other actions that may be requested by Buyer to assure that the Facility is an Eligible Renewable Energy Resource under the California Renewables Portfolio Standard; 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.
(b) If a change in Law occurring after the Effective Date has increased Seller's costs to comply with Seller's obligations in excess of Seller's known or reasonably expected costs ( as of the Effective Date) with respect to obtaining, maintaining, conveying or effectuating Buyer's use of (as applicable), the items listed below (the "Compliance Actions") the maximum amount of out-of-pocket costs and expenses ("Compliance Costs") to be incmTed by Seller under this Agreement shall be capped at the Compliance Expenditme Cap amount shown on the Cover Sheet over the Delive1y Tenn in the aggregate ("Compliance Expenditure Cap"):
(i) CEC Ce1tification and CEC Verification;
(ii) Environmental Attributes;
(iii) WREGIS;
(iv) Capacity Attributes;
(v) Eligibility as an Eligible Renewable Energy Resource; and (vi) California Renewables Po1tfolio Standard qualification. (c) Seller's internal administrative costs associated with obtaining, maintaining, conveying or effectuating Buyer's use of (as applicable) any Product are excluded from the Compliance Expenditure Cap. If Seller reasonably anticipates the need to incur Compliance Costs in excess of the Compliance Expenditure Cap in order to take any Compliance Action, Seller shall provide Notice to Buyer of such anticipated Compliance Costs. (d) Buyer will have thi1ty (30) days to evaluate such Notice (during which time period Seller is not obligated to take any Compliance Actions described in the Notice) and shall, within such time, either (1) agree to reimburse Seller for the costs that exceed the Compliance Expenditure Cap (such Buyer-agreed upon costs, the "Accepted Compliance Costs"), (2) waive Seller's obligation to take such Compliance Actions, or any pait thereof for which Buyer has not agreed to reimburse Seller, or (3) ifthere is a dispute regai·ding whether specific costs ai·e related to the change in Law, meet and confer in good faith with Seller to agree upon the Compliance Actions that Seller will take and the amount that Buyer will reimburse Seller for such Compliance Actions.
( e) If Buyer agrees to reimburse Seller for the Accepted Compliance Costs, then Seller shall take such Compliance Actions covered by the Accepted Compliance Costs as agreed upon by the Pait ies and Buyer shall reimburse Seller for Seller's actual costs to effect the Compliance Actions, not to exceed the Accepted Compliance Costs, within sixty (60) days from the time that Buyer receives an invoice and documentation of such costs from Seller. 31 (f) Subject to the following sentence, to the extent that a change in Law (including a CAISO RA Enhancement) occmTing after the Effective Date results in a reduction of the Facility's Net Qualifying Capacity and either (i) Seller has completed the actions required to comply with its obligations under this Agreement, up to the Compliance Expenditme Cap or any Accepted Compliance Costs or (ii) Buyer has waived Seller's obligations to take any actions required to comply with such change in Laws in accordance with this Section 3.11 , then the Net Qualifying Capacity of the Facility shall be automatically deemed to refer to the Net Qualifying Capacity of the Facility that the Facility could reasonably achieve if all such actions were completed. The Pa1ties agree that if (A) the CAISO implements the CAISO RA Enhancement and (B) the othe1w ise available Capacity Attributes are reduced solely due to Seller's failme to operate the Facility in accordance with the requirements of this Agreement, then, notwithstanding this Section 3 .11, Seller's obligation to deliver the applicable Qualifying Capacity will not be reduced on the basis of such reduction and the automatic adjustments described in the foregoing sentence shall not be implemented.
3.12 Additional Products.
(a) Over the Tenn, new or incremental oppo1tunities may arise for the sale or transfer of additional products from the Facility that are not cmTently known to or contemplated by the Buyer or Seller, including capacity, reactive power, and ancillaiy services ( collectively, "Additional Products"). To the extent that the sale or transfer of these Additional Products accrning dming the Settlement Te1m becomes an option, either Pa1ty may notify the other regarding their availability. Buyer may request in writing for Seller to use collllllercially reasonable effo1ts, at Buyer's cost, to monetize such Additional Products on behalf of Buyer ("Buyer's Written Request"); provided that (i) the creation, registration, sale or ti·ansfer of such Additional Products shall not (A) require Seller to make material modifications to the Facility ( or the design thereof) or material upgrades or other material modifications to any interconnection or ti·ansmission facilities ( other than those for which Buyer has agreed to fund), (B) require Seller to reduce the generation of energy from the Facility and delive1y thereof to the interconnection point (or resti·ict Seller's flexibility in offering, bidding, planning and scheduling such energy), (C) interfere with qualification, offering, bidding, planning, scheduling or other disposition of Environmental Atti·ibutes; and (ii) the sale or transfer of such Additional Products is pennitted by (and capable of being implemented pursuant to) law.
ARTICLE 4: OBLIGATIONS AND DELIVERIES
4.1 Delivery.
(a) Energy. Subject to the provisions of this Agreement, commencing on the Collllllercial Operation Date through the end of the Conti·act Te1m, Seller shall supply and deliver the Product to Buyer at the Delive1y Point, and Buyer shall take delive1y of the Product at the Delive1y Point in accordance with the te1ms of this Agreement. Seller shall be responsible for paying or satisfying when due any costs or charges imposed in connection with the delive1y of Facility Energy to the Delive1y Point, including without limitation, Station Use, Electi·ical Losses, and any operation and maintenance charges imposed by the Transmission Provider directly relating to the Facility's operations. Buyer shall be responsible for all costs, charges, and penalties, if any, imposed in connection with the delive1y of Facility Energy at and after the Delive1y Point, 32 including without limitation trnnsmission costs and transmission line losses and imbalance charges. The Facility Energy will be scheduled to the CAISO by Buyer or Buyer's SC in accordance with Exhibit D.
(b) Environmental Attributes. All Environmental Atti·ibutes associated with the Test Energy and the Facility during the Delive1y Te1m are exclusively dedicated to and vested in Buyer. Seller represents and wan-ants that Seller holds the rights to all Environmental Atti·ibutes from the Facility, and Seller agrees to convey and hereby conveys all such Environmental Atti·ibutes to Buyer as included in the delive1y of the Product from the Facility.
4.2 Interconnection. Seller shall be responsible for all costs of interconnecting the Facility to the point of interconnection pursuant to the Interconnection Agreement.
4.3 Title and Risk of Loss.
(a) Energy. Title to and risk of loss related to the Facility Energy, shall pass and ti·ansfer from Seller to Buyer at the Delive1y Point. Seller wanants that all Product delivered to Buyer is free and clear of all liens, security interests, claims and encumbrances of any kind. (b) Environmental Atti·ibutes. Title to and risk of loss related to the Environmental Atti·ibutes shall pass and ti·ansfer from Seller to Buyer upon the ti·ansfer of such Environmental Atti·ibutes in accordance with WREGIS.
4.4 Forecasting. Seller shall provide the forecasts described below at Seller's sole expense. Seller shall use commercially reasonable effoits to forecast the Available Capacity accurately and to ti·ansmit such info1mation in a fonnat reasonably acceptable to Buyer and Buyer's SC.
(a) Annual Forecast of Energy. No less than fo1ty-five (45) days before (i) the first day of the first Conti-act Year of the Delive1y Te1m and (ii) the beginning of each calendar year for eve1y subsequent Conti·act Year during the Delive1y Te1m, Seller shall provide to Buyer and the SC a non-binding forecast of each month's average-day Expected Energy, by hour, for the following calendar year in a fo1m substantially similar to the table found in Exhibit F-1, or as reasonably requested by Buyer.
(b) Monthly Forecast of Energy and Available Capacity. No less than thi1ty (30) days before the beginning of Commercial Operation, and thereafter ten (10) Business Days before the beginning of each month during the Delive1y Te1m, Seller shall provide to Buyer and Buyer's SC a non-binding forecast of the hourly expected Energy and Available Capacity for each day of the following month in a fo1m substantially similar to the table found in Exhibit F-2 ("Monthly Delivery Forecast").
(c) Day-Ahead Forecast. By 5:30 AM Pacific Prevailing Time on the Business Day immediately preceding the date of delive1y, or as othe1wise specified by Buyer consistent with Pmdent Operating Practice, Seller shall provide Buyer's SC with a non-binding forecast of (i) Available Capacity and (ii) hourly expected Energy, in each case, for each hour of the immediately succeeding day ("Day-Ahead Forecast"). A Day-Ahead Forecast provided a day prior to any non-Business Day(s) shall include non-binding forecasts for the immediate day, each 33 succeeding non-Business Day and the next Business Day. Each Day-Ahead Forecast shall clearly identify, for each hour, Seller's best estimate of (i) the Available Capacity and (ii) the hourly expected Energy. These Day-Ahead Forecasts shall be sent to Buyer's Scheduling Coordinator.
If Seller fails to provide Buyer with a Day-Ahead Forecast as required herein for any period, then for such unscheduled delive1y period only Buyer shall rely on any Real-Time Forecast provided in accordance with Section 4.4(d) or the Monthly Delive1y Forecast or Buyer's best estimate based on infonnation reasonably available to Buyer.
( d) Real-Time Forecasts. During the Delive1y T e1m, Seller shall notify Buyer's SC of any changes from the Day-Ahead Forecast of (i) one (1) MW or more in Available Capacity or (ii) one (1) MWh or more in hourly expected Energy, in each case, whether due to Forced Facility Outage, Force Majeure Event or other cause, as soon as reasonably possible, but no later than one (1) hour prior to the deadline for submitting Schedules to the CAISO in accordance with the rnles for paiiicipation in the Real-Time Mai·ket. If the Available Capacity changes by at least one (1) MW or the hourly expected Energy changes by at least one (1) MWh, as of a time that is less than one (1) hour prior to the Real-Time Mai·ket deadline, but before such deadline, then Seller must notify Buyer as soon as reasonably possible. Such Real-Time Forecasts of Energy shall be provided by an Approved Forecast Vendor and shall contain infonnation regarding the beginning date and time of the event resulting in the change in Available Capacity or hourly expected Energy, as applicable, the expected end date and time of such event, and any other infonnation required by the CAISO or reasonably requested by Buyer. With respect to any Forced Facility Outage, Seller shall use commercially reasonable effo1is to notify Buyer's SC of such outage within ten (10) minutes of the commencement of the Forced Facility Outage. Seller shall info1m Buyer of any developments that will affect either the duration of such outage or the availability of the Facility during or after the end of such outage. These Real-Time Forecasts shall be communicated in a method acceptable to Buyer; provided that Buyer specifies the method no later than sixty ( 60) days prior to the effective date of such requirement. In the event Buyer fails to provide Notice of an acceptable method for communications under this Section 4.4(d), then Seller shall send such communications by telephone and e-mail to Buyer.
