) in the case of Letters of Credit, delivery of the Letter of Credit or an amendment thereto to the recipient; and

Page 141 of 438 ends

5 (c) in the case of any other type of Performance Assurance, delivery thereof as specified by the recipient.
"Valuation Percentage" means, with respect to any Performance Assurance designated as Eligible Collateral on the Paragraph 10 Cover Sheet, the Valuation Percentage specified for such Performance Assurance on the Paragraph 10 Cover Sheet.

Paragraph 2. Encumbrance; Grant of Security Interest.

As security for the prompt and complete payment of all amounts due or that may now or hereafter become due from a Party to the other Party and the performance by a Party of all covenants and obligations to be performed by it pursuant to this Collateral Annex, the Agreement, all outstanding Transactions and any other documents, instruments or agreements executed in connection therewith (collectively, the "Obligations"), each Party hereby pledges, assigns, conveys and transfers to the other Party, and hereby grants to the other Party a present and continuing security interest in and to, and a general first lien upon and right of set off against, all Performance Assurance which has been or may in the future be Transferred to, or received by, the other Party and/or its Custodian, and all dividends, interest, and other proceeds from time to time received, receivable or otherwise distributed in respect of, or in exchange for, any or all of the foregoing and each Party agrees to take such action as the other Party reasonably requests in order to perfect the other Party's continuing security interest in, and lien on (and right of setoff against), such Performance Assurance.

Paragraph 3. Calculations of Collateral Requirement.
(a) On any Calculation Date, the "Exposure Amount" for each Party shall be calculated for all Transactions for which there are any Obligations remaining unpaid or unperformed, by calculating each Party's Exposure to the other Party in respect of each such Transaction and determining the net aggregate sum of all Exposures for all Transactions for each Party. The Party having the greater Exposure Amount at any time (the “Secured Party”) shall be deemed to have a "Net Exposure" to the other Party equal to the Secured Party’s Exposure Amount. (b) The "Collateral Requirement" for a Party (the “Pledging Party”) means the Secured Party’s Net Exposure minus the sum of:
(1) the Pledging Party's Collateral Threshold; plus
(2) the amount of Cash previously Transferred to the Secured Party, the amount of Cash held by the Secured Party as Performance Assurance as a result of drawing under any Letter of Credit, and any Interest Amount that has not yet been Transferred to the Pledging Party; plus
(3) the Collateral Value of each Letter of Credit and any other form of Performance Assurance (other than Cash) maintained by the Pledging Party for the benefit of the Secured Party; provided, however, that, the Collateral Requirement of a Party will be

Page 142 of 438 ends

6 deemed to be zero (0) whenever the calculation of such Party’s Collateral Requirement yields a number less than zero (0).

Paragraph 4. Delivery of Performance Assurance.

On any Calculation Date on which (a) no Event of Default or Potential Event of Default has occurred and is continuing with respect to the Secured Party, (b) no Early Termination Date has occurred or been designated as a result of an Event of Default with respect to the Secured Party for which there exist any unsatisfied payment Obligations, and (c) the Pledging Party’s Collateral Requirement equals or exceeds its Minimum Transfer Amount, then the Secured Party may demand that the Pledging Party Transfer to the Secured Party, and the Pledging Party shall, after receiving such notice from the Secured Party, Transfer, or cause to be Transferred to the Secured Party, Performance Assurance for the benefit of the Secured Party, having a Collateral Value at least equal to the Pledging Party’s Collateral Requirement. The amount of Performance Assurance required to be Transferred hereunder shall be rounded up to the nearest integral multiple of the Rounding Amount. Unless otherwise agreed in writing by the Parties, (i) Performance Assurance demanded of a Pledging Party on or before the Notification Time on a Local Business Day shall be provided by the close of business on the next Local Business Day and (ii) Performance Assurance demanded of a Pledging Party after the Notification Time on a Local Business Day shall be provided by the close of business on the second Local Business Day thereafter. Any Letter of Credit or other type of Performance Assurance (other than Cash) shall be Transferred to such address as the Secured Party shall specify and any such demand made by the Secured Party pursuant to this Paragraph 4 shall specify account information for the account to which Performance Assurance in the form of Cash shall be Transferred.

Paragraph 5. Reduction and Substitution of Performance Assurance. (a) On any Local Business Day (but no more frequently than weekly with respect to Letters of Credit and daily with respect to Cash), a Pledging Party may request a reduction in the amount of Performance Assurance previously provided by the Pledging Party for the benefit of the Secured Party, provided that, after giving effect to the requested reduction in Performance Assurance, (i) the Pledging Party shall in fact have a Collateral Requirement of zero; (ii) no Event of Default or Potential Event of Default with respect to the Pledging Party shall have occurred and be continuing; and (iii) no Early Termination Date has occurred or been designated as a result of an Event of Default with respect to the Pledging Party for which there exist any unsatisfied payment Obligations. A permitted reduction in Performance Assurance may be effected by the Transfer of Cash to the Pledging Party or the reduction of the amount of an outstanding Letter of Credit previously issued for the benefit of the Secured Party. The amount of Performance Assurance required to be reduced hereunder shall be rounded down to the nearest integral multiple of the Rounding Amount. The Pledging Party shall have the right to specify the means of effecting the reduction in Performance Assurance. In all cases, the cost and expense of reducing Performance Assurance (including, but not limited to, the reasonable costs, expenses, and attorneys' fees of the Secured Party) shall be borne by the Pledging Party. Unless otherwise agreed in writing by the Parties, (i) if the Pledging Party’s reduction demand is made on or before the Notification Time on a Business Day, then the Secured Party shall have one (1) Local Business Day to effect a permitted reduction in Performance Assurance and (ii) if the Pledging

Page 143 of 438 ends

7 Party’s reduction demand is made after the Notification Time on a Local Business Day, then the Secured Party shall have two (2) Local Business Days to effect a permitted reduction in Performance Assurance, in each case, if such reduction is to be effected by the return of Cash to the Pledging Party. If a permitted reduction in Performance Assurance is to be effected by a reduction in the amount of an outstanding Letter of Credit previously issued for the benefit of the Secured Party, the Secured Party shall promptly take such action as is reasonably necessary to effectuate such reduction.
(b) Except when (i) an Event of Default or Potential Event of Default with respect to the Pledging Party shall have occurred and be continuing or (ii) an Early Termination Date has occurred or been designated as a result of an Event of Default with respect to the Pledging Party for which there exist any unsatisfied payment Obligations, the Pledging Party may substitute Performance Assurance for other existing Performance Assurance of equal Collateral Value upon one (1) Local Business Day’s written notice (provided such notice is made on or before the Notification Time, otherwise the notification period shall be two (2) Local Business Days) to the Secured Party; provided, however, that if such substitute Performance Assurance is of a type not otherwise approved by this Collateral Annex, then the Secured Party must consent to such substitution. Upon the Transfer to the Secured Party and/or its Custodian of the substitute Performance Assurance, the Secured Party and/or its Custodian shall Transfer the relevant replaced Performance Assurance to the Pledging Party within two (2) Local Business Days.

Notwithstanding anything herein to the contrary, no such substitution shall be permitted unless (i) the substitute Performance Assurance is Transferred simultaneously or has been Transferred to the Secured Party and/or its Custodian prior to the release of the Performance Assurance to be returned to the Pledging Party and the security interest in, and general first lien upon, such substituted Performance Assurance granted pursuant hereto in favor of the Secured Party shall have been perfected as required by applicable law and shall constitute a first priority perfected security interest therein and general first lien thereon, and (ii) after giving effect to such substitution, the Collateral Value of such substitute Performance Assurance shall equal the greater of the Pledging Party’s Collateral Requirement or the Pledging Party’s Minimum Transfer Amount. Each substitution of Performance Assurance shall constitute a representation and warranty by the Pledging Party that the substituted Performance Assurance shall be subject to and governed by the terms and conditions of this Collateral Annex, including without limitation the security interest in, general first lien on and right of offset against, such substituted Performance Assurance granted pursuant hereto in favor of the Secured Party pursuant to Paragraph 2.
(c) The Transfer of any Performance Assurance by the Secured Party and/or its Custodian in accordance with this Paragraph 5 shall be deemed a release by the Secured Party of its security interest, general first lien and right of offset granted pursuant to Paragraph 2 hereof only with respect to such returned Performance Assurance. In connection with each Transfer of any Performance Assurance pursuant to this Paragraph 5, the Pledging Party will, upon request of the Secured Party, execute a receipt showing the Performance Assurance Transferred to it.

Paragraph 6. Administration of Performance Assurance.
(a) Cash. Performance Assurance provided in the form of Cash to a Party that is the Secured Party shall be subject to the following provisions.

Page 144 of 438 ends

8 (i) If such Party is entitled to hold Cash, then it will be entitled to hold Cash or to appoint an agent which is a Qualified Institution (a "Custodian") to hold Cash for it provided that the conditions for holding Cash that are set forth on the Paragraph 10 Cover Sheet for such Party are satisfied. If such Party is not entitled to hold Cash, then the provisions of Paragraph 6(a)(ii) shall not apply with respect to such Party and Cash shall be held in a Qualified Institution in accordance with the provisions of Paragraph 6(a)(ii)(B). Upon notice by the Secured Party to the Pledging Party of the appointment of a Custodian, the Pledging Party's obligations to make any Transfer will be discharged by making the Transfer to that Custodian. The holding of Cash by a Custodian will be deemed to be the holding of Cash by the Secured Party for which the Custodian is acting. If the Secured Party or its Custodian fails to satisfy any conditions for holding Cash as set forth above or in the Paragraph 10 Cover Sheet or if the Secured Party is not entitled to hold Cash at any time, then the Secured Party will Transfer, or cause its Custodian to Transfer, the Cash to a Qualified Institution and the Cash shall be maintained in accordance with Paragraph 6(a)(ii)(B), with the Party not eligible to hold Cash being considered the "Downgraded Party" (as defined below). Except as set forth in Paragraph 6(c), the Secured Party will be liable for the acts or omissions of its Custodian to the same extent that the Secured Party would be liable hereunder for its own acts or omissions. (ii) Use of Cash. Notwithstanding the provisions of applicable law, if no Event of Default has occurred and is continuing with respect to the Secured Party and no Early Termination Date has occurred or been designated as a result of an Event of Default with respect to the Secured Party for which there exist any unsatisfied payment Obligations, then the Secured Party shall have the right to sell, pledge, rehypothecate, assign, invest, use, commingle or otherwise use in its business any Cash that it holds as Performance Assurance hereunder, free from any claim or right of any nature whatsoever of the Pledging Party, including any equity or right of redemption by the Pledging Party; provided, however, that if a Party or its Custodian is not eligible to hold Cash pursuant to Paragraph 6(a) (such Party shall be the "Downgraded Party" and the event that caused it or its Custodian to be ineligible to hold Cash shall be a "Credit Rating Event") then:
(A) the provisions of this Paragraph 6(a)(ii) will not apply with respect to the Downgraded Party; and
(B) the Downgraded Party shall be required to Transfer (or cause to be Transferred) not later than the close of business on the next Local Business Day following such Credit Rating Event all Cash in its possession or held on its behalf to a Qualified Institution approved by the non-Downgraded Party (which approval shall not be unreasonably withheld), to a segregated, safekeeping or custody account (the "Collateral Account") within such Qualified Institution with the title of the account indicating that the property contained therein is being held as Cash for the Downgraded Party. The Qualified Institution shall serve as Custodian with respect to the Cash in the Collateral Account, and shall hold such Cash in accordance with the terms of this Collateral Annex and for the security interest of the Downgraded Party and execute such account control agreements as are necessary or applicable to perfect the security interest of the Non-Downgraded Party therein pursuant to Section 9-314 of the Uniform Commercial Code or otherwise, and subject to such security interest, for the ownership and benefit of the non-Downgraded Party. The Qualified Institution holding the Cash will invest and reinvest or procure the investment and reinvestment of the Cash in

Page 145 of 438 ends

9 accordance with the written instructions of the Pledging Party, subject to the approval of such instructions by the Downgraded Party (which approval shall not be unreasonably withheld), provided that the Qualified Institution shall not be required to so invest or reinvest or procure such investment or reinvestment if an Event of Default or Potential Event of Default with respect to the Pledging Party shall have occurred and be continuing. The Downgraded Party shall have no responsibility for any losses resulting from any investment or reinvestment effected in accordance with the Pledging Party's instructions. (iii) Interest Payments on Cash. So long as no Event of Default or Potential Event of Default with respect to the Pledging Party has occurred and is continuing, and no Early Termination Date for which any unsatisfied payment Obligations of the Pledging Party exist has occurred or been designated as the result of an Event of Default with respect to the Pledging Party, and to the extent that an obligation to Transfer Performance Assurance would not be created or increased by the Transfer, in the event that the Secured Party or its Custodian is holding Cash, the Secured Party will Transfer (or caused to be Transferred) to the Pledging Party, in lieu of any interest or other amounts paid or deemed to have been paid with respect to such Cash (all of which may be retained by the Secured Party or its Custodian), the Interest Amount. The Pledging Party shall invoice the Secured Party monthly setting forth the calculation of the Interest Amount due, and the Secured Party shall make payment thereof by the later of (A) the third Local Business Day of the first month after the last month to which such invoice relates or (B) the third Local Business Day after the day on which such invoice is received. On or after the occurrence of a Potential Event of Default or an Event of Default with respect to the Pledging Party or an Early Termination Date as a result of an Event of Default with respect to the Pledging Party, the Secured Party or its Custodian shall retain any such Interest Amount as additional Performance Assurance hereunder until the obligations of the Pledging Party under the Agreement have been satisfied in the case of an Early Termination Date or for so long as such Event of Default is continuing in the case of an Event of Default. (b) Letters of Credit. Performance Assurance provided in the form of a Letter of Credit shall be subject to the following provisions.
(i) Unless otherwise agreed to in writing by the parties, each Letter of Credit shall be provided in accordance with Paragraph 4, and each Letter of Credit shall be maintained for the benefit of the Secured Party. The Pledging Party shall (A) renew or cause the renewal of each outstanding Letter of Credit on a timely basis as provided in the relevant Letter of Credit, (B) if the bank that issued an outstanding Letter of Credit has indicated its intent not to renew such Letter of Credit, provide either a substitute Letter of Credit or other Eligible Collateral, in each case at least twenty (20) Local Business Days prior to the expiration of the outstanding Letter of Credit, and (C) if a bank issuing a Letter of Credit shall fail to honor the Secured Party's properly documented request to draw on an outstanding Letter of Credit, provide for the benefit of the Secured Party either a substitute Letter of Credit that is issued by a bank acceptable to the Secured Party or other Eligible Collateral, in each case within one (1) Local Business Day after such refusal, provided that, as a result of the Pledging Party's failure to perform in accordance with (A), (B), or (C) above, the Pledging Party's Collateral Requirement would be greater than zero.

Page 146 of 438 ends

10 (ii) As one method of providing Performance Assurance, the Pledging Party may increase the amount of an outstanding Letter of Credit or establish one or more additional Letters of Credit.
(iii) Upon the occurrence of a Letter of Credit Default, the Pledging Party agrees to Transfer to the Secured Party either a substitute Letter of Credit or other Eligible Collateral, in each case on or before the first Local Business Day after the occurrence thereof (or the fifth (5th) Local Business Day after the occurrence thereof if only clause (a) under the definition of Letter of Credit Default applies).
(iv) (A) Upon or at any time after the occurrence and continuation of an Event of Default with respect to the Pledging Party, or (B) if an Early Termination Date has occurred or been designated as a result of an Event of Default with respect to the Pledging Party for which there exist any unsatisfied payment Obligations, then the Secured Party may draw on the entire, undrawn portion of any outstanding Letter of Credit upon submission to the bank issuing such Letter of Credit of one or more certificates specifying that such Event of Default or Early Termination Date has occurred and is continuing. Cash proceeds received from drawing upon the Letter of Credit shall be deemed Performance Assurance as security for the Pledging Party’s obligations to the Secured Party and the Secured Party shall have the rights and remedies set forth in Paragraph 7 with respect to such cash proceeds. Notwithstanding the Secured Party’s receipt of Cash proceeds of a drawing under the Letter of Credit, the Pledging Party shall remain liable (y) for any failure to Transfer sufficient Performance Assurance or (z) for any amounts owing to the Secured Party and remaining unpaid after the application of the amounts so drawn by the Secured Party.
(v) In all cases, the costs and expenses (including but not limited to the reasonable costs, expenses, and attorneys' fees of the Secured Party) of establishing, renewing, substituting, canceling, and increasing the amount of a Letter of Credit shall be borne by the Pledging Party. (c) Care of Performance Assurance. Except as otherwise provided in Paragraph 6(a)(iii) and beyond the exercise of reasonable care in the custody thereof, the Secured Party shall have no duty as to any Performance Assurance in its possession or control or in the possession or control of any Custodian or any income thereon or as to the preservation of rights against prior parties or any other rights pertaining thereto. The Secured Party shall be deemed to have exercised reasonable care in the custody and preservation of the Performance Assurance in its possession, and/or in the possession of its agent for safekeeping, if the Performance Assurance is accorded treatment substantially equal to that which it accords its own property, and shall not be liable or responsible for any loss or damage to any of the Performance Assurance, or for any diminution in the value thereof, by reason of the act or omission of any Custodian selected by the Secured Party in good faith except to the extent such loss or damage is the result of such agent's willful misconduct or negligence. Unless held by a Custodian, the Secured Party shall at all times retain possession or control of any Performance Assurance Transferred to it. The holding of Performance Assurance by a Custodian for the benefit of the Secured Party shall be deemed to be the holding and possession of such Performance Assurance by the Secured Party for the purpose of perfecting the security interest in the Performance Assurance. Except as otherwise provided

Page 147 of 438 ends

11 in Paragraph 6(a)(ii), nothing in this Collateral Annex shall be construed as requiring the Secured Party to select a Custodian for the keeping of Performance Assurance for its benefit.

