The Framework Agreement related to the program provides details on the agreement structure between the City, Participate Energy, and Tesla and lays out the responsibilities of each party. Homeowners and Developers will order systems from Tesla, which will design, permit, and install solar and batteries on new residential developments and existing residential homes. Participate Energy will finance the program and own the solar and battery systems. Participate Energy will also contract with Tesla to provide ongoing operations and maintenance throughout the twenty-five-year duration of their agreement.
EPIC will assist with marketing the program to developers and existing residents. EPIC will also enter into the Master Power Purchase Agreement (PPA) with Participate Energy to purchase the energy created from the behind-the-meter solar and battery systems, while, in parallel, selling energy and battery services to the homeowners as part of the City and CCA retail offer. The CCA Customer Agreement with EPIC customers is proposed at $0.145 per kWh with a 1.9% annual escalator for solar and $115.00 per month for each battery. Customers can acquire additional Powerwalls for $75.00 per month. The proposed PPA rate from Participate Energy to the City is $0.145 per kWh with a 1.9% escalator.
Developers and homeowners interested in participating in the program will find program information on EPIC’s website and will add basic home information to a fillable form on the site. Once the form is completed, information will be sent directly to Tesla, who will follow up with the customer. Tesla will also enable ordering directly from the Tesla.com website. Tesla will be responsible for all installation-related work, including permitting systems with the City.
EPIC will earn revenues in two forms. First, a $0.40 per watt up-front fee for each system developed and deployed through the program, equating to approximately $3,000,000 for every 1,000 homes deployed with a standard 7,600 watt and on (1) Powerwall configuration. The city will also receive a program support service fee of $0.02 per kWh generated and $15.00 per month for each Powerwall installed, which equates to an estimated $21,000,000 over the life of the program for every 1000 residential customers.
Homeowners and Developers who participate in the program will enjoy many benefits.
These include easy access to solar financing and installation, comprehensive integration with their existing CCA service, access to backup power in the event of an emergency or Public Safety Power Shutoff, and substantial savings on their electric bills. One of the unique benefits of this structure is that all residents qualify; there is no consumer credit check. Often, these programs are only available to those with the best credit scores. This program will allow all residents access to energy savings and resiliency. In addition, a significant portion of their expenditures will remain local and be reinvested in our community.
Report to Mayor and City Council
Re: Approve to execute agreements related to Palmdale Solar and Battery Residential Program
November 15, 2023
FISCAL IMPACT
EPIC will, in connection with the required development services, be paid a fee during the construction phase of $0.40 per watt developed. Additionally, EPIC will receive a nominal operating service fee of $0.02 per kilowatt-hour (kWh) generated and $15.00 per month for each Powerwall installed over the program's life, an estimated $21,000,000 over the next 25 years.
STRATEGIC PLAN
Goal II: Ensure the long-term health of the City and maintain funding for services.
A. Manage resources, costs, and liabilities to ensure the City’s long-term fiscal health
Goal III: Invest in infrastructure to improve community livability.
A. Seek innovative, cost-effective, customer-focused methods of service delivery B. Implement and administer environmentally sustainable programs Goal IV: Ensure the long-term health of the City and maintain funding for services.
B. Provide inclusive access to a variety of supportive services that build a resilient and healthy community
Prepared by: Lynn Glidden, P.E., Director of Public Works Certified as to availability of Funds: Janelle Samson, Director of Finance Approved by: Ronda Perez, City Manager
Approved as to form: William P. Curley, III, City Attorney
ATTACHMENTS
1. Framework Agreement No. A-8536
2. Master Power Purchase Agreement No. A-8537
3. Program Management Agreement No. A-8538
4. Program Support Service Fee Agreement No. A-8539
5. Multiparty Non-Disclosure Agreement No. A-8216
Framework CalChoice Distributed Energy Resource Program Agreement This Framework CalChoice Distributed Energy Resource Program Agreement (this “Agreement”) is entered into as of [February 1, 2023] (the “Effective Date”), among the parties listed below (each, a “Party” and together the “Parties”). This Agreement comprises (i) the Key Terms set out below (the “Key Terms”), and (ii) all schedules referenced in the “Attachments” section of the Key Terms.
Key Terms
This Agreement sets out the terms and conditions on which the California Choice Energy Authority (“ CalChoice”) and the City of Palmdale (“Member”) shall market and offer a program for the deployment of traditional solar PV systems and Powerwalls (“System”) to certain residential customers (“ Customers”) and new homes builders (“Builders”) located in the Member territory, with sales and educational support provided by Member, product and product installation support provided by Tesla, purchase and operation of System by Participate Energy Fund, LLC (“ The Program Fund ”) for the sale of energy from the Systems to Member for resale to Customers (the “Program”).
Parties:
Tesla: Tesla, Inc., a corporation organized under the laws of Delaware.
CalChoice: California Choice Clean Energy Authority, a California Joint Powers Authority.
Member: City of Palmdale, a California municipal corporation.
The Program Fund: Participate Energy Fund, LLC
Framework Agreement Term:
Term: The period commencing on the Effective Date and ending on the second (2nd) anniversary of the Effective Date (the “ Term”), which shall automatically be extended for additional, one-year periods upon the expiration of the then- current Term unless terminated early in accordance with this Agreement.
Notices:
Tesla Notice Address: 1 Tesla Road, Austin, TX 78725, USA.
Attn: Energy Notices / Legal Department
Phone: +1. 512.516.8177.
Email: [email protected].
Tesla Address for submission of
Purchase Orders:
www.tesla.com
CalChoice Notice Address: 44933 Fern Avenue, Lancaster, CA 93534.
Attn: Jason Caudle, City Manager
Phone: 661.723.6110
[email protected]
Member Notice Address: 38300 Sierra Highway, Palmdale, CA 93550 Attn: Ronda Perez, City Manager
[email protected]
Program Fund Notice Address: Participate.Energy, LLC
Attn: Ethan Friedman
c/o Virtual Post Solutions, Inc.
2093 Philadelphia Pike #3125
Claymont, DE 19703
[email protected]
NDA:
NDAs: The non-disclosure agreement dated [MMM DD, YYYY] between Tesla, The Program Fund and Member.
Attachments:
The attachments below are incorporated by reference into this Agreement. In the event of any conflict, the order of precedence shall be (i) these Key Terms and (ii) the Schedules, in order of appearance.
Schedule 1: Program Terms and Conditions
Schedule 2: Pricing
Attachment A: Form of Customer Agreement
Attachment B: Form of New Homes Builder Framework Agreement Attachment C: Form of Customer Order – Program Terms
EXECUTED by the Parties on the Effective Date.
CALIFORNIA CHOICE CLEAN ENERGY AUTHORITY
(SIGNATURE)
(PRINT NAME)
(PRINT TITLE)
CITY OF PALMDALE
(SIGNATURE)
(PRINT NAME)
(PRINT TITLE)
TESLA, INC.
(SIGNATURE)
(PRINT NAME)
(PRINT TITLE)
PARTICIPATE ENERGY FUND, LLC
(SIGNATURE)
(PRINT NAME)
(PRINT TITLE)
Schedule 1
Program Terms and Conditions
1. The Program. The objective of the Program is to deploy eligible Systems with a target of 500 MW of direct current capacity throughout the territorial boundaries of Member and the Community Choice Aggregation (“CCA”) service territories managed by Member or its CCA partners, including, but not limited to, the cities of:
San Jacinto, Pico Rivera, Rancho Mirage, Apple Valley, Pomona, Santa Barbara, Palmdale, and Lancaster (the “Territory”), as further set forth in this Agreement (the “Objective”).
2. Program Development.
(a) Geographic Focus. Member shall target all residential Customers and Builders located or operating within the portion of the Territory that is located within Member’s jurisdictional boundaries (the “Member Territory”) through the Master Marketing Plan.
(b) Site Eligibility. Eligible sites include existing single-family residential properties (“Existing Homes”) and single-family residential properties under construction by participating Builders in accordance with a New Homes Builder Framework (“New Homes”) located in the Member Territory. (c) Marketing Strategy & Outreach. The Master Marketing Plan shall be jointly developed by the Parties and designed to enlist the participation of Customers and Builders located in the Member Territory.
(i) Marketing Strategy. Within thirty (30) days, Member shall develop a strategy for marketing and promoting the Program, including:
1. Specific tactics that will be used to execute the Master Marketing Plan strategy;
2. An annual budget and description of dedicated resources that will be used to support Program marketing efforts;
3. Specific communications to be made through its sales channels; and
4. Dedicated education and links to the Tesla Products offering on the Member website. (ii) Marketing Outreach. Member shall provide consistent and targeted marketing outreach consistent with the Master Marketing Plan to prospective Customers and Builders in the Member Territory.
(d) Sales Support. Member shall:
(i) Provide sales support for interested Customers and Builders by phone, email, and chat; (ii) Provide educational information regarding Tesla Products, economics, billing, maintenance, installation and technical performance of the System and components thereof; and (iii) Convert inbound interest and leads into Orders that (i) that Customers may submit to Tesla through the Existing Homes Retrofit Energy Order Tool; and (ii) participating Builders may submit to Tesla through the New Homes Energy Order Tool. (e) Order Funding. The Program Fund, CalChoice and Member shall facilitate the establishment of a fund (the “Program Fund”) that shall be obligated to pay for Orders placed in accordance with the Program criteria set forth herein and that shall own and operate the Systems in accordance with the terms and conditions of each Customer Agreement.
3. Customer Eligibility; Engagement.
(a) Eligibility. To be eligible for participation in the Program, a Customer must: (i) either own an Existing Home or have entered into an agreement with a Builder to purchase a New Home, (ii) be an existing participant, or agree to become a participant, in the CalChoice Member’s Community Choice Aggregation program (“CCA”) with utility service provided by Southern California Edison (“Utility”), (iii) agree to host a System installed on the home and to provide the Program Fund, as System owner, and its agents with a non-exclusive license (the “Site License”) for access to the Site for the entire term of the Customer’s participation in the Program for the purposes operating and maintaining the System; and (iv) agree to purchase an equivalent amount of energy generated by the System pursuant to a Solar Power Purchase & Energy Storage Services Agreement (each, a “Customer Agreement”) using the form attached hereto as Attachment A. (b) Customer Engagement. Member shall encourage Customers with New Homes to accept the transfer and assumption of a Customer Agreement from a participating Builder in accordance with the terms and conditions of the applicable New Homes Builder Framework as more particularly described in Section 4. Member shall encourage Customers with Existing Homes to place Orders directly with Tesla and to enter into a Customer Agreement in accordance with Section 5.
4. New Homes Builder Framework Agreement.
(a) Builder Framework Agreement. During the Term, the Parties may consider Builders for participation in the Program. Upon Tesla confirmation of Builder eligibility, The Program Fund and each participating Builder will enter into a New Homes Builder Framework Agreement (the “Builder Framework”) in the form attached as Attachment B. Material deviations from the Builder Framework are not permitted without unanimous written agreement of the Parties. (b) Builder Framework Obligations. Member will request, pursuant to each Builder Framework, that Builders deliver and maintain the following to remain eligible for participation in the Program:
(i) A fully executed Builder Framework;
(ii) Community Specific Terms setting forth the Tesla Product Suite, eligible System information and Pricing applicable to the particular subdivision of new homes (each, a “Community”); (iii) An executed Builder non-disclosure agreement in the form attached to the Builder Framework;
(iv) Orders as set forth in Section 5 placed in accordance with each Builder Framework; (v) For each Order, a “solar ready” home that will include internal conduit installation, roof dry in and order details developed in consultation with the buyer of each applicable home in the Community (each, a “Home Owner”) sufficient for Tesla to complete installation of Tesla Products and the home to pass inspection by the applicable building department as the authority having jurisdiction (“AHJ”); and
(vi) Ongoing compliance with the Builder Framework and Program requirements as Tesla, Member and CalChoice may mutually agree to update from time to time.
5. Orders.
(a) During the Term, Member shall direct eligible Customers to the Existing Homes Energy Order Tool at www.tesla.com and Builders to the New Homes Energy Order Tool developed by Tesla for each Builder to place orders for Tesla Products for installation on Existing Homes or New Homes in the Member Territory in accordance with these Program terms and the form of Customer Order – Program Terms set forth in Attachment C (“Orders”).
(b) Tesla shall deliver and install Tesla Products in accordance with each applicable Order. The Program Fund shall purchase and pay for the quantities and types of Tesla Products at the prices stated in each applicable Order. Tesla will review each submitted Order to ensure that it tracks the Program criteria and the Community Specific Terms, if applicable. If Tesla reasonably believes that the Order does not track the Program criteria or the Community-Specific Terms, it will notify the Parties and the Parties will then reasonably cooperate to resolve the issue. (c) For each Order that is accepted by Tesla (each, an "Accepted Order"), Tesla shall supply, install and commission the Tesla Products at the Site identified in that Accepted Order in accordance with that Accepted Order and the Work Standards described in Section 8(a) (the “Work”). Accepted Orders will be subject to Tesla’s standard terms and conditions. (d) For purposes of this Agreement and each Accepted Order, “Tesla Products” means a Traditional PV System with a Powerwall, as more particularly set forth in the Community Specific Guidelines of each Builder Framework. A “Traditional PV System” means a traditional solar photovoltaic generating system comprising of solar modules, an inverter and various balance of system components. A “Powerwall” means an energy storage system manufactured by Tesla and accompanying Tesla accessories. Each Traditional PV System, Powerwall shall consist of those that correspond to the specifications published in the Tesla Partner Portal as of the date when an Order for such Tesla Product is submitted.
(e) Tesla agrees to provide Member with access to a platform managed by Tesla that enables access to and control of distributed energy resource assets (“DER Assets”), manufactured by Tesla and owned directly or indirectly by Member or the Program Fund, for monitoring, aggregation, and control (the “Aggregation Platform”). Tesla will not charge Member or the Program Fund any fees for access or use of the platform, but otherwise reserves the right to establish the terms and conditions for Member’s access to the Aggregation Platform within an Aggregation Platform Subscription Agreement. Access to the Aggregation Platform excludes aggregation services offered by Tesla.
(f) The Parties acknowledge and agree that Tesla can choose at any time to discontinue a product, feature or option related to any one or more Tesla Products and, in Tesla’s sole discretion, can choose whether to provide a comparable product, feature or option, or terminate any affected Order before installation of any Tesla Product. If Tesla fails to provide a comparable product, feature or option to Member’s reasonable satisfaction, Member may terminate any affected Order before installation of any Tesla Product.
6. Pricing; Order Payment.
(a) Pricing. Programmatic pricing for Tesla Products is set forth in Schedule 2 (the “Pricing”). The System size or design may be adjusted by Tesla in its reasonable discretion based on a variety of factors, including installation complexity or product availability, provided that the Pricing remains at or below the Pricing set forth on the Program website. If that happens, we will update the Pricing in the applicable Order; Orders with updated Pricing that exceeds the Pricing set forth on the Program website and that are not accepted will be terminated. (b) Order Payment. For Accepted Orders, the price for the Work performed by Tesla under each Accepted Order shall be the Contract Price identified in that Accepted Order. The Program Fund shall pay the Contract Price for each Accepted Order plus applicable taxes within 30 days after receipt of Tesla’s invoice, which Tesla shall provide after the affected Tesla Products have been installed and passed inspection by the AHJ. Passed inspection shall also be deemed “Acceptance” in this Agreement and in each Builder Framework.
7. Title; Risk of Loss. Title to and risk of loss for the Tesla Products shall pass to the Program Fund after Acceptance.
8. Permits. Customers and Builders, as the case may be, shall bear the obligation to obtain and maintain all permits required for Tesla to install each Tesla Product (the “Permits”), except that Tesla shall include the cost of Permits in Orders for Existing Homes.
9. Installation.
(a) Work Standards. Tesla, or its approved subcontractors, will perform the Work according to Tesla’s standard practices and the “Tesla Work Standards” set forth in Exhibit 2 to each Builder Framework exercising the reasonable skill and care of an installation contractor and in accordance with mandatory laws, regulations and permits applicable to the Work. (b) Subcontractors. Tesla will be responsible for all work performed by, and acts or omissions of, each subcontractor and will ensure that all subcontractors are licensed as required by applicable law. (c) Safety. Tesla shall ensure that all Tesla employees and subcontractors comply with Builder’s safety procedures and requirements while on Sites during prosecution of the Work.
10. Failure to Perform.
(a) If any Party believes that any other Party is not satisfying its obligations under this Agreement or with respect to an Order, such Party must notify the other Party in writing. Whichever Party is notified of not meeting its obligations will have 30 days after receiving that notice to correct the issue. If not, whoever gave the notice can terminate the affected Order or this Agreement in accordance with Section 13.
(b) In addition, if Tesla notifies the Parties of the Program Fund’s failure to pay the Price for an Order, Tesla can suspend work on that Order and, if not cured within ten (10) days, Tesla can suspend performance under this Agreement.
(c) If a Customer or Builder terminates an Order for Tesla’s failure to perform before installation of the Tesla Products for that Order has commenced, Tesla will return any payment(s) made toward the Price for those products.
(d) If either party terminates an Order for the other party’s failure to perform, except as specified in the next sentence, Tesla may take back all components of any Tesla Products Tesla delivered but that have not yet been installed for that Order and shall not have any further obligation to deliver product pursuant to this Agreement or that Order. In addition, if an Order is terminated pursuant to this Section, Tesla will complete the installation of Tesla Products where installation is partially complete, unless otherwise requested by the Program Fund (in which case, Tesla will deinstall and remove the Tesla Products from the affected home and return the jobsite to its original condition, at no cost). Each Party will also be able to pursue all rights and remedies available at law or in equity with respect to the failure to perform, except as otherwise provided in Section 13, below.
Breaches of one or more Orders will not constitute breaches under any other Orders or under this Agreement, and breaches of this Agreement independent of any Orders shall not constitute breaches of any Orders.
11. Warranties.
(a) Starting on the date of installation, Tesla warrants to the Program Fund that all materials, equipment and work furnished by Tesla as part of an Order will be:
(i) of good quality, free from fault and defects, and
(ii) performed in a good and workmanlike manner, in accordance with all applicable laws, building codes and ordinances, and in strict conformity with the Order.
If the Program Fund notifies Tesla within 1 year after Acceptance (for Existing Homes) or the initial close of escrow by a Home Owner (for New Homes), Tesla shall, at its sole expense, immediately correct or replace any Work that is defective or determined to be not in accordance with the requirements of the above warranties.
(b) Tesla’s warranties in this Agreement are limited, as they do not cover (i) any defect or damage to the extent caused (A) by events that are (1) beyond Tesla’s reasonable control, (2) not reasonably foreseeable, and (3) not caused by Tesla’s or its subcontractor’s negligence, or (B) by Customer or Program Fund misuse or negligence, and (ii) any material or equipment connected to the Tesla Products that Tesla did not install. Tesla is not providing any warranties in connection with this Agreement other than those in this Agreement or in the product warranties provided by Tesla pursuant to Section 11(c), even if those other warranties are express or implied by any law. (c) Tesla's warranties under this Agreement shall in all cases survive termination of this Agreement and the transfer of title in the home to a third-party purchaser, except for a Home Owner (whose warranty is set forth in Sections 11(e) and 11(f)).
(d) With respect to any warranty claim by the Program Fund under Section 11(a) for the correction, replacement and warranty work, the remedies set forth in Section 11(a) and in Sections 10(d) and 11, as applicable, are the Program Fund’s sole and exclusive remedies. For clarity, the foregoing shall not limit the Program Fund’s ability to bring claims for other purposes not related to the correction, replacement and warranty work as set forth in this Section 11(d), including, without limitation, the Program Fund’s rights to indemnification under Section 14. (e) If a Home Owner exercises a buyout option and purchases any Tesla Product from the Program Fund, Tesla will cover each Home Owner with limited warranties for Tesla Products in the forms attached as Exhibit 3 to each Builder Framework, as applicable. (f) In addition, Tesla will provide to each Home Owner the workmanship warranty attached as Exhibit 4 to each Builder Framework, assuming the Program Fund assigns that warranty to the Home Owner.
(g) The manuals and equipment warranties for Tesla Products are available upon request after each Order.
12. Proprietary Rights.
(a) Ownership. As between the Parties, Tesla shall remain the sole and exclusive owner of any and all Proprietary Rights associated with the System or any parts or derivations thereof. “Proprietary Rights” means patents, trademarks, copyrights, mask work rights, trade secrets and any other intellectual or proprietary rights.
(b) License. Tesla hereby grants to Member and CalChoice a limited, non-exclusive, non- sublicensable, non-transferable license to use the materials that Tesla provides for implementing the Master Marketing Plan and marketing the Plan in accordance with this Agreement. Except for the foregoing, no license or other right to Tesla’s Proprietary Rights is granted or implied hereby.
13. Termination.
(a) Termination for Cause. Each Party may terminate its participation in this Agreement or any Accepted Order for cause in the event (i) an insolvency event involving one of the other Parties; or (iii) any Party has materially breached any provision of this Agreement (other than non-payment) and, within 30 days after receipt of written notice of such breach from a non-breaching party, the breaching party has failed to cure such breach or, in the event the breach cannot reasonably be cured within such 30 day period, submit a plan for cure acceptable to each non-breaching party in its reasonable discretion. The termination of this Agreement by any single Party shall result in the termination of this Agreement as to all Parties.
(b) Insolvency Event. An “Insolvency Event” occurs with respect to a Party (i) if it is adjudged bankrupt; (ii) if it makes a composition or arrangement with its creditors; (iii) if it has a winding up petition or a petition for an administration order presented against it; (iv) if it has a receiver or manager or administrative receiver or provisional liquidator appointed; or (v) upon the happening of any other event of insolvency.