(e) Forced Facility Outages. Notwithstanding anything to the contraiy herein, Seller shall promptly notify Buyer's Scheduling Coordinator of Forced Facility Outages and Seller shall keep Buyer info1med of any developments that will affect either the duration of the outage or the availability of the Facility during or after the end of the outage. (f) Forecasting Penalties. Subject to a Force Majeure Event, in the event Seller does not in a given hour provide the forecast required in Section 4.4(d) and Buyer incurs a loss or penalty resulting from its scheduling activities with respect to Facility Energy during such hour, Seller shall be responsible for a "Forecasting Penalty" for each such hour equal to the product of (A) the absolute difference (if any) between (i) the expected Energy for such hour set fo1ih in the Monthly Delive1y Forecast, and (ii) the actual Energy produced by the Facility, multiplied by (B) the absolute value of the Real-Time Price in such hour. Settlement of Forecasting Penalties shall occur as set fo1ih in Aliicle 8 of this Agreement.
(g) CAISO Tariff Requirements. Subject to the limitations expressly set fo1ih in Section 3.11, to the extent such obligations ai·e applicable to the Facility, Seller will comply with all applicable obligations for Variable Energy Resources under the CAISO Tai·iff and the 34 Eligible Intennittent Resource Protocol, including providing appropriate operational data and meteorological data, and will fully cooperate with Buyer, Buyer's SC, and CAISO, in providing all data, infonnation, and authorizations required thereunder.
4.5 Curtailment.
(a) General. Seller agrees to reduce the amount of Facility Energy produced by the Facility, by the amount and for the period set forth in any Cmiailment Order, Buyer Cmiailment Order, or notice received from CAISO in respect of a Buyer Bid Cmiailment, provided that Seller is not required to reduce such amount to the extent it is inconsistent with the limitations of the Facility set out in the Operating Restrictions.
(b) Buyer Cmiailment. Buyer shall have the right to order Seller to cmiail deliveries of Facility Energy through Buyer Cmiailment Orders, provided that Buyer shall pay Seller for all Deemed Delivered Energy associated with a Buyer Cmiailment Period at the Contract Price.
(c) Failure to Comply. If Seller fails to comply with a Buyer Cmiailment Order, Buyer Bid Cmiailment or Cmiailment Order, then, for each MWh of Facility Energy that is delivered by the Facility to the Delive1y Point in contradiction to the Buyer Cmiailment Order, Buyer Bid Cmiailment or Curtailment Order, Seller shall pay Buyer for each such MWh at an amount equal to the sum of (A) + (B) + (C), where: (A) is the amount, if any, paid to Seller by Buyer for delivery of such excess MWh and, (B) is the sum, for all Settlement Inte1vals with a Negative LMP during the Buyer Cmiailment Period or Cmiailment Period, of the absolute value of the product of such excess MWh in each Settlement Inte1val and the Negative LMP for such Settlement Inte1val, and (C) is any penalties assessed by the CAISO or other charges assessed by the CAISO resulting from Seller's failure to comply with the Buyer Cmiailment Order, Buyer Bid Cmiailment or Cmiailment Order.
(d) Seller Equipment Required for Cmiailment Instrnction Communications.
Seller shall acquire, install, and maintain such facilities, communications links and other equipment, and implement such protocols and practices, as necessaiy to respond and follow instru ctions, including an electr·onic signal conveying real time and intr·a-day instrnctions, to operate the Facility as directed by the Buyer in accordance with this Agreement and/or a Governmental Authority, including to implement a Buyer Cmiailment Order, Buyer Bid Cmiailment or Cmiailment Order in accordance with the methodology used to tr·ansmit such instructions as it may change from time to time. If at any time during the Delive1y Te1m Seller's facilities, communications links or other equipment, protocols or practices ai·e not in compliance with then-cunent methodologies, Seller shall take the steps necessa1y to become compliant as soon as commercially reasonably possible. Seller shall be liable pursuant to Section 4.5(c) for failure to comply with a Buyer Cmiailment Order, Buyer Bid Cmiailment or Cmiailment Order, during the time that Seller's facilities, communications links or other equipment, protocols or practices ai·e not in compliance with methodologies. For the avoidance of doubt, a Buyer Curtailment Order, Buyer Bid Cmiailment or Cmiailment Order communication via such systems and facilities shall have the same force and effect on Seller as any other fo1m of communication.
4.6 Facility Operations.
35 (a) Seller shall operate the Facility in accordance with Prndent Operating Practices.
(b) During the Delive1y Tenn, Seller shall maintain SCADA Systems, communications links and other equipment necessaiy to receive automated Dispatch Notices consistent with CAISO protocols and practice ("Automated Dispatches"). In the event of the failure or inability of the Facility to receive Automated Dispatches, Seller shall use all commercially reasonable effo1is to repair or replace the applicable components as soon as reasonably possible, and if there is any material delay in such repair or replacement, Seller shall provide Buyer with a written plan of all actions Seller plans to take to repair or replace such components for Buyer's review and comment. During any period during which the Facility is not capable of receiving or implementing Automated Dispatches, Seller shall implement back-up procedures consistent with the CAISO Tariff and CAISO protocols to enable Seller to receive and implement non-automated Dispatch Notices ("Alternative Dispatches"). (c) Seller shall maintain a daily operations log for the Facility which shall include but not be limited to info1mation on Energy production, electricity consumption, availability, outages, changes in operating status, inspections and any other significant events related to the operation of the Facility. Infonnation maintained pursuant to this Section 4.6(c) shall be provided to Buyer within fifteen (15) days of Buyer's request. (d) Seller shall maintain accurate records with respect to all Capacity Tests. ( e) Seller shall maintain and make available to Buyer records, including logbooks, demonstrating that the Facility is operated in accordance with Prndent Operating Practices. Seller shall comply with all reporting requirements and pe1mit on-site audits, investigations, tests and inspections pe1mitted or required under any Prndent Operating Practices.
4. 7 Reserved.
4.8 Outages. For the avoidance of doubt, and in no way limiting Section ARTICLE 3 or Exhibit G:
(a) Planned Outages.
(i) No later than sixty (60) days prior to the first day of each Contract Y eai·, Seller shall submit to Buyer the schedule of proposed Planned Outages ("Outage Schedule") for the applicable Contract Year in a fo1m reasonably agreed to by Buyer. The Outage Schedule shall include infonnation concerning all projected Planned Outages during such period, including (A) the anticipated sta1i and end dates of each Planned Outage; (B) a description of the maintenance or repair work to be perfo1med during the Planned Outage; and (C) the anticipated MW of operational capacity of the Facility, if any, during the Planned Outage. Within twenty (20) Business Days after its receipt of an Outage Schedule, Buyer shall give Notice to Seller of any reasonable request for changes to the Outage Schedule, and Seller shall, consistent with Prndent Operating Practices, accommodate Buyer's requests regai·ding the timing of any Planned Outage.
Seller shall deliver to Buyer the final Outage Schedule no later than ten (10) days after receiving Buyer's comments. Seller shall be pe1mitted to reduce deliveries of Product during any period of such Planned Outages. Seller shall use commercially reasonable effo1is to notify Buyer of any 36 change in the Planned Outage Projection as soon as practicable. (ii) If reasonably required in accordance with Pmdent Operating Practices, Seller shall have the right, on no less than sixty (60) days advance Notice to Buyer, to propose changes to the Outage Schedule developed pursuant to Section 4.ll(a)(i). Buyer may provide comments no later than ten (10) days after receiving Seller's Notice of proposed changes to the Outage Schedule and shall pennit any changes if doing so would not have a material adverse impact on Buyer and Seller agrees to reimburse Buyer for any costs or charges associated with such changes.
(iii) Except as scheduled by the Parties under Section 4.8(a), during the months of June through October, Seller shall not schedule any non-emergency maintenance that reduces generation from the Facility by more than ten percent (10%), unless (i) such outage is required to avoid damage to the Facility, (ii) such maintenance is necessary to maintain equipment warTanties and cannot be scheduled outside of the months of June through October, (iii) such outage is required in accordance with Pmdent Operating Practices, or (iv) the Parties agree othe1wise in writing. In the event that Seller has a previously Planned Outage that becomes coincident with a System Emergency, Seller shall make all reasonable effo1ts to reschedule such Planned Outage.
(b) Unplanned Outages.
(i) Seller shall notify Buyer by telephoning Buyer's Scheduling Coordinator no later than ten (10) minutes following the occmTence of a Forced Facility Outage, or if Seller has knowledge that a Forced Facility Outage will occur, within twenty (20) minutes of detennining that such Forced Facility Outage will occur. Seller shall relay outage infonnation to Buyer as required by the CAISO Tar·iffwithin twenty (20) minutes of the Forced Facility Outage.
Seller shall communicate to Buyer the estimated time of retmn of the Facility as soon as practical after Seller has knowledge thereof.
(ii) Seller shall be pennitted to reduce deliveries of Product during any period of System Emergency, Buyer Cmtailment Period or upon Notice of a Cmtailment Order pursuant to the te1ms of this Agreement, the Interconnection Agreement or applicable tariff. (iii) Seller shall be pe1mitted to reduce deliveries of Product during any Force Majeure Event.
(iv) Seller shall be pe1mitted to reduce deliveries of Product as necessary to maintain health and safety pursuant to Section 0.
4.9 Guaranteed Energy Production. During the Delive1y Tenn, Seller shall be required to deliver to Buyer an amount of Adjusted Energy Production, not including any Excess MWh, equal to no less than the Guar·anteed Energy Production (as defined below) in any period of two (2) consecutive Contract Years during the Delive1y Tenn ("Performance Measurement Period"). "Guaranteed Energy Production" means an amount of Adjusted Energy Production, as measured in MWh, equal to eighty percent (80%) of the total Expected Energy for the two (2) Contract Years constituting such Performance Measurement Period. Seller shall be excused from achieving the Guar·anteed Energy Production during any Perfo1mance Measurement Period only 37 to the extent of any Force Majeure Events, System Emergency, Cmiailment Periods, or Buyer Cmiailment Periods. For purposes of detennining whether Seller has achieved the Guaranteed Energy Production, Seller shall be deemed to have delivered to Buyer (1) any Deemed Delivered Energy and (2) Energy in the amount it could reasonably have delivered to Buyer but was prevented from delivering to Buyer by reason of any Force Majeure Events, System Emergency, or Cmiailment Periods ("Lost Output"). If Seller fails to achieve the Guaranteed Energy Production amount in any Perfonnance Measurement Period, Seller shall pay Buyer damages calculated in accordance with Exhibit G; provided that Seller may, as an alternative, provide Replacement Product delivered to Buyer within ninety (90) days after the conclusion of the applicable Perfonnance Measurement Period in the event Seller fails to deliver the Guaranteed Energy Production dming such Contract Years (i) upon a schedule reasonably acceptable to Buyer and (ii) provided that such deliveries do not impose additional costs upon Buyer for which Seller refuses to provide reimbmsement.