Paragraph 7. Exercise of Rights Against Performance Assurance. (a) In the event that (i) an Event of Default with respect to the Pledging Party has occurred and is continuing or (ii) an Early Termination Date has occurred or been designated as a result of an Event of Default with respect to the Pledging Party, the Secured Party may exercise any one or more of the rights and remedies provided under the Agreement, in this Collateral Annex or as otherwise available under applicable law. Without limiting the foregoing, if at any time (i) an Event of Default with respect to the Pledging Party has occurred and is continuing, or (ii) an Early Termination Date occurs or is deemed to occur as a result of an Event of Default with respect to the Pledging Party, then the Secured Party may, in its sole discretion, exercise any one or more of the following rights and remedies:
(i) all rights and remedies available to a secured party under the Uniform Commercial Code and any other applicable jurisdiction and other applicable laws with respect to the Performance Assurance held by or for the benefit of the Secured Party;
(ii) the right to set off any Performance Assurance held by or for the benefit of the Secured Party against and in satisfaction of any amount payable by the Pledging Party in respect of any of its Obligations;
(iii) the right to draw on any outstanding Letter of Credit issued for its benefit; and/or (iv) the right to liquidate any Performance Assurance held by or for the benefit of the Secured Party through one or more public or private sales or other dispositions with such notice, if any, as may be required by applicable law, free from any claim or right of any nature whatsoever of the Pledging Party, including any right of equity or redemption by the Pledging Party (with the Secured Party having the right to purchase any or all of the Performance Assurance to be sold) and to apply the proceeds from the liquidation of such Performance Assurance to and in satisfaction of any amount payable by the Pledging Party in respect of any of its Obligations in such order as the Secured Party may elect. (b) The Pledging Party hereby irrevocably constitutes and appoints the Secured Party and any officer or agent thereof, with full power of substitution, as the Pledging Party’s true and lawful attorney-in-fact with full irrevocable power and authority to act in the name, place and stead of the Pledging Party or in the Secured Party’s own name, from time to time in the Secured Party’s discretion, for the purpose of taking any and all action and executing and delivering any and all documents or instruments which may be necessary or desirable to accomplish the purposes of Paragraph 7(a).
(c) Secured Party shall be under no obligation to prioritize the order with respect to which it exercises any one or more rights and remedies available hereunder. The Pledging Party shall in all events remain liable to the Secured Party for any amount payable by the Pledging

Page 148 of 438 ends

12 Party in respect of any of its Obligations remaining unpaid after any such liquidation, application and set off.
(d) In addition to the provisions of Paragraph 7(a), if at any time (i) an Event of Default with respect to the Secured Party has occurred and is continuing or (ii) an Early Termination Date has occurred or been designated as a result of an Event of Default with respect to the Secured Party, then:
(1) the Secured Party will be obligated immediately to Transfer all Performance Assurance (including any Letter of Credit) and the Interest Amount, if any, to the Pledging Party; (2) the Pledging Party may do any one or more of the following: (x) exercise any of the rights and remedies of a pledgor with respect to the Performance Assurance, including any such rights and remedies under law then in effect; (y) to the extent that the Performance Assurance or the Interest Amount is not Transferred to the Pledging Party as required in (1) above, setoff amounts payable to the Secured Party against the Performance Assurance (other than Letters of Credit) held by the Secured Party or to the extent its rights to setoff are not exercised, withhold payment of any remaining amounts payable by the Pledging Party, up to the value of any remaining Performance Assurance held by the Secured Party, until the Performance Assurance is Transferred to the Pledging Party; and (z) exercise rights and remedies available to the Pledging Party under the terms of any Letter of Credit; and (3) the Secured Party shall be prohibited from drawing on any Letter of Credit that has been posted by the Pledging Party for its benefit.

Paragraph 8. Disputed Calculations
(a) If the Pledging Party disputes the amount of Performance Assurance requested by the Secured Party and such dispute relates to the amount of the Net Exposure claimed by the Secured Party, then the Pledging Party shall (i) notify the Secured Party of the existence and nature of the dispute not later than the Notification Time on the first Local Business Day following the date that the demand for Performance Assurance is made by the Secured Party pursuant to Paragraph 4, and (ii) provide Performance Assurance to or for the benefit of the Secured Party in an amount equal to the Pledging Party's own estimate, made in good faith and in a commercially reasonable manner, of the Pledging Party’s Collateral Requirement in accordance with Paragraph 4. In all such cases, the Parties thereafter shall promptly consult with each other in order to reconcile the two conflicting amounts. If the Parties have not been able to resolve their dispute on or before the second Business Day following the date that the demand is made by the Secured Party, then the Secured Party’s Net Exposure shall be recalculated by each Party requesting quotations from one (1) Reference Market-Maker within two (2) Business Days (taking the arithmetic average of those obtained to obtain the average Current Mark-to-Market Value; provided, that, if only one (1) quotation can be obtained, then that quotation shall be used) for the purpose of recalculating the Current Mark-to-Market Value of each Transaction in respect of which the Parties disagree as to the Current Mark-to-Market Value thereof, and the Secured Party shall inform the Pledging Party of the results of

Page 149 of 438 ends

13 such recalculation (in reasonable detail). Performance Assurance shall thereupon be provided, returned, or reduced, if necessary, on the next Local Business Day in accordance with the results of such recalculation.
(b) If the Secured Party disputes the amount of Performance Assurance to be reduced by the Secured Party and such dispute relates to the amount of the Net Exposure claimed by the Secured Party, then the Secured Party shall (i) notify the Pledging Party of the existence and nature of the dispute not later than the Notification Time on the first Local Business Day following the date that the demand to reduce Performance Assurance is made by the Pledging Party pursuant to Paragraph 5(a), and (ii) effect the reduction of Performance Assurance to or for the benefit of the Pledging Party in an amount equal to the Secured Party's own estimate, made in good faith and in a commercially reasonable manner, of the Pledging Party’s Collateral Requirement in accordance with Paragraph 5(a). In all such cases, the Parties thereafter shall promptly consult with each other in order to reconcile the two conflicting amounts. If the Parties have not been able to resolve their dispute on or before the second Local Business Day following the date that the demand is made by the Pledging Party, then the Secured Party’s Net Exposure shall be recalculated by each Party requesting quotations from one (1) Reference Market-Maker within two (2) Business Days (taking the arithmetic average of those obtained to obtain the average Current Mark-to-Market Value; provided, that, if only one (1) quotation can be obtained, then that quotation shall be used) for the purpose of recalculating the Current Mark-to-Market Value of each Transaction in respect of which the Parties disagree as to the Current Mark-to-Market Value thereof, and the Secured Party shall inform the Pledging Party of the results of such recalculation (in reasonable detail). Performance Assurance shall thereupon be provided, returned, or reduced, if necessary, on the next Local Business Day in accordance with the results of such recalculation.

Paragraph 9. Covenants; Representations and Warranties; Miscellaneous. (a) The Pledging Party will execute and deliver to the Secured Party (and to the extent permitted by applicable law, the Pledging Party hereby authorizes the Secured Party to execute and deliver, in the name of the Pledging Party or otherwise) such financing statements, assignments and other documents and do such other things relating to the Performance Assurance and the security interest granted under this Collateral Annex, including any action the Secured Party may deem necessary or appropriate to perfect or maintain perfection of its security interest in the Performance Assurance, and the Pledging Party shall pay all costs relating to its Transfer of Performance Assurance and the maintenance and perfection of the security interest therein.
(b) On each day on which Performance Assurance is held by the Secured Party and/or its Custodian under the Agreement and this Collateral Annex, the Pledging Party hereby represents and warrants that:
(i) the Pledging Party has good title to and is the sole owner of such Performance Assurance, and the execution, delivery and performance of the covenants and agreements of this Collateral Annex, do not result in the creation or imposition of any lien or security interest upon any of its assets or properties, including, without limitation,

Page 150 of 438 ends

14 the Performance Assurance, other than the security interests and liens created under the Agreement and this Collateral Annex;
(ii) upon the Transfer of Performance Assurance by the Pledging Party to the Secured Party and/or its Custodian, the Secured Party shall have a valid and perfected first priority continuing security interest therein, free of any liens, claims or encumbrances, except those liens, security interests, claims or encumbrances arising by operation of law that are given priority over a perfected security interest; and (iii) it is not and will not become a party to or otherwise be bound by any agreement, other than the Agreement and this Collateral Annex, which restricts in any manner the rights of any present or future holder of any of the Performance Assurance with respect hereto.
(c) This Collateral Annex has been and is made solely for the benefit of the Parties and their permitted successors and assigns, and no other person, partnership, association, corporation or other entity shall acquire or have any right under or by virtue of this Collateral Annex.
(d) The Pledging Party shall pay on request and indemnify the Secured Party against any taxes (including without limitation, any applicable transfer taxes and stamp, registration or other documentary taxes), assessments, or charges that may become payable by reason of the security interests, general first lien and right of offset granted under this Collateral Annex or the execution, delivery, performance or enforcement of the Agreement and this Collateral Annex, as well as any penalties with respect thereto (including, without limitation costs and reasonable fees and disbursements of counsel). The Parties each agree to pay the other Party for all reasonable expenses (including without limitation, court costs and reasonable fees and disbursements of counsel) incurred by the other in connection with the enforcement of, or suing for or collecting any amounts payable by it under, the Agreement and this Collateral Annex. (e) No failure or delay by either Party hereto in exercising any right, power, privilege, or remedy hereunder shall operate as a waiver thereof.
(f) The headings in this Collateral Annex are for convenience of reference only, and shall not affect the meaning or construction of any provision thereof.

Page 151 of 438 ends

15 SCHEDULE 1 to Collateral Annex

IRREVOCABLE STANDBY LETTER OF CREDIT FORMAT
DATE OF ISSUANCE:
[Address]
Re: Credit No. _______________
We hereby establish our Irrevocable Transferable Standby Letter of Credit in your favor for the account of _______________________ (the "Account Party"), for the aggregate amount not exceeding ______________________ United States Dollars ($___________), available to you at sight upon demand at our counters at (Location) on or before the expiration hereof against presentation to us of one or more of the following statements, dated and signed by a representative of the beneficiary:

1. “An Event of Default (as defined in the Master Purchase and Sale Agreement dated as of ________ between beneficiary and Account Party, as the same may be amended (the “Master Agreement”)) has occurred and is continuing with respect to Account Party under the Master Agreement and no Event of Default has occurred and is continuing with respect to the beneficiary of this Letter of Credit. Wherefore, the undersigned does hereby demand payment of the entire undrawn amount of the Letter of Credit”; or

2. “An Early Termination Date (as defined in the Master Purchase and Sale Agreement dated as of ________ between beneficiary and Account Party, as the same may be amended (the “Master Agreement”)) has occurred and is continuing with respect to Account Party under the Master Agreement and no Event of Default has occurred and is continuing with respect to the beneficiary of this Letter of Credit. Wherefore, the undersigned does hereby demand payment of the entire undrawn amount of the Letter of Credit”.

This Letter of Credit shall expire on ________________.

The amount which may be drawn by you under this Letter of Credit shall be automatically reduced by the amount of any drawings paid through the Issuing Bank referencing this Letter of Credit No. ____. Partial drawings are permitted hereunder.

We hereby agree with you that documents drawn under and in compliance with the terms of this Letter of Credit shall be duly honored upon presentation as specified.

This Letter of Credit shall be governed by the Uniform Customs and Practice for Documentary Credits, 1993 Revision, International Chamber of Commerce Publication No. 500 (the "UCP"), except to the extent that the terms hereof are inconsistent with the provisions of the UCP, including but not limited to Articles 13(b) and 17 of the UCP, in which case the terms of this Letter of Credit shall govern.

With respect to Article 13(b) of the UCP, the Issuing Bank shall have a reasonable

Page 152 of 438 ends

16 amount of time, not to exceed three (3) banking days following the date of its receipt of documents from the beneficiary, to examine the documents and determine whether to take up or refuse the documents and to inform the beneficiary accordingly.

In the event of an Act of God, riot, civil commotion, insurrection, war or any other cause beyond our control that interrupts our business (collectively, an "Interruption Event") and causes the place for presentation of this Letter of Credit to be closed for business on the last day for presentation, the expiry date of this Letter of Credit will be automatically extended without amendment to a date thirty (30) calendar days after the place for presentation reopens for business.

This Letter of Credit is transferable, and we hereby consent to such transfer, but otherwise may not be amended, changed or modified without the express written consent of the beneficiary, the Issuing Bank and the Account Party.
[BANK SIGNATURE]

Page 153 of 438 ends

Execution Version
PARAGRAPH 10
to the

COLLATERAL ANNEX
to the

EEI MASTER POWER PURCHASE AND SALE AGREEMENT

CREDIT ELECTIONS COVER SHEET
This Paragraph 10 to the Collateral Annex to the EEI Master Power Purchase and Sale Agreement (the “Master Agreement”) is entered into between Citigroup Energy Inc. (“CEI” or “Party A”) and Central Coast Community Energy (“Party B”) as of February 28, 2024 and governs Party A’s and Party B’s obligations relating to Performance Assurance under the Master Agreement. Capitalized terms used herein shall have the meaning set forth in the following order of precedence: (a) this Collateral Annex and (b) the Master Agreement.

Paragraph 10. Elections and Variables
I. Collateral Threshold.

A. Party A Collateral Threshold.
 $______________ (the “Threshold Amount”); provided, however, that the Collateral Threshold for Party A shall be zero upon the occurrence and during the continuance of an Event of Default or a Potential Event of Default with respect to Party A; and provided further that, in the event that, and on the date that, Party A cures the Potential Event of Default on or prior to the date that Party A is required to post Performance Assurance to Party B pursuant to a demand made by Party B pursuant to the provisions of the Collateral Annex on or after the occurrence of such Potential Event of Default, (i) the Collateral Threshold for Party A shall automatically increase from zero to the Threshold Amount and (ii) Party A shall be relieved of its obligation to post Performance Assurance pursuant to such demand.
 (a) The amount (the “Threshold Amount”) set forth below opposite the lower of the Credit Rating for Party A on the relevant date of determination, or (b) zero if on the relevant date of determination its does not have a Credit Rating from the rating agency(ies) specified below or an Event of Default or a Potential Event of Default with respect to Party A has occurred and is continuing; provided, however, in the event that, and on the date that, Party A cures the Potential Event of Default on or prior to the date that Party A is required to post Performance Assurance to Party B pursuant to a demand made by Party B pursuant to the provisions of the Collateral Annex on or after the occurrence of such Potential Event of Default, (i) the Collateral Threshold for Party A shall automatically increase from zero to the Threshold Amount and (ii) Party A shall be relieved of its obligation to post Performance Assurance pursuant to such demand.

Party A
Collateral Threshold S&P Credit Rating Moody’s Credit Rating U.S. $25,000,000 AA- and above Aa3 and above
U.S. $20,000,000 A+ A1
U.S. $20,000,000 A A2
U.S. $15,000,000 A- A3
U.S. $10,000,000 BBB+ Baa1
Zero BBB and below Baa2 and below
 The amount of the Guaranty Agreement dated _____ from _____, as amended from time to time but in no event shall Party A’s Collateral Threshold be greater than $______.

Page 154 of 438 ends

- 2 -
 Other – see attached threshold terms.

B. Party B Collateral Threshold.
 $______________; provided, however, that the Collateral Threshold for Party B shall be zero upon the occurrence and during the continuance of an Event of Default or a Potential Event of Default with respect to Party B; and provided further that, in the event that, and on the date that, Party B cures the Potential Event of Default on or prior to the date that Party B is required to post Performance Assurance to Party A pursuant to a demand made by Party A pursuant to the provisions of the Collateral Annex on or after the occurrence of such Potential Event of Default, (i) the Collateral Threshold for Party B shall automatically increase from zero to the Threshold Amount and (ii) Party B shall be relieved of its obligation to post Performance Assurance pursuant to such demand.
 (a) The amount opposite the lower of the Credit Rating for Party B on the relevant date of determination, or (b) zero if on the relevant date of determination Party B does not have a Credit Rating from the rating agency(ies) specified below or an Event of Default or a Potential Event of Default with respect to Party B has occurred and is continuing; provided, however, in the event that, and on the date that, Party B cures the Potential Event of Default on or prior to the date that Party B is required to post Performance Assurance to Party A pursuant to a demand made by Party A pursuant to the provisions of the Collateral Annex on or after the occurrence of such Potential Event of Default, (i) the Collateral Threshold for Party B shall automatically increase from zero to the Threshold Amount and (ii) Party B shall be relieved of its obligation to post Performance Assurance pursuant to such demand:

Party B
Collateral Threshold S&P Credit Rating Moody’s Credit Rating U.S. $25,000,000 AA- and above Aa3 and above
U.S. $20,000,000 A+ A1
U.S. $20,000,000 A A2
U.S. $15,000,000 A- A3
U.S. $10,000,000 BBB+ Baa1
Zero BBB and below Baa2 and below
 The amount of the Guaranty Agreement dated _____ from _____, as amended from time to time but in no event shall Party B’s Collateral Threshold be greater than $______.  Other – see attached threshold terms.

II. Eligible Collateral and Valuation Percentage.

The following items will qualify as "Eligible Collateral" for the Party specified:

Party A Party B Valuation Percentage
(A) Cash [X] [X] 100%
(B) Letters of Credit [X] [X] 100% unless either (i) a Letter of Credit Default shall have occurred and be continuing with respect
to such Letter of Credit, or (ii) twenty (20) or
fewer Business Days remain prior to the expiration
of such Letter of Credit, in which cases the
Valuation Percentage shall be zero (0).

Page 155 of 438 ends

- 3 -
III. Independent Amount.

