Agenda packet, first session — Glendale City Council, October 10, 2023 (part 1 of 5)

A G E N D A

GLENDALE CITY COUNCIL

COUNCIL CHAMBERS
613 E. Broadway, 2nd Floor
Glendale, CA 91206
TELECONFERENCE LOCATION:
604 Benowe Scotia Road, Glendale, CA 91207
Meetings are broadcast live on Glendale TV, viewable on Spectrum Cable, channel 6, and AT&T Uverse, channel 99. Meetings are also streamed live in high definition (HD) on the City webpage, glendaleca.gov/live, on YouTube.com/myglendale, and on Apple TV, Roku, Amazon Fire, iOS and Android devices usinga free app called Cablecast and choosing "Glendale TV" from the menu.

Meetings are also archived on the City Website for viewing anytime at glendaleca.gov/agendas.

Call (818) 548-4013 for program schedules. For public comments and questions during the meeting, call (818) 937-8100. Public comments ona specific agenda item will be taken when that agenda item is discussed. If you have any question about matters on the agenda, or requests for assistance, please contact the City Clerk at (818) 548-2090 during regular business hours.

PLEASE TURN OFF CELLULAR PHONES WHILE INSIDE THE MEETING LOCATION In compliance with the Americans with Disabilities Act (ADA) of 1990, auxiliary hearing aids, sign language translation, and Braille transcripts are available upon request. Assisted listening devices are available same-day upon request. The City Clerk’ office should be notified 72 hours (three business days) or as soon as practicable for requests regarding sign language translation and Braille transcription services. All documents related to open session items on this agenda that are received less than 72 hours prior to this meeting, and are public records, will be available for review in the Office of the City Clerk, 613 E. Broadway, RM 110, Glendale, CA 91206.

Translation services are provided for meetings through the use of bilingual staff for speakers who wish to utilize the service as available. Speakers should state their request by contacting the City Clerk’s office at (818) 548-2090, at least 72 hours prior to the scheduled meeting or as soon as practicable. Please specify the language for which you require translation. The exclusive use of City provided interpreters is not required and persons are welcome to use their own interpreter or speak in their native language.

OCTOBER 10, 2023

REVISED
- Meeting location was revised
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ROLL CALL

1. CLOSED SESSION – 1:00 PM (To Commence at 2:00 PM)
a. Public Employee Performance Evaluation – City Manager b. Conference with Labor Negotiators: The City-designated negotiator attending the closed session is: Mayor Dan Brotman. Unrepresented Employee Position: City Manager
c. Public Employee Performance Evaluation – City Attorney d. Conference with Labor Negotiators: The City-designated negotiator attending the closed session is: Mayor Dan Brotman. Unrepresented Employee Position: City Attorney
e. Conference with Legal Counsel – Anticipated Litigation: Significant Exposure to Litigation Pursuant to Paragraphs (d)(2), (e)(1) and (e)(2) of Government Code Section 54956.9: Two potential cases
f. Conference with Labor Negotiators. The City-designated negotiators attending the closed session are: Roubik Golanian, John Takhtalian, Michael J. Garcia, Gillian van Muyden, Paula Adams, Aymee Martin, Mark Young, Jason Bradford and Peter Brown.

The name of the employee organizations is: I.B.E.W., Local 18, Unit 40

2. REGULAR BUSINESS AGENDA – 6:00 PM
Roll Call
a. Flag Salute: Mayor Dan Brotman
b. Invocation: Raffi Wartanian, Poet Laureate
c. Report of the City Clerk, re: Posting of Agenda. The Agenda for the October 10, 2023 Regular Meeting of the Glendale City Council was Posted on October 5, 2023, on the Bulletin Board Outside City Hall.

3. PRESENTATIONS AND APPOINTMENTS
a. Agenda Preview for the Meetings of Tuesday, October 17, 2023 b. Proclamation designating October 8-14, 2023, as Fire Prevention Week c. Proclamation Designating October 2023 as Filipino-American History Month d. Proclamation Designating October 2023 as Hispanic Heritage Month

4. CONSENT ITEMS (Including Minutes)
The following are Routine and May be Acted Upon by One Motion. Any Member of Council or the Audience Requesting Separate Consideration May do so by Making Such Request Before Motion is Proposed.
a. City Clerk, re: Minutes of the Special City Council, Regular City Council, Joint City Council and Housing Authority Meetings of September 26, 2023, and Special City Council Meetings of October 3, 2023
b. City Manager, re: Withdrawing the City of Glendale’s Participation in the Eco Rapid Transit Joint Powers Authority (JPA)

1. Resolution Authorizing the Withdrawal of the City of Glendale’s Participation in the Eco Rapid Transit Joint Powers Authority (JPA)
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c. Community Services and Parks, re: Federal Workforce Innovation and Opportunity Act (WIOA) funds from the State of California, Employment Development Department (EDD) for the Glendale Youth Alliance and the City of Burbank

1. Motion Accepting Federal Workforce Innovation and Opportunity Act (WIOA) funds from the State of California, Employment Development Department in the amount of $747,830 from July 1, 2023 to June 30, 2024 to enable the Verdugo Workforce Development Board to distribute those funds to the Glendale Youth Alliance and the City of Burbank; Approving the award of WIOA grant funds to the Glendale Youth Alliance in the amount of $607,330 from July 1, 2023 to June 30, 2024 and the City of Burbank in the amount of $140,500 from July 1, 2023 to June 30, 2024 as approved and recommended by the Verdugo Workforce Development Board; and Authorizing the City Manager, or a designee, to execute all agreements, certifications, and documents necessary to accept and implement the funding d. Community Services and Parks, re: Youth@Work funds from the Los Angeles County, Department of Economic Opportunity for the Glendale Youth Alliance

1. Motion Accepting Youth@Work funds from the Los Angeles County, Department of Economic Opportunity in the amount of $530,700, from July 1, 2023 to June 30, 2024 to enable the Verdugo Workforce Development Board to distribute those funds to the Glendale Youth Alliance; Approving the award of Youth@Work grant funds to the Glendale Youth Alliance in the amount of $482,937 from July 1, 2023 to June 30, 2024, as approved and recommended by the Verdugo Workforce Development Board; and Authorizing the City Manager, or a designee, to execute all agreements, certifications, and documents necessary to accept and implement the funding e. Fire Department, re: Donation of surplus Fire Engine to the Coeur d’Alene Tribe of Native American Indians

1. Resolution authorizing the donation (transfer) of one 2003 Pierce Quantum Fire Engine to the Coeur d’Alene Tribe of Native American Indians f. Glendale Water and Power, re: Amendment to the Existing Power Purchase Agreements for the Star Peak and Whitegrass No. 1 Geothermal Projects

1. Resolution authorizing the approval of the Amended and Restated Power Purchase Agreements, each an attachment to the original long-term Power Sales Agreements between the Southern California Public Power Authority (SCPPA) and City of Glendale for the purchase of the renewable energy from the Star Peak and Whitegrass Geothermal Projects, and further approving two Letter Agreements between SCPPA and Open Mountain Energy, LLC (Developer) related to the projects, which will require the Developer to pay at least approximately $2.2M
g. Libraries, Arts, and Culture, re: Library, Arts & Culture, re: Acceptance of Grant Funds for Adult Literacy and ESL Services

1. Motion accepting $133,277 in California Library Literacy Services grant funds from the California State Library to support services and programs for adult literacy and English as a Second Language; and authorizing the City Manager or a designee to execute all agreements, amendments, certifications, and documents necessary to accept and implement the funding

2. Resolution appropriating $133,277 from the California State Library Literacy Services program
h. Libraries, Arts, and Culture, re: Contract Amendment to Increase Maximum Cost of Contract with Innovative Interfaces Incorporated by $10,000 and renew LINK+ services
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1. Motion authorizing amendment to contract with Innovative Interfaces Incorporated to increase the maximum cost by $10,000 for a new not-to-exceed amount of $471,550 in order to renew LINK+ services
i. Public Works, re: North Brand Boulevard Complete Streets Demonstration Project, Adopt Revised Specification

1. Resolution rejecting the bid received and adopting the revised project Plans and Specification for the North Brand Boulevard Complete Streets Demonstration, Specification No. 3942R, and Plan No. 1-3114
j. Public Works, re: Uninterruptable Power Supply (UPS) Systems Repairs and Maintenance Services, Award Contract

1. Motion Awarding a Contract to Odyssey Power Corporation (Odyssey) for Citywide UPS Systems Repairs and Maintenance services per Specification No. 3949 for the not-to-exceed amount of $240,561 for five-years and directing the City Manager, or a designee, to execute the contract
k. Public Works, re: Construction Contract for Distributed Drywell Installation Project

1. Motion awarding a construction contract to Bali Construction, Inc. in the amount of $2,206,602, approving a 15 percent contract contingency in the amount of $330,990, rejecting all other bids, and authorizing the City Manager or a designee to execute the contract

2. Resolution of Appropriation to appropriate funds in the amount of $2,758,252 for the Distributed Drywell Installation Project
l. Public Works, re: Fiscal Year 2023 Slurry Seal and Crack Seal Program, Reject Bids and Readvertise

1. Resolution rejecting all bids received for the Fiscal Year 2023 Slurry Seal and Crack Seal Program, adopting the revised Plans and Specification for Fiscal Year 2023 Slurry Seal and Crack Seal Program, Specification No. 3929R, and Plan Nos. 1-3098 and 49- 256, and authorizing the City Clerk to re-advertise for bids

5. CITY COUNCIL/STAFF COMMENTS

6. COMMUNITY EVENT ANNOUNCEMENTS (3-Minutes)

7. ADOPTION OF ORDINANCES
a. Community Development, re: Amendments to the General Plan Land Use Map (Case No. PGPA-001746-2023), Title 30 of the Glendale Municipal Code, 1995 (Zoning Code Text Amendment) and Zoning Map (Case No. PZC-0007-2023) relating generally to the Tropico Transit Oriented District (TOD) Zoning and Objective Design Standards Project

1. Ordinance Adding Chapter 30.16 entitled “Transit Oriented Development Districts,” and Amending Sections 30.10.010, 30.30.010, 30.30.020, 30.30.030, 30.31.020,

30.32.030, 30.32.040, 30.32.050, 30.32.070, 30.32.090, 30.32.171, 30.32.172,

30.32.173, 30.33.120, 30.33.140, 30.33.150, 30.33.180, 30.33.190, 30.33.200,

30.33.210, 30.33.215, 30.33.220, 30.34.090, 30.34.100, 30.34.120 of Title 30 of the Glendale Municipal Code, 1995, Relating to the Tropico Transit Oriented District Zoning and Objective Design Standards Project (Case No. PZC-0007-2023) (Najarian, 09/26/23)

2. Ordinance Amending the Zoning Map to Reflect New Zoning Designations related to Zone Change PZC-0007-2023 in connection with the Tropico Transit Oriented District 4 TYPED 10/6/2023 2:25:10 PM
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Zoning and Objective Design Standards Project (Najarian, 09/26/23) b. Community Development, re: Overview of Changes to Ordinance to Amend GMC

30.25.030 Regarding Streamlining the Historic District Designation Process

1. Ordinance Amending Section 30.25.030 of Title 30 to the Glendale Municipal Code, 1995, Relating Generally to Streamlining the City’s Historic District Designation Process (50%+) (Devine, 09/12/23)

2. Ordinance Amending Section 30.25.030 of TItle 30 to the Glendale Municipal Code, 1995, Relating Generally to Streamlining the City’s Historic District Designation Process (67%) (Najarian, 09/12/23)

8. ACTION ITEMS
a. Public Works, re: Approval to Release the Request for Proposal (RFP) for Operation and Maintenance of Fixed Route and Dial-A-Ride Transit Services

1. Resolution to approve and authorize the release of the Request for Proposal for operation and maintenance of fixed route and Dial-A-Ride transit services

9. HEARINGS
a. City Attorney, re: Fourth Public Hearing Regarding the Composition of Council Districts Related to the City's Proposed Transition to District-Based Councilmember Elections

1. Introduction of Ordinance Establishing Council District Boundaries and Scheduling Elections Within the Districts, Subject to Voter Approval of a Ballot Measure to Amend the City Charter to Change the City’s Electoral System from an At-Large System to a By-District System with a Directly Elected Mayor and Six Council Districts

2. Motion Directing Staff Regarding Preparation of Draft District Maps

10. REPORTS - INFORMATION

11. WRITTEN COMMUNICATIONS

12. DISCUSSION OF COUNCILMEMBER FUTURE AGENDA REQUESTS

13. ORAL COMMUNICATIONS
Discussion is Limited to Items NOT a Part of this Agenda. Each Speaker is Allowed 5 minutes.

Council May Question or Respond to The Speaker But There Will be no Debate or Decision.

The City Manager May Refer the Matter to the Appropriate Department for Investigation and Report.

14. NEW BUSINESS

15. ADJOURNMENT
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Ayes:

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Absent:

Abstain:

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A G E N D A

GLENDALE CITY COUNCIL

COUNCIL CHAMBERS
613 E. Broadway, 2nd Floor Glendale, CA 91206
SEPTEMBER 26, 2023

ROLL CALL

1. CLOSED SESSION

2. REGULAR BUSINESS AGENDA – 6:04 PM
Roll Call – Kassakhian
a. Flag Salute: Mayor Dan Brotman
b. Invocation: Suzie Abajian, City Clerk
c. Report of City Clerk, re: Posting of Agenda. The Agenda for the September 26, 2023 Regular Meeting of the Glendale City Council was Posted on September 21, 2023, on the Bulletin Board Outside City Hall.

Motion to approve Councilmember Kassakhian’s attendance via teleconference due to emergency circumstances
Moved: Asatryan Seconded: Devine

3. PRESENTATIONS AND APPOINTMENTS
a. Agenda Preview for the Meetings of Tuesday, October 3, 2023 The regular meetings for October 3 have been cancelled but there will be a Council in your Neighborhood Special Meeting at 6pm at Sparr Heights Community Center, 1613 Glencoe Way, Glendale CA 91208
b. Annual Legislative Update from Assemblymember Laura Friedman c. Proclamation designating September 2023 as Blood Cancer Awareness Month Peter Anton from International Myeloma Foundation

Items 4a and 4c pulled for separate consideration.
a. City Clerk, re: Minutes of the Special City Council and Regular City Council Meetings of September 19, 2023
Moved: Devine Seconded: Najarian
Ayes:

Noes:

Absent:

Abstain:
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b. Fire Department, re: Authorizing to amend the agreement with Citygate Associates LLC for providing Standards of Cover consulting services and to include additional services for Verdugo Fire Communications Center assessment and multiyear strategic planning

1. Motion to approve an amendment to the Professional Services Agreement (PSA) with Citygate Associates LLC for providing Standards of Cover consulting services and to include additional services in the amount of $123,477 for Verdugo Fire Communications Center assessment and multiyear strategic planning Moved: Najarian Seconded: Devine
c. Glendale Water and Power, re: Glendale Water and Power (GWP) Power Source Disclosure Report for Calendar Year 2022
Staff Comment:

Roubik Golanian, City Manager
Presenting:

Chie Valdez, Integrated Resource Planning Administrator

1. Motion to Note and File the GWP Power Source Disclosure Report for Calendar Year 2022
Moved: Asatryan Seconded: Devine
d. Human Resources, re: Providing for the Establishment of Classification Titles and Compensation for Employees of the City of Glendale

1. Resolution 23-134 for the Establishment of Classification Titles and Compensation for Employees of the City of Glendale covered by the Glendale Management Association Memorandum of Understanding, including Employee Relations Exempt Classifications
Moved: Najarian Seconded: Devine
e. Police Department, re: 2023-2024 Grant from the State of California Office of Traffic Safety, Selective Traffic Enforcement Program, for distracted driving, Vehicle Code, bicycle, pedestrian, and driving under the influence violations

1. Motion to approve the Glendale Police Department’s participation in the State of California Office of Traffic Safety, Selective Traffic Enforcement Program, and authorize the City Manager, or his designee, to accept grant funds in the amount of $314,000
Ayes:

Noes:

Absent:

Abstain:

Ayes:

Noes:

Absent:

Abstain:

Ayes:

Noes:

Absent:

Abstain:
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Moved: Najarian Seconded: Devine
f. Police Department, re: FY23 Byrne Discretionary Grants Program

1. Motion authorizing acceptance of the Bureau of Justice Assistance (BJA) 2023 Byrne Discretionary Grants Program funds in the amount of $731,000 and authorizing the City Manager, or his designee, to execute the necessary agreements, certification, and other documents required to accept the Grant Moved: Najarian Seconded: Devine

2. Motion authorizing the City Manager, or his designee, to execute a Professional Services Agreement with Ascencia for the services of additional staff for street outreach and housing retention case management in an amount not to exceed $200,000
Moved: Najarian Seconded: Devine

3. Resolution 23-135 to appropriate $731,000 in BJA 2022 Byrne Discretionary Grants Program funds
Moved: Najarian Seconded: Devine
g. Public Works, re: Palmer Avenue and Green Street Rehabilitation Project

1. Resolution 23-136 adopting the Plans and Specification for the Palmer Avenue and Green Street Rehabilitation Project, Specification No. 3950, Plan Nos. 1- 3116 and 49-260; and directing the City Clerk to Advertise for Bids Moved: Najarian Seconded: Devine
h. Public Works, re: Professional Services Agreement for Professional Consultant Services for the Citywide Traffic and Mobility Study

1. Motion authorizing the City Manager or a designee to enter into and execute a Professional Services Agreement with ADVANTEC Consulting Engineers, Inc. to provide Professional Consultant Services for the Citywide Traffic and Mobility Study in the amount of $495,208
Ayes:

Noes:

Absent:

Abstain:

Ayes:

Noes:

Absent:

Abstain:

Ayes:

Noes:

Absent:

Abstain:

Ayes:

Noes:

Absent:

Abstain:

Ayes:

Noes:

Absent:

Abstain:
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Moved: Najarian Seconded: Devine

5. CITY COUNCIL/STAFF COMMENTS
Councilmember Asatryan directed staff to post the agenda forecast on the city’s website to make it available to the public. Kassakhian seconded. Councilmember Asatryan asked that the motions in the minutes include the specific directions given by councilmembers. City Attorney Garcia stated that when there is a motion to note and file with additional directions from Council, those directions are not usually included in the motion as conditions. He asked that if there is a specific direction that Council would like to include as a condition of that motion, that they make that direction explicit.

Councilmember Devine announced that Glenn Webb, an environmental and sustainability advocate, passed away. She sent her condolences to the family of the deceased.

Mayor Brotman spoke about the catastrophic loss and ethnic cleansing of Armenians by the Azerbaijani government from the Republic of Artsakh. He stated that we should be thinking about asking our government to put sanctions on Azerbaijan and call out the war crimes of the Aliyev regime.

Asatryan reiterated that what is taking place in Artsakh is genocide and stated that all the residents of the Glendale sister city of Martuni have been moved out of their homes. She stated that here are thousands of families who have become homeless and thousands more who are trying to escape to safety. Councilmember Asatryan expressed disappointment in the pledge that Samantha Powers had made for humanitarian aid to the refugees from Artsakh stating that it was grossly insufficient and insulting. She also mentioned that the Azerbaijani government has rounded up all the leaders of the Republic of Artsakh to try them and she compare this to the rounding up and execution of all the leaders and intellectuals during the 1915 Armenian Genocide. She made a call to the allies of the Armenian community to speak up and help with humanitarian efforts. Asatryan spoke about her family in Artsakh and the connection that most Armenians have to the impacted families.

She spoke about the humanitarian campaign that was launched to help the survivors of the 1915 genocide and made a call for a similar action in the US to address the current humanitarian crisis. She invited the public to visit the website https://americawethankyou.org/, to learn more about the movement to recognize the outpouring of generosity by the American people from the onset of the Armenian Genocide (1915-1923).

6. COMMUNITY EVENT ANNOUNCEMENTS (3-Minutes)
Raffi Wartanian
Allan Durham

7. ADOPTION OF ORDINANCES
Najarian recused himself for item 7a due to a possible conflict of interest.

Ayes:

Noes:

Absent:

Abstain:
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a. Community Development, re: Ordinance 6010 Extending by an additional one year, Interim Urgency Ordinance 5996 Prohibiting Issuance of Entitlements and/or Permits for Developments with New or Converted Drive-Through Waiting Lanes in the City and Declaring the Urgency Thereof (Devine, 09/12/23) Moved: Devine Seconded: Asatryan
Staff Comments:

Roubik Golanian, City Manager
Bradley Calvert, Director of Community Development
Public Comments:

Tony Papavasiliou
Brian Zentmyer
b. Community Development, re: Ordinance 6011 Extending by 10 Months and 15 Days, Interim Urgency Ordinance No. 6009 Prohibiting Issuance of Entitlement and/or Permits for Establishment of New or Replacement Retail Uses Selling Firearms or Ammunition and Declaring the Urgency Thereof (Devine, 09/19/23) Moved: Asatryan Seconded: Devine

8. ACTION ITEMS
a. Public Works, re: Neighborhood Traffic Calming Program Staff Comment:

Roubik Golanian, City Manager
Presenting:

Pastor Casanova, Principal Traffic Engineer
Public Comments:

Araik Sinanian
Allan Durham
Kassakhian left the meeting.

1. Motion approving revisions to the Neighborhood Traffic Calming Program Moved: Devine Seconded: Asatryan
Ayes:

Noes:

Absent:

Abstain:

Ayes:

Noes:

Absent:

Abstain:

Ayes:

Noes:

Absent:

Abstain:
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b. Glendale Water and Power, re: Glendale Water and Power’s Proposed Electric Rate Increase and Schedule of Community Meetings
Staff Comments:

Roubik Golanian, City Manager
Mark Young, General Manager of GWP
Scott Mellon, Assistant General Manager/Power Management Presenting:

David Davis, Utility Finance Manager
Tony Georgis, Newgen Strategies & Solutions, LLC
Public Comments:

Fernando Roldan
David
Lucia Hazrian

1. Motion Directing Staff to Complete the Cost-of-Service Analysis (COSA) process and return to City Council for the implementation of the full rate study by customer class including presentation of said electric rates for City Council’s consideration for adoption
Moved: Najarian Seconded: Devine
c. Public Works, re: Approval to Release the Request for Proposal (RFP) for Operation and Maintenance of Fixed Route and Dial-A-Ride Transit Services

1. Resolution to approve and authorize the release of the Request for Proposal for operation and maintenance of fixed route and Dial-A-Ride transit services Item 8c moved to October 10, 2023 Council Meeting.

9. HEARINGS
a. Community Development, re: Amendments to the General Plan Land Use Map (Case No. PGPA-001746-2023), Title 30 of the Glendale Municipal Code, 1995 (Zoning Code Text Amendment) and Zoning Map (Case No. PZC-0007-2023) relating generally to the Tropico Transit Oriented District (TOD) Zoning and Objective Design Standards Project
Hearing opened 9:02 p.m. and closed at 9:45 p.m.

Presenting:

Vilia Zemaitaitis, Deputy Director of Community Development/Long Range Planning Staff Comments:

Bradley Calvert, Director of Community Development
Gillian Van Muyden, Chief Asst. City Attorney
Ayes:

Noes:

Absent:

Abstain:
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Public Comments:

Allan Durham
Fernando Roldan

1. Resolution 23-137 Amending the General Plan Land Use Map Moved: Devine Seconded: Asatryan

2. Ordinance for Introduction Amending Title 30 of the Glendale Municipal Code, 1995 Introduced by: Najarian

3. Ordinance for Introduction Amending the Citywide Zoning Map Introduced by: Najarian

10. REPORTS - INFORMATION

11. WRITTEN COMMUNICATIONS

12. ORAL COMMUNICATIONS
Discussion is Limited to Items NOT a Part of this Agenda. Each Speaker is Allowed 5 minutes. Council May Question or Respond to The Speaker But There Will be no Debate or Decision.The City Manager May Refer the Matter to the Appropriate Department for Investigation and Report.

Gevorg Khudyan
Rita M.

Eric A.

Maro Yacoubian
Vahe Muradyan
Allen Dish
Damian Sullivan
Ramella Eraghi
Gustavo Moreno
Fernando Roldan
Belissa Cohen
Emmanuel Gulakian
Frank Higginbotham
Sasha

13. NEW BUSINESS

14. ADJOURNMENT – 10:45 p.m.

Moved: Najarian Seconded: Devine
Ayes:

Noes:

Absent:

Abstain:

Mayor of the City of Glendale
City Clerk of the City of Glendale 13 of 1291
1 M I N U T E S
SPECIAL MEETING: GLENDALE CITY COUNCIL

COUNCIL CHAMBERS
613 E. Broadway, 2nd Floor
Glendale, CA 91206
SEPTEMBER 26, 2023
The Special Public Meeting of the Glendale City Council convened in the City Hall Council Chambers, in said City, at 3:30 p.m. on the above date, pursuant to a call for such meeting signed by the City Clerk of the City Council, and on file with the City Clerk, a copy of which is as follows:

September 14, 2023
Date
A SPECIAL PUBLIC MEETING of the City Council is hereby called to meet at 3:00 PM on Tuesday, September 26, 2023, in the Council Chamber, 613 E. Broadway, 2nd Floor, Glendale, CA 91206 to consider the following item(s) of business, to wit;

1. Community Development, re: Use of City Days at the Alex Theatre: Wild Honey Foundation
a. Motion to approve use of one of twelve annual City Days at the Alex Theatre for Wild Honey Foundation’s Unforgettable Sunrise event on September 30, 2023 and to cover the costs associated with labor and additional equipment rentals at the Theatre for the day

2. Public Works, re: Slow Streets Pilot Program Evaluation a. Motion authorizing the discontinuation of the Slow Streets Program and affirming the City’s commitment to addressing traffic safety needs in the community Written Notice of said meeting was given, which Notice consisted of a copy of the foregoing Call, and was served on each Member of the Council not joining in the Call, and upon the in said City not less than 24 hours before the time fixed in said Call for said meeting, as follows:

Upon Elen Asatryan at 5:00 p.m. September 14, 2023 Glendale, CA Upon Paula Devine at 5:00 p.m. September 14, 2023 Glendale, CA Upon Ardy Kassakhian at 5:00 p.m. September 14, 2023 Glendale, CA Upon Ara Najarian at 5:00 p.m. September 14, 2023 Glendale, CA Upon Dan Brotman at 5:00 p.m. September 14, 2023 Glendale, CA Mayor Brotman called the meeting to order at 3:30 p.m.

ROLL CALL
- Absent: Kassakhian, Devine (walked in at 3:31 p.m.)
- Report of the City Clerk of the City Council, re: Posting of Agenda. The Agenda for the Tuesday, September 26, 2023 Special Public Meeting of the City Council was posted on September 21, 2023, on the Bulletin Board Outside City Hall. 14 of 1291
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Ayes:

Noes:

Absent:

Abstain:

1. Community Development, re: Use of City Days at the Alex Theatre: Wild Honey Foundation
Staff Comments:

Roubik Golanian, City Manager
Tamar Sadd, Deputy Director of CDD
Public Comment:

Paul Rock
a. Motion to approve use of one of twelve annual City Days at the Alex Theatre for Wild Honey Foundation’s Unforgettable Sunrise event on September 30, 2023 and to cover the costs associated with labor and additional equipment rentals at the Theatre for the day

2. Public Works, re: Slow Streets Pilot Program Evaluation Presenting:

Pastor Casanova, Principal Traffic Engineer
Staff Comment:

Yazdan Emrani, Director of Public Works
a. Motion authorizing the discontinuation of the Slow Streets Program and affirming the City’s commitment to addressing traffic safety needs in the community Moved: Asatryan Seconded: Devine
ADJOURNMENT – 4:11 p.m.

Moved: Najarian Seconded: Devine
Mayor of the City of Glendale
City Clerk of the City of Glendale
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JOINT MEETING: GLENDALE CITY COUNCIL AND GLENDALE HOUSING

AUTHORITY COUNCIL CHAMBERS
613 E. Broadway, 2nd Floor
Glendale, CA 91206
SEPTEMBER 26, 2023
The Joint Meeting of the Glendale City Council and Glendale Housing Authority convened in the City Hal Council Chambers, in said City, at 3:04 p.m. on the above date, pursuant to a call for such meeting signed by the City Clerk of the City Council, and on file with the City Clerk, a copy of which is as follows:

September 21, 2023
Date
A JOINT PUBLIC MEETING of the City Council and Housing Authority is hereby called to meet at 3:00 PM on Tuesday, September 26, 2023, in the Council Chamber, 613 E. Broadway, 2nd Floor, Glendale, CA 91206 to consider the following item(s) of business, to wit;

1. Community Services and Parks, re: Funding Recommendations by the Glendale Continuum of Care (CoC) Board for the Submission of the Glendale CoC Funding Application to the U.S. Department of Housing and Urban Development as part of the 2023 CoC Notice of Funding Opportunity Competition
a. Council Motion to approve the 2023 Continuum of Care (CoC) Program Priorities and authorize the submission of a grant application to the Federal Department of Housing and Urban Development (HUD), on behalf of the Glendale CoC, under the 2023 CoC Program Competition, as recommended by the CoC Board; and authorize the City Manager or a designee to execute all agreements, certifications, and documents necessary to accept and implement the funding
b. Housing Authority Motion to approve the 2023 Continuum of Care (CoC) Program Priorities and authorize the submission of a grant application to the Federal Department of Housing and Urban Development (HUD), on behalf of the Glendale CoC, under the 2023 CoC Program Competition, as recommended by the CoC Board; and authorize the City Manager or a designee to execute all agreements, certifications, and documents necessary to accept and implement the funding

2. Community Services and Parks, re: Reprogramming of Community Development Block Grant (CDBG) community agency Capital Improvement Project (CIP) funds from FY 2021-2022 and FY 2023-2024 from Homenetmen Ararat
a. Council Motion to reprogram returned funding from Homenetmen Ararat CIP projects totaling $454,018
b. Council Motion to approve a substantial amendment to CDBG, ESG, and HOME Annual Action Plans for FY 2021-2022 and FY 2023-2024; authorize submission of the substantial amendments to the Annual Action Plans to the U.S. Department of Housing and Urban Development (HUD), and authorize the City Manager, or a designee, to redirect excess, cancelled, or unused program funds under $50,000 from one project to another with CDBG Advisory Committee approval
c. Housing Authority Motion to approve a substantial amendment to CDBG, ESG, and HOME Annual Action Plans for FY 2021-2022 and FY 2023-2024; authorize submission of the substantial amendments to the Annual Action Plans to the U.S. Department of Housing and Urban Development (HUD), and authorize the City Manager, or a designee, to redirect excess, cancelled, or unused program funds under $50,000 from one project 16 of 1291
2 to another with CDBG Advisory Committee approval
d. Council Resolution of Appropriation to reprogram Community Development Block Grant (CDBG) City Capital Improvement Project (CIP) funds from FY 2021-2022 and FY 2023- 2024 from Homenetmen Ararat
Written Notice of said meeting was given, which Notice consisted of a copy of the foregoing Call, and was served on each Member of the Council not joining in the Call, and upon the in said City not less than 24 hours before the time fixed in said Call for said meeting, as follows:

Upon Robert Adjinian at 5:00 p.m. September 21, 2023 Glendale, CA Upon Elen Asatryan at 5:00 p.m. September 21, 2023 Glendale, CA Upon Paula Devine at 5:00 p.m. September 21, 2023 Glendale, CA Upon Ardy Kassakhian at 5:00 p.m. September 21, 2023 Glendale, CA Upon Ara Najarian at 5:00 p.m. September 21, 2023 Glendale, CA Upon Laura Parazian at 5:00 p.m. September 21, 2023 Glendale, CA Upon Dan Brotman at 5:00 p.m. September 21, 2023 Glendale, CA Mayor Brotman called the meeting to order at 3:04 p.m.

ROLL CALL
- Absent: Kassakhian
- Report of the City Clerk of the City Council and Housing Authority, re: Posting of Agenda. The Agenda for the Tuesday, September 26, 2023 joint public meeting of the City Council and Housing Authority was posted on September 21, 2023, on the Bulletin Board outside City Hall.

Arsine Isayan, Homeless Programs Manager
a. Council Motion to approve the 2023 Continuum of Care (CoC) Program Priorities and authorize the submission of a grant application to the Federal Department of Housing and Urban Development (HUD), on behalf of the Glendale CoC, under the 2023 CoC Program Competition, as recommended by the CoC Board; and authorize the City Manager or a designee to execute all agreements, certifications, and documents necessary to accept and implement the funding
Moved: Najarian Seconded: Devine
Vote as Follows
a. Ayes:

Noes:

Absent:

Abstain:

Asatryan, Devine, Najarian, Brotman
None
Kassakhian
None
17 of 1291
3 b. Housing Authority Motion to approve the 2023 Continuum of Care (CoC) Program Priorities and authorize the submission of a grant application to the Federal Department of Housing and Urban Development (HUD), on behalf of the Glendale CoC, under the 2023 CoC Program Competition, as recommended by the CoC Board; and authorize the City Manager or a designee to execute all agreements, certifications, and documents necessary to accept and implement the funding
Moved: Devine Seconded: Najarian
Vote as Follows

Maggie Kavarian, Community Services Manager
a. Council Motion to reprogram returned funding from Homenetmen Ararat CIP projects totaling $454,018
Moved: Asatryan Seconded: Najarian
Vote as Follows
b.
b. Council Motion to approve a substantial amendment to CDBG, ESG, and HOME Annual Action Plans for FY 2021-2022 and FY 2023-2024; authorize submission of the substantial amendments to the Annual Action Plans to the U.S. Department of Housing and Urban Development (HUD), and authorize the City Manager, or a designee, to redirect excess, cancelled, or unused program funds under $50,000 from one project to another with CDBG Advisory Committee approval
Moved: Asatryan Seconded: Najarian
Vote as Follows
c.
c. Housing Authority Motion to approve a substantial amendment to CDBG, ESG, and HOME Annual Action Plans for FY 2021-2022 and FY 2023-2024; authorize submission of the substantial amendments to the Annual Action Plans to the U.S. Department of Housing and Urban Development (HUD), and authorize the City Manager, or a designee, to redirect excess, cancelled, or unused program funds under $50,000 from one project to another with CDBG Advisory Committee approval
Ayes:

Noes:

Absent:

Abstain:

Adjinian, Asatryan, Devine, Parazian, Brotman, Najarian None
Kassakhian
None
Ayes:

Noes:

Absent:

Abstain:

Asatryan, Devine, Najarian, Brotman
None
Kassakhian
None
Ayes:

Noes:

Absent:

Abstain:

Asatryan, Devine, Najarian, Brotman
None
Kassakhian
None
18 of 1291
4 Moved: Brotman Seconded: Devine
Vote as Follows
d. Council Resolution 23-133 of Appropriation to reprogram Community Development Block Grant (CDBG) City Capital Improvement Project (CIP) funds from FY 2021-2022 and FY 2023- 2024 from Homenetmen Ararat
Moved: Asatryan Seconded: Najarian
Vote as Follows
d.

ADJOURNMENT – 3:25 p.m.
- Council
Moved: Najarian Seconded: Asatryan
- Housing Authority
Moved: Brotman Seconded: Devine
Ayes:

Noes:

Absent:

Abstain:

Adjinian, Asatryan, Brotman, Devine, Parazian, Najarian None
Kassakhian
None
Ayes:

Noes:

Absent:

Abstain:

Asatryan, Devine, Najarian, Brotman
None
Kassakhian
None
Mayor of the City of Glendale
City Clerk of the City of Glendale
Chair of the Glendale Housing Authority
Clerk of the Glendale Housing Authority
19 of 1291
1 4A

M I N U T E S
SPECIAL MEETING: GLENDALE CITY COUNCIL

COUNCIL CHAMBERS
613 E. Broadway, 2nd Floor
Glendale, CA 91206
OCTOBER 3, 2023
The Special Public Meeting of the Glendale City Council convened in the City Hall Council Chambers, in said City, at 2:34 p.m. on the above date, pursuant to a call for such meeting signed by the City Clerk of the City Council, and on file with the City Clerk, a copy of which is as follows:

September 27, 2023
Date
A SPECIAL PUBLIC MEETING of the City Council is hereby called to meet at 2:30 PM on Tuesday, October 3, 2023, in the Council Chamber, 613 E. Broadway, 2nd Floor, Glendale, CA 91206 to consider the following item(s) of business, to wit;

1. CLOSED SESSION
a. Conference with Legal Counsel - Pending Litigation: Haddadian v. City of Glendale, L.A.S.C. Case No. BC 722321
b. Conference with Legal Counsel – Anticipated Litigation: Significant exposure litigation pursuant to paragraph subdivisions (d)(2) and (e)(2) of Section 54956.9:

One (1) potential case
c. Conference with Legal Counsel – Pending Litigation: Historic Preservation Alliance, et al. v. City of Laguna Beach, et al., Fourth Appellate District, Division Three, Case No.

G061671
Written Notice of said meeting was given, which Notice consisted of a copy of the foregoing Call, and was served on each Member of the Council not joining in the Call, and upon the in said City not less than 24 hours before the time fixed in said Call for said meeting, as follows:

Upon Elen Asatryan at 5:00 p.m. September 27, 2023 Glendale, CA Upon Paula Devine at 5:00 p.m. September 27, 2023 Glendale, CA Upon Ardy Kassakhian at 5:00 p.m. September 27, 2023 Glendale, CA Upon Ara Najarian at 5:00 p.m. September 27, 2023 Glendale, CA Upon Dan Brotman at 5:00 p.m. September 27, 2023 Glendale, CA Mayor Brotman called the meeting to order at 2:34 p.m.

ROLL CALL
- Absent: Asatryan, Devine
- Report of the City Clerk of the City Council, re: Posting of Agenda. The Agenda for the Tuesday, October 3, 2023 Special Public Meeting of the City Council was posted on September 27, 2023, on the Bulletin Board Outside City Hall.

1. CLOSED SESSION
a. Conference with Legal Counsel - Pending Litigation: Haddadian v. City of Glendale, L.A.S.C. Case No. BC 722321
20 of 1291
2 Kassakhian, Najarian, Brotman
None
Asatryan, Devine
None
Ayes:

Noes:

Absent:

Abstain:
b. Conference with Legal Counsel – Anticipated Litigation: Significant exposure litigation pursuant to paragraph subdivisions (d)(2) and (e)(2) of Section 54956.9: One (1) potential case
c. Conference with Legal Counsel – Pending Litigation: Historic Preservation Alliance, et al. v. City of Laguna Beach, et al., Fourth Appellate District, Division Three, Case No.

G061671
Motion to approve Councilmember Devine’s attendance via teleconference to discuss closed session items
Moved: Najarian Seconded: Kassakhian
City Attorney Mike Garcia indicated that action is anticipated on items 1a and 1c. Council recessed to closed session at 2:37 p.m.

Mayor of the City of Glendale
City Clerk of the City of Glendale
21 of 1291
4A

M I N U T E S
SPECIAL MEETING: GLENDALE CITY COUNCIL

SPARR HEIGHTS COMMUNITY CENTER
1613 GLENCOE WAY
Glendale, CA 91208
OCTOBER 3, 2023
The Special Public Meeting of the Glendale City Council convened in the City Hall Council Chambers, in said City, at 6:02 p.m. on the above date, pursuant to a call for such meeting signed by the City Clerk of the City Council, and on file with the City Clerk, a copy of which is as follows:

September 27, 2023
Date
A SPECIAL PUBLIC MEETING of the City Council is hereby called to meet at 6:00 PM on Tuesday, October 3, 2023, in the Sparr Heights Community Center at 1613 Glencoe Way, Glendale, CA 91208 to consider the following item(s) of business, to wit;

1. ITEMS FOR DISCUSSION:
a. Pay By Phone Parking Program
b. Organics Waste Recycling Program
c. AB 645 – Automated Speed Cameras
d. Sustainability Initiatives
a. Climate Action and Adaptation Plan
b. Leaf Blower Ban
c. Plastic Waste Regulations
e. Glendale Water and Power Incentive Programs
a. Energy Efficiency Programs
b. Low Income Programs
c. Transportation Electrification Programs

2. ORAL COMMUNICATIONS
Written Notice of said meeting was given, which Notice consisted of a copy of the foregoing Call, and was served on each Member of the Council not joining in the Call, and upon the in said City not less than 24 hours before the time fixed in said Call for said meeting, as follows:

ROLL CALL
- Absent: Devine
- Report of the City Clerk of the City Council, re: Posting of Agenda. The Agenda for the Tuesday, June 20, 2023 Special Public Meeting of the City Council was posted on Thursday, June 15, 2023, on the Bulletin Board Outside City Hall. 22 of 1291

1. Items for Discussion
a. Pay By Phone Parking Program
Presenting:

Yazdan Emrani, Director of Public Works
Public Comment:

Araik Sinanyan
b. Organics Waste Recycling Program
Presenting:

Yazdan Emrani, Director of Public Works
Public Comments:

Andre Ordubegian
Mikaela Stone
c. AB 645 – Automated Speed Cameras
Presenting:

Pastor Casanova, Principal Traffic Engineer
Tigran Topadzhikyan, Police Lieutenant
Public Comment:

Tony Passarella
Gigi Garcia
Rich Boccia
Andre Ordubegian
d. Sustainability Initiatives
 Climate Action and Adaptation Plan
 Leaf Blower Ban
 Plastic Waste Regulations
Presenting:

David Jones, Sustainability Officer
Elizabeth Harris, Sustainability Associate
Public Comment:

Andre Ordubegian
e. Glendale Water and Power Incentive Programs
 Energy Efficiency Programs
 Low Income Programs
 Transportation Electrification Programs
Presenting:

Aneta Badalian, Business Transformation Manager
23 of 1291
Public Comment:

Araik Sinanian

2. Oral Communications
Patrick Murphy
Mary-Lynne Fisher
Stephen Meek
Ron Scott
Stuart Byles
Jordan Henry
Adjournment by Consensus – 8:05 p.m.

Mayor of the City of Glendale
City Clerk of the City of Glendale
24 of 1291

AGENDA ITEM

CITY OF GLENDALE, CALIFORNIA

REPORT TO THE CITY COUNCIL
Report: Withdrawing the City of Glendale’s Participation from Eco Rapid Transit (ERT) Joint Powers Authority (JPA)
1) Resolution Authorizing the Withdrawal of the City of Glendale’s Participation from Eco Rapid Transit (ERT) Joint Powers Authority (JPA)

COUNCIL ACTION

EXECUTIVE SUMMARY
Eco-Rapid Transit (ERT), formally known as the Orangeline Development Authority (ODLA), is a joint powers authority (JPA) created in 2003. Its main objective is to pursue development of an environmentally friendly, reliable, and seamless transit system that connects the communities between Hollywood Burbank Airport, downtown Los Angeles, and the southeast region of Los Angeles County. Several ERT member agencies are also members of the Gateway Cities Council of Governments (GCCOG). Over the years, ERT’s strong advocacy and partnership with GCCOG has made the West Santa Ana Branch (WSAB) project the top priority for Metro. With the WSAB Project being led by Metro and guided by GCCOG’s WSAB City Managers Technical Advisory Committee (TAC), ERT Board contemplated its new mission as the JPA has reached its initial goals.

After careful consideration on the associated costs as a standalone entity and faced with sever fiscal challenges, ERT Board agreed to sunset the JPA and seek other opportunities for restructuring. Therefore, it is recommended that formal withdrawal from ERT be approved by designating the City Manager or his designee to cast the vote at the last scheduled ERT Board meeting.

Item Type: Consent Item
Approved for 10/10/2023 calendar
25 of 1291
2 COUNCIL PRIORITIES
This report falls outside of the four priority areas adopted by the City Council.

RECOMMENDATION
Approve the withdrawal of the City of Glendale’s participation from Eco Rapid Transit (ERT) Joint Powers Authority (JPA).

BACKGROUND AND ANALYSIS
Established in 2003, the Eco-Rapid Transit JPA (also referred to as the Orangeline Development Authority) consists of 13 members: Artesia, Paramount, Downey, South Gate, Cudahy, Bell, Maywood, Huntington Park, Bell Gardens, Cerritos, Glendale and the Burbank Airport. Eco-Rapid Transit was created to pursue development of an environmentally friendly, reliable, and seamless transit system that connects the communities between Hollywood Burbank Airport, downtown Los Angeles, and the southeast region of Los Angeles County. The City of Glendale joined in 2008. Eco-Rapid Transit has concentrated on two segments: 1) a 20-mile southern portion from Artesia to Union Station; and 2) a 14-mile northern segment connecting Burbank Airport to Glendale and Downtown LA.

In the southern portion, Eco-Rapid Transit has primarily focused on the abandoned rightof-way of the former Pacific Electric Railway, which is currently owned by Metro, to rebuild a light rail along the former West Santa Ana Branch (WSAB) Corridor. In 2016, LA County voters passed Metro’s Measure M, which allocated $4 Billion in funding for the WSAB Transit Corridor Light Rail. The WSAB Transit Corridor Light Rail project will connect southeast Los Angeles County to downtown Los Angeles, serving the cities and communities of downtown Los Angeles, unincorporated Florence-Graham, Vernon, Huntington Park, Bell, Cudahy, South Gate, Downey, Paramount, Bellflower, Cerritos and Artesia.

In 2019, City Managers from WSAB Corridor cities approached the Gateway Cities COG about forming a Technical Advisory Committee (TAC) to provide a venue for key city staff to engage with Metro project and corridor development staff. The City Managers requested that the TAC be formed within the COG because the COG’s influential voice in the development of regional transportation projects and all of the corridor cities belong to the COG. The WSAB City Managers TAC serves as a forum generating consensus positions on a range of technical, financial, and policy challenges confronting the corridor cities.

Even though the northern area is not part of WSAB, the idea was to have all the stakeholders work together along the entire corridor to improve the corridor and create more connectivity. It was envisioned as part one of a multiphase project that could potentially see the line head up into Glendale and to Burbank Airport.

ANALYSIS
The key purpose of Eco-Rapid Transit was to advocate and pursue the development of the WSAB Corridor light rail. The project is now the number one priority for Metro with Metro serving as the lead agency regarding advocacy, construction, and communications 26 of 1291 3 for the project. Additionally, the creation of the City Manager’s TAC, has created a venue for cities to work directly with Metro regarding technical, financial, and policy issues related to the project. Based on these roles, it would seem that Eco-Rapid Transit has met its purpose and the future development of the project is now with Metro and the Corridor cities.

Further, Eco-Rapid Transit is facing serious fiscal challenges attributed to past budgetary practices (Exhibit 1). To this end, on September 13, 2023, the Eco-Rapid Transit (ERT) Board of Directors unanimously voted in support of the formal termination of the JPA and directed staff to proceed with the necessary steps (Exhibit 2). As a result, every member agency must formally adopt a resolution to withdraw prior to the last ERT Board meeting scheduled for December 13, 2023. Based on these factors, staff is recommending a formal withdrawal from ERT.

As the City does not have a current representative on the ERT Board and a representative must cast a vote at the December 13, 2023 Board meeting, staff is seeking Council approval to designate the City Manager or his designee to cast the vote to formally withdraw the City of Glendale from ERT.

FISCAL IMPACT
Withdrawing from ERT will result in an annual expenditure decrease of $35,000 to $40,000.

ENVIRONMENTAL REVIEW (CEQA/NEPA)
N/A

CAMPAIGN DISCLOSURE
This item is exempt from campaign disclosure requirements.

ALTERNATIVES
1) Adopt the resolution to formally withdraw from Eco Rapid Transit JPA. 2) Council may choose another alternative not proposed by staff.

ADMINISTRATIVE ACTION
Prepared by:

Elena Bolbolian, Chief Innovation Officer
Approved by:

Roubik R. Golanian, P.E., City Manager

EXHIBITS/ATTACHMENTS
Exhibit 1: Letter from Eco-Rapid Transit, dated July 24, 2023 Exhibit 2: Letter from Eco-Rapid Transit, dated September 13, 2023 27 of 1291
RESOLUTION NO. _________

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF GLENDALE,

STATE OF CALIFORNIA, WITHDRAWING FROM ECO RAPID TRANSIT (ERT) JOINT

POWERS AUTHORITY (JPA)
WHEREAS, Eco-Rapid Transit (“ERT”), formally known as Orangeline Development Authority, a Joint Powers Authority formed in 2003 to pursue development of an environmentally friendly and energy efficient transit system; and
WHEREAS, the City of Glendale has been a member of ERT since 2008; and WHEREAS, ERT concentrated its efforts on two segments, a 20-mile southern portion extending from Artesia to Union Station and a 14-mile northern segment connecting Burbank Airport to Glendale and Downtown Los Angeles;
WHEREAS, in the southern portion, ERT primarily focused on rebuilding a light rail along the former West Santa Ana Branch (WSAB) Corridor, which is currently owned by Metro, and received funding support through LA County's Measure M; and WHEREAS, the creation of the City Manager’s Technical Advisory Committee (TAC) within the Gateway Cities COG in 2019 provided a forum for cities to engage directly with Metro on technical, financial, and policy issues related to corridor development; and WHEREAS, the primary purpose of the ERT, advocating and pursuing the development of the WSAB Corridor light rail, has now transitioned to Metro and the City Manager’s TAC continues to work with Metro on technical issues; and
WHEREAS, ERT is currently facing serious fiscal challenges due to past budgetary practices, and the ERT Board of Directors unanimously voted on September 13, 2023 in support of the formal termination of the joint powers authority, with every member agency required to adopt a resolution to withdraw prior to the last ERT Board meeting on December 13, 2023;

NOW, THEREFORE BE IT RESOLVED BY THE COUNCIL OF THE CITY OF GLENDALE, CALIFORNIA, that

1. The City of Glendale formally withdraws from the Eco-Rapid Transit Joint Powers Authority, effective immediately.

2. The City Manager or his designee is authorized and directed to take all necessary actions to effectuate this withdrawal including casting a vote at the December 13, 2023 Board meeting.

Adopted this day of , 2023.

Mayor
28 of 1291
ATTEST:

City Clerk

STATE OF CALIFORNIA ) SS )

COUNTY OF LOS ANGELES )
I, , Clerk to the Glendale City Council, certify that the foregoing Resolution No. was adopted by the City Council of the City of Glendale on the day of , 2023, and that same was adopted by the following vote:

Ayes:

Noes:

Absent:

Abstain:
29 of 1291
16401 Paramount Boulevard ▪ Paramount ▪ California 90723  (562) 663-6850  www.eco-rapid.org Eco-Rapid Transit, formerly known
as the Orangeline Development
Authority, is a joint powers
authority (JPA). Its Board of
Directors consists of the following
public entities and primary
representatives:

City of Artesia
Hon. Ali Sajjad Taj
Chair of the Board
City of Bell
Mr. Jesus Casas
City of Bell Gardens
Hon. Alejandra Cortez
Secretary of the Board
City of Cerritos
Hon. Bruce Borrows
City of Cudahy
Hon. Jose R. Gonzalez
Vice Chair of the Board
City of Downey
Hon. Hector Sosa
City of Glendale
(Vacant)
City of Huntington Park
Hon. Karina Marcia
City of Maywood
Ms. Angelina Martinez
City of Paramount
Hon. Isabel Aguayo
Treasurer of the Board
City of South Gate
Hon. Maria Davila
Burbank-Glendale-Pasadena
Airport Authority
Hon. Frank Quintero
Executive Director
Eric C. Shen, P.E., PTP, CPE
General Counsel
Matthew T. Summers
Ex-Officio
Ricardo Reyes
City Manager Representative
Internal Auditor
(Vacant)
Connecting its cities via environmentally effective rapid transit July 24, 2023
(Correction made one August 29, 2023)
Mr. Roubik Golanian
City Manager
City of Glendale
Via email: [email protected]
Re: Request of the City of Glendale for the Delinquent Payment and the Final Payment 1of Eco-Rapid Transit Membership Dues for FY 2023/24 totaling $66,779.99
Dear Mr. Golanian,
The Eco-Rapid Transit Board of Directors approved the FY23/24 Operating Budget on July 12, 2023 and instructed staff to begin the restructuring of the Joint Powers Authority by December 31, 2023. The Board agreed to proportionate the final payment for each member agency as shown in the attached Board Report (Attachment A). The final payment for the City of Glendale is $26,176.00.

Previously the Board also agreed to request advancement membership payment from each member agency. To-date, we have not received Glendale’s advancement membership (Invoice 23/24-007) of $40,603.99. Therefore, we respectfully request the City of Glendale to pay the total of $66,779.99 by August 31, 2023. Thank you in advance for your continued support and understanding and please do not hesitate to contact me by telephone at (626) 698-9926 or by email at [email protected].

Sincerely,
________________________
ERIC C. SHEN, PE, PTP, CPE
Executive Director
CC: Honorable Frank Quintero, Director of ERT Board of Directors Honorable Ali Sajjad Taj, Chair of ERT Board of Directors Attachment A: ERT Board Report (Item 7, July 12, 2023)
Attachment B: Invoice #23/24-007, dated February 14, 2023 30 of 1291
16401 Paramount Boulevard ▪ Paramount ▪ California 90723  (562) 663-6850  www.eco-rapid.org Eco-Rapid Transit, formerly known
as the Orangeline Development
Authority, is a joint powers
authority (JPA). Its Board of
Directors consists of the following
public entities and primary
representatives:

INVOICE
Re: Orangeline Development Authority Membership FY 2023/24 Glendale Membership Fee (FINAL):
$ 40,603.99 (Advanced Payment)
$ 26,176.00 (Final Membership)
$ 66,779.99
Payable to: Orangeline Development Authority
(dba, Eco-Rapid Transit)
16401 Paramount Boulevard
Paramount, California 90723
Invoice No.: 23/24-007F
Membership fees are due on or before August 31, 2023. If you have any questions, please contact Eric C. Shen, Executive Director at (626) 698-9926 or [email protected].
31 of 1291

16401 Paramount Boulevard ▪ Paramount ▪ California 90723  (562) 663-6850  www.eco-rapid.org Eco-Rapid Transit, formerly known
as the Orangeline Development
Authority, is a joint powers
authority (JPA). Its Board of
Directors consists of the following
public entities and primary
representatives:

AGENDA REPORT
TO: Members of Eco-Rapid Transit Board of Directors
FROM: Eric C. Shen, Executive Director
DATE: July 12, 2023
SUBJECT: ITEM 7: PROPOSED FY2023/24 REVISED OPERATING BUDGET

AND RELATED CONSIDERATIONS
Public comments on agenda items will be taken at the time the item is called and are limited to 3 minutes per speaker.

RECOMMENDATION
Review the proposed revised FY2023/24 Operating Budget, adopt Resolution 2023-05 (Attachment A), and direct staff to implement necessary steps and prepare for restructuring.

ISSUES
In response to the Board’s directive at its June 28th Special Meeting, the proposed budget has been developed to fund necessary and minimum expenses that will facilitate the conclusion of normal operations as a full-functioning JPA with its current legal service provider by December 31, 2023 (Q1 and Q2 of FY2023/24). The Board also agreed to apply the same proportional share of FY2022/23 membership dues for the FY2023/24 budget. If operations cease prior to the targeted termination or dormancy date, cities will be reimbursed proportionally.

BACKGROUND
On January 23, 2023, the Board received an update on the FY2022/23 mid-year budget situation and authorized staff to invoice member agencies for paying the FY2023/24 membership sooner than prior years. At the time of approval, each member agency was being billed at the FY2022/23 rate plus a 7% inflation factor. The advance payment was intended to be a stopgap measure. The Board was aware that the carryover debts from prior year(s), the Authority’s fiscal structural issues, and cost escalation/inflation must also be addressed as part of the FY2023/24 budget adoption process.

On June 2, 2023, the Executive Director presented to the Budget Subcommittee with a proposed operating budget and discussed several options for assessing additional membership dues for the new fiscal year. While the near-term fiscal crisis was addressed by the partially collected FY2023/24 membership dues between March and May, the Board 34 of 1291

On June 14, 2023, the full Board reviewed and discussed the proposed budget but decided not to approve. Instead, the Board directed the Executive Director to meet with the new Gateway Cities COG Executive Director to discuss the JPA becoming a part of the COG and the governance structure, and to report back with the expected costs and costs for transition. The Board also agreed to host a Special Meeting on June 28, 2023 to further discuss the topic.

On June 28, 2023, the Board directed the Executive Director to submit a proposed budget with reduced scope and cost that will facilitate the conclusion of normal operations as a full-functioning JPA. The Board agreed to rely on its current legal service provider by December 31, 2023 (Q1 and Q2 of FY2023/24) without transitioning to a pro bono option.

The Board also agreed to apply the same proportional share of FY2022/23 membership dues for the FY2023/24 budget. If operations cease prior to the targeted termination or dormancy date, any remaining membership dues will be reimbursed to member agencies proportionally.

Budget Process: Categories and Estimates
The proposed FY2023/24 Operating Budget (non-reimbursable labor expenses) would fund the costs for providing core functions and the carryover deficit. The proposed budget does not assume the build-up of a cash reserve for reimbursable expenses. [1] Projected Balance through July 31, 2023
The Treasurer’s Report for the month of June 2023 (prepared on July 12, 2023) reveals an ending negative balance of $17,364.04. With the Board’s approval on the Warrant Register dated July 12, 2023, a total of $43,440.95 of compensation and grant-funded consulting fee will be disbursed when funds become available. That is, as of July 31, 2023, the projected cash balance will be negative ($17,364.04+$43,440.95=$60,804.99). Of which, the $24,186.30 advanced payment by the Authority to STEER will be reimbursed by the lead agency City of Artesia to the Authority in 6-8 weeks.

The Authority is still waiting to receive payments from:
• Los Angeles County: $13,987.86
• Artesia: $9,188.53
• Glendale: $40,603.99 (unlikely to collect currently)
• Downey: $16,147.76 (withdrew)
Assuming the Authority receives new revenue (aka membership payments from the County and Artesia) in the next 3 weeks, the projected cash negative balance would be reduced from $60,804.99 to $37,628.60. The projected cash negative balance will be further reduced to $13,442.30 when the Authority receives the reimbursement from Artesia. 35 of 1291

EXPENSES Jul-23 Aug-23 Sep-23 Oct-23 Nov-23 Dec-23 TOTAL Executive Director $5,000 $5,000 $5,000 $2,500 $2,500 $2,500 $22,500 Admin. Svc Mgr $5,000 $5,000 $5,000 $1,500 $1,500 $1,000 $19,000 Prg Mgr/Support Staff $500 $500 $500 $200 $200 $200 $2,100 Supplies & Postage $100 $100 $100 $50 $50 $100 $500
Rent & Basic Supplies $300 $300 $300 $900
IT Related $50 $50 $50 $50 $50 $50 $300
Board Mtg Room $160 $160 $160 $480
Accounting $5,000 $5,000 $2,500 $2,500 $2,500 $2,500 $20,000 General Counsel $4,000 $4,000 $4,000 $3,000 $3,000 $4,000 $22,000 Audit (Past 3 fiscal
years) $33,000 $33,000
Audit (Partial
FY2023/24) $9,000
Travel/Miles $150 $100 $100 $350
TOTAL EXPENSES $130,130
Table 1: Proposed FY2023/24 Q1 & Q2 Operating Budget (Non-Reimbursable Labor Expenses) 36 of 1291

As the Board directed staff to present a not-to-exceed budgetary figure with an intent to transition the JPA to another format after December 31, 2023, it is prudent to build in approximately 10% contingency on top of the calculated minimum cash needs of $143,572.30. That is, staff is recommending the Board approve a not-to-exceed $160,000.00.
[4] Proportional Share of the Supplemental/Final Membership Dues The Board directed staff to apply the same proportional share of membership (%) in FY2022-23 for the proposed FY2023/24 Q1 and Q2 operating budget. Thus, a total supplemental amount of $160,000 will be proportionally applied to every agency based on their percentage of share in FY2022/23 membership dues structure.

