Agenda packet — San Diego Community Power Board of Directors, May 23, 2024 (part 2 of 2)

1.2 Rules of Interpretation. In this Agreement, except as expressly stated otherwise or unless the context otherwise requires:
(a) headings and the rendering of text in bold and italics are for convenience and reference purposes only and do not affect the meaning or interpretation of this Agreement; 18 (b) words importing the singular include the plural and vice versa and the masculine, feminine and neuter genders include all genders; (c) the words “hereof”, “herein”, and “hereunder” and words of similar import shall refer to this Agreement as a whole and not to any particular provision of this Agreement; (d) a reference to an Article, Section, paragraph, clause, Party, or Exhibit is a reference to that Section, paragraph, clause of, or that Party or Exhibit to, this Agreement unless otherwise specified;
(e) a reference to a document or agreement, including this Agreement means such document, agreement or this Agreement including any amendment or supplement to, or replacement, novation or modification of this Agreement, but disregarding any amendment, supplement, replacement, novation or modification made in breach of such document, agreement or this Agreement;
(f) a reference to a Person includes that Person’s successors and permitted assigns;
(g) the term “including” means “including without limitation” and any list of examples following such term shall in no way restrict or limit the generality of the work or provision in respect of which such examples are provided; (h) references to any statute, code or statutory provision are to be construed as a reference to the same as it may have been, or may from time to time be, amended, modified or reenacted, and include references to all bylaws, instruments, orders and regulations for the time being made thereunder or deriving validity therefrom unless the context otherwise requires; (i) in the event of a conflict, a mathematical formula or other precise description of a concept or a term shall prevail over words providing a more general description of a concept or a term;
(j) references to any amount of money shall mean a reference to the amount in United States Dollars;
(k) words, phrases or expressions not otherwise defined herein that (i) have a generally accepted meaning in Prudent Industry Practice shall have such meaning in this Agreement or (ii) do not have well known and generally accepted meaning in Prudent Industry Practice but that have well known and generally accepted technical or trade meanings, shall have such recognized meanings; and
(l) each Party acknowledges that it was represented by counsel in connection with this Agreement and that it or its counsel reviewed this Agreement and that any rule of construction to the effect that ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement.
(m) Buyer acknowledges that, as of the Effect Date, the Facility is (or will be) owned by two of Seller’s Affiliates (each, an “Owner”), one of which owns the Thermal Resource 19 and one of which will own the BESS Resource. Throughout the Contract Term Seller will maintain such agreements with the Owners and other instruments as are necessary for Seller to perform its obligations under this Agreement. References to Seller in this Agreement will include, as the context requires, Seller and/or the Owners.
(n) Notwithstanding anything to the contrary contained in this Agreement, for U.S. federal income tax purposes, the Parties intend that this Agreement will be treated as a service contract within the meaning of, and for the purposes of, Section 7701(e) of the Internal Revenue Code of 1986, as amended.

ARTICLE 2
TERM; COMMERCIAL OPERATION; OPTIMIZATION SERVICES

2.1 Contract Term.
(a) The term of this Agreement shall commence on the Effective Date and shall remain in full force and effect until the conclusion of the Delivery Term, subject to any early termination provisions and any contract term extension provisions set forth herein (“Contract Term”).
(b) Applicable provisions of this Agreement shall continue in effect after termination, including early termination, to the extent necessary to enforce or complete the duties, obligations or responsibilities of the Parties arising prior to termination. The confidentiality obligations of the Parties under Article 18 and all indemnity and audit rights and obligations shall remain in full force and effect for five (5) years following the termination of this Agreement.

2.2 Conditions Precedent. The Commercial Operation Date shall not occur until the following conditions have been satisfied:
(a) Seller has delivered to Buyer (i) a certificate from a Licensed Professional Engineer substantially in the form of Exhibit L and (ii) a certificate from a Licensed Professional Engineer substantially in the form of Exhibit M setting forth the Installed Capacity on the Commercial Operation Date;
(b) A Participating Generator Agreement and/or a Participating Load Agreement and a Meter Service Agreement for the BESS Resource between Seller and CAISO shall have been executed and delivered and be in full force and effect, and a copy of each such agreement delivered to Buyer;
(c) An Interconnection Agreement between Seller (or its Affiliate or a third party transmission entity, if a sharing arrangement permitted by this Agreement is in effect) and the PTO shall have been executed and delivered and be in full force and effect and a copy of the Interconnection Agreement delivered to Buyer;
(d) All applicable regulatory authorizations, approvals and permits required for operation of the BESS Resource have been obtained (or if not obtained, applied for and reasonably expected to be received within 90 days) and all conditions thereof that are capable of being satisfied on the Commercial Operation Date have been satisfied and shall be in full force and effect, and 20 Seller has delivered to Buyer an attestation certificate from an officer of Seller certifying to the satisfaction of this condition;
(e) Seller has obtained all real property rights, including Site Control, required for the operation of the BESS Resource during the Delivery Term, and Seller has provided evidence of such rights to Buyer;
(f) Insurance requirements for the Facility pursuant to Article 17 have been met, with evidence provided in writing to Buyer; and
(g) Seller has delivered the Performance Security to Buyer in accordance with Section 8.8; and
(h) Seller has paid Buyer for all amounts then owing under this Agreement, if any, including COD Delay Damages.

At least ninety (90) days prior to the Commercial Operation Date, Seller shall deliver Notice to Buyer of the anticipated Commercial Operation Date and the proposed Operating Procedures, which Operating Procedures shall be consistent with, and no less restrictive than, the technical, operational and decision-making parameters or procedures described in Exhibit H. The Parties shall meet periodically upon the written request of either Party, but in any event no less than once per Contract Year, to evaluate potential changes to the Operating Procedures.

2.3 Scheduling Services.

(b) During the Delivery Period, Seller’s designee under the SC Agreement shall be responsible for performing all obligations under this Agreement that are appropriate or required to be performed by a Scheduling Coordinator. Buyer shall provide guidance and direction directly to the Scheduling Coordinator to optimize the dispatch of the Facility and schedule natural gas, and Buyer’s instructions shall be controlling. During the Delivery Period, Seller shall take, or cause the Facility’s SC to take, all necessary steps to qualify itself and the Facility in such other manner identified and approved by the CAISO and CPUC that permits Seller to sell and deliver any and all Resource Adequacy Benefits and other Capacity Attributes to Buyer. In addition to the requirements of Exhibit N, Seller shall cause the Facility’s SC to comply, with all applicable CAISO Tariff provisions, CPUC Decisions and all other applicable rules, requirements or Laws, including any bidding of the Facility to meet any Must Offer Obligations, in order to deliver or maintain the right to deliver Resource Adequacy Benefits and other Capacity Attributes to Buyer. 21 (c) Seller and Buyer shall conduct meetings on a quarterly basis or as otherwise reasonably requested by Buyer to discuss the overall performance of the provider under the SC Agreement. Based on the information exchanged during such discussions, Seller shall use commercially reasonable efforts to implement any changes to the overall strategy or performance objectives identified in this meeting.
(d) If Buyer determines that the Scheduling Coordinator is not performing its obligations under the SC Agreement to Buyer’s reasonable satisfaction, Buyer shall have the right to request that Seller replace the Scheduling Coordinator. Following receipt of such Notice, Seller shall use reasonable commercial efforts to identify an alternate service provider and negotiate a new SC Agreement but shall not enter into the new SC Agreement until and unless Buyer has approved such agreement in writing, such approval not to be unreasonably withheld conditioned or delayed. Following such approval, Seller shall use reasonable commercial efforts to promptly terminate the existing SC Agreement such that the new SC Agreement starts on termination of the existing SC Agreement. Buyer shall be liable for the termination penalties under the SC Agreement, except to the extent arising due to the negligence or willful misconduct of Seller, provided, however that (i) Seller shall use reasonable commercial efforts to minimize any penalties and enforce any rights to terminate for cause and without liability to Buyer and (ii) if the existing SC Agreement is terminated at Buyer’s direction without cause, notwithstanding any provision to the contrary herein, Buyer’s maximum liability for any associated termination penalty shall not exceed an amount equal to the monthly recurring fees under SC Agreement for the six (6) month period following termination of the SC Agreement.

2.4 Forecasting Services.
(a)

(b) In connection with any bidding, dispatch or other decisions based on forecast market conditions, Seller shall be permitted to rely on any advice, recommendations and guidance received from the provider under the Forecasting Agreement. Buyer may provide guidance and direction directly to Seller concerning actions the Scheduling Coordinator should take to optimize the dispatch of the Facility, in which case Buyer’s instructions shall be controlling.

Seller shall have no liability to Buyer as a result of following instructions received from Buyer or following any advice, recommendations or guidance from the provider under the Forecasting Agreement except to the extent resulting from Seller’s gross negligence or intentional misconduct. (c) Seller and Buyer shall conduct meetings on a quarterly basis or as otherwise reasonably requested by Buyer to discuss the overall performance of the provider under the Forecasting Agreement. Based on the information exchanged during such discussions, Seller shall use commercially reasonable efforts to implement any changes to the overall strategy or 22 performance objectives identified in this meeting.

2.5 Financial Responsibility for Scheduling and Forecasting Services. (b) The Parties acknowledge and agree that Seller will not be directly performing SC services. Seller shall not be responsible for the financial results of Buyer’s dispatch instructions to the SC but shall be responsible for the SC’s failure to implement such instructions in accordance with the requirements of this Agreement, including Prudent Industry Practice and the requirements of the CAISO Tariff. Seller will use reasonable efforts to ensure that the SC Agreement has a provision identifying Buyer as a third-party beneficiary of the SC Agreement and entitling Buyer to have direct recourse against the SC for remedies, including breach of contract and indemnification.

ARTICLE 3

PURCHASE AND SALE

3.1 Purchase and Sale of Product. Subject to the terms and conditions of this Agreement, during the Delivery Term, Buyer will purchase all the Product associated with the Facility at the Contract Price, and Seller shall supply and deliver to Buyer all the Product associated with the Facility. During the Delivery Term, Buyer will have exclusive rights, subject to compliance with the Operating Procedures, to offer, bid, or otherwise submit the Product from the Facility for sale in the available markets, and retain and receive any and all related revenues. (a) Facility Energy. Buyer’s right to schedule Facility Energy shall not commence until the Energy Start Date and is limited to the maximum quantity of Energy that can be produced by the Energy Contract Quantity. Buyer may elect to schedule any combination of Dispatchable Energy and Discharging Energy, but the total quantity may not exceed the Energy Contract Quantity in any hour.
(b) Ancillary Services. Buyer’s right to schedule Ancillary Services and Flexible Ramping Product from the Thermal Resource shall not commence until the Energy Start Date and Buyer’s right to schedule Ancillary Services and Flexible Ramping Product from the BESS Resource shall not commence until the Commercial Operation Date. Further, Buyer’s right to schedule Ancillary Services and Flexible Ramping Product is limited to the Ancillary Services and Flexible Ramping Product that can be provided from Energy from the applicable resource under the CAISO Tariff without modifying the Facility and in no event greater than the Energy Contract Quantity. Such right specifically excludes any Ancillary Services and Flexible Ramping 23 Product that interfere or conflict with the ability to supply the Resources Adequacy Benefits.

Buyer may elect to schedule Ancillary Services and Flexible Ramping Product from any combination of Dispatchable Energy and Discharging Energy, but the total quantity may not exceed the quantity of Ancillary Services and Flexible Ramping Product that can be provided from the Energy Contract Quantity in any hour.
(c) Environmental Attributes. Seller shall own all Environmental Attributes associated with (i) the generation of electricity by the Thermal Resource and (ii) the Charging Energy.

3.2 Ownership of Standalone Energy Storage Incentives. Seller shall own and may assign or sell, in its sole discretion, all right, title and interest to any Standalone Energy Storage Incentives associated with or resulting from the development, installation, ownership or operation of the Facility or the production, sale, purchase or use of the Charging Energy or Discharging Energy, in each case that currently exist or as may become available due to any change in Law.

3.3 Capacity Attributes. Throughout the Delivery Term, Seller shall transfer to Buyer, and Buyer may in its sole discretion assign or sell all right, title and interest to any Capacity Attributes associated with or resulting from the development, installation, ownership or operation of the Facility or the production, sale, purchase or use of the Facility Energy, in each case that currently exist or as may become available due to any change in Law.

3.4 Energy Rate and Start Fee. During the Delivery Term, Buyer shall pay the Energy Rate to Seller for all Dispatchable Energy and the Start Fee for each Resource Start pursuant to the invoicing and payment provisions set forth in Article 8.

3.5 Reservation Payment. During each month of the Delivery Term, Buyer shall pay the monthly RA Reservation Payment and, following the Energy Start Date, the Energy Reservation Payment, to Seller pursuant to the invoicing and payment provisions set forth in Article 8.

3.6 Test Energy. To the extent any electricity is dispatched from the Facility prior to the Commercial Operation Date (“Test Energy”), dispatch of such Test Energy shall not be evidence that Commercial Operation has been achieved or that the BESS Resource has been placed in service.

3.7 Emissions.
24 3.8 Change in Law.
(a)
(the
“Compliance Expenditure Cap”);
(b) If the 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. (c) Buyer will have sixty (60) 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 all or some portion of the Compliance Costs that exceed the Compliance Expenditure Cap (such Buyer-agreed upon costs, the “Accepted Compliance Costs”), or (2) waive Seller’s obligation to take such Compliance Actions, or any part thereof for which Buyer has not agreed to reimburse Seller. (d) 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 Parties 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. (e) If Buyer does not pay the Compliance Costs in excess of the Compliance 25 Expenditure Cap, or if it is not possible for Seller to achieve compliance with a change in Law through the payment or incurrence of costs, then Seller shall be excused from the corresponding Compliance Actions under this Agreement and may, without liability to Buyer or any reduction in Buyer’s payment obligations, suspend performance under this Agreement, including obligations to offer, schedule or dispatch the Facility and any Products, to the extent performance is restricted by the change in Law.

ARTICLE 4

OBLIGATIONS AND DELIVERIES

4.1 Product Delivery. Subject to the provisions of this Agreement, during the Delivery Term:
(a) Seller shall supply and deliver the Product to Buyer, and Buyer shall accept and pay for the Product, in accordance with the terms of this Agreement; provided, however, that with respect to Facility Energy and any Ancillary Services, such Products shall be delivered into the CAISO markets directly in accordance with this Agreement. Notwithstanding anything herein to the contrary, Seller shall have no obligation to deliver any Resource Adequacy Benefits prior to the System RA Start Date, to deliver any Local RAR Attributes prior to the Local RA Start Date, or to make the BESS Resource available prior to the Commercial Operation Date. (b) Seller will be responsible for paying or satisfying when due any costs or charges imposed in connection with Station Power.
(c) Buyer shall be responsible for all costs, charges and penalties, if any, imposed in connection with: (i) the delivery of Charging Energy to the Delivery Point for the BESS Resource (including the cost of the Charging Energy itself and associated Electrical Losses), and (ii) the acceptance and transmission of Discharging Energy and Dispatchable Energy at and from the applicable Delivery Point, including without limitation, transmission costs and transmission line losses with regard to (i) and (ii). Charging Energy, Discharging Energy, Dispatchable Energy, Resource Adequacy Benefits and other Products will be Scheduled and, as applicable, delivered to the CAISO by the Scheduling Coordinator.

4.2 Transfer of Resource Adequacy Benefits.
(a) Seller shall transfer the Resource Adequacy Benefits and, if applicable, Replacement RA from Replacement Units (the “RA Product”) to Buyer by submitting Supply Plans to CAISO for the Shown Unit(s).
(b) Seller shall cause all Supply Plans to meet and be filed in conformance with the requirements of the CPUC and the CAISO Tariff. Seller shall submit, or cause the Shown Unit’s SC to submit, on a timely basis with respect to each applicable Showing Month, Supply Plans in accordance with the CAISO Tariff and CPUC requirements to identify and confirm the RA Product delivered in accordance with Buyer’s instructions for each Showing Month of the Delivery Term.
(c) If CAISO rejects the Supply Plan or the Resource Adequacy Plan with respect to any part of the RA Product for the Facility in any Showing Month, the Parties shall 26 confer, make such corrections as are necessary for acceptance, and resubmit the corrected Supply Plan for validation before the applicable deadline for the Showing Month. (d) The RA Product is received when the CIRA Tool shows that the Supply Plan submitted in compliance with Buyer’s instructions, including Buyer’s instructions to withhold all or part of the RA Product for such Showing Month, has been accepted for the RA Product from the Shown Unit(s) by CAISO. Seller has failed to transfer the RA Product under this Section 4.2 if (i) Buyer has elected to submit the RA Product from the Shown Unit(s) in its Resource Adequacy Plan and such submission is accepted by the CPUC and the CAISO but the Supply Plan and Resource Adequacy Plan are not matched in the CIRA Tool and are rejected by CAISO due to the acts or omissions of Seller notwithstanding performance of the Parties’ obligations in Section

4.2(c) or (ii) Seller fails to submit the volume of RA Product for any Showing Month in such amount as instructed by Buyer for the applicable Showing Month. Seller will not have failed to properly transfer the RA Product if Buyer fails or chooses not to submit the Shown Unit(s) and the RA Product in its Resource Adequacy Plan with the CPUC or CAISO. (e) Hold-Back Capacity, if any, is deemed RA Product received by Buyer, unless utilized under Section 4.5 as Substitute Capacity, then RA Product is considered received according to the requirements therein.
(f) To the extent Seller reduces deliveries of Product pursuant to Section 4.8 prior to the Facility being included in the applicable Supply Plan and does not elect to provide Replacement RA, Buyer shall be responsible for the costs associated with procuring Substitute Capacity to the extent Buyer directs Seller to include the Facility in the applicable Supply Plan.

To the extent Seller reduces deliveries of Product either pursuant to Section 4.8 or otherwise after the Facility is included in the applicable Supply Plan Seller shall be responsible for the costs associated with procuring Substitute Capacity.

4.3 Seller’s Option To Provide Alternate Capacity. If Seller is unable to provide the Resource Adequacy Benefits from the Facility for a Showing Month for any reason, including, without limitation, as provided in Section 4.8, then Seller may, at no cost to Buyer, provide Buyer with Replacement RA from one or more replacement units having the same Capacity Attributes as the Facility (each such unit, a “Replacement Unit”) in an amount such that the total amount of RA Product provided to Buyer from the Facility and any Replacement Unit(s) for each Showing Month is not more than the RA Contract Quantity, provided that in each case:
(a) Seller shall notify Buyer in writing of its intent to provide Replacement RA and shall identify the proposed Replacement Units from which such Replacement RA shall be provided no later than the Notification Deadline for Buyer’s Compliance Showings related to such Showing Month;
(b) The proposed Replacement Units must (i) be accepted by the CAISO, and (ii) otherwise satisfy the requirements of this Agreement; (c) Seller shall, or shall cause the SC to submit, a Supply Plan for each Showing Month and, if applicable, annual filing, no later than the Notification Deadline for Buyer’s Compliance Showings;
27 (d) If Seller does not comply with the requirements of Sections 4.3(a), (b) and (c) for the applicable Showing Month and, if applicable, annual filing, then any such Replacement Units shall not be deemed a Replacement Unit for purposes of this Agreement for that Showing Month; and
(e) The designation of any Replacement Unit(s) by Seller shall be subject to Buyer’s prior written approval, which shall not be unreasonably withheld, conditioned or delayed. (f) In no event shall a Replacement Unit utilize coal or coal materials as a source of fuel. A Replacement Unit must be a specific resource that is connected directly to the CAISO-controlled grid or be under the operational control of CAISO. A Replacement Unit may not be an unspecified import.
(g) Once Seller has identified in writing any Replacement Units that meet the requirements of this Section 4.3 and Buyer has approved such Replacement Units as consistent with this Agreement, then any such Replacement Units shall be deemed a Shown Unit for purposes of this Agreement for that Showing Month. Buyer’s approval of a Replacement Unit as to a given Showing Month shall not be construed as approval of such Replacement Unit for any subsequent Showing Month.

4.4 Buyer’s Re-Sale of RA Product.
(a) Buyer may re-sell all or part of the RA Product; provided that any such re-sale must not increase Seller’s obligations hereunder other than as set forth in this Section 4.4. For any such resale, the Resource Adequacy Plan of Buyer as used herein will refer to the Resource Adequacy Plan of the Subsequent Buyer. Seller shall, or shall cause the Shown Unit’s SC, to follow Buyer’s instructions with respect to providing such resold RA Product to Subsequent Buyers, to the extent such instructions are consistent with Seller’s obligations under this Agreement. Seller shall, and shall cause the Shown Unit’s SC, to take all commercially reasonable actions and execute all documents or instruments reasonably necessary to allow such Subsequent Buyers to use such resold RA Product in a manner consistent with Buyer’s rights under this Agreement. If Buyer incurs any liability to a Subsequent Buyer due to the failure of Seller or the Shown Unit’s SC to comply with this Agreement, Seller will be liable to Buyer for the amounts Seller would have owed Buyer under this Agreement if Buyer had not resold the RA Product. (b) Buyer shall notify Seller in writing of any resale of RA Product and the Subsequent Buyer no later than two (2) Business Days before the deadline for the Compliance Showing for each Showing Month for which Buyer has resold the RA Product. Buyer shall notify Seller of any subsequent changes or further resales no later than two (2) Business Days before the deadline for the Compliance Showing for each Showing Month for which Buyer has resold the RA Product.
(c) If CAISO or CPUC develops a centralized capacity market, Buyer will have exclusive rights to direct the Seller or the Shown Unit’s SC to offer, bid, or otherwise submit the RA Product for re-sale into such market, and Seller and the Shown Unit’s SC shall comply with the Buyer’s direction and Buyer shall retain and receive all revenues from such re-sale. (d) Buyer shall have the exclusive right to direct the Seller or the Shown Unit’s 28 SC to offer, bid, or otherwise submit the RA Product into the CAISO Competitive Solicitation Process (CSP) for CPM Capacity. Seller and the Shown Unit’s SC shall comply with the Buyer’s direction and, to the extent that the CAISO designates the RA Product as CPM Capacity, Buyer shall be entitled to retain and receive the CPM Capacity Payment. Unless otherwise instructed by Buyer, (i) Seller shall not, and shall cause the Shown Unit’s SC to not, offer any portion of the RA Product to CAISO as CPM Capacity and (ii) if CAISO designates any portion of the RA Product as CPM Capacity, then Seller shall, and shall cause the Shown Unit’s SC to, promptly (and in any event within one (1) Business Day of the time Seller receives notification from CAISO) notify Buyer of such designation, and if CAISO makes such a designation, Seller shall not, and shall cause the Shown Unit’s SC to not, accept any such designation by CAISO unless and until Buyer has agreed to accept such designation.

4.5 Hold-Back and Substitute Capacity.
(a) No later than three (3) Business Days before the relevant deadline for the initial Compliance Showing with respect to a particular Showing Month, Buyer may request in writing that Seller not list, or cause the Shown Unit’s SC not to list, in the Shown Unit’s Supply Plan a portion or all of the RA Product for such Showing Month (“Hold-Back Capacity”). The amount of RA Product that is the subject of Buyer’s request for Hold-Back Capacity shall be deemed RA Product received by Buyer consistent with Section 4.2 for purposes of calculating the payments due hereunder, unless utilized under Section 4.5(b) as Substitute Capacity, then RA Product is considered received according to the requirements therein. Seller shall, or shall cause the Shown Unit’s SC to, comply with Buyer’s request under this Section 4.5. (b) In any Showing Month in which Buyer has designated Hold-Back Capacity, Buyer may request, in writing, that Seller make the Hold-Back Capacity available for Buyer’s use as Substitute Capacity within the respective Showing Month (“Substitute Capacity Request”) with the following schedule:
(i) For Buyer’s Substitute Capacity Requests that are to be scheduled with CAISO prior to the Showing Month (e.g., through the CAISO RA Substitute Capacity Assessment), the Substitute Capacity Request shall be received by Seller at least two (2) Business Days prior to the applicable CAISO scheduling deadline. Seller shall, or shall cause the Unit’s Scheduling Coordinator to, comply with Buyer’s request under this Section 4.5(b), provided that to the extent Seller is unable to provide the requested Substitute Capacity from the Facility due to a Thermal Planned Outage or a Forced Outage, Seller shall not have any liability for such failure. (ii) For Buyer’s Substitute Capacity Requests that are to be scheduled with CAISO after the commencement of the Showing Month, the Substitute Capacity Request shall be received by Seller at least five (5) Business Days before Buyer submits its Substitute Capacity in the CIRA Tool. Seller shall, or shall cause the Replacement Unit’s Scheduling Coordinator to, comply with Buyer’s request under this Section 4.5(b), provided that to the extent Seller is unable to provide the requested Substitute Capacity from the Facility due to a Thermal Planned Outage or a Forced Outage, Seller shall not have any liability for such failure.

4.6 Gas Supply. Seller shall be responsible for the supply of natural gas for the Thermal Resource in accordance with Exhibit O.
29 4.7 Charging Energy Management.
(a) Generally. Buyer shall be solely responsible, at its sole cost, for procuring Charging Energy. Buyer shall be solely responsible, at its sole cost, for arranging transmission and wheeling required to deliver Charging Energy to the Delivery Point for the BESS Resource and to accept Discharging Energy at the Delivery Point for the BESS Resource. Except as expressly set forth in this Agreement, including Sections 4.7(c) and (e) and Section 4.11(b), Buyer shall be responsible for paying all CAISO costs and charges associated with charging of the BESS Resource. If CAISO rules or protocols become inconsistent with such understanding, the Parties shall reasonably coordinate to amend or modify this Agreement to carry out the intent hereof, such agreement not to be unreasonably delayed, conditioned or withheld. (b) Charging Notices. The BESS Resource will have the capability to be charged seven (7) days per week and twenty-four (24) hours per day (including holidays), through Charging Notices sent electronically, provided, that the right to issue Charging Notices is subject to the requirements and limitations set forth in this Agreement including the Operating Procedures; provided, however, that the sole and exclusive remedy for any failure of the BESS Resource to be available is the Availability Adjustment Factor. Each Charging Notice issued in accordance with this Agreement will be effective unless and until the Buyer or CAISO modifies such Charging Notice by providing Seller with an updated Charging Notice. Seller shall comply with all Charging Notices, subject to the requirements and limitations set forth in this Agreement. Each Charging Notice issued in accordance with this Agreement will be effective unless and until such Charging Notice is modified with an updated Charging Notice (including as automatically updated in accordance with the definition of Charging Notice). Notwithstanding the foregoing, Buyer shall be solely responsible for causing sufficient Charging Notices to be issued to (i) support any Discharging Notices and (ii) ensure the eligibility of the Resource Adequacy Benefits for purchase and sale under the CAISO market rules, and (iii) otherwise participating in any CAISO markets. (c) No Unauthorized Charging. Seller shall not charge the BESS Resource during the Delivery Term other than pursuant to a valid Charging Notice, or in connection with a Storage Capacity Test, or pursuant to a notice from CAISO. If, during the Contract Term, Seller (i) charges the BESS Resource to a Stored Energy Level greater than the Stored Energy Level provided for in the Charging Notice or (ii) charges the BESS Resource in violation of the first sentence of this Section 4.7(c), then (x) Seller shall be responsible for all Energy costs associated with such charging of the BESS Resource, (y) Buyer shall not be required to pay for such Energy, and (z) Buyer shall be entitled to discharge such Energy and entitled to the Product associated with discharging such Energy.
(d) Discharging Notices. Buyer will have the right to discharge the BESS Resource seven (7) days per week and twenty-four (24) hours per day (including holidays), by providing Discharging Notices to Seller electronically, and subject to the requirements and limitations set forth in this Agreement, including the Operating Procedures provided, however, that the sole and exclusive remedy for any failure of the BESS Resource to be available is the Availability Adjustment Factor. Seller shall comply with all Discharging Notices, subject to the requirements and limitations set forth in this Agreement. Each Discharging Notice issued in accordance with this Agreement will be effective unless and until Buyer or CAISO modifies such Discharging Notice by providing Seller with an updated Discharging Notice. 30 (e) No Unauthorized Discharging. Seller shall not discharge the BESS Resource during the Delivery Term other than pursuant to a valid Discharging Notice, or in connection with a Storage Capacity Test, or pursuant to a notice from the CAISO. If, during the Delivery Term, Seller (i) discharges the BESS Resource other than as provided for in the Discharging Notice or (ii) discharges the BESS Resource in violation of the first sentence of this Section 4.7(e), then (x) Seller shall be responsible for all Energy costs associated with such discharging of the BESS Resource, (y) Buyer shall not be required to pay for the Charging Energy that was discharged, and (z) Buyer shall be entitled to the Product associated with such discharge. (f) Scheduling Charging Energy and Discharging Energy. Seller (or Seller’s SC) shall schedule Charging Energy and Discharging Energy in accordance with the Charging Notices and Discharging Notices, subject to the requirements of this Agreement. In the event that Seller (or Seller’s SC) fails to schedule the Charging Energy or Discharging Energy in accordance with Buyer’s instructions and the requirements of this Agreement, the payment amounts owed to Buyer by Seller shall equal the net revenue Buyer would have received had Seller (or Seller’s SC) properly Scheduled the Charging Energy or Discharging Energy, as applicable. Payment of such amount shall be Seller’s sole and exclusive liability for any failure to schedule the Charging Energy or Discharging Energy, except as provided in Exhibit N. (g) Coordination Regarding Commissioning and Storage Capacity Tests. Prior to the Commercial Operation Date, Buyer shall have no rights to issue or cause the BESS Resources to be charged or discharged. Seller shall have exclusive rights to test, charge and discharge the BESS Resource. Seller is responsible to procure, at its own cost, any Energy required for commissioning purposes and to arrange to discharge such Energy into the grid. Seller shall be entitled to all CAISO revenues and other amounts paid by CAISO in respect of the BESS Resource testing for periods prior to the Commercial Operation Date. Both prior to and after the Commercial Operation Date, (i) Buyer shall reasonably coordinate and cooperate with Seller with respect to BESS Resource commissioning and Storage Capacity Tests, and (ii) Seller shall reasonably coordinate and cooperate with Buyer with respect to BESS Resource commissioning and Storage Capacity Tests so as to minimize direct and opportunity costs to the Buyer associated with such activities.

4.8 Reduction in Deliveries.
(a) Facility Maintenance. Seller will deliver to Buyer the expected schedule for performing maintenance on the Facility in accordance with Exhibits G-1 and G-2. Seller shall be permitted to reduce deliveries of Product during a BESS Planned Outage or Thermal Planned Outage.
(b) Unplanned Outage. Seller shall be permitted to reduce deliveries of Product during any Unplanned Outage.
(c) Force Majeure Event. Seller shall be permitted to reduce deliveries of Product during any Force Majeure Event.
(d) Health and Safety. Seller shall be permitted to reduce deliveries of Product as necessary to maintain health and safety pursuant to Section 6.2. 31 4.9 RA Availability.
(a) During the Delivery Term, the Facility shall maintain a Monthly RA Availability during each month of no less than the Guaranteed RA Availability, which Monthly RA Availability shall be calculated in accordance with Exhibit F. (b) If the Monthly RA Availability during any month is less than the Guaranteed RA Availability, then Buyer’s payment for the Product shall be calculated by reference to the RA Availability Adjustment Factor as determined in accordance with Exhibit F. (c) Subject to Section 4.18, the sole and exclusive remedy for any failure of the Facility to provide Resource Adequacy Benefits is the RA Availability Adjustment Factor.

Buyer shall be solely responsible for procuring those Resource Adequacy Benefits that the Facility fails to provide under this Agreement.

4.10 Storage Availability.
(a) During the Delivery Term, the Facility shall maintain a Monthly Storage Availability during each month of no less than the Guaranteed Storage Availability, which Monthly Storage Availability shall be calculated in accordance with Exhibit E. (b) If the Monthly Storage Availability during any month is less than the Guaranteed Storage Availability, then Buyer’s payment for the Product shall be calculated by reference to the Availability Adjustment Factor (as determined in accordance with Exhibit E).

