HomeMy WebLinkAboutRESO 9436~
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Resolution No. 9436
Resolution of the Council of the City of Palo Alto Consenting to the Assignment
of the Power Purchase Agreement with Brannon Solar, LLC to CRE-Kettleman
Holdco, LLC and Approving the Amended and Restated Power Purchase
Agreement with EE Kettleman Land, LLC for the Purchase of Solar Electricity
RECITALS
A. On November 5, 2012, Council approved the power purchase agreement
("Original PPA") with Brannon Solar LLC ("Brannon" or "Seller") for the purchase of electricity
from a 20 MW{ac) photovoltaic ("PV") solar electric generating facility {"Original Plant")
originally planned to be built and located at the intersection of Davidson Avenue and W. Ballard
Avenue, Firebaugh, Fresno County, as more particularly described in Exhibit A to the Original
PPA {"Original Site").
B. The term of the Original PPA is for a base oftwenty-five years, with an additional
five-year extension term available at the City's sole option ("Extension Option") at a cost not to
exceed $91 million, with a Commercial Operation Date (COD) of August 1, 2014.
C. The definition of "Site" in the Original PPA permits Seller to build the Original
Plant at an alternate location, provided that the City provides written consent to the site
change, which consent shall not be unreasonably withheld.
D. Under section 10.1 of the Original PPA, the City must consent in writing prior to
any assignment of the rights and obligations of the Original PPA to another party.
E. The City has been informed that Brannon and CRE-Kettleman Holdco, LLC ("CRE
Holdco" or "New Seller") now desire to enter into an Asset Purchase Agreement by which
Brannon will sell and assign the Original PPA to CRE Holdco.
F. CRE Holdco further desires to enter into a Membership Interest Purchase and
Sale Agreement for the purchase of all of the outstanding membership interests in EE
Kettleman Land, LLC {"ProjectCo") which owns a.ll of the assets associated with the
development of an approximate 20 MW(ac) solar PV power generation facility (the "New
Plant") to be located at a site near Kettleman City, California (the "New Site").
G. Upon closing of the acquisition of the membership interests in ProjectCo, eRE-
Kettleman California, LLC {CRE), the parent company of CRE Holdco, intends to merge CRE
Holdco with and into ProjectCo (the "Merger").
H. The City and CRE Holdco wish to enter into an amended and restated PPA (the
"Amended and Restated PPA") which shall be held post-Merger by and in the name of
ProjectCo and will replace the Original PPA, and among other things, account for the relocation
to the New Site, the associated change in the expected energy production of the New Plant,
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and the elimination of New Seller's financing termination right pursuant to Section 4.3(k) of the
Original PPA.
I. The solar insolation is moderately higher at the New Site than at the Original
Site, resulting in an approximately 5% increase in expected annual energy productio!' from the
New Plant compared to the Original Plant, which results in a cost not to exceed $116 million
under the Amended and Restated PPA.
J. The New Plant is expected to begin commercial operations no later than June 1,
2015, which represents a ten-month delay from the COD deadline provided in the Original PPA.
K. In order to compensate the City for granting a ten-month extension to the COD
deadline, as well as for the staff time and resources associated with negotiating and seeking
approval of the consent to assignment agreement and the Amended and Restated PPA, CRE
Holdco will make a one-time administrative payment of $300,000 to the City (the
"Administrative Payment").
L. The City has agreed to consent to the assignment of the Original PPA to CRE
HoldCo and acknowledges the Merger on the terms and conditions set forth in the Consent to
Assignment Agreement by and between the City, Brannon, CRE, CRE HoldCo and ProjectCo,
conditioned on and pursuant to the terms of the Amended and Restated PPA which will be held
post-Merger by and in the name of ProjectCo, and upon the City's receipt of the Administrative
Payment from CRE HoldCo.
The Council of the City of Palo Alto RESOLVES as follows:
SECTION 1. The Council approves the Consent to Assignment Agreement by and
between the City, Brannon, CRE, CRE HoldCo and ProjectCo and acknowledges the Merger
conditioned on and pursuant to the terms of the Amended and Restated PPA which will be held
post-Merger by and in the name of ProjectCo, and upon receipt of the Administrative Payment
from CRE HoldCo.
SECTION 2. The Council approves the Amended and Restated PPA between EE
Kettleman Land, LLC, as seller, and the City of Palo Alto, as buyer. The delivery term of the
amended PPA is up to thirty (30) years, commencing upon the commercial operation date of
the planned electric generation facility, which date is expected to be no later than June 1, 2015.
Spending authority under the Amended and Restated PPA shall not exceed one hundred sixteen
million dollars ($116,000,000).
SECTION 3. The Council delegates to the City Manager, or his designee, the authority
to execute the Consent to Assignment Agreement and the Amended and Restated PPA on
behalf of the City, and the authority to execute any documents necessary to administer the
Amended and Restated PPA that are consistent with the Palo Alto Municipal Code and City
Council approved policies.
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SECTION.4 As permitted by section 2.30.290 of the Palo Alto Municipal Code, the
Council delegates to the City Manager, or his designee, the authority to exercise the Extension
Option as defined herein, to extend the twenty-five year base contract to a thirty year contract
term for the City.
SECTION 5. With respect to the Council's approval of the Consent to Assignment
Agreement, acknowledgement of the Merger and approval of the Amended and Restated PPA,
the Council waives the creditworthiness requirements of Palo Alto Municipal Code section
2.30.340(c) as applied to CRE HoldCo and ProjectCo.
SECTION 6. Approval of the Consent to Assignment Agreement and the Amended and
Restated PPA does not meet the definition of a project under the California Environmental
Quality Act (CEQA), pursuant to Public Resources Code Section 21065. However, the City
intends to receive output from a project that will constitute a project for the purposes of CEQA.
The project developer will be responsible for acquiring necessary environmental reviews and
permits on the project to be developed.
INTRODUCED AND PASSED: June 9, 2014
AVES: BERMAN, BURT, HOLMAN, KLEIN, KNISS, PRICE, SCHMID, SHEPHERD
NOES:
ABSENT: SCHARFF
ABSTENTIONS:
~·~ City Clerk
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EXECUTION COUNTERPART
CONSENT TO ASSIGNMENT AGREEMENT
This CONSENT TO ASSIGNMENT AGREEMENT (the "Consent") is made by and among the CITY OF PALO
ALTO, a California chartered municipal corporation (the "City"), BRANNON SOLAR, LLC, a Delaware limited
liability corporation ("Brannon"), CRE·KETTLEMAN CALIFORNIA LLC, a Delaware corporation ("CRE'), CRE·
KETTLEMAN HOLDCO LLC, a Delaware limited liability corporation ("CRE Holdco"), and EE KETTlEMAN lAND
LLC, a Delaware corporation ("ProjectCo") (sometimes referred to individually, a "Party'' and,
collectively, the "Parties"), In reference to the following facts and circ~mstances:
RECITALS
A. City and Brannon Solar, LLC, an indirect subsidiary of Trina, entered into a Power Purchase
Agreement, dated as of November 5, 2012 ("Original PPA") with respect to the Output of a
photovoltaic solar power generation facility ("Original Plant") originally planned to be built and
located at the intersection of Davidson Avenue and W. Ballard Avenue, Firebaugh, Fresno
County, CIS more particularly described in Exhibit A to the Original PPA ("Original Site").
B. Pursuant to Section 10.1 of the Original PPA, the City must consent in writing prior to any
assignment of the rights and obligations of the Original PPA .
. c. The City has been informed that Brannon and CRE Holdco now desire to enter into an Asset
Purchase Agreement ("Asset Purchase Agreement'') by which Brannon will sell and assign the
Original PPA to CRE Holding, and a condition of the closing of said Asset Purchase Agreement is
that this Consent be obtained from City.
D. In connection. with that sale, Brannon desires to transfer and assign its,rights, duties; obligations
and interests in the Original PPA to CRE Holdco, and CRE Holdco desires to assume all such
rights, duties, obligations and interests in the Original PPA (collectively, "Assignment and
Assumption").
E. CRE Holdco further desires to enter into a Membership Interest Purchase and Sale Agreement,
dated as of June~ 2014 ("MIPSA") for the purchase of all of the outstanding membership
interests· in . ProjectCo which owns all of the assets associated with the development of an
approximate 20MW AC photovoltaic solar power generation facility (inclusive of interconnection)
(the "New Plant'') to be located at a site near Kettleman City, California (the "New Site'1.
F. Upon closing of the acquisition of the membership interests in ProjectCo, CRE intends to merge
CRE Holdco with and into ProjectCo (the "Merger'').
G. Pursuant to Section 10.1 of the Original PPA and as a condition to the closing of the Asset
Purchase Agreement, Brannon, CRE, and CRE Holdco have requested the City (i) to consent to
Assignment and Assumption in accordance with the terms of an Assignment and Assumption of
Power Purchase Agreement substantially in the form attached hereto as Exhibit A ("PPA
Assignment Agreement''), (II) to acknowledge the Merger of CRE Holdco into ProjectCo; and (iii)
to extend the Commercial Operation Date ("COD'1 of August 1, 2014 in the Original PPA to June
1, 2015 for the New Plant in the Amended and Restated Power Purchase Agreement ("Amended
and Restated PPA"), substantially in the form attached hereto as Exhibit B, to be entered into
between City and ProjectCo.
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HOU:342964B.6
H. The City has agreed (i) to consent to Assignment and Assumption and (ii) to acknowledge the
Merger on the terms and conditions set forth in this Consent, and pursuant further to the terms
of the Amended and Restated PPA, to be entered into between City and ProjectCo.
I. The City has agreed to t~e requested COD extension to June 1, 2015, conditioned upon receipt
by City of the Administrative Payment set forth in Section 3 of this Consent, offered by CRE
Holdco to provide adequate consideration to compensate the City for financial and other harm
suffered as a result of the delayed COD, which Is difficult and Impractical to quantify at this time,
including, without limitation, the City's estimate of staff time spent negotiating and seeking
approval.for the Consent to Assignment and Amended and Restated PPA Brannon, CRE and CRE
Holdco have sought to date.
NO~W THEREFORE, in consideration of the above referenced Recitals and the following mutual
covenants, commitments and obligations, the Parties agree, as follows:
1. Consent to Transfer, Assisnment and Assumption. City hereby (i) consents to Assignment and
Assumption and (II) acknowledges the Merger of CRE Holdco with and into ProjectCo, as defined
in the above referenced Recitals. The City's consent is based on the following representations:
(a) Made by Brannon, In connection with Assignment and Assumption, that all the rights,
duties, obligations and interests of Brannon to perform under the terms of the Original
PPA shall be transferred and assigned to CRE Holdco in connection with the execution of
the Asset Purchase Agreement and Assignment and Assumption are executed.
(b) Made by CRE Holdco, in connection with Assignment and Assumption, that all the rights,
duties, obligations and Interests of Brannon to perform under the terms of the Original
PPA shall be assumed and performed by CRE Holdco in connection with the execution of
·the Asset Purchase Agreement and Assignment and Assumption. CRE Holdco agrees to
undertake any and all action(s) necessary to meet the terms and conditions of the
Original PPA referred to in this Consent.
(c) Made by CRE Holdco, that all the rights, duties, obligations and interests of CRE Holdco
to perform under the terms of the Original PPA shall become the obligations of
ProjectCo by operation of law from and after the effectuation of the Merger of CRE
Holdco with and into ProjectCo.
(d) Made by ProjectCo that, from and after the Merger, all the rights, duties, obligations
and Interests of CRE Holdco to peljorm under the terms of the Original PPA shall be
assumed and performed by ProjectCo by operation of law.
(e) Made by CRE Holdco and ProjectCo, that ProjectCo agrees to undertake any and all
action(s) necessary to meet the terms and conditions of the Original PPA referred to in
this Consent.
(f) Made by CRE Holdco and ProjectCo, that ProjectCo will enter into and comply with all
terms set forth in the Amended and Restated PPA approved by City on June 9, 2014,
including, without limitation, all Milestone and Development Liquidated Damages
CONSENTTO ASSIGNMENT AGREEMENT
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HOU:3429648.6
provisions, the applicability of which CRE Holdco and ProjectCo agree not to disclaim for
reasons related to Assignment and Assumption or the Merger or any reason not
otherwise provided for in the Amended and Restated PPA.
2. Effectiveness. This Consent shall only become effective as of: (a) the closing of the transactions
contemplated by the Asset Purchase Agreement, including, but not limited to, the full execution
of a PPA Assignment Agreement for Assignment and Assumption; (b) execution of the Amended
and Restated PPA by ProjectCo and the City; and (c) CRE Holdco remits the Administrative
Payment to the City In accordance with the ter:ms set forth in Section 3 of this Consent. For the
avoidance of doubt, this Consent shall expire as of August 31, 2014 if it has not become effective
in accordance with this section.
~. Administrative Payment.
(a) No later than 4 p.m. Pacific Standard Time on the Effective Date set forth in the
Amended and Restated PPA, CRE HoldCo agrees to remit to the City a payment of three
hundred thousand dollars ($300,000) to the following account:
Bank:
Bank Routing Number:
Account Number:
Beneficiary Account Name:
Type of Account:
Bank Address, City, State:
Federal Tax ID #:
Wells Fargo Bank, N.A.
121000 248
412107 6145
City of Palo Alto
Checking
420 Montgomery Street
San Francisco, CA 94104
946000389
(b) The City's agreement to extend the COD in the Amended and Restated PPA to June 1,
2015 shall not be construed as a waiver or relinquishment of any of the City's rights or
CRE Holdco or ProjectCo obligations under the terms and conditions of the Amended
and Restated PPA.
4. Notice. All notices hereunder will be given In writing and directed as follows:
HOU:3429648.6
To CITY:
City of Palo Alto
250 Hamilton Avenue, 8th Floor
Palo Alto, California 94301
ATTN: Senior Deputy City Attorney
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ToCRE:
CRE·Kettleman California LLC
c/o Centaurus Renewable Energy LLC
Williams Tower
2800 Post Oak Blvd, Ste. 225
Houston, TX 77056
CONSENT TO ASSIGNMENT AGREEMENT
To BRANNON:
Brannon Solar, llC
c/o Trina Solar US Development, llC
100 Century Center, Suite 501
San Jose, CA 95112
Attn: President-Americas
To: Project Co:
EE Kettleman Land, LLC
c/o Centaurus Renewable Energy llC
Williams Tower
2800 Post Oak Blvd, Ste. 225
Houston, TX 77056
S. General Provisions.
To CRE Holdco:
CRE-Kettleman Holdco LLC
c/o Centaurus Renewable Energy llC
Williams Tower
2800 Post Oak Blvd, Ste. 225
Houston, TX 77056
(a) Definition of Terms. Terms used but not defined herein have the meanings set forth in
the Amended and Restated PPA.
(b) Entire Agreement. This Consent embodies the entire agreement between the Parties as
to the subject matter hereof. No verbal agreements or conversation with any officer,
agent or employee of City prior to execution of this Consent shall affect or modify any of
the terms or obligations contained in this Consent. Any such verbal agreement shall be
considered as unofficial information and in no way binding upon City.
(c) Amendment. The Consent may only be amended by written agreement executed by all
Parties.
(d) Compliance with law. Each Party will conduct the activities contemplated by this
Consent In accordance with all applicable laws, regulations and other requirements to
which It is subject.
(e) Assignment. Neither Party may assign or transfer this Consent or any of the rights or
interests in this Consent without the prior written consent of the other Party.
(f) Severabllltv. The partial or total invalidity of one or more parts of this Consent will not
affect the intent or validity or remaining parts of this Consent.
(g) Choice of law. Venue. This Consent will be deemed a contract under the laws of the
State of California and for all purposes shall be interpreted in accordance with such
laws. Proper venue for legal action regarding this Consent will be the state courts of
California or in the United States District Court for the Northern District of California in
the County of Santa Clara, State of California.
CONSENT TO ASSIGNMENT AGREEMENT
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HOU:3429648.6
(h) Counterparts. This Consent may be signed in multiple counterparts, which shall, when
executed by all Parties, constitute a single binding agreement.
(i) Authority. The individuals executing this Consent represent and warrant that they have
the legal capacity and authority to do so on behalf of their respective legal entities.
In WITNESS WHEREOF, the Parties have executed this Consent as of the Effective Date.
B~
By. --___ ___.--
Name: ::r~~..vs..-V>
Title:~~~
CRE-KmLEMAN CALIFORNIA LLC
By: Centaurus Renewable Energy LLC,
Its sole member
CRE·Kml.EMAN HOLDCO LLC
By: CRE·Kettleman California LLC
By: Centaurus Renewable Energy LLC,
Its sole member
HOU:3429648.6
APPROVED AS TO FORM:
~~
APPROVED:
EE KmLEMAN LAND, LLC
BY: CRE-Krnt.EMAN HOLDCO LLC
By: CRE-Kettleman California LLC
By: Centaurus Renewable Energy LLC,
its sole member
By: 2-.Ji/lf,
Keith Holst, Manager
CONSENT TO ASSIGNMENT AGREEMENT
5
Lunt, Kimberly
From:
Sent:
To:
Subject:
Follow Up Flag:
Flag Status:
Kim,
Billups, Janet
Thursday, June 19, 2014 11:16 AM
Lunt, Kimberly
Requesting Reso Nos.