(c) Effects of Termination. Except as otherwise set forth in this Agreement, the expiration or termination of this Agreement will not affect any rights or obligations of the Parties that were incurred or that accrued prior to such expiration or termination. Termination shall not be deemed an election of remedies, and the non-defaulting party shall have all rights and remedies available under applicable law in connection with and following such termination.
14. Indemnification.
(a) Except to the extent permitted by this Agreement, no Party to this Agreement will be obligated to indemnify any other Party from any losses, damages, liabilities, deficiencies, actions, judgments, interest, awards, penalties, fines, costs or expenses, including reasonable legal fees (“Losses”) to the extent arising out of or due to the negligence or willful misconduct of such other Party. For purposes of this Agreement and each Builder Framework, “Indemnified Parties” means for each Party, (i) the Party and any person providing financing to the Party with respect to the System, (ii) any affiliate of the persons set forth in clause (i), and (iii) any director, officer, partner, member, manager, agent or employee of a person described in clause (i) or (ii); and, “Indemnifying Party” means each other Party, as the context requires.
(b) Tesla’s Indemnities. Tesla will indemnify, defend and hold harmless each other Party’s Indemnified Parties from any Losses arising out of any claim, action, suit, proceeding, investigation made or brought by any third party (“Claims”):
i. that Tesla Products (or any component or software thereof) or Tesla’s Work pursuant to any Accepted Order infringes the intellectual property rights of a third party, other than a Claim for which such Party is responsible under Section 11(c). In addition, if such Party is enjoined from the use, operation or enjoyment of Tesla Products or any part thereof as a result of any Claim alleging that Tesla Products or Tesla’s Work infringes the intellectual property rights of a third party, Tesla will at no cost to such Party, at Tesla’s option: (1) have such injunction removed, (2) substitute non-infringing goods or processes, or (3) modify the infringing goods or processes so they become non- infringing and provide the same or better functionality and performance relative to the affected item’s then-current functionality and performance; and ii. in connection with the design, construction, installation, warranty service, workmanship, materials or functionality of any materials, equipment and work furnished by Tesla, except with respect to any modification by any party other than Tesla (directly or indirectly) or use or reuse of Tesla Products that are the subject of an Accepted Order other than as permitted under this Agreement or their warranties. (c) CalChoice and Program Fund Intellectual Property Indemnity. CalChoice and Program Fund will indemnify and hold harmless Tesla and Tesla’s Indemnified Parties from any Losses arising out of Claims alleging infringement to the extent involving Member, CalChoice or Program Fund and:
i. a particular design, process or product required or specified pursuant to any Accepted Order or where the copyright violations are contained in drawings, specifications or other documents prepared or provided by Member, CalChoice or Program Fund or others for whom Member, CalChoice or Program Fund are responsible, ii. any modification by any party other than Tesla (directly or indirectly), use or reuse of Tesla Products other than as permitted under this Agreement or their warranties, iii. use of Tesla Products in combination with any other products, materials or equipment not expressly authorized in writing by Tesla in circumstances where the infringement would have been avoided by the use of Tesla Products not so combined, unless such other products, materials or equipment are provided, required or approved by Tesla (as indicated by reasonable evidence) for, or are intrinsic to, use of Tesla Products, or iv. any modifications or changes made to Tesla Products by any party other than Tesla other than at the direction (as indicated by reasonable evidence) of Tesla in circumstances where the infringement would have been avoided without such modifications or changes.
15. Limitation of Liability. Except for indemnification obligations (Section 14), breach of confidentiality (Section 17), or any gross negligence or willful misconduct, the Program Fund’s and Tesla’s total liability for all damages of any kind arising out this Agreement will not exceed $1,000,000.00 and neither Member nor CalChoice shall bear any liability for any damages of any kind arising out this Agreement. Also, no party will have to pay any other party for any indirect, special or consequential damages.
16. Force Majeure. Each Party shall be excused from performance and shall not be considered to be in breach with respect to any obligation hereunder other than any obligation to pay money due and owing, if and to the extent that such Party’s failure of, or delay in, performance is caused by or results from acts or circumstances beyond the reasonable control of such Party (a “Force Majeure Event”); provided:
(a) such Party gives the other Parties notice describing the particulars of the Force Majeure Event as soon as is reasonably practicable and in any event within ten (10) Business Days after the discovery of the Force Majeure Event and its impact on such Party’s performance; (b) the suspension of performance is of no greater scope and of no longer duration than is reasonably required by the Force Majeure Event;
(c) the Party uses reasonable endeavors to:
(i) overcome or mitigate the effects of such occurrence, and (ii) minimize costs and expenses attendant to or arising from such occurrence; (d) when the Party is able to resume performance of the affected obligations, such Party shall so notify the other Party and promptly resume performance;
17. Confidentiality; Publicity.
(a) Except for communications exchanged between each Party, each Party will keep any disclosures, as well as the terms of this Agreement, confidential in accordance with the non-disclosure agreements between them (the “NDAs”) and agree that this Agreement is confidential information of each of them for purposes of the NDAs. (Even though the NDAs are separate documents, they are considered part of this Agreement).
(b) Neither Party will advertise or issue any public announcement about this Agreement, or use the other Party’s mark, name or logo in any marketing literature, web sites, articles, press releases (including interviews with representatives of media organizations of any form), or any other document or electronic communication, without the other Party’s written consent. (c) Nothing in this Agreement, the NDAs, or any other agreement between the Parties limits or prohibits any announcement, disclosure, or other act that is required by law, including, but not limited to, the California Public Records Act.
18. Governing Law; Disputes.
(a) The Parties agree to comply with all applicable laws and regulations in connection with this Agreement. This Agreement is governed by the laws of the State of California. Any dispute arising out of or relating to this Agreement shall be brought in the Superior Court of California, County of Los Angeles, or the United States District Court for the Central District of California. (b) The Parties are not bound by any terms relating to Tesla Products or other matters covered by this Agreement or any Order that are not contained in this Agreement or the affected Order. (c) Each of the Parties also agree to promptly notify the other’s senior level management if there is any dispute relating to this Agreement or any Orders and to try to resolve the dispute in good faith.
If the Parties are unable to resolve a dispute within 20 days after that notice is given, then either Party can take the dispute to arbitration through Judicial Arbitration and Mediation Services (“JAMS”) according to JAMS Streamlined Arbitration Rules. The existence, content and result of the arbitration will be confidential. The arbitration will be conducted by a single arbitrator in English and in Los Angeles, California, unless otherwise agreed by the Parties. We will each bear our own expenses in the arbitration and will share equally the costs of the arbitration unless the arbitrator assigns costs to one of us. Judgment upon the award rendered in the arbitration may be entered in any court of competent jurisdiction.
19. Miscellaneous.
(a) Representations. Each Party represents and warrants to the other Parties that (i) it is a legal entity, duly organized, validly existing and in good standing under the laws of jurisdiction of incorporation; (ii) this Agreement constitutes a legal, valid and binding obligation of such Party enforceable in accordance with its terms; and (iii) the execution, delivery and performance of this Agreement (A) is within its powers, (B) has been duly authorized by all requisite action and (C) will not violate any agreement, commitment, certificate or other document to which it is a party or by which any of its assets may be bound or affected.
(b) Compliance with Law. Each Party will comply with all applicable laws and regulations in connection with its performance under Agreement.
(c) Notices. All notices under this Agreement must be in writing and must be sent via email, or express and/or certified mail, to the contacts identified in the Key Terms. (d) Assignment. Tesla or The Program Fund can assign this Agreement and each Accepted Order (i) to an affiliate of Tesla or The Program Fund, respectively, and (ii) as collateral in connection with its financing activities, in either case without the need for consent from any other Party. (e) Insurance. Each Party shall carry and maintain in force, with reputable insurance companies authorized to do business in the jurisdictions where the portion of the Member Territory is located.
Each of the Parties shall each maintain all insurance that such Party is required by law to maintain.
In connection with the Work pursuant to each Builder Framework and Accepted Order, Tesla shall be required to maintain insurance as set forth in Exhibit 6 to the Builder Framework. (f) Cumulative and Certain Exclusive Remedies. Except as otherwise specifically set forth in this agreement, all rights and remedies provided under this Agreement are cumulative and not exclusive, and the exercise by either Party of any right or remedy does not preclude the exercise of any other rights or remedies that may now or subsequently be available at law, in equity, by statute, in any other agreement between the Parties or otherwise. (g) Entire Agreement; Severability. This Agreement constitutes the entire agreement between the Parties regarding the subject matter hereof and supersedes all prior agreements, representations and understandings, oral or written, between the Parties regarding the subject matter hereof. If any provision of this Agreement is held by a court of competent jurisdiction to be invalid or unenforceable, such term shall be severable from the remainder of this Agreement and the remainder of this Agreement or the application of such term or provision to persons or circumstances other than those as to which it is held invalid or unenforceable shall not be affected and each term and provision of this Agreement shall be valid and be enforced to the fullest extent permitted by the law.
(h) Amendment and Modification. No amendment or modification of this Agreement is effective unless it is in writing and signed by each Party.
(i) Waiver. No waiver by either Party of any provision of this Agreement is effective unless explicitly set forth in writing and signed by such Party. No failure to exercise, or delay in exercising, any right or remedy arising from this Agreement operates or may be construed as a waiver thereof. No single or partial exercise of any right or remedy hereunder precludes any other or further exercise thereof or the exercise of any other right or remedy.
(j) Relationship of the Parties. The relationship between the Parties is that of independent contractors. Nothing contained in this Agreement shall be construed as creating any agency, partnership, joint venture or other form of joint enterprise, employment or fiduciary relationship between the Parties, and neither Party shall have authority to contract for or bind the other Party in any manner whatsoever.
(k) No Third-Party Beneficiaries. This Agreement is for the sole benefit of the Parties hereto and their respective successors and permitted assigns and nothing herein is intended to or shall confer upon any other person or entity any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of this Agreement.
(l) Survival. Provisions of this Agreement which by their nature contemplate or govern performance or observance subsequent to the termination or expiration of this Agreement shall survive such termination or expiration.
Schedule 2
Pricing
The following terms set forth in this table listed below (the “Pricing”) shall apply to each Accepted Order as of the date the Accepted Order is received by Tesla in accordance with the terms and conditions of this Agreement. The Parties agree that Tesla may, in its reasonable discretion, based upon community-specific factors, including installation complexity, as well as recent market factors and product availability, update the Pricing applicable to each Community pursuant to each New Home Builder Framework so long as the Pricing is at or below the Pricing set forth on the Program website. Pricing shall not exceed the Pricing on the Program website absent written Notice to the Parties (including email) and written acceptance by each applicable Party or any other method as may reasonably be agreed upon by the Parties.
Solution Price
Solar PV (Rooftop) $2.42/Wp
Powerwall – 1st $11,500
Powerwall – Each Additional $7,000
15 Year Powerwall Extended Warranty - Each $650
Member Services $0.40/Wp of PV
Tesla Pre-Construction Services
Examples: Remove copper from roof; upgrade
structure; remove existing solar PV;
remove/relocate AC unit; remove/fix existing
generator; remove existing battery backup;
remove/relocate existing solar thermal;
remove/relocate rooftop vents; remove/trim tree;
clean roof surface; fix electrical code violation;
remove/relocate shelving; master-panel upgrade
(MPU) (situational)
14.5¢ PPA: $0 - $750 in pre-construction services
15.0¢ PPA: $751 - $2,500 in pre-construction services
15.5¢ PPA: $2,500 - $5,000 in pre-construction services Project Ineligible: > $5,000 in pre-construction services By way of example, for a typical System (7.6 kW Solar PV + 1 Powerwall) Solution Price
7.6 kW Solar PV $18,392
Powerwall – 1st $11,500
Powerwall – Each Additional $0 (N/A)
15 Year Powerwall Extended Warranty - Each $650
Member Services $3,040
Tesla Pre-Construction Services $2,000
TOTAL: $35,582 (corresponds to a 15.0¢ Customer PPA)
Attachment A
Form of Customer Agreement
[Insert]
Attachment B
Form of New Homes Builder Framework Agreement
[Insert]
Attachment C
Form of Customer Order – Program Terms
[Insert]
RESIDENTIAL SOLAR / ENERGY STORAGE PROGRAM
POWER PURCHASE AND SALE AGREEMENT
BETWEEN
CITY OF PALMDALE, A CALIFORNIA MUNICIPAL CORPORATION,
D/B/A ENERGY FOR PALMDALE'S INDEPENDENT CHOICE
AND
PARTICIPATE.ENERGY LLC
i
Table of Contents
Page
ARTICLE 1 DEFINITIONS........................................................................................................... 1
1.1 Contract Definitions................................................................................................ 1
1.2 Rules of Interpretation ............................................................................................ 8 ARTICLE 2 SYSTEMS, COMMERCIAL OPERATION, FORECASTING ............................... 9
2.1 Systems ................................................................................................................... 9
2.2 Commercial Operation.......................................................................................... 10
2.3 Forecasting............................................................................................................ 10 ARTICLE 3 TERM....................................................................................................................... 10
3.1 Contract Term ....................................................................................................... 10
3.2 Contract Term Extension ...................................................................................... 10
3.3 Survival of Contract Provisions............................................................................ 10 ARTICLE 4 PURCHASE AND SALE ........................................................................................ 10
4.1 Sale of Product...................................................................................................... 10
4.2 Sale of Green Attributes........................................................................................ 11
4.3 Compensation ....................................................................................................... 11
4.4 Ownership of Renewable Energy Incentives........................................................ 11
4.5 Future Environmental Attributes. ......................................................................... 11
4.6 Sale of Energy to Customers................................................................................. 12 ARTICLE 5 OBLIGATIONS AND DELIVERIES..................................................................... 13
5.1 Delivery................................................................................................................. 14
5.2 Title and Risk of Loss........................................................................................... 14 ARTICLE 6 TAXES..................................................................................................................... 14
6.1 Allocation of Taxes and Charges.......................................................................... 14
6.2 Cooperation........................................................................................................... 14 ARTICLE 7 MAINTENANCE OF SYSTEMS ........................................................................... 15
7.1 Maintenance of Systems ....................................................................................... 15
7.2 Maintenance of Health and Safety........................................................................ 15 ARTICLE 8 METERING............................................................................................................. 15
8.1 Metering................................................................................................................ 15
8.2 Meter Verification................................................................................................. 15 ii
ARTICLE 9 INVOICING AND PAYMENT; CREDIT.............................................................. 15
9.1 Invoicing ............................................................................................................... 16
9.2 Payment................................................................................................................. 16
9.3 Books and Records ............................................................................................... 16
9.4 Payment Adjustments; Billing Errors ................................................................... 16
9.5 Billing Disputes .................................................................................................... 16
9.6 Netting of Payments.............................................................................................. 17 ARTICLE 10 NOTICES............................................................................................................... 17
10.1 Addresses for the Delivery of Notices.................................................................. 17
10.2 Acceptable Means of Delivering Notice............................................................... 17 ARTICLE 11 FORCE MAJEURE ............................................................................................... 17
11.1 Definition. ............................................................................................................. 17
11.2 No Liability If a Force Majeure Event Occurs ..................................................... 18
11.3 Notice 18
11.4 Termination Following Force Majeure Event....................................................... 18 ARTICLE 12 DEFAULTS; REMEDIES; TERMINATION ....................................................... 19
12.1 Events of Default. An “Event of Default” shall mean,........................................ 19
12.2 Remedies; Declaration of Early Termination Date............................................... 19
12.3 Termination Payment............................................................................................ 20
12.4 Notice of Payment of Termination Payment ........................................................ 20
12.5 Disputes With Respect to Termination Payment.................................................. 20
12.6 Rights And Remedies Are Cumulative................................................................. 21
12.7 Mitigation.............................................................................................................. 21 ARTICLE 13 LIMITATION OF LIABILITY AND EXCLUSION OF WARRANTIES........... 21
13.1 No Consequential Damages.................................................................................. 21
13.2 Waiver and Exclusion of Other Damages............................................................. 21 ARTICLE 14 REPRESENTATIONS AND WARRANTIES; AUTHORITY ............................ 22
14.1 Seller’s Representations and Warranties .............................................................. 22
14.2 Buyer’s Effective Date Representations and Warranties...................................... 23
14.3 General Covenants................................................................................................ 23 ARTICLE 15 ASSIGNMENT...................................................................................................... 24
15.1 General Prohibition on Assignments .................................................................... 24
15.2 Permitted Assignment; Change of Control of Seller ............................................ 24
15.3 Change of Control of Buyer.................................................................................. 24 iii
ARTICLE 16 LENDER ACCOMMODATIONS ........................................................................ 25
16.1 Granting of Lender Interest................................................................................... 25
16.2 Rights of Lender ................................................................................................... 25
16.3 Cure Rights of Lender........................................................................................... 26 ARTICLE 17 DISPUTE RESOLUTION ..................................................................................... 26
17.1 Governing Law ..................................................................................................... 26
17.2 Dispute Resolution................................................................................................ 26 ARTICLE 18 INDEMNIFICATION............................................................................................ 26
18.1 Indemnification..................................................................................................... 26
18.2 Claims 27
ARTICLE 19 INSURANCE......................................................................................................... 27
19.1 Insurance............................................................................................................... 27 ARTICLE 20 CONFIDENTIAL INFORMATION ..................................................................... 29
20.1 Definition of Confidential Information................................................................. 29
20.2 Duty to Maintain Confidentiality.......................................................................... 29
20.3 Irreparable Injury; Remedies ................................................................................ 29
20.4 Disclosure to Lender............................................................................................. 29 ARTICLE 21 MISCELLANEOUS .............................................................................................. 29
21.1 Entire Agreement; Integration; Exhibits............................................................... 29
21.2 Amendments ......................................................................................................... 30
21.3 No Waiver............................................................................................................. 30
21.4 No Agency, Partnership, Joint Venture or Lease.................................................. 30
21.5 Severability ........................................................................................................... 30
21.6 Forward Contract .................................................................................................. 30
21.7 Mobile-Sierra ........................................................................................................ 30
21.8 Counterparts.......................................................................................................... 30
21.9 Facsimile or Electronic Delivery .......................................................................... 31
21.10 Binding Effect....................................................................................................... 31 iv
Exhibits:
Exhibit A Included Systems List
Exhibit B Notices
Exhibit C Emergency Contact Information
1 RESIDENTIAL SOLAR / ENERGY STORAGE PROGRAM
POWER PURCHASE AND SALE AGREEMENT
This Residential Solar / Energy Storage Program Power Purchase and Sale Agreement (this “Agreement”) is made and effective as of ________, 2023 (the “Effective Date”), by and between Participate.Energy LLC (“Seller”) and CITY OF PALMDALE, A CALIFORNIA MUNICIPAL CORPORATION, D/B/A ENERGY FOR PALMDALE'S INDEPENDENT CHOICE (“Buyer”).
Seller and Buyer are sometimes referred to herein individually as a “ Party” and jointly as the “Parties.” Unless the context otherwise specifies or requires, capitalized terms in this Agreement have the meanings set forth in Article 1.
RECITALS
A, Seller desires to develop, design, construct, finance, own and operate residential solar and energy storage systems to be located at private residences within Buyer’s service territory (each a “System” or, collectively, the “Systems”).
B. Seller desires to sell to Buyer, and Buyer is willing to purchase from Seller the Product generated by each System pursuant to the terms and conditions of this Agreement.
C. Buyer and Seller intend that Seller will add Systems to this Agreement from time to time during the Portfolio Term. Each System, once such System has reached Commercial Operation evidenced by delivery from Seller to Buyer of (i) written confirmation from the System installer that such System has been completed, and (ii) an updated Included Systems List attached hereto as Exhibit A listing such new System as a system covered under this Agreement, shall be covered under the terms of this Agreement, and Buyer shall purchase from Seller the Product generated by such System as of the Commercial Operation Date.
D. In consideration of the mutual covenants and agreements herein contained, and for other good and valuable consideration, the sufficiency and adequacy of which are hereby acknowledged, the Parties agree to the following:
ARTICLE 1
DEFINITIONS
1.1 Contract Definitions . The following terms, when used herein with initial capitalization, shall have the meanings set forth below:
“Affiliate” means, with respect to any Person, each Person that directly or indirectly controls, is controlled by, or is under common control with such designated Person. For purposes of this definition, “control” (including, with correlative meanings, the terms “controlled by” and “under common control with”), as used with respect to any Person, shall mean (a) the direct or indirect right to cast at least fifty percent (50%) of the votes exercisable at an annual general meeting (or its equivalent) of such Person or, if there are no such rights, ownership of at least fifty percent (50%) of the equity or other ownership interest in such Person, or (b) the right to direct the policies or operations of such Person.
2 “Agreement” has the meaning set forth in the preamble and includes any exhibits, schedules and any written supplements hereto, any designated collateral, credit support or similar arrangement between the Parties.
“Bankrupt” means with respect to any entity, such entity that (a) files a petition or otherwise commences, authorizes or acquiesces in the commencement of a proceeding or cause of action under any bankruptcy, insolvency, reorganization or similar Law, (b) has any such petition filed or commenced against it which remains unstayed or undismissed for a period of sixty (60) days, (c) makes an assignment or any general arrangement for the benefit of creditors, (d) otherwise becomes bankrupt or insolvent (however evidenced), (e) has a liquidator, administrator, receiver, trustee, conservator or similar official appointed with respect to it or any substantial portion of its property or assets, or (f) is generally unable to pay its debts as they fall due. “Bankruptcy Code” means the United States Bankruptcy Code (11 U.S.C. §101 et seq.), as amended, and any successor statute.