4.11 Storage Capacity Tests.
(a) Prior to the Commercial Operation Date, Seller shall schedule and complete a Storage Capacity Test in accordance with Exhibit D. Thereafter, Seller and Buyer shall have the right to run retests of the Storage Capacity Test in accordance with Exhibit D. (b) Buyer shall have the right to send one or more representative(s) to witness all Storage Capacity Tests. Alternatively, to the extent that any Storage Capacity Tests are done remotely, and no representatives are needed on Site, Seller shall arrange for both Parties to have access to all data and other information arising out of such tests. Buyer shall be responsible for all costs, expenses and fees payable or reimbursable to its representative(s) witnessing any Storage Capacity Test. For any Storage Capacity Tests initiated by Seller, Seller shall (i) not be entitled to the payment for associated Charging Energy, (ii) be liable for all CAISO costs and charges for associated Charging Energy and (iii) be entitled to any CAISO revenues associated with Discharging Energy. For any Storage Capacity Tests initiated by Buyer, Buyer shall (x) procure the associated Charging Energy, (y) be liable for all CAISO costs and charges for the associated Charging Energy, and (z) be entitled to any CAISO revenues associated with the associated Discharging Energy. No Charging Notices or Discharging Notices shall be issued during any Storage Capacity Test except as reasonably requested by Seller or Buyer to implement the applicable test.
(c) Following each Storage Capacity Test, Seller shall submit a testing report in accordance with Exhibit D. If the Effective Discharge Capacity determined pursuant to a Storage 32 Capacity Test varies from the then current Energy Contract Quantity, as applicable, then the Effective Discharge Capacity determined pursuant to a Storage Capacity Test (not to exceed the initial Energy Contract Quantity set forth on the Cover Sheet) shall become the new Energy Contract Quantity at the beginning of the day following the completion of the test for all purposes under this Agreement.

4.12 Efficiency Guaranty. On a monthly basis, if the Efficiency Rate of the BESS Resource is less than the Guaranteed Efficiency Rate, Seller shall reimburse Buyer for the incremental cost of purchasing Charging Energy calculated in accordance with Exhibit C.

4.13 Heat Rate Guaranty. In the event the Heat Rate is higher than the Guaranteed Heat Rate, Seller will owe Buyer Heat Rate Liquidated Damages in accordance with Exhibit C.

4.14 Start, Run and Cycle Limits. Buyer may not exceed the Daily Start Limit or Annual Run Hour Limit of the Thermal Resource or the Annual Cycle Limit of the BESS Resource.

4.15 Interconnection Capacity. Throughout the Delivery Term, Seller shall have and maintain interconnection capacity available or dedicated (a) to the Thermal Resource that is no less than the RA Contract Quantity, and (b) to the BESS Resource that is no less than the Storage Contract Capacity, provided that such interconnection capacity may be maintained through a combination of rights under the Interconnection Agreement dedicated to the BESS Resource and under an Interconnection Agreement shared with the Thermal Resource. Seller shall be responsible for all costs of interconnecting the Thermal Resource and the BESS Resource to the Transmission System. Seller shall hold Buyer harmless from any penalties, imbalance energy charges, or other costs from CAISO or the Gas Distribution Utility or under this Agreement resulting from Seller’s breach of this Section 4.15. Buyer shall use commercially reasonable efforts to mitigate the damages from such breach.

4.16 Title and Risk of Loss. Notwithstanding any provision in this Agreement to the contrary, Buyer shall not have title or risk of loss related to any natural gas or Facility Energy.

4.17 Notice of Outages.
(a) Notice of Unplanned Outages. Seller shall notify Buyer promptly following the occurrence of an Unplanned Outage, or following Seller having knowledge that an Unplanned Outage will occur. Seller shall communicate to Buyer the estimated duration of an Unplanned Outage and use reasonable commercial efforts to update Buyer of any changes to the estimated direction thereof.
(b) Facility Availability. During the Delivery Term, Seller shall deliver to Buyer a schedule of the expected availability of the Facility on an hourly basis and shall update Buyer of a changes reasonably anticipated promptly following Seller’s determination that changes are required.

4.18 Resource Adequacy Failure
(a) RA Deficiency Determination. For each RA Shortfall Month, Seller shall 33 pay to Buyer the RA Deficiency Amount as liquidated damages, in each case, as the sole remedy for any RA Shortfall.
(b) RA Deficiency Amount Calculation. For each RA Shortfall Month, Seller shall pay to Buyer an amount (the “RA Deficiency Amount”) equal to 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 are imposed on Product prior to its delivery 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 delivery to and purchase by Buyer of Product that are imposed on Product at and after its delivery 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 any.

5.2 Cooperation. Each Party shall use reasonable efforts to implement the provisions of and administer this Agreement in accordance with the intent of the Parties to minimize all Taxes, so long as no Party is materially adversely affected by such efforts. The Parties shall cooperate to minimize Tax exposure; provided, however, that neither Party shall be obligated to incur any financial or operational burden to reduce Taxes for which the other Party is responsible hereunder without receiving due compensation therefor from the other Party. All Product delivered by Seller to Buyer hereunder shall be a sale made at wholesale, with Buyer reselling such Product.

ARTICLE 6

MAINTENANCE OF THE FACILITY

6.1 Maintenance of the Facility. Seller shall comply with Law and Prudent Industry Practice relating to the operation and maintenance of the Facility, the generation and sale of Product.
34 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 becomes aware of any circumstances relating to the Facility that create an imminent risk of damage or injury to any Person or any Person’s property, Seller shall take prompt action to prevent such damage or injury and shall give Notice to Buyer’s emergency contact identified on Exhibit J of such condition. Such action may include, to the extent reasonably necessary, disconnecting and removing all or a portion of the Facility, or suspending the supply of Energy, Dispatching Energy or Discharging Energy to Buyer.

6.3 Shared Facilities. The Parties acknowledge and agree that certain of the Interconnection Facilities, Seller’s rights and obligations under the Interconnection Agreement and Seller’s rights and obligations under transmission service agreements with a Transmission Provider, may be subject to certain shared facilities and/or co-tenancy agreements (“Shared Facilities Agreements”) to be entered into among two or more of Seller, the Participating Transmission Owner, Seller’s Affiliates, and/or third parties pursuant to which certain Interconnection Facilities, interconnection service and/or transmission service may be subject to joint ownership and/or shared maintenance and operation arrangements; provided that such Shared Facilities Agreements shall permit Seller to perform or satisfy, and shall not purport to limit, its obligations hereunder, including providing interconnection capacity for the Facility in an amount not less than the Energy Contract Quantity.

ARTICLE 7

METERING

7.1 Metering. Seller shall obtain and maintain a CAISO Resource ID for the BESS Resource and the Thermal Resource. At Seller’s expense, Seller shall install and maintain all necessary Energy Meters and telemetry required by the CAISO to deliver the Product. At Seller’s expense, Seller shall install and maintain the Gas Meter as required for the Thermal Resource to receive natural gas service from the Gas Distribution Utility.

7.2 Meter Verification. If Seller has reason to believe there may be an Energy Meter or a Gas Meter malfunction, or upon Buyer’s reasonable request, Seller shall test the Energy Meter or the Gas Meter. The tests shall be conducted by independent third parties qualified to conduct such tests. Buyer shall be notified seven (7) days in advance of such tests and have a right to be present during such tests. Meter accuracy shall be determined based on CAISO or Gas Distribution Utility standards, as appliable. If a meter is inaccurate it shall be promptly repaired or replaced at Seller’s expense. If the meter test was performed by Buyer’s request and the meter(s) provided to be accurate, Buyer shall reimburse Seller for the costs and expenses associated with the test.

7.3 Meter Adjustments. If a meter provided to be inaccurate, the procedures used by the CAISO or the Gas Distribution Utility, as applicable, shall be used to adjust payments due hereunder. If no such procedures are applicable, Seller shall, acting reasonably and in good faith, determine when the inaccuracy first became effective and calculate the resulting adjustments. If Seller cannot reasonably determine when the inaccuracy first occurred, it will be assumed to have occurred halfway between the previous test and the current test (not to exceed 6 months). 35 ARTICLE 8
INVOICING AND PAYMENT; CREDIT

8.1 Contract Price. The contract price (the “Contract Price”) shall be calculated monthly, in arrears, as follows:
(a) The RA Reservation Payment, plus
(b) The Energy Reservation Payment, plus
(c) The product of (i) the Energy Rate and (ii) the Dispatchable Energy delivered in the applicable month; plus
(d) The Start Fee for the applicable month; plus
(e) Any costs incurred by Seller for natural gas arising from any failure of Dispatchable Energy to be generated in the quantities subject to a Price Lock Transaction as set forth in Exhibit O excluding any costs, charges or penalties incurred due to the Seller’s failure to perform its actions under this Agreement or Seller’s failure to comply with the tariffs, agreements or other requirements of the Gas Distribution Utility.

8.3 Payment. Buyer shall make payment to Seller for Product by wire transfer or ACH payment to the bank account designated by Seller in Exhibit J, which may be updated by Seller by Notice hereunder; provided, however, that changes to invoice, payment, wire transfer and other banking information in the Agreement must be made in writing and delivered via certified mail and shall include contact information for an authorized person who is available by telephone to verify the authenticity of such requested changes to the Agreement. Buyer shall pay undisputed invoice amounts within thirty (30) days after receipt of the invoice. If such due date falls on a weekend or legal holiday, such due date shall be the next Business Day. Payments made after the due date will be considered late and will bear interest on the unpaid balance. If the amount due is not paid on or before the due date or if any other payment that is due and owing from one Party to another is not paid on or before its applicable due date, a late payment charge shall be applied to the unpaid balance and shall be added to the next billing statement. Such late payment charge shall be calculated based on the 3-Month prime rate (or any equivalent successor rate accepted by a majority of major financial institutions) published on the date of the invoice in The Wall Street Journal (or, if The Wall Street Journal is not published on that day, the next succeeding date of 36 publication), plus two percent (2%) (the “Interest Rate”). If the due date occurs on a day that is not a Business Day, the late payment charge shall begin to accrue on the next succeeding Business Day.

8.4 Books and Records. To facilitate payment and verification, each Party shall maintain all books and records necessary for billing and payments, including copies of all invoices under this Agreement, for a period of at least five (5) years or as otherwise required by Law. Upon five (5) Business Days’ Notice to the other Party, either Party shall be granted access to the accounting books and records within the possession or control of the other Party pertaining to all invoices generated pursuant to this Agreement.

8.5 Invoice Adjustments. Invoice adjustments shall be made if (a) there have been good faith inaccuracies in invoicing or payment that are not otherwise disputed under Section 8.6, (b) an adjustment to an amount previously invoiced or paid is required due to a correction of data by the CAISO, or pursuant to a Storage Capacity Test, or (c) there have been meter inaccuracies; provided, however, that there shall be no adjustments to prior invoices based upon meter inaccuracies except to the extent that such meter adjustments are accepted by CAISO for revenue purposes. If the required adjustment is in favor of Buyer, Buyer’s next monthly payment shall be credited in an amount equal to the adjustment. If the required adjustment is in favor of Seller, Seller shall add the adjustment amount to Buyer’s next monthly invoice. Adjustments in favor of either Buyer or Seller shall bear interest, until settled in full, in accordance with Section 8.3, accruing from the date on which the adjusted amount should have been due. Unless otherwise agreed by the Parties, no adjustment of invoices shall be permitted after twelve (12) months from the date of the invoice.

8.6 Billing Disputes. A Party may, in good faith, dispute the correctness of any invoice or any adjustment to an invoice rendered under this Agreement or adjust any invoice for any arithmetic or computational error within twelve (12) months of the date the invoice, or adjustment to an invoice, was rendered. In the event an invoice or portion thereof, or any other claim or adjustment arising hereunder, is disputed, payment of the undisputed portion of the invoice shall be required to be made when due. Any invoice dispute or invoice adjustment shall be in writing and shall state the basis for the dispute or adjustment. Payment of the disputed amount shall not be required until the dispute is resolved. Upon resolution of the dispute, any required payment shall be made within five (5) Business Days of such resolution along with interest accrued at the Interest Rate from and including the original due date to but excluding the date paid. Inadvertent overpayments shall be returned via adjustments in accordance with Section 8.5. Any dispute with respect to an invoice is waived if the other Party is not notified in accordance with this Section 8.6 within twelve (12) months after the invoice is rendered or subsequently adjusted, except to the extent any misinformation was from a third party not affiliated with any Party and such third party corrects its information after the twelve-month period. If an invoice is not rendered within twelve (12) months after the close of the month during which performance occurred, the right to payment for such performance is waived.

8.7 Netting of Payments. The Parties hereby agree that they shall discharge mutual debts and payment obligations due and owing to each other on the same date through netting, in which case all amounts owed by each Party to the other Party for the purchase and sale of Product during the monthly billing period under this Agreement or otherwise arising out of this Agreement, 37 including, without limitation, liquidated damage payments under Exhibit B, CAISO Costs and Revenues calculated pursuant to Exhibit N, interest, payments, and credits shall be netted so that only the excess amount remaining due shall be paid by the Party who owes it.

8.8 Payment Security.
(a) Seller’s Development Security. To secure its obligations under this Agreement, Seller shall deliver the Development Security to Buyer within thirty (30) days after the Effective Date. Seller shall maintain the Development Security in full force and effect. Upon the earlier of (i) Seller’s delivery of the Performance Security, or (ii) sixty (60) days after termination of this Agreement, Buyer shall return the Development Security to Seller, less the amounts drawn in accordance with this Agreement. If the Development Security is a Letter of Credit and the issuer of such Letter of Credit (x) fails to maintain the minimum Credit Rating specified in the definition of Letter of Credit, (y) indicates its intent not to renew such Letter of Credit and such Letter of Credit expires prior to the Commercial Operation Date, or (z) fails to honor Buyer’s properly documented request to draw on such Letter of Credit by such issuer, Seller shall have ten (10) Business Days to either post cash or deliver a substitute Letter of Credit that meets the requirements set forth in the definition of Development Security. (b) Seller’s Performance Security. To secure its obligations under this Agreement, Seller shall deliver Performance Security to Buyer on or before the Commercial Operation Date. Seller shall maintain the Performance Security in full force and effect, and Seller shall within ten (10) Business Days after any draw thereon replenish the Performance Security in the event Buyer collects or draws down any portion of the Performance Security for any reason permitted under this Agreement, until the following have occurred: (A) the Delivery Term has expired or terminated early; and (B) all payment obligations of the Seller then due and payable under this Agreement, including compensation for penalties, Termination Payment, indemnification payments or other damages are paid in full (whether directly or indirectly such as through set-off or netting). Following the occurrence of both events, Buyer shall promptly return to Seller the unused portion of the Performance Security. If the Performance Security is a Letter of Credit and the issuer of such Letter of Credit (i) fails to maintain the minimum Credit Rating set forth in the definition of Letter of Credit, (ii) indicates its intent not to renew such Letter of Credit and such Letter of Credit expires prior to the Commercial Operation Date, or (iii) fails to honor Buyer’s properly documented request to draw on such Letter of Credit by such issuer, Seller shall have ten (10) Business Days to either post cash or deliver a substitute Letter of Credit that meets the requirements set forth in the definition of Performance Security. (c) First Priority Security Interest in Cash or Cash Equivalent Collateral. To secure its obligations under this Agreement, and until released as provided herein, Seller hereby grants to Buyer a present and continuing first-priority security interest in, and lien on (and right to net against), and assignment of the Development Security and Performance Security to the extent provided in the form of cash, and any other cash collateral and cash equivalent collateral posted pursuant to Section 8.8 and any and all interest thereon or proceeds resulting therefrom or from the liquidation thereof, whether now or hereafter held by, on behalf of, or for the benefit of Buyer, and Seller agrees to take all action as Buyer reasonably requires in order to perfect Buyer’s security interest granted under this Section 8.8(c) in, and lien on (and right to net against), such collateral and any and all proceeds resulting therefrom or from the liquidation thereof. 38 8.9 Use of Financial Security. Upon or any time after the occurrence of an Event of Default caused by Seller, an Early Termination Date resulting from an Event of Default caused by Seller, or an occasion provided for in this Agreement where Buyer is authorized to retain all or a portion of the Financial Security provided by Seller, Buyer may do any one or more of the following (in each case subject to the final sentence of this Section 8.9):
(a) Exercise any of its rights and remedies with respect to the Financial Security, including any such rights and remedies under Law then in effect; (b) Draw on any outstanding Letter of Credit issued for its benefit and retain any cash held by Buyer as Financial Security; and
(c) Liquidate the applicable Financial Security then held by or for the benefit of Buyer free from any claim or right of any nature whatsoever of Seller, including any equity or right of purchase or redemption by Seller.

Buyer shall apply the proceeds of the collateral realized upon the exercise of any such rights or remedies to reduce the Seller’s obligations under this Agreement and Seller shall remain liable for any amounts owing to Buyer after such application, subject to Buyer’s obligation to return any surplus proceeds remaining after these obligations are satisfied in full.

ARTICLE 9

NOTICES

9.1 Addresses for the Delivery of Notices. Any Notice required, permitted, or contemplated hereunder shall be in writing, shall be addressed to the Party to be notified at the address set forth on Exhibit J or at such other address or addresses as a Party may designate for itself from time to time by Notice hereunder.

9.2 Acceptable Means of Delivering Notice. Each Notice required, permitted, or contemplated hereunder shall be deemed to have been validly served, given or delivered if sent by electronic mail at the time indicated by the time stamp upon delivery, except that if received after 5 PM Pacific Prevailing Time, it shall be deemed received on the next Business Day.

Notwithstanding the foregoing, Notices of outages or other scheduling or dispatch information or requests, may be sent by electronic mail, or any other mutually acceptable form of electronic communication, and shall be considered delivered upon successful completion of such transmission (or, in the case of electronic mail, if no notice of delivery failure is received). Notices of claimed breach of this Agreement or an Event of Default must concurrently be sent by hand delivery or overnight carrier with delivery fees either prepaid or an arrangement with such carrier made for the payment of such fees.

ARTICLE 10

FORCE MAJEURE

10.1 Definition.
(a) “Force Majeure Event” means any act or event that delays or prevents a Party from timely performing all or a portion of its obligations under this Agreement or from 39 complying with all or a portion of the conditions under this Agreement if such act or event, despite the exercise of reasonable efforts, cannot be avoided by and is beyond the reasonable control (whether direct or indirect) of and without the fault or negligence of the Party relying thereon as justification for such delay, nonperformance, or noncompliance. (b) Without limiting the generality of the foregoing, so long as the following events, despite the exercise of reasonable efforts, cannot be avoided by, and are beyond the reasonable control (whether direct or indirect) of and without the fault or negligence of the Party relying thereon as justification for such delay, nonperformance or noncompliance, a Force Majeure Event may include an act of God or the elements, such as flooding, lightning, hurricanes, tornadoes, or ice storms; explosion; fire; volcanic eruption; flood; landslide; mudslide; sabotage; terrorism; earthquake; or other cataclysmic events; an act of public enemy; war; blockade; civil insurrection; riot; civil disturbance; epidemic; pandemic; or strikes or other labor difficulties caused or suffered by a Party or any third party except as set forth below. (c) Notwithstanding the foregoing, the term “Force Majeure Event” does not include (i) economic conditions that render a Party’s performance of this Agreement at the Contract Price unprofitable or otherwise uneconomic (including an increase in component costs for any reason, including foreign or domestic tariffs, Buyer’s ability to buy storage capacity at a lower price, or Seller’s ability to sell the Product, or any component thereof, at a higher price, than under this Agreement); (ii) Seller’s inability to obtain permits or approvals of any type for the construction, operation, or maintenance of the Facility, except to the extent such inability is caused by a Force Majeure Event; (iii) the inability of a Party to make payments when due under this Agreement, unless the cause of such inability is an event that would otherwise constitute a Force Majeure Event as described above; (iv) Seller’s inability to obtain sufficient labor, equipment, materials, or other resources to build or operate the Facility except to the extent such inability is caused by a Force Majeure Event; (v) any equipment failure except if such equipment failure is caused by a Force Majeure Event; or (vi) any action or inaction by Transmission Provider that delays or prevents the approval, construction or placement in service of any Interconnection Facilities or Reliability Network Upgrades except to the extent caused by a Force Majeure Event.

10.2 Termination Following Force Majeure Event. If a Force Majeure Event has occurred after the Commercial Operation Date that has caused either Party to be wholly or partially unable to perform its obligations hereunder, and the impacted Party has claimed and received relief from performance of its obligations for a consecutive twelve (12) month period, then the non-claiming Party may terminate this Agreement upon Notice to the other Party. In addition, if a Force Majeure Event causes the Facility to be materially damaged such that returning the Facility to the full operational status that existing prior to the Force Majeure Event is reasonably expected to take more than twelve (12) months, Seller may terminate this Agreement upon Notice to Buyer.

Upon any such termination, neither Party shall have any liability to the other Party, save and except for those obligations specified in Sections 2.1(b) and 10.4. Notwithstanding the foregoing, the occurrence and continuation of a Force Majeure Event shall not (a) suspend or excuse the obligation of a Party to make any payments due hereunder, (b) suspend or excuse the obligation of Seller to achieve the Guaranteed Commercial Operation Date beyond the extensions provided in Exhibit B, or (c) limit Buyer’s right to declare an Event of Default pursuant to Section 11.1(b)(i) or (ii) and receive a Damage Payment upon exercise of Buyer’s default right pursuant to Section 11.2.
40 10.3 Notice for Force Majeure. Within two (2) Business Days of the Party becoming aware of that a Force Majeure Event will impact the Party’s performance under this Agreement, the claiming Party shall provide the other Party with oral notice of the Force Majeure Event, and within two (2) weeks thereafter the claiming Party shall provide the other Party with Notice in the form of a letter describing in detail the occurrence giving rise to the Force Majeure Event, including the nature, cause, estimated date of commencement thereof, and the anticipated extent of any delay or interruption in performance. Failure to provide timely Notice shall not constitute a waiver of the Force Majeure Event, but the relief granted shall be based on the date Notice is provided rather than the date of the Force Majeure Event. Upon written request from the other Party, the claiming Party shall provide documentation demonstrating to other Party’s reasonable satisfaction that each day of the claimed delay was the result of a Force Majeure Event and did not result from the claiming Party’s actions or failure to exercise due diligence or take reasonable actions. The claiming party shall promptly notify the other Party in writing of the cessation or termination of such Force Majeure Event, all as known or estimated in good faith by the affected Party. The suspension of performance due to a claim of a Force Majeure Event must be of no greater scope and of no longer duration than is required by the Force Majeure Event.

10.4 ROFO Following Force Majeure Event Termination. In the event that this Agreement was terminated by Seller pursuant to Section 10.2 due to material damage to the Facility, and, within two (2) years following such termination Seller proposes to return the Facility to its full operational status, Buyer shall have a right of first offer to contract for any rights to discharging energy, resource adequacy benefits, ancillary services, and any other products from the Facility consistent with the terms and conditions of this Agreement .

Prior to offering to sell such products from the Facility to a third party, Seller shall first provide Buyer with Notice of intent to market such for sale. Buyer shall have after receipt of the Notice to provide Seller with a written offer to purchase such products. If the Parties cannot reach an agreement and do not execute a contract to purchase the energy products from the Facility within following Seller’s receipt of Buyer’s offer, or if Buyer fails provide Seller the offer within the required time period, then Seller will thereafter be free to market the products from the Facility for sale to a third party.

ARTICLE 11
DEFAULTS; REMEDIES; TERMINATION

11.1 Events of Default. An “Event of Default” shall mean, (a) with respect to a Party (the “Defaulting Party”) that is subject to the Event of Default the occurrence of any of the following:
(i) the failure by such Party to make, when due, any payment required pursuant to this Agreement and such failure is not remedied within ten (10) Business Days after Notice thereof;
(ii) any representation or warranty made by such Party herein is false or misleading in any material respect when made or when deemed made or repeated, and such default is not remedied within thirty (30) days after Notice thereof; 41 (iii) the failure by such Party to perform any material covenant or obligation set forth in this Agreement (except to the extent constituting a separate Event of Default set forth in this Section 11.1) and such failure is not remedied within thirty (30) days after Notice thereof;
(iv) such Party becomes Bankrupt;
(v) such Party assigns this Agreement or any of its rights hereunder other than in compliance with Sections 14.1, 14.2, 14.3 or 14.4, as appropriate; or (vi) such Party consolidates or amalgamates with, or merges with or into, or transfers all or substantially all of its assets to, another entity and, at the time of such consolidation, amalgamation, merger or transfer, the resulting, surviving or transferee entity fails to assume all the obligations of such Party under this Agreement to which it or its predecessor was a party by operation of Law or pursuant to an agreement reasonably satisfactory to the other Party. (b) with respect to Seller as the Defaulting Party, the occurrence of any of the following:
(i) the failure by Seller to achieve Commercial Operation on or before the Guaranteed Commercial Operation Date, as such date may be extended by Seller’s payment of COD Delay Damages pursuant to Section 2(b) of Exhibit B and/or a Development Cure Period pursuant to Section 4 of Exhibit B;
(ii) the failure by Seller to maintain an average Efficiency Rate equal to or greater than the Minimum Efficiency Rate over any rolling twelve (12) month period; (iii) if, in any Contract Year, the simple average of the Monthly Storage Availability for such Contract Year (calculated at the end of such Contract Year) is not equal to at least , and Seller fails to (x) deliver to Buyer within ten (10) Business Days after Notice from Buyer a plan or report developed by Seller that describes the cause of such failure to maintain a simple average of Monthly Storage Availability for such Contract Year equal to at least

(iv) if, in any Contract Year, the simple average of the Monthly RA Availability for such Contract Year (calculated at the end of such Contract Year) is not equal to at least , and Seller fails to (x) deliver to Buyer within ten (10) Business Days after Notice from Buyer a plan or report developed by Seller that describes the cause of such failure to maintain a simple average of the Monthly RA Availability for such Contract Year equal at least 42 (v) Seller sells, assigns, or otherwise transfers, or commits to sell, assign, or otherwise transfer, the Product, or any portion thereof, during the Delivery Term to any party other than Buyer except as expressly permitted under this Agreement; (vi) except to the extent excused by an Excused Event, if Seller fails to maintain an average Storage Capacity equal to at least of the Storage Contract Capacity for more than or
(vii) failure by Seller to provide and maintain Financial Security pursuant to Section 8.8 after Notice and expiration of the cure periods set forth therein, including the failure to replenish amounts in accordance with this Agreement.

11.2 Remedies; Declaration of Early Termination Date. If an Event of Default with respect to a Defaulting Party shall have occurred and be continuing, the other Party (“Non-Defaulting Party”) shall have the following rights:
(a) to send Notice, designating a day, no earlier than the day such Notice is deemed to be received and no later than twenty (20) days after such Notice is deemed to be received, as an early termination date of this Agreement (“Early Termination Date”) that terminates this Agreement (the “Terminated Transaction”) and ends the Delivery Term effective as of the Early Termination Date;
(b) to accelerate all amounts owing between the Parties, and to collect as liquidated damages (i) the Damage Payment (in the case of an Event of Default by Seller occurring before the Commercial Operation Date, including an Event of Default under Section 11.1(b)(i)) subject to the limitations in Section 11.7, or (ii) the Termination Payment calculated in accordance with Section 11.3 below (in the case of any other Event of Default by either Party); (c) to withhold any payments due to the Defaulting Party under this Agreement; (d) to suspend performance; or
(e) to exercise any other right or remedy available at law or in equity, including specific performance or injunctive relief, except to the extent such remedies are expressly limited under this Agreement;
provided, that payment by the Defaulting Party of the Damage Payment or Termination Payment, as applicable, shall constitute liquidated damages and the Non-Defaulting Party’s sole and exclusive monetary remedy for any termination of this Agreement and the Event of Default related thereto.

11.3 Termination Payment. The Termination Payment (“Termination Payment”) for the Terminated Transaction owed pursuant to Section 11.2 (b)(ii) shall be the aggregate of the Settlement Amount plus any or all other amounts due to or from the Non-Defaulting Party (as of the Early Termination Date) netted into a single amount. The Non-Defaulting Party shall calculate, 43 in a commercially reasonable manner, a Settlement Amount for the Terminated Transaction as of the Early Termination Date. Third parties supplying information for purposes of the calculation of Gains or Losses may include, without limitation, dealers in the relevant markets, end-users of the relevant product, information vendors and other sources of market information. The Settlement Amount shall not include consequential, incidental, punitive, exemplary, indirect or business interruption damages. Without prejudice to the Non-Defaulting Party’s duty to mitigate, the Non-Defaulting Party shall not have to enter into replacement transactions to establish a Settlement Amount. Each Party agrees and acknowledges that (a) the actual damages that the Non-Defaulting Party would incur in connection with the Terminated Transaction would be difficult or impossible to predict with certainty, (b) the Damage Payment or Termination Payment described in Section

11.2 or this Section 11.3 (as applicable) is a reasonable and appropriate approximation of such damages, and (c) the Damage Payment or Termination Payment described in Section 11.2 or this Section 11.3 (as applicable) is the exclusive remedy of the Non-Defaulting Party in connection with the Terminated Transaction but shall not otherwise act to limit any of the Non-Defaulting Party’s rights or remedies if the Non-Defaulting Party does not elect a Terminated Transaction as its remedy for an Event of Default by the Defaulting Party.

11.4 Notice of Payment of Termination Payment. As soon as practicable after termination of this Agreement, Notice shall be given by the Non-Defaulting Party to the Defaulting Party of the amount of the Damage Payment or Termination Payment, as applicable, and whether the Termination Payment is due to or from the Non-Defaulting Party. The Notice shall include a written statement explaining in reasonable detail the calculation of such amount and the sources for such calculation. The Termination Payment shall be made to or from the Non-Defaulting Party, as applicable, within ten (10) Business Days after such Notice is effective.

11.5 Disputes With Respect to Termination Payment. If the Defaulting Party disputes the Non-Defaulting Party’s calculation of the Termination Payment, in whole or in part, the Defaulting Party shall, within five (5) Business Days of receipt of the Non-Defaulting Party’s calculation of the Termination Payment, provide to the Non-Defaulting Party a detailed written explanation of the basis for such dispute. Disputes regarding the Termination Payment shall be determined in accordance with Article 15.

11.6 Rights And Remedies Are Cumulative. Except where an express and exclusive remedy or measure of damages is provided, the rights and remedies of a Party pursuant to this Article 11 shall be cumulative and in addition to the rights of the Parties otherwise provided in this Agreement.

11.7 Seller Pre-COD Liability Limitations. Notwithstanding anything in this Agreement to the contrary, Seller’s aggregate liability under this Agreement prior to the Commercial Operation Date , including liabilities for payment of COD Delay Damages and the Damage Payment, shall not exceed
44 ARTICLE 12
LIMITATION OF LIABILITY AND EXCLUSION OF WARRANTIES.

12.1 No Consequential Damages. EXCEPT TO THE EXTENT PART OF AN

EXPRESS REMEDY OR MEASURE OF DAMAGES HEREIN, OR PART OF AN ARTICLE 16 INDEMNITY CLAIM, OR INCLUDED IN A LIQUIDATED DAMAGES CALCULATION, OR ARISING FROM A PARTY’S FRAUD OR INTENTIONAL MISREPRESENTATION,

NEITHER PARTY SHALL BE LIABLE TO THE OTHER OR ITS INDEMNIFIED PERSONS

FOR ANY SPECIAL, PUNITIVE, EXEMPLARY, INDIRECT, OR CONSEQUENTIAL

DAMAGES, OR LOSSES OR DAMAGES FOR LOST REVENUE OR LOST PROFITS,

WHETHER FORESEEABLE OR NOT, ARISING OUT OF, OR IN CONNECTION WITH THIS AGREEMENT.

12.2 Waiver and Exclusion of Other Damages. EXCEPT AS EXPRESSLY SET

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

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

MEASURES OF DAMAGES PROVIDED IN THIS AGREEMENT SATISFY THE ESSENTIAL PURPOSES HEREOF. ALL LIMITATIONS OF LIABILITY CONTAINED IN

THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, THOSE PERTAINING TO SELLER’S LIMITATION OF LIABILITY AND THE PARTIES’ WAIVER OF

CONSEQUENTIAL DAMAGES, SHALL APPLY EVEN IF THE REMEDIES FOR BREACH OF WARRANTY PROVIDED IN THIS AGREEMENT ARE DEEMED TO “FAIL OF THEIR ESSENTIAL PURPOSE” OR ARE OTHERWISE HELD TO BE INVALID OR UNENFORCEABLE.

FOR BREACH OF ANY PROVISION FOR WHICH AN EXPRESS AND EXCLUSIVE

REMEDY OR MEASURE OF DAMAGES IS PROVIDED, SUCH EXPRESS REMEDY OR

MEASURE OF DAMAGES SHALL BE THE SOLE AND EXCLUSIVE REMEDY, THE OBLIGOR’S LIABILITY SHALL BE LIMITED AS SET FORTH IN SUCH PROVISION, AND ALL OTHER REMEDIES OR DAMAGES AT LAW OR IN EQUITY ARE WAIVED.