The Authority has communicated with the City of Downey acknowledging its termination of membership and reminding the City’s financial obligation as the JPA prepares for restructuring (see Attachment B). Nevertheless, the proportional share of the supplemental membership dues as shown in Table 2 excludes Downey for now. A separate calculation of Downey’s share will be prepared and invoiced. If at the close-out of the JPA, any remaining balance will be proportionally refunded to all member agencies. 37 of 1291

City of Artesia
Hon. Ali Sajjad Taj
Chair of the Board
City of Bell
Mr. Jesus Casas
City of Bell Gardens
Hon. Alejandra Cortez
Secretary of the Board
City of Cerritos
Hon. Bruce Borrows
City of Cudahy
Hon. Jose R. Gonzalez
Vice Chair of the Board
City of Downey
Hon. Claudia M. Frometa
City of Glendale
(Vacant)
City of Huntington Park
Hon. Karina Marcia
City of Maywood
Ms. Angelina Martinez
City of Paramount
Hon. Isabel Aguayo
Treasurer of the Board
City of South Gate
Hon. Maria Davila
Burbank-Glendale-Pasadena
Airport Authority
Hon. Frank Quintero
Executive Director
Eric C. Shen, P.E., PTP, CPE
General Counsel
Matthew T. Summers
Ex-Officio
Ricardo Reyes
City Manager Representative
Internal Auditor
(Vacant)
Connecting its cities via environmentally effective rapid transit Member
Agency
FY2022/23
Membership
Rate
FY2023/24
Advanced Dues
Invoiced
FY2023/24
By % based on
no Downey, and
full rate for LAC
FY2023/24 Q1 &
Q2 Dues
(Based on no
Downey and full
rate for LAC)
Artesia* $ 7,521 $ 9,189* 3.97% $6,352.00
Cerritos $ 14,162 $ 18,560 7.48% $11,968.00
Paramount $ 16,433 $ 21,535 8.68% $13,888.00
Downey $ 12,322 $ - $ -
South Gate $ 27,101 $ 37,282 14.31% $22,896.00
Cudahy $ 7,543 $ 9,885 3.98% $6,368.00
Bell Gardens $ 2,945 $ 3,859 1.56% $2,496.00
Bell $ 4,747 $ 5,705 2.51% $4,016.00
Maywood $ 2,706 $ 3,546 1.43% $2,288.00
Huntington Park $ 16,443 $ 21,548 8.68% $13,888.00
Glendale* $ 30,984 $ 40,604* 16.36% $26,176.00
Burbank Airport $ 24,682 $ 32,345 13.03% $20,848.00
Los Angeles
(County)* $ 34,103 $ 13,988* 18.01% $28,816.00
TOTAL $ 201,692 $ 218,046 100.00% $160,000.00
Table 2: FY2023/24 Q1&Q2 Operating Budget - Supplemental membership dues based on the proportional share in FY2022-23
* Not yet submitted the advanced membership due
Attachment A: Resolution 2023-05
Attachment B: Downey Notice of Withdrawal and Payment of Dues ERT BOD 20230712 ITEM 7 V1
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Resolution 2023-05
39 of 1291
Error! Unknown document property name.

RESOLUTION NO. 2023-05

A RESOLUTION OF THE BOARD OF DIRECTORS OF ECO-RAPID TRANSIT ADOPTING THE FISCAL YEAR 2023-24

FIRST AND SECOND QUARTERS OPERATING BUDGET
WHEREAS, the Executive Director presented on July 12, 2023, to the Eco-Rapid Transit (“ERT”) Board of Directors, the proposed budget for fiscal year (“FY”) 2023-24, including estimated revenues through membership dues and projected operating expenses in first and second quarters; and
WHEREAS, the ERT Board of Directors has reviewed the proposed operating budget for funding two quarters until ERT is restructured and provided opportunity for public comments regarding the proposed FY 2023-24 budget; and
WHEREAS, the Executive Director’s Staff Report provides an executive summary of the proposed budget.

NOW, THEREFORE, BE IT RESOLVED that the ERT Board of Directors hereby:

1. Approves and adopts the total Operating Budget submitted by the Executive Director as set forth in Exhibit A, which is attached hereto and incorporated by reference, as the Operating Budget of Eco-Rapid Transit for FY 2023-24.

The foregoing Resolution was duly adopted this 12th day of July 2023, by the following roll call vote:

AYES:

NOES:

ABSTAIN:

ABSENT:
________________________________
Chair
ATTEST:
________________________________
Kathryn M. Morrison
Administrative Services Manager
ERT BOD 20230712 BUDGET RESO 20-05 VF
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Downey Notice of Withdrawal and Payment of Dues
41 of 1291

16401 Paramount Boulevard ▪ Paramount ▪ California 90723  (562) 663-6850  www.eco-rapid.org Eco-Rapid Transit, formally known
as the Orangeline Development
Authority, is a joint powers
authority (JPA). Its Board of
Directors consists of the following
public entities and primary
representatives:

County of Los Angeles
Hon. Janice Hahn
Supervisor, Forth District
City of Artesia
Hon. Ali Sajjad Taj
Chair of the Board
City of Bell
(Vacant)
City of Bell Gardens
Hon. Alejandra Cortez
Secretary of the Board
City of Cerritos
Hon. Bruce Borrows
City of Cudahy
Hon. Jose R. Gonzalez
Vice Chair of the Board
City of Downey
Hon. Hector Sosa
City of Glendale
(Vacant)
City of Huntington Park
Hon. Karina Macias
City of Maywood
Ms. Angelina Martinez
City of Paramount
Hon. Isabel Aguayo
Treasurer of the Board
City of South Gate
Hon. Maria Davila
Burbank-Glendale-Pasadena
Airport Authority
Hon. Frank Quintero
Executive Director
Eric C. Shen, P.E., PTP, CPE
General Counsel
Matthew T. Summers
Ex-Officio
Ricardo Reyes
City Manager Representative
Internal Auditor
(Vacant)
Connecting its cities via environmentally effective rapid transit June 27, 2023
VIA E-MAIL AND U.S. MAIL
Roger Bradley
City Manager, City of Downey
Downey City Hall
11111 Brookshire Avenue
Downey, CA 90241
[email protected]
Re: Downey Notice of Withdrawal from ERT and Payment of Dues Dear Mr. Bradley
I am writing first to formally acknowledge the City of Downey’s withdrawal from Eco-Rapid Transit (ERT) and to thank the City for its many years of participation in the organization.

Secondly, I write to remind the City that, before the effective date of its withdrawal (July 15, 2023), it must satisfy the membership dues invoiced to it and approved by the ERT Board of Directors while the City was a member of ERT. This is required under Section 3.2(h) of ERT’s JPA Agreement, which states “[w]ithdrawal of a Party … shall not relieve it of any liabilities imposed upon or incurred by the Party pursuant to this Agreement prior to the effective date of such withdrawal.” The invoice at issue is attached for your review.

Furthermore, the ERT Board of Directors has been contemplating a potential restructuring of the agency, including termination or shifting to a dormant status. To that end, the ERT Board of Directors will be voting on an annual budget which supports a tapered-down version of ERT either during its June 28, 2023 Special Meeting or during its July 12, 2023 Regular Meeting. The City of Downey will be invoiced for its share of the annual budget approved prior to the effective date of the City’s withdrawal, per Section 3.2(h) of ERT’s JPA Agreement. Therefore, we strongly encourage the City’s representative, Mr. Hector Sosa, to attend both ERT’s June 28, 2023 Special Meeting and the July 12, 2023 Regular Meeting. The City’s withdrawal is not effective until July 15, 2023, so it will still be a voting member of ERT until that time.

Respectfully,
Eric C. Shen, P.E., PTP, CPE
Executive Director
cc: Ali Taj, Chair of the Board, Eco-Rapid Transit
Hon. Hector Sosa, Councilmember, City of Downey
Hon. Claudia M. Frometa, Mayor, City of Downey
Matthew T. Summers, General Counsel, Eco-Rapid Transit
Thais P. Alves, Assistant General Counsel, Eco-Rapid Transit 42 of 1291

City of Artesia
Hon. Ali Sajjad Taj
Chair of the Board
City of Bell
Mr. Jesus Casas
City of Bell Gardens
Hon. Alejandra Cortez
Secretary of the Board
City of Cerritos
Hon. Bruce Borrows
City of Cudahy
Hon. Jose R. Gonzalez
Vice Chair of the Board
City of Downey
Hon. Hector Sosa
City of Glendale
(Vacant)
City of Huntington Park
Hon. Karina Marcia
City of Maywood
Ms. Angelina Martinez
City of Paramount
Hon. Isabel Aguayo
Treasurer of the Board
City of South Gate
Hon. Maria Davila
Burbank-Glendale-Pasadena
Airport Authority
Hon. Frank Quintero
Executive Director
Eric C. Shen, P.E., PTP, CPE
General Counsel
Matthew T. Summers
Ex-Officio
Ricardo Reyes
City Manager Representative
Internal Auditor
(Vacant)
Connecting its cities via environmentally effective rapid transit February 14, 2023
Mr. Roubik Golanian
City Manager
City of Glendale
Via email: [email protected]
Re: Request of the City of Glendale for the Advance Payment of Eco-Rapid Transit Annual Membership Dues for FY 2023/24 totaling $40,603.99
Dear Mr. Golanian,
First, I would like to express my appreciation for the City of Glendale’s commitment to Eco-Rapid Transit (ERT) over the years. Eco-Rapid benefits from the City's generous financial support greatly and we will continue advocating a viable linkage between Glendale, the Burbank/Hollywood Airport, and downtown Los Angeles.

Eco-Rapid Transit is currently facing serious fiscal challenges attributed by its past budgetary practices. The Fiscal Year (FY) 2022/23 membership dues (for July 1, 2022 – June 30, 2023) were collected and exhausted in late December 2022. As of January 31, 2023, ERT had to defer paying most invoices and salaries due to insufficient funds. With six more months remaining in the current fiscal year, ERT must seek additional financial resources to cover its basic operating costs until the new Fiscal Year begins on July 1, 2023. During its February 8, 2023 meeting, ERT Board of Directors directed staff to request the advancement of FY 2023/24 dues (for July 1, 2023 – June 30, 2024) from its member agencies based with the addition of a 6.5% inflation factor. In the next few weeks, the Board will review and assess the adequacy of the existing methodology used for calculating membership dues for ERT to fund basic operations and provide quality services to its members. Options to be considered by the Board will include a one-time special assessment and/or a supplemental payment of membership dues.

The City of Glendale’s FY 2022/23 ERT membership dues were $38,125.81. Accordingly, the Eco-Rapid Board respectfully requests that the City to remit its FY 2023/24 membership dues totaling $40,603.99 on or before March 15, 2023 in advance of the upcoming fiscal year. Thank you in advance for your continued support and understanding and please do not hesitate to contact me by telephone at (626) 698-9926 or by email at [email protected].

INVOICE
Re: Orangeline Development Authority Membership FY 2023/24 Glendale Membership Fee: $40,603.99
Payable to: Orangeline Development Authority
(dba, Eco-Rapid Transit)
16401 Paramount Boulevard
Paramount, California 90723
Invoice No.: 23/24-007
Membership fees are due on or before March 15, 2023. If you have any questions, please contact Eric C. Shen, Executive Director at (626) 698-9926 or eshen@ecorapid.org. 44 of 1291

AGENDA REPORT
TO: Members of Eco-Rapid Transit Board of Directors
FROM: Eric C. Shen, Executive Director
DATE: September 13, 2023
SUBJECT: ITEM 9: Update on the Authority’s Restructuring Progress Public comments on items on the agenda will be taken at the time the item is called and are limited to 3 minutes per speaker.

RECOMMENDATION
Authorize Executive Director and General Counsel’s Office to take steps to terminate EcoRapid Transit subject to final Board approval.

ISSUES
Staff are seeking the Board’s authorization to take steps, including all debts are paid off and past audits are completed, to terminate Eco-Rapid, subject to final Board approval.

BACKGROUND
At its July 2023 meeting, the Board approved a limited operating budget for FY2023-24 through December 31, 2023 and directed staff to explore restructuring options with Gateway Cities Council of Governments (GCCOG).

On August 9, 2023, ERT Executive Director, Eric Shen, held a formal meeting with Mr.

Hector De La Torre, GCCOG Executive Director and Ms. Marisa Perez GCCOG Executive Deputy. The meeting was also guided by Ms. Ivy Tsai, GCCOG General Counsel and Mr.

Matthew Summers, ERT General Counsel. At the conclusion of the meeting, Mr. De La Torre agreed to present a proposal to GCCOG’s Governing Board for creating a new committee that will continue advocating for the WSAB Project at policy level. In concept, the new committee would be open to jurisdictions within GCCOG and situated along the new transit corridor, most of them are current ERT members. Ms. Perez will provide additional details of the new committee at the ERT Board meeting on September 13 and with the WSAB City Managers Technical Advisory Committee on September 14, 2023.

The new GCCOG committee could be in operation by early 2024. Other than the City of Glendale and the Burbank Airport Authority, the current Eco-Rapid Transit members within GCCOG region will be eligible to join the new committee. 45 of 1291

County of Los Angeles
Hon. Janice Hahn
Supervisor, Forth District
City of Artesia
Hon. Ali Sajjad Taj
Chair of the Board
City of Bell
City of Bell Gardens
City of Cerritos
Hon. Bruce Borrows
City of Cudahy
Hon. Jose R. Gonzalez
Vice Chair of the Board
City of Glendale
City of Huntington Park
Hon. Karina Macias
Secretary of the Board
City of Maywood
Ms. Angelina Martinez
City of Paramount
Hon. Isabel Aguayo
Treasurer of the Board
City of South Gate
Hon. Maria Davila
Burbank-Glendale-Pasadena
Airport Authority
Hon. Frank Quintero
Executive Director
Eric C. Shen, P.E., PTP, CPE
General Counsel
Matthew T. Summers
Ex-Officio
Internal Auditor
Connecting its cities via environmentally effective rapid transit While the current Eco-Rapid Transit Board may consider keeping the current joint powers authority in an inactive state after December 31, 2023, the Board would need to consider the regulatory compliance and associated costs. In the proposed GCCOG Corridor Cities Committee concept, Mr. Da La Torre has clearly stated that GCCOG does not have the resources to administer the inactive Eco-Rapid Transit.

In the interest of accountability, the Board is advised to contemplate the formal termination of the joint powers authority rather than maintaining it in an inactive state. Should the Board consider and approve staff’s recommendation, staff will begin taking steps to terminate Eco-Rapid Transit as a joint powers authority, subject to final Board approval.

ERT BOD 20230913 09 UPDATE ON ERT RESTRUCTURING
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4c

CITY OF GLENDALE, CALIFORNIA

REPORT TO THE CITY COUNCIL

AGENDA ITEM
Report: Federal Workforce Innovation and Opportunity Act (WIOA) funds from the State of California, Employment Development Department (EDD) for the Glendale Youth Alliance and the City of Burbank

1. Motion:
a) Accepting Federal Workforce Innovation and Opportunity Act (WIOA) funds from the State of California, Employment Development Department in the amount of $747,830 from July 1, 2023 to June 30, 2024 to enable the Verdugo Workforce Development Board to distribute those funds to the Glendale Youth Alliance and the City of Burbank;
b) Approving the award of WIOA grant funds to the Glendale Youth Alliance in the amount of $607,330 from July 1, 2023 to June 30, 2024 and the City of Burbank in the amount of $140,500 from July 1, 2023 to June 30, 2024 as approved and recommended by the Verdugo Workforce Development Board; and c) Authorizing the City Manager, or a designee, to execute all agreements, certifications, and documents necessary to accept and implement the funding.

COUNCIL ACTION
Item Type: Consent Calendar
Approved for October 17, 2023 calendar

EXECUTIVE SUMMARY
The State of California, Employment Development Department awarded the Verdugo Workforce Development Board (VWDB) funding of $747,830 from July 1, 2023 to June 30, 2024 to provide WIOA employment services to Adults and Youth in the Verdugo region. The VWDB receives WIOA funds on an annual basis.

From July 1, 2023 to June 30, 2024, the VWDB will award WIOA Youth grant funds to Glendale Youth Alliance (GYA) in the amount of $607,330 to recruit, enroll, and provide 47 of 1291
2 c 4
work experience for twenty-three (23) In-School and fifty-seven (57) Out-of-School Youth as defined by the WIOA federal regulations.

From July 1, 2023 to June 30, 2024, the VWDB will award WIOA grant funds to the City of Burbank in the amount of $140,500 to operate the Burbank Employment Connection from the Burbank Central Library as the affiliate site to the Verdugo Jobs Center (VJC) and provide general WIOA employment services to the public.

COUNCIL PRIORITIES
NA

RECOMMENDATION
(1) Accept WIOA funds from the State of California, Employment Development Department in the amount of $747,830 from July 1, 2023 to June 30, 2024, to enable the VWDB to distribute those funds to the GYA and the City of Burbank; (2) Approve the award of WIOA grant funds to GYA in the amount of $607,330 from July 1, 2023 to June 30, 2024, and the City of Burbank in the amount of $140,500 from July 1, 2023 and June 30, 2024 as approved and recommended by the VWDB; and
(3) Authorize the City Manager, or their designee, to execute all agreements, certifications, and documents necessary to accept and implement the funding.

BACKGROUND
The VWDB receives federal WIOA grant funds to provide employment services to the public. These services include job preparation training, job exploration, workplace readiness skills training, work-based learning experiences, on the job training and skills training to name a few. The overall goal is to enhance regional economies by having a robust skilled workforce.

The VWDB is the planning and policy body for the Verdugo Consortium. The Verdugo Consortium is a Joint Powers Agreement (JPA) comprised of the Cities of Glendale, Burbank, and La Cañada Flintridge. The purpose of VWDB is to provide employment and training programs within the three cities and to allocate and award all Workforce Innovation and Opportunity Act (WIOA) funds and general grant funds toward its goals.

Through the JPA, the City of Glendale is given responsibility for the administration of all Consortium activities, including acting as the recipient of WIOA funds and all other general grant funds received by the VWDB. As the administrative entity for the Verdugo Consortium, the City of Glendale and the Glendale City Council approves all contracts and funding awards recommendations by the VWDB, which includes WIOA funds. 48 of 1291
3 c 4

ANALYSIS
The WIOA funds from the State of California, Employment Development Department is $747,830 from July 1, 2023 to June 30, 2024 to provide general WIOA services and WIOA Youth In School and out of School services for ages 14 to 24, with up to 200 hours of paid work experience in placements that match the students’ interests and aptitudes.

The Glendale Youth Alliance (GYA) has been operating year-round youth employment programs and summer employment programs since 1994. They have been operating WIOA youth employment programs since 2000. They have a proven track record of successfully serving youth. For the 2023-24 program year, the VWDB has recommended awarding GYA with $607,330 in workforce funds to provide services to youth with multiple barriers in the Verdugo region. GYA will administer the work experience component of the program and deliver case management services. GYA’s established business relationships with local employers will enable successful connection between these employers and students.

The City of Burbank is a partner in the Verdugo Consortium. Although the Verdugo Jobs Center is the only comprehensive one-stop center in the Verdugo Consortium, in order to provide services more conveniently to the job seekers and employers of Burbank, the City of Burbank operates an affiliate site of the Verdugo Jobs Center from their Burbank main library location. This affiliate provides basic services for job seekers and employers in Burbank. The VWDB has recommended awarding the City of Burbank $140,500 for the 2023-24 program year. These funds will be used to provide core workforce services to at least eighty (80) new clients per month, and Rapid Response assistance to local businesses that are experiencing major layoffs. The Burbank Affiliate site has been in operation since 2000. They have a proven track record of successfully serving Burbank job seekers and employers.

STAKEHOLDERS/OUTREACH
WIOA funds are targeted for the most vulnerable populations. The VWDB will partner with GYA and the City of Burbank to promote WIOA services to the Verdugo region. With established partnerships with organizations in the region, the VWDB will work collaboratively to promote WIOA services to those with limited access to services and with multiple barriers, so they are connected to WIOA programs.

FISCAL IMPACT
The contracts for the current year will cost $747,830. The grant award from the State of California, Employment Development Department is $747,830 from July 1, 2023 to June 30, 2024, which was appropriated as a part of the FY 2023-24 budget. No new appropriation is being requested at this time.
49 of 1291
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The City Council approved funding is outlined below:

Existing Appropriation
Amount Account String Funding Source
$ 607,330 GL: Various-2060-CSP-0020-P0000
PL: CSP01017AG
Workforce Fund – Federal
Grants
$ 44,000 GL: Various-2060-CSP-0020-P0000
PL: CSP01015AG
Workforce Fund – Federal
Grants
$ 44,000 GL: Various-2060-CSP-0020-P0000
PL: CSP01016AG
Workforce Fund – Federal
Grants
$ 52,500 GL: Various-2060-CSP-0020-P0000
PL: CSP01102AG
Workforce Fund – Federal
Grants

ENVIRONMENTAL REVIEW (CEQA/NEPA)
Because no possibility exists that the activity in question (distributing Federal grant funding to each organization who will provide job preparation training and job exploration skills) may have a significant effect on the environment, the activity is not subject to CEQA review under the common sense exemption set forth in 14 Cal. Code Regs. § 15061(b)(3).

CAMPAIGN DISCLOSURE
This item is exempt from campaign disclosure requirements.

ALTERNATIVES
Alternative 1: Authorize acceptance of WIOA grant funds and award to the GYA in the amount of $607,330 from July 1, 2023 to June 30, 2024 and award to the City of Burbank in the amount of $140,500 from July 1, 2023 to June 30, 2024; and authorize the City Manager, or their designee to execute all agreements, certifications, and documents necessary to accept, and implement the funding.

Alternative 2: Do not authorize to award the contracts as recommended herein. This would prevent services being provided under the WIOA grant.

Alternative 3: The City Council may consider any other alternative not proposed by staff. 50 of 1291
5 c 4

ADMINISTRATIVE ACTION
Prepared by:

Judith Velasco, Workforce Development Administrator
Approved by:

Roubik R. Golanian, P.E., City Manager

EXHIBITS/ATTACHMENTS
Exhibit 1: Minutes of the meeting of the Verdugo Workforce Development Board, July 26, 2023
51 of 1291
MOTION
Moved by Council Member , seconded by
Council Member , that the Council of the City of
Glendale hereby:

1. Accepts Federal Workforce Innovation and Opportunity Act (WIOA) funds from the State of California, Employment Development Department in the amount of $747,830 from July 1, 2023 to June 30, 2024 to enable the Verdugo Workforce Development Board to distribute those funds to the Glendale Youth Alliance and the City of Burbank;

2. Approves the award of WIOA grant funds to the Glendale Youth Alliance in the amount of $607,330 from July 1, 2023 to June 30, 2024 and the City of Burbank in the amount of $140,500 from July 1, 2023 to June 30, 2024 as approved and recommended by the Verdugo Workforce Development Board; and

3. Authorizes the City Manager, or a designee, to execute all agreements, certifications, and documents necessary to accept and implement the funding.

Vote as Follows:

Ayes:

Noes:

Absent:

Abstain:
52 of 1291

VERDUGO WORKFORCE DEVELOPMENT BOARD

EXECUTIVE COMMITTEE MEETING MINUTES
7/26/2023
8:30 a.m. to 9:00 a.m.

VWDB Executive Committee Minutes 7/26/2023 Page 1 of 2
MEMBERS PRESENT: Alexis Carter, Marisol Espinoza, Nick Hacopian, Teresa Sanchez
MEMBERS ABSENT: Ara Aslanian
STAFF PRESENT: Leona Balalians, Diana Montecino, MaryAnn Pranke, Judith Velasco, Melissa Younesian
CALL TO ORDER: 8:36 am by Vice Chair Marisol Espinoza
I. Introductions
A. Vice Chair Marisol Espinoza welcomed the Executive Committee.

II. Minutes of June 28, 2023
A. Quorum confirmed.

B. Minutes presented and reviewed. MOTION: Alexis Carter 2nd: Nick Hacopian ACTION: APPROVED
III. Action Items
A. Approval to accept an additional $1,408,000 of State Apprenticeship Expansion, Equity, and Innovation Grant funds, to continue the implementation of the Expansion of Early Care & Education Registered Apprenticeship Program for a total grant amount of $2,000,000 to provide services from May 1, 2023 to June 30, 2025 B. Approval of contract amendment with Early Care & Education Pathways to Success, a project of The Tides Center, to add funding in an amount not to exceed $1,267,200 in State Apprenticeship Expansion, Equity and Innovation Grant funds, for a total contract amount of $1,800,000 for their continued implementation of the statewide early childhood education apprenticeships from May 1 2023 to June 30, 2025 C. Approval of contract amendment with Biocom Institute California to add $7,000 for a total contract amount not to exceed $102,625 to administer conference expenses for BioTC Collaborative members to present the digital industry credential at workforce development and education conferences from November 1, 2022 to March 31, 2024 D. Approval to designate Glendale Youth Alliance as the board’s Youth Provider and to enter into contract with Glendale Youth Alliance for Fiscal Year 2023-2024 in an amount not to exceed $607,330 in Workforce Innovation and Opportunity Act funding for Youth Services
E. Approval to accept funds from the Los Angeles County Department of Economic Development for Fiscal Year 2023-2024 in the amount of $530,700 for the Youth@Work program and to enter into contract with Glendale Youth Alliance, in an amount not to exceed $482,937 for the Youth@Work program
MOTION FOR CONSENT ITEM A - E: Motion: Nick Hacopian 2nd: Alexis Carter

APPROVED
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VERDUGO WORKFORCE DEVELOPMENT BOARD

EXECUTIVE COMMITTEE MEETING MINUTES
7/26/2023
8:30 a.m. to 9:00 a.m.

VWDB Executive Committee Minutes 7/26/2023 Page 2 of 2
IV. Director’s Report
A. Executive Director Judith Velasco provided the following updates in terms of upcoming projects and other deadlines.

1. The Verdugo Workforce Development Board’s Administration (VWDBA) is in the planning process for procurement. In prior years, the Verdugo Workforce Development Board (VWDB) has released Request for Proposals (RFP) for Youth Provider and OneStop Operator services. This year, the VWDBA would like to add an RFP for Payroll Services.
a. In order to not delay services during the pandemic, the VWDB secured the current providers through sole source procurement.

2. Ms. Velasco announced that she may be presenting on BioTC at the California Workforce Association (CWA) Meeting of the Minds in Monterey. Joining Ms. Velasco will be the team that developed the BioTC program which is led by Grifols Biologicals. a. The goal of the program is to extend the digital credential program throughout the region to meet the industry’s need for a centralized pool of qualified workers to interview and hire.

3. The JPA and Bylaws remain in development. Once the documents are completed, they will need to be approved by the VWDB as well as the three cities that comprise the consortium:

Burbank, Glendale, and La Cañada Flintridge.

4. The August 30th meeting will be in a hybrid format, allowing in-person and a virtual platform to participate.
a. The Executive Committee expressed success of the hybrid meeting that was held on June 28th.

5. This year the VWDB will complete the required evaluation and certification of the Verdugo Jobs Center (VJC) and its satellite office, Job Connect in Burbank. The Career Services Application will also be due this year to allow the VWDB to continue providing services to the community as opposed to procuring a vendor.

6. Ms. Velasco shared that the LA County Youth@Work funding doubled for this fiscal year, allowing the VWDB to serve more youth in the Verdugo region.

7. Board members have been reaching out to Ms. Velasco requesting data related to the Writers Strike. She is meeting with VWDB members that represent affected workers and the staff continue to monitor the strike and any potential impact to other workers.

8. The VJC lease was finalized earlier this year. Currently, Ms. Velasco is working on finalizing the sublease with co-located partner, the Employment Development Department (EDD).

9. Ms. Velasco emphasized that the VWDB received an additional 1.4 million dollars for the Early Childhood Education (ECE) apprenticeship to serve 417 apprentices. The grant funding will primarily be given to the Early Care & Education Pathways to Success (ECEPTS), the entity that will identify businesses and childcares providers that will participate. This is a statewide grant, not just specific to the Verdugo region.

V. Other Businesses and Announcements:

A. The next Executive Committee meeting is scheduled for Wednesday, August 30, 2023, which will be held in a hybrid format.

VI. Public Comments: None
VII. Adjournment: 8:50 am
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CITY OF GLENDALE, CALIFORNIA

REPORT TO THE CITY COUNCIL

AGENDA ITEM
Report: Youth@Work funds from the Los Angeles County, Department of Economic Opportunity for the Glendale Youth Alliance

1. Motion:
a) Accepting Youth@Work funds from the Los Angeles County, Department of Economic Opportunity in the amount of $530,700, from July 1, 2023 to June 30, 2024 to enable the Verdugo Workforce Development Board to distribute those funds to the Glendale Youth Alliance;
b) Approving the award of Youth@Work grant funds to the Glendale Youth Alliance in the amount of $482,937 from July 1, 2023 to June 30, 2024, as approved and recommended by the Verdugo Workforce Development Board; and c) Authorizing the City Manager, or a designee, to execute all agreements, certifications, and documents necessary to accept and implement the funding.

COUNCIL ACTION
Item Type: Consent Calendar
Approved for October 10, 2023 calendar

EXECUTIVE SUMMARY
The Los Angeles County, Department of Economic Opportunity awarded the Verdugo Workforce Development Board (VWDB) funding of $530,700 from July 1, 2023 to June 30, 2024 to provide work experience and job preparation training for students under the Youth@Work program. The VWDB has received this funding for over a decade to support students with the most barriers to employment with work-based learning opportunities.

From July 1, 2023, to June 30, 2024, the VWDB will award Youth@Work grant funds to Glendale Youth Alliance (GYA) in the amount of $482,937 to recruit, enroll, and provide work experience for up to 130 students.
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COUNCIL PRIORITIES
N/A

RECOMMENDATION
(1) Accept Youth@Work funds from the Los Angeles County, Department of Economic Opportunity in the amount of $530,700 from July 1, 2023 to June 30, 2024, to enable the VWDB to distribute those funds to GYA; (2) Approve the award of Youth@Work grant funds to GYA in the amount of $482,937. from July 1, 2023 to June 30, 2024, as approved and recommended by the VWDB; and
(3) Authorize the City Manager, or their designee, to execute all agreements, certifications, and documents necessary to accept and implement the funding.

BACKGROUND
Since 2006, the VWDB has received Youth@Work grant funds, previously known as Los Angeles County Youth Jobs Program. Youth@Work provides job exploration, workplace readiness skills training, and work-based learning experiences through field work experience, to youth with the most barriers to employment. The overall goal is to assist vulnerable populations with building work learning skills.

Through the JPA, the City of Glendale is given responsibility for the administration of all Consortium activities, including acting as the recipient of Workforce Innovation and Opportunity Act funds and all other general grant funds received by the VWDB. As the administrative entity for the Verdugo Consortium, the City of Glendale and the Glendale City Council must approve all contracts and funding awards recommendations by the VWDB, which includes the Youth@Work grant.

ANALYSIS
The Youth@Work grant funding from the Los Angeles County, Department of Economic Development is $530,700 from July 1, 2023 to June 30, 2024 to serve up to 130 youth ages 14 to 24, with up to 160 hours of paid work experience in placements that match the students’ interests and aptitudes, at $16.90 an hour.
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The VWDB’s youth provider, GYA, will administer the work experience component of the program and receive $482,937 for staffing and operational expenses and to administer the youth payroll. GYA’s established business relationships with local employers will enable successful connection between these employers and students.

The remaining $47,763 will be used by the VWDB to cover administrative expenses that includes oversight of the program.

STAKEHOLDERS/OUTREACH
Youth@Work is targeted for youth between the ages of 14 to 24. The VWDB will partner with Glendale Unified School District and Burbank Unified School District to identify and recruit up to one hundred thirty (130) youth for enrollment into the Youth@Work program.

The VWDB will conduct regular meetings and continue ongoing communications (phone and/or email) with these partner schools. Los Angeles County will also refer qualified candidates to VWDB for enrollment into the program.

FISCAL IMPACT
The grant award from the Los Angeles County, Department of Economic Opportunity is $530,700 from July 1, 2023 to June 30, 2024, which was appropriated as a part of the FY 2023-24 budget. The Glendale Youth Alliance award will cost $482,937, and the remaining $47,763 will be used by the VWDB to cover administrative expenses. No new appropriation is being requested at this time.

Existing Appropriation
Amount Account String Funding Source
$530,700 GL: Various-2060-CSP-0020-P0000
PL: CSP01033AG
Workforce Fund – Local
Grants

ENVIRONMENTAL REVIEW (CEQA/NEPA)
Because no possibility exists that the activity in question (distributing local grant funding to one organization who will provide job preparation training and job exploration skills training to students) may have a significant effect on the environment, the activity is not subject to CEQA review under the common sense exemption set forth in 14 Cal. Code Regs. § 15061(b)(3).

CAMPAIGN DISCLOSURE
This item is exempt from campaign disclosure requirements. 57 of 1291
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ALTERNATIVES
Alternative 1: Authorize acceptance of Youth@Work grant funds and award to the GYA in the amount of $482,937 from July 1, 2023 to June 30, 2024; and authorize the City Manager to execute all agreements, certifications, and documents necessary to accept, and implement the funding.

Alternative 2: Do not authorize to award the contracts as recommended herein. This would prevent services being provided under the Youth@Work grant.

Alternative 3: The City Council may consider any other alternative not proposed by staff.

ADMINISTRATIVE ACTION
Prepared by:

Judith Velasco, Workforce Development Administrator
Approved by:

Roubik R. Golanian, P.E., City Manager

EXHIBITS/ATTACHMENTS
Exhibit 1: Minutes of the meeting of the Verdugo Workforce Development Board, July 26, 2023
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C:\INETPUB\WWWROOT\MULTITENANT\TEMP\CC_10102023_MOTION_4D1.PDF MOTION
Moved by Council Member , seconded by
Council Member , that the Council of the
City of Glendale hereby:

1. Accepts $530,700 in Youth@Work funds (“funds”) from the Los Angeles County Department of Economic Opportunity from July 1, 2023 to June 30, 2024, to enable the Verdugo Workforce Development Board (VWDB) to distribute those funds to the Glendale Youth Alliance, as more fully outlined in the Director of Community Services and Park’s October 10, 2023 Report to the City Council (“Report”);

2. Approves the award of $482,937 of those funds to the Glendale Youth Alliance— as recommended by the Verdugo Workforce Development Board— from July 1, 2023 to June 30, 2024 for the purposes outlined in the Report; and

3. Authorizes the City Manager, or a designee, to execute all agreements, amendments, certifications, and documents necessary to accept and implement the funding.

Vote as Follows:

Ayes:

Noes:

Absent:

Abstain:
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VERDUGO WORKFORCE DEVELOPMENT BOARD

EXECUTIVE COMMITTEE MEETING MINUTES
7/26/2023
8:30 a.m. to 9:00 a.m.

II. Minutes of June 28, 2023
A. Quorum confirmed.

APPROVED
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VERDUGO WORKFORCE DEVELOPMENT BOARD

EXECUTIVE COMMITTEE MEETING MINUTES
7/26/2023
8:30 a.m. to 9:00 a.m.

VWDB Executive Committee Minutes 7/26/2023 Page 2 of 2
IV. Director’s Report
A. Executive Director Judith Velasco provided the following updates in terms of upcoming projects and other deadlines.

3. The JPA and Bylaws remain in development. Once the documents are completed, they will need to be approved by the VWDB as well as the three cities that comprise the consortium:

Burbank, Glendale, and La Cañada Flintridge.

6. Ms. Velasco shared that the LA County Youth@Work funding doubled for this fiscal year, allowing the VWDB to serve more youth in the Verdugo region.

8. The VJC lease was finalized earlier this year. Currently, Ms. Velasco is working on finalizing the sublease with co-located partner, the Employment Development Department (EDD).

V. Other Businesses and Announcements:

A. The next Executive Committee meeting is scheduled for Wednesday, August 30, 2023, which will be held in a hybrid format.

VI. Public Comments: None
VII. Adjournment: 8:50 am
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CITY OF GLENDALE, CALIFORNIA

REPORT TO THE CITY COUNCIL

AGENDA ITEM
Report: Donation of surplus Fire Engine to the Coeur d’Alene Tribe of Native American Indians.

1. Resolution authorizing the donation (transfer) of one 2003 Pierce Quantum Fire Engine to the Coeur d’Alene Tribe of Native American Indians.

COUNCIL ACTION
Item Type: Consent Calendar
Approved for October 10, 2023 calendar

EXECUTIVE SUMMARY
The Fire Department is proposing the donation of one surplus Fire Engine that is no longer necessary for Department operations to the Coeur d’Alene Tribe of Native American Indians. The Engine has exceeded the standard NFPA twenty-year service life for an Engine and does not measure up to the efficiency, emissions and safety standards found on our newer apparatus.
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COUNCIL PRIORITIES
N/A

RECOMMENDATION
That the City Council approve the attached resolution authorizing the donation (transfer) of one 2003 Pierce Quantum Fire Engine to the Coeur d’Alene Tribe of Native American Indians.

BACKGROUND
The Glendale Fire Department has one surplus 2003 Pierce Quantum Fire Engine #3090 that is no longer necessary for Department operations. It is being proposed to transfer ownership of the engine to the Coeur d’Alene Tribe of Native American Indians in Plummer, Idaho. This Engine has reached the end of its service life with our organization, has been fully depreciated, and holds a City book value of zero dollars. If this Engine remained in reserve service, it would require significant and on-going repairs that are costly.

ANALYSIS
While the engine does not have service value to the City of Glendale, philanthropic donation of the equipment to the Coeur d’Alene Tribe of Native American Indians will fulfill a critical firefighting and emergency services need to the tribe members on their land.

This surplus equipment could be sent to auction, however the compensation amount is expected to be minimal. We believe there is more value to gain by transferring the equipment to the Coeur d’Alene Tribe of Native American Indians, which is an underrepresented community and is in dire need of these resources. Therefore, it is recommended that the City Council approve the attached resolution approving the donation (transfer) of one 2003 Pierce Quantum Fire Engine to the Coeur d’Alene Tribe of Native Americans Indians.

STAKEHOLDERS/OUTREACH
N/A

FISCAL IMPACT
No fiscal impact. The item is fully depreciated.

ENVIRONMENTAL REVIEW (CEQA/NEPA)
N/A

CAMPAIGN DISCLOSURE
This item is exempt from campaign disclosure requirements.

ALTERNATIVES
Alternative 1: Approve the attached resolution granting the donation (transfer) of one 2003 63 of 1291
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Pierce Quantum Fire Engine to the Coeur d’Alene Tribe of Native Americans Indians.

Alternative 2: The City Council may consider any other alternative not proposed by staff.

ADMINISTRATIVE ACTION
Prepared by:

Brian Richey, Fire Battalion Chief
Approved by:

Roubik R. Golanian, P.E., City Manager

EXHIBITS/ATTACHMENTS
None
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CC_10102023_Resolution_4e1.pdf
RESOLUTION NO. ____

RESOLUTION OF THE COUNCIL OF THE CITY OF GLENDALE

AUTHORIZING THE DONATION OF ONE FIRE ENGINE AND ONE AMBULANCE TO THE COEUR D’ALENE TRIBE OF NATIVE AMERICAN INDIANS
WHEREAS, the Fire Chief, Tim Ernst, has advised the Council that the Fire Department’s includes one 2003 Pierce Quantum Fire Engine #3090 ( “Fire Apparatus”) which is no longer useful to our fleet; and
WHEREAS, the Fire Apparatus is surplus; and
WHEREAS, the donation to the Coeur d’Alene Tribe of Native American Indians will enable the City to dispose of surplus equipment without incurring the time or administrative expense of an auction; and
WHEREAS, the City Council and City Manager are authorized under Subsection 9, Section 2 of Article Ill of the Glendale Charter and Section 4.68.030 of the Glendale Municipal Code, 1995, to dispose of surplus personal property and to promote the general welfare of the public.

NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF

GLENDALE THAT
Section 1. The City council hereby finds that the property described above in this Resolution is surplus personal property which has little, if any, extrinsic value and therefore should not be subject to sale at auction.

Section 2. The Glendale Fire Chief is hereby authorized to donate said personal property to the Coeur d’Alene Tribe of Native American Indians pursuant to a written agreement therefore, to be approved as to form by the City Attorney.

Adopted by the City Council of the City of Glendale on this ___ day of October, 2023. ________________________
Mayor
ATTEST:
______________________________
City Clerk
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CC_10102023_Resolution_4e1.pdf

STATE OF CALIFORNIA )

COUNTY OF LOS ANGELES ) SS

CITY OF GLENDALE )
I, Dr. Suzie Abajian, City Clerk of the City of Glendale, certify that the foregoing Resolution No. was adopted by the City Council of the City of Glendale, California, at a regular meeting held on the __________ day of ________________, 2023, and that same was adopted by the following vote:

Ayes:

Noes:

Absent:

Abstain:
__________________________________
City Clerk
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CITY OF GLENDALE, CALIFORNIA

REPORT TO THE CITY COUNCIL

AGENDA ITEM
Report: Amendment to the Existing Power Purchase Agreements for the Star Peak and Whitegrass No. 1 Geothermal Projects.
1) Resolution authorizing the approval of the Amended and Restated Power Purchase Agreements, each an attachment to the original long-term Power Sales Agreements between the Southern California Public Power Authority (SCPPA) and City of Glendale for the purchase of the renewable energy from the Star Peak and Whitegrass Geothermal Projects, and further approving two Letter Agreements between SCPPA and Open Mountain Energy, LLC (Developer) related to the projects, which will require the Developer to pay at least approximately $2.2M.

COUNCIL ACTION
Item Type: Consent Calendar
Approved for October 10, 2023 Calendar

EXECUTIVE SUMMARY
This report outlines a resolution of issues that have arisen in connection with the performance of the renewable energy contracts with Whitegrass No.1 Geothermal, LLC and Star Peak Geothermal, LLC (collectively, the Developer). To address these issues, it is recommended that the City Council approve, by Resolution, the Amended and Restated Power Purchase Agreements as attachments to the existing Power Sales Agreements between SCPPA and City of Glendale for the purchase of energy from Whitegrass No.1 and Star Peak geothermal projects (collectively, the “Projects”), along with certain Letter Agreements related to the Projects. The resetting of goals for the Project aligns with all parties’ interests and includes a lumpsum payment of approximately $2.2M to City of Glendale.

COUNCIL PRIORITIES
Not Applicable.

RECOMMENDATION
Authorize the approval of the following:
1) Amended and Restated Power Purchase Agreement between SCPPA and Star Peak Geothermal LLC, an attachment to the original long-term Power Sales Agreement between SCPPA and City of Glendale (Exhibit 1). 67 of 1291
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2) Amended and Restated Power Purchase Agreement between SCPPA and Whitegrass Geothermal LLC, an attachment to the original long-term Power Sales Agreement between SCPPA and City of Glendale (Exhibit 2). 3) Letter Agreement between SCPPA and the Developer for Star Peak (Exhibit 5). 4) Letter Agreement between SCPPA and the Developer for Whitegrass (Exhibit 6).

BACKGROUND
On February 25, 2020, the City Council authorized the execution of two long-term Power Sales Agreements (PSAs) with SCPPA for the purchase of geothermal energy and environmental attributes, from the following projects:
1) Whitegrass No. 1 Geothermal Energy Project (Whitegrass), a geothermal generating facility with a gross nameplate capacity of 4.0 MW and a nameplate capacity net of parasitic load of 3.0 MW, located in Lyon County, Nevada (PSA attached as Exhibit 4); and
2) Star Peak Geothermal Energy Project (Star Peak), a geothermal generating facility with a gross nameplate capacity of 14.5 MW and a nameplate capacity net of parasitic load of 12.5 MW, located in Pershing County, Nevada (PSA attached as Exhibit 3).

SCPPA (Buyer) has signed Power Purchase Agreements (PPAs) with special purpose entities (Seller) Whitegrass No.1 Geothermal, LLC for the Whitegrass project and Star Peak LLC for Star Peak project to purchase all the output of both facilities. The ultimate parent company of both entities and the project developer is Open Mountain Energy, LLC. Glendale is the sole participant and has a 100% share of the projects.

The effective date of both power purchase agreements was March 30, 2020.

Whitegrass was operational upon execution of the Whitegrass PPA agreement and deliveries commenced on April 1, 2020. At the effective date of the Star Peak PPA, Star Peak was under construction with a planned Commercial Operation Date (COD) of April 1, 2022. Star Peak reached the COD on September 28, 2022.

ANALYSIS
The PPAs were established with the goal of providing sustainable and renewable energy to the City. Unlike solar and wind energy, which only produce energy when the sun is shining or the wind is blowing, geothermal energy is steady and can be supplied on a constant basis. The Projects provide Glendale’s baseload power, supplying the City constant and reliable source of renewable electricity 24 hours/day. The high-capacity factor (overall percentage of time the plant is operational) of approximately 80% enables maximum use of transmission capacity allocated to these projects, compared to solar and wind typically at 25% and 34% capacity factors, respectively. The Projects will contribute significantly to GWP’s Renewable Portfolio Standard (RPS), supporting the City to meet the state goals of 60% Renewable by 2030, and the City’s intent to achieve 100% Clean Energy by 2035. 68 of 1291
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While all parties have been committed to the success of the Projects, unforeseen challenges have surfaced that significantly impacted the performance of the contracts.

Recognizing the shared interest in preserving and enhancing the success of the Projects, the parties have undertaken a renegotiation of certain terms of the contracts to address the issues.

Key Issues and Resolutions:

Energy Shortfall
Each PPA specifies the Expected Monthly Generation and Guaranteed Monthly Generation. If the Project fails to meet the Guaranteed Monthly Generation (GMG) delivery amounts, the Seller has an obligation to make up the deficiency with “Makeup Energy” from the Project within the next two contract months. If the Seller fails to do so, then Developer must pay damages or provide replacement renewable energy within specified deadlines.

Despite the agreed-upon guaranteed energy schedules, the Seller has consistently fallen short of the contracted amounts. Based on a 12-month average, energy shortfall from the Whitegrass project is about 15% of the GMG and for Star Peak, about 38%.

This energy shortfall not only disrupts the City’s energy supply but also raises uncertainty in Glendale’s ability to meet our RPS targets. To mitigate the risk of a default under the PPAs and the uncertainty associated with supply and RPS compliance planning, the parties have tentatively agreed, subject to the City Council’s approval, to the following resolutions:

1. Each of the Guaranteed Monthly Delivered Energy, the Expected Annual Generation, and the Expected Monthly Generation will be reduced prospectively by 30% for Star Peak (inclusive of the 7.5% elected by the Seller on May 3, 2023) and 15% for Whitegrass.

2. Grant the Seller an additional eighteen-month period in which to increase the Guaranteed Monthly Delivered Energy, the Expected Annual Generation, and the Expected Monthly Generation by a percentage determined by Seller, provided that in no instance shall such adjustment result in values that are greater than the original values included in the PPA.

3. Seller will financially settle the outstanding Shortfall Damages amount equivalent to $502,996.34 for Star Peak and $307,339.96 for Whitegrass, plus any Shortfall Damages for September 2023,

4. Automatically calculate and include Shortfall Damages, if any, on all future invoices.
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Excess Monthly Generation / Dynamic Scheduling
“Dynamic scheduling” is a method of linking energy resources in one “balancing area” to another balancing area on a real-time (as opposed to “hourly”) scheduling basis.

Dynamic scheduling allows a more efficient use of an energy resource than traditional hourly scheduling. Through the PPAs, prior to the Second Anniversary (March 30, 2023), the Seller was obligated to dynamically schedule the output of the facilities to the point of delivery, with the intent to eliminate the “brown energy” deliveries or Excess Monthly Generation. Under the PPA terms, if after the second anniversary Dynamic Scheduling is not implemented, Excess Monthly Generation is no longer billable under the definition of Delivered Energy.

Dynamic Scheduling was not implemented for both Projects during the specified timeframe. The Seller has expressed difficulty in accomplishing dynamic scheduling and continued to bill for Excess Monthly Generation. Payments have been made to Seller under protest.

The parties agreed to the following resolutions:

1. Remove Dynamic Scheduling provisions in the PPA but allow for future Dynamic Scheduling or pseudo-tie scheduling through commercially reasonable efforts. If at some point during the Term, Dynamic Scheduling or pseudo-tie scheduling becomes available on a commercially reasonable basis that provides for fractional MWh deliveries, the Parties will negotiate in good faith any necessary amendments to the PPA.

2. Seller will refund all the charges paid under protest, $190,970.54 for Star Peak and $267,800.08 for Whitegrass.

3. Buyer will pay Excess Monthly Generation going forward provided that there is a cap to the Excess Monthly Generation to 15% of the sum of the Expected Monthly Generation for all Contract Years until the end of the delivery term.

4. Buyer is not obligated to receive or pay for Excess Monthly Generation exceeding the cap and Seller may round down the quantity of scheduled energy to the nearest whole MWh and Seller is entitled to sell fractional MWh difference of facility energy into the imbalance market.

5. Seller will agree to make commercially reasonable efforts to reduce the delivery of whole or fractional MWh of Excess Monthly Generation and to cause the quantity of Delivered Energy during each hour to be as close as possible to the quantity of facility energy produced during such hour.

Photovoltaic (PV) System Credit for Parasitic Load
The PPA provides that within two and a half years of the effective date, the Seller may construct a photovoltaic system to power the “parasitic loads” of the Project (i.e., the lights, pumps and motors that use energy at the geothermal facility). If the Seller does not construct the photovoltaic system within the two-and-a-half-year timeframe, Seller 70 of 1291 5 f 4
will credit to SCPPA a set energy price as if the photovoltaic system had been built.

Seller has not installed the Solar facility and has failed to provide the System Credit to Buyer that Buyer was entitled to. To resolve the issue, the Seller and Buyer agreed to financially settle the preliminary estimates for the PV System Credit for 2022, $32,240.25 for Star Peak (a reduction of $50,398.03) and $6,359.50 for Whitegrass (a reduction of $13,104.09). However, if Seller has not delivered an Independent Engineer report that is reasonably acceptable to Buyer by the end of the sixth full calendar month after the Amendment Date, then Seller shall pay Buyer the reduction amounts shown above.

Star Peak Delay Damages
Seller failed to achieve the Commercial Operation Date by July 1, 2022, as contemplated by the letter agreement dated June 14, 2022, between the parties, and failed to pay the Daily Delay Damage invoice dated October 14, 2022. As payment was not received, Buyer revised the original invoice per the terms of the letter agreement to the amount of $1,676,461.89 and provided evidence of the calculation of the Daily Delay Damages amount.

To reach compromise on the Daily Delay Damages, it has been proposed that Buyer reduce this amount to $925,838.25, a reduction of $750,623.64. Seller will financially settle the outstanding Daily Delay Damages.

Star Peak Test and Start-up Energy
Seller incorrectly invoiced Buyer for Start-Up and Test Energy, which included energy that is not Facility Energy. In invoice STP-00035, Seller invoiced Buyer for 2,354 MWh, but produced 2,226.9 MWh of Facility Energy during August 2022. Buyer was erroneously billed for 127.1 MWh @ $35.13/MWh, or $4,465.02.

As a resolution, the Seller will refund the Start Up and Test Energy overbilling.

Beyond those changes, essential terms such as the Delivery Term as defined in the PPA, and the Contract Prices remain the same through the expiration of the Delivery Term on December 31, 2045.

The changes above were drafted into Amended and Restated PPAs for each of the Star Peak and Whitegrass Projects. Provided City Council approval is received, those amended PPAs would be substituted for the PPAs currently attached to the Power Sales Agreements between the City and SCPPA. Other than substituting the new PPAs for the old, no further actions or signatures regarding the agreements would be required of the City. However, City staff may have to convey City approvals or take other administrative actions so that SCPPA can sign the appropriate agreements between SCPPA and the Developer.

The Letter Agreements
In addition to the amended PPAs, the proposed Resolution would authorize SCPPA to enter into letter agreements (Letter Agreements) between the Developer and SCPPA, one for the Star Peak project and one for Whitegrass. The Letter Agreements would resolve various claims between SCPPA and the Developer regarding the appropriate 71 of 1291
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amount of damages due to SCPPA as a result of the initial underperformance of the Projects.

It should be noted that the proposed Letter Agreements would effectively waive certain claims that SCPPA could bring forward against Seller for lost damages. For Star Peak, SCPPA estimates that, if all damages/payments are calculated in favor of SCPPA (which the Developer contests), SCPPA would be owed approximately (in round numbers) $2.5M. Through the Letter Agreement, this would be compromised at $1.7M or about a $800K discount.

For Whitegrass, SCPPA’s estimate is $594K owed by the Seller, and the compromise is that the Seller would pay $581K or about a $13K discount. In total, SCPPA would be effectively waiving for both Projects together about $813K in theoretical damages from COD delay and PV System Credits. However, the Seller could assert a number of defenses to these damage claims. In particular, force majeure delays for equipment, personnel, etc., and interconnection difficulties could potentially be asserted.

GWP staff is supportive of the proposed compromise in the Letter Agreement. Staff believes the value of these Projects to GWP’s portfolio far outweighs the theoretical damage waiver and reset of the Project benchmarks. The Projects provide long-term renewable energy sources that can deliver consistent and reliable power 24/7 to Glendale today and into the future and support the City’s clean energy initiatives.

STAKEHOLDERS/OUTREACH
Not Applicable.

FISCAL IMPACT
Based on the reduced Estimated Annual Generation, the estimated average annual cost of the Star Peak Project is $4,917,500, and $1,319,625 for Whitegrass which was approved as part of the fiscal year 2024 budget. No new appropriation is being requested at this time. Funding for future years will be requested through annual budgetary process.

Existing Appropriation
Amount Account String Funding Source
$6,237,125 GL:45510-5820-GWP-4680-P0000 Electric Works Revenue Fund As a precondition to the Amended and Restated Power Purchase Agreements, the Seller shall pay the Buyer a lumpsum payment for damages and reimbursements, itemized as follows:

Seller Payments to Buyer Star Peak Whitegrass
Energy Shortfall $502,996.34 $307,339.96
Excess Monthly Generation (Payments
Under Protest)
$190,970.54 $267,800.08
PV System Credit $32,240.25 $6,359.50
COD Delay Damages $925,838.25 N/A 72 of 1291
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Test and Startup Energy Overbilling $4,465.02 N/A
Reimbursement of Expenses (Assignment) TBD N/A
Total $1,656,510.40 $581,499.54
As stated above, these payments, as currently calculated, would waive another approximately $813K in theoretical payments that could be collected by Buyer but are contested by the Seller. However, as can be seen in the above chart, the City (through SCPPA) will receive approximately at least $2.2M from the Seller ($1.65M + $0.58M) to compensate for past underperformance and other issues. Further, it should be noted that the Energy Shortfall for both Projects continues to accumulate and will be updated after the agreements contemplated in this staff report are approved. In addition, certain reimbursement costs on the Star Peak Project will be paid by Seller, as a result of a Seller request for a collateral assignment.

ENVIRONMENTAL REVIEW
In accordance with the California Environmental Quality Act (CEQA), the PSAs have been previously approved and are not being changed or altered, and it has been determined that the PPAs and Letter Agreements are exempt from CEQA pursuant to the General Exemption described in CEQA Guidelines Section 15061 (b)(3), as General Exemptions apply in situations where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment; and further, that the Star Peak and Whitegrass projects are exempt from CEQA pursuant to 14 California Code of Regulations Section 15277.

CAMPAIGN DISCLOSURE
Not Applicable.

ALTERNATIVES
Alternative 1: Approve the resolution approving the Amended and Restated Power Purchase Agreements and the Letter Agreements.

Alternative 2: Decline to authorize either or both agreements or the Letter Agreements in which case may cause a project termination.

Alternative 3: The City Council may consider any other alternative not proposed by staff.

ADMINISTRATIVE ACTION
Prepared by:

Scott Mellon, Assistant General Manager - Power Management Approved by:

Roubik R. Golanian, P.E., City Manager

EXHIBITS / ATTACHMENTS
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8 f 4
Exhibit 1: Amended and Restated Power Purchase Agreement Between SCPPA and Star Peak Geothermal, LLC.

Exhibit 2: Amended and Restated Power Purchase Agreement Between SCPPA and Whitegrass No.1 Geothermal, LLC.

Exhibit 3: Existing Power Sales Agreement between SCPPA and Glendale for Star Peak.

Exhibit 4: Existing Power Sales Agreement between SCPPA and Glendale for Whitegrass.

Exhibit 5: Letter Agreement between SCPPA and Open Mountain Energy, LLC for Star Peak.

Exhibit 6: Letter Agreement between SCPPA and Open Mountain Energy, LLC for Whitegrass.
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1 RESOLUTION NO. ________

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF GLENDALE,

CALIFORNIA APPROVING AMENDED AND RESTATED POWER PURCHASE

AGREEMENTS FOR THE STAR PEAK AND WHITEGRASS GEOTHERMAL

PROJECTS, EACH AS AN ATTACHMENT TO THE ORIGINAL LONG-TERM POWER

SALES AGREEMENT BETWEEN THE SOUTHERN CALIFORNIA PUBLIC POWER

AUTHORITY (SCPPA) AND OPEN MOUNTAIN ENERGY, LLC (DEVELOPER), AND

FURTHER APPROVING LETTER AGREEMENTS BETWEEN SCPPA AND THE

DEVELOPER ON THOSE RESPECTIVE PROJECTS
WHEREAS, on February 25, 2020, the City Council authorized the City Manager (or his designee) to execute and deliver Power Sales Agreements (PSAs) with SCPPA for the Whitegrass and Star Peak Geothermal Projects, which included power purchase agreements (PPAs) between SCPPA and Whitegrass No. 1, LLC and Star Peak Geothermal, LLC, as attachments to those respective PSAs; and for whom the ultimate parent company of both entities and the project developer is Open Mountain Energy, LLC (collectively, Developer); and
WHEREAS, the Developer has had difficulty achieving the performance requirements of the PPAs, and the City and SCPPA wish to re-set the performance requirements and other aspects of the PPAs so that the Developer can achieve the performance goals as set forth going forward; and
WHEREAS, SCPPA and the Developer have negotiated Letter Agreements for the Star Peak and Whitegrass projects under which the Developer will pay approximately at least $2.2M to SCPPA (which funds will benefit City); and will settle any disputes the Developer and SCPPA may have regarding the PPAs up to this juncture; and
WHEREAS, in accordance with the California Environmental Quality Act (CEQA), the PSAs have been previously approved and are not being changed or altered, and it has been determined that the PPAs and Letter Agreements are exempt from CEQA pursuant to the General Exemption described in CEQA Guidelines Section 15061 (b)(3), as General Exemptions apply in situations where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment; and further, that the Star Peak and Whitegrass projects are exempt from CEQA pursuant to 14 California Code of Regulations Section 15277.

NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF GLENDALE:

Section 1: The recitals herein above are true and correct and incorporated herein.

Section 2: The Council hereby approves the Amended and Restated Power Purchase Agreements for the Star Peak and Whitegrass Geothermal Projects, each as an attachment to the original Power Stales Agreements between the City and SCPPA, which PSAs have not otherwise been changed; and further approves the Letter Agreements between SCPPA and the Developer for the Star Peak and Whitegrass Projects; all in substantial form as attached to Exhibits accompanying the staff report 75 of 1291
2 associated with this Resolution, and any changes thereto must be in substantial conformance with the goals and aims of the attached form agreements, with any such changes thereto to be approved by the City Attorney or designee.

Section 3: Each of the City Manager, the General Manager of GWP, and any other officer of the City, is hereby authorized to execute and deliver any and all other documents and instruments and to do and cause to be done any and all acts and things necessary or advisable for carrying out the transaction contemplated by this Resolution.

Adopted by the Council of the City of Glendale on this ___ day of _________, 2023. ________________________________
Mayor
ATTEST:
_____________________________________
City Clerk
STATE OF CALIFORNIA ) SS.

COUNTY OF LOS ANGELES )
I, Suzie Abajian PhD, City Clerk of the City of Glendale, hereby certify that the foregoing Resolution No. _______________ was adopted by a majority vote of the Council of the City of Glendale, California, at a regular meeting held on the ______ day of ______________________, 2023, and that the same was adopted by the following vote:

Ayes:

Noes:

Absent:

Abstain:
________________________
City Clerk
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H&H Draft 9/8/23

AMENDED AND RESTATED

POWER PURCHASE AGREEMENT

BETWEEN

SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
AND

STAR PEAK GEOTHERMAL LLC
DATED AS OF ___________, 2023
EXHIBIT 1
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TABLE OF CONTENTS
Page
i
ARTICLE I DEFINITIONS AND INTERPRETATION.............................................................. 1 Section 1.1 Definitions............................................................................................ 1 Section 1.2 Interpretation...................................................................................... 23 Section 1.3 Order of Precedence........................................................................... 24 ARTICLE II EFFECTIVE DATE, TERM AND EARLY TERMINATION ............................. 24 Section 2.1 Effective Date .................................................................................... 24 Section 2.2 Agreement Term and Delivery Term................................................. 25 Section 2.3 Survivability....................................................................................... 25 Section 2.4 Early Termination .............................................................................. 25 ARTICLE III DEVELOPMENT OF THE FACILITY............................................................... 26 Section 3.1 In General........................................................................................... 26 Section 3.2 Commercial Operation Notices.......................................................... 28 Section 3.3 Other Information .............................................................................. 28 Section 3.4 Milestone Schedule............................................................................ 28 Section 3.5 Performance Damages....................................................................... 28 Section 3.6 Remedial Action Plan ........................................................................ 29 Section 3.7 Decommissioning and Other Costs.................................................... 30 Section 3.8 CEC Certification............................................................................... 30 ARTICLE IV OPERATION AND MAINTENANCE OF THE FACILITY.............................. 30 Section 4.1 Compliance with Electrical Service Requirements............................ 30 Section 4.2 General Operational Requirements.................................................... 30 Section 4.3 Operation and Maintenance Plan after Commercial Operation......... 30 Section 4.4 Forecasting and Scheduling of Energy and Scheduled Outages........ 31 Section 4.5 Dynamic Scheduling.......................................................................... 35 Section 4.6 Reporting and Information................................................................. 35

ARTICLE V COMPLIANCE DURING CONSTRUCTION AND OPERATION
PERIOD ............................................................................................................... 35 Section 5.1 In General........................................................................................... 35 Section 5.2 Compliance with Standards............................................................... 37 Section 5.3 Quality Assurance Program............................................................... 37 Section 5.4 Security Provided by Seller ............................................................... 38 Section 5.5 Effect of Review by Buyer ................................................................ 39 ARTICLE VI PURCHASE AND SALE OF POWER................................................................ 39 Section 6.1 Purchases by Buyer............................................................................ 39 78 of 1291

TABLE OF CONTENTS
(continued)
Page
ii
Section 6.2 Startup and Test Energy..................................................................... 40 Section 6.3 Point of Delivery................................................................................ 40 Section 6.4 Expected Monthly Generation Adjustment ....................................... 40 Section 6.5 Buyer’s Failure................................................................................... 42 Section 6.6 Nature of Remedies............................................................................ 42 Section 6.7 Energy to Come Exclusively from Facility ....................................... 42 Section 6.8 Sales to Third Parties......................................................................... 42 Section 6.9 Curtailment Requested by Buyer....................................................... 43 ARTICLE VII TRANSMISSION AND SCHEDULING; TITLE AND RISK OF LOSS ......... 45 Section 7.1 In General........................................................................................... 45 Section 7.2 Costs................................................................................................... 45 Section 7.3 Title; Risk of Loss.............................................................................. 45 ARTICLE VIII ENVIRONMENTAL ATTRIBUTES; EPS AND RPS COMPLIANCE.......... 46 Section 8.1 Transfer of Environmental Attributes................................................ 46 Section 8.2 Reporting of Ownership of Environmental Attributes....................... 47 Section 8.3 Environmental Attributes................................................................... 47 Section 8.4 Use of Accounting System to Transfer Environmental Attributes............................................................................................ 47 Section 8.5 Further Actions Regarding Environmental Attributes....................... 48 Section 8.6 RPS and EPS Compliance ................................................................. 48 Section 8.7 Change in Law ................................................................................... 48 ARTICLE IX MAKEUP OF SHORTFALL ENERGY.............................................................. 49 Section 9.1 Makeup of Shortfall ........................................................................... 49 Section 9.2 Makeup Energy.................................................................................. 49 Section 9.3 Shortfall Remedies............................................................................. 50 Section 9.4 Replacement Energy .......................................................................... 50 Section 9.5 Application of Shortfall Energy or Replacement Energy .................. 51 ARTICLE X CAPACITY RIGHTS ............................................................................................ 51 Section 10.1 Purchase and Sale of Capacity Rights ............................................... 51 Section 10.2 Representation Regarding Ownership of Capacity Rights................ 51 Section 10.3 Further Action by Seller Regarding Capacity Rights........................ 51 ARTICLE XI BILLING; PAYMENT; AUDITS; METERING; ATTESTATIONS; POLICIES............................................................................................................ 51 Section 11.1 Billing and Payment........................................................................... 51 Section 11.2 Calculation of Energy Delivered; Payment ....................................... 53 79 of 1291

TABLE OF CONTENTS
(continued)
Page
iii
Section 11.3 Payment.............................................................................................. 53 Section 11.4 WREGIS Withholding....................................................................... 54 Section 11.5 Disputed Invoices............................................................................... 54 Section 11.6 Right of Setoff.................................................................................... 54 Section 11.7 Records and Audits............................................................................ 55 Section 11.8 Electric Metering Devices.................................................................. 56 Section 11.9 Taxes.................................................................................................. 58 ARTICLE XII REPRESENTATIONS AND WARRANTIES; COVENANTS OF SELLER............................................................................................................... 58 Section 12.1 Representations and Warranties of Buyer.......................................... 58 Section 12.2 Representations and Warranties of Seller.......................................... 58 Section 12.3 Covenants of Seller Related to Real Property Agreements............... 61 Section 12.4 Covenants of Seller Related to Tax Equity Financing....................... 63 Section 12.5 Additional Covenants of Seller.......................................................... 64 Section 12.6 Additional Related Projects ............................................................... 64 Section 12.7 Storage Technology ........................................................................... 65 Section 12.8 Solar Technology............................................................................... 65 ARTICLE XIII DEFAULT; TERMINATION AND REMEDIES; PERFORMANCE DAMAGE............................................................................................................ 65 Section 13.1 Default................................................................................................ 65 Section 13.2 Default Remedy ................................................................................. 68 Section 13.3 Termination for Default ..................................................................... 69 ARTICLE XIV MISCELLANEOUS .......................................................................................... 70 Section 14.1 Authorized Representative................................................................. 70 Section 14.2 Notices ............................................................................................... 71 Section 14.3 Dispute Resolution............................................................................. 71 Section 14.4 Further Assurances............................................................................. 72 Section 14.5 No Dedication of Facilities................................................................ 72 Section 14.6 Force Majeure .................................................................................... 72 Section 14.7 Assignment of Agreement; Change in Control.................................. 74 Section 14.8 Ambiguity .......................................................................................... 76 Section 14.9 Attorneys’ Fees and Costs ................................................................. 76 Section 14.10 Voluntary Execution .......................................................................... 76 Section 14.11 Entire Agreement; Amendments........................................................ 76 Section 14.12 Governing Law .................................................................................. 77 Section 14.13 Venue ................................................................................................. 77 Section 14.14 Execution in Counterparts.................................................................. 77 Section 14.15 Effect of Section Headings ................................................................ 77 Section 14.16 Waiver................................................................................................ 77 80 of 1291

TABLE OF CONTENTS
(continued)
Page
iv
Section 14.17 Relationship of the Parties................................................................. 77 Section 14.18 Third Party Beneficiaries................................................................... 78 Section 14.19 Indemnification; Damage or Destruction; Insurance; Condemnation; Limit of Liability...................................................... 78 Section 14.20 Severability ........................................................................................ 79 Section 14.21 Confidentiality ................................................................................... 79 Section 14.22 Mobile-Sierra ..................................................................................... 81 Section 14.23 Service Contract................................................................................. 82 Section 14.24 Time is of the Essence ....................................................................... 82 Section 14.25 Right of First Offer and Right of First Refusal.................................. 82 Section 14.26 Market Disruption Event.................................................................... 83 81 of 1291
v
Appendices

APPENDIX A CONTRACT PRICE AND PAYMENT SCHEDULE

APPENDIX B FACILITY

APPENDIX C BUYER AND SELLER BILLING, NOTIFICATION AND SCHEDULING

CONTACT INFORMATION

APPENDIX D FORM OF ATTESTATION

APPENDIX E FORM OF LETTER OF CREDIT

APPENDIX F INSURANCE

APPENDIX G QUALITY ASSURANCE PROGRAM

APPENDIX H MILESTONE SCHEDULE

APPENDIX I NON-CONSOLIDATION OPINION

APPENDIX J REAL PROPERTY AGREEMENTS
APPENDIX K [RESERVED]

APPENDIX L FORM OF CASH ESCROW AGREEMENT

APPENDIX M COMMERCIAL OPERATION

APPENDIX N ORGANIZATIONAL STRUCTURE AND OWNERSHIP OF SELLER AND

PARENT ENTITIES

APPENDIX O METEOROLOGICAL AND PYRANOMETER MEASUREMENTS

APPENDIX P FORM OF QUARTERLY CERTIFICATE

APPENDIX Q ENERGY GENERATION AND PRODUCTION

APPENDIX R SINGLE-LINE DIAGRAM

APPENDIX S METERING DIAGRAM

APPENDIX T POINT OF METERING DIAGRAM

APPENDIX U LIST OF IDENTIFIED FACILITIES FOR REPLACEMENT ENERGY 82 of 1291
vi

APPENDIX V FORM OF MONTHLY REPORT

APPENDIX W FORM OF CONSENT TO COLLATERAL ASSIGNMENT

APPENDIX X LIST OF ANCILLARY DOCUMENTS

APPENDIX Y SPECIFIED REAL PROPERTY
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1 AMENDED AND RESTATED

POWER PURCHASE AGREEMENT

PARTIES

THIS AMENDED AND RESTATED POWER PURCHASE AGREEMENT
(“Agreement”), which is dated for convenience as of this ____ day of __________, 2023 (the “Amendment Date”), is being entered into by and between the Southern California Public Power Authority, a public entity and joint powers authority formed and organized pursuant to the California Joint Exercise of Powers Act (California Government Code Section 6500, et seq.) (“Buyer”), and Star Peak Geothermal LLC (“Seller”), a limited liability company organized and existing under the laws of the State of Nevada. Each of Buyer and Seller is referred to individually in this Agreement as a “Party” and together they are referred to as the “Parties”.

RECITALS
WHEREAS, Buyer’s Members have adopted or are adopting policies to comply with the California Renewable Energy Resources Act that are designed to increase the amount of energy that they provide to their retail customers from eligible renewable energy resources; and WHEREAS, on January 12, 2018, Buyer issued a request for proposals to acquire eligible renewable energy resources; and
WHEREAS, on February 22, 2018, Seller’s Ultimate Parent Entity on behalf of Seller submitted its initial response to Buyer’s request for proposals and, following negotiation, Seller has agreed to sell to Buyer, and Buyer has agreed to purchase, certain renewable energy, capacity rights and associated environmental attributes;
WHEREAS, Buyer and Seller entered into that certain Power Purchase Agreement, dated for convenience as of February 20, 2020 but with an effective date of March 30, 2020 (the “Effective Date,” and such agreement, the “Original Agreement”); and WHEREAS, the Parties desire to amend and restate the Original Agreement in its entirety as provided herein.

AGREEMENT
NOW, THEREFORE, in consideration of the foregoing Recitals, which are incorporated herein, and the mutual covenants and agreements herein set forth, the Parties hereto amend and restate the Original Agreement as follows:

ARTICLE I

DEFINITIONS AND INTERPRETATION
Section 1.1 Definitions. The following terms in this Agreement and the appendices hereto shall have the following meanings when used with initial capitalized letters:
84 of 1291
2 “Acceptable Form of Performance Assurance” means a letter of credit issued by a Qualified Issuer, substantially in the form attached hereto as Appendix E, or cash that shall be delivered in one installment to a custodian and held, for the benefit of Buyer, pursuant to a Cash Escrow Agreement in substantially the form attached as Appendix L, which will guarantee Seller’s obligations under this Agreement.
“Act” means all of the provisions contained in the California Joint Exercise of Powers Act found in Chapter 5 of Division 7 of Title 1 of the Government Code of the State of California, beginning at California Government Code Section 6500 et seq. “Additional Related Project” has the meaning set forth in Section 12.6. “Additional System” has the meaning set forth in Section 12.8. “Affiliate” means, as to any Person, any other Person that, directly or indirectly, is in Control of, is Controlled by or is under common Control with such Person or is a director or officer of such Person or of an Affiliate of such Person.
“Agreement” has the meaning set forth in the preamble of this Agreement and includes Appendices A through Y, attached hereto.
“Agreement Term” has the meaning set forth in Section 2.2. “Ancillary Documents” means any agreement, instrument, certificate or other document required to be executed and delivered between Buyer, on the one hand, and any Seller Party, on the other hand, in connection with this Agreement. As of the Effective Date, there are no Ancillary Documents.
“ASCE” means American Society of Civil Engineers and any successor thereto. “ASME” means American Society of Mechanical Engineers and any successor thereto. “Assumed Daily Deliveries” has the meaning set forth in Section 13.3(c). “ASTM” means American Society for Testing and Materials and any successor thereto. “Authorized Auditors” means representatives of Buyer or Buyer’s Agents who are authorized to conduct audits on behalf of Buyer.
“Authorized Representative” means, with respect to each Party, the Person designated as such Party’s authorized representative pursuant to Section 14.1. “Auxiliary Capacity Percentage” means twenty-five percent (25%). “AWS” means American Welding Society and any successor thereto. “Bankruptcy” means any case, action or proceeding under any bankruptcy, reorganization, debt arrangement, insolvency or receivership law or any dissolution or liquidation proceeding commenced by or against a Person and, if such case, action or proceeding is not 85 of 1291
3 commenced by such Person, such case, action or proceeding that is consented to or acquiesced in by such Person or that results in an order for relief or that remains undismissed for sixty (60) days. “Bankruptcy Code” means Title 11 of the United States Code entitled “Bankruptcy”, as now and hereafter in effect, or any successor statute thereto. “Brown Act” has the meaning set forth in Section 14.21(d). “Business Day” means any day that is not a Saturday, a Sunday, or a day on which commercial banks are authorized or required to be closed in Los Angeles, California, or New York, New York.
“Buyer” has the meaning set forth in the preamble of this Agreement. “Buyer’s Agent” means any Person that Buyer may designate from time to time to perform certain tasks acting as Buyer’s agent, including the Participating Member. “Buyer’s Check Meters” has the meaning set forth in Section 11.8(e). “Buyer’s Members” means any member of Buyer that has entered into the Joint Powers Agreement.
“Buyer’s Non-Compensable Curtailment Hours” has the meaning set forth in Section

6.9(b).
“Cal-OSHA” means California Occupational Safety and Health Administration and any successor thereto.
“CAMD” means the Clean Air Markets Division of the EPA and any other state, regional or federal or intergovernmental entity or Person that is given authorization or jurisdiction or both over a program involving the registration, validation, certification or transferability of Environmental Attributes.
“Capacity Rights” means the rights, whether in existence as of the Effective Date or arising thereafter during the Agreement Term, to capacity, resource adequacy, associated attributes, excluding Environmental Attributes, or reserves associated with the electric generating capability of the Facility, including the right to resell such rights. “CARB” means California’s Air Resources Board, and any successor agency thereto. “CEC” means California’s State Energy Resources Conservation and Development Commission, also known as the California Energy Commission, and any successor agency thereto. “CEC Certified” or “CEC Certification” means that the CEC has certified that the Facility is an eligible renewable energy resource in accordance with Section 399.12(e) of the Public Utilities Code and the guidelines adopted by the CEC relating thereto/RPS Law. 86 of 1291
4 “CEC Performance Standard” means, at any time, the applicable greenhouse gas emissions performance standard in effect at such time for baseload electric generation facilities that are owned or operated (or both) by local publicly owned electric utilities, or for which a local publicly owned electric utility has entered into a contractual agreement for the purchase of power from such facilities, as established by the CEC or other Governmental Authority having jurisdiction over the Buyer.
“CEQA” means the California Environmental Quality Act, California Public Resources Code Section 21000 et seq., as amended from time to time, and any successor statute. “Change in Control” means the occurrence, whether voluntary or by operation of law and whether in a single transaction or in a series of related transactions following which the Ultimate Parent Entity directly or indirectly no longer (i) remains the owner of more than fifty percent (50%) of the equity ownership of Seller, or (ii) retains the power to control the management and policies of Seller; provided, however, that a Change in Control shall not include any (i) transaction or series of transactions in which a membership interest or other equity interest in Seller or any Parent Entity is issued or transferred to another Person solely for the purpose of a Tax Equity Financing, or (ii) a sale or transfer in accordance with Section 14.7(g).
“COD Daily Delay Damages Cap” has the meaning set forth in Section 3.5. “Commercial Operation” means (a) Seller has demonstrated, and the Independent Engineer has confirmed in writing, that the conditions set forth in the Independent Engineer certificate attached as Appendix M-1 have been met with respect to the Facility as a whole, and (b) Seller has demonstrated, to the reasonable satisfaction of Buyer, that any conditions on Appendix M not certified to by the Independent Engineer have been met with respect to the Facility as a whole, and in the case of both (a) and (b), all certificates associated therewith have been accepted by Buyer.
“Commercial Operation Date” means the date on which Commercial Operation of the Facility occurs, as determined pursuant to Section 3.5. “Compensable Curtailments” has the meaning set forth in Section 6.9(a). “Compliance Standards” has the meaning set forth in Section 8.6. “Confidential Information” has the meaning set forth in Section 14.21(a). “Construction Commencement Milestone” means the date on which Seller demonstrates to the reasonable satisfaction of Buyer’s Authorized Representative that (a) Seller’s general contractor has commenced installation and construction of the Facility pursuant to Seller’s issuance of NTP, (b) all Permits listed in Appendix B have been obtained, are final and are in full force and effect and (c) the diagrams contained in Appendices U through X have been updated. “Contract Month” means any month during the Delivery Term for which the first date and last date of such month occur during the Delivery Term. 87 of 1291
5 “Contract Year” means (i) the stub year period beginning on the Commercial Operation Date and ending on December 31 of the year in which the Commercial Operation Date occurs; and (ii) each of the following calendar years, until and including the calendar year ending December 31, 2045.
“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of management, policies, or activities of a Person, whether through ownership of voting securities, by contract or otherwise.
“Costs” has the meaning set forth in Section 13.3(f)(3). “CPRA” has the meaning set forth in Section 14.21(d).
“Daily Delay Damages” has the meaning set forth in Section 3.5. “Day Ahead Schedule” has the meaning set forth in Section 4.4(e). “Deemed Additional System Output” has the meaning set forth in Section 12.8. “Deemed Delivered Energy” has the meaning set forth in Section 6.9(b). “Default” has the meaning set forth in Section 13.1.
“Defaulting Party” has the meaning set forth in Section 13.1. “Deficient Month” has the meaning set forth in Section 6.1(c). “Delivered Energy” means the MWh of Facility Energy and unspecified energy Scheduled and delivered by Seller and received by Buyer during such Contract Month at the Point of Delivery, which amount will not include Station Service, Parasitic Load, or transmission or transformation losses to the Point of Delivery in conformance with the most-current edition of the guidebook promulgated by the CEC.
“Delivery Term” has the meaning set forth in Section 2.2. “Development Security” has the meaning set forth in Section 5.4. “Dispute” has the meaning set forth in Section 14.3(a). “Dispute Notice” has the meaning set forth in Section 14.3(a). “DNP” has the meaning set forth in Section 4.4(j).
“Downgrade Event” means any event that results in a Person failing to meet the credit requirements of a Qualified Issuer or the commencement of involuntary or voluntary bankruptcy, insolvency, reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar proceeding (whether under any present or future statute, law, or regulation) with respect to such Person.
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6 “Early Termination Date” has the meaning set forth in Section 13.3(a). “EEI” means Edison Electric Institute and any successor thereto. “Effective Date” has the meaning set forth in the Recitals. “Electric Metering Devices” means all meters, metering equipment and data processing equipment conforming to the requirements set forth in Section 11.8 and used to measure, record or transmit data relating to the Energy output from the Facility. Electric Metering Devices include the metering current transformers and the metering voltage transformers. “Energy” means electrical energy.
“Environmental Attribute Reporting Rights” means all rights to report ownership of the Environmental Attributes to any Person, including under Section 1605(b) of the Energy Policy Act of 1992, as amended from time to time or any successor statute, or any other current or future international, federal, state or local law, regulation or bill, or otherwise. “Environmental Attributes” means RECs, and any and all other current or future credits, benefits, emissions reductions, offsets or allowances, howsoever entitled, named, registered, created, measured, allocated or validated (A) that are at any time recognized or deemed of value (or both) by Buyer, applicable law, or any voluntary or mandatory program of any Governmental Authority or other Person, and (B) that are attributable to (i) Facility Energy generation capability or generation during the Agreement Term or Replacement Energy required to be delivered by Seller to Buyer during the Delivery Term and (ii) the emissions or other environmental characteristics of such Facility Energy generation or such Replacement Energy or its displacement of conventional or other types of Energy generation. Environmental Attributes include any of the aforementioned arising out of legislation or regulation concerned with oxides of nitrogen, sulfur, carbon, or any other greenhouse gas or chemical compound, particulate matter, soot, or mercury, or implementing the United Nations Framework Convention on Climate Change (the “UNFCCC”), the Kyoto Protocol to the UNFCCC, the principles identified in the Paris Agreement of the UNFCCC that took effect in 2016, the Clean Power Plan promulgated by the United States Environmental Protection Agency, California’s greenhouse gas legislation (including RPS Law and California Assembly Bill 32 (Global Warming Solutions Act of 2006) and any regulations implemented pursuant to that act, including any compliance instruments accepted under the California Cap on Greenhouse Gas Emissions and Market-Based Compliance Mechanisms regulations of the California Air Resources Board or any successor regulations thereto) or any similar international, federal, state or local program or crediting “early action” with a view thereto, laws or regulations involving or administered by the CAMD and all Environmental Attribute Reporting Rights, including all evidences (if any) thereof such as renewable energy certificates of any kind. Environmental Attributes for purposes of this definition are separate from the Energy produced from the Facility. Notwithstanding any other provision in this definition, Environmental Attributes do not include (X) any tax credits associated with the Facility and (Y) any grants or any similar benefits related to the Facility.
“Environmental Laws” means any federal, state or local laws (including common law), statutes, ordinances, rules, regulations, binding orders, injunctions or judgments pertaining to 89 of 1291
7 public health, safety, pollution, or the presence of or release of Hazardous Materials on, under or about the Site.
“EPA” means the United States Environmental Protection Agency and any successor agency.
“EPS Compliant,” means, when used with respect to the Facility or any other facility at any time, that the Facility or other facility, as applicable, satisfies both the PUC Performance Standard and the CEC Performance Standard in effect at the time; provided, if it is impossible for the Facility or facility, as applicable, to satisfy both the PUC Performance Standard and the CEC Performance Standard in effect at any time, the Facility or facility, as applicable, shall be deemed EPS Compliant if it satisfies the CEC Performance Standard in effect at the time and those portions of the PUC Performance Standard in effect at the time that it is possible for the Facility or facility, as applicable, to satisfy while at the same time satisfying the CEC Performance Standard in effect at the time.
“EPS Law” means Sections 8340 and 8341 of the California Public Utilities Code, as implemented and amended from time to time, or any successor laws or regulations in the State of California.
“Escrow Account” means the account established in accordance with Appendix L. “e-tag” has the meaning set forth in Section 7.1(a).
“Excess Energy” means the portion of the Delivered Energy and Deemed Delivered Energy for any Contract Month that is in excess of the Expected Monthly Generation, other than any Delivered Energy received by Buyer in such Contract Month that cures outstanding Shortfall Energy from the prior two months in accordance with Article IX. “Excess Energy Rate” means the price per MWh ($/MWh) to be paid to Seller by Buyer for Excess Energy according to the provisions in paragraph 3 of Appendix A. “Excess Monthly Generation” means, for any Contract Month, the sum of the following for all hours in such Contract Month: the positive difference (if any) by which (a) the MWh of Delivered Energy for each hour exceeds (b) the MWh of Facility Energy measured during such hour by the Electric Metering Devices in accordance with Section 11.8. “Excused Conditions” has the meaning set forth in Section 9.1. “Expected Annual Generation” means, with respect to any Contract Year, the sum of the Expected Monthly Generation for all Contract Months during such Contract Year. “Expected Monthly Generation” means, with respect to any Contract Month, subject to Section 6.4, the applicable MWh set forth on Appendix Q for such Contract Month. “Expected Monthly Generation Adjustment Period” has the meaning given in Section

6.4(a).
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8 “Extended Expected Monthly Generation Adjustment Period” has the meaning given in Section 6.4(b).
“Facility” means the 14.5 MW nominal nameplate capacity geothermal generating facility known as the Star Peak Geothermal Energy Project, located in Pershing County, Nevada, including all property interests and related transmission and other facilities, described in Appendix B. “Facility Assets” has the meaning given in Section 14.25. “Facility Cost” means, measured as of the applicable measurement date, the aggregate amount of all costs and expenses incurred by Seller for the development, design, engineering, equipping, procuring, constructing, installing, starting up and testing of the Facility, including (a) the cost of all labor, services, materials, supplies, equipment, tools, transportation, supervision, storage, training, demolition, site preparation, civil works, and remediation in connection therewith, (b) the cost of acquiring the leasehold interest and any other property, easement or other interest in the Site, (c) the cost of acquiring the Permits for the Facility, (d) real and personal property taxes, ad valorem taxes, sale, use, and excise taxes, and insurance (including title insurance) premiums payable with respect to the Facility, (e) initial working capital requirements of the Facility, (f) financial, legal, and consulting fees, costs, and expenses and (g) the cost of establishing a spare parts inventory for the Facility, if any, net of revenue from Startup and Test Energy.
“Facility Debt” means, measured as of the applicable measurement date, any payment obligations of Seller in connection with borrowed money, including (a) principal of and premium on indebtedness, (b) fees, charges, expenses and penalties related to indebtedness, (c) amounts due upon acceleration or in connection with prepayment or restructuring of indebtedness, (d) swap or interest rate hedging breakage costs and (e) any claims or interest due with respect to any of the foregoing.
“Facility Energy” means Energy generated by the Facility, including Energy used to serve Parasitic Load.
“Facility Lender” means any lender providing senior or subordinated construction, interim or long-term debt or equity financing or refinancing for or in connection with the development, construction, purchase, installation or operation of the Facility, including any equity and tax investor providing financing or refinancing for the Facility or purchasing equity ownership interests of Seller or its Affiliates, and any trustee or agent acting on their behalf, and any Person providing interest rate protection agreements to hedge any of the foregoing debt obligations. “Facility’s Point of Delivery” means the interconnection facilities of Seller located at the point of interconnection between the Facility’s transmission line and the NV Energy’s Star Peak Substation for Star Peak Geothermal (on the line between Oreana and Pegasus/Humboldt House) near Imlay, NV.
“FERC” means the Federal Energy Regulatory Commission or any successor agency thereto.
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9 “Financing Agreement” shall mean any credit agreement, loan agreement or similar agreement, to be executed between Seller and a Facility Lender. “Firm Transmission” means transmission that cannot be curtailed within an operating hour for economic reasons or for higher priority transmission within the operating hour. “Force Majeure” has the meaning set forth in Section 14.6(b). “Force Majeure Notice” has the meaning set forth in Section 14.6(a). “Forced Outage” means the removal of service availability of the Facility, or any portion of the Facility, for emergency reasons or conditions in which the Facility, or any portion thereof, is unavailable due to unanticipated failure, including as a result of Force Majeure. “FTP” has the meaning set forth in Section 4.4(a).
“GAAP” means generally accepted accounting principles set forth in opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as may be approved by a significant segment of the accounting profession, in each case as the same are applicable to the circumstances as of the date of determination.
“Gains” has the meaning set forth in Section 13.3(f)(1). “GCOD” means the guaranteed commercial operation date and shall be April 1, 2021. “Generator Interconnection Agreement” means that certain small generator interconnection agreement and associated documents (or any successor agreement and associated documentation) by and between Seller and Transmission Provider governing the terms and conditions of Seller’s interconnection with the Transmission System and allowing for delivery of Facility Energy to the Point of Delivery.
“Governmental Authority” means any federal, state, regional, city or local government, any intergovernmental association or political subdivision thereof, other governmental, regulatory or administrative agency, court, commission, administration, department, board, other governmental subdivision, legislature, rulemaking board, tribunal, other governmental authority with jurisdiction over the Person or matter at issue, or any Person acting as a delegate or agent of any Governmental Authority; provided that “Governmental Authority” specifically excludes Buyer, any successor or assignee of Buyer and the Participating Member. “Green Value” consists of the market value of (a) avoided greenhouse gas emissions and/or credits associated with RPS Compliant Energy, and (b) all other Environmental Attributes and avoided emissions-related attributes and benefits that would otherwise have been realized had Seller generated Facility Energy, and shall be calculated as an amount equal to the time-weighted average of the prices of greenhouse gases and other Environmental Attributes (as published in commercial indices related to California energy markets) that would have been realized as available from the Facility and included in the Environmental Attributes transferred to Buyer 92 of 1291
10 hereunder from the Facility for each MWh of the Shortfall Energy, provided that if for any Contract Month there does not exist a liquid trading market that is mutually agreeable to the Parties to determine such Green Value, the Green Value will be equal to the higher of the replacement cost for the attributes described in clauses (a) and (b) above, expressed in $/MWh, or $15/MWh. “Guaranteed Monthly Delivered Energy” means the amount of Net Delivered Energy guaranteed by Seller during each Contract Month, as set forth in Appendix Q, subject to Section

6.4. “Hazardous Materials” means any hazardous substances, pollutants, contaminants, wastes, or materials (including petroleum (including crude oil or any fraction thereof), petroleum wastes, radioactive materials, hazardous wastes, toxic substances, or asbestos or any materials containing asbestos) designated, regulated, or defined under any Environmental Law. “ICCCP” has the meaning set forth in Section 11.8(a).
“IEEE” means Institute of Electrical and Electronics Engineers and any successor thereto. “Indemnified Liability” has the meaning set forth in Section 14.19(a). “Indemnitee” has the meaning set forth in Section 14.19(a). “Independent Engineer” means Geologica, or such other engineer as may be jointly selected by the Seller and Buyer’s Authorized Representative. “Independent Manager” means a manager who is not, at the time of initial appointment or at any time while serving as Independent Manager, and has not been at any time during the preceding five (5) years: (a) a member, stockholder, equity holder, director, manager (except as such Independent Manager of the Seller), officer, employee, partner, attorney or counsel of the Seller, any member of Seller or any Affiliate of the Seller; (b) a customer, supplier or other Person who derives any of its purchases or revenues from its activities with any member of the Seller, the Seller or any Affiliate of the Seller (other than for serving as Independent Manager of the Seller); (c) a Person Controlling or under common Control with any such stockholder, equity holder, partner, manager, customer, supplier or other like Person; or (d) a member of the immediate family of any such member, stockholder, equity holder, director, officer, employee, manager, partner, customer, supplier or other like Person.
“Initial Daily Delay Damages Cap” has the meaning set forth in Section 3.5. “Initial Security Amount” means Seven Hundred Forty Four Thousand Six Hundred and Fifty Dollars ($744,650).
“Initial Synchronization” means that (i) the Facility is receiving back-feed energy, (ii) both the generator tie line and the Facility’s transformers are energized, (iii) the Transmission System’s circuit breakers and the Facility’s circuit breakers are closed, and (iv) the Facility is interconnected with the Transmission System.
“Insurance” means the policies of insurance as set forth in Appendix F. 93 of 1291
11 “Interest Rate” has the meaning set forth in Section 11.5. “ISA” means Instrument Society of America and any successor thereto. “Joint Powers Agreement” means the “Southern California Public Power Authority Joint Powers Agreement” entered into pursuant to the provisions of the Act among Buyer and Buyer’s members, dated as of November 1, 1980.
“Key Milestones” means the Construction Commencement Milestone, occurrence of the Commercial Operation Date, and any other Milestone indicated as a “Key Milestone” in Appendix H.
“Knowledge” means the actual knowledge, after due inquiry, of any officer or any other agent, employee or representative of Seller responsible for the management of the operation or maintenance of the Facility.
“Legal Opinion” means an executed original of a written legal opinion of Stoel Rives LLP, counsel for Seller, or other counsel reasonably acceptable to Buyer, addressed to Buyer and in form and substance reasonably acceptable to Buyer, concerning, among others, the enforceability and due authorization of this Agreement, and the other Ancillary Documents that are agreements between the Parties, dated as of the Effective Date.
“Lessor” means the lessor or landowner under any Real Property Agreement. “Lien” means any mortgage, deed of trust, lien, security interest, retention of title or lease for security purposes, pledge, charge, encumbrance, equity, attachment, claim, easement, right of way, covenant, condition or restriction, leasehold interest, purchase right or other right of any kind, including any option, of any other Person in or with respect to any real or personal property. “Losses” has the meaning set forth in Section 13.3(f)(2). “Major Maintenance Blockout” has the meaning set forth in Section 4.4(k). “Makeup Energy” has the meaning set forth in Section 9.2. “Makeup Deadline” has the meaning set forth in Section 9.3. “Market Disruption Event” has the meaning set forth in Section 14.26. “Market Price” means (a) in the case of all Delivered Energy that is not Excess Energy, the lower of (i) the Market Price Index applicable to Delivered Energy and (ii) the applicable price set forth in Appendix A for such Delivered Energy, and (b) in the case of Excess Energy, 50% of the lower of the foregoing clauses (i) and (ii).
“Market Price Index” means the monthly firm forward market price at Palo Verde for On Peak hours and Off Peak hours, as reasonably calculated by Buyer, and verified by Seller, taking into account, among other valuations, a minimum of three (3) quotations from leading brokers in Energy contracts that are not Affiliates of either Party, settlement prices on established, actively 94 of 1291
12 traded power exchanges for Palo Verde and other bona fide third party offers, and other relevant market information, provided that in the event there are no longer market prices for Palo Verde, the Parties will mutually agree to a replacement market price index that most closely reflects the geographic location of the Palo Verde market at the Effective Date; provided, further, that if a market price index for Energy that would more accurately track the price of the Delivered Energy is created, the Parties may mutually agree to adapt such index price as the Market Price Index at such time.
“Market Value” means the median price of three bona fide offers from third parties for Facility Energy (excluding the value of Environmental Attributes), which shall be solicited by Seller in good faith if the RPS Law or EPS Law ceases to be effective and is not replaced with a functional equivalent as provided in Section 8.7(b) or if compliance with EPS Law and RPS Law becomes impossible as provided in Section 8.7(c).
“Milestone” has the meaning set forth in Section 3.4.
“Milestone Date” has the meaning set forth in Section 3.4. “Monthly Report” means the report required to be delivered by Seller pursuant to Section

4.6 in form and substance substantially similar to Appendix V. “MW” means megawatt(AC).
“MWh” means megawatt-hour.
“NEPA” means the National Environmental Policy Act, as amended. “NERC” means the North American Electric Reliability Corporation and any successor thereto.
“NERC Reliability Standards” means the reliability standards developed by NERC or by any regional authority having jurisdiction, which are applicable to the owner or operator of the Facility or the Facility itself.
“Net Delivered Energy” means Delivered Energy that is not Excess Monthly Generation. “NV Energy” means NV Energy, Inc., a Nevada corporation. “Nominal Capacity Net of Parasitic Load” means 12.5 MW. “Nominal Nameplate Capacity” means 14.5 MW.
“Non-Compensable Curtailments” has the meaning set forth in Section 6.9(a). “Non-Consolidation Opinion” means a reasoned opinion of Seller’s legal counsel, Stoel Rives LLP, addressed to Buyer and dated on or prior to the Effective Date, in form and substance reasonably acceptable to Buyer’s Authorized Representative, as to the non-consolidation of Seller 95 of 1291
13 in a bankruptcy proceeding of any member of Seller, the Ultimate Parent Entity, or other Affiliate of Seller, attached hereto as Appendix I.
“Non-Defaulting Party” has the meaning set forth in Section 13.3(a). “Notice of Exemption” means a notice of exemption as described in California Public Resources Code Section 21108(b) and Title 14, California Code of Regulations, Section 15277. “Notice of Proposed Third Party Sale” has the meaning set forth in Section 14.25(b). “Notifying Party” has the meaning set forth in Section 14.3(a). “NTP” means a full notice to proceed issued by Seller to its general contractor for the commencement of installation and construction of the Facility pursuant to which such general contractor is obligated to commence the installation and construction of the Facility. “NVTREC” means the Nevada Tracks Renewable Energy Credits system that is used to register, track and manage PECs.
“Off Peak” means any time other than On Peak.
“On Peak” means 06:00 a.m. to 10:00 p.m. every day of the week except Sunday. “Operation and Maintenance Plan” has the meaning set forth in Section 4.3(a). “Original Agreement” has the meaning set forth in the preamble of this Agreement. “OSHA” means Occupational Safety and Health Administration of the United States Department of Labor and any successor thereto.
“Outside COD” has the meaning set forth in Section 3.5. “Outside COD Damages Cap” has the meaning set forth in Section 3.5. “Pacific Prevailing Time” means the local time in Los Angeles, California. “Parasitic Capacity” means the electric capacity required to serve the maximum Parasitic Load of the Facility, as determined and certified by the Independent Engineer prior to the date of commercial operation of the Additional System.
“Parasitic Load” means Facility Energy that is used to power the lights, motors, pumps, auxiliary facilities of the well field, control systems, cooling systems, ancillary equipment, and other electrical loads that are necessary for the operation of the power systems and related facilities for the production of Facility Energy.
“Parent Entity” or “Parent Entities” means any direct or indirect owner of Seller at any level below the Ultimate Parent Entity.
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14 “Participating Member” means the City of Glendale, the member of Buyer participating in this Agreement.
“Party” or “Parties” has the meaning set forth in the preamble of this Agreement. “PECs” has the meaning given in Section 8.1.
“Performance Assurance” means Development Security or Performance Security. “Performance Security” has the meaning set forth in Section 5.4(b). “Permit” means all applications, permits, licenses, franchises, certificates, concessions, consents, authorizations, certifications, self-certifications, approvals, registrations, orders, filings, entitlements and similar requirements of whatever kind and however described which are required to be filed, submitted, obtained or maintained by any Person with respect to the development, siting, design, acquisition, construction, equipping, financing, ownership, possession, shakedown, start-up, testing, operation or maintenance of the Facility, the production, sale and delivery of Facility Energy or Replacement Energy to Buyer, as applicable, Capacity Rights and Environmental Attributes or any other transactions or matter contemplated by this Agreement (including those pertaining to electrical, building, zoning, environmental and occupational safety and health requirements), including those described in Appendix B. “Permitted Encumbrances” means (i) the Lien in favor of the Facility Lender, (ii) any Lien approved by Buyer in a writing separate from this Agreement which expressly identifies the Lien as a Permitted Encumbrance, (iii) Liens for Taxes not yet due or for taxes being contested in good faith by appropriate proceedings, so long as such proceedings do not involve a risk of the sale, forfeiture, loss or restriction on the use of the Facility or any part thereof, provided that such proceedings end by the expiration of the Agreement Term, (iii) suppliers’, vendors’, mechanics’, workman’s, repairman’s, employees’ or other like Liens arising in the ordinary course of business for work or service performed or materials furnished in connection with the Facility for amounts the payment of which is either not yet delinquent or is being contested in good faith by appropriate proceedings so long as such proceedings do not involve a risk of the sale, forfeiture, loss or restriction on use of the Facility or any part thereof, and (iv) easements, rights of way, use rights, exceptions, encroachments, reservations, restrictions, conditions or limitations, so long as they have been identified by Seller to Buyer in writing prior to the Effective Date and do not materially interfere with or impair the operation of the Facility as contemplated by this Agreement. “Permitted Transfer” has the meaning set forth in Section 14.25. “Person” means any individual, corporation, partnership, joint venture, limited liability company, association, joint stock company, trust, unincorporated organization, entity, government or other political subdivision.
“Point of Delivery” means the point where any Energy sold and purchased under this Agreement is required to be delivered by Seller to Buyer, specifically McCullough 500kV Substation located in Clark County, Nevada.
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15 “Present Value Rate” means, at any date, the sum of one-half percent (0.50%) plus the yield reported on page “USD” of the Bloomberg Financial Markets Services Screen (or, if not available, any other nationally recognized trading screen reporting on-line intraday trading in United States government securities) at 11:00 a.m. (New York City, New York time) for the United States government securities having a maturity that most nearly matches the Remaining Term at that date.
“Principals” means any board chair, president, chief executive officer, chief operating officer and any other individual who serves in the functional equivalent of one or more of those positions, as well as any individual who holds a direct ownership interest in Seller of at least twenty percent (20%).
“Project Substation” has the meaning set forth in Section 11.8(a). “Proposed PPA Notice” has the meaning set forth in Section 12.6(a). “Proposed Purchase Notice” has the meaning set forth in Section 14.25(a). “Proposed Sale Notice” has the meaning set forth in Section 14.25(a). “Prudent Utility Practices” means those practices, methods and acts, that are commonly used by a significant portion of the geothermal electric generation industry in prudent engineering and operations to design, construct and operate and maintain electric equipment (including geothermal facilities) lawfully and with safety, dependability, reliability, efficiency and economy, including any applicable practices, methods, acts, guidelines, standards and criteria of FERC, NERC, WECC, as each may be amended from time to time, and all applicable Requirements of Law. Prudent Utility Practices are not intended to be limited to the optimum practice, method, or act, to the exclusion of all others, but rather is intended to include acceptable practices, methods, and acts generally accepted in the geothermal-powered electric generation industry. “Public Utilities Code” means the Public Utilities Code of the State of California, as amended from time to time, and any successor thereto.
“PUC” means the California Public Utilities Commission and any successor thereto. “PUC Performance Standard” means, at any time, the greenhouse gas emission performance standard in effect at such time for baseload electric generation facilities owned or operated (or both) by load-serving entities and not local publicly-owned electric utilities, or for which a load-serving entity and not a local publicly owned electric utility has entered into a contractual agreement for the purchase of power from such facilities, as established by the PUC or other Governmental Authority under the EPS Law.
“Q/A” has the meaning set forth in Appendix G.
“Q/A Manual” has the meaning set forth in Appendix G.
“Q/C” has the meaning set forth in Appendix G.
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16 “Qualified Issuer” means a U.S. Issuer Bank that has a current long-term credit rating (corporate or long-term senior unsecured debt) of (1) “A2” or higher by Moody’s Investors Service, Inc. and “A” or higher by Standard & Poor’s, if rated by both rating agencies; or (2) “A2” or higher by Moody’s Investors Service, Inc. or “A” or higher by Standard & Poor’s, if rated by only one rating agency.
“Qualified Operator” means, with respect to the Facility, (i) an Affiliate of Seller, or (ii) a Person reasonably acceptable to Buyer that, in either case, has at least three (3) years of operating experience with types of generation facilities similar to the Facility. “Qualified Transferee” means a Person that when considered collectively with its Affiliates,
(a) (i) has or is a direct or indirect subsidiary of a Person that has, a tangible net worth assets under management, or to the extent its securities are publicly traded, equity value of at least $500,000,000, or (ii) has a minimum long term unsecured credit rating of at least Baa2 or higher by Moody’s or at least BBB or higher by S&P, (ii) retains a Qualified Operator or Qualified Operators to operate the Facility (or otherwise agrees not to interfere with the existing Qualified Operator for the Facility),
(iii) executes a written assumption agreement in favor of Buyer pursuant to which such Person shall assume all of the obligations of Seller under this Agreement and the Ancillary Documents,
(iv) is a Special Purpose Entity, and
(v) is not at the time of transfer in active litigation against Buyer or the Participating Member, or
(b) is reasonably acceptable to Buyer.
“Quality Assurance Program” has the meaning set forth in Section 5.3. “Quarterly Certificate” has the meaning set forth in Section 12.5(d). “Real Property Agreements” means the geothermal resource leases and the other leases, easements, rights-of-way or other real property agreements relating to the Site listed in Appendix J. “Recipient Party” has the meaning set forth in Section 14.3(a). “RECs” or “Renewable Energy Credits” means a certificate of proof associated with the generation of electricity from an RPS Complaint eligible renewable energy resource, which certificate is issued through the accounting system established by the CEC pursuant to the RPS Law, evidencing that one (1) MWh of Energy was generated from such eligible renewable energy resource. Such certificate is a tradable environmental commodity (also known as a “green tag” or 99 of 1291
17 “renewable energy credit”) for which the owner of the REC can prove that it has purchased renewable Energy.
“Reliability Authorities” means WECC and the Transmission Providers, balancing authorities, and independent system operators involved in dynamic scheduling of the Facility. “Remaining Term” means, at any date, the remaining portion of the Agreement Term at that date without regard to any early termination of this Agreement. “Remedial Action Plan” has the meaning set forth in Section 3.6. “Replacement Energy” has the meaning set forth in Section 9.4. “Replacement Energy Point of Delivery” has the meaning set forth in Section 9.4. “Requirement of Law” means federal, state and local laws, statutes, regulations, rules, codes, ordinances, resolutions, standards, directives, orders, judgments, decrees, rulings or determinations enacted, adopted, issued or promulgated by any federal, state, local or other Governmental Authority (including those pertaining to electrical, building, zoning, Environmental Laws, and occupational safety and health requirements). “Right of First Offer” or “ROFO” has the meaning set forth in Section 14.25. “Right of First Refusal” or “ROFR” has the meaning set forth in Section 14.25. “RPS Compliant” means, when used with respect to the Facility or any other facility at any time, that all Energy generated by such Facility or other facility, as applicable, at all times shall, together with all of the associated Environmental Attributes, qualify as a “portfolio content category 1” eligible renewable resource under the RPS Law and meet the requirements of Public Utilities Code Section 399.16(b)(1).
“RPS Law” means the California Renewable Energy Resources Act (also known as Senate Bill or SB X1-2), the Clean Energy and Pollution Reduction Act of 2015 (also known as SB 350) and The 100 Percent Clean Energy Act of 2018 (also known as SB 100), including the California Renewables Portfolio Standard Program (Article 16, commencing with Section 399.11, of Chapter

2.3 of Part 1 of Division 1 of the Public Utilities Code) along with the Renewable Energy Resources Program administered by the CEC and established pursuant to Chapter 8.6, commencing with Section 25740, of Division 15 of the Public Resources Code, and all policies established pursuant to Section 454.53 of the Public Utilities Code, any related regulations or guidebooks promulgated by the CEC, CARB, and, as applicable, the PUC, and as all of the foregoing may be promulgated, implemented or amended from time to time, and any successor or replacement laws or regulations.
“Sales Price” has the meaning set forth in Section 6.5. “SCADA” has the meaning set forth in Section 4.4(a).
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18 “Schedule” or “Scheduling” or “Scheduled” means the actions of Seller and Buyer or their Authorized Representatives, including each Party’s Transmission Providers, if applicable, of notifying, requesting and confirming to each other the quantity of Energy to be delivered hourly at the Point of Delivery on any given date during the Delivery Term. “Scheduled Outage” means any outage with respect to the Facility other than a Forced Outage.
“Scheduled Outage Projection” has the meaning set forth in Section 4.4(k). “Scheduler” means the Persons doing Scheduling for each Party. “Scheduling Procedures” has the meaning set forth in Section 4.4(a). “Seller” has the meaning set forth in the preamble of this Agreement. “Seller Party(ies)” means Seller and any Affiliates of Seller executing any Ancillary Document.
“Shortfall” has the meaning set forth in Section 9.1.
“Shortfall Cure Period” has the meaning set forth in Section 9.2. “Shortfall Damages” has the meaning set forth in Section 9.3. “Shortfall Energy” has the meaning set forth in Section 9.1. “Site” means the real property (including all fixtures and appurtenances thereto), water, and related physical and intangible property generally identified in Appendix B as owned or leased by Seller or over which Seller has an easement, right-of-way or other right to use or access the property where the Facility is located or will be located, and including the well fields and land subject to the Real Property Agreements held or to be held by Seller for transmission lines or roadways servicing such Site or the Facility located (or to be located) thereon. “Site Control” means that Seller shall: (i) own the Site; (ii) be the grantee, licensee, or lessee under one or more Real Property Agreements that permit Seller to perform all of its obligations under this Agreement and, as applicable, the other Ancillary Documents; or (iii) have otherwise provided evidence satisfactory to Buyer of Seller’s exclusive right to control the Site so as to permit Seller to perform all of its obligations under this Agreement and the Ancillary Documents to which it is a party; each of the foregoing clauses (i) through (iii), for the Agreement Term.
“Six-Month Cure” has the meaning set forth in Section 11.4. “Solar Capacity Factor” means thirty percent (30%).
“Special Purpose Entity” means a limited liability company which at all times prior to (except as otherwise provided below), on and after the Effective Date hereof:
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19 (a) shall not (without the prior written consent of Buyer) (i) engage in any dissolution, liquidation or consolidation or merger with or into any other business entity, (ii) acquire by purchase or otherwise all or substantially all of the business or assets of or beneficial interest in any other entity, (iii) transfer, lease or sell, in one transaction or any combination of transactions, all or substantially all of its properties or assets except to the extent permitted herein, (iv) modify, amend or waive any provisions of its organizational documents related to its status as a Special Purpose Entity, or (v) terminate its organizational documents or its qualifications and good standing in any jurisdiction; (b) has limited, is limiting and will limit its activities to acquiring, developing, owning, holding, selling, financing, leasing, transferring, exchanging, managing and operating the Facility, entering into this Agreement with Buyer and the Ancillary Documents and transacting lawful business that is incident, necessary and appropriate to accomplish the foregoing;
(c) has not been, is not, and will not be engaged in any business other than that relating to its limited purpose as set forth in the immediately preceding subsection (b); (d) has not had, does not have and will not have, any assets other than those related to the Facility;
(e) has held itself out and will hold itself out to the public as a legal entity separate and distinct from any other entity and has not failed and will not fail to correct any known misunderstanding regarding the separate identity of such entity, provided that (for the avoidance of doubt), the foregoing shall not restrict any Parent Entity, Ultimate Parent Entity or any other Seller Affiliate from identifying its indirect relationship to the Facility through Seller; (f) has maintained and will maintain its financial statements, bank accounts, accounts, books, resolutions, agreements and records separate from any other Person except as required by GAAP; provided, however, that to the extent permitted by GAAP, any such consolidated financial statement shall contain a note indicating that its separate assets and liabilities are neither available to pay the debts of the consolidated entity nor constitute obligations of the consolidated entity, and has filed and will file its own tax returns (except to the extent such limited liability company is treated as a “disregarded entity” for tax purposes and is not required to file separate tax returns under applicable law); (g) has held itself out and identified itself, and will hold itself out and identify itself, as a separate and distinct entity under its own name or in a name franchised or licensed to it by an entity other than an Affiliate of Seller (except to the extent such limited liability company is treated as a “disregarded entity” for tax purposes and is not required to file separate tax returns under applicable law) and not as a division, department or part of any other Person; (h) has maintained and will maintain its assets in such a manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets from those of any other Person;
(i) has not made and will not make loans or advances to any Person or hold evidence of indebtedness issued by any other Person (other than cash and investment-grade 102 of 1291
20 securities issued by an entity that is not an Affiliate of or subject to common ownership with such entity) or made any gifts or fraudulent conveyances to any Person; (j) has not identified and will not identify its members, or any Affiliate of any member, as a division or department or part of it, and has not identified itself and shall not identify itself as a division or department of any other Person; (k) has not entered into or been a party to, and will not enter into or be a party to, any transaction with its members or Affiliates, except in the ordinary course of its business and on terms which are commercially reasonable and comparable with those which could be obtained in a comparable arm’s-length transaction with an unrelated third party; (l) has not had and will not have any obligation to indemnify, and has not indemnified and will not indemnify its officers, managers or members, as the case may be, other than (i) the Independent Manager in connection with the Independent Manager’s actions related to the performance of this Agreement, and (ii) its officers, managers, and members with respect to actions taken or omitted to be taken in good faith by such officer, manager or member with respect to the development, construction, financing, ownership and operation of the Facility; (m) has considered and shall consider the interests of its creditors in connection with all limited liability company actions;
(n) except for obligations to Facility Lenders or Tax Equity Investors, does not and will not have any of its obligations guaranteed by any Affiliate and will not hold itself out as being responsible for the debts or obligations of any other Person; (o) will comply with all of the terms and provisions contained in its organizational documents including the provision requiring that there be an Independent Manager at all times on and after the Effective Date and has done or caused to be done and will do all things necessary to preserve its existence;
(p) will not commingle, its funds or assets with those of any Person and will not participate in any cash management system with any other Person; (q) will conduct all business in its own name and, except in connection with a Tax Equity Financing utilizing a lease or inverted lease structure, from and after the Commercial Operation Date, has held, and will hold, its assets in its own name and conducted and will conduct all business in its own name;
(r) has maintained and will maintain its financial statements, accounting records and other entity documents separate from any other Person and has not permitted and will not permit its assets to be listed as assets on the financial statement of any other entity except as required by GAAP; provided, however, that to the extent permitted by GAAP, any such consolidated financial statement shall contain a note indicating that its separate assets and liabilities are neither available to pay the debts of the consolidated entity nor constitute obligations of the consolidated entity;
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21 (s) has paid and will pay its own liabilities and expenses, including the salaries of its own employees, out of its own funds and assets, and has maintained and will maintain a sufficient number of employees in light of its contemplated business operations (it being acknowledged and agreed that Seller may have no employees to the extent it contracts out its requirements for all necessary managerial, operational and other services); (t) has observed and will observe all limited liability company formalities; (u) has not assumed or guaranteed or become obligated for, and will not assume or guarantee or become obligated for, the debts of any other Person and has not held out and will not hold out its credit as being available to satisfy the obligations of any other Person; (v) has not acquired and will not acquire obligations or securities of its members or any Affiliate;
(w) will allocate fairly and reasonably any overhead expenses that are shared with any Affiliate, including paying for shared space and services performed by any employee of an Affiliate;
(x) now maintains and uses, and will maintain and use separate stationery, invoices and checks bearing its name; such stationery, invoices and checks utilized by it or utilized to collect its funds or pay its expenses have borne and shall bear its own name and shall not bear the name of any other entity unless such entity is clearly designated as being its agent; (y) except in connection with the development or construction, or financing of the development or construction of the Facility, has not pledged and will not pledge its assets for the benefit of any other Person;
(z) now has, and will have articles of organization, a certificate of formation or an operating agreement, as applicable, that provides that it will not: (A) dissolve, merge, liquidate or consolidate; (B) sell, transfer, lease or otherwise convey all or substantially all of its assets (other than as permitted under Section 14.7); (C) engage in any other business activity, or amend its organizational documents with respect to the matters set forth in this definition without the affirmative vote of its Independent Manager; or (D) without the affirmative vote of its Independent Manager, file a bankruptcy or insolvency petition or otherwise institute insolvency proceedings with respect to itself or to any other entity in which it has a direct or indirect legal or beneficial ownership interest;
(aa) has been, is and intends to remain solvent and has paid and intends to continue to pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses) from its assets as the same shall have or become due, and has maintained, is maintaining and intends to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations; and
(bb) has and will have no indebtedness other than (i) Facility Debt relating to the development, construction or permanent financing or refinancing for the Facility, including indebtedness in its replacement or substitution thereof, (ii) Taxes and Insurance premiums, (iii) 104 of 1291
22 liabilities incurred in the ordinary course of business relating to its ownership, management, administration leasing and operation of the Facility and its routine administration, which liabilities are not more than sixty (60) days past due, are not evidenced by a note and are paid when due, and which amounts are normal and reasonable under the circumstances, and in any event not in excess of one percent (1%) of the Facility Cost in the aggregate, (iv) the Performance Security and indebtedness incurred in support of or connection with the Performance Security, and (v) such other liabilities that are permitted pursuant to this Agreement.
“Specified Transmission Path” means (i) the NV Energy north system to McCullough 500 kV Substation located in Clark County, Nevada, and (ii) any transmission path used by Seller to deliver Replacement Energy to Buyer at the Replacement Energy Point of Delivery as specified in Section 9.4.
“Startup and Test Energy” means the MWh of Delivered Energy that is generated prior to the Commercial Operation Date.
“Station Service” has the meaning set forth in the guidebook promulgated by the CEC, as amended from time to time, or in other RPS Law, whichever is controlling. “System Credit” has the meaning set forth in Section 12.8. “System Emergency” means Emergency Conditions as set forth in the Generator Interconnection Agreement.
“Tax” or “Taxes” means each federal, state, county, local and other (a) net income, gross income, gross receipts, sales, use, ad valorem, business or occupation, transfer, franchise, profits, withholding, payroll, employment, excise, property or leasehold tax and (b) customs, duty or other fee, assessment or charge of any kind whatsoever, together with any interest and any penalties, additions to tax or additional amount with respect thereto. “Tax Equity Financing” means, with respect to Seller, any Parent Entity, or the Ultimate Parent Entity, any transaction or series of transactions (including without limitation any transaction of the type described in this definition that utilizes a lease or inverted lease structure) resulting in (i) a portion of the membership interests of Seller or any Parent Entity, as applicable, being issued or otherwise provided to another Person (a “Tax Equity Investor”) in exchange for capital contributions to Seller, a Parent Entity, or the Ultimate Parent Entity, as applicable, or the Facility being sold to and leased by Seller from a Tax Equity Investor, in either case for the purpose of raising a portion of the funds needed to finance the construction of the Facility by monetizing the Tax credits, depreciation and other tax benefits associated with the Facility and (ii) the Tax Equity Investor being granted only such management responsibilities in Seller, a Parent Entity, or the Ultimate Parent Entity, as applicable, as are permitted in a tax equity investment that is not subject to FERC’s review under Section 203 of the Federal Power Act. “Tax Equity Investor” has the meaning set forth in the definition of Tax Equity Financing. “Termination Notice” has the meaning set forth in Section 13.3(a). 105 of 1291
23 “Termination Payment” has the meaning set forth in Section 13.3(d). “Transmission Provider(s)” means the Person(s) operating the Transmission System(s) providing Transmission Services to or from the Point of Delivery. “Transmission Services” means the transmission and other services required to transmit Energy to or from the Point of Delivery.
“Transmission System” means the facilities utilized to provide Transmission Services. “Ultimate Parent Entity” means Open Mountain Energy, LLC, a Delaware limited liability company, together with its successors and assigns. “Unexcused Cause” has the meaning set forth in Section 14.6(b). “UNFCCC” has the meaning set forth in the definition of Environmental Attributes. “Unused Curtailment Credit” has the meaning set forth in Section 6.9(d). “U.S. Issuer Bank” means any issuer of a letter of credit that is organized under the laws of the United States or any state thereof.
“WECC” means the Western Electricity Coordinating Council and any successor entity thereto.
“Withholding Trigger Event” has the meaning set forth in Section 11.4. “WREGIS” means Western Renewable Energy Generation Information System, any successor thereto, including any replacement system required by the CEC, or any replacement system as determined by Buyer.
“WREGIS Certificate Deficit” has the meaning set forth in Section 6.1(c). “WREGIS Certificates” has the meaning set forth in Section 8.4. “WREGIS Operating Rules” means the rules describing the operations of WREGIS, as published by WREGIS and as may be amended from time to time. “WREGIS Withhold Amount” has the meaning set forth in Section 11.4.