“Business Day” means any day except a Saturday, Sunday, or a Federal Reserve Bank holiday in California. A Business Day begins at 8:00 a.m. and ends at 5:00 p.m. local time for the Party sending a Notice, or payment, or performing a specified action. “Buyer” has the meaning set forth in the preamble.
“Buyer’s Service Territory” means the service territory of Buyer “California Renewables Portfolio Standard ” or “ RPS” means the renewable energy program and policies established by California State Senate Bills 1038 (2002), 1078 (2002), 107 (2008), X-1 2 (2011), 350 (2015), and 100 (2018) as codified in, inter alia , California Public Utilities Code Sections 399.11 through 399.31 and California Public Resources Code Sections 25740 through 25751, as such provisions are amended or supplemented from time to time. “Commercial Operation ” means, with respect to each System, the condition existing when (i) all conditions to operate the System, including without limitation all applicable regulatory authorizations, approvals and permits for the operation of the System have been obtained, satisfied and complied with, and are in full force and effect, in order to produce, sell and transmit Energy. “Commercial Operation Date”means the first date of Commercial Operation of a System after completion of a System as confirmed in writing by the System installer. “Confidential Information” has the meaning set forth in Section 20.1. “Contract Capacity” means, with respect to each System the kW AC capacity measured at the Delivery Point set forth in the Included Systems List with respect to such System. “Capacity Charge” has the meaning set forth in Section 4.3. “Contract Price” has the meaning set forth in Section 4.3. “Contract Term” has the meaning set forth in Section 3.1. 3 “Contract Year” means with respect to any and all Systems a twelve (12) month period beginning on the Commercial Operation Date and each successive twelve (12) month period thereafter during the Contract Term.
“Customer” means the property owner of the property where a System is located. “Customer Agreement” means an agreement between the Seller and Customer relating to (a) the installation of the System at the property, (b) the sale of power generated by the System by Seller to Buyer, and (3) the sale by Buyer to the Customer of an amount of electric power, which is equivalent to electric power generated by the System located on the property. “Costs” means, with respect to the Non-Defaulting Party, brokerage fees, commissions and other similar third-party transaction costs and expenses reasonably incurred by such Party either in terminating any arrangement pursuant to which it has hedged its obligations or entering into new arrangements which replace the Agreement; and all reasonable attorneys’ fees and expenses incurred by the Non-Defaulting Party in connection with terminating the Agreement. “CPUC” means the California Public Utilities Commission, or successor entity. “Defaulting Party” has the meaning set forth in Section 12.1(a). “Delivered Energy” means with respect to each System all Energy produced from the System as measured in kWh at the System Delivery Point. “Delivery Point” or “System Delivery Point” means with respect to each System the point of delivery for Energy as set forth in the final as-built plans for such System. “Early Termination Date” has the meaning set forth in Section 12.2. “Effective Date” has the meaning set forth on the preamble. “Energy” means metered electrical energy, measured in kWh, which is produced by each System or by a number of Systems in the aggregate.
“Energy Rate” has the meaning set forth in Section 4.3. “Event of Default” has the meaning set forth in Section 12.1. “FERC” means the Federal Energy Regulatory Commission or any successor government agency.
“Force Majeure Event” has the meaning set forth in Section 11.1. “Future Environmental Attributes” shall mean, with respect to each System, any and all generation attributes (other than Green Attributes or Renewable Energy Incentives) under the RPS regulations and/or under any and all other international, federal, regional, state or other law, rule, regulation, bylaw, treaty or other intergovernmental compact, decision, administrative decision, program (including any voluntary compliance or membership program), competitive market or 4 business method (including all credits, certificates, benefits, and emission measurements, reductions, offsets and allowances related thereto) that are attributable, now, or in the future, to the generation of electrical energy by the System.
“Gains” means, with respect to any Party, an amount equal to the present value of the economic benefit to it, if any (exclusive of Costs), resulting from the termination of this Agreement for the remaining Contract Term, determined in a commercially reasonable manner. Factors used in determining the economic benefit to a Party may include, without limitation, reference to information supplied by one or more third parties, which shall exclude Affiliates of the Non- Defaulting Party, including without limitation, quotations (either firm or indicative) of relevant rates, prices, yields, yield curves, volatilities, spreads or other relevant market data in the relevant markets, comparable transactions, forward price curves based on economic analysis of the relevant markets, settlement prices for comparable transactions at liquid trading hubs (e.g., NP-15), all of which should be calculated for the remaining Contract Term, and includes the value of Green Attributes and Resource Adequacy Benefits.
“Governmental Authority ” means any federal, state, provincial, local or municipal government, any political subdivision thereof or any other governmental, congressional or parliamentary, regulatory, or judicial instrumentality, authority, body, agency, department, bureau, or entity with authority to bind a Party at law; provided, however, that “Governmental Authority” shall not in any event include the Buyer except to the extent the Buyer is exercising its authority as a local government and not in furtherance of this Agreement. “Green Attributes” means any and all credits, benefits, emissions reductions, offsets, and allowances, howsoever entitled, attributable to the generation from the System, and its displacement of conventional Energy generation. Green Attributes include but are not limited to Renewable Energy Credits, as well as: (1) any avoided emissions of pollutants to the air, soil or water such as sulfur oxides (SOx), nitrogen oxides (NOx), carbon monoxide (CO) and other pollutants; (2) any avoided emissions of carbon dioxide (CO2), methane (CH4), nitrous oxide, hydrofluorocarbons, perfluorocarbons, sulfur hexafluoride and other greenhouse gases (GHGs) that have been determined by the United Nations Intergovernmental Panel on Climate Change, or otherwise by law, to contribute to the actual or potential threat of altering the Earth’s climate by trapping heat in the atmosphere;1 (3) the reporting rights to these avoided emissions, such as Green Tag Reporting Rights. Green Tag Reporting Rights are the right of a Green Tag Purchaser to report the ownership of accumulated Green Tags in compliance with federal or state law, if applicable, and to a federal or state agency or any other party at the Green Tag Purchaser’s discretion, and include without limitation those Green Tag Reporting Rights accruing under Section 1605(b) of The Energy Policy Act of 1992 and any present or future federal, state, or local law, regulation or bill, and international or foreign emissions trading program. Green Tags are accumulated on a MWh basis and one Green Tag represents the Green Attributes associated with one (1) MWh of Energy. Green Attributes do not include (i) any energy, capacity, reliability or
1 Avoided emissions may or may not have any value for GHG compliance purposes.
Although avoided emissions are included in the list of Green Attributes, this inclusion does not create any right to use those avoided emissions to comply with any GHG regulatory program.
5 other power attributes from the System, (ii) production tax credits associated with the construction or operation of the System and other financial incentives in the form of credits, reductions, or allowances associated with the System that are applicable to a state or federal income taxation obligation, (iii) fuel-related subsidies or “tipping fees” that may be paid to Seller to accept certain fuels, or local subsidies received by the generator for the destruction of particular preexisting pollutants or the promotion of local environmental benefits, or (iv) emission reduction credits encumbered or used by the System for compliance with local, state, or federal operating and/or air quality permits. If the System is a biomass or landfill gas System and Seller receives any tradable Green Attributes based on the greenhouse gas reduction benefits or other emission offsets attributed to its fuel usage, it shall provide Buyer with sufficient Green Attributes to ensure that there are zero net emissions associated with the production of electricity from the System. “Green Tag Reporting Rights ” means the right of a purchaser of renewable energy to report ownership of accumulated “green tags” in compliance with and to the extent permitted by Law and include, without limitation, rights under Section 1605(b) of the Energy Policy Act of 1992, and any present or future federal, state or local certification program or emissions trading program, including pursuant to the WREGIS operating rules. “Included Systems List”means a list of Systems covered by the terms of this Agreement, of which Seller will sell to Buyer, and Buyer will purchase from Seller the Product generated by each System listed thereon. The Included System List will be amended by means of Seller delivering an updated Included Systems List to Buyer from time to time, listing any new System completed by Seller. The initial Included Systems List is attached hereto as Exhibit A and subsequent Included Systems List amended as stated above shall automatically replace any prior Included Systems List as Exhibit A attached hereto. Absent manifest error or fraud, each updated Included Systems List shall be binding upon the Parties. “Indemnified Party” has the meaning set forth in Section 18.1. “Indemnifying Party” has the meaning set forth in Section 18.1. “Installed Capacity” means, with respect to each System, the System demonstrated peak System electrical output measured in kW AC at the System Delivery Point. “Interest Rate” has the meaning set forth in Section 9.2. “kW” means kilowatts measured in alternating current.
“kWh” means kilowatt-hour.
“Law” means any applicable law, statute, regulation, rule, regulation, decision, writ, order, decree or judgment, permit or any interpretation thereof, promulgated or issued by a Governmental Authority.
“Lender” means, collectively, any Person (i) 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 System, whether that financing or refinancing takes the form of private debt, equity, public debt or any other form 6 (including financing or refinancing provided to a member or other direct or indirect owner of Seller), including any equity investor directly or indirectly providing financing or refinancing for the System or purchasing equity ownership interests of Seller and/or its Affiliates, and any trustee or agent acting on their behalf, (ii) providing interest rate or commodity protection under an agreement hedging or otherwise mitigating the cost of any of the foregoing obligations and/or (iii) participating in a lease financing (including a sale leaseback or leveraged leasing structure) with respect to the System.
“Losses” means, with respect to any Party, an amount equal to the present value of the economic loss to it, if any (exclusive of Costs), resulting from termination of this Agreement for the remaining Contract Term, determined in a commercially reasonable manner. Factors used in determining economic loss to a Party may include, without limitation, reference to information supplied by one or more third parties, which shall exclude Affiliates of the Non-Defaulting Party, including without limitation, quotations (either firm or indicative) of relevant rates, prices, yields, yield curves, volatilities, spreads or other relevant market data in the relevant markets, comparable transactions, forward price curves based on economic analysis of the relevant markets, settlement prices for comparable transactions at liquid trading hubs (e.g., NYMEX), all of which should be calculated for the remaining Contract Term and must include the value of Green Attributes and Resource Adequacy Benefits.
“MW” means megawatts measured in alternating current.
“MWh” means megawatt-hour.
“Non-Defaulting Party” has the meaning set forth in Section 12.2. “Notice” shall, unless otherwise specified in the Agreement, mean written communications by a Party to be delivered by hand delivery, United States mail, overnight courier service, facsimile or electronic messaging (e-mail).
“Party” has the meaning set forth in the preamble.
“Person” means any individual, sole proprietorship, corporation, limited liability company, limited or general partnership, joint venture, association, joint-stock company, trust, incorporated organization, institution, public benefit corporation, unincorporated organization, government entity or other entity.
“Portfolio Term” means the time period commencing on the Effective Date and ending on the 5th anniversary thereof.
“Pre-Construction Expenses” means expenses incurred by Seller or its contractors prior to construction of a System to prepare the System site for System integration, which may include, without limitation, removal of copper or other materials from roof; upgrade roof structure; removal of existing solar PV; removal or relocation of AC unit; removal or repair of existing generator; removal of existing battery backup; removal or relocation of existing solar thermal; removal or relocation of rooftop vents; removal of trees or obstructions and tree trimming; cleaning of roof surface; repair of electrical code violation; removal or relocation of shelving; or master-panel upgrade (MPU).
7 “Product” means, with reference to each System, all electric energy produced by the System throughout the System Delivery Term; all Green Attributes; and all Resource Adequacy Benefits, if any; generated by, associated with or attributable to the System throughout the System Delivery Term.
“Prudent Operating Practice ” means the practices, methods and standards of professional care, skill and diligence engaged in or approved by a significant portion of the electric power industry for facilities of similar size, type, and design, that, in the exercise of reasonable judgment, in light of the facts known at the time, would have been expected to accomplish results consistent with Law, reliability, safety, environmental protection, applicable codes, and standards of economy and expedition. Prudent Operating Practices are not necessarily defined as the optimal standard practice method or act to the exclusion of others, but rather refer to a range of actions reasonable under the circumstances.
“Qualified Assignee” means any Person that has (or will contract with a Person that has) competent experience in the operation and maintenance of similar electrical generation systems and is financially capable of performing Seller’s obligations (considering such Person’s own financial wherewithal and that of such Person’s guarantor or other credit support) under this Agreement.
“Renewable Energy Credit” has the meaning set forth in California Public Utilities Code Section 399.12(h), as may be amended from time to time or as further defined or supplemented by Law.
“Renewable Energy Incentives” means with respect to each System: (a) all federal, state, or local Tax credits or other Tax benefits associated with the construction, ownership, or production of electricity from the System (including credits under Sections 38, 45, 46 and 48 of the Internal Revenue Code of 1986, as amended); and (b) any other form of incentive relating in any way to the System that are not a Green Attribute or a Future Environmental Attribute. “Resource Adequacy Benefits ” means the rights and privileges attached to the System that satisfy any entity’s resource adequacy obligations, as those obligations are set forth in CPUC Decisions 04-01-050, 04-10-035, 05-10-042, 06-06-064, 06-07-031 and any subsequent CPUC ruling or decision and shall include any local, zonal or otherwise locational attributes associated with the System.
“Seller” has the meaning set forth in the preamble.
“Settlement Amount” means the Non-Defaulting Party’s Costs and Losses, on the one hand, netted against its Gains, on the other. If the Non-Defaulting Party’s Costs and Losses exceed its Gains, then the Settlement Amount shall be an amount owing to the Non-Defaulting Party. If the Non-Defaulting Party’s Gains exceed its Costs and Losses, then the Settlement Amount shall be zero dollars ($0). The Settlement Amount does not include consequential, incidental, punitive, exemplary or indirect or business interruption damages. “System(s)” has the meaning set forth in the Recitals hereto. 8 “System Delivery Term ” means with respect to each System the period of twenty-five (25) Contract Years beginning on the Commercial Operation Date and ending on the twentieth (25th) anniversary of the Commercial Operation Date, unless terminated earlier or extended in accordance with the terms and conditions of this Agreement. In the event of an extension of a Customer Agreement beyond 25 years, the System Delivery Term for the respective System shall be extended to be co-terminus with such Customer Agreement. “System Forecast List ” has the meaning set forth in Section 20.1. The format of the System Forecast List shall be substantially similar to the format of the Included Systems List. “Tax” or “ Taxes” means all U.S. federal, state and local and any foreign taxes, levies, assessments, surcharges, duties and other fees and charges of any nature imposed by a Governmental Authority, whether currently in effect or adopted during the Contract Term, including ad valorem, excise, franchise, gross receipts, import/export, license, property, sales and use, stamp, transfer, payroll, unemployment, income, and any and all items of withholding, deficiency, penalty, additions, interest or assessment related thereto. “Termination Payment” has the meaning set forth in Section 12.3. “Terminated Transaction” has the meaning set forth in Section 12.2. “WREGIS” means the Western Renewable Energy Generation Information System or any successor renewable energy tracking program.
“WREGIS Certificate Deficit” has the meaning set forth in Section 4.8Error! Reference source not found..
“WREGIS Certificate(s)” means “Certificate(s)” as defined by WREGIS in the WREGIS Operating Rules and are designated as eligible for complying with the California Renewables Portfolio Standard.
“WREGIS Operating Rules” means those operating rules and requirements adopted by WREGIS as of October 2022, as subsequently amended, supplemented or replaced (in whole or in part) from time to time.
1.2 Rules of Interpretation. In this Agreement, except as expressly stated otherwise or unless the context otherwise requires:
(a) headings and the rendering of text in bold and italics are for convenience and reference purposes only and do not affect the meaning or interpretation of this Agreement; (b) words importing the singular include the plural and vice versa and the masculine, feminine and neuter genders include all genders; (c) the words “hereof”, “herein”, and “hereunder” and words of similar import shall refer to this Agreement as a whole and not to any particular provision of this Agreement; 9 (d) a reference to an Article, Section, paragraph, clause, Party, or Exhibit is a reference to that Section, paragraph, clause of, or that Party or Exhibit to, this Agreement unless otherwise specified, and in the event of a conflict, the provisions of the main body of this Agreement shall prevail over the provisions of any attachment or annex; (e) a reference to a document or agreement, including this Agreement shall mean such document, agreement or this Agreement including any amendment or supplement to, or replacement, novation or modification of this Agreement, but disregarding any amendment, supplement, replacement, novation or modification made in breach of such document, agreement or this Agreement;
(f) a reference to a Person includes that Person’s successors and permitted assigns;
(g) the term “including” means “including without limitation” and any list of examples following such term shall in no way restrict or limit the generality of the work or provision in respect of which such examples are provided; (h) references to any statute, code or statutory provision are to be construed as a reference to the same as it may have been, or may from time to time be, amended, modified or reenacted, and include references to all bylaws, instruments, orders and regulations for the time being made thereunder or deriving validity therefrom unless the context otherwise requires; (i) in the event of a conflict, a mathematical formula or other precise description of a concept or a term shall prevail over words providing a more general description of a concept or a term;
(j) references to any amount of money shall mean a reference to the amount in United States Dollars;
(k) the expression “and/or” when used as a conjunction shall connote “any or all of”;
(l) words, phrases or expressions not otherwise defined herein that (i) have a generally accepted meaning in Prudent Operating Practice shall have such meaning in this Agreement or (ii) do not have well known and generally accepted meaning in Prudent Operating Practice but that have well known and generally accepted technical or trade meanings, shall have such recognized meanings; and
(m) each Party acknowledges that it was represented by counsel in connection with this Agreement and that it or its counsel reviewed this Agreement and that any rule of construction to the effect that ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement.
ARTICLE 2
SYSTEMS, COMMERCIAL OPERATION, FORECASTING
10 2.1 Systems. During the Portfolio Period, Seller shall use reasonable commercial efforts to design, develop and install Systems in Buyer’s Service Territory. Each System developed by Seller in Buyer’s Service Territory shall be developed exclusively for inclusion under the terms of this Agreement.
2.2 Commercial Operation. Within ten (10) days after a System qualified under Section 2.1 above has reached Commercial Operation, Seller shall deliver to Buyer confirmation by the System installer either in hardcopy or electronic that such System has been completed and an updated Included Systems List adding such System thereon. Upon delivery of the updated Included Systems List, such System shall be covered under the terms of this Agreement.
2.3 Forecasting. Within ten (10) days after the end of each calendar quarter during the Portfolio Period, Seller shall deliver to Buyer a list (the “System Forecast List”) with Systems which Seller forecasts to place into Commercial Operation within ninety (90) days after the date of the System Forecast List.
ARTICLE 3
TERM
3.1 Contract Term. The term of this Agreement ( “Contract Term”) consist of the Portfolio Term and the System Delivery Term, and shall commence on the Effective Date and shall remain in full force and effect with respect to each System until the end of the applicable System Delivery Term unless earlier terminated as provided herein.
3.2 Contract Term Extension. Buyer shall have the right, but not the obligation, to extend the System Delivery Term for any System for two additional five (5) Contract Years at the then-current Contract Price, but Seller must receive Notice of such extension at least one hundred eighty days (180) before the end of the initial Contract Term or the then current extension term thereof.
3.3 Survival of Contract Provisions. Applicable provisions of this Agreement shall continue in effect after termination, including early termination, to the extent necessary to enforce or complete the duties, obligations or responsibilities of the Parties arising prior to termination.
The confidentiality obligations of the Parties under Article 19 shall remain in full force and effect for two (2) years following the termination of this Agreement, and all indemnity and audit rights shall remain in full force and effect four (4) years following the termination of this Agreement.
ARTICLE 4
PURCHASE AND SALE
4.1 Sale of Product. Subject to Seller’s document deliveries to Buyer under Section
2.2 above and the terms and conditions of this Agreement, during the Delivery Term, Seller shall sell and deliver to Buyer, and Buyer shall purchase from Seller at the applicable Energy Rate, all of the Product produced by a System delivered to the System Delivery Point. At its sole discretion, Buyer may re-sell or use for another purpose all or a portion of the Product. Buyer will have exclusive rights to offer, bid, or otherwise submit the Product from the System for resale in the market, and retain and receive any and all related revenues. Buyer has no obligation to purchase from Seller any Product from any System that is not or cannot be delivered to the System Delivery 11 Point as a result of any circumstance, including, an outage of the System, a Force Majeure Event affecting Buyer’s ability to receive the Product (but not its ability to transmit the Product from the System Delivery Point). In no event shall Seller have the right to procure any element of the Product for sale or delivery to Buyer from sources other than the Systems covered under the terms of this Agreement.
4.2 Sale of Green Attributes. During the Delivery Term, Seller shall sell and deliver to Buyer, and Buyer shall purchase from Seller, all of the Green Attributes, attributable to the Energy produced by a Systems covered under the terms of this Agreement at no additional cost.
4.3 Compensation. The contract price payable by Buyer to Seller hereunder (the “Contract Price”) shall be calculated as the sum of Energy Rate and Capacity Charge. (a) Energy Rate. For each kWh delivered to a System Delivery Point Buyer shall pay Seller the following amounts (the “Energy Rate”) during the first Contract Year of each System Delivery Term:
(i) fourteen and one-half U.S. Cents ($0.145) for Systems with Pre- Construction Costs of seven hundred fifty Dollars ($750.00) or less; (ii) fifteen U.S. Cents ($0.15) for Systems with Pre-Construction Costs exceeding seven hundred fifty Dollars ($750.00) but less than two thousand five hundred Dollars ($2,500);
(iii) fifteen and one-half U.S. Cents ($0.155) for Systems with Pre- Construction Costs exceeding two thousand five hundred Dollars ($2,500) but less than five thousand Dollars ($5,000)
The applicable Energy Rate for the first Contract Year of the System Delivery Term will be set forth on the Included Systems List for each System. For each subsequent Contract Year during the System Delivery Term, the Energy Rate shall increase by one and nine-tenth percent (1.9%) annually.