TO THE EXTENT ANY DAMAGES REQUIRED TO BE PAID HEREUNDER ARE

LIQUIDATED, THE PARTIES ACKNOWLEDGE THAT THE DAMAGES ARE DIFFICULT

OR IMPOSSIBLE TO DETERMINE, THAT OTHERWISE OBTAINING AN ADEQUATE

REMEDY IS INCONVENIENT, AND THAT THE LIQUIDATED DAMAGES CONSTITUTE A REASONABLE APPROXIMATION OF THE ANTICIPATED HARM OR LOSS. IT IS THE

INTENT OF THE PARTIES THAT THE LIMITATIONS HEREIN IMPOSED ON REMEDIES

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

CAUSES RELATED THERETO, INCLUDING THE NEGLIGENCE OF ANY PARTY,

WHETHER SUCH NEGLIGENCE BE SOLE, JOINT OR CONCURRENT, OR ACTIVE OR PASSIVE. THE PARTIES HEREBY WAIVE ANY RIGHT TO CONTEST SUCH PAYMENTS AS AN UNREASONABLE PENALTY.

THE PARTIES ACKNOWLEDGE AND AGREE THAT MONEY DAMAGES AND THE

EXPRESS REMEDIES PROVIDED FOR HEREIN ARE AN ADEQUATE REMEDY FOR THE

BREACH BY THE OTHER OF THE TERMS OF THIS AGREEMENT, AND EACH PARTY 45 WAIVES ANY RIGHT IT MAY HAVE TO SPECIFIC PERFORMANCE WITH RESPECT TO ANY OBLIGATION OF THE OTHER PARTY UNDER THIS AGREEMENT.

ARTICLE 13
REPRESENTATIONS AND WARRANTIES; AUTHORITY

13.1 Seller’s Representations and Warranties. As of the Effective Date, Seller represents and warrants as follows:
(a) Seller is a limited liability company, duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation and is qualified to conduct business in the state of California and each jurisdiction where the failure to so qualify would have a material adverse effect on the business or financial condition of Seller. (b) Seller has the power and authority to enter into and perform this Agreement and is not prohibited from entering into this Agreement or discharging and performing all covenants and obligations on its part to be performed under and pursuant to this Agreement. The execution, delivery and performance of this Agreement by Seller has been duly authorized by all necessary limited liability company action on the part of Seller and does not and will not require the consent of any trustee or holder of any indebtedness or other obligation of Seller or any other party to any other agreement with Seller.
(c) The execution and delivery of this Agreement, consummation of the transactions contemplated herein, and fulfillment of and compliance by Seller with the provisions of this Agreement will not conflict with or constitute a breach of or a default under any Law presently in effect having applicability to Seller, subject to any permits that have not yet been obtained by Seller, the documents of formation of Seller or any outstanding trust indenture, deed of trust, mortgage, loan agreement or other evidence of indebtedness or any other agreement or instrument to which Seller is a party or by which any of its property is bound. (d) This Agreement has been duly executed and delivered by Seller. This Agreement is a legal, valid and binding obligation of Seller enforceable in accordance with its terms, except as limited by laws of general applicability limiting the enforcement of creditors’ rights or by the exercise of judicial discretion in accordance with general principles of equity. (e) Seller has, or will have prior to the Delivery Term, all necessary Governmental Approvals to perform its obligations hereunder.

13.2 Buyer’s Representations and Warranties. As of the Effective Date, Buyer represents and warrants as follows:
(a) Buyer is a joint powers authority, duly organized, validly existing and in good standing under the laws of California.
(b) Buyer has the power and authority to enter into and perform this Agreement and is not prohibited from entering into this Agreement or discharging and performing all covenants and obligations on its part to be performed under and pursuant to this Agreement, except where such failure does not have a material adverse effect on Buyer’s performance under 46 this Agreement. The execution, delivery and performance of this Agreement by Buyer has been duly authorized by all necessary action on the part of Buyer and does not and will not require the consent of any trustee or holder of any indebtedness or other obligation of Buyer or any other party to any other agreement with Buyer.
(c) The execution and delivery of this Agreement, consummation of the transactions contemplated herein, and fulfillment of and compliance by Buyer with the provisions of this Agreement will not conflict with or constitute a breach of or a default under any Law presently in effect having applicability to Buyer, the documents of formation of Buyer or any outstanding trust indenture, deed of trust, mortgage, loan agreement or other evidence of indebtedness or any other agreement or instrument to which Buyer is a party or by which any of its property is bound.
(d) This Agreement has been duly executed and delivered by Buyer. This Agreement is a legal, valid and binding obligation of Buyer enforceable in accordance with its terms, except as limited by laws of general applicability limiting the enforcement of creditors’ rights or by the exercise of judicial discretion in accordance with general principles of equity. (e) Buyer has, or will have prior to the Delivery Term, all necessary Governmental Approvals to perform its obligations hereunder.

13.3 General Covenants. Each Party covenants that commencing on the Effective Date and continuing throughout the Contract Term:
(a) It shall continue to be duly organized, validly existing and in good standing under the Laws of the jurisdiction of its formation and to be qualified to conduct business in California and each jurisdiction where the failure to so qualify would have a material adverse effect on its business or financial condition;
(b) It shall maintain (or obtain from time to time as required) all regulatory authorizations necessary for it to legally perform its obligations under this Agreement; and (c) It shall perform its obligations under this Agreement in compliance with all terms and conditions in its governing documents and in material compliance with any Law.

13.4 Prevailing Wage. Seller shall use reasonable efforts to ensure that all employees hired by Seller, and its contractors and subcontractors, that will perform construction work or provide services at the Site related to construction of the Facility are paid wages at rates not less than those prevailing for workers performing similar work in the locality as provided by applicable California law, if any (“Prevailing Wage Requirement”). Nothing herein shall require Seller, its contractors and subcontractors to comply with, or assume liability created by other inapplicable provisions of any California labor laws. Buyer agrees that Seller’s obligations under this Section

13.4 will be satisfied upon the execution of a project labor agreement related to construction of the Facility.

13.5 Community Benefits. Seller pledges to deliver one hundred twenty-five thousand dollars ($125,000) to Buyer so that Buyer may direct such amount to community benefits initiatives that directly benefit stakeholders in Buyer’s service area. Buyer and Seller shall identify 47 initiatives that are of mutual interest such as housing, education, workforce training, environmental stewardship, and habitat improvement. Buyer shall have discretion to determine which initiatives will be funded and will provide Seller Notice describing the initiatives Buyer intends to fund.

Seller shall make this payment within sixty (60) days after the Commercial Operation Date, and (b) Seller’s review of the scope of the initiatives to be funded by Buyer. Upon Seller’s request, Buyer’s personnel responsible for allocating funding to community benefits initiatives will meet with Seller to discuss the initiatives to be funded by Buyer. Notwithstanding anything to the contrary in this Section 13.5, Buyer will not make any public statement about the Facility, this Agreement, Seller, or Seller’s Affiliates in connection with any community benefits initiatives funded with Seller’s community benefits funds paid through this Section 13.5 without the prior written consent of Seller.

13.6 Supplier Diversity. Seller acknowledges that Buyer will request voluntary disclosure of Seller’s certification status with the CPUC Clearinghouse, and voluntary disclosure regarding Seller’s efforts to work with diverse business enterprises, including women, minority, disabled veteran, and lesbian, gay, bisexual, transgender and/or persons with disabilities business enterprises using the form attached hereto as Exhibit Q.

13.7 Economic Impacts Report. During the first year following the Commercial Operation Date, Buyer may request that Seller prepare and deliver a single written report describing the Facility’s local economic impact. No later than thirty (30) days after written request from Buyer for such written report, Seller will provide Buyer a written report describing the Facility’s local economic impact through the Commercial Operation Date, including expenditures for construction labor and capital expenditures for procurement of locally-supplied equipment, and number of construction jobs created. Seller may aggregate such information as necessary or appropriate to protect confidential, proprietary or commercially-sensitive information and the written report shall be treated as Confidential Information under this Agreement.

ARTICLE 14

ASSIGNMENT

14.1 General Prohibition on Assignments. Except as provided below in this Article 14, neither Party may assign this Agreement or its rights or obligations under this Agreement without the prior written consent of the other Party, which consent shall not be unreasonably withheld, conditioned or delayed. Any Change of Control of Seller (whether voluntary or by operation of law) will be deemed an assignment and will require the prior written consent of Buyer, which consent shall not be unreasonably withheld, conditioned or delayed; provided, a Change of Control of Seller shall not require Buyer’s consent and will not be subject to Section 14.2 or Section 14.3 if the assignee or transferee is a Permitted Transferee. Any assignment made without the required written consent, or in violation of the conditions to assignment set out below, shall be null and void. Buyer will have no obligation to provide any consent, or enter into any agreement, that materially and adversely affects any of Buyer’s rights, benefits, risks or obligations under this Agreement, or to modify the Agreement, except as set forth below. The assigning Party shall pay the other Party’s reasonable expenses associated with the preparation, review, execution and delivery of documents in connection with any assignment of this Agreement by the assigning Party, including without limitation reasonable attorneys’ fees. 48 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 or portion thereof. In connection with any financing or refinancing of the Facility by Seller, upon request of Seller, Buyer shall in good faith work with Seller and Financing Party to agree upon a consent to collateral assignment of this Agreement (“Collateral Assignment Agreement”). The Collateral Assignment Agreement shall include the following provisions:
(a) Buyer shall give Notice of an Event of Default by Seller to the Person(s) to be specified by Financing Party in the Collateral Assignment Agreement, before exercising its right to terminate this Agreement as a result of such Event of Default; provided that such Notice shall be provided to Financing Party at the time such Notice is provided to Seller and the cure period of Financing Party shall not commence until Financing Party has received Notice of such Event of Default;
(b) Following an Event of Default by Seller under this Agreement, Buyer may require Seller or Financing Party to provide to Buyer a report concerning:
(i) The status of efforts by Seller or Financing Party to develop a plan to cure the Event of Default;
(ii) Impediments to the cure plan or its development;
(iii) If a cure plan has been adopted, the status of the cure plan’s implementation (including any modifications to the plan as well as the expected timeframe within which any cure is expected to be implemented); and
(iv) Any other information which Buyer may reasonably require related to the development, implementation and timetable of the cure plan.

Seller or Financing Party must provide the report to Buyer within ten (10) Business Days after Notice from Buyer requesting the report. Buyer will have no further right to require the report with respect to a particular Event of Default after that Event of Default has been cured; (c) Financing Party will have the right to cure an Event of Default on behalf of Seller, only if Financing Party sends a Notice to Buyer before the later of (i) the expiration of any cure period, and (ii) fifteen (15) Business Days after Financing Party’s receipt of Notice of such Event of Default from Buyer, indicating Financing Party’s intention to cure. Financing Party must remedy or cure the Event of Default within the cure period under this Agreement and any additional cure periods agreed in the Collateral Assignment Agreement, which shall not exceed a maximum of
(d) Financing Party will have the right to consent before any termination of this Agreement which does not arise out of an Event of Default; 49 (e) Financing Party will receive prior Notice of and the right to approve material amendments to this Agreement, which approval will not be unreasonably withheld, delayed or conditioned;
(f) If Financing Party, directly or indirectly, takes possession of, or title to the Facility following Seller’s bankruptcy or similar insolvency proceedings (including possession by a receiver or title by foreclosure or deed in lieu of foreclosure) and the Agreement is in effect at such time, Financing Party or its designee shall not disturb Buyer’s rights and privileges arising under this Agreement and all related agreements (subject to such limits on liability as are mutually agreed to by Seller, Buyer, and Financing Party as set forth in the Collateral Assignment Agreement); provided, if Buyer advises Financing Party that Buyer will require that Financing Party 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 terminate this Agreement with respect to such Event of Default, then Financing Party at its option, and in its sole discretion, may elect to either:
(i) Cause such Event of Default (which are capable of being cured) to be cured (other than any Events of Default which relate to Seller’s bankruptcy or similar insolvency proceedings), or
(ii) Not assume this Agreement;
(g) If following Seller’s bankruptcy or similar insolvency proceedings Financing Party elects to sell or transfer the Facility (after Financing Party directly or indirectly, takes possession of, or title to the Facility), or sale of the Facility occurs through the actions of Financing Party (for example, a foreclosure sale where a third party is the buyer, or otherwise), then Financing Party shall cause the transferee or buyer to comply with the foregoing clause (f) as a condition of the sale or transfer. Such sale or transfer may be made only to an entity that (i) meets the definition of Permitted Transferee and (ii) is an entity that Buyer is permitted to contract with under applicable Law.
(h) If this Agreement is rejected in Seller’s bankruptcy or otherwise terminated in connection therewith, Financing Party shall have the right to elect within one hundred eight (180) days after such rejection or termination, to cause Buyer to enter into a replacement agreement with Seller (or Financing Party or its designee that has title to the Facility) having the same terms as this Agreement for the remaining term thereof; provided that in the event a designee of Financing Party, 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 (i) meet the definition of Permitted Transferee and (ii) be an entity that Buyer is permitted to contract with under applicable Law.

14.3 Permitted Assignment by Seller. Except as may be precluded by, or would cause Buyer to be in violation of the Political Reform Act (Cal. Gov. Code section 81000 et seq.) or the regulations thereto, Cal. Government Code section 1090, or any other conflict of interest Law:
(a) Seller may, without the prior written consent of Buyer, transfer or assign this Agreement directly or indirectly to an Affiliate of Seller if, and only if:
50 (i) Seller has given Buyer Notice at least fifteen (15) Business Days before the date of such proposed assignment; and
(ii) Seller has provided Buyer a written agreement signed by the Affiliate to which Seller wishes to assign its interests that provides that such Affiliate will assume all of Seller’s obligations and liabilities under this Agreement upon such transfer or assignment. (b) Seller may, without the prior written consent of Buyer, transfer or assign this Agreement to any Person succeeding to all, or substantially all, of the assets of Seller (whether voluntary or by operation of law), if, and only if:
(i) The assignee is a Permitted Transferee;
(ii) Seller has given Buyer Notice at least fifteen (15) 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 transfer or assignment and (y) certifies that such Person meets the definition of a Permitted Transferee. (c) Notwithstanding the foregoing, 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 confirmed by Buyer.

14.4 Permitted Assignment by Buyer. Buyer may make a limited assignment to an entity with an Investment Grade Credit Rating (“Limited Assignee”) of Buyer’s right to receive Product and Buyer’s obligation to make payments to Seller, subject to execution of an assignment agreement between and among Seller, Buyer, and Limited Assignee upon terms and conditions mutually agreed, including that the limited assignment shall be expressly subject to Limited Assignee’s timely payment of amounts due under this Agreement. Buyer may make such assignment by delivering Notice upon not less than thirty (30) days prior to such proposed assignment. Buyer shall pay Seller for any payments not timely made by the Limited Assignee, and Buyer shall remain obligated to perform all of its obligations under this Agreement notwithstanding the limited assignment. Any failure by the Limited Assignee to make payments to Seller when due hereunder shall be a Buyer Event of Default if not cured within the applicable cure period specified herein. Subject to the foregoing, Seller agrees to (i) comply with Limited Assignee’s reasonable requests for know-your-customer and similar account opening information and documentation with respect to Seller, including but not limited to information related to forecasted generation, credit rating, and compliance with anti-money laundering rules, the Dodd-Frank Act, the Commodity Exchange Act, the Patriot Act and similar rules, regulations, requirements and corresponding policies, and (ii) promptly execute such assignment agreement and implement such assignment as contemplated thereby, subject only to the countersignature of Limited Assignee and Buyer.
51 ARTICLE 15

DISPUTE RESOLUTION

15.1 Governing Law. This Agreement and the rights and duties of the Parties hereunder shall be governed by and construed, enforced and performed in accordance with the laws of the state of California, without regard to principles of conflicts of Law. To the extent enforceable at such time, each Party waives its respective right to any jury trial with respect to any litigation arising under or in connection with this Agreement. The Parties agree that any suit, action or other legal proceeding by or against any Party (or its affiliates or designees) with respect to or arising out of this Agreement shall be brought in the federal courts of the United States or the courts of the State of California sitting in the County of San Diego, California.

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

15.3 Attorneys’ Fees. In any proceeding brought to enforce this Agreement or because of the breach by any Party of any covenant or condition herein contained, the prevailing Party shall be entitled to reasonable attorneys’ fees (including reasonably allocated fees of in-house counsel) in addition to court costs and any and all other costs recoverable in said action.

ARTICLE 16

INDEMNIFICATION

16.1 Indemnification.
(a) Each Party (the “Indemnifying Party”) agrees to indemnify, defend and hold harmless the other Party and its Affiliates, directors, officers, employees and agents (collectively, the “Indemnified Party”) from and against all claims, demands, losses, liabilities, penalties, and expenses (including reasonable attorneys’ fees) (i) for personal injury or death to Persons and damage to the property of any third party to the extent arising out of, resulting from, or caused by the negligent or willful misconduct of the Indemnifying Party, its Affiliates, its directors, officers, employees, or agents, or (ii) for third-party claims resulting from the Indemnifying Party’s breach (including inaccuracy of any representation of warranty made hereunder), performance or non-performance of its obligations under this Agreement (“Indemnifiable Losses”).
52 (b) Nothing in this Section 16.1 shall enlarge or relieve Seller or Buyer of any liability to the other for any breach of this Agreement. Neither Party shall be indemnified for its damages resulting from its own sole 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.
(a) Promptly after receipt by a Party 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 Article 16 may apply, the Indemnified Party shall notify the Indemnifying Party in writing of such fact. The Indemnifying Party shall assume the defense thereof with counsel designated by the Indemnifying Party and satisfactory to the Indemnified Party, provided, if the defendants in any such action include both the Indemnified Party and the Indemnifying Party and the Indemnified Party shall have reasonably concluded that there may be legal defenses available to it which are different from or additional to, or inconsistent with, those available to the Indemnifying Party, the Indemnified Party shall have the right to select and be 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 Party or, absent such consent, written opinion of the Indemnified Party’s counsel that such claim is meritorious or warrants settlement. Except as otherwise provided in this Article 16, in the event that a Party is obligated to indemnify and hold the other Party and its successors and assigns harmless under this Article 16, the amount owing to the Indemnified Party will be the amount of the Indemnified Party’s damages net of any insurance proceeds received by the Indemnified Party following a reasonable effort by the Indemnified Party to obtain such insurance proceeds.

16.3 Rights and Remedies are Cumulative. Except for express remedies already provided in this Agreement, the rights and remedies of a Party pursuant to this Article 16 are cumulative and in addition to the rights of the Parties otherwise provided in this Agreement.

ARTICLE 17

INSURANCE

17.1 Insurance.
(a) General Liability. Seller shall maintain, or cause to be maintained at its sole expense, (i) commercial general liability insurance, including products and completed operations and bodily injury insurance, in a minimum amount of per occurrence, and general aggregate of not less than , including contractual liability in said amount, including Buyer having additional insured status; and (ii) an umbrella/excess liability insurance liability policy in a minimum limit of liability of each occurrence and in the aggregate. Defense costs shall be provided as an additional benefit and not included within the limits of liability. Such insurance shall contain standard cross-liability and severability of interest/separation of insureds provisions. 53 (b) Employer’s Liability Insurance. Seller shall maintain Employer’s Liability insurance in a minimum amount not to be less than for injury or death occurring as a result of each accident. With regard to bodily injury by disease, the policy limit will apply to each employee.
(c) Workers Compensation Insurance. Seller, if it has employees, shall also maintain at all times during the Contract Term workers’ compensation and employers’ liability insurance coverage in accordance with applicable requirements of California Law. (d) Business Auto Insurance. Seller shall maintain at all times during the Contract Term business auto insurance for bodily injury and property damage with limits of per accident. Such insurance shall cover liability arising out of Seller’s use of all owned (if any), non-owned and hired vehicles, including trailers or semi-trailers in the performance of the Agreement.
(e) Construction All-Risk Insurance. Seller shall maintain or cause to be maintained during the construction of the Facility prior to the Commercial Operation Date, construction all-risk form property insurance covering the Facility during such construction periods.
(f) Operational 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” property insurance coverage in amounts that are not less than the replacement value of the Facility; provided, however, with respect to property insurance for natural catastrophes, Seller shall maintain limits that are usual and customary to similar risks. Such insurance shall include business interruption coverage in an amount equal to twelve (12) months of expected revenue from this Agreement.
(g) Contractor’s Pollution Liability. Seller shall maintain or cause to be maintained during the construction of the Facility prior to the Commercial Operation Date naming Seller (and Financing Party if any) as additional insured if coverage provided by Subcontractor, Pollution Legal Liability Insurance in the amount of per event and in the aggregate with Seller as a named insured and Financing Party, if any, as an additional insured.
(h) Subcontractor Insurance. Seller shall require all of its Major Subcontractors to carry: (i) commercial general liability insurance with a combined single limit of coverage not less than per occurrence/general aggregate; (ii) workers’ compensation insurance and employer’s liability coverage in accordance with applicable requirements of California Law; and (iii) business auto insurance for bodily injury and property damage with limits of per accident. All Major Subcontractors shall name Seller as an additional insured to insurance carried pursuant to clauses (h)(i) and (h)(iii).

All Major Subcontractors shall provide a primary/non-contributory endorsement on commercial general liability and auto liability insurance. and a waiver of subrogation to Seller for the required coverage pursuant to this Section 17.1(h).
54 (i) Evidence of Insurance. Within sixty (60) days after execution of the Agreement and upon annual renewal thereafter, Seller shall deliver to Buyer certificates of insurance evidencing such coverage. These certificates shall specify that Buyer shall be given at least thirty (30) days prior Notice by Seller in the event of cancellation or termination of coverage except for ten (10) days for non-payment of premium. General Liability and Business Auto insurance shall be primary coverage without right of contribution from any insurance of Buyer.

Umbrella/Excess Liability insurance shall be without right of contribution from any insurance of Buyer. Any other insurance maintained by Seller is for the exclusive benefit of Seller and shall not in any manner inure to the benefit of Buyer.

ARTICLE 18

CONFIDENTIAL INFORMATION

18.1 Definition of Confidential Information. The following constitutes “Confidential Information,” whether oral or written which is delivered by Seller to Buyer or by Buyer to Seller including: (a) the terms and conditions of, and proposals and negotiations related to, this Agreement, and (b) information that either Seller or Buyer stamps or otherwise identifies as “confidential” or “proprietary” before disclosing it to the other. Confidential Information does not include (i) information that was publicly available at the time of the disclosure, other than as a result of a disclosure in breach of this Agreement; (ii) information that becomes publicly available through no fault of the recipient after the time of the delivery; (iii) information that was rightfully in the possession of the recipient (without confidential or proprietary restriction) at the time of delivery or that becomes available to the recipient from a source not subject to any restriction against disclosing such information to the recipient; and (iv) information that the recipient independently developed without a violation of this Agreement.

18.2 Duty to Maintain Confidentiality. The Party receiving Confidential Information (the “Receiving Party”) from the other Party (the “Disclosing Party”) shall not disclose Confidential Information to a third party (other than the Party’s members, employees, lenders or investors, counsel, accountants, directors or advisors, or any such representatives of a Party’s Affiliates, who have a need to know such information and have agreed to keep such terms confidential) except in order to comply with any applicable Law, regulation, or any exchange, control area or independent system operator rule or in connection with any court or regulatory proceeding applicable to such Party or any of its Affiliates; provided, each Party shall, to the extent practicable, use reasonable efforts to prevent or limit the disclosure. The Parties shall be entitled to all remedies available at law or in equity to enforce, or seek relief in connection with, this confidentiality obligation. The Parties agree and acknowledge that nothing in this Section 18.2 prohibits a Party from disclosing any one or more of the commercial terms of a transaction (other than the name of the other Party unless otherwise agreed to in writing by the Parties) to any industry price source for the purpose of aggregating and reporting such information in the form of a published energy price index.

The Parties acknowledge and agree that the Agreement and any transactions entered into in connection herewith are subject to the requirements of the California Public Records Act (Government Code Section 6250 et seq.). In order to designate information as confidential, the Disclosing Party must clearly stamp and identify written material with the word “Confidential” 55 and must clearly advise the Disclosing Party if any oral communication contains Confidential Information and should be treated as confidential.

Upon request or demand of any third person or entity not a Party hereto to Buyer pursuant to the California Public Records Act for production, inspection and/or copying of Confidential Information (“Requested Confidential Information”), Buyer shall as soon as practical notify Seller in writing via email that such request has been made. Seller shall be solely responsible for taking at its sole expense whatever legal steps are necessary to prevent release of the Requested Confidential Information to the third party by Buyer. If Seller takes no such action after receiving the foregoing Notice from Buyer, Buyer shall, at its discretion, be permitted to comply with the third party’s request or demand and is not required to defend against it. If Seller does take or attempt to take such action, Buyer shall provide timely and reasonable cooperation to Seller, if requested by Seller, and Seller agrees to indemnify and hold harmless Buyer and Buyer’s Indemnified Parties from any claims, liability, award of attorneys’ fees, or damages, and to defend any action, claim or lawsuit brought against any of Buyer or Buyer’s Indemnified Parties for Buyer’s refusal to disclose any Requested Confidential Information. The provisions of this Article 18 shall survive and shall continue to be binding upon the Parties for period of five (5) years following the date of termination of this Agreement.

18.3 Irreparable Injury; Remedies. Receiving Party acknowledges that its obligations under this Article 18 are necessary and reasonable in order to protect Disclosing Party and the business of Disclosing Party, and expressly acknowledges that monetary damages would be inadequate to compensate Disclosing Party for any breach or threatened breach by Receiving Party of any covenants and agreements set forth in this Article 18. Accordingly, Receiving Party acknowledges that any such breach or threatened breach will cause irreparable injury to Disclosing Party and that, in addition to any other remedies that may be available, in law, in equity or otherwise, Disclosing Party will be entitled to obtain injunctive relief against the threatened breach of this Article 18 or the continuation of any such breach, without the necessity of proving actual damages.

18.4 Further Permitted Disclosure. Notwithstanding anything to the contrary in this Article 18, Confidential Information may be disclosed by the Receiving Party to any of its agents, consultants, contractors, trustees, or actual or potential financing parties (including, in the case of Seller, its Financing Party(ies)), so long as such Person to whom Confidential Information is disclosed agrees in writing to be bound by confidentiality provisions that are at least as restrictive as this Article 18 to the same extent as if it were a Party.

18.5 Press Releases. Neither Party shall issue (or cause its Affiliates to issue) a press release regarding the transactions contemplated by this Agreement unless both Parties have agreed upon the contents of any such press release.

ARTICLE 19

MISCELLANEOUS

19.1 Entire Agreement; Integration; Exhibits. This Agreement, together with the Cover Sheet and Exhibits attached hereto constitutes the entire agreement and understanding between Seller and Buyer with respect to the subject matter hereof and supersedes all prior 56 agreements relating to the subject matter hereof, which are of no further force or effect. The Exhibits attached hereto are integral parts hereof and are made a part of this Agreement by reference. The headings used herein are for convenience and reference purposes only. In the event of a conflict between the provisions of this Agreement and those of the Cover Sheet or any Exhibit, the provisions of first the Cover Sheet, and then this Agreement shall prevail, and such Exhibit shall be corrected accordingly.

19.2 Amendments. This Agreement may only be amended, modified or supplemented by an instrument in writing executed by duly authorized representatives of Seller and Buyer; provided, that, for the avoidance of doubt, this Agreement may not be amended by electronic mail communications.

19.3 No Waiver. Waiver by a Party of any default by the other Party shall not be construed as a waiver of any other default.

19.4 No Agency, Partnership, Joint Venture or Lease. Seller and the agents and employees of Seller shall, in the performance of this Agreement, act in an independent capacity and not as officers or employees or agents of Buyer. Under this Agreement, Seller and Buyer intend to act as energy seller and energy purchaser, respectively, and do not intend to be treated as, and shall not act as, partners in, co-venturers in or lessor/lessee with respect to the Facility or any business related to the Facility. This Agreement shall not impart any rights enforceable by any third party (other than a permitted successor or assignee bound to this Agreement) or, to the extent set forth herein, any Financing Party or Indemnified Party.

19.5 Severability. In the event that any provision of this Agreement is unenforceable or held to be unenforceable, the Parties agree that all other provisions of this Agreement have force and effect and shall not be affected thereby. The Parties shall, however, use their best endeavors to agree on the replacement of the void, illegal or unenforceable provision(s) with legally acceptable clauses which correspond as closely as possible to the sense and purpose of the affected provision and this Agreement as a whole.

19.6 Mobile-Sierra. Notwithstanding any other provision of this Agreement, neither Party shall seek, nor shall they support any third party seeking, to prospectively or retroactively revise the rates, terms or conditions of service of this Agreement through application or complaint to FERC pursuant to the provisions of Section 205, 206 or 306 of the Federal Power Act, or any other provisions of the Federal Power Act, absent prior written agreement of the Parties. Further, absent the prior written agreement in writing by both Parties, the standard of review for changes to the rates, terms or conditions of service of this Agreement proposed by a Party shall be the “public interest” standard of review set forth in United Gas Pipe Line Co. v. Mobile Gas Service Corp., 350 U.S. 332 (1956) and Federal Power Commission v. Sierra Pacific Power Co., 350 U.S. 348 (1956). Changes proposed by a non-Party or FERC acting sua sponte shall be subject to the most stringent standard permissible under applicable Law.

19.7 Counterparts. This Agreement may be executed in one or more counterparts, all of which taken together shall constitute one and the same instrument and each of which shall be deemed an original.
57 19.8 Electronic Delivery. This Agreement may be duly executed and delivered by a Party by execution and electronic format (including portable document format (.pdf)) delivery of the signature page of a counterpart to the other Party, and, if delivery is made by electronic format, the executing Party shall promptly deliver, via overnight delivery, a complete original counterpart that it has executed to the other Party, but this Agreement shall be binding on and enforceable against the executing Party whether or not it delivers such original counterpart.

19.9 Binding Effect. This Agreement shall inure to the benefit of and be binding upon the Parties and their respective successors and permitted assigns.

19.10 No Recourse to Members of Buyer. Buyer is organized as a Joint Powers Authority in accordance with the Joint Exercise of Powers Act of the State of California (Government Code Section 6500, et seq.) pursuant to its Joint Powers Agreement and is a public entity separate from its constituent members. Buyer shall solely be responsible for all debts, obligations and liabilities accruing and arising out of this Agreement. Seller shall have no rights and shall not make any claims, take any actions or assert any remedies against any of Buyer’s constituent members, or advisors, contractors, consultants or employees of Buyer or Buyer’s constituent members, in connection with this Agreement.

19.11 Forward Contract. The Parties acknowledge and agree that this Agreement constitutes a “forward contract” within the meaning of the U.S. Bankruptcy Code, and Buyer and Seller are “forward contract merchants” within the meaning of the U.S. Bankruptcy Code. Each Party further agrees that, for all purposes of this Agreement, each Party waives and agrees not to assert the applicability of the provisions of 11 U.S.C. § 366 in any bankruptcy proceeding wherein such Party is a debtor. In any such proceeding, each Party further waives the right to assert that the other Party is a provider of last resort to the extent such term relates to 11 U.S.C. §366 or another provision of 11 U.S.C. § 101-1532.

19.12 Further Assurances. Seller agrees to use commercially reasonable efforts to cooperate with respect to any future changes to this Agreement needed to satisfy requirements of Governmental Authorities associated with changes in law to maximize benefits to Buyer, including: (i) modification of the description of Capacity Attributes as may be required, including updating the Agreement to reflect any mandatory contractual language required by Governmental Authorities; or (ii) submission of any reports, data, or other information required by Governmental Authorities; provided that Seller shall have no obligation to modify this Agreement, or take other actions not required under this Agreement, if such modifications or actions would materially adversely affect, or could reasonably be expected to have or result in a material adverse effect on, any of Seller's rights, benefits, risks and/or obligations under this Agreement. Each of the Parties hereto agree to provide such information, execute and deliver any instruments and documents and to take such other actions as may be necessary or reasonably requested by the other Party which are not inconsistent with the provisions of this Agreement and which do not involve the assumptions of obligations other than those provided for in this Agreement, to give full effect to this Agreement and to carry out the intent of this Agreement.