Other terms defined herein have the meanings so given them in this Agreement.

Section 1.2 Interpretation. In this Agreement, unless a clear contrary intention appears:
(a) the singular number includes the plural number and vice versa; (b) reference to any Person includes such Person’s successors and assigns but, in case of a Party hereto, only if such successors and assigns are permitted by this 106 of 1291
24 Agreement, and reference to a Person in a particular capacity excludes such Person in any other capacity or individually;
(c) reference to any gender includes the other;
(d) reference to any agreement (including this Agreement), document, instrument or tariff means such agreement, document, instrument or tariff as amended or modified and in effect from time to time in accordance with the terms thereof and, if applicable, the terms hereof;
(e) reference to any Article, Section, or Appendix means such Article of this Agreement, Section of this Agreement, or such Appendix to this Agreement, as the case may be, and references in any Article or Section or definition to any clause means such clause of such Article or Section or definition;
(f) “herein”, “hereunder”, “hereof”, “hereto” and words of similar import shall be deemed references to this Agreement as a whole and not to any particular Article or Section or other provision hereof or thereof;
(g) “including” (and with correlative meaning “include”) means including without limiting the generality of any description preceding such term; (h) relative to the determination of any period of time, “from” means “from and including”, “to” means “to but excluding” and “through” means “through and including”; (i) reference to time shall always refer to Pacific Prevailing Time; (j) reference to any “day” or “month” shall mean a calendar day or calendar month respectively, unless otherwise indicated, and assumes the use of Pacific Prevailing Time to determine the start and end of each referenced “day” or “month”, unless otherwise indicated; (k) the term “or” is not exclusive; and
(l) with respect to obligations, the terms “shall” and “will” shall have the same meaning and be of equal force and effect.

Section 1.3 Order of Precedence. In the event of any conflict or inconsistency between or among the terms and conditions of any of the body of this Agreement, the Appendices and Exhibits attached to the body of this Agreement and the Ancillary Documents, the following order of precedence, consistent with the controlling Requirements of Law, shall govern the interpretation of this Agreement: (i) the body of this Agreement, (ii) the Appendices and Exhibits attached to the body of this Agreement, and (iii) the Ancillary Documents.

ARTICLE II

EFFECTIVE DATE, TERM AND EARLY TERMINATION
Section 2.1 Effective Date. This Agreement shall be effective as of the Effective Date.

On or prior to the Effective Date, Seller shall deliver to Buyer (a) the Generator Interconnection 107 of 1291
25 Agreement, duly executed by Seller and Transmission Provider, (b) the Legal Opinion, (c) the Non-Consolidation Opinion, (d) the Real Property Agreements, duly executed by the parties thereto, (e) copies of (i) the true, correct and complete certificate of formation and limited liability company agreement of Seller, (ii) a certificate for Seller, dated no earlier than ten (10) days prior to the Effective Date, from the Secretary of State of the State of Nevada as to Seller’s valid existence and good standing, and (iii) all resolutions and other documents evidencing all limited liability company actions required to execute, deliver, and perform the Seller Parties’ obligations under this Agreement and the Ancillary Documents, in each case, certified by an authorized representative of the applicable Seller Party as being true, correct and complete, and (f) an incumbency certificate signed by the secretary of each Seller Party certifying as to the names and signatures of the authorized representatives, signatories, and officers of such Seller Party, in each case, in form and substance reasonably satisfactory to Buyer. No more than five (5) Business Days after the Effective Date, Seller shall deliver to Buyer acceptable evidence of the Insurance. No more than ten (10) days after the Effective Date, Seller shall deliver to Buyer the Development Security. No more than thirty (30) days after the Effective Date, Seller shall deliver to Buyer (1) a copy of the CEC pre-certification application for the Facility in the name of Seller that has been filed with the CEC; and (2) evidence reasonably satisfactory to Buyer that Seller continues to maintain Site Control.

Section 2.2 Agreement Term and Delivery Term. This Agreement shall have a delivery term (the “Delivery Term”) commencing on the Commercial Operation Date and ending on December 31, 2045, unless sooner terminated in accordance with the terms of this Agreement.

The term of this Agreement (the “Agreement Term”) shall commence on the Effective Date and shall end upon the expiration of the Delivery Term or earlier termination of this Agreement in accordance with the terms hereof.

Section 2.3 Survivability. The provisions of this Article II, Article VII, Section 14.19 and Section 14.21 shall survive for a period of one year following the termination of this Agreement. The provisions of Article XI shall survive for a period of four (4) years following final payment made by the Buyer hereunder or the expiration or termination date of this Agreement, whichever is later. The provisions of Article V, Article VI, Article VIII and Article IX shall continue in effect after termination to the extent necessary to provide for final billing, adjustments and deliveries related to any period prior to termination of this Agreement.

Section 2.4 Early Termination.
(a) Early Termination by Mutual Agreement. This Agreement may be terminated by mutual written agreement of the Parties.
(b) Early Termination for Default. Upon the occurrence of a Default, the Non-Defaulting Party may terminate this Agreement as set forth in Section 13.3. (c) Early Termination for Force Majeure. This Agreement may be terminated pursuant to Section 14.6(d).
(d) Early Termination for Failure to Obtain CEC Certification. Buyer may, in its sole discretion, terminate this Agreement effective upon notice to Seller pursuant to 108 of 1291
26 Section 3.8 if the Facility is not CEC Certified by the date that is three (3) months following the Commercial Operation Date; provided that if Seller has filed with the CEC for CEC Certification no later than ten (10) days after the Commercial Operation Date, then Buyer’s termination right shall not be effective unless the Facility is not CEC Certified by the date that is six (6) months following the Commercial Operation Date. (e) Early Termination for Exercise of ROFO or ROFR. If Buyer accepts the Right of First Offer or Right of First Refusal for any Facility Asset, at the option of Buyer, this Agreement shall terminate effective upon the consummation of any such sale to Buyer pursuant to Section 14.25.
(f) Termination Due to Market Disruption Event. This Agreement may be terminated as provided in Section 14.26.
(g) Early Termination for Agreement’s failure to comply with Article I of Chapter 11 of Division 2 of Title 20 of the California Code of Regulations.

Notwithstanding the provisions of Section 8.7, in the event that, within sixty (60) days after the CEC’s receipt of a complete compliance filing under Sections 2909 and 2910 of Article 1 of Chapter 11 of Division 2 of Title 20 of the California Code of Regulations, the CEC issues a decision pursuant to Section 2910 thereof finding that this Agreement fails to comply with Article 1 of Chapter 11 of Division 2 of Title 20 of the California Code of Regulations, then this Agreement shall be void, and any and all deliveries of Delivered Energy shall be terminated no later than the effective date of such decision of noncompliance by the CEC. (h) Effect of Termination. Any early termination of this Agreement under this Section 2.4 shall be without prejudice to the rights and remedies of either Party for Defaults occurring prior to such termination.

ARTICLE III

DEVELOPMENT OF THE FACILITY
Section 3.1 In General.
(a) Permitting. Seller, at its expense, shall timely take all steps necessary to obtain and maintain all Permits required to construct, own, maintain or operate the Facility in accordance with the requirements of this Agreement and all applicable Requirements of Law and for the performance of Seller’s obligations hereunder. (b) Project Design. Seller shall determine the proposed location, design, and configuration of the Facility as it deems appropriate, subject to the requirements of this Agreement and the Ancillary Documents and all applicable Requirements of Law, including but not limited to the characteristics and other requirements for the Facility set forth in Appendix B.
(c) Meetings with Governmental Authorities. Seller shall represent the Facility as necessary in all meetings with and proceedings before all Governmental Authorities. 109 of 1291
27 (d) CEQA Exemption. Seller represents and warrants that (1) the Facility is subject to environmental review pursuant to NEPA in connection with the procurement of rightof-way(s) from the U.S. Department of Interior, Bureau of Land management for the construction and installation of certain electrical facilities, (2) pursuant to NEPA, Seller will, or will cause its Affiliates to submit to and complete the NEPA Environmental Assessment with respect to the Facility, and (3) the Facility is statutorily exempt from CEQA pursuant to Title 14, California Code of Regulations, Section 15277. Seller shall have no obligation to sell and Buyer shall have no obligation to purchase any Energy under this Agreement until all of the following occur: (x) the lead agency conducting the review of the Facility as required under NEPA has certified a final environmental impact report (or equivalent environmental document) for the Facility and issued a final approval for the Facility, and Seller has delivered to Buyer a Record of Decision or Decision Record in connection therewith; and (y) the lead agency conducting the review of the Facility as required under the environmental laws of the State of Nevada has certified a final environmental impact report (or equivalent environmental document) for the Facility in compliance with NEPA, and Seller has delivered to Buyer a Record of Decision or Decision Record in connection therewith. (e) Construction and Ownership of the Facility. Seller shall site, develop, finance and construct the Facility. Except as otherwise permitted by this Agreement, the Facility shall be owned by Seller during the Agreement Term. As more fully described in Section 5.1, Seller shall develop, operate and maintain the Facility, at its sole risk and expense, and in compliance with the requirements of this Agreement, all applicable Requirements of Law, Prudent Utility Practices, and applicable manufacturer’s and operator’s specifications and recommended procedures; provided, however, meeting these requirements shall not relieve Seller of its other obligations under this Agreement. Seller shall not sell or otherwise dispose of or create, incur, assume or permit to exist any Lien (other than Permitted Encumbrances) on any portion of the Facility or any other property or assets which are related to the operation, maintenance and use of the Facility without the prior written approval of Buyer. The Facility shall be operated during the Delivery Term by the party listed as the operator on Appendix B or such other Person as Buyer shall approve in the exercise of its reasonable discretion. (f) Site Confirmation. Seller represents and warrants that Seller’s agents and representatives have visited, inspected and are familiar with the Site, in particular its surface physical condition relevant to the obligations of the Seller pursuant to this Agreement, including surface conditions, normal and usual soil conditions, roads, utilities, the presence, if any, of archaeological and cultural (including tribal) artifacts and topography, and solar radiation, air and water quality conditions; that the Seller is familiar with all local and other conditions which may be material to the Seller’s performance of its obligations under this Agreement (including transportation, seasons and climate, access, weather, the presence, if any, of endangered species, handling and storage of materials and equipment and availability and quality of labor and utilities); and that based on the foregoing, the Site constitutes an acceptable and suitable site for the construction and operation of the Facility in accordance herewith. Any failure by Seller to take the actions described in this Section or inspect the physical condition of the Site, including any local or other conditions that may be material to Seller’s performance of its obligation under this Agreement shall not relieve Seller from any responsibility for estimating properly the difficulty and cost of successfully constructing, maintaining or operating the Facility in 110 of 1291
28 accordance with this Agreement or from proceeding to construct, maintain and operate the Facility successfully without any additional expense to Buyer.

Section 3.2 Commercial Operation Notices. Seller shall provide Buyer no fewer than thirty (30) days’ prior written notice of the date on which Seller anticipates achieving the conditions precedent to Commercial Operation of the Facility. Seller shall provide Buyer with an additional notice when Seller believes that all conditions precedent to Commercial Operation of the Facility have been satisfied. Buyer’s Authorized Representative shall in writing either accept or reject this notice in its reasonable discretion within thirty (30) Business Days after receipt of Seller’s notice, and if Buyer’s Authorized Representative rejects the notice, Seller shall promptly correct any defects or deficiencies and resubmit the notice. If Buyer fails to respond within such thirty (30) Business Day period, it shall be deemed to have accepted Seller’s notice. If Buyer rejects the notice, Buyer shall state in detail the reason for its rejection and the Parties shall immediately meet and confer to address Buyer’s concerns. Notwithstanding the foregoing, Buyer shall not be obligated to accept a Commercial Operation Date that is earlier than four (4) months prior to the GCOD unless Seller has provided Buyer with six (6) months’ advance notice of a proposed earlier Commercial Operation Date. The Commercial Operation Date shall occur as of the date upon which the Seller certification of Commercial Operation of the Facility is accepted or deemed accepted by Buyer.

Section 3.3 Other Information. Seller shall provide to Buyer such other information regarding the permitting, engineering, construction or operations, of Seller, its subcontractors or the Facility, financial or otherwise, and other data concerning the Seller, its subcontractors or the Facility as Buyer or Buyer’s Authorized Representative may, from time to time, reasonably request. Until the Commercial Operation Date, Seller shall provide to Buyer monthly written reports describing permitting, development, construction, start-up, and testing activities in the previous month, including any significant developments or delays and Seller’s estimation of the Commercial Operation Date, and anticipated progress and activities for the upcoming month.

Buyer and Buyer’s Authorized Representative shall be permitted to inspect the Facility from time to time upon reasonable notice to Seller and during reasonable business hours.

Section 3.4 Milestone Schedule. Seller has provided a milestone schedule with deadlines for the development of the Facility in Appendix H. Seller shall provide Buyer a monthly report setting forth the status of each milestone, including a description of any deadline that has been missed and any event that could reasonably cause a deadline to be missed. Seller shall achieve each milestone set forth in Appendix H (each, a “Milestone”) by the date specified therefor, subject to day-for-day extensions for delays due to Force Majeure (each such date as so extended (if at all), a “Milestone Date”). Notwithstanding anything in this Agreement to the contrary, Seller shall not be in default or otherwise have any liability under this Agreement for failing to meet a Milestone Date, other than to the extent provided in Sections 3.5, 3.6, 13.1(m), and 13.3(d) of this Agreement.

Section 3.5 Performance Damages. If Seller fails to achieve a Key Milestone by its respective Milestone Date, Seller shall pay liquidated damages to Buyer in an amount equal to the applicable per day amount set forth in Appendix H (“Daily Delay Damages”) for each day intervening between the Milestone Date and the earlier of (i) the date such Key Milestone is achieved, and (ii) the date, if any, on which this Agreement is terminated by Buyer pursuant to 111 of 1291
29 Section 2.4, up to a maximum of (x) the Initial Security Amount in the aggregate for Daily Delay Damages for all Key Milestones other than the Commercial Operation Date (the “Initial Daily Delay Damages Cap”) or (y) the Initial Security Amount in the aggregate for Daily Damages for the Commercial Operation Date (“COD Daily Delay Damages Cap”); provided, however, that if Seller subsequently achieves Commercial Operation by the Guaranteed Commercial Operation Date, then Buyer will promptly refund to Seller the Daily Delay Damages less any actual damages incurred by Buyer as a result of Seller’s failure to timely achieve a Key Milestone. The Parties agree that (x) it is impractical or extremely difficult to determine actual damages to which Buyer would be entitled in the foregoing circumstance, and (y) the liquidated damages provided for in this subsection are a fair and reasonable calculation of actual damages to Buyer and are not a penalty in such a circumstance. If more than one Key Milestone is missed on any given day, then Seller shall pay to Buyer the aggregate amount of such Daily Delay Damages for each missed Key Milestones. Buyer may draw from the Development Security the amount of any such Daily Delay Damages due and owing to Buyer. Notwithstanding anything to the contrary set forth in this Agreement, in no event shall the Commercial Operation Date occur later than December 31, 2022 (the “Outside COD”) and the failure to achieve the Commercial Operation Date by the Outside COD shall be an immediate Default by Seller, not subject to extension or cure of any kind; provided that Seller’s liability for such Default shall be limited to damages not to exceed three times the Initial Security Amount in the aggregate minus all Daily Delay Damages paid by Seller (the “Outside COD Damages Cap”). Except as set forth herein, the payment of Daily Delay Damages shall not limit Buyer’s right to (i) exercise any right or remedy available under this Agreement or at law or in equity for any other breach or default occurring concurrently with, before, or after Seller’s delay in achieving the applicable Milestone by the Milestone Date therefor, (ii) recover any damages not directly attributable to such delay or to pursue any indemnity claims in accordance with this Agreement, or (iii) terminate this Agreement pursuant to Section 2.4.

Section 3.6 Remedial Action Plan. In addition to the payment of Daily Delay Damages in accordance with Section 3.5 for failing to achieve a Milestone by the applicable Milestone Date, if Seller fails to achieve any Milestone by the Milestone Date therefor (or if Seller anticipates that it will not achieve a Milestone by the applicable Milestone Date), Seller shall immediately notify Buyer of such failure and, no more than ten (10) days following the failure to achieve such Milestone (or the date upon which Seller anticipates such a failure will occur), provide Buyer with a written action plan detailing how Seller will cure such failure (such plan, in the form approved by Buyer in accordance with this Section, a “Remedial Action Plan”). The Remedial Action Plan shall specify in reasonable detail Seller’s analysis of the causes of the missed Milestone Date (or anticipated missed Milestone Date), the commercially reasonable actions that Seller plans to take to correct such underperformance and to ensure that all future Milestones, including the Guaranteed Commercial Operation Date, will be achieved, and the time needed to complete such corrective actions. Buyer shall approve or reject Seller’s proposed Remedial Action Plan in its reasonable discretion within ten (10) days of receipt thereof. If Buyer rejects a proposed Remedial Action Plan, Seller shall explain the reasons for such rejection and identify the changes necessary for Buyer to approve such plan. Seller shall thereafter revise the Remedial Action Plan to incorporate such changes and re-submit it to Buyer for Buyer’s approval within ten (10) days after receipt of Buyer’s rejection. Seller shall complete all corrective action pursuant to the provisions of any Remedial Action Plan. Seller may (a) supplement the Remedial Action Plan, as may be reasonably required, or (b) provide Buyer with written notice of any deviations from the approved Remedial Action Plan; provided that in the case of (a) or (b), any supplements to, or deviations 112 of 1291
30 from, the Remedial Action Plan must be reasonably acceptable to Buyer. Seller shall provide additional information or documentation related to the missed Milestone Date and Remedial Action Plan related thereto as Buyer may from time to time reasonably request.

Section 3.7 Decommissioning and Other Costs. Except to the extent that Buyer purchases any portion of the Facility Assets in connection with Buyer’s exercise of its Right of First Offer or Right of First Refusal, Buyer shall not be responsible for any cost of decommissioning or demolition of the Facility Assets or any environmental or other liability associated with the decommissioning or demolition of the Facility Assets without regard to the timing or cause of the decommissioning or demolition of the Facility Assets.

Section 3.8 CEC Certification. Promptly, but in no event more than ten (10) days following the Commercial Operation Date, Seller shall file with the CEC all materials and documents required to demonstrate that the Facility is a geothermal electric energy generating facility entitled to be CEC Certified and shall promptly respond to any inquiries from the CEC related thereto. Seller shall promptly provide Buyer with copies of all submittals to the CEC and other correspondence between Seller and the CEC.

ARTICLE IV

OPERATION AND MAINTENANCE OF THE FACILITY
Section 4.1 Compliance with Electrical Service Requirements. Seller shall, at its sole expense, operate and maintain, or cause a Qualified Operator to operate and maintain, the Facility (i) in accordance with Prudent Utility Practices, the requirements of this Agreement, all applicable Requirements of Law and the requirements of applicable manufacturers’ and operators’ specifications, using commercially reasonable efforts to comply with any published recommendations of the manufacturers and suppliers of the major components of the Facility, (ii) with due regard for the safety, security and reliability of the interconnection facilities and the Transmission System and (iii) in a manner that is reasonably likely to maximize the output of the Facility and result in a useful life for the Facility through the end of the Delivery Term.

Section 4.2 General Operational Requirements.

In addition to the requirements set forth in Section 4.1 and elsewhere in this Agreement, Seller shall or shall cause its Qualified Operator to, at all times:
(a) Employ qualified and trained personnel for managing, operating and maintaining the Facility and for coordinating with Buyer and Buyer’s Agent. Seller shall ensure that necessary personnel are available on-site or on-call twenty-four (24) hours per day during the Delivery Term;
(b) Operate and maintain the Facility with due regard for the safety, security and reliability of the interconnected facilities and Transmission System; and (c) Comply with operating and maintenance standards recommended by, and required by, the Facility’s equipment suppliers.

Section 4.3 Operation and Maintenance Plan after Commercial Operation. 113 of 1291
31 Following the Commercial Operation Date, Seller shall:
(a) Devise, implement and maintain, or cause the Qualified Operator to devise, implement and maintain, a plan of inspection, maintenance and repair for the Facility and the components thereof in order to maintain such equipment in accordance with Prudent Utility Practices (the “Operation and Maintenance Plan”), and shall keep records with respect to inspections, maintenance and repairs thereto. The aforementioned plan and all records of such activities shall be available for inspection by Buyer and Buyer’s Authorized Representative during Seller’s regular business hours upon reasonable notice. (b) Provide to Buyer, on a monthly basis, any regularly prepared operation and maintenance status reports of the Facility provided to WECC or Facility Lenders pursuant to a Financing Agreement.
(c) In addition to the other required and preventive maintenance actions contained in this Agreement, provide notification to Buyer of its actions to: (i) conduct regular visual equipment inspections and log significant parameters; (ii) identify all preventive maintenance requirements for the following calendar year, including the performance of maintenance in accordance with Section 4.4(k); (iii) conduct periodic maintenance of various equipment, including a report about any findings, and provide a report about any findings to Buyer; (iv) conduct periodic Q/A and Q/C activities and inspections in accordance with Appendix G, including a report thereof; (v) hire subcontractors, as applicable, to meet the Facility’s maintenance, betterment and improvement needs; and (vi) schedule and assign routine maintenance during operations, planned outages, as well as maintenance that can be conducted during a Forced Outage, or during an outage occurring as a result of curtailment notifications.

Section 4.4 Forecasting and Scheduling of Energy and Scheduled Outages. (a) The Parties agree to the following scheduling procedures: (i) Seller shall notify Buyer and Buyer’s Agent on a forward (monthly, weekly and day ahead) basis, as provided in this Section 4.4 and, as needed, in real time, of any reduction in availability of the Facility that exceeds one (1) MW; (ii) Seller shall make available to Buyer and Buyer’s Agent, as a graphical display, the forecasted and actual output for the Facility in increments not to exceed fifteen (15) minute averages via a web portal and secure client login, including secure file transfer protocol (“FTP”); (iii) Seller shall make available to Buyer and Buyer’s Agent realtime data of actual output, which shall be automatically telemetered to Buyer’s or Buyer’s Agent’s supervisory control and data acquisition (“SCADA”) system; and (iv) either Buyer’s Authorized Representative, Buyer’s Agent or Buyer’s Transmission Provider shall have the right, in accordance with Section 6.9, to contact Seller and require that the Facility be curtailed or to directly curtail the Facility (collectively, the “Scheduling Procedures”), which may be modified, from time to time, by written agreement between the Seller’s Authorized Representative and, with respect to Buyer, Buyer’s Authorized Representative or Buyer’s Agent, in order to comply with all applicable requirements, including those of the Transmission Provider, WECC or any balancing authority involved in the Scheduling of Energy under this Agreement. The Authorized Representatives shall promptly cooperate with respect to any reasonably necessary and appropriate modifications to Scheduling Procedures. 114 of 1291
32 (b) Seller or Seller’s designee shall be responsible for providing a forecast of Delivered Energy during the Delivery Term consistent with the Scheduling Procedures, as may be updated from time to time in accordance with Section 4.4(a). All generation Scheduling and Transmission Services shall be performed in accordance with the applicable NERC and WECC operating policies, criteria and any other applicable guidelines. This may include, but not be limited to, dynamic adjustments to e-tags in order to reflect the previous hour’s metered Energy output. The procedures shall be developed so as to maximize the amount of Energy that is RPS Compliant and EPS Compliant that may be delivered by Seller under this Agreement consistent with the requirements of the Transmission Provider, WECC and any balancing authority involved in the Scheduling of Energy under this Agreement. The Authorized Representatives shall promptly cooperate with respect to any reasonably necessary and appropriate modifications to such forecasting or scheduling procedures. The Parties acknowledge that, because Scheduling takes place in advance of generation, there may be deviations between the amount of Energy generated by a Facility and the amount of Energy Scheduled by Buyer and Seller for delivery at the Point of Delivery. Seller shall fulfill any contractual, metering and interconnection requirements so as to be able to deliver Energy to the Point of Delivery. (c) No later than forty-five (45) days before the beginning of each Contract Year, Seller or Seller’s designee shall provide, or cause to be provided, a non-binding forecast of each month’s average day deliveries of Energy, by hour, for the following eighteen (18) months.
(d) Ten (10) Business Days before the beginning of each month during the Delivery Term, Seller or Seller’s designee shall provide, or cause to be provided, a non-binding forecast of each day’s average deliveries of Energy, by hour, for the following month. (e) By 5:00 a.m. on the WECC pre-scheduling day immediately preceding the date of delivery of Energy during the Delivery Term, Seller or Seller’s designee shall provide Buyer or Buyer’s Agent with a copy of a non-binding hourly forecast of deliveries of Energy for each hour of the next date of delivery of Energy (the “Day Ahead Schedule”). If the WECC pre-scheduling day pertains to multiple dates of delivery, then this requirement shall apply to each of those dates. After 4:30 a.m. on such WECC pre-scheduling day, subject to Section

4.4(k), Seller or Seller’s designee may contact Buyer or Buyer’s Agent by telephone to provide any Scheduling updates or changes and the reason for such updates or changes. Acceptable reasons for such updates shall be with respect to current conditions (other than commercial considerations), including weather and applicable balancing authority rules. (f) By 12:00 p.m. on the Business Day prior to each WECC pre-scheduling day during the Delivery Term, Seller shall provide Buyer, Buyer’s Authorized Representative, Buyer’s Agent, Buyer’s real-time operators, Buyer’s Scheduler and any other designated Scheduling representative of Buyer, via email, day-ahead pre-schedules for each of the succeeding twenty-four (24) hours in the form of an Excel spreadsheet. In order to allow Buyer or Buyer’s Agent to make schedule changes in conformity with applicable scheduling deadlines, Seller shall notify Buyer or Buyer’s Agent via telephone of any hourly changes due to a change in unit availability or an outage no later than one-hundred five (105) minutes prior to the start of such Scheduling hour.
115 of 1291
33 (g) Commencing on the first date on which Startup and Test Energy is received from the Facility, and continuing throughout the Delivery Term, Seller shall provide to Buyer and Buyer’s Agent the following data on a real-time basis:
(1) Read only access to meteorological and pyranometer measurements, the parameters of which are provided in Appendix O, MW capacity, and any other Facility availability information;
(2) Read only access to energy output information collected by the SCADA system for the Facility; provided that if Buyer or Buyer’s Agent is unable to access the Facility’s SCADA system, then upon written request from Buyer or Buyer’s Agent, Seller shall provide energy output information and pyranometer and meteorological measurements to Buyer and Buyer’s Agent in four (4) second intervals in the form of a one (1) hour flat file to Buyer and Buyer’s Agent through a FTP system with an email back up for each flat file submittal. Seller shall store such information for up to three (3) months after delivery thereof to Buyer and Buyer’s Agent; and
(3) Unless the Transmission Provider at the Facility’s Point of Delivery requires otherwise, read only access to all Electric Metering Devices (other than meteorological data) installed, owned and operated by Seller at the Project Substation that are used to measure Delivered Energy.
(h) Commencing on the first date on which Startup and Test Energy is received from the Facility, and continuing throughout the Delivery Term, Seller shall provide to Buyer NERC, WECC and FERC compliance reports regarding the Facility when they are issued.
(i) During the Delivery Term, if Seller or Seller or Seller’s designee becomes aware of changes to the Day Ahead Schedule on the actual date of delivery of Energy due to current conditions, including weather or environmental conditions, an unscheduled outage or a scheduling change imposed by Buyer or a Transmission Provider that results in a change to the Facility’s deliveries (whether in part or in whole), Seller or Seller’s designee shall immediately notify Buyer of any and all changes to the Day Ahead Schedule and provide a revised schedule as soon as possible in an electronic format, either via an internet website accessible to Buyer, Buyer’s Authorized Representative, Buyer’s Agent, Buyer’s real-time operators, Buyer’s Scheduler and any other designated Scheduling representative of Buyer or via email in the form of an excel spreadsheet (or any combination thereof); provided that Seller shall deliver any revised Day Ahead Schedule which reflects an increase in forecasted delivery of Energy in any hour in such Day Ahead Schedule no later than two (2) hours prior to the first updated hour.
(j) Seller shall provide forecasts and data required under this Section 4.4 in a format mutually agreeable to Seller and Buyer, which may include the following protocols: (i) Distributed Network Protocol (“DNP”) 3.0 TCP/IP for primary communications between the Facility and Buyer, (ii) DNP 3.0 Serial for backup communication between the Facility and Buyer, and (iii) DNP 3.0 for communication between the Participating Member’s Distributed 116 of 1291
34 Control Systems and Intelligent Electronic Devices (such as SEL Relays, ION Meters and Areva Relays).
(k) Buyer and Seller shall cooperate to minimize Scheduled Outages during certain consecutive or nonconsecutive weeks of each Contract Year (not to exceed twelve (12) weeks per Contract Year) specified by Buyer’s Authorized Representative (the “Major Maintenance Blockout”), but in accordance with Prudent Utility Practices. No later than one hundred twenty (120) days prior to the Commercial Operation Date and the commencement of each Contract Year thereafter, Buyer’s Authorized Representative shall provide Seller with Buyer’s specified Major Maintenance Blockout. In the absence of such updated notification, the most recent previous Major Maintenance Blockout notification shall apply. Seller shall attempt to minimize its Scheduled Outages during the Major Maintenance Blockout consistent with Prudent Utility Practices. No later than sixty (60) days prior to the Commercial Operation Date, and the commencement of each Contract Year thereafter, Seller shall provide Buyer or Buyer’s Agent with its non-binding written projection of all Scheduled Outages for the succeeding three (3) years (the “Scheduled Outage Projection”) reflecting a minimized schedule of scheduled maintenance during the Major Maintenance Blockout. In addition, Seller shall use commercially reasonable efforts to accommodate Buyer’s reasonable maintenance scheduling requests consistent with Prudent Utility Practices. The Scheduled Outage Projection shall include information concerning all projected Scheduled Outages during such period, including (i) the anticipated start and end dates of each Scheduled Outage; (ii) a description of the maintenance or repair work to be performed during the Scheduled Outage; and (iii) the anticipated MW of operational capacity, if any, during the Scheduled Outage. Seller shall notify Buyer or Buyer’s Agent of any change in the Scheduled Outage Projection as soon as practicable, but in no event later than thirty (30) days prior to the originally scheduled date of the Scheduled Outage. Seller shall use commercially reasonable efforts to accommodate reasonable requests of Buyer or Buyer’s Authorized Representative with respect to the timing of Scheduled Outages, and Seller shall, to the extent feasible and consistent with Prudent Utility Practices, arrange for Scheduled Outages to occur between October 1 and May 1 of each year and coincident with planned transmission outages, but not to overlap with the Major Maintenance Blockout. In the event of a System Emergency, Seller shall make all reasonable efforts to reschedule any Scheduled Outage previously scheduled so that it occurs during the System Emergency.
(l) In the event of a Forced Outage affecting at least ten percent (10%) of the Nominal Capacity Net of Parasitic Load of the Facility, to the extent practicable, Seller shall notify Buyer or Buyer’s Agent within two (2) hours of the Forced Outage and provide detailed information concerning the Forced Outage, including (i) the start and anticipated end dates of the Forced Outage; (ii) a description of the cause of the Forced Outage; (iii) a description of the maintenance or repair work to be performed during the Forced Outage; and (iv) the anticipated MW of operational capacity, if any, during the Forced Outage. Seller shall take all reasonable measures and exercise commercially reasonable efforts to avoid Forced Outages and to limit the duration and extent of any such outages.
(m) Consistent with Prudent Utility Practices, Seller shall at all times maintain the ability to continue to provide real-time data to Buyer, to implement curtailments, 117 of 1291
35 and to adjust curtailment amounts in real-time in the event that Seller’s primary communications means become unavailable at any point in time.

Section 4.5 Dynamic Scheduling. If, during the Agreement Term, dynamic scheduling or pseudo-tie scheduling becomes available on a commercially reasonable basis that provides for fractional MWh deliveries, the Parties will (a) negotiate in good faith modifications to this Agreement that require Seller to use commercially reasonable efforts to pursue such dynamic scheduling or pseudo-tie arrangements with the applicable Reliability Authorities for the scheduling and delivery of Facility Energy to the Point of Delivery and (b) incorporate such arrangements into this Agreement through an amendment in accordance with Section 14.11.

Section 4.6 Reporting and Information. Commencing on the date Startup and Test Energy is first delivered to Buyer, Seller shall provide to Buyer (a) Monthly Reports of the operation of the Facility on or before the fifteenth (15th) day of each month, which shall include (i) a performance summary of the Contract Month- and Contract Year-to-date MWh delivery of Facility Energy, capacity factor, availability (including actual availability vs. expected availability), average illumination, weather for the month and reasons for downtimes, (ii) reports of expected generation indicators of when a Shortfall may occur; (iii) any regularly prepared operations and maintenance status reports of the Facility provided to WECC or any Facility Lenders, (iv) reports regarding the ongoing operations of the Facility during such month, which set forth the status of the operation of the Facility or any component thereof, including any equipment or other operational or maintenance failures, defects or other issues and any repairs, replacements or other remediation provided or to be provided therefor, (v) descriptions of weather, reasons for any downtime, maintenance or repairs, and curtailment periods during the applicable month, and (vi) a safety and environmental summary, and (b) such other information regarding the permitting, engineering, construction or operations of the Facility as Buyer may, from time to time, reasonably request.

ARTICLE V

COMPLIANCE DURING CONSTRUCTION AND OPERATION PERIOD
Section 5.1 In General.
(a) The Facility. Seller shall perform, or cause to be performed, all engineering, design, development and construction of the Facility in a good and workmanlike manner and in accordance with applicable standards, Prudent Utility Practices, all applicable Requirements of Law, Seller’s Quality Assurance Program, the Milestones and all other requirements of this Agreement. Seller warrants and guarantees that throughout the Delivery Term: (i) the Facility, its engineering, design and construction, its components and related work, shall be free from material defects caused by errors or omissions in design, engineering and construction or repaired as provided herein, (ii) the Facility will be free and clear of all Liens other than Permitted Encumbrances, and (iii) the Facility will comply in all respects with the requirements of this Agreement and all applicable Requirements of Law. Seller also warrants and guarantees that throughout the Agreement Term it will monitor the operation and maintenance of the Facility and that said operation and maintenance is, and will be, in full compliance with all applicable standards, Prudent Utility Practices, Requirements of Law, Seller’s Quality Assurance Program and other provisions of this Agreement. Without limiting 118 of 1291
36 the foregoing, Seller shall promptly repair or replace, consistent with Prudent Utility Practices, any component of the Facility that does not comply with the foregoing warranties or guarantees.

Seller shall at all times exercise commercially reasonable efforts to undertake all recommended or required updates or modifications to the Facility, its equipment and materials, including procedures, programming and software in a timely manner. Seller shall, at its expense, maintain throughout the Agreement Term an inventory of spare parts for the Facility in a quantity that is consistent with applicable manufacturers’ recommendations and Prudent Utility Practices. (b) Buyer’s Right to Monitor in General. Buyer shall have the right upon prior written notice to Seller, and Seller shall permit Buyer and its representatives, advisors, engineers and consultants to observe, inspect and monitor all operations and activities at the Site, including the performance of the contractor(s) under the construction contract(s) pertaining to the Facility, the design, engineering, procurement and installation of the equipment, start up and testing and commercial operation; provided, however, that Buyer shall comply with all of Seller’s applicable safety and health rules and requirements and shall not unreasonably interfere with or disrupt the activities of Seller.
(c) Startup and Testing. Prior to the Commercial Operation Date and as a condition precedent to the achievement of the Commercial Operation Date, Buyer shall have the right, upon prior written notice to Seller, to (and Seller’s engineering, procurement and construction subcontracts shall provide for Buyer’s right to):
(1) review and monitor the Seller’s and Seller’s subcontractors’ performance and achievement of all initial performance tests and all other tests required under the Facility construction contracts that must be performed in order to achieve completion, with respect to which the construction contracts shall provide that at least ten (10) Business Days before such tests begin the Seller or Seller’s subcontractors shall deliver to Buyer a schedule for the performance of such tests; (2) be present to witness such initial performance tests and review the results thereof; and
(3) perform such detailed examinations, inspections, quality surveillance and tests as, in the judgment of Buyer or Buyer’s Authorized Representative, are appropriate and advisable to determine that the components of the Facility have been installed in accordance with this Agreement and the Facility construction contracts, all applicable standards, Prudent Utility Practices, Requirements of Law, Seller’s Quality Assurance Program and the Milestones.

Buyer’s rights under this Section 5.1(c) are subject to the following: Buyer shall comply with all of Seller’s applicable safety and health rules and requirements and shall not unreasonably interfere with or disrupt the activities of Seller.
(d) Contract Provisions. The Seller shall cause to be included in the Facility construction contract(s) provisions, in form and substance satisfactory to Buyer’s Authorized Representative, whereby the contractor(s) and the Seller:
119 of 1291
37 (1) grant to the Buyer rights of access to the Facility at all reasonable times upon prior written notice to Seller and the contractor(s) (but subject to reasonable safety precautions) and to inspect, make notes about and copy all documents, drawings, plans, specifications, permits, test results and information as the Buyer or Buyer’s Authorized Representative may reasonably request;
(2) make the personnel of, and consultants to, the contractor(s) and the Seller available to the Buyer and its agents, representatives and consultants at reasonable times and with prior notice for purposes of discussing any aspect of the Facility or the development, engineering, construction, installation, testing or performance thereof; (3) shall construct and repair, as applicable, the Facility in a manner that is in full compliance with all applicable Requirements of Law, Seller’s Quality Assurance Program, the Milestones and all other requirements of this Agreement; and (4) otherwise cooperate in all reasonable respects with the Buyer and its Authorized Representatives, advisors, engineers and consultants in order to allow the Buyer to exercise its rights under this Section 5.1.

Buyer’s rights under this Section 5.1(d) are subject to the following: Buyer shall comply with all of Seller’s applicable safety and health rules and requirements and shall not unreasonably interfere with or disrupt the activities of Seller.

Section 5.2 Compliance with Standards. Seller shall cause the Facility and all parts thereof to be designed, constructed, tested, operated and maintained to meet (i) all of the requirements of this Agreement, (ii) all applicable standards and requirements of the latest revision of standards or requirements of the ASTM, ASME, ASCE, AWS, EPA, EEI, IEEE, ISA, National Electrical Code, National Electric Safety Code, OSHA, Cal-OSHA, Uniform Building Code, Uniform Plumbing Code, Underwriters Laboratory Standards and the applicable local County Fire Department Standards of the applicable county, National Fire Protection Agency standards and requirements, or their successors, (iii) all FERC-approved NERC Reliability Standards, (iv) any other codes, standards and operations and maintenance requirements applicable to the services, equipment, and work as generally shown in this Agreement and (v) all applicable Requirements of Law not specifically mentioned in this Section 5.2. If Seller contracts with another Person to design, construct, test, operate or maintain the Facility, Seller shall cause such contract to provide that such Person shall design, construct, test, operate or maintain, as applicable, the Facility in compliance with the laws, regulations, standards and other requirements identified in clauses (i) through (v) of the prior sentence.

Section 5.3 Quality Assurance Program. As a condition of, and no later than the occurrence of the Commercial Operation Date, Seller shall develop and initiate a written quality assurance policy (“Quality Assurance Program”) attached hereto as Appendix G. Seller shall maintain and comply with said Quality Assurance Program, and Seller shall cause all work performed on or in connection with the Facility to comply with said Quality Assurance Program. 120 of 1291
38 Section 5.4 Security Provided by Seller.
(a) Seller shall, by no later than ten (10) days following the Effective Date, execute and deliver to Buyer an Acceptable Form of Performance Assurance in the Initial Security Amount, which Acceptable Form of Performance Assurance shall be subject to replenishment as set forth in Section 5.4(d) below and shall guarantee Seller’s obligations under this Agreement prior to the Commercial Operation Date (the “Development Security”). Seller shall maintain the Development Security until Seller executes and delivers the Performance Security pursuant to Section 5.4(b) below, or until the requirement to maintain the Development Security ceases under Section 5.4(c) below.
(b) Seller shall, by the Commercial Operation Date, execute, deliver to Buyer and maintain an Acceptable Form of Performance Assurance in the amount of Three Million Three Hundred Fifty Thousand Nine Hundred Twenty Five Dollars ($3,350,925), which Acceptable Form of Performance Assurance shall guarantee Seller’s obligations under this Agreement from and after the Commercial Operation Date (the “Performance Security”).

Seller may elect to use any amounts remaining under its Development Security as a component of the Performance Security.
(c) If (i) upon the Commercial Operation Date, no damages or other amounts are due and owing to Buyer under this Agreement, and Seller does not elect to use the Development Security as a component of the Performance Security, or (ii) this Agreement terminates prior to the occurrence of the Commercial Operation Date while the Development Security is outstanding and no damages or other amounts are due and owing to Buyer under this Agreement, then Seller is no longer required to maintain the Development Security; provided that Buyer may draw on such Development Security in accordance with clause (d). (d) Buyer may draw on the Performance Assurance for any undisputed amount owed to Buyer that is not timely paid due to Seller’s obligations under this Agreement, including any liquidated damages, Shortfall Damages, and Daily Delay Damages and any such draw shall be deemed a cure for such non-payment to the extent of the draw. Promptly, and in no event more than five (5) Business Days following any draw by Buyer on the Performance Assurance, Seller shall replenish the amount drawn on the Performance Assurance such that the amount of the Performance Assurance is restored to the full amount set forth in Section 5.4(a) or Section 5.4(b), as applicable.
(e) Seller shall, from time to time as requested by Buyer or Buyer’s Authorized Representative, execute, acknowledge, record, register, deliver and file all such notices, statements, instruments and other documents as may be necessary or advisable to render fully valid, perfected and enforceable under all applicable law the Performance Assurance contemplated by this Agreement and the Ancillary Documents and the rights, Liens and priorities of Buyer with respect to such credit support. (f) Seller shall notify Buyer of the occurrence of a Downgrade Event with respect to an issuer of Performance Assurance, which notice shall be given by Seller within five (5) Business Days of obtaining knowledge of the occurrence of such event. If, at any time, (i) there shall occur a Downgrade Event with respect to an issuer of Performance Assurance or (ii) 121 of 1291
39 Buyer elects to terminate any relationship with such issuer pursuant to directives from any Governmental Authorities applicable to Buyer or the Participating Member, then Buyer may require that Seller replace the Performance Assurance from the issuer that has suffered the Downgrade Event or with whom the relationship has been terminated by Buyer with Performance Assurance from a Qualified Issuer within ten (10) Business Days of notice from Buyer to Seller requesting such replacement Performance Assurance. (g) Notwithstanding the other provisions of this Agreement, the Performance Assurance contemplated by this Agreement: (a) constitutes security for, but is not a limitation of, Seller’s obligations under this Agreement, and (b) shall not be Buyer’s exclusive remedy against Seller for the Seller’s failure to perform in accordance with this Agreement.

Section 5.5 Effect of Review by Buyer. Any review by Buyer of the design, construction, engineering, operation or maintenance of the Facility, or witness of testing hereunder, is solely for the information of Buyer. Buyer shall have no obligation to share the results of any such review or observation with Seller, nor shall any such review or observation or the results thereof (whether or not the results are shared with Seller), nor any failure to conduct any such review or observation of testing, relieve Seller from any of its obligations under this Agreement. By making any such review or observation, Buyer makes no representation as to the economic and technical feasibility, operational capability or reliability of the Facility. Seller shall in no way represent to any third party that any such review by Buyer of the Facility, including any review of the design, construction, operation or maintenance of the Facility by Buyer, or observation of testing is a representation by Buyer as to the economic and technical feasibility, operational capability or reliability of the Facility. Seller is solely responsible for the economic and technical feasibility, operational capability and reliability thereof.

ARTICLE VI

PURCHASE AND SALE OF POWER
Section 6.1 Purchases by Buyer.
(a) On and after the Commercial Operation Date and continuing for the Delivery Term, Seller shall sell and deliver, and Buyer shall receive and purchase, all Delivered Energy for the price set forth in paragraph 3 (for Excess Energy) or paragraph 2 (for other Delivered Energy and all Makeup Energy) of Appendix A, except as described in Section 6.9 or Section 8.7; provided, that (i) during the Delivery Term, Seller shall not deliver or invoice Buyer for, and Buyer shall not purchase or receive, Excess Monthly Generation in an amount greater than fifteen percent (15%) of the sum of the Expected Annual Generation for all Contract Years, and (ii) subject to the cap on Excess Monthly Generation in clause (i), the price for any Excess Monthly Generation shall be the price set forth in paragraph 4 of Appendix A. If at any point during the Delivery Term, Seller becomes aware that it has delivered or it will likely deliver Excess Monthly Generation in an amount greater than fifteen percent (15%) of the sum of the Expected Annual Generation for all Contract Years, then until the end of the Delivery Term, Seller shall take action to reduce or eliminate Excess Monthly Generation such that the fifteen percent (15%) threshold will not be exceeded, which action may include: (1) Seller rounding down the quantity of Facility Energy Scheduled and delivered to Buyer during each hour to the nearest whole MWh increment, in which case the fractional MWh difference 122 of 1291
40 between the nearest whole MWh increment of Facility Energy Scheduled and delivered to Buyer and the actual quantity of Facility Energy shall (A) not be included in clause (b) of the definition of “Excess Monthly Generation” for any purpose hereunder, and (B) count as Net Delivered Energy solely for the purpose of Seller’s obligations in Sections 9.1, 9.2, and 13.1(n), and Seller will be entitled to sell such fractional MWh difference of Facility Energy into the imbalance market as set forth in Section 6.8, or (2) the implementation of dynamic scheduling or pseudo-tie scheduling if and to the extent available pursuant to the terms of Section 4.5. (b) Notwithstanding the foregoing, (i) with respect to any Contract Month, Buyer has no obligation to receive or purchase Excess Energy in excess of the greater of (x) an amount equal to the Guaranteed Monthly Delivered Energy for such Contract Month plus the amount of any outstanding Shortfall Energy from the prior two (2) months or (y) one hundred twenty percent (120%) of the Expected Monthly Generation for such Contract Month, and (ii) in no event shall Buyer be required to receive or purchase at the Point of Delivery a quantity of Delivered Energy in any hour that exceeds the quantity of Delivered Energy that the Facility is capable of producing when operating at the Nominal Nameplate Capacity, unless Buyer agrees otherwise in its sole discretion.
(c) For any month during which the WREGIS Withhold Amount provisions of Section 11.4 are not applicable or Buyer otherwise elects not to withhold the WREGIS Withhold Amount, a “WREGIS Certificate Deficit” means any deficit or shortfall in WREGIS Certificates delivered to Buyer for such month as compared to the Delivered Energy less any Excess Actual Generation, if applicable, for the same month (“Deficient Month”) (excluding any deficits or shortfalls caused by an error or omission of Buyer). If any WREGIS Certificate Deficit is caused, and such WREGIS Certificate Deficit is not caused by an error omission of Buyer, then Buyer will be entitled to a credit in the next monthly invoice after the Deficient Month equal to fifteen dollars ($15) per MWh for each WREGIS Certificate Deficit.

Section 6.2 Startup and Test Energy. During the period prior to the start of the Delivery Term, no later than 12:00 p.m. three days before the start of each week, Seller shall send a non-binding hourly forecast of deliveries of Startup and Test Energy for the next week of delivery. Buyer shall notify Seller in writing by 5:00 p.m. on the date that is three days before the start of each week whether it will accept and purchase such Startup and Test Energy. If Buyer timely provides such notice to Seller that it will accept and purchase such Startup and Test Energy, then for such week, Seller shall sell and deliver, and Buyer shall receive and purchase, all Startup and Test Energy for the price set forth in paragraph 1 of Appendix A. If Buyer provides notice that it will not accept and purchase such Startup and Test Energy or Buyer otherwise does not timely respond to Seller as provided herein, then Seller shall have the right to sell such Startup and Test Energy to any Persons and retain the proceeds related thereto.

Section 6.3 Point of Delivery. Seller shall deliver all Delivered Energy to Buyer at the Point of Delivery. Buyer, or its designee, shall receive all such Delivered Energy from Seller under this Agreement at the Point of Delivery.

Section 6.4 Expected Monthly Generation Adjustment.
123 of 1291
41 (a) During the Expected Monthly Generation Adjustment Period, Seller shall have the option to make one adjustment to the Expected Monthly Generation applicable to each month of a Contract Year; provided that (i) such adjustment shall not result in a change of more than 7.5% in the Expected Annual Generation, (ii) such adjustment shall result in the Expected Monthly Generation for each month in a Contract Year specified in Appendix Q changing by the same percentage (i.e., the percentage change to the Expected Annual Generation shall be equal to the percentage change to the Expected Monthly Generation of each month in a Contract Year), (iii) if Seller elects to make such an adjustment, the Guaranteed Monthly Delivered Energy of each month in a Contract Year specified on Appendix Q shall be adjusted by the same percentage applied to adjust each Expected Monthly Generation, and (iv) Seller shall deliver notice of such adjustment in accordance with the following sentence within the one year period following the Commercial Operation Date, and such adjustment (if any) will be effected by the first day of the first full month following the date that is ninety (90) days after Seller provides such notice (the “Expected Monthly Generation Adjustment Period”). If Seller elects to make an adjustment under this Section 6.4(a), Seller shall give Buyer ninety (90) days prior written notice with respect to such adjustment, including (x) the percentage change that will be applied (subject to the prior sentence) and (y) an updated version of the table in Appendix Q, specifying the Expected Monthly Generation for each month in a Contract Year, the Guaranteed Monthly Delivered Energy for each such month, and the Expected Annual Generation following application of Seller’s adjustment subject to the terms of this Section 6.4(a). Upon the first day of the first full month after the end of the ninety (90) day period following delivery of notice of an adjustment, the updated version of Appendix Q delivered by Seller in connection with such notice shall hereby replace the table in Appendix Q so long as Seller has complied with this Section 6.4(a).
(b) During the Extended Expected Monthly Generation Adjustment Period, Seller shall have the option to make one adjustment to increase the Expected Monthly Generation applicable to each month of a Contract Year; provided that (i) such adjustment shall not result in an increase to the Expected Monthly Generation above the Expected Monthly Generation amounts included in Appendix Q of the Original Agreement, (ii) such adjustment shall result in the Expected Monthly Generation for each month in a Contract Year specified in Appendix Q changing by the same percentage (i.e., the percentage change to the Expected Annual Generation shall be equal to the percentage change to the Expected Monthly Generation of each month in a Contract Year), (iii) if Seller elects to make such an adjustment, the Guaranteed Monthly Delivered Energy of each month in a Contract Year specified on Appendix Q shall be adjusted by the same percentage applied to adjust each Expected Monthly Generation, and (iv) Seller shall deliver notice of such adjustment in accordance with the following sentence within the eighteen (18) months after the Amendment Date, and such adjustment (if any) will be effected by the first day of the first full month following the date that is ninety (90) days after Seller provides such notice (the “Extended Expected Monthly Generation Adjustment Period”). If Seller elects to make an adjustment under this Section 6.4(b), Seller shall give Buyer ninety (90) days prior written notice with respect to such adjustment, including (x) the percentage change that will be applied (subject to the prior sentence) and (y) an updated version of the table in Appendix Q, specifying the Expected Monthly Generation for each month in a Contract Year, the Guaranteed Monthly Delivered Energy for each such month, and the Expected Annual Generation following application of Seller’s adjustment subject to the terms of this Section 6.4(b). Upon the first day of the first full 124 of 1291
42 month after the end of the ninety (90) day period following delivery of notice of an adjustment, the updated version of Appendix Q delivered by Seller in connection with such notice shall hereby replace the table in Appendix Q so long as Seller has complied with this Section 6.4(b).

Section 6.5 Buyer’s Failure. Unless excused by Force Majeure, a curtailment required by Buyer under Section 6.9, or Seller’s failure to perform, if Buyer fails to take the actions necessary to receive at the Point of Delivery all or any part of any Energy required to be received by Buyer under this Article VI, Article VIII or Article IX at least seventy-five (75) minutes prior to the start of the applicable Scheduling hour, Buyer shall pay Seller, on the date payment would otherwise be due to Seller, an amount for each MWh of such deficiency equal to the positive difference, if any, obtained by subtracting the Sales Price from the price per MWh which would have been payable by Buyer for the Energy not received by Seller. “Sales Price” means the price at which Seller, acting in a commercially reasonable manner, resells the Energy, including the Environmental Attributes associated therewith, or, absent a resale following commercially reasonable efforts by Seller to resell such Energy, $0/MWh. Seller shall provide Buyer prompt written notice of the Sales Price together with back-up documentation. Seller shall use, and demonstrate to Buyer its use of, commercially reasonable efforts to resell the Energy that Buyer fails to receive, including the Environmental Attributes associated therewith.

Section 6.6 Nature of Remedies. The remedy set forth in Section 6.5 is the sole and exclusive remedy of Seller for any failure by Buyer to receive Energy as and when required by this Agreement, and all other remedies and damages for any such failure are hereby waived by Seller.

Section 6.7 Energy to Come Exclusively from Facility. In no event shall Seller have the right to procure energy from sources other than the Facility for sale and delivery pursuant to this Agreement, except (a) as provided in Article IX and (b) subject to the obligations of Seller as set forth in Section 7.1(b), (i) imbalance energy in quantities of less than one (1) MWh per hour delivered by Seller to allow Seller to Schedule Delivered Energy in full MWh quantities, and (ii) imbalance energy that Seller has not been able to avoid delivering notwithstanding its commercially reasonable efforts not to do so, which commercially reasonable efforts shall include terminating or adjusting the Energy schedule as soon as Seller is aware of any material differences between the schedule and the anticipated quantity of Facility Energy, as provided in Section 4.4(i) and Section 4.4(l).

Section 6.8 Sales to Third Parties. Seller will use commercially reasonable efforts to deliver all Facility Energy, Replacement Energy required to be delivered to Buyer under this Agreement, Capacity Rights and associated Environmental Attributes from the Facility to Buyer and will not deliver any such Facility Energy, Replacement Energy required to be delivered to Buyer under this Agreement, Capacity Rights and associated Environmental Attributes to third parties, except that (a) Seller may cause Facility Energy to be sold into the imbalance market due to under-scheduling as permitted in Section 6.1(a) to avoid Excess Monthly Generation exceeding the fifteen percent (15%) restriction set forth therein, (b) Seller may sell Deemed Delivered Energy and any associated Capacity Rights and Environmental Attributes as provided in Section 6.9(g), (c) Seller is permitted to sell Facility Energy, Replacement Energy required to be delivered to Buyer under this Agreement, Capacity Rights and associated Environmental Attributes to third parties to the extent that Buyer is excused from receiving and purchasing, and has elected by 125 of 1291
43 written notice to Seller not to receive and purchase, such Facility Energy, Replacement Energy, Capacity Rights, and associated Environmental Attributes as provided in this Agreement, and (d) Seller is permitted to sell Facility Energy, Replacement Energy required to be delivered to Buyer under this Agreement, Capacity Rights and associated Environmental Attributes to third parties to the extent that Buyer fails to take the actions necessary to receive at the Point of Delivery all or any part of any Energy required to be received by Buyer at least seventy-five (75) minutes prior to the start of the applicable Scheduling hour or when Buyer provides notice (which notice may be in writing or verbal, including by phone) to Seller that it is unable to receive such Facility Energy, Replacement Energy, Capacity Rights, and associated Environmental Attributes. Notwithstanding the foregoing, if Seller rounds down the quantity of Facility Energy Scheduled during any hour as permitted by Section 6.1(a), Seller shall deliver to Buyer the Environmental Attributes associated with the fractional MWh of Facility Energy sold to third parties as a result of such rounding down.

If Seller (i) is selling Facility Energy to third parties to avoid Excess Monthly Generation exceeding the fifteen percent (15%) restriction as permitted by clause (a) of this Section 6.8, and (ii) receives compensation from a third party for any such Facility Energy in a quantity that is greater than one MWh in any hour, and the price that Seller receives for such Facility Energy from a third party is greater than the applicable price set forth in Appendix A, Seller shall pay Buyer an amount equal to the product of (x) the quantity of Facility Energy Scheduled or unscheduled to a third party in such hour and (y) the positive difference between the price that Seller received from such third party and the applicable price Seller would have received for such Facility Energy if it had been delivered to Buyer hereunder as set forth in Appendix A.

Section 6.9 Curtailment Requested by Buyer.
(a) Buyer, Buyer’s Agent or Buyer’s Transmission Provider may require Seller to reduce deliveries of all or any portion of the Facility Energy, and Seller shall comply with any such requirement of Buyer, Buyer’s Agent or Buyer’s Transmission Provider, at any time and for the duration specified by Buyer, Buyer’s Agent or Buyer’s Transmission Provider in a notice to Seller, including for curtailments required by (i) a System Emergency; (ii) an event of Force Majeure on Buyer’s side after the Point of Delivery (curtailments under preceding clauses (i), or (ii), “Non-Compensable Curtailments”); (iii) system improvements, scheduled or unscheduled repairs or maintenance on Buyer’s side of the Point of Delivery (other than due a Force Majeure event as described in (ii) above); (iv) Buyer’s failure or inability to Schedule the Delivered Energy from the Point of Delivery (other than due to a Force Majeure event as described in (ii) above); and (v) for any other reason in the sole discretion of whichever representative of Buyer provided the applicable notice (curtailments under preceding clauses (iii), (iv) or (v), “Compensable Curtailments”). Curtailments shall be measured in five (5) minute increments and in a manner that is consistent with the Scheduling Procedures. Seller shall be excused from delivering the reduced deliveries of Facility Energy described in the notice described in this subsection. Subject to Section 6.9(b), Buyer shall be excused from receiving the reduced deliveries of Facility Energy described in the notice described in this subsection. (b) Buyer shall not pay Seller for any Non-Compensable Curtailments.