4.10 Reserved.
4.11 Reserved.
4.12 WREGIS. Seller shall, at its sole expense, but subject to Section 3 .11, take all actions and execute all documents or instmments necessaiy to ensme that all WREGIS Ce1iificates associated with all Renewable Energy Credits conesponding to all Facility Energy are issued and tracked for pmposes of satisfying the requirements of the California Renewables Po1ifolio Standard and transfened in a timely manner to Buyer for Buyer's sole benefit. Seller shall transfer the Renewable Energy Credits to Buyer. Seller shall comply with all Laws, including the WREGIS Operating Rules, regarding the certification and transfer of such WREGIS Certificates to Buyer and Buyer shall be given sole title to all such WREGIS Certificates. Seller shall be deemed to have satisfied the waiTanty in Section 4.12(g), provided that Seller fulfills its obligations under Sections
4.12 (a) through (g) below. In addition:
(a) Prior to the Commercial Operation Date, Seller shall register the Facility with WREGIS and establish an account with WREGIS ("Seller's WREGIS Account"), which Seller shall maintain until the end of the Delive1y Tenn. Seller shall transfer the WREGIS Ce1iificates using "Forward Certificate Transfers" (as described in the WREGIS Operating Rules) from Seller's WREGIS Account to the WREGIS account(s) of Buyer or the account(s) of a designee that Buyer identifies by Notice to Seller ("Buyer's WREGIS Account"). Seller shall be responsible for all expenses associated with registering the Facility with WREGIS, establishing and maintaining Seller's WREGIS Account, paying WREGIS Ce1iificate issuance and transfer fees, and transfening WREGIS Ce1iificates from Seller's WREGIS Account to Buyer's WREGIS Account.
(b) Seller shall cause Fo1ward Ce1iificate Transfers to occm on a monthly basis in accordance with the certification procedme established by the WREGIS Operating Rules. Since WREGIS Certificates will only be created for whole MWh ainounts of Facility Energy generated, any fractional MWh amounts (i.e., kWh) will be caITied fo1ward until sufficient generation is accumulated for the creation of a WREGIS Ce1iificate.
(c) Seller shall, at its sole expense, ensure that the WREGIS Ce1iificates for a 38 given calendar month coITespond with the Facility Energy for such calendar month as evidenced by the Facility's metered data.
( d) Due to the ninety (90) day delay in the creation of WREGIS Ce1i ificates relative to the timing of invoice payment under Section 8.2, Buyer shall make an invoice payment for a given month in accordance with Section 8.2 before the WREGIS Ce1i ificates for such month are fonnally transfeITed to Buyer in accordance with the WREGIS Operating Rules and this Section 4.12. Notwithstanding this delay, Buyer shall have all right and title to all such WREGIS Ce1i ificates upon payment to Seller in accordance with Section 8.2. ( e) A "WREGIS Certificate Deficit" means any deficit or sho1ifall in WREGIS Ce1iificates delivered to Buyer for a calendar month as compared to the Facility Energy for the same calendar month ("Deficient Month") caused by an e1rnr or omission of Seller. If any WREGIS Ce1iificate Deficit is caused, or the result of any action or inaction by Seller, then the amount of Adjusted Energy Production in the Deficient Month shall be reduced by the amount of the WREGIS Ce1iificate Deficit for pmposes of calculating Buyer's payment to Seller under Aliicle 8 and the Guaranteed Energy Production for the applicable Performance Measurement Period; provided, such adjustment shall not apply to the extent that Seller either (x) resolves the WREGIS Ce1iificate Deficit within ninety (90) days after the Deficient Month or (y) provides Replacement Environmental Attributes (as defined in Exhibit G) within ninety (90) days after the Deficient Month (i) upon a schedule reasonably acceptable to Buyer and (ii) provided that such deliveries do not impose additional costs upon Buyer for which Seller refuses to provide reimbursement. Without limiting Seller's obligations under this Section 4.12, if a WREGIS Ce1i ificate Deficit is caused solely by an e1rnr or omission of WREGIS, the Paii ies shall cooperate in good faith to cause WREGIS to coITect its eITor or omission. (f) IfWREGIS changes the WREGIS Operating Rules after the Effective Date or applies the WREGIS Operating Rules in a manner inconsistent with this Section 4.12 after the Effective Date, the Parties promptly shall modify this Section 4.12 as reasonably required to cause and enable Seller to transfer to Buyer's WREGIS Account a quantity ofWREGIS Ce1i ificates for each given calendar month that coITesponds to the Facility Energy in the same calendai· month. (g) Seller wa1rnnts that all necessaiy steps to allow the Renewable Energy Credits transfeITed to Buyer to be tracked in WREGIS will be taken prior to the first delive1y under this Agreement.
ARTICLE 5: TAXES
5.1 Allocation of Taxes and Charges. Seller shall pay or cause to be paid all Taxes on or with respect to the Facility or on or with respect to the sale and making available of Product to Buyer, that ai·e imposed on Product prior to its delive1y to Buyer at the time and place contemplated under this Agreement. Buyer shall pay or cause to be paid all Taxes on or with respect to the delive1y to and purchase by Buyer of Product that are imposed on Product at and after its delive1y to Buyer at the time and place contemplated under this Agreement ( other than withholding or other Taxes imposed on Seller's income, revenue, receipts or employees). If a Paiiy is required to remit or pay Taxes that ai·e the other Paiiy's responsibility hereunder, such Paiiy shall promptly pay the Taxes due and then seek and receive reimbursement from the other 39 for such Taxes. In the event any sale of Product hereunder is exempt from or not subject to any paiiicular Tax, Buyer shall provide Seller with all necessaiy documentation to evidence such exemption or exclusion within thirty (30) days after the Effective Date Buyer makes such claim.
Buyer shall indemnify, defend, and hold Seller haimless from any liability with respect to Taxes for which Buyer is responsible hereunder and from which Buyer claims it is exempt.
5.2 Cooperation. Each Paiiy shall use reasonable effo1is to implement the provisions of and administer this Agreement in accordance with the intent of the Patties to minimize all Taxes, so long as no Paiiy is materially adversely affected by such efforts. The Paiiies shall cooperate to minimize Tax exposure; provided, neither Paiiy shall be obligated to incur any financial or operational burden to reduce Taxes for which the other Paiiy is responsible hereunder without receiving due compensation therefor from the other Pa1iy. All Product delivered by Seller to Buyer hereunder shall be a sale made at wholesale, with Buyer reselling such Product.
5.3 Environmental Costs. Seller shall be solely responsible for:
(a) All Environmental Costs;
(b) All taxes, chai·ges or fees imposed on the Facility or Seller by a Governmental Authority for Greenhouse Gas emitted by or attributable to the Facility during the Delive1y Tenn;
(c)
Regulations, and
Seller's obligations listed under "Compliance Obligation" in the GHG ( d) All other costs associated with the implementation and regulation of Greenhouse Gas emissions (whether in accordance with the California Global Wanning Solutions Act of 2006, Assembly Bill 32 (2006) and the regulations promulgated thereunder, including the GHG Regulations, or any other federal, state or local legislation to offset or reduce any Greenhouse Gas emissions implemented and regulated by a Governmental Authority) with respect to the Facility and/or Seller.
ARTICLE 6: MAINTENANCE AND REPAIR OF THE FACILITY
6.1 Maintenance of the Facility.
(a) Seller shall, as between Seller and Buyer, be solely responsible for the operation, inspection, maintenance and repair of the Facility, and any po1tion thereof, in accordance with applicable Law and Prndent Operating Practices. Seller shall maintain and deliver maintenance and repair records of the Facility to Buyer's scheduling representative upon request.
(b) Seller shall promptly make all necessa1y repairs to the Facility, and any po1iion thereof, and take all actions necessaiy in order to provide the Product to Buyer in accordance with the te1ms of this Agreement.
6.2 Maintenance of Health and Safety. Seller shall take reasonable safety precautions with respect to the operation, maintenance, repair and replacement of the Facility. If Seller 40 becomes aware of any circumstances relating to the Facility that create an imminent risk of damage or injmy to any Person or any Person's property, Seller shall take prompt, reasonable action to prevent such damage or injmy and shall give Buyer's emergency contact identified in Exhibit N Notice of such condition. Such action may include disconnecting and removing all or a po1iion of the Facility, or suspending the supply of Facility Energy to the Delive1y Point.
6.3 Shared Facilities. The Paiiies acknowledge and agree that ce1iain of the Shai·ed Facilities and Interconnection Facilities, and Seller's rights and obligations under the Interconnection Agreement, may be subject to ce1iain shared facilities and/or co-tenancy agreements to be entered into among Seller, the Transmission Provider, Seller's Affiliates, and/or third paiiies. Seller agrees that any agreements regai·ding Shai·ed Facilities (i) shall pennit Seller to perfo1m or satisfy, and shall not pmpo1i to liinit, Seller's obligations hereunder, (ii) shall provide for separate metering of the Facility; (iii) shall not limit Buyer's ability to receive Facility Energy up to the Interconnection Capacity Limit; (iv) shall provide that any other generating or energy storage facilities not included in the Facility but using Shai·ed Facilities shall not be included within the Facility's CAISO Resomce ID; and (v) shall provide that in the event of any discretionaiy allocation of cmiailment of output from generating or energy storage facilities using the Shai·ed Facilities shall not be allocated to the Facility.
6.4 Decommissioning Facility and Other Costs. Buyer shall not be responsible for any cost of decommissioning or demolition of the Facility or any environmental or other liability associated with the decominissioning or demolition of the Facility without regard to the timing or cause of the decominissioning or demolition. Seller agrees to indemnify, defend, and hold haimless, Buyer for any costs incmTed by Buyer if and to the extent that Seller's actions or inactions causes Buyer to become required, whether statutorily or othe1w ise, to beai· the cost of any decommissioning or demolition of the Facility or any environmental or other liability associated therewith, including, but not liinited to, any investigations, actions, suits, claims, demands, losses, liabilities, penalties, and expenses (including reasonable attorneys' fees) associated with clean-up costs and defense costs. The indemnity requirements set fo1ih in this Section shall smvive the te1mination of this Agreement.
6.5 Facility Safety Plan.
(a) Prior to Deliveiy Te1m. At least fo1iy-five (45) days prior to the Commercial Operation Date, Seller shall submit for Buyer's review a Facility Safety Plan, in the f01m of Exhibit L, describing Seller's plans to comply with the Safety Requirements as of and following the Commercial Operation Date. In the event Buyer provides Notice to Seller that the Facility Safety Plan is not acceptable to Buyer, then Buyer will identify the inconsistencies with the Safety Requirements in such Notice and Seller shall revise the Facility Safety Plan to address the inconsistencies identified by Buyer.
(b) Deliveiy Te1m. Throughout the Delive1y Te1m, Seller shall update the Safeguards and the Facility Safety Plan as required by Safety Requirements or as necessitated by a Safety Remediation Plan. Seller shall provide such updated Facility Safety Plan to Buyer within thiiiy (30) days of any such updates. Throughout the Delive1y Tenn, Buyer shall have the right to request Seller to provide its Facility Safety Plan, or po1iions thereof, and demonstrate its compliance with the Safety Requirements within thniy (30) days of Buyer's Notice. Throughout 41 the Delive1y Tenn, Seller shall timely resolve (i) any change in the nature, scope, or requirements of applicable Laws, Pennits, codes, standards, or regulations issued by Governmental Authorities which requires modifications to the Safeguards or Facility Safety Plan, and (ii) any material change to the manufacturer's guidelines that requires modification to equipment or the Operating Restrictions.
(c) Repo1i ing Serious Incidents. Seller shall provide Notice of a Serious Incident to Buyer within five (5) Business Days of occmTence. The Notice of Serious Incident must include the time, date, and location of the incident, the circumstances smTounding the incident, the immediate response and recove1y actions taken, and a description of any impacts of the Serious Incident. Seller shall cooperate and provide reasonable assistance to Buyer with any investigations and inquiries by Governmental Authorities that arise as a result of the Serious Incident.