19.13 Change in Electric Market Design. If a change in the CAISO Tariff renders this Agreement or any provisions hereof incapable of being performed or administered, then either Party may request that the other Party enter into negotiations to make the minimum changes to this 58 Agreement necessary to make this Agreement capable of being performed and administered, while attempting to preserve to the maximum extent possible the benefits, burdens, and obligations set forth in this Agreement as of the Effective Date. Upon delivery of such a request, Buyer and Seller shall engage in such negotiations in good faith, provided, however that Seller shall have no obligation to agree to any amendment that results in an unreimbursed reduction of forecast revenue Seller expects to generate under this Agreement. If Buyer and Seller are unable, within sixty (60) days after delivery of such request, to agree upon changes to this Agreement or to resolve issues relating to changes to this Agreement, then any Party may submit issues pertaining to changes to this Agreement to the dispute resolution process set forth in Section 15.2. Notwithstanding the foregoing, (i) a change in cost shall not in and of itself be deemed to render this Agreement or any of the provisions hereof incapable of being performed or administered, and (ii) all of the unaffected provisions of this Agreement shall remain in full force and effect during any period of such negotiation or dispute resolution.
[Signatures on following page]
IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed as of the Effective Date.

MRP PACIFICA MARKETING LLC,
a Delaware limited liability company
SAN DIEGO COMMUNITY POWER, a
California joint powers authority
By:

Name:

Title:

By:

Name:

Title:

Exhibit A - 1

EXHIBIT A

FACILITY DESCRIPTION
Site Name
County San Diego, CA
Site APNs APN 646-130-58-00
Facility Type Natural gas-fired plant and battery energy storage system (BESS)
Participating Transmission Owner SDG&E
Thermal Resource
Description 51 MW Simple Cycle Gas Turbine
Generating Capacity (MW) 51 MW
Conversion Rate
Resource ID BORDER_6_UNITA1
BESS Resource
Type Lithium Ion Battery Energy Storage System
Operating Characteristics
Operating Procedures See Exhibit H
Maximum Charging Capacity (MWh) 52
Maximum Discharging Capacity (MWh) 52
Maximum Stored Energy Level (MWh) 52
Resource ID To be determined by CAISO
Exhibit B - 1

EXHIBIT B

FACILITY COMMERCIAL OPERATION

1. Thermal Resource. The Thermal Resource is operational.

2. Reserved.

3. Commercial Operation of the BESS Resource. “Commercial Operation” means the condition existing when (i) Seller has fulfilled all of the conditions precedent in Section

2.2 of the Agreement and provided Notice to Buyer substantially in the form of Exhibit L (the “COD Certificate”) (ii) Seller has notified Buyer in writing that it has provided the required documentation to Buyer and met the conditions for achieving Commercial Operation, and (iii) Buyer has acknowledged to Seller in writing that Commercial Operation has been achieved. Subject to Buyer’s confirmation in Section 3(iii) of this Exhibit B, the “Commercial Operation Date” shall be the later of (x) the Expected Commercial Operation Date or (y) the date in the COD Certificate on which Seller confirmed to Buyer that Commercial Operation was achieved. a. Seller shall cause Commercial Operation for the BESS Resource to occur by June 1, 2026 (as such date may be extended by the Development Cure Period (defined below), the “Guaranteed Commercial Operation Date”). Seller shall notify Buyer that it intends to achieve Commercial Operation at least sixty (60) days before the anticipated Commercial Operation Date.
b. If Seller does not achieve Commercial Operation by the Guaranteed Commercial Operation Date, as it may be extended pursuant to the Development Cure Period, Seller shall pay COD Delay Damages to Buyer for each day after the Guaranteed Commercial Operation Date until the Commercial Operation Date, not to exceed (the “COD Delay Period”).
c. If Commercial Operation is achieved during a month for which Seller has paid COD Delay Damages, Buyer shall repay to Seller the amount of COD Delay Damages paid to Buyer that are not owed by Seller for such month. Seller may include such amounts owed by Buyer in its invoices to Buyer hereunder. d. The Parties agree that Buyer’s receipt of COD Delay Damages shall be Buyer’s sole and exclusive remedy for Seller’s failure to achieve the Commercial Operation Date on or before the Guaranteed Commercial Operation Date, but shall (x) not be construed as Buyer’s declaration that an Event of Default has occurred under any provision of Section 11.1 and (y) not limit Buyer’s right to receive a Damage Payment upon exercise of Buyer’s default right pursuant to Section 11.2 (subject to the limitations in Section 11.7).

4. Extension of the Guaranteed Commercial Operation Date. The Guaranteed Commercial Operation Date shall, subject to Notice and documentation requirements set forth below, be automatically extended on a day-for-day basis (the “Development Cure Exhibit B - 2
Period”) for the duration of any and all delays arising out of the following circumstances:
a. Force Majeure Event;
b. Interconnection Delays; and
c. Event of Default of Buyer.

Notwithstanding anything in this Agreement to the contrary, the cumulative extensions granted under the Development Cure Period, other than any delays due to Section 4(c) above, shall not exceed for any reason, including a Force Majeure Event, and the cumulative extensions granted to the (i) Guaranteed Commercial Operation Date by Seller’s payment of COD Delay Damages pursuant to Section 3(c) of this Exhibit B, and (ii) any Development Cure Period(s), other than any delays due to clause 4(c) above, shall not exceed . Seller shall provide prompt Notice to Buyer of a delay, but in no case more than thirty (30) days after Seller became aware of such delay, except that in the case of a delay occurring within sixty (60) days of the Expected Commercial Operation Date, or after such date, Seller must provide Notice within five (5) Business Days of Seller becoming aware of such delay.

5. Failure to Reach Storage Contract Capacity. If, at Commercial Operation, the Installed Capacity is less than one hundred percent (100%) of the Storage Contract Capacity, Seller shall have sixty (60) days after the Commercial Operation Date to install additional capacity or Network Upgrades such that the Installed Capacity is equal to (but not greater than) one hundred percent (100%) of the Storage Contract Capacity, and Seller shall provide to Buyer a new certificate substantially in the form attached as Exhibit M hereto specifying the new Installed Capacity. If Seller fails to construct the Storage Contract Capacity by such date, Seller shall pay Capacity Damages to Buyer, in an amount equal to and the Storage Contract Capacity and other
applicable portions of the Agreement, including the Storage Contract Capacity table in the Cover Sheet, shall be adjusted accordingly.

6. Commercial Operation Conditions: Commercial Operation of the BESS Resource shall occur once the following conditions are satisfied:
a. The BESS Resource is fully operational and interconnected, fully integrated and synchronized with the Transmission System.
b. Seller has installed equipment for the BESS Resource. c. Seller has commissioned all equipment in accordance with its respective manufacturer’s specifications.
d. Seller has demonstrated functionality of the BESS Resource’s communication systems and automatic generation control (AGC) interface to operate the BESS Resource as necessary to respond and follow instructions, including an electronic signal conveying real time and intra-day instructions, directed by the Buyer in Exhibit B - 3
accordance with the Agreement and/or the CAISO.
e. The BESS Resource is fully capable of charging, storing and discharging energy and receiving instructions to charge, store and discharge Energy, all within the operational constraints and subject to the applicable Operating Protocols. f. Authorization was received from the CAISO and the Participating Transmission Owner to operate the BESS Resource is parallel with the Transmission System. g. The PTO has provided documentation supporting Commercial Operation. h. The CAISO has provided notification supporting Commercial Operation, in accordance with the CAISO Tariff.

Exhibit C - 1

EXHIBIT C

EFFICIENCY GUARANTY
Thermal Resource Heat Rate Guaranty
Heat Rate Testing: The heat rate (“Heat Rate”) of the Thermal Resource shall be determined by performing thermal performance testing generally in accordance with the American Society of Mechanical Engineers’ Standard PTC 22 and Prudent Industry Practice. The Heat Rate will be first tested no later than thirty (30) days prior to the Energy Start Date and thereafter, the Heat Rate will be tested annually upon Buyer’s request. In addition, Buyer shall have the right to require a test or retest of the Heat Rate at any time upon no less than ten (10) Business Days prior written Notice to Seller if Buyer reasonably believes that the current Heat Rate has varied materially from the results of the most recent Heat Rate test. All costs or revenues associated with any Heat Rate test shall be borne by, or accrue to, Buyer, as applicable.

Heat Rate Liquidated Damages: In the event the Heat Rate is higher than the Guaranteed Heat Rate, Seller will pay to Buyer, as liquidated damages and not a penalty, the the
“Heat Rate Liquidated Damages”). Following any Heat Rate test demonstrating a Heat Rate higher than the Guaranteed Heat Rate, Heat Rate Liquidated Damages shall be calculated and reflected as a credit on the next monthly invoice in accordance with Section 8.2.

BESS Resource Efficiency Guaranty
Efficiency Guaranty Testing:

The “Efficiency” of the BESS Resource shall be calculated as follows:

𝐸𝑓𝑓𝑖𝑐𝑖𝑒𝑛𝑐𝑦 =
MWh delivered + Stored Energy𝑒𝑛𝑑
MWh received + Stored Energystart
Where:
(i) MWhdelivered = all measured and recorded Discharging Energy delivered from the BESS Resource at the Metering Point for the Facility during the Measurement Period.
(ii) MWhreceived = all measured and recorded Charging Energy received during charging of the BESS Resource at the Metering Point for the Facility during the Measurement Period.

Exhibit C - 2
(iii) Stored Energyend = available electric energy in the BESS Resource at the end of the Measurement Period.
(iv) Stored Energystart = available electric energy in the BESS Resource at the start of the Measurement Period.
(v) “Measurement Period” means a calendar month.

Liquidated Damages for Failure to Achieve Guaranteed Efficiency Rate If during any month during the Delivery Term, the Efficiency Rate for such month is less than the Guaranteed Efficiency Rate, Seller shall owe liquidated damages to Buyer, which damages shall be calculated by multiplying (i) the total Charging Energy for such month by (ii) the percentage amount by which the Efficiency Rate is less than the Guaranteed Efficiency Rate, by (iii) the simple average of the Day-Ahead Market locational marginal price for all the hours in which Charging Energy was provided in the applicable month, as published by the CAISO, for the Delivery Point for the BESS Resource, provided, that if the foregoing calculation results in a negative value, then no liquidated damages amount shall be owed by either Party.

Exhibit D - 1

EXHIBIT D

STORAGE CAPACITY TESTS
The “Storage Capacity Test,” or “CT,” shall be performed by Seller by maintaining Discharging Energy from the BESS Resource for one (1) hour and the “Effective Discharge Capacity” in megawatts (MW) shall be determined as the quotient of the aggregate quantity of Discharging Energy (MWh) at the end of the one (1) hour test period, as measured at the Delivery Point for the BESS Resource, divided by one (1); provided, however, that the Effective Discharge Capacity cannot exceed the Energy Contract Quantity set forth in the Cover Sheet.

Capacity Test Notice and Frequency
A. Commercial Operation Capacity Test(s). Upon no less than ten (10) Business Days’ prior Notice to Buyer, Seller shall schedule and complete a “Commercial Operation Capacity Test” prior to the Commercial Operation Date. Such initial Commercial Operation Capacity Test shall be performed in accordance with this Exhibit D and shall establish the Installed Capacity hereunder based on the actual capacity and capabilities of the BESS Resource determined by such Commercial Operation Capacity Test(s).

B. Subsequent Capacity Tests. Following the Commercial Operation Date, at least fifteen (15) days in advance of the start of each Contract Year, upon no less than ten (10) Business Days’ prior Notice to Buyer, Seller shall schedule and complete an Annual Storage Capacity Test (“Annual Storage Capacity Test”). In addition to the Annual Storage Capacity Test, if Buyer has a commercially-reasonable basis to believe that the Effective Discharge Capacity is materially less than shown by the most recent test results, Buyer shall have the right to require a Storage Capacity Test at any time upon no less than ten (10) Business Days prior Notice to Seller. Seller shall have the right to run up to three (3) retests of any Storage Capacity Test at any time upon five (5) Business Days’ prior Notice to Buyer (or any shorter period reasonably acceptable to Buyer consistent with Prudent Industry Practice).

C. Test Results and Re-Setting of Effective Discharge Capacity. No later than five (5) days following any Storage Capacity Test, Seller shall submit a testing report detailing results and findings of the test. The report shall include Energy Meter readings from the BESS Resource and plant log sheets verifying the operating conditions and output of the BESS Resource.

Capacity Test Procedures
PART I. GENERAL.

A. Each Storage Capacity Test shall be conducted in accordance with Prudent Industry Practices, the Operating Procedures detailed at Exhibit H, and the provisions of this Exhibit D. Buyer or its representative may be present for the CT.

B. Conditions Prior to Testing.

Exhibit D - 2

1. EMS Functionality. The EMS shall be successfully configured to receive data from the Battery Management System (BMS), exchange DNP3 data with the Buyer SCADA device, and transfer data to the database server for the calculation, recording and archiving of data points.

2. Communications. The Remote Terminal Unit (RTU) testing should be successfully completed prior to any testing. The interface between Buyer’s RTU and the Facility SCADA System should be fully tested and functional prior to starting any testing, including verification of the data transmission pathway between Buyer’s RTU and Seller’s EMS interface and the ability to record SCADA System data.

3. Commissioning Checklist. Commissioning shall be successfully completed per manufacturer guidance on all applicable installed BESS Resource equipment, including verification that all controls, set points, and instruments of the EMS are configured.

PART II. REQUIREMENTS APPLICABLE TO ALL CAPACITY TESTS.

A. Test Elements. Each CT shall include at least the following individual test elements, which must be conducted in the order prescribed in Part III of this Exhibit D, unless the Parties mutually agree to deviations therefrom. The Parties acknowledge and agree that should Seller fall short of demonstrating one or more of the Test Elements as specified below, the Test will still be deemed “complete,” and any adjustments necessary to the Effective Discharge Capacity resulting from such Storage Capacity Test, if applicable, will be made in accordance with this Exhibit D.

1. Electrical output at maximum discharging level (MW) for one (1) hour; and

2. Electrical input at maximum charging level at the Facility Meter (MW), as sustained until the SOC reaches at least 90%, continued by the electrical input at a rate up to the maximum charging level at the BESS Resource Meter (MW), as sustained until the SOC reaches 100%.

B. Parameters. During each CT, the following parameters shall be measured and recorded simultaneously for the Facility, at two (2) second intervals:

1. Time;

2. The amount of Discharging Energy to the BESS Resource Meters (kWh) (i.e., to each measurement device making up the BESS Resource Meter);

3. Net electrical energy input from the BESS Resource Meters (kWh) (i.e., from each measurement device making up the BESS Resource Meter); and

4. Stored Energy Level (MWh).

C. Site Conditions. During each CT, the following conditions at the Site shall be measured Exhibit D - 3
and recorded simultaneously at thirty (30) minute intervals:

1. Relative humidity (%);

2. Barometric pressure (inches Hg) near the horizontal centerline of the BESS Resource; and

3. Ambient air temperature (°F).

D. Test Showing. Each CT shall record and report the following datapoints:

1. That the CT successfully started;

2. The maximum sustained discharging level for one (1) consecutive hour pursuant to A(1) above;

3. The maximum sustained charging level for two (2) consecutive hours (or such lesser time as is required to reach 100% SOC) pursuant to A(2) above;

4. Amount of time between the BESS Resources’ electrical output going from 0 to the maximum sustained discharging level registered during the CT for purposes of calculating the ramp rate (with the parties acknowledging this this value may be effectively instantaneous and unmeasurable with precision);

5. Amount of time between the BESS Resource’s electrical input going from 0 to the maximum sustained charging level registered during the CT (for purposes of calculating the ramp rate);

6. Amount of Charging Energy, registered at the BESS Resource Meters, to go from 0% SOC to 100% SOC;

7. Amount of Discharging Energy, registered at the BESS Resource Meters, to go from 100% SOC to 0% SOC.

E. Test Conditions.

8. General. At all times during a CT, the BESS Resource shall be operated in compliance with Prudent Operating Practices, the Operating Restrictions, and all operating protocols recommended, required or established by the manufacturer for the BESS Resource.

9. Abnormal Conditions. If abnormal operating conditions that prevent the testing or recordation of any required parameter occur during a CT, Seller may postpone or reschedule all or part of such CT in accordance with Part II.F below.

10. Instrumentation and Metering. Seller shall provide all instrumentation, metering and data collection equipment required to perform the CT. The Exhibit D - 4
instrumentation, metering and data collection equipment electrical meters shall be calibrated in accordance with Prudent Industry Practice and, as applicable, the CAISO Tariff.

F. Incomplete Test. If any CT is not completed in accordance herewith, Buyer may in its sole discretion: (i) accept the results up to the time the CT stopped without any modification to the Effective Discharge Capacity pursuant to Section I below; (ii) require that the portion of the CT not completed, be completed within a reasonable specified time period; or (iii) require that the CT be entirely repeated within a reasonable specified time period.

Notwithstanding the above, if Seller is unable to complete a CT due to a Force Majeure Event or the actions or inactions of Buyer or the CAISO or the Transmission Provider, Seller shall be permitted to reconduct such CT subject to providing Buyer with five (5) Business Days’ prior Notice, or such shorter period of time as the Parties may agree.

G. Test Report. Within five (5) Business Days after the completion of any CT, Seller shall prepare and submit to Buyer a written report of the results of the CT, which report shall include:

1. A record of the personnel present during the CT that served in an operating, testing, monitoring or other such participatory role;

2. The measured and calculated data for each parameter set forth in Part II.A through D, including copies of the raw data taken during the test; and

3. Seller’s statement of either Seller’s acceptance of the CT or Seller’s rejection of the CT results and reason(s) therefor.

Within ten (10) Business Days after receipt of such report, Buyer shall notify Seller in writing of either Buyer’s acceptance of the CT results or Buyer’s rejection of the CT and reason(s) therefor. If either Party rejects the results of any CT, such CT shall be repeated in accordance with Part II.F.

H. Supplementary Capacity Test Protocol. No later than sixty (60) days prior to commencing BESS Resource construction, Seller shall, if applicable, deliver to Buyer for its review and approval (such approval not to be unreasonably delayed or withheld) a supplement to this Exhibit D with additional and supplementary details, procedures and requirements applicable to Capacity Tests based on the then current design of the BESS Resource (“Supplementary Capacity Test Protocol”). Thereafter, from time to time, Seller may deliver to Buyer for its review and approval (such approval not to be unreasonably delayed or withheld) any Seller recommended updates to the then-current Supplementary Capacity Test Protocol. The initial Supplementary Capacity Test Protocol (and each update thereto), once approved by Buyer, shall be deemed an amendment to this Exhibit D.

I. Adjustment to Effective Discharge Capacity. Based on each Storage Capacity Test, the Effective Discharge Capacity, which shall be expressed in MW AC, shall be updated to equal the total amount of Discharging Energy delivered to the Delivery Point (expressed in MWh AC) during the first one (1) hour of discharge (up to, but not in excess of, the (a) the Storage Contract Capacity (in the case of a Commercial Operation Capacity Test) or Exhibit D - 5
(b) the Installed Capacity (in the case of any other Capacity Test)).

PART III. INITIAL SUPPLEMENTARY CAPACITY TEST PROTOCOL.

A. Effective Discharge Capacity Test
Procedure:

1. System Starting State: The BESS Resource will be in the on-line state at 0% SOC.

2. Record the initial value of the SOC.

3. Command a real power charge that results in an AC power of BESS Resource’s maximum charging level and continue charging until the earlier of (a) the BESS Resource has reached 100% SOC or (b) two (2) hours have elapsed since the Facility commenced charging.

4. Record and store the SOC after the BESS Resource earlier of (a) the Facility has reached 100% SOC or (b) two (2) hours of continuous charging.

5. Record and store the amount of Charging Energy, registered at the BESS Resource Meters, to go from 0% SOC to 100% SOC.

6. Following one (1) hour rest period, command a real power discharge that results in an AC power output of the BESS Resource’s maximum discharging level and maintain the discharging state until the earlier of (a) the BESS Resource has discharged at the maximum discharging level for one (1) consecutive hour, or (b) the BESS Resource has reached 0% SOC.

7. Record and store the SOC after one (1) hour of continuous discharging.

8. Record and store the Discharging Energy as measured at the BESS Resource Meters. Such data point shall be used for purposes of calculation of the Effective Discharge Capacity.

9. If the BESS Resource has not reached 0% SOC pursuant to Section III.A.6, continue discharging the BESS Resource until it reaches a 0% SOC.

10. Record and store the Discharging Energy as measured at the BESS Resource Meters from the commencement of discharging pursuant to Part III.A.6 until the BESS Resource has reached a 0% SOC pursuant to either Part III.A.7 or Part III.A.9, as applicable.

Test Results:

The resulting Effective Discharge Capacity measurement is the sum of the total Discharging Energy at the BESS Resource Meters.

B. AGC Discharge Test
Exhibit D - 6
 Purpose: This test will demonstrate the AGC discharge capability to achieve the BESS Resource’s maximum discharging level within 1 second.
 System starting date: The BESS Resource will be in the on-line state at 50% SOC and at an initial active power level of 0 MW and reactive power level of 0 MVAR. The EMS will be configured to follow a predefined agreed-upon active power profile.  Procedure:

1. Record the BESS Resource active power level at the BESS Resource Meters.

2. Command the BESS Resource to follow a simulated CAISO RIG signal of PMAX at .95 power factor for ten (10) minutes.

3. Record and store the BESS Resource active power response (in seconds).  System end state: The BESS Resource will be in the on-line state and at a commanded active power level of 0 MW.

C. AGC Charge Test
 Purpose: This test will demonstrate the AGC charge capability to achieve the BESS Resource’s full charging level within 1 second.
 System starting state: The BESS Resource will be in the on-line state at 50% SOC and at an initial active power level of 0 MW and reactive power level of 0 MVAR. The BESS Resource control system will be configured to follow a predefined agreed-upon active power profile.
 Procedure:

1. Record the BESS Resource active power level at the BESS Resource Meters.

2. Command the BESS Resource to follow a simulated CAISO RIG signal of PMAX at .95 power factor for ten (10) minutes.

3. Record and store the BESS Resource active power response (in seconds).  System end state: The BESS Resource will be in the on-line state and at a commanded active power level of 0 MW.

D. Reactive Power Production Test
 Purpose: This test will demonstrate the reactive power production capability of the BESS Resource.
 System starting state: The BESS Resource will be in the on-line state at 50% SOC and at an initial active power level of 0 MW and reactive power level of 0 MVAR. The EMS will be configured to follow an agreed-upon predefined reactive power profile.

Procedure:

1. Record the BESS Resource reactive power level at the BESS Resource Meters.

Exhibit D - 7

2. Command the BESS Resource to follow 15 MW for ten (10) minutes.

3. Record and store the BESS Resource reactive power response.  System end state: The BESS Resource will be in the on-line state and at a commanded reactive power level of 0 MVAR.

E. Reactive Power Consumption Test
 Purpose: This test will demonstrate the reactive power consumption capability of the facility.
 System starting state: The BESS Resource will be in the on-line state at 50% SOC and at an initial active power level of 0 MW and reactive power level of 0 MVAR. The BESS Resource control system will be configured to follow an agreed-upon predefined reactive power profile.

Procedure:

1. Record the BESS Resource reactive power level at the BESS Resource Meters.

2. Command the BESS Resource to follow 15 MW for ten (10) minutes.

3. Record and store the BESS Resource reactive power response.  System end state: The BESS Resource will be in the on-line state and at a commanded reactive power level of 0 MVAR.

Exhibit E - 1

EXHIBIT E

STORAGE AVAILABILITY

1. Monthly Storage Availability
(a) Calculation of Monthly Storage Availability. Seller shall calculate the “Monthly Storage Availability” in a given month using the formula set forth below:

Monthly Storage Availability (%) = 𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝑆𝑡𝑜𝑟𝑎𝑔𝑒 𝐶𝑎𝑝𝑎𝑐𝑖𝑡𝑦 𝑆𝑡𝑜𝑟𝑎𝑔𝑒 𝐶𝑜𝑛𝑡𝑟𝑎𝑐𝑡 𝐶𝑎𝑝𝑎𝑐𝑖𝑡𝑦
where:

Average Storage Capacity = ∑𝐻𝑜𝑢𝑟𝑠 𝐴𝑣𝑎𝑖𝑙𝑎𝑏𝑙𝑒 𝐶𝑎𝑝𝑎𝑐𝑖𝑡𝑦
𝐻𝑜𝑢𝑟𝑠
Where:

Hours = All hours in the month
Available Capacity = for each hour of the month:
(i) the capacity Seller reports to Buyer as being
Available to be scheduled; and

If the BESS Resource is Unavailable for less than a full hour, the Available Capacity shall be the average capacity that was Available during that hour.

If the BESS Resource or any component thereof was previously deemed Unavailable for an hour or part of an hour, and Seller provides a revised Notice indicating the BESS Resource is Available for that hour or part of an hour by 5:00 a.m. of the morning Buyer schedules or bids the Product in the Day-Ahead Market (as defined in the CAISO Tariff), the BESS Resource will be deemed to be Available to the extent set forth in the revised Notice.

2. Availability Adjustment Factor
The applicable “Availability Adjustment Factor” or “AAF” is calculated as follows:

Exhibit E - 2
(i) If the Monthly Storage Availability is greater than or equal to the Guaranteed Storage Availability, then:

AAF = 100%
(ii) If the Monthly Storage Availability is less than the Guaranteed Storage Availability, but , then:

AAF =
(iii) If the Monthly Storage Availability is , then:

AAF = 0
Exhibit F - 1

EXHIBIT F

RA AVAILABILITY

1. Monthly RA Availability
(a) Calculation of Monthly RA Availability. Seller shall calculate the “Monthly RA Availability” in a given Showing Month using the formula set forth below:

Monthly RA Availability (%) = 𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝑅𝐴 𝐶𝑎𝑝𝑎𝑐𝑖𝑡𝑦
𝐺𝑢𝑎𝑟𝑎𝑛𝑡𝑒𝑒𝑑 𝑅𝐴 𝐴𝑚𝑜𝑢𝑛𝑡
where:

Average RA Capacity = ∑𝐻𝑜𝑢𝑟𝑠 𝐴𝑣𝑎𝑖𝑙𝑎𝑏𝑙𝑒 𝑅𝐴 𝐶𝑎𝑝𝑎𝑐𝑖𝑡𝑦
𝐻𝑜𝑢𝑟𝑠
Where:

Hours = All Availability Assessment Hours for the Showing Month Available RA Capacity = for each Availability Assessment Hour of the Showing Month, the lesser of the RA Contract Quantity and:
(i) the total capacity Seller reports to Buyer as being available to be included in the Supply Plan from the Thermal
Resource, plus any Replacement RA for such Availability Assessment Hour; plus
(iii) any capacity for which Seller paid damages pursuant to Section 4.18.

If the Thermal Resource is unavailable for less than a full hour, the Available RA Capacity shall be the average capacity that was available during that hour.

If the Thermal Resource or any component thereof was previously deemed unavailable for an hour or part of an hour, and Seller provides a revised Notice indicating the Thermal Resource is available for that hour or part of an hour by 5:00 a.m. of the morning Buyer schedules or bids the Product in the Day-Ahead Market (as defined in the CAISO Tariff), the Thermal Resource will be deemed to be available to the extent set forth in the revised Notice.

Exhibit F- 2

2. RA Availability Adjustment Factor
The applicable “RA Availability Adjustment Factor” or “RAAAF” is calculated as follows:
(i) If the Monthly RA Availability is greater than or equal to the Guaranteed RA Availability, then:

RAAAF = 100%
(ii) If the Monthly RA Availability is less than the Guaranteed RA Availability, but then:

RAAAF =
(iii) If the Monthly RA Availability is , then:

RAAAF = 0
Exhibit G-1 - 1
EXHIBIT G-1

BESS RESOURCE MAINTENANCE INTERVALS

1.1. BESS Maintenance Plans
(a) Not later than January 15, April 15, July 15 and October 15 of each Contract Year the Seller shall prepare and submit to the Buyer its proposed maintenance plan for the BESS Resource for the following twelve (12)-month period in a form reasonably agreed to by Buyer (a “BESS Maintenance Plan”) identifying any BESS Planned Outage(s) for that Contract Year; provided that the BESS Maintenance Plan for the first Contract Year shall be prepared and submitted by the Seller to the Buyer not later than sixty (60) days after the Commercial Operation Date.
(b) If reasonably required in accordance with Prudent Industry Practices, Seller shall have the right, on no less than thirty (30) days advance Notice to Buyer, to change the BESS Maintenance Plan. Buyer may provide comments no later than ten (10) days after receiving Seller’s Notice of proposed changes to the BESS Maintenance Plan, and Seller shall use reasonable commercial efforts to accommodate such comments.

1.2. BESS Planned Outages
(a)
(b) The Parties shall coordinate, acting reasonably and in good faith, to establish reasonable maintenance schedules for the various components of the BESS Resource.
(c) Seller and Buyer shall use reasonable commercial efforts to coordinate all forecasted maintenance to coincide with Buyer’s forecasted dispatch schedules to minimize any loss of revenue.

1.3. Limited Generation Due to Maintenance
(a) Maintenance may be performed while the BESS Resource is operating at reduced (limited) generation.
(b) Maintenance may be performed on the BESS Resource, or a unit thereof, while the Thermal Resource, or unit(s) thereof, respectively, is operating.

Exhibit G-1- 2

1.4. Allowance for BESS Planned Outages
(a) Outage periods for BESS Planned Outages shall not exceed . This allowance may be used in
increments of an hour or longer on a consecutive or non-consecutive basis.

(b) Any hours during which there is a BESS Planned Outage and Seller provides Replacement RA shall not be deducted from the hours allowed for BESS Planned Outages.

Exhibit G-2 - 1
EXHIBIT G-2

THERMAL RESOURCE MAINTENANCE INTERVALS

1.1. Thermal Maintenance Plans
(a) Not later than January 15, April 15, July 15 and October 15 of each Contract Year the Seller shall prepare and submit to the Buyer its proposed maintenance plan for the Thermal Resource for the following twelve (12)-month period in a form reasonably agreed to by Buyer (a “Thermal Maintenance Plan”) identifying any Thermal Planned Outage(s) for that Contract Year; provided that the Thermal Maintenance Plan for the first Contract Year shall be prepared and submitted by the Seller to the Buyer not later than sixty (60) days after the System RA Start Date. (b) If reasonably required in accordance with Prudent Industry Practices, Seller shall have the right, on no less than thirty (30) days advance Notice to Buyer, change the Thermal Maintenance Plan. Buyer may provide comments no later than ten (10) days after receiving Seller’s Notice of proposed changes to the Thermal Maintenance Plan, and Seller shall use reasonable commercial efforts to accommodate such comments. Seller shall schedule all Thermal Planned Outages within the time period determined by the CAISO for the Thermal Resource, as a Resource Adequacy Resource that is subject to the Availability Standards, to qualify for an “Approved Maintenance Outage” under the CAISO Tariff.

1.2. Scheduled Outages
(a)
(b) The Parties shall coordinate, acting reasonably and in good faith, to establish reasonable maintenance schedules for the various components of the Thermal Resource.
(c) Seller and Buyer shall use reasonable commercial efforts to coordinate all forecasted maintenance to coincide with Buyer’s forecasted dispatch schedules to minimize any loss of revenue.
(d) To the extent commercially reasonable, Seller shall schedule maintenance outages (i) during periods in which CAISO does not require resource substitution or replacement, and (ii) otherwise in a manner to avoid reductions in Resource Adequacy Benefits available from the Thermal Resource to Buyer.

1.3. Major Overhauls During Peak Summer Months
Exhibit G-2 - 2
(a) Major Overhauls may not be scheduled during
. As used herein “Major Overhaul” means
a major overhaul or its equivalent as defined in the applicable original equipment manufacturer’s manual.

1.4. Limited Generation Due to Maintenance
(a) Maintenance may be performed while the Thermal Resource is operating at reduced (limited) generation.
(b) Maintenance may be performed on the Thermal Resource, or a unit thereof, while the BESS Resource, or unit(s) thereof, respectively, is operating.

1.5. Allowance for Thermal Planned Outages
(a)
(b) Any hours during which there is a Thermal Planned Outage and Seller provided Replacement RA shall not be deducted from the hours allowed for Thermal Planned Outages.