A. Party A Independent Amount.
 Party A shall have a Fixed Independent Amount equal to the aggregate of Fixed Independent Amounts specified for Party A in the relevant Confirmations with respect to outstanding Transactions. If the Fixed Independent Amount option is selected for Party A, then Party A (which shall be a Pledging Party with respect to the Fixed IA Performance Assurance) will be required to Transfer or cause to be Transferred to Party B (which shall be a Secured Party with respect to the Fixed IA Performance Assurance) Performance Assurance with a Collateral Value equal to the amount of such Independent Amount from time to time (the “Fixed IA Performance Assurance”). The Fixed IA Performance Assurance (if any) shall be required to be posted by Party A within one (1) Local Business Day of the Trade Date and must remain posted for so long as the relevant Transaction is outstanding. The Fixed IA Performance Assurance shall not otherwise be taken into account when calculating Party A’s Collateral Requirement pursuant to the Collateral Annex. Except as expressly set forth above, the Fixed IA Performance Assurance shall be held and maintained in accordance with, and otherwise be subject to, Paragraphs 2, 5(b), 5(c), 6, 7 and 9 of the Collateral Annex.
 Party A shall have a Full Floating Independent Amount of $______________. If the Full Floating Independent Amount option is selected for Party A, then for purposes of calculating Party A’s Collateral Requirement pursuant to Paragraph 3 of the Collateral Annex, such Full Floating Independent Amount for Party A shall be added by Party B to its Exposure Amount for purposes of determining Net Exposure pursuant to Paragraph 3(a) of the Collateral Annex.  Party A shall have a Partial Floating Independent Amount of $______________. If the Partial Floating Independent Amount option is selected for Party A, then Party A will be required to Transfer or cause to be Transferred to Party B Performance Assurance with a Collateral Value equal to the amount of such Independent Amount (the “Partial Floating IA Performance Assurance”) if at any time Party A otherwise has a Collateral Requirement (not taking into consideration the Partial Floating Independent Amount) pursuant to Paragraph 3 of the Collateral Annex. The Partial Floating IA Performance Assurance shall not be reduced so long as Party A has a Collateral Requirement (not taking into consideration the Partial Floating Independent Amount). The Partial Floating Independent Amount shall not be taken into account when calculating a Party’s Collateral Requirements pursuant to the Collateral Annex. Except as expressly set forth above, the Partial Floating Independent Amount shall be held and maintained in accordance with, and otherwise be subject to, the Collateral Annex.

B. Party B Independent Amount.
 Party B shall have a Fixed Independent Amount equal to the aggregate of Fixed Independent Amounts specified for Party B in the relevant Confirmations with respect to outstanding Transactions. If the Fixed Independent Amount option is selected for Party B, then Party B (which shall be a Pledging Party with respect to the Fixed IA Performance Assurance) will be required to Transfer or cause to be Transferred to Party A (which shall be a Secured Party with respect to the Fixed IA Performance Assurance) Performance Assurance with a Collateral Value equal to the amount of such Independent Amount from time to time (the “Fixed IA Performance Assurance”). The Fixed IA Performance Assurance (if any) shall be required to be posted by Party B within one (1) Local Business Day of the Trade Date and must remain posted for so long as the relevant Transaction is outstanding. The Fixed IA Performance Assurance shall not otherwise be taken into account when calculating Party B’s Collateral Requirement pursuant to the Collateral Annex. Except as expressly set forth above, the Fixed IA Performance Assurance shall be held and maintained in accordance with, and otherwise be subject to, Paragraphs 2, 5(b), 5(c), 6, 7 and 9 of the Collateral Annex.
 Party B shall have a Full Floating Independent Amount of $______________. If the Full Floating Independent Amount Option is selected for Party B then for purposes of calculating

Page 156 of 438 ends

- 4 -
Party B’s Collateral Requirement pursuant to Paragraph 3 of the Collateral Annex, such Full Floating Independent Amount for Party B shall be added by Party A to its Exposure Amount for purposes of determining Net Exposure pursuant to Paragraph 3(a) of the Collateral Annex.  Party B shall have a Partial Floating Independent Amount of $______________. If the Partial Floating Independent Amount option is selected for Party B, then Party B will be required to Transfer or cause to be Transferred to Party A Performance Assurance with a Collateral Value equal to the amount of such Independent Amount (the “Partial Floating IA Performance Assurance”) if at any time Party B otherwise has a Collateral Requirement (not taking into consideration the Partial Floating Independent Amount) pursuant to Paragraph 3 of the Collateral Annex. The Partial Floating IA Performance Assurance shall not be reduced for so long as Party B has a Collateral Requirement (not taking into consideration the Partial Floating Independent Amount). The Partial Floating Independent Amount shall not be taken into account when calculating a Party’s Collateral Requirements pursuant to the Collateral Annex. Except as expressly set forth above, the Partial Floating Independent Amount shall be held and maintained in accordance with, and otherwise be subject to, the Collateral Annex.

IV. Minimum Transfer Amount.

A. Party A Minimum Transfer Amount: $250,000; provided, however, that the Minimum Transfer Amount for Party A shall be zero upon the occurrence and during the continuance of an Event of Default or a Potential Event of Default with respect to Party A; and provided further that, in the event that, and on the date that, Party A cures the Potential Event of Default on or prior to the date that Party A is required to post Performance Assurance to Party B pursuant to a demand made by Party B pursuant to the provisions of the Collateral Annex on or after the occurrence of such Potential Event of Default, (i) the Minimum Transfer Amount for Party A shall automatically increase from zero to the Minimum Transfer Amount and (ii) Party A shall be relieved of its obligation to post Performance Assurance pursuant to such demand if the amount of such obligation is less than the Minimum Transfer Amount.

B. Party B Minimum Transfer Amount: $250,000; provided, however, that the Minimum Transfer Amount for Party B shall be zero upon the occurrence and during the continuance of an Event of Default or a Potential Event of Default with respect to Party B; and provided further that, in the event that, and on the date that, Party B cures the Potential Event of Default on or prior to the date that Party B is required to post Performance Assurance to Party A pursuant to a demand made by Party A pursuant to the provisions of the Collateral Annex on or after the occurrence of such Potential Event of Default, (i) the Minimum Transfer Amount for Party B shall automatically increase from zero to the Minimum Transfer Amount and (ii) Party B shall be relieved of its obligation to post Performance Assurance pursuant to such demand if the amount of such obligation is less than the Minimum Transfer Amount.

V. Rounding Amount.

A. Party A Rounding Amount: $10,000.

B. Party B Rounding Amount: $10,000.

VI. Administration of Cash Collateral.

A. Party A Eligibility to Hold Cash.
 Party A shall not be entitled to hold Performance Assurance in the form of Cash. Performance Assurance in the form of Cash shall be held in a Qualified Institution in accordance with the provisions of Paragraph 6(a)(ii)(B) of the Collateral Annex. Party A shall pay to Party B in

Page 157 of 438 ends

- 5 -
accordance with the terms of the Collateral Annex the amount of interest it receives from the Qualified Institution on any Performance Assurance in the form of Cash posted by Party B.  Party A shall be entitled to hold Performance Assurance in the form of Cash provided that the following conditions are satisfied: (1) it is not a Defaulting Party, (2) Party A has a Credit Rating from S&P and/or Moody’s and the lowest Credit Rating for Party A is (a) “BBB-” or higher by S&P and “Baa3” or higher by Moody’s if Party A is rated by both S&P and Moody’s or (b) “BBB-” or higher by S&P or “Baa3” or higher by Moody’s if Party A is rated by either S&P or Moody’s but not both; and (3) Cash shall be held only in any jurisdiction within the United States. To the extent Party A is entitled to hold Cash, the Interest Rate payable to Party B on Cash shall be as selected below:

Party A Interest Rate.
 This Collateral Annex shall be subject to, and incorporate, Article 10 of the ISDA Collateral Agreement Interest Rate Definitions, Version 2.0. The “Interest Rate” with respect to U.S. Dollars will be “SOFR (Collateral Rate).”
 Other ____________.

B. Party B Eligibility to Hold Cash.
 Party B shall not be entitled to hold Performance Assurance in the form of Cash. Performance Assurance in the form of Cash shall be held in a Qualified Institution in accordance with the provisions of Paragraph 6(a)(ii)(B) of the Collateral Annex. Party B shall pay to Party A in accordance with the terms of the Collateral Annex the amount of interest it receives from the Qualified Institution on any Performance Assurance in the form of Cash posted by Party A.  Party B shall be entitled to hold Performance Assurance in the form of Cash provided that the following conditions are satisfied: (1) it is not a Defaulting Party, (2), Party B has a Credit Rating from S&P and/or Moody’s and the lowest Credit Rating for Party B is (a) “BBB-” or higher by S&P and “Baa3” or higher by Moody’s if Party B is rated by both S&P and Moody’s or (b) “BBB-” or higher by S&P or “Baa3” or higher by Moody’s if Party B is rated by either S&P or Moody’s but not both; and (3) Cash shall be held only in any jurisdiction within the United States. To the extent Party B is entitled to hold Cash, the Interest Rate payable to Party A on Cash shall be as selected below:

Party B Interest Rate.
 Federal Funds Effective Rate - the rate for that day opposite the caption “Federal Funds (Effective)” as set forth in the weekly statistical release designated as H.15(519), or any successor publication, published by the Board of Governors of the Federal Reserve System.  Other ____________.

VII. Notification Time.
 Other: 10:00 a.m. New York time
VIII. General.

With respect to the Collateral Threshold, Independent Amount, Minimum Transfer Amount and Rounding Amount, if no selection is made in this Cover Sheet with respect to a Party, then the applicable amount in each case for such Party shall be zero (0). In addition, with respect to the “Administration of Cash Collateral” section of this Paragraph 10, if no selection is made with respect to a Party, then such Party shall not be entitled to hold

Page 158 of 438 ends

- 6 -
Performance Assurance in the form of Cash and such Cash, if any, shall be held in a Qualified Institution pursuant to Paragraph 6(a)(ii)(B) of the Collateral Annex. If a Party is eligible to hold Cash pursuant to a selection in this Paragraph 10 but no Interest Rate is selected, then the Interest Rate for such Party shall be the Federal Funds Effective Rate as defined in Section VI of this Paragraph 10.

IX. Other Provisions - Amendments to the Collateral Annex.

Amendments to Definitions:

Credit Rating Event - The definition of “Credit Rating Event” is amended by replacing “6(a)(iii)” with “6(a)(ii).” Downgraded Party - The definition of “Downgraded Party” is amended by replacing “6(a)(i) with “6(a)(ii).” Interest Amount – The definition of “Interest Amount” is amended by adding at the end thereof: “, compounded daily”.

Notification Time - Within the definition of “Notification Time”, add “a.m.” immediately after “11:00”.

Performance Assurance - Within the definition of “Performance Assurance”, change “6(a)(iv)” to “6(a)(iii)”.

Qualified Institution – Within the definition of “Qualified Institution”, change “capital and surplus” to “capital surplus”.

Secured Party - The definition of “Secured Party” is amended by replacing “3(b)” with “3(a).” Amendment to Paragraph 3:

Paragraph 3(a) is amended by adding the following new sentence at the end thereof:
“All references to Net Exposure in Paragraph 3 shall be deemed to include the Fixed Independent Amount, if any.” Amendment to Paragraph 4:

Paragraph 4 is amended by deleting the third sentence in its entirety and replacing it with: “Unless otherwise agreed in writing by the Parties, (i) Performance Assurance demanded of a Pledging Party on or before the Notification Time on a Local Business Day shall be provided by the close of business on such day and (ii) Performance Assurance demanded of a Pledging Party after the Notification Time on a Local Business Day shall be provided by the close of business on the next Local Business Day thereafter.”.

Amendments to Paragraph 5:

Paragraph 5(a) is amended by inserting “so long as the amount of the requested reduction is equal to or greater than the Secured Party’s Minimum Transfer Amount” after “the Pledging Party for the benefit of the Secured Party” in the third line thereof.

Amendments to Paragraph 6:

Paragraph 6(a)(ii)(A) of the Collateral Annex is amended by inserting “(other than subparagraph (B) below)” after “the provisions of this Paragraph 6(a)(ii)” in the first line thereof.

Paragraph 6(a)(ii)(B) of the Collateral Annex is amended by deleting the term “non-Downgraded Party” in the twelfth line thereof and inserting the term “Downgraded Party” in lieu thereof.

Paragraph 6(a)(iii) is amended by deleting the second sentence in its entirety and replacing it with: “The Secured Party will Transfer the Interest Amount in arrears on the fifth (5th) Local Business Day of each calendar month.”.

Paragraph 6 to the Collateral Annex is amended by adding the following as subparagraph (vi) of Paragraph 6(b):

Page 159 of 438 ends

- 7 -
“(vi) The Pledging Party covenants and agrees that so long as a Transaction shall remain outstanding under the Master Agreement, no Letter of Credit shall be secured by any mortgage, security interest, pledge lien or other encumbrance upon the property of the Pledging Party.” Amendments to Paragraph 8:

Paragraph 8 of the Collateral Annex is amended as follows:

All references to the resolution of disputes regarding Net Exposure in Paragraph 8 of the Collateral Annex shall be deemed to include any dispute regarding any component of the Fixed Independent Amount.

Amendments to Paragraph 9:

Paragraph 9 of the Collateral Annex is amended by adding the following new provisions at the end thereof:
“(g) All Transfers of Eligible Collateral hereunder (including the grant of a security interest in Eligible Collateral hereunder) are "transfers" "under" the Agreement within the meaning of Section 546(g) of the United States Bankruptcy Code and transfers of Eligible Collateral hereunder are intended to be “margin payments” within the meaning of Section 101(38) of the United States Bankruptcy Code.”

Page 160 of 438 ends

- 8 -

EXHIBIT A
to Paragraph 10
to the Collateral Annex

IRREVOCABLE TRANSFERABLE STANDBY LETTER OF CREDIT
Letter of Credit No.________ Issue Date: ________, 20__ Beneficiary: Account Party:
[Name of Beneficiary] [Name of Account Party]
[Address] [Address of Account Party]
Attn: __________ Attn: __________
Ladies and Gentlemen:

We hereby establish in favor of you, [____________________] (the “Beneficiary”), at the request and for the account of [name of account party] (the “Account Party”), with respect to the Master Power Purchase and Sale Agreement dated as of _________, 20___, by and between you and the Account Party, as may be amended from time to time, our Irrevocable Transferable Standby Letter of Credit No. ________ (the “Credit”) whereby we irrevocably authorize you to draw on us, in accordance with the terms and conditions hereinafter set forth, in an amount not to exceed in the aggregate $____________.

Subject to the terms hereof, funds are available to you hereunder against presentation of a completed certificate (a “Certificate”), dated and signed by your representative, including one of the following statements:

1. An Event of Default (as defined in the Master Power Purchase and Sale Agreement dated as of _________, 20___, by and between you and [name of Account Party], as may be amended from time to time) has occurred and is continuing with respect to the Account Party under the Master Power Purchase and Sale Agreement. Therefore the Beneficiary does hereby demand payment of the entire undrawn amount of the Credit; or

2. An Early Termination Date (as defined in the Master Power Purchase and Sale Agreement dated as of _________, 20___, by and between you and [name of Account Party], as may be amended from time to time) has occurred as a result of a Termination Event (as defined in such Master Agreement) and Account Party has failed to make payments in an aggregate amount of $__________ due and owing to the Beneficiary in accordance with the terms of the Master Agreement. Wherefore the Beneficiary does hereby demand payment of $_________.

Partial drawings are allowed under this Credit. The amount which may be drawn under this Credit shall be automatically reduced by the amount of any drawings previously paid by us hereunder.

Presentation of your Certificate shall be made on any day which is a New York Banking Day for us at or prior to [5:00 p.m. (New York time)] at our office located at ____________________________________. Presentation must be made by hand, mail or courier service, to such address [, or by tested telex or SWIFT]. If your presentation is made at such office, in compliance with the other terms and conditions of this Credit, on or prior to the expiry date hereof, we hereby irrevocably undertake to honor such presentation [by close of business on the next New York Banking Day].

This Credit is effective immediately and expires at our close of business on ____________, 20__, [(the “Initial Expiry Date”); provided however, that this Credit shall be automatically extended without amendment for one or more additional one-year periods from the Initial Expiry Date or any subsequent expiry date, unless at least 60 days prior to such date you receive a notice in writing by certified mail, [tested telex or SWIFT] at the above address, that we elect not to extend this Credit for such additional period. Upon your receipt of such a notice of non-extension, you shall be entitled to make immediate demand for payment of the full amount available under this Credit, by presentation of your Certificate.

Page 161 of 438 ends

- 9 -
This Credit shall be subject to the provisions of the International Standby Practices 1998, International Chamber of Commerce Publication No. 590 (“ISP”), and as to matters not addressed by ISP, shall be governed by the laws of the State of New York and applicable U.S. federal laws.

This Credit is transferable, and we hereby consent to such transfer, but otherwise may not be amended, changed or modified without our express written consent and that of the Beneficiary and the Account Party.

Very truly yours,
[ISSUING BANK]

Page 162 of 438 ends

Staff Report Item 4
TO: 3CE Operations Board of Directors
FROM: Robert M. Shaw, Chief Executive Officer
PREPARED BY: Dennis Dyc-O’Neal, Chief Operating Officer SUBJECT: Confirm February 20, 2024 agreement between 3CE and Stem US Operations Inc. for battery optimization services for an initial 3-year term with optional successive one (1) year terms
DATE: March 13, 2024
RECOMMENDATION:

This memorandum recommends the Operations Board confirm the February 20, 2024 agreement between 3CE and Stem US Operations Inc. (“STEM”) for battery optimization services for an initial 3-year term, and the right to extend the term for successive one (1) year terms.

BACKGROUND:
3CE has roughly 84.75 MW of energy storage capacity currently operating, 25 MW of capacity scheduled to come online in 2024, and an additional 375 MW under contract.

At its August 2023 meeting, the Operations Board increased the CEO’s delegation of authority for contract execution to agreements with a not to exceed of $200,000 per fiscal year.

