36 Transmission Owner, Seller’s Affiliates, and/or third parties pursuant to which certain Interconnection Facilities, interconnection service and/or transmission service may be subject to joint ownership and/or shared maintenance and operation arrangements; provided that such Shared Facilities Agreements shall permit Seller to perform or satisfy, and shall not purport to limit, its obligations hereunder, including providing interconnection capacity for the Facility in an amount not less than the Storage Contract Quantity and not more than the Interconnection Capacity Limit.
ARTICLE 7
METERING
7.1 Metering. Seller shall obtain and maintain a CAISO Resource ID for the BESS Resource and the Thermal Resource, respectively. At Seller’s expense, Seller shall install and maintain all necessary Energy Meters and telemetry required by the CAISO to deliver the Product.
At Seller’s expense, Seller shall install and maintain the Gas Meter as required for the Thermal Resource to receive natural gas service from the Gas Distribution Utility.
7.2 Meter Verification. If Seller has reason to believe there may be an Energy Meter or a Gas Meter malfunction, or upon Buyer’s reasonable request, Seller shall test the Energy Meter or the Gas Meter. The tests shall be conducted by independent third parties qualified to conduct such tests. Buyer shall be notified seven (7) days in advance of such tests and have a right to be present during such tests. Meter accuracy shall be determined based on CAISO or Gas Distribution Utility standards, as appliable. If a meter is inaccurate it shall be promptly repaired or replaced at Seller’s expense. If the meter test was performed by Buyer’s request and the meter(s) provided to be accurate, Buyer shall reimburse Seller for the costs and expenses associated with the test.
7.3 Meter Adjustments. If a meter provided to be inaccurate, the procedures used by the CAISO or the Gas Distribution Utility, as applicable, shall be used to adjust payments due hereunder. If no such procedures are applicable, Seller shall, acting reasonably and in good faith, determine when the inaccuracy first became effective and calculate the resulting adjustments. If Seller cannot reasonably determine when the inaccuracy first occurred, it will be assumed to have occurred halfway between the previous test and the current test (not to exceed 6 months).
ARTICLE 8
INVOICING AND PAYMENT; CREDIT
8.1 Contract Price. The contract price (the “Contract Price”) shall be calculated monthly, in arrears (except as otherwise provided hereunder), as follows:
(a) The Thermal Reservation Payment; plus
(b) The Thermal RA Payment for the following Showing Month; plus (c) The Storage Reservation Payment; plus
(d) The Storage RA Payment for the following Showing Month; plus (e) Buyer’s Share of the product of (i) the Variable O&M Rate and (ii) the Dispatchable Energy delivered in the applicable month; plus
37 (f) Start-Up Payment; plus
(g) Buyer’s Share of all applicable monthly costs contemplated under Sections
3.7, 4.1(c), 4.6(b)(ii), and 4.7(a); plus
(h) Buyer’s Share of the costs incurred by Seller from the Gas Distribution Utility for receipt of any natural gas associated with Dispatchable Energy excluding any costs, charges or penalties incurred due to the Seller’s failure to perform its actions under this Agreement or Seller’s failure to comply with the tariffs, agreements or other requirements of the Gas Distribution Utility.
8.2 Statements and Invoicing. Commencing in the first month of the Delivery Term, Seller shall deliver an invoice to Buyer on or before the tenth (10th) day of each month. Each invoice shall, as applicable, (a) include records of metered data, including the amount of Charging Energy, Discharging Energy and Dispatchable Energy delivered to Buyer (if any), the Thermal Reservation Payment, the Storage Reservation Payment, the Thermal RA Payment for the following Showing Month, the Storage RA Payment for the following Showing Month, and the total Contract Price; (b) reflect any records, including invoices or settlement data from the CAISO, necessary to verify the accuracy of any amount; (c) reflect any CAISO costs and revenues passed through to Buyer; (d) include any natural gas costs or revenues passed through to Buyer pursuant to Section 4.6; and (e) be in a format and contain detail reasonably acceptable to Buyer, covering, except as otherwise provided under subsection (a) hereunder, the services provided in the preceding month determined in accordance with the applicable provisions of this Agreement.
Notwithstanding the foregoing, Seller’s initial invoice shall reflect solely the Thermal RA Payments associated with the Supply Plans for the delivery of the Thermal RA Contract Quantity submitted prior to the Thermal Start Date, as provided under Section 2.4(b). Each invoice shall be delivered by electronic mail in accordance with Exhibit G.
8.3 Payment. Buyer shall make payment to Seller for Product by wire transfer or ACH payment to the bank account designated by Seller in Exhibit G, which may be updated by Seller by Notice hereunder; provided, however, that changes to invoice, payment, wire transfer and other banking information in the Agreement must be made in writing and delivered via certified mail and shall include contact information for an authorized person who is available by telephone to verify the authenticity of such requested changes to the Agreement. Buyer shall pay undisputed invoice amounts within thirty (30) days after receipt of the invoice. If such due date falls on a weekend or legal holiday, such due date shall be the next Business Day. Payments made after the due date will be considered late and will bear interest on the unpaid balance. If the amount due is not paid on or before the due date or if any other payment that is due and owing from one Party to another is not paid on or before its applicable due date, a late payment charge shall be applied to the unpaid balance and shall be added to the next billing statement. Such late payment charge shall be calculated based on the 3-Month prime rate (or any equivalent successor rate accepted by a majority of major financial institutions) published on the date of the invoice in The Wall Street Journal (or, if The Wall Street Journal is not published on that day, the next succeeding date of publication), plus two percent (2%) (the “Interest Rate”). If the due date occurs on a day that is not a Business Day, the late payment charge shall begin to accrue on the next succeeding Business Day.
38 8.4 Books and Records. To facilitate payment and verification, each Party shall maintain all books and records necessary for billing and payments, including copies of all invoices under this Agreement, for a period of at least five (5) years or as otherwise required by Law. Upon five (5) Business Days’ Notice to the other Party, either Party shall be granted access to the accounting books and records within the possession or control of the other Party pertaining to all invoices generated pursuant to this Agreement.
8.5 Invoice Adjustments. Invoice adjustments shall be made if (a) there have been good faith inaccuracies in invoicing or payment that are not otherwise disputed under Section 8.6, (b) an adjustment to an amount previously invoiced or paid is required due to a correction of data by the CAISO, or pursuant to a Storage Capacity Test, or (c) there have been meter inaccuracies; provided, however, that there shall be no adjustments to prior invoices based upon meter inaccuracies except to the extent that such meter adjustments are accepted by CAISO for revenue purposes. If the required adjustment is in favor of Buyer, Buyer’s next monthly payment shall be credited in an amount equal to the adjustment. If the required adjustment is in favor of Seller, Seller shall add the adjustment amount to Buyer’s next monthly invoice. Adjustments in favor of either Buyer or Seller shall bear interest, until settled in full, in accordance with Section 8.3, accruing from the date on which the adjusted amount should have been due. Unless otherwise agreed by the Parties, no adjustment of invoices shall be permitted after twelve (12) months from the date of the invoice.
8.6 Billing Disputes. 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. 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 five (5) Business Days of such resolution along with interest accrued at the Interest Rate from and including the original due date to but excluding the date paid. Inadvertent overpayments shall be returned via adjustments in accordance with Section 8.5. Any dispute with respect to an invoice is waived if the other Party is not notified in accordance with this Section 8.6 within twelve (12) months after the invoice is rendered or subsequently adjusted, except to the extent any misinformation was from a third party not affiliated with any Party and such third party corrects its information after the twelve-month period. If an invoice is not rendered within twelve (12) months after the close of the month during which performance occurred, the right to payment for such performance is waived.
8.7 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 through netting, in which case all amounts owed by each Party to the other Party for the purchase and sale of Product during the monthly billing period under this Agreement or otherwise arising out of this Agreement, including, without limitation, liquidated damage payments under Exhibit B, CAISO costs and revenues calculated pursuant to Exhibit N, interest, payments, and credits shall be netted so that only the excess amount remaining due shall be paid by the Party who owes it.
39 8.8 Payment Security.
(a) Seller’s Development Security. To secure its obligations under this Agreement, Seller shall deliver the Development Security to Buyer within thirty (30) days after the Effective Date. Seller shall maintain the Development Security in full force and effect. Upon the earlier of (i) Seller’s delivery of the Performance Security, or (ii) sixty (60) days after termination of this Agreement, Buyer shall return the Development Security to Seller, less the amounts drawn in accordance with this Agreement. If the Development Security is a Letter of Credit and the issuer of such Letter of Credit (x) fails to maintain the minimum Credit Rating specified in the definition of Letter of Credit, (y) indicates its intent not to renew such Letter of Credit and such Letter of Credit expires prior to the Commercial Operation Date, or (z) fails to honor Buyer’s properly documented request to draw on such Letter of Credit by such issuer, Seller shall have ten (10) Business Days to either post cash or deliver a substitute Letter of Credit that meets the requirements set forth in the definition of Development Security. (b) Seller’s Performance Security. To secure its obligations under this Agreement, Seller shall deliver Performance Security to Buyer on or before the Commercial Operation Date. Seller shall maintain the Performance Security in full force and effect, and Seller shall within ten (10) Business Days after any draw thereon replenish the Performance Security in the event Buyer collects or draws down any portion of the Performance Security for any reason permitted under this Agreement, until the following have occurred: (A) the Delivery Term has expired or terminated early; and (B) all payment obligations of the Seller then due and payable under this Agreement, including compensation for penalties, Termination Payment, indemnification payments or other damages are paid in full (whether directly or indirectly such as through set-off or netting). Following the occurrence of both events, Buyer shall promptly return to Seller the unused portion of the Performance Security. If the Performance Security is a Letter of Credit and the issuer of such Letter of Credit (i) fails to maintain the minimum Credit Rating set forth in the definition of Letter of Credit, (ii) indicates its intent not to renew such Letter of Credit and such Letter of Credit expires prior to the Commercial Operation Date, or (iii) fails to honor Buyer’s properly documented request to draw on such Letter of Credit by such issuer, Seller shall have ten (10) Business Days to either post cash or deliver a substitute Letter of Credit that meets the requirements set forth in the definition of Performance Security. (c) First Priority Security Interest in Cash or Cash Equivalent Collateral. To secure its obligations under this Agreement, and until released as provided herein, Seller hereby grants to Buyer a present and continuing first-priority security interest in, and lien on (and right to net against), and assignment of the Development Security and Performance Security to the extent provided in the form of cash, and any other cash collateral and cash equivalent collateral posted pursuant to Section 8.8 and any and all interest thereon or proceeds resulting therefrom or from the liquidation thereof, whether now or hereafter held by, on behalf of, or for the benefit of Buyer, and Seller agrees to take all action as Buyer reasonably requires in order to perfect Buyer’s security interest granted under this Section 8.8(c) in, and lien on (and right to net against), such collateral and any and all proceeds resulting therefrom or from the liquidation thereof.
