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HomeMy WebLinkAboutStaff Report 150-08City of Palo Alto CRy Manager’s Report TO:HONORABLE CITY COUNCIL FROM:CITY MANAGER DEPARTMENT: UTILITIES DATE: SUBJECT: MARCH 10, 2008 CMR:150:08 ADOPTION OF A RESOLUTION APPROVING AMENDMENT NO. 1 TO THE LONG-TERM POWER PURCHASE AGREEMENT WITH AMERESCO KELLER CANYON, L.L.C. FOR THE PURCHASE OF ELECTRICITY GENERATED BY LANDFILL GAS FOR A TERM OF 20 YEARS AND AN AMOUNT NOT TO EXCEED $21.7 MILLION RECOMMENDATION Staff recommends that Council adopt the attached resolution approving Amendment No. 1 to the Long-Term Power Purchase Agreement with Ameresco Keller Canyon, LLC. for a 50% share of the 3.0 to 4.3 megawatt (MW) (gross) capacity of the Keller Canyon landfill generating facility located in Pittsburg, California. The amended contract price is $62.50/MWN in year 1, escalating at 1.5% per year, increased from the original $59.00/MWh in year 1, also escalating at 1.5% per year. The amended total contract amount is $21.7 million, reduced from the original $22.8 million due to a reduction in generation capacity. The term of the agreement is 20 years, unchanged from the original agreement. The resolution authorizes the City Manager to sign the amendment to the a~eement on behalf of the City. CMR:150:08 Page 1 of 5 BACKGROUND On March 5, 2007 the City Council approved revised Long-Term Electric Acquisition Plan ("LEAP") Guidelines (CMR:318:07), which direct staff to pursue a target level of new renewable purchases of 20% of the expected portfolio load by 2008 and increasing to a 30% target level by 2012 and 33% by 2015, while ensuring that the retail rate impact does not exceed 0.5 C/kWh on average. To date, Council has approved five long-term renewable energy contracts. Three of these contracts are operating (PPM High Winds, PPM Skiloh I Wind, and Ameresco Santa Cruz Landfill) and account for 13.5% of supply, one is under construction (.4aneresco Half Moon Bay Landfill), which will account for 4% of supply, and one is preparing to initiate construction (Ameresco Keller Canyon) which will provide another 1% of supply. Staff is currently negotiating with additional parties to meet the targets for 2008 and beyond. On August 5, 2005, the City entered into a power purchase a~eement with Ameresco Keller Canyon, L.L.C. Energy, Inc. ("Ameresco") to provide renewable power generated by the proposed Keller Canyon Landfill electric generating facility to be located in Pittsburg, California (CMR:350:05, Resolution #8552). The contract amount was $22.8 million over the 20-year tema of the a~eement, with a planned installed ~oss capacity of 3.0 to 4.3 MW, and a net capacity at the point of intercomaection between 2.8 MW and 4.1 MW. Alameda Power & Telecom (AP&T) is purchasing 50% of the output from the proposed plant and the City is purchasing the other 50%. On August 22, 2007, Ameresco notified the City and AP&T that the initial capacity of the plant wi!l be 3.808 MW (goss nameplate). On December 4, 2007, Ameresco notified the City and AP&T that due to a series of si~aificant unanticipated cost overruns incurred by the project to comply with local building codes, fire protection, habitat protection mad air quality permitting requirements, Ameresco is now maable to obtain financing for the project with the pricing in the original a~eement. Ameresco requested a 6% contract price increase in order to be able to move for~vard with construction. Ameresco has been a diligent and cooperative supplier to date, and has earned a stellar reputation in the industry. Ameresco was named the 2007 Industry Partner of the Year by the U.S. Enviromnental Protection Agency’s Landfill Methane Outreach Program. DISCUSSION Staff recommends that Council adopt a Resolution approving Amendment No. 1 to the Long- Tema Power Purchase A~eement with Ameresco Keller Canyon, LLC. for a 50% share of the 3.0-4.3 MW (~oss) capacity of the Keller Canyon landfill generating facility located in Pittsburg, California. The term of the ageement is 20 years, unchanged from the original ageement. The new total contract amount is $21.7 million in spite of the increased capital costs, due to the facility’s slightly lower generation capacity. The Ameresco Keller Canyon project has incurred additional project capital costs of over $2.5 million dollars. Staff has reviewed documentation of the various additional expenses, and has verified that costs have been incurred by the project in order to comply with local building codes, CMR:150:08 Page 2 of 5 fire prevention, habitat protection, and air permitting requirements, that were not anticipated by Ameresco or included in the economic modeling of the project. Staff believes that Ameresco has worked in good faith to contain the construction costs while not adversely impacting the quality of the project, and that the requested price increase of 6% is in the best interests of the City. Ameresco is shouldering a substantial portion of the additional costs, and the price even after the increase is substantially lower than the replacement costs. AP&T staff are requesting approval from the Alameda City Council in parallel with this request. The City could instead reject the price increase request, in which case the City would need to procure an equivalent amonnt of renewable electricity at a substantially higher price, and AP&T would then hold the right of first ref~tsal to purchase Palo Alto’s share of the output at the proposed price. A copy of the original contract is provided as Attactm~ent C for Council and available to the public on file with the City Clerk. The key terms of the contract, as amended, are as follows: Term: 20 years, with deliveries commencing when construction is completed and the facility is operational. The Keller Canyon facility is expected to be operational by November 2008. Quantity: 50% of the output from the facility. KeIler Canyon will have a goss capacity of 3.808 MW, (2.895 MW net), with expected annual generation of 22,800 to 30,000 M\Vh (11,400-15,000 MWh to Palo Alto, or approximately one percent of the City’s annual load). The contract includes a right to purchase the output from additions to the facility at a price determined at the time that additions are proposed, and the option for Palo Alto and AP&T to each assign its share of the contract to the other. Any such amendments would be subject to Council approval. Product: Electric generation fiom landfil! gas (LFG) operates around the clock, except for scheduled and unplanned equipment outages. NCPA wilt serve as scheduling coordinator for the facility. Price: $62.50/MWh in the first year, escalating at 1.5% per year, for a total contract amount of $21,700,000, based on estimated generation. The price in year 20 is $82.93/MWh. Credit: Ameresco, Inc. is a small company relative to the large investment-grade energy companies and does not have a credit rating from Moody’s or Standard and Poor’s. Energy deliveries are tied to a specific generator and specific location, as opposed to market contracts whose deliveries are often backed by financial strength or collateral rather than a physical asset. The contract includes minimuln equipment availability requirements, and provisions to allow Palo Alto or Alameda to take over operations of the facility should Ameresco stop operating the facility. Council waived the investment- grade credit rating requirement for this vendor, otherwise applicable to electric power contracts. CMR: 150:08 Page 3 of 5 Off-Ramps: Either party may terminate the contract if the other party does not meet its obligations under the contract, which include performance, payment, and meeting permitting, construction, and operation date milestones. The contract includes penalty payments for late completion of the project. Should the contract be terminated due to default, any damages, such as landfill gas energy replacement cost, that may be incurred are only due to the non-defaulting party. Venue for dispute resolution is the County of San Francisco instead of Santa Clara County due to the joint purchase with AP&T. RESOURCE IMPACT The estimated annual cost is $696,000 in the first year, rising to $1,112,000 in yea" 20. The average impact of the proposed change in contract price is approximately $48,000 per year, with a total cost impact of $960,000 over 20 years. These costs have been factored into long-term budget projections, and will be included in future budget year proposals. Annual costs may fluctuate slightly due to the as-delivered nature of a generator-specific purchase, but is expected to be within 5% of the estimated cost. The 20-year price schedule is $62.50/MWh escalating at 1.5% per year, which is roughly $8.00~\Vh below the current projected prices for base load electricity. This difference means there is a slightly favorable retail rate impact relative to market prices of about -0.1 C/kWh. The contract facilitates meeting the renewable energy supply procurement targets within the ½C/kWh limit approved by Council. POLICY IMPLICATIONS Renewable energy supplies are required to meet the targets established by Council in LEAP Guideline #6 (Renewable Energy Supply). The proposed renewable energy supply contract is a key element of the LEAP Implementation Plan (CMR:169:06) and supports the Council- approved Utilities Strategic Plan (CMR 432:02). The contract also supports the City’s Sustainability Policy Statement, adopted June 18, 2007 (CMR:260:07), the Green Government Pledge, adopted July 19, 1999 (CMR 284:99), the Palo Alto Climate Protection Plan (CMR:435:07), and elements of the Comprehensive Plan, specifically: 1.GOAL N-9: A clean, efficient, competitively-priced energy supply that makes use of cost-effective renewable resources, and Policies 2.POLICY N-44: Maintain Palo Alto’s long-term supply of electricity and natural gas while addressing environmental and economic concerns. 3. POLICY N-48: Encourage the appropriate use of alternative energy technologies. CMR: 150:08 Page 4 of 5 ENVIRONMENTAL REVIEW Execution of the Amendment does not constitute a project pursuant to Sec.21065 of the California Enviromnental Quality Act (CEQA), thus no enviromnental assessment is required. ~neresco Keller Canyon, LL.C. assumes responsibility for future CEQA compliance associated with development, finance, construction and operation of the facility. ATTACHMENTS A:Resolution approving Amendment No. 1 to a contract with Ameresco Keller Canyon, DEC. to purchase electricity generated by landfill gas from the Keller Canyon Landfill generating facility. B:Amendment No. 1 to Long-term power purchase a~-eement (landfill gas electric power) made betaveen the City of Palo Alto, as Purchaser and .adneresco Keller Canyon, DEC. C: Long-term power purchase a~eement (landfill gas electric power) made betaveen the City of Palo Alto, as Purchaser and Ameresco Keller Canyon, DEC. Attachment C is included as an attachment in Counci! member packets and available for review by the public in the City Clerk’s Office. PREPARED BY: Senior Resource Plam~er DEPARTMENT HEAD: VALE~ 6.iiONG Director ov f Uti~ies CITY MANAGER APPROVAL: HARRIS0~-~ Assistant City Manager CMR: 150:08 Page 5 of 5 NOT YET APPROVED ATTACHMENT A RESOLUTION NO. RESOLUTION OF THE COUNCIl, OF THE CITY OF PALO ALTO APPROVING AMENDMENT NO. 1 TO THE LONG-TERM POWER PURCHASE AGREEMENT WITH AMERESCO KELLER CANYON L.L.C. FOR THE PURCHASE OF ELECTRICITY GENERATED BY LANDFILL GAS FOR A TERM OF 20 YEARS AND AN AMOUNT NOT TO EXCEED $21.7 MILLION WHEREAS, on March 5, 2007, the City approved eight electric portfolio planning and management guidelines to guide the development and management of the City’s long-term electricity acquisition plan; one of the guidelines is to pursue target levels of new renewable energy purchases equal to twenty percent and thirty-three percent of the City’s expected energy load by 2008 and 2015, respectively; WHEREAS, the City is interested in purchasing power generation from renewable resources for the benefit of its electric customers; WHEREAS, by purchasing these sources of renewable energy, the City will help reduce the production of greenhouse gases; WHEREAS, on August 5, 2005, the City entered into a power purchase agreement with Ameresco Keller Canyon, L.L.C. Energy, Inc. to provide renewable power generated by the proposed Keller Canyon Landfill electric generating facility; WHEREAS, Ameresco Keller Canyon, L.L.C. Energy., Inc. has requested an increase in the purchase price in order to secure financing for the project facility; WHEREAS, the City has determined that the price increase is justifiable and in the best interest of the City; follows: NOW, THEREFORE, the Council of the City of Palo Alto hereby RESOLVE as SECTION 1. The Council hereby approves the City’s execution of Amendment No. 1 the Long-Term Power Purchase Agreement (Landfill Gas Power) made between Ameresco Keller Canyon, L.L.C., as Seller, and the City of Palo Alto, as Purchaser. The term of the contract shall be 20 years, commencing on the Commercial Operation Date of the proposed generation facility. Quantity shall consist of a fifty percent share of the maximum design goss 4.3 MW (gross) capacity plant output. Spending authority under the contract shall be twenty-one million, seven hundred thousand dollars ($21,700,000). The City Manager or his designee is hereby authorized to sign the contract with Ameresco Keller Canyon L.L.C. on behalf of the City. 080211 sya60503752 NOT YET APPROVED SECTION 2. With respect to the Council’s award of the Long-Term Power Purchase Agreement referred to in Section 1 above, the Council hereby waives the choice of venue and creditwotnthiness terms and conditions requirements of Palo Alto Municipal Code section 2,~.