(d) Remediation.
(i) Seller shall resolve any Remediation Event within the Remediation Period. Within ten (10) days of the date of the first occmTence of any Remediation Event, Seller shall provide a Safety Remediation Plan to Buyer for Buyer's review. (ii) If the Remediation Event is an occmTence of an Exigent Circumstance with respect to the Facility or the Site, then Seller shall not deliver and Buyer will not accept, Product from the Facility until such Remediation Event is resolved in accordance with this Section 6.5.
(iii) Following the occmTence of any Remediation Event, Seller shall also provide an attestation to Buyer that incorporates infonnation, analysis, investigations or documentation, as applicable or as reasonably requested by Buyer, in a fonn and level of detail that is reasonably acceptable to Buyer.
(iv) Seller's failure to resolve a Remediation Event, other than due to the occmTence of a Force Majeure Event as described in this Section 6.5(d)(iv), by obtaining Buyer's written acceptance of the Attestation within the Remediation Period is a material breach of this Agreement; provided, Seller may request to extend the Remediation Period by up to ninety (90) days. Buyer shall not unreasonably withhold approval of such extension. Seller may request an additional extension of the Remediation Period of up to ninety (90) days, which Buyer may approve in its sole discretion. Except as the result of a Force Majeure Event, the Remediation Period will not continue for more than two-hundred and seventy (270) days from the first occmTence of the Remediation Event. The number of days of the Buyer Remediation Review Period shall not be included in calculating the number of days of the Remediation Period. The Collllllercial Operation Date shall not occur during a Remediation Period. If Seller provides Notice to Buyer, in compliance with Section 10.3, demonstrating that a Remediation Event is a Force Majeure Event, and that Seller's ability to resolve the Remediation Event is prevented by the Force Majeure Event, then the Remediation Period shall be extended on a day-for-day basis until Seller is no longer prevented from resolving the Remediation Event by the Force Majeure Event. This Section does not limit, reduce, or othe1wise modify any rights of remedies of Buyer under any other provisions of this Agreement.
42 ARTICLE 7: METERING
7.1 Metering. Seller shall measure the amount of Facility Energy using the Facility Meter, which will be subject to adjustment in accordance with applicable CAISO meter requirements and Prndent Operating Practices, including to account for Electrical Losses. Seller shall separately meter all Station Use. Mete1ing shall be consistent with the Metering Diagram in Exhibit 0 . The Facility Meter will be operated pursuant to applicable CAISO-approved calculation methodologies and maintained at Seller's cost. Each meter shall be kept under seal, such seals to be broken only when the Facility Meter is to be tested, adjusted, modified or relocated. In the event Seller breaks a seal, Seller shall notify Buyer as soon as practicable. In addition, Seller hereby agrees to provide all Facility Meter data to Buyer in a fo1m reasonably acceptable to Buyer, and consents to Buyer obtaining from CAISO the CAISO meter data directly relating to the Facility and all inspection, testing and calibration data and reports. Seller and Buyer shall cooperate to allow both Paiiies to retrieve the meter reads from the CAISO Mai·ket Results Interface - Settlements (MRI-S) web and/or directly from the CAISO meter(s) at the Facility.
7.2 Meter Verification. If Seller has reason to believe there may be a Facility Meter malfunction, or upon Buyer's reasonable request, Seller shall test the Facility Meter. The tests shall be conducted by independent third paiiies 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. If a Facility Meter is inaccurate, then it shall be promptly repaired or replaced. If a meter is inaccurate by more than one percent (1 % ) and it is not known when the Facility Meter inaccuracy commenced (if such evidence exists, such date will be used to adjust prior invoices), then the invoices covering the period of time since the last Facility Meter test shall be adjusted for the amount of the inaccuracy on the assumption that the inaccuracy persisted during one-half of such period if such adjustments are accepted by CAISO; provided, such period may not exceed twelve (12) months.
ARTICLE 8: INVOICING AND PAYMENT; CREDIT
8.1 Invoicing. Seller shall deliver an invoice to Buyer for Product, Replacement Product, and/or Replacement RA no later than the fifteenth (15th) day of each month for the previous calendar month. Each invoice shall reflect (a) records of metered data, including (i) CAISO metering and transaction data sufficient to document and verify the amount of Product delivered by the Facility for any Settlement Period during the preceding month, including the amount of Facility Energy as read by the Facility Meter, (ii) the amount of Replacement Product, or Replacement RA delivered to Buyer (if any), (iii) the calculation of Deemed Delivered Energy and Adjusted Energy Production, (iv) the LMP prices at the Delive1y Point for the prior month, and (v) the Contract Price applicable to such Product in accordance with Exhibit C; (b) access to any records, including invoices or settlement data from the CAISO, necessa1y to verify the accuracy of any amount; and ( c) be in a fo1mat reasonably specified by Buyer, covering the Product provided in the preceding month detennined in accordance with the applicable provisions of this Agreement. Buyer shall, and shall cause its Scheduling Coordinator to, provide Seller with all reasonable access (including, in real time, to the maximum extent reasonably possible) to any records, including invoices or settlement data from the CAISO, forecast data and other info1mation, all as may be necessa1y from time to time for Seller to prepare and verify the accuracy of all invoices.
43 8.2 Payment. Buyer shall make payment to Seller for Product (and any other amounts due) by wire ti·ansfer or ACH payment to the bank account provided on each monthly invoice.
Buyer shall pay undisputed invoice amounts within thirty (30) days after Buyer's receipt of Seller's invoice; provided, if such due date falls on a weekend or legal holiday, such due date shall be the next Business Day. Payments made after the due date will be considered late and will bear interest on the unpaid balance. If the amount due is not paid on or before the due date or if any other payment that is due and owing from one Party to another is not paid on or before its applicable due date, a late payment charge shall be applied to the unpaid balance and shall be added to the next billing statement. Such late payment charge shall be calculated based on an annual Interest Rate equal to the prime rate published on the date of the invoice in The Wall Su-eet Journal (or, if The Wall Sti·eet 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 accrne on the next succeeding Business Day.
8.3 Books and Records. To facilitate payment and verification, each Party shall maintain all books and records necessaiy for billing and payments, including copies of all invoices under this Agreement, for a period of at least two (2) yeai·s or as othe1wise required by Law. Upon fifteen (15) days' Notice to the other Party, either Paiiy shall be granted reasonable access to the accounting books and records within the possession or control of the other Paiiy pertaining to all invoices generated pursuant to this Agreement. Seller acknowledges that in accordance with California Government Code Section 8546. 7, Seller may be subject to audit by the California State Auditor with regard to Seller's perfonnance of this Agreement because the compensation under this Agreement exceeds $10,000.
8.4 Payment Adiustments; Billing Errors. Payment adjustments shall be made if Buyer or Seller discovers there have been good faith inaccuracies in invoicing that are not othe1wise disputed under Section 8.5 or an adjustment to an amount previously invoiced or paid is required due to a con ection of data by the CAISO, or there is detennined to have been a Facility Meter inaccuracy sufficient to require a payment adjustinent. If the required adjustinent 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 adjustinent amount to Buyer's next monthly invoice. Adjustinents in favor of either Buyer or Seller shall bear interest, until settled in full, in accordance with Section 8.2, accrning from the date on which the adjusted amount should have been due.
8.5 Billing Disputes. A Paiiy may, in good faith, dispute the con ectness of any invoice or any adjustment to an invoice rendered under this Agreement or adjust any invoice for any arithmetic or computational en or within twelve (12) months of the date the invoice, or adjustinent to an invoice, was rendered. In the event an invoice or po1iion thereof, or any other claim or adjustment ai·ising hereunder, is disputed, payment of the undisputed po1iion of the invoice shall be required to be made when due. Any invoice dispute or invoice adjustinent 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 accrned 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 8.4. Any dispute with respect to an invoice is waived if the other Pa1iy is not notified in accordance with this Section 8.5 44 within twelve (12) months after the invoice is rendered or subsequently adjusted, except to the extent any misinfonnation was from a third party not affiliated with any Party and such third party coITects its infonnation after the twelve-month period. If an invoice is not rendered within twelve (12) months after the close of the month during which peifonnance occmTed, the right to payment for such perfonnance is waived.
8.6 Netting of Payments. The Paiiies hereby agree that they shall dischai·ge mutual debts and payment obligations due and owing to each other under this Agreement on the same date through netting, in which case all ainounts owed by each Paiiy to the other Party for the purchase and sale of Product during the monthly billing period under this Agreement or othe1wise arising out of this Agreement, including any related dainages calculated pursuant to Exhibits B, G, and£, interest, and payments or credits, shall be netted so that only the excess amount remaining due shall be paid by the Pai·ty who owes it.
8.7 Seller's Development Security. To secure its obligations under this Agreement, Seller shall deliver the Development Security to Buyer within ten (10) Business Days after the Effective Date. Seller shall maintain the Development Secmity in full force and effect. Upon the eai·lier of (a) Seller's delive1y of the Perfonnance Security, or (b) sixty (60) days after tennination of this Agreement, Buyer shall return the Development Security to Seller, less the ainounts drawn in accordance with this Agreement.
8.8 Seller's Performance Security. To secure its obligations under this Agreement, Seller shall deliver Perfo1mance Security to Buyer on or before the Commercial Operation Date.
Seller shall maintain the Perfo1mance Security in full force and effect, and Seller shall within five (5) Business Days after any draw thereon replenish the Perfo1mance Security in the event Buyer collects or draws down any po1iion of the Perfonnance Security for any reason pe1mitted under this Agreement other than to satisfy a Te1mination Payment, until the following have occmTed: (a) the Delive1y Te1m has expired or te1minated eai·ly; and (b) all payment obligations of Seller due and payable under this Agreement, including compensation for penalties, Te1mination Payment, indemnification payments or other dainages ai·e paid in full (whether directly or indirectly such as through set-off or netting). Following the occuITence of both events, Buyer shall promptly return to Seller the unused po1iion of the Peifonnance Security.
8.9 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 ("Security Interest") in, and lien on (and right to net against), and assignment of the Development Security, Perfo1mance Security, any other cash collateral and cash equivalent collateral posted pursuant to Sections 8.7 and 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 in, and lien on (and right to net against), such collateral and any and all proceeds resulting therefrom or from the liquidation thereof.
45 Upon or any time after the occmTence of an Event of Default caused by Seller, an Early Tennination 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 portion of the Development Security or Perfo1mance Security, 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 Development Security and Perfonnance 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 Development Security or Perfo1mance Security; and (c) Liquidate all Development Security or Perfo1mance Security (as applicable) 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 Seller's obligations under this Agreement (Seller remains liable for any amounts owing to Buyer after such application), subject to Buyer's obligation to return any surplus proceeds remaining after such obligations are satisfied in full.