Follow up
Flagged
Please provide Reso Nos. for the following items:
1. Resolution of the Council of the City of Palo Alto Consenting to the Assignment of the Power Purchase
Agreement with Brannon Solar, LLC to CRE-Kettleman Holdco, LLC and Approving the Amend.ed and
Restated Power Purchase Agreement with EE Kettleman Land, LLC for the Purchase of Solar Electricity,
PASSED ON 6/9/14 1 L/J k:J
2. Resolution of the Council of the City of Palo Alto Approving Amendment No. 1 to the Power Purchase
Agreement with Elevation Solar C LLC for the Purchase of Solar Electricity, PASSED ON 6/16/14
q433
3. Resolution of the Council of the City of Palo Alto Approving Amendment No. 1 to the Power Purchase
Agreement with Western Antelope Blue Sky Ranch B LLC for the Purchase of Solar Electricity, PASSED ON
6/16/14. 1 Lf 3 s-
Thanks,
Janet Billups
Claims Investigator
Office of the City Attorney
City of Palo Alto
250 Hamilton Avenue
Palo Alto, CA 94301
Ph: 650-329-2171
Janet.Billups@CityofPaloAito.org
~ Please consider the environment before printing this email
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HOU:3428558.6
EXECUTION COUNTERPART
AMENDED AND RESTATED
POWER PURCHASE AGREEMENT
Between
The City of Palo Alto
and
EE KETTLEMAN LAND LLC
Dated as of June 2+-, 2014
AMENDED AND RESTATED
POWER PURCHASE AGREEMENT
[v. 3-2014]
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS .............................................................................................. 6
ARTICLE II TERM, PURCHASE AND SALE ............................................................... 19
2.1 Term ....................................................................................................... -19
2.2 Purchase and Sale of the Output.. .......................................................... 19
2.3 Price ....................................................................................................... 21
2.4 Tax Credits and Incentives ..................................................................... 21
2.5 . Right of First Refusal for Expansion Plant and Expansion Plant
Output. .................................................................................................... 22
2.6 Refurbishment of Plant ........................................................................... 23
ARTICLE Ill METERING AND BILLING ....................................................................... 23
3.1 Metering Requirements .......................................................................... 23
3.2 · Billing ...................................................................................................... 24
ARTICLE IV SELLER'S OBLIGATIONS ...................................................................... 25
4.1 Development, Finance, Construction and Operation of the Plant ........... 25
4.2 General Obligations ................................................................................ 28
4.3 Construction Milestones ......................................................................... 30
· 4.4 ··Obligation to Schedule and Deliver ........................................................ 31
ARTICLE V BUYER'S OBLIGATIONS ......................................................................... 34
5.1 Delivery and Transmission ..................................................................... 34
5.2 Taxes ...................................................................................................... 35
5.3 Notification of Transmission Outages ..................................................... 35
ARTICLE VI FORCE MAJEURE .................................................................................. 35
6.1 Remedial Action ..................................................................................... 35
6.2 Notice ..................................................................................................... 35
6.3 Termination Due To Force Majeure Event.. ............................................ 36
ARTICLE VII DEFAULT/REMEDIESffERMINATION .................................................. 36
7.1 Events of Default by Buyer ..................................................................... 36
7.2 Events of Default by Seller ..................................................................... 36
7.3 Termination for Default, Etc .................................................................... 37
7.4 Damages ................................................................................................ 39
7.5 · Indemnification ....................................................................................... 40
7.6 Buyer's Right to Operate ........................................................................ 41
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HOU:3428558.6
AMENDED AND RESTATED
POWER PURCHASE AGREEMENT
[v. 3-2014]
TABLE OF CONTENTS
Page
ARTICLE VIII REPRESENTATIONS AND WARRANTIES .......................................... 42
8.1 Seller's Representations and Warranties ................................................ 42
8.2 . Buyer Representations and Warranties ..................... : ............................ 44
ARTICLE IX DEVELOPMENT AND PERFORMANCE ASSURANCE ......................... 45
9.1 Forms of Assurance ............................................................................... 45
9.2 Managing Assurances ............................................................................ 45
9.3 Development Liquidated Damages ......................................................... 46
9A . Performance Liquidated Damages ......................................................... 46
ARTICLE X MISCELLANEOUS ................................................................................... 47
10.1 Assignment ............................................................................................. 47
10.2 Financing ................................................................................................ 48
10.3 Notices .................................................................................................... 48
10.4 · Captions ................................................................................................. 50
10.5 No Third Party Beneficiary ...................................................................... 50
10.6 No Dedication ......................................................................................... 50
10.7 Entire Agreement; Integration ................................................................. 50
10.8 Applicable Law ....................................................................................... 51
10.9 . Venue ..................................................................................................... 51
10.10 Nature of Relationship ............................................................................ 51
1 0.11 Good Faith and Fair Dealing; Reasonableness ...................................... 51
10.12 Severability ............................................................................................. 51
10.13 Confidentiality ......................................................................................... 52
1 0. 14 Cooperation ............................................................................................ 53
1 0.15· Mobile Sierra Doctrine ............................................................................ 53
10.16 Counterparts ........................................................................................... 54
10.17 Immunity Waiver ..................................................................................... 54
10.18 Debt Liability Disclaimer ......................................................................... 54
EXHIBITS
A-1 Plant Site Description
A-2 Site Drawings
B Environmental Attribute Transfer from Seller to Buyer
C Insurance Coverages
D Scheduling Protocols
E COD Certification
E-1 Form of Monthly Report
HOU:3428558.6
iii
AMENDED AND RESTATED
POWER PURCHASE AGREEMENT
[v. 3-2014]
TABLE OF CONTENTS
F-1 Form of Letter of Credit
F-2 Form of Escrow Agreement
G Expected Annual Net Energy Production
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HOU:3428558.6
Page
AMENDED AND RESTATED
POWER PURCHASE AGREEMENT
[v. 3-2014]
~NfBNDEDAND.RE:SJATED POWER PURCHASE AGREEMENT
This Amended and Restated Power Purchase Agreement (the
"Agreement"), dated as ofJune ?...'1, 2014 (the "Effective Date"), is entered into
by and between the City of Palo Alto, a California chartered municipal corporation
("Buyer"), and EE Kettleman Land LLC, a Delaware limited liability company
("Seller") (individually, a "Party" and, collectively, the "Parties").
RECITALS:
1. Buyer and Brannon Solar, LLC, a Delaware limited liability company
("Brannon") entered into that certain Power Purchase Agreement, dated as
of November 5, 2012 ("Original Agreement") with respect to the Output of
a photovoltaic solar power generation facility ("Original Plant") originally
planned to be built and located at the intersection of Davidson Avenue and
W .. Ballard Avenue, Firebaugh, Fresno County, as more particularly
described in Exhibit A to the Original PPA ("Original Site").
2. Pursuant to an Asset Purchase Agreement, dated as of the Effective Date,
by and between Brannon and CRE-Kettleman Holdco LLC ("CRE"),
Brannon desires to assign the Original Agreement to CRE.
3. Pursuant to section 1 0.1 of the Original Agreement, Buyer must consent in
writing prior to any assignment of the rights and obligations of the Original
Agreement.
4. Buyer entered into a Consent to Assignment/Assumption Agreement as of
the Effective Date with Brannon and CRE to provide the Buyer's consent to
the assignments set forth in these Recitals.
5. Seller now intends to develop, finance, build, own and operate a solar
photovoltaic electric generating facility (the "Plant"), to be loca,ted at the
Site.
6. Buyer is engaged in the procurement and supply of electricity to residential
and commercial customers in Palo Alto, California.
7. Buyer wishes to purchase the Output of the Plant and intends to resell
related Energy to its residential and commercial customers.
8. Buyer is willing to purchase, and Seller is willing to sell, the Output of the
Plant, on the terms and conditions and at the prices set forth in this
Agreement.
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HOU:3428558.6
AMENDED AND RESTATED
POWER PURCHASE AGREEMENT
[v. 3-2014]
9. Buyer is purchasing this Output to meet Buyer's needs at a known price and
timing.
10. Subject to the approval by the city council fo the City of Palo Alto of this
Agreement and the Consent to Assignment/Assumption Agreement
between Buyer, Brannon, and CRE, this Agreement amends, restates and
replaces the Original Agreement, and the Original Agreement shall be of no
further force or effect.
NOW THEREFORE, in consideration of the recitals above and the following
covenants, terms and conditions, the Parties agree:
AGREEMENT:
ARTICLE I
DEFINITIONS
The following initially capitalized terms, whenever used in this Agreement, not
otherwise defined in the preamble or herein, have the meanings set forth below,
unless the context of their use otherwise indicates. The terms "includes" and
"including" mean to include, "without limitation."
AC: Alternating current.
Agreement: Has the meaning set forth in the preamble, and includes all exhibits
and appendices thereto, as may be amended from time to time.
Buyer: The City of Palo Alto and any successor or permitted assignee.
CAISO: The California Independent System Operator Corporation, or its
functional successor.
CAISO Tariff: The CAl SO FERC Electric Tariff, First Replacement Volume No.1,
as it may be amended, supplemented or replaced (in whole or in part) from time to
time.
Calculation Period: The twenty-four (24) month periods (i.e., two full Contract
Years) ending on (and including) each anniversary of the Commercial Operation
Date, commencing at the second anniversary of the Commercial Operation Date.
Calculation Period Deemed Delivered Energy Amount: For each Calculation
Period, an amount expressed in MWh equal to the sum of (i) the total Energy
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AMENDED AND RESTATED
POWER PURCHASE AGREEMENT
[v. 3-2014]
actually delivered by Seller to the Point of Interconnection in such Calculation
Period plus (ii) the Seller Excused Energy Amount for such Calculation Period.
CARB: Has the meaning set forth in the definition of EA Agency.
CEC: Has the meaning set forth in the definition of EA Agency.
CEQA: The California Environmental Quality Act.
Change in Law: The enactment or issuance of any new law or regulation, the
amendment, alteration, modification or repeal of any existing law or regulation or
any authoritative interpretation of any existing law or regulation issued by a
competent court, tribunal or Governmental Authority contrary to the existing official
interpretation thereof, in each case coming into effect after the Effective Date and
which must be complied with in order for the Plant to be constructed and operated
lawfully.
Change of Control: Any circumstance in which the Ultimate Parents Ownership
Percentage ceases to be equal to or greater than fifty percent (50%).
COD Certification: Seller's certification of Commercial Operation in the form set
forth in Exhibit E-2, duly executed by Seller and the licensed professional
engineer.
Commercial Operation: The condition of the Plant, whereupon (a) it is certified
by Seller to be complete in accordance with manufacturers' recommendations
except for punch list items and (b) Seller has delivered to Buyer the COD
Certification.
Commercial Operation Date: The date upon which Commercial Operation first
occurs, as notified to Buyer in the COD Certification in accordance with Section
4.3(h).
Commercially Reasonable Efforts Standard: Has the meaning set forth in
Section 7.6.
Construction Start Date: The date on which Seller delivers to Buyer a copy of the
Notice to Proceed that Seller has delivered to the EPC Contractor for the Plant.
Contract Year: Successive periods of twelve (12) consecutive months, with the
first such period (i.e., the first Contract Year) beginning at 12:00 a.m. on the day
immediately following the Commercial Operation Date and ending at 11 :59:59
p.m. on the anniversary of the Commercial Operation Date, and each successive
twelve (12) consecutive month period thereafter until the end of the Term.
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AMENDED AND RESTATED
POWER PURCHASE AGREEMENT
[v. 3-2014]
Contractual Obligations: As to Seller, any material agreement, instrument or
undertaking to which Seller is a party or by which it or any of its Plant property is
bound.
Costs: With respect to a non-defaulting Party, reasonably documented (a)
brokerage fees, commissions and other similar third party transaction costs and
expenses reasonably incurred by such Party either in terminating any
arrangement entered into pursuant to this Agreement or entering into new
arrangements which replace this Agreement (including, in the case of Seller as the
Non-Defaulting Party, tax recapture costs) and (b) all reasonable attorneys' fees
and expenses incurred by the non-defaulting Party in connection with the
termination of this Agreement.
CPUC: Has the meaning set forth in the definition of EA Agency.
CRE: Has the meaning set forth in the Recitals.
Daily LD Amount: For each day for which delay liquidated damages are payable
under Section 9.3, an amount equal to the total amount of Development
Assurance required hereunder divided by 365.
Development Assurance: The amount to be posted or deposited by Seller in
accordance with Article IX of this Agreement, which amount shall be equal to
$400,000.00 (determined by taking the product of $20.00 per kW AC and 20,000
kW).
Discretionary Curtailment: Has the meaning set forth in Section 4.4(c).
Dispatch Down Period: The period of curtailment of delivery of Energy from the
Plant resulting from (a) curtailment ordered by the CAISO (whether directly or
through a Plant Scheduling Coordinator or the Participating Transmission Owner),
for any reason, including, but not limited to, any system emergency as defined in
the CAISO Tariff ("System Emergency"), any warning of an anticipated System
Emergency, or any warning of an imminent condition or situation which could
jeopardize the CAISO's or Participating Transmission Owner's electric system
integrity or the integrity of other systems to which the CAISO or Participating
Transmission Owner is connected; (b) curtailment ordered by the Participating
Transmission Owner or distribution operator (if interconnected to distribution or
sub-transmission system) for any reason, including but not limited to, (i) any
situation that affects normal function of the electric system including, but not limited
to any abnormal condition that requires action to prevent circumstances such as
equipment damage, loss of load, or abnormal voltage conditions, (ii) any warning,
forecast or anticipation of conditions or situations that jeopardize the Participating
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Transmission Owner's electric system integrity or the integrity of other systems to
which the Participating Transmission Owner is connected; or (iii) as a result of
scheduled or unscheduled maintenance or construction on the Participating
Transmission Owner's transmission facilities or distribution operator's facilities that
prevents the delivery or receipt of Energy to or at the Point of Interconnection; or
(c) curtailment in accordance with Seller's obligations under its interconnection
agreement with the Participating Transmission Owner or distribution operator;
provided, that any of the foregoing events (a) through (c) shall not have been
primarily caused by the acts or omissions of Buyer, in which case any such event
shall be ·deemed an Economic Curtailment. Notwithstanding the foregoing,
Dispatch Down Periods shall not include periods of curtailment of delivery of
Energy from the Plant resulting from circumstances commonly referred to as
economic curtailment ("Economic Curtailment"), where Buyer or its designee (as
the Scheduling Coordinator) submits an economic or similar bid in the applicable
CAISO market that results in otherwise available Energy not being scheduled or
awarded in such CAISO market.
EA Agency: Any local, state or federal entity, or any other Person, that has
responsibility for or jurisdiction over a program involving transferability of
Environmental Attributes, including, without limitation, the Clean Air Markets
Division of the United States Environmental Protection Agency (the "EPA"), the
California Energy Resources Conservation and Development Commission (the
"CEC"), the California Public Utilities Commission (the "CPUC"), the California Air
Resources Board ("CARB"), and any successor commission or agency thereto.
Buyer shall not be deemed to be an EA Agency.
Early Termination Date: Has the meaning set forth in Section 7.3.
Economic Curtailment: Has the meaning set forth at the end of the definition of
Dispatch Down Period.
Effective Date: Has the meaning set forth in the preamble of this Agreement.
Eligible Renewable Energy Resource or ERR: Has the meaning set forth in
California Public Utilities Code Section 399.12 and California Public Resources
Code Section 257 41, as either code provision is amended or supplemented from
time to time.
Energy: The electricity generated by the Plant and delivered to Buyer by the
Seller, pursuant to this Agreement, at the Point of Interconnection, as expressed in
units of kilowatt-hours (kWh) or megawatt-hours (MWh), including Test Energy.
Environmental Attributes: Any and all credits, benefits, emissions reductions,
offsets, and allowances, howsoever entitled, attributable to the generation from the
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Plant or Expansion Plant(s) (to the extent of sales to Buyer of Expansion Plant
Output pursuant to Section 2.5), and its displacement of conventional energy
generation. Environmental Attributes include, without limitation, Renewable
Energy Credits, and all of the following: (a) 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; (b) any avoided emissions of carbon dioxide
(C02), methane (CH4) and other greenhouse gases (GHGs) that have been
determined by the United Nations Intergovernmental Panel on Climate Change to
contribute to the actual or potential threat of altering the Earth's climate by trapping
heat in the atmosphere; and (c) 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 kWh basis and one Green Tag represents the
Environmental Attributes associated with one (1) MWh of energy. Environmental
Attributes do not include (i) any energy, capacity, reliability or other power
attributes from the Plant or Expansion Plant(s) or (ii) Incentives or any other tax
credits associated with the construction or operation of the Plant, Expansion
Plant(s), or any other associated contract or right, and other financial incentives in
the form of credits, rebates, reductions, or allowances associated with the Plant,
Expansion Plant(s), or any other associated contract or right, that are applicable to
a state or federal income taxation obligation.
Environmental Attributes Reporting Rights: All rights to report ownership of the
Environmental Attributes to any person or entity, under Section 1605(b) of the
Energy Policy Act of 1992 or otherwise.
Environmental Laws: Any and all federal, state and local laws, including
statutes, regulations, rulings, orders, administrative interpretations and other
governmental restrictions and requirements relating to the discharge of air
pollutants, water pollutants or process waste water or otherwise relating to the
environment or hazardous substances, as amended from time to time.
EPA: Has the meaning set forth in the definition of EA Agency.
EPC Contract: The Seller's engineering, procurement and construction contract
with the EPC Contractor.
EPC Contractor: An engineering, procurement, and construction contractor, or if
not utilizing an engineering, procurement, and construction contractor, the entity
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having le.ad responsibility for the management of overall construction activities,
selected by Seller, with substantial experience in the engineering, procurement,
and construction of utility-scale solar photovoltaic power plants.
Event of Default: Has the meaning set forth in Article VII.
Expansion Plant: Any expansion of the Plant from its Initial Capacity, or any
other solar photovoltaic electricity generating facility owned or controlled by Seller
or its affiliates, located at the Site. Each such expansion of the Plant or additional
facility shall be deemed to be an "Expansion Plant."
Expansion Plant Output: All capacity, energy, associated Environmental
Attributes, ancillary services, contributions towards resource adequacy or reserve
requirements (if any) and any other reliability or power attributes produced by
Seller at any Expansion Plant.
Expected Annual Net Energy Production: For each period of two successive
Contract Years, it is the sum of the expected annual net energy production in AC
Megawatt-hours for such two Contract Years, including the effects of first year
0.7% panel performance degradation and subsequent 0.7% panel annual
performance degradation, as represented in Exhibit G.
Extension Term: Has the meaning set forth in Section 2.1.
FERC: The Federal Energy Regulatory Commission and its successor
organization, if any.