~0.340(c). SECTION 3. The Council finds that the adoption of this resolution does not constitute a project pursuant to Section 21065 of the California Environmental Quality Act and no environmental assessment is required. INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: City Clerk APPROVED AS TO FORM: Deputy City Attorney Mayor APPROVED: City Manager Director of Administrative Services Director of Utilities 080211 syn60503752 2 Attachment B A~,~ENDMJENT NO. 1 TO PO~VER PURCHASE AGILEE.rv~ENT DATED AUGUST 8, 2005 BETWEEN THE CITY OF PALO ALTO AND AMERESCO KELLER CANYON LLC This Amendment No. 1 to the Power Purchase Agreement dated August 8, 2005 ("Contract") i s entered into ,2008, by and between the CITY OF PALO ALTO, a chartered city and a municipal corporation of the State of California ("Buyer"), and Ameresco Keller Canyon LLC, a Delaware limited liability company, located at Framingham, Massachusetts("Seller"). RECITALS: WIffEREAS, the Contract was entered into between the parties for the provision of electricity and environmental attributes from a landfill gas to energy project; and WHEREAS, the parties wish to amend the Contract; NOW, THEREFORE, in consideration of the covenants, terms, conditions, and provisions of this Amendment, the parties agree: SECTION 1. Section 2.3 is hereby amended to read as follows: "Subject to the provisions of Section 4. ! (k), Buyer shall pay Seller $0.0625 per kWh of Energy delivered or tendered to Buyer at the Point of Interconnection, which price shall be escalated a~i a rate of t.5% (of the then-current price) annually on the anniversary of (i) the first day of the first full month following the Commercial Operation Date or (ii) if the Commercial Operation Date falls on the first day of the month, the Commercial Operation Date. The Price shall be the total compensation owed by Buyer for Output delivered or tendered to Buyer hereunder." SECTION 2. Except as herein modified, all other provisions of the Contract, including any exhibits and subsequent amendments thereto, shall remain in full force and effect. // 080220 sya 6050358 LN WITNESS WHEREOF, the parties have by their duly authorized representatives executed this Amendment on the date first above written. CITY OF PALO ALTO Assistant City Manager APPROVED AS TO FORM: Deputy City Attorney AMERESCO KELLER CANYON LLC, By Amere~co, In~,,~its sole. member Nine: Michael T. Bakas Title: Vice President APPROVED: Director of Utilities 080220sya6050358 PO ~ ER PURCHASE AGREEh’IEN-T ATTACHMENT C This Power Purchase Agreement is entered into this ,_~ day of August, 20{95 by and between The Cib~ of Palo :Alto, a chartered city organized under the laws of the State of California and Ameresco Keller Canyon LLC, a Delaware limited liabiliV company. RECITALS Seller intends to develop, finance, build, own and operate a Landfill Gas elec~ic generating ~aciliV to be located at the Keller CanTon Landfill (the "Landfill") in the Cib~ of Pittsburg, California, on a site leased frorn Keller ;vb.~c~_ o;~.~s the Landfill.Canyon Landfi!l Company ("BYI"), ~ ’ " Buyer is engaged in the procurement and supply of electricity to residential and commercia! customers in u~e City of Pa!o A!to. Buyer wishes to purchase a portion of the Output of the Plant and intends to resell related Energy to its residential and corm-nercial customers. Buyer is willing to purchase, and Seller is willing to sei], a portion of the Output of the Plant, on the tem-~s and conditions and at the prices set forth in this Agreement. o Seller mah, deten-nine to expand the Plant in the furore depending on the availability of LandfilI Gas and other factors in accordance with the terms of this Agreement. Buyer will have a right of first refusal to purchase Expansion Plant Output, such right to be exercisable as provided in this Agreement. NOW THEREFORE, in co~.s~dera~on of these premises and the muma! pro~ses set forth below, Se!ler and Buyer agree as follows. SANFFL,kN 90 t 0.3 (2 K) AGREEMENT ARTICLE I - DEFINITIONS Initially capitalized remus, whenever used in this Agreement, have the meanings set forth below unless otherwise herein defined. The term :’including," when used in this A~eement, sha!l mean to include "without limitation." 1.1 Agreement: This Power Purchase A~eement, including a!l appendices, as it may be amended from time to time. 1.2 Alameda: Alameda Power & Telecom, a department of the City of Alameda. 1.3 Alameda Agreement: That certain power purchase agreement entered into by Alameda and Seller on or about the date hereof" concerning a portion of the Output of the Plant. 1.4 Availability Threshold: The mechanical availabilit)’ of the Plant calculated as of the end of each calendar month during the Tem’l as a percentage in accordance with the fo!lowing: A=!00 x Available Hours Base Hours Where: A = Availability Threshold Available Hours = the number of hours during tl-~e twenty-fottr (24) prior months in which the Plant is capable of delivering Energy to the Point of Interconnection; provided that, to the extent that the Plant is not capable of delivering all of the net Initial Capacity in any hour, the Available Hours with respect to such hour shall be reduced pro rata to reflect the fraction of the net InitiaI Capacity the Plant is capable of delivering in such hour. Base Hours = the number of hours during the twenty-four (24) prior months; pro~ided that, to the extent that the Plant is partially or who!ly incapable or otherwise unable to deliver Energy in any hour as a resttlt of a Force Majeure Event or because of fuel unavailability in any hour due to no fault or negligence of Seller, that hour (or if the Plant’s capacity- is only partially constrained, SANFR.4N 90103 (2K) the pro rata portion of that hour) shall be excluded ~om the Base Hours. There shal! be no Availability Threshold during the first twelve (!2) months following the Con-~nercia! Operation Date. Starting with the thirteenth (13th) month after the Cormmercial Operation Date and continuing through the twenty=~tburth (24th) month, the above formula will be used to determine the Availability TMeshold with the exception that both Available Hours and Base Hours wil! be calculated starting with the first hour of operation on the Corrm~ercial Operation Date and including all relevant hours thereafter to the end of the month relevant. Starting with the twenty=fifth (2fth) month, the Availability Threshold shall be calculated on a rolling basis using the previous twenty=four (24) months. 1.5 BFI: As defined in the Recitals 1.6 Buyer: The City of Palo Alto, a chartered cib organized under the laws of the State of California, and any successor or pen-nitted assignee. 1.7 Change in Law" The enactment or issuance of any new law or reguIation, 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, tribuna! or Governmental Authority contrary to the existing officia! interpretation thereof, in each case coming into effect after the date of this Agreement and which must be complied with in order for the Plant to be constructed and operated lawfully. 1.8 Commercia! Operation: The condition of the Plant whereupon it (a) is certified by Seller to be complete in accordance with manufacturers’ recormT~endations except for punch list items, and (b) has passed the performance test set forth in Appendix E while SyT~Chronized with the LDC Systel-n or ISO ~ansmission grid. 1.9 Commercial Operation Date: The date upon w_hich Commercial Operation first occurs. 1.10 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 property is bound. 3 SAN F~,kN 90103 (2K) 1.11 EA Agency _’Any local, state or federal entity., or any other Person, that has responsibiiiE¢ for or jurisdiction over a program involving transferabilib- of Environmental Attributes, including the Clean Air Markets Division of the United States Environmental Protection Agency, the California Resources, Conservation and Development Commission, the California Public Utilities Corn_mission, and any successor agency thereto. 1.12 Emergency: Any condition or situation which (i) endangers life or property or (it) affects Buyer’s physical ability to maintain safe, adequate, and continuous electric power and energy to Buyer’s customers. 1.13 Energy: The electricivy generated by the Plant and delivered to Buyer and Alameda by the Seller, pursuant to this A~eement and the Alameda Agreement, respectively-, at the Point of Interconnection, as expressed in units of kilowatt-hours (k~F~) or rnegawatt-hours (M\Vh), including Test Energy. 1.14 Environmental Attributes: Any and all credits, benefits, en~ssions reductions, offsets, and allowances, howsoever entitled, attributable to the generation from the Plant or Expansion Plant(s), as the case may be, and its displacement of conventional energy generation. Environmental Attributes include but are not limited to: (1) any avoided emissions of pollutants to the air, soil or water such as sulfur oxides (SOx), nitrogen oxides (NOx), carbon monoxide (CO) and other pollutants; (2) any avoided emissions of carbon dioxide (CO2), methane (CH4) mad other greenhouse gases (GHGs) that been determined by the United Nations Intergovemmental 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 (3) the reporting rights to these avoided emissions such as Green Tag Reporting Rights. Green Tag Reporting Rights are the right of a Green Tag purchaser to report the ovv-nership 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 inctude 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 4 SANFP~\N 90103 (2K) ~om the Plant or Expansion P!ant(s), (ii) production tax credits associated with le constRtction or operation of the Plant, Expansion P!ant(s), Landfi!], or any other associated contact or right, and other financial incentives in the fon-n of credits, reductions, or allowances associated with the Plant, Expansion Plant(s), Landfill, or any other associated contract or fight, that are applicable to a state or federal income taxation obligation, (iii) fue!-re]ated subsidies or ~’tipping fees" that may be paid to Seller to accept certain fftels, or local subsidies received by the Seller or the owner of the Landfill lbr the destruction of particular pre-existing pollutants or the promotion of local environmental benefits, or (iv) emission reduction credits encumbered or used by the Plant or Expansion Plant(s) for compliance with local, state, or federal operatinz and/or air quality permits. 1.15 Environmental Attributes Reporting Rights: All rights to report o~,-nership of the Environmental Attributes to any person or entity, under Section !~05(b) of the Energy Policy Act of 1992 or otherwise. 1.16 Environmental Law: Any federa!, state and local taws including statutes, regulations, rulings, orders, administ~ative interpretations and other governmental re;trictions and requirements relating to the discharge of air pollutants, water pollutants or process waste water or otherwise relating to the environn~ent or hazardous substances, as amended from time to time. 1.17 Expansion Plant: Any expansion of the Plant fl-om its Initiai Capacity, or any other electricity generating facility owned or controlled by Seller or its affiliate(s) Iocated at the Landfill and fueled by Landfi!I Gas. Each such expansion of the.Plant or additional facility shall be deemed to be an ~’Expansion Plant." 1.18 Expansion Plant Output: All capacity, energy, associated Environmental Attributes, anci!lary services, contributions towards resource adequacy or reserve requirements (if any) and any other reliability or power attributes produced by Seller at any Expansion Plant. 1.19 FERC: Federal Energy Regulator Corn~ssion and its successor organization, if any. 1.20 Force Majeure Event: Any act or event that delays or prevents a Part), from timely perforating obligations under this Agreement or fl-om complying with 5 SANFP~a.N 90103 (2K) ~h_~ A~eement to the extent that such act or event isconditions required under ~ ~ reasonably un%reseeable and beyond the reasonable control of and without the fault or negligence of the Parff relying thereon as justification for such delay, nonperfon~.ance, or noncompliance. Force Ma]eure Events ~pically include: (i) acts of God or the elements, exFeme or severe weather conditions, explosion, fire, epidemic, landslide, mudslide, sabotage, lighmin~, earthquake, flood or si~lar cataclysmic event, acts of public enemy, war, blockade, civil insunection, riot, civil disturbance or s~ike or other labor difficuley caused or suffered by a Par~; (it) any res~aint or res~iction imposed by law or by rule, regulation or other acts or o~ssions of ~ovemmental authorities, whether i~deral, 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 at~cted Par~ has not applied for or assisted such act by a governmental authority); and (iii) e!ec~ic ~ansmission intemtptions or curtailments (not including any such event that results from a failure by Buyer to obtain fim~ transmission or similar rights, or otherwise to make congestion-related pa~ents); provM¢~ that the tem~ ~’Force Majeure Event" does not include (a) economic conditions that render a Party’s perfo~ance of this Agreement at the Price unprofitable or otherwise uneconomic (including Buyer’s ability to buy Energy or Environmental At~ibutes at a lower price, or Seller’s ability to sell Energy or Environmental Attributes at a higher price, t~an the Price), (b) a governmental act by Buyer that delays or prevents Buyer from timely perfo~ing its obligations under this Agreement, (c) a Plant Outage, including as a result of a t~ilure or shortage of landfill gas, except, in any case, if caused by an event or circumstance that meets the requirements set forth in this Section 1.18 (other than as described in (iii) above), (d) failure or delay in grant of Pemfits, or (e) failures or delays by the LDC or the ISO in entering into all a~reements with Seller contemplated by this Agreement. 1.21 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. 6 90103 {2K) 1.22 Initial Capacity: The installed ~oss capacity of the Plant on the Cow,mercia! Operation Date, such capacity to be not less than 3 MW and not more than 4.3 MW (~-oss nameplate), and not less than 2.3 MW and not more than 4.1 bfW (net at the Point of Intercormection) and as further specified pursuant to Section 4.3(c). 1.23 Interconnection" Construction, installation, operation and maintenance of all Interconnection Facilities. 1.24 InterconnectionAgreement: The a~eement between Seller and LDC pursuant to which Setler and LDC set ~brth the terms and conditions for Interco.mec~on of the Plant to the LDC System, as anaended from. time to time. 1.25 Interconnection Facilities: All the facilities installed for the purpose of interconnecting the Plant to the LDC System, including, but not limited to, transformers and associated equipment, relay and switching equipment and safety equipment. 1.26 ISO: The California Independent System Operator Corporation, or its functiona! successor. 1.27 Landfill Gas: The gas (and its constituent elements) generated fi-om decomposition of materials deposited in the Landfill. 1.28 LD Amount: The Monthly LD A~nount multiplied by 12 (twelve). 1.29 LDC Pacific Gas and Electric Company, a California corporation. 1.30 LDC System: The electric power generation, transmission, substation and distribution facilities owned, operated and!or maintained by LDC, which shall include, without limitation, after construction and installation, the circuit reinforcements, extensions, and associated tennina! facility reinforcements or additions required to interconnect LDC’s facilities with the Plant. 1.31 Lender(s): Any Person(s) providing money or extending credit (including any capital lease) to Seller for (i) the construction of the Plant, (it) the term or permanent financing of the Plant, or (iii) working capital or other ordinary 7 SANFR.~.N 90103 (2K) business requirements for the Plant. creditors of Seller. "Lender(s)" shall not include trade 1.32 LFG Agreement: As defined in Section 4.2(d). 1.33 Monthly LD Amount: The product of (i) $7000 per MW, (it) Buyer’s Percentage Share and (iii) the Initial Capacib, specified under Section 4.3(c) (net at the Point of Interconnection). 1.34 MW: Megawatt. 1.35 MWh: Megawatt hour. 1.36 Outage: A physica! state in which all or a portion of the Plant is unavailable to provide Energy to the Point of Interconnection, or in which an5, portion of the LDC System is unavailable to receive Energy, to the extent that the unavailabiliu" affects the LDC System’s abiliU to accept delivery of Energy at the Point of Interconnection, whether planned or unplanned. 1.37 Output: All actual capacity of the Initial Capacity and associated Energy, as wel! as the fo!towing, as associated with the Initial Capacity and/or associated Energy: Environmental Attributes; ancillary services; conthbutions towards resource adequacy or reserve requirements (if any) and any other reliability or power attributes. 1.38 Parties: Buyer and Seller, and their respective successors and pemaitted assi~-~ees. 1.39 Party: Buyer or Seller, and each such Party’s respective successors and permitted assignees. 1.40 Percentage Share: Fifty percent (50%), as may be adjusted from time to time in accordance with Section 2.2(e). 1.41 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. 8SANFIL-kN 90103 (2K) 1 Person: :~_ individua!, parmership, corporation (including a business trust), limited tiabi!i~ company, joint stock company, ~ast, unincorporated association, joint venture, Oovemmental Authori~~ or other entity. 1.43 Plant: The generation facilities described in the Recitals to be constructed and owned by Seller and located on the Site for the generation and delivery of elec~icity including the step-up rr ns~ormer, revenue quali~- meter and a!l other facilities up to the Point of tntercormection, but not including an); Expansion Plant. 1.44 Point of Interconnection: The point on the electrical system where the Plant is physically interconnected with the LDC System, which is anticipated to be at the high side of Setler’s step-up transformers at the Plant. 1.45 Price: As defined in Section 2.3. 1.46 Production Incentives: _.’~y and al! tax credits, deductions, allowances and exemptions applicable to federal, state and local taxes and any other pa?~.ent, credit, deduction, benefit, ~ant or monetary incentive provided by any federal, state or local governmental authority- or any Person, and al! air emission credits, reductions or offsets, whether now in effect or arising m the furore, in each case arising from the activities contemplated by this Agreement, including the extraction, sale, purchase, processing and!or distribution of LandfilI Gas and/or the generation and sale of electricity using Landfill Gas as a fuel, including "Renewable Energy Production Incentive Payments" fl:om the U.S. Department of Energy, emission credits, reductions, offsets or any other similar benefits arising from the generation, collection, production, purchase, use, reduction, conversion, destruction or resale of Landfill Gas. Notwithstanding the foregoing, Production Incentives shalt not include anything that qualifies as Output as defined herein (including any Environmental Attributes), and shall include Section 29 Credits and Section 45 Credits. 1.47 Prudent Utility Practice:Those practices, methods and equipment, as changed from time to time, that: (i)when engaged in are cormnonly used in the United States of America in pta.tdent electricaI engineering and operations to operate landfill gas 9SANFR.4N 90103 (2K) generation electric equipment and related electrical equipment lawiflly and with safety-, reliability, efficiency- and expedition; or (it)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, re!iabi]ity, 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. 1.48 Requirements of Law: Collectively, any federal or state law, treab,, franchise, mle, regulation, order, writ, judgment, injunction, decree, award or detemzination of any arbitrator or a court or other Governmental Authority’, in each case applicable to or binding upon Seller or Buyer or any of their property or to which Seller or Buyer or any of their respective properties are subject. 1.49 BFI: As defined in the Recitals. 1.50 Section 29 Credits: Those tax credits a-vaiiable under Section 29 of Subtitle A, Chap. 1A, Part IV of the Internal Revenue Code of 1986, as amended as of the date of this A~eement. 1.51 Section 45 Credits: Those tax credits available under Section 45 of Subtitle A, Chap. 1A, Part IV of the Intema! Revenue Code of 1986, as amended, or any other similar state, federal or local tax credits, deductions; payments or benefits arising from the purchase of Landfi11 Gas or the generation and sale of electricity using Landfill Gas as a fuel, not including any Environmental Attributes. 1.52 1.53 Seller: Ameresco Keller Canyon LLC, a Delaware limited liability company, and any successor or permitted assignee. Site: The real property in Pittsburg, California on which the Plant is to be built and located, as more particularly described in Appendix A. I0 SANFIt-\N 9010.~ (2K) 1.54 Site Control: The point at which Seller satisfies one or more of the following conditions: (!) Seller is (a) the lessee under a lease, or (b) the ~antee under an exc!usive easement, with the owner (or its subsidiary-) of the Landfill that a!loxvs Seller to constrttct and operate the Plant at the Site during the Term in accordance x;’ith this A~eement; (2) So!let has a fee o;xmership of the Site; or (3) any other fom-~ of site control acceptable to Buyer in its reasonable discretion. 1.55 Station Service Power: The. energy used by Seller to operate the Plant. 1.56 Term: The period of time during which the Agreement is in effect. 1.57 Test Energy: Energy generated by the Plant and delivered to the Point of Interconnection prior to the Comn~ercia! Operation Date. ARTICLE lI TEP~’I, PURCHASE AND SALE 2.1 Term This A~eement shall be effective upon execution by authorized representatives of both Parties and, unless earlier terminated pursuant to an express provision of this A~eement, shall continue unit! the twentieth (20~h) m~niversa~; of the Co~r~nercial Operation Date. 2.2 Purchase and Sale of the Output (a) In accordance with the ten:ns and conditions hereof, commencing on the Comna~ercial Operation Date and continuing throughout 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, its Percentage Share of the Output produced during the Term pursuant to the terms of this A~eement. Prior to the Commercial Operation Date, Buyer shall pttrchase and accept from Seller at the Point of Interconnection and pay for, the Percentage Share of Output relating to Test Energy pursuant to the terms of this Agreement. Att Test Energy sha!I be scheduled in accordance with the procedures set forth in Appendix D. The Parties aclmow!edge that Alameda has a~eed to purchase, accept from Seller at the Point of Intercom~ection and pay for, the remainder of the Output produced during the Term pursuant to the tel-ms of" the Alameda A~eement. Seller shall not sell to any other party, and Buyer may claim credit for, Buyer’s Percentage Share of the Output as ma)," be available from time to time. (b) Tl~_roughout the Terns, Seller shall sell and transt%r to Buyer, and Buyer shall purchase and receive from Seller, al! fight, title and interest in and to the Environmental Attributes associated with Buyer’s Percentage Share of the Output, if any, whether now existing or subsequently generated or acquired (other than by direct purchase from a third pardr) by Seller, or that hereafter come into existence, during the Tet-m, as a component of the Output purchased by Buyer ~om Seller hereunder. 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. If Seller receives any tradable Environmental A_ttributes based on the greenhouse gas reduction benefits or other emission offsets att~-ibuted to its fuel usage, it shall be entitled to retain sufficient Environmental Attributes to ensure that there are zero net emissions associated with the production of electricity from such facility. Seller sl~_alt not assign, transfer, convey, encumber, sell or otherwise dispose of all or an), portion of the Buyer’s Percentage Share of the Environmental Attributes to an), Person other than Buyer. Seller makes no -~,-ritten or oral representation or warranty, either express or implied, regarding the cunent or future existence of any Environmental Attributes. (c) During the Tem-~, 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 wil! document the production of Environmental Attributes under this Aoo-reement by delivering with each invoice to Buyer an attestation for Environmental Attributes produced by- the Plant and purchased by Buyer in the preceding calendar month. The fon:n of attestation is set forth as _Appendix B. Appendix B shall be updated or changed by the Parties, as necessaor, 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 SAN FP, AN 90103 execute all such documents and instruments in order to effect the t~-ans~%r of the ]~.nvironmentat Attributes specified in this Azreement_ to Bu)w~r or its designees as Buyer may.r~asonaoly request. In the event of the promulgation of a scheme involving Environmental Attributes administered b?; EA Azency~. upon notification by EA _,.%~ency that any trans~%rs contemplated by this A~eement will not be recorded, the Parties shall promptly cooperate in takin~ al! reasonable actions necessary so that such transfer can be recorded. Each Party shall promptly give the other Par~ copies of all documents it submits to the EA Azency to effectuate any ~ansfers. (e) From time to time during any portion of the Term when the Alameda Agreement is in effect, upon notice to Seller si~ed by both Bu),er and Alameda, Buyer and Alameda may adjust the Percentage Share in their sole~ unlimited discretion, provided that the sum of Buyer’s Percentage Share and the percentage share of Alameda under the Alameda A~eement shall equal 100%. (1) In the event that Alameda fails, for any reason, to purchase or accept delivery of its share of the Output, or any portion thereof, under the Alameda Agreement and such failure can reasonably be expected to continue for less than thirty (30) consecutive days, Seller shall, as soon as practicable, offer to Buyer in writing the right to purchase such Output under the same terms as set forth in this Agreement Buyer shall have twenty-four (0_4) hours to accept such of±%r. Should such failure reach thir~ (30) consecutive days, and is. reasonably expected to continue for an additional twenty-nine (29) consecutive days or tess, then Buyer shall again have the opportunity to purchase such Output under the same temps as set forth in this AEreement. Buyer shall have twenty-four (24) hours i%om the time Seller notifies Buyer in w~itinE of such extension to accept such offer. The foregoing shall be repeated for each failure that is reasonably expected to last for less than thirty (30) consecutive days. Should any such failure be reasonably expected to continue for thirty (30) consecutive days or more, the Parties shall employ the procedure set forth in Section 2.2@)(2) below. (2) In the event that Alameda fails, for any reason, to purchase or accept delivery of its share of the Output, or any portion thereof, under the Alameda A~eement and such failure can be reasonably expect to continue for thirty (30) consecutive days or more~ Seller shall, as soon as practicable, offer to Buyer in writing the right to purchase such Output at the price detemined by Seller in good faith to reflect the prevailing market price for the Output, but, in i3 other respects, under the terms of this A~eement. Buyer shall have five (3) days to infoi-m Seller, in writing, of its intent to consider the offer. Should Buyer info~-m Seller that it is considering the offer, Buyer shall have sixb~ (60) day-s in which to notify Seller, in writing, of its acceptance or rejection of the offer. During the period in which Buyer is considering Seller’s offer (which period may be terminated upon twenty-four (24) hours written notice to Seller), Buyer shall purchase such Output, in addition to its own Percentage Share of Output, under the same teh-ms as set forth in this A~eement. If Buyer accepts Seller’s offer to purchase the Alameda Output, the parties shall execute an amendment to this A%eement settin~ ~%rth the price of the additional Output. If Buyer rejects Seller’s offer to purchase the Alameda Output, Seller shall have the right to sell to one or more third party buyers. In such case, Seller shall promptly- certify in writing to Buyer that the terms and conditions of the sale to such third path- buyer(s), 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, and Seller shall provide the relevant contract and any other supporting documentation for such certification. If such tem-~s are less favorable to Seller than as previously offered to Buyer, Buyer shall have the right of first refusal consistent with the terms offered to the third part7 buyer(s). Buyer shall have sixty (50) days to noti~- Seller in writing of its intent to accept such offer. Upon the sate of such Output to any third party buyer(s), Buyer shall t~ave no further rights to be offered or to purcl~ase such Output. Buyer consents to a ~or~_espondin~ provision being included in the Alameda A~eement, and a~rees that if the conditions requirin~ Seller to offer Buyer’s share of the Output to Alameda are satisfied, Se!ler’s duties to mitigate damages, if any-, shall be affected by Seller’s obligations as stated herein in Section 2.2(e). (f) Seller agrees that it shall not consent to an assignment, amend or waive any of its material rights under the Alameda Agreement, a&~nister the Alameda A~eement in a manner materially different than its administration of this A~eement, or otherwise treat Alameda materially differently than Buyer, without Buyer’s express prior written approval, which approval may be withheld in Buyer’s sole and unlimited discretion. 2.3 Price Subject to the provisions of Section 4.1(k), Buyer shall pay Seller $0.059 per k\x& of Energy delivered or tendered to Buyer at the Point of IntercopJCection, which price shal! be escalated at a rate of t.5% (of the then-current price) annuaIly on the anniversary of (i) the first day of ti-~e first fl, tll month following the Corrm-~ercial Operation Date or (ii) if the Commercial Operation Date fails on the first day of the month, the Commercial Operation Date. The Price shal! be the total compensation owed by Buyer for Output delivered or tendered to Buyer hereunder. 2.4 Tax Credits Buyer agrees and aclmowledges that all Production Incentives shal! be owned by Seller and/or the owner of the Landfill; provided, that to the extent Buyer pays in ful! for emission offsets and otherwise makes any additiona! payments 4.n(j) in full, SeIler sna_l pay Buyer the Percentage Sharepursuant to Section / ~~ 1 of up to fir) percent (50%) of the ne~ economic value (net of reasonable transaction fees) realized by Seller from the Section 45 Credits until Seller has reimbursed Buyer for a!l such pa?~ents made by Buyer pursuant to Section 4.3(j). Buyer sha!l not claim Production Incentives. Buyer agrees to cooperate with Alameda and Seller and!or the owner of the Landfi!l as may be necessary to allow maximization of the value o~ and realization oi; a!t Production Incentives; provided that Buyer shal! 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 peru-fitted under this .A~-eement), that wouId in any way reduce or eliminate the availabilitv to Selter or the ov,~er of the Landfill of any Production Incentive, including without limitation the Section 29 Credits, and Buyer shall forego any credits or benefits available to it (other than Environmental AtU~butes) to the extent necessatT to atIow Seller and the owner of the Landfi!l to obtain the full benefit of the Production Incentives, but in no event shall Buyer be required to forego receipt of Energy. 2.5 Right of First Refusal for Expansion Plant and Expansion Plant Output (a) Seller may in its sole discretion determine, from time to time, during the Term to develop, finance, construct and!or operate an Expansion Plant. Each time such a determination is made, Seller shall notify Buyer of such I5SANFRAN 90103 (2K) deiemrdnation and shall offer in writing to sell the Percentage Share of the Expansion Plant Output to Buyer. Seller shall offer the remainder of the Expansion P]ant Output to Alameda under the same temps and conditions as are offered to Buyer. If _Alameda does not take such share of this Expansion Phnt Output or if Alameda desires and Seller allows Alameda to take ~ portion of such share of this Expansion Phnt Ou~ut~ then Buyer shs]! have the rizh~ to take ~11 or ~ portion of the rejected Expansion Phnt Output under the same temps ss tt~ose offered in connection with Buyer’s Percentage Share of the Expansion Plsni OutpuL such right to be exercised by Buyer within sixU- (60) days i%llowing <~itien notice from Seller or be deemed iKsvocsbly ~o hsve been waived. The offer shall include ~he price to be paid by Buyer for the Percentage Share of the Expansion Plant OutpuL the tem~ of the proposed power purchase agreement end the other principal te~s end conditions of the proposed sale. If Buyer wishes to accept such offer to purchase ~!! (but not less then ell) of such Percentage Share of ~he Expansion Phnt Output, Buyer shall so notify Seller within sixU" (60) days of its recdpt of such off%r. Buyer and Seller shall promptly thereafter enter into good faith negotistion of ~ definitive power purchase szreemsnt inco~orating the temps of such offer. Until such sn Expansion Plant PPA is executed, the Seller’s proposal, accepted by Buyer (including any modifications s~eed upon in ~iting by bo~h parties), shell con~o] ell des]inzs between the Parties rehtinz to the Expansion Phnt. Should any issue arise that is not covered by such documentation: the temps of this A~eement shall apply. (b) If Buyer does not accept Seller’s offer to purchase its Percentage Share of the Expansion Plant Output within sixty (60) days of receipt of Seller’s offer, Seller shall be free 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 break up Buyer’s Percentage Share of the Expansion Plant Output to sell to multiple independent buyers, Seller shall notify Buyer in writing of the temz~s and conditions of such offers and Buyer shall again have the right of first refusal consistent with the tem~s set forth above for each of the lesser amounts being offered to the third parties. If Buyer does not purchase its Percentage Share of the Expansion Plant Output and Seller sells such Expansion Plant Output to a third part)’, it 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 SANF~\N 90103 (2K) as the price and other te~s and conditions set forth in Seller’s offer to Buyer, and Seller shall provide the relevant contract and any- other supporting documentation for such certification. Upon the sale of such Expansion Plant .,vt~h this Agreement, Buyer shall have no further rightsOutput in compliance ~ -~. to be offered or to purchase such Expansion Plant Output. Buyer’s refusal of its Percentage Share of the Expansion Plant Output from one Expansion Plant shall riot affect Buyer’s right to purchase its Percentage Share of the Expansion Plant Output from a later Expansion Plant under the terms of this A~eement. Seller shall not se!l or provide Buyer’s Percentage Share of the Expansion Plant Output to any third parb, unless it can do so without compromising in any material way its ability to provide Buyer’s Percentage Share of the Output to Buyer hereunder. The materiality of any- such impact shall be determined by- Buyer in its reasonable discretion. If Seller sells or provides Expansion Plant Output to any third parb~-, Seller shall not employ Landfill Gas to fuel the Expansion Capacity in any hour unless the Landfill Gas flow requirements of the Initial Capacity have been, and shall continue to be, met. 2.6 Option to Install Emission Controls Buyer and Alameda may at their option, exercised jointly from time to time, install emission controls on the Plant in connection with the Initial Capacity and on any Expansion Plant fl-om which Buyer or Alameda purchases Expansion Plant Output (so long as Euyer and/or Alameda purchase all such Expansion Plant Output) beyond those then required to meet the Requirements of Law applicable to Seller or the Plant; provided that (a) Buyer and Alameda shalt (i) bear aI1 costs and financia!, regulatory and operational risks thereof, including without 1imitation the capital cost thereof and any increase in operation or maintenance expenses, and (ii) shall keep Seller whole in all respects, including for decreases in Output and other adverse effects on the Initial Capacity and the Expansion Capacity and its perforn~ance, increases in operations and maintenance costs and failures of such emission controls to operate, and (b) neither Buyer nor Alameda shall make any such changes to the Initial Capacity or the Expansion Capacity without the consent of Seller to the design and plan for implementation of such changes, such approval not to be unreasonably withheld. 17 SANFR.,\N 90103 (2K) ARTICLE 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. Such metering equipment, including any equipment required for communicating meter data (e.g., a dedicated data line) to Buyer or the ISO, 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 ISO rides. Seller shall exercise reasonable care in the laaintenance and operation of any such metering equipment, and shall test and yetiS" the accuracy of each meter at least annually. Seller shall in~brm Buyer in advance of the time and date of these tests, and shall pen-nit Buyer to be present at such tests and to receive the results of such tests. Subject to Buyer paying for its Percentage Share of the cost of any update or upgrade to such metering equipment pursuant to a new requirement of the ISO, the LDC or _any other Governmental Authority adopted following the Cor~n_mercial Operation Date, each of Selter’s meters shall be accurate to the metering specifications then in effect for ISO 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 ti~zae data from the ISO meter to the ISO and NCPA, while adhering to both ISO and NCPA con~-nunications protocols. Seller shall provide a copy of each Certificate of Compliance issued by ISO, if any. Buyer and NCPA shall be provided access to all monitored SCADA points to be used at their discretion in real time monitoring. Buyer may further, at its sole cost and expense, install and maintain check meters and all associated measuring equipment necessary to permit an accurate determination of the quantities of Energy delivered under this Agreement provided that said equipment does not interfere with the Seller’s metering equipment. Seller shall permit Buyer or Buyer’s representative access to its Plant for the purpose of installing and maintaining such check meters. Seller shall submit to the ISO, or allow the ISO to retrieve, any meter data required by the ISO related to the Plant output in accordance with the ISO’s settlement and hi!ling protocol and meter data tariffs. Buyer shall have reasonable access to relevant meters 18 SANFRAN 90103 (2K) and associated facilities, as well as real time access to nil meter data; as is necessary for Buyer or its agent to perfomn its duties as scheduling coordinator and comply with the requirements of the ISO Tariff. Buyer shall use commercially reasonable eff~orts to coordinate with Alameda concerning check meters, associated measuring equipment and meter tests so as to avoid ut~ecessary duplication of equipment or efforts. 3.2 Billin~ Seller shall read the meter at the end of each calendar month of the.Temz, and provide to Buyer on or before the !0~ day of the fo!lowing month an invoice based upon the meter data for Energy delivered in such calendar month and the con-esponding attestation pursuant to Section 2.2(d). Such invoice may be transmitted electronical]y via e-mail to *AcctsPayable~ncpa.com, or to any other email address designated in writing by Buyer, with a copy to follow via United States Mail to the notice address designated below. Should either the Seller or the Buyer determine at a later date, but in no event later than two (2) );ears after the original invoice date, that the invoice amount was incorrect, that Pare./shall promptly notify the other Party of the error. If the amount invoiced was too low, Buyer shall, upon receivin~ verification of the e~or and supporting documentation from the Seller, pay any undisputed portion of the difference within thirty (30) days of receipt of verification. If the amount invoiced was too high, Seller shall, upon receivin~ verification of the enor and supporting documentation from the Buyer, pay an) undisputed portion of the difference within third" (30) days of receipt of verification. Any such amount shall be subject to the interest rate as designated in Section 3.3 runninz from the original due date ofpa)~ent. 3.3 Payment For Energy delivered to Buyer pursuant this Agreement, Buyer or its agent shall pay Seller by electronic transfer of funds by the later of the 20t~ day of the month or the 10’:~ business day after the invoice is received in accordance with Section 3.2. If such due date falls or, a weekend or legal holiday, such due date shall be the next day which is not a weekend or Iegal holiday. Payments made after the due date shalt be considered late and shalI bear interest on the unpaid balance at an annual rate equal to two percent (2%) plus the average daily prim_e rate as determined from the "Money Rates" section of" ~9SANFR-.\N 90103 (2K) tlie West Coast Edition of N~.e }~;aL~ Srresr ~.~r~a~ for ~hs days of the his pz?~msnt period multiplied by the number of d~ys elapsed from znd includinz the day after the due dat% to and includin~ the " ~ ~.p%~m~n~ date. Interest shaN be computed on the basis of a ~f-day year. In the event this index is discontinued or its basis is substantially modified, the Parties shall a~rse on a substitute equivalent index. Should Buyer in ~ood i~ith dispute the amount of an invoice, Buyer or its agent may withhold such disputed amounts until the dispute is resolved by arbi~-ation or other pemissible method. Such disputed amounts sha!l bear interest at the interest rate described above. Failure of Buyer or its a~ent to withhold any amount is not a waiver of Buyeffs fight to challenge such amount. Both Parties shall maintain al! records relatin~ to the other Party or this A~eement Ibr a minimum of two (2))ears, and shall pemit the other Party, upon reasonable notic% to inspect and audit such records as the r~qusstin~ Parb~ deems reasonably nscsssaW to protect its rights. ARTICLE IV SELLER’S OBLIGATIONS During the Term, Seller hereby agrees to perform the following affin~ative obligations: 4.1 Development. Finance. Construction and Operation of the Plant Seller shall: (a) Develop, finance and construct the Plant. (b) Provide Buyer access to a "rea! 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 interact-based and include alarms. (c) Seek, obtain, maintain, comply with and, as necessary, renew and modify from time to tim_e, all Permits, certificates or other authorizations which are required by any Requirements of Law or Governmental Authority- as prerequisites to engaging in the activities required of Seller by the Agreement and to meeting Seller’s obligation to operate the Plant consistently- with the terms of the Agreement. 2O SANF~,\N 9010~ (2K) (d) Operate, maintain: and repair the Plant in accordance with this A~_-eement, all Kequirements of Law applicable to Seller or the Plant, Contractual Obligations, Psmits and in accordance with Prudent Utiliff Practice, including with r~spect to ~fforts to maintain avai!abili~ of th~ Initial Capacity. (e) Obtain and maintain the policies of insurance in amounts and with coverages as set iortl~_ in Appendix C. (~ Operate and maintain in a manner consistent with Pntdent Utilib~ Practice the facilities it will own and otherwise cooperate with LDC in the physical interconnect!on of the Plant to the LDC System in accordance with the Interconnection Agreement. (g) By October ! st of each year of the Tem~, provide Buyer and NCPA with an annual pro~ection of scheduled Outages for the foltowin~ calendar );ear. Should Seller make any changes to such projection, it will noti~; Buyer and NCPA 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 fi-om Se!ler), Seller shall consider such request in good faith and notify Buyer of its decision within seven (7) days. In no instance will Seller schedule Outages of more than twenty-four (24) hours between June 1st and September BOth during the Tenn. In connection with an)" Outage, whether a scheduled or unscheduled Outaze, Seller shall notify Buyer and NCPA, as soon as practicable, of the percentaze of Plant expected to be out of service and how !on3 the Outage is expected to last. If the Outaze is tota! and is due to failure of the Plant rather than the transmission and distribution system beyond the Point of Intercormection, Seller shall zive Buyer and NCPA at least four (4) hours notice before re-enerzizinz the Plant. In addition, Seller wil! comply with NCPA’s reasonable scheduling protocols, as they may be changed from time to time. A copy" of the current version of NCPA’s scheduling protocols, which the Parties a~ee are reasonable, is attached as Exhibit D. Buyer shall use corrm~ercially reasonable efforts to coordinate with Alameda regardin~ any requested changes to scheduled outages to avoid duplication. (h) Negotiate and enter into an Interconnect!on Agreement with LDC to enable Buyer to ~ans~t Energy received at the Point of Interconnect!on if%rough the tSO-controlled ~-id. Seller shall be responsible for and pay a!l initial non-recurring costs and charges arising under the Intercolmection A~eement (even if not actually incus-red) prior to the Commercial Operation Date in compliance with the Interconnection _’X~eement and associated rttles and requirements in place as of the Commercial Operation Date. A!l other out- ot~-pocket costs and charges related to interconnection other than these initial non-recurring costs and charges wilt be reimbursed, on a pro rata, energy basis, by the purchasers of energy fl~om the Plant. During the Term of this Agreement prior to any Expansion Plant becorning available for conm~_ercial service, Buyer will reimburse Seller for its Percentage S!~are of such other out- of-pocket costs and charges under the Interconnection _,~greement paid or required to be paid by Seller to LDC or its successor; provided, however, Buyer shall be responsible for its Percentage Share of such other out-of-pocket costs and charges under the Interco~:mection A~eement only to the extent Buyer has approved in writing, in the sole discretion of Buyer, the Interconnection Agreement, including any amendments (which shall not include changes in relevant tariffs) from time to time. Upon completion of an Expansion Plant which uses the Interconnection Facilities, such other out-of- pocket costs and charges shall be prorated, on a Percentage Share of energy basis, and Buyer’s share would be based on its Percentage Share of Energy compared to the energy of the Expansion Plant delivered to the Point of Interco~mection. Seller shall cooperate with Buyer to minimize any such costs as are to be reimbursed by Buyer. (i) Negotiate and enter into a Participating Generator Agreement and a Meter Service A~eement for ISO Metered Entities with the ISO, who is the load control area operator for the LDC System to which the Plant is interconnected. Buyer shall pay for or reimburse Seller for its Percentage Share of 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). Seller shall cooperate with Buyer to minimize any" such costs as are to be reimbursed by Buyer. (j) Coordinate all Plant start-ups and shut-downs, in whole or in part, with Buyer in accordance with ISO scheduling protocols and the reasonable protocols established by Buyer that are not inconsistent with the ISO Tariff and ISO procedures. 22SANFP~-\N 90103 [2 K) (k) Maintain an Availability Thr,~snold of seventy percent (70%). Shoula Seller fai! to maintain such an Availability Threshold, the Price applicable to Output sold and purchased during each month during which the Avai!abiiiRi Threshold is below ssvsn~T percent (70%) shall be seven and one-half percent (7.5%) bdow the Price that would otherwise be in effect pursuant to Section 2.3 until the Availability Threshold is increased to at least seventy percent (70%). Except as otherwise expressly stated in Sections ~.4 and 7.~ the foregoing shall be Buyer’s sole remedy for any shortfall of or failure to produce Output or failure to maintain any particular Availability T?,_rsshold. 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. (by Seller shall keep complete and accurate operatin~ and other records and all other data for the purposes of proper administration of the _.’4~eement, including such records as may be required by any Governmental Authority or Prudent Utility Practice. (c) Seller shal! continue to (i) preserve~ renew and keep in rut! force and effect its organizational existence and good standing, and talcs all reasonable action to maintain al! applicable Permits, rights, privileges, licenses and franchises necessary or desirable in the ordinary course of its business; and (ii) comply with a!l Contractual Obligations and iRequirements of Law applicable to Se!ler or the. Plant. (d) Prior to the date ninety (90) days following the later of (a) the date of this Agreement and (by the date of the Alameda A~eernent, Seller shall make available for review by Buyer, and its representatives, at Buyer’s offices in Palo Alto~ California, a fully executed copy of its contract with BFI, inctudin~ all exhibits, attactunents~ and other supporting documents thereto, for the purchase of Landfill Gas (the "LFG Agreement"). Such contract may be redacted to remove pricing infom~ation. If (i) Seller does not fulfill its obligations under the first two sentences of this Section 4.2(d) in the time allowed, or (it) Seller fulfills such obligations but Buyer in its reasonable discretion does not approve of the terms of the LFG Agreement, then Buyer may, as its sole remedy and without liability of one party to the other, 23 tem~inate this A~eement by written notice given no later than six7 (60) days afler Seller has i:t~Ifil!ed, or failed to fulfill, as ~he csse may be~ such obligations unde~ such fi~st two sentences. If Alameda exercises hs con-esponding right of tem~ination under the Alameda A~eemen/, then Seller shall by written notice offer Buyer the option to amend this A~eement to increase the Percentage Share to one hundred percent (100%). If Buyer does not exercise such option by ~mitten notice to Seller within sixty (60) days %l!owing such ~mitteu notice from Se!ler, then such option shall expire and Seller may, at its sole option exercised by ~,~itten notice to Buyer, ten%nate this A~eement without liability of one parb~ to the other. Other than increasin~ the amount of fuel purchased thereunder, Seller shall not allow such contract to be amended or otherwise modified, nor shall it waive or fail to enforce any of its rights thereunder, without Buyer’s prior written approval, whose approval shall not be unreasonably withheld. Seller shall make the LFG A~eement available to Buyer %r review during nonnal business hours at Buyer’s offices in Palo Alto, California tMoughout the tem~ of this Agreement within seven (7) days of a written request by Buyer. (e) Seller shall provide to Buyer such other information regarding the pem-~itting, engineering, construction or operations of the Plant as Buyer may ~om time to time reasonably request, subject to licensing or other restrictions of Seller or a third party with respect to confidemialib,, disclosure or use. (f) Seller shall enter into any agreements with the ISO required by the ISO for generators delivering power into the ISO-controlled g-rid. 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. (g) Seller shall provide Buyer with a copy of its ultimate corporate p rent s audited financial statements as at the end of its accounting year prepared in accordance with GAAP, no later than four (4) months after the end of such accounting year of such entity. Seller shall also provide, on a quarterly basis, an unaudited financial statement in the form of Appendix F, prepared in accordance with GAAP consistently applied for Seller and for Seller’s ultimate corporate parent. Such financial statements shall be certified by an officer of Seller as fairly presenting the financial condition of the Seller subject only to what would typically- be included in year-end audit adjustments and footnotes. 24SANFRoXN 90103 [2K) If, from_ time to time, an audited year-end financial statement is prepared fo_r Seller, Seller shall provide it to Buyer no later than four (4) months after the end of Seller’s accounting year. 4.3 Construction _Milestones (a) The Parties. a~ee that time is of the essence and that certain milestones ¢~Milestones") for the development, financing and cons~-ucfion Of the Plant must be achieved in a timely fashion or Buyer shall suffer damages. Seller shall provide Buyer with documentation satisfactop/ to Buyer, in Buyer’s reasonable discretion, to support the achievernent of Milestones by the dates set forth below. (b)The following events are all of the :vffles,~on,.s. (i) By the date ninety (90) days fo!!owing the date of the later of (a) this A~eement and (b) the Alameda Agreement, Seller shall have si~-~ed an LFG Agreement with BFI and have obtained Site Control. (ii)By the date twenty (20) months following the later of (a) the later of the date that (i) Buyer and (ii) Alameda approves the LFG A~eement, and (b) if applicable pursuant to Section 4.2(d), the date Buyer exercises an option to increase its Percentage Share to one hundred percent (100%) or such option expires, Seller shall (a) have obtained all Permits necessary, in final form, to conm~ence construction of the Plant and (b) have entered into an Interconnection Agreement. (iii)By the date one (1) month following the later of (a) the finalization of aI1 necessary- Permits described in Section 4.3(b)(ii), and (b) entering into an Interconnection Agreement, Seller shall have arranged financing for consm_tction of the Plant or otherwise made funds available to co~rm~ence and complete construction. (iv)By- the date twelve (12) months following the later of (a) the finalization of a!l necessary Permits described in Section 4.3(b)(ii), and (b) entering into an !.nterconnection A~eement, Seller shall have commenced construction of the Plant. (v)By the date eighteen (18) months following the arrangement of financing or availability- of funds for const~mction, Seller shall have achieved the Commercial Operation Date. 25 SANFRAN 9010-~ [2K1 (c) StartinZ on the effective date, of this Agreement, Seller shall provide to Buyer monthly prowess reports concerning the pro~ess towards completion of the Milestones. In addition, within five business days of the completion of each Milestone, Seller shall provide a certification to Buyer (along with any supporting documentation, demonstrating the satisfaction of the Milestone. Seller shall provide to Buyer additional information concerning Seller’s pros-ess towards, or confirmation of, achievement of the _Milestones, as Buyer may reasonably request from time to. time. Within seven (7) days of the later of (i) obtaining the authority to construct for the Plant i%om the applicable air qualiU management district or (ii) Seller’s receipt of the system impact and facility cost studies flom the LDC, but in no event later than the date set forth in Section 4.3(by(it), Seller shall specify the Initial Capaciu of the Plant (which sha!l be subject to the limits contained in Section 1.20). (d) Upon becoming aware that it wil!, or is reasonably likely to, fail to achieve a Milestone by the required date, for any reason including Force M~eure Even% Seller shall so noti±~, Buyer in writing as soon as is reasonably practical. Such notice shall explain the cause the delay, provide an updated date for achievement of the Milestone(s) and describe Seller’s plan for meeting the Milestone. Seller’s notice will a!so explain any impact such delay may or will have on any other Milestone, and measures to be taken to mitigate such impact. (e) In the event that a Force Majeure Event causes any delay to the achievement of the Milestones set forth in Sections 4.3(b)(iii), (iv), or (v), such Milestone’s deadline may be sxtendsd~ to~ether with any Force Majeure Event extensions for other Milestones, for a period not to exceed six (6) months. The extension of the deadline for any Mi]estone shall extend the deadline for all subsequent Milestones, provided that in no event shall the combined extensions for Force Majeure Events for any or all of the Milestones exceed six (6) months. (0 In the event that Seller fails to meet the Milestone set %rth in Section 4.3(b)(i) for any reason, Buyer may terminate this A~eement, without liability of either Party- to the other, by- giving notice to Seller in writing of such termination at any time prior to Seller curinZ its failure. Such option to terminate shall be Buyer’s sole remedy for any failure to meet the Milestone set forth in Section &B(b)(i). 26SANFILAN 90103 (2K) (g) In the event that Seller fails to meet the Milestone set forth in Section 4.o(o)[tl) for any reason. Buyer may ¯’ ~"’~ ", ,termm~e this A~reernent, without liability of either Party to t~s other, within ten (10) business days after the Milestone date by ~ivin~ notice to Ssltsr in writin~ of such tsminstion. If Seller meets the Milestone set forth in Section 4S(b)(ii) prior to Buyer ~ivin~ ~itten notice of re,nation, this A~ssmsnt shall remain in ~!! force and slYsct. If Buyer does not resinate this Aor~sm~nt within ten (t0) business day, s after the Milestone dat% Ss!!sr shall continue to pursue satis£action of the relevant Milestone and Buyer mnst ~ivs Seller six~ (~0) days notice to tsminats this A~rssment, durin~ which period if Seller cur6s such d~ct and achieves the relevant Milsston% such tsmination shall be void and this A~rssmsnt shall remain in ~11 tbrcs and effect. Such option to ts~nats shall be Buyer’s sole rsmed~ for any failure to meet ths Milestone set 1brth in Section 4.B(b)(ii). (h) In the event that Seller fails to meet the Milestone set forth in Section 4.3(by(iv) within six (4) months after the relevant Milestone date /br any reason (or up to twelve (t 2) months if also delayed by a Force Ma~eure Event), Seller may deposit an amount, per month, equal to the Monthly LD Amount into a se~-e~ated escrow account reasonably acceptable to Buyer by the first day Of such month, for every month after such date unti! the Milestone is met. Such funds will be used towards any liquidated damages as set forth in Section 7.4(c), and shall be held in escrow until such time that liquidated damages, if any, become payable to Buyer. Should the amount in the escrow account exceed the final amount of liquidated damages, such excess funds shall be returned to Seller. Should Seller (i) at any time fail to make such monthly deposits or (ii) fail to satisfy the Milestone set forth in Section 4.5(by(iv) for more than twelve (12) months, Buyer may terminate this A~eement upon written notice to Setler of such termination. Upon such termination, Seller will pay to Buyer, within thirty (30) days of the termination notice, an amount equal to the LD Amount as liquidated damages. Such Seller escrow option, Buyer option to terminate, and liquidated damages shall be Buyer’s sole remedy for any failure of Seller to meet the Milestones set forth in Section 4.3(b)(iii) or (iv). (i) Seller covenants that it will diligently pursue a!l Milestones including the Commercial Operation Date, which Seller envisions will occur within thirty (~0) months following the execution of this A~eernent. 2~ (j) In the event that any of the approvals described in Section 4.3(b)(ii) are not obtained by- the date specified in Section 4.3(b)(ii) for satisfaction of the relevant Milestone or are obtained on a basis not reasonably satisfactory to Seller, including without limitation, in the case of the air permit, approval of construction and operation of the Plant on a basis not consistent with internal combustion engines without emission controls, pollution or environmental credits or offsets, Seller may terminate this Agreement without liability of either Party to the other by-,~ ;m~ notice to Buyer, in writing of such tern-~ination; provided that such notice must be given no later than fourteen (14) days following the earlier of (a) the date on which a given approval not satisfactoo: to Seller is received in writing or (b) the date specified in Section 4.3(b)(ii) for satisfaction of the relevant Milestone; ~rther provided, that such notice and such te,q-nination shall not be effective if Buyer and Alameda each, by written notice to Seller within fourteen (!4) days following such notice fl’om Seller, a~ees (i) to pay Seller with the first invoice following the Conm-~erciat Operation Date the reasonable allt-in cost (including reasonable broker fees, if an3,) to purchase all such offsets sufficient to operate the Plant at full Initial Capacity (less reasonably projected scheduled Outages for maintenance) for the ten-,-, of this A~eemen% and (ii) to adjust equitably the price payable under Section 2.3 of this Agreement and within thirty- (30) days thereafter agrees with Se!ter in writing (each in their sole discretion) to an amendment of this Agreement revising such price. Failure to provide notice of termination by- the date specified above shall constitute a waiver of the right to terminate this A_greement as provided in this Section 4.3@. In the event that Seller exercises such termination right, Buyer shall have a right of first refusal to purchase the ou~ut of any electricity generating facility owned or controlled by Seller or its affiliate(s) located at the Landfill and ffteled by Landfill Gas. Such right of first refusal shall conforn-~ to the provisions of Section 2.5. The provisions of this Section 4.3(j) shall survive termination of this A~eement under this Section 4.3(j) for a period of five (5) years from such ten-nination. ARTICLE V BUYER’S OBLIGATION-S 5.1 Delivery and Transmission 28 SANFP~AN 90103 (2K) Except for Seller’s obligations pursuant to Sections 3. ! and 4. t(h), Buyer shal! be solely responsible tZ, r paying its P~.emag~ Share of costs ~_ charges associated with the receipt of ~,.er~v_.~ ~.., under this .~sreement,~_ at the Point of Interconnection and for the U-ansmission and deliveu of the Energy from the Point of Interconnection to any other point downs~eam of the Point of Interconnection (including, without limitation, ~-ansmission costs and char~es, competition ~ansition charges, applicable con~ol area service char~es, ~ansmission congestion char~es, inadvertent energy flows, any oilier ISO char~es related to the Fansmission of such Energy by the ISO and any char3e assessed or collected in the %~tre pursuant to any utiliE~ tariff or rate schedule, however defined, for ~ansmission or transmission-related service rendered b7 or for any ~ansmission-ownin~ or operating entity. The Northern California Power Agency (’NCPA"), acting on behalf of Buyer, shall be schedulin~ coordinator for the Fansmission of Energy from the Plant in accordance wit!~ applicable ISO ~les. Buyer’s duties as schedulin~ coordinator shall be lin~ted to those duties as are specifically required of schedulin~ coordinators in the ISO Tariff and the ISO protocols. Comm~ercial at~ansements for such transmission and deliver- services wil! be coordinated and settled by NCPA directly with the ISO or other third parties. At the option of Buyer and Alameda, to be exercised jointly, the Plant may be included within NCPA’s metered sub-system in connection with the scheduling of power over the ISO grid and related ~nctions; provided that such inclusion shall have no adverse effect on Plant operations or Seller (or any such effect shall be ~lly mitigated by Buyer and/or Alameda). Seller will do all things reasonably needed to al!ow Buyer to comply with any obligations, and minimize any potential liability, under, the ISO Tariff; provided, that if such actions require any actions beyond the giving of notice provided by Buyer, then Buyer shall reimburse its Percentage Share of all out-of-pocket costs and charges of such actions. If and to the extent that Seller I~ils to comply with the notice provision in Section 4.1(g) concemin~ Outages or with its obligations as outlined in the previous sentence, Seller shall be wholly responsible for all imbalances, deviations, or any other ISO charges or penalties associated with such Outage or ISO Tariff obligation. Buyer may, jointly with Alameda, replace NCPA as Scheduling Coordinator for the Plant. IfNCPA ceases to be Schedulin~ Coordinator for the Plant and Buyer and Alameda are unable, upon fourteen days notice from Seller, to appoint jointly a replacement Scheduling Coordinator, Seller shall have the right to appoint a replacement Scheduling Coordinator on their behalf, and Buyer and Alameda shall enter into all 29SANFKAN 90103 reasonable and appropriate a~eements with such replacement Scheduling Coordinator at their own cost. 5.2 Taxes Buyer shall pay and be fully responsible for any sales, use, ~oss receipts, utility or other taxes, assessments or fees, if any, incurred or imposed on the sale or ~’ansfer of Energy from Seller to Buyer under this Agreement. Buyer shall not be responsible for any taxes measured on the net income of Seller or ad waloJ’em taxes paid by Seller or BFI associated with the Site or the Landfi!l. 5.3 Notification of Transmission Outages Buyer wilI exercise reasonable ef~brts to provide Seller with as much advance notice as practicable of any Outage on the LDC System or other transmission or delivery" facilities which may adversely affect the delivery of Energy to Buyer. ARTICLE VI FORCE MAJEURE 6.1 Force Ma,ieure Events It is understood that at times unavoidable delays or interruptions in deliver)’ or perfon-nance may result from Force Majeure Events. The perfom-~ance of each Party under this Agreement may be subject to inten-uptions or reductions due to a Force Majeure Event. Both Parties shall in good faith use such effort as is reasonable under all the circumstances known to that Party affected by- the Force Majeure Event at the time to remove or remedy the cause(s) and mitigate the inability to perform. However, the obligation to use such reasonable efforts shall not be interpreted to require resolution of labor disputes by acceding to demands of the opposition when such course is inadvisable in the discretion of the Party-having such difficulty. 6.2 Remedial Action 3OSANF~,\N 90103 (2K) Subject to the tinitation on extensions of Milestones set forth in Section 4.3(e), a Party shall not be liable to the other Path’ if the Part?! is prevented from perfom-~ing its obligations hereunder due to a Force Majeure Event. The ParV rendered unable to fulfill an obligation by reason of a Force Majeure Event shall take all action necessao; to remove such inability with all due speed and diligence. The nonperforming Party shall be prompt and diligent in attempting to remove the cause of its failure to perform, and nothing herein shall be construed as pemittin8 that Party to continue to fai! to perform after said cause has been removed. Notwithstanding the foregoing, the existence of a Force Majeure Event shall not excuse any Party flom its obligations to make payment of amounts due hereunder. 6.3 Notice In the event of any delay or nonperfom-~ance resulting from a Force Majeure Event, the Party suffering the Force Majeure Event shall, as soon as practicable under the circumstances, noti~, the other Part,/in writing of the nature, cause, date of corma~encement thereof and the anticipated extent of any delay or interruption in perfon-nance. 6.4 Termination Due To Force Maieure Event Subject to Section 4.3(e), if a Party is prevented from performing its mat.erial obligations under this Agreement for a period of twelve (12) consecutive months or longer, the unaf~%cted Party may terminate this A~eement, without liability Of either Party to the other, upon thirty (.30) days written notice at any time during the Force Majeure Event. ARTICLE VII DEFAULT/REMEDIESiTEI~,,~,’IINATION 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 3~ thir% (30) days after written notification of breach by Seller or such lonzer period as may be necessary to curs such breach as long as Buyer is exercising diligent eiYorts to cure such default. (b) Buyer fails to make any payment due under this A~sement within thirb~ (30) days after written notice that such pa~Tnent is due. (c) The ruination of an m~olu±:~O proceemng against Buyer under the banIcruptcy or insolvency laws, which involuntary proceeding remains undismissed for sixty (60) consecutive days, or in the event of the initiation Buyer of a voluntary proceedin~ under the bankruptcy or insolvency laws. 7.2 Events of Default bv Seller (1) The following shall each constitute an ’~Event of Default" by the Seller if Seller does not cure within the time set forth in clause (2), below: (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). (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 banlcmptcy or insolvency laws, which involuntary proceeding remains undismissed ~br sixty (60) consecutive days, or in the event of the initiation by Seller of a vohmtary proceeding under the banka-uptcy or insolvency laws. (d) Seller se]ls or transfers Buyer’s share of the Output (or any individual component thereof) or Expansion Ptant Output (or any individual component thereof) or the right to Buyer’s share of the Output (or any individua! 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 temps of Buyer’s right of first refusal as described in Section 2.6 of this Agreement. 32SANFRAN 90103 (2K) (f) Subject to Section 7.4(c), Seller fails, for any reason other than an unauthorized act or omission by Buyer, to achieve the Comm-~ercia! Operation .Mll,~.to._,~ deadline as set %rth in Section 4.o(b)(v],Date by the applicable ’ ; ~ r~ such deadline may be ex~endc~u as a result o5 a Force b’faieure Event in accordance with Section (2) Time for Curs. Nothing described in Section 7.2(!)(a) above shall constitute an Event of Default if Seller cures the event, failure or circumstance within (30) days after ~,~itten notification by Buyer or such longer period as may be necessa~ to cure as long as Seller is exercising diligent efforts to cure. 7.3 Termination for Default (a) In the event the deihaulting Party fails to cure the Event of Default within the period for curative action under Sections 7.1 or 7.2, as applicable, the non- detEulting Party rnay terminate the Agreement by notifying the defaulting Party in vcriting of (i) the decision to terminate and (ii) the effective date of the termination. (b) Upon ten-nination of the Agreement by Buyer pursuant to Section 7.3(a) due to an Event of Default by Seller, (i) Buyer shall have no future or further obligation to purchase the Output of the Plant or to make any payment whatsoever under tMs Agreement, except for payments for obligations arising or accruing prior to the effective date of ten-nination, and (if) Seller shall, if Buyer has paid in f~fll for emission offsets pursuant to Section 4.3(j), either (A) reimburse Buyer pro rata for any unused such offsets paid for by Buyer or (B) transfer to Buyer title to any unused such offsets paid for by Buyer. Upon termination of the A~eement by Seller pursuant to Section 7.3(a) due to an Event of Default by Buyer, Seller shall have no future or further obligation to deliver the Output of the Plant to Buyer or to satisfy any other obligation of this A~eement, except for payments or other obligations arising or accruing prior to the effective date of termination. After the effective date of termination, the Agreement shall not be construed to provide any residual value to either Party or any successor or any other Person, for rights to, use of or benefits fi-orn the Plant to any Person. (c) Default by Alameda under the Alameda Agreement shall not be construed as a default by Buyer, and shall not give rise to any liability SANFRAN 90103 ,g2KI hereunder or to of the temination provisions set ibrth above with respect to Buyer. "7.4 Damages (a) For all claims, causes of action and damages the Parties shall be entitled to the recoveU of actual damages allowed by taw unless otherwise limited by the Agreement. Neither the enumeration of Events of Default in Sections 7.1 and 7.2, nor the tenrination of this Agreement by a non-defaulting Party pursuant to Section 7.3@), shall limit the right of a non-defaulting Party to rights and remedies available at law, including, but not limited to, clairns for breach of contract or failure to perform by the other Party and for direct damages incumed by the non-defaulting Party as a result of the teKnination of 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, specia! or consequential damages, including but not limited to 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 Section 4. l(k) 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. (c) In the event that Seller fails to meet the Con~-nercial Operation Date by the applicable Milestone deadline as set forth in Section 4.3(b)(v), as such deadline may be extended as a result of a Force Majeure Event in accordance with Section 4.3(e), Seller sha!l be liable for liquidated damages in the amount, per month, equal to the Monthly LD Amount for each fu!l month (with parts of a month pro rated) that Seller is late in satisfying the Milestone. So long as Seller is paying such liquidated damages on a monthly basis, up to twelve (12) months, Buyer shall not be pemaitted to terminate this Agreement. If after twelve (12) months fol!owing the retevant Milestone deadline Seller has failed to achieve Con-~nercial Operation, or if for any reason Seller fails to pay, or discontinues paying, the monthty liquidated damages provide for above, Buyer may terminate this Agreement by written notice to Seller. This twelve (12) month period shall not be extended as a result of a Force Majeure Event. Upon such termination, Seller shall pay Buyer, within thirty (30) days of the 34 SANFP~,\N 90103 (2K) termination notice, a lump sum equal to the L© Amount. No other damages or remedy shall be available to Buyer on the basis of such ~%ik~re to meet the Milestone ~et foKh in Section ’~ ~(~w~,~.oase~....~.~ ,~./1,.~ or temination of this Agreement~ d on failure to ~chisvs Cm~srcial Operation within tws!vs (12) months of that Mi!sstons deadline. (d) The Parties a~ee that the liquidated damages set %rth in Sections 4.3(h) and 7.4(c) are reasonable and represent a fair and genuine estimate of the damages Buyer wil! suffer upon the failure of Seller to achieve Con-m~ercial Operation by the agreed upon date(s). The Parties acknowledge that it would be impracticable or ex~emely difficult to fix Buyer’s actual dan,ages, and therefore have deemed the liquidated damages set forth above to be the amount of damage sustained by Buyer upon such a failure. The Parties #arther a~ee that payment of such amount shall be as liquidated damages and not as a pena!t).,., and is therefore not subject to avoidance under California Civil Code section 1671. 7.5 Indemnification Seller and Buyer agree to defend, indemnifT, and hold each other, and their respective officers, directors, employees and agents, harmless from and against all claims, demands, losses, liabilities, and expenses (including reasonable attorneys’ fees) (collectively "Damages") for personal injuw or death to persons and damage to each other’s physical property or facilities or the property of any other Person to the extent arising out of, resulting from, or caused by the negligent or intentional and wrongfl.tl acts, errors, or omissions of the inden-mifying Party. This indemnification obligation shall apply notwithstanding any negligent or intentional acts, errors or on:fissions of" the inden-mitees but the indermifying Party’s liability to pay- Damages to the inden-mified Party shal! be reduced in proportion to the percentage by which the indernnitees’ negligent or intentional acts, errors or ornissions caused the Damages. Neither Party shall be inderm-~ified for its Damages resu!ting.fi-om its sole negligence or willfffl misconduct. These indemnity provisions shall not be construed to relieve any insurer of its obligation to pay claims consistent with the provisions of a valid insurance policy. 7.6 Buyer’s Right to Operate SA N FR-.\N ~0103 If Seller (i) fails to maintain the Availability Threshold for a period of nine (9) months in an); twelve (12) month period, or (it) I’ails to generate Energy for sixb; (60) consecutive days, then Buyer or its designee may, but shall not be obligated to, step-in and assume operational control from Seller of the Plant; provided that Buyer shall not be pern-~tted to step-in and take control so long as Seller or any of Seller’s Lenders are using con:m~_ercially reasonable eft~orts to remedy the t~ailures described in (i) or (it) above. Buyer, its emp!oyees, con_n;actors and designees shall have the urnestricted right to enter the Plant to the extent necessai3, to operate the Plant. Upon the exercise of this right, Buyer or its designee shall at all times operate the Plant using Pntdent UtiliU Practice and shall comply, to the extent con-m~ercia!ly practicable, with the tem-~s of this A~eement and the terms of the Alameda Agreement. Notwithstanding the foregoing, Seller shall not be excused from any obligation or remedy available to Buyer as a result of Buyer’s operation o~% or election not to operate, the Plant. Buyer shall pay Seller the applicable rate for Output provided hereunder, less any costs incuz~red by Buyer to operate the Plant. Prior to assuming operational control, Buyer shall consult with Alameda. In the event that Alameda has, and desires to exercise, the right to step-in and assume operational control of the Plant under the Alameda A~-eement, Buyer shall not exercise its rights hereunder without Alameda’s written consent. Buy-er and Alameda may- exercise their step-in rights jointly. Buyer shall inden-n~ify and hold Seller bare, less from any liability to third parties (including Alameda) arising out of Buyer’s failure to operate the Plant using Prudent Utility Practice. Upon Buyer’s satisfaction that Seller has the ability to operate the Plant in accordance with this Agreement, Seller shall resume operational control. 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 written notice of such refusal to finance, Buyer shall have the following options: (1) tel-n~inate this Agreement without liability of one Party to the other; (2) renegotiate this Section 7.6 with Seller and Lender(s) in a manner mutually acceptable; (3) delete this Section 7.6 in its entirety (which deletion will not require Seller’s additional consent); or (4) arrange for financing for the Plant under materially- equivalent tenons and conditions as the Lender(s) were prepared to provide but for this Section 7.6. If Buyer fails to elect and complete one of these options within sixty (60) days of written notice flom Seller, Seller shall have the right to terminate this ANcement without liability of one party to the other. If Alameda elects to terminate the Alameda 36SANFRAN 90103 (2K) Agreem_ent under Section 7.6 of the Alameda A%eement; Seller shall offer in writing to Buyer Alameda’s Percentage Share. If Buyer fails to accept Alameda’s Percentage Share in writing within six7 (60) days,, Seller may telw~inate this Agreement without liabili~ of one Party to the other. ARTICLE VIII R_EPRESENTATIONS AND WARRANTIES 8.1 Seller’s Representations and Warranties Seller represents and warrants to Buyer that as of the date of execution of this Agreement: (i)Seller is duly organized and validly existing as a limited liabiliU company under the laws of Delaware, and has the lawfftI power to engage in the business it presently conducts and contemplates conducting in this Agreement and Seller is duly qualified in each jurisdiction wherein the nature of the business transacted by it makes such qualification necessary; (ii)Seller has the legal power and authorib~ to make and CmTy out this Agreement and to perform its obligations hereunder; al! such actions have been duly authorized by all necessmT proceedings on its part. As of the date of execution hereof, (a) the Plant shall on the Con-~-nercia] Operation Date be a "qualifying small power production facility" as that term is defined in Section 3(!7)(C) of the Federal Power Act, and wil! possess al! of the exemptions from regulation provided in 18 CFR Sections 292.601 (c) and 292.602; and (b) this A~-eement is not required to be filed with FERC and no approval (except with respect to "quali~ing small power production facility" status) with respect to this Agreement is required from FERC. In the event that the Plant is not a "qualifying small power production facility" on the Commercial Operation Date or any date thereafter, Se]]er 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 Artic]e IX of this Agreement; 37SANFJ:U\N 90103 (2K) <iii)Theex~uuo~’~ ~ :1, delivery and per%nuance of this Agreement by Se]Ier will not conflict with its governing documents, any applicable !aws, or any covenant, agreement, understanding, decree or order to which Seller is a party or by which it is bound or affected; (iv)This Agreement has been du!y and validly executed and delivered by Seller and, as of the date first set forth herein, constitutes a legal, valid and binding obligation of Seller, enforceable in accordance with its ten-ns against Seller, except to the extent that its enforceability n-my be limited by bafl(ruptcy, insolvency, reorganization, moratorium or other similar taws affecting the rights of creditors generally or by general principles of equib’; and There are no actions., suits, proceedings or investigations pending or, to the knowledge of Seller, tMeatened in writing against Seller, at law or in equip- before any Governmental Authorib-, 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 impain-nent of Seller’s ability to perfom-~ its obligations under this Agreement. 8.2 Buyer Representations and Warranties Buyer represents and warrants to Seller that as of the date of execution of this Agreement: (i)Buyer is The City of Palo Alto, a chartered city and 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 and Buyer is duly qualified in each jurisdiction wherein the nature of the business transacted by it makes such qualification necessary; (ii)Buyer has the legal power and attthority to make and caggy out this Agreement and to perform its obligations hereunder and all such actions have been duly authorized by- all necessaT proceedings on its part; (iii)The execution, delivery and performance of this Agreement by Buyer will not cot~flict with its governing documents, any applicable laws or 3~ SAHFRAN 90103 {2K) any covenant, a~eemen% understanding, decree or order to which Buyer is a pal~,; or by which it is bound or m%~cted; (iv)This A~eement has been du!y and validly executed and delivered by Buyer and, as of the first date set forth herein, constitutes a legal; valid and binding obligation of Buyer, enforceable in accordance with its ten~s against Buyer, except to the extent that its enforceabilib,~ may be limited by bank_mptcy, insolvency, reorganization, moratorium or other similar taws affecting the rights of creditors generally or by genera] principles of equity; and There are no actions, suits, proceedings or investigations pending or, to the ~:owledge of Buyer, tlm-eatened in writing against Buyer, at law or in equity- before any Governmental Authority, which individuaJly or in ¯"t] ,~c- ,um aggregate are reasonably- ~ikelv.. ~ to have a nmteria!lv., adverse erzect on the business, properties or assets or the condition, financial or otherwise~ of Buyer, Or to result in any impaim~ent of Buyer’s abilib~ to perfom~ its obligations under this A%eement. ARTICLE IX NO CHANGE TO P,~&TES, TEPd~,IS OR CONDITIONS _,,No change may be made to the rates, terms or conditions of this Agreement at the request of any Party, or by FERC acting s~.:a sgo~-zte on behalf of any Par~; except as required by FERC in the public interest. To that end and to the extent any such rights exist, each Part,./- waives any and a!l rights to seek changes to the rates, ten-ns and conditions contained in this Agreement pursuant to sections 205 or 206 of the Federal Power Act or otherwise. The temps of this Agreement shall be interpreted as being fixed and subject only to the "public interest" standard of review, consistent with the interpretation by the Federa! Energy Regu]ato~T Colrmaission of L&it~d Gas Pipe £i~ze Co. v. Mobile Gas Svcs., 350 U.S. 332 (!956), and F.P.C. v. Sierra Pac. Po~ver Co., 350 U.S. 348 (1956), as of the date of execution of this Agreement. ARTICLE X MISCELLANEOUS 39 SANFRAN 90103 {2K) 10.1 Assignment The rights and obligations of this A~eement may not be assi~,ed by either Party without the prior written consent of the other Party, which consent shal! not be unreasonably withheld or delayed. Notwithstanding the foregoing, Seller may ~_~se subcontractors without Buyer’s consent to comply with the tenrts of this Agreement provided that notwithstanding the use of said subcontractors, Seller shall remain responsible for all its obligations under this Agreement. Buyer may furthenaore use any agent it so designates for scheduling and billing purposes, so !ong as Buyer remains responsible for al! of its obligations under this Agreement. 2uay p~_~rported assignment of this Agreement in the absence of the required consent, except as provided in 10.2, shall be void. 10.2 Financing Notwithstanding Section 10.1, Seller may, without the consent of Buyer, co!latera!Iy assign its rights under this Agreement to Lenders as collatera! security in connection with any thna~n_cing of the 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, s~ach Lender also sha!l be bound by all of Seller’s prospective obligations under this Agreernent. Notwithstanding any such assignment, Setler’s obligations under this Agreement shal! continue in their entire% in 15_tl! force and ef~-%ct and Seller shall remain 15_tlly liable for all of its obligations under or relating to this Agreement. Each such collateral assignment m:td any purchaser or transferee shall be subject to Buyer’s rights and defenses hereunder and ~,mder applicable law. Seller shall provide prior written notice to Buyer at least seven (7) days prior to any such collateral assignment. In order to facilitate the obtaining of financing of the Plant, Buyer shalI execute, upon request, a con-n-nercially reasonable consent to assignment, with respect to a collateral assignment hereof to Lenders in connection with the documentation of the financing or refinancing for the Plant. Any assi~-m~ent in violation of this A~-eement shall be void, a~ i~itio. Buyer shall consider in . good I:aith 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. SANFR2vN 90103 10.3 Notices Any notice, demand, request, or conm~unication required or authorized by this A~eement shall be delivered either by hand, facsimile, overnight courier or mailed by certified mail, retm.n receipt requested with postage prepaid, to: The City of Pa!o Alto 250 Hamilton Aventte, Third Floor Palo Alto, CA 94301 Attention: Senior Assistant City Attorney / Utilities Telecopier: (650) 329-2946 on behalf of Buyer; with a copy to: The City of Pa!o Alto 250 Hamilton _&venue, Third Floor Palo :Alto, CA 94301 :Attention: Director of Utilities Telecopier: (650) 329-2946 and to: Northern California Power Agency 180 Cirby Way Roseville, CA 95678 Attention: Power Contracts Administrator Telecopier: and to: 916-78!-4255 Ameresco Keller Canyon LLC c/o Ameresco, Inc. 111 Speen Street, Suite 410 4IS2-.NI:P.AN q0103 {2K) Framingham, MA 0 ! 701 Attention: General Counsel Telecopier: (50S) 661-2201 Telephone: (if08) 661-2200 with a copy to: Ameresco Keller Canyon LLC cio Ameresco, Inc. 1 ! ! Speen Street, Suite 410 Framingham, MA 01701 Attention: Vice President, Renewable Energy Te]ecopier: (508) 661-2201 Telephone: (508) 661-2200 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 10.3. Any such notice, demand, requesL or comm_unication shall be deemed received (i) if delivered by hand by a Party or sent by facsimile or (ii) upon receipt by the receiving Party if sent by courier or U.S. mai!. 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 Part~~ 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, including Alameda, so as to constitute any such Person a third-party beneficiary tinder the Agreement, or of any one or more of the te~_-rns hereof, or otherwise give rise to any cause of action in any Person not a Party hereto. "!.2 SANF~N 90103 (2K} 10.6 No Dedication No undertaking by one ParD’ to the other under at~y provision of the A~-eement sha!I constitute the dedication of that Party’s system or any portion thereof to the other Party or to the public or affect Se!]er as an independeni entiT and not a public utility. 10.7 Entire A2reement: InteRration This Agreement, together with a!l Appendices attached hereto, constitutes the entire agreement between the Parties and supersedes any and al! 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 in ;~-iting and signed by a du!y authorized officer or representative of the Parties. 10.8 10.9 Applicable Law The A~eement is made in the State of California and sha!l be interpreted and governed by the laws of the State of California and/or the laws of the United States, as applicable. Venue The Parties hereby submit to the exclusive jurisdiction of the iZderal courts for the Northerr~ DisUict 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 San Francisco, 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 shalt 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. 43 S..\NFP, AN 90103 {2K) Seller and Buyer shall not have any right, power or attthority to enter into any a~eement or undertaking ibr, or act on behalf of, or act as or be an agent or representative of or otherwise bind the other Parb~. 10.11 Good Faith and Fair Dealing; Reasonableness The Parties agee to act reasonably and in accordance with the principles of good faith and fair dealing in the perfom~ance of this Agreement. Unless expressly provided otherwise in this Agreement, (i) wherever the A.,r,~ement requires the consent, approval or similar action by a Path,’, such consent, approval or similar action shall not be unreasonably withheld or delayed, and (it) wherever the Agreement gives a Party a right to detent, the, require, specify or take similar action with respect to matters, such deten:nination, requirement, specification or similar action shall be reasonable. 10.12 Severabilitv Should any provision of the Agreement be or become void, illegal or unenibrceable, the validity or enforceability of the other provisions of the Agreement shall not be affected and shall continue in ful! 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 con-espond as closely- as possible to the sense and purpose of the affected provision. 10.13 Confidentiality All infom~ation disclosed by Seller, including without limitation all engineering documents, designs, specifications and financial information, shall be kept confidential and shall not be disclosed to any third party except as provided in this Section 10.13. Buyer aclmowledges Seller’s request to hold all information regarding this A~-eement confidential. 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 Records _’Act and the Brown Act). Notwithstanding the foregoing, either Party may disclose this Agreement to BFI or its representatives, the Northern California Power Agency or its representatives, or to Lenders or potential Lenders or their representatives; provided that prior to such disclosure, the recipient shall agree in writing to keep the material confidential 44SANFK&N 90103 (2K) under tem~_s no less .sn-ingent than as set forth m this Section 10.13. Buyer also shall be pen>_itted to disclose this A~eement and related infom~ation to the City Council of Palo Alto and/or the Cib~ Council of Alameda ~or m~ express purpose of obtaining approval to execute this A~<n~n.. provided that in connection with such disc!osurs Buyer shall on!y disclose such infommtion to the extent required by CMitbmia law (includin~ without limitation, the California Constitution, the Califomia Public Records Act and the Brown Act). Each Parb~ shall be bound by its obligations of confidentiality hereunder ~br a period of two (2) years fl~om ~ " "r "_tms~xp~_auon or any earlier tem~ination o£ ~ Az~e~m~m. ~otwithsmnding anF~hmg ~o the conma~ in this Section ~9 ~ nothing shall resnict any Par<v ~om using or disclosing con~den<ial information in any manner it chooses whid~ (i) is or becomes generally available to the public other than as a result of a disclosure directly or indirectly by ~he disclosing Party oz its representafive~ (it) was within ~he using or disclosing P~rty~s poszession prior to it being ~%mished hereunder~ provided ~hzt suoh in~%zmafion is not subject to another con~dentia]i~y agreement with~ or other contrac~m]~ legal or ~duciary obligation of confidenfia!i~¢ to~ any other party with resp~c~ to such infom~stion~ (iii) is rightzhflly obtained by a Pa<ty from third pz<~ies authorized to make such disclosure wizhoutres~cuon~~- ~ ¯ oz (iv) is legally required to be disclosed by judicial or othe~ governmental action as determined by such P~r~y~s attorney acting in good faith (including~ bu~ not limited to~ ~he California Constimtion~ th~ Cali~%mia Publi~ ~ coras A~t and ~h~ Brown Act)~ provided that prompt notic~ of said judioiM or other gowmmental action shall have been given to the non-disclosing Party and that the non-disclosing Party shal% at its sole oos~ and expense~ be aff%rd~d th~ opportunity (~onsistent with the l~ga! obligations of the disclosing Par<y) to ~xhaust all reasonable legal ~ ~renames to maintain the confidential infom~ation in confidence. 10.14 Cooperation The Parties agree to reasonably cooperate with each other in the implementation and perfom~ance 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 Counterparts 45SANFRAN 90103 This Agreement may be executed in two or more cozm~e~_-par~s and by di±’i-erent Parties on sepa_rate counterparts, a!l of w!~ich shall be conside~ed orie a>_d the sanq_e a~eeme>_i and eact~_ o~; which shall be deemed ar~ original. 46 SANFRAN 90103 (2K) IN WITNESS WHEREOF, the Parties have ~.~u~,~d~ ~ this A~,.ement_ ~ ’ ’ to be duty executed as of the da).,- and year first above written. .~MERESCO KELLER CANYON LLC By Amere, sco. Inc., its ~1a member THE CITY OF PALO A_LTO APPROVAL AS TO FOP_M: By:. Name: Grant Koiting CITY OF PALO A_I.,TO APPROVAL BY ADPIINIST~,ZTIVE SERVICES D!KECTOR~:~ ~ ~ By: , Name: Car! Yeats Adn~nistratbt’e Se~.-~ces DirectorTitle: Date: CITY OF PA.LO ALTO APPROVAL MANAGER CITY OF PALO A.LTO .&P P ROV~.T,~S DIKECTOR Name: Joi~u Ulrich Title: Uti!iti,~s Di,-ector CITY OF PALO ALTO APPROVAL BY MAYOR: Title: "City Manager Date: Name: Jim Butch Tit!e: Mayor ~/ / CERTIFICATE OF ACKNOWLEDGMENT On ~J~Y ~7 Aoo~~.bed%reins..J=~;~4. i!,~i~r~: ~anotary public in and ibr said County, p~rsonaJy appeared ~ ~ ~ ~ ~z ,$ n ~ z~ ; personalI~ Imown to me (or proved to m~ on th~ b~sis of satisfactory ~videnc~) to be the p~rson(s) whose name(s) is/are subscribed to the within instntment and acl~owled~ed to me that he/she/they executed the same in hisihefftheir authorized capadty(ies), and that by his/her!their si~ature(s) on the instpament the person(s), or the entity upon behalSofwhich the person(s) acted, executed the inst~tmsnt. WIT~SS my hand and offici!l seal. Simmthre of Nora<v Public SANFRAN 90103 (2K) APPENDIX A Seller shall provide to Buyer fin!l Site Drawings p~_’ior to the Commercial Operation Date. SANFRAN 9i! i 03 {2g-) APPENDIX B FOR),I OF ATTESTATION Ameresco Keller Canyon LLC Environmental Attribute Attestation and Bi!l of Sale 9_meresco Keller Canyon LLC (".<meresco") hereby sells, ~ans~:ers and delivers to ("Customer") the Envffom:~.ental Amibutes and Envirovm~entat Atn’ibute Reporting Rights associa:ed with the generation of the indicated energy for delivery to the grid (as such r.enn(s) are de’Ymed m the (Jdenfi~! con,v..-act) (~e "Conn’act’) dated ,200 between Ameresco and Customer) arising fiom the generation for delivery ~o the grid of ~l’_,e energy by ~he Facility described below: FaciliV :,-.,arise and location:Fuel Capaci;u (MW):__Operational Da~s: (Sor .~ciliv that has added renewable capacit2/, show operations! date and amount of new capadV) As applicable: CEC Reg. no. __ Energy Adnd_n.. iD no. __ Q.F. ID no. __ Dates MWhs ~:enerated 200 2O0 2OO i~ the amount of one Envirm~’,ental Amibute or its equivalent for each megawatt horn" generated; and .~meresco if:tiber attests, wan’ants and represen,:s as Ib!lows: i)to the best of its ~mowledge, d’.e kn_fom-..ation provided b_erefia is n-~e and correct; ii)its sale to Customer is its one and o:~y sa!e of the Envirommenta! Attributes and associated EnviromnentaI A~-ibute Reportff~g R.ights referenced herein; iii)the Faci!it-y generated and delivered to the grid the energy h~. the amount k, adicated as undifferentiated energy; and [check one:] __ iv) Ameresco ovms the FacfiiD’. to the bes~ of Ameresco’s knowledge, each of the Environmental Attributes and Enviromm.enta! Attribute Reporting Rights associated with ~he generation of the indicated energy for delivery to the grid have been generated and sold by the Facility. Tb~s se~wes as a bi!l of sale, transferring _~:om~m~eresco to Customer all of ~aneresco’s righ,~, title and interest kn and to the Envirom~.enta! At~a-ibutes and Envirom~ental A.w:ibute Reporting Rights associated with the generation of the energy for delivet3~ to the grid. Contact Person:tel: 1-508-661-2200; fax: 1-508-661-220! WITNESS MY I-L~ND, ~2vIERESCO ICELLER CANYON LLC By: Ameresco, Inc., its sole member By Its Date: B-1 5OSANFRAN 90103 IN SURA: . CE COVEK,&GES At its own expense, Seller shall secure and maintain during the Term the followfng insurance with the coverage amounts indicated fbr occurrences during and arising out of Seller’s perfommnce of this Agreement. Such insurance shall be placed with responsible and reputable insurance companies in compliance with Requirements of Law applicable to Seller. Vv~or!cers’~ ~ ..~ .. .-Comp,.n~a~on;Emolo-ve, s Liability. Seller shall maintain Workers’ Compensation Insurance and Employer’s LiabiliU- Insurance which comply with Requirements of Law applicable to Seller. Automobile Liability. Seller shall maintain Automobile Liabilib; Insurance in compliance with Requirements of Law applicable to Se!ler, including coverage for owned, non-owned and hired automobiles for both bodily bjuu (including death) and property damage, including automobile liability contractual endorsement and uninsurediunderinsured motorist protection endorsements. Third Party Liabili~. Se]ler sha!! maintain third party liability insurance in compliance with Requirements of Law applicable to Seller on a project-specific basis covering against legal responsibili~ to others as a result o5 bodily injury; properb’ damage and personal mjury arising from the operation and maintenance of the Plant. Such policy shall be written with a limit of liability not tess than $10,000,000 and a deductible not to exceed $10,000. Such liability- may be in an); 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 sha!l not contain exclusions for punitive or exemplary damages. 51SAN FP~\ N 00103 APPENDIX D ,5CHEDE, LIN G PROTOCOLS ’9 Prior to th-ee (3) wo~_-kdays before the end of a month, Seller is to provide to NCPA and Buyer a monthly forecast of loads and/or generation for the following month. At a ~-~nimun-~, month]y -~~zOgeOa~[S will be hourly kilowatt (k%~r) values by weekday, Saturday, and Sunda)oiHoliday. No later than 14:00 each Thursday, Seller is to provide a forecast of loads and!or generation for the following week to the extent ditTerent fi-om the monthly forecast in Para~aph 1. Weekly forecasts will be hourly ]<~W values for each hour of the week. Daily modifications to forecasts. E~ff~_less otherwise mumally a~eed, Seller may make changes to the Weekly forecast b)" providing such changes to NCP~_ prior to 08:00 two (2) workdays before the active scheduling day. a. Example: For power that is scheduled for generation or delivery on Thursday, bfarch 29, changes must be subm_itted to NCPA no later than 08:00 on Tuesday, March 27. Hourly modifications to active schedules. Unless otherwise mutually aNeed, Seller may make changes to active schedules by providing such changes to NCPA with a n-~inimum of 4 hours notice before the acti-ve hour to be changed. Changes to active schedules are limited to ea.~o (2) changes per day, excluding forced outages, unless otherwise a~-eed to between the parties. One request for a schedule change, of one hour or multiple hours duration, constitutes one schedule change. a. Example For power that is scheduled for generation or delivery in hour ending 15:00 (for the period from 14:0! to 15:00), changes must be subn-fitted to NCPA .no later than 11:00. NCPA is to be notified of all planned or forced generation outages. At Seller’s request, iNCPA will modify generation and load schedules for unforeseen circumstances in accordance with the above scheduling timeline constraints and NCPA Schedule Coordination Agreement. 52 SAbIFP,~AN 90103 (2K) "7’All no~ices and schedules -~re to be subrnkted to NCPA by phone: ~%x or _,oho~,Inz persons: Cruet_ Dispstcher/’$cheduler. In the absence of ibrecasts and schedules as no~ed above: NCPA wi!l utilize ~b.e most cm-r_ent information provided by Seller in ~he development and submission of schedules. ~3 E_..~.~MPLE FOILM OF DA_, -:-~_,-4_D S CHEDULE f~or: June__, 2004 Hour Ended: 1 9 I0 II 14 i"7 i_9 20 23 ~4 Expected Capabilib7 -? 9 ? ? Expected DaiIv Temperatures, F Contact Informatim~" Scheduling Coordinator: Facilit,i: CITY: High SANFRAN 90103 (2K) APPENDIX E PERFORz..MANCE TEST The Seller shall coordinate and schedule, with Buyer and Alameda, a Perfon-nance Test after completion of a!l equipment startup and corn_missioning activities. This p~nomm~_ce test may be per~om~ea beIore completing punch !ist items. Buyer and Alameda shall be pem~i<ted to wimess <he PerzZmmnce Test, including access to and copies of control room logs, con~o! system display screens, and instrumentation data tbr a reasonable period of time before, during and after the Perfo~>_ance Test, and may also concun-enfly conduct a site inspection of the Landfill and Plant and associated facilities, systems and equipment. Seller shall supply a written copy of ~he Perfommnce Test results to both Buyer and Alameda within five (5) business days fol!owing the conclusion of the test. The Performance Test shall continue for one hundred twenty (i 20) consecutive hours (the "Test Period") to demonstrate the following: 1) Net Generator Output: The power output for each generator shall be recorded for the Test Period to veri2) the net initia! capacities. This Perfom-mnce Test shah be perfom-~ed for all engine/generators simultaneously and will be considered successSal if the average net output for the Test Period is equa! to eigh%7 percent (80%) of the net Initia! Capacity designated in this Agreement. Al! power measurements sha!l be based on a power factor of 0.90. 2) Compliance: The Perfom-~ance Test shall also demonstrate the ability of the Plant to comply with a!I material safety, system reliability, environmental, and other requirements of its permits, tMs Agreement, any interconnection agreements, and the LFG Agreement. APPENDIX F SELLER’S SAMPLE QUARTERLY FINANCIAL STATEMENT Balance Snc,.Ls December 3 !, 2003 and 2002 ASSETS Current assets: Cash and cash equivalents Res~icted cash Accounts receivable Prepaid and other cttrrent assets Total current assets Other assets: Project assets, net Due from member Debit issuance costs, net Total other assets LIABILITY AND MEMBER’S EQUITY Cunent liabilities: Cun’ent portion of long-tem~ debt Accounts payable Accpaed expenses Total cunent liabilities Long-tem~ liabilities: Long-term debt, !ess cunent portion Defened tax liabi]ities Total !ong-tenn liabilities Member’s equity RevenLies ~ Electricity Sales Costs of revenue: Operation and maintenance Depreciation ofprc~ect assets Gross profit (loss) Operating expenses: Selling: general and administrative Operating income (!oss) Ih,~teres[ and other financing costs hcome (loss) be£ore tax benefit (provision) Income tax benefit (provision) Net income (loss) SANFRAN 90103 Statements of%asn~- ~ ~lows. Years Ended December 3 i, 2003 and 2002 Cash flows iTom operating activities: ,.’Net income (loss) Adjustments to reconcile net inco~ne (loss) to net cash provided by operating activities: Depreciation and amortization .,-m~lOI l.I/~[lwl~., Ol de:&n:ed Issuance costs Defe~Ted taxes Change in assets and liabilities: (~creass) d~creas~ in: Accounts receivable Prepaid ~xpsnses Accounts payable Due to (from) member N~t cash provided by operating activities Cash qows f!-om investing activities: Accounts pa)~able relating to construction activity ,-~.,~.,~d expenses relating to construction act!v~Fy Purchase of project assets Net cash used in investing activities Cash flows fi-om financing activities: Increase in res~-icted cash Capital contributions Distributions to member Proceeds f!-om debt issuance Debt issuance costs Net cash provided by financing activities Net increase in cash and cash equivalents Cash and cash equivalents, beginning of year Cash and cash equivalents, end of year Supplemental disclosure of cash flow information: Cash paid during the year for: Interest Lncome taxes Supplemental disclosure of noncash transactions: Accrued purchases of project assets SANFRAN 90103 {2K}