8.10 Seller Financial Information. If requested by Buyer, Seller shall deliver to Buyer (i) within one hundred twenty (120) days following the end of each of Seller's fiscal years, a copy of Seller's annual repoit containing unaudited consolidated financial statements for such fiscal year ( or audited consolidated financial statements for such fiscal year if othe1wise available) and (ii) within sixty (60) days after the end of each of its first three fiscal quarters of each fiscal year, a copy of Seller's qua1terly repo1t containing unaudited consolidated financial statements for such fiscal quaiter. fu all cases the statements shall be for the most recent accounting period and shall be prepared in accordance with Generally Accepted Accounting Principles; provided, however, that should any such statements not be available on a timely basis due to a delay in prepai·ation or ce1tification, such delay shall not be an Event of Default so long as Seller diligently pursues the preparation, ceitification and delive1y of the statements.
ARTICLE 9: NOTICES
9.1 Addresses for the Delivery of Notices. Any Notice required, pe1mitted, or contemplated hereunder shall be in writing, shall be addressed to the Paity to be notified at the address set fo1t h in Exhibit N or at such other address or addresses as a Paity may designate for itself from time to time by Notice hereunder.
9.2 Acceptable Means of Delivering Notice. Each Notice required, pe1mitted, or contemplated hereunder shall be deemed to have been validly se1ved, given or delivered as follows: (a) if sent by United States mail with proper first class postage prepaid, three (3) Business Days following the date of the postmark on the envelope in which such Notice was deposited in the United States mail; (b) if sent by a regularly scheduled overnight delive1y can-ier with delive1y fees either prepaid or an a1rnngement with such caITier made for the payment of such fees, the next 46 Business Day after the same is delivered by the sending Paiiy to such caiTier; (c) if sent by electrnnic communication (including email or other electronic means) at the time indicated by the time stamp upon delive1y and, if after 5:00 p.m., on the next Business Day; or (d) if delivered in person, upon receipt by the receiving Pa1iy. Notwithstanding the foregoing, Notices of outages or other scheduling or dispatch info1mation or requests, may be sent by electronic communication and shall be considered delivered upon successful completion of such transmission.
ARTICLE 10: FORCE MAJEURE
10.1 Definition.
(a) "Force Maieure Event" means any act or event that delays or prevents a Paiiy from timely perfo1ming all or a po1tion of its obligations under this Agreement or from complying with all or a po1tion of the conditions under this Agreement if such act or event, despite the exercise of commercially reasonable efforts, cannot be avoided by and is beyond the reasonable control (whether direct or indirect) of and without the fault or negligence of the Paiiy relying thereon as justification for such delay, nonperfo1mance, 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 Pai·ty relying thereon as justification for such delay, nonperfo1mance or noncompliance, a Force Majeure Event may include an act of God or the elements, such as flooding, lightning, hmTicanes, tornadoes, or ice stonns; explosion; fire; volcanic emption; flood; epidemic; landslide; mudslide; sabotage; terrorism; earthquake; or other cataclysmic events; an act of public enemy; wai·; blockade; civil insurrection; riot; civil disturbance; or strikes or other labor difficulties caused or suffered by a Paiiy or any third party except as set fo1th below; provided, the general existence of COVID-19 shall not be sufficient to prove the existence of a Force Majeure absent a showing of other facts and circumstances which in the aggregate establish that a Force Majeure as defined in Section 10.l(a) (other than the requirement that the event or circumstance was not anticipated as of the date the Agreement was agreed to) has occmTed.
(c) Notwithstanding the foregoing, the te1m "Force Maieure Event" does not include the following:
(i) Economic conditions or changes in Law that render a Paiiy's perfonnance of this Agreement at the Contract Price unprofitable or othe1wise uneconomic (including an increase in component or compliance costs for any reason, including foreign or domestic tai·iffs, Buyer's ability to buy Product 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 pe1mits 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 Paiiy to make payments when due under this Agreement, unless the cause of such inability is an event that would othe1wise constitute a Force Majeure Event as described above that disables physical or electronic facilities necessaiy 47 to transfer funds to the payee Paiiy;
(iv) A Cmiailment Order, except to the extent such Cmiailment Order is caused by a Force Majeure Event;
(v) Seller's inability to obtain sufficient labor, equipment, materials, or other resources to build or operate the Facility, including the lack of wind, sun or other fuel source of an inherently intennittent nature, except to the extent such inability is caused by a Force Majeure Event;
(vi) A str·ike, work stoppage or labor dispute limited only to any one or more of Seller, Seller's Affiliates, Seller's contractors, their subcontr·actors thereof or any other third pa1iy employed by Seller to work on the Facility; (vii) Any equipment failure except if such equipment failure 1s caused by a Force Majeure Event;
(viii) Events othe1wise constituting a Force Majeure Event that prevents Seller from achieving Construction Sta.ii or Commercial Operation of the Facility, except to the extent expressly pennitted as an extension under this Agreement; or (ix) Any action or inaction by any third pa1iy, including Transmission Provider, that delays or prevents the approval, construction or placement in service of any Interconnection Facilities or Network Upgrades, except to the extent.
10.2 No Liability If a Force Majeure Event Occurs. Except as provided in Section 4 of Exhibit B, neither Seller nor Buyer shall be liable to the other Pa1iy in the event it is prevented from perfonning its obligations hereunder in whole or in pali due to a Force Majeure Event. The Paiiy rendered unable to fulfill any obligation by reason of a Force Majeure Event shall take reasonable actions necessaiy to remove such inability with due speed and diligence. Nothing herein shall be constmed as pennitting that Pa1iy to continue to fail to perfonn after said cause has been removed. The obligation to use due speed and diligence shall not be inte1preted to require resolution of labor disputes by acceding to demands of the opposition when such course is inadvisable in the discretion of the Pai·ty having such difficulty. Neither Paiiy shall be considered in breach or default of this Agreement if and to the extent that any failure or delay in the Party's perfonnance of one or more of its obligations hereunder is caused by a Force Majeure Event The occmTence and continuation of a Force Majeure Event shall not suspend or excuse the obligation of a Pa1iy to make any payments due hereunder. Notwithstanding the foregoing, the occmTence and continuation of a Force Majeure Event shall not (a) suspend or excuse the obligation of a Paiiy to make any payments due hereunder, (b) suspend or excuse the obligation of Seller to achieve the Expected Constr11ction Sta1i Date or the Expected Commercial Operation Date beyond the extensions provided in Section 4 of Exhibit B, or (c) limit Buyer's right to declai·e an Event of Default pursuant to Section 11.1 (b )(ii) and receive a Damage Payment upon exercise of Buyer's remedies pursuant to Section 11.2.
10.3 Notice. In the event of any delay or nonperfonnance resulting from a Force Majeure Event, the Paiiy suffering the Force Majeure Event shall (a) promptly notify the other Paiiy in writing of the nature, cause, estimated date of commencement thereof, and the anticipated 48 extent of any delay or intenuption in perfo1mance, and (b) promptly notify the other Paiiy in writing of the cessation or tennination of such Force Majeure Event, all as known or estimated in good faith by the affected Pa1iy; provided, a Paiiy's failure to give timely Notice shall not affect such Pa1iy's ability to asse1t that a Force Majeure Event has occurred unless the delay in giving Notice materially prejudices the other Pa1iy.
10.4 Termination Following Force Majeure Event. If a Force Majeure Event has occmTed after the Commercial Operation Date that has caused either Paiiy to be wholly or partially unable to perfo1m its obligations hereunder in any material respect, and the impacted Paiiy has claimed and received relief from perfo1mance of its obligations for a consecutive twelve (12) month period, then the non-claiming Paiiy shall provide written Notice to the other Paiiy and Lender of its desire to te1minate this Agreement, after which Buyer, Seller and Lender shall consult in good faith for a period of sixty ( 60) days to attempt to agree upon amendments to this Agreement that would avoid a tennination. If the Parties and Lender do not reach agreement within such sixty (60)-day consultation period, then the non-claiming Paiiy may te1minate this Agreement upon Notice to the other Pa1iy. Upon any such te1mination, neither Paiiy shall have any liability to the other Pai·ty, save and except for those obligations specified in Section ARTICLE l(b), and Buyer shall promptly return to Seller any Perfo1mance Security then held by Buyer, less any amounts drawn in accordance with this Agreement.
ARTICLE 11: DEFAULTS; REMEDIES; TERMINATION
11.1 Events of Default. An "Event of Default" shall mean, (a) with respect to a Paiiy (the "Defaulting Party") that is subj ect to the Event of Default the occunence of any of the following:
(i) the failure by such Pai·ty 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 waiTanty made by such Pa1iy 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 ( or such longer additional period, not to exceed an additional sixty (60) days, if the Defaulting Paiiy is unable to remedy such default within such initial thniy (30)-day period despite exercising commercially reasonable effo1ts); (iii) the failure by such Paiiy to perfo1m any material covenant or obligation set fo1th in this Agreement and such failure is not remedied within thn·ty (30) days after Notice thereof;
(iv) such Paiiy becomes Bankmpt;
(v) such Pa1iy assigns this Agreement or any of its rights hereunder other than in compliance with Alticle 14, if applicable; or (vi) such Paiiy 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 49 consolidation, amalgamation, merger or transfer, the resulting, surviving or trnnsferee entity fails to assume all the obligations of such Party under this Agreement to which it or its predecessor was a pruiy by operation of Law or pursuant to an agreement reasonably satisfacto1y to the other Pruiy. (b) with respect to Seller as the Defaulting Pa1iy, the occmTence of any of the following:
(i) if at any time, Seller delivers or attempts to deliver Energy to the Delive1y Point for sale under this Agreement that was not generated by the Facility, except for qualifying Replacement Product;
(ii) the failure by Seller to achieve (A) achieve Construction Strut on or before the Guru·anteed Consti11ction Strut Date, or (B) Commercial Operation on or before the Commercial Operation Date Deadline;
(iii) if, in any single Conh'act Y eru·, the Adjusted Energy Production amount ( calculated in accordance with Exhibit G) for such period is less than sixty-five percent (65%) of the Expected Energy runount for such period;
(iv) [reserved];
(v) failure by Seller to satisfy the collateral requirements pursuant to Sections 8.7 or 8.8 within five (5) Business Days after Notice from Buyer, including the failure to replenish the Perfonnance Security amount in accordance with this Agreement in the event Buyer draws against it for any reason other than to satisfy a Tennination Payment; (vi) with respect to any outstanding Letter of Credit provided for the benefit of Buyer that is not then required under this Agreement to be canceled or returned, the failure by Seller to provide for the benefit of Buyer either (1) cash, or (2) a substitute Letter of Credit from a different issuer meeting the criteria set fo1t h in the definition of Letter of Credit, in each case, in the amount required hereunder within ten (10) Business Days after Seller receives Notice of the occunence of any of the following events:
(A) the issuer of the outstanding Letter of Credit shall fail to maintain a Credit Rating of at least A- by S&P or A3 by Moody's; (B) the issuer of such Letter of Credit becomes Bankmpt; (C) the issuer of the outstanding Letter of Credit shall fail to comply with or perfonn its obligations under such Letter of Credit and such failure shall be continuing after the lapse of any applicable grace period pennitted under such Letter of Credit; (D) the issuer of the outstanding Letter of Credit shall fail to honor a properly documented request to draw on such Letter of Credit; (E) the issuer of the outstanding Letter of Credit shall disaffnm, disclaim, repudiate or reject, in whole or in pa1t , or challenge the validity of, such Letter of Credit; 50 (F) such Letter of Credit fails or ceases to be in full force and effect at any time; or
(G) Seller shall fail to renew or cause the renewal of each outstanding Letter of Credit on a timely basis as provided in the relevant Letter of Credit and as provided in accordance with this Agreement, and in no event less than sixty (60) days prior to the expiration of the outstanding Letter of Credit.