(b) Capacity Charge. For each System that includes an installed and operational Tesla Powerwall, Buyer shall pay Seller a monthly fee (the “Capacity Charge”) in the amount of one hundred fifteen Dollars ($115.00), provided, that the Capacity Charge shall be reduced to seventy-five Dollars ($75.00) for any additional Tesla Powerwall installed at the same System site.
4.4 Ownership of Renewable Energy Incentives. Seller shall have all right, title and interest in and to all Renewable Energy Incentives. Buyer acknowledges that any Renewable Energy Incentives belong to Seller. If any Renewable Energy Incentives, or values representing the same, are initially credited or paid to Buyer, Buyer shall cause such Renewable Energy Incentives or values relating to same to be assigned or transferred to Seller without delay. Buyer shall reasonably cooperate with Seller, at Seller’s sole expense, in Seller’s efforts to meet the requirements for any certification, registration, or reporting program relating to Renewable Energy Incentives.
12 4.5 Future Environmental Attributes.
(a) The Parties acknowledge and agree that as of the Effective Date, environmental attributes sold under this Agreement are restricted to Green Attributes; however, Future Environmental Attributes may be created by a Governmental Authority through Laws enacted after the Effective Date. In such event, Buyer shall bear all costs associated with the transfer, qualification, verification, registration and ongoing compliance for such Future Environmental Attributes, but there shall be no increase in the Contract Price. Upon Seller’s receipt of Notice from Buyer of Buyer’s intent to claim such Future Environmental Attributes, the Parties shall determine the necessary actions and additional costs associated such Future Environmental Attributes. Seller shall have no obligation to alter the System unless the Parties have agreed on all necessary terms and conditions relating to such alteration and Buyer has agreed to reimburse Seller for all costs associated with such alteration. (b) If Buyer elects to receive Future Environmental Attributes pursuant to Section 4.5(a), the Parties agree to negotiate in good faith with respect to the development of further agreements and documentation necessary to effectuate the transfer of such Future Environmental Attributes, including agreement with respect to (i) appropriate transfer, delivery and risk of loss mechanisms, and (ii) appropriate allocation of any additional costs, as set forth above; provided, that the Parties acknowledge and agree that such terms are not intended to alter the other material terms of this Agreement.
4.6 Sale of Energy to Customers. Buyer agrees to sell the electric energy produced by the System throughout the System Delivery Term at a price not higher than the Energy Rate and at terms no less favorable than the terms set forth under this Agreement.
4.7 Transfer of Renewable Energy Credits.
(a) Tracking of RECs in WREGIS. Seller warrants that all necessary steps to allow the Renewable Energy Credits transferred to Buyer to be tracked in the Western Renewable Energy Generation Information System will be taken prior to or immediately after the first delivery of Product under the terms of this Agreement.
(b) Transfer of Renewable Energy Credits. Seller and, if applicable, its successors, represents and warrants that throughout the System Delivery Term for each applicable System, the Renewable Energy Credits relating to such System transferred to Buyer conform to the definition and attributes required for compliance with the California Renewables Portfolio Standard, as set forth in California Public Utilities Commission Decision 08-08-028, and as may be modified by subsequent decision of the California Public Utilities Commission or by subsequent legislation. To the extent a change in law occurs after execution of this Agreement that causes this representation and warranty to be materially false or misleading, it shall not be an Event of Default if Seller has used commercially reasonable efforts to comply with such change in law. (c) Eligibility. Seller, and, if applicable, its successors, represents and warrants that throughout the System Delivery Term for each applicable System, the Delivered Energy of such System qualifies under the requirements of the California Renewables Portfolio Standard.
To the extent a change in law occurs after execution of this Agreement that causes this 13 representation and warranty to be materially false or misleading, it shall not be an Event of Default if Seller has used commercially reasonable efforts to comply with such change in law.
4.8 WREGIS. Seller shall, take all reasonable commercial actions and execute all documents or instruments necessary to ensure that all WREGIS Certificates associated with all Renewable Energy Credits corresponding to all Delivered Energy are issued and tracked for purposes of satisfying the requirements of the California Renewables Portfolio Standard and transferred in a timely manner to Buyer for Buyer’s sole benefit. Seller shall transfer the Renewable Energy Credits to Buyer. Seller shall comply with all Laws, including the WREGIS Operating Rules, regarding the certification and transfer of such WREGIS Certificates to Buyer and Buyer shall be given sole title to all such WREGIS Certificates. (a) Prior to the Commercial Operation Date, Seller shall register the System with WREGIS and establish an account with WREGIS (“ Seller’s WREGIS Account ”), which Seller shall maintain until the end of the System Delivery Term for the last System to operate under the terms of this Agreement. Seller shall transfer the WREGIS Certificates using “ Forward Certificate Transfers” (as described in the WREGIS Operating Rules) from Seller’s WREGIS Account to the WREGIS account(s) of Buyer or the account(s) of a designee that Buyer identifies by Notice to Seller (“Buyer’s WREGIS Account”) with not less than 30 days prior written notice or such longer notice as is required for Seller to meet mandatory notice periods under WREGIS Operating Rules. Seller shall be responsible for all expenses associated with registering each System with WREGIS, establishing and maintaining Seller’s WREGIS Account, paying WREGIS Certificate issuance and transfer fees, and transferring WREGIS Certificates from Seller’s WREGIS Account to Buyer’s WREGIS Account.
(b) Seller shall cause Forward Certificate Transfers to occur on a monthly basis in accordance with the certification procedure established by the WREGIS Operating Rules. Since WREGIS Certificates will only be created for whole MWh amounts of Delivered Energy generated, any fractional MWh amounts (i.e., kWh) will be carried forward until sufficient generation is accumulated for the creation of a WREGIS Certificate. (c) Seller shall, at its sole expense, ensure that the WREGIS Certificates for a given calendar month correspond with the Delivered Energy for such calendar month as evidenced by each System’s metered data.
(d) Due to the ninety (90) day delay in the creation of WREGIS Certificates relative to the timing of invoice payment under Section 9.2, Buyer shall make an invoice payment for a given month in accordance with Section 9.2 before the WREGIS Certificates for such month are formally transferred to Buyer in accordance with the WREGIS Operating Rules and this Section 4.8. Notwithstanding this delay, Buyer shall have all right and title to all such WREGIS Certificates upon payment to Seller in accordance with Section 9.2. (e) If WREGIS changes the WREGIS Operating Rules after the Effective Date or applies the WREGIS Operating Rules in a manner inconsistent with this Section 4.8 after the Effective Date, the Parties promptly shall modify this Section 4.8 as reasonably required to cause and enable Seller to transfer to Buyer’s WREGIS Account a quantity of WREGIS Certificates for each given calendar month that corresponds to the Delivered Energy in the same calendar month.. 14 ARTICLE 5
OBLIGATIONS AND DELIVERIES
5.1 Delivery.
(a) Energy. Subject to the terms and conditions of this Agreement, Seller shall make available and Buyer shall accept all Delivered Energy on an as-generated, instantaneous basis at the respective System Delivery Point. Notwithstanding anything to the contrary in this Agreement (including with respect to any Force Majeure Event), Buyer shall be responsible for all charges, penalties, ratcheted demand or similar charges, and any transmission related charges, including imbalance penalties or congestion charges associated with Delivered Energy from and after the System Delivery Point.
(b) Green Attributes. Seller hereby provides and conveys all Green Attributes associated with the Delivered Energy as part of the Product being delivered. Seller represents and warrants that Seller holds the rights to all Green Attributes from the System, and Seller agrees to convey and hereby conveys all such Green Attributes to Buyer as included in the delivery of the Product from the System.
5.2 Title and Risk of Loss.
(a) Energy. Title to and risk of loss related to the Delivered Energy generated by each System shall pass and transfer from Seller to Buyer at the System Delivery Point. (b) Green Attributes. Title to and risk of loss related to the Green Attributes shall pass and transfer from Seller to Buyer upon the transfer of such Green Attributes in accordance with WREGIS.
ARTICLE 6
TAXES
6.1 Allocation of Taxes and Charges . Seller shall pay or cause to be paid all Taxes on or with respect to any System or on or with respect to the sale and making available Product to Buyer, that are imposed on Product prior to the System Delivery Point. Buyer shall pay or cause to be paid all Taxes on or with respect to the delivery to and purchase by Buyer of Product that are imposed on Product at and from a System Delivery Point (other than withholding or other Taxes imposed on Seller’s income, revenue, receipts or employees). Notwithstanding the foregoing, each Party shall be responsible for its own Taxes calculated based on the income or profits generated in connection with the purchase and sale of the Product hereunder. If a Party is required to remit or pay Taxes that are the other Party’s responsibility hereunder, such Party shall promptly pay the Taxes due and then seek and receive reimbursement from the other for such Taxes. In the event any sale of Energy hereunder is exempt from or not subject to any particular Tax, Buyer shall provide Seller with all necessary documentation within thirty (30) days after the Effective Date to evidence such exemption or exclusion. If Buyer does not provide such documentation, then Buyer shall indemnify, defend, and hold Seller harmless from any liability with respect to Taxes from which Buyer claims it is exempt.
15 6.2 Cooperation. Each Party shall use reasonable efforts to implement the provisions of and administer this Agreement in accordance with the intent of the Parties to minimize all Taxes, so long as no Party is materially adversely affected by such efforts. The Parties shall cooperate to minimize Tax exposure; provided, however, that neither Party shall be obligated to incur any financial or operational burden to reduce Taxes for which the other Party is responsible hereunder without receiving due compensation therefore from the other Party.
ARTICLE 7
MAINTENANCE OF SYSTEMS
7.1 Maintenance of Systems . Seller shall comply with Law and Prudent Operating Practice relating to the operation and maintenance of all System covered under this Agreement, and the generation and sale of Product generated therefrom.
7.2 Maintenance of Health and Safety . Seller shall take reasonable safety precautions with respect to the operation, maintenance, repair and replacement of each System. If Seller becomes aware of any circumstances relating to a System that create an imminent risk of damage or injury to any Person or any Person’s property, Seller shall take prompt, reasonable action to prevent such damage or injury and shall give Buyer’s emergency contact identified on Exhibit D Notice of such condition. Such action may include disconnecting and removing all or a portion of such System, or suspending the supply of Energy from such System to Buyer.
ARTICLE 8
METERING
8.1 Metering. Seller shall measure the amount of Energy produced at each System using a commercially available, revenue-grade metering system. Such meter shall be installed and maintained at Seller’s cost. Each meter shall be kept under seal, such seals to be broken only when the meters are to be tested, adjusted, modified or relocated. In the event that Seller breaks a seal, Seller shall notify Buyer as soon as practicable. In addition, Seller hereby agrees to provide all meter data to Buyer in a form reasonably acceptable to Buyer.
8.2 Meter Verification . If Seller has reason to believe there may be a meter malfunction, or upon Buyer’s reasonable request, Seller shall test the meters of a reasonable sample of all Systems then covered under this Agreement, but in any case, not more than ten percent (10%) of all installed Systems. The tests shall be conducted by independent third-parties qualified to conduct such tests. Buyer shall be notified seven (7) days in advance of such tests and have a right to be present during such tests. If a meter is inaccurate it shall be promptly repaired or replaced. If a meter is inaccurate by more than one percent (1%) and it is not known when the meter inaccuracy commenced (if such evidence exists such date will be used to adjust prior invoices), then the invoices covering the period of time since the last meter test for the respective System shall be adjusted for the amount of the inaccuracy on the assumption that the inaccuracy persisted during one-half of such period. If testing of meters from a reasonable sample of all Systems covered under his Agreement discovers more than ten percent 10% of tested meters being inaccurate by more than one percent (1%) each, Buyer may request testing of an additional reasonable sample of all Systems then covered under this Agreement, but in any case, not more than an additional ten percent (10%) of all installed Systems. 16 ARTICLE 9
INVOICING AND PAYMENT; CREDIT
9.1 Invoicing. Seller shall make good faith efforts to deliver an aggregate invoice to Buyer for the Contract Price due for all Systems then covered under this Agreement no later than fifteen (15) Business Days after the end of the prior monthly billing period.
9.2 Payment. Buyer shall make payment to Seller for the Contract Price due and payable by wire transfer or ACH payment to the bank account provided on each monthly invoice.
Buyer shall pay undisputed invoice amounts within thirty (30) days after receipt of the invoice. If such due date falls on a weekend or legal holiday, such due date shall be the next Business Day.
Payments made after the due date will be considered late and will bear interest on the unpaid balance. If the amount due is not paid on or before the due date or if any other payment that is due and owing from one party to another is not paid on or before its applicable due date, a late payment charge shall be applied to the unpaid balance and shall be added to the next billing statement. Such late payment charge shall be calculated based on an annual interest rate equal to 10% of the total amount due. If the due date occurs on a day that is not a Business Day, the late payment charge shall begin to accrue on the next succeeding Business Day.
9.3 Books and Records . To facilitate payment and verification, each Party shall maintain all books and records necessary for billing and payments, including copies of all invoices under this Agreement, for a period of at least two (2) years or as otherwise required by Law. Upon fifteen (15) days’ Notice to Seller, Buyer shall be granted reasonable access to the accounting books and records pertaining to all invoices generated pursuant to this Agreement.
9.4 Payment Adjustments; Billing Errors . Payment adjustments shall be made if Buyer or Seller discovers there have been good faith inaccuracies in invoicing that are not otherwise disputed under Section 9.5, or there is determined to have been a meter inaccuracy sufficient to require a payment adjustment. If the required adjustment is in favor of Buyer, Buyer’s monthly payment shall be credited in an amount equal to the adjustment. If the required adjustment is in favor of Seller, Seller shall add the adjustment amount to Buyer’s next monthly invoice.
Adjustments in favor of either Buyer or Seller shall bear interest, until settled in full, in accordance with Section 9.2, accruing from the date on which the non-erring Party received Notice thereof.
9.5 Billing Disputes . A Party may, in good faith, dispute the correctness of any invoice or any adjustment to an invoice, rendered under this Agreement or adjust any invoice for any arithmetic or computational error within twelve (12) months of the date the invoice, or adjustment to an invoice, was rendered. In the event an invoice or portion thereof, or any other claim or adjustment arising hereunder, is disputed, payment of the undisputed portion of the invoice shall be required to be made when due. Any invoice dispute or invoice adjustment shall be in writing and shall state the basis for the dispute or adjustment. Payment of the disputed amount shall not be required until the dispute is resolved. Upon resolution of the dispute, any required payment shall be made within five (5) Business Days of such resolution along with interest accrued at the Interest Rate from and including the original due date to but excluding the date paid. Inadvertent overpayments shall be returned upon request or deducted by the Party receiving such overpayment from subsequent payments, with interest accrued at the Interest Rate from and including the date of such overpayment to but excluding the date repaid or deducted by 17 the Party receiving such overpayment. Any dispute with respect to an invoice is waived if the other Party is not notified in accordance with this Section 9.5 within twelve (12) months after the invoice is rendered or subsequently adjusted, except to the extent any misinformation was from a third party not affiliated with any Party and such third party corrects its information after the twelve-month period. If an invoice is not rendered within twelve (12) months after the close of the month during which performance occurred, the right to payment for such performance is waived.
9.6 Netting of Payments. The Parties hereby agree that they shall discharge mutual debts and payment obligations due and owing to each other on the same date through netting, in which case all amounts owed by each Party to the other Party for the purchase and sale of Product during the monthly billing period under this Agreement, including any related damages calculated pursuant to Exhibits B and F, interest, and payments or credits, shall be netted so that only the excess amount remaining due shall be paid by the Party who owes it.
ARTICLE 10
NOTICES
10.1 Addresses for the Delivery of Notices . Any Notice required, permitted, or contemplated hereunder shall be in writing, shall be addressed to the Party to be notified at the address set forth Exhibit B or at such other address or addresses as a Party may designate for itself from time to time by Notice hereunder.
10.2 Acceptable Means of Delivering Notice . Each Notice required, permitted, or contemplated hereunder shall be deemed to have been validly served, given or delivered as follows: (a) if sent by United States mail with proper first class postage prepaid, three (3) Business Days following the date of the postmark on the envelope in which such Notice was deposited in the United States mail; (b) if sent by a regularly scheduled overnight delivery carrier with delivery fees either prepaid or an arrangement with such carrier made for the payment of such fees, the next Business Day after the same is delivered by the sending Party to such carrier; (c) if sent by electronic communication (including electronic mail, facsimile, or other electronic means) and if concurrently with the transmittal of such electronic communication the sending Party provides a copy of such electronic Notice by hand delivery or express courier, at the time indicated by the time stamp upon delivery; or (d) if delivered in person, upon receipt by the receiving Party.
Notwithstanding the foregoing, Notices of outages or other scheduling or dispatch information or requests, may be sent by electronic communication and shall be considered delivered upon successful completion of such transmission.
ARTICLE 11
FORCE MAJEURE
11.1 Definition.
(a) “Force Majeure Event” means any act or event that delays or prevents a Party from timely performing all or a portion of its obligations under this Agreement or from complying with all or a portion of the conditions under this Agreement if such act or event, despite the exercise of reasonable efforts, cannot be avoided by and is beyond the reasonable control 18 (whether direct or indirect) of and without the fault or negligence of the Party relying thereon as justification for such delay, nonperformance, or noncompliance. (b) Without limiting the generality of the foregoing, so long as the following events, despite the exercise of reasonable efforts, cannot be avoided by, and are beyond the reasonable control (whether direct or indirect) of and without the fault or negligence of the Party relying thereon as justification for such delay, nonperformance or noncompliance, a Force Majeure Event may include an act of God or the elements, such as flooding, lightning, hurricanes, tornadoes, or ice storms; explosion; fire; volcanic eruption; flood; epidemic; landslide; mudslide; sabotage; terrorism; earthquake; or other cataclysmic events; an act of public enemy; war; blockade; civil insurrection; riot; civil disturbance; or strikes or other labor difficulties caused or suffered by a Party or any third party except as set forth below. (c) Notwithstanding the foregoing, the term “Force Majeure Event” does not include (i) economic conditions that render a Party’s performance of this Agreement at the Contract Price unprofitable or otherwise uneconomic (including Buyer’s ability to buy Energy at a lower price than the Contract Price, Buyer’s inability economically to use or resell the Product purchased hereunder, or Seller’s ability to sell Energy at a higher price than the Contract Price); (ii) Seller’s inability to obtain permits or approvals of any type for the construction, operation, or maintenance of the System; (ii) the inability of a Party to make payments when due under this Agreement, unless the cause of such inability is an event that would otherwise constitute a Force Majeure Event as described above; (iv) Seller’s inability to obtain sufficient labor, equipment, materials, or other resources to build or operate the System; (v) a strike, work stoppage or labor dispute limited only to any one or more of Seller, Seller’s Affiliates, Seller’s contractors, their subcontractors thereof or any other third party employed by Seller to work on the System; or (vi) any equipment failure except if such equipment failure is caused by a Force Majeure Event.
11.2 No Liability If a Force Majeure Event Occurs . Neither Seller nor Buyer shall be liable to the other Party in the event it is prevented from performing its obligations hereunder in whole or in part due to a Force Majeure Event. The Party rendered unable to fulfill any obligation by reason of a Force Majeure Event shall take reasonable actions necessary to remove such inability with due speed and diligence. Nothing herein shall be construed as permitting that Party to continue to fail to perform after said cause has been removed. The obligation to use due speed and diligence shall not be interpreted to require resolution of labor disputes by acceding to demands of the opposition when such course is inadvisable in the discretion of the party having such difficulty. Neither Party shall be considered in breach or default of this Agreement if and to the extent that any failure or delay in the Party’s performance of one or more of its obligations hereunder is caused by a Force Majeure Event. The occurrence and continuation of a Force Majeure Event shall not suspend or excuse the obligation of a Party to make any payments due hereunder.
11.3 Notice. In the event of any delay or nonperformance resulting from a Force Majeure Event, the Party suffering the Force Majeure Event shall (a) as soon as practicable, notify the other Party in writing of the nature, cause, estimated date of commencement thereof, and the anticipated extent of any delay or interruption in performance, and (b) notify the other Party in writing of the cessation or termination of such Force Majeure Event, all as known or estimated in good faith by the affected Party; provided, however, that a Party’s failure to give timely Notice 19 shall not affect such Party’s ability to assert that a Force Majeure Event has occurred unless the delay in giving Notice materially prejudices the other Party.
11.4 Termination Following Force Majeure Event . If a Force Majeure Event has occurred that has caused either Party to be wholly or partially unable to perform its obligations hereunder, and has continued for a consecutive eight (8) month period, then the non-claiming Party may terminate this Agreement upon Notice to the other Party with respect to the System experiencing the Force Majeure Event. Upon any such termination, the non-claiming Party shall have no liability to the Force Majeure Event claiming Party, save and except for those obligations specified in Section 3.3.