8.9 Use of Financial Security. Upon or any time after the occurrence of an Event of Default caused by Seller, an Early Termination Date resulting from an Event of Default caused by Seller, or an occasion provided for in this Agreement where Buyer is authorized to retain all or a
40 portion of the Financial Security provided by Seller, Buyer may do any one or more of the following (in each case subject to the final sentence of this Section 8.9):
(a) Exercise any of its rights and remedies with respect to the Financial Security, including any such rights and remedies under Law then in effect; (b) Draw on any outstanding Letter of Credit issued for its benefit and retain any cash held by Buyer as Financial Security; and
(c) Liquidate the applicable Financial Security then held by or for the benefit of Buyer free from any claim or right of any nature whatsoever of Seller, including any equity or right of purchase or redemption by Seller.
Buyer shall apply the proceeds of the collateral realized upon the exercise of any such rights or remedies to reduce the Seller’s obligations under this Agreement and Seller shall remain liable for any amounts owing to Buyer after such application, subject to Buyer’s obligation to return any surplus proceeds remaining after these obligations are satisfied in full.
ARTICLE 9
NOTICES
9.1 Addresses for the Delivery of Notices. Any Notice required, permitted, or contemplated hereunder shall be in writing, shall be addressed to the Party to be notified at the address set forth on Exhibit G or at such other address or addresses as a Party may designate for itself from time to time by Notice hereunder.
9.2 Acceptable Means of Delivering Notice. Each Notice required, permitted, or contemplated hereunder shall be deemed to have been validly served, given or delivered if sent by electronic mail at the time indicated by the time stamp upon delivery, except that if received after 5 p.m. Pacific Prevailing Time, it shall be deemed received on the next Business Day.
Notwithstanding the foregoing, Notices of outages or other scheduling or dispatch information or requests, may be sent by electronic mail, or any other mutually acceptable form of electronic communication, and shall be considered delivered upon successful completion of such transmission (or, in the case of electronic mail, if no notice of delivery failure is received). Notices of claimed breach of this Agreement or an Event of Default must concurrently be sent by hand delivery or overnight carrier with delivery fees either prepaid or an arrangement with such carrier made for the payment of such fees.
ARTICLE 10
FORCE MAJEURE
10.1 Definition.
(a) “Force Majeure Event” means any act or event that delays or prevents a Party from timely performing all or a portion of its obligations under this Agreement or from complying with all or a portion of the conditions under this Agreement if such act or event, despite the exercise of reasonable efforts, cannot be avoided by and is beyond the reasonable control
41 (whether direct or indirect) of and without the fault or negligence of the Party relying thereon as justification for such delay, nonperformance, or noncompliance. (b) Without limiting the generality of the foregoing, so long as the following events, despite the exercise of reasonable efforts, cannot be avoided by, and are beyond the reasonable control (whether direct or indirect) of and without the fault or negligence of the Party relying thereon as justification for such delay, nonperformance or noncompliance, a Force Majeure Event may include an act of God or the elements, such as flooding, lightning, hurricanes, tornadoes, or ice storms; explosion; fire; volcanic eruption; flood; landslide; mudslide; sabotage; terrorism; earthquake; or other cataclysmic events; an act of public enemy; war; blockade; civil insurrection; riot; civil disturbance; epidemic; pandemic; or strikes or other labor difficulties caused or suffered by a Party or any third party except as set forth below. (c) Notwithstanding the foregoing, the term “Force Majeure Event” does not include (i) economic conditions that render a Party’s performance of this Agreement at the Contract Price unprofitable or otherwise uneconomic (including an increase in component costs for any reason, including foreign or domestic tariffs, Buyer’s ability to buy storage capacity at a lower price, or Seller’s ability to sell the Product, or any component thereof, at a higher price, than under this Agreement); (ii) Seller’s inability to obtain permits or approvals of any type for the construction, operation, or maintenance of the Facility, except to the extent such inability is caused by a Force Majeure Event; (iii) the inability of a Party to make payments when due under this Agreement, unless the cause of such inability is an event that would otherwise constitute a Force Majeure Event as described above; (iv) Seller’s inability to obtain sufficient labor, equipment, materials, or other resources to build or operate the Facility except to the extent such inability is caused by a Force Majeure Event; or (v) any equipment failure except if such equipment failure is caused by a Force Majeure Event.
10.2 Termination Following Force Majeure Event. If a Force Majeure Event has occurred after the Commercial Operation Date that has caused either Party to be wholly or partially unable to perform its obligations hereunder, and the impacted Party has claimed and received relief from performance of its obligations for a consecutive twelve (12) month period, then the non-claiming Party may terminate this Agreement upon Notice to the other Party. In addition, if a Force Majeure Event causes the Facility to be materially damaged such that returning the Facility to the full operational status that existing prior to the Force Majeure Event is reasonably expected to take more than twelve (12) months, Seller may terminate this Agreement upon Notice to Buyer.
Upon any such termination, neither Party shall have any liability to the other Party, save and except for those obligations specified in Section 2.1(b). Notwithstanding the foregoing, the occurrence and continuation of a Force Majeure Event shall not (a) suspend or excuse the obligation of a Party to make any payments due hereunder, (b) suspend or excuse the obligation of Seller to achieve the Guaranteed Commercial Operation Date beyond the extensions provided in Exhibit B, or (c) limit Buyer’s right to declare an Event of Default pursuant to Section 11.1(b)(i) or (ii) and receive a Damage Payment upon exercise of Buyer’s default right pursuant to Section 11.2.
10.3 Notice for Force Majeure. Within two (2) Business Days of the Party becoming aware of that a Force Majeure Event will impact the Party’s performance under this Agreement, the claiming Party shall provide the other Party with oral notice of the Force Majeure Event, and within two (2) weeks thereafter the claiming Party shall provide the other Party with Notice in the
42 form of a letter describing in detail the occurrence giving rise to the Force Majeure Event, including the nature, cause, estimated date of commencement thereof, and the anticipated extent of any delay or interruption in performance. Failure to provide timely Notice shall not constitute a waiver of the Force Majeure Event, but the relief granted shall be based on the date Notice is provided rather than the date of the Force Majeure Event. Upon written request from the other Party, the claiming Party shall provide documentation demonstrating to other Party’s reasonable satisfaction that each day of the claimed delay was the result of a Force Majeure Event and did not result from the claiming Party’s actions or failure to exercise due diligence or take reasonable actions. The claiming party shall promptly notify the other Party in writing of the cessation or termination of such Force Majeure Event, all as known or estimated in good faith by the affected Party. The suspension of performance due to a claim of a Force Majeure Event must be of no greater scope and of no longer duration than is required by the Force Majeure Event.
ARTICLE 11
DEFAULTS; REMEDIES; TERMINATION
11.1 Events of Default. An “Event of Default” shall mean, (a) with respect to a Party (the “Defaulting Party”) that is subject to the Event of Default the occurrence of any of the following:
(i) the failure by such Party to make, when due, any payment required pursuant to this Agreement and such failure is not remedied within ten (10) Business Days after Notice thereof;
(ii) 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, and such default is not remedied within thirty (30) days after Notice thereof; (iii) the failure by such Party to perform any material covenant or obligation set forth in this Agreement (except to the extent constituting a separate Event of Default set forth in this Section 11.1) and such failure is not remedied within thirty (30) days after Notice thereof;
(iv) such Party becomes Bankrupt;
(v) such Party assigns this Agreement or any of its rights hereunder other than in compliance with Section 14.2 or 14.3, as appropriate; or (vi) 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. (b) with respect to Seller as the Defaulting Party, the occurrence of any of the following:
43 (i) the failure by Seller to achieve Commercial Operation by the (ii) Seller sells, assigns, or otherwise transfers, or commits to sell, assign, or otherwise transfer, the Product, or any portion thereof, during the Delivery Term to any party other than Buyer except as expressly permitted under this Agreement; (iii) except to the extent excused by an Excused Event, if Seller fails to maintain an average Storage Capacity equal to
; or
(iv) failure by Seller to provide and maintain Financial Security pursuant to Section 8.8 after Notice and expiration of the cure periods set forth therein, including the failure to replenish amounts in accordance with this Agreement.
11.2 Remedies; Declaration of Early Termination Date. If an Event of Default with respect to a Defaulting Party shall have occurred and be continuing, the other Party (“Non-Defaulting Party”) shall have the following rights:
(a) to send Notice, designating a day, no earlier than the day such Notice is deemed to be received and no later than twenty (20) days after such Notice is deemed to be received, as an early termination date of this Agreement (“Early Termination Date”) that terminates this Agreement (the “Terminated Transaction”) and ends the Delivery Term effective as of the Early Termination Date;
(b) to accelerate all amounts owing between the Parties, and to collect as liquidated damages (i) the Damage Payment (in the case of an Event of Default by Seller occurring before the Commercial Operation Date, including an Event of Default under Section 11.1(b)(i)), or (ii) the Termination Payment calculated in accordance with Section 11.3 below (in the case of any other Event of Default by either Party);
(c) to withhold any payments due to the Defaulting Party under this Agreement; (d) to suspend performance; or
(e) to exercise any other right or remedy available at law or in equity, including specific performance or injunctive relief, except to the extent such remedies are expressly limited under this Agreement;
provided, that payment by the Defaulting Party of the Damage Payment or Termination Payment, as applicable, shall constitute liquidated damages and the Non-Defaulting Party’s sole and exclusive monetary remedy for any termination of this Agreement and the Event of Default related thereto.
11.3 Termination Payment. The Termination Payment (“Termination Payment”) for the Terminated Transaction owed pursuant to Section 11.2 (b)(ii) shall be the aggregate of the Settlement Amount plus any or all other amounts due to or from the Non-Defaulting Party (as of the Early Termination Date) netted into a single amount. The Non-Defaulting Party shall calculate,
44 in a commercially reasonable manner, a Settlement Amount for the Terminated Transaction as of the Early Termination Date. Third parties supplying information for purposes of the calculation of Gains or Losses may include, without limitation, dealers in the relevant markets, end-users of the relevant product, information vendors and other sources of market information. The Settlement Amount shall not include consequential, incidental, punitive, exemplary, indirect or business interruption damages. Without prejudice to the Non-Defaulting Party’s duty to mitigate, the Non-Defaulting Party shall not have to enter into replacement transactions to establish a Settlement Amount. Each Party agrees and acknowledges that (a) the actual damages that the Non-Defaulting Party would incur in connection with the Terminated Transaction would be difficult or impossible to predict with certainty, (b) the Damage Payment or Termination Payment described in Section
11.2 or this Section 11.3 (as applicable) is a reasonable and appropriate approximation of such damages, and (c) the Damage Payment or Termination Payment described in Section 11.2 or this Section 11.3 (as applicable) is the exclusive remedy of the Non-Defaulting Party in connection with the Terminated Transaction but shall not otherwise act to limit any of the Non-Defaulting Party’s rights or remedies if the Non-Defaulting Party does not elect a Terminated Transaction as its remedy for an Event of Default by the Defaulting Party.
11.4 Notice of Payment of Termination Payment. As soon as practicable after termination of this Agreement, Notice shall be given by the Non-Defaulting Party to the Defaulting Party of the amount of the Damage Payment or Termination Payment, as applicable, and whether the Termination Payment is due to or from the Non-Defaulting Party. The Notice shall include a written statement explaining in reasonable detail the calculation of such amount and the sources for such calculation. The Termination Payment shall be made to or from the Non-Defaulting Party, as applicable, within ten (10) Business Days after such Notice is effective.
11.5 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 five (5) Business Days of receipt of the 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. Disputes regarding the Termination Payment shall be determined in accordance with Article 15.