11.2 Remedies; Declaration of Early Termination Date. If an Event of Default with respect to a Defaulting Paiiy shall have occun ed and be continuing, the other Paiiy ("Non-Defaulting Party") shall have the following rights:
(a) to send Notice, designating a day, no earlier than ninety (90) days after such Notice is deemed to be received, as an early tennination date of this Agreement ("Early Termination Date") that tenninates this Agreement (the "Terminated Transaction") and ends the Delive1y Tenn effective as of the Eai·ly Tennination Date; (b) to accelerate all amounts owing between the Paities, and to collect as liquidated damages (i) the Damage Payment, or (ii) the Tennination Payment, as applicable, in each case calculated in accordance with Section 11.3 below; ( c) to withhold any payments due to the Defaulting Paiiy under this Agreement; ( d) to suspend perfonnance; and
(e) to exercise any other right or remedy available at law or in equity, including specific perfonnance or injunctive relief, except to the extent such remedies are expressly limited under this Agreement; provided, payment by the Defaulting Paiiy of the Damage Payment or Tennination Payment, as applicable, shall constitute liquidated dainages and the Non-Defaulting Paiiy's sole and exclusive remedy for any Tenninated Transaction and the Event of Default related thereto.
11.3 Damage Payment; Termination Payment. If an Early T ennination Date has been declai·ed, the Non-Defaulting Party shall calculate, in a commercially reasonable manner, the Dainage Payment or Tennination Payment, as applicable, in accordance with this Section 11.3. (a) Dainage Payment Prior to Commercial Operation Date. If the Eai·ly Te1mination Date occurs before the Commercial Operation Date, then the Damage Payment shall be calculated in accordance with this Section 11.3(a).
(i) If Seller is the Defaulting Paiiy, then the Dainage Payment shall be owed to Buyer and shall be equal to the entire Development Security ainount and any interest accrned thereon. Buyer shall be entitled to immediately retain for its own benefit those funds held as Development Security and any interest accrned thereon, and any ainount of Development Security that Seller has not yet posted with Buyer shall be immediately due and payable by Seller to Buyer. There will be no ainounts owed to Seller. The Pa1ties agree that Buyer's damages in the event of an Early Termination Date prior to the Commercial Operation Date caused by 51 Seller's default would be difficult or impossible to detennine and that the damages set forth in this Section 11.3(a)(i) are a reasonable approximation of Buyer's haim or loss. (ii) If Buyer is the Defaulting Paiiy, then a Damage Payment shall be owed to Seller and shall equal (A) the sum of (i) Seller's Losses, which shall not include consequential, incidental, punitive, exempla1y, indirect, or business intenuption damages, plus (ii) without duplication of any costs or expenses covered by preceding clause, all actual, documented and verifiable Costs that have been actually incmTed, or become payable, by Seller between the Eai·ly Tennination Date and the date that Notice of the Damage Payment is provided by Seller to Buyer pursuant to Section 11.4 arising out of the te1mination of this Agreement, less (B) the fair market value (dete1mined in a commercially reasonable manner) of (i) all Seller's assets individually, or (ii) the entire Facility, whichever is greater on the Eai·ly Te1mination Date, regardless of whether or not any Seller asset or the entire Facility is actually sold or disposed of.
There will be no ainount owed to Buyer. The Parties agree that Seller's damages in the event of an Eai·ly Te1mination Date prior to the Commercial Operation Date caused by Buyer's default would be difficult or impossible to detennine and that the damages set forth in this Section
11.3(a)(ii) ai·e a reasonable approximation of Seller's ha1m or loss. (b) Tennination Payment On or After the Commercial Operation Date. The payment owed by the Defaulting Paiiy to the Non-Defaulting Pai·ty for a Te1minated Transaction occun ing after the Commercial Operation Date ("Termination Payment") shall be the aggregate of all Settlement Amounts plus any and all other ainounts due to or from the Non-Defaulting Pai·ty (as of the Eai·ly Te1mination Date) netted into a single amount, subject to the aggregate liability cap specified in Section 12.3. The Non-Defaulting Paiiy shall calculate, in a commercially reasonable manner, a Settlement Amount for the Te1minated Transaction as of the Early Te1mination Date. Third paiiies supplying infonnation for pmposes of the calculation of Gains or Losses may include, without limitation, dealers in the relevant markets, end-users of the relevant product, info1mation vendors and other sources of mai·ket info1mation. The Settlement Amount shall not include consequential, incidental, punitive, exemplaiy, indirect or business intenuption damages. Without prejudice to the Non-Defaulting Pai·ty's duty to mitigate, the Non-Defaulting Paiiy shall not have to enter into replacement transactions to establish a Settlement Amount. Each Paiiy agrees and acknowledges that (i) the actual damages that the Non-Defaulting Paiiy would incur in connection with a Te1minated Transaction would be difficult or impossible to predict with certainty, (ii) the Te1mination Payment described in this Section Error! Reference source not found.(b) is a reasonable and appropriate approximation of such d amages, and (iii) the Termination Payment described in this Section Error! Reference source not found.(b) is the exclusive remedy of the Non-Defaulting Paiiy in connection with a Tenninated Transaction but shall not othe1wise act to limit any of the Non-Defaulting Paiiy's rights or remedies if the Non-Defaulting Pa1iy does not elect a Tenninated Transaction as its remedy for an Event of Default by the Defaulting Party.
11.4 Notice of Payment of Termination Payment or Damage Payment. As soon as practicable after a T e1minated Transaction, but in no event later than sixty ( 60) days after the Early Tennination Date (or such longer additional period, not to exceed an additional sixty (60) days, if the Non-Defaulting Pai·ty is unable, despite using commercially reasonable effo1is, to calculate the Tennination Payment or Damage Payment, as applicable, within such initial sixty (60)-day period despite exercising commercially reasonable effo1is), Notice shall be given by the Non-Defaulting 52 Party to the Defaulting Party of the amount of the Damage Payment or Tennination Payment, as applicable, and whether the Tennination Payment or Damage Payment, as applicable, is due to or from the Non-Defaulting Paiiy. The Notice shall include a written statement explaining in reasonable detail the calculation of such amount and the sources for such calculation. The Tennination Payment or Damage Payment, as applicable, shall be made to or from the Non-Defaulting Pai·ty, as applicable, within ten (10) Business Days after such Notice is effective.
11.5 Disputes With Respect to Termination Payment or Damage Payment. If the Defaulting Pai·ty disputes the Non-Defaulting Party's calculation of the Tennination Payment or Damage Payment, as applicable, in whole or in paii, the Defaulting Paiiy shall, within five (5) Business Days ofreceipt of the Non-Defaulting Paiiy's calculation of the Tennination Payment or Damage Payment, as applicable, provide to the Non-Defaulting Pai·ty a detailed written explanation of the basis for such dispute. Disputes regai·ding the Termination Payment or Damage Payment, as applicable shall be detennined in accordance with Aliicle 15.
11.6 Limitation on Seller's Ability to Make or Agree to Third-Party Sales from the Facility after Early Termination Date. If the Agreement is terminated by Buyer prior to the Commercial Operation Date due to Seller's Event of Default, neither Seller nor Seller's Affiliates may sell, mai·ket or deliver any Product associated with or attributable to the Facility to a paiiy other than Buyer for a period of two (2) years following the Early Tennination Date due to Seller's Event of Default, unless prior to selling, mai·keting or delivering such Product, or ente1ing into the agreement to sell, market or deliver such Product to a pa1iy other than Buyer, Seller or Seller's Affiliates provide Buyer with a written offer to sell the Product on tenns and conditions materially similai· to the te1ms and conditions contained in this Agreement (including price), and Buyer fails to accept such offer within fo1iy-five (45) days of Buyer's receipt thereof. Neither Seller nor Seller's Affiliates may sell or transfer the Facility, or any pali thereof, or land rights or interests in the Site (including the interconnection queue position of the Facility) so long as the limitations contained in this Section 11.6 apply, unless the transferee agrees to be bound by the te1ms set forth in this Section 11.6 pursuant to a written agreement approved by Buyer. Seller shall indemnify and hold Buyer haimless from all benefits lost and other damages sustained by Buyer as a result of any breach by Seller of its covenants contained within this Section 11.6.
11. 7 Rights And Remedies Are Cumulative. Except where liquidated damages or other remedy ai·e explicitly provided as the exclusive remedy, the rights and remedies of a Paiiy pursuant to this Aliicle 11 shall be cumulative and in addition to the rights of the Paiiies othe1wise provided in this Agreement.
11.8 Mitigation. Any Non-Defaulting Paiiy shall be obligated to use commercially reasonable effo1is to mitigate its Costs, Losses and damages resulting from any Event of Default of the other Paiiy under this Agreement.
ARTICLE 12: LIMITATION OF LIABILITY AND EXCLUSION OF WARRANTIES.
12.1 No Consequential Damages. EXCEPT TO THE EXTENT PART OF (A) AN EXPRESS REMEDY OR MEASURE OF DAMAGES HEREIN, (B) AN ARTICLE 16
INDEMNITY CLAIM, (C) INCLUDED IN A LIQUIDATED DAMAGES CALCULATION, OR (D) RESULTING FROM A P ARTY'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, 53 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 FORESEEABLE OR NOT, ARISING OUT OF, OR IN CONNECTION WITH THIS AGREEMENT, BY STATUTE, IN TORT OR CONTRACT.
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. IF NO
REMEDY OR MEASURE OF DAMAGES IS EXPRESSLY PROVIDED HEREIN, THE OBLIGOR'S LIABILITY SHALL BE LIMITED TO DIRECT DAMAGES ONLY.
TO THE EXTENT ANY DAMAGES REQUIRED TO BE PAID HEREUNDER ARE LIQUIDATED, INCLUDING UNDER SECTIONS 3.9, 4.9, Error! Reference source not f ound., 11.2 AND 11.3, AND AS PROVIDED IN EXHIBIT B, EXHIBIT C, EXHIBIT G, AND
EXHIBIT P, 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 HA VE TO SPECIFIC PERFORMANCE WITH RESPECT TO ANY OBLIGATION OF THE OTHER PARTY UNDER THIS AGREEMENT. 54 ARTICLE 13: REPRESENTATIONS AND WARRANTIES; COVENANTS
13.1 Seller's Representations and Warranties. As of the Effective Date, Seller represents and wairnnts as follows:
(a) Seller is a Delaware limited liability company, duly organized, validly existing and in good standing under the laws of the jurisdiction of its fo1mation, and is qualified to conduct business in 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 perfo1m this Agreement and is not prohibited from entering into this Agreement or discharging and perfonning all covenants and obligations on its paii to be perfo1med under and pursuant to this Agreement, except where such failure does not have a material adverse effect on Seller's perfo1mance under this Agreement. The execution, delive1y and perfo1mance of this Agreement by Seller has been duly authorized by all necessa1y limited liability company action on the pali of Seller and does not and will not require the consent of any tmstee or holder of any indebtedness or other obligation of Seller or any other pa1iy to any other agreement with Seller. (c) The execution and delive1y of this Agi-eement, 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 pe1mits that have not yet been obtained by Seller, the documents of fo1mation of Seller or any outstanding tmst indenture, deed of tmst, m01igage, loan agreement or other evidence of indebtedness or any other agreement or instrument to which Seller is a pa1iy 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 tenns, 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 shall obtain and maintain any and all pe1mits and approvals necessaiy for the construction and operation of the Facility, including without limitation, environmental clearance under CEQA or other environmental law, as applicable, from the local jurisdiction where the Facility is or will be constmcted.