Buyer shall pay Seller for Deemed Delivered Energy during Compensable Curtailments occurring during the Delivery Term that is in excess of four percent (4%) of the Expected Annual Generation in each Contract Year. The Compensable Curtailments less than or equal to four percent (4%) of the Expected Annual Generation in such Contract Year are “Buyer’s Non126 of 1291 44 Compensable Curtailment Hours”. During the Delivery Term, the Parties shall reasonably estimate the amount of curtailed Facility Energy that would have been delivered at the Point of Delivery during each Contract Month had the Non-Compensable or Compensable Curtailments not occurred, which shall include the Facility Energy actually generated during such NonCompensable or Compensable Curtailments (“Deemed Delivered Energy”), and such Deemed Delivered Energy shall count toward the Guaranteed Monthly Delivered Energy or, if the Guaranteed Monthly Delivered Energy has been met for such Contract Month, toward reducing any outstanding Shortfall Energy.
(c) With respect to any Compensable Curtailment, Buyer shall pay: (i) the price set forth in paragraph 2 of Appendix A for Deemed Delivered Energy that, had it been delivered to the Point of Delivery, would not have been Excess Energy or Excess Monthly Generation, (ii) the price set forth in paragraph 3 of Appendix A for Deemed Delivered Energy that, had it been delivered to the Point of Delivery, would have been Excess Energy and (ii) the price set forth in paragraph 4 of Appendix A for Deemed Delivered Energy that, had it been delivered to the Point of Delivery, would have been Excess Monthly Generation subject to Section 6.1.
(d) At the end of every Contract Year, Seller will provide to Buyer in the invoice delivered to Buyer pursuant to Section 11.1, a calculation of the total MWh Deemed Delivered Energy during Buyer’s Non-Compensable Curtailment Hours. If the total MWh of Deemed Delivered Energy during Buyer’s Non-Compensable Curtailment Hours is less than four percent (4%) of the Expected Annual Generation in each Contract Year, then Buyer will receive a credit equal to the product of (i) thirty-five dollars and twelve cents ($35.12), and (ii) the difference between (a) four percent (4%) of the Expected Annual Generation in each Contract Year and (b) the total MWh of Deemed Delivered Energy during Buyer’s NonCompensable Curtailment Hours in such Contract Year (“Unused Curtailment Credit”). The total Unused Curtailment Credit amount will be credited against amounts otherwise owing by Buyer to Seller for Energy in the first, and if necessary, subsequent months of the subsequent Contract Year.
(e) For the avoidance of doubt, Buyer shall not pay Seller for any Deemed Delivered Energy calculated during Buyer’s Non-Compensable Curtailment Hours or during any Non-Compensable Curtailments.
(f) Seller shall provide the capability to implement curtailments and adjust curtailment amounts in real time by means of setpoints received from Buyer’s SCADA system.

Seller shall install sufficient measuring equipment at the Facility to collect data necessary to reasonably determine the amount of curtailed Facility Energy, including any Deemed Delivered Energy.
(g) Seller shall use, and demonstrate to Buyer its use of, commercially reasonable efforts to sell Deemed Delivered Energy arising during any Compensable Curtailments, including the Environmental Attributes associated therewith. Any proceeds from the sale of any Deemed Delivered Energy to a third party purchaser shall be the property of Seller, and Seller shall credit any such proceeds against any amounts owed by Buyer to Seller for such Deemed Delivered Energy pursuant to this Section 6.9. 127 of 1291
45 ARTICLE VII
TRANSMISSION AND SCHEDULING; TITLE AND RISK OF LOSS
Section 7.1 In General.
(a) Seller shall arrange and be responsible for any Transmission Services required to deliver Facility Energy or Replacement Energy to the Point of Delivery or the Replacement Energy Point of Delivery, as applicable. Seller shall Schedule or arrange for Scheduling services with its Transmission Providers to deliver the Facility Energy to Buyer at the Point of Delivery. Buyer shall arrange and be responsible for Transmission Services at and from the Point of Delivery, and shall Schedule or arrange for Scheduling services with its Transmission Providers to receive Delivered Energy or Replacement Energy at the Point of Delivery or the Replacement Energy Point of Delivery, as applicable. This includes creation by Seller and, as needed, revisions of electronic tags (“e-tags”) associated with such Energy schedules. Seller shall provide additional information as reasonably requested by Buyer on etags or as reasonably necessary to facilitate Buyer’s reporting requirements under RPS Law.

Each Party shall designate an authorized Scheduler to effect the Scheduling of all Delivered Energy or Replacement Energy, as applicable. The contact information for Buyer’s Scheduler and Seller’s Scheduler as of the Effective Date shall be set forth in Appendix C and shall be revised by the Authorized Representative of the respective Party, as needed. (b) In performing its obligations with respect to Scheduling Facility Energy to the Point of Delivery hereunder, Seller will use commercially reasonable efforts to reduce the delivery of whole or fractional MWh of Excess Monthly Generation and to cause the quantity of Delivered Energy during each hour to be as close as possible to the quantity of Facility Energy produced during such hour, subject to the restrictions set forth herein. Seller and Buyer agree that such commercially reasonable efforts may include Seller scheduling Delivered Energy in an amount in excess of the forecasted available generation so that Seller delivers Excess Monthly Generation up to and until deliveries of Excess Monthly Generation equal or exceed the fifteen percent (15%) threshold set forth in Section 6.1(a). For clarity, Buyer is permitting Seller to deliver and sell to Buyer the Excess Monthly Generation as provided herein solely to meet the operating conditions set forth in this Agreement.

Section 7.2 Costs. Seller shall be responsible for any costs, expenses or charges imposed on or associated with Facility Energy up to the Point of Delivery, including charges related to control area services, inadvertent energy flows, transmission losses and the transmission of Facility Energy, and costs associated with transmission outages, congestion or curtailment.

Subject to Section 6.8, Buyer shall be responsible for any costs, expenses or charges imposed on or associated with Delivered Energy at and from the Point of Delivery, including charges related to control area services, inadvertent energy flows, transmission losses and the transmission of Delivered Energy, and costs associated with transmission outages, congestion or curtailment.

Section 7.3 Title; Risk of Loss. As between the Parties, Seller shall be deemed to be in exclusive control (and responsible for any damages or injury caused thereby) of all Facility Energy prior to and at the Point of Delivery, and Buyer shall be deemed to be in exclusive control (and responsible for any damages or injury caused thereby) of all Delivered Energy from the Point of Delivery. Seller shall deliver all Delivered Energy, Replacement Energy, Capacity Rights and 128 of 1291
46 Environmental Attributes to Buyer free and clear of all Liens created by any Person other than Buyer. Title to and risk of loss as to all Delivered Energy, Replacement Energy, Capacity Rights and Environmental Attributes shall pass from Seller to Buyer at the Point of Delivery; provided, however, that title and risk of loss as to any Replacement Energy specified by Buyer to be delivered to a Replacement Energy Point of Delivery and all of the associated Environmental Attributes shall pass from Seller to Buyer upon delivery of such Replacement Energy to such Replacement Energy Point of Delivery.

ARTICLE VIII
ENVIRONMENTAL ATTRIBUTES; EPS AND RPS COMPLIANCE
Section 8.1 Transfer of Environmental Attributes. For and in consideration of Buyer entering into this Agreement, and in addition to the agreement by and between Buyer and Seller to purchase and sell Delivered Energy on the terms and conditions set forth herein, Seller shall transfer to Buyer, and Buyer shall receive from Seller, all right, title, and interest in and to all Environmental Attributes, free and clear of all Liens, whether now existing or acquired by Seller or that hereafter come into existence or are acquired by Seller during the Agreement Term, for all Facility Energy and Replacement Energy, in each case, purchased by Buyer hereunder. In addition, Buyer shall be entitled to all Environmental Attributes associated with Facility Energy generated by Seller during a Compensable Curtailment and during a Buyer Failure to perform for which Buyer pays Seller pursuant to Section 6.5, in each case, that Seller was unable to sell notwithstanding its commercially reasonable efforts to do so. For the avoidance of doubt, Buyer is not entitled to, and Seller shall retain for its own benefit, all Environmental Attributes associated with (i) all Non-Compensable Curtailments and (ii) all Facility Energy during Buyer’s NonCompensable Curtailment Hours. Environmental Attributes that are in, or that shall come into, existence with respect to Energy generated by the Facility that services Parasitic Load shall be transferred by Seller to, and received by, Buyer. Seller agrees to transfer and make available to Buyer such Environmental Attributes to the fullest extent allowed by applicable law immediately upon Seller’s production or acquisition of the Environmental Attributes. To the extent allowable under Requirements of Law, Seller will register and report monthly geothermal generation auxiliary load to the NVTREC system to create Nevada Portfolio Energy Credits (“PECs”). All such PECs received by Seller will be transferred by Seller to, and received by, Buyer to the full extent allowed by Requirements of Law immediately upon Seller’s receipt of such PECs within the NVTREC system. Except as otherwise permitted herein, including as provided in Section 6.8, Seller represents and covenants that it has not assigned, transferred, conveyed, encumbered, sold or otherwise disposed of and will not in the future assign, transfer, convey, encumber, sell or otherwise dispose of all or any portion of such Environmental Attributes to any Person other than Buyer or attempt to do any of the foregoing with respect to any of the Environmental Attributes.

Buyer and Seller acknowledge and agree that the consideration for the transfer of Environmental Attributes is contained within the relevant prices for Delivered Energy under Article VI and Article IX and Appendix A. If at any time Seller becomes obligated to obtain pollution or environmental credits or offsets in order to own, operate or maintain the Facility in compliance with the Requirements of Law, Seller shall ensure that such credits or offsets are obtained in Seller’s own name and at Seller’s sole cost and expense. In no event shall Seller use any Environmental Attributes to satisfy the foregoing obligation.
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47 Section 8.2 Reporting of Ownership of Environmental Attributes. During the Agreement Term, Seller shall not report to any Person that the Environmental Attributes granted hereunder to Buyer belong to any Person other than Buyer, and Buyer may report under any program that such Environmental Attributes purchased hereunder belong to it.

Section 8.3 Environmental Attributes. Upon the request of Buyer or Buyer’s Authorized Representative, Seller shall take all reasonable actions and execute all documents or instruments as are reasonable and necessary under all law, regulations, guidebooks promulgated by the CEC or PUC, bilateral arrangements or other voluntary Environmental Attribute programs of any kind, as applicable, to maximize the attribution, accrual, realization, generation, production, recognition and validation of Environmental Attributes throughout the Agreement Term.

Section 8.4 Use of Accounting System to Transfer Environmental Attributes. In furtherance and not in limitation of Section 8.3, Seller shall use WREGIS to evidence the transfer of any Environmental Attributes under applicable laws or any voluntary program (“WREGIS Certificates”), associated with Facility Energy or Replacement Energy, in either case, to be transferred to Buyer, in accordance with WREGIS reporting protocols and shall register the Facility with WREGIS. On or before the date that is thirty (30) days before the Commercial Operation Date, Seller shall deliver sufficient evidence to Buyer that it has prepared and registered all required documents and has taken all necessary steps for final WREGIS approval, including the notice of substantial completion or commercial operation date to WREGIS, as appropriate.

Seller shall deliver to Buyer sufficient evidence that substantial completion of the Facility is verified with WREGIS, and it has provided WREGIS with notice of the commercial operation date. After the Facility is registered with WREGIS, at the option of Buyer’s Authorized Representative, Seller shall transfer WREGIS Certificates using the Forward Certificate Transfer method, as described in WREGIS Operating Rules, from Seller’s WREGIS account to up to three WREGIS accounts, as designated by Buyer’s Authorized Representative. Seller shall be responsible for the WREGIS expenses associated with registering the Facility, maintaining its account, WREGIS Certificate issuance fees and transferring WREGIS Certificates to Buyer or Buyer’s Agent, or any other designees, and Buyer shall be responsible for the WREGIS expenses associated with maintaining its account, or the accounts of its designees, if any, and subsequent transferring or retiring of WREGIS Certificates. Buyer is not a QRE as defined by the WREGIS Operating Rules for Seller. Forward Certificate Transfers shall occur monthly based on the certificate creation timeline established by the WREGIS Operating Rules. Seller shall be responsible for, at its expense, validating and disputing data with WREGIS prior to WREGIS Certificate creation each month. In the event that WREGIS is not in operation, or WREGIS does not track Seller’s transfer of WREGIS Certificates to Buyer, Buyer’s Agent or Buyer’s designees for purposes of any Environmental Attributes attributed, accrued, realized, generated, produced, recognized or validated relative to the Facility Energy or Replacement Energy to which Buyer is entitled hereunder, or Buyer chooses not to use WREGIS for any reason, Seller shall document the production and transfer of Environmental Attributes under this Agreement by delivering to Buyer an attestation for the Environmental Attributes produced by the Facility, or Replacement Energy, measured in whole MWh, or by such other method as Buyer or Buyer’s Authorized Representative shall designate. If any of the foregoing is or becomes inconsistent with the WREGIS rules, the Parties shall reasonably cooperate to amend the foregoing procedures in a manner reasonably requested by Buyer consistent with the then effective WREGIS rules. Buyer shall take all reasonably necessary actions to facilitate the transfer of Environmental Attributes as 130 of 1291
48 provided above, including accepting any transfer request made by Seller through WREGIS in accordance with the foregoing.

Section 8.5 Further Actions Regarding Environmental Attributes. If WREGIS (or any successor thereto) is no longer available to provide the services described in Section 8.4, Seller shall, until such time as a substitute provider reasonably acceptable to both Parties is available to provide such services, continue to document the production of Environmental Attributes by delivering with each invoice to Buyer an attestation and bill of sale for Environmental Attributes (i) produced by the Facility to which Buyer is entitled as provided hereunder or (ii) included with Replacement Energy deliver to Buyer for the preceding month. The form of attestation and bill of sale is set forth as Appendix D. Upon the reasonable request of Buyer or Buyer’s Authorized Representative, the Parties shall execute all such documents and instruments and take such other action in order to effect the transfer of the Environmental Attributes specified in this Agreement to Buyer and to maximize the attribution, accrual, realization, generation, production, recognition and validation of the Environmental Attributes to which Buyer is entitled. In the event of the promulgation of a scheme involving Environmental Attributes administered by CAMD, upon notification by CAMD that any transfers contemplated by this Agreement shall not be recorded, the Parties shall promptly cooperate in taking all reasonable actions necessary so that such transfer can be recorded. Each Party shall promptly give the other Party copies of all documents it submits to CAMD to effectuate any transfers.

Section 8.6 RPS and EPS Compliance. Except as provided in Section 8.7, the Seller warrants and guarantees that, upon the achievement of the Commercial Operation Date and at all times thereafter, the Facility will be both RPS Compliant and EPS Compliant (the “Compliance Standards”). In accordance with the terms set forth herein, including Section 8.7, Seller shall be responsible for all costs and charges associated with maintaining the Compliance Standards should the Facility not be RPS Compliant and EPS Compliant after the Commercial Operation Date and throughout the Delivery Term. From time to time and at any time requested by Buyer or Buyer’s Authorized Representative, Seller will furnish to Buyer, Governmental Authorities or other Persons designated by Buyer, all certificates and other documentation reasonably requested by Buyer or Buyer’s Authorized Representative in order to establish compliance with the preceding sentence.

Section 8.7 Change in Law.
(a) Notwithstanding the foregoing, if at any time during the Delivery Term a change in law occurs that causes the Facility to fail to comply with the Compliance Standards, then Seller shall use commercially reasonable efforts to bring the Facility into compliance with the Compliance Standards. During the Delivery Term, during all times in which the Facility fails to meet the Compliance Standards, including when Seller is using commercially reasonable efforts to bring the Facility into compliance with the Compliance Standards, the price for Delivered Energy set forth in paragraph 2 of Appendix A shall be the Market Price. (b) If, at any time during the Delivery Term, the RPS Law or EPS Law ceases to be effective and is not replaced with a functional equivalent law, where permitted by applicable laws, rules and regulations, the price for Delivered Energy set forth in paragraph 2 of Appendix A shall be, for the remainder of the Delivery Term, the higher of (x) the Market 131 of 1291
49 Price (excluding the value of the Environmental Attributes) or (y) the Market Value, subject to Section 8.7(d).
(c) If, Buyer determines, in its reasonable discretion, that it is impossible for Seller to comply with the RPS Law or the EPS Law, Buyer shall have the option to (i) cause the price for Delivered Energy set forth in paragraph 2 of Appendix A to be, for the remainder of the Delivery Term, the higher of (x) the Market Price (excluding the value of the Environmental Attributes) or (y) the Market Value, subject to Section 8.7(d), or (ii) terminate this Agreement. (d) Seller shall in good faith determine the Market Value as soon as reasonably practicable after the RPS Law or EPS Law ceases to be effective or Buyer makes a determination pursuant to Section 8.7(c) and promptly notify Buyer thereof. Buyer shall either accept or reject such Market Value within thirty (30) days after receiving such notice. If Buyer accepts such Market Value, the price set forth in paragraph 2 of Appendix A for Delivered Energy for the remainder of the Delivery Term shall be the higher of the Market Price and such Market Value. If Buyer rejects such Market Value, Seller may either, by notice to Buyer within thirty (30) days after receiving such rejection (i) agree that the price set forth in paragraph 2 of Appendix A for Delivered Energy for the remainder of the Delivery Term will be the Market Price, in which case such price shall be the Market Price, or (ii) terminate this Agreement. Seller will be deemed to have agreed that the price set forth in paragraph 2 of Appendix A for Delivered Energy will be the Market Price if Seller does not respond within such thirty (30) day period.

ARTICLE IX

MAKEUP OF SHORTFALL ENERGY
Section 9.1 Makeup of Shortfall. Unless excused by (a) a Force Majeure, (b) a System Emergency, (c) Buyer’s Default or a failure to Schedule energy from the Point of Delivery or any other Buyer failure under Section 6.5, or (d) a Non-Compensable Curtailment or a Compensable Curtailment ((a)-(d), collectively, “Excused Conditions”), if in any Contract Month beginning with the sixth (6th) Contract Month, the amount of Net Delivered Energy is less than the Guaranteed Monthly Delivered Energy for such Contract Month (such failure, a “Shortfall”), then Seller shall make up such shortfall of Net Delivered Energy (“Shortfall Energy”) in accordance with this Article IX; provided, that any Excess Energy (excluding Excess Monthly Generation) delivered in the Contract Month immediately preceding the Contract Month in which the Net Delivered Energy is less than the Guaranteed Monthly Delivered Energy shall be credited to the Shortfall Energy, so long as both Contract Months are in the same compliance period and Buyer is able to use such Excess Energy for purposes of demonstrating its compliance obligations for such compliance period for purposes of RPS Law, unless Buyer elects that the foregoing shall not apply in such Contract Month.

Section 9.2 Makeup Energy. During any two-month period (the “Shortfall Cure Period”) following a Contract Month in respect of which there is Shortfall Energy due to Buyer, Seller may deliver additional Net Delivered Energy (“Makeup Energy”) to make up such Shortfall Energy until all Shortfall Energy is provided to Buyer; provided that no Net Delivered Energy in a Contract Month shall count toward curing Shortfall Energy until Buyer has received Net Delivered Energy (including Deemed Delivered Energy for such Contract Month counted toward the Guaranteed Monthly Delivered Energy) up to the Guaranteed Monthly Delivered Energy for 132 of 1291
50 such Contract Month. Except as provided in Section 6.1(b), all such Makeup Energy shall be paid for at the price specified in paragraph 2 of Appendix A.

Section 9.3 Shortfall Remedies. If Seller fails to make up the full amount of any Shortfall Energy by the end of the applicable Shortfall Cure Period (the “Makeup Deadline”), Buyer may elect, in its sole discretion, that (a) Seller pay to Buyer an amount for each MWh of then-remaining Shortfall Energy equal to the positive difference, if any, determined by subtracting (i) the per-MWh price for Delivered Energy identified in paragraph 2 of Appendix A from (ii) the sum of the time weighted average of the (x) Market Price Index for such Energy and (y) Green Value associated therewith; provided that (y) shall not apply if Section 8.7 applies such that Buyer is paying the Market Price for Delivered Energy (collectively, the “Shortfall Damages”) or (b) Seller, within ninety (90) days after the Makeup Deadline, provide Buyer with the quantity of Replacement Energy sufficient to cure any then-remaining Shortfall Energy from such Shortfall Cure Period pursuant to Section 9.4: provided, however, that if Seller is unable to provide Buyer with Replacement Energy pursuant to Section 9.4 within such ninety (90) day period notwithstanding its commercially reasonable efforts to do so, Seller shall cure the then-remaining amount of Shortfall Energy as if Buyer elected a cure pursuant to Section 9.3(a) (payment of Shortfall Damages). The Parties agree that (x) it is impractical or extremely difficult to determine actual damages to which Buyer would be entitled in the foregoing circumstance, and (y) the liquidated damages provided for in this subsection are a fair and reasonable calculation of actual damages to Buyer and are not a penalty in such a circumstance.

Section 9.4 Replacement Energy. Seller shall Schedule or arrange for Scheduling services with its Transmission Providers to deliver the Replacement Energy to the Point of Delivery; provided that the Replacement Energy shall be delivered to Buyer on a fixed twentyfour (24) hour per day delivery schedule consistent with the Facility’s historic percentage of onpeak and off-peak Delivered Energy or as otherwise mutually agreed to by the Parties. If Seller and Buyer mutually agree on a point or points of interconnection on Buyer’s transmission system other than the Point of Delivery for delivery of any Replacement Energy, Seller shall Schedule or arrange for Scheduling services with its Transmission Providers to deliver such Replacement Energy to such specified point or points instead of the Point of Delivery (“Replacement Energy Point of Delivery”). As employed in this Agreement, “Replacement Energy” means Energy produced by an identified facility listed by Seller in Appendix U other than the Facility that, at the time delivered to Buyer, (a) is both RPS Compliant and EPS Compliant, and (b) includes Environmental Attributes that have the same or comparable value, including with respect to the timeframe for retirement of such Environmental Attributes, if any, as the Environmental Attributes that would have been generated by the Facility on the day and at the time for which the Replacement Energy is being provided. Seller shall also provide to Buyer the associated Capacity Rights; provided that (a) and (b) shall not apply if Section 8.7 applies such that Buyer is paying the Market Price for Delivered Energy. Notwithstanding any other provision of this Agreement, other than Buyer’s remedies for a Default by Seller under Section 13.1(n), Shortfall Damages or the delivery of Replacement Energy shall be Buyer’s sole remedy, and Seller’s sole liability, for Seller’s failure to deliver Facility Energy and the associated Environmental Attributes and Replacement Energy and the associated Environmental Attributes, as provided under Sections 9.1 and 9.2 above; provided that the foregoing shall not limit Buyer’s rights to exercise any right or remedy available under this Agreement or at law or in equity for any other breach or default occurring concurrently with, before or after the failure to meet the Guaranteed Monthly Delivered 133 of 1291
51 Energy, including a Default under Section 13.1(b). Seller may update the list of identified facilities included on Appendix U from time to time during the Agreement Term by delivering notice of such update to Buyer and obtaining Buyer’s approval thereof, which approval shall not be unreasonably withheld, conditioned, or delayed.

Section 9.5 Application of Shortfall Energy or Replacement Energy. In the event of shortfalls in multiple Contract Months, any Makeup Energy or Replacement Energy delivered by Seller shall be applied in priority to the earliest outstanding shortfalls hereunder until all shortfalls are satisfied.

ARTICLE X

CAPACITY RIGHTS
Section 10.1 Purchase and Sale of Capacity Rights. For and in consideration of Buyer entering into this Agreement, and in addition to the agreement by and between Buyer and Seller to purchase and sell Facility Energy and Environmental Attributes on the terms and conditions set forth herein, Seller hereby transfers to Buyer, and Buyer hereby accepts from Seller, all of the Capacity Rights except as otherwise provided herein. Buyer and Seller acknowledge and agree that the consideration for the transfer of Capacity Rights is contained within the relevant prices for Delivered Energy. In no event shall Buyer have any obligation or liability whatsoever for any debt pertaining to the Facility by virtue of Buyer’s ownership of the Capacity Rights or otherwise.

Section 10.2 Representation Regarding Ownership of Capacity Rights. Seller represents and covenants that it has not assigned, transferred, conveyed, encumbered, sold or otherwise disposed of and will not in the future assign, transfer, convey, encumber, sell or otherwise dispose of any of the Capacity Rights to any Person other than Buyer or attempt to do any of the foregoing with respect to any of the Capacity Rights except as otherwise permitted herein. Seller shall not report to any Person that any of the Capacity Rights belong to any Person other than Buyer. Buyer may, at its own risk and expense, report to any Person that the Capacity Rights belong to it.

Section 10.3 Further Action by Seller Regarding Capacity Rights. Seller shall execute and deliver such documents and instruments and take such other action as Buyer or Buyer’s Authorized Representative may reasonably request to effect recognition and transfer of the Capacity Rights to Buyer. Seller shall bear the costs associated therewith.

ARTICLE XI
BILLING; PAYMENT; AUDITS; METERING; ATTESTATIONS; POLICIES Section 11.1 Billing and Payment. Billing and payment for the Energy purchases by Buyer under this Agreement and for any other amounts due and payable by Buyer hereunder shall be as follows:
(a) On or before the tenth (10th) day of the month following a month in which transactions occur hereunder, Seller shall render an invoice (including the name of the Facility, Seller’s address and the contact information of the preparer) to Buyer showing the following (with reasonable detail) for the preceding month, as applicable:
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52 (1) Startup and Test Energy, if any, delivered to Buyer pursuant to Section 6.2 billed at the price specified in paragraph 1 of Appendix A, if any; (2) (i) the total amount of Delivered Energy during such month, (ii) the portion of such Delivered Energy that is Excess Monthly Generation and the portion of such Excess Monthly Generation that Buyer must purchase, subject to Section 6.1(a), and (iii) after the Amendment Date, (A) a summary of the Facility Energy as measured at the Electric Metering Devices detailed by day and hour, (B) a calculation of the total Excess Monthly Generation from the Effective Date through the end of such month, and (C) a calculation of the ratio of the quantity calculated pursuant to clause (B) to the sum of the Expected Annual Generation for all Contract Years during the Delivery Term; (3) an accounting of (i) the amount of the Net Delivered Energy counting toward Guaranteed Monthly Delivered Energy for the applicable Contract Month delivered as of such date (including confirmation that Seller met the Guaranteed Monthly Delivered Energy or a statement of the amount of Shortfall Energy resulting from a Shortfall in such Contract Month), (ii) the amount of Makeup Energy (which may not consist of Excess Monthly Generation) and Replacement Energy delivered, and the amount of Shortfall Damages paid, during such Contract Month, if applicable, and the amount outstanding Shortfall Energy was reduced as a result thereof and (iii) the amount of outstanding Shortfall Energy following such reductions as a result of Replacement Energy or Makeup Energy delivered, or Shortfall Damages, in such Contract Month (including a breakdown of such outstanding Shortfall Energy by Contract Month in which it was accrued);
(4) subject to Section 6.1(c), Excess Energy billed pursuant Section 6.1(b) at the price specified in paragraph 3 of Appendix A; (5) the amount of Buyer’s Non-Compensable Curtailment Hours incurred during such period in accordance with Section 6.9, including the cumulative total of Buyer’s Non-Compensable Curtailment Hours incurred during the current Contract Month and the prior Contract Month, including the current billing period, and consistent with the Scheduling Procedures, and in the first month after the end of each Contract Year, the total Deemed Delivered Energy during Buyer’s Non-Compensable Curtailment Hours for the prior Contract Year and the amount of the Unused Curtailment Credit, if any, to be applied as an offset to Buyer’s payment obligation;
(6) Seller’s reasonable calculation of the amount of Deemed Delivered Energy and amounts owed by Buyer in accordance with Section 6.9(c); (7) the amount of money received by Seller, if any, associated with the sale of any curtailed Facility Energy under Section 6.9(a); (8) Seller’s reasonable calculation of the System Credit (if applicable); (9) Seller’s reasonable calculation of the deficiency during Buyer’s failure in accordance with Section 6.5;
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53 (10) the amount of money received by Seller, if any, associated with the sale of Energy not received by Buyer and the calculated Sales Price for each deficiency under Section 6.5;
(11) any other payments due to Buyer or Seller under this Agreement, including amounts owed to Buyer for a WREGIS Certificate Deficit pursuant to Section 6.1(c);
(12) the total quantity of WREGIS Certificates confirmed to have been uploaded by Seller to the WREGIS system; and
(13) any WREGIS Withhold Amount withheld during such Month or released to Seller in accordance with Section 11.4.
(b) Monthly invoices, to the extent applicable, shall be based on meter readings as described in Section 11.8.
(c) Monthly invoices shall be sent to the address set forth in Appendix C or such other address as is provided by Buyer in writing.
(d) Certification in form and substance reasonably satisfactory to Buyer of the maximum Parasitic Load of the Facility and the Deemed Additional System Output as required under Section 12.8 shall accompany the monthly invoice for the month in which such certification was obtained (which shall be within the time period provided herein). (e) Attestations of Environmental Attribute transfers to Buyer pursuant to Section 8.5, if applicable, shall accompany monthly invoices. (f) Confirmation of Seller’s compliance with the terms and conditions of this Agreement shall accompany monthly invoices.

Section 11.2 Calculation of Energy Delivered; Payment.
(a) Delivered Quantity. For each month during the Agreement Term, commencing with the first month in which Energy is delivered by Seller to and received by Buyer under this Agreement, Seller shall calculate the amount of Energy so delivered and received during such month as determined (i) in the case of Delivered Energy, from recordings produced by Seller’s Electric Metering Devices maintained pursuant to Section 11.8, at or near midnight on the last day of the month in question, and (ii) in the case of Replacement Energy actually supplied to Buyer pursuant to Section 9.4, from recordings produced by metering equipment approved by Buyer’s Authorized Representative in his sole discretion.

Section 11.3 Payment. Subject to the provisions of Section 11.4, Buyer shall pay the amounts set forth in each monthly invoice by wire transfer to the accounts designated on the invoice rendered by Seller on or before the thirtieth (30th) day after receipt by Buyer of the applicable invoice. Bills or portions of bills which are not paid by the due date shall thereafter accrue interest at the Interest Rate, from and including the date payment was due until the date such payment is made. Seller shall pay to Buyer any amount owed to Buyer as set forth in Section 136 of 1291
54 11.1(a)(5) and Section 11.1(a)(6) with respect to any month at the time Seller submits its next monthly invoice to Buyer, but in no event more than thirty (30) days after the date of the invoice showing any amount is owed to Buyer. Buyer shall not be required to pay any amounts included in an invoice received more than six (6) months after the billing period.

Section 11.4 WREGIS Withholding. Buyer shall have the right to withhold from any payment to Seller, for each MWh delivered under Section 6.1 (other than any Excess Monthly Generation), an amount equal to fifteen dollars ($15) per MWh (such amount, the “WREGIS Withhold Amount”) until such time as the first WREGIS Certificate has been delivered to Buyer’s WREGIS account, and Buyer shall pay the WREGIS Withhold Amount previously withheld by Buyer for each such MWh for which a WREGIS Certificate was credited to Buyer’s WREGIS account in such month. If at any time after the first WREGIS Certificate has been delivered to Buyer’s WREGIS Account, a WREGIS Certificate corresponding to Facility Energy and Replacement Energy (other than Excess Monthly Generation) purchased by Buyer hereunder is not delivered within one hundred twenty (120) days after delivery of such corresponding MWh of Facility Energy and Replacement Energy purchased by Buyer hereunder (a “Withholding Trigger Event”), Buyer shall have the right to reinstate withholding pursuant to this Section 11.4, in which case, Buyer may withhold the WREGIS Withhold Amount for each such MWh of Facility Energy and Replacement Energy purchased by Buyer hereunder until the corresponding WREGIS Certificate has been delivered to Buyer’s WREGIS Account. Buyer may continue such withholding until a Six-Month Cure occurs. A “Six-Month Cure” means the WREGIS Certificate for each MWh of Facility Energy and Replacement Energy (other than Excess Monthly Generation) purchased by Buyer hereunder during a six (6) consecutive month period is delivered to Buyer’s WREGIS account within one hundred twenty (120) days after delivery of such corresponding MWh of Facility Energy and Replacement Energy purchased by Buyer hereunder.

Buyer shall cease withholding the WREGIS Withhold Amount upon the expiration of a Six-Month Cure but may reinstate withholding at any time thereafter upon the occurrence of a Withholding Trigger Event subject to Seller’s right to again implement a Six-Month Cure.

Section 11.5 Disputed Invoices. In the event any portion of any invoice is in dispute, the undisputed amount shall be paid when due. The Party disputing a payment shall promptly notify the other Party of the basis for the dispute. Disputes shall be discussed by the Authorized Representatives, who shall use reasonable efforts to amicably and promptly resolve the disputes, and any failure to agree shall be subject to resolution in accordance with Section 14.3. Upon resolution of any dispute, if all or part of the disputed amount is later determined to have been due, then the Party owing such payment or refund shall pay within ten (10) days after receipt of notice of such determination the amount determined to be due plus interest thereon at the Interest Rate from the due date until the date of payment. For purposes of this Section 11.5, “Interest Rate” shall mean one percent (1%) per month. Either Party may dispute an invoice at any time after receipt of such invoice, provided that such Party or its Authorized Representative provides the other Party with a notification of such dispute, setting forth the details of such dispute in reasonable specificity.

Section 11.6 Right of Setoff. In addition to any right now or hereafter granted under applicable law and not by way of limitation of any such rights, Buyer shall have the right at any time or from time to time without notice to Seller or to any other Person, any such notice being hereby expressly waived, to set off against any amount due from Seller to Buyer under this 137 of 1291
55 Agreement or otherwise any amount due Buyer from Seller or Seller Party under this Agreement or otherwise, including any amounts due because of breach of this Agreement or any other obligation and any costs payable by Seller under Section 7.2, Section 9.3, or Section 9.4 if and to the extent paid in the first instance by Buyer.

Section 11.7 Records and Audits. Seller shall maintain, and shall cause Seller’s subcontractors and suppliers as applicable to maintain, all records pertaining to the management of this Agreement, related subcontracts and performance of services pursuant to this Agreement (including all billings, costs, metering, and Environmental Attributes), in their original form, including reports, documents, deliverables, employee time sheets, accounting procedures and practices, records of financial transactions and other evidence, regardless of form (e.g., machine readable media such as disk, tape, etc.) or type (e.g., databases, applications software, database management software, utilities, etc.), sufficient to properly reflect all costs claimed to have been incurred and services performed pursuant to this Agreement. If the Seller, the Seller’s subcontractors or suppliers are required to submit cost or pricing data in connection with this Agreement, the Seller shall maintain all records and documents necessary to permit adequate evaluation of the cost or pricing data submitted, along with the computations and projections used.

Buyer and the Authorized Auditors shall have the right to discuss such records with Seller’s officers and independent public accountants (and by this provision Seller authorizes said accountants to discuss such billings and costs), all at such times and as often as may be reasonably requested. All records shall be retained, and shall be subject to examination and audit by the Authorized Auditors, for a period of not less than five (5) years following final payment made by the Buyer hereunder or the expiration or termination date of this Agreement, whichever is later.

The Seller shall make said records or, to the extent accepted by the Authorized Auditors, photographs, micro-photographs, etc. or other authentic reproductions thereof, available to the Authorized Auditors at the Seller’s offices located at all reasonable times and without charge. The Authorized Auditors shall have the right to reproduce, photocopy, download, transcribe and the like any such records. Any information provided by the Seller on machine-readable media shall be provided in a format accessible and readable by the Authorized Auditors. The Seller shall not, however, be required to furnish the Authorized Auditors with commonly available software.

Seller, and the Seller’s subcontractors and suppliers, as applicable to the services provided under this Agreement, shall be subject at any time with fourteen (14) days’ prior written notice to audits or examinations by Authorized Auditors, relating to all billings and to verify compliance with all Agreement requirements relative to practices, methods, procedures, performance, compensation and documentation. Examinations and audits shall be performed using generally accepted auditing practices and principles and applicable Governmental Authority audit standards. If Seller utilizes or is subject to Federal Acquisition Regulation, Part 30 and 31, et seq. accounting procedures, or a portion thereof, examinations and audits shall utilize such information. To the extent that an Authorized Auditor’s examination or audit reveals inaccurate, incomplete or non-current records, or records are unavailable, the records shall be considered defective. Consistent with standard auditing procedures, the Seller shall be provided fifteen (15) days to review an Authorized Auditor’s examination results or audit and respond to the Buyer’s Authorized Representative prior to the examination’s or audit’s finalization and public release. If an Authorized Auditor’s examination or audit indicates the Seller has been overpaid under a previous payment application, the identified overpayment amount shall be paid by the Seller to the Buyer within fifteen (15) days of notice to the Seller of the identified overpayment. The Seller shall contractually require all subcontractors performing material services under this Agreement for aggregate consideration of 138 of 1291
56 at least ten percent (10%) of the Facility Cost to comply with the provisions of this Section by inserting this Section 11.7 in each contract of such material subcontractors and by contractually requiring each such subcontractor to insert this Section 11.7 in any of its subcontract contracts related to provision of such material services under this Agreement. In addition, Seller and such material subcontractors shall also include the following language in each contract of such subcontractor: “The Southern California Public Power Authority is a third party beneficiary of the foregoing audit provision. The benefits of the audit provision shall inure solely for the benefit of the Southern California Public Power Authority. The designation of the Southern California Public Power Authority as a third party beneficiary of the audit provision shall not confer any rights or privileges on the Seller, subcontractor or any other person/entity.” Notwithstanding the foregoing, if the audit reveals that the Buyer overpayment to the Seller is more than five percent (5.0%) of the billings reviewed, Seller shall pay all expenses and costs incurred by the Authorized Auditors arising out of or related to the examination or audit. Such examination or audit expenses and costs shall be paid by the Seller to the Buyer within fifteen (15) days of notice to the Seller of such costs and expenses. Any information provided by Seller to the Authorized Auditor shall be held by such Authorized Auditor in strict confidence and Seller may require such Authorized Auditor to enter into a reasonable confidentiality agreement prior to the disclosure of information hereunder; provided that the Authorized Auditors shall not be prevented from disclosure of such information to Buyer to the extent such disclosure to Buyer is required to enable Buyer to carry out its rights and responsibilities under this Agreement and Buyer shall treat such information as Confidential Information to the extent provided under Section 14.21.

Section 11.8 Electric Metering Devices.
(a) Metering requirements shall be consistent with this Section 11.8 unless the Transmission Provider at the Facility’s Point of Delivery requires otherwise or as otherwise mutually agreed to by the Parties. Facility Energy shall be measured using revenue grade Electric Metering Devices installed, owned and maintained by the Seller at the high side of the step-up transformer at the Facility substation (the “Project Substation”) and as depicted and labeled “Revenue Metering System” in the single-line diagram attached to this Agreement in Appendix R, the metering diagram attached to this Agreement in Appendix S, and the point of metering diagram attached to this Agreement as Appendix T, which diagrams shall be updated as a condition precedent to the achievement of the Construction Commencement Milestone. All Electric Metering Devices used to provide data for the computation of payments shall be sealed, and the Seller or its designee shall only break the seal when such Electric Metering Devices are to be inspected and tested or adjusted in accordance with this Section 11.8. Seller or its designee shall specify the number, type and location of such Electric Metering Devices. Seller shall provide Buyer and the Participating Member a live data connection to such Electronic Metering Devices that may be accessed using the Inter-Control Center Communications Protocol (“ICCCP”), as defined by the International Electrotechnical Commission, which connection will enable the exchange of real-time and historical power system monitoring and control data, including measured values and accounting data; provided that if such ICCCP connection is not available at any time, Seller shall provide to Buyer the data that would have been accessible through such ICCCP connection during such lapse in connection in a form reasonably acceptable to Buyer.
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57 (b) The Electric Metering Devices shall be capable of: (i) accurately metering back-feed load when generation output goes to zero, and (ii) conforming to the DNP

3.0 protocol and meeting N-1 redundancy (which dictates that if any one meter fails, the Electric Metering Devices will allow the missing telemetry data to be alternately sourced or calculated).

Examples of N-1 redundancy compliant architecture include placing backup meters at the same point of metering or installing one meter at each branch (i.e., gross, aux and net) so the missing telemetry data may be calculated as a difference. Notwithstanding such required capabilities, the Electric Metering Devices shall function in compliance with the guidebook promulgated by the CEC, as amended from time to time, or in compliance with other RPS Law, whichever is controlling.
(c) Seller or its designee, at no expense to Buyer, shall inspect and test all Electric Metering Devices upon installation and at least annually thereafter. Seller shall provide Buyer with reasonable advance notice of, and permit a representative of Buyer to witness and verify, such inspections and tests. Upon request by Buyer, Seller or its designee shall perform additional inspections or tests of any Electric Metering Device and shall permit a qualified representative of Buyer to inspect or witness the testing of any Electric Metering Device. The actual expense of any such requested additional inspection or testing shall be borne by Seller.

Seller shall provide copies of any inspection or testing reports to Buyer. (d) If an Electric Metering Device fails to register, or if the measurement made by an Electric Metering Device is found upon testing to be inaccurate by more than one percent (1.0%), an adjustment shall be made correcting all measurements by the inaccurate or defective Electric Metering Device for both the amount of the inaccuracy and the period of the inaccuracy. The adjustment amount and period shall be determined by reference to Buyer’s Check Meters for the Facility, if any, or as far as can be reasonably ascertained by Seller from the best available data, subject to review and approval by Buyer’s Authorized Representative.

If the period of the inaccuracy cannot be ascertained reasonably, any such adjustment shall be for a period equal to one-third of the time elapsed since the preceding test of the Electric Metering Devices. To the extent that the adjustment period covers a period of deliveries for which payment has already been made by Buyer, Buyer shall use the corrected measurements as determined in accordance with this Section 11.8 to recompute the amount due for the period of the inaccuracy and shall subtract the previous payments by Buyer for this period from such recomputed amount. If the difference is a positive number, the difference shall be paid by Buyer to Seller; if the difference is a negative number, that difference shall be paid by Seller to Buyer, or at the discretion of Buyer or Buyer’s Authorized Representative, may take the form of an offset to payments due to Seller from Buyer. Payment of such difference by the owing Party shall be made not later than thirty (30) days after the owing Party receives notice of the amount due, unless Buyer or Buyer’s Authorized Representative elects payment via an offset. (e) At Buyer’s or Buyer’s Agent’s option, Buyer may install, own and operate Electric Metering Devices at the Project Substation and/or the Point of Delivery (“Buyer’s Check Meters”). Seller shall, and shall cause each of its subcontractors to, grant to Buyer and Buyer’s Agent rights of access to the Buyer’s Check Meters upon reasonable notice to Seller and during reasonable business hours. Commencing on the first date on which Startup and Test Energy is received from the Facility, and continuing throughout the Delivery Term, Buyer shall provide to Seller on a real-time basis read only access to Buyer’s Check Meters. 140 of 1291
58 Buyer’s Check Meters shall be for check purposes only and shall not be used for the measurement of Facility Energy, except as provided in Section 11.8(d) above. The installation, operation and maintenance of Buyer’s Check Meters shall be performed entirely by Buyer or Buyer’s Agent at Buyer’s sole cost and expense.

Section 11.9 Taxes. Seller shall be responsible for and shall pay, before the due dates therefor, any and all federal, state and local Taxes incurred by it as a result of entering into this Agreement and all Taxes imposed or assessed with respect to the Facility, the Site, or any other assets of Seller, the sale or use of Facility Energy, Capacity Rights and Environmental Attributes and all Taxes related to Seller’s income. If Buyer is required under any Requirement of Law to remit or pay Taxes that are Seller’s responsibility hereunder, Buyer may deduct such amounts from payments to Seller hereunder; if Buyer elects not to deduct such amounts from payments to Seller, Seller shall promptly reimburse Buyer for such amounts promptly upon request. Further, if the Facility is exempt from one or more Taxes at any time and for any reason, and that exemption is lost at any time during the Agreement Term, Seller shall be responsible for any additional Taxes incurred as a result of the loss of that exemption.

ARTICLE XII
REPRESENTATIONS AND WARRANTIES; COVENANTS OF SELLER
Section 12.1 Representations and Warranties of Buyer. Buyer represents and warrants to Seller as of the Effective Date that:
(a) Buyer is a validly existing joint powers authority under the laws of the State of California and has the legal power and authority to own its properties, to carry on its business as now being conducted and to enter into this Agreement and each Ancillary Document to which it is a party and carry out the transactions contemplated hereby and thereby and perform and carry out all covenants and obligations on its part to be performed under and pursuant to this Agreement and all such Ancillary Documents.
(b) The execution, delivery and performance by Buyer of this Agreement and each Ancillary Document to which Buyer is a party have been duly authorized by all necessary action, and do not and will not require any consent or approval of Buyer’s Board of Directors or Buyer’s Members, other than that which has been obtained; provided, that further authorizations will be required for Buyer to exercise the Right of First Offer or the Right of First Refusal.
(c) This Agreement and each of the Ancillary Documents to which the Buyer is a party constitute the legal, valid and binding obligation of Buyer enforceable in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws relating to or affecting the enforcement of creditors’ rights generally or by general equitable principles, regardless of whether such enforceability is considered in a proceeding in equity or at law.

Section 12.2 Representations and Warranties of Seller. Seller represents and warrants to Buyer that:
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59 (a) Each of the Seller Parties is a corporation or limited liability company duly organized, validly existing and in good standing under the laws of its respective state of incorporation or organization, is qualified to do business in the State of California and (the state where Facility is located, as applicable), and has the legal power and authority to own and lease its properties, to carry on its business as now being conducted and (in the case of Seller) to enter into this Agreement and (in the case of each Seller Party) each Ancillary Document to which it may be party and carry out the transactions contemplated hereby and thereby and perform and carry out all covenants and obligations on its part to be performed under and pursuant to this Agreement and all Ancillary Documents.
(b) The execution, delivery and performance by the Seller Parties of this Agreement and all Ancillary Documents, the consummation of the transactions contemplated hereby and thereby and the fulfilment of and compliance with the provisions of this Agreement and the Ancillary Documents, have been duly authorized by all necessary action, and do not and will not require any consent or approval other than those which have already been obtained. (c) The execution and delivery of this Agreement and all Ancillary Documents, the consummation of the transactions contemplated hereby and thereby and the fulfillment of and compliance with the provisions of this Agreement and the Ancillary Documents, do not conflict with or constitute a breach of or a default under, any of the terms, conditions or provisions of any Requirement of Law, or any organizational documents, agreement, deed of trust, mortgage, loan agreement, other evidence of indebtedness or any other agreement or instrument to which any Seller Party is a party or by which it or any of its property is bound, result in a breach of or a default under any of the foregoing or result in or require the creation or imposition of any Lien upon any of the properties or assets of any Seller Party (except as contemplated hereby), and each Seller Party has obtained, or shall timely obtain at no expense to Buyer, all Permits, including, to the extent required, any FERC authorization, required for the performance of its obligations hereunder and thereunder and operation of the Facility in accordance with Prudent Utility Practices, the requirements of this Agreement, the Ancillary Documents and all applicable Requirements of Law.
(d) Each of this Agreement and the Ancillary Documents constitutes the legal, valid and binding obligation of each Seller Party which is party thereto enforceable in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws relating to or affecting the enforcement of creditors’ rights generally or by general equitable principles, regardless of whether such enforceability is considered in a proceeding in equity or at law.
(e) There is no pending, or to the knowledge of the Seller, threatened action or proceeding affecting any Seller Party before any Governmental Authority, which purports to affect the legality, validity or enforceability of this Agreement or any of the Ancillary Documents.
(f) None of the Seller Parties is in violation of any Requirement of Law, which violations, individually or in the aggregate, would reasonably be expected to result in a material adverse effect on the business, assets, operations, condition (financial or otherwise) or 142 of 1291
60 prospects of any Seller Party, or the ability of any Seller Party to perform any of its obligations under this Agreement or any Ancillary Document.
(g) The organizational structure and ownership of Seller and each Parent Entity, including a list of each of such entity’s Principals, is as set forth in Appendix N.

Appendix N may be updated from time to time by agreement of Buyer and Seller to account for a Change in Control that has been consented to by Buyer in accordance with this Agreement. (h) Seller is and has always been a Special Purpose Entity. (i) The Seller Parties have (i) not entered into this Agreement or any Ancillary Document with the actual intent to hinder, delay or defraud any creditor, and (ii) received reasonably equivalent value in exchange for their respective obligations under this Agreement and the Ancillary Documents. No petition in bankruptcy has been filed against any of the Seller Parties, and none of Seller, the Seller Parties or any of their respective constituent Persons have ever made an assignment for the benefit of creditors or taken advantage of any insolvency act for its benefit as a debtor.
(j) All of the assumptions made in the Non-Consolidation Opinion, including but not limited to any exhibits attached thereto, are true and correct. Seller has complied and will comply after the date hereof with all of the assumptions made with respect to Seller in the Non-Consolidation Opinion.
(k) None of the Seller Parties has any reason to believe that any of the Permits required to construct, maintain or operate the Facility in accordance with the requirements of this Agreement and all applicable Requirements of Law will not be timely obtained in the ordinary course of business.
(l) To the extent applicable to any Seller Party, all Tax returns and reports of each Seller Party required to be filed by it have been timely filed, and all Taxes shown on such Tax returns to be due and payable and all assessments, fees and other governmental charges upon the Seller Parties and upon its properties, assets, income, business and franchises that are due and payable have been paid when due and payable except for any such Taxes overdue for no more than sixty (60) days that are being contested in good faith by appropriate proceedings so long as such outstanding Taxes and proceedings do not (x) involve a material risk of the sale, forfeiture, loss or restriction on the use of the relevant Facility or any material part thereof or (y) cause, or could reasonably be expected to cause, a material adverse effect on Seller’s ability to perform its obligations under this Agreement. None of the Seller Parties knows of any proposed Tax assessment against any of the Seller Parties that is not being actively contested by it in good faith and by appropriate proceeding.
(m) As of the Effective Date, Seller has not assigned, transferred, conveyed, encumbered, sold or otherwise disposed of, and during the Agreement Term, Seller shall not assign, transfer, convey, encumber, sell or otherwise dispose of, any Facility Energy, Environmental Attributes, or Capacity Rights except as provided herein and except in connection with any Permitted Encumbrances.
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61 (n) Seller owns or possesses, or will own or possess in a timely manner, all patents, rights to patents, trademarks, copyrights and licenses necessary for the performance by Seller of this Agreement and the Ancillary Documents and the transactions contemplated thereby, without any conflict with the rights of others, and Seller’s use thereof does not infringe on the intellectual property rights of third parties.
(o) To Seller’s knowledge, there are no investigations, inquiries, orders, hearings, actions or other proceedings by or before any Governmental Authority that are pending or, to the best of Seller’s knowledge, threatened in connection with any Permit or Environmental Laws with respect to the Facility or the Site. Neither Seller, nor to Seller’s knowledge, any third party has used, released, generated, manufactured, produced, or stored in, on, under or about the Site any Hazardous Materials that could reasonably be expected to subject Seller or Buyer to liability under any Environmental Laws. To Seller’s knowledge, with the exception of those Hazardous Materials used and stored in accordance with Environmental Laws and pursuant to any applicable Permit, there are no Hazardous Materials used, stored or present at, in, on or under the Site that could reasonably be expected to subject the Seller or Buyer to liability under any Environmental Laws.
(p) Seller has Site Control for the Agreement Term.

Section 12.3 Covenants of Seller Related to Real Property Agreements. (a) Seller shall at all times maintain Site Control and keep, perform, observe and comply with, or cause to be kept, performed, observed and complied with, all covenants, agreements, conditions and other provisions required to be kept, performed, observed and complied with, by or on behalf of Seller from time to time pursuant to the Real Property Agreements, and Seller shall not do or permit anything to be done, the doing of which, or refrain from doing anything, the omission of which, could impair or tend to impair the rights of Seller under any Real Property Agreement, or could be grounds for the Lessor to terminate any Real Property Agreement. Seller may not remove any portions of or rights or interests in the Site under the Real Property Agreements or amend or terminate any of the Real Property Agreements, or otherwise alter, diminish, or otherwise impact any obligation of Seller under this Agreement, unless Buyer has provided prior written consent to Seller, such consent to be determined in Buyer’s reasonable discretion.
(b) Seller shall give Buyer immediate notice of (i) any default or of any event which, with the giving of notice or passage of time, or both, would become a default under any Real Property Agreement or of the receipt by Seller of any notice from the Lessor thereof, or (ii) the commencement or threat of any action or proceeding or arbitration pertaining to any Real Property Agreement. Buyer, at its option, may take any action (but shall not be obligated to take any action) from time to time deemed necessary or desirable by Buyer to prevent or cure, in whole or in part, any default by Seller under any Real Property Agreement or any development agreement for the Facility, and Seller shall cause each such agreement to provide for a right for Buyer to take any such action. Seller shall deliver to Buyer, immediately upon service or delivery thereof on, to or by Seller, a copy of each petition, summons, complaint, notice of motion, order to show cause and other pleading or paper, however designated, which shall be served or delivered in connection with any such action, proceeding or arbitration. 144 of 1291
62 (c) As long as this Agreement is in effect and except with respect to the property identified in Appendix Y, there shall be no merger of any Real Property Agreement or of any leasehold estate created thereby with the fee estate in the property subject to any Real Property Agreement, and Seller will not acquire any interest in such fee estate without the prior written consent of Buyer.
(d) Except with respect to the property identified in Appendix Y, Seller shall not modify, subordinate or amend any Real Property Agreement in any respect, either orally or in writing, and Seller shall not terminate, cancel, sever or surrender, or permit or suffer the modification, subordination, amendment, termination, cancellation, severance or surrender of any Real Property Agreement and shall not waive, excuse, condone or in any way release or discharge the Lessor of or from the obligations, covenants, conditions and agreements by the Lessor to be kept, performed, observed or complied with thereunder, and any such action taken by Seller without the prior written consent of Buyer shall be void at inception and of no force and effect.
(e) Subject to the rights of Facility Lender as set forth in the Financing Agreements, in the event of the termination, rejection, or disaffirmance by Lessor (or by any receiver, trustee, custodian, or other party that succeeds to the rights of the Lessor) under any Real Property Agreement pursuant to the Bankruptcy Code, Seller hereby presently, absolutely, irrevocably and unconditionally grants and assigns to Buyer the sole and exclusive right to make or refrain from making any election available to lessees under the Bankruptcy Code (including the election available pursuant to Section 365(h) of the Bankruptcy Code and any successor provision), and Seller agrees that any such election, if made by Seller without the prior written consent of Buyer (which Buyer would not anticipate granting due to the importance of the Real Property Agreement as security), shall be void at inception and of no force or effect. Without limiting the generality of the foregoing sentence, Seller shall not, without Buyer’s prior written consent, elect to treat any Real Property Agreement or the leasehold estate created thereby as terminated under Section 365 of the Bankruptcy Code, after rejection or disaffirmance of a Real Property Agreement by the Lessor (whether as debtor in possession or otherwise) or by any trustee of the Lessor, and any such election made without such consent shall be void at inception and of no force or effect. At the request of Buyer, Seller will join in any election made by Buyer under the Bankruptcy Code and will take no action in contravention of the rights granted to Buyer pursuant to this Section 12.3.
(f) In the event there is a termination, rejection, or disaffirmance by the Lessor (whether as debtor in possession or otherwise) or by any trustee of the Lessor pursuant to the Bankruptcy Code and Buyer elects to have Seller remain in possession under any legal right Seller may have to occupy the property pursuant to the affected Real Property Agreement, then Seller shall remain in such possession and shall perform all acts necessary for Seller to retain its right to remain in such possession, whether such acts are required under the then existing terms and provisions of such Real Property Agreement or otherwise. (g) Subject to the rights of Facility Lender as set forth in the Financing Agreements, in the event that a petition under the Bankruptcy Code shall be filed by or against Seller and Seller or any trustee of Seller shall decide to reject or disaffirm a Real Property Agreement pursuant to the Bankruptcy Code (or allow same), Seller shall give Buyer at least 145 of 1291
63 ten (10) days’ prior notice of the date on which application shall be made to the court for authority to reject or disaffirm such Real Property Agreement or such Real Property Agreement will be otherwise rejected. Buyer shall have the right, but not the obligation, to serve upon Seller or such trustee within such ten (10) day period a notice stating that (i) Buyer demands that Seller (whether as debtor in possession or otherwise) or such trustee assume and assign such Real Property Agreement to Buyer pursuant to the Bankruptcy Code, and (ii) Buyer covenants to cure, or to provide adequate assurance of prompt cure of, all defaults (except defaults of the type specified in Section 365(b)(2) of the Bankruptcy Code and any successor provision) and to provide adequate assurance of future performance under such Real Property Agreement. In the event that Buyer serves any such notice as provided above, neither Seller (whether as debtor in possession or otherwise) nor such trustee shall seek to reject or disaffirm such Real Property Agreement, and Seller (whether as debtor in possession or otherwise) and such trustee shall comply with such demand within thirty (30) days after such notice shall have been given, subject to Buyer’s performance of such covenant.
(h) Upon any payment by Buyer under any Real Property Agreement to cure any default of Seller or the Lessor thereunder and thereby prevent termination of the Real Property Agreement or the exercise of any other remedy of the other party or parties thereunder arising out of such default, Seller, as such lessee, within ten (10) days following receipt of notice from Buyer that it made such payment, shall pay the amount of such payment to Buyer plus interest accruing thereon at the Interest Rate, from and including the date of the payment by Buyer to cure such default to but excluding the date of such payment by the Seller. Buyer shall be entitled to offset amounts otherwise due Seller by the amount of such cure payment or remedy cost until Buyer has been fully repaid.
(i) Except with respect to the property identified in Appendix Y, Seller shall cause any Real Property Agreement to be in form and substance reasonably acceptable to Buyer and a memorandum thereof to be recorded in the applicable county. (j) Seller shall not develop or improve the Site other than so as to provide for the facilities and improvements of the Facility and the transmission line to be located thereon in accordance with this Agreement and the terms and conditions of any Permits and environmental documents required for the review of the Facility except as otherwise provided in Section 8.8.

Section 12.4 Covenants of Seller Related to Tax Equity Financing. (a) Seller shall provide Buyer with at least sixty (60) days’ prior written notice of the reasonably likely occurrence of any consolidation, merger, or reorganization or other similar transaction, or series of similar transactions, involving Seller or any Parent Entity. (b) Seller shall provide Buyer with at least sixty (60) days’ prior written notice of the consummation of a Tax Equity Financing, which notice shall include (i) introductory and contact information about and for any potential Tax Equity Investors, (ii) a summary of the provisions related to, and the structure surrounding, the power to Control the management and policies of Seller, and any entity that is jointly-owned by any Parent Entity and such Tax Equity Investor arising in connection with the Tax Equity Financing and (iii) a 146 of 1291
64 statement of the circumstances under which such provisions and structure could be modified by such Tax Equity Investor. Such notice shall be in addition to, and not in lieu of, any notice required under Section 14.7.