11.6 Rights And Remedies Are Cumulative. Except where an express and exclusive remedy or measure of damages is provided, the rights and remedies of a Party pursuant to this Article 11 shall be cumulative and in addition to the rights of the Parties otherwise provided in this Agreement.
ARTICLE 12
LIMITATION OF LIABILITY AND EXCLUSION OF WARRANTIES.
12.1 No Consequential Damages. EXCEPT TO THE EXTENT PART OF AN
EXPRESS REMEDY OR MEASURE OF DAMAGES HEREIN, OR PART OF AN ARTICLE 16 INDEMNITY CLAIM, OR INCLUDED IN A LIQUIDATED DAMAGES CALCULATION,
OR ARISING FROM FRAUD OR INTENTIONAL MISREPRESENTATION, NEITHER
PARTY SHALL BE LIABLE TO THE OTHER OR ITS INDEMNIFIED PERSONS FOR ANY
SPECIAL, PUNITIVE, EXEMPLARY, INDIRECT, OR CONSEQUENTIAL DAMAGES, OR
LOSSES OR DAMAGES FOR LOST REVENUE OR LOST PROFITS, WHETHER
45 FORESEEABLE OR NOT, ARISING OUT OF, OR IN CONNECTION WITH THIS AGREEMENT.
12.2 Waiver and Exclusion of Other Damages. EXCEPT AS EXPRESSLY 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. ALL LIMITATIONS OF LIABILITY CONTAINED IN
THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, THOSE PERTAINING TO SELLER’S LIMITATION OF LIABILITY AND THE PARTIES’ WAIVER OF
CONSEQUENTIAL DAMAGES, SHALL APPLY EVEN IF THE REMEDIES FOR BREACH OF WARRANTY PROVIDED IN THIS AGREEMENT ARE DEEMED TO “FAIL OF THEIR ESSENTIAL PURPOSE” OR ARE OTHERWISE HELD TO BE INVALID OR UNENFORCEABLE.
FOR BREACH OF ANY PROVISION FOR WHICH AN EXPRESS AND EXCLUSIVE
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.
TO THE EXTENT ANY DAMAGES REQUIRED TO BE PAID HEREUNDER ARE
LIQUIDATED, THE PARTIES ACKNOWLEDGE THAT THE DAMAGES ARE DIFFICULT
OR IMPOSSIBLE TO DETERMINE, THAT OTHERWISE OBTAINING AN ADEQUATE
REMEDY IS INCONVENIENT, AND THAT THE LIQUIDATED DAMAGES CONSTITUTE A REASONABLE APPROXIMATION OF THE ANTICIPATED HARM OR LOSS. 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. THE PARTIES HEREBY WAIVE ANY RIGHT TO CONTEST SUCH PAYMENTS AS AN UNREASONABLE PENALTY.
THE PARTIES ACKNOWLEDGE AND AGREE THAT MONEY DAMAGES AND THE
EXPRESS REMEDIES PROVIDED FOR HEREIN ARE AN ADEQUATE REMEDY FOR THE
BREACH BY THE OTHER OF THE TERMS OF THIS AGREEMENT, AND EACH PARTY
WAIVES ANY RIGHT IT MAY HAVE TO SPECIFIC PERFORMANCE WITH RESPECT TO ANY OBLIGATION OF THE OTHER PARTY UNDER THIS AGREEMENT.
ARTICLE 13
REPRESENTATIONS AND WARRANTIES; AUTHORITY
13.1 Seller’s Representations and Warranties. As of the Effective Date, Seller represents and warrants as follows:
(a) Seller is a limited liability company, duly organized, validly existing and
46 in good standing under the laws of the jurisdiction of its formation and is qualified to conduct business in the state of California and each jurisdiction where the failure to so qualify would have a material adverse effect on the business or financial condition of Seller. (b) Seller has the power and authority to enter into and perform this Agreement and is not prohibited from entering into this Agreement or discharging and performing all covenants and obligations on its part to be performed under and pursuant to this Agreement. The execution, delivery and performance of this Agreement by Seller has been duly authorized by all necessary limited liability company action on the part of Seller and does not and will not require the consent of any trustee or holder of any indebtedness or other obligation of Seller or any other party to any other agreement with Seller.
(c) The execution and delivery of this Agreement, consummation of the transactions contemplated herein, and fulfillment of and compliance by Seller with the provisions of this Agreement will not conflict with or constitute a breach of or a default under any Law presently in effect having applicability to Seller, subject to any permits that have not yet been obtained by Seller, the documents of formation of Seller or any outstanding trust indenture, deed of trust, mortgage, loan agreement or other evidence of indebtedness or any other agreement or instrument to which Seller is a party or by which any of its property is bound. (d) This Agreement has been duly executed and delivered by Seller. This Agreement is a legal, valid and binding obligation of Seller enforceable in accordance with its terms, except as limited by laws of general applicability limiting the enforcement of creditors’ rights or by the exercise of judicial discretion in accordance with general principles of equity. (e) Seller has, or will have prior to the Delivery Term, all necessary Governmental Approvals to perform its obligations hereunder.
13.2 Buyer’s Representations and Warranties. As of the Effective Date, Buyer represents and warrants as follows:
(a) Buyer is a joint powers authority, duly organized, validly existing and in good standing under the laws of California.
(b) Buyer has the power and authority to enter into and perform this Agreement and is not prohibited from entering into this Agreement or discharging and performing all covenants and obligations on its part to be performed under and pursuant to this Agreement, except where such failure does not have a material adverse effect on Buyer’s performance under this Agreement. The execution, delivery and performance of this Agreement by Buyer has been duly authorized by all necessary action on the part of Buyer and does not and will not require the consent of any trustee or holder of any indebtedness or other obligation of Buyer or any other party to any other agreement with Buyer.
(c) The execution and delivery of this Agreement, consummation of the transactions contemplated herein, and fulfillment of and compliance by Buyer with the provisions of this Agreement will not conflict with or constitute a breach of or a default under any Law presently in effect having applicability to Buyer, the documents of formation of Buyer or any outstanding trust indenture, deed of trust, mortgage, loan agreement or other evidence of
47 indebtedness or any other agreement or instrument to which Buyer is a party or by which any of its property is bound.
(d) This Agreement has been duly executed and delivered by Buyer. This Agreement is a legal, valid and binding obligation of Buyer enforceable in accordance with its terms, except as limited by laws of general applicability limiting the enforcement of creditors’ rights or by the exercise of judicial discretion in accordance with general principles of equity. (e) Buyer has, or will have prior to the Delivery Term, all necessary Governmental Approvals to perform its obligations hereunder.
13.3 General Covenants. Each Party covenants that commencing on the Effective Date and continuing throughout the Contract Term:
(a) It shall continue to be duly organized, validly existing and in good standing under the Laws of the jurisdiction of its formation and to be qualified to conduct business in California and each jurisdiction where the failure to so qualify would have a material adverse effect on its business or financial condition;
(b) It shall maintain (or obtain from time to time as required) all regulatory authorizations necessary for it to legally perform its obligations under this Agreement; and (c) It shall perform its obligations under this Agreement in compliance with all terms and conditions in its governing documents and in material compliance with any Law.
ARTICLE 14
ASSIGNMENT
14.1 General Prohibition on Assignments. Except as provided below, neither Party may voluntarily assign this Agreement or its rights or obligations under this Agreement without the prior written consent of the other Party, which consent shall not be unreasonably withheld, conditioned or delayed. Any purported assignment made without required written consent, or in violation of the conditions to assignment set out below, shall be null and void.
14.2 Collateral Assignment. Subject to the provisions of this Section 14.2, Seller has the right to assign this Agreement as collateral for any debt, tax equity or tax credit financing or refinancing of the Facility or portion thereof. In connection with any debt, tax equity or tax credit financing or refinancing of the Facility, upon request of Seller, Buyer shall in good faith work with Seller and Financing Party to agree upon a consent to collateral assignment of this Agreement (“Collateral Assignment Agreement”). The Collateral Assignment Agreement shall include the following provisions:
(a) Buyer shall give Notice of an Event of Default by Seller to the Person(s) to be specified by Financing Party in the Collateral Assignment Agreement, before exercising its right to terminate this Agreement as a result of such Event of Default; provided that such Notice shall be provided to Financing Party at the time such Notice is provided to Seller and the additional cure period of Financing Party agreed to in the Collateral Assignment Agreement shall not commence until Financing Party has received Notice of such Event of Default;
48 (b) Following an Event of Default by Seller under this Agreement, Buyer may require Seller or Financing Party to provide to Buyer a report concerning:
(i) The status of efforts by Seller or Financing Party to develop a plan to cure the Event of Default;
(ii) Impediments to the cure plan or its development;
(iii) If a cure plan has been adopted, the status of the cure plan’s implementation (including any modifications to the plan as well as the expected timeframe within which any cure is expected to be implemented);
(iv) Any other information which Buyer may reasonably require related to the development, implementation and timetable of the cure plan; and (v) Seller or Financing Party must provide the report to Buyer within ten (10) Business Days after Notice from Buyer requesting the report. Buyer will have no further right to require the report with respect to a particular Event of Default after that Event of Default has been cured;
(c) Financing Party will have the right to cure an Event of Default on behalf of Seller, only if Financing Party sends a Notice to Buyer before the later of (i) the expiration of any cure period, and (ii) fifteen (15) Business Days after Financing Party’s receipt of Notice of such Event of Default from Buyer, indicating Financing Party’s intention to cure. Financing Party must remedy or cure the Event of Default within the cure period under this Agreement and any additional cure periods agreed in the Collateral Assignment Agreement, which shall not exceed a maximum of one hundred twenty (120) days (or one hundred eighty (180) days in the event of a bankruptcy of Seller, or any foreclosure or similar proceeding if required by Financing Party to cure any Event of Default);
(d) Financing Party will have the right to consent before any termination of this Agreement which does not arise out of an Event of Default; (e) Financing Party will receive prior Notice of and the right to approve material amendments to this Agreement, which approval will not be unreasonably withheld, delayed or conditioned;
(f) If this Agreement is rejected in Seller’s bankruptcy or otherwise terminated in connection therewith Financing Party shall have the right to elect within one hundred eighty (180) days after such rejection or termination, to cause Buyer to enter into a replacement agreement with Financing Party or its designee having the same terms as this Agreement for the remaining term thereof, provided that such designee shall (i) meet the definition of Permitted Transferee and (ii) be an entity that Buyer is permitted to contract with under applicable Law; and (g) In addition, Buyer agrees to otherwise cooperate in a timely manner with the due diligence efforts of any such Financing Party and to deliver reasonable and customary estoppel certificates to the extent requested or required by a Financing Party in connection with a financing or tax equity financing.
49 14.3 Buyer Limited Assignment. Buyer shall have the right to make a limited assignment in connection with a municipal prepayment transaction to an entity (“Limited Assignee”) that has or provides a parent guaranty in form and substance reasonably acceptable to Seller from an entity with, an Investment Grade Credit Rating, of Buyer’s right to receive Product and Buyer’s obligation to make payments to the Seller. The limited assignment shall be expressly subject to the Limited Assignee’s timely payment of amounts due under this Agreement. Buyer shall pay Seller for any payments not timely made by the Limited Assignee, and Buyer shall remain obligated to perform all of its obligations under this Agreement notwithstanding the limited assignment. Any failure by the Limited Assignee to make payments to Seller when due hereunder shall be a Buyer Event of Default if not cured within the applicable cure period specified herein.