Exhibit H - 1

EXHIBIT H

OPERATING PROCEDURES
The Thermal Resource shall be subject to the following technical operating restrictions:

Description Value Notes

1. Generating Capacity 51 MW

2. Daily Dispatch Limits 2 cycles per day

3. Start-up Ramp rate 20 MW/min

4. Interconnection Capacity Limit 52 MW
The BESS Resource shall be subject to the following technical operating restrictions:

Description Value Notes

1. Storage Capacity 52 MW

2. Maximum Stored Energy Level 52 MWh

4. Maximum Charging Capacity 52 MW

5. Minimum Charging Capacity 0 MW

6. Maximum Discharging Capacity 52 MW

7. Minimum Discharging Capacity 0.1 MW

8. Maximum State of Charge (SOC)
during Charging 100%

9. Minimum State of Charge (SOC)
during Discharging 0%

10. Minimum Discharge Duration 1 hour

11. Minimum Charging Duration 1 hour

12. Daily Dispatch Limits

13. Start-up Ramp rate 60 MW/min

14. Charging energy source CAISO Grid

15. Interconnection Capacity Limit 52 MW
Exhibit I - 1

EXHIBIT I

FORM OF LETTER OF CREDIT
[Issuing Bank Letterhead and Address]
IRREVOCABLE STANDBY LETTER OF CREDIT NO. [XXXXXXX]
Date:

Bank Ref.:

Amount: US$[XXXXXXXX]
Expiration Date:

Beneficiary:
[________]
[________]
Attn: [________]
Ladies and Gentlemen:

By the order of [________________] (“Applicant”), we, [insert bank name and address] (“Issuer”) hereby issue our Irrevocable Standby Letter of Credit No. [XXXXXXX] (the “Letter of Credit”) in favor of [__________], a [________] (“Beneficiary”), for an amount not to exceed the aggregate sum of U.S. $[XXXXXX] (United States Dollars [XXXXX] and 00/100), pursuant to that certain Financially Settled Toll and Energy Storage Agreement dated as of ______ and as amended (the “Agreement”) between Applicant and Beneficiary. This Letter of Credit shall become effective immediately and shall expire on [Insert Date] which is one year after the issue date of this Letter of Credit, or any expiration date extended in accordance with the terms hereof (the “Expiration Date”).

Funds under this Letter of Credit are available to Beneficiary by valid presentation on or before the Expiration Date of a dated statement purportedly signed by your duly authorized representative, in the form attached hereto as Exhibit A, containing one of the two alternative paragraphs set forth in paragraph 2 therein, referencing our Letter of Credit No. [XXXXXXX] (“Drawing Certificate”).

The Drawing Certificate may be presented by (a) physical delivery, (b) as a PDF attachment to an e-mail to [bank email address] or (c) facsimile to [bank fax number] confirmed by [e-mail to [bank email address]]. Transmittal by facsimile or email shall be deemed delivered when received.

The original of this Letter of Credit (and all amendments, if any) is not required to be presented in connection with any presentment of a Drawing Certificate by Beneficiary hereunder in order to receive payment.

We hereby agree with the Beneficiary that all documents presented under and in compliance with Exhibit I - 2
the terms of this Letter of Credit will be duly honored upon presentation to the Issuer on or before the Expiration Date. All payments made under this Letter of Credit shall be made with Issuer’s own immediately available funds by means of wire transfer in immediately available United States dollars to Beneficiary’s account as indicated by Beneficiary in its Drawing Certificate or in a communication accompanying its Drawing Certificate.

Partial draws are permitted under this Letter of Credit, and this Letter of Credit shall remain in full force and effect with respect to any continuing balance.

It is a condition of this Letter of Credit that the Expiration Date shall be deemed automatically extended without an amendment for a one year period beginning on the present Expiration Date hereof and upon each anniversary for such date, unless at least one hundred twenty (120) days prior to any such Expiration Date we have sent to you written notice by overnight courier service that we elect not to extend this Letter of Credit, in which case it will expire on the date on the then current Expiration Date, or such later date as may be specified in such notice. No presentation made under this Letter of Credit after such Expiration Date (as may be extended in such notice) will be honored.

This Letter of Credit is issued subject to the rules of the ‘International Standby Practices 1998’, International Chamber of Commerce Publication No. 590 (“ISP98”) and, as to matters not addressed by ISP98, shall be governed and construed in accordance with the laws of state of California.

Notwithstanding any reference in this Letter of Credit to any other documents, instruments or agreements (other than as set forth in the immediately prior paragraph), this Letter of Credit contains the entire agreement between Beneficiary and Issuer relating to the obligations of Issuer hereunder.

Please address all correspondence regarding this Letter of Credit to the attention of the Letter of Credit Department at [insert bank address information], referring specifically to Issuer’s Letter of Credit No. [XXXXXXX]. For telephone assistance, please contact Issuer’s Standby Letter of Credit Department at [XXX-XXX-XXXX] and have this Letter of Credit available.

All notices to Beneficiary shall be in writing and are required to be sent by certified letter, overnight courier, or delivered in person to: [________], Attn: [________], [Insert Address]. Only notices to Beneficiary meeting the requirements of this paragraph shall be considered valid. Any notice to Beneficiary which is not in accordance with this paragraph shall be void and of no force or effect.
[Bank Name]
___________________
[Insert officer name]
[Insert officer title]
Exhibit I - 3
Exhibit A
Drawing Certificate
(DRAW REQUEST SHOULD BE ON BENEFICIARY’S LETTERHEAD)
[Insert Bank Name and Address]
Ladies and Gentlemen:

The undersigned, a duly authorized representative of [_________], a [________], [Insert Address], as beneficiary (the “Beneficiary”) of the Irrevocable Letter of Credit No. [XXXXXXX] (the “Letter of Credit”) issued by [insert bank name] (the “Bank”) by order of [_________], a [________] (the “Applicant”), hereby certifies to the Bank as follows:

1. Applicant and Beneficiary are party to that certain Financially Settled Toll and Energy Storage Agreement dated as of ___________, 20__ (the “Agreement”).

2. Beneficiary is making a drawing under this Letter of Credit in the amount of U.S. $___________ because a Buyer Default (as such term is defined in the Agreement) has occurred or other occasion provided for in the Agreement where Beneficiary is authorized to draw on the Letter of Credit has occurred.

OR
Beneficiary is making a drawing under this Letter of Credit in the amount of U.S. $___________, which equals the full available amount under the Letter of Credit, because Applicant is required to maintain the Letter of Credit in force and effect beyond the Expiration Date of the Letter of Credit but has failed to provide Beneficiary with a replacement Letter of Credit or other acceptable instrument within thirty (30) days prior to such Expiration Date.

3. The undersigned is a duly authorized representative of [_________] and is authorized to execute and deliver this Drawing Certificate on behalf of Beneficiary.

You are hereby directed to make payment of the requested amount to [_________] by wire transfer in immediately available funds to the following account:
[Specify account information]
[_________]
_______________________________
Name and Title of Authorized Representative
Date___________________________
Exhibit J - 1

EXHIBIT J

NOTICES
MRP Pacifica Marketing LLC San Diego Community Power
All Notices:
mailto:

Street: 200 W. Madison St., Suite 3810
City: Chicago, IL 60606
Attn: Kathleen Pokryfke
Phone: 312-766-4551
Email: [email protected]
All Notices:

PO Box 12716
San Diego, CA 92112
Attn: Byron Vosburg, Director of Power Services
Phone: (619) 880-6545
Email: [email protected]
Reference Numbers: Reference Numbers:

Invoices:

Attn: Accounts Payable
Phone: (312) 766-8510
Email: [email protected]
Invoices:

Attn: SDCP Settlements
Phone: (619) 880-6545
Email: [email protected]
Scheduling:

Attn: CalPeak Power LLC
Phone: (760)-530-2323
Email: [email protected]
Scheduling:

Tenaska Power Services Co.

Attn: Kara Whillock
Phone: (972) 333-6122
Email: [email protected]
Day Ahead: (817) 303-1115
Real Time: (817) 303-1852
Facsimile: (817) 303-1104
Confirmations:

Attn:

Phone:

Email: [email protected]
Confirmations:

Attn: SDCP Settlements
Phone: (619) 880-6545
Email: [email protected]
Payments:

Attn: Accounts Payable
Phone: (312) 766-8510
Email: [email protected]
Payments:

Attn: Michael Maher
Phone: (415) 526-3020
Email: [email protected]
Wire Transfer:

BNK:

ABA:

ACCT:

Wire Transfer:

Credit and Collections:

Attn: Kathleen Pokryfke
Email: [email protected]
Phone: (312) 766-4551
Credit and Collections:

Attn: SDCP Finance
Phone: (619) 880-6545
Email: [email protected]
Exhibit J - 2
MRP Pacifica Marketing LLC San Diego Community Power
With additional Notices of an Event of
Default to:

Attn: General Counsel
Phone: (312) 381-8559
Email: [email protected]
Additional notices of an Event of Default to:

Climate Edge Law Group
Attn: Paul Lacourciere
Email: [email protected]
With additional Notices of an Event of Default or
Force Majeure Event to:

Attn: Veera Tyagi General Counsel
PO Box 12716
San Diego, CA 92112
Phone:

Email: [email protected]
Emergency Contact:

Attn: CalPeak Power LLC
Phone: (760)530-2323
Email: [email protected]
Emergency Contact:

Attn: Byron Vosburg, Director of Power
Services
Phone: (619) 880-6545
Email: [email protected]
Exhibit K - 1

EXHIBIT K
[RESERVED]
Exhibit L - 1

EXHIBIT L

FORM OF COMMERCIAL OPERATION DATE CERTIFICATE
This certification (“Certification”) of Commercial Operation is delivered by [LICENSED PROFESSIONAL ENGINEER] (“Engineer”) to San Diego Community Power, a California joint powers authority (“Buyer”) in accordance with the terms of that certain Financially Settled Toll and Energy Storage Agreement dated _________ (“Agreement”) by and between MRP Pacifica Marketing LLC (“Seller”) and Buyer. All capitalized terms used in this Certification but not otherwise defined herein shall have the respective meanings assigned to such terms in the Agreement.

As of [DATE], Engineer hereby certifies and represents to Buyer the following:

1. The BESS Resource is fully operational, reliable and interconnected, fully integrated and synchronized with the Transmission System.

2. Seller has installed equipment for the BESS Resource with a nameplate capacity of no less than ninety-five percent (95%) of the Storage Contract Capacity.

3. Seller has commissioned all equipment in accordance with its respective manufacturer’s specifications.

4. Seller has demonstrated functionality of the BESS Resource’s communication systems and automatic generation control (AGC) interface to operate the BESS Resource as necessary to respond and follow instructions, including an electronic signal conveying real time and intra-day instructions, directed by the Buyer in accordance with the Agreement and/or the CAISO.

5. The BESS Resource is fully capable of charging, storing and discharging energy up to no less than ninety-five percent (95%) of the Storage Contract Capacity and receiving instructions to charge, store and discharge Energy, all within the operational constraints and subject to the applicable Operating Restrictions.

6. Authorization to parallel the BESS Resource was obtained from the Participating Transmission Owner.

7. The Transmission Provider has granted any necessary approvals for Commercial Operation.

8. The CAISO has provided notification supporting Commercial Operation, in accordance with the CAISO Tariff.

EXECUTED by [LICENSED PROFESSIONAL ENGINEER]
this ________ day of _____________, 20__.

Exhibit L - 2
[LICENSED PROFESSIONAL ENGINEER]
By:

Printed Name:

Title:

Exhibit M - 1

EXHIBIT M

FORM OF INSTALLED CAPACITY CERTIFICATE
This certification (“Certification”) of Installed Capacity is delivered by [LICENSED PROFESSIONAL ENGINEER] (“Engineer”) to San Diego Community Power, a California joint powers authority (“Buyer”) in accordance with the terms of that certain Financially Settled Toll and Energy Storage Agreement dated _________ (“Agreement”) by and between MRP Pacifica Marketing LLC (“Seller”) and Buyer. All capitalized terms used in this Certification but not otherwise defined herein shall have the respective meanings assigned to such terms in the Agreement.

I hereby certify the following:

The Commercial Operation Capacity Test demonstrated a maximum dependable operating capability that can be sustained for one hour to discharge electric energy of __ MW AC to the Delivery Point for the BESS Resource, in accordance with the testing procedures, requirements and protocols set forth in Section 4.11 and Exhibit D (the “Installed Capacity”).

EXECUTED by [LICENSED PROFESSIONAL ENGINEER]
this ________ day of _____________, 20__.
[LICENSED PROFESSIONAL ENGINEER]
By:

Printed Name:

Title:

Exhibit N - 1

EXHIBIT N

SCHEDULING COORDINATOR RESPONSIBILITIES
(a) Notices. Seller (as the Facility’s SC) shall use a web-based system through which Seller shall submit to CAISO all notices and updates required under the CAISO Tariff regarding the Facility’s status, including, but not limited to, all outage requests, forced outages, forced outage reports, clearance requests, or must offer waiver forms. Seller will cooperate with Buyer to provide Buyer access to such notices and updates. If the web-based system is not available, Seller shall promptly submit such information to Buyer and the CAISO (in order of preference) telephonically, by electronic mail, transmission to the personnel designated to receive such information.
(b) Seller as Scheduling Coordinator for the Facility. During the Delivery Term, Seller shall be the Scheduling Coordinator or designate a qualified third party to provide Scheduling Coordinator services with the CAISO for the Facility for the delivery of the Product at the Delivery Point and for the purposes of conducting Storage Capacity Tests. As directed by Buyer, Seller (as the Facility’s SC) shall submit Schedules and Supply Plans to the CAISO in accordance with this Agreement and the applicable CAISO Tariff, protocols and Scheduling practices for Product, including on a day-ahead, hour-ahead, fifteen-minute market or real time basis.
(c) CAISO Costs and Revenues. Except during a Storage Capacity Test or as otherwise set forth below, Buyer shall be responsible for CAISO costs (including penalties, Imbalance Energy costs, and other charges) and shall be entitled to all CAISO revenues (including credits, Imbalance Energy revenues, and other payments), including revenues associated with CAISO dispatches, bid cost recovery, or other credits in respect of the Product Scheduled or delivered from the Facility, provided, that Seller shall be responsible for CAISO costs (including penalties, Imbalance Energy costs, and other charges) to the extent such CAISO costs are due to Seller’s failure to schedule the Charging Energy, Discharging Energy or Dispatchable Energy or submit Supply Plans in accordance with Buyer’s instructions and the requirements of this Agreement. Seller shall be responsible for all CAISO penalties resulting from any failure by Seller to abide by the CAISO Tariff or the outage notification requirements set forth in this Agreement except to the extent resulting from compliance with Buyer’s instructions. The Parties agree that any Availability Incentive Payments (as defined in the CAISO Tariff) are for the benefit of the Seller and for Seller’s account and that any Non-Availability Charges (as defined in the CAISO Tariff) are the responsibility of the Seller and for Seller’s account. Buyer shall use reasonable efforts to avoid submitting bids that cause Seller to incur Non-Availability Charges. In addition, if during the Delivery Term, the CAISO implements or has implemented any sanction or penalty related to scheduling, outage reporting, or generator operation, and any such sanctions or penalties are imposed upon the Facility or to Seller as Scheduling Coordinator due to failure by Seller to abide by the CAISO Tariff or the outage notification requirements set forth in this Agreement, the cost of the sanctions or penalties shall be the Seller’s responsibility. Subject to the foregoing, Seller shall pass through to Buyer all CAISO costs and revenues associated with the Facility, which shall be reflected as a credit on the monthly invoices provided to Buyer in accordance with the invoicing and payment provisions of Article 8, including the netting provisions of Section 8.7.

Exhibit N - 2
(d) CAISO Settlements. Seller (as the Facility’s SC) shall be responsible for all settlement functions with the CAISO related to the Facility. (e) Dispute Costs. Seller (as the Facility’s SC) may be required to dispute CAISO settlements in respect of the Facility. If Buyer has directed Seller to dispute a CAISO settlement, Buyer agrees to pay Seller’s costs and expenses (including reasonable attorneys’ fees) associated with its involvement with such CAISO disputes to the extent they relate to CAISO charges payable by Buyer with respect to the Facility.
(f) Master Data File and Resource Data Template. Seller shall provide the data to the CAISO (and to Buyer) that is required for the CAISO’s Master Data File and Resource Data Template (or successor data systems) for the Facility consistent with this Agreement. Neither Party shall change such data without the other Party’s prior written consent. (g) NERC Reliability Standards. Seller (as Scheduling Coordinator) shall comply with NERC reliability standards.
(h) Audit Right. Buyer has the right, at its sole expense, during normal working hours, and after reasonable Notice, to examine the records of Seller to the extent reasonably necessary to verify the accuracy of any statements, charges, revenues, or costs passed through to Buyer in accordance with Seller or the SC providing Scheduling Coordinator services under this Agreement including the costs to procure any natural gas or Substitute Capacity on behalf of Buyer. If such examination reveals any material inaccuracy in any statement, the necessary adjustments shall be made promptly.

Exhibit O - 1

EXHIBIT O

ENERGY RATE CALCULATION

1. Definitions.

As used in this Exhibit O, the following terms, when used herein when initial capitalization, shall have the meanings set forth below:
“Conversion Rate” means .
“Gas Distribution Utility” means San Diego Gas & Electric Company. “Gas Distribution Utility Receipt Point” means SoCal City Gate. “Gas Price” means the Price per MMBtu agreed upon pursuant to a Price Lock Transaction or, if either no Price Lock Transaction has been executed for the Delivery Period or the natural gas usage exceeds the quantity of natural gas subject to Price Lock Transaction, the Spot Price.
“Price Lock Period” means the period of time commencing on 00:00 on the Start Date and ending at 23:59 on the End Date, each as defined below. “Run Hours” means the hours during which the Thermal Resource is, or is planned to be, operated.
“Resource Start” means a start of the Thermal Resource. “Spot Price” means the price listed in Gas Daily Midpoint for the Gas Distribution Utility Receipt Point for the relevant day; provided, if there is no single price published for such location for such day, but there is published a range of prices, then the Spot Price shall be the average of such high and low prices. If no price or range of prices is published for such day, then the Spot Price shall be the average of the following: (i) the price (determined as stated above) for the first day for which a price or range of prices is published that next precedes the relevant day; and (ii) the price (determined as stated above) for the first day for which a price or range of prices is published that next follows the relevant day. “Start Fee” means
“Start-up Fuel” means
“Trading Day” means Monday through Friday, excluding Federal Banking Holidays for transactions in the U.S. starting at 8:00 a.m. Pacific Prevailing Time and ending at 5:00 p.m. Pacific Prevailing Time.

2. Natural Gas Supply.
a. Gas Utility Connection. Seller will, at its sole cost and expense, maintain the Exhibit O - 2
interconnection of the Thermal Resource and gas meter to the Gas Distribution Utility. b. Supply of Gas.
i. Seller will cause the Scheduling Coordinator to procure a sufficient quantity of natural gas for the continuous operation of the Thermal Resource consistent with the dispatch schedule for the Thermal Resource and to deliver such natural gas to the Gas Utility Receipt Point; and
ii. Seller will pay all costs associated with the procurement and delivery of natural gas to the Facility subject to Section 4 of this Exhibit O.

3. Price Lock Process.
a. No later than ten (10) Business Days prior to the Energy Start Date, and thereafter no later than ten (10) Business Days prior to expiration of the applicable Price Lock Period, Buyer shall request that Seller provide a fixed energy price for a specified period of time (a “Price Lock Transaction”). The request shall include the following information:
i. The “Start Date”, which in the case of the first Price Lock Transaction shall be the Energy Start Date and with respect to each subsequent Price Lock Transaction shall be the day after the End Date;
ii. The “End Date”, which shall be no later than 36 months after the Start Date; iii. The number of Resource Starts per day during the Price Lock Period; iv. The number of Run Hours per day during the Price Lock Period.

Buyer may include in a single request up to three variations in the above information and may request that Seller use reasonable commercial efforts to secure quotes from a particular supplier.
b. Following receipt of such request, Seller shall promptly, but in any event within one (1) Trading Day (as defined below), deliver to Buyer a quote for the Energy Rate to be used during the requested Price Lock Period along with an “Acceptance Deadline” by which the quote must be accepted; provided, Seller shall use commercially reasonable efforts to provide Buyer at least ninety (90) minutes to accept a quote. The quote will represent Seller’s commercially reasonable efforts to secure the fixed price fuel for Dispatchable Energy and will include any natural gas transportation and distribution charges, credit charges, scheduling costs, or other adjustments to the market price based on verifiable costs to the Seller. Seller will deliver the quote via email in the following form:

Acceptance Deadline:

Start Date:

Exhibit O - 3
End Date:

Number of Resource Starts per Day:

Number of Run Hours Per Day:

Energy Rate: ($/MWh)
Where the “Energy Rate” is calculated as follows:

𝑃𝑟𝑖𝑐𝑒 𝑝𝑒𝑟 𝑀𝑀𝐵𝑡𝑢 × 𝐶𝑜𝑛𝑣𝑒𝑟𝑠𝑖𝑜𝑛 𝑅𝑎𝑡𝑒
The foregoing represents an offer to fix the Energy Rate under that certain Financially Settled Toll and Energy Storage Agreement by and between San Diego Community Power and MRP Pacifica Marketing LLC dated as of _____________. Neither Party has any obligation with respect to this offer until and unless Buyer accepts such offer in writing prior to the Acceptance Deadline in the form set forth in Exhibit P (a “Price Lock Transaction Order”). This offer expires without further action if it is not accepted in writing prior to the Acceptance Deadline.
c. Where Buyer has included in its request variations in the required information, the quote will indicate which variation it is applicable to. Seller will use commercially reasonable efforts to obtain and deliver to Buyer quotes from multiple suppliers and, if applicable, any supplier that Buyer has specifically requested quotes from.

Notwithstanding the forgoing, Seller shall have no obligation to disclose to Buyer which supplier provided each quote.
d. If Buyer accepts the offer by delivering a Price Lock Transaction Order to Seller prior to the offer’s expiration, then the Price Lock Transaction Order will be used to calculate the Energy Rate under this Agreement for the Price Lock Period, subject to the usage limits set forth below. If the offer expires, Buyer may request that Seller provide a new quote during the same Trading Day and Seller will use reasonable commercial efforts to provide a new quote within that Trading Day.

4. Usage Limits. To the extent that the number of Resource Starts per Day or the Run Hours per Day exceeds the amount subject to a Price Lock Transaction, the Energy Rate and the Start Fee for such excess usage shall be calculated using the Spot Price. To the extent that the Resource Starts per Day or the Run Hours per Day is less than the MMBtu per Day amount subject to a Price Lock Transaction, Seller shall use commercially reasonable efforts to liquidate the associated natural gas consistent with Prudent Industry Practices and shall pass through to Buyer any resulting costs or revenues.

5. Low Carbon Fuel. Buyer and Seller agree to utilize low carbon fuels to the extent commercially reasonable at the Facility. Buyer has the option, but not the obligation, to request Seller to utilize low carbon fuels. Low carbon fuels include pipeline quality renewable natural gas and/or up to 30 percent (30%) hydrogen blended natural gas. Buyer shall give Seller sufficient time to procure low carbon fuels and comply with Local and State regulatory requirements in Exhibit O - 4
accordance with Prudent Industry Practices. The costs and expenses associated with procuring, purchasing and delivering to the Facility low carbon fuels shall be passed through to Buyer. Seller may present to Buyer an Energy Rate based on the cost of such Low Carbon Fuel for consideration of the Price Lock.

Exhibit P - 1

EXHIBIT P
FORM OF “PRICE LOCK TRANSACTION ORDER”
This PRICE LOCK TRANSACTION ORDER (“Order”), is delivered by San Diego Community Power to MRP Pacifica Marketing LLC in accordance with the terms of that certain Financially Settled Toll and Energy Storage Agreement by and between San Diego Community Power, as Buyer, and MRP Pacifica Marketing LLC, as Seller, dated as of ____________ (the “Agreement”). All capitalized terms used in this Order but not otherwise defined herein shall have the respective meanings assigned to such terms in the Agreement.

Pursuant to Exhibit O of the Agreement, Buyer accepts Seller’s offer to fix the Energy Rate as follows:

Seller’s Acceptance Deadline:

Date/Time of Buyer’s Acceptance:

Start Date:

End Date:

Number of Resource Starts per Day:

Number of Run Hours Per Day:

Energy Rate: ($/MWh)
Buyer has caused this Order to be duly executed and delivered by a duly authorized representative on the date written below.

SAN DIEGO COMMUNITY POWER
By: __________________________
Name: __________________________
Title: __________________________
Date: __________________________
Exhibit Q - 1

EXHIBIT Q
Supplier Diversity Survey
Please note that not all questions may apply to your business. For the questions that do not apply, please skip them or answer "Not Applicable" or “Decline to State.” Pursuant to Proposition 209, SDCP does not give preferential treatment based on race, sex, color, ethnicity, or national origin. Providing information in these categories is optional and will not impact your participation in any future SDCP solicitation selection process. Responses are collected for informational and reporting purposes only pursuant to Senate Bill (SB) 255. *Required

1. Business Name*

2. Email Address*

3. Where is your business located/headquartered?

4. Is your business certified under General Order 156 (GO 156)? GO 156 is a California Public Utilities Commission ruling that requires utility entities to report annually on their contracts with majority women-owned, minority-owned, disabled veteran-owned and LGBT-owned business enterprises (WMDVLGBTEs) in all categories. Qualified businesses become GO 156 Certified through the CPUC and are then added to the GO 156 Clearinghouse database at www.thesupplierclearinghouse.com.

Yes
No
Qualified as a WMDVLGBTBE but not GO 156 certified

5. If you answered “yes” to Question 4, when does your certification expire?

6. If you answered “yes” or “qualified, but not certified” to Question 4, in which categories are you certified or qualified? Please choose all that apply.

Minority Owned
Women Owned
LGBT Owned
Disabled Veteran Owned
Small Business Enterprise, as defined by 8(d) of the Small Business Act

7. If your business is a minority-owned business enterprise, what GO156 certification or qualification does your business fall under?
Exhibit Q - 2
Black American
Hispanic American
Asian Pacific American
Native American

8. Please list the Standardized Industrial Code (SIC) of the products and services your business offers. Search for your SIC in the “Commodity Codes” search bar, here:
https://sch.thesupplierclearinghouse.com/FrontEnd/SearchCertifiedDirectory.asp.

9. If certified under GO 156, please list your annual business revenue as reported to the CPUC Supplier Clearinghouse. You may check your CPUC Supplier Clearinghouse status here:
https://sch.thesupplierclearinghouse.com/FrontEnd/SearchCertifiedDirectory.asp.

10. If your business is qualified, but not GO 156 certified, please identify the reasons for not completing the certification process?

11. If your business has used GO 156 certified subcontractors for your SDCP contract, please include a list of your subcontractor business names, if the subcontract is for products or services, and the anticipated subcontract amount. Example: Electrical Design Technology, Inc.; products (batteries); $100,000.

12. If applicable, please describe any hiring policies your business has for using small, local, and/or economically disadvantaged subcontractors or for using subcontractors that qualify for the GO 156 Supplier Clearinghouse.

13. Does your business have a history of using apprenticeship programs, local hires, union labor, or multi-trade project labor agreements? Local hires can be defined as labor-sourced from within SDCP’s service area.

Yes, apprenticeship programs in this recent contract with SDCP Yes, local labor in this recent contract with SDCP
Yes, union labor in this recent contract with SDCP
Yes, multi-trade PLA in this recent contract with SDCP
Yes, apprenticeship programs but not in this contract with SDCP Yes, history of local hire but not in this contract with SDCP Yes, history of union labor but not in this contract with SDCP Yes, history of multi-trade PLA but not in this contract with SDCP Uses California-based labor, but not local to SDCP’s service areas Exhibit Q - 3
None of the above
Not applicable

14. Are you a small business? Please refer to the Small Business Association’ Size Standards tool for more information: https://www.sba.gov/sizestandards.

Yes
No

15. If you answered “yes” to question 14, please describe your history with labor agreements, union labor, multi-trade labor, apprenticeship labor, or how many local workers/businesses you employ for your contract with SDCP.

16. Is there any additional feedback that you would like to provide to SDCP at this time?

17. Does the bidder have formal initiatives to promote diversity, equity, and inclusion among its workforce?

18. If the answer to question 17 is “Yes,”, please explain and provide supporting documentation.

19. Has the bidder adopted formal Environmental, Social, and Governance (ESG) goals?

20. If the answer to question 19 is “Yes”, please explain and provide supporting documentation

SAN DIEGO COMMUNITY POWER
Staff Report – Item 16
--------------------------------------------------------------------------------------------------------------------- To: San Diego Community Power Board of Directors
From: Byron Vosburg, Managing Director, Power Services; and Andrea Torres, Senior Portfolio Manager, Power Services; and Asikeh Kanu, Portfolio Manager, Power Services

Via: Karin Burns, Chief Executive Officer
Subject: Financially Settled Toll and Energy Storage Agreement with MRP Pacifica Marketing II LLC for a thermal resource including 48.04 MW of Resource Adequacy and a co-located 52 MWh Battery Storage (“Enterprise Project”) Date: May 23, 2024
---------------------------------------------------------------------------------------------------------------------

RECOMMENDATION
Approve the proposed Financially Settled Toll and Energy Storage Agreement with MRP Pacifica Marketing II LLC for the Enterprise Project and authorize the CEO to execute the agreement.

BACKGROUND
As San Diego Community Power (SDCP) strives to meet its environmental, financial, and regulatory compliance goals and requirements, long-term contracts of at least 10 years in duration are integral components of its energy supply portfolio. Long-term contracts provide renewable generation facility developers with the certain revenue stream against which they can finance up-front capital requirements, so each long-term contract that SDCP signs with a developing facility will underpin a new, incremental renewable energy project. In addition, long-term contracts lock in energy and capacity supply, as well as energy arbitrage capability around which SDCP can build its power supply portfolio while also providing power supply cost certainty around which SDCP can develop its pro forma financial model.

In D.21-06-025, the California Public Utilities Commission (CPUC) required each Load Serving Entity (LSE) in California to make significant long-term purchase commitments for resource adequacy from new, Incremental generation facilities that will achieve commercial operation during 2023 through 2026.

The proposed contract is for resource adequacy from 48.04 MW of an existing natural gas simple cycle facility with MRP Pacifica Marketing LLC (“MRP”). The contract originated from SDCP’s Local RFI. SDCP has reached terms mutually agreeable to both parties.

ANALYSIS AND DISCUSSION
Staff negotiated the attached financially settled toll and energy storage agreement for the purchase of a financial hedge and capacity attributes from a 48.04 MW combustion turbine (CT) along with a 52 MWAC 1-hour (52 MWh) battery energy storage (BESS) facility in Escondido, California.

The grid-charged BESS facility will operate on a (24/7) basis providing grid reliability. In 2023 the associated legacy plant was operational for just under 400 hours (4.5% of potential run hours). The BESS is expected to significantly decrease the operation of the legacy plant. Further, SDCP is increasing efforts to target and encourage local project development for its generation portfolio. This hybrid resource will satisfy a portion of SDCP’s local, flex, and 24/7 RA compliance needs. SDCP expects a certain amount of technology diversity among its power supply to creatively develop local projects in order to help mitigate risks and provide a portfolio approach to its power procurement.

Below is additional information regarding MRP Pacifica Marketing LLC and the proposed Financially Settled Toll and Energy Storage Agreement.

Background on MRP:
• Middle River Power LLC (“MRP”) will serve as the asset manager for the Enterprise Project. MRP was formed in 2016 with over 6 GW of generation under management, including 380 MW of battery energy storage. • MRP Pacifica Marketing LLC is a wholly owned subsidiary of MRP Golden, LLC, which was founded in 2023 to be an ESG-focused investment manager and has since made substantial investments in the U.S. renewable energy sector.

Contract Overview – Enterprise Project
• Project: 52 MWAC 1-hr (52 MWh) battery energy storage facility constructed on the site of an existing 48.04 MW CT peaker plant
• Project location: Otay Mesa (San Diego)
• Guaranteed Commercial Operation date: December 1, 2026 • Contract term: 15 years
• Pricing: Fixed pricing with no escalation
• SDCP would receive financial compensation in the event of seller’s failure to successfully achieve certain development milestones as well as seller’s failure to deliver local capacity.

Community Benefits and Workforce Development:
• The project is estimated to create over 20 construction jobs. • MRP will enter into an engineering, procurement and construction (EPC) contract to build the battery facility utilizing a Project Labor Agreement. • The project has committed to contribute $125,000 to a community benefit fund to benefit SDCP customers.

COMMITTEE REVIEW
The ECWG recommended the project for further negotiation. On February 16, 2024, the ECWG reviewed the most recently negotiated contract terms and recommended that staff move forward with presentation of this contract to the Board.