In coordination with Silicon Valley Clean Energy, 3CE issued a Request for Proposals for battery optimization services to improve market operation of battery resources. 3CE intends the optimization services to be incorporated into additional services for California Independent System Operator (“CAISO”) scheduling services.

Page 163 of 438 ends

Pursuant to the established delegation of authority, 3CE engaged the selected vendor, Stem US Operations Inc. (“STEM”), on February 20, 2024.

DISCUSSION/ANALYSIS:

The battery optimization services agreement with STEM provides additional capacity to navigate the complex operating environment for storage resources and ability to build executable operational bid strategies for scheduling energy storage resources in the CAISO marketplace. 3CE in collaboration with Silicon Valley Clean Energy (“SVCE”) evaluated ten submitting vendors in response to its Request for Proposals (RFP) and ultimately selected STEM. STEM is the global leader in AI-driven clean energy solutions and services. Today, STEM has 2+ gigawatt hours (GWh) of storage assets under management across 950+ sites operating or contracted within 75+ permitting jurisdictions across 200+ cities and 40+ utility service territories.

The battery optimization agreement operates as a master agreement setting for available services and corresponding fee schedule which 3CE may apply to specific storage resources through task orders.

Available services include:

1. Licensed access to STEM’s Athena PowerBidder Pro Subscription Services for bid optimization, telemetry, and market price forecasting;

2. Integration services for exchanging necessary data with 3CE or 3CE vendor software systems (inclusive of customer onboarding), and;

3. Consulting and advisory services, including energy trading strategy development.

The first task order coincided with the execution of the contract and will allow 3CE to integrate Slate, Rabbitbrush and Victory Pass resources that are under 3CE’s scheduling control once the software is ready to go live.

Staff does not anticipate services under the Stem battery optimization agreement exceeding the authority delegated to the CEO, however, the Board’s confirmation will help avoid the need to seek additional authorization at a later date. Staff will notify the Board if the battery optimization agreement exceed the delegated authority.

Page 164 of 438 ends

FISCAL IMPACT:
3CE staff currently expect the costs to be the following:

Fiscal Year Expected Fees
23-24 $124,543
24-25 $169,763
25-26 $167,266
26-27 $172,284
$635,689
Actual costs under this agreement may change as the fee schedule is based on the number of resources receiving this service, and additional resources will be added during the term, and is contingent on each resource becoming operational.

Staff intend to manage and control costs under this agreement through the annual budget process.

CONCLUSION:

The Operations Board’s confirmation of the STEM battery optimization agreement provides staff ability to quickly ramp services for 3CE’s existing and future storage assets and ensure the optimal operation of 3CE’s storage resources.

ATTACHMENT(S):

1. Services Agreement between 3CE and STEM

2. STEM Task Order 1

Page 165 of 438 ends

1 CENTRAL COAST COMMUNITY ENERGY

STANDARD SERVICES AGREEMENT
This Standard Services Agreement (the "Agreement") is made by and between Central Coast Community Energy (“CUSTOMER”) a California joint powers authority with its principal place of business located at 70 Garden Court, Suite 300 Monterey, CA 93940 and Stem US Operations Inc. (hereinafter “CONTRACTOR”), a Delaware corporation with its principal place of business located at 100 California St., 14th Floor, San Francisco, CA 94111, CUSTOMER and CONTRACTOR may be individually referred to herein as “Party” or collectively as “Parties.”
In consideration of the mutual covenants and conditions set forth in this Agreement, the Parties agree as follows:

1. GENERAL

1.1. CUSTOMER hereby engages CONTRACTOR to perform, and CONTRACTOR hereby agrees to perform, the services described in Exhibit K (Task Order 1) and any subsequent Task Order entered into pursuant to this Agreement in conformity with the terms of this Agreement. The services are generally described as: battery energy optimization services.

1.2. Capitalized terms used but not defined in the body of this Agreement will have the meaning ascribed to such term in Exhibit J (Definitions of Terms).

2. SERVICES

2.1. Scope of Services. Subject to Section 19.6, CONTRACTOR agrees to provide the Services described in each Task Order directly or through its Subcontractors. CONTRACTOR’s delegation to or other engagement with any Subcontractor will not relieve CONTRACTOR of its duties, responsibilities, obligations, or liabilities under this Agreement, CONTRACTOR shall be solely responsible for the performance of and payment to its Subcontractors. CUSTOMER shall have no obligation or liability to any of CONTRACTOR’s Subcontractors resulting from this Agreement.

2.2. Permits. CONTRACTOR has no obligation or responsibility to obtain or maintain any applicable regulatory authorizations, approvals and permits required for the operation of the Customer Products. In the event that CUSTOMER reasonably believes that failure to obtain or maintain the necessary permits may delay the commercial operations of the Customer Product, CUSTOMER may provide notice of termination to the CONTRACTOR to terminate the relevant Task Order.

In the event of termination of a Task Order for reasons under this Section 2.2, CUSTOMER shall be responsible for payment of all Service Fees for Services provided to the CUSTOMER prior to termination, but shall not be subject to any Termination Payment.

2.3. CUSTOMER Data. CONTRACTOR may require CUSTOMER Data to perform the Services, calculate payments under the applicable Task Order, and for all other purposes required this Agreement.

Within ten Business Days from receipt of CONTRACTOR’s written request, CUSTOMER shall provide the CONTRACTOR with such required data. CUSTOMER’s failure to provide or cause

DocuSign Envelope ID: 729B6031-DDB7-49F9-A1A5-20BF85A6F099

Page 166 of 438 ends

2 CONTRACTOR’s receipt of the required CUSTOMER Data may delay the Services or cause the cancelation of the relevant Task Order.

2.4. Task Orders. In the event CUSTOMER determines that additional Services as set forth in Exhibit B Sections 3 and 4 beyond the initial Task Order are required, CUSTOMER may issue to CONTRACTOR a Task Order following the form set forth in Exhibit A (Form of Task Order) to this Agreement.

2.4.1. CUSTOMER will prepare and issue Task Orders to CONTRACTOR, subject to CONTRACTOR’S approval to provide the Services.

2.4.2.Task Orders for any additional Services will be performed in accordance with the terms and conditions of this Agreement including the exhibits to this Agreement (the “Exhibits”).

2.4.3.Task Orders shall have no force or effect unless executed by duly authorized representatives of both Parties. Once executed, each Task Order shall be binding on the Parties in accordance with its terms.

2.4.4.The Parties may agree to adjust the terms and conditions of any Task Order through a written amendment or restatement.

3. PAYMENT PROVISIONS

3.1. CUSTOMER shall pay the CONTRACTOR in accordance with the payment provisions set forth in Section 8, below and Exhibit F (Payment Terms & Conditions), subject to the limitations set forth in this Agreement.

4. TERM OF AGREEMENT

4.1. The term of this Agreement is from the date of execution and shall extend three years after the Initial Go-Live Date (the "Initial Term"), unless sooner terminated pursuant to the terms of this Agreement. This Agreement is of no force or effect until signed by both the CONTRACTOR and CUSTOMER, with CUSTOMER’s execution to be last in time. CONTRACTOR may not commence work under this Agreement before CUSTOMER signs this Agreement.

4.2. This Agreement will automatically renew for 12-month periods (each a “Renewal Term” and collectively with the Initial Term “Term”) unless a Party provides the other Party with written notice of non-renewal at least 90 days before the completion of the then-current Term (the “Renewal Period”). In the event of such non-renewal, The Agreement will remain in effect until the expiration of all Task Orders entered into before the effective date of such termination until both Parties have fulfilled all of their obligations under such Task Orders, or such Task Orders have been canceled or terminated under its terms or the terms of this Agreement.

5. SCOPE OF SERVICES AND ADDITIONAL PROVISIONS

5.1. The following attached Exhibits are incorporated herein by reference and constitute a part of this Agreement:

5.1.1.Exhibit A: Form of Task Order

DocuSign Envelope ID: 729B6031-DDB7-49F9-A1A5-20BF85A6F099

Page 167 of 438 ends

3 5.1.2.Exhibit B: List of Services

5.1.3.Exhibit C: Scope of Customer Support Services

5.1.4.Exhibit D: Technical Requirements

5.1.5.Exhibit E: Payment Terms & Conditions

5.1.6.Exhibit F: Pricing Table

5.1.7. Exhibit G: Procedures for Unauthorized Release of Covered Information

5.1.8. Exhibit H: Ownership; Title; License Grants

5.1.9. Exhibit I: Services Warranty

5.1.10. Exhibit J: Definitions of Terms

5.1.11. Exhibit K: Task Order #1

6. REPRESENTATIONS AND DISCLAIMERS

6.1. Each Party represents that (i) it is organized, validly existing, and in good standing under the laws of its jurisdiction of its formation and in each jurisdiction where it is required to be so qualified in connection with the Services contemplated under this Agreement, (ii) it has the right to enter into this Agreement and each Task Order, (iii) the execution and delivery of this Agreement will not violate the terms of any contract, obligation, Applicable Law, regulation, or ordinance to which it is subject, and (iv) it shall comply with Applicable Law in executing this Agreement and the provision or use of any Services.

6.2. Each Party acknowledges that the other Party shall have no direct or indirect liability or obligation to any third party relating to this Agreement or any associated Task Order.

6.3. CONTRACTOR represents that it is not a utility and is not purchasing from nor selling electricity to CUSTOMER. CONTRACTOR shall have no responsibility for (i) any costs or liabilities associated with the procurement, purchase, and use of any electricity in connection with the Customer Products, or (ii) any direct or indirect liability or obligation to any permitted assigns relating to this Agreement or any Task Order except as stated in this Agreement.

7. PERFORMANCE STANDARDS

7.1. CONTRACTOR warrants that CONTRACTOR and CONTRACTOR’s agents, employees and Subcontractors performing services under this Agreement are specially trained, experienced, competent, and appropriately licensed to perform the work and deliver the services required under this Agreement and are not employees of CUSTOMER or immediate family of an employee of CUSTOMER.

7.2. CONTRACTOR and CONTRACTOR’s agents, employees and subcontractors shall perform all work in a safe and skillful manner and in compliance with all applicable laws and regulations. All work performed under this Agreement that is required by law to be performed or supervised by licensed personnel shall be performed in accordance with such licensing requirements.

DocuSign Envelope ID: 729B6031-DDB7-49F9-A1A5-20BF85A6F099

Page 168 of 438 ends

4 7.3. CONTRACTOR shall furnish, at its own expense, all materials, equipment, and personnel necessary to carry out the terms of this Agreement, except as otherwise specified in this Agreement. CONTRACTOR shall not use CUSTOMER premises, property (including equipment, instruments, or supplies) or personnel for any purpose other than in the performance of its obligations under this Agreement.

7.4. CONTRACTOR warrants the Services provided under this Agreement to the extent described in Exhibit I (Services Warranty).

8. PAYMENT CONDITIONS

8.1. Prices for Services under all Task Orders subject to this Agreement shall not exceed the amounts described in Exhibit E (Pricing Table) for the Initial Term of the Agreement.

8.2. If this Agreement is renewed pursuant to Section 4.2, for the first Renewal Period after the Initial Term (“Initial Renewal Term”), the Services Fees, Subscription Fees, and Advisory Fees (“Contract Fees”) for the Initial Renewal Term shall not increase in an amount that exceeds 3% of the Contract Fees in the last year of the Initial Term (the “Price Increase Cap”). . The Contract Fees for any subsequent Renewal Term are not subject to any Price Increase Cap, unless otherwise agreed to by the Parties. Rate changes are not binding unless mutually agreed upon in writing by CUSTOMER and the CONTRACTOR.

8.3. Invoices shall be submitted in accordance with the payment provisions set forth in this Section 8 and Exhibit F (Payment Terms & Conditions) and on a form acceptable to CUSTOMER and provide sufficient detail, as determined by CUSTOMER, of Services rendered for the invoiced period.

8.4. CONTRACTOR shall submit invoices to CUSTOMER monthly for Customer’s Share of the Contract Fees in accordance with the payment provisions set forth in this Section 8 and Exhibit B (Payment Terms & Conditions) unless otherwise specified in the applicable Task Order. CONTRACTOR shall submit invoices no later than thirty (30) days after the last day of the month in which such Services were rendered.

8.4.1.Subscription Fees. Unless other billing and payment terms are specified in the applicable Task Order, the Subscription Fees for the first Customer Product will commence on the Go-Live Date of that Customer Product and extend for 12 months, (the “Annual Subscription Fee Term”), to automatically renew for each subsequent 12 -month period until the expiration or termination of the Agreement.

8.4.2.Should Customer subsequently enroll any additional Customer Product within Athena® PowerBidder ProTM during the term of the Agreement, CONTRACTOR will invoice CUSTOMER for Customer’s Share of the annual Subscription Fees of each subsequent Customer Product on a prorated basis. Prorating is calculated based on how many days the Customer Product will be operational within the current Annual Subscription Fee Term. CONTRACTOR will

DocuSign Envelope ID: 729B6031-DDB7-49F9-A1A5-20BF85A6F099

Page 169 of 438 ends

5 invoice CUSTOMER for each new Customer Product as of the Go-Live Date for the daily prorated amount due to CONTRACTOR in accordance with selections made in the applicable Task Order.

8.5. Invoices shall reflect Customer’s Share of the total fees owed under each Task Order.

Notwithstanding CUSTOMER’S payment the Customer’s Share of any Invoice, CONTRACTOR reserves the right to withhold any Services, in whole or in part, for deficiencies in payment of the total fees owed under any TaskOrder.

8.6. CUSTOMER shall certify the invoice for payment in either the amount requested, or in such other amount as CUSTOMER determines is due in conformity with the payment provisions set forth in Exhibit F (Payment Terms & Conditions). Invoices shall be certified and paid within 45 days of submission to CUSTOMER.

9. TERMINATION

9.1. In addition to its termination rights under Section 4.2, during the term of this Agreement, CUSTOMER in its sole discretion may terminate either the Agreement or any Task Order for any reason by giving written notice of termination to the CONTRACTOR at least ninety (90) days prior to the effective date of termination. Such notice shall set forth the effective date of termination of the Agreement or the Task Order. In the event of such termination, un∂er this Section 9.1 CUSTOMER shall pay to CONTRACTOR the Termination Payment (as defined below). Unless otherwise stated in the affected Task Order, the "Termination Payment"” shall be the lesser of the Customer’s Share of (a) the fees remaining to be paid for Services under any terminated Task Order (or the sum of the fees remaining to be paid under all Task Orders in the event of a termination of this Agreement) and (b) 12 months’ worth of the Services fees under any terminated Task Order at the rate applicable at the time of such termination (or the sum of the fees remaining to be paid under all Task Orders in the event of a termination of this Agreement).

For the avoidance of doubt, CUSTOMER shall not owe a termination fee for a termination under Sections 2.2, 4.2, 9.2 or 9.3.

9.2. CUSTOMER at its sole discretion may terminate this Agreement or any Task Order for cause effective immediately upon written notice to CONTRACTOR. “Cause” includes CONTRACTOR’s gross negligence, breach, default or failure to cure a default or breach of this Agreement that is capable of cure in accordance with Section 10 of this Agreement. If CUSTOMER terminates this Agreement for Cause, CUSTOMER shall be relieved of any further liabilities to CONTRACTOR including the obligation to pay any termination fee or damages under this Agreement to CONTRACTOR, and CUSTOMER may proceed with the work without the Services in any manner.

CONTRACTOR will only terminate this Agreement in whole or part following default or breach or, if a default or breach is capable of cure, a failure to cure default or breach by CUSTOMER of this Agreement as defined in Section 10.

9.3. The Parties acknowledge that the total cost of the Services are shared between CUSTOMER and Silicon Valley Clean Energy (“SVCE”) If CUSTOMER has paid invoices rendered to it under this Agreement in a timely manner, but CONTRACTOR does not receive the total amount of Services

DocuSign Envelope ID: 729B6031-DDB7-49F9-A1A5-20BF85A6F099

Page 170 of 438 ends

6 Fees and/or Subscription Fees owed by SVCE for the Services within ten (10) Business Days of SVCE’s receipt of a demand for payment from CONTRACTOR for a past due monthly or annual invoice for the Services, CONTRACTOR may suspend the Services affected by the failure to pay in whole or in part, or terminate this Agreement upon thirty (30) days notice to CUSTOMER. Upon termination under this Section 9.3, neither Party shall have any liability to or rights against the other Party.

10. DEFAULT OR BREACH

10.1. Each of the following events will constitute a default or breach if not cured within the Cure Period as follows: (i) If a Party breaches any material term of this Agreement and fails to cure such breach within 30 days after receipt of written notice of breach from the non-breaching Party, (ii) If a Party becomes insolvent, or upon the appointment of a receiver or receiver-manager for any part of the property of that Party, or a Party makes an assignment, proposal or arrangement for the benefit of creditors or proceedings are commenced by or for a Party under any bankruptcy, insolvency or debtor’s relief law not terminated within 60 days, or (iii) If a Party fails to make a payment when due under this Agreement and fails to make payment within 10 Business Days after receipt of a demand for payment (“Payment Default”). The Parties may mutually agree in writing to extend any of the notices of breach or termination. For this section

10.1, “Cure Period” means the periods detailed in (i), (ii), and (iii) above.

10.2. If a Party fails to cure any default or breach, including a Payment Default, within the applicable Cure Period, then the non-breaching Party, at its option, may subject to Section 12, in addition to any other remedies it may have under this Agreement or at law or in equity, immediately terminate this Agreement or the affected Task Order upon written notice to the other Party. If the affected Task Order is terminated, such termination will not affect any other Task Order not affected by the breach.

10.3. The obligations under Section 12, Section 14, and the obligations to make payments for Services performed prior to the date of termination or any Termination Payment as noted in Sections 2.2 and 9 respectively, shall survive the termination of this Agreement.