Subject to the foregoing, Buyer may make such assignment upon not less than thirty (30) days’ advance Notice by delivering to Seller a written request for Seller’s consent to such assignment, which request must include a proposed assignment agreement in form and substance reasonably acceptable to Seller. Provided that Buyer delivers a proposed assignment agreement complying with the previous sentence, Seller agrees to (i) comply with Limited Assignee’s reasonable requests for know-your-customer and similar account opening information and documentation with respect to Seller, including but not limited to information related to forecasted generation, credit rating, and compliance with anti-money laundering rules, the Dodd-Frank Act, the Commodity Exchange Act, the Patriot Act and similar rules, regulations, requirements and corresponding policies; and (ii) promptly execute such assignment agreement and implement such assignment as contemplated thereby, subject only to the countersignature of Limited Assignee and Buyer.
ARTICLE 15
DISPUTE RESOLUTION
15.1 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 California, without regard to principles of conflicts of Law. To the extent enforceable at such time, each Party waives its respective right to any jury trial with respect to any litigation arising under or in connection with this Agreement. The Parties agree that any suit, action or other legal proceeding by or against any Party (or its affiliates or designees) with respect to or arising out of this Agreement shall be brought in the federal courts of the United States or the courts of the State of California sitting in the County of Monterey, California.
15.2 Dispute Resolution. In the event of any dispute arising under this Agreement, within ten (10) days following the receipt of a 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, 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.
15.3 Arbitration. In the event of a dispute under Section 19.13, or upon the agreement of both Parties, any dispute, claim or controversy arising out of or relating to this Agreement or the breach, termination, enforcement, interpretation or validity thereof, shall be determined by final, non-appealable binding arbitration in San Francisco, California before three (3) arbitrators.
50 The arbitration shall be administered by Judicial Arbitration and Mediation Services, Inc. (“JAMS”) pursuant to its Comprehensive Arbitration Rules and Procedures. Within fifteen (15) days after the commencement of arbitration, each of Buyer and Seller shall select one person to act as arbitrator, and the two so-selected arbitrators shall select a third arbitrator (the “Chairperson”) within thirty (30) days of the commencement of the arbitration. If either Seller or Buyer is unable or fails to select one person to act as arbitrator, such arbitrator shall be appointed by JAMS. If the Seller and Buyer-selected arbitrators are unable or fail to agree upon a Chairperson, the Chairperson shall be appointed by JAMS. The chairperson shall be a person who has experience in renewable energy-related transactions, and none of the arbitrators shall have been previously employed by any Party or have any direct pecuniary interest in any Party or the subject matter of the arbitration, unless such conflict is expressly acknowledged and waived in writing by all of the Parties. The Parties shall maintain the confidential nature of the arbitration proceeding and any award, including any hearing(s), except as may be necessary to prepare for or conduct the arbitration hearing on the merits, or except as necessary in connection with a court application for a preliminary remedy, a judicial challenge to an award or its enforcement, or unless otherwise required by law or judicial decision. Any arbitration proceedings, decision or award rendered hereunder and the validity, effect and interpretation of this arbitration provision shall be governed by the Federal Arbitration Act. The arbitrator(s) shall have no authority to award consequential, treble, exemplary, or punitive damages of any type or kind regardless of whether such damages may be available under any law or right, with the Parties hereby affirmatively waiving their rights, if any, to recover or claim such damages. The responsibility for compensation and expenses of the three arbitrators and all other expenses charged by JAMS shall be equally split by Buyer and Seller. Notwithstanding the foregoing provisions of this Section 15.3, any costs incurred by a Party in seeking judicial enforcement of any written decision of the arbitrators shall be chargeable to and borne exclusively by the Party against whom such court order is obtained.
The award shall be final and binding on the Parties and judgment upon any award may be entered in any court of competent jurisdiction.
ARTICLE 16
INDEMNIFICATION
16.1 Indemnity. Each Party (the “Indemnifying Party”) agrees to defend, indemnify and hold harmless the other Party, its directors, officers, agents, attorneys, consultants, employees and representatives (the “Indemnified Party”) from and against all third party claims, demands, losses, liabilities, penalties, and expenses, including reasonable attorneys’ and expert witness fees (collectively, “Indemnifiable Loss(es)”) for (a) personal injury or death to Persons, (b) damage to the property of any third party, (c) any fines or penalties imposed by any Governmental Authority, and (d) the loss or failure to deliver Resource Adequacy Benefits or other Capacity Attributes in each of the cases of clauses (a) through (d) resulting from (i) Buyer’s failure to meet its obligations set forth in Section 4.7, or (ii) arising out of or relating to or in any way connected with the Indemnifying Party’s or its Affiliates’ breach of this Agreement, negligence or willful misconduct. Nothing in this Section 16.1 shall enlarge or relieve Seller or Buyer of any liability to the other for any breach of this Agreement. Neither Party shall be indemnified for its damages to the extent resulting from its negligence, intentional acts or willful misconduct. These indemnity provisions shall not be construed to relieve any insurer of its obligation to pay claims consistent with the provisions of a valid insurance policy.
51 16.2 Notice of Claim. Subject to the terms of this Agreement and upon obtaining knowledge of an Indemnifiable Loss for which it is entitled to indemnity under this Article 16, the Indemnified Party will promptly provide Notice to the Indemnifying Party in writing of any damage, claim, loss, liability or expense which the Indemnified Party has determined has given or could give rise to an Indemnifiable Loss under Section 16.1 (“Claim”). The Notice is referred to as a “Notice of Claim”. A Notice of Claim will specify, in reasonable detail, the facts known to the Indemnified Party regarding the Indemnifiable Loss.
16.3 Failure to Provide Notice. A failure to give timely Notice or to include any specified information in any Notice as provided in Section 16.2 will not affect the rights or obligations of the Indemnified Party except and only to the extent that, as a result of such failure, the Indemnifying Party was deprived of its right to recover any payment under its applicable insurance coverage or was otherwise materially damaged as a direct result of such failure.
16.4 Defense of Claims. If, within ten (10) days after giving a Notice of Claim regarding a Claim to the Indemnifying Party pursuant to Section 16.2, the Indemnified Party receives Notice from the Indemnifying Party that the Indemnifying Party has elected to assume the defense of such Claim, the Indemnifying Party will not be liable for any legal expenses subsequently incurred by the Indemnified Party in connection with the defense thereof; provided, however, that if the Indemnifying Party fails to take reasonable steps necessary to defend diligently such Claim within ten (10) days after receiving Notice from the Indemnified Party that the Indemnified Party believes the Indemnifying Party has failed to take such steps, or if the Indemnifying Party has not undertaken fully to indemnify the Indemnified Party in respect of all Indemnifiable Losses relating to the matter, the Indemnified Party may assume its own defense, and the Indemnifying Party will be liable for all reasonable costs or expenses, including attorneys’ fees, paid or incurred in connection therewith. Without the prior written consent of the Indemnified Party, the Indemnifying Party will not enter into any settlement of any Claim which would lead to liability or create any financial or other obligation on the part of the Indemnified Party for which the Indemnified Party is not entitled to indemnification hereunder; provided, however, that the Indemnifying Party may accept any settlement without the consent of the Indemnified Party if such settlement provides a full release to the Indemnified Party and no requirement that the Indemnified Party acknowledge fault or culpability. If a firm offer is made to settle a Claim without leading to liability or the creation of a financial or other obligation on the part of the Indemnified Party for which the Indemnified Party is not entitled to indemnification hereunder and the Indemnifying Party desires to accept and agrees to such offer, the Indemnifying Party will give Notice to the Indemnified Party to that effect. If the Indemnified Party fails to consent to such firm offer within ten (10) days after its receipt of such Notice, the Indemnified Party may continue to contest or defend such Claim and, in such event, the maximum liability of the Indemnifying Party to such Claim will be the amount of such settlement offer, plus reasonable costs and expenses paid or incurred by the Indemnified Party up to the date of such Notice.
16.5 Rights and Remedies are Cumulative. Except for express remedies already provided in this Agreement, the rights and remedies of a Party pursuant to this Article 16 are cumulative and in addition to the rights of the Parties otherwise provided in this Agreement.
52 ARTICLE 17
INSURANCE
17.1 Insurance.
(a) General Liability. Seller shall maintain, or cause to be maintained at its sole expense, (i) commercial general liability insurance, including products and completed operations and bodily injury insurance, in a minimum amount of per occurrence, and an annual aggregate of not less than included to provide contractual liability in said amount, specifically covering Seller’s obligations under this Agreement and including Buyer as an additional insured; and (ii) an umbrella/excess liability insurance policy in a minimum limit of liability of Defense costs shall be provided as an additional benefit and not included within the limits of liability. Such insurance shall contain standard cross-liability and severability of interest (or separation of insureds) provisions.
(b) Employer’s Liability Insurance. Employers’ Liability insurance shall not be less than for injury or death occurring as a result of each accident. With regard to bodily injury by disease, the policy limit will apply to each employee for
(c) Workers Compensation Insurance. Seller, if it has employees, shall also maintain at all times during the Contract Term workers’ compensation and employers’ liability insurance coverage in accordance with applicable requirements of California Law. (d) Business Auto Insurance. Seller shall maintain at all times during the Contract Term business auto insurance for bodily injury and property damage with limits of each accident. Such insurance shall cover liability arising out of Seller’s use of all owned (if any), non-owned and hired vehicles, including trailers or semi-trailers in the performance of the Agreement.
(e) Evidence of Insurance. Within sixty (60) days after execution of the Agreement and upon annual renewal thereafter, Seller shall deliver to Buyer certificates of insurance evidencing such coverage. These certificates shall specify that Buyer shall be given at least thirty (30) days prior Notice by Seller in the event of cancellation or termination of coverage except for ten (10) days for non-payment of premium. General liability insurance and business auto insurance shall be primary coverage without right of contribution from any insurance of Buyer. Any other insurance maintained by Seller is for the exclusive benefit of Seller and shall not in any manner inure to the benefit of Buyer.
ARTICLE 18
CONFIDENTIAL INFORMATION
18.1 Definition of Confidential Information. The following constitutes “Confidential Information,” whether oral or written which is delivered by Seller to Buyer or by Buyer to Seller including: (a) the terms and conditions of, and proposals and negotiations related to, this Agreement, and (b) information that either Seller or Buyer stamps or otherwise identifies as “confidential” or “proprietary” before disclosing it to the other. Confidential Information does not
53 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.
18.2 Duty to Maintain Confidentiality. Confidential Information will retain its character as Confidential Information but may be disclosed by the recipient (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. If the Receiving Party becomes legally compelled (by interrogatories, requests for information or documents, subpoenas, summons, civil investigative demands, or similar processes or otherwise in connection with any litigation or to comply with any Law, order, regulation, ruling, regulatory request, accounting disclosure rule or standard or any exchange, control area or independent system operator rule) to disclose any Confidential Information of the disclosing Party (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. The provisions of this Article 18 shall survive and shall continue to be binding upon the Parties for period of three (3) years following the date of termination of this Agreement. Each Party hereto acknowledges and agrees that information and documentation provided in connection with this Agreement may be subject to the California Public Records Act (Government Code Section 7920 et seq.).