FISCAL IMPACT
The competitive toll and capacity pricing of the agreement are confidential, but the long-term purchase of local capacity and the financial toll will provide SDCP with significant value and cost certainty over the term of this agreement.

ATTACHMENTS
Attachment A: Financially Settled Toll and Energy Storage Agreement with MRP Pacifica Market II LLC
Final Executable Version
1 FINANCIALLY SETTLED TOLL AND ENERGY STORAGE AGREEMENT COVER SHEET – ENTERPRISE
Seller: MRP Pacifica Marketing II LLC, a Delaware limited liability company Buyer: San Diego Community Power, a California joint powers authority Effective Date: May ___, 2024
Facility Descriptions: a natural gas-fired power plant with a nameplate capacity of 51 MW and a battery energy storage system (BESS) with a nameplate capacity of 52 MW, co-located in San Diego, California, as further described in Exhibit A (the “Facility”).

RA Contract Quantity: 48.04 MW
RA Reservation Price:

RA Reservation Payment:

Guaranteed RA Availability:

Energy Contract Quantity: 52 MW
Energy Reservation Price:

Energy Reservation Payment:

Energy Rate: Per Exhibit O
Milestone Completion Date
Guaranteed Construction Start Date 12/31/2024
Energy Start Date Commercial Operation Date
Expected Commercial Operation Date 1/1/2026
System RA Start Date 1/1/2026
Local RA Start Date 1/1/2026
2 Milestone Completion Date
Local Area San Diego-Imperial Valley
Gas Turbine Specifications
Generating Capacity (MW) 51
Daily Start Limit 2
Guaranteed Heat Rate
Annual Run Hour Limit
Point of Interconnection Escondido Substation 69 kV
Thermal Resource PNode POD_ESCNDO_6_UNITB1-
APND
BESS Specifications
Storage Contract Capacity (MW/1 hr. discharge) 52 MW
Storage Energy (MWh) 52 MWh
Guaranteed Storage Availability
Guaranteed Efficiency Rate
Minimum Efficiency Rate
Annual Cycle Limit
Point of Interconnection Escondido Substation 69 kV
BESS Resource PNode To be provided prior to COD
Delivery Term: Fifteen (15) Contract Years following the System RA Start Date.

Product:
☒ Capacity Attributes
☒ Facility Energy
☒ Ancillary Services
Scheduling Coordinator: Seller or Seller’s agent
Seller Payment Security:

Development Security:
3 Performance Security:

Special Provisions:

Right of First Offer. If Seller proposes to increase the energy storage capacity of the BESS Resource above 52 MW (the “Additional Storage Capacity”) to take effect during the Term, Buyer shall have a right to make the first offer to contract for to the purchase of discharging energy, resource adequacy benefits, and ancillary services associated with such Additional Storage Capacity. Prior to offering to sell the Additional Storage Capacity to a third party, Seller shall first provide Buyer with Notice of intent to market the energy products from the proposed Additional Storage Capacity for sale (the “ROFO Notice”). Buyer shall have after receipt of the ROFO Notice (“ROFO Response Period”) to provide Seller with a written offer (the “ROFO Offer”) to purchase the energy products from such Additional Storage Capacity. If the Parties do not execute a contract or amend this Agreement for Buyer to purchase the energy products from such Additional Storage Capacity within following the submission of the ROFO Offer, or if Buyer fails provide Seller the ROFO Offer within the ROFO Response Period, then the terms of this paragraph shall no longer apply and Buyer shall have no further rights with respect to such Additional Storage Capacity.

TABLE OF CONTENTS
Page
i
ARTICLE 1 DEFINITIONS ....................................................................................................... 1

1.1 Contract Definitions............................................................................................. 1

1.2 Rules of Interpretation ...................................................................................... 18 ARTICLE 2 TERM; COMMERCIAL OPERATION; OPTIMIZATION
SERVICES.................................................................................................... 19

2.1 Contract Term. ................................................................................................... 19

2.2 Conditions Precedent ......................................................................................... 19

2.3 Scheduling Services ............................................................................................ 20

2.4 Forecasting Services........................................................................................... 21

2.5 Financial Responsibility for Scheduling and Forecasting Services ............... 22 ARTICLE 3 PURCHASE AND SALE .................................................................................... 22

3.1 Purchase and Sale of Product ........................................................................... 22

3.2 Ownership of Standalone Energy Storage Incentives .................................... 23

3.3 Capacity Attributes ............................................................................................ 23

3.4 Energy Rate and Start Fee ................................................................................ 23

3.5 Reservation Payment ......................................................................................... 23

3.6 Test Energy ......................................................................................................... 23

3.7 Emissions ............................................................................................................ 24

3.8 Change in Law.................................................................................................... 24 ARTICLE 4 OBLIGATIONS AND DELIVERIES................................................................ 25

4.1 Product Delivery ................................................................................................ 25

4.2 Transfer of Resource Adequacy Benefits. ....................................................... 25

4.3 Seller’s Option To Provide Alternate Capacity .............................................. 26

4.4 Buyer’s Re-Sale of RA Product ........................................................................ 27

4.5 Hold-Back and Substitute Capacity ................................................................. 28

4.6 Gas Supply .......................................................................................................... 29

4.7 Charging Energy Management ........................................................................ 29

4.8 Reduction in Deliveries ...................................................................................... 31

4.9 RA Availability ................................................................................................... 31

4.10 Storage Availability ........................................................................................... 31

4.11 Storage Capacity Tests ...................................................................................... 31

4.12 Efficiency Guaranty ........................................................................................... 32

4.13 Heat Rate Guaranty ........................................................................................... 32

4.14 Start, Run and Cycle Limits ............................................................................. 32

4.15 Interconnection Capacity .................................................................................. 32

4.16 Title and Risk of Loss ........................................................................................ 32

4.17 Notice of Outages ............................................................................................... 33

4.18 Resource Adequacy Failure .............................................................................. 33 ARTICLE 5 TAXES .................................................................................................................. 33

5.1 Allocation of Taxes and Charges ...................................................................... 33

5.2 Cooperation ........................................................................................................ 34 ii
ARTICLE 6 MAINTENANCE OF THE FACILITY ............................................................ 34

6.1 Maintenance of the Facility ............................................................................... 34

6.2 Maintenance of Health and Safety ................................................................... 34

6.3 Shared Facilities. ................................................................................................ 34 ARTICLE 7 METERING ......................................................................................................... 34

7.1 Metering .............................................................................................................. 34

7.2 Meter Verification .............................................................................................. 34

7.3 Meter Adjustments ............................................................................................ 35 ARTICLE 8 INVOICING AND PAYMENT; CREDIT ........................................................ 35

8.1 Contract Price .................................................................................................... 35

8.2 Statements and Invoicing .................................................................................. 35

8.3 Payment .............................................................................................................. 36

8.4 Books and Records ............................................................................................. 36

8.5 Invoice Adjustments .......................................................................................... 36

8.6 Billing Disputes................................................................................................... 36

8.7 Netting of Payments ........................................................................................... 37

8.8 Payment Security ............................................................................................... 37

8.9 Use of Financial Security ................................................................................... 38 ARTICLE 9 NOTICES ............................................................................................................. 38

9.1 Addresses for the Delivery of Notices............................................................... 38

9.2 Acceptable Means of Delivering Notice ........................................................... 38 ARTICLE 10 FORCE MAJEURE........................................................................................... 39

10.1 Definition ............................................................................................................ 39

10.2 Termination Following Force Majeure Event ................................................. 40

10.3 Notice for Force Majeure. ................................................................................. 40

10.4 ROFO Following Force Majeure Event Termination. ................................... 40 ARTICLE 11 DEFAULTS; REMEDIES; TERMINATION ................................................ 41

11.1 Events of Default ................................................................................................ 41

11.2 Remedies; Declaration of Early Termination Date. ....................................... 42

11.3 Termination Payment ........................................................................................ 43

11.4 Notice of Payment of Termination Payment ................................................... 43

11.5 Disputes With Respect to Termination Payment ............................................ 43

11.6 Rights And Remedies Are Cumulative ............................................................ 44

11.7 Seller Pre-COD Liability Limitations .............................................................. 44 ARTICLE 12 LIMITATION OF LIABILITY AND EXCLUSION OF
WARRANTIES ............................................................................................ 44

12.1 No Consequential Damages ............................................................................... 44

12.2 Waiver and Exclusion of Other Damages ........................................................ 44 ARTICLE 13 REPRESENTATIONS AND WARRANTIES; AUTHORITY ..................... 45 iii

13.1 Seller’s Representations and Warranties ........................................................ 45

13.2 Buyer’s Representations and Warranties ........................................................ 46

13.3 General Covenants ............................................................................................. 46

13.4 Prevailing Wage ................................................................................................. 47

13.5 Community Benefits .......................................................................................... 47

13.6 Supplier Diversity .............................................................................................. 47

13.7 Economic Impacts Report ................................................................................. 47 ARTICLE 14 ASSIGNMENT .................................................................................................. 48

14.1 General Prohibition on Assignments ............................................................... 48

14.2 Collateral Assignment ....................................................................................... 48

14.3 Permitted Assignment by Seller ....................................................................... 50

14.4 Permitted Assignment by Buyer ....................................................................... 50 ARTICLE 15 DISPUTE RESOLUTION ................................................................................ 51

15.1 Governing Law ................................................................................................... 51

15.2 Dispute Resolution ............................................................................................. 51

15.3 Attorneys’ Fees ................................................................................................... 51 ARTICLE 16 INDEMNIFICATION ....................................................................................... 52

16.1 Indemnification. ................................................................................................. 52

16.2 Claims.................................................................................................................. 52

16.3 Rights and Remedies are Cumulative .............................................................. 52 ARTICLE 17 INSURANCE...................................................................................................... 53

17.1 Insurance ............................................................................................................ 53 ARTICLE 18 CONFIDENTIAL INFORMATION ............................................................... 54

18.1 Definition of Confidential Information ............................................................ 54

18.2 Duty to Maintain Confidentiality ..................................................................... 54

18.3 Irreparable Injury; Remedies ........................................................................... 55

18.4 Further Permitted Disclosure. .......................................................................... 55

18.5 Press Releases ..................................................................................................... 56 ARTICLE 19 MISCELLANEOUS .......................................................................................... 56

19.1 Entire Agreement; Integration; Exhibits......................................................... 56

19.2 Amendments ....................................................................................................... 56

19.3 No Waiver ........................................................................................................... 56

19.4 No Agency, Partnership, Joint Venture or Lease ........................................... 56

19.5 Severability ......................................................................................................... 56

19.6 Mobile-Sierra...................................................................................................... 56

19.7 Counterparts ...................................................................................................... 57

19.8 Electronic Delivery............................................................................................. 57

19.9 Binding Effect ..................................................................................................... 57

19.10 No Recourse to Members of Buyer................................................................... 57

19.11 Forward Contract .............................................................................................. 57

19.12 Further Assurances ............................................................................................ 57 iv

19.13 Change in Electric Market Design ................................................................... 58 Exhibits:

Exhibit A Facility Description
Exhibit B Facility Commercial Operation
Exhibit C Efficiency Guaranty
Exhibit D Storage Capacity Tests
Exhibit E Storage Availability
Exhibit F RA Availability
Exhibit G-1 BESS Resource Maintenance Intervals
Exhibit G-2 Thermal Resource Maintenance Intervals
Exhibit H Operating Procedures
Exhibit I Form of Letter of Credit
Exhibit J Notices
Exhibit K Form of Construction Start Date Certificate
Exhibit L Form of Commercial Operation Date Certificate Exhibit M Form of Installed Capacity Certificate
Exhibit N Scheduling Coordinator Responsibilities
Exhibit O Energy Rate Calculation
Exhibit P Form of Price Lock Transaction Order
Exhibit Q Supplier Diversity Survey

FINANCIALLY SETTLED TOLL AND ENERGY STORAGE AGREEMENT
This Financially Settled Toll and Energy Storage Agreement (“Agreement”) is entered into as of Effective Date between Buyer and Seller. Buyer and Seller are sometimes referred to herein individually as a “Party” and jointly as the “Parties.” All capitalized terms used in this Agreement are used with the meanings ascribed to them in Article 1 to this Agreement.

RECITALS
WHEREAS, Seller or its Affiliates owns and operates the Thermal Resource; WHEREAS, Seller or its Affiliates intends to, develop, design, permit, construct, own, and operate the BESS Resource; and
WHEREAS, Seller desires to sell, and Buyer desires to purchase, on the terms and conditions set forth in this Agreement, the Product.

NOW THEREFORE, in consideration of the mutual covenants and agreements herein contained, and for other good and valuable consideration, the sufficiency and adequacy of which are hereby acknowledged, the Parties agree to the following:

ARTICLE 1

DEFINITIONS

1.1 Contract Definitions. The following terms, when used herein with initial capitalization, shall have the meanings set forth below:
“Accepted Compliance Costs” has the meaning set forth in Section 3.8(c). “Additional Storage Capacity” has the meaning set forth on the Cover Sheet. “Administrative NQC Reduction” means a reduction in the maximum achievable Net Qualifying Capacity of the Facility due to a reduction that has been generally applied to resources materially similar to the Facility in terms of type, market and operational characteristics (including those characteristics specified in the CPUC Master Resource Database), including any methodology that incorporates fleet averages or other average outage rates. “Affiliate” means, with respect to any Person, each Person that directly or indirectly controls, is controlled by, or is under common control with such designated Person. For purposes of this definition and the definition of “Permitted Transferee”, “control”, “controlled by”, and “under common control with”, as used with respect to any Person, shall mean (a) the direct or indirect right to cast at least fifty percent (50%) of the votes exercisable at an annual general meeting (or its equivalent) of such Person or, if there are no such rights, ownership of at least fifty percent (50%) of the equity or other ownership interest in such Person, or (b) the right to direct the policies or operations of such Person.
2 “Agreement” has the meaning set forth in the Preamble and includes any Exhibits, schedules and any written supplements hereto, the Cover Sheet, and any designated collateral, credit support or similar arrangement between the Parties. “Alternating Current” or “AC” means alternating current. “Ancillary Services” has the meaning set forth in the CAISO Tariff. “Annual Cycle Limit” means the maximum number of times the BESS Resource can be Cycled each Contract Year as set forth on the Cover Sheet. “Annual Run Hour Limit” means the maximum number of hours the Thermal Resource can be operated each year as set forth on the Cover Sheet. “Available” means that the BESS Resource is available either to be charged or discharged. “Availability Adjustment Factor” has the meaning set forth in Exhibit E. “Availability Assessment Hours” has the meaning set forth in the CAISO Tariff. “Availability Incentive Payments” has the meaning set forth in the CAISO Tariff. “Availability Standards” has the meaning set forth in the CAISO Tariff or such other similar term as modified and approved by FERC hereafter to be incorporated in the CAISO Tariff. “Bankrupt” means with respect to any entity, such entity (a) files a petition or otherwise commences, authorizes or acquiesces in the commencement of a proceeding or cause of action under any bankruptcy, insolvency, reorganization or similar Law, (b) has any such petition filed or commenced against it which remains unstayed or undismissed for a period of ninety (90) days, (c) makes an assignment or any general arrangement for the benefit of creditors, (d) otherwise becomes bankrupt or insolvent (however evidenced), (e) has a liquidator, administrator, receiver, trustee, conservator or similar official appointed with respect to it or any substantial portion of its property or assets, or (f) is generally unable to pay its debts as they fall due. “BESS Planned Outage” means a period during which the BESS Resource is either in whole or in part not capable of providing service due to planned maintenances that has been scheduled in advanced in accordance with Exhibit G-1.
“BESS Resource” means the battery energy storage plant identified in Exhibit A as the “BESS Resource” at the Facility as further described in Exhibit A. “BESS Resource Meters” means the meters used to measure Charging Energy and the Discharging Energy.
“BESS Resource Metering Points” means the location or locations of the BESS Resource Meters.
3 “BESS Resource PNode” means the BESS Resource PNode identified on the Cover Sheet, as such location may be redesignated from time to time by the CAISO. “Business Day” means any day except a Saturday, Sunday, or a Federal Reserve Bank holiday in California. A Business Day begins at 8:00 AM and ends at 5:00 PM Pacific Prevailing Time (PPT).
“Buyer” has the meaning set forth on the Cover Sheet.
“Buyer Default” means an Event of Default of Buyer.
“CAISO” means the California Independent System Operator Corporation. “CAISO Grid” has the same meaning as “CAISO Controlled Grid” as defined in the CAISO Tariff.
“CAISO Tariff” means the California Independent System Operator Corporation Agreement and Tariff, Business Practice Manuals (BPMs), and Operating Procedures (as such term is defined in Appendix A to the CAISO Tariff), including the rules, protocols, procedures and standards attached thereto, as the same may be amended or modified from time-to-time and approved by FERC; provided that if there is a conflict between the BPMs, the CAISO Operating Agreement (as such term is defined in Appendix A to the CAISO Tariff) or the Operating Procedures, on the one hand, and the CAISO Tariff, on the other hand, the CAISO Tariff will control.
“Capacity Attribute” means any current or future defined characteristic, certificate, tag, credit, or accounting construct associated with the amount of power that the Facility can accept at or deliver to the applicable Delivery Point at a particular moment and that can be purchased and sold under CAISO market rules, including Resource Adequacy Benefits. “Carbon Emission Regulations” means those regulations that may be adopted from time to time by the State of California pertaining to limiting, taxing, charging for or otherwise regulating carbon dioxide emissions including, but not limited to, the California Cap and Trade Program (Title 17 California Code of Regulations Sections 95801-96022). “Change of Control” means, except in connection with public market transactions of equity interests or capital stock of Seller’s Ultimate Parent, any circumstance in which Ultimate Parent ceases to own, directly or indirectly through one or more intermediate entities, more than fifty percent (50%) of the outstanding equity interests in Seller; provided, in calculating ownership percentages for all purposes of the foregoing:
(a) any ownership interest in Seller held by Ultimate Parent indirectly through one or more intermediate entities shall not be counted towards Ultimate Parent’s ownership interest in Seller unless Ultimate Parent directly or indirectly owns more than fifty percent (50%) of the outstanding equity interests in each such intermediate entity; and 4 (b) ownership interests in Seller owned directly or indirectly by any Financing Party (including any tax equity provider) shall be excluded from the total outstanding equity interests in Seller.
“Charging Energy” means the Energy delivered to the BESS Resource from the CAISO Grid pursuant to a Charging Notice as measured at the BESS Resource Metering Point by the BESS Resource Meter, as such meter readings are adjusted by the CAISO for any applicable Electrical Losses.
“Charging Notice” means the operating instruction, and any subsequent updates, given by the SC or the CAISO to the Facility, directing the Facility to charge at a specific MW rate for a specified period of time or amount of MWh, provided that any such operating instruction shall be in accordance with the Operating Procedures. For the avoidance of doubt, any Buyer request to initiate a Storage Capacity Test shall not be considered a Charging Notice. “CIRA Tool” means the CAISO Customer Interface for resource adequacy. “CO2e” has the meaning set forth in Title 17 of the California Code of Regulations § 95802 as the same may be amended or modified from time to time. “COD Delay Damages” means
“COD Delay Period” has the meaning set forth in Exhibit B. “Collateral Assignment Agreement” has the meaning set forth in Section 14.2. “Commercial Operation” means the conditions for commercial operation of the BESS Resource set forth in Exhibit B have been satisfied.
"Commercial Operation Capacity Test” has the meaning set forth in Exhibit D. “Commercial Operation Date” means the date on which Commercial Operation is achieved and the conditions set forth in Section 2.2 have been satisfied. “Compliance Action” has the meaning set forth in Section 3.8(a). “Compliance Costs” has the meaning set forth in Section 3.8(a). “Compliance Expenditure Cap” has the meaning set forth in Section 3.8(a). “Compliance Showings” means the (a) the compliance or advisory showings (or similar or successor showings) that Buyer is required to make to the CPUC (and, to the extent authorized by the CPUC, to the CAISO), and (b) if applicable, the Local RAR compliance or advisory showings (or similar or successor showings) that Buyer is required to make to the CPUC (and, to the extent authorized by the CPUC, to the CAISO), in each case of (a) and (b) pursuant to the Resource Adequacy Rulings, to the CAISO pursuant to the CAISO Tariff, or to any Governmental Authority having jurisdiction.
5 “Confidential Information” has the meaning set forth in Section 18.1. “Contract Price” has the meaning set forth in Section 8.1. “Contract Term” has the meaning set forth in Section 2.1(a). “Contract Year” means a period of twelve (12) consecutive months beginning on the System RA Start Date or an anniversary thereof and ending at midnight at the end of the day prior to the applicable anniversary of such System RA Start Date. “Construction Delay Damages” means an amount equal to (a) the Development Security required hereunder, divided by (b) one hundred twenty (120). “Construction Start” has the meaning set forth in Exhibit B. “Costs” means, with respect to the Non-Defaulting Party, brokerage fees, commissions and other similar third-party transaction costs and expenses reasonably incurred by such Party either in terminating any arrangement pursuant to which it has hedged its obligations or entering into new arrangements which replace the Agreement; and all reasonable attorneys’ fees and expenses incurred by the Non-Defaulting Party in connection with terminating the Agreement. “Cover Sheet” means the cover sheet to this Agreement, which is incorporated into this Agreement.
“CPM Capacity” has the meaning set forth in the CAISO Tariff. “CPM Capacity Payment” has the meaning set forth in the CAISO Tariff. “CPM Soft Offer Cap” has the meaning set forth in the CAISO Tariff. “CPUC” means the California Public Utilities Commission or any successor agency performing similar statutory functions.
“CPUC Filing Guide” is the document issued annually by the CPUC which sets forth the guidelines, requirements and instructions for load serving entities to demonstrate compliance with the CPUC’s resource adequacy program.
“CPUC System RA Penalty” means the System RA Penalties assessed against load-serving entities by the CPUC for Resource Adequacy Requirement deficiencies that are not replaced or cured, as established in the Resource Adequacy Rulings and subsequently incorporated into the annual “Filing Guide for System, Local and Flexible Resource Adequacy Compliance Filings” that is issued by the CPUC Energy Division, which is expected to be updated annually, or any replacement or successor documentation established by the CPUC Energy Division to reflect Resource Adequacy Requirement penalties that are established by the CPUC and assessed against load-serving entities for Resource Adequacy Requirement deficiencies. “Credit Rating” means, with respect to any entity, the rating then assigned to such entity’s unsecured, senior long-term debt obligations (not supported by third party credit enhancements) 6 or if such entity does not have a rating for its senior unsecured long-term debt, then the rating then assigned to such entity as an issuer rating by S&P or Moody’s. If ratings by S&P and Moody’s are not equivalent, the lower rating shall apply.
“Cycle” means each time that the total MWhs discharged from the BESS Resource equals the Maximum Stored Energy Level for the BESS Resource as set forth in Exhibit A. “Daily Start Limit” means the maximum number of times the Thermal Resource can be started each day as set forth on the Cover Sheet.
“Damage Payment” means the dollar amount that equals the amount of the Development Security.
"Day-Ahead Market” has the meaning set forth in the CAISO Tariff. “Dealer” means an entity or person that buys or sells power and takes title to the power at some point.
“Deemed Delivered RA” means, for the applicable Showing Month, the amount of Net Qualifying Capacity, expressed in MW, that the Facility would have been able to deliver as Resource Adequacy Benefits, but for (a) a Force Majeure Event as provided in Section 10.1, (b) Thermal Planned Outages permitted by the terms of this Agreement to the extent such Thermal Planned Outages reduce the maximum achievable Net Qualifying Capacity of the Thermal Resource; or (c) the acts or omissions of Buyer.
“Defaulting Party” has the meaning set forth in Section 11.1(a). “Delivered RA” means an amount, expressed in MW, calculated for the applicable Showing Month as the sum of (a) the amount of the Net Qualifying Capacity of the Facility for such Showing Month able to be shown on Buyer’s monthly or annual Resource Adequacy Plan to the CAISO and CPUC and able to be counted as Resource Adequacy Benefits by both the CAISO and CPUC, (b) Deemed Delivered RA and (c) Replacement RA. “Delivery Point” shall mean the Thermal Resource PNode or the BESS Resource PNode, as applicable.
“Delivery Term” has the meaning set forth on the Cover Sheet. “Development Cure Period” has the meaning set forth in Exhibit B. “Development Security” means (i) cash or (ii) a Letter of Credit, in each case in the amount set forth on the Cover Sheet for “Development Security”. “Discharging Energy” means all Energy delivered to the Delivery Point from the BESS Resource, net of the Electrical Losses, as measured at the BESS Resource Metering Point by the BESS Resource Meter. All Discharging Energy will have originally been delivered to the BESS Resource from the CAISO Grid as Charging Energy.
7 “Discharging Notice” means the operating instruction, and any subsequent updates, given by Buyer to Seller, directing the Facility to discharge Discharging Energy at a specific MW rate to a specified Stored Energy Level, provided that any such operating instruction or updates shall be in accordance with the Operating Procedures.
“Disclosing Party” has the meaning set forth in Section 18.2. “Dispatchable Energy” means all Energy delivered by the Thermal Resource. “Early Termination Date” has the meaning set forth in Section 11.2(a). “Efficiency Rate” means the round-trip efficiency of the BESS Resource determined in accordance with Exhibit C.
“Effective Date” has the meaning set forth on the Cover Sheet. “Electrical Losses” means, subject to meeting any applicable CAISO requirements and in accordance with Section 7.1, losses of Energy along with all transmission or transformation losses between the Delivery Point and the Facility.
“Energy” means alternating current electrical energy measured in MWh. “Energy Contract Quantity” has the meaning set forth on the Cover Sheet. “Energy Meter” means the meters used to measure Charging Energy, Discharging Energy and Dispatchable Energy, as applicable.
“Energy Rate” has the meaning set forth on the Cover Sheet. “Energy Reservation Payment” has the meaning set forth on the Cover Sheet. “Energy Reservation Price” has the meaning set forth on the Cover Sheet. “Energy Start Date” has the meaning set forth on the Cover Sheet. “Environmental Attributes” means any and all environmental characteristics, environmental claims, environmental credits, environmental benefits, environmental emissions reductions, environmental offsets, environmental allowances and environmental allocations, existing now or in the future, howsoever characterized, denominated, measured or entitled, attributable to the generation, storage or discharge of Energy from the Facility. “Excused Event” has the meaning set forth in Exhibit E. 8 “Expected Commercial Operation Date” has the meaning set forth on the Cover Sheet. “Event of Default” has the meaning set forth in Section 11.1. “Facility” means the energy generation and storage facility described on the Cover Sheet and in Exhibit A (including the operational requirements of the energy generation and storage facility), located at the Site and related generation, storage and mechanical equipment and associated facilities and equipment required to deliver Product (but excluding any Shared Facilities), and as such generation and storage facility may be expanded or otherwise modified from time to time in accordance with the terms of this Agreement. This equipment includes but is not limited to gas turbine engines, transformers, batteries, fire suppression, thermal management, enclosures, and inverters.
“Facility Energy” means the Discharging Energy and the Dispatchable Energy. “FERC” means the Federal Energy Regulatory Commission.
“Financial Security” means the Development Security or the Performance Security, as applicable.
“Financing Party” means, collectively, any Person (i) providing senior or subordinated construction, interim, back leverage and/or long-term debt, equity or tax equity financing or refinancing for or in connection with the development, construction, purchase, installation or operation of the Facility, whether that financing or refinancing takes the form of private debt (including back-leverage debt), equity (including tax equity), public debt or any other form (including financing or refinancing provided to a member or other direct or indirect owner of Seller), including any equity or tax equity investor directly or indirectly providing financing or refinancing for the Facility or purchasing equity ownership interests of Seller or its Affiliates, and any trustee or agent or similar representative acting on their behalf, (ii) providing Interest Rate or commodity protection under an agreement hedging or otherwise mitigating the cost of any of the foregoing obligations or (iii) participating in a lease financing (including a sale leaseback or leveraged leasing structure) with respect to the Facility. “Flexible Capacity Category” shall be as described in the annual CPUC Filing Guide, as such may be modified, amended, supplemented or updated from time to time. “Flexible Ramping Product” has the meaning set forth in the CAISO Tariff. “Forecasting Agreement” has the meaning set forth in Section 2.4(a). “Force Majeure Event” has the meaning set forth in Section 10.1. “Gains” means, with respect to any Party, an amount equal to the present value of the economic benefit to it, if any (exclusive of Costs), resulting from the termination of this Agreement for the remaining Contract Term, determined in a commercially reasonable manner. Factors used in determining the economic benefit to a Party may include, without limitation, reference to information supplied by one or more third parties, which shall exclude Affiliates of the Non-Defaulting Party, including without limitation, quotations (either firm or indicative) of relevant 9 rates, prices, yields, yield curves, volatilities, spreads or other relevant market data in the relevant markets, comparable transactions, forward price curves based on economic analysis of the relevant markets, settlement prices for comparable transactions at liquid trading hubs (e.g., SP-15), all of which should be calculated for the remaining Contract Term, and include the value of Capacity Attributes.
“Gas Distribution Utility” has the meaning set forth in Exhibit O. “Gas Utility Receipt Point” has the meaning set forth in Exhibit O. “Gas Meter” means the meters used to measure the natural gas supplied to the Thermal Resource.
“Governmental Approval” means all authorizations, consents, approvals, waivers, exceptions, variances, filings, permits, orders, licenses, exemptions, notices to and declarations of or with any Governmental Authority and shall include (i) with respect to Seller, those siting and operating permits and licenses, and any of the foregoing under any applicable environmental Law, that are required for the use and operation of the Facility and (ii) with respect to Buyer, those federal licenses and state market participation agreements necessary or appropriate to take delivery of and resell electricity.
“Governmental Authority” means any federal, state, provincial, local or municipal government, any political subdivision thereof or any other governmental, quasi governmental, congressional or parliamentary, regulatory, or judicial instrumentality, authority, body, agency, department, bureau, or entity with authority to bind a Party at law, including CAISO; provided, however, that “Governmental Authority” shall not in any event include any Party. “Guaranteed Commercial Operation Date” has the meaning set forth in Exhibit B. “Guaranteed Construction Start Date” has the meaning set forth on the Cover Sheet. “Guaranteed Efficiency Rate” means the percentage specified on the Cover Sheet. “Guaranteed Heat Rate” has the meaning set forth on the Cover Sheet. “Guaranteed RA Availability” has the meaning set forth on the Cover Sheet. “Guaranteed RA Amount” means the RA Contract Quantity, less any reduction in the Facility’s Net Qualifying Capacity resulting from