11. LIMITATION OF LIABILITY

11.1. Neither Party, nor any Party’s affiliates, subcontractors, agents, or employees shall be liable to the other Party for any incidental, indirect, special, punitive, or consequential losses or damages, whether arising in contract, warranty, tort (including negligence), strict liability or otherwise, including damages relating to the loss of use, profits, business, reputation, financing, revenue, power, information or data, or the cost of capital, or such damages based on a Party’s third-party contracts.

11.2. Except for CUSTOMER’s payment obligations under this Agreement for Services performed prior to the date of termination, the maximum aggregate liability of each Party, its Affiliates, subcontractors, agents, and employees arising out of the performance or nonperformance of obligations in connection with this Agreement or the performance or nonperformance of any services provided through any Task Order, under any theory of recovery, whether based in contract, in tort (including negligence and strict liability), or otherwise, will not exceed an amount greater than the equivalent of 12 months’ worth of the Customer’s Share of

DocuSign Envelope ID: 729B6031-DDB7-49F9-A1A5-20BF85A6F099

Page 171 of 438 ends

7 the Contract Fees under this Agreement. The Parties agree that the above limitations and exclusions will not apply to losses or damages that are due to the other Party, or the other Party’s Affiliates’, subcontractors’, agents’, or employees’, gross negligence, willful misconduct, breach of confidentiality, and the Parties’ respective express indemnity obligations under this Agreement. Neither Party shall be liable for penalties of any kind.

12. INDEMNIFICATION

12.1. CONTRACTOR shall indemnify, defend, and hold harmless CUSTOMER, its Directors, Board members, officers, agents and employees (each, a "CUSTOMER Indemnitee") from and against all third-party claims and expenses (“Losses”) incurred by CUSTOMER Indemnitees in connection with or arising from (i) any claim by a third party for physical damage to or physical destruction of property, or death of or bodily injury to any person, however caused; or (ii) a breach by CONTRACTOR of any of its obligations under this Agreement including but not limited to Section

2.1. 12.2. CUSTOMER Indemnitee (“Indemnified Party”) shall promptly, but no more than ten Business Days after becoming aware of any claim of Losses shall provide notice of such claim to the CONTRACTOR (the “Indemnifying Party”). The Indemnifying Party shall assume the defense of the claim with counsel satisfactory to the Indemnified Party; provided that, if in the reasonable opinion of counsel for the Indemnified Party, a conflict of interest between the Parties may exist with respect to such claim, the Indemnified Party shall have the right to select and be represented by separate counsel. If the Indemnifying Party does not assume the defense of the Indemnified Party, or if the Indemnified Party concludes a conflict of interest precludes the Indemnifying Party from assuming the defense, then the Indemnifying Party shall reimburse the Indemnified Party monthly for the Indemnified Party’s defense through separate counsel of the Indemnified Party’s choice. Even if the Indemnifying Party assumes the defense of the Indemnified Party with acceptable counsel, the Indemnified Party, at its sole option, may participate in the defense at its own expense and with counsel of its own choice without relieving the Indemnifying Party of any of its obligations under this Agreement.

13. INSURANCE REQUIREMENTS

13.1. Prior to commencement of this Agreement, the CONTRACTOR shall provide a “Certificate of Insurance” certifying that coverage as required herein has been obtained. Individual endorsements executed by the insurance carrier shall accompany the certificate. CONTRACTOR shall furnish current certificates substantiating the required insurance maintenance.

13.2. Without limiting CONTRACTOR’S duty to defend and indemnify, CONTRACTOR shall maintain in effect throughout the term of this Agreement a policy or policies of insurance with the following minimum limits of liability:

13.2.1.1. Commercial General Liability Insurance, including but not limited to premises and operations, including coverage for Bodily Injury and Property Damage, Personal Injury, Contractual Liability, Broad form Property Damage, Independent Contractors, products and Completed Operations, and cross-liability with a combined single limit

DocuSign Envelope ID: 729B6031-DDB7-49F9-A1A5-20BF85A6F099

Page 172 of 438 ends

8 for Bodily Injury and Property Damage of not less than $1,000,000 per occurrence, and $2,000,000 in the aggregate.

13.2.1.2. Workers’ Compensation Insurance, as may be from time to time required under applicable federal and state law.

13.2.1.3. Professional Liability Insurance, if required for the professional services being provided, (e.g., those persons authorized by a license to engage in a business or profession regulated by the California Business and Professions Code), in the amount of not less than $1,000,000 per claim and $2,000,000 in the aggregate, to cover liability for malpractice or errors or omissions made in the course of rendering professional services. If professional liability insurance is written on a “claims-made” basis rather than an occurrence basis, the CONTRACTOR shall, upon the expiration or earlier termination of this Agreement, obtain extended reporting coverage (“tail coverage”) with the same liability limits. Any such tail coverage shall continue for at least three years following the expiration or earlier termination of this Agreement.

13.3. Unless otherwise specified by this Agreement, all such insurance shall be written on an occurrence basis, or, if the policy is not written on an occurrence basis, such policy with the coverage required herein shall continue in effect for a period of three years following the date CONTRACTOR completes its performance of services under this Agreement.

13.4. Commercial general liability policy shall provide an endorsement naming 3CE, its Directors, Board members, officers, agents, and employees as Additional Insureds with respect to liability arising out of the CONTRACTOR’S work, including ongoing and completed operations, and shall further provide that such insurance is primary insurance to any insurance or self-insurance maintained by 3CE and that the insurance of the Additional Insureds shall not be called upon to contribute to a loss covered by the CONTRACTOR’S insurance.

14. RECORD AND CONFIDENTIALITY

14.1. Duty to Maintain Confidentiality. Upon receiving or learning of Confidential Information, the Party receiving Confidential Information (“Receiving Party”) from the other Party (“Disclosing Party”) will: (a) treat such Confidential Information as confidential and use reasonable care not to divulge such Confidential Information to any third party except as set forth in this Section 14.1; (b) restrict access to such Confidential Information to only those of its employees and contractors, in each case who reasonably need to know it in order to provide the Services and are bound by confidentiality provisions no less stringent than those in this Section

14.1; and (c) use such Confidential Information solely for purposes of performing its obligations this Agreement. Confidential Information will retain its character as Confidential Information but may be disclosed by the Receiving Party if and to the extent such disclosure is required (a) to be made by any requirements of Law, (b) pursuant to an order of a court or (c) in order to enforce this Agreement; provided, each Party shall, to the extent practicable, use reasonable efforts to prevent or limit the disclosure. If the Receiving Party becomes legally compelled (by interrogatories, requests for information or documents, subpoenas, summons, civil investigative

DocuSign Envelope ID: 729B6031-DDB7-49F9-A1A5-20BF85A6F099

Page 173 of 438 ends

9 demands, or similar processes or otherwise in connection with any litigation or to comply with any applicable Law, order, regulation, ruling, or regulatory request to disclose any Confidential Information of the Disclosing Party, Receiving Party shall provide Disclosing Party with prompt notice so that Disclosing Party, at its sole expense, may seek an appropriate protective order or other appropriate remedy. If the Disclosing Party takes no such action after receiving the foregoing notice from the Receiving Party, the Receiving Party is not required to defend against such request and shall be permitted to disclose such Confidential Information of the Disclosing Party, with no liability for any damages that arise from such disclosure. Each Party hereto acknowledges and agrees that information and documentation provided in connection with this Agreement may be subject to disclosure pursuant to the California Public Records Act (Government Code Section 6250 et seq.).

14.2. Receiving Party acknowledges that its obligations hereunder are necessary and reasonable in order to protect Disclosing Party and the business of Disclosing Party, and expressly acknowledges that monetary damages would be inadequate to compensate Disclosing Party for any breach or threatened breach by Receiving Party of any covenants and agreements set forth in this Section 14. Accordingly, Receiving Party acknowledges that any such breach or threatened breach will cause irreparable injury to Disclosing Party and that, in addition to any other remedies that may be available except as otherwise limited under this Agreement, in law, in equity or otherwise, Disclosing Party will be entitled to obtain injunctive relief against the threatened breach of this Section 14 or the continuation of any such breach, without the necessity of proving actual damages.

Confidential Information specifically includes Covered Information, as defined in Exhibit J (Definitions of Terms), including Protected Personal Information(“PPI”) that identifies, relates to, describes, or is capable of being associated with, or could reasonably be linked, directly or indirectly, with a consumer, household, or customer account. In the event of an inadvertent disclosure of PPI, all such Covered Information and PPI must fully be protected from disclosure as set forth in California Public Utility Commission Decision D.12-08.045. In the event of an unauthorized release of Covered Information and PPI, CONTRACTOR shall comply with Exhibit C, (Procedures for Unauthorized Release of Covered Information).

14.3. Upon expiration or termination of this Agreement, the Receiving Party shall return to the disclosing Party any records used or received from the disclosing Party to perform services under this Agreement.

14.4. Notwithstanding Section 14.2, each Party shall prepare, maintain, and preserve all reports and records that may be required of it by federal, state, and local rules and regulations related to services performed under this Agreement. Each Party shall maintain such records for a period of at least three years after receipt of final payment under this Agreement. If any litigation, claim, negotiation, audit exception, or other action relating to this Agreement is pending at the end of the three-year period, then each Party shall retain said records until such action is resolved.

DocuSign Envelope ID: 729B6031-DDB7-49F9-A1A5-20BF85A6F099

Page 174 of 438 ends

10 14.5. CUSTOMER shall have the right to examine, monitor and audit all records, documents, conditions, and activities of the CONTRACTOR and its subcontractors related to services provided under this Agreement. Pursuant to Government Code section 8546.7, if this Agreement involves the expenditure of public funds in excess of $10,000, the Parties to this Agreement may be subject, at the request of CUSTOMER or as part of any audit of CUSTOMER, to the examination and audit of the State Auditor pertaining to matters connected with the performance of this Agreement for a period of three years after final payment under the Agreement.

Title and ownership of the instruments used by Seller to provide Services are set forth in Exhibit H (Ownership; Title; License Grants).

15. NON-DISCRIMINATION

15.1. During the performance of this Agreement, CONTRACTOR, and its subcontractors, shall not unlawfully discriminate against any person because of race, religious creed, color, sex, national origin, ancestry, physical disability, mental disability, medical condition, marital status, age (over 40), or sexual orientation, either in CONTRACTOR’s employment practices or in the furnishing of services to recipients. CONTRACTOR shall ensure that the evaluation and treatment of its employees and applicants for employment and all persons receiving and requesting services are free of such discrimination. CONTRACTOR and any subcontractor shall, in the performance of this Agreement, fully comply with all federal, state, and local laws and regulations which prohibit discrimination. The provision of services primarily or exclusively to such target population as may be designated in this Agreement shall not be deemed to be prohibited discrimination.

16. INDEPENDENT CONTRACTOR

16.1. In the performance of work, duties, and obligations under this Agreement, CONTRACTOR is at all times acting and performing as an independent contractor and not as an employee of CUSTOMER. No offer or obligation of permanent employment with CUSTOMER is implied by this Agreement and CONTRACTOR shall not become entitled by virtue of this Agreement to receive from CUSTOMER any form of employee benefits including but not limited to sick leave, vacation, retirement benefits, workers’ compensation coverage, insurance or disability benefits.

CONTRACTOR shall be solely liable for and obligated to pay directly all applicable taxes, including federal and state income taxes and social security, arising out of CONTRACTOR’s performance of this Agreement. In connection therewith, CONTRACTOR shall defend, indemnify, and hold CUSTOMER harmless from any and all liability which CUSTOMER may incur because of CONTRACTOR’s failure to pay such taxes.

17. NOTICES

17.1. Notices required under this Agreement shall be delivered personally or by first-class, postage pre-paid mail to CUSTOMER and CONTRACTOR’S contract administrators at the addresses listed below:

Central Coast Community Energy
Attn: Dennis Dyc-O’Neal, COO
Stem US Operations Inc.

DocuSign Envelope ID: 729B6031-DDB7-49F9-A1A5-20BF85A6F099

Page 175 of 438 ends

11 70 Garden Court, Suite 300 100 California St., 14th Floor Moneterey, CA 93940 San Francisco, CA 94111

18. MISCELLANEOUS PROVISIONS

18.1. Conflict of Interest. CONTRACTOR represents that it presently has no interest and agrees not to acquire any interest during the term of this Agreement related to CUSTOMER, Customer Products, CONTRACTOR’s subcontractors or suppliers involved in the performance of Services, or any other interest which would directly, or indirectly conflict in any manner or to any degree with the full and complete performance of the Services required to be rendered under this Agreement.

18.2. Amendment. This Agreement may be amended or modified only by an instrument in writing signed by CUSTOMER and the CONTRACTOR.

18.3. Waiver. Any waiver of any terms and conditions of this Agreement must be in writing and signed by CUSTOMER and the CONTRACTOR. A waiver of any of the terms and conditions of this Agreement shall not be construed as a waiver of any other terms or conditions in this Agreement.

18.4. Contractor. The term “CONTRACTOR” as used in this Agreement includes CONTRACTOR’s officers, agents, and employees acting on CONTRACTOR’s behalf in the performance of this Agreement.

18.5. Disputes. In the event of any dispute arising under this Agreement, within ten (10) days following the receipt of a written Notice from either Party identifying such dispute, the Parties shall meet, negotiate and attempt, in good faith, to resolve the dispute quickly, informally and inexpensively. If the Parties are unable to resolve a dispute arising hereunder within the earlier of either thirty (30) days of initiating such discussions, or within forty (40) days after Notice of the dispute, the Parties shall submit the dispute to mediation prior to seeking any and all remedies available to it at Law in or equity. The Parties will cooperate in selecting a qualified neutral mediator selected from a panel of neutrals and in scheduling the time and place of the mediation as soon as reasonably possible, but in no event later than thirty (30) days after the request for mediation is made. The Parties agree to participate in the mediation in good faith and to share the costs of the mediation, including the mediator’s fee, equally, but such shared costs shall not include each Party’s own attorneys’ fees and costs, which shall be borne solely by such Party. Unless agreed to in writing by each Party, the mediation shall be concluded within the earlier of (a) sixty (60) days after the mediator is selected, and (b) ninety (90) days of the date the dispute is submitted to mediation. If the mediation is unsuccessful, then either Party may seek any and all remedies available to it at law or in equity, subject to the limitations set forth in this Agreement.

18.6. Assignment and Subcontracting. Neither Party shall assign, sell, or otherwise transfer its interest or obligations in this Agreement without the prior written consent of the other Party which shall not be unreasonably withheld. None of the services covered by this Agreement shall be subcontracted without the prior written approval of CUSTOMER. Notwithstanding any such subcontract, CONTRACTOR shall continue to be liable for the performance of all requirements of this Agreement, including for all actions or inaction of any Subcontractor.

DocuSign Envelope ID: 729B6031-DDB7-49F9-A1A5-20BF85A6F099

Page 176 of 438 ends

12 18.7. Successors and Assigns. This Agreement and the rights, privileges, duties, and obligations of CUSTOMER and CONTRACTOR under this Agreement, to the extent assignable or delegable, shall be binding upon and inure to the benefit of the Parties and their respective successors, permitted assigns, and heirs.

18.8. Cooperation, Further Assurances, and Joint Preparation of Agreement. Upon receiving a written request from the other Party, each Party agrees to take such further actions as reasonably necessary and desirable to carry out the terms and intent of this Agreement. Neither Party will unreasonably withhold, condition, nor delay compliance with any reasonable request under this subsection. Preparation of this Agreement has been a joint effort of the Parties, and the resulting document will not be construed more severely against one of the Parties than the other.

18.9. Compliance with Applicable Law. The Parties shall comply with all applicable federal, state, and local laws and regulations in performing this Agreement.

18.10. Headings. The headings are for convenience only and shall not be used to interpret the terms of this Agreement.

18.11. Time is of the Essence. Time is of the essence in each and all of the provisions of this Agreement.

18.12. Governing Law. This Agreement shall be governed by and interpreted under the laws of the State of California.

18.13. Non-exclusive Agreement. This Agreement is non-exclusive and both CUSTOMER and CONTRACTOR expressly reserve the right to contract with other entities for the same or similar services.

18.14. Construction of Agreement. CUSTOMER and CONTRACTOR agree that each Party has fully participated in the review and revision of this Agreement and that any rule of construction to the effect that ambiguities are to be resolved against the drafting Party shall not apply in the interpretation of this Agreement or any amendment to this Agreement.

18.15. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same Agreement. The signing of this Agreement and transmission by electronic document transfer or email will be acceptable and binding upon the Parties.

18.16. Authority. Any individual executing this Agreement on behalf of CUSTOMER or the CONTRACTOR represents and warrants hereby that he or she has the requisite authority to enter into this Agreement on behalf of such Party and bind the Party to the terms and conditions of this Agreement.

18.17. Equitable Relief. Each Party agrees and acknowledges (i) that the infringement of either Party’s Intellectual Property rights may cause irreparable injury and that the non-infringing Party

DocuSign Envelope ID: 729B6031-DDB7-49F9-A1A5-20BF85A6F099

Page 177 of 438 ends

13 agrees it will be entitled to apply for equitable relief, including injunction or injunctions as may be required to prevent any breach, infringement, or further breach or infringement of any Intellectual Property rights or disclosure or misuse of Confidential Information, and may specifically enforce such provisions or protect these rights by an action instituted in any court having jurisdiction, (ii) that damages may be an inadequate remedy for such a breach or infringement, and (iii) that the aggrieved Party may apply for such equitable relief without posting a bond or surety. Nothing in this Agreement will prevent or prohibit either Party from disputing the occurrence of such breach or infringement, including the occurrence of the default giving rise to the application for such injunctive relief.

18.18. Export Restrictions. The Parties acknowledge that the Services, software, and technical data provided under this Agreement may be subject to import, export, and re-export controls under the U.S. Export Administration Regulations and regulations under the Office of Foreign Assets Control of the U.S. Department of Commerce and regulations of other countries or governments. Neither Party shall export or re-export any Services, software, technical data, or Intellectual Property or undertake any transaction in violation of any such export and import laws. Each Party shall be responsible for its compliance with all such laws.