18.3 Irreparable Injury; Remedies. Receiving Party acknowledges that its obligations under this ARTICLE 18 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 ARTICLE 18. 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, in law, in equity or otherwise, Disclosing Party will be entitled to seek injunctive relief against the threatened breach of this ARTICLE 18 or the continuation of any such breach, without the necessity of proving actual damages.
18.4 Disclosure to Financing Parties, Etc. Notwithstanding anything to the contrary in this Article 18, Confidential Information may be disclosed by Seller to any actual or potential Financing Party or any of its Affiliates, and Seller’s actual or potential agents, advisors, actual or potential investors, consultants, contractors, or trustees, so long as the Person (other than a Person that has an ethical duty to Seller) to whom Confidential Information is disclosed agrees in writing to be bound by confidentiality provisions no less stringent than those in this Article 18 (subject to customary survival terms), or is otherwise bound by a duty or obligation of confidentiality commensurate with the provisions provided in this ARTICLE 18.
54 18.5 Press Releases. Neither Party shall issue (or cause its Affiliates to issue) a press release regarding the transactions contemplated by this Agreement unless both Parties have agreed upon the contents of any such public statement. A Party’s consent shall not be unreasonably withheld, conditioned or delayed.
ARTICLE 19
MISCELLANEOUS
19.1 Entire Agreement; Integration; Exhibits. This Agreement, together with the Cover Sheet and Exhibits attached hereto constitutes the entire agreement and understanding between Seller and Buyer with respect to the subject matter hereof and supersedes all prior agreements relating to the subject matter hereof, which are of no further force or effect. The Exhibits attached hereto are integral parts hereof and are made a part of this Agreement by reference. The headings used herein are for convenience and reference purposes only. In the event of a conflict between the provisions of this Agreement and those of the Cover Sheet or any Exhibit, the provisions of first the Cover Sheet, and then this Agreement shall prevail, and such Exhibit shall be corrected accordingly.
19.2 Amendments. This Agreement may only be amended, modified or supplemented by an instrument in writing executed by duly authorized representatives of Seller and Buyer; provided, that, for the avoidance of doubt, this Agreement may not be amended by electronic mail communications.
19.3 No Waiver. Waiver by a Party of any default by the other Party shall not be construed as a waiver of any other default.
19.4 No Agency, Partnership, Joint Venture or Lease. Seller and the agents and employees of Seller shall, in the performance of this Agreement, act in an independent capacity and not as officers or employees or agents of Buyer. Under this Agreement, Seller and Buyer intend to act as energy seller and energy purchaser, respectively, and do not intend to be treated as, and shall not act as, partners in, co-venturers in or lessor/lessee with respect to the Facility or any business related to the Facility. This Agreement shall not impart any rights enforceable by any third party (other than a permitted successor or assignee bound to this Agreement) or, to the extent set forth herein, any Financing Party or Indemnified Party.
19.5 Severability. In the event that any provision of this Agreement is unenforceable or held to be unenforceable, the Parties agree that all other provisions of this Agreement have force and effect and shall not be affected thereby. The Parties shall, however, use their best endeavors to agree on the replacement of the void, illegal or unenforceable provision(s) with legally acceptable clauses which correspond as closely as possible to the sense and purpose of the affected provision and this Agreement as a whole.
19.6 Mobile-Sierra. Notwithstanding any other provision of this Agreement, neither Party shall seek, nor shall they support any third party seeking, to prospectively or retroactively revise the rates, terms or conditions of service of this Agreement through application or complaint to FERC pursuant to the provisions of Section 205, 206 or 306 of the Federal Power Act, or any other provisions of the Federal Power Act, absent prior written agreement of the Parties. Further, absent the prior written agreement in writing by both Parties, the standard of review for changes
55 to the rates, terms or conditions of service of this Agreement proposed by a Party shall be the “public interest” standard of review set forth in United Gas Pipe Line Co. v. Mobile Gas Service Corp., 350 U.S. 332 (1956) and Federal Power Commission v. Sierra Pacific Power Co., 350 U.S. 348 (1956). Changes proposed by a non-Party or FERC acting sua sponte shall be subject to the most stringent standard permissible under applicable Law.
19.7 Counterparts. This Agreement may be executed in one or more counterparts, all of which taken together shall constitute one and the same instrument and each of which shall be deemed an original.
19.8 Electronic Delivery. This Agreement may be duly executed and delivered by a Party by execution and electronic format (including portable document format (.pdf)) delivery of the signature page of a counterpart to the other Party, and, if delivery is made by electronic format, the executing Party shall promptly deliver, via overnight delivery, a complete original counterpart that it has executed to the other Party, but this Agreement shall be binding on and enforceable against the executing Party whether or not it delivers such original counterpart.
19.9 Binding Effect. This Agreement shall inure to the benefit of and be binding upon the Parties and their respective successors and permitted assigns.
19.10 No Recourse to Members of Buyer. Buyer is organized as a Joint Powers Authority in accordance with the Joint Exercise of Powers Act of the State of California (Government Code Section 6500, et seq.) pursuant to its Joint Powers Agreement and is a public entity separate from its constituent members. Buyer shall solely be responsible for all debts, obligations and liabilities accruing and arising out of this Agreement. Seller shall have no rights and shall not make any claims, take any actions or assert any remedies against any of Buyer’s constituent members, or advisors, contractors, consultants or employees of Buyer or Buyer’s constituent members, in connection with this Agreement.
19.11 Forward Contract. The Parties acknowledge and agree that this Agreement constitutes a “forward contract” within the meaning of the U.S. Bankruptcy Code, and Buyer and Seller are “forward contract merchants” within the meaning of the U.S. Bankruptcy Code. Each Party further agrees that, for all purposes of this Agreement, each Party waives and agrees not to assert the applicability of the provisions of 11 U.S.C. § 366 in any bankruptcy proceeding wherein such Party is a debtor. In any such proceeding, each Party further waives the right to assert that the other Party is a provider of last resort to the extent such term relates to 11 U.S.C. §366 or another provision of 11 U.S.C. § 101-1532.
19.12 Further Assurances. Seller agrees to use commercially reasonable efforts to cooperate with respect to any future changes to this Agreement needed to satisfy requirements of Governmental Authorities associated with changes in law to maximize benefits to Buyer, including: (i) modification of the description of Capacity Attributes as may be required, including updating the Agreement to reflect any mandatory contractual language required by Governmental Authorities; or (ii) submission of any reports, data, or other information required by Governmental Authorities; provided that Seller shall have no obligation to modify this Agreement, or take other actions not required under this Agreement, if such modifications or actions would materially adversely affect, or could reasonably be expected to have or result in a material adverse effect on, any of Seller's rights, benefits, risks and/or obligations under this Agreement. Each of the Parties
56 hereto agree to provide such information, execute and deliver any instruments and documents and to take such other actions as may be necessary or reasonably requested by the other Party which are not inconsistent with the provisions of this Agreement and which do not involve the assumptions of obligations other than those provided for in this Agreement, to give full effect to this Agreement and to carry out the intent of this Agreement.
19.13 Change in Electric Market Design. If a change in the CAISO Tariff renders this Agreement or any provisions hereof incapable of being performed or administered, then either Party may request that the other Party enter into negotiations to make the minimum changes to this Agreement necessary to make this Agreement capable of being performed and administered, while attempting to preserve to the maximum extent possible the benefits, burdens, and obligations set forth in this Agreement as of the Effective Date. Upon delivery of such a request, Buyer and Seller shall engage in such negotiations in good faith, provided, however that Seller shall have no obligation to agree to any amendment that results in an unreimbursed reduction of forecast revenue Seller expects to generate under this Agreement. If Buyer and Seller are unable, within sixty (60) days after delivery of such request, to agree upon changes to this Agreement or to resolve issues relating to changes to this Agreement, then any Party may submit issues pertaining to changes to this Agreement to the dispute resolution process set forth in Section 15.3. Notwithstanding the foregoing, (i) a change in cost shall not in and of itself be deemed to render this Agreement or any of the provisions hereof incapable of being performed or administered, and (ii) all of the unaffected provisions of this Agreement shall remain in full force and effect during any period of such negotiation or dispute resolution.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed as of the Effective Date.
MRP PACIFICA MARKETING III LLC,
a Delaware limited liability company
CENTRAL COAST COMMUNITY
ENERGY, a California joint powers
authority
By:
Name:
Title:
By:
Name:
Title:
By:
Name:
Title:
Approved as to form:
By:
Name:
Title:
Exhibit B - 1
EXHIBIT B
FACILITY COMMERCIAL OPERATION
1. Thermal Resource. The Thermal Resource is operational as of the Effective Date.
2. Commercial Operation of the BESS Resource. “Commercial Operation” means, with respect to the BESS Resource, the condition existing when (i) Seller has fulfilled all of the conditions precedent in Section 2.2 of the Agreement and provided Notice to Buyer substantially in the form of Exhibit L (the “COD Certificate”), (ii) Seller has notified Buyer in writing that it has provided the required documentation to Buyer and met the conditions for achieving Commercial Operation, and (iii) Buyer has acknowledged to Seller in writing that Commercial Operation has been achieved. The “Commercial Operation Date” shall be the later of (x) the Expected Commercial Operation Date or (y) the date in the COD Certificate on which Seller confirmed to Buyer that Commercial Operation was achieved.
a. Seller shall cause Commercial Operation for the BESS Resource to occur by (as such date may be extended by the Development Cure Period (defined below), the “Guaranteed Commercial Operation Date”). Seller shall notify Buyer that it intends to achieve Commercial Operation at least sixty (60) days before the anticipated Commercial Operation Date.
b. If Seller does not achieve Commercial Operation by the Guaranteed Commercial Operation Date, as it may be extended pursuant to the Development Cure Period, Seller shall pay COD Delay Damages to Buyer for each day after the Guaranteed Commercial Operation Date until the Commercial Operation Date, (the “COD Delay Period”).
c. If Commercial Operation is achieved during a month for which Seller has paid COD Delay Damages, Buyer shall repay to Seller the amount of COD Delay Damages paid to Buyer that are not owed by Seller for such month. Seller may include such amounts owed by Buyer in its invoices to Buyer hereunder. d. The Parties agree that Buyer’s receipt of COD Delay Damages shall be Buyer’s sole and exclusive remedy for Seller’s failure to achieve the Commercial Operation Date on or before the Guaranteed Commercial Operation Date, but shall (x) not be construed as Buyer’s declaration that an Event of Default has occurred under any provision of Section 11.1 and (y) not limit Buyer’s right to receive a Damage Payment upon exercise of Buyer’s default right pursuant to Section 11.2.
3. Extension of the Guaranteed Dates. The Guaranteed Commercial Operation Date shall, subject to Notice and documentation requirements set forth below, be automatically extended on a day-for-day basis (the “Development Cure Period”) for the duration of any and all delays arising out of the following circumstances:
a. a Force Majeure Event;
Exhibit B - 2
b. Interconnection Delays; and
c. Event of Default of Buyer.