ARTICLE 12
DEFAULTS; REMEDIES; TERMINATION
12.1 Events of Default. An “Event of Default” shall mean, (a) with respect to a Party (the “Defaulting Party”) that is subject to the Event of Default the occurrence of any of the following:
(i) the failure by such Party to make, when due, any payment required pursuant to this Agreement and such failure is not remedied within five (5) Business Days after Notice thereof;
(ii) any representation or warranty made by such Party herein is false or misleading in any material respect when made or when deemed made or repeated, and such default is not remedied within thirty (30) days after Notice thereof; (iii) the failure by such Party to perform any material covenant or obligation set forth in this Agreement (except to the extent constituting a separate Event of Default) and such failure is not remedied within thirty (30) days after Notice thereof; (iv) such Party becomes Bankrupt;
(v) such Party assigns this Agreement or any of its rights hereunder other than in compliance with Section 15.2; or
(vi) such Party consolidates or amalgamates with, or merges with or into, or transfers all or substantially all of its assets to, another entity and, at the time of such consolidation, amalgamation, merger or transfer, the resulting, surviving or transferee entity fails to assume all the obligations of such Party under this Agreement to which it or its predecessor was a party by operation of Law or pursuant to an agreement reasonably satisfactory to the other Party.
(vii) with respect to Seller as the Defaulting Party, if at any time, Seller delivers or attempts to deliver to a System Delivery Point for sale under this Agreement Energy that was not generated by the respective System. 20 12.2 Remedies; Declaration of Early Termination Date. If an Event of Default with respect to a Defaulting Party shall have occurred and be continuing, the other Party (“ Non- Defaulting Party”) shall have the right (a) to send Notice, designating a day, no earlier than the day such Notice is deemed to be received and no later than twenty (20) Business Days after such Notice is deemed to be received, as an early termination date (“ Early Termination Date”) of (i) the inclusion of a System under this Agreement and the respective System Delivery Term, if the Event of Default only relates to such System, or (ii) this Agreement, if the Event of Default relates to all Systems (in each case, (i) and (ii), the “ Terminated Transaction”), and either the System Delivery Term (in case of option (i)) or the Contract Term (in case of Option (ii) will terminate effective as of the Early Termination Date, and all amounts owing between the Parties shall accelerate (under option (a), however, only with respect to the terminated System), and the Non- Defaulting party may collect liquidated damages calculated in accordance with Section 12.3 (Termination Payment) below; (b) to withhold any payments due to the Defaulting Party under this Agreement (but under option (a)(i) only with respect to the terminated System); (c) to suspend performance (but under option (a)(i) only with respect to the terminated System); and (d) to exercise any other right or remedy available at law or in equity, including injunctive relief to the extent permitted under this Agreement, except to the extent such remedies are expressly limited under this Agreement
12.3 Termination Payment. The Termination Payment (“Termination Payment”) for a Terminated Transaction shall be the aggregate of all Settlement Amounts relating to such Terminated Transaction plus any or all other amounts due to the Non-Defaulting Party relating thereto netted into a single amount. If the Non-Defaulting Party’s aggregate Gains relating to a Terminated Transaction exceed its aggregate Losses and Costs related thereto, if any, resulting from the termination of this Agreement, the Termination Payment shall be zero. The Non- Defaulting Party shall calculate, in a commercially reasonable manner, a Settlement Amount for the Terminated Transaction as of the Early Termination Date. Third parties supplying information for purposes of the calculation of Gains or Losses may include, without limitation, dealers in the relevant markets, end-users of the relevant product, information vendors and other sources of market information. The Settlement Amount shall not include consequential, incidental, punitive, exemplary, indirect or business interruption damages, lost revenues or lost profits; provided, however, that any lost Green Attributes shall be deemed direct damages covered by this Agreement. Without prejudice to the Non-Defaulting Party’s duty to mitigate, the Non-Defaulting Party shall not have to enter into replacement transactions to establish a Settlement Amount. Each Party agrees and acknowledges that (a) the actual damages that the Non-Defaulting Party would incur in connection with a Terminated Transaction would be difficult or impossible to predict with certainty, (b) the Termination Payment described in this section is a reasonable and appropriate approximation of such damages, and (c) the Termination Payment described in this section is the exclusive remedy of the Non-Defaulting Party in connection with a Terminated Transaction but shall not otherwise act to limit any of the Non-Defaulting Party’s rights or remedies if the Non- Defaulting Party does not elect a Terminated Transaction as its remedy for an Event of Default by the Defaulting Party.
12.4 Notice of Payment of Termination Payment . As soon as practicable after a Terminated Transaction, Notice shall be given by the Non-Defaulting Party to the Defaulting Party of the amount of the Termination Payment and whether the Termination Payment is due to the Non-Defaulting Party. The Notice shall include a written statement explaining in reasonable detail 21 the calculation of such amount and the sources for such calculation. The Termination Payment shall be made to the Non-Defaulting Party, as applicable, within ten (10) Business Days after such Notice is effective.
12.5 Disputes With Respect to Termination Payment . If the Defaulting Party disputes the Non-Defaulting Party’s calculation of the Termination Payment, in whole or in part, the Defaulting Party shall, within five (5) Business Days of receipt of the Non-Defaulting Party’s calculation of the Termination Payment, provide to the Non-Defaulting Party a detailed written explanation of the basis for such dispute. Disputes regarding the Termination Payment shall be determined in accordance with Article 17.
12.6 Rights And Remedies Are Cumulative . Except where liquidated damages are provided as the exclusive remedy, the rights and remedies of a Party pursuant to this Article 12 shall be cumulative and in addition to the rights of the Parties otherwise provided in this Agreement.
12.7 Mitigation. Any Non-Defaulting Party shall be obligated to mitigate its Costs, losses and damages resulting from any Event of Default of the other Party under this Agreement.
ARTICLE 13
LIMITATION OF LIABILITY AND EXCLUSION OF WARRANTIES.
13.1 No Consequential Damages . EXCEPT TO THE EXTENT PART OF AN
EXPRESS REMEDY OR MEASURE OF DAMAGES HEREIN, NEITHER PARTY SHALL BE
LIABLE TO THE OTHER OR ITS INDEMNIFIED PERSONS FOR ANY SPECIAL,
PUNITIVE, EXEMPLARY, INDIRECT, INCIDENTAL, OR CONSEQUENTIAL DAMAGES,
OR LOSSES OR DAMAGES FOR LOST REVENUE, BUSINESS INTERRUPTION OR LOST
PROFITS, WHETHER FORESEEABLE OR NOT, ARISING OUT OF, OR IN CONNECTION
WITH THIS AGREEMENT, BY STATUTE, IN TORT OR CONTRACT, UNDER ANY INDEMNITY PROVISION OR OTHERWISE.
13.2 Waiver and Exclusion of Other Damages . THE PARTIES CONFIRM THAT
THE EXPRESS REMEDIES AND MEASURES OF DAMAGES PROVIDED IN THIS AGREEMENT SATISFY THE ESSENTIAL PURPOSES HEREOF. ALL LIMITATIONS OF
LIABILITY CONTAINED IN THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, THOSE PERTAINING TO SELLER’S LIMITATION OF LIABILITY AND THE WAIVER OF
CONSEQUENTIAL DAMAGES, SHALL APPLY EVEN IF THE REMEDIES FOR BREACH OF WARRANTY PROVIDED IN THIS AGREEMENT ARE DEEMED TO “FAIL OF THEIR ESSENTIAL PURPOSE” OR ARE OTHERWISE HELD TO BE INVALID OR UNENFORCEABLE.
FOR BREACH OF ANY PROVISION FOR WHICH AN EXPRESS AND EXCLUSIVE
REMEDY OR MEASURE OF DAMAGES IS PROVIDED, SUCH EXPRESS REMEDY OR
MEASURE OF DAMAGES SHALL BE THE SOLE AND EXCLUSIVE REMEDY, THE OBLIGOR’S LIABILITY SHALL BE LIMITED AS SET FORTH IN SUCH PROVISION, AND ALL OTHER REMEDIES OR DAMAGES AT LAW OR IN EQUITY ARE WAIVED. 22 IF NO REMEDY OR MEASURE OF DAMAGES IS EXPRESSLY PROVIDED HEREIN, THE OBLIGOR’S LIABILITY SHALL BE LIMITED TO DIRECT DAMAGES ONLY. THE
VALUE OF ANY TAX BENEFITS, DETERMINED ON AN AFTER-TAX BASIS, LOST DUE TO BUYER’S DEFAULT (WHICH SELLER HAS NOT BEEN ABLE TO MITIGATE AFTER
USE OF REASONABLE EFFORTS) AND AMOUNTS DUE IN CONNECTION WITH THE
RECAPTURE OF ANY RENEWABLE ENERGY INCENTIVES, IF ANY, SHALL BE DEEMED TO BE DIRECT DAMAGES.
TO THE EXTENT ANY DAMAGES REQUIRED TO BE PAID HEREUNDER ARE
LIQUIDATED, THE PARTIES ACKNOWLEDGE THAT THE DAMAGES ARE DIFFICULT
OR IMPOSSIBLE TO DETERMINE, THAT OTHERWISE OBTAINING AN ADEQUATE
REMEDY IS INCONVENIENT, AND THAT THE LIQUIDATED DAMAGES CONSTITUTE A REASONABLE APPROXIMATION OF THE ANTICIPATED HARM OR LOSS. IT IS THE
INTENT OF THE PARTIES THAT THE LIMITATIONS HEREIN IMPOSED ON REMEDIES
AND THE MEASURE OF DAMAGES BE WITHOUT REGARD TO THE CAUSE OR
CAUSES RELATED THERETO, INCLUDING THE NEGLIGENCE OF ANY PARTY,
WHETHER SUCH NEGLIGENCE BE SOLE, JOINT OR CONCURRENT, OR ACTIVE OR PASSIVE. THE PARTIES HEREBY WAIVE ANY RIGHT TO CONTEXT SUCH PAYMENTS AS AN UNREASONABLE PENALTY.
THE PARTIES ACKNOWLEDGE AND AGREE THAT MONEY DAMAGES AND THE
EXPRESS REMEDIES PROVIDED FOR HEREIN ARE AN ADEQUATE REMEDY FOR THE
BREACH BY THE OTHER OF THE TERMS OF THIS AGREEMENT, AND EACH PARTY
WAIVES ANY RIGHT IT MAY HAVE TO SPECIFIC PERFORMANCE WITH RESPECT TO ANY OBLIGATION OF THE OTHER PARTY UNDER THIS AGREEMENT.
ARTICLE 14
REPRESENTATIONS AND WARRANTIES; AUTHORITY
14.1 Seller’s Representations and Warranties . As of the Effective Date, Seller represents and warrants as follows:
(a) Seller is a limited liability company, duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, and is qualified to conduct business in each jurisdiction where the failure to so qualify would have a material adverse effect on the business or financial condition of Seller. (b) Seller has the power and authority to enter into and perform this Agreement and is not prohibited from entering into this Agreement or discharging and performing all covenants and obligations on its part to be performed under and pursuant to this Agreement, except where such failure does not have a material adverse effect on Seller’s performance under this Agreement. The execution, delivery and performance of this Agreement by Seller has been duly authorized by all necessary corporate action on the part of Seller and does not and will not require the consent of any trustee or holder of any indebtedness or other obligation of Seller or any other party to any other agreement with Seller.
23 (c) The execution and delivery of this Agreement, consummation of the transactions contemplated herein, and fulfillment of and compliance by Seller with the provisions of this Agreement will not conflict with or constitute a breach of or a default under any Law presently in effect having applicability to Seller, subject to any permits that have not yet been obtained by Seller, the documents of formation of Seller or any outstanding trust indenture, deed of trust, mortgage, loan agreement or other evidence of indebtedness or any other agreement or instrument to which Seller is a party or by which any of its property is bound. (d) This Agreement has been duly executed and delivered by Seller. This Agreement is a legal, valid and binding obligation of Seller enforceable in accordance with its terms, except as limited by laws of general applicability limiting the enforcement of creditors’ rights or by the exercise of judicial discretion in accordance with general principles of equity.
14.2 Buyer’s Effective Date Representations and Warranties . As of the Effective Date, Buyer represents and warrants as follows:
(a) Buyer is a validly existing community choice aggregator, duly organized, validly existing and in good standing under the laws of the State of California and the rules, regulations and orders of the California Public Utilities Commission. (b) Buyer has the power and authority to enter into and perform this Agreement and is not prohibited from entering into this Agreement or discharging and performing all covenants and obligations on its part to be performed under and pursuant to this Agreement, except where such failure does not have a material adverse effect on Buyer’s performance under this Agreement. The execution, delivery and performance of this Agreement by Buyer has been duly authorized by all necessary action on the part of Buyer and does not and will not require the consent of any trustee or holder of any indebtedness or other obligation of Buyer or any other party to any other agreement with Buyer.
(c) The execution and delivery of this Agreement, consummation of the transactions contemplated herein, and fulfillment of and compliance by Buyer with the provisions of this Agreement will not conflict with or constitute a breach of or a default under any Law presently in effect having applicability to Buyer, including but not limited to community choice aggregation, competitive bidding, public notice, open meetings, election, referendum, or prior appropriation requirements, the documents of formation of Buyer or any outstanding trust indenture, deed of trust, mortgage, loan agreement or other evidence of indebtedness or any other agreement or instrument to which Buyer is a party or by which any of its property is bound. (d) This Agreement has been duly executed and delivered by Buyer. This Agreement is a legal, valid and binding obligation of Buyer enforceable in accordance with its terms, except as limited by laws of general applicability limiting the enforcement of creditors’ rights or by the exercise of judicial discretion in accordance with general principles of equity. (e) Buyer warrants and covenants that with respect to its contractual obligations under this Agreement, it will not claim immunity on the grounds of sovereignty or similar grounds with respect to itself or its revenues or assets from (1) suit, (2) jurisdiction of court, (3) relief by 24 way of injunction, order for specific performance or recovery of property, (4) attachment of assets, or (5) execution or enforcement of any judgment.
14.3 General Covenants. Each Party covenants that commencing on the Effective Date and continuing throughout the Contract Term:
(a) It shall continue to be duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation and to be qualified to conduct business in each jurisdiction where the failure to so qualify would have a material adverse effect on its business or financial condition;
(b) It shall maintain (or obtain from time to time as required) all regulatory authorizations necessary for it to legally perform its obligations under this Agreement; and (c) It shall perform its obligations under this Agreement in compliance with all terms and conditions in its governing documents and any contracts to which it is a party and in material compliance with any Law.
ARTICLE 15
ASSIGNMENT
15.1 General Prohibition on Assignments . Except as provided below and in Article 15, neither Seller nor Buyer may voluntarily assign its rights nor delegate its duties under this Agreement, or any part of such rights or duties, without the written consent of the other Party.
Neither Seller nor Buyer shall unreasonably withhold, condition or delay any requested consent to an assignment that is allowed by the terms of this Agreement. Any such assignment or delegation made without such written consent or in violation of the conditions to assignment set out below shall be null and void.
15.2 Permitted Assignment; Change of Control of Seller . Seller may, without the prior written consent of Buyer, transfer or assign this Agreement to: (a) an Affiliate of Seller; (b) any Person succeeding to all or substantially all of the assets of Seller (whether voluntary or by operation of law); or (c) subject to Section 16.1, a Lender as collateral, provided however, that in each of the foregoing situations, the assignee shall be a Qualified Assignee; provided, further, that in each such case, Seller shall give Notice to Buyer no fewer than fifteen (15) Business Days before such assignment that (i) notifies Buyer of such assignment and (ii) provides to Buyer a written agreement signed by the Person to which Seller wishes to assign its interests which (y) provides that such Person will assume all of Seller’s obligations and liabilities under this Agreement upon such transfer or assignment and (z) certifies that such Person shall meet the definition of a Qualified Assignee. In the event that Buyer, in good faith, does not agree that Seller’s assignee meets the definition of a Qualified Assignee, then either Seller must agree to remain financially responsible under this Agreement, or Seller’s assignee must provide payment security in an amount and form reasonably acceptable to Buyer. Any direct or indirect change of control of Seller (whether voluntary or by operation of Law) shall be deemed an assignment under this Section 15.2. Any assignment by Seller, its successors or assigns under this Section 15.2 shall be of no force and effect unless and until such Notice and agreement by the assignee have been received by Buyer.
25 15.3 Change of Control of Buyer. Buyer may assign its interests in this Agreement to an Affiliate of Buyer or to any entity that has acquired all or substantially all of Buyer’s assets or business, whether by merger, acquisition or otherwise without Seller’s prior written consent, provided that no fewer than fifteen (15) Business Days before such assignment Buyer (a) notifies Seller of such assignment and (b) provides to Seller a written agreement signed by the Person to which Buyer wishes to assign its interests stating that (i) such Person agrees to assume all of Buyer’s obligations and liabilities under this Agreement and under any consent to assignment and other documents previously entered into by Seller as described in Section 16.2(b) and (ii) such Person has the financial capability to perform all of Buyer’s obligations under this Agreement. In the event that Seller, in good faith, does not agree that Buyer’s assignee has the financial capability to perform all of Buyer’s obligations under this Agreement, then either Buyer must agree to remain financially responsible under this Agreement, or Buyer’s assignee must provide payment security in an amount and form reasonably acceptable to Seller. Any assignment by Buyer, its successors or assigns under this Section 15.3 shall be of no force and effect unless and until such Notice and agreement by the assignee have been received by Seller.
ARTICLE 16
LENDER ACCOMMODATIONS
16.1 Granting of Lender Interest . Notwithstanding Section 15.2 or Section 15.3, either Party may, without the consent of the other Party, grant an interest (by way of collateral assignment, or as security, beneficially or otherwise) in its rights and/or obligations under this Agreement to any Lender. Each Party’s obligations under this Agreement shall continue in their entirety in full force and effect. Promptly after granting such interest, the granting Party shall notify the Buyer in writing of the name, address, and telephone and facsimile numbers of any Lender to which the granting Party’s interest under this Agreement has been assigned. Such Notice shall include the names of the Lenders to whom all written and telephonic communications may be addressed. After giving the other Party such initial Notice, the granting Party shall promptly give the other Party Notice of any change in the information provided in the initial Notice or any revised Notice.
16.2 Rights of Lender. If a Party grants an interest under this Agreement as permitted by Section 16.1, the following provisions shall apply:
(a) Lender shall have the right, but not the obligation, to perform any act required to be performed by the granting Party under this Agreement to prevent or cure a default by the granting Party in accordance with Section 12.2, and such act performed by Lender shall be as effective to prevent or cure a default as if done by the granting Party. (b) The other Party shall cooperate with the granting Party or any Lender, to execute or arrange for the delivery of certificates, consents, opinions, estoppels, amendments and other documents reasonably requested by the granting Party or Lender in order to consummate any financing or refinancing and shall enter into reasonable agreements with such Lender that provide that Buyer recognizes the Lender’s security interest and such other provisions as may be reasonably requested by Seller or any such Lender; provided, however, that all costs and expenses (including reasonable attorney’s fees) incurred by Buyer in connection therewith shall be borne by Seller.
26 (c) Each Party agrees that no Lender shall be obligated to perform any obligation or be deemed to incur any liability or obligation provided in this Agreement on the part of the granting Party or shall have any obligation or liability to the other Party with respect to this Agreement except to the extent any Lender has expressly assumed the obligations of the granting Party hereunder; provided that non-granting Party shall nevertheless be entitled to exercise all of its rights hereunder in the event that the granting Party or Lender fails to perform the granting Party’s obligations under this Agreement.
16.3 Cure Rights of Lender . The non-granting Party shall provide Notice of the occurrence of any Event of Default described in Section 12.1 or 12.2 hereof to any Lender, and such Party shall accept a cure performed by any Lender and shall negotiate in good faith with any Lender as to the cure period(s) that will be allowed for any Lender to cure any granting Party Event of Default hereunder. The non-granting Party shall accept a cure performed by any Lender so long as the cure is accomplished within the applicable cure period so agreed to between the non-granting Party and any Lender. Notwithstanding any such action by any Lender, the granting Party shall not be released and discharged from and shall remain liable for any and all obligations to the non- granting Party arising or accruing hereunder.
ARTICLE 17
DISPUTE RESOLUTION
17.1 Governing Law. This agreement and the rights and duties of the Parties hereunder shall be governed by and construed, enforced and performed in accordance with the laws of the state of California, without regard to principles of conflicts of law. Venue shall be Riverside County, California.
17.2 Dispute Resolution . In the event of any dispute arising under this Agreement, within ten (10) days following the receipt of a Notice from either Party identifying such dispute, the Parties shall meet, negotiate and attempt, in good faith, to resolve the dispute quickly, informally and inexpensively. If the Parties are unable to resolve a dispute arising hereunder within the earlier of either thirty (30) days of initiating such discussions, or within forty (40) days after Notice of the dispute, either Party may seek any and all remedies available to it at law or in equity, subject to the limitations set forth in this Agreement.
ARTICLE 18
INDEMNIFICATION
18.1 Indemnification.
(a) To the extent permitted by Law, each Party (the “ Indemnifying Party”) agrees to indemnify, defend and hold harmless the other Party and its Affiliates, directors, officers, employees and agents (collectively, the “ Indemnified Party ”) from and against all claims, demands, losses, liabilities, penalties, and expenses (including reasonable attorneys’ fees) for personal injury or death to Persons and damage to the property of any third party to the extent arising out of, resulting from, or caused by the negligent or willful misconduct of the Indemnifying Party, its Affiliates, its directors, officers, employees, or agents in the performance of this Agreement or relating to the Systems.
27 (b) Nothing in this Section 18.1 shall enlarge or relieve Seller or Buyer of any liability to the other for any breach of this Agreement. Neither Party shall be indemnified for its damages resulting from its sole negligence, intentional acts or willful misconduct. These indemnity provisions shall not be construed to relieve any insurer of its obligation to pay claims consistent with the provisions of a valid insurance policy.