“Guaranteed Storage Availability” has the meaning set forth on the Cover Sheet. “Heat Rate” has the meaning set forth in Exhibit C.
“Heat Rate Liquidated Damages” has the meaning set forth in Exhibit C. 10 “Hold-Back Capacity” has the meaning set forth in Section 4.5. “Indemnifiable Loss(es)” has the meaning set forth in Section 16.1(a). “Indemnified Party” has the meaning set forth in Section 16.1(a). “Indemnifying Party” has the meaning set forth in Section 16.1(a). “Installed Capacity” has the meaning set forth in Exhibit M. “Interconnection Agreement” means the interconnection agreements among Seller (or Seller’s Affiliate), the CAISO, and the Participating Transmission Owner, pursuant to which (i) the Thermal Resource will be interconnected with the Transmission System, providing for interconnection capacity available or allocable to the Thermal Resource that is no less than the RA Contract Quantity, (ii) the BESS Resource will be interconnected with the Transmission System, providing for interconnection capacity available or allocable to the BESS Resource that is no less than the Energy Contract Quantity, provided that such interconnection capacity may be maintained through a combination of rights under the Interconnection Agreement dedicated to the BESS Resource and under an Interconnection Agreement shared with the Thermal Resource, and pursuant to which the applicable Interconnection Facilities and any other Interconnection Facilities have or will be constructed, operated and maintained during the Delivery Term. “Interconnection Delays” means any delay in achieving Commercial Operation due to any delay in obtaining the Interconnection Agreement or completing the Interconnection Facilities under the Interconnection Agreement provided that in either case Seller has taken commercially reasonable actions to obtain the Interconnection Agreement and cause the applicable Interconnection Facilities to be completed.
“Interconnection Facilities” means the interconnection facilities, control and protective devices and metering facilities required to connect the Facility with the Transmission System in accordance with the Interconnection Agreement.
“Interest Rate” has the meaning set forth in Section 8.3. “Investment Grade Credit Rating” means a Credit Rating of (i) BBB- or higher by S&P and Baa3 or higher by Moody’s if the Person is rated by both agencies, or (ii) a Credit Rating of BBB- or higher by S&P or Baa3 or higher by Moody’s if the Person is rated by only one of the agencies.
“Joint Powers Act” means the Joint Exercise of Powers Act of the State of California (Government Code Section 6500 et seq.).
“Joint Powers Agreement” means that certain Joint Powers Agreement dated October 1, 2019, as amended, under which Buyer is organized as a Joint Powers Authority in accordance with the Joint Powers Act.
11 “Law” means any applicable law, statute, rule, regulation, decision, writ, order, decree or judgment, permit or any interpretation thereof, promulgated or issued by a Governmental Authority.
“Letter(s) of Credit” means one or more irrevocable, standby letters of credit issued by a U.S. commercial bank, or U.S. branch of a foreign bank, with such bank having a Credit Rating of at least A- with an outlook designation of “stable” from S&P or A3 with an outlook designation of “stable” from Moody’s, in a form substantially similar to the letter of credit set forth in Exhibit I.
“Licensed Professional Engineer” means an independent, professional engineer selected by Seller and reasonably acceptable to Buyer, licensed in the State of California. “Limited Assignee” has the meaning set forth in Section 14.4. “Local RA Start Date” has the meaning set forth on the Cover Sheet. “Local RAR” means the local Resource Adequacy Requirements established for load serving entities by the CPUC pursuant to the Resource Adequacy Rulings, the CAISO pursuant to the CAISO Tariff, or by any other Governmental Authority having jurisdiction. “Local RAR Attributes” means, with respect to the Facility, any and all Resource Adequacy Benefits of the Facility, as may be identified from time to time by the CPUC, CAISO, or other Governmental Authority having jurisdiction over Local RAR that can be counted toward Buyer’s Local RAR.
“Losses” means, with respect to the Non-Defaulting Party, an amount equal to the present value of the economic loss to it, if any (exclusive of Costs), resulting from termination of this Agreement for the remaining Contract Term, determined in a commercially reasonable manner, which economic loss (if any) shall be deemed to be the loss (if any) to such Party represented by the difference between the present value of the payments required to be made during the remaining Contract Term of this Agreement and the present value of the payments that would be required to be made under transaction(s) replacing this Agreement. Factors used in determining economic loss to a Party may include reference to information supplied by one or more third parties, which shall exclude Affiliates of the Non-Defaulting Party, including quotations (either firm or indicative) of relevant rates, prices, yields, yield curves, volatilities, spreads or other relevant market data in the relevant markets, comparable transactions, forward price curves based on economic analysis of the relevant markets, settlement prices for comparable transactions at liquid trading hubs (e.g., NP-15), all of which should be calculated for the remaining Contract Term and must include the value of Capacity Attributes.
“Major Subcontractor” means
“Minimum Efficiency Rate” means the percentage specified on the Cover Sheet. “Monthly RA Availability” has the meaning set forth in Exhibit F. 12 “Monthly Storage Availability” has the meaning set forth in Exhibit E. “Moody’s” means Moody’s Investors Service, Inc.
“Must Offer Obligations” means the obligation to bid or cause the SC to bid the applicable resource into the CAISO Markets in order for the applicable resource to qualify to deliver Resource Adequacy Benefits.
“MW” means megawatts in alternating current, unless expressly stated in terms of direct current.
“MWh” means megawatt-hour measured in alternating current, unless expressly stated in terms of direct current.
“Net Qualifying Capacity” has the meaning set forth in the CAISO Tariff. “Non-Availability Charges” has the meaning set forth in the CAISO Tariff. “Non-Defaulting Party” has the meaning set forth in Section 11.2. “Notice” shall, unless otherwise specified in the Agreement, mean written communications by a Party to be delivered by hand delivery, United States mail, overnight courier service, or email in accordance with Article 9.
“Notification Deadline” means thirty (30) days before the relevant deadlines for the corresponding Compliance Showings applicable to the relevant Showing Month, provided that for the Showing Months of August and September, the Notification Deadline means sixty (60) days before the relevant deadline for the corresponding Compliance Showing. “Operating Procedures” means those rules, requirements, and procedures developed pursuant to Section 2.2 consistent with Exhibit H, as the same may be modified from time to time in accordance with this Agreement.
“Pacific Prevailing Time” means the prevailing standard time or daylight savings time, as applicable, in the Pacific time zone.
“Participating Transmission Owner” or “PTO” means an entity that owns, operates and maintains transmission or distribution lines and associated facilities or has entitlements to use certain transmission or distribution lines and associated facilities where the Facility is interconnected. For purposes of this Agreement, the Participating Transmission Owner for the Facility is set forth in Exhibit A.
“Party” or “Parties” has the meaning set forth in the Preamble. “Performance Security” means (i) cash or (ii) a Letter of Credit, in either case in the amount set forth on the Cover Sheet for “Performance Security.” 13 “Permitted Transferee” means (i) any Affiliate of Seller, (ii) any entity that satisfies, or is controlled by another Person that satisfies, the following requirements:
(a) A tangible net worth of not less than on hundred fifty million dollars ($150,000,000) or a Credit Rating of at least BBB- from S&P or Baa3 from Moody’s; and (b) At least three (3) years of experience in the ownership and operations of facilities similar to the Facility, or has retained a third-party with such experience to operate the Facility; or
(iii) or any other entity approved in writing by Buyer acting reasonably and in good faith. “Person” means any individual, sole proprietorship, corporation, limited liability company, limited or general partnership, joint venture, association, joint-stock company, trust, incorporated organization, institution, public benefit corporation, unincorporated organization, government entity or other entity.
“Prevailing Wage Requirement” has the meaning set forth in Section 13.4. “Price Lock Transaction” has the meaning set forth in Exhibit O. “Product” has the meaning set forth on the Cover Sheet. “Prudent Industry Practice” means (a) the applicable practices, methods and acts required by or consistent with applicable Laws and reliability criteria, and otherwise engaged in or approved by a significant portion of the electric utility industry during the relevant time period with respect to grid-interconnected, utility-scale generating facilities with integrated storage or standalone storage facilities in the Western United States, or (b) any of the practices, methods and acts which, in light of the facts known at the time the decision was made, could have been expected to accomplish the desired result at a reasonable cost consistent with good business practices, reliability, safety and expedition. Prudent Industry Practice is not intended to be limited to the optimum practice, method or act to the exclusion of all others, but rather to acceptable practices, methods or acts generally accepted in the industry with respect to grid-interconnected, utility-scale generating facilities with integrated storage or stand-alone storage in the Western United States.

Prudent Industry Practice includes compliance with applicable Laws, applicable reliability criteria, and the criteria, rules and standards promulgated in the National Electric Safety Code and the National Electrical Code, as they may be amended or superseded from time to time, including the criteria, rules and standards of any successor organizations. “Qualifying Capacity” has the meaning set forth in the CAISO Tariff. “RA Availability Cure Plan” has the meaning set forth in Section 11.1(b). “RA Contract Quantity” has the meaning set forth on the Cover Sheet. “RA Deficiency Amount” means the liquidated damages payment that Seller shall pay to Buyer for an applicable RA Shortfall Month, as calculated in accordance with Section 4.18(b). 14 “RA Product” has the meaning set forth in Section 4.2(a). “RA Reservation Payment” has the meaning set forth on the Cover Sheet. “RA Shortfall” means, for a given Showing Month, the difference, expressed in kW, of (a) the Guaranteed RA Amount minus (b) Delivered RA. If the result of the calculation is a negative number, the RA Shortfall shall be deemed to be zero kW for such Showing Month. “RA Shortfall Month” means, for purposes of calculating an RA Deficiency Amount under Section 4.18(b), any month during the Delivery Term during which there is a RA Shortfall. “Receiving Party” has the meaning set forth in Section 18.2. “Reliability Network Upgrades” has the meaning set forth in the CAISO Tariff. “Replacement RA” means Resource Adequacy Benefits, if any, equivalent to those that would have been provided by the Facility with respect to the applicable Showing Month, including, as applicable, Resource Category and Flexible Capacity Category, and any successor criteria applicable to the Facility, and any Local RAR; provided that any Replacement RA capacity must be communicated by Seller to Buyer with Replacement RA product information in a Notice to Buyer no later than the Notification Deadline.
“Replacement Unit” has the meaning set forth in Section 4.3. “Requested Confidential Information” has the meaning set forth in Section 18.2. “Resource Adequacy Benefits” means the rights and privileges attached to the Facility associated with the RA Contract Quantity that satisfy any entity’s Resource Adequacy Requirements, as those obligations are set forth in any Resource Adequacy Rulings and includes any local, zonal or otherwise locational attributes associated with the Facility, in addition to flex attributes.
“Resource Adequacy Plan” has the meaning set forth in the CAISO Tariff. “Resource Adequacy Requirements” or “RAR” means the resource adequacy requirements applicable to an entity as established by the CAISO pursuant to the CAISO Tariff, by the CPUC pursuant to the Resource Adequacy Rulings, or by any other Governmental Authority.
“Resource Adequacy Resource” has the meaning set forth in the CAISO Tariff. “Resource Adequacy Rulings” means CPUC Decisions 04-01-050, 04-10-035, 05-10-042, 06-04-040, 06-06-064, 06-07-031 06-07-031, 07-06-029, 08-06-031, 09-06-028, 10-06-036, 11-06-022, 12-06-025, 13-06-024, 14-06-050, 15-06-063, 16-06-045, 17-06-027, 18- 06-030, 18-06-031, 19-02-022, 19-06-026, 19-10-021, 20-01-004, 20-03-016, 20-06-002, 20-06- 031, 20-06-028, 20-12-006, and any other existing or subsequent decisions, resolutions, or rulings related to resource adequacy, including, without limitation, the CPUC Filing Guide, in each case as may be amended from time to time by the CPUC, and any other existing or subsequent ruling 15 or decision, or any other resource adequacy Law, however described, as such decisions, rulings, Laws, rules or regulations may be amended or modified from time-to-time throughout the Delivery Term.
“Resource Category” shall be as described in the annual CPUC Filing Guide, as such may be modified, amended, supplemented or updated from time to time. “Resource Start” has the meaning set forth in Exhibit O. “ROFO Notice” has the meaning set forth on the Cover Sheet. “ROFO Offer” has the meaning set forth on the Cover Sheet. “ROFO Response Period” has the meaning set forth on the Cover Sheet. “S&P” means the Standard & Poor’s Financial Services, LLC (a subsidiary of The McGraw-Hill Companies, Inc.).
“SC Agreement” has the meaning set forth in Section 2.3(a). “Schedule” has the meaning set forth in the CAISO Tariff, and “Scheduled” has a corollary meaning.
“Scheduling Coordinator” or “SC” means an entity certified by the CAISO as qualifying as a Scheduling Coordinator pursuant to the CAISO Tariff for the purposes of undertaking the functions specified in “Responsibilities of a Scheduling Coordinator,” of the CAISO Tariff, as amended from time to time.
“Seller” has the meaning set forth on the Cover Sheet.
“Settlement Amount” means the Non-Defaulting Party’s Costs and Losses, on the one hand, netted against its Gains, on the other. If the Non-Defaulting Party’s Costs and Losses exceed its Gains, then the Settlement Amount shall be an amount owing to the Non-Defaulting Party. If the Non-Defaulting Party’s Gains exceed its Costs and Losses, then the Settlement Amount shall be Zero Dollars ($0).
“Shared Facilities” means the gen-tie lines, transformers, substations, or other equipment, permits, contract rights, and other assets and property (real or personal), in each case, as necessary to enable delivery of Energy from the Facility (which is excluded from Shared Facilities) to the point of interconnection, including the Interconnection Agreement itself, that are used in common with third parties or by Seller for electric generation or storage facilities owned by Seller other than the Facility.
“Shared Facilities Agreement” has the meaning set forth in Section 6.3. “Showing Month” means the calendar month of the Delivery Term that is the subject of the Compliance Showing, as set forth in the Resource Adequacy Rulings and outlined in the CAISO Tariff. For illustrative purposes only, pursuant to the CAISO Tariff and Resource 16 Adequacy Rulings in effect as of the Effective Date, the monthly Compliance Showing made in June is for the Showing Month of August.
“Shown Unit” means the Thermal Resource, the BESS Resource, or any Replacement Unit, as applicable.
“Site” means the applicable real property on which the Facility is or will be located, as further described in Exhibit A.
“Standalone Energy Storage Incentives” means: (a) all federal, state, or local Tax Credits or other Tax benefits associated with the construction or ownership of the BESS Resource (including credits under Sections 38, 45, 46 and 48 of the Internal Revenue Code of 1986, as amended); (b) any federal, state, or local grants, subsidies or other like benefits relating in any way to the BESS Resources; and (c) any other form of incentive relating in any way to the BESS Resources that is not an Environmental Attribute associated with Charging Energy. “Start Fee” has the meaning set forth in Exhibit O.
“Station Power” means:
(a) The Energy produced or discharged by the Facility that is used within the Facility to power the lights, motors, cooling equipment, control systems and other electrical loads that are necessary for operation of the Facility; and
(b) the Energy produced or discharged by the Facility that is consumed within the Facility’s electric energy distribution system as losses. “Storage Availability Cure Plan” has the meaning set forth in Section 11.1(b)(iii). “Storage Capacity” means the maximum dependable capability of the BESS Resource to discharge Energy at a particular moment.
“Storage Capacity Test” means any test or retest of the capacity of the BESS Resource conducted in accordance with the testing procedures, requirements and protocols set forth in Section 4.11 and Exhibit D.
“Storage Contract Capacity” has the meaning set forth on the Cover Sheet. “Storage Energy” means the total quantity of electric energy measured in MWh that can be stored by the BESS Resource as set forth on the Cover Sheet. “Stored Energy Level” means, at a particular time, the amount of Energy in the Facility available to be discharged as Discharging Energy, expressed in MWh. “Subsequent Buyer” means the purchaser of RA Product from Buyer in a re-sale of RA Product by Buyer.
“Substitute Capacity” means “RA Substitute Capacity” as defined in the CAISO Tariff. 17 “Substitute Capacity Request” has the meaning set forth in Section 4.5(b). “Supply Plan” has the meaning set forth in the CAISO Tariff. “System Emergency” means any condition that requires, as determined and declared by CAISO or the PTO, automatic or immediate action to (i) prevent or limit harm to or loss of life or property, (ii) prevent loss of transmission facilities or generation supply in the immediate vicinity of the Facility, or (iii) to preserve Transmission System reliability. “System RA Start Date” has the meaning set forth in the Cover Sheet. “Tax” or “Taxes” means all U.S. federal, state and local and any foreign taxes, levies, assessments, surcharges, duties and other fees and charges of any nature imposed by a Governmental Authority, whether currently in effect or adopted during the Contract Term, including ad valorem, excise, franchise, gross receipts, import/export, license, property, sales and use, stamp, transfer, payroll, unemployment, income, and any and all items of withholding, deficiency, penalty, additions, interest or assessment related thereto. “Terminated Transaction” has the meaning set forth in Section 11.2(a). “Termination Payment” has the meaning set forth in Section 11.3. “Test Energy” has the meaning set forth in Section 3.6. “Thermal Planned Outage” means a period during which the Thermal Resource is either in whole or in part not capable of providing service due to planned maintenance that has been scheduled in advance in accordance with Exhibit G-2.
“Thermal Resource” means the natural gas-fired turbine electricity generating power plant at the Facility as described in Exhibit A.
“Thermal Resource PNode” means the Thermal Resource PNode identified on the Cover Sheet, as such location may be redesignated from time to time by the CAISO. “Transmission Provider” means any entity or entities transmitting or transporting Facility Energy on behalf of Seller or Buyer from the applicable Delivery Point. “Transmission System” means the transmission facilities operated by the CAISO, now or hereafter in existence, which provide energy transmission service downstream from the Delivery Points.
“Ultimate Parent” means MRP Golden Finance, LLC, a Delaware limited liability company.
“Unavailable” means that the BESS Resource is not available to be charged nor to be discharged.
18 “Unplanned Outage” means a period during which Seller is prevented from making Facility Energy available at the applicable Delivery Point due to (i) the need to maintain or repair a component of the BESS Resource and/or Thermal Resource, or (ii) any outage of the Transmission System, in each of case (i) and (ii) which period is not a BESS Planned Outage or Thermal Planned Outage.

1.2 Rules of Interpretation. In this Agreement, except as expressly stated otherwise or unless the context otherwise requires:
(a) headings and the rendering of text in bold and italics are for convenience and reference purposes only and do not affect the meaning or interpretation of this Agreement; (b) words importing the singular include the plural and vice versa and the masculine, feminine and neuter genders include all genders; (c) the words “hereof”, “herein”, and “hereunder” and words of similar import shall refer to this Agreement as a whole and not to any particular provision of this Agreement; (d) a reference to an Article, Section, paragraph, clause, Party, or Exhibit is a reference to that Section, paragraph, clause of, or that Party or Exhibit to, this Agreement unless otherwise specified;
(e) a reference to a document or agreement, including this Agreement means such document, agreement or this Agreement including any amendment or supplement to, or replacement, novation or modification of this Agreement, but disregarding any amendment, supplement, replacement, novation or modification made in breach of such document, agreement or this Agreement;
(f) a reference to a Person includes that Person’s successors and permitted assigns;
(g) the term “including” means “including without limitation” and any list of examples following such term shall in no way restrict or limit the generality of the work or provision in respect of which such examples are provided; (h) references to any statute, code or statutory provision are to be construed as a reference to the same as it may have been, or may from time to time be, amended, modified or reenacted, and include references to all bylaws, instruments, orders and regulations for the time being made thereunder or deriving validity therefrom unless the context otherwise requires; (i) in the event of a conflict, a mathematical formula or other precise description of a concept or a term shall prevail over words providing a more general description of a concept or a term;
(j) references to any amount of money shall mean a reference to the amount in United States Dollars;
19 (k) words, phrases or expressions not otherwise defined herein that (i) have a generally accepted meaning in Prudent Industry Practice shall have such meaning in this Agreement or (ii) do not have well known and generally accepted meaning in Prudent Industry Practice but that have well known and generally accepted technical or trade meanings, shall have such recognized meanings; and
(l) each Party acknowledges that it was represented by counsel in connection with this Agreement and that it or its counsel reviewed this Agreement and that any rule of construction to the effect that ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement.
(m) Buyer acknowledges that, as of the Effect Date, the Facility is (or will be) owned by two of Seller’s Affiliates (each, an “Owner”), one of which owns the Thermal Resource and one of which will own the BESS Resource. Throughout the Contract Term Seller will maintain such agreements with the Owners and other instruments as are necessary for Seller to perform its obligations under this Agreement. References to Seller in this Agreement will include, as the context requires, Seller and/or the Owners.
(n) Notwithstanding anything to the contrary contained in this Agreement, for U.S. federal income tax purposes, the Parties intend that this Agreement will be treated as a service contract within the meaning of, and for the purposes of, Section 7701(e) of the Internal Revenue Code of 1986, as amended.

ARTICLE 2
TERM; COMMERCIAL OPERATION; OPTIMIZATION SERVICES

2.2 Conditions Precedent. The Commercial Operation Date shall not occur until the following conditions have been satisfied:
(a) Seller has delivered to Buyer (i) a certificate from a Licensed Professional Engineer substantially in the form of Exhibit L and (ii) a certificate from a Licensed Professional Engineer substantially in the form of Exhibit M setting forth the Installed Capacity on the Commercial Operation Date;
20 (b) A Participating Generator Agreement and/or a Participating Load Agreement and a Meter Service Agreement for the BESS Resource between Seller and CAISO shall have been executed and delivered and be in full force and effect, and a copy of each such agreement delivered to Buyer;
(c) An Interconnection Agreement between Seller (or its Affiliate or a third party transmission entity, if a sharing arrangement permitted by this Agreement is in effect) and the PTO shall have been executed and delivered and be in full force and effect and a copy of the Interconnection Agreement delivered to Buyer;
(d) All applicable regulatory authorizations, approvals and permits required for operation of the BESS Resource have been obtained (or if not obtained, applied for and reasonably expected to be received within 90 days) and all conditions thereof that are capable of being satisfied on the Commercial Operation Date have been satisfied and shall be in full force and effect, and Seller has delivered to Buyer an attestation certificate from an officer of Seller certifying to the satisfaction of this condition;
(e) Seller has obtained all real property rights, including Site Control, required for the operation of the BESS Resource during the Delivery Term, and Seller has provided evidence of such rights to Buyer;
(f) Insurance requirements for the Facility pursuant to Article 17 have been met, with evidence provided in writing to Buyer; and
(g) Seller has delivered the Performance Security to Buyer in accordance with Section 8.8; and
(h) Seller has paid Buyer for all amounts then owing under this Agreement, if any, including Construction Delay Damages and COD Delay Damages.

2.3 Scheduling Services.

21 (b) During the Delivery Period, Seller’s designee under the SC Agreement shall be responsible for performing all obligations under this Agreement that are appropriate or required to be performed by a Scheduling Coordinator. Buyer shall provide guidance and direction directly to the Scheduling Coordinator to optimize the dispatch of the Facility and schedule natural gas, and Buyer’s instructions shall be controlling. During the Delivery Period, Seller shall take, or cause the Facility’s SC to take, all necessary steps to qualify itself and the Facility in such other manner identified and approved by the CAISO and CPUC that permits Seller to sell and deliver any and all Resource Adequacy Benefits and other Capacity Attributes to Buyer. In addition to the requirements of Exhibit N, Seller shall cause the Facility’s SC to comply, with all applicable CAISO Tariff provisions, CPUC Decisions and all other applicable rules, requirements or Laws, including any bidding of the Facility to meet any Must Offer Obligations, in order to deliver or maintain the right to deliver Resource Adequacy Benefits and other Capacity Attributes to Buyer. (c) Seller and Buyer shall conduct meetings on a quarterly basis or as otherwise reasonably requested by Buyer to discuss the overall performance of the provider under the SC Agreement. Based on the information exchanged during such discussions, Seller shall use commercially reasonable efforts to implement any changes to the overall strategy or performance objectives identified in this meeting.
(d) If Buyer determines that the Scheduling Coordinator is not performing its obligations under the SC Agreement to Buyer’s reasonable satisfaction, Buyer shall have the right to request that Seller replace the Scheduling Coordinator. Following receipt of such Notice, Seller shall use reasonable commercial efforts to identify an alternate service provider and negotiate a new SC Agreement but shall not enter into the new SC Agreement until and unless Buyer has approved such agreement in writing, such approval not to be unreasonably withheld conditioned or delayed. Following such approval, Seller shall use reasonable commercial efforts to promptly terminate the existing SC Agreement such that the new SC Agreement starts on termination of the existing SC Agreement. Buyer shall be liable for the termination penalties under the SC Agreement, except to the extent arising due to the negligence or willful misconduct of Seller, provided, however that (i) Seller shall use reasonable commercial efforts to minimize any penalties and enforce any rights to terminate for cause and without liability to Buyer and (ii) if the existing SC Agreement is terminated at Buyer’s direction without cause, notwithstanding any provision to the contrary herein, Buyer’s maximum liability for any associated termination penalty shall not exceed

2.4 Forecasting Services.
(a)

22 (b) In connection with any bidding, dispatch or other decisions based on forecast market conditions, Seller shall be permitted to rely on any advice, recommendations and guidance received from the provider under the Forecasting Agreement. Buyer may provide guidance and direction directly to Seller concerning actions the Scheduling Coordinator should take to optimize the dispatch of the Facility, in which case Buyer’s instructions shall be controlling.

ARTICLE 3

PURCHASE AND SALE

3.1 Purchase and Sale of Product. Subject to the terms and conditions of this Agreement, during the Delivery Term, Buyer will purchase all the Product associated with the Facility at the Contract Price, and Seller shall supply and deliver to Buyer all the Product associated with the Facility. During the Delivery Term, Buyer will have exclusive rights, subject to compliance with the Operating Procedures, to offer, bid, or otherwise submit the Product from the Facility for sale in the available markets, and retain and receive any and all related revenues. (a) Facility Energy. Buyer’s right to schedule Facility Energy shall not 23 commence until the Energy Start Date and is limited to the maximum quantity of Energy that can be produced by the Energy Contract Quantity. Buyer may elect to schedule any combination of Dispatchable Energy and Discharging Energy, but the total quantity may not exceed the Energy Contract Quantity in any hour.
(b) Ancillary Services. Buyer’s right to schedule Ancillary Services and Flexible Ramping Product from the Thermal Resource shall not commence until the Energy Start Date and Buyer’s right to schedule Ancillary Services and Flexible Ramping Product from the BESS Resource shall not commence until the Commercial Operation Date. Further, Buyer’s right to schedule Ancillary Services and Flexible Ramping Product is limited to the Ancillary Services and Flexible Ramping Product that can be provided from Energy from the applicable resource under the CAISO Tariff without modifying the Facility and in no event greater than the Energy Contract Quantity. Such right specifically excludes any Ancillary Services and Flexible Ramping Product that interfere or conflict with the ability to supply the Resources Adequacy Benefits.

3.6 Test Energy. To the extent any electricity is dispatched from the Facility prior to the Commercial Operation Date (“Test Energy”), dispatch of such Test Energy shall not be 24 evidence that Commercial Operation has been achieved or that the BESS Resource has been placed in service.

3.7 Emissions.

3.8 Change in Law.
(the
“Compliance Expenditure Cap”);
(b) If the 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. 25 (c) Buyer will have sixty (60) 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 all or some portion of the Compliance Costs that exceed the Compliance Expenditure Cap (such Buyer-agreed upon costs, the “Accepted Compliance Costs”), or (2) waive Seller’s obligation to take such Compliance Actions, or any part thereof for which Buyer has not agreed to reimburse Seller. (d) 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 Parties 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. (e) If Buyer does not pay the Compliance Costs in excess of the Compliance Expenditure Cap, or if it is not possible for Seller to achieve compliance with a change in Law through the payment or incurrence of costs, then Seller shall be excused from the corresponding Compliance Actions under this Agreement and may, without liability to Buyer or any reduction in Buyer’s payment obligations, suspend performance under this Agreement, including obligations to offer, schedule or dispatch the Facility and any Products, to the extent performance is restricted by the change in Law.

ARTICLE 4

OBLIGATIONS AND DELIVERIES

4.2 Transfer of Resource Adequacy Benefits.
26 (a) Seller shall transfer the Resource Adequacy Benefits and, if applicable, Replacement RA from Replacement Units (the “RA Product”) to Buyer by submitting Supply Plans to CAISO for the Shown Unit(s).
(b) Seller shall cause all Supply Plans to meet and be filed in conformance with the requirements of the CPUC and the CAISO Tariff. Seller shall submit, or cause the Shown Unit’s SC to submit, on a timely basis with respect to each applicable Showing Month, Supply Plans in accordance with the CAISO Tariff and CPUC requirements to identify and confirm the RA Product delivered in accordance with Buyer’s instructions for each Showing Month of the Delivery Term.
(c) If CAISO rejects the Supply Plan or the Resource Adequacy Plan with respect to any part of the RA Product for the Facility in any Showing Month, the Parties shall confer, make such corrections as are necessary for acceptance, and resubmit the corrected Supply Plan for validation before the applicable deadline for the Showing Month. (d) The RA Product is received when the CIRA Tool shows that the Supply Plan submitted in compliance with Buyer’s instructions, including Buyer’s instructions to withhold all or part of the RA Product for such Showing Month, has been accepted for the RA Product from the Shown Unit(s) by CAISO. Seller has failed to transfer the RA Product under this Section 4.2 if (i) Buyer has elected to submit the RA Product from the Shown Unit(s) in its Resource Adequacy Plan and such submission is accepted by the CPUC and the CAISO but the Supply Plan and Resource Adequacy Plan are not matched in the CIRA Tool and are rejected by CAISO due to the acts or omissions of Seller notwithstanding performance of the Parties’ obligations in Section

4.3 Seller’s Option To Provide Alternate Capacity. If Seller is unable to provide the Resource Adequacy Benefits from the Facility for a Showing Month for any reason, including, without limitation, as provided in Section 4.8, then Seller may, at no cost to Buyer, provide Buyer with Replacement RA from one or more replacement units having the same Capacity Attributes as the Facility (each such unit, a “Replacement Unit”) in an amount such that the total amount of RA Product provided to Buyer from the Facility and any Replacement Unit(s) for each Showing 27 Month is not more than the RA Contract Quantity, provided that in each case:
(a) Seller shall notify Buyer in writing of its intent to provide Replacement RA and shall identify the proposed Replacement Units from which such Replacement RA shall be provided no later than the Notification Deadline for Buyer’s Compliance Showings related to such Showing Month;
(b) The proposed Replacement Units must (i) be accepted by the CAISO, and (ii) otherwise satisfy the requirements of this Agreement; (c) Seller shall, or shall cause the SC to submit, a Supply Plan for each Showing Month and, if applicable, annual filing, no later than the Notification Deadline for Buyer’s Compliance Showings;
(d) If Seller does not comply with the requirements of Sections 4.3(a), (b) and (c) for the applicable Showing Month and, if applicable, annual filing, then any such Replacement Units shall not be deemed a Replacement Unit for purposes of this Agreement for that Showing Month; and
(e) The designation of any Replacement Unit(s) by Seller shall be subject to Buyer’s prior written approval, which shall not be unreasonably withheld, conditioned or delayed. (f) In no event shall a Replacement Unit utilize coal or coal materials as a source of fuel. A Replacement Unit must be a specific resource that is connected directly to the CAISO-controlled grid or be under the operational control of CAISO. A Replacement Unit may not be an unspecified import.
(g) Once Seller has identified in writing any Replacement Units that meet the requirements of this Section 4.3 and Buyer has approved such Replacement Units as consistent with this Agreement, then any such Replacement Units shall be deemed a Shown Unit for purposes of this Agreement for that Showing Month. Buyer’s approval of a Replacement Unit as to a given Showing Month shall not be construed as approval of such Replacement Unit for any subsequent Showing Month.

4.4 Buyer’s Re-Sale of RA Product.
(a) Buyer may re-sell all or part of the RA Product; provided that any such re-sale must not increase Seller’s obligations hereunder other than as set forth in this Section 4.4. For any such resale, the Resource Adequacy Plan of Buyer as used herein will refer to the Resource Adequacy Plan of the Subsequent Buyer. Seller shall, or shall cause the Shown Unit’s SC, to follow Buyer’s instructions with respect to providing such resold RA Product to Subsequent Buyers, to the extent such instructions are consistent with Seller’s obligations under this Agreement. Seller shall, and shall cause the Shown Unit’s SC, to take all commercially reasonable actions and execute all documents or instruments reasonably necessary to allow such Subsequent Buyers to use such resold RA Product in a manner consistent with Buyer’s rights under this Agreement. If Buyer incurs any liability to a Subsequent Buyer due to the failure of Seller or the Shown Unit’s SC to comply with this Agreement, Seller will be liable to Buyer for the amounts Seller would have owed Buyer under this Agreement if Buyer had not resold the RA Product. 28 (b) Buyer shall notify Seller in writing of any resale of RA Product and the Subsequent Buyer no later than two (2) Business Days before the deadline for the Compliance Showing for each Showing Month for which Buyer has resold the RA Product. Buyer shall notify Seller of any subsequent changes or further resales no later than two (2) Business Days before the deadline for the Compliance Showing for each Showing Month for which Buyer has resold the RA Product.
(c) If CAISO or CPUC develops a centralized capacity market, Buyer will have exclusive rights to direct the Seller or the Shown Unit’s SC to offer, bid, or otherwise submit the RA Product for re-sale into such market, and Seller and the Shown Unit’s SC shall comply with the Buyer’s direction and Buyer shall retain and receive all revenues from such re-sale. (d) Buyer shall have the exclusive right to direct the Seller or the Shown Unit’s SC to offer, bid, or otherwise submit the RA Product into the CAISO Competitive Solicitation Process (CSP) for CPM Capacity. Seller and the Shown Unit’s SC shall comply with the Buyer’s direction and, to the extent that the CAISO designates the RA Product as CPM Capacity, Buyer shall be entitled to retain and receive the CPM Capacity Payment. Unless otherwise instructed by Buyer, (i) Seller shall not, and shall cause the Shown Unit’s SC to not, offer any portion of the RA Product to CAISO as CPM Capacity and (ii) if CAISO designates any portion of the RA Product as CPM Capacity, then Seller shall, and shall cause the Shown Unit’s SC to, promptly (and in any event within one (1) Business Day of the time Seller receives notification from CAISO) notify Buyer of such designation, and if CAISO makes such a designation, Seller shall not, and shall cause the Shown Unit’s SC to not, accept any such designation by CAISO unless and until Buyer has agreed to accept such designation.