Section 12.5 Additional Covenants of Seller.
(a) Seller shall be a Special Purpose Entity at all times during the Agreement Term.
(b) Seller shall not, at any time, incur or permit Facility Debt in an amount that, in the aggregate, exceeds seventy percent (70%) of the Facility Cost. (c) Seller shall provide to Buyer within fifteen (15) days after the end of each of calendar quarter during the Agreement Term, a certificate of an authorized officer of Seller in the form attached hereto as Appendix P (each, a “Quarterly Certificate”). (d) Seller shall inform all investors in the Seller of the existence of this Agreement and all Ancillary Documents on or before the date of such investment in the Seller.

Section 12.6 Additional Related Projects.
(a) Buyer shall have a right of first offer to evaluate and negotiate a power purchase agreement for the output from any additional phases of the Facility developed by Seller or any Affiliate of Seller, as well as separate projects that are currently under development by, or will be developed by, Seller or any Affiliate of Seller, that will use or share infrastructure, land, or equipment (including the ability to jointly procure equipment) with the Facility (“Additional Related Project”) according to the terms and conditions of this Section 12.6. Prior to Seller entering into an agreement to sell the power from any Additional Related Project, Seller must first provide notice to Buyer of Seller’s proposed transaction, including the proposed contract price and material terms and conditions associated therewith (“Proposed PPA Notice”).

Upon receipt of the Proposed PPA Notice, Buyer will have thirty (30) Days in which to notify Seller that Buyer may purchase output from the Additional Related Project. If Buyer provides written notice to Seller that it may purchase output from the Additional Related Project, then the Parties will undertake for a period of ninety (90) days thereafter to reach an agreement on the terms and conditions of the power purchase agreement. Should Buyer decline to purchase output from any such Additional Related Project or not timely response to any Proposed PPA Notice, Seller or any Affiliate of Seller, as applicable, may consummate a power purchase agreement to any third party, provided that Seller or any Affiliate of Seller shall not subsequently offer monetary terms for the same Additional Related Project that are more favorable to another buyer without providing Buyer with a subsequent right to purchase the output from such project on such more favorable monetary terms according the provisions of this Section 12.6. Seller shall cause its Affiliates to comply with the provisions of this Section 12.6. (b) To the extent permissible under Requirements of Law, Seller shall cause the Facility to receive preference and priority in transmission and interconnection rights over new facilities developed by Seller or any Affiliate of Seller using the Project Substation. 147 of 1291
65 (c) Seller shall not share infrastructure, land, equipment or any other rights owned by it in connection with its ownership or operation of the Facility with any other entity without Buyer’s prior written consent, not to be unreasonably withhold, conditioned, or delayed.

Section 12.7 Storage Technology. In recognition of emerging technologies and opportunities that will continue to evolve during the Agreement Term, Seller shall have the right to incorporate the use of storage technologies into the Facility only upon Buyer’s prior written consent, which shall not be unreasonably withheld.

Section 12.8 Solar Technology. Seller’s failure to install or cause to be installed a solar photovoltaic energy generating system (the “Additional System”) at the Site with a nameplate capacity no less than the Parasitic Capacity is not a breach or default of this Agreement by Seller, and Seller does not owe to Buyer any damages nor will Buyer be entitled to damages from Seller for breach or default under this Section 12.8 as a result of such failure. Notwithstanding the foregoing, for each Contract Year after the Amendment Date (including the Contract Year that includes the Amendment Date), Buyer will receive a credit equal to the product of (i) Forty Dollars and Twenty-five cents ($40.25) and (ii) the Deemed Additional System Output (“System Credit”).

The total System Credit amount for each Contract Year will be credited against amounts otherwise owing by Buyer to Seller for Delivered Energy in the first, and if necessary, subsequent months of the subsequent Contract Year. On and after the Amendment Date, for purposes of this Section

12.8, the “Deemed Additional System Output” for each Contract Year will be either (i) if Seller has delivered an Independent Engineer report as described below reasonably acceptable to Buyer at any time on or by the end of such Contract Year, the annual and monthly amounts determined and certified by the Independent Engineer in the most recent Independent Engineer report that is reasonably acceptable to Buyer, or (ii) if Seller has not delivered the Independent Engineer report to Buyer at any time on or by the end of such Contract Year, an amount for such Contract Year equal to the product of (a) the Nominal Capacity Net of Parasitic Load, (b) the Auxiliary Capacity Percentage, (c) the number of hours in such Contract Year, and (d) the Solar Capacity Factor. In calculating the Deemed Additional System Output, the Independent Engineer shall take into account the expected nameplate capacity of the Additional System required to serve the Parasitic Load, the Parasitic Load, third party solar irradiation data for the geographic region in which the Additional System will be located, and expected outages and other curtailments reasonably expected for the Facility and the Additional System. If the Parties will use the Deemed Additional System Output to calculate the System Credit in any partial Contract Year, then only the estimated monthly amounts of Deemed Additional System Output included in such partial Contract Year will be used in determining the System Credit. Seller will use commercially reasonable efforts to provide Buyer an Independent Engineer report that meets the criteria set forth herein within six (6) full months after the Amendment Date. Notwithstanding the foregoing, Seller may provide an updated, revised or new Independent Engineer report that meets the criteria set forth herein at any time after the Amendment Date, which such updated, revised or new Independent Engineer report will be used to determine the System Credit thereafter as provided above.

ARTICLE XIII
DEFAULT; TERMINATION AND REMEDIES; PERFORMANCE DAMAGE
Section 13.1 Default. Each of the following events or circumstances shall constitute a “Default” by the responsible Party (the “Defaulting Party”):
148 of 1291
66 (a) Payment Default. Failure by either Party to pay any amount when and as due under this Agreement which is not cured within thirty (30) days after receiving written notice thereof from the other Party (except in the case of Seller’s failure to pay Daily Delay Damages, which shall be subject to a five Business Day cure period after receiving written notice thereof from Buyer).
(b) Buyer Performance Default. Failure by Buyer to perform any of its duties or obligations under this Agreement or any of the Ancillary Documents (except for Buyer’s obligations to receive Energy as and when required by this Agreement, the exclusive remedy for which is provided in Section 6.5, and other than any failure described in Section 13.1(a)) when and as due which is not cured within thirty (30) days after receipt of notice thereof from the Seller.
(c) Seller Performance Default. Failure by any Seller Party to perform any of its other duties or obligations under this Agreement or any of the Ancillary Documents when and as due (other than (i) any failure described in Sections 5.4(f), 9.3, 9.4, 11.7 or 13.1(a) or (f) through (n) and (ii) any failure described in an Ancillary Document with a specified cure period) which Buyer may declare to be an immediate Default for which no cure period is given, which is not cured within thirty (30) days after receipt of notice thereof from the Buyer. (d) Buyer Breach of Representation and Warranty. Inaccuracy in any material respect as of the Effective Date of any representation, warranty, certification or other statement made by the Buyer herein or in any Ancillary Document that, if capable of being used, is not cured within thirty (30) days after receipt of notice thereof or in any Ancillary Document that, if capable of being cured, is not cured within thirty (30) days after receipt of notice thereof. (e) Buyer Bankruptcy. Bankruptcy of the Buyer.
(f) Seller Bankruptcy. Bankruptcy of Seller Party.
(g) Performance Assurance Failure. The failure of Seller to (i) obtain and maintain the Performance Assurance in compliance with Sections 2.1, 3.5 and 5.4, (ii) replenish the Performance Security within the periods provided under Section 3.5, Section 5.4(d) or (iii) replace such Performance Assurance within the applicable time period set forth Section 5.4 and, in any event, at least thirty (30) days prior to its expiration, unless alternative Performance Assurance that complies with the requirements of Section 5.4 is provided within ten (10) Business Days after notice sent by Buyer of any such failure; or, with respect to any obligor providing the Performance Assurance for the benefit of Buyer:
(1) the failure of such obligor to honor a drawing or make a payment thereunder;
(2) such obligor fails to meet the acceptance of Buyer or there shall have occurred a material adverse effect on the business, assets, operations, condition (financial or otherwise) or prospects of such obligor;
149 of 1291
67 (3) the Performance Assurance issued by such obligor shall fail to be in full force and effect in accordance with the terms of this Agreement prior to the satisfaction of all obligations of Seller under this Agreement and each of the Ancillary Documents; or (4) such obligor shall repudiate, disaffirm, disclaim, or reject, in whole or in part, or challenge the validity of its Performance Assurance and in any such event, Seller fails to provide replacement Performance Assurance. (h) Material Adverse Effect. There shall have occurred a material adverse effect on the business, assets, operations, condition (financial or otherwise) or prospects of Seller or any Seller Party.
(i) Real Property Agreement Default. Any Real Property Agreement fails to be in effect, a default under a Real Property Agreement has occurred, or a Real Property Agreement is terminated for any reason or amended in any material respect without mutual agreement of the Parties except as otherwise permitted in this Agreement, if such failure, default, termination or amendment has or could reasonably be expected to have a material adverse effect on Seller’s ability to perform its obligations hereunder; provided that if the cause of such failure, default, termination or amendment is not due to Seller’s non-compliance with the terms and conditions of such Real Property Agreement, then Seller shall have a period of thirty (30) days following the date of such failure, default, termination or amendment to cure such default by reinstating or replacing such Real Property Agreement.
(j) Insurance Default. The failure of Seller to maintain, and provide acceptable evidence of, the Insurance for the required period of coverage as set forth in Appendix F unless, in the case of Seller’s failure to provide acceptable evidence of insurance, such failure is cured within two (2) Business Days after Buyer’s delivery of notice of such failure to Seller.
(k) Fundamental Change of Seller. Except as permitted by Section 14.7, (i) Seller makes an assignment of its rights or delegation of its obligations under this Agreement or any Ancillary Documents other than as a result of transaction or series of transactions that does not constitute a Change in Control, or (ii) a Change in Control occurs. (l) Failure to Provide Real-Time Data. The failure of Seller to provide any of the real-time data required to be delivered under Section 4.4(g), which failure is not cured within five (5) Business Days after receipt of written email notice thereof from Buyer; for purposes of the foregoing, “cured” means that Seller has (i) fixed the problem that caused Seller’s failure to provide real-time data and (ii) provided to Buyer all data that otherwise would have been provided to Buyer in the absence of such failure or if such data is not reasonably capable of being provided by Seller, then comparable substitute data reasonably acceptable to Buyer;
(m) Key Milestone Default. Failure by Seller to achieve (i) any Key Milestone other than the Commercial Operation Date by the date that Daily Delay Damages for all Key Milestones other than the Commercial Operation Date accrue in an aggregate amount equal to the Initial Daily Delay Damages Cap, (ii) the Commercial Operation Date by the date 150 of 1291
68 that Daily Delay Damages therefor accrue in aggregate amount equal to the COD Daily Delay Damages Cap, or (iii) the Commercial Operation Date by the Outside COD. (n) Consecutive Shortfall. The failure of the Facility during any twelve consecutive Contract Month-period to deliver Net Delivered Energy in an amount equal to at least seventy percent (70%) of the Guaranteed Monthly Delivered Energy for such Contract Months shall be a Default of Seller under this Agreement; provided that if the cause of such failure is the failure of any long-lead time equipment, including the transformer, and such failure can be corrected through repair, restoration or replacement, then no default shall be deemed to occur unless such failure continues for eighteen consecutive Contract Months so long as Seller provides (i) evidence reasonably satisfactory to Buyer that it is diligently pursuing a cure for the long-lead time equipment failure, (ii) a monthly report describing Seller’s actions to overcome such failure, and (iii) evidence reasonably satisfactory to Buyer that Seller has the ability to finance the cost of such repair, restoration or replacement work.

Section 13.2 Default Remedy.
(a) If Buyer is in Default for nonpayment, subject to any duty or obligation under this Agreement, Seller may continue to provide services pursuant to its obligations under this Agreement; provided that nothing in this Section 13.2(a) shall affect Seller’s rights and remedies set forth in this Section 13.2. Seller’s continued service to Buyer shall not act to relieve Buyer of any of its duties or obligations under this Agreement. (b) Notwithstanding any other provision herein, if any Default has occurred and is continuing, the affected Party may, whether or not the dispute resolution procedure set forth in Section 14.3 has been invoked or completed, bring an action in any court of competent jurisdiction as set forth in Section 14.13 seeking injunctive relief in accordance with applicable rules of civil procedure.
(c) Except as expressly limited by this Agreement, if a Default has occurred and is continuing and the Buyer is the Defaulting Party, Seller may without further notice exercise any rights and remedies provided herein or otherwise available at law or in equity, including termination of this Agreement pursuant to Section 13.3. No failure of Seller to exercise, and no delay in exercising, any right, remedy or power hereunder shall operate as a waiver thereof, nor shall any single or partial exercise by Seller of any other right, remedy or power hereunder preclude any other or future exercise of any right, remedy or power. (d) Except as expressly limited by this Agreement, if a Default has occurred and is continuing and the Seller is the Defaulting Party, Buyer may without further notice exercise any rights and remedies provided for herein, or otherwise available at law or equity, including (i) application of all amounts available under the Performance Assurance against any amounts then payable by Seller to Buyer under this Agreement and (ii) termination of this Agreement pursuant to Section 13.3. No failure of Buyer to exercise, and no delay in exercising, any right, remedy or power hereunder shall operate as a waiver thereof, nor shall any single or partial exercise by Buyer of any right, remedy or power hereunder preclude any other or future exercise of any right, remedy or power. Notwithstanding anything to the contrary herein, Buyer’s exclusive remedies for a Default under Section 13.1(m) are the right to terminate this 151 of 1291
69 Agreement and be paid a Termination Payment capped at the Outside COD Damages Cap as provided in Section 13.3(d).

Section 13.3 Termination for Default.
(a) If a Default occurs, the Party that is not the Defaulting Party (the “NonDefaulting Party”) may, for so long as the Default is continuing and without limiting any other rights or remedies available to the Non-Defaulting Party under this Agreement, by notice (“Termination Notice”) sent to the Defaulting Party, (i) establish a date (which shall be no earlier than the date of such notice and no later than twenty (20) days after the date of such notice) (“Early Termination Date”) on which this Agreement shall terminate and (ii) withhold any payments due in respect of this Agreement; provided, upon the occurrence of any Default of the type described in Sections 13.1(e) and (f), this Agreement shall automatically terminate, without notice or other action by either Party as if an Early Termination Date had been declared immediately prior to such event.
(b) If an Early Termination Date has been designated, the Non-Defaulting Party shall calculate in a commercially reasonable manner its Gains, Losses and Costs resulting from the termination of this Agreement and the resulting Termination Payment. The Gains, Losses and Costs relating to the Facility Energy and associated Environmental Attributes and Capacity Rights that would have been required to be delivered under this Agreement had it not been terminated shall be determined by comparing the amounts Buyer (if the Non-Defaulting Party) would have paid or Seller (if the Non-Defaulting Party) would have received therefor under this Agreement to the equivalent quantities and relevant market prices either quoted by a bona fide third party offer or which are reasonably expected by Buyer (if the Non-Defaulting Party) or by Seller (if the Non-Defaulting Party) to be available in the market under a replacement contract for this Agreement covering the same products and having a term equal to the Remaining Term at the date of the Termination Notice adjusted to account for differences in transmission, if any. It is expressly agreed that the Non-Defaulting Party shall not be required to enter into any such replacement contract in order to determine its Gains, Losses and Costs or the Termination Payment. To ascertain the market prices of a replacement contract, the NonDefaulting Party may consider, among other valuations, quotations from dealers in energy contracts and bona fide third party offers.
(c) For purposes of the Non-Defaulting Party’s determination of its Gains, Losses and Costs and the Termination Payment, it shall be assumed, regardless of the facts, that Seller would have sold, and Buyer would have purchased, each day during the Remaining Term (i) Facility Energy in an amount equal to the Assumed Daily Deliveries, (ii) the Environmental Attributes associated therewith and (iii) all Capacity Rights associated therewith. The “Assumed Daily Deliveries” is an amount equal to the greater of (x) the quotient of the Expected Annual Generation divided by 365, and (y) the average daily deliveries of Delivered Energy during the Delivery Term, if any.
(d) The Non-Defaulting Party shall aggregate its Gains, Losses and Costs as so determined into a single net amount (the “Termination Payment”) and notify the Defaulting Party thereof. The notice shall include a written statement explaining in reasonable detail the calculation of such amount. If the Non-Defaulting Party’s aggregate Losses and Costs exceed 152 of 1291
70 its aggregate Gains, the Defaulting Party will, within ten (10) Business Days of receipt of such notice, pay the net amount to the Non-Defaulting Party, which amount shall bear interest at the Interest Rate from the Early Termination Date until paid; provided that for any Event of Default of Seller under Section 13.1(m), the Termination Payment will be capped at the Outside COD Damages Cap. If the Non-Defaulting Party’s aggregate Gains exceed its aggregate Losses and Costs, the amount of the Termination Payment shall be zero. (e) If the Defaulting Party disagrees with the calculation of the Termination Payment and the Parties cannot otherwise resolve their differences, the calculation issue shall be submitted to informal non-binding dispute resolution as provided in Section 14.3. Pending resolution of the dispute, the Defaulting Party shall pay the full amount of the Termination Payment calculated by the Non-Defaulting Party as and when required by this Agreement, subject to the Non-Defaulting Party refunding, with interest at the Interest Rate, any amounts determined to have been overpaid.
(f) For purposes of this Agreement:
(1) “Gains” means, with respect to a Party, an amount equal to the present value of the economic benefit (exclusive of Costs), if any, resulting from the termination of its obligations under this Agreement, determined in a commercially reasonable manner;
(2) “Losses” means, with respect to a Party, an amount equal to the present value of the economic loss (exclusive of Costs), if any, resulting from the termination of its obligations under this Agreement, determined in a commercially reasonable manner;
(3) “Costs” means, with respect to a Party, brokerage fees, commissions and other similar transaction costs and expenses reasonably incurred in terminating any arrangement pursuant to which it has hedged its obligations or entering into new arrangements which replace this Agreement, excluding attorneys’ fees, if any, incurred in connection with enforcing its rights under this Agreement. Each Party shall use reasonable efforts to mitigate or eliminate its Costs.
(4) In no event shall a Party’s Gains, Losses or Costs include any penalties or similar charges imposed by the Non-Defaulting Party. (5) The Present Value Rate shall be used as the discount rate in all present value calculations required to determine Gains, Losses and Costs. (g) At the time for payment of any amount due under this Section, each Party shall pay to the other Party all additional amounts, if any, payable by it under this Agreement.

ARTICLE XIV

MISCELLANEOUS
Section 14.1 Authorized Representative. Each Party hereto shall designate an authorized representative who shall be authorized to act on its behalf with respect to those matters 153 of 1291
71 contained herein (each an “Authorized Representative”), which shall be the functions and responsibilities of such Authorized Representatives. Each Party may also designate an alternate who may act for the Authorized Representative. Within thirty (30) days after execution of this Agreement, each Party shall notify the other Party of the identity of its Authorized Representative, and alternate if designated, and shall promptly notify the other Party of any subsequent changes in such designation. The Authorized Representatives shall have no authority to alter, modify, or delete any of the provisions of this Agreement. Prior to the Commercial Operation Date, the Authorized Representative of each Party will meet periodically to discuss issues related to the sharing of information on the development, construction, design and operation and maintenance of the Facility. To the extent that an Authorized Representative’s contact information is not provided in Appendix C, at the time a Party designates such Authorized Representative, such Party shall concurrently provide written notice to the other Party of such Authorized Representative’s contact information.

Section 14.2 Notices. With the exception of billing invoices pursuant to Section 11.1(a) hereof, all notices, requests, demands, consents, approvals, waivers and other communications which are required under this Agreement shall be (a) in writing (regardless of whether the applicable provision expressly requires a writing), (b) deemed properly sent if delivered in person or sent by facsimile transmission, reliable overnight courier or registered or certified mail, postage prepaid to the persons specified in Appendix C, and (c) deemed delivered, given and received on the date of delivery, in the case of delivery in person, facsimile transmission, and overnight courier, or on the date of receipt or rejection in the case of registered or certified mail. In addition to the foregoing, the Parties may agree in writing at any time to deliver notices, requests, demands, consents, approvals, waivers and other communications through alternate methods, such as electronic mail.

Section 14.3 Dispute Resolution.
(a) In the event of any claim, controversy or dispute between the Parties arising out of or relating to or in connection with this Agreement (including any dispute concerning the validity of this Agreement or the scope and interpretation of this Section 14.3) (a “Dispute”), either Party (the “Notifying Party”) may deliver to the other Party (the “Recipient Party”) notice of the Dispute with a detailed description of the underlying circumstances of such Dispute (a “Dispute Notice”). The Dispute Notice shall include a schedule of the availability of the Notifying Party’s senior officers (having a title of senior vice president (or its equivalent) or higher) duly authorized to settle the Dispute during the thirty (30) day period following the delivery of the Dispute Notice.
(b) The Recipient Party shall within five (5) Business Days following receipt of the Dispute Notice, provide to the Notifying Party a parallel schedule of availability of the Recipient Party’s senior officers (having a title of senior vice president (or its equivalent) or higher) duly authorized to settle the Dispute. Following delivery of the respective senior officers’ schedules of availability, the senior officers of the Parties shall meet and confer as often as they deem reasonably necessary during the remainder of the thirty (30) day period in good faith negotiations to resolve the Dispute to the satisfaction of each Party. 154 of 1291
72 (c) In the event a Dispute is not resolved pursuant to the procedures set forth in Sections 14.3(a) and 14.3(b) by the expiration of the thirty (30) day period set forth in Section 14.3(a), then either Party may pursue any legal remedy available to it in accordance with the provisions of Section 14.12 of this Agreement. (d) As stated in Section 14.12, this Agreement shall be governed by, interpreted and enforced in accordance with laws of the State of California, without regard to the conflict of laws principles thereof. In addition to the dispute resolution process set forth in this section, parties to this Agreement must comply with California law governing claims against public entities and presentment of such claims.

Section 14.4 Further Assurances. Each Party agrees to execute and deliver all further instruments and documents, and take all further actions, not inconsistent with the provisions of this Agreement, which are reasonably necessary to effectuate the purposes and intent of this Agreement.

Section 14.5 No Dedication of Facilities. Any undertaking by one Party hereto to the other Party under any provisions of this Agreement shall not constitute the dedication of the system or any portion thereof of either Party to the public, the other Party or any other Person, and it is understood and agreed that any such undertaking by either Party shall cease upon the termination of such Party’s obligations under this Agreement.

Section 14.6 Force Majeure.
(a) A Party shall not be considered to be in default in the performance of any of its obligations under this Agreement other than an obligation to make payment when and to the extent such Party’s performance is prevented by a Force Majeure that, despite the exercise of due diligence, such Party is unable to prevent or mitigate, provided the Party has given a written detailed description of the full particulars of the Force Majeure to the other Party reasonably promptly after becoming aware thereof (and in any event within fourteen (14) days after knowledge of the initial occurrence of the claimed Force Majeure (the “Force Majeure Notice”), which notice shall include information with respect to the nature, cause and date and time of commencement of such event and the anticipated scope and duration of the delay. The Party providing such notice shall be excused from fulfilling its obligations under this Agreement until such time as the Force Majeure has ceased to prevent performance or other remedial action is taken, at which time such Party shall promptly notify the other Party of the resumption of its obligations under this Agreement. If Seller is unable to deliver, or Buyer is unable to receive, Energy due to a Force Majeure, Buyer shall have no obligation to pay Seller for the Energy not delivered or received by reason thereof. It is understood by the Parties that the foregoing provisions shall not excuse any obligations of the Seller with respect to Shortfall Energy and Replacement Energy, as provided under Article IX, whether or not caused by Force Majeure.

In no event shall Buyer be obligated to compensate Seller or any other Person for any losses, expenses or liabilities that Seller or such other Person may sustain as a consequence of any Force Majeure.
(b) The term “Force Majeure” means an event or circumstance (i) which prevents one Party from performing any of its obligations under this Agreement, (ii) which could 155 of 1291
73 not reasonably be anticipated as of the date of this Agreement, (iii) which is not within the reasonable control of, or the result of negligence, willful misconduct, breach of contract, intentional act or omission or wrongdoing on the part of the affected Party (or any subcontractor or Affiliate of that Party, or any Person under the control of that Party or any of its subcontractors or Affiliates, or any Person for whose acts such subcontractor or Affiliate is responsible), and (iv) which by the exercise of due diligence the affected Party is unable to overcome or avoid or cause to be avoided; provided, nothing in this clause (iv) shall be construed so as to require either Party to accede or agree to any provision not satisfactory to it in order to settle and terminate a strike or labor dispute in which it may be involved. Force Majeure shall include, provided the criteria in the first sentence are met, any act of God, labor disturbance, act of the public enemy, war, insurrection, riot, fire, unusual or extreme adverse weather-related events or natural disasters (such as lightning, landslide, earthquake, tornado, hurricane, storm or flood), explosion, or any order, regulation or restriction imposed by governmental, military or lawfully established civilian authorities. Any Party rendered unable to fulfill any of its obligations by reason of a Force Majeure shall exercise due diligence to remove such inability with reasonable dispatch within a reasonable time period and mitigate the effects of the Force Majeure. The relief from performance shall be of no greater scope and of no longer duration than is required by the Force Majeure. Without limiting the generality of the foregoing, a Force Majeure does not include any of the following (each an “Unexcused Cause”): (1) any requirement to comply with a RPS Law or any change (whether voluntary or mandatory) in any renewable portfolio standard that may affect the value of the Energy purchased hereunder; (2) events arising from the failure by Seller to construct, operate or maintain the Facilities in accordance with this Agreement; (3) any increase of any kind in any cost; (4) delays in or inability of a Party to obtain financing or other economic hardship of any kind; (5) Seller’s ability to sell any Energy at a price in excess of those provided in this Agreement; (6) Buyer’s ability to purchase any Energy, Environmental Attributes or Capacity Rights at a price less than those provided in this Agreement, (7) curtailment or other interruption of any Transmission Service except as otherwise expressly provided in Section 14.6(c); (8) failure of third parties to provide goods or services essential to a Party’s performance except to the extent caused by an event that otherwise constitutes Force Majeure hereunder; (9) Facility or equipment failure of any kind except to the extent caused by an event that otherwise constitutes Force Majeure hereunder; (10) any changes in the financial condition of the Buyer, any Seller Party, the Facility Lender or any subcontractor or supplier affecting the affected Party’s ability to perform its obligations under this Agreement; or (11) Seller’s inability to obtain sufficient fuel, including due to lack of fuel or power to operate the Facility except to the extent caused by an event that otherwise constitutes Force Majeure hereunder.
(c) Neither Party may raise a claim of Force Majeure based in whole or in part on curtailment or other interruption of Transmission Service for any Energy at any time unless (A) in the case of Seller, and for Replacement Energy only, (i) the Seller has contracted for Firm Transmission to be provided for the Delivered Energy or Replacement Energy on the Specified Transmission Path at the time, and (ii) the curtailment or interruption is due to “force majeure” or “uncontrollable force” or a similar term as defined under the Transmission Provider’s tariff; or (B) in the case of Buyer, the curtailment or interruption is due to “force majeure” or “uncontrollable force” on Buyer’s Transmission System; provided, that in either (A) or (B) above, the existence of the foregoing factors shall not be sufficient to conclusively or presumptively prove the existence of Force Majeure absent a showing of other facts and 156 of 1291
74 circumstances which in the aggregate with such factors establish that a Force Majeure as defined in Section 14.6(b) has occurred.
(d) If based on a Force Majeure Notice, the unaffected Party reasonably concludes that a Force Majeure or its impact on the affected Party or the Facility will continue (i) for a period of one hundred twenty (120) or more consecutive calendar days, or (ii) for an aggregate period of one hundred eighty (180) or more non-consecutive calendar days in the case of any claimed Force Majeure event or series of claimed Force Majeure events, the unaffected Party shall have the right to terminate this Agreement effective upon notice to the affected Party.

Section 14.7 Assignment of Agreement; Change in Control. (a) Buyer may assign this Agreement or the Ancillary Documents, without the consent of Seller, to (i) (x) the Participating Member or (y) one or more other members of Buyer, to a California municipal utility or (ii) (x) a joint powers authority established under the Act, or (y) a California municipal district that provides electric utility service to customers in its district, so long as, in the case of such an assignment pursuant to clause (i)(y), at the time of such assignment, such assignee had, and is reasonably forecasted to maintain, an investment grade rating from either Moody’s of “Baa3” or Standard & Poor’s of “BBB-”, or the equivalent ratings by any other credit rating agency of national standing, and so long as such credit rating is not on negative watch, and, in the case of such an assignment pursuant to clause (ii), at the time of such assignment, such assignee has, and is reasonably forecasted to maintain, an investment grade rating from either Moody’s or Standard & Poor’s equal to or better than the credit rating of the Participating Member as of the Effective Date, which is “Aa3” from Moody’s, “AA-” from Standard & Poor’s or “A+” from Fitch’s, or the equivalent ratings by any other credit rating agency of national standing, and so long as such credit rating is not on negative watch. Upon any such assignment and delegation of obligations by such an assignee, Buyer shall be relieved of and fully discharged from all its obligations hereunder, whether such obligations arose before or after the date of such assignment and delegation. All other assignments by Buyer shall require the prior written consent of Seller not to be unreasonably withheld, conditioned or delayed.
(b) Except as set forth in this Section 14.7, Seller shall not assign any of its rights, or delegate any of its obligations, under this Agreement without the prior written consent of Buyer. Any purported assignment or delegation in violation of this provision shall be null and void and of no force or effect. Any Change in Control (whether voluntary or by operation of law) shall be deemed an assignment and shall require the prior written consent of Buyer, which consent shall not be unreasonably withheld. Seller shall provide Buyer with ninety (90) days’ prior written notice of any proposed Change in Control. Concurrently with any reorganization or financing transaction or transactions constituting any Change in Control the successor entity to Seller shall acknowledge the continuing obligations of Seller under this Agreement and the Ancillary Documents. For any Change in Control pursuant to which Seller merges or consolidates with any other Person and ceases to exist, the successor entity to Seller shall execute a written assumption agreement in favor of Buyer pursuant to which any such successor entity shall assume all of the obligations of Seller under this Agreement and the Ancillary Documents and agree to be bound by all the terms and conditions of this Agreement and Ancillary Documents, as applicable. There shall be no amendments or other modifications 157 of 1291
75 to this Agreement in connection with a Change in Control unless Buyer consents to such amendments or modifications.
(c) Seller shall not sell or transfer all or any portion of the Facility or the Facility Assets to any Person other than a Person to whom Seller assigns this Agreement and the Ancillary Documents in accordance with this Section 14.7, without the prior written consent of Buyer, provided that any such sale or transfer shall be subject to compliance with the Right of First Offer and Right of First Refusal set forth in Section 14.25. Any purported sale or transfer in violation of this Section 14.7(c) shall be null and void and of no force or effect. (d) Buyer’s consent shall not be required in connection with a Permitted Transfer; provided that the terms of any Permitted Transfer, and the documentation relating thereto, comply with the applicable terms and conditions of this Agreement. Buyer’s consent shall not be required (i) in connection with the collateral assignment or pledge of this Agreement to any Facility Lender, or (ii) in connection with the pledge, directly or indirectly, of all or a portion of the membership interests in Seller to any Facility Lender; provided, however, that (1) the terms of any financing or refinancing, and the documentation relating thereto, comply with the applicable terms and conditions of this Agreement, and (2) in connection with any such assignment or pledge and the exercise of remedies by any Facility Lender, the Facility Lender acknowledges and agrees to be bound by the requirement that the Facility be operated and maintained by a Qualified Operator. Seller shall provide Buyer with sixty (60) days’ prior notice of any such collateral assignment or pledge. Notwithstanding the foregoing or anything else expressed or implied herein to the contrary, Seller shall not assign, transfer, convey, encumber, sell or otherwise dispose of all or any portion of the Energy, Environmental Attributes or Capacity Rights (not including the proceeds thereof) to any Facility Lender. (e) To facilitate Seller’s obtaining of financing to construct and operate the Facility, Buyer shall provide such consents to assignment (in substantially the form attached hereto as Appendix W) as may be reasonably requested by Seller or any Facility Lender in connection with the financing of the Facility, including the acquisition of equity for the development, construction and operation of the Facility; provided, however, that the terms of such financing and the documentation relating thereto shall not conflict with the applicable terms and conditions of this Agreement.
(f) Any collateral assignment in connection with a financing or refinancing that causes Facility Debt, in the aggregate, to exceed seventy percent (70%) of the Facility Cost as of the date of the collateral assignment is prohibited. (g) In no event shall Buyer be liable to any Facility Lender for any claims, losses, expenses or damages whatsoever other than liability Buyer may have to Seller under this Agreement. In the event of any foreclosure, whether judicial or nonjudicial, or any deed in lieu of foreclosure, in connection with any deed of trust, mortgage, or other similar Lien encumbering the Facility, such Facility Lender or its designee, and their successors in interest and assigns, shall be bound by the covenants and agreements of Seller in this Agreement; provided, however, that until the Person who acquires title to the Facility executes and delivers to Buyer a written assumption of Seller’s obligations under this Agreement in form and substance acceptable to Buyer, such Person shall not be entitled to any of the benefits of this 158 of 1291
76 Agreement. Any sale or transfer of all or any portion of the Facility by Facility Lender or its designee and their successors and assigns thereafter during the term of this Agreement shall be made only to an entity that is a Qualified Transferee. Any sale or transfer that meets the terms of this Section 14.7(g) shall not be a Change in Control and shall not require the consent of Buyer so long as Seller provides notice of any such sale or transfer at least thirty (30) days in advance of such sale or transfer or, if later, as early as is reasonably practicable (but in no event later than the date on which Seller receives notice of foreclosure). (h) Seller shall reimburse, or shall cause the Facility Lender to reimburse, Buyer for the incremental direct expenses incurred by Buyer in the preparation, negotiation, execution or delivery of any documents requested by Seller or the Facility Lender, and provided by Buyer, pursuant to this Section 14.7.

Section 14.8 Ambiguity. The Parties acknowledge that this Agreement was jointly prepared by them, by and through their respective legal counsel, and any uncertainty or ambiguity existing herein shall not be interpreted against either Party on the basis that the Party drafted the language, but otherwise shall be interpreted according to the application of the rules on interpretation of contracts.

Section 14.9 Attorneys’ Fees and Costs. Both Parties hereto agree that in any action to enforce the terms of this Agreement that each Party shall be responsible for its own attorneys’ fees and costs. Each of the Parties to this Agreement was represented by its respective legal counsel during the negotiation and execution of this Agreement. Notwithstanding the foregoing, to the extent Buyer incurs legal costs in order to facilitate a collateral assignment or pledge of this Agreement under Section 14.7, to evaluate whether the provisions of the Right of First Offer apply or whether a Change in Control has occurred, or such other action or review that is at the request of Seller, including in Section 14.7(h), or as may be required due to the actions or omissions of, Seller, Seller shall bear Buyer’s reasonable and documented legal costs therefor.

Section 14.10 Voluntary Execution. Both Parties hereto acknowledge that they have read and fully understand the content and effect of this Agreement and that the provisions of this Agreement have been reviewed and approved by their respective counsel. The Parties further acknowledge that they have executed this Agreement voluntarily, subject only to the advice of their own counsel, and do not rely on any promise, inducement, representation or warranty that is not expressly stated herein.

Section 14.11 Entire Agreement; Amendments. This Agreement (including all Appendices and Exhibits) contains the entire understanding concerning the subject matter herein and supersedes and replaces any prior negotiations, discussions or agreements between the Parties, including the Original Agreement, concerning that subject matter, whether written or oral, except as expressly provided for herein. This is a fully integrated document. Each Party acknowledges that no other party, representative or agent, has made any promise, representation or warranty, express or implied, that is not expressly contained in this Agreement that induced the other Party to sign this document. This Agreement may be amended or modified only by an instrument in writing signed by each Party, except as set forth in Section 9.4 and Section 6.4. 159 of 1291
77 Section 14.12 Governing Law. This Agreement shall be governed by, interpreted and enforced in accordance with and construed under the laws of the State of California without regard to conflict of law principles.

Section 14.13 Venue. All litigation arising out of, or relating to, this Agreement shall be brought in a state or federal court in the County of Los Angeles in the State of California. The Parties irrevocably agree to submit to the exclusive jurisdiction of such courts in the State of California and waive any defense of forum non conveniens.

Section 14.14 Execution in Counterparts, Electronic Signatures and Document Transmission.
(a) This Agreement may be executed in counterparts, and, upon execution by each signatory, each executed counterpart shall have the same force and effect as an original instrument and as if all signatories had signed the same instrument. Any signature page of this Agreement may be detached from any counterpart of this Agreement without impairing the legal effect of any signature thereon, and may be attached to another counterpart of this Agreement identical in form hereto by having attached to it one or more signature pages. (b) The Parties may execute this Agreement by original signature or by electronic signature, each of which shall have the same force and effect. A signed copy of this Agreement transmitted by facsimile, email or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original executed copy of this Agreement for all purposes, to the extent provided under applicable law, including the Federal Electronic Signatures in Global and National Commerce Act and Records Act, and California’s Uniform Electronic Transactions Act.

Section 14.15 Effect of Section Headings. Section headings appearing in this Agreement are inserted for convenience only and shall not be construed as interpretations of text.

Section 14.16 Waiver. The failure of either Party to this Agreement to enforce or insist upon compliance with or strict performance of any of the terms or conditions hereof, or to take advantage of any of its rights hereunder, shall not constitute a waiver or relinquishment of any such terms, conditions or rights, but the same shall be and remain at all times in full force and effect. Notwithstanding anything expressed or implied herein to the contrary, nothing contained herein shall preclude either Party from seeking and obtaining any available remedies for breaches not rising to the level of a Default, including recovery of damages caused by the breach of this Agreement and specific performance or injunctive relief or any other remedy given under this Agreement or now or hereafter existing in law or equity or otherwise. Seller acknowledges that money damages may not be an adequate remedy for violations of this Agreement and that Buyer may, in its sole discretion, seek and obtain from a court of competent jurisdiction specific performance or injunctive or such other relief as such court may deem just and proper to enforce this Agreement or to prevent any violation hereof. Seller hereby waives any objection to specific performance or injunctive relief. The rights granted herein are cumulative.

Section 14.17 Relationship of the Parties. This Agreement shall not be interpreted to create an association, joint venture or partnership between the Parties hereto or to impose any 160 of 1291
78 partnership obligation or liability upon either such Party. Neither Party shall have any right, power or authority to enter into any agreement or undertaking for, or act on behalf of, or to act as an agent or representative of, the other Party.

Section 14.18 Third Party Beneficiaries. The (a) the provisions of this Agreement are solely for the benefit of the Parties hereto, and (b) nothing in this Agreement, whether express or implied, shall be construed to give to, or be deemed to create in, any other Person, whether as a third party beneficiary of this Agreement or otherwise, any legal or equitable right, remedy or claim in respect of this Agreement or any covenant, condition, provision, duty, obligation or undertaking contained or established herein.

Section 14.19 Indemnification; Damage or Destruction; Insurance; Condemnation; Limit of Liability.
(a) Indemnification. Seller undertakes and agrees to indemnify and hold harmless Buyer, the Participating Member, and Buyer’s Board of Directors, and all of their officers and employees, agents, employees, advisors, and Authorized Representatives, and each of the foregoing assigns and successors in interest (collectively, “Indemnitees”), and, at the option of Buyer, defend such Indemnitees from and against any and all suits and causes of action (including proceedings before FERC), claims, charges, damages (including indirect, consequential, or incidental), demands, judgments, costs, expenses, civil fines and penalties, other monetary remedies or losses of any kind or nature whatsoever, including but not limited to attorney’s fees (including allocated costs of internal counsel) or other monetary remedies and costs of litigation, obligation or liability of any kind or nature whatsoever, in any manner arising by reason of, or incident to, or connected in any manner with the performance, non-performance or breach of this Agreement, or any other act, error or omission or willful misconduct by or of the Seller or Seller’s officers, employees, agents, subcontractors of any tier, including but not limited to any such performance, non-performance, breach, act, error or omission or willful misconduct that results in intellectual property infringement or leads to death, bodily injury or personal injury to any person, including Seller’s employees and agents or third persons, or damage or destruction to any property of any kind or nature whatsoever, of either party or third person, or loss of use (hereinafter “Indemnified Liabilities”), except to the extent caused by the gross negligence or willful misconduct of any such Indemnitee. The provisions of this paragraph shall be in addition to, and not exclusive of, any other rights or remedies which Indemnitees have at law, in equity, under this Agreement or otherwise. To the extent that the undertakings to defend, indemnify, pay and hold harmless set forth in this subsection may be unenforceable in whole or in part because they are violative of any law or public policy, Seller shall contribute the maximum portion that it is permitted to pay and satisfy under applicable law to the payment and satisfaction of all Indemnified Liabilities incurred by Indemnitees or any of them. The provisions of this paragraph shall survive the expiration or termination of this Agreement.
(b) Damage or Destruction. Subject to the consent of the Facility Lender, in the event of any damage or destruction of the Facility or any part thereof, Seller shall apply any applicable proceeds of insurance directly related to such damage or destruction to cause the Facility or such part thereof shall be diligently repaired, replaced or reconstructed by the Seller so that the Facility or such part thereof shall be restored to substantially the same general 161 of 1291
79 condition and use as existed prior to such damage or destruction, unless a different condition or use is approved by the Buyer. Proceeds of Insurance with respect to such damage or destruction maintained as provided in this Agreement shall be applied to the payment for such repair, replacement or reconstruction of the damage or destruction. (c) Insurance. Seller shall obtain and maintain the Insurance coverages listed in Appendix F.
(d) Condemnation or Other Taking. Throughout the Agreement Term, Seller shall immediately notify Buyer of the institution of any proceeding for the condemnation or other taking of the Facility or any portion thereof. Buyer may seek to participate in any such proceeding and Seller shall deliver to Buyer all instruments reasonably available to Seller that are necessary or required by Buyer to permit such participation. Without Buyer’s prior written consent, Seller (i) shall not agree to any compensation or award, and (ii) shall not take any action or fail to take any action which would cause the compensation to be determined. Subject to the consent of the Facility Lender, all awards and compensation for the taking or purchase in lieu of condemnation of the Facility or any portion thereof shall either, at the discretion of Buyer, be paid directly to Buyer (including damages and interest) in the amount of the loss in value of this Agreement to Buyer resulting from such condemnation or taking, or applied toward the repair, restoration, reconstruction or replacement of the Facility. (e) Limitation of Liability. EXCEPT TO THE EXTENT INCLUDED IN (I) DAILY DELAY DAMAGES, SHORTFALL DAMAGES, OR ANY LIQUIDATED

DAMAGES, (II) INDEMNIFICATION OBLIGATIONS BY SELLER TO THIRD PARTIES,

AND (III) ANY OTHER SPECIFIC CHARGES EXPRESSLY PROVIDED FOR HEREIN,

NEITHER PARTY HEREUNDER SHALL BE LIABLE FOR SPECIAL, INCIDENTAL,

EXEMPLARY, INDIRECT, PUNITIVE OR CONSEQUENTIAL DAMAGES ARISING OUT OF A PARTY’S PERFORMANCE OR NON PERFORMANCE UNDER THIS

AGREEMENT, WHETHER BASED ON OR CLAIMED UNDER CONTRACT, TORT (INCLUDING SUCH PARTY’S OWN NEGLIGENCE) OR ANY OTHER THEORY AT

LAW OR IN EQUITY, PROVIDED, HOWEVER, THE FOREGOING LIMITATION OF

LIABILITY SHALL NOT APPLY TO LIABILITY ARISING OUT OF THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF SELLER, OR ANY OF SELLER’S OFFICERS, AGENTS, EMPLOYEES OR SUBCONTRACTORS OF ANY TIER.

Section 14.20 Severability. In the event any of the terms, covenants or conditions of this Agreement, or the application of any such terms, covenants or conditions, shall be held invalid, illegal or unenforceable by any court having jurisdiction, all other terms, covenants and conditions of this Agreement and their application not adversely affected thereby shall remain in force and effect, provided that the remaining valid and enforceable provisions materially retain the essence of the Parties’ original bargain.

Section 14.21 Confidentiality.
(a) Each Party agrees, and shall use reasonable efforts to cause its parent, subsidiary and Affiliates, and its and their respective directors, officers, employees and representatives, as a condition to receiving confidential information hereunder, to keep 162 of 1291
80 confidential, except as required by law, all documents, data, drawings, studies, projections, plans and other written information that relate to economic benefits to or amounts payable by either Party under this Agreement and documents that are clearly marked “Confidential” at the time a Party shares such information with the other Party (“Confidential Information”). The provisions of this Section 14.21 shall survive and shall continue to be binding upon the Parties for a period of one (1) year following the date of termination or expiration of this Agreement.

Notwithstanding the foregoing, information shall not be considered Confidential Information if such information (i) is disclosed with the prior written consent of the originating Party, (ii) was in the public domain prior to disclosure or is or becomes publicly known or available other than through the action of the receiving Party in violation of this Agreement, (iii) was lawfully in a Party’s possession or acquired by a Party outside of this Agreement, which acquisition was not known by the receiving Party to be in breach of any confidentiality obligation, or (iv) is developed independently by a Party based solely on information that is not considered confidential under this Agreement.
(b) Either Party may, without violating this Section 14.21, disclose matters that are made confidential by this Agreement:
(1) to its counsel, accountants, auditors, advisors, other professional consultants, credit rating agencies, actual or prospective co-owners, investors, lenders, underwriters, contractors, suppliers and others involved in construction, operation and financing transactions and arrangements for a Party or its subsidiaries, affiliates, or parent; (2) to governmental officials and parties involved in any proceeding in which either Party is seeking a permit, certificate or other regulatory approval or order necessary or appropriate to carry out this Agreement; and (3) to governmental officials or the public as required by any law, regulation, order, rule, ruling or other Requirement of Law, including laws or regulations requiring disclosure of financial information and information material to financial matters and filing of financial reports and responding to oral questions, discovery requests, subpoenas and civil investigations or similar processes. (c) If a Party is requested or required, pursuant to any applicable law, regulation, order, rule, ruling or other Requirement of Law, discovery request, subpoena, civil investigation or similar process to disclose any of the Confidential Information, such Party shall provide prompt written notice to the other Party of such request or requirement so that at such other Party’s expense, such other Party can seek a protective order or other appropriate remedy concerning such disclosure.
(d) Notwithstanding the foregoing or any other provision of this Agreement, Seller acknowledges that Buyer, as a California joint powers authority, is subject to disclosure as required by the California Public Records Act, Cal. Govt. Code §§ 7920 et seq. (“CPRA”) and the Ralph M. Brown Act, Cal. Govt. Code §§ 54950 et seq. (“Brown Act”). Confidential Information of Seller provided to the Buyer pursuant to this Agreement shall become the property of the Buyer, and Seller acknowledges that Buyer shall not be in breach of this Agreement or have any liability whatsoever under this Agreement or otherwise for any claims 163 of 1291
81 or causes of action whatsoever resulting from or arising out of Buyer copying or releasing to a third party any of the Confidential Information of Seller pursuant to CPRA or Brown Act.

Notwithstanding the foregoing or any other provision of this Agreement, Buyer may record, register, deliver and file all such notices, statements, instruments and other documents as may be necessary or advisable to render fully valid, perfected and enforceable under all applicable law the credit support contemplated by this Agreement and the Ancillary Documents and the rights, Liens and priorities of Buyer with respect to such credit support. (e) If Buyer receives a CPRA request for Confidential Information of Seller, and Buyer or Buyer’s Authorized Representative determines that such Confidential Information is subject to disclosure under CPRA, then Buyer shall notify the Seller of the request and its intent to disclose the documents. The Buyer, as required by CPRA, shall release such documents unless the Seller timely obtains a court order prohibiting such release. If Seller (i) at its sole expense, chooses to seek a court order prohibiting the release of Confidential Information pursuant to a CPRA request, (ii) notifies Buyer of its intention to seek a court order within five (5) days after receipt of notice of such CPRA request, and (iii) undertakes and agrees to defend, indemnify and hold harmless the Indemnitees from and against all suits, claims, and causes of action brought against any Indemnitees for Buyer’s refusal to disclose Confidential Information of Seller to any person making a request pursuant to CPRA pursuant to documentation in form and substance reasonably satisfactory to Buyer, then Buyer shall, only if authorized under CPRA, delay release of the Confidential Information until Seller has had the opportunity to seek such court order. Seller’s indemnity obligations shall include, but are not limited to, all actual costs incurred by the Indemnitees, and specifically includes costs of experts and consultants, as well as all damages or liability of any nature whatsoever arising out of any such suits, claims, and causes of action brought against any Indemnitees, through and including any appellate proceedings. Seller’s obligations to all Indemnitees under this indemnification provision shall be due and payable on a monthly, ongoing basis within thirty (30) days after each submission to Seller of Buyer’s invoices for all fees and costs incurred by all Indemnitees, as well as all damages or liability of any nature.
(f) Each Party acknowledges that any disclosure or misappropriation of Confidential Information by such Party in violation of this Agreement could cause the other Party or their Affiliates irreparable harm, the amount of which may be extremely difficult to estimate, thus making any remedy at law or in damages inadequate. Therefore, each Party agrees that the non-breaching Party shall have the right to apply to any court of competent jurisdiction for a restraining order or an injunction restraining or enjoining any breach or threatened breach of this Agreement and for any other equitable relief that such non breaching Party deems appropriate. This right shall be in addition to any other remedy available to the Parties in law or equity, subject to the limitations set forth in Section 14.19(e).

Section 14.22 Mobile-Sierra. The Parties hereby stipulate and agree that this Agreement was entered into as a result of arm’s-length negotiations between the Parties. Further, the Parties believe that, to the extent the sale of Energy under this Agreement is subject to Sections 205 and 206 of the Federal Power Act, 16 U.S.C. Sections 824d and 824e, the rates, terms and conditions of this Agreement are just and reasonable within the meanings of Sections 205 and 206 of the Federal Power Act, and that the rates, terms and conditions of this Agreement will remain so during the Agreement Term.
164 of 1291
82 Notwithstanding any provision of this Agreement, the Parties waive all rights to challenge the validity of this Agreement or whether it is just and reasonable for and with respect to the Agreement Term, under Sections 205 and 206 of the Federal Power Act, and to request the FERC to revise the terms and conditions and the rates or services specified in this Agreement, and neither Party shall seek, nor shall they support any third party in seeking, to prospectively or retroactively revise the rates, terms or conditions of this Agreement through application or complaint to FERC or any other state or federal agency, board, court or tribunal, related in any manner as to whether such rates, terms or conditions are just and reasonable or in the public interest under the Federal Power Act, absent prior written agreement of the Parties.

The Parties also agree that, absent prior agreement in writing by both Parties to a proposed change, the standard of review for changes to any rate, charge, classification, term or condition of this Agreement, whether proposed by a Party (to the extent that any provision of this section is unenforceable or ineffective as to such Party), a non-Party or the FERC acting sua sponte, shall be the “public interest” application of the “just and reasonable” standard of review that requires FERC to find an “unequivocal public necessity” or “extraordinary circumstances where the public will be severely harmed” to modify a contract, as 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), and clarified by Morgan Stanley Capital Group, Inc. v. Public Util. Dist. No. 1 of Snohomish, 554 U.S. 527 at 550-51 (2008) and NRG Power Marketing, LLC v. Maine Public Utilities Comm’n, 558 U.S. 165 (2010).

Section 14.23 Service Contract . The Parties intend that this Agreement will qualify as a “Service Contract” as such term is used in Section 7701(e) of the United States Internal Revenue Code of 1986.

Section 14.24 Time is of the Essence. Time is of the essence for the performance of each of the terms and provisions of this Agreement.

Section 14.25 Right of First Offer and Right of First Refusal. Buyer shall have a “Right of First Offer” (or “ROFO”) and a “Right of First Refusal” (or “ROFR”) for any proposed sale of the Facility and related assets (“Facility Assets”) in accordance with the provisions of this Section 14.25, except that the ROFO and the ROFR shall not apply to any such sales or transfers of any interests of Seller in connection with a Tax Equity Financing or a sale, transfer or exercise of remedies in accordance with Section 14.7(g) (each a “Permitted Transfer”). (a) Prior to Seller consummating a sale of the Facility Assets (other than in connection with a Permitted Transfer), Seller shall provide notice to Buyer of Seller’s proposed transaction, including the proposed purchase price and basic terms and conditions associated therewith (a “Proposed Sale Notice”). Upon receipt of a Proposed Sale Notice, Buyer shall have sixty (60) days in which to notify Seller that Buyer may purchase the Facility Assets from Seller (a “Proposed Purchase Notice”). If Buyer provides Seller with a Proposed Purchase Notice (which notice shall, in the case of a ROFO, include Buyer’s proposed purchase price for the Facility Assets, and in the case of a ROFR, include Buyer’s response to the purchase price under consideration by Seller), then the Parties shall undertake for a period of up to ninety (90) days from the date of Buyer’s Proposed Purchase Notice to reach an agreement on the terms and conditions of a sale of the Facility Assets to Buyer. 165 of 1291
83 (b) With respect to a sale subject to the ROFO or the ROFR, if (i) Buyer does not timely provide a Proposed Purchase Notice to Seller, or (ii) the Parties are unable to agree upon the terms and conditions of a sale of the Facility Assets to Buyer within the ninety (90) day period set forth in Section 14.25(a), then Seller shall be free to negotiate the sale of the Facility Assets to any third party; provided, however, that (A) any sale of the Facility Assets to a third party shall include the assignment of this Agreement and Seller’s rights under the Ancillary Documents (in accordance with Section 14.7), and (B) prior to consummating any such sale, Seller shall provide Buyer with a concise summary of the commercial terms negotiated by Seller with the third party (a “Notice of Proposed Third Party Sale”). If the proposed purchase price set forth in the Notice of Proposed Third Party Sale is equal to or less than ninety five percent (95%) of the purchase price included in the Proposed Purchase Notice or negotiated in connection with Buyer’s exercise of the ROFO pursuant to Section 14.25(a), or otherwise on terms that are materially better than those last offered by Buyer, then Buyer shall have sixty (60) days to exercise its Right of First Refusal to purchase the Facility Assets or interests on substantially similar terms to those set forth in the Notice of Proposed Third Party Sale, subject to any modifications required to conform the transaction to requirements for transactions entered into by public agencies. If Buyer does not elect to exercise its Right of First Refusal and purchase the Facility Assets within such sixty (60) days, Seller shall be free to consummate the sale of the Facility Assets to the third party; provided that (A) such sale of the Facility Assets to a third party shall include the assignment of this Agreement and Seller’s rights and obligations under the Ancillary Documents, and (B) such sale shall be on substantially similar terms and conditions presented to Buyer in the Notice of Proposed Third Party Sale. (c) If Seller fails to (i) present a Notice of Proposed Third Party Sale within six (6) months after the expiration of the ninety (90) day period set forth in Section 14.25(a), or (ii) consummate the sale of the Facility Assets or interests to a third party within sixty (60) days after the expiration of the sixty (60) day period set forth in Section 14.25(b), then Seller shall provide another Proposed Sale Notice hereunder (and go through the ROFO process and the ROFR process) hereunder before commencing or continuing negotiations with any third party or consummating a sale of the Facility Assets or interests. (d) Neither the ROFO nor the ROFR shall apply to any sale or transfer by any Facility Lender in connection with the exercise of Facility Lender remedies under any Financing Agreement.

Section 14.26 Market Disruption Event. If at any point during the Agreement Term, the Facility, the Point of Delivery, or Buyer no longer reside in the same market that each exists in as of the Effective Date (or, in the case of the Facility, as of the Commercial Operation Date) (a “Market Disruption Event”) and such Market Disruption Event materially changes the benefits, burdens or obligations of the Parties under this Agreement, then either Party, on written notice by the affected Party, may request the other Party to enter into negotiations to make mutually acceptable changes to this Agreement as necessary or appropriate, 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 receipt of such notice requesting negotiations, the Parties will promptly (but in any event commencing no later than fifteen (15) days after such request) negotiate in good faith such changes for a period of ninety (90) days. If the Parties fail to reach agreement as to such changes after negotiating in good faith for a period of ninety (90) days, then either Party 166 of 1291
84 may submit the issue for dispute resolution pursuant to the provisions of Section 14.3.

Notwithstanding the foregoing, if a Market Disruption Event causes the performance of either Party hereunder to be impossible or impracticable, then either Party may terminate this Agreement at its option upon notice to the other Party, which such notice will be effective thirty (30) days after such notice is received by the other Party.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
167 of 1291

SIGNATURE PAGE TO AMENDED AND RESTATED POWER PURCHASE AGREEMENT

BETWEEN SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY AND STAR PEAK

GEOTHERMAL LLC
IN WITNESS WHEREOF, each Party was represented by legal counsel during the negotiation and execution of this Agreement and the Parties hereto have executed this Agreement as of the date first set forth above.

SOUTHERN CALIFORNIA PUBLIC POWER

AUTHORITY
By:

Dawn Roth Lindell
President
Attest:

Michael S. Webster
Assistant Secretary
Approved as to legal form and content:

By:

Christine Godinez
General Counsel
168 of 1291

SIGNATURE PAGE TO AMENDED AND RESTATED POWER PURCHASE AGREEMENT

BETWEEN SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY AND STAR PEAK

GEOTHERMAL LLC

STAR PEAK GEOTHERMAL LLC
By:

Name:

Title:
169 of 1291
A-1

APPENDIX A
TO THE

AMENDED AND RESTATED

POWER PURCHASE AGREEMENT

BETWEEN

SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
and

STAR PEAK GEOTHERMAL LLC

CONTRACT PRICE AND PAYMENT SCHEDULE

1. Price for Startup and Test Energy. The price for Startup and Test Energy and associated Environmental Attributes and Capacity Rights shall be equal to $35.13 per MWh.

2. Price for Delivered Energy. The price for all Delivered Energy (other than Startup and Test Energy, Excess Energy and Excess Monthly Generation) and associated Environmental Attributes and Capacity Rights shall be equal to $70.25 per MWh, as may be adjusted in accordance with the terms of this Agreement.

3. Price for Excess Energy. The price for all Excess Energy and associated Environmental Attributes and Capacity Rights shall be 50% of the price set forth in paragraph 2, as such price may be adjusted in accordance with this Agreement.