18.2 Claims. Promptly after receipt by a Party of any claim or notice of the commencement of any action, administrative, or legal proceeding, or investigation as to which the indemnity provided for in this Article 18 may apply, the Indemnified Party shall notify the Indemnifying Party in writing of such fact. The Indemnifying Party shall assume the defense thereof with counsel designated by such Party and satisfactory to the Indemnified Party, provided, however, that if the defendants in any such action include both the Indemnified Party and the Indemnifying Party and the Indemnified Party shall have reasonably concluded that there may be legal defenses available to it which are different from or additional to, or inconsistent with, those available to the Indemnifying Party, the Indemnified Party shall have the right to select and be represented by separate counsel, at the Indemnifying Party’s expense, unless a liability insurer is willing to pay such costs. If the Indemnifying Party fails to assume the defense of a claim meriting indemnification, the Indemnified Party may at the expense of the Indemnifying Party contest, settle, or pay such claim, provided that settlement or full payment of any such claim may be made only following consent of the Indemnifying Party or, absent such consent, written opinion of the Indemnified Party’s counsel that such claim is meritorious or warrants settlement. Except as otherwise provided in this Article 18, in the event that a Party is obligated to indemnify and hold the other Party and its successors and assigns harmless under this Article 18, the amount owing to the Indemnified Party will be the amount of the Indemnified Party’s damages net of any insurance proceeds received by the Indemnified Party following a reasonable effort by the Indemnified Party to obtain such insurance proceeds.
ARTICLE 19
INSURANCE
19.1 Insurance.
(a) General Liability. Seller shall maintain, or cause to be maintained at its sole expense, (i) commercial general liability insurance, including products and completed operations and personal injury insurance, in a minimum amount of one million dollars ($1,000,000) per occurrence, and an annual aggregate of not less than two million dollars ($2,000,000), endorsed to provide contractual liability in said amount, specifically covering Seller’s obligations under this Agreement and naming Buyer as an additional insured; and (ii) an umbrella insurance policy in a minimum limit of liability of five million dollars ($5,000,000). Defense costs shall be provided as an additional benefit and not included within the limits of liability. Such insurance shall contain standard cross-liability and severability of interest provisions. (b) Employer’s Liability Insurance. Seller shall maintain, or cause to be maintained at its sole expense, Employers’ Liability insurance in an amount not less than one million dollars ($1,000,000.00) for injury or death occurring as a result of each accident. With regard to bodily injury by disease, the one million-dollar ($1,000,000) policy limit will apply to each employee.
28 (c) Workers Compensation Insurance. Seller, if it has employees, shall also maintain at all times during the Contract Term workers’ compensation and employers’ liability insurance coverage in accordance with applicable requirements of Law. (d) Business Auto Insurance. Seller shall maintain at all times during the Contract Term business auto insurance for bodily injury and property damage with limits of one million dollars ($1,000,000) per occurrence. Such insurance shall cover liability arising out of Seller’s use of all owned (if any), non-owned and hired vehicles, including trailers or semi-trailers in the performance of the Agreement.
(e) Construction All-Risk Insurance. Seller shall maintain or cause to be maintained during the construction of the System prior to the Commercial Operation Date, construction all-risk form property insurance covering the System during such construction periods, and naming the Seller (and Lender if any) as the loss payee. (f) Subcontractor Insurance. Seller shall require all of its subcontractors to carry: (i) comprehensive general liability insurance with a combined single limit of coverage not less than one million dollars ($1,000,000); (ii) workers’ compensation insurance and employers’ liability coverage in accordance with applicable requirements of Law; and (iii) business auto insurance for bodily injury and property damage with limits of one million dollars ($1,000,000) per occurrence. All subcontractors shall name Seller as an additional insured to insurance carried pursuant to clauses (f)(i) and (f)(iii). All subcontractors shall provide a primary endorsement and a waiver of subrogation to Seller for the required coverage pursuant to this Section 19.1(f). (g) Evidence of Insurance. Seller shall deliver to Buyer certificates of insurance evidencing such coverage prior to the execution of the agreement. These certificates shall specify that Buyer shall be given at least thirty (30) days prior Notice by Seller in the event of any material modification, cancellation or termination of coverage. Such insurance shall be primary coverage without right of contribution from any insurance of Buyer. Any other insurance maintained by Seller is for the exclusive benefit of Seller and shall not in any manner inure to the benefit of Buyer. Seller shall also comply with all insurance requirements by any renewable energy or other incentive program administrator or any other applicable authority. (h) Failure to Comply with Insurance Requirements. If Seller fails to comply with any of the provisions of this Article 19, Seller, among other things and without restricting Buyer’s remedies under the law or otherwise, shall, at its own cost and expense, act as an insurer and provide insurance in accordance with the terms and conditions above. With respect to the required general liability, umbrella liability and commercial automobile liability insurance, Seller shall provide a current, full and complete defense to Buyer, its subsidiaries and affiliates, and their respective officers, directors, shareholders, agents, employees, assigns, and successors in interest, in response to a third-party claim in the same manner that an insurer would have, had the insurance been maintained in accordance with the terms and conditions set forth above. In addition, alleged violations of the provisions of this Article 19 means that Seller has the initial burden of proof regarding any legal justification for refusing or withholding coverage and Seller shall face the same liability and damages as an insurer for wrongfully refusing or withholding coverage in accordance with the laws of California.
29 ARTICLE 20
CONFIDENTIAL INFORMATION
20.1 Definition of Confidential Information. The following constitutes “Confidential Information,” whether oral or written which is delivered by Seller to Buyer or by Buyer to Seller including: (a) proposals and negotiations until this Agreement is approved and executed by the Buyer, and (b) information that either Seller or Buyer stamps or otherwise identifies as “confidential” or “proprietary” before disclosing it to the other. Confidential Information does not include (i) information that was publicly available at the time of the disclosure, other than as a result of a disclosure in breach of this Agreement; (ii) information that becomes publicly available through no fault of the recipient after the time of the delivery; (iii) information that was rightfully in the possession of the recipient (without confidential or proprietary restriction) at the time of delivery or that becomes available to the recipient from a source not subject to any restriction against disclosing such information to the recipient; and (iv) information that the recipient independently developed without a violation of this Agreement.
20.2 Duty to Maintain Confidentiality . Confidential Information will retain its character as Confidential Information but may be disclosed by the recipient if and to the extent such disclosure is required (a) to be made by any requirements of Law, including but not limited to the California Public Records Act (Government Code Section 6250 et seq.) and the Brown Act (Government Code Section 54950 et seq.), (b) pursuant to an order of a court or (c) in order to enforce this Agreement. The originator or generator of Confidential Information may use such information for its own uses and purposes, including the public disclosure of such information at its own discretion.
20.3 Irreparable Injury; Remedies . Buyer and Seller each agree that disclosing Confidential Information of the other in violation of the terms of this Article 20 may cause irreparable harm, and that the harmed Party may seek any and all remedies available to it at law or in equity, including injunctive relief and/or notwithstanding Section 13.2, consequential damages.
20.4 Disclosure to Lender. Notwithstanding anything to the contrary in this Article 20, Confidential Information may be disclosed by Seller to any potential Lender or any of its agents, consultants or trustees so long as the Person to whom Confidential Information is disclosed agrees in writing to be bound by the confidentiality provisions of this Article 20 to the same extent as if it were a Party.
ARTICLE 21
MISCELLANEOUS
21.1 Entire Agreement; Integration; Exhibits . This Agreement, together with Exhibits attached hereto constitutes the entire agreement and understanding between Seller and Buyer with respect to the subject matter hereof and supersedes all prior agreements relating to the subject matter hereof, which are of no further force or effect. The Exhibits attached hereto are integral parts hereof and are made a part of this Agreement by reference. The headings used herein are for convenience and reference purposes only. In the event of a conflict between the provisions of this Agreement and those of any Exhibit, the provisions of this Agreement shall prevail, and such Exhibit shall be corrected accordingly. This Agreement shall be considered for all purposes 30 as prepared through the joint efforts of the Parties and shall not be construed against one Party or the other as a result of the preparation, substitution, submission or other event of negotiation, drafting or execution hereof.
21.2 Amendments. This Agreement may only be amended, modified or supplemented by an instrument in writing executed by duly authorized representatives of Seller and Buyer; provided, that, for the avoidance of doubt, this Agreement may not be amended by electronic mail communications.
21.3 No Waiver . Waiver by a Party of any default by the other Party shall not be construed as a waiver of any other default.
21.4 No Agency, Partnership, Joint Venture or Lease . Seller and the agents and employees of Seller shall, in the performance of this Agreement, act in an independent capacity and not as officers or employees or agents of Buyer. Under this Agreement, Seller and Buyer intend to act as energy service provider and energy service recipient, respectively, and do not intend to be treated as, and shall not act as, partners in, co-venturers in or lessor/lessee with respect to the System or any business related to the System. This Agreement shall not impart any rights enforceable by any third party (other than a permitted successor or assignee bound to this Agreement).
21.5 Severability. In the event that any provision of this Agreement is unenforceable or held to be unenforceable, the Parties agree that all other provisions of this Agreement have force and effect and shall not be affected thereby. The Parties shall, however, use their best endeavors to agree on the replacement of the void, illegal or unenforceable provision(s) with legally acceptable clauses which correspond as closely as possible to the sense and purpose of the affected provision and this Agreement as a whole.
21.6 Forward Contract. The Parties acknowledge and agree that this Agreement and the transactions contemplated by this Agreement constitute a “forward contract” within the meaning of the Bankruptcy Code and that Buyer and Seller are each “forward contract merchants” within the meaning of the Bankruptcy Code
21.7 Mobile-Sierra. Notwithstanding any other provision of this Agreement, neither Party shall seek, nor shall they support any third party seeking, to prospectively or retroactively revise the rates, terms or conditions of service of this Agreement through application or complaint to FERC pursuant to the provisions of Section 205, 206 or 306 of the Federal Power Act, or any other provisions of the Federal Power Act, absent prior written agreement of the Parties. Further, absent the prior written agreement in writing by both Parties, the standard of review for changes to the rates, terms or conditions of service of this Agreement proposed by a Party, a non-Party or the FERC acting sua sponte shall be the “public interest” standard of review set forth in United Gas Pipe Line Co. v. Mobile Gas Service Corp., 350 U.S. 332 (1956) and Federal Power Commission v. Sierra Pacific Power Co., 350 U.S. 348 (1956).
21.8 Counterparts. This Agreement may be executed in one or more counterparts, all of which taken together shall constitute one and the same instrument and each of which shall be deemed an original.
31 21.9 Facsimile or Electronic Delivery . This Agreement may be duly executed and delivered by a Party by execution and facsimile or electronic format (including portable document format (.pdf)) delivery of the signature page of a counterpart to the other Party, and, if delivery is made by facsimile or other electronic format, the executing Party shall promptly deliver, via overnight delivery, a complete original counterpart that it has executed to the other Party, but this Agreement shall be binding on and enforceable against the executing Party whether or not it delivers such original counterpart.
21.10 Binding Effect. This Agreement shall inure to the benefit of and be binding upon the Parties and their respective successors and permitted assigns. [remainder of this page intentionally left blank]
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their duly authorized representatives as of the Effective Date.
SELLER
Participate.Energy LLC
a Delaware limited liability company
By:
Name:
Title:
BUYER
CITY OF PALMDALE, A CALIFORNIA
MUNICIPAL CORPORATION, D/B/A
ENERGY FOR PALMDALE'S
INDEPENDENT CHOICE
By:
Name:
Title: _____________________
A-1
EXHIBIT A
INCLUDED SYSTEMS LIST
SYSTEM
NAME
or
ID
SYSTEM
SITE
ADDRESS or
LOCATION
SYSTEM
SYSTEM
SIZE
(kWAC)
ESTIMATED
FIRST YEAR
ANNUAL
PRODUCTION
(kWh)
FIRST YEAR
ENERGY
RATE
ENERGY
STORAGE
(No. of Tesla
Powerwall Units)
B-1
EXHIBIT B
NOTICES
Seller:
Participate.Energy LLC
2093 Philadelphia Pike #3125,
Claymont, DE 19703.
Attn: Ethan Friedman
Phone: 917-301-2621
Email: [email protected]
Buyer:
Energy for Palmdale's Independent Choice
38300 Sierra Highway
Palmdale, CA 93550
Attn: Contract Administration
Email: [email protected]
With a copy to: With a copy to:
Name:
Attorney for Buyer
Address:
Phone:
Facsimile:
Email:
Scheduling:
Participate.Energy LLC
2093 Philadelphia Pike #3125,
Claymont, DE 19703.
Attn: Ethan Friedman
Phone: 917-301-2621
Email: [email protected]
C-1
EXHIBIT C
EMERGENCY CONTACT INFORMATION
BUYER:
Ronda Perez
38300 Sierra Highway
Palmdale, CA 93550
Email: [email protected]
WITH COPY TO:
Cathy DeFalco, Energy Manager - Regulatory
California Choice Energy Authority (“CalChoice”)
Phone: 805-260-9047
Email: [email protected]
SELLER:
Participate.Energy LLC
2093 Philadelphia Pike #3125,
Claymont, DE 19703.
Attn: Ethan Friedman
Phone: 917-301-2621
Email: [email protected]
PROGRAM MANAGEMENT AGREEMENT
This Program Management Agreement (this “Agreement”) dated effective as of [February 1, 2023], (the “Effective Date”) is by and between CITY OF PALMDALE, A CALIFORNIA
MUNICIPAL CORPORATION, D/B/A ENERGY FOR PALMDALE'S INDEPENDENT CHOICE (“Program Manager ”), and Participate.Energy LLC , a Delaware limited liability company (the “ Owner”). The parties hereto are sometimes herein referred to individually as a “Party” and collectively as the “Parties”.
RECITALS
A. Program Manager, Owner and Tesla, Inc. ( “Installer”) have entered into certain agreements for the creation of a distributed solar and energy storage program for residential electricity customers in Program Manager’s service territory (the “Program”). Under the terms of the Program, Owner will develop, finance, and own residential solar and energy storage systems to be located at private residences within Program Manager’s service territory (each a “System” or, collectively, the “Systems”), Installer will install the Systems under an installation contract between Installer and Owner ( “Installation Contract” ), and Program Manager will buy from Owner the energy and certain energy attributes and benefits generated by each System under the terms of a certain power purchase agreement between the Parties of even date herewith (the “Power Purchase Agreement”).
B. Owner does not independently maintain the internal capability to perform the Program Management Services (as defined below) that Owner requires in connection with the installation of the Systems, and Program Manager’s capabilities are expected to provide significant benefits to Owner. Therefore, Owner desires to engage Program Manager to manage certain aspects of the System permit management, Installer communication, and origination of potential customers in Program Manager’s service territory, all as further set forth herein (the “Program Management Services”).
C. In consideration of the mutual covenants and agreements herein contained, and for other good and valuable consideration, the sufficiency and adequacy of which are hereby acknowledged, the Parties agree to the following:
AGREEMENT
In consideration of the above recitals, the premises and mutual covenants set forth herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, hereby agree as follows:
1. Appointment and Term; Assumption of Development Responsibilities; Standard of Performance . Owner hereby appoints Program Manager to render the Program Management Services as further described in the Schedule of Program Management Services attached hereto as Exhibit A. Program Manager hereby accepts such appointment. The term of this Agreement shall be co-terminus with the term of the Power Purchase Agreement ( “Term”).
Program Manager shall use such diligence, care and prudence in the performance of its obligations 2 hereunder as are commercially reasonable, and shall devote such time, effort and skills of its personnel as a reasonable service Program Manager in like position would do in like circumstances.
2. Limitations and Restrictions. Notwithstanding any provisions of this Agreement, Program Manager shall not take any action, expend any sum, make any decision, give any consent, approval or authorization, or incur any obligation with respect to any of the following matters unless and until the same has been approved by Owner:
(a) alteration of any System contemplated by the Installation Contract, except for such matters as may be expressly delegated in writing to Program Manager by Owner; (b) any proposed change in the installation of a System, or in the plans and specifications therefor as previously approved by Owner, that increases the cost thereof, or any other change that would affect the design, cost, value or quality of any of a System, except for such matters as may be expressly delegated in writing to Program Manager by Owner.
3. Standard of Conduct.
a) Program Manager shall provide the Program Management Services, perform its other obligations and exercise its rights or powers under this Agreement in a prudent manner, with the degree of skill and judgment normally exercised by Program Managers performing Program Management Services for the permitting of systems of a similar nature, and in accordance with: (i) any applicable laws and regulations; and (ii) any agreement, instrument or other document to which Owner is a party, and that Owner has delivered to Program Manager, that relates to a System or any component thereof (“Project Documents”), except to the extent Owner provides Program Manager with written instructions not to do so in the event Owner is contesting in good faith the validity or application of any such applicable laws and regulations or such term and condition of a System Document, in any reasonable manner. b) Program Manager may, at any time, if it reasonably considers it to be necessary or appropriate, request written instruction from Owner with respect to any matter contemplated by this Agreement and may defer action thereon pending the receipt of such written instructions.
c) Program Manager shall advise Owner promptly, if it becomes aware of any material inconsistency between any of the following:
(i) Owner’s instructions given in accordance with this Agreement from time to time;
(ii) any System Document;
(iii) Required insurance (if any); and
(iv) any applicable laws and regulations or Permit.
3 d) Any action taken by Program Manager in accordance with the written instructions of Owner, or failure to act pending the receipt of such written instructions, shall be deemed to be within the scope of Program Manager’s authority and in accordance with its obligations under this Agreement and, without limitation, shall not constitute gross negligence or willful misconduct as referred in Section 10(b).
4. Accounts and Records.
(a) Program Manager, shall keep such books of account and other records relating to each System as may be required by applicable laws and regulations or as reasonably requested by Owner in writing. All accounts and records relating to a System, including all correspondence, shall be surrendered to Owner upon demand without charge therefor. (b) All books and records prepared or maintained by Program Manager shall be kept and maintained at all times at secure locations accessible to Owner for audit, inspection and copying by Owner or any representative or auditor therefor or supervisory or regulatory authority upon reasonable written request.
(c) During the Term, Program Manager shall keep Owner reasonably informed as to the status of the Program Management Services provided by Program Manager. Program Manager shall notify Owner in writing of any material event related to the Program Management Services provided by Program Manager hereunder.
5. Accrual Schedule. The Program Management Agreement Fee (as defined below) shall be earned in full for a System when a System is placed in service for purposes of Sections 48 and 168 of the Internal Revenue Code, as amended, and shall be paid promptly when a System has reached final completion under the terms of the respective Installation Contract (collectively, “Final Completion”).
6. Compensation. As consideration for Program Manager’s Program Management Services to be performed under this Agreement, Owner will pay Program Manager a fee (the “Program Management Agreement Fee”) equal to Forty U.S. Cents ($0.40) multiplied by each Watt/dc of solar generating capacity for each System that has reached Final Completion and for which Program Manager has confirmed in a legally binding manner that such System will be covered under the Power Purchase Agreement for the term thereof. 4 7. Default and Remedies. If Program Manager defaults in the performance of any of its material covenants or obligations under this Agreement and such default continues unremedied for a period of 30 days after written notice thereof from Owner to Program Manager, Owner shall have the right, at its election, to exercise one or more of the following rights and remedies; provided, however, if the default is of such a nature that it cannot be cured within the 30-day period, and Program Manager has begun to cure each default within the 30-day period, Program Manager shall have an additional 60 days in which to cure said default provided it acts in good faith and with due diligence to cure the same (all of which shall be cumulative); provided, further, however, that a default under any agreement with a contractor, subcontractor, engineer or equipment Program Manager for a System, or a delay due to action or inaction by the utility shall not be deemed a default under the Agreement:
(a) terminate this Agreement; and
(b) enforce the provisions of this Agreement by legal proceedings for the specific performance of any covenant or agreement contained herein or for the enforcement of any other appropriate legal or equitable remedy and recover damages caused by any breach by Program Manager of the provisions of this Agreement, including court costs, reasonable attorneys’ fees and other expenses incurred in the enforcement of the obligations of Program Manager hereunder; and (c) exercise any and all rights and remedies that Owner (or its Members) may have under applicable laws and regulations; and
(d) in addition to any rights now or hereafter granted under applicable laws and regulations and not by way of limitation of any such rights, upon the occurrence of any event of default hereunder that is not cured within the time period specified in this Section 7, Owner is authorized to set off and to apply any amounts payable to Program Manager hereunder against and on account of the obligations of Program Manager to Owner hereunder.
8. Indemnity and Liability
(a) Limitation of Liability.
(i) Notwithstanding any provision in this Agreement to the contrary, neither Party, nor their respective Affiliates, nor any of their respective officers, directors, employees, agents, contractors, subcontractors, vendors, shareholders, members, partners or representatives, shall be liable hereunder for any consequential or indirect loss or damage, including loss of profit, cost of capital, loss of goodwill or any other special or incidental damages, it being understood that the Parties’ indemnification obligations under this Section 8 are not and shall not be deemed to be consequential or indirect loss or damage under this Section 8. (ii) Except as provided in this Section 8, Program Manager shall have no liability hereunder to Owner for damages or other amounts in connection with a breach by Program Manager of this Agreement or a failure by Program Manager to perform the Program Management Services in accordance with the terms and conditions hereof or otherwise as a result of the Program Management Services performed by Program Manager pursuant to this Agreement. 5 (iii) The Parties further agree that the waivers and disclaimers of liability, indemnities, releases from liability, and limitations on liability expressed in this Agreement shall survive termination or expiration of this Agreement, and shall apply at all times, whether in contract, equity, tort or otherwise, even in the event of the fault, negligence, including sole negligence, strict liability, or breach of the Party indemnified, released or whose liabilities are limited, and shall extend to the partners, members, principals, shareholders, directors, officers, employees and agents of each Party and its Affiliates.