18.19. Force Majeure. A Party may suspend the performance of an obligation to the extent performance of such obligation is rendered impossible by a Force Majeure event. The affected Party will provide written notice to the other Party within 5 days of an event of Force Majeure or as soon as practicable. The suspension of performance by a Party for reasons of a Force Majeure event will be of no greater scope and no longer duration than that which is necessary. The excused Party shall use commercially reasonable efforts to remedy its inability to perform. If a Force Majeure event continues for 6 months, either Party may terminate this Agreement without liability for either Party.

18.20. Integration. This Agreement, including the Exhibits and Task Orders form a single integrated agreement represent the entire Agreement between CUSTOMER and the CONTRACTOR with respect to the subject matter of this Agreement and shall supersede all prior negotiations, representations, or agreements, either written or oral, between CUSTOMER and the CONTRACTOR as of the effective date of this Agreement, which is the date that CUSTOMER signs the Agreement.

18.21. Interpretation of Conflicting Provisions. In the event of any conflict or inconsistency between the provisions of this Agreement and the Provisions of any exhibit or other attachment to this Agreement, the provisions of this Agreement shall prevail and control.

18.22. Invalidity. If any court of competent jurisdiction finds or deems any provision of this Agreement to be invalid or unenforceable, it shall be considered severable and will not affect the validity or enforceability of any other provision of this Agreement, which will remain in full force and effect. Any unenforceable provision of this Agreement will be reformed only to the extent necessary to make it enforceable. To the extent that any provision of this Agreement (including the Exhibits) excludes or limits any statutory liability which, according to mandatory provisions of Applicable Law, are not contractually excluded or limited by mutual agreement of the Parties, then such provision will be given only such effect if any, as is permitted by Applicable Law.

DocuSign Envelope ID: 729B6031-DDB7-49F9-A1A5-20BF85A6F099

Page 178 of 438 ends

14 18.23. Liens. CONTRACTOR will not permit or suffer any liens or encumbrances on products or the Site Location arising directly from CONTRACTOR’s or any of its Subcontractors’ performance of the Services.

18.24. Reference. With prior written consent from CUSTOMER, CONTRACTOR may use CUSTOMER as a customer reference, use CUSTOMER’s name and logo in marketing materials, or ask CUSTOMER to participate in communication efforts such as quotes, press releases, case studies, and video testimonials.

18.25. Validity. This Agreement and each associated Task Order will only be valid when fully executed.

The Parties’ authorized representatives executed this Agreement as of the date below.

SIGNATURE OF THE PARTIES:

Stem US Operations Inc.
_____________________________________
BY:Matthew Tappin
Title: President Asset Management Division
Date: ____________________________
Central Coast Community Energy
_____________________________________
BY: Robert Shaw
Title: Chief Executive Officer
Date: 02/20/2024
Stem US Operations Inc.

BY: Peter Henderson
Title: SVP, Solutions Sales
Date: _________________________
Approved as to Form and Legality
_____________________________
BY: Charles McKee
Date: 02/20/2024

DocuSign Envelope ID: 729B6031-DDB7-49F9-A1A5-20BF85A6F099

Page 179 of 438 ends

15 Exhibit A: Form of Task Order
TASK ORDER [#]
This Task Order [#] is entered into by and between Stem US Operations Inc. (“CONTRACTOR”) and [_____________] (“CUSTOMER”) dated effective as of the Task Order Effective Date. This Task Order is issued under and subject to the Standard Services Agreement (“Agreement”) with an Effective Date of [__________] by and between the Parties. Capitalized terms used but not otherwise defined in this Task Order, will have the meaning given to them in this Order Form or if not defined herein, in the Agreement.

1. Project Description
Attribute Value
Opportunity Name «Opportunity_Name»
Opportunity ID
Product Type «Deal_Type»
AC or DC-Coupled «Deal_Subtype»
Product Nameplate Capacity (kW) «Total_Hardware_(kW)»
Product Nameplate Capacity (kWh) «Total_Energy_Rating_(kWh)_Calc» Wholesale Market
Battery OEM/Vendor «OEM/Vendor»
Product Location Name «System_Name»
Product Location Address «Site_Street»
«Site_City», «Site_State» «Site_Zip_Code»«TableEnd:syst»

2. Services – Select all applicable Services applicable, as described in Exhibit B (List of Services) to the Agreement.
Customer Onboarding Services
Product Onboarding Services
Athena® PowerBidder ProTM Subscription Services
Professional Services
Advisory Services

3. Term - The term of this Task Order is from the Effective Date, as established by the date of the last Party to execute this Task Order, and extends three years after the Go-Live Date for the Project described in Section 1, unless sooner terminated by the expiration of the term of the Agreement.

DocuSign Envelope ID: 729B6031-DDB7-49F9-A1A5-20BF85A6F099

Page 180 of 438 ends

16 4. Pricing
Service Fees for Customer Products that are jointly owned by Customer and SVCE are calculated using the following formulas:
x Integration Fees = (Customer Onboarding Fee) + ((Product Onboarding Fee)*(Customer’s Share)) x Subscription Fees = ((Tiered Capacity Price by Product kWh)+(Fixed Product Price))*(Customer’s Share) Service Type Frequency Year 1 Price Total Price
Customer Onboarding Services One-Time* N/A $XXX
Product Onboarding Services One-Time* N/A $XXX
Athena® PowerBidder ProTM Subscription Services Annual $XXX $XXX Professional Services One-Time* N/A $XXX
Professional Services Annual $XXX $XXX
Advisory Services One-Time* N/A $XXX
Advisory Services Annual $XXX $XXX
In the event of any conflict between the Agreement and this Task Order, the terms of the Agreement will govern except as changed explicitly by this Task order. No modification to this Task Order will be binding unless in writing and signed by an authorized representative of each Party. Any express waiver or failure to promptly exercise any right under this Task Order will not create a continuing waiver or any expectation of non-enforcement, nor will such waiver constitute a waiver of any other provision. Any waiver will be effective only if it is in writing and signed by the Parties.

IN WITNESS WHEREOF, each Party has caused this Task Order to be duly executed in its name and on its behalf on the date below, the latest date shall be the Effective Date.

CONTRACTOR [CUSTOMER]
By: By:

Printed Name: Printed Name:

Its: Its:

Date: Date:

DocuSign Envelope ID: 729B6031-DDB7-49F9-A1A5-20BF85A6F099

Page 181 of 438 ends

2/20/2024 17 Contract Number: ______________
Exhibit B: List of Services
The following is a listing of the available Services subject to this Agreement. For purposes of this Exhibit B, the term “Stem” shall refer to “CONTRACTOR” as defined in the Agreement and the term “Customer” shall refer to “CUSTOMER” as defined in the Agreement.

1. Athena® PowerBidder ProTM Subscription Services Is a web application providing the following functionalities:
x Automated generation of wholesale market bids optimized by Stem’s Athena bidding engine, Customer-provided Customer Product information and telemetry, and market price forecasts
x Automated submission of wholesale market bids to the market operator through a scheduling entity
x User configuration of inputs used by Stem’s Athena bidding engine x User override of bids generated by Stem’s Athena bidding engine before the bid submission x Monitoring of wholesale market bids and physical delivery of market services x Reporting of performance analytics and shadow settlement data

2. Integration Services. Stem will provide standard specification API interfaces for exchanging necessary data with Customer software systems. If the Customer cannot comply with the required specifications, the Parties will mutually agree in writing on any accommodation of custom specifications, lead time, and cost. The integration specifications cover:
x API integration: Bids and offers; Awards; Solar Forecast (as relevant); and Hybrid Dynamic Limit (as relevant)
x DNP3.0 integration: Live telemetry

2.1. Customer Onboarding Services. Stem will provide onboarding support to the Customer to establish a functional data integration and for user training on Athena® PowerBidder ProTM. The Customer Onboarding Services include:
x API and DNP3.0 interface specification documentation; and x Up to ten hours of direct integration and testing support from Stem technical IT staff.

2.2. Product Onboarding Services. Stem will onboard the C u s t o m e r Product in Athena® PowerBidder ProTM and conduct applicable testing of functionality. The Customer Product Onboarding Services include:
x Training manual; and
x Up to six hours of user training by Stem.

3. Professional Services. Customer may purchase additional services at Stem’s then-current rates (“Professional Services”). When applicable, Professional Services and the associated fees are listed in Exhibit E (Pricing Table) to this Agreement or other document as mutually agreed by the Parties in writing.

4. Advisory Services. Customer may purchase additional services at Stem’s then-current rates (“Advisory Services”). When applicable, Advisory Services and the associated fees are listed in Exhibit E (Pricing Table) to this Agreement or other document as mutually agreed by the Parties in writing.

DocuSign Envelope ID: 729B6031-DDB7-49F9-A1A5-20BF85A6F099

Page 182 of 438 ends

2/20/2024 18 Contract Number: ______________

4.1. Energy Trading Strategy Development: Stem offers the customer with upfront advisory support to develop a set of pre-defined CAISO trading strategies for customer’s resource. x Document all system constraints that may impact trading strategy. x Confirm customer operational objectives and align on how to best reflect them within differentiated trading strategies.
x Meet with customer up to two (2) times for a total of up to three (3) hours to iterate on and confirm final trading strategies. Stem will deliver up to three (3) distinct trading strategies.

4.2. Energy Trading Advisory Services (must also purchase Energy Trading Strategy Development): Stem meets with customer to review performance of their trading strategies and provide advisory support on strategy refinement.
x Analyze customer’s trading strategies to determine key trends, takeaways, and KPIs, including assessment of backcast simulations to compare performance of customer’s alternative trading strategies.
x Summarize key implications for trading strategies of evolving market rules and regulatory requirements.
x Includes one (1) two-hour meeting with the customer every month. Stem will deliver results of its analysis in a PowerPoint deck.

DocuSign Envelope ID: 729B6031-DDB7-49F9-A1A5-20BF85A6F099

Page 183 of 438 ends

2/20/2024 19 Contract Number: ______________
Exhibit C: Scope of Customer Support Services
For purposes of this Exhibit C, the term “Stem” shall refer to “CONTRACTOR” as defined in the Agreement and the term “Customer” shall refer to “CUSTOMER” as defined in the Agreement.

1. Issue Severity Levels. The table below lists the issue severity levels.

Issue Severity Definition
Level 1
An error in the Services that (i) causes the Services to cease operating in any material respect; or (ii) is likely to directly or indirectly delete, impair, damage, or corrupt any Customer Product, Customer Data, or Usage Data; and (iii) does not have a known workaround.

Level 2
An issue where the Services remain operational but results in (i) a significant function of the Services is impaired or (ii) a material adverse impact on Customer’s business and does not have a known workaround.

Level 3
An issue that causes a minor impairment of the functioning of the Services, which adversely affects, or is likely to adversely affect, Customer’s business, and does not have a known workaround.

Level 4
An issue that causes a minor impairment of the functioning of the Services, but such impairment does not have, and could not reasonably be expected to have, an adverse effect on Customer’s business.

2. Issue Response Times. Subject to section 4 below, Stem shall make commercially reasonable efforts to (i) acknowledge issues in the Services in accordance with the Response Time set forth in the below issues severity table, and (ii) assign resources to correct issues in accordance with the Corrective Action Time set forth in the below issues severity table. Failure of (i) or (ii) shall not constitute a Stem breach.

Issue Severity Response Time Corrective Action Time
Level 1 2 Support Hours 4 Business Hours
Level 2 4 Support Hours 1 Business Day
Level 3 1 Business Day 3 Business Days
Level 4 3 Business Days 5 Business Days

3. Availability Guarantee. Subject to section 4 below, Stem shall provide Athena® PowerBidder ProTM to Customer such that Annual Availability meets or exceeds 99.5% (“Availability Guarantee”).

A. Availability Guarantee Cure. In the event Stem fails to achieve the Availability Guarantee for any Service Year, Stem will, within 90 days of the last day of the Service Year in which such failure occurred, either issue a credit to or pay Customer an amount equal to the sum of the then-current Capacity Price plus the Fixed Project Price prorated by the difference between the Availability Guarantee set forth above and the Annual Availability. All cure amounts paid under this exhibit are paid as liquidated damages and are not a penalty. Stem’s failure to achieve the Availability Guarantee offered in this exhibit will not be considered a breach or default under the Services Agreement.

DocuSign Envelope ID: 729B6031-DDB7-49F9-A1A5-20BF85A6F099

Page 184 of 438 ends

2/20/2024 20 Contract Number: ______________

4. Liquidated Damages. Subject to the general conditions stated in this exhibit, in the event Stem fails to achieve the Availability Guarantee, Stem shall immediately pay or credit to Customer, as liquidated damages, and upon written demand by Customer and within 30 days of receipt of such demand by Stem the cure amounts set forth in section 3 above with regard to the Availability Guarantee.

A. Acknowledgement Regarding Liquidated Damages. The Parties acknowledge that (i) it is difficult or impossible to determine with precision the damages that would or might be incurred by Customer as a result of Stem’s failure to achieve the Availability Guarantee in this exhibit, (ii) otherwise obtaining an adequate remedy is inconvenient, and (iii) the liquidated damages constitute a reasonable approximation of the harm or loss. The Parties hereby waive any right to contest such payments as an unreasonable penalty.

5. General Conditions. Certain conditions outside of Stem’s control may adversely affect Stem’s ability to provide Services or meet the issue response times of this Task Order. If any of the following events occur at any time after the Task Order Effective Date, Stem may, upon notice to and in consultation with Customer, make changes to the Services or any cures.

A. A material change in the configuration or utilization of the Customer Products as required or caused by Customer where such change affects Stem’s ability to perform the Services under this Task Order.

B. A material change in Market compliance requirements where such change affects Stem’s ability to perform the Services under this Task Order.

C. Customer’s failure to comply with the technical requirements or API specifications stated in Exhibit D (Technical Requirements).

D. Any action or inaction by Customer or its representative or Affiliate, including delays in providing information or participating in troubleshooting, as reasonably required by Stem to provide a resolution to the applicable issue,
E. Any external factor outside of Stem’s control including Force Majeure events.

F. Unavailability of Customer Products or wholesale market Products.

G. Any changes in Customer systems such as communications, network configuration, or firewalls.

DocuSign Envelope ID: 729B6031-DDB7-49F9-A1A5-20BF85A6F099

Page 185 of 438 ends

2/20/2024 21 Contract Number: ______________
Exhibit D: Technical Requirements
Customer shall adhere to the following technical requirements and specifications.

1. Bids and Offers API Interface. [to be provided]

2. Awards API Interface. [to be provided]

3. Hybrid Dynamic Limits API Interface. [to be provided]

4. Solar Forecasts API Interface. [to be provided]

5. Live Telemetry DNP3.0 Interface. [to be provided]

6. Supported Web Browsers and Screen Resolution. [to be provided]

DocuSign Envelope ID: 729B6031-DDB7-49F9-A1A5-20BF85A6F099

Page 186 of 438 ends

2/20/2024 22 Contract Number: ______________
Exhibit E: Pricing Table

1. Integration Fees. The fees for Integration Services under this Agreement are listed below and are invoiced upon the associated Task Order Effective Date. The Customer Onboarding fee is a one-time fee per IT Set-Up and is only applicable on the first Task Order, or if Customer’s IT Set-up has changed. In the event that the Customer Product is co-owned by Customer and SVCE, the Customer’s Share of Product Onboarding Fee shall be applicable.

Integration Services One Time Fee
Customer Onboarding $20,000.00
Product Onboarding $5,000.00

2. Subscription Fees. The Subscription Fees for Athena® PowerBidder ProTM under this Agreement are comprised of the Capacity Price per KWh of the Customer Product and the Fixed Product Price. The rates for each are listed below and are invoiced annually in advance, commencing on the Task Order Effective Date. The Capacity Price per KWh rates are calculated based on total kWh per Customer Product. In situations there is joint-ownership of a Customer Product between two or more parties, the summation of the jointly owned capacity will be used to determine price rate.

A. Subscription Fees
Product Capacity Tier
in kWh*
Capacity Price per kWh
each 12-month Task Order Term
Fixed Product Price
each 12-month TaskOrder Term
Fee Escalation
each 12 months
0 to 12,500 $1.50
$10,000 3%
12,501 to 25,000 $1.25
25,001 to 50,000 $1.00
50,001 to 100,000 $0.50
100,001 to 200,000 $0.25
200,001 to 400,000 $0.15
400,001 + $0.10
* A 10 MW Product with a four-hour discharge duration would have a 40 MWh nameplate capacity. Alternatively, a 10 MW Product with an eight-hour discharge duration would have an 80 MWh nameplate capacity.

For example, the calculation of the price for a project, owned by a single party, with a capacity of 20,000 kWh with the following parameters of (i) $10,000 Fixed Project Price, (ii) 12,500 kWh at $1.50 per kWh, and (iii) 7,500 kWh at $1.25 per kWh, is as follows: $10,000 + (12,500 x $1.50) + (7,500 x $1.25) = $38,125.

If the same project is equally co-owned by Customer and SVCE, the price for each co-owner is as follows: $10,000 + (12,500 x $1.50) + (7,500 x $1.25) $38,125 *(50%) = $19,062.50. .

3. Advisory Fees. The following table provides fees for two optional Advisory Services that complement the Subscription Services per Customer Product. In the event that the Customer Product is co-owned by Customer and SVCE, the Customer’s Share of Advisory Fees shall be applicable. ** Reflects application of 3% annual Escalator Fee
Service Upfront Year 1 Year 2** Year 3** Total
Energy Trading Strategy Development $5,000 $0 $0 $0 $5,000 Energy Trading Advisory Services $0 $25,000 $25,750 $26,523 $77,273 Total $82,273

DocuSign Envelope ID: 729B6031-DDB7-49F9-A1A5-20BF85A6F099

Page 187 of 438 ends

2/20/2024 23 Contract Number: ______________
Exhibit F: Payment Terms and Conditions

1. PRICES; PAYMENTS

1.1. Prices and Fees. Task Orders reflect the prices and fees associated with the Services.

1.2. Prices for Services shall not exceed the amounts described in Exhibit E (Pricing Table) for the initial term of the Agreement, as adjusted annually as provided by the Escalator Fee therein.