Force Majeure Event: Any act or event that delays or prevents a Party from
timely performing obligations under this Agreement or from complying with
conditions required under this Agreement to the extent that such act or event is
reasonably unforeseeable and beyond the reasonable control of and without the
fault or negligence of the Party relying thereon as justification for such delay,
nonperformance, or noncompliance.
(a) Force Majeure Events typically include:
HOU:3428558.6
(i) acts of God or the elements, extreme or severe weather
conditions, explosion, fire, epidemic, landslide, mudslide,
sabotage, lightning, earthquake, flood or similar cataclysmic
event, acts of public enemy, war, blockade, civil insurrection,
riot, civil disturbance or strike or other labor difficulty caused
or suffered by a Party;
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(ii) any restraint or restriction imposed by law or by rule,
regulation or other acts or omissions of Governmental
Authorities, whether federal, state or local which by exercise
of due diligence and in compliance with applicable law a Party
could not reasonably have been expected to avoid and to the
extent which, by exercise of due diligence and in compliance
with applicable law, has been unable to overcome (so long as
the affected Party has not applied for or assisted such act by a
Governmental Authority); and
(iii) electric transmission interruptions or curtailments (not
including any such interruption or curtailment that results from
the negligence or contractual breach of the Party affected);
(b) The term "Force Majeure Event" does not include: (i) economic
conditions that render a Party's performance of this Agreement at
the Price unprofitable or otherwise uneconomic (including Buyer's
ability to buy Energy or Environmental Attributes at a lower price, or
Seller's ability to sell Energy or Environmental Attributes at a higher
price, than the Price); (ii) a governmental act by Buyer that delays or
prevents Buyer from timely performing its obligations under this
Agreement; (iii) a Plant equipment failure, except any such failure
caused by an event or circumstance that meets the requirements set
forth in this "Force Majeure Event" definition; (iv) failure or delay in
grant of Permits, except, in any case, if caused by an event or
circumstance that meets the requirements set forth in this "Force
Majeure Event" definition; (v) Discretionary Curtailment or
eEconomic Curtailment; or (vi) failures or delays by the Participating
TO, the CAISO in entering into, or performing under, any
agreements with Seller contemplated by this Agreement.
Forecasting Service: Has the meaning set forth in Section 4.4(d).
FPA: Has the meaning set forth in Section 8.1 (b)(i).
Full Capacity Deliverability Status: Has the meaning set forth in the CAISO
Tariff.
GAAP: Generally Accepted Accounting Principles.
Gains: With respect to a Party, an amount equal to the present value of the
economic benefit to it, if any (exclusive of Costs), resulting from the termination of
the Agreement for the remainder of the Term, determined in a commercially
reasonable manner. Factors used in determining economic benefit may include
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reference to information supplied by one or more third parties, including quotations
(either firm or indicative) of relevant rates, prices, yields, yield curves, volatilities,
spreads or other relevant market data in the relevant markets, market price
referent, market prices for a comparable transaction, forward price curves based
on economic analysis of the relevant markets, settlement prices for a comparable
transaction at liquid trading hubs (e.g., NYMEX), all of which should be calculated
for the remainder of the Term to determine the value of the Output. A Party shall
use commercially reasonable efforts to obtain third party information in order to
determine Gains and shall use information available to it internally for such
purpose only if it is unable, after using commercially reasonable efforts, to obtain
relevant third party information.
Governmental Authority: Any federal or state government, or political
subdivision thereof, including, without limitation, any municipality, township or
county, or any entity or authority exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government, including,
without limitation, any corporation or other entity owned or controlled by any of the
foregoing.
Incentives: Any and all tax credits (including Section 45 Credits and Section 48
Credits), deductions, allowances, depreciation and exemptions applicable to
federal, state and local taxes and any other payment, credit, deduction, benefit,
grant or monetary incentive provided by any federal, state or local governmental
authority or any Person, whether now in effect or arising in the future, in each case
arising from the activities contemplated by this Agreement, including any
"Renewable Energy Production Incentive Payments" from the U.S. Department of
Energy and any "Energy Investment Tax Credit" described in Section 48 of the
Internal Revenue Code of 1986, as it may be amended or supplemented from time
to time. Notwithstanding the foregoing, Incentives shall not include anything that
qualifies as Output as defined herein (including any Environmental Attributes).
Indemnified Party: Has the meaning set forth in Section 7.5.
Indemnifying Party: Has the meaning set forth in Section 7.5.
Initial Capacity: The installed capacity of the Plant, determined as of the
Commercial Operation Date, which shall not to be less than 19 MW AC or more
than 21 MW AC, and shall be determined based upon the sum of the nameplate
ratings (AC) of all Plant inverters. As of the Effective Date, the Parties expect that
the Initial Capacity shall be 20 MW AC.
Initial Term: Has the meaning set forth in Section 2.1.
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Interconnection Agreement: The agreement to be entered into among Seller,
the Participating TO and CAl SO pursuant to which Seller, the Participating TO and
CAISO set forth the terms and conditions for Interconnection of the Plant to the
Participating TO's system, as amended from time to time.
Lender(s): Any Person(s) providing money or extending credit (including any
capital lease) to or for the benefit ofSeller, including in the form of debt or tax
equity, for (a) the construction, refurbishment, repair or repowering of the Plant, (b)
the term or permanent financing of the Plant or any refinancing thereof, or (c)
working capital or other ordinary business requirements for the Plant. "Lender(s)"
shall not include any trade creditor(s) of Seller.
Losses: With respect to a Party, an amount equal to the present value of the
economic loss to it, if any (exclusive of Costs), resulting from the termination of this
Agreement for the remainder of the Term, determined in a commercially
reasonable manner. Factors used in determining the loss of economic benefit may
include reference to information supplied by one or more third parties, including
quotations (either firm or indicative) of relevant rates, prices, yields, yield curves,
volatilities, spreads or other relevant market data in the relevant markets, market
price referent, market prices for a comparable transaction, forward price curves
based on economic analysis of the relevant markets, settlement prices for a
comparable transaction at liquid trading hubs (e.g. NYMEX), all of which should be
calculated for the remainder of the Term to determine the value of the Output. A
Party shall use commercially reasonable efforts to obtain third party information in
order to determine Losses and shall use information available to it internally for
such purpose only if it is unable, after using commercially reasonable efforts, to
obtain relevant third party information. If the non-defaulting Party is the Seller,
then in addition to lost payments for Output pursuant to this Agreement, "Losses"
shall also include any associated loss of Incentives, including investment tax
credits and other lost tax benefits.
Milestones: Has the meaning set forth in Section 4.3(b).
MW: Megawatt (AC).
MWh: Megawatt-hour (AC).
NCPA: The Northern California Power Agency, a California joint powers agency.
Notice to Proceed: The notice provided by Seller to the EPC Contractor following
execution of the EPC Contract between Seller and such EPC Contractor and
satisfaction of all conditions to performance of such contract, by which Seller
authorizes such EPC Contractor to begin construction of the Project without any
delay or waiting periods.
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Operations Assumption Notice: Has the meaning set forth in Section 7.6(b).
Option Exercise Notice: Has the meaning set forth in Section 2.1 (b).
Outage: A physical state in which all or a portion of the Plant is unavailable to
provide Energy to the Point of Interconnection, or in which any portion of the
Participating TO System is unavailable to receive Energy, to the extent that the
unavailability affects the Participating TO System's ability to accept delivery of
Energy at the Point of Interconnection, whether planned or unplanned.
Output: All actual capacity of the Initial Capacity, and all associated Energy, as
well as the following (as associated with the Initial Capacity and/or associated
Energy): Environmental Attributes; ancillary services; contributions towards
resource adequacy or reserve requirements (if any); and any other reliability or
power attributes.
Participating TO or Participating Transmission Owner: Pacific Gas & Electric
Company, a California corporation, or any successor thereto acting as
transmission provider from the Site to the CAl SO grid.
Participating TO System: The transmission system owned by the Participating
TO.
Parties: Buyer and Seller, and their respective successors and permitted
assignees.
Party: Buyer or Seller, and each such Party's respective successors and
permitted assignees.
Performance Assurance: The amount to be posted or deposited by Seller in
accordance with Article IX of this Agreement, which amount shall be equal to
$400,000 (determined by taking the product of $20.00 per kW AC and 20,000 kW).
Permits:. All material federal, state or local authorizations, certificates, permits,
licenses and approvals required by any Governmental Authority for the
construction, ownership, operation and maintenance of the Plant, including any
such permits or approvals required under CEQA.
Person: An individual, partnership, corporation (including a business trust),
limited liability company, joint stock company, trust, unincorporated association,
joint venture, Governmental Authority or other entity.
PIRP: Has the meaning set forth in Section 4.4(a).
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Plant: The power generation facilities described in the Recitals to be constructed
and owned by Seller and located on the Site for the generation and delivery of
electricity, including the step-up transformer, revenue quality meter and all other
facilities up to the Point of Interconnection, but not including any Expansion Plant.
Point of Interconnection: The point on the electrical system where the Plant is
physically interconnected with the Participating TO System, which is anticipated to
be at the high side of Seller's step-up transformer at the Plant, located at CAISO
Queue Position number 625, will be at the tower (approximately) #74/4 on Pacific
Gas and Electric Company's (PG&E's) Henrietta-Tulare Lake ?OkV Transmission
Line in Kings County, CA ..
Price: The price set forth in Section 2.3.
Prudent Utility Practice: Those practices, methods and equipment, as changed
from time to time, that:
(a) when engaged in are commonly used in the United States of
America in prudent electrical engineering and operations to operate
solar photovoltaic plant generation electric equipment and related
electrical equipment lawfully and with safety, reliability, efficiency
and expedition; or
(b) in the exercise of reasonable judgment considering the facts known,
when engaged in could have been expected to achieve the desired
result consistent with applicable law, safety, reliability, efficiency and
expedition.
Prudent Utility Practices are not limited to an optimum practice, method, selection
of equipment or act, but rather are a range of acceptable practices, methods,
selections of equipment or acts.
QF: Has. the meaning set forth in Section 8.1.
REC or Renewable Energy Credit: Has the meaning set forth in California Public
Utilities Code Section 399.12(h) and CPUC Decision 08-08-028, as may be
amended from time to time or as further defined or supplemented by applicable
law.
Requirements of Laws: Collectively, any federal, state or local law, treaty,
franchise, rule or regulation, or any order, writ, judgment, injunction, decree, award
or determination of any arbitrator or court or other Governmental Authority, in each
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case applicable to or binding upon Seller or Buyer or any of its property or to which
Seller or Buyer or any of its respective properties are subject.
SCADA: Has the meaning set forth in Section 3.1.
Scheduling Coordinator: NCPA or any agent or successor thereof, or such other
scheduling coordinator as may be designated by Buyer in accordance with this
Agreement.
Section 45 Credits: Those tax credits available under Section 45 of Subtitle A,
Chap. 1A, Part IV of the Internal Revenue Code of 1986, as amended, or any other
similar state, federal or local tax credits, deductions, payments or benefits arising
from the generation and sale of electricity using qualifying renewable resources,
not including any Environmental Attributes.
Section 48 Credits: Those tax credits available under Section 48(a)(3)(A)(i) and
48(a)(5) of the Internal Revenue Code of 1986, as amended, or any other similar
state, federal or local tax credits, deductions, payments or benefits arising from the
investment in qualifying energy properties, not including any Environmental
Attributes.
Seller: EE Kettleman Land LLC, a Delaware limited liability company, and any
successor or permitted assignee.
Seller Excused Energy Amount: Means, for each Calculation Period, an amount
expressed in MWh, equal to the aggregate amount of reduction(s) in delivered
Energy during such Calculation Period as a result of Dispatch Down Periods,
Discretionary Curtailments, Economic Curtailments, Force Majeure Events,
Buyer's breach or default hereunder or failure to accept delivered Energy, or
outages to the local transmission or distribution system. No less frequently than
quarterly during each year, Seller shall calculate and provide notice to Buyer of the
then cumulative amount of the Seller Excused Energy Amount for such year, along
with an explanation in reasonable detail of the calculation thereof based on
historical Plant data, meteorological data, output projections (including by the
CAISO, if applicable) and other relevant data. The calculation shall be subjectto
review and approval by Buyer, not to be unreasonably withheld.
Shortfall: Has the meaning set forth in Section 9.4.
Site: The real property on which the Plant is to be built and located at 28990 Hwy
41, Kings County, CA 93239, California as more particularly described in Exhibit A,
or such other real property selected by Seller to which Buyer consents in writing
which consent shall not be unreasonably withheld.
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System Emergency: Has the meaning set forth in the definition of Dispatch Down
Period.
Term: Has the meaning set forth in Section 2.1.
Termination Payment means, with respect to the non-defaulting Party, the sum of
(a) the Losses or Gains, and Costs, expressed in U.S. Dollars, which such Party
incurs as a result of the termination of this Agreement pursuant to Section 7.3, plus
(b) all amounts then owed to the non-defaulting Party by the defaulting Party. If the
non-defaulting Party's aggregate Gains exceed its aggregate Losses and Costs, if
any, resulting from such termination of this Agreement, the amount for preceding
clause (a) shall be zero.
Test Energy: Energy (to the extent available) generated by the Plant and
delivered to the Point of Interconnection prior to the Commercial Operation Date.
Two Year Minimum Production Threshold: For each Calculation Period, an
amount (in MWhs) equal to seventy percent (70%) of the Expected Annual Net
Energy Production for such Calculation Period (i.e., for the avoidance of doubt, the
sum of 70% of the Expected Annual Net Energy Production for the first Contract
Year of such Calculation Period plus 70% of the Expected Annual Net Energy
Production for the second Contract Year of such Calculation Period).
Ultimate Parents: means: (a) CRE and (b) any successor entity to CRE with
which or into which CRE is merged, consolidated or combined, or which acquires
all or substantially all of the assets of CRE (as applicable).
Ultimate Parents Ownership Percentage: means the percentage of the
outstanding equity interests (inclusive of both voting and economic rights) in Seller
that are owned individually or jointly by the Ultimate Parents (together, in the
aggregate), directly or indirectly through one or more intermediate entities;
provided that in calculating such percentage owned by the Ultimate Parents, for all
purposes of the foregoing:
(a) any ownership interest in Seller held by one or both Ultimate Parents
indirectly through one or more intermediate entities shall be counted
towards such Ultimate Parents' ownership interest in Seller only if
such Ultimate Parents (together, in the aggregate) directly or
indirectly own fifty percent (50%) or more of the outstanding equity
voting and economic interests in each such intermediate entity; and
(b) ownership interests in Seller owned directly or indirectly by any
Lender (including any tax equity provider) shall be excluded from the
total outstanding equity interests in Seller.
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WECC: Has the meaning set forth in the definition of WREGIS.
WREGIS: The Western Renewable Energy Generation Information System, an
independent, renewable energy tracking system for the region, administered by
the Western Electricity Coordinating Council ("WECC"). WREGIS tracks
renewable energy generation from units that register in the system using verifiable
data and ·creates REGs for this generation. WREGIS was developed through a
collaborative process between the Western Governors' Association, the Western
Regional Air Partnership, and the CEC.
ARTICLE II
TERM, PURCHASE AND SALE
2.1 Term
(a) This Agreement shall be effective upon its execution by authorized
representatives of the Parties and, unless earlier terminated
pursuant to an express provision of this Agreement, shall continue
until the twenty-fifth (25th) anniversary of the Commercial Operation
Date ("Initial Term"). Buyer shall have the option to extend the Initial
Term for up to an additional five (5) year extension term following the
Initial Term ("Extension Term").
(b) Subject to this Section 2.1, if Buyer desires to extend this Agreement
into the Extension Term it shall exercise such option by a written
notice ("Option Exercise Notice") delivered to the Seller by not later
than three hundred sixty-five (365) days prior to the end of the Initial
Term.
(c) The Initial Term, together with the Extension Term, if any, is referred
to herein as the "Term." For the avoidance of doubt, the maximum
Term shall not extend past the thirtieth (30th) anniversary of the
Commercial Operation Date.
2.2 Purchase and Sale of the Output
(a) Commencing on the Commercial Operation Date and continuing
during the Term, Seller shall sell and deliver at the Point of
Interconnection, and Buyer shall purchase, accept from Seller at the
Point of Interconnection and pay for, the entire Output produced
during the Term pursuant to the terms of this Agreement. Prior to the
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Commercial Operation Date, Buyer shall purchase and accept from
Seller at the Point of Interconnection and pay for, the Output relating
to any Test Energy pursuant to the terms of this Agreement; provided
that the decision to produce and deliver Test Energy hereunder shall
be at the sole discretion of the Seller. All Test Energy shall be
scheduled in accordance with the procedures set forth in Exhibit D.
Seller shall not sell to any other party, and Buyer may claim credit for,
the Output, as may be available to Buyer from time to time.
(b) During the Term, Seller shall sell and transfer to Buyer, and Buyer
shall purchase and receive from Seller, all right, title and interest in
and to the Environmental Attributes associated with the Output, if
any, whether now existing or subsequently generated or acquired
(other than by direct purchase from a third party) by Seller, or that
hereafter come into existence, during the Term, as a component of
the Output purchased by Buyer from Seller hereunder. Subject to
Section 2.2(d), Seller agrees to transfer and make such
Environmental Attributes available to Buyer immediately to the fullest
extent allowed by applicable law upon Seller's production or
acquisition of the Environmental Attributes. Seller shall not assign,
transfer, convey, encumber, sell or otherwise dispose of all or any
portion of the Environmental Attributes to any Person other than
Buyer. Seller makes no written or oral representation or warranty,
either express or implied, regarding the current or future existence of
any Environmental Attributes.
(c) During the Term, Seller shall not report to any person or entity that
the Environmental Attributes granted hereunder to Buyer belong to
anyone other than Buyer, and Buyer may report under any program
that such Environmental Attributes purchased hereunder belong to
it.
(d) Seller will document the production of Environmental Attributes
under this Agreement by delivering with each invoice to Buyer such
attestations or other documents as may be required by Exhibit B.
Exhibit B shall be updated or changed by the Parties, as necessary,
to ensure that Buyer receives full and complete title to, and the ability
to record with any EA Agency as its own, all of the Environmental
Attributes purchased hereunder. At Buyer's request, the Parties,
each at their own expense, shall execute all such documents and
instruments in order to transfer the Environmental Attributes,
specified in this Agreement, to Buyer or its designees, as Buyer may
reasonably request. In the event of the promulgation of a scheme
involving Environmental Attributes administered by an EA Agency,
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upon notification by an EA Agency that any transfers contemplated
by this Agreement will not be recorded, the Parties shall promptly
cooperate in taking all reasonable actions necessary so that such
transfer can be recorded. Each Party shall promptly give the other
Party copies of all documents it submits to the EA Agency to
effectuate any transfers.
(e) As between the Parties, Seller shall be deemed to be in exclusive
control (and responsible for any damages or injury caused thereby)
of all Energy prior to the Point of Interconnection, and Buyer shall be
deemed to be in exclusive control (and responsible for any damages
or injury caused thereby) of all Energy at and from the Point of
Interconnection. Seller shall deliver all Energy and other Output free
and clear of all liens created by any Person other than Buyer. Title to
and risk of loss as to all Energy shall pass from Seller to Buyer at the
Point of Interconnection.
2.3 Price
Subject to any performance related adjustments under the provisions of
Section 9.4, during the period of delivery of any Test Energy and the entire
Term, for Energy delivered or tendered to Buyer at the Point of
lnt.erconnection, Buyer shall pay Seller a price per MWh of Energy ("Price")
equal to Seventy-Seven Dollars ($77.00) per MWh. The Price shall be the
total compensation owed by Buyer for the Output delivered or tendered to
Buyer during the period of delivery of any Test Energy and during the Term.
2.4 Tax Credits and Incentives
Buyer agrees and acknowledges that all Incentives shall be owned by
Seller. Buyer shall not claim Incentives. Buyer agrees to cooperate with
Seller, as may be necessary to allow maximization of the value of, and
realization of, all Incentives; provided that Buyer shall not be required to
incur additional costs or accept any diminution in value of its rights under
this Agreement or of the Output purchased hereunder. In addition, Buyer
shall not take any action (except as otherwise permitted under this
Agreement), that would in any way reduce or eliminate the availability to
Seller of any Incentives, including the Section 45 Credits and the Section 48
Credits, and Buyer shall forego any credits or benefits available to it (other
than Environmental Attributes), including rights to purchase of Test Energy, to
the extent necessary to allow Seller to obtain the full benefit of the Incentives,
but in no event shall Buyer be required to forego receipt of Output after the
Commercial Operation Date.
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I
··-I
2.5 Right of First Refusal for Expansion Plant and Expansion Plant
Output
(a) During the Term, Seller may, in exerc1smg its sole discretion,
determine, from time to time, to develop, finance, construct and/or
operate an Expansion Plant. Each time such a determination is
made, Seller shall notify Buyer of such determination and shall offer,
in writing, to sell the Expansion Plant Output to Buyer. The offer shall
include the price to be paid by Buyer for the Expansion Plant Output,
the term of the proposed power purchase agreement, and the other
principal terms and conditions of the proposed sale. If Buyer wishes
to accept such offer to purchase all (but not less than all) of the
Expansion Plant Output, Buyer shall so notify Seller within sixty (60)
days of its receipt of such offer. Buyer and Seller shall promptly
thereafter enter into good faith negotiation of a definitive power
purchase agreement, incorporating the terms of such offer. Until a
power purchase agreement for an Expansion Plant is executed,
Seller's proposal, accepted by Buyer (including any modifications
agreed upon in writing by both Parties), shall control all dealings
between the Parties relating to the Expansion Plant. Should any
issue arise that is not covered by such documentation, the terms of
this Agreement shall apply.
(b) If Buyer does not accept Seller's offer to purchase the Expansion
Plant Output within sixty (60) days of receipt of Seller's offer, Seller
shall be deemed authorized to offer to sell that portion of the
Expansion Plant Output to one or more third parties at a price and on
other terms and conditions which, taken as a whole, are at least as
favorable to Seller as the price and other terms and conditions set
forth in Seller's offer to Buyer. If Seller offers to disaggregate the
Expansion Plant Output for the purpose of selling the same to
multiple independent buyers, Seller shall notify Buyer, in writing, of
the terms and conditions of such offers, and Buyer shall again have
the right of first refusal consistent with the terms set forth above for
each of the lesser amounts being offered to the third parties. If Buyer
does not purchase the Expansion Plant Output and Seller sells such
Expansion Plant Output to a third party, Seller shall promptly certify,
in writing, to Buyer that the terms and conditions of sale of such
Expansion Plant Output to such third party, taken as a whole, are at
least as favorable to Seller as the price and other terms and
conditions set forth in Seller's offer to Buyer. Upon the sale of such
Expansion Plant Output in compliance with this Agreement, Buyer
shall have no further rights to be offered or to purchase such
Expansion Plant Output. Buyer's refusal, in writing, of the Expansion
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Plant Output from one Expansion Plant shall not affect Buyer's right
to purchase the Expansion Plant Output from a subsequently
developed Expansion Plant under the terms of this Agreement.
Seller shall not sell or provide the Expansion Plant Output to any
third party, unless Seller can do so without compromising in any
material way its ability to provide the Output to Buyer hereunder. The
materiality of any such impact shall be determined by Buyer, acting
in its reasonable discretion, such determination to be provided within
45 days, as the same may be extended by mutual written agreement
of the Parties.
2.6 Refurbishment of Plant
During the Term, Seller may refurbish the Plant, alter components of the
Plant, replace components of the Plant, add additional solar modules or
inverters, or replace solar modules or inverters with more powerful solar
modules or inverters, etc. in order to increase the Plant estimated peak AC
capability up to the lesser of the Initial Capacity or to the amount allowed by
the Interconnection Agreement. However, Seller may not perform any
refurbishment to increase capacity higher than the Initial Capacity without
the prior consent of Buyer not to be unreasonably withheld, and Buyer has
the right, in its sole discretion, to accept or decline to permit any such
refurbishment that may increase the Initial Capacity.
ARTICLE Ill
METERING AND BILLING
3.1 Metering Requirements
The transfer of Energy from Seller to Buyer shall be measured by revenue
quality metering equipment at the Point of Interconnection or another
nearby location reasonably acceptable to the Parties. Such metering
equipment, including any equipment required for communicating meter
data (e.g., a dedicated data line) to Buyer or the CAISO, shall be selected,
provided, installed, owned, maintained and operated, at Seller's sole cost
and expense, by Seller or its designee in accordance with applicable
CAl SO rules. Seller shall exercise reasonable care in the maintenance and
operation of any such metering equipment, and shall test and verify the
accuracy of each meter at least annually. Seller shall inform Buyer in
advance of the time and date of these tests, and shall permit Buyer to be
present at such tests and to receive the results of such tests. Subject to
Buyer paying the cost of any update or upgrade to such metering
equipment pursuant to a new requirement of the CAISO, the Participating
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TO or any other Governmental Authority, adopted after the Commercial
Operation Date, each of Seller's meters shall be accurate to the metering
specifications then in effect for CAISO meter accuracy. Seller shall further
install and maintain all equipment and data circuits necessary to transmit all
monitored real time supervisory control and data acquisition ("SCADA")
system data and real time data from the CAISO meter to the CAISO and
Scheduling Coordinator, while adhering to both CAISO and Scheduling
Coordinator's communications protocols. Seller shall provide Buyer with a
copy of each certificate of compliance issued by CAISO, if any.
Buyer and Scheduling Coordinator shall be provided access to all
monitored SCADA points to be used at their discretion in real time
monitoring. Buyer, at its sole cost and expense, may install and maintain
check meters arid all associated measuring equipment necessary to permit
an accurate determination of the quantities of Energy delivered under this
Agreement, provided the referenced equipment does not interfere with
Seller's metering equipment. Seller shall permit Buyer or Scheduling
Coordinator or its agent access to Seller's Plant for the purpose of installing
and maintaining such check meters. Seller shall submit to the CAISO, or
allow the CAl SO to retrieve, any meter data required by the CAl SO related
to the Plant output in accordance with the CAISO's settlement and billing
protocol and meter data tariffs. Buyer shall have reasonable access to
relevant meters and associated facilities, as well as real time access to all
meter data, as is necessary for Buyer or Scheduling Coordinator or its agent
to perform its duties as scheduling coordinator and comply with the
requirements of the CAl SO Tariff.
3.2 Billing
Seller shall provide to Buyer on or before the tenth (1oth) day of each month
an invoice for the prior month based upon meter data for Energy delivered
in such calendar month (taking into account any line losses to the Point of
Interconnection), enclosing reasonably appropriate supporting CAISO
documentation and any corresponding attestation that may be required
pursuant to Section 2.2(d). Such invoice may be transmitted by e-mail to
settlements@ncpa.com, or to any other e-mail address designated, in
writing, by Buyer, with a copy to be delivered in the mail of the United States
Postal Service or other entity to the notice address designated below.
Should either Seller or Buyer determine at a later date, but in no event later
than two (2) years after the original invoice date, that the invoice amount
was incorrect, that Party shall promptly notify, in writing, the other Party of
the error. If the amount invoiced was lower than the amount that should
have been invoiced, then Buyer shall, upon receiving verification of the
error and supporting documentation from Seller, pay any undisputed
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portion of the difference within thirty (30) days of receipt of verification. If
the amount invoiced was higher than the amount that should have been
invoiced, then Seller shall, upon receiving verification of the error and
supporting documentation from Buyer, pay any undisputed portion of the
difference within thirty (30) days of receipt of verification. Any such adjusted
amount owing by Seller or Buyer shall be subject to the interest rate as
designated in Section 3.3, running from the original due date of payment.
3.3 Payment
For Energy delivered to Buyer pursuant to this Agreement, Buyer or its
agent shall pay Seller by electronic transfer of funds by the later of the 20th
day of the month or the 1oth day after the invoice is received in accordance
with Section 3.2. If such due date falls on a weekend or legal holiday, such
due date shall be the next day which does not fall on a weekend or legal
holiday. Payments made after the due date shall be considered late and
shall bear interest on the unpaid balance at an annual rate equal to two
percent (2%) plus the average daily prime rate as determined from the
"Money Rates" section of The Wall Street Journal for the days of the late
payment period multiplied by the number of days elapsed from and
including the day after the due date, to and including the payment date.
Interest shall be computed on the basis of a 365-day year. In the event this
index is discontinued or its basis is substantially modified, the Parties shall
agree on a substitute equivalent index. Should Buyer in good faith dispute
the amount of an invoice, Buyer or its agent may withhold such disputed
portion of the invoice until the dispute is resolved by mediation, arbitration or
other permissible method. Such disputed amounts shall bear interest at the
interest rate described above. Failure of Buyer or its agent to withhold any
amount shall not constitute a waiver of Buyer's right to challenge such
amount. Both Parties shall maintain all records relating to the other Party or
this Agreement for a minimum of two (2) years after the expiration or earlier
termination of the Term, and shall permit the other Party, upon reasonable
notice, to inspect and audit such records as the requesting Party deems
reasonably necessary to protect its rights.
ARTICLE IV
SELLER'S .OBLIGATIONS
4.1 Development, Finance, Construction and Operation of the Plant
During the Term, Seller shall:
(a) Develop, finance and construct the Plant.
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(b) Provide Buyer with access to a "real time" Plant monitoring system
(which, at a minimum, shall provide "real time" information regarding
the net output of the Plant) that is anticipated to be internet
protocol-based and include any applicable alarms required by
Prudent Utility Practice.
(c) Seek, obtain, maintain, comply with and, as necessary, renew and
modify from time to time, all Permits, certificates or other
authorizations, including preparation of any and all necessary CEQA
documentation, which are required by any Requirements of Laws or
Governmental Authority as prerequisites to Seller's performance of
this Agreement and to meeting Seller's obligation to operate the
Plant consistently with the terms of this Agreement.
(d) Operate, maintain, and repair the Plant in accordance with this
Agreement, all Requirements of Laws applicable to Seller or the
Plant, Contractual Obligations, Permits and in accordance with
Prudent Utility Practice, including with respect to efforts to maintain
availability of the Expected Annual Net Energy Production subject to
normal system wear-and-tear and panel degradation factor.
(e) Obtain and maintain the policies of insurance in amounts and with
coverages as set forth in Exhibit C.
(f) Operate and maintain in a manner consistent with Prudent Utility
Practice the facilities it will own and otherwise cooperate with the
Participating TO in the physical interconnection of the Plant to the
Participating TO System in accordance with the Interconnection
Agreement.
(g) By October 1st of each year of the Term, provide each of Buyer and
Scheduling Coordinator with an annual projection of scheduled
Outages for the following calendar year. Should Seller make any
changes to such projection, it will notify Buyer and Scheduling
Coordinator of such changes at least fourteen (14) days in advance
of any newly scheduled or rescheduled Outage. If Buyer requests a
change to the scheduled date of any Outage (including to a date set
forth in a change notice from Seller), Seller shall consider such
request in good faith and notify Buyer of its decision within seven (7)
days of receipt of Buyer's request. In ·no instance other than
Saturdays, Sundays and federal holidays during the period of
reliability accounting (initially the period between June 1st and
September 30th but subject to changes selected at Buyer's
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reasonable discretion for conforming to CAISO availability
assessment) will Seller schedule Outages of more than twenty-four
(24) hours during the Term. In connection with any Outage in excess
of one (1) MW of Plant capacity, whether a scheduled or
unscheduled Outage, Seller shall notify Buyer and Scheduling
Coordinator, as soon as practicable, of the percentage of Plant
(based on percentage of Energy loss) expected to be out of service
and how long the Outage is expected to last. If the Outage is total
and is due to failure of the Plant rather than the transmission and
distribution system beyond the Point of Interconnection, Seller shall
give Buyer and Scheduling Coordinator at least four (4) hours' prior
notice before re-energizing the Plant. In addition, Seller will comply
with Scheduling Coordinator's scheduling protocols, as may be
changed from time to time. A copy of the current version of
Scheduling Coordinator's scheduling protocols, which the Parties
agree are reasonable, is attached as Exhibit D; provided, during the
Term, Buyer shall provide Seller with any revised scheduling
protocols to the extent Scheduling Coordinator provides the same to
Buyer. ·
(h) Negotiate and enter into an Interconnection Agreement with the
Participating TO to enable Seller to transmit Energy to the Point of
Interconnection and into the CAISO-controlled grid. Seller shall be
responsible for and pay all costs and charges arising under the
Interconnection Agreement in compliance with the Interconnection
Agreement and assoCiated rules and requirements; provided that if
Buyer chooses in its sole discretion to request Seller to pursue Full
Capacity Deliverability Status for the Plant and its associated Output
during the Term, Seller shall take all reasonable actions to pursue
such status and (1) all costs associated with any transmission
upgrades (including reasonable expenses of Seller) to enable Full
Capacity Deliverability Status for the Plant shall be the responsibility
of Buyer and (2) to the extent that Seller thereafter receives from the
Participating TO or CAl SO any reimbursement for such costs funded
by Buyer, then Seller shall forward such reimbursed amounts to
Buyer.
(i) Negotiate and enter into a Participating Generator Agreement and a
Meter Service Agreement for CAISO Metered Entities with the
CAISO, the load control area operator for the Participating TO
System, to which the Plant is interconnected. Buyer shall pay for or
reimburse Seller for any such costs or charges associated with these
agreements, except to the extent such cost or charge is required to
be paid by Seller under this Agreement in Sections 3.1 and 4.1 (h).
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Seller shall cooperate with Buyer to minimize any such costs as are
to be reimbursed by Buyer.
0) · Coordinate all Plant start-ups and shut-downs, in whole or in part,
with Buyer in accordance with CAISO scheduling protocols and the
reasonable protocols established by Buyer that are not inconsistent
with the CAISO Tariff and CAISO procedures.
(k). Fund and maintain the Development Assurance to assure Seller's
timely development of the Plant, including the performance of all
construction tasks, and fund and maintain the Performance
Assurance to assure Seller's delivery of the Output to Buyer in
accordance with Article IX.
(I)· During the Term, Seller shall take all actions reasonably necessary
to maintain the Plant's status as ·an Eligible Renewable Energy
Resource.
4.2 General Obligations
(a) Seller shall obtain in its own name and at its own expense any and all
pollution or environmental credits or offsets necessary to operate the
Plant in compliance with the Environmental Laws
(b) Seller shall keep complete and accurate operating and other records
and all other data for the purposes of proper administration of the
Agreement, including such records as may be required by any
Governmental Authority or Prudent Utility Practice.
(c) Seller shall continue to (i) preserve, renew and keep in full force and
effect its organizational existence and good standing, and take all
reasonable action to maintain all applicable Permits, rights,
privileges, licenses and franchises necessary or desirable in the
ordinary course of its business; (ii) comply with all Requirements of
Laws applicable to Seller or the Plant; and (iii) comply with all
Contractual Obligations related to the operation and maintenance of
the Plant.
(d) Seller shall provide to Buyer such other information regarding the
permitting, engineering, construction or operations of the Plant as
Buyer may from time to time reasonably request, subject to licensing
or other restrictions of Seller or a third party with respect to
confidentiality, disclosure or use; provided, nothing herein will limit
Buyer's right to agree to confidentiality or sign a confidentiality
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agreement in connection therewith before acquiring knowledge of
such information.
(e) Seller shall enter into any agreements with the CAISO required by
the CAISO for generators delivering power into the
CAISO-controlled grid. Except for such costs and charges as are
expressly identified in this Agreement as Seller's costs, Buyer shall
reimburse Seller for all costs and charges under such agreements.
Seller shall cooperate with Buyer to minimize any such costs as are
to be reimbursed by Buyer.
(f) Within thirty (30) days after execution of this Agreement, Seller shall
provide to Buyer a copy of Seller's most current annual financial
statements available. Thereafter, from time to time at the request of
Buyer (no more frequently than annually), Seller shall provide to
Buyer a copy of Seller's most current annual financial statements,
within four (4) months following the end of each fiscal year of Seller,
including audited statements prepared in accordance with GAAP if
available, including for all periods of time during the Term after the
Plant achieves Commercial Operation. Additionally, by no later than
forty-five (45) days after the end of each fiscal quarter, Seller shall
also provide an unaudited quarterly financial statement of Seller.
Such quarterly financial statements shall be certified by an officer of
Seller as fairly presenting the financial condition of Seller subject
only to what· would typically be included in year-end audit
adjustments and footnotes.
(g) Within fifteen (15) days of the later of (i) obtaining the authority to
construct for the Plant from the applicable Governmental Authority or
(ii) Seller's receipt of the system impact and facility cost studies from
the Participating TO, Seller shall specify the then expected Initial
Capacity of the Plant (which shall be subject to the limits set forth in
the definition of Initial Capacity). At that time, Seller shall provide to
Buyer a letter stating the then expected Initial Capacity of the Plant in
MW AC and specifying other material key Plant design details.
(h) At the reasonable request of Buyer during the Term Seller shall in
good faith evaluate and consider proposals for adding a battery
storage unit to the Plant, provided that Seller shall not be required to
add any such storage unit to the Plant unless and until Seller, Buyer
and any Lenders each (in their sole and absolute discretion)
approves the technical details of such unit and appropriate
amendments to this Agreement related to such unit, including
additional compensation related to such unit.
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4.3 Construction Milestones
(a) The Parties agree that time is of the essence in the performance of
Seller's obligations under this Agreement, and certain milestones
("Milestones") for the development and construction of the Plant
must be achieved in a timely fashion or Buyer shall suffer damages
which are difficult to estimate with reasonable certainty. Seller shall
provide Buyer with documentation satisfactory to Buyer, acting in the
reasonable exercise of its discretion, to support the achievement of
Milestones by the dates set forth below.
(b) The following events are all of the Milestones:
(i) By the Effective Date, Seller shall have obtained Site Control.
(ii) By August 31, 2014, Seller shall have obtained all Permits
necessary, in final form, to commence construction of the
Plant.
(iii) By December 1, 2014, Seller shall have commenced
construction of the Plant.
(iv) By June 1, 2015, Seller shall achieve Commercial Operation.
(c) Starting on the Effective Date, Seller shall provide to Buyer written
monthly progress reports concerning the progress towards
completion of the Milestones which shall be in form and substance
substantially in the form set forth in Exhibit E-1, and include such
additional information as reasonably required by Buyer in its sole
discretion. In addition, within five (5) business days of the
completion of each Milestone, Seller shall provide a certification tp
Buyer (along with any supporting documentation), stating Seller's
achievement or satisfaction of the Milestone. Seller shall provide to
Buyer additional information concerning Seller's progress towards,
or confirmation of, achievement of the Milestones, as Buyer may
reasonably request from time to time.
(d) Upon becoming aware that it will, or is reasonably likely to, fail to
achieve the Milestone by the required date, for any reason including
Force Majeure Event, Seller shall so notify Buyer, in writing, as soon
as is reasonably practical. Such notice shall provide information
regarding the cause of the delay, provide a revised estimated date
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for achievement of the Milestone, .and otherwise describe Seller's
plan for meeting the Milestone.
(e) In the event that: a Force Majeure Event causes any delay to the
achievement of any Milestone then, and in any such case, each
Milestone deadline may be extended in Buyer's reasonable
discretion by that number of days the applicable Force Majeure
Event actually delays completion of such Milestone.
Notwithstanding the foregoing, (1) in no event shall the combined
extensions under this Section 4.3(e) for any individual Milestone
arising from Force Majeure Events exceed six (-6) months in the
aggregate, and (2) if on any given day two or more events cause
delay to a Milestone at the same time (i.e., occur concurrently),
Seller shall only be entitled to one day of delay for such day.
(f) Should Seller fail to satisfy the Milestone set forth in Section
4.3(b)(iii) for more than twelve (12) months, Buyer may terminate this
Agreement upon written notice to Seller of such termination.
(g) Seller covenants that it will diligently pursue to completion the
Milestone as set forth in Section 4.3(b).
(h) Seller shall provide written notice to Buyer thirty (30) days in advance
of the anticipated Commercial Operation Date, and shall provide
Buyer with reasonable written weekly updates thereafter on the
status of Seller's progress in achieving Commercial Operation until
the week preceding the Commercial Operation Date. On the
Commercial Operation Date, Seller shall deliver to Buyer by
facsimile, with originals to follow by hand-delivery, courier or mail
service, the COD Certification signifying achievement of Commercial
Operation.
4.4 Obligation to Schedule and Deliver
(a) Scheduling. During the Term, Buyer shall provide (or cause to be
provided), at its own expense, all Scheduling Coordinator services
necessary for both the delivery and receipt of Energy (from the Plant)
at the Point of Interconnection in accordance with all applicable
CAISO and related protocols. Seller shall sign and deliver
documentation, if any, that are required to (i) designate and
otherwise verify that Buyer or its designee is Scheduling Coordinator
on behalf of Seller for the Plant and (ii) allow Buyer to perform its
various Scheduling Coordinator duties.
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Buyer shall appoint NCPA to act as Scheduling Coordinator for
Buyer but reserves the right to substitute any other qualified entity as
Scheduling Coordinator for the Plant upon reasonable advance
notice to Seller.
(b) General Confirmations. The Parties acknowledge their general
understanding and intent, subject to the terms and conditions of this
Agreement, as follows:
(i) Seller shall use all reasonable efforts consistent with Prudent
Utility Practice to maximize the output of Energy from the
Plant;
(ii) Subject to Buyer's role as Seller's Scheduling Coordinator
and the other provisions hereof, Seller shall be responsible to
arrange for, and shall bear all risks associated with, delivery of
all Plant Energy to the Point of Interconnection;
(iii) Buyer shall be obligated to pay for all Energy delivered to the
Point of Interconnection; and
(iv) Buyer shall be responsible to arrange for, and shall bear all
risks associated with, acceptance and transmission of Energy
at and from the Point of Interconnection.
(c) Buyer Curtailment Rights.
HOU:3428558.6
(i) Mandatory Dispatch Down Periods. Seller shall reduce
delivery amounts as directed by the CAISO, Participating TO,
or any successor thereof during any Dispatch Down Period.
(ii) Discretionary Curtailments and Economic Curtailment.
(A) Buyer may require Seller to curtail deliveries of Energy
from the Plant to the Point of Interconnection for any reason in
Buyer's reasonable discretion (a "Discretionary
Curtailment") by delivering a dispatch notice to Seller,
provided that (1) such Discretionary Curtailments shall be
limited to a quantity of not more than 1 0% of the Expected
Annual Net Energy Production in each Contract Year; and (2)
the dispatch notices shall be consistent with the operational
characteristics set forth in Exhibit D. Seller shall reduce the
Plant's delivered Energy by the amount and for the period set
forth in each dispatch notice.
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(B) In addition to paying Seller for all Energy actually
delivered hereunder, Buyer shall pay Seller, on the date
payment would otherwise be due in respect of each month in
which any Discretionary Curtailment or Economic Curtailment
occurred, an amount equal to the product of (1) the amount of
Energy that Seller could reasonably have delivered to Buyer
but for such Discretionary Curtailment and/or Economic
Curtailment and (2) the Price.
(iii) Failure to Comply. If Seller fails to comply with a dispatch
notice that meets the requirements for a Discretionary
Curtailment, then, for the amount of Energy (in MWhs) that
the Plant delivered in contradiction to the dispatch notice,
Seller shall pay Buyer the greater of:
(A) 200% of the aggregate Price for such MWhs plus any
penalties or other charges actually incurred resulting
from Seller's failure to comply with the dispatch notice;
and
(B) the CAISO's Real-Time Market (as defined in the
CAISO Tariff) price for the applicable PNode for such
MWhs plus-any penalties or other charges actually
incurred resulting from Seller's failure to comply with
the dispatch notice.
(d) Forecast Fee. The Parties acknowledge that PIRP or its successor
program, by means of a contract with a forecasting service (the
"Forecasting Service") develops high quality forecasts for
day-ahead and/or hour ahead scheduling for CAISO operations.
Buyer, or Scheduling Coordinator, shall bear all forecast fees
imposed by CAISO for use of the Forecasting Service up to
$0.1 0/MWh. If such fees exceed this amount, the Parties will each
be responsible for 50% of such excess.
HOU:3428558.6
With respect to the Energy to be sold under this Agreement:
(i) If requested, Seller agrees to provide the Forecasting Service
with sufficient data to support a reasonably accurate and
unbiased forecast; and
(ii) Buyer, as part of its Scheduling Coordinator services, will use
the forecasts developed by the Forecasting Service, which
are most applicable to the Plant as the Plant's "Energy
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AMENDED AND RESTATED
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Schedule" for the CAISO Day-Ahead and/or Hour-Ahead
markets.
ARTICLEV
BUYER'S OBLIGATIONS
5.1 Delivery and Transmission
Except for Seller's obligations pursuant to Sections 3.1, 4.1 (h), 4.1 (i) and
4.4(d) , Buyer shall be solely responsible for paying costs and charges
associated with the delivery and receipt of Energy under this Agreement at
the Point of Interconnection and for the transmission and delivery of Energy
from the Point of Interconnection to any other point downstream of the Point
of Interconnection (including, without limitation, transmission costs and
charges, competition transition charges, applicable control area service
charges, transmission congestion charges, inadvertent energy flows, any
other CAISO charges related to the transmission of such Energy by the
CAl SO and any charge assessed or collected in the future pursuant to any
utility tariff or rate schedule, however defined, for transmission or
transmission-related service rendered by or for any transmission-owning or
operating entity). Buyer shall be responsible for the Scheduling
Coordinator function. The NCPA, acting on behalf of Buyer, shall be
Scheduling Coordinator for the transmission of Energy from the Plant in
accordance with applicable CAISO rules. Buyer's duties as Scheduling
Coordinator shall be limited to those duties as are specifically required of
scheduling coordinators in the CAISO Tariff and the CAISO protocols.
Commercial arrangements for such transmission and delivery services will
be coordinated and settled by the Scheduling Coordinator directly with the
CAISO or other third parties. At the option of Buyer, the Plant may be
included within NCPA's metered sub-system in connection with the
scheduling of power over the CAISO grid and related functions; provided
that such inclusion shall have no adverse effect on the Plant's operations or
Seller (or any such effect shall be fully mitigated by Buyer). Seller will do all
things reasonably needed to allow Buyer to comply with any obligations,
and minimize any potential liability, under the CAl SO Tariff; provided, that if
such actions require any actions beyond the giving of notices, then Buyer
shall reimburse Seller for all reasonably incurred out-of-pocket costs and
charges of such actions. If and to the extent that Seller fails to comply with
the notice provisions in Section 4.1 (g) concerning Outages or with its
obligations as outlined in the previous sentence, Seller shall be wholly
responsible for all imbalances, deviations, or any other CAISO charges or
penalties associated with such Outage or CAISO Tariff obligation (it being
understood, however, that all such charges and penalties (if any) shall be
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borne by Buyer if Seller has not failed to comply with such provisions or
obligations).
5.2 Taxes
Buyer shall pay and be fully responsible for any sales, use, gross receipts,
utility or other taxes, assessments or fees, if any, incurred or imposed on
the sale or transfer of Output from Seller to Buyer under this Agreement.
Buyer shall not be responsible for any taxes measured on the net income of
Seller or ad valorem taxes paid by Seller that are associated with Seller's
rights and privileges relating to the Site.
5.3 Notification of Transmission Outages
Buyer will exercise reasonable efforts to provide Seller with as much
advance notice as practicable of any Outage on the Participating TO
system or other transmission or delivery facilities which is reasonably likely
to result in a Dispatch Down Period.
ARTICLE VI
FORCE MAJEURE
6.1 Remedial Action
Subject to the limitation on extensions of Milestones set forth in Section
4.3(e), a Party shall not be liable to the other Party if the Party is prevented
from performing its obligations hereunder due to a Force Majeure Event.
The Party rendered unable to fulfill an obligation by reason of a Force
Majeure Event shall take all action necessary to remove such inability with
all due speed and diligence. The non-performing Party shall be prompt and
diligent in attempting to mitigate the effects of and to remove the cause of its
failure to perform, and nothing herein shall be construed as permitting that
Party to continue to fail to perform after said cause has been removed.
Notwithstanding the foregoing, the existence of a Force Majeure Event shall
not excuse any Party from its obligations to make payment of amounts due
hereunder. ·
6.2 Notice
In the event of any delay or nonperformance resulting from a Force Majeure
Event, the Party suffering the Force Majeure Event shall, as soon as
practicable under the circumstances, notify the other Party, in writing, of the
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nature, cause, date of commencement thereof and the anticipated extent of
any delay or interruption in performance.
6.3 Termination Due To Force Majeure Event
If a Party is prevented in a material respect from performing any material
obligations under this Agreement due to a Force Majeure Event lasting for a
period of twelve (12) consecutive months or longer, the unaffected Party
may terminate this Agreement, without liability of either Party to the other,
upon thirty (30) days' prior written notice at any time following expiration of
such period of twelve (12) consecutive months, provided that the Force
Majeure Event is continuing at the time of such notice.
ARTICLE VII
DEFAULT/REMEDIES/TERMINATION
7.1 Events of Default by Buyer
The following shall each constitute an "Event of Default" by Buyer:
(a) Buyer breaches any material obligation (other than one covered by
Section 7.1 (b) or (c) of this Agreement) and fails to cure such breach
within thirty (30) days after written notification of breach by Seller or,
if the breach cannot be cured within thirty (30) days, such longer
period as may be necessary to cure such breach as long as Buyer is
exercising diligent efforts to cure such breach.
(b) Buyer fails to make any payment due under this Agreement within
thirty (30) days after written notice that such payment is due.
(c) The initiation of an involuntary proceeding against Buyer under the
bankruptcy or insolvency laws, which involuntary proceeding
remains unresolved for sixty (60) consecutive days, or in the event of
the initiation by Buyer of a voluntary proceeding under the
bankruptcy or insolvency laws.
7.2 Events of Default by Seller
The following shall each constitute an "Event of Default" by the Seller:
(a) · Seller breaches any material obligation (other than ones covered by
Sections 7.2(b), (c), (d), (e) or (f) of this Agreement or for which a
remedy is specified) and fails to cure such breach within thirty (30)
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days after written notification of breach by Buyer or, if the breach
cannot be cured within thirty (30) days, such longer period as may be
necessary to cure such breach as long as Seller is exercising diligent
efforts to cure such breach.
(b) Seller fails to make any payment due under this Agreement within
thirty (30) days after written notice that such payment is due.
(c) The initiation of an involuntary proceeding against Seller under the
bankruptcy or insolvency laws, which involuntary proceeding
remains unresolved for sixty (60) consecutive days, or in the event of
the initiation by Seller of a voluntary proceeding under the
bankruptcy or insolvency laws.
(d) Except as otherwise excused under this Agreement, Seller sells or
transfers the Output (or any individual component thereof) or
Expansion Plant Output (or any individual component thereof) or the
right to the Output (or any individual component thereof) or
Expansion Plant Output (or any individual component thereof), to the
extent that such Expansion Plant Output is purchased by Buyer, to
any Person other than Buyer.
(e) Seller fails to comply with the terms of Buyer's right of first refusal as
described in Section 2.5 of this Agreement.
(f) Subject to Section 7.4(c) and 9.3, Seller fails, for any reason other
than an unauthorized act or omission by Buyer, to achieve the
Commercial Operation Date by the applicable Milestone deadline as
set forth in Section 4.3(b)(iv), as such deadline may be extended in
accordance with Section 4.3(e)
7.3 Termination for Default, Etc.
(a) Declaration of Early Termination Date. If an Event of Default with
respect to a defaulting Party shall have occurred and has not been
cured, the non-defaulting Party shall have the right:
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(i) to send notice, designating a day, no earlier than ten (1 0)
days after the day such notice is deemed to be received and
no later than twenty (20) days after such notice is deemed to
be received, as an early termination date of this Agreement
("Early Termination Date"),
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(ii) to terminate this Agreement and end the Term effective as of
the Early Termination Date and collect the Termination
Payment, which shall be calculated in accordance with
Section 7.3(b) below or as otherwise expressly provided in
this Agreement;
(iii) to the extent of amounts due to the non-defaulting Party,
withhold any payments due to the defaulting Party under this
Agreement; and
(iv) suspend performance
(v) exercise any other right or remedy available at law or in equity
to the extent otherwise permitted under this Agreement..
(b) Calculation of Termination Payment. The non-defaulting Party shall
calculate, in a commercially reasonable manner, a Termination
Payment as of the Early Termination Date. Third parties supplying
information for purposes of the calculation of Gains or Losses may
include dealers in the relevant markets, end-users of the relevant
product, information vendors and other sources of market
information. If the non-defaulting Party uses the market price for a
comparable transaction to determine the Gains or Losses, such
price should be determined by using the average of market
quotations provided by three (3) or more bona fide unaffiliated
market participants. If the number of available quotes is three, then
the average of the three quotes shall be deemed to be the market
price. Where a quote is in the form of bid and ask prices, the price
that is to be used in the averaging is the midpoint between the bid
and ask price. The quotes obtained shall be: (i) for a like amount, (ii)
of the same Output, (iii) at the same (or a reasonably equivalent)
Pnode (as defined in the CAISO Tariff), and (iv) for the remainder of
the Term, or in any other commercially reasonable manner. The
Gains and Losses shall be calculated as the difference, plus or
minus, between the economic value of the remainder of the Term of
the Agreement and the equivalent quantities and relevant market
prices for the same term that either are quoted by a bona fide market
participant, as provided above, or which are reasonably expected to
be available in the market for a replacement contract for the
Agreement. The Termination Payment shall be the sole and
exclusive remedy available to the non-defaulting Party in connection
with its termination of this Agreement and shall not include
consequential, incidental, punitive, exemplary, indirect or business
interruption damages; provided that, if Seller is the defaulting Party,
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Buyer terminates this Agreement, and Buyer has paid for
interconnection capital costs arising under the Interconnection
Agreement pursuant to Section 4.1 (h) for which Buyer has not
received reimbursement under Section 4.1 (h), 'then Seller shall also
reimburse Buyer pro rata for any such costs paid for by Buyer
(assuming twenty-five (25) years of Plant operations). The
non-defaulting Party shall not have to enter into replacement
transactions to establish a Termination Payment.
(c) Notice of Termination Payment. As soon as practicable after
delivery of a notice of termination, notice shall be given by the
non-defaulting Party to the defaulting Party of the amount of the
Termination Payment due from the defaulting Party to the
non-defaulting Party, if any. The notice shall include a written
statement explaining in reasonable detail the calculation of such
amount and the sources for such calculation. The Termination
Payment shall be made to the non-defaulting Party, as applicable,
thirty (30) days after such notice is effective.
(d) Disputes Regarding 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 fifteen
(15) 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. Following delivery
of such a notice, disputes regarding the Termination Payment shall
be resolved in accordance with Section 1 0.9.
7.4 Damages
(a) Except as otherwise provided herein, the rights and remedies of a
Party pursuant to this Article VII shall be cumulative and in addition to
the rights of the Parties otherwise provided in this Agreement.
(b) Except as otherwise specifically and expressly provided in the
Agreement, neither Party shall be liable to the other Party under this
Agreement for any indirect, special or consequential damages,
including, without limitation, loss of use, loss of revenues, loss of
profit, interest charges, cost of capital or claims of its customers or
members to which service is made. Except as set forth in Article IX
and except to the extent Seller violates its undertaking not to provide
or sell rights to part or all of the Output to a party other than Buyer,
Seller shall not be liable to Buyer for failure to provide any specific
amount of Output hereunder.
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(c) In the event that Seller fails to meet the Commercial Operation Date
by the applicable Milestone deadline (as extended under Section
4.3), Seller shall pay Buyer liquidated damages as set forth in Article
IX.
(d) The Parties agree that the Termination Payment above, and the
liquidated damages set forth in Sections 9.3 and 9.4, are reasonable
and represent a fair and genuine estimate of the damages that either
Party will suffer upon the termination of this Agreement or Buyer will
suffer upon the failure of Seller to achieve Commercial Operation by
the agreed upon date(s). The Parties acknowledge that it would be
impracticable or extremely difficult to fix actual damages in such
circumstances, and therefore they have deemed the liquidated
damages set forth above to be the amount of damage sustained by
Buyer or Seller upon the occurrence of such circumstances. The
Parties further agree that payment of such amounts shall be as and
for liquidated damages and not as a penalty (and are a sole and
exclusive remedy upon a termination hereof, and under Sections 9.3
and 9.4 hereof), and are therefore not subject to avoidance under
California Civil Code section 1671.
7.5 Indemnification
(a) Up to and including the Commercial Operation Date, the Seller shall
indemnify, defend, and hold harmless the Buyer; its officers, agents
and employees from any claim, liability, loss, injury or damage
arising out of, or in connection with, the negligence, willful
misconduct or violation of applicable law by Seller and/or its agents,
employees or sub-contractors, excepting only loss, injury or damage
caused by the negligence, willful misconduct or violation of
applicable law of personnel employed by the Buyer to the extent
caused by such negligence, willful misconduct or violation of
applicable law of Buyer's employed personnel.
(b) After the Commercial Operation Date, each Party ("Indemnifying
Party") shall defend, indemnify and hold harmless the other Party
and its officers, directors, employees, agents, affiliates and
representatives (each, an "Indemnified Party") from and against
any and all losses, including but not limited to losses arising from
personal injury or death, or damage to property, but only to the extent
such losses result from or arise out of the negligence, willful
misconduct or violation of applicable law by the Indemnifying Party,
its employees, subcontractors or agents. If an Indemnified Party
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determines that it is entitled to defense and indemnification under
this Article, such Indemnified Party shall promptly notify the
Indemnifying Party in writing of the losses, and provide all
reasonably necessary or useful information, and authority to settle
and/or defend the losses. No settlement that would impose costs or
expense upon the Indemnified Party shall be made without such
Party's prior written consent.
7.6 Buyer's Right to Operate
(a) Subject to Section 7.6(b), if, following the Commercial Operation
Date, Seller (i) fails to maintain Seller's Calculation Period Deemed
Delivered Energy Amount at or above the Seller's Two Year
Minimum Production Threshold or (ii) fails to generate Energy for
sixty (60) consecutive days and such failure in the foregoing clauses
(i) and (ii), as applicable, is not primarily the result of Force Majeure
or any act or omission of Buyer, then Buyer or its designee may, but
shall not be obligated to, assume operational control of the Plant
from Seller; provided that Buyer shall not be permitted to take control
so long as Seller or any of Seller's Lenders are using commercially
reasonable efforts to remedy the failures described in (i) or (ii) above
consistent with Prudent Utility Practice (the "Commercially
Reasonable Efforts Standard"). Buyer, its officers, employees,
agents, contractors and designees shall have the unrestricted right
to enter the Plant to the extent necessary to operate the Plant in
accordance with the foregoing. Upon the exercise of this right, Buyer
or its designee shall at all times operate the Plant, using Prudent
Utility Practice, and ·shall comply, to the extent commercially
practicable, with the terms of this Agreement. Notwithstanding the
foregoing, Seller shall not be excused from any obligation or remedy
available to Buyer as a result of Buyer's operation of, or election not
to operate, the Plant. Buyer shall pay Seller the applicable rate for
Output provided hereunder, less any reasonable costs incurred by
Buyer to operate the Plant. Buyer shall indemnify and hold Seller
harmless from any liability to third parties arising out of Buyer's
failure to operate the Plant using Prudent Utility Practice. Upon
Buyer's reasonable satisfaction that Seller has the ability to operate
the Plant in accordance with this Agreement, Seller shall resume
operational control.
(b) Prior to exercising any rights under this Section 7.6 (including taking
any action to assume operational control of the Plant), Buyer shall
first provide at least forty-five (45) days prior written notice to Seller
identifying in reasonable detail the reasons why Buyer believes that
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Seller has not satisfied the Commercially Reasonable Efforts
Standard to remedy Plant failures (an "Operations Assumption
Notice"). If, prior to the expiration of such forty-five (45) day (or
longer) period, either Seller or its Lenders responds to Buyer's
Operations Assumptions Notice and states in reasonable detail
reasons why Seller or its Lenders dispute Buyer's assertion that
Seller and its Lenders have not satisfied the Commercially
Reasonable Efforts Standard, then Buyer shall refrain from
exercising any rights under this Section 7.6 until such dispute is
resolved in writing by both Parties mutually, or Buyer has obtained a
court confirmation of its position in the manner contemplated by
Section 10.9.
(c) Should Seller's Lender(s) refuse to finance the Plant, or materially
condition such financing, solely as a result of this Section 7.6, and
Seller gives Buyer reasonable prior written notice of such refusal to
finance, Buyer shall have the following options: (i) renegotiate this
Section 7.6 with Seller and Lender(s) in a manner mutually
acceptable; (ii) arrange for financing for the Plant under materially
equivalent terms and conditions as the Lender(s) were prepared to
provide but for this Section 7.6; (iii) delete this Section 7.6 in its
entirety (which deletion will not require Seller's additional consent);
or (iv) terminate this Agreement without liability of one Party to the
other. If Buyer fails to elect and complete one of these options within
sixty (60) days of written notice from Seller, Seller shall have the right
to terminate this Agreement without liability of one party to the other.
To the extent that Seller fails to accomplish financing pursuant to the
Milestone set forth at Section 4.3(b)(iii), and such delays are
attributable to the discussion and negotiation with Lender(s) of this
Section 7 .6, then Seller shall be entitled to such reasonable time to
arrange for the financing of the Plant upon final resolution of matters
related to this Section 7.6.
ARTICLE VIII
REPRESENTATIONS AND WARRANTIES
8.1 Seller's Representations and Warranties
Seller represents and warrants to Buyer that as of the Effective Date:
(a) Seller is duly organized and validly existing as a limited liability
company under the laws of Delaware, and has the lawful power to
engage in the business it presently conducts and contemplates
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conducting in this Agreement, and Seller is duly qualified in
California and each jurisdiction wherein the nature of the business
transacted by it makes such qualification necessary;
(b) Seller has the legal power and authority to make and carry out this
Agreement and to perform its obligations hereunder; all such actions
have been duly authorized by all necessary proceedings on its part.
As of the Effective Date, either:
(i) (A) the Plant shall on the Commercial Operation Date be a
"qualifying small power production facility" ("QF") as that term
is defined in Section 3(17)(C) of the Federal Power Act
("FPA") and will be entitled to all of the exemptions from
regulation provided in 18 CFR §§ 292.601 (c) and 292.602
applicable to a QF with the capacity of the Plant; and (B) no
approval (except with respect to "qualifying small power
production facility" status and market-based rate
authorization under Section 205 of the FPA) with respect to
this Agreement is required from FERC; or
(ii) (A) Seller shall on the Commercial Operation Date be an
"exempt wholesale generator" as that term is defined in
Section 1262(6) of the Public Utility Holding Company Act of
2005, and (B) no approval (except with respect to "exempt
wholesale generator" status and market based rate
authorization under Section 205 of the FPA) with respect to
this Agreement is required from FERC. In the event that the
Plant is not a "qualifying small power production facility" that is
exempt from Sections 205 and 206 of the FPA on the
Commercial Operation Date or any date thereafter, Seller
shall make appropriate filings under the Federal Power Act
within sixty (60) days so as to comply with applicable law,
subject at all times to the provisions of Section 1 0.15 of this
Agreement;
(c) The execution, delivery and performance of this Agreement by Seller
will not conflict with its governing documents, any applicable laws, or
any covenant, agreement, understanding, decree or order to which
Seller is a party or by which it is bound or affected;
(d) This Agreement has been duly and validly executed and delivered by
Seller and, as of the Effective Date, constitutes a legal, valid and
binding obligation of Seller, enforceable in accordance with its terms
against Seller, except to the extent that its enforceability may be
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limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting the rights of creditors generally or by
general principles of equity; and
(e) There are no actions, suits, proceedings or investigations pending
or, to the knowledge of Seller, threatened, in writing, against Seller,
at law or in equity, before any Governmental Authority, which
individually or in the aggregate are reasonably likely to have a
materially adverse effect on the business, properties or assets or the
condition, financial or otherwise, of Seller, or to result in any
impairment of Seller's ability to perform its obligations under this
Agreement.
8.2 Buyer Representations and Warranties
Buyer represents and warrants to Seller that as of the Effective Date:
(a) Buyer is a municipal corporation, duly organized and validly existing,
and has the lawful power to engage in the business it presently
conducts and contemplates conducting in this Agreement;
(b) Buyer has the legal power and authority to make and carry out this
Agreement and to perform its obligations hereunder and all such
actions have been duly authorized by all necessary proceedings on
its part;
(c) The execution, delivery and performance ofthis Agreement by Buyer
will not conflict with its governing documents, any applicable laws or
any covenant, agreement, understanding, decree or order to which
Buyer is a party or by which it is bound or affected;
(d) This Agreement has been duly and validly executed and delivered by
Buyer and, as of the Effective Date, constitutes a legal, valid and
binding obligation of Buyer, enforceable in accordance with its terms
against Buyer, except to the extent that its enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting the rights of creditors generally or by
general principles of equity; and
(e) There are no actions, suits, proceedings or investigations pending
or, to the knowledge of Buyer, threatened, in writing, against Buyer,
at law or in equity, before any Governmental Authority, which
individually or in the aggregate are reasonably likely to have a
materially adverse effect on the business, properties or assets or the
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condition, financial or otherwise, of Buyer, or to result in any
impairment of Buyer's ability to perform its obligations under this
Agreement.
ARTICLE IX
DEVELOPMENTANDPERFORMANCEASSURANCE
9.1 Forms of Assurance
Seller shall maintain the Development Assurance and the Performance
Assurance as follows:
(a) The Development Assurance shall be deposited by electronic
transfer to Buyer's designated account with Wells Fargo NA or
posted in the form of a letter of credit or escrow account (in
substantially the form of agreements set forth on Exhibit F-1 and F-2
hereto) with Wells Fargo NA or such other banking institution
reasonably acceptable to Buyer, as security for the timely
development of the Plant. The transfer or posting shall occur within
thirty (30) days after the Effective Date, and the Development
Assurance will be maintained to and including the Commercial
Operation Date.
(b) The Performance Assurance shall be deposited by electronic
transfer to Buyer's designated account with Wells Fargo NA or
otherwise posted in the form of a letter of credit or escrow account (in
substantially the form of agreements set forth on Exhibit F-1 and F-2
hereto) with Wells Fargo NA or other banking institution reasonably
acceptable to Buyer, as security for the performance of the Seller to
meet its obligations during the period commencing one day after the
Commercial Operation Date and ending at the expiration of the
Term. The Performance Assurance shall be deposited or posted
within thirty (30) days after the Commercial Operation Date and shall
be maintained until the end of the Term.
9.2 Managing Assurances
Within ten (1 0) days after the occurrence of the Commercial Operation Date
Buyer shall notify Seller's banking institution that the Development
Assurance (which shall be the full amount of the Development Assurance,
plus interest under the applicable account, less any undisputed liquidated
damages incurred under this Agreement) shall be returned to Seller. Buyer
may either make, or request Seller's banking institution to make,
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withdrawals from the Development Assurance and Performance
Assurances in accordance with this Agreement and, if applicable, the terms
of the letter of credit or escrow agreement. Seller shall provide additional
funds (or availability thereof) in order to maintain such assurance (at the
amounts thereof set forth in the definitions of Development Assurance and
Performance Assurance, as applicable) at all times during when Seller must
maintain Development Assurance and Performance Assurance, as
specified in Section 9.1. Such additional deposits or availability shall occur
within fifteen (15) days of any withdrawals from such accounts causing the
account balance to fall below said amounts. Within thirty (30) days after the
expiration or earlier termination of this Agreement, Buyer will return to Seller
any undisputed amount of the Development Assurance and/or
Performance Assurance, as the case may be.
9.3 Development Liquidated Damages
In the event that Seller fails to meet the Commercial Operation Date by the
applicable Milestone deadline, as set forth in Sections 4.3(b)(iv), as such
deadline may be extended in accordance with Section 4.3(e), Seller shall
be liable for liquidated damages in the amount equal to the Daily LD
Amount for each day that Seller is late in satisfying the Milestone. So long
as Seller is paying such liquidated damages on a monthly basis after failing
to meet the relevant Milestone deadline (as such Milestone deadline may
have been extended per Section 4.3(e)), Buyer shall not be permitted to
terminate this Agreement forup to twelve (12) months. If after twelve (12)
months following the relevant Milestone deadline (as such Milestone may
have been extended per Section 4.3(e)) Seller has failed to achieve the
relevant Milestone, or if for any reason Seller fails to pay, or discontinues
paying, the liquidated damages provided for above, Buyer may terminate
this Agreement by written notice to Seller. This twelve (12) month period
.shall not be further extened as a result of a Force Majeure Event.Within
thirty (30) days of the receipt of the termination notice, Seller shall pay
Buyer a lump sum equal to the amount of the Development Assurance
minus any Daily LD Amounts, if any, previously paid to Buyer. No other
damages or remedy shall be available to Buyer on the basis of such failure
to meet the Milestone set forth in Section 4.3(b)(iv) or termination of this
Agreement based on Seller's failure to achieve Commercial Operation
within twelve ( 12) months of that Milestone deadline.
9.4 Performance Liquidated Damages
Seller guarantees that the Calculation Period Deemed Delivered Energy
Amount for each two-year Calculation Period shall be no less than the Two
Year Minimum Production Threshold for such Calculation Period, all in
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accordance with this Section 9.4. If, for any Calculation Period, the
Calculation Period Deemed Delivered Energy Amount is less than the Two
Year Minimum Production Threshold (any such shortfall, in MWh, a
"Shortfall"), then Seller may cure such Shortfall by paying or crediting
Buyer liquidated damages based on the amount of such Shortfall in an
amount equal to the product of (i) the amount of such Shortfall multiplied by
(ii) the per MWh Price in this Agreement multiplied by a factor of 1.2. Except
as otherwise expressly stated in Section 7.6, the foregoing shall be Buyer's
sole remedy for any Shortfall or failure to produce the Output or failure to
maintain any specified Two Year Minimum Production Threshold. If for any
two-year Calculation Period Seller is obligated to pay or credit any Shortfall
damages hereunder, then, for purposes of calculating the Calculation
Period Deemed Delivered Energy Amount for the immediately succeeding
Calculation Period, the amount of the Calculation Period Deemed Delivered
Energy Amount for the first year in such succeeding Calculation Period shall
be deemed to be equal to the greater of (a) the actual Calculation Period
Deemed Delivered Energy Amount for such first year and (b) seventy
percent (70%) of the Expected Annual Net Energy Production for such first
year.
ARTICLE X
MISCELLANEOUS
10.1 Assignment
The rights and obligations of this Agreement may not be assigned by either
Party without the prior written consent of the other Party, which consent
shall not be unreasonably withheld or delayed. Any Change of Control of
Seller (whether voluntary or by operation of law) will be deemed an
assignment and will require the prior written consent of Buyer, which
consent shall not be unreasonably withheld or delayed. Notwithstanding
the foregoing, Seller may use subcontractors without Buyer's consent to
comply with the terms of this Agreement, provided that notwithstanding the
use of those subcontractors, Seller shall remain responsible for all of its
obligations under this Agreement. Buyer may furthermore use any agent it
so designates for scheduling and billing purposes, so long as Buyer
remains responsible for all of its obligations under this Agreement. Any
purported assignment of this Agreement in the absence of the required
consent, except as provided in 10.2, shall be void. In determining whether
to provide its consent to any proposed assignment of this Agreement or
Change of Control, Buyer may request Seller to provide financial
statements of the proposed assignee or new controlling party, or other
relevant information, as the case may be.
47
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10.2 Financing
Notwithstanding Section 10.1, Seller may, without the consent of Buyer,
collaterally assign its rights under this Agreement to Lender(s) as collateral
security in connection with any financing of the construction, purchase or
operation of the Plant, provided that such Lender(s) or its designee
agree(s), in writing, that upon assuming any of Seller's prospective rights
under this Agreement, such Lender(s) also shall be bound by all of Seller's
prospective obligations under this Agreement. Notwithstanding any such
assignment, Seller's obligations under this Agreement shall continue in
their entirety in full force and effect and Seller shall remain fully liable for all
of its obligations under or relating to this Agreement. Each such collateral
as~ignment and any purchaser or transferee shall be subject to Buyer's
rights and defenses hereunder and under applicable law. Seller shall
provide prior written notice to Buyer at least ten (1 0) business days prior to
any such collateral assignment.
In order to facilitate the obtaining of financing of the Plant, Buyer shall
execute, upon request, a commercially reasonable consent to assignment,
with respect to a collateral assignment hereof (and estoppel in mutually
agreeable form) to Lenders in connection with the documentation of the
financing or refinancing for the Plant, including tax equity. Any assignment
in violation of this Agreement shall be void, ab initio. Buyer shall consider in
good faith any amendments to this Agreement proposed by Seller which
relate to financing of the Plant or other amendments requested by Seller in
order to receive or maintain financing from Lenders.
10.3 Notices
Any notice, demand, request, or communication required or authorized by
this Agreement shall be delivered either by hand, facsimile, overnight
courier or mailed by certified mail, return receipt requested with postage
prepaid, to:
City of Palo Alto
250 Hamilton Avenue, 8th Floor
Palo Alto, CA 94301
Attention: Senior Deputy City Attorney I Utilities
Fax: (650) 329-2646
on behalf of Buyer;
with a copy to:
HOU:3428558.6
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[v. 3-2014]
City of Palo Alto
250 Hamilton Avenue, 3rd Floor
Palo Alto, CA 94301
Attention: Director of Utilities
Fax: (650) 329-2946
and to:·
Northern California Power Agency
651 Commerce Drive
Roseville, CA 95678-6411
Attention: Power Contracts Administrator
Fax: (916) 783-7693
and to:
EE Kettleman Land LLC
c/o Centaurus Renewable Energy LLC
Williams Tower
2800 Post Oak Blvd, Ste. 225
Houston, TX 77056
Attention: Keith Holst
Telephone: (713) 554 0539
Email: KHolst@centcap.net
Attention: Stephen H. Douglas
Email: SDouglas@centaurusenergy.com
Telephone: (713) 554-1352
And to:
Clenera Renewable Energy LLC
60 E Rio Salado Pkwy #900
Tempe, AZ 85281
Attention: Jason Ellsworth
Email: jason@clenera.com
Main: (480) 478-1647
with a copy to:
HOU:3428558.6
Andrews Kurth LLP
600 Travis Street, Suite 4200
Houston, TX 77002
49
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[v. 3-2014]
Attention: Peter del Vecchio
Email: pdelvecchio@andrewskurth.com
Telephone: (713) 220-3901
on behalf of Seller.
The designation and titles of the person to be notified or the address of such
person may be changed at any time by written notice delivered in the
manner set forth in this Section 1 0.3. Any such notice, demand, request, or
communication shall be deemed received (i) if delivered by hand by a Party
or sent by facsimile or email or (ii) upon receipt by the receiving Party if sent
by courier or U.S. mail.
10.4 Captions
All titles, subject headings, section titles and similar items are provided for
the purpose of reference and convenience and are not intended to be
inclusive, definitive or to affect the meaning of the contents or scope of the
Agreement.
10.5 No Third Party Beneficiary
No provision of the Agreement is intended to, nor shall it in any way, inure to
the benefit of any customer, property owner or any other third party, so as to
constitute any such Person a third party beneficiary under the Agreement,
or. of any one or more of the terms hereof, or otherwise give rise to any
cause of action in any Person not a Party hereto.
10.6 No Dedication
No undertaking by one Party to the other under any provision of the
Agreement shall constitute the dedication of that Party's system or any
portion thereof to the other Party or to the public or affect Seller as an
independent entity and not a public utility.
10.7 Entire Agreement; Integration
This Agreement, together with all exhibits and Appendices attached hereto,
constitutes the entire agreement between the Parties and supersedes any
and all prior oral or written understandings. No amendment, addition to or
modification of any provision hereof shall be binding upon the Parties, and
neither Party shall be deemed to have waived any provision or any remedy
available to it, unless such amendment, addition, modification or waiver is
50
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[v. 3-2014]
made, in writing, and signed by a duly authorized officer or representative of
the Parties.
10.8 Applicable Law
The Agreement is made in the State of California and shall be interpreted
and governed by the laws of the State of California and/or the laws of the
United States, as applicable.
10.9 Venue
The Parties hereby submit to the exclusive jurisdiction of the federal courts
for the Northern District of the State of California; provided, however, that if
such federal courts sitting in the Northern District of the State of California
refuse jurisdiction, the Parties agree to the exclusive jurisdiction of the state
courts sitting in the County of Santa Clara, State of California.
10.10 Nature of Relationship
The duties, obligations and liabilities of the Parties are intended to be
several and not joint or collective. The Agreement shall not be interpreted
or construed to create an association, joint venture, fiduciary relationship or
partnership between Seller and Buyer or to impose any partnership
obligation or liability or any trust or agency obligation or relationship upon
either Party. Seller and Buyer shall not have any right, power or authority to
enter into any agreement or undertaking for, or act on behalf of, or act as or
be an agent or representative of or otherwise bind the other Party.
10.11 Good Faith and Fair Dealing; Reasonableness
The Parties agree to act reasonably and in accordance with the principles of
good faith and fair dealing in the performance of this Agreement. Unless
expressly provided otherwise in this Agreement, (i) wherever the
Agreement requires the consent, approval or similar action by a Party, such
consent, approval or similar action shall not be unreasonably withheld or
delayed, and (ii) wherever the Agreement gives a Party a right to determine,
require, specify or take similar action with respect to matters, such
determination, requirement, specification or similar action shall be
reasonable.
10.12 Severability
HOU:3428558.6
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Should any prov1s1on of the Agreement be or become void, illegal or
unenforceable, the validity or enforceability of the other provisions of the
Agreement shall not be affected and shall continue in full force and effect.
The Parties will, 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.
1 0.13 Confidentiality
(a) The Buyer is a public agency subject to the disclosure requirements
of the California Public Records Act ("CPRA"). If Seller's proprietary
information is contained in documents or information submitted to
Buyer, and Seller claims that such information falls within one or
more CPRA exemptions, Seller must clearly mark such information
"CONFIDENTIAL AND PROPRIETARY," and identify the specific
lines containing the information. Buyer shall disclose such
information to third parties only to the extent required by California
law (including, without limitation, the California Constitution, the
California Public RecordsAct and the Brown Act).
(b) In the event of a request for such information, the Buyer will make
best efforts to provide notice to Seller prior to such disclosure. If
Seller contends that any documents are exempt from the CPRA and
wishes to prevent disclosure, it is required to obtain a protective
order, injunctive relief or other appropriate remedy from a court of
law in Santa Clara County before the Buyer's deadline for
responding to the CPRA request. If Seller fails to obtain such
remedy within Buyer's deadline for responding to the CPRA request,
Buyer may disclose the requested information. Seller further agrees
that Buyer shall have no liability to Seller arising out of any disclosure
by Buyer of any Seller information.
(c) Notwithstanding the foregoing, either Party may disclose this
Agreement to its representatives (or any affiliate), the Northern
California Power Agency or its representatives, or to any Lender(s)
or potential Lender(s) or Plant investors or their representatives;
provided that prior to such disclosure, the recipient shall agree, in
writing, to keep the material confidential under terms no less
stringent than as set forth in this Section 1 0.13. Buyer also shall be
permitted to disclose this Agreement and related information to the
City Council of Palo Alto for the express purpose of obtaining
approval to execute this Agreement; provided that in connection with
52
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[v. 3-2014]
such disclosure Buyer shall only disclose such information to the
extent required by California law (including, without limitation, the
California Constitution, the California Public Records Act and the
Brown· Act). Each Party shall be bound by its obligations of
confidentiality hereunder for a period of two (2) years from the
expiration or earlier termination of this Agreement .
(d) Notwithstanding anything to the contrary in this Section 1 0.13,
nothing shall restrict any Party from using or disclosing confidential
information in any manner it chooses which (i) is or becomes
generally available to the public other than as a result of a disclosure
directly or indirectly by the disclosing Party or its representative; (ii)
was within the using or disclosing Party's possession prior to it being
furnished hereunder, provided that such information is not subject to
another confidentiality agreement with, or other contractual, legal or
fiduciary obligation of confidentiality to, any other party with respect
to such information; (iii) is rightfully obtained by a Party from third
parties authorized to make such disclosure without restriction; or (iv)
is legally required to be disclosed by judicial or other governmental
action as determined by such Party's attorney acting in good faith
(including, but not limited to, the California Constitution, the
California Public Records Act and the Brown Act).
10.14 Cooperation
The Parties agree to reasonably cooperate with each other in the
implementation and performance of the Agreement. Such duty to
cooperate shall not require either Party to act in a manner inconsistent with
its rights under the Agreement.
10.15 Mobile Sierra Doctrine
Notwithstanding any other provision of this Agreement, the Parties intend
that the standard of review for changes to any rate, charge, classification,
term or condition of this Agreement proposed by a Party shall be the
"Mobile-Sierra public interest" standard of review, as stated by the United
States Supreme Court in Morgan Stanley Capital Group Inc. v. Public Utility
District No. 1 of Snohomish County, 554 U.S. 1164 (2008) and consistent
with the order of the Supreme Court in NRG Power Marketing LLC, eta/. v.
Maine Public Utilities Commission eta/., No. 08-674, 130 S.Ct 693 (2010)
("NRG Order"). Any modifications proposed by a non-contracting third party
or FERC acting sua sponte shall be the most stringent standard permissible
under applicable law.
53
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[v. 3-2014]
1 0.16 Counterparts
This Agreement may be executed in two or more counterparts and by
different Parties on separate counterparts, all of which shall be considered
one and the same agreement and each of, which shall be deemed an
original.
10.17 Immunity Waiver
Each Party will comply with· all applicable lawful federal, state and local
laws, ordinances, resolutions, rate schedules, rules and regulations that
may affect its rights and obligations under this Agreement. Buyer warrants
and covenants that with respect to its contractual obligations hereunder and
performance thereof, it will not claim immunity on the grounds of
sovereignty or similar grounds with respect to itself or its revenues or assets
from (a) suit, or (b) jurisdiction of court (including a court located outside the
jurisdiction of its organization).
1 0.18 Debt Liability Disclaimer
For the avoidance of doubt,the Buyer, including, but not limited to, any
source of funding for Buyer, any General Fund or any special self insurance
program, is not liable for any debts, liabilities, settlements, liens, or any
other obligations of the Seller or its heirs, successors or assigns. In relation
to· this Agreement, the Buyer shall not be liable for and shall be held
harmless and indemnified by Seller for (a) any claims or damages arising
out of any other contract to which Seller is a party, and (b), subject to 7.5(b),
any tortious action or inaction, negligent error in judgment, act of
negligence, intentional tort, negligent mistakes or other acts taken or not
taken by the Seller, its employees, agents, servants, invitees, guests or
anyone acting in concert with or on behalf of the Seller.
10.19 No Implied Waiver of Breach
The waiver of any breach of a specific provision of this Agreement does not
constitute a waiver of any other breach of that term or any other term of this
Agreement.
· HOU:3428558.6
[signature page follows]
54
AMENDED AND RESTATED
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[v. 3-2014]
IN WITNESS WHEREOF, the Parties have caused this Agreement to be
duly executed as of the day and year first above written.
55
HOU:3428558.6
AMENDED AND RESTATED
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[v. 3-2014]
SELLER
EE KETTLEMAN LAND LLC
By: I~
Name: I< c d~ i--/ ohJ..
Title: Mf.V\.,.~
Date: (./ IJ. I /1 LJ r '
By: ·~\Hmk
Name: ~~~\-\.~
Title: V\f'.JvJI\\j tJ2-
Date: G{}:JI\4
CITY OF PALO A
APPROVAL BY
SERVICES Dl _,........,
Title: Admin· tr · e ervices Director
Date: (p {z.sf1i
CITY OF PALO ALTO
APPR BY ~T~~~-
By:_ . .,....___,_ ___ ----'~---~~-
Title: City Manager
Date: Co /zr:; /t1
HOU:3428558.6
BUYER
CITY OF PALO ALTO
APPROVAL AS TO FORM:
By:( ~/ lJ\----
Nam'i \JL2~t c A ~;t(;t([cufl
Title: Senior Deputy City Attorney
Date: 6{t4/1Lf
CITY OF PALO ALTO
APPROVAL BY UTILITIES DIRECTOR
By: J~
Name: Valen Fo
Title: Utilities Director
Date: Co (z.~ (1~
CITY OF PALO ALTO
APPROVAL BY MAYOR:
stJ111A{L
Name:
Title: Mayor
Date: G /rr/14
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EXHIBIT A-1
PLANT SITE DESCRIPTION
"Real property in the unincorporated area of the County of Kings, State of
California, described as follows:
THE WEST HALF OF THE NORTHEAST QUARTER, THE NORTH HALF OF
THE SOUTHWEST QUARTER, THE SOUTHWEST QUARTER OF THE
. SOUTHWEST QUARTER, THE SOUTHEAST QUARTER OF THE SOUTHWEST
QUARTER, THE SOUTHWEST QUARTER OF THE SOUTHEAST QUARTER,
THE NORTHEAST QUARTER OF THE NORTHEAST QUARTER AND THAT
PART OF THE NORTHWEST QUARTER LYING SOUTH AND THE EAST OF
THE SWAMP AND OVERFLOW LINE IN SECTION 32, TOWNSHIP 21 SOUTH,
RANGE 19 EAST, MOUNT DIABLO BASE AND MERIDIAN, IN THE COUNTY OF
KINGS, STATE OF CALIFORNIA, ACCORDING TO THE OFFICIAL PLAT
THEREOF.
EXCEPTING ALL OIL, GAS AND OTHER HYDROCARBONS AND MINERALS IN
AND UNDER ALL OF THE SAID REAL PROPERTY, EXCEPT THE SAID WATER
WELL PARCELS, AND FIFTY PER CENT (50%) OF ALL OIL, GAS, OTHER
HYDROCARBONS AND MINERALS IN AND UNDER THE SAID WATER WELL
PARCELS. THERE IS HEREBY EXPRESSLY RESERVED UNTO THE
GRANTOR ALL SAID OIL, GAS, OTHER HYDROCARBONS AND MINERALS IN
AND UNDER THE SAID REAL PROPERTY, EXCEPTING THE WATER WELL
PARCELS; AND THE SAID GRANTOR SHALL AT ALL TIMES HAVE THE RIGHT
TO ENTER ON THE SAID REAL PROPERTY, EXCEPTING THE SAID WATER
WELL PARCELS, AND TAKE ALL OF THE USUAL, NECESSARY AND
CONVENIENT MEANS TO EXPLORE, TEST, SURVEY AND DRILL FOR,
PRODUCE, EXTRACT, AND TAKE OIL, GAS, ASPHALTUM AND OTHER
HYDROCARBONS, AND ALL MINERALS OF EVERY KIND FROM, AND TO
STORE SAME UPON, THE SAID REAL PROPERTY, EXCEPTING SAID WATER
WELL PARCELS, AND ALSO THE RIGHT TO ENTER UPON SAID REAL
PROPERTY, EXCEPTING THE SAID WATER WELL PARCELS, FOR THE SAID
PURPOSES, AND TO CONSTRUCT, USE, MAINTAIN, ERECT, REPAIR,
REPLACE AND REMOVE THEREON AND THEREFROM, ALL PIPE LINES,
TELEPHONE AND TELEGRAPH LINES, TANKS, MACHINERY, BUILDINGS
AND OTHER STRUCTURES AND EQUIPMENT, EXCEPTING THE SAID
WATER WELL PARCELS, PROVIDED, HOWEVER, THAT THE GRANTOR
SHALL NOT HAVE THE RIGHT TO CONSTRUCT, USE, OR MAINTAIN ON THE
SAID REAL PROPERTY, AN OIL PIPE LINE PUMPING STATION, REFINERY
OR GASOLINE ABSORPTION PLANT; AND THE GRANTOR SHALL ALSO
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[v. 3-2014]
HAVE, AND THERE IS HEREBY RESERVED TO IT, RIGHTS-OF-WAY FOR
PASSAGE OVER, UPON AND ACROSS, AND INGRESS TO AND FROM ALL
OF SAID REAL PROPERTY, FOR ANY AND ALL OF THE PURPOSE
MENTIONED IN THIS PARAGRAPH 3. SUCH OIL BOOSTER PLANTS AS ARE
REQUIRED MAY BE CONSTRUCTED, MAINTAINED AND OPERATED ON
SAID REAL PROPERTY AT LOCATIONS PLACED SO AS TO INTERFERE AS
LITTLE AS REASONABLY POSSIBLE WITH GRANTEE'S OPERATIONS
THEREON. THE EXERCISE OF ANY OF THE SAID RIGHTS BY THE GRANTOR
SHALL BE CONSIDERED PART OF ITS "OPERATIONS FOR THE
PRODUCTION OF OIL"; BUT THIS SENTENCE SHALL BE WITHOUT
PREJUDICE TO THE GENERALITY OF SAID EXPRESSION, RESERVED IN
DEED FROM BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION RECORDED JUNE 18, 1937 IN BOOK 169, PAGE 500 OF
OFFICIAL RECORDS.
ALSO EXCEPTING AN UNDIVIDED ONE-HALF INTEREST IN AND TO ALL OF
THE OIL, GAS AND OTHER MINERALS AND MINERAL RIGHTS OF
WHATEVER NATURE AND DESCRIPTION IN OR UNDER SAID LANDS,
RESERVED IN DEED FROM SECURITY COMPANY RECORDED APRIL 12,
1947 IN BOOK 372, PAGE 158 OF OFFICIAL RECORDS.
ALSO EXCEPT THOSE PORTIONS DESCRIBED IN FINAL ORDER OF
CONDEMNATION RECORDED JANUARY 08, 1970 IN BOOK 947, PAGE 48 OF
OFFICIAL RECORDS.
ALSO EXCEPTING THE FOLLOWING:
1. ALL GROUND WATER RIGHT APPURTENANT TO SAID LAND, OR PART
AND PARCEL THEREOF, BOTH APPROPRIATIVE AND OVER LYING
CORRELATIVE, TOGETHER WITH THE RIGHT TO ENTER UPON SAID LAND
AND DRILL WELLS THEREON AND PRODUCE AND TAKE THEREFROM
GROUND WATER UNDERLYING SAID LAND AND TO TRANSPORT SAID
WATER TO OTHER LANDS WHETHER OVERLYING THE SAME
UNDERGROUND BODY OF WATER UNDERLYING SAID LAND OR NOT, AND
TOGETHER WITH AN EASEMENT FOR A RIGHT OF WAY, IN GROSS, TOLAY,
CONSTRUCT, OPERATE, MAINTAIN, REPAIR, REPLACE, AND REMOVE ALL
PIPE LINES, PUMPS, AND OTHER FACILITIES NECESSARY OR
CONVENIENT FOR ANY AND ALL SUCH PURPOSES, AND INCIDENTALLY
THERETO TO CONSTRUCT ROADS AND TO ENTER UPON THE LAND WITH
VEHICLES AND EQUIPMENT, ALL AS MAY BE CONVENIENT FOR THE
REASONABLE EXERCISE OF THE RIGHTS AND EASEMENT HEREIN
RESERVED. WITHOUT LIMITING THE SCOPE OF THE EASEMENT AND
RIGHTS HEREIN RESERVED, SUCH EASEMENT AND RIGHT-OF-WAY
SHALL BE AT LEAST THIRTY (30) FEET IN WIDTH ALONG THE PRESENTLY
EXISTING WATER PIPE LINE AS SHOWN IN EXHIBIT B TO THE WATER
AGREEMENT (HEREINAFTER DEFINED) AND SHALL ALSO ENCOMPASS A
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CIRCLE OF AT LEAST ONE HUNDRED (1 00) FEET IN RADIUS AROUND EACH
OF THE PRESENTLY EXISTING WELL SITES AS SHOWN ON EXHIBIT B TO
THE WATER AGREEMENT.
2. ALL OIL, GAS AND OTHER HYDROCARBONS; (II) GEOTHERMAL
RESOURCES AS DEFINED IN § 6903 OF THE CALIFORNIA PUBLIC
RESOURCES CODE; AND (Ill) ALL OTHER MINERALS, WHETHER SIMILAR
TO THOSE HEREIN SPECIFIED OR NOT, WITHIN OR THAT MAY BE
PRODUCED FROM SAID LAND.
3. THE RIGHT FROM TIME TO TIME TO ENTER UPON THE SURFACE OF
SAID LAND (I) FOR THE PURPOSE OF EXPLORATION FOR OIL, GAS, AND
OTHER HYDROCARBONS AND OTHER MINERALS (INCLUDING THE RIGHT
TO CONDUCT GEOPHYSICAL TESTS AND STUDIES); (II) TO DRILL AND
MAINTAIN OIL AND GAS WELLS INTO AND THROUGH THE SURFACE OF
THE LAND; (Ill) TO PRODUCE, EJECT, STORE AND REMOVE FROM AND
THROUGH SUCH WELLS OR WORKS OIL, GAS, WATER, AND OTHER
SUBSTANCES INCIDENTAL TO EXPLOITATION OF OIL, GAS AND OTHER
MINERALS; AND (IV) TO CONSTRUCT AND MAINTAIN ON THE SURFACE OF
SAID LAND SUCH FACILITIES AS MAY BE REASONABLY NECESSARY OR
CONVENIENT FOR THE DISCOVERY OR EXPLOITATION OF OIL, GAS, AND
OTHER HYDROCARBONS AND MINERALS (WHETHER OR NOT SUCH OIL,
GAS, AND OTHER HYDROCARBONS ARE RESERVED HEREIN), INCLUDING,
WITHOUT LIMITATION, THE RIGHT TO CONSTRUCT FACILITIES
INCIDENTAL TO EXTRAORDINARY RECOVERY METHODS. THE RIGHTS
HEREIN EXCEPTED AND RESERVED SHALL INCLUDE, WITHOUT
LIMITATION, AN EASEMENT AND RIGHT OF WAY OVER AND ACROSS THE
LAND HEREINABOVE DESCRIBED FOR NECESSARY OR CONVENIENT
ROADS, PIPE LINES, POWER, DRILLING RIGS, PRODUCTION EQUIPMENT
AND FACILITIES, TELEPHONE AND TELEGRAPH LINES. THE EXERCISE OF
THE RIGHT HEREIN EXCEPTED AND RESERVED SHALL BE WITHOUT COST
OR CHARGE TO GRANTOR, OR ITS SUCCESSORS AND ASSIGNS, EXCEPT
AS HEREINAFTER EXPRESSLY PROVIDED. GRANTOR SHALL NOT,
HOWEVER, IN THE EXERCISE OF THE RIGHTS HEREIN RESERVED,
DAMAGE OR DISTURB BUILDINGS OR PERMANENT STRUCTURES ON SAID
LAND. GRANTOR OR ITS SUCCESSORS AND ASSIGNS SHALL, WHENEVER
POSSIBLE, LOCATE ANY AND ALL PIPE LINES, FUEL OR ELECTRICAL
LINES, AND RIGHTS-OF-WAY ALONG THEN EXISTING ROADWAYS, CANAL
BANKS OR OTHER NONFARM AREAS SO AS NOT TO INTERFERE
UNREASONABLY WITH THE SURFACE USE OF SAID LAND FOR FARMING.
ANY PERMANENT PIPE LINES NOT LOCATED OR ALIGNED ALONG THEN
EXISTING ROADWAYS, CANAL BANKS OR IN OTHER UNCULTIVATED
AREAS SHALL BE LOCATED BELOW PLOW DEPTH. UPON COMPLETION OF
EXPLORATION OR PRODUCTION OPERATIONS, AS THE CASE MAY BE,
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GRANTOR, OR US SUCCESSORS AND ASSIGNS, SHALL RESTORE THE
SURFACE AS NEARLY AS REASONABLY PRACTICABLE TO ITS CONDITION
PRIOR TO THE COMMENCEMENT OF ANY OF THE OPERATIONS OF
GRANTOR OR ITS SUCCESSORS AND ASSIGNS, ALL RESERVED AND
EXCEPTED IN DEEDS RECORDED JANUARY 31, 1980 IN BOOK 1167, PAGE
944 AS INSTRUMENT NO. 80-1374; JANUARY 31, 1980 IN BOOK 1167, PAGE
965 AS INSTRUMENT NO. 80-1375; JANUARY 31, 1980 IN BOOK 1168, PAGE 1
AS INSTRUMENT NO. 80-1376; JANUARY 31, 1980 IN BOOK 1168, PAGE 22
AS INSTRUMENT NO. 80-1377; JANUARY 31, 1980 IN BOOK 1168, PAGE 43
AS INSTRUMENT NO. 80-1378; JANUARY 31, 1980 IN BOOK 1168, PAGE 64
AS INSTRUMENT NO. 80-1379; JANUARY 31, 1980 IN BOOK 1168, PAGE 85
AS INSTRUMENT NO. 80-1380; JANUARY 31, 1980 IN BOOK 1168, PAGE 128
AS INSTRUMENT NO. 80-1382 AND JANUARY 31, 1980 IN BOOK 1168 PAGE
150 AS INSTRUMENT NO. 80-1383, ALL OF OFFICIAL RECORDS.
ALSO EXCEPT THAT PORTION CONVEYED TO THE STATE OF CALIFORNIA
BY GRANT DEED RECORDED JUNE 25, 2001 AS INSTRUMENT NO. 01-12105
OF OFFICIAL RECORDS.
ALSO EXCEPT THAT PORTION CONVEYED TO THE STATE OF CALIFORNIA
BY GRANT DEED RECORDED SEPTEMBER 16, 2004 AS INSTRUMENT NO.
04-27752 OF OFFICIAL RECORDS.
APN: 036-210-030-000"
HOU:3428558.6
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EXHIBIT A-2
SITE DRAWINGS
Seller shall provide to Buyer final Site Drawings prior to the Commercial
Operation Date.
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EXHIBIT B
Environmental Attribute Transfer from Seller to Buyer
Participation in the Western Renewable Energy Generation Information System.
Seller shall, at its sole expense take all 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 applicable requirements of the California
Renewables Portfolio Standard and transferred in a timely manner to Buyer for
Buyer's sole benefit. Seller shall comply with all applicable laws, including, without
limitation, the WREGIS Operating Rules, regarding the certification and transfer of
such WREGIS Certificates to Buyer and Buyer shall be given sole title to all such
WREGIS Certificates. Seller shall be deemed to have satisfied the warranty in this
EXHIBIT B, paragraph (h) provided that Seller fulfills its obligations under this
EXHIBIT B, paragraphs (a) through (h) below. In addition:
(a) Prior to the initial Energy delivery date, Seller shall register the Plant with
WREGIS and establish an account with WRE_GIS ("Seller's WREGIS
Account"), which Seller shall maintain until the end of the Term. 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"). Seller shall
be responsible for all expenses associated with registering the Plant 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 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 the Plant'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 Article 3, Buyer shall make an
invoice payment for a given month in accordance Article 3 before the
WREGIS Certificates for such month are formally transferred to Buyer in
accordance with the WREGIS Operating Rules and this EXHIBIT B.
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Notwithstanding this delay, Buyer shall have all right and title to all such
WREGIS Certificates upon payment to Seller in accordance with Article 3.
(e) A "WREGIS Certificate Deficit" means any deficit or shortfall in WREGIS
Certificates delivered to Buyer for a calendar month as compared to the
delivered Energy for the same calendar month ("Deficient Month"), after
taking into account applicable delays in the issuance of WREGIS Certificates
referenced in the prior paragraph or otherwise arising under WREGIS
Operating Rules. If any WREGIS Certificate Deficit is caused, or the result of
any action or inaction, by Seller, then Seller shall take all actions reasonably
necessary to remedy such circumstances and failure to do so shall be a
breach hereunder by Seller.
(f) Without limiting Seller's obligations under this EXHIBIT B, to the extent a
WREGIS Certificate Deficit is caused by an error or omission ofWREGIS, the
Parties shall cooperate in good faith to cause WREGIS to correct its error or
omission.
(g) If WREGIS changes the WREGIS Operating Rules after the Effective Date or
ap.plies the WREGIS Operating Rules in a manner inconsistent with this
EXHIBIT B after the Effective Date, the Parties promptly shall modify this
EXHIBIT Bas reasonably required (i) 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 or (ii) as may otherwise be reasonably appropriate to address
such inconsistency.
(h) 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 the first delivery under
this Agreement.
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EXHIBITC
INSURANCE COVERAGES
At its own expense, Seller shall secure and maintain during the Term the following
insurance with the coverage amounts indicated for occurrences during and arising
out of Seller's performance of this Agreement. Such insurance shall be placed with
responsible and reputable insurance companies in compliance with Requirements
of Laws applicable to Seller.
(a) Workers' Compensation/Employer's Liability. Seller shall maintain Workers'
Compensation Insurance and Employer's Liability Insurance which comply
with Requirements of Laws applicable to Seller.
(b) Automobile Liability. Seller shall maintain Automobile Liability Insurance in
compliance with Requirements of Laws applicable to Seller, including
coverage for owned, non-owned and hired automobiles for both bodily
injury (including death) and property damage, including automobile liability
contractual endorsement and uninsured/underinsured motorist protection
endorsements.
(c) Third Party Liability. Seller shall maintain third party liability insurance in
compliance with Requirements of Laws applicable to Seller on a
project-specific basis covering against legal responsibility to others as a
result of bodily injury, property damage and personal injury arising from the
operation and maintenance of the Plant. Such policy shall be written with a
limit of liability not less than $10,000,000 and a deductible not to exceed
$10,000. Such liability may be in any combination of primary and
excess/umbrella. Coverage shall include, but not be limited to,
premises/operations, explosion, collapse, underground hazards, broad
form property damage and personal injury liability. Such coverage shall not
contain exclusions for punitive or exemplary damages.
(d) Property Insurance. Seller shall maintain third party property insurance on
a project-specific basis covering cost of repairing Plant and or
interconnection equipment to operational condition. Such policy shall be
written with coverage sufficient to replace and rebuild the Plant. Coverage
shall include, but not be limited to, fire, storm damage, equipment failure,
da.mage to equipment precluding operation under prudent utility practice,
premises/operations, explosion, collapse, underground hazards, broad
form property damage.
Upon the request from Buyer, Seller shall provide Buyer with applicable insurance
certificates confirming the insurance coverages required above.
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EXHIBIT D
SCHEDULING PROTOCOLS
Following the Effective Date, the Parties will agree on Exhibit D (Scheduling
Protocols), which shall be consistent with the CAISO Tariff, any applicable PIRP
rules and procedures, customary industry practice, and the Plant's operational
parameters (including as to levels and timing of curtailments), such agreement not
to be unreasonably withheld by either Party.
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EXHIBIT E-1
. Form of Monthly Report
Monthly Progress Report
[Project Name]
[Month]
Pursuant to Section 4.3(c) of the [Project Name] PPA, [Project Entity] provides the
following status updates on the progress of [Project Name] Project, whose
guaranteed Commercial Operation Date is June 1, 2015 [Section 4.3(b)(iv)]. For
additional questions on this progress report, please contact [Name] at [contact
information]. rF1"v.\ H ~ r I,,,, 'i .vm ,.·,,, T·' ·~ "' II 111 • , h n f ~~{;::fr.~t:(ol;l ~.
4.3(b)(i) By the Effective
Date, Seller shall
have obtained
Site Control.
4.3(b)(ii) By August 31,
2014, Seller shall
have obtained all
Permits
necessary, in
final form, to
commence
construction of
the Plant.
4.3(b)(iii) By December 1,
2014,Sellershall
have
commenced
construction of
the Plant.
4.3(b)(iv) By June 1, 2015,
Seller shall
achieve
Commercial
Operation
HOU:3428558.6
'!t . ~ . ···-] ,, ' ' t il, ')f:K'(''f }·J cJr• ' ·_ ~-l 1f
Current status
[details]
Uj;!dates since last Monthly Progress Rej;!ort
[details]
Current status
[details]
Uj;!dates since last Monthly Progress Re12ort
[details]
Current status
[details]
Uj;!dates since last Monthly Progress Re12ort
[details]
Current status
[details]
U!;1dates since last Monthly Progress Rej;!ort
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EXHIBIT E-2
COD CERTIFICATION
Commercial Operation Date: .._[ __ _,
This certification ("Certification") of Commercial Operation is delivered by
____ ("Seller") to The City of Palo Alto ("Buyer") in accordance with the
terms of that certain Power Purchase Agreement dated as of the Execution Date
("Agreement") by and between Seller and Buyer. All capitalized terms used in this
Certification but not otherwise defined herein shall have the respective meanings
assigned to such terms in the Agreement. Seller hereby certifies and represents to
Buyer the following:
1. The Plant equipment representing MW AC of Initial Capacity
has been installed, tested and is capable of generating energy in
accordance with the manufacturer's specifications.
2. The Plant is substantially complete and capable of delivering Energy as
described in the Agreement.
3. The CAISO has provided notification of Commercial Operation in
accordance with the CAISO Tariff, and documentation of such notification is
attached hereto or shall be provided to Buyer promptly upon Seller's receipt
thereof.
EXECUTED by SELLER this ___ day of _____ , 20_.
By: _____ ~-------------------
Name: ~-----------------------
Title: ____________ _
The undersigned, a licensed professional engineer, hereby certifies that, to its
current knowledge, the foregoing is substantially true and correct.
[LICENSED PROFESSIONAL ENGINEER]
By: ________________________ __
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Name: __________________________ __
Title: ____________ _
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EXHIBIT F-1
FORM OF LETTER OF CREDIT
If Seller elects to deliver Development Assurance or Performance Assurance in
the form of a letter of credit pursuantto Section 9.1 of this Agreement, such letter of
credit shall be a standby letter of credit in a form which is customary in the U.S.
banking industry and reasonably acceptable to Buyer (such acceptance not to be
unreasonably withheld).
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EXHIBIT F-2
FORM OF ESCROW AGREEMENT
If Seller elects to deliver Development Assurance or Performance Assurance in
the form of an escrow agreement pursuant to Section 9.1 of this Agreement, such
escrow agreement shall be in a form which is customary in the U.S. banking
industry and reasonably acceptable to both Parties (such acceptance not to be
unreasonably withheld by either Party).
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EXHIBIT G
EXPECTED ANNUAL NET ENERGY PRODUCTION
Contract Year Expected Annual Net Energy Production (in MWh)
1 53,454
2 53,080
3 52,708
4 52,339
5 51,973
6 51,609
7 51,248
8 50,889
9 50,533
10 50,179
11 < 49,828
12 49,479
13 49,133
14 48,789
15 48,447
16 48,108
17 47,771
18 47,437
19 47,105
20 46,775
21 46,448
22 46,123
23 45,800
24 45,479
25 45,161
26 44,845
27 44,531
28 44,219
29 43,910
30 43,602
Note: The above amounts for Expected Annual Net Energy Production assume an
Initial Capacity of 20 MW AC. If the Initial Capacity of the Plant as of the
Commercial Operation Date is greater or less than 20 MW AC, then the amounts
above shall be proportionally adjusted.
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