Notwithstanding anything in this Agreement to the contrary, the cumulative extensions granted under the Development Cure Period,
4. Failure to Reach Storage Contract Capacity. If, at Commercial Operation, the Installed Capacity is less than one hundred percent (100%) of the Storage Contract Capacity, Seller shall have after the Commercial Operation Date to install additional capacity or Network Upgrades (as defined in the CAISO Tariff) such that the Installed Capacity is equal to (but not greater than) one hundred percent (100%) of the Storage Contract Capacity, and Seller shall provide to Buyer a new certificate substantially in the form attached as Exhibit M hereto specifying the new Installed Capacity. If Seller fails to construct the Storage Contract Capacity by such date, Seller shall pay capacity damages to Buyer, in an amount equal to
the Storage Contract Capacity exceeds the Installed Capacity, and the Storage Contract Capacity and other applicable portions of the Agreement, including the Storage Contract Capacity table in the Cover Sheet, shall be adjusted accordingly.
5. Commercial Operation Conditions: Commercial Operation of the BESS Resource shall occur once the following conditions are satisfied:
a. The BESS Resource is fully operational and interconnected, fully integrated and synchronized with the Transmission System.
b. Seller has installed equipment for the BESS Resource. c. Seller has commissioned all equipment in accordance with its respective manufacturer’s specifications.
d. Seller has demonstrated functionality of the BESS Resource’s communication systems and automatic generation control (AGC) interface to operate the BESS Resource as necessary to respond and follow instructions, including an electronic signal conveying real time and intra-day instructions, directed by the Buyer in accordance with the Agreement and/or the CAISO.
e. The BESS Resource is fully capable of charging, storing and discharging energy and receiving instructions to charge, store and discharge Energy, all within the operational constraints and subject to the applicable Operating Procedures. f. Authorization was received from the CAISO and the Participating Transmission
Exhibit B - 3
Owner to operate the BESS Resource is parallel with the Transmission System. g. The PTO has provided documentation supporting Commercial Operation. h. The CAISO has provided notification supporting Commercial Operation, in accordance with the CAISO Tariff.
Exhibit C - 1
EXHIBIT C
HEAT RATE AND EFFICIENCY GUARANTY
Thermal Resource Heat Rate Guaranty
Heat Rate Testing: The heat rate (“Heat Rate”) of the Thermal Resource shall be determined by performing thermal performance testing generally in accordance with the American Society of Mechanical Engineers’ Standard PTC 46 and Prudent Industry Practice. The Heat Rate will be first tested no later than thirty (30) days prior to the Thermal Start Date and thereafter, the Heat Rate will be tested annually upon Buyer’s request. In addition, Buyer shall have the right to require a test or retest of the Heat Rate at any time upon no less than ten (10) Business Days prior written Notice to Seller if Buyer reasonably believes that the current Heat Rate has varied materially from the results of the most recent Heat Rate test. All costs or revenues associated with any Heat Rate test shall be borne by, or accrue to, Buyer, as applicable.
Heat Rate Liquidated Damages: In the event the Heat Rate is higher than the Guaranteed Heat Rate, Seller will pay to Buyer, as liquidated damages and not a penalty, the sum of (a) and (b)
For each monthly period
after any Heat Rate test demonstrating a Heat Rate higher than the Guaranteed Heat Rate, Heat Rate liquidated damages shall be calculated and paid on a monthly basis, and shall be reflected as a credit on the monthly invoice in accordance with Section 8.7.
Liquidated Damages for Failure to Achieve Guaranteed Efficiency Rate If during any month during the Delivery Term, the Efficiency Rate for such month is less than the Guaranteed Efficiency Rate, Seller shall owe liquidated damages to Buyer, which damages shall be calculated by multiplying (i) the total Charging Energy for such month by (ii) the percentage amount by which the Efficiency Rate is less than the Guaranteed Efficiency Rate, by (iii)
Exhibit D - 1
EXHIBIT D
FORM OF LETTER OF CREDIT
[Issuing Bank Letterhead and Address]
IRREVOCABLE STANDBY LETTER OF CREDIT NO. [XXXXXXX]
Date:
Bank Ref.:
Amount: US$[XXXXXXXX]
Expiration Date:
Beneficiary:
Central Coast Community Energy
70 Garden Court, Suite 300
Monterey, CA 93940
Attn: Chief Financial Officer
Ladies and Gentlemen:
By the order of [________________] (“Applicant”), we, [insert bank name and address] (“Issuer”) hereby issue our Irrevocable Standby Letter of Credit No. [XXXXXXX] (the “Letter of Credit”) in favor of Central Coast Community Energy, a California joint powers authority (“Beneficiary”), for an amount not to exceed the aggregate sum of U.S. $[XXXXXX] (United States Dollars [XXXXX] and 00/100), pursuant to that certain Dispatchable Energy and Energy Storage Agreement dated as of ______ and as amended (the “Agreement”) between Applicant and Beneficiary. This Letter of Credit shall become effective immediately and shall expire on [Insert Date] which is one year after the issue date of this Letter of Credit, or any expiration date extended in accordance with the terms hereof (the “Expiration Date”).
Funds under this Letter of Credit are available to Beneficiary by valid presentation on or before the Expiration Date of a dated statement purportedly signed by your duly authorized representative, in the form attached hereto as Exhibit A, containing one of the two alternative paragraphs set forth in paragraph 2 therein, referencing our Letter of Credit No. [XXXXXXX] (“Drawing Certificate”).
The Drawing Certificate may be presented by (a) physical delivery, (b) as a PDF attachment to an e-mail to [bank email address] or (c) facsimile to [bank fax number] confirmed by [e-mail to [bank email address]]. Transmittal by facsimile or email shall be deemed delivered when received.
The original of this Letter of Credit (and all amendments, if any) is not required to be presented in connection with any presentment of a Drawing Certificate by Beneficiary hereunder in order to receive payment.
We hereby agree with the Beneficiary that all documents presented under and in compliance with the terms of this Letter of Credit will be duly honored upon presentation to the Issuer on or before
Exhibit D - 2
the Expiration Date. All payments made under this Letter of Credit shall be made with Issuer’s own immediately available funds by means of wire transfer in immediately available United States dollars to Beneficiary’s account as indicated by Beneficiary in its Drawing Certificate or in a communication accompanying its Drawing Certificate.
Partial draws are permitted under this Letter of Credit, and this Letter of Credit shall remain in full force and effect with respect to any continuing balance.
It is a condition of this Letter of Credit that the Expiration Date shall be deemed automatically extended without an amendment for a one year period beginning on the present Expiration Date hereof and upon each anniversary for such date, unless at least one hundred twenty (120) days prior to any such Expiration Date we have sent to you written notice by overnight courier service that we elect not to extend this Letter of Credit, in which case it will expire on the date on the then current Expiration Date, or such later date as may be specified in such notice. No presentation made under this Letter of Credit after such Expiration Date (as may be extended in such notice) will be honored.
This Letter of Credit is issued subject to the rules of the ‘International Standby Practices 1998’, International Chamber of Commerce Publication No. 590 (“ISP98”) and, as to matters not addressed by ISP98, shall be governed and construed in accordance with the laws of state of California.
Notwithstanding any reference in this Letter of Credit to any other documents, instruments or agreements (other than as set forth in the immediately prior paragraph), this Letter of Credit contains the entire agreement between Beneficiary and Issuer relating to the obligations of Issuer hereunder.
Please address all correspondence regarding this Letter of Credit to the attention of the Letter of Credit Department at [insert bank address information], referring specifically to Issuer’s Letter of Credit No. [XXXXXXX]. For telephone assistance, please contact Issuer’s Standby Letter of Credit Department at [XXX-XXX-XXXX] and have this Letter of Credit available.
All notices to Beneficiary shall be in writing and are required to be sent by certified letter, overnight courier, or delivered in person to: Central Coast Community Energy, Attn: Chief Financial Officer, 70 Garden Court, Suite 300, Monterey, CA 93940. Only notices to Beneficiary meeting the requirements of this paragraph shall be considered valid. Any notice to Beneficiary which is not in accordance with this paragraph shall be void and of no force or effect. [Bank Name]
___________________
[Insert officer name]
[Insert officer title]
Exhibit D - 3
Exhibit A
Drawing Certificate
(DRAW REQUEST SHOULD BE ON BENEFICIARY’S LETTERHEAD)
[Insert Bank Name and Address]
Ladies and Gentlemen:
The undersigned, a duly authorized representative of Central Coast Community Energy, a California joint powers authority, 70 Garden Court, Suite 300, Monterey, CA 93940, as beneficiary (the “Beneficiary”) of the Irrevocable Letter of Credit No. [XXXXXXX] (the “Letter of Credit”) issued by [insert bank name] (the “Bank”) by order of [_________], a [________] (the “Applicant”), hereby certifies to the Bank as follows:
1. Applicant and Beneficiary are party to that certain Dispatchable Energy and Energy Storage Agreement dated as of ___________, 20__ (the “Agreement”).
2. Beneficiary is making a drawing under this Letter of Credit in the amount of U.S. $___________ because a Buyer Default (as such term is defined in the Agreement) has occurred or other occasion provided for in the Agreement where Beneficiary is authorized to draw on the Letter of Credit has occurred.
OR
Beneficiary is making a drawing under this Letter of Credit in the amount of U.S. $___________, which equals the full available amount under the Letter of Credit, because Applicant is required to maintain the Letter of Credit in force and effect beyond the Expiration Date of the Letter of Credit but has failed to provide Beneficiary with a replacement Letter of Credit or other acceptable instrument within thirty (30) days prior to such Expiration Date.
3. The undersigned is a duly authorized representative of Central Coast Community Energy and is authorized to execute and deliver this Drawing Certificate on behalf of Beneficiary.
You are hereby directed to make payment of the requested amount to Central Coast Community Energy by wire transfer in immediately available funds to the following account: [Specify account information]
Central Coast Community Energy
_______________________________
Name and Title of Authorized Representative
Date___________________________
Exhibit E - 1
EXHIBIT E
STORAGE AVAILABILITY
1. Monthly Storage Availability
(a) Calculation of Monthly Storage Availability. Seller shall calculate the “Monthly Storage Availability” in a given month using the formula set forth below:
Monthly Storage Availability (%) =
𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝑆𝑡𝑜𝑟𝑎𝑔𝑒 𝐶𝑎𝑝𝑎𝑐𝑖𝑡𝑦
𝑆𝑡𝑜𝑟𝑎𝑔𝑒 𝐶𝑜𝑛𝑡𝑟𝑎𝑐𝑡 𝐶𝑎𝑝𝑎𝑐𝑖𝑡𝑦
where:
Average Storage Capacity =
∑𝐻𝑜𝑢𝑟𝑠 𝐴𝑣𝑎𝑖𝑙𝑎𝑏𝑙𝑒 𝐶𝑎𝑝𝑎𝑐𝑖𝑡𝑦
𝐻𝑜𝑢𝑟𝑠
Where:
Hours = All hours in the month
Available Capacity = for each Hour of the month:
(i) the capacity Seller reports to Buyer as being Available to be scheduled; and
(ii) any capacity from the BESS Resource that is Unavailable to be scheduled due to Excused Events.
If the BESS Resource is Unavailable for less than a full Hour, the Available Capacity shall be the average capacity that was Available during that Hour.
If the BESS Resource or any component thereof was previously deemed Unavailable for an Hour or part of an Hour and Seller provides a revised notice indicating the BESS Resource is Available for that Hour or part of an Hour at least sixty (60) minutes prior to the time the Buyer is required to schedule or bid the Product in the Real-Time Market, the BESS Resource will be deemed to be Available to the extent set forth in the revised Notice.