Negotiations for rate changes shall be commenced, by CONTRACTOR, a minimum of ninety days (90) prior to the expiration of the Agreement. Rate changes are not binding unless mutually agreed upon in writing by CUSTOMER and the CONTRACTOR.

1.3. Taxes. Prices and fees do not include Taxes, any Taxes related to the receipt of Services by Customer are CUSTOMER’s responsibility. To the extent Applicable Law requires CONTRACTOR to pay or collect Taxes from CUSTOMER, CONTRACTOR will invoice CUSTOMER, and CUSTOMER shall pay such amounts directly to CONTRACTOR under the invoice. If CUSTOMER is exempt from Taxes and before any Taxes are collected, due, or paid by CONTRACTOR, CUSTOMER shall submit to CONTRACTOR its exemption certification in the proper form issued by the applicable taxing authority. CUSTOMER is not responsible for any Taxes related to the performance of the Services by CONTRACTOR under this Agreement or the conduct of CONTRACTOR’s business.

1.4. Invoices. CONTRACTOR will submit invoices to CUSTOMER for Customer’s Share of any amounts due under this Agreement or relevant Task Order in accordance with this Agreement.

1.5. Payments. CUSTOMER shall pay all undisputed invoices (i) in accordance with the terms and conditions of the relevant invoice, (ii) without offset, abatement, or reduction, and (iii) in U.S. dollars unless stated otherwise in the relevant invoice.

1.6. Payment Dispute. CUSTOMER may dispute an invoice by providing CONTRACTOR with written notice. Such notice must (i) identify the disputed invoice, (ii) outline in reasonable detail the basis for the dispute, (iii) state the amount in dispute, and (iv) and submit such dispute to CONTRACTOR no fewer than 15 days before the invoice due date. The Parties will deem undisputed invoices correct in all respects, and CUSTOMER shall pay any undisputed portions of each invoice as set forth in this Agreement.

1.7. Withholding of Payments. CUSTOMER may withhold any payment amounts in dispute or any amounts sufficient to reasonably protect CUSTOMER from loss, damage, or expense arising out of a documented third-party assertion of any claim or lien against CUSTOMER arising in connection with this Agreement or any Task Order.

1.8. Overdue Payments. CONTRACTOR may charge interest of 1.5% per month on all undisputed payments not received by CONTRACTOR in accordance with this Exhibit F subsection

1.5. If an undisputed amount is past due more than 30 days, without limiting CONTRACTOR’s termination rights under this Agreement, CONTRACTOR will have the right, but not the obligation, to suspend performance under the affected Task Order until CONTRACTOR has received all undisputed overdue amounts owed under the Task Order, regardless of whether CUSTOMER has satisfied payment of Customer’s Share of the amounts owed under the Task Order.

DocuSign Envelope ID: 729B6031-DDB7-49F9-A1A5-20BF85A6F099

Page 188 of 438 ends

2/20/2024 24 Contract Number: ______________

1.9. Costs and Fees. In addition to any other remedies available to CONTRACTOR at law or equity, CUSTOMER shall pay on demand all of CONTRACTOR’s reasonable attorney fees or expenses incurred by CONTRACTOR to collect any undisputed overdue payments.

DocuSign Envelope ID: 729B6031-DDB7-49F9-A1A5-20BF85A6F099

Page 189 of 438 ends

2/20/2024 25 Contract Number: ______________
Exhibit G: Procedures for Unauthorized Release of Covered Information SCOPE
CONTRACTOR hereby agrees to adhere to these Procedures for detecting and reporting the unauthorized release of Covered Information, including Protected Personal Information (“PPI”).

These Procedures apply to the following unauthorized release activities:

1. Unauthorized access

2. Unauthorized destruction

3. Unauthorized use

4. Unauthorized modification

5. Disclosure to third parties for Secondary Purposes (see below)

DEFINITIONS
Covered Entity – (1) any Community Choice Aggregator or Electrical Service Provider (when providing service to residential or small commercial customers), or any third party that provides services to a Community Choice Aggregator or Electrical Service Provider (when providing service to residential or small commercial customers) under contract, (2) any third party who accesses, collects, stores, uses or discloses covered information pursuant to an order of the Commission, unless specifically exempted, who obtains this information from an electrical corporation, a Community Choice Aggregator or an Electrical Service Provider (when providing service to residential or small commercial customers), or (3) any third party, when authorized by the customer, that accesses, collects, stores, uses, or discloses covered information relating to 11 or more customers who obtains this information from an electrical corporation, a Community Choice Aggregator or an Electrical Service Provider (when providing service to residential or small commercial customers).

Covered Information -- any usage information obtained through the use of the capabilities of Advanced Metering Infrastructure when associated with any information that can reasonably be used to identify an individual, family, household, residence, or non-residential customer, except that covered information does not include usage information from which identifying information has been removed such that an individual, family, household or residence, or non-residential customer cannot reasonably be identified or re-identified. Covered information, however, does not include information provided to the California Public Utilities Commission (the “Commission”) pursuant to its oversight responsibilities.

Primary Purposes – The “primary purposes” for the collection, storage, use, or disclosure of covered information, as outlined in Rule 1(c) of Attachment B, are to:

1. Provide or bill for electrical power or gas,

2. Provide for system, grid, or operational needs,

3. Provide services as required by state or federal law or as specifically authorized by an order of the Commission, or

4. Plan, implement, or evaluate demand response, energy management, or energy efficiency programs under contract with a Community Choice Aggregator or and Electrical Service Provider

DocuSign Envelope ID: 729B6031-DDB7-49F9-A1A5-20BF85A6F099

Page 190 of 438 ends

2/20/2024 26 Contract Number: ______________
(when providing service to residential or small commercial customers), under contract with the Commission, or as part of a Commission authorized program conducted by a governmental entity under the supervision of the Commission.

Secondary Purposes – “Secondary purpose” means any purpose that is not a primary purpose.

Non-Covered Entity – “Non-Covered Entity” means any entity not defined as a Covered Entity.

Responsible Parties -- CUSTOMER, CONTRACTOR, and any staff, employees, or sub consultants contracted by CUSTOMER or CONTRACTOR.

PROCEDURE
Detecting and Reporting of Unauthorized Releases

1. All Responsible Parties are required to protect Covered Information from unauthorized release activities as set forth above.

2. Any request by any non-Covered Entities, for access to Covered Information must be reviewed and approved by an CUSTOMER manager level employee to ensure no unauthorized or inadvertent release of Covered Information.

3. All authorized releases of Covered Information to Non-Covered Entities shall be logged and reported to CUSTOMER on a quarterly basis.

4. Any discovery of any unauthorized release of Covered Information must be reported to CUSTOMER within one week of detection.

Unauthorized Release Handling Procedure

1. The discovering Party after detecting, or discovery of, the unauthorized release of Covered Information must contact CUSTOMER’s Dir. of Finance and Administration (or another executive manager) immediately.

2. CONTRACTOR will quantify and validate the type and extent of unauthorized release and report that information to CUSTOMER’s Dir. of Finance and Administration in writing with sufficient detail for CUSTOMER to determine the extent and impact of the unauthorized release.

3. CONTRACTOR shall prepare a written annual report of all discoveries of unauthorized releases of Covered Information.

Review and Training

1. At least annually, CONTRACTOR will review these Procedures with its staff, employees, or sub consultants.

2. Any proposed changes to these Procedures shall be provided in writing to CUSTOMER’s Dir. of Finance and Administration for their consideration.

DocuSign Envelope ID: 729B6031-DDB7-49F9-A1A5-20BF85A6F099

Page 191 of 438 ends

2/20/2024 27 Contract Number: ______________
Exhibit H: Ownership; Title; License Grants

1. Services Title and Ownership. CUSTOMER agrees that CONTRACTOR will retain title to and be the legal and beneficial owner of the Services (which includes any CONTRACTOR-provided equipment) and all alterations, additions, or improvements made to the Services. CUSTOMER acknowledges and agrees that the Services will at all times retain the legal status of CONTRACTOR’s personal property.

The Services and any associated equipment involved with the Services are not CUSTOMER’s or any other Person’s real property or any fixture to real property. CUSTOMER acknowledges that it will in no event have any ownership or leasehold interest of any kind or nature in any portion of the Services, including, but not limited to, all technology and software components, and CUSTOMER disclaims all interest or ownership at any time. This section shall not apply to information supplied by CUSTOMER to CONTRACTOR under this Agreement or any work product produced by CONTRACTOR that uses or relies on CUSTOMER information which shall remain the exclusive property of CUSTOMER.

1.1. Intellectual Property Ownership. All Intellectual Property rights in the Services, including, but not limited to, copyrights, trademarks, patents, and trade secrets, including without limitation rights as to their design, functionality, and embedded or provided software or applications, are CONTRACTOR’s sole and exclusive property or, where applicable, the property of CONTRACTOR’s suppliers and Affiliates, and are protected by trade secrets, patent and copyright laws, and other laws protecting Intellectual Property. CONTRACTOR reserves all rights not expressly granted in an Integrated Services Agreement, including, without limitation, all rights to modifications and derivative works based on such property. An Integrated Services Agreement involves providing Services and limited right to use related and provided applications or software. It is not a sale of any Intellectual Property rights of such Services.

1.2. License to Services. CONTRACTOR grants to CUSTOMER and End Users a limited, personal, non-sublicensable, non-transferable, non-exclusive license to use CONTRACTOR’s Intellectual Property rights in the Services during the term of each Integrated Services Agreement to the extent it is necessary for, and for the sole purpose of, using the Services in compliance with their designed purpose. Except as provided in this Agreement or an Integrated Services Agreement, CUSTOMER and End Users shall not (i) copy, make available, provide access to, or distribute, license, or otherwise transfer, directly or indirectly, any Intellectual Property rights in the Services to any third party; (ii) decompile, disassemble, reverse-assemble, analyze, or otherwise examine such property, equipment, or software for reverse engineering; (iii) unless otherwise agreed to in writing, use any Services or the Intellectual Property rights to develop other products, devices, inventions, hardware, or software; (iv) use, test or analyze the Services for comparison or competitive testing or “benchmarking” (except for CUSTOMER’s confidential internal purposes) or publish, disclose or disseminate the results; or (v) remove, fail to maintain or obscure any proprietary notices on the Services.

1.3. Derivative Works Ownership. In connection with the Services and in accordance with one or more Task Orders, CONTRACTOR may create software or other content for use with Products, which software or content may be derivative of CONTRACTOR Intellectual Property (“Derivative Works”). CONTRACTOR will be the sole and exclusive owner of any Derivative Works, and upon its creation, any such Derivative Works will be CONTRACTOR Intellectual Property. Such Derivative Works will not be considered “work for hire.”

DocuSign Envelope ID: 729B6031-DDB7-49F9-A1A5-20BF85A6F099

Page 192 of 438 ends

2/20/2024 28 Contract Number: ______________

1.4. CUSTOMER Data License Grant. Except for the rights expressly granted to CONTRACTOR in this Agreement or a Task Order, CUSTOMER exclusively owns all interest in and to all CUSTOMER Data. During the Term of this Agreement and subject to Section 14.1 of the Agreement, CUSTOMER grants CONTRACTOR a royalty-free license to access, use, and allow CONTRACTOR’s Subcontractors to use such CUSTOMER Data as is necessary for CONTRACTOR to provide the Services and perform CONTRACTOR’s obligations in accordance with the terms of this Agreement . CONTRACTOR and its Subcontractors shall not use CUSTOMER data for any purpose other than to perform Services under this Agreement or any Task Order.

DocuSign Envelope ID: 729B6031-DDB7-49F9-A1A5-20BF85A6F099

Page 193 of 438 ends

2/20/2024 29 Contract Number: ______________
Exhibit I: Services Warranty

1. Services Warranty

1.1. Services Warranty. During the term of each Task Order, CONTRACTOR warrants that (i) the Services will be free from material defects in workmanship, material, and design; and (ii) CONTRACTOR shall perform or shall cause the performance of the Services in accordance with this Agreement and each Task Order.

1.2. Remedy Under Services Warranty. Following notice from CUSTOMER, or upon CONTRACTOR becoming aware of a defect covered by the Services Warranty and subject to subsection 1.3, CONTRACTOR shall, at its sole cost and expense and as commercially reasonable, take such action necessary and reasonably determined by CONTRACTOR, to cure such defect and to bring it to conformance with the Services Warranty.

1.3. Limitations of Services Warranty. CONTRACTOR will be excused under subsection 1.2 to the extent the defect or CONTRACTOR’s inability to perform the Services in accordance with the standards stated in subsection 1.1 is due to any of the following: (i) defects in, damage to, or destruction of any portion of the Customer Products, (ii) the inoperability of any equipment or services at a Site Location not caused by CONTRACTOR, (iii) CUSTOMER’s or End User’s breach of any provision of the Agreement including any act or omission, negligence, gross negligence, or willful misconduct, (iv) cancellation or termination of Manufacturers’ Warranties or Preventive Maintenance Plans, where such cancellation or termination adversely effects CONTRACTOR’s ability to perform the Services and such cancellation or termination is not due to an act or omission by CONTRACTOR, or (v) a Force Majeure event.

1.4. Services Warranties Restrictions. Services Warranties are not a warranty for Products; CONTRACTOR has no responsibility for any Manufacturers’ Warranties or any Preventive Maintenance Plans for Products not purchased from or through CONTRACTOR, including acts or omissions that may cause the cancellation or termination of such warranties or maintenance plans.

1.5. Disclaimer of Warranties. Subject to any limitations under Applicable Law, the limited warranties stated in this Agreement are expressly instead of and exclude all other express or implied warranties, including, but not limited to, warranties of merchantability and fitness for a particular purpose, use, or application, and all other obligations or liabilities on the part of CONTRACTOR.

Except as specified in these limited warranties or elsewhere in this Agreement or any associated Task Order, CONTRACTOR is providing Services “as is.”

DocuSign Envelope ID: 729B6031-DDB7-49F9-A1A5-20BF85A6F099

Page 194 of 438 ends

2/20/2024 30 Contract Number: ______________
Exhibit J: Definitions
Capitalized terms utilized in this Agreement, any associated Task Order amendment, addendum, or any other document attached to the listed documents by reference have the meaning where first used or defined in this Exhibit J. These terms will apply to the singular or plural forms, as the context may require.

For purposes of this Exhibit J, the term “Stem” shall refer to “CONTRACTOR” as defined in the Agreement and the term “Customer” shall refer to “CUSTOMER” as defined in the Agreement.

1. “Affiliate” means, when used regarding a specified Person, any Person that, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with the specified Person, where “control” and derivative terms mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ownership of more than 50% of voting securities, by contract, or otherwise.

2. “Applicable Law” means any law, statute, rule, regulation, ordinance, order, code, governmental approval, interpretation, judgment, decree, injunction, directive, or decision of any governmental authority having jurisdiction over the matter, Person, or property.

3. “Athena® PowerBidder ProTM” means Stem’s Software-as-a-Service application providing the capabilities set forth in Exhibit B (List of Services) of this Agreement.

4. “Business Day” means any day from 9:00 a.m. to 5:00 p.m. Pacific Prevailing Time, excluding Saturdays, Sundays, or days when commercial banks in San Francisco are required or authorized by Applicable Law to be closed.

5. “Business Hours” means the period during a Business Day between the applicable Time Zone hours of 8 a.m. to 5 p.m. relevant to the Market associated with bids.

6. “Confidential Information” means information relating to a Party’s business, including, without limitation, computer programs, software, technical drawings, algorithms, know-how, trade secrets, formulas, processes, ideas, inventions (whether patentable or not), designs, schematics and other technical, business, financial, Customer and Product information, data and development plans, of any nature and in any form, which to the extent previously, presently or subsequently disclosed to the other Party (provided such information was or is marked or designated in writing as “confidential,” “proprietary,” or any other similar term or designation or was or is disclosed in a manner that a reasonable person would have understood that such information is confidential and proprietary).

Confidential Information also includes Stem’s prices, quotes, discounts, proposals to Customer, Customer’s solar energy estimates, conceptual layouts, installation techniques, and proposals provided to Stem. Confidential Information does not include (i) information that was publicly available at the time of the disclosure, other than as a result of a disclosure in breach of this Agreement; (ii) information that becomes publicly available through no fault of the recipient after the time of the delivery; (iii) information that was rightfully in the possession of the recipient (without confidential or proprietary restriction) at the time of delivery or that becomes available to the recipient from a source not subject to any restriction against disclosing such information to the recipient; and (iv) information that the recipient independently developed without a violation of this Agreement.

DocuSign Envelope ID: 729B6031-DDB7-49F9-A1A5-20BF85A6F099

Page 195 of 438 ends

2/20/2024 31 Contract Number: ______________

7. “Contract Fees” has the meaning set forth in Section 8.2.

8. “Customer Data” means all information, data, materials, works, expressions, or other content, including any that are (i) uploaded, submitted, posted, transferred, transmitted, or otherwise provided or made available by or on behalf of Customer or any End User or related to any Customer Product for processing by or through the Services, or (ii) collected, downloaded, or otherwise received by Stem related to the Services for Customer, Customer Product or any End User through this Agreement or any Task Order or at the written request or instruction of Customer or such End User.

All output, copies, reproductions, improvements, modifications, adaptations, and translations of Customer Data are also Customer Data. To avoid doubt, Customer Data includes all data relating to End Users and any personally identifiable information.

9. “Customer’s Share” means the apportioned share of payment that Customer is responsible for paying as provided for in each applicable Task Order signed by the Parties.