4. Price for Excess Monthly Generation. The price for Excess Monthly Generation and associated Environmental Attributes and Capacity Rights shall be the lesser of: (a) the greater of (i) $70.25 per MWh minus the Green Value, and (ii) $0.00, or (b) the greater of (i) the Market Price minus Green Value and (ii) $0.00.
170 of 1291
B-1

APPENDIX B
TO THE

AMENDED AND RESTATED

POWER PURCHASE AGREEMENT

BETWEEN

SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
and

STAR PEAK GEOTHERMAL LLC

FACILITY

1. Name of Facility: Star Peak Geothermal

2. Site: Imlay, Pershing County, NV

3. Generator Owner: Star Peak Geothermal LLC

4. Qualified Operator: Open Mountain Energy LLC

5. Equipment:
(a) Type of Facility: Geothermal - Binary
(b) Nominal Nameplate Capacity: 12.5 MW

6. Planned Commercial
Operation Date: January 15, 2021

7. Other included facilities: None

8. Permits:

BLM – NEPA: Plan of Utilization for the Star Peak
Geothermal Project
BLM – Geothermal Drilling Permits (44-28, 72-28, 46-28, 63-28, 52-28)
Nevada Division of Minerals (NDOM) Well Permits
Well NDOM Permit
E-1 N/A
44-28 286
46-28 345
171 of 1291
B-2
52-28 348
51-21 352
63-28 351
72-28 490
68-21 327
Nevada Division of Environmental Protection (NDEP)
Bureau of Water Pollution Control Underground Injection Control (UIC) Permit UNEV-922-09
Pershing County Use Permit
Nevada Division of Water Resources Permits (Permits
31850, 60881, 60882, 60884)
172 of 1291
C-1

APPENDIX C
TO THE

AMENDED AND RESTATED

POWER PURCHASE AGREEMENT

BETWEEN

SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
and

STAR PEAK GEOTHERMAL LLC

BUYER AND SELLER BILLING, NOTIFICATION AND SCHEDULING CONTACT

INFORMATION

1. Correspondence for the purpose of designating an Authorized Representative or alternate pursuant to Section 14.1 shall be transmitted to the following addresses:

1.1. If to Buyer:

Southern California Public Power Authority
1160 Nicole Court
Glendora, CA 91740
Telephone: 626-793-9364
Attention: Executive Director
Email: [email protected]

1.2. If to Seller:

Brady Olson
Chief Operating Officer
Open Mountain Energy, LLC
3451 North Triumph Blvd. Suite 201
Lehi, UT 84043
E-mail: [email protected]
For information only, telephone: (801) 885-1653

2. Billings and payments pursuant to Section 11.1 and Appendix A shall be transmitted to the following addresses:

2.1 If Billing to Buyer:

Southern California Public Power Authority
1160 Nicole Court
Glendora, CA 91740
Telephone: 626-793-9364
Attention: Finance and Accounting,
Email: [email protected]
and to: [email protected]
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2.2 If Payment to Buyer:

Southern California Public Power Authority
1160 Nicole Court
Glendora, CA 91740
Telephone: 626-793-9364
Attention: Finance and Accounting, [email protected]

2.3 If Billing to Seller:

Brady Olson
Chief Operating Officer
Open Mountain Energy, LLC
3451 North Triumph Blvd. Suite 201
Lehi, UT 84043
Phone: (801) 885-1653
E-mail: [email protected]

2.4 If Payment to Seller:

Brady Olson
Chief Operating Officer
Open Mountain Energy, LLC
3451 North Triumph Blvd. Suite 201
Lehi, UT 84043
Phone: (801) 885-1653
E-mail: [email protected]

3. All notices (other than Scheduling notices) required under this Agreement shall be sent pursuant to Section 14.2 to the address specified below.

If to Buyer:

Southern California Public Power Authority
1160 Nicole Court
Glendora, CA 91740
Telephone: 626-793-9364
Attention: Executive Director
Email: [email protected]
And, if prior to the achievement of Commercial Operation, with a copy to:

Southern California Public Power Authority
1160 Nicole Court
174 of 1291
C-3
Glendora, CA 91740
Telephone: 626-793-9364
Attention: Randy Krager, [email protected]
Email: [email protected]
If to Seller:

Brady Olson
Chief Operating Officer
Open Mountain Energy, LLC
3451 North Triumph Blvd. Suite 201
Lehi, UT 84043
E-mail: [email protected]
For information only, telephone: (801) 885-1653

4. Following the achievement of Commercial Operation, and throughout the Delivery Term, all notices related to scheduling of the Facility shall be sent to the following address:

If to Buyer:

Southern California Public Power Authority
1160 Nicole Court
Glendora, CA 91740
Telephone: 626-793-9364
Facsimile: 626-793-9461
Attention: Director of Asset Management
Email: [email protected]
With a copy to:

Glendale Water and Power
RE: Star Peak Geothermal Project
141 N. Glendale Avenue, Level 4
Glendale, CA 91206
Telephone: 818-548-3246
Attention: AGM - Power Supply
Email: [email protected]
If to Seller:

Brady Olson
Chief Operating Officer
Open Mountain Energy, LLC
3451 North Triumph Blvd. Suite 201
Lehi, UT 84043
E-mail: [email protected]
For information only, telephone: (801) 885-1653
175 of 1291
D-1

APPENDIX D
TO THE

AMENDED AND RESTATED

POWER PURCHASE AGREEMENT

BETWEEN

SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
and

STAR PEAK GEOTHERMAL LLC

FORM OF ATTESTATION
____________(Seller)____________ Environmental Attribute Attestation and Bill of Sale __________________ (“Seller”) hereby sells, transfers and delivers to Southern California Public Power Authority (“Buyer”) the Environmental Attributes and Environmental Attribute Reporting Rights associated with the generation from the Facility described below:

Facility Name:

Facility Location:

Fuel Type:

Capacity (MW): Commercial Operation Date:

As applicable:

CEC-RPS-ID no. ______ Energy Admin. ID no. ______WREGIS Generating Unit no. ______ Qualifying Facility (18 C.F.R. Sec. 292.101(b)(1)) ID no. ______ MWhrs generated (up to four (4) decimal points
Vintage (Year/Month) to account for kWhrs)
________________ ___________
________________ ___________
________________ ___________
in the amount of one Environmental Attribute or its equivalent for each megawatt hour generated, up to four decimal points to account for kWhrs.

Seller further attests, warrants and represents as follows:
i) the information provided herein is true and correct; ii) its sale to Buyer is its one and only sale of the Environmental Attributes and associated Environmental Attribute Reporting Rights referenced herein; iii) the Facility generated and delivered to the grid the Energy in the amount indicated as undifferentiated Energy; and
iv) Seller owns the Facility, and each of the Environmental Attributes and Environmental Attribute Reporting Rights associated with the generation of the indicated Energy for delivery to the grid have been generated and sold by the Facility. 176 of 1291
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This serves as a bill of sale, transferring from Seller to Buyer all of Seller’s right, title and interest in and to the Environmental Attributes and Environmental Attribute Reporting Rights associated with the generation of the Energy for delivery to the grid.

Contact Person: ____________________ tel:
177 of 1291
E-1

APPENDIX E
TO THE

AMENDED AND RESTATED

POWER PURCHASE AGREEMENT

BETWEEN

SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
and

STAR PEAK GEOTHERMAL LLC

FORM OF LETTER OF CREDIT
IRREVOCABLE AND UNCONDITIONAL DOCUMENTARY LETTER OF CREDIT NO.

Applicant:
_______________
Beneficiary:

Southern California Public Power Authority
1160 Nicole Court
Glendora, California 91740
Telephone: (626) 793-9364
Facsimile: (626) 793-9461
Amount: [___________]
Expiration Date: [__________]1
Expiration Place: [__________]:

Ladies and Gentlemen:

We hereby issue our Irrevocable and Unconditional Documentary Letter of Credit (“Letter of Credit”) in favor of the Beneficiary by order and for the account of the applicant which is available at sight for USD $XX,XXX,XXX by sight payment
(a) upon presentation to us at our office at [bank’s address] of: (i) Beneficiary’s written demand for payment containing the text of Exhibit I and (ii) Beneficiary’s signed statement containing the text of Exhibit II; or
(b) [upon both Beneficiary’s telephone or fax advice of demand to the attention of ____________________ at telephone and/or fax number _______________ and presentation to us by fax or email to address _________________ of: (i) your written demand for payment containing the text of Exhibit I and (ii) your statement containing the text of Exhibit II.]
1 Note: To be one year after issuance, subject to automatic renewals. 178 of 1291
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Funds may be drawn under this Letter of Credit, from time to time, in one or more drawings, in amounts not exceeding in the aggregate the amount specified above.

Upon presentation to us in conformity with the foregoing prior to or at 12:00 p.m., Pacific Standard Time on any business day, we will, on the next business day, or, upon presentation to us in conformity with the foregoing after 12:00 p.m. Pacific Standard Time on any business day, we will, on the second succeeding business day, but in either case without any other delay whatsoever, irrevocably and without reserve or condition: (a) if the office set forth above for presentation is in Glendora, California, pay to Beneficiary’s order in the account at the bank designated by you in the demand, the full amount demanded by you in the same-day funds which are immediately available to you, or (b) if the office set forth above for presentation is not Glendora, California, issue payment instructions to the Federal Reserve wire transfer system in proper form to transfer to the account at the bank designated by you in the demand, the full amount demanded by you in the same-day funds which are immediately available to you in Glendora, California. We agree that if, on the expiration date of this Letter of Credit, the office specified above is not open for business by virtue of an interruption of the nature described in the 2007 Revision of the Uniform Customs and Practices for Documentary Credits, International Chamber of Commerce Publication No. 600 (“UCP 600”), in Article 36, this Letter of Credit will be duly honored if the specified statements are presented by you within thirty (30) days after such office is reopened for business.

Payment hereunder shall be made regardless of: (a) any written or oral direction, request, notice or other communication now or hereafter received by us from the Applicant or any other person except Beneficiary, including without limitation any communication regarding fraud, forgery, lack of authority or other defect not apparent on the face of the documents presented by you, but excluding solely an effective written order issued otherwise than at our instance by a court of competent jurisdiction which order is legally binding upon us and specifically orders us not to make such payment; (b) the solvency, existence or condition, financial or other, of the Applicant or any other person or property from whom or which we may be entitled to reimbursement for such payment; and (c) without limiting clause (b) above, whether we are in receipt of or expect to receive funds or other property as reimbursement in whole or in part for such payment. We agree that we will not take any action to cause the issuance of an order described in clause (a) of the preceding sentence. We agree that the time set forth herein for payment of any demand(s) for payment is sufficient to enable us to examine such demand(s) and the related documents(s) referred to above with care so as to ascertain that on their face they appear to comply with the terms of this credit and that if such demand(s) and document(s) on their face appear to so comply, failure to make any such payment within such time shall constitute dishonor of such demand(s) and this credit.

The stated amount of this Letter of Credit may be increased or decreased, and the expiration date of this Letter of Credit may be extended, by an amendment to this Letter of Credit in the form of Exhibit III. Any such amendment shall become effective only upon acceptance by your signature on a hard copy amendment.

Beneficiary shall not be bound by any written or oral agreement of any type between us and the Applicant or any other person relating to this credit, whether now or hereafter existing. 179 of 1291
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We hereby engage with you that Beneficiary’s demand(s) for payment in conformity with the terms of this credit will be duly honored as set forth above. All fees and other costs associated with the issuance of and any drawing(s) against this Letter of Credit shall be for the account of the Applicant. All of the rights of the Beneficiary set forth above shall inure to the benefit of its successors. In this connection, in the event of a drawing made by a party other than the Beneficiary, such drawing must be accompanied by the following signed certification:
“The undersigned does hereby certify that ____[drawer]____ is the successor by operation of law to Southern California Public Power Authority, the Beneficiary named in [name of Bank] Letter of Credit No. __________.”
[name and title]
Except so far as otherwise expressly stated herein, this Letter of Credit is subject to the UCP 600.

As to matters not governed by the Uniform Customs, this Letter of Credit shall be governed by and construed in accordance with the laws of the State of California. Any litigation arising out of, or relating to this Letter of Credit, shall be brought in a State or Federal court in the County of Los Angeles in the State of California. The Parties irrevocably agree to submit to the exclusive jurisdiction of such courts in the State of California.

Yours faithfully,
(name of issuing bank)
By
Title
180 of 1291
E-4

EXHIBIT I

DEMAND FOR PAYMENT
Re: Irrevocable and Unconditional Documentary Letter of Credit No. ________________ Dated ___________, 20__
[Insert Bank Address]
To Whom It May Concern:

Demand is hereby made upon you for payment to us of $___________ by deposit to our account no. __________ at [insert name of bank]. This demand is made under, and is subject to and governed by, your Irrevocable and Unconditional Documentary Letter of Credit no. __________ dated __________, 20__ in the amount of $__________ established by you in our favor for the account of ____________________ as the Applicant.

DATED: ____________________, 20__.

SOUTHERN CALIFORNIA PUBLIC

POWER AUTHORITY
By:
__________________________
Name:

Title:

Date:

Attest: ________________________
Name:

Title:
181 of 1291
E-5

EXHIBIT II

STATEMENT
Re: Your Irrevocable and Unconditional Documentary Letter of Credit No. _____________ Dated ________, 20________
[Insert Bank Address]
To Whom It May Concern:

Reference is made to your Irrevocable and Unconditional Documentary Letter of Credit no. __________, dated __________, 20____ in the amount of $_____________________ established by you in our favor for the account of ________________________.

We hereby certify to you that $________________ is due and owing to us by the Applicant.

DATED: ______________, 20__.

SOUTHERN CALIFORNIA PUBLIC

POWER AUTHORITY
By:
__________________________
Name:

Title:

Date:

Attest: ________________________
Name:

Title:
182 of 1291
E-6

EXHIBIT III

AMENDMENT
Re: Irrevocable and Unconditional Documentary Letter of Credit No. ________________ Dated ________________, 20__
Beneficiary: Applicant:

Southern California Public Power
Authority 1160 Nicole Court
Glendora, CA 91740
To Whom It May Concern:

The above referenced Irrevocable and Unconditional Documentary Letter of Credit is hereby amended as follows: by increasing / decreasing / leaving unchanged (strike two) the stated amount by $ _______________ to a new stated amount of $ __________________ or by extending the expiration date to _____________________ from ____________________. All other terms and conditions of the Letter of Credit remain unchanged.

This amendment is effective only when accepted by Southern California Public Power Authority, which acceptance may only be valid by a signature of an authorized representative.

Dated: _______________________
Yours faithfully,
(name of issuing bank)
By
Title

ACCEPTED
Southern California Public Power Authority
By
Title
Date
183 of 1291
F-1

APPENDIX F
TO THE

AMENDED AND RESTATED

POWER PURCHASE AGREEMENT

BETWEEN

SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
and

STAR PEAK GEOTHERMAL LLC

INSURANCE
I. GENERAL REQUIREMENTS
Prior to the start of construction, Seller shall furnish Buyer evidence of coverage from insurers acceptable to Buyer and in a form acceptable to Buyer’s Risk Management Section in accordance with Section 14.19(c). Such insurance shall be maintained by Seller at Seller’s sole cost and expense. Such insurance shall not limit or qualify the liabilities and obligations of Seller assumed under this Agreement. Buyer shall not, by reason of its inclusion under these policies, incur liability to the insurance carrier for payment of premium for these policies.

Any insurance carried by Buyer which may be applicable shall be deemed to be excess insurance and Seller’s insurance is primary for purposes under this Agreement despite any conflicting provision in Seller’s policies to the contrary.

Said evidence of insurance shall contain a provision that the policy cannot be canceled or reduced in coverage or amount without first giving thirty (30) days’ prior notice thereof (ten (10) days for non-payment of premium) by registered mail to Buyer, addressed as follows: Southern California Public Power Authority, 1160 Nicole Court, Glendora, CA 91740.

Should any portion of the required insurance be on a “Claims Made” policy, Seller shall, at the policy expiration date following completion of work, provide evidence that the “Claims Made” policy has been renewed or replaced with a retroactive date back to the policy in effect as of the Effective Date with the same limits, terms and conditions of the expiring policy.

Seller shall be responsible for all subcontractors’ compliance with the insurance requirements.

II. SPECIFIC COVERAGES REQUIRED
A. Commercial Automobile Liability
Seller shall provide Commercial Automobile Liability insurance, which shall include coverages for liability arising out of the use of owned, non-owned and hired vehicles for performance of the work as required to be licensed under the California, or any other applicable state, vehicle code. The Commercial Automobile Liability insurance shall have not less than one million dollars ($1,000,000.00) combined single limit per occurrence and shall apply to all operations of Seller.
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The Commercial Automobile Liability policy shall include Buyer, its members, and its and their officers, agents, and employees while acting within the scope of their employment, as additional insureds with Seller and shall insure against liability for death, bodily injury or property damage resulting from the performance of this Agreement. The form of evidence of insurance shall be a Buyer Additional Insured Endorsement or an endorsement to the policy acceptable to Buyer’s Risk Management Section.

B. Commercial General Liability
Seller shall provide Commercial General Liability insurance with Blanket Contractual Liability, Independent Contractors, Broad Form Property Damage, Premises and Operations, Products and Completed Operations, fire Legal Liability and Personal Injury coverages included. Such insurance shall provide coverage for total limits actually arranged by Seller, but not less than ten million dollars ($10,000,000.00) combined single limit per occurrence. Umbrella or Excess Liability coverages may be used to supplement primary coverages to meet the required limits. Evidence of such coverage shall be on Buyer’s Additional Insured Endorsement form or on an endorsement to the policy acceptable to Buyer’s Risk Management Section and shall provide for the following:

1. Include Buyer and its officers, agents, and employees as additional insureds with the Named Insured for the activities and operations under this Agreement.

2. Include Severability-of-Interest or Cross-Liability Clause such as:
“The policy to which this endorsement is attached shall apply separately to each insured against whom a claim is made or suit is brought, except with respect to the limits of the company’s liability.”

3. Include a description of the coverages included under the policy.

C. Excess Liability
Seller may use an Umbrella or Excess Liability Coverage to meet coverage limits specified in this Agreement. Seller shall require the carrier for Excess Liability to properly schedule and to identify the underlying policies as provided for Buyer on the Buyer Additional Insured Endorsement Form, or on an endorsement to the policy acceptable to Buyer’s Risk Management Section. Such policy shall include, as appropriate, coverage for Commercial General Liability, Commercial Automobile Liability, Employer’s Liability or other applicable insurance coverages.

D. Workers’ Compensation/Employer’s Liability Insurance Seller shall provide Workers’ Compensation insurance covering all of Seller’s employees in accordance with the laws of any state in which the work of the Agreement is to be performed and including Employer’s Liability insurance, where possible, and a Waiver of Subrogation in favor of Buyer. The limit for Employer’s Liability coverage shall be not less than one million dollars ($1,000,000.00) each accident and shall be a separate policy if not included with Workers’ Compensation coverage. Evidence of such insurance shall 185 of 1291
F-3
be in the form of a Buyer Special Endorsement of insurance or on an endorsement to the policy acceptable to Buyer’s Risk Management Section. Workers’ Compensation/Employer’s Liability exposure may be self-insured, provided that Buyer is furnished with a copy of the certificate issued by the state authorizing Seller to self-insure.

Seller shall notify Buyer’s Risk Management Section by receipted delivery as soon as possible of the state withdrawing authority to self-insure.

E. Property All Risk Insurance
On and after the Commercial Operation Date, Seller shall procure and maintain an All Risk Physical Damage policy to insure the full replacement value of the property located at the Facility as described in this Agreement. The policy shall include coverage for expediting expense, extra expense, Business Interruption, ensuing loss from faulty workmanship, faulty materials or faulty design.
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G-1

APPENDIX G
TO THE

AMENDED AND RESTATED

POWER PURCHASE AGREEMENT

BETWEEN

SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
and

STAR PEAK GEOTHERMAL LLC

QUALITY ASSURANCE PROGRAM
Seller shall implement a Quality Assurance (“Q/A”) Program to ensure that the performance of the development, design and construction of the Facility fulfills the requirements of this Agreement. The Q/A Program shall provide assurance that design, purchasing, manufacturing, shipping, storage, construction, testing and examination of all equipment, materials, services and maintenance of the Facility will comply with the requirements of this Agreement, all applicable Requirements of Law and the manufacturers’ and/or suppliers’ requirements for successful operation of the Facility.

Quality at Seller
What is quality? Seller believes that quality is the unit of measure for assessing fulfillment of project goals. A quality project meets or exceeds the contract requirements and accepted standards of professional and industry practice. Furthermore, high quality projects are those that address client and societal needs more successfully than “low” quality projects. While this may seem like a straightforward definition, the process to ensure quality is much more involved and includes quality management, quality planning, quality control, quality assurance, a quality system, and total quality management.
“Quality assurance” refers to a process that reduces the potential for error throughout the phases of a project. On projects with a Q/A Program, the chances of producing a poor quality deliverable are substantially reduced. Quality control procedures are an integral part of quality assurance.

Historically, industry has used the term “quality control” to indicate a checking procedure for verifying the quality of deliverables. This checking commonly occurs at the end of the process, long after an error may have been made and compounded by subsequent work. While quality control checks at the end of a project are an essential exercise, scheduled periodic reviews at each phase of project conceptual and final design are integral to Seller’s Q/A Program. In addition, quality maintenance which meets or exceeds manufacturers’ and/or suppliers’ requirements and best industry practices must be an integral part of Seller’s Q/A Program.

The Quality Management Process
The surest way to achieve satisfactory quality is to adhere to a proven quality process. The term “quality” most accurately refers to a project’s ability to satisfy needs when considered as a whole and each part of the process meets or exceeds the standards of Prudent Utility Practices. 187 of 1291
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Seller’s project management team is responsible for proactively planning and directing the quality of the work process, services, and deliverables. Seller’s project management team will target six (6) areas to monitor quality:
1) A written work plan with accompanying Q/A Manual (as defined below). 2) Detailed review of the Facility design at the planning and conceptual design phase. 3) Detailed review of Facility final design prior to construction. 4) A quality control program during construction to verify implementation is in compliance with design documents and document any changes. 5) Independent engineering review of the entire process, from design review through Commercial Operation.
6) A written maintenance manual for the Facility for the duration of the Commercial Operation that complies with the maintenance manuals of the manufacturers and suppliers from whom Seller has purchased equipment and/or material and best industry practices.

Written Work Plan and Q/A Manual
The idea of a written work plan and Q/A manual is to incorporate quality assurance in all areas of project execution. Seller has found that quality needs to be institutionalized into the project process, not only in the budgeting process, but everywhere. For example, specific tasks and duties need to be allocated to specific individuals; roles and interface points need to be clearly defined; individual assignments need to be realistic; special attention needs to be paid to complex areas within projects; schedules need to be realistic and achievable; and, lastly, the work culture needs to be enjoyable and open so that employees are empowered to react quickly to symptoms of quality problems before they actually manifest.

Seller’s quality program shall be documented in a written work plan and Quality Assurance manual (the “Q/A Manual”). The form and the format of the Q/A Manual shall be developed by Seller, but must comply with Prudent Utility Practices and follow manufacturers’ and suppliers’ recommendations without deviation. The content of the Q/A Manual shall provide written descriptions of policies, procedures and methodology to accomplish a quality project. Seller shall submit three (3) copies of the Q/A Manual within ninety (90) days after the Effective Date to Buyer or Buyer’s Representative. The Q/A Manual shall be kept current by Seller throughout the Agreement Term through the submittal of revisions, as appropriate, by Seller to Buyer or Buyer’s Authorized Representative.

The Q/A Manual shall describe the authority and the responsibility of the Persons in charge of the Q/A Program and inspection activities. It shall also provide the plan for detailed review of Facility conceptual design and final design, hold points, and methodology for document control and comment. Furthermore, it shall provide the plan and strategy for quality control and review during the construction of the Facility and for maintenance and operations during Commercial Operation. 188 of 1291
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The Q/A Manual shall strive; at a minimum, to define control procedures or methods to assure the following:
(a) The design documents, drawings, specifications, Q/A procedures, records, inspection procedures and purchase documents are maintained to be current, accurate and in compliance with all applicable law.
(b) The purchased materials, equipment and services comply with the requirements of this Agreement and all applicable Requirements of Law.
(c) The materials received at the site are inspected for compliance with specifications. (d) The subcontracted work is adequately inspected by third parties. (e) Proper methods are employed for the qualification of personnel who are performing work for the development, design and construction of the Facility. (f) Proper documentation, control and disposition of nonconforming equipment and materials is maintained.
(g) Proper records are kept and available following project completion to ensure accurate documentation of as-built conditions.
(h) Detailed and complete plan for maintenance and operation during Commercial Operations consistent with manufacturers’ and suppliers’ recommendations and best industry practices.

Conceptual Design Review
Seller shall have a team of professionals who develop and review the Facility layout and Facility conceptual design. The team shall consist of specialists in land-use and planning, permitting, meteorology, engineering, construction, project management, and finance. A preliminary site plan is developed and meetings are held to assess optimization of the resource, constructability, minimization of cultural and biological impacts, land use restrictions, and landowner requirements.

Preliminary road design will also be started and access to the Site will be reviewed in detail. When this plan is ready for review, a formal plan and map shall be created and a final internal review is conducted. Following that shall be detailed studies for biological, cultural and other types of impacts completed by various third parties. The site plan will be reviewed, modified as necessary, and then used to begin the permitting and public review process. The site plan shall be further modified based on comments in that process. At that point, the site plan can be issued for construction, and final engineering can commence.

In parallel with this process, preliminary conceptual design will start for the major areas of the Facility, including the substation, transmission line, racking systems, and communications system; and road and grading done to develop construction estimates as well as materials specifications.

All of these areas of conceptual designs shall be used to check and verify the assumptions used for development of the site plan.
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Seller shall inform Buyer of, and shall invite Buyer to participate in, the Conceptual Design Review process.

Final Engineering Design
Following finalization of the site plan, the detailed design will be done for the roads and grading, transmission line, and substation by third party engineering firms licensed to practice in the State of California. Each firm shall have its own quality assurance and checking procedures, however, Seller shall review the final work products in detail to check with conformance with this Agreement and provide comments as a second round of quality assurance. When Seller’s comments have been incorporated, the design of each area will be considered final, and that design will then be submitted to an independent engineer for review and comment. This ensures that another entity, in addition to Seller, has done a comprehensive review of all areas of the Facility and details to ensure conformance with this Agreement.

In parallel with final design and checking activities, final geotechnical studies will be conducted at the Site, and a final resource assessment will be performed with the issued-for-construction Facility layout. If existing subsurface conditions are different from what is expected, the racking locations could be slightly modified. Any changes of this nature would be documented in as-built design drawings and approved of in advance by Seller.

Seller shall inform Buyer of, and invite Buyer to participate in, the Final Engineering Design Review process.

Quality Assurance at the Construction Site
Seller will hire a third party general contractor to construct the project. This contractor will be required to have its own quality assurance program in place using its own staff, as well as third party inspectors. This quality assurance program will be consistent with industry standards and norms and will assure all activities receive appropriate attention. The two primary areas of focus at the site are assuring conformance of construction to design drawings, and conformance of materials to specifications. The general contractor will be required to provide third party inspectors and testing for materials, including concrete slump testing, rebar and concrete placement, cable trenching and soil compaction testing. The general contractor will also be required to maintain a set of red-line drawings during the course of construction to document any changes to the design documents. Proposed project changes would be reviewed and approved in the field by the Seller construction management team prior to implementation. . In addition, Seller will have its own construction management team on site, consisting of a construction manager and quality inspectors who will observe performance of all areas of the work and ensure compliance with design documents. Lastly, the Independent Engineer performs periodic audits during construction to oversee critical items, confirms construction progress, reports on any perceived issues and provides independent reporting and assessments to the project stakeholders.

Following completion of the project, the general contractor will be required to provide all as-built design drawings and records of all materials testing conducted at the site. This documentation will be maintained at the project site during operations of the Facility. 190 of 1291
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Quality Assurance and Quality Control (“Q/C”) Activities After Commercial Operation Throughout the Agreement Term, Seller shall perform Q/A and Q/C activities on all materials and equipment associated with the Facility on a periodic basic, and at a minimum once every six (6) months. At the completion of such Q/A and Q/C activities, Seller shall provide Buyer a detailed report identifying all areas of inspections performed, a detailed checklist, results found, remedial actions taken, if any, and follow up for any corrective actions.

Seller shall provide Buyer with a schedule for performance actions needed as result of Q/A and Q/C activities. Buyer shall review the schedule and provide comments to Seller.

QUALITY ASSURANCE (Q/A) AND QUALITY CONTROL (Q/C) CHECKLIST Pre-Construction
o Third-party review of drawings and major equipment (generator step-up transformer, downhole pumps, VFD’s, switchgear, etc.)
o Geotechnical reports
o Environmental reports
Construction
o Civil: Compaction testing, concrete testing
o Electrical: Third-party review of contractor QA/QC testing and reports o Mechanical: Third-party review of contractor QA/QC testing and reports o Procurement: Third-party verification that major equipment meets design specifications o Independent Engineer Construction Reports: Periodic reports to confirm compliance with construction drawings and documents
o Commissioning and Start-up: Equipment Performance Testing (Independent Engineer Verification)
Operations
o Preventative Maintenance Plan
o Plant Inspections (2x per year)
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APPENDIX H
TO THE

AMENDED AND RESTATED

POWER PURCHASE AGREEMENT

BETWEEN

SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
and

STAR PEAK GEOTHERMAL LLC

MILESTONE SCHEDULE
Note: An “*” designates a Key Milestone.

Guaranteed Date
Milestone Description
Daily
Liquidated
Damages for
Delay ()
Security deposit at
milestone achievement
10 days following the Effective
Date
Project Development
Security (initial) $744,650
On or prior to the Commercial
Operation Date Performance Term Security $3,350,925
Completed Execute Site Control
Agreement
180 Days Prior to the Commercial
Operation Date
Execute Interconnection
agreement
Mitigation Plan
to complete
180 Days Prior to the Commercial
Operation Date
Execute project financing
documents (if any) Mitigation Plan
to complete
180 Days Prior to the Commercial
Operation Date (or an earlier date
upon notice to Seller)*
Occurrence of Construction
Commencement Date
Daily Liquidated
Damages for
Delay:
$2,068 per day
On or prior to April 1, 2021* Occurrence of Commercial
Operation Date
Daily Liquidated
Damages for
Delay:
$2,068 per day
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APPENDIX I
TO THE

AMENDED AND RESTATED

POWER PURCHASE AGREEMENT

BETWEEN

SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
and

STAR PEAK GEOTHERMAL LLC

FORM OF NON-CONSOLIDATION OPINION
Southern California Public Power Authority
1160 Nicole Court
Glendora, California 91740
RE: Power Purchase Agreement between Southern California Public Power Authority and Star Peak Geothermal LLC;
Nonconsolidation of Star Peak Geothermal LLC
Dear Sir or Madam:

We have acted as counsel to Star Peak Geothermal LLC, a Nevada limited liability company (“Seller”), in connection with that certain Power Purchase Agreement dated as of February __, 2020 (the “PPA”) between Southern California Public Power Authority (“SCPPA”) and Seller. This opinion letter is provided to you at the request of Seller pursuant to Section 2.1(y)(c) of the PPA.

OPINION REQUEST
In connection with the PPA and pursuant to the condition precedent to the Effective Date of the PPA set forth in Section 2.1(y)(c) thereof, Seller has requested that we provide you with our opinion whether, in a properly presented and argued case under title 11 of the United States Code, 11 U.S.C. § 101 et seq. (the “Bankruptcy Code”) in which any Parent Entity, Ultimate Parent Entity, or any other Seller Affiliate (as such terms are defined in the PPA; collectively, an “Opinion Entity”) is the debtor, a United States bankruptcy court or other court exercising bankruptcy jurisdiction over a case under the Bankruptcy Code (the “Court”) would order the substantive consolidation of the assets and liabilities of Seller with those of such Opinion Entity.

DOCUMENTS REVIEWED
For purposes of the opinion set forth below, we have examined originals, or copies certified or otherwise identified to our satisfaction, of the following documents (collectively, the “Opinion Documents”):
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• the PPA;
• the Opinion Backup Certificate dated as of the date hereof (the “Factual Certificate”) of an officer of Seller, certifying (among other things) the authenticity and completeness of the following organizational documents of Seller (collectively, “Seller’s Organizational Documents”):
o State of Nevada Limited Liability Company Articles of Organization dated July 19, 2017 (“Seller’s Articles”);
o Operating Agreement dated as of July 19, 2017 (the “Original LLC Agreement”);
o Amended and Restated Operating Agreement dated as of October 1, 2018 (the “First Amended LLC Agreement”); and
o Second Amended and Restated Operating Agreement dated as of February __, 2020 (the “SPE LLC Agreement”).

Seller’s Articles and the SPE LLC Agreement are referred to herein together as “Seller’s Current Organizational Documents” and the Original LLC Agreement and the First Amended LLC Agreement are referred to herein together as the “Seller’s Legacy LLC Agreements”.

FACTS
I. General Factual Background Regarding Seller
We have been advised of the following general background facts relevant to the opinion set forth below:
• Seller is a limited liability company organized under Nevada law on July 19, 2017.
• Seller is developing and intends to construct, own and operate a geothermal energy generating facility with nominal nameplate capacity of 14.5 MW (the “Facility”) in Pershing County, Nevada.
• Seller has one member, Open Mountain Energy, LLC, a Delaware limited liability company (“Parent”), which holds 100% of the equity interests in Seller.
• Seller is entering into the PPA with SCPPA. The PPA provides for Seller’s sale to SCPPA of certain renewable energy and associated environmental attributes generated by the Facility.
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II. Amendment of Seller’s Organizational Documents to Make it a Special Purpose Entity In order to comply with SCPPA’s requirements in the PPA, Seller is amending and restating its First Amended LLC Agreement and replacing it with the SPE LLC Agreement.

Specifically, pursuant to the PPA, Seller is agreeing that it will at all time comply with the requirements of, and qualify as, a “Special Purpose Entity” as defined in the PPA (a “Special Purpose Entity”). Section 12.5 of PPA defines a Special Purpose Entity to mean a limited liability company which at all times prior to (except as otherwise provided below), on and after the date thereof:
(a) shall not (without the prior written consent of Buyer) (i) engage in any dissolution, liquidation or consolidation or merger with or into any other business entity, (ii) acquire by purchase or otherwise all or substantially all of the business or assets of or beneficial interest in any other entity, (iii) transfer, lease or sell, in one transaction or any combination of transactions, all or substantially all of its properties or assets except to the extent permitted herein, (iv) modify, amend or waive any provisions of its organizational documents related to its status as a Special Purpose Entity, or (v) terminate its organizational documents or its qualifications and good standing in any jurisdiction;
(b) has limited, is limiting and will limit its activities to acquiring, developing, owning, holding, selling, financing, leasing, transferring, exchanging, managing and operating the Facility, entering into the PPA with Buyer and the Ancillary Documents and transacting lawful business that is incident, necessary and appropriate to accomplish the foregoing;
(c) has not been, is not, and will not be engaged in any business other than that relating to its limited purpose as set forth in the immediately preceding subsection (b);
(d) has not had, does not have and will not have, any assets other than those related to the Facility;
(e) has held itself out and will hold itself out to the public as a legal entity separate and distinct from any other entity and has not failed and will not fail to correct any known misunderstanding regarding the separate identity of such entity, provided that (for the avoidance of doubt), the foregoing shall not restrict any Parent Entity, Ultimate Parent Entity or any other Seller Affiliate2 from identifying its indirect relationship to the Facility through Seller; (f) has maintained and will maintain its financial statements, bank accounts, accounts, books, resolutions, agreements and records separate from any other Person except as required by GAAP; provided, however, that to the extent 2 The PPA defines an “Affiliate” to mean, as to any Person, “any other Person that, directly or indirectly, is in Control of, is Controlled by or is under common Control with such Person or is a director or officer of such Person or of an Affiliate of such Person.”
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permitted by GAAP, any such consolidated financial statement shall contain a note indicating that its separate assets and liabilities are neither available to pay the debts of the consolidated entity nor constitute obligations of the consolidated entity, and has filed and will file its own tax returns (except to the extent such limited liability company is treated as a “disregarded entity” for tax purposes and is not required to file separate tax returns under applicable law);
(g) has held itself out and identified itself, and will hold itself out and identify itself, as a separate and distinct entity under its own name or in a name franchised or licensed to it by an entity other than an Affiliate of Seller (except to the extent such limited liability company is treated as a “disregarded entity” for tax purposes and is not required to file separate tax returns under applicable law) and not as a division, department or part of any other Person; (h) has maintained and will maintain its assets in such a manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets from those of any other Person;
(i) has not made and will not make loans or advances to any Person or hold evidence of indebtedness issued by any other Person (other than cash and investment-grade securities issued by an entity that is not an Affiliate of or subject to common ownership with such entity) or made any gifts or fraudulent conveyances to any Person;
(j) has not identified and will not identify its members, or any Affiliate of any member, as a division or department or part of it, and has not identified itself and shall not identify itself as a division or department of any other Person; (k) has not entered into or been a party to, and will not enter into or be a party to, any transaction with its members or Affiliates, except in the ordinary course of its business and on terms which are commercially reasonable and comparable with those which could be obtained in a comparable arm’s-length transaction with an unrelated third party;
(l) has not had and will not have any obligation to indemnify, and has not indemnified and will not indemnify its officers, managers or members, as the case may be, other than (i) the Independent Manager in connection with the Independent Manager’s actions related to the performance of the PPA, and (ii) its officers, managers, and members with respect to actions taken or omitted to be taken in good faith by such officer, manager or member with respect to the development, construction, financing, ownership and operation of the Facility; (m) has considered and shall consider the interests of its creditors in connection with all limited liability company actions;
(n) except for obligations to Facility Lenders or Tax Equity Investors, does not and will not have any of its obligations guaranteed by any Affiliate and 196 of 1291
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will not hold itself out as being responsible for the debts or obligations of any other Person;
(o) will comply with all of the terms and provisions contained in its organizational documents including the provision requiring that there be an Independent Manager at all times on and after the date hereof and has done or caused to be done and will do all things necessary to preserve its existence; (p) will not commingle, its funds or assets with those of any Person and will not participate in any cash management system with any other Person; (q) will conduct all business in its own name and, except in connection with a Tax Equity Financing utilizing a lease or inverted lease structure, from and after the Commercial Operation Date, has held, and will hold, its assets in its own name and conducted and will conduct all business in its own name; (r) has maintained and will maintain its financial statements, accounting records and other entity documents separate from any other Person and has not permitted and will not permit its assets to be listed as assets on the financial statement of any other entity except as required by GAAP; provided, however, that to the extent permitted by GAAP, any such consolidated financial statement shall contain a note indicating that its separate assets and liabilities are neither available to pay the debts of the consolidated entity nor constitute obligations of the consolidated entity;
(s) has paid and will pay its own liabilities and expenses, including the salaries of its own employees, out of its own funds and assets, and has maintained and will maintain a sufficient number of employees in light of its contemplated business operations (it being acknowledged and agreed that Seller may have no employees to the extent it contracts out its requirements for all necessary managerial, operational and other services);
(t) has observed and will observe all limited liability company formalities;
(u) has not assumed or guaranteed or become obligated for, and will not assume or guarantee or become obligated for, the debts of any other Person and has not held out and will not hold out its credit as being available to satisfy the obligations of any other Person;
(v) has not acquired and will not acquire obligations or securities of its members or any Affiliate;
(w) will allocate fairly and reasonably any overhead expenses that are shared with any Affiliate, including paying for shared space and services performed by any employee of an Affiliate;
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(x) now maintains and uses, and will maintain and use separate stationery, invoices and checks bearing its name; such stationery, invoices and checks utilized by it or utilized to collect its funds or pay its expenses have borne and shall bear its own name and shall not bear the name of any other entity unless such entity is clearly designated as being its agent;
(y) except in connection with the development or construction, or financing of the development or construction of the Facility, has not pledged and will not pledge its assets for the benefit of any other Person; (z) now has, and will have articles of organization, a certificate of formation or an operating agreement, as applicable, that provides that it will not:
(A) dissolve, merge, liquidate or consolidate; (B) sell, transfer, lease or otherwise convey all or substantially all of its assets (other than as permitted under Section

14.7 of the PPA); (C) engage in any other business activity, or amend its organizational documents with respect to the matters set forth in this definition without the affirmative vote of its Independent Manager; or (D) without the affirmative vote of its Independent Manager, file a bankruptcy or insolvency petition or otherwise institute insolvency proceedings with respect to itself or to any other entity in which it has a direct or indirect legal or beneficial ownership interest;
(aa) has been, is and intends to remain solvent and has paid and intends to continue to pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses) from its assets as the same shall have or become due, and has maintained, is maintaining and intends to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations; and (bb) has and will have no indebtedness other than (i) Facility Debt relating to the development, construction or permanent financing or refinancing for the Facility, including indebtedness in its replacement or substitution thereof, (ii) Taxes and Insurance premiums, (iii) liabilities incurred in the ordinary course of business relating to its ownership, management, administration leasing and operation of the Facility and its routine administration, which liabilities are not more than sixty (60) days past due, are not evidenced by a note and are paid when due, and which amounts are normal and reasonable under the circumstances, and in any event not in excess of one percent (1%) of the Facility Cost in the aggregate, (iv) the Performance Security and indebtedness incurred in support of or connection with the Performance Security, and (v) such other liabilities that are permitted pursuant to the PPA.

In addition to these Special Purpose Entity provisions (the “SPE Covenants”), the SPE LLC Agreement contains the following terms often associated with special purpose entities (collectively, the “Bankruptcy Remote Terms”):
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• Section 7 of the SPE LLC Agreement provides in part that Parent shall cause Seller to be operated as a Special Purpose Entity; and
• Section 10 of the SPE LLC Agreement provides that, notwithstanding anything to the contrary therein, Seller shall not without the affirmative vote of its Independent Manager:
(a) engage in any business activity (other than (A) dissolving, merging, liquidating or consolidating; (B) selling, transferring, leasing or otherwise conveying all or substantially all of its assets (other than as permitted under Section 14.7 of the PPA)) or amend its organizational documents with respect to the matters set forth in the definition of “Special Purpose Entity” in the PPA; or
(b) file a bankruptcy or insolvency petition or otherwise institute insolvency proceedings with respect to itself or to any other entity in which it has a direct or indirect legal or beneficial ownership interest.

III. Seller’s Activities Before it Became a Special Purpose Entity Because Seller’s Legacy LLC Agreements did not contain separateness covenants or other provisions designed to make Seller a “special purpose entity” with limited purposes and activities prior to its adoption of the SPE LLC Agreement, we understand that Seller may have engaged in activities (“Legacy Activities”) that would be contrary to certain of the SPE Covenants. In this regard, creditors with claims that arose before Seller’s adoption of the SPE LLC Agreement (“Legacy Claims”) may have grounds for seeking substantive consolidation of the assets and liabilities of Seller with those of other Opinion Entities that would not be available to creditors holding claims against Seller that arose after Seller’s adoption of the SPE LLC Agreement.

Given the possible difference in substantive consolidation analysis for Legacy Claims, we have inquired whether there are any Legacy Claims against Seller that will remain outstanding beyond Seller’s ordinary accounts payable cycle. According to Seller, all of the Legacy Claims will be resolved in the ordinary course of Seller’s business in a short period of time following adoption of the SPE LLC Agreement. In support of this proposition, Seller represents in the Factual Certificate that it has no outstanding long term indebtedness, either absolute or contingent; no outstanding secured obligations; and no pending litigation. In support of these representations in the Factual Certificate, we have conducted the (a) Uniform Commercial Code, federal and state tax liens and judgment liens searches, (b) litigation searches, and (c) bankruptcy searches described in Schedule 1 hereto.

These activities were not designed to be in the nature of an audit, i.e., to provide a critical assessment of the facts provided to us, but rather to confirm certain of the underlying facts and issues that might affect the reliability of this opinion letter. As such, we cannot and do not warrant the truth and accuracy of the factual assumptions on which this opinion is based, including those concerning Legacy Claims.
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ASSUMPTIONS
In rendering the opinion set forth below, we have assumed the due authorization, execution and delivery of the PPA and Seller’s Current Organizational Documents by all parties thereto, that such parties have the legal power to act in the capacities in which they are to act thereunder, the authenticity of all documents submitted to us as originals, the conformity to the original documents of all documents submitted to us as copies and the genuineness of all signatures on all documents submitted to us.

For purposes of this opinion, we have relied without investigation on the accuracy of, and compliance by Seller and Parent with, their respective representations, warranties, and covenants contained in the Opinion Documents. Except for the searches described in Schedule 1, we have made no independent investigation of the facts referred to herein and have relied for the purpose of rendering this opinion exclusively on those facts which are listed under the heading “FACTS” in this opinion, which facts are contained in the Opinion Documents. We assume that such facts have been, and will continue to be, true in all material respects, taking into account the exceptions for Seller’s Legacy Activities.

In rendering our opinion below, we have further assumed that: (a) each of the Opinion Documents, from and after the execution thereof, constitutes the legal, valid and binding obligation of each of the parties thereto, will be enforceable in accordance with their respective terms, and will not be modified in any way that we would conclude would be material to the conclusions expressed herein; (b) Seller is duly formed and, since its formation and except as set forth herein, Seller has and will continue to observe all such formalities in all respects material to separateness; (c) except as set forth herein, Seller has and will comply with the applicable terms of the Opinion Documents regarding separateness; (d) as a matter of applicable Nevada law, Seller is a separate legal entity, separate and distinct from each Opinion Entity; (e) the officers or members, as appropriate, of Seller have duly authorized all limited liability company actions of Seller, to the extent required by its organizational documents, instruments and agreements and applicable Nevada law; (f) in entering into the Opinion Documents, the parties thereto have relied upon the status of Seller as a legal entity separate and distinct from any other entity, including each Opinion Entity; (g) Seller maintains its limited liability company existence and good standing to the extent required under the laws of the State of Nevada; (h) Seller is qualified to do business in each state in which the conduct of its business so requires, except where the failure to so qualify would not have a material adverse effect on its financial condition or results of operations; (i) all material transfers between Seller and an Opinion Entity, including, without limitation, capital contributions, have been made for reasonably equivalent value and supported by fair consideration; (j) the terms and conditions of any agreements between Seller, on the one hand, and any Opinion Entity, on the other hand, are intrinsically fair and substantially similar to those that would be available on an arm’s-length basis and on customary market terms with unaffiliated third parties; (k) Seller is solvent; (1) Seller does not intend to file a voluntary application for relief under the Bankruptcy Code or any similar applicable state law with respect thereto; (m) Seller will not dissolve, merge, liquidate or consolidate; (n) Seller will not sell, transfer, lease or otherwise convey all or substantially all of its assets, except in connection with a sale-leaseback transaction permitted by the PPA; and (o) the foregoing facts and assumptions are now and (except with respect to subsections (k) and (1)) will remain accurate in all material respects at all relevant times and there 200 of 1291
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are no, and will not be any, facts or circumstances that are materially inconsistent with the foregoing facts and assumptions.

We have assumed that the SPE LLC Agreement will remain in effect, with no modifications, amendments, or deletions of any of the SPE Covenants, and SCPPA will not consent to any exceptions from or waiver of the SPE Covenants. With respect to SPE Covenants (f) and (r), we have assumed that GAAP will permit the Opinion Entities to include in any consolidated financial statements that include the assets and liabilities of Seller a note indicating that Seller’s separate assets and liabilities are neither available to pay the debts of the consolidated entity nor constitute obligations of the consolidated entity. With respect to SPE Covenant (y), which permits Seller to pledge its assets for the benefit of another Person in connection with the development or construction, or financing of the development or construction of the Facility, we have assumed that Seller will only make such a pledge to a person that it not an Affiliate, and not to an Opinion Entity.

We have further assumed that (i) the Court addressing substantive consolidation would find facts consistent with the assumptions set forth herein; and (ii) SCPPA would timely present an objection to substantive consolidation and properly brief and argue such objection and timely and properly pursue all available appeals from any adverse decision on that issue.3 We have further
assumed that a party opposing substantive consolidation would show that substantive consolidation would harm one or more parties in interest.

In rendering our opinion, we have relied, as to matters of fact, to the extent we deem necessary and proper, on representations and warranties and other statements as to certain factual matters contained in the Opinion Documents. We have made no independent investigation as to whether the representations and warranties and other statements in the Opinion Documents are accurate or complete.

THE SUBSTANTIVE CONSOLIDATION DOCTRINE
Substantive consolidation is a doctrine of federal bankruptcy law under which bankruptcy courts may, in the exercise of their general equitable powers under section 105(a) of the Bankruptcy Code, consolidate the assets and liabilities of different entities and treat them as one for purposes of the bankruptcy proceeding. See In re Augie/Restivo Baking Co., Ltd., 860 F.2d 515, 518 n.1 (2d Cir. 1988) (“Courts have found the power to consolidate substantively in the court’s general equitable powers as set forth in 11 U.S.C. § 105.”); James Talcott, Inc. v. Wharton (In re Continental Vending Machine Corp.), 517 F.2d 997, 1000 (2d Cir. 1975) (“The power to consolidate is one arising out of equity . . . .”); In re Owens Corning, 419 F.3d 195, 205 (3d Cir. 2005) (“Substantive consolidation, a construct of federal common law, emanates from equity.”), cert. denied, 126 S.Ct. 1910 (2006). There is no direct statutory authority or prescribed standard for substantive consolidation. See In re Augie/Restivo, 860 F.2d at 518; In re Bonham, 229 F.3d 750, 765 (9th Cir. 2000); Lisanti v. Lubetkin (In re Lisanti Foods, Inc.), 2006 WL 2927619, at *5 (D.N.J. Oct. 11, 2006), aff’d, 241 Fed. Appx. 1 (3d Cir. 2007). But see In re Cyberco Holdings, 3 See Simon v. New Center Hospital (In re New Center Hospital), 187 B.R. 560 (E.D. Mich. 1995); In re Standard Brands Paint Co., 154 B.R. 563 (Bankr. C.D. Cal. 1993) (substantively consolidated five debtors for voting and distribution purposes in the absence of any objection by creditors). 201 of 1291
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Inc., 431 B.R. 404, 430-31 (Bankr. W.D. Mich. 2010) (concluding that Bankruptcy Code section 542 and, to a lesser extent, Bankruptcy Code section 502(j) serve as the statutory authority for substantive consolidation); In re Stone & Webster, Inc., 286 B.R. 532, 541-43 (Bankr. D. Del. 2002) (holding that section 1123(a)(5)(C) of the Bankruptcy Code authorizes substantive consolidation in a plan of reorganization). Instead, judicially developed standards control whether substantive consolidation should be granted in any given case.

The reported decisions regarding substantive consolidation show that the cases are to a great degree sui generis and, as a result, case law is only a general guide to the potential applicability of the doctrine to any particular combination of facts. See Munford, Inc. v. TOC Retail, Inc. (In re Munford, Inc.), 115 B.R. 390 (Bankr. N.D. Ga. 1990); 2 Collier on Bankruptcy 11105.09[2] (16th ed. 2011). As several courts have noted, “as to substantive consolidation, precedents are of little value” and, therefore, each analysis must be made “on a case by case basis.” In re Crown Mach. & Welding, Inc., 100 B.R. 25, 27-28 (Bankr. D. Mont. 1989); see also In re Bonham, 229 F.3d at 765. This ad hoc approach taken by the courts has made it impossible to provide definitive guidance whether substantive consolidation will be granted or denied by a court exercising its discretionary equitable authority in any given instance.

The doctrine of substantive consolidation has evolved primarily in cases in which the courts were called upon to determine whether one corporate entity should be substantively consolidated with another corporate entity. However, a relatively few cases have involved the substantive consolidation of a partnership or limited liability company with another entity, and it appears that courts apply similar, if not identical, substantive consolidation analyses in partnership and limited liability company cases as in corporate cases. The relationship between the two entities is of much greater importance than the legal structure of the entities for consolidation purposes. 2 Collier on Bankruptcy ¶ 105.09[1][c]. See Holywell Corp. v. Bank of New York, 59 B.R. 340, 347-48 (S.D.

Fla. 1986) (affirming order approving substantive consolidation of corporate and partnership debtors’ estates; approved application of corporate substantive consolidation standards), appeal dismissed, 820 F.2d 376 (11th Cir. 1987), remanded on reh’g for dismissal of appeal, 838 F.2d 1547 (11th Cir. 1988), cert. denied, 488 U.S. 823 (1988); In re R.H.N. Realty Corp., 84 B.R. 356, 358 (Bankr. S.D.N.Y. 1988) (substantive consolidation of non-debtor partnership with debtor corporate partner denied); In re DRW Prop. Co. 82, 54 B.R. 489 (Bankr. N.D. Tex. 1985) (debtor partnership not substantively consolidated with non-debtor partnerships due to failure to satisfy balancing standard applied in corporate cases); In re Alpha & Omega Realty, Inc., 36 B.R. 416 (Bankr. D. Idaho 1984) (substantive consolidation of non-debtor partnership with debtor corporation denied); see also In re Bounds, 112 B.R. 308 (Bankr. E.D. Mo. 1990); In re Gainesville P-H Props., Inc., 106 B.R. 304 (Bankr. M.D. Fla. 1989) (substantive consolidation of partnership and corporate debtors); In re Parkway Calabasas Ltd., 89 B.R. 832 (Bankr. C.D. Cal. 1988), aff’d, 949 F.2d 1058 (9th Cir. 1991); In re N.S. Garrott & Sons, 48 B.R. 13 (Bankr. E.D. Ark. 1984) (substantive consolidation of partnership debtors denied).

A few other cases have considered the substantive consolidation of a limited liability company with other entities, see, e.g., In re Cent. European Indus. Dev. Co. LLC, 288 B.R. 572, 575-76 (Bankr. N.D. Cal. 2003); In re World Access, Inc., 301 B.R. 217 (Bankr. N.D. Ill. 2003), and at least one case has considered the substantive consolidation of various limited liability companies. See In re Eagle Creek Subdivision, LLC, 407 B.R. 206, 208 (Bankr. E.D.N.C. 2008). 202 of 1291
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As a result, our analysis is subject to the general assumption that case law regarding substantive consolidation issues involving corporations and other entities is sound authority for resolving consolidation issues arising in the context of a limited liability company. The following analysis, therefore, will discuss the issues considered by courts primarily in the corporate context, notwithstanding Seller’s organization as a limited liability company, and all references herein to “corporate” matters, insofar as they concern Seller, shall be deemed to refer to “limited liability company” matters.

The substantive consolidation of affiliated debtors’ estates can have a drastic effect on the rights of shareholders and creditors of the merging entities similar to a corporate merger:

Substantive consolidation usually results in, inter alia, pooling the assets of, and claims against, the two entities; satisfying liabilities from the resultant common fund; eliminating inter-company claims; and combining the creditors of the two companies for purposes of voting on reorganization plans.

In re Augie/Restivo Baking Co., 860 F.2d at 518. See Fed. Deposit Ins. Corp. v. Colonial Realty Co., 966 F.2d 57, 58-59 (2d Cir. 1992).4
Courts have recognized that substantive consolidation may often result in a harsh redistribution of value to some creditors at the expense of others and, therefore, the power to do so is an extraordinary remedy that must be exercised sparingly. See, e.g., In re Owens Corning, 419 F.3d at 211; Colonial Realty Co., 966 F.2d at 61; Eastgroup Props. v. Southern Motel Assoc.

Ltd., 935 F.2d 245, 248 (11th Cir. 1991); In re Augie/Restivo, 860 F.2d at 518; Drabkin v. MidlandRoss Corp. (In re Auto-Train Corp, Inc.), 810 F.2d 270, 276-77 (D.C. Cir. 1987); Chem. Bank New York Trust Co. v. Kheel, 369 F.2d 845, 847 (2d Cir. 1966). See also Bank of New York Trust Co. v. Official Unsecured Creditors’ Comm. (In re Pacific Lumber Co.), 584 F.3d 229, 249 (5th Cir. 2009); Wells Fargo Bank of Texas N.A. v. Sommers (In re Amco Ins.), 444 F.3d 690, 696 n.5 (5th Cir. 2006); Gandy v. Gandy (In re Gandy), 299 F.3d 489, 499 (5th Cir. 2002) (substantive consolidation is “an extreme and unusual remedy”).

Further, substantive consolidation should not invalidate or modify a validly perfected lien.

See Chem. Bank New York, 369 F.2d at 847; In re Tureaud, 45 B.R. 658, 663 (Bankr. N.D. Okla. 1985), aff’d, 59 B.R. 973 (N.D. Okla. 1986). If consolidation would affect such a lien, consolidation may not be appropriate and should not be ordered unless some alternative protection may be implemented. See Fed. Deposit Ins. Corp. v. Hogan (In re Gulfco Inv. Corp.), 593 F.2d 921, 927 (10th Cir. 1979); James Talcott, Inc. v. Wharton (In re Continental Vending Machine Corp.), 517 F.2d 997, 1000-02 (2d Cir. 1975), cert. denied, 424 U.S. 913 (1976). For example, it would not be appropriate to consolidate a solvent subsidiary into its parent corporation if there are creditors that hold perfected liens on the stock of the subsidiary. See In re Gulfco, 593 F.2d at 927.

The burden of proof is initially placed on the parties seeking substantive consolidation.

In re Owens Corning, 419 F.3d at 212; In re Silver Falls Petroleum Corp., 55 B.R. 495, 498 4 Substantive consolidation is not to be confused with joint administration “in which inter alia all docketing and noticing is done in one case file for more than one related case, but the estates and creditor bodies are not merged.” In re Cooper, 147 B.R. 678, 682 (Bankr. D.N.J. 1992).
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(Bankr. S.D. Ohio 1985); see In re Introgen Therapeutics, Inc., 429 B.R. 570, 582 (Bankr. W.D.

Tex. 2010) (recognizing the evidentiary burden is placed on the proponent of substantive consolidation), and the “burden of proof for those seeking consolidation is substantial.” N.S.

Garrott, 48 B.R. at 18. The court in Snider Bros. required a threshold showing of more than the mere presence of substantive consolidation “elements.” In re Snider Bros., Inc., 18 B.R. 230, 238 (Bankr. D. Mass. 1982). If successful on the issue of necessity, the proponents of substantive consolidation must carry the burden of demonstrating that the benefits of consolidation outweigh the prejudice to creditors. Id. Finally, creditors objecting to consolidation have the burden of proof on defenses to consolidation, including the question whether the benefits of consolidation outweigh the harm. See Id.

The reported decisions under the Bankruptcy Act of 1898, 30 Stat. 544 (1898), and cases decided shortly after the enactment of the Bankruptcy Code relating to substantive consolidation rely principally on the presence or absence of certain “elements” that are identical or similar to factors relevant to “piercing the corporate veil” and “alter ego” theories. See, e.g., In re Gulfco, 593 F.2d at 928-29; In re Food Fair, Inc., 10 B.R. 123 (Bankr. S.D.N.Y. 1981); In re Vecco Constr.

Indus., Inc., 4 B.R. 407 (Bankr. E.D. Va. 1980). Although the “instrumentality” or “alter ego” factors are important, if not critical, to a court’s decision regarding substantive consolidation, the requirements for substantive consolidation are not identical to those for piercing the corporate veil.

First, substantive consolidation is not concerned only with liability limitation issues; second, it may be applied to entities other than a corporation and its stockholder. Helena Chem. Co. v. Circle Land & Cattle Corp. (In re Circle Land & Cattle Corp.), 213 B.R. 870, 874-75 (Bankr. D. Kan. 1997); see also, Colonial Realty Co., 966 F.2d at 60-61 (distinguishing the two doctrines); In re Bonham, 226 B.R. 56, 76-77 (Bankr. D. Alaska 1998) (discussing the history and use of substantive consolidation), aff’d, 229 F.3d 750 (9th Cir. 2000). Further, although the standards for piercing the corporate veil vary from jurisdiction to jurisdiction, those standards are fairly fixed.