2. Storage Availability Adjustment Factor
The applicable “Storage Availability Adjustment Factor” or “SAAF” is calculated as follows:
(i) If the Monthly Storage Availability is greater than or equal to the Guaranteed Storage Availability, then:
SAAF = 100%
Exhibit E - 2
(ii) If the Monthly Storage Availability is less than the Guaranteed Storage Availability, then:
Exhibit F - 1
EXHIBIT F
STORAGE CAPACITY AND EFFICIENCY RATE TESTS
The “Storage Capacity Test” shall (a) be performed by Seller by maintaining Discharging Energy from the BESS Resource for one (1) hour and the “Effective Discharge Capacity” in megawatts (MW) shall be determined as the quotient of the aggregate quantity of Discharging Energy (MWh) at the end of the one (1) hour test period, as measured at the Delivery Point for the BESS Resource, divided by one (1) and (b) establish the initial Efficiency Rate hereunder based on the actual capacity and efficiency rate of the BESS Resource, as calculated pursuant to Exhibit C; provided, however, that the Effective Discharge Capacity cannot exceed the Storage Capacity set forth in Exhibit A (“Capacity Limit”).
Within the first quarter of each Contract Year following the Commercial Operation Date, upon no less than five (5) Business Days’ prior notice to Buyer, Seller shall schedule and complete a Storage Capacity Test (the “Annual Storage Capacity Test”). In addition, Buyer shall have the right to require a retest of the Storage Capacity Test at any time upon five (5) Days prior Notice to Seller if Buyer provides data with such Notice reasonably indicating that the then-current Effective Discharge Capacity or Efficiency Rate has a Material Variance from the results of the most recent prior Storage Capacity Test. “Material Variance” means system issues lasting greater than ten (10) days with changes to Storage Capacity or Efficiency Rate indicating a decrease of greater than five percent (5%) identified. Seller shall have the right to retest the Storage Capacity Test at any time upon five (5) days prior Notice to Buyer (or any shorter period reasonably acceptable to Buyer consistent with Prudent Industry Practices). Except for establishing the Storage Capacity for purposes of achieving Commercial Operation, Seller may demonstrate the Effective Discharge Capacity and Efficiency Rate by reference to operational data from a meter at the Delivery Point for the BESS Resource in lieu of conducting a Storage Capacity Test. For the avoidance of doubt, the Annual Storage Capacity Test may not result in an Effective Discharge Capacity greater than the Capacity Limit.
The “Efficiency Rate” of the BESS Resource shall be calculated as follows:
𝐸𝑓𝑓𝑖𝑐𝑖𝑒𝑛𝑐𝑦 𝑅𝑎𝑡𝑒 =
MWh delivered + Stored Energy𝑒𝑛𝑑
MWh received + Stored Energy𝑠𝑡𝑎𝑟𝑡
Where:
(i) MWhdelivered = all measured and recorded Discharging Energy delivered from the BESS Resource at the BESS Resource Metering Point for the Facility during the Storage Capacity Test – the amount of Station Use. (ii) MWhreceived = all measured and recorded Charging Energy received during charging of the BESS Resource at the BESS Resource Metering Point for the Facility during the Storage Capacity Test.
(iii) Stored Energyend = available electric energy in the BESS Resource at the end of the Storage Capacity Test – the amount of Station Use.
Exhibit F - 2
(iv) Stored Energystart = available electric energy in the BESS Resource at the start of the Storage Capacity Test.
No later than five (5) Days following any Storage Capacity Test, Seller shall submit a testing report detailing results and findings of the test. The report shall include meter readings from the Delivery Point for the BESS Resource and plant log sheets verifying the operating conditions and output of the Facility. For all purposes under this Agreement, at the beginning of the day following the completion of the Storage Capacity Test, the actual capacity determined pursuant to a Storage Capacity Test shall become the new Storage Contract Quantity and the Efficiency Rate determined pursuant to such Storage Capacity Test shall become the new Efficiency Rate.
Exhibit G - 1
EXHIBIT G
NOTICES
MRP Pacifica Marketing III LLC Central Coast Community Energy All Notices:
Street: 200 W. Madison St., Suite 3810
City: Chicago, IL 60606
Attn: Kathleen Pokryfke
Phone: 312-766-4551
Email: [email protected]
All Notices:
Street: 70 Garden Court, Suite 300
City: Monterey, CA Zip: 93940
Attn: Dennis Dyc-O’Neal, COO
Phone: (831) 641-7240
Email: [email protected]
Reference Numbers: Reference Numbers:
Invoices:
Attn: Accounts Payable
Phone: (312) 766-8510
Email: [email protected]
Invoices:
Attn: Accounts Payable-Power Services
Phone: (831) 641-7218
Email: [email protected]
Scheduling:
Attn: CalPeak Power LLC
Phone: (760)-530-2323
Email: calpeak [email protected]
Scheduling:
Attn: The Energy Authority
Phone: (425) 460-1110
Email: [email protected]
Tel: (Real Time Desk): (425) 460-1118
-or-Attn: Day-Ahead Scheduling
Phone: (425) 460-1118
Email: [email protected]
Confirmations:
Attn:
Phone:
Email: [email protected]
Confirmations:
Attn: Tara Walling, Power Resources Markets
Manager
Phone: (831) 641-7203
Email: [email protected]
Payments:
Attn: Accounts Payable
Phone: (312) 766-8510
Email: [email protected]
Payments:
Attention: Dewayne Woods, CFO
Phone: (831) 641-7210
Email: [email protected]
Wire Transfer: Wire Transfer:
Credit and Collections:
Attn: Kathleen Pokryfke
Email: [email protected]
Phone: (312) 766-4551
Credit and Collections:
Attn: Dewayne Woods, CFO
Phone: (831) 641-7210
Email: [email protected]
Exhibit G - 2
MRP Pacifica Marketing III LLC Central Coast Community Energy With additional Notices of an Event of
Default to:
Attn: General Counsel
Phone: (312) 381-8559
Email: [email protected]
Additional notices of an Event of Default to:
Attn: Kathleen Pokryfke
Email: [email protected]
Phone: (312) 766-4551
With additional Notices of an Event of Default or
Force Majeure Event to:
Central Coast Community Energy
Attn: Charles McKee, General Counsel
Phone: (831) 595-7743
Email: [email protected]
and to:
Attn: Marina Pantchenko, Deputy General Counsel
Phone: (831) 215-1740
Email: [email protected]
and to:
Attn: Deanna Fernandez, Energy Contracts and
Compliance Manager
Email: [email protected]
and to:
Hall Energy Law PC
Attn: Stephen Hall
Phone: (503) 313-0755
Email: [email protected]
Emergency Contact:
Attn: MRP San Joaquin LLC
Phone:
Email: [email protected]
Emergency Contact:
Attn: Dennis Dyc-O’Neal, COO
Phone: (831) 641-7240
Email: [email protected]
Exhibit H - 2
Description Value Notes
1. Interconnection Capacity Limit 336 MW
Exhibit I - 1
EXHIBIT I
MAINTENANCE INTERVALS
1.1 Maintenance Plans
(a) Not later than ninety (90) days before the beginning of each Contract Year the Seller shall prepare and submit to the Buyer its proposed maintenance plan (a “Maintenance Plan”) for that Contract Year; provided that the Maintenance Plan for the first Contract Year shall be prepared and submitted by the Seller to the Buyer not later than sixty (60) days after the Thermal Start Date. Seller shall periodically update the Maintenance Plan as necessary or appropriate during the applicable Contract Year. Outages identified in the Maintenance Plan, as it is updated from time to time, are referred to herein as “Planned Outages”.
1.2 Scheduled Outages
(a) Between June 1st and September 30th, Seller shall not schedule (b) The Parties shall coordinate, acting reasonably and in good faith, to establish reasonable maintenance schedules for the various components of the Thermal Resource and the BESS Resource.
(c) Seller shall use reasonable commercial efforts to ensure all forecasted maintenance coincides with Seller’s forecasted dispatch schedules to minimize any loss of revenue.
1.3 Planned Outages with respect to the BESS Resource and Major Overhauls During Peak Summer Months
(a) Planned Outages with respect to the BESS Resource and Major Overhauls may not be scheduled
2.1 Reporting Scheduled Maintenance
(a) Buyer must be informed, in advance, any time Seller is planning to perform scheduled maintenance on the Thermal Resource or the BESS Resource (each a “Resource” and together, the “Resources”). The advance notification requirements
Exhibit I - 2
are as follows:
24 Hours is required for maintenance lasting
7 Days is required for maintenance lasting
3 Months is required for a
Emergency As soon as possible.
2.2 Limited Generation Due to Maintenance
(a) Maintenance may be performed while the applicable Resource is operating at reduced (limited) generation.
(b) Maintenance may be performed on one Resource, or a unit thereof, while the other Resource, or unit(s) thereof, respectively, is operating.
2.3 Allowance for Planned Outages
(a) As it relates to the Thermal Resource: Outage periods for Planned Outages shall (b) As it relates to the BESS Resource: Outage periods for Planned Outages shall
2.4
Exhibit I - 3
2.5 Application of Maintenance Hours
(a) As used herein, a “Maintenance Hour” means each hour the Thermal Resource or BESS Resource, as applicable, is unavailable due to a Planned Outage or Major Overhaul,
(b) All Maintenance Hours that a Resource is shut down for a Planned Outage will be (i)
Exhibit J - 1
EXHIBIT J
GENERATING CAPACITY AVAILABILITY
1. Monthly GC Availability
(a) Calculation of Monthly GC Availability. Seller shall calculate the “Monthly GC Availability” in a given Showing Month using the formula set forth below:
Monthly GC Availability (%) =
𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝐴𝑣𝑎𝑖𝑙𝑎𝑏𝑙𝑒 𝐺𝑒𝑛𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝐶𝑎𝑝𝑎𝑐𝑖𝑡𝑦
𝐺𝑒𝑛𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝐶𝑎𝑝𝑎𝑐𝑖𝑡𝑦
where:
Average Available Generating Capacity =
∑𝐻𝑜𝑢𝑟𝑠 𝐴𝑣𝑎𝑖𝑙𝑎𝑏𝑙𝑒 𝐺𝑒𝑛𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝐶𝑎𝑝𝑎𝑐𝑖𝑡𝑦
𝐻𝑜𝑢𝑟𝑠
Where:
Hours = All hours for the Showing Month
Available Generating Capacity = for each Hour (as defined in the CAISO Tariff) of the Showing Month, the sum of:
(i) the total capacity available in any Hour to be dispatched in the Real-Time Market; plus
(ii) any capacity from the Thermal Resource that is unavailable due to an Excused Event.
If the Thermal Resource is unavailable for less than a full Hour, the Available Generating Capacity shall be the average capacity that was available during that Hour.
If the Thermal Resource or any component thereof was previously deemed unavailable for an Hour or part of an Hour and Seller provides a revised notice indicating the Thermal Resource is available for that Hour or part of an Hour at least sixty (60) minutes prior to the time the Buyer is required to schedule or bid the Product in the Real-Time Market, the Thermal Resource will be deemed to be available to the extent set forth in the revised Notice.
2. Generating Capacity Availability Adjustment Factor
The applicable “Generating Capacity Availability Adjustment Factor” or “GCAAF” is calculated as follows:
Exhibit J - 2
(i) If the Monthly GC Availability is greater than or equal to the Guaranteed GC Availability, then:
GCAAF = 100%
(ii) If the Monthly GC Availability is less than the Guaranteed GC Availability, then:
Exhibit K - 1
EXHIBIT K
[RESERVED]
Exhibit L - 1
EXHIBIT L
FORM OF COMMERCIAL OPERATION DATE CERTIFICATE
This certification (“Certification”) of Commercial Operation is delivered by [LICENSED PROFESSIONAL ENGINEER] (“Engineer”) to Central Coast Community Energy, a California joint powers authority (“Buyer”) in accordance with the terms of that certain Dispatchable Energy and Energy Storage Agreement dated _________ (“Agreement”) by and between MRP Pacifica Marketing III LLC (“Seller”) and Buyer. All capitalized terms used in this Certification but not otherwise defined herein shall have the respective meanings assigned to such terms in the Agreement.
As of [DATE], Engineer hereby certifies and represents to Buyer the following:
1. The BESS Resource is fully operational, reliable and interconnected, fully integrated and synchronized with the Transmission System.
2. Seller has installed equipment for the BESS Resource with a nameplate capacity of no less than of the Storage Contract Capacity.
3. Seller has commissioned all equipment in accordance with its respective manufacturer’s specifications.
4. Seller has demonstrated functionality of the BESS Resource’s communication systems and automatic generation control (AGC) interface to operate the BESS Resource as necessary to respond and follow instructions, including an electronic signal conveying real time and intra-day instructions, directed by the Buyer in accordance with the Agreement and/or the CAISO.
5. The BESS Resource is fully capable of charging, storing and discharging energy up to no less than of the Storage Contract Capacity and receiving instructions to charge, store and discharge Energy, all within the operational constraints and subject to the applicable Operating Procedures.
6. Authorization to parallel the BESS Resource was obtained from the Participating Transmission Owner.
7. The Transmission Provider has granted any necessary approvals for Commercial Operation.
8. The CAISO has provided notification supporting Commercial Operation, in accordance with the CAISO Tariff.
EXECUTED by [LICENSED PROFESSIONAL ENGINEER]
this ________ day of _____________, 20__.
Exhibit L - 2
[LICENSED PROFESSIONAL ENGINEER]
By:
Printed Name:
Title:
Exhibit M - 1
EXHIBIT M
FORM OF INSTALLED STORAGE CAPACITY CERTIFICATE
This certification (“Certification”) of Installed Storage Capacity is delivered by [LICENSED PROFESSIONAL ENGINEER] (“Engineer”) to Central Coast Community Energy, a California joint powers authority (“Buyer”), in accordance with the terms of that certain Dispatchable Energy and Energy Storage Agreement dated _________ (“Agreement”) by and between MRP Pacifica Marketing III LLC (“Seller”) and Buyer. All capitalized terms used in this Certification but not otherwise defined herein shall have the respective meanings assigned to such terms in the Agreement.
I hereby certify the following:
The Storage Capacity Test demonstrated a maximum dependable operating capability that can be sustained for eight hours to discharge electric energy of 40 MW AC to the Delivery Point for the BESS Resource, in accordance with the testing procedures, requirements and protocols set forth in Section 4.11 and Exhibit F (the “Installed Storage Capacity”).
EXECUTED by [LICENSED PROFESSIONAL ENGINEER]
this ________ day of _____________, 20__.
[LICENSED PROFESSIONAL ENGINEER]
By:
Printed Name:
Title:
Exhibit N - 1
EXHIBIT N
SCHEDULING COORDINATOR RESPONSIBILITIES
(a) Seller as Scheduling Coordinator for the Facility. During the Delivery Term, Seller shall be the Scheduling Coordinator or designate a qualified third party to provide Scheduling Coordinator services with the CAISO for the Facility for the delivery of the Product at the Delivery Point and for the purposes of conducting Storage Capacity Tests. Seller (as the Facility’s SC) shall submit Schedules and Supply Plans to the CAISO in accordance with this Agreement and the applicable CAISO Tariff, protocols and scheduling practices for Product, including on a day-ahead, hour-ahead, fifteen-minute market or real time basis. (b) Notices. Seller (as the Facility’s SC) shall use a web-based system through which Seller shall submit to CAISO all notices and updates required under the CAISO Tariff regarding the Facility’s status, including, but not limited to, all outage requests, forced outages, forced outage reports, clearance requests, or must offer waiver forms. Seller will cooperate with Buyer to provide Buyer access to such notices and updates. If the web-based system is not available, Seller shall promptly submit such information to Buyer and the CAISO (in order of preference) telephonically, by electronic mail, transmission to the personnel designated to receive such information. (c) CAISO Costs and Revenues. Except during a Storage Capacity Test or as otherwise set forth below, Buyer shall be responsible for CAISO costs (including penalties, costs associated Imbalance Energy (as defined in the CAISO Tariff), and other charges) and shall be entitled to all CAISO revenues (including credits, Imbalance Energy revenues, and other payments), including revenues associated with CAISO dispatches, bid cost recovery, or other credits in respect of the Product Scheduled or delivered from the Facility; provided, that Seller shall be responsible for CAISO costs (including penalties, Imbalance Energy costs, and other charges) to the extent such CAISO costs are due to Seller’s failure to schedule the Charging Energy, Discharging Energy or Dispatchable Energy or submit Supply Plans in accordance with the requirements of this Agreement. Seller shall be responsible for all CAISO penalties resulting from any failure by Seller to abide by the CAISO Tariff or the outage notification requirements set forth in this Agreement.
The Parties agree that any Availability Incentive Payments are for the benefit of the Seller and for Seller’s account and that any Non-Availability Charges are the responsibility of the Seller and for Seller’s account. In addition, if during the Delivery Term, the CAISO implements or has implemented any sanction or penalty related to scheduling, outage reporting, or generator operation, and any such sanctions or penalties are imposed upon the Facility or to Seller as Scheduling Coordinator due to failure by Seller to abide by the CAISO Tariff or the outage notification or other requirements set forth in this Agreement or the SC Agreement, the cost of the sanctions or penalties shall be the Seller’s responsibility. Subject to the foregoing, Seller shall pass through to Buyer all CAISO costs and revenues associated with the Facility, which shall be reflected as a credit on the monthly invoices provided to Buyer in accordance with the invoicing and payment provisions of Article 8, including the netting provisions of Section 8.7. (d) CAISO Settlements. Seller (as the Facility’s SC) shall be responsible for all settlement functions with the CAISO related to the Facility. (e) Dispute Costs. Seller (as the Facility’s SC) may be required to dispute CAISO
Exhibit N - 2
settlements in respect of the Facility. If Buyer has directed Seller to dispute a CAISO settlement, Buyer agrees to pay Seller’s costs and expenses (including reasonable attorneys’ fees) associated with its involvement with such CAISO disputes to the extent they relate to CAISO charges payable by Buyer with respect to the Facility.
(f) Master Data File and Resource Data Template. Seller shall provide the data to the CAISO (and to Buyer) that is required for the CAISO’s Master Data File and Resource Data Template (or successor data systems) for the Facility consistent with this Agreement. Neither Party shall change such data without the other Party’s prior written consent. (g) NERC Reliability Standards. Seller (as Scheduling Coordinator) shall comply with NERC reliability standards.
(h) Audit Right. Buyer has the right, at its sole expense, during normal working hours, and after reasonable Notice, to examine the records of Seller to the extent reasonably necessary to verify the accuracy of any statements, charges, revenues, or costs passed through to Buyer in accordance with Seller or the SC providing Scheduling Coordinator services under this Agreement including the costs to procure any natural gas or Substitute Capacity on behalf of Buyer. If such examination reveals any material inaccuracy in any statement, the necessary adjustments shall be made promptly.
Exhibit O - 1
EXHIBIT O
GAS HEDGING TRANSACTION
On a daily basis, Buyer may request that Seller provide quotes to purchase natural gas at a fixed price for a specified volume and period of time (the “Fixed Price Gas”). Any such request from Buyer shall be in writing and shall specify the proposed “Start Date”, “End Date”, and requested fuel quantity for the Hedging Transaction. Unless otherwise agreed to by Seller, the request may be to fix the price for natural gas no earlier than the following day and for no more than thirty-six (36) months. Following receipt of such request, Seller shall promptly, but in any event within one (1) Trading Day (as defined below), deliver to Buyer a quote for the Fixed Price Gas to be used during the requested period of time along with an “Acceptance Deadline” by which the quote must be accepted; provided, Seller shall use commercially reasonable efforts to provide Buyer at least thirty (30) minutes to accept a quote. The quote will represent Seller’s commercially reasonable efforts to secure the Fixed Price Gas and may include any credit charges, scheduling costs, or other adjustments to the market price based on verifiable costs to the Seller. Seller will deliver the quote via email in the following form:
Acceptance Deadline:
Start Date:
End Date:
MMBtu per Day:
Total MMBtu:
Price per MMBtu:
The foregoing represents an offer to secure Fixed Price Gas as used under that certain Dispatchable Energy and Energy Storage Agreement by and between Central Coast Community Energy and MRP Pacifica Marketing III LLC dated as of _____________.
Neither Party has any obligation with respect to this offer until and unless Buyer accepts such offer in writing prior to the Acceptance Deadline in the form set forth in Exhibit P (a “Fixed Price Gas Order”). This offer expires without further action if it is not accepted in writing prior to the Acceptance Deadline.
If Buyer accepts the offer by delivering a Fixed Price Gas Order to Seller prior to the offer’s expiration, then the Fixed Price Gas Order will be used to calculate amounts owed by Buyer for natural gas under this Agreement for the specified term and volume. If the offer expires, Buyer may request that Seller provide a new quote during the same Trading Day and Seller will use reasonable commercial efforts to provide a new quote within that Trading Day.
As used in this Exhibit, “Trading Day” means Monday through Friday, excluding Federal Banking Holidays for transactions in the U.S. starting at 8:00 a.m. Pacific Prevailing Time and ending at 5:00 p.m. Pacific Prevailing Time.
Exhibit P - 1
EXHIBIT P
FORM OF “FIXED PRICE GAS ORDER”
This FIXED PRICE GAS ORDER (“Order”) is delivered by Central Coast Community Energy, a California joint powers authority, to MRP Pacifica Marketing III LLC in accordance with the terms of that certain Dispatchable Energy and Energy Storage Agreement by and between Central Coast Community Energy, as Buyer, and MRP Pacifica Marketing III LLC, as Seller, dated as of ____________ (the “Agreement”). All capitalized terms used in this Order but not otherwise defined herein shall have the respective meanings assigned to such terms in the Agreement.
Pursuant to Section 4.6(c) of the Agreement, Buyer accepts Seller’s offer to purchase Fixed Price Gas as follows:
Seller’s Acceptance Deadline:
Date/Time of Buyer’s Acceptance:
Start Date:
End Date:
MMBtu per Day:
Total MMBtu:
Price per MMBtu:
Buyer has caused this Order to be duly executed and delivered by a duly authorized representative on the date written below.
[BUYER]
By: __________________________
Name: __________________________
Title: __________________________
Date: __________________________