10. “Customer Products” means the battery energy storage systems, (including inverters, inverter enclosures, battery enclosures, battery racking, thermal conditioning units, equipment to be housed within the enclosures, batteries at the module level, battery modules previously integrated into the rack level, or battery modules integrated into larger battery blocks or stack), and solar photovoltaic equipment, as defined by the applicable wholesale market operator, that is bid into the CAISO wholesale market by the Services and to which Services will be applied under this Agreement.

11. “Default Customer Data” means any Customer Data that is not Modified Customer Data.

12. “Default Mode” means any operation of Stem’s Services that is not Modified Mode.

13. "Disclosing Party”has the meaning set forth in Section 14.1.

14. “Effective Date” means the date this Agreement has been signed by the last Party, as indicated by the date associated with that Party’s signature.

15. “End User” means the Person under contract with Customer that may be utilizing the Services at a Site Location. Stem assumes no direct or indirect liability or obligation to any End User relating to this Agreement or any Integrated Services Agreement.

16. “Escalation Fee” means the percentage of the increase that applies to the fees as indicated in Exhibit E (Pricing Table).

17. “ESS” means battery energy storage systems, inverters, inverter enclosures, battery enclosures, battery racking, thermal conditioning units, equipment to be housed within the enclosures, batteries at the module level, battery modules previously integrated into the rack level, or battery modules integrated into larger battery blocks or stack.

18. “Force Majeure” means an unforeseeable event beyond a Party’s control and which, with the exercise of reasonable diligence, the affected Party is unable to prevent or overcome, including acts of God, fire, flood, riots, pandemics, strikes, governmental acts or actions, disasters, earthquakes, acts of terrorism, freight embargoes, and material shortages or the inability to obtain labor or materials

DocuSign Envelope ID: 729B6031-DDB7-49F9-A1A5-20BF85A6F099

Page 196 of 438 ends

2/20/2024 32 Contract Number: ______________
through its regular sources as caused by Force Majeure events. Such acts, events, or conditions listed above will only be deemed Force Majeure to the extent they (i) directly impact the Services performed under this Agreement and are beyond the reasonable control of the Party claiming a delay, (ii) are not the result of the willful misconduct or negligent act or omission of the Party asserting the delay (or any person over whom that Party has control), (iii) are not an act, event, condition, or the risk of consequence of which such Party has expressly assumed under this Agreement, and (iv) are not able to be cured, remedied, avoided, offset, or otherwise overcome by the prompt exercise of reasonable diligence by the Party (or any Person over which that Party has control). The obligation to make any payment due under this Agreement will only be excused by a Force Majeure event that solely impacts a Party’s ability to make payment.

19. “Go-Live Date” means the date when CUSTOMER’s Product under a Task Order is available for live operations within Athena® PowerBidder ProTM .

20. “Initial Go-Live Date” means the Go-Live Date of CUSTOMER’s first Product under Task Order 1.

21. “Intellectual Property” means copyrights, patents, trademarks, service marks, service names, trade names, domain names, together with all associated goodwill, registrations and applications for the purpose, technology rights and licenses, computer software (including any source or object codes or related documentation), trade secrets, franchises, know-how, inventions, and other Intellectual Property rights.

22. “Manufacturer” means the original equipment manufacturer of the Products or other items.

23. “Manufacturers’ Warranties” means Product warranty coverage provided by a Manufacturer. When applicable, a Task Order lists Manufacturers’ Warranties by the Manufacturer-specific descriptors, such as extended warranty, long-term services agreement (also referred to as LTSA and which may include preventive maintenance), or some other reference.

24. “Modified Customer Data” means any market or weather forecasts, bidding strategies, or individual bids provided by Customer as a replacement for the corresponding default forecasts, bidding strategies, or individual bids used by the Services.

25. “Modified Mode” means the operation of the Services as a result of Customer’s entry of Modified Customer Data.

26. “Person” means any individual, corporation, partnership, joint venture, trust, unincorporated organization, association, or governmental authority.

27. “Preventive Maintenance Plan” means the plan, as provided by a Manufacturer, that details the preventive maintenance to be provided by the Manufacturer for the Products.

28. “Prudent Industry Practices” means the practices, methods, specifications, and acts engaged in or approved by a significant portion of the energy optimization service industry operating in the United States that, at a particular time, in the exercise of reasonable judgment in light of the facts known or that reasonably should have been known at the time a decision was made, would have been expected to accomplish the desired result in a manner consistent with Applicable Law, reliability, safety, environmental protection, economy, and expedition.

DocuSign Envelope ID: 729B6031-DDB7-49F9-A1A5-20BF85A6F099

Page 197 of 438 ends

2/20/2024 33 Contract Number: ______________

29. “PV Equipment” means Customer’s solar photovoltaic equipment installed at the Site.

30. “Scheduled Unavailable Hours” means the total hours during which Athena PowerBidder is not available due to maintenance activity as scheduled by Stem and notified to Customer with seven days’ notice, not to exceed two hours per 30-day period.

31. “Service Fees” means the fees Stem charges to Customer for any Services provided (including:

Integration Services; and Professional Services), except for Subscription Fees.

32. “Services” means the services provided by Stem to Customer with respect to operation of the Products as set forth in a Task Order. “Service Year” means each 12-month period of the Services Order Term beginning on the Services Order Effective Date. Each subsequent Service Year begins on the anniversary of the prior Service Year.

33. “Services Warranty” means the warranties, as provided by Stem with regard to the Services.

34. “Site Location” means the actual area and the associated utility meter number, when applicable, within the project locations as identified in a Task Order, where the Products are or will be installed.

A Site Location may also be the address of the premises when the installation area is not yet determined.

35. “Subcontractor” means any Person other than Stem that provides Services.

36. “Subscription Fees” means the fees charged for Customer’s subscription to Athena® PowerBidder ProTM .

37. “Support Hours” means the period, 365 days per year excluding NERC holidays, between the applicable Time Zone hours of 8 a.m. to 5 p.m. relevant to the Market associated with bids.

38. “Task Order” means the individual and specific document excuted by both Parties and which details the Services, the associated prices and fees, and may provide additional terms and conditions. Upon entry by the Parties into any Task Order, the Integrated Services Agreement formed will be a standalone, separable instrument, incorporating the terms of this Agreement as they exist on the effective date of such Task Order.

39. “Taxes” means all federal, state, local, and foreign taxes, including, without limitation, sales, use, value-added, general excise tax, or ad valorem tax that apply to or are measured by a taxing or governmental agency or are imposed upon a Party with respect to the Services, or the value, presence in a taxing jurisdiction, or use of the Products. Taxes will not include income or similar taxes owed by Stem on revenue from the Products sale or any other product or service under this Agreement.

40. “Time Zone” means the following (i) CAISO local time zone is Pacific, ERCOT local time zone is Central, and ISO-NE local time zone is Eastern.

41. “Utility” means the entity identified in section 6 at the beginning of this Services Order.

DocuSign Envelope ID: 729B6031-DDB7-49F9-A1A5-20BF85A6F099

Page 198 of 438 ends

2/13/2024 1 Contract Number: ______________
TASK ORDER 1- 3CE
This Task Order 1-3CE is entered into by and between Stem US Operations, Inc. (“CONTRACTOR”) and Central Coast Community Energy (“CUSTOMER”) dated effective as of the Task Order Effective Date.

This Task Order is issued under and subject to the Services Agreement (“Agreement”) with an Effective Date of [__________] by and between the Parties. Capitalized terms used but not otherwise defined in this Task Order, will have the meaning given to them in this Order Form or if not defined herein, in the Agreement.

1. Project(s) Description.

Attribute Value
Opportunity Name «3CE – PowerBidder Pro Slate - CA»
Opportunity ID S-1223-42299 | System ID: S-0078020
Product Type «SAS (SW Only)»
AC or DC-Coupled «DC-Coupled»
Product Nameplate Capacity (kW) «80,250»
Product Nameplate Capacity (kWh) «321,000»
Wholesale Market «CAISO»
Battery OEM/Vendor «OEM/Vendor» TBD
Product Location Name «Slate»
Product Location Address Kings County, CA
Attribute Value
Opportunity Name «3CE – PowerBidder Pro RabbitBrush - CA» Opportunity ID S-1223-42300 | System ID: S-0078019
Product Type «SAS (SW Only)»
AC or DC-Coupled «DC-Coupled»
Product Nameplate Capacity (kW) «12,500»
Product Nameplate Capacity (kWh) «50,000»
Wholesale Market «CAISO»
Battery OEM/Vendor «OEM/Vendor» TBD
Product Location Name «RabbitBrush»
Product Location Address Kern County, CA
Attribute Value
02/20/2024
DocuSign Envelope ID: 31691AB2-74E9-4E90-8069-A782827DECCF

Page 199 of 438 ends

2/13/2024 2 Contract Number: ______________
Opportunity Name «3CE – PowerBidder Pro Victory Pass - CA» Opportunity ID S-0423-26038 | System ID: S-0063948
Product Type «SAS (SW Only)»
AC or DC-Coupled «DC-Coupled»
Product Nameplate Capacity (kW) «50,000»
Product Nameplate Capacity (kWh) «200,000»
Wholesale Market «CAISO»
Battery OEM/Vendor «OEM/Vendor» TBD
Product Location Name «Victory Pass»
Product Location Address Riverside County, CA

2. Services. Select all applicable Services applicable, as described in Exhibit B (List of Services) to the Agreement
 Customer Onboarding Services
 Product Onboarding Services
 Athena® PowerBidder ProTM Subscription Services
 Professional Services
 Advisory Services

3. Term. The term of this Task Order is from the Effective Date, as established by the date of the last Party to execute this Task Order and extends three years after the Go-Live Date for the Project described in Section 1, unless sooner terminated in accordance with the terms of the Agreement.

4. Pricing.

Service Fees for Customer Products that are jointly owned by CUSTOMER and SVCE are calculated using the following formulas:
• Integration Fees = (Customer Onboarding Fee) + ((Product Onboarding Fee)*(Customer’s Share)) • Subscription Fees = ((Tiered Capacity Price by Product kWh) +(Fixed Product Price))*(Customer’s Share) 3CE Slate
Service Customer’s Share Charges Frequency Total Project Price Customer Onboarding Services - $20,000 One Time* $20,000 Product Onboarding Services 42.1% $2,105 One Time* $2,105 Subscription Services 42.1% $57,898 Annually (3yr) $178,957 DocuSign Envelope ID: 31691AB2-74E9-4E90-8069-A782827DECCF

Page 200 of 438 ends

Matthew Tappin
President Asset Management Division
DocuSign Envelope ID: 31691AB2-74E9-4E90-8069-A782827DECCF 02-21-2024

Page 201 of 438 ends

Staff Report Item 5
TO: 3CE Operations Board of Directors
FROM: Robert M. Shaw, Chief Executive Officer
PREPARED BY: Juan Lopez, Director of Finance
SUBJECT: Receive Policy Board Accepted 3CE FY 2022-23 Audited Financial Statements DATE: March 13, 2024
RECOMMENDATION:

Receive Policy Board accepted 3CE FY 2022-23 Audited Financial Statements.

BACKGROUND:
3CE is responsible for the preparation and fair presentation of financial statements. The independent auditor performs tests to ensure the financial statements are free from material misstatement. The Finance Department worked diligently with its accounting vendor and the external auditors, Pisenti & Brinker, over the past few months to ensure a proper review of 3CE’s financial controls and financial statements. The FY 2022-23 Financial Statements consist of the following:
• Independent Auditors’ Report
• Management’s Discussion and Analysis
• Financial Statements, including:
 Statements of Net Position
 Revenues and Expenses and Changes in Net Position
 Statements of Cash Flows
 Notes to the Financial Statements
On February 21, 2024, the 3CE Audit and Finance Committee supported staff presenting the FY 2022-23 Audited Financial Statements to the Policy Board. On the same day, the Policy Board unanimously accepted the same.

Page 202 of 438 ends

DISCUSSION/ANALYSIS:

The Independent Auditors’ Report includes its opinion that 3CE’s FY 2022-23 Financial Statements present fairly, in all material respects, the financial position of 3CE as of September 30, 2023 and 2022, and the respective changes in financial position and cash. The Auditors’ Report contains what is generally regarded as an unqualified or “clean” audit opinion.

The auditor’s audit results letter states that they did not identify any internal control deficiencies that they consider a material weakness.

FY 2022-23 Financial Highlights
 The net position increased by $34.7 million, up from a $17.3 million increase in the prior year.

Cash, cash equivalents, and short-term investments grew by $71.5 million.  Operating revenues grew over $49.9 million, driven primarily by the rate adjustments to reflect the increased cost of energy.
 The cost of energy increased by approximately $32.1 million due to rising energy and resource adequacy costs and delays in new power projects resulting from interconnection delays, supply chain, and inflationary pressures.
 Operating expenses, excluding the cost of energy, increased year over year from $21.7 million in FY 2021-22 to $27.8 million in FY 2022-23, an increase of 28.3%.  Higher interest income from the increase in market interest rates stemming from rate hikes made by the Federal Reserve, resulting in $7.1 million in higher investment revenue than the prior year.  Cash was positively impacted by the increase in net position, higher accrued electricity costs, and lower energy market settlements and accounts receivable. Cash was negatively impacted by higher accrued revenue. Higher accrued revenue arose primarily from an increase in retail electricity rates. Higher accrued electricity costs resulted from higher electricity costs and delays in supplier invoicing for renewable energy. Security deposits from energy supplies increased as a result of delays with PPAs.
 The receipt and application of $1.5 million of California Arrearage Payment Program (CAPP) funds reduced eligible past-due accounts receivable.

FY 2022-23 Actuals Versus Budget
On May 10, 2023, the Operations Board received an update on the mid-year FY 2022-23 budget forecast.

The mid-year budget amendment sought to align expenditures and revenues resulting from external and internal factors, including higher energy costs and changes to electric generation rates.

Year-end actuals versus budget are favorable and speak to the value of the mid-year budget amendment.

Operating revenue was under budget by $3.4 million, a 0.8% variance. Investment revenue was $2.2

Page 203 of 438 ends

million over budget, thanks to higher-than-expected interest rates. The total revenue was $0.5 million under budget, a negligible variance supported by higher-than-estimated investment revenue. Operating expenditures were $17.7 million under budget, a 4.5% variance. Energy costs were $4.5 million under budget, a 1.1% variance. Non-energy operating costs were 33.1% under budget due to lower energy program current year expenditures, personnel, and administrative costs. Net income was $17.2 million over budget.

CONCLUSION:

For the year ending September 30, 2023, 3CE increased its net position and liquidity by $34.7 million and $71.5 million, respectively. These results and ongoing efforts by staff are strong indicators of 3CE’s sound financial health and positioned to serve its customers and deliver on its mission. A strong net position of $243.3 million supports 3CE’s newly adopted Financial Policies that established robust strategic reserves to sustain service delivery. Adequate reserves enable flexible financial planning to develop rate structures and future capital projects and deal with unforeseen emergencies. This report was presented to the Audit & Finance Committee and Policy Board on February 21, 2024.

FISCAL IMPACT:

There is no financial impact by receiving this report.

ATTACHMENT(S):

1. FY 2022-23 Audited Financial Statements

2. FY 2022-23 Supplemental Budgetary Schedule, Investment Summary, and Dashboard

Page 204 of 438 ends

Financial
Statements
Years Ended September 30, 2023 and 2022

INCLUDING REPORT OF INDEPENDENT AUDITORS

Page 205 of 438 ends

CENTRAL COAST COMMUNITY ENERGY
YEARS ENDED SEPTEMBER 30, 2023 AND 2022

TABLE OF CONTENTS
Independent Auditor’s Report ………………………………………………………................ 1 Management’s Discussion and Analysis ……………………………………………................ 3 Basic Financial Statements:

Statements of Net Position ……………………………………………………………. 10
Statements of Revenues, Expenses and Changes in Net Position ……………………. 11 Statements of Cash Flows …………………………………………………………….. 12
Notes to the Basic Financial Statements ……………………………………................ 14

Page 206 of 438 ends

SANTA ROSA  PETALUMA
RSM US Alliance member firms are separate and independent businesses and legal entities that are responsible for their own acts and omissions, and each are separate and independent from RSM US LLP. RSM US LLP is the U.S. member firm of RSM International, a global network of independent audit, tax, and consulting firms. Members of RSM US Alliance have access to RSM International resources through RSM US LLP but are not member firms of RSM International. 3562 Round Barn Circle, Suite 200
Santa Rosa, CA 95403
(707) 542-3343  Office
(707) 527-5608  Fax
pbllp.com
Independent Auditor's Report
To the Board of Directors
Central Coast Community Energy
Opinion
We have audited the accompanying financial statements of Central Coast Community Energy (3CE), as of and for the years ended September 30, 2023 and 2022, and the related notes to the financial statements, which collectively comprise 3CE’s basic financial statements as listed in the table of contents.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of 3CE as of September 30, 2023 and 2022, and the changes in financial position and cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinion
We conducted our audits in accordance with auditing standards generally accepted in the United States of America (GAAS). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audits of the Financial Statements section of our report. We are required to be independent of 3CE and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about 3CE’s ability to continue as a going concern within one year after the date that the financial statements are issued or available to be issued.

Auditor's Responsibilities for the Audits of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

Page 207 of 438 ends

Independent Auditor's Report (continued)
Auditor's Responsibilities for the Audits of the Financial Statements (continued) In performing an audit in accordance with GAAS, we:
• Exercise professional judgment and maintain professional skepticism throughout the audits. • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. • Obtain an understanding of internal control relevant to the audits in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of 3CE’s internal control. Accordingly, no such opinion is expressed. • Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
• Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about 3CE’s ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audits, significant audit findings, and certain internal control-related matters that we identified during the audits.

Required Supplementary Information
Accounting principles generally accepted in the United States of America require that management's discussion and analysis be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context.

We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Santa Rosa, California
February 13, 2024

Page 208 of 438 ends

Central Coast Community Energy (3CE) Operations BoardMarch 13, 2024

Central Coast Community Energy (3CE) Operations Board
March 13, 2024