For example, in New York the defendant must have dominated the corporation, disregarded its separate existence and used it to perpetrate a fraud or other wrong. See Rochester Gas & Elec.

Corp. v. GPU, Inc., 355 Fed. Appx. 547, 549-50 (2d Cir. 2009); Wm. Passalacqua Builders, Inc. v. Resnick Developers South, Inc., 933 F.2d 131, 138 (2d Cir. 1991); Waterville Inv., Inc. v.

Homeland Sec. Network Inc., 2010 WL 2695287, at *8 (E.D.N.Y. July 2, 2010); Morris v. New York State Dept. of Taxation and Fin., 82 N.Y.2d 135, 141, 623 N.E.2d 1157, 1160-61, 603 N.Y.S.2d 807, 810-11 (N.Y. 1993). In contrast, the standards for substantive consolidation are a matter of federal bankruptcy law that should not vary from state-to-state, the standards are flexible, and there is no specific fraud or intentional tort requirement for substantive consolidation.

Other cases take factors such as those described in the previous paragraph into account within the context of a balancing test in which the interests of parties objecting to substantive consolidation are considered. In a balancing analysis, the impact of consolidation on creditors appears to have been given a greater degree of significance than mere proof of the substantive consolidation “elements.” See, e.g., In re Crown Mach., 100 B.R. 25; In re Steury, 94 B.R. 553 (Bankr. N.D. Ind. 1988); In re DRW Prop., 54 B.R. 489; In re Snider Bros., 18 B.R. 230. But cf.

In re Gainesville, 106 B.R. 304 (relying on alter ego factors). The balancing test shifts the focus from the manner in which the debtor and other entities proposed to be consolidated conducted business to the effect of substantive consolidation on creditors, and requires a balancing of the benefits derived from consolidation against the harm to some creditors caused thereby. The 204 of 1291
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fundamental premise of the balancing analysis is that the prejudicial impact of the imposition of an equitable remedy must be taken into account. See Chem. Bank New York, 369 F.2d at 847.

Finally, in Augie/Restivo, the Second Circuit set forth the following alternative tests to determine whether substantive consolidation is warranted: (i) whether creditors dealt with the entities as a single economic unit and did not rely on their separate identities in extending credit or (ii) whether the entities’ affairs are so entangled and confused that substantive consolidation will benefit all creditors. In re Augie/Restivo, 860 F.2d at 518. The Second Circuit reaffirmed these tests in Colonial Realty Co., 966 F.2d at 61. The Ninth Circuit has adopted the Augie/Restivo tests, see In re Bonham, 229 F.3d at 766, and the Third Circuit has adopted a modified version of the Augie/Restivo tests in In re Owens Corning, 419 F.3d at 211, discussed below.

Irrespective of which variant of the standard for substantive consolidation is applied, the “elements” enumerated in several cases remain relevant, but not necessarily dispositive, as to whether substantive consolidation should be granted. Two sets of substantive consolidation elements are often cited. In the cases that use an “alter ego” or “piercing the corporate veil” type analysis, the following factors are cited as relevant to the issue of whether substantive consolidation is justified:
• parent corporation owns all or a majority of the capital stock of the subsidiary;
• parent and subsidiary have common officers and directors; • parent finances subsidiary;
• parent is responsible for incorporation of subsidiary; • subsidiary has grossly inadequate capital;
• parent pays salaries, expenses or losses of subsidiary; • subsidiary has substantially no business except with parent; • subsidiary has essentially no assets except for those conveyed by parent; • parent refers to subsidiary as department or division of parent; • directors or officers of subsidiary do not act in interest of subsidiary, but take directions from parent; and
• formal legal requirements of a subsidiary as a separate and independent corporation are not observed.

In re Tureaud, 45 B.R. at 662 (citing Fish v. East, 114 F.2d 177 (10th Cir. 1940) and Gulfco, 593 F.2d at 928-29). A second statement of substantive consolidation “elements,” which are cited in some of the more recent cases, appears in Vecco Constr.:
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• the degree of difficulty in segregating and ascertaining individual assets and liabilities;
• the presence or absence of consolidated financial statements; • the profitability of consolidation at a single physical location; • the commingling of assets and business functions;
• the unity of interests and ownership between the various corporate entities; • the existence of parent and intercorporate guarantees on loans; and • the transfer of assets without formal observance of corporate formalities.

Vecco Constr., 4 B.R. at 410.

A determination as to whether substantive consolidation is or is not appropriate does not necessarily depend upon the presence or absence of some or all of the Tureaud and Vecco Constr. “elements” outlined above. For example, it is not a foregone conclusion that, if proponents demonstrate that all of the elements of substantive consolidation are present, substantive consolidation should be granted. Conversely, parties objecting to substantive consolidation cannot rely solely upon rebutting a majority of the factors to successfully defeat substantive consolidation.

One can be expected to find many of the above factors in most bankruptcy cases involving affiliated debtors. For example, stock ownership, interaffiliate transfers, incorporation caused by the parent, common directors and officers, the existence of intercorporate claims, and consolidated financial statements or tax returns are all typical of most affiliated corporations. Accordingly, these relatively common factors should be afforded less weight than the less common ones when a court is determining whether substantive consolidation is appropriate.

Factors that may be given more weight in determining that substantive consolidation is appropriate include the debtor’s failure to comply with corporate formalities in connection with directors’ and shareholders’ meetings, representations made to third parties regarding corporate entities, interaffiliate transfers and third party transactions and any other formal conduct required by corporate law. Still, the failure to consistently observe corporate formalities is usually not dispositive unless such elements, together with other evidence, support a finding of fraudulent or inequitable conduct by the debtors or their principals. For example, in In re Tureaud the court found “an almost total disregard of the corporate fiction; the corporations are a sham -- functionally indistinguishable from each other with commingling of assets and business functions.” 45 B.R. at 661. The court also found that directors and officers of the non-debtor affiliates, which were substantively consolidated with the debtor, acted in the interest of the debtor rather than independently. Some of the affiliates failed to file tax returns and others were suspended for failure to make requisite corporate filings. More significant evidence in In re Tureaud included the debtors’ principal’s fraudulent purposes for incorporation (“front to raise money for [principal’s personal] purposes, and to hinder and delay judgment creditors”), and “hopeless commingling” of assets and liabilities. Id. at 660.
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Decided at almost the same time that the Second Circuit issued its Augie/Restivo decision, the D.C. Circuit adopted a two-part “balancing test” in its decision in In re Auto-Train Corp., Inc., 810 F.2d 270 at 276. Under the Auto-Train test, the proponent of consolidation must first show that there is “a substantial identity between the parties to be consolidated [and] that consolidation is necessary to avoid some harm or realize some benefit.” Id. at 276 (citing Flora Mir Candy Corp. v. R.S. Dickson & Co., 432 F.2d 1060, 1063 (2d Cir. 1970); In re Snider Bros., Inc., 18 B.R. 230 at 237-38; and Chem. Bank New York, 369 F.2d at 847). If the proponent is able to make this case, the burden shifts to the objecting creditor to demonstrate that it “relied on the separate credit of one of the entities and that it will be prejudiced by consolidation.” Id. at 276 (citing Chem. Bank New York, 369 F.2d at 848). Even if the creditor is able to make this showing, the court may still order substantive consolidation if it determines that the benefits of substantive consolidation “heavily” outweigh the harm. Id. at 276 (citing In re Continental Vending Machines Corp., 517 F.2d at 1001).

In adopting its balancing test approach to substantive consolidation, the Auto-Train court cited to an earlier bankruptcy court decision In re Snider Bros., Inc., 18 B.R. 230. In Snider Bros., the bankruptcy court reviewed a string of Second Circuit decisions identifying grounds for substantive consolidation before applying a balancing test analysis. Id. at 234-38 (reviewing Soviero v. Franklin National Bank, 328 F.2d 446 (2d Cir. 1964); Chemical Bank New York, 369 F.2d 845; Flora Mir Candy Corp. v. R.S. Dickson & Co., 432 F.2d 1060; In re Continental Vending Machine Corp., 517 F.2d 997). The Snider Bros. court focused on objecting creditors’ interests instead of “elements” that are largely attributable to the debtors’ pre-petition conduct:

A review of the case law reveals that equity has provided the remedy of consolidation in those instances where it has been shown that the possibility of economic prejudice which would result from continued corporate separateness outweighed the minimal prejudice that consolidation would cause. While several courts have recently attempted to delineate what might be called “the elements of consolidation” [citing Vecco Constr. and Food Fair], I find that the only real criterion is that which I have referred to, namely the economic prejudice of continued debtor separateness versus the economic prejudice of consolidation.

There is no one set of elements which, if established, will mandate consolidation in every instance. Moreover, the fact that corporate formalities may have been ignored, or that different debtors are associated in business in some way, does not by itself lead inevitably to the conclusion that it would be equitable to merge otherwise separate estates.

In re Snider Bros., 18 B.R. at 234 (emphasis added). The court articulated the following balancing test principles: (1) the proponent must demonstrate a “necessity for consolidation, or a harm to be avoided by use of the equitable remedy of consolidation”; (2) supporting evidence must go beyond a mere showing of commingling or unity of interest and must demonstrate the harm caused thereby or prejudice without consolidation; (3) “elements” are only one factor in the proof of necessity; and (4) even if the proponent can demonstrate the necessity for consolidation, objecting creditors possess the defense that the benefits of consolidation do not counterbalance the harm to the objector. Id. at 238.
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The balancing test formulated in Snider Bros. has been adopted, either expressly (see In re Steury, 94 B.R. at 554; In re Alico Mining, Inc., 278 B.R. 586, 588-89 (Bankr. M.D. Fla. 2002); In re DRW Prop., 54 B.R. at 495; In re Donut Queen, Ltd., 41 B.R. 706, 709-10 (Bankr. E.D.N.Y. 1984); In re F.A. Potts & Co., Inc., 23 B.R. 569, 572 (Bankr. E.D. Pa. 1982); In re Lewellyn, 26 B.R. 246, 251 (Bankr. S.D. Iowa 1982); Holywell Corp., 59 B.R. at 347), or implicitly (see In re Luth, 28 B.R. 564, 567 (Bankr. D. Idaho 1983) (citing Snider Bros. test as another “element”); In re Helms, 48 B.R. 714, 717 (Bankr. D. Conn. 1985) (balancing interests is another important factor); In re N.S. Garrott, 48 B.R. at 18 (adopting Snider Bros. principles as important factors); In re Silver Falls, 55 B.R. at 498) by a majority of courts outside the Second Circuit (since the Augie/Restivo decision), the Third Circuit (since Owens Corning), and the Ninth Circuit (since Bonham).

Although the traditional substantive consolidation “elements” are generally still relevant under the more recent case law, the importance of these elements is not settled. Snider Bros. and its direct progeny tend to relegate proof of the substantive consolidation “elements” to a secondary role, i.e., the “elements” may be considered, in the aggregate, as a single factor in a balancing analysis. In re Snider Bros., 18 B.R. at 234. However, some courts take the opposite approach by treating the conclusion reached under the balancing test as another, albeit important, “element” in the general substantive consolidation “elements” analysis. See, e.g., In re Luth, 28 B.R. at 567 (citing Snider Bros. test as another “element”).

Nevertheless, a review of reported decisions suggests that courts have moved away from a substantive consolidation analysis which primarily relies on a check list of “elements.” See In re Owens Corning, 419 F.3d at 210-11 (refusing to adopt a set of factors for consideration in substantive consolidation because “[t]oo often the factors in a checklist fail to separate the unimportant from the important, or even to set out a standard to make the attempt.”). As noted above, the Second, Third and Ninth Circuits all have adopted a third approach to substantive consolidation that limits the use of substantive consolidation to “compelling circumstances.” In re Owens Corning, 419 F.3d at 211; see also In re Augie/Restivo, 860 F.2d at 518; In re Bonham, 229 F.3d at 766.

The Augie/Restivo tests result in (i) the reduction of the traditional “elements” to a single significant factor—financial entanglement—and (ii) the application of the balancing test with emphasis on creditors’ alleged reliance on the consolidated credit of the entities proposed to be consolidated. Accordingly, in Augie/Restivo, the Second Circuit reviewed two “critical factors,” namely, “whether creditors dealt with the entities as a single economic unit and ‘did not rely on their separate identity in extending credit’ . . . [or] whether the affairs of the debtors are so entangled that consolidation will benefit all creditors.” Augie/Restivo, 860 F.2d at 518 (citations omitted). The presence of either factor is sufficient to grant substantive consolidation. Id. at 518; In re Bonham, 229 F.3d at 766. See also In re 599 Consumer Electronics, Inc., 195 B.R. 244, 250 (S.D.N.Y. 1996) (“A finding that creditors knew they were dealing with separate entities does not necessarily preclude substantive consolidation on the ground that it is impossible or prohibitively expensive to unravel the debtors’ commingled finances.”) In expanding on the “corporate separateness” prong of the Augie/Restivo tests, the Third Circuit held that a prima facie case for substantive consolidation exists when, based on the parties’ 208 of 1291
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prepetition dealings, a proponent can prove “corporate disregard creating contractual expectations of creditors that they were dealing with debtors as one indistinguishable entity.” In re Owens Corning, 419 F.3d at 212 (footnote omitted). To this end, proponents of substantive consolidation “must also show that, in their prepetition course of dealing, they actually and reasonably relied on debtors’ supposed unity.” Id. (internal citation omitted). An opponent of consolidation can defeat this prima facie showing by proving it would be “adversely affected” by consolidation and that it “actually relied on debtors’ separate existence.” Id.

Courts applying the Augie/Restivo “entanglement” prong of the test have recognized that substantive consolidation of estates that failed to observe any corporate formalities or whose financial affairs had not been properly segregated may inure to the benefit of all creditors:
[I]n the rare case such as this, where the interrelationships of the group are hopelessly obscured and the time and expense necessary even to attempt to unscramble them so substantial as to threaten the realization of any net assets for all the creditors, equity is not helpless to reach a rough approximation of justice to some rather than deny any to all.

Chem. Bank New York, 369 F.2d at 847.

However, the degree of entanglement is the central question to be examined, because the potentially prejudicial effect of substantive consolidation is not likely to be justified based on mere contentions of administrative convenience. It is important to note that the courts appear to have established a stringent standard for the degree to which the affairs of the entities to be consolidated need to be obscured by commingled funds or lax corporate form before consolidation is appropriate. In reversing the lower court’s substantive consolidation order, the Second Circuit in Augie/Restivo held:

Resort to consolidation in such circumstances [corporate affiliates with commingled assets and business functions], however, should not be Pavlovian.

Rather, substantive consolidation should be used only after it has been determined that all creditors will benefit because untangling is either impossible or so costly as to consume the assets . . . . Commingling, therefore, can justify substantive consolidation only where “the time and expense necessary even to attempt to unscramble them [is] so substantial as to threaten the realization of any net assets for all the creditors” . . . or where no accurate identification and allocation of assets is possible. In such circumstances, all creditors are better off with substantive consolidation.

In re Augie/Restivo, 860 F.2d at 519 (emphasis added) (citations omitted). Perfection in identifying and allocating assets is not necessary to avoid substantive consolidation. See In re Owens Corning, 419 F.3d at 214 (“Neither the impossibility of perfection in untangling the affairs of the entities nor the likelihood of some inaccuracies in efforts to do so is sufficient to justify consolidation.”).

Under the Augie/Restivo “entanglement” analysis, poor or nonexistent record keeping of separate assets (particularly cash and other liquid assets) and liabilities and interaffiliate 209 of 1291
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transactions is one of the more common reasons for imposing substantive consolidation. When the combination of affiliates’ assets, liabilities, and business affairs is so “hopelessly entangled” that segregation is either prohibitively expensive or impossible, courts are more willing to grant substantive consolidation.

In adopting the Augie/Restivo tests, the Third Circuit in Owens Corning narrowed the circumstances when entanglement justifies substantive consolidation. The Third Circuit held that every creditor must benefit from consolidation and, moreover, “the benefit to creditors should be from cost savings that make assets available rather than from the shifting of assets to benefit one group of creditors at the expense of another.” 419 F.3d at 214. Benefit to only some creditors or administrative benefit to the court “falls far short” of that necessary to justify substantive consolidation. Id.

Regardless of the standard for substantive consolidation used by the courts in any given instance, in all three approaches the courts generally (i) identify the presence or absence of the relevant substantive consolidation elements, (ii) decide the weight to be attached to such elements, then (iii) determine the significance of competing considerations offered by the objecting creditors.

ANALYSIS OF SUBSTANTIVE CONSOLIDATION OF SELLER
The following reasoning, on which we base our opinion, is dependent on the “Opinion Documents,” the “Facts,” and the “Assumptions” set forth above and on which we have relied.

All of the facts and circumstances relating to the Opinion Entities and Seller, including the procedures that Seller follows in conducting its business, the relationships that are established and maintained between the Opinion Entities, on the one hand, and Seller, on the other hand, and their respective creditors, and the purpose of the operations of the Opinion Entities and Seller, must be taken into account. The opinion expressed below is particularly dependent on the assumptions we have relied on, including the assumption that Seller will observe all limited liability company formalities in all respects material to its separateness. It is impossible to know the extent to which Seller will observe limited liability company formalities, including the SPE Covenants in the PPA.

Adherence to such formalities (which we have assumed will be the case) is critical to the opinions expressed herein.

As stated above, substantive consolidation is a severe remedy and courts will not order consolidation unless it is clearly warranted.

Assuming compliance with the SPE Covenants, a proponent of consolidation would not likely be able to demonstrate a sufficient identity of interest or commingling of assets or functions to support a valid claim for substantive consolidation of the assets of Seller with the bankruptcy estate of any Opinion Entity. The assets and liabilities of Seller and each Opinion Entity will be ascertainable in bankruptcy or otherwise so as to preclude valid assertions of financial entanglement as support for substantive consolidation under any of the standards discussed above.

Although Seller’s financial statements may be included in consolidated financial statements that include the Opinion Entities, we note that any such consolidated financial statement shall contain a footnote stating that the assets of Seller will not be available to pay the debts of any consolidated entity nor constitute obligations of the consolidated entity. As stated above, this factor is also 210 of 1291
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given less weight by the courts because consolidated financial statements are frequently prepared for affiliated companies.

Seller is a separate legal entity, distinct from each Opinion Entity, and Seller’s financial and business affairs are and will be segregated and readily distinguishable from those of each Opinion Entity.

Further, Seller (except as noted herein) has observed, and will in the future strictly observe, all limited liability company and other statutory formalities, in each case as related to the separateness of Seller. As a result of Seller’s strict compliance with appropriate formalities and preservation of all indicia of separateness, creditors of an Opinion Entity should not have a reasonable basis for relying on assets of Seller to satisfy their claims against an Opinion Entity.

It would be difficult for any third party to persuade a court that substantive consolidation of Seller with any Opinion Entity is warranted under the balancing test approach because of the lack of any actual prejudice to creditors’ interests associated with recognition of Seller and the Opinion Entity as separate entities. As noted above in Snider Bros. and its progeny, the fundamental premise of the balancing analysis is that the Court must take into account the prejudicial impact of the imposition of an equitable remedy. We do not think that a Court examining the issue would hold that the benefits of consolidating the assets of Seller with the assets of the estate of any Opinion Entity would counterbalance the harm to creditors of Seller objecting to consolidation.

This analysis assumes, however, that Seller would not otherwise properly be a debtor in a case under the Bankruptcy Code. As noted in the “FACTS” Section, Seller is a special purpose “bankruptcy remote” entity, making it less likely that Seller would voluntarily file for bankruptcy in connection with the bankruptcy filing of an Opinion Entity. It should be noted, however, that a voluntary bankruptcy filing by Seller is not inconceivable and the mere fact that a voluntary petition must be authorized by an independent manager is no guarantee that a “bankruptcy remote” entity will not file for bankruptcy protection. See In re General Growth Properties, Inc., 409 B.R. 43 (Bankr. S.D.N.Y. 2009) (upholding the voluntary bankruptcy filings of “bankruptcy remote” special purpose entities and holding under Delaware law that independent managers could consider the interests of the larger debtor group and indeed had a duty to consider the interests of the company’s shareholders). We believe that a court could conceivably, if Seller were a debtor in a bankruptcy case, apply the balancing test discussed above slightly differently. In the event Seller was not at the time a debtor in a bankruptcy proceeding, a court would likely view causing it to become a debtor in a bankruptcy case as a significant harm against which the benefits of consolidation would be weighed; if, however, Seller was already a debtor in bankruptcy, the harms against which the benefits of consolidation would be weighed would be correspondingly less.

However, even if Seller was a debtor in bankruptcy and a request was made for substantive consolidation, there would still be significant factors weighing against such consolidation. Here, SCPPA has entered into the PPA with Seller in principal reliance on the separateness of Seller from each Opinion Entity, demonstrated by, among other things, the fact that this nonconsolidation opinion letter is required as part of the transaction. Another element of such reliance is based on the premise that the assets of Seller are subject only to the claims of creditors of Seller and not to 211 of 1291
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the claims of creditors of any Opinion Entity. Thus, SCPPA should be able to demonstrate that it would be harmed if consolidation were ordered. Under such circumstances, we assume that SCPPA would oppose any motion to consolidate Seller with any Opinion Entity, arguing that such consolidation would prejudice it.

Consequently, considering the prejudice that would be suffered by the creditors of Seller in the event of a consolidation of Seller’s assets with the estate of any Opinion Entity, the balance should come out against substantive consolidation, regardless of whether Seller is also a debtor in a case under the Bankruptcy Code.

Further, the absence of several of the substantive consolidation “elements” discussed above suggest that Seller is not an alter ego or instrumentality of any Opinion Entity and, accordingly, favors a denial of substantive consolidation in this case. Specifically, we note that: (i) as of the date hereof, Seller is adequately capitalized; (ii) Seller will strictly observe all limited liability company formalities relevant to separateness; (iii) there will be no transfers of assets to or from Seller without observance of appropriate formalities; (iv) Seller has its own assets and business operations that are separately identifiable from those of each Opinion Entity; and (v) there should be no commingling of assets and business functions of any Opinion Entity, on the one hand, and Seller, on the other hand, and it should not be difficult (much less impossible) to segregate the assets, liabilities and business functions of any Opinion Entity from those of Seller. We also note that Seller has not and will not enter into any transaction with any Opinion Entity or any other employment or service agreements, except upon terms and conditions that are intrinsically fair and substantially similar to those that would be available on an arm’s-length basis and on customary market terms with unaffiliated third parties.

Given that the courts have consistently held that substantive consolidation is an extraordinary remedy that should be sparingly granted and the burden of proof for those seeking substantive consolidation is substantial, we believe that a proponent of substantive consolidation should not be able to demonstrate the need for consolidation, or a cognizable harm to be avoided by the use of the equitable remedy of substantive consolidation. Our belief is founded on the absence of any credible indication that creditors of any Opinion Entity or Seller extended credit to any of them on the basis that any Opinion Entity, on the one hand, and Seller, on the other hand, together constitute a single economic unit.

In connection with our analysis, we note that SPE Covenant (n), which provides that Seller will not have any of its obligations guaranteed by any Affiliate and will not hold itself out as being responsible for the debts or obligations of any other Person, includes an exception for Seller’s “obligations to Facility Lenders or Tax Equity Investors.” Under the traditional “elements” test for substantive consolidation, the existence of parent and intercorporate guarantees on loans, Vecco Constr., 4 B.R. at 410, and a parent company providing financing to a subsidiary, In re Tureaud, 45 B.R. at 662, are identified as factors supporting substantive consolidation. Such guarantees have been cited in support of substantive consolidation, based on the proposition that “creditors dealt with the entities as a single economic unit” rather than “rely[ing] on their separate identity in extending credit”. See, e.g., Holywell Corp., 59 B.R. at 347; In re Donut Queen, Ltd., 41 B.R. at 709.
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Accordingly, we consider the exception to SPE Covenant (n) an adverse circumstance under the old “elements” approach to substantive consolidation. But we do not consider this circumstance material to our analysis of the risk of substantive consolidation of Seller and an Opinion Entity as a result of more recent substantive consolidation case law. Specifically, courts have recognized that intra-corporate guarantees are a “common business practice and a normal feature of parent-subsidiary relationships,” Calvert v. Huckins, 875 F. Supp. 674, 679 (E.D. Cal. 1995), and may in fact support the separateness of entities.

Indeed, in the Owens Corning substantive consolidation litigation, the Third Circuit reversed the District Court’s order permitting substantive consolidation based in part on intercompany guarantees. Where the District Court found that “the very existence” of certain subsidiary guarantees of the parent company’s credit agreement “is a further reason for approving substantive consolidation”, Owens Corning, 316 B.R. 168, 172 (D. Del. 2004), the Court of Appeals took a directly opposite view:
[O]btaining the guarantees of separate entities, made separate by [Owens Corning’s] choice of how to structure the affairs of its affiliate group of companies, entitles a lender, in bankruptcy or out, to look to any (or all) guarantor(s) for payment when the time comes. As such, the District Court's conclusions of “substantial identity” of [Owens Corning] and its subsidiaries, and the Banks’ reliance thereon, are incorrect. For example, testimony presented by both the Banks and the Debtors makes plain the parties’ intention to treat the entities separately.

CSFB presented testimony from attorneys and bankers involved in negotiating the Credit Agreement that reflected their assessment of the value of the guarantees as partially derived from the separateness of the entities. As [Owens Corning] concedes, these representatives “testified that the guaranties were . . . intended to provide ‘structural seniority’ to the banks,” and were thus fundamentally premised on an assumption of separateness.

Owens Corning, 419 F.3d at 212-13. In addition, we note that only the Facility Lenders or Tax Equity Investors may obtain the benefit of the intercompany credit support permitted by the exception in SPE Covenant (n). The exception provides no basis for the Opinion Entities’ general creditors to have to recourse to Seller.

Taking these considerations into account, the exception in SPE Covenant (n) remains an adverse fact that mitigates to some extent but does not overcome our belief that SCPPA would be able to show reliance on the credit and assets of Seller separate from those of the Opinion Entities.

Viewed in the full context of the PPA transactions, we do not believe the possibility of Seller credit support for Opinion Entities’ obligations to Facility Lenders or Tax Equity Investors evidences a lack of reliance on the credit and assets of Seller.

REASONED OPINION
Based on the facts, assumptions, and analysis of applicable case law (although there is no precedent directly on point) set forth above and subject to the qualifications, limitations, and exclusions set forth below, we are of the reasoned opinion that: In a properly presented and argued 213 of 1291
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case under the Bankruptcy Code in which an Opinion Entity is the debtor, a Court would not order the substantive consolidation of the assets and liabilities of Seller with those of such Opinion Entity.

QUALIFICATIONS, LIMITATIONS, AND EXCLUSIONS
The opinion expressed above is based on our analysis of cases decided by courts in various jurisdictions with respect to entities other than limited liability companies, and certain of such cases might not be regarded as controlling precedent in a bankruptcy or reorganization proceeding with respect to the matters addressed in this opinion letter. The opinion above is limited to the present law of substantive consolidation as applied by federal courts in cases under the Bankruptcy Code, as in effect as of the date hereof.

The opinion expressed above is not a guarantee or assurance what a particular court would actually hold in an actual bankruptcy case, but an analysis of the legal principles generally applicable to substantive consolidation in bankruptcy. Judicial analysis has typically proceeded on a case-by-case basis. The determination is usually made on the basis of an analysis of the facts and circumstances of the particular case, rather than as a result of the application of consistently applied legal doctrines. Existing reported decisional authority is therefore not conclusive as to the relative weight to be accorded to the factors present in a particular case and does not provide consistently applied general principles or guidelines with which to analyze all of the factors present in the transaction.

We have assumed that provisions of law under which Seller and each Opinion Entity are organized do not materially impact conclusions set forth herein.

The opinions set forth herein are expressly subject to there being no additional facts, other than those referenced or set forth herein, that would materially affect the validity of the assumptions and conclusions set forth herein or upon which this opinion is based, and compliance with the SPE Covenants.

We express no opinion herein other than the “Reasoned Opinion” set forth on page 23 hereof. Without limitation to the foregoing, we express no opinion with respect to:
• the consolidation, substantive or otherwise, of the assets and liabilities of Seller with those of any Opinion Entity if such consolidation is incorporated into a plan of reorganization that is accepted by the creditors of Seller by the majorities required by Section 1126 of the Bankruptcy Code; • a partial substantive consolidation that does not include or affect SCPPA; • whether a court would order joint administration or “administrative consolidation” of the bankruptcy estates of Seller and any Opinion Entity, if any of them were to be debtors under the Bankruptcy Code, pursuant to Federal Rule of Bankruptcy Procedure 1015(b) or any local variation thereof;
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• whether a court would grant a motion for substantive consolidation based on Seller’s Legacy Activities prior to payment of all outstanding Legacy Claims; or
• the enforceability of the Bankruptcy Remote Terms or their effectiveness to prevent Seller from becoming a debtor under the Bankruptcy Code.

This opinion relates solely to the Bankruptcy Code and should be interpreted in accordance with the Special Report by The TriBar Opinion Committee, Opinions in the Bankruptcy Context:

Rating Agency, Structured Financing, and Chapter 11 Transactions, 46 BUS. LAW. 717 (1991). * * *
This opinion is rendered to SCPPA, and it may not be relied upon by any other person or for any other purpose, without our prior written consent. This opinion may be relied upon solely as of the date hereof, and we undertake no obligation to update or supplement this opinion after the date hereof for any addressee or any other person. This opinion letter is not intended to be employed in any transaction other than the PPA becoming effective, and is being delivered to you on the understanding that neither it nor its contents may be relied upon by any other person or for any other purpose or used, circulated, quoted, published, communicated or otherwise made available, in whole or in part, to any other party or entity without, in each instance, our specific prior written consent; provided, that it may be provided to any governmental regulatory authority having jurisdiction over you and to rating agencies, auditors, regulators or government agencies or pursuant to court order.

Very truly yours,

(Schedule 1 follows)
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Schedule 1
(UCC, Lien, Litigation & Bankruptcy Searches)
Searches for Star Peak Geothermal LLC
Courts and Office Searched Search Search Date
Pershing County, Nevada
Recorder/Auditor
UCC Filings, Liens &
Judgments 2/21/2020
Nevada Secretary of State,
UCC Division UCC Filings 2/21/2020
District Court for the Eleventh
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Pending Suits;
Unsatisfied Judgments 2/21/2020
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the District of Nevada
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and Adversary Proceedings 2/21/2020
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APPENDIX J
TO THE

AMENDED AND RESTATED

POWER PURCHASE AGREEMENT

BETWEEN

SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
and

STAR PEAK GEOTHERMAL LLC

REAL PROPERTY AGREEMENTS
• Geothermal Lease and Agreement, dated April 28, 2022, by and between SP Land Company, LLC, as lessor, and Star Peak Geothermal LLC, as lessee • Geothermal Lease and Agreement, dated as of May 16, 2018, by and between Cindy Nicholson Zavala, as lessor, and Open Mountain Energy, LLC, as lessee, as supplemented by the Assignment Agreement, dated as of February 25, 2020, by and between Open Mountain Energy, LLC, as assignor, and Star Peak Geothermal, as assignee
• Geothermal Lease and Agreement, dated as of May 16, 2018, by and between Gary Otto Nicholson, as lessor, and Open Mountain Energy, LLC, as lessee, as supplemented by the Assignment Agreement, dated as of February 25, 2020, by and between Open Mountain Energy, LLC, as assignor, and Star Peak Geothermal, as assignee
• Offer to Lease and Lease for Geothermal Resources (No. 48027), dated March 18, 2010, by and between the United States Department of the Interior Bureau of Land Management, as lessor, and Presco Energy LLC, as lessee, and the Assignment of Record Title Interest in a Lease for Oil and Gas or Geothermal Resources, executed as of August 30, 2017 and approved effective as of September 1, 2017 217 of 1291
K-1

APPENDIX K
TO THE

AMENDED AND RESTATED

POWER PURCHASE AGREEMENT

BETWEEN

SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
and

STAR PEAK GEOTHERMAL LLC
[RESERVED]
218 of 1291
L-1

APPENDIX L
TO THE

AMENDED AND RESTATED

POWER PURCHASE AGREEMENT

BETWEEN

SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
and

STAR PEAK GEOTHERMAL LLC

FORM OF CASH ESCROW AGREEMENT

ESCROW AGREEMENT
Pursuant to this Escrow Agreement, dated , [XXXX] (the “Depositor”) hereby establishes an Escrow Account (the “Account”) with U.S. Bank National Association (the “Agent”), to be maintained and administered for the benefit of Southern California Public Power Authority (the “Beneficiary”) as described in Schedule II attached hereto in accordance with the following terms and conditions:

This Agreement is the Escrow Agreement that was contemplated in that certain Power Purchase Agreement dated as of February 20, 2020 by and between the Depositor and the Beneficiary. The funds and/or property described on Schedule I attached hereto and incorporated herein will be deposited in the Account upon delivery thereof to the Agent in the manner and at the time(s) specified in Schedule I. The Agent is hereby authorized and directed by the Depositor, as its escrow agent, to hold, deal with and dispose of all amounts deposited in the Account by Depositor, as well as any investment or interest income thereon (collectively the “Account Funds”), as provided in the Instructions set forth in Schedule II attached hereto and incorporated herein; subject, however, to the terms and conditions set forth below, which in all events, shall govern and control over any contrary or inconsistent provisions contained in Schedules I or II attached hereto.

1. Agent’s Duties. Agent’s duties and responsibilities shall be limited to those expressly set forth in this Agreement, and Agent shall not be subject to, or obliged to recognize, any other agreement between any or all of the parties or any other persons even though reference thereto may be made herein; provided, however, this Agreement may be amended at any time or times by an instrument in writing signed by all the parties hereto. Agent shall not be subject to or obligated to recognize any notice, direction or instruction of any or all of the parties hereto or of any other person, except as expressly provided for and authorized in Schedule II, and in performing any duties under this Agreement, Agent shall not be liable to any party for consequential damages (including, without limitation, lost profits), losses, or expenses, except for gross negligence or willful misconduct on the part of the Agent.

2. Court Orders or Process. If any controversy arises between the parties to this Agreement, or with any other party, concerning the subject matter of this Agreement, or its terms or conditions, 219 of 1291
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Agent will not be required to determine the controversy or to take any action regarding it. Agent may hold all documents and funds and may wait for settlement of any such controversy by final appropriate legal proceedings or other means as, in Agent’s discretion, Agent may require, despite what may be set forth elsewhere in this Agreement. In such event, Agent will not be liable for interest or damages. Agent is authorized, in its sole discretion, to comply with orders issued or process entered by any court with respect to the Account, the Account Funds or this Agreement, without determination by the Agent of such court’s jurisdiction in the matter. If any Account Funds are at any time attached, garnished, or levied upon under any court order, or in case the payment, assignment, transfer, conveyance or delivery of any such property shall be stayed or enjoined by any court order, or in case any order, judgment or decree shall be made or entered by any court affecting such property or any part thereof, then in any of such events Agent is authorized, in its sole discretion, to rely upon and comply with any such order, writ, judgment or decree which it is advised by legal counsel of its own choosing is binding upon it; and if Agent complies with any such order writ, judgment or decree, it shall not be liable to the Depositor or to any other person, firm or corporation by reason of such compliance even though such order, writ, judgment or decree may be subsequently reversed, modified, annulled, set aside or vacated.

3. Agent’s Actions and Reliance. Agent shall not be personally liable for any act taken or omitted by it hereunder if taken or omitted by it in good faith and in the exercise of its own best judgment. Agent shall also be fully protected in relying upon any written notice, instruction, direction, certificate or document which in good faith it believes to be genuine, including written instructions from Depositor or Beneficiary in the form of the attached Schedule(s), if any.

4. Collections. Agent shall proceed as soon as practicable to collect any checks, interest due, matured principal or other collection items with respect to Account Funds at any time deposited in the Account. All such collections shall be subject to the usual collection procedures regarding items received by Agent for deposit or collection. Agent shall not be responsible for any collections with respect to Account Funds if Agent is not registered as record owner thereof or otherwise is not entitled to request or receive payment thereof as a matter of legal or contractual right. All collection payments or receipts shall be deposited to the Account. Agent shall not be required or have a duty to notify anyone of any payment or maturity under the terms of any instrument, security or obligation deposited in the Account, nor to take any legal action to enforce payment of any check, instrument or other security deposited in the Account.

5. Agent Responsibility. Agent shall not be responsible or liable for the sufficiency or accuracy of the form, execution, validity or genuineness of documents, instruments or securities now or hereafter deposited in the Account, or of any endorsement thereon, or for any lack of endorsement thereon, or for any description therein. Agent may maintain all Account Funds in a Federal Reserve Bank or in any registered clearing agency as Agent may select, and may register such deposited funds in the name of Agent or its agent or nominee on the records of such Federal Reserve Bank or such registered clearing agency or a nominee of either. Agent shall not be responsible or liable in any respect on account of the identity, authority or rights of the persons executing or delivering or purporting to execute or deliver any such document, security or endorsement or this Agreement.
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6. Investments. All Account Funds shall be invested by Agent in the (i) direct obligations of the United States, or of any agency of the United States, or obligations guaranteed as to principal and interest by the United States or any agency of the United States, maturing not more than 90 days from the date of acquisition, (ii) money market mutual funds investing solely in obligations maturing within 365 days, including funds for which the [Bank] or an affiliate provides investment advice or other services, or (iii) certificates of deposit issued by a United States commercial bank or a foreign bank with a United States branch, which United States commercial bank or United States branch has at the applicable time a Credit Rating of (a) A- or better from Standard & Poor’s Rating Services and (b) “A3” or better from Moody’s Investors Service, Inc. So long as the funds and/or property available to the Beneficiary hereunder are not diminished, accrued interest shall be distributed to the Depositor on an annual basis. All entities entitled to receive interest from the Account will provide Agent with a W-9 or W-8 IRS tax form prior to the disbursement of interest.

A statement of citizenship will be provided if requested by Agent. The Agent shall not be liable for losses, penalties or charges incurred upon any sale or purchase of any such investment.

7. Notices/Directions to Agent. Notices and directions to Agent from Depositor or Beneficiary, as expressly set forth in Schedule II, shall be in writing and signed by an authorized representative as identified pursuant to Schedules III and IV (each, an “Authorized Representative”), and shall not be deemed to be given until actually received by Agent’s employee or officer who administers the Account. Agent shall not be responsible or liable for the authenticity or accuracy of notices or directions properly given hereunder if the written form and execution thereof on its face purports to satisfy the requirements applicable thereto as set forth in Schedule II, as determined by Agent in good faith without additional confirmation or investigation.

8. Books and Records. Agent shall maintain books and records regarding its administration of the Account, and the deposit, investment, collections and disbursement or transfer of Account Funds, shall retain copies of all written notices and directions sent or received by it in the performance of its duties hereunder and shall afford the Depositor and Beneficiary periodic statements for the Account and reasonable electronic access to it.

9. Disputes Among Depositor and Third Parties. In the event Agent is notified of any dispute, disagreement or legal action between or among the Depositor and any third parties, relating to or arising in connection with the Account, the Account Funds or the performance of the Agent’s duties under this Agreement, the Agent shall be authorized and entitled, subject to Section 2 hereof, to suspend further performance hereunder, to retain and hold the Account Funds and take no further action with respect thereto until the matter has been fully resolved, as evidenced by written notification signed by the Depositor and any other parties to such dispute, disagreement or legal action.

10. Notice by Agent. Any notices which Agent is required or desires to give hereunder to the Depositor or Beneficiary shall be in writing and may be given by sending the same to the address indicated in Schedule II for the Depositor or Beneficiary (or to such other address as may have been substituted by written notification to Agent), by United States certified or registered mail, overnight courier service or confirmed facsimile transmission. Any notice sent by Agent to Depositor must also be sent to Beneficiary. Whenever under the terms hereof the time for Agent’s 221 of 1291
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giving a notice or performing an act falls upon a Saturday, Sunday or banking holiday, such time shall be extended to the next business day.

11. Legal Counsel. If Agent believes it to be reasonably necessary to consult with counsel concerning any of its duties in connection with the Account or this Agreement, or in case Agent becomes involved in litigation on account of being escrow agent hereunder or on account of having received property subject hereto, then, in either case, its costs, expenses and reasonable attorney’s fees shall be paid by Depositor.

12. Agent Compensation. Agent shall be paid a fee for its services as set forth on Schedule V attached hereto and incorporated herein, which shall be subject to increase upon notice sent to Depositor, and reimbursed for its reasonable costs and expenses incurred. The Depositor shall pay and reimburse Agent’s fees and reasonable costs and expenses. The Depositor and its successors and assigns agree to indemnify and hold Agent harmless against any and all losses, claims, damages, liabilities and expenses, including reasonable costs of investigation, counsel fees, including allocated costs of in-house counsel, and disbursements that may be imposed on Agent or incurred by Agent in connection with the performance of its duties under this Agreement, including but not limited to any litigation arising from this Agreement or involving its subject matter.

13. Agent Resignation. Agent may resign by giving at least forty-five (45) days’ advance written notice of its resignation to the Depositor and the Beneficiary. Within forty-five (45) days after receiving the aforesaid notice, the Depositor and the Beneficiary agree to appoint a successor escrow agent, to which Agent shall transfer the Account Funds then held in the Account, less its unpaid fees, costs and expenses. If a successor escrow agent has not been appointed and has not accepted such appointment by the end of the 45-day period, Agent may apply to a court of competent jurisdiction for the appointment of a successor escrow agent, and the costs, expenses and reasonable attorney’s fees which Agent incurs in connection with such a proceeding shall be paid by Depositor.

14. Escrow Termination. Unless previously terminated as provided in Schedule II, this Agreement shall terminate on [DATE] at which time the Account Funds then held in the Account, less Agent’s unpaid fees, costs and expenses, shall be distributed as provided in Schedule II.

15. Governing Law. This Agreement shall be construed, interpreted, enforced, and administered in accordance with the laws of the State of California, without regard to conflict of law principles.

All litigation arising out of, or relating to, this Agreement shall be brought in a state or federal court in the County of Los Angeles in the State of California. The Depositor and the Agent irrevocably agree to submit to the exclusive jurisdiction of such courts in the State of California and waive any defense of forum non conveniens.

16. Automatic Succession. Any company into which the Agent may be merged or with which it may be consolidated, or any company to whom Agent may transfer a substantial amount of its escrow business, shall be the successor to the Agent without the execution or filing of any paper or any further act on the part of any of the parties, anything herein to the contrary notwithstanding. 222 of 1291
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17. Brokerage Confirmations. The Depositor and the Beneficiary acknowledge that, to the extent regulations of the Comptroller of Currency or other applicable regulatory entity grant a right to receive brokerage confirmations of security transactions of the escrow, the Depositor and the Beneficiary waive receipt of such confirmations, to the extent permitted by law. The Agent shall furnish a statement of security transactions on its regular monthly reports.

18. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be one and the same instrument. The exchange of copies of this Agreement and of signature pages by facsimile transmission shall constitute effective execution and delivery of this Agreement as to the parties and may be used in lieu of the original Agreement for all purposes. Signatures of the parties transmitted by facsimile shall be deemed to be their original signatures for all purposes.

19. Assignment, Binding Effect. No party shall assign any of its rights or obligations under this Agreement without obtaining the prior written consent of the other parties to this Agreement.

Subject to the foregoing, all the provisions of this Agreement shall be binding upon and shall inure to the benefit of and be enforceable by the parties to this Agreement and their respective successors and assigns. Any purported assignment in violation of this provision shall be null and void and of no force or effect.

20. Further Assurances. Each party shall execute and deliver such additional documents or take such additional actions if such requested document or action is reasonably necessary to effect the transactions described in this Agreement.

21. Miscellaneous. This Agreement represents the complete and final agreement among the Depositor, the Agent and the Beneficiary and supersedes all prior agreements, written or oral, on the subject matter hereof and may not be contradicted by evidence of prior, contemporaneous or subsequent oral agreements of such parties. There are no unwritten oral agreements between or among the Depositor, the Agent and the Beneficiary. Time is of the essence for the performance of each of the terms and provisions of this Agreement.

The undersigned Agent hereby agrees to hold, manage and dispose of the Account Funds at any time deposited to the Account in accordance with the foregoing Agreement. [signature page follows]
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IN WITNESS WHEREOF, the undersigned have affixed their signatures and hereby adopt as part of this instrument Schedules I through V which are incorporated by reference.

DEPOSITOR:

By: By:

Its: Its:

BENEFICIARY:

By:

Its:

AGENT:

By:

Its:
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SCHEDULE I
DEPOSITS:

Deposits will be the following:

1. An initial deposit in the amount of [xxx] Dollars United States Currency ($xxx.xx) (the “Escrow Deposit”) to be delivered by the Depositor [on/before specified date, if any]. Depositor shall restore the Account to [$xxx.xx] after any drawing on the account by the Beneficiary, within seven days after notice by the Beneficiary of such drawing, up to a maximum aggregate deposit obligation (including the initial deposit) of [xxx] Dollars ($xxx.xx). 225 of 1291
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SCHEDULE II

INSTRUCTIONS OF DEPOSITOR

1. All amounts deposited in the Account by Depositor, as well as any investment or interest income thereon (collectively the “Account Funds”), shall be invested during the term of this Escrow Agreement as set forth in Section 6 above.

2. Funds to be deposited into the Account shall be delivered by wire over the Federal Funds Wire System as follows:

U.S. National Bank Association
ABA # 091000022
U.S. Bank Trust N.A.

Account #[ ]
Remark: [Escrow Deposit pursuant to the Escrow Agreement dated xxx with XXXX]

3. Any notices to be delivered shall be in writing and shall be sent by United States certified or registered mail, overnight courier service or confirmed facsimile transmission. For all purposes hereof, any notice so sent shall be effectual as though served upon the person to whom it was sent at the time of confirmation by confirmed facsimile, the business day following the time it was sent by overnight courier service or three business days following the day it was sent by certified or registered mail.

The address and facsimile for the Agent are as follows, unless updated by the Agent at any time in writing:

U.S. National Bank Association
60 Livingston Avenue
St. Paul, MN 55107-2292
Attn: [ ]
Phone: [ ]
Fax: [ ]
With a fax copy to:

Linda McConkey
Fax: 503-275-5738
The address and facsimile for the Beneficiary are as follows, unless updated by the Beneficiary at any time in writing:

Southern California Public Power Authority
1160 Nicole Court
Glendora, CA 91740
The address and facsimile for the Depositor are as follows, unless updated by the Depositor at any time in writing:
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[XXXX]

4. Agent shall hold the Account Funds and shall dispose of them only in accordance with the following provisions:
a) Agent shall deliver the Account Funds to the Depositor upon receipt of a written certification by the Beneficiary’s Chief Financial Officer or his designee that the obligations of the Depositor under the [agreement dated xxxx] have been satisfied in full. b) Agent shall deliver the Account Funds to the Depositor or the Beneficiary as designated by an instruction letter jointly executed by both the Depositor and the Beneficiary; provided, however, that if Agent delivers any notice of resignation pursuant to Section 13 within the period specified in such instruction letter for delivery of Account Funds, Agent shall deliver such funds on the date of such resignation notice.
c) Agent shall deliver the requested portion of the Account Funds to the Beneficiary by wire transfer within three (3) business days of the receipt by the Agent of a written, notarized certification in the form attached as Exhibit A hereto by a Beneficiary Authorized Representative; provided, however, that if Agent delivers any notice of resignation pursuant to Section 13 within such three (3) business day period, Agent shall deliver such funds on the date of such resignation notice.
d) In the event the Agent has resigned pursuant to Section 13 of this Agreement, the Agent shall transfer the Account Funds to any successor agent appointed pursuant to Section 13.

5. This Agreement shall terminate upon the delivery of all the Account Funds in the manner provided by Section 4 of this Schedule II, or upon written agreement by all parties to this Agreement.

Upon such termination of this Agreement, all undelivered Account Funds shall be returned to the Depositor in accordance with the wiring instructions to be provided by the Depositor, and the Agent shall be relieved of its duties hereunder without any liability thereafter to any party whatsoever. 227 of 1291
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EXHIBIT A TO SCHEDULE II
U.S. Bank National Association
60 Livingston Avenue
St. Paul, MN 55107-2292
Attn: [ ]
Phone:

Fax:

Dear Sir or Madam:

This letter is a request for disbursement to Beneficiary in the amount of $____ on deposit in the escrow account [# ] maintained as specified in Schedule II of that certain Escrow Agreement dated [ , 20__] between [XXXX], U.S. Bank National Association, and Beneficiary. The undersigned certifies that we are entitled to these funds because [XXXX] is in default of its obligations under that certain [agreement dated xxxx] due to the following reason(s):

You are hereby instructed to deliver the funds by federal funds wire in accordance with the wire instructions below:
[insert wiring instructions]
Sincerely,
Beneficiary Authorized Representative
Name:

Title:

Subscribed and sworn to be before me this ____ day of _______, 20__. _________________________________
Notary Public
My Commission Expires:_____________

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SCHEDULE III

DEPOSITOR AUTHORIZED REPRESENTATIVES
Each of the following individuals is designated as a “Depositor Authorized Representative,” and is authorized to act on behalf of the Depositor under this Agreement. The Depositor may add, change or delete such Authorized Representative upon written and notarized notice to the Agent.

Depositor Authorized Representatives:

Specimen Signature: ________________________________
Name/Title: _______________________________________
Specimen Signature: ________________________________
Name/Title: _______________________________________
Subscribed and sworn to be before me this ____ day of _______, 20__. _________________________________
Notary Public
My Commission Expires:_____________
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SCHEDULE IV

BENEFICIARY AUTHORIZED REPRESENTATIVES
Each of the following individuals is designated as a “Beneficiary Authorized Representative,” and is authorized to act on behalf of the Beneficiary under this Agreement. The Beneficiary may add, change or delete such Authorized Representative upon written and notarized notice to the Agent.

Beneficiary Authorized Representatives:

SCHEDULE V

SCHEDULE OF FEES FOR SERVICES AS ESCROW AGENT
FOR ______________________

BILLED ANNUALLY
01010 Acceptance Fee
The acceptance fee includes the administrative review of documents, initial set-up of the account, and other reasonably required services up to and including the closing. This is a one-time fee, payable at closing.
_______________________ reserves the right to refer any or all escrow documents for legal review before execution. Legal fees (billed on an hourly basis) and expenses for this service will be billed to, and paid by, the customer. If appropriate and upon request by the customer, _______________________ will provide advance
estimates of these legal fees.

TBD
04460 Escrow Agent
Annual administration fee for performance of the routine duties of the escrow agent associated with the management of the account.

Administration fees are payable in advance.

TBD
Direct Out of Pocket Expenses
Reimbursement of expenses associated with the performance of our duties, including but not limited to publications, legal counsel after the initial close, travel expenses and filing fees.

At Cost
Extraordinary Services
Extraordinary services are duties or responsibilities of an unusual nature, including termination, but not provided for in the governing documents or otherwise set forth in this schedule. A reasonable charge will be assessed based on the nature of the service and the responsibility involved. At our option, these charges will be billed at a flat fee or at our hourly rate then in effect.

Dated:
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M-1

APPENDIX M
TO THE

AMENDED AND RESTATED

POWER PURCHASE AGREEMENT

BETWEEN

SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
and

STAR PEAK GEOTHERMAL LLC

COMMERCIAL OPERATIONS
In accordance with the terms of that certain Power Purchase Agreement dated as of February 20, 2020 (“Agreement”) by and between Southern California Public Power Authority (“Buyer”) and Star Peak Geothermal LLC (“Seller”), in order to determine achievement of Commercial Operation of the Facility, Seller shall demonstrate to Buyer that the Facility is operating and able to produce and deliver Facility Energy to Buyer in accordance with the terms of the Agreement by delivery of a Certificate of Commercial Operation (the “Certificate”), signed by an authorized representative of Seller as to all of the items below, and which shall include a certificate in the form attached hereto of an Independent Engineer, licensed in the State of California, regarding the Facility’s ability to deliver Facility Energy and confirming the items set forth therein. Any term used but not defined in the Certificate shall have the meaning set forth in the Agreement. The Certificate shall be submitted by Seller, along with reasonable documentation as may be requested by Buyer, and certify as to the following:
(a) Construction of the Facility has been completed in accordance with the terms and conditions of this Agreement, and the Facility possesses all the characteristics, and satisfies all of the requirements, set forth for the Facility in this Agreement; (b) The Facility has successfully completed all testing required by Prudent Utility Practices or any Requirement of Law to be completed prior to full commercial operations;
(c) Seller has delivered to Buyer a certificate of an Independent Engineer in the form attached hereto as Appendix M-1;
(d) Seller has obtained all Permits required for the construction, operation and maintenance of the Facility in accordance with this Agreement (including those identified in Appendix B) except for those expected in the ordinary course of business, and all such Permits are final and non-appealable;
(e) The Facility is both authorized and able to operate and deliver Energy at full capacity in accordance with Prudent Utility Practices, the requirements of this Agreement and all Requirements of Law; provided that, so long as Seller has delivered to Buyer a proof of CEC registration filing prior to Commercial Operation, the Facility need not be CEC Certified as a condition to achieving Commercial Operation;
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(f) Seller has obtained Insurance coverage for the Facility as required by Appendix F;
(g) Seller has executed and provided to Buyer the Performance Security; (h) If applicable to Seller and the Facility, Buyer has received Seller’s proof of registration with NERC for all applicable Function Types in the NERC Compliance Registry in accordance with the currently effective NERC Rules of Procedure, including Seller’s registration as both Generator Owner and Generator Operator; (i) If applicable to Seller and the Facility, Buyer has received Seller’s mapping of NERC registered Function Types in accordance with the currently effective WECC Entity Function Mapping Procedures;
(j) Seller has caused Geologica, or another qualified geothermal energy consultant satisfactory to Buyer in its reasonable discretion, to furnish to Buyer its opinion stating, with a confidence level of at least ninety (90%) percent, that the geothermal production wells of the Facility are capable of supporting operation of the Facility on a sustained basis for the delivery of Facility Energy to the Facility’s Point of Delivery at the rate of at least 12.5 MW declining yearly by not more than one half percent (0.5%) for the duration if the Delivery Term; and
(k) Buyer’s Authorized Representative has received and approved, in his or her reasonable discretion, Seller’s Quality Assurance Program found in Appendix G. 233 of 1291
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APPENDIX M-1

FORM OF CERTIFICATE OF INDEPENDENT ENGINEER
In accordance with the terms of that certain Power Purchase Agreement dated as of ___________________, 20__ (“Agreement”) by and between Southern California Public Power Authority (“Buyer”) and Star Peak Geothermal LLC (“Seller”), in order determine achievement of Commercial Operation of the Facility, I, ______________, an Independent Engineer, licensed in the State of California, certify the following regarding the Facility’s ability to deliver Delivered Energy:

1. Construction of the Facility has been completed in accordance with the terms and conditions of this Agreement, and the Facility possesses all the characteristics, and satisfies all of the requirements, set forth for the Facility in this Agreement;

2. Seller’s Facility is complete, functional, and capable of delivering an as-available product.

3. Copies of any documentation provided by the manufacturer of the major equipment of the Facility that such equipment has been manufactured in accordance with such manufacturer’s specifications have been delivered to Buyer.

4. The Facility, as applicable, is operational and interconnected with the Point of Delivery and capable of delivering the Delivered Energy.

5. The Facility has successfully completed all testing required by Prudent Utility Practices or any Requirement of Law to be completed prior to full commercial operations, including operating the Facility for a period of (i) at least 5 consecutive hours at a delivery rate of at least 12.5 MW (net of providing the full requirements for Parasitic Load and other electrical losses occurring prior to the Point of Delivery) and (ii) at least 5 consecutive days and delivering Facility Energy during such period to the Point of Delivery equal to at least 1500 MWh (net of providing the full requirements for Parasitic Load and other electrical losses occurring prior to the Point of Delivery), in each case, as measured by the Electric Metering Devices, as adjusted to reflect nominal resource temperature and flow rates and other environmental conditions.

Signed,
___________________________
Name:

Title:

Date:
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APPENDIX N
TO THE

AMENDED AND RESTATED

POWER PURCHASE AGREEMENT

BETWEEN

SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
and

STAR PEAK GEOTHERMAL LLC

ORGANIZATIONAL STRUCTURE AND OWNERSHIP

OF SELLER AND PARENT ENTITIES
Open Mountain Energy,
LLC
(Delaware LLC)
Star Peak Geothermal
LLC
(Nevada LLC)
100%
Principals:
- Brady Olson, Manager, Chief
Operating Officer and Board
Member
- Yan Tang, Board Member
- Kejian Cao, Board Member
Principals:
- Brady Olson, Manager
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APPENDIX O
TO THE

AMENDED AND RESTATED

POWER PURCHASE AGREEMENT

BETWEEN

SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
and

STAR PEAK GEOTHERMAL LLC

METEOROLOGICAL AND PYRANOMETER MEASUREMENTS
Monitored Meteorological Data Points:

1. Ambient air temperature

2. Relative humidity

3. Barometric pressure
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APPENDIX P
TO THE

AMENDED AND RESTATED

POWER PURCHASE AGREEMENT

BETWEEN

SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY
and

STAR PEAK GEOTHERMAL LLC

FORM OF QUARTERLY CERTIFICATE

QUARTERLY CERTIFICATE
THE UNDERSIGNED HEREBY CERTIFIES THAT:
(1) I am the duly elected [Officer’s title] of Star Peak Geothermal LLC, a Nevada limited liability company (“Seller”);
(2) I have reviewed the terms of that certain Amended & Restated Power Purchase Agreement dated as of __________, 2023, as amended, supplemented or otherwise modified to the date hereof (said Power Purchase Agreement, as so amended, supplemented or otherwise modified, being the “Power Purchase Agreement”, the terms defined therein and not otherwise defined in this Certificate (including Attachment No. 1 annexed hereto and made a part hereof) being used in this Certificate as therein defined), by and between Seller and Southern California Public Power Authority, and the terms of the other Ancillary Documents, and I have made, or have caused to be made under my supervision, a review in reasonable detail of the transactions and condition of Seller and Seller Parties during the accounting period covered by the attached financial statements; and
(3) the representations and warranties of Seller set forth in the Power Purchase Agreement remain true and correct as of the date hereof, and Seller is in compliance with all terms of the Power Purchase Agreement in all material respects; (4) The examination described in paragraph (2) above did not disclose, and I have no knowledge of, the existence of any condition or event which constitutes a Default during or at the end of the accounting period covered by the attached financial statements or as of the date of this Certificate or that, after notice or with the passage of time or both, would constitute a Default during or at the end of such period[, except as set forth below]; [Set forth below are all exceptions to paragraph (3) above listing, in detail, the nature of the condition or event, the period during which it has existed and the action which Seller has taken, is taking or proposes to take with respect to each such condition or event:
].

The foregoing certifications, together with the computations set forth in Attachment No. 1 annexed hereto and made a part hereof and the financial statements delivered with this 237 of 1291
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Certificate in support hereof, are made and delivered this [__________] day of [_____________, ____] pursuant to the Power Purchase Agreement.
[Seller Name]
By:

Title:

Glendale City CouncilOctober 10, 2023

Glendale City Council
October 10, 2023