4.5 Hold-Back and Substitute Capacity.
(a) No later than three (3) Business Days before the relevant deadline for the initial Compliance Showing with respect to a particular Showing Month, Buyer may request in writing that Seller not list, or cause the Shown Unit’s SC not to list, in the Shown Unit’s Supply Plan a portion or all of the RA Product for such Showing Month (“Hold-Back Capacity”). The amount of RA Product that is the subject of Buyer’s request for Hold-Back Capacity shall be deemed RA Product received by Buyer consistent with Section 4.2 for purposes of calculating the payments due hereunder, unless utilized under Section 4.5(b) as Substitute Capacity, then RA Product is considered received according to the requirements therein. Seller shall, or shall cause the Shown Unit’s SC to, comply with Buyer’s request under this Section 4.5. (b) In any Showing Month in which Buyer has designated Hold-Back Capacity, Buyer may request, in writing, that Seller make the Hold-Back Capacity available for Buyer’s use as Substitute Capacity within the respective Showing Month (“Substitute Capacity Request”) with the following schedule:
(i) For Buyer’s Substitute Capacity Requests that are to be scheduled with CAISO prior to the Showing Month (e.g., through the CAISO RA Substitute Capacity Assessment), the Substitute Capacity Request shall be received by Seller at least two (2) Business Days prior to the applicable CAISO scheduling deadline. Seller shall, or shall cause the Unit’s Scheduling Coordinator to, comply with Buyer’s request under this Section 4.5(b), provided that 29 to the extent Seller is unable to provide the requested Substitute Capacity from the Facility due to a Thermal Planned Outage or a Forced Outage, Seller shall not have any liability for such failure. (ii) For Buyer’s Substitute Capacity Requests that are to be scheduled with CAISO after the commencement of the Showing Month, the Substitute Capacity Request shall be received by Seller at least five (5) Business Days before Buyer submits its Substitute Capacity in the CIRA Tool. Seller shall, or shall cause the Replacement Unit’s Scheduling Coordinator to, comply with Buyer’s request under this Section 4.5(b), provided that to the extent Seller is unable to provide the requested Substitute Capacity from the Facility due to a Thermal Planned Outage or a Forced Outage, Seller shall not have any liability for such failure.

4.6 Gas Supply. Seller shall be responsible for the supply of natural gas for the Thermal Resource in accordance with Exhibit O.

4.7 Charging Energy Management.
(a) Generally. Buyer shall be solely responsible, at its sole cost, for procuring Charging Energy. Buyer shall be solely responsible, at its sole cost, for arranging transmission and wheeling required to deliver Charging Energy to the Delivery Point for the BESS Resource and to accept Discharging Energy at the Delivery Point for the BESS Resource. Except as expressly set forth in this Agreement, including Sections 4.7(c) and (e) and Section 4.11(b), Buyer shall be responsible for paying all CAISO costs and charges associated with charging of the BESS Resource. If CAISO rules or protocols become inconsistent with such understanding, the Parties shall reasonably coordinate to amend or modify this Agreement to carry out the intent hereof, such agreement not to be unreasonably delayed, conditioned or withheld. (b) Charging Notices. The BESS Resource will have the capability to be charged seven (7) days per week and twenty-four (24) hours per day (including holidays), through Charging Notices sent electronically, provided, that the right to issue Charging Notices is subject to the requirements and limitations set forth in this Agreement including the Operating Procedures; provided, however, that the sole and exclusive remedy for any failure of the BESS Resource to be available is the Availability Adjustment Factor. Each Charging Notice issued in accordance with this Agreement will be effective unless and until the Buyer or CAISO modifies such Charging Notice by providing Seller with an updated Charging Notice. Seller shall comply with all Charging Notices, subject to the requirements and limitations set forth in this Agreement. Each Charging Notice issued in accordance with this Agreement will be effective unless and until such Charging Notice is modified with an updated Charging Notice (including as automatically updated in accordance with the definition of Charging Notice). Notwithstanding the foregoing, Buyer shall be solely responsible for causing sufficient Charging Notices to be issued to (i) support any Discharging Notices and (ii) ensure the eligibility of the Resource Adequacy Benefits for purchase and sale under the CAISO market rules, and (iii) otherwise participating in any CAISO markets. (c) No Unauthorized Charging. Seller shall not charge the BESS Resource during the Delivery Term other than pursuant to a valid Charging Notice, or in connection with a Storage Capacity Test, or pursuant to a notice from CAISO. If, during the Contract Term, Seller (i) charges the BESS Resource to a Stored Energy Level greater than the Stored Energy Level provided for in the Charging Notice or (ii) charges the BESS Resource in violation of the first 30 sentence of this Section 4.7(c), then (x) Seller shall be responsible for all Energy costs associated with such charging of the BESS Resource, (y) Buyer shall not be required to pay for such Energy, and (z) Buyer shall be entitled to discharge such Energy and entitled to the Product associated with discharging such Energy.
(d) Discharging Notices. Buyer will have the right to discharge the BESS Resource seven (7) days per week and twenty-four (24) hours per day (including holidays), by providing Discharging Notices to Seller electronically, and subject to the requirements and limitations set forth in this Agreement, including the Operating Procedures provided, however, that the sole and exclusive remedy for any failure of the BESS Resource to be available is the Availability Adjustment Factor. Seller shall comply with all Discharging Notices, subject to the requirements and limitations set forth in this Agreement. Each Discharging Notice issued in accordance with this Agreement will be effective unless and until Buyer or CAISO modifies such Discharging Notice by providing Seller with an updated Discharging Notice. (e) No Unauthorized Discharging. Seller shall not discharge the BESS Resource during the Delivery Term other than pursuant to a valid Discharging Notice, or in connection with a Storage Capacity Test, or pursuant to a notice from the CAISO. If, during the Delivery Term, Seller (i) discharges the BESS Resource other than as provided for in the Discharging Notice or (ii) discharges the BESS Resource in violation of the first sentence of this Section 4.7(e), then (x) Seller shall be responsible for all Energy costs associated with such discharging of the BESS Resource, (y) Buyer shall not be required to pay for the Charging Energy that was discharged, and (z) Buyer shall be entitled to the Product associated with such discharge. (f) Scheduling Charging Energy and Discharging Energy. Seller (or Seller’s SC) shall schedule Charging Energy and Discharging Energy in accordance with the Charging Notices and Discharging Notices, subject to the requirements of this Agreement. In the event that Seller (or Seller’s SC) fails to schedule the Charging Energy or Discharging Energy in accordance with Buyer’s instructions and the requirements of this Agreement, the payment amounts owed to Buyer by Seller shall equal the net revenue Buyer would have received had Seller (or Seller’s SC) properly Scheduled the Charging Energy or Discharging Energy, as applicable. Payment of such amount shall be Seller’s sole and exclusive liability for any failure to schedule the Charging Energy or Discharging Energy, except as provided in Exhibit N. (g) Coordination Regarding Commissioning and Storage Capacity Tests. Prior to the Commercial Operation Date, Buyer shall have no rights to issue or cause the BESS Resources to be charged or discharged. Seller shall have exclusive rights to test, charge and discharge the BESS Resource. Seller is responsible to procure, at its own cost, any Energy required for commissioning purposes and to arrange to discharge such Energy into the grid. Seller shall be entitled to all CAISO revenues and other amounts paid by CAISO in respect of the BESS Resource testing for periods prior to the Commercial Operation Date. Both prior to and after the Commercial Operation Date, (i) Buyer shall reasonably coordinate and cooperate with Seller with respect to BESS Resource commissioning and Storage Capacity Tests, and (ii) Seller shall reasonably coordinate and cooperate with Buyer with respect to BESS Resource commissioning and Storage Capacity Tests so as to minimize direct and opportunity costs to the Buyer associated with such activities.
31 4.8 Reduction in Deliveries.
(a) Facility Maintenance. Seller will deliver to Buyer the expected schedule for performing maintenance on the Facility in accordance with Exhibits G-1 and G-2. Seller shall be permitted to reduce deliveries of Product during a BESS Planned Outage or Thermal Planned Outage.
(b) Unplanned Outage. Seller shall be permitted to reduce deliveries of Product during any Unplanned Outage.
(c) Force Majeure Event. Seller shall be permitted to reduce deliveries of Product during any Force Majeure Event.
(d) Health and Safety. Seller shall be permitted to reduce deliveries of Product as necessary to maintain health and safety pursuant to Section 6.2.

4.9 RA Availability.
(a) During the Delivery Term, the Facility shall maintain a Monthly RA Availability during each month of no less than the Guaranteed RA Availability, which Monthly RA Availability shall be calculated in accordance with Exhibit F. (b) If the Monthly RA Availability during any month is less than the Guaranteed RA Availability, then Buyer’s payment for the Product shall be calculated by reference to the RA Availability Adjustment Factor as determined in accordance with Exhibit F. (c) Subject to Section 4.18, the sole and exclusive remedy for any failure of the Facility to provide Resource Adequacy Benefits is the RA Availability Adjustment Factor.

Buyer shall be solely responsible for procuring those Resource Adequacy Benefits that the Facility fails to provide under this Agreement.

4.11 Storage Capacity Tests.
(a) Prior to the Commercial Operation Date, Seller shall schedule and complete a Storage Capacity Test in accordance with Exhibit D. Thereafter, Seller and Buyer shall have the right to run retests of the Storage Capacity Test in accordance with Exhibit D. (b) Buyer shall have the right to send one or more representative(s) to witness 32 all Storage Capacity Tests. Alternatively, to the extent that any Storage Capacity Tests are done remotely, and no representatives are needed on Site, Seller shall arrange for both Parties to have access to all data and other information arising out of such tests. Buyer shall be responsible for all costs, expenses and fees payable or reimbursable to its representative(s) witnessing any Storage Capacity Test. For any Storage Capacity Tests initiated by Seller, Seller shall (i) not be entitled to the payment for associated Charging Energy, (ii) be liable for all CAISO costs and charges for associated Charging Energy and (iii) be entitled to any CAISO revenues associated with Discharging Energy. For any Storage Capacity Tests initiated by Buyer, Buyer shall (x) procure the associated Charging Energy, (y) be liable for all CAISO costs and charges for the associated Charging Energy, and (z) be entitled to any CAISO revenues associated with the associated Discharging Energy. No Charging Notices or Discharging Notices shall be issued during any Storage Capacity Test except as reasonably requested by Seller or Buyer to implement the applicable test.
(c) Following each Storage Capacity Test, Seller shall submit a testing report in accordance with Exhibit D. If the Effective Discharge Capacity determined pursuant to a Storage Capacity Test varies from the then current Energy Contract Quantity, as applicable, then the Effective Discharge Capacity determined pursuant to a Storage Capacity Test (not to exceed the initial Energy Contract Quantity set forth on the Cover Sheet) shall become the new Energy Contract Quantity at the beginning of the day following the completion of the test for all purposes under this Agreement.

4.13 Heat Rate Guaranty. In the event the Heat Rate is higher than the Guaranteed Heat Rate, Seller will owe Buyer Heat Rate Liquidated Damages in accordance with Exhibit C.

4.14 Start, Run and Cycle Limits. Buyer may not exceed the Daily Start Limit or Annual Run Hour Limit of the Thermal Resource or the Annual Cycle Limit of the BESS Resource.

4.16 Title and Risk of Loss. Notwithstanding any provision in this Agreement to the contrary, Buyer shall not have title or risk of loss related to any natural gas or Facility Energy. 33 4.17 Notice of Outages.
(a) Notice of Unplanned Outages. Seller shall notify Buyer promptly following the occurrence of an Unplanned Outage, or following Seller having knowledge that an Unplanned Outage will occur. Seller shall communicate to Buyer the estimated duration of an Unplanned Outage and use reasonable commercial efforts to update Buyer of any changes to the estimated direction thereof.
(b) Facility Availability. During the Delivery Term, Seller shall deliver to Buyer a schedule of the expected availability of the Facility on an hourly basis and shall update Buyer of a changes reasonably anticipated promptly following Seller’s determination that changes are required.

4.18 Resource Adequacy Failure
(a) RA Deficiency Determination. For each RA Shortfall Month, Seller shall pay to Buyer the RA Deficiency Amount as liquidated damages, in each case, as the sole remedy for any RA Shortfall.
(b) RA Deficiency Amount Calculation. For each RA Shortfall Month, Seller shall pay to Buyer an amount (the “RA Deficiency Amount”) equal to ARTICLE 5
TAXES

If a Party is required to remit or pay Taxes that are the other Party’s responsibility hereunder, such Party shall promptly pay the Taxes due and then seek and receive reimbursement from the other for such Taxes. In the event any sale of Product hereunder is exempt from or not subject to any particular Tax, Buyer shall provide Seller with all necessary documentation within thirty (30) days after the Effective Date to evidence such exemption or exclusion. If Buyer does not provide such documentation, then Buyer shall indemnify, defend, and hold Seller harmless from any liability with respect to Taxes from which Buyer claims it is exempt. 34 5.2 Cooperation. Each Party shall use reasonable efforts to implement the provisions of and administer this Agreement in accordance with the intent of the Parties to minimize all Taxes, so long as no Party is materially adversely affected by such efforts. The Parties shall cooperate to minimize Tax exposure; provided, however, that neither Party shall be obligated to incur any financial or operational burden to reduce Taxes for which the other Party is responsible hereunder without receiving due compensation therefor from the other Party. All Product delivered by Seller to Buyer hereunder shall be a sale made at wholesale, with Buyer reselling such Product.

ARTICLE 6

MAINTENANCE OF THE FACILITY

6.1 Maintenance of the Facility. Seller shall comply with Law and Prudent Industry Practice relating to the operation and maintenance of the Facility, the generation and sale of Product.

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 becomes aware of any circumstances relating to the Facility that create an imminent risk of damage or injury to any Person or any Person’s property, Seller shall take prompt action to prevent such damage or injury and shall give Notice to Buyer’s emergency contact identified on Exhibit J of such condition. Such action may include, to the extent reasonably necessary, disconnecting and removing all or a portion of the Facility, or suspending the supply of Energy, Dispatching Energy or Discharging Energy to Buyer.

ARTICLE 7

METERING

7.2 Meter Verification. If Seller has reason to believe there may be an Energy Meter or a Gas Meter malfunction, or upon Buyer’s reasonable request, Seller shall test the Energy Meter 35 or the Gas Meter. The tests shall be conducted by independent third parties qualified to conduct such tests. Buyer shall be notified seven (7) days in advance of such tests and have a right to be present during such tests. Meter accuracy shall be determined based on CAISO or Gas Distribution Utility standards, as appliable. If a meter is inaccurate it shall be promptly repaired or replaced at Seller’s expense. If the meter test was performed by Buyer’s request and the meter(s) provided to be accurate, Buyer shall reimburse Seller for the costs and expenses associated with the test.

ARTICLE 8
INVOICING AND PAYMENT; CREDIT

8.2 Statements and Invoicing. Seller shall deliver an invoice to Buyer within twenty (20) days after the end of the prior monthly delivery period. Each invoice shall (a) include records of metered data, including the amount of Charging Energy, Discharging Energy and Dispatchable Energy delivered to Buyer (if any), the RA Reservation Payment, the Energy Reservation Payment and the total Contract Price; (b) reflect any records, including invoices or settlement data from the CAISO, necessary to verify the accuracy of any amount; (c) reflect any CAISO costs and revenues passed through to Buyer, (d) include any natural gas costs or revenues passed through to Buyer pursuant to Section 4.6 and (e) be in a format and contain detail reasonably acceptable to Buyer, covering the services provided in the preceding month determined in accordance with the applicable provisions of this Agreement. The invoice shall be delivered by electronic mail in accordance with Exhibit J.
36 8.3 Payment. Buyer shall make payment to Seller for Product by wire transfer or ACH payment to the bank account designated by Seller in Exhibit J, which may be updated by Seller by Notice hereunder; provided, however, that changes to invoice, payment, wire transfer and other banking information in the Agreement must be made in writing and delivered via certified mail and shall include contact information for an authorized person who is available by telephone to verify the authenticity of such requested changes to the Agreement. Buyer shall pay undisputed invoice amounts within thirty (30) days after receipt of the invoice. If such due date falls on a weekend or legal holiday, such due date shall be the next Business Day. Payments made after the due date will be considered late and will bear interest on the unpaid balance. If the amount due is not paid on or before the due date or if any other payment that is due and owing from one Party to another is not paid on or before its applicable due date, a late payment charge shall be applied to the unpaid balance and shall be added to the next billing statement. Such late payment charge shall be calculated based on the 3-Month prime rate (or any equivalent successor rate accepted by a majority of major financial institutions) published on the date of the invoice in The Wall Street Journal (or, if The Wall Street Journal is not published on that day, the next succeeding date of publication), plus two percent (2%) (the “Interest Rate”). If the due date occurs on a day that is not a Business Day, the late payment charge shall begin to accrue on the next succeeding Business Day.

8.6 Billing Disputes. A Party may, in good faith, dispute the correctness of any invoice or any adjustment to an invoice rendered under this Agreement or adjust any invoice for any arithmetic or computational error within twelve (12) months of the date the invoice, or adjustment to an invoice, was rendered. In the event an invoice or portion thereof, or any other claim or adjustment arising hereunder, is disputed, payment of the undisputed portion of the invoice shall be required to be made when due. Any invoice dispute or invoice adjustment shall be in writing and shall state the basis for the dispute or adjustment. Payment of the disputed amount shall not 37 be required until the dispute is resolved. Upon resolution of the dispute, any required payment shall be made within five (5) Business Days of such resolution along with interest accrued at the Interest Rate from and including the original due date to but excluding the date paid. Inadvertent overpayments shall be returned via adjustments in accordance with Section 8.5. Any dispute with respect to an invoice is waived if the other Party is not notified in accordance with this Section 8.6 within twelve (12) months after the invoice is rendered or subsequently adjusted, except to the extent any misinformation was from a third party not affiliated with any Party and such third party corrects its information after the twelve-month period. If an invoice is not rendered within twelve (12) months after the close of the month during which performance occurred, the right to payment for such performance is waived.

8.7 Netting of Payments. The Parties hereby agree that they shall discharge mutual debts and payment obligations due and owing to each other on the same date through netting, in which case all amounts owed by each Party to the other Party for the purchase and sale of Product during the monthly billing period under this Agreement or otherwise arising out of this Agreement, including, without limitation, liquidated damage payments under Exhibit B, CAISO Costs and Revenues calculated pursuant to Exhibit N, interest, payments, and credits shall be netted so that only the excess amount remaining due shall be paid by the Party who owes it.

8.8 Payment Security.
(a) Seller’s Development Security. To secure its obligations under this Agreement, Seller shall deliver the Development Security to Buyer within thirty (30) days after the Effective Date. Seller shall maintain the Development Security in full force and effect. Upon the earlier of (i) Seller’s delivery of the Performance Security, or (ii) sixty (60) days after termination of this Agreement, Buyer shall return the Development Security to Seller, less the amounts drawn in accordance with this Agreement. If the Development Security is a Letter of Credit and the issuer of such Letter of Credit (x) fails to maintain the minimum Credit Rating specified in the definition of Letter of Credit, (y) indicates its intent not to renew such Letter of Credit and such Letter of Credit expires prior to the Commercial Operation Date, or (z) fails to honor Buyer’s properly documented request to draw on such Letter of Credit by such issuer, Seller shall have ten (10) Business Days to either post cash or deliver a substitute Letter of Credit that meets the requirements set forth in the definition of Development Security. (b) Seller’s Performance Security. To secure its obligations under this Agreement, Seller shall deliver Performance Security to Buyer on or before the Commercial Operation Date. Seller shall maintain the Performance Security in full force and effect, and Seller shall within ten (10) Business Days after any draw thereon replenish the Performance Security in the event Buyer collects or draws down any portion of the Performance Security for any reason permitted under this Agreement, until the following have occurred: (A) the Delivery Term has expired or terminated early; and (B) all payment obligations of the Seller then due and payable under this Agreement, including compensation for penalties, Termination Payment, indemnification payments or other damages are paid in full (whether directly or indirectly such as through set-off or netting). Following the occurrence of both events, Buyer shall promptly return to Seller the unused portion of the Performance Security. If the Performance Security is a Letter of Credit and the issuer of such Letter of Credit (i) fails to maintain the minimum Credit Rating set forth in the definition of Letter of Credit, (ii) indicates its intent not to renew such Letter of 38 Credit and such Letter of Credit expires prior to the Commercial Operation Date, or (iii) fails to honor Buyer’s properly documented request to draw on such Letter of Credit by such issuer, Seller shall have ten (10) Business Days to either post cash or deliver a substitute Letter of Credit that meets the requirements set forth in the definition of Performance Security. (c) First Priority Security Interest in Cash or Cash Equivalent Collateral. To secure its obligations under this Agreement, and until released as provided herein, Seller hereby grants to Buyer a present and continuing first-priority security interest in, and lien on (and right to net against), and assignment of the Development Security and Performance Security to the extent provided in the form of cash, and any other cash collateral and cash equivalent collateral posted pursuant to Section 8.8 and any and all interest thereon or proceeds resulting therefrom or from the liquidation thereof, whether now or hereafter held by, on behalf of, or for the benefit of Buyer, and Seller agrees to take all action as Buyer reasonably requires in order to perfect Buyer’s security interest granted under this Section 8.8(c) in, and lien on (and right to net against), such collateral and any and all proceeds resulting therefrom or from the liquidation thereof.

8.9 Use of Financial Security. Upon or any time after the occurrence of an Event of Default caused by Seller, an Early Termination Date resulting from an Event of Default caused by Seller, or an occasion provided for in this Agreement where Buyer is authorized to retain all or a portion of the Financial Security provided by Seller, Buyer may do any one or more of the following (in each case subject to the final sentence of this Section 8.9):
(a) Exercise any of its rights and remedies with respect to the Financial Security, including any such rights and remedies under Law then in effect; (b) Draw on any outstanding Letter of Credit issued for its benefit and retain any cash held by Buyer as Financial Security; and
(c) Liquidate the applicable Financial Security then held by or for the benefit of Buyer free from any claim or right of any nature whatsoever of Seller, including any equity or right of purchase or redemption by Seller.

ARTICLE 9

NOTICES

9.2 Acceptable Means of Delivering Notice. Each Notice required, permitted, or contemplated hereunder shall be deemed to have been validly served, given or delivered if sent by electronic mail at the time indicated by the time stamp upon delivery, except that if received after 39 5 PM Pacific Prevailing Time, it shall be deemed received on the next Business Day.

ARTICLE 10

FORCE MAJEURE

10.1 Definition.
(a) “Force Majeure Event” means any act or event that delays or prevents a Party from timely performing all or a portion of its obligations under this Agreement or from complying with all or a portion of the conditions under this Agreement if such act or event, despite the exercise of reasonable efforts, cannot be avoided by and is beyond the reasonable control (whether direct or indirect) of and without the fault or negligence of the Party relying thereon as justification for such delay, nonperformance, or noncompliance. (b) Without limiting the generality of the foregoing, so long as the following events, despite the exercise of reasonable efforts, cannot be avoided by, and are beyond the reasonable control (whether direct or indirect) of and without the fault or negligence of the Party relying thereon as justification for such delay, nonperformance or noncompliance, a Force Majeure Event may include an act of God or the elements, such as flooding, lightning, hurricanes, tornadoes, or ice storms; explosion; fire; volcanic eruption; flood; landslide; mudslide; sabotage; terrorism; earthquake; or other cataclysmic events; an act of public enemy; war; blockade; civil insurrection; riot; civil disturbance; epidemic; pandemic; or strikes or other labor difficulties caused or suffered by a Party or any third party except as set forth below. (c) Notwithstanding the foregoing, the term “Force Majeure Event” does not include (i) economic conditions that render a Party’s performance of this Agreement at the Contract Price unprofitable or otherwise uneconomic (including an increase in component costs for any reason, including foreign or domestic tariffs, Buyer’s ability to buy storage capacity at a lower price, or Seller’s ability to sell the Product, or any component thereof, at a higher price, than under this Agreement); (ii) Seller’s inability to obtain permits or approvals of any type for the construction, operation, or maintenance of the Facility, except to the extent such inability is caused by a Force Majeure Event; (iii) the inability of a Party to make payments when due under this Agreement, unless the cause of such inability is an event that would otherwise constitute a Force Majeure Event as described above; (iv) Seller’s inability to obtain sufficient labor, equipment, materials, or other resources to build or operate the Facility except to the extent such inability is caused by a Force Majeure Event; (v) any equipment failure except if such equipment failure is caused by a Force Majeure Event; or (vi) any action or inaction by Transmission Provider that delays or prevents the approval, construction or placement in service of any Interconnection Facilities or Reliability Network Upgrades except to the extent caused by a Force Majeure Event. 40 10.2 Termination Following Force Majeure Event. If a Force Majeure Event has occurred after the Commercial Operation Date that has caused either Party to be wholly or partially unable to perform its obligations hereunder, and the impacted Party has claimed and received relief from performance of its obligations for a consecutive twelve (12) month period, then the non-claiming Party may terminate this Agreement upon Notice to the other Party. In addition, if a Force Majeure Event causes the Facility to be materially damaged such that returning the Facility to the full operational status that existing prior to the Force Majeure Event is reasonably expected to take more than twelve (12) months, Seller may terminate this Agreement upon Notice to Buyer.

10.3 Notice for Force Majeure. Within two (2) Business Days of the Party becoming aware of that a Force Majeure Event will impact the Party’s performance under this Agreement, the claiming Party shall provide the other Party with oral notice of the Force Majeure Event, and within two (2) weeks thereafter the claiming Party shall provide the other Party with Notice in the form of a letter describing in detail the occurrence giving rise to the Force Majeure Event, including the nature, cause, estimated date of commencement thereof, and the anticipated extent of any delay or interruption in performance. Failure to provide timely Notice shall not constitute a waiver of the Force Majeure Event, but the relief granted shall be based on the date Notice is provided rather than the date of the Force Majeure Event. Upon written request from the other Party, the claiming Party shall provide documentation demonstrating to other Party’s reasonable satisfaction that each day of the claimed delay was the result of a Force Majeure Event and did not result from the claiming Party’s actions or failure to exercise due diligence or take reasonable actions. The claiming party shall promptly notify the other Party in writing of the cessation or termination of such Force Majeure Event, all as known or estimated in good faith by the affected Party. The suspension of performance due to a claim of a Force Majeure Event must be of no greater scope and of no longer duration than is required by the Force Majeure Event.

11.1 Events of Default. An “Event of Default” shall mean, (a) with respect to a Party (the “Defaulting Party”) that is subject to the Event of Default the occurrence of any of the following:
(i) the failure by such Party to make, when due, any payment required pursuant to this Agreement and such failure is not remedied within ten (10) Business Days after Notice thereof;
(ii) any representation or warranty made by such Party herein is false or misleading in any material respect when made or when deemed made or repeated, and such default is not remedied within thirty (30) days after Notice thereof; (iii) the failure by such Party to perform any material covenant or obligation set forth in this Agreement (except to the extent constituting a separate Event of Default set forth in this Section 11.1) and such failure is not remedied within thirty (30) days after Notice thereof;
(iv) such Party becomes Bankrupt;
(v) such Party assigns this Agreement or any of its rights hereunder other than in compliance with Sections 14.1, 14.2, 14.3 or 14.4, as appropriate; or (vi) such Party consolidates or amalgamates with, or merges with or into, or transfers all or substantially all of its assets to, another entity and, at the time of such consolidation, amalgamation, merger or transfer, the resulting, surviving or transferee entity fails to assume all the obligations of such Party under this Agreement to which it or its predecessor was a party by operation of Law or pursuant to an agreement reasonably satisfactory to the other Party. (b) with respect to Seller as the Defaulting Party, the occurrence of any of the following:
(i) the failure by Seller to (A) achieve Construction Start on or before the Guaranteed Construction Start Date, as such date may be extended by Seller’s payment of Construction Delay Damages pursuant to Section 1(b) of Exhibit B and/or a Development Cure Period pursuant to Section 4 of Exhibit B, or (B) achieve Commercial Operation on or before the Guaranteed Commercial Operation Date, as such date may be extended by Seller’s payment of COD Delay Damages pursuant to Section 2(b) of Exhibit B and/or a Development Cure Period pursuant to Section 4 of Exhibit B;
(ii) the failure by Seller to maintain an average Efficiency Rate equal to or greater than the Minimum Efficiency Rate over any rolling twelve (12) month period; (iii) if, in any Contract Year, the simple average of the Monthly Storage Availability for such Contract Year (calculated at the end of such Contract Year) is not equal to at 42 least and Seller fails to (x) deliver to Buyer within ten (10) Business Days after Notice from Buyer a plan or report developed by Seller that describes the cause of such failure to maintain a simple average of Monthly Storage Availability for such Contract Year equal to at least

(v) Seller sells, assigns, or otherwise transfers, or commits to sell, assign, or otherwise transfer, the Product, or any portion thereof, during the Delivery Term to any party other than Buyer except as expressly permitted under this Agreement; (vi) except to the extent excused by an Excused Event, if Seller fails to maintain an average Storage Capacity equal to at least of the Storage Contract Capacity for more than ; or
(vii) failure by Seller to provide and maintain Financial Security pursuant to Section 8.8 after Notice and expiration of the cure periods set forth therein, including the failure to replenish amounts in accordance with this Agreement.

11.2 Remedies; Declaration of Early Termination Date. If an Event of Default with respect to a Defaulting Party shall have occurred and be continuing, the other Party (“Non-Defaulting Party”) shall have the following rights:
(a) to send Notice, designating a day, no earlier than the day such Notice is deemed to be received and no later than twenty (20) days after such Notice is deemed to be received, as an early termination date of this Agreement (“Early Termination Date”) that terminates this Agreement (the “Terminated Transaction”) and ends the Delivery Term effective as of the Early Termination Date;
(b) to accelerate all amounts owing between the Parties, and to collect as liquidated damages (i) the Damage Payment (in the case of an Event of Default by Seller occurring before the Commercial Operation Date, including an Event of Default under Section 11.1(b)(i)) 43 subject to the limitations in Section 11.7, or (ii) the Termination Payment calculated in accordance with Section 11.3 below (in the case of any other Event of Default by either Party); (c) to withhold any payments due to the Defaulting Party under this Agreement; (d) to suspend performance; or
(e) to exercise any other right or remedy available at law or in equity, including specific performance or injunctive relief, except to the extent such remedies are expressly limited under this Agreement;
provided, that payment by the Defaulting Party of the Damage Payment or Termination Payment, as applicable, shall constitute liquidated damages and the Non-Defaulting Party’s sole and exclusive monetary remedy for any termination of this Agreement and the Event of Default related thereto.

11.3 Termination Payment. The Termination Payment (“Termination Payment”) for the Terminated Transaction owed pursuant to Section 11.2 (b)(ii) shall be the aggregate of the Settlement Amount plus any or all other amounts due to or from the Non-Defaulting Party (as of the Early Termination Date) netted into a single amount. The Non-Defaulting Party shall calculate, in a commercially reasonable manner, a Settlement Amount for the Terminated Transaction as of the Early Termination Date. Third parties supplying information for purposes of the calculation of Gains or Losses may include, without limitation, dealers in the relevant markets, end-users of the relevant product, information vendors and other sources of market information. The Settlement Amount shall not include consequential, incidental, punitive, exemplary, indirect or business interruption damages. Without prejudice to the Non-Defaulting Party’s duty to mitigate, the Non-Defaulting Party shall not have to enter into replacement transactions to establish a Settlement Amount. Each Party agrees and acknowledges that (a) the actual damages that the Non-Defaulting Party would incur in connection with the Terminated Transaction would be difficult or impossible to predict with certainty, (b) the Damage Payment or Termination Payment described in Section

11.5 Disputes With Respect to Termination Payment. If the Defaulting Party disputes the Non-Defaulting Party’s calculation of the Termination Payment, in whole or in part, 44 the Defaulting Party shall, within five (5) Business Days of receipt of the Non-Defaulting Party’s calculation of the Termination Payment, provide to the Non-Defaulting Party a detailed written explanation of the basis for such dispute. Disputes regarding the Termination Payment shall be determined in accordance with Article 15.

11.7 Seller Pre-COD Liability Limitations. Notwithstanding anything in this Agreement to the contrary, Seller’s aggregate liability under this Agreement prior to the Commercial Operation Date, including liabilities for payment of Construction Delay Damages, COD Delay Damages and the Damage Payment, shall not exceed ARTICLE 12
LIMITATION OF LIABILITY AND EXCLUSION OF WARRANTIES.