(b) Indemnity. To the extent it may lawfully do so, each of Program Manager and Owner hereby indemnify, defend (with counsel of its choosing), and hold harmless the other party and its directors, agents, officers, members, employees and volunteers from and against any and all liability or claim of liability, loss or expense, including defense costs and legal fees and claims for damages of whatsoever character, nature and kind, whether directly or indirectly arising from or connected to: bodily injury, death, personal injury, or property damage caused by negligence, creation or maintenance of a dangerous condition of property, or intentional infliction of harm, including any workers’ compensation suits, liability, or expense, arising from or connected with Program Management Services performed by on behalf of the indemnifying party by any person pursuant to this Agreement; nonpayment for labor, materials, appliances, teams, or power, performed on, or furnished or contributed to the Site. Notwithstanding the above, neither Program Manager nor Owner shall be required to defend, indemnify and hold harmless the other for such other party’s negligent acts and omissions or willful misconduct. It is the intent of the Parties that where negligence is determined to have been joint or contributory, principles of comparative negligence will be followed, and each Party shall bear the proportionate cost of any loss damage, expense or liability attributable to that Party’s negligence.
9. Notices. Any notice, request, demand or other communication which is required or permitted under this Agreement shall be in writing and shall be deemed to have been duly given:
(i) on the date of receipt by the applicable Party if personally delivered; (ii) when transmitted by the applicable Party if transmitted by telecopy, electronic mail, or other digital transmission method, subject to the sender’s facsimile machine receiving the correct answerback of the addressee and confirmation of uninterrupted transmission by a transmission report or the recipient confirming by telephone to sender that he has received the facsimile or electronic mail message; and (iii) when received by the applicable Party, if sent for next day delivery to a domestic address by recognized overnight delivery service or, if sent by certified or registered mail, return receipt requested.
Notices shall be given:
If to Owner, to:
Participate.Energy LLC
2093 Philadelphia Pike #3125,
Claymont, DE 19703.
Attn: Ethan Friedman
Phone: 917-301-2621
Email: [email protected]
6 If to Program Manager, to:
Energy for Palmdale's Independent Choice
38300 Sierra Highway
Palmdale, CA 93550
Attn: Contract Administration
Email: [email protected]
10. General Provisions.
(a) No Agency Relationship. This Agreement does not create an agency relationship between the Parties and does not establish a joint venture or partnership between the parties. Except as expressly set forth herein, neither party has the authority to bind the other party or represent to any person that the party is an agent of the other party. (b) Agreement. This Agreement consists of the terms and conditions set forth herein, as well as the appendices hereto, which are incorporated by reference herein and made part hereof.
In the event of a conflict, variation or inconsistency between the appendices hereto and the terms and conditions contained in the body of this Agreement, the latter shall control and be given priority.
(c) Relationship of the Parties.
(i) Program Manager has been retained by Owner as an independent contractor to solely perform the Program Management Services on behalf of Owner. (ii) Without limiting the relationship of any Party under any other agreement, nothing contained or implied in this Agreement shall constitute or be deemed to constitute any Party as the partner of any other Party for any purpose whatsoever; or create, or be deemed to create, any partnership between any Party and the any other Party. (iii) No Party shall by virtue of this Agreement have the power or authority to enter into any agreement or undertaking for or to act on behalf of or otherwise to bind the any other Party as to any matter or thing to be done in relation to a System or to the provision of the Program Management Services save as may be expressly authorized in this Agreement or agreed in writing between the Parties from time to time.
(d) Entire Agreement. This Agreement, the Schedules and Exhibits attached hereto contains the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior negotiations, undertakings and agreements. Neither Party will be bound by or deemed to have made in connection herewith any representations, warranties, commitments or undertakings, except those contained herein.
(e) Captions; Exhibits. Titles or captions of sections contained in this Agreement are inserted only as a matter of convenience and for reference, and in no way define, limit, extend, describe or otherwise affect the scope or meaning of this Agreement or the intent of any provision 7 hereof. All exhibits and appendices attached hereto shall be considered a part hereof as though fully set forth herein.
(f) Amendment. This Agreement may not be amended or modified in any way unless such amendment or modification is in writing signed by duly authorized representatives of each Party.
(g) No Waivers. It is understood and agreed that any delay, waiver or omission by Owner or Program Manager to exercise any right or power arising from any breach or default by Owner or Program Manager with respect to any of the terms, provisions, or covenants of this Agreement shall not be construed to be a waiver by Owner or Program Manager of any subsequent breach or default of the same or other terms, provisions or covenants on the part of Owner or Program Manager. No waiver of any right or power by any Party under this Agreement shall be deemed effective unless in writing and signed by the waiving Party. (h) Changed Conditions; Invalidity. If there is an occurrence of an event of Force Majeure, there is a material change in market conditions affecting the prices of goods and Program Management Services constituting Development Costs, there is a change in any Project Document or financing document or Owner enters into a new Project Document or financing document affecting performance of the Program Management Services hereunder, or there is a change in any applicable Law, and any such performance or occurrence results in increased or decreased costs to Program Manager, or Owner, as the case may be, shall be entitled to an equitable budget adjustment reflecting the reasonable value of any such increased or decreased costs from such performance or occurrence, and the Parties hereby agree to adjust equitably such other provisions of this Agreement that are directly affected by such performance or occurrence; provided, however, that such adjustments must be consistent with the economic expectations and the intent of the Parties. The invalidity or unenforceability for public policy or other equitable grounds of any provision of this Agreement shall be determined only by a court of competent jurisdiction, and the Parties hereby agree to negotiate an equitable adjustment to the invalid or unenforceable provisions with a view toward affecting the purposes of this Agreement. The validity or enforceability of the remaining provisions or portions or applications hereof shall not be affected thereby.
(i) Representations and Warranties.
(i) Each Party represents and warrants to the other that:
(A) it is duly formed and validly existing under the laws of its jurisdiction of formation;
(B) it has the legal right and full power and authority to execute and deliver, and to exercise its rights and perform its obligations under, this Agreement; 8 (C) all corporate or company action required by it validly and duly to authorize the execution and delivery of, and to exercise its rights and perform its obligations under, this Agreement has been duly taken; and
(D) this Agreement constitutes a valid and binding agreement enforceable against it in accordance with its terms.
(ii) Except as expressly provided in this Agreement or as required by law, no Party makes any warranties or guarantees to the other, either express or implied, with respect to the Facility, the Program Management Services or any other subject matter of this Agreement, and, to the extent permitted by law, each Party disclaims and waives any implied warranties or warranties imposed by law.
(j) Counterparts. The Parties may execute this Agreement in two or more counterparts, which shall, in the aggregate, be signed by the Parties and each counterpart shall be deemed an original instrument as against any Party who has signed it. (k) Facsimile or Electronic Delivery. This Agreement may be duly executed and delivered by a Party by execution and facsimile or electronic format (including portable document format (.pdf)) delivery of the signature page of a counterpart to the other Party, and, if delivery is made by facsimile or other electronic format, the executing Party shall promptly deliver, via overnight delivery, a complete original counterpart that it has executed to the other Party, but this Agreement shall be binding on and enforceable against the executing Party whether or not it delivers such original counterpart.
(l) Dispute Resolution. In the event a dispute arises between the Parties regarding the application or interpretation of this Agreement, the aggrieved Party shall promptly notify the other Party of its intent to invoke this dispute resolution procedure within ten (10) Business Days after such dispute arises. If the Parties shall fail to resolve the dispute within ten (10) Business Days after delivery of such notice, each Party shall, within five (5) Business Days thereafter, nominate a senior officer of its management to meet at the Facility, or at any other mutually agreed location, to resolve the dispute. If the dispute remains unresolved within ten (10) Business Days after such a meeting has commenced, each Party, without further delay, shall have the right to pursue any and all remedies available at law or in equity. The pendency of any dispute under this Agreement shall not of itself relieve any Party of any duty to perform under this Agreement. (m) Non-Recourse. Notwithstanding anything to the contrary provided in this Agreement, it is specifically understood and agreed that there shall be absolutely no personal liability on the part of any of the partners, members, shareholders, or affiliates of the Parties, or any of their respective directors, officers, employees, agents or representatives, (each, a “Protected Person”) for the payment of any amounts due or the performance of any other obligation of any Party under this Agreement. Each Party shall look solely to the assets of the other Parties for the satisfaction of each and every right or remedy under or in connection with this Agreement. In furtherance of the foregoing, Owner and Program Manager each agrees that it shall neither seek or obtain, nor be entitled to seek or obtain, any deficiency or other judgment against any Protected Person for any action or inaction under or in connection with this Agreement, and Owner and 9 Program Manager each releases all such Protected Persons from any such claims by Program Manager or Owner, as the case may be.
[Signature Page Follows]
[Signature Page to Program Management Agreement]
IN WITNESS WHEREOF, the parties have executed this Program Management Services Agreement as of the date first written above.
PROGRAM MANAGER:
City of Palmdale,
a California municipal corporation,
d/b/a Energy for Palmdale's Independent
Choice
By: ____________________________
Name: ___________________________
Title: ___________________________
OWNER:
Participate.Energy LLC
a Delaware limited liability company
By: ____________________________
Name: ___________________________
Title: ___________________________
EXHIBIT A
PROGRAM MANAGEMENT SERVICES SCHEDULE
Program Management Services generally include all activities necessary or helpful to (a) monitor and support and all permitting activities for any System; (b) prepare materials and conduct communications and outreach to residential electric power customer in its service territory to promote the Program and to encourage the installation of Systems by its customers.
(c) create a streamlined and integrated System permitting process allowing for faster System permitting;
(d) effectively communicate with and guide Installer through the System permitting process to ensure shorter permitting timelines and to avoid any permitting delays; (e) Effectively coordinate the System permitting process with all other governmental agencies involved;
(f) To the extent legally permissible and reasonable, expedite permitting for any System
PROGRAM SUPPORT AGREEMENT
This Program Support Agreement (this “ Agreement”) dated effective as of December 1, 2022, (the “Effective Date ”) is by and between CITY OF PALMDALE, A CALIFORNIA
MUNICIPAL CORPORATION, D/B/A ENERGY FOR PALMDALE'S INDEPENDENT CHOICE (“Member”), and Participate.Energy LLC, a Delaware limited liability company (the “Owner”). The parties hereto are sometimes herein referred to individually as a “ Party” and collectively as the “Parties”.
RECITALS
A. Member, Owner and Tesla, Inc. ( “O&M Provider” ) have entered into certain agreements for the creation of a distributed solar and energy storage program for residential electricity customers in Member’s service territory (the “Program”). Under the terms of the Program, Owner will develop, finance, and own residential solar and energy storage systems to be located at private residences within Member’s service territory (each a “System” or, collectively, the “Systems”), O&M Provider will operate and maintain the Systems under an O&M Contract between O&M Provider and Owner (the “O&M Contract”), Member will buy from Owner the energy and certain energy attributes and benefits generated by each System under the terms of a certain power purchase agreement between the Parties of even date herewith (the “Power Purchase Agreement” ), and sell the electric power generated by a System to the residential customer in Member’s service territory, where the System is located (the “Customer”).
B. Member and Owner intend that Systems will be added to this Agreement and the Power Purchase Agreement from time to time during the term of the Power Purchase Agreement.
C. Owner does not independently maintain the internal capability to perform the Program Support Services (as defined below) that Owner requires in connection with the operation and maintenance of the Systems, and Member’s capabilities are expected to provide significant benefits to Owner. Therefore, Owner desires to engage Member to support certain aspects of the Systems operations and management as further set forth herein (the “Program Support Services”).
D. In consideration of the mutual covenants and agreements herein contained, and for other good and valuable consideration, the sufficiency and adequacy of which are hereby acknowledged, the Parties agree to the following:
AGREEMENT
In consideration of the above recitals, the premises and mutual covenants set forth herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, hereby agree as follows:
1. Appointment and Term; Assumption of Development Responsibilities; Standard of Performance . Owner hereby appoints Member to render the Program Support Services as further described in the Schedule of Program Support Services attached hereto as Exhibit A. Member hereby accepts such appointment. The term of this Agreement shall be co- terminus with the term of the Power Purchase Agreement ( “Term”). Member shall use such 2 diligence, care and prudence in the performance of its obligations hereunder as are commercially reasonable, and shall devote such time, effort and skills of its personnel as reasonably possible.
2. Standard of Conduct.
a) Member shall provide the Program Support Services, perform its other obligations and exercise its rights or powers under this Agreement in a prudent manner, and in accordance with: (i) any applicable laws and regulations and permits; and (ii) any agreement, instrument or other document to which Owner is a party, and that Owner has delivered to Member, that relates to the development, construction, Owner or a System or any component thereof (“System Documents”), except to the extent Owner provides Member with written instructions not to do so in the event Owner is contesting in good faith the validity or application of any such applicable laws and regulations or such term and condition of a System Document, in any reasonable manner.
b) Member may, at any time, if it reasonably considers it to be necessary or appropriate, request written instruction from Owner with respect to any matter contemplated by this Agreement and may defer action thereon pending the receipt of such written instructions. c) Member shall advise Owner promptly, if it becomes aware of any material inconsistency between any of the following:
(i) Owner’s instructions given in accordance with this Agreement from time to time;
(ii) any System Document;
(iii) required insurance (if any); and
(iv) any applicable laws and regulations or permit.
d) Any action taken by Member in accordance with the written instructions of Owner, or failure to act pending the receipt of such written instructions, shall be deemed to be within the scope of Member’s authority and in accordance with its obligations under this Agreement and, without limitation, shall not constitute gross negligence or willful misconduct as referred in Section 7.
3. Accounts and Records.
(a) Member, on behalf of Owner, shall keep such books of account and other records relating to each System as may be required by applicable laws and regulations or reasonably requested by Owner in writing. All accounts and records relating to a System, including all correspondence, shall be surrendered to Owner upon demand without charge therefor. (b) All books and records prepared or maintained by Member shall be kept and maintained at all times at secure locations accessible to Owner for audit, inspection and copying by Owner or any representative or auditor therefor or supervisory or regulatory authority upon reasonable written request.
3 (c) During the Term, Member shall keep Owner informed as to the status of the Program Support Services provided by Member hereunder in a frequency Member and Owner may agree to from time to time. Member shall notify Owner of any material event related to the Program Support Services provided by Member hereunder.
4. Compensation and Payment.
(a) As consideration for Member’s Program Support Services to be performed under this Agreement, Owner will pay Member a fee (the “Program Support Services Fee”) equal to (i) Two U.S. Cents ($0.02) multiplied by each Kilowatt-hour of solar energy generation for each System that has been placed into operation and for which Member has confirmed in a legally binding manner that such System will be covered under the Power Purchase Agreement for the term thereof, plus (ii) Fifteen Dollars ($15.00) per month for each Tesla Powerwall installed as part of a System that has been placed into operation and for which Member has confirmed in a legally binding manner that such System will be covered under the Power Purchase Agreement for the term thereof.
(b) The Program Support Services Fee shall become due and payable on a quarterly basis, not later than the fifteenth (15th) day after the end of each calendar quarter during the Term (each, a “Fee Calculation Period” ), provided, that payment of any Program Support Services Fee due and payable shall be limited to funds available to Owner from Net Operating Cash Flow during such Fee Calculation Period. The term “Net Operating Cash Flow” as used in this Agreement shall mean the cash proceeds received by Owner under the terms of the Power Purchase Agreement during a Fee Calculation Period, reduced by (i) actual or reasonably estimated operating and maintenance expenses for all Systems in operation at any time during such Fee Calculation Period, including, without limitation insurance expenses and reasonably estimated reserves for loses, and actual or reasonably estimated System equipment replacement costs during the Term and reserves therefore, (ii) actual or reasonably estimated income or other taxes payable by Buyer with respect to such cash proceeds (iii) preferred distributions to be made and any cash flow payable, or revenue or profit participation allocated to tax or sponsor equity investors unaffiliated with Owner in accordance with the terms and conditions of the then current charter documents of Owner, and (iv) payment of all obligations, including without limitation payment of principal and interest, under any loan document binding Owner at any time during such Fee Calculation Period, or for which any System operating at any time during such Fee Calculation Period has been placed as collateral.
(c) Together with any Program Support Services Fee payment, Owner shall provide Member a written accounting for the Program Support Fee due in reasonable detail. In addition, if payment for a Fee Calculation Period is reduced to available funds for payment for the respective Fee Calculation Period in accordance with Section 4(b), above, Owner shall provide Member a written accounting in reasonable detail supporting any fee reduction during such Fee Calculation Period.
(d) Any portion of the Program Support Services Fee reduced during one Fee Calculation Period in accordance with Section 4(b), above, shall be added to the Program Support Services Fee becoming due and payable in the following Fee Calculation Period subject, 4 however, to availability funds from Net Operating Cash Flow during such following Fee Calculation Period.
(e) To facilitate payment and verification, Owner shall maintain all books and records necessary for billing and payments, including copies of all invoices under this Agreement, for a period of at least two (2) years or as otherwise required by applicable laws and regulations.
Upon fifteen (15) days’ Notice to Owner, Member shall be granted reasonable access to the accounting books and records pertaining to all invoices generated pursuant to this Agreement. (f) Payment adjustments shall be made if Owner or Member discovers there have been good faith inaccuracies in invoicing that are not otherwise disputed under Section 4(h), or there is determined to have been a meter inaccuracy sufficient to require a payment adjustment under the Power Purchase Agreement. If the required adjustment is in favor of Owner, Owner’s quarterly Program Support Services Fee payment shall be credited in an amount equal to the adjustment. If the required adjustment is in favor of Member, Member shall add the adjustment amount to Owner’s next quarterly Program Support Fee payment obligation, subject, however, to the limitations set forth in Section 4(b), above.
(g) If a payment due date under Section 4(b), above, falls on a weekend or legal holiday, such due date shall be the next business day. Payments made after the due date will be considered late and will bear interest on the unpaid balance, except, however, any payment reduction applied during a Fee Calculation Period, if paid during the next available Fee Calculation Period during which funds available to Owner from Net Operating Cash Flow first allow payment of the reduced amount. If the amount due is not paid on or before the due date or if any other payment that is due and owing from one party to another is not paid on or before its applicable due date, a late payment charge shall be applied to the unpaid balance and shall be added to the next billing statement. Such late payment charge shall be calculated based on an annual interest rate equal to 10% (the “Interest Rate”) of the total amount due. If the due date occurs on a day that is not a business day, the late payment charge shall begin to accrue on the next succeeding business day. The payment of any late payment fee by Owner shall be subject to availability of funds from Net Operating Cash Flow.
(h) A Party may, in good faith, dispute the correctness of any invoice or any adjustment to an invoice, rendered under this Agreement or adjust any invoice for any arithmetic or computational error within twelve (12) months of the date the invoice, or adjustment to an invoice, was rendered. In the event an invoice or portion thereof, or any other claim or adjustment arising hereunder, is disputed, payment of the undisputed portion of the invoice shall be required to be made when due. Any invoice dispute or invoice adjustment shall be in writing and shall state the basis for the dispute or adjustment. Payment of the disputed amount shall not be required until the dispute is resolved. Upon resolution of the dispute, any required payment shall be made within two (2) business days of such resolution along with interest accrued at the Interest Rate from and including the original due date to but excluding the date paid. Inadvertent overpayments shall be returned upon request or deducted by the Party receiving such overpayment from subsequent payments, with interest accrued at the Interest Rate from and including the date of such overpayment to but excluding the date repaid or deducted by the Party receiving such 5 overpayment. Any dispute with respect to an invoice is waived if the other Party is not notified in accordance with this Section 4(h) within twelve (12) months after the invoice is rendered or subsequently adjusted, except to the extent any misinformation was from a third party not affiliated with any Party and such third party corrects its information after the twelve-month period. If an invoice is not disputed within twelve (12) months after the close of the month during which performance occurred, the right to payment for such performance is waived.
5. Default and Remedies . If either Party defaults in the performance of any of its material covenants or obligations under this Agreement and such default continues unremedied for a period of (a) ten (10) days, in case of any monetary default, or (b) thirty (30) days in case of non- monetary default, in each after written notice thereof from the non-defaulting Party to the defaulting Party, the non-defaulting Party shall have the right, at its election, to exercise one or more of the following rights and remedies; provided, however, if a non-monetary default is of such a nature that it cannot be cured within said thirty (30) day period, and the defaulting Party has begun to cure each default within the 30-day period, the defaulting Party shall have an additional 60 days in which to cure said default provided it acts in good faith and with due diligence to cure the same (all of which shall be cumulative); provided, further, however, that a default under any agreement with a contractor, subcontractor, engineer or equipment manager for a System, or a delay due to action or inaction by the utility shall not be deemed a default under the Agreement:
(a) terminate this Agreement; and
(b) enforce the provisions of this Agreement by legal proceedings for the specific performance of any covenant or agreement contained herein or for the enforcement of any other appropriate legal or equitable remedy and recover damages caused by any breach by the defaulting Party of the provisions of this Agreement, including court costs, reasonable attorneys’ fees and other expenses incurred in the enforcement of the obligations of the Defaulting Party hereunder; and
(c) exercise any and all rights and remedies that the non-defaulting Party may have under applicable laws and regulations; and
(d) in addition to any rights now or hereafter granted under applicable laws and regulations and not by way of limitation of any such rights, upon the occurrence of any event of default hereunder that is not cured within the time period specified in this Section 5, the non- defaulting Party is authorized to set off and to apply any amounts payable to the defaulting Party hereunder against and on account of the obligations of defaulting Party to the non-defaulting Party hereunder.