(f) Seller shall maintain Site Control throughout the Delive1y Te1m. (g) Neither Seller nor its Affiliates have received notice from or been advised by any existing or potential supplier or service provider that the disease designated COVID-19 or the related vims designated SARS-CoV-2 have caused, or are reasonably likely to cause, a delay in the construction of the Facility or the delive1y of materials necessaiy to complete the Facility, in each case that would cause the Commercial Operation Date to be later than the Expected Commercial Operation Date.
13.2 Buyer's Representations and Warranties. As of the Effective Date, Buyer represents and wanants as follows:
55 (a) Buyer is a joint powers authority, duly organized, validly existing and in good standing under the laws of the State of California and the mies, regulations and orders of the California Public Utilities Commission.
(b) Buyer has the power and authority to enter into and perfo1m this Agreement and is not prohibited from entering into this Agreement or discharging and perfonning all covenants and obligations on its pali to be perfo1med under and pursuant to this Agreement, except where such failure does not have a material adverse effect on Buyer's perfo1mance under this Agreement. The execution, delive1y and perfo1mance of this Agreement by Buyer has been duly authorized by all necessa1y action on the pali 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 delive1y of this Agreement, consUllllllation of the ti·ansactions 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, including but not limited to community choice aggregation, the Joint Powers Act, competitive bidding, public notice, open meetings, election, referendum, or prior appropriation requirements, the documents of fonnation of Buyer or any outstanding tiust indenture, deed of tiust, mortgage, loan agreement or other evidence of indebtedness or any other agreement or insti11ment 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 tenns, 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 is a "local public entity" as defined in Section 900.4 of the Government Code of the State of California, and as such any claims against Buyer shall be filed in accordance with the California Government Claims Act (Cal. Gov't Code§ 810 et. seq.).
13.3 General Covenants. Each Paiiy covenants that commencing on the Effective Date and continuing throughout the Conti·act Te1m:
(a) It shall continue to be duly organized, validly existing and in good standing under the laws of the jurisdiction of its f01mation and to be qualified to conduct business in 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 regulato1y authorizations necessaiy for it to legally perfo1m its obligations under this Agreement; and (c) It shall perfo1m its obligations under this Agreement in compliance with all tenns and conditions in its governing documents and in material compliance with any Law.
13.4 Seller Covenants. Seller covenants that collllllencing on the Effective Date and continuing throughout the Delive1y Tenn:
56 ( a) Seller agrees to install and maintain pennanent signage during the Delive1y Tenn at the Site displaying Buyer's logo, Seller's logo, and the name of the Facility. The sign shall be located on prope1iy frontage with visibility to the most populous roadway, subject to any local ordinance restrictions. The sign shall be large enough to be visible and legible from such roadway. No lighting is required. Buyer shall provide a design file for the sign. Location and final specifications for signage, including design and materials, are subject to Buyer's approval, not to be unreasonably withheld. Seller shall constmct and maintain the sign at Seller's sole expense, and Seller shall be responsible for obtaining any required pennits or approvals. The sign shall be installed within 30 days of the Commercial Operation Date.
ARTICLE 14: ASSIGNMENT
14.1 General Prohibition on Assignments. Except as provided in this Alticle 14, neither Paiiy may assign this Agreement or its rights or obligations under this Agreement, without the prior written consent of the other Paiiy, which consent shall not be unreasonably withheld, conditioned or delayed. Ally Change of Control of Seller (whether voluntaiy or by operation of law) will require prior written notice to Buyer no less than thiiiy (30) days prior to the effectiveness of such Change of Control, provided, that any transferee or successor entity to this Agreement resulting from a Change of Control must qualify as a Pennitted Transferee. Ally assignment made without the required written consent or written notice (as applicable), or in violation of the conditions to assignment set out below, shall be null and void. The assigning Pa1iy shall pay the other Pa1iy's reasonable expenses associated with the preparation, review, execution and delive1y of documents in connection with any assignment of this Agreement by the assigning Paiiy, including without liinitation reasonable attorneys' fees.
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 financing or refinancing of the Facility. fu connection with any financing or refinancing of the Facility by Seller, Buyer shall in good faith work with Seller and Lender to agree upon a consent to collateral assignment of this Agreement ("Collateral Assignment Agreement"). The Collateral Assignment Agreement must be in fonn and substance agreed to by Buyer, Seller and Lender, with such agreement not to be unreasonably withheld, and must include, ainong others, the following provisions:
(a) Buyer shall give Notice of an Event of Default by Seller to the Person(s) to be specified by Lender in the Collateral Assignment Agreement, before exercising its right to tenninate this Agreement as a result of such Event of Default; provided that such notice shall be provided to Lender at the time such notice is provided to Seller and any additional cure period of Lender agreed to in the Collateral Assignment Agreement shall not commence until Lender has received notice of such Event of Default;
(b) Lender will have the right to cure an Event of Default on behalf of Seller, only if Lender sends a written notice to Buyer before the later of (i) the expiration of any cure period, and (ii) ten (10) Business Days after Lender's receipt of such Event of Default notice from Buyer, indicating Lender's non-binding intention to cure on behalf of Seller. Lender shall have, commencing upon Buyer's receipt of the notice from Lender indicating Lender's intention to cure the Event of Default, a cure period equal to the cure period under this Agreement and any 57 additional cure periods agreed in the Collateral Assignment Agreement, up to a maximum of ninety (90) days ( or one hundred eighty (180) days in the event of a Bankrnptcy of Seller or any foreclosure or similar proceeding), within which to remedy or cure the Event of Default; (c) Lender will have the right to consent before any tennination of this Agreement which does not arise out of an Event of Default; (d) Lender 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;
( e) If Lender, directly or indirectly, takes possession of, or title to the Facility (including possession by a receiver or title by foreclosure or deed in lieu of foreclosure), Lender must assume all of Seller's obligations arising under this Agreement and all related agreements (subject to such limits on liability as are mutually agreed to by Seller, Buyer and Lender as set forth in the Collateral Assignment Agreement); provided that, before such assumption, if Buyer advises Lender that Buyer will require that Lender cure (or cause to be cured) any Event of Default existing as of the possession date in order to avoid the exercise by Buyer (in its sole discretion) of Buyer's right to tenninate this Agreement with respect to such Event of Default, then Lender at its option, and in its sole discretion, may elect to either:
(i) Cause such Event of Default to be cured, or
(ii) Not assume this Agreement;
(g) If Lender elects to sell or transfer the Facility (after Lender directly or indirectly, takes possession of, or title to the Facility), or sale of the Facility occurs through the actions of Lender (for example, a foreclosure sale where a third patty is the buyer, or othe1wise), then Lender must cause the transferee or buyer to assume all of Seller's obligations ai·ising under this Agreement and all related agreements as a condition of the sale or transfer. Such sale or transfer may be made only to an entity that meets the definition of Pennitted Transferee; and (h) Subject to Lender's cure of any Events of Defaults under the Agreement in accordance with Section 14.2(e), if (i) this Agreement is rejected in Seller's bankrnptcy or othe1wise tenninated in connection therewith Lender shall have the right to elect within fo1ty-five (45) days after such rej ection or tennination, to enter into a replacement agreement with Buyer having substantially the same tenns as this Agreement for the remaining te1m thereof, or (ii) if Lender or its designee, directly or indirectly, takes possession of, or title to, the Facility (including possession by a receiver or title by foreclosure or deed in lieu of foreclosure) after any such rejection or te1mination of this Agreement, promptly after Buyer's written request, Lender must itself or must cause its designee to promptly enter into a new agreement with Buyer having substantially the same terms as this Agreement for the remaining tenn thereof, provided that in the event a designee of Lender, directly or indirectly, takes possession of, or title to, the Facility (including possession by a receiver or title by foreclosure or deed in lieu of foreclosure), such designee shall be approved by Buyer, not to be unreasonably withheld.
14.3 Permitted Assignment by Seller. Seller may, without the prior written consent of Buyer, transfer or assign this Agreement to: (a) an Affiliate of Seller or (b) any Person 58 succeeding to all or substantially all of the assets of Seller (whether voluntaiy or by operation of law); if, and only if:
(i) the assignee is a Pennitted Transferee;
(ii) Seller has given Buyer Notice at least thirty (30) Business Days before the date of such proposed assignment; and
(iii) Seller has provided Buyer a written agreement signed by the Person to which Seller wishes to assign its interests that (x) provides that such Person will assume all of Seller's obligations and liabilities under this Agreement upon such ti·ansfer or assignment and (y) ce1tifies that such Person meets the definition of a Pennitted Transferee.
Except as provided in the preceding sentence, any assignment by Seller, its successors or assigns under this Section 14.3 shall be of no force and effect unless and until such Notice and agreement by the assignee have been received and accepted by Seller.
14.4 Buyer Financing Assignment. Buyer may assign this Agreement to a financing entity that will pre-pay all of Buyer's payment obligations under this Agreement with Seller's prior written consent, which consent shall not be unreasonably withheld, delayed or conditioned; provided that Seller reasonably determines that the tenns and conditions of such pre-payment aiTangements are satisfacto1y and do not adversely affect Seller or its aITangements with Lenders in any material respect.
ARTICLE 15: DISPUTE RESOLUTION
15.1 Governing Law. This Agreement and the rights and duties of the Paities hereunder shall be governed by and consti11ed, enforced and perfo1med 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 Paity waives its respective right to any jmy ti·ial with respect to any litigation arising under or in connection with this Agreement. [STC 17: Non-modifiable] The Paities agree that any suit, action or other legal proceeding by or against any Paity with respect to or ai·ising out of this Agreement shall be brought in the federal or state courts located in the State of California in a location to be mutually chosen by Buyer and Seller, or in the absence of mutual agreement, the County of San Francisco.
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 Paity identifying such dispute, the Patties shall meet, negotiate and attempt, in good faith, to resolve the dispute quickly and info1mally without significant legal costs. If the Paities ai·e unable to resolve a dispute ai·ising hereunder within thiity (30) days after Notice of the dispute, the Paities may pursue all remedies available to them at Law in or equity.
15.3 Attorneys' Fees. In any proceeding brought to enforce this Agreement or because of the breach by any Paity of any covenant or condition herein contained, the prevailing Paity shall be entitled to reasonable attorneys' fees (including reasonably allocated fees of in-house counsel) in addition to comt costs and any and all other costs recoverable in said action. 59 ARTICLE 16: INDEMNIFICATION
16.1 Indemnification.
(a) Seller agrees to indemnify, defend and hold hatmless Buyer and its Affiliates, directors, officers, attorneys, employees, representatives and agents ( collectively, the "Buyer's Indemnified Parties") from and against all third-patty claims, demands, losses, liabilities, penalties, and expenses (including reasonable attorneys' fees and expert witness fees), howsoever described, to the extent at·ising out of, resulting from, or caused by (i) Seller's breach of this Agreement (including inaccuracy of any Seller representation of watTanty made hereunder), (ii) a violation of applicable Laws by Seller or its Affiliates, including but not limited to violations of any laws in constmcting or operating the Facility, (iii) negligent or to1tious acts, en ors, or omissions by Seller or its Affiliates, or (iv) intentional acts or willful misconduct by Seller or its Affiliates, directors, officers, employees, or agents. (b) Buyer agrees to indemnify, defend and hold ha1mless Seller and its Affiliates, directors, officers, attorneys, employees, representatives and agents ( collectively, the "Seller's Indemnified Parties") from and against all third-patty claims, demands, losses, liabilities, penalties, and expenses (including reasonable attorneys' fees and expert witness fees), howsoever described, to the extent at·ising out of, resulting from, or caused by (i) Buyer's breach of this Agreement (including inaccuracy of any representation of wananty made hereunder), or (ii) negligent or willful misconduct of Buyer or its Affiliates, its directors, officers, employees, or agents in the perfo1mance of this Agreement that causes personal injmy or death to Persons or damage to the prope1ty of any third pat·ty that is not an Affiliate of Seller. (c) Seller shall indemnify, defend, and hold hatmless Buyer's fudemnified Patties, from any claim, liability, loss, injmy or damage arising out of, or in connection with Environmental Costs and any enviromnental matters associated with the Facility, including the storage, disposal and transpo1tation of Hazat·dous Materials, or the contamination of land, including but not limited to the Site, with any Hazat·dous Materials by or on behalf of the Seller or at the Seller's direction or agreement.
(d) Nothing in this Section ARTICLE 16 shall enlarge or relieve Seller or Buyer of any liability to the other for any breach of this Agreement. Neither Patty shall be indemnified for its damages resulting solely from its own 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.
16.2 Claims. Promptly after receipt by a Pat·ty of any claim or Notice of the commencement of any action, administrative, or legal proceeding, or investigation as to which an indemnity provided for in this Alticle 16 may apply, the fudemnified Patty shall notify the fudemnifying Pa1ty in writing of such fact. The fudemnifying Patty shall assume the defense thereof with counsel designated by the fudemnifying Pa1ty and satisfacto1y to the fudemnified Patty; provided, if the defendants in any such action include both the fudemnified Pat·ty and the fudemnifying Patty and the fudemnified Pa1ty shall have reasonably concluded that there may be legal defenses available to it which at·e different from or additional to, or inconsistent with, those available to the fudemnifying Patty, the fudemnified Patty shall have the right to select and be 60 represented by separate counsel, at the Indemnifying Party's expense, unless a liability insurer is willing to pay such costs. If the Indemnifying Party fails to assume the defense of a claim meriting indemnification, the Indemnified Party may at the expense of the Indemnifying Party contest, settle, or pay such claim; provided, settlement or full payment of any such claim may be made only following consent of the Indemnifying Paiiy or, absent such consent, written opinion of the Indemnified Pai·ty's counsel that such claim is meritorious or wanants settlement. Except as othe1wise provided in this Alticle 16, in the event that a Pai·ty is obligated to indemnify and hold the other Paiiy and its successors and assigns haimless under this Alticle 16, the amount owing to the Indemnified Paiiy will be the amount of the Indemnified Pa1iy's damages net of any insurance proceeds received by the Indemnified Paiiy following a reasonable effo1t by the Indemnified Paiiy to obtain such insurance proceeds.
16.3 Environmental Indemnity. Seller shall indemnify, defend and hold haimless Buyer, and any and all of its employees, officials and agents from and against any third pa1iy liability (including liability for claims, suits, actions, ai·bitration proceedings, administrative proceedings, regulato1y proceedings, losses, expenses or costs of any kind, whether actual, alleged or threatened, including legal counsel fees and costs, comt costs, interest, defense costs, and expe1t witness fees), where the saine arise out of, are a consequence of or are in any way attributable to, and or caused by (a) any Release on the Site caused by Seller or Seller's contractors or service providers or (b) any claim or legal proceeding pursuant to Environmental Law by any third paiiy with regard to any violation or alleged violation of any Environmental Laws by Seller or the Seller's contractors or service providers. For the pmposes hereof, (A) "Release" means any releasing, spilling, leaking, pumping, pouring, emitting, emptying, dischai·ging, injecting, escaping, leaching, disposing, or dumping into the environment of Hazardous Materials introduced to the Facility by Seller or Seller's contractors or service providers in violation of any Environmental Laws that are required to be investigated, remediated or othe1wise cleaned up by a Governmental Authority; and (B) "Environmental Laws" shall mean all federal, state, and local laws, statutes, ordinances, and regulations now or hereafter in effect, and in each case as amended, and any binding judicial or administrative interpretation thereof relating to the protection of human health, safety, the environment and natural resources (including ambient air, surface water, groundwater, wetlands, land, surface or subsurface strata, wildlife, aquatic species and vegetation), including laws and regulations relating to Releases of Hazai·dous Materials or othe1w ise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials.
ARTICLE 17: INSURANCE
17.1 Insurance.
(a) General Liability. Seller shall maintain, or cause to be maintained at its sole expense, commercial general liability insurance, including products and completed operations and personal injmy insurance, in a minimum amount of One Million Dollai·s ($1 ,000,000) per occurrence, and an annual aggregate of not less than Two Million Dollars ($2,000,000), endorsed to provide contractual liability in said amount, specifically covering Seller's obligations under this Agreement and including Buyer as an additional insured. Defense costs shall be provided as an additional benefit and not included within the limits of liability. 61 Such insurance shall name Buyer as an additional insured and contain standard cross-liability and severability of interest provisions.
(b) Employer's Liability Insurance. Seller, if it has employees, shall maintain Employers' Liability insurance with limits of not less than One Million Dollars ($1,000,000.00) for injmy or death occun ing as a result of each accident. With regard to bodily injmy by disease, the One Million Dollar ($1,000,000) policy limit will apply to each employee. ( c) Workers Compensation Insurance. Seller, if it has employees, shall also maintain at all times during the Contrnct Te1m workers' compensation and employers' liability insurance coverage in accordance with statuto1y amounts, with employer's liability limits of not less than One Million Dollars ($1 ,000,000.00) for each accident, injmy , or illness; and include a blanket waiver of subrogation.
( d) Business Auto Insurance. Seller shall maintain at all times during the Contract Te1m business auto insurance for bodily injmy and property damage with limits of One Million Dollars ($1,000,000) per occunence. 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 perfo1mance of the Agreement and shall name Buyer as an additional insured and contain standard cross-liability and severability of interest provisions. ( e) Pollution Liability. Seller shall maintain or cause to be maintained during the constrnction of the Facility prior to the Commercial Operation Date, Pollution Insurance in the amount of Two Million Dollars ($2,000,000) per occmTence and in the aggregate, including Seller (and Lender, if any) as additional named insureds. (f) Umbrella Liability Insurance. Seller shall maintain or cause to be maintained an umbrella liability policy with a limit of liability of Five Million Dollars ($5,000,000) per occurrence and in the aggregate. Such insurance shall be in excess of the General Liability, Employer's Liability, and Business Auto Insurance coverages. Seller may choose any combination of prima1y, excess or umbrella liability policies to meet the insurance limits required under Sections 17.l(a), 17.l(b) and 17.l(d) above. (g) Construction All-Risk Insurance. Seller shall maintain or cause to be maintained during the constr11ction of the Facility prior to the Commercial Operation Date, construction all-risk fonn prope1iy insurance covering the Facility during such constr11ction periods.
(h) Property Insurance. On and after the Commercial Operation Date, Seller shall maintain or cause to be maintained insurance against loss or damage from all causes under standard "all risk" prope1iy insurance coverage in amounts that are not less than the actual replacement value of the Facility; provided, however, with respect to prope1iy insurance for natural catastr·ophes, Seller shall maintain limits equivalent to a probable maximum loss amount dete1mined by a fnm with experience providing such detenninations. Such insurance shall include business intenuption coverage in an amount equal to twelve (12) months of expected revenue from this Agreement. Notwithstanding the foregoing, the requirements for ea1thquake and business intenuption insurance, including coverage, limits, te1ms, and duration, shall be as 62 required by Seller's senior lender, with such requirement by Seller's senior lender to be disclosed to Buyer.
(i) Seller's Pollution Liability.
(i) If the scope of Work involves areas of known pollutants or contaminants, pollution liability coverage will be required to cover bodily injmy , property damage, including clean-up costs and defense costs resulting from sudden, and accidental conditions, including the discharge, dispersal, release or escape of smoke, vapors, soot, fumes, acids, alkalis, toxic chemicals, hydrocarbons, liquids or gases, waste materials or other initants, contaminants or pollutants into or upon land, the atmosphere or any water course or body of water. (ii) The limit will not be less than two million dollars ($2,000,000.00) each occmrence for bodily injmy and property damage.
(iii) The policy will endorse Redwood Coast Energy Authority as an additional insmed.
(j) Subcontractor Insurance. Seller shall require all of its subcontractors to cany: (i) comprehensive general liability insmance with a combined single limit of coverage not less than One Million Dollars ($1,000,000); (ii) workers' compensation insurance and employers' liability coverage in accordance with applicable requirements of Law; and (iii) business auto insmance for bodily injmy and property damage with limits of one million dollars ($1,000,000) per occmrence. All subcontrnctors shall name Seller as an additional insmed to insmance carried pursuant to clauses (f)(i) and (f)(iii). All subcontractors shall provide a primaiy endorsement and a waiver of subrogation to Seller for the required coverage pmsuant to this Section ARTICLE 17(h).
(k) Evidence of Insmance. On or before the Constmction Stait Date, and upon annual renewal thereafter, Seller shall deliver to Buyer ce1tificates of insmance evidencing such coverage with insurers with ratings comparable to A-, VII or higher, that are authorized to do business in the State of California, and that are satisfacto1y to Buyer, in fo1m evidencing all coverages set foith above. Such ce1tificates shall specify that Buyer shall be given at least thi1ty (30) days prior Notice by Seller in the event of any material modification, cancellation or tennination of coverage. Such insmance shall be primaiy 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. The general liability, auto liability and worker's compensation policies shall be endorsed with a waiver of subrogation in favor of Buyer for all work perfo1med by Seller, its employees, agents and sub-contractors. (1) Failure to Comply with Insmance Requirements. If Seller fails to comply with any of the provisions of this Alticle 17, Seller, among other things and without restricting Buyer's remedies under the Law or othe1wise, shall, at its own cost and expense, act as an insmer and provide insmance in accordance with the tenns and conditions above. With respect to the required general liability, umbrella liability and commercial automobile liability insmance, Seller shall provide a cm-rent, full and complete defense to Buyer, its subsidiai·ies and Affiliates, and their respective officers, directors, shai·eholders, agents, employees, assigns, and successors 63