6. Indemnity and Liability
(a) Limitation of Liability.
(i) Notwithstanding any provision in this Agreement to the contrary, neither Party, nor their respective Affiliates, nor any of their respective officers, directors, employees, agents, contractors, subcontractors, vendors, shareholders, members, partners or representatives, shall be liable hereunder for any consequential or indirect loss or damage, 6 including loss of profit, cost of capital, loss of goodwill or any other special or incidental damages, it being understood that the Parties’ indemnification obligations under this Section 6 are not and shall not be deemed to be consequential or indirect loss or damage under this Section 6. (ii) Except as provided in this Section 6, Member shall have no liability hereunder to Owner for damages or other amounts in connection with a breach by Member of this Agreement or a failure by Member to perform the Program Support Services in accordance with the terms and conditions hereof or otherwise as a result of the Program Support Services performed by Member pursuant to this Agreement.
(iii) The Parties further agree that the waivers and disclaimers of liability, indemnities, releases from liability, and limitations on liability expressed in this Agreement shall survive termination or expiration of this Agreement, and shall apply at all times, whether in contract, equity, tort or otherwise, even in the event of the fault, negligence, including sole negligence, strict liability, or breach of the Party indemnified, released or whose liabilities are limited, and shall extend to the partners, members, principals, shareholders, directors, officers, employees and agents of each Party and its Affiliates.
(b) Indemnity. To the extent it may lawfully do so, each of Member and Owner hereby indemnify, defend (with counsel of its choosing), and hold harmless the other party and its directors, agents, officers, members, employees and volunteers from and against any and all liability or claim of liability, loss or expense, including defense costs and legal fees and claims for damages of whatsoever character, nature and kind, whether directly or indirectly arising from or connected to: bodily injury, death, personal injury, or property damage to the extent caused by negligence, creation or maintenance of a dangerous condition of property, or intentional infliction of harm, including any workers’ compensation suits, liability, or expense, arising from or connected with Program Support Services performed by on behalf of the indemnifying party by any person pursuant to this Agreement; nonpayment for labor, materials, appliances, teams, or power, performed on, or furnished or contributed to the Site. Notwithstanding the above, neither Member nor Owner shall be required to defend, indemnify and hold harmless the other for such other party’s negligent acts and omissions or willful misconduct. It is the intent of the Parties that where negligence is determined to have been joint or contributory, principles of comparative negligence will be followed, and each Party shall bear the proportionate cost of any loss damage, expense or liability attributable to that Party’s negligence.
7. Notices. Any notice, request, demand or other communication which is required or permitted under this Agreement shall be in writing and shall be deemed to have been duly given: (i) on the date of receipt by the applicable Party if personally delivered; (ii) when transmitted by the applicable Party if transmitted by telecopy, electronic mail, or other digital transmission method, subject to the sender’s facsimile machine receiving the correct answerback of the addressee and confirmation of uninterrupted transmission by a transmission report or the recipient confirming by telephone to sender that he has received the facsimile or electronic mail message; and (iii) when received by the applicable Party, if sent for next day delivery to a domestic address by recognized overnight delivery service or, if sent by certified or registered mail, return receipt requested.
Notices shall be given:
7 If to Owner, to:
Participate.Energy LLC
2093 Philadelphia Pike #3125,
Claymont, DE 19703.
Attn: Ethan Friedman
Phone: 917-301-2621
Email: [email protected]
If to Member, to:
Energy for Palmdale's Independent Choice
38300 Sierra Highway
Palmdale, CA 93550
Attn: Contract Administration
Email: [email protected]
8. General Provisions.
(a) No Agency Relationship. This Agreement does not create an agency relationship between the Parties and does not establish a joint venture or partnership between the parties. Except as expressly set forth herein, neither party has the authority to bind the other party or represent to any person that the party is an agent of the other party. (b) Agreement. This Agreement consists of the terms and conditions set forth herein, as well as the appendices hereto, which are incorporated by reference herein and made part hereof.
In the event of a conflict, variation or inconsistency between the appendices hereto and the terms and conditions contained in the body of this Agreement, the latter shall control and be given priority.
(c) Relationship of the Parties.
(i) Member has been retained by Owner as an independent contractor to solely perform the Program Support Services on behalf of Owner. (ii) Without limiting the relationship of any Party under any other agreement, nothing contained or implied in this Agreement shall constitute or be deemed to constitute any Party as the partner of any other Party for any purpose whatsoever; or create, or be deemed to create, any partnership between any Party and the any other Party. (iii) No Party shall by virtue of this Agreement have the power or authority to enter into any agreement or undertaking for or to act on behalf of or otherwise to bind the any other Party as to any matter or thing to be done in relation to a System or to the provision of the Program Support Services save as may be expressly authorized in this Agreement or agreed in writing between the Parties from time to time.
8 (d) Entire Agreement. This Agreement, the Schedules and Exhibits attached hereto contains the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior negotiations, undertakings and agreements. Neither Party will be bound by or deemed to have made in connection herewith any representations, warranties, commitments or undertakings, except those contained herein.
(e) Captions; Exhibits. Titles or captions of sections contained in this Agreement are inserted only as a matter of convenience and for reference, and in no way define, limit, extend, describe or otherwise affect the scope or meaning of this Agreement or the intent of any provision hereof. All exhibits and appendices attached hereto shall be considered a part hereof as though fully set forth herein.
(f) Amendment. This Agreement may not be amended or modified in any way unless such amendment or modification is in writing signed by duly authorized representatives of each Party.
(g) No Waivers. It is understood and agreed that any delay, waiver or omission by Owner or Member to exercise any right or power arising from any breach or default by Owner or Member with respect to any of the terms, provisions, or covenants of this Agreement shall not be construed to be a waiver by Owner or Member of any subsequent breach or default of the same or other terms, provisions or covenants on the part of Owner or Member. No waiver of any right or power by any Party under this Agreement shall be deemed effective unless in writing and signed by the waiving Party.
(h) Changed Conditions; Invalidity. If there is an occurrence of an event of Force Majeure, there is a material change in market conditions affecting the prices of goods and Program Support Services constituting Development Costs, there is a change in any Project Document or financing document or Owner enters into a new Project Document or financing document affecting performance of the Program Support Services hereunder, or there is a change in any applicable Law, and any such performance or occurrence results in increased or decreased costs to Member, or Owner, as the case may be, shall be entitled to an equitable budget adjustment reflecting the reasonable value of any such increased or decreased costs from such performance or occurrence, and the Parties hereby agree to adjust equitably such other provisions of this Agreement that are directly affected by such performance or occurrence; provided, however, that such adjustments must be consistent with the economic expectations and the intent of the Parties and agree to in writing by the Parties. The invalidity or unenforceability for public policy or other equitable grounds of any provision of this Agreement shall be determined only by a court of competent jurisdiction, and the Parties hereby agree to negotiate an equitable adjustment to the invalid or unenforceable provisions with a view toward affecting the purposes of this Agreement. The validity or enforceability of the remaining provisions or portions or applications hereof shall not be affected thereby.
(i) Representations and Warranties.
9 (i) Each Party represents and warrants to the other that:
(A) it is duly formed and validly existing under the laws of its jurisdiction of formation;
(B) it has the legal right and full power and authority to execute and deliver, and to exercise its rights and perform its obligations under, this Agreement; (C) all corporate or company action required by it validly and duly to authorize the execution and delivery of, and to exercise its rights and perform its obligations under, this Agreement has been duly taken; and
(D) this Agreement constitutes a valid and binding agreement enforceable against it in accordance with its terms.
(ii) Except as expressly provided in this Agreement or as required by law, no Party makes any warranties or guarantees to the other, either express or implied, with respect to the System, Program Support Services or any other subject matter of this Agreement, and, to the extent permitted by law, each Party disclaims and waives any implied warranties or warranties imposed by law.
(j) Counterparts. The Parties may execute this Agreement in two or more counterparts, which shall, in the aggregate, be signed by the Parties and each counterpart shall be deemed an original instrument as against any Party who has signed it. (k) Facsimile or Electronic Delivery. This Agreement may be duly executed and delivered by a Party by execution and facsimile or electronic format (including portable document format (.pdf)) delivery of the signature page of a counterpart to the other Party, and, if delivery is made by facsimile or other electronic format, the executing Party shall promptly deliver, via overnight delivery, a complete original counterpart that it has executed to the other Party, but this Agreement shall be binding on and enforceable against the executing Party whether or not it delivers such original counterpart.
(l) Dispute Resolution. In the event a dispute arises between the Parties regarding the application or interpretation of this Agreement, the aggrieved Party shall promptly notify the other Party of its intent to invoke this dispute resolution procedure within ten (10) business days after such dispute arises. If the Parties shall fail to resolve the dispute within ten (10) business days after delivery of such notice, each Party shall, within five (5) business days thereafter, nominate a senior officer of its management to meet at the facility, or at any other mutually agreed location, to resolve the dispute. If the dispute remains unresolved within ten (10) business days after such a meeting has commenced, each Party, without further delay, shall have the right to pursue any and all remedies available at law or in equity. The pendency of any dispute under this Agreement shall not of itself relieve any Party of any duty to perform under this Agreement. (m) Non-Recourse. Notwithstanding anything to the contrary provided in this Agreement, it is specifically understood and agreed that there shall be absolutely no personal 10 liability on the part of any of the partners, members, shareholders, or affiliates of the Parties, or any of their respective directors, officers, employees, agents or representatives, (each, a “Protected Person”) for the payment of any amounts due or the performance of any other obligation of any Party under this Agreement. Each Party shall look solely to the assets of the other Parties for the satisfaction of each and every right or remedy under or in connection with this Agreement. In furtherance of the foregoing, Owner and Member each agrees that it shall neither seek or obtain, nor be entitled to seek or obtain, any deficiency or other judgment against any Protected Person for any action or inaction under or in connection with this Agreement, and Owner and Member each releases all such Protected Persons from any such claims by Member or Owner, as the case may be.
[Signature Page Follows]
[Signature Page to Program Support Agreement]
IN WITNESS WHEREOF, the Parties have executed this Program Support Agreement as of the date first written above.
MEMBER:
City of Palmdale,
a California municipal corporation,
d/b/a Energy for Palmdale's Independent
Choice
By: ____________________________
Name: ___________________________
Title: ___________________________
OWNER:
Participate.Energy LLC
a Delaware limited liability company
By: ____________________________
Name: ___________________________
Title: ___________________________
EXHIBIT A
PROGRAM SUPPORT SERVICES SCHEDULE
1. Member shall provide Level 1 System Support for all Systems included under the Power Purchase Agreement, including without limitation maintaining and coordinating all personnel, activities, and infrastructure reasonably required for such Level 1 Support Services. “Level 1 Support Services” shall include:
a) Provide first contact and Customer interaction for any System-related communication via email and telephone;
b) Clarify general System functions and features via email or telephone upon receipt of Customer requests;
c) To the extent reasonably possible by telephone or email, verify, analyze and correct System problems reported by Customers;
d) Create incident reports, including initial analysis, for System problems that cannot be corrected by telephone or email;
e) Forward incident reports to O&M Provider promptly upon report of any System problem that cannot be corrected by Member by telephone or email; f) Periodic reporting to Owner and O&M Provider of all significant System-related Customer interactions.
Tesla, Inc. — Multiparty NDA (November 2019) 1 of 3 Confidential Information Multiparty Non-Disclosure Agreement
Effective Date: Tesla Contact:
This Multiparty Non-Disclosure Agreement (“NDA”) is entered as of the Effective Date between the Tesla entity (“Tesla”) and the company(ies) and individual(s) (each, a “Company”) identified below. Tesla and each Company are referred to herein as a “Party” and collectively as the “Parties.” Tesla and each Company agree as follows:
1. Purpose. Any Party hereto or its Affiliates (each, a “Discloser”) may disclose Confidential Information to another Party or its Affiliates (each, a “Recipient”) in order to consider a potential business relationship with each other or fulfill the objectives of such relationship (“Purpose”). “Confidential Information” means information disclosed by Discloser that is marked as confidential or proprietary, identified as confidential or proprietary at the time of disclosure (e.g. if disclosed orally or visually), or disclosed under circumstances by which Recipient should reasonably understand such information is to be treated as confidential or proprietary.
2. Confidentiality. Subject to Section 4, Recipient may not: (a) use Discloser’s Confidential Information for any reason except the Purpose; or (b) disclose Confidential Information to any individual or third party except to (i) its personnel, directors, consultants, professional advisors, and Affiliates, in each case that (A) have a “need to know” such Confidential Information for the Purpose and (B) are bound to confidentiality obligations that protect Confidential Information to at least the same extent as the terms of this NDA (collectively, “Authorized Recipients”), and (ii) another Party to this NDA which is informed in writing of the identity of the original Discloser with respect to such information unless the original Discloser instructed Recipient not to disclose such Confidential Information to another Party to this NDA, and upon receipt such Party shall be deemed to have received such information directly from the original Discloser and to be a Recipient. Recipient shall implement and maintain appropriate organizational, technical, and administrative security measures, exercising the same degree of care to protect Discloser’s Confidential Information that it uses for its own confidential information of a similar nature, but in no event less than reasonable care. Promptly after learning of any unauthorized use or disclosure of, and/or unauthorized attempt to access or modify, any Confidential Information in Recipient’s (or its Authorized Recipients’) custody or control, Recipient shall notify Discloser in writing and cooperate with Discloser to investigate and mitigate any adverse effects. Recipient shall be responsible for any unauthorized use or disclosure of Confidential Information by its Authorized Recipients.
3. Separate NDAs. This NDA shall not be deemed to: (a) modify or limit any separate non-disclosure agreement between two or more Parties (each, a “Separate NDA”); or (b) permit a Party to this NDA to disclose another Party’s Confidential Information without consent to any third party (e.g. under a Separate NDA or to unaffiliated third parties) or for any reason other than the Purpose, except as expressly permitted under this NDA.
4. Exceptions. The obligations of Section 2 shall not apply to information that: (a) is already known to Recipient at the time of disclosure without obligation of confidentiality, (b) is or becomes publicly known through no wrongful act or omission of Recipient, (c) is rightfully received by Recipient from a third party without obligation of confidentiality, (d) is approved for release by written authorization of Discloser, or (e) was developed by Recipient independently and without the use or benefit of any of Discloser’s Confidential Information. A disclosure that Recipient is required to make pursuant to any order or requirement of a court, administrative agency, other governmental agency, or stock exchange will not be deemed a breach of Sections 2 or 6 of this NDA, provided that Recipient has to the extent permitted by law: (x) promptly notified Discloser in writing of such order or requirement, (y) given Discloser an opportunity to challenge or limit the disclosure requirement or seek an appropriate protective order, and (z) cooperated with Discloser to narrow the scope of such disclosure to only that portion of the Confidential Information that is necessary to fulfill the order or requirement. A disclosure which complies with a Federal Acquisition Regulation permitting disclosures to the government concerning government contracts will not be deemed a breach of this NDA.
Each Party is hereby given notice of the immunity set forth in 18 USC § 1833(b).
5. Anonymous Data. Tesla may share de-identified or anonymous data which does not directly identify the data subject(s), such as individuals, vehicles, products, or entities. Each Company agrees that it shall not, and shall not attempt to, identify any data subject.
6. No Publicity. Each Party agrees that it may not make any public disclosures relating to the existence of this NDA or the Purpose without the other Parties’ prior written consent.
7. Ownership. All Confidential Information and derivations thereof remain Discloser’s sole property, and no license or other right to Confidential Information or intellectual property is granted or implied in this NDA or by any disclosure. This NDA does not require any Party to disclose any information.
8. Affiliate. “Affiliate” means an entity which either controls or is controlled by a Party or is under common control with a Party, where “control” means the power to direct or cause the direction of an entity’s management and policies through ownership or control of at least 50% of its voting securities or ownership interest.
9. As-Is Disclosures. Discloser warrants that it has the right to disclose the Confidential Information to Recipient. No other warranties are made whether express, implied, or statutory. All Confidential Information is provided on an “AS IS” basis.
Multiparty Non-Disclosure Agreement
Tesla, Inc. — Multiparty NDA (November 2019) 2 of 3 Confidential Information Discloser disclaims any and all other representations, warranties, or assurances concerning the Confidential Information, including as to accuracy, performance, completeness, suitability, or third party rights.
10. Current and Future Development. Nothing in this NDA prohibits a Party from developing, or having developed, products or services that, without violation of this NDA, compete with other Parties’ products or services. No Party may be presumed to have violated this NDA solely because it uses, makes, has made, or offers products or services which compete with another Party’s products or services.
11. Return or Destruction. Confidential Information, and all copies thereof, remain Discloser’s property. Upon expiration or termination of this NDA or Discloser’s written request, each affected Recipient shall promptly return to Discloser all documents, presentations, and other tangible items of Confidential Information or, at the request of Discloser, certify in writing that all such Confidential Information has been destroyed; provided, however, that Recipient may retain and use such Confidential Information if and to the extent permitted by a license or similar right under a separate agreement. Recipient shall also use reasonable efforts to delete all electronic copies of Confidential Information under its control. If it would be unreasonably costly or burdensome for Recipient to immediately delete copies of Confidential Information from its routinely-made backup or disaster-recovery systems, then Recipient will not be required to do so until the next regularly-scheduled destruction of such copies in the usual course of business and in compliance with a reasonable back-up retention policy adopted by Recipient, provided that such copies remain subject to the requirements of Section 2 so long as they remain in Recipient’s custody or control.
If data is restored to Recipient’s production systems from a backup or disaster recovery system after Confidential Information was otherwise required to be returned or destroyed, Recipient must either ensure that the restoration does not include any Confidential Information which should otherwise have been returned or destroyed or, if such Confidential Information is included in the restoration, securely delete such Confidential Information promptly after the restoration.
12. Termination. This NDA is effective as of the Effective Date and will expire 3 years thereafter. Any Party may terminate its participation in this NDA for any or no reason by giving 60 days’ prior written notice to the other Parties. Expiration or termination will not affect any Party’s rights or obligations with respect to Confidential Information disclosed before such expiration or termination, and such rights or obligations will continue as long as Recipient has custody of or control over Confidential Information. Sections 2–7 and 10–14 hereof will survive for 5 years after the expiration or termination of this NDA.
13. Disputes; Venue. This NDA is governed by the laws of the county, state, and country specified below Tesla’s signature, in each case without regard to conflict of laws principles. Each Party will be jointly and severally responsible for the acts and omissions of its Affiliates and each of their respective Authorized Recipients. The rights of and damages incurred by a Party’s Affiliate will be deemed to be rights of and damages incurred by such Party. The Parties shall discuss in good faith a resolution to any conflict or dispute under this NDA. The exclusive venue for any judicial action arising out of or relating to this NDA will be the state, federal, or regional courts for the location specified below Tesla’s signature. The Parties, for themselves and their respective Affiliates and Authorized Recipients, hereby waive any challenge to venue and jurisdiction in such courts.
14. Miscellaneous. This NDA constitutes the entire agreement between the Parties regarding its subject matter and supersedes all prior agreements, representations, and understandings between the Parties regarding its subject matter. If any provision hereof is held by a court of competent jurisdiction to be illegal or unenforceable, such provision shall be changed and interpreted so as to best accomplish the objectives of the original provision to the fullest extent allowed by law and the remaining provisions of this NDA shall remain in full force and effect. This NDA is written in the English language, and the English version shall prevail over any translation thereof. A waiver of any right hereunder does not imply a waiver of any other rights. No waiver, alteration, modification, or amendment of this NDA shall be effective unless in writing and signed by all Parties. This NDA may be signed in duplicate originals or in separate counterparts, each of which is effective as if the Parties signed a single original, and a facsimile of an original signature or electronically-signed version transmitted to the other Parties is effective as if the original was sent to the other Parties. Any notice required or permitted by this NDA shall be made in writing and be deemed delivered upon verification of delivery to the other Parties. Each Party agrees that it shall not assign, transfer, or otherwise convey or delegate any of its rights or duties under this NDA (except to the successor in a merger, acquisition, or corporate reorganization of the assigning Party or, in the case of Tesla, to Tesla, Inc.) without the other Parties’ prior written consent, and any attempt to do so shall be void.
Multiparty Non-Disclosure Agreement
Tesla, Inc. — Multiparty NDA (November 2019) 3 of 3 Confidential Information Tesla and each Company execute this Multiparty Non-Disclosure Agreement through their duly authorized representatives.
Tesla: Tesla, Inc.
Signed:
Printed:
Title:
Date:
Contact Information:
Legal Department
PO Box 15430, Fremont CA 94539, USA
Phone : +1-650-681-5000
Governing Law: California
Venue: Santa Clara County, California
Company: Participate.Energy LLC
Signed:
Printed: Ethan Friedman
Title: Managing Director
Date:
Contact Information:
Name/Dept.: Ethan Friedman
Address: 2093 Philadelphia
Pike,Claymont, DE 19703
Phone: 917 301 2621
Company:
Signed:
Printed:
Title:
Date:
Contact Information:
Name/Dept.:
Address:
Phone:
Company:
Signed:
Printed:
Title:
Date:
Contact Information:
Name/Dept.:
